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

Tyler Durden's picture

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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narapoiddyslexia's picture

That Ewok threw my 89-year old Mother under the bus. I tried to leave a polite comment to that effect under his article on the NYT web site (yes, I pay the NYT) and he wouldn't let it post. He can go to hell.

knukles's picture

I had a similar experience with a comment sent to the Economist reflecting upon Ted Kennedy after thier article(s) lionizing the man as a standard bearer of freedom, democracy, equality, etc., etc., ad nauseum, horseshit and pabulum.
I pointed out that had it not been for his two assassinanted brothers, he'd of probably been relegated to the lower reaches of drunken obnoxious priviliged ineffective politicians in the grand design of Wilbur Mills splashing about in a fountain amusing one of his hussies.
Albeit, it was extremely sensitive, respectful and polite couple of paragraphs that I submitted. 
It was printed on the web, as were many more of a similar ilk from the US readership.
Several hours later I got an e-mail stating that if I ever pulled a fucking stunt like that again, villifying, defaming, etc., somebody, breaking every single rule of civility and appropriateness (none of which were done, swearing, cursing, defimation etc., not a single one as I'd taken pains to not offend) that they'd pull my commenting rights.
Not only that, they'd removed my comment critical of the man as well as every single other not of high praise and adulation.
So I let my subscription expire.
Fuck them and the Illuminatti NWO program they profess not to profess.
Nothing but censorship, directed history, Propaganda and fabrications.

What a buncha Cocksuckers.

nmewn's picture

Double up yo.

At what point in time was it mandated that all brothers & sisters shared the same values and thoughts? Papa Joe (a known bootlegger, nazis sympathizer and short seller) had offspring.

Yet, it is presumed they were all the salt of the earth types...Camelot is a fairy tale, but someone was Mordred in the tale.

hedgeless_horseman's picture





But really...duh.  Look who the advertisers are for The Economist.  It is a Whose Who of TBTF.

Miffed Microbiologist's picture

I don't know about that. Ewoks are kind of cute. Krugman looks like a young "cleaned up" Charles Manson to me. Just stick a swastika between those eyes to complete the look.


knukles's picture

Look closely at his eyes.
Solid black.

He's fucking proof positive that there are Reptilian Alien Malfactors Plotting the Downfall of Mankind Amongst Us.

PaperBear's picture

These guys self-satire.

moskov's picture

He is a piece of shit. Who cares if he gets it.

Temporalist's picture

Readers here only "care" insomuch that he's influencing masses of sociopath sycophants that will continue to spread his diseased manure via mass media and educational institutions.

What's worse is that his writing and theories could easily be replaced by MillionDollarBonus_ and nobody would notice.

Pretorian's picture

He sold his sweet ass to 1% long time ago for a nobel 1 penis. Now he have to stand and defend them from russian type revolution.

New World Chaos's picture

<--- Krugman really is this stupid/delusional.

<--- The puppetmasters have serious dirt on him.  Ideas?


TheFourthStooge-ing's picture


He sold his sweet ass to 1% long time ago for a nobel 1 penis.

He's a butthole laureate.


dcb's picture

I send massive data to the nytimes from many pundits against krugman's thoughts. have snt so mny articles on this subject alone it is astounding. I deecided that with this one, just like the bank krugman is a pathological liar, or such a concrete idealog he just can't adjust his policies. One thing I know for certain is that he in no way understand how banks operate in the united states any more. While. the banks are trading operations, and by banks we mean wall street, derivative trades, etc. actually lending is only  avery small portion of their business. Krugman just ignores this. In fact it's im0proper to call the big banks banks any mnore. they are trading houses.


Krugman also ignore that they get paid on asset prices, that also determines their solvency and pay. all f which is helped by zirp.

It of corse also ignores how each time the market dips tthe bankers call for more qe. I found it funny that he really bastardized himself with this/

if you follow this link to the paradigm lost section, there are multiple lectures on inequality fromthe berlin conference  of the institute of new economic thnking, also multiple on building a socially useful financial system (i think the benzemer lecture here is very good), and financial instability. really must watches for all

for ther record each economist in this lecture serices presents evidence on how wrong krugman is in the above

narapoiddyslexia's picture

Maybee hee ist de forriner. Kut heem sum slak.

dcb's picture

ir dyslexia, or no spell check, or typing in the dark. but he doesn't understand english. my grammer was OK, it's the spelling that isn't

bobert's picture

Use your fingers in addition to your thumbs.

Practice makes perfect.

dcb's picture

The European: So let’s take a longer view. Do you think that the crisis will have an effect on future generations of economists and policy-makers, for example by changing the way that economic basics are taught?
Stiglitz: I think that change is really occurring with the young people. My young students overwhelmingly don’t understand how people could have believed in the old models. That is good. But on the other hand, many of them say that if you want to be an economist, you still have to deal with all the old guys who believe in their wrong theories, who teach those theories, and expect you to believe in them as well. So they choose not to go into those branches of economics. But where I have been even more disappointed is American policy-making. Ben Bernanke gives a speech and says something like, there was nothing wrong with economic theory, the problems were a few details in implementation. In fact, there was a lot wrong with economic theory and with the basic policy framework that was derived from theory. If your mindset is that nothing was wrong, you will not demand new models. That’s a big disappointment.

Belarusian Bull's picture

MillionDollarBonus is surely Krugman.


Lednbrass's picture

At least MDB knows he is joking, Krugman is genuinely serious.

