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Monday, January 07, 2013

Krugman the revisionist

Paul Krugman seems to think that if he keeps rewriting economic history, he'll somehow retroactively change what actually took place:
It’s that time again: the annual meeting of the American Economic Association and affiliates, a sort of medieval fair that serves as a marketplace for bodies (newly minted Ph.D.’s in search of jobs), books and ideas. And this year, as in past meetings, there is one theme dominating discussion: the ongoing economic crisis.

This isn’t how things were supposed to be. If you had polled the economists attending this meeting three years ago, most of them would surely have predicted that by now we’d be talking about how the great slump ended, not why it still continues.

So what went wrong? The answer, mainly, is the triumph of bad ideas.

It’s tempting to argue that the economic failures of recent years prove that economists don’t have the answers. But the truth is actually worse: in reality, standard economics offered good answers, but political leaders — and all too many economists — chose to forget or ignore what they should have known.
Three years ago.  That would have been 2010... which was several months after I published The Return of the Great Depression, which explained that the issue was credit inflation, not insufficient demand.  Unlike all those economists, I also declared that we would be in the middle of an economic depression now, which is the case, even though few seem to consciously be aware of it due to the various statistical shenanigans.

And three years later, after Obama passed a BIGGER stimulus plan than the one for which Paul Krugman himself called for, Krugman is still trying to claim that the mainstream economists were not incorrect, while repeating his previous and incorrect diagnosis.

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76 Comments:

Anonymous aero January 07, 2013 12:53 PM  

I said this in the other post. I think it fits here

Liberals all have a reading comprehension problem. They believe that they have the right to change what is written so the intend of it will fit their beliefs. They are always changing the rules of the game like a child that wants to always win.

Anonymous Tad January 07, 2013 12:58 PM  

@Vox Day

Regarding getting it wrong...

...where is your deflation?

Anonymous Josh January 07, 2013 1:00 PM  

Nobody saw this coming!

Except for the Austrians, Keen, Denninger, PrecthtetPrecthtet etc.

But nobody important saw this coming!

Anonymous Josh January 07, 2013 1:01 PM  

Regarding getting it wrong......where is your deflation?

Z1, private sector debt.

Anonymous FUBAR Nation Ben January 07, 2013 1:10 PM  

Paul Krugman can't even get Hoobert Hoover right. From my readings of Krugman, I think he's only read the Andrew Mellon quote about liquidation and assumed Hoover agreed with it, which he did not.

Anonymous Shutup, Tad January 07, 2013 1:13 PM  

!

Anonymous VD January 07, 2013 1:25 PM  

...where is your deflation?

In the Household and Financial sectors. Do try to keep up. Over the last four years, what we've seen to date is debt disinflation rather than outright deflation, although there was actual deflation from Q1-09 until Q3-11. But even without net contraction, that still has the economy $22.5 trillion short of where it would have been at its 60-year average growth rate, or 29 percent lower.

Blogger Serge_Tomiko January 07, 2013 1:32 PM  

Vox still doesn't understand our banking system. Amazing.

http://monetaryrealism.com/bad-inflation-bets-and-why-they-were-bad/

Anonymous Stilicho January 07, 2013 1:39 PM  

Vox, a Fed question: when the Fed buys mortgage backed securities (or any other asset for that matter) does it carry that asset on its balance sheet at the purchase price or at FMV? I ask because I'm wondering at what value the Fed carries MBS whose FMV is likely less than the purchase price and also wondering about the Treasuries on its balance sheet that are purchased in excess of par but have an effective zero yield for the Fed (due to forgiveness of Treasury interest) but are only redeemable at maturity at par. Now Treasuries could be sold prior to maturity, but that is becoming increasingly rare these days. So the potential for an accounting loss is there. Certainly upon disposal of an asset, so I'm curious about the monetary implications, if any.

Anonymous Danny Boy January 07, 2013 1:43 PM  

Krugman is an effeminate, doughy, fuzz-faced freak.

Blogger mmaier2112 January 07, 2013 1:44 PM  

This is why it's nearly useless to talk about anything other than cutting spending in a fiat system.

When the system has so many goofy ways to manipulate things, simple cause-and-effect doesn't even seem to apply.

Blogger mmaier2112 January 07, 2013 1:45 PM  

Serge Tomiko: you're a flippin' idjit.

The government lies about everything and you think CPI is an accurate benchmark to use to slam Austrians?

Grow a brain, please.

Anonymous Danny Boy January 07, 2013 1:46 PM  

Krugman is a flabby-shabby manatee with a gut like a pregnant sow.

