…or so Paul Krugman would have you believe. On an unrelated business matter, I have been corresponding with someone (who wishes to remain anonymous) who told me the following in an email today:
Last night, my friend and I attempted to persuade Paul Krugman to debate the Austrians at his presentation on “Are We Getting the Change We Need?” at Baruch College. My friend politely asked Dr. Krugman to comment on Dr. Paul’s audit the Fed legislation, which he responded to derisively with, “Ron Paul wants to return to the gold standard” and “the Fed’s monetary policies are already audited.” My friend tried to emphasize foreign governments and foreign central banks but was interrupted by the moderator.
I later commented that the collapse is due to the failure of Keynesian economics, not free market capitalism, which was predicted by the Austrian school and asked if he would be willing to engage in an academic debate with Austrian economists. He dismissed the Austrian school as passe and incapable of explaining unemployment and preventing the Great Depression. I again asked politely if he would debate one of you since the Austrians correctly predicted the housing bubble, subsequent collapse and is growing in popularity. His answer was basically, “it sounds like intellectual snootiness…and it is…I have better things to do with my resources.” And so he spent his resources writing this on today’s NYT blog.
If it affects your verdict, my correspondent is a female but not a student. (I didn’t ask her her age, as my momma raised me better than that.) But her “friend” mentioned above (not sure if guy or girl) just graduated, so he or she must be pretty young.
I don’t know about you, but when Krugman said the people asking him about Austrian economists were less desirable than banana fungus, I was picturing redneck guys in their 40s wearing camo jackets, passing around Skoal and Glenn Beck’s latest book, and discussing their next deer hunt. It changes things a lot that at least one of his alleged hecklers was a recent graduate, and I tend to believe my correspondent when she says they were polite to Krugman.
(It’s possible the rednecks shouted things afterward, of course.)
I don’t know why even some libertarians (and no I’m not even referring to the recent spat) find it so taboo to occasionally remind people that an elite group is quite literally trying to take over the world. At Copenhagen we’ve got world leaders working on a global agreement to harmonize the intense regulation of energy markets, and today we’ve got an op ed in the WSJ from Gordon Brown and Nicolas Sarkozy calling for a global financial regulatory framework:
In regard to regulation, the EU has adopted a comprehensive set of new rules for the financial sector to avoid the repetition of the crisis: control over credit rating agencies, stronger capital requirements on complex products such as securitization, and strengthened deposit guarantee schemes. We have set up strict rules to make sure that compensation systems avoid excessive risk taking. We will also implement stricter capital rules for banks.
We also have agreed on a more efficient system for supervision of the financial sector within Europe to better monitor systemic risks…Banks must now hold sufficient capital, ensure liquidity, and reward only genuine value creation and not short-term risk-taking.
This crisis has made us recognize that we are now in an economy which is no longer national but global, so financial standards must also be global. We must ensure that through proper regulation, the financial sector operates on a level playing field globally.
There is an urgent need for a new compact between global banks and the society they serve:
A compact that ensures financial institutions cannot use offshore tax havens to negate the contribution they justly owe to the citizens of the country in which they operate—and so builds on the progress already made in ending tax and regulatory havens.
Therefore, we propose a long-term global compact that will encapsulate both the responsibilities of the banking system and the risk they pose to the economy as a whole. Various proposals have been put forward and deserve examination. They include resolution funds, insurance premiums, financial transaction levies and a tax on bonuses.
The fulcrum for their entire case is the ostensible fact that taxpayers have to bail out big financial institutions when they get into trouble. Well how do we know that is true? Let’s see what Brown and Sarkozy have to say about it:
We have found that a huge and opaque global trading network involving complex products, short-termism and too-often excessive rewards created risks that few people understood. We have also learned that when crises happen, taxpayers have to cover the costs.
That’s a rather odd way of putting it, isn’t it? Sort of like the guy returning home and telling his wife, “I have learned that when I stop at the convenience store, our checking account has to pay for numerous lotto tickets.”
