Paul Krugman is an extraordinary hypocrite. He blogs:
At one level, of course, it’s perfectly understandable. The OECD in general, and Pier Carlo Padoan, in particular, as chief economist, were among the biggest and earliest cheerleaders for austerity; you can see why they don’t want to admit that they were in fact cheerleading Europe into disaster.
Still, it’s kind of depressing. What we’ve just had in the eurozone is as close to a natural experiment on fiscal policy as you’re ever likely to see, and the results overwhelmingly support a Keynesian view. You might expect some acknowledgement, some revision of views.
His hypocrisy is on full display here, easily seen by turning his own argument around on him. To wit:
Austrian economists, like me, are boggled by Paul Krugman’s apparent inability even to contemplate the possibility that the U.S.’s poor economic performance is the result of the Fed’s inflationary monetary policy.
At one level, of course, it’s perfectly understandable. Keynesian economists in general, and Paul Krugman, in particular, were among the biggest and earliest cheerleaders for Fed money printing to lower interest rates, in order to, as Krugman put it, “create a housing bubble to replace the NASDAQ bubble.” You can see why Krugman doesn’t want to admit that that he was in fact cheerleading the U.S. into disaster.
Still, it’s kind of depressing. What we’ve had in the U.S. is as close to a natural experiment on monetary policy as you’re ever likely to see, and the results overwhelmingly support an Austrian view. You might expect some acknowledgement, some revision of views.
He quotes George Orwell:
The point is that we are all capable of believing things which we know to be untrue, and then, when we are finally proved wrong, impudently twisting the facts so as to show that we were right.
Which, of course, applies perfectly to his own willful ignorance and ideological myopia.
Oh, and about his argument that the “natural experiment” in Europe illustrates the failure of “austerity”, he has a point, just so long as we recognize the definition of “austerity” as “continued spending increases (which Krugman knows is the case) along with a higher tax burden on the private sector”.
Which brings us right back to that Orwell quote again.