Krugman Article In Nyt

[akoff 0]

i love that you guys are still both insisting that you don't need to read the article to know what it says, even though it would be plainly obvious to anyone in possession of a half-college education and a reading of the article that you're not addressing the primary thrust of what krugman is trying to say. like, love. it. you know, in the sense that it makes me want to give up on the american public completely.it's sadly hilarious to me that anti-intellectualism in america has gotten so horrific that (apparently) your average internet ideologue can't be bothered to read four. ****ing. pages. before s/he pronounces a nobel prize winner a dunce of his field.someone agree with me here before i go insane. seriously. like if this something unchangeable about the general american mindset, we're worse off than i ever thought imaginable.

You can smell the shit on page one. Keith Olbermann is well educated...he can't pull his head out of his ass long enough to realize what an idiot he is....Al Gore is well educated, he invented the internet and in the process of saving the world...oh bad example there. Barak is well educated....sorry nother bad one there.

[hblask 1]

i love that you guys are still both insisting that you don't need to read the article to know what it says, even though it would be plainly obvious to anyone in possession of a half-college education and a reading of the article that you're not addressing the primary thrust of what krugman is trying to say. like, love. it. you know, in the sense that it makes me want to give up on the american public completely.it's sadly hilarious to me that anti-intellectualism in america has gotten so horrific that (apparently) your average internet ideologue can't be bothered to read four. ****ing. pages. before s/he pronounces a nobel prize winner a dunce of his field.someone agree with me here before i go insane. seriously. like if this something unchangeable about the general american mindset, we're worse off than i ever thought imaginable.

i read as much of it as I coiuld stand, about 1 1/2 pages, plus I skimmed another two pages. If someone wrote an 8 page poker article explaining why you should never raise with the best hand, because then the bad beats are worse, and after 3 pages was still on that same point, I doubt that you would spend a whole lot of time debunking the last few pages. He was wrong on almost every single point for three entire pages.... is your claim that he then reverses that trend and the last 5 are suddenly miracles of wisdom?There is a point when you have to stop taking someone seriously, and when you are about 20% of the way through an article and it is 100% wrong.... that's probably enough.

[hblask 1]

OK, here's the other thing: Krugman is a very academic writer -- state your point, discuss your point, repeat your point.Your OP summarized his points. You asked us to discuss, we did.You say, no you have to respond to the whole article.But the only way to respond to the entire 8 page article is with an 8 page article. Sorry, but time and facts have debunked Krugman enough, I'm not writing 8 pages to beat that dead horse.So again, if there is some specific point you would like discussed, please post it, but stop insisting that unless we write 8 pages of facts in response to 8 pages of apparent drivel, we are being anti-intellectual. As Sal points out, unless the remaining 5 pages are spent apologizing for the first couple, what do we need to say?Which specific point do you want addressed?

[strategy 4]

i love that you guys are still both insisting that you don't need to read the article to know what it says, even though it would be plainly obvious to anyone in possession of a half-college education and a reading of the article that you're not addressing the primary thrust of what krugman is trying to say. like, love. it. you know, in the sense that it makes me want to give up on the american public completely.it's sadly hilarious to me that anti-intellectualism in america has gotten so horrific that (apparently) your average internet ideologue can't be bothered to read four. ****ing. pages. before s/he pronounces a nobel prize winner a dunce of his field.someone agree with me here before i go insane. seriously. like if this something unchangeable about the general american mindset, we're worse off than i ever thought imaginable.

I told mike (in private) that 1.5 would be a great line for the total number of thread participants--including the OP--who'd read the whole article. vindication, baby.the only comment I have about this forum's status quo is that we're way too quick to paint an issue as black and white. like, henry's mention of schiff above, acting as if there's a distinct subset of people who've been right all along. if you dig just a little deeper into what schiff was saying pre-meltdown, you realize that 1) the crash missed his prediction by an order of magnitude and 2) anyone who took his advice did much, much worse than the market. and of course, he has quickly come up with justifications for why people should keep buying his books and stick with his predictions. this is not to say that schiff is without merit, but please stop pretending that econ theory and forecasting in general is cut and dried, because it very clearly isn't.

[Pot Odds RAC 23]

i love that you guys are still both insisting that you don't need to read the article to know what it says, even though it would be plainly obvious to anyone in possession of a half-college education and a reading of the article that you're not addressing the primary thrust of what krugman is trying to say. like, love. it. you know, in the sense that it makes me want to give up on the american public completely.it's sadly hilarious to me that anti-intellectualism in america has gotten so horrific that (apparently) your average internet ideologue can't be bothered to read four. ****ing. pages. before s/he pronounces a nobel prize winner a dunce of his field.someone agree with me here before i go insane. seriously. like if this something unchangeable about the general american mindset, we're worse off than i ever thought imaginable.

I love that in your blind arrogance you assume that I can't read part of an article and determine that I don't care about the rest of it just because you find it so profound. Like, love it. You know, in the sense that you're content to come across as sort of an ass and make assumptions about me, my education, and the "American Public" as a result of it. I can see now why you are so turned on by Krugman and his article - you are his brain groupie. Seriously dude. Just because you get all warm when you read that article doesn't mean that we're all a bunch of morans if we don't. I'll stand behind my formal education, informal education, and general intellectual capability as well as my daily application of each of them.It is sadly hilarious to me if you truly represent intellectualism in America - the arrogance and poor conclusions would doom us for certain.I don't agree with you and you may already be insane if you seriously think that just because someone doesn't choose to read an article which you've recommended that this represents an unchangeable American mindset and means that the Country is "worse off" as a result. Thank God I don't think for a moment that you actually represent Intellectualism in America.

[Balloon guy 158]

Thank God I don't think for a moment that you actually represent Intellectualism in America.

Hey now, to be fair..checky has his hands full representing metrosexualism in America.Let's not ask him to bite off more than his girl friend can cut into small enough bites for him to chew.

[LongLiveYorke 38]

I told mike (in private) that 1.5 would be a great line for the total number of thread participants--including the OP--who'd read the whole article. vindication, baby.

Checky, MK, and Yorke all read it, of course.And no, Checky, it's more fun to see you squirm and suffer than to agree with you and come to your rescue.

