To the Editor of the New York Times:
Paul Krugman accuses me in his January 25, 2002, column of calling the economic downturn the “Clinton-Levitt recession.” This is completely untrue.
I have never used such a phrase, nor written any columns about it. Nor have I ever blamed Arthur Levitt for the recession. In fact, on a nightly basis, as co-host of CNBC’s “America Now,” I have repeatedly endorsed Levitt’s proposal to prevent accounting firms from auditing and consulting for the same company. Indeed, the massive Enron scandal was in no small part caused because Levitt’s regulatory proposal to separate the accounting and consulting functions was blocked by leading House and Senate members. I have maintained this view both in print and on the air, contrary to Mr. Krugman’s ludicrous attack on me.
What’s more, unlike Mr. Krugman, I have been completely forthcoming with respect to my brief consulting role with Enron and the fees I received for this consulting. Also, I was never formally a member of Enron’s outside advisory board. All this is detailed in my National Review Online column dated January 22, 2002.
From time to time I have blamed former President Clinton’s high tax policies as a recession-causing factor, along with OPEC’s energy-price shock. But I have attributed 75% of the recession blame to the deflationary policies of Fed chairman Alan Greenspan. Ironically, one of my earliest comments on this was in a New York Times op-ed piece dated Friday, March 10, 2000.
Also, it is worth noting that while I disagree 99% of the time with Mr. Krugman’s hopelessly liberal Keynesian views, on the air I actually praised his recent column about Enron’s ethical and financial abuses. It is quite true, however, that Mr. Krugman’s unwillingness to disclose his Enron fees have come under attack from liberal and conservative pundits. In that spirit, his false criticism of me harkens back to the old adage that “misery loves company.” Unfortunately, any factual review of my own work shows clearly that I must part company with Paul Krugman.
Kudlow & Co., LLC