A Note on Krugman

The following comes from Creighton Harrington on the YAL Blog. I was just about to post something along these lines, but he says it pretty well:

The Problem with the "Expert"

...by "expert" I mean Paul Krugman. Here is a guy who is, essentially, the economic authority in America. He teaches at Princeton, won the Nobel Prize in Economics (which is almost as insane as Obama winning the Nobel Prize for anything), and, worst of all, preaches his Keynesian blather all over the New York Times for every impressionable would-be scholar to read.

Now, what has Krugman said that perterbs me so? Well, honestly, its just that he was mentioned in an article and it got me thinking about it again, but soon enough I was back to fond memories of Krugman preaching how wonderful our economy is, how we need to offset the dot-com bubble with a housing bubble, how interest rates need to go lower and lower and government spending needs to go higher and higher. And while every “expert” on Wall Street, at the Fed, and on the Hill is crying the same thing (except Ron Paul of course) while simultaneously mocking legit economists like everyone at the Mises Institute, Peter Schiff, and, to some extent, Jim Rogers for their archaic outlook on economics.

Oh how the tides did turn, but, yet, instead of the status quo moving to sanity, in comes Krugman preaching the same exact stuff!! Lower interest rates, spend, print more money, bailout, OR WE'RE ALL GONNA DIE!!!!!

One of his greatest feats, however, is to basically get people to believe in a false history. He always preaches about the laissez faire style of Hoover and the damage it did to the economy during the Great Depression, but everytime he is called out on how absolutely wrong that thought is, he, almost like a reflex, just adds, “he did too little too late.” That's why its so hard to convince people that Keynesians are wrong...they have academic credibility already, for one, and they also just fall back on the “if spending doesn't work then spend more and more and more ad infinitum.”

This guy is nothing more than a well respected con-artist who doesn't realize he is a con-artist, by which I mean he can promote extreme falsehoods everyday and when they fail, as they always do, it was not his advice that was insufficient, but some mistake by the other party. He has been wrong on nearly everything, a great example of which is Japan. If there is one historical example, outside of the Great Depression, that proves how Keynesian economics just fails miserably, it is Japan. This country tried every Keynsian trick there is to fix themselves, but to no avail. Even Krugman himself said they were doing the right thing when they tried to stimulate the economy via public works projects.

Over the past decade Japan has used enormous public works projects as a way to create jobs and pump money into the economy. The statistics are awesome. In 1996 Japan’s public works spending, as a share of G.D.P., was more than four times that of the United States. Japan poured as much concrete as we did, though it has a little less than half our population and 4 percent of our land area. One Japanese worker in 10 was employed in the construction industry, far more than in other advanced countries.

What baffles Krugman is how this failed miserably. Even as Japan nipped at the heels of “full employment,” interest rates were near zero, spending was running wild, and all the other Keynesian cures to the business cycle were being employed Japan still went nowhere.

And here we are. Another recession and more of the same old same old from Krugman. I don't think Krugman could ask for a more identical policy maker than Geithner and when healthcare finally blows over, they will have to answer for the failure they have had with the US economy. Hopefully when either the currency crisis occurs or the economy tanks again after whatever catalyst causes it it will be the final straw for Keynes, but I doubt it.

When Krugman finally opens his eyes and realizes how wrong Keynesian economics is and, instead, promotes sound fiscal policy where the Fed is gone, our money is backed with value not trust, fractional reserve banking is prohibited, and the government stays passive in spending, then we will never grow as a nation. Our economy will be plagued with cyclical depression after boom after depression until the world ends. People like Krugman are some of the most dangerous people to liberty because they are percieved as experts by everyone, yet they preach a doctrine that opposes liberty. I can only hope that this resurgence of interest in Austrian Economics stays strong and becomes the norm like it would have done had John Maynard Keynes not opened his mouth