Monday, April 30, 2012

Ron Paul Smashes Paul Krugman (The Proof)

Paul Krugman started it and Ron Paul finished it.

During the "debate" on Bloomberg television between Congresman Paul and Krugman, Krugman said:
You can't leave the government out of monetary policy.If you think that you can avoid that you're living in the world that was 150 years ago.
Well, two can play that game and Dr. Paul responded by taking Krugman back centuries: "He wants to go back 1,000 years or 2,000 years, just as the Romans and the Greeks or others debased their currency," Paul said.

You know someone has really gotten demolished in a debate when they immediately rush to their blog to "set things straight" after the debate. Krugman rushed to his blog and had this to say:
Don’t Know Much About (Ancient) History

The things I do for book sales. I debated, sort of, Ron Paul on Bloomberg.Video here. I thought we might have a discussion of why the runaway inflation he and his allies keep predicting keeps not happening. But no, he insisted (if I understood him correctly) that currency debasement and price controls destroyed the Roman Empire. I responded that I am not a defender of the economic policies of the Emperor Diocletian....we we don’t really know what happened — what really did go down during the Diocletian era? — you can project what you think should have happened onto the sketchy record, then claim vindication for whatever you want to believe.
In other words, that Ron Paul punch still stings Krugman. As for the details that  Krugman may not know, what happened in the Diocletian era  is pretty much common knowledge to well read economists.
 Indeed, even Wikipedia covers the topic quite well:
The Edict on Maximum Prices (also known as the Edict on Prices or the Edict of Diocletian; in Latin Edictum De Pretiis Rerum Venalium) was issued in 301 by Roman Emperor Diocletian. Diocletian's Edict was his attempt to curb inflation via price controls. It was counterproductive and quickly ignored.
In a more detailed analysis of ancient price control schemes, Thomas DiLorenzo, in 2005, wrote at Mises.org:
In 284 A.D. the Roman emperor Diocletian created inflation by placing too much money in circulation, and then "fixed the maximum prices at which beef, grain, eggs, clothing and other articles could be sold, and prescribed the penalty of death for anyone who disposed of his wares at a higher figure." The results, as Schuettinger and Butler explain, quoting an ancient historian, were that "the people brought provisions no more to markets, since they could not get a reasonable price for them and this increased the dearth so much, that at last after many had died by it, the law itself was set aside."

Bottom Line:  Krugman is rushing  to diss a point he didn't understand. Translation: Ron Paul landed a hard punch to the face that still stings Krugman.

71 comments:

  1. At the end of the debate Krugman stated that the Fed is not debasing the dollar. His proof? That the dollar is up vs the Euro! How the heck does relative currency pricing prove anything about currency debasement? But how does he explain gas and food prices spiking in recent months? He mumbled something about China. Does Krugman need to go back to econ 101?

    ReplyDelete
    Replies
    1. Gas prices are rising because of oil speculators and all the stuff going on in the Middle East, food prices are rising because of the rising gas prices. It costs more to move the food.

      Delete
    2. Gas prices are not rising because of speculators. The data is pretty clear on that, read Lutz Kilian's research, he's the expert on oil prices. Here is a good source: http://www.voxeu.org/index.php?q=node/7892

      The recent bulge in food and energy prices is due primarily to growing global demand from developing economies like China and India. As the global economy continues to improve after the recession, we can expect energy prices in particular to rise faster than inflation, due to the global nature of the energy market.

      Delete
    3. Blaming "speculators' for higher gas prices is like blaming your temperature gauge for your car overheating. Time to pop the hood and look at your cooling system.

      BTW with "Real" interest rates below zero we are all speculators.

      Delete
    4. More on "speculators." Much of the fuel pumped or refined in the US goes to India or China because those people are willing to pay more for it. We have the supply; they have the demand. Another factor is that refineries in the northeastern US have been closing because they can only process the light crude which we formerly got from Iran and Libya. And finally, the price of fuel keeps going up because the value of the dollar keeps going down.

