01 Mar 2013

Krugman Judges People on Their Record

Krugman 175 Comments

The average person on the Internet can’t hold more than 2 thoughts simultaneously, but I think Free Advice readers are above average. I have to go pack for my trip, so let’s see if you can divine my point in this post:

(1) Today Krugman returns to a familiar theme:

Joe Weisenthal is wrong. He writes that the unfolding economic disaster in Europe is what everyone predicted. Not so. It’s what he predicted, it’s what I predicted, but it’s not at all what many people were predicting. And the people who got it completely wrong happen to be the people still running European economic policy.

Readers sometimes complain about my frequent references to the things my friends and I got right, and others got wrong. But look, it’s not ego (or anyway it’s not just ego). Predictions are how you judge between models. If the world delivers results that are very much at odds with what your framework says should have happened, you’re supposed to reconsider your framework — as I did, for example, after I was wrong about interest rates in 2003.

Yet European leaders seem determined to learn nothing, which makes this more than a tragedy; it’s an outrage.

(2) Two days earlier, Krugman wrote:

In discussing fiscal policy, I’ve been fond of quoting St. Augustine: “Grant me chastity and continence, but not yet”. Trying to slash the deficit while the economy is still up against the zero lower bound is a really bad idea, because it will depress the economy further and hurt both growth and revenue.

But hey, I’m a crazy economic hippie, whom nobody agrees with — except, well, the chairman of the Federal Reserve. Allowing for the constraints of rhetoric that come with his position, Ben Bernanke’s testimony today was highly Krugmanesque…

Of course, credentials aren’t dispositive here; Bernanke could be all wrong, failing to understand that if we don’t slash spending now now now we’ll turn into Greece, Greece I tell you. But these remarks should give pause to all the people who imagine that “nobody” except me and a couple of other crazies think that we’re paying far too much attention to short-term deficits.

(3) Bernanke tells us what his model predicts, over the years:

175 Responses to “Krugman Judges People on Their Record”

  1. William Anderson says:

    But hey, I’m a crazy economic hippie, whom nobody agrees with — except, well, the chairman of the Federal Reserve. Allowing for the constraints of rhetoric that come with his position, Ben Bernanke’s testimony today was highly Krugmanesque

    Wow. So Paul Krugman, the most quoted economist on the face of the earth, the guy on all the talk shows, the man who is invited to speak all over the country really is an obscure economist forced by ignorant people to shout into an empty room.

    And what is that message that no one will obey? Why, it is the message of inflation and massive government spending, along with having central banks buy bonds and other assets to prop up their prices. And what actually is happening? We see the Fed doing everything it can to force up asset prices (we pay for those with our declining incomes), inflation is running through the economy, governments are spending like mad, and central banks are buying sovereign bonds along with private securities.

    So, this is being ignored? The guy really is dishonest. Dishonest.

    • Lord Keynes says:

      (1) “Wow. So Paul Krugman… is an obscure economist forced by ignorant people to shout into an empty room.”

      No, Anderson, Krugman is being facetious with his “crazy economic hippie” remark.

      Perhaps humour can escape blockheads.

      (2) and, as it happens, most nations are not following Krugman’s actual advice: use a high level fiscal stimulus to drive the economies back to full employment.

      • Major_Freedom says:

        No LK, Krugman is not being facetious. Perhaps heroes being idiots escapes their followers.

        As it happens, nations ARE using “high” fiscal stimulus. But don’t let that stop you from turning it into a subjective, ephemeral term that is always greater than the stimulus in “poorly” (another subjective, ephemeral term you like) performing countries.

    • Tel says:

      I would say “crazy economic hippie” is designed to make him sound more appealing to his readers, who tend to be fond of crazy hippies.

      At least, that is to say they are fond of the idea of being fond of crazy hippies, provided they never have to put up with a real hippy on the couch.

  2. Jonathan Finegold says:

    Does (3) mean that Bernanke should go from ~70% Keynesian and %30 Monetarist, to 65% Keynesian, %25 Monetarist, and 10% Austrian? (If we’re updating our priors according to Bayes’ rule…)

    • Lord Keynes says:

      In fact, we know Bernanke was strongly influenced by Friedman’s monetarism before his appointment as Fed chairman; even though he is broadly put in the New Keynesian camp, that may be misleading.

      • Major_Freedom says:

        Wicksellian interest rates.

        Walrasian equilibrium.

        Knightian uncertainty.

        Rothbardian utopia.

        Keynesian stimulus.

        now we can add

        Friedmanian Bernankism.

        Ideas abstracted from individuals = worry for LK, because then he can’t tiptoe around the ad hominem statue.

    • Daniel Kuehn says:

      “If we’re updating our priors according to Bayes’ rule”

      Hey!

      You know this is a Bayes-free zone!

      • Ken B says:

        Why? Is this an inside joke I don’t get?

      • Major_Freedom says:

        Yes, because if we know one thing, it’s that Austrian econ is not based on anything remotely resembling an a priori to experience school of thought.

  3. Lord Keynes says:

    Bernanke can have changed his views over the years – many economists have, even Austrians after their disastrous hyperinflation hysteria – so all your video proves is that Bernanke was wrong about the housing bubble.

    Actually, other New Keynesians like Robert Shiller did call the housing bubble, and plenty of heterodox Keyensians did too, as well as predictions of coming economic crisis:

    http://socialdemocracy21stcentury.blogspot.com/2011/12/austrians-predicted-housing-bubble-but.html

    • Major_Freedom says:

      What hyperinflation hysteria from which Austrian economists?

      Crickets…

      • Ken B says:

        “Crickets…”

        Is that the sound of hyper inflation?

      • Lord Keynes says:

        First, Austrian pundits:

        (1) Schiff and Marc Faber. The latter predicted hyperinflation as a 100% certainty.
        http://socialdemocracy21stcentury.blogspot.com/2013/02/remember-this.html

        (2) Ron Paul:
        http://www.thestreet.com/story/11041675/1/ron-paul-predicts-hyper-inflation-says-dollar-will-be-rejected-as-reserve-currency-of-the-world.html

        Economists:
        (2) Let’s not forget Robert Murphy. He predicted something MORE than just stagflation: he predicted right here in his own words “worst price inflation in US history”:

        “What is perhaps worse, laid on top of the stalled output in goods and services, I predict Americans are in store for the worst price inflation in US history. Just as stagflation referred to the combination of high unemployment and price inflation rates in the 1970s — something Keynesians thought was impossible — we can use the term hyperdepression to refer to the mix of hyperinflation and a serious recession in real output. In the remainder of this article I’ll explain my pessimistic outlook.”

        http://mises.org/daily/3488

        (3) Gary North raises hyperinflation as strong possibility:

        “The Federal Reserve and its allies — virtually the entire intellectual class — use this fear to maintain its position as the quasi-public bureaucracy in charge of America’s money. It lured the nation into the lobster trap of debt — debt undergirded by Federal Reserve fiat money and congressional deficits — and the country cannot see a way to get out on a pain-free basis. There is no pain-free escape, as we will find over the next two decades: hyperinflation or the Great Deflationary Default or both.

        The government’s debt and the monetary inflation cannot go on indefinitely. Either the dollar dies or else the debt is repudiated. Maybe both.”

        http://mises.org/daily/6175/How-to-End-the-Fed-and-How-Not-To

        • Ken B says:

          Ahhh, evidence. Don’t you know this is an a priori board LK?

          • Major_Freedom says:

            Except none of them are evidence.

            • Ken B says:

              A quote of Bob predicting inflation is not evidence that Bob predicted inflation?

              You keeping using the word evidence. I do not think it means what you think it means.

              • Major_Freedom says:

                Hyperinflation Ken B.

                Hyperinflation.

                That was the original challenge.

                Context. I do not think it means what you think it means.

              • Ken B says:

                LK referred to hyperinflation hysteria and MF scoffed with “What hyperinflation hysteria from which Austrian economists?
                Crickets…”

                Then LK responded with quotes – evidence – proving his claim. I then commented about LK providing evidence *of his claim.*

                Now MF seems to demand of me (and LK) evidence for hyperinfation!

              • Major_Freedom says:

                Yes, how dare me dismiss predictions containing “inflation” after I asked for predictions of hyperinflation.

                If I asked for evidence of statements containing holes in the ground, Ken B would probably drop his pants and point to his ass and say “See?”

              • Lord Keynes says:

                Further evidence:

                (1) Schiff 2008:

                Peter [Schiff]: I am not sure. The road ahead will be filled with many potholes and include some important forks. Since I do not for sure which ones we will follow, I prefer to invest abroad until our path is more certain. As it stands now, we are headed to a hyperinflationary depression. I hope we will choose a different path before we actually get there.

                http://archive.mises.org/8039/interview-with-peter-schiff/

                (2) Faber 2009:

                “I am 100 percent sure that the U.S. will go into hyperinflation,” Faber said.

                http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avgZDYM6mTFA

                (3) Doug French 2009:

                “So instead of allowing the market to provide a healthy cleansing deflation, the Fed, the Treasury, and bank regulators are fighting valiantly to keep the fractional-reserve-bubble machine operating, with the ultimate result likely to be inflation and possibly hyperinflation.
                http://mises.org/daily/3653

                Also, a historic gem, Ron Paul predicts hyperinflation.. in 1981:

                http://ronpaulsurvivalreport.blogspot.com/2008/02/shocking-news-ron-paul-predicts.html

              • Ken B says:

                The question MF is not whether LK is right, but whether I am. I noted LK provided evidence for his claims. He did. You don’t find the evidence convincing. Fine. It’s still evidence. Evidence does not have to be conclusive to be evidence. We have evidence you are Tex Avery; we do not have proof; it convinces some of us, but not I expect all.
                If evidence were proof we wouldn’t need trials.

              • Major_Freedom says:

                No Ken, if you say LK is “right” in his “evidence”, then you have taken up the same position, in which case you open yourself up to the same critique as well.

                If I wanted evidence that there are apples in the pie, then you showing me a box of crackerjacks, while you might believe it is “evidence, but not conclusive evidence”, I’ll say it is not evidence.

                Evidence is information that reveals and determines truth. It isn’t random information that you label as such.

                I have asked for examples of Austrian economists who have predicted hyperinflation, and as I noted, I should have included “by now” since I forgot that LK was insinuating that Austrians have predicted hyperinflation “incorrectly” (which means there is a time frame associated with it).

                He did provide an example of Marc Faber predicting hyperinflation, but Faber didn’t give a time frame, so he has not been falsified.

                The other two examples of Ron Paul and Murphy, are not examples of predictions of hyperinflation at all, let alone predictions of hyperinflation by now.

