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Media Infiltrations: Of Interventions and Conservative Principles  National Review Online September 23, 2008 Quit Doling Out That Bad-Economy Line The Washington Post September 14, 2008
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The Conspiracy Letters
Join the fray! Email us at letters@poorandstupid.com. We reserve the right to publish all letters with authors' names, unless specified as not for publication or for publication anonymously. Letters may be edited for clarity and brevity.
Friday, June 27, 2003
THE ANALOGY IS WRONG Re: "Life on Planet Krugman" National Review Online, 6/27/03" -- If you analogize Republicans as Bama fans, and Democrats as Auburn fans, you have it backwards! The Republicans -- being the party of economic growth, intellectual depth, and entrepreneurial spirit -- would be more accurately compared to Auburn folks. Analogously, the Democrats -- being the party of venom, classism, intellectual shallowness, and vacuous power hunger -- would best be allied with Bama fans.Lindsay Osbon
1995 AU Grad
Posted by Donald L. Luskin at 11:05 AM | link
Tuesday, June 24, 2003
GAMBLIN' MAN VERSUS LYIN' MAN Doubting the authenticity of American democracy is the last refuge of a lame argument. Paul Krugman ends today’s New York Times column with the following line: “Yet if we can't find people willing to take the risk — to face the truth and act on it — what will happen to our democracy?” This is not the first time that Krugman has suggested the America’s democracy is tenuous. The following ended his April 29 column: “And we are a democracy — aren’t we?”And there is plenty of lameness in today’s column. There are, of course, the broad pronouncements that Krugman employs in an attempt to hoodwink readers into thinking that there exists consensus in what he believes: “There is no longer any serious doubt that Bush administration officials deceived us into war.” Perhaps there is no serious doubt in the hallowed halls of Princeton, but some of us out here in flyover country are a bit more skeptical.
There is also Krugman’s penchant for repeating inaccuracies: “In particular, there was never any evidence linking Saddam Hussein to Al Qaeda; yet administration officials repeatedly suggested the existence of a link.” Actually, there is evidence linking al Qaeda to Saddam, including the capture of Iraqi Ambassador Farouk Hijazi who has reportedly admitted to meeting with Osama bin Laden in the 1990s, and the recent capture in Baghdad of associates of al Qaeda leader Abu Musab al-Zarqawi. Apparently Krugman thinks if he repeats this falsehood often enough it will be true.
And there is Krugman’s rather odd perceptions that aren’t supported by the slightest modicum of research: “And yet the political and media establishment is in denial, finding excuses for the administration's efforts to mislead both Congress and the public.” A simple Google search using the terms “weapons of mass destruction” and “not found,” an the clicking the “Search for news…” option yields 20 pages of results from a wide array of media. Indeed, Krugman’s perception doesn’t seem to be supported by his own column: “Thanks to reporting by my colleague Nicholas Kristof, other reports in The New York Times and The Washington Post, and a magisterial article by John Judis and Spencer Ackerman in The New Republic, we now know that top officials, including Mr. Bush, sought to convey an impression about the Iraqi threat that was not supported by actual intelligence reports.” Perhaps it depends on what the definition of “denial” is.
(Sidenote: About that recent piece in The New Republic by John B. Judis and Spencer Ackerman. For a solid rebuttal of it, see this recent article by Stephen Hayes in the Weekly Standard.)
Krugman, it seems, is fast approaching Chomsky-land. He believes tenuous arguments are set-in-stone truth. He makes statements that aren’t supported by even the slightest bit of research—sometimes even contradicted by other remarks in the same column. And when events don’t happen as he thinks they should, he doubts that we really live in a democratic society.
Considering the New York Times current credibility problems, I have to wonder how much longer the powers-that-be at the Grey Lady will permit Krugman’s drivel to appear on the op-ed page. Since I’m a gambling man, I’d like to extend Don Luskin a little wager. I’ll bet $100 that Krugman will be gone in a year’s time.
David Hogberg
Cornfield Commentary
Posted by Donald L. Luskin at 7:53 PM | link
Monday, June 23, 2003
MR. IVY LEAGUE From Paul Krugman's 2/27/00 New York Times column:"So do you believe that 70 years from now the Dow companies -- not the companies that will be in the Dow then, but the companies that are in it right now -- will capture the same share of corporate profits that they do today? The investors bidding up the Nasdaq, not to mention those buying into I.P.O.'s, clearly don't. They believe that whatsit.com has a good chance of being tomorrow's Microsoft, and correspondingly that today's General Electric -- or even today's Microsoft -- may be tomorrow's Sears, Roebuck. To be a serious Dow bull, you must believe that the new economy will belong to old companies; to justify the price of tech stocks, you must believe that the future belongs to the upstarts. Both beliefs can't be right."How this guy is employed at Princeton, I do not know. It does illustrate how static his thinking is. What clearly the market showed in 2000 was that there was an application for the new economy on the old economy (that is why everyone had a dotcom then) AND that as the new economy matured, new companies would become the industrial average. Now all one has to do is go back and look at the transition of the agrarian economy to the industrial to realize that elements of that old farmer economy still impacts our economy today (commodities, anyone?) and that the then new industrial upstarts would become the average measure of economic growth. This is basic, isn't it? Am I, lowly product of small private college program, just too dumb to understand Mr. Ivy League?
