Wednesday, May 2, 2012

Another Attack by Krugman

UPDATE: Paul Krugman has issued a correction to his recent post. The person he is quoting is not David Frum in his post, it is Noah Kristula-Green. Last known credential for  Kristula-Green (2010) web intern at The New Republic, though it appears he is now writing on Frum's blog. So yes, it can be said Krugman is now quoting  journalist newbies to defend himself against Ron Paul. Per Paul Krugman, LOL,when reading please replace the name of David Frum in the post below with that of Noah Kristula-Green.

The man must really be stung by the punches Ron Paul landed. He is defending himself, once again. This time by quoting, of all people, that great economist David Frum. I ask you, do you think Ron Paul is thinking this much about that debate? Would Ron Paul, or any other economist, ever quote David Frum?

Here's Krugman:
 There’s such a blizzard of misinformation out there that it’s hard to pick any one thing to single out, but David Frum picks up on one bit from the Paul/Paul show: the remarkable way many on the right now portray the postwar years of prosperity as a triumph of libertarian principles..
Yeah, it was a libertarian paradise all right — with a top marginal tax rate of 91 percent, a third of the work force in unions, and a minimum wage much higher relative to the average wage than it is today.
Well Krug, it was libertarian paradise compared to the war years. Here's the Bureau of Labor Statistics on the immediate postwar period:
 During the immediate postwar period, consumer goods, which were not available during the War, became in great demand. People had worked steadily during the war, often at overtime rates, and had money to spend. Demand for consumer items such as automobiles was high, so manufacturers had trouble filling orders.
And here is Robert Higgs making the exact point Ron Paul made:
 In the late 1940s the economy was once again broadly market-oriented, albeit far from pure capitalism. So, within a single decade the economy had moved from being mainly market-directed to being nearly under the complete control of central planners to being mainly market-directed again. When one views any economic measure spanning the decade, one must keep this full revolution of the institutional framework in mind, because the meaning of such measures as the unemployment rate, GNP, and the consumer price index depends on the institutional setting to which they relate. 
And as far as that top tax rate, Krugman ignores Hauser's law.

 Hauser's Law is a theory developed by economist William Kurt Hauser that postulates that in the United States, federal tax revenues will always be equal to approximately 19.5% of gross domestic product (GDP), regardless of what the top marginal tax rate is. From fiscal year 1946 to fiscal year 2007, federal tax receipts as a percentage of GDP averaged 17.9%, with a range of 14.4% to 20.9%. During the years referred to by Hauser (FY 46 to FY 93), the actual average was 17.7%.

It's cute to talk about a 91% top marginal tax rate, but the tax loopholes during that period insured that no one paid that rate.

As for other Krugman/Frum nonsense. Frum writes:
I  have a theory as to why. In that short interview Ron Paul revealed that his school of Austrian economics is more about assertions and ideology then it is about empirical data.
Duh, the Austrian School takes pride in consistently maintaining, not assertions, but a deductive approach to economics as opposed to what they view is a faulty empirical methodology. Indeed, the position has been held by Austrians for decades. The founder of the Austrian School, Carl Manger,published in 1883 his second book, Untersuchungen ├╝ber die Methode der Socialwissenschaften und der politischen ├ľkonomie insbesondere (literally, Investigations into the Methods of Social Science and Political Economy in Particular).

So it is nice that Frum noticed that Ron Paul did not use empirical data, but what is most noteworthy is that Krugman is quoting Frum, who clearly doesn't understand the difference between a yardstick that measures a physical surface versus a theoretical construct such as a deductive theorem in geometry. It's nothing but more signs of desperation by Krugman.


  1. The more familiar I am with Paul Krugman, the more I feel I can consider him an "Archie Bunker" of the left.

  2. Frum didn't write that article. Krugman just has no attention for detail.

    And it really shouldn't be that hard to understand... He paints a perfectly accurate picture of what really happened. One day after the war ended, tax rates went from 0-91%, 1/3 of the workforce unionized that day, and the minimum wage was instituted. Then the economy turned around. That is what happened right?