                If you want to call those examples “evidence” that I asked for, then again, you might want to be sure which is a hole in the ground and which is not.

              • Major_Freedom says:

                I think what is happening here is that you are trying to change what you mean by “evidence” as you go along.

                First you rhetorically asked:

                “A quote of Bob predicting inflation is not evidence that Bob predicted inflation?”

                Then after you realized I had asked for evidence of “hyperinflation” instead, you are now saying that all you did was say that LK provided “evidence” in the new, altered definition that simply means “data that is tangentially relevant” or whatever.

              • Ken B says:

                I didn t say LK was right, I said he presented evidence. That’s a strange comncept to many here. You for instance.

              • Major_Freedom says:

                I didn’t say you said LK was “right” (even though you did originally think he was right, which has since been clearly altered after you realized the request was for examples of hyperinflation predictions), I said that you think his belief that he provided evidence, is “right”.

                Do you not know the difference between inflation and hyperinflation?

                Or do you, but you just refuse to admit that you were wrong about whether or not LK provided the hyperinflation evidence I asked for, and are just trying to weasel your way out of it through semantics, both through mangling the meaning of “evidence”, and now quibbling over the meaning of “right”?

              • Major_Freedom says:

                Ken B:

                “Then LK responded with quotes – evidence – proving his claim.”

                You originally believed LK’s evidence proved him right. That’s isn’t a disinterested, “I am only saying that LK provided evidence” comment.

              • Ken B says:

                OK MF, you are right on that last one. After about 50 go-rounds I misspoke. Amend to LK provided evidence bolstering his claim.

              • guest says:

                Krugman worries about hyperinflation, too:

                Debt in a Time of Zero
                http://krugman.blogs.nytimes.com/2013/01/02/debt-in-a-time-of-zero/

                It’s true that printing money isn’t at all inflationary under current conditions — that is, with the economy depressed and interest rates up against the zero lower bound. But eventually these conditions will end. At that point, to prevent a sharp rise in inflation the Fed will want to pull back much of the monetary base it created in response to the crisis, which means selling off the Federal debt it bought.

                Krugman just thinks we can avoid the “sharp rise in inflation”; The Austrians are saying we can’t.

                … Unless we default, of course. You don’t have to worry about printing money for a debt you don’t intend to pay.

                And you can’t say that the taxpayers owe anything, since the Fed just printed the money out of thin air.

                The taxpayers don’t owe jack to the Fed, and that leaves either a “sharp rise in inflation” or default.

            • Lord Keynes says:

              (1) Robert Murphy 2009:

              “We who are advocates of sound, free-market money need to get our story straight. Are we predicting hyperinflation or massive deflation? Personally, I am much more worried about the former problem.

              https://mises.org/daily/3541

              (2) Faber 2010:

              “HRN: Do you think hyperinflation in the US is possible?

              Dr. Marc Faber: The Federal Reserve doesn’t want to create a hyperinflation. I mean Mr. Bernanke may be incompetent, but he’s not an evil person per se. He just doesn’t have sufficient knowledge to be a central banker, in my opinion, and has misguided economic theories, but he’s not evil in the sense that he would not wish to debase the currency entirely. Clearly, if the US economy moves into a double dip recession and you have deflationary pressures reappearing, in the housing market, for example, and if the S&P drops from roughly 1,100 down to say 900, then I think further monetization will happen. I believe that because of the unfunded liabilities and the deficits of the US government, which will stay high for a long time; sooner or later there will be more monetization anyway.

              It’s more a question of when it will happen rather than if it will happen. For sure it will happen but will it happen right away, say in September, or maybe only in two years time?

              http://mises.org/community/blogs/hera/archive/2010/09/23/interview-dr-marc-faber-on-the-federal-reserve-and-hyperinflation.aspx

              • Ken B says:

                LK, you could show Bob doing a hyperinflation karaoke and it wouldn’t convince MF, since maybe Bob meant a trillion years hence. Murphology is a deductive science!!

              • Major_Freedom says:

                (1) No prediction of hyperinflation.

                (2) “For sure it will happen”, but he didn’t say when.

              • Major_Freedom says:

                “LK, you could show Bob doing a hyperinflation karaoke and it wouldn’t convince MF, since maybe Bob meant a trillion years hence. Murphology is a deductive science!!”

                What an ignorant statement.

              • Major_Freedumb says:

                I find it even more ignorant how you resort to blind tautologies and assumptions to disprove LK’s wide range of evidence. You are so intellectually dishonest. Take a walk, MF.

              • Ken B says:

                And on cue we get the didntsaywhencouldbeatrillionyearsfromnow.

              • skylien says:

                Hey Ken,

                Can’t you just say, that well yes they didn’t make a specific prediction that could be measured, but they used hyperinflation that anytime could hit as scare mongering?

                I mean they clearly didn’t make a prediction of hyperinflation for a specific time frame. How hard can it be to stick to the actual things they say?

                Well and if you read Krugman you know that even he knows that potentially hyperinflation is possible as well at some point. The only difference is that Krugman thinks you can exit, while Austrians think you cannot. They think the leeway is getting smaller and smaller and at some point something’s got to give. But they can’t tell when!

                This believe should make it clear why they say you will see massive inflation or a huge depression (depending on what politicians and CBs actually will do) while at the same time assuming that politicians and CBs will not let the depression happen, leaving only one possible outcome (according to their believe) open.. Hence their predictions of massive inflation/hyperinflation with no clear time frame… Of course as Keynesian you might call it scare mongering. This is perfectly fine given their theory.

                It is not that complicated: Keynesians think they can control it and exit without much trouble, Austrians don’t.

              • skylien says:

                Oh and btw even this is a too general view of the “Austrians”. I remember reading a paper from Mises.org that argued specifically that neither high inflation nor high deflation will happen in the immediate future, so it was in your view specifically not scare mongering. However I cannot find it yet.

                What I found is an example arguing against the inevitability of hyperinflation. Here is Gary North saying:
                “This is why I am not persuaded by those people who say that hyperinflation in the United States is inevitable. I don’t think it is. I think default is inevitable, but I don’t think it needs to be default by hyperinflation. That is because the government cannot get out of its obligations by fiat money. It cannot default by using hyperinflation, because hyperinflation will only last a few years, but the obligations last for the next 75 years.”

                http://mises.org/daily/6159/Hyperinflation-Is-Not-Inevitable-Default-Is

              • Ken B says:

                Skylien, I think LK noted Bob had a timeframe in mind, but lets sacy he didn’t. Ditto for the others. Isn’t that a clearer example of being a bit hysteria minded? We are discussing a vaccine program say, and I start on about mutant Ebola. I have no timeframe or grounds to predict other than the general point that its conceivable and errors happen. Am I not being a bit hysterical?

                I’m not saying Bob did this. bob made real predictions and lost real bets. I am saying MF’s mantra undercuts his own argument. Vague scare mongering is not a sign of sober serious debate!

              • skylien says:

                Ken,

                1: Bob didn’t lose a bet on predicting hyperinflation! MF was not arguing that Bob didn’t lose this bet, did he?

                2: I said that it depends on the viewpoint, does it not? It is not just a vague baseless prediction that it happened already to someone in history, only in terms of time it is vague! I repeat. The only real difference between Krugman and the Austrians in this respect is the former believes you can exit; that fiscal and monetary policies can juice the economy and when you finally pull the plug that magically there is a strong sustainable structure of prices and capital etc in place so that the anti stimulus (the exit!) doesn’t hurt anymore.

                How likely do you think is the possibility to wind down the FED’S balance sheet without causing a depression? Are you sure it can?

                Is it really unreasonable and insane to believe the FED cannot do that? Only then would it be insane to warn of hyperinflation or a depression that some day down the road may happen.

                Those things play out over decades. Yet that doesn’t mean you should ignore it or that it never happens.

                However I agree I would like to see Faber and others to emphasize more that although things could move fast, that it might also take very very long.

              • Major_Freedom says:

                Major_Freedumb:

                “Major_Freedumb at
                I find it even more ignorant how you resort to blind tautologies and assumptions to disprove LK’s wide range of evidence.”

                He didn’t cite the evidence that I asked for, other than a partial evidence of Faber, who actually did predict hyperinflation, but he didn’t say by 2013.

                “You are so intellectually dishonest. Take a walk, MF.”

                How about no. Awww.

                Ken B:

                “And on cue we get the didntsaywhencouldbeatrillionyearsfromnow”

                I don’t see the problem here. Are you saying that hyperinflation will never take place in the US? If you say it won’t happen, or if you say it will happen, then you would be making the same type of prediction as Faber.

                If you say it “could” happen, then you’re actually making a prediction as contentless as the one you believe Faber is making.

              • Major_Freedumb says:

                Here is some more solid evidence that you are wrong.

                http://youtu.be/_vgGyqtsY-Y?t=1m48s

                Peter Schiff is still going about his hyperinflation BS.

                Checkmate.

              • Major_Freedumb says:

                And before you pull a fast one on me, take special note that this was about a month ago back in 2/13/2013.

                A broken clock is right twice a day and you don’t seem to understand that.

              • Major_Freedom says:

                Major_Freedumb:

                “Here is some more solid evidence that you are wrong.”

                This presumes that you have shown evidence that I was wrong a first time.

                “http://youtu.be/_vgGyqtsY-Y?t=1m48s”

                “Peter Schiff is still going about his hyperinflation BS. Checkmate.”

                That video is not of Schiff predicting hyperinflation, nor hyperinflation by 2013. Schiff is saying the Fed is going to have to eventually raise interest rates if it wants to avoid runaway inflation.

                Checkmate? More like you cheated because you believed a Pawn is a Queen, and you don’t even understand the English language.

                “And before you pull a fast one on me, take special note that this was about a month ago back in 2/13/2013.”

                Pull a fast one? Please tell me the other instances of you doing that yourself.

                “A broken clock is right twice a day”

                So are overused cliches that don’t apply.

              • Major_Freedumb says:

                My point has still been proven. Schiff is still claiming that all this “money printing” will lead to hyperinflation, and I quote:

                “So now there’s even more pressure to sell them, there’s even more upward pressure on interest rates, which means the Fed has to print even more money to keep them artificially low, and eventually it can’t do it anymore. Either it has to let interest rates skyrocket and prevent the dollar from collapsing completely, or it continues to print to keep interest rates low as long as possible and in the process completely destroys the dollar and you have hyperinflation.”

                We’re in QE3 and I still don’t see this imaginary hyperinflation threat anywhere.

