Paul Krugman: Ignorant, and proud of it

Or so he claims:

Some have asked if there aren’t conservative sites I read regularly. Well, no. I will read anything I’ve been informed about that’s either interesting or revealing; but I don’t know of any economics or politics sites on that side that regularly provide analysis or information I need to take seriously. I know we’re supposed to pretend that both sides always have a point; but the truth is that most of the time they don’t. The parties are not equally irresponsible; Rachel Maddow isn’t Glenn Beck; and a conservative blog, almost by definition, is a blog written by someone who chooses not to notice that asymmetry. And life is short …

That’s right, and George Will isn’t Michael Moore; and a liberal blog, almost by definition, is a blog written by someone who chooses not to notice that asymmetry.  No need to read Marginal Revolution, Becker/Posner, Econlog, John Taylor, Greg Mankiw, Robin Hanson, Steven Landsburg, etc, etc.  Nothing of interest, just move right along folks.  I’m always amazed when someone so brilliant can be so clueless about life.  How someone can reach middle age and still live in a kindergartener’s world of good guys and bad guys. 

Perhaps if Krugman would get out a bit more he might make fewer embarrassing errors,  like this one, where he forgot the fallacy of composition, something taught in EC101.  I guess none of his liberal friends have the nerve to point out these sorts of silly errors.  So it’s still there, uncorrected after two weeks.  A monument to his pride at being ignorant of the views of those with whom he disagrees.

You might ask whether I’m being a bit harsh calling him “ignorant.”  Actually, he’s the one who proudly flaunts his ignorance of conservative thought. 

I find that reading good liberal blogs like Krugman, DeLong, Thoma, Yglesias, etc, sharpens my arguments.  It forces me to reconsider things I took for granted.  I’d guess that when Krugman tells people at cocktail parties that the post-1980 trend of lower tax rates, deregulation, and privatization was a plot devised by racist Republicans, they all nod their heads in agreement.  If he occasionally read a conservative blog he might learn that all those trends occurred in almost every country throughout the world after 1980, usually much more so than in the US.

I wonder if his blanket condemnation of reading conservative outlets would include books that attack silly liberal arguments for protectionism.  Or articles that show the folly of liberal opposition to sweatshops.  Are those conservative ideas also no longer worth reading?

Some conservatives have given up on reading Krugman because of his insulting tone.  That’s a big mistake—indeed it’s playing right into his hands.  Krugman is right in many of his criticisms of conservative ideas (such as tighter money.)  Conservatives need to hear his views.  Better to read things that annoy you, and respond when you are outraged, than to be oblivious to the best arguments against your worldview.  The best liberal bloggers are those who don’t stay in their echo chamber, but rather are willing to also read blogs that annoy them.

PS.  I will be away for a few days, and hence won’t do much blogging.

Update:  Many commenters failed to click on the link in Krugman’s post, so they didn’t realize that he cited Tyler Cowen as the sort of conservative who is so partisan that he ”doesn’t notice that asymmetry” and therefore is not worth reading.  I don’t even consider Cowen to be a conservative (much less partisan), but Krugman obviously does.


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172 Responses to “Paul Krugman: Ignorant, and proud of it”

  1. Gravatar of Contemplationist Contemplationist
    9. March 2011 at 09:27

    This is classic Krugman – the ignorant, narcissistic kindergarten student throwing temper tantrums and hurling mud at other kids. I can rarely stomach reading him. This is why I was extremely grateful when Scott Sumner came along to filter out his actual ECONOMICS arguments away from the filthy muck of political idiocy. And this moved me from an Austrian business cycle explanation to a quasi-monetarist one.

  2. Gravatar of Doc Merlin Doc Merlin
    9. March 2011 at 09:36

    Meh, Krugman isn’t insulting… its hard to feel insulted by someone as perennially biased and clueless as him. The only person on the econ-blogosphere worse than him is deLong who regularly deletes comments on his site.

    Unlike him, Thoma, Yglesias, Angrybear, etc are great lefty bloggers who tend to be honest and clue-full. And, while I agree with you that its good to read blogs with different points of view, Krugman is just not worth reading, when any of his good points will be also made by the better lefty bloggers.

  3. Gravatar of Benjamin Cole Benjamin Cole
    9. March 2011 at 09:42

    Well, I think this particular post might be unecessarily harsh. Krugman is very smart, and influential. I would rather build bridges to someone like him, than burn bridges.

    Even more importantly, he seems slowly, ever so slowly, to be coming around in his points of view regrading monetary policy.

    Sure, Krugman is a big lib. Then John Taylor is a big conservative. They have biases, that we may or may not agree with.

    For now, we want greater acceptance of QE, and other monetary stimulus. I think we need all the friends we can get, usually gained by finding common ground, and expanding on that.

  4. Gravatar of Contemplationist Contemplationist
    9. March 2011 at 09:46

    Benjamin
    How much crudity and dishonesty, ignorance and insults are you willing to allow to “build bridges” with Kruggerz? Please read his hit piece on Milton Friedman after his death. That alone was despicable. This post needs to be much harsher. Krugman deserves far worse.

  5. Gravatar of Tyler Cowen Tyler Cowen
    9. March 2011 at 09:50

    Thanks for the praise of MR, in any case I interpret Krugman’s post a little differently than you do. He’s said on other occasions that he reads the two of us, and he regularly takes or counters arguments from us. It is highly likely that he reads others as well, such as Mankiw. Maybe he was just careless in mixing talk of what is a “political” blog or not. Or maybe there is a psychoanalytic question of why he would hurt peoples’ feelings, by denying such readings, and I think that is perhaps what his post boils down to. I don’t pretend to have an answer to that psychological question, and I’m not even sure I am framing it the right way, but in any case I would say this: don’t take the bait. Maybe *his* feelings are hurt, I don’t know. But there is no reason why your feelings should be hurt, and maybe you should even read his post as a strange form of flattery to you, albeit unintended. It’s a bit like Bloom on The Anxiety of Influence. You are of course correct that we always should be reading Krugman, and if he makes himself a more interesting character psychologically, well, that is simply another reason to keep on reading him, in addition to all the other content.

  6. Gravatar of Aaron Aaron
    9. March 2011 at 10:06

    One of the reasons why I keep reading this blog (in addition, of course, to its interesting subject material), is that Scott Sumner is one of the few right-wingers who doesn’t descend into mindless fact-free name-calling when it comes to people they disagree with, the way that some commenters on this post are already starting to do. I think most people are unfortunately more willing to excuse rhetorical excesses committed by people they agree with (I would probably find a right-wing version of Krugman unreadable), which is why it’s good to see people like Sumner who keep a relatively calm tone.

    My question for Scott is: what conservative sites should he (or me, I guess) be reading? I know Krugman does read your blog and MR from time to time, but what other sites would you say offer good right-of-center analysis, however you would define that?

  7. Gravatar of Sean Sean
    9. March 2011 at 10:11

    Aaron, in the post above:

    “Marginal Revolution, Becker/Posner, Econlog, John Taylor, Greg Mankiw, Robin Hanson, Steven Landsburg, etc, etc”

  8. Gravatar of Scott Sumner Scott Sumner
    9. March 2011 at 10:15

    Everyone, I wasn’t sure whether I should post this or not. (When that happens, 90% of the time it’s a mistake.) I suppose “ignorant” is a pejorative, but he was proudly calling himself ignorant, so I didn’t see that inflammatory headline as making an accusation, but rather simply pointing out what Krugman was publically admitting to.

    I agree with Tyler that generally one shouldn’t take the bait. But I don’t quite agree that his attack was aimed at low-brows like Beck, and not highbrows like Mankiw and Cowen. Krugman has a link to Cowen right before his final insult, so he’s clearly implying that Tyler is so biased that he’s not worth reading. I can’t see any other interpretation, although I’m open to suggestions.

    Of course he does read MR on occasion (probably often), and once and a while he reads my blog as well. I saw his post as a particularly gratuitous insult against some bloggers that I greatly respect, and also an easy softball that I could ridicule without working up a sweat.

    Finally, there’s a big difference between saying one doesn’t care to read such and such, because of lack of interest, and saying that one doesn’t care to read people one disagrees with because they are so biased that their writings contain little of interest.

    Maybe I did get down in the mud with him. (And that’s why Tyler is a better person than me.) But since I’m older than Krugman I prefer to think of this post as like a parent scolding a child that has been naughty. :)

  9. Gravatar of Aaron Aaron
    9. March 2011 at 10:15

    Sean, I wasn’t clear if he was considering all of those people to be ideological opposites or what, I certainly don’t consider someone like Robin Hanson to be “conservative” in the way that, say, Rortybomb is “liberal”.

  10. Gravatar of Scott Sumner Scott Sumner
    9. March 2011 at 10:20

    Aaron, Certainly all the sites I mentioned in this post are excellent, but I don’t even have time to always keep up with them. I also read my fellow quasi-monetarists, but as their number expands I’m having more and more trouble keeping up. The key is to read stuff with various points of view.

    There are also lots of blogs that I consider moderate, but that have conservative views on some issues (Ryan Avent, Jim Hamilton, etc.) I also forget to mention Will Wilkinson, who recently started blogging more actively, and of course many others. I’m sure there are at least 100 blogs by people who could loosely be called “conservative” (including libertarians) who are worth reading.

  11. Gravatar of muskrat muskrat
    9. March 2011 at 10:20

    I think he’s brilliant! At least, he says he is.

  12. Gravatar of Lord Lord
    9. March 2011 at 10:28

    When I think conservative sites I think the ilk of Faux News, certainly not worth spending time on. There certainly isn’t anything more ill informed. Thankfully Stewart and Colbert watch it so I don’t.

  13. Gravatar of E E
    9. March 2011 at 10:29

    I have to admit I read the title and expected him to deny any rightwing legitimacy but I did gasp a little when he recommended Digby.

  14. Gravatar of Jason Jason
    9. March 2011 at 10:47

    1. George Will is totally Michael Moore. At least today. He seemed more reasonable in the past. But so did Moore. Trains are a liberal plot to make us more conformist? Regulating CO2 would be regulating breathing?

    2. I’m glad you brought up the fallacy of composition again! Gives me another chance to restate my argument … anti-stimulus and pro-stimulus theories both predict increases at the micro level, right? They differ at the macro-level where anti-stimulus predicts at most zero job growth while pro-stimulus predicts more job growth. So showing micro-level job increases doesn’t differentiate the theories or prove either right. But there is a leap of faith here. Let’s say 1′s are job increases. An anti-stimulus theory says:

    1 + 1 + 1 + … = 0 overall increase

    The micro level job increases sum to zero (since there are decreases in there). A naive calculation that didn’t account for the decreases would show a fallacy of composition.

    Now a pro-stimulus macroeconomic theory says:

    overall increase 10 = 1 + 1 + 1 + 1 + …

    when you look at the the micro-level.

    Mathematically, the micro-level increases predicted are differential elements in an anti-stimulus theory but could be regarded as either differential elements or simply a partition in a pro-stimulus theory (i.e. an increase in jobs nationally means an increase in jobs in at least one state).

    So I think the Feyrer and Sacerdote study counts as evidence for a pro-stimulus theory but is inconclusive for an anti-stimulus one. Krugman: “And the burden of proof should always have been on stimulus critics to explain why this doesn’t mean that stimulus spending creates jobs at the national level too.”

  15. Gravatar of marcus nunes marcus nunes
    9. March 2011 at 10:54

    Scott
    Factual error: Krugman is 2 years older than you

  16. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    9. March 2011 at 11:25

    That Krugman didn’t disappear into the Witless Protection Program after the Jason Leopold-Thomas White debacle tells us a lot about his psychology. That he continues to write as if it never happened–those who live in glass houses…–tells us he has absolutely no self-awareness at all.

    And for his lateest high school level error:

    http://iowahawk.typepad.com/iowahawk/2011/03/longhorns-17-badgers-1.html

  17. Gravatar of smintheus smintheus
    9. March 2011 at 11:32

    Wait, you’re declaring that Krugman ought to be reading right wingers regularly because they have so many serious things to say, and the first example you come up with is Tyler Cowen? Seriously? The very guy who opines that liberal economists are making a “mistake” by not devoting more attention to IQ and ethnicity when discussing economic policy? Who recently asserted that all Americans ought to get used to invasive screening practices and strip searches because Europeans are so much more sophisticated in their willingness to be sexually humiliated? Tyler Cowen comes across as an extreme ideologue who loves to toss off what he imagines are zingers; he’s good for a laugh but not somebody I learn much from nor an author who provokes me to deeper thought on important issues. Because Cowen doesn’t argue or engage the facts so much as he disburdens himself of his prejudices. That’s the best you’ve got, Scott?

  18. Gravatar of Hyena Hyena
    9. March 2011 at 11:54

    Doesn’t an awful lot depend on what Krugman would consider a “conservative” blog? There’s nothing particularly conservative about Marginal Revolution or Overcoming Bias, for example. Even Super Economy isn’t terribly “conservative”, it rarely meanders into actual political question at all, especially in an American context.

    Would Megan McArdle, who militates for unemployment benefits and social insurance, be counted as a “conservative blogger”? She’s generally counted as one, but the distance between her and Yglesias or Klein is almost imperceptible. What about Reihan Salam? Same story.

  19. Gravatar of Robert Hurley Robert Hurley
    9. March 2011 at 12:06

    What a ignorant comment – as if all knowledge comes from Blogs! For instance I would hesitate to call Mankiw’s blog, a real blog since he has so little information. From a logical point your argument is built on a fallacy. your Premise – You have to read conservative blogs to be knowledgeable. Krugman does not read conservtive blogs. Therefore he is ignorant. Your primise is false. Therefore your conclusion is false

  20. Gravatar of dirk dirk
    9. March 2011 at 12:09

    I took his post to be much worse than you did. I don’t believe the purpose was to insult conservative bloggers so much as it was to tell to his followers that all conservatives are idiots and never worth paying attention to. Yet it was clear mendacity because it is apparent that he does frequently read conservative blogs. He merely wanted to stifle any heretical thoughts or burgeoning intellectual curiosity among his faithful.

  21. Gravatar of Richard W Richard W
    9. March 2011 at 12:29

    I think a lot of this comes down to how you define conservative. I am a liberal in the British sense and that makes me highly skeptical about conservatives and outright hostile towards social conservatism. The Moneyillusion and Marginal Revolution are two of my favourite blogs and I have never seen you as conservatives. Free trade and free market economists is more accurate and I am in total agreement. How any sentient person can be in the same group as Glenn Beck, Rush Limbaugh and the folks who believe the earth is only 6,000 years old is beyond me. That really is the problem of pigeonholing everyone into groups that don’t mean a whole lot. If someone wants to self-identify as conservative, they are going to be in a pretty broad church containing a lot of crazies.

    The contemporary GOP generally don’t make much sense about anything so their shrills are hardly worth reading. In a way I think that is what Krugman was speaking about. I am sure Krugman does read a lot of free trade and free market blogs who examine issues rationally. This one and MR are two of the best.

