30 Apr 2012

Ron Paul vs. Paul Krugman

Economics, Federal Reserve, Krugman, Ron Paul 62 Comments

Geez, the guy beats me to getting on Leno and the Daily Show, and now this (it starts at 1:05):

Thanks to a bunch of people emailing me / posting on my FB wall about this…

62 Responses to “Ron Paul vs. Paul Krugman”

  1. noiselull says:

    This is exactly why Ron Paul is a lousy spokesman for those who question central banking.

    • zee says:

      come on dude, give the guy a break. he’s really too old to be doing this sort of thing. not really his fault he has run on sentences everywhere.

    • Bob Murphy says:

      not sure what you mean, noiselull. I thought Paul’s opening statement was good, and I literally had to stop it when Krugman pulled the, “Oh come on, you’re living in the world of 150 years ago” card. I will eventually watch it, but I truly had to stop it at that point.

      • noiselull says:

        Keep watching. There’s a reason Daniel Kuehn thinks it’s a victory for Krugman. I’ll take a George Selgin over a hundred Ron Pauls.

        • noiselull says:

          And of course he has to make the mistake of defining the interest rate as the “price of money”.

        • Bob Murphy says:

          Daniel thought Krugman did a better job on the Fed than Ron Paul?! No freaking way!!

          • Bob Murphy says:

            Next you’ll tell me Lew Rockwell thought Ron Paul did a better job.

            • Patch says:

              Everyone always thinks that they are master speakers, and that when on live T.V eloquent prose will flow off their lips.

              Both of them are smart guys, but both of them are better writers than speakers.

              What did you expect Ron and Krugman to talk about, hayekian triangles and is lm graphs?

            • noiselull says:

              He repeated the nonsense about inflation being theft. Even Block and hoppe reject that craziness.
              He portrays Keynesians as monetary cranks who want to print money for investment and consume the rest. That is a total lie.
              Did you notice him sneaking in crazy FRB views?
              And of course, the seigniorage argument, rebutted years ago by Bryan Caplan (admittedly citing statistics):
              http://econlog.econlib.org//archives/2008/03/what_the_mainst_1.html

              • Bob Murphy says:

                Quick question noiselull: The Fed is going to let one person get the printing press next month. You get chosen. I say, “Noiselull, let me have it. Market prices adjust anwyay, so it’s all a wash. Your wages will compensate.” You would agree, right? You’d let me print the $100 bills, rather than yourself?

              • noiselull says:

                Even Daniel Kuehn doesn’t deny that inflation redistributes income. But the idea that it is a significant source of income is absurd. See the Caplan post linked.

              • Major_Freedom says:

                “Significant” is the escape hatch that the inflationists reserve to themselves to judge how the inflation should be spun.

                It’s not significant! According to what? According to me silly!

              • Major_Freedom says:

                And of course, the seigniorage argument, rebutted years ago by Bryan Caplan

                He didn’t rebute it, he only said it is “little”. Well who cares what his conception of little or big are, the point is that it exists.

                Just look at real wages since 1971, and tell me how that “little” that seigniorage is working out for you.

              • Bob Murphy says:

                Also, I wouldn’t mind getting paid 3% of the federal budget each year. I’m pretty sure that’s more than I make working for a living.

                Also, if you follow the link, it’s referring exclusively to expansions of the monetary base, *not* to bank credit expansion.

          • Beefcake the Mighty says:

            noiselull deserves the “no shit, dick tracy” prize here

        • J. W. says:

          “There’s a reason Daniel Kuehn thinks it’s a victory for Krugman.”

          Um, because he’s Daniel Kuehn and he thinks everything is a victory for Krugman?

        • Bob Murphy says:

          It would be ironic if next week, somehow noiselull is in Logan Airport snowed in, and a bunch of pregnant women go into labor. He looks around, hoping there are a hundred OB-GYNs in the terminal, and up steps…George Selgin.

          • Major_Freedom says:

            Yeah, then in exchange for delivering the babies, Selgin will demand that whenever the mothers leave their babies unattended, it’s carte blanche permission for the landlords to lend the babies out to other parents who want to increase their baby balances.

