Krugman debates Ron Paul

[ProSense]

Don’t Know Much About (Ancient) History

The things I do for book sales. I debated, sort of, Ron Paul on Bloomberg.Video here. I thought we might have a discussion of why the runaway inflation he and his allies keep predicting keeps not happening. But no, he insisted (if I understood him correctly) that currency debasement and price controls destroyed the Roman Empire. I responded that I am not a defender of the economic policies of the Emperor Diocletian.

Actually, though, appeals to what supposedly happened somewhere in the distant past are quite common on the goldbug side of economics. And it’s kind of telling.

I mean, history is essential to economic analysis. You really do want to know, say, about the failure of Argentina’s convertibility law, of the effects of Chancellor Brüning’s dedication to the gold standard, and many other episodes.

Somehow, though, people like Ron Paul don’t like to talk about events of the past century, for which we have reasonably good data; they like to talk about events in the dim mists of history, where we don’t really know what happened. And I think that’s no accident. Partly it’s the attempt of the autodidact to show off his esoteric knowledge; but it’s also the fact that because we don’t really know what happened — what really did go down during the Diocletian era? — you can project what you think should have happened onto the sketchy record, then claim vindication for whatever you want to believe.

It’s funny, in a way — except that this sort of thinking dominates one of our two main political parties.

http://krugman.blogs.nytimes.com/2012/04/30/dont-know-much-about-ancient-history/

Video: http://www.bloomberg.com/video/91689761/

Yikes!

[napoleon_in_rags]

1. I think everybody is wrong.

The issue is gold standard can't permit growth of economy. Basically gold becomes worth more and more, which means the most profitable thing is to sit on it, which shuts down the economy and causes disaster.

But the 20th century economic models are screwed. Abundant cheap energy and unlimited growth are the axioms they run on. So in this sense, the gold bugs have a good point about the bubble breaking at a certain point. Gold's value is not dependent on endless growth, so when growth becomes impossible, they have something, because inflation will run wild when economic output is too stunted to follow money production.

I'm not an economist, but I feel like this should be an exciting time for them: The world is waiting for a new model, a cyclical model which can describe collaboration and wealth creation in a world with finite but reusable resources.

[MrScorpio]

2. That wasn't a debate...

That was a Ron Paul rant

[Blue_Tires]

29. that's all he knows how to do...

[Recursion]

3. Diocletian ended the crisis of the third century and let the Empire survive another century

He's on my top-10 list of emperors.

[joshcryer]

4. pwned

Fuck Ron Paul.

[mmonk]

5. I might have Diocletian coinage.

I have coinage from quite a few Roman Emperors.

[JoePhilly]

6. He just explained 80% of whatever Georege Will says too.

Will does the same thing every Sunday.

If we watch the Sunday shows and George Will is on, my son and I cheer anytime Will references some obscure historical event, using it to somehow prove his nonsensical point. He's rarely accurate, but you have to go look it up to actually determine that he's full of BS. Which is why he does it.

Very common right wing pundit tactic. Its part of their "change history" approach to debate. Its how we get their mythical view of Ronald Reagan.

And Ron Paul does the same thing. He just makes crazier references.

[politicaljunkie12]

7. debate

There are solid arguments for and against using some form of monetary standard. In a perfect world the Fed works as a safety net for failing economies and does a pretty good job at helping an economy recover during a recession (much faster than when you have a gold standard). However, in an imperfect world, the Fed is used not only as a safety net during an economic crisis, but as an unchecked funding machine for federal initiatives. When you borrow money in this way, it amounts to a politician reaching into your pocket for money. Hell, if I had a magical piggy bank that had the words "Endless supply of money--Break open upon emergency" scrawled on it I would bust it open immediately and use it whenever I felt like it. This is Ron Paul's issue with the Fed. It's a hidden tax. This is a godsend when you're in a crisis, but it does debase the dollar and minimalize the middle and lower class. The gold standard is an automated check and balance system that prevents power hunger politicians from using the Fed as their personal piggy bank, it prevents hyper-inflation, stabilizes the dollar and would have limited the government in some positive ways over the past 30 years. The real issue though isn't whether or not we go to the gold standard or keep the Fed, it's what we do to keep the politicians out of "our" piggy banks.

