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Chronicle of the Conspiracy
Join us as we discover, document, expose and challenge the bad people, the bad institutions and the bad ideas that stand in the way of wealth creation -- and show you how to fight back!
Saturday, September 13, 2003
BROOKS, ROUND TWO David Brooks' second New York Times column confirms that he's not going to be any threat to the liberal establishment on 43rd Street. He's not going to be a threat to anything or anybody, unless you're talking about threatening to bore them to death. This column is a bouncy little recitation of which American presidents went to which schools, and it's all interesting and important because, well... just why, again? Krugman's got to be having a good laugh today.Posted by Donald L. Luskin at 1:49 AM | link
Friday, September 12, 2003
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Anyway, here's an example.
"Ah. Here it is. Thanks to Sadly, No!, which points to a piece by Donald Luskin.
"Here Luskin can't make up his mind: Is it more important for Luskin to suck up to David Brooks and agree with him that 'Bush Lied' ('Brooks['s]... overriding theme is a version of the familiar "Bush Lied"... [but] I find the administration's communication style just as infuriating as [Brooks] does')?"
Considering DeLong's usual practice of cutting and pasting entire copyrighted works into his site without permission, it's remarkable that he would subject this excerpt from my blog posting to such an extensive manipulation and reduction. To construct what is apparently a single sentence of 24 words, he resorts to two ellipses and three bracketed substitutions -- a feat that would make Maureen Dowd blush.
What a lot of silliness just to create the illusion that I have contradicted myself -- and right next to a link that would allow anyone who cared to discover in a moment what I really said. But then that's about all DeLong can do, having appointed himself to the unenviable role of Paul Krugman's defender. Why would he have done that to himself? He's so vain -- he probably thought this Krugman column was about him.
Posted by Donald L. Luskin at 6:29 PM | link
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Indeed, Krugman's got his excuses all limbered up. Earlier this week he told Buzzflash: "...if it means that if I'm frozen out, if the Times finally decides I'm too hot to handle and fires me or whatever, that's no great loss." The metaphors are mixed, but I agree with the sentiment.
And... with Krugman on a media-tour binge, I haven't been covering his regular Times columns in a while. Here's a triple helping (here, here, and here) from Tom Maguire on today's column, posted to Tom's spiffy new Just One Minute blog.
Posted by Donald L. Luskin at 5:07 PM | link
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Krugman's lying at the top of his lungs about the supposed lies of the Bush administration as he tools around the country on a whirlwind media tour to promote his new book, The Great Unraveling. Take a listen to this Krugman interview Wednesday with Terry Gross on National Public Radio's "Fresh Air." First, you'll be struck by how Krugman is a perfect audio dead ringer for Woody Allen -- the vocal resemblance is nothing short of eerie. But once your over that, you'll be outraged at how Gross -- normally a well prepared and aggressive interviewer, at least when she's interviewing the pop musicians and chick-flick directors she seems to specialize in -- rolls over and plays dead when America's most dangerous liberal pundit lies about lies.
Krugman's first lie about lying is an all-too-familiar Krugman sound-byte. In his New York Times column Tuesday, he wrote "Mr. Bush and his officials portrayed the invasion of Iraq as an urgent response to an imminent threat," and he told Terry Gross,
"...if he says...that some country is an imminent threat when in fact the evidence points the other way, people in the journalistic profession are very, very reluctant to say, 'Hey, he's lying.'"
Perhaps they are "very, very reluctant" because of the fact that President Bush said exactly the opposite. In his state of the union address this year, Bush was at pains to disclose that the Iraq threat was not imminent, but that a controversial pre-emptive strike was nevertheless justified. Bush said,
"Some have said we must not act until the threat is imminent. Since when have terrorists and tyrants announced their intentions, politely putting us on notice before they strike?"
Gross didn't correct him. Krugman's second lie about lying is that the Bush administration claimed the bulk of this year's tax cuts would go to lower income taxpayers. Krugman told Gross,
"The Bushies are different. They just plain lie. They just plain say, 'Here's our tax cut; it goes mostly to the working class.' And then you actually take a look at the numbers and it's not subjective. You just say, oh, 42 percent of it goes to the top 1 percent of the population."