            • anonymous says:

              I can’t stop laughing.

          • noiselull says:

            Can’t do that. Think more carefully. Given the choice between one hundred ron pauls and another Selgin, I’d pick the Selgin.

            • Mr. Magoo says:

              Hunderd Ron Pauls can fit a US senate.

        • Major_Freedom says:

          I watched the whole thing, and I don’t see how it’s a victory for Krugman. He wants to take us back to 300 AD policies.

          • Dan says:

            That was my favorite line.

          • Bob Roddis says:

            I love the Keynesians. I really do. They are always telling me that I want to go back in time AND that the system I propose HAS NEVER BEFORE EXISTED IN HUMAN HISTORY.

            When I hear that, I mark it down as another win for the good guys.

            • Major_Freedom says:

              That’s a good one, I didn’t even notice that. You’re right, they do say both of those things.

              At least we got them all nailed with the 300 AD emperor Diocletian monetary policy.

              “You want to take us back to ancient Rome!”

              Hahaha, so satisfying.

        • Richie says:


          There’s a reason Daniel Kuehn thinks it’s a victory for Krugman.

          Probably because DK is a member of the cult of Krugman.

          • Mr. Magoo says:

            Reading the comments DK leaves, make me feel that he is really dogmatic and that he ignores things right in front of him bacause they don’t fit in his worldview.

            But there are plenty of people guilty of that.

            • Beefcake the Mighty says:

              He’s actually a Keynesian lawyer. Most people can only talk out of both sides of their ass, he can talk out of all three.

            • MamMoTh says:

              But there are plenty of people guilty of that.

              All the regular commentators on this site.

    • Richard Moss says:

      This is exactly why Ron Paul is a lousy spokesman for those who question central banking.”

      Right. Before Ron Paul came on the scene a lot more people questioned central banking.

      • noiselull says:

        The people who questioned it were largely real scholars of the Free Banking school. Today, almost all of the questioners are kooks who listen to Alex Jones and climate science is a giant hoax.

        • Dan says:

          Man, are you the leader of the George Selgin fanboy club or something? What’s your problem?

        • Major_Freedom says:

          “Largely” is yet another escape hatch you use to reserve for yourself who did and did not question central banking.

          Hayek, Mises, and Rothbard not only questioned, but refuted the entire intellectual edifice of, central banking, far earlier than Selgin in the 1980s.

          Hoppe demolished Selgin/White’s free banking craziness.

        • Richard Moss says:

          Today, almost all of the questioners are kooks who listen to Alex Jones and climate science is a giant hoax.

          So above when you said Ron Paul is a lousy spokesmen for people who question central banking you were really saying he is a lousy spokesman for all those kooks who also listen to Alex Jones.

    • Dan Hewitt says:

      I thought Ron Paul did well. But I kind of get what y ou’re saying. I spent the whole time praying he didn’t say anything dumb.

      However, Krugman is not a very good debater, and says lots of silly things himself. And his peculiar body language makes him less convincing than he otherwise would be.

  2. rayray says:

    Ron Paul comes off as scattered, perhaps. Krugman is calmer, but he speaks entirely in platitudes.

  3. Jeremy R. Hammond says:

    Ron Paul vs. Paul Krugman, the book: http://www.amazon.com/dp/B007QHMEUO

  4. prakgf says:

    Why doesn’t he just mention the debate that you have challenged Krugman to?

  5. Bob Roddis says:

    If D-Kuehn endorses an idea, you know he must be right.

    If we’re going to use words like “theft” to describe a PERFECTLY VALID MONETARY SYSTEM, perhaps we should apply it to the theft of people’s employment. Does it make sense? No, I don’t think so. I’d rather just not use words like “theft”.

    Conclusion: Fiat funny-money creation is theft.

    http://tinyurl.com/6ugoqo8

  6. Bob Roddis says:

    Likewise, I consider Glenn Greenwald to be fantastic asset in exposing the US headlong rush into totalitarianism.

