21
Jun
2014
Krugman’s Latest Post: “Murphy Was Right”
Well, not his exact words, but see for yourself. I’m serious, this isn’t a Kontradiction, this is a flat-out contradiction, is it not?
If you want to be super squirmy and get him out of this Houdini-style, I suppose you could argue, “Krugman 2014 is clearly contradicting Delong 2013, but not necessarily Krugman 2013. Krugman 2013 wasn’t endorsing all of DeLong 2013, just saying that Murphy 2013 hadn’t delivered a death blow to DeLong 2013.”
But if that’s the route you want to take, you should apply for White House press secretary.
BTW this contradiction surfaced back in November, but Krugman is more confident in his current contradiction than he was back then.
Those who integrate support of initiations of violence into their thinking, will necessarily and inevitably contradict themselves.
If a person wouldn’t accept wealth in exchange for someone else getting aggressed against, why would they accept the Keynesian argument for more GDP?
Because the people have bought a lie. The lie is simple. Government cannot steal and or murder. When the government does it, it is not theft, it is not murder.
They bought the lie, but not a 1 of them can explain to me why government is never guilty of murder and or theft. Talk about faith, or should I say blind obedience to a false idol…
“but not a 1 of them can explain to me why government is never guilty of murder ”
Partly it is due to the meaning of the word. One definition of murder is “unlawful premeditated killing of one human being by another.”
If it is lawful, it is not murder. In order for the word to mean anything, there must be a law. Without law, there is no murder, only killing. To be murder, the killing must be by “another human being”. The Government is not a human being, so by this definition cannot commit murder.
Perhaps you have an alternative definition of murder. However if your definition is different from those in common use you will have problems communicating.
Larry Ball’s paper is perfectly consistent with the Austrian theory that the economies are harmed because of government intervention (here post-2008), and not because of “too little” intervention.
Initiating violence does not make people’s lives better off. Even those who initiate it become materially worse off, in the long run ceteris paribus, because they reduce opportunities to trade wealth produced by others who are prevented from producing as much wealth because of the violence. Kim Jong Un for example is materially worse off now than he otherwise would be if he didn’t initiate perpetual violence through an obedient army and police, and allowed the North Korean people to produce in their own way.
Most of the time the individual’s standard of living is improved by uncontrolled, and/or unexpected, production of others.
Krugman’s ideology and faith in socialism is so extreme, that he is blind to even a faint and distant possibility that the very cure he desires, is itself a poison.
That ceteris paribus in the long run is key though. If Kim Jong Un did not initiate violence, then IF he remained top dog and everybody continued to do what he said (i.e. ceteris paribus) he would be better off. In fact, other things would not remain the same and he would in all likelihood be personally much, much worse off.
The best defense of Krugman’s position would probably be something like:
In 2013 the point of his post was to demonstrate that the ” the CBO already takes into account the effect of a smaller capital stock on potential output”. This was an explicit counter to the specific reason you gave for lower potential output.
In the recent post he is now talking about some new research that shows that “austerity equal to one percent of GDP reduces potential output by around 1 percent.”.
So he could claim: He only ever challenged the view that lower investment had led to lower potential output than reflected in CBO numbers, not that potential output was actually lower that stated. And now, research has indeed shown that potential output IS lower, but because of austerity not becasue of a lower capital stock
OK Transformer, but Krugman back in 2013 was actually thinking, “Holy cow DeLong is totally wrong about potential GDP, but I’ll just zing Murphy for coming up with a invalid objection to DeLong’s obviously false conclusion”?
Yes, that’s definitely the impression you get from reading the post. But where are the words that actually say that ?
Transformer, what are you saying? You agree with me that Krugman has flipped, but that strictly speaking Johnny Cochrane could get him off?
Or you actually think Krugman has been thinking the same thing all along?
Sorry, didn’t read your last comment properly
I think Krugman was 100% agreeing with DeLong in 2013 that potential output hadn’t fallen much.
But he doesn’t explicitly say anything in that post.to confirm that.
I suppose it would be reasonable for him to say though that this recent research has caused him to change his mind on the size of the output gap – but its smaller because of austerity not the reasons you gave.
Transformer, I don’t really want to go look it up right now, but if you really care (or are bored out of your mind), I encourage you to go look through Krugman’s blog posts in the 48 hours or so before his post where he says the CBO isn’t stupid. I am almost positive that he linked to DeLong’s initial post and said DeLong was right about potential GDP not being much below the 2007 trajectory.
Looking into it I found this post by Krugman from back in 2011 that appears to support your view from last year that potential output may be likely to fall “because investment will be depressed, reducing future capacity”
http://krugman.blogs.nytimes.com/2011/09/18/hysteresis-begins/
OK but did you also check literally the day or two before the Murphy smackdown? I thought I remembered him explicitly saying something like “As Brad shows, it’s not a big deal” (referring to reduction in trend level of potential GDP since 2008).
