Hi all. I wasn’t planning on writing about current events until much later in the course of my blog. But the current brouhaha over Krugman and the housing bubble was just too fascinating to not chime in. I give a round-up of the main thrusts and parries, as well as my own take on Krugman’s “defense” here.
very good post. Im going to send this to people…
I like this. Very well said, in my opinion.
Good post. First thing I noticed about Krugman’s hand-waving was the strawman. He’s such a disingenuous hack.
Amazing.
One of his apologists dug up this 2005 quote to try to rehabilitate him:
“Americans make a living selling each other houses, paid for with money borrowed from the Chinese. Somehow, that doesn’t seem like a sustainable lifestyle.”
The housing bubble Krugman himself recommended in 2001-2002 was getting out of hand by 2005, so he started getting worried about the direct results of the aggressive interest rate cuts HE called for.
learnt from the best didn’t he…
Hayek explains that Keynes’ theory was not “general” at all, and that even Keynes himself agreed with Hayek that the Keynesian disciples could possibly use his framework to promote inflationary policies. Keynes (according to Hayek) promised to Hayek that he would rein them in “like that” (I think snapping his fingers) if they ever crossed the line, but Keynes died six months after this pledge.
Here’s an exchange I had over this with a Krugman apologist on Reddit.
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Hey guys, check out Mises.org. This piece is today’s Daily Article. [:D]
My piece Krugman’s Intellectual Waterloo has been made today’s Daily Article on Mises.org*. Check out the awesome “Krugman-as-Napoleon” image they put together. My thanks to Jeffrey Tucker for selecting it, to BK Marcus for editing it, and to nirgrahamUK on the Mises boards and anyone else who passed it on to others.*
I consider the Mises Institute web site to be the greatest source for truth and wisdom on the web. So it’s an honor to have something I wrote featured on its main page, and it’s a kick to see my name in the list of Mises Daily Authors*, along with the names of a great many of heroes.*
I hope my characterization of Krugman’s twisting in the wind will be convincing to people and that this piece will help spread the word regarding the damning quotes that Lew Rockwell and Mark Thornton have discovered. If I could help soften the ground under Krugman’s pedestal and cause it to sink just one inch, I would feel I have truly done good in the world.
Please join the assault on neo-Keyneseanism by contributing a comment to the article’s entry on the Mises Blog.
Cheers,
Lilburne
I have to comment on this as it is somewhat dishonest. First of all, you did not present the quote in its original context, you edited it to seem even more malicious. Also, a lot of this is a hodge podge assembly of comments left by people on Krugman’s blog. I really have no idea why you would lash out against Arnold Kling or why mises.org would publish that.
I am not here to defend Paul Krugman, but to say that this “article” is poorly written.
A commenter on the article named Eric raises a key point which I wish I had noticed when I wrote it:
Of valuable note here is not that Krugman advocates a central bank solution to a central bank problem but that he implicitly blames the Fed for bubbles even though as of late he has been in his “blame capitalism” robes.
Regardless of whether or not he is advocating for a new housing bubble he more than pins down where one would have to come from.
I am with you on this one. The article is poorly written and seems to have been edited to create certain idea.
I rather liked the article. Interesting perspective.
As I demonstrate in my follow-up piece, the quote, presented in two full paragraphs of context, implies exactly the same thing as the truncated version does in my first piece.
One of my objects was to characterize the controversy. I don’t see what’s wrong with reporting what people are saying. One main purpose was to describe Krugman’s Waterloo, not necessarily deliver it. He delivered it to himself.
First of all, the guy is no saint; he worked for the Federal Reserve and Freddie Mac. More importantly, his “retraction” of his mildly critical response to Krugman’s editorial was toadyish, and I thought he should be called on that.
I regard Jeff Tucker as the finest libertarian wordsmith since Rothbard. So, I’ll credit his judgment of my writing over yours, Taras.
Its not my institute, I just read the articles.
GJ on getting your thing hosted, personally I still dont like it.
Fair enough. But did you read the follow-up?