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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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Tue, 07/10/2012 - 08:19 | 2601580 Jim B
Jim B's picture

Deleveraging will take place in slow motion (Krugman style) or more quickly! It will happen regardless...

Tue, 07/10/2012 - 19:52 | 2604094 GernB
GernB's picture

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

I don't find that argument particularly persuasive because if it were true the enormous amount of government spending we've had above prior levels (over 2 trillion above 2007 outlays) would have supplied the demand needed. The problem is viewing it as a demand problem skips over any underlying reasons for the lack of demand and assumes if you just artifically supply the demand it will fix things.

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

One of the primary means of expanding the money supply is through keeping interest rates low. So is the argument that keeping interest rates low is proof that keeping interest rates low won't increase interest rates?

- 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

That is a difficult claim to substantiate when you look at total expendetures of Greece, Spain, and Italy for the years of 2009 to present. I don't see any sharp cuts in total government outlays. If you want to claim that austerity legislation doesn't work then sure, I'm with you, but until the legislation is turned into actual austerity I don't think that claim holds water.

Tue, 07/10/2012 - 06:25 | 2601388 Inthemix96
Inthemix96's picture

Here my two pence worth krugman,

Fuck you you little petulant fucking child, even when you are wrong your fucking right?  And then you go on like a spoiled little girl chucking your toys out the pram eh?  Little cock sucking criminal.  You should be in jail with the rest of your gobshite mates who have ruined the world for the rest of us.

Pray you never meet me you little scum fuck.

Tue, 07/10/2012 - 06:29 | 2601389 jomama
jomama's picture

you know just how fucked up this planet we live on is, when this guy has as much clout as he does.

Tue, 07/10/2012 - 06:36 | 2601392 Overdrawn
Overdrawn's picture

Ándale! Ándale! Arriba! Arriba.

Didn't understand a word of it, so what's the point if you don't have a set of translation headphones?

Tue, 07/10/2012 - 06:41 | 2601399 Tirpitz
Tirpitz's picture

The point could be to create jobs for language teachers, Keynesian style.

Tue, 07/10/2012 - 07:05 | 2601418 XtraBullish
XtraBullish's picture

I wish that Spanish prick has begun with "Paul, you ignorant slut!" and then watch Krug get slapped around like a rented mule; punished like a common farm animal; scolded like a misbehaving schoolboy. 

Tue, 07/10/2012 - 08:36 | 2601614 writingsonthewall
writingsonthewall's picture

Is that the level of 'economic debate' you're used to?

 

No wonder you're fucked.

Tue, 07/10/2012 - 07:29 | 2601459 dcb
dcb's picture

krugman is just another toolofthe establishemnt and elite. I am not ure he thinks he is. of course his solution involves making the rich richer, the poor moor poor. simply have deposit insurance out of the ecb, by the ecb. a banking using it gets it's bonds and equity wipted out. cut elites loose populace wins. notice it's never offered, and that's why.

Tue, 07/10/2012 - 09:25 | 2601727 nathan1234
nathan1234's picture

 

Not just a "tool"

He is a VERY BIG PRICK

Tue, 07/10/2012 - 07:32 | 2601468 tennisdude
tennisdude's picture

Pointing to low interest rates as evidence of being right is like pointing to high tech stock prices in 1999 or real estate prices in 2007. Yes congrats, the bubble still exists.

Tue, 07/10/2012 - 07:32 | 2601470 I_Am_
I_Am_'s picture

The arrogance of the f......ing dick sitting with his legs crossed and the shoes pointing...........

Tue, 07/10/2012 - 07:47 | 2601504 dcb
dcb's picture

otice how guy s like krugman crumble when confronted by the simple truths of this guy and steve keen. when you know something it's easy to explain it to the average person. so economists invented a way to hide what they say. it a very old school trick

Tue, 07/10/2012 - 09:33 | 2601758 sablya
sablya's picture

Yes, it goes back to ancient Greece.  It's called sophistry.

Tue, 07/10/2012 - 08:01 | 2601525 nathan1234
nathan1234's picture

Paul Krugman

The Nobel Prize winner for Con-omics

The Illuminati darling.