[JoeyJoJo 18]

Checky, MK, and Yorke all read it, of course.

I read it too.I copied it into Word and read it that way, so I don't know where the page breaks are, but I found the last third of the article much more interesting than the first two-thirds. Of course, I don't know anything about economics.Anyway, I copied four parts of the article that I'd like some thoughts on, if someone could oblige me.1. “We are all Keynesians now,” Friedman once said, although he later claimed he was quoted out of context.I just thought that was funny.2. Some returned to the view of Schumpeter and other apologists for the Great Depression, viewing recessions as a good thing, part of the economy’s adjustment to change. And even those not willing to go that far argued that any attempt to fight an economic slump would do more harm than good.3. a 1997 publication by Andrei Shleifer of Harvard and Robert Vishny of Chicago, which amounted to a formalization of the old line that “the market can stay irrational longer than you can stay solvent.”4. So here’s what I think economists have to do. First, they have to face up to the inconvenient reality that financial markets fall far short of perfection, that they are subject to extraordinary delusions and the madness of crowds. Second, they have to admit — and this will be very hard for the people who giggled and whispered over Keynes — that Keynesian economics remains the best framework we have for making sense of recessions and depressions. Third, they’ll have to do their best to incorporate the realities of finance into macroeconomics.

[El Guapo 8]

I told mike (in private) that 1.5 would be a great line for the total number of thread participants--including the OP--who'd read the whole article. vindication, baby.the only comment I have about this forum's status quo is that we're way too quick to paint an issue as black and white. like, henry's mention of schiff above, acting as if there's a distinct subset of people who've been right all along. if you dig just a little deeper into what schiff was saying pre-meltdown, you realize that 1) the crash missed his prediction by an order of magnitude and 2) anyone who took his advice did much, much worse than the market. and of course, he has quickly come up with justifications for why people should keep buying his books and stick with his predictions. this is not to say that schiff is without merit, but please stop pretending that econ theory and forecasting in general is cut and dried, because it very clearly isn't.

Also Schiff was predicting for 3 years what ended up happening. He also thought it was going to get much worse after the fact and has been glorifying Gold like the radio commercials we here every day.I think he is a pretty smart guy, but hey if every year I say we are going to have a 20%+ decline in the stock market, the odds say that will happen within the 3-4 years. I am oversimplifying a very complex issue, but the thing is nobody predicted what happened to the extent it did.

[Sal Paradise 57]

ok so I finally finished it (to the detriment of looking for a new computer on my lunch break, and since it's your fault checky, it is now your job to find me one) and man, I'd really like to spend a day or so writing up a twenty page response to all the misrepresentations, untruths, and short sighted claims he has in there, but alas, I am voluntarily choosing to stay employed (topical!) so I don't have the time. but I would like to raise one big problem I had: in all four years of school (yes, economics), I never once remember a professor, no matter their school of thought (I had a wide variety, heavier on the keynes though), say that in the real world, that markets are perfect and people are completely rational. that's used in CAPM and other models as a ceteris paribus starting off point, but nobody I'd ever heard of actually thought that to be the case in the real world. so if that is what the majority of freshwaters believe then, well, that's a new one on me.

[Balloon guy 158]

I read it too.I copied it into Word and read it that way, so I don't know where the page breaks are, but I found the last third of the article much more interesting than the first two-thirds. Of course, I don't know anything about economics.Anyway, I copied four parts of the article that I'd like some thoughts on, if someone could oblige me.1. “We are all Keynesians now,” Friedman once said, although he later claimed he was quoted out of context.I just thought that was funny.2. Some returned to the view of Schumpeter and other apologists for the Great Depression, viewing recessions as a good thing, part of the economy’s adjustment to change. And even those not willing to go that far argued that any attempt to fight an economic slump would do more harm than good.3. a 1997 publication by Andrei Shleifer of Harvard and Robert Vishny of Chicago, which amounted to a formalization of the old line that “the market can stay irrational longer than you can stay solvent.”4. So here’s what I think economists have to do. First, they have to face up to the inconvenient reality that financial markets fall far short of perfection, that they are subject to extraordinary delusions and the madness of crowds. Second, they have to admit — and this will be very hard for the people who giggled and whispered over Keynes — that Keynesian economics remains the best framework we have for making sense of recessions and depressions. Third, they’ll have to do their best to incorporate the realities of finance into macroeconomics.

I didn't actually read your post, but I did skim over the points I wantd to address and can I just say that you would make a terrible accountant for the mob.

[JoeyJoJo 18]

I didn't actually read your post, but I did skim over the points I wantd to address and can I just say that you would make a terrible accountant for the mob.

The irony of this post is amusing to me.

[Balloon guy 158]

The irony of this post is amusing to me.

Always judging things aren't you?Outside of OT you can just be one of the guys if you want...we won't tell.

[nutzbuster 7]

i love that you guys are still both insisting that you don't need to read the article to know what it says, even though it would be plainly obvious to anyone in possession of a half-college education and a reading of the article that you're not addressing the primary thrust of what krugman is trying to say. like, love. it. you know, in the sense that it makes me want to give up on the american public completely.it's sadly hilarious to me that anti-intellectualism in america has gotten so horrific that (apparently) your average internet ideologue can't be bothered to read four. ****ing. pages. before s/he pronounces a nobel prize winner a dunce of his field.someone agree with me here before i go insane. seriously. like if this something unchangeable about the general american mindset, we're worse off than i ever thought imaginable.

