Krugman's comeuppance

SARAH SANDERS SLAPS PAUL KRUGMAN FOR ‘GREAT RECESSION’ PREDICTION UNDER TRUMP

White House Press Secretary Sarah Huckabee Sanders once again took aim at New York Times columnist Paul Krugman for predicting global recession under the Trump administration.

The White House frequently has made fun of Krugman for his November 2016 prediction that “if the question is when markets will recover, a first-pass answer is never.”

The Nobel Prize-winning economist continued: “Putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news. What makes it especially bad right now, however, is the fundamentally fragile state much of the world is still in, eight years after the great financial crisis.”

Sanders linked to a New York Times article with the headline “We Ran Out of Words to Describe How Good the Jobs Numbers Are” and referenced the significant drop in the unemployment rate under the Trump presidency.

Obama's economic policies

Economists: Obama's policies 'fair' or 'poor'

You know that part in any of his speeches where he says "most economists agree with my policy"? Well, he lies.

They have come not to learn but to have confirmed what they already believe.

OCCUPY HARVARD? STUDENTS PROTEST CLASS BY FAMED ECON PROFESSOR BY STAGING WALKOUT

Harvard students and community members gather in front of John Harvard statue in solidarity with the Occupy Movement and Occupy Oakland (Image: The Harvard Crimson)

Greg Mankiw is a well-known Professor of Economics at Harvard University and a leading mind in the area of “new Keynesian” economics (a theory that tries to apply an understanding of individual behavior to the Keynesian school of thought). From 2003 to 2005 he was the Chairman of the Council of Economic Advisers for the Bush administration and he is also an economic adviser to GOP presidential candidate Mitt Romney.

Suddenly, he has also become the target of a Harvard “Occupy Speakout” demonstration. What did he do to draw this kind of attention? The Daily Mail headline sums up the accusations: “Did a Harvard economics class cause the financial crisis?”

In an effort to show their support for the Occupy movement, 70 Harvard students decided to stage and publicize a walkout of Mankiw’s EC 10 class.

In conjunction with the walkout, they also penned an open letter to Mankiw, claiming that “his conservative curriculum has influenced former Harvard students – including today’s policy makers and bankers – to bring about the financial crisis.”

One man did all that?

Watch the walkout (courtesy of The Harvard Crimson):

But their criticisms did not end there. The letter also claims that he “does not include primary sources and rarely features articles from academic journals, [so] we have very little access to alternative approaches to economics.”

Very little access?

The letter continues:

We found a course that espouses a specific – and limited – view of economics that we believe perpetuates problematic and inefficient systems of economic inequality in our society today.

We are deeply concerned about the way that this bias affects students, the University, and our greater society.

However, not all of the Harvard students were on board with the demonstration.

“When the students got up to leave, some of their peers booed,” reports the Daily Mail.

Once they had exited the classroom, the protesters gathered outside the building to continue their demonstration. One of the organizers, Rachel J. Sandalow-Ash, said to her fellow demonstrators: “Harvard graduates have been complicit [and] have aided many of the worst injustices of recent years. Harvard students will not do that anymore. We will use our education for good, and not for personal gain at the expense of millions.”

She also accused Mankiw of pushing a “strongly conservative neoliberal ideology.” She said, for example, that she thought lectures promoted conservative views against minimum wage, reportsThe Harvard Crimson.

Mankiw seemed more amused than upset by the protest.

“The class is very conventional economics. Adam Smith is pretty non-controversial among economists. But it can seem pretty conservative the first time you hear it,” Mankiw said in a recentCNN Money article.

“The economics profession has been implicated, by some people on the left, as a reason for recent developments,” he continued. “So I shouldn’t have been too surprised that we ended up one of the targets.”

The protesters disagree with his personal evaluation of the course.

“I think a more diverse viewpoint needs to be raised,” Sandalow-Ash said. “The problem is that in an introductory course, what the professor says is generally taken as fact,” she said.

Again, some students think that the characterization of Mankiw’s class as “biased” is unfair.

“The class is about pure economic efficiency. Ideology comes into play when we determine how to balance efficiency with social equity,” Harvard Republican Club Secretary Aditi Ghai said in a The Harvard Crimson report.

What does Mankiw say about his course?

“The goal of economics is to help people evaluate the inevitable tradeoffs that public policy entails,” said Mankiw. “While I do not share the specific views of the Occupy Wall Street movement, I am delighted to see students engaged in thinking broadly about social and economic policy. I hope that Ec 10 can help contribute to [that] ongoing discussion.”

Speaking of “ongoing discussion,” here’s a question: If an honest, truth-seeking student disagrees with a professor’s theories, wouldn’t it be better for the student to discuss and argue their ideas with the teacher rather than stand outside? It seems the former would be more conducive to helping the student arrive at the truth whereas the latter is mostly good for getting attention.

“I’m disappointed the students will miss the lecture,” Mankiw said. “I think the material is something they’d actually find interesting.”

