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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Conman's picture

Krugman's response is typical. He is truly the most vile and condescending piece of crap excuse of a human I've ever seen orate. Add psychotic to that list as well.

khakuda's picture

His rebuttal didn't even make sense. Rates have risen in Greece, Spain and Italy. We don't know what they would have done in the US without continual debt monetization, we just know they would be higher.

Cabreado's picture


but it is important to remember there are bigger fish to fry.

Krugman is a Tool. 



zero19451945's picture

Paul Krugman: Wrong About EverythingTM

HD's picture

That's Nobel prize winning, Lollipop Guild member Doctor Paul Krugman - Wrong about Everything.

Acet's picture

Just want to remind everybody that the Nobel prize in Economics is not a real Noble Prize since it wasn't setup by Alfred Nobel - it was actually setup much later by the Swedish Central bank "in honor of Alfred Nobel" (who was probably turning on his grave because of that).

So the "Nobel" prize of Economics is pretty much just a circle-jerk kind of thing: a bunch of people from a pseudo-science setting up a prize for their own area and calling it a Nobel prize.

It's just as worthy a prize as a Nobel Prize on Astrology would be.

Demonoid's picture

It's a prize from a bank. FROM A FUCKING BANK. Goes right along with the paycheck from Enron.

Demonoid's picture

Also, was that a piece of scrambled egg stuck in his greasy bank-supported, Enron-consulting beard?

TrainWreck1's picture

LOL, he's not used to being criticized! Krugman's body language vs. all the other panelists speaks volumes.

Thought he was going to stroke out, smug little groundhog.


buzzsaw99's picture

Yogurt has taught you well, and I see that your Schwartz is as big as mine.

midgetrannyporn's picture

May the Schwartz be with you.

HD's picture

Krugman is a zealot. As is the Fed and most bank CEOs. They have no interest in any opinion unlike their own and will not accept any other reality.

Winston Smith 2009's picture

While I don't agree with Prof. Steven Keen's suggested fix for our economic problem, he absolutely blows away the garbage economic models of Krugman, Bernanke, et al, here:

Capital Account Interview


Hedgetard55's picture

Krugman is the biggest turd by far in the punchbowl of economics.

Temporalist's picture

Krugman just won the Nobel for Graceless Impudent Spoiled Brat. 

One can tell that he was raised being praised all his life and never told to "SIT THE FUCK DOWN AND SHUT THE FUCK UP!" especially when it was needed most.  A perfect example of a child that needed corporal punishment more.

This video presentation is a case study in narcissistic sociopaths who can't handle criticism.

WestVillageIdiot's picture

I'm going to disagree about the always being praised.  Something tells me that this worm was picked last for every team he ever played on.  It was said of Stalin, "he always wanted to be tall".  So many of these academic worms wished they had been strong and fast and good at baseball.  Driven to bitterness they look to destroy to get revenge for their time spent in rightfield. 

Temporalist's picture

I doubt his parents let him near any of those "violent sports" that the dumb jocks play and had doctors notes for gym class.  It may well be that he's bitter but it's more likely a sexual inadequacy issue.  Probably always wanted to be just like his mom.

khakuda's picture

So fun I can't stand it. How the F do you find this stuff?

WestVillageIdiot's picture

Go to 1:45:00 and listen to this asshole talk about inflation.  The word "fun" will not come to your mind.  This guy is an evil, evil being.  The road to hell is paved by The Paul Krugman Local 453.

Missiondweller's picture

What's truly frightening is that people like him often run the economies of countries.

This guy is  Nobel Prize winner yet he says utter moronic things like pointing to low US interest rates as proof that printing doesn't cause high interets rates. Is he even aware of Opperation Twist manipulating rates?

Ted K's picture


In fact the "twist" does not increase the money supply, that's the whole point.  This is why some people get degrees and honors and others feel the world is "truly frightening".  Often ignorance is not bliss, it's fear of something you don't understand.

And you clearly don't understand.

Rusty_Shackleford's picture

Where exactly does the Fed get all the MONEY that it uses to purchase assets?

Couldn't the Fed simply purchase every asset on the globe at 10 times the price and put an end to all suffering forever? ( or 100 X or 107 X price?)