[hblask 1]

All right, I can't resist a challenge. First, Krugman is a horrible writer, just dry and disjointed, so I want you to know the pain I went through to do this. I had to do it in small doses, a few paragraphs at a time, over the course of 8 hours. Also, the article is as bad as the first page, with false statements and misrepresentations throughout. But here it is, a paragraph-by-paragraph analysis of what turns out to be just as idiotic when you read the whole thing as when you read the summary.Paragraphs 1,2: Krugman says: Economists recently believed they had solved the problem of market cycles.Reality: Only technocrats, such as himself, ever believed that. Most economists knew better.Paragraph 3: He says: Few economists saw this coming.Reality: Most economists saw this coming for at least a decade. It is surprising (or maybe not) that he didn't, seeing as how he's supposed to be an expert. Heck, even that crazy guy WrongWay in the stock market thread saw this coming. When internet loonies know more than you about your career, it may be time to hang it up.Paragraph 4, 5: He says: This has created a deeper divide in the economics community.Reality: The divide has been there for a long time.Paragraph 6: He says: The Great Depression proved that free markets are terrible.Reality: The exact opposite, as has been covered many times. Individuals did not shrink the money supply; that was central planners. Individuals did not destroy trade, increase taxes, etc, etc, that was central planning.Paragraph 7: He says: Romantic notions of perfect vision led most economists to ignore the limitation of human action in markets.Reality: No serious economist ever said that; in fact just the opposite. What free market economists do, in fact, say, is that, because we are all flawed, it is better to have a million little errors that can be easily cleaned up than 1 or 2 big errors that destroy the economy, as occurs in central planning and as the Great Depression and the current crash demonstrate.Paragraph 8: He says: Economists will have to learn to live with an imperfect world.Reality: Most real economists already have learned to live with that; it's good to see Krugman is belatedly coming around.Paragraph 9: He says: Modern economics is founded on Smith's notion of free markets. He states the central premise is "trust the market".Reality: This is a cartoonish version of what Smith wrote and of what most economists believe. Paragraph 10: He says: basically, he repeats the lie that the Great Depression was the result of free markets.Reality: Repeating a lie over and over and over and over doesn't make it true.Paragraph 11: A brief defense of Keynes, saying he didn't want central planning, just government control of the money supply and economy when central planners felt it was necessary.Reality: LOLParagraph 12: Filler, no commentParagraph 13: A brief description of Friedman and how he made accurate predictions.... OK.Paragraph 14 and 15: He says: Eventually economists became more "radical" than Friedman, even saying that corrections were a necessary part of the economy. He also makes several false claims about markets always getting things perfectly right.Reality: Economic cycles are a reality, I'm not sure how anyone can deny that. Nobody ever claimed markets are 100% perfect, just that a few small errors is better than one really really big one.Paragraph 16: Some economists still believed in central planningReality: Some people still believe in a flat earth, too.III. PANGLOSSIAN FINANCEParagraphs 17 and 18: He says: Rambling about Keynes views of markets, comparing them to casinos.Reality: Yes, if you don't understand economics or markets, they can seem like a casino. For the people who make their living from them, it's more like the poker portion of the casino -- you know your edge, you know your variance, and plan for both.Paragraph 19: Krugman pretends that by the 80s economists believed market cycles didn't happen.Reality: Apparently being paid by the word, Krugman continues to build a strawman.Paragraph 20: Krugman claims there were no clear reasons for past economic cycles.Reality: LOL. He also confuses short term trends with long term trends, an easy mistake if you don't think very hard. Economic cycles are easy to explain in retrospect, but are fairly difficult to predict ahead of time. A big reason for this is timing -- events can be accelerated or delayed by years, leading to unpredictable interactions. So while it was obvious that the mortgage crisis was inevitable, nobody could predict the exact timing of it more than a year ahead of time. Krugman apparently confuses the confounding impact of temporal effects with a lack of understanding of basic theory. Perhaps he should ponder that a bit longer before he writes an article.Paragraph 21 and 22: Krugman discusses the whiz kids who developed Capital Asset Pricing Models.Reality: He overstates the claims a bit, but OK.Paragraph 23,24: Discusses economists who failed to see the coming crisis.Reality: Note that they all believed in central planning, that monetary policy should be used to influence asset prices.Section IV:Paragraphs 25,26,27: Introductory material for the next section, no commentParagraphs 28-31: A discssuion of how a babysitting co-op among neighbors failed.Reality: OK, I see this leading to really bad conclusions about the larger economy, lol. See, the reason it's not really a good test is because for rich suburbanites, a night out is 100% optional luxury, whereas a real economy is made up of various combinations of necessities and luxuries. Also, the rules for exchange were developed ahead of time. Any extrapolation is bound to be flawed.Paragraphs 32, 33: Krugman makes the following statement about "classical" economists: "They believe that all worthwhile economic analysis starts from the premise that people are rational and markets work, a premise violated by the story of the baby-sitting co-op".Only if you assume that free markets are designed to achieve a specific and predictable goal, or that you can pre-emptively design a system to accomplish a specific goal. The babysitting co-op, in fact, proves the folly of central planning. It turns out, people didn't value a night out as much as the designers thought; the "free market" of this luxury trading system pointed that out. If prices were allowed to fluctuate fully, the results would've been different. In other words, Krugman continues to build a stawman, apparently because they are easier to knock down than reality. After all, in the real, free market world, babysitters exist, and parents make use of them. Basically, he uses an example that works in a real free market and failed in a limited, planned economy, and comes to the conclusion that free markets don't work? LOL.Paragraphs 34, 35, 36: Discusses a few of the free market ideas for why recessions occur. Reality: It is a particularly shallow analysis, but this is a pop-econ article, not a journal article.Paragraph 37: Krugman again pretends that the Great Depression was a failure of free markets.Reality: Repeating a lie doesn't make it true.Paragraphs 38, 39: Discussion of the "New Keynsians", and how they tenaciously clung to free market ideas. More setup, I guess, for later.Paragraph 40: Krugman claims that economists had come to an agreement that central planning by the fed would save the economy.Reality: Only among technocrats and central planners. Real world economists never believed that nonsense. It's true, under Volcker, it looked easy, but monetarists and free market economists still were wary of the Fed's power to destroy the economy.Paragraph 41: Seems to indicate that free market economists supported Greenspan's loose monetary policy.Reality: Many economists had warned of the danger for years. Krugman is again showing how small are the circles in which he travels.Paragraph 42: It would take a crisis to reveal both how little common ground there was and how Panglossian even New Keynesian economics had become.Section V. NOBODY COULD HAVE PREDICTED . . .Paragraphs 43, 44: Krugman notes that many economists predicted the housing bubble, but central planners missed it.Reality: Duh!Paragrah 45: Krugman wonders how they missed the bubble.Reality: This should be his central thesis, and the answer is obvious -- nobody is correct all the time. This is exactly why central planning is doomed to failure -- when the mistakes of a few doom an entire economy, your system is flawed.Paragraphs 46, 47, 48: A discussion of the housing bubble, how some people said bubbles weren't possible because individuals are careful with their home purchases.Reality: This is a cartoonish simplification of both theory and of the reality. First, few economists hold such rigid beliefs; and I suspect the quote in the article is out of context. Second, it is possible to believe in a rational market AND a housing bubble. The problem is that if central planners create structural incentives to bid prices up, for any particular individual, it is economically rational to bid the price up, whereas for the economy as a whole, it is a dangerous game. Again, this is why we shouldn't give a few central planners the power to manipulate the structural incentives of free markets -- eventually, they will get it wrong.Paragraph 49: Krugman repeats his claim that this was "undiagnosed".Reality: Seriously? How many f-ing times are you going to repeat this nonsense?VI. THE STIMULUS SQUABBLEParagraph 50: Krugman says that the prosperity of 1985-2007 led to less fighting among economists.Reality: Probably true, we complain less about the dangers of central planning when things are not in crisis mode. That doesn't mean we agree, just that there are more pressing things to worry about.Paragraph 51, 52: Krugman uses the phrase "technocratic policies both sides were willing to accept"Reality: Another big LOL. The two sides aren't technocrats; technocrats are one side. The sides are technocrats vs free markets.Paragraph 53, 54: Krugman tries to explain why central planning can't rescue us from this central-planning-induced recession.Reality: Duh!Paragraph 55: Krugman uses the failure of central planning as evidence for the need for more central planning, of the Keynesian spending variety.Reality: Really? I guess the theory must be "if we try enough things long enough, eventually, we'll get it right." Sorry, I won't play. It's an idiotic theory built on an idiotic premise. The entire theory of Keynesian spending is flawed because it operates in a vacuum -- it ignores the fact that the money has to *come from* somewhere -- usually, the productive economy.Paragraph 56, 57: Obama's spending binge has made economists wake up and start to defend reality again.Reality: Yes, it's about time. 80 years of failed policy is enough; Obama's theory that if we just multiply a failed policy by 10 we'll get better results is a rare form of insanity.Paragraph 58: The ivory tower central planning theorists are shocked -- just SHOCKED -- to find out that people disagree with them.Comment: Another big LOL.Paragraph 59: Krugman misrepresents Friedman's views.Reality: Friedman didn't believe in central planning, but he was a realist. He knew the Fed existed and was not going away soon, so he tried to steer them in the right direction. That doesn't mean it was his preferred system, he was just trying to make a bad situation less harmful. Krugman has a long history of misrepresenting Friedman's beliefs, so this is no surprise that he does it here again.Paragraph 60, 61: Not sure what he's talking about here; apparently he found some obscure theorists. I certainly haven't heard these theories before and they are far from the mainstream.Paragraph 62, 63: More misrepresentation of free market theories, followed by noting that the New Keynesians models don't work.Reality: Tired strawman; and of course Keynesian models don't work.VII. FLAWS AND FRICTIONSParagraph 64: Krugman again shows his lack of understanding of free market theory.Reality: Have fun with your stawman, Mr K, I'm not playing.Paragraph 65, 66, 67: Krugman acts surprised and shocked to find that economics is complex and subtle.Reality: That's what free market economists have been saying for years, it's about time you are coming around.Paragraph 68: Krugman again misrepresents Friedman's views.Comment: Sigh.Paragraph 69: Krugman seems to be further realizing the reality of what free market economists have been saying all along.Reality: Someday, maybe he'll even develop an understanding!Paragraph 70, 71: Krugman falls back to claiming the current crisis is a free market failure,Reality: Free market economists are the ones who recognized and warned about the danger for a decade. Yes, Paul, horrible structural incentives can cause bad things to happen. No surprise there.Paragraph 72, 73: Ignoring the implications of everything he's written to this point, he again claims the current crisis is a free market failure and shows the need for central planning.Reality: This is why Krugman is such a joke -- he can write 8 pages and then ignore the obvious implications of his own writing.VIII. RE-EMBRACING KEYNESFinal three paragraphs: Krugman again defends Keynesian economics and says, because humans are flawed, we need more central planning.Reality: It is because humans are flawed that central planning is dangerous. All you need to ask is one simple question: If a person makes a mistake, do you want it to affect that person, or do you want it to affect 300 million people? With central planning, you get the latter; with free markets, you get the former. It seems like an obvious choice, but apparently Krugman prefers to affect 300 million. That is such a sad and cynical view, and after detailing this article, I just find Krugman more appalling than ever. His line of thinking has led to vast amounts of suffering over the last 100 years; it's time to kill it once and for all, not call for its revival. So there, checky, I expect an equally detailed response from you now, or I will personally accuse you of intellectual laziness. Let's see you respond to every single point here.