              • Major_Freedom says:

                Major_Freedumb:

                “My point has still been proven.”

                Your point wasn’t proven a first time, how can it possibly “still be proven”?

                “Schiff is still claiming that all this “money printing” will lead to hyperinflation”

                No, he is claiming that if the printing continues the way it has in the recent past, then there will be hyperinflation.

                He also said, in the very video you posted, that the Fed is going to likely raise rates because it will likely want to avoid hyperinflation.

                “and I quote:
                “So now there’s even more pressure to sell them, there’s even more upward pressure on interest rates, which means the Fed has to print even more money to keep them artificially low, and eventually it can’t do it anymore. Either it has to let interest rates skyrocket and prevent the dollar from collapsing completely, or it continues to print to keep interest rates low as long as possible and in the process completely destroys the dollar and you have hyperinflation.”

                That isn’t a prediction of hyperinflation.

                “We’re in QE3 and I still don’t see this imaginary hyperinflation threat anywhere.”

                What prediction of hyperinflation?

            • Major_Freedumb says:

              Who the heck is Tex Avery?

              • Major_Freedom says:

                Imitation is the sincerest form of flattery.

          • Peter says:

            Bob don’t you know? Energy food and all the other things we need to live are excluded from the price inflation calculations. They are volatile don’t you know? Which in Keynesian terms means: They respond to monetary inflation.
            So better calculate price inflation based on the price of iCrap.

        • Major_Freedom says:

          (1) You said predictions without time tables aren’t real predictions. Now you’re quoting Faber saying hyperinflation is guaranteed but without giving a time limit, and you’re saying that’s an example of an Austrian predicting hyperinflation? Haha

          (2) “If there’s a panic out of the dollar you will see the destruction of the dollar rather quickly.” This is not a prediction of hyperinflation.

          (3) Worst price inflation in US history only has to be one millionth of a percent above the historical high. Also not a prediction of hyperinflation.

          You’re three examples are desperately hollow. Go back the drawing board.

          • Lord Keynes says:

            Faber’s prediction strongly implied he was thinking of the short term, not 20, 50 or 100 years from now, idiot.

            • Major_Freedom says:

              Haha, “strongly implied.”

              More like “What I need for him to be implying in order for me to not appear as a dishonest mental defective.”

              • Major_Freedom says:

                Crickets on the other two examples of “evidence” that I asked for of course.

                See that everyone? LK has been claiming that “Austrians” have been predicting that hyperinflation is supposed to have arrived by now, and he can’t find a single example to back up his claim.

                You’d think he’d be able to find just one, considering his hysteria.

              • Major_Freedom says:

                More like

                “What I need for him to be implying in order for me to not appear as a dishonest mental defective…who believes he can read people’s minds.”

              • Lord Keynes says:

                So in your view, when Faber said hyperinflation was 100% certain in America, what he meant was … well, 50 years from now or maybe in a century!! or maybe in 200?

                I see it all now!

              • Major_Freedom says:

                LK:

                No, my view is that if someone says he believes hyperinflation is 100% guaranteed, without giving a time frame, then it means you can’t arbitrarily pick a particular year, say 2013, as the year of expiry, and then assert that you somehow know via some “strong implication” that the predictor meant 2013.

                I know that this riles you up, because it would appear that this someone can never be wrong, because if hyperinflation does not occur as time passes, then he’ll just keep saying “Just wait a little more, you’ll see!”. At some point he’ll be right, right?

                Or would he?

                Is hyperinflation 100% guaranteed to occur at some point in the US?

                If you answer no, then Faber’s prediction isn’t so unfair.

                If you answer yes, then Faber simply got his prediction in first before you.

                I asked you to give me an example of an Austrian economist who predicted hyperinflation. I should have said “by now” because you set up the context of these alleged Austrians being “wrong” about hyperinflation predictions, which of course implies a time frame associated with it of at least “now”.

                Faber seems to be the only Austrian economist you could find who predicted that yes, we’re going to have hyperinflation, and he didn’t give a time frame.

                Don’t think it’s accurate to be saying “Austrian economists have predicted hyperinflation by 2013, and their prediction has been falsified.”

                What about all the academic Austrians affiliated with the Mises Institute or George Mason University? That’s the group of Austrian economists I had in mind.

                There are popular TV pundits and politicians who adhere to the Keynesian doctrine, who have made horrible predictions. Does that reflect poorly on academic Keynesianism? If you’re consistent, then you’d say yes.

              • Major_Freedumb says:

                Lord Keynes presented evidence. You have not. Stop it already with your nonsense.

                Go play in the sandbox and then come back and fight like a man.

              • Major_Freedom says:

                No, LK did not provide evidence of what I asked for.

                You stop it already.

                Come back and fight like a man?

                Watch out people, we got a bad-ass around here.

              • Major_Freedumb says:

                What does it freaking matter if guys like Schiff have provided a specific timeline for their hyperinflation predictions? They are still wrong and have used hyperinflation as a way to engage in excessive fearmongering.

              • Major_Freedom says:

                Major_Freedumb:

                “What does it freaking matter if guys like Schiff have provided a specific timeline for their hyperinflation predictions?”

                What hyperinflation predictions?

                “They are still wrong and have used hyperinflation as a way to engage in excessive fearmongering.”

                As opposed to excessive deflation fearmongering from you and your ilk?

  4. Major_Freedom says:

    Krugman has made many incorrect predictions over the years, but that hasn’t made him “change one’s model.”

    He just wants others to adopt his model, and he’ll pretend the evidence only shows support for his theories.

    • Lord Keynes says:

      “… that hasn’t made him “change one’s model.””

      No, that’s garbage.

      Krugman has made it very clear over the past few years that he has adopted heterodox Keynesian models that take account of private debt and the effect of collapsing asset bubbles:

      “I really am gravitating toward a Keynes-Fisher-Minsky view of macro, although of the three I’d much rather read Keynes.”

      Paul Krugman, “Actually existing Minsky,” May 19, 2009, http://krugman.blogs.nytimes.com/2009/05/19/actually-existing-minsky/

      • Major_Freedom says:

        TIL that going from one Keynesian model to another Keynesian model is changing one’s model.

      • Bob Roddis says:

        I submit that when the banking cartel (government created and protected) creates funny money loans out of thin air, calling such loans “private debt” without an asterisk is misleading. Further, such debt is central to Austrian analysis, a major fact invariably ignored and/or distorted by Keynesians such as LK, Krugman, Keen etc….

        Due to the Keynesians and Minsky-ites total and perpetual refusal/inability to ever engage even basic Austrian concepts and analysis, such analysis is never applied by them to any factual situation. Thus, the mysterious and inexplicable “Minsky moment” is really nothing but an Austrian boom/bust cycle but with the obvious evidentiary fact of fiat money price distortions which cause malinvestments meticulously absent from their analysis and brains. Here is Minsky’s garbage “thesis” which omits the pre-existing actual and true (Mises 1912) explanation:

        The financial instability hypothesis has both empirical and theoretical aspects. The readily observed empirical aspect is that, from time to time, CAPITALIST ECONOMIES EXHIBIT INFLATIONS AND DEBT DEFLATIONS WHICH SEEM TO HAVE THE POTENTIAL TO SPIN OUT OF CONTROL. In such processes the economic system’s reactions to a movement of the economy amplify the movement–inflation feeds upon inflation and debt-deflation feeds upon debt-deflation. Government interventions aimed to contain the deterioration seem to have been inept in some of the historical crises. These historical episodes are evidence supporting the view that the economy does not always conform to the classic precepts of Smith and Walras: they implied that the economy can best be understood by assuming that it is constantly an equilibrium seeking and sustaining system.

        http://www.levyinstitute.org/pubs/wp74.pdf

        Oh dear! What can we do about those darn “capitalist economies”? [actually, funny money economies with obscene levels of government spending – a typical Keynesian definitional fraud] As always, the problems that Keynesians/Minsky-ites claim to be solving do not actually exist but for their “solutions” which are ALWAYS the CAUSE of those problems.

        • Lord Keynes says:

          “Thus, the mysterious and inexplicable “Minsky moment” is really nothing but an Austrian boom/bust cycle”

          No, it isn’t, bob roddis.

          The classical ABCT does not invoke asset bubbles as a destabilising element in market systems, nor does it say anything about the dangers of debt deflation.

          Rather, its mad prescription of liquidationism completely ignores debt deflation and the way the latter process can cause economic catastrophe.

          The massive hole in your theory is pointed out by Vaughn:

          “Mises never discusses the possibility of systematic speculative error except in the context of his trade cycle theory, in which speculators-investors are misled by improper monetary signals emanating from a fractional reserve banking. Yet if the future cannot be predicted, or as Shackle would say, if the future is created out of the actions of the past, why is it not least conceivably possible for speculative activity to be on net incorrect at least some of the time? Certainly, we have the empirical evidence of speculative bubbles that are endogenous to markets as an example of market instability. One would think that the extent and potential limiting factors that affect such endogenous instabilities would be of great importance for fully understanding market orders, yet it is an issue surprisingly missing in the Austrian literature. Hence, although, we can appreciate the force of Mises’ argument as far as it goes, it seems that a crucial part of the case for the effective functioning of a market economy is missing.”

          Vaughn, K. I. 1994. Austrian Economics in America: The Migration of a Tradition, pp. 87–88.

          • Major_Freedom says:

            “The classical ABCT does not invoke asset bubbles as a destabilising element in market systems, nor does it say anything about the dangers of debt deflation.”

            Haha,

            “The….classical….ABCT…as found on page X….in the book XYZ…didn’t discuss debts!”

            The “Minksy moment” is in fact a core component of ABCT. A boom caused by the government bringing about artificially low interest rates obviously expands debt more than what otherwise would have taken place in a free market.

            To claim that because you didn’t read debt explicitly mentioned in chapter X of book XYZ is like claiming Keynes’ “Economic Consequences of the Peace” is “true” Keynesianism, and anyone who mentions Keynes wanting inflation is contradicting “classic Keynesianism.”

            “Rather, its mad prescription of liquidationism completely ignores debt deflation and the way the latter process can cause economic catastrophe.”

            It was the boom in inflation and the concomitant debt that is the “catastrophe”. The liquidation according to free market principles is the CURE.

            You have it exactly backwards.

          • Bob Roddis says:

            Since LK is pulling his same old stunt, I have to repeat myself.

