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The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Paul Krugman “How did economists get it so wrong”

Posted by iusbvision on October 20, 2009

HERE is a terrific analysis of New York Times economist/columnist Paul Krugman’s recent piece “How Did Economists Get It So Wrong?”. Krugman’s regular analysis have shown to be almost consistently wrong for years. Economics is a subject that is near and dear to my heart. The simple truth is that while economists can quote you terms and fancy sounding numbers, 80% of them lack the ability to connect patterns of dots and indicators to apply the knowledge with even rudimentary directional accuracy. Only 20% of economists saw recent the bubble and collapse coming in spite of the fact that Dr. Friederich Hayak won the Nobel for Economics in part for his work on economic bubbles.

Even as an undergrad (albeit told a gifted one) I have debated PhD.’s in economics and defeated them with relative ease. The simple truth is that economists, especially Marxist economists, are not even held to a weatherman’s standard for accuracy and accountability.  The government told us that without the special interest written (see Apollo Alliance) stimulus bill we would see unemployment in the country reach 8%. The predictable result is that with the stimulus bill we are skyrocketing towards the 10.5% unemployment rate which would even still be understated by the vast number of discouraged workers that have stopped looking for gainful employment. Where is the accountability for these Harvard and Berkeley trained pinheads?

Most government economists routinely understate the value of classic neo-liberal economic policy such as the increases in revenue often generated by tax cuts (Laffer Curve), they also greatly underestimate the damage of tax increases to the economy (game theory) and also greatly underestimate the cost of government programs (in the case of Medicare the government underestimated the cost of the program in the first 20 years by a factor of 10).

The reason that real economists such as Dr. Thomas Sowell, Walter Williams, Larry Laffer, Amity Schlaes, and John Lott have been ignored by the elite media is precisely because their economic analysis is proved right more often than it is proved wrong. They just don’t happen to be leftists.

Crossposted at Poligazette.

One Response to “Paul Krugman “How did economists get it so wrong””

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