Guest Post: Wealth Inequality – Spitznagel Gets It, Krugman Doesn’t

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Submitted by Pater Tenebrarum of Acting Man

Wealth Inequality – Spitznagel Gets It, Krugman Doesn’t

We wrote an article on wealth and income inequality on July 1 2011, in which we criticized a speech by Fed governing board member Sarah Bloom Raskin. In her speech she bemoaned the growing wealth and income gap in the US, indicating that more government intervention was needed to close it.

We started out by asking: why should it even matter how wealth is distributed as long as everybody partakes of the fruits of the free market? Should not those who serve consumers better than others be entitled to earn more? Are they not taking risks? Who cares if income and wealth are unequally distributed as long as everybody's living standard increases?

Most readers are probably aware of these arguments, so there is no need to rehash them here. The point we finally made was that the reason people were worried – besides envy, that is – was that the great mass of people has not seen its economic lot improve for a long time period.

The time period during which the real income of the middle class and the poorer strata among the citizenry began to stagnate  curiously coincided  with the abandonment of the gold exchange standard and the unfettered growth in money and credit that followed on its heels.

So the question that suggested itself was: perhaps the Fed itself is at fault?

This is what we concluded, but not merely from the empirical data, as supportive as they are of this particular case. It follows logically that whenever an inflationary policy is pursued, the richest citizens will profit from it, while the poorest will lose ground. Inflation is effectively a reverse redistribution scheme from the poor to the rich. This is so because the wealth of the rich is largely parked in assets the prices of which tend to rise disproportionally due to the inflationary policy. Moreover, they have easier access to credit and thus can get 'first dibs' on newly created money. By the time this money has percolated through the economy and reaches the wage earners and the poor,  prices have already risen and they will be confronted with the fact that their purchasing power has declined.

We concluded it was hypocritical of a Fed board member to decry the situation while not even once mentioning the critical role her institution played in bringing it about. Moreover, her proposed solution, while not spelled out in detail, amounted implicitly to a recommendation to the government to go down the path of socialist redistribution.

Mark Spitznagel on Wealth Inequality

You have to hand it to the WSJ – eventually it sometimes catches up to 'acting man'. :)

Well known hedge fund manager Mark Spitznagel has published an editorial  in the WSJ last week, in which he basically makes our argument all over again – only for a bigger audience.

He writes:

“A major issue in this year's presidential campaign is the growing disparity between rich and poor, the 1% versus the 99%. While the president's solutions differ from those of his likely Republican opponent, they both ignore a principal source of this growing disparity.


The source is not runaway entrepreneurial capitalism, which rewards those who best serve the consumer in product and price. (Would we really want it any other way?) There is another force that has turned a natural divide into a chasm: the Federal Reserve. The relentless expansion of credit by the Fed creates artificial disparities based on political privilege and economic power.


David Hume, the 18th-century Scottish philosopher, pointed out that when money is inserted into the economy (from a government printing press or, as in Hume's time, the importation of gold and silver), it is not distributed evenly but "confined to the coffers of a few persons, who immediately seek to employ it to advantage."


In the 20th century, the economists of the Austrian school built upon this fact as their central monetary tenet. Ludwig von Mises and his students demonstrated how an increase in money supply is beneficial to those who get it first and is detrimental to those who get it last. Monetary inflation is a process, not a static effect. To think of it only in terms of aggregate price levels (which is all Fed Chairman Ben Bernanke seems capable of) is to ignore this pernicious process and the imbalance and economic dislocation that it creates.


As Mises protégé Murray Rothbard explained, monetary inflation is akin to counterfeiting, which necessitates that some benefit and others don't. After all, if everyone counterfeited in proportion to their wealth, there would be no real economic benefit to anyone. Similarly, the expansion of credit is uneven in the economy, which results in wealth redistribution. To borrow a visual from another Mises student, Friedrich von Hayek, the Fed's money creation does not flow evenly like water into a tank, but rather oozes like honey into a saucer, dolloping one area first and only then very slowly dribbling to the rest.


