Paul Krugman makes no cents: How the economic guru of the Left went off the rails

NY Post ^ | October 4, 2009 | JOHN H. COCHRANE

[Scanian]

In his weekly column and recent New York Times Magazine story, “How Did Economists Get It So Wrong?” Paul Krugman blasts economic theory, argues against free markets and says that the country needs more taxpayer-funded “stimulus,” not less. He also faults economists for not predicting the crisis. In an essay on his web site, John H. Cochrane, finance professor at the University of Chicago Booth School of Business, wonders “How did Paul Krugman get it so wrong?” An excerpt:

It’s fun to say we didn’t see the crisis coming, but the central prediction of the efficient markets hypothesis is precisely that nobody can tell where markets are going — neither benevolent government bureaucrats, nor crafty hedge-fund managers, nor ivory-tower academics. This is probably the best-tested proposition in all the social sciences.

Paul Krugman writes as if the volatility of stock prices alone disproves market efficiency, and efficient marketers just ignored it all these years. But there is nothing about “efficiency” that promises “stability.” “Stable” growth would in fact be a major violation of efficiency.

[SolidWood]

Uh... Keynesianism was always wrong.

[backhoe]

Had his number years ago:

http://www.freerepublic.com/focus/f-news/924778/posts
The lies of Paul Krugman- ( BLAIR, BRAGG, DOWD ... KRUGMAN? )
various FR links | 06-07-03 | The Heavy Equipment Guy

[Stultis]

Poor Paulie. I pity him. A man out of time, having to live in a free society, when he was clearly made to formulate five year production plans for toilet paper in Stalin's USSR.

[carumba]

Arreviderci laissez faire and hasta la vista central planning committee. Comrades you should have seen this coming. We can do communism right, even better than those thugs Mao, Lenin, Pol Pot, Castro, and Ho Chi Minh.

[Lonesome in Massachussets]

More deeply, the economist’s job is not to “explain” market fluctuations after the fact, to give a pleasant story on the evening news about why markets went up or down. Markets up? “A wave of positive sentiment.” Markets went down? “Irrational pessimism.” (“The risk premium must have increased” is just as empty.) Our ancestors could do that. Really, is that an improvement on “Zeus had a fight with Apollo”? Good serious behavioral economists know this, and they are circumspect in their explanatory claims.

I've long thought this but could never express it anywhere near as well.

[mike-zed]

Krugman is a doctrinaire leftist. While that works for the Nobel committee, no one else cares what this idiot blathers on about.

[randog]

He [Krugman] also faults economists for not predicting the crisis.

How many of us peons predicted the housing crash? We predicted it years before it happened.

[1rudeboy]

I predict the Cubs will win the World Series, but I won’t say when.

[Grampa Dave]

The NY Slimes is loaded with worthless/no talent left wing mediots.

K has to be at the top of their worthless arrogant list.

[Erik Latranyi]

The only explanation that makes sense to me is that Krugman isn’t trying to be an economist, he is trying to be a partisan, political opinion writer.

You have to read nearly to the end to get this sentence that completely explains Paul Krugman.....he is a liberal first and economist second.

[Brilliant]

I recommend this essay to everyone. It’s a masterpiece.

[EBH]

Exactly, all that talk about the housing bubble for years! And we act like we didn't see it coming?

What we didn't see was the level of corruption that had inflated the bubble to its’ outrageous size. And for all their huffing and puffing right now, the final blow-down of real-estate is about to happen.

[1rudeboy]

There are some real gems in the original column.

[Jack Black]

LINK DOES NOT TAKE TO STORY. !!!!

[misterrob]

He’s also a hypocrite. When Bush was running deficits he was critical of that plan but when Obama gets into office the tune changes save when Barry isn’t spending enough.

[C19fan]

Krugman is a doctrinaire leftist. While that works for the Nobel committee, no one else cares what this idiot blathers on about.

For his work as an economist before completely going over to the dark side he deserved the prize. Actually the prize in economics, which is not a real Noble prize, has gone to economists across the political spectrum. One recent winner Prescott hates Keynesian economics.

[WashingtonSource]

Paul Kurgman is a Communist pure and simply. All his views flow from the fundamental misunderstanding of all things.

[FastCoyote]

[How many of us peons predicted the housing crash? We predicted it years before it happened. ]

And how many here predicted the stimulus would not stimulate? Quite a few.

[expat_panama]

Krugman has a point there; I mean, he saw the crisis coming didn't he?   In fact he even warned us that if Obama got elected unemployment would go from the 6.6% we had back then to the current 9.8%, and that 5 million would lose their jobs.

 

 

 

 

Maybe I need to stop inhaling helium and go out and get some fresh air.