Thursday, October 10, 2013

Krugtron parts 2 and 3

Niall Ferguson has completed his Krugtron trilogy, with Part 2 and Part 3, (Part 1 here FYI, which I blogged about earlier.)

Part 2 continues Part 1. In fact, Krugman is as human as the rest of us, and the future is hard to see. Niall compiles a long record of what Krugman actually said at the time. As before, those of us on the sharp end of Krugman's insults enjoy seeing at least his own record set straight.

But Niall admits what I said last time: we don't really learn much from anyone's prognostication
In the past few days, I have pointed out that he has no right at all to castigate me or anyone else for real or imagined mistakes of prognostication. But the fact that Paul Krugman is often wrong is not the most important thing. ..
What Niall is really mad at are the insults, the lying and slandering (I'm sorry, that's what it is and there are no polite words for impolite behavior), and the lack of scholarship -- Krugman does not read the things he castigates people for.

And it matters.

Why have I taken the trouble to do this? I have three assert the importance of humility and civility in public as well as academic discourse..
...his hero John Maynard Keynes did not go around calling his great rival Friedrich Hayek a "mendacious idiot" or a "dope".
The "Always-Wrong Club" is just the latest of many ad hominem attacks he has made on me since 2009. On one occasion he implied that I was a racist and then called me a "whiner" when I objected. On another he referred to me as a "poseur", adding for good measure that I had "choked on [my] own snark". Last year he wildly accused of making "multiple errors and misrepresentations" in article for Newsweek, only one of which he ever specified. More recently I was accused of "trying to flush [my] own past statements down the memory hole" - a characteristically crude turn of phrase - and of being "inane". Re-reading these, I can only marvel at the man's hypocrisy, for Krugman often sanctimoniously denies that he "does ad hominem" - and once had the gall to accuse Joe Scarborough of making such an attack on him when Scarborough merely quoted Krugman's own words back at him...
... Krugman has repeatedly misrepresented what I said in that debate. Immediately afterwards, he cynically claimed on his blog that I had been arguing that high deficits would crowd out private spending. Later, in order to have a straw man for his vulgar Keynesian claim that even larger deficits would have produced a faster recovery, he started to pretend that I had predicted "soaring interest rates" and had called for immediate austerity.... But anyone who reads the transcript of our debate - even the edited version that was published - can see that this was not my position.

 When Paul Krugman first began his attacks against me, he made it clear - as if almost proud of the fact - that he had read none of my books. (Quote: "I'm told that some of his straight historical work is very good.") 
Krugman's unabashed ignorance of my academic work raises the question of what, in fact, he does read, apart from posts by the other liberal bloggers who are his zealous followers. ... (When he does read a book, he mentions it in his blog as if it's a special holiday treat.)
It matters
It is "my duty, as I see it, is to make my case as best I honestly can," Krugman has written, "not [to] put on a decorous show of civilized discussion." Well, I am here to tell him that "civilized discussion" matters. It matters because vitriolic language of the sort he uses is a key part of what is wrong with America today. As an eminent economist said to me last week, people are afraid of Krugman. More "decorous" but perhaps equally intelligent academics simply elect not to enter a public sphere that he and his parasitical online pals are intent on poisoning. I agree with Raghuram Rajan, one of the few economists who authentically anticipated the financial crisis: Krugman's is "the paranoid style in economics": 
`All too often, the path to easy influence is to impugn the other side's motives and methods ... Instead of fostering public dialogue and educating the public, the public is often left in the dark. And it discourages younger, less credentialed economists from entering the public discourse.' 
The originals are full of links to documentation (a good historian's habit) which I could not reproduce here.

There is a reason the rest of the world -- especially the academic world -- abides by a simple set of ethics that include: read what you criticize, document what you say, try to understand the other side's view, respect their integrity, don't lie, don't insult, don't deliberately misquote, attack ideas if you will but not people, don't make up slanderous allegations about your opponents personal motives, and (hello, New York Times) check your facts.  And when you see someone flagrantly violating these rules, tune out.

Some interesting New York Times inside commentary.

PS: My last post on this resulted in a whole lot of nasty Ferguson's-a-crank comments, which I deleted. You may criticize Ferguson, but do so politely and factually.


