The Ultimate Krugman Take-Down

Tyler Durden's picture

Forget Ali - Frazier; ignore Santelli - Liesman; dismiss Yankees - Red Sox; never mind Silva - Sonnen; the new undisputed standard by which all showdowns will be judged happened in Spain over the weekend. During a debate on Europe's crisis, Pedro Schwartz (a mild-mannered Spanish 'Austrian' economics professor) took on the heavyweight Paul 'I coulda been a Fed Chair contender' Krugman, and - in our humble opinion - wiped the floor with his Keynesian philosophy. From the medicinal use of more debt to fix too much debt, to the Japanization of world economies and the demand-side bias of every- and any-thing - interested only in the short-term economic growth; the gentlemanly Spaniard notes, with regard to the European crisis, the fact that "Keynesians got us into this mess and now we have to sacrifice our principals so that they can get us out of this mess". Humble and generous in his praise - though definitively serious with his criticism - Schwartz opines: "Often Nobel prize winners are tempted to pontificate on matters that are outside the specialty in which they have excelled," noting "the mantle of authority whereby what ever they say - whether sensible or not - is accepted with resignation from some and enthusiasm by others." Krugman's red-faced anger is evident at the conclusion as he even refused to shake Schwartz's hand after the debate.

For 15 minutes of both education and entertainment - this is as good as it gets...

  • Starting from around 35:00 the Spanish professor praises and criticizes in a thoughtful and gentle tone
  • At around 39:00, he addresses the demand-side description of the world
  • Krugman's less-than-happy response (which sparks quite a rowdy argument) begins around 48:20


(h/t Jean Luis Martin of the Truman Factor)

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taniquetil's picture

Did Paul "Professional Blogger" Krugman really just claim that he was doing a good job because people disagreed with him?

engineertheeconomy's picture

Hell, you could use that reasoning to say that Obummer is doing a great job too. Actually, he is doing a great job of stealing from the common folk so that the filth rich can get even richer. How about all the cops take a couple weeks off, and then see if those rich bastards still have that stupid smirk on their face. What's left of them, that is.

Alea Iactaest's picture

This seems appropriate...

"A strong conviction that something must be done is the parent of many bad measures." -- Daniel Webster

economics9698's picture

"The banks need to be rescued"  What a fucking surprise.

Inflation, the EXACT fucking thing Montagu Norman talked Benjamin Strong into in 1925.  And we know that fucking ended.

Krugman is always wrong.

WestVillageIdiot's picture

Holy shit, I thought Gerry Cooney took an ass-kicking from Larry Holmes.  That was nothing compared to this.  I thought these eggheads usually held back punches.  This guy beat the shit out of Krugman going up the street, down the street and in the back alley.  These are jabs. uppercuts, body shots and killer head shots.  None of the shots were unfair or illegal.

Fuck you, Krugman, you are a voodoo Priest piece of dogshit.  You lie.  You steal.  I have seen your textbook work.  It is an insult to humanity.  The fact that college kids get taught from a book that you wrote is a crime against humanity.  The fact that you accept money for that pablum shows you to be as large a crook as anything on Broad Street, Water Street or Wall Street.  You are an intellectual Nazi leading young people to the proverbial showers.  You are an evil being and yes you deserve to be compared to the Nazis.  That is not hyperbole.  Reality can be painful but with one as wretched as you, that is the reality. 

economics9698's picture

Expansion of the monetary base is not inflationary because the money is parked in excess reserve.

The deficits have not led to increased interest rates because the Fed is printing. 

When ZIRP ends 

flacon's picture

OMG, listening to Keynes spout his mouth like that..... ughhhh.,..,., oh did I say Keynes... Krugman spout his mouth like that....... welll llllll... come on motherfucker.... print, PRINT, PRINT, PRINT, PRINT! PRINT YOU MOTHERFUCKER!  See if THAT gets you your twenty three trillion dollar spending package you motherfucker ass rapist beast! 

flacon's picture

Hey Bernanke, guess what? FUCK YOU ASSHOLE!

Fukushima Sam's picture

Okay flacon, less venom, more ribaldry.  Yeah, that's it...

