On July 23, 2020, CNBC published an article by Elizabeth Schulze headlined: Here’s why economists don’t expect trillions of dollars in economic stimulus to create inflation.
That one didn’t age well, did it?
SchiffGold’s It’s Your Dime features “straight talk” interviews with movers and shakers in the world of precious metals, investing and economics.
In this episode, host Mike Maharrey talks with economist Bob Murphy about his Contra Krugman book, how Keynesian economics goes off the rails, the time Paul Krugman ridiculously compared HealthCare.gov to UPS, the trade war, the gold standard and the Great Depression, Bob’s favorite Krugman flip-flops, and more.
A recent Paul Krugman New York Times column praised the success of the Keynesian macro model in the wake of the 2008 financial crisis. In his view, the Federal Reserve did exactly what was necessary – pushed interest rates to zero and launched rounds of quantitative easing to jumpstart demand. As Tom Woods and Bob Murphy put it in a recent episode of the Contra Krugman podcast, “we agree that Krugman’s model did great…if we overlook all the times it blew up in his face.”
As is typical of Keynesians, Krugman ignores the side-effects of Federal Reserve policy. It works for a while, but it perpetuates the boom-bust business cycle. Sure, the economy today seems to be booming, but there is a rotten underbelly that most everybody in the mainstream seems to be ignoring. Peter Schmidt offers a succinct breakdown of Keynesian-based Fed policy and reveals why its doomed to failure.