      Petroleum and its byproducts are an international commodity. The price is controlled by international pressures, among which speculation is a very minor factor.

      Delete
  2. Wow that was just sloppy. Wenzel do you think Krugman really didn't get the point, or is he trying to distract from the other stuff? I.e. get people bogged down over ancient Rome?

    ReplyDelete
    Replies
    1. Two things Krugman said give up why he'll never debate you:

      1) US dollars "are not just green pieces of paper with the faces of dead presidents on them." (2:20) I took ECON 101 at a community college (night school), and even that instructor knew what "fiat" means.

      2) He's unaware of the fact that the US government has jailed people for floating private currency. (9:00) If he read your article 'The "Crime" of Private Money' from April, 2011 he would know.
      ---

      Krugman was beaten so bad, Bloomberg had to use the mercy rule and retire him at about half way.

      Delete
    2. Yup. There is zero chance Krugman would debate Murphy, Wenzel, Woods, etc. This debate exposed exactly how bad he is at debating the issues whenever someone can respond and it isn't in his volvo driving NY Times blog reading audience.

      Delete
  3. Krugman doesn't have any solid counters to Dr. Paul's points. He just makes silly faces to try to make it appear Ron doesn't know what he is talking about. I can't believe this guy is on TV...

    ReplyDelete
    Replies
    1. In fairness to Krugman, his face always looks silly.

      Delete
  4. Krugman knew exactly what Ron Paul was saying, and knew he was beaten. The proof? Ron Paul only mentioned the Roman Empire. It was Krugman who, though he feigned dismissive ignorance, brought up Diocletian's name specifically. He's well aware of the parallels between the Fed/Bernanke/Corporatist Administration and ancient Rome. He just thinks he's smarter than those dumb Romans, and that, thiss time, the debasers have everyone fooled.

    ReplyDelete
    Replies
    1. Anon @ 9:42 PM,

      Excellent point re: Krugman's feigning ignorance. Krugman got caught in his own web of lies and deceit and then resorted to plying sleight-of-mind to cover his pompous ass, plain and simple.....he's not an economist.

      Delete
    2. Anon @ 06:42 PM
      Krugman was name dropping. He's a smart guy and he plays his part professorially. But like you said, he thinks this time, with the benefit of hindsight, it will be different.

      Delete
    3. Yup. Krugman did not realize Paul had a better grasp of history than him on monetary econ, so he was completely thrown by the reference and had to run to his blog a defeated man to try and spin things to the obama supporters at the NY Times.

      Delete
  5. Terrific article. I love the insight to these references. Ron Paul must win the nomination. He's the only one who knows what he is talking about!

    ReplyDelete
  6. Go Ron!!!
    Thanks to EPJ and the Lew Rockwell Show for their continuation in exposing the lies that the news and our so called politicians keep feeding us. An honest person is hard to find these days. Thanks again.

    ReplyDelete
  7. Hahaha! That is frigging awesome! I always pull out Diocletian any time somebody claims that free-market money is an old and outdated idea.

    ReplyDelete
  8. Dr. Paul for president Dr. Paul for America.

    ReplyDelete
  9. One point Krugperson makes is that "people can use barter if they wanted to". Realy? So he is telling us that money, something that has value as a universal medium of exchange, that lets us compare commodities and services across all categories and allows price mechanisms to set in, is the same as direct exchange? What f***ing primitive economy does he think we are living in? May be RP was charitable. PK wants us to go back to pre monetary times when direct exchagne was the norm.

    ReplyDelete
    Replies
    1. Actually direct exchange was most likely never the norm. There are almost no instances of modern "non-money" economies that use bartering. Google "David Graeber" for more info

      Delete
    2. A system of transactions utilizing non-denominated credits and debts within small communities is a barter system without spot transactions. Graeber fails to make his case for a historical commodification of debt.

      Delete
  10. Somewhere within the crazy Krugman-Keynesian calculations is an independent variable of zero making everything he thinks a non solution. It is simply amazing that he does not have the intellectual courage to admit his silly mistake when faced with the Austrian truth firmly placed in the denominator.

