Krugman thinks I’m a liberal, but isn’t too sure about DeLong

Actually I am making that up, or perhaps it’s the implication I drew from one of Paul Krugman’s mindless rants against conservatism:

Start with the proposition that there is a legitimate left-right divide in U.S. politics, built around a real issue: how extensive should be make our social safety net, and (hence) how much do we need to raise in taxes? This is ultimately a values issue, with no right answer.

There are, however, a lot of largely empirical questions whose answers need not, in principle, be associated with one’s position on this left-right divide but, in practice, are. A partial list:

1.The existence of anthropogenic climate change

2.The effects of fiscal stimulus/austerity

3.The effects of monetary expansion, and the risks of inflation

4.The revenue effects of tax cuts

5.The workability of universal health care

1.  I believe in anthropogenic climate change, as do many of the conservatives I know.  I also favor carbon taxes, while many conservatives (not all) are skeptical.

2.  I believe fiscal stimulus raises NGDP unless offset with monetary policy.  Many conservatives agree.  I believe that’s Krugman’s view as well.  Didn’t President Bush implement fiscal stimulus in 2008?

3.  I believe that monetary stimulus is needed, and that the risk of inflation/high interest rates is overrated.  Isn’t that Krugman’s view?  Krugman’s right that most conservatives oppose monetary stimulus, but lots of conservatives support it.  My pieces have been published at Cato, the Adam Smith Institute, The American, National Affairs, and other conservative outlets.  I did a panel at the AEI.  I’ll speak at the Cato money conference in the fall.  How many liberal outlets host pro-austerity papers?

4.  I believe tax cuts usually cost revenue.  Most conservatives I know believe the same.  Isn’t that Krugman’s view?

5.  I believe the Canadian health care system is “workable.”  As far as I know all conservatives agree (although many prefer the US system.)  I favor universal coverage, along the lines of the Singapore system.

On the other hand I seem to recall Brad DeLong suggesting that fiscal stimulus might actually reduce the budget deficit.  That sounds awfully close to Laffer-curve voodoo.  So maybe he should be exiled from the liberal tent.

BTW,  I don’t agree that the size of government is a “values issue,” and even if I did I wouldn’t regard it as something with “no right answer.” (I guess he’s not a Rorty fan.) The policy disagreements are mostly on technical issues. Both sides think aggregate happiness would be higher if their preferred plan was adopted.  As far as I know I have roughly the same (utilitarian) values as most liberals, and yet I think we would do better with a much smaller government.  However I would shrink the government mostly by reducing complexity and regulatory reach; less so on the spending side.

And how about all the conservatives signing that petition for immigration reform? That would help the poor more than all the “liberal programs” combined.

Krugman links to pieces by Jonathan Chait and also Mike Konczal.  While I share many of their reservations about the modern GOP, it struck me how little soul-searching there is during what must by any standard be viewed as a disastrous 6 month period for modern liberalism:

1.  The left predicts fiscal austerity will slow the recovery, and yet both GDP and jobs are actually a bit ahead of the 2012 pace so far this year.  In a widely ridiculed column Konczal actually points to the speed up in GDP growth during 2013 Q1 as evidence against the conservative view on austerity.  Confirmation bias.

2.  The popular left-wing view that monetary policy is ineffective at the zero bound gets blown right out of the water as the BOJ succeeds in sharply depreciating the yen. Even Krugman has admitted that if a country is truly stuck in a liquidity trap it would not be able to depreciate its currency.

3.  An Oregon study designed to overcome the identification problem shows virtually no health benefits from Medicaid coverage.  Yes, there are other good arguments for health insurance, and I favor universal health care, but for years the left has been bludgeoning the right with accusations that their mean-spirited policies would kill people.

4.  Another study shows that giving computers to poor students doesn’t improve education outcomes.  Yet the left constantly complains that we don’t spend enough educating poor students.  When it’s pointed out that spending more doesn’t seem to help in cities like Washington DC, they switch gears and say; “Well you can’t blame the education system, it’s the home environment.  But we still need to spend more.”

5.  Internal Revenue Service

6.  When Obama’s policies lead to the worst recovery since the Depression, the left adopts the Herbert Hoover defense. Hoover insisted (in the 1932 campaign) that the Depression would have been even worse without his steady hand at the tiller. Here’s Konczal:

They also understand that the Great Recession destroyed the previous consensus that we had solved the question of the business cycle. It’s tougher to argue that we should have a radically smaller federal government when it looks like the size of the government and automatic stabilizers helped keep the Great Recession from becoming a Great Depression-like collapse.

I wonder if Konczal realizes that even Krugman doesn’t go that far.  Indeed Krugman recently argued we could avoid liquidity traps with a higher inflation target.  There’s absolutely no benefit to big government if you are trying to avoid “depressions.”  Last time I looked most of the “depressions” were located in Western Europe, which (coincidentally) has the largest governments in the developed world.

In contrast, Australia has one of the smallest, and had no recession.  And Hong Kong has a rigid dollar peg, which exposed it to huge demand shocks in 1997 and 2001, and yet it avoided “depressions” despite having the smallest government sector in the entire developed world.  Maybe it was those flexible labor markets that the liberals insist will only make a depression worse.  But they’d reply that it’s better to have inflexible labor markets, like Greece and Spain.

I better stop now or even Bob Murphy will start agreeing with me.  Got to keep my street cred with those fashionable liberals.

PS.  And don’t tell me that Australia did fiscal stimulus; Konczal’s claim was that big government is needed going in, not just fiscal stimulus.  However I probably sounded more anti-Konczal than I really am.  I think his column described modern conservatism considerably more accurately than Krugman’s column.  But not accurately enough to stop me from going off on my own mindless rant.

PPS.  All I am saying is . . . people are complicated.  Liberals, moderates, and conservatives like Yglesias/Avent/Cowen/Tabarrok get that.  And other equally bright people never will.


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76 Responses to “Krugman thinks I’m a liberal, but isn’t too sure about DeLong”

  1. Gravatar of BRD BRD
    25. May 2013 at 19:14

    Scott, let’s be honest: how many major Republicans (Reps, Senators, Governors, large-city Mayors, former executive branch figures) or the famous conservative chattering classes would be caught dead endorsing >50% of what you agreed with Krugman on. A dozen? Maybe?

  2. Gravatar of Greg Hill Greg Hill
    25. May 2013 at 19:56

    Scott,

    The percentage of leaders in the Republican Party and in conservative organizations and “think tanks” who agree with your views is, as a rough guess, well below 25%. Do you really think the Heritage Foundation, CATO (in spite of your presentations), Mitch McConnell, John Boehner, Paul Ryan, Ted Cruz, Rand Paul, et al, would agree with you that the Canadian health care system is “workable,” that a carbon tax is a good idea, that fiscal stimulus raises NGDP without monetary offset, and that the inflation/interest rate risks of more aggressive Fed policies is minimal?

    There are many reasons why conservative leaders in positions of power reject your views, but, for starters, they aren’t utilitarians. Rather, they tend to share an extreme natural rights view in which taxation is pretty close to theft, interference with free choices in free markets is almost always bad (see Canadian health care system and forget Kenneth Arrow), and aggressive monetary policy is a form of dictatorship that must be replaced by a gold standard.

    If your views were actually shared by even half of the Republicans in Congress, we might be able to have an intelligent policy debate. Unfortunately, views like yours exercise very little influence on the current leaders of the conservative movement.