Pinto Currency's picture


These Keynesian promoters must know that they are intellectually dishonest.  Their positions of recognition come from their approach of inflate, inflate, inflate and, on some level, they know it satisfies the banking class / political establishment / commercial media who in return give them power.

The teary-eyed stuttering that Krugman displays is of one who, on a sub-conscious level at least, knows that he is a huckster and just prays he can get out of town before the approaching outraged mob of fleeced townfolk gets to him.  Hah mule!


p.s. so much for Youtube stats - 10,300 reads on ZH and 2,190 views on Youtube.

Escapeclaws's picture

Webster Tarpley even goes further and suggests that the elite are actually engineering this takedown of the world economy. Though this idea has been repeated ad nauseum on ZH in the comments, Tarpley shows that it is plausible in light of his own recasting of the Great Depression of the 1930's. See his paper

This paper should be read by all people who would otherwise just be giving credence to conspiracy theories regarding the present crisis.

HoofHearted's picture

I love the fact that Austrians can tear people apart in the nicest and most respectful of ways. Dumb asses like Krugman, though he attempted to show some gentility, showe who he really is. "You're saying we're not qualified." "I didn't run you down, not at all." And, of course, it is up to the watcher to decide who is correct. But Krugman does seem to think he knows everything. Us Austrians know that we know almost nothing and therefore don't try to engineer the outcomes we want. And that seems to be the problem. The quote about throwing away our principles so that they can get themselves out of the mess...priceless. And 100% correct.

Double down, Paulie. Double down. Damn the torpedoes....

Nothing To See Here's picture

My favorite Krugman KO came in 2008 about public health care. Worth 34 seconds :

economics9698's picture

Krugman.. the federal portion of the Y + C+I+ G+ NX expanded from 20.8 to 25.2% from 2008 to 2009.  Keynesian stimulus on steroids...and it failed spectacularly.  This fucker is running such a con game for the NYC elites its pathetic.

WestVillageIdiot's picture

There are no shortage of delusional assholes in NYC.  Sadly we are in surplus on that account. 

New_Meat's picture

dang, we haven't reached peak "... delusional assholes in NYC."

- Ned

economics9698's picture

“We didn’t have a modern recession until the 1870’s.”  Completely clueless, 1816, 1837, 1781, fuck and this list is incomplete.  How in the fuck do I get a job where I can spit out shit and get paid the big bucks?

Sign me up.

LawsofPhysics's picture

Correct.  Krugman is a fucking intellectual idiot mouthpiece for TPTB.  Notice how he wants to ignore the issue of "solvency" right up front.

economics is bullshit, and those who pontificate it are always contradicting themselves.

There is a simple solution to fix the world economy, do what Nature does and inure that there are real consequences for bad behavior AT ALL LEVELS.

Solvency may not matter to Krugman, but it sure as hell will matter when all his paper is fucking worthless.  Krugman and Summers should be among the first in line for the guillotine.

HoofHearted's picture

You missed his point. He said, "modern recession." Unfortunately, he defines modernity as 1865 and forward. And then that sucky Long Depression from 1873-1896 that everyone forgets about...shit. Krugman's busted again. Nevermind...I try to help him out, but he just keeps openingh is big fat mouth.

Anyone think he looks like he should be in pajamas, eating Cheetos, in his sister's basement? A suit and tie just don't seem right for him.

fresno dan's picture

Its been discovered that delusional NY assholes are schzophrenic...and that their multiple personalities can, like money printing, expand infinitely.  The economy can collapse due to NY delusional assholes.... but the supply of delusional assholes can expand infinitely!!!

Popo's picture

If you want to see *true* flailing, skip to 1:20:30 where Krugman stumbles over himself embarrassingly trying to answer a question about the inherent contradictions in his position. (The contradiction being the preservation of wages, asset values & markets vs. competitive exports). He then tries to make it seem like he actually knows what to say but "doesn't have time".  Uh huh.   it's clear that he's completely busted as he rambles on about Spain being "increasingly an export economy and increasingly an import economy" (LOL what???) ...   That must be like an "underlying overlay"? (yes, he really said that).  

As is usual in the Economics racket -- his glaring mistake isn't a mistake at all.   No sir.  It's just incredibly, incredibly complex requiring hundreds of additional theories and formulas to cover up for the basic half-baked contradiction of a society attempting to sustain exports, wages, demand and asset values simultaneously.  

