Krugman Attacks the Austrians, And Gets Crushed Again
Krugman's blog. Enjoy the responses in the comments section. I've never seen so many excellent defenses of the Austrian School in a NYT blog.
And yes, Krugman still can't comprehend Austrian Theory of the Business Cycle. For Krugman, there is no Capital Theory. (Keynes famously bragged that he had separated Capital Theory from economics. In other words, it didn't fit his model so he brilliantly discarded it.) To Keynesians, all money is a homogenous lump and has the same effect everywhere. So if I say, "you are altering the structure of production" it does not register with them. Again, it's like trying to teach a witch doctor how to heal an infection. You're both doctors, so to speak, but it's a completely language.
I wish I had more time right now to go into this. It's always the most fun when the Emperor announces that he has no clothes.
The sad thing is that Robert Murphy and David Gordon already responded to this attack last time, sliced it and diced it, and Krugman refuses to acknowledge it or respond to Murphy's rebuttal.
The Importance of Capital Theory
Austrians Can Explain the Boom and the Bust
Hangover Theory: How Paul Krugman Has Misconceived Austrian Theory
Notice how all 3 of these responses are written before Krugman's blog today, and yet he clearly hasn't read any of them.
I suppose it's ok to be wrong. After all, if Krugman wasn't wrong he wouldn't be working for the New York Times.
David in Qatar