Google+
Close
Krugman Fires Back
. . . and misses again.


Text  


Donald L. Luskin

Score one for the Krugman Truth Squad! After we nailed him for the multiple egregious economic errors (i.e., lies) in his New York Times column last Tuesday, Paul Krugman has been forced to respond. He’s squirming — but good!

Advertisement
Don’t worry — I didn’t lose my 100-to-1 bet that the Times would never correct Krugman’s errors (i.e., lies). Krugman did it himself on his personal website — the site Truth Squad senior member Andrew Sullivan calls the place “where he admits to errors in order to avoid fessing up to them in the Times itself.”

Check it out. You’ll see that there’s not a lot of fessing up involved. Twisting himself into an econometric pretzel, Krugman ends up doing little more than repeat the errors (i.e., lies) — but louder.

As I first uncovered on my blog, The Conspiracy to Keep You Poor and Stupid, the essence of the errors (i.e., lies) rests in that he claimed the President Bush tax plan would cost an enormous $500,000 per each of the 1.4 million new jobs that it created — and each one of those jobs would yield a paltry $40,000 wage. On face value, that made the Bush tax cut look pretty foolish. But among Krugman’s other errors (i.e., lies), he should have divided the $500,000 by ten — because that would be the cost over ten years. Otherwise, he can’t compare that number to an annual wage of $40,000.

Since that erroneous math, Krugman wrote on his blog that he’s

gotten a fair bit of mail over the way I compared the annual cost of employing an average worker with the 10-year cost of the latest Bush tax cut. Some of the mail was in good faith, so here’s the explanation.

I can imagine the “fair bit of mail.” A flaming e-mail from Times executive editor Howell Raines is more like it — probably demanding an explanation for those scurrilous claims being made by the far-right nuts at National Review Online!

No, I didn’t forget to divide by 10. (For God’s sake: whatever you think of my politics, I am a competent economist, and know how to use numbers.) What I foolishly assumed readers would know — this isn’t condescension, I really was foolish — is that no serious economist thinks that a tax cut or spending increase will have any effect on employment more than a couple of years from now.

What follows is a hilariously complicated theory involving the role of the Federal Reserve and various other abstruse elements, leading to the conclusion that the 1.4 million jobs created in the first two years of the Bush plan are all the jobs there will ever be. It’s full of intellectual bullying (” . . . Nobody, and I mean nobody, who knows any economics thinks . . . “) and completely fabricated claims (“The Fed, by the way . . . thinks that a good recovery is just around the corner, and that it will soon be raising interest rates . . . “).

If all that rigmarole had been included in the original column, Krugman’s simple, flat-out, drop-dead claim that the Bush plan would cost a whopping $500,000 to produce a meager $40,000 in wages would have come off like the brittle, over-specified, forecast-dependent econobabble that it is. Or as Krugman (condescendingly) puts it:

So why didn’t I explain all this in Tuesday’s op-ed? Partly I fell prey to the occupational hazard of the professional economist writing for a general audience: I forgot that the ordinary intelligent citizen isn’t necessarily familiar with the background material. (I’m in the same position when reading, say, about art or physics.) After 3 years writing for the Times, I usually have a good sense of what my audience doesn’t know, but sometimes I forget.

Except for just one thing. The theory he offers doesn’t actually explain his errors (i.e., lies). Even under his theory, he still has to divide by ten.

Krugman’s theory asserts that there would be no more jobs beyond the 1.4 million created in the first two years of the Bush plan (I don’t agree with that, but let’s stipulate it). While there would be no more jobs, he never asserts that those initial 1.4 million jobs will vanish at any time over the then years of the plan. They will be there generating $40,000 wages each year for ten years. So we still have to divide the ten-year cost of the tax cut by ten, because those jobs will be around for ten years.

Krugman’s original claim about the cost per job of the tax cut was an error (i.e., lie). And his response to being caught erring (i.e., lying) was only to err (i.e., lie) again.

Now a bold prediction. We won’t hear anything about this matter for a seemly period — Krugman will wait for memories to fade. But at some point not too far in the future, Krugman will make the same $40,000-to-$500,000 error (i.e., lie) again in the pages of America’s “newspaper of record.” Bet on it. I’ll lay you 100-to-1.



Text  


Sign up for free NRO e-mails today:

Subscribe to National Review