[JoeyJoJo 18]

Just in case we're getting points for reading, I'm stating for the record that I read your whole post.

Paragraph 69: Krugman seems to be further realizing the reality of what free market economists have been saying all along.Reality: Someday, maybe he'll even develop an understanding!

That was funny.

[El Guapo 8]

Just in case we're getting points for reading, I'm stating for the record that I read your whole post.That was funny.

I get points too then, but lose some because I did not read the article in the first place.

[Iwritethesongs 0]

All right, I can't resist a challenge. First, Krugman is a horrible writer, just dry and disjointed, so I want you to know the pain I went through to do this. I had to do it in small doses, a few paragraphs at a time, over the course of 8 hours. Also, the article is as bad as the first page, with false statements and misrepresentations throughout. But here it is, a paragraph-by-paragraph analysis of what turns out to be just as idiotic when you read the whole thing as when you read the summary.Paragraphs 1,2: Krugman says: Economists recently believed they had solved the problem of market cycles.Reality: Only technocrats, such as himself, ever believed that. Most economists knew better.Paragraph 3: He says: Few economists saw this coming.Reality: Most economists saw this coming for at least a decade. It is surprising (or maybe not) that he didn't, seeing as how he's supposed to be an expert. Heck, even that crazy guy WrongWay in the stock market thread saw this coming. When internet loonies know more than you about your career, it may be time to hang it up.Paragraph 4, 5: He says: This has created a deeper divide in the economics community.Reality: The divide has been there for a long time.Paragraph 6: He says: The Great Depression proved that free markets are terrible.Reality: The exact opposite, as has been covered many times. Individuals did not shrink the money supply; that was central planners. Individuals did not destroy trade, increase taxes, etc, etc, that was central planning.Paragraph 7: He says: Romantic notions of perfect vision led most economists to ignore the limitation of human action in markets.Reality: No serious economist ever said that; in fact just the opposite. What free market economists do, in fact, say, is that, because we are all flawed, it is better to have a million little errors that can be easily cleaned up than 1 or 2 big errors that destroy the economy, as occurs in central planning and as the Great Depression and the current crash demonstrate.Paragraph 8: He says: Economists will have to learn to live with an imperfect world.Reality: Most real economists already have learned to live with that; it's good to see Krugman is belatedly coming around.Paragraph 9: He says: Modern economics is founded on Smith's notion of free markets. He states the central premise is "trust the market".Reality: This is a cartoonish version of what Smith wrote and of what most economists believe. Paragraph 10: He says: basically, he repeats the lie that the Great Depression was the result of free markets.Reality: Repeating a lie over and over and over and over doesn't make it true.Paragraph 11: A brief defense of Keynes, saying he didn't want central planning, just government control of the money supply and economy when central planners felt it was necessary.Reality: LOLParagraph 12: Filler, no commentParagraph 13: A brief description of Friedman and how he made accurate predictions.... OK.Paragraph 14 and 15: He says: Eventually economists became more "radical" than Friedman, even saying that corrections were a necessary part of the economy. He also makes several false claims about markets always getting things perfectly right.Reality: Economic cycles are a reality, I'm not sure how anyone can deny that. Nobody ever claimed markets are 100% perfect, just that a few small errors is better than one really really big one.Paragraph 16: Some economists still believed in central planningReality: Some people still believe in a flat earth, too.III. PANGLOSSIAN FINANCEParagraphs 17 and 18: He says: Rambling about Keynes views of markets, comparing them to casinos.Reality: Yes, if you don't understand economics or markets, they can seem like a casino. For the people who make their living from them, it's more like the poker portion of the casino -- you know your edge, you know your variance, and plan for both.Paragraph 19: Krugman pretends that by the 80s economists believed market cycles didn't happen.Reality: Apparently being paid by the word, Krugman continues to build a strawman.Paragraph 20: Krugman claims there were no clear reasons for past economic cycles.Reality: LOL. He also confuses short term trends with long term trends, an easy mistake if you don't think very hard. Economic cycles are easy to explain in retrospect, but are fairly difficult to predict ahead of time. A big reason for this is timing -- events can be accelerated or delayed by years, leading to unpredictable interactions. So while it was obvious that the mortgage crisis was inevitable, nobody could predict the exact timing of it more than a year ahead of time. Krugman apparently confuses the confounding impact of temporal effects with a lack of understanding of basic theory. Perhaps he should ponder that a bit longer before he writes an article.Paragraph 21 and 22: Krugman discusses the whiz kids who developed Capital Asset Pricing Models.Reality: He overstates the claims a bit, but OK.Paragraph 23,24: Discusses economists who failed to see the coming crisis.Reality: Note that they all believed in central planning, that monetary policy should be used to influence asset prices.Section IV:Paragraphs 25,26,27: Introductory material for the next section, no commentParagraphs 28-31: A discssuion of how a babysitting co-op among neighbors failed.Reality: OK, I see this leading to really bad conclusions about the larger economy, lol. See, the reason it's not really a good test is because for rich suburbanites, a night out is 100% optional luxury, whereas a real economy is made up of various combinations of necessities and luxuries. Also, the rules for exchange were developed ahead of time. Any extrapolation is bound to be flawed.Paragraphs 32, 33: Krugman makes the following statement about "classical" economists: "They believe that all worthwhile economic analysis starts from the premise that people are rational and markets work, a premise violated by the story of the baby-sitting co-op".Only if you assume that free markets are designed to achieve a specific and predictable goal, or that you can pre-emptively design a system to accomplish a specific goal. The babysitting co-op, in fact, proves the folly of central planning. It turns out, people didn't value a night out as much as the designers thought; the "free market" of this luxury trading system pointed that out. If prices were allowed to fluctuate fully, the results would've been different. In other words, Krugman continues to build a stawman, apparently because they are easier to knock down than reality. After all, in the real, free market world, babysitters exist, and parents make use of them. Basically, he uses an example that works in a real free market and failed in a limited, planned economy, and comes to the conclusion that free markets don't