The Fed doesn't expand the money supply by uniformly dropping cash from helicopters over the hapless masses. Rather, it directs capital transfers to the largest banks (whether by overpaying them for their financial assets or by lending to them on the cheap), minimizes their borrowing costs, and lowers their reserve requirements. All of these actions result in immediate handouts to the financial elite first, with the hope that they will subsequently unleash this fresh capital onto the unsuspecting markets, raising demand and prices wherever they do.”

(emphasis added)

Very well put – this is precisely what happens. Money is not 'neutral' – the uneven spreading of inflation guarantees that there are winners and losers. It is obvious that the financial elite is foremost among the winners. The so-called '99%' meanwhile are losing out and the lower they are in the income strata, the more they tend to proportionally lose.

Spitznagel concludes:

The Fed is transferring immense wealth from the middle class to the most affluent, from the least privileged to the most privileged. This coercive redistribution has been a far more egregious source of disparity than the president's presumption of tax unfairness (if there is anything unfair about approximately half of a population paying zero income taxes) or deregulation.


Pitting economic classes against each other is a divisive tactic that benefits no one. Yet if there is any upside, it is perhaps a closer examination of the true causes of the problem. Before we start down the path of arguing about the merits of redistributing wealth to benefit the many, why not first stop redistributing it to the most privileged?”

(emphasis added)

Note here that as a hedge fund manager, Spitznagel himself is among the privileged who are in a position to profit from the Fed's largesse. Of course he would probably prefer to invest an environment of sound money, as the constant second-guessing of what the bureaucrats might do next is actually distracting investors from what they should really do, namely appraise the individual fundamental merits of various investment alternatives. As we often point out, these days investing is instead all about the 'macro' environment  – which is to say much valuable time and effort must be spent on deciphering and dealing with the effects of interventionism.

Naturally, whenever someone attacks the policies of an institution that keeps hundreds of macro-economists in bread, it doesn't take long for the the counter-attacks to be launched. This time Paul Krugman took it upon himself to defend the money printers, revealing his utter ignorance in the process.

Krugman's Weak Defense of Money Printing

Krugman tried to deflect Spitznagel's arguments from his perch at the NYT in an article entitled 'Plutocrats and Printing Presses'.

As we have pointed out in the past, Krugman is either willfully ignoring and misrepresenting the arguments of Austrian economists, or he simply doesn't understand them. Looking at his past critiques of the Austrian school, it seems rather obvious he hasn't even read any of the works associated with it, so he is actually in no position to pen a serious critique. The Austrians are generally in a better position when it comes to criticizing Krugman, since most of them had to endure large doses of Keynesianism at university.

Krugman made a tactical mistake though: by coming to the defense of the Fed's bank bailouts and its money printing, he apparently managed to incense his own fan base (see the comments section below his screed).

He writes:

What’s wrong with the idea that running the printing presses is a giveaway to plutocrats? Let me count the ways.


First, as Joe Wiesenthal  (sic) and Mike Konczal both point out, the actual politics is utterly the reverse of what’s being claimed. Quantitative easing isn’t being imposed on an unwitting populace by financiers and rentiers; it’s being undertaken, to the extent that it is, over howls of protest from the financial industry. I mean, where are the editorials in the WSJ demanding that the Fed raise its inflation target?

So a winner of the Nobel prize in economics requires the testimony of Joe Weisenthal and someone from the 'Next New Deal' blog (which as the name implies is in favor of an FDR style command economy) to buttress his arguments? And proof that 'QE' is happening over the 'howls of protest from the financial industry' is provided by a lack of editorials in the WSJ demanding a higher 'inflation target'?

