Search Results for : krugman

Krugman Gives DeGrauwe 2011 Credit for What MMT Has Argued for 15+ Years

New Economic Perspectives has the article Krugman Gives DeGrauwe 2011 Credit for What MMT Has Argued for 15+ Years.

Unlike years prior, since 2008 it’s rather clear to many (if not to neoclassicals) the importance of alternative ideas, frameworks, and methodologies—including MMT and the dozens of other approaches—that could contribute to building a new, more relevant field of economics. But the mainstream of a field that didn’t see the crisis coming has doubled down, essentially rewriting history by declaring that nobody could have seen the crisis coming, and that virtually nobody did. (Of course, it’s true that neoclassicals couldn’t have seen the crisis coming given that their models do not include a financial system—so in that sense they aren’t lying, just obviously casting their net too narrowly, by design.)

As for being able to see the crisis of 2008 coming, I saw the crisis coming years before 2008. I didn’t even get my insight from MMT. The earliest mention of MMT that I find on my blog via a quick search is May 26, 2012.

Three Natural Experiments Documenting Krugman’s Bias Against MMT

New Economic Perspectives has the article Three Natural Experiments Documenting Krugman’s Bias Against MMT.

The bad news is that in this case even after he read Roche’s rant he knew so little about the MMT scholarly literature that he represented to his readers that it exemplified MMT. The even worse news is that even after he read, and hated, Roche’s rant, Krugman knew so little about the MMT literature that he decided to provide his readers with a link to the rant – and only the rant – as supposedly representative of the MMT scholarly canon. To sum it up, Krugman’s attempt to assure his readers that he had “listened to the gentiles” (his phrase, not mine) before attacking them proved he had failed to do so. Krugman was so eager to reject and demean MMT scholars that his subconscious transformed Roche’s rant into the mother of all strawman arguments to aid his assault on MMT scholars.

I used to be such a fan of Paul Krugman until he went so obviously off the rails. He does write for The Dreaded New York Times. That should have warned me about what was eventually going to come out of his writings.

Deficits Matter, Paul Krugman Doesn’t

Ellis Winningham has posted the article Deficits Matter, Paul Krugman Doesn’t.

In his latest anti-knowledge drivel of January 9, 2017, Count Krugula apparently decided that he wants to make a total fool of himself in public yet again. Only this time, he wants it to be a sort of career-ending effort. As I said, in that effort, Paul Krugman has succeeded.

MarianneB brought this article to my attention. She wanted my opinion because I tend to read and understand articles like this one.

I have read varying amounts of the critique and the article to which it refers. The critic is closer to the truth than Krugman, but they both tend to gloss over subtleties.

Deficits do and don’t matter in ways too subtle for either of them to cover. The money the FED put out there is sitting in the hands of people who won’t put it into the economy right now. To make deficits work, the money has to be put in the right hands to match the circumstances. What the fed has done to get it into the wrong hands might need retraction if we start getting money into the right hands. Winningham glosses over the potential problem.

I am being too subtle too. When I use phrases such as “right now” and “match the circumstances”, you are supposed to understand that in other times other than “right now” things could (and will) be different. I can leave it to your imagination as to what could be different, but that would be a deriliction of the duty of an expert. The chances that the uninitiated would guess the differences that would change the economic prescription are not that great. Neither writer helps with that matter. This essay would be way longer than it is, if I were to go into the explanation, but at least I have warned you that there are holes in the arguments if these details are not discussed.

Krugman’s Failure to Speak Truth to Power about Austerity

New Economic Perspectives has the article Krugman’s Failure to Speak Truth to Power about Austerity.

Ever since the birth of the New Democrats, their adherents have embraced austerity. This act of mutual economic and political self-destruction has become so core to their identity that Hillary unhesitatingly made it one her most important closing pitches during the last 40 days of her campaign against Trump. At the very moment when her pollsters were warning her that she could lose due to working class hostility, she chose to showcase her hostility to the working class by promising to inflict eight more years of austerity on them. In your face working class! This is a political strategy that has no upside, but a toxic downside. Despite intense criticism from progressives of her austerity threats, Paul Krugman never urged her publicly to promise to end austerity’s assault on the working class. Similarly, no one on her official campaign team had the courage and strength to tell her to stop and reverse her position.

This is exactly my beef with all Democrats who tried to sell us Hillary Clinton after Bernie Sanders dropped out. Elizabeth Warren I write off without hesitation because she caved to Hillary at exactly the strategic moment when she should have promoted Bernie Sanders. At the end, even Robert Reich, a firm supporter of Bernie Sanders, tried to sell us Hillary Clinton, when his previous statements showed that he full well knew the stupidity of Clinton’s austerity plan. Surely Bernie Sanders knew how bad the Clinton plan was. He lost all credibility when he tried to sell her to us.

