Charting Fun with Krugman

By Robert P. Murphy

In a few recent blog posts, Paul Krugman used bar graphs and tables to (allegedly) prove the superiority of his views over those of the Austrians. Yet, as I'll show in this article, I can use Krugman's own data to demonstrate the exact opposite.

Krugman on the Fed and Banking Panics

Perhaps spurred by his Bloomberg debate with Ron Paul, Krugman posted the following regarding financial panics and the US central bank:

There's a very widespread belief on the right that banking crises only happen because either the Fed or Barney Frank cause them; go back to a gold standard, and there would be no need for financial regulation or anything like that.

This is, of course, nonsense; Walter Bagehot knew all about financial crises, which have been a constant feature of modern economies since at least the early 19th century. Just to drive the point home, I thought it might be worth posting Gary Gorton's chart of "panics" before the Fed went into operation:

Panics will happen; the question is how they are contained. (emphasis added)

Now although Krugman doesn't explicitly say "Ron Paul" or "Austrian economists," I think he has to have them in mind here. After all, before the Austrians rose in popularity, hardly anybody talked about the gold standard, let alone abolishing the central bank. It was the Austrians, and most notably Ron Paul, who put those ideas back into the limelight so that Paul Krugman feels the need to address the issue.

In that light, Krugman is simply making stuff up when he says such people think banking panics never happened before the Fed. Murray Rothbard's doctoral dissertation was The Panic of 1819, and Rothbard also wrote on the history of the Fed, so I'm pretty sure he wouldn't be shocked by Krugman's table.

But besides the cheap debating ploy — setting up his opponents as believing something obviously ridiculous — Krugman leaves open the door to his own demise in his final sentence, after the chart, when he writes, "Panics will happen; the question is how they are contained."

Fortunately, Krugman himself provides the answer in a… (Read more)

Source: Mises.org

PAUL vs. PAUL

In their first joint appearance ever Rep. Ron Paul and economist Paul Krugman debate monetary policy, the Federal Reserve, and the role of government!

You do not want to miss this debate.

Please share this video on Facebook, Twitter, Tumblr, Reddit, and around the internet. Everyone who cares about the future of our economy should watch this debate!

Source: Young Americans for Liberty via Bloomberg TV

Ron Paul vs. Paul Krugman

Who would win? Duh!

This review of the new book “Ron Paul vs. Paul Krugman” by Jim Miles featured in Foreign Policy Journal, makes the case that Paul wins the economic argument against Krugman with a KO:

The reader does not have to be highly knowledgeable about the world of economic theory to understand Ron Paul vs. Paul Krugman. Clearly written, and with an obvious and well supported perspective, the short work highlights some of the aspects of all the political discussions about free markets, government intervention, and how certain authorities—essentially Krugman in this study—are quite willing to change their words to suit their own purposes. Krugman’s main purpose appears to be to avoid accepting any blame for the financial mess that the U.S. and thus the world is currently immersed in.

I am not a fan of economics, as the people I normally associate with economics do not appear to be the brightest intellects in the land, and often seemingly lack common sense. This discussion, by leaving out much of the economic jargon, presents a clear case that Ron Paul has it right and has been consistent, and still is consistent, with his views and advocacy for true free market action…

For Ron Paul, his arguments were consistent and have been proven correct. Interest rates, subject to the market and its hopefully balanced demands for spending and saving, for building wealth and saving for the purchases of real goods that build the wealth, should not be held artificially low. Instead they should be allowed to rise and fall as the demands of saving and spending rise and fall.

Hammond quotes both figures extensively, comparing their words from one time to another time. In Paul Krugman’s case, it is a long series of changing his story, in one part to avoid responsibility for his part in the financial downturn, and for the other part—it is hard to ascertain—in order to sound like he still knows what is best, or what he is doing is correct. The differences between what he said at one time and says at a later date are numerous and obviously contradictory, and Hammond has no trouble juxtaposing Krugman’s waffling rhetoric.

Ron Paul on the other hand is consistent with his message: we do not have free markets and we need to get to them…

Source: Paulitical Ticker with Jack Hunter