Can you be more specific? What would you consider to be going for the jugular?
What would be a better response to Krugman saying (at 10:08) “do you really think people are only using dollar bills because the government isn’t allowing them to use other stuff?”.
As currency, yes, but as a store of value? There’s gold, silver, and financial instruments that people use for that.
I was thinking about this debate today and realized… Did Krugman really say barter was legal? I was under the impression that for any transaction, government needs to collect a sales tax.
For example, if you receive a car as a gift. You have to pay the government a tax based on the Kelly Bluebook value.
Not to mention I doubt I can pay the IRS in baseball cards.
You aren’t even allowed to save for retirement (in a retirement plan, anyway) in baseball cards.
@Graham Wright
After Krugman said that we can barter without going to jail, Paul should have pressed him on this: “What?!?!? You mean that if I don’t want to use federal reserve notes, my only legal alternative is to barter with chickens?” Paul should then have gone on to mention the man arrested for selling a competing silver currency. It’s better to mention the specifics than just say that it’s possible to be arrested for using gold or silver as money. Basically, he should have nailed down fallaciousness of what Krugman was saying with specifics. And having just those two as ammunition shouldn’t be too hard to practice and remember for debates.
Krugman then says there was too much money competition, and claimed that there was private money. While Paul was good with talking about fraud, he still could have been harsher. “What do you mean by money competition? There is only one legal type of money in the US and that’s the federal reserve note. You are playing fast and loose with definitions, Mr. Krugman.”
The problem as I see it with Paul is that he is reluctant to point out that his opponent is ignorant or dishonest. He prefers to talk theory (and support it, which is great). The problem with this is that many people won’t care or understand, but if you can point out how your opponent is actually dishonest, well, that’s something to remember. It also has the added bonus of flustering an opponent, making him angrier and more anxious. People tend to not want to side with people who lose their cool in debates.
Does this make sense?
It makes sense, but he can get away with it because Paul is just bewildered and disorganized throughout the whole thing.
A Paul Volcker versus (insert presentable, intelligent libertarian here) debate would be far more interesting.
I wouldn’t necessarily call Peter Schiff a libertarian or even a free banking proponent. But I would bet him $1,000 that the dollar will not be worthless ten years from now.
What sprang to my mind when he said that was what happened to the architect of the Liberty Dollar:
The article doesn’t bash Ron Paul directly, but it seems to paint Krugman in a better light (depending, I suppose, how you perceive the selcetion of quotes). It is a selection of quotes from Krugman that I am questioning. They are from one of his articles where he ad hominems Ron Paul saying, “Ron lacked facts. w/e; book sales. My boook has facts.”
I wouldn’t expect the “American Banker” to be a particularly friendly organization to Ron Paul either.
Remember in the video around 19:40 or so when Krugman said that it is the “great lie” that the Fed created the Housing Bubble? Yeah…someone else remembered what he said on his blog in '09…
Requesting the fed to create a housing bubble greatly overestimates the Fed’s ability to micromanage the economy.
Even if that were true (it’s not, but even if it were), it’s irrelevant. The point is he said they did. Now he says the idea that they did is “the great lie.” Bottom line, Krugman was either lying then, or lying now.
I’m not sure what you meant there.
Across countries during the 2000s, house prices were weakly correlated with central bank policy.
Saying that the Fed can target one particular sector of the economy through the federal funds rate is a stretch. With enough easing you’ll get some kind of bubble eventually, but it can’t be said where.
But yes, Krugman isn’t the best representative for liberals.
Low interest rates correlate with all long term capital intensive investments, of which housing is one.
Sure he is…
It depends, because there are counteracting effects. Low or negative real interest rates also discourage savings and investment. Interest rates accounted for maybe a few percent of the increase in house prices.
I can think of some alternatives. Just go through an economics department and ask who’s interested.
If a great many loans are being made while saving and investment are suppressed by low interest rates, doesn’t that mean that the loans must have been made with fresh new central bank and FRB money?
From the article
Low interest rates can correlate to both “larger current account deficits” and housing construction (or any kind of construction). But Bernanke thinks there is something else…hmmmm…
From what to what? A reduction of 10 bases points would net you nominal .2%-.3% results if you are lowering from .17 to .07.
This is just a highly technical way of saying that shifting interest rate policy will screw up everyones expectations.
DUH! Risk aversion (feelings of uncertainty) will certainly change people’s habits and increase their “motive” to save (to quell feelings of uncertainty) and will highlight what these assholes call “policy errors”, but what austrians refer to as a process of malinvestment; misallocated capital due to bureaucatic (self interested groups) price signals sent by depressed interest rates. But, these teet suckling economists at the Fed and the Peterson Institute don’t look at their past work as being the cause. It is always perception of their policies by the profane.
It’s funny that people say the Beijing stock market trades on “suspicions of Party policy change” and we mock them for being communists. “Come to the U.S. and worship the priesthood at the Federal Reserve!! Our market trades on suspicions of policy change! All hail the almighty economists!!”
Large derivative (and hence Mortgage backed securities) use can easily be explained by the process of fraction reserve banking and the low interest rate policy of the FED! (See: Maturity mismatching, yield curves, and the term structure of savings) You have to try pretty hard to ignore low interest rates increasing the amount of loans and then combined with government depost insurance and/or loan guarantees what this does for capital investment (or savings) over periods of time. We are talking about habits right, Bernakers?
You best checkity check yourself, son.
Some of them were, while other loans are issued by increasing the monetary multipliers. The US economy functions as a fractional reserve banking system. Even if base money stays the same, they can increase loans by increasing the ratio of M1, M2 and M3 to base money as occured in 2005-07. Fractional reserve lending doesn’t require base money or deposits to match loans.
who are they?
Fractional reserve systems can exist under free banking unless the government specifically prohibits it. Mandatory 100% reserve systems require government intervention, and, in my opinion, not a good kind.
Maturity mismatching, yield curves, and the term structure of savings are not going to cease being problems if you raise interest rates and take out the central bank.
Again, the part played by interest rates compared to fractional reserve banking was quite small. Raising interest rates 200 BP lowers house prices by about 4%.
I’m sorry, come again?
are you saying that m1, m2 & m3 shrank 2005-07 while monetary base stayed the same?