  22. Gravatar of Contemplationist Contemplationist
    9. March 2011 at 12:56

    Robert Hurley

    Your accusation is based on a false premise – that Krugman is generally ignorant. Therefore you conclusion is false. Scott said Krugman is ignorant of conservative thought not ignorant of all things at all times. Now go back to your DailyKos

  23. Gravatar of ionides ionides
    9. March 2011 at 12:59

    If you’re not an economist, you have to apply an ad hominem filter when reading experts. If you find one that insults his colleagues, it’s reasonable to pass; he is writing in a state of emotion, and this affects reason.

  24. Gravatar of Contemplationist Contemplationist
    9. March 2011 at 13:07

    Richard

    The contemporary GOP (and I’m not a fan mostly) is handling fiscal problems at the state level created by throwing money at pensions to state workers by the Democrats. I don’t care who handles it but the GOP governors are. The national GOP has been mostly feckless the past decade as Bush’s rubber stamp. However, read any popular hack-ish GOP blog and they all support SERIOUS entitlement reform. Is that to be lauded or not? When Harry Reid the Democratic Senate Leader is speech-ifying about the damage to Cowboy Poetry that the meager budget cuts will do, do you think that makes sense, is serious and worth paying attention to or not?

  25. Gravatar of bertusmaximus bertusmaximus
    9. March 2011 at 13:10

    the notion of partisan (academic) economists is just so weird and perhaps a little US centric … as are the tags given to people’s set of views rather than probing and dissecting topics on their own merit/failings.

  26. Gravatar of Robert Hurley Robert Hurley
    9. March 2011 at 13:22

    Contemplationists.

    Maybe you should retake the course in logic again.

  27. Gravatar of Benjamin Cole Benjamin Cole
    9. March 2011 at 13:23

    Contemplationist:

    Look I just want QE2 and maybe QE3 to be embraced, or tolerated. At the risk of sounding theatrical, millions of jobs and livlihoods could depend on the right monetary policy.

    I don’t want the Nipponistas to do to the USA what happened to Japan.

    Let Krugman shoot his mouth off; let John Taylor re-write history. If we alienate such people, they will only dig in their heels to the right monetary policy.

  28. Gravatar of Peter Peter
    9. March 2011 at 13:35

    Irrelevant people have Krugman envy.

  29. Gravatar of Jeff Jeff
    9. March 2011 at 13:41

    Richard W.,

    I don’t think you can lump Beck and Limbaugh together as if they are two peas in a pod. Remember that they are both supposed to be entertainers. Their job is to get ratings, not to impart wisdom. If you take them on that basis, Limbaugh, at least, is pretty good at what he does. He is often quite funny, and much of what he says is pretty standard conservatism. Unlike Beck, Limbaugh rarely rarely brings religion into his arguments, and he’s not a conspiracy theorist. (Neither Beck nor Limbaugh sound racist or anti-Semitic to me.) Try listening to Limbaugh’s show yourself sometime and you’ll see why he has been, and still is, so popular.

    Beck, on the other hand, is humorless, sees conspiracies under every rock, and seems to believe that his ideological opponents are not just wrong about means, they pursue evil ends as well. This kind of hectoring is not very appealing to most people, and his ratings have been dropping to the extent that the New York Times reports that some Fox executives are thinking about dropping his show.

    There is a lot wrong with the GOP: too much war-mongering, demonization of immigrants, insufficient regard for civil liberties other than the 2′d Amendment, and their small-government rhetoric is not matched by deeds.

    But the Democrats don’t even pay lip service to a smaller government, and while their rhetoric on civil liberties (again excepting the 2′d Amendment) is better, their deeds are just as bad. Almost all of the Bush policies Obama decried as a candidate (Guantanamo, Patriot Act, warrantless searches, etc.,) he has continued as President. You need only look at Radley Balko’s site to see that nothing much has changed.

    A pox on both their houses? Sure. But at least the Tea Party Republicans have been mostly talking about shrinking the government, and not about forcing their religion down your throat. They are at least a step in the right direction. The Democrats, for now at least, seem utterly hopeless.

  30. Gravatar of ssumner ssumner
    9. March 2011 at 13:49

    Aaron, There’s no doubt that Krugman would consider Hanson to be a conservative. He even considers Tyler Cowen a conservative!

    muskrat, In his own mind. And in some ways he is.

    Lord, When you think of conservatives you think of Fox News. So do I. But when Krugman thinks of conservatives he thinks of Tyler Cowen, when is why he linked to a post trashing Cowen for being disingenuous, right in the paragraph I cited. That’s the best Krugman can do for why conservatives aren’t worth reading? Tyler Cowen?

    E, Who’s Digby?

    Jason, If I understand you correctly you are claiming that the FS study showed that total employment nationwide rose because of fiscal stimulus. But it didn’t show that, it assumed that. So I’m afraid you are making the same error as Krugman. There really isn’t any defense of his post—it’s fallacy of composition 101.

    You said:

    “George Will is totally Michael Moore”

    Ha!! I knew I’d bait some liberals into saying that. If you can’t see the difference, I’m afraid I can’t help you. It has nothing to do with whether I agree with his views (I disagree with Will on global warming and 100 other issues.) It’s whether the person has anything to say that is worth listening too, which George Will certainly does.

    Marcus, Oops, I should have checked that. He just seems younger.

    Patrick, Yes, I knew that Texas post was wrong the moment I read it. It was an incredibly sloppy piece. There’s a reason so many working class people move to Texas.

    Smintheus, You said:

    “Tyler Cowen comes across as an extreme ideologue who loves to toss off what he imagines are zingers; he’s good for a laugh but not somebody I learn much from nor an author who provokes me to deeper thought on important issues. Because Cowen doesn’t argue or engage the facts so much as he disburdens himself of his prejudices. That’s the best you’ve got, Scott?”

    What can one say after reading something like that? To answer your question: Yes.

    Hyena, You said;

    “Doesn’t an awful lot depend on what Krugman would consider a “conservative” blog? There’s nothing particularly conservative about Marginal Revolution or Overcoming Bias, for example.”

    I don’t consider Tyler Cowen a conservative, but Krugman obviously does, as he’s the only example of a conservative behaving badly that Krugman provides in that disgraceful paragraph. Read the link please.

    And there is a big gap between McArdle and Yglesias. I like them both, but McArdle is somewhat libertarian, and Yglesias thinks government should be much bigger, 50% of GDP is the figure he cited.

    Robert Hurley;

    “What a ignorant comment – as if all knowledge comes from Blogs! For instance I would hesitate to call Mankiw’s blog, a real blog since he has so little information. From a logical point your argument is built on a fallacy. your Premise – You have to read conservative blogs to be knowledgeable. Krugman does not read conservtive blogs. Therefore he is ignorant. Your primise is false. Therefore your conclusion is false”

    You completely misunderstood my argument. I have no objection to him not reading conservative blogs, or not reading any blogs. For instance, I don’t watch TV, liberal or conservative. I object to the reason he gives. He suggests conservative bloggers have almost nothing to offer, and are so biased as to be unreliable, when it’s obvious to me they are no more biased than liberal bloggers. And the example he cites–Tyler Cowen–is perhaps the least biased blogger out there.

    dirk, You said;

    “I took his post to be much worse than you did. I don’t believe the purpose was to insult conservative bloggers so much as it was to tell to his followers that all conservatives are idiots and never worth paying attention to. Yet it was clear mendacity because it is apparent that he does frequently read conservative blogs. He merely wanted to stifle any heretical thoughts or burgeoning intellectual curiosity among his faithful.”

    Yes, that occurred to me after I wrote the post, and I’m almost certain you are right. It is even worse. But it just makes it easier for me when I argue with liberals. Today I asked a liberal professor (who said with vouchers only the rich could go to school), whether he thought that in Sweden only the rich went to school. He sputtered “yes.” Imagine a liberal claiming that in Sweden only a rich person could go to school! But those liberals who live in a cocoon have never heardthese arguments, and don’t know how to respond. That’s why liberals like Yglesias are so effective, they do check out what the other side is saying. And to be fair, Krughman does too–but not as much as he should.

    Richard W. You said;

    “I think a lot of this comes down to how you define conservative. I am a liberal in the British sense and that makes me highly skeptical about conservatives and outright hostile towards social conservatism. The Moneyillusion and Marginal Revolution are two of my favourite blogs and I have never seen you as conservatives.”

    I agree, but Krugman doesn’t, as he specifically pointed to Tyler Cowen as an example of an unreliable conservative. Tyler Cowen is exactly what he had in mind. Check out the link in his post.

    ionides, Unfortunately, even with all his flaws Krugman is a must-read, at least for me.

  31. Gravatar of ssumner ssumner
    9. March 2011 at 13:52

    bertusmaximus, I agree.

    Peter, I don’t envy him. But I may be irrelevant anyway.

  32. Gravatar of Contemplationist Contemplationist
    9. March 2011 at 13:53

    Benjamin Cole

    I’m with you on that. Actually forget QE, I want a full-force NGDP or final-sales targeting regime. Though I do believe Japan won’t happen here as even mild inflation is not going to be tipping into deflation of the Japanese variety (as Scott says, Bernanke wouldn’t allow it).

    Mr. Hurley
    Since you needed to take a course in elementary logic, its not logical to assume that everyone else had to as well. But surely barging in here blustering with your misunderstanding felt good! Strike one for the team! Now that you have performed your duties to uphold the status of your Lord Krugman, you can safely walk back into your den of leftist hyenas thinking you are all superior to us rubes here. Thank you.

  33. Gravatar of Gabe Gabe
    9. March 2011 at 13:58

    So do most here agree that if oil hits $120/bbl by June then we need QE3? if not then what is your hurdle rate for oil to compel QE3?

  34. Gravatar of Alexander Hudson Alexander Hudson
    9. March 2011 at 15:20

    @Gabe: I think we should do QE3 now, regardless of the price of oil. I don’t think the price of oil should matter.

  35. Gravatar of Andrew G. Andrew G.
    9. March 2011 at 15:33

    Scott,

    I think you misinterpret the meaning behind Krugman’s linking to another post on Cowen. I don’t he did that to belittle Cowen but because that post on Cowen was about Democrats vs Republicans on deficits and how Democrats were so much better (and therefore the parties are not equally responsible as he says)

  36. Gravatar of Andy Andy
    9. March 2011 at 15:49

    A well-deserved smackdown. He will probably respond that he was exaggerating slightly, and does listen to conservatives when they happen to agree with him.

  37. Gravatar of Benjamin Cole Benjamin Cole
    9. March 2011 at 16:00

    Contemplationist:

    I am glad we agree. I hope Bernanke can stem the tide to deflation. Richard Fisher (Dallas) is baiting Bernanke hard and heavy right now.

    I have heard more than one “right-winger” (and I am “right-wing” on many issues) speak favorably about deflation. There is some sort of thought-stream out there about deflation and gold and that really turning the wrenches down on monetary policy is a conservative thing to do.

    I agree with you on NGDP.

    Back to deflation, I think we are very vulnerable, and some depends on whcih way property values break.

    If they slog and soften from here, you may have asset deflation for a long, long time. Investors will go to safe liquid assets, eschewing stocks and property, which becomes a self-fulfilling cycle. You are not getting any wage inflation.

    The commodoties are getting the headlines, although copper has cracked hard, wheat is down, and natural gas is glutted to the moon.

  38. Gravatar of Joe Joe
    9. March 2011 at 16:10

    Scott,

    I don’t think Krugman is saying what you think. After all, by your reading he’s alleging that conservative bloggers hold both parties equally responsible for our problems, and that’s not the dominant position on most conservative blogs ;)

    He’s making two separate criticisms.

    First, he’s criticizing conservative websites for not producing any worthy analysis. He doesn’t, however, define what a “conservative” website is, though I’d imagine he’s aiming for political blogs and his typical Chicago school villains.

    Second, he’s criticizing the respectable commentariat generally for feeling the need to be PC and blame both parties for screw ups he thinks belong to Republicans. This is the criticism he levels at Tyler.

    Notice how PK slips into the first person – “we’re supposed to pretend that both sides always have a point, but the truth is that most of the time they don’t. The parties are not equally irresponsible;” He can’t be referring to conservative bloggers there – he has to be referring to a class he is a member of.

  39. Gravatar of Mark A. Sadowski Mark A. Sadowski
    9. March 2011 at 16:13

    It’s important to remind oneself where all this started. Time Magazine posted a list of top “Finance” blogs this week:

    http://www.time.com/time/specials/packages/completelist/0,29569,2057116,00.html

    Personally, having tutored many a Finance major, I think there’s a world of difference between Economics and Finance, but Time magazine doesn’t seem to think so. Whatever.

    Krugman made #1 and so many people asked him what he read. Hence his response. And his subsequent response when some asked if he read any conservative blogs.

    I read many of the blogs on Time magazine’s list but thought there were several notable absences. Those include Economistsview (although I’ve been venting over there a lot lately), The Angry Bear (mainly for Rebecca Wilder’s excellent posts on the Eurozone monetary policy situation), Worthwhile Canadian Initiative, Macro and other Musings, Kantoos Economics (when in English or when my German is up to it), Historinhas (got to plug for Marcus), Monetary Freedom and last but not least, The Money Illusion. I understand that not all of these blogs belong in the top 25, but several of these blogs represent a particular point of view that was completely and absolutely excluded from the list.

  40. Gravatar of thisdigitalrooster thisdigitalrooster
    9. March 2011 at 16:40

    This is off-topic, but I couldn’t find another way of contacting you.

    I’d like to hear your thoughts on Bitcoin. Here’s the technical paper,

    http://www.bitcoin.org/sites/default/files/bitcoin.pdf

    but you may want to read their non-technical literature. I don’t know how to describe it in short. It’s moralistic in some senses, but napsterrific in others, if you catch my drift. What’s more, it seems to be catching critical mass; I didn’t give it a second look the first three times I was referred to it in real ecommerce debates.

    In any case, it’s such an… orthogonal… take on monetary policy that my relatively shallow knowledge (I turned in a paper on union organization for my monetary policy credit as an undergrad, and specialized in econometrics in grad school) as a consulting work horse is just not enough to take all in. I’m genuinely spooked.

  41. Gravatar of Scott Sumner Scott Sumner
    9. March 2011 at 17:07

    Gabe, We need it now.

    Andrew, You said;

    “I think you misinterpret the meaning behind Krugman’s linking to another post on Cowen. I don’t he did that to belittle Cowen but because that post on Cowen was about Democrats vs Republicans on deficits and how Democrats were so much better (and therefore the parties are not equally responsible as he says)”

    I can’t believe people aren’t acknowledging the obvious. Krugman links to a post where he says DeLong is right to be mad at Cowen for pretending like the GOP and Dems are equally to blame. Right after linking to that post he writes:

    “a conservative blog, almost by definition, is a blog written by someone who chooses not to notice that asymmetry”

    I don’t know how Krugman could have made his contempt for Cowen any clearer.

    Andy, We’ll see:

    Joe, You said;

    “Notice how PK slips into the first person – “we’re supposed to pretend that both sides always have a point, but the truth is that most of the time they don’t. The parties are not equally irresponsible;” He can’t be referring to conservative bloggers there – he has to be referring to a class he is a member of.”

    Again, the meaning is plain as day:

    1. He doesn’t think conservative bloggers are worth reading.

    2. He cites Tyler Cowen supposedly pretending as if the GOP isn’t more to blame for our fiscal mess, as an example.

    3. He says conservative blogs are not worth reading precisely because they deny this asymmtry.

    Ergo, that’s the sort of reason Cowen isn’t worth reading.

