Thursday, July 12, 2012

Krugman's "Joke"

Under fire by an EPJ reader, Paul Krugman said he was just joking, when he called for Alan Greenspan to create a housing bubble. Thanks to an anonymous commenter, we have the exact words Krugman used in 2002 when telling his "joke":
A few months ago the vast majority of business economists mocked concerns about a ''double dip,'' a second leg to the downturn. But there were a few dogged iconoclasts out there, most notably Stephen Roach at Morgan Stanley. As I've repeatedly said in this column, the arguments of the double-dippers made a lot of sense. And their story now looks more plausible than ever.
The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.
Oh yeah, that's a real thigh slapper. Watch out John Stewart. As the anonymous commenter wrote:
...I don't know how anyone who is fluent in English and knows how to read could possibly say this was meant as a joke. Krugman seems be the real joke here. Maybe we should automatically assume EVERYTHING he writes is indeed meant as a joke. That would certainly explain his horrendous economic forecasts and recommendations. 

16 comments:

  1. Since Krugman likes to joke about his own confused arguments can we now stop pretending he's anything other than a clown? (Not unlike another Nobel prize winning clown)

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    1. The Nobel prize is as devalued as the US dollar.

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    2. Let's not forget what sort of prize this "Nobel Prize in Economics" actually is...

      The Swedish Central Bank Prize in Economics

      Those Wacky Swedes

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  2. If Krugman's editor is smart, he may require that Krugman explicitly state when his statement is a joke or not. Better that the reader just assume he is joking unless he statements otherwise. But how will we know if his claim that he's serious is in fact a joke or vice versa.

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    1. I think you miss the point. Krugman needs the ambiguity to always be able to claim he's right. I doubt the stooges at the NYT have any interest in integrity over professed/alleged proficiency.

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  3. Sounds like Krugman has painted himself in a corner.

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  4. hahaha, that krugman can really yuck em up!

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  5. His career is a joke

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  6. I heard he has an hour long special on Comedy Central coming out.

    Was Paul McCulley joking when he said the same thing? errr ummmm... no.


    Krugman is like a 5 year old that gets caught with his hand in the cookie jar and says he is looking for celery or something. What a joke.

    I googled Krugman was wrong and this came up.

    Krugman’s predictions were no more accurate for other countries. He criticized the reduction in German government spending in June 2010 as a “huge mistake,” and said: “budget cuts will hurt your economy and reduce revenues [by reducing economic growth].” Yet, more than a year later, Germany’s unemployment rate continued falling, dropping by 0.7 percentage points between June 2010 and August 2011. And as of June 2011, German GDP during 2011 grew at 3 percent, almost twice as fast as our own GDP growth.

    Read more: http://www.foxnews.com/opinion/2012/04/12/krugman-bad-prediction/#ixzz20SG1ykD2


    I suppose he was "just kidding" about that. What a convenient way to avoid eating crow.


    But who knows, maybe Krugman is way smarter than everyone. He could be the world's best troll and this he is just sitting back laughing about all the idiots that take him seriously.

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    1. "Was Paul McCulley joking when he said the same thing? errr ummmm... no.:

      Did you actually read the article McCulley wrote? It actually was a bit of a cynical joke. And McCulley was making a prediction, not an endorsement of a bubble.

      http://www.pimco.com/EN/Insights/Pages/FF_07_2001.aspx

      "There is room for the Fed to create a bubble in housing prices, if necessary, to sustain American hedonism. And I think the Fed has the will to do so, even though political correctness would demand that Mr. Greenspan deny any such thing (just like he denied belatedly attacking the NASDAQ bubble)"

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    2. Perhaps McCulley was joking but the Krugtard wasn't.

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  7. Crookman doesn't give a rat's ass if he is right or wrong, or how history will perceive him. All he cares about is that there is an audience desperate to hear his gobbledegook and posts for him to dish it out from and make the big bucks.

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  8. Krugman is like the Pope of economics now. Like one of the Borgia Popes of the Renaissance. He knows he is the center of the economic policy universe and has the gravitas that comes with the Nobel prize and the New York Slimes bully pulpit. He doesn't have to act like a real economist anymore because he has the funny hat and scepter to dazzle the dufus media mavens, who know little or nothing about macro economic theory. When someone questions his wisdom he just waves his hand imperiously and babbles about how many angels can dance on the head of a pin.

    The economist Mark Skousen had a coincidental meeting with Kruggy the Klown recently in the London subway and brought up how Canada used "austerity" to get its economy running again in the mid 90's. Kruggy the Klown simply waved the question off and credited Canada's turn around to a cheap Canadian dollar. Except the Canadian dollar hasn't been cheap for quite some time and now is around par with Federal Reserve Notes, yet Canada has largely avoided the current economic downturn. Kruggy the Klown is a

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  9. October 30, 2006

    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/

    Krugman and the Keynesians are all hair-splitters. In his mind, I’m sure Krugman is saying that what he proposed was a “good bubble”, a properly managed bubble, which would not quite be a true “bubble” because it would be properly regulated and managed. So he was really joking when using the word “bubble”, because what he was really promoting was the creation of its “good” cousin type of properly regulated non-bubble bubble. What we got instead was an unregulated harmful bad bubble which is the fault of unregulated laissez faire capitalism.

    What a lying double-talking bastard.

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  10. A portfolio should be created of simply doing the opposite of whatever advice Paul Jokeman gives.

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  11. BTW they are doing this now in the UK. They're injecting £80bn to get home lending underway. I believe this is in addition to the £50bn QE they've launched. So Krugman can look to the UK as his protege.

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