November 29, 2003
Lying in Ponds

Lying in Ponds summarizes his view of Paul Krugman very well: lying in ponds: November 2003 Archive: ...My only basis for evaluation is the record of [Krugman's] 372 Times columns, and I would argue that they were written by a gifted economist and lively writer who also happens to be extremely partisan. I've said many times before that I believe that the partisanship scores of Democratic pundits will naturally be systematically higher during a controversial Republican administration such as this one, and that I hope to be still doing Lying in Ponds the next time that the administration changes parties, to observe how Mr. Krugman and others respond. To me, the most amazing thing about the current partisanship scoring is that Ann Coulter is ranked as the most partisan, despite the lack of high profile Democratic targets in the White House. One can only imagine how high her partisanship score will go when a Democrat regains the presidency... Touche. But I would ask two questions: Why are those 372 columns the "only basis for evaluation"? Why not feed in some of Paul's earlier columns from Fortune and essays from Foreign Affairs? The word "partisan" carries a strong negative evaluative component....

Posted by DeLong at 08:58 AM

November 20, 2003
Defending Paul Krugman

The letter as edited has a slightly different edge to it than the letter I wrote, but it's good: Economist letters to the editor: SIR -- So Paul Krugman is a partisan hack (Face value, November 15th)? Did you not have the time to find out what Mr Krugman has also written about prominent Democrats like Robert Kuttner, Lester Thurow or Robert Reich? Mr Kuttner, proprietor of the American Prospect, believes that Mr Krugman is a right-wing mole: "far more charitable to very conservative fellow economists [like] Milton Friedman, Robert Lucas, Martin Feldstein...than to fellow liberals...whom he dismisses as pseudo-economists and