Is Paul Krugman Leaving Princeton In Quiet Disgrace?

Professor Paul Krugman is leaving Princeton.  Is he leaving in disgrace? Not long as these things go before his departure was announced Krugman thoroughly was indicted and publicly eviscerated for intellectual dishonesty by Harvards Niall Ferguson in a hard-hitting three-part series in the Huffington Post beginning here and with a coda in Project Syndicate all summarized at Forbes.com.  Ferguson on Krugman:

Where I come from … we do not fear bullies. We despise them. And we do so because we understand that what motivates their bullying is a deep sense of insecurity. Unfortunately for Krugtron the Invincible his ultimate nightmare has just become a reality. By applying the methods of the historian by quoting and contextualizing his own published words I believe I have now made him what he richly deserves to be: a figure of fun whose predictions (and proscriptions) no one should ever again take seriously.

Princeton according to Bloomberg News acknowledged Krugmans departure with an extraordinarily tepid comment by a spokesperson. Hes been a valued member of our faculty and we appreciate his 14 years at Princeton." Shortly after Krugmans departure was announced no less than the revered Paul Volcker himself a Princeton alum made a comment subject unnamed sounding as if directed at Prof. Krugman.   It sounded like Dont let the saloon doors hit you on the way out.  Bub." To the Daily Princetonian (later reprised by the Wall Street Journal Volcker stated with refreshing bluntness:

The responsibility of any central bank is price stability. … They ought to make sure that they are making policies that are convincing to the public and to the markets that theyre not going to tolerate inflation.

This was followed by a show-stopping statement:  This kind of stuff that youre being taught at Princeton disturbs me." Taught at Princeton by … whom? Paul Krugman perhaps?  Krugman last year wrote an op-ed for the New York Times entitled  Not Enough Inflation.  It betrayed an extremely louche at best attitude toward inflations insidious dangers. Smoking gun? Volckers comment in full context:

The responsibility of the government is to have a stable currency. This kind of stuff that youre being taught at Princeton disturbs me. Your teachers must be telling you that if youve got expected inflation then everybody adjusts and then its OK. Is that what theyre telling you? Where did the question come from?

Is Krugman leaving in disgrace? Krugman really is a disgrace … both to Princeton and to the principle of monetary integrity. Eighteenth century Princeton (then called the College of New Jersey)president John Witherspoon wrote in his Essay on Money:

Let us next consider the evil that is done by paper. This is what I would particularly request the reader to pay attention to as it was what this essay was chiefly intended to show and what the public seems but little aware of. The evil is this: All paper introduced into circulation and obtaining credit as gold and silver adds to the quantity of the medium and thereby as has been shown above increases the price of industry and its fruits.

Increases the price of industry and its fruits?"  Thats what today is called inflation." Inflation is a bad thing.  Period.  Most of all it cheats working people and those on fixed incomes who Krugman pretends to champion.  Volcker comes down squarely with Witherspoon on the side of monetary integrity. Krugman cloaked in undignified sanctimony comes down again and again on the side of … monetary finagling. Krugman consistently misrepresents his opponents positions constructs fictive straw men addresses marginal figures and ignores inconvenient truths set forward by figures of probity such as the Bank of England and the Bundesbank thoughtful work such as that by Member of Parliament (with a Cambridge Ph.D. in economic history) Kwasi Kwarteng and right here at home respected thought leaders such as Steve Forbes and Lewis E. Lehrman (with whose Institute this writer has a professional affiliation). Professor Krugman on July 7 2014 undertook to issue yet another of his fatwas on proponents of the classical gold standard.  His New York Times op-ed Beliefs Facts and Money Conservative Delusions About Inflation was brim full of outright falsehoods and misleading statements. Krugman:

In 2010 a virtual Whos Who of conservative economists and pundits sent an open letter to Ben Bernanke warning that his policies risked currency debasement and inflation."  Prominent politicians like Representative Paul Ryan joined the chorus. Reality however declined to cooperate. Although the Fed continued on its expansionary course its balance sheet has grown to more than $4 trillion up fivefold since the start of the crisis inflation stayed low. … Many on the right are hostile to any kind of government activism seeing it as the thin edge of the wedge if you concede that the Fed can sometimes help the economy by creating fiat money" the next thing you know liberals will confiscate your wealth and give it to the 47 percent. Also lets not forget that quite a few influential conservatives including Mr. Ryan draw their inspiration from Ayn Rand novels in which the gold standard takes on essentially sacred status. And if you look at the internal dynamics of the Republican Party its obvious that the currency-debasement return-to-gold faction has been gaining strength even as its predictions keep failing.

Krugman is of course quite correct that the return-to-gold faction has been gaining strength. Speculating beyond the data thereafter Krugman goes beyond studied ignorance.  He traffics in shamefully deceptive statements. Lewis E. Lehrman protege of French monetary policy giant Jacques Rueff Reagan Gold Commissioner and founder and chairman of the Lehrman Institute arguably is the most prominent contemporary advocate for the classical gold standard.  Lehrman never rendered a prediction of imminent runaway inflation."  Only a minority of classical gold standard proponents are on record with dire" warnings certainly not this columnist.  So… who is Krugman talking about? Of the nearly two-dozen signers of (a fairly mildly stated concern) open letter to Bernanke which Krugman cites as prime evidence only one or two are really notable members of the return-to-gold faction." Perhaps a few other signers might have shown some themselves in sympathy the gold prescription. Most however were and are agnostic about or even opposed to the gold standard. Indicting gold standard proponents for a claim made by golds agnostics and opponents is a wrong cheap bad faith argument.  More bad faith followed immediately.   Whatever inspiration Rep. Paul Ryan draws from novelist Ayn Rand Ryan is by no means a gold standard advocate.  And very few influential conservatives" (unnamed) draw their inspiration" from Ayn Rand. Nor are most proponents of the classical gold standard motivated by a fear that paper money is an entering wedge for liberals to confiscate your wealth and give it to the 47 percent."  A commitment to gold is rooted for most in the correlation between the gold standard and equitable prosperity.  Income inequality demonstrably has grown far more virulent under the fiduciary Federal Reserve Note regime put in place by President Nixon than it was for instance under the Bretton Woods goldgold-convertible-dollar system. Krugman goes wrong through and through.  No wonder Ferguson wrote: I agree with Raghuram Rajan one of the few economists who authentically anticipated the financial crisis: Krugmans is the paranoid style in economics. Krugman perversely standing with Nixon takes a reactionary not progressive position. The readers of the New York Times really deserve better. Volcker is right. The responsibility of any central bank is price stability." Krugman is wrong. Prof. Krugman was indicted and flogged publicly by Niall Ferguson. Krugman thereafter announced his departure from Princeton.  On his way out Krugman it appears was reprimanded by Paul Volcker.  Krugman has been a disgrace to Princeton.  Is he leaving Princeton in quiet disgrace?