Tuesday, September 28, 2010

Why I Despise Krugman

Recently, I wrote a take-down of Paul Krugman
I pointed out how, in some of his recent posts, Krugman was distorting facts in order to score points for his policy prescriptions. I showed how he was pulling sleight-of-hand with the numbers, so as to play on readers’ misconceptions, and thereby make his rather foolish policy prescriptions sound reasonable. 
In short, I showed how unreasonable his policy prescriptions really were, capping my read on him as follows: A man who would never tell the truth, when a lie would serve him just as well
But as I wrote my rebuttal to Krugman’s recent posts, I was surprised to feel a blazing anger towards the man—not towards his policies, or even towards his less-than-honest attempts to fudge facts in order to score points—
—I found that I despised Krugman: With a passion. 

A policy disagreement is not enough to get me to despise anyone. I’ve had plenty of big disagreements with plenty of people, including close friends—I never allow intellectual disagreements to come between me and my friends, or even to color my feelings towards my opponents. I’m just not built that way: Ideas, for me, are toys to play with, not flags of opposing enemies. 
However, though I have fewer disagreements with Krugman than with some of my close friends, I still despise Krugman—still with a passion. 
As you’ve probably noticed, I’m pretty analytical. If I were being eaten alive by a shark, I’d probably stop screaming for a bit and say, “My, that’s interesting: The shark closes his eyes and rolls them up into his skull, as he thrashes my body to death—isn’t that fascinating?”
My visceral reaction to Krugman is something I couldn’t explain, until I got a fan letter about my takedown of him. The fan letter was very kind, but innocuous—I replied off-handedly and very quickly, so quickly that it was almost automatic writing. 
Distractedly, as I was watching BBC, smoking a cigarette, drinking coffee, and making sure the toast didn’t burn, I wrote the following two paragraphs, almost without looking at the screen on my computer, or even the keyboard: 
I really do despise Krugman—not because I disagree with him: I despise him because I get the vibe that he wants the US to get involved in a war, just like WWII, just so that the economy improves. 
Getting involved in a war for economic gain is immoral—it’s no different than killing someone for money. THAT is why I despise Krugman.  
I sent off my reply to my dear fan, Kim Kirby, just as the toast was beginning to burn. 
Then, as I was buttering the burnt toast, I had one of those mental hiccoughs: Wait—what did I write to that nice lady? 
I went back to my computer, re-read the reply I had sent Ms. Kirby—and there was my answer: The reason I despise Paul Krugman. 
Getting involved in a war for economic gain is immoral—it’s no different than killing someone for money. THAT is why I despise Krugman
I’m no cyber-babe in the woods: I’ve gotten in public skirmishes with other people before—I got in a row with some loser in Chicago, over deflation versus hyperinflation. The guy committed worse sins than Krugman, vis-à-vis the truth—this Windy City Windbag seriously distorted what I had written, just so he could set me up as his straw man. 
But I dismissed the Windy City Windbag, because he was just a loser money-manager, desperately trying to keep his clients docile and happy, as he lost all their money through his incompetence. 
But Krugman is different. Krugman matters. 
Now that Larry Summers is on the way out, and Tiny Timmy Geitner has been handed his hat, Paul Krugman is clearly positioning himself for a role in the Obama administration—which is fine: Everyone has a right to advance their career. On paper, Krugman would seem like an ideal candidate, for some policy position—right?
Krugman has the résumé for any of the top policy jobs in the administration—but he lacks a moral center of gravity. 
It’s not the differences in policy prescriptions that I object to: It’s Krugman’s cavalier belief that a war—a total, full-on war, with all its attendant fiscal spending—is what saved the American economy from the Great Depression. 
It’s Krugman’s disturbing, nihilist inference, which he makes over and over, tucked away in his articles, but always there, like a nasty aftertaste of a drink laced with a roofie: So maybe another total war might not be such a bad idea now, so as to get us out of this new Global Depression
That is what I object to in Paul Krugman: He seems to be offering up another war as the only way to fix the economy. 
But World War II was not fought for economic gain—on the contrary: The war was fought at tremendous cost, with tremendous sacrifice by everyone in the population, without any sort of certainty that the end of it would be remotely good. 
No one fought the War thinking, “When this is over, we’re gonna make so much money!” The War was fought to defend civilization—and a lot of sober, sane people thought that the Nazis and the Imperial Japanese would likely win: Yet they fought anyway. They fought not because they thought they’d “improve the U.S. economy”—they fought because it was the right and decent thing to do, even if it might be a losing cause. 
Krugman doesn’t see this at all. Instead, with perverse rigor, Krugman—implicitly, relentlessly—implies that the War was really just a great way to stimulate the U.S. economy . . . so maybe . . . it might not be a bad idea to, y’know . . . wouldn’t it be great to have a big huge round of fiscal stimulus—just like World War II? 
This is what Paul Krugman is saying. And he is saying it over and over and over again—so it’s not some miswritten phrase, or ambiguous sentence: It’s what he believes. It’s what he stands for: 
Krugman believes in war, as a means to fix the American economy. 
I think having someone in an important policy position in the U.S. Federal government whose moral attitude is so out of kilter is just another nail in the coffin of the American Republic. I think appointing someone who so cavalierly thinks war is an excuse to stimulate the economy is sick
I contrast Krugman with Robert Reich—a man whom I think is even more wrong about his policy prescriptions. 
Yet Reich is someone whom I respect completely. I have no doubts whatsoever as to the moral clarity of his vision. I have no doubts as to his decency. As to practical policy initiatives, I’m on the opposite end of the table from Reich—but as a man, and as a human being, I have no doubts about him, and complete respect for him. 
But Krugman? I have no doubts about him either—Krugman is despicable. And he should not be allowed a seat at the table of policy discussions, no matter what. 

Someone has to say something: That’s why I’m writing this piece—Paul Krugman is the last person the American Republic needs to help fix the current economic situation. Better a decent man who is completely wrong, than a nihilistic liar like Paul Krugman.
Gonzalo Lira


  1. There is a style or rhetoric that is common among the elite that offends the sensibilities of us commoners. The preservation of the status quo is literally their bread and butter. For us, it is merely an exploitative system that is mysterious and complicated and entirely disposable. I find Krugman to be vile. How can he write about the common people without mentioning the actual construction of our banking system and how that financially rapes the country.

