Here’s a letter that I sent earlier today to the Gray Lady:
Noting that “it’s important to have some perspective,” Paul Krugman argues that while Uncle Sam’s budget deficit is now large, “we also have a huge economy, which means that things aren’t as scary as you might think” (“Till Debt Does Its Part,” August 28). Whew! No cause for much concern, for the size of America’s GDP swamps the size of the budget deficit.
During the Bush years, however, Mr. Krugman preached a different gospel. For example, in his February 11, 2005 column – devoted to condemning tax cuts – he insisted that “the deficit is indeed a major problem.”
So let’s take Mr. Krugman’s advice and get some perspective. In 2005, when Mr. Krugman insisted that government’s budget deficit was “indeed a major problem,” that deficit was 2.5 percent of GDP. Today, when Mr. Krugman no longer is very concerned about the budget deficit, that deficit will be about 11 percent of GDP. Hmmmm….
Sincerely,
Donald J. Boudreaux
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Partisan economics!
It’s sad that most people consider the stuff Krugman writes in the NYT as “economics”.
Sometimes, I have to wonder if there’s any other kind.
Don’t forget this gem.
http://www.abc.net.au/lateline/content/2004/s1064193.htm
“PROFESSOR PAUL KRUGMAN: The first thing to say is to look at what some of those same people were saying in the middle of the Clinton years when the deficit was substantially smaller as a proportion of GDP and they were carrying on about what a bad thing it was.”
Now reword that to say: “The first thing to say is to look at what some of those same people were saying in the middle of the Bush years when the deficit was substantially smaller as a proportion of GDP and they were carrying on about what a bad thing it was.”
Yeah definitly not partisan economics there….at least you always know what your going to get with Krugman.
Krugman is a tool! Ofcourse, it is okay to do an argentina because we have a shortage in “aggregate demand”. Whatever that means! LOL.
You’re kidding when you say you don’t know what it means, right?
His toolness is reaching new levels.
Hey, maybe we should go easy on him. He did win a nobel prize…
The Nobel Committee’s own reputation would be much improved if it would drop all prizes outside the hard sciences.
What is a hard science?
I never understood the term… it always seemed like a goofy word that physicists and chemists invented because they repeatedly confuse “experimental” with “empirical”.
Hard science is where you can design an experiment to directly test your hypothesis. The difference with respect to Economics is that in Econ, you can never directly test your theories. You have to extrapolate, try to compensate for this variable and then try to compensate for that variable….blah blah blah. The point is you can never directly test your hypothesis or theories in Economics, where you can in the “hard” sciences.
He must be correct, Barbra Streisand, David Letterman, Bill Maher, Sean Penn, and Alec Baldwin all agree with him.
What about Larry David’s ex-wife?
Larry David’s ex wife who preaches environmentalism for everyone else and then flies private jets cross country for her vacations.
But to make up for that spewing of CO2, she drives a Toyota Prius and when she uses disposable tableware, she makes sure it is derived from Corn or sugarcane waste fiber.
I do love Larry David, and cannot wait for the premiere of the final season of Curb!
Mark, I’ve seen every episode, but it seems like the most recent season was a couple of years ago; am I right?
Krugman is becoming unhinged — when I watch his This Week appearances, there’s a nervous tension which gives the impression he might snap any minute — intellectual dishonesty has consequences.
He has been like this – unhinged – for as long as I can remember. The guy is as well suited for television as Nixon. And in a typical interview he warbles worse than Bernanke testifying before his overlords in congress.
Now, where’s Daniel Keuhn to defend Krugman’s latest BS?
What a hack.
Shorter Krugman:
Democrats = good.
Republicans = bad.
well, to be charitable, democrats might be bad (they are when it comes to knowledge of economics) but Republicans have been absolutely abysmal.
This is hilarious
http://www.youtube.com/watch?v=LO2eh6f5Go0
Item number 174 in my “Paul Krugman is a fraud and a hack” file.
Sad, since he once was an economist, and even even wrote good stuff for the popular audience (Pop Internationalism). He’s clearly a former economist now.
Thanks, DB, for the excellent letter.
Here’s a comment I had just submitted to Prof. Krugman’s blog.
