August 12, 2003

Downward Spiral

Kevin Drum's jaw drops in amazement that National Review can't find anyone smarter than Donald Luskin to write for it:

CalPundit: Watching the Watchman: Poor old Donald Luskin... Paul Krugman... said that California's spending growth between 1989-90 and 2002-03 was 10% after adjusting for inflation and population growth. Luskin says that's not true: Krugman's source actually pegs the growth at 13.4%... rounding off to 10% isn't that big a deal... swept away by the excitement of finally finding a genuine inaccuracy in one of Krugman's columns, Luskin pulls a full frontal Dowd by demanding that the New York Times publish a retraction [of]... Krugman's flatly deceptive claim that this growth "was simply a matter of keeping up with the population and inflation"... Would Paul Krugman "flatly" claim that California's spending growth was a simple matter of keeping up with population and inflation? Of course not. Here's what Krugman said: "As analysts at the nonpartisan California Budget Project point out, real state spending per capita was only 10 percent higher in 2002-03 than it was in 1989-90 -- that is, most of the spending growth was simply a matter of keeping up with the population and inflation."... So why did Luskin decide to leave out the word "most"?... Answers are left as exercises for the reader.... UPDATE: Weirder and weirder. Luskin emails Glenn Reynolds to say that of course he understood exactly what Krugman was saying, but many other people were confused and Krugman ought to write more clearly.... But if he understood what Krugman was saying, why did he write the paragraph above? And why did he Dowdify the quote? UPDATE 2:... $4 billion of California's "spending increase" is... weird accounting: vehicle fees were reduced in the 1990s.... Although this is actually a tax cut, here in Lotus Land it is counted as a spending increase. If you remove this, the real per capita spending increase is-- ta da! -- about 10%, so it appears that Luskin doesn't even get credit for the alleged arithmetic error. Poor guy.

I've said it before and I've said it again. There are lots of very smart right-wing economists who would love to write for National Review -- and who would not embarrass the magazine the way Luskin and his cohorts do.

Posted by DeLong at August 12, 2003 12:40 PM | TrackBack

Comments

Even weirder is the fact that Reynolds AGREES completely with Luskin -- which inspired me to write him a rude E-mail yesterday asking what the hell in Krugman's original sentence could possibly be misunderstood by any reader who isn't a flat-out moron. (Being embroiled in a protracted E-mail fight with PK over the Medicare affair -- he still refuses to say that confusing Medicare Part A with Medicare in general was more than "slightly sloppy", which strikes me as hooey -- I feel no guilt at being accused of liberal bias.)

Posted by: Bruce Moomaw on August 12, 2003 08:39 PM

One wonders what would happen if right-wingers held, say, the Bush administration to the same level of correctness it wants Krugman to adhere to - imagine Luskin slamming Bush for such false statements as "we have found WMDs" (Bush) and "We believe he has, in fact, reconstituted nuclear weapons" (Cheney). Of course this would require right-wingers who are intellectually honest which is INCREDIBLY hard to find - Pat Buchanan is one of the few who comes to mind.

Posted by: joe pundit on August 12, 2003 09:40 PM

I think Luskin's point is that telling us that a 10% increase in "real per-capita spending" can be attributed to inflation and population growth is deceptive on it's face, regardless of the math involved. As all of us here know, "real per-capita" takes into account growth in population AND inflation. I fail to understand how and why folks here would let that slide.

Posted by: spongeworthy on August 13, 2003 05:21 AM

Spongiform:

Krugman's point was that if you look at the nominal growth in spending it is some multiple of the real per-capita growth -- something like 4:1. Krugman is accurately saying that most of the growth in nominal spending was a result of inflation and population growth. This is true because roughly 3/4 of the nominal growth disappears after controlling for inflation and population. Get it?

Posted by: The Fool on August 13, 2003 06:55 AM

I keep reading (often right here) that there simply aren't any reliable sources of conservative analysis on the web right now. Brad seems obsessed with Luskin and company. Can anybody point me toward a reasonable treatment of the budget, tax policy, that sort of thing, that is conservative on principle, rather than by party affiliation?

Posted by: K Harris on August 13, 2003 06:56 AM

K:

If what you mean is: economically reasonable AND conservative, the answer is "no".

Posted by: The Fool on August 13, 2003 07:00 AM

Spongeworthy: Krugman didn't do anything of the sort. Here's his sentence, from his Aug. 1 column: "As analysts at the nonpartisan California Budget
Project point out, real state spending per capita was only 10 percent higher
in 2002-03 than it was in 1989-90 - that is, most of the spending growth [in
California during the period -- fully 130%]] was simply a matter of keeping up with the population and
inflation." I repeat: how in the name of God can this statement be "misleading" to anyone who isn't a flat-out moron?

