26 Apr 2013

Krugman vs. Murphy: The Animated Series

Humor, Krugman, Shameless Self-Promotion 19 Comments

So Noah Smith has a pretty funny post, casting Krugman as Voltron versus me (and a bunch of others) as the monotonous grab-bag of robot monsters.

On Facebook some people were offering cartoonish rejoinders. Joshua Ammons showed what a two face Krugman is:

while Naomi Jeys dug up her caricature of me from a few months ago:

And yes, I am mixing DC and Marvel in this post. No rulers!

19 Responses to “Krugman vs. Murphy: The Animated Series”

  1. Noah Smith says:

    Lulz! Nice. 🙂

    Not to nag, but when is the great Austrian-MMT debate going down???

    • Bob Murphy says:

      The wheels are in motion, Noah, don’t worry your Keynesian little head. We are on the cusp of announcing the details.

      • David R. Henderson says:

        @Bob Murphy,
        At least you should have enough respect for Noah Smith to get the order of words right: it’s “your little Keynesian head.”

        • Noah Smith says:

          @David: No, I think he got it right. Only my little head is Keynesian.

          My big head thinks all of macro is a sham… 😉

          @Bob: Excellent.

        • Bob Murphy says:

          Heh you’re right David, it doesn’t sound right the way I wrote it…

      • Major_Freedom says:

        And fully to nag, when is the great Austrian-MM debate going down? They miss me over at Sumner’s blog.

        • Bob Roddis says:

          I miss your Austrian little head over at Sumner’s blog.

          • Major_Freedom says:

            I was recently made aware of a poster on Sumner’s blog who, apparently, a lot of people there believe to be me in disguise.

            Maybe one Austrian little head is enough for each non-Austrian econ blog.

          • Joseph Fetz says:

            I’ll bet you miss his Austrian little head.

        • Bob Murphy says:

          Major Freedom you’re kidding right? You don’t have to hold your fire until Scott and I start our exchange.

          Again, it’s my fault. I’m really swamped with work.

          • Ken B says:

            I believe his silence was part of Sumner’s price. Or at least a sweetener MF tossed in.

            • Major_Freedom says:

              Yup, that’s it, it was a sweetener.

              Since the original plan was for me to be silent starting January, as the debate was to be from January to March, once March came and went, I thought it would breaking the rules, then after more time passed, it got to a point where it would be arbitrary no matter when I posted again, so I just kept it up with not posting.

              Oh well, no big deal.

            • Bob Murphy says:

              No, the deal was, MF would not comment on Scott’s blog for the period of our exchanges. But since we didn’t start yet, MF is still free to comment over there.

  2. Yancey Ward says:

    Everyone knows Austrians don’t have heads. DeLong told me so.

  3. guest says:

    Each week a Robeast will show up, bellowing predictions of inflation and/or soaring interest rates.

    You forgot KrugTron vs. KrugTron:

    Debt in a Time of Zero

    It’s true that printing money isn’t at all inflationary under current conditions — that is, with the economy depressed and interest rates up against the zero lower bound. But eventually these conditions will end. At that point, to prevent a sharp rise in inflation the Fed will want to pull back much of the monetary base it created in response to the crisis, which means selling off the Federal debt it bought. So even though right now that debt is just a claim by one more or less governmental agency on another governmental agency, it will eventually turn into debt held by the public.

    Krugman sees inflation coming, too. Except he thinks the Fed can keep it from happening:

    Ask an Austrian Economist

    Peter Schiff has been very outspoken on his show on the idea that a large increase in the interest rates will lead to massive bank failures. … Why would this be so?

    The answer:

    Rising interest rates will collapse the capital value (i.e., the market price) of assets banks hold. If they have existing T-bonds at 3% and interest rates on newly issued T-bonds rise to 6%, the price that investors will be willing to pay for the 3% bonds collapses. When that happens, banks become insolvent.