Let's just accept that 42% figure, whether or not it's right. What's important is that Krugman is lying when he claims that the Bush administration ever said anything to indicate that its tax cuts would go "mostly to the working class." Yes, the administration said that "every American who pays income taxes will get tax relief." Yes, the administration said that "the percentage reduction in income taxes is greatest for families with incomes under $50,000," and that therefore higher-income taxpayers "will pay a larger share of the total income tax burden." And those statements are absolutely factual -- as Krugman would say, "it's not subjective."
Gross let it go. Krugman's third lie about lying is that the Bush administration is suppressing the dire truth about America's long-term fiscal condition. Krugman told Gross,
"Actually, we know they've done the math. If you look at the last budget put out by the Bush administration, tucked way in the back -- you have to go through several hundred pages to find it -- was an analysis of the long-run budget outlook. And it was catastrophic."
As Krugman so often points out, the gravest threats to long-term fiscal solvency are Social Security and Medicare in the upcoming baby boom retirement years. And in the President's most recent budget, there is a terrifyingly frank discussion of these threats right up in the main section of the budget, on page 32, in fact. You only "have to go through several hundred pages to find it" if you start from the back. This discussion, headlined "The Real Fiscal Danger," shows charts documenting unfunded Social Security and Medicare promises stretching out 75 years into the future, and running as high as $24.8 trillion dollars! Yes, they've "done the math."
Now go check out the last budget put out by the Clinton administration. Social Security and Medicare promises were no less then. But I defy you to find anything like the frank discussion of the value of those promises anywhere in the main section of the budget.
Gross let him get away with it. Krugman's fourth lie about lying is that Bush promised to be a compassionate conservative, but the real agenda of his administration is, as he told Gross,
"...to dismantle most of the federal system as it's been built up since the 1930s. They talk about the New Deal and the Great Society, basically the work of Franklin Roosevelt and Lyndon Johnson, as being illegitimate. And they talk about starving the beast. We've got to deprive the government of revenue so that it's forced to give up these programs. ...If you look at what candidate Bush ran on in the year 2000, it was, 'I'm going to protect Social Security, I'm going to add prescription drugs to Medicare, I'm going to be compassionate.'"
So what about those campaign promises has the Bush administration not honored? It has put in place a courageous initiative to fundamentally redesign Social Security, precisely because he is cognizant of its long-term costs (which he frankly acknowledges in the budget, but that Clinton concealed). And the president has said clearly that he would sign just about any Medicare prescription drug program that Congress can agree on.
And for better or worse, the truth is that the Bush administration has presided over an historic increase in federal spending. As the Congressional Budget Office has documented, increases in federal spending have contributed about the same amount to today's budget increases as have Bush's tax cuts. Indeed, plenty of Republicans such as National Review's Jonah Goldberg are worrying that Bush is a "big-government conservative."
Gross let him get away with that one, too. It started out well, though... Gross started the interview by challenging Krugman on the distinction in his mind between "something that you see as not a disagreement, but as a lie." Krugman was not able to illuminate the distinction. So Gross asked,
"...but, still, what kind of, like, editorial oversight do you have before you can go with the word 'lie' in a column?"
You won't be surprised by Krugman's reply -- except that he suggests he had more oversight in days of deposed executive editor Howell Raines, the man who unleashed Jayson Blair upon an unsuspecting world:
"During the 2000 campaign, the then-editor of the editorial page, Howell Raines, basically told me I could not use that word. I could imply it by indirection, I could say it, but that it was just too harsh, too partisan a word to use in the middle of a campaign. ...After that, I really haven't had any restraints."
Indeed. Not at the New York Times, and not at NPR. At least there's always me.
Posted by Donald L. Luskin at 2:10 PM | link
Thursday, September 11, 2003
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Posted by Donald L. Luskin at 1:19 AM | link
Wednesday, September 10, 2003
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With so many millions of Americans investing in mutual funds, regulators and
dozens of state attorneys general aren't going to be able to resist the
political bonanza of a full-scale investigation of potential abuses in the fund
industry. They're going to find that the fund industry is, indeed, chock full of
abuses. Not big abuses, but lots and lots of tiny little abuses that have
accumulated gradually over the years, and all for what seemed like perfectly
good reasons at the time.