Posted by: Bruce Moomaw on August 13, 2003 07:52 AM

I've said it before, and I'll say it again: The National Review gets precisely the radical right writers it wishes. Are they truthful? No. Are they smart? Who gives a damn. They are the happy hacks of the radical right pushers. Hack away, happy rightee hacks.

Posted by: lise on August 13, 2003 08:11 AM

Having just checked out the post & comments at CalPundit re the Krugman/Luskin contretemps, I noticed one point seems to have been overlooked here in the mathematical details of Krugman's CA spending-rate calculations in his column. That is: why on earth should anyone be surprised that a "right-wing" (however the term is described) commentator should jump all over Paul Krugman for a supposed error in a NYT Op-Ed? Krugman, I gather,is a particular bete noir for a large part of "The Right" (OK maybe I have been reading Andrew Sullivan too much) mainly because of his constant pointing out of the general reeking bogosity of the Bush Administration's economic policies (their tax-cut mania, in particular), and the duplitious way in which they "sold" their program to Congress and the public. Worse, from "The Right"s standpoint, Krugman's scathing analyses (at least on the economics end) are solidly based on hard numbers, and heavily discount the optimistic wishful thinking on which so much of Shrubonomics is founded.
Thus, for the very large and influential political bloc which has staked a great deal on the popularity and prestige of GWB as President, it is disconcerting, to say the least, to have a well-known and respected economist dissing "their" President's fiscal programs in the pages of the country's major newspaper - especialy as he is correct more often than not.
So, typically for the modern American Right, the answer to this criticism comes out in the form of personal attacks on the messenger (Krugman as hopeless "lefty", obsessed with "Bush-hating", etc) and/or his forum (NYT as rotten with "left-wing bias" - another favorite bogeyman of the Right)- and a gleeful pile-on whenever PK can be shown (or perceived) to have published a erroneous figure in his column.
It is not, I'm sure, an original observation to conclude that politics in this country has become
more of a (figurative) blood sport in recent decades: and the crossroads of Politics and Economics is a dangerous intersection, to say the least. Rather than an endurance run, the politics of economics has become a Demolition Derby. That the Right (in their big rigs) try to run down their critics (in their subcompacts) should not really be shock.

Posted by: Jay C. on August 13, 2003 08:32 AM

If it's so clearly phrased, Bruce, then why did you feel the part you inserted was necessary?

And who are we kidding here anyway? Krugman's defending a massive increase in spending by ignoring the part of it attributable to population growth as if spending just HAS to lockstep population growth. It doesn't.

He's defending this growth because he is a partisan hack now, not an economist. Now he is fair game for those of us who have little patience with his sloppy attempts to deceive less critical readers.

Posted by: spongeworthy on August 13, 2003 08:33 AM

Though I have no idea what a "Dowd" may be, if the writer is referring to Mureen Dowd in a disparaging way, I say "Phooey." Mureen Dowd is a gem, as Paul Krugman is a gem. Get over the male prejudice hon!

Paul Krugman is writing astonishingly wonderful courageous commentary....

Posted by: anne - fair or balanced on August 13, 2003 08:57 AM

Spongiform:

You misunderstood what Krugman was saying to begin with, and now you're raving like a blithering idiot. Most of CA's spending goes to education and health care. Both of those go up as population goes up. Spending increased under Davis far, far LESS than it has historically in CA. The real problems are:

1) the horrible Bush economy, which would have been lifted out of recession a long time ago with a reasonable economic plan

2) The fact that Republicans deregulated the energy indutsry in CA and then Bush's FERC allowed Enron and other scavengers to loot the state

3) irresponsible Republican tax cuts

Posted by: The Fool on August 13, 2003 09:21 AM

"Paul Krugman is writing astonishingly wonderful courageous commentary...."

You mean the latest on the military from Aug 12? Where two little uninteresting and probably false (the one about water) factoids and a couple of insinuations are supposed to support his grandiose claims about privatization and short-changing the soldiers? What grade would Krugman give to a student who presented such an argument?

Posted by: maciej on August 13, 2003 09:31 AM

"Paul Krugman is writing astonishingly wonderful courageous commentary...."

You mean the latest on the military from Aug 12? Where two little uninteresting and probably false (the one about water) factoids and a couple of insinuations are supposed to support his grandiose claims about privatization and short-changing the soldiers? What grade would Krugman give to a student who presented such an argument?

