The Straw Krugman

Dr. Cowbell (to steal just one of his nicknames) is both flattered and amused by how he has become the favorite boogeyman of the right:

Funny: Angry Bear finds some of the usual suspects explaining How to Debate Paul Krugman, and the answer appears to be this: invent a straw man who bears no resemblance at all to the economist/columnist of the same name, and ridicule that imaginary person.

I have to say, never in my wildest dreams did I imagine that I could play the role of History’s Greatest Monster to so many people. Thank you for the honor!

Aside from the silliness of the exercise, this little exchange is another illustration of a point I’ve noticed before: the way hard-right commentators assume that the other side must be their mirror image. They insist that no government intervention is ever justified; so liberals must support any and all government interventions. They want smaller government, as a principle; liberals must want bigger government, never mind what for. They believe that deficits and printing money are always evil; liberals must be for deficits and money-printing under all circumstances.

I’m sympathetic to this argument because I’ve seen it in action. It seems that expressing an opinion that the legitimate of role of government is slightly more than what Friedrich Hayek (or Ron Paul) would allow makes one an advocate of Politburo-style central planning.

The column Krugman links too has a deeper link to this item where Krugman’s Articles of Faith are enumerated. I’ve conveniently bolded the portions which do seem like legitimate strawman statements.

1) Recessions, depressions and crises are the result of the unhampered market. We actually do not have to investigate if markets were really free when recessions occurred or what really were the specific causes of whatever threw the economy off track. When there is a recession, depression or crisis, there must have been too much of an uncontrolled market.

2) The Great Depression was caused by uncontrolled markets.

3) Recessions, depressions and crises are practically the result of one problem: a lack of aggregate demand. People, for whatever reason (and who cares about the reason; let’s not get hung up on those details) don’t spend enough. If everybody were to spend more, people would sell more. Problem solved. It is the role of government to get people spending again. This is done by printing money and causing inflation so that people spend the money rather than save it. Or by the government running up deficits and spending it on behalf of the stupid savers.

4) The Great Depression was solved by the government spending lots of money and the central bank printing lots of money.

5) This explains ALL economic problems.

6) If there are recessions, depressions and crises, they can all be solved by printing money and by deficit spending.

7) If after many rounds of money printing and deficit spending, there is still a recession, then only one conclusion is permissible: There was obviously not enough money printing and deficit spending. We need more of it.

8) If after another round of money printing and deficit spending we still have a recession, then….well, do you not get it? We obviously have NOT PRINTED ENOUGH MONEY and we are NOT ACCUMULATING ENOUGH DEBT! And, by the way, remember 7) above.

Krugman is practicing Keynesianism as a religion. The 8 commandments above are not to be questioned. Whoever questions them is not worthy of debate.

Now, this attack is not completely unfair since Krugman is easily the most visible and vocal advocate of classical Keynesian stimulus. But also in the article is a video of noted libertarian Hans-Hermann Hoppe, a stereotypical Austrian Economist in both accent and philosophy, who says this is the way to engage Krugman:

Ask some questions almost like a child. Explain to me how increases in paper pieces can possibly make a society richer. If that were the case, explain to me why is there still poverty in the world? Isn’t every central bank in the world capable of printing as much paper as they want?

Now here is a debating style I have come to be familiar with recently. Just pepper someone with a litany of seemingly simple questions which belie the fundamental assumptions and premises beneath them.

If we were to pick a Most Ridiculed Pundit on ATiM, Krugman would probably be in the top three. And I am no fan of his tendency to insult the basic education of his opponents, particularly ones with credentials approaching his own. But to engage in my own logical fallacy of Arguing From Authority, they don’t give out Nobel Prizes for collecting box tops. Krugman is both fun to read and fun to ridicule but he rarely makes the arguments people claim he has made. Or when he has, he is far more likely to be right than the people just tearing him down on an ad hominem basis.

32 Responses

  1. Speaking of strawmen:

    “I’m sympathetic to this argument because I’ve seen it in action. It seems that expressing an opinion that the legitimate of role of government is slightly more than what Friedrich Hayek (or Ron Paul) would allow makes one an advocate of Politburo-style central planning.”

    Oh the humanity.

    BTW, did Teh Krugman ever get to End this Depression Now!?

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  2. They insist that no government intervention is ever justified; so liberals must support any and all government interventions.

    Dr Cowbell is doing the same thing he accuses his opponents of doing. Who is arguing for zero government involvement in the market? I think most conservatives accept the need for a Federal Reserve bank, believe that the 30 year fixed rate mortgage is a good thing to have, and aren’t willing to repeal antitrust laws. You can argue against quantitative easing, farm subsidies, and the government playing venture capitalist in green energy without being an economic anarchist.