Let me give you a couple of examples. But first, let's look at what this scandal
is all about. The key abuse was that a hedge fund was allowed to buy and sell
shares of several mutual funds after the stock market had already closed and the
value of the fund shares were set -- and other shareholders were no longer able
to make such transactions. That harmed ordinary fund shareholders in two ways.
First, say some very bullish market-moving event happened after the close, and
it was a cinch that the market would open higher tomorrow. The hedge fund could
buy fund shares at prices set before the news came out, and sell higher the next
day. Other shareholders in the fund would have their gains reduced because the
hedge fund would have taken some of them.
Second, the hedge fund was allowed to make these and other frequent transactions
without fully compensating the fund for all of the trading costs involved.
That's like getting all the fund's normal shareholders to pick up the tab for
the hedge fund's commissions.
It's all about one shareholder getting special treatment at the expense of all
the other guys. Well, various benign and not-so-benign versions of this happen
all the time in just about every mutual fund.
Consider the matter of trading costs. There's no escaping the fact that any fund
shareholders who frequently trade fund shares impose asymmetrical costs on
shareholders who simply buy and hold, even when the frequent trading isn't
otherwise abusive. A handful of funds charge transaction costs to approximately
correct this. But most just impose informal limits on the frequency of trading,
without levying any actual charges. The informality and inadequacy of these
limits, their poor disclosure to fund shareholders, and the lack of rigor with
which they're applied could be fertile ground for claims of abuse.
Consider what happens when a shareholder pays for shares by check. Typically
he'll become effectively invested the day his check arrives in the mail. But the
fund doesn't get any actual cash until the check clears. In the meantime, the
shareholder who paid by check has gotten what amounts to an interest-free loan
from the fund. And what happens if the check never clears? Typically the share
transaction is simply cancelled -- if the market has moved lower and there's a
loss, the fund eats it. Again, fertile ground for claims of abuse.
And how about being able to trade fund shares after the close? Most people don't
realize that it's actually quite common. It is standard operating procedure in
much of the 401(k) and "mutual-fund marketplace" businesses. In both cases,
administrators require normal shareholders to have their orders in by the market
close. But of necessity, the administrator can transmit those orders to the
mutual funds only after the close. In fact, in the case of 401(k) plans, the
administrator often requires that a fund's net asset value for the day be
provided by the fund before the order can be placed -- necessitating a delay of
several hours.
Are there abuses of trading after the close in 401(k) plans or mutual-fund
marketplaces? Probably not much, if any -- but it's an under-regulated part of
the system and overzealous investigators will realize the potential is there and
maybe find something.
And here's another one. It's a well-kept secret of the mutual-fund industry that
daily fund net asset values don't accurately reflect the true value of the
fund's holdings. Because of the necessity to provide the NAV within hours of the
market close, most funds calculate NAVs using today's prices applied against
yesterday's portfolio holdings. This creates another opportunity for effectively
trading after the close for investors who have inside information about fund
holdings, as apparently was the case with the hedge fund involved in the
scandal.
If an investigation ends up characterizing these longstanding and widespread
micro-abuses as crimes, the price to the industry could be a lot higher than
just a stiff fine paid to Eliot Spitzer, or even the endless plaintiff
litigation that would no doubt follow. For one thing, there would be massive
reputation damage to the fund industry that would set it back decades. And that
would spill over into a distrust of the market overall.
But here's the worst-case nuclear-winter scenario that I'm sure fund-industry
executives are talking about secretly right now -- and hoping that no one will
mention in public. Well, here goes.
The whole mutual-fund industry is based on a tax exemption -- and that exemption
could be put at risk in a widespread investigation. You don't think much about
it, because if you hold a mutual fund outside an IRA or 401(k), you're paying
taxes every year on its dividends and capital gains (unless it invests entirely
in municipal bonds, of course). But the fund itself is tax exempt. Unlike other
corporations -- and a corporation is what a mutual fund actually is -- a mutual
fund itself does not pay taxes.
