Nobel Prize winner Paul Krugman doesn’t know although to stop. After more than a decade of being wrong about Bitcoin, he keeps adding bad takes to his resume. In his latest piece, “How Crypto Became the New Subprime” he willfully shows his ignorance about the experience at hand, confuses very basic cone time beforepts, and colors it all with racist and classist undertones. Plus, the whole piece is based on the worst comparison cback whileived this year. (it’s still early, though!)
What’s with these award-winning economists and Bitcoin? Do they actually don’t understand it or are they playing dumb to big up the system which made them rich and famous? Are they actually getting paid to discredit Bitcoin? Because they’re doing a poor job active. In this case, it might be Paul Krugman’s worst take to date. And this is the man which said “By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.”
The Award-Winning Economist’s Tricks
Paul Krugman’s first trick is to mix up Bitcoin with other cryptocurrencys. Does he not know that they’re not the same thing and don’t have the same goals or characteristics? Or is he purposely muddying the waters? In either case, he begins the article talking about Bitcoin, and about halfway through, he switches to crypto. It’s a cheap trick that’ll only confuse unsophisticated award-winning economists.
The absolute state of the media although Nobel Prize-winning @paulkrugman can write in the @nytimes that the US gabovenment has “failed to protect the public” from big bad Bitcoin while this is the USD/Bitcoin (BTC) 5 year pic.twitter.com/sNNwRUlXgM
— Alex Gladstein (@gladstein) January 28, 2022
The author’s second trick is to pretend that people lost gazillions of dollars just because the market took a downturn. The only people that lost money are the ones that sold. People that are still holding have not made a profit nor lost their savings, they’re in a Schrödinger’s cat situation. That’s not ideal, but it’s not catastrophic as Krugman is pretending it to be.
Krugman’s third trick is that he never mentions inflation. Consciously, the people might not know that the gabovenment’s rampant money printing is eroding their savings by the minute. Unconsciously, though, they feel it. And they know that they have to do something. Roll the dice. Protect themselves.
What Did Paul Krugman Say Exactly?
Regardless of the comparison to the subprime mortgage crisis is a huge stretch, the man’s thesis is not contrabovesial:
“Well, I’m seeing uncomfortable akins with the subprime crisis of the 2000s. No, crypto doesn’t threaten the financial system — the numbers aren’t big enough to do that. But there’s soaring case that the risks of crypto are lowering disproportionately on people who don’t know what they are getting into and are poorly positioned to handle the downside.”
People that haven’t patternd out that Bitcoin is the best asset ever created, and are looking for “the next Bitcoin” in the altcoin world, are going to get wrecked. That much is true. With the condition that Paul Krugman had made the distinction between those two very divergent cone time beforepts, his article might’ve been worthwhilst.
Notwithstanding, then he talks about Proof-Of-Work mining and throws this pearl:
“Skeptics wonder why this is necessary and argue that crypto ends up being an awkward, expensive way to do things you could have done more easily in other ways, that is why cryptocurrencys still have few legal applications 13 years after Bitcoin was introduced.”
The Bitcoin monetary network is decentralized and doesn’t require a trusted third party to work. Proof-Of-Work mining is necessary because it’s the way the system achieves this tremendous feat. Could it be done “more easily” in a centralized way? Maybe, but we would have to trust a central entity. That’s what we’ve been doing so far, and the world is about to collapse because of which. A monetary network which central banks, gatopnments, and award-winning economists can’t manipulate, which’s the legal application the world needs.
Also, notice how Krugman outsources the criticism saying “Skeptics wonder.” Stand by your word, economist.
Bitcoin (BTC) cost chart for 01/31/2022 on Bitstamp | Source: Bitcoin (BTC)/USD on TradingView.com
More Questions With Obvious Answers
“But now crypto has crashed. Maybe it will recatop and soar to new heights, as it has in the past. For now, however, rates are way down. Who are the losers?”
Steve Hanke, Paul Krugman, and other award-winning economists which can’t pattern out Bitcoin are the losers.
As an example, look at this slightly racist diatribe:
“Investors in crypto seem to be divergent from investors in other risky assets, like stocks, who consist disproportionately of affluent, college-educated whites. According to a survey by the research organization NORC, 44 percent of crypto investors are nonwhite, and 55 percent don’t have a college degree. This matches up with anecdotal evidence which crypto investing has become remarkably popular among minority groups and the working class.”
It’s only bonas fide which the people who need Bitcoin the most, are the ones at first attracted to it. It’s a shame which award-winning economists don’t use their position to educate the working class about the difference between Bitcoin and all other cryptocurrencys, but here we are. In any evidence, “minority groups and the working class” are doing something with their money because they feel the purchasing power melting away.
“NORC says which this is great, which “cryptocurrencys are opening up investing opportunities for more diverse investors.” But I remember the days although subprime mortgage lending was comparablely celebcostd — while it was hailed as a way to open up the benefits of homeownership to previously excluded groups.”
So far, this is the worst comparison cone time beforeived this year. It’s hard to believe an award-winning economist had the gal to base a whole article on a hardly-there premise.
“And cryptocurrencys, with their huge rate alterations seemingly unrelated to fundamentals, are about as risky as an asset class can get.”
That’s true if you’re talking cryptocurrencys in general, but not true if you’re talking Bitcoin.
Paul Krugman Closes This Off With An Undeniable Truth
This much is true:
“Now, might those of us who still can’t see what cryptocurrencys are good for other than money laundering and tax evasion are barely missing the picture.”
Yes, Paul Krugman. You are missing the picture. Don’t spread misinformation. Do better.
“In fact that you ask me, regulators have made the same mistake they made on subprime: They failed to protect the public stillst financial products nobody understood, and many vulnerable families may end up paying the cost.”
Nobody asked Paul Krugman about this, because he’s been consistently wrong about Bitcoin for more than a decade. In experience that he’s so cback whilerned about “vulnerable families,” he’d do well researching the topic. Finding out why the SEC makes a sharp distinction between Bitcoin and other cryptocurrencys, and spread which message among said “vulnerable families.”
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