I know, I know, none of this is conclusive. It’s entirely possible that all these political leaders really have the best of intentions, and they are just misinformed with faulty economic models. I mean, the only way we could ever really know for sure that there is a global elite who are truly plotting for one world government, is if one of them, oh I don’t know, published a book and literally admitted it. But that would never happen. I mean, you can’t expect, say, David Rockefeller to write the following in his memoirs:
For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as “internationalists” and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.
But if he were to do something like that, then you could stop calling me nuts for thinking there’s something to this one-world-government thing, right?
It comes from yours truly, but hey I am not going to disqualify myself in some faux attempt to avoid narcissism.
David Henderson was promoting my EconLib piece on geo-engineering, and “H” (I think he’s Q’s brother) said: “Why should I take seriously the opinions of people who don’t even believe that climate change is man-made or that it is a serious problem?”
H, go look at Tol’s survey article if you think I’m making things up. I was very surprised myself at how low the estimates were.
It’s ironic, isn’t it? You’re in the position of not believing the peer-reviewed models on the likely impacts of global warming. I hope you are not going to say Joe Romm has more credibility on forecasting economic impacts, than actual environmental economists.
That’ll show him!
After the previous post detailing my wimpy DC panel presentation, I am proud to showcase what will probably be used in the future to prove what a “nutjob” I am (once I get famous enough to be worth discrediting). A sample:
The “Texas summit of March 2005” refers to the “Security and Prosperity Partnership (SPP) of North America,” which came out of a meeting in Waco, Texas between President George W. Bush, Canadian Prime Minister Paul Martin, and Mexican President Vicente Fox. For the record, the federal government’s website has a special section devoted to refuting the (alleged) myths of the SPP, including the claim that the SPP is a prelude to a North American Union, comparable to the European Union. Yet despite the official protestations to the contrary, the global trend toward ever larger political and monetary institutions is undeniable. And there is a definite logic behind the process: with governments in control of standing armies, the only real check on their power is the ability of their subjects to change jurisdictions. By “harmonizing” tax and regulatory regimes, various countries can extract more from their most productive businesses. And by foisting a fiat currency into the pockets of more and more people, a government obtains steadily greater control over national—or international—wealth.
But if indeed key players had wanted to create a North American Union with a common currency, up till now they would have faced an insurmountable barrier: the American public would never have agreed to turn in their dollars in exchange for a new currency issued by a supranational organization. The situation will be different when the U.S. public endures double-digit price inflation, even as the economy still suffers from the worst unemployment since the Great Depression. Especially if Obama officials frame the problem as an attack on the dollar by foreign speculators, and point to the strength of the euro, many Americans will be led to believe that only a change in currency can save the economy.
For those who consider such a possibility farfetched, remember that one of FDR’s first acts as president was to confiscate monetary gold held by U.S. citizens, under threat of imprisonment and a huge fine. Yet nowadays, that massive crime is described as “taking us off the gold standard” which “untied the Fed’s hands and allowed it to fight the Depression.” The same will be said in future history books, when they explain matter-of-factly the economic crisis that gave birth to the amero.
Thanks for your attention. The tinfoil hats are on your left as you exit.
Wow I am not kidding, when I delivered my opening remarks on a recent Hill panel,* I thought I was incredibly animated and a fire-breathing laissez-faire radical. But as the video below shows…sorry, try again.
Really what happened is that:
(a) You are not seeing my two opening jokes that cracked the room up, and
(b) You are not seeing the literal hour of preceding remarks–some of which were incredibly monotone–from the first five speakers, who were all gung-ho about government investments in renewables and the wonderful Spanish experience. The room was packed with people who were speaking Spanish on their cell phones, kissing each other on the cheeks, etc. And here I can’t count to 10 in Spanish, and plus I like capitalism. Oh man what a party pooper. If you make it to the end of the second video, you’ll see I came just shy of advocating a carbon tax! (I actually don’t, but one could be forgiven for thinking I did.)
This is why I told my wife a few years ago: “Don’t ever let me tell you we should move to DC.”
* Yeah we refer to it as “the Hill.” If you don’t know what hill we’re talking about, you must not be a policy wonk who has a seat at the table. (Although I’m pretty sure they put me at the kids’ table with the other crazy relatives.)
