An honest critique of Paul Krugman

Paul Krugman is a bully.  There’s no other way to frame it.  Every so often he emerges to write a NY Times op-ed about how dumb Republicans and fiscal conservatives are, while constantly pressing his agenda for debt in more academic settings.

Listening to his countless lectures and debates with fiscal conservatives is like turning to a thesaurus for every different way to call someone a “dunce.”

While Paul Krugman has an astounding knowledge of facts and figures, his responses to basic economic principles often degrade to unfounded statements about gold and fiscal responsibility.  He likes to bully Austrians who adhere to core principles of economics that PREVENT recessions in the first place.  This leads me to my first main disagreement with Krugman:

1. Keynesians love to discuss spending to get out of a recession while assuring people they are “fiscal hawks” during the good times.  The fatal flaw to this logic; however, is that they never discuss what started recessions in the first place.  Krugman is the guy who advocated for a “housing bubble” after the dotcom crisis in order to pull the economy out the doldrums.  Seriously?  Just remember this is the man who essentially wrote the playbook for economic policy beginning in 2008.  So while Austrian policy actually prevents economic bubbles in the first place, Keynesians bring us into bubbles then advocate for bubbles in order to pull us from the crash of the last bubble, all while claiming they are “fiscal hawks” during the good times.

My second issue with Krugman is that:

2. He doesn’t understand his own policies from the place where it really matters: Wall Street.  Krugman is an academic who spends his time at elite economics conferences where Keynesians gather to discuss job creation and wealth inequality, stuff that tickles the hearts of celebrity philanthropists.  Krugman will embarrass and bully someone like Ron Paul, but put him in front of someone like David Stockman or Peter Schiff and he turns into an irrational and illogical child.  That’s because Stockman and Schiff actually work with money.  They understand better than anyone the perverse incentives that free money, low interest rates, and quantitative easing create in the stock market.  So while Krugman is busy discussing the minutae of how much unemployment is really driven by early retirement versus youth unemployment, Stockman and Schiff can recite Schiller ratios in various stock indices and are acutely aware of how inflated the stock market has become.

While Krugman has no problem bullying a political academic pundit like Ron Paul, his arguments would shrivel when confronted by someone like Hans Hermann Hoppe.  Hoppe is simply too adept at debate to be bullied by someone like Krugman.  Hoppe understands economics better than perhaps anyone alive today and instead of going head-to-head with Krugman on facts and figures, decides to instead treat him like a child and ask very simple questions.  I would highly recommend this clip for everyone to watch:

How CAN we create wealth by printing new money?

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