Murphy Twin Spin Krugman Kracking
Ah, the best birthday present a boy could hope for! As a pure coincidence, my independent critiques of Krugman run on the same day.
In this piece at Mises.org, I take on Krugman’s recent thoughts on the Fed and employment data. An excerpt:
Steve Horwitz does a good job explaining why Krugman’s understanding of US banking history is flawed, because we didn’t have laissez-faire banking in the late 1800s. But we don’t even have to rely on such explanations for the matter at hand. Remember, these data weren’t pulled from Krugman after a session of waterboarding. He volunteered them as if they were somehow supposed to embarrass the critics of the Fed. What would the numbers have to look like, for Krugman to have admitted, “Hmm, it seems like for once, empirical reality has turned against my Keynesian nostrums”? Would the post-Fed panics have to be three times as bad?
Then over at the Institute for Energy Research (IER), I have a post talking about Krugman’s Solyndra / JP Morgan commentary. I had written this in the midst of a week where I gave up caffeine, and it shows. Look at Angry Bob:
Paul Krugman is a Nobel-winning economist with expertise on international trade, yet he has a disturbing habit of pontificating with confidence on matters where he is either deliberately misleading or is simply ignorant of the basic facts. I have previously documented this habit when Krugman commented on the Waxman-Markey cap-and-trade bill, and more recently when he carelessly repeated “facts” about mercury emissions that were obviously nonsense to anyone with common sense.
Yet even in these examples, one had to actually know the relevant literature to be able to uncover Krugman’s misleading and/or simply false claims; the layperson wouldn’t really know where to begin. It’s rare that Krugman says something that is blatantly, demonstrably false; he usually covers his tracks pretty well, so that his fans will think Krugman’s critics are simply nitpicking and demonizing the poor guy.
Well, none of that applies to Krugman’s recent commentary on J.P. Morgan’s $2 billion trading losses.
As Tyler Cowen says, do read the whole thing.
Welcome back to Mises.org, Bob. Missed your articles!
Wow, your Institute for Energy article laid the smack down. Fist pump.
I liked the Mises article even better. So full of win. You’re right, how incredibly ignorant does one have to be to not only post data that shows the panics were worse post-Fed than pre-Fed, but to intrepret that data as somehow proof that panics were worse pre-Fed than post-Fed? Is Krugman on some sort of medication?
Money quote:
“That word “say” in his quotation makes it sound as if Krugman threw a dart at Romer’s left column, and picked the panic that happened to come up. But no, the Panic of 1907 is the worst one of the pre-Fed era shown in Romer’s list. With as much justification, Krugman could have written the following summation instead: “So the second-worst recession of the Fed era — which we’re experiencing right now even though the guy I said there’s nobody I’d rather be Fed chief has been at the helm the whole time — is already worse than the absolute worst episode from the pre-Fed era. But hey, as long as this recovery continues — and I often warn that we are on the verge of disaster if Republicans take over — we’re not doing that much worse. It’s not like right now we’re anywhere close to being as awful as under the Great Depression, which happened 20 years after the Fed was formed to prevent things like the Panic of 1907.””
Gold.
I posted this chart over on Sumner’s blog, that shows pretty much the same thing as you showed at Mises.org, but mine is less in your face clear.
You can see that 2006-2008, even though “aggregate demand” was still rising all nice and smooth and according to status quo fallacy trend, it is still the case that employment in the capital intensive industries such as construction and durable goods, were already in a downward trend, while employment in the less capital intensive stages such as retail and service, were on an upward trend.
MUR-PHY! MUR-PHY! MUR-PHY! MUR-PHY!
*pumps fist wildly in the air*
Great articles all around.
“As Tyler Cowen says, do read the whole thing.”
Bob, you’re irony is soo subtle and soo great. I mean, seeing as how Cowen NEVER reads the whole thing…
Yet het still says that he “read it”.