Print paper- call it money- and control the world

 

Tue, 07/10/2012 - 08:09 | 2601554 MeelionDollerBogus
MeelionDollerBogus's picture

LOL Pure, unbridled #winning

Tue, 07/10/2012 - 08:13 | 2601564 kicksroute66
kicksroute66's picture

Krugman is my boy

Tue, 07/10/2012 - 08:32 | 2601599 Its_the_economy...
Its_the_economy_stupid's picture

What's the name of the woman who closed her futures brokerage when MFG blew up and blogs? She's a gun toting Catholic. I wanna read her take on this 200 million vaporization.

Tue, 07/10/2012 - 08:34 | 2601604 Its_the_economy...
Its_the_economy_stupid's picture

Ah, Barnhardt, that's it.

Tue, 07/10/2012 - 08:35 | 2601608 writingsonthewall
writingsonthewall's picture

This post (and the comments that follow it) - demonstrates that ZH is a victim of it's own success - and it has it's usual 'cult' following who have no understanding of economics and are simply retards jumping up and down about matters that they don't understand.

Clearly their intention is to scream 'Krugman is wrong' as loud as they can - but never answer the very fundamental question of.

 

"If supply is the problem, why are the shops full of unsold goods?"

 

The crisis is (and will always be) caused by the extraction of surplus value from the system which is taken from the worker - who are also the consumer - until a point when they cannot consume as fast as they can produce - this leads to Marxist overproduction and a glut of supply causing prices to fall (rapidly)

 

There is no supply problem - Austrians are archaiac 'religious' types who stick by their traditions despite the weight of new evidence.

 

Krguman is just a desperate man - too afraid to admit that there is nothing any economist can do other than (unpopularly) calling for a change in the system.

 

Neither of these clowns are worth much as they are arguing about how the deckchairs should be arranged and not discussing the 80 foot hole in the hull.

 

...and look at the huge following of morons they have - all willing to defend the cause they don't understand.

Tue, 07/10/2012 - 08:59 | 2601674 dark pools of soros
dark pools of soros's picture

It is simple really. The hottie nailed it but didn't go further. Inflation is theft and the crooks know that the ones who use the new money first retain the purchase power while the ones that get it last are fucked. So they will forever stay at the top of the river and leave the dam open

Tue, 07/10/2012 - 09:01 | 2601679 Hondo
Hondo's picture

Give me a break....you use so much space and actually say nothing!  Like Krugman you pontificate without actually saying anything of value or with knowledge.  Where is your debate...your facts???  Hell, give me a theory based on something.

Tue, 07/10/2012 - 09:31 | 2601746 sablya
sablya's picture

Are you sure you're the one who doesn't understand?  We're talking about the supply of _money_ not the supply of goods in stores.  The problem of supply and demand is quite different when the thing in question is money and not goods, don't you think?  But somehow you've misconstrued the whole question and so you've confused yourself.

Right now there is high demand for money.  People don't want to spend.  They don't want to buy.  Banks don't want to lend.  Oddly enough there is no shortage money either, in the sense that there is a ridiculous amount of liquidity in the system.  

The more liquidity is pumped into the system to try to decrease the demand for money, the greater the demand for money becomes because the overall debt increases.  We're really in uncharted waters.  There is simply too much debt - but creating more debt to fill the void is the only answer the Central Bankers know.  Their process is inefficient because there is always loss and thus the problem just gets worse and worse.  

There will be bloodshed before this is over.

Tue, 07/10/2012 - 13:11 | 2602663 Dumpster Fire
Dumpster Fire's picture

Right now there is high demand for money.  People don't want to spend.  They don't want to buy.  Banks don't want to lend.  Oddly enough there is no shortage money either, in the sense that there is a ridiculous amount of liquidity in the system.  

 

 

I see a down arrow but no cogent rebuttal.  What a shame.

 

Tue, 07/10/2012 - 08:36 | 2601609 resurger
resurger's picture

FUCK YoU douche!

Paul Shwartz FTW

Tue, 07/10/2012 - 08:39 | 2601622 USisCorrupt
USisCorrupt's picture

You know its a GREAT Day in America when you can still trade little pieces of green paper & electronic digits for REAL Stuff. I am sure glad I am not a slave to where I must work for those little pieces of green paper & electronic digits. I have my collection of slaves as to where they send me their mortgage payments. Everyone needs to own some slaves.

Tue, 07/10/2012 - 08:40 | 2601624 Its_the_economy...
Its_the_economy_stupid's picture

Gotta read arnhardt's rant. It starts like this....

POSTED BY ANN BARNHARDT - JULY 9, AD 2012 11:22 PM MST Uh, so do you believe me now?