    Exactly where is my reasoning wrong? To me it’s plain as day. He couldn’t have spelled it out any more clearly if he wanted to. I find it odd all these people are coming on here and pretending that Krugman didn’t really say conservatives aren’t worth reading, or deny that he regards Cowen as a conservative (which doesn’t even pass the laugh test.) It may shock you to know that he said what he said. But it’s right there in black and white. I don’t know why people find this so surprising–he says highly insulting things about distinguished conservative intellectuals all the time, even moderate conservatives like Mankiw. He basically accuses them of saying the things they do just to get cushy jobs and grant money. He’s also on record as admitting (in a New Yorker interview) that he doesn’t even realize he’s saying insulting things. He said something to the effect “I was surprised they took it personally” after he accused some conservative academics of being in it just for the money and they got upset. So he apparently doesn’t realize what he is doing. Which, oddly enough, makes me think more highly of Krugman. I’d hate to think he knew he was being so insulting.

    Mark, This blog is too narrow to fit the category Time was considering. They were looking at blog that could be read by non-economists. Sometimes this one can, but often it cannot. Plus the “finance” category is vague, as you said.

    I have no complaints about attention, as this blog has gotten much more than I ever expected.

  42. Gravatar of Mark A. Sadowski Mark A. Sadowski
    9. March 2011 at 17:20

    Scott,
    You wrote:
    “Mark, This blog is too narrow to fit the category Time was considering. They were looking at blog that could be read by non-economists.”

    Perhaps, but consider this. Econbrowser made the list. I often read Econbrowser just for its econometrics content, which frankly goes way over the head of most non-economists.

  43. Gravatar of Andrew G Andrew G
    9. March 2011 at 17:45

    Scott,

    I agree that you could reasonably read it as Krugman displaying his contempt for Cowen. I was reading it more charitably in that he was solely using that link to buttress the hyperlinked phrase “the parties are not equally responsible”. Coupled with Cowen’s own observations in the comments that Krugman has previously said he reads MR and your blog, the charitable reading made the most sense to me but I might be wrong.

  44. Gravatar of Brian Brian
    9. March 2011 at 18:30

    Labeling Tyler Cowen anything pejorative offends me. I’ve learned too much from Marginal Revolution to tolerate that.

  45. Gravatar of smintheus smintheus
    9. March 2011 at 18:46

    Scott, Given the large proportion of inane and highly partial assertions made by Tyler Cowen, I wouldn’t have guessed it was possible to describe him as a deep thinker much less the epitome of reason on the internets. But then, I wouldn’t have anticipated that you could read a fairly straightforward post by Krugmann and misconstrue it so badly (not to say snidely).

    Krugman is not asserting what you say he asserts. His point is simply that right wing political and economic blogs do not consistently produce information or analysis of comparable quality to what left wing blogs do. Instead they tend to generate or repackage partisan talking points, or worse. He’s mainly talking about political commentary, so he likens the disparity in quality from left to right to a comparison between the quality of Maddow’s and Beck’s commentary.

    You may not agree with his assessment, but Krugman is saying explicitly that it’s his personal evaluation of their merits based upon his reading of these blogs. It’s not a question of taking pride in ignoring certain views; it’s an assessment of the value and credibility of analysis that he has found on offer in conservative blogs.

    Nor does it mean, if he declines to read right-wing blogs, that he’s ignorant of conservative thinking…much less that he’s “proud” of being ignorant of it.

    Nor is Krugman’s an unusual assessment. Many people have come to similar conclusions by reading right-wing political blogs and simply fact-checking them. Over and over again I’ve found high profile and highly touted right-wing political blogs to be preposterous indeed: intellectually dishonest, incompetent, credulous, absurdly partisan, prone to making things up or exaggerating facts beyond all recognition, pressing arguments to ridiculous extremes, frankly hypocritical, and even sickeningly bigoted. I have yet to find a single right-wing political blog that can compare in rigor and credibility to a fair number of good left-wing blogs – and that’s not for lack of searching for them. They’re just scandalously bad as a group. So like Krugman, I don’t consult any of them regularly.

    Your assessment of right-wing blogs differs? Good for you.

    As for your bizarre insistence that Krugman is citing Cowen as an example of a conservative who isn’t worth reading, it brings into serious doubt your reading skills. Krugman is linking to a post of his own, which argues that it’s an example of false balance to pretend that Democrats are as guilty as Republicans in their fiscal irresponsibility. His point is that he refuses to engage in the game of false balance.

    It’s the first element in a tricolon: No, Dems and Reps are not equally irresponsible fiscally. No, left and right wing commentators are not operating on the same level of credibility. And no, left and right wing blogs are also not at the same standard because, at a minimum, the right wingers feel they have to pretend that their partisan policies and talking points are not hollow.

    Tyler Cowen enters into it only because he happened to come up in the post discussing how much more irresponsible Republican fiscal policy has been since 1980. Doesn’t mean Krugman was arguing that Cowen should be ignored, as I think any reasonable reader of Krugman’s post could perceive.

    All in all, an over-the-top rant.

  46. Gravatar of Robert hurley Robert hurley
    9. March 2011 at 19:01

    Everyone has biases based on his or her values. Krugman has stated his, but he provides data to support his positions. I do not pretend to be an economist but I read Mark Thoma’s blog and read a number of the blogs he posts. Since they include economist who disagree with Krugman and since Krugman has singled out Thoma, he must read him and others. Is he a curmudgeon, yes., but he only says in print what we say in private about those whose arguments we judge as weak. Plus he is entertaining and whether you agree with him or disagree, I think he raises the level of discourse of economic issues by providing information about them in a understandable way. I also think the doctrinaire right exposes their weakness with the vituperative attacks on him. He actually acts as a lightening rod illuminating the nuts for all to see. They, the nuts, actuaaly do a disservice to mainstream conservative economist because they tend to drowned them out – maybe a bit like Gresham’s Law!

  47. Gravatar of redonkulus476 redonkulus476
    9. March 2011 at 19:39

    Douthat is worth reading.

  48. Gravatar of e e
    9. March 2011 at 20:44

    Scott

    Digby is just the shortest distance between whatever democratic politicians are saying today and self righteous name calling.

    Krugman provides a link if you want to peruse her body of work but heres a link to her argument that although the fundamental premise of Markos Moulitsas’ “American Taliban” is false, its still “infinitely interesting” to claim that american conservatives are “almost indistinguishable from the Afghan Taliban.”

    http://digbysblog.blogspot.com/2010/09/lefty-literalism-one-more-time.html

    Obviously that kind of thing isn’t unheard of but its pretty safely worse than Marginal Revolution.

  49. Gravatar of Fred Fred
    9. March 2011 at 20:53

    I’m a libertarian, and I largely agree with Smintheus and Andrew G.

    Yes, you can read this the way Scott does – but its not the natural reading. Especially since this is Krugman we’re talking about. If he wanted to insult Tyler, he’d have done it directly, not by implication from a hyperlink. Subtle he is not.

    And maybe, just maybe, the fact that so many of us disagree with your interpretation means it isn’t “clear as day.”

    Scott – as you suspected earlier, you shouldn’t have posted this. I don’t think anyone is learning anything new about PK from this. We all knew coming in that he could be a jerk, and as Tyler pointed out, he regularly responds to MR, and so even under your uncharitable interpretation of what he said, he’s clearly exaggerating.

    But you’ve demeaned yourself. I think you figured you were being the reasoned defender of Tyler – but his decision not to escalate the perceived slight was the better one. You can’t pose as the defender of reason when you’re taking cheap shots and taunting your own liberal readers. You make yourself look like a hack – which is sad because you aren’t one.

  50. Gravatar of mbk mbk
    9. March 2011 at 21:06

    Scott,

    to give my voice in the poll, I also did not think Krugman was attacking Cowen here. That being said your other points stand. Krugman’s condescending tone of belonging to a high priest class who owns the truth, implying that no other legitimate view points even exist, is hard to stomach. Once again a nice example of how people with high IQ can utterly lack rationality or wisdom or even a mature view of the social universe with its diversity of opinions. For instance who says that people who agree on the facts must therefore agree on future goals, much less on the means to achieve them? The problem of different preferences is totally ignored by this kind of people. They all assume everyone must want what they want, and if that does not happen then the deviants must either be deluded on the facts or sinister on the goals. But I disgress.

    One thing that makes your blog unique Scott, is something that Cowen does not do, nor Krugman, nor Hanson: you seem to actually read and to reply to each and every comment. That makes commenting immensely rewarding and interesting here on The Money Illusion. It is the most truly interactive and debate rich blog I read by a wide margin and this is why I am coming back even though I have little intersection with monetary policy.

  51. Gravatar of Full Employment Hawk Full Employment Hawk
    9. March 2011 at 21:32

    I read both Krugman and this blog, and greatly benefit from reading both views. Since I sustantially agree with you on monetary policy and substantially agree with Krugman on fiscal policy, I have a strong incentive to do this.

    But I think Krugman is making a big mistake not reading this blog, especially since you have significant areas of agreement.

  52. Gravatar of William William
    9. March 2011 at 21:57

    Scott,

    Yours is literally my favorite blog and I have no love whatsoever for Paul Krugman, but let me just say that in my opinion, the sooner you can put this whole thing behind you, the better.

  53. Gravatar of Quote Of The Day at Hispanic Pundit Quote Of The Day at Hispanic Pundit
    9. March 2011 at 23:52

    [...] every country throughout the world after 1980, usually much more so than in the US.” — Scott Sumner, professor of economics at Bentley University commenting on Krugman’s admission that he [...]

  54. Gravatar of Gregor Bush Gregor Bush
    10. March 2011 at 07:04

    Smintheus,

    “Krugman is not asserting what you say he asserts. His point is simply that right wing political and economic blogs do not consistently produce information or analysis of comparable quality to what left wing blogs do. Instead they tend to generate or repackage partisan talking points, or worse.”

    No. What Krugman said is that there are no blogs on the right side of the political spectrum that are worth reading. He effectively told his readers that The Money Illusion, Marginal Revolution, EconLog and Becker/Posner are not worth reading.

    Take the Money Illusion, for example. Is there a left wing blogger out there that has done as much work on drawing the parallels between monetary policy in the Great Depression and monetary policy in the current crisis? Is there a left-wing blogger out there with as much expertise on the Great Depression as Scott has? (yes, Delong is good in this regard, but Scott is better) Is there a left-wing blogger out there that was as prescient about the need for monetary stimulus so early on in the current crisis? Are the posts that Scott produces really not worth reading?

    Krugman could have said something like “for any readers interested in the monetary parallels between the current recession and the Great Depression the Money Illusion is a worthwhile source. I disagree with a good deal of what Scott writes but his contribution to the debate is invaluable”. Or he could have said something similar about Becker’s blog or Kling’s blog. But he didn’t.

    A true intellectual wants to seek out and address the best arguments that run counter to his worldview. Krugman told his band of loyal readers to do the opposite, effectively saying there are no good arguments that run counter to his (and his readers’) worldview. This insular mindset is confirmed by how infrequently Krugman challenges the worldview of the typical NYT reader. When was the last time he wrote a column extolling the benefits of international trade? (the field for which he was awarded the Nobel Prize).

  55. Gravatar of sub sub
    10. March 2011 at 07:32

    krugman is vile, arrogant beyond comprehension. his statements here are classic elitist liberal tripe. “i’m so smart, why would i ever recognize a contrary opinion?” if i ever see him on the streets of NYC, where i live, i will let him know what i think of him

  56. Gravatar of James Evans James Evans
    10. March 2011 at 07:54

    Krugman is ignorant, but reading him sharpens your arguments?

    So what does that make you?

  57. Gravatar of bertusmaximus bertusmaximus
    10. March 2011 at 08:16

    “A true intellectual wants to seek out and address the best arguments that run counter to his worldview.”

    could not have said it better.

  58. Gravatar of nydivide nydivide
    10. March 2011 at 08:23

    How about this gem. Paul Krugman on August 2, 2002 in the New York Times:

    “To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

    http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html?scp=4&sq=krugman%20mcculley%20bubble&st=cse

  59. Gravatar of W. Peden W. Peden
    10. March 2011 at 08:29

    Smintheus-

    “His point is simply that right wing political and economic blogs do not consistently produce information or analysis of comparable quality to what left wing blogs do. Instead they tend to generate or repackage partisan talking points, or worse.”

    How did you only get that from-

    “Some have asked if there aren’t conservative sites I read regularly. Well, no. I will read anything I’ve been informed about that’s either interesting or revealing; but I don’t know of ANY economics or politics sites on that side that regularly provide analysis or information I need to take seriously. I know we’re supposed to pretend that both sides always have a point; but the truth is that most of the time they don’t. The parties are not equally irresponsible; Rachel Maddow isn’t Glenn Beck; and A CONSERVATIVE BLOG, almost by definition, IS A BLOG WRITTEN BY SOMEONE WHO CHOOSES NOT TO RECOGNISE THAT ASYMMETRY. And life is short.”

    (Emphases added.)

    Krugman is making two claims here. One is similar to the one that you thought he had made: he’s saying that there are no conservative sites that regularly provide anything he needs to take seriously. It’s not just that he thinks that most conservative blogs aren’t worth reading; it’s that he thinks that all of them (as far as he knows) aren’t worth his precious time.

    The other point, which is the attacking part of that paragraph, is a snide remark against conservative bloggers in general: any conservative who writes a blog is someone who has chosen to disregard the obvious fact that conservatives are irresponsible, otherwise they wouldn’t write conservative blogs. It’s by far the most interesting and controversial part of his article and he doesn’t argue for it at all (perhaps because he doesn’t spend enough time reading alternative opinions to feel the need to do so!).

  60. Gravatar of W. Peden W. Peden
    10. March 2011 at 08:37

    Fred,

    It’s an indirect attack on Tyler Cowen and all conservative bloggers. You can disagree with it or you can disagree with it, but it’s there.

    Robert Hurley,

    Pet peeve: arguing from a false premise is not the same as a fallacious argument. A fallacious mode of argument is one whose premises can be true and its conclusion false; in logical jargon, it is one that produces arguments that are invalid even if they are not unsound. For example-

    1. China is the second richest country.

    2. Chou is a Chinese citizen.

    - Therefore, Chou is the second richest citizen.

    1 & 2 are true, but the conclusion is false. This is a case of the fallacy of division. What is true of a composite need not be true of all the parts.

    We go to quite some lengths in philosophy to get our freshmen students out of the habit of using “fallacious” to mean “false”. I wouldn’t bring it up normally; however, since you later started throwing around insults about other people being unfamiliar with logic, I thought I’d help you out. If one wants get away with being rudely pedantic, one must be first be knowledgeable.

  61. Gravatar of W. Peden W. Peden
    10. March 2011 at 08:43

    Full Employment Hawk,

    I quite agree. I think Krugman is missing out on a very good ally in the pro-stimulus crowd: “Hey, even a neo-liberal conservative like Scott Sumner thinks we really need monetary stimulus right now!” and so on. I used to think that Krugman ignored this opportunity because he had such contempt for monetary stimulus as opposed to fiscal stimulus, since there is something (or perhaps many things) that is psychologically attractive about fiscal stimulus (especially in the form of government spending) to social democrats and, vice versa, repellant to libertarians, as a general rule.

