[UPDATE: Some people got it in the comments, but just to be sure: This “apology” was a joke; I was just mimicking Krugman’s pseudo-apology in this piece. So if you knew right away that Krugman would never accept the below from Schiff or me, then do what you will with his own mea culpa…]
At this point, we could generate Paul Krugman’s blog posts with a gerbil, 3 index cards, and some twine. All you really need to write is, “The other side made bad predictions. They haven’t changed their policy recommendations. They are stupid, evil, or both. Winning.”
So I wonder if Krugman would move on with his life, if guys like Peter Schiff and me announced the following mea culpa:
[HYPOTHETICAL ADMISSION OF ERROR.] Yes, I made a mistake back in 2008, over Bernanke’s use of the financial crisis to push through a huge bailout of Wall Street, even though the arguments used to justify this “rescue” made no sense. The Fed started paying interest on excess reserves, at the same time they told the public its huge balance sheet expansion was all about maintaining lending to small business. This struck me at the time as banana-republic behavior, and still does.
However, I wrongly believed that markets would look at it the same way, and that they would lose faith in the Fed’s commitment to low inflation, driving up interest rates on our debt. Instead, bond investors discounted the cronyism, and acted as if they believed that the Fed would eventually pull itself together and start behaving responsibly. The jury’s still out on that, but clearly my short-run prediction proved wrong.
I have two questions for my readers:
(1) Does anyone think Paul Krugman would agree that the above was a candid acceptance of our mistake, and drop the subject?
(2) Does anyone know why I worded the above, the way I did?