  3. Gravatar of JJriverrun JJriverrun
    25. May 2013 at 20:04

    While the republican party (at the national level) has largely become a caricature of conservative views, I don’t think it’s fair to simply say ‘I know lots of conservatives who think X,’ and therefore Krugman is misrepresenting conservatives. It has become painfully obvious that the “right” as it is represented in Congress chooses to ignore the consensus among thinking conservatives and liberals about the issues Krugman lists. I think everyone should acknowledge that difference and talk about political party views in a different manner than policy views in debate amongst intellectuals. I’m not trying to say that Krugman’s way of presenting the problems with the Republican party as representative off all conservatives is constructive, or that your defending conservatism as a nuanced collection of viewpoints is wrong or disingenuous, but that you are talking about different things using ambiguous terms.

  4. Gravatar of OhMy OhMy
    25. May 2013 at 20:54

    Um, it wasn’t about you. What is up with the Krugman envy? He isn’t noticing much of monetarism these days after you failed to predict the EU-wide recession.

  5. Gravatar of Garrett M Garrett M
    25. May 2013 at 21:28

    I find it interesting that Krugman calls the last three recessions “postmodern,” in that they were “caused by private-sector overreach, not Fed tightening”

    http://krugman.blogs.nytimes.com/2013/05/24/the-four-percent-solution (paragraph 3)

    Tell that to falling TIPS spreads and negative real yields in the summer of 2008.

  6. Gravatar of John John
    25. May 2013 at 21:51

    If people really wanted to help the poor, they’d be lobbying for full-scale drug legalization. The government is waging a war agains the poor by locking up non-violent offenders and shipping them off to prison and out of the potential labor force. Once they’ve gone to prison and have that blot on their records, it’s much harder for them to get a job or try to support a family afterwards. In any case, where does the U.S. government get to say that they own your body?

  7. Gravatar of Aidan Aidan
    25. May 2013 at 23:25

    I actually have no idea what issue you have with Krugman’s piece, as you seem to agree with the individual points he raises in a way that today’s Republican Party does not. Are you confusing right-leaning economists with the right in general?

    Yes, some conservative intellectuals believe in anthropomorphic climate, expansionary monetary policy in a recession, etc., but they are so noteworthy that there are features written about the fact that they exist.

    Are there any prominent conservative politicians that hold these views? Any influential members of the conservative movement?

  8. Gravatar of Aidan Aidan
    25. May 2013 at 23:33

    I think it’d be a much better use of your time if you spent half the energy you spend bickering with Keynesians who are roughly in full agreement about our current monetary policy needs on trying to convince prominent conservative politicians and thinkers that their views on inflation and monetary easing are dangerous and wrong.

    Krugman wrote that spending too much time focusing on his differences with MMT is a waste of time because those disagreements aren’t particularly important right now. I think it’s similarly more important that you spend more time focusing on the people who are loudly and actively opposed to monetary easing. I’ll give you a hint: they aren’t the Keynesians!

  9. Gravatar of Ashok Rao Ashok Rao
    25. May 2013 at 23:44

    Scott you said “On the other hand I seem to recall Brad DeLong suggesting that fiscal stimulus might actually reduce the budget deficit. That sounds awfully close to Laffer-curve voodoo. So maybe he should be exiled from the liberal tent.”

    I really don’t see the connection. The only connection to the Laffer curve is a counterintuitive proposal (similar to A-A expansionary austerity). And economics is rife with such examples. Low yields are a sign of historically tight money, right?

    You also asked, “How many liberal outlets host pro-austerity papers?”. Every liberal who wants taxes increased because the rich aren’t paying enough. And there are *plenty*. Note that Krugman’s opposition to a permanent tax cut is entirely within a Keynesian framework because it affects countercyclicism in the future.

    As I’ve said before, the important conservative reform is the process of neoconservatives becoming neoliberals.

    But this post brings to focus a curious point. I’ve always thought you overestimate your differences with Krugman.

  10. Gravatar of anon\portly anon\portly
    26. May 2013 at 01:24

    “I think it’d be a much better use of your time if you spent half the energy you spend bickering with Keynesians who are roughly in full agreement about our current monetary policy needs on trying to convince prominent conservative politicians and thinkers that their views on inflation and monetary easing are dangerous and wrong.”

    But which group has had more of an influence on the Fed’s current policy stance, the fiscal-focused Keynesians or the QE-hating conservatives? And which group is easier to persuade? For all we know, the sweet spot on the Money Illusion PPF might actually be a corner solution where every post is a chippy riposte to Krugman.

    And then there’s the other side, the utility side, and maybe bickering with Keynesians has a big edge there too.

  11. Gravatar of Daniel Kuehn Daniel Kuehn
    26. May 2013 at 02:40

    So because there are aggravating conservatives out there, and because someone points that out, they don’t get that “people are complicated”.

    I’m not sure you’ve made the case for that Scott.

    Both of Aidan’s comments above are very perceptive. This post, I’m afraid, is not.

  12. Gravatar of SG SG
    26. May 2013 at 02:43

    The Krugman defenders need to realize that anyone who advocates fiscal stimulus right now does so because they have bought into the idea that monetary policy doesn’t matter. The Romers have called this notion the most dangerous idea in the history of the federal Reserve, because the fed LOVES to find scapegoats when it screws ip the economy. All Krugman had done is give the Fed political cover among dems. Let’s be honest. If the democratic party thought the Fed was solely responsible for the slump and subsequent slow recovery, we’d have seen some Japanese style regime change by now.

  13. Gravatar of Daniel Kuehn Daniel Kuehn
    26. May 2013 at 02:54

    SG -
    re: “The Krugman defenders need to realize that anyone who advocates fiscal stimulus right now does so because they have bought into the idea that monetary policy doesn’t matter.”

    This isn’t true at all.

  14. Gravatar of Daniel Kuehn Daniel Kuehn
    26. May 2013 at 02:56

    SG –
    If that were true than why are so many prominent defenders of fiscal stimulus strong proponents of expansionary monetary policy and why are all strong opponents of expansionary monetary policy also opponents of fiscal stimulus?

    If I thought about it I might be able to think of one or two proponents of fiscal policy that are not saying more expansionary monetary policy would do some good. I can’t think of anyone who wants to tighten monetary policy and use fiscal policy.

  15. Gravatar of Daniel Kuehn Daniel Kuehn
    26. May 2013 at 02:57

    SG’s comment just drives home how critical this comment is for readers of this blog:

    http://www.themoneyillusion.com/?p=21332&cpage=1#comment-249963

  16. Gravatar of Bill Woolsey Bill Woolsey
    26. May 2013 at 04:25

    In my view, Sumner has always been too quick to count himself as a “right winger,” or here, as a “conservative.” Even so, Sumner is hardly a partisan blindly supporting the red _TEAM_. For most libertarians, such partisanship in the U.S. context is beyond absurd.

    One can only laugh at comments here like that of Greg Hill imagining that most Republicans in the U.S. Congress are some kind of natural rights libertarian. Ron Paul retired. But that is just one of those bits of “blue Team” intellectual ammunition–painting the “red Team” as crazed laissez-faire dogmatists. No, those of us who come much closer to advocating laissez faire know very well that there are only a handful of Republican Congressman who favor any significant reduction in the size of government. I really don’t worry a bit about Republican Congressman who want to reduce the size and scope of government “too much.” The fundamental problem remains “big government Republicans” in Washington.

    Krugman has chosen to reduce himself to one of the TV talking-heads who are billed as “Democratic Consultants.” Partisan talking points is all one can expect from such people. Sure, we libertarians are so far removed from the “Teams” in Washington that we don’t feel any temptation to go that route. But Krugman has already largely ruined is reputation as a scholar, if not that as any sort of intellectual.

    You know, for those of us not “playing for the Team” the “argument” that the Republicans are worse just makes us think or say, “Yes, and so? That doesn’t make the Democrats any less awful.” And, of course, you can just reverse the party names.