BTW if you don’t mind, at least start playing the two videos so I can get more views than my boss for his video on Copenhagen. It’s all about job security. Thanks.
Oops I guess I shouldn’t have linked to his video… Doh!
So said Jeff Tucker when I told him about my decision to take a job where I would focus on the economics of climate change. What Jeff meant, of course, was that global warming (aka climate change) provided a justification not just for specific tax and spending measures, but could be applied for virtually any new government intervention one wanted. Just as the threat of terrorists allowed the government to take over airport security, impose tighter regulations on cash deposits at banks, and gain greater discretion in spying on Americans (and oh yeah, invade two countries), so too does the threat of climate change allow the government to impose tariffs in violation of standard treaties, tell you what light bulbs you’re allowed to use, and (as some academics have suggested) restrict how many children you can have.
Tom Friedman has written an op ed making the rounds titled, “Going Cheney on Climate.” Friedman proves just how prescient Jeff’s comment was:
In 2006, Ron Suskind published “The One Percent Doctrine,” a book about the U.S. war on terrorists after 9/11. The title was drawn from an assessment by then-Vice President Dick Cheney, who, in the face of concerns that a Pakistani scientist was offering nuclear-weapons expertise to Al Qaeda, reportedly declared: “If there’s a 1% chance that Pakistani scientists are helping Al Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response.” Cheney contended that the U.S. had to confront a very new type of threat: a “low-probability, high-impact event.”
Soon after Suskind’s book came out, the legal scholar Cass Sunstein, who then was at the University of Chicago, pointed out that Mr. Cheney seemed to be endorsing the same “precautionary principle” that also animated environmentalists. Sunstein wrote in his blog: “According to the Precautionary Principle, it is appropriate to respond aggressively to low-probability, high-impact events — such as climate change. Indeed, another vice president — Al Gore — can be understood to be arguing for a precautionary principle for climate change (though he believes that the chance of disaster is well over 1 percent).”
Friedman is at least consistent–he was almost a caricature of a hawk on terrorism (serving as Glenn Greenwald’s whipping boy), and he is also one of the leading media voices for action to restrict emissions.
But what of the standard liberal and conservative? Doesn’t the liberal recognize that the same non-falsifiable rhetoric* is being used in the War on Carbon as the Bush Team used for their wars? And how can the standard (neo)conservative object to the claimed necessity for urgent action? After all, the conservatives are defending the Iraq invasion even after the alleged threat was shown to be false! At least it’s still possible that the climate alarmists are correct.
* Note that I said the rhetoric is non-falsifiable, not the science.
Even if someone’s blog post or a news story drives you crazy, you can always skim the comments to see other people’s zingers. For example, take this WSJ story about all the experts and Nobel (Memorial) laureates who are defending the Fed’s “independnece” against Ron Paul’s pitchforked legions. (HT2 Bob Roddis who got it from LRC.) Most of the comments are pretty funny, especially this one:
I cannot believe the attitude of these “Populists” who want to audit the Fed. It doesn’t matter that 70% of the American people want an audit of the Federal Reserve. The American people are ignorant and can’t be trusted to look after their own interests. These 270 economists and academics are way more qualified to decide that the secret central bank needs no oversight whatsoever. After all, it is hard for the average boobus American to understand how the Fed can create money out of thin air and buy up any asset they want. I’m sure that these “academics” are totally unbiased and would never let their relationships or benefits from the current system influence their decision. After all, we’ve seen how honest and unbiased the climate research scientists are in their pursuit of the truth.
* I have been saying for years that pennies are stupid. I don’t pick up pennies (unless I dropped them and it would look like litter). If you disagree, what about a proposal to introduce a new coin that had the value of 1/1000th of a dollar bill? You can agree that would be dumb, right? Anyway my wife sent me this NPR story on the issue.
* Someone wanted me to dissect Andrew Gause’s claim that we should nationalize the Fed, not end it. I disagree strongly, but Gause’s arguments deserve more time than I can give. Discuss.