    However, this article from Krugman makes me wonder if his neglect of this opportunity has a quite different cause: he doesn’t particularly case about what anyone outside his ideological bubble have to say, so there’s little point in finding out what someone like Scott Sumner has to say. Krugman could make a big positive difference by being just a little bit open-minded and pragmatic about his allies.

  62. Gravatar of Mark A. Sadowski Mark A. Sadowski
    10. March 2011 at 08:53

    One can find plenty of misinformation on all ends of the political spectrum. But if one wants to find flat out lies you have to read the right wing Investors Business Daily (not a blog, but still). Take this article from IBD today:

    “More than one-third of all wages and salaries in this country are actually government handouts. We should be alarmed that we’ve become a nation of dependents.

    Using data mined from the Bureau of Economic Analysis, TrimTabs Investment Research has found that 35% of wages and salaries this year will be in the form of a government payment.”

    http://www.investors.com/NewsAndAnalysis/Article/565496/201103091841/Atlas-Twitches.htm

    Sounds alarming doesn’t it. The only problem is it’s a lie.

    How did they reach this conclusion? They went to BEA Table 2.1 and divided line 16 (personal current transfer receipts) by line 3 (wage and salary disbursements). Line 16 includes such things as Social Security, Medicare, Medicaid, Unemployment Insurance, Veterans Benefits etc. Line 3 is self explanatory. Is Line 16 a subcategory of Line 3? Of course not (duh).

    One can take any two unrelated categories of the NIPA tables and make similarly absurdly misleading statements. For example if I take corporate profits and divide it by wages and salaries I could then say “25% of all wages and salaries in 2010Q3 were corporate profits”. The ratio is true but corporate profits are obviously not a subcategory of wages and salaries. In the final analysis that would be a flat out lie.

    Now, transfer payments as a percent of all personal income have risen in the past decade (from about 13% to 18%). But mostly that’s a story about Medicare and Medicaid and to a lesser degree the current level of unemployment benefits. That might be an interesting topic to discuss. But obviously that’s not what IBD is all about. Their job is to misinform and fan the flames of outraged ignorance.

    In any case, I don’t waste a lot of time reading IBD or even things that are somewhat less deceptive. I’m looking more for light than heat.

  63. Gravatar of b_a b_a
    10. March 2011 at 09:25

    Upon a close reading, it is not evident to me that Krugman means Tyler Cowen. Let me give you an interpretation based upon textual evidence.

    Krugman writes “I know we’re supposed to pretend that both sides always have a point; but the truth is that most of the time they don’t. The parties are not equally irresponsible; [...]”

    The link at “not equally irresponsible” goes to a post which begins:

    “Brad DeLong is mad at Tyler Cowen, with reason — for Cowen writes about US fiscal irresponsibility[...]”

    and ends:

    “Democrats aren’t fiscal saints. But we have one party that has been generally responsible, [...]”

    Both at the beginning and the end of the post, the adjective “(ir)responsible” clearly refers to a political party.

    To be sure, in the linked post Krugman does criticize Cowen as one who “who makes it a plague-on-both-houses issue or, worse, makes it seem as if Obama is the villain, is in an essential way misleading his readers”.

    But I think that when in the main post Krugman criticizes the conservative party and conservative blogs, it is not clear that he means that Cowen is a conservative, even at his link there appears Cowens name. You yourself pointed out that you would not see Cowen as a conservative. Instead, Krugman talks about Cowen’s article which does not attribute the blame to Conservatives that Krugman thinks they deserve. Krugman’s point that, in his opinion, Conservatives do not have good arguments, should not be mistaken for him saying that Cowen is a conservative.

  64. Gravatar of “Claws” shown « Historinhas “Claws” shown « Historinhas
    10. March 2011 at 10:30

    [...] and, indirectly, to Tyler Cowen´s article, where it all began. That got a strong reaction from Scott Sumner (and enticed many comments): You might ask whether I’m being a bit harsh calling him [...]

  65. Gravatar of Morgan Warstler Morgan Warstler
    10. March 2011 at 10:32

    DeKrugman is not an economist. He wakes up everyday thinking:

    1. Let’s get some more wealth redistributed.
    2. Let’s put more power in the hands of the central government.

    And then he talks about economics with a careful effort to achieve those two things.

    You can’t really do Progressive Economic blogging without directly confronting Libertarian thinking routinely.

    Finally, DeKrugman when he wrote about Uncle Milty – lifted up his skirt for all to see for the rest of his lifetime.

    If he’s not actively searching out modern day Friedmanites he’s going to make more and more and more mistakes.

    I said to expect this; he saw where the logic of things was going, he’s wasn’t happy with the outcome and he’s turned around and headed back a bit.

    More of this – it is time to end him.

  66. Gravatar of MikeG MikeG
    10. March 2011 at 10:37

    Wow!!

    I found some reasonable ‘conservatives’ here. What a find.

    Maybe we can save ourselves from a civil war after all. Those of you here spewing the hate, could you go somewhere else, please, the adults would like to talk a bit more before we start shooting.

    As for Krugman, after reading much of his economic work, and his articles, it is clear he has fixed his position; until we do something about income and asset asymmetry, all else is secondary.

    I happen to agree with this point, but not necessarily his approach.

    Thanks for having this spot.

  67. Gravatar of Contemplationist Contemplationist
    10. March 2011 at 10:55

    Mark A. Sadowski

    Thanks for that illuminating example. I always took IBD with a grain of salt, for, if things like that were true, you would surely see them on the WSJ as well. Now I shall just throw the whole salt shaker on it.

    I, too am looking for light. I was a micro-econ obsessed libertarian before the crash of 08. Then all these macro arguments started and it was very hard to make sense of them. Stimulus, ricardian equivalence, treasury view, money multipliers, inflation etc etc. This attracted me to the Austrian view which made a lot of intuitive sense.

    Then one fine day Tyler Cowen recommends this new blog – Money Illusion and aha! monetary policy now makes sense! Its not just a tool of demons to deprive citizens of the value of their currency.

    I know no one has any interest in the evolution of my views, but I’m just giving an example of how light instead of heat can change minds. I’m still a hardcore libertarian but I accept the quasi-monetarist view of MP though I still think ABCT has a role to play. Bill Woolsey might take this view.

  68. Gravatar of smintheus smintheus
    10. March 2011 at 11:12

    Gregor Bush:

    There are some really basic points that neither Scott nor any Krugman critics are acknowledging.

    First, the Cowen piece that K links back to via himself and DeLong is not a blog post at all. It’s a NYT column. So it doesn’t validate Scott’s hyperbolic claim that K is saying Cowen’s blog is worthless.

    Second, DeLong and K are absolutely right. Cowen was seriously deficient in that column in not identifying which (Republican) administrations are most culpable. In my opinion, that’s pretty characteristic; Cowen frequently pulls his punches against Republicans. He is very open to the charge of partisanship. So if K had been using that link to single out Cowen as an economic blogger who’s not especially worthwhile (which I don’t think K was doing), then he would have had ammunition. Cowen’s column certainly struck me as intellectually dishonest – not just for the reason DeLong/K highlight, but also because in his further campaign against Social Security benefits he tries to elide the differences with Medicare and Medicaid.

    Third, you can’t just ignore Krugman’s opening words: “A followup on the post about mostly economics reading; on politics, culture, etc. there are other blogs I read fairly often. On politics…” He’s mainly talking about the political blogs he reads. Yeah, he later tosses in a single reference to ‘economic sites’ as well, but his focus obviously is political blogging, where the disparity in quality between left and right leaning sites is extremely stark. And that’s the point of his tricolon, which I highlighted earlier: that right wing political blogs are dedicated to fluffing up a party that desperately needs to start focusing on matters of substance.

    W. Peden:

    As I said, Krugman is focused on political blogs. Simple fact-checking reveals most prominent right-wing political bloggers to be ridiculously unreliable. Besides, I’d point out that there are several prominent formerly right-wing bloggers who got fed up with the hyper-partisan, crazy, fact-free blogging on their side and broke very publicly with their former allies. I can think of no examples of the reverse, of prominent left-wing bloggers saying ‘these guys are crazy and should not be trusted’. In addition, if you dig down into 2nd and 3rd tier right wing political blogs, you find a lot of gross ignorance and appalling crudeness. On the left side, there are very many obscure but highly careful, insightful, well informed bloggers…often more impressive the higher profile left bloggers.

    So if as I believe K is saying that conservative political blogging is pretty much a wasteland, then yeah, he’s right. He may or may not find sufficient value in conservative economic blogs, but I wouldn’t press this one blog post to argue that.

  69. Gravatar of smintheus smintheus
    10. March 2011 at 11:18

    IBD is a laughingstock, about on par with blogs like Atlas Shrugs.

  70. Gravatar of Rien Huizer Rien Huizer
    10. March 2011 at 11:22

    Scott,

    I do not really care what political persuasion people feel attracted to, but weren’t you a libertarian a short while ago? And calling a Nobel winner ignorant can only be attributed to a brief lapse, I would guess..

    Have a nice holiday though.

  71. Gravatar of Rien Huizer Rien Huizer
    10. March 2011 at 11:28

    Scott,

    And I omitted that “conservative” in my book is a lot nearer to “ignorant” than “libertarian”..

  72. Gravatar of CA CA
    10. March 2011 at 12:37

    I think NRO’s “The Corner” blog and FrumForum are pretty decent conservative political blogs and do not represent “laughingstocks” or “wastelands.”

  73. Gravatar of Robert Hurley Robert Hurley
    10. March 2011 at 12:38

    Peden:

    Neat way you have of ignoring the subject matter. The claim was that Krugman’s post on his blog proved he was ignorant. Now please apply your superior logic to evaluating that claim.

  74. Gravatar of W. Peden W. Peden
    10. March 2011 at 12:54

    Smintheus,

    “As I said, Krugman is focused on political blogs.”

    I disagree, at least insofar as I think that we cannot limit the scope of his claim to conservative political blogs, even if that would make it a lot more accurate. To quote Krugman again-

    “but I don’t know of any ECONOMICS or politics sites on that side that regularly provide analysis or information I need to take seriously.”

  75. Gravatar of W. Peden W. Peden
    10. March 2011 at 13:07

    Robert Hurley,

    I’m just helping you out. Intellectually patronising someone is difficult and we can all do with all the help we can get.

    Whether or not Krugman is ignorant is the least interesting question here. If Krugman is asserting that he doesn’t read conservative economic blogs, then we know that he is probably ignorant of what they have to say.

    The interesting questions are (a) is Krugman justified in ignoring what ALL these blogs have to say?; and (b) does Krugman’s analysis/causes suffer as a result?

    In answer to (a), obviously Krugman would be justified in ignoring what most conservative blogs have to say: life is short, he’s busy and a lot of political discussion in general is hackery of the purest sort. I wouldn’t read what Glenn Beck has to say about economics if I was a conservative, let alone if I was a liberal. Nor, however, will I read what Brian Leiter has to say about economics; that’s not a mistake that I’m going to make twice.

    But this is just a trivial truth: what isn’t worth reading isn’t worth reading. Even if conservative blogs are in general are worth less attention than liberal blogs (I wouldn’t know if this is true, since I don’t read political blogs, or watch political shows for that matter, regardless of political orientation; I keep up with The Money Illusion and occasionally Marginal Revolution out of academic interest) that’s no reason to have a blanket condemnation of all conservative bloggers.

    (b) is what has interested me the most since reading Krugman’s article. It’s provided a possible explanation for why Krugman is so bad at obtaining potential allies from the right. I had previously thought it was due to some sort of special prejudice against monetary stimulus or some sort of puerile partisanship, but now I suspect that Krugman believes he has a perfectly good reason to never spend more than 30 minutes straight thinking about what someone like Scott Sumner has to say. That’s a lot more intellectually respectable, but it’s still a shame for Krugman and the causes he supports.

  76. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    10. March 2011 at 13:21

    I guess Krugman was right, Ricardo’s idea is difficult, so difficult Krugman can’t understand it:

    http://www.nytimes.com/2011/03/07/opinion/07krugman.html?_r=1&scp=1&sq=hollowing%20out%20of%20america&st=Search

    ————quote————-
    So if we want a society of broadly shared prosperity, education isn’t the answer — we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.

    What we can’t do is get where we need to go just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages.
    ————–endquote—————

    Luddites of the world, unite!

  77. Gravatar of smintheus smintheus
    10. March 2011 at 14:12

    CA

    I disagree. Andrew McCarthy is practically a working definition of “laughingstock”. I see the neocon war-cheerleaders like Frum as utterly discredited.

    Peden:

    As I say, Krugman makes a single nod in the direction of econ blogs, but otherwise his post is about the political blogs he reads. The blogs he actually lists may be underwhelming, but they include no economic blogs left or right.

    And Scott generated all these comments because he stated that Krugman proudly claims to be ignorant of conservative thinking. That strikes many of us as a preposterous reading of what K says.

  78. Gravatar of Stephen Cusulos Stephen Cusulos
    10. March 2011 at 16:47

    Hi Scott. I introduced myself via phone the other day (regarding Facebook and also the People’s Party, 1890′s). Regarding Krugman, he states: “Some have asked if there aren’t conservative sites I read regularly. Well, no. I will read anything I’ve been informed about that’s either interesting or revealing; but I don’t know of any economics or politics sites on that side that regularly provide analysis or information I need to take seriously.”

    I think he is relatively straight forward here. He does go to these site regularly, but will go if he has “been informed…..” And his reason for not visiting is disarmingly honest: “I don’t know of any economics or politics sites on that side that regularly provide analysis or information I need to take seriously.”

    This dismissive attitude certainly suggests that he does have much regard for conservative thought. And it suggests a certain degree of “hubris” (perhaps this is an understatement. But my impression is that he is willing to engage in argument with those whom disagree with him (which is a positive) Also, it seems that though he can be overly blunt (which can be a negative), he tends focus first and foremost on what he sees as the strength or weakness of the argument or of the data (which is also a positive) even though he can be a little cranky and through in a few snarky comments (which also can be a negative). I myself, being Greek, do like the engagement of the argument. Norwegian, on the other hand, may not like a Krugman; except, of course, Thorstein Veblen (who might be more Krugman than Krugman). Is Krugman “arrogant”? I don’t know if that is the term I would use. He is extremely self-confident, he is very aggressive, but “arrogant”? I need to run off to Liberally Drinking get together with some of by progressive friends. I have some additional thoughts to post later. Stephen Cusulos, Minneapolis

  79. Gravatar of Mark A. Sadowski Mark A. Sadowski
    10. March 2011 at 20:12

    Now that the debate has died down let me go out on a limb and agree with Krugman. After I researched the Great Stagnation I wondered why Cowen thought the great lack of TFP growth was such a mystery. He refers specifically to papers by Alexander Field. Field makes a long-winded but carefully and painfully detailed argument that spurts in TFP growth are due to certain kinds of government investment. It seemed extremely odd to me that Cowen relied on Field’s research papers to make his argument for the Great Stagnation but then totally ignored Field’s explanation for why the Great Stagnation in TFP growth occurred. If one were really interested in the truth one would deal with these matters head on instead of totally ducking them. Krugman’s right, Tyler Cowen’s a huge coward.