Anonymous Danny Boy January 07, 2013 2:06 PM  

Krugman is a flaccid, fetid, pasty, bloated goat with a belly like a stuffed kishke.

Anonymous Rally January 07, 2013 2:06 PM  

Has anyone tried to nail Krugman down to an amount? He's clear that he now considers a 750 billion stimulus plan to be way too small. Exactly how much spending does he think we need, and what kind of deficit? 2 trillion? 3 trillion?

When these guys go on about how deficits don't matter and how government spending will solve everything, it makes me wonder, why does anyone need to pay taxes at all?

Get rid of the IRS, just pile more debt up every year and spend what you want. If deficits don't matter, why is that not sustainable?

Anonymous Danny Boy January 07, 2013 2:10 PM  

Krugman is a paunchy, noodly tub of hairy blubber with a belly full of bilge.

Blogger Giraffe January 07, 2013 2:12 PM  

I don't understand why anyone listens to Krugman anymore. The reason, of course, is MPAI. I really need to grasp that simple concept.

Anonymous Josh January 07, 2013 2:14 PM  

Danny Boy:

If you have nothing to offer the conservation save your puerile insults about Krugman and his appearance, why bother?

Go back to watching Rufio and robin Williams throw juvenile insults at each other and let the grownups bash tad and serge with logic, economics, and facts.

Anonymous Danny Boy January 07, 2013 2:15 PM  

Krugman is an odiferous wimpy weakling with fluffy mephitic pudge.

Anonymous Josh January 07, 2013 2:18 PM  

Vox still doesn't understand our banking system. Amazing.

Enlighten us, oh greenbacker.

What is Vox missing?

Anonymous Josh January 07, 2013 2:46 PM  

Regarding Krugman, there is also this:

http://krugman.blogs.nytimes.com/2013/01/07/be-ready-to-mint-that-coin/

Anonymous praetorian January 07, 2013 3:01 PM  

Alright lib ankle biters, which is it: did Vox get the deflation call wrong or does he "not understand the banking system" like Murphy, who called inflation (like a lot of the Mises guys, who don't look at total credit, but rather at narrower monetary aggregates.)

Vox, Keen, Bass and Mish (before he spun off into Alstrynomics influenced sillyness) have been consistently correct in their deflation call, with the effects somewhat muted in the aggregate numbers by government hole-digging-and-filling.

Cheers,
prat

Anonymous fnn January 07, 2013 3:21 PM  

Dean Baker says the economy is doing fine:
http://www.cepr.net/index.php/blogs/beat-the-press/washington-post-maintains-campaign-on-the-deficit

Anonymous Tallen January 07, 2013 3:30 PM  

OT - Vox, any thoughts on Obama's nominating Chuck Hagel for SecDef? I see he voted to implement and uphold the Patriot Act, but otherwise he seems to be a strange choice.

Blogger tz January 07, 2013 4:06 PM  

He is an "econ-man". Without the "e".

They revise econnive-ic measures all the time.

Anonymous workingman January 07, 2013 4:18 PM  

"But even without net contraction, that still has the economy $22.5 trillion short of where it would have been at its 60-year average growth rate, or 29 percent lower."

Where it would have been given what? It's not like the economy was poised for a massive boom after the stock market crash and 9-11 given that less than wonderful "jobless recovery" we had.

Anonymous VD January 07, 2013 4:21 PM  

Vox still doesn't understand our banking system. Amazing.

That's amusing, Tomiko, considering that I kicked your ass and demonstrated that you had no idea what you were talking about last time. Do you really need me to paste that little dialogue here? It's all right there in the comments. Do you really think everyone has forgotten already?

Anonymous John Regan January 07, 2013 4:22 PM  

At least Krugman is not going to be the Secretary of the Treasury. Though of course he wasn't offered the job:

http://www.weeklystandard.com/blogs/krugman-passes-treasury-secretary-job-wasnt-offered-it-anyway_694067.html

Anonymous VD January 07, 2013 4:23 PM  

Where it would have been given what?

Had credit continued expanding at the average rate that it expanded from 1946 through 2006.

This all boils down to the question of what is money. I say credit money is money. Most of the mainstream economists deny that.

Anonymous VD January 07, 2013 4:24 PM  

Vox, any thoughts on Obama's nominating Chuck Hagel for SecDef?

No. I don't care who is in the Obama administration.