  1. Krugman operates on a model which he is very clear and explicit about. As such, his model makes predictions which are easy to understand. What is Ferguson's model? how do we judge how good it is ? As to the insults, if you don't like Krugman's style, don't read his blog

    1. What about the lying?

    2. This is my main concern as well. Ferguson outright admits he's a historian, not an economist. Well, if this is true, then on what credibility is Ferguson making his (extreme) predictions? How can we evaluate Ferguson as any more "innocent" than Krugman?

      I honestly feel that Ferguson acts more like a pundit than most economic commentators since he relies on "history" (not models, or econometrics) and writes sensationalist op-eds about "Bond market revolts" and "the great hyperinflation". Again, regardless of Krugman, Ferguson probably does belongs on the "always wrong" list.

      On a final point, a lingering question: Does Ferguson's nuanced piece actually respond to the original "Krugtron the Invincible" blog post at noahpinion? Nope, not really. In the original post, the discussion isn't even about predicting the recession or the euro zone. Most of the acclaim for Krugman comes from correctly expecting interest rate, gdp growth, and inflation behavior.

    3. I think we should evaluate people by the content of their argument, not the color of their credentials. Lots of historians understand economics way better than lots of credentialed economists. The political and newspaper sphere works that way, we don't have to.

    4. Exactly, and by this measure, it's very difficult to evaluate Ferguson's writings - they do not appear to be driven by any model.

    5. Coase didn't have an economics degree, but he did good work in economics. Ferguson's work has been in history. Lots of people have opinions on the economy, but most of those people don't know enough economics for those ideas to be very worth reading. Ferguson may be able to point out that Krugman got some stuff wrong, but I could get that from Bob Murphy, Steve Landsburg, Casey Mulligan, Scott Sumner, Nick Rowe, Ken Rogoff, David Levine, Steve Williamson, Marginal Revolution, EconLog or our host. Because they are economists, those people would be apt to have a good understanding of the economic issue and be able to explain it. With Ferguson it's going to bring up issues like Krugman calling him a racist or something, which understandably bothers him but I don't care about. There's also an element of self-promotion to a columnist like Ferguson that you don't find as much in the folks I mentioned earlier.

      A point in defense of Ferguson's writing about economics: at least he's not Umair Haque.

    6. Anonymous, You claim that Ferguson’s writing does not “appear to be driven by any model.” Strikes me the model in Ferguson’s head is pathetically obvious.

      Like nearly every non-economist (and far too many professional economists) he has no grasp of macroeconomics and treats the debt of monetarily sovereign countries in the same way as the debt of a microeconomic entity like a household. I.e. his basic message is: “just like a household, if a country gets too far into debt it’s had it”.

      What he doesn’t get is the flexibility afforded by the ability of a monetarily sovereign country to print money. Ken Rogoff doesn’t get the latter point either, as pointed out by Simon Wren-Lewis here:

      And Carmen Reinhart doesn’t get it either, as I pointed out here:

    7. I am reminded of a rumored legendary Henry Clay incident from past
      Americana lore.

      As Clay was strolling down a sidewalk with room enough for only one he encountered, head-on, a political enemy who was obviously unwilling to civilly yield the right of way. " I never give way for a jackass", snarled the adversary. Smiling, Clay gave way with a wry impish grin and responded, "I always do."

      In my opinion, Krugman is to economics what rodeo clowns are to bulls----a comical distraction.

    8. I read Krugman regularly and I find that he applies his model selectively. When his model fails such as Japan's long stagnation and Iceland's poor performance relative to Estonia, he ignores it or relies on the equivalent of epicycles to explain away the shortcoming. In the case of Iceland he touted it as the quintessential example proving the superiority of his model up until it began to run counter to his model, at which point he dropped the subject.

      There are countless other examples where his model has failed: why hasn't $17 trillion of deficit spending propelled the US to a booming economy; why did the end of the Second World War not lead to a depression. In the latter case, he again reverted to the equivalent of epicycles; in the former case he waves the trillions away as spending on automatic stabilizers, never explaining how his model differentiates between spending on automatic stabilizers and spending on large infrastructure projects. As far as I can tell, his model doesn't take such supply side factors into account.