  2. Whoa, I think you've misunderstood him! I don't think Krugman really wants a war(!)

    He's just trying to argue for a stimulus package that's as big as WWII.

    He's been arguing for bigger, bolder stimulus for a very long time, and may now be getting a bit careless in his wording due to frustration that the powers-that-be aren't listening to him.

    I am glad you wrote your take-down earlier - he needs people to show him how the strength of his feelings is sabotaging his intellectual honesty, so he can have a chance to wake up and straighten out.

  3. Another interesting point is that the deficit spending of WWII has been matched and exceeded. War prompted Americans to make uncomfortable changes in our way of life, and destroyed the manufacturing infrastructure of most of our competitors.

    Sharon Astyk and a few others are leading the charge toward adjusting our lifestyle, but it's difficult to sell people on except as a way to address some existential threat.

    I hadn't ever read Krugman as advocating the destruction of competitors' economies before (e.g., I think he was anti-NAFTA), but I think you're right that such a position is implicit.

  4. I think you're full of shit and hoping to make a name for yourself by "taking on" Krugman. If you think Krugman is pining for a war then I think you may have Aspergers Syndrome - in which case I take back the "full of shit" comment. Clearly it's one or the other. I only read your rant because a friend had it posted on his facebook. I doubt seriously you make much of a splash in the world, thank god.

  5. We need a $500 billion investment in high speed rail. To start. we need a $500 billion investment in solar power. To start. We need to reduce our military footprint abroad, and at home. We need to legislate electric cars into mainstream and if we can't do that then CAFE @40mpg. We need to legalize drugs and restructure our entire federal incarceration program. Where is superman?

  6. GL I think youre spot on..I agree that Krugman and his policies are ridiculous.all the douches that defend him are Policy wonk types..understanding nothing. Probably 'consultants' or money managers, government employees, or other related douchebags.

    How hyperspending more on war, or infrastructure is going to help without fixing the issues you discussed in your Saturday article is a waste of time.

  7. You have gotten the man completely wrong. He wants us out of Iraq and Afgan. He's advocating for a fiscal stimulus the size of WWII, not a war itself. You are completely overreacting here.


  8. You seriously should see a psychiatrist, I think.

  9. Hi Gonzalo, I hope you're enjoying your 15 minutes! Is this a great country or what?

  10. I think Krugman has outclassed you on this and proven that, at best, you're slamming an imaginary Paul Krugman of your own invention.

    You say "He believes this." He says quite explicitly and patiently why he does not believe that. This leaves you with several options, one of which is that you've simply misunderstood him and misrepresented his position.

    Another is that he is now lying about (and thereby undermining) his true position. And while you're considering why a man would do such a thing, you might wonder why so many other people have read the same Krugman columns as you and not read him as you do.

    And the only other situation I can imagine here is that you know full well he doesn't think we should go to war to help the economy but you've climbed foolishly onto that limb and either don't know how to back down from it or you just crave the attention from attacking a biggie.

    You don't have to answer this to any of us. But you might want to ask yourself, "Which is it?"

  11. Even bad press is good press, right? Douchebag.

  12. Mr. Lira;

    You forgot to mention that Business Insider, a place where any traffic is embraceable, took down your post. I presume it was because you "manufactured" Krugman's position on how to stimulate the economy. It's true that he often writes, as many others have, that WWII was the big event that drove the final nail into the coffin of the great depression. I haven't yet seen your post on the advocacy of war by the many others who also claim the WWII put an end to the great depression.
    Officially, Krugman's prescription for the correct response to our current recession is a stimulus on an economic scale like WWII.

    On the outside chance that you might be interested in Krugman's actual position, here is a link to his blog post, written in response to you accusation: http://krugman.blogs.nytimes.com/2010/09/28/economics-is-not-a-morality-play/?src=twt&twt=NytimesKrugman

  13. Mr. Lira, you are wrong about so much.

    First of all, Paul Krugman is not going to be joining the Obama Administration. Nor is he "clearly positioning himself for a role in the Obama administration." As you would know if you really read Krugman regularly, he has been criticizing the administration for being weak in the face of Republican obstructionism pretty much since January 2009. In addition, he has written several times on his blog that he does not want a position in the administration -- he can influence the debate just fine from his perch atop the *New York Times* op-ed page. Plus, as he admitted recently, he's not a particularly good administrator. How can you not know all this?

    Second, Paul Krugman does _not_ want the U.S. to get into a war to get us out of the Great Recession. He has never said anything about wanting a war; he has never said about any country "Their conduct is intolerable; President Obama should remember the examples of President Lincoln and President Franklin Roosevelt." He does want the Obama administration to force Mainland China to end its currency manipulation; but he very sternly made the point to Republican hawks years ago that China is far too big to attack militarily. He's a specialist in international economics, and therefore tends to be pretty gentle with foreign countries. You don't offer a single passage where he calls for a war; you just say that Krugman's acknowledgement that the New Deal did not end the Great Depression, WWII did comes with an "inference" (I think you mean "implication") that we should have another total war now to get us out of the Great Recession. You're imagining things -- probably because you hate Krugman. When there _was_ a war being proposed -- the Iraq War -- Krugman was against it. Like most great economists -- for instance, Adam Smith, Ricardo, Mill, Keynes -- Krugman's definitely not a believer in militarism. You'll doubtless go on believing that Krugman is a secret hawk; but just watch and see if he takes a post in the Obama administration. If he doesn't, remember I was right about that and start believing that I'm right about Krugman's attitude toward war, too.

  14. Lira eres un pendejo! solo un pendejo cree que Krugman quiere una guerra para salir de la recesion; we are already in two wars estupido.

  15. I followed a link over here from Krugman's blog. He's not afraid to have his critics' bile exposed to the light of day.