To earn the exemption, a fund must comply with applicable provisions of the
Internal Revenue Code. The critical provision here is that all fund
shareholders must be treated completely equally. The whole point of this week's
scandal is that certain funds have apparently not been doing that. If the
Internal Revenue Service so chose, it could yank the funds' exemptions --
and it could do the same for any fund found to be treating its shareholders
unequally in any future investigation.
A mutual fund that loses its tax exemption is, effectively, sentenced to death.
Investors would desert funds in droves, and choose instead to hold individual
stocks. Why be taxed twice when you can just be taxed once?
But it gets worse. What if the IRS were to rule that a fund had been treating
investors unequally for a long period -- and seek back taxes and penalties?
Technically the fund itself would be liable, and it might be a liability that
could more than wipe out all the fund's assets. Think about the case of a
fallen-angel technology fund that racked up big profits in the late 1990s, but
now is only a fraction of its former size? The taxes and penalties could be
larger than all the assets currently in the fund.
As a practical matter, the fund itself would probably not end up paying the back
taxes and penalties. Any mutual-fund company that wanted to stay in the business
would no doubt decide to step up to the plate and pay. But the bill could run to
billions, and could deal a blow to some fund companies from which it would take
years to recover.
How likely is that worst-case scenario? Not very. But I bring it up to make sure
you know even the remote risks that are lurking out there.
And I have another reason, too. In a world that sometimes seems full of
corporate crooks, our first impulse is to shout "hang 'em high" and applaud the
regulators and the states attorneys general as they all rush in to prosecute at
the same time. But a little of that goes a long way. What starts out as
enforcement can easily turn into a lynch mob.
So now, as the prosecutorial posse goes after the mutual-fund outlaws, be
careful before you cheer them on. Watch carefully to see if the abuses they
uncover are substantive -- and whether it costs more to fix them than it did to
live with them. And let's all take care that we don't pay the highest price of
all: blundering in with guns blazing, and inadvertently destroying the industry
that has done a better job than any other to bring ordinary people into the
investor class.
Posted by Donald L. Luskin at 9:40 AM | link
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Employing two key elements from Krugman's own style-book -- the bald-faced lie and the presumptuous initial adverb -- Cassidy writes of Krugman, "Certainly his twice-weekly column has been distinguished by diligent research..." My goodness, how things have changed since 1998 when Krugman had written a scathing critique in Slate about a Cassidy New Yorker piece, accusing Cassidy of reporting as fact "pure fiction" and calling his article "an object lesson in journalistic gullibility." Cassidy responded in a way that suggests that he -- certainly! -- doubted the diligence of Krugman's research. Cassidy on Krugman, circa 1998:
"...his logic is more addled than usual.
"...I wrote no such thing...
"...defamatory..."
"...remarkably cavalier..."
"...malicious hogwash."
Cassidy's response concludes with a fabulous gotcha -- a quote from one of Krugman's books in which Krugman asserts the very thing that he called "pure fiction" when Cassidy wrote it. Read it -- it's worthy of the Krugman Truth Squad. But that was when Bill Clinton was president and liberals could afford to fight among one another.
Nowadays, under the Bush administration, Krugman is Cassidy's best friend -- and uncredited stringer. Just four months ago Cassidy injudiciously plagiarized in The New Yorker's May 12 "Talk of the Town" column Krugman's most outrageous economic lie. You know the one, the infamous and thoroughly debunked whopper from Krugman's April 22 New York Times column claiming that Bush's economic plan contemplated $550 thousand dollars of tax cuts for each $40 thousand job it hoped to create (ignoring that the $550 thousand is spread over ten years, while the $40 thousand is a single year's salary which would, itself, generate offsetting tax revenues). For Cassidy to have thought so highly of this malicious hogwash that he would fraudulently claim it as his own is certainly an object lesson in journalistic gullibility. I don't recall that Krugman complained.
And now Cassidy devotes the first 1,601 words of his review to an adoring Krugman hagiography and an impassioned recitation of all Krugman's major talking points. Then, grudgingly, comes a single 124-word "on the other hand" paragraph (you know, fair and balanced and all that), noting that The Great Unraveling "is more of a prosecutor's brief than a history book" in that it mostly overlooks factors beyond the Bush administration.