  2. Your link for part 2 is the same as for part 3

  3. Ferguson's series is somewhat hampered by the fact that he actually warrants many of the criticisms levied against him. From dips into pop-psychology regarding the effect of Keynes' homosexuality, to long swims in credulity with his parroting of John Williams at Shadowstats, Ferguson's reputation should be in tatters in a world where your reputation reflects your output.

    He isn't more offensive than a random person with who makes mistakes, but he gets attention far beyond the quality of his analysis. And that IS due to carryover from his reputation as a historian. Absent his credentials, what recent commentary about the last few years warrants attention?

  4. Brad DeLong has an harsh critique of a recent Ferguson op-ed in the Wall Street Journal. While it does not directly relate to the Ferguson-Krugman kerfuffle, DeLong's criticisms of Ferguson's analyses and his motivations are extensive. If you believe anything that DeLong says, it is pretty hard to take Ferguson's op-ed seriously.

    As a side note, I have read some of Ferguson's scholarly history work and it is, as Krugman jokingly acknowledges, very good. But I don't think he does himself any favors as an academic by get involved in these spats. (The same can be said for Krugman, but as this is his bread and butter, I think he can more easily get away with it.)

    1. Brad DeLong is a Krugman sycophant, and therefore irrelevant. You would be better served asking the Maytag Dishwasher man about economics than DeLong.

      Ferguson’s economic history is sterling; he consistently draws correct conclusions from extensive primary source evidence, and goes to far greater length to get said evidence than Krugman.

      Krugman consistently (after 2000) gets it wrong.

  5. Tens of millions are suffering as a result of the recession. Millions of lives have been permanently blighted. Niall is focused on his own hurt feelings. Each of us has our own priorities.

  6. Paul Krugman not only is a great economist but he is a great intellectual. For me, as a PhD candidate in economics, he is one of
    very few economists that I really enjoy his comments and his understanding about economics.

    1. You're kidding! You certainly meant: Paul Krugman not only is a BAD economist but he is of POOR intellectual level. You'd better turn to other economists if you want to know how an economy really works!

    2. You may criticize Krugman, but do so politely and factually. Wait, what???

  7. See De Long's takedown of Ferguson's latest WSJ op-ed. My view is that the world becomes poorer every time Niall Ferguson writes on economics--his writing is a negative value added activity.

    1. If Ferguson were such an obvious simpleton, I would think the most prominent economist of our time could demolish his arguments without having to call him racist or otherwise insult him.

    2. I am not sure I understand this point. Krugman is free to insult him and we are free to not read his blog. Why does this matter at all ?

      this is from Krugman's blog. He is expressing his opinion. So ?

      For the record, I don’t think that Professor Ferguson is a racist.

      I think he’s a poseur.

      I’m told that some of his straight historical work is very good. When it comes to economics, however, he hasn’t bothered to understand the basics, relying on snide comments and surface cleverness to convey the impression of wisdom. It’s all style, no comprehension of substance.


    3. 1) As Anon pointed out, Krugman's not calling him "racist" and so on.

      2) RE: "I would think the most prominent economist of our time could demolish his arguments"

      Why do the work if someone else did it for you?

      On a more serious note, I enjoy this blog much more when efforts are devoted to good economic commentary, not street fights with Krugman.

    4. "If Ferguson were such an obvious simpleton, I would think the most prominent economist of our time could demolish his arguments without having to call him racist or otherwise insult him."

      If Krugman were writing in the academic sphere, he could and should demolish Ferguson's arguments without insults. Academia works off the assumption that people on the other side of the debate are arguing in good faith. It also acts as if holding wrong beliefs was basically harmless. These assumptions are often false but are useful for preventing flame-wars and ideological witch-hunting, which buys us time to thrash out the truth.

      Krugman, however, is writing in the popular press. In an editorial, he is not able to present the full DSGE he is using and rigorously critique its assumptions. So convincing a skeptical audience is out of scope. What he can do is A) briefly describe the narrative behind the model; B) point out the key errors his opponents make; and C) get people good and interested. Using colourful language (as opposed to academic bureaucratese) is very practical way of achieving #C.