It is difficult to reply to this nonsense mainly because it is so utterly dumb. One almost doesn't know where to begin, but let us just 'count the ways' by mentioning two small factoids: without the Fed's interventions, many of the stalwarts of the financial industry would no longer be with us. They would have gone bankrupt in 2008-9 and their assets would now be in the hands of better stewards of capital. Yeah, they sure 'howled in protest' when they were presented with that gift horse.

Secondly, the true broad money supply in the US has increased from $5.3 trillion to $8.424 trillion between January of 2008 and February of 2012. This is a money supply inflation of roughly 60% in four years. There are simply no WSJ editorials clamoring for 'more inflation' required, even if one believes in the inflationist snake oil peddled by the likes of Krugman. The people supporting the policy are probably eager not draw too much attention to what has actually happened thus far on the inflation front.

Having exonerated (in his mind) the financial elite and the 'plutocrats' with the help of Mr Weisenthal's testimony – whose stance is (mis)informed by none other than Paul Krugman himself (i.e., Krugman actually uses his own testimony through a relay station) -  Krugman continues:

“Beyond that, let’s talk about the economics


The naive (or deliberately misleading) version of Fed policy is the claim that Ben Bernanke is “giving money” to the banks. What it actually does, of course, is buy stuff, usually short-term government debt but nowadays sometimes other stuff. It’s not a gift.


To claim that it’s effectively a gift you have to claim that the prices the Fed is paying are artificially high, or equivalently that interest rates are being pushed artificially low. And you do in fact see assertions to that effect all the time. But if you think about it for even a minute, that claim is truly bizarre.


I mean, what is the un-artificial, or if you prefer, “natural” rate of interest? As it turns out, there is actually a standard definition of the natural rate of interest, coming from Wicksell, and it’s basically defined on a PPE basis (that’s for proof of the pudding is in the eating). Roughly, the natural rate of interest is the rate that would lead to stable inflation at more or less full employment.”

(emphasis added)

First of all it should be noted that in his typical demagogic fashion, Krugman does not even address the argument Spitznagel made. He always does that – he really would be great as a leader of a Marxist debating society, as he has their techniques down pat. He simply ignores what his opponents say, and then proceeds to erect straw men which he thinks can be easily knocked down.

Well, let's look at his voodoo economics claims (how on earth did this guy get a Nobel prize in economics? If ever you needed proof that the prize has become a contrary indicator, Krugman provides it in spades). First of all, you will notice that he fails to mention how exactly the Fed comes into a position to 'buy stuff'. It does that by printing money from thin air, which is actually the central point of Spitznagel's critique. Let's just ignore it!

Then he claims that one can not prove that the Fed 'overpays' for the assets it buys. This is the functional equivalent of claiming that increasing the money supply has no effect whatsoever on prices. How can an economist make such a claim? Not to forget, the reason why the Fed makes these purchases consists  – in its own words – of its desire to depress interest rates! In reality, the entire price structure of the economy is revolutionized when the amount of fiduciary media is increased and interest rates are artificially suppressed by the monetary authority. Lastly, the banks and other financial players the Fed buys assets from are not led by complete dummies. They naturally front-run the Fed every time – there is in other words a clearly discernible feedback loop between the Fed's activities and the prices of the financial assets it buys.

As to Wicksell's definition of the natural interest rate, it reads verbatim:

“There is a certain rate of interest on loans which is neutral in respect to commodity prices, and tends neither to raise nor to lower them.”

There is not one word there about 'full employment'. As to the Austrian definition of the natural interest rate, it is simply the rate of societal time preference. In other words, the time preferences of all market participants as expressed in the discount of future gods versus present goods represent the natural interest rate. If we actually wanted to establish what the natural interest rate is, we would indeed have to abolish the Fed as well as introduce 100% reserve banking, so as to forestall the issuance of fiduciary media. It is actually downright comical that we have a central economic planning agency that is allegedly trying to 'mimic' the natural interest rate when we could obtain it very easily by simply abolishing the planners and rigorously enforcing property rights.