  80. Gravatar of Mark A. Sadowski Mark A. Sadowski
    10. March 2011 at 20:33

    I’m an even bigger coward, but that’s beside my point.

  81. Gravatar of Robert hurley Robert hurley
    10. March 2011 at 21:00

    W Peden. I think it is reasonable to say that anyone, Krugman included, can ignore any blog they want and still understand what those who disagree with you believe. There are many better sources of information. What some take offense to is his intellectual arrogance. But given the inane reponses he generates, I can’t say I blame him. In any case, I think he does a public service in discussing complex issues. As one who believes that our society should promote social justice, I am going to be inclined to agree with his arguments. But in the end the data has to support his views to be valid.

  82. Gravatar of Mark A. Sadowski Mark A. Sadowski
    10. March 2011 at 21:08

    Robert Hurley,
    You used the phrase “social justice”. Hmmm.

    Interesting phrase. Just so you don’t think we libertarians are all cut from the same cloth check out this site:

    http://bhl.typepad.com/bleeding-heart-libertaria/

  83. Gravatar of Greg Ransom Greg Ransom
    10. March 2011 at 22:24

    Krugman has also claimed that no economics written before about 1970 is worth reading — and he represents himself as proud of the fact that he hasn’t and won’t read it.

    And Krugman has gone a long way toward substantiating the fact that he indeed hasn’t read it.

    Even Krugman’s “Keynes” doesn’t seem to be derived from the original text.

  84. Gravatar of Greg Ransom Greg Ransom
    10. March 2011 at 22:35

    Krugman is a man of very low character.

    Why doesn’t anyone just say it?

    Dan Klein provides a strong case for why being honest about such things — and not fearing speaking of the nakedness of the emperior — is important to a health scientific community, and social community.

  85. Gravatar of Greg Ransom Greg Ransom
    10. March 2011 at 22:38

    I should note that event the rather spineless omnibudsman of the NYTimes has seen fit to acknowledge Krugman’s incapacity to adhere to even the most basic journalistic ethics.

  86. Gravatar of Greg Ransom Greg Ransom
    10. March 2011 at 22:43

    Speaking of “psychology” is Cowen’s dodge to avoid speaking of the issue of character — the elephant in the room.

    Cowen respects the naked emperor’s power, which requires that he not step on the man’s toes and offend the emperor.

  87. Gravatar of Full Employment Hawk Full Employment Hawk
    10. March 2011 at 23:58

    “DeKrugman is not an economist. He wakes up everyday thinking:
    1. Let’s get some more wealth redistributed.”

    There has certainly been a lot of redistribution of wealth in the last 30 years. From the middle class and the poor to the very rich. The portion going to the people at the very top has sharply increased while real wages of the median workers have stagnated at best.

  88. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 00:05

    “There has certainly been a lot of redistribution of wealth in the last 30 years. From the middle class and the poor to the very rich.”

    Maybe people need to start asking, “How do we bring a halt to this process before nothing is left for the middle class and the poor?”

  89. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 00:15

    ” He wakes up everyday thinking:… Let’s put more power in the hands of the central government.”

    I think you are projecting your own thought process on Krugman. Since you consider a small government as a desirable end in itself, you fallaciously conclude that people who believe that government action is needed to achieve desirable economic goals must consider a strong government as a desirable end in itself.

  90. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 00:17

    “Krugman is a man of very low character.”

    Ideologues of any persuation tend to consider people who disagree with their dogma to be bad people.

  91. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 00:28

    “Richard Fisher (Dallas) is baiting Bernanke hard and heavy right now.”

    Fisher was chosen primarily by bankers and therefore should be viewed as representing the interest of bankers, and not the American people.

    As long as the presidents of the individual Federal Reserve Banks are chosen by bankers instead of the elected representatives of the people, they should not have a vote on the FOMC.

    An independet central bank is only consistent with the principles of a representative democracy if it is run by people chosen by, and ultimately responsible to, the representatives of the people.

  92. Gravatar of Rien Huizer Rien Huizer
    11. March 2011 at 04:28

    Full Employment Hawk,

    I like your comments about redistribution. It is amazing how the (rich) minority has been able to achieve the political result that the (not so rich) majority let this happen. How?

  93. Gravatar of Bonnie Bonnie
    11. March 2011 at 05:11

    stopped reading Krugman after his hit piece on Milton Friedman a few years back. To his point, however, there’s only so much of his view point and of others like him I can read before it seems like just more of the same spew. It’s boring to keep reading it, and I have trouble following points that have no obvious golden threads of logic or rationality running through them. It’s so incredibly easy to say do X, Y and Z, and have someone else pay for it while ignoring the consequences of doing too much or the possibility that too much has already been done.

    I am not happy with the majority of conservative blogs either because the movement seems to be becoming overtaken with Austrian ideals and they can’t seem to explain how to get from the kind of economic world we have to their vision of the ideal world. They are just as irrational in their end of the spectrum as Krugman is in his. They are both wrong; not necessarily because their theories are wrong, but because they lack practical application to our world as it is and the circumstances in which we find ourselves.

    I found Milton Friedman intriguing because he was not naïve to reality. While he was not bashful in espousing his vision of the ideal world, he also tempered that vision with reality and provided what seemed to me like a reasonable roadmap for how to get from point A to point B without causing more problems than are solved. He spent an incredible amount of time, nearly the entire latter part of his life, illustrating why his ideas make sense, and I don’t see many others so dedicated to their point of view doing the same.

    I personally do not find Krugman as possessing any kind of extraordinary brilliance, as some seem to suggest. He seems to be politically savvy, but that is likely the extent of any extraordinary traits he posses. It is easy to have an opinion and chatter on about it day after day, but it is quite another matter to have a practical application for that opinion that makes a real difference in the world.

  94. Gravatar of JA JA
    11. March 2011 at 05:33

    It is simply amazing that anyone thinks Krugman is clueless or ignorant. He is not.
    He is an extreme left wing ideologue whose economic views are subordinate to and informed by his political ideology. He will construct his economic arguments to conform to his extreme left wing worldview.
    As an example, Krugman was all over Bush when he,Bush, was “busting the budget.” But now that Obama makes Bush look like a cheapskate, well, Krugman claims that Obama is simply not spending enough. Further, if more spending – above and beyond what Obama is spending will improve the economy, then obviously, if Bush had spent just as much, the economy really would have taken off.
    Krugman is an ideologue who uses his economic credentials to push his socialistic, neo-communist political ideology.
    This is why many have stopped reading his articles which are simply left wing propaganda screeds. He is a fundamentally a dishonest individual who would have been a star editorialist for Pravda or Izvestia.

  95. Gravatar of W. Peden W. Peden
    11. March 2011 at 05:36

    Full Employment Hawk,

    “Ideologues of any persuation tend to consider people who disagree with their dogma to be bad people.”

    Very true. As Sowell said, what they believe seems so obvious that they think that those who disagree are either incredibly stupid or incredibly dishonest. Like us all, Sowell himself has his moments when he’s guilty of this assumption.

    We’re all very quick to acknowledge that the world is complex, but how many of us are willing to say that the world is so complex that two very intelligent people might honestly disagree about it?

  96. Gravatar of John Papola John Papola
    11. March 2011 at 06:33

    Krugman is not an economist any longer and shouldn’t be treated as such by anyone seeking honesty. He is an entertainer. He is Rush Limbaugh. His bread is buttered by confirming the biases of small-minded and infantile collection of sycophants and we need look no further than his comments section to prove that.

    It’s fine. He’s entitled to cravenly seek his own self-interest by putting on a fantastic and farcical puppet show for mental children. I’ll keep reading his nonsense out of my own desire to understand what runs through the minds and across the pages of people with whom I disagree.

    But I don’t respect him. He doesn’t deserve any respect. He’s a scoundrel and a snake-oil salesman.

  97. Gravatar of bertusmaximus bertusmaximus
    11. March 2011 at 08:48

    “An independent central bank is only consistent with the principles of a representative democracy”

    This is a contradiction in terms.

    Whilst I certainly agree that wealth distribution is huge problem that needs to be addressed the issue is a (structural) political one, not economic at its core. Its no coincidence that corporate profits as a percentage of GDP are back to their all time highs whilst average wages and employment languish.

    Speaking of which, can someone please tell me of any studies with empirical evidence that higher stock prices create lower unemployment (causation rather than coincidental)? Is the Japanese experience just an outlier?

  98. Gravatar of tabrussell tabrussell
    11. March 2011 at 09:30

    @Mark A. Sadowski

    First, nice catch on the IBD article. As I read it, I couldn’t figure out where the 35% number came from, and it’s a good rule of thumb to not believe a number unless you understand where it came from and agree with that methodology.

    Second, I never knew this place existed. Thanks for the lead.

    Last, isn’t the IBD editorial page a fun place? :-)

  99. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 10:10

    “Very true. As Sowell said, what they believe seems so obvious that they think that those who disagree are either incredibly stupid or incredibly dishonest.”

    That certainly applies to some of the people who have posted about Krugman.

    I agree with Krugman on many issues, but not on his view that the economy is in a liquidity trap. But Scott’s criticism of Krugman on this post is valid. Krugman would especially benefit from reading this site. Scott and Krugman have a number of areas they actually agree on. Both agree that the economy needs additional stimulus to aggregate demand and Krugman even supports QE II.

  100. Gravatar of Robert Hurley Robert Hurley
    11. March 2011 at 10:11

    Mark Sandowski

    Interesting site. The few libertarian I know are often charitable but when it comes to a conflict between their ideology and working for social justice which could take the form of Government interference in the lives of people, they seem to always choose to adher to their ideology. I appreciate your pointing out the site to me

  101. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 10:16

    “An independent central bank is only consistent with the principles of a representative democracy” This is a contradiction in terms.”

    Not if the people running the central bank are appointed by the elected government and ultimately responsible to it.

    The Fed at the present time is inconsistent with the principles of a representative democracy because an important number of the people on the FOMC (half at the present time) are largely chosen by bankers and because the Fed is in gross violation of its congressional mandate to achieve maximum employment.

    Maximum employment, its not just a good idea, ITS THE LAW!

  102. Gravatar of Richard A. Richard A.
    11. March 2011 at 10:46

    While I am certainly to the right of Krugman, sometimes he does hit home runs.

    The “Rationing” Switcheroo
    http://krugman.blogs.nytimes.com/2011/03/11/the-rationing-switcheroo/

  103. Gravatar of Greg Ransom Greg Ransom
    11. March 2011 at 10:51

    Hayek was thinking exactly of a future Paul Krugman when he said this about the “Nobel” prize in economics:

    “the Nobel Prize confers on an individual an authority which in economics no man ought to possess.

    This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence.

    But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.

    There is no reason why a man who has made a distinctive contribution to economic science should be omnicompetent on all problems of society – as the press tends to treat him till in the end he may himself be persuaded to believe.

    One is even made to feel it a public duty to pronounce on problems to which one may not have devoted special attention.

    I am not sure that it is desirable to strengthen the influence of a few individual economists by such a ceremonial and eye-catching recognition of achievements, perhaps of the distant past.

    I am therefore almost inclined to suggest that you require from your laureates an oath of humility, a sort of hippocratic oath, never to exceed in public pronouncements the limits of their competence.

    Or you ought at least, on confering the prize, remind the recipient of the sage counsel of one of the great men in our subject, Alfred Marshall, who wrote:

    “Students of social science, must fear popular approval: Evil is with them when all men speak well of them”.”

    http://nobelprize.org/nobel_prizes/economics/laureates/1974/hayek-speech.html

  104. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    11. March 2011 at 10:56

    Richard, this is not even a foul tip:

    ‘But nobody is proposing that the government deny you the right to have whatever medical care you want at your own expense.’

    Well, when Canada first started out on the road to socialist medicine (in 1946) no one was talking about denying anyone the right to purchase medical care either, but by the 80s that’s exactly what happened.

  105. Gravatar of Gabe Gabe
    11. March 2011 at 11:04

    “Full Employment Hawk,

    I like your comments about redistribution. It is amazing how the (rich) minority has been able to achieve the political result that the (not so rich) majority let this happen. How?”

    The richest use the power of governemn in order to set up barriers to entry and rules/laws that are favorabel to them. Making government more power only reinforces this cycle.

    Capture is the word. Both parties were for the wars, both parties support the Patriot act, both parties have worked together to double the size of government since Bush took office.

    Left vs Right is a false paradigm. People let the media frame the issues for them. Then the people vote on whether to be punched in the face with a left jab or a right hook.

  106. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 11:13

    “Both parties were for the wars”

    That is an oversimplification. A majority of the Democrats in the House voted against the Iraq

  107. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 11:23

    OOps, hit the return key by mistake. The final word “war” is missing.

    Nothing that the Republican conservatives in Congress now are doing will stop or reverse this upward redistribution. As a matter of fact, the cuts in programs that help the middle class and the poor that they are proposing, such as in the Pell grants, for example, while being unwilling to eliminate corporate welfare, such as the tax credits the oil companies are getting, will make the problem worse.

    The Republicans in Congress are definitely waking up everyday thinking “Let’s get some more wealth redistributed.”
    Redistributed upwards.

  108. Gravatar of Gabe Gabe
    11. March 2011 at 11:42

    I understand how QE3 will help the stock market, nominal GDP & unemployment.

    I have a hypothetical question though:

    Suppose Bernanke were to come out Monday and announce a QE3 with an additional $1 trillion in purchases of MBS, municipal bonds and treasury securities to be done between June 2011 and June 2012

    I wonder what you’d handicap the spread in returns over the following week to be for gold-silver vs Dow 30

  109. Gravatar of Gabe Gabe
    11. March 2011 at 11:45

    @”Full Employment Hawk”

    “Nothing that the Republican conservatives in Congress now are doing will stop or reverse this upward redistribution”

    I agree %100…not sure why you’d think I wouldn’t agree with that. When I say that the Democrat vs Republican charade is a false paradigm I mean it.

  110. Gravatar of Gabe Gabe
    11. March 2011 at 11:48

    As for the war…yes it is true that some of the lower ranking congressional democrats are occasionally anti-war….sometimes even when a democrat is in the executive branch. Kucinich etc.

  111. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    11. March 2011 at 12:22

    ‘It is amazing how the (rich) minority has been able to achieve the political result that the (not so rich) majority let this happen. How?’

    Putting aside that the incomes of the rich are not stolen from the poor, your question is answered by textbook Public Choice Economics, which you can read here:

    http://www.econlib.org/library/Buchanan/buchCv3.html

    In a nutshell, small, well-focused, special interest groups will have a cost/benefit advantage over the diffuse general interest in the political arena, which allows them to essentially buy political favors.

    Interestingly, Krugman has recently explicitly admitted he’s completely ignorant of this literature, and has no intention of remedying his condition. Pretty much as the title of this post of Scott’s has it.

  112. Gravatar of Gabe Gabe
    11. March 2011 at 12:45

    In a free-market dream world I agree that the rich don’t get incomes by stealing it from the poor or middle class/upper middle class.

