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Time to Rock Out Gold Bugs! Krugman: Most Economists, Including Nobel-Prize Winners, Are Idiots or Fools

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September 06, 2009 – Comments (4) | RELATED TICKERS: GLD , SLV

A blast from the past to teach some basic Economics. Turn it Up and dance naked gold bugs!

Since it appears Fooldom hates Paul Krugman almost as much as me, I render another good post from George Washington Blog Spot:

Krugman: Most Economists, Including Nobel-Prize Winners, Are Idiots or Fools

Austrian economist Ludwig von Mises said:

"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

Economist Hyman Minsky described a "Ponzi finance" system during prolonged expansions and economic booms. Misky said that speculative excesses create bubbles, triggering structural instability, then asset valuation collapse that turns euphoria to revulsion and market crashes. But modern economists ignore von Mises and Minsky's wisdom, and pretend that we can blow bubble after bubble, and cook up bigger and better Ponzi schemes, to ensure an economic recovery. Krugman does a reasonably good job of criticizing other economists, but does not admit that his brand of Keynesianism is worthless as well.

Read the rest here:

http://www.washingtonsblog.com/2009/09/krugman-most-economists-including-nobel.html

4 Comments – Post Your Own

#1) On September 06, 2009 at 9:56 PM, portefeuille (99.61) wrote:

Krugman is one of the few "voices of reason".

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#2) On September 06, 2009 at 9:59 PM, portefeuille (99.61) wrote:

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#13) On June 16, 2009 at 11:37 PM, russiangambit (98.77) wrote:
Krugman is known for excellent analysis, it is his conclusions that are sometimes questionable. I read his economics book, it is really excellent in terms of the analysis. But I think his political beleifs often interefere with his conclusions.

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(from here)

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#3) On September 07, 2009 at 2:07 PM, BravoBevo (99.97) wrote:

Good summer-ending reading on a long Labor Day weekend, but anyone going to the first link, Paul Krugman, Most Economists, Including Nobel-Prize Winners, Are Idiots or Fools, really should clicck through to read that actual substantive article written by Krugman:  How Did Economists Get It So Wrong?  

It is in the latter article where the real discussion and information can be found. 

Personally, I enjoyed this week's The New Yorker lead article titled Trial By Fire, which shares the true story of a father's conviction from the prosecution-alleged arson that killed his 3 daughters, the Texas death penalty, and scientific discoveries that discredit "old wives' tales" deployed by some arson investigators.

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#4) On September 08, 2009 at 2:43 AM, lucas1985 (< 20) wrote:

@portefeuille,

"it is his conclusions that are sometimes questionable"

We all have our cognitive biases. Sometimes Krugman gets loose with the facts to support his liberal point of view. However, most of the time his analysis is spot on and well supported by the available evidence.

@abitare,

"But modern economists ignore von Mises and Minsky's wisdom, and pretend that we can blow bubble after bubble, and cook up bigger and better Ponzi schemes, to ensure an economic recovery. Krugman does a reasonably good job of criticizing other economists, but does not admit that his brand of Keynesianism is worthless as well."

Modern economists ignore von Mises and Austrian economics because it's pseudoscience and hasn't evolved much in the last 70 years. On the other hand, Minsky (a post-Keynesian) is getting lots of attention as the neoclassical paradigm implodes under reality. Other economists are ready to toss New-Keynesianism into the dustbin. There's renewed interest in heterodox schools of thoughtecological economicsevolutionary economics, post-Keynesianism, behavioural economics (almost mainstream by now), Marxian economics, etc.

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