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Source link: http://archive.mises.org/14348/the-rage-of-paul-krugman/

The Rage of Paul Krugman

October 25, 2010 by

While I know Bob Murphy is ready to debate Paul Krugman, nonetheless it seems that the Great One is enraged that the Holy One of Chicago has not performed the miracle of turning stones into bread, so he might not be in the mood to debate a real economist. Today, I examine Krugman’s latest missive that Obama simply has not spent enough.

{ 8 comments }

Ned Netterville October 25, 2010 at 9:51 am

Krugman has a one-track mind: spend, spend, spend. If you listen to Krugman carefully, you will discover that what he is saying is that the only possible way, politically, for government to generate enough spending to alleviate a serious depression is by means of a major war that every citizen would have to get behind. Not just a piddling undeclared conflict like Vietnam or Korea, but an all out, everyone-works-in-the-military-or-makes-weapons kind of war like WWI or WWII. In other words (viz., Kurgman’s words describing how WWII finally ended the Depression) an “enormous public-works project…provid[ing] a fiscal stimulus adequate to the economy’s needs.” See: http://jesus-on-taxes.com/ON_PAUL_KRUGMAN.html

Barry Loberfeld October 25, 2010 at 10:25 am
RandFan October 25, 2010 at 10:35 am

In his latest Op-Ed piece in today’s NY Times, “Falling Into the Economic Chasm,” Krugman points to the “lesson of history” vis a vis the Left’s shibboleth of economic stimulus: major financial crises are normally followed by a protracted period of very high unemployment. According to Krugman, the Obama administration’s failure to foresee the inevitability of this truism is what led to its fateful underresponse to the current financial crisis. On the contrary, to paraphrase Tolstoy (and to anticipate Mises): All healthy economies are alike; every bad economy fails in it’s own way. It is precisely and to the extent that the Bush/Obama presidencies have assumed that the only way to avert catastrophe is to intervene in the free market that we find ourselves in the deepening economic quagmire that we’re in. If only those in government would take the time to read and understand “Human Action,” they would, if intellectually honest, admit that there are no lessons to be learned from an historical treatment of our economic past. Instead, they find themselves, like fading generals, fighting the last war; and Krugman is the Maginot of our economic times.

Walt D. October 25, 2010 at 1:02 pm

What we need is a high speed train or road tunnel through the Sierras. This would be the worlds largest hole in the ground. That should do the trick, particularly if it turns out to be uneconomical and we have to fill it in.

Greg October 25, 2010 at 1:29 pm

Why stop at the Sierras? How about we undertake the project of digging a hole through the middle of the earth, all the way to China. If it works out, it will provide a faster route for us to import their goods and export our dollars. If it doesn’t, we just didn’t spend enough on it.

Walt D. October 25, 2010 at 4:49 pm

You’re right! Your tunnel is bigger than mine! In Keynesian Economics, does size matter? According to Krugman yes – the bigger the hole the larger the economic stimulus.
” If it works out, it will provide a faster route for us to import their goods and export our dollars. ”
Don’t make the Austrian mistake of assuming that there needs to be some purpose or benefit. A hole in the grounds just a hole in the ground. That’s why Keynes used it as an example.

Walt D. October 25, 2010 at 5:37 pm
Ned Netterville October 27, 2010 at 10:07 am

Hey Walt, that crack is cracking me up. You made my day.

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