On television shows about court trials, you often hear an opposing lawyer ask a witness who has admitted to lying, “Were you lying then, or are you lying now?” How can we ever trust someone that we know has lied to us? Sorry, Bernie, we only have trust in people with unblemished records for telling the truth.

Is Paul Krugman The Big Meh? 1

Paul Krugman has the opinion piece in The New York Times, The Big Meh.

In other words, at this point, the whole digital era, spanning more than four decades, is looking like a disappointment. New technologies have yielded great headlines, but modest economic results. Why?
One possibility is that the numbers are missing the reality,
Another possibility is that new technologies are more fun than fundamental.
So what do I think is going on with technology? The answer is that I don’t know — but neither does anyone else.

The feigned ignorance that Krugman displays in articles like this is getting way more than a bit tiresome. He seems capable of thinking up two possibilities, and then seems to give up. He fails to note that over the more than four decades he cites, there has been a decimation of the government’s incentives for industry and the oligarchs to share the benefits of increased productivity with the workers. In past periods of increased productivity and economic growth, the sharing of the benefits with the workers has spurred enough job creation to make up for the jobs wiped out by increased productivity.

For a self-declared liberal with a conscience, Krugman’s inability to imagine this as a third possible explanation makes one wonder what has happened to that conscience. As John Oliver of the Last Week Tonight show might wonder in reference to Paul Krugman’s articles in the lame stream media, How Is This Still a Thing?

Robert Parenteau: The Large Fly in Krugman’s New Keynesian Soup

Naked Capitalism has the article Robert Parenteau: The Large Fly in Krugman’s New Keynesian Soup.

Paul Krugman had a delightful field day with his March 2nd New York Times column trashing media poseur economists like Larry Kudlow – economists who somehow manage to survive on their entertainment value alone, despite their repeated analytical errors. No doubt their prolonged shelf life has more than a little to do with the fact that the points of view they espouse tend to encourage their readers (or viewers) to think that their self interests are perfectly aligned with the self interests of say, oh, the Koch Brothers and their ilk. Useful idiots is the phrase that comes to mind. Useful idiots engaging in willful ignorance.

On his way to skewering the clownier clowns of the economics profession, however, Krugman could not help but to once again remind his loyal readers that everything you ever needed to know about macroeconomics was already discovered and described in his 1998 paper on Japan’s alleged liquidity trap. Humility is not one of Krugman’s strong suits, but we will allow you to come to your own conclusions after reading yet another of his repeated attempts at shameless self pimping in the March 2nd piece:

I thought it might be fun to see Paul Krugman being skewered, but by the time I got to the end of the article, my head was spinning.  Then I read the comments among very well read people arguing over who did or did not say what or how you could or could not interpret their words.

I offered the following comment:

Let me see if I can bring this discussion back to reality by quoting Greenberg’s Law of Reverence

Principles are not great because a revered person spoke of them. A person is revered because he or she spoke of great principles.

The argument about what Keynes did or didn’t say is not useful in proving or disproving the correctness of any economic principle. The economic principle is either correct (or applicable) based on reality. To the extent that Keynes is revered, it is because the principles he espoused were correct (applicable). Pretending or interpreting an idea as something that Keynes said is not proof of that idea.

The upshot of this understanding of Greenberg’s law is that it is a blind alley to pore through the writings or sayings of Keynes to find out if he did or did not say something, when what we should really be after is whether or not an economic idea is both correct and applicable to the current situation. This talk about economic experts is devolving into an almost Biblical discussion of whether or not you can find something in the Bible to support your argument.

The graph of economic growth versus real interest rates should not be surprising. The economy (society) is so full of competing forces that it is foolish to think that you can find a single measure that will always correlate with (much less be the cause of) one single other measure.

Besides the complexity argument, you have the idea of reflexivity (credit to George Soros, not reverence for him). The actors in this complex system read about what is said about how the system works, and they make judgments on how others will behave given this knowledge. No physical system of inanimate objects bases its behavior on what it thinks the other objects know. So thinking you can ever make a model of the system the way physicists do in purely inanimate systems is going after a fool’s errand.

<ironic self deprecation>I so fell in love with my brilliant analysis that I decided to blog about this whole episode.</ironic self deprecation>.

Scott Fullwiler: Paul Krugman—The Conscience of a Neo-Liberal?

