Another Example Of Why Journalists Should Never Write About Economics


This is another part of a larger post I didn’t write.

Mark Weisbrot of the Guardian has a horribly stupid idea.  He thinks Barry Zero should pick Paul Krugman as our next Sec. of Treasury.

The rationale is very questionable, but it is also dishonest, or at the very least, demonstrates a vast expanse of ignorance.

Krugman would be tough to oppose on any substantive grounds. He has a Nobel Prize in economics (also the John Bates Clark award for best economist under 40). The New York Times columnist is probably the best-known living economist in the United States, and perhaps the world.

So, we should have Krugman as Sec of Treasury because he’s famous?  Because he won a Nobel prize?

Paul Samuelson, a Nobel winner, fellow Keynesian, father of this or that, said, “Contrary to what many skeptics had earlier believed, the Soviet economy is proof that … a socialist command economy can function and even thrive.”  Laughably, that was in 1989!   He was attempting to refute thinkers such as Hayek when he blathered that bit of idiocy.

Yeh, Mark, those are great reasons to pick Krugman.  Weisbot continues …….

Krugman has been right about the major problems facing our economy, where many other economists and much of the business press have been wrong. A few examples: he wrote about the housing bubble before it collapsed and caused the Great Recession; he has forecast and explained that large budget deficits and trillions of dollars of “quantitative easing” (money creation) would not cause inflation or long-term interest rates to rise; and that the “confidence fairies” would not reward governments that pursued austerity in the face of recession.

Really?  The housing bubble?  All one has to do is go back through the various blogs and see literally thousands of people screaming about the housing bubble before it collapsed.  That’s like giving someone credit for predicting that the sun will come up tomorrow.  As to the QE, as pointed out here and many other places, we haven’t seen the affects, yet, because the QE isn’t working.  Once an economy starts to move is when we’ll see the money hit the markets.  We know this will happen just as we knew the housing bubble was going to burst, just like we know the sun will come up tomorrow.

Most importantly, Krugman is on the side of the majority of Americans. He has written extensively in favor of policies that favor job creation, explained the folly of budget cutting in the face of a weak economy, and opposes cuts to social security and Medicare benefits.

Uhmm, while people like Geithner doesn’t have a clue about job creation, and neither does Krugman, the policies are ostensively, at least were aimed at job creation.  It isn’t like someone is advocating policies against job creation.  As to the budget cuts, all Keynesians advocate against budget cuts.  Krugman is by no means unique.  As to the cuts in the programs, this is the weakness of Krugman and the lunatics like him.  The live for today school of thought has been a dismal failure and is responsible for the economic mess many nations in Europe have today.

After all, why should the secretary of the treasury have to prioritize the interests of Wall Street and the “criminal enterprise” of big finance, as Charles Ferguson, academy award-winning film-maker and political scientist, describes it.

Well, there are reasons for this.  You see, Mark, you imbecile, in order to truly advocate job creation, you have to advocate employers.  It’s weird, but some of the world’s largest employers are businesses associated with what is commonly known as “Wall Street” and “big finance”.

But, specifically towards Krugman and his dishonesty…..

Krugman, in a November 2004 interview, criticized the “enormous” Bush deficit. “We have a world-class budget deficit,” he said, “not just as in absolute terms, of course — it’s the biggest budget deficit in the history of the world — but it’s a budget deficit that, as a share of GDP, is right up there.”

Back then, a disapproving Krugman called the deficit “comparable to the worst we’ve ever seen in this country. … The only time postwar that the United States has had anything like these deficits is the middle Reagan years, and that was with unemployment close to 10 percent.” Take away the Social Security surplus spent by the government, he said, and “we’re running at a deficit of more than 6 percent of GDP, and that is unprecedented.”

Those would seem like valid criticisms… except, why are you taking away SS surpluses from Bush when not doing it to others, especially when the surpluses of the past were greater?  It wasn’t Reagan’s middle years, it was his early years.  Was Krugman being dishonest or was he just being stupid?  Further, Krugman knows, or rather should know that the economic policies for sustained growth are not immediately felt.



But, Krugman wasn’t done bashing Bush.

He considered the Bush tax cuts irresponsible and a major contributor — along with two wars — to the deficit. But he also warned of the growing cost of autopilot entitlements: “We have the huge bulge in the population that starts to collect benefits. … If there isn’t a clear path towards fiscal sanity well before (the next decade), then I think the financial markets are going to say, ‘Well, gee, where is this going?'”

Three months earlier, Krugman said, “Here we are more than 2 1/2 years after the official end of the recession, and we’re still well below, of course, pre-Bush employment.” In October 2004, unemployment was 5.5 percent and continued to slowly decline. At the time, Krugman described the economy as “weak,” with “job creation … essentially nonexistent.”

Wait, what?  What did our friend Marky say about Krugman SS and Medicare?  Clearly deficits were a big thing for Krugman back in 2004, and the horrid 5.5% unemployment rate needed fixed.

So what does Krugman say now?

We must guard against “deficit hysteria.” In “Fiscal Scare Tactics,” his recent column, Krugman writes: “These days it’s hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we’re told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren’t stated as opinions, as views held by some analysts but disputed by others. Instead, they’re reported as if they were facts, plain and simple.”

He continues, “And fear-mongering on the deficit may end up doing as much harm as the fear-mongering on weapons of mass destruction.” Krugman believes Bush lied [to] us into the Iraq War. Just as people unreasonably feared Saddam Hussein, they now have an unwarranted fear of today’s deficit.

This article quotes something I’ve discussed in the past about Krugman…….

“The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.”

The point is, Krugman is a political hack.  His thoughts on economics turn with who’s ever in political power.  He’s dishonest, and he’s not very bright.  Is our friend, Mark Weisbrot, deceived  by this, or is he simply engaged in the same intellectual dishonesty and vacancy as Krugman?  Probably the latter, but, he’s a journalist, so it could be that he’s simply not bright enough to see the duplicity of Krugman.

Just so one wouldn’t think I’m simply reacting to the news of the day and just being against an Obama pick, here are some past critiques of Krugman I’ve written….

Paul Krugman Is Very Effective At Destroying His Strawman Arguments!

Delusional Krugman Demonstrates The Left Leaning Of Nobel Committee

Krugman Once Again Displays His Brilliance! Greek Trouble is Germany’s Fault.

HuffPo Says AEI And Krugman Agree American Austerity Measures Are Hurting Our Economy

Paul Krugman Moves From Delusional To Open Dishonesty

Crazy Krugman Putting Politics Over Economics And Lies Over Truth

Krugman —- Momentarily Achieving Lucidity!!!!

Is Krugman Stupid Or Just Evil? — Income Inequality

I’ve other critiques, but, those are just the ones that pop out.  The point is, again, that Krugman is intellectually vacant, as seen when he blames Germany for Greece’ economic problems, and he’s dishonest as seen when decries the “austerity” measures we’ve taken in the US.  …. as if.   He’d fit perfectly with Obama and the rest of his cabinet.

h/t to Dirk and Gator!

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One Response to Another Example Of Why Journalists Should Never Write About Economics

  1. philjourdan says:

    You are honest in your contempt of Krugman – and for good reason. His Nobel is suspect as he has not produced anything of value to merit it. It is an obama award.

    As for most recognized, with the paparazzi electorate we have, it is not surprising. He has made himself a celebrity. one who feasts on the bones of the misery of others. Enron anyone? The architect of destruction had his hand in that mess as well. If you want to know what is going to happen, merely listen to Krugman, and pick the opposite. You will be right more times than not.

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