    Glenn Greenwald bothers me in a really deep, genuine way……and I’m always a little shocked that a lot of people don’t see it that way.

    http://factsandotherstubbornthings.blogspot.com/2012/04/glenn-greenwald-bothers-me-in-really.html

    D-Kuehn’s reaction to Greenwald proves my insight to be true.

  7. Bob Roddis says:

    Bloomberg TV made a big deal of this “debate”. I started recorded after the debate ended but later noted that Bloomberg was scrolling Paul and Krugman quotes from the debate (about 5 rotating quotes each) for the next two hours during their other business roundup shows.

    The UK Guardian was excited too:

    http://www.guardian.co.uk/world/us-news-blog/2012/apr/30/paul-krugman-ron-paul-economics

    I got in a comment there and someone else provided a link in the comments to the Krugman/Murphy debate.

    All in all, things went just fine.

  8. Dan Hewitt says:

    Krugman just declared in-person debates to be “useless”. And, of course, he shows his trademark fairness to his opponents’ position by summarizing Paul’s argument as “Gah gah goo goo debasement! theft!”

    http://krugman.blogs.nytimes.com/2012/05/01/on-the-uselessness-of-debates/

    • Bob Roddis says:

      This “debate” is just another victory for the good guys. Clearly, Krugman either has no familiarity whatsoever with Austrian concepts and writings or he’s a monstrous liar. His line about going 150 years back in time purposefully ignores the detailed narrative that I’ve heard from Austrians for 40 years (including Ron Paul in “End the Fed”) that the problems of the gold standard 150 years ago were caused by fractional reserve banking which Ron Paul opposes. Further, after WWII, the government was still significantly restrained by the existing gold exchange regime pre-1971 and we were not yet suffering from the massive expansion of the “Great Society”.

      I just found my old yellowed copy of Hazlitt’s “Economics in One Lesson” from 1974. My scribbled notes in the back remind me that I instantaneously understood the concept of how the recipients of new fiat funny-money are stealing purchasing power from those holding the existing money. I’m two years older than Krugman and he apparently was in college when I was in college. He’s never heard of that before? He’s never thought about that before?

      http://www.flickr.com/photos/bob_roddis/6983691614/in/photostream

      Further, I’m sick of people fussing about various CPI predictions while ignoring the central concept of Austrian thought, the distortion of the pricing process and economic calculation as the result of Keynesian-style policies. That Krugman ignores the central concept of Austrian thought is telling.

      If people are going to buy into Krugman’s nonsense then things are hopeless anyway. But informed and fair-minded people can and will see Krugman for what he is. He’s the most important and famous Keynesian in the entire galaxy and yet he feels it is necessary to resort to lies and obfuscation when attacking the Austrians. And does so the very next morning after the “debate”.

      We won.

  9. J Cortez says:

    I love Ron Paul, but this was not a good appearance. Not bad, but not good.

    Basically, on theory and foundations Ron Paul is correct, but he’s generally not a good speaker and in a debate his message tends to get more scattered than usual. Krugman is horrible on theory and policy, but he was better in this encounter. As much as I consider him wrong, I felt Krugman had a better more coherent message here.

    I would’ve liked to see something like our man Bob Murphy vs Krugman, that would be interesting and entertaining. And I agree that if I wanted Krugman to totally get his ass kicked on the Fed and monetary policy, George Selgin would have to be our guy.

    • Major_Freedom says:

      “Oooh, I am going to vote for that guy because I like his hair.”

    • Mr. Magoo says:

      “And I agree that if I wanted Krugman to totally get his ass kicked on the Fed and monetary policy, George Selgin would have to be our guy.”

      Or Bob Murphy?

      • J Cortez says:

        Re-read my comment, please. :)

        I said Murphy vs Krugman would be entertaining and interesting, but Selgin would be the better person against Krugman on those topics.

        On the topics Krugman covered, obviously I think Murphy would win. But Selgin vs Krugman, would be harsher for Krugman. Everybody has a specialty, right? If the debate was vs Krugman on Great Depression, Oil, or privatized law, Murphy would be the better choice. As intelligent, funny, and great guy I think Murphy is, Selgin is still the better scholar on Fed and money.