Naked Capitalism has the post Scott Fullwiler: Paul Krugman—The Conscience of a Neo-Liberal? published on March 28, 2011.  This is one of the best counter-attacks on Paul Krugman’s attempts to discredit MMT that I have read. It is not just a  counterattack, but it is also an explanation of a lot of MMT. Your mileage may vary.  So this is another one of the posts that I make purely for my own benefit in recording the location of the article.

The article concluded with the following:

To conclude by way of reiterating the main point here, one need not agree with MMT that the three assumptions Krugman makes are incorrect. The overarching problem is that Krugman has simply assumed the Neo-Liberal macroeconomic model is correct and the MMT view is incorrect. This is far different from actually demonstrating that MMT is incorrect, which Krugman has yet to even attempt.

By the way, I stumbled across this article while wending my way through some of the links in the article of my previous post Is It Time for MMT To Become Mainstream to Save Us from the Second Global Financial Crisis of the Millennium?

Mick Jagger, Gordon Brown, and Paul Krugman Lead the Charge for British Rule of Scotland

New Economic Perspectives has the article Mick Jagger, Gordon Brown, and Paul Krugman Lead the Charge for British Rule of Scotland by William K. Black. <spoiler-alert>

Krugman is correct that not having a sovereign currency is a risk and that Scotland would be far better off recovering all aspects of sovereignty, including its once sovereign currency.  That is politically impossible in Scotland (as it is in Ecuador as I have explained previously).

What Krugman does not explain, however, is that Scotland already lacks a sovereign currency because it lacks sovereignty and is part of a “union” in which it is a small, permanent, and often scorned minority.  Regardless of the vote on independence Scotland will lack a sovereign currency.  The English have a sovereign currency, the Pound, and they have had at all times under the “Union” the votes to set the UK’s economic and currency policies.  Scotland was helpless to prevent the insane austerity that crippled Scotland’s recovery from the Great Recession and forced it back into a gratuitous second recession.


I have not been following the situation in Scotland at all, but any time Bill Black takes Paul Krugman to task, it is worth reading.

Of course, I suppose I have put up a spoiler as the quote.  In the article Black tantalizes with hints as  to what is wrong with what Krugman says.  It is the anticipation of waiting for him to actually state the case that makes the article such a good read.

Krugman v. Morgenson on Too Big to Fail

Naked Capitalism has the article Krugman v. Morgenson on Too Big to Fail by David Dayen.

The bottom line is that this exhibits pure party-based tribalism. Take whatever half-truth you can turn into a talking point and parade it. And because it comes from an anointed spokesman of the Left in the mainstream circles, the hedged conclusions get spun into iron laws. The Reuters daily roundup Counterparties puts Krugman atop a summary they call “Farewell to Too Big to Fail.” (On the other hand, I was glad to see Bob Kuttner call Krugman out for this, however gently.)

If Krugman wants to become the President’s mouthpiece in the second term, that’s his business. But doing so by fudging the data is pretty weak.

This is the first I have read about this topic.  I have a feeling that when I read more news, I am going to hear about Krugman and the GAO report in highly favorable terms.  I thought I would post this article on my blog so I would have a record of it as a counterpoint to what is in the MSM.

Randy Wray on Krugman and the Frustration of the Heterodox

Depending on where you start the process of getting to the podcast below, the headline is either Randy Wray on Krugman and the Frustration of the Heterodox or Stephanie Ketlon Talks with Randy Wray.

A broad-ranging discussion of conventional economics and the heterodox alternatives to IS/LM, Ricardian equivalence, etc.

Most economists who have finally come back to the real world after the 2008/2009 economic crash think that we need more government stimulus.   The people who are proponents of Modern Monetary Theory have known this for several decades before the current crisis.  The Neo-Keynesians like Krugman and Summers seem to have come to the realization more recently and perhaps for the wrong reasons.

This podcast explains why it is necessary to understand the correct reasons for why there is agreement on what the short term policy needs to be.  If you get to the right short-term policy by way of the wrong reasons, then you will get the long-term policy all wrong.

One of the things that the MIT philosophy taught me is that it is not enough to come up with the right answer, you need to come up with the right answer for the right reasons.  As I said above, if you come up with the right answer for the wrong reasons, you are very likely to come up with the wrong answer the next time you apply the wrong reasons to solving a problem.

By the way, the Google definition of heterodox is – not conforming with accepted or orthodox standards or beliefs.  It is silly to lump all heterodox economists in one category.  Perhaps there are only a few ways to define what orthodox economists think, but heterodoxy is just everything else.

You can well imagine that heterodoxy can range from the sublime to the ridiculous.