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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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Mon, 07/09/2012 - 21:52 | 2600814 Yen Cross
Yen Cross's picture

 Krugman has quite the "Jelly Belly" , from all his quasi/liberal pals @ the " New York Times" , Luncheons! On the taxpayers dime!

Mon, 07/09/2012 - 23:00 | 2600988 WestVillageIdiot
WestVillageIdiot's picture

They are not quasi-liberals.  They are liberals, alright, in the modern sense of the word.  The word "liberal" now means nothing more than a hater of personal freedom and a lover of big government, big government that will tell everybody how to live their lives (no soda over 16 ounces) and still have plenty of room at the trough for its favored zealots.

That is what a liberal is.  Paul Krugman is definitely a liberal.  The NY Times is loaded with liberals.  They are haters of freedom and common sense.  They are hates of personal responsibility.  Their dream world is a crater but god damn it, it is their crater. 

Mon, 07/09/2012 - 23:41 | 2601076 FFox
FFox's picture

And you Bushkoff neo-cons have done such a wonderful job aaeee?

Who was in office when the economy blew up dingle head... neo-cons!  Remember your guy... Hankee Paulson... bankster con... so the tea party conservative dingle heads can weep all you want... cause your ilk are the dumest sheeple in the shearing line.

President Dwight D. E. would roll over in his grave... along with Mr. Goldwater, for what passes as conservative these days.

Criminals at work every minute of every day... in fact every mico second with their high speed trading rip offs (tip of the iceberg) and bankster funded campaigns.

Neo=con sucess story:  The sheep are now shearing each other!  What power they!

Neo-con men handed trillions to the neo-con loving banksters... and you think liberals are dumb!

Hey.... we would have actually built something with that money... maybe help with a decaying infrustructure to start.... mr. dingle head, neo con man.

Mon, 07/09/2012 - 23:48 | 2601090 WestVillageIdiot
WestVillageIdiot's picture

Nice job with the straw man attempt.

I love moronic liberal arguments.  "You disagree with liberalism stupidity so you must be a Fox News wathcing neo-con, Bush loving, bankster embracing conservative hack."

You're an idiot.  If the subjedct here was the jackasses like Bush or Paulson I would be just as criticial.  But the subject here is that asshole Krugman and he proudly proclaims himself a "liberal".

Now go get your fucking shine box.

Mon, 07/09/2012 - 23:49 | 2601093 i-dog
i-dog's picture

Ummmm ... the neo-cons are led by Kissinger, Brzezinski, Perle, Kristol, Rockefeller,.........

U R konfused, boy!

Mon, 07/09/2012 - 21:53 | 2600815 RiotActing
RiotActing's picture

Who the fuck engineered this audio? They need to be shot...

Mon, 07/09/2012 - 21:54 | 2600818 LetThemEatRand
LetThemEatRand's picture

I thought they were both incredibly smug, and they are both wrong because they both ignore human nature in favor of theoretical models that do not exist in reality.

Mon, 07/09/2012 - 21:54 | 2600819 Hype Alert
Hype Alert's picture

Krugman: 49:30 "In a way, nature has given us an excellent experiment"?  BS!  Nature had nothing to do with this crisis, the professor is spot on!  "Keynesians got us into this mess and now we have to sacrifice our principals so that they can get us out of this mess"

Mon, 07/09/2012 - 23:11 | 2601020 ejmoosa
ejmoosa's picture

I sure as hell did not hear Krugman explain what has happened to Japan.  How has that "experiment" turned out?

Mon, 07/09/2012 - 21:54 | 2600820 Miles Kendig
Miles Kendig's picture

Krugman, the Vicar of perfection simply cannot comprehend that anyone would fail to encompass the infailability of his brilliance, in every subject matter.

Looks like Krugman wishes to echo Rojoy's comment about Uganda by saying the US isn't Spain, you ignoramus of the Austrian ghetto.  Now borrow more money you stupid fuck.

Mon, 07/09/2012 - 21:55 | 2600822 SMC
SMC's picture

Pedro Schwartz rules!   Awesome!




Mon, 07/09/2012 - 21:56 | 2600825 world_debt_slave
world_debt_slave's picture

I doubt Krugman even knew it is impolite to point the bottom of your shoe at someone.If Krugman was in an Islamic country,he wouod've probably been stoned to death.

Mon, 07/09/2012 - 22:10 | 2600864 Sophist Economicus
Sophist Economicus's picture

Note to conference planners - move the venue to Saudi Arabia next time

Mon, 07/09/2012 - 23:03 | 2600995 WestVillageIdiot
WestVillageIdiot's picture

"They'll stone you when you are young and able
They'll stone you at the breakfast table

They'll stone you when you are on the rag
They'll stone you when you are a douche-bag"

Apologies to Bob for taking license with that one.

Mon, 07/09/2012 - 21:58 | 2600827 cohutt
cohutt's picture

Look carefully and you can spot the Moobs growing under his lapels

Mon, 07/09/2012 - 22:20 | 2600887 Offthebeach
Offthebeach's picture

Give Paul a break. Bwarny Fwank didn't come back to Paul, and just married "DudKrug, much younger then Krugman.

I suppose he could beard Mo Dowd as "the husband ". But her drinking, a all those cats and the cat piss stink

Mon, 07/09/2012 - 23:04 | 2601001 WestVillageIdiot
WestVillageIdiot's picture

I just had an awful vision of being in hell and having Satan tell me that my punishment is that I have to titty-fuck Krugman.  That is going to leave a scar. 

Mon, 07/09/2012 - 22:00 | 2600829 palmereldritch
palmereldritch's picture

"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"

Translation: (Real) Money talks.  Bullshit walks.

Take a walk Krugman.

Mon, 07/09/2012 - 22:00 | 2600837 Slipmeanother
Slipmeanother's picture

Krugman is a perfect example of KNOWING he is one of the chosen ones---fck him, hes just another overinflated ego

Mon, 07/09/2012 - 22:05 | 2600842 Temporalist
Temporalist's picture

At about 13 min in he says you would be looking at the chart of unemployment and saying "Something is very wrong here; we desperately need policy."

No you androgynous chinchilla, POLICY is what created that chart.  Neo-Keynesianism created that chart.  Neo-Keynesianism will make that chart worse.

Debt does not create growth.  Ask a farmer what happens when you spread too much fertilizer..actually he spreads more fertilizer than all the farmers in Spain.

Mon, 07/09/2012 - 22:21 | 2600890 fuu
fuu's picture

"No you androgynous chinchilla"

<golf clap>

Mon, 07/09/2012 - 22:03 | 2600843 holdbuysell
holdbuysell's picture

Krugman at 49:30: "Nature has given us an excellent experiment at vast human cost, but we've just had an experiment...."

And duly noted.

Tue, 07/10/2012 - 03:35 | 2601308 rex-lacrymarum
rex-lacrymarum's picture

By this Krugman apparently tries to respond to a major methodological problem Austrians have pointed out. All economic schools that rely on empiricism suffer from it, namely the fact that controlled experiments are simply not possible in economic science. We cannot go back in time and persuade Obama not to enact 'stimulus' spending, so  experimental proof of whether it would have been better can not be supplied. That proof can only come from sound theory. Sound theory is the instrument by which we can properly interpret economic history. Needless to say, Keynesian theory is not sound. It is nothing but the same hoary inflationism and underconsumption hogwash that Keynes' ideological predecessors have preached, from monetary cranks like Silvio Gesell to Wadill and Catchings with their rigid circular flow model of the economy. Neither the Keynesians nor the monetarists (Keynesians-in-drag) possess a credible theory of capital, and they are therefore missing a decisive piece of the economic puzzle. 

Mon, 07/09/2012 - 22:05 | 2600849 q99x2
q99x2's picture

Sissy, Krugman is a Sissy. Ha ha ha ha ha ha.

Mon, 07/09/2012 - 22:43 | 2600942 azzhatter
azzhatter's picture

he is pretty faggy acting. Man up krug you just got bitched slapped

Mon, 07/09/2012 - 22:44 | 2600857 Oldrepublic
Oldrepublic's picture

I am not an expert in the art of Spanish swordsmanship, but it seems that the good Spanish professor’s ancestors were quite knowledgeable in that noble art. The professor seems to have finished off the professor from Princeton with a good rapier thust

Mon, 07/09/2012 - 23:08 | 2601006 WestVillageIdiot
WestVillageIdiot's picture

"My name is Inigo Montoya.  You killed my father's economy now prepare to die." 

Mon, 07/09/2012 - 23:38 | 2601072's picture

My father's name was Antonio Andolini... and this is for you.


Mon, 07/09/2012 - 22:13 | 2600871 Seasmoke
Seasmoke's picture

Paul Smugman

Mon, 07/09/2012 - 22:15 | 2600873 surf0766
surf0766's picture

We can surely see he is not in need of a fine meal.

Mon, 07/09/2012 - 23:09 | 2601010 WestVillageIdiot
WestVillageIdiot's picture

You could probably feed a family of four for a week with what you pull from his beard. 

Mon, 07/09/2012 - 22:16 | 2600876 e92335i08
e92335i08's picture

I don't even know how that idiot Krugman even won the Nobel Prize. He's a piece of SH*T. The world would be a much better place if he wasnt around.

Mon, 07/09/2012 - 22:26 | 2600903 Seasmoke
Seasmoke's picture

same way that Obama did......its meaningless

Mon, 07/09/2012 - 23:10 | 2601013 WestVillageIdiot
WestVillageIdiot's picture

It was about trade policy, not monetary policy.  Plus, the Nobel for Economics is a bullshit award that was bought for the banker.  It is like Homer Simpson getting his award for Excellence.  Meaningless beyond belief. 

Mon, 07/09/2012 - 22:17 | 2600880 wagthetails
wagthetails's picture

What did the five fingers say to the face? SA-LAP. All kindding aside, excellent. Although i do feel bad for Krugz, he probably had no idea he was going to be attacked so violently. But some of that may also have been lost in translation.

Mon, 07/09/2012 - 23:11 | 2601019 WestVillageIdiot
WestVillageIdiot's picture

You lost me at "i do feel bad for Krugz".  Fuck him and the horse that rode him in. 

Mon, 07/09/2012 - 22:21 | 2600891 Everybodys All ...
Everybodys All American's picture

Krugmans defense falls completely apart without LIEbor manipulation of interest rates and inflation by central banks. BTW what a fucking asshole.

Mon, 07/09/2012 - 22:23 | 2600894 Catflappo
Catflappo's picture

This is handbags at five paces.  Booooooring.

Mon, 07/09/2012 - 23:08 | 2601007 The Shootist
The Shootist's picture

I'd say. I'm just here for the cage match. Nigel Farage would have brought him closer to stroke, or Michael Savage. Oh wait, he's probably banned from Europe.

Mon, 07/09/2012 - 23:12 | 2601024 WestVillageIdiot
WestVillageIdiot's picture

Bring back dueling and so much of this shit would not be happening.  There would be a line of thousands challenging Krugman to a duel.  He would surely have to leave the country. 

Mon, 07/09/2012 - 22:24 | 2600895 Duke of Con Dao
Duke of Con Dao's picture

following thematically I mashed this together from the best bits from today's LIBOR inquiry 

by Parliament... there are a few scenes where Paul Tucker looks like he ate the proverbial sh*t sandwich!

YouTube - Squirm Worm, Squirm! Chairman Paul Tucker roasted by Parliament Inquiry over LIBOR Manipulations  (70 seconds)

Mon, 07/09/2012 - 22:31 | 2600900 Coke and Hookers
Coke and Hookers's picture

Circular logic is always fun. Krugman said that the past four years (the biggest crisis since 1929 and follows decades of keynesianism) support keynesianism because interest rates and inflation haven't exploded. This is total bullshit for several reasons:

- The crisis comes as a result of keynesian economics - it's hard to argue that austrian economics have run the show for the last 10-20 years.

-  US inflation rate has hovered between 6-8% in the last 4 years if it's measured the way it was in 1990. The criteria for inflation measurement are adjusted regularly to make it look low. Why do inflation measurements need to be manipulated if inflation is not a problem?

- Interest rates in the US and Europe are rigged. Keynesian government spending takes the form of low interest money that's pumped into the system. That invalidates the argument and Krugman tries to fool people into thinking that markets control interest rates - which they don't. Keynesianism expresses itself in low interest rates and then Krugman says that low interest rates support keynesianism!! Also, interest rates for certain EU states are horrendous. Interest rates on credit card debt and several other types of debt are massive. I would say that in some cases interest rates have exploded despite the effort to artificially keep them down to stimulate consumption a la Keynes.

Krugman and other Keynesian economists believe that there is no (nor should be) relationship between creation of wealth and consumption. Consumption can happen without corresponding creation of wealth - or in other words: wealth creation can drop while consumption stays the same. This is beyond stupid. Let me explain: As the US has moved further into being a service based economy (read: manufacturing has been gutted) the difference between consumption and wealth creation has been bridged by seizing future money which is then dumped into the market at low interest rates. This has not stimulated wealth creation - which is in fact still dropping. This, according to Krugman, is great success. What the spending of future money has stimulated are the service sector that's eating the US from the inside, and Chinese manufacturing. It hasn't stimulated wealth creation in the US at all. What keynesianism has really done is snuffing out the relationship/balance between real creation of wealth and consumption. It finances consumption with future money and stimulates services that create no basic wealth.

Mon, 07/09/2012 - 22:37 | 2600932 khakuda
khakuda's picture

If you didn't look so much like Blankfein, I'd nominate you for Fed chairman! Brilliant and cogent response.

Mon, 07/09/2012 - 22:46 | 2600958 Coke and Hookers
Coke and Hookers's picture

One more point: Krugman or other keynesians would never admit that they are advocating the split between wealth creation and consumption. The way they see it is that spent money equals wealth created. If the government conjures up 20 grand and gives to me, it doesn't matter to them what I spend it on. Spending it all on 100 dollar blowjobs is equivalent to spending it on a car. If I buy 200 dollar blowjobs instead 100 dollar ones, it signifies more efficiency/wealth creation in their book - not more inflation in blowjob pricing.

This explaines why keynesians see no difference in state spending and private consumption and why taxing the shit out of everybody is no problem. All the money will all be spent eventually and at the point of spending will create wealth, regardless of where it goes.

This is an exceedingly simplistic and even banal example but that's what keynesianism is: Simplistic and banal theory for collectivist simpletons.

Mon, 07/09/2012 - 23:19 | 2601037 WestVillageIdiot
WestVillageIdiot's picture

One of Krugman's main rules in his textbooks is, "one person's spending is another person's income".  This was discussed in this debate.  Sadly, the moron Krugman takes this to an extreme that would embarrass a child.  He believes that if you just keep spending and spending everybody will be loaded with income.  Nowhere in there is there any mention of saving.

Pure stupidity in its purest form.  He must be loved on CNN. 

Tue, 07/10/2012 - 02:41 | 2601259 Escapeclaws
Escapeclaws's picture

Steve Keen addresses precisely this point,"one person's spending is another person's income", in a great article at his website,

See the article he wrote called "Private Debt and Aggregate Demand".


Tue, 07/10/2012 - 08:34 | 2601606 paint it red ca...
paint it red call it hell's picture


for anybody that can work blow jobs into a economics theory critique, frigg'n genius

Mon, 07/09/2012 - 22:57 | 2600984 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Keynesian economics does create wealth...

somewhere else.

Mon, 07/09/2012 - 22:43 | 2600946 web bot
web bot's picture

Professor Imyme Krugman.

What a pompous ass. Schwartz's comment about mantle of authority is BOSS and with that, he owned Krugman.

Mon, 07/09/2012 - 22:46 | 2600953 janus
janus's picture

may the muthah-fuckin SWARTZ be with JANUS!!!

goddam, professah!  maybe all of you don't require herding into work-camps.  some of you may be worth a squirt of piss -- maybe more than that.

impressed is janus.

and here's one fer you, krugman (the prince of petulance)

now while you're out gang-bangin/

tryin to catch a murder case/

your ho's on my couch gettin fucked in the face/

bumpin to the base of some ole school rap jams/

this ain't tennis but, yo, i'll use my back-hand/

on any grown-man that tries to check janus/

i wanna head bang i gotta hip-hhop/

cause i'm gonna stick with what got me paid/

lickin that coochie with a high-top fade/

...i told you ho's before/

...i want my kakais washed, starched and creased/

i wanna order of fries with a side of grease/

i wish for peace throughout this land/

i want the whole fuckin world in my hand,

janus (ain't you a lil old to be trickin/ you see my mask and bag, bitch, i ain't bull-shittin)



Mon, 07/09/2012 - 23:00 | 2600961 catch edge ghost
catch edge ghost's picture

He'a all ego. He hears criticism and equates it to being called stupid. Absolute insecurity.

To be fair, being under constant attack like he is, or simply believing so, would leave most any animal feeling persecuted. It would behave defensively. But. Once you have received a Phd, or a Nobel Prize, or just a job at the NYT, you must rise above your simian ancestry and graduate beyond your limbic systems. He didn't, hasn't, and likely won't. That makes him mortal.

From one mortal to another, Pauly, fuck you for thinking you can make choices for me and everyfuckingone else on Earth. It just doesn't work that way dickhead.

Mon, 07/09/2012 - 23:21 | 2601040 WestVillageIdiot
WestVillageIdiot's picture

Liberalism, in its current form, is nothing more than a house of cards.  It is more a religious belief than a political event.  It can stand up to criticism no more than religions can.  This is whty their zealots take criticism so personally.  They have no response because their beliefs have no foundation. 

Tue, 07/10/2012 - 00:21 | 2601137 giddy
giddy's picture

Libs worship at the alter of politics.  But they get it azz-backwards -- theology-wise.  The Bible teaches (am extrapolating here...) that while the "Kingdom of Heaven" is a liberal state of being -- to get there requires living a relatively conservative human existance.  It's based on the decalogue -- which say's you dont lie, cheat, steal, murder or sleep around (plus some other stuff) -- and the golden rule ("do unto others").  None of which liberals think applies to them.  Except the one about taking all the gold... they like that one.        

