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Krugman Can't Understand How Someone Could Be So Stupid As To Believe What He Used To Believe

Tyler Durden's picture




 

Submitted by Robert Murphy via The Ludwig von Mises Institute of Canada,

Over at CafeHayek, Russ Roberts is mystified at a recent Paul Krugman blog post. Concerning the debate over whether the US federal government should extend unemployment benefits, Krugman wrote on January 12:

There’s a sort of standard view on this issue, based on more or less Keynesian models. According to this view, enhanced UI actually creates jobs when the economy is depressed. Why? Because the economy suffers from an inadequate overall level of demand, and unemployment benefits put money in the hands of people likely to spend it, increasing demand.

 

You could, I suppose, muster various arguments against this proposition, or at least the wisdom of increasing UI. You might, for example, be worried about budget deficits. I’d argue against such concerns, but it would at least be a more or less comprehensible conversation.

 

But if you follow right-wing talk — by which I mean not Rush Limbaugh but the Wall Street Journal and famous economists like Robert Barro — you see the notion that aid to the unemployed can create jobs dismissed as self-evidently absurd. You think that you can reduce unemployment by paying people not to work? Hahahaha!

Before continuing, let’s be clear at the rhetorical devices Krugman uses here. First, he sets it up as the “standard view” that extending unemployment benefits (in a depressed economy) will boost job growth, through Keynesian demand-side effects.

Then, Krugman racks his brains trying to figure out how somehow could possibly disagree with this “standard view.” He says “I suppose” you might worry about the larger budget deficit that this would cause. He doesn’t offer any other possible mechanism by which someone might oppose it.

Finally, Krugman says that that’s not the argument that opponents are using. Instead, they are relying on a supply-side argument, claiming that it would reduce the incentive to work if you paid people not to work. In the context, it is clear that Krugman thinks this is NOT a good objection to the “standard” Keynesian view.

Against this backdrop, then, Russ Roberts is simply astounded because we can turn to Paul Krugman’s own (recent) books to elucidate this very argument–the one that “right-wingers” such as Robert Barro are advancing, much to Krugman’s horror. For example, in the 2010 edition of Krugman’s Essentials of Economics he writes:

People respond to incentives. If unemployment becomes more attractive because of the unemployment benefit, some unemployed workers may no longer try to find a job, or may not try to find one as quickly as they would without the benefit. Ways to get around this problem are to provide unemployment benefits only for a limited time or to require recipients to prove they are actively looking for a new job.

And, in the 2009 edition of Krugman’s textbook Economics he writes: “Generous unemployment benefits can increase both structural and frictional unemployment. So government policies intended to help workers can have the undesirable side effect of raising the natural rate of unemployment.”

So we see here, that the type of supply-side argument that Barro et al. bring up is one that Krugman himself endorses. Indeed, this is literally the “standard view on the topic.”

To be sure, a Keynesian like Krugman could argue that in the middle of a big economic slump that such supply-side issues are of only minor importance, and get trumped by demand-side factors. But that’s not at all the argument Krugman is making in this latest blog post. Instead, he is making it sound like Barro et al. are grasping at straws, and not even relying on a coherent argument (such as fear of bigger deficits) when trying to oppose extension of unemployment benefits.

Krugman does this in other contexts, too. To take just one other example: He has coined the terms “confidence fairy” and “invisible bond vigilantes” to mock economists who believe that investors might worry about rising government debt levels, and consequently favor faster action on bringing down deficits even though market interest rates are quite low for US government debt. Yet back in 2003 Krugman wrote:

With war looming, it’s time to be prepared. So last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I’m terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits.

My point in the present post isn’t to accuse Krugman of outright contradictions, or to say he’s forbidden from ever changing his mind.

Rather, my point is that Krugman frequently accuses his opponents of being stupid and/or evil, when they present a view that he himself advanced in other circumstances. His typical readers would have no idea that Krugman once worried about bond vigilantes, or that his books lay out the standard case for why generous government unemployment benefits might contribute to structural unemployment. No, Krugman has led such typical readers to believe that anyone espousing such views is either a complete idiot–immune to theory and evidence that we’ve had since the 1930s–or is a paid shill who hates poor people.

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Fri, 01/17/2014 - 20:05 | 4342685 madtechnician
madtechnician's picture

Not sure that anybody did ever believe in his beliefs apart from a few irrelevant brain dead WSJ readers ?

