Friday, May 11, 2012

Krugman and the Dancing Fairy versus Animal Spirits

He included this pic of a dancing confidence fairy in a slideshow to prove we are in a depression (or something)

Click for larger pic.

Then he posted this on his blog:

Update: I guess people didn’t get it — that’s a Herbert Hoover mug behind the confidence fairy...

He is, of course, mocking  Hoover (poorly) for being a do nothing president at the start of the Great Depression. Hoover as a do nothing president is simply untrue and just another Krugman fairy tale.

On a second point, though, what is the difference between waiting for a confidence fairy to arrive on the scene and the absurd Keynesian view that 'animal spirits' must be awakened?

Here's Firewoman to help us understand the Keynesian notion of 'animal spirits':

Now that's how you do visualization, Paulie.


  1. Actually, the picture is a perfect symbol for the state of modern macroeconomics, who come up with ‘animal spirits’ or ‘irrational exuberance’ to explain these ‘instances’ of market 'irrationality.' Seriously? That is the story you are going with? Why not the devil or wood nymphs; they sufficed for ages.

    Besides considering all cultural and psychological effects on society with the superstitions of a 7th century monk, they also refute grade 8 finance, mathematics and CAPM.

    BTW, please comment on my new joke:

    Q: How do you drive a macro-economist crazy?

    A: Tell him that systems engineering protocols demand multiple Federal Reserves to provide redundant fail-safe survivability.

    Then tell him that multiple Reserves would preclude a monopolized and devalued fiat currency and watch his head explode.

  2. what sort of person has the most appaling bad sense to buy such a shameless piece of tat?

  3. Thanks! I finally understand the concept of 'animal spirits'!

  4. Thanks for the 'animal spirits' vid. I always wondered what it must sound like at a Fed Board meeting...

  5. Actually, that was Bernanke and the Fed Board of Governors doing a rain dance around a keyboard while repeatedly pressing the 'Print' button...

  6. Krugman is such a weirdo.