Ellsworth M. Toohey has nothing on Krugman.

q99x2's picture

I have a feeling the banksters are blocked in by heavy bets against them on all sides and they do not have the money or means to pay. In other words the ice will start to crack like the safety glass of a windsheild, very soon, unless markets are held within smaller and smaller ranges.

reader2010's picture

He's worse than the used asswipe. God help us.

WestVillageIdiot's picture

Was I the only one that threw up a little in his mouth when he was so energetically complimenting Alexander Hamilton?  This guy is a Hamiltonian / Lincolnite through and through.  He believes in large central government and central planning and freely admits it.  This guy is as un-American as anything you will ever see.

S474NtheD3v1L's picture

this is gold jerry, gold's picture

Why do they call it Ovaltine? The mug is round. The jar is round. They should call it Roundtine.

WestVillageIdiot's picture

Why do they call this "economics", Jerry?  The theories are bullshit.  The people are deluded assholes.  They should call it "Go Fuck Yourself".

Ted K's picture

I was baffled about part of your ZH id name.  Are you sure you're from WestVillage???

loveyajimbo's picture

Krugman always was a mega-pompous faggot.  He just broke up with Geithner and went with Blankfein... is there no trust in Governmant anymore?

Cycle's picture

Paul Krugman's performance solidly earns him his own display case in the Museum of the Self-Revealing Bozo.

Melin's picture

That was fun.

Why did two of the men defer to Krugman's judgement as to how the debate should move forward after Schwartz spoke? 

azzhatter's picture

They probably paid this dicksmoker so much they felt they had to listen to him. 

PulpCutter's picture

So, then, where's the big inflationary bonfire the Austrians have been predicting is "within 6-18 months" for the last several years? 

ROFL.  Krugman and the saltwater school's predictive record WIPES THE FLOOR with the Austrians.  Earth to the Austrians:  the model you are using doesn't match reality

If everyone saves, there isn't enough liquidity in the economy.  So, we get results like a whole generation of recent college grads; energetic, trained, but they can't learn to put their training to work, can't earn, can't spend, if they start a business no one is ready to buy their products.  When your theory 1) misses large segments of reality such as the above and 2) has no predictive power, it's time to reconsider things.  As Henry Ford said nearly 100 years ago: plenty of skilled people who want to work, plenty of people who need to buy things - but the bankers standing in the middle. 

Where's the inflation?


Acorn10012's picture

No effing shit. The "where's the inflation?" team isn't looking very hard to the point of cluelessness.

Sophist Economicus's picture

You're trolling, right?


Look at the Commodity index -- point the deflation to me...

Look at Gold, show me growth in paper

Look at the bond market, show me demand net of the Global Central Banks

Look at the budget deficits and monitization of debt by central banks and governments - show me any REAL growth (not nominal -- that would be inflation and disprove your point)

The Austrian model is bang-on.    What you are witnessing is a final gasp by governments to prop things up with a failed theory before the collapse - and a pitiful job it has been

PulpCutter's picture

Show me demand net of the CBs?  Are you high?  IBM just sold 7yr bonds at a RECORD low rate, and 3yr at 0.75%.

I'm sorry - WHERE's the inflation that your Austrian model predicts?  Austrians have been claiming we're "at the final gasp" for decades (see "Kurt Richebacher" and "Paul Volcker").  Austrian theory is bang-on alright: bang-on 180 degrees wrong in predictive power.

PulpCutter's picture

IBM can sell 3yr debt at 0.75%, and I"M trolling??  Try presenting a FACT to support your case. 

Austrian "economics" is about as logical as bleeding sick people "to rid the body of bad humors".

WHERE's the inflationary meltup that the Austrians have been saying is "any minute now" for decades?


akak's picture

Trying to idiotically claim that IBM's debt being sold at unrealistically low rates in an enormously central banker-manipulated interest rate environment is somehow proof of "deflation" is, well, so disingenuous and/or clueless that only a diehard deflationary flat-earther (or Keynesian true believer) could make it.

reddweb's picture

its the result of QE/printing ad-nauseum. What do you do when you get ZIRP ? Its Ben's plan to force "savers" to spend. (else they lose by negative or ZIRP rates). It doesn't mean printing money is "working" LOL.  It just means "savers" are being forced/$aped into spending their money (trying to find yeild). 


