The View From 1776

Earlier postings on this topic were Part One and Part Two.

In Paul Krugman’s New York Review of Books article (Who Was Milton Friedman?), he wrote:

But there’s an important difference between the rigor of [Milton Friedman’s] work as a professional economist and the looser, sometimes questionable logic of his pronouncements as a public intellectual.... And is must be said that there were some serious questions about his intellectual honesty when he was speaking to the mass public.

That assessment applies with equal, if not greater, force to Mr. Krugman himself.

Let’s take an example from the recent book Econospinning, by Gene Epstein, the economics editor of Barron’s, one of the premier publications of the financial world.  Mr. Epstein notes that Daniel Okrent, in his last column (May 22, 2005) before leaving his position as the Public Editor (ombudsman) of the New York Times, had this to say about Times columnist Krugman:

Op-Ed columnist 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.

Mr. Okrent’s job as ombudsman was to call to task unacknowledged falsification or unfair slanting of news and opinion articles appearing in the Times.  Mr. Epstein had corresponded with Mr. Okrent earlier to point out several errors (or deliberate misconstructions of government economic statistics) that had appeared in Paul Krugman’s columns.  Okrent had then confronted Mr. Krugman in writing, asking for either an explanation or a rebuttal.

All he got was an evasive response in which Mr. Krugman wrote:

I’m sure that a careful search through 100 or so columns will find some errors or misrepresentations.  So would a careful search of anyone’s work.

The point here is that Mr. Krugman’s work is not just “anyone’s.” He is presented by the Times as an authoritative voice in economic matters: a Princeton economics professor and winner of the John Bates Clark Medal, which is awarded every two years to the nation’s most promising economist under the age of 40.

Mr. Krugman is supposed to be something more than just another purveyor of biased political opinion, someone who facilely distorts economic data to support liberal-socialist causes.  In fact, Paul Krugman’s columns in the Times too often are nothing more than just that.

As an economist, Mr. Krugman is obliged to look at all relevant factors and to make a careful assessment of their effects.  This he signally fails to do.  He is therefore either ignorant and a poor economist, or he is a falsifier for political purposes.

A typical example:

Mr. Krugman’s column In Broad Daylight, The New York Times, September 27, 2002, asserts that the electric power shortages and outages then being experienced in California were the result of deliberate reductions of output by the electric utility companies in order to extort higher prices and higher profits.  Which is analogous to saying that a grocery store would “steal” from its customers by periodically shutting down the store to prevent sales. 

Mr. Krugman fails even to mention that the utility companies were suffering huge losses under low, fixed electric rates at a time when their fuel costs were going through the roof as oil prices surged and oil was in short supply at peak demand for gasoline and electricity for air conditioning.  Much of California’s power was from hydroelectric sources, but power shortages elsewhere in the country were being met by distributing power among all areas in the power grids.

Many other examples could be cited.  In fact there is an internet industry of bloggers who regularly report Mr. Krugman’s distortions and prevarications.

The mostly widely noted of Mr. Krugman’s failed economic predictions and propagandizing has to do with his faith in the liberal-socialist nostrum that economic recessions are the result of too little money in the hands of consumers. 

In the Keynesian economic theory to which Mr. Krugman subscribes, economic downturns can be cured only by enacting new Federal spending programs.  He neglects to explain how the United States managed to become the greatest industrial power on earth prior to 1933, when the New Deal first made Federal spending programs the standard remedy.

When the Bush tax cuts were proposed, Mr. Krugman repeatedly broadcast the liberal-socialist party line that “tax cuts for the rich” would fail to pull the economy out of the dot.com bust and economic recession that started at the end of the Clinton administration. 

He was obviously completely wrong: we are now enjoying the fifth year of one of the strongest economic booms in history, with one of the lowest unemployment rates on record.

Blinded by their faith in the superstitious ignorance of socialism, Mr. Krugman and his fellow liberals are unable or unwilling to confront the undeniable facts of history: every tax cut has produced an economic boom and a surge in employment; every government spending program has produced inflation.

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