work? LOL.Paragraphs 34, 35, 36: Discusses a few of the free market ideas for why recessions occur. Reality: It is a particularly shallow analysis, but this is a pop-econ article, not a journal article.Paragraph 37: Krugman again pretends that the Great Depression was a failure of free markets.Reality: Repeating a lie doesn't make it true.Paragraphs 38, 39: Discussion of the "New Keynsians", and how they tenaciously clung to free market ideas. More setup, I guess, for later.Paragraph 40: Krugman claims that economists had come to an agreement that central planning by the fed would save the economy.Reality: Only among technocrats and central planners. Real world economists never believed that nonsense. It's true, under Volcker, it looked easy, but monetarists and free market economists still were wary of the Fed's power to destroy the economy.Paragraph 41: Seems to indicate that free market economists supported Greenspan's loose monetary policy.Reality: Many economists had warned of the danger for years. Krugman is again showing how small are the circles in which he travels.Paragraph 42: It would take a crisis to reveal both how little common ground there was and how Panglossian even New Keynesian economics had become.Section V. NOBODY COULD HAVE PREDICTED . . .Paragraphs 43, 44: Krugman notes that many economists predicted the housing bubble, but central planners missed it.Reality: Duh!Paragrah 45: Krugman wonders how they missed the bubble.Reality: This should be his central thesis, and the answer is obvious -- nobody is correct all the time. This is exactly why central planning is doomed to failure -- when the mistakes of a few doom an entire economy, your system is flawed.Paragraphs 46, 47, 48: A discussion of the housing bubble, how some people said bubbles weren't possible because individuals are careful with their home purchases.Reality: This is a cartoonish simplification of both theory and of the reality. First, few economists hold such rigid beliefs; and I suspect the quote in the article is out of context. Second, it is possible to believe in a rational market AND a housing bubble. The problem is that if central planners create structural incentives to bid prices up, for any particular individual, it is economically rational to bid the price up, whereas for the economy as a whole, it is a dangerous game. Again, this is why we shouldn't give a few central planners the power to manipulate the structural incentives of free markets -- eventually, they will get it wrong.Paragraph 49: Krugman repeats his claim that this was "undiagnosed".Reality: Seriously? How many f-ing times are you going to repeat this nonsense?VI. THE STIMULUS SQUABBLEParagraph 50: Krugman says that the prosperity of 1985-2007 led to less fighting among economists.Reality: Probably true, we complain less about the dangers of central planning when things are not in crisis mode. That doesn't mean we agree, just that there are more pressing things to worry about.Paragraph 51, 52: Krugman uses the phrase "technocratic policies both sides were willing to accept"Reality: Another big LOL. The two sides aren't technocrats; technocrats are one side. The sides are technocrats vs free markets.Paragraph 53, 54: Krugman tries to explain why central planning can't rescue us from this central-planning-induced recession.Reality: Duh!Paragraph 55: Krugman uses the failure of central planning as evidence for the need for more central planning, of the Keynesian spending variety.Reality: Really? I guess the theory must be "if we try enough things long enough, eventually, we'll get it right." Sorry, I won't play. It's an idiotic theory built on an idiotic premise. The entire theory of Keynesian spending is flawed because it operates in a vacuum -- it ignores the fact that the money has to *come from* somewhere -- usually, the productive economy.Paragraph 56, 57: Obama's spending binge has made economists wake up and start to defend reality again.Reality: Yes, it's about time. 80 years of failed policy is enough; Obama's theory that if we just multiply a failed policy by 10 we'll get better results is a rare form of insanity.Paragraph 58: The ivory tower central planning theorists are shocked -- just SHOCKED -- to find out that people disagree with them.Comment: Another big LOL.Paragraph 59: Krugman misrepresents Friedman's views.Reality: Friedman didn't believe in central planning, but he was a realist. He knew the Fed existed and was not going away soon, so he tried to steer them in the right direction. That doesn't mean it was his preferred system, he was just trying to make a bad situation less harmful. Krugman has a long history of misrepresenting Friedman's beliefs, so this is no surprise that he does it here again.Paragraph 60, 61: Not sure what he's talking about here; apparently he found some obscure theorists. I certainly haven't heard these theories before and they are far from the mainstream.Paragraph 62, 63: More misrepresentation of free market theories, followed by noting that the New Keynesians models don't work.Reality: Tired strawman; and of course Keynesian models don't work.VII. FLAWS AND FRICTIONSParagraph 64: Krugman again shows his lack of understanding of free market theory.Reality: Have fun with your stawman, Mr K, I'm not playing.Paragraph 65, 66, 67: Krugman acts surprised and shocked to find that economics is complex and subtle.Reality: That's what free market economists have been saying for years, it's about time you are coming around.Paragraph 68: Krugman again misrepresents Friedman's views.Comment: Sigh.Paragraph 69: Krugman seems to be further realizing the reality of what free market economists have been saying all along.Reality: Someday, maybe he'll even develop an understanding!Paragraph 70, 71: Krugman falls back to claiming the current crisis is a free market failure,Reality: Free market economists are the ones who recognized and warned about the danger for a decade. Yes, Paul, horrible structural incentives can cause bad things to happen. No surprise there.Paragraph 72, 73: Ignoring the implications of everything he's written to this point, he again claims the current crisis is a free market failure and shows the need for central planning.Reality: This is why Krugman is such a joke -- he can write 8 pages and then ignore the obvious implications of his own writing.VIII. RE-EMBRACING KEYNESFinal three paragraphs: Krugman again defends Keynesian economics and says, because humans are flawed, we need more central planning.Reality: It is because humans are flawed that central planning is dangerous. All you need to ask is one simple question: If a person makes a mistake, do you want it to affect that person, or do you want it to affect 300 million people? With central planning, you get the latter; with free markets, you get the former. It seems like an obvious choice, but apparently Krugman prefers to affect 300 million. That is such a sad and cynical view, and after detailing this article, I just find Krugman more appalling than ever. His line of thinking has led to vast amounts of suffering over the last 100 years; it's time to kill it once and for all, not call for its revival. So there, checky, I expect an equally detailed response from you now, or I will personally accuse you of intellectual laziness. Let's see you respond to every single point here.