    However, in a country that has morphed into a big government nightmare such as we are approaching, yes in some cases the wealth is directly taken from the lower 99.9% and given to the top .1%. For instance, when the Fed auctions off securities and then buys them back two weeks later…the primary dealers end up making billons/yr in various transaction costs and fees. Food and energy go up in price…robbing the bottom 99.9% to pay the top .1%

    When a government doubles SS tax, like when the bipartisian Greenspan comission did it…it makes the bottom 10% poorer(the bottom 10% is dead before age 65) and makes some of the rest richer.

    When a government imprisons 1 million people in the course of a drug war and forces the rest of the country to pay for it…it makes some prison contractors/DEA folks/lawyers/police and judges wealthier while robbing 90% of the country.

    When a governemnt chooses to lie to start multi-trillion dollar wars…yes some get richer at the expense of others.

  113. Gravatar of Rien Huizer Rien Huizer
    11. March 2011 at 13:42

    Full Employment Hawk, Patrick Sullivan, thanks for your comments on my garbled comment. Of course, textbook political economy explains thsi, but for someone who is not used to see texbook results materializing, this is still pretty odd and it prompts important questions about popular self-government. And then we have the independent central bank issue. I do not care too much about economic policy, for the simple reason that I believe that it is inherently difficult to influence macroeconomics for “the better” and that failed attempts are not costless either.

    However, the intersection of politics/governance and public economic management (taxation, monetary, regulation, welfare) is of crucial importance to the character of our society. Democracy and that sort of nonsense. Not many people would like to be without it but no one seems to care about its maintenance.

  114. Gravatar of Mark A. Sadowski Mark A. Sadowski
    11. March 2011 at 13:56

    Completely off topic.

    I have been crunching numbers (as usual) and I observed the following.

    The Eurozone’s diversity of labor market practicies gives the impression that Spain was far harder hit than Germany. From the standpoint of monetary policy it is better to focus on output. (The following figures are rounded to the nearest percent.)

    If one compares real GDP in 2009 versus trend growth from 1997-2007 one will find all the Eurozone-16 members were 6-10% below trend except Cyprus(5%), Finland(14%), Ireland (21%) Luxembourg(11%) and Malta (3%). Those nations account for little more than 3% of the Eurozone’s output. The difference between Spain and Germany’s performance by this measure is trivial (10% versus 7%) despite the fact that their unmeployment rates are starkly different (20% versus 7%).

    Do a similar comparison for the US and what you find is far greater dispersion in growth relative to trend. The following states were over 11% below trend: Arizona (16%), Florida (14%), Georgia (11%), Idaho (12%), Michigan (12%), and Nevada (18%). All told they account for roughly 15% of US GDP. The following states were less than 7% below trend: Alabama (7%), Alaska (-8%), Arkansas (4%), Colorado (6%), DC (3%), Hawaii (6%), Kansas (6%), Kentucky (5%), Louisiana (-2%), Maine (6%), Maryland (6%), Massachusetts (7%), Mississippi (3%), Montana (5%), Missouri (6%), Nebraska (5%), New Mexico (6%), North Dakota (-4%), Oklahoma (-8%), Pennsylvania (5%), South Dakota (0%), Vermont (6%), Virginia (7%), Washington (6%), West Virginia (-1%) and Wyoming (-12%). All told these states account for roughly 13% of US GDP.

    So states accounting for 28% of US GDP were outside of the 7-11% below trend range versus countries accounting for 3% of Eurozone-16 GDP that were outside the 6-10% range. More substantial statistical analysis of the relative degree of dispersion involving weighting shows similar results.

    Granted, there is greater labor mobility in the US, but this does raise the issue of which is really the better OCA, the US or the Eurozone. Despite the lack of awareness on this issue, there is actually a huge diversity in regional economic performance in the US.

    It also underscores the fact that despite all of Germany’s bravado they are not vastly outperforming the rest of the Eurozone. Kurzarbeit obscures the fact that in Germany, real GDP, exports, manufacturing, productivity etc. are still lower now than they were nearly three years ago. The ECB’s tight money policy is not only bad for the periphery it is bad for the core, and the proof lies in the fact that Iberia and Greece are not doing all that much worse than Germany and France, and the gap is far less than that between some large US states.

    It’s taken as gospel that the US is a better OCA than the Eurozone. But is this really true?

    I’ve posted this information on a few other Quasimonetarists sites in the vain hope someone (Marcus?) will run with the ball. It would make a nice contrarian post.

  115. Gravatar of Gabe Gabe
    11. March 2011 at 14:24

    It seems your initial reaction is that a wide range of performances is indicitavie of a worse OCA?

    I thought the wide diversity of outcomes should provide some good learning opportunities for the lagging states to mimic the growing states.

    Which states grow faster 0% income tax states or non-zero income tax states?

    Which states grow faster those with high paid state workers or low paid state workers?

    High sales tax? or low sales tax?

    Those with lots of private schools or few private schools?

    Not that we can know for sure given the unpredictability of complex societies…but the data should help provide for better experiments in the future in the 57 states…that is unless we centralize everything first.

  116. Gravatar of Mark A. Sadowski Mark A. Sadowski
    11. March 2011 at 14:32

    Gabe,
    You wrote:
    “It seems your initial reaction is that a wide range of performances is indicitavie of a worse OCA?”

    Diversity is great from the perspective of laboratory experiments in developing optimal public policy but not from an OCA perspective. OCA theory (see Mundell) quite naturally assumes that asymmetric responses to monetary shocks are bad.

    And it’s important to separate demand from supply (some people don’t even realize that there is a difference).

  117. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 16:11

    “I agree %100…not sure why you’d think I wouldn’t agree with that. When I say that the Democrat vs Republican charade is a false paradigm I mean it.”

    If the Democrats had had the votes last December they would not have renewed the Bush tax cuts for the rich. That would have been a step in reversing the upward redistribution. And if they had a majority in Congress now they would not be making the sharp cuts in programs that help the middle class and the poor, such as in education, community healthcare, etc. The effect on distribution would definitely have been different. There are major differences on these issues between the Democrats and the Republicans.

    The difference is to some degree obscured by the Blue Dog Democrats, who are actually moderate Republicans for whom there is no longer room in the small Republican tent.

  118. Gravatar of bertusmaximus bertusmaximus
    11. March 2011 at 16:52

    mark,

    interesting points about the diversity of growth from trend in the US vs EU states. read something about kurzarbeit the other day; germans seem in a rather confident mood:

    http://www.voxeu.org/index.php?q=node/6187

    concur that ECB about to tighten a big mistake and its seems that union wage negotiations are one of the main implicit ECB arguments. if anything, German wages should go up relative to peripheral countries.

  119. Gravatar of Mark A. Sadowski Mark A. Sadowski
    11. March 2011 at 17:29

    bertusmaximus,
    You wrote:
    “germans seem in a rather confident mood”

    My father always lectured me on the basis of two world wars in the space of 30 years that Germans were detached from reality. I never thought I would live to see his verdict confirmed yet again in such a short period of time.

  120. Gravatar of W. Peden W. Peden
    11. March 2011 at 17:38

    Full Employment Hawk,

    That’s a good point about the Blue Dog Democrats. I think that, unless a moderate Republican like Jon Huntsman or Mitch Daniels wins the Republican nomination in 2012, we might see a further drift of would-be moderate Republicans to the Democratic party. On the other hand, the Democrats will still be the party for most of those in the US who want a larger and more powerful state; I think it’s easier for a centre-right person to tolerate the Tea Party than it is for them to tolerate the social democrats and socialists within the Democratic party.

  121. Gravatar of Mark A. Sadowski Mark A. Sadowski
    11. March 2011 at 18:50

    I’ve been reflecting on the current state of monetary madness. Perhaps the British were right in a sense not to tether themselves to a monetary union dominated by the German inflationphobes.

    But the sad fact is the entire advanced world has done an equally bad job of things. Everybody is mindlessly focused on supply side shocks from commodities when NGDP targeting lectures that one should ignore such disturbances.

    Sigh.

  122. Gravatar of Mark A. Sadowski Mark A. Sadowski
    11. March 2011 at 18:56

    What happens when you have ZIRP intersect with Peak Oil? Is this the end of the world?

  123. Gravatar of Bernard Bernard
    11. March 2011 at 19:32

    i don’t want a more powerful state. i want a counter balance to the rich and powerful who run the state and federal government, who actually write the laws.

    you know rules and regulations that are ENFORCED!!. we already have enough rules and regulations, they are just not enforced any more. the Regulators have been bought off by the Companies aka Lobbyists.

    i do want some control and competition in the Business world, like before the Republicans sold out to Big Business and the Blue Dog Democrats(in name only) who wanted part of the loot Business started stealing from the Middle Class.

    and why oh why should we have a permanent prison class other than to subsidize Corporations and keep Class war going,i.e., to “divert” attention from the Theft by the Rich who use Laws/Congress to steal from the rest??

  124. Gravatar of Mark A. Sadowski Mark A. Sadowski
    11. March 2011 at 19:33

    And now a sad little soulful Slavic song for you folks (Dorogo Dlinnoyu):

    http://video.search.yahoo.com/search/video;_ylt=A0SO8ZyS5npNfAIAJQr7w8QF;_ylu=X3oDMTBncGdyMzQ0BHNlYwNzZWFyY2gEdnRpZAM-?p=those+were+the+days+russian&fr=yfp-t-701&ei=utf-8&fr2=sfp&n=21&tnr=21&y=Search

  125. Gravatar of Mark A. Sadowski Mark A. Sadowski
    11. March 2011 at 19:38

    Oops screwed up yet again. Must be because I’m a stupid Polack:

    http://www.youtube.com/watch?v=HO1UKbyPRHs&feature=player_embedded

  126. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 20:59

    “In a free-market dream world I agree that the rich don’t get incomes by stealing it from the poor or middle class/upper middle class.”

    But that is a dream world. Actual free market worlds do not function that way. During the guilded age in the later 19th century we had a largely free market and had exactly the kind of inequality that the country is now moving back to. So laissez faire is no answer.

    There is a real difference between the Republicans and the Democrats here. The Democrats, while far from perfect, are less likely to support policies that redistribute income and wealth upward than the Republicans. For example, the Bush administration tax cuts for the rich would not have happened under President Al Gore. The sharp cuts in programs that benefit working people and the poor now being proposed by the House Republicans would not be proposed if the Democrats had retained control of the House.

  127. Gravatar of Mark A. Sadowski Mark A. Sadowski
    11. March 2011 at 21:04

    The lyrics in Russian are quite different, but the meaning is somehow the same:

    “We rode out on a sleigh with little bells,
    And in the distance, bonfires shone.
    I’ll always feel a great longing for you,
    Breaking my heart with grief.

    Oh, the long road,
    The moon lit night,
    Your singing that sounded far and wide!
    The olden grief, and the seven-string guitar
    That so torments me in the night.

    So equally without joy, without sorrow,
    I’ll remember bygone years,
    And your silvery hands,
    And the sleigh flying along, forevermore.

    Oh, the long road,
    The moon lit night,
    Your singing that sounded far and wide!
    The olden grief, and the seven-string guitar
    That so torments me in the night.

    The days go by, multiplying my sorrows.
    It’s so difficult for me to remember the past.
    Somehow one day, my dear,
    You will carry me out to bury me.

    Oh, the long road,
    The moon lit night,
    Your singing that sounded far and wide!
    The olden grief, and the seven-string guitar
    That so torments me in the night.”

    To be Slavic and manage to get through each day with such a heavy soulful burden is indeed a minor miracle. :)

  128. Gravatar of Full Employment Hawk Full Employment Hawk
    11. March 2011 at 21:04

    “concur that ECB about to tighten a big mistake”

    Great Britain and Sweden showed excellent judgement in staying out of the Eurozone. The fact that their central banks can conduct independent monetary policies and their economies will not be crucified upon a cross of Euros is a great advantage. Unfortunately it looks like the Bank of England is going to fritter this advantage away.

  129. Gravatar of ssumner ssumner
    11. March 2011 at 22:06

    Everyone, I will be travelling a few more days–no time to answer comments. I’ll answer them next week when I return.

    Some new commenters will remain in the queue for a very long time—sorry.

  130. Gravatar of Lorenzo from Oz Lorenzo from Oz
    12. March 2011 at 01:37

    Full Employment Hawk: since the lower and middle income folk in the US are actually getting richer — at least in terms of household assets — in what sense is wealth being redistributed from them? Particularly given that US Federal Income tax is so wildly progressive (the bottom 50% of taxpayers pay a minor amount of total taxes). Or, to quote Wikipedia:

    In 2001 the top 1% earned 14.8% of all income and paid 34.4% of federal income taxes. The next 4% earned 12.7% and paid 20.8%. The next 5% earned 10.1% and paid 12.5%. The next 10% earned 14.8% and paid 14.8%, completing the highest quintile, which in total earned 52.4% of all income and paid 82.5% of federal income taxes. The fourth quintile earned 20.7% and paid 14.3%. The third quintile earned 14.2% and paid 5.2%. The second quintile earned 9.2% and paid 0.3%. The lowest quintile earned 4.2% and received a net 2.3% from the federal government in income “credits”.

    If your concern is increased inequality, I can nominate the following causes:
    (1) Immigration
    (2) High income men marrying high income women
    (3) Increased life cycle inequality (poor uni students being high-paid professionals later in life).
    I am not sure which, if any, of them one can or should attempt to stop.

  131. Gravatar of Lorenzo from Oz Lorenzo from Oz
    12. March 2011 at 01:56

    On political action, Warren Meyer of Coyote Blog has put the difference between the US liberal and libertarian outlooks very nicely:

    Liberals will argue that government power is neutral to positive, and that it is private action corrupting government, and this corruption can be avoided if private action is aggressively policed (including campaign spending limits, etc). Example: If Wall Street money could be taken out of politics then financial regulation would work.

    I argue that money in politics are a result of the stakes that we have put on the table — the more power we give to government to reallocate wealth, the more money will be spent to have such decisions made in one’s favor. In the age old question of whether a bribe is more the fault of the politician that demanded it or the private party that offered it, I would answer that the fault is with the system that gives the politician enough power to make such a bribe pay. And increasing the government’s power to limit private involvement in politics (e.g. via campaign spending limits) only makes the government power problem worse.

    Certainly, if one has active land rationing policies, for example, then that increases the resources which are put into “gaming” the system, as discussed here.

  132. Gravatar of Doc Merlin Doc Merlin
    12. March 2011 at 11:09

    @Lorenzo from Oz
    Complete agreement, and its nice to find someone else who reads Coyote blog.

  133. Gravatar of Full Employment Hawk Full Employment Hawk
    12. March 2011 at 17:30

    “since the lower and middle income folk in the US are actually getting richer — at least in terms of household assets — in what sense is wealth being redistributed from them?”

    Since the late 1970s there has been a major increase in the degree of inequaltity in the United States. For example, see the 3 charts in the Wikepedia article at:

    http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

    See also the chart on the the Top Ten Percent Income Share 1917-2008 at

    http://www.slate.com/id/2266025/entry/2266026

    This share was very high just before the Great Depression, but dropped sharply around WWII and remained low until the later 1970s. During this time the country enjoyed a regime of shared prosperity, which has now ended. This share has been rising steadily since then so that it is now about where it was before the Great Depression. So instead of shared prosperity the country is moving strongly toward a new guilded age.