“Prof. Krugman,
I don’t see my comment here, to the effect that your outrage was not so much at the leadership of the Republican Party as at the ordinary folk, such as myself, who don’t much appreciate being whipped along your Road to Serfdom, and, with our “shrill voices,” will not go quietly into your collectives and concentration camps.
I gather that you people don’t particularly like any comparison of yourselves to Hitler, and any connection of your policies to concentration camps.
Well, they just don’t make National Socialists like they used to.
Remember the Sig Ruman character in To Be Or Not To Be?
“So, they call me Concentration Camp Erhardt,” he repeated, with delight.
I hope Concentration Camp Krugman will learn to enjoy it as much.”
I doubt that it will survive censorship
What a waste of reputation that Krugman should assume the role of a political propagandist. I’ll never understand what little regard some people hold for their own integrity.
It’s time to send Krugman to a concentration camp.
When I read this comment, I thought of doing something that Russ and I almost never do: remove it — that is, remove this comment.
It’s no secret that I disagree, and disagree passionately, with Paul Krugman. I believe that he’s deeply, depressingly, and dangerously wrong — in both his economics and his ethics.
But I have no desire to send him, or anyone else, to a concentration camp.
It’s an ugly sentiment to wish to use the torments and techniques of history’s worst statists on peaceful persons with whom we disagree.
I understand that most often such comments as this one by ArrowSmith are made for comic intent. But, personally, I don’t find such comments funny — and we (those of us who, unlike Krugman, are truly liberal), ought to set examples by never sinking into such illiberality.
Well done, Don! It is far better to respond and condemn such statements than to simply “disappear” them.
I think that the intent was comic – meaning that Krugman needs to concentrate a bit more, but you are right that there is nothing in the comparison that is funny.
Blogger Rachel Lucas recently posted her response to visiting Auschwitz and it is an excellent description of how we should react to such evil. I hope the link works – http://www.rachellucas.com/index.php/2009/08/24/we-have-to-go-into-the-despair-and-go-beyond-it-by-working-and-doing-for-somebody-else-by-using-it-for-something-else/
And proprietors of open forums like this have to be vigilant about plants–people who attempt to present themselves as one of the crowd so that they can later try to discredit them by offensive ideas.I have no reason to think this of Arrow, but the reputation of the community depends upon such vigilance.
Let’s ask a different question – Can we send Krugman to the Fed?. If you believe that the Fed is an efficent (minimises the use of resouces) and effective (does what’s its intended to do) organisation, and you believed that Mr. Krugman would improve the Fed, then you would send him there. If you believed that the Fed was an inefficent organisation, and that Mr. Krugman was an ineffective administrator, you MIGHT want to send him there too – if you wanted to preserve that state of affairs. Mr. Krugman has stated that he would not want the job of the chairman of the Fed, so does that mean that he himself believes he’s ineffective, or .. what? Reminds me of the argument that “there is a God and he’s 100% malignant, but only 80% effective..” Imagine – Paul Krugman, running the Fed, 100% wrong, but only 80% effective. One does hope that this isn’t actually how we came to be in the current situation???
I’m just responding in the way the left does. They like to “disappear” people they don’t like. I have no doubts that in an all-out leftist tyranny Krugman would become a gauleiter for such a regime.
ArrowSmith,
Now that I know what a gauleiter is, I can probably agree. The problem is that in trying to head Krugman off using the tactics of the left, you may become that which we/you/I abhor – a tyrant. The problem with saying that you are responding as the left does is that although it may feel good at first, when you try to “wash it off” later, you find that you have a stain left. Don’t get me wrong, we should not roll over and die for the bastards. We have to fight back and hard, but let’s do it with the best facts and conviction. I normally enjoy your posts and say these things just to help keep us all in line.
Best,
T Rich
I love how it’s just a matter of course that concentration camps are a “tactic of the left”. Is there really that big of a disconnect? We all hear about the polarization of politics… I never realized it was this bad!
