13 Mar 2013

While We Were Sleeping…

Economics, Humor, Krugman, Shameless Self-Promotion, Tom Woods 49 Comments

…someone emailed me to say that the KrugmanDebate pledge total is over $104,000! It may have been due to the heroic efforts of Tom Woods when he was guest-hosting Peter Schiff’s show. (I always picture Tom watching me and thinking, “Bob reminds me a lot of myself, when I was less famous.”)

So you make your actual pledge here. But, if you want more details, go to this headquarters site (which yes, I need to update). And, if you’ve never watched the below, well you’re in for a surprise.

49 Responses to “While We Were Sleeping…”

  1. Jonathan Finegold says:

    I wonder why Krugman has chosen to not even address this? He knows about it (he’s been told about it), so that’s not an excuse. Some people argue that he doesn’t want to give the Austrian School a platform, but this doesn’t make much sense since according to Krugman the Austrians (or Austerians, of which the Austrians are a part of) have already infected the minds of our government. Not to mention, if Krugman were to get the upper hand in the debate there’d be a real time shaming of an Austrian economist. It could go the other way, but I suspect that Krugman doesn’t think it would. The only explanation is that he doesn’t find a traditional debate as the best way to battle ideas — let’s be honest, they’re not. But, if this were the case then Krugman could propose an alternative way of debating, and he and you could even design some ground rules, set up the questions together, and pick the moderator. So, I really don’t get it, unless the truth is that Krugman is uncertain about the outcome of the debate.

    • Bob Roddis says:

      Krugman knows he’d lose the debate. He knows he knows nothing about Austrian analysis and after the debate, the whole world would know too.

    • Jake says:

      The answer is that Krugman is looking after his brand. He’s choosing not to put himself in a risky position where he has much to lose and little to gain.

      I love boxing, so let’s think about it in those terms. The key to getting rich and famous is to keep winning, but you have to fight tougher guys as you climb the ranks. The opponents are very tough once you reach the highest levels, and your reputation is always at stake. But those are the fights the fans clamor to see, the big money fights, and the increased risk of fighting a top-caliber opponent is compensated by the huge purses.

      Krugman is the champ right now; he’s got the fans, the money, the influence. He goes on the talk shows and rubs elbows with celebrities. As a pundit, his clout exists largely due to perceived credibility, which itself is due almost entirely to his perceived authority on all things economic. Without economics, Krugman is just another smart-mouth with a blog.

      Now along comes Murphy, wanting to test Krugman’s intellectual chops. And Murphy is a tough challenger. There’s an old saying, “styles make fights”, and Murphy knows Krugman’s style very well and has worked for years to find ways to beat it. Krugman probably has enough self-esteem to believe he can take Murphy, but he’s also smart enough to realize that he could get roughed up, or maybe even lose. If Murphy kicks the crap out of Krugman’s economic theory, it could mean bad news for Krugman’s credibility. And credibility is all Krugman really has; it’s his lifeblood.

      Murphy’s problem is, the fans don’t really know him that well (no offense Bob). And that’s why Krugman won’t put his “title” on the line: it’s dumb to stake everything you have against an opponent who poses a legitimate threat, but is relatively unknown. The upside is small: if Krugman wins, his fans won’t care much. Of course the champ can beat some no-name guy from the Internet! But if Krugman loses? It would be a major upset. And the fans do tend to be rather fickle.

      It all comes down to incentives, just like everything else. Krugman has little incentive to take this “fight”, because it’s not enough of a marquee match-up to justify the risk.

      • Matthew M. says:

        I hate to say you’re right, the pledges would probably have to be much higher, maybe even $1 Million before the media would remedy that problem of Bob Murphy being an unknown figure.

        Remember Peter Schiff has talked about debating Murphy but it hasn’t happened either. Schiff is much better known, more than enough to make up for his relative negatives (doesn’t have the $100k+ campaign or the depth of economic knowledge Murphy has).

        • JJ says:

          Schiff debate Murphy? Why would he do that? Do you mean Schiff wants to debate Krugman?

    • Lord Keynes says:

      “but this doesn’t make much sense since according to Krugman the Austrians (or Austerians, of which the Austrians are a part of) have already infected the minds of our government”

      No, Austerians are mostly just mainstream neoclassicals. You’re exaggerating the role of Austrians.

      Why should Krugman debate a marginal Austrian, who in any case (if Krugman bothered to look) is a maverick who thinks that the interest rate is a monetary phenomenon and that all versions of the ABCT that use the unique natural rate of interest are flawed. Krugman’s already won half the debate.

      • Matt S says:

        “Why should Krugman debate”

        $100k+ to help feed hungry people?

      • Bharat says:

        Did you just ignore the “according to Krugman” part of Catalán’s sentence?