    This is due to the fact that an inordinate part of the growth in output since then has been going to the people at the top.

    In the causes you nominate you ignore one of the main candidates explaining this:

    The deliberate manipulation of the political system by the people at the top to alter the laws for their benefit. This not only has to be brought to a halt, but the effects of it have to be reversed.

  134. Gravatar of Lorenzo from Oz Lorenzo from Oz
    12. March 2011 at 17:47

    Doc Merlin: I don’t read him as religiously as I used to — there is a certain element of “I agree and have nothing to add’ point being reached — but he is intelligent, knowledgeable and sensible.

    Full Employment Hawk: I should elaborate on my point on immigration. In the C19th, there were temperate and tropical zone labour flows. A vital interest of labour politics in North America and the Antipodes was to block tropical zone labour flows competing with them. But even within the temperate zone labour flows, a lot was fairly low skill. The effect of the mass immigration to the US was to increase skill differentials and put downward pressure on labour income (and upward pressure on capital income). Hence the inequality of the “Gilded Age”.

    There was a dramatic drop off in migration in the interwar period. After some lag, there was consequently downward pressure on capital income and upward pressure on labour income. In the postwar period, there was high productivity growth and immigration was largely from Europe, and the more educated and industrialised parts thereof. Capital growth more than compensated for labour growth, so there was upward pressure on labour incomes and downward pressure on capital incomes with little or no widening of skill differentials. Hence the “great equalising”.

    Then productivity growth died away, migration became much more “tropical zone”, women flooded into the workforce. There was downward pressure on labour income, widening skill differentials and upward pressure on capital income. Combine that with increased life cycle inequality (due to mass higher education) and high income women marrying high income men and you get flat labour income and increased inequality.

    Blaming it on changes in public policy? Not so much.

    So, another thing to disagree with Krugman on. Also, his take on the effect of Reagan is mistaken. There is little point in comparing him with the period of high productivity growth. There interesting comparison is with other developed democracies at the same time as his term in office. The “supply side” reforms that started under Carter led to the US pulling away from European countries in per capita income, after the post war decades of divergence.

    (And yes, I am aware of the claims that the net effect of migration is to increase per capita incomes. Maybe, but it does not increase specifically labour income, which is my point.)

  135. Gravatar of Lorenzo from Oz Lorenzo from Oz
    12. March 2011 at 17:50

    Damn, that should say “post war decades of convergence”

  136. Gravatar of StatsGuy StatsGuy
    12. March 2011 at 18:43

    Mark Sadowski – fascinating numbers. I’ve ignored this entire thread because I was hoping it would go away, and we’d see meaty new post soon. But now you’ve given me something to think about.

    Some further comments on your data:

    - Labor mobility is higher in the US, but there is no reason to suppose that this would automatically result in less dispersion. The theory behind labor mobility equalizing incomes is that “labor” will leave bad areas and go to good areas. Labor, of course, being this commoditized good.

    In fact, labor is highly specialized, and what we in fact would observe is concentration of certain specialties in areas with heavy existing industry-specific infrastructure (which could include suppliers and labor supply). Think silicon valley.

    So, skilled labor leaves Arizona, and goes to Colorodo. Does this mean wealth or growth is equalized? No, it means incomes may be equalized more effectively, but it also means that SECONDARY industry is actually WORSE off in Arizona.

    It sort of depends on whether you think the skilled labor that is migrating is merely taking advantage of an income opportunity, or is actually CREATING an income opportunity. In the latter model, sort of romer endogenous growth, you can have labor mobility actually augmenting income dispersion, and we’d get a core/periphery structure developing in the US.

    But then, some questions – shouldn’t growth follow wealth? And shouldn’t we be measuring based on total US income dispersion at the individual level, rather than at the state level? (Of course, what result then?)

  137. Gravatar of marcus nunes marcus nunes
    12. March 2011 at 19:22

    Mark
    I posted “something”. It may indicate that “theoretical OCA conditions” are not the “stuff that really matters”!
    http://thefaintofheart.wordpress.com/2011/03/12/what-makes-a-union-hold-together/

  138. Gravatar of Morgan Warstler Morgan Warstler
    13. March 2011 at 14:57

    statsguy, why did you want it to go away?

    I was actually glad Scott teed off on DeKrugman – if I were watching a debate round / political campaign where – earlier this year was when both sides of this little fishbowl were being very gracious to one another, noticing commonality etc. It isn’t sustainable.

    DeKrugman’s MO is not economics. He is no different than Michael Moore. If you’ve ever seen the clip where a skinny MM stands up and goes at Milton Friedman:

    http://www.youtube.com/watch?v=cD0dmRJ0oWg

    That’s the true logical depth of DeKrugman – now sure, there are graphs and numbers that he plots out and in a short enough horizon it’ll look like and taste like economics.

    But, if it is a science – then the promise is that overtime we are going to learn more of it – that we can rely on what we learn and carry it forward.

    And to my ear, it seems like there’s some real lessons we’re learning in the 21st century:

    1. Fiscal Stimulus (government spending) doesn’t work – at least where the efficiency of government is provably shitty.

    2. Monetary Stimulus can work. But it needs to automated – as free from political decision making as possible – or it fails just like Fiscal.

    And I think DeKrugman stands in the way of us learning that.

    ——-

    Mark, I think when I look at the US and think to myself, “We don’t want to be like Europe” – your numbers reflect that feeling.

    One expects far more dynamism – not just because of talent mobility; we come from cowboys, husksters, geniuses, and buffoons – we’re born from the renunciation royalty’s divine right, and since no one can kept from the top, we’re less willing to excuse those at the bottom.

    To me, those numbers are the argument for states rights.

    We look at them as a whole, we assume “we’re better than Europe” and thus when is crisis we should double down on the culture and attitude that got us this far.

  139. Gravatar of Full Employment Hawk Full Employment Hawk
    13. March 2011 at 15:45

    “1. Fiscal Stimulus (government spending) doesn’t work – at least where the efficiency of government is provably shitty.”

    When Obama took over the bottom was dropping out of the economy. Output was decreasing at a rate of 6%. By the Summer, output was growing again. Now there were other important things that happened during that time: The actions of the Fed and the TARP, so the turn around does not, by itself, prove that fiscal stimulus works. But a spectacular turn around like that cannot be used as proof that fiscal stimulus does not work.

    Obviously I agree that monetary policy works and agree that we need more expansionary monetary policy.

  140. Gravatar of Mark A. Sadowski Mark A. Sadowski
    13. March 2011 at 17:27

    I’ve been sleeping (it’s springbreak at Rowan).

    @Statsguy,
    This data has been consuming me. But you’re appproaching it in a somewhat different fashion than I am. You are focusing on the labor market aspect (income at a household level) and I am looking at OCA criteria (at a regional level). I’m not saying they aren’t related. In any case i think the conclusion stands. The US is not as good an OCA as the Eurozone.

    @Marcus,
    Thanks for responding with a post (please, others go and read it). It gives an incentive to commenters to dig up something meaty if bloggers are willing to explore the topic a little further.

    But my focus on this topic is somehwhat different from yours. I’m trying to emphasize how the dispersion of response to the 2008 “shock” is different between continents.

    It’s like a set of billiard balls. The European ones mostly sailed together in response to a que. The American balls all spread apart. The different reaponse is fascinating.

  141. Gravatar of Mark A. Sadowski Mark A. Sadowski
    13. March 2011 at 18:12

    Morgan,
    You wrote:
    “Mark, I think when I look at the US and think to myself, “We don’t want to be like Europe” – your numbers reflect that feeling.”

    That was not my intent (I was discussing thr OCA concept) but I certainly repect your attitude. I like the fact that we are more diverse (period). Perhaps that’s the whole point of being an American.

  142. Gravatar of StatsGuy StatsGuy
    13. March 2011 at 18:22

    @ Morgan –

    “And I think DeKrugman stands in the way of us learning that.”

    DeKrugman have helped/forced Scott to sharpen his arguments and think them through better. You can think someone is dead wrong, and still recognize their value.

    @ Mark

    “The US is not as good an OCA as the Eurozone.”

    You may be right, but the “goodness” of an OCA is measured by a criteria. Regional disparity and Individual disparity are two distinct, but valid, criteria. The general criteria I hear used is “appropriateness” of a monetary policy for economic circumstances (which is NEVER well defined, partly because they rely on inflation and employment and never NGDP trajectory), vs. transaction costs of multiple currencies. Of course, we never hear anything about financial issues, like the capability of a currency belonging to a wider block to become a reserve currency, and thereby increase an OCA’s purchasing power. The estimates I heard of the “gains” achieved by the EURO consolidation were on the order of 0.5% long term per year, after a rather largish one off cost. Little mention of reserve currency aspirations.

  143. Gravatar of Mark A. Sadowski Mark A. Sadowski
    13. March 2011 at 18:54

    Statsguy,
    I am skeptical and yet on the other hand perhaps strangely hopeful for the euro project. I think the costs to the Baltic States for their efforts at adopting the euro (being pegged) were tragic. I think Poland’s performance as a floating member of the EU has been an amazing counternote. But as bad as things have been there, the US has no grounds to pat itself on the back.

    As for “reserve currency” that is a trophy for which whomever attains the status will probably be grandly paying.

  144. Gravatar of W. Peden W. Peden
    14. March 2011 at 06:56

    Full Employment Hawk,

    The NGDP rate switched from 8.11% in Q4 2008 to 2.29% in Q3 2009 and 4.61% in Q4 2009. The increase in RGDP was only at 5.6% in Q4 2009 from -4% in Q4 2008, meaning that RGDP as a percentage of NGDP actually fell after the fiscal stimulus. I don’t see how one can argue that the fiscal stimulus raised output, except as a kind of bastardised monetary policy i.e. by providing a flawed mechanism for boosting the money supply and therefore NGDP.

    More importantly, when the growth of broad money slowed down and the fiscal stimulus was still ongoing, the economy went the way of the money supply. At best, one has to say that fiscal stimulus was a necessary but not sufficient condition for the recovery; the figures don’t actually imply that claim, but at least they’re not incompatible with it.

    The recovery of output in the second half of 2009 can only be seen as a monetary phenomenon rather than a case of governmnent spending boosting output, because the figures show just the opposite of the boosted RGDP-as-a-percentage-of-NGDP shift that one would expect if government spending was boosting output during that period.

  145. Gravatar of Benjamin Cole Benjamin Cole
    14. March 2011 at 12:43

    At this risk of sounding heartless, I would like Sumner to address how the disaster in Japan is actually a chance for the BoJ to engage in serious and sustained QE, and for Japan to break out of its perma-recession-deflation doldrums.

    Obviously, Priority One for Japan now is rebuilding, not inflation-fighting. If the BoJ doesn’t get it now, I advise all Japanese to migrate to America, where we can use your talents, and civility.

  146. Gravatar of Rien Huizer Rien Huizer
    14. March 2011 at 12:52

    Scott,

    Quite enjoyable to read all those interesting comments on labor economics while one expects just a set of macro comments. Did you engineer this? do geniuses require holidays?

  147. Gravatar of Mark A. Sadowski Mark A. Sadowski
    14. March 2011 at 19:22

    If Scott’s taking a vacation I’m not going to feel guilty about posting a music video occasionally. How about a little Ochi Chernye. (However, I should let you know, my eyes are on the jasne side.)

    http://www.youtube.com/watch?v=IME5Vw7e19Q&feature=player_embedded

  148. Gravatar of Mark A. Sadowski Mark A. Sadowski
    14. March 2011 at 19:36

    My point is that the Slavs have more soul than the whole rest of the European continent put together. (And we know how to dance too.)

  149. Gravatar of Scott Sumner Scott Sumner
    15. March 2011 at 07:04

    Mark, Econbrowser is more for a general audience than this site.

    Andrew G. Here’s what Krugman said;

    “Some have asked if there aren’t conservative sites I read regularly. Well, no.”

    Where’s the ambiguity in that statement? Isn’t it obvious he doesn’t think conservative sites are worth reading regularly? I really don’t see how I could be misinterpreting him.

    Brian, I agree,

    Smintheus, You said;

    “But then, I wouldn’t have anticipated that you could read a fairly straightforward post by Krugmann and misconstrue it so badly (not to say snidely).
    Krugman is not asserting what you say he asserts. His point is simply that right wing political and economic blogs do not consistently produce information or analysis of comparable quality to what left wing blogs do.”

    I always laugh when defenders of Krugman accuse someone else of being “snide.” In fact, I interpreted Krugman’s comment in exactly the way you describe above. So it’s not clear why you think I misinterpreted him.

    Both liberal and conservative blogs are riddled with errors. They are easy to find.

    The Tyler Cowen link claimed Tyler was the sort of conservative who has a double standard. I don’t know why that’s so hard to understand.

    Robert Hurley, You said;

    “I also think the doctrinaire right exposes their weakness with the vituperative attacks on him.”

    Let’s see, Krugman says conservatives aren’t worth reading, and that’s not a “vituperative attack.” And I claim Krugman is ignorant of what conservative blogs have to say (which is the implication of his admission) and that is a “vituperative attack.” The logic of Krugman’s defenders never ceases to amaze.

    redonkulus746, Yes, and lots of other conservatives are worth reading.

    e, That was pretty lame.

    Fred, Krugman said;

    “Some have asked if there aren’t conservative sites I read regularly. Well, no.”"Some have asked if there aren’t conservative sites I read regularly. Well, no.”

    Please explaining to me how Krugman wasn’t insulting conservative blogs. I’m very interested to hear your explanation.

    I have no problem with liberals liking Krugman’s blog–I like many of his posts. I don’t think my post was inaccurate–Krugman made those remarks, not me. If they weren’t true (and I agree with you that they may not be true) that doesn’t making them any less foolish and insulting. I really have trouble with Krugman defenders who can’t see that he is intentionally insulting conservatives.

    mbk, Thanks, but I wish there weren’t so many comments to respond to today.

    Thanks Full Employment Hawk.

    William, It’s already behind me the minute it’s posted.

    James Evans, You said;

    “Krugman is ignorant, but reading him sharpens your arguments?
    So what does that make you?”

    I’m beginning to wonder whether people know what the word “ignorant” means. You guys act like I called him stupid.

    Krugman is very much worth reading, despite being ignorant of conservative blogs.

    b–a, The second to the last sentence in the quote of Krugman in this post clearly refers to Cowen. Read the link, and then read his complaint about “a blog written by someone who chooses not to notice that asymmetry.” He said that right after linking to a column where he pointed out that Cowen chooses not to notice that asymmetry. It could not be any clearer. I’m amazed others don’t see that. But it’s irrelevant which conservative he has in mind, as he condemns them all. And he certainly does consider libertarians to be conservative–that’s obvious.

    Smintheus, I find your attempt to deny he is talking about economic blogs to be almost comical. Did you actually read what he wrote? Why do Krugman defenders insist on trying to make excuses for him? He wrote what he wrote. By the way, had he referred to political blogs only (as you claim) then his statement would be equally foolish.