I just want to say that this post turned me from an occasional lurker to a member. It's humorous, it's dead on accurate, it's a little in your face. I love it, bravo.

[Balloon guy 158]

All right, I can't resist a challenge. First, Krugman is a horrible writer, just dry and disjointed, so I want you to know the pain I went through to do this. I had to do it in small doses, a few paragraphs at a time, over the course of 8 hours. Also, the article is as bad as the first page, with false statements and misrepresentations throughout. But here it is, a paragraph-by-paragraph analysis of what turns out to be just as idiotic when you read the whole thing as when you read the summary.Paragraphs 1,2: Krugman says: Economists recently believed they had solved the problem of market cycles.Reality: Only technocrats, such as himself, ever believed that. Most economists knew better.Paragraph 3: He says: Few economists saw this coming.Reality: Most economists saw this coming for at least a decade. It is surprising (or maybe not) that he didn't, seeing as how he's supposed to be an expert. Heck, even that crazy guy WrongWay in the stock market thread saw this coming. When internet loonies know more than you about your career, it may be time to hang it up.Paragraph 4, 5: He says: This has created a deeper divide in the economics community.Reality: The divide has been there for a long time.Paragraph 6: He says: The Great Depression proved that free markets are terrible.Reality: The exact opposite, as has been covered many times. Individuals did not shrink the money supply; that was central planners. Individuals did not destroy trade, increase taxes, etc, etc, that was central planning.Paragraph 7: He says: Romantic notions of perfect vision led most economists to ignore the limitation of human action in markets.Reality: No serious economist ever said that; in fact just the opposite. What free market economists do, in fact, say, is that, because we are all flawed, it is better to have a million little errors that can be easily cleaned up than 1 or 2 big errors that destroy the economy, as occurs in central planning and as the Great Depression and the current crash demonstrate.Paragraph 8: He says: Economists will have to learn to live with an imperfect world.Reality: Most real economists already have learned to live with that; it's good to see Krugman is belatedly coming around.Paragraph 9: He says: Modern economics is founded on Smith's notion of free markets. He states the central premise is "trust the market".Reality: This is a cartoonish version of what Smith wrote and of what most economists believe. Paragraph 10: He says: basically, he repeats the lie that the Great Depression was the result of free markets.Reality: Repeating a lie over and over and over and over doesn't make it true.Paragraph 11: A brief defense of Keynes, saying he didn't want central planning, just government control of the money supply and economy when central planners felt it was necessary.Reality: LOLParagraph 12: Filler, no commentParagraph 13: A brief description of Friedman and how he made accurate predictions.... OK.Paragraph 14 and 15: He says: Eventually economists became more "radical" than Friedman, even saying that corrections were a necessary part of the economy. He also makes several false claims about markets always getting things perfectly right.Reality: Economic cycles are a reality, I'm not sure how anyone can deny that. Nobody ever claimed markets are 100% perfect, just that a few small errors is better than one really really big one.Paragraph 16: Some economists still believed in central planningReality: Some people still believe in a flat earth, too.III. PANGLOSSIAN FINANCEParagraphs 17 and 18: He says: Rambling about Keynes views of markets, comparing them to casinos.Reality: Yes, if you don't understand economics or markets, they can seem like a casino. For the people who make their living from them, it's more like the poker portion of the casino -- you know your edge, you know your variance, and plan for both.Paragraph 19: Krugman pretends that by the 80s economists believed market cycles didn't happen.Reality: Apparently being paid by the word, Krugman continues to build a strawman.Paragraph 20: Krugman claims there were no clear reasons for past economic cycles.Reality: LOL. He also confuses short term trends with long term trends, an easy mistake if you don't think very hard. Economic cycles are easy to explain in retrospect, but are fairly difficult to predict ahead of time. A big reason for this is timing -- events can be accelerated or delayed by years, leading to unpredictable interactions. So while it was obvious that the mortgage crisis was inevitable, nobody could predict the exact timing of it more than a year ahead of time. Krugman apparently confuses the confounding impact of temporal effects with a lack of understanding of basic theory. Perhaps he should ponder that a bit longer before he writes an article.Paragraph 21 and 22: Krugman discusses the whiz kids who developed Capital Asset Pricing Models.Reality: He overstates the claims a bit, but OK.Paragraph 23,24: Discusses economists who failed to see the coming crisis.Reality: Note that they all believed in central planning, that monetary policy should be used to influence asset prices.Section IV:Paragraphs 25,26,27: Introductory material for the next section, no commentParagraphs 28-31: A discssuion of how a babysitting co-op among neighbors failed.Reality: OK, I see this leading to really bad conclusions about the larger economy, lol. See, the reason it's not really a good test is because for rich suburbanites, a night out is 100% optional luxury, whereas a real economy is made up of various combinations of necessities and luxuries. Also, the rules for exchange were developed ahead of time. Any extrapolation is bound to be flawed.Paragraphs 32, 33: Krugman makes the following statement about "classical" economists: "They believe that all worthwhile economic analysis starts from the premise that people are rational and markets work, a premise violated by the story of the baby-sitting co-op".Only if you assume that free markets are designed to achieve a specific and predictable goal, or that you can pre-emptively design a system to accomplish a specific goal. The babysitting co-op, in fact, proves the folly of central planning. It turns out, people didn't value a night out as much as the designers thought; the "free market" of this luxury trading system pointed that out. If prices were allowed to fluctuate fully, the results would've been different. In other words, Krugman continues to build a stawman, apparently because they are easier to knock down than reality. After all, in the real, free market world, babysitters exist, and parents make use of them. Basically, he uses an example that works in a real free market and failed in a limited, planned economy, and comes to the conclusion that free markets don't work? LOL.Paragraphs 34, 35, 36: Discusses a few of the free market ideas for why recessions occur. Reality: It is a particularly shallow analysis, but this is a pop-econ article, not a journal