        “It would be sort of funny if it weren’t for the fact that this cult [of Austrians] has large influence within the GOP.” – Krugman

        If anything, Krugman is the one exaggerating the role of Austrians. And that is exactly Catalán’s point.

        • skylien says:

          Thanks, so I don’t need to write that.

        • Lord Keynes says:

          “It would be sort of funny if it weren’t for the fact that this cult [of Austrians] has large influence within the GOP.”

          He’s wrong. Its influence is marginal.

          • Jonathan Finegold says:

            Great job missing the point.

          • Major_Freedom says:

            If Krugman believes the influence is large, then his refusal to debate is equivalent, attitude-wise, as compared to if the real world facts were different, and he believed those real world facts.

            You’re missing the larger point because you’re too busy focusing on the minutiae.

      • Bob Roddis says:

        Did anyone ever notice the similarities between LK and Krugman? Neither knows anything about Austrian Economics and they both have the sweet disposition of the Queen of the 7th Grade Mean Girls.

      • Bob Roddis says:

        LK, keep it up with that “unique natural rate of interest” nonsense. We’ve smacked you down over and over on that . Give it up. It’s over.

        • Lord Keynes says:

          lol… Presumably you’ve “smacked” Robert Murphy “down over and over on that” too? Presumably he’s given it up?

    • John S says:

      “I wonder why Krugman has chosen to not even address this?”

      Little upside, big potential downside. Krugman is smart to keep quiet.

      We should just bomb his comments section to shame him anyway, haha.

      • John S says:

        Basically, what Jake said.

  2. guest says:

    I liked the following video because, in it, Bob Murphy explains that he was taught by Keynesians and can speak to them from their perspective:

    Austrian Economics and the Business Cycle | Robert P. Murphy

  3. devo says:

    well i hadn’t seen that. AND IT WAS A DAMN TREAT! please make more videos! you are a genius, and hilarious!

  4. Bob Murphy says:

    Everybody, Krugman *did* explicitly give his reasons for not debating me.

    • konst says:

      In the comments there (the top comments) someone left this link to a youtube video of Krugman participating in a panel on the Euro crisis.

      The comment is

      Lenny Clingensmith
      For you Austrians, please see: youtu.be[slash]EX55BH97quk Very interesting (or should I say gratifying): from 35:00 to 51:45 [this portion all in English]. Krugman get’s his butt handed to him by a very well spoken Spaniard Professor of Economics [of the Austrian School], Pedro Schwartz, that has seen his country and the EU suffer under Krugman’s policies.

      The video is: http://www.youtube.com/watch?v=cV-ga1oKzC8

      I skipped to the 35 min mark. Well worth watching.

    • JJ says:

      Hey Bob, who are those two girls with you in the picture in the movie you linked to?

  5. Jason B says:

    Bob, I recall you stating that once the pledge total reached $100k there would be further efforts to “get the word out”. What kind of ideas do you have in mind here?

    • Bob Murphy says:

      Just let me get caught up with my “day job” stuff Jason B. All in the fullness of time…

      • Ken B says:

        One modest proposal Bob, is to respond to the OLG stuff and if you succeed you prove Krugman wrong.

        • Bob Murphy says:

          Ken, in my mind (which may not accurately reflect the mind of God), I proved Krugman wrong with my first example. Even if you are right, you would have shown a wrinkle whereby Krugman could be saved, despite himself. It is crystal clear to me that he was relying on the same arguments I used in my earlier writings, and I have unequivocally said I wasn’t thinking about it the right way.

  6. Razer says:

    Don’t overlook the fact that Krugman may hate the hungry. After all, his mentor — Keynes — was a huge supporter of eugenics. Perhaps this is Krugman’s way of carrying the torch. Who better to euthanize than the unproductive poor.

    • Major_Freedom says:


      Keynes really did hate the poor.

      After his trip to Russia, he asked:

      “How can I adopt such a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeoisie and the intelligentsia who … are the quality in life and surely carry the seeds of all human advancement?”


  7. Matthew M. says:

    Congratulations… that came out of nowhere, last I checked it was in the $80k range. Now that pesky day job stuff… how do we get that out of the way? I want to get this show on the road!

    P.S. Bob – I miss your Mises Dailies, are they also a victim of the day job?

  8. skylien says:

    Congrats from my side too btw!

  9. Bob Roddis says:

    I think Austrians worry too much that average people will not see what liars and frauds the Keynesians are. Average people have just never paid any attention to what Keynesians say and they have no idea that Keynesians believe that funny money dilution and government debt cause prosperity. Further, Krugman could never live down having the public become familiar with his public statements.

    In 2002 Krugman said that,

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


    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.”


    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.”


    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 )

    And most recently Krugman has said that the housing bubble was “just one of those things that happens” every once in a while.


