The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

He’s Got a Ph.D. and a Nobel Prize, But . . .

Posted on | April 8, 2010 | 24 Comments

. . . Paul Krugman is still a moron about economics:

Free markets are “efficient” — which, in economics-speak as opposed to plain English, means that nobody can be made better off without making someone else worse off.

Voluntary exchange — the free market — is mutually beneficial. The guy at the convenience store has gasoline. I’ve got a car. I want the gasoline, the guy at the gas station wants $3 a gallon. I decide to buy, he decides to sell.

According to Krugman, one of the parties to this mutually-agreeable exchange is “worse off” due to that transaction, but he doesn’t explain how, nor can he. Krugman’s fixed-pie, zero-sum-game perspective is antithetical to the pursuit of economic truth.

Which explains why he’s working for the New York Times . . .

Category: Economics, New York Times

Comments

24 Responses to “He’s Got a Ph.D. and a Nobel Prize, But . . .”

  1. MrMaryk
    April 8th, 2010 @ 5:47 pm

    So I wonder, Mr. Krugman, with your salary – which is what I assume the market (the NYT’s readers )will bear – who is worse off in that exchange?

  2. MrMaryk
    April 8th, 2010 @ 12:47 pm

    So I wonder, Mr. Krugman, with your salary – which is what I assume the market (the NYT’s readers )will bear – who is worse off in that exchange?

  3. Steve In Tulsa
    April 8th, 2010 @ 5:57 pm

    Why does the link go to Building A Green Economy? I assumed it would be a fisking of Krugmen but it is unrelated.

  4. Steve In Tulsa
    April 8th, 2010 @ 12:57 pm

    Why does the link go to Building A Green Economy? I assumed it would be a fisking of Krugmen but it is unrelated.

  5. Steve In Tulsa
    April 8th, 2010 @ 5:58 pm

    Oh! It is by Krugman. So he is a greeniac now as well as an economic hoaxer.

  6. Steve In Tulsa
    April 8th, 2010 @ 12:58 pm

    Oh! It is by Krugman. So he is a greeniac now as well as an economic hoaxer.

  7. Estragon
    April 8th, 2010 @ 6:17 pm

    If Krugman’s thesis were true, there would BE no economy!

    Remember his real expertise is in the very narrow area of how the business cycle affects, and is affected by, international trade policies. It deals with complicated formulae and statistical mathematical concepts which have little to do with basic economics – of which he has long proven himself very ignorant.

    Krugman fans will, naturally, trumpet the fact that he “predicted” the bubble bursts of 2007-08, but that’s rather like noticing the stopped clock is right twice a day. The guy is ALWAYS predicting collapse of some sort.

    Even back in the Clinton Administration, when Krugman was crying gloom and doom as usual, James Carville observed, “Krugman is some economic expert – he’s predicted 19 of the last three recessions!”

  8. Estragon
    April 8th, 2010 @ 1:17 pm

    If Krugman’s thesis were true, there would BE no economy!

    Remember his real expertise is in the very narrow area of how the business cycle affects, and is affected by, international trade policies. It deals with complicated formulae and statistical mathematical concepts which have little to do with basic economics – of which he has long proven himself very ignorant.

    Krugman fans will, naturally, trumpet the fact that he “predicted” the bubble bursts of 2007-08, but that’s rather like noticing the stopped clock is right twice a day. The guy is ALWAYS predicting collapse of some sort.

    Even back in the Clinton Administration, when Krugman was crying gloom and doom as usual, James Carville observed, “Krugman is some economic expert – he’s predicted 19 of the last three recessions!”

  9. richard mcenroe
    April 8th, 2010 @ 6:57 pm

    Paul Krugman: “The Zero Sum Game is the Only Game in Town!”

    Bill Gates: “I’m sorry, did you say something?”

  10. richard mcenroe
    April 8th, 2010 @ 1:57 pm

    Paul Krugman: “The Zero Sum Game is the Only Game in Town!”

    Bill Gates: “I’m sorry, did you say something?”

  11. Joe
    April 8th, 2010 @ 7:13 pm

    I remember when Andrew Sullivan used to mock Krugman on a regular basis, until he found Cheney and Palin. Now Paul is his buddy.