    ReplyDelete
  11. Krugman wants to look at history? That's exactly what Ron Paul does. Every monetary system that stole the wealth of its population via inflation, let it be through clipping of coins or printing money, collapsed. The Romans were no exception, and it's going to happen to the United States as well.

    ReplyDelete
  12. You guys would do well to try to see this from the point of view of the large number of people who are more or less new to economics and trying to make sense out of what they are hearing from different sides.

    Keynesians like Krugman keep saying greater deficits and debasement will cure unemployment. Austrians and their fellow travelers claim that all these policies will lead to hyperinflation. For someone on the sidelines, it would make the Austrians look a lot more credible if they had not been predicting out of control inflation.

    ReplyDelete
    Replies
    1. ANON @ 08:23 PM

      I agree for the most part. We are experiencing inflation and have been for some time but it is slow and incremental. Personally I try and stay away from the word hyper and runaway and use the analogy of the slow boiling unaware frog instead.

      Delete
    2. Just wait until the rest of the world dumps the dollar. We're the reserve currency; it is giving us some protection.

      And this inflation isn't all that mild if my pocket book has anything to say about it.

      Delete
  13. Krugman comes off as a little bratty statist psychopath mouthpiece of the global counterfiet money terrorists...Oh, that's because he is!

    ReplyDelete
  14. Damn. Krugman got owned yet again by the Austrians.

    Speaking of wrong predictions, where is the deflation that Krugman predicted? Where is the depression instead of the fed inspired mini boom we are experiencing? What about his prediction that commodity prices would not rise if QE2 was implemented? What about his predictions of the various stimulus attempts working?

    Krugman has been humiliated by an Austrian yet again. He better get used to it. Thanks to the Paul revolution, this is only going to happen more and more often.

    ReplyDelete
  15. If Krugman is having to pretend to be ignorant of the debasement to the Roman currency as a major aspect of the empire failing then he knew he was defeated. The fact that he is running to his blog to spin things to his ignorant readers -- the same NY Times readers who constantly blasted Bush for things like the Patriot Act and war abroad and yet support someone like Obama who is ten times worse -- is more than proof enough of who won the debate.

    ReplyDelete
  16. so out of a 15/20 minute debate, this is what you choose to write about............

    ReplyDelete
  17. i was thinking the same thing about the need for him to blog on the gd new york times after he got embarrassed. im not an economist, but i can tell when people feel like they're out of their league, and krugman looked it. even the host was excited about the whole thing. absolutely awesome. i am not here to criticize the arguments the two made, cause i am a layman, but anyone can tell how hard these people have to try to not appear to like, agree with, or respect ron paul, and that is one of the reasons i listen to him.

    ReplyDelete
  18. It is worth to note that Bloomberg seems to be quite supportive to Ron Paul now. (Looks like someone deceived Paul Krugman into thinking he will be taking part in a friendly-topic debate set up - probably the ones he used to have in the past)

    Maybe they see the change of winds and would wish to be prepared in any case.

    ReplyDelete
  19. Krugman claims not to be a defender of Diocletian's policies, and he's probably unaware that he does exactly that whenever he calls for more inflation, more regulation, and more public debt. If he ever took a remedial history course, he might learn that the Romans destroyed their society by following precisely the same idiotic policies that our federal government practices today.

    Diocletian brutally inflicted every single policy that Krugman advocates, and went so far as to proclaim the death penalty for anyone who failed to pretend that bronze slugs were worth as much as genuine silver dinari.

    ReplyDelete
  20. It must be hard to argue a lie. Happy to see Dr. Ron Paul have a chance to speak the truth.

    ReplyDelete
  21. it might do Krugman some good to simply read rothbard's 'what has the government done with our money' it seems that he has a very poor concept of what money really is and how it comes about, how it retains any value at all and how that value is destroyed by things like the fed.