    Rien Huizer, You said;

    “I do not really care what political persuasion people feel attracted to, but weren’t you a libertarian a short while ago? And calling a Nobel winner ignorant can only be attributed to a brief lapse, I would guess..
    Have a nice holiday though.”

    Yes, I consider myself a libertarian, but what matters is that Krugman considers me a conservative. And what does the Nobel Prize have to do with anything? I’d guess 90% of Nobel Prize winners are equally ignorant (as Krugman) of conservative blogs. Do you deny that?

    Stephen, Thanks for posting. I think you have to distinguish between what Krugman said he does and what he actually does. He said no conservative blog is worth reading “regularly”. That’s what I reacted to. If people tell me that he does in fact read conservative blogs regularly, I have no reason to disagree. But that doesn’t have any bearing on my criticism. I am primarily criticizing his speech, not his actions.

    Mark, You said;

    “Krugman’s right, Tyler Cowen’s a huge coward.”

    Hmmm, if we are going to call people “cowards” because they ignore evidence inconsistent with their views, then how would you describe Krugman?

    In my view Cowen is the least biased blogger in the blogosphere.

    Greg, I got lots of emails praising the post, one from a liberal blogger.

    Bonnie, Yes that hit piece on Friedman (right after he died) was far more insulting than anything I said about Krugman.

    Richard A, Yes, that’s an excellent post, (and a libertarian one.)

    More to come . . .

  150. Gravatar of Scott Sumner Scott Sumner
    15. March 2011 at 07:19

    Gabe, I don’t follow gold enough to comment. I’d guess both gold and stocks would rise, but I don’t know how much.

    Mark, Interesting, but I’ve got too much on my plate right now.

    Mark, I saw the German stock market was down 5% today. I wonder if they are still feeling as optimistic.

    Statsguy, You said:

    “DeKrugman have helped/forced Scott to sharpen his arguments and think them through better. You can think someone is dead wrong, and still recognize their value.”

    And vice versa?

    Benjamin, You said;

    “At this risk of sounding heartless, I would like Sumner to address how the disaster in Japan is actually a chance for the BoJ to engage in serious and sustained QE, and for Japan to break out of its perma-recession-deflation doldrums.”

    I’m not optimistic, the Kobe earthquake (1995) didn’t lead to reform.

    Rien. You asked:

    “do geniuses require holidays?”

    You’ll have to ask Krugman.

  151. Gravatar of Morgan Warstler Morgan Warstler
    15. March 2011 at 08:33

    “Actually I made a mistake. I meant to say QE 18.”

    “I think Mr. Bernanke doesn’t know much about the global economy but he probably watches the S&P every day,” he said.

    http://www.cnbc.com/id/42085935

  152. Gravatar of Glenn Glenn
    15. March 2011 at 09:14

    Whenever you come back you need to (need to!) comment on the DeLong lecture slides:
    http://delong.typepad.com/20110315-ias-107.pdf

    Krugman, Wiliamson and probably a few others have commented on them.

  153. Gravatar of StatsGuy StatsGuy
    15. March 2011 at 11:17

    ssumner:

    “And vice versa?”

    Yes, but never by name. He’s very good at sharpening, less as weaving. When you do win him over, he doesn’t attribute credit. He would be better with less snark and more courtesy, but you must remember – his blog is journalism. He gets paid for snark (probably based on hits), and he does cross into tastelessness at times.

    Yet he is correct in many things – recently, he called out Lucas for taking his theory too far. Probably true. Lucas got his hammer, and everything is a nail. (Krugman has his own hammer.) But with that, he summarily dismissed the value Lucas offers.

    I think a lot of Krugman is a reaction to 30 years of being kicked by egotistical “freshwater” folks who drove their imperfect theories to extremes that were unforeseen by more pragmatic earlier Chicago folks who were reacting to the extremes of keynesian planning/regulation from post WWII.

    It’s quite personal. I’ve seen the conceit of these folks first hand – some of them get off on laughing at others. Frankly, as their careers progressed, some of them became academic bullies. Sorry, it’s true, and you probably know which ones too. Outsiders see these fights as great philosophical debates. Perhaps, but it’s also quite personal and venal.

    Krugman is the smart kid who has been bullied for 20 years, and now he has the chance to stick their faces in the mud. He has no intention of fighting nicely, because the other side was far from chivalrous – and the policies implemented by the extremists on the right (like the GWB tax cuts and wars among other things) have been brutal.

    That doesn’t make DeKrugman right, even though they correctly point out how wrong the other side is.

    However, when Krugman called out the latest generation of Freshwater Economists (today) for clumsily “rediscovering demand”, he should have _explicitly_ said “except for Scott ‘NGDP’ Sumner”!

  154. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    15. March 2011 at 13:06

    Was Krugman bullied at MIT? When he won the John Bates Clark Medal? By Feldstein at the CEA? By Bill Gates and Michael Kinsley at Slate (where he wasn’t particularly nice, himself, to Brian Arthur)? If not, just when?

  155. Gravatar of Jason Jason
    15. March 2011 at 14:10

    Scott, you said: “Jason, If I understand you correctly you are claiming that the FS study showed that total employment nationwide rose because of fiscal stimulus. But it didn’t show that, it assumed that. So I’m afraid you are making the same error as Krugman. There really isn’t any defense of his post—it’s fallacy of composition 101.”

    I think you are technically correct, but I think the scenario you describe has a low probability. I re-read the paper a couple of times over a short vacation.

    First, it shows that the stimulus effects hold at county and then at state levels, so it is entirely possible that they fail at the national level and F&S do not explicitly show that. That implies however that anti-stimulus theories know where the fallacy of composition becomes important (between the state and national level), which I think is a counterintuitive claim that has a burden of proof requirement per Krugman.

    Second, at a more technical level, the R-squared coefficients they find for the correlation between the level of stimulus spending and the employment level change could given more/different data allow for all employment changes for stimulus >$0 sum to zero or a negative value, but that has a low probability (I calculate* it to be on the order of 15-35% at the state level and 25-30% at the county level given R-squared ~ 0.5 … basically a 1-sigma effect, which is all that F&S are claiming). Since 1-sigma effects can and do vanish all the time, you could be correct that this study shows nothing, but in that case it is not a fallacy of composition argument — it is a ordinary inconclusive study argument. The other possibility here is that more/different data could be far more non-linear (http://en.wikipedia.org/wiki/Correlation_and_dependence#Correlation_and_linearity) than they appear and so deriving a linear correlation coefficient and using that to project the macroeconomic effect makes a “fallacy of composition”. Non-linearity is not supported by the data, though. You would need many more counties to show a loss of jobs at all levels of stimulus than are in the data. Again, the burden of proof should fall on the claim of non-linearity.

    Basically, the F&S study shows that it is unlikely (but not impossible) that the county and state level employment gains do not add up to national level employment gains.

    So in a sense everyone is right; I’m not sure Krugman looked as closely as I have — he probably saw something that confirmed his held beliefs and went with it. You are correct that this is not a smoking gun and it is possible this study does not show what it purports to show. I think the best interpretation of your fallacy of composition argument data-wise is the potential for a non-linear response. That hypothesis is not ruled out but the signature does not appear in the data (it looks like ordinary Gaussian blobs, and adding more data consistent the R-squared at ~0.5 will lead to county level employment gains that total to national level employment gains).

    *I generated data with given correlation coefficients and tested the probability that summing up the result of all positive inputs led to a zero or negative total output assuming Gaussian distributed and linearly correlated data.

  156. Gravatar of Mark A. Sadowski Mark A. Sadowski
    15. March 2011 at 21:26

    Morgan,
    Isn’t QE18 sort of like Super Bowl XLV?

    If only we had a more efficient strategy for raising expectations, then maybe such a repeated application of an inefficient mechanism (the total absence of a target) wouldn’t be necessary.

  157. Gravatar of Mark A. Sadowski Mark A. Sadowski
    15. March 2011 at 21:32

    Patrick,
    You wrote:
    “Was Krugman bullied at MIT?”

    There was a time when I was bullied at Chicago. But after I bit their ears off and eat them with some fava beans and a nice chianti the other student pretty much left me alone.

  158. Gravatar of tk tk
    16. March 2011 at 06:46

    Have you ever met Krugman? The guy can’t handle normal day-to-day interactions, like producing the correct change at a cafeteria cash register. “Clueless about life” isn’t the half of it. The guy can’t escape the confines of his own skull.

  159. Gravatar of Full Employment Hawk Full Employment Hawk
    16. March 2011 at 13:37

    Scott:

    Since you are not part of what Krugman calls the “pain caucus” who oppose policies to bring the unemployment rate down, since you support strong monetary stimulus to bring it down, perhaps Krugman simply does not consider you to be among the conservative sites.

  160. Gravatar of Full Employment Hawk Full Employment Hawk
    16. March 2011 at 14:43

    At the time the New Classicals were at their peak they definitely bullied Keynesians. For example, in Lucas’ paper “After Keynesian Economics” he talks about people stopping paying attention and gigling when a Keynesian paper was presented at a professional meeting.

    The New Classicals were definitely arrogant, and one can understand the delight of Keynesians at their being brought down by economic developments.

  161. Gravatar of Scott Sumner Scott Sumner
    16. March 2011 at 16:36

    Morgan, I think QE3 is a real possibility, becoming more likely every day. Unfortunately QE3 is likely to be less effective than QE2.

    Glenn, Which slide did you want me to comment on?

    Statsguy, I learned a lot from Lucas, so if Krugman doesn’t think Lucas is worth paying attention to, then I think he’s making a big mistake. One of the primary causes of this crisis is that macroeconomists still haven’t incorporated rational expectations into their analysis.

    I’m not sure who these “bullies” are, but obviously not Lucas, who is an extremely nice guy. On the other hand Barro can be pretty sarcastic–perhaps that’s who you had in mind.

    Jason, You said;

    “First, it shows that the stimulus effects hold at county and then at state levels, so it is entirely possible that they fail at the national level and F&S do not explicitly show that. That implies however that anti-stimulus theories know where the fallacy of composition becomes important (between the state and national level), which I think is a counterintuitive claim that has a burden of proof requirement per Krugman.”

    All of the anti-fiscal stimulus theories that I am aware of (monetary offset, crowding out, loss of confidence, etc) predict some stimulus at all non-national levels.

    You said;

    “So in a sense everyone is right; I’m not sure Krugman looked as closely as I have — he probably saw something that confirmed his held beliefs and went with it. You are correct that this is not a smoking gun and it is possible this study does not show what it purports to show.”

    I’m not claiming that it is not a smoking gun, I’m claiming there is no gun at all. They aren’t even testing the hypothesis they think they are testing. Both pro and anti-fiscal theories predict regional effects. Hence finding regional effects shows absolutely nothing.

    Full Employment Hawk, Obviously he reads my site on occasion. But I am almost certain he considers me conservative. Indeed I vaguely recall him implying that in a post where he sympathized with my difficulty in getting fellow conservatives to support QE2.

  162. Gravatar of ssumner ssumner
    17. March 2011 at 10:46

    Full Employment Hawk, What “economic developments” have brought down the new classical model? Lucas said he thought Friedman and Schwartz’s explanation of the Great Depression was basically correct. Have recent events discredited that explanation? I’m genuinely puzzled.

    I’m not even sure what “New Classical” means. My hunch is that this has little to do with ideology, and a lot do do with technique. The profession (including new Keynesians) shifted to more technical models during the past few decades. Most of the economists at elite Ivy League schools are new Keynesians. My hunch is that Lucas meant people were laughing at old “mechanical” Keynesian models, not new Keynesian models. Maybe they still do.

    I don’t think anyone should be laughed at, but Keynesians have dominated the profession for decades, and nothing has changed recently in that regard.

    In any case lets not mix up New Classical and conservative. Almost all of the names of conservatives that I mentioned above are not New Clasical economists.

  163. Gravatar of anon anon
    18. March 2011 at 08:28

    In his latest post (discussing Mankiw & Weinzierl 2011), Krugman now states: “…I supported fiscal expansion in 2008-2009 precisely because I didn’t believe that the kind of commitment-based unorthodox monetary policy that works in the models could, in fact, be implemented in practice. Nothing I’ve seen since has changed my views on that subject.”

  164. Gravatar of ssumner ssumner
    18. March 2011 at 10:52

    anon, Yes, see my new post for a critique.

  165. Gravatar of Full Employment Hawk Full Employment Hawk
    19. March 2011 at 16:56

    “Have recent events discredited that explanation? I’m genuinely puzzled.”

    It’s too late for a detailed critique of New Classical Models in this post, but one of their main features is that all markets, including labor markets, continuously clear, so that all cyclical unemployment is voluntary. Recent events have shown how counterfactual this assumption is.

    Lucas’s monetary model of business cycles with Muth-rational expectations and continuously clearing models implies that, since business cycles are caused by changes in the money supply people are not aware of, once contempraneous data on the money supply became available, business cycles should have come to a halt.

  166. Gravatar of ssumner ssumner
    20. March 2011 at 05:00

    FEH, Lucas was well aware of the Great Depression, and in fact that even motivated his seach for a business cycle model. So I don’t see how recent events could have shown anything that wasn’t shown by the GD. We already knew that mass unemployment could exist for many years in a row–that’s no surprise. In fact, I am pretty sure that the specific version of New Classical economics that you cite was dropped years ago, even by Lucas. I haven’t seen it in the journals for decades.

    Recent events have not discredited any important business cycle model–I am quite sure of that.

  167. Gravatar of Full Employment Hawk Full Employment Hawk
    20. March 2011 at 07:53

    “Recent events have not discredited any important business cycle model–I am quite sure of that.”

    They have certainly discredited Real Business Cycle Theory. In fact the discredit any model that assumes that all markets are continuously clearing even when the economy is depressed.

    With respect to the Lucas model, I should have been more specific that this is with respect to Lucas’s original rational expectations, market clearing model, which he introduced in the 1970s. If this kind of model no longer appears in the journal, that proves my point.

  168. Gravatar of ssumner ssumner
    21. March 2011 at 07:57

    Full Employment Hawk, What have we learned from this crisis that was not also true of the Great Depression? I don’t think RBC people assume all markets clear. What about unions, occupational licensure, minimum wages, prices controls, etc.

  169. Gravatar of Full Employment Hawk Full Employment Hawk
    21. March 2011 at 14:58

    While Real Business Cycle theorist, and, for that matter all New Classical Economists, undoubtedly realize that such things as unions, etc. affect the functioning of markets, their DSGE models are based on the assumption that prices and wages are perfectly flexible and continuously clear. Once one adds sticky prices, wages, or even sticky expectations to DSGE models one is a New Keynesian.

  170. Gravatar of ssumner ssumner
    22. March 2011 at 07:43

    Full Employment Hawk, I thought the Cole and Ohanian model of the Great Depression was one of the most famous RBC models. And what about Casey Mulligan’s RBC argument that 99 UI and a 40% boost in the minimum wage raised unemployment in this recession?

  171. Gravatar of Full Employment Hawk Full Employment Hawk
    23. March 2011 at 07:19

    Touche’. I am not familiar with those particular models. Therefore I will withdraw from the debate.

  172. Gravatar of Potpourri Potpourri
    14. April 2011 at 08:55

    [...] Don’t get too mad at Scott; he writes post like this and all is [...]

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