When I said, "Get the hell out," do you understand that I meant to GET. THE. HELL. OUT.?

When I wrote in my Going Galt Letter that the problem was SYSTEMIC, do you now understand that I wasn't just typing big, fancy words so that I could hear the soft pitter-pat of my keyboard?

When I said over and over again in interview after interview that the so-called regulatory system overseeing the futures industry was no such thing, but rather an evil, despicable mafia, administered by politicking psychopaths on the take, and staffed by affirmative action hires to provide plausible deniability and scapegoats, WERE YOU NOT LISTENING?

Continue at http://barnhardt.biz/

Tue, 07/10/2012 - 08:41 | 2601626 GMadScientist
GMadScientist's picture

41:53 -> wishful thinking.

Just as deluded as the Keynesians, only obsessed with supply-side instead of demand. Two fools each with one eye open.

Tue, 07/10/2012 - 08:46 | 2601641 azzhatter
azzhatter's picture

Schwartz lecturing asshole Krugman on savings (and by proxy Bernanke) is priceless

Tue, 07/10/2012 - 08:53 | 2601659 GMadScientist
GMadScientist's picture

50:00 -> C'mon P-Krug...dig a little deeper on why we have "low interest rates"...is it your position that would be the case without blatant monetization of the deficit?!

Your sleight of hand is pathetic.

Tue, 07/10/2012 - 08:54 | 2601662 dark pools of soros
dark pools of soros's picture

Lots of long healthy legs in that audience. Can we trade our short chunky cow leg women for some of them?

Tue, 07/10/2012 - 08:57 | 2601667 Hondo
Hondo's picture

Krudman is an AH and intellectually bankrupt........

Tue, 07/10/2012 - 09:08 | 2601693 LouisDega
LouisDega's picture

Who is Krugman? The anals of my mind deleted him a long time ago. No anal jokes please.

Tue, 07/10/2012 - 09:15 | 2601698 Cunnial
Cunnial's picture

P.S is a complete Legend!

Tue, 07/10/2012 - 09:24 | 2601722 Steel_Preacher
Steel_Preacher's picture

Yeah, yeah...it's all fun and games till someone pokes the self-organizing criticality.

Tue, 07/10/2012 - 09:28 | 2601736 icanhasbailout
icanhasbailout's picture

Ron Paul did a much more thorough smackdown of Krugwoman

http://reason.com/blog/2012/05/03/ron-paul-vs-paul-krugman-the-bloody-afte

Tue, 07/10/2012 - 09:36 | 2601766 DavidC
DavidC's picture

I actually feel quite sorry for Krugman.

DavidC

Tue, 07/10/2012 - 09:40 | 2601784 GMadScientist
GMadScientist's picture

1:06:54 -> good intentions about deficits don't change the fact that the end of keynesian stimulus necessitates recession.

Tue, 07/10/2012 - 09:43 | 2601795 Doug_Canada
Doug_Canada's picture

Watch who you pick as heros, Pedro Schwartz was just clearly rude. Go on You Tube and find Krugman in a lot of debates with a bunch of people and you will clearly see he has no problem with disagreement. The guy just came out and called a Nobel winner unqualifed. Also he pined on him the Euro which Krugman never thought was a good idea. Other spealkers raosed issues witht he book and that is great but Schwartz is a hack. I thought  Krugman's  rebutal which was a return to the facts that Demand side is the key to fixing this and how Supply side attempts have clearly failed was perfectly and politely put.

Tue, 07/10/2012 - 09:56 | 2601849 Cunnial
Cunnial's picture

The truth is, schools of thought cannot admit when the are worong. They are all ideologies, riddled with over complicated hypothesis that albeit set out to do good, inevitably fail as they discount human behaviour. Modelling human behaviour on an A4 scrap is one thing, but whats more important is not proving you are right, it's admitting you are wrong. Keynesianism has run it's course. Markets are infinitely different from the 40's and so are the poilicies needed to run them. A pragmatic approach to all schools of thought should be considered. But the human ego and arrogance (evidenced by Paul "the Crutch" Krugman) will always trump logic.

Tue, 07/10/2012 - 10:30 | 2601983 Jim B
Jim B's picture

Krugman is wrong and arrogant, his interns probably wrote his Nobel prize winning paper on trade.

 

It really isn't that complicated, the world has went on a debt binge, and now it is time to pay the price.  More debt may post pone the day of reckoning, but that day will come! 