Posted by: maciej on August 13, 2003 09:33 AM

Your comments were helpful in explaining what Krugman was trying to get across, Fool, but now your the one blathering away. No one deregulated the Cal energy market. Cal voters tried to vote themselves cheap power and they got hoisted on their own petard. Sorry, but that won't wash.

There's no way you could believe Bush could magically formulate a tax or spending plan to eat up Silicon Valley's overcapacity problem, so that's garbage, too. And how a tax cut on the Federal level could hurt California is beyond me. If they need to raise the rates in that state, then do it, but don't pretend that more money in the hands of Cal taxpayers hurts the state.

Your blindly partisan slip is showing, and Krugman's a hack, too.

Posted by: spongeworthy on August 13, 2003 10:46 AM

Your comments were helpful in explaining what Krugman was trying to get across, Fool, but now your the one blathering away. No one deregulated the Cal energy market. Cal voters tried to vote themselves cheap power and they got hoisted on their own petard. Sorry, but that won't wash.

There's no way you could believe Bush could magically formulate a tax or spending plan to eat up Silicon Valley's overcapacity problem, so that's garbage, too. And how a tax cut on the Federal level could hurt California is beyond me. If they need to raise the rates in that state, then do it, but don't pretend that more money in the hands of Cal taxpayers hurts the state.

Your blindly partisan slip is showing, and Krugman's a hack, too.

Posted by: spongeworthy on August 13, 2003 10:51 AM

Luskin is not hired to write an economics column. Luskin is hired to write a discredit Paul Krugman column. There are lots of smart right wing economists but few of them want to stoop to the level of writing a hack column whose main purpose is to attack PK. That is why they turn to a dropout like Luskin who made his way by selling out his principles to the highest bidder.

Luskin's web site is called poorandstupid.com for a reason. The articles he writes are poor and stupid.

Posted by: bakho on August 13, 2003 12:22 PM

Mankiw has said (from down at the ranch) that H2 will bring GDP growth in the ballpark of 3.7% (I'm sure he meant at an annualized rate). That, he says is "enough to get jobs." Good boy. That is probably right, assuming we get the growth he expects. Now, will it drop the jobless rate? If trend growth is 3.5%, he's right on the edge. It will be at least as important politically to get the rate falling as to get jobs rising. Hope he doesn't regret being technically correct.

Posted by: K Harris on August 13, 2003 12:31 PM

Spongiform:

Those holes in your brain must be getting larger.

I don't know if you realize it but CA is part of this country called the United States. George Bush has assumed the powers of the presidency there, and his economic policies have nationwide effects. Those effects spread out in wavelike fashion from Washington D.C. and eventually affect even far away CA. The federal tax cuts hurt CA because they were concentrated on the rich and thus failed to stimulate the economy the way almost any other use of that money would have.

I noticed you completely failed to respond to the point about Enron et al. ripping the state off with the cooperation of Bush's FERC. Whose fault is that?

Posted by: The Fool on August 13, 2003 02:11 PM

Spongeworthy: "If it's so clearly phrased, Bruce, then why did you feel the part you inserted was necessary?"

Because, Spongy, Luskin so totally misquoted him that even those parts of Drum's essay that DeLong quotes don't make it clear just how badly Luskin DID misquote him.

"And who are we kidding here anyway? Krugman's defending a massive increase in spending by ignoring the part of it attributable to population growth as if spending just HAS to lockstep population growth. It doesn't."

Beg pardon? What PK said in that sentence is that 12/13 of California's rise in state spending since 1989 was due to its population growth and inflation. Period. I assure you that in no way did he say in that column that California doesn't have to tighten its belt considerably.


Posted by: Bruce Moomaw on August 13, 2003 08:00 PM

Luskin got into a very public, very embarrassing pissing match with thestreet.com founder Jim Cramer several years ago over (amongst other things) his fund's performance. Right on the site, in plain view of the world. It was widely felt that Luskin did not handle that episode with class, grace or dignity:

"Well, Cramer, you'll have to duke it out in the kitchen without me. I quit. I'm through contributing articles here every day for no pay, and taking nothing but abuse.
Want to talk about performance? All of yours that I can see is the TSCM which I sold at $65. You have no way to make up the losses to whomever bought it from me.
Good bye and good luck."

Cramer, who is manic, had quite a positive performance strak at his heddge fund. Luskin did not . . .

Posted by: Barry Ritholtz on August 19, 2003 08:15 PM
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