Sunday, July 26, 2015

Paul Krugman Attacks Ron Paul (And What Krugman Got Right)

By Robert Wenzel

Sweaty and out of breath, Paul Krugman has written an attack piece on Ron Paul and gold. He smugly titled his piece, The Old Man and the CPI.

The post has the feel of Krugman writing while still in his gym shorts:
I don’t watch financial news, but CNBC was on in the gym, so I was treated to a long ad from Ron Paul, who wants you to buy his video explaining the coming crisis brought on by loose money. And I found myself thinking about the remarkable fact that there really are people who will buy that video.

After all, Ron Paul has been making the same prediction year after year — in fact, he’s been making this prediction at least since 1981! — and has been wrong year after year. It’s hard to think of a doctrine that has been as thoroughly refuted by events as goldbug economics.




Well, Krugman is right about one thing, gold has been a favorite investment of Dr. Paul's for a long time. Though, I suspect Dr. Paul was buying gold long before 1981. My guess is he tucked away quite a bit when it was $35.00 per ounce. But let's take the year 1981 that Krugman references. Gold traded as low as $390, 00 an ounce and pretty much stayed in a trading range around $400.00 for aprox. 15 years. So if Krugman is correct, and Dr. Paul has been making the "same prediction year after year,"  since 1981, let's see how things have turned out for Dr. Paul in the investment arena.

Did Dr. Paul's long term perspective pay off for him, by buying gold year after year without getting discouraged? I'll let you look at the chart yourself and determine if that was a good investment or not.

The problem with Krugman, or one of the problems, is that he holds a Keynesian, "We are all dead in the long run" perspective. If something doesn't move after a few minutes in a predicted direction, well then it is a bad prediction.

The truth of the matter is that when it comes to the social sciences like economics, we can't make exact detailed forecasts. We can only understand general trends. You need to be very disciplined and consistent to invest with such a long term view. That's what Dr. Paul does. He accumulates gold with the knowledge that it is the nature of central banks to eventually break into a massive price inflation creation mode. Krugman has no such long term discipline or perspective.

Which brings me back to Krugman at the gym. Yes, this guy is now going to the gym:



The picture was taken a few years back and he has slimmed down since then. In a blog post, he claims there was no medical reason for his slimming down that he just wanted to get healthy, but if you ask me it looks like the guy is on serious medications. Probably, at a minimum, a high blood pressure drug, perhaps a statin, maybe even some pre-diabetes medication. And can we seriously not include Viagra?

You just know he is slimming down on doctors orders. The doctor sat him down and told him his blood results were terrible and if he didn't want to die from a heart attack...soon, he needed to change his life style fast. So he has. He's through stuffing Twinkies into his stomach and modern medicine will allow him to cheat death for a little while longer

Contrast this with Dr. Paul. He has probably been eating correctly his entire life, certainly since medical school. And it shows. This picture was taken within the last 5 years, which means that Dr. Paul was at least 15 years older at the time than Krugman is now.



Dr. Paul turns 80 in August and I am willing to bet he could still beat Krugman in a bike race. even though Krugman is only 60.

Bottom line: Dr. Paul does things right. He tunes out the noise, looks at the long term and lives his life accordingly. whether it is investing or health choices. We should all be as wise, disciplined and consistent.

Take Krugman's latest attack for what it is, an attack from a person that in no way can match up to Dr. Paul, whether it comes to investing, health, biking or common decency. "The old man and the CPI" Pft! Krugman wouldn't dare bike race "the old man."

17 comments:

  1. I think Dr. Paul could even take Krugman in a fist-fight, though Krugman would have to throw the first punch because NAP.

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    1. I suspect Krugman would have to hit him more than once, and threaten his life before Dr Paul beat the shit out of him.

      Gentlemen, and especially gentle men, are loathe to resort to violence...but God help a man that raises the ire of a gentle man...

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    2. I've never seen Dr Paul as indignant and (nearly) angry as he is in his video addressing this column.

      Krugman knows Paul is winning, and it terrifies him that "uneducated and unsophisticated monetary cranks" might wrest control from the Keynesian establishment, and expose them as frauds.

      They have a real reason to fear. Some of the people who lost large portions of their life savings due to idiots like Krugman, Bernanke, Lew, Dimon, etc. might "wake up" and use their remaining wealth to persecute these "Masters of the Universe" for their fraudulent complicity.

      A man with a couple hundred million dollars that loses 80% of his fortune because he listened to these crackpot government lackeys still has more than enough money to tie them up in courts, expose their financial chicanery, and make their lives miserable.

      And I'm only speaking of the law abiding set. God help him if "legitimate mafia" bosses, hurt by losses, make it personal, a la the French Revolution.

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  2. Hello Robert,

    I saw your post on EPJ about P Krugman dissing R Paul.

    I have a pic of Ron Paul that I think you will find quite a bit nicer than the one you posted.


    Ron Paul at 77 and looking fit as a fiddle in New Hampshire September 2012.