    Funny Schiff Radio: The Roach Motel
    [Length: 1:10]

    The Fed can’t keep inflation from coming unless they’re planning on fomenting wars to void debts to the dead, on defaulting, or on choosing to take the losses for themselves.

  4. Bob Roddis says:

    Anti-“austerity”/anti-“neoliberal” Brett Fiebiger says the system does not work like the MMTers say it does:

    On page six the authors (Fullwiler, Kelton, Wray) comment on the constraint prohibiting the US Federal Reserve from buying Treasury bonds directly at auction that: “this is anything but ‘natural’ and cannot be useful for describing a general case for government debt operations.” There is no debate that all of the policy constraints imposed on the Treasury’s activities are arbitrary and should be abolished; however, it is no minor issue that the existence of these constraints invalidates the MMT description of how the State spends. @ page 28

    For most economists the US federal government finances it spending primarily by acquiring bank money from agents outside of the domestic banking system. When one turns to Modern Money Theory (MMT), also known as neo-Chartalism, they find that the world is upside-down. Fiscal policy is said to be ‘really’ monetary policy. In most instances we are told that Treasury spending is financed by net/new money creation; with the receipts from taxes and bond sales unable to be spent, but instead ‘destroyed’. This claim defines MMT and is defective. While the federal government’s alleged
    ability to print money via fiscal expenditures is said to occur without the “complicity of the central bank” as a financing agent (e.g. Wray; 2006b) this argument is often forwarded with the term ‘government’ used ambiguously and deceptively to denote both the Treasury and the central bank. Everyone accepts that the Federal Reserve finances its activities by issuing money ex nihilio (i.e. ‘out of nothing’) but the Treasury finances its spending by depleting deposit balances (ceteris paribus). That Treasury spending results in a credit to the accounts of private banks (a reserve) is taken as evidence of ‘the State’ emitting ‘money’. That the central bank also debits the Treasury’s account entails that the transaction is not money creation but a transfer of an existing deposit. The maths is one credit to private accounts plus one debit to the Treasury’s account equals zero money creation (not < 0). Money creation does not shift deposits from one account to another but creates them. MMT gets fiscal policy back-to-front by supposing that the Treasury expends funds without first procuring funds. The Treasury is not a bank and if it does not collect fiscal receipts it cannot spend because it has no ‘money’.
    @ page 2


  5. Reality Engineer says:

    This page dealing with the issue of crony capitalism causing the healthcare mess addresses the issue of the public being duped by “economists” peddling nonsense regarding healthcare economics. It has this attack on Krugman (obviously him despite his name not being used), trying to explain why despite his nobel his views can be off base:

    “It can be difficult for the public to assess who to trust if they don’t know much about economics and business since even a subset of those with credentials like Nobel Prizes can sometimes be off target when they are writing on topics outside their niche. The Skeptics Dictionary says “The Nobel disease has been defined as ‘an affliction of certain Nobel Prize recipients which causes them to embrace strange or scientifically unsound ideas, usually later in life.'”. Some of them are creative and have many ideas, and a fraction of those ideas matched reality and led to a major contribution to their field. Those creative ideas may however only sometimes turn out to match reality and at other times lead them astray in other niches even within their general field. A trade economist may or may not do well writing about other areas of economics, and may or may not be biased towards pushing for favors for special interest groups he likes.

    It is useful for the public to learn to be skeptical whether an “expert” may be pushing a favor for a special interest niche, or be pushing outdated concepts for emotional reasons like that “competition is always wasteful”. A nobel laureate economist recently suggested that some nobel prize winners are idiots.. a comment some suspect was driven by the fact that many view him that way for comments outside his niche. Some Nobel laureates have generalist mindsets (many won prizes for broad contributions to the field) and can apply their intellectual ability productively to many niches, while others are specialists whose recognized contributions are limited to a fairly narrow niche and they have trouble “seeing the forest for the trees” when confronting big picture issues. “

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