[cyberswede]

8. Do you support Ron Paul for president?

[politicaljunkie12]

10. Ron Paul

I don't support Ron Paul for president, but I do believe his ideas on fiscal responsibility are an important message that should resonate within the Republican party more. I don't support Mitt either or Obama, so I'm stuck. I'm not anti-Ron Paul either or anti-Mitt. So, I assume my message may not "resonate" as well with the extremists that seem to occupy both sides of the Fed question. I think it's a mistake to dismiss everything Krug and Paul say as ridiculous. They both make valid points and they both agree that the one factor that can screw up a good thing is the human element. I agree with that. You can have the Fed and it can be very effective. You can also have the gold standard without the Fed and that can be very effective. We've had economic collapse with both in place, so I don't see one as better than the other. They both have strengths and weaknesses that are brought to light when politicians muck it up.

[Morning Dew]

11. I notice you don't say you're not anti-Obama

I don't support Mitt either or Obama, so I'm stuck. I'm not anti-Ron Paul either or anti-Mitt.

[politicaljunkie12]

13. or anti-obama

feel better?

[Morning Dew]

14. I guess you are stuck.

Gary Johnson, maybe?

Big Town Hall meeting tonight.

[Yavin4]

9. Having An Unlimited Money Supply Is How We Pay for the Global Military Empire

Being able to borrow cheaply and spend freely is how we pay for our military empire. Krugman is indeed correct theoretically regarding being able to inflate the money supply and spend freely when there is an economic crisis.

However, in reality, we inflate the money supply and spend freely in order to fight wars and stage bases literally around the world with a professional military.

It would be ideal if we expanded the money supply to improve transportation, education, health care, etc., but that's not what's happening. We're expanding the money supply to pay for the two wars of the past decade as well as the debts of the banks.

[politicaljunkie12]

15. ballooning empire

I agree with that. If we borrowed money from the people and then gave it back to them intelligently in the form of better schools, infrastructure, power grids, etc., then it could result in a net positive gain over time. As you said, if you're going to deflate the dollar to spend money, then it should have an economic value that returns more than it takes. While our military force does provide jobs to those in the military and those industries that support the military, I don't see money spent on the military as a net positive. The question is whether or not the government has the wisdom to spend our money in ways that make our country a better place to live and right now they don't. I feel like they waste our money. I would prefer to keep my money and spend it locally to create a better place right here where I live than to give it to the government to muck up.

[Ruby the Liberal]

16. Who spend locally?

Defund the Federal government and leave all of the school and infrastructure up to the states?

What do you do in cases like states in the deep south where states bring in more money from the Feds than they contribute?

[Ruby the Liberal]

24. Crickets.

[Son of Gob]

26. ...

http://www.democraticunderground.com/?com=profile&uid=284096&sub=trans

[Taitertots]

20. The Gold Standard was abandoned because it was a dismal failure and exacerbated the Depression

And it certainly isn't stable at all. It subjects the economy to huge pro-cyclic price level variations (Inflation and Deflation).

[Yavin4]

23. No Sane Person Will Argue for a Strict Return to the Gold Standard. However...

There should be some check on the Federal Reserve from exploding the money supply in order to pay off banker debts.

[Taitertots]

25. But there are insane people who do, i.e. Ron Paul

And the Federal Reserve has a dual mandate requiring price stability and low unemployment. The legislation controlling the Fed's actions already says they can't explode the money supply.

The Fed isn't in the business of paying off banker debts. Are you under the impression that they have been?

[Dokkie]

28. Ofc the gold standard failed solely

because it wasn't a strict gold standard. When you print more gold receipts than gold in the vault, you are bound to run into some serious problem when the receipt holders come call for their gold.

[TBF]

12. I don't know how Krugman kept a straight face through

that nonsense.

[rufus dog]

17. Read that too quick

Thought it was "Krugman debates Ron Wood"

Although that might be more interesting.

[gratuitous]

18. Gotta feel sorry for Krugman

It would be like having a debate with a goat in the middle of the herd. Every time the head goat says "Baaaaa!" the other goats chime in with "Baaaaa!" It doesn't make any sense, but it does make a lot of noise. That much is indisputable. And Krugman correctly points out that the more obscure the historical reference proffered by the Paulbots, the more likely it is a smokescreen, designed to appeal to the dim mists of lost time. Rep. Paul may be an idiot, but he's not quite stupid enough to actually debate economics with a Nobel laureate.

[girl gone mad]

19. They're both in outer space.

Ron Paul thinks a gold standard could prevent the empire from engaging in reckless war when evidence show otherwise. Paul Krugman thinks we need to worry about deficits, bank credit is irrelevant and the Fed is working on our behalf.

People can only get dumber by listening to these two.

[politicaljunkie12]

21. haha

I think this is my favorite answer.

[pampango]

22. I've heard Krugman say that austerity budgets (while they may reduce deficits) are bad

for the economy and the people in it. I don't see that as indicating that he "thinks we need to worry about deficits".

[HappyMe]

27. trash can