Bitcoin Rally Produces an Inane Comment By Paul KrugmanSubmitted by jrd3820 on Tue, 04/09/2013 - 12:03
I am not a bitcoiner (I just never felt like I understood it well enough to jump in), but I found this today and thought it was interesting. Paul Krugman and Tom Woods weigh in on bitcoin here.
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April 9, 2013 | Author Pater Tenebrarum
Via Paul Krugman's fawning echo chamber over at 'Businessinsider' we have become aware that he has recently seen fit to comment on Bitcoin. Krugman's comment consists essentially of the Keynesian nostrum according to which A) currency becoming more valuable is 'bad' and B) 'hoarding' of money is generally 'bad'.
Our first reaction to such abject nonsense would be: apparently Krugman has never bought a computer or a cell phone in his life. According to the theory he espouses above, almost no-one has. After all, there has been a huge 'deflation' in the prices of these things. As we have pointed out recently, in the mid 1980s one could buy a 'super-computer' featuring a 105 MHZ CPU and 128 MB of RAM for $16 million in 1980 money (roughly a cool $53 million in today's money). The 1.2 gb hard drive that came with it, big as a wardrobe, set you back another $270,000 ($885,000 in today's money). Such a device, if you could still buy it, would probably cost $15 today, plus the cost of the housing and the power supply, which would likely exceed the cost of the electronic components markedly.
According to Krugman's theory, the best that could have happened to the economy would have been if such a computer really did set you back by $53 million today. People would positively fall over themselves buying it!
So much for Keynes beliefs on 'deflation' and Krugman's regurgitation of same.