Tue, 07/10/2012 - 01:09 | 2601191 Seer
Seer's picture

Why do people feel that they can BROAD BRUSH everything?

Fucking ideologues, I hate You/Them all.

Tue, 07/10/2012 - 02:14 | 2601242 catch edge ghost
catch edge ghost's picture

The irony was too much. I had to 'fix it for ya'...

Why do [you] feel that [you] can BROAD BRUSH [liberals]?

Fucking ideologue, I hate [You.]


I can't answer for him obviously, but I think the answer to your question is, frustration. You're familiar with it. Gets the best of everyone now and then.

Mon, 07/09/2012 - 23:01 | 2600990 luna_man
luna_man's picture



Boy, I'd Like to see "Pedro" really let it rip!...He hits hard!



Mon, 07/09/2012 - 23:22 | 2601041 WestVillageIdiot
WestVillageIdiot's picture

"Vote for Pedro"

Mon, 07/09/2012 - 23:03 | 2600998 Timmay
Timmay's picture

Hey Paul, WHO IS GOING TO PAY? Oh, it doesn't matter? WHO IS GOING TO LEND TO US IF WE DON'T INTEND TO REPAY? Oh, we will repay when the economy is BOOMING? Booming? How? Taxes?

We have a complete misallocation of capitial because the world worships at the alter of "Weathermen". You have no fucking idea how to predict the behavior of 6 billion people.

F-ing shill.

Mon, 07/09/2012 - 23:22 | 2601043 WestVillageIdiot
WestVillageIdiot's picture

"What happens when the dollar has been so debased that we no longer have possession of the reserve currency?"

"Hummina, hummina, hummina......................"

Tue, 07/10/2012 - 07:40 | 2601492 Ricky Bobby
Ricky Bobby's picture

Timmay you nailed it.

The people he serves have no intention of letting any of the 6 billion have a choice. They will be told what to think and how to act.

Mon, 07/09/2012 - 23:04 | 2600999 ReactionToClose...
ReactionToClosedMinds's picture

once again, thank ZH for catching this & highlighting it

Mon, 07/09/2012 - 23:16 | 2601031 Joy on Maui
Joy on Maui's picture

I had no idea just how deceitful and willfully ignorant Krugman is.  Then I looked at his bulging waist line and double chin and figured he is just another sheeple headed for dumb and happy obesity.  Increasingly, one can draw fairly solid conclusions on people's grip on life in general by looking at their physique.  Too many empty calories = too much empty economics theory consumed and espoused by braindead sheeple headed for the final wealth transfer within Obamacare.

Mon, 07/09/2012 - 23:22 | 2601033 Yossarian
Yossarian's picture

Go to 1:44:40 to see both the best looking and perhaps brightest young Spanish economist ask Krugman whether inflation is in fact theft, just as it seems...

No, Krugman explains, we created this mess with inflationary policies and we now need to steal more in order to clean up the mess we made...

And at 140:09 a young economist points out Krugman's thesis that we needed stimulus- that time in the form of a housing bubble- to get out of the recession in 2003.  Krugan: come on, I was just joking...and if you don't believe me you are an idiot

Mon, 07/09/2012 - 23:24 | 2601044 WestVillageIdiot
WestVillageIdiot's picture

I pointed out that moment in an earlier post.  Krugman's response was so intellectually bankrupt that I was embarrassed for the piece of crap.  It is an insult that he goes to other nations and is represented as "an American" anything.  He is not an American. 

Tue, 07/10/2012 - 00:42 | 2601162 Seer
Seer's picture

Hey!  Krugman may just be doing us "Americans" a favor by looking stupid (whether he really is or not, it's the perception that matters).  It's either stupidity or maliciousness, and pitch forks usually come out for the later. (I'd be happy to offer him up but I'm afraid that the rest of the world is going to take it out on all "Americans".)

Mon, 07/09/2012 - 23:19 | 2601034 Seer
Seer's picture

I didn't stay for the Q&A, but Krugman sure looked liked a dunce.  Pretty hard to not come off looking better than him.

I do not think that Schwartz made his case.  Although no stammering fool for the State, he was only able to state how fucked up the Keynesians are: and this he did with ease.  HOWEVER, his "solution" was no more than hopium itself.  If I had to chose between the two I'd definitely endorse Schwartz.  HOWEVER... "sustainable growth" came out of Schwartz's mouth (a couple of times).  I would like to have FIVE MINUTES on stage with him to discuss this; I would place a very large wager that he would not be able to identify what he means without me being able to do to him what he did to Krugman.

Schwartz is just a better looking horse in the glue factory.  And, though he comes close to informing us that we're IN the glue factory, he does NOT.

Both roads lead to failure.  Since it is inevitable that there will be fragmentation I shall embrace the Euro "skeptics'" position. (since BIG=FAIL, making States bigger is NOT any kind of path to "success")

Mon, 07/09/2012 - 23:30 | 2601053 tictawk
tictawk's picture

@1:45 in the debate, the question was asked by a lady in the audience.  Is inflation theft?  and krugman punted and essentially said it is not because govt does not guarantee the purchasing power of the currency.  This is dishonest.  IN fact, inflation benefits those who have leveraged assets because the return on their investment is huge while those at the bottom end of the economic scale get screwed because they don't own any assets, their purchasing power is eroded and they have a hard time making ends meet. 

How does Krugman maintain any credibility is beyond me.

Mon, 07/09/2012 - 23:32 | 2601059 Temporalist
Temporalist's picture

Student: "Dr. Krugman is inflation theft?"

Krugman: "Not if you don't know you've been robbed."

Mon, 07/09/2012 - 23:35 | 2601063 newengland
newengland's picture

So his paymasters agree. Amschel Rothschild said that the scam works because those who profit defend it, and those who lose from it do not understand it, so they won't fight it.

Mon, 07/09/2012 - 23:48 | 2601091 Seer
Seer's picture

As has always been the case, those WITH tend to make the rules and those rules ensure they they keep their "WITH."

People need to see/understand the underlying driver here.  It really IS about capital accumulation, as things are "set up" for such: take a look around and tell me that it hasn't been benefiting the wealthy!  The ONLY way this can occur is through a system whose core principle is GROWTH.  None of this would be a problem if not for the FACT that this is a finite planet and sooner or later in order to continue the game of accumulation you're going to have to TAKE from others (not your wealthy friends, though if things get tough they'll no longer be your "friends" and you'll start gorging on them as well).

This is the PROBLEM that I see that NO ONE seems willing to address.  TPTB's entire structure cannot exist with anything other than a perpetual growth environment (even for Schwartz; BTW - how come folks aren't bashing him for being in academia?).

Mon, 07/09/2012 - 23:32 | 2601060 newengland
newengland's picture

Crookman, the ungentlemanly thug; smugly elitist when the liquidity floats all boats, and pond scum when it doesn't. He is incapable of honest discourse.

Mon, 07/09/2012 - 23:43 | 2601070 Centurion9.41
Centurion9.41's picture

Krugman is such a little Gollum.

What always amazes me, though it shouldn't any one, is how the fundamental assumptions are never really challenged.

E.g. Gollum's assertion on inflation; why was he not slammed for the BS calculation and re-definition that it is?

As soon as he uttered the BS about inflation he should have been looked at like the fool he is and be told "are you shitting me, if the definition was consistent, and not manipulated, inflation would be almost 8%! That is the reality of eating when one has to go food shopping, something clearly Nobel laureates who are constantly invited to dinner parties never have real experience with!"

Furthermore, at one point he "takes off the table" the issue of these discussions concerning INSOLVENT states. WTF, they are ALL insolvent. Another moment where he should have been called to the carpet.

Kurgan better stay close to that dinner party crowd. Because if he comes out into the real world, he's going to get his @ss rightly handed back to him all black & blue.

Note bene, though the holocaust was a horrible thing, it was not by accident that so much relative silence surrounded its beginnings. Jews were deeply and broadly involved in the political, financial and economic theory and discussions from pre WWI to pre WWII. It is exactly the kind of BS lying and double speak Gollum here engaged in that led to Europeans simply remaining silent when the Jews were carted off. It was wrong, it was horrible, it should never happen again, etc. etc. But if you've ever sat back and wondered "how could so many have remained so silent"? Well, you are seeing how it formed.

Next time, it may not be the Jews again, but it will be some group, ethnic or economic or political. But in the end it will be the same. When the rising comes, and a group is carried off, the silence will be merely the affirmation of "f'em, they were lying double talking POS"

Its coming. The math is incontrovertible.

