==> Alex Tabarrok relays some surprising facts about apartment hunting in Stockholm.
==> Tabarrok twin spin: Here he reviews a book on more effective altruism.
==> Overstock.com CEO Patrick Byrne was the “mystery guest” (via Skype) at Mises University this year. He pointed us to this Politico article, saying this reporter was the first mainstream one to fully grasp just how revolutionary blockchain technology will be. It goes way beyond Bitcoin. (Incidentally, if you’re new here, remember that I wrote a guide to Bitcoin with Silas Barta.)
==> Tom Woods interviews Gene Epstein on how he came to libertarianism.
==> Bryan Caplan 1, John Podhoretz 0.
==> I’m glad David R. Henderson caught the non sequitur in Krugman’s analysis of Greece. Specifically, Krugman argued that the current crisis is the fault of the rigid euro system, not the Greek government’s profligacy and overregulation, because after all the Greeks had high debt and stifling regulations 10 years ago. As David points out, uh, Krugman, they were also in the same euro system 10 years ago.
Let me pivot though and focus on something that doesn’t make sense to me. People have (rightly) ridiculed Krugman for this statement, quoted in David’s post:
ZAKARIA: Ken Rogoff on last week’s show actually said that you bared [sic] some responsibility here, because you advocated that the Prime Minister of Greece voted no, supported the no proposition, the referendum he took, in a sense defying the European creditors. The result of that was that he got worse terms. Do you think that’s fair?
KRUGMAN: Well, it’s certainly true that – I assumed – it didn’t even occur to me that they would be prepared to make a stand without having done any contingency planning.
So as I said, people have been making fun of Krugman for his overconfidence in the Greek government.
But here’s what I don’t get: Suppose Krugman’s assumption had been right, and the Greek government DID have a contingency plan, when they took his advice to stand firm (originally) against the troika. Well, even so, wouldn’t Krugman have had to know what that contingency plan was in order to say whether it was a good idea to reject the original bailout terms?
I mean, suppose Krugman’s brother-in-law calls him up and says, “Hey, I just got this job offer that pays $40,000, should I take it?” And then Krugman says, “Heck no, ask them for at least $50k.” Then the guy says, “OK I took your advice, and now I’m unemployed. Can I crash on your couch?” Krugman comes back and says, “Oh wow, when I told you to reject that initial offer and ask for more money, it didn’t even occur to me that you didn’t have another company waiting in the wings to hire you.”
Does that make any sense? Wouldn’t Krugman have to know not only that his brother-in-law had another offer, but also know what it was in order to sensibly advise him on whether to take the pending offer of $40k? For example, suppose the brother-in-law’s backup plan was a job paying $12,000. In that case, gambling with the $40k is pretty risky.
You think I’ve made my cutesy point, but I’m just getting warmed up here. Let’s start over. Krugman is acting like he’s got a pretty good handle on the Greek situation; he is quite confident in telling its officials what to do, and he’s quite certain he knows what caused the trouble, and what lessons the rest of the world should take from the whole episode. In that context, then, why can’t Krugman offer a Plan B to Greek officials, when they followed his advice and it blew up in their faces?
In summary, Krugman is saying something like: “I know so little about the actual Greek economy and fiscal situation that not only can’t I offer them a recommendation of what to do right now, but two weeks ago I was so ignorant that I assumed they had hidden information that would have rendered my advice useful to them.”
Am I being too harsh on the poor guy? I don’t think so. I think (as usual) his confident prognostications blew up in his face, and (as usual) he explains that it wasn’t his fault. It’s always somebody else’s fault.