article.Paragraph 37: Krugman again pretends that the Great Depression was a failure of free markets.Reality: Repeating a lie doesn't make it true.Paragraphs 38, 39: Discussion of the "New Keynsians", and how they tenaciously clung to free market ideas. More setup, I guess, for later.Paragraph 40: Krugman claims that economists had come to an agreement that central planning by the fed would save the economy.Reality: Only among technocrats and central planners. Real world economists never believed that nonsense. It's true, under Volcker, it looked easy, but monetarists and free market economists still were wary of the Fed's power to destroy the economy.Paragraph 41: Seems to indicate that free market economists supported Greenspan's loose monetary policy.Reality: Many economists had warned of the danger for years. Krugman is again showing how small are the circles in which he travels.Paragraph 42: It would take a crisis to reveal both how little common ground there was and how Panglossian even New Keynesian economics had become.Section V. NOBODY COULD HAVE PREDICTED . . .Paragraphs 43, 44: Krugman notes that many economists predicted the housing bubble, but central planners missed it.Reality: Duh!Paragrah 45: Krugman wonders how they missed the bubble.Reality: This should be his central thesis, and the answer is obvious -- nobody is correct all the time. This is exactly why central planning is doomed to failure -- when the mistakes of a few doom an entire economy, your system is flawed.Paragraphs 46, 47, 48: A discussion of the housing bubble, how some people said bubbles weren't possible because individuals are careful with their home purchases.Reality: This is a cartoonish simplification of both theory and of the reality. First, few economists hold such rigid beliefs; and I suspect the quote in the article is out of context. Second, it is possible to believe in a rational market AND a housing bubble. The problem is that if central planners create structural incentives to bid prices up, for any particular individual, it is economically rational to bid the price up, whereas for the economy as a whole, it is a dangerous game. Again, this is why we shouldn't give a few central planners the power to manipulate the structural incentives of free markets -- eventually, they will get it wrong.Paragraph 49: Krugman repeats his claim that this was "undiagnosed".Reality: Seriously? How many f-ing times are you going to repeat this nonsense?VI. THE STIMULUS SQUABBLEParagraph 50: Krugman says that the prosperity of 1985-2007 led to less fighting among economists.Reality: Probably true, we complain less about the dangers of central planning when things are not in crisis mode. That doesn't mean we agree, just that there are more pressing things to worry about.Paragraph 51, 52: Krugman uses the phrase "technocratic policies both sides were willing to accept"Reality: Another big LOL. The two sides aren't technocrats; technocrats are one side. The sides are technocrats vs free markets.Paragraph 53, 54: Krugman tries to explain why central planning can't rescue us from this central-planning-induced recession.Reality: Duh!Paragraph 55: Krugman uses the failure of central planning as evidence for the need for more central planning, of the Keynesian spending variety.Reality: Really? I guess the theory must be "if we try enough things long enough, eventually, we'll get it right." Sorry, I won't play. It's an idiotic theory built on an idiotic premise. The entire theory of Keynesian spending is flawed because it operates in a vacuum -- it ignores the fact that the money has to *come from* somewhere -- usually, the productive economy.Paragraph 56, 57: Obama's spending binge has made economists wake up and start to defend reality again.Reality: Yes, it's about time. 80 years of failed policy is enough; Obama's theory that if we just multiply a failed policy by 10 we'll get better results is a rare form of insanity.Paragraph 58: The ivory tower central planning theorists are shocked -- just SHOCKED -- to find out that people disagree with them.Comment: Another big LOL.Paragraph 59: Krugman misrepresents Friedman's views.Reality: Friedman didn't believe in central planning, but he was a realist. He knew the Fed existed and was not going away soon, so he tried to steer them in the right direction. That doesn't mean it was his preferred system, he was just trying to make a bad situation less harmful. Krugman has a long history of misrepresenting Friedman's beliefs, so this is no surprise that he does it here again.Paragraph 60, 61: Not sure what he's talking about here; apparently he found some obscure theorists. I certainly haven't heard these theories before and they are far from the mainstream.Paragraph 62, 63: More misrepresentation of free market theories, followed by noting that the New Keynesians models don't work.Reality: Tired strawman; and of course Keynesian models don't work.VII. FLAWS AND FRICTIONSParagraph 64: Krugman again shows his lack of understanding of free market theory.Reality: Have fun with your stawman, Mr K, I'm not playing.Paragraph 65, 66, 67: Krugman acts surprised and shocked to find that economics is complex and subtle.Reality: That's what free market economists have been saying for years, it's about time you are coming around.Paragraph 68: Krugman again misrepresents Friedman's views.Comment: Sigh.Paragraph 69: Krugman seems to be further realizing the reality of what free market economists have been saying all along.Reality: Someday, maybe he'll even develop an understanding!Paragraph 70, 71: Krugman falls back to claiming the current crisis is a free market failure,Reality: Free market economists are the ones who recognized and warned about the danger for a decade. Yes, Paul, horrible structural incentives can cause bad things to happen. No surprise there.Paragraph 72, 73: Ignoring the implications of everything he's written to this point, he again claims the current crisis is a free market failure and shows the need for central planning.Reality: This is why Krugman is such a joke -- he can write 8 pages and then ignore the obvious implications of his own writing.VIII. RE-EMBRACING KEYNESFinal three paragraphs: Krugman again defends Keynesian economics and says, because humans are flawed, we need more central planning.Reality: It is because humans are flawed that central planning is dangerous. All you need to ask is one simple question: If a person makes a mistake, do you want it to affect that person, or do you want it to affect 300 million people? With central planning, you get the latter; with free markets, you get the former. It seems like an obvious choice, but apparently Krugman prefers to affect 300 million. That is such a sad and cynical view, and after detailing this article, I just find Krugman more appalling than ever. His line of thinking has led to vast amounts of suffering over the last 100 years; it's time to kill it once and for all, not call for its revival. So there, checky, I expect an equally detailed response from you now, or I will personally accuse you of intellectual laziness. Let's see you respond to every single point here.