Jim Cox
Posted by Donald L. Luskin at 11:21 PM | link
DON'T YOU LOVE IT WHEN ECONOMISTS FIGHT? Paul Krugman's intellectual insecurity is on display yet again on his website, as he chides Ben Stein for disputing Krugman's statement (in a column eulogizing James Tobin back in March of last year) that Milton Friedman's monetarism was a "rather naïve...doctrine" that "has not stood the test of time."
Krugman crows, "But guess who now concedes the point?"
Clicking on that link gets us to Brad DeLong's website where we can go to a report from Financial Times journalist Simon London, who had recently dined with Milton Friedman. And (surprise, surprise) there is no such concession from Friedman. Here's the relevant part:
"'The use of quantity of money as a target has not been a success,' concedes the grand old man of conservative economics. 'I'm not sure I would as of today push it as hard as I once did.' Granted, this is hardly a conversion of Damascene significance."Even the reporter pooh-poohs Friedman's remarks' importance. And later in his report again: "His mild recantation on monetary targeting." I guess Krugman missed those, because in the piece on his website he lays it on:
"By the way: Friedman did two great things: the permanent income theory of consumption, and the natural rate hypothesis. These do not make him a figure on a level with Keynes, who transformed the way we see the world, and may have saved the market economy. But they're pretty important.Contrast that with this paper from Krugman's friend Brad DeLong, titled The Triumph of Monetarism?, in which the much better informed UC Berkeley economic historian tells us that The New Keynesian research program is based on five propositions:
"Monetarism, on the other hand, was a misguided doctrine. Friedman was looking for a magic way to exclude judgement and discretion from economic policy; he didn't find it. And my own work on the liquidity trap has convinced me that his biggest case for monetarism - the attribution of the Great Depression to monetary contraction - was a huge misinterpretation. Yes, M2 contracted - but it's far from clear that the Fed was in control of M2."
- "The frictions that prevent rapid and instantaneous price adjustment to nominal shocks are the key cause of business-cycle fluctuations in employment and output.
- "Under normal circumstances, monetary policy is a more potent and useful tool for stabilization than is fiscal policy.
- "Business cycle fluctuations in production are best analyzed from a starting point that sees them as fluctuations around the sustainable long-run trend (rather than as declines below some level of potential output).
- "The right way to analyze macroeconomic policy is to consider the implications for the economy of a policy rule, not to analyze each one- or two-year episode in isolation as requiring a unique and idiosyncratic policy response.
- "Any sound approach to stabilization policy must recognize the limits of stabilization policy--the long lags and low multipliers associated with fiscal policy; the long and variable lags and uncertain magnitude of the effects of monetary policy."
"All five of the planks of the New Keynesian research program listed above had much of their development inside the twentieth-century monetarist tradition, and all are associated with the name of Milton Friedman. It is hard to find prominent Keynesian analysts in the 1950s, 1960s, or early 1970s who gave these five planks as much prominence in their work as Milton Friedman did in his.Which doesn't exactly fit with Krugman's "rather naive...doctrine" that "has not stood the test of time." Also that bit about Friedman not being in the same league with Keynes... well Robert Skidelsky, Keynes' biographer, disagrees:
"The importance of analyzing policy in an explicit, stochastic context and the limits on stabilization policy that result comes from Friedman (1953a). The importance of thinking not just about what policy would be best in response to this particular shock but what policy rule would be best in general--and would be robust to economists' errors in understanding the structure of the economy and policy makers' errors in implementing policy--comes from Friedman (1960). The proposition that the most policy can aim for is stabilization rather than gap-closing was the principal message of Friedman (1968). We recognize the power of monetary policy as a result of the lines of research that developed from Friedman and Schwartz (1963) and Friedman and Meiselman (1963). And a large chunk of the way that New Keynesians think about aggregate supply saw its development in Friedman's discussions of the "missing equation" in Gordon (1974).
"Thus a look back at the intellectual battle lines between 'Keynesians' and 'Monetarists' in the 1960s cannot help but be followed by the recognition that perhaps New Keynesian economics is misnamed. We may not all be Keynesians now, but the influence of Monetarism on how we all think about macroeconomics today has been deep, pervasive, and subtle."
"...I think the three great economists of this century were Keynes, Hayek, and Friedman. I'm not sure exactly how I'd rank them..."And, would anyone be surprised to hear that Krugman doesn't think Hayek is of any importance at all as an economist?
Patrick R. Sullivan
Posted by Donald L. Luskin at 11:10 PM | link