Don't worry Paul.  Trade deficits as you well know (you Keynesian fucktard) don't matter.  Afterall, what flows out can just be replaced artificially ad infinitum.  So yeah, sure, the economy is growing and balance of trade is just a weird little (cough cough) "anomaly".    It'll all sort itself out in no time at all, old boy.

Krugman goes for the old, "I could explain it to you, but I don't have time" dodge.  But his setup to his own dodge outlines the contradiction perfectly. He's cornered and he knows it.   

At the end he says, "Good question" as if the Spanish audience member asking the question (most likely an educated economist in his own right) is a pimply-faced college freshmen.  

It was indeed a good question.   Krugman's answer on the other hand was pure hocus-pocus, smoke and mirrors bullshit.





Escapeclaws's picture

The problem with your comment is that it is not short and pithy like those of flacon who also spices his with colorful language.

You also say, "It's just incredibly, incredibly complex requiring hundreds of additional theories and formulas to cover up for the basic half-baked contradiction of a society attempting to sustain exports, wages, demand and asset values simultaneously."

Well, you must realize that epicycles did do the job before the age of Copernicus. Epicycles do work in describing the motion of the planets in the case where the sun revolves arount the earth. Krugman has done great work in what amounts to Keynsian Economic Epicycle Theory and has greatly advanced our knowledge of economic epicycles. If you want the equivalent of a Copernican Economic Theory, you need to follow Steve Keen. However, Keen is an outcast and has been excommunicated.

Krugman has not studied enough math to do what Keen does, which is to formulate things in terms of differential equations.  A differential equation is just an equation that includes a rate of change of a quantity. For instance, given a fixed interest rate, your money grows exponentially over time in a savings account using continuous compounding. This comes from incorporating a rate of change in an equation. Not so tough to understand. But Krugman would have to completely retool to learn to think in this fashion--as is the case for all neo-classical economists. Rather than admit their basic ignorance, they pontificate using what amounts to hocus pocus, shifting supply and demand curves right and left. They know nothing of non-linear dynamics or singularity theory.

Keynesians are people who love money. They are happy when people give them lots of money. They then realize that if this procedure works at a personal level, it is easy to generalize it to a whole economy. If the economy is sad (ie, moribund), just print money and throw it at the economy. Krugman demonstrates this in his little book on Depression Economics using the Capitol Hill Babysitting Coop example. Infusions of large amounts of money are all it takes to create "confidence". Confidence is like a baby's smile when you give it a lollypop.

Lebensphilosoph's picture

Stop comparing phsyics with the pseudoscience of economics. Human behaviour is not susceptible to  mathematical modeling and will never be modeled.

There is no Copernicus or Newton of economics.

Escapeclaws's picture

Nonsense. You can model many things with mathematics. Already mathematical biology has made great strides. Statistics is a part of mathematics that has modeled many aspects of human and societal behavior very well.

You missed the point about Copernicus--his name was used tongue-in-cheek. Who said anything about Newton? Epicycles were before Newton's time. You must have meant Ptolemy (agree that N and P are close to each other in the alphabet)?

I never claimed Economics is science, just as I would never claim epicycles are science, though, given the time of Ptolemy they might qualify as science, much as string theory does nowadays (which is currently unverifiable by experiments).

Why don't you go eat some vanilla wafers or something?

centipede's picture

You can model many things with mathematics but if correlations do not hold (happens often in economics) you would have to change the model all the time.

Krugman doesn't understand besides math even basic logic. His answer to the lady who asked whether inflation is not a theft proves it. To compare government enforced and counterfeited fiat with unemployment as an equal injustice and justify that one innocent man should pay for suffering of the other is a blatant idiocy.

Lebensphilosoph's picture

Nonsense. You can model many things with mathematics. Already mathematical biology has made great strides.