            I fail to see the relevance of what exactly was the subject of the “classic” ABCT and I don’t care who thought it up. Martians might have brought down tablets containing the “classic” ABCT, Venusians the socialist calculation problem while giant insects from Alpha Centauri might have figured out that funny money dilution causes a boom/bust cycle with asset bubbles. I understood in 1973 that the lessons of “The Theory of Money and Credit” could be applied to all three situations. It wasn’t until I was so unfortunately introduced to your screeds that I realized that someone could be so utterly dishonest regarding this subject matter.

            Since you are unable to understand or engage the concept of economic calculation, you invariably try to change the subject into something about what the “classic” socialist calculation debate concerned and/or what the “classic” ABCT concerned. According to you, if a new analysis (for example, funny money causing housing bubbles – to the extent that is actually a new analysis) does not exactly fit into those earlier categories, the new analysis is somehow defective, even though you haven’t a clue as to what the analysis is or how to apply it. Those stupid distinctions you make are NOT RELEVANT TO THE ISSUES AT HAND because the same basic analysis is applied by Austrians to all three situations. In fact, Austrians employ those same principles to analyze EVERYTHING in economics. Of course, you never apply them, even in your hysterical anti-Austrian screeds, because you don’t understand them, which, by itself, is truly astonishing. Hell, your claiming that these are allegedly disparate concepts only reinforces the fact that you don’t understand the concepts AND you are a miserable liar.

            Further, the issue of who first applied the concept of economic calculation to asset bubbles is irrelevant to the issue of why Minsky-ites do not apply it all or why the basic concepts and analysis of the Austrian School are ALWAYS Kryptonite to Keynesians. Who first thought up an analysis is irrelevant to whether it is correct or not.

            Finally, your constant references to Rothbardian analysis as “utopian” is just another pathetic attempt to change the subject. Basic Rothbardian and libertarian analysis begins with basic English Common Law concepts of protections for property, persons and their contracts. These concepts are not controversial and they are easily understood. They are taught in first year law school. It is quite a simple matter to apply them to historical facts to determine whether a particular transaction was voluntary or coerced or concerned fraud and/or misrepresentation. The fact that there will never be a situation where everybody obeys the rules and does not violate them does not convert the analysis into something “utopian”. You pull that stupid stunt only because you cannot and will not engage our analysis.

            • Major_Freedom says:

              No Bob Roddis.

              No no no no…and no.

              No. No no.

              No.

            • Lord Keynes says:

              (1) so after all that you’re saying: yes, ABCT doesn’t consider asset bubbles.

              (2) “Since you are unable to understand or engage the concept of economic calculation”

              Is this what you mean by the concept of “economic (mis)calculation” in a modern economy ?:

              (1) the alleged miscalculation problems caused in the Austrian business cycle theory (ABCT).

              (2) distortions of prices away from their equilibrium values (as postulated by (4) below) by government spending, deficit spending, central bank fiat money creation, price controls, subsidies, etc.

              (3) distortions of prices away from their equilibrium values (as postulated by (4) below) by government interventions allegedly leading to Cantillon effects

              (4) in general, obstructions to flexible wages and prices and therefore to a price vector that will clear all markets (with flexible wages clearing the labour market), as in this quotation of Hayek:

              “The primary cause of the appearance of extensive unemployment, however, is a deviation of the actual structure of prices and wages from its equilibrium structure. Remember, please: that is the crucial concept. The point I want to make is that this equilibrium structure of prices is something which we cannot know beforehand because the only way to discover it is to give the market free play; by definition, therefore, the divergence of actual prices from the equilibrium structure is something that can never be statistically measured.” (Hayek 1975: 6–7).

              If Roddis answers “yes”, he demonstrates that his claim that I do not understand the Austrian concept of economic calculation in a Keynesian economy is false.

              If he answers “no”, then he is saying that none of the things above actually cause economic calculation problems… Obviously we do not need to give them any thought then.

            • Ken B says:

              Every time I talk about common law BR, many of the Rothbardians wig out. Common law is built on precedent and narrow construal a. It seems different. MF’s list of nos suggests I am not the only one who doubts you here.

          • Bob Roddis says:

            I don’t think Keynesians view government as their mommy. They think of themselves and the government as the mommy (actually Nurse Ratched) for the unwashed massed. Further, Keynesians also think that they have discovered “distorted” prices. In their mommy role, the entire raison d’etre of Keynesianism is to “repair” prices that Keynesians think are “wrong”. Finished goods might not sell at their anticipated prices so Keynesians insist that the government must provide funny money to the masses to increase “demand” so that the stuff might sell at what they deem to be the “correct” price.

            Artificially inflated asset prices might collapse to their true value (which to Keynesians are the “wrong” prices) so they want to use funny money to reflate those “wrong” prices back to their artificially inflated “correct” prices.

            The entire theory is based upon artificially using government funny money and spending to “repair” prices that the Keynesian know-it-all, in his infinite wisdom, deems “incorrect”. And all the while he is oblivious to the “problem of knowledge” and/or economic calculation.

          • Tel says:

            Wikipedia buys into the ABCT vs Debt Deflation debate with the following:

            Debt deflation is not the only economic theory that cites credit bubbles as a key factor in economic crises; the most noted other theory is Austrian business cycle theory, which posits that economic crises are caused by excess credit growth and the malinvestment (misallocation of resources) that results, with these being caused by central bank monetary policy and the fractional-reserve banking system.
            The first difference between these may be stated as debt-deflation being a demand-side theory, which emphasizes the period after the peak – the end of a credit bubble and contraction of debt causing a fall in aggregate demand – while the Austrian theory is a supply-side theory, which emphasizes the period before the peak – the growth of debt during the growth phase causing malinvestment. The theories may thus be seen as complementary, addressing different aspects of the issue, and are so-considered by some economists.[17]

            The reference given is none other than Steve Keen … how about that?

            🙂

            • Lord Keynes says:

              You’ve proved my point: ABCT is not concerned with economic problems caused by asset bubbles.

              • Tel says:

                Egats.

                The purpose of price in a market scenario is to guide resources and investment. What is an “asset bubble”, other than a miscalculated price?

                Miscalculated price results in malinvestment. There it is: ABCT precisely does concern itself with the economic problem caused by asset bubbles, and that problem is malinvestment. People putting their time and energy into producing stuff that other people didn’t really want.

                The bubble pops, the malinvestment is revealed, and economic readjustment is necessary to get back on track again.

                The only bit the Austrians didn’t get quite right is that when the asset bubble pops, bankruptcy results which destroys debt (i.e. destroys money), and confidence collapses which makes the banks stop lending and makes the people who are in debt focus on paying that debt back rather than spending. These effects prevent monetary inflation washing through into price inflation… for a few years at any rate.

                But it ain’t over yet.

              • Lord Keynes says:

                Tell me: what pages in Prices and Production does Hayek describe the destabilising influence of asset bubbles in his business cycle theory?

                He doesn’t and you know it.

              • Tel says:

                There’s an essay at Mises Dot Org that pretty much says exactly what I’ve been saying:

                There can, of course, be little doubt that, at the present time, a deflationary process is going on and that an indefinite continuation of that deflation would do inestimable harm. But this does not, by any means, necessarily mean that the deflation is the original cause of our difficulties or that we could overcome these difficulties by compensating for the deflationary tendencies, at present operative in our economic system, by forcing more money into circulation. There is no reason to assume that the crisis was started by a deliberate deflationary action on the part of the monetary authorities, or that the deflation itself is anything but a secondary phenomenon, a process induced by the maladjustments of industry left over from the boom. If, however, the deflation is not a cause but an effect of the unprofitableness of industry, then it is surely vain to hope that by reversing the deflationary process, we can regain lasting prosperity. Far from following a deflationary policy, central banks, particularly in the United States, have been making earlier and more far-reaching efforts than have ever been undertaken before to combat the depression by a policy of credit expansion — with the result that the depression has lasted longer and has become more severe than any preceding one. What we need is a readjustment of those elements in the structure of production and of prices that existed before the deflation began and which then made it unprofitable for industry to borrow. But, instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion.

                http://mises.org/daily/3121

                A little overly wordy perhaps (as was the style of the time) but in a nutshell — credit booms mess with price signals, resulting in malinvestment, and eventual crash (including deflation during the crash as those positions unwind, but this deflation although admittedly destructive is merely “a secondary phenomenon”).

              • skylien says:

                It really escapes me how it is possible that Keynesians are obviously able to pay lip service to the market process and economic calculation that is there to find out how to produce what in which quantity, and yet if this process currently figured that there was obviously a big problem (showing by bursting bubbles and debt structures) then they don’t notice that they toss all those questions of ‘what?’, ‘in what way’? and ‘how much?’ right away.
                Then it is only about producing anything (called ‘real output’), no matter what, no matter how, just as much as possible so that GDP follows a preconceived trend…

                The question at this point for a Keynesian should be: If it doesn’t matter now, why does it ever?

                Well and yet I am quite sure LK doesn’t even see the discrepancy I am talking about here… Or do you?

              • Major_Freedom says:

                LK:

                Just because you have only read Prices and Production for ABCT, it doesn’t mean that it is the only source everyone else has to go by.

  5. Bob Roddis says:

    In 2002 Krugman said that,

    “Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

    http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

    In 2005, Krugman admitted that the Fed *had* created a housing bubble and that it wasn’t surprising because…

    “After all, the Fed’s ability to manage the economy mainly comes from its ability to create booms and busts in the housing market.”

    http://www.nytimes.com/2005/05/27/opinion/27krugman.html

    But by 2010 Krugman completely changed his story and tried to absolve the Fed by saying…

    “These considerations suggest that it would be wrong to attribute the real estate bubble wholly, or even in large part, to misguided monetary policy.”

    http://www.nybooks.com/articles/archives/2010/sep/30/slump-goes-why/?pagination=false

    And then by 2012 Krugman started flat-out lying about what he said in the past by claiming he “never bought the story” that the Fed was the cause of the Housing Bubble. I guess it was the other Paul Krugman at the NYT who wrote that column in 2005.

    http://www.youtube.com/watch?v=KrfRS07CAHc ( video: 32:40 mark )

  6. Bob Roddis says:

    In 2002 Krugman said that,

    “Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

    http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

  7. Bob Roddis says:

    In 2005, Krugman admitted that the Fed *had* created a housing bubble and that it wasn’t surprising because…

    “After all, the Fed’s ability to manage the economy mainly comes from its ability to create booms and busts in the housing market.”

    http://www.nytimes.com/2005/05/27/opinion/27krugman.html

  8. Bob Roddis says:

    But by 2010 Krugman completely changed his story and tried to absolve the Fed by saying…

    “These considerations suggest that it would be wrong to attribute the real estate bubble wholly, or even in large part, to misguided monetary policy.”

    http://www.nybooks.com/articles/archives/2010/sep/30/slump-goes-why/?pagination=false

  9. Bob Roddis says:

    And then by 2012 Krugman started flat-out lying about what he said in the past by claiming he “never bought the story” that the Fed was the cause of the Housing Bubble.

    http://www.youtube.com/watch?v=KrfRS07CAHc ( video: 32:40 mark )

  10. Bob Roddis says:

    Lord Keynes:

    You’ve proved my point: ABCT is not concerned with economic problems caused by asset bubbles.