The Mises.org article is so good I almost forgot there is video of you shirtless.
That video of Bob shirtless was so good I almost forgot he wrote articles.
All this talk about Bob being shirtless I almost forgot this was a family oriented blog.
Major, is Bob shirtless not family friendly? Remember, God made us in his image
A good comment by Salerno. Do you agree with him?
http://bastiat.mises.org/2012/05/2-98-cheers-for-bob-murphy/#comment-575
Yes.
Do you intend to give up caffeine for good? If so, that’s awesome.
No way.
This was my kind of week. One of the more enjoyable weeks on the blog in a while.
Or I should has been my kind of weeks. It’s been so good I thought it was over already.
What is my deal? It should say “This has been my kind of week.”
As a regular reader of this blog, I cannot help but wonder what Daniel Kuehn will have to say on this one.
Happy Birthday, by the way!
Here’s another article that supports your IER commentary:
http://www.washingtonpost.com/opinions/forget-bain-obamas-public-equity-record-is-the-real-scandal/2012/05/24/gJQAXnXCnU_story.html?wpisrc=nl_opinions
Unless I’m missing something, I would like to suggest a correction which would make Murphy’s point even stronger:
“How do you like that? By Krugman’s own admission, the two worst panics occurred after the Fed was formed.”
In fact, according to Krugman’s numbers, the *four* worst panics occurred after the Fed was formed, 1920, 1929, 1937, and the current slump.
Oh my gosh Jeffrey! I don’t know how I missed that.
I’m going to sleep on this and look again tomorrow, but I think you’re right. The reason I’m resisting it, is that I’m trying to realize what made me think 1907 would be #3. I guess it was because it was the biggest in the first column, and I forgot to check if there were other ones pre-Fed…
keywords: gold standard
Keywords: Pre-1913 was even closer to a real gold standard.
Thus: Panics got worse when we moved further away from a real gold standard.
Conclusion 1: The closer we get to a real gold standard, the smaller economic panics become.
Wrong!
You’ve just won a trip to Greece.
False!
Greece didn’t acquire problems due to not being able to print their own money, since I can’t print my own money either, and I’m not going bankrupt.
Greece’s problems arose because their government lied and lied and lied.
PS Do I get to pass by Zimbabwe during my trip to Greece? I hear they sell Zimbabwe dollars as wallpaper.
MamMoTh what can you possibly mean by that? You might as well tell Jeffrey, “Key words: thunderstorms.” I mean, I bet there were some serious thunderstorms during 1920. Clearly that must be why that panic was so bad, just like “gold standard” explains why the 1920 panic was worse than the 1907 one…
I thought about it, but then decided to give him (and you) a clue.
Clues that show a misunderstanding about panics, in that they got worse when we moved away from a real gold standard?
Quite the opposite of course
No, it’s the opposite of what you are saying.
The empirical data is clear, unless you want to claim it’s inaccurate.
No, quite the opposite
No, it’s the opposite of what you are saying.
The empirical data is clear, unless you want to claim it’s inaccurate.
MF just say “Gold standard rulz, times infinity.” I imagine that will settle it.
Oh Bob, and after all those ordinal number posts over at Landsburg you don’t still think just a single infinity will do it, do you?
Those were my favorite posts. It shows that Landsburg not only believes in God, but the Devil.
Considering the type of person Mammoth is, he’ll probably just say “fiat money rulz, times infinity…plus 1”.
I am actually floored how Mammoth blatantly rejects the fact that the four worst declines occurred after the Fed was created, which was a movement away from a real gold standard.
I was hoping he’d eventually say something other than merely repeating the same falsehood over and over, by, you know, making a case.
Maybe you’re right. When someone looks at numbers, and they see something that isn’t even there, then maybe there is no point in engaging.
Now I understand why Murphy rightfully considers Ken B a d-bag.
Ken B, you’re such a debbie downer. I bet you’re a hoot at parties, correcting people’s grammar.