  17. Gravatar of Becky Hargrove Becky Hargrove
    26. May 2013 at 04:32

    Daniel Kuehn,
    While I agree that too much time is spent going over specific points with Krugman in particular, I still feel there is much more which needs to be worked out (problem wise) on the left than the right, because on the left, there are key issues for progress which have not really advanced in a significant way. People from the right who spend a lot of time at Money Illusion tend to move over time towards a common “middle ground” of agreement in spite of personal differences. People on the left…perhaps not so much, sometimes they mostly come here to prove certain points and look for ways to knock down the arguments they’ve absorbed over time (I know, some Austrians do that too). While both people on the left and the right are still afraid to move forward, there are some on the right who are starting to understand that there are structural ways to do so, hence are getting into some of the details of moving forward that really matter. This group will likely be able to sway others on the right, over time.

  18. Gravatar of Luis Pedro Coelho Luis Pedro Coelho
    26. May 2013 at 04:37

    “How many liberal outlets host pro-austerity papers?”

    With Krugman, it is almost appropriate to recall the Sartre quote about pluralism in conservative thought: “Of course, the conservatives are more plural in their views than we left-wingers are, for the truth is one and the lies are many.”

    (quoting from memory, may be off)

  19. Gravatar of J J
    26. May 2013 at 04:47

    Professor Sumner,

    You make solid points about problems with modern liberals. But, I think Krugman was really talking more about the republican vs. democrat divide. Of course, there are conservatives who believe in policies that republicans used to advocate. But, part of Krugman’s (and the other writers to whom he links) point is that anyone who does not have a strict set of beliefs has been effectively cast out of the republican party. It is the degree of dogma and calling others ‘radical’ that has changed in the republican party but not in the democratic party.

    Also, you say: “Both sides think aggregate happiness would be higher if their preferred plan was adopted.” I don’t think this is quite true. Or perhaps different sides have different measures of aggregate happiness. Where does the “I made my money so I deserve it no matter what” principle fit into aggregate happiness? Even Rawls, a god to many liberals, was not a utilitarian.

  20. Gravatar of J J
    26. May 2013 at 04:50

    Professor Sumner,

    And don’t forget what Rick Perry said they would do to people like you (who want to print money) in Texas.

  21. Gravatar of W. Peden W. Peden
    26. May 2013 at 04:53

    Scott Sumner,

    I think you’re being too harsh on Krugman here: he said that stances on these issues are “associated” with being on the “left” or being on the “right”.

  22. Gravatar of D. F. Linton D. F. Linton
    26. May 2013 at 05:36

    I don’t think the left/right divide on fiscal/monetary stimulus is simply whether such stimulus increases NGDP. In the short run it must, just as eating the seed corn feeds the farmer’s children or slashing the R&D budget increases corporate profits, such effects are near accounting identities. The real question is whether the overall effects are positive or negative. Should a company’s financial health be judged sole by inspecting its income statement or do balance sheet effect also need to be considered? Speaking only of (R/N)GDP endorses the income only view.

  23. Gravatar of ssumner ssumner
    26. May 2013 at 06:18

    Everyone. I mean what I say and I say what I mean. Please do not “read into” my posts. This comment section is full of comments that completely misread what I said, and also what Krugman said. If you disagree with my reply, please cite a specific quotation, as W. Peden did.

    BRD, If that had been Krugman’s claim, then I never would have written this post.

    Greg, Krugman was talking about conservative intellectuals, not Congressmen.

    JJRiverrun, Wow, everyone is addressing what they think Krugman was trying to say, but not what he was actually saying. He’s saying there aren’t any reasonable conservatives. Please read it again.

    OhMy, I never said it was about me. I said Krugman would regard me as a liberal, if he knew my views, at least according to his post. Can’t anyone around here read?

    Garrett, I have what I think is a very important post on that topic, which I’ll probably post Tuesday, when more people read the blog.

    John, good point.

    Aidan, Total read-fail. Krugman’s post is about intellectuals, not politicians.

    Ashok, You said;

    “I really don’t see the connection.”

    Hmmm, both say talk cuts could lead to higher revenue. In both cases the transmission mechanism is faster economic growth. Yup, no connection.

    And yet one is taken seriously by the left and the other is ridiculed, despite a lack of empirical support for either view.

    Anon, Good point. I’d add that Obama picked 6 of the 7 members of the Board of Governors. The Board is an arm of the Obama administration. It’s his policy. Meanwhile the liberal (and conservative) press is clueless about monetary policy. Krugman’s posts only serve to confuse the press even more, while I clarify the issues. Most reporters who read Krugman think he is saying that we must use fiscal policy because the Fed is out of ammo. And at times he does seem to say that. At other times he bashes the Fed for not doing more. No wonder they are confused.

    Daniel, Like Aidan it was total read fail on your part. See my replies above. Are people here incapable of reading a Krugman post and understanding what he is saying? But heh, if you look at the world in the way that Krugman does there’s really nothing I can do for you. A person either understands reality or they live in a ideological bubble of their own creation.

    SG, Good point.

    Daniel, There are almost no “strong supporters” of monetary stimulus on the left. There are lots of weak supporters of monetary stimulus on the left, and lots of opponents to monetary stimulus on the left. The left focuses almost exclusively on fiscal stimulus.

    Bill, Good post.

    Luis, Krugman brags about his ignorance of conservative thought, and then acts like he is qualified to write an essay on conservative thought. What more does one need to say? His posts are often a parody of being a closed-minded intellectual. And then he complains that conservative economists don’t know enough about Keynesianism!

    J, You said;

    “You make solid points about problems with modern liberals. But, I think Krugman was really talking more about the republican vs. democrat divide.”

    Just the opposite, read his post again, not just the part I cite. He focuses on intellectuals.

    W, Peden, I’ve never met a conservative who thinks the Canadian health care plan is not “workable.”

    DF. Yes, for instance why did the GOP oppose tax increases in 2013 while the Dems favored them? Krugman would have you believe that the Dems favor fiscal stimulus and the GOP is opposed. What the Dems actually favor is big government (as he admits). The GOP would sign on to fiscal stimulus via tax cuts tomorrow.

  24. Gravatar of Geoff Geoff
    26. May 2013 at 06:59

    “I guess he’s not a Rorty fan.”

    GOOD.

  25. Gravatar of nickik nickik
    26. May 2013 at 07:05

    From my outside of America view, it seams to me that the workings of the goverment are completly outside many of the more intellectual debates. Specially on the right.

    The Republicans have almost nothing incomen with libertarians. The are at best free-market conservatives.

    The Democrates have little in common with people like Krugman.

    I think there are real disagreements between the economists on both sides but on lots of smaller issues there should be easy agreement. Drugs, Farming and simular things, but even with these agreements the goverment does not change them. Stands to reason that the goverment is not divided by intellectual disagreement, they are divided by intrest groupes.

  26. Gravatar of Bob Murphy Bob Murphy
    26. May 2013 at 07:18

    Scott, you had me at universal coverage. You are indeed a liberal.

  27. Gravatar of Ashok Rao Ashok Rao
    26. May 2013 at 07:24

    Scott you said, “Hmmm, both say talk cuts could lead to higher revenue. In both cases the transmission mechanism is faster economic growth. Yup, no connection.

    And yet one is taken seriously by the left and the other is ridiculed, despite a lack of empirical support for either view.”

    Laffer Curve = faster econ growth through incentive to work and not lie/fraud
    DeLong/Summers = faster econ growth through reducing hysteresis

    The paper is framed through a government spending multiplier, not cuts. So DeLong would, indeed, be a liberal.

  28. Gravatar of J J
    26. May 2013 at 07:30

    Professor Sumner,

    You said: “For instance why did the GOP oppose tax increases in 2013 while the Dems favored them? Krugman would have you believe that the Dems favor fiscal stimulus and the GOP is opposed. What the Dems actually favor is big government (as he admits). The GOP would sign on to fiscal stimulus via tax cuts tomorrow.”