    This same silly dispute with LK was resolved in our favor more than a year ago.

    JCatalan to Lord Keynes a year ago:

    That problems of calculation are “at the heart of the ABCT” does not mean that the ABCT is at the heart of economic calculation.

    Lord Keynes to JCatalan a year ago:

    Really? Then kindly explain what, in your opinion, are the major “problems of economic calculation” in modern capitalist economies, more important than ABCT.

    JCatalan to Lord Keynes a year ago:

    ABCT is not a theory of economic calculation — I keep repeating this point. Economic calculation is necessary as a prerequisite to understanding how ABCT is possible — ABCT DESCRIBES A MISCALCULATION [emphasis added]. Hayek’s suggestion that (paraphrased) “one must understand how the economy works to know where it does not” applies equally to ABCT. The theory of economic calculation is the theory of how the economy works.

    Government spending — in my opinion — is a bigger area for miscalculation than ABCT. Government spending is more all-encompassing, and can occur as long as government spends. Subsidies, price controls, et cetera, are also all important distortions of economic calculation — see George Reisman’s Capitalism for more on this (he gives it extensive coverage).

    ABCT is only useful in describing severe intertemporal miscoordination caused by changes in relative prices, in turn caused by monetary distortions.

    http://www.economicthought.net/blog/?p=594#comment-608991024

    Applying the concept of economic calculation to asset bubbles involves applying the same analysis to a less complicated set of transactions than those involved with the ABCT. LK’s desperate responses to our challenge about economic calculation demonstrate that the concept is so devastating to Keynesian analysis that it must somehow be suppressed and never be allowed to see the light of day.

    Note that one can never find a single Keynesian who has ever attempted to apply the concept of economic calculation to a particular situation (for example, to Minksy Moments) if only to demonstrate that it is wrong and the Keynesian analysis is better.

    • Lord Keynes says:

      “Applying the concept of economic calculation to asset bubbles involves applying the same analysis to a less complicated set of transactions than those involved with the ABCT.”

      So you’re saying the classic ABCT doesn’t do this?
      My point is confirmed.

      Oh, and you did not answer my question, coward that you are:

      Is this what you mean by the concept of “economic (mis)calculation” in a modern economy ?:

      (1) the alleged miscalculation problems caused in the Austrian business cycle theory (ABCT).

      (2) distortions of prices away from their equilibrium values (as postulated by (4) below) by government spending, deficit spending, central bank fiat money creation, price controls, subsidies, etc.

      (3) distortions of prices away from their equilibrium values (as postulated by (4) below) by government interventions allegedly leading to Cantillon effects

      (4) the ideas expressed in this quotation of Hayek (which you now say have virtually no relationship to Walrasian GE theory):

      “The primary cause of the appearance of extensive unemployment, however, is a deviation of the actual structure of prices and wages from its equilibrium structure. Remember, please: that is the crucial concept. The point I want to make is that this equilibrium structure of prices is something which we cannot know beforehand because the only way to discover it is to give the market free play; by definition, therefore, the divergence of actual prices from the equilibrium structure is something that can never be statistically measured.” (Hayek 1975: 6–7).

      If Roddis answers “yes”, he demonstrates that his claim that I do not understand what he means by the Austrian concept of economic (mis)calculation is false.

      If he answers “no”, then he is saying that none of the things above actually cause economic (mis)calculation problems… Obviously we do not need to give them any thought then.

        • Lord Keynes says:

          Yes, your failure to answer a simple question pretty much demonstrates your intellectual bankruptcy.

          • Major_Freedom says:

            Speaking of intellectual bankruptcy, you can’t even identify the different between explaining X in terms of Y, and X logically depending on Y.

            One can explain the concept of calculation by utilizing GE theory, but that doesn’t require economic calculation to be logically dependent on GE theory.

      • Bob Roddis says:

        It is so pointless to go over this again and again and again. Give up, LK. You don’t understand economic calculation.

        http://consultingbyrpm.com/blog/2012/09/tom-woods-keeps-krugmans-feet-to-the-fire.html#comment-45198

        • Lord Keynes says:

          No, Murphy’s position on your Hayek quote and Walrasian equilibrium has never been clarified.

      • Bob Roddis says:

        I believe I have answered all of those stupid questions before. Hayek’s use of the term “equilibrium structure” in the quote is simply the set of unadulterated prices that would obtain in the absence of intervention and which cannot be measured because the are not allowed to come into existence. Against my better judgment:

        Economic calculation refers to the process whereby the prices which result from transactions are used to guide people concerning what it is that the vast army of strangers might want to purchase and/or acquire. It is probably the most important source of such information. It cannot be found in the mind of a single person or in a computer and we cannot read other people’s minds. The prices result from the accumulated transactions of millions of people expressing their actual wants desires. They are walking the walk, not talking the talk.

        If the owner of a giant company orders his employees to each purchase a CD of his daughter singing for $20 each (where most of the employees cannot stand her or her singing), the prices of the resulting purchases will not be a good guide as to the type or style of music that might sell at such a price. Basing your investment decisions upon such sales by planning to produce similar CDs and sell them at similar prices would be called “economic miscalculation”. Funny money loans and Keynesian policies in general produce “false prices” similar to the prices paid for the CDs of the boss’ daughter. Believing that such prices reflect actual supply and demand is likely to induce “economic miscalculation”. Generally, this process will more harshly impact more complicated and longer term projects such as industrial plants and real estate construction. It is not a complicated or obscure concept or analysis.

        At this point, LK’s comeback will usually be an attempt to obfuscate about the nature of a voluntary vs. non-voluntary exchange including, but not limited to describing our call for voluntary exchanges as “Utopian”.

        I tried explaining this concept in a slightly different way just yesterday here above:

        http://consultingbyrpm.com/blog/2013/03/krugman-judges-people-on-their-record.html#comment-59077

        LK does not want to understand and he doesn’t.

        • Lord Keynes says:

          lol.. so there is no place at all in your Austrian view of “economic (mis)calculation” for market-clearing prices and wages? is that right? You do not even think markets converge Mises’s final state of rest?

          In which case, your “unadulterated prices” do not result in economic coordination; they do not have the significance you think they have.

          • Bob Roddis says:

            Your obsession with “market clearing prices” is misplaced. During a 25 year artificial boom, there will be plenty of “market clearing prices” right up until the crash. I suppose the issue is that “market clearing prices” are sustained without an artificial funny boom. Basically, you are just dishonest and refuse to understand Austrian concepts. You simply do not want them to be true (just like all Keynesians).

            [Y]our “unadulterated prices” do not result in economic coordination; they do not have the significance you think they have.

            Sound the trumpets! There’s the extent of LK’s refutation of Austrian analysis! As MF said, it’s “no no no no no no. And no no. No.

            No. Just cuz. LOL!”

            • Lord Keynes says:

              Still haven’t answered the question:

              Do you think real world market systems have a tendency towards
              Mises’s final state of rest (with a tendency towards market-clearing prices and wages)?

              Yes or no.

              • Bob Roddis says:

                I don’t like the terminology. “Markets” do not “rest”. People exchange goods and services. I’m not particularly enamored with this type of jargon and I have no obligation to translate what are simple and self evident truths into jargon, whether or not it was used by Mises, Hayek, Krugman or the San Diego Chicken. And I fail to see how what I have said needs any further clarification.

                Some people spend their time trying to make simple concepts seem complex. I try to make concepts understandable to average people so that they will not be intimidated by jargon-spewing “experts”.

              • Lord Keynes says:

                In other words: basic inability to even engage in honest debate, for in fact it would be very simple to tell us whether you agree with your hero Rothbard or not, on one of the most important issues about market economies.

              • Major_Freedom says:

                Refusing to use your misleading verbiage is not tantamount to dishonest debate.

                Do you still beat your wife? Answer the question instead of dodging it!

        • Anonymous says:

          ” describing our call for voluntary exchanges as “Utopian”.”

          Actually it’s your belief that involuntary ones will just disappear if the state does that counts as utopian.

          • Bob Roddis says:

            If state violence pursuant to its special privileges to violate rights were stopped, that would stop state violence. What’s your point? All you are doing is the “LK subject change”.

      • Ken B says:

        A dialogue.

        “I have a cool machine. Set the inputs and it finds the Lagrange multipiers to optimize a certain function.”

        “Hey I care about that function. Does it always find the real maximum?”

        “Not if you give it bad input. You’ll find something but it won’t be the best possible result. For that you need good data.”

        “Would you say understanding your machine is the same as being able to estimate how far off the answer will be?”

        “No, but if you don’t understand the machine it will be a lot harder.”

  11. Bob Roddis says:

    Lord “Uncle Joe” Keynes has gone Soviet!!:

    There is a fascinating post here by Matias Vernengo on the economic history of the Soviet Union:
    “The Soviet Economy: Lessons for Developing Countries,” Naked Keynesianism, March 4, 2013.
    Part of the argument is that the Soviet collapse in the 1980s was partly to do with external economic factors that also caused severe crisis in certain Third World nations.

    http://socialdemocracy21stcentury.blogspot.com/2013/03/the-financial-revolution-in-medieval.html

    As we all know, LK is quite the expert on the “socialist calculation debate”. Plus, he’s always there to capably apply those lessons to other factual situations such as to capital goods industries and asset bubbles under a regime of Keynesian funny money .

    • Major_Freedom says:

      Didn’t you know? Communist countries collapse because of external factors, external enemies, everything other than communism itself.

      Just paint that in fuzzy and vague terms like “partly responsible” so as to deflect laughter, and bingo, we can start “believing” again.

      I mean, clearly free market capitalism doesn’t work…right?, so maybe we need to start increasing the size and scope of government activity in the direction of the USSR. Look how successful they were in the early years in increasing “output”!

      • Bob Roddis says:

        Did ya know that Hitler was a successful Keynesian? Just ask the expert.

        http://socialdemocracy21stcentury.blogspot.com/2011/09/fiscal-stimulus-in-germany-19331936.html

        • Lord Keynes says:

          … so obviously all Keynesians must be Nazis, right?

          Even though the idiot Mises loved Mussolini’s fascism?