Personally, this time I think it's the elderly, the "Greatest Generation" and the Baby Boomers who voted this cluster F into existence that will bear the brunt of it. Medical safety nets will be cut and it may not be a full blown Solyent Green or Logan's Run, but when it gets bad the young who were raised in an immoral world will look at the old and say "F'em, they created this shit"

Tue, 07/10/2012 - 01:34 | 2601209 zebrasquid
zebrasquid's picture

Millions of Boomers voted against those that brought down this great country. I understand the coming generational war, I predicted it years ago. It's obvious. Might be the best gift that my failed generation can give to the future generations is to not demand/expect to live large during the last decade or so of our years. Pull the plugs, if you have to..just don't see it as you exacting a punishment but rather some of us continuing to try to do the right thing..and something that can be given without winning an election. I, for one, will not be asking for/demanding a million dollar heart or liver transplant.

Mon, 07/09/2012 - 23:40 | 2601075 Technical Bard
Technical Bard's picture

After 48:20, the fact that Krugman would claim that Schwartz does not have the "intellectual standing" to comment on the issue is atrocious.  ANYONE who can read and think should be "have standing" to comment on an issue.  And as Prof. Schwartz spoke intelligently to my mind makes him eminently qualified.

Also, Krugman argues three predictions:

  1. Would public sector borrowing compete with private sector borrowing?  The problem is that the free market didn't buy the public debt!  The central bank did by printing money, thus interest rates did not rise.    Also, using the US as the "example" is disingenous - because the US doesn't stand alone in the world market.  The US looks pretty good compared to Europe or Japan, so their interest rates WILL BE LOWER.  And they are.
  2. Large increases in the monetary base would lead to inflation and this did not happen.  The problem is that it did.  The stimulus was small compared to the economy as a whole, and particularly when compared to the derivative markets.  The increase in the government borrowing has caused inflation, or rather stopped deflation in the stock market.  We should have seen significant contraction in the markets as they were 'inflated' by the credit bubble.
  3. Does Austerity create growth or contraction?  The problem is that austerity will cause contraction in the short term - but in the long term it will be beneficial.  See Britain, New Zealand and Canada in the 1980s and 1990s respectively.   Long term government largesse destroys productivity and creates debt overhangs as has occurred in Japan (as noted by Schwartz).



Tue, 07/10/2012 - 00:09 | 2601119 P.T.Bull
P.T.Bull's picture

You put your finger on the entire keynsian/krugman ignorance. The refusal to look into the future--to see things systemically over time. All ponzi investors get richer for a time. Problem is a ponzi is not sustainable because it is redistributing wealth, not creating it.

Tue, 07/10/2012 - 00:17 | 2601133 Temporalist
Temporalist's picture

No as Krugman clearly states if you compare budget deficits and implied liabilities into the future you must compare them to GDP into the infinite future.  For him everything is as infinite as money supply and as simple as infinite growth.  He believes there cannot be contraction.  He believes in growth at all costs even when over eating results in obesity and death.  But the death will be because you starved for a day, i.e. austerity, not because you ate a dozen twinkies an hour for 40 years.

Tue, 07/10/2012 - 00:48 | 2601171 Coke and Hookers
Coke and Hookers's picture

"Large increases in the monetary base would lead to inflation and this did not happen. The problem is that it did. The stimulus was small compared to the economy as a whole, and particularly when compared to the derivative markets. The increase in the government borrowing has caused inflation, or rather stopped deflation in the stock market. We should have seen significant contraction in the markets as they were 'inflated' by the credit bubble."

Very good point. Economics is often about selective arguments and fact picking and Krugman does that all the time. Krugman focuses on consumer price inflation to use as an argument but ignores all other inflated bubbles caused by low interest fiat. There are bubbles everywhere now (except in housing) and banks are specifically seeking out areas where they can create new bubbles with their free money. The bubbles will feed the banks through standard price rigging profits and asset harvesting when they burst - and the banks need to be rescued again with future taxpayer money resulting in more asset harvesting.

Krugman may even realize this and may really want this to happen because it will bring about the glorious collectivist future he dreams about with a middle class free society. He just can't say it so he makes up circular arguments and rolls his eyes to defend his position. I think he wants what's happening to happen.

Mon, 07/09/2012 - 23:55 | 2601101 Arthur
Arthur's picture


What both economists seem to ignore is the vast theft/corruption that occurred leading to the Euro debt crises, how can you say either school is correct.  When the Greek farmer buys a Mercedes rather than the tractor for which the loan was supplied, does with either school account for such typical human behavior.  The same with the liar loans and mortgage fraud.

Loose money usually means lax lending standards, which causes bubbles and other problems.  Had lending standards been high and fraud guarded against, would the economic world be in such a mess?


Tue, 07/10/2012 - 00:06 | 2601114 P.T.Bull
P.T.Bull's picture

I think the austrian view is that if a farmer gets a private loan with a market interest rate and doesn't buy income producting property with it, no problem.

If the loan is subsidized by the government with the stated purpose of helping impoverished farmers, its the large government interventionism that is forcing taxpayers to subsidize the farmers and encouraging farmers to commit fraud. Large government is all about stealing from one group and giving to another. 

Tue, 07/10/2012 - 00:29 | 2601147 Arthur
Arthur's picture

Perhaps, but what happens if fraud is avoided and the farmer actually increases production at a rate that covers the investment?  I think there would a net benefit.  


To me the problem is that most economists design their theories predicated on  "rational" and honest behavior, which collapse in the face of actual human behavior.



Tue, 07/10/2012 - 00:31 | 2601149 Seer
Seer's picture

I believe that it's only a question of TIME and not of IF.  Yes, I know people get tired of hearing this, but, as long as everything is predicated on perpetual growth things WILL collapse.

This is almost like the two political parties in the US, both blame the other for all the ills.  It's time to check the premise, and I believe that it's the System that's fundamentally flawed (and people can spare me the "we haven't really tried <insert whatever "system"> IF you cannot explain what it is supposed to do w/io including any nonsense that uses/is couched as "sustainable growth").

As much as Austrian economics is TRUER than the Keynesian economics, it's still NOT TRUE.  That is, it cannot escape the inevitable collapse from pushing perpetual growth on a finite planet.

Again, I favor Austrian economics, but I do so only because I see it as a pathway to understanding how we can really live sustainably.  Though I might be wrong on this point, I am NOT wrong in stating that we will ultimately be faced with having to do so (learn to live sustainably- physics/Mother Nature etc. etc.).

Tue, 07/10/2012 - 00:57 | 2601179 Seer
Seer's picture

Whoever down-arrowed me: How about trying to explain why?  I've been asking these basic questions for years and NO ONE is willing to try to answer them! (because cognitive dissonance won't allow them to question the premise!)

Tue, 07/10/2012 - 01:18 | 2601199 Seer
Seer's picture

So, it looks like I'm right- people just don't understand the premise.  So, guaranteed FAIL!

Tue, 07/10/2012 - 06:37 | 2601393 AnAnonymous
AnAnonymous's picture

How about trying to explain why?


Because they are Americans. And we, Americans, have overcome the environment. The more we consume, the more we will consume. Consumption engenders promises of more consumption and we, Americans, deliver on our promises.
That is why we are Americans.

Signed: an American.

Mon, 07/09/2012 - 23:57 | 2601104 Spontaneous Violence
Spontaneous Violence's picture

Can I say Krugman is a Cunt ... Off with his head!

Tue, 07/10/2012 - 00:13 | 2601125 Centurion9.41
Centurion9.41's picture

Uh, that would be the other C word, for cutting off heads....

Tue, 07/10/2012 - 00:02 | 2601110 P.T.Bull
P.T.Bull's picture

I have never seen krugman speak before, and I am none the poorer for having missed that. He is a creepy man of unshakable religious faith. To claim that europe is now some sort of showcase of the wisdom of borrowing and increasing the money supply is astonishingly stupid--and we all know a religios zealot like krugman is absolutely immune to that which challenges his faith.

His passive agressive whining about the credentials thing was amusing, as he is used to pulling the credential thing all the time--or letting his proxies do it on his behalf.

Tue, 07/10/2012 - 00:06 | 2601115 Brian
Brian's picture

Krugeman gets offended, and says, basically that his view has been proven because they've implemented his side's theories into practice and 1- Interest rates didn't soar; 2- inflation didn't occur; and 3- in countries in Europe where they didn't implement, there has been economic failure.

The easy answer to him is that his side's solution hasn't actually been implemented to completion yet.  The fact that economies that have been austrian have experienced pain is because Austrian theory says there will be some pain, you work through it, and only then is there a return to growth.  For Keynsians, the proof of their position would happen only after they stop manufacturing money and start to raise rates.  At that point, if the economy actually was self-sustaining, he'd have a case.  Since they have not been able to decrease printing or stimulus, then the fact that the world hasn't fallen apart yet is meaningless.  Since they will never be able to stop printing now, it is clear that they actually broke the economy.

The question is: when will the printing stop, then, if you believe that you've been successful?  If the answer is never, then you can't assert victory.


Tue, 07/10/2012 - 00:12 | 2601116 Centurion9.41
Centurion9.41's picture

Just watched the 1:40:00 section.

Gollum points to Barry Ritholtz as being as "a-political" as one can get ....what utter f'ing garbage.

He further more points to Ritholtz's book "The Big Lie" as proof the the political/FNM/FRE/CRA did not pla a central role in this bankruptcy crisis!