    ReplyDelete
    Replies
    1. I doubt it. There's the anecdotal story of an Austrian enthusiast running into Herr Krugman on his beloved Amtrak one day and him refusing to sign a copy of "America's Great Depression."

      "You shouldn't read books like that," was his reported response to the request.

      Delete
  22. To all, the so called currency that got debased, was silver.

    The use of silver as an exchange, did not save the empire from inflation!

    ReplyDelete
    Replies
    1. So I suppose you know what some coins have milled edges, right?

      I'm making the point that a free market that allowed multiple currency's would naturally gravitate towards those that are stable and hold value effectively....which would make mints accountable in how/what they use for money.

      Delete
    2. and Kings and Queens used to clip coins as well. You don't need paper money to debase a currency, just reduce the amount of silver/gold in a coin then by fiat declare that it is worth its full weight.

      Delete
  23. I liked the jab at Milton Friedman. Krugman's just wants to frame this debate into a Keynesian vs Friedman discussion of the role of the government in the economy. But he knows he can't. "Milton Friedman is now on the far left of monetary policy"

    That means the Austrians have succeeded in changing the tenor of the debate. It can no longer be framed as "how much should the Fed intervene?" It's now "should the Fed even exist?"

    ReplyDelete
    Replies
    1. Friedman was a statist in a lot of ways. As you said, this is proof that the austrians are winning. Hayek, Mises, Rothbard, etc are the framers of the debate now, not the guy who advocated welfare to poor people with transfer payments and directly taking out of paychecks federal taxes.

      Delete
  24. I'm surprised nobody mentioned this:

    Starting at about 19:40 in this video of the Bloomberg interview Krugman basically says he doesn't buy that the Fed caused the housing bubble. He snarks it off as "the great lie."

    However, in 2009, in his blog Krugman attacks the people who claimed he called for a housing bubble by snarking that "What I said was that the only way the Fed could get traction would be if it could inflate a housing bubble. And that’s just what happened."

    Apparently, after all this time, Krugman still doesn't get that Google is NOT his friend.

    ReplyDelete
    Replies
    1. Excellent point! Wenzel should make that another entry on his blog since we know Krugman is very much bothered by this site.

      Delete
    2. Paul Krugman: As Paul McCulley of PIMCO remarked when the tech boom crashed, Greenspan needed to create a housing bubble to replace the technology bubble. So within limits he may have done the right thing. But by late 2004 he should have seen the danger signs and warned against what was happening; such a warning could have taken the place of rising interest rates. He didn’t, and he left a terrible mess for Ben Bernanke.

      http://krugman.blogs.nytimes.com/2006/10/30/credit-where-credit-is-due/

      Delete
    3. Hilarious! On the bloomberg debate Krugman claimed that 08 was a total market failure as a result of an unregulated market, yet his own writing shows that the Fed created the bubble.

      These weasels like Romney, Obama, and Krugman have to just hate google and youtube since it makes it so much harder for them to bullshit and lie.

      Delete
    4. Please wenzel highlight this with another entry! Krugman claimed in this debate that the "market failed" in 2008 with "an unregulated economy," yet he himself admitted the fed created the housing bubble in 06!

      Delete
    5. Outstanding point!

      Delete
  25. Yea the simple fact that he said people can barter just shows he doesn’t understand money and its origin. Also he points to the economic recovery after WWII when govt did the exact opposite of what he is calling for now and Ron Paul called him out on it. He supports a little inflation. Maybe he can explain what’s wrong with a little deflation? After all Austrians explain what’s wrong with a little inflation. What a hack.

    ReplyDelete
  26. I disagree that Krugman is 'lying.' The upside-down Keynesian tautology requires an interventionist government and is best shot out of an artificially manufactured Fed gun.

    It is no coincidence that Krugman believes that the 'natural rate of interest' is the rate which produces full employment. Besides the fact that only a socialist at heart would even think to come up with such a statement, the point of fact is that since there is no empirical method of determining what that rate might be, Krugman is implying that interest rates are whatever Emperor Bernanke says they are. You know, like Diocletian.

