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Tuesday, August 3, 2010

Paul Krugman Gives Up

A marvelous thing happened over on Paul Krugman's blog at the New York Times last week. Krugman effectively conceded defeat on a range of economic debates. Who defeated him? People who posted comments on his New York Times blog. Mere commenters.

For those who do not know, Paul Krugman is one of the few who still claim that Keynesian progressivism is the answer to America's (and Europe's) problems, not their cause. He repeats that claim many times each month. Amid these repeated expressions of his "progressive" faith, he now also repeatedly expresses grim despair because his progressive policy prescriptions are being accepted less and less in the public square, even by the Obama administration.

Krugman is an academic. He has never run a company. He has never created a job. The closest contact he evidently ever had to "business" was as an adviser to Enron, where (in his own words) he was paid $50,000 to help build Enron's "image." 
This, perhaps, explains the dozen or so points that Krugman makes over and over. Here are a few: Obama's stimulus was too small. Debt is good. Austerity is bad. Deflation is coming. Ken Rogoff, Greg Mankiw, Alberto Alesina (all at Harvard), and other serious economic scientists do not understand economics as well as he does. Those who do not agree with him are "mass delusional." And perhaps Krugman's favorite line: "I was right, of course."

Befitting his ideology, Krugman has only one policy to propose, regardless of topic: Transfer more resources from the discipline and dynamism of markets to the inefficiency and cronyism of government.

Government-run health care. Government-controlled banks. Government bailouts. High taxes. High spending. Krugman wants it all, just like in Europe (which, in 2008, he called "the comeback continent"). And Krugman has no problems denying economic science and current events to advocate it.

With the meltdown in Europe so obviously the consequence of too much Krugmanism and U.S. unemployment near 10% after a trillion dollars in stimulus, Krugman has attracted some criticism.

For example, Robert Barro, the distinguished Harvard economist, noted that Krugman "just says whatever is convenient for his political argument. He doesn't behave like an economist." The New York Times ombudsman Daniel Okrent observed that Paul Krugman has "the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults." James Taranto at the Wall Street Journal, after listing the falsities in Krugman's latest piece on climate last week, hazarded that perhaps "Krugman makes himself ridiculous merely to make our job easy."
But no matter how low Krugman's fallacious fruit hangs, Krugman has long been comfortable among the acolytes who frequently post on his blog. A representative post is: "Paul, you are a God-send for those of us who appreciate a superior intellect with common sense! Thanks for applying your brilliance." Or this: "Paul, dig deep dude. You are brilliant." It was hardly surprising that last January, Krugman declared, "I love my commenters."

No longer.

For just as Krugman was declaring his love for his blog commenters last January, people started posting serious rebuttals of Krugman's standard claims about economics. These commenters were not obviously Republican stooges. They were not obviously members of "the political class." They were not obvious ideologues.

Rather, the posters simply knew some economic science and how jobs are created and economies grow, perhaps because they were members of "the productive class." And they came prepared to support their rebuttals of Krugman's ideology and his singular policy prescription by facts and peer-reviewed economic science.

For six months, they made Krugman's blog one of the more informative and interesting places to hear economics debated. In part, this was because they gave Krugman a serious run. Their posts were long, near the 5,000-character limit set by the New York Times. They were reasoned. They were knowledgeable. They carried citations to economic science literature that one might expect in a Ph.D. dissertation.

And so their rebuttals were often decisive. (Continues here)

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