I’m sorry, but this regular criticism of Krugman gets old and this particular criticism is a little off-base. Krugman wrote: “As I’ve pointed out, that’s bad, but it’s not horrific either by historical or international standards.” Krugman is very up front that the debt level is bad. “Mr. Krugman no longer is very concerned about the budget deficit”??? Please, Don. I’m sorry, but the evidence doesn’t bear that out. In his recent blog posts he’s laid out very clearly why he didn’t think much of the tax cuts under Bush but does approve of going into debt for the stimulus. It’s quite non-partisan and a quite old argument – we’re in a liquidity trap now, we weren’t then (for very long at least… Krugman has also said there was a window where Bush’s fiscal stimulus was appropriate in 2002… interesting you don’t give him credit for that). Why don’t you acknowledge that explanation for why he treats the two differently?
You act as if the size of the deficit is the only way to evaluate a deficit. That’s a fair position to hold, but it’s unfair to attribute your views of the deficit to Krugman and use that to conclude that he’s partisan (or whatever else you’re concluding – it’s never made very explicit.
In related news, I did a “wordle” for Cafe Hayek out of curiosity. You can see it here: http://www.wordle.net/show/wrdl/1080684/Cafe_Hayek_-_Aug._29%2C_2009
Notice whose name is biggest on the wordle? It’s not Boudreaux or Roberts.
Daniel,
Read what Krugman says about the budget deficit in this November 2004 interview:
http://www.abc.net.au/lateline/content/2004/s1064193.htm
Don
Thanks – yes, I read it when Justin Palmer initially posted it. I also read this in that transcript:
“Which is not cyclical, there’s only a little bit that’s because the economy is depressed. Mostly it’s because, fundamentally, the Government isn’t taking in enough money to pay for the programs and we have no strategy of dealing with it.”
That’s the whole point, Don. That’s why he differentiates between the Bush deficit and the Obama deficit. If you want to judge deficits by their size alone, that’s fine – but don’t assume that that’s Krugman’s argument and reject his conclusions on that basis. Engage the argument he actually makes and accept or reject that.
He makes this point thoroughly in the August 28th column as well, although obviously he doesn’t feel the need to mention the Bush budgets there. Clearly he was too worried in 2004 about what the Bush deficits would result in… although you can also sense that the crisis he discussed wasn’t necessarily intended to be an immediate crisis. He was contrasting the unnecesary (ie – procyclical) Bush deficits with large future entitlement obligations. True, we didn’t have a “South American style crash” from that as Krugman suggested we would, and in that sense he was absolutely wrong… but does anyone really think we’re out of the entitlement woods yet? The basic point he raised is still valid… and unusual for him. He usually poo-poos deficit hawks who worry about entitlements (a tendancy of his that always frustrates me).
Regardless, I think he makes abundantly clear in 2004 and in the August 28th article and in everything else he’s written what qualifies as a good reason for running a deficit and a bad reason – you’re making it sound like size is his only criterion. I really don’t think it is.
But all that deficit talk is besides the point of his current historical comparison – the historical comparison of the debt, which is not unprecedented by historical standards, but as he admits it’s still “worrying” and “bad” (to use two adjectives he uses in the article you cite). Krugman barely talks about the debt in this 2004 thing you’re citing – and one of the few times he even mentions it he’s really talking about the deficit (he mentions Asians buying up “debt” – ie, bonds – ie, he seems to be thinking about the deficit). So you’re doing one of two things:
1. Taking a Krugman statement that the debt isn’t historically unprecedented (but worrisome) and comparing it to a statement he made about the unprecedentedness of the Bush deficit – which is an apples and oranges comparison, or you’re
2. Taking a Krugman support for the historically unprecedented Obama deficit and comparing it to an (at the time) historically unpredented Bush deficit and acting like the size is the only basis for the comparison, when it is abundantly clear that the size is NOT the only basis for comparison for Krugman.
Either way I think it’s a bad critique. Which isn’t to say Krugman is always right or even that he’s right on this.
It’s fine that you don’t buy into counter-cyclical deficit spending. But you shouldn’t assume that everyone else agrees with you and judge their logical consistency on the basis that they agree with you, particularly when Krugman lays out quite clearly in everything you’ve linked to why he thinks the Obama deficit is appropriate (or too small, I suppose).
