Paul Krugman Gives Me a Rash: A Rant

There are very few things that get me angrier than Paul Krugman’s Nobel Prize-winning economic analyses.  Seeing people post his articles on Facebook and then worshipfully extolling the virtues of Keynesian economics is one of them.  I have to restrain myself from verbally attacking people on a personal level.  That is how much I can’t stand Paul Krugman.  Reason goes completely out the window.  Furthermore, I have noticed a pattern among these posters, and I now assume that they are all career students or professors who have never had a real job because, well, most of them are.  Call me judgmental.  It won’t hurt my feelings.

I can never quite decide if Paul Krugman is secretly a genius who knows that he’s writing pieces that are full of b.s., or if he legitimately believes what he’s saying.  I also can’t decide which option is worse.  Whatever the case, he seems to offer overly simplistic, one-sided solutions delivered with a healthy slathering of unclear language.  Because being obtuse makes you smarter…

I’m not going to cite any particular Krugman articles on here, since I’m filing this under “Rants,” and I’m going to speak purely about my personal opinion.  I feel like every Krugman article I read comes back to one central theme: we aren’t spending enough money.  Every time I read a Krugman statement that amounts to an admonition that we should be printing/spending more money, my left eye twitches and an overpowering urge to punch someone repeatedly in the face takes over.

Putting the fancy economic analysis aside, let’s address this with plain common sense.  How in the world is it possible to spend oneself into prosperity?  I’m sure Krugman has offered some explanation somewhere about spending oneself into prosperity, but I honestly can’t think of an instance in the last century when that has happened.  If any of you readers think of one, please do post it in the comments section.  Some folks will try to use WWII as an example, but the depression didn’t end until the post-war era, so that one falls flat for me.  Lord knows the New Deal didn’t do the job.

I am probably (hopefully) being somewhat extreme in my rantings, but I truly feel as though Krugman is constantly advocating greater and greater debt, saying that it generally doesn’t matter.  Just keep spending.  Keep driving consumption.  Spend, spend, spend.  Consume, consume, consume.  Um, isn’t that what most liberals/progressives/lefties/whatever trendy name they’re using now are generally against?  Consumption?

The on-the-books US debt right now $15.4 trillion.  That doesn’t include Fannie and Freddie, nor does it include the Fed’s off-balance sheet transactions.  I shudder to think what it would look like, were those additional items added to the computation.  As though $1 trillion isn’t a number too big to grasp!

The ever-increasing money supply can only have one final result: hyperinflation.  As I’ve stated previously, there are various reasons why hyperinflation hasn’t hit us yet.  For one thing, US and international banks are still sitting on a lot of that capital that is just floating around out there.  For another thing, it is being used outside the US to settle international transactions.  Again, this is why the US dollar’s status as a reserve currency is so important.  Were we to lose that privileged status, it wouldn’t be long before those dollars started making their way home.  There is only so far down that the Fed can drop interest rates, which seems to be Krugman’s other solution for every ill our economy faces.  If the money supply were suddenly contracted and interest rates were to go up, it would certainly make debt repayment a lot more interesting for the US government!

Whatever the case, I have caused myself a whole evening of stewing and mumbling to myself just for reading two Krugman articles.  I’m convinced that he has never taken the time to read and even passingly consider the Austrian business cycle model.  He laughingly brushes it off, but I have yet to see him mount a convincing argument against it.  I suppose he doesn’t have to.  He already has masses of slavering fans who adore him and think that his ideas about spending a seemingly endless supply of cash, soaking the rich, and redistributing the wealth are incomparable genius.  Maybe I’m the one who needs a reality check, but I don’t think so.

Taxation and wealth redistribution is still legalized plunder.  Creating an endless supply of cash with no backing will eventually lead to a hyper inflated currency.  Go ahead.  Ask the South Americans.  The Romans.  The French.  There are many, many examples throughout history of such a thing happening, so every time I hear a Keynesian say that it can’t happen here, I have to shake my head and remind them that it has, it can, and it could.  That’s usually about the point where someone says, “Oh, aren’t you a libertarian?  Yeah, you’re one of those Ron Paul supporters,” and they think that solves the matter.  I’m wrong, and they’re right.  I suppose if it helps them sleep better at night.  For my part, I think Krugman’s articles make far better bonfire starters than reality-based economic reading material.