Indeed they might have.

Fox declared the walkout a major “miss” on the students part.

Read the open letter here.

Thomas Sowell

Dissecting The Demagoguery About 'Tax Cuts For The Rich'

Left out of the argument is high taxes cause more unreported underground activity where no taxes are paid. The tighter the government noose the further people will stray from legal activities.

A myopic economist is taken to task

Joseph Stiglitz's 1% Fallacy, and Why We Can't Trust 99% of Economists

By John Tamny

The economics profession has suffered myriad black eyes in modern times, and with good reason. With its PhDs having been late on, wrong about, or authors of nearly every unfortunate economic malady to hit the globe in recent years, it's fair to say that economists rival the only class of people who actually listen to them anymore - politicians - when it comes to public scorn.

Economist Joseph Stiglitz apparently didn't get the memo. Possessed of hubris in abundance, along with an impressive lack of self-awareness, Stiglitz recently wasted ink and paper on a Vanity Fair rant about income inequality that was so full of falsehoods and misunderstandings that books could be written correcting his naïve droolings.

But since Stiglitz is doubtless green, and since this writer isn't interested in any association with him beyond a few corrections in online form, what's ahead will be somewhat brief.

To begin, Stiglitz makes the tired argument that over the last 25 years the rich have grown richer, with their income accounting for 25% of the U.S.'s total in concert with "control" over 40% of total wealth. He notes that 25 years ago, the top 1% could only lay claim to 12% of total income, and 33% of total wealth.

Of course it's what he left out that really informs such a discussion. Indeed, had he bothered to ask one of his research assistants to pull up a Forbes 400 issue from 25 years ago, he would find that the team picture is vastly different. Our top earners certainly are rich, but as a cursory glance at the most recent Forbes 400 reveals, most weren't members in 1986, thus exposing Stiglitz's suggestion of a stratified top 1% as stupendously false.

Not content to be wrong just once, Stiglitz continues to embarrass his profession with the absurd suggestion that the rich, for being rich, "become more distant from ordinary people." That's a nice thought, and probably true insofar as they usually live in nicer neighborhoods, but it's also a misread of how they got there.

As opposed to distant, the top 1% of today had a tendency to get there by virtue of having a very keen and close understanding of what the middle classes and poor desire. Whereas the other 99% doubtless looked on in awe 25 years ago as the top 1% enjoyed wireless cellular communication ($3,995 for a Motorola phone in 1983, not to mention roaming charges), personal computers (top end models in the ‘90s retailed for $9,000+ - and they didn't work very well), and cable access to the best television channels and movies the world over, members of today's top 1% achieved such status by making all three available at low prices to all Americans. Stiglitz complains that the lifestyles of the top 1% cause those "outside the top 1 percent" to "increasingly live beyond their means," but if he ever bothered to understand how fortunes are made, he'd know that a great deal of them are the result of making former top 1% luxuries quite common.

Stiglitz says the rich don't invest in the common good; as in things like education, healthcare and parks, but as a Columbia professor working in Manhattan, he surely knows that what he supposes to be true, isn't. To walk Columbia's campus is to see countless buildings donated, professorships endowed, and scholarships funded by the very people he says are heartless and distant. Farther away from Columbia, New York's advanced hospitals and well-appointed parks are a monument to just how generous the rich are. Notably, a great deal of wealth in the U.S. is the direct result of major healthcare innovations that improve and elongate our lives.

Considering those outside the top 1%, Stiglitz attempts to revive the similarly tired argument that "those in the middle have seen their incomes fall". What he leaves out is that the individuals in the middle today are not the same individuals as 25 years ago.

A good example would be Vanity Fair's grasping, social-climbing editor, Graydon Carter. A former railroad hand from Canada, and the living, breathing definition of the provincial suburbanite whose common hands he wouldn't lower himself to touch today, Carter, thanks to the very upward mobility that the U.S. offers, and which Stiglitz says is non-existent, now gets to live and pretend as though his origins were of the type that clearly impress him, and that his magazine worships. One would think that based on Carter's proud, and very American rise from humble beginnings that he might be more celebratory of the kind of mobility that he and countless other U.S. citizens continue to enjoy, but apparently desperate to be embraced by the dying fortunes that are largely absent from the Forbes 400, but that Vanity Fair elevates, Carter pays Stiglitz to trash one of the few economic systems in the world that someone of his background could have risen up in.

As for politics, Stiglitz views the political class as bought and paid for by the top 1% such that "big tax cuts are put in place for the wealthy", but if that were remotely true, why do so many of the richest 1% continue to financially support a president and party that are explicit in their desire to increase tax rates on the rich? This in particular should concern Stiglitz given the tautological reality that entrepreneurs can't be entrepreneurs without capital. Inequality bothers Stiglitz, the rich by virtue of being rich have the ability to grow wealthier by investing in tomorrow's entrepreneurs who are decidedly not in the top 1%, yet Stiglitz wants to tax away the very capital that would allow the poor and middle classes to knock the richest from their perches.

