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Posts Tagged ‘Peter Schiff

Robert Murphy vs Paul Krugman

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I wanted to use Robert Murphy of the Austrian School of Economic vs Paul Krugman the Nobel Laureate King of Keynesianism as the title for this post, but I was afraid that it might be a little bit too long, although it does give you a better idea of what the essence of this is.

Paul Krugman, for anyone who has ever read his pieces in the New York Times or has seen the attempts of Austrians to argue against his positions, will know that he at times has taken some swings after Austrians, for instance calling Austrian Theory “a theory that I regard as being about as worthy of serious study as the phlogiston theory of fire“. While he may very well be right to think so, one could question why he won’t debate anyone of the Austrian School. Peter Schiff has repeatedly challenged Paul Krugman straight out, saying for instance that he should return his Nobel Prize, because he doesn’t understand economics, and Andrew Schiff, Peter’s brother, has even tried to come in contact with Krugman to make arrangements for such a debate. All Krugman would have to do was to meet up and slaughter Peter Schiff in front of everyone, with the world as his witness. Instead, Paul Krugman tries to take easy jabs now and then, with pompous comments like “I do know that I keep being told that Peter Schiff has been right about everything; so, how’s that hyperinflation thing going?

The latest attempt at luring Paul Krugman out of his cave comes from Robert Murphy, a fairly ‘recent addition’ to the long line of scholars in the Austrian School of Economics, one who at several occasions has taken on Paul Krugman’s arguments in his articles and seems to be well acquainted with the content of a possible debate.  What is unique with his attempt is its appeal to emotions and moral conscience. Currently, only 5 days after the challenge has been made, almost 29,000$ has been put into the pot to see a debate between Robert Murphy and Paul Krugman happening.

“Why is there money involved?” I hear you ask. The idea is to raise as much money as possible that will be donated to the Fresh Food Program of FoodBankNYC.org.

Food Bank For New York City works to end hunger and increase access to affordable, nutritious food for low-income New Yorkers through a comprehensive group of programs that combat hunger and its causes.

There is a hunch, however: The money will only be donated if and when Paul Krugman accepts to debate Robert Murphy for one hour. These are the terms:

See Paul Krugman debate Robert Murphy on Keynesian versus Austrian business cycle theory! Moderated by Ezra Klein, or another moderator of mutual choosing.

If this objective is met, then the money (after 5% to The Point) will go to the Fresh Food Program at FoodBankNYC.org.

Why the Food Bank For New York City? Well, why not? It’s as good a cause as anything else, and since Krugman just happens to write in the opinion pages for The New York Times it probably just fits the occasion, not to mention that this would be a very nice present in the upcoming holiday season for the hungry men, women and children of New York. If 100,000$ were to be raised, that means 95,000$ cash in food for the hungry, and all Paul Krugman would have to do is meet up at the Mises Institute in Alabama, skewer Robert Murphy like a sow at the buffet, cash the money for FoodBankNYC and get back on his plane home. Even his supporters and academic equals would hound on him to accept.

That is why it will be quite hard to see how Paul Krugman could ignore this offer if it becomes big enough. Think about it, how could anyone ever say “No, I will not be ‘tricked’ into doing something I have regarded as too easy for all these years, because I do not care enough to do something that could feed the hungry of New York”? Unless, of course, it is an awful (or even evil) person, or at the very least wishes to be regarded as one by everyone else.

What do I think? It’s quite unique and it could get huge. I urge everyone to put down some money, even if it’s just a small amount. Everyone can afford 10$, and for Americans it’ll even be tax deductible. Remember, you will not lose the money unless Paul Krugman accepts the challenge. But will he? While it might be hard to see how he can ignore this, I’m quite certain the odds for you keeping your money is high. No matter how big it gets, he’ll act like this doesn’t exist, that he hasn’t had the time to read all the comments and mails he receives that urges him to accept, because he’s such an important person and hasn’t had time for that, or he’ll disregard it as some kind of hoax/set-up/scam if he ever actually gets faced with it. Let’s be frank, he’s somewhat of a coward when it comes to debating Austrians.