    The contention that Krugman is supporting war as on exonomic solution is a ghastly - and, I believe willful - misrepresentation.

    Mr. Lira, you are a profoundly disturbed person. Clearly, you have a passionate belief in your delusions. While this might make you honest, it also makes you hateful, and seriously out of touch with reality. You are not only deluded, you have a negative and destructive fixation.

    Get help now. Please.


  16. I'm glad you got called on this sub-moronic post by Business Insider. You can do better. This was garbage.

  17. Krugman: "some people say murder is good, they're wrong"

    Lira: "Krugman says 'murder is good'"

    I don't know how you could read Krugman - I mean honestly read all his columns and his blog posts - and think he wants a war. He was one of the first MSM columnists to protest Bush's invasion of Iraq, questioning the motives before the war even started. Go back and read his columns from 2001-2003. He was the first MSM columnist who cautioned against Bush politicizing the 9/11 attacks - in fact, Krugman called the Bush Admin out only 3 days after 9/11.

    Krugman has said that the economy needs a stimulus on the scale of WW2. To read that as saying Krugman wants another WW2 is, as Brad Delong delicately put it, batshit insane.

  18. Total misrepresentation of the Krugman article. Maybe you should re-read it or have someone who can explain it to you do it!

  19. In your September 7 post, you say you "won't fall into the trap of inferring that Krugman is arguing in favor of total world war, in order to save the U.S. economy". Now you say "Krugman believes in war, as a means to fix the American economy".

    Nice to see you demonstrate the consistency you claim Krugman lacks...

  20. Like most people arriving via Krugman's blog, I think you're absolutely wrong about this, but I find the fact that you despise him kind of interesting. I'd like to propose a theory that may put it in context.

    Krugman operates in a strong liberal tradition. He cares a lot about the poor, about the unemployed, and about income inequality. He's also a trained economist, so he sees almost everything through an economic lens; when what he sees comes to bear on the poor, he cares about it in that specific way and for that specific reason. When he says "stimulus," he's thinking of what can be done for the poor with that money. When he says "debt," he's thinking about the stimulus that could fund. It's not that he doesn't know how the economy works (quite the opposite), it's rather that he cares for different reasons.

    (He doesn't care about aggregate demand for its own sake, by the way. See for example http://www.nytimes.com/2009/11/13/opinion/13krugman.html , where he speaks approvingly about a german program that reduced unemployment without improving aggregate demand.)

    So when he talks about WWII, he's thinking about the massive fiscal stimulus that entailed, and what that did for the poor in the depths of the Great Depression.

    I don't know your background, but it sounds like you feel war deserves a different sort of treatment, that it should be judged by different rules. Maybe it seems obscene to speak about war in terms of its impact on the economy, and to imply that those impacts were in some way desirable on their own merits. Krugman definitely does that, and it sounds like you've picked up on that. That he's being in some way irreverent.

    He is not a warmonger, as his most recent post makes plain. During the runup to Iraq he was almost the only vocal anti-warmonger, so the fact that you accuse him of being such is hilariously stupid. He regards the fact that WWII ended the Great Depression as something of a cruel joke. But he sacrifices often on the altar to the poor, and though he is not mad, though there are things to which he will not stoop*, he has begun to see everything as a potential lamb. Maybe this is what disturbs you.

    Proof of *: http://krugman.blogs.nytimes.com/2010/07/17/i-would-do-anything-for-stimulus-but-i-wont-do-that-wonkish/

  21. The only think I can think of after reading this is just that this must be the most lazy extrapolation of ideas i have read in a while. To reach the conclusion that Mr. Krugman has been promoting the idea of a war is laughable given the facts that:
    a. There are currently 2 wars still in process
    b. Prof. Krugman was one of the most vocal voices that criticized the march of war to Iraq, to the point of him criticizing the president, the media (including his own Nytimes), the democrats and everyone else involved in that.

    It is beyond me how these facts can escape attention of anyone who seriously tries to accuse this man of warmongering. Just look up his articles and blog postings from those times and you will see this for yourself.

    Luis Munoz
    San juan, PR

  22. Mr. Lira, one aspect I find remarkable is that those here who defend the K man as proposing a stimulus only the size of WWII spending, and not the concomitant war it implies, seem to fail to grasp the simple and unambiguous outcome of their position. The only reason the spending "worked", per se, is that there was complete and total world wide destruction, resulting in a place for the spending to go. Only a colossal jackass would overlook that. Whether K man subscribes to war or is just as confused as all his other nonsense is up for grabs. Still, your point is well made.

  23. Sometimes 15-minuts of fame comes witha an orange jumper suit. Or, in your case, a straight jacket.

    You couldn't be any more wrong if you took a course in wrong and aced it...

  24. Gonzalo, dude, between this and The Rape Post I really think you're coming badly undone. Seriously.

  25. Well Business Insider decided to purge your joke of a blog posting. Why don't you actually learn about the subjects you write so that you can write with some actual expertise. Your description of the "monetization" of the debt was extremely sloppy and riddled with factual errors relating to the mechanics of the us financial system and the Treasury. No one expects you to understand the subtleties but perhaps you should leave writing on these topics to those who do... Also, your point has been made about a dozen times by financial reporters, analysts and financiers over the last 12 months. Its old. Its not new and its not your idea.

  26. If you don't believe WWII ended the Great Depression, then you clearly know nothing about history whatsoever.

  27. Mr. Lira,

    I offer a two rules to live by that will serve you well if you take them to heart.

    Number one: Paul Krugman is never wrong.
    Number two: If you think he is wrong, see number one.

  28. RE: Anonymous
    Agree that "Paul Krugman is never wrong," because he can perpetually say that if centrally planned, economic stimulus didn't work it was simply because it wasn't big enough.

    Krugman is a loser

  29. Mr. Lira I notice that most of your detractors commented under an anonymous heading. Why is that? I do not want to comment one way or the other on your post or their reponses. I find it interesting that your post stirred such emotion. You must have touched on something. Either there is a grain of truth in what you posted that put so many on the defense when it came to Mr. Krugman or they want desperately to believe that he is right by making you wrong. I think that Mr. Krugman suffers from the human condition just like every other person whether they are a prince or a pauper. With that said it is difficult to comment on his motivation any more than one can guess why any other person says or does the things they do. I love it because you always raise interesting points. Between your posts and the responses they generate I find myself wanting to be informed on every side of the issues at hand. Keep being you it is working.

  30. Let me put it this way..... If I were the Dictator, I would probably have him shot.... Well, I'd probably have you shot also, for being such an upstart and provocateur. Trust me when I tell you, you would both be in good company.....

    Best regards,


  31. "I contrast Krugman with Robert Reich—a man whom I think is even more wrong about his policy prescriptions. Yet Reich is someone whom I respect completely. I have no doubts whatsoever as to the moral clarity of his vision."

    Oh, really? But ... by your mentioned criterion for despising Krugman, Robert Reich is morally identical. Here he is in early 2009:

    "According to government projections, the national debt will exceed half the nation's gross domestic product by the end of this year -- not including the stimulus package. That's certainly high, but not close to a record. The debt was far more than 100 percent of GDP at the end of World War II. That mammoth debt, not incidentally, put Americans back to work, financed industrial production, underwrote a new generation of science and technology and created a wave of demand for consumer goods when the war ended. In short, it got the economy on a new and faster track, thereby allowing the United States to pay down the debt and ushering the country into a new era of widely shared prosperity."

    So you see, Robert Reich is every bit the bloodthirsty mercenary warmonger Paul Krugman is, since Reich and Krugman agree 100% on the stimulative effects of WW II deficit spending.

    Face it, guy; at the bottom of your hatred for Paul Krugman is envy. Krugman's smarter than you, he writes better than you, and he makes far more sense than you're ever likely to make. But at the bottom of that bottom of your envy? You hate him because it seems to you he must have some superhumanly great capacity for fact-checking. This is an understandable impression among those who utterly lack this capacity. But y'know, it's not really that hard. I googled on "Robert Reich", "stimulus" and "World War II", and found the above quote from him within seconds.

  32. Hi Gonzalo Lizard,

    Let me look up my DSM-IV to find a mental disorder that fits you perfectly.
    Meanwhile, I'm sure you have some snuff films that I might be interested in buying.
    By the way, I despise Krugman, too. I just think he's plain stupid - a one trick pony.
    As far as the Windbag is concerned, at least he sounds more sensible than you.
    Karl Denninger rants, too, but not in a delusional way like you.
    Will keep visiting you blog, though. I love clowns.

  33. Couldn't help but notice that many/most of the detractors posted as "anonymous". Gutless COWARDS ALL! None have the courage, as Gonzalo does, to put their ideas out there for real discussion, analysis, and true scrutiny!

    I've seen several videos in which Krugman relentlessly touts the virtues of war as an economic blessing. He genuinely believes in war as a godsend! He is not the first!

    I've read enough history to know that many progressives throughout the 20th Century saw war as a way to make money. Many publicly opposed war while privately promoting it! Woodrow Wilson was one! While Wilson was campaigning against the US entering WWI, he was sending emissaries to Europe planning to do precisely that! Just a few months after being elected on the platform of keeping the US out of the war, he plunged the US into that war.

    I personally knew a man, who has since passed away, who worked as the #2 or #3 person at the State Dept under Calvin Coolidge. While at State, he wrote various well-written policy pronouncements that brought him acclaim and attention.

    When his term in this position ended, he was hired by a group of businessmen. They funded a new law firm with this man as its head (he was a lawyer by profession). They leased an office in one of the lower floors of the Empire State Building in NYC for occupancy of this new law firm. They told him their business interests would be his ONLY clients.

    Over the ensuing few years, he began to realize that he had become the lawyer for a criminal enterprise. He also began to see documents crossing his desk that were very troubling. These people were not only positioning themselves to PROFIT from a war. They were actually planning to INCITE and INFLUENCE the United States to enter a war. (This was in the early 20th Century.) Many had positions of considerable influence with the White House at that time.

    He told them that what they were planning was immoral and almost certainly illegal! He left their employment!

    I personally know a man today whose family business interests not only provide financing for wars but who have funded various groups throughout history to aggressively promote war. He has told me how his family has, at times, funded both sides of various wars simultaneously. They are deeply involved in central banking throughout the world. He has even explained how, on some occasions, they have secretly propagated wars so they could profit from them. To them, the human cost is inconsequential! Unbelievable that such evil exists, but it does!

    The simple fact is that there are those who have such nefarious and dark souls to actually look at war as a profit opportunity AND who seek to bring it to pass. Some will go to the extreme of fomenting war for their own purposes, regardless of the cost in humanity or treasure. This seems so utterly repulsive to most people that they can't accept that there are people who would really do such things, but they DO exist! This says something very fundamental about their natures -- They're EVIL! Krugman appears to be one of those! The many videos of him are prima facie evidence of this!

  34. In case anyone missed it, the page where Lira's original column appeared in the Business Insider now has this correction:

    "The post that previously appeared at this URL by the writer Gonzalo Lira makes some claims about Paul Krugman's stance on war being necessary for the economy that we feel distort Krugman's actual stance.

    You can read the original post here.
    -- Joe Weisenthal, Deputy Editor, The Business Insider"


    If what Weisenthral says is true, he was wise to take it down, as it seems Krugman would have a clear-cut libel case against Lira.

  35. _______________________________

    Our Economy is in Shamble

    The consequences, the Great Depression and history tells us, will necessarily be a Formidable Chaos:

    Social and political turmoils, and military adventures.

    Neither supranational bodies nor governments can propose a plausible solution;

    What is Politically Correct is both Mathematically and Morally Wrong!


    - Do you feel that your ideology pushed you to make decisions that you wish you had not made?

    - Well, remember that what an ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to -- to

    exist, you need an ideology. The question is whether it is accurate or not. And what I'm saying to you is, yes, I found a flaw. I don't know how

    significant or permanent it is, but I've been very distressed by that fact.

    - You found a flaw in the reality...(!!!???)

    - Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.

    - In other words, you found that your view of the world, your ideology, was not right, it was not working?

    - That is -- precisely. No, that's precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence

    that it was working exceptionally well.


    It is our responsability to create a meaningful increment of jobs, revenues and investments:

    We urgently need the only plausible solution that is offered to us:

    An Innovative Credit Free, Free Market Economy.

    It is your duty to insure your own security and economic survival, no one else will do that for you!

    History teaches us that men and nations behave wisely once they have exhausted all other alternatives.


    Credit Free Economy
    More Jobs, No Debt, No Fear.
    Prosperous, Fair and Stable.


  36. SPECTRE of DeflationSeptember 29, 2010 at 4:35 PM

    Great piece, and you are 100% correct. His 2002 statements regarding needing a housing bubble cannot be misconstued, as he explicitly calls for a housing bubble just like PIMPCO'S Paul McCulley. Well Paul K, you got your housing bubble which exploded consumer spending which is what you said we needed in order to pull us out of the NASDAQ debacle and 9/11. How is that working out for you and Amerika? Now the narcissistic liar is calling for more stimulus spending as a means to get us out of his original mess. You can't make this bullshit up!

  37. SPECTRE of DeflationSeptember 29, 2010 at 4:49 PM

    Business Insider is run by Henry Blodget among others. Enough said on their anal-ytical processes and their editorial content regarding others writings. They are nothing but a TOOL in every sense of the word! They completely lost me when they defended AIG and it's payment to GS when GS was already covered by SWAPS. You see, GS would sell you a AAA CDO which they said was better than sliced bread right before they naked shorted (had no interest in) what they just sold you through the use of said CDS. So they were covered by the SWAP and the additional payment from AIG. Where do I sign up for this type of crooked trading? It' all nothing more than bread and circus for the sheeple. Enjoy this while you can.

  38. US didn't recover because it entered the war, rather because it won the war and most important because it’s status after the war.

  39. To Paul Buelna and S Bernard -

    Don't read too much into the use of anonymous posting on this blog - for people who don't have google accounts etc. it is not so easy to post here as on some other blogs.

    Plus, people using made-up names like "SPECTRE of Deflation" are really no different, are they?

    And please don't say whether your commenter names are your real names - just remember that there is no way for any of the rest of us to know whether they are or not.

  40. I think this should be seen as a salutary lesson - if you are going to express such a radical opinion you need to make sure it is consistent with the information out there, otherwise you are going to look very foolish and lose any credibility you have. As previous posters have illustrated Krugman is demonstrably anti-war and you have misread his comments based on your antipathy to the man. There is always room for honest debate on the topics around macroeconomics, but all you have done here is proved yourself unable to correctly interpret stuff which is pretty obvious to most people. Someone mentioned Asperger's early on and your misunderstanding does read that way, as an inability to read the emotional content in a piece which others find transparent. If that might be the case I would urge you to check out the possibility and bear it in mind when you blog in future

  41. "... I wrote a takedown of Paul Krugman." Yeah, in your freaking dreams.

    When I began reading this post, my first thought was "This guy is crazy, actually insane." But I read further and realized there was a more mundane explanation: You are stupid. Plain, old-fashioned stupid. Reading the comments, I see that some (most? all?) of your regular readers share the affliction. The one thing explains the other: one would need to be stupid to be your regular reader. Except S Bernard. He is stupid AND crazy. I guess they aren't mutually exclusive, so YOU could be ...

    There is a reason your drivel was removed from Business Insider: It isn't worthy of a serious forum.

    And to Mr. Bernard and anyone else wondering about the anonymous commentors (this is the actual reason I decide to waste the time to comment, anonymously) it has nothing to do with courage. Posting under a screen name would reveal no more of the poster's identity than posting anonymously. It has to do with legitimacy, as in this blog has none. This is the first and last time I have read anything from this cretin and I certainly have not the slightest desire to sign up for future garbage or to inflate his audience numbers.

  42. Anon. I am surprised you are able to type with Krugam's shlong down your throat like that. Krugman is nothing but a shill for the American elite. I think he was offended by the crude belligerent Bush/Cheney foreign policy but seems onboard with the Obama, EU, UN style of obliterating middle Eastern brown skinned people. Whose main thesis is they would kill each other if we left and weren't there to force our decisions for their future down their throats. We are killing them for their own good!

    So what does Krugman say... "the fact is that war is, in general, expansionary for the economy, at least in the short run. World War II, remember, ended the Great Depression. The $10 billion or so we're spending each month in Iraq mainly goes to US-produced goods and services, which means that the war is actually supporting demand. Yes, therewould be infinitely better ways to spend thr money. But at a time when a shortfall of demand is the problem, the Iraq war nonetheless acts as a sort of WPA, supporting employment directly and indirectly. "

  43. I wonder on some level is Krugman capable of walking a fine line like in "A Modest Proposal"?

  44. Krugman may not be advocating for foreign aggression but he seems to be implying it is better than doing nothing. Anon... Not everyone is American. Some of the people of this world look at Americans like Americans looked at the Soviets. The USA goaded Iraq into a bloody war with Iran. To cover some of his loses Saddam tried to take Kuwait's oil. The US turned on Saddam than bombed , invaded, and destroyed the country's infrastructure. We then pulled back and imposed a crushing embargo on the country for 10 years... Complete with more bombings, denial of food, water purification chemicals, anti-biotics, etc. Then the US declared the country an untolerable threat to the world (after 9/11 gave them an excuse) and bombed, invaded, and took over the country. Lol. The US is the world's worst nightmare. A Nazi style country run on militarism and propaganda. You are all...including Krugman... Morally bankrupt tools of the empire.

  45. An absurd misreading of Krugman. Maybe you should examine exactly why you have this visceral hatred of the man, and how that blinds you to what he is really saying.

  46. Please... Post one sympathetic thing he has ever said about...ohhhh... I don't know... Pakistani civilians blown up in drone attacks ordered by Obama. I'm waiting....