This guy is fucking irrelevant. Move along.

Fri, 01/17/2014 - 20:08 | 4342707 Renfield
Renfield's picture

Thanks. I debated whether even to click on the thread, then figured it was worth it to give the Tylers some feedback.

Voted "1" on celebrity analyst coverage.

Fri, 01/17/2014 - 20:14 | 4342739 MrTouchdown
MrTouchdown's picture

Hey now! Krugman is by far my most favoritest rabid weasel of a man. I just love watching a terrible human being debase himself.

Fri, 01/17/2014 - 20:40 | 4342821 Rick Blaine
Rick Blaine's picture

Not that it is directly related to economics, but my personal "favorite" is when Krugman blamed the Tea Party for the shooting of Gabrielle Giffords.

 

Sure, it seems that Loughner was really just an insane person overall, and his political views were all over the map...

 

...but at the time, his personal webpage (or Facebook page or something) listed his two favorite books as Mein Kampf and Marx's Communist Manifesto.

 

I'm not a huge fan of what the Tea Party has become (it was different early on), but I'm pretty darn sure that the Tea Party should NOT be blamed for the actions of anyone who lists those two books as their favorites.  Maybe that's just me...

 

No, Krugman never apologized as far as I know.

Fri, 01/17/2014 - 20:47 | 4342838 MagicHandPuppet
MagicHandPuppet's picture

Where do I apply for that "Paid shill who hates poor people" job?  I think I could be a natural!

Fri, 01/17/2014 - 22:13 | 4343010 NoDebt
NoDebt's picture

Some may have noticed by now that Krugman is a sociopath with economics training.  Up, down, left, right.... doesn't matter.  What he said last week or years ago doesn't matter.  What drives him is that he always feels under attack so he is always ON the attack.  And he is NEVER wrong.  Ever. 

You'll win more arguments with your spouse than you ever will against him.

 

Sat, 01/18/2014 - 10:35 | 4343775 kridkrid
kridkrid's picture

A couple of years ago, I read the book "Psychopath Test" by Jon Ronson. It's a quick and entertaining read, if anyone wants to give it a go. It sparked an interest on the subject for me, a lot more reading, a bunch of documentaries and lots of thought. Simple conclusion; clearly the world is run by sociopaths. At the highest level of a vast majority of institutions you will find sociopaths in charge... government, media, academia, industry, military, religion. The characteristics of a psychopath are self selecting for that level of success. Not success as in, "I'm a competent individual who does his job well"... those guys don't become Senators or Fed Chairs or the President of Harvard or GE or Enron. Success as in doing the things that ultimately propel people throught the clutter of honest people. There are dozens of "things" they can do consistently, but the central tenant can be summed up by the axiom "the ends justify the means".

Fri, 01/17/2014 - 20:57 | 4342869 lotsoffun
lotsoffun's picture

krugman is probably the best sock cooker on the planet.  i want him to cook my socks.  bernake has clean socks, obama, yellen will too.

my socks stink, clean my socks, not my stocks.  but mrtouchdown, i misread your comment, i saw:

"my most favorite rabbi weasel of a ?"

he is shameless, but, he is richer than i am, as are jamie and lloyd.  don't begrudge them that, but it's not because

they are smarter than us. or harder working.  or lucky.  there is more to it and it has to do with what i would or wouldn't accept to do

and what the repercussions would be for others.

thank most of the others at ZH, because they aren't dummies either and have made choices.

 

 

 

 

Fri, 01/17/2014 - 20:13 | 4342736 Mr Pink
Mr Pink's picture

Krugman deserves to die in a fire

Fri, 01/17/2014 - 20:26 | 4342774 JLee2027
JLee2027's picture

Buried alive under a mountain of printed fiat money while telling him that demand for the money will free him is more suitable. 

Fri, 01/17/2014 - 22:03 | 4343004 rlouis
rlouis's picture

Perhaps buried under bricks of $100 dollar bills dropped from helicopters.

Sat, 01/18/2014 - 00:11 | 4343257 BringOnTheAsteroid
BringOnTheAsteroid's picture

He's never bread has he. The damage is just limited to his brain isn't it.

