Sorry, Mr. Krugman. It Wasn't Me.

Walden swimmer's body found

THE ASSOCIATED PRESS

CONCORD — Authorities say they have found a body in Walden Pond that may be that of a 63-year-old Lincoln man missing since he went swimming there on Sunday.

Mr. Krugman's Science As Not Even Wrong

The phrase "not even wrong" bears a peculiar relevance to the work (which takes the form of disseminated confusion) of Paul Krugman, Ace Economics Columnist for a Great Metropolitan Newspaper.  "Not even wrong" is usually attributed to the physicist Wolfgang Pauli, that brilliant, acerbic nuclear researcher noted for his marked inability to suffer fools gladly.

The phrase apparently originates with physicist Wolfgang Pauli, who used the phrase (in the form "Das ist nicht nur nicht richtig, es ist nicht einmal falsch!" — "That is not only not right, it is not even wrong!") to describe an unclear research paper. Pauli was known for his detestation of sloppy writing and arguments, and for his somewhat "colourful" objections to such things.

"Not even wrong" might be further defined to refer to work that is so far off the mark, or so conceptually unfounded, that it does not even eliminate a possible direction for further research or analysis.

In the case of Mr. Krugman's Science, the field of macroeconomics (a category in the more general field of economics to which Mr. Krugman came lately, when it was obvious that only The Big Picture concerning the American malaise was going to hold the public's attention), I have generally felt that the effort to summarize, or diagnose, the problems with all modern economies within a framework of diagrams, sketches and occasional forays into pretentious mathematics (all heavily jargon-laden though they may be) is somewhat less than useless. This is particularly true of Mr. Krugman's brand of New Keynesian balderdash.

Sometimes Mr. Krugman will write this kind of thing on his blog, "The Conscience of a Liberal:"

The case of the euro is a bit different: I was very pessimistic about the strategy of austerity and internal devaluation, which I thought would have a terrible cost — and I was completely right about that. I also guessed that this cost would prove politically unsustainable, leading to a crisis for the euro itself; so far, at least, I have been wrong.

My economic model worked fine, my implicit political model didn’t; OK, so it goes.
Now, learning from your mistakes can cause trouble, especially on TV, where people use “In 1996 you said A, and now in 2013 you say B. Gotcha!” as a substitute for substantive discussion. But it’s what you’re supposed to do.

So, have any of the signatories to that 2010 letter admitted being wrong and explained why they were wrong? I mean *any* of them. Not as far as I know.
And at that point this becomes more than an intellectual issue. It becomes a test of character.

Mr. Krugman does this sort of thing a lot.  He seems to suffer from a clinical case of self-righteousness. Usually self-righteousness, the arrant tendency to brag about one's character or integrity, is a sign of underlying pathological deviousness. As the kids might say, "Who does that?"  The funny part of the euro volte-face which Mr. Krugman describes above is that it only came about after Niall Ferguson, in his three-part takedown of the Great One, pointed out the error of Mr. Krugman's arguments about the imminent demise of the euro.  This is really something to behold as far as Mr. Krugman's uneasy relationship with honesty is concerned.  He is now bragging about his candor and forthrightness in admitting an error which he only admitted because he was called out on it.

Who does that?

Well, I admit that Mr. Krugman plays the role of Dr. Moriarty to my Sherlock Holmes at times, and in his favor, I concede that if I were to choose between the Two Great Ichthyological Schools in the Great Economics Schism (Freshwater [Univ. of Chicago, primarily]) and Saltwater (Ivy League, Berkeley), I would side with Mr. Krugman and his fellow Keynesian disciples.  At least they're sort of realistic, unlike the "efficient market" maniacs of the Freshwater crowd, who posit all sorts of nonsense about the rationality of people, and perfect information, and the rest of it.

Although as Nasim Taleb, the Black Swan fellow, has noted, it is macroeconomics in general which is the big problem.  Macroeconomics has no more scientific validity than sociology or fourth-grade social studies, but it has been elevated to a guiding discipline in the conduct of national affairs, with disastrous results, because these people really have no idea what they're doing, and the values they champion, almost to a person, are the values of the Chazzer Economy - the unsustainable growth paradigm from 50 years ago. It is more of a cult than a science, and the academics who rant and rave at each other about who's right and who's wrong are engaging in a polemical food fight with non-rigorous arguments which have about as much chance of producing a clear winner as a faculty lounge debate about whether Hemingway or Faulkner was the better writer.