      It is also morally justifiable because, in the political sphere, beliefs have consequences. Reinhart and Rogoff's spreadsheet snafu was used to justify policies that knocked 5% off UK GDP over the last few years. The Fed's recent talk about tapering caused an entirely predictable (to Krugman) stutter in the economic recovery. Meanwhile, Greek youth unemployment is at 60%. Punditry is not a victimless crime.

      Personally, I prefer technical discussions and well-founded DSGEs to street fights. But that's because I've been reading economics blogs for a few years now. What got me interested in the first place, what convinced me that economics was a science not a theology, was people who were willing to say: this is so wrong it makes my eyeballs bleed. People like Krugman. Regardless of what I eventually come to believe, I will always be grateful to him for that.

  8. well, Ferguson's misreadings of CBO is really intellectually embarrassing, and krugman's blog post pointing that out is really shameful to ferguson.that produced a hefty three part reply which nonetheless failed to undo his damaged reputation.
    as a general comment on krugman's impolite attack on the austerity crew (including you professon cochrane), lets face the facts professor, you and your buddies should work harder to reconcile your models as they are unable to either explain the crises and what to do about it. the evidence is strong about it, and you shouldn't be stubborn about that. krugman maybe is really mad, why don't you guys admit that your models are wrong and remake them and follow some Keynes framework in remaking them. For that Krugman is 100% correct and you and ferguson and company should not take any credit or feel offended by his comments

  9. Krugman surely needs to be nicer. But contrary to what has been insinuated he never pulls rank, unlike other Nobel laureates - he simply calls out Ferguson (and Ron Paul!) for their "common sense" approach to economic analysis. Cochrane is certainly the nicer guy here.

    Finally, say what you will of Krugman, the patting at his back, the self-referential tone etc - he never implied that his work is required reading for educated folk:

    "Krugman's unabashed ignorance of my academic work raises the question of what, in fact, he does read, apart from posts by the other liberal bloggers who are his zealous followers."

    1. That darn common sense! Always leading people astray! We surely have too much of it around these days!

      Economics is not chemistry. It is the study of human action, and human action is (for the most part) sufficiently reasoned through common sense. Supply and demand is common sense. It is common sense that someone will seek a lower price for a good. It is common sense that companies seek to reduce their capital costs to maximize profit. It is common sense that inflating the money supply will expose the market to an inflation of prices (as we are seeing in the stock market, as a result of QE-infinity).

      You cannot disprove logic with statistics. Krugman's views are illogical as they require people to act irrationally in the market - as if people have no desire to seek lower prices, or as if companies are immune to the higher cost of labor, or as if inflating the money supply has no effect on the value of a dollar. His economic views are not economics, but fantasy.

    2. Tha money supply HAS inflated, so... the runanway inflation (you know, that one predicted by NF), where is it??

  10. Well professor Cochrane its in the Krugman's nature to very often offend the ones that do not agree with his positions. He did the same with many other honored professors like Carmen Reinhard and Keneth Rogoff when a glitch was found with their model. I believe He does this to attract attention to readers so he can have more and more disciples. I would conclude with a statement of Marc Faber a very well known investor who is much smarter than Krugman at least in his predictions > Quote #The views of the Keynesians like Mr. Krugman is that the fiscal deficits are far too small. One of the problems of the crisis is that it was caused by government intervention with fiscal and monetary measures. Now they tells us we didn't intervene enough. If they really believe that they should go and live in North Korea where you have a communist system. There the government intervenes into every aspect of the economy. And look at the economic performance of North Korea." Priceless#

  11. So many of Krugman's economic stories contain a "because they're evil" clause. Even when I can't follow his math, his erroneous assumptions about human beings are obvious even to non-economists.

  12. A couple of things here.
    Krugman has moved from being an economist to being a "political economist", emphasis on POLITICAL. And it's his right, as he sees it, to use his column and his position to influence policy and opinions. Because of this, you are not going to get any more deep, strictly economic debates or arguments from him, so guys like Ferguson shouldn't even bother. I can't think of any economist on the right who has the same clout, or has taken up the same position for conservatives as Krugman has for the left, probably because they all enjoy focusing on economics, and not on politics. And they don't want to fight as dirty. The problem is, political economy has a much greater influence on everyday life than abstract economics does, so Krugman's influence greatly outweighs even the best conservative economists. And he has recognized this, and because of that influences millions of people. Where is today's Milton Freidman for the conservative point of view?