Sat, 01/18/2014 - 02:42 | 4343436 All_Your_Base
All_Your_Base's picture

crushed under a stack of trillion-yellen platinum coins...priceless

Sat, 01/18/2014 - 06:26 | 4343587 DRT RD
DRT RD's picture

He's never bread has he.

 

He's never breed has he?

Fixed it for ya.

Sat, 01/18/2014 - 07:41 | 4343623 BringOnTheAsteroid
BringOnTheAsteroid's picture

Actually "bred". Missed the type. You're a gentleman.

Sat, 01/18/2014 - 00:43 | 4343323 A Nanny Moose
A Nanny Moose's picture

May he be warm for the rest of his life.

Sat, 01/18/2014 - 10:01 | 4343734 all-priced-in
all-priced-in's picture

Light a fire for a man he stays warm for one day.

Light a man on fire he stays warm for the rest of his life.

 

 

Fri, 01/17/2014 - 20:13 | 4342738 r00t61
r00t61's picture

Quick correction: Krugman writes his op-eds for the New York Times, not the Wall Street Journal.

ZH user TruthInSunshine has a really great summary post that outlines the many times that Krugman flip-flops on a position when it's convenient (especially politically) for him to do so.   It includes this, written by a former NYT ombudsman, in his final column for the paper:

"[Krugman has] the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults."

 

 

Fri, 01/17/2014 - 20:39 | 4342756 madtechnician
madtechnician's picture

WSJ NYT SAME SHIT ........

Written on my shitephone.

Fri, 01/17/2014 - 20:04 | 4342690 Surging Chaos
Surging Chaos's picture

What did you expect? This is coming from the same guy who said the internet wouldn't affect the economy that much (compared to a fax machine) and that an alien invasion is just what we need to boost GDP.

Fri, 01/17/2014 - 20:08 | 4342719 Clueless Economist
Clueless Economist's picture

hey Pal, when you win a Nobel, then you may attack me.

---Professor Krugman

Keynesian, Ivy Leaguer, Writer, Genius, Economist, and all around Douche Bag

 

Fri, 01/17/2014 - 20:16 | 4342744 Yen Cross
Yen Cross's picture

    hey pal< Please discuss the massive increase in the cost of living?  Krugman, or your minion, at least you have the nuts enough to debate the lynching.

Fri, 01/17/2014 - 20:32 | 4342801 Transformer
Transformer's picture

Let's see, Krugman gets a Nobel in economics, O gets one for Peace. 

Something's very wrong here.

Fri, 01/17/2014 - 21:16 | 4342905 MarsInScorpio
MarsInScorpio's picture

Transformer

 

It means the Nobel is no longer a credible award.

 

It is now a political award given to those who tow the Looney Tunes Left Wing viewpoint.

-30-

Sat, 01/18/2014 - 00:13 | 4343262 BringOnTheAsteroid
BringOnTheAsteroid's picture

Maybe with the emergence of 3D printing the nobel awards are just printed like fiat is. Is there anything printing doesn't devalue?

Sat, 01/18/2014 - 06:10 | 4343575 o2sd
o2sd's picture

OH FER FUCKS SAKE, JESUS MARY MOTHER OF GOD, FOR THE LAST TIME, THERE IS NO NOBEL PRIZE IN ECONOMICS.

Sat, 01/18/2014 - 11:44 | 4343859 flacon
flacon's picture

Nobel wasn't even born when Jesus walked the earth. 

Fri, 01/17/2014 - 20:16 | 4342747 spekulatn
spekulatn's picture

Keynesian, Ivy Leaguer, Writer, Genius, Economist, and all around Douche Bag

 

You forgot paid Enronhack.

Fri, 01/17/2014 - 20:21 | 4342759 fonestar
fonestar's picture

hey Pal, when you win a Nobel, then you may attack me.

---Professor Krugman

Keynesian, Ivy Leaguer, Writer, Genius, Economist, and all around Douche Bag

 

I notice you show up on the Krugman posts like how fonestar shows up on the Bitcoin posts?  What gives?

Fri, 01/17/2014 - 20:40 | 4342793 madtechnician
madtechnician's picture

He must fucking hate KrugFuck as much as you love bitcoin

Disclaimer: I also love bitcoin.

Written on my shitephone.

Sat, 01/18/2014 - 00:45 | 4343328 A Nanny Moose
A Nanny Moose's picture

Is there an app for that?