Blogger Susanna King January 07, 2013 4:25 PM  

Actually, as Krugman has said many, many, many times, Obama passed a much *smaller* stimulus than he called for.
I haven't read your analysis, so it may be spot on. I'm simply pointing out why he's justified in his complaints, absent evidence to the contrary.

Anonymous Faust January 07, 2013 4:36 PM  

"That's amusing, Tomiko, considering that I kicked your ass and demonstrated that you had no idea what you were talking about last time. Do you really need me to paste that little dialogue here? It's all right there in the comments. Do you really think everyone has forgotten already?"

Where was this? I'd like to read this discussion.

Anonymous Josh January 07, 2013 4:38 PM  

This all boils down to the question of what is money. I say credit money is money. Most of the mainstream economists deny that.

And Nate says it is not.

When is this Schrodinger's debate going to happen?

Anonymous Salt January 07, 2013 4:41 PM  

ROFLMFAO

"Yes, I’ve heard about the notion that I should be nominated as Treasury Secretary. I’m flattered, but it really is a bad idea," writes Krugman.

Anonymous Zartan January 07, 2013 4:51 PM  

Oh Susanna...

1. Krugman is lying. (Look it up)
2. You didn't read the analysis? WHY ARE YOU SPEAKING?
3. You are simply pointing out what you want to believe, without examining the evidence that exists (much less contrary evidence)

Blogger James Dixon January 07, 2013 4:58 PM  

> Actually, as Krugman has said many, many, many times, Obama passed a much *smaller* stimulus than he called for.

And Krugman is lying. He called for a stimulus package somewhere in $650 billion range. It wasn't till after the >$800 billion stimulus was passed that he started calling it insufficient.

You can find the original estimate at http://krugman.blogs.nytimes.com/2008/11/10/stimulus-math-wonkish/

Anonymous Zartan January 07, 2013 4:59 PM  

To avoid the expected "prove it":

"When I put all this together, I conclude that the stimulus package should be at least 4% of GDP, or $600 billion." Paul Krugman

Size of stimulus plan passed: $787 billion

Anonymous workingman January 07, 2013 5:09 PM  

"Had credit continued expanding at the average rate that it expanded from 1946 through 2006."

Huh? By 2006 the housing bubble had already been inflated. You think that less credit through the crisis and into the recession wouldve meant higher growth?

Anonymous the bandit January 07, 2013 5:15 PM  

Actually, as Krugman has said many, many, many times, Obama passed a much *smaller* stimulus than he called for.

Actually, as Vox as pointed out many, many, many times, Krugman is lying.

Blogger Giraffe January 07, 2013 5:21 PM  

It's OK, Susanna. Most people are idiots. You may not be in good company, but you are in the majority.

Anonymous AlteredFate January 07, 2013 6:05 PM  

"It's OK, Susanna. Most people are idiots. You may not be in good company, but you are in the majority."


Ha ha! Giraffe is a witty one. I almost choked.

Anonymous Noah B. January 07, 2013 6:29 PM  

"This all boils down to the question of what is money. I say credit money is money. Most of the mainstream economists deny that."

Considering that performing loans are booked as assets by every lending institution on the planet, this would seem to me to be a very, very solid position. I find it hard to understand what basis one could have for disagreeing.

Anonymous CunningDove January 07, 2013 6:50 PM  

I find it hard to understand what basis one could have for disagreeing. - Noah B.

Since Keynes does not account for credit in his equations, it is not relevant to many mainstream economists. The fact that they can't look around them at the empirical world & see that this is a flaw with Keynesian (or Monetary) Theory is another topic all together. However, that is why mainstream economists disagree with writers like Vox.

OpenID simplytimothy January 07, 2013 6:51 PM  

..... even though few seem to consciously be aware of it due to the various statistical shenanigans.....

And debt 'financed' transfers from the producers to the parasites while the real pain is being masked by a money illusion.

Atlas is shrugging; Krugman ain't no Atlas

Blogger Nate January 07, 2013 7:06 PM  

Ahem...


Roll Tide.

Anonymous VD January 07, 2013 7:13 PM  

Actually, as Krugman has said many, many, many times, Obama passed a much *smaller* stimulus than he called for. I haven't read your analysis, so it may be spot on. I'm simply pointing out why he's justified in his complaints, absent evidence to the contrary.

What part of "Krugman the revisionist" did you fail to understand? The fact that he has said it, even repeatedly, doesn't mean that it is true.

Blogger James Dixon January 07, 2013 7:27 PM  

> Roll Tide.