    The issue I have with Krugman is that his prescription has been followed in Japan and the economy has been flat. For two freaking decades. The “world’s creditor” of the 1980s now has a debt to GDP ratio of 2.2x. So when Krugman glibly dismisses Japan as having not done enough, or done the wrong things, or quit too early, I think he has set up a non-falsifiable argument – that Keysnianism always works if you do enough of it. Which in a way is a ridiculous argument – what defines whether a policy “works” or not? Just the simple fact that the Depression ended doesn’t mean a thing. Depressions and booms are not permanent places in the economic cycle.

    You can look at the experience of the Great Depression and ask why did it end? Was it Keynsianism (writ large through WWII) or was it the passage of time? The Depression started in 1929 and more or less ended in 1941. That is a long time. Booms don’t last forever, and neither do busts. The excesses that were built up during the boom eventually get worked off. The Keynsian argument has a built-in assumption that depressions are a sort of equilibrium, where they stay permanently unless something external forces them out of it. I don’t buy that argument. If the economy worked that way, why haven’t we figured out a way to create permanent prosperity? Actually, the economists of the 1960s studied the whole “fine tune” the economy idea and ended up dismissing it. The economy is cyclical. It just is. Excesses build and then get worked off. To me, the relevant question is: Did the New Deal accelerate the recovery or hamper it? Have Japan’s economic policies accelerated the recovery or hampered it? To me, after 22 years, the question of whether Japan’s Keynsian policies have hampered the recovery should be on the table. Not dismissed with a “Japan has an aging population and didn’t implement Keynsian policies correctly, you troglodyte.”

    That said, you can make an argument that pursuing Keynsian policies are a humane thing to do, and having a longer period of adjustment is preferable to a “let the markets clear and let the chips fall where they may” approach that will cause a deeper recession and a faster recovery (using the Asian Tigers as evidence). That is the argument we should be having, but IMO Krugman doesn’t want to have that argument because when presented that way, people may in fact choose the latter course of action and it is much easier to win an argument when you get to accuse them of being Ailes-led goobers or heartless plutocrats bent on starving Granny.

    Look, I accept the C+I+G+X-M argument. I really do. It is a mathematical fact that if you increase G, output increases. If that is the only criteria that matters, then yes, Keynsianism works. The problem I have is that a lot of it is “junk GDP.” Why? Because when we start doling out money for infrastructure projects, how is the allocation process done? Not by a market, which allocates capital based on its best use, but by politicians who care about getting re-elected. And that does decrease the multiplier effect to where the government ends up paying 300 grand for each job created or saved.

    To me, Krugman et al are making an economic argument that is really a values argument in drag.

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    • I generally agree with Brent, which is no surprise, as I have been pointing out the problem with all deficits all the time continuously. But I do think Keynes would have seen – and indeed did see – that as a problem. Krugman does not. There are other neo-Keynesians who do.

      It is a practical consideration and a consequential one that competing CDs and their competing congressmen do not allocate scarce resources as efficiently as a competitive market with perfect information.

      I believe that the now standard countercyclicals do tend to dampen and shorten both boom and bust.

      I believe that monetary policy can be used to strangle boom or bubble it, and I believe it can also strangle recovery, but I do not think it can cause recovery.

      I believe that government let public contracts for road building and the like are inevitable at all times because infrastructure does not last forever, so timing the maintenance to coincide with low employment keeps the government from competing with the private employment market and does not drive wages up, as it would if bunched during a high employment market.

      Congressional inefficiency in planning should not be as much of a problem as it is for picking new projects, when we are talking about maintenance of old ones, the need for which should be projected based on engineering reports about the aging and safety of the facility.

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  3. FWIW, yello, I think that the underlying argument that you’re making is spot on.

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  4. yello:

    It seems that expressing an opinion that the legitimate of role of government is slightly more than what Friedrich Hayek (or Ron Paul) would allow makes one an advocate of Politburo-style central planning.

    I think you would be pretty hard-pressed to come up with an example of anything even close to that here at ATiM. On the other hand, you pretty routinely reduce the opinions of those of us here who think taxes are too high or should be flat into the caricature of taxes=theft.

    But to engage in my own logical fallacy of Arguing From Authority, they don’t give out Nobel Prizes for collecting box tops.

    Well, nowadays one really must wonder about that, actually.

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  5. Dr Cowbell is doing the same thing he accuses his opponents of doing.

    I was hoping somebody would notice that. The only way to fight strawmen is with strawmen.

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  6. I think you would be pretty hard-pressed to come up with an example of anything even close to that here at ATiM.