Is it okay if I just read this post to decide what I think of Paul Krugman?, who is an idiot, and Algore has a nobel prize...

[akoff 0]

Well done Henry..that should about end this topic.

[strategy 4]

why do all the posters with poker hand names suck so much

[gobears 0]

I'm obviously a democrat and many years ago I used to read Krugman and liked his anecdotes. At some point, it became clear he was an entertainer and not an economist. I'm not sure how he won the Nobel Prize.There's a website put out by a liberterian named Don Luskin, www.poorandstupid.com where he debunks Krugman pretty thoroughly everytime Krugman puts out a stupid article. I don't agree with Luskin on all his views but on Krugman, he's been spot on.

[Nimue1995 1]

I just want to say that this post turned me from an occasional lurker to a member. It's humorous, it's dead on accurate, it's a little in your face. I love it, bravo.

I find Henry to be one of the more intelligent posters on this forum. I've learned a great deal from him and he's willing to learn from others which makes him a wise man in my opinion. Sorry Henry if that's an insult to you,lol.

[hblask 1]

I find Henry to be one of the more intelligent posters on this forum. I've learned a great deal from him and he's willing to learn from others which makes him a wise man in my opinion. Sorry Henry if that's an insult to you,lol.

One of the best compliments I've received. One of the reasons I like arguing here is all the smart people who teach me all sorts of stuff. And BTW, I guess checky is anti-intellectual, because he didn't immediately respond to every line of my post.

[Balloon guy 158]

One of the best compliments I've received. One of the reasons I like arguing here is all the smart people who teach me all sorts of stuff. And BTW, I guess checky is anti-intellectual, because he didn't immediately respond to every line of my post.

checky is actively seeking to destroy himself through playing the WCOOP, which might explain why he is absent right now.But he is not anti-intellectual as long as the intellect in question is decidedly left of center.