    I don’t think this is the first time you have made this point. Of course, it’s difficult to know intentions, but I believe you are wrong about underlying causes. The democrats came in pushing for spending stimulus (yes, they probably favor spending increases over tax decreases because they like big government), but not pushing for tax increases. Indeed, Obama’s stimulus bill lowered taxes. Then, republicans began complaining about large deficits and the out of control debt. They made the democrats seem like the party of fiscal irresponsibility. Yet, the republicans demonstrated that really they just wanted smaller government because they also wanted to cut taxes. The democrats then had to offer a competing proposal to bring down the deficit/debt or risk losing miserably in elections, so they offered budgets with spending reductions and tax increases. They were simply trying to seem responsible (because republicans pushed them into this position) and didn’t want to see rapid cuts in the social safety net, so proposed tax increases ALONG with spending cuts.

    To sum up, the democrats either offer stimulus (spending increases and tax cuts) or deficit reduction (spending cuts and tax increases). Only the republicans don’t really have an opinion on stimulus vs. austerity and just care about the size of government, as evidenced by proposing deficit reduction through tax CUTS and spending cuts.

  29. Gravatar of AldreyM AldreyM
    26. May 2013 at 07:47

    Scott Summer You’re Right Wing or Left Wing? TEST:
    http://www.politicalcompass.org/facebook/pcgraphpng.php?ec=1.75&soc=-2.67

    But I still prefer in health care the Friedman advocate for “savings accounts and a catastrophic insurance (i.e., a major medical policy with a high deductible). Second, it would end tax exemption of employer-provided medical care. And, third, it would remove the restrictive regulations that are now imposed on medical insurance—hard to justify with universal catastrophic insurance.” http://www.hoover.org/publications/hoover-digest/article/7298

  30. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    26. May 2013 at 07:49

    ‘The point is that being a good liberal doesn’t require that you believe, or pretend to believe, lots of things that almost certainly aren’t true; being a good conservative does.’

    Ha, ha, ha, ha…

    Next month in Barcelona, Scottish economist Neil M. Kay is going to make Krugman eat those words, when he presents his paper, ‘The QWERTY Problem’. As the abstract to the paper says;

    http://druid8.sit.aau.dk/acc_papers/rluar3kk4i5t4gelr7j36gx9hma5.pdf

    ‘This paper reviews the emergence of the QWERTY standard which in turn has lent its name to what Krugman and Wells
    (2006) describe as the “QWERTY problem: an inferior industry standard that has prevailed possibly because of
    historical accident?.”

    Which Paul, back in 1998, admitted was not a problem;

    http://online.wsj.com/article/SB888359975534853500.html

    ‘ “QWERTY is a great metaphor,” the MIT economist says. But he concedes that evidence of being locked into a bad technology “turns out to be fairly weak.”

    ‘….”Really large mistakes offer profit opportunities,” Prof. Krugman says. “If there is a really crummy technology out there that we have locked into, then it will be worth it for someone to pay the cost” involved in getting people to switch.’

    If you’re a liberal you have to pretend to believe in a ‘market failure’ even when you’ve admitted being wrong about it. But, maybe that’s only a problem for guys who’ve married their grad students.

  31. Gravatar of AldreyM AldreyM
    26. May 2013 at 07:51

    Milton Friedman:

    “The high cost and inequitable character of our medical care system are the direct result of our steady movement toward reliance on third-party payment. A cure requires reversing course, reprivatizing medical care by eliminating most third-party payment, and restoring the role of insurance to providing protection against major medical catastrophes.

    The ideal way to do that would be to reverse past actions: repeal the tax exemption of employer-provided medical care; terminate Medicare and Medicaid; deregulate most insurance; and restrict the role of the government, preferably state and local rather than federal, to financing care for the hard cases. However, the vested interests that have grown up around the existing system, and the tyranny of the status quo, clearly make that solution not feasible politically. Yet it is worth stating the ideal as a guide to judging whether proposed incremental changes are in the right direction.

    Most changes made in the final decade of the twentieth century were in the wrong direction. Despite rejection of the sweeping socialization of medicine proposed by Hillary Clinton, subsequent incremental changes have expanded the role of government, increased regulation of medical practice, and further constrained the terms of medical insurance, thereby raising its cost and increasing the fraction of individuals who choose or are forced to go without insurance.

    There is one exception, which, though minor in current scope, is pregnant of future possibilities. The Kassebaum-Kennedy Bill, passed in 1996 after lengthy and acrimonious debate, included a narrowly limited four-year pilot program authorizing medical savings accounts. A medical savings account enables individuals to deposit tax-free funds in an account usable only for medical expense, provided they have a high-deductible insurance policy that limits the maximum out-of-pocket expense. As noted earlier, it eliminates third-party payment except for major medical expenses and is thus a movement very much in the right direction. By extending tax exemption to all medical expenses whether paid by the employer or not, it eliminates the present bias in favor of employer-provided medical care. That too is a move in the right direction. However, the extension of tax exemption increases the bias in favor of medical care compared to other household expenditures. This effect would tend to increase the implicit government subsidy for medical care, which would be a step in the wrong direction.

    Before this pilot project, a number of large companies (e.g., Quaker Oats, Forbes, Golden Rule Insurance Company) had offered their employees the choice of a medical savings account instead of the usual low-deductible employer-provided insurance policy. In each case, the employer purchased a high-deductible major medical insurance policy for the employee and deposited a stated sum, generally about half of the deductible, in a medical savings account for the employee. That sum could be used by the employee for medical care. Any part not used during the year was the property of the employee and had to be included in taxable income. Despite the loss of the tax exemption, this alternative has generally been very popular with both employers and employees. It has reduced costs for the employer and empowered the employee, eliminating much third-party payment.

    Medical savings accounts offer one way to resolve the growing financial and administrative problems of Medicare and Medicaid. It seems clear from private experience that a program along these lines would be less expensive and bureaucratic than the current system and more satisfactory to the participants. In effect, it would be a way to voucherize Medicare and Medicaid. It would enable participants to spend their own money on themselves for routine medical care and medical problems, rather than having to go through HMOs and insurance companies, while at the same time providing protection against medical catastrophes.

    A more radical reform would, first, end both Medicare and Medicaid, at least for new entrants, and replace them by providing every family in the United States with catastrophic insurance (i.e., a major medical policy with a high deductible). Second, it would end tax exemption of employer-provided medical care. And, third, it would remove the restrictive regulations that are now imposed on medical insurance—hard to justify with universal catastrophic insurance.

    This reform would solve the problem of the currently medically uninsured, eliminate most of the bureaucratic structure, free medical practitioners from an increasingly heavy burden of paperwork and regulation, and lead many employers and employees to convert employer-provided medical care into a higher cash wage. The taxpayer would save money because total government costs would plummet. The family would be relieved of one of its major concerns—the possibility of being impoverished by a major medical catastrophe—and most could readily finance the remaining medical costs. Families would once again have an incentive to monitor the providers of medical care and to establish the kind of personal relations with them that were once customary. The demonstrated efficiency of private enterprise would have a chance to improve the quality and lower the cost of medical care. The first question asked of a patient entering a hospital might once again become “What’s wrong?” not “What’s your insurance?”

  32. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    26. May 2013 at 08:09

    Btw, whether or not Canadian Medicare is ‘workable’ is hardly a term of scholarly precision. Anything is ‘workable’, if you don’t mind the citizens who are denied medical treatment having to travel at their own expense to a foreign country to get the care they need to save their lives. With some, like Natasha Richardson, dying during the trip.

  33. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    26. May 2013 at 08:15

    Nice example, AldreyM. Another would be government provision of schooling. I remember when poor old Joe Lieberman had to reverse his support of vouchers to get the Democrat nomination for VP alongside Al Gore in 2000.

    Nor was it Conservatives who bent over backwards to be nice to murderous Communists for decades.

  34. Gravatar of Philo Philo
    26. May 2013 at 08:20

    (Seconding Patrick R. Sullivan, above.) Is universal health care really workable? If ‘workable’ meant *optimal* the answer would be negative, but it certainly doesn’t mean that. I think it means something like *good enough that it will not become extremely politically unpopular within a few decades*. Then universal health care probably is workable, but so was the Soviet system.

    There are other possible definitions for ‘workable’; which did you have in mind?

  35. Gravatar of Ivan Ivan
    26. May 2013 at 08:38

    Agree with all the other comments pointing out the difference between conservatives and Republicans. The other point I wanted to make was your point about the Oregon Medicaid study. It did not show that health insurance has no impact on health outcomes. It was an underpowered study for the health metrics they looked at – meaning it showed improvement, just not statistically significant, and too few people with the conditions to likely be able to show a statistically significant improvement in health outcomes. See http://theincidentaleconomist.com/wordpress/oregon-medicaid-power-problems-are-important/ for details. The other point about mortality and hammering R’s on this, this study was way too short term to look at anything related to mortality. You also wouldn’t get the hammering if the Republican party was pushing anything that would increase coverage (well, at least less hammering on that point).

  36. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    26. May 2013 at 09:42

    Here’s a 20 minute antidote to Krugman;

    http://www.c-spanvideo.org/program/312354-1#

    ‘John Maynard Keynes belonged to the Cambridge Eugenics Society.’

  37. Gravatar of Aidan Aidan
    26. May 2013 at 09:46

    I suppose I’ll take your non-response to mean that you have no substantive issue with my points other than nitpicking the fact that I expanded it to include politicians in addition to intellectuals.

  38. Gravatar of ssumner ssumner
    26. May 2013 at 10:57

    nickik, Good points.

    Bob, But a right wing liberal.

    Ashok, The standard Keynesian model says tax cuts reduce revenue, even accounting for multiplier effects. To get more revenue you need to add a bit of “magic dust” to the model. How is that different from Laffer?

    J, Obviously the party in power cares more about making GDP go up than the party out of power.

    Aldrey, I mostly agree with those comments by Friedman.

    Philo (and Patrick), You said;

    “I think it means something like *good enough that it will not become extremely politically unpopular within a few decades*. ”

    The Canadian system is more than 50 years old, and shows absolutely no signs of becoming politically unpopular. I think we can safely assume it passed your test. Krugman is simply wrong.

    Ivan, You said;

    “Agree with all the other comments pointing out the difference between conservatives and Republicans.”

    Which was my point as well.

    The Rand study from a few decades back showed the same thing.

    You said:

    “You also wouldn’t get the hammering if the Republican party was pushing anything that would increase coverage ”

    How soon we forget. It was the “Republican Party” not Bill Clinton or Obama, that dramatically increased the coverage of Medicare for drugs.

    Having said that, I’m certainly no fan of GOP dogma on health care. It’s too pro-doctor.

    Aidan, Both Krugman and I were talking about intellectuals. If you have any criticism of my assertions, please name them and provide evidence.

    And as for man-made climate change, you are simply wrong. Lots of influential conservatives believe in it. Mankiw just did a post. Cowen has done posts. So have many, many other conservative bloggers.

    As for you telling me how to blog, I’d suggest you first read the Reinhart-Rogoff letter to Krugman, and then you might decide you want to tell him how to blog.

  39. Gravatar of Ashok Rao Ashok Rao
    26. May 2013 at 11:10

    “Ashok, The standard Keynesian model says tax cuts reduce revenue, even accounting for multiplier effects. To get more revenue you need to add a bit of “magic dust” to the model. How is that different from Laffer?”

    DeLong/Summers is a more detailed model based not only on immediate tax growth from multiplier effects, but supply-side hysteresis. The whole thesis was through the government spending effect, not tax cuts.

    Also, the association of Keynesian thinking with American liberalism is not correct.

  40. Gravatar of Ashok Rao Ashok Rao
    26. May 2013 at 11:20

    Not correct in the sense that one doesn’t necessarily imply the other, even though it’s been portrayed that way.

    No party in America is “pro-stimulus” or “pro-austerity”. One wants to slash tax rates, the other increase government spending.

    Hot air about deficits is not backed by actual voting record.

  41. Gravatar of Steve Roth Steve Roth
    26. May 2013 at 12:31

    I find this unconvincing:

    “1. The left predicts fiscal austerity will slow the recovery, and yet both GDP and jobs are actually a bit ahead of the 2012 pace so far this year. In a widely ridiculed column Konczal actually points to the speed up in GDP growth during 2013 Q1 as evidence against the conservative view on austerity. Confirmation bias.”

    You’re using 2012 as your counterfactual/comparator. Doesn’t work, logically. Ceteris ain’t paribus. You need to use 2013 with more government deficit spending. Which is what makes this so difficult…

  42. Gravatar of Aidan Aidan
    26. May 2013 at 13:32

    Cowen is not a conservative. Mankiw is one of the more moderate conservatives. Neither represent the mainstream of modern U.S. conservatism, nor do you. You seem to have interpreted Krugman’s post as applying to you. I think conservatism would be in a lot better place if you, Cowen, and Mankiw were truly representative, but that just isn’t the case.

  43. Gravatar of Ivan Ivan
    26. May 2013 at 13:34

    By increasing coverage, I mean actually increasing the number of people who get coverage – not expansion of existing coverage; which is what was done. To be fair, this was a big help for seniors, and Democrats complained about the favorable conditions for drug companies but did not kill the bill. The basic tenets for Obamacare was also Republican ideas; but when it came down to actually getting closer to universal care Republicans went full on obstruction and in all the talk repeal and replace, only focus on repeal. But, I realize you don’t agree with Republicans on this … so maybe preaching to the choir. Anyway, last point on effectiveness of health insurance – people only try to figure out if it is good for the poor. As for the rest of us we assume it is a good thing.

  44. Gravatar of Shane Shane
    26. May 2013 at 17:54

    Lol. Um, Krugman was clearly talking about Republican politicians and elected officials not some blogger of no consequence.

  45. Gravatar of ssumner ssumner
    26. May 2013 at 18:24

    Ashok, You say DeLong added supply side effects. How’s that different from Laffer?

    Steve, It’s not me that made those predictions for 2013, it’s the Keynesians! I’m just throwing the predictions back in their faces. They tell me what their models predict, I don’t make this up on my own.

    Shane, Here’s the post Krugman was addressing:

    “Most of the conservative journalists and writers who make up the reformist camp today—people like Ramesh Ponnuru and Reihan Salam of the National Review, Ross Douthat of the New York Times, Tim Carney of the Washington Examiner, and Yuval Levin of National Affairs—have been more tentative and selective in their critiques of Republican policy than Bartlett and Frum. The average conservative reformist output consists of about three articles bashing liberal statism for every one questioning Republican dogma. To retain an audience among Republicans, one must be “considerate of the contours of conservative opinion,” Ponnuru told me.”

    Yup, those sure look like politicians to me! And it’s not just you. Lots of the other Krugman fans above do not seem to know how to read. I don’t know whether to laugh or cry.

    Aidan, It really doesn’t matter what you think about Mankiw and Cowen. Krugman regards both Mankiw and Cowen as conservatives, as do almost all of the other liberal bloggers. So when he’s saying there aren’t any rational conservatives out there, he most certainly is including Cowen and Mankiw. Obviously he’s personally insulted both of them on a number of occasions.