          • Bob Roddis says:

            We’ve been over Mises and Mussolini so many times before. Did Mussolini or Kurt Schuschnigg adopt laissez faire both in social and economic areas?

            • Lord Keynes says:

              Actually, Mussolini’s regime was laissez faire in the beginning, and the Austro-fascists imposed deflationary policies, budget balancing and austerity in the 1930s.

              http://socialdemocracy21stcentury.blogspot.com/2013/03/the-great-depression-in-europe-real-gdp.html

              • Major_Freedom says:

                There cannot be a fascist regime and laissez-faire capitalism at the same time.

              • Lord Keynes says:

                Only if you define “laissez faire” as anarcho-capitalism.

                But, as it happens, Hoppe even implies that authoritarian monarchy would be compatible with laissez faire, since the king is owner of the country as his private property.

              • Major_Freedom says:

                No, only if you define laissez-faire as laissez-faire: Respect for private property rights and thus economic freedom at the individual level.

                “Hoppe even implies that authoritarian monarchy would be compatible with laissez faire, since the king is owner of the country as his private property.”

                No, Hoppe did not “admit” that at all. He argued that monarchy is superior to democracy (while being against both), because the King owns the land and so Kings on average would treat the capital (land, etc) better than temporary stewards, because the incentive to loot is greater with temporary stewardship.

                Just more lies from you. You’re on a roll!

                Oh, and it’s crystal clear why you are spewing the absurd lie that fascist states throughout history have “adopted laissez-faire”.

                It’s because you need for them to have done so, so that fascists states adopting Keynesian violence doesn’t appear as unique. By smearing laissez-faire with lies that it is consistent with fascism, you hope to make it appear as though Hitler adopting Keynesian violence doesn’t reveal something unique about Keynesianism that makes it differ from laissez-faire capitalism, namely, the synergy and compataibility between Nazism and Keynesianism.

                Fascism is government control, but not ownership, of the means of production. Laissez-faire capitalism is private ownership and control of the means of production. They are mutually incompatible.

                On the other hand, Keynesianism is NOT incompatible with Nazism. Both can co-exist. Nazis can utilize Keynesianism, precisely because both Nazism and Keynesianism are pro-violence, anti-individual property rights, and pro-collectivism.

                This is precisely why Keynes, in his preface to the German edition of the GT, wrote:

                “Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of the production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire.”

                Keynes admitted that his policy prescriptions are much more suited to totalitarian states, like Nazism.

              • Lord Keynes says:

                (1) all that was asserted above was (1) Mussolini’s regime was pro-laissez faire in the beginning (reduced taxes, reduced regulations, and free trade), and (2) the Austro-fascists imposed deflationary policies, budget balancing and austerity in the 1930s.

                Both statements are true.

                Nobody argued that “fascist states throughout history have ‘adopted laissez-faire’ – this is just your stupid straw man.

                (2) you’ve not even shown that monarchy/authoritarianism is incompatible with laissiz faire (whether neoclassical laissez faire or the Misesian/Hayekian classical liberal version.

                On the contrary, Mussolini’s laissez faire phrase proves that it is.

                And furthermore we need only look at Hayek’s comment here:

                “[A]s long-term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. At times it is necessary for a country to have, for a time, some form or other of dictatorial power. As you will understand, it is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally, I prefer a liberal dictator to democratic government lacking in liberalism.
                http://coreyrobin.com/2012/07/08/hayek-von-pinochet/

              • Major_Freedom says:

                You’re still lying I see.

                (1) “Mussolini’s regime”, was incompatible with laissez-faire capitalism. Soon after he took control of the state, he imposed public works programs such as the draining of the Pontine Marshes, government financed and run transport, and other non-laissez-faire activities.

                (2) I didn’t “show” that monarchies are incompatible with laissez-faire, because those who aren’t lying brain dead fools don’t need to be shown this. But if you’re asking, then I’ll tell you: Monarchies are formed on the basis of violence against private property rights established on the basis of original appropriation, production, and free trade. An established monarchy is an established illegitimate claimer over lands the monarchist does not in fact own. Thus a monarchist’s claim over a territory (e.g. “his” country), is incompatible with laissez-faire capitalism, which is based not on conquest, but on original appropriation, production and free trade.

                Mussolini was NOT adopting or imposing or establishing “laissez-faire capitalism.” His activities were incompatible with laissez-faire.

                “And furthermore we need only look at Hayek’s comment here:
                “[A]s long-term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. At times it is necessary for a country to have, for a time, some form or other of dictatorial power. As you will understand, it is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally, I prefer a liberal dictator to democratic government lacking in liberalism.”

                Hayek was wrong. Dictators cannot govern in a liberal way, without ceasing to be dictators. Dictators are those who “dictate”.

                One cannot “dictate” someone else’s freedom. One can only recognize it, abstain from violating it, etc. “Dictate” activities are anti-laissez-faire activities.

              • Lord Keynes says:

                Monarchies are formed on the basis of violence against private property rights established on the basis of original appropriation, production, and free trade.

                No, it is perfectly possible in theory for a human to claim property rights over an uninhibited area by means of the usual homestead principle, and then have people enter his private property and live there by means of and through the terms of personal private contracts. He would be king by personal contract.

                Feudal lordship – as lords expanded into unoccupied areas of Europe – is a perfect example of this.

              • Major_Freedom says:

                “No, it is perfectly possible in theory for a human to claim property rights over an uninhibited area by means of the usual homestead principle, and then have people enter his private property and live there by means of and through the terms of personal private contracts. He would be king by personal contract.
                Feudal lordship – as lords expanded into unoccupied areas of Europe – is a perfect example of this.”

                Those aren’t monarchs. Those are private property owners.

                You’re mangling the meaning of monarchies.

                By your mangled definition, we’d have to start calling family owned businesses that are passed from mother/father to son/daughter over time “monarchies”.

                Don’t be ridiculous.

                Monarchies are states, not private property owners in laissez-faire economic competition.

                Now, if you really really want to define private land owners who homestead land, and then pass it down from generation to generation, an example of a “monarchy”, then whatever.

                But then we’d have to distinguish between these “private monarchies”, from the Earthly “state monarchies” that are established via conquest and war.

              • Ken B says:

                LK: “Feudal lordship – as lords expanded into unoccupied areas of Europe – is a perfect example of this.”

                MF: “Those aren’t monarchs. Those are private property owners.”

                Classifying medieval feudal lords as just property owners to bolster your case seems like a bad tactic MF. It also seems wrong, since fuedal obligations were not all contractual, but mostly inherited. I mean, I think you have the facts on your side here, if you’ll avail yourself od them. LK’s analogy is not very good.

              • Major_Freedom says:

                “Classifying medieval feudal lords as just property owners to bolster your case seems like a bad tactic MF”

                It’s the other way around Ken B.

                LK classifying private property owners as monarchs to bolster his case is a bad tactic.

                As I explained, if we start classifying land owners who originally appropriated or traded for lands as “monarchs”, then it would mean in a purely laissez-faire world, there would be as many “monarchs” as there are land owners who pass their land down to their sons and daughters.

                Rather than mangle the traditional definition of monarchy, which is STATISM, as 99.9% of all who have been called monarchs are actually doing, you ought to jettison your desire to play devil’s advocate, and realize that it is LK who is employing the semantic game, not me.

                I am defending the commonly understood definition of monarchy, and you’re actually claiming that I am in the wrong here for not agreeing to define private land owners who originally appropriate land “monarchs”?

                Monarchy is commonly defined as a form of statism, not private land ownership in a context of free trade and homesteading.

                If you want to give yourself a psychological fix by pretending that it could mean something other than a form of statism, then be my guest. I won’t go down that road of absurdity.

              • Lord Keynes says:

                “LK classifying private property owners as monarchs to bolster his case is a bad tactic.”

                False. I am not saying all private property owners are monarchs, for only private property owners entering into private free contracts with people who come and live within their territory and who demand that these “subjects” consent to acknowledge them as kings would then be kings.

                I am saying that a monarchy where a person who gained property rights , say, over a large area and then engaged in voluntary contracts with other individuals to come and live on his property leasing land and by contract recognizing him as king would be consistent with private property and even capitalism.

                ——–

                Ken B, perfect similarity to medieval feudalism is NOT required in a hypothetical example.

                That there are similarities is all I am saying.

              • Major_Freedom says:

                LK:

                “I am not saying all private property owners are monarchs, for only private property owners entering into private free contracts with people who come and live within their territory and who demand that these “subjects” consent to acknowledge them as kings would then be kings.”

                Right, in other words you insinuated that all private property owners are monarchs, because all private property owners would have rules for visitors, tenants, and other individuals in a context of exchange of rights of use, for money.

                “I am saying that a monarchy where a person who gained property rights , say, over a large area and then engaged in voluntary contracts with other individuals to come and live on his property leasing land and by contract recognizing him as king would be consistent with private property and even capitalism.”

                That is just calling all private property owners monarchs with subjects, or monarchs without subjects.

              • Major_Freedom says:

                You’re not actually saying monarchy is consistent with private property capitalism.

                You’re just labeling private property owners “monarchs”.

                By your logic, if in a laissez-faire society I started to rent out my basement to students, and they paid me rent, then I would be “king”, the students would be my “subjects”, I would be in control of a “monarchy”, and LK would be “court jester.”

                Should I wear a robe and crown? Maybe you can make the students, I mean my subjects, laugh at dinner time with songs of how the lazy student who eats the food without buying more is “stimulating the nutrition economy” in my “castle”.

                Bwahahahaha

              • Lord Keynes says:

                More dishonest distortion, indicating inability to argue at a basic level of honesty.

                “By your logic, if in a laissez-faire society I started to rent out my basement to students, and they paid me rent, then I would be “king”, the students would be my “subjects”,”

                False. ONLY if you entered into voluntary contracts with people living on your property by which they would *acknowledge you as king* – with the rights of a king – would you be a king.

                We must add inability read to your many shortcomings.

              • Major_Freedom says:

                LK:

                “False. If you entered into voluntary contracts with people living on your property by which they would *acknowledge you as king* – with the rights of a king – would you be a king.”

                Hahaha, then there has never been any “kings” ever in human history, because there have always been “subjects” who DID NOT “acknowledge” the private property owner as “king”.

              • Ken B says:

                @LK: If you are arguing that over time ‘ownership’ of large tracts can lead to vassalage and kingship you might be right. I put ownership in quotes because to be fair it’s not quite the modern notion. However monarchies and modern notions of ownership are quite different, so I think you and MF are both pursuing a red herring here.

