Tuesday, July 30, 2013

LOL Krugman Does a Play on Austrian Thinkers: Mises, Hayek and Freud

Paul Krugman is all heated over the fact that there are opponents to the naming of Janet Yellen as the next Fed chair. I pointed out yesterday there are no good names being bandied about for Fed chair, but that Yellen is the worst of the lot.

But Krug wants to make it all about Yellen opponents being anti-female and concludes:
I’ve been saying for a long time that we aren’t having a rational argument over economic policy, that the inflationista position is driven by politics and psychology rather than anything the other side would recognize as analysis. But this really proves it beyond a shadow of a doubt; if you really want to understand what’s going on here, the Austrian you need to read isn’t Friedrich Hayek or Ludwig von Mises, it’s Sigmund Freud.
 Cute linking of the Austrians, but I did it first, years ago. In October 2010, when I wrote about Krugman:
 Finally, someone explains the problem with Paul Krugman's methodology:
"What’s going on here? I believe that what we’re looking at is people who know their math, but don’t know what it means: they can grind through the equations of their models, but don’t have any feel for what the equations really imply. Confronted with informal discussion that’s grounded in models but not explicitly stated in terms of math, they’re totally baffled. And so they lash out.

Sad, really."
Who wrote this? Why none other than Paul Krugman, today, in an attack on Austrian economists. Is this a case of the psychological defense mechanism known as projection bias? Of course, it is.

The bias was first recognized (I hate to break it to Krugman, but by an Austrian) Sigmund Freud and further developed by his daughter Anna Freud. It essentially says projection bias is a psychological defense mechanism where a person unconsciously denies their own attributes, thoughts, and emotions, which are then ascribed to the outside world, including other people.

So how can I be so confident this is Krugman projecting? Krugman attacks those who use models but don't get it in terms of verbal discussion. Well, Austrians theorize using verbal discussion. They don't use equations, Krugman does!

In fact, part of the criticism made by Austrians, including Hayek and Mises, against econometricians is that confronted "with  informal discussion that’s  grounded in [theoretical] models but not explicitly stated in terms of math, they’re totally baffled."

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