Personally, I'm hoping that fairly early in the game a Notre Dame defensive player will make one of their infamous personal fouls which are almost never called, take out an Alabama player going out of bounds, knock him into Saban (knocking him out and breaking one or more limbs), a bench clearing brawl will ensue, most of the players for both teams will get ejected, and the game will be called as a mutual forfeit.

OpenID simplytimothy January 07, 2013 8:02 PM  

@Dannyboy when I find the need to vary my insults I consult http://www.pangloss.com/seidel/shake_rule.html

At first, I thought, hmmmmmm @Dannyboy and I think alike, so I looked under the "m's" in the triplets


pribbling ill-nurtured maggot-pie
puking knotty-pated malt-worm
puny milk-livered mammet
qualling motley-minded measle
rank onion-eyed minnow
reeky plume-plucked miscreant
roguish pottle-deep moldwarp
ruttish pox-marked mumble-news


And did not see "mephitic pudge"

A google for "mephitic pudge" turns up Vox's post...curiouser and curiouser.


Anonymous zen0 January 07, 2013 8:27 PM  

Nate January 07, 2013 7:06 PM

Ahem...


Roll Tide.


The Tide rolled out in front of the Notre Dame players and were dancing around like Jewish ecstasists. It seemed like they had about 200 people in their entourage, plus at least one midget.
So far, so good.

Anonymous Salt January 07, 2013 9:18 PM  

News out at ZH.

Looks like the new Treas. Sec. could be Jack Lew.

Anonymous Wheeler's Boy January 07, 2013 9:42 PM  

A Jew in charge of the purse strings. A bold change in policy.

Anonymous Red Comet January 07, 2013 9:52 PM  

Looks like the new Treas. Sec. could be Jack Lew.

They're not even trying to be subtle anymore. Just put the "J" back in that guy's last name already.

At this rate they'll march the next Catcher in the Rye crazy to his targeted massacre in a CIA shirt ala Johnny Depp in Once Upon A Time in Mexico.

Blogger Rantor January 07, 2013 9:59 PM  

Notre dame doesn't even belong in this game. I may have to start believing all that SEC smack. Shoulda let South Carolina play Alabama, they would've scored.

Anonymous Roundtine January 07, 2013 9:59 PM  

So a non-financial guy in at Treasury just before the most important financial moment since September 2008, and most new Treasury Secretaries make a bonehead move. Oh yeah, this is going to be good.

Blogger Colonel Blimp January 07, 2013 10:10 PM  

I'm so glad I put 5K on Bama -9 1/2. Easiest money ever considering everyone was fading ND. The sharks and Vegas had Bama and it's like an NFL team playing Western KY. I even put my 750 bonus freeroll on the alt line of 14 and 1/2 bama to cover and it's half time and I'm 99% assured of covering even that. But of course next year whoever plays the SEC champ will get all the press that they can possibly compete.

Anonymous Stillicho January 07, 2013 10:10 PM  

At this rate, the BCS will have to start handicapping SEC teams. At least Oklahoma played a good first half.

Blogger Colonel Blimp January 07, 2013 10:12 PM  

And for all the playoff whiners, even a playoff would only assure an LSU_Bama LSU-FLA, Bama-FLA/UGA championship EVERY year....

Anonymous castricv January 07, 2013 10:14 PM  

Oh and Colonel Blimp is me. I was still logged into Google and it came up automatically

Anonymous zen0 January 07, 2013 10:15 PM  

@ Roundtine



So a non-financial guy in at Treasury just before the most important financial moment since September 2008, and most new Treasury Secretaries make a bonehead move. Oh yeah, this is going to be good.

Don't worry, he is just a bumboy who is there merely to communicate between the people who run America and the Administration. He does not make decisions, he sells them.

just who it is that makes the real decisions at the US Treasury? The answer is, The Treasury Borrowing Advisory Committee, or the TBAC in short, chaired by JP Morgan and Goldman Sachs, which meets every quarter, and in which the richest people in America set the fate of the US for the next 3 months .....

Anonymous zen0 January 07, 2013 10:19 PM  

And for all the playoff whiners, even a playoff would only assure an LSU_Bama LSU-FLA, Bama-FLA/UGA championship EVERY year....

So I guess Texas A&M gets a share of the National Championship because there is no playoff system. Alabama was not able to beat them, afterall.

Blogger Colonel Blimp January 07, 2013 10:41 PM  

You're right zeno0I forgot A&M, but I think my point stands..

Blogger Colonel Blimp January 07, 2013 10:43 PM  

And good on them for being able to come into the SEC and toughen up quickly. That Johnny football is awesome.