          • Major_Freedom says:

            Hahaha, the “idiot Mises.”

            Mises didn’t “love fascism” you contemptible liar. He wrote a book that argued it is untenable, and would destroy civilization.

            Saying that your serial murderer next door saved your family from other serial murders, and saying that this was a good thing, something that will always be remembered and revered, is not the same thing as condoning, supporting, or praising the serial murderer’s serial murder.

            • Lord Keynes says:

              Sure, this is not praise in any way:

              “It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. “

              • Major_Freedom says:

                Correct! Always put quotes in their context.

                Ignoring that context, after repeatedly SHOWN it, only reinforces what many of us already know.

            • Ken B says:

              I assume he did not rely on Austrian Economics for this argument. Because he’s making a prediction after all.

              • Major_Freedom says:

                Damn Mises for not being a one-dimensional muppet who sits only in the praxeology corner.

    • Lord Keynes says:

      That post of Vernengo – if you’d bothered to read it – does not deny that severe internal problems from the 1970s onwards also caused the demise of the Soviet system.

      But one factor was clearly worsening terms of trade in the 1980s – common to many developing countries at that time also reliant on oil and gas exports.

  12. Bob Roddis says:

    LK’s repeated phony association of Mises’ and Mussolini is taken completely out of context. Mises was clearly (and merely) pointing out that (in his opinion in 1927 – long before Hitler) the pre-Hitler form of fascism had halted the spread of Stalinist Pol Pot-like mass murdering Communism in Italy (Mussolini was indeed quite popular with hip leftists and even FDR until he joined up with Hitler in the late 1930s). But Mises also makes clear that fascism is a brutal and ignorant movement because fascists cannot even argue or engage in debate (just like socialists) and that fascism will lead to a civilization-ending war:

    “Fascism can triumph today because universal indignation at the infamies committed by the socialists and communists has obtained for it the sympathies of wide circles. But when the fresh impression of the crimes of the Bolsheviks has paled, the socialist program will once again exercise its power of attraction on the masses. For Fascism does nothing to combat it except to suppress socialist ideas and to persecute the people who spread them. If it wanted really to combat socialism, it would have to oppose it with ideas. There is, however, only one idea that can be effectively opposed to socialism, viz., that of liberalism. ****

    So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. To maintain and further raise our present level of economic development, peace among nations must be assured. But they cannot live together in peace if the basic tenet of the ideology by which they are governed is the belief that one’s own nation can secure its place in the community of nations by force alone.

    It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.” Pages 50-51

    http://mises.org/books/liberalism.pdf

    See Ralph Raico:

    http://mises.org/journals/jls/12_1/12_1_1.pdf

  13. Bob Roddis says:

    LK’s repeated phony association of Mises’ and Mussolini is taken completely out of context. Mises was clearly (and merely) pointing out that (in his opinion in 1927 – long before Hitler) the pre-Hitler form of fascism had halted the spread of Stalinist Pol Pot-like mass murdering Communism in Italy (Mussolini was indeed quite popular with hip leftists and even FDR until he joined up with Hitler in the late 1930s). But Mises also makes clear that fascism is a brutal and ignorant movement because fascists cannot even argue or engage in debate (just like socialists) and that fascism will lead to a civilization-ending war:

    “Fascism can triumph today because universal indignation at the infamies committed by the socialists and communists has obtained for it the sympathies of wide circles. But when the fresh impression of the crimes of the Bolsheviks has paled, the socialist program will once again exercise its power of attraction on the masses. For Fascism does nothing to combat it except to suppress socialist ideas and to persecute the people who spread them. If it wanted really to combat socialism, it would have to oppose it with ideas. There is, however, only one idea that can be effectively opposed to socialism, viz., that of liberalism. ****

    So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. To maintain and further raise our present level of economic development, peace among nations must be assured. But they cannot live together in peace if the basic tenet of the ideology by which they are governed is the belief that one’s own nation can secure its place in the community of nations by force alone.

    It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.” Pages 50-51

    http://mises.org/books/liberalism.pdf

    • Lord Keynes says:

      And his admission that fascism was interested in war only underscores the absurd of his comments:

      It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.

      You cannot argue that a movement is “full of the best intentions” when it is proclaiming that its foreign policy is “based … on the avowed principle of force in international relations”.

      • Major_Freedom says:

        Full of the best intentions….against communist conquest.

        • Major_Freedom says:

          Yes, one CAN argue that it is full of good intentions despite the fact that it will end up destroying civilization, and not contradict oneself.

          It’s called the difference between intentions and results. Mises was showing that despite its good intentions (against communist threats), it will have the result of civil war, and destruction of civilization.

          Yes, we know that this does not make any sense to you.

          You’re being obtuse as usual.

  14. Bob Roddis says:

    Imagine if Hitler had imposed libertarianism and the NAP on his subjects…..

    The Death Squad Commandant knocks on the door of the synagogue full of Jews at the Sabbath services. The Rabbi answers the door. The Commandant tells the Rabbi to get the entire congregation outside onto the waiting trucks so the Death Squad can take them to the woods where they will be stripped naked and each shot in the head and thrown in a pit. The Rabbi tells them to go to hell and slams the door.

    The Commandant walks away in disgust and says: “Aw shucks. Since the imposition of that darned NAP, not only haven’t we been able to kill anyone, we aren’t even allowed to break windows on the anniversary of Kristallnacht!”

    Of course, thanks to our expert source, we know fer sure that Hitler did indeed impose Keynesian “solutions” upon the Third Reich.

    • Lord Keynes says:

      And there is no relationship between fiscal stimulus and Nazi genocide. Even Hayek eventually supported fiscal stimulus during depressions. Presumably that makes Hayek a Nazi perhaps ?…

      As for a Keynesian solution to the depression, this was also successfully implemented in democratic New Zealand in the late 1930s:

      http://socialdemocracy21stcentury.blogspot.com/2011/09/keynesian-stimulus-in-new-zealand.html

      • Major_Freedom says:

        “And there is no relationship between fiscal stimulus and Nazi genocide”

        Nobody said Nazi genocide. The topic is Nazism, which includes genocide, but not exclusively.

        Keynesianism and Nazism are very much related, both morally and economically. It’s why Hitler could enact Keynesian activity, but not laissez-faire activity.

        Your measure of “success” in New Zealand ignores the individual preferences of those whose property rights were violated in the very act of imposing the Keynesian violence.

        The statistics of “output”, which includes crap the government spends money on, and “employment” which includes the make work jobs the government spends money on, are flawed, ridiculous standards of “success”.

        If a state taxed everyone’s income 100%, and printed whatever quantity of money was sufficient to hiring everyone into militaristic-agricultural projects, then orthodox Keynesian theory (the one that Keynes himself admitted is much more suited to being implemented in totalitarian societies) would conclude that “Keynesian policies have been a success.”

        After all, “unemployment” would be zero, and “output” in the form of war machines and potato soup can potentially go up for a number of years.

        Of course you’ll be completely in denial of this, because you want to convince yourself that Keynesian theory proper distinguishes between “good” government spending and “bad” government spending, despite the fact that orthodox Keynesianism makes no distinction, since it is based on nominal values, such as government “spending” and “deficits.”

        • Lord Keynes says:

          “The statistics of “output”,” etc etc

          Ah, which means you have no proof that 1920-1921 was a short recession, or even a recession at all.

          No proof that the 19th century was any sort of era of prosperity.

          No proof that any Austrian business cycle ever occurs (since one requires a real output measure to demonstrate booms and bust with reduced
          investment).

          All in all, well done.

          • Major_Freedom says:

            “Ah, which means you have no proof that 1920-1921 was a short recession, or even a recession at all.”

            AHA! That means you admit it was a short recession IN YOUR OWN TERMS (i.e. “output”, “employment”, etc).

            “No proof that the 19th century was any sort of era of prosperity.’

            AHA! So you admit pre-Keynesian times were a time of prosperous growth in your own terms!

            “No proof that any Austrian business cycle ever occurs (since one requires a real output measure to demonstrate booms and bust with reduced
            investment).”

            AHA! So you admit that it is the government that has brought about the business cycles we have observed using your own terms.

            “All in all, well done.”

            Thanks for all those admissions!

            • Ken B says:

              I know conditionals are hard MF, but this is weak even for you.

              • Major_Freedom says:

                Maybe soon you’ll realize what I am actually doing.

              • Flashman says:

                If only MF’s detractors knew him better, they would hate him even more.

              • Flashman says:

                If only MF’s detractors understood him better they would hate him even more.

              • Major_Freedumb says:

                If only MF supporters could not redundantly write the same pointless comment twice!

              • Major_Freedom says:

                If only they imitated me through usernames like you. Then they would be true number one fans, like you.

              • Major_Freedumb says:

                Well you come across to me as nothing but an Austrian crackpot. You are very dumb when you don’t want to concede points in the face of evidence. Therefore, my username is an allusion to your tomfoolery.

              • Major_Freedumb says:

                “When events change, I change my mind. What do you do?

                When the facts change, I change my mind. What do you do, sir?

                When my information changes, I alter my conclusions. What do you do, sir?

                When someone persuades me that I am wrong, I change my mind. What do you do?”

                – John Maynard Keynes

                You have clearly failed in every respect to this quote. You’re just trying to ride off the coattails of lousy predictions from Faber, Murphy, and Schiff. We don’t live in the 19th century anymore and your methodology is primitive at best. At least Bob is more intellectually honest and humble about his errors than you, Faber, or Schiff.

              • Major_Freedom says:

                Major_Freedumb:

                “Well you come across to me as nothing but an Austrian crackpot.”

                You come across to me as nothing but an anti-Austrian crackpot.

                “You are very dumb when you don’t want to concede points in the face of evidence.”

                What evidence? You haven’t shown any.

                “Therefore, my username is an allusion to your tomfoolery.”

                It’s flattery.

                “When events change, I change my mind. What do you do?”

                Don’t parrot bad economist’s expressions?

                “When the facts change, I change my mind. What do you do, sir?”

                Economic laws don’t change.

                “When my information changes, I alter my conclusions. What do you do, sir?”

                I realize the difference between logical necessity and empirical happenstance.

                “When someone persuades me that I am wrong, I change my mind. What do you do?”

                You don’t abide by this, because you have been shown to be wrong and yet you’re not changing your mind.

                “You have clearly failed in every respect to this quote.”

                No, you failed. I succeeded.

                “You’re just trying to ride off the coattails of lousy predictions from Faber, Murphy, and Schiff.”

                What predictions?

                “We don’t live in the 19th century anymore and your methodology is primitive at best.”