  47. Oh the irony. You're complaining about being used as a straw man even as you're using Krugman as a strawman. Apparently he's read your post ( maybe, anyway ) and has already responded. http://krugman.blogs.nytimes.com/2010/09/28/economics-is-not-a-morality-play/

  48. Krugman and his Keynesian policies have brought America to the brink of collapse, and I think they will do ANYTHING to try to save their failed policies, including war. War is always the last hope of salvation to failed policies of a corrupt government.

    GL was a little harsh in his attack, but essentially correct in his conclusion.

    Interesting, there are a significant number of Anonymous posts to this article. It surly can't be that hard for reasonable people to figure out how to post to this blog.

  49. I believe Krugman is a clown, for the same reasons you listed at the beginning of your post. Constantly cherry-picking the facts as he does, is the same as lying, but he doesn't care as in his opinion his cause always justifies the means.
    Despising a clown only makes him look more relevant.

  50. SPECTRE of DeflationSeptember 30, 2010 at 4:24 PM

    I see that the Paul K apologists are out thick as thieves, pun intended. Paul K should of received a NOBLE and not a NOBEL because he's part of the clan of elitists who are stealing the treasury of our country. Every time you hear "bailout" think transfer of wealth from average Americans to the elites of this world just like good ole' Paul K. This whole exercise including the housing bubble that he and MCulley called for was nothing more than a smoke screen to steal everything not nailed down to the floor boards. You apologists are so stupid that he's peeing on your leg and telling you it's raining, and you dumbasses take his word for it just like all progressive liberals who can't find their way out of a paper bag without somebody throwing them change for their fare. We are entitled say the liberals. LOL! DUMBASSES!

  51. SPECTRE of DeflationSeptember 30, 2010 at 4:38 PM

    For the Paul K. apologists AKA dumbasses:

    "Most people prefer to believe their leaders are just and fair even in the face of evidence to the contrary, because most people don't want to admit they don't have the courage to do anything about it. Most propaganda is not designed to fool the critical thinker but only to give moral cowards an excuse not to think at all." - Michael Rivero

  52. Gonzalo, thanks for the link to your Wikipedia page -- it clarified everything:

    "Starting in 2010, Lira began contributing blog articles to Zero Hedge, naked capitalism, Seeking Alpha and Business Insider, despite have no economic background, no financial education, and no business experience in the financial markets."

    BTW, can you help me get a job writing for a major business publication? I have no experience or education either!

  53. But seriously, can you please explain to your readers how you became a writer for Business Insider and the other publications listed? Serious question from an aspiring writer -- please answer.

  54. You know, it would be nice if we all stopped trashing people and started thinking more about things.

    Like, WHY did pretty much all of Europe as well as the USA prosper so well after WWII?

    The story that we were the only ones still standing (i.e. with relatively little of our infrastructure destroyed), so we didn't have serious competition, doesn't entirely ring true for me, because it seems to me the Europeans also had a golden age at the same time.

    One theory might be that people with money were persuaded to buy war bonds (at a low interest rate), out of patriotism, which then allowed the governments to pay the "Rosie the Riveters" (at patriotically low wages?).

    Everyone got used to working really hard and consuming as little as possible, and didn't resent it because it was so we could save the world.

    Everyone had a good attitude. Maybe it was as simple as that - ?

  55. First: I'm only anonymous because if I want to post any other way on this website, I've got to sign up for something. I don't want to do that. I don't appreciate people suggesting that I'm being cowardly, when it's a case of Mr. Lira setting up his website badly.

    Second: I'm the "Anonymous" who said two days ago, "First of all, Paul Krugman is not going to be joining the Obama Administration."

    Third: "Karen" is being the voice of gentle reason. I will try to write in the same spirit.

    Karen asks:

    "WHY did pretty much all of Europe as well as the USA prosper so well after WWII?

    "The story that we were the only ones still standing (i.e., with relatively little of our infrastructure destroyed), so we didn't have serious competition, doesn't entirely ring true for me, because it seems to me the Europeans also had a golden age at the same time."

    Karen, you are right that the Europeans had a golden age then, like us. I'm using the figures of the late lamented economic historian Angus Maddison (a relatively right-wing kind of guy), because he's highly trusted. In the period 1950-73, the real annual average compound growth rate of U.S. per capita GDP was 2.45%. That was considerably higher than the growth rate had been for any long period before that (unless you count Franklin Roosevelt's presidency), and it is quite a bit higher than we have achieved since then.

    But our golden age growth was nothing compared to the Europeans'. The corresponding figure for 1950-73 for Western Europe is 4.05% and for Eastern Europe, 3.81%. Both figures are far higher than anything Europe has achieved before or since. (My data comes from Angus Maddison, _Contours of the World Economy, 1-2030 AD_ Oxford: Oxford UP, 2007, p. 383.)

    Mr. Lira's idea that "[t]he prosperity the United States experienced in the two decades after World War II had nothing to do with deficit spending, and _everything_ to do with the fact that it was the only industrialized nation still standing after a total world war -- so the rest of the world was forced to buy from the U.S. _because there was no one else left to buy from)_" will not hold water, I'm afraid. That's really not how the world works.

    Just as it would not profit the U.S. today to start a total world war that devastated all its trading partners/competitors, so too it was not good for the American economy in 1945 to have almost all of its trading partners' economies in ruins. That was one big reason why we conceived of the Marshall Plan.

    Paul Krugman should have the final say, being the international economics expert and all. Here's the link:

    (And I hope this helps people see that claiming that Professor Krugman wants a total world war to get us out of the Great Recession is a foolish libel on a great man.)

  56. GL despises Krugman. I love him. Jesus suggested we love our enemies. Krugman is a child of God. As an economist, however he is an amoral dingbat. I'm a bit surprised at the reaction of Krugman's defenders to GL blog, since I leveled essentially the same charge against him shortly after he published his column of November 10, 2008 in a post on my website with virtually no reaction from his cadre. Read what I said here: (http://www.jesus-on-taxes.com/ON_PAUL_KRUGMAN.html) Here is a synopsis of what Krugman said that drew my ire:

    "But the new administration should try not to emulate a less successful aspect of the New Deal: its inadequate response to the Great Depression itself... F.D.R. did not, in fact, manage to engineer a full economic recovery during his first two terms...[His New Deal only served to prolong it.]...What saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy’s needs."

