Paul Krugman, Vanquished
It is always satisfying when one sees an insufferable jerk get his just comeuppance. And when the jerk is a bully who thinks he's always right and all others, save his acolytes, are not only "always wrong" but "knaves and fools" as well, then it is especially sweet to see the jerk shown, on point after point, to have been consistently wrong.
In "Krugtron the Invincible," economics historian Niall Ferguson uses Paul Krugman's own words to filet the Keynesian economist. Ferguson's three-part, 7,421-word article is a pleasure to read, and not only for those interested in economics.
But on economics, perhaps the most devastating of Ferguson's takedowns is in Part 1 where he details Krugman's serial predictions about the imminent collapse of the euro currency. Ferguson provides quotes from no fewer than eleven articles, from April 2010 through July 2012, to demonstrate how wrong the economist was. Ever the gentlemen, Ferguson concedes:
Now, I happen to be rather a euro-skeptic myself. I opposed the creation of the euro and predicted at the outset that the experiment of monetary union without fiscal integration would ultimately degenerate. But today, as you may have noticed, the euro is still intact.
In Part 2, Ferguson asks why Krugman had been "so bold" in predicting the collapse of the euro. The reason is because Krugman "had so completely failed to predict the U.S. financial crisis." If one can't predict, one can't be taken too seriously as a scientist. So Krugman had to get out front on the euro crisis. Hence: the need to be bold.
In Parts 1 and 2 Ferguson makes an air-tight case that Professor Krugman has been quite deficient in his analyses and predictions of late: "One might have expected a little more humility from an economist who so clearly failed to understand the nature of the biggest financial crisis of his lifetime until after it had happened."
Those who have no use for Krugman the economist will find the first two parts delicious in their itemizing of his bad predictions. But in Part 3, Ferguson goes beyond economics, making a wider appeal. In it, our Scottish historian looks at the nature of history and the place of the "public intellectual" in modern society. And he states why he is responding to Krugman's vendetta against him:
You may ask: Why have I taken the trouble to do this? I have three motives. The first is to illuminate the way the world really works, as opposed to the way Krugman and his beloved New Keynesian macroeconomic models say it works. The second is to assert the importance of humility and civility in public as well as academic discourse. And the third, frankly, is to teach him the meaning of the old Scottish regimental motto: nemo me impune lacessit ("No one attacks me with impunity").
With this meticulous article, Ferguson conducts a master class on how to respond to one's critics and intellectual enemies; I highly recommend it. There are hyperlinks out the wazoo, and as for Krugtron the Invincible, there's no place to hide.
The reason people dislike Krugman is not because he's a left-winger, nor because he's consistently wrong about matters economic. Rather, they dislike him because he has no manners; the guy's a jerk. If Krugman delivered his opinions like a gentlemen, readers would consider them, perhaps lament that he is again wrong, and then move on. But Krugman is a piece of work; his nastiness might remind one of MSNBC's Ed Schultz or Martin Bashir. One of the more compelling parts of Ferguson's article is when he turns to the loss of civility in public discourse. Krugman is poison to that discourse.
The word "fraud" does not appear in "Krugtron the Invincible"; Ferguson is much too decorous and gentlemanly for that. But if Krugman were to be called a fraud, it should not be because he's so frequently wrong; it should be because he positions himself as the authority. Delivering his pronouncements ex cathedra, Krugman seems to have some insatiable need to be infallible. Because he must have no doubt about himself, he must have nothing but doubt about others, and even impugn their motives.
Economics, if it is a science, is certainly not a complete one. Economists are continually being surprised by how the economy behaves. (Behave, economy; that's not how you're supposed to act.) Nonetheless, we must make sense of the economy. And to do that, we use economics, deficient though it is at prediction.
In this time of economic uncertainty, when Congress has run four back-to-back trillion-dollar deficits while the Fed created other trillions out of nothing, economists need to possess at least a smidgeon of self-doubt, a modicum of modesty.
But that's too much to ask of Pauly Boy. Read Ferguson's article.
Jon N. Hall is a programmer/analyst from Kansas City.