  3. I suggest you IMMEDIATELY change "Frum" to "Noah Kristula-Green", as Krugman cited the wrong person. Krugman updated his blog.

  4. WOW! You know you've hit rock bottom when... you seek help from Dubya's former speechwriter on economics!!!

    Between Wenzel's Fed speech and the Krugman smackdown, this has been quite the week for the promotion of Austrian economics. All the buzz created by the Krug and his buddies vainly trying to dig him out of the hole is only likely to entice their readers to learn a thing or two about Austrian econ.

    1. And Krugman was not even quoting Bush's former speech writer. He was quoting an intern at New Republic. Krugman has hit rock bottom and begun to dig!

  5. Krugman = Owned in this piece.

  6. Is this attack # 4?? Wow... I think its been said already but:

    The lady doth protest too much, methinks...

  7. Kinda scary he is a professor where he gets to infect young minds with his falsities.

  8. Go over to krugman's blag...the comments are humorous.

  9. I have numerous comments buried under that post. The responses are a hoot. One clod "ottovbvs" makes me wish for DKuehn, Lord Keynes or even the MMT kooks.

  10. All Keynesians of the day predicted a depression after WW2 due to the extreme drop in government spending and war-related jobs, plus the homecoming of the troops.

    What happened? People were set free, Hayek's division of labor and spontaneous order went to work and the dollar was semi-sound.

    Maybe we should try the same one more time? Bring home the troops, bring home the Bernank, set people free and let Hayek be our central planning guru.

  11. People are just amazingly dumb when it comes to understanding why America became such an economic powerhouse after WWII. If GM, Chrysler, Toyota, Nissan and Mercedes all had their factories bombed from the air, and Ford did not, would we wonder how Ford had gained such a relative advantage in the automotive market? So could it possibly have been that we were the only place in the world with a substantial amount of industrial capital left, and American companies made a killing helping everyone else rebuild, while at the same time picking up the slack for their reduced capacity? Still somehow, people like the explanation that unions were the heroes.

    1. and don't forget Bretton Woods made money printing easier or the "buy american" fine print in the different post-war reconstruction foreign aid programs

  12. "Yeah, it was a libertarian paradise all right — with a top marginal tax rate of 91 percent, a third of the work force in unions, and a minimum wage much higher relative to the average wage than it is today."

    So selective in his list. He left off some rather large items from his list such as the fact that the rest of the worlds industrial base of the modern world, except the US's was smashed to smithereens from the war; 15 years of pent up demand; 4years of a command economy preceding the boom period where one could not buy new luxuries but most of all WE WERE ON THE GOLD STANDARD PAUL!!!!!!!!!!!!!!!!

    How is it that he can leave this off? How is it that he can ignore in his idiotic correlation proves causation argument the biggest regulator of government made money, the gold standard? He is such a political hack! I just wish Paul had gone for the kill and made a complete fool out of Krugman.

    1. It is hard to point out which argument of Krugman's has been the worst during and after his beatdown from Ron Paul. Was it the correlation equals causation fallacy that children across the country make? Was it typing out a 14 year old teenage girl response to the debate with the baby talk? Was it claiming that barter was an efficient form of trade and could easily be done now? Was it his claim that the Fed did not create the Housing Bubble, unlike what he repeatedly wrote in his own NY Times blog?

  13. I remember Krugman saying he wanted an economy like the one his parents grew up with. Love Dr.Paul but he missed a good left hook by not noting Krugman's parents grew up when the dollar was still tied to gold.

  14. I don't think I have ever seen a politician or media member obsess and cry over a debate performance so much! This shows that krugman knows he was really destroyed by Paul and looked very foolish. Why else would he keep posting about it over and over while Paul just viewed it as a typical moronic keynesian statist and hasn't even thought about it again?