  10. Mr. Magoo says:

    I hate to say it, but I think Krugman had a point about people using the dollar, it isn’t only because it is legal tender. In the Netherlands, were I live, investment gold is not subject to VAT (or any kind of sales tax), wich not only includes gold bars but also includes gold coins if the coins meet certain requirements.

    I see one downside of the gold standard that people who favor it rarely discuss, namely that a gold standard would draw plenty of resources to gold mining (wich you then can view as a kind of expensive money printing). Wich I imagine would be a burden for the rest of the economy because there would be less resources for welfare enhancing production.
    I admit that I don’t know how large such a burden would be, but I fear that it might be rather large.
    Wich in mine view is rather wasteful because most of the gold will be then put into vaults to be lay idle and if necassery redeemed. Or do people imagine some kind of other gold standard.

    I must admit however that I am presently investet in gold out of fear of euro inflation. But that doesn’t mean I favor a gold standard.

    • Casual Reader says:

      Just curious, can you pay your taxes with gold in Netherlands? or price the products shops sell in gold? If you can’t see in theory the force the states use to protect their money monopoly maybe you should try it in practice, and go and implement and alternative money. I bet you will find then more accurately if Krugman had a point or not about the use of the dollar.

      Also, Ron Paul was talking about money competition not gold standard. Allow the market to use the monies people think fit, IN EQUAL FOOT with your legal tender paper.

    • Major_Freedom says:

      What about income gold? Like if an employer paid his employees in gold? Would he have to pay a payroll tax in Euros?

      I see one downside of the gold standard that people who favor it rarely discuss, namely that a gold standard would draw plenty of resources to gold mining (wich you then can view as a kind of expensive money printing). Wich I imagine would be a burden for the rest of the economy because there would be less resources for welfare enhancing production.

      The fact that a gold standard, a 100% reserve gold standard, would minimize if not eliminate the business cycle, where I would argue trillions of dollars worth of resources have been squandered since 1913, means that the costs of fiat money far exceed the costs of gold mining.

      Wich in mine view is rather wasteful because most of the gold will be then put into vaults to be lay idle and if necassery redeemed.

      Idle gold is still gold being used. All money has to have use as a storage of value, or else it cannot even function as gold. If some gold is hoarded, it won’t make everyone else poorer, because the value of circulating gold would go up, making everyone else richer. It would be equivalent to you learning that for the last 50 years, there has been a secret stash of $100 trillion US dollars stored in a vault, and then believing that the world is far poorer because the owner didn’t spend it.

      Money spending is not what brings prosperity. Yes, it’s hard to grasp this because as an individual, you’re so used to equating more money with a higher standard of living, but in the aggregate, in the economy as a whole, additional money into the economy doesn’t make people in general better off. It just redirects resources, changes relative prices, and raises general prices.

      I must admit however that I am presently investet in gold out of fear of euro inflation. But that doesn’t mean I favor a gold standard.

      Actually it does mean that, because you find gold to be more valuable than Euros, when you have the choice on what to accept to store purchasing power. If the legal tender laws in Europe were abolished, if there was free competition in money, the fact that you are storing gold is you acting in accordance with gold remonetization.

      Suppose you had the choice:

      1. Store a commodity that declines in purchasing power by 5% per year; or

      2. Store a commodity that rises in purchasing power by 2% per year.

      All else equal, what would you choose?

      If you chose 2., then you would choose gold in a world of currency competition.

      • Mr. Magoo says:

        “What about income gold? Like if an employer paid his employees in gold? Would he have to pay a payroll tax in Euros?”

        Probably yes, he would have to pay it in euro’s. It would be seen as non-monetary compensation by the taxman and taxed at the same rate as monetary.

        “The fact that a gold standard, a 100% reserve gold standard, would minimize if not eliminate the business cycle, where I would argue trillions of dollars worth of resources have been squandered since 1913, means that the costs of fiat money far exceed the costs of gold mining.”