    Now in his latest comment Krugman essentially reiterated the same economic gibberish: "The point is that it would have been much better if the Depression had been ended with massive spending on useful things, on roads and railroads and schools and parks. But the political consensus for spending on a sufficient scale never materialized; we needed Hitler and Hirohito instead."

    Anyone who carefully reads what Krugman is saying and doesn't find it economically demented can only be a dedicated Keynesian. Of course Keynes too was demented, for as Krugman points out Keynes did in fact propose "burying bottles full of cash in coal mines, so people could dig them up again: since any proposal to spend money on things we need got shot down on grounds of prudence and efficiency, he proposed completely pointless spending instead."

    Both Keynes and his epigone Krugman aim their policies at the nirvana of "full employment," at any cost, which obviously includes war if necessary. K and K may not advocate war, but they both are ready to accept it as a last-resort expedient on the road to their nirvana. (Oh, and btw, Keynes never precisely defined "full employment," or rather defined it differently at different places in his highly unintelligible GENERAL THEORY OF EMPLOYMENT, INTEREST AND MONEY.) What any average-to-dull economist notices, which completely escapes K and K, is that war leads to full employment only through involuntary servitude (the draft), a reduction in the workforce through military casualties, and putting people to work building things to blow up things and people, and then rebuilding. Only Keynesians see this as a net economic gain. Only Keynesians believe that WW II ended the Great Depression. Apparently Keynesians don't even know about rationing and the losses of many liberties that Americans suffered during WW II. Most Americans would have gladly returned to the Great Depression rather than sacrifice their dead or wounded children, spouses, parents and other loved ones to WW II. And we haven't yet analyzed the economic costs of the War to working men and women living in Dresden, London, Hiroshima, Nagasaki, Iwo Jima, Guam, the Phillipines, Leningrad, Rome, Nanking, China, Europe, Asia, etc., etc. etc., where Krugnman's "public works project" (sic.) and "fiscal stimulus" took an even greater toll.

  57. SPECTRE of DeflationOctober 1, 2010 at 3:20 PM

    Paul Krugman is a TOOL of the elites. Always telegraphing their evil moves before they become fact. Run it up the NYT Rag Pole to set the table for more wealth transfer being called "bailout". How anyone with any neuron activity can read and then believe that sack of shit is beyond me. There he sits on his perch atop the Ivory Tower looking down like a vulture on all of his future meals called average Americans without a care in the world because after all he's part of the elite cabal Hell bent on destroying this country and stealing the last nickel from the American Treasury in order to usher in a NEW WORLD ORDER which is a nice phrase for world government that answers to no one.

  58. SPECTRE of DeflationOctober 1, 2010 at 3:36 PM

    Here's a snip from dumbass Krugman in 2002 plainly calling for a housing bubble. Now he says he wasn't. He's pissing on everyone's leg and telling them it's raining. His comments can't be any plainer regarding him being an advocate for a new bubble in housing to increase consumer spending. How did that work out for America Paul K? STUPID F#CK! You apologists suck as well because you are selling America down the river, and you seem to be loving every minute of it.

    Here's a snip from one of his 2002 columns in which he called for a housing bubble. Here's what he said:

    "The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance.To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

  59. Yes, we should all Despise Krugman. But he is center stage at New York Times because he arouses comment, and the NY Times needs web traffic. He is not about content. War? We already have phony wars. The U.S. figures this out long ago, that without war, politicians can't figure out how to employ everybody. An all-out war would bankrupt the country. America cannot fight an all-out war. It already spends 51% of its tax money on war. The U.S. has bullied to rule the world and make sure no other power rises up against it. Its era of hegemony is nearing an end.

  60. Brilliant.

    I despise Krugman dishonesty as well.

  61. I doubt Krugman wants war but if he does one reason would be to get money into the hands of people? If so, then a bloodless solution is for the US Treasury to just send a fat check to every American adult. Some would use it for debt relief and some to compensate for years of suppressed interest rates on their savings. It would be a form of debt relief WHICH IS BIBLICAL people (Deuteronomy 15, Leviticus 25).

    Or we can risk loonies telling us that war is a solution.

    F. Beard

  62. This comment has been removed by the author.

  63. I think you have brought up some interesting points and I guess I'm going to have to go off and read some of Krugman's most recent comments, it's been about a year since I checked him out. Clearly his desire to stimulate aint working, yet Europe and its path of defecit cutting is not going down too well either.
    I do worry though when I heard you talk with much affection about Volker on the Keiser Report. Maybe he did control inflation but he also created a massive debt crisis in the global South that really brought the West back into profit.
    I guess in the end it's all about your perspective and I think your all crazy. It's not more stimulus or cutting we need it's a whole new system that moves away from patriarchal individual result orientated capitalism to something else. I don't really care what it is as long as it's different and I don't really care what the results are for mankind. I'm bored by capitalism and its constant crisis, it's broken so lets do away with it.

  64. I always understood Krugman's argument to be that the government needs to spend money to make up the loss of demand from the private sector. He uses the deficit spending of WWII as proof for his argument. I don't think he's advocating the US start wars for economic gain, but I could be naive. It is easy to see how his argument could be mistaken as advocating ramping up defense spending to get the country out of this slump, but he's being subtle. He's asking for massive spending by government and unfortunately, the period of WWII is the only data point he has access to. When did the US government spend so much money to get itself out of a depression? Only once, there's only one data point and that's WWII unfortunately. There's been no other similar situation to use to back up his argument for increased government spending. Whether his policies would even work, I do not know.

    I wish that he, Reich, Steve Keene,and Dean Baker were on the Council of Economic Advisors. He's got a fine mind and can frame arguments that laymen and maybe Presidents can understand. But Baker is just as good and can replace him. Baker also seems more public-minded than Krugman. Krugman is an academic at heart. He's more comfortable in that environment and arguing ideas. Baker is more concerned about effective economic policies.