To give you an idea of the vaporous nature of Mr. Krugman's positions, for example, consider now his most recent column on Monday, November 18, where Mr. Krugman, dazzled by a presentation by Larry Summers at the IMF conference, opines that the current slump may be "permanent."  Very interesting. Yet Mr. Krugman just wrote a book, which he hustled all over the country, called "End This Depression Now." I don't think it made much of an impression, and anyway it's just a compilation of the daily drivel from the blog and columns, but it raises an interesting question: if Mr. Krugman has had the answer all along to the stagnation of Western world economies (which he often brags that he does), then how can this slump be "permanent?"

Mr. Krugman's case is especially egregious, because the prominence of his position and influence, and his self-proclaimed "liberalism" (which consists primarily of being a staunch supporter of the big entitlement programs, just like AARP) probably does allow him to influence national policy, even if not to the extent of his own fevered imagination.  And where Mr. Krugman wants the country to go is in the direction of Big Time Consumerism once again, to pump up "demand" so that everyone is employed doing something or other and spending lots of money on this and that.  Anyone who complains about this mindless approach and its disregard of such minor details as the possibility of near term extinction of human life from climate change, or overpopulation, or overuse of arable soils, or running out of freshwater (and not the academic kind) is rebuked by Mr. Krugman as indulging in an analysis of the economy "as a morality play," one of his most frequent (and boring and trite) ripostes.  Money for Social Security, for Detroit bail-outs, for Wall Street banks, for Predator drones or new aircraft carriers, for new highways, it doesn't matter.  The spending is the thing because we've got to get this (stagnant) economy moving again.

In this way Mr. Krugman is the perfect mouthpiece for the status quo and for the Summers/Clinton/Rubin style of Democratic "liberalism."  He's an Insider, who is careful never to tarnish his credentials as a DLC-style moderate.  He might praise Occupy Wall Street, but you won't find him down there on the street itself, the way that Steve Keen (an Australian economist) has done.  Maybe it's true, as demonstrated by numerous careful analyses, that Quantitative Easing is simply a wealth transfer mechanism to banks already bulging with liquidity force-fed to them by their main enabler, the Federal Reserve.  Nevertheless, Mr. Krugman remains an ardent champion of QE, even if it has no ameliorative effect on unemployment, even if it does nothing for the American commoner.  (I've often thought that Mr. Krugman should disclose his stock portfolio; with that, and preexisting knowledge of his three houses, we might draw a finer bead on some of his undisclosed motivations about bubble-blowing).

So I've been looking for ways to bring about a more thorough-going criticism of Mr. Krugman's Science, and in reading Lee Smolin's excellent Time Re-Born, I thought I might have found an analytical lens.  Mr. Smolin is a physicist at the University of Toronto, an egaging writer, who has set himself the task of proving that Time is real, and not an "illusion" or hypothesized dimension.  And in his description of "physics in a box," I thought I saw a way through to a broadside against the unscientific.  Which I will get to.

Mr. Krugman's Science: Ace Economist Discovers America

Brought to you by Peet's French Roast, pressed in a French press in a thoroughly French way...

If I were Paul Krugman, I would immediately offer a profuse apology for the hiatus in blogging.  So luxurious is Mr. Krugman's sense of self that he warns his vast herd of gullible lemmings when he knows that his busy schedule will compel him to be away.  He advises us to "be patient."  We will all have to stagger around in a confused state until he returns to his Conscientious Liberal post, slaps up a couple of graphs, and makes everything clear again.

Although yesterday...yesterday, Mr. Krugman did something rather strange. In commenting at length on a presentation Larry Summers made to the International Monetary Fund, that organ of imperialistic Neoliberalism which used to be very successful in transferring the material resources of the Third World to Wall Street and other Western capitals, Krugman let slip that the American economy is permanently fried.  As in:

"So how can you reconcile repeated bubbles with an economy showing no sign of inflationary pressures? Summers’s answer is that we may be an economy that needs bubbles just to achieve something near full employment – that in the absence of bubbles the economy has a negative natural rate of interest. And this hasn’t just been true since the 2008 financial crisis; it has arguably been true, although perhaps with increasing severity, since the 1980s."