Living beings are not machines, do not, ultimately, behave mechanically, and their lives cannot be 'modeled' using mechanics, and will remain indeterministic for the purposes of mathmematics no matter what 'strides' are made in your sterile and artificial laboratory environments. The excuse for failure, of course, is the appeal to 'complexity', itself founded in your ridiculous presumptions of materialism and reductionism. It is your bankrupt metaphysics which is ultimately nonsensical, as has been shown, demonstarted and proved countless times in the history of philosophy, and will continue to show itself incapable of completing the impossible task which it has set itself with the mathematical sciences.  In spite of their pretensions of the intellectual omnipotence of their formalistic game of symbols, mathematicians don't get all the girls, and there is a good reason why. If I want to know abotu human behaviour, I''l go to the likes of Shakespeare, Dostoevsky, or Nietzsche, and not some pencil pusher in a laboratory whose social life consists playing World of Warcraft every evening after work.

Statistics is a part of mathematics that has modeled many aspects of human and societal behavior very well.

No, it hasn't. It can't determine what history will happen tomorrow, nor what a person will say, think or do even from one minute to the next. I am afraid it is you, not I, who has imbibed nonsense.

Escapeclaws's picture

What about those vanilla wafers?

HoofHearted's picture

OK, seem to have missed some of the points of economic models. If you have all the underlying assumptions, then you certainly can predict (with some degree of confidence or probability) what will happen next. The same thing happens in physics or biology. But every once in awhile, in each of these subjects, something breaks down. For instance you drop a ball and it should fall to the ground at your feet...unless a big gust of wind comes along.

The problem with stats and economic models is that people don't behave like the assumptions. Not everyone is a "homo economicus" in the sense that someone wants to say is rational. Everyone has their own reason for making their own rational choices, even if they disagree with mine. And that's perfectly cool. Live and let live.

But here is where the real underlying philosophy shows up. I say let people do what they want to do, even if it seems stupid, so long as it doesn't harm another, break contracts, take the property of another away or demean its value, etc. Krugman seriously thinks we should all act the way he wants us to act. Call it fascism or communism or whatever. It's not something I can stomach.

So I keep trying to figure out if you're holding aces or rags. I make my decisions based upon what I know and have observed. And often I'm surprised...but I can keep watching and hope to figure more out along the way. I can look at how a country responded to a certain type of policy previously and hope to extrapolate something, with some degree of fear and trepidation that this time might be different. But I wouldn't try to force someone to do what I want.

Captain Kink's picture

Human beings are not machines, true, but their behavior can be predicted, particularly in the aggregate.  One need look only as far as the incentive structure in the economy:  taxes and taxes breaks, interest rates (for borrowing and especially savings), regulations, stability of currency, etc.  Keynesians seem to believe they can induce individuals to consume by flooding the economy with money.  Reducing interest rates to zero removes the incentive to consume of those on fixed income (as their incomes decline) as well as those earning their incomes (as the negative signal regarding the health of the economy brings caution).  It does achieve higher "asset values" when measured in inflated currency, in that remaining risk capital is forced away from bonds.  Lenders are disincented by low rates for obvious reasons.  If Keynesians were correct, long interest rates would move up instead of down with the short end at zero. 

It is all about incentives.  If  you want to create jobs and spur economic activity, create incentives toward that end:  encourage capital formation and let the markets determine lending and savings rates...rather than redistibute income and repress financial activity with central bank policy. 

fnordfnordfnord's picture

At least 11 people here can't identify satire.

Kayman's picture


Well I can sympathize with your theme, once you accept Quantum Mechanics, you accept Probability.

Once you accept Probability you accept Economics.

The problem with contemporary Economics is Central Banking and Crime.  Tough to get textbook outcomes when the table is rigged.

SAT 800's picture

But there is a Copernicus of Economics; his name is Bastiat and you can download his writings from the Mises Institute Web page. They are not mathematical models; but rigorously logical analysis full of common sense.

azzhatter's picture

We have a strong current assholiness account. It's our only positive balance

flacon's picture


krugman:  inflation equals production 



gdp = g


Both wrong.

strannick's picture

The latins are so civil. Watch as they respectfully, politely and deferentially, call someone an A-hole

eclectic syncretist's picture

I believe ZIRP and Fed easing has already went beyond the point of no return.  It can never be ended because the primary purpose of the Fed is to supply government with endless loans, and governent can't pay a normal rate of interest.  We are officially going down the path Japan set out on 20+ years ago, and the economy will never come back under the current monetary regime.  The can will continue to be kicked as far as possible.

brettd's picture

Spot on. 