    Passion is a good thing. Being passionate about ideas is also good. But the idea is not the man. You are not your thoughts or your ideas. They flow from you as music flows from a flute as Hafiz says. Debate is a good thing. It's one way to learn. At least Krugman is throwing ideas out there for you and others to challenge. Most of the drivel we see in the MSM is not even ideas, or even debatable ideas or facts. It's either lies, propaganda, or unverified beliefs presented as facts. Both you and Krugman have more in common than you think. Your true enemy is not him. It is the Karl Roves and people like him who believe that reality is defined by what people believe or are told to believe. They are true despots, because they wish to enslave minds as Hitler and Goebbels enslaved minds. I believe that both you and Krugman are sincere and kind men with noble hearts and fine minds, but my opinion is just that, an opinion, and it doesn't really matter all that much.

  65. Krugman is for sale to the highest bidder. He started out making sense, then he was just "made". He epitomizes the Trilateral infiltration into academia, for the express purpose of the Keynesian bailout.

    I don't hate him for that. But I hate the mainstream prop-mills for glamourizing him. His noise will eventually be ignored...

  66. What we need is a Reagan. Someone who will lie to people about "balancing the budget" and yet spend money like there is no tomorrow. With total insanity - spending money we do not have. In a pursuit that does not over-produce goods and do not compete with existing consumer industry, like defense or space travel. A totally wakco pursuit.

    Then 80s will come back.

  67. I think only way to save the country is to go "High Tech". Give hugh amount of money to universities and research facilities. Yes, I am talking about Sputnik. Just spend, spend and spend. In High Tech.
    Think about the prosperity it will bring in next decade. Invest in ourselves.
    Tight-fisted money saving will only bring deflationary spiral where we all die, poor!
    This country will never become Zimbabwe even if we all try. Too much resources, smart people and established structure.
    Just wake up to possibilities. Reagan did.

  68. Hi GL,

    I'm just curious: have you been taking your meds lately? I mean that seriously. You set up a straw man and knock him down - it that what one must do these days to get blog hits? Seriously, stick to writing Spanish novels.

  69. Krugman believes government can deficit spend its way to prosperity by going to war.

    Anonymous believes,that "a bloodless solution is for the US Treasury to just send a fat check to every American adult. Some would use it for debt relief and some to compensate for years of suppressed interest rates on their savings. It would be a form of debt relief WHICH IS BIBLICAL people (Deuteronomy 15, Leviticus 25)."

    climm2 thinks that the "only way to save the country is to go "High Tech". Give hugh amount of money to universities and research facilities. Yes, I am talking about Sputnik. Just spend, spend and spend. In High Tech. Think about the prosperity it will bring in next decade. Invest in ourselves."

    Ecommunist Red Addie Absurdum (that's me) says, "Obama should give everyone in the country a government credit card to use as they see fit. The government could pay the charges by printing money and we'd all soon be out of debt and flying high. Krugman for president! Climm2 for Chairman of the Fed! Me for Secretary of the Treasury! Happy days are here again.

  70. Agree - No moral compass -- and relentlessly calculating for his next opportunity.

  71. I have followed Krugman's blog for several months and have never seen a pro war statement. When Krugman said Bush was right about something (war spending stimulates the economy), he quickly followed with a critique: "Of course, we could have gotten just as much or more stimulus by spending $10 billion a month on actually useful stuff– think how much domestic infrastructure could have been built or repaired for the cost of this miserable war. But the war was what we got."

  72. Gonnarila, next time you write at length about someone you might want to think about quoting the person a few times, as it's harder to get stuff dead wrong when one does that. In fact, I don't think you would have hit the Post button on your piece if you had bothered to do that.

  73. Isn't it "special"... as soon as the economy goes south, the liberals start bringing up the subject of WW2.
    Ah... those were the days...!

  74. Gonzalo's is a sane reaction to Krugman's repugnant moral bankruptcy... can't anyone come up with some new ideas?

    Is making money that difficult? Krugman thinks that 'a nice little war' might help him cash in in some way,and I would consider him a weak and unimaginative creature. Not impressed...

    Could we find someone less boring and predictable to talk about next? ;)

  75. Let's stipulate (for now) that Krugman doesn't ACTUALLY want the U.S. in a big war; he is using WWII as a model for the size and scope of 'stimulus program' he believes is necessary to reanimate the economy. (Krugman has also mused on the stimulative benefit, if only we could be attacked by space aliens - presumably, à la the movie 'Independence Day'.)

    The problem remains. Krugman is considered an oracle by the elite Left; when Krugman talks, the Administration listens. The Administration accepts his prescription for a giant stimulus is necessary to fix the economy - and secure Obama's re-election. Their preference would be for Congress to approve a massive increase in the debt, to fund a 'bet-the-farm' stimulus spree - one finally "big enough" to satisfy even Krugman. But this is not an option; the House will fight another increase in the debt limit, and the Administration dares not get into that fight, before the election.

    That leaves the less desirable option - a big, high-stakes war - as the only 'stimulus program' that the Administration can initiate unilaterally. They could orchestrate an incident, then a conflict, and gin up outrage at the selected enemy; the conflict would need be serious enough to provoke a sense of existential urgency, and willingness to sacrifice, in the country.

    A benefit of Option 2: even if it didn't "kick start" the economy in time for the election, people might be reluctant to "change horses", in the midst of an international conflict that threatens our survival. The whole situation would favor Obama's strength - sweeping, stirring, emotionally charged rhetoric, with a 'straw man' enemy.

    So, who might it be? China - it wouldn't be hard to stoke the latent feelings of resentment and vulnerability towards them. Iran - this might not be big enough on its own, but could easily widen to involve other players: Russia, Israel, Pakistan, India, China, the U.K.

    Krugman provides the liberal Left with the economic rationale and philosophical justification of taking us to war (as long as it's "big enough"), if that's the ONLY remaining option for obtaining 'stimulus'. The necessity of stimulus is beyond question. As with all liberal projects, this one would be beset with 'unintended consequences'. Krugman is the intellectual engine of peril, powering us toward them.


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