There were too many times when RP simply piled polemic points on top of each other and stopped making a sequential argument. He overrates the costs of inflation, including in the long term, and for a believer in the market finds it remarkably non-robust in response to bad monetary policy. Still, given that Krugman is a Nobel Laureate in economics, and Paul a gynecologist, the score could have been more lopsided than in fact it was.
I have disagreements with Ron Paul on monetary policy and the Federal reserve. But I think Cowen understates Paul’s performance. There were several times where he got in points that Krugman had no response to (except to later whine with dubious factual accuracy on his blog). The fact is that the Keynesians really don’t have an explanation of how a 60% cut in federal spending after World War II produced an economic boom, other than to wave the “we owe the debt to ourselves” mantra. The fact is that they predicted Truman’s budget cuts would wreck the economy and they didn’t.
I think Krugman also, like most Keynesians, underestimates the potential danger of inflation. It is true that a moderate inflation can ease a financial crisis. But it’s very hard to manage a “moderate” inflation because the temptation to inflate away debts is strong and it is very easy to get into an inflation-interest rate spiral like we did in the 70′s. This is why the Federal Reserve has been keen to keep that beast in its cage for three decades.
Still, it tells you something about the intellectual weakness of the Left when they are preening/whining about, as Cowen said, a Nobel Laureate debating a 76-year-old Republican who is regarded as a crackpot by all “thinking people”. I suspect Krugman will next debate Milton Friedman. This may actually be an even match since Friedman is dead at the present time.