Following his faux re-defintion of the natural interest rate, Krugman continues – n.b., while still completely ignoring the arguments Spitznagel made:

And we have low inflation with high unemployment, strongly suggesting that the natural rate of interest is below current levels, and that the key problem is the zero lower bound which keeps us from getting there. Under these circumstances, expansionary Fed policy isn’t some kind of giveway to the banks, it’s just an effort to give the economy what it needs.”

(emphasis added)

This is why we are so bold to accuse Kugman of using voodoo economics. Readers may be aware that the current interest rate is 'zero'. The Fed wants us to pretend that the cost of capital is zilch. Krugman now claims that the 'natural interest rate' – by his definition – should  actually be below zero. In other words, what he is saying is that if the market were left to its own devices, the time preferences of economic actors would be completely reversed, so that future goods would be considered to be worth more than present goods at the moment. This is such abject nonsense it truly defies belief.

Oh yes, and giving the banks money at no cost is therefore 'not a give-away to the banks'.  You would think no-one could actually make stuff like this up, but there it is. Economist William Anderson has given Krugman the nickname 'Krugpot'. Now you know why.

Krugman then expands on why the bankers really just hate to get money for absolutely free:

Furthermore, Fed efforts to do this probably tend on average to hurt, not help, bankers. Banks are largely in the business of borrowing short and lending long; anything that compresses the spread between short rates and long rates is likely to be bad for their profits. And the things the Fed is trying to do are in fact largely about compressing that spread, either by persuading investors that it will keep short rates at zero for a longer time or by going out and buying long-term assets. These are actions you would expect to make bankers angry, not happy — and that’s what has actually happened.”

First of all, the buying of long term assets to compress the yield curve spread is a relatively recent policy ('Operation Twist') and it is in fact not directly inflationary such as 'QE' was, as the Fed is not printing new money but merely exchanging short term bills for long term bonds. Its balance sheet has stopped growing when 'QE2' ended. However, we note that the expansion of the money supply has continued well beyond the end of 'QE2'.

There are several reasons for this – the most important are: the fractionally reserved commercial banks have actually begun to expand money and credit on their own again (with their current reserve base they could in theory create about $15 trillion in new money if we were to generously assume a required reserve ratio of 10%. In reality they could create far more money, as de facto, required reserves are close to zero, mainly on account of sweeps). Secondly, dollars have fled from the crisis stricken euro area and have been deposited with US banks – in short, some of the dollars that were overseas have 'come home', while the Fed and the ECB are acting in tandem to replace the dollars lost in Europe with freshly printed ones via their dollar swap window. Thirdly, there has been a rule change that has forced banks to acknowledge the existence of funds that have previously been regularly swept offshore overnight  – in short, the money supply data now contain evidence of past inflation that was previously hidden by this practice.

The claim that bankers are 'angry' at getting money at zero percent from the Fed is exactly as ludicrous as it sounds. Even with the yield spread now smaller, the banks are stuffing a lot of money into treasuries to 'ride the curve'. They simply lever these traded as much as they can. It's a trade in which they figure they cannot lose. Take for instance a two year and a one year note. The two year note now yield 27 basis points, the one year note yields 17 basis points. If one buys a two year note today, it will become a one year note one year hence. Given the Fed's 'guarantee' of a zero federal funds rate until 2014, this implies a certain capital gain plus the 27 basis points in interest. Lever the trade 100:1 and you're actually making serious money. Yes, the bankers just hate it!

We must however also note here that the assertion we have made above (namely that 'it's a trade in which they cannot lose') should be qualified by 'it's a trade in which they cannot lose as long as faith in the central bank administered fiat money system doesn't suddenly crumble'.

The two year note yield vs. the one year note yield. 'Riding the curve' with leveraged trades remains highly profitable as long as this spread is positive.