    Now that is principled conservatism…well I am not sure what that is but it isn’t conservatism.

  12. Joe
    April 8th, 2010 @ 2:13 pm

    I remember when Andrew Sullivan used to mock Krugman on a regular basis, until he found Cheney and Palin. Now Paul is his buddy.

    Now that is principled conservatism…well I am not sure what that is but it isn’t conservatism.

  13. JeffS
    April 8th, 2010 @ 7:26 pm

    Paul Krugman is a moron, period. I’m amazed he graduated from high school, let alone get a PhD.

    The Nobel Prize doesn’t surprise me at all; those idiots in Oslo have been handing those to nuts, douchebags, and killers for years. A moron? Feh, par for the course.

  14. JeffS
    April 8th, 2010 @ 2:26 pm

    Paul Krugman is a moron, period. I’m amazed he graduated from high school, let alone get a PhD.

    The Nobel Prize doesn’t surprise me at all; those idiots in Oslo have been handing those to nuts, douchebags, and killers for years. A moron? Feh, par for the course.

  15. The Javelineer
    April 8th, 2010 @ 8:29 pm

    Krugman is wrong. However, “voluntary exchange — the free market — is mutually beneficial” only under certain conditions. Many free market advocates fail to account for those necessary conditions. (BTW, I advocate a free market and the conditions necessary for its benefits.)

    There is a free market case against outsourcing.

    In any case, Krugman really is a no-talent ass-clown.

  16. The Javelineer
    April 8th, 2010 @ 3:29 pm

    Krugman is wrong. However, “voluntary exchange — the free market — is mutually beneficial” only under certain conditions. Many free market advocates fail to account for those necessary conditions. (BTW, I advocate a free market and the conditions necessary for its benefits.)

    There is a free market case against outsourcing.

    In any case, Krugman really is a no-talent ass-clown.

  17. Joe
    April 8th, 2010 @ 10:34 pm

    Why spending cuts are difficult

    What is also missing from this fiscal year budget is debt interest. National debt interest is now greater than Department of Defense spending and almost as much as Social Security.

    Explain how we deal with that Professor Fudnuts Krugman? And “more taxes” is definitely not a correct answer.

  18. Joe
    April 8th, 2010 @ 5:34 pm

    Why spending cuts are difficult

    What is also missing from this fiscal year budget is debt interest. National debt interest is now greater than Department of Defense spending and almost as much as Social Security.

    Explain how we deal with that Professor Fudnuts Krugman? And “more taxes” is definitely not a correct answer.

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  20. SteveBrooklineMA
    April 9th, 2010 @ 6:53 pm

    Krugman is right in this case, at least in theory. He’s not saying people are not mutually benefitted under free markets. He’s saying you can not find mutually beneficial transactions *beyond* those that occur naturally within the free market system. The reason is clear: if an additional mutually beneficial transaction were possible, it would have already been made.

  21. SteveBrooklineMA
    April 9th, 2010 @ 1:53 pm

    Krugman is right in this case, at least in theory. He’s not saying people are not mutually benefitted under free markets. He’s saying you can not find mutually beneficial transactions *beyond* those that occur naturally within the free market system. The reason is clear: if an additional mutually beneficial transaction were possible, it would have already been made.

  22. nohype
    April 9th, 2010 @ 9:56 pm

    Krugman is right–he is using the normal econ-speak definition of economic efficiency. Think of it this way: a situation can be improved if someone can be helped and no one hurt. That situation is not efficient. When no improvement can be made, the situation is efficient. When can no improvement can be made? When any change that helps someone must harm someone else.

    If there are mutually beneficial trades that can be made, the situation is not economically efficient. After all the mutually beneficial trades are made, the situation is efficient because the only way to help one person would be to harm another.

  23. nohype
    April 9th, 2010 @ 4:56 pm

    Krugman is right–he is using the normal econ-speak definition of economic efficiency. Think of it this way: a situation can be improved if someone can be helped and no one hurt. That situation is not efficient. When no improvement can be made, the situation is efficient. When can no improvement can be made? When any change that helps someone must harm someone else.

    If there are mutually beneficial trades that can be made, the situation is not economically efficient. After all the mutually beneficial trades are made, the situation is efficient because the only way to help one person would be to harm another.

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