Sat, 01/18/2014 - 11:46 | 4343862 flacon
flacon's picture

No, but i heard they are coming up with an ETF for it. 

Sat, 01/18/2014 - 06:11 | 4343576 o2sd
o2sd's picture

Do you always refer to yourself in the third person?

 

Fri, 01/17/2014 - 20:12 | 4342720 Clueless Economist
Clueless Economist's picture

I was against the dangerous Bush Defecits, but am all for Obama's ruinous debts. 

Fri, 01/17/2014 - 20:25 | 4342742 madtechnician
madtechnician's picture

What fucking Nobel ? The fraudulent Non-Nobel issued by the Swedish Academy of Sciences ?

Well they nearly fucked up bigtime because it was Bernie Madoff who was the favorite to get that one.

Madoff was pipped to the post by Krugman........

Fri, 01/17/2014 - 20:28 | 4342788 Kirk2NCC1701
Kirk2NCC1701's picture

The Nobel Prize in Economics is actually issued by its central bank (Sveriges Riksbank).

In 1968, Sveriges Riksbank (Sweden's central bank) established the Prize in Economic Sciences in Memory of Alfred Nobel, founder of the Nobel Prize.

The Prize is based on a donation received by the Nobel Foundation in 1968 from Sveriges Riksbank on the occasion of the Bank's 300th anniversary.

So, when it comes to proclamations and theories expounded by "economists", and knowing that the ultimate shareholders of financial wealth are the owners (secret shareholders) of the central banks, is it any wonder that none of these guys will bite the hand the feeds them?

Need we say more?

Fri, 01/17/2014 - 20:36 | 4342811 madtechnician
madtechnician's picture

But the strange thing about KrugFuck is that he actually appears to beleive his own bullshit.

Written on my shitephone.

Sat, 01/18/2014 - 13:21 | 4344045 dojufitz
dojufitz's picture

That is not strange.

Fri, 01/17/2014 - 20:04 | 4342694 Atomizer
Atomizer's picture

Oh, you poor little fucker. Did you find independent thinking out weighs the lemming views of society?

Fri, 01/17/2014 - 20:03 | 4342697 Emergency Ward
Emergency Ward's picture

The standard view is that true believers can never, ever be wrong.

Fri, 01/17/2014 - 20:08 | 4342718 nmewn
nmewn's picture

At this point in the soap opera, all he needs to do is a little twerking for Keynesian Theory ;-)

Fri, 01/17/2014 - 20:31 | 4342802 El Vaquero
El Vaquero's picture

Maybe Richard Simmons can teach him how.

Fri, 01/17/2014 - 21:07 | 4342890 nmewn
nmewn's picture

Oh hell yeah!!!

Two mental midgets (as well as stature) twerking in competition for the affection of the general public. Throw in Obozo the Clown taking selfies at funerals and we've got a genuine, live and in color mad capped three ring circus!

Whats not to love? ;-)

Fri, 01/17/2014 - 20:06 | 4342705 jc125d
jc125d's picture

Will be good to watch him wiggle when his bullshit finishes boxing him in completely. But we will have other more entertaining distractions available when that happens.

Fri, 01/17/2014 - 20:07 | 4342710 Kirk2NCC1701
Kirk2NCC1701's picture

"Krugman Can't Understand How Someone Could Be So Stupid As To Believe What He Used To Believe"

WE CAN.

Fri, 01/17/2014 - 20:07 | 4342711 dognamedabu
dognamedabu's picture

I checked, his house isn't made of glass. So what gives?

 

http://www.celebrityhousepictures.com/paul-krugman.php

Fri, 01/17/2014 - 20:32 | 4342806 totem
totem's picture

Nice lawn... looks like he's as good a gardner as he is an economist.

Sat, 01/18/2014 - 11:51 | 4343867 flacon
flacon's picture

He's so close to Trenton that when the SHTF the African tribes will be on the rampage and will likely ransack his house. 

Fri, 01/17/2014 - 20:08 | 4342716 ebworthen
ebworthen's picture

That was yesteryear's bearded potato.

This is the new and improved bearded potato!

C'mon you spuds!  Debt is good!  TBTF is good!  Break a window!

Fri, 01/17/2014 - 20:09 | 4342717 I need Another Beer
I need Another Beer's picture

He deserves to be rubbed out

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