This also reminded me of something Charlie Munger said at the Daily Journal Annual Meeting this year when asked about QE and government involvement in the economy:
“Well, you just asked one of the most complicated and interesting questions and one of the most important questions in the whole world. Of course, nobody knows the answer -- just when too much is too much. We know you can't just start printing money to run the whole economy and stopping taxation. At some point on that road, you get a backlash, which causes anguish you don't want to get to. But how far you can go in having these Keynesian benefits and get by with it without risking that backlash, nobody knows for sure.If you're like me, I believe in giving big trouble a wide berth, so I would try and stop a little short on this. Solving my problems by printing money.Somebody like Paul Krugman, who's overdosed on mathematics, and uses the king's English better than practically anybody alive, so he's very dangerous. He just thinks there's no limit to the amount of -- he wouldn't say that, but he thinks the limit is so faraway you don't need to worry about it at all. That is not my view. But nobody knows the answer to that.”
It's an ill wind that blows no one any good. The financial crisis that came to a head five years ago with the failure of Lehman Brothers has been especially beneficial to the economist Paul Krugman. In his widely read New York Times column and blog, Krugman regularly boasts that he has been "right" about the crisis and its consequences. "I (and those of like mind)," he wrote in June last year, "have been right about everything." Those who dare to disagree with him -- myself included -- he denounces as members of the "Always-Wrong Club." Readers of his blog have just been treated to another such sneer.
Let us leave -- for the moment -- the question of the future size of the federal debt, which I have dealt with elsewhere and shall return to in a subsequent article. My purpose here is simply to challenge Krugman's right to behave in this way. Even if he were nearly always right, there would be no justification for his lack of civility. But he is not nearly always right. There is therefore no justification for his unshakeable certainty either.