    Not really all that hard:

    So should the government be responsible for arranging all productive activity in society?

    On the other hand, you pretty routinely reduce the opinions of those of us here who think taxes are too high or should be flat into the caricature of taxes=theft.

    You know you think it. And you say so in so many words quite often. I’m just asking for a little honesty.

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    • yello:

      Not really all that hard

      In the first place what you cite was a question, not an assertion of what you actually believe. In the second place, it was a rhetorical question which the subsequent sentence answered in the negative, showing that I don’t think you believe it. The un-dowdified citation is as follows (emphasis added):

      I think you are right, but the trouble with this is that virtually all productive activity affects the so-called public good (a conceptual problem in itself, but I will leave that for now.) So should the government be responsible for arranging all productive activity in society? Surely not, so still it must be narrowed down. And I doubt it sensibly can be.

      Obviously this is not an example of what you have presented it to be.

      You know you think it.

      No, I don’t. Thinking that a particular instance of taxation is unjust does not imply that all taxation is unjust.

      And you say so in so many words quite often.

      Feel free to link to an example.

      I’m just asking for a little honesty.

      An interesting request, given what you just did with my words.

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  7. yello: 🙂

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    • Mich:

      I’m curious…which comment are you smiling about?

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      • Just saw this.

        …the semi-sovereign states.

        So that debate is settled then?

        Of course. Semi-sovereign means “not sovereign”. Which would you rather be? Almost drowned or nearly saved?

        As for suggesting education should be left in private hands, I will stick with Franklin and Lincoln and the 50 states that made it mandatory for minors to be in school.

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        • Mark:

          Semi-sovereign means “not sovereign”.

          If that were true, and it obviously isn’t, there would be no reason to even use the term semi-sovereign.

          Which would you rather be? Almost drowned or nearly saved?

          The question is not apt. “Semi” means somewhat, partially, or half. It does not mean almost or nearly.

          As for suggesting education should be left in private hands, I will stick with Franklin and Lincoln and the 50 states that made it mandatory for minors to be in school.

          That’s fine, but your previous comment suggested that a choice about who would be required to provide education had to be made, presumably by the state. My point was simply that that isn’t true. You may want the state to make the decision, but it isn’t, by it’s nature, a decision the state has to make.

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        • You may want the state to make the decision, but it isn’t, by it’s nature, a decision the state has to make.

          Under the 10th Amendment, that would be a power reserved for the states whether they choose to exercise it or not.

          In the words of Rush, “If you choose not to decide, you have still made a choice.”

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        • yello:

          Under the 10th Amendment, that would be a power reserved for the states whether they choose to exercise it or not.

          Agreed.

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        • If that were true, and it obviously isn’t, there would be no reason to even use the term semi-sovereign.

          S > semi-S. semi-S < S. semi-sovereign does not equal sovereign. "Equal" is identical in usage to "means".

          Semi-sovereign means “not sovereign”.

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        • mark:

          S > semi-S. semi-S < S. semi-sovereign does not equal sovereign. "Equal" is identical in usage to "means".

          You are conflating this:

          semi-S > < sovereign

          with this:

          semi-S = not sovereign

          The two do not mean the same thing. To think so is to think that 3 = 4. Consider:

          3 > < 5, therefore 3 = not 5

          4 > < 5, therefore 4 = not 5

          not 5 = not 5, therefore 3 = 4.

          Semi-sovereign means “not sovereign”.

          While I can’t attest to how you use it, in standard English it does not mean that. In standard English it means partially sovereign, or sovereign in some respects but not in all respects. The whole point of the prefix “semi” attached to any descriptor X is to differentiate the thing being described from both X and not-X. By using the word “semi-sovereign” to mean “not sovereign” (if indeed you really did) you’ve defeated the very purpose of the pre-fix in the first place.

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        • “Not 5” describes a universe, not a defined quantity. “Not sovereign” also describes a universe. half of a quantity does not equal a quantity. Neither does any fraction of the quantity you choose.

          Certainly semi-sovereign means in the political realm that the entity has some, but not all, the trappings of sovereignty. On that we agree. It has so few that it cannot be mistaken for a sovereign. It has enough that it cannot be mistaken for an individual.

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        • mark:

          “Not 5″ describes a universe, not a defined quantity. “Not sovereign” also describes a universe. half of a quantity does not equal a quantity. Neither does any fraction of the quantity you choose.

          I would argue that “sovereign” does not describe a defined quantity either. Is Greece, which cannot issue its own currency, sovereign? Is it sovereign of the same defined “quantity” as the UK which can issue its own currency? Is either a sovereign of the same “quantity” as, say, Norway, which is not subject to EU dictates as the other two are?