    When Krugman did a post bragging that he tried to avoid reading conservative bloggers, because they weren’t worth reading, he used an example from a Cowen post.

    Everyone, I’m really disappointed that so many of my readers don’t have any common sense about their fellow human beings. It’s not enough to be incredible bright about policy issues–and many of you are. But in life it’s also important to understand people in their full complexity, not as cardboard cutouts. If you don’t believe me, read what Krugman’s friends are saying about him.

  46. Gravatar of ssumner ssumner
    26. May 2013 at 18:25

    Shane, And by the way. I never suggested he was talking about me. The headline was a joke–I thought that was obvious from the first sentence of my post.

  47. Gravatar of ssumner ssumner
    26. May 2013 at 18:29

    Ivan, Again, the Krugman post was not addressing GOP politicians, it was about conservative intellectuals.

    I agree with liberals that the US system is highly flawed. That’s why I opposed Obamacare. After 2014 the system will be more entrenched than ever–harder to change. He’s making the problem worse by outlawing health insurance, and forcing us all to buy health “insurance”, i.e. pre-paid health care, which isn’t insurance at all.

  48. Gravatar of Scott Freeland Scott Freeland
    26. May 2013 at 20:44

    Scott,

    You strike me as the least ideological blogger I read, inside or outside the realm of economics. And I read many blogs. But, you sometimes give me the impression that you’re stuck in the 70s in terms of the definitions of liberal and conservative and the way liberals treat conservatives.

    I understand that there was a time when liberals threw around terms like “fascist” too liberally(pun intended), and that there was perhaps an ingrained culture of liberal arrogance pushing economic fallacy. But that was a long time ago.

    Sure, many liberals still have pet economic fallacies, but it seems obvious that liberals today are far to the right of liberals of the 70s in many ways, on the whole. It is now the conservatives who have coarsened the culture, poisoned debate, push the most ridiculous fallacies imaginable, inside and outside of economics, and throw around the word fascist, while bastardizing the definition. The conservative movement has left people like you and some of the decent “conservatives” you mention far behind.

    The real face of current conservatism is what I hear on a daily basis in the southern US, where conservative candidates, Fox News, and Rush Limbaugh seem to get the most support. It is childish, boorish, hate-filled, bigoted, and proudly ignorant. I never see or meet the kinds of conservatives you speak positively of on this blog. Bartlett, Ponnuru, and the like are rare exceptions in my experience.

    I won’t defend everything Krugman says or writes, because he does paint with too broad a brush at times, offers careless analyses, and can be unfair. I grant that. But, conservatives say far worse things about him than he says about conservatives, in general, and seem to have no interest in truth whatsoever. I am glad Krugman attacks conservatives. I just wish he was sometimes better at it and fairer in the process.

  49. Gravatar of Matt D Matt D
    26. May 2013 at 22:15

    Your response to Krugman’s five points is basically “no true Scotsman”. If conservatives, as manifested by today’s Republican Party, agree with you, how do you explain no carbon tax, R attacks on Bernanke for loose monetary policy, and R’s blocking implementation of Obamacare – a universal health care policy that needlessly obtuse in part to try to make it more palatable to conservatives?

    Saying “people are complicated” at the end is a weak cop out after a long post slamming liberals. Krugman was not talking about a hypothetical spectrum of conservative opinion, but the actual people who design Republican policy. I submit that if you really agree with Krugman on his five points, then you have little to no influence on R’s.

  50. Gravatar of J.V. Dubois J.V. Dubois
    27. May 2013 at 04:16

    Scott, you are not alone feeling this way about Krugman. I can barely force myself to read him anymore. It is not that I disagree with him – I sometimes disagree with you and I surely disagree a lot more with Tyler Cowen etc.

    What is much worse is that Krugman deliberately chooses not to lead an honest discussion. You know, like analyzing the best arguments your opponents have and offering ones of your own. Those are things like Krugman deliberately confusing readers about monetary stimulus like when he was criticizing Osborn for fiscal austerity and not for Osbourne not increasing inflation target for BoE. Or when he completely skipped opportunity to bash incredibly stupid and outrageous claim by Ed Balls. And many more ocasions.

    I think there is no coming back for him. He is slowly becoming Schiff for leftwing nuts who want to “know” the secret of unverse that the other side has no moral resolve to embrace. He invested too much into his political image and now cannot back down – because for politician it means that he is not consistent and trustworthy.

    PS: I consider myself as a left-leaning liberal. If there is one pundit I can bet that I will agree upon what he writes it would be Matt Yglesias. But if there is some source where I turn to get more understanding and to get other view on issues then there are blogs like yours, or those by Tyler Cowen, Brian Caplan or Alex Tabarok

    PPS: But not everything is about big names in some political pundit space. I equally enjoy blogs by Nick Rowe or David Glasner who each have very interesting and refreshing way of looking at things.

  51. Gravatar of Brian Brian
    27. May 2013 at 04:25

    Love this blog, and Paul Krugman’s too.

    PK actually did blog on Oct. 14, 2011 that “people are complicated”.

  52. Gravatar of KevinH KevinH
    27. May 2013 at 05:24

    You either have a large misunderstanding about what modern conservatives are, or the definitions of the words ‘many’ and ‘most. I wish you luck in trying to reclaim the political movement to the point where these statements ARE true of conservatives, but right now test this list against CPAC. If you are dismissive of CPAC (as we probably all should be on some level), please cite the larger, more well funded conservative movement I am missing.

  53. Gravatar of Chester White Chester White
    27. May 2013 at 05:35

    Yglesias is a conservative? Man, are you deluded. GW Bush wasn’t even a conservative in many ways.

  54. Gravatar of ThomasH ThomasH
    27. May 2013 at 05:44

    It certainly is good news to learn that so many conservative’s favor carbon taxes, universal health insurance, expansive monetary policy, and smarter government, not reduced spending on the safety net. Too bad that the Republicans in Congress do not read your blog.

    But this is a bit off: “When Obama’s policies lead to the worst recovery since the Depression, the left adopts the Herbert Hoover defense.”

    Is it not your view that that the Fed’s policies that lead to the worst recovery since the Depression? And that the economic stimulus (although too small and partially misdirected) was appropriate?

  55. Gravatar of Randaly Randaly
    27. May 2013 at 06:08

    Err, I’m not sure you quite grasped what Krugman was saying. The phrase ‘traits associated with conservationism’ means that p(traits|conservative) > p(traits). It doesn’t mean p(conservative|traits) = 1, nor does it mean what took it to mean, p(~conservative|~traits) = 1.

    But fine, let’s evaluate Krugman’s actual claim: the people on Ryan Cooper’s list, aside from Bartlett, Josh Barro, and ‘other people’ (I took this to mean only Frum, since he’s the outlier in the remaining group) generally disagree with you and him on all of these points. I was too lazy to look at every question, so I stuck to #1:

    Agree with you on both AGW and carbon Tax:
    Nobody at all outright supported action against AGW. Both Michael Gerson and Peter Wehner have called for serious discussions and supported those who did vote for action against AGW, so I stuck them in here.
    Michael Gerson (http://www.washingtonpost.com/wp-dyn/content/article/2009/06/30/AR2009063002896.html)
    Peter Wehner (http://www.commentarymagazine.com/2011/12/19/conservatives-and-climate-change/)

    Agree on AGW, oppose a carbon tax:
    Ross Douthat/Reihan Salam (http://www.theatlantic.com/personal/archive/2007/08/the-right-and-global-warming/54711/)
    James Pethokoukis (http://money.usnews.com/money/blogs/capital-commerce/2007/10/15/global-warming-and-al-gores-307-trillion-gamble)
    Romesh Ponnuru (Couldn’t find content, but one of the first [dead] google links was to this revealing URL: http://www.nationalreview.com/corner/162986/global-warming-who-cares/ramesh-ponnuru; there’s also this: http://www.claremont.org/publications/crb/id.1822/article_detail.asp)
    Timothy Carney (“I’ve been writing since Enron about how climate change legislation is a racket.” I think he’s also an AGW denialist, but the relevant article is not accessible on the Wayback Machine. http://timothypcarney.blogspot.com/2009/05/global-warming-bill-becomes-another.html)
    Yuval Levin (His book, Imagining the Future: Science and American Democracy)

    Disagree with you on AGW:
    Avik Roy (http://www.youtube.com/watch?v=_GRqmOHy9wI&feature=youtu.be)

    Couldn’t find position:
    James Poulos
    Daniel Larison

    In other words, Krugman’s claim that ‘almost all’ of the iconoclasts on the Cooper list, aside from the 3 exceptions mentioned, either a) disagree outright with the science, or b) don’t disagree with the science, but also refuse to take the policy options suggested by the science, is absolutely correct.