 

Tue, 07/10/2012 - 11:29 | 2602271 Doug_Canada
Doug_Canada's picture

That is a very wrong headed idea of why the world economy is in trouble. Time to pay the price? The middle class have had negative growth for 30 years. They have paid. The only wealth they had was in property and most of that has been transfered into the hands of a very few. Bubble after bubble getting all the last bits of meat off the bone.

 

Want to know what the price should be? 90% Estate Tax. Captial Gains taxed in the year they are earned and at the same rates as income.

Tue, 07/10/2012 - 11:46 | 2602343 centipede
centipede's picture

The world economy is in trouble because of debt bubbles. How can you fight a debt bubble and deficits?  With more government spending and another debt? Or more taxing (capital gains) and suffocate the growth?

The middle class is in toruble exactly because of ideas like yours and people like Krugman.

Tue, 07/10/2012 - 15:28 | 2603232 Doug_Canada
Doug_Canada's picture

 

It is not the guy with 100 Shares of Nortel that caused the tech bubble. It is not the home owner that caused the housing bubble. And I have no idea who you were going to falsely blame for the commodities bubble but it wasn’t that guy’s fault either.

BUT if you read Krugman you will see that he not even about who is at fault. He is about the problem of how to restart the economy. And he is not wrong about how to deal with a Liquidity Trap.

Bitch all you want but we need to get the economy producing all it is able to with as little pain as possible. Stimulating demand is the only way. So can we hold off on your misplaced witch hunt till after we fix it. Then we can argue about how you are after the wrong guys and letting the real ass holes walk free.

 

Wed, 07/11/2012 - 06:36 | 2605221 centipede
centipede's picture

It's you and Krugman who want to "fix it" again at the expense of innocent people. So we should accept your freedom oppressing nonsense without any decent proof of their "guilt"? Free market should be free until proven guilty.

Your "stimulation" is nothing but another cheating and stealing first of all from the middle class.

Tue, 07/10/2012 - 09:50 | 2601827 GMadScientist
GMadScientist's picture

1:13:37 -> Sure, Krugman, the fact that government is deeply involved with care for seniors has nothing to do with cost increases in private sector healthcare.

Where are Hear No Evil and Speak No Evil? You guys usually hang out together.

Tue, 07/10/2012 - 10:38 | 2602018 nowhereman
nowhereman's picture

Baffle them with bullshit.  While eCONomists prattle on about which response to the crisis is more effective, the criminal bankers escape under the radar.

Nothing, I repeat - nothing - will change until the rule of law is re-established.  Then and only then, could we start debating "theories".

This is nothing more than a diversion from the task at hand.

Tue, 07/10/2012 - 10:50 | 2602072 thurstjo63
thurstjo63's picture

What's amusing is how Krugman uses the media definition of "austerity" (i.e. when you use taxes and borrowing that previously were for public sector services to bailout banks thus leaving the state even deeper in debt vs. a cut in spending and taxes that leave taxpayers with more money to spend) and "inflation" (i.e. general rise in prices when the organisation that calculates inflations has introduced statistical methods to minimise the weight of items that impact the most of cititzens pockets like food or fuel vs. an increase in the money supply) as though they are equivalent to defend his premise that the only way to get the economy growing again!

 

Tue, 07/10/2012 - 11:05 | 2602145 GMadScientist
GMadScientist's picture

Bravo, Senor Schwarz!

A most elegant defense of conservative Austrian principles. You may not convert an incorrigible Trot like me, but I very much admire your ability to express your position and you have certainly given me many things to think about with respect to my own principles.

I would sacrifice large amounts of my purchasing power to listen to a 3-way debate between P-Krug, Senor Schwarz, and Steve Keen.

Tue, 07/10/2012 - 11:16 | 2602197 QuietCorday
QuietCorday's picture

I have watched the whole thing and it is pretty interesting. 

Krugman identifies the correct problem, understands the core issue is competitiveness, understands the catalyst was cheap debt, and underscores the need for wages to fall to allow Spain to recover competitiveness. He also says it is next to impossible to get labour costs to fall through austerity measures.

I would agree with this.

His solution is for Europe to bail out Europeans banks. ECB support european bonds, and to inflate to get German wages up. 

To be honest, I would say these are valid points -- from a theoretical angle.

But we do not live in a theoretical world.

What Krugman does not discuss is how on earth, from a policy perspective, you can arrest peripheral costs while inflating the currency to raise German wages.