A long response without reading the link that Don Boudreaux posted. I will repost my comment in response to Justin Palmer. My response to Justin Palmer was this…
“Krugman is a tool! Ofcourse, it is okay to do an argentina because we have a shortage in “aggregate demand”. Whatever that means! LOL.”
I read the entire link, sandre. Indeed I quoted from it to butress my point! I was able to respond relatively quickly because I had already read the whole thing when Justin Palmer posted it (so I just gave it a quick review when Don reposted it).
Now, instead of commenting on the length of my response (irrelevant), or your misconceptions about my preparation of the response, do you have any thoughts at all on my comment itself? If not, I’m not sure why you’re replying to it.
To borrow from James Carville, he’s partisan, he has an agenda. Honesty and consistency is not part of that agenda.
You’re now warning essentially that the engine of the world economy, the United States itself, is heading for a South American style financial crisis.
What’s the evidence for that?
PROFESSOR PAUL KRUGMAN, PRINCETON ECONOMIST: Well, basically we have a world-class budget deficit not just as in absolute terms of course – it’s the biggest budget deficit in the history of the world – but it’s a budget deficit that as a share of GDP is right up there.
It’s comparable to the worst we’ve ever seen in this country.
It’s biggest than Argentina in 2001.
Prof Boudreaux,
Do you really think you can win an argument with Daniel?
I can do so because I don’t have much else better to do with my time,
But you sure do, so please don’t waste it on him, or me, or anything else, other than what you want to do, which is indispensable.
dg – Don knows a lot more about economics than me. Of course he can win an argument with me with his hands tied behind his back. But that doesn’t make him immune from making bad generalizations about a columnist that he obviously has a chip on his shoulder about. I like reading Don’s thoughts on things – that doesn’t mean I have to accept everything he writes. I think he “spends” (not “wastes”) time with Cafe Hayek precisely for these interactions – no to win your adulations. Adulations are a dime a dozen. I’m trying to really address the points he makes.
Prof. Boudreaux,
Do you really think you could win an argument with Daniel?
I can, because I don’t have much else to do with my time.
But you certainly do, so don’t waste it on him, or me, or anything else, other than what you choose to do, which is indispensable.
Daniel,
What are you trying to do, make me cry?
First there is nothing contradictory in Krugmans concerns about the debt. Second Krugman wrote a book about this coming collapse while some economist wrote books on the power of choice and price to solve everything. They even denied the economic collapse as it was happening.
I’m not a Krugman hater, but I don’t know if you’re right on the book thing. As far as I can tell, Dean Baker, Robert Shiller and Peter Schiff were pretty much the only Americans of renown that predicted this collapse. Maybe Michael Panzer, too, but not Krugman.
The late Ned Gramlich too.
I’d agree – I’d give him credit for the book because it demonstrates Krugman’s grasp of depressionary dynamics, which are better than most – but he didn’t really see this coming.
“First there is nothing contradictory in Krugmans concerns about the debt.”
How are the quotes the Prof. cited NOT contradictory?
The problem is Don quoted EXTREMELY selectively. Read all of both pieces. You might still not believe me, but he explains quite clearly why he views the two deficits differently, and it doesn’t just have to do with size – the only issue that Don brings up.
Krugman disaggred with himself a lot more stridently than that!
From his 2003 column, “Fiscal Train Wreck” [with defict at 3.5% of GDP, 10-year projection $1.8 trillion]:
“I’m terrified … we’re looking at a fiscal crisis that will drive interest rates sky-high … looming threat to the federal government’s solvency …
“the conclusion is inescapable. Without the Bush tax cuts, it would have been difficult to cope with the fiscal implications of an aging population. With those tax cuts, the task is simply impossible. The accident, the fiscal train wreck, is already under way.”
Krugman versus Krugman for more quotes and data.
Which Krugman to believe?
This post is an effective prescription to the massive metaphorical headache I’ve been suffering since this morning, which is when I first saw Krugman’s utterly pathetic article. Thanks.
you buttressed it with sand. My response is short and clear.
“Krugman is a tool! Ofcourse, it is okay to do an argentina because we have a shortage in “aggregate demand”. Whatever that means! LOL.”
With sand?
I provided the primary reason for why he differentiates between Bush and Obama’s budget… a reason that Don mysteriously neglects to mention.