That parents are forced/suckered into paying for their children to listen to his fraud should be a crime.

Joseph Goebles would give The Krudman an "A".

Atlas_shrugging's picture

Check out 1:32:00... Krugman catches himself in a bit of reality on healthcare, calling continued growth of healthcare costs in excess of GDP impossible...because "We'd run out of money".   Hmmmmmm

HungrySeagull's picture

Debt is money.

As far as healthcare is concerned, ditch the technology and keep the white sheets and blanket. Plus a attending constantly in the ward.

Hospitals are places where people are shipped to decide if they want to live or die. If they are going to crash, they will do it right there on the CT table.

SAT 800's picture

Simply adopting the Canadian National Health Care plan solves the problem immediately; but there is no point in discussing any rational solution because it is impossible. If you try to take the money away from the private health care insurers, as they style themselves, bandits or pirates would be more accurate; they will simply buy the Congress Criturs and prevent this. If you try again, they buy them all over again. This is where you live. This is your country. It has a government by the corporation, for the corporation, and of the corporation. What Obama did, because this is what he agreed to do, in order to meet the criteria for the President Marketers; is sell you to the insurance companies; that's all obamacare is. Fraud and thievery hide behind spin and propaganda and honesty doesn't dare show its face.

JailBank's picture

Krugman is a mouth breather.

WestVillageIdiot's picture

Only when he's not sucking the dick of one of his puppetmasters. 

Herd Redirection Committee's picture

"The road to hell is paved with good intentions"

Krugman talking about interest rates, and the lack of inflation due to expansion of the money supply...  Wow, how ingenuous is this b******?  His buddies are busy manipulating markets, LIBOR, suppressing gold, and he has the gall to talk about this stuff?  They are kicking the can down the road, and saying "Others predicted we would have already run into the can again, and yet, its down the road, as you can plainly see..."

Missiondweller's picture

I just shook my head when he pointed to "low interest rates"despite QE as if the rates reflected the free market and not Operation Twist Fed manipulation.

Tirpitz's picture

Germany doesn't have an operation twist...

vast-dom's picture

krugman is disingenuous and as such incapable of answering any germane question head on. AD is no longer AD when central planning becomes a massively large component of your D curve, not to mention ZIRP profoundly distorting markets. If economics is about free markets, then krugman is practicing something wholly different than economics; namely, krugman is practiciing public policy with CNTL+P and other fiat gov distorted manipulation interventions; ergo, this brand of economics is anathema to free markets.

This upcoming crash will disprove Krugman yet again and i have little doubt that he will possess the grace to admit that his career is predicated on judgement that is as poor as it is erroneous. 


case in point: how is this economics and not Libor-grade gaming of markets?:

Growth is not something to "prop" up; growth is a function of structural cyclical factors and SAVINGS, NOT GOV SPENDING FAKE FRESHLY PRINTED UP FIAT FOR FAKE AD. You can't spend your way out of debt and into growth. It may appear like growth, but it is flow that has no substance like the SP floated up. And it does not alter consumer credit which is a scary thing as is the component of student debt, since QE is for the insolvent banks and not the insolvent taxpayers that subsidize the private central bank that has a dot gov url which takes in treasury profits yet is not public but whose heads are picked by elected leader despite it all subverting the reserve act of 1913 and the constitution etc etc etc obvious how perverse this game is.....

Think about it on micro micro level: a guy calls up his bank and says, "while I realize I can't pay down the $35k on my credit card, I still need another line of credit extended to me, so that maybe I can pay down the $35k at some point......and i could leverage that $3k credit to buy the thingamajinga that i already bought that obummer may or may not extend me......" Krugman<->Fed = Insanity = Unsound Econ for REAL WORLD SUFFERING

Arnold Ziffel's picture
Many Wall Street executives say wrongdoing is necessary: survey(Reuters)


"1/4 of wall street believes unethical or illegal behaviour is key to success..." and the other 3/4 lied on the survey.

Kayman's picture

"1/4 of wall street believes unethical or illegal behaviour is key to success..." and the other 3/4 lied on the survey".

I spit coffee over my desk !  Beautiful  !

I can't help but notice all the news articles trickling out about how lying is necessary because people "can't handle the truth".

People can handle the truth, criminals can't.