Ep. 166 Krugman’s Recent Q&A: His (Lousy) Answers, and Ours

1 December 2018     |     Tom Woods     |     7

Krugman took questions last week on Quora, and they spanned a wide range:

— Has Keynesian economics failed America?
— What are the causes of inequality?
— What will Trump’s long-term economic legacy be?
— Why haven’t wages increased alongside corporate profits?
— Would universal basic income work?
— Can Krugman refute “trickle-down” economics?
— and a whole bunch more.

In this episode, we critique Krugman’s answers and offer our own.

Q&A Session Discussed

Session with Paul Krugman

Contra Columns

Mark Thornton predicts housing crisis in 2004:
Housing: Too Good to Be True,” by Mark Thornton

Greg Mankiw on calling Reagan-era advisors “charlatans and cranks”:
On Charlatans and Cranks,” by Greg Mankiw

Bob (and his co-host Carlos Lara) explain why they think a stock market crash is coming:
Episode 64: Why Is the Stock Market So Shaky?

Book Mentioned

The Primal Prescription: Surviving the “Sick Care” Sinkhole, by Bob Murphy and Doug McGuff

Bob’s New Podcast


Bob’s Latest Book

Contra Krugman: Smashing the Errors of America’s Most Famous Keynesian

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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  • Greg Strebel
    • Intersnooze

      Does he even have what could be called a view? Certainly not an internally consistent one.

      It’s just rhetoric for power-purposes. It’s not educational. It’s anti-educational.

  • martinbrock

    How is a union negotiated wage not a market wage? Every corporation is a collective bargaining agent for its shareholders, and corporations are as heavily regulated as unions. Is the price of every product of a corporation not a market price?

  • JoeCushing

    You talk about the comments on the master class like it was something that happened in the past. I can tell you, the ads are still running and the comments are still 99% against Krugman. …and I’m commenting probably a couple weeks after you recorded this.

    I commented on a few of them when I saw them too. The first thing I did was share your site. Then I started saying things like, “Krugman is not an econimist anymore, he’s just a democrat. You can refute him with his own text books.”

    Then, after weeks went by, I changed again. I started questioning what continuing to advertise Krugman after such devastating comments meant for their reputation. I told them that it causes me to question the validity of any other course they offer.

    Still, the ads run.

  • JoeCushing

    One thing I never anyone point out about The Laffer curve is that its shape changes greatly depending on your time horizon. If you draw a Laffer curve and ask, what is the ideal tax rate to collect the most taxes today, the rate would be 100% or more than 100%.

    If you go out for one year, the rate would also be quite high but less than 100%.

    As you increase the time horizon, as you delay gratification, the peak of the Laffer curve shifts to the left of the graph, getting closer and closer to zero percent.

    My guess is that if you took it out 30 or more years, the peak of the curve would be about 10%. I’ve run a number of exponential growth curves analyses, in various scenarios, for investments. There is something about investments where you only draw out 10% of the procedes, that lets them explode while you continue to get more and more cash for yourself. I suspect if we applied it to taxes, a similar result would happen.

    If there was 30% more money in the economy for investment, that would be huge.

    Still, the Laffer curve ignores government spending, which is more important than tax rates. If the government does’t such $3 trillion dollars out of the economy through taxation but borrows it, instead, that’s still $3 trillion dollars that don’t get invested in productive assets.

  • Bob_Robert

    I started read Quora, and noticed a tendency for severe reactions from Keynesians to anything that smacks of reality. Regardless of the malice of pro-government-intervention comments, replies to them get flagged as “impolite”.

    I only saw one Krugman “answer”, and provided an answer myself which completely contradicted him while citing sources and the like. Wow, such hate in response.

  • Dan Monroe

    On the subject of Krugman’s inspiration to study economics, I recall that he was said to be inspired by Harry Seldon of Asimov’s Foundation series–a sinister source, tainted as it was by unbridled arrogance and desire for dominion.