Yea the Fed's low interest rates played a key role in inflating the bubble in housing. But the crisis could NEVER have existed if it were not for the creation by THE FEDERAL GOV of MBSs and promoting the use of them via FNM/FRE. And BR and Gollum know it.

Tons of HONEST bankers warned and fought all of this BS until CRA was used as a threat of jail over their heads.

What happened after that?!

The HONEST bankers walked away and the SCUM BAG CRIMINAL CABAL bankers came in and used CDS's, after buying off NY INSURANCE REGULATORS and FED REGULATORS to turn a blind eye to reserve requirements, to jack leverage into triple digits, and to F with balance sheets via mark-to-model so their POLITICAL buddies could keep winning elections on the "right to a home BS"

And b political I mean BOTH the Dems & Republicans played the system so the asset inflation game could continue.

So the big lie really is guys like Krugman and Ritholtz playing journalistic cover for their political allies.

What lying POS.

Tue, 07/10/2012 - 00:27 | 2601145 janus
janus's picture

i've decided to post my stuff here, in honor of swartz:

so, here's the lil ditty that'll serve to set the tone for this evening's mayhem:

(all true bout janus)

cause growin up i was nevah the logical one/

packed my shit, left home, like the prodigal son/

with a bottle of jack and a shotgun strapped/

i went lookin for fame and, yo, i never went back/

filled with spite, stayin high as a kite/

i was dealin and stealin everything in sight/

...workin like a bitch, like a goddam tank/

...but all that's gold don't always glitter/

so i'll take another puff from my one-hitter/

...i'm here, i'm there, i'm janus, BITCH; and i'm everywhere

(now, talk shit bout kid-rock all ya want...but the kid has IT -- you bitchez that don't know what IT is nevah will...and that would be your problem. )

i've been walkin the earth since the beginnin of time/

and i won't leave till i receive that seventh sign/

...the world's end don't worry me/

and i'm gonna get where i'm goin/

just don't hurry me/

cause i'm in no rush (janus)


okay, one more tone-setter:

got it all till The Revolution comes...


oh, here's one from the dead-dog himself (that'd be janus): (we'll have ourselves A Time)

perhaps one more before i begin:


the following song infuses janus with a power he cannot descibe (he he on if you dare, bitchez!) (on top of the ceiling...the roof -- janus wants to fuck both of those trailer-park whores...and with malice)

all your light won't save me, bitchez -- so quit a'tryin.


here's my secret song (and this'n will be the last, i promise)

are you washed in The Blood?


the following will be entitled Random Thoughts:

right, so last we checked in with janus, he was abstainin from alcohol -- mrs. janus was growing 'concerned'...bunch a fuckin bull-shit.  women, always demanding promises and oaths and obediance -- it's always the same, and it's been so since the beginning of time (re: Eve and that bithch Adam); a week of sobriety and somber propriety...again, a bunch a fuckin bull-shit. and janus doesn't long abide senseless bull-shit (just read on if you doubt that).

last night was awesome:  i worked my inebriation unto a lather...shit-faced, as such.  i had some AWESOME shit planned for you bitchez; but i passed out early in the AM and it's now evaporated, just like the lather.  fret not, friends...i'm back in the saddle -- ridin high and ready...lather foaming (as it were).  this should teach mrs. janus a very valuable lesson; and that goes for the rest of you, too.

janus has learned some lessons himself...most notable among them is the lesson of fiber.  let's say you're like janus; and let's futher say that your diet primarily consists of meat, cheese and bread.  if you are indeed in such ways similar to janus, you'll be wise to pay attention to what follows.

meat, cheese and bread are all fine and good; but as far as fiber goes, they fail mightily -- inasmuch as they haven't any of it (and i'm told that that's a bad thing -- in fact, i'm told over and over and over again (by mrs. janus, mind ya)).  but there's more to this lil life lesson; and it has to do with the body and its tolerance for a violent fiber-shock.

so, here's mrs. janus, bringin home the bacon (and assorted bric-a-brac) in brown paper bags...but amongst the bacon and beans was a tall white cylinder full of some kinda 'super food'.  normally i don't trust anything prefixed with the word 'super'  -- especially not 'super'-foods...seein how food has been fairly-well delinated amongst what's super and what's not-so-super.  for example: meat, bread & cheese -- super.  foods containing fiber -- not so super.   

mrs janus knows i''m averse to healthy stuff, but, still she insists on insinuating this shit into my diet.  i try to explain things to her...i make titanic efforts to relate the Truth: janus looks ten years younger than his actual age...he's fit, strong and all-around-awesome.  don't get me wrong, she knows this bettah than anyone -- she craves and climbs atop me any chance she gets.  but facts are facts -- cigarettes and alcohol are the surest means to vim and vitality...but in spite of these prima-facia-facts, some refuse to see reason.

on with the lesson -- this super-food was not half-bad.  i mean, it had some sort of natural upper that put a lil pep in the ole step.  understand something: janus is not one of these 'less is more' wussies...janus is a firm-believer in the far more credible axiom -- MORE IS MORE.  and so more and more and more it was.  and more was righteous...up to a point.

i arrived at this point somewhere between fenway and nonantum.  it was on the Mass Pike that i realized something; and that something was a painful and sinsiter bloating in my belly.  all of a sudden, my bowels started to preforate (at least that's what it felt like) and i knew i needed to find a men's room before i made one of my front seat.  fiber don't insists.

long story short: i made it just in time.  and the hero rode off into the sunset...towards wellesley, ma -- where hillary was matriculated.  and, thereagain, i needed another men's room -- starbucks, i owe you one.  and then i found myself in waltham, and i found my bowels similarly distended.  muthah fucker!  fiber is FOR REAL. 

so now my pipes are clean (and traumatized)...all is right with the world and God is in His Heavan.  selah.

moral of the story is: never, evah trust a super-food...and if it doesn't contain meat, cheese or bread, you're better off sticking to booze and cigarettes. hazarding the mendacious gauntlet of 'health food' can be a travail;oh, and don't forget to take some toilet paper along with can come in handy when you do battle with fiber.

love hurts,



Tue, 07/10/2012 - 05:01 | 2601350 Escapeclaws
Escapeclaws's picture

A man who hates healthfood can't be all bad. Thanks for the laugh, and you are so right about the unfair sex. It's nice to hear from a man who isn't "biddable" (as women like to say).

Tue, 07/10/2012 - 00:33 | 2601151 Arthur
Arthur's picture

I am not a Krugman fan but after watching the whole video, I thought he did a decent job of defending himself and his theories.  Dynamic and engaging he is not.

Tue, 07/10/2012 - 04:36 | 2601335 Escapeclaws
Escapeclaws's picture

I agree that Krugman definitely won the debate. He was able to inject some humor as well with some good one-liners. Schwartz was completely ineffective and vastly out-smarted. Nevertheless, I do not trust Keynesians bearing fiat.

Tue, 07/10/2012 - 04:51 | 2601346 Lebensphilosoph
Lebensphilosoph's picture

Are you delusionary?

Tue, 07/10/2012 - 05:04 | 2601353 Escapeclaws
Escapeclaws's picture

All I said is he won the debate--that seemed clear. I didn't say I agree with him. You didn't think the joke about the German-Greek football game was funny?

The word is delusional, by the way.

Tue, 07/10/2012 - 07:04 | 2601417 falak pema
falak pema's picture

those escape claws are awesomely sharp.

Tue, 07/10/2012 - 07:34 | 2601475 Escapeclaws
Escapeclaws's picture

Thanks falak. Reminds me I've got to stop eating with my hands.

Tue, 07/10/2012 - 11:33 | 2602258 Escapeclaws
Escapeclaws's picture

You start out asking if I am "delusionary". From that point on it's one half-baked insult after another. In my vast experience, I've noticed that stupidity and aggressivity go together. Why don't you take your roadrage somewhere else? You don't contribute anything positive or worthwhile to the discussion. You want to think you're intelligent, or appear intelligent, but I doubt if you fool anyone. I seriously doubt that you know much physics or mathematics from your comments. I seriously doubt that you are even capable of reading Shakespeare, considering you have no ear for irony, which is what tripped you up in the first place in this thread.

You know you just have to discover what it is you are good at and not be jealous of others who are more gifted than you. Has this been a recurring problem for you?

Tue, 07/10/2012 - 00:41 | 2601160 post turtle saver
post turtle saver's picture

Krugman is the personification of one of my favorite phrases... "He can dish it out, but he can't take it."

Tue, 07/10/2012 - 03:39 | 2601313 AnAnonymous
AnAnonymous's picture

Krugman is the personification of one of my favorite phrases... "He can dish it out, but he can't take it."

Krugman is a US citizen and therefore behaves like a US citizen.

US citizens can dish it out but cant take it when their US citizenism is questioned. They have to run away in a fantasy/propaganda land to avoid facing the reality of US citizenism.

Tue, 07/10/2012 - 09:15 | 2601701 post turtle saver
post turtle saver's picture

If the US wants your opinion we'll give you one then bomb it out of you.

Tue, 07/10/2012 - 00:56 | 2601178 destroyer of mo...
destroyer of moonbats's picture

i phukin hate krugman.

Tue, 07/10/2012 - 01:08 | 2601190 Freddie
Freddie's picture

Paul Krugman - so bad he makes Geithner look good.

Tue, 07/10/2012 - 01:12 | 2601195 FleaMarketPete
FleaMarketPete's picture

Well-fed Krugman seemed to be a ZH deer in headlights and didn’t know whether to cut rates to -5.0%, promote his book, or declare WWIII on hard working northern Europeans.  Back to the ZH theme of dangerous “economists”, listen to all of the Obama/Krugman supporters for endless spending and authoritarianism next time he’s on CSPAN and it will scare the shit out of you.

Professor Schwartz was very respectful and concise; Krugman’s Kool-Aid is not just impalpable but poisonous and extremely dangerous. These “experts” are killing people.

Tue, 07/10/2012 - 01:15 | 2601197 devo
devo's picture

Moral of the story: they gave a Nobel Prize to a guy who doesn't understand velocity or bonds.

Tue, 07/10/2012 - 01:25 | 2601206 Seer
Seer's picture

Policiticans are fucked up.  Economists are fucked up.  And the captains of industry are fucked up (from

A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday.


In a survey of 500 senior executives in the United States and the UK, 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful.


Power corrupts.  Who would have known! </sarc>

Tue, 07/10/2012 - 04:28 | 2601331 Escapeclaws
Escapeclaws's picture

Interesting point you make. The role of corruption in this crisis was not addressed by anyone. It is as if they side-step the central issue. To quote Krugman, "The dog that did not bark..."  Indeed. Economics is "but a clanging cymbal" because it complety ignores the take-over of the state by the Wall St mafia "cymbalized" by Mr. Jaime Dimon with his presidential cufflinks.


Tue, 07/10/2012 - 01:29 | 2601208 Peter K
Peter K's picture

Krugman's responce is classic: Correlation=Coincidence=Causality.

But Keynes must always be right. So said the Lord :)

Tue, 07/10/2012 - 01:45 | 2601219 OldPhart
OldPhart's picture

shit, my spanish is white guy getto, these fluent fast-talkers have me picking out words and phrases.  I could swear however, I heard the third speaker mention capitol hill, krugman and al capone in the same phrase.

Wish this had a translator or subtitle to what he rattled off.

Tue, 07/10/2012 - 02:25 | 2601247 Hobbleknee
Hobbleknee's picture

Fast forward to 35:00.

Tue, 07/10/2012 - 01:48 | 2601223 gorillaonyourback
gorillaonyourback's picture

Goddamit where is the translation

Tue, 07/10/2012 - 15:00 | 2603095 DavidC
DavidC's picture

What, from the English to the English? get to right point in the video and it's in English!


Tue, 07/10/2012 - 02:00 | 2601232 Coldfire
Coldfire's picture

One can only hope that all right- (that is Austrian-) thinking men in Spain would "sacrifice [their] principals". It's high time for some principal-sacrificing in the EU. Calling Madame DeFarge, calling Madame DeFarge...

Tue, 07/10/2012 - 02:43 | 2601261 Hobbleknee
Hobbleknee's picture

The Spanish debaters are so well spoken.  Then comes Krugman with his whining rebuttals, and he can't even take his fat ass to the podium.

Tue, 07/10/2012 - 03:36 | 2601309 AnAnonymous
AnAnonymous's picture

That is their part.

US citizens work in duos.

The US citizen spanish calmly backstabbed Krugman.

And Krugman got infuriated. The free press media circus.

Both sides know that in US citizen economics, going deeper into debt is not done to cut down on debt but to maintain and increase consumption.

In a finite world, this economical approach comes with consequences. Mainly that you commit yourself to never repay the physical debt.

It is big and cant be confessed.

And therefore, none of these US citizens will debate of the efficiency of the current policy in achieving that objective.

Hegelian dialectics.

Tue, 07/10/2012 - 03:04 | 2601281 Hillbillyfreak
Hillbillyfreak's picture

What may be of interest and what you are not aware are the words of the gentleman who introduces the kind prof that speaks after krugman.  Being a worldly sole that has been trained to speak many languages, let me translate for you a bit of  his introduction:  "Thank you Mr. Krugman for your very illuminating words, you pompous American ass.  It is because of your economic policies that the Spanish people are about to take it up the butt.  At the hands of the f'ing Germans no less.  With a woman leader.  You friggen a hole krugman.  You will be lucky to get to the airport you bastard.  Now, the Greeks don't care about taking it up the butt, but that is their problem and I am not here to judge.  But, the Spanish are a proud people and we are not going to take your crap.  Don't take my word for it.  I will now introduce the kind prof who also thinks you are a pompous ass and he will put you in your place."  That's my translation and I think its pretty close.  The part about the Greek people may be off a little; the audio went bad right there; but, that's what I heard.   

Tue, 07/10/2012 - 03:21 | 2601291 El Yunque
El Yunque's picture

What a waste of space.

Not a person on the planet actually doing anything PK advocates.

So why does everyone get their knickers in a twist over that shit?

Tue, 07/10/2012 - 03:22 | 2601292 falak pema
falak pema's picture

"Keynesians got us into this mess and now we have to sacrifice our principals so that they can get us out of this mess". ...

I find this statement difficult to reconcile with reality. It was supply side Reaganonmics and deregulated finance that got us into this mess. Admittedly the laxist Greenspan monetary policy and demand side consumer boom of CLinton/GWB years got the US into mega trade deficits and growing debt, fed on military adventurism and NWO,  as all industry had increasingly been outsourced. But the economic model that was created in the 80s was what accelerated the Friedman model of post BW revoke floating rates USD fiat model and USD crazy print hegemony to recycle petrodollars of the 70s. Demand side died with Reagan-Thatcher and supply side took over in the 80s. It was NOT Keynesian economics from then on. 

Now that we have the supply side fed inordinate financial bubble of R.I.S.K model asset levitation, obviously the SAME banksta clique who created the model have done a U-turn and gone UBER keynesian in their desperate attempt to feed the fiat pump and try get us out of the mess by pressing on the demand side accelerator. All the while exacerbating further the asymmetric first world deficit BRIC world surplus divide, which macroeconomic wise is unsustainable.

In a depression days the whole world becomes Keynesian as nobody wants the pain of attrition to pay for their past sins. 

If what ZH and the Austrian school maintains is the right policy were to be put into practice it would mean the END of the crony politico-oligarchy systen that has been built over thirty years in first world. TPTB will never accept that. That is the bottom line. The rest is theory. This is first and foremost about POWER; like in Kaiser Wilhem/ Pax Britannia/ Romanov pre-first WW days.

Nowhere to run except print to infinity to avoid the inevitable. 

Tue, 07/10/2012 - 03:30 | 2601300 AnAnonymous
AnAnonymous's picture

If what ZH and the Austrian school maintains is the right policy were to be put into practice it would mean the END of the crony politico-oligarchy systen that has been built over thirty years in first world. TPTB will never accept that.


TPTB? That means the US citizen middle class, right?

Because US citizenism has been about cronyism from the start.

It is funny how US citizens love their fabled past story.

For some the disturbance started 30 years ago when the world started to show its finitude by the way, for others, the disturbance started in 1913 etc

Funny. Because US citizenism has not changed. US citizenism has been a story of cronyism from the start, it has been a story of affirmative action from the start

US citizens lament the loss of something that has not lost: US citizenism.

Tue, 07/10/2012 - 11:28 | 2602268 akak
akak's picture

Toad the wet sprocket and bite the wax tadpole.

Tue, 07/10/2012 - 05:57 | 2601377 Tirpitz
Tirpitz's picture

"It was supply side Reaganonmics and deregulated finance that got us into this mess."

In modern times of shortsightedness, luckily way too many sheeple conveniently tend to forget this root of our economic catastrophe.

Tue, 07/10/2012 - 09:22 | 2601718 post turtle saver
post turtle saver's picture

That's funny, I don't recall Glass-Steagall being repealed under Reagan's or Bush Uno's administrations...

<church lady voice>Could it be... CLINTON???</church lady voice>

I think we need to re-enact Glass-Steagall but under a different name... I'd call it "Steven Steagall". You breaka da rules, he breaka you face.

Tue, 07/10/2012 - 11:41 | 2602324 Tirpitz
Tirpitz's picture

Turtle, you're so right - I must have overlooked the fact that it was Clinton buddies Phil Gramm and Jim Leech, two beacons of sound Democrite politics, who were the driving force behind pulling Glass-Steagal for good.

As of Reagan vs. Clinton, I keep wondering which of both had inherited a bloated governement system and streamlined it to leave his successor some handy surplus.

That said, I'd have them hanging side by side, as they all are tools of the Trilateral group.

Tue, 07/10/2012 - 03:26 | 2601294 AnAnonymous
AnAnonymous's picture

This is how US citizenism killed debate.

US citizen Krugman is doomed to fail. Why? Because he cant discuss US citizenism as it is. Showing flanks to cheap shots.