    If you swallow the Keynesian pill, you have to swallow all of it. You can't live in the Matrix and the real world at the same time.

    ReplyDelete
  27. Krugman illustrates very well what Taleb says about academics, that they have a mental defect making it hard to understand that systems can operate on their own, without some known law controlling them. Clearly, Krugman does not believe American society can actually function unless manipulated by government, the fed, himself, etc.

    ReplyDelete
  28. Ron Paul's retort to the the attempted slight of "taking us back 150 years" was absolutely brilliant. I'd hate to be debating Ron Paul even if I was on the right side of an issue, let alone wrong.

    I fear however the Ron's point was lost on a good percentage of the watching audience that probably have never taken the time to study the history of inflation like most of us here.

    I've always felt that Ron's approach to the common man should be one of common sense, pragmatic axioms that can't be disputed- such as the morality of inflation itself.

    Krugman, specifically referring to Diocletian, was attempting to salvage what was left of his argument; appealing to the uninformed by pretending that he knew the history of things better than Paul. It may have worked on those uninformed...but it matters not in the big picture.

    ReplyDelete
    Replies
    1. I completely agree about the response to the 150 years back attack. It is a brilliant counter point that destroys that whole line of thinking with basic history and the truth.

      Delete
  29. NPR's On Point with Tom Ashbrook had Krugman on last night. I'm not sure he made one comment that wasn't completely wrong. Amazing, the consistency of that man.

    I'm guessing he won his Nobel prize in economics from the same people that gave Obama the Nobel Peace prize ...

    ReplyDelete
    Replies
    1. You do understand the nobel prize in economics isn't a nobel prize right? Fuck you right wing trolls you know nothing.

      Delete
    2. It is awarded by the Swedish Central Bank, rather than the Royal Swedish Academy of Sciences. But its handed out at the same ceremony so de facto it is.
      Your argument would deny the peace prize as a real Nobel prize since its handed out in Oslo by another outfit.

      Delete
  30. Speaking of Krugman:

    Here is what his own editor at the NY Times said about him in 05:

    http://www.nytimes.com/2005/05/22/weekinreview/22okrent.html

    "Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults."

    I think that says it all!

    ReplyDelete
  31. http://publiceditor.blogs.nytimes.com/2005/05/31/new-public-editor-hosts-paul-krugman-daniel-okrent-debate/

    This exchange shows what a temper tantrum krugman has when called out on the truth! He also was basically called a liar by his editor at the NY Times. No wonder why Krugman rushed to his blog to try and spin things after the debate because the tv format did not allow him to misrepresent data and statements without being called on it.

    And boy, is Krugman furious over his attempt at claiming Paul wants to take us back one hundred years with the vicious counter punch that Krugman wants to take us back over one thousand years. His typical northeastern snarky liberal comment got countered with something several times more effective and also quite accurate. Krugman's stuttering and stammering in his whiny voice after that was just priceless!

    He is used to framing the debate and couldn't handle someone doing it back to him. I even saw some of his moronic followers on the ny times blog claiming Paul interrupted him, so it wasn't fair. First off, Krugman interrupted Paul a number of times, while he also attempted insults, hyperbole, and other nonsense that was quickly knocked down. The fact that he claimed market failure was a reason for the 08 collapse while having written that the Fed created a bubble in 06 is another example of why he should avoid debating in formats where he can't manipulate and distort the facts and truth.

    If the whiny Krugman and his followers can't handle that, then maybe he should stick to his blog at the dying and increasingly irrelevant NY Times paper?

    ReplyDelete
  32. Holy shit. Even lowly *I* learned about debasement & decline of the empire in my intro to economics class at UNC 20 years ago. There were 200+ people in that screwball class and we had to regurgitate it on the test. Give me a break Krugman.

    ReplyDelete
  33. Someone I know has been sending me Krugman articles lately, I have avoided reading him for the most part. It struck me that if these articles were written by a high school junior I would give him a mercy D. It is difficult to critique these articles since they lack any substance. So I just point out the errors in history and economics. Simply amazing.