          To bring this back to our discussion from many months ago, I thought that you were arguing then that states had no sovereignty at all, and therefore could not secede without permission of congress. But if sovereignty is a matter of degrees, and a state can be said to be “semi-sovereign”, then it is possible that one of the things that makes them “semi” sovereign is the power to determine for itself whether or not to continue as part of the union.

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  8. Scott, don’t forget, to yello, we’re two dimensional Mr. Burn’s.

    But without his softer side.

    But we’re obviously epistemically closed.

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    • If we are going to talk about ridiculous over-simplifications, from that Ace of Spades article:

      But a capitalist has no actual boss — there’s no one in the Office of Conferring Badges of Merit upon him. The capitalist’s success isn’t conferred; it’s taken.

      That’s pure Galtian blather. But the real strawman building goes on here:

      True advancement can only come via a consensus of one’s merit-based superiors in the hierarchy. The capitalist may get rich (emphasis in original), but not through merit.

      He’s cheating. He must be. Why, he’s nothing but a exploitative exploiter who exploits…

      Ace is usually a lot less facile than this.

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  9. “Look, I accept the C+I+G+X-M argument. I really do. It is a mathematical fact that if you increase G, output increases. If that is the only criteria that matters, then yes, Keynsianism works. “

    The core argument of Keynesianism has always been over the ability of government spending to return more economic benefit than it costs, i.e. the multiplier and therefore boost GDP over what it costs in current and future taxes. And of course the idea that by “priming the pump” it can create a self sustaining economic recovery that lasts after the stimulus is withdrawn. I would argue that the 2009 stimulus failed to do so as the economy reverted to the baseline after the stimulus was withdrawn. Krugman doesn’t deny this either, the argument is over whether the stimulus wasn’t big enough or the wrong policy to begin with.

    A related issue is that what passes for Keynesian policy arguments these days is actually closer to MMT in that there’s no plan to run surpluses and actually pay down the debt during a boom, but merely attempt to stabilize the debt as a percentage of GDP.

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  10. Heh. What an amusing thread. If I were to read it in, say the Economist, I might think they’re describing a state that has given up some of its sovereignty (say, Belgium in the EU). Then again, Prince Charles might be a decent example of a semi-sovereign. 😉

    Incidentally for Mark, there are infinities and then there are infinities. As an example, there are an infinite number of integers and an infinite number of odd integers. Even though both are infinite quantities, there are twice as many integers as odd integers. It’s a case where one can divide one infinite number by another and get a non-infinite number. In this case, 2. That only works, because these two quantities are of the same class. Rational numbers and irrational numbers are of different classes. There are more irrational numbers than rational numbers, even though both are infinite.

    BB

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  11. Cool. It’s fun reading about the search for higher primes. The challenging thing is proving that a number is prime without going all the way up to half its value.

    A friend of mine did a report on quaternian numbers in college. You’ve got your regular numbers. Then there are complex numbers (i^2 = -1). But why stop there? Hamilton came up with the identity i^2 = j^2 = k^2 = ijk = -1. Evidently they are of some use in spatial rotations.

    BB

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    • Euler’s identity, as used in Fourier analysis, was one that stopped me cold, but sure enough, it is just a special case of using the logarithmic and trig functions.

      Still, it is an amazing expression at first glance.

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  12. Euler’s Identity is the single most elegant equation in all of mathematics.

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  13. Agreed.

    My favorite class senior year was called Basic Analysis. Instead of assuming everything I’ve been told, we derived it. All the exponential properties simply come from assuming a function is its derivative.

    Or, if you take a function S(x) whose derivative is C(x) and let the derivative of C(x) = -S(x). All the trig relations follow.

    BB

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  14. Ahhhhhhhhhhhhhhhh

    The comfort and beauty of mathematics!

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  15. Germany suffered defeat in a war that left it exhausted and stripped of territory, population and productive capacity by the victors to pay for reparations; it was the scene of intense class conflict and intense economic dislocation. The hyperinflation of the Weimar Republic Germany, therefore, began not with absolute over-accumulation of capital — with overproduction of commodities and a surfeit of labor power — but decidedly the reverse: a massive loss of productive capacity — a loss the government then tried to paper over, without success, by issuing worthless paper. The government sought to stabilize the economy by printing money to offset these crippling economic losses. The subsequent explosion of prices occurs not merely because the Weimar Republic sought to paper over a disaster, but because it was not possible to paper over such catastrophic material losses with money printing. The lesson of the Weimar Republic is obvious: while debasement of the currency can artificially inflate the purchasing power of state issued token currency, it must ultimately fail in an explosion of prices if the state attempts to paper over real material losses.

    Like

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