Then it's on to a quick 786-word review of economist Joseph Stiglitz's new book, The Roaring Nineties -- another doom-and-gloomer from publisher W. W. Norton (by the way, this one they sent me a review copy of -- but still no copy of Krugman's book). And when Cassidy's gotten all the reviewing out of the way, he launches into 641 words of pure economic-world-according-to-Cassidy. Except that it's all really the economic world according to Krugman. For example, Cassidy writes,
"In an economic downturn, when taxpayers get laid off and social expenditures rise, deficit spending can actually be helpful... Deficits are dangerous when they are used to finance unproductive schemes (such as tax cuts for the rich), and when there’s no end in sight... The Bush deficit satisfies all the requirements for a dangerous deficit. It is big and wasteful, and isn’t even an efficient way of stimulating the economy, since the wealthy tend to hoard their tax savings rather than spend them. Moreover, the deficit won’t disappear even when the economy is growing steadily."
Compare this to what Krugman told Tim Russert Saturday in an interview on CNBC:
"You provide money to lower income and working--working-class families who are likely to spend it. And what you don't do is you don't mortgage the future... What Bush did was to use the recession as an opportunity to push long-term tax cuts mainly for people with very high incomes who are not likely to spend very much of the money while at the same time refusing to do all of the things that you usually do during a recession... The budget deficit is going to stay above $400 billion for the rest of this decade and then it's going to get bigger as the baby boomers start to retire."
This is the first major review of Krugman's book, and I expect it will turn out to be fairly typical. Krugman's column has long served as a source of talking points for the economics writers in the liberal media -- and it's those same usual suspects who are going to be pressed into reviewing the book. So the congratulate Krugman will be, for them, to congratulate themselves on their good taste in sources. Certainly they will find the opportunity irresistible.
Posted by Donald L. Luskin at 12:41 AM | link
Tuesday, September 09, 2003
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Be sure to read the last paragraph.
Update... Robert Musil of the Man Without Qualities blog writes, "I wonder if there's a comparable memo from the Chairman of the MIT econ dept?""TO: Brad Smith
"Sr. Vice President, Microsoft Legal & Corporate Affairs
"FROM: Cyrus Krohn
"Publisher, Slate Magazine
"RE: Non-Compete Clause & Contractual Interference
"Dear Brad:
"...A prominent East Coast newspaper, The New York Times, has been poaching from Slate, taking key writers and editors invaluable to our evolving franchise. Several years ago I viewed these departures as testament to Slate's reputation within our industry. Being recognized by the media establishment as a breeding ground of top journalists was rewarding. But no longer do I hold these egress offenders in such high regard.
"...In my seven years with Slate, I've seen the Times make off with no fewer than five Slatesters. And just last week, they tried to hire away our esteemed editor-in-chief, Jacob Weisberg, according to this item in the New York Post."...Our staff are bound by the non-compete clause they signed upon employment, and I was wondering if you could spare some time for Slate now that the DOJ case is behind us? This tortuous [sic] contractual interference is beginning to have adverse effects on us.
"It's improbable we'll be able to recoup our losses. But just in case, we'd like all of them back except for Paul Krugman.
"...Respectfully,
"Cyrus"
Posted by Donald L. Luskin at 12:50 PM | link
Monday, September 08, 2003
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Here's the first paragraph:
"The Bush administration has the most infuriating way of changing its mind. The leading Bushies almost never admit serious mistakes. They never acknowledge that they are listening to their critics. They never even admit they are shifting course. They don these facial expressions suggesting calm omniscience while down below their legs are doing the fox trot in six different directions."
Yes, it has "on the other hand" material that Krugman would never include. In that sense, you could read it as generally flattering to President Bush's evolving Iraq strategy, noting Bush's ability to constructively adapt to difficult challenges. But in the context of the column, the flattering parts are essentially by way of irony -- they are used to set up the dichotomy between the "Bushies" good accomplishments and its bad lies.