    All the Ron Paul people had to do was post the video on the campaign site without any other commentary -- anyone who watches it knows fully well what took place.

    Here is how Krugman reacted after his NY Times editor demolished him in his outgoing column:

    By obsessing over the issue, ignoring facts, and throwing a giant temper tantrum.


    "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."

    This article is another example of what Krugman's editor at the NY Times said. Complete with the hilarious attribution to David Frummer Boy of the original article. Just LOL. Krugman is having a mental breakdown before our eyes after typing out baby speak in a bitter loser's column and not claiming Frum as an econ source.

    Krugman certainly did not see this coming. I am sure he thought he would roll over the idiot Paul and the amount of PR would sell books left and right -- until he ran into Paul and got his whiny voice and stupid looks smacked straight down into a stuttering and pathetic mess. His constant backhanded and emotional attacks on his blog remind me of a bitter ex-wife! Seek help, Krugman. You are losing it!

  16. Krugman got royally pwned by Ron Paul on national TV and he's having a hissy fit about it. What a sore loser. I guess he felt out of place without the mob mentality of the New York times constantly telling him how brilliant he is, but felt out of his element out in the real world debating with real people with their own opinions who don't drink the NY Times Kool-aid.

  17. Here's the thing that gets me about those who cry "empirical method", economics does not deal with the physical world as does biology, chemistry or what not, so why the persistence in trying to apply this method to it?

  18. W. Edwards Deming - The Deming System of Profound Knowledge
    "The prevailing style of management must undergo transformation. A system cannot understand itself. The transformation requires a view from outside. The aim of this chapter is to provide an outside view—a lens—that I call a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in.
    "The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.
    "Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will:
    Set an example;
    Be a good listener, but will not compromise;
    Continually teach other people; and
    Help people to pull away from their current practices and beliefs and move into the new philosophy without a feeling of guilt about the past."
    Deming advocated that all managers need to have what he called a System of Profound Knowledge, consisting of four parts:
    Appreciation of a system: understanding the overall processes involving suppliers, producers, and customers (or recipients) of goods and services (explained below);
    Knowledge of variation: the range and causes of variation in quality, and use of statistical sampling in measurements;
    Theory of knowledge: the concepts explaining knowledge and the limits of what can be known.
    Knowledge of psychology: concepts of human nature.

    Seven Deadly Diseases
    The "Seven Deadly Diseases" include:
    Lack of constancy of purpose
    Emphasis on short-term profits
    Evaluation by performance, merit rating, or annual review of performance
    Mobility of management
    Running a company on visible figures alone
    Excessive medical costs
    Excessive costs of warranty, fueled by lawyers who work for contingency fees
    "A Lesser Category of Obstacles" includes
    Neglecting long-range planning
    Relying on technology to solve problems
    Seeking examples to follow rather than developing solutions
    Excuses, such as "our problems are different"
    Obsolescence in school that management skill can be taught in classes[27]
    Reliance on quality control departments rather than management, supervisors, managers of purchasing, and production workers
    Placing blame on workforces who are only responsible for 15% of mistakes where the system designed by management is responsible for 85% of the unintended consequences
    Relying on quality inspection rather than improving product quality

    Krugman's world-view fails on several levels,...

  19. Thanks to all the Austrians for dragging this little prick liar Krugman out into the sunlight!!!! May all the Krazy Keynesian Big Gov shills fall on their swords soon!

  20. Krugman's problem is that he is trying to defend the indefensible...

  21. There will always be the glory seekers like Krugman to carry the political water for their overlords who give them the publicity they so crave.

  22. This is turning into the worst embarrassment of Krugman's career. Now citing some intern out of a fury at how Ron Paul destroyed him in a debate? How many more times is he going to post about a ten minute tv debate that no one else has thought of much other than laughing at how bad Krugman did?

    Another couple debates with Paul, and definitely a debate with murphy, will put this guy in the loony bin after a complete mental breakdown.