Someone needs a better hobby.
MF:”Now I understand why Murphy rightfully considers Ken B a d-bag.”
HA! Wrong again. A d-bag times infinity thank you very much.
Let me remind you that the topic, as in the original Krugman article, is bank panics.
Let me remind you that the topic actually under discussion is this post from Krugman:
http://krugman.blogs.nytimes.com/2012/05/13/the-cost-of-pre-fed-panics/
which he used as a metric to estimate the extent of how bad the panics really were for the population.
We’re looking at the same data he is, and noticing that the top 4 worst declines occurred after the fed was created.
Note, there were 7 such panics pre-Fed, from 1887-1910, a 23 year period. This was a fractional reserve banking system period, not a rela gold standard. But the gold standard did put more limits on the banks from expanding credit, which is why:
Going 23 years after the Fed, from 1914-1937, there were 7 panics again, and they were WORSE. Why were they worse? Because with the Fed, the banks can get away with expanding more credit.
Over the next 23 years there were 5 panics. Then the next 23 years had 4 panics. The latest one is the worst since the Great Depression.
So not only have the panics not stopped, as was promised, but the panics have gotten much worse after the Fed.
You two are working hard on Bob’s infinity suggestion, aren’t you?
Prescience Bob? Or experience?
Ken B:
HA! Wrong again. A d-bag times infinity thank you very much.
Nope, that’s wrong according to my made up space language.
A d-bag times infinity…plus 1.
See how one has to point out you are wrong about something? It doesn’t matter what it is. You’re wrong. Why? Because I say so.
Ken B:
You two are working hard on Bob’s infinity suggestion, aren’t you?
HA! Wrong again. It’s “times infinity.” Not just infinity.
keywords: bank panics
Key words: Staying on topic of economic declines.
Economic declines are worse than bank panics, all else equal, which is why even Krugman used GNP as a proxy for how bad the panics were.
How’s Zimbabwe doing these days? They must be starving what with so few zeroes on their dollar bills now.
hint: Romer’s table is not about bank panics.
Very good, Mammoth. Congrats on finally joining the topic of discussion.
Krugman’s original point was about the power of the Fed to prevent bank panics.
Clearly, the Fed didn’t have that power until the US went off the gold standard domestically.
Why you insist in addressing a different issue, whilst unsurprising, is beyond me times aleph to the power of aleph
The topic under discussion is Krugman’s second, follow up post.
The Fed didn’t stop bank panics. And not only that, but using economic declines as a proxy, bank panics got WORSE after the creation of the Fed.
The fact that the Fed was still somewhat tied to gold post 1913 is why the panics and declines were less worse than they would have been, and why the latest panic/decline, under no gold restraint whatsoever has been the second worst, and I expect history will conclude it was the worst, panic/decline in history.
Now, you can continue to try to derail this discussion into a discussion of 19th century, fractional reserve, not real gold standard bank panics, but you’d still be wrong, because the panics were WORSE post Fed than they were pre-Fed.
The bank panics of the 19th century were already bad enough because of the movement away from a real gold standard as takes place with fractional reserve banking. But couple that with a central bank, which is a movement even further away from a real gold standard, and it explains why the bank panics got even worse.
Wrong. Krugman’s point was about bank panics.
All the rest, you’ve made it up.
Wrong. Krugman used economic declines as a proxy to measure the extent of just how bad the panics were.
The point about bank panics was already addressed.
The topic at hand is about Krugman’s second post, the one containing the data Murphy addressed.
We’re not talking about bank panics. Stop evading. We’re talking about Krugman’s post on economic declines.
All the rest of what you’re peddling, is a red herring.
Then why did you say this:
http://consultingbyrpm.com/blog/2012/05/murphy-twin-spin-krugman-kracking.html#comment-38905
You made up the claim that the 4 worst bank panics didn’t occur after the fed was created.
