Paul Krugman Is "Really, Really Worried" That He Might Have Screwed Up Japan

Tyler Durden's picture

Late last year, a very important and very “powerful” man took a field trip to Japan to observe Keynesian insanity prowling around in its natural habitat...

That’s right, last November Paul Krugman - the mere mention of whom is enough to strike terror in the hearts and minds of the sane - found himself in a limousine with Japanese economist Etsuro Honda who was intent on securing the Nobel laureate's help in convincing Prime Minister Shinzo Abe to delay a planned (and prudent) sales tax hike. As a reminder, here’s how Bloomberg described the “historic” series of events:

When Japanese economist Etsuro Honda heard that Paul Krugman was planning a visit to Tokyo, he saw an opportunity to seize the advantage in Japan’s sales-tax debate.


With a December deadline approaching, Prime Minister Shinzo Abe was considering whether to go ahead with a 2015 boost to the consumption levy. Evidence was mounting that the world’s third-largest economy was struggling to shake off the blow from raising the rate in April, which had triggered Japan’s deepest quarterly contraction since the global credit crisis.


Honda, 59, an academic who’s known Abe, 60, for three decades and serves as an economic adviser to the prime minister, had opposed the April move and was telling him to delay the next one. Enter Krugman, the Nobel laureate who had been writing columns on why a postponement was needed.


It was in a limousine ride from the Imperial Hotel that Honda told Krugman, 61, what was at stake for the meeting. The economist, who’s now heading to the City University of New York from Princeton University, had the chance to help convince the prime minister that he had to put off the 2015 increase.


The concept of outside opinion influencing Japanese decision-making is known as gaiatsu, or foreign pressure, in Japanese, and has historical precedent since at least the arrival of U.S. Commodore Matthew Perry’s squadron in 1853 in Tokyo Bay, which led to an opening in the nation’s trade policies. Gaiatsu also has been used as cover by Japanese officials when they’ve pushed through controversial measures.


Krugman plays down his role, saying the Nov. 6 meeting with Abe “was very straightforward.”

But Honda tells a different story:

“That nailed Abe’s decision -- Krugman was Krugman, he was so powerful.”

Yes, “Krugman was Krugman,” which means everyone in attendance was subjected to 40 minutes of crisply-worded nonsense and unlike Deputy Riksbank Governor Per Jansson - who, earlier this year, suggested that Krugman “write fewer articles and have more of a look at the data” after Krugman essentially accused Sweden’s central bank of being an evil cabal of job-hating heretics motivated by an overwhelming (not to mention completely inexplicable) desire to perpetuate global inequality by enriching creditors at the expense of impoverished debtors - no one had the good sense to tell him to shut up. 

Sure enough, the tax hike was delayed. 

Just days earlier, Krugman penned the following laughably ridiculous words in a blog post explaining why Japan should avoid doing anything that could be mistaken for a rollback of Abenomics:

When I see, say, the IMF inserting into its latest Japan survey a section titled “Maintaining focus on fiscal sustainability” my heart sinks (and so, maybe, does Abenomics); [even though] it’s hard to argue against sustainability.

It sure is, but Krugman will do it and powerful people will unfortunately listen and by the time everyone realizes that efforts to micromanage economic outcomes and smooth out the business cycle by cranking up the printing presses and gluing rates to the zero lower bound have failed it will be far, far too late to normalize which of course is precisely what's unfolding across the world today. 

We retold the story presented above because on Thursday a very funny thing happened: Paul Krugman told an audience in Tokyo that he is "really, really worried" that Abenomics might fail. Here's Bloomberg:

Nobel laureate Paul Krugman said risks of failure are growing for Prime Minister Shinzo Abe’s "Abenomics" campaign to end Japan’s two-decade slump.


“I’m still really, really worried,” Krugman said at a conference in Tokyo on Wednesday. A big problem remains building enough momentum in the economy to escape deflation, he said.


“Japan has spent a long time in this deflationary trouble," said Krugman, who helped convince Abe to delay another planned increase in the nation’s sales tax after a hike in April last year pushed the world’s third-biggest economy into a recession.


Japan needs to reach a point where everyone believes that it has pulled out of deflation, he said. "And then if that can be believed, then it may be able to stay out of trouble thereafter,” he said.

Reading that, we're reminded of BoJ cheif Haruhiko Kuroda, who, back in June, hilariously likened himself and his fellow DM central bankers to Peter Pan when he said the following about what's needed to perpetuate the central bank omnipotence myth:

"I trust that many of you are familiar with the story of Peter Pan, in which it says, 'the moment you doubt whether you can fly, you cease forever to be able to do it.' Yes, what we need is a positive attitude and conviction." 

What Krugman and Pan are both tacitly admitting, is that Abenomics has demonstrably failed and the only thing that can save Japan now is for everyone to suspend disbelief in the face of voluminous evidence that what Kuroda and Abe (at Krugman's behest) are doing simply isn't working.