I'm not passing judgment about whether Brooks is right or wrong. If anything, I find the administration's communication style just as infuriating as he does. But if we're talking about the New York Times edit page and whether it's achieved any ideological diversity by hiring Brooks, well, the answer is clearly no. It's just a cleverly disguised way of putting out the same old party line: Bushies are crooks.
Update... Bruce Bartlett writes, "I think you got plagiarized. Here's what The Note said about the Brooks column: 'The first paragraph of David Brooks' first New York Times column had us thinking the Times substituted a Paul Krugman column as a malicious joke.'"
Posted by Donald L. Luskin at 11:21 PM | link
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But other than that inexplicable omission, America's most dangerous liberal pundit is in full book-promo mode. He's dropped his teaching duties at Princeton for the quarter. His personal website lists 14 speaking engagements around the country, with more to come (a helpful reader suggested that coconut cream pie works the best for such occasions). And the inevitable media interviews are already starting, kicking off with a whole hour Saturday with Tim Russert on CNBC.
For the next month or so, it's going to be all Krugman all the time. It's going to be painful to have to listen to it -- over and over and over again -- all the trademark Krugman talking points we've all come to know and hate so well. Bush lied. Maximum deficits for minimum stimulus. Bush is Hitler. Rolling back the New Deal. Bush lied. The media is conservatively biased. Tax cuts for the rich. Did I mention that Bush lied?
I've been getting pretty depressed at the prospect. About the only good I could see coming of it was that maybe Krugman would crowd out Al Franken. But when I saw the interview with Russert, I stopped worrying. Now I'm hoping that this 15 minutes of fame for Paul Krugman is going to be his undoing. Because in situations where he's separated from the prestige and credibility of his New York Times column -- and when people can talk back -- Krugman will no longer seem the Great and Powerful Oz. He'll stand revealed as nothing more than that man behind the curtain.
The nervous, stammering, shifty-eyed, twitching, ill-tailored, gray homunculus slumping across the table from Tim Russert Saturday night was simply not recognizable as the titan who strikes fear in the hearts of conservatives everywhere each Tuesday and Friday morning. He had all the talking points, but they seemed to be coming from someone else's mouth. It was as though, through some terrible casting mix-up, the part of Paul Krugman was being played by Woody Allen.
Ideas that would have been devastating if presented in that fabulously self-assured Krugman style on the pages of the "newspaper of record" came off, at best, like run-of-the-mill talk-show chatter. Speaking only for himself -- not costumed in the institutional persona of the New York Times -- and knowing that a smart interlocutor might question sources, detect contradictions, or ask tough follow-ups, empowering self-assurance was replaced by crippling self-consciousness. The least bad parts, of course, were when Krugman was able to stick close to the familiar ground of his prepared talking points. But in those moments when Russert asked some tough questions and forced Krugman to improvise, the wheels really came off.
And I'm delighted to report that, as you will see, my Krugman Truth Squad columns for National Review Online had a key role to play in the wheel-removal process. In fact, I think we may have to make Russert an honorary member.
The first challenge from Russert came a quarter way thought the interview, when he asked Krugman how he pleaded to the charge of being "America's most dangerous liberal columnist." Sound familiar? Krugman stuck to the media-training playbook reasonably well: he stammered out a good-humored guilty plea, and got back to his talking points right away. You guessed it: Bush lied.
Russert saved the toughest challenge for the final segment of the hour-long interview -- an old interviewer's trick that relies on the subject being then both at ease and exhausted. Coming out of the commercial, after doing the obligatory flash of the book jacket for the camera (operators are standing by), Russert opened with,
"RUSSERT: The National Review Online has the Krugman Truth Squad.
"KRUGMAN: Yeah.
"RUSSERT: They monitor every word you write. And they will pick apart every column, and say 'He no longer is just an economist. He's an ideologue, and he just is trying to twist facts in order to prove a political point.'"
Cut away from a close-up of a scowling Russert, making a gesture of "twisting" with his left hand. A shot of Krugman now, from over Russert's shoulder -- the camera slowly zooms closer as the question sinks in and Krugman's body language goes from "okay, we're in the home stretch... I think I did pretty well on this thing" to "oh shit." It's a Mike Wallace "60 Minutes" moment.
Here's the best Krugman could come up with.