You’re denying empirical reality, unless of course you have an argument that shows the data is wrong. But you haven’t, which means you’re just blowing hot air as usual.
No, Krugman’s point was about bank panics, not about economic slumps.
I thought the title of Krugman’s article, and its first line, was a good hint that it was about bank panics, not economics slumps.
No, Krugman’s point we’re addressing was about economic declines, not ban kpanics.
I thought the data he included in his second post, Murphy’s reference to it, and the subsequent discussion about it, made that perfectly clear.
Krugman’s point is perfectly clear from the title and first line of his post.
So I couldn’t care less if you and Murphy want to discuss something else than what Krugman’s post was really about.
It’s just that you should leave Krugman out of the discussion. For once.
Krugman’s point about economic declines was perfectly clear in his second post – the one that is actually being addressed.
I don’t care about what you think, I don’t care that you want to talk about Krugman’s first post, which is consistent with the Austrian theory, as well as the perils of moving away from a real gold standard.
You were the one who interjected into this discussion that was already taking place. Murphy made a post about Krugman’s data on economic declines.
Everything else you’re making up and is irrelevant.
Murphy: Krugman on the Fed and Banking Panics
Just shut up please.
Murphy: Here is Krugman’s data on economic declines. Here is what I think about that data, because it doesn’t show what Krugman claims it shows, and actually shows consistency with Austrian theory. Oh look, there is Major_Freedom staying on topic and writing what he thinks. Oh look, there’s Mammoth trying to derail this discussion of Krugman’s economic decline data, and delve into something other than the topic at hand, which is still entirely consistent with Austrian theory.
You shut up.
Murphy: Krugman posted the following regarding financial panics and the US central bank.
You shut up.
Which he called economic slumps, as per his own writing:
So some of those pre-Fed panics were worse than the big slumps of 1974 and 1981, although far short of Great Depression stuff.
You shut up
If you could read you would know the subject still is BANK PANICS, as Murphy acknowledged.
Now learn to read and shut up.
Which Krugman then examined by way of measuring the extent of the economic slump, as per
“So some of those pre-Fed panics were worse than the big slumps of 1974 and 1981, although far short of Great Depression stuff.”
You shut up.
If you could read you would know the subject still is BANK PANICS, as Murphy acknowledged.
Now learn to read and shut the fuck up.
Murphy “acknowledged” the data Krugman posted in his second blog post, regarding economic slumps. That was the topic at hand.
Krugman used panics and slumps interchangeably by using economic slumps to characterize the bank panics.
You can’t read.
And you shut up.
No, Krugman’s subject was still is BANK PANICS, as Murphy acknowledged.
You are the ones using slumps and bank panics interchangeably, which only proves that besides not being able to read and count, you don’t understand the difference between them.
No, the topic being discussed was the number and extent of economic slumps, as Murphy posted.
Krugman used bank panics and slumps interchangeably. It’s why he compared slumps and panics, by pointing to GNP percentage declines.
You are the one falsely claiming this discussion is about bank panics but not slumps, despite Krugman linking to economic slump data, despite Murphy responding to that economic slump data.
You can’t read, and you can’t count.
No, Krugman’s point was about bank panics, as Murphy acknowledged. Period.
If you can neither read or count, it’s your problem.
No, Krugman’s point in his second post was about economic slumps. Period.
Murphy addressed the data interpretation in that post. Period.
You’re talking about bank panics, when Krugman went further and talked about the extent of those panics as pertaining to the size of the economic slump.
You can’t read, and you can’t count. Period.
No. Here’s the evidence:
Krugman: Panics Happen
Krugman: The Cost of Pre-Fed Panics
Murphy: Krugman on the Fed and Banking Panics
3 panics
0 slump
Learn how to read and count and shut up.
Period.
Wrong.
You even said that Krugman said “it” wrong, which means you’re not even talking about what Krugman did say, you’re talking about what you hoped he would have said.
