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How Can One Get A Nobel Prize Winner In Economics to Tell the Truth About a View He Disagrees With?

letsgetitdone's picture

Paul Krugman took another shot at Modern Monetary Theory (MMT) today. He began with this claim:

"Regular readers of comments will notice a continual stream of criticism from MMT (modern monetary theory) types, who insist that deficits are never a problem as long as you have your own currency."

This is the third engagement of Paul and MMT, and also the third time that he's offered the above characterization of MMT. After each of his 5 blog posts in the three engagements, he's received multiple comments correcting this characterization. In addition, multiple posts by others have appeared in reply to each post, pointing out his error of characterization and supplying him with links proving that MMT supporters do believe that deficits are problematic under certain conditions, and that they matter. Already, after his latest mis-characterization a large number of comments (at his own blog) and a few long posts have appeared pointing out that he has made the same error again. The conclusion seems inescapable.

Paul is simply not telling the truth about MMT when he says that MMT supporters “insist that deficits are never a problem as long as you have your own currency.” So, the question is, what will it take to get him to tell the truth? Comments on his blog providing links don't help. Posts directly addressing his errors at very prominent sites on the web don't help. Even a lunch that at least one MMT supporter had with him hasn't helped. So, what will help? How can we get him to recognize a simple error? Why is it he can't follow a link and read what is there?

When I saw Paul's new post yesterday and found him repeating the same mis-characterization of MMT as before I found myself thinking: When he said this the first time, it was excusable. When he said it the second time it was lamentable. When he said it the third time it was scandalous. But in saying it a fourth or fifth time, I've lost count; it's just fraudulent, on a level with the statements about the President made by the Tea Party that label him “a socialist.”

Paul made other comments in his post worth discussing, but I'm going to leave it to others to discuss them. There's already a very good discussion at Cullen Roche's site, and soon enough, I'm sure that Scott Fullwiler and others will weigh in on Paul's views that there is a long-term deficit reduction problem, not because of solvency concerns, but because of concerns about eventual inflation, or even hyper-inflation. Paul has made such claims before, contending that there is an Intertemporal Governmental Budgetary Constraint (IGBC) we must be concerned about. There was an extensive discussion of his claims at the end of March and in April at many sites, and the IGBC idea didn't, in my view, survive the criticism very well. Here's one post refuting it, and another eliciting a very long comment thread, that pretty much dispatched the IGBC claim.

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Cujo359's picture
Submitted by Cujo359 on

It's a frustrating thing, to be sure. Like Krugman's shifting and ultimately wrong views on the health care reform issue, getting him to admit he simply hasn't presented a point of view correctly is like pulling teeth.

Miguel Sanchez's picture
Submitted by Miguel Sanchez on

I'm sorry to see that this diary was such a fail over at dailykos. Otherwise intelligent people were posting such stupidity as 'of course Paul Krugman disagrees with Milton Friedman'.

You're really going to have to dumb it down for that crowd. They don't care about esoteric disputes between schools of thought over France in the 1920s. Just spell out to them again and again what MMT is about, that it's not Friedmanism just because it has 'monetary' in the title, and address their usual concerns, i.e. debt, inflation ('Zimbabwe!'), 'free lunch', etc. L. Randall Wray posted a diary yesterday (I saw it posted at pragcap) that could serve as a good template.

letsgetitdone's picture
Submitted by letsgetitdone on

that got very good discussion. There are usually some people who show up who don't read the diary. But the comments on this one have been unusually silly.

Here's a thread on someone else's diary that was very good, I think.

DCblogger's picture
Submitted by DCblogger on

a great deal of counter pressure on Krugman not to endorse MMT. If he does, that is close to a game changer.

Miguel Sanchez's picture
Submitted by Miguel Sanchez on

It's entirely ego. He's devoted his whole professional career to Keynesianism. The internal mental pressure to stick with that paradigm must be enormous, especially when he sees that his main opponent, the neo-classical based neo-liberal paradigm, is performing so poorly. Why would he abandon Keynes now when he didn't abandon him in the 1980s and 1990s? The day you'll know he's won over is when he claims that MMT has always agreed with him, he just regrets that MMT is so poorly expressed.

Joe's picture
Submitted by Joe on

I completely buy your theory here. It's all about ego.

He's been talking lately about how he doesn't like people who try to "pull rank", but I think that's exactly what he's doing RE MMT. He considers himself The Smartest Guy In the Room and doesn't want some professors from the U of Missouri challenging him. He's got a Nobel Prize! How dare they.

Miguel Sanchez's picture
Submitted by Miguel Sanchez on

That's not the first time. He posted a diary a couple months ago (can't find it right now, think it was in April or May) in which he decried how his conservative critics don't take the time to understand what Keynesians are actually saying before launching into their diatribes against Keynes. I kid you not.

letsgetitdone's picture
Submitted by letsgetitdone on

That is serious irony!

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