Hence the story of getting deeper into debt to go out of debt.

US citizens do not wish to get deeper into debt to go out of debt.

They want to go deeper into debt to keep consuming as much as possible of a finite world. This is the aim and going deeper into debt works toward this objective.

But US citizens can not state this. That would be self indiction. And self indiction is a big thing in US citizenism.

As US citizens work in duo through hegelian dialect, another US citizen jumps in and provides diversion, by underlining how stupid the idea of getting out of debt by going deeper into debt is.

And the circus is started, with emotional answers.

Both the US citizens have served US citizenism, as the priority is to hide that US citizens are working at depleting the world's resources and that to achieve such an objective, debt is a powerful tool.

You will find the same scheme in many US citizen 'debates'

No matter the level by the way.

On this site, you are provided with countless examples of the same scheme

one US citizen says we have to go deeper into debt.
Another answers that you cant get out of debt by getting deeper into debt.

The fact is that US citizens can not state what they are using debt for: maintaining or increasing consumption.

And this is a US citizen behaviour as shown by both the vid and this site. This is how US citizens congregate and organize to divert the attention from their core objective.

Tue, 07/10/2012 - 04:39 | 2601338 Escapeclaws
Escapeclaws's picture

You really ought to be seeing someone.

Tue, 07/10/2012 - 06:40 | 2601397 AnAnonymous
AnAnonymous's picture

I am seeing US citizens.

The depiction of their behaviour is what it is.

Tue, 07/10/2012 - 11:26 | 2602256 akak
akak's picture

And I am seeming one particular and insanely bigoted, one-note Chinese Citizenism citizen.

The depiction of his monolizing of the speeching means and continual conversational blobbing-up is what it is --- the crustiest bit, the definite something.

Tue, 07/10/2012 - 10:47 | 2602062 geno-econ
geno-econ's picture

No discussion at all about role of multinationals in global trade.  Job loss is a direct result of their outsourcing with no national allegence.  Combined with international banks, there is absolutly no regard or sympathy for workers. And they get all the tax havens to boot   Something wrong that will not be rectified by printing fiat

Tue, 07/10/2012 - 03:34 | 2601297 Jus7tme
Jus7tme's picture


>>Krugman's red-faced anger is evident at the conclusion as he even refused to shake Schwartz's hand after the debate.

Hogwash. Having a red face is not a sign of anger or anything else. It just means the person has a red face.It is slimy to use this against Krugman.

If you have nothing better on Krugman than complaining that he has red skin in his face, that show exactly how weak your arguments against his views are.


Tue, 07/10/2012 - 03:57 | 2601319 GernB
GernB's picture

Ok then, how about his advice in his article Stimulous Math that predicted 5-6% employment given a 600 billion stimulous. We passed one a year after the article that was 787 billion, then built it into the baseline budget every year since. Thats three 700 billion stimulous packages and employment is not comming down. On top of being wrong he lies that he told us the stimulous was too small, when he knows full well they passed one larger than he asked for, and continued it each year as a part of the baseline budget. He's deliberately attempting to decieve.

Tue, 07/10/2012 - 12:08 | 2601330 Jus7tme
Jus7tme's picture

Ok then, ..

What, since the  argument in the article are bullshit, you are going to try another one? Okay...

How about his advice in his article Stimulous Math that predicted 5-6% employment given a 600 billion stimulous

What you say just isn't true (meaning it is a LIE): He said the stimulus had to be AT LEAST 600B. And in fact we did not have even a 600B stimulus, because a large portion of the "stimulus" was not stimulus (spending) but tax cuts for the the rich and for corporations.

Krugman was completely right in the debate, and he won it.

Criticizing Krugman for having red skin, or falsely praising Schwartz for his "style" is typical right-wing bullshit.

Krugman should have gone for the jugular, though. He is much too polite with these crooks.



Tue, 07/10/2012 - 19:15 | 2603977 GernB
GernB's picture

No, you are just wrong. The Amreican Investment and Recovery act, passed only a few months after Krugman's prediction:

was 787 billion. It doesn't matter that it was the Bush stimulous he was talking about. It meets the criteria he claimed was needed and the number was in part chosen because of his and other economists urging that it needed to be that big. It didn't do what he said. Yet he continues to claim the stimulous was too small and that's why it didn't work. Apparently he was successful in getting the guillible to belive we never had a 787 billion timuous for "shovel ready jobs." etc.

All Krugman did in the debate is insist he was right. His insitance is based on cherry picked evidence, such as that in his book.

For example, his insistance in the debate that the stimulous spending was one time and pointing to examples of programs that have been cut back, as if that were all programs, is a typical example of his cherry picking examples to make a point that cannot be substantiated by the broad facts. The US outlays the year of the 2009 stimulous were 900 billion more than two years before. Spending in subsequent years has only been about 100 billion less. So the stimuolous has become a part of the baseline budget. 

So do you think Krugman is just ignorant that spending has stayed up since the stimulous, as he claims in this debate, or is he lying. 

Even more damaging is that his claim that the stimlous was too small and that's why it failed is a lie of stupendous proportions, in light of his prediction of the effect of "at least" 600 billion, and the nearly 2 trillion in spending above 2007 levels that have taken place since he made that predicion.

Regardless, I choose to ignore him because a casual investigation into the actual facts is all it takes to systematicaly dismantal 90% of what he claims.


Wed, 07/11/2012 - 21:46 | 2607278 Jus7tme
Jus7tme's picture

I'm going to correct myself:

What Krugman said that the stimulus needed to be at least 4% of GDP == 600B for the ONE YEAR of 2008. Krugman himnself explains that here:


>>No, you are just wrong. The Amreican Investment and Recovery act, passed only a few months after Krugman's prediction:

ARRA was a multi-year stimulus of 787B, of which 288B was tax break and not real spending. Hence there was 787-288=499B of stimulus spending, and it has been spread out over over 4 years now. So you cannot truthfull claim "oh they spent 600B but unemployment did not reach the predicted lower level"

>>So do you think Krugman is just ignorant that spending has stayed up since the stimulous, as he claims in this debate, or is he lying.

I'm sure Krugman is not lying. I'm on the fence about whether YOU are lying or just being blinded by the lies of right-wing propagandists. I'm pretty sure that you WANT to believe the right-wing propaganda, though.

Tue, 07/10/2012 - 03:39 | 2601302 BotMightFly
BotMightFly's picture

  Lauren Lyster hosted Steven Keen,

You can see his Cambridge Lecture.  Keen's book is called Debunking Economics - presented from a mathmatician's perspective.  Keen clearly demonstrates how Krugman's model omits reality.

Paul Krugman took a nosedive.

Tue, 07/10/2012 - 03:38 | 2601312 pcrs
pcrs's picture

It must be frustrating for people who go through the trouble of intellectually debunking schills like Krugman, to notice after all this effort their opponents do not lack intellectual rigor but moral integrity. He just represents his masters in government that wants him to say:print, print, print

It is not an intellectual problem: They run a monopoly of the initiation of violence

Tue, 07/10/2012 - 03:47 | 2601316 GernB
GernB's picture

Typical Krugman, we havent had three examples of how these theories play out, but dozens: japan, Greece, Spain, The US, all have tried massive stimulous on a scale never seen in history, and we are on the brink of economic ruin. The US has had a stimulous larger than Krugman said was needed, year after year niow because it has become part of the baseline budget, and its making things worse and we are moving towards loosing our reserve currency status.

Even in the examples he gives, hes wrong. Ask spain what interest rates are (because Spanish bond rates cant be rigged by a central bank), look how much gold has risen in value, how about our stock market which inflates witb each new round of QE and the Fed takes credit for the inflation. What kind of crack is Krugman on.

Tue, 07/10/2012 - 04:16 | 2601326 Jus7tme
Jus7tme's picture

Pedro Schwartz (a mild-mannered Spanish 'Austrian' economics professor)

Mild-mannered? Pedro Schwarz was rude as hell.

the Spanish professor praises and criticizes in a thoughtful and gentle tone

His tone was rude, and he completely misrepresented Krugman. Nevertheless you claim his tone was "thoughtful and gentle".

But why are you preoccuopied with his supposed "tone" in the first place? Would it not be the substance of what is said that matters? But there was no substance, and the tone was rude, so you are trying to influence the public opinion by claiming that Schwartz had good tone. The tone was bad and the substance was weak.

Krugman (or was it Brad deLong) coined the catchphrase "Liberals are shrill" to describe the phenomenon that right-wingers will accuse liberals of being "shrill" when the liberals are correct and the right-wing cooks have nothing else to argue than to attack the appearance of the liberals. This debate is the perfect example of the "liberals are shrill" tactic.

Tue, 07/10/2012 - 05:09 | 2601355 Lebensphilosoph
Lebensphilosoph's picture

Your thought processes would be hilarious to a disinterested observer if they weren't such a sickeningly common example of how the human brain works when it has been programmed according to some bizarre ideology. How you see in your tunnel vision is no different to how the Christian sees when he thinks the creationist has won the debate.

