At least 13 people out of 1249 respondents thought Krugman was one of the top five (12 for first-place votes, and a 13th for a second-place vote). At most, 64 people voted for him (all fifth-place votes). At least 36 were similarly minded to vote for Lenin, of all people, as at least the fifth greatest. Mao apparently didn't make it. I guess you can still kill 20 million people and be called an economist, but not 70 million (the literal use, as you once told me, of economics as a "weapon"). Perhaps someone can use econometrics to calculate that in-between point?

The essential thing to understand here about Krugman is that he is a Keynesian. And as Mises observed, “The essence of Keynesianism is its complete failure to conceive the role that saving and capital accumulation play in the improvement of economic conditions.” This failure is present in Krugman’s hostility to economic inequality.

Krugman and all other enemies of economic inequality conceive of wealth and income strictly in terms of consumers’ goods. As they see matters, a wealthier, higher-income individual simply has more goods and services that he personally can enjoy than does the average person. This view is reflected in the typical depiction of capitalists as fat men, whose plates are overflowing with superfluous food, while struggling wage earners starve. The alleged solution is to take from the surplus of the capitalists and make good the deficiency of the wage earners.

The truth, which real economists, from Adam Smith to Mises, have elaborated, is that in a market economy, the wealth of the rich—of the capitalists—is overwhelmingly invested in means of production, that is, in factories, machinery and equipment, farms, mines, stores, and the like. This wealth, this capital, produces the goods which the average person buys, and as more of it is accumulated and raises the productivity of labor higher and higher, brings about a progressively larger and ever more improved supply of goods for the average person to buy.

True enough, as far as it goes. But Reisman gives Krugman entirely too much credit. Krugman does not believe what he believes about this because he is a Keynesian. Krugman believes what he believes because twice a week he has to come up with some story-hook to demonize the Republican party -- and this time around it's that their political power is funded by an "oligarchy." Notice that Krugman doesn't include MoveOn.org on his list of those who receive backing by oligarchs, when clearly that and other similar Democratic front organizations exist almost entirely by the grace of George Soros and other ultra-rich liberals. For Krugman the problem here isn't oligarchs, it's the way certain oligarchs spend their money politically (other oligarchs and other political causes are okay). I'm trying to visualize the oligarchs in the Native American community who enabled Jack Abramoff, but somehow I can't quite put them in the same class as George Soros who enabled MoveOn.org -- yet Krugman doesn't find this worthy of mention as "a threat to 'democratic society.'"

In the interest of accuracy, the Prospect asked Dwight Morris, the professional analyst who did the original research for our article, to take another look at the data. His conclusion is that the 9 percent figure -- an overall average which was based on our reading of his numbers -- can't be validated statistically; indeed, he thinks it's statistically invalid to do any before-and-after comparisons in this fashion.

Now, how can the New York Times possibly not correct Paul Krugman's citation of the Prospect's invalid statistics?

Update... An incomprehensible response by email from Joe Conason.

Instead of substituting your own false characterization, why not direct your readers to The American Prospect, so they can read what Dwight Morris -- upon whose analysis you have relied -- says now about your so-called math scandal?

Given that Mr. Krugman cited only one factor in classifying tribal donations -- whether they occurred before or after the tribe hired Mr. Abramoff -- I don't think his statement constitutes a factual error. Is it unfair? Yes. But the fairness of columnists is beyond the mandate of the public editor.

But now I have new information on this case, based on another conversation with Dwight Morris of Dwight Morris and Associates, the consultant who produced the study for the Prospect. It turns out that Morris' data -- from which the Prospect derived the 9 percent number -- does not, in fact, differentiate between contributions based on "whether they occurred before or after the tribe hired Mr. Abramoff." Instead, the data differentiate based only on whether the contribution was made while Ambramoff was retained, or while he wasn't. Contributions made at times when Abramoff wasn't retained, therefore, include periods both before he was retained and after he was fired.

So the Prospect's claim that "the donations of Abramoff’s tribal clients to Democrats dropped by nine percent after they hired him" and Krugman's version that "the tribes’ donations to Democrats fell by 9 percent after they hired Mr. Abramoff" -- my emphasis in both cases -- are more than "unfair." They are just outright not factual. The data simply does not support a before-and-after comparison. Thanks to Pat Curley of Brainster's Blog, who has doggedly insisted that I pursue this additional angle to the story.

The consequence of this new understanding of the data is that my original estimate -- that Abramoff's tribes' contributions per year to Democrats approximately doubled after he was retained -- surely errs on the low side. If you remove from my calculations the contributions per year made after Abramoff was fired, the percentage increase after he was hired can only be even greater.

This new information has been provided to Mr. Calame. It is inconceivable that he would not pursue a correction now. Uhhh... is the Prospect going to run a correction, too?

As an aside, I note that Mr. Morris is quite upset with me about my post from Friday, in which I quote him confirming the Prospect's error with respect to failing to treat the contributions per year. He doesn't say I misquoted him, and he doesn't take back his judgment that failure to think per year is an error. I think he's primarily upset by the post's headline, which I think he feels implies that he rejects the entirety of the Prospect article. Also, I think Morris is fed up being at the center of a battle between partisans on this -- I don't blame him.

Posted by Donald L. Luskin at 1:24 PM | link    

Sunday, February 26, 2006