"KRUGMAN: They would say that, wouldn't they? Um, no, I mean it's, it's, [sigh] I'm subject to a level of scrutiny I don't think anyone else in, in journalism is. Um [long pause], I think that given, given that I'm writing 100 columns a year, uh, the number of things they've actually been able to make stick is pretty small. So it's, I think I'm doing okay. It's, it's not fun. It's more, part of the reason why few, not very many people do the kind of thing I'm doing. If you take on our current leadership, um [deep breath], you will be pursued, you will be stalked. So far, so far just stalked, uh, intellectually, but it's, it's pretty scary sometimes."
Let's really savor this. Coming out of a awesomely long pause like you just never see on television, one that probably had some guys in the CNBC control room really twitching, Krugman says "I think that given, given that I'm writing 100 columns a year, uh, the number of things they've actually been able to make stick is pretty small."
What a mind-bogglingly inept defense. It's not a defense at all -- it's a confession! He is confessing that he lies -- but, he has an excuse: he had to write 100 columns a year! He was too busy to tell the truth!
Was he too busy to tell the truth even about the number of columns he writes in a year? In the last twelve months he's written 93 columns, not 100. But surely -- he would say -- picky, picky, picky -- he was just speaking in round figures! After all, as he once wrote, "For God's sake: whatever you think of my politics, I am a competent economist, and know how to use numbers."
That's what he wrote on his personal website after the Krugman Truth Squad outed his outrageous error-cum-lie about President Bush's tax cuts -- the one he pulled in April claiming that each $500,000 in tax cuts would only produce one $40,000 job (neglecting to mention that the $500,000 would be spread over 10 years and the $40,000 was for a single year, and that the $40,000 itself would generate offsetting tax revenues). It would apply just a ineptly to any of the other fast-and-loose statistics scams that Krugman has pulled, such as when he wrote in early August that real per capita state spending in California had grown by only 10%, when the Krugman Truth Squad exposed that the very source he himself cited had it at 13.4%. Or how about when Krugman wrote in mid-August that American soldiers in Iraq were only getting two 1.5-liter bottles of water per day, and were suffering "heat casualties"? I exposed here the fact that this was only the soldiers' bottled water -- and that there was ample water from other sources which, in fact, was part of the Army's "forced hydration" program.
Were these, I wonder, examples of "things they've actually been able to make stick"? I've yet to see anything but lame self-defenses on Krugman's website after the dozens upon dozens of lies, errors distortions and misquotations the Krugman Truth Squad has documented -- and I've never seen a retraction or correction in the Times for any of them. But then again, we're dealing here with a "competent economist" who told Russert that the "number" of such things was "pretty small."
Russert then followed up with a specific reference to the Krugman Truth Squad column of August 25:
"RUSSERT: There was one interesting analysis where they said, 'Well, Krugman writes that things in California are a disaster, they're just awful, and then later writes another column about Arnold Schwarzenegger saying, "You know, Arnold, things really aren't all that bad."'"
Yep. In his August 1 Times column, Krugman had written "the Golden State is degenerating into a banana republic." He said it was in "a severe fiscal crisis" and undergoing a "slide into irresponsibility." But now Krugman tells Russert,
"KRUGMAN: Um, I don't think I ever said things were a disaster... The problem is that the budget [pause, labial sound] developed a big hole, um, mostly because the California tax system relies heavily on income taxes which meant it was getting a lot of money from stock options and Silicon Valley, which went away... Um, and, you know, actually, they're, the truth is they're not coping with it all that badly... Next year's deficit is 8 billion dollars, which is nasty but, but manageable... But you don't want to, you don't want to overstate it."
When that was done, Russert started in on Krugman's involvement as a paid consultant to Enron -- and at that point, Krugman probably wished that Woody Allen really were playing him. And then the credits rolled, and it was over. And Krugman got to take his microphone off and pull the little rubbery disposable earphone out of his ear and go back to his hotel room and mutter about how terrible it is to be "stalked, uh, intellectually," and tell himself that his book will probably sell pretty well anyway, despite the conservatively biased media. Hey, "It's pretty scary sometimes.
Posted by Donald L. Luskin at 5:26 AM | link