Krugman Smackdown!
(Plus: The Jayson Awards . . . Enter now!)


Donald L. Luskin

It’s a catfight on West 43rd Street! Former New York Times “public editor” Daniel Okrent is clawing out the eyes of America’s most dangerous liberal pundit, Paul Krugman. The fur is flying as Okrent cites case after case of Krugman’s inaccuracy and partisan bias in all manner of economic statistics. Check it out on the New York Times website, unless you have a particular aversion to cruelty to animals.

In this fight, you, dear reader, can be the winner — by participating in the Krugman Truth Squad’s first-ever Jayson Awards — named after Jayson Blair, the Times reporter who admitted to a pattern of fraudulent and plagiarized stories — established to recognize Paul Krugman’s most outrageous statements in six categories. More on that in a moment. But first, about that catfight . . .

It all started ten days ago. As I reported Tuesday, Okrent wrote in his farewell column that “Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers.” Next, in a lecture in Princeton last Friday, Krugman called Okrent’s comment a “peculiar blast,” saying he had caved to “constant pressure” from conservatives that had “built up a list of grievances in his mind.” Then on Sunday, the Times published a letter from Krugman lashing Okrent for not citing specific examples and proclaiming, “I played entirely fair with my readers, using the standard data in the standard way.”

Now, in postings Tuesday to the Times’ web-log for new “public editor” Barney Calame, Okrent unloaded on Krugman with both barrels. Krugman wanted examples? Okrent has examples. Lots of examples. Employment statistics. Social Security benefits. Federal deficits. Taxes. To readers of the Krugman Truth Squad column, none of Okrent’s examples of Krugman’s sleaze economics will be new. They aren’t even close to the most damning ones he could have used, and Okrent’s a little over his head on some of the technical details. But trust me, you’ll still take delight in the fact that Okrent is up off his knees at last –finally acting like a real “public editor,” and very aggressively calling Krugman’s spade a spade.

And you’ll also take delight in watching Krugman squirm to defend himself. Okrent charges that Krugman misused employment figures from the Bureau of Labor Statistics to make the economy under George W. Bush look worse, ignoring BLS research cautioning about difficulties in comparing those figures across time. Apparently this Princeton economics professor can’t be bothered to know the things that an expert like him is supposed to know. He lamely harumphed,

I don’t go hunting for research papers suggesting possible problems with the numbers unless the BLS says there’s reason to be concerned otherwise, it would be impossible to get any work done.

I took particular delight in Okrent’s candid portrayal of how difficult it has been to get Krugman to ever admit error. After 18 months and 40,000 words of e-mail correspondence with Okrent, in which I pointed out dozens upon dozens of substantive factual errors and distortions, only one published correction resulted — and that one wasn’t even labeled a correction (Krugman now claims, “I forgot”). Here’s Okrent:

I learned early on in this job that Prof. Krugman would likely be more willing to contribute to the Frist for President campaign than to acknowledge the possibility of error. When he says he agreed ‘reluctantly’ to one correction, he gives new meaning to the word ‘reluctantly’; I can’t come up with an adverb sufficient to encompass his general attitude toward substantive criticism.

Okrent also explained why he had always let Krugman off so easy:

I laid off for so long because I also believe that columnists are entitled by their mandate to engage in the unfair use of statistics, the misleading representation of opposing positions, and the conscious withholding of contrary data. But because they’re entitled doesn’t mean I or you have to like it, or think it’s good for the newspaper.

Now, about the Jayson Awards. I’ll offer six lucky readers their choice of any piece of Krugman Truth Squad logoed merchandise from our online catalog for coming up with the best-ever, most-outrageous Krugman statements within the following six categories:

1. Shaping, Slicing, and Selectively Citing Numbers. An old favorite is the notorious “divide by ten” incident. In an April 22, 2003, column, Krugman claimed that the Bush tax cuts, designed in part to increase employment, would cost $500,000 for each $40,000 job created. He neglected to mention that the $500,000 would be spread over ten years, and thus can’t be fairly compared to a $40,000 annual salary. Krugman was so humiliated when I pointed this out that he wrote no fewer than eleven increasingly loony and desperate rationalizations — ten spread over eight postings on his personal site (one, two, three, four, five, six, seven and eight) and the eleventh in a special column in the Times.

2. Biggest Howler (Political). It’s going to be hard to beat this one from his January 29, 2002, column:

I predict that in the years ahead Enron, not Sept. 11, will come to be seen as the greater turning point in U.S. society.

3. Biggest Howler (Economics). There are so many. Here’s a recent one, from his Times column last Friday. Keynesians will be shocked to hear their most prominent acolyte reduce the theory of the business cycle to this:

. . . the Fed’s ability to manage the economy mainly comes from its ability to create booms and busts in the housing market.

4. Worst Prediction. Market tops? Krugman’s a bull. Bottoms? Always a bear. But I like his prediction of an “inflation time bomb” back in 1982 when he was working for the Reagan administration, just when inflation had peaked and was destined to head lower for more than two decades.

5. Funniest Inadvertent Confession. How about the time Krugman debated Bill O’Reilly on Tim Russert’s show, and got so flustered that he said,

Compare me … compare me, uh, with anyone else, and I think you’ll see that my forecasting record is not great.

6. N. Gregory Mankiw Award for Excellence in “Just Making Stuff Up.” My favorite is when Krugman claimed in his August 10, 2004, column that

When Friday’s dismal job report was released, traders in the Chicago [bond trading] pit began chanting, “Kerry, Kerry.”

A tape of CNBC’s coverage of trading that morning — which Krugman cited as his source — revealed that no such chanting took place. Krugman just made it up. Dan Okrent acquired a copy of the tape at my suggestion to see for himself, but back then — when there was still an election for John Kerry to win, perhaps? — Okrent decided not to pursue it.

Want to nominate an outrageous Krugmanism for a Jayson Award? For a head start, visit the “Unofficial Paul Krugman Archive,” an online shrine maintained by a Krugman acolyte known only as “Bobby,” where every word Krugman has ever written is lovingly archived and dangerously searchable — all for free (and worth every penny). Just e-mail your nominations to me at [email protected], with the word “Jayson” in the subject line. I’ll pick the winners and announce them next week.

The envelope please . . .

– Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm. He welcomes your visit to his blog and your comments at [email protected].


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