    I'm sure Krugman still reads books and is extremely well read, and this point about him is just silly.

    Finally, even though Krugman does simplify the right's arguments about predicting runaway inflation, and "the US is the next Greece", the fact is that stuff was being said, even on this blog. And it hasn't happened, and there really has been no recognition from the right that they've been wrong, nor, more importantly, what in their models has led them to an incorrect conclusion. Until this is done, or until we have runaway inflation and default, Krugman will always win the polemic because he has showed a much better understanding of the situation. And this includes guys like DeLong, and Larry Summers who have taken the same position as Krugman.

    Also, Krugman writes way better than most economists, so he's also much more accessible and easy to read.

    He's a tough competitor, and guys like Ferguson are frustrated because they can't beat him. And if they believe it shouldn't be a competition, well then, don't make forecasts and then complain when otheres criticize you when they don't turn out to be correct.

    1. I think you nailed it as far as what motivates Krugman. He acknowledges what is "seen," but is ignorant of what is "unseen." Nowhere is this more apparent than his laughable proposition concerning an alien invasion. He is exhibiting precisely the kind of ignorance that Hazlitt warned us against.

      The dangerous party, though, is how many people listen and concur with him. It is easy to see the seen. Difficult to see the unseen.

      For this, I hold him in contempt of humanity. I can't decide if he is willfully attempting to propagate ignorance, or he just really believes what he says.

  13. Anonymous, it is pretty obvious that your really are Paul Krugman, so just admit it.

  14. I'm pretty mystified how anyone can defend Krugman anymore. The man is a professional troll and like all internet trolls, the narrative ALWAYS precedes the evidence. Hell, in his case, the narrative exists independent of the evidence and if you dare to bring up some, the ONLY logical possibility is your evidence is biased due to bad data, bad models, or some axe to grind. Please lets stop feeding the troll.

  15. Krugman's verbal attacks remind me of what I have read of Saul Alinsky's Rules for Radicals.

    Regarding Power Tactics, Alinsky writes:

    "…the fourth rule carries within it the fifth rule: Ridicule is man’s most potent weapon.....

    The thirteenth rule: Pick the target, freeze it, personalize it, and polarize it." — P.126-129

    Krugman picks a target, personalizes it and ridicules it.

  16. If you like Ferguson for his sharp tongue but dislike Krugman for his, it suggests it's not really impoliteness that bothers you. So what is it?

  17. I recall Krugman's vitriolic attack on Brian Arthur back in the late '90s in Slate. The crux of his complaint was that the article was not all about Krugman instead. It was sufficiently vitriolic that Kenneth Arrow was driven to a reply in which he wrote: 'Krugman admits that he wrote the article because he was "just pissed off," not a very good state for a judicious statement of facts, as his column shows.'

  18. Ferguson has linked to his recent book (The Great Degeneration) several times in his crusade against Krugman. He thinks that had the claque read the book they would somehow be more convinced of Ferguson's honesty. After all, how can three editorials capture all of his work. Right?

    You asked for an honest, factual criticism of why people think Ferguson's work – his scholarship, not popular opinion pieces – is not taken seriously. I've given a shot at this here:

    I'm linking this to you in hopes of a defense. I don't see any analytical depth or rigor in my writing, just a compilation of claims in a book written by Niall Ferguson which seem to be in direct contradiction with facts. Not interpreted facts, but facts suggested in the papers and books that he cites.

    Am I wrong?

    1. As a wise man once said: BLOT (bottom line on top). I agree with your critique of Ferguson.

      That said: his (ahem) selective citation of the facts has to be taken in light of the fact that his book - like all pseudo-academic treatises issued for public consumption (and best-seller lists) - is not meant to be a scholarly work.

      Ferguson is at the point in his career where he is cashing in his scholarly 'cred' in order to be able to afford a nice place in the English countryside when he retires (he won't make enough from book sales to be able to afford anywhere in the Hamptons, because publishers weren't recipients of TARP and TALF welfare transfers).