THIS IS THE KICKER. He says himself Spain suffered inflation through the boom, caused by -- yes -- underpriced debt for its level of economic competitiveness. Who is to say that this problem will not reappear if Europe follows his prescription? The short answer to that is that it will. If Europe supports European bonds and bails out banks, this will underprice peripheral debt AGAIN (but not to the extent of the boom years, I admit), but the real problem is the nature of Europe itself.

Say you manage to spot-inflate (which is somewhat tricky from a policy perspective) in Northern Europe, and increase German wages, where exactly will that money go? It is is going to seep South. There are no capital controls in Europe, no migration controls. No country has across-the-board price or wage controls (though Cyprus now has some prices controls).

You will end up with the North buying up the South, not "investing" in the South but buying it up for "consumption". This will cause price rises in the South as Northern money chases peripheral assets and demand for certain goods increases, pushing prices above locals' affordability.

You would have the boom problem all again, and it would leave the peripherals literally priced out of their own countries -- the young would leave, taking their economic potential with them; and you would end up with social unreast and strikes. The peripherals would start to lose economic and political sovereignty in their own country by default (there coms a point when a village gets to be majority EU migrants and they start to elect fellow countrymen to political positions). The South would become a Med Disneyland and retirment village for the North, with ordinary Southerners condemned to low-paid service jobs, while the Southern rich made a killing.

The only way you could pull Krugman's prescription off would be to declare a moratorium on the founding principles of the Eurozone itself. You keep the euro, have the ECB support European bonds, inflate the currency, but you would need to install border controls again, probably have price and wage and capital controls for Southern Med countries, including serious taxes on flights, and basically attempty to run a system of monetary "federalism" between a set of isolated and protectionist states. God help you trying to pull that off.

I think what Krugman fails to understand is that Europe is not the US. It is vastly smaller; for example, I can be in Spain in less than two hours from my house in Northern England if I fly. I can drive to Poland from Britain in about 18 hours. We are not talking about the kinds of distances incurred in the US. To be honest, the only reason that stops many Europeans from moving en masse to other countries to live, work or retire is the language barrier. Unlike the uncompetitive states in the US, the peripherals are very attractive places for Northern Europeans: they are warm, pretty, laid-back, have cafe culture and warm beaches. Given half the chance, the north would buy up the south down to the last goat shed.

He mentions the cheap debt fuelled a construction boom in Spain, but he fails to understand that construction boom was fuelled by excess foreign money, inflated through cheap debt monetary expansion in those countries, a lot of it British, pouring into Spanish villas and apartments. People don't build unless they think they have buyers. Krugman's solution would create exactly the same problem again -- but this time it would be German money. 

To add, it is interesting that he never mentions the need to close off parasitical leaks in the economic system in  order to increase competitiveness.

Tue, 07/10/2012 - 15:45 | 2603291 Doug_Canada
Doug_Canada's picture

I don't see that Eurpoe is not the US? Does the wealth and power of the economies of California and New York not make it impossible for Missisippi to make an export market? Or has it been going on so long in the US that we don't notice? Just a side note. Otherwise think your views are very interesting.

Tue, 07/10/2012 - 11:41 | 2602323 juujuuuujj
juujuuuujj's picture

Krugman's view that "the stimulus programs expired too soon" is ridiculous. Aid to banks at the expense of people's purchasing power has never stopped since 2008. Who said only car companies count as part of the "stimulus"?

Tue, 07/10/2012 - 13:12 | 2602673 TraitorsHang
TraitorsHang's picture

Watched it twice. Worth it both times.

Tue, 07/10/2012 - 19:31 | 2603992 Frederick N. Chase
Frederick N. Chase's picture

Actually, I suspect that Krugman "won" that interaction, in the minds of more than half the attendees.

 

I visited another of my favorite sites today, Michael Hudson's, which I like almost as much as ZeroHedge.

That site changes much rapidly and the articles are longer.

I happened to find what I'd say is a better and more comprehensive, if less dramatic, put-down of Krugman.

 

May 14, 2012  Paul Krugman’s Economic Blinders  http://michael-hudson.com/2012/05/paul-krugmans-economic-blinders/

 

 

   -Fred

Tue, 07/10/2012 - 23:40 | 2604767 Acton27
Acton27's picture

Very sad that Krugman has to use this opportunity -- on foreign soil-- to show how little he understands about the US Constitution, the sovereignty of the U.S. states, and he history of the U.S.  We are much less integrated that the EU, and under no set of circumstances will the federal government be responsible for the debts of California.  But Krugman seems to think that the EU problems will go away if the EU were more like the US, and by that he means a central government.  How can a guy who is so clueless as to legal rights and remedies have a Nobel prize? 