    ReplyDelete
    Replies
    1. You should go over to Bloomberg and watch the whole interview (it's in parts, so it's a little difficult to recreate the exact sequence of the interview).

      It will make you laugh. It will make you cry. All the things great fiction accomplishes.

      Seriously, though. I watch Krugman and I have a hard time believing he believes the ignorant shit he professes. It's like a nobel prize-winning kid whose only economic experience is the allowance he receives each week giving the rest of the world advise on how to run their lives.

      Delete
  34. Krugman Slips...

    ..When questioned about leaving the Govt out of the economy, his response(@ 3:24):
    "If you think that you can avoid that, then you're living in some,..
    you're living in a world that was 150 years ago"....

    Yet when discussing alternate currencies (gold & silver),his reply
    (@10:15):
    "Do you really think people are only using dollar bills bc the Federal Govt isn't allowing them to use 'other stuff'...that seems to be a very strange point of view, and by the way....we have an alternative way...YOU CAN DO BARTER..YOU CAN DO BARTER for all kinds of 'stuff'..."

    BARTER??? Are you kidding me????

    Talk about living in a world 150 years ago?....
    Bartering goes back to the earliest civilizations and pre-dates the invention of money.
    KRUGMAN: you are the pot calling the kettle black...
    "..a very strange point of view"? HAhahahah!

    ReplyDelete
    Replies
    1. Excellent point. If Krugman is advocating barter, that takes us back way, way before 150 years.

      Delete
    2. we can barter when I have a chainsaw and you have a lawn mower and we decide to trade but I don't think your local grocer or the store in the mall or Amazon.com are going to take a chicken in exchange for something you want. And I kind doubt the IRS would take some lumber for the taxes I owe....hell, they wouldn't even take it in pennies!

      The guy is ridiculous.

      Delete
  35. Can I get a Nobel prize in economics too? Looks like you don't actually need to know much about it. Also, can I be a professor at a prestigious university without being able to defend my position in a debate?

    I chose the wrong profession!

    ReplyDelete
    Replies
    1. It only works if you are a Socialist.
      And a Socialist is by definition incompetent in economics.

      Delete
  36. A point on Krugman's claim that people can use barter instead of dollars. While people can do this at the level of, say, garage sales or exchanges through kijiji, they certainly cannot do it when purchasing products from a store, or on a company to company level. At the bottom of this restriction is taxation. The revenue collection agencies insist on "cash exchanges" and "cash value." Thus, even if two companies, or a person and a company were to deal in barter, they still need to exchange cash (or cheques) of equal value. So, apparently apart from ECON 101, the Krug also needs to take Accounting 101.

    ReplyDelete
  37. Nothing could be more obvious.

    The fear in Krugman's eyes shone clear as the course of the debate went on. In contrast, note RP's calm, good humored confident demeanor throughout.

    Krugman suddenly bailing on the second segment was the next clue. You would need a baseball bat upside the head to not be able to interpret THAT one.

    Even the corporate talking head moderator was visibly amuzed. You could tell they didn't expect him to do that.

    Third clue was the childish blog posts. Keynesians that lose debates with Austrians ALWAYS resort to childish blog posts, some of which go on and on over multiple posts trying to save face in front of the internet.

    ReplyDelete
  38. I saw the debate. It wasn't close. I like a lot of Paul points. Generally, I think libertarians are morons. Krugman loves controversy. Far from my favorite. Overall, Krugman embarrassed the old guy. It was more sad than anything. Any objective person saw it for what it was: an old crank being made fun of by a sharp academic.

    ReplyDelete
    Replies
    1. Mrs. Krugman, Nice of you to stop by.

      Delete
  39. It is hard to take someone uttering 'currency debasement' when there is not a single shred of a suggestive sign if inflationary pressures in the economy. Get real.

    ReplyDelete
  40. How's that currency debasement been working out of for you? Who's looking dumb now? Time wounds all heals.

    ReplyDelete