      It's not clear to me why anybody should expect anything else: we are not paragons. We have our personal aims, ambitions and preferences, and Ferguson has decided he's going to have a go at trying to be the Gibbon of our time, and document the decline of the US in real time.

      That said, the one of Ferguson's few redeeming qualities is that he's not Simon Schama; we should all be quietly grateful (to Evolution, or to the ludicrous sky-fairy of your choice if that's how you roll) that the 'NotSimonSchama' attribute applies not only to most historians, but to most homo sapiens.

    2. Oh, and one other thing (since I'm here)... it is US-centric in the extreme to think that Haaah-vard is the 'world’s by and far most prestigious university'.

      As it happens, it is the alma mater of one of the best Australian economists alive (Peter B Dixon) who coincidentally is the chap who tried to shepherd me through a PhD (I haven't completed ... yet - I have 7 more years until it will have taken me longer than "Mr Magoo" Greenspan, and I won't get mine honoris causa).

      So I am not in the house to dis Haaaah-vard, yo. (I think that's how Jesse Pinkman would phrase it).

      But let's be clear... Oxford (and even - gasp - the 'other' Cambridge) can plausibly be put forward as candidates for greater prestige: outside of the US, few have heard of the 'Ivy League', but very few Anglophone academics will not understand what 'Oxbridge' implies.

  19. I admit a bias, but for me Krugman has written precisely one paper that had merit - "The Myth of Asia's Miracle" in 1994 (TL;DR version: Japan's 'Miracle' was all about labour moving from less productive, to more productive, capital: there was no Solow Residual, and all those 1980's books telling American businessmen that they needed to learn how to perform a Tea Ceremony were unnecessary).

    Since then he's been the Tom Friedman of Economics (if you read that as a compliment, stab yourself in the head with a fork).

    In that he's now a 'commentator', Krugster is a bit like John Quiggin (an Australian) whose economics work is first-rate, but which has nothing to do with his polemic style as a 'commentator' - the latter is almost entirely informed by his political world-view (a worldview with which I profoundly disagree).

    Also, whenever I read Krugman (which is not very often: I prefer Shiller to shills) I am reminded of the quip of Upton Sinclair ...

    "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

    (The exclamation mark is in the original, sadly - it would be a better aphorism without it: it also has slight echoes of the psychological bases for bounded rationality, perverse incentives, and the source of the principal-agent problem, n'est-ce pas?).

    Point is, Krugman is the 'go-to' Court Academic for the "print and damn the torpedoes" school of thought, which worked so well for Zimbabwe and Argentina. I dare say it would be difficult - if not impossible - to live his current lifestyle on what he would make if his only source of income was from his university post... so he has to tailor his writing to ensure that his budget constraint doesn't suddenly contract.

    Disclosure: my PhD supervisor was supervised by Leontief [1973 prize winner], and my politics is orthogonal to Krugman's (that's not to say I am 'of the right' - there's not two dime's worth of difference between the wings of the political bird of prey. I'm a voluntaryist in the tradition of Nock, Spooner and Rothbard... and Mencken and other ratbags - precisely because I believe I understand the intertemporal dynamics introduced when politicians and bureaucrats start interfering in economic life).

    Also... I didn't finish my PhD, so I can't claim Leontief as my 'grand-supervisor' (like a 'grandfather', you see). Yet.

  20. Geoffrey, nobdoy is interested in you.

  21. "...his hero John Maynard Keynes did not go around calling his great rival Friedrich Hayek a 'mendacious idiot' or a 'dope.'"

    On the contrary, I believe that when asked what he thought of The Road to Serfdom, Keynes said something akin to "I agree with roughly 80% of the book."

  22. I know many historians do not consider Ferguson a "historian's, historian". Historians are very careful about making generalisations, and their work is very context-specific. They do not do hypothesis testing; they start with a blank page, and build up a case from primary documentation. Fundamentally it is a different way of working to a social science. Ferguson is more a pundit and prone to sweeping generalisation.


Comments are welcome. Keep it short, polite, and on topic.

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