        Ok, suppose it would eliminate all buisiness cycles. How do you then know if it wil bring net savings or not, in terms of resources, do you have an estimate? I actually don’t know, just asking.

        “Money spending is not what brings prosperity. Yes, it’s hard to grasp this because as an individual, you’re so used to equating more money with a higher standard of living, but in the aggregate, in the economy as a whole, additional money into the economy doesn’t make people in general better off. It just redirects resources, changes relative prices, and raises general prices.”

        Yes, I agree, I didn’t view money spending as bringing prosperity.

        “Idle gold is still gold being used. All money has to have use as a storage of value, or else it cannot even function as gold. If some gold is hoarded, it won’t make everyone else poorer, because the value of circulating gold would go up, making everyone else richer. It would be equivalent to you learning that for the last 50 years, there has been a secret stash of $100 trillion US dollars stored in a vault, and then believing that the world is far poorer because the owner didn’t spend it.”

        I also agree with the above point. I don’t believe that hoarding makes anyone poorer, it just makes the money left in circulation worth more, until the moment it is dishoarded.

        However I don’t mean idle in the sense that is isn’t used as payment (I don’t think gold would physically move much with a gold standard, probaly only ownership would change most of the time I quess) or savings.

        I mean idle, in the sense that it isn’t used in industry or consumer goods. Dollar’s or euro’s motly just exist virtually, with little costs of creation or storage. The gold will just sit in the vaults looking pretty and smiling to the people who move it or guard it.

  11. Mr. Magoo says:

    By the way did Krugman adress Paul’s point about the end of Wold War 2? And when Krugman talks about stability, what is that about, has he forgotten al the recessions that took place after the creation of the Fed, including the present one?

  12. Robert Fellner says:

    Krugman relied on his superior public speaking skills and the ignorance of the general public for his condescending tone and flippant dismissal of Ron Paul’s many valid points.

    One very clear example of this is when Ron Paul correctly noted that it is illegal to use gold/silver as money in the U.S. Krugman then replied in a mocking tone that that is not true and you are free to do so, barter etc.
    Von NotHaus was labeled as a domestic terrorist by the United States Federal Bureau of Investigation in 2011.

    And believe me, the last place you want to be “labeled a terrorist” is in a country that denies you due process, uses torture, and murders you at the whim of the ruling regime.

    “Bernard von NotHaus, 67, was convicted today by a federal jury of making, possessing, and selling his own coins, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina”

    http://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency

    So to be discussing monetary policy of a country, while so ignorant of the laws regarding money and currency, seems to be a problem.

    Other than simply sounding more knowledgeable, Krugman did not even attempt to advance on argument justifying his beliefs. He just asserted them as dogma and unquestionably true, “because governments have always controlled money.”

    That is not an argument. As a Nobel Laureate you would think he would be familiar with other Nobel Laureates whom have specifically elucidated the reason behind government control of money, and perhaps form some type of argument as to why government control is best.

    • Major_Freedom says:

      Krugman is a puppet, nothing more.

  13. Yosef says:

    Ron Paul won by so much that Krugman now says all public debate is stupid: http://krugman.blogs.nytimes.com/2012/05/01/on-the-uselessness-of-debates/

    The debate over who won the is moot, Krugman clearly thinks he lost.

  14. Nikhil says:

    The fact that Ron Paul is getting a chance to debate the establishment is huge. I thought he was great too.

  15. Gavin says:

    Don’t try paying your employees in gold or silver, the goon squad will show up: http://www.stgeorgeutah.com/news/archive/2012/03/26/use-real-money-go-to-federal-prison/

  16. kavram says:

    Glad they did this but kind of unfair to pin an academic against a politician when discussing economic theory. As smart as Dr. Paul is, he’s pretty much helpless at winning an audience against someone who has a PhD in the topic being debated.

    I see this as even more evidence that Krugman’s afraid to debate you – rather than allowing a large donation going to a food bank by accepting your challenge, he’s decided to go head to head against an aging politician. So much for his “I don’t have time to debate an Austrian” excuse…

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