 

Thu, 07/12/2012 - 12:53 | 2610282 salsabob
salsabob's picture

I find it funny that what an econ blog finds as a "take down" is Schwartz's ad hominem attack on Krugman's credentials.  I guess that's what's left when one realizes there is no there there with Pedro's 10-minute diatribe.

 

Schwartz basic point is that govt holding rates low resulted in the financial bubble that eventually popped; his focus is pre-2008. On the other hand, Krugman’s response is about what has since happened after the bubbled popped; his focus post-2008. They essentially talked past one another with the only nexus between the two being Schwartz’s compounded conjecture of low interest rates being the cause of pre-2008 bubble cannot now be appropriate solution for the post-2008 popping and resulting economic contractions.

 

By bringing up the facts of what has happened since 2008 (i.e. “the experiment”), Krugman does destroy other Austerian notions of: federal deficit spending leading to “crowding out” private sector borrowing and higher interest rates; increased monetary base leading to price inflation; and public sector spending cut (i.e., austerity) leading to economic growth. However, he does not address Schwartz’s conjecture that it was low interest rates that caused the pre-2008 bubble and eventual financial meltdown. On the other hand, Schwartz never provided an argument for his govt-manipulated-low-rates-caused pre-2008-bubble conjecture.  And no, I’m not interested in being directed to go read Austrian; I’m just pointing out that, unlike Krugman, Schwartz did not put any meat on the bone of his basic conjecture - there is no there there (and thus, this econ blog is left to tout Pedro’s ad hominem as a "take down")

 

It would have actually been much more interesting if Krugman had addressed and Schwartz defend the latter’s primary conjecture of evil low interest rates. But, Krugman did not. It may be that Krugman wanted to keep the conversation within the realm of the forum’s intended topic of where do we go from here rather than looking back pre-2008. Who knows? But what we do know is Krugman destroyed the Austerian viewpoint with pointing out the facts of “the experiment” noted above.

 

Further, Krugman got Schwartz to state what he has gotten so many of these austerian sociopaths to come clean on – Pedro isn’t really about returning to economic growth or even about reducing public deficits; what Pedro, if honest, wants is to change the structure of state welfare systems and Krugman calls him out on his “hijacking” (see starting at 1:16).

 

Of course,  both Krugman and Schwartz live in the mythical world of fractional reserve bank lending, where banks’ lending is constrained by their reserves and interest rates signal savings just waiting for investment (or mal-investment) – it’s a world of magic ponies that often makes Krugman wrong and Austrians an anachronism.  But, I do understand that at least your magic ponies can poop gold nuggets.

 

Mon, 07/23/2012 - 10:15 | 2642367 Fiat Money
Fiat Money's picture

lol.  Thanks for that (linked from "Krugman and the NEW AUSTERITY - GET USED TO IT" 7-23-2012)   http://www.zerohedge.com/contributed/2012-07-23/paul-krugman-and-new-aus...

  The problem is that Krugman IS NO LONGER A KEYNSIAN, he is NO LONGER a "liberal" - he is now a govt/elitist HIRELING, he is a PAID APOLOGIST for the Fed and the failed, corrupt, bankrupt, bailouts-soaking private bankers who are his real (NY based) constituents.  

   This is the core of the Obama co. Manchurian candidate  BAIT & SWITCH - tell us that giving billions (upon trillions) http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aY0tX8UysIaM

of dollars of taxpayer extorted "bailouts" dollars (or license for the Bernanke Fed to spin up the printing presses)  to failed, corrupt, con-gress bribing banksters is "STIMULUS," when it really is nothing more than pure graft, corruption, extortion, and theft.  

  EVERYTHING the  Citi-, GS & jpm  financiers running the obama presidency do, is DESIGNED to FUNNEL MORE  taxpayer extorted monies, to them and their pals on Wall st.    http://www.politicsdaily.com/2010/12/10/peter-orszag-former-obama-budget...

http://www.washingtontimes.com/news/2010/jul/28/omb-nominee-got-900000-a... 

  Paul krugman is now AN APOLOGIST for radical right-wing "EXTORT THE PEONS" financiers - that makes him a radical right-wing loan-shark propagandist

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