Here’s the evidence:
Krugman: Panics happened.
Krugman: How bad were they Here’s data on the extent of the slumps.
Krugman: See?
Murphy: Krugman’s data on economic slumps is actually a vindication of Austrian theory, because the top 4 bank panics, as measured by Krugman as economic slumps, were worse post Fed than pre Fed.
QED
Mammoth: Bank panics Derp.
Learn how to read and count and shut up.
Period.
That’s the proof Murphy can’t read either. We already agreed on that.
So shut up and stop embarrassing him as well.
Krugman used the word slumps. That’s why I did.
– Panics Happen
– The Cost of Pre-Fed Panics
Why on Earth would anyone think these posts are not about panics but slumps?
The costs of the panics are being addressed. The costs are the economic slumps, according to Krugman, and that is the topic of debate.
The 4 worst bank panics, as measured by the costs of them, in terms of economic slumps, took place after the Fed was created.
Why on Earth are you talking about bank panics only, which is still entirely consistent with Austrian theory and the problems that arise when moving away from a real gold standard, into fractional reserve banking?
MF, why are wasting your time on a person that can’t read?
From Krugman’s second post:
He didn’t ask you anything.
He didn’t have to.
MF, why are wasting your time on a person that can’t read?
So that he can learn to read.
None of you can read.
All of us can read fine. It’s just you that can’t read.
Krugman: Panics Happen
Krugman: The Cost of Pre-Fed Panics
Murphy: Krugman on the Fed and Banking Panics
QED
Krugman: Panics happened.
Krugman: How bad were they? Here’s data on the extent of the slumps.
Krugman: See?
Murphy: Krugman’s data on economic slumps is actually a vindication of Austrian theory, because the top 4 bank panics, as measured by Krugman as economic slumps, were worse post Fed than pre Fed.
QED
Mammoth: Bank panics Derp.
Krugman: Panics Happen
Krugman: The Cost of Pre-Fed Panics
Murphy: Krugman on the Fed and Banking Panics
QED
Count the words “panics” and count the words “slumps”
And then shut the fuck up.
Look at the chart of data Krugman posted in his second blog post. Look at Krugman saying
“So some of those pre-Fed panics were worse than the big slumps of 1974 and 1981, although far short of Great Depression stuff.”
And realize that by panics, Krugman meant slumps.
Then realize that regardless of all this, the topic of discussion is the data Krugman posted on economic slumps, not your derping over bank panics per se.
Then shut up, again.
So you can’t read and you can’t count either?
No, you can’t read, and you certainly can’t count.
I can count to 4. You believe 4 means zero.
You can’t read, you can’t think, you can’t do much of anything except derp can you?
My point, you can’t read and you can’t count.
QED
Mammoth, you can’t read and you can’t count.
I can read and I can count.
QED
You can’t read.
You can’t count.
You can’t think.
I wonder if there is something you can do.
Maybe you can make the blog collapse.
That would be great!
Be my guest
You can’t read.
You can’t add.
You can’t think.
You can’t do anything except be wrong all the time.
You can collapse this blog for yourself by disappearing.
Keep trying plagiarist!
Tear down the fucking blog!
The plagiarist calls me a plagiarist? Hilarious.
If you want the blog torn down for yourself, simply go. You will never succeed the way you are going about it.
I’ll call you anything I want.
Unlike you, I’m ready to do it face to face. Remember?
You said you agreed to stop making physical threats, remember?
It’s not a physical threat.
Just an invitation to play your silly games in real life, not on Murphy’s blog.
It was a physical threat.
You’re a worse liar than you are at reading.
Guys, seriously. If we were on a road trip I’d have to pull the car off to the shoulder at this point. I’ve already deleted 5 of your posts. I can’t believe we have to do this.
No way.
Just an invitation to play your stupid games in real life, not on Murphy’s blog.
It was a physical threat.
You’re a worse liar than you are at reading.