Bob, if you follow the Mankiw “roots of evil” dispute all the way through, that’s the position that Krugman ended up in there too.
In that one, Krugman appeared to be taking DeLong’s side when put down Mankiw for including a unit root hypothesis as one of two reasons why the Obama administration growth estimate was unreasonably high.
Krugman later (wearily) explained that only a liar or a fool could have thought that meant that DeLong was right on the underlying dispute.
I assume you’re familiar, but let me know if you want me to dig up some links.
J Mann, good thinking. I do indeed remember that one; I covered it in excruciating detail here at Free Advice.
Thanks.
For what it’s worth, my personal hypothesis is that Krugman doesn’t read other econbloggers carefully.
My guess in the Roots of Evil business is that Krugman read DeLong’s piece and piled on without taking the time to think about what Mankiw was saying or why.
As I’ve said elsewhere, I think it’s irresponsible for a public intellectual like Krugman not to have at least responded to Mankiw after that – as a result, I got dumber by reading Krugman in 09 instead of smarter.
Slightly off topic, but such research is dependent on flawed theory.
Is this what you’re referring to?:
The Three Types of Austerity
http://mises.org/daily/6523/The-Three-Types-of-Austerity
Reading the financial press, one gets the impression there are only two sides to the austerity debate: pro-austerity and anti-austerity. In reality, we have three forms of austerity. There is the Keynesian-Krugman-Robert Reich form which promotes more government spending and higher taxes. There is the Angela Merkel form of less government spending and higher taxes, and there is the Austrian form of less spending and lower taxes. Of the three forms of austerity, only the third increases the size of the private sector relative to the public sector, frees up resources for private investment, and has actual evidence of success in boosting growth.
An End to Austerity?
[www]http://mises.org/daily/6675/An-End-to-Austerity
The type of austerity that gets the most worldwide press attention on a daily basis is that promoted by economists at the International Monetary Fund. This “austerian” approach involves cutbacks in government services and tax increases on the beleaguered public in order to, at all costs, repay the government’s corrupt creditors. This pro-bankster approach is what generates a massive amount of media attention and sometimes violent demonstrations.
Austrian School economists reject both the Keynesian stimulus approach and the IMF-style high-tax, pro-bankster approach as counterproductive. Although “Austrians” are often lumped in with “Austerians,” Austrian School economists support real austerity. Real austerity involves cutting government budgets by reducing salaries, employee benefits, and retirement benefits. It also involves selling government assets and even repudiating government debt. Instead of increasing taxes, the Austrian approach advocates decreasing taxes.
“Potential GDP” means precisely whatever you want it to mean, and Krugman has been very consistent using it for this purpose.
End of thread.
The best Daniel Kuehn impression ever!!!!!
+1000 on this comment
Yeah, maybe I’m wrong on this, but I get the impression that the intellectual rigor that goes into calculating “potential GDP” by these supposed brightest minds of the universe and macro-superstars like Krugman is roughly on par with your typical college freshman’s first venture into Excel and getting carried away with the =TREND() function.
My theory:
The NSA is an organic economic outgrowth of the government finding it more and more difficult to prop up the central bank distorted economy as it gets closer and closer to the Misesian wall.
As real consumer preferences constantly frustrate the malinvestment plans, more and more information on consumers (everyone) is needed by government to regulate its way away from the Misesian wall.
It might be an attempt to solve Hayek’s knowledge problem.
I mean, what else would solve a knowledge problem, other than knowing everything that goes on? Once you know absolutely everything that happens, how can there still be a knowledge problem, dammit!
And all the while there is a more or less cpntinuous attack on the veracity of the argument pointing to the problem.
Crush the enemy when you learn of a problem they pose, but don’t dare acknowledge the problem to be a problem lest you give credence to the enemy’s credibility.
Well, they constantly deny everything the NSA does, so if by chance NSA were attempting to solve the knowledge problem this would not doubt also be denied.
Every time I read something about Krugman like that i remember the scene from Zoolander when main character was so sure he won the award that he heard his own name instead of what presenter said…
I’m sure Krugman carefully reads his own posts only, so as to be not caught in Kontradiction or contradiction. Everything else he gets from synopses or news snippets.
Which says a lot about him, if it’s true.
Every time I read something about Krugman like that i remember the scene from Zoolander when main character was so sure he won the award that he heard his own name instead of what presenter said…
Heh that’s funny. Then later he and Sumner interact on the doorstep, Krugman saying, “Why you acting so messed up?” And Sumner eventually says, “I idolize you! You’re PAUL KRUGMAN!”