What Will Bob Murphy Accuse Krugman of Next?

     Each blog title seems to be a further escalation against Krugman. His last post accused Krugman of "loving booms"-terrible thing! We should all love stagnation like Tyler Cowen.

     http://diaryofarepublicanhater.blogspot.com/2013/03/bob-murphy-takes-on-krugman-defender.html

      Now Krugman is accused of ignoring the massive suffering of the Civil War and the depression that started in 1873. How's this for a reach:

      "In a post titled, “Debasing Lincoln” Krugman writes:

Greg Sargent catches John Boehner invoking none other than Abraham Lincoln to inveigh against the deficit. This is pretty funny — in multiple ways.

One is the whole notion of relying on Lincoln as an authority on economic policy. Why should we believe that a lawyer speaking in 1843…knew what we should be doing about an economic slump…170 years later?

Then there’s Greg’s catch: Boehner truncated the quote, leaving out the part where Lincoln called for balancing the budget by raising taxes. And also the point that Lincoln was actually a big government interventionist for his time, a strong advocate of what we would now call industrial policy.

But wait: there’s more. Lincoln’s most dramatic departure from standard economic policy was … drumroll .. debasing the currency (pdf). Here’s the dollar price of gold:

True, he did it to pay for a war; but do you think a 19th-century version of Paul Ryan would have stroked his immense beard and said “Well, under the circumstances, letting the dollar fall to a third of its gold parity is OK?”

Actually, the greenback experience is interesting, mainly for two reasons: nothing terrible happened despite 15 years off the gold standard, and despite this fact all the Very Serious People continued to believe that going off the gold standard was a terrible, terrible thing. It doesn’t much raise your hopes that they’ll learn from recent failures. [Bold added.]

       "Wow, where to begin?"

       "First, note the irony here. Krugman is chastising John Boehner for not realizing that Lincoln was a tax-raising, big government advocate of industrial policy, who also debased the currency. And yet, when Tom DiLorenzo was a witness for Ron Paul’s monetary committee, Krugman summarized the episode with a blog post titled “Johnny Reb Economics.” His good buddy Matt Yglesias had an even more inflammatory title, “The Strange Case of Pro-Confederate Monetary Policy.” (In fairness, maybe the editors at ThinkProgress pick their blog post titles.) So it seems if you call Lincoln a big government fascist, you get your head bitten off, and if you cast Lincoln as a small government conservative, you get mocked. Tough crowd, these progressive bloggers."

       "But that’s just incidental. The real jaw-dropper in Krugman’s post above, is his claim that “nothing terrible happened” from 1862 to 1878, and that therefore the Very Serious People who worried about Lincoln going off gold are proven wrong once again."

       "Naturally, there was the whole Civil War (aka War Between the States aka War of Northern Aggression), with hundreds of thousands of people dying. So obviously the economy was in awful shape during these years."

        "NOTE: I am not saying, “Krugman thinks hundreds of thousands of people dying is no big deal!” No, what I’m saying is that he isn’t in any way looking at any kind of metric when he says “nothing terrible happened.” That is a throwaway line, anchored to jack squat. For one simple example, the last time I looked up the stats, I ballparked cumulative price inflation in the North at about 75 percent from 1861 to 1864, for an annualized rate of 20 percent for that three-year stretch. (It was far worse in the Confederacy of course, just proving how ridiculous it is to say Tom DiLorenzo was a fan of Confederate monetary policy.) Isn’t that the most obvious “terrible thing” that a gold bug would bring up? Yet Krugman doesn’t even bother to tell us anything about prices; he just assures us “nothing terrible happened.”

     http://consultingbyrpm.com/blog/2013/03/krugman-ignores-massive-human-suffering.html#comments

      Ok. What's next? He's going to play the Nazi card. Indeed in the comments he did:

       " It’s akin to when people mock those who said (when Britain went off gold in the early 1930s) that it was the end of Western civilization. As if the events of the 1930s and 1940s couldn’t plausibly be classified as the end of Western civilization."

         Yet in the comments, the alleged Keynesian Daniel Kuehn was defending Murphy from my attacks:

         " Dude – he’s not making a case for the gold standard here. He is criticizing the quality of the case made by Krugman against it."

          "I agree Bob’s smoking guns are often quite flimsy – and I don’t think this is a smoking gun either for any kind of deeper problem that is unique to Krugman. But I think you’re barking up the wrong tree here."

          Well, look. The fact that both Daniel and I go by the name "Keynesian" in some way doesn't mean we always have to agree-he is more of a New Keynesian anyway and probably a little more conservative than I am. I wonder if he somehow is desperately wanting the approval of these Austrians. Yet I stand but what I said. Murphy is acting as an apologist of the gold standard. If you really thought he made a point in the Krugman argument notice what he did in the comment about WWII. He's suggesting that the gold bugs in the early 30s were right-or at least weren't wrong because WWII happened. 

           As usual then, Murphy is taking all kinds of liberties with the correlation-causation distinction. Because Britain got off the gold standard in 1931 and was in WWII in 1940 this proves the gold bugs were right-or suggest they weren't wrong. This idea that "well they at least weren't obviously wrong" is classic concern trolling where he sneaks in his gold buggery apologetics through the back door. Much as he got in his confederacy apologetics through the back door:

         "Naturally, there was the whole Civil War (aka War Between the States aka War of Northern Aggression), with hundreds of thousands of people dying. So obviously the economy was in awful shape during these years."

          At most, Daniel is admitting that Murphy's case is flimsy, just that he doesn't think Murphy is actually apologizing for the gold standard here. It's a rather tendentious distinction. At the end of the day, though, Murphy is quibbling over some pretty small beer. I've got to assume that if he had better arguments to make against Krugman he'd make them.