A follow-up.
This follow-up article is a front-page “Mises Daily” today. I would greatly appreciate anyone taking the time to check it out and contribute to the comments.
Here’s an excerpt…
This brings us to the key point that all the Krugman apologists egregiously ignore: namely that it would be surprising if such an arch-Keynesian economist as Krugman (he’s written extensively on what he has called “the greatness of Keynes”) didn’t adovocate a housing bubble to replace the dot-com bubble, since doing so would dovetail perfectly with basic Keynesian doctrine. As a Keynesian, Krugman should have wanted lower interest rates (as he actually did want, as is revealed by the previous quote). To quote Keynes himself,
Thus the remedy for the boom is not a higher rate of interest but a lower rate of interest! For that may enable the so-called boom to last. The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom. (General Theory, p. 322; emphasis added, but the exclamation point is Keynes’s own.)
To be true to his Keynesian principles, Krugman ought to have to welcomed the housing bubble, since to him
- it was a good way to achieve his coveted “soaring household spending”, and
- it was the likely result of Keynesianism-prescribed lower interest rates.
Our overlords just can’t slip out of a lie like they used to, what with all these intarwebs floating around.
Krugman’s hero Keynes would have been exposed as a crank and rightfully swallowed by obscurity if the internet had been around when he was writing. As it was the obvious falsity of his doctrines was no hindrance because of the cozy little insulated society that the economics profession was at the time.
Exactly. That’s why I think the Internet and related technology is our best hope.
Someone named Tom blundered into the comments and wrote this gem:
“What era do you geniuses want to go back to? The 1800’s? Keynesian economics provided more than 40 years of strong economic growth. What did we get during the 1800’s?”
He is presently being ripped to shreds by 6 Austrians.
As if it required 6 Austrians… 1 Austrian is more than enough, or 3 Monetarists (thanks Cassel!)