Or genuinely psychotic, its a coin toss.

Vegetius's picture

The corridors of power here in Europe are full of people high on Self-delusion and greed.  You cannot (or can) blame people for defending their pensions or wages by using Krugman Defence or any other rubbish. They know it’s all lies, but here’s the thing “They Don’t Care” The only thing these Guys care about is walking with as much loot as they can stuff in their pockets.

Fun while it lasts I suppose and that’s the big question “How Long Will It Last”

Corn1945's picture

Call Krugman and the Fed what they really are---> Financial Terrorists

Terrorists that are far more dangerous than some guy with an AK-47 halfway around the world. 

Everybodys All American's picture

The other thing about this whole Fed driven economy is that the average person does not have the access to their agenda. Banks certainly do but the average Joe has no chance of competing in this game. You talk about trading on inside information. Bernanke has pretty much signaled he will give all that and more to bankers.  There can be no bigger inside information trade then knowing what Fed policy will be before everyone else knows. The Fed has lately at least under Bernanke turned in to a wink wink nod nod player for bankers.

razorthin's picture

The problem with this Fed driven economy is that the average person's eyes glaze over when you try to explain the lunacy of it.  That's why it is so maddening being me.  No, I am the lunatic.  Wow.

Lednbrass's picture

Just look at the comments below Krugmans column, several "Occupy" types there are going on about the WSJ pandering to the 1%, then thanking Krugman for his defense of the 99%.

Its absolutely breathtaking stupidity, and what is worse they are allowed to vote.

nmewn's picture

It is/was breathtaking to watch.

I mean really, multi-millionaire Michael Moore and every "stimulus enabled" tenured professor and pol with no honor and guilt to assuage doing "tent city" before heading back air their conditioned comfort and drinks on the veranda.

Really mind boggling.

But it does seem the "print parade" has rounded the corner and the music is fading...

"Portuguese Finance Minister Admits Stimulus Failed"

Oh noes and no shit.

bobert's picture

How long....

That is the question MN.

How long can it keep going?

Oh how I long for free and fair markets.

bobert's picture

Being on an IPO list, dealing in distressed assets, and having inside information is truly an advantage.

Seasmoke's picture

Don't ever trust anyone who got a Nobel they did not deserve

LetThemEatRand's picture

Krugman is a douche, but I don't think you can have a real discussion about wealth inequality rising over the last few decades without addressing globalism and "free" trade with countries that have no labor or environment laws.   

ebworthen's picture

Krugman - the potato with a beard; waxy limpid pools for eyes that some mistake for intelligence versus delusion, a cycloptic mind, emotion disguised as thought.

paso24's picture

The potato with a beard! Love it!

TheFourthStooge-ing's picture

ebworthen said:

Krugman - the potato with a beard; waxy limpid pools for eyes that some mistake for intelligence versus delusion, a cycloptic mind, emotion disguised as thought.

That is a beautiful, accurate, well written summation. I can add but one small contribution:

Krugman - whose dual-purpose beard acts as a drool bib and camoflages his gills.


bobert's picture

I'm liking all of the comments about Krugman accept dislike for his beard.

Give it a break you hairless fags.

Hedgetard55's picture

Shit for brains Krugman really believes his bullshit.

Eric L. Prentis's picture

The delusional, ignorant, naïve and raving stealth neocon Paul Krugman—needs an intervention.


Please remove all sharp objects from Paul’s possession, or he may hurt himself.

Chump's picture

No, give him more sharp objects.  Pretty shiny ones.

TheFourthStooge-ing's picture

...scalpel blades, buffed to a dazzling, mirror-like lustre.


death_to_fed_tyranny's picture


ZeroPoint's picture

Krugman thinks the only difference between rich and poor is that rich people did 'smart' things to aquire theirs. When in reality, most rich people won the womb lottery.

Justaman's picture

What would we do without PK?  He is single handedly keeping the UFO discussion alive!!!!

Caviar Emptor's picture

Welcome to The Stable-But-Shitty Economy. 

Krugman, like so many on WS are happy with it. It means they get to keep their power and their jobs. They think it means that a frightened middle class will be cowed into accepting this as the new reality combined with the implicit threat that it could be turned into something worse. 

Translated, saving the banks, WS and the political power behind them was achieved. Mission accomplished. And the plan for the rest is to accelerate the process which led to this to begin with: more credit, more money printing, more offshoring of jobs and industry and wage-stagnation to keep inflation moderate through loss of buying power. 

Chump's picture

The really shitty part is that Krugman will always be able to say he was "right."  Tepid "recovery?"  Well duh, we should've listened to him and printed even more astronomical amounts of dollars.  Cut deficit spending and debt monetization, and we get to listen to that asshole say "told ya so" after the economy necessarily contracts.  The average person doesn't have the mental acuity to call him on his bullshit, so he just gets to keep spewing it.  Piece of trash.  I truly hope he's bought into his own insanity and has no PMs, no stored food, nothing but fiat.

rsnoble's picture

Greetings Earthlings, nano nano!!

Drinking a few(lot) beers, grilling porterhouses in awhile. Just checking in long enough to say FUCK THE US GOV'T!!! And EAT SHIT FUCK OFF AND DIE TO ALL US POLITICIANS THAT SO GRACIOUSLY SOLD OUR FUCKING ASSES DOWN THE DIRTY RIVER!!!

You're going to FINALLY get what's coming to your smelly asses you cum belching whores!!