Also, I would like to add that separating politics from economics is very problematic to put it mildly.

I read the entire paper that is criticizing Krugman. Comparing Krugman to Rush Limbaugh is absurd.

mojo wrote:

ClassicalLiberal wrote: Lucas isn't a seer, simply a good economist who has contributed a great deal to the profession. (Like Friedman before him, Keynes before him, Smith before him and all those in between I have failed to mention) Making a few misstatements isn't really worth immature cartoon caricatures and attacks. And for the record, this here is the same Paul Krugman who said that Germany, France and other mainland european countries would lag behind in recovery because their stimulus packages were considerably smaller than either the USA's or the UK's. How has that been working out? He underestimated the stabilizing power of Europes income supports in maintaining aggregate demand.

Yeah, on his blog at the Times he marveled at their ability to keep unemployment low and specifically cited Germany.

Cochran's rebuttal wrote:

It’s fun to say we didn’t see the crisis coming, but the central empirical prediction of the efficient markets hypothesis is precisely that nobody can tell where markets are going –

LOL Cochran is saying is that he predicted he couldn't predict the financial crisis. LOL Well dang, even I could do that and I don't even need to hire a team of physicists to make me a pretty graph to prove it. Personally, I think Cochran's "efficient market" theory is based more on fairy tales than he cares to admit...or did he?

Cochran predicted he couldn't predict the financial meltdown, but a lot of people could; Robert Shiller, Raghuram Rajan, Kyle Bass, Brooksley Born just to name a few. But like Krugman more or less said, the "fresh water" economists had their "beauty" colored glasses on and so all they saw were the pretty charts and graphs convincing them that their "efficient market" hypothesis was "perfect" while totally ignoring the irrational human herd effect that occurred right before our very eyes for SIX YEARS and previously during the FIVE YEARS of the dot.com bubble. The "fresh water" economists only saw what they wanted to see. Imo, Cochran is a victim of the irrational herd mentality that Krugman referred to.

Another irrational herd effect is the culture of greed permeating Wall Street, IE: recent revelations of the systemic use of insider trading in hedge funds. So if the market is so "efficient" then why has it been relying on insider trading to set prices? That isn't how 'Say's Law' is supposed to work, is it? And why would any rational thinking person think that irrational home price increases would be sustainable when wages were stagnating and historical empirical evidence says otherwise? How naive can Cochran be? Well, judging by his short term thinking and the immaturity of his rebuttal, I'd say quite a lot.

Yeah, I'd say Krugman slayed Cochran. Score one for Keynesian economics. Not that I'm a Keynesian mind you, I'm just saying. Personally I see pros and cons in most economic theories but I also tend to think of economics in general as more like fortune telling than a science. Even a broken clock is right twice a day.

http://chaospet.com/2009/09/24/143-zombie-karl-popper/

tjt517 wrote:

I read the entire paper that is criticizing Krugman. Comparing Krugman to Rush Limbaugh is absurd.

Krugman agreed with Dick Cheney on some economic issues and has made a lot of mistakes in the past and been outright wrong. He isn't anything special as liberals make him out to be. And he certainly didn't deserve the noble prize.

Is it me, or is this all a bit playground?