But you’re right… “whatever that means ! LOL” is much more informative.
Yeah, economic realities that play out knows the difference between deficits with an excuse of “falling aggregate demand” and those that don’t, and decide whether to do an argentina or not.
Before a run on a currency happens, it usually asks whether the deficits were caused by “falling aggregate demand” or “shortage of revenues”
Well, Daniel.Since concentration camps were a staple of the Soviet Union and Nazi Germany, and that the number of people sentenced to camps by those two Leftist countries dwarfs everyone else’s concentration camps. And, since the most famous incidence of concentration camps in the US was initiated by the Stalin-and-Mussolini-loving Roosevelt Administration. And, since the farther Right one goes, the more one values individual liberty, a Rightist government wouldn’t be a Rightist government any more if it instituted concentration camps, it’s safe to say that, “concentration camps are a tactic of the Left”.
Ah yes, the old “by definition I can’t support that so it can’t be something my team would ever do” explanation. And to be sure, it’s valid enough. But many leftists would make the same argument, and they would no more claim Hitler than you would (I know the “Hitler is a leftist because he was a corporatist and because the “S” in NSDAP stands for socialist” holds water here on Cafe Hayek, and there’s no point in arguing it, but it’s not something you can just say and assume is true because you say it – many would make the exact opposite claim). In the real world understanding of these terms, “right wing government” doesn’t mean more freedom – it means excessive state control just like left wing does. It’s just a reactionary government rather than a radical government. Instead of bending over backwards to unconvincingly tag it on the left, why can’t we just say “excessive right wing or left wing state control can lead to terrible aberrations like concentration camps”? Why do this weird redefinition of what “right wing” means, all for the sake of trying to brand the left? I suppose it’s because “slippery slope” arguments away from libertarianism don’t make as much sense when it becomes obvious that the political spectrum isn’t one-dimensional. To force the one dimensionality you have to throw extreme right wingers and left wingers in the same bunch and fundamentally redefine right and left.
Brotio,
Thanks for having my back while I wasn’t checking in on this thread. I suppose that DK could give us numerous instances of right wing governments having camps – you know like Cambodia, VietNam, China, DPRK, etc. Oh wait, those are all left wing…Geez, never mind. Oh, and I am glad that you remembered to note that camps did exist in the USA at one time and that it was during the reign.. er…I mean the administration of the prototype of modern liberalism (ie, progressivism who is on record for admiring the monsters you cited).
Yes, Daniel – Chile did exist and it was bad under Pinochet. But calling that government right wing is a reaction to the socialist government that Pinochet unseated. I file Chile under “politics ain’t beanbag” category which is right next to the “sometimes the cure for a disease can seem worse than the disease” folder. Chemotherapy is a fine balance between just enough to kill the cancer but not so much as to kill the patient. Chile had a cancer under Allende (sp?) and Pinochet was the cure. However, I have seen it said that historical analysis shows that most right wing dictatorships end because the government had liberalized (ie – given freedoms) to the point that their heavy hand lightened over time until the government and its bad actors went away and a more classically liberal regime peacefully took over.
DK, some of us see the political spectrum as two dimensional – politopia.com
Two dimensional is far better than one dimensional in my book
I wonder if that’s really appropriate too sometimes, though. For example – take libertarians and populists. They should be diametrically opposed on a two-dimensional map, and yet populists seem to take up the Ron Paul banner with ease. Maybe it’s an issue of opportunity? I don’t know. Either way, two dimensional is a big improvement on forcing a square peg into a round hole by arguing that the right-wing is freedom oriented, Hitler is a leftist, etc. Adding at least one dimension makes those issues a lot less forced.On these two dimensional maps I always end up at the corner of libertarian/left/centrist. I guess the meeting of West, Southwest, and Center in this one you’ve linked to. But in a one dimensional spectrum who knows where I am – I’m told I’m a statist 
I have no idea why populists would support Ron Paul anymore than anarchists would support Obama.
As far as your being a statist goes, you see a legitimate role for government in managing economic affairs which puts you in defense of government at times.
When you defend the State you portray yourself as a statist.
I think you’re drifting back into a one-dimensional mentality