    Once the public sees what the Keynesians actually believe, let the Keynesians try to explain it. They’re toast.

    • Lord Keynes says:

      ” Average people have just never paid any attention to what Keynesians say”

      Really? Funny, then, how there was widespread support for Obama’s stimulus:

      “Those who had heard at least something about the stimulus program were then asked whether the stimulus was the right or wrong thing to do for the country. A solid majority (55 percent) thought the stimulus program was the right thing to do.“

      Americans overwhelmingly want Congress to pass an economic stimulus bill, a USA TODAY/Gallup Poll finds,


      “Fifty-two percent of Americans interviewed Wednesday night are in favor of Congress passing a roughly $800 billion economic stimulus package; 38% are opposed.”


      “The latest Gallup poll shows that support for the stimulus package has reached 59 percent in favor and just 33 percent opposed, despite the fact that the question mentions a price tag of “at least $800 billion.” That’s up from 52-38 in favor on February 4″


      • Major_Freedom says:

        Lower taxes is a stimulus too, you know.

        A portion of the public wanted the government to “do something”, which is give them tax money instead of the other guy.

        That isn’t a desire for Keynesian stimulus per se. It’s millennia old special interest group pleading to states.

        • Tel says:

          You must admit that the genius of Keynes was to give people a trite philosophical underpinning that allows them to do what they want to do anyway (i.e. wealth transfer) but at the same time pretend it is for the greater good.

          There’s a subtle second genius in being able to turn an upfront cost into a hidden cost.

          In the case of an actual purchase, you directly exchange money in your hand for goods in return — so there is a direct comparison between alternative suppliers or alternative activities. In the case of inflation, and funny-money printing, yes people understand that prices go up, but the effect is spread over many different prices and takes some time so it is very difficult to be specific. You can’t say, “I gained this government service in exchange for those particular goods going up in price,” because although the overall concept of inflation is easy to explain, the intricate details of why the price of any particular item goes up are basically impossible to calculate. Thus, plenty of wiggle-room for politicians to wave away the effects of their actions (like the way Krugman blames food and fuel prices on “volatility” or “speculators” or anything other than government policy).

          It is kind of like the principle, when an individual makes a decision, someone is responsible, but when a committee makes a decision no one is responsible. But apply that idea to specific economic exchanges vs broad and diffuse economic exchanges.

          • skylien says:

            I am not sure about that. People just want conflicting things. People NEVER want inflation per se. Everybody knows that this will hurt him.

            This is an interesting article:

        • Lord Keynes says:

          “Lower taxes is a stimulus too, you know”

          So a Keynesian stimulus employing large tax cuts with a budget deficit would stimulate the economy?

          You’re saying Keynesianism works?

          • Major_Freedom says:

            “So a Keynesian stimulus employing large tax cuts with a budget deficit would stimulate the economy?”

            Did I say anything about deficits? No, I just mentioned lower taxes.

            Nice try though.

            Next time you mention something about lower taxes working, would it make any sense for someone to respond with:

            “So a laissez-faire prescription of lower taxes….with equivalently lower government spending, deregulation of the entire market, and abolition of states will “work”? Aha! You admit you’re an anarcho-capitalist! Bwahaha!”

    • skylien says:

      Bob, I guess with this you have a really glaring obvious point. Normally if you repeat your attacks against Keynesians (like about “natural rate” or no understanding of “economic calculation”) you will nearly always get a response this or another way that almost always starts another discussion ending in insulting…

      However as far as I saw, you brought this up recently at least 3 times (with the 2005 quote) and yet there is absolutely no response. No attempt whatsoever to defend it any way. This is telling!

      Really what I am taking away from Krugman is:
      1: He admits (has admitted) that the FED only can artificially stimulate/blow up bubbles that are bound to break down when it stops stimulating. (Of course he also fails in explaining how this will “kick start” a genuine growth in the economy despite violating the market process,

      2: He also admits that the current monetary policy has the real potential of SOME DAY starting a hyperinflation. Well he only thinks that this will not happen because the FED can exit. Of course this believe hinges on his believe that stimulus by some magic of maybe confidence fairies (who along injecting confidence in the animal spirited people maybe also adjust peoples value scales to government distorted price and capital structures) a genuine growing economy can be achieved.

      • Tel says:

        Of course he also fails in explaining how this will “kick start” a genuine growth in the economy despite violating the market process.

        Unless you invoke the confidence fairy. But who would talk about confidence in a time of economic downturn?

        • skylien says:

          I think that is the main issue of Keynesians, isn’t it? Keep “real output” high, by keeping AD high, which depends on people spending, which depends on their confidence in the economy. Confidence/trust/credit must be based on real fundamentals, not by creating false wealth effects and talking FED-Speak.

