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Turning lead into gold

“Vote Labour and we’ll turn debt into investment”

Written by a wag on the Guido Fawkes blog in the comments on an excellent item about inflation. The great thing about that quote is that I can actually imagine some prat such as Ed Milliband, leader of the Labour Party, saying such a thing. And of course this is pretty much what Paul Krugman, Nobel Prize winning economist, probably thinks also.

Meanwhile, Niall Ferguson, the historian, weighs in on the issue of debt.

11 comments to Turning lead into gold

  • Mr Ecks

    The Ferguson article is not impressive.

    What deep cuts in the UK? The bloody debt is still going up. I presume the “cuts” are the result of our plastic -faced “leader” having to pay more interest on the debts we already have, even as he runs up another £140 thousand millions worth in the last year.

    The “cuts” have been made in such a way that leftist councils have kept all their own crew, the diversity/green/equality jobsworths and the jumped up town clerks cum £150.000 pa”CEO”‘s, while cuting libaries etc. This has enabled them to take their favourite “Thatcher, Thatcher, Thatcher” chant.

  • Johnathan Pearce

    Mr Ecks, I know the weather is hot today but keep your cool. No-one here is denying that the UK should and could be doing a lot more to cut public spending. The point is that at least the UK is – according to public pronouncements – trying to do so, and hence is getting some reward in in the bond markets. The US administration, by contrast, seems to be in denial. It is this denialism that Ferguson is targeting.

  • Larry Sheldon

    Au -> Pb innit?

  • Laird

    Indeed, Johnathan. The important paragraph is near the end:

    The real lessons for the United States are clear. Those who run up debt in good times can borrow only so much more when a recession strikes. And heavily indebted governments postpone fiscal stabilization at their peril. If you wait to reform until the bond market calls time, you are—to use a technical term from economics—screwed.

    Ferguson’s criticism of Paul Krugman is especially relevant, since Krugman seems to have become a leading voice in the cognitive dissonance wing of the economics “profession”. At the risk of hijacking this thread, it seems to me that Krugman is a deeply unintelligent man. Yes, he lucked into a Nobel Prize in 2008 (for work he did almost 30 years earlier), but even that seems undeserved. According to the Nobel Committee’s announcement, Krugman’s “seminal” 1979 article posited a radical new idea about consumer choice: “Krugman’s new theory was based on an assumption that consumers appreciate diversity in their consumption.” Now there’s a startling revelation! If it’s true, as the Committee asserts, that “at the time, this was a rather new concept in economics,” that merely speaks to the intellectual vacuity of economists, not the merit of Krugman’s vaunted “discovery”. The Committee does have the grace to note that “the basic idea is rather self-evident” (which is clearly at odds with its other statement), so it appears that Krugman’s only real contribution was some form of quantification of the concept (although I can’t find his original article, so I’m not entirely sure about exactly what he did). That might have been an adequate basis for a master’s thesis, but certainly not a doctoral dissertation and absolutely not a Nobel Prize. One can only conclude that Krugman’s Nobel has roughly the same merit as Obama’s, which awarded the following year.

    Krugman has been resting upon that one questionable laurel ever since. Personally, I’m getting rather tired of his ignorant bleatings.

  • Can someone please make Laird’s comment QOTD or something, just so it can be more easily disseminated, so as to finally debunk Krugman’s Nobelship sooner rather than later? Besides, no one in their right mind takes the Peace Nobel seriously any more – it’s high time the same happened to the economics version.

  • DavidNcl

    “The point is that at least the UK is – according to public pronouncements – trying to do so”

    Trying (yah, right) but not actually suceeding.


  • Yoda

    Do or not do. There is no try.

  • RHSwan

    From what I remember it is possible to turn lead into gold. Just bombard lead atoms with neutrons (or some other particle physics magic). It is rather expensive, think few million (dollars or pounds, doesn’t make a difference) per ounce.

    Of course that does sound like the preferred economic policy of a few politicians or pundits.

  • Jackthesmilingblack

    “A vote for Labour is a vote for Islam.”
    Nothing like a bit of pandering to the mob to raise one’s self-esteem.

  • Paul Marks

    Some people are writing articles attacking Cameron and co for not really cutting govenrment spending – using the example of Obama as someone who is cutting it (do no laugh – the editor of the Spectator has done this and so have others).

    And some people (in the United States) are attacking Obama and saying he should cut government spending – as Mr Cameron and co are doing.

    The trouble with both arguments is that they are wrong.

    If there is a good example out there (a country that is really doing the right things and has been for some time) then it does not spring to mind.

    But neither Britain or America are good examples.

    Of course J.P. is correct – the left does call government spending “investment” and so does that moron Krugman.