The secret to the SEC is not magic. Play against 3 big boys in Lion's dens every season and feel real pressure and when you hit a team in the championship whose biggest pressure game was against Wisconsin and see which set of 20 year olds is ready to go.

Blogger Colonel Blimp January 07, 2013 10:48 PM  

Of course this will be 7 years in a row I have made a killing betting on them, because no one outside of the south is able to fully understand how the SEC plays. Hence the renewal of belief every year that this is the year the SEC can be beaten.

Think about it, if you are a casual fan, how many games outside of your conference do you actually watch? Do you really keep up with SC vs. Vandy if you live in Oregon? The writing on the wall was easy for ND because being in the south I could easily compare this conference with all the nationally televised ND games. It wasn't even close....

Anonymous Josh January 07, 2013 11:19 PM  

SEC bitches. SEC.

Anonymous Anonymous January 07, 2013 11:40 PM  


What we clearly need is more cowbell.
More Cowbell.
MORE Cowbell!
MORE COWBELL!

M0AR KOWBELL!!!

Signed, Paul "Groundhog Day, Again?" Krugman, Ben "Helicopter" Bernanke, Tim "Turbo Tax" Geithner, and A Cast Of Thousands.

Anonymous Unending Improvement January 08, 2013 12:53 AM  

According to a friend:

"An economist is someone who can tell you tomorrow why he was wrong yesterday about what would happen today."

Anonymous Danny Boy January 08, 2013 12:58 AM  

Krugman is a paunchy, pudgy goo-ball, with a gut like a bloated, pregnant pinniped.

Anonymous john January 08, 2013 1:02 AM  

My thought, is that some of these guys want the US to be in debt so they can somehow collect the interest. You know. Same as credit card companies that want to increase peoples limit all the time.

Anonymous Danny Boy January 08, 2013 1:05 AM  

Krugman is a piliferous, odiferous douche with Honey-Boo-Boo thighs.

Anonymous Danny Boy January 08, 2013 1:10 AM  

Krugman is a hirsute, snot guzzling whore in leatherette lederhosen.

Anonymous Dot connector January 08, 2013 2:05 AM  

Leftists always want no inhibitions/constraints, well unless they dictate them.

"Just spend,spend,spend budgets are for the little people."

"Constitutions are so outdated, who needs them?"

The bible as usual has those clowns pegged.

"The kings of the earth take their stand and the rulers gather together against the LORD and against his Anointed One.Let us break their chains," they say, "and throw off their fetters." Psalm 2:2,3

Anonymous elmer January 08, 2013 5:45 AM  

@Dot connector

And there are those that say the Bible does not speak of conspiracy (not theory). "The kings of the earth take their stand and the rulers gather together against the LORD and against his Anointed One.

If that is not conspiracy, particularly on a global (or beyond) scale, then I don't know what is. Notice that kings of the earth, and the rulers are separate. Separate entities? In such way that the rulers are possibly not of this planet? Including not completely of this solar system? Could the reference to "rulers" be that of to the "divine council?" Do your own research here.

The saying of MPAI, is woefully inadequate and inaccurate. Idiots should be legally institutionalized. An imbecile. A "Forest Gump" type could be accurate of some. Morons are educated. Either they refuse to follow their acquired acumen, or are simply mal-educated. This is also known as willful ignorance.

I think it is much deeper than that. Most people are neither idiots, imbeciles, or even educated morons. Of the masses, most don't have a college education.

This is quite simple...

MPAC = Most People are COWARDS

Anonymous elmer January 08, 2013 6:17 AM  

So far as Krugman et al, I simply have little or no time for him. I spend more energies with the likes of Dr. Roberts. I don't agree, with probably even 80% of his philosophy. (He is still minarchist too much for my taste) However, he is much closer to the mark, than most. And, truly worthy of much more of our time, than Krugman et al. There is just so many hours in a day. So many days, in a lifetime. Choose them wisely.

The best way to diminish a moron, is to ignore him...

Blogger James Higham January 08, 2013 7:50 AM  

Krugman has far too much attention paid to him.

Anonymous Joe Doakes January 08, 2013 8:33 AM  

Not yet, James. But soon. The rumor is Krugman will replace Turbo Timmy at Treasury. Then people will HAVE to pay attention to him. THEN things will get done right. He'll save the country, heck, the whole entire planet! Just you wait and see . . .

Anonymous Susan January 08, 2013 10:14 AM  

I saw recently where Danny Glover is backing Krugman for Treasury. Found that mildly amusing.

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