  56. Gravatar of jtf jtf
    27. May 2013 at 06:34

    Australia had one of the fastest recoveries for the same reason that Chile did: commodity-driven export boom. What copper did for Chile, iron ore did for the Aussies. No real relationship to the size of government, only its effectiveness at distributing commodity windfalls.

  57. Gravatar of asdf asdf
    27. May 2013 at 07:41

    So you discovered that you’re a right liberal while he is a left liberal. You’re both universalist utilitarian materialists (at least in theory). So why such a fervent disagreement over what should amount to slightly different readings of some data?

    I’ll submit the argument that liberalism has failed over the last several decades. Whether of the right or left variety it has lost credibility. However, it’s still in power. And it needs to justify that power. And one way to justify that power is for left liberals to say its failing because of the small differences right liberals support and vice versa. These need to be blown up out of proportion so that we believe the failures of the liberal agenda really boil down to things like whether the deficit this year was $900B vs $600B.

    Meanwhile, any attempt to question basic liberal assumptions immediately arouse a circling of the wagons by right and left liberals who together try to eradicate any genuine outside opposition.

  58. Gravatar of ssumner ssumner
    27. May 2013 at 07:54

    Scott, Good comment.

    Matt, You said;

    “Your response to Krugman’s five points is basically “no true Scotsman”. If conservatives, as manifested by today’s Republican Party,”

    Try reading Krugman’s post again. It’s not about the GOP. It’s about a group of conservatives who are trying to change the GOP.

    I never said the GOP agrees with me–obviously they don’t.

    Chester, Who said Yglesias was conservative? Does anyone around here know how to read?

    Kevin, Read Krugman’s entire post before commenting. He is discussing a set of conservatives that have relatively enlightened views. He suggests it’s mostly a fraud, even among that group. I disagree.

    Randaly, Here’s what Krugman actually said:

    “There are, however, a lot of largely empirical questions whose answers need not, in principle, be associated with one’s position on this left-right divide but, in practice, are. A partial list:

    1.The existence of anthropogenic climate change”

    Notice the “in practice, are”

    And here’s what you claim he said:

    In other words, Krugman’s claim that ‘almost all’ of the iconoclasts on the Cooper list, aside from the 3 exceptions mentioned, either a) disagree outright with the science, or b) don’t disagree with the science, but also refuse to take the policy options suggested by the science, is absolutely correct.”

    I’m not quite sure what your comment has to do with my post. I was addressing the quotation in the post, not the one you must have found elsewhere.

    BTW, Science doesn’t suggest any specific policy options. Indeed many think geoengineering is the most cost effective policy option, consistent with “the science.” I happen to support a carbon tax. Obama supports tighter regulation. There are many policy options consistent with the science. But again, I addressed what Krugman said, not what you wished he’d said.

    jtf, That does not explain why Australia completely avoided recession, as commodities were hit hard in late 2008. Nor does it explain why they’ve avoided recessions since 1991, as commodity based economies face LARGER real shocks than America, which has had 2 recessions since 1991.

  59. Gravatar of ssumner ssumner
    27. May 2013 at 07:58

    asdf, I suppose we sometimes circle the wagons, and I suppose we are both wrong on occasion. All I can do is promote the points of view I honestly consider to be correct. It’s not that I don’t read non-liberal views, I do quite often. I enjoy non-utilitarians like Will, Douthat, Brooks, etc.

  60. Gravatar of Brian Donohue Brian Donohue
    27. May 2013 at 10:38

    Scott, you win the Internet again!

  61. Gravatar of ssumner ssumner
    27. May 2013 at 12:38

    Thomas, You said;

    “Is it not your view that that the Fed’s policies that lead to the worst recovery since the Depression? And that the economic stimulus (although too small and partially misdirected) was appropriate?”

    The stimulus was a complete waste, it didn’t help the economy at all. Yes, I oppose the policies of the Federal Reserve Board, 6 of 7 of which are Obama appointees.

    Regarding conservatives, you entirely missed the point. Why not simply tell me which of my sentences is incorrect?

    Kevin, Lots of liberal and conservative intellectuals are pretty clueless, from my perspective. That’s not what this post is about. It’s about the specific conservatives Krugman was discussing in his post. Some of them are highly thoughtful intellectuals. And there are many others like Mankiw and Cowen and Becker that could have been added to the list. I object to his broad brush dismissal of everyone on the right. He brags that he doesn’t read any conservative blogs because they are all a waste of time. Do you approve of that attitude? If so, why?

  62. Gravatar of Dan H. Dan H.
    27. May 2013 at 15:17

    A couple of points:

    Canada’s health care system works fairly well, but it’s not ‘universal’. The federal government in Canada exerts very little control over health care apart from setting broad guidelines. The Canada Health Act is covered in a handful of pages. Provinces have a lot of autonomy in choosing how health care will be delivered, and thus can tailor coverage to their own economic conditions.

    In addition, Canada has a lot of free market health care – so much so that employer gap coverage is common. We have privatized dentistry, optometry, and prescription drugs. Many optional health care services such as podiatry are private. In addition, some provinces have privatized or allowed parallel private systems for various types of surgery or other health care.

    And of course, one of the things that helps with our costs is that some of the most complex, expensive procedures wind up being done in the United States – often at the expense of a Canadian who would rather take out a second mortgage on a house than wait several years in excruciating pain while waiting on a list for a hip replacement or other surgery.

    In fact, I believe the U.S. government spends more per capita on health care than does the Canadian government.

    Regarding AGW, I think there is a major attribution error here on the left, coupled with an excluded middle fallacy.

    The excluded middle fallacy is that liberals seem to make a fast jump from, “AGW is real” to advocating immediate interventions in the economy. But there’s a large excluded middle comprising all the possible responses and non-responses that may be appropriate, ranging from doing nothing to spending more on research to investing in mitigation or simply setting up wealth transfer programs to pay the hot equatorial countries for damages while the developed northern countries benefit from AGW, as would be the case for warming below 2.5 degrees.

    We haven’t even begun to have a real debate on what would be an appropriate discount rate for future AGW-related damage. Without that, how can you rationally price carbon?

    The ‘conservative’ opposition to AGW is not about the science – it’s about not willing to concede an issue when the debate has been framed as, “Either you believe in it, in which case shut up and let the left dictate how to run the economy, or you don’t believe in it, in which case you’re a denier.”

    Ask yourself this question: Hypothetically, if it turned out that AGW was a government-created phenomenon and the main response to it was to reduce the size and scope of government everywhere, do you not think it would be the left who would be the ‘deniers’ and the right the champions of the science? Sometimes it’s really not about the science, but about a larger ideological struggle.

