“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.” — Paul Krugman, New York Times (2002)
Paul Krugman is the dean of contemporary Keynesian economists. He won the Nobel Prize. He is a blogger for The New York Times. He is a professor at the Graduate Center of the City University of New York, which I regard as a third-tier institution academically, but he used to teach at Princeton until he got a better offer: $250,000 a year. He is being paid not to teach. I do not begrudge him this money, since I do not live in New York City, and my taxes do not support him. In my book, keeping him away from students is money well spent, as long as it’s other people’s money. Of course, if I lived in New York City, I would want him fired — a cheaper way to keep him away from students.
In 2011, Robert Murphy, who teaches economics at Texas Tech, offered to donate $100,000 to a charity of Krugman’s choice if Krugman would debate him in public. Back then, he was not employed by any university. He got people to offer to fund the donation. I pledged $1,000. When the figure hit $80,000, I recommended to Krugman that he not accept the offer. I listed 10 reasons.
Eighth, Murphy is really good in front of a crowd. Krugman cannot even work an audience in an elevator.
Ninth, Krugman doesn’t lose anything by not debating. Poor people will lose about $80,000 worth of food, but when you’re a full professor at Princeton, and you have been awarded a Nobel Prize, you don’t know any poor people. You have no understanding of what they’re facing. Besides, when push comes to shove, you’re a liberal, and the liberals only care about helping poor people with money that has been taxed from rich people.
In conclusion, Krugman would be a fool to debate Murphy. Krugman is no fool. Krugman is a self-interested, rationally calculating, totally economic man. That’s why he thinks formulas apply to the rest of this. It is not in his self-interest to get in front of a video camera and let Bob Murphy take him down three notches in full public view, and then see the video on YouTube an hour later.
Silence is golden. You only think it’s yellow because you’re color blind.
The figure went over $100,000, but Krugman never responded. He was wise. Gutless, but wise.
(For the rest of my article, click the link.)
