«

»

Paul vs. Paul

Ron Paul and Paul Krugman had a debate about economics (apologies for the link, which auto-plays). You can read Tyler Cowen’s commentary here. I agree with his final take:

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.

3 comments

No ping yet

  1. AlexInCT says:

    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.

    Heresy!

    How dare any of us rubes imply that our credentialed task masters, our betters in every way possible because they have the right credentials and know they know it all, don’t have a clue.

    Seriously, wouldn’t these morons by now figure out that no matter how well intended or educated, the any kind of central planning – and please, that’s the unfortunate kind of economy we have had in this country for some 2 decades or more – is doomed to fail? How much more history do we need where command economies and collectivists with the best of intentions destroy wealth and wealth creation, by picking who wins and who loses, and picking wrong/bad all the time, and enshrine misery?

    People like Krugman are beyond stupid. They are insane. They have massive proof that their beliefs are bullshit, and yet, like religious fanatics, they cling to that nonsense, because they do not like the fact that the world is neither fair nor inclined to see them as anything but the idiots they really are for thinking otherwise. And that’s the big problem we in the west face now: our nomenclatura doesn’t want to admit they have it all wrong and are doubling down on the stupid.

    Thumb up 0 Thumb down 0

      
  2. Argive says:

    I don’t know what the hell Paul was talking about when he said that the Byzantine Empire had a gold standard for a thousand years and they didn’t fight wars. The Byzantine Empire, like the Western Roman Empire, was at war almost constantly, with itself and everyone else. For instance, Emperor Basil II did not acquire the nickname “The Bulgar Slayer” through diplomatic means. And while the Byzantines did use gold, they also debased their currency much like the Western Empire had done. Congressman Paul’s command of history is a little faulty here.

    Thumb up 1 Thumb down 0

      
  3. AlexInCT says:

    And while the Byzantines did use gold, they also debased their currency much like the Western Empire had done.

    The sadder thing is that the barbarians where storming the gates while the credntialed elite – the of aristocracy back in them days – debated how many angels could dance on the had of a pin. The similarity with what’s going on these days is frightning to me. Dark Ages are a coming, baby.

    Thumb up 1 Thumb down 0

      

Comments have been disabled.