          I mean the question is not if a lack in confidence is justified now or not and if we should try to deceive people by some policies to get their confidence back, so they start spending (investment and consumption) again. They question is (lack of) confidence in WHAT is justified.

          And my answer is that only the market process can reveal in what confidence is justified and in what it is not. And I am amazed how people who subscribe to the subjective theory of value cannot see this. Yet also are not even interested in answering this question if I bring it up.

          The pure look at GDP completely misses the point. It is putting the cart before the horse. It is like a successful football team that makes a lot of money, and then you assume it is the amount of money that they get that determines their success, So when success suddenly stops and earnings go down. Someone with infinite resources says. Well I will subsidize them with whatever the “earning-gap” is, and then they will be always successful.

  10. noiselull says:

    Just checking Bob… have you seen the Scarborough debate?

  11. Sleuth says:


  12. successfulbuild says:

    Bob Roddis and Major_Freedom run around the internet lying (Look up Roddis’ attempt to paint Keynes as a pedophile at Noah Smith’s blog and his failure to back it up with any corroborating evidence) and creating different accounts and promoting conspiracy theories and you wonder why no one takes Robert Murphy seriously.

    I already owned major_freedom when I showed all capitalism (even in the nineteenth century) has had government interference, and when I got him to admit that Libertarianism means slavery.

    • Major_Freedom says:

      “I already owned major_freedom when I showed all capitalism (even in the nineteenth century) has had government interference, and when I got him to admit that Libertarianism means slavery.”

      Wait, are you the guy whose claims I demolished and evicerated? Or are you the guy whose claims I atomized and vaporized?

      Hmmm, speaking of lying, I see that you’re lying in your post. I never said the 19th century had no government interference, and I never admitted libertarianism means slavery.

      Try harder next time. That was a joke.

    • Tel says:

      Keynes in his diary did mention having sex with boys, but it has never been determined exactly what age those boys were. I’ll point out that at the time it wasn’t seen as quite as much of a big deal as it is today… attitudes change.

      If you are trying to say that attacks on Keynes’ personal habits are irrelevant, and that a gentleman and a scholar should always be strictly constrained to attacks on the theory itself, then I’ll certainly agree with that one.

      As for “all capitalism has had government interference” this is easily and demonstrably wrong. Capitalism is older than government, and I can provide many examples where free trade exists either without government, or even in the face of very active government inhibitions:

      * Lots of evidence of trade exists from Europe long before anything resembling government existed (e.g. amber, flint, bronze, etc).

      * Vampire bats trade blood amongst themselves, yet they have no government.

      * Pirates and smugglers throughout history have traded goods, despite government crackdowns.

      * The drug trade has not shown the slightest downturn, despite nearly every government “declaring war” against drugs.

      * Trade in favours (e.g. “blat” or “gunaxi” or “wasta” depending on your culture) existed even in authoritarian centrally planed economies that were specifically designed to eliminate such behaviour.

      * Many tribal societies rapidly came to trade agreements with colonial powers (events which have been well documented because the colonial powers kept records) such as the New Zealand Maori trading for muskets, and the Native Americans trading for rifles, iron tools, etc.

      If these supposedly primitive societies did not already understand the concept of trade, how did they so rapidly adapt to outside trade offerings?

      • successfulbuild says:

        The youngest age given in Keynes’ writings is 16, I believe. However, any historian knows a diary doesn’t necessarily prove that an event occurred. Furthermore, paedophilia is defined as going after pre-pubescent children. It is characterized as an attraction “toward prepubescent children (generally age 11 years or younger, though specific diagnosis criteria for the disorder extends the cut-off point for prepubescence to age 13”.

        Roddis read something off of conservapedia or something and repeated it because he and major_freedom are unbelievable idiots.

        Second, capitalism, especially the Libertarian variant of it is not defined as “trade” but as a system where all rights are property rights. Bats do not believe this. Nor did tribal societies believe this. All one has to do to refute this is look at the statistics of Pinker that show the rate of violence in these societies. They took property from one another all the time.

        Even if we question the evidence on violence (and I see no reason to), humans have always known there was some communal relations in those systems. In fact, those are the very features which were necessary to the success of the tribes. The property relationships were not necessary and were absent in many tribal communities, especially in Indian ones.

        The idea that all rights are property rights would require a government to enforce, to make sure such a definition of property is never violated.

        In fact, “all rights are property rights” has always been the basis of tyranny, since Hitler, Stalin, and other dictators considered their leadership to be the ruling over the property. In Hitler’s case this is obvious with his belief in the triumph of the will and Stalin wrote often about the necessity of “one party rule,’ the one democracy, the true leadership over the nation.

        Your “evidence” almost always points us to the opposite conclusion of what you’re trying to prove.

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