For Mr. Krugman, Ace Economic Reporter for a Great Metropolitan Newspaper, this insight is stunning.  He needed Larry Summers, a genuine Big Thinker, to point it all out for him, and then Krugman, of course, had to muddle the picture with his usual jargon and obfuscation - the stuff about "negative interest rates" and, elsewhere in his fumbling analysis of the Summers take, his usual "liquidity trap" ....claptrap.   Mr. Krugman lives in constant terror that his readers are going to see just how obvious it is that the American economy is stuck in what Summers calls a permanent "secular stagnation."  If people begin to see that, then Mr. Krugman's shamanistic incantations about "Keynesian stimulus" and deficit spending and the rest are going to be seen for the futile, dangerous acts of lunacy which they are.  If the American economy isn't going to recover to its robust, humming 1964 essence (which is Mr. Krugman's apparent vision), then Mr. Krugman and the other mainstays on the New York Times Op-Ed pages (the Council of Morons consisting of David Brooks, Bill Keller, Tom Friedman and Mr. Krugman himself) have become completely irrelevant. Worse than irrelevant, because the "globalization" cheerleading of guys like Mr. Krugman and Mr. Friedman have assured America that it now has nothing left to fall back on.  Without the housing bubble, for example, the Planning (parties & weddings) & Tanning (one's own skin, not cowhide) Economy cannot reemerge, because the discretionary income to propel it is all gone.  American Commoners are just scraping by, saving their money to pay for relentlessly high gasoline and food prices, with only 62% of the working age population actually employed in some kind of job.

You have to work at places like the New York Times and Princeton to miss all of that. If you're an unemployed auto worker living in Detroit, you figured it all out a long time ago, and the wonders of the Flat Earth have been lost on you throughout this "secular stagnation."  Indeed, my reaction to Mr. Krugman's epiphany is identical to the young Alvey Singer's to the perennially-worng Ivan Ackerman. Forehead slap!

It is gratifying to see that others are coming around to the truth about Mr. Krugman.  For example, in a long piece on Counterpunch, Paul Craig Roberts muses about the possibility that Mr. Krugman might be a "voodoo economist." 

"Krugman has a social conscience for which I respect him. I am confident that he would agree with me that economists who lack a social conscience do more harm than good.  In my opinion, for what it is worth, Krugman does not understand or realize the way in which jobs offshoring has changed the US economy, the position of US workers and employees, and the efficacy of economic policy.

As I have often explained, when US corporations pursue higher profits at the expense of US labor by offshoring the jobs that produce the goods and services that they sell to Americans, they separate the US labor force from the incomes associated with the production of the goods and services that they consume.  Eventually, this destroys the consumer market.  According to the Census Bureau, American median family income is 9% less than a dozen years ago. This means that what once was spending power of American consumers is now the paper wealth of the mega-rich.

Keynesian stimulus policy works when the jobs from which people have been laid off still exist. By boosting aggregate demand for goods and services, the stimulus puts people back to work.  But if the jobs have been moved offshore and the factories closed, the jobs no longer exist.  No stimulus policy can put the unemployed into jobs that no longer exist.

Krugman has not come to terms with this basic fact.  Nor have the majority of economists. Economists assumed that new and better jobs would take the place of the offshored ones. However, as I am forever pointing out, there is no sign of these jobs in the employment data.

Most economists believe that jobs offshoring is free trade and that free trade is beneficial, which simply demonstrates their confusion.  Jobs offshoring is based on the pursuit of absolute advantage, the antithesis of comparative advantage that is the basis of free trade."

Well, Paul Craig Roberts is maybe new at this game, and there is a tendency at the outset to pull one's punches when dealing with Mr. Krugman, who, after all, is a Liberal and must therefore be a force for good.  In time Mr. Roberts will get over this misconception and will not bother with the obeisance and flattery.  He will see that the American Commoner is the very least of Mr. Krugman's concerns, and in time Mr. Roberts may even begin to appreciate the effect of the finite nature of Planet Earth's resources, and the unsustainable ecological path we are on, and how this "factor" precludes the "recovery" of any Western economy, now and forever. 

One cannot hope for everything at once.