So I do not keep my hopes up high, but I’m as hopeful as ever. Let me make it clear that I’m not necessarily thinking this is gonna be some kinda “blood-fest” where “my Austrian guy” will shred the “Keynesian fool” to pieces. While I may think Paul Krugman is a fool, he’s also a smart one, even if he doesn’t know economics – like his “Princeton brother” over at the Federal Reserve. I’m actually hoping for an informative, educational and interesting debate where you would truly see two different ways of understanding the world try to make their cases and reveal weaknesses in each others sides, and perhaps give the audience something to think about. I for one enjoy listening to a spoken debate much more than seeing two sides battle each other over blog posts in a chaotic fashion. It’s much more dynamic and real, even if it might be viewed as unfair to some, since a lack of charisma will shine through a lot easier and will appear to weaken the power of the argument. I do have to admit my opinion that I do not find Robert Murphy to necessarily be the most charismatic of speakers, at least not compared to a person like Peter Schiff, who with his many comedic metaphors and stories would render Paul Krugman a dull zombie, but he is a genius, and while he may not have the speechcraft of a politician, it should be noted that Paul Krugman really isn’t the most eloquent speaker around either, at least not from what I’ve seen of him, so I think it’s much more fair and honest this way (not to mention more likely to happen). They’re not embarking on any political campaigns after all. Sadly, though, it will not gather the same publicity as it would with Peter Schiff, but you give some and take some.

I nonetheless think Robert Murphy is more than well up for the task, and he has at the very least found a very interesting and powerful way of making this happen. Time will tell if it will ever become a reality.

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Will President Obama Serve A Second Term?

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Official presidential portrait of Barack Obama...

Two term President Barack Obama?

Political debates and forecasts are as heated and “in the air” as never before, and one question surfacing is whether or not President Obama will be elected for a second term in 2012. It’s an interesting question both in terms of political strategy and economic policy, regarding the troubles and toils America is faced with, not to mention the distress among people animating itself in Tea Party rallies and anti-establishment candidates rising up before this 2010 election.

At the first glance, many would probably think President Obama wouldn’t be elected for another term, simply because so many people are worried about the economy and future, and also because we’ve yet to see things turn around for the better. Then again, President Obama is still quite popular, although his popularity in America has surely withered some since he came to power. Gallup recently reported that for the first time in his presidency there are more people who regard him unfavorably than favorably, but he is still on par with many presidents before him, like Ronald Reagan and Bill Clinton, who were both quite popular two term presidents. Obama as a person is also likable, tolerant and well spoken – much like the two others mentioned, and such charisma can go a long way.

But unlike all other elections for the past three decades, there is one issue that may trumph everything else put together the next time around: the economy. Unlike how this issue has been debated during the recent years, the coming debate will not only revolve around creating jobs or trying to get us out of a recession; the debate this time will be about the causes of economic downturns, the role of government in said economic downturns, how government and the Federal Reserve destroy more than they create, and how government burdens coming generations with a devalued dollar, huge and misguided government programs and gross deficit spending. On this issue there is one future uncertainty that can wreck all of President Obama’s chances for reelection, or may very well save his political tooshie: Will he and the Federal Reserve Chairman, Ben Bernanke, be able push the coming depression enough ahead of them to avoid having to face judgement before the next election?

The reason everything depends on this fact is that despite what the White House and many Ivy League economists would have you believe, the economy simply isn’t recovering and hasn’t seen any true growth for possibly the past 10 years. The actions of the federal government echoes those in the 1930s; actions that exacerbated the problems and created a depression lasting for much longer than necessary. The view that government cause economic turmoil and exacerbate the problems is supported by those who warned about and forecasted the Great Depression of the 1930s and those who warned about and forecasted the Recession of 2008 by explaining exactly what would happen if government would act in the way it indeed ended up doing. Now as then, we have seen a federal government help inflating an economic bubble and help fueling the fire by increasing the money supply and intervening in markets, and we have seen a federal government attempting to keep the bubble from bursting as it must, or re-inflate it if it does, expanding the reach of government power and burdening the citizens and the private sector with more taxes and weakened purchasing power. One key difference, however, is that America in 2010 has the biggest deficit of any nation on the planet throughout history. This was not a worry people had to take into consideration after the second world war when America emerged to become the greatest creditor nation in the world. To put it differently: The private sector is sucked completely dry this time around, unlike in the 40s and 50s when they had plenty of juice to serve.