Krugman then continues to parade his ignorance as follows:

“Finally, how is expansionary monetary policy supposed to hurt the 99 percent? Think of all the people living on fixed incomes, we’re told. But who are these people? I know the picture: retirees living on the interest on their bank account and their fixed pension check — and there are no doubt some people fitting that description. But there aren’t many of them.”


The typical retired American these days relies largely on Social Security — which is indexed against inflation. He or she may get some interest income from bank deposits, but not much: ordinary Americans have fewer financial assets than the elite can easily imagine. And as for pensions: yes, some people have defined-benefit pension plans that aren’t indexed for inflation. But that’s a dwindling minority — and the effect of, say, 1 or 2 percent higher inflation isn’t going to be enormous even for this minority.

(emphasis added)

Countless seniors, widows and orphans would vehemently disagree with Mr. Krugman. There are currently about $6.3 trillion in savings deposit and about $730 billion in small time deposits. Via anecdotes, we keep hearing about senior citizens who feel they have no choice but to divert savings into the extremely risky stock market as they can no longer count on their interest income to sustain them. For Krugman (who himself is among the '1%') to wave all these people away as though they didn't exist is quite callous. As a good Keynesian he probably is all for 'euthanizing the rentiers', even if he doesn't spell it out here.

As to social security income being 'indexed for inflation': yes, indexed to the government's 'official' inflation data, which have been contorted in countless 'reforms' precisely to keep these expenses as low as possible by pretending that the price effects of the inflationary policy are far smaller than they actually are. He also ignores the fact that the basket of goods contained in the 'CPI' typically does not reflect the expenses that are most important for the majority of the middle class, the majority of retirees and the poor. Rich people don't care if the price of vegetables and fruit doubles and they don't care whether gasoline costs $2 per gallon or $4. Retirees living on social security, the middle class and the poor definitely do care about these prices and are hurt by them in spite of the laughable 'indexing' of social security payouts to 'inflation' (inflation as in the change of the 'general price level' as calculated by the government).

Krugman then closes his defense of inflationism with a for him typical demagogic flourish, only it really backfires in this case:

“No, the real victims of expansionary monetary policies are the very people who the current mythology says are pushing these policies. And that, I guess, explains why we’re hearing the opposite. It’s George Orwell’s world, and we’re just living in it.”

(emphasis added)

There you have it! The Fed's inflationary policy is really 'victimizing' the 1% and the financial elite! It is 'Orwellian' to say otherwise! Krugman is apparently completely unaware of the irony of this final sentence.

To summarize: Krugmann fails to address even a single one of the arguments forwarded by Spitznagel. This is no surprise, as he has often demonstrated he does not even understand the arguments of the Austrians and moreover has frequently shown that his style of debate consists largely of attempts to knock down straw men.  After appraising us of his economic ignorance (see the idea that time preferences can actually 'go negative' implied by his argument on the natural interest rate above), he finally closes a truly Orwellian screed by claiming that everybody who is critical of the Fed and the financial elite is guilty of being 'Orwellian'.

As we often say, you really couldn't make this up.

Self-appointed 'liberal conscience' guardian Paul Krugman: now he's suddenly springing to the defense of the financial elite and the '1%' in his misguided mission to defend central economic planning.

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hedgeless_horseman's picture



Although my opinion may appear to contradict the wealth inequality theme of this article, I see Krugman as just another Ellsworth Toohey of our generation.

Having no true genius, Toohey's mission is to destroy excellence and promote altruism as the ultimate social ideal. This is put forward in one of his most memorable quotes: "Don't set out to raze all shrines—you'll frighten men. Enshrine mediocrity, and the shrines are razed."


Rather, Toohey's methods throughout the book suggest that such a regime might be able to retain the forms of democracy, multi-party elections and a free press, with actual power held by Toohey-like "informal advisers"

I simply could not read The Fountainhead and fail to notice the similarities between the tactics and rhetoric of Toohey and Krugman.

Pladizow's picture

Can someone give an example of an economist/politician with a beard that can be trusted.

