When I see “helpless” oldsters being beaten up by young thugs, I just have to intervene, at least when it comes to the wicked streets of New York’s economic theory. Paul Krugman’s vicious attack on former U.S. Representative Ron Paul, published in the New York Times on July 25th 2015, goes so far overboard that one has to wonder why Krugman would go to such lengths right now.
Before dissecting his attacks, let me tell you why I think he descended to name-calling against the Doctor and his supporters at this specific time. The reason is that Krugman senses the Keynesian debt house of cards is about to collapse, perhaps through direct knowledge, but more probably subconsciously. The causes of Krugman’s discomfiture are the Greek Crisis, which has shown that EU classical Socialist Keynesianism and Corporatism has failed miserably, the bludgeoning of the Chinese stock market as its economy implodes from debt, and the Puerto Rico debt crisis, which is an exact replica of what will happen to certain U.S. States when their State Worker Pension fund obligations and Government-school budgets bankrupt them, all combined with a possible current topping of the Dow. The quarterly tech media reports were pretty dismal.
The public knows that, except for stock investors, government contractors, corporate farm-subsidy parasites, large real estate speculators, and government employees, everyone else in America is getting ripped off by government through inflation and manipulated bank interest rates of near-zero.
What is rather disgusting about these attacks on poor, old, cranky, crotchety, decrepit Dr. Paul (get that man a wheelchair!) are first that they are ageist, and later become racist, which is really amazing for someone who calls himself a Liberal. (His blog in the NYT is called “The Conscience of a Liberal”. Hard not to laugh.) Specifically, Krugman calls Paul an “old man”, then a “crotchety old man”. He says that Paul’s supporters are predominantly white men who made their money for themselves and don’t want to give it “to Those People”.
Now, it should be pointed out that Krugman was probably playing with the title of Hemingway’s “The Old Man and the Sea”, when he entitled his hit piece, “The Old Man and the CPI”, pandering to the Litterati who frequent the Times. But still, why refer to Paul’s age except to try to create a negative image? The Hemingway-allusion title might be catchy, so Krugman wasn’t against exploiting a little age discrimination by belittling the elderly if it grabbed him readers at the NYT. Anything for a “blog bluck”.
However, when he calls Ron Paul a “crotchety old man” because of his economic views, and then compares him to Bernard Madoff, the swindler and a major Federal felony criminal, it seems like Krugman is going so far overboard that you have to question his soundness, and the only reason I can see him doing this is that his subconscious native instincts tell him the markets are about to collapse, or start a prolonged bear trend. This will show his whole Keynesian Theory as being rotten. Remember, Krugman and almost all Economics professors at U.S. Universities are Keynesians. They have a huge vested economic interest in having the theories they propound accepted as valid by the general public, or they would lose their prestige, their sinecures, and their huge salaries. They are very much like priests in an organized religion, who are raking it in from the pilgrims, year after year, and don’t want anyone to point out that they are worshiping a false god made of stone. And why attack a minor figure like Ron Paul so viciously, when his economic views are held by only a small percentage of usually contrarian investors? Ron Paul has such a miniscule influence on American economic thinking compared to Krugman that you have to wonder why Krugman has to break a butterfly on a wheel.
Krugman also tries to advance the idea that because some of Ron Paul’s predictions haven’t panned out in his view, that Paul’s Austrian Market gold standard principles are invalid. But that just may mean that Paul is a lousy prognosticator or market timer, although Paul’s views obviously have been correct, as I will later show.
While I agree with Dr. Paul’s Austrian Economic view almost entirely, I have thought for years now that he was (and is and will be) absolutely wrong on the dollar for the next few years. We recently saw the dollar index soar from 80 to 100 in less than a year.
I also thought that this strengthening dollar would bring the metals and other commodities back down drastically, wrecking those bogus socialist authoritarian economies like Australia, Canada, the EU, and the BRIC “miracle”. And that is precisely what is happening. So I disagreed with Paul on his predictions, but that didn’t invalidate his principles. Krugman also misleadingly attacks Paul’s goldbug view in combination with his Austrian Economics, as if they were necessarily connected. But there are many Libertarians, or Libertarian Republicans, who would agree with Paul on most issues, but would keep a Federal Reserve, like Milton Friedman, or George Phillies. There are even a few Austrians who think you could have a Federal Reserve with a fiat currency if that currency were strictly controlled as to the quantity issued. Others think the Fed could be run by a computer that would be completely objective. There are also those hard moneyists who feel money could be backed by some commodity or combination of commodities other than gold. So Ron Paul’s gold view isn’t universal among Austrian Economists although it may come close.
And Krugman, a Nobel Prize winner, in trying to belittle Dr. Paul’s economic views, doesn’t mention that he is belittling the exact same views as those of another Nobel Prize Winner, Friedrich Hayek, whose views were identical to Dr. Paul’s. Why is Krugman’s Nobel Prize more valid than Hayek’s?