Tue, 07/10/2012 - 05:50 | 2601370 Escapeclaws
Escapeclaws's picture

You really do seem to be one sandwich short of a picnic. Why don't you enlighten us with your Lebensphilosophie? Evidently you think being Christian is some bizarre ideology. Let's hear you come up with something with positive content (meant as something substantial as opposed to vacuous, not as something pollyannaish) rather than continually putting others down with your warmed-over orthodoxy. What exactly is your take on this debate?

Tue, 07/10/2012 - 05:46 | 2601368 Tirpitz
Tirpitz's picture

Good observation! Actually Pedro had a few good arguments (like sound money), just Krugman's were better where it counts, and evidence is on his side (see PIGS contraction as effect of extreme austerity for the masses, but not for the banks). While I have little sympathy for the so-called right-wingers, I do understand that it is hard to argue when being out of intellectual ammo.

Tue, 07/10/2012 - 05:56 | 2601376 Escapeclaws
Escapeclaws's picture

I don't think Krugman addressed the whole matter of Japan following his advice at all. That, more than anything, gives the lie to his analysis, if it can be called such. Nor did he address the problem of serial bubble-blowing that has bankrupted the US. He did not adequately respond to the question that inflation is theft, and Schwarz correctly zeroed in on the hypocrisy of his answer to the question posed by the Spanish lady.

Tue, 07/10/2012 - 06:01 | 2601378 Tirpitz
Tirpitz's picture

So his recommendation to go along with 3% - with which I would disagree - wasn't an acceptable answer? I certainly would have argued differently, but I don't have a noble price to defend either.

Japan's "stimulus" mostly went to save some over-leveraged, well connected banks, and not to create work and income for the citizen. Somehow this sounds familiar, eh?

Tue, 07/10/2012 - 06:10 | 2601380 Escapeclaws
Escapeclaws's picture

His answer of 3% completely ignores the fact that inflation has decimated the value of the dollar and has wrecked the lives of those living on fixed incomes, such as retired people. They are now getting hit two ways because the price of necessities is inflating while the interest rates are so low that they are forced to invade their principal to survive. This is why I feel Krugman's answer was hypocritical. He just trotted out the unemployed as a cheap way to make a rather bogus point.

Tue, 07/10/2012 - 06:22 | 2601386 Tirpitz
Tirpitz's picture

The discussion happened in Spain. Spain's foremost problem might be how to get the 25% print in unemployment lowered.

Getting some overweight retirees a bit back into shape might be a price Krugman is willing to pay. Spain is home to many well-fed euro retirees.

Tue, 07/10/2012 - 04:53 | 2601347 jmcadg
jmcadg's picture

Is there a more deluded person IN THE WHOLE WORLD than Krugman?

Just to para phrase 'I can't hear you, I can't hear you, I'm ALWAYS RIGHT, (then in Krugman's brain a voice says, say it again, say it again) I'm ALWAYS RIGHT.

(there you go, everyone clapped, you're right buddy). WTF.

By the way, to be fair, Schwartz did run Krugman down somewhat, but then so he should because Krugman has eaten off the top table for four years, when he patently only deserves to be looking through the window wishing. Don't worry Schwartz, it was a fantastically insulting put down and very well observed. You can sleep with your conscience.

Tue, 07/10/2012 - 05:26 | 2601363 janus
janus's picture


i had an awesome post almost completed -- then a single misfortunate keystroke and it's gone...just gone.  goddam internet..  i'd dedicated songs and sentiments to all the bitchez on bloomberg.  i blame God; and you should,'s all His fault.

we covet what we see...and janus sees quite a bit of these honies.

maybe i can recall some of it:

okay, i know i dedicated some of these songs to all of you -- some of them are tacky; but give a fuck, janus don't: (let's drink a toast to innocence...try to reach beyond the emptiness...drink a toast to Time...just for a moment i was back in school, felt that ole familiar pain) (sorry for that, janus had to include it...DAC was a huge influence on young janus.  please, for your own good, don't listen to this song nor any others on this album...friend, that ain't no jive)


enough for it's time for each and every one of you:

sara eisen, (just especially fer you!) (don't kill me, darlin...okay, do what you need ta do; janus can take it...just do it.)

awww SNAP!!! (the motion of her tiny hands/ and the quiver of the bones below/ are signs of a girl that loves/ tell ya everything ya need to know/ i can't explain it/ i feel it often/ everytime i see her face)  listen to ALL the lyrics. (do you realize?)


stephanie (rhule),

steph, i saw you get the stuffin kicked outta your boobies last week...i was conflicted.  on the one hand, i wanted to kick that meat-head's ass (janus is, no doubt, a bad-ass, but he's a bad-ass who knows his limits...i may have to hire a hit-man.  do you know any italians?  we're gonna need one of those sweaty/hairy mongoloids to find us an organized crime syndicate...that's where i'm told the hit-men hang out -- amongst the sweaty/hairy italians).  on the other hand, i rather enjoyed that shrill lil noise you made.  here's what we'll do, steph: no hit-men and no dealings with italians...instead, we'll keep gettin after it till you make that sound of curious-terror...only, we'll explore it beneath 450 count egyptian cotton sheets....sweet.

scarlett fu,

you freaked me out at first.  why? well, it's because you have one of those 'brave new world' names (you'd have to read the book to get it).  i'm over it now.  now i just wanna fuck you.  don't worry, your parents will love janus.  daddy won't mind at all.

some may say this is those i'll say that it's a brow above -- top-shelf, ole sport.  why can't i say i want a lil china-girl the best way i know how?  david bowie would approve:


goddam it!!!

i'd love to keep goin...caroline in GB; you, too, linzie janis....i'd love to savage all of you; you know, all gentlemanly-like.  but i'm catchin a bad case of indigestion.  can't focus on lust anymore.

one last parting song:

love me do,








Tue, 07/10/2012 - 05:41 | 2601365 Tirpitz
Tirpitz's picture

"... in our humble opinion - wiped the floor with his Keynesian philosophy..."

I respectfully disagree. Having watched the entire two hours, Krugman held up quite well. And his main arguments (see 49:20) still stand after the debate:

- we don't have a supply problem, but rather a lack of demand (shops are fully stocked, while wallets are empty!),

- interest rates are near record lows despite giant expansion of money supply (ZBU near all-time high),

- sharp cuts in public spending in times of contraction won't free any capital for economic growth (as confirmed by Greece, Spain, Italy and more major economies), and

- adjustment through falling wages won't work,

while otherwise excellent Pedro Schwartzo pulled in his horns in the end.

However, in my humble view, Krugman is wrong in his view that the banks need to be rescued. Banks have created too much bad debt, which needs to be destroyed, which has become a drain on the entire society, a cancer in need of being thoroughly removed, to provide the economy with room for breathing. Let them drink what they preach, free market capitalism, and let the chips fall as they may. The governments can always rescue the savers, if the banksters are out of rigged cards to uphold their evil empires any longer.

He explains that the Spanish government cannot borrow money at reasonable rates, but if the Spaniards wouldn't have backstopped the over-leveraged banks, their finances would be in better shapes than over in France or Germany, or Switzerland.

Unfortunately Krugman doesn't address another source of the current economic malaise: the effect of exporting jobs and welcoming economic parasites from countries near and far. Spain is overrun with other Southern Europeans from Morocco and Algeria to Greece and Romania and Poland. If these creatures could be contained, the international corporations might have to forego a bonus payment or two to their executive class, but the local workforce wouldn't have to see their jobs going to undesirable cultural enrichments.

Finally, to bring public finances back into shape, it just cannot be that the weakest members of society - the working class - bears the entire burden of financing the government, while its heaviest beneficiaries can continue to avoid paying their fair share of taxes. Worldwide taxes on international corporations have to be lifted to levels of other persons with comparable incomes. Payments need to be enforced, if necessary with military force. Even if the regime of Cayman Islands loses part of the reason for existing.

Tue, 07/10/2012 - 06:34 | 2601390 Escapeclaws
Escapeclaws's picture

I have to admit that I detest the idea of bailing out the banks, even if it leads to disaster. What kind of message does it send to the bankers or the public that the taxpayer will backstop their out-and-out fraud. At the very least, these banks should have been nationalized and had their salary and incentive structure completely trashed. The other matter is, why protect the senior bondholders? They are responsible for their own investment decisions and knowingly took the risk on these so-called TBTF banks--that's implicit in being a bondholder. Low risk does not mean no risk. By the way, who invented that idea, TBTF? This slippery concept has never been adequately aired. I have a feeling it was invented by some Psyop in the CIA. How does TBTF argue against nationalisation? Instead of nationalization, we get Bank of America putting their depositors savings at risk. How is that better?

I imagine that in any case the senior bondholders would not have been put at risk under a nationalisation scheme.

Tue, 07/10/2012 - 06:39 | 2601396 Tirpitz
Tirpitz's picture

Bondholders should go the way nature chooses for them. If (only) depositors are saved, FDIC-style, which I do promote, bond holders will be paid back according to how prudent they invested. Life ain't fair to all, and we can't make everybody happy.

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