And not content to let markets decide winners and losers, Stiglitz seeks "collective action" from government to fix what he thinks ails us. An interesting idea, but one tried in the 20th century with disastrous effects.

Perhaps most comically, and horrifying at the same time given that Stiglitz is paid top 1% money to instruct college students, he notes that "Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few." His point there, if it can be believed, is that the alleged concentration of wealth stateside is akin to how wealth is distributed in the Middle East.

In truth, the stratified societies of the Middle East are exactly what will take shape here if governments, rather than markets, decide who gets what. Indeed, in the convulsing countries overseas the citizenry is to some degree up in arms because wealth has been achieved at gunpoint, as opposed to how it's achieved in the U.S. whereby consumers and investors choose who gets to be rich.

Stiglitz concludes his comical rant with the contention that the top 1% don't realize "that their fate is bound up with how the other 99% live." In truth, the top 1% knows what the other 99% wants intimately, as their brilliant fortunes reveal in living color.

If you understand economics it's impossible to listen to Obama without a stiff drink in hand

Why Can't Obama Do the Math On Jobs?

Obama’s Trumpeted Super Intelligence is Strictly a Myth

France

Unions stage protests against plans for retirement age hike

"On average French men retire at 58.7 years and women at 59.5, compared to an OECD average of 63.5 and 62.3, according to the body.

"It's a demographic problem. France is behind Malta as the country where we work the least," Budget Minister Francois Baroin told i-Tele."

Here is the death of another silly unviable progressive scheme. Remember when early retirement was proposed as the way to create more jobs? The socialists said that this scheme would result in full employment and better lives for all. The truth was it never really produced full employment, for most of the post 2000 years France had an unemployment rate of around 9%. It provided a good life for those lucky enough to be public employees while everyone else settled for less. Well, now that dream/scheme has fallen apart. France cannot afford the high level pensions. It's no different for Greece or California.

The progressive socialists always live in utopian fantasy where if you only believe the laws of economics or nature will move aside.

Krugman vs. Krugman

Arvind Kumar has collected a number of economists who disagree with the current rantings of NYT economist-hack-in-residence, Paul Krugman. All of the economists who disagree also happen to be Paul Krugman.

An argument that questions the credibility of economists in general is that there are a number of disagreements among many economists, and not all of them can be right at the same time. In the case of Nobel Prize-winning economist Paul Krugman, these disagreements come from Krugman himself, as he holds contradictory opinions on a large number of topics.

For instance, we learn that when deficits are high, interest rates are low. However, we also learn that when governments run up a deficit, interest rates rise. So deficits cause interest rates not only to go up, but also to go down! In 1985, Krugman argued that the higher national debt and spending were bad for people early in their careers, as they would have to pay for it later in life. Nearly twenty-five years later, he argues that the national debt is not a problem, as it never needs to be paid off. According to him, we merely have to stabilize the debt instead of repaying it.

In the recent past, Krugman has been selling the idea that it is the debt-to-GDP ratio that matters and not the debt itself, but this claim flies in the face of his open letter to Alan Greenspan in which he asserted, "...you obviously realize that the ratio of debt to G.D.P. is a highly misleading number."

Deficits and spending are not the only topics on which Krugman has opposed himself -- he has claimed that the Social Security program is unsustainable, and also that it is sustainable; he has criticized those who have suggested that the Social Security funds be used for investing in private funds, while he has also advocated the idea that the Social Security funds be used to invest in private assets. He once opposed government-run health care before supporting government-run health care, and he also opposed the bailout of Fannie Mae before congratulating the government for the bailout of Fannie Mae.

His arguments on the issues of labor unions and minimum wage, too, run both ways. Labor unions and higher wages cause unemployment, while labor unions create a stable middle class, and lower wages have a contractionary effect on the economy. Krugman has also argued that governments do not cause recessions and are not responsible for business cycles, as it is the Fed that is responsible for business cycles, but he also blames the Bush administration for the current recession.

Likewise, Krugman proffers the argument that nothing the government has ever done has had an impact on the economy, and he claims that government actions are like using a water pistol to shoot an elephant -- but he also claims that the "big government" has saved us. He also certified himself silly when he claimed that workers' fears of losing jobs to workers in China and India due to globalization aren't irrational. Earlier, he had declared that those who blamed the global economy for the loss of jobs were silly.

To be fair to Krugman, his inconsistent statements are not deliberate, but subconscious. It would be wrong to attribute malice to his arguments when they can easily be explained by his ignorance of the subject. That would, however, not excuse the Nobel Prize Committee, which awarded its prize to a quack. Perhaps Krugman himself can explain why he disagrees with himself all the time. Maybe he can come up with not just one explanation, but two, each contradicting the other.

Below is a collection of actual quotes from Paul Krugman with links to sources. The quotes are arranged by topic and are in pairs (with an additional quote in one case), with the two quotes in a pair making arguments for contradictory positions.

The rest here.