However, not only does Krugman try to create a propaganda image of Dr. Paul with his “old crotchety cranky” adjectives, but he also attacks Ron Paul’s supporters as predominantly white men, and even “crotchety old cranky white men” who have made their own money. Now that is curious, because most of the people showing up at Paul’s rallies when he ran for President were young whites, who probably had very little in the bank, and a lot of people who wanted pot legalized (and it is and wouldn’t have been if Ron Paul hadn’t been more “Liberal” and outspoken on this issue than every Democrat and Republican in Congress for the last 27 years, except for Libertarian Republicans like roaring Dana Rohrabacher.) If so-called Liberals like John Kitzhaber, Bill Clinton, and Barack Obama — Krugman’s men — had their way, they’d still be throwing our fellow Oregonians in cages for having a plant in their pocket.
Now let me say that I supported Ron Paul just because I had to grow up under Fascists like Democratic War Criminal Lyndon Napalmer Johnson and Republican War Criminal Richard Stinkhouse Nixon (who, you’ll recall, proposed a Guaranteed Annual Income through his Negative Income Tax — pure Leftwing Socialism).
Later, reading Hayek’s “The Road to Serfdom”, I realized that millions of young people of my generation were disemployed by the minimum wage law, making it almost impossible to find full time employment unless one aligned oneself with a large corporation. Youth was also impoverished by the entire maze of restrictions on the individual put in under the Roosevelt Raw Deal, like involuntary social security depredations on ones paycheck. In other words, I came to see that what ruined the lives of my generation, and those in front of us and behind us, was Keynesianism and collectivist government.. At that time I was not aware that minimum wage laws not only discriminated against the young, but also disproportionally against Black youths. Department of Labor statistics from the time of the first minimum wage law, and later increases, bear this out, for each time it was raised, the Black teenage unemployment rate soared much more than the White teenage unemployment rate. The minimum wage is a weapon against Blacks, youths, and other minority youths like Latinos and Asians. It is a weapon of the racists.
Krugman also claims that Ron Paul’s Austrian School supporters would never listen to Krugman’s theories anyway, but I began studying economics by reading Heilbroner and Thurow’s “The Economic Problem”, which is a famous Keynesian textbook. It’s because we know Keynesian theory and have seen it fail, and thought out its authoritarian implications, that we can so readily see the validity of Austrian Economics.
But let’s look at Krugman’s specific claims about Ron Paul defrauding investors a la Bernie Madoff. He claims Paul has made the same claims since 1981. True, but Paul has explained many times that Austrian Economics, while it can explain what will happen, cannot predict when it will happen. Personally, I think Paul overestimated the extent of inflation that would occur by now, but not by much. When we saw Reagan deficit-spending like a drunken sailor, we figured massive inflation was just around the corner, but it took decades more to really show up, so that a pound of apples went from 29 cents to $2-3. And that was because under Reagan, the Federal Reserve was not so insane as to drive interest rates to near-zero as they have now done. It seems (and seemed) that people will use fiat currency willingly as long as interest rates are about 2-3% above inflation. Pay people 5-6% on savings, and have an inflation rate of 2-3%, and things will go along like that for years, but triple and more than triple the cost of food, gasoline, rents, by printing massive amounts of paper currency while suppressing free market interest rates, and you’ll have massive inflation in food, rents, medical costs, and chaos.
Krugman and Obama can put out their obviously bogus CPI figures, which exclude rent, and their blind followers will believe that inflation is 2%, but the rest of the middle class and working class knows that they have sustained a massive decrease in their wealth and the purchasing power of their labor during the Bush-Obama Keynesian years, and no propaganda from a well-paid professor in Bob Dylan’s “old folk’s home at the college” is going to convince those young poor whites and potheads that they’re all well-healed cranky crotchety old crackers, when they can’t get a minimum wage job unless they work for the major brain-deadening corporations. Krugman’s image-making propaganda is lying again here: Doctor Paul’s supporters were predominantly young, as can be verified by watching the videos of his 2008 and 2012 public campaign events.
So let’s finally look at the factual distortions and lies that Krugman puts forth. He claims that Ron Paul has been saying the same thing since 1981. True, but what if someone has listened to Paul’s advice and bought gold when gold was $254 during that period, or anytime during gold’s long rest between $360-400 during the early 1990’s? He could have sold that gold later for $1923, over a 700% increase, while he would have been earning Krugman’s 1-3% in the bank during those days, and now would be earning less than 1% if he had stayed invested in fiat currency dollars. How long would it take you to make 800% at the rate of 1-2% bank interest? Krugman was so wrong, and Ron Paul so right on this issue, that Krugman’s attack smells of hysteria. Anyone looking at the financial history of the last 30 years can see that. In fact, Krugman actually writes, “You can point out that they would have done a much better job at investing if they had listened to the MIT gang.” An incredible statement in the light of recent economic history.
Krugman is a sad example of a high priest of the Keynesian Religion, seeing his stone god destroyed by Greece, China, Puerto Rico, and Detroit, who must lash out at the soothsayers of economic truth when the Keynesian Religion that pays him well is losing credibility. His caustic attacks on a “old crotchety cranky white Ron Paul” show that Krugman is losing his mental balance.
It’s obvious that Paul Krugman (German for “tankard man”) is no “Klug Man” (German for “clever man”). When the Keynesian wine goes in, wisdom goes out.
-Paul Grad, Vegan Libertarian