    I love this pic!

    Dawn aka Sunny

    https://www.facebook.com/photo.php?fbid=10152857065415899&set=pb.682095898.-2207520000.1438000136.&type=3&theater

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  3. Hello Robert,

    I saw your post on EPJ about P Krugman dissing R Paul.

    I have a pic of Ron Paul that I think you will find quite a bit nicer than the one you posted.


    Ron Paul at 77 and looking fit as a fiddle in New Hampshire September 2012.

    I love this pic!

    Dawn aka Sunny

    https://www.facebook.com/photo.php?fbid=10152857065415899&set=pb.682095898.-2207520000.1438000997.&type=3&theater

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  5. Great post. Krugman also has the really annoying tendency when debating or being interviewed to jump in and interrupt when someone else is speaking, unlike Dr. Paul, who is always a gentleman and allows the other person to finish speaking and get their point across, even if he disagrees with them.

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  6. "making the same prediction year after year — in fact, he’s been making this prediction at least since 1981! — and has been wrong year after year. It’s hard to think of a doctrine that has been as thoroughly refuted by events as goldbug economics."

    "we can't make exact detailed forecasts. We can only understand general trends."

    "We are all dead in the long run" perspective

    Are you sure this isn't about the debunked man made global warming hypothesis?

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  7. I find it endlessly fascinating that no Keynesian PhDs, much less the commenters on Krugman’s blog, have the slightest familiarity with anything Austrian. I was also amazed that Krugman published two of three comments I submitted. The second comment borrows from the Jeffrey Hammond book on Ron Paul v. Krugman, a book I highly recommend.

    Bob Roddis Grosse Pointe Farms, Michigan

    As a follower of the Austrian School since 1973, let me assure everyone that Krugman does not know the first thing about it nor apparently does any other Keynesian. If Krugman could actually find a flaw in it, he would explain the concepts and analysis fairly and then refute them. He knows he cannot do that so he mocks a total misrepresentation of it. It is very encouraging to know that our opponents are so afraid of Austrian analysis that they are afraid to even run it through their minds.

    https://mises.org/library/hayek-meet-press
    July 25, 2015 at 10:41 p.m.

    Bob Roddis Grosse Pointe Farms, Michigan

    How could Krugman call the consequence of the housing bubble “unpredictable” when increased investment in housing was precisely the outcome he had hoped would occur as a consequence of low interest rates? And when the market responded as Krugman had hoped it would, how can this then be attributed to “irrational” human behavior? And if the housing bubble was a consequence of the interference of a government agency, the Fed’s interference in the free market by artificially keeping interest rates low, how then could “capitalism” and “the imperfections of markets” be identified as the chief culprit? The culprit was obviously the very government interference in the market that Krugman constantly advocates: More funny loans diluting the fiat money supply which creates false, distorted and unsustainable prices and capital structure. Austrian theory is quite clear that this new money need not to go into the CPI and more often manifests itself in asset and stock bubbles due to artificially inflated and unsustainable prices.

    July 25, 2015 at 11:03 p.m.

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  8. This was the comment that was not publish by Krugman:

    In 2002 Krugman said that:

    "Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

    http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

    In 2005, Krugman admitted that the Fed *had* created a housing bubble and that it wasn't surprising because...

    "After all, the Fed's ability to manage the economy mainly comes from its ability to create booms and busts in the housing market."

    http://www.nytimes.com/2005/05/27/opinion/27krugman.html

    But by 2010 Krugman completely changed his story and tried to absolve the Fed by saying...

    "These considerations suggest that it would be wrong to attribute the real estate bubble wholly, or even in large part, to misguided monetary policy."

    http://www.nybooks.com/articles/archives/2010/sep/30/slump-goes-why/?pagination=false

    And then by 2012 Krugman started flat-out lying about what he said in the past by claiming he "never bought the story" that the Fed was the cause of the Housing Bubble. I guess it was the other Paul Krugman at the NYT who wrote that column in 2005.

    http://www.youtube.com/watch?v=KrfRS07CAHc ( video: 32:40 mark )

    And most recently Krugman has said that the housing bubble was "just one of those things that happens" every once in a while.

    http://www.youtube.com/watch?v=PD-EWxl_s4o&feature=plcp

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    1. Great stuff, Bob. I'm saving it and posting it again in the future on Krugman's blog (with citation to you, of course)!

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  9. I'm not convinced that attacking Krugman's poor habits does anything to bolster a particular position.

    Yes, we should all look and act in a manner that would help us "long term", but, truth be told, most people don't do that. I'm even willing to bet that Ron Paul has done a thing or two in his life that weren't always "long term" looking.

    Attacking a person's eating or exercise habits doesn't, in my opinion, change the fact that Krugman's political and economic theories are wrong in the long-term. Let Krugman eat his Twinkies and let Dr. Paul choose not to. I say debate the theories, but leave personal attacks out of it.

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