T-Cow disagrees that Paul Krugman should be Fed Chairman:
Elsewhere I have to strongly differ with the Johnson-Kwak proposal that Paul Krugman be selected. I don’t intend this as a negative comment on Krugman, if anything I am suggesting he is too dedicated to reading and writing and speaking his mind. The Fed Chair has to be an expert on building consensus and at maintaining more credibility than Congress; even when the Fed screws up you can’t just dump this equilibrium in favor of Fed-bashing. What lies on the other side of that curtain isn’t pretty. Would Krugman gladly suffer the fools in Congress? Johnson and Kwak are overrating the technocratic aspects of the job (which largely fall upon the Fed staff anyway) and underrating the public relations and balance of power aspects. It’s unusual that an academic will be the best person for the job.
Even if you think that Krugman would be the best person for the job that doesn’t imply that we should give him the job. The decision is between Krugman doing what he is doing now and Bernanke as Fed chairman versus Krugman being Fed chairman, nobody doing what Krugman is doing now and Bernanke going back to teaching Princeton undergrads. To prefer the latter it is not enough that Krugman is a better Fed chair than Bernanke. His advantage there must compensate for the other changes in the bundle.
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January 25, 2010 at 1:14 pm
Anonymous
That’s right. It all hinges on the difference between their abilities as teachers of Princeton undergrads.
January 25, 2010 at 2:17 pm
John Gault
Then, of course, there’s also the fact that Krugman is a delusional idiot who has betrayed the very foundations of economics. We’d be better off with Friedman’s corpse as the Fed Chair.
January 26, 2010 at 11:40 pm
Vinay Prasad
You’re assuming that noone would take Krugman’s spot. To be sure, Krugman has an already-established base of readers, but there must be other economists out there who can do what Krugman does. Whenever stars have retired in the past, new ones have emerged.
January 28, 2010 at 8:40 am
rsquared
ad hominem is suggestive of a lack of substance, and an unwillingness to engage, perhaps out of laziness. Sir Gault, for someone who has co-opted a name (plus the letter U) so associated with ideas, one might think you could do better than “delusional idiot”
January 28, 2010 at 9:19 am
John Gault
You know what? You’re right. And I regretted it almost the moment I wrote it. One should consider, however, that just because “delusional idiot” is an ad hominem attack does not mean that the person in question is not, in fact, a delusional idiot. With that being said, however, I will concede that my comment lacked substance. The reason for this is because, unlike your run-of-the-mill blog, this one is operated and frequented by individuals who are far more equipped than I to wield the of detailed minutia of economic science as a weapon. I have found that it is, generally, suicidal to argue against an opponent who has a far better command of the topic–even if they are wrong–because the more ignorant of the two will never know whether or not he has truly been bested. So, out of intimidation and frustration, I resorted to schoolyard name-calling. My bad.
Just like Stephen Hawking has brought theoretical physics to the mass public, Krugman, in my opinion, has done more to keep Keynesian economics alive than anyone since Keynes himself. That’s the problem. People read his admittedly gifted writing and believe that they understand the underpinnings of his beliefs. This, in turn, creates an image in the popular mind of Keynesian economics as a “reasonable” compromise between laissez-faire capitalism and socialism. The problem with that viewpoint is that the science of economics is far more like physics than it is like, say, Literature. There can be an objective understanding of how economics work because economic law is like the law of gravity–it functions whether you understand it or not, and it does not compromise. Keynesian economics keeps people from committing to an ideologically pure reference point. I believe that this is folly. I believe that natural laws (in which I include the study of economics) do not fall into a “middle ground”. To put it simply, pick a horse and lay your bet. I, personally, believe the Austrian school is the most likely stallion, but I’d also bet that Marx has a better chance of being right about how the world should work than Krugman does.
Finally, the “u” was added intentionally as “John Galt” was already taken.
Please feel free to eviscerate me at will…
January 29, 2010 at 6:44 pm
KeithP
Eviscerating away.
Nothing damaged the absolutist (or religous) form of “free market fundamentalism” more than Bushism taking it to it’s logical extreme and producing the financial and economic devastation that it did.
How come none of the “Chicago School” economist forsaw the housing bubble and its destructive potential. Quite a few Keynesians did including Krugman and Dean Baker. The power of the theory is demonstrated in its ability to explain the real world, not some idealized model of it as with EMT. Even Richard Posner and Bruce Bartlett have embraced Keynesianism, no longer wanting to be associated with embarassment of the Chicago style economics.
I also will note that time of greatest risk of a major financial collapse, after Lehman fell, when the banks stopped lending altogether, and major triple A corporations could not float short term commercial paper, – at that time almost every economist, in the country – right, left and middle, – agreed that major government interventions were an absolute necessity to prevent a horrendous depression.
At that point free market fundamentalism ceased to be relevant.
January 29, 2010 at 7:22 pm
John Gault
As I mentioned before, I’m not an economist. I have an “armchair” interest in the topic at best, so excuse me if my retort is in broader strokes than yours was. First, to call “Bushism” the natural extreme of free-market fundamentalism is lunacy. The architect of the first “bailout” can hardly be called a free-market fundamentalist. The man never met a spending bill he didn’t like and the government grew under his reign just as it always does. Second, while I definitely find a lot to like in the Chicago school, it is the Austrian school which, I feel, holds the most ideologically pure position in the world of economics. Furthermore, economists of the Austrian school were trumpeting the warning bells about the impending housing collapse as early as 2001 and the recession as early as 2004. The clanged the bells so loudly that Ron Paul and Peter Schiff (neither of whom could be considered anything more than “fans” of economics) are both on record as quoting the Austrian School warnings looooong before the bubble actually burst. Finally, your statement that “almost every economist” advocated government intervention is patently false. While I’m sure you could dig up some obscure reference I’m not familiar with, I’m equally sure that the you would have a hard time finding an Austrian advocating TARP.
September 29, 2013 at 12:31 am
どゆわさ
How come you dont have your site viewable in mobile format? cant view anything in my iPhone.