“If we were on a road trip I’d have to pull the car off to the shoulder at this point”
Funny, I think I may have just finished filling up the graves in the Nevada desert.
Unlike you Queen Freedom, I can read
I can read the word slumps that Krugman used.
1
Krugman: Panics happened.
Krugman: How bad were they? Here’s data on the extent of the slumps.
Krugman: See?
Murphy: Krugman’s data on economic slumps is actually a vindication of Austrian theory, because the top 4 bank panics, as measured by Krugman as economic slumps, were worse post Fed than pre Fed.
QED
Mammoth: Bank panics Derp.
You are just showing Murphy can’t read either. But I guess he can count, unlike you.
Oh so now Murphy can’t read.
Pretty soon you’ll be the only one left in the world who can read.
Yeah, that makes more sense than all of us being able to read, while you can’t read.
It’s so much easier on your psyche, isn’t it?
You can’t read, and you can’t count.
I can read, and I can count. Murphy can read, Murphy can count.
That’s right, he can’t read either. Probably a side effect of his Krugman obsession.
Murphy can read. I can read.
It’s you that can’t read.
Probably due to your Mosler obsession.
Guys it doesn’t matter. Whether we’re talking about bank panics or slumps, they got worse after the Fed was established. The only issue is how many of such things are worse, after the Fed was established. (2 if we’re talking bank panics, 4 if we’re talking slumps–I think. Doing this off top of my head.)
Mammoth if you want to say, “Krugman is a fool, he handled this all wrong, he should have made it about gold not about Fed,” OK go ahead and make that argument. But clearly Krugman is wrong, whether we use bank panics or slumps. We’re just quibbling over how to quantify his error.
You’re right, it doesn’t matter, if the point you are referring to is the point.
But if the point is messing with Mammoth, then there is a point, however pathetic, tedious, and wasteful it may appear.
I was wondering when Bob would chime in. That was getting ridiculous.
Murphy,
Yes, Krugman handled it all wrong and he does that often.
But no, it’s not the same at all. The Fed clearly has been able to prevent bank panics since the US went off the gold standard, but not slumps.
And Krugman will be the first to recognize the Fed is powerless to prevent slumps at least during a liquidity trap.
So to claim that he is somewhat implying the opposite is pure nonsense, as anyone obsessed enough with Krugman would know.
Clearly, he’s comment was about bank panics, not about slumps which are two different things.
Yes, Krugman handled it all wrong and he does that often.
So your problem isn’t with anyone here, it’s with Krugman. Haha
But no, it’s not the same at all. The Fed clearly has been able to prevent bank panics since the US went off the gold standard, but not slumps.
The slumps were less worse with the allegedly larger bank panics in the 19th century, and the slumps were worse with the allgedly smaller bank panics in the 20th century.
So to claim that he is somewhat implying the opposite is pure nonsense, as anyone obsessed enough with Krugman would know.
Clearly, he’s comment was about bank panics, not about slumps which are two different things.
Then why did he cite economic slumps to show the extents of the bank panics?
Yes, Krugman handled it all wrong and he does that often.
So your problem isn’t with anyone here, it’s with Krugman. Haha
That’s the kind of flawed reasoning you excel at.
I’m just restating your “I would have hoped Krugman said “it” differently, therefore he did say it differently” absurdity.
You are not restating anything.
It’s just your usual flawed thinking.
I agree, what you said was nothing.
You don’t know what I said because you can’t read.
You admitted to have read Krugman writing “slumps.”
Your problem is with him.
You don’t know the difference between economic recessions, and slumps accompanying bank panics, because you can’t read.
I know you don’t have much of a life and love being screwed in public, but I don’t have much time today, and more beautiful arses to play with.
Awww, you sound mad that you got demolished by people who actually understand the English language.
I know you like it deep up there, but I don’t have time for you now.
Sorry Mammy, I don’t play for your team. What you believe you “know” is really just your desire for it.