Ep. 110 Krugman Demands We Admit Our Mistakes, Embrace the Fed

29 October 2017     |     Tom Woods     |     5

Krugman thinks everyone who disagrees with him on monetary policy has been decisively refuted and ought to be ridiculed or ignored. The Fed has done great work, he says. He also insists that unlike him, we refuse to admit our mistakes.

That’s a lot of fodder for one episode. Enjoy!

Krugman Column

The Doctrine of Trumpal Infallibility” (October 23, 2017)

Contra Columns

Paul Krugman: Three Wrongs Don’t Make a Right,” by Bob Murphy
Can the Taylor Rule be a Good Guidance for Policy? The Case of 2001–2008 Real Estate Bubble,” by Mateusz Machaj

Related Columns

Paul Krugman/Larry Summers Inflation Memo (PDF)
On Not Learning, Continued,” by Paul Krugman

Books Mentioned

Meltdown, by Tom Woods
The Great Deformation, by David Stockman

Related Episodes (Tom Woods Show)

Ep. 247 Could the ‘Taylor Rule’ Have Prevented the Housing Bubble? (Mateusz Machaj)
Ep. 66 David Stockman on Krugman, the Fed, and the Future (David Stockman)
Ep. 63 Separating the Sheep from the Goats

Need More Episodes?

Tom and Bob have their own podcasts! Check out the Tom Woods Show and the Lara-Murphy Report.

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  • mary

    I tortured myself, clicked on the “On not learning” link and took a look at the comments. Smug doesn’t even begin to describe these people. Nowhere do they show any memory or concern for the infinite number of times when not only were Keynesian wrong, but the times when their policies plunged the economy into devastation or fueled horrendous inflation. Those things apparently never happened. Indeed, they don’t mention that Austrians warned about the Great Depression and the 2008 crash.

    No, Austrians are so stupid, and stubborn in their crazy theories.

    I would like to ask Bob a question, though. Why did you think that “price inflation” would spike significantly more than it did, when the Fed was sterilizing their monetary expansion?

    Consumer prices were clearly much higher than the official (read lying) stats, anyway, and much of the new money clearly flooded into investment assets, so maybe you weren’t so wrong after all.

  • The NAPster

    The one refutation of Krugman which wasn’t raised was the Misesian view that economic laws cannot be established or refuted by empirical data — because there can be no controlled experiments — but rather are the product of sound, deductive reasoning. So to point to being wrong or right based on how the economic data fell out over a chosen period is a “red herring.” Either your theory is sound or unsound.

  • Timothy M Laake

    One thing I’ve noticed over the years about the back and forth between Krugman and the ContraKrugs. Is that Woods and Murphy will occasionally point out those rare instances where Krugman says something they agree with or makes sense. On the other side, Krugman never acknowledges when Murphy is right, instead its like he plugs his ears like a child chanting “la la la, not listening…”

  • Bob Roddis

    Anyone can use this DEFINITIVE argument without attribution. Daniel Kuehn has demonstrated that the 1920 depression was caused by pulling the plug on the WWI spending and inflation binge. It was not caused by the market, although the market quickly recovered without Keynesian help. Krugman vouched by Kuehn’s analysis because it was based in part on a phony attack on Tom Woods as if Tom was unaware of what happened during the last year of the Wilson regime. Stroke of luck, anyone?


    Thus, there exists NO historical or evidentiary basis whatsoever to claim that the market fails or failed, and requires a Keynesian cure.

    Further, Hayek explained on TV in 1977 that the problems of the Great Depression, especially in the U.K. were holdover problems from WWI and taking the British pound off of gold. Thus, there is clear evidentiary and historical evidence of the Austrian analysis of these events and NONE from the statist side. Keynesianism is a hoax and its defenders are the equivalent of today’s “Russia stole the election” nitwits. There is no basis to claim that the market has failed or that markets lack or require “momentum” or “stimulus” when the problems such policies claim to cure are the CAUSE of the problems in the first place.


    FInally, no Keynesian in the galaxy has the slightest familiarity with Austrian concepts or analysis. They obviously know we are right. Otherwise, they would engage us and attempt to refute us. This NEVER happens.


  • Bob Roddis

    I fail to see how Keynesianism is anything other than a more complicated and impenetrable version of this: