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Where the Elite Meet to Swallow Bitter Pills

Where the Elite Meet to Swallow Bitter Pills

Since the presidential debate last week I’ve been trying to remember where I saw this movie before, as it were—where a man considered a member of the elite, the cognoscenti, whose brilliance is considered by millions of admirers to be self evident and unimpeachable, got his clock thoroughly cleaned by someone speaking in plain, commonsense language; and the elitist reacted to being challenged by one of his presumed inferiors with utter petulance.

Where had I seen this?  I just couldn’t place it.

Then reading Taranto’s column today, I noticed his quip about Mary Matalin’s schooling someone prominent, a member of the elite, the cognoscenti, etc., telling him, “You’re hardly credible on calling somebody else a liar.”  That someone was Paul Krugman, and Matalin’s accurate riposte triggered an answer to where I’d seen the movie before.  It was indeed a movie (of sorts): a Youtube of Paul Krugman at a conference in Spain earlier this year as one of a few invited economists.

After Krugman delivers his remarks, Spanish professor Pedro Schwartz (of the Austrian school) surgically demolishes Krugman’s arguments while Krugman, sitting behind him, can’t hide his discomfort and displeasure.  Then when Krugman does speak again to respond, it’s with veiled outrage at having his arguments revealed as foolishness.

Professor Schwartz remains calm and respectful throughout, letting facts and numbers speak for themselves.  Krugman, however, can’t hide his petulance or thin skin.  About the only difference in Krugman’s reaction and Obama’s is that Krugman refused to shake the victor’s hand.

The whole thing is worth watching when you have an hour.  If you want just a quick box of popcorn entertainment, fast forward to about 39 minutes.

We can only hope that Romney again plays the role of Schwartz next week.  But it will be a complete surprise, and devastating letdown, if Paul Ryan doesn’t do it Thursday night.


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casualobserver | October 9, 2012 at 10:07 am

I don’t deliberately search out broadcasts the include Krugman. But I’ve still seen my share. And I cannot think of many if there is any challenge whatsoever, even if blandly mild, where he isn’t petulant and condescending. Plus, he has unmistakable tells, I think, showing either his lack of confidence in what he is saying or his mania when challenged. The more his eyes dart and the more he fidgets with his hands, sometimes at near hummingbird speed…, the more obvious he is. Only when he is allowed to deliver a soliloquy as if a sermon, does he seem calm.

So this event in Spain will likely be no different and will be beautiful to watch when I have time.

I was thinking about the Schwartz video when I saw Mary Matalin take on Paul Krugman. Schwartz was masterful but Matalin came close enough to merit inclusion in the top Krugman take downs ever category. Krugman gets that same bug-eyed expression in reaction to both – priceless.

legacyrepublican | October 9, 2012 at 10:10 am

Poor Prof. Krugman. Feeling so put down for not being intellectual enough or having the right credentials.

He must have put a silver foot in his mouth.

I need a hanky, snif, snif …. plus something to pick up the popcorn off the floor because I was laughing so hard at how he handled himself after Schwartz tore him to ribbons.

Well, come to think of it, this video is a better way to create demand for a quicker picker upper versus by a government subsidy.

The Paul Krugman school of economics: shoot from the lip first, ask for a mop later.

Libertarian Advocate | October 9, 2012 at 10:48 am

legacyrepublican: Popcorn and comedy are a dangerous mix to which I can attest. Always make sure you are with someone who knows the Heimlich maneuver when mixing popcorn and very funny material.

From Hollywood- “Being There” with the remarkable Peter Sellars!

Chauncey Gardiner foreshadowed the rise of Barack Obama.

Paul Krugman is to Economics as a witch doctor is to the AMA.

    Actually, given the AMA’s shameful advocacy for Obamacare (like AARP’s), the more correct analogy would be: Economics is to Krugman what the practice of medicine is to the AMA.

Krugman was questioned towards the end of the video, about an article he wrote in 2002, actually advocating that Greenspan create a Housing Bubble to take the place of the Nasdaq Bubble. Krugman brushed the question off, saying that he was only joking in that article. I found it quite amusing, and so did the questioner, who chuckled to the person next to him. I searched out the article, which is written in typical hyper-partisan Krugman style, and did not pick up on his “joke”. Maybe someone else can see it?!? In any case, it is frightening to think that a handful of economic academics have the power to shape thinking, push demand-side and demonize supply-side, all with the help of the press.

Watching Krugman squirm when it was pointed out that his speciality in international finance was completely irrelevant to economic analysis. It would be like a doctor that specialized in foot fungus treatment trying to weigh in heart surgery as AN AUTHORITY. Krugman goes on to say that the other side is illegitimately “de-credentializing” him. First off that wasn’t the biggest blow he suffered, he was basically called a economic novelist with a speciality in science fiction romance. Schwartz correctly points out that saying that someone using a credential earned for something other than what one was weighing in for is an absurd use of “appeal to authority” debating tactic. So its not “de-credentializing”, he is simply saying the credentials he does have aren’t relevant to the discussion at hand. This is very important, because without that nobel credentials, Krugman sounds less like a very intelligent man trying to explain something deeply confusing and counter intuitive (eg demand driven government allocation of resources), and starts sounding like a raving lunatic trying to convince you the voices in his head are indeed real.

Skip into the debate, during Krugman’s presentation, he talks about that the root problem in Europe is that Europe is “uncompetitive”. There is no real reason Europe is uncompetitive, its just that they are, and thus we have to spend tons of money on bailouts. Which makes this interesting is that Schwartz appears second and immediately answers and gives the reason why Europe is uncompetitive. Its simple, Europe is inefficient and wasteful with its capital investing heavily in demand driven policies (eg high taxes and government directed economy). Schwartz then points out how wasteful all the countries have been in their stimulus programs, diverting capital from productive capital to wasteful giveaways. When he talks about Supply driven economics, which means if you produce more your automatically wealthier as a society, because the more you produce, the more you have to share with one another. This means a smaller and more efficient government and more robust private sector. It was a logical, concise mystery free presentation. Schwartz schooled Krugman and like a miserly troll Krugman sniped back. delicious, it was like lord of the rings except at a spanish economic conference.

I listened to the first set of exchanges. I am neither a supply sider nor an aggregate demand person – since both are grossly simplistic views. IMHO Prof Schwartz did not actually tear apart Krugman’s position – though I wish someone would. He essentially missed the critical issue that should be a central tenet of the Austrian School – the possibilities and incentives for fundamental innovations and changes in the nature of entrepreneurial expectations. I am reminded of the misinterpretation of Henry Ford’s policy of increasing his workers pay so that they could afford to buy his car. What is essential in this economic anecdote is that his workers had places to go and placed a significant value on their ability to save time in getting there.
The weakness of Krugman’s solution in my opinion is that it dramatically increases the likelihood that entrepreneurs will stand on the side line or look for profit via rents and the modern equivalent of cartels and government sponsored monopolies. Romney’s proposed policies of enabling energy independence by pursuing existing fossil fuels will do far more than Government investments hole digging and hole filling, not to mention the equivalent of perpetual motion machines, i.e., wind and solar.

My only problem with the comparison is that Krugman was a highly regarded economist at some point – before he went off the rails. Obama, by comparison, is a wholly manufactured entity. His elitist arrogance strikes me as being the result of confusing his innumerable participation trophies with actual achievement.

“VISUALIZE VICTORY” for Ryan, for Romney, for the Republic.


Thus, our favorable comments, our public and private speech in support of Ryan [and many, many others in federal, state, and local levels], our CONTRIBUTIONS, and our PRAYERS to the God of Our Fathers serve to GENERATE POWER, AND INVOKE POWER FROM THE HEAVENS.

There is a stone rolling down the mountain whose direction and force is INCREASING SO QUICKLY that it WILL NOT FAIL TO CRUSH FREEDOM’S ENEMIES–within and without our Republic.

