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Krugman tries to answer Hoppe

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John James Posted: Mon, Feb 4 2013 5:04 PM

So in this thread I posted a video of Hoppe dumbing it down to the bare assertion held by Keynesians like Paul Krugman.

As you can see there, at least one member of this forum thinks Hoppe is an ignorant boob, and that his question is "idiotic".

Well, Krubman himself was apparently made aware of it...and as predicted, couldn't seem to answer it. (Which, according to someone here, means he's not a "true economist".)

 

Paul Krugman Fails the Hans-Hermann Hoppe Challenge

Krugman Tries Again to Answer Hoppe

 

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I'm surprised Krugman didn't actually mention Hoppe himself. He certainly could have used a few ad hominems against him, like "He believes monarchy is preferable to democracy" or "He believes in natural elites". Sort of like he did with DiLorenzo and secession in his "Johnny Reb Economics" post.

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Neodoxy replied on Mon, Feb 4 2013 5:59 PM

Well it's certainly odd to see Hoppe even indirectly mentioned in the NY Times, let alone by Krugman. That would certainly make for a strange debate.

It's also great to see more reliance upon passive aggressive swipes at the other side rather than actually addressing the argument that side has made. It's really quite refreshing after seeing normal discourse where people just vaguely accuse the other side, or imply that the other side is wrong in some unspecified way...

Edit

fegel:

I don't think Krugman knows anything about Hoppe besides he's on the "radical right". Perhaps he know he's an Austrian and that he hates democracy, but beyond that I would doubt any actual knowledge on his part.

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That's a good point.

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Malachi replied on Mon, Feb 4 2013 9:04 PM

krugman is an idiot for acknowledging hoppe. even that ayn rand character he loves to compare himself to knew better than that. the man needs to retire. ny times can hire fool on the hill, or the idiot lord keynes.

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Neodoxy replied on Mon, Feb 4 2013 9:15 PM

At last those coming came and they never looked back With blinding stars in their eyes but all they saw was black...
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Malachi replied on Mon, Feb 4 2013 9:18 PM

nyt is perpetually in the red, the more idiots they hire, the better. old media is headed off a cliff and the nyt is walking point.

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LOL - why did he even try?

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Malachi replied on Sat, Feb 9 2013 12:58 PM

probably because spending his whole career doing something like taking really bad ideas and making them seem like decent ideas made him into an actual dumbass, or at least a partial dumbass. and he thinks he can play his dumbass smartass act anywhere, and it will work. he doesnt realize that an effeminate european intellectual like hoppe is his worst enemy in this regard, because he has the ivory tower cred and the street cred (being persecuted for his academic statements while on faculty at unlv) to match krugman, and he actually doesnt even know who hoppe is, so he doesnt realize that in any sort of exchange hoppe would gut, skin tan hide, and put his meat to market. its the end of the beginning, gents.

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Neodoxy replied on Sat, Feb 9 2013 2:16 PM

Jesus Malachi...

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Malachi replied on Sat, Feb 9 2013 5:38 PM

what? did I say something?

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It ain't that hard for a keynesian to answer that specific question made by Hoppe.

Keynesians beleive there's a lot of economic value in the general perception of safety of cash reserves. That is, when people are not concerned with their money disapearing overnight, they can leave their cash for fractional reserves operations to find uses for it. Fractional reserves houses face liquidity risks due to their leveraged situation. Printing money when the financial system lacks liquidity avoids the cascades of bankruptcies and widespread panic.

So printing money "generates wealth" in the sense that it avoids self-reinforcing liquidity traps, but it cannot generate wealth indefinetely because after a certain point the gains on liquidity security are offset by the costs created by runaway inflation.

So it's up to central bankers, government technocrats and wall street people to decide upon this trade-offs.

This is not my personal opinion, by the way, it's just the answer a keynesian would give, and it would be correct provided the assumptions that orient keynesian thought.

The difference between austrians and keynesians is more related to what they expect to come out off a financial meltdown. Austrians beleive keynesians overestimate the lasting effects of such liquidity crisis and think that postponing them only aggravates things.

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"Wow. Just wow. Krugman would never argue that, in the long run, a society can be made richer by printing money. He would only say that in the short run, an increase in the money supply can counteract the negative effects of a fall in spending caused by price stickiness."

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This ^^^^^^^^^^^^^

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dude6935 replied on Wed, Feb 13 2013 12:19 PM

"Krugman is saying that printing money, i.e. inflation, is only able to boost growth **during certain times**. Now, if that is the case, then it doesn't even matter what those certain times happen to be. As long as it is not all the time, then Krugman should be relentlessly chastising the Fed for engaging in ONGOING monetary policy. After all, the Fed does engage in more or less continuous open market operations to target continuous price inflation, right? And doesn't Krugman support that too? His answer to Hoppe is either a blatant lie, or he is so confused he doesn't even know when monetary policy is justified in his own mind.

The important point is that because Krugman believes that printing money is only justified during certain times, where there is "insufficient demand", then that would mean the Fed should only ever print money during certain periods, say during bank panics, or recessions, or whatever. Nothing that would approach continuous price inflation."

This seems correct to me. Does the Fed does engage in virtually constant operations to "print money"?

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