If the answer is ‘yes, they will be able to push the depression enough ahead of them to let President Obama campaign on being the savior, rather than a clown’, then you can expect the following words to be the core of President Obama’s strategy in the coming campaign:

We just went through the worst economic downturn since the 1930s, but we were able to avoid another depression. We’re still recovering, but I tell you this: had it not been for the quick, decisive and necessary actions by government, it would have been much worse. That is why it’s important for us to not disrupt the recovery at this point. We must stay our course and do what is necessary, because we will face disasters much worse if we lose our focus now.

Author’s comment: I have a feeling I will be able to quote myself on this in 2 years time, and if I’m not already worrying enough, this makes me truly worry about how life will be in 6 years. It took only 6 years to lay Europe completely to waste 70 years ago, after all. Humanity may not have learned from history when it comes to economic issues, but you better well hope that humanity have learned enough from history to not start another world war over it.

It’s not hard to imagine that he will be able to win in 2012 based on this. Of course, President Obama, with the help of Chairman Bernanke’s printing press, is only delaying the inevitable. But if President Obama serves another term and continues his current policies, we will be faced with troubles much worse than what we see now, something not he nor his possible successor will ever be able to explain away, which may by 2016 unfortunately result in the possibility of civil unrest and a large portion of the population with complete distrust in the political system. It’s important to note, though, that the possible civil unrest may not necessarily be aimed at the President in particular. Echoing the tendencies of the Tea Party rallies, you are more likely to see it aimed at Washington in general, but fueled by economic distress rather than any political disagreement. It will not matter who they are and what party they belong to; if they have been in Washington for some time they will be blamed for all the horrors. They can only hope, for their twisted political sake, that people will forget instead.

However, if the answer is ‘no, we will clearly see the storm coming over us before the next election, the depression has become a fact rather than a possibility, and economic distress will sweep the country into fiscal responsibility’, we will likely not see President Obama serving a second term, depending on the Republicans being able to nominate a true fiscal conservative that will stay true to his words. Throughout history Americans have always tended to change their leaders when faced with economic turmoil. Americans have also always elected the candidate campaigning peace and diplomacy when exhausted by continuous wars. This time we are faced with both extremes at the same time, much more so than any other time since the second world war. The sad part is that we this time around do not have a party that advocates peace and thus cannot advocate real fiscal responsibility.

Democrats have never truly advocated that America should stop their military interventions around the globe. Bill Clinton frequently deployed the military on glorified missions to police the world, and President Obama never kept his promise of leaving Iraq, even advocating for an expansion of the war in Afghanistan throughout his whole campaign and to this date. Republicans on the other hand have constantly been advocating military expenditures since the days of the Cold War (Reagan’s Peace Through Strength), and have long been advocating military intervention, especially since 9/11 (Bush’s War On Terror). Not willing to build down the military imperialistic character of the United States, Republicans face a hard task in promoting the necessary fiscal responsibility to tackle the deficit and let the country climb out of an economic depression. Some are calling for the possibility of a third party candidate rising to the occasion, but taking into consideration the numerous laws biased in the support of the current two-party-system, we are not likely to see a third party candidate do anything more significant than stealing just enough votes from one candidate that the other will get ahead, if we were to face a close election.

What do I think? For non-interventionist small government advocates there has never been a better chance in recent history to spread their message of peace and economic freedom, but gathering the people around one candidate that can sway the minds of Americans will be the true task at hand, and it will be crucial for their goal of economic recovery to elect a president with the integrity to stay clear of political corruption and avoid falling for the temptation of turning on the voters when in office, like so many presidents have done in the past; a president that has the courage to clean out the administration and bureaucracies of established “big government values” that will disrupt any attempts of restraining the federal government by building down Washington and pull back the interventionist powers of the executive branch.

At present time there is still only a single politician in America that fits this description, and by 2012 his name is sure to be on everyone’s tongue, but only time will tell if politicians, voters and the political system in general will have the courage to bite the dust and wholeheartedly support him, and if his vitality and mind will stay as young and vibrant through a possible campaign and presidency as it is today, considering his age. I will let time be the judge of this.

Written by Morten Rolland

October 24, 2010 at 7:33 am