                You’re using methodology that PRE-DATES the 19th century.

                “At least Bob is more intellectually honest and humble about his errors than you, Faber, or Schiff.”

                Bob also did not predict hyperinflation by 2013.

              • Major_Freedumb says:

                Unlike you, at least Keynes knew how to do math.

                http://www.youtube.com/watch?v=13L2a0hU-mg

                You succeeded? Yes, you succeeded at making yourself look like the biggest buffoon in the whole Austrian school of economics. No wonder the general public doesn’t buy your crap and why Peter Schiff often yells over people with opposing opinions on his dumb show.

                Your bizarro economics has been refuted and has been shown to be obsolete and a complete joke to many.

              • Major_Freedumb says:

                Let me ask you one question, MF. Are you not concerned about the amount of private debt that’s out there now? The public debt in comparison isn’t so much of a problem.

              • Major_Freedom says:

                Major_Freedumb:

                “Unlike you, at least Keynes knew how to do math.”

                What math?

                “You succeeded?”

                Yes. Rather easily and handily with you actually.

                “Yes, you succeeded at making yourself look like the biggest buffoon in the whole Austrian school of economics.”

                Coming from you, that’s a tremendous compliment. Thank you!

                “No wonder the general public doesn’t buy your crap”

                You’re right. I am the record holder for yet another person in the world of whose output is not purchased by everyone who lives, but only a particular group of people that constitutes a market.

                “and why Peter Schiff often yells over people with opposing opinions on his dumb show.”

                I am not Peter Schiff.

                “Your bizarro economics has been refuted”

                By who?

                “and has been shown to be obsolete and a complete joke to many.”

                You’re a joke.

                “Let me ask you one question, MF.”

                OK, I’ll let you ask a question over the internet on an anonymous board.

                “Are you not concerned about the amount of private debt that’s out there now?”

                I am not concerned with the debt per se, I am more concerned with what is causing the debt. Debt in and of itself is not a problem. In a free market it is a voluntary contract between consenting parties.

                Only anti-economic illiterates would worry over the numbers divorced from their human grounding.

                “The public debt in comparison isn’t so much of a problem.”

                Of course not, because it’s government debt, and mommy and daddy government can go into any amount of debt to children like you.

              • Bob Roddis says:

                Major_Freedumb:

                Let me ask you one question, MF. Are you not concerned about the amount of private debt that’s out there now?

                I thought we went through all that last week above.

                I submit that when the banking cartel (government created and protected) creates funny money loans out of thin air, calling such loans “private debt” without an asterisk is misleading. Further, such debt is central to Austrian analysis, a major fact invariably ignored and/or distorted by Keynesians such as LK, Krugman, Keen etc….

                http://consultingbyrpm.com/blog/2013/03/krugman-judges-people-on-their-record.html#comment-59066

                Do you have learning disability?

              • Bob Roddis says:

                MF wrote above:

                The “Minksy moment” is in fact a core component of ABCT. A boom caused by the government bringing about artificially low interest rates obviously expands debt more than what otherwise would have taken place in a free market.

                http://consultingbyrpm.com/blog/2013/03/krugman-judges-people-on-their-record.html#comment-59073

                Over and over and over and over and over again.

              • Major_Freedumb says:

                Bob Roddis, I have an intuitive feeling that you’re one of MF’s sycophants. How does it feel to be part of a highly discredited cult?

                MF, ever heard of market failure?

                Nice try, you two fools.

              • Major_Freedumb says:

                For the record Bob, you left out a word in your comment. It should have read like this.

                “Do you have a learning disability?”

              • Major_Freedom says:

                Major_Freedumb:

                “Bob Roddis, I have an intuitive feeling that you’re one of MF’s sycophants.”

                Major_Freedumb, I have a strong felling that you are somebody’s sycophant, precisely because you view Roddis as a sycophant.

                “How does it feel to be part of a highly discredited cult?”

                Not sure, we’re not Keynesians.

                “MF, ever heard of market failure?”

                Yes. Ever heard of disrespecting other people’s plans regarding their own property?

                “Nice try, you two fools.”

                Except you’re the fool here.

                “For the record Bob, you left out a word in your comment. It should have read like this.”

                “Do you have a learning disability?”

                Ah yes, because when you can’t address the arguments, when you lack the intellectual capacity, you have to resort to grammar, to feel superior.

                Nice try you fool.

              • Major_Freedumb says:

                Listen to Bryan Caplan, a former Austrian, before you embarrass yourself even further.

                http://econfaculty.gmu.edu/bcaplan/whyaust.htm

              • Major_Freedom says:

                Major_Freedumb:

                “Listen to Bryan Caplan, a former Austrian, before you embarrass yourself even further.”

                Further? Wouldn’t that imply I have embarrassed myself a first time?

                Before you are embarrassed by me even further, read the RESPONSES to Bryan Caplan:

                http://archive.mises.org/841/caplan-and-responses/

                Caplan makes a number of errors.

              • Major_Freedom says:

                Major_Freedumb:

                But please don’t let that stop you from embarrassing yourself in declaring to the world a belief that what you have not even read but linked to, hasn’t already been actually read by your intellectual superiors long before.

                I demand more ad hominem! You’re slipping. You didn’t even call me a name in that last post.

              • guest says:

                Don’t forget the exported inflation:

                Fed Injects Record $100 Billion Cash Into Foreign Banks Operating In The US In Past Week
                http://www.zerohedge.com/news/2013-03-09/fed-injects-record-100-billion-reserves-foreign-banks-operating-us-past-week

    • Major_Freedom says:

      Oh LK is much too careful to use the word “imposed”. He makes sure to use “adopted”, so as to convince people, most likely and mainly himself, that fascism and laissez-faire capialism are as compatible with each other as fascism and Keynesianism. That way, the synergy between Nazism and Keynesianism won’t appear as unique, and thus devastating, to Keynesianism.

      “Hey look! Fascist dictators adopted laissez-faire! I have evidence! That means you can’t knock Keynesianism without being hypocrites!”

      What a fool. He’s really going down fast in the quality of his postings. They’re evolving into not much more than grunts and temper tantrums.

      • Lord Keynes says:

        See above.

        Hayek:

        “[A]s long-term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. At times it is necessary for a country to have, for a time, some form or other of dictatorial power. As you will understand, it is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally, I prefer a liberal dictator to democratic government lacking in liberalism.

        http://coreyrobin.com/2012/07/08/hayek-von-pinochet/

        • Major_Freedom says:

          See above? YOU see above. I’ve already responded to that.

  15. Bob Roddis says:

    Since I’m not the attorney for Hayek’s estate or Mises’s estate, I don’t feel I have an obligation to explain away any and all dumb things they might have said during their lives. That being said, I’m not convinced that a “benevolent” dictator who imposed laissez faire would be more illegitimate than the present Keynesian regime in the U.S. which is thoroughly unconstitutional.

    Further, since a) I don’t support dictatorship; 2) I didn’t predict imminent inflation in 2009; and 3) I’ve been applying Austrian concepts to asset bubbles and non-industrial investment bubbles since 1974, I fail to see the relevance of finding ancient mistakes and omissions in Austrian analysis when we are discussing what is wrong NOW and what should be done NOW. Obsessing about such errors is nothing but Keynesians trying to change the subject as they lose the current debate and avoid directly engaging Austrian analysis.

    • Major_Freedom says:

      But Roddis, on page X, in the book Y, from author Mr. Z, there is a sentence there that has the words “interest rate” without an “s”.

      Clearly the philosophical and economic edifice of Austrianism is obliterated, demolished, and smashed into a million bits.

      There is no need to engage the mentally challenging concepts that call into question one’s emotional attachment to mommy and daddy government. Stop bringing them up. I don’t want to have to think about self-responsibility. It’s easier to sleep at night knowing that there is a thug willing to steal for me if need be. You’re making me feel uncomfortable, and that must mean you’re wrong in some way.

  16. Razer says:

    I can’t tell who had their ass handed to them worse, Ken or LK. Talk about an intellectual ass whooping. Damn, LK, I admire your bravery. You’re the Gilligan to everyone’s Professor around here, yet you persevere being humiliated post after post gamely. Please keep up the hard work. It is endlessly amusing to see you stripped bare like this.

    PS. Is there anywhere on the net where Keynesians can put up a good defense against Austrians. I’ve yet to see anything but one-sided routes against them. Surely there’s better defenders of Keynes and his authoritarian ideas than what I see on the forums I’ve been to.

  17. Bob Roddis says:

    Surely there’s better defenders of Keynes and his authoritarian ideas than what I see on the forums I’ve been to.

    I think that is debatable.

    http://larspsyll.wordpress.com/2013/03/04/paul-krugman-on-gold-buggism-so-right-so-right/

  18. Bob Roddis says:

    Toward the end of the show, things got especially tense. Scarborough was saying that America faces a “generational crisis” with Medicare and Social Security because of its aging population when Krugman could be heard sighing.

    “You know what?” Scarborough snapped. “If you could just stop from saying, ‘wow’ and let me just finish a point, Paul. You and Al Gore really need to talk about it, because, again, this is a real problem. If people don’t agree with you 100 percent of the time … you always feel like you have to take the cheap shots. So if I could just finish, I’ve listened to you.”

    http://www.huffingtonpost.com/2013/03/05/joe-scarborough-paul-krugman-charlie-rose_n_2810389.html?utm_hp_ref=business&ir=Business

    But Scarborough wouldn’t be on Charlie Rose or host an MSNBC show if he weren’t a Keynesian too.

  19. Bob Roddis says:

    Surely there’s better defenders of Keynes and his authoritarian ideas than what I see on the forums I’ve been to.

    I started posting comments to lamebrain and dishonest Keynesian distortions of the Austrian School starting in May 2009 after reading this gem from Yglesias:

    http://thinkprogress.org/yglesias/2009/05/05/192820/the-right-and-austrian-business-cycle-theory/?mobile=nc

    At one point, there were over 200 comments to that post but they have since been erased. Keynesians NEVER address either the Austrian concept of economic calculation nor the libertarian concept of the NAP.

    LK is a relentless example of this again on this page. As with all Keynesians, he will always attempt avoid engaging Austrian or libertarian analysis by changing the subject to some essentially irrelevant ancient dispute about what someone might have said or not said 80 years ago in a desperate attempt make our easily understood and easily applied concepts appear unintelligible. This is the same reason Keynes did not engage Austrian concepts in “The General Theory”. This is the same reason that Krugman and DeLong always call us names. We’ve won.

  20. Gamble says:

    William Anderson,

    Dishonest at best, nefarious more likely, satanic as worst.

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