    One more difference between the academic policy response and that of non-academic Republicans or Libertarians: Academics seem to see these issues, well, academically: “A carbon tax is a good idea because it’s a Pigouvian tax that will make the market more efficient, and taxing pollution will result in less pollution, and the tax revenue can be used to ‘invest’ in mitigation. Win-win-win.”

    The typical Republican or libertarian response to that is more like: “A carbon tax won’t do a damned thing, because the system will be gamed by politicians and be so riddled with loopholes and carve-outs that in the end it will be just another tax hike that will suck money out of the private economy. And since Russia, India and China will never play ball, taxing our oil consumption will simply lower global demand and prices, and lower the economic cost of others’ carbon emissions, stimulating increased use of carbon fuels elsewhere. The end result will be a wealth transfer to the worst actors, while hurting our economy and preventing us from growing the wealth needed to actually deal with the effects of climate change.”

    The stimulus plan is an example of this divide. The logical, economically-sound stimulus plan recommended by economists never happened. Instead, the stimulus became largely a gigantic payout to friends of the administration such as the public sector unions and various state governments. Only a small percentage of it went into the kinds of direct stimulus and infrastructure that economists suggested.

  63. Gravatar of asdf asdf
    27. May 2013 at 15:38

    “All I can do is promote the points of view I honestly consider to be correct.”

    Is all we can do. Though I would be very careful to avoid the traps of the Krugmens, Caplans, or the mainstream liberal establishment. They go beyond promoting ideas to destroying the careers and lives of opponents (ex. Richwine). When such actions are taken I assume it is tacit admission that they have lost the debate and don’t actually think they are correct, but promote those views (and persecute opposition) because they are committed to them based on history and support mechanisms (their salaries, careers, and social status).

    Increasingly it seems that debate is not what is on offer, and that instead they have taken to silencing critics. If good natured opposition to liberalism will not be presented as an option, what options do you think will be left to the opposition?

  64. Gravatar of Greg Hill Greg Hill
    27. May 2013 at 18:44

    Bill Woolsey,

    I’m afraid you don’t know what you’re talking about, Yes, Ron Paul retired. Ever heard of Rand Paul or Ted Cruz or Paul Ryan or Jim DeMint? How many Republican leaders or conservative intellectuals can you name who share Scott’s utilitarianism?

  65. Gravatar of SocraticGadfly SocraticGadfly
    27. May 2013 at 19:51

    If 1-5 are really all true not only among you but other intellectual conservatives, then why, not only in the stereotypical reddest of the red states, but elsewhere, do numbnuts wingnuts get nominated for, and win, House seats, etc.?

    Scott F. is right on a lot of this. And, I guess there’s not enough of you opposing the GOP enough, or else many of you are perceived as being halfway sellouts.

    Asdf is right in that, in terms of today’s discourse, you’re not a conservative. And, despite claims about Reason, you’re not a libertarian in terms of how most of today’s libertarians sell themselves, either.

    Per Philip Nolan, you’re a man somewhat without a hitching post. But, as folks like Dear Leader move Democrats ever further rightward, you’ll find one soon enough. Actually, it’s probably staring you in the face right now.

  66. Gravatar of Benny Lava Benny Lava
    28. May 2013 at 04:54

    Scott maybe you should re-read what you wrote. Because at first glance it comes across as complaining that Krugman gets conservatives wrong because you and a few conservatives you know buck the mold. No, I didn’t read the Krugman piece. I just read what you wrote. Not the closest reading, I admit. But it really comes across as misdirected anger. Because you really sound like a left-leaning centrist to me. Maybe when you were younger that was a “conservative” view but today is 2013. Maybe we misread what you wrote because your writing was not clear?

  67. Gravatar of ssumner ssumner
    28. May 2013 at 05:27

    Dan, Both Krugman and I consider Canada’s system to be universal. It’s a question of semantics.

    asdf, It’s absurd to compare Caplan to Krugman. Just ridiculous.

    SocraticGadfly, You said;

    “If 1-5 are really all true not only among you but other intellectual conservatives, then why, not only in the stereotypical reddest of the red states, but elsewhere, do numbnuts wingnuts get nominated for, and win, House seats, etc.?”

    That’s silly. I never claimed 1-5 were true among all conservatives, and the number of intellectual conservatives is so tiny they’d obviously have no ability to swing elections. Of course the same is true of intellectual liberals. There are just as many liberal “wingnuts” in Congress as conservative wingnuts. My own state just elected Elizabeth Warren.

    Benny, If Krugman’s piece was about conservatives as a group, I’d agree with you. But it wasn’t. I’d suggest reading it.

  68. Gravatar of asdf asdf
    28. May 2013 at 05:42

    ssumner,

    Since there is no way for me to respond to such a retort…

  69. Gravatar of Steve Roth Steve Roth
    28. May 2013 at 07:56

    @Scott: “The left predicts fiscal austerity will slow the recovery”

    “Slow” relative to a counterfactual.

    You chose 2012 as the counterfactual, not them. It’s arguably a valid benchmark, but that argument has to be made explicitly.

    If we choose 2013-without-austerity as the counterfactual, do you think it would outperform 2013-so-far?

  70. Gravatar of Floccina Floccina
    28. May 2013 at 12:09

    Democrats and Republicans are both anti-science. We should start the rational party. Take Climate change the Democrats run around calling the Republicans anti science but they stand firm against geoengineering, nuclear power, biochar, enhanced weathering, Natural Gas fracking and deep ocean iron fertilization.

  71. Gravatar of Steve Roth Steve Roth
    28. May 2013 at 12:53

    Oh and if I haven’t mentioned, I’d be very interested to hear your thoughts on this:

    http://effectivedemand.typepad.com

    Like you, he puts labor share right at the center, but using a much more formalized model. I have no idea how valuable the model might be (which is why I’m trying to incite you to evaluate it…), but it seems darned promising.

  72. Gravatar of Steve Roth Steve Roth
    28. May 2013 at 17:03

    Just ran into this:

    “All else being equal, growth in 2013 should be better than 2012, because the headwinds holding it back are diminishing,” said Michelle Girard, chief economist of RBS. “The impact of the fiscal drag isn’t things getting worse, it’s the absence of things getting much better.”

    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/28/the-economy-is-holding-up-surprisingly-well-in-a-year-of-austerity/

    2012 vs. 2013: ceteris is not paribus.

  73. Gravatar of Angry Bear » Does Steady GDP Growth “Prove” that Market Monetarists Are Right About Ineffective Fiscal Policy and Foolish Keynesianism? Angry Bear » Does Steady GDP Growth “Prove” that Market Monetarists Are Right About Ineffective Fiscal Policy and Foolish Keynesianism?
    31. May 2013 at 06:22

    [...] As Scott says in a recent post: [...]

  74. Gravatar of Asymptosis » Does Steady GDP Growth “Prove” that Market Monetarists Are Right About Ineffective Fiscal Policy and Foolish Keynesianiam? Asymptosis » Does Steady GDP Growth “Prove” that Market Monetarists Are Right About Ineffective Fiscal Policy and Foolish Keynesianiam?
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    [...] As Scott says in a recent post: [...]

  75. Gravatar of The Reformists Trying To Change The GOP Can Already Claim One Significant Victory The Reformists Trying To Change The GOP Can Already Claim One Significant Victory
    3. June 2013 at 17:26

    [...] it makes perfect sense that Scott Sumner responded to the round of liberal self-back-patting with a list of recent problems for the liberal perspective on economic policy, particularly this: “The left predicts fiscal [...]

  76. Gravatar of TheMoneyIllusion » Josh Barro on market monetarism TheMoneyIllusion » Josh Barro on market monetarism
    4. June 2013 at 13:13

    [...] makes perfect sense that Scott Sumner responded to the round of liberal self-back-patting with a list of recent problems for the liberal perspective on economic policy, particularly this: “The left predicts fiscal [...]

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