And because "Krugman is Krugman", we're never more than one Google search away from a hilarious soundbite from the New York Times blog archives, and so it's with great pleasure and with everything said above in mind, that we leave you with the following excerpt from a Krugman classic entitled "Why Keynes Is Slowing Winning" ca. 2014:

"Why does the tide finally seem to be turning? Partly, I think, it’s just a matter of time; after six years it’s becoming hard not to notice that the anti-Keynesians have been wrong about everything. And the refusal of almost everyone on the anti-Keynesian side to admit any kind of error has gradually made them look ridiculous."


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Looney's picture

Since Kerry sold Heinz, Krugman has been using Vagisil instead of Ketchup.  ;-)


clooney_art's picture

Moar Moar Moar QE !!!!!!!!!!!!!!!!!


Make shit up and watch everything blow...... It's called Krugman Strategy.

mtndds's picture

I hope thats a glass of piss he is throwing back.  Asshole.

Headbanger's picture


Billy the Poet's picture

If someone hit your peter with a pan you'd fly too.

Syrin's picture

Just LOOK at that fucker.   Everything about him says ARROGANT PRICK !!!!!!!!

Secret Treaties's picture
Secret Treaties (not verified) Syrin Sep 10, 2015 11:43 AM

One's internal narrative creates and shapes one's reality.

formadesika3's picture

Professor Krugman is right about one thing. Actually, many things. But the one thing that he is most right about is the necessity of keeping a strong positive mental belief that things will work out as planned.


Without a positive attitude, things could fall apart very quickly.


Let’s all try to keep this in mind whenever we level undue criticism at someone of his stature. He’s been right about so many things, especially the recovery we’ve been seeing lately, that his victory sip of wine should give inspiration to all those of us who believe in his legacy.

BigJim's picture

In person, he's a weaselly little nerd with a voice like a neutered kermit. I didn't shake hands with the man (there was no running water nearby) but I imagine he has a limp handshake, too.

Why anyone takes this charlatan seriously is beyond me. I guess "our" "leaders" really are ignorant... or just looking for an academic figleaf that will excuse the crap they want to do anyway.

messymerry's picture

There was a good article here a while back about "Credentialization".  Credentials (which I might add are very easy to fabricate) have completely replaced common sense in the constellations of power.

We are well and truly forked,,,



wee-weed up's picture



What?... No photo of Krugman stroking his pussy?

That's his best persona.

tdogg's picture

Paul. Paul!!  You can't eat "worry" honey.  You "worry" and then you just sit there - you know like a pet rock.

Or does your "worry" have more utility than my worry.  Cuz i've been worried for the past 10 yrs Professor!

Jesus - i bet your wife is VERY unsatisfied.



omniversling's picture

"Credentialization" very well with Crashiness.

Winston Smith 2009's picture

"just looking for an academic figleaf that will excuse the crap they want to do anyway"

And there you nailed one of the primary reasons this proven to be wrong time and time again Keynesian garbage persists as dogma: it tells both banks and governments what they WANT to hear, that they can borrow their way to prosperity.

Leopold B. Scotch's picture

“What he (Keynes) really did was to write an apology for the prevailing policies of government.” – Mises



“The advocates of public control cannot do without inflation (originary use = monetary/credit expansion). They need it in order to finance their policy of reckless spending and of lavishly subsidizing and bribing the voters… Inflation is the fiscal complement of statism and arbitrary government. It is a cog in the complex of policies and institutions which gradually lead toward totalitarianism.” – Mises



dirtyfiles's picture

its just a US edition of political Rasputin

logicalman's picture

I think it's one of his aprentices!

autofixer's picture

He's got psycho crazy eyes too.  

DanDaley's picture

He knows enough to stay out of Japan as he might accidentally get "hara-kiri-ed".

Random_Robert's picture

He's got the same crazy eyes the Colorado theater shooter had.

The crazy eyes of someone who has been subjected to some serious CIA caliber mental reconditioning...  Jus sayin.

Fish Gone Bad's picture

Keynes changed his mind a lot.  If he saw something was not working, he would admit it.  He would role over in his grave to hear himself being named for all this mismanaged capital.

City_Of_Champyinz's picture

This is not Keynesian economics, all they do is spend and spend no matter what, the politicians never cut back spending when the economy is doing well to save up a war chest when the economy goes into recession.  Total madness.

RaceToTheBottom's picture

They do have the spending half down pat.

The cut back spending part, well that is for your grandchildren to bear the brunt of.

Keynes would probably be the first to start shooting people for what they are doing in his name.

InjuredThales's picture

It actually is Keynesian economics, just as Soviet Russia really was communism.

You see, if your theory never makes it out the gate in practice, that should be a good sign to most people that there's a flaw in the theory itself. How many governments in history have been known to reduce spending when there is no crisis?

Fred Hayek's picture

Yes, but only a complete idiot would think that he could put forth an economic theory which gave every government official everything they wanted part of the time and expect them to show greater discipline than ever before at other times.

Grade school children would have the psychological perceptiveness to figure out that governments would avail themselves of license to do what they wanted to do in ever increasing amounts while putting off endlessly the need to do what they don't want to do. Keynes either didn't or, justifying the worst views of him and his work, just wanted to give intellectual cover for socialism run amok.

And it's kind of ironic that Krugman proudly calls himself a keynesian and in the title of his recent book angrily referred to present conditions as a depression. This was J.M. Keynes' quote in late 1927 when some people were saying that the U.S. and U.K. economies were overheating and that there would be trouble:

"We will not have any more crashes in our time."
- John Maynard Keynes, leading British economist, in 1927

Rubicon's picture

You mean things are not so "awesome"?

upWising's picture


Like possum. 

When things get tough for a possum, they shit, and then pretend they are dead.  (Had one sneak in my house one night and do that on the kitchen floor.)

Professor Paul should consider doing the same. 

logicalman's picture

You want an economist to shit on your kitchen floor???

There are some strange people about ;-)

kaiserhoff's picture

Like Japan would be different?

He should clean up Fukushima with a tooth brush for penance.

So Solly yo haeh fah out, Krugfoo!

Syrin's picture

Amen to that.


What do you think he says to himself?  "I totally fucked up an entire nation, and likely the entire global economy.   Whoops my bad.   So, where should I go to dinner tonight?"

drendebe10's picture

Jeezusfukncris. All these big giant arrogant know it aullAzzhoes need their skin sandpapered off & buried in salt.  All these miedras feather their own bank acct balances @ the expense of the serfs & peasants. 

"Wake up. Time to die."  Leon, Blade Runner

unknownknowns's picture



Sounds like all they have to do is believe

Absolutely no need here for anything actual!


Once everyone believes; everything will be awesome!

StychoKiller's picture

Hmm, drinking Koolaid from a champagne flute, WTF??

firstdivision's picture

“Japan has spent a long time in this deflationary trouble," said Krugman. So Krugman tells them to stay the fucking course for nearly 30 years now. Shit if 30 years of QE did nothing, surely another decade will do.Who the fuck listens to this fucking idiot (sadly it is those that make decisions on such matters). We have a perfect case study of why QE cannot work, yet the US follows this fucktards advise while data out there says to not do QE. The fucking TBTF's should have failed and been under government receivership until all the assets were sold off and creditors paid with what was left. We would have real organic growth that would have jobs for those willing to work, and I have a suspicion that the jobs would pay better than now. The leaders of the world are all those that escaped the loony bin.

upWising's picture

" Shit if 30 years of QE did nothing, surely another decade will do. "

You got it.

With printing money, as with collecting Beanie Babies, downing half gallons of ice cream or bottles of cheap tequila, we always know.....

"If a little is good, a lot is better, and MORE is BETTER YET!"


AMERICA!  Jesus' Favorite Country!  ©

logicalman's picture

If god loved America he wouldn't have put all that American oil under other countries.

Money Counterfeiter's picture
Money Counterfeiter (not verified) Looney Sep 10, 2015 10:54 AM

The best thing this pos could do at this stage of his life is a mea culpa and buy some fucking gold.  Other than that take the punishment like a man.

Kaervek's picture

He is sitting on his gold like all the other rich boys are, I don't believe for a second that he really believes the shit he's selling everyone. I wager they all own physical, I mean they got enough cash to spend so why not load up on phyz while suppressing it's price at the same time? It's idiot proof. While most poor people won't be able to even afford a single ounce, if by chance some poor bastard inherited some gold he might soon need it to cover his debt obligations, but he'll have to sell into the suppressed price. By the time gold price explodes, only the cash-strapped rich will still own any, as everyone else had to liquidize his stash way before. That's the way it always has been, that's the way they stay powerful: endless boom-bust cycles where only the insiders know the exact timing. Bubble after bubble.


silverer's picture

Check out the face.  What is that in the glass, really?

epicurious's picture

He's a little twat that doesn't even know how to properly hold a glass of wine.

sgt_doom's picture

Hold on!

Let me get this straight?

You mean THE Paul Krugman, the very same dood who believed it was simple "suppy and demand" that the oil prices zoomed up in 2008, 'cause he never heard of, nor figured out, what oil/energy speculation means and is all about?

THE very same Paul Krugman who doesn't believe that banks can create credit, 'cause he's never really understood that pesky thing called, "fractional reserve banking"?

THE very same Paul Krugman who believes the global financial economic meltdown was due to too much American household debt?

THE very same Paulie Krugman who stated that the American banks which are the top holders of credit derivatives (i.e., fantasy finance) are unbelievably financially health?

Surely this blog post is mistaken?