Keynesianism is indirect way to socialism. which explains why krugman LOVES it. Distribute the wealth from savers to non-savers.

Seer's picture

Ever see where hyperinflation has NOT resulted in the collapse of a currency?

It's loss of faith.  And as they used to say in Soviet Russia: "they pretended to pay us so we pretended to work."  Moral of the story: if the currency is worthless than so too will be the labor.  Lost "faith" in a currency, which hyperinflation will bring about, starts with inflation.  It should be pretty clear that all money pumped out for worthless assets is pretty much the same as the pretending to work because you're being paid in pretend money.

rex-lacrymarum's picture

The Austrian position on 'inflation' is far more complex than your (or Krugman's) one-liners imply. Have you read Mises? I rather doubt it. To begin with, the Austrian definition of inflation is 'an increase in the money supply', not 'rising prices'. The US true money supply TMS-2 has risen at 10% annualized or more for 44 months running. Since January of 2008, the US money supply has increased by nearly 80%. There hasn't been a bigger monetary inflation in such a short time period in the entire post WW2 era. 

The effect of inflation on prices depends not only on the increase in the supply of money. It also depends on the demand for money (cash balances) and goods-induced effects (increases in economic productivity tend to lower prices). Moreover, money is not neutral, this is to say not all prices will react in the same manner to monetary inflation, as it depends on where in the economy the money first enters. Some prices may be rising strongly, others may even be falling. What is certain is that all prices will be higher than they would have been absent the monetary inflation. There can be considerable time lags before a vast increase in the money supply has a more noticeable effect on most, or even all prices. For instance, the strong rise in prices in the 1970's was preceded by strong monetary inflation for several decades. However, monetary inflation will most definitely distort relative prices in the economy, and thus lead to malinvestment and the boom-bust cycle. Furthermore it has redistributive effects, as exchanges of 'nothing' (new money from thin air) for 'something' (real goods and services) are set into motion - and this will redistribute real wealth from later to earlier receivers of the new money. One thing monetary inflation can never achieve is to increase the aggregate wealth of society - it will definitely decrease it, as scarce resources will end up wasted. 

Indrid Cold's picture

Beautifully said.  Thank you.


It's important to keep in mind that in common use, 'inflation' means rising prices, when in fact, properly used, it refers to inflating the money supply -- which in fact has been going on for a long time. 


So the Keynesians/Krugmanoids get away with claiming that there is no significant 'inflation' -- nice, eh?

amadeusb4's picture

CRX is the same price it was in 2007. Gold is acting like it's 2008. What am I missing here?

t0mmyBerg's picture

You apparently suffer the same blinders-on vision problem and short-termism that Herr Krypton also suffers.  When the yardstick you use to measure includes the G as in GDP = C+G+I+NE then yeah in the short term it will seem like the sky is falling and yeah there will be a period that seems painful.  But a year or two of really pusillanimous "austerity" - ie, reduced G - which on your flawed yardstick seems terrible, is not enough time to gauge the effects.  It will take a while of real cuts and reducing the footprint of G to put things right.  When they start to go right well then V will kick up a notch and then the liquidity holding pref will quickly make it necessary to ratchet up FF or you will in fact see HI down the road and in spades.  Of course it hasnt happened yet, it wasnt expected to by anyone with a clue.  Lots of ideas conflated here but suffice it to say that throwing good money after bad may make the flawed yardstick look good in the immediate term but will greatly reduce aggregate wealth of society (something not measured by the tragically flawed yardstick) in the intermediate and long term, something Krugman and his ilk just cannot seem to grasp.  He wouldnt make a good physicist or geologist as his concept of time is apparently flat and limited to the very near future.

azzhatter's picture

Hmmm- Ignorant or troll? 

jazze's picture

"If everyone saves, there isn't enough liquidity in the economy."


Thats so obviously wrong. Savings ARE liquidity. WithOUT savings there is no liquidity.