Your wonderful web site quotes a Master, Winston Churchill, whose most famous speech included these inspired words:

“We shall go on to the end. We shall fight in France, we shall fight on the seas and oceans, we shall fight with growing confidence and growing strength in the air, we shall defend our island, whatever the cost may be. We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender, and if, which I do not for a moment believe, this island or a large part of it were subjugated and starving, then our Empire beyond the seas, armed and guarded by the British Fleet, would carry on the struggle, until, in God’s good time, the New World, with all its power and might, steps forth to the rescue and the liberation of the old.”


Henry Hawkins | October 9, 2012 at 1:29 pm

Say what you want about Krugman, he was funny as hell opposite Tony Randall in The Odd Couple.

Just had time to watch a couple minutes. Now I really look forward to watching the whole thing, maybe this weekend.

With a name like Pedro Schwartz, it just has to be good.

LukeHandCool (who, speaking of long videos and journeys and awkward segues, just a couple weeks or so after his disastrous bicycle journey to the southern tip of Honshu, decided to embark on a new bicycle journey headed north this time, to conquer his fears. So, one morning, he set off for the prefectural capital of Yamaguchi. After the long, strenuous ride, Luke remembered to steer clear of alcohol this time. He also watched the sky to make sure there was no hint of rain, and he watched the time carefully. But after sightseeing around the city, he parked himself on a park bench and proceeded to fall asleep. Luke awoke, perhaps an hour or so later, to find a disheveled, suspicious-looking young Japanese man sharing the park bench with him. Luke got up to stretch, and found that, once again, he had overdone it, and his knees felt like they were seizing up on him. He sat back down, sadly contemplating the painful ride home, berating himself with thoughts of, “When will I ever learn? Why do I do this to myself?” when the young man sharing the bench started speaking to Luke in almost incomprehensible English. Luke was not in the mood to be the victim of some bored young man’s desire to practice his textbook English. Luke thought about faking a German or French accent and saying something like, “Me … no English. English me no.” But Luke thought that with the luck he had on his bicycle journey days, if he pretended to be from Portugal, the young man would no doubt turn out to be a former exchange student in Lisbon, fluent in Portuguese. So Luke forced a smile, and for 20 minutes or so, endured the young man’s English-tainted gibberish. It got to be too excrutiating, so Luke politely told the young man he had to head back home. The disheveled little personal-space invader then wanted to exchange phone numbers. Luke told him he didn’t have a phone. Then he wanted to exchange addresses. Luke assured him he hadn’t remembered his address yet. He just knew by natural landmarks how to navigate his way to his apartment. The final straw was when the bench squatter pulled something from his pocket. It was a package of cough drops. He waved the package in Luke’s face, insisting, “Doozo, doozo!” (“Take some. Take some!”) Luke looked inside the package … there was one single cough drop left … completely covered in lint. On the physically agonizing ride home, Luke nonetheless enjoyed the sweet feeling of escape. And he tried to imagine the young man’s dinner table telling later that evening about the rude foreigner he’d met in the park who refused his offering of a sweet treat).

When I saw this video I was struck by how Krugman disowned the resulting debt from Keynesian borrowing as not part of Keynesian economic theory. I liken it to talking someone to jumping out of a window but then disowning the fact of the victim hitting the ground.

Best Schwarz line (after about 35:00 for those that like to skip around) : “Often, Nobel Prize winners attempt to pontificate on matters that are outside the speciality in which they have excelled. And they have this mantle of authority whereby whatever they say, sensible or perhaps a bit outre, is accepted with resignation by some and enthusiasm by others.”

Second best (at 1:47:30 or so): “I feel that when I am in one of these discussions, or read one of the interesting articles in the newspaper that publishes Prof. Krugman’s articles, that I am in the wrong, the morally wrong, and sort of morally inferior, and the people who care for the unemployed, and care for growth are morally superior because I care for something else.”

The former speaks to Krugman’s hubris, and the latter speaks to the NYTimes bias.

Kudos to Prof. Schwartz for the elegant and effective slap down of Krugman and his ilk.