Krugman is the Ponzi's bitch!

fnord88's picture

A krugman opens his mouth in New York, a million pensioners need food stamps in the burbs ( and 10 million peasants starve to death in the 3rd world). Law of unintended consequences, BITCHEZ

Aziz's picture

Anyone looking for a cheap laugh (I know I am) might wanna check up on Paul Krugman's former economic persona, who sounded massively different to the one of today who claims that deficits "no longer matter"...

"At a certain point we’ll have a Wile E. Coyote moment. For those not familiar with the Road Runner cartoons, Mr. Coyote had a habit of running off cliffs and taking several steps on thin air before noticing that there was nothing underneath his feet. Only then would he plunge.

What will that plunge look like? It will certainly involve a sharp fall in the dollar and a sharp rise in interest rates. In the worst-case scenario, the government’s access to borrowing will be cut off, creating a cash crisis that throws the nation into chaos."


Ahmeexnal's picture

In Greece, there is no wealth inequality. Now that wealth transfer is almost complete and Greece has been plundered by the "uber alles" nation, the only thing left in Greece is a pauper equality.


A week before the country holds a general election, charities are distributing meals to people who never imagined they would be in the same situation as the immigrants next to them in the queue, writes PETER MURTAGH in Athens

PIREOS IS A WIDE AVENUE in central Athens, running from Omonia Square southwest to a clutch of pottery museums in the heart of the ancient area known as Keramikos. No 37 is an unprepossessing two-storey stucco building painted in pastel shades of blue and grey. There is nothing much to indicate what goes on inside; from the outside it looks lifeless.

But behind this dull facade, three times a day, are scenes of human misery and sorrow involving people who never expected this to happen to them. Walk around the rear of the building, via the narrow traffic-filled Sofokelous street, and you can peer through the railings of what initially seems like a school playground.

This is where they are fed, the destitute of Athens, the new poor who are bewildered at the state in which they find themselves, and the refugees and asylum seekers, a flotsam of human misery from central Asia that has turned much of this part of the city into what many Athenians call a ghetto, a no-go area they avoid, especially at night.

From about 11.30am on Thursday, about 600 people, most of them middle-aged, begin to shuffle into the sun-dappled courtyard from the surrounding streets for the lunchtime distribution of food. Some look as if they are sleeping rough. Others are managing to hold it together a little better.

flacon's picture

Does Krugman actually believe himself (in which case he is delusional), or, is he in fact delusional?


I can't figure out which...

Clueless Economist's picture

You are incorrect Mr flacon, I am in fact delusional.

--Professor Paul Krugman

Nobel Prize Winner


Ivy Leaguer


NY Times Writer

All-Around Douchebag

Mr Lennon Hendrix's picture

This is live now -

Webster G. Tarpley discusses 9/11 on C-Span:
trembo slice's picture

how funny would it be if this was the real Paul Krugman and he hates himself for selling his soul to TPTB?

disabledvet's picture

well he is a paid member of the commentariat now. i know that's why i'm cranky all the time. "for money i can change my mind."

TheFourthStooge-ing's picture


All-Around Douchebag

Please, Mr. Krugman, your modesty is admirable, but you should give yourself credit where due:

Paul Krugman, Douchebagosaurus Rex


The Alarmist's picture

Krugman, The bearded face of evil ... pure, naked, smirking evil.

Fish Gone Bad's picture

Krugman has benefited from all this liquidity so he has a vested interest to keep piling on the money.  Aside from being a shit talker, does he have any skills?  Seriously.

Personally I really really like the idea of going big or go home.  I will agree to any bailout of whatever size he deems necessary this ONE time.  $400 quadrillion?  Bring it on bitch.  $1 quintillion.  Sure.  I will bring the popcorn.  Bring it on, then STFU.  I do not know if the world can wait out the consequences, but I am entertained by seemingly intelligent people thinking they can legislate away the theory of gravity (It is just a theory).

Krugman, soon to be labelled as just another economic criminal.

bobert's picture

I would like interest rates to run free. Find their own level. Act as a pricing mechanism. I hope you are correct and that they begin (are allowed) to rise in the near future.

Nukular Freedum's picture

Broadly agree with this but you should know that a 100% reserve system with no fractional reserve banking is NOT a free-market solution and would lead to medieval rates of growth.
This is not a pedantic point since it goes to the heart of why the Austrians lost the battle for supremacy to the Keynesians, notwithstanding the errors of the latter which are well highlighted by this excellent article.

GoodMorningMr.VanRumpoy...'s picture

Slower, growth yes. But real and stable growth. People might actually be able to invest on the fundamentals, instead of trying to take an educated guess as to which way the insiders have the table tilted.

ArmchairRevolutionary's picture

Actually NO.

Growth would continue as measured in value. The fiat rate of growth would slow dramatically, but that would be OK; because the value purchased would increase dramatically and the everyone would not have their pockets picked by the money printers.

oddjob's picture

William K. Black, currently an Associate Professor of Economics and Law at the University of Missouri-Kansas City

Jay Gould Esq.'s picture

Seriously, Pater -- when, in recorded contemporary history, has Krugman ever "got it ?"


Doña K's picture

In the late 1990's early 2000's Krugman wrote extensively about Japan. I dug this article I had read at the time.

I am not an Economist, so I ask that someone read them and tell us if he is a Genius or a Charlatan.

Segment below:

Japan's economic malaise is first and foremost a problem for Japan itself. But it also poses problems for others: for troubled Asian economies desperately in need of a locomotive, for Western advocates of free trade whose job is made more difficult by Japanese trade surpluses. Last and surely least - but not negligibly - Japan poses a problem for economists, because this sort of thing isn't supposed to happen. Like most macroeconomists who sometimes step outside the ivory tower, I believe that actual business cycles aren't always real business cycles, that some (most) recessions happen because of a shortfall in aggregate demand. I and most others have tended to assume that such shortfalls can be cured simply by printing more money. Yet Japan now has near-zero short-term interest rates, and the Bank of Japan has lately been expanding its balance sheet at the rate of about 50% per annum - and the economy is still slumping. What's going on?

And the sequel

knukles's picture

He is neither Genius nor Charlatan. 

Krugman is to Economics as Cramer is to Investing. 
Lousy intellectual foundation utilized by his employer for entertainment and ratings. 

TheFourthStooge-ing's picture


He is neither Genius nor Charlatan.

He is the pinnacle, the very apogee of mediocrity.


Element's picture

So, when they decide who gets the no-bell prize in eco-nomes, they like flip-a-coin or draw-straws, then the winner draws a name from a hat of known tribalist retards, or something like that?

AnAnomalous's picture

He is the pinnacle, the very apogee of mediocrity.

Such is to say, he is typical USA American citizen.

Not like Chinese man usually, who is knowing the follow of orders and central command structure in the instinct of.  Not so with USA citizens, who do thinking more with big swinging penises and not brains of them. 

Brains are hallmark of Chinese citizens.

Brains and Communist Party dictatorship are the why we Chinese future crush the USA big noses, and leave them in the powder.

TheFourthStooge-ing's picture


Brains are hallmark of Chinese citizens.

Ah, ah, and thus the bird of Chinese citizenism attains nirvana. Very roundaboutish, in a Chinese citizenism way sort of being is.

Brains and Communist Party dictatorship are the why we Chinese future crush the USA big noses, and leave them in the powder.

...but not the powder of rhinoceros horn, which Chinese citizenism practice uses for enhancement of penises sized of elevator button and needing strong remedy of much vigorously.


Doña K's picture

I wonder if these contradict what he is saying nowadays.

I am aslo curious if he lives in an Ivory Tower himself or on Mahogany Row.

DavidC's picture

Touché! And spot on!


Withdrawn Sanction's picture

Can someone give an example of an economist/politician with a beard that can be trusted.

Santa ...?

DavidC's picture



wisefool's picture

+1. "I cant repatriat those dollars!"      "You must repatriate those dollars."  "But you dont understand. Its the tax code."

Do I look good in this Shirt?

bobert's picture

This is a surprisingly stupid comment from you.

I stand in defense of bearded economists!

Jay Gould Esq.'s picture

Well done, Hedgeless Horseman. A line comes to mind, from "The Fountainhead," where Toohey asks Howard Roarke, "What do you think of me, Mr. Roarke ?"

The response -- applicable, frankly, in the context of Krugman...

"But I don't think of you."

johnberesfordtiptonjr's picture

Wow, man... that's just so like POWERFUL.

If only we all could have that wonderful and beautiful lack of caring.

I'm getting misty-eyed just thinking about it.

wisefool's picture

And with that, I am off to the coast to coast AM archives to see if Krugman has been on there.

I seriously do not want to be in a foxhole with him vs. the Timmahs/reptoids.

vast-dom's picture

stick to religion hedgeless, that's clearly your forté.

Pure Evil's picture

Well, maybe not, anyone can regurgitate what they've read in a book.

When he starts his own religion then we'll consider it.

Temporalist's picture

Keynesian economics and fiat monetary systems are the special and exclusive religions of the elite.

johnberesfordtiptonjr's picture

Ellsworth Toohey indeed.

A man with such a name is an effeminate elitist intellectual snob. No doubt he’s a socialist. Why, his last name alone sounds like someone spitting… as in PTOOEY, for example.

Only people with hard sounding short names like Galt or Rearden, or perhaps “Rand” can truly be self-actualizing heroes. They are free men who follow objective reason.

With this new understanding, I intend to add Krugman’s picture to my “hate wall” along with FDR, Bernanke, and the recently added Warren Buffet.  

Lednbrass's picture

Do you wake up early to practice stupid or is it just a gift?

nmewn's picture

I'm thinkin he's subsidized for it. No one would do it for free knowing what we know now.

Element's picture

What is really sick is that Krugman says we should be "throwing everything at this", by which he means mega-printing and colossal deficit expansions ("including the kitchen sink" was one of his pro-printing lines from last year), so that the poor and the middle class (which share a fair amount of overlap) may be spared the ravages of the current small depression becoming a Great Depression.

I'm pretty sure he now has had his Spring 2012 Bernankle chip-implant upgrade, which would explain the garbled to completely insane mock-defense of Federal Reserve's defacto inflationism, as a sort of commandeering of national economic policy, and what has to now passed as US fiscal forward-planning.

It should be very clear to all by now that Paul Krugman is nothing more and also nothing less than a hired FED SHILL.  

He's the guy Elders Greenspan and Bernanke wanted out there to provide just this sort of 'respectable' cover for the FED/TBTF Coup's PR facade, as it emerged from cover, after so many decades of pretending to be harmless and NET beneficial.



lamont cranston's picture

Whate the hell. Gary Cooper/Howard Roark still wonked Patricia O'Neal/Miss Rincon. And Paul Newman didn't in Hud. God, was she hot in Hud, back when that was a man's nickname.

midtowng's picture

Those that think that wealth inequality is not important have learned nothing from history.

First of all, wealth inequality is corrosive to the markets because those with an overabudance of wealth always tend to try to protect it by twisting the political and economic system in their direction.

Secondly, it is corrosive to democracy because those with wealth can buy power. (see the first point)

Anyone who thinks that wealth inequality doesn't matter has been sold dogma and ignores reality.

AnAnonymous's picture

Who cares as long as the fruits brought by the free market are shared by all?

It is very easy to achieve actually the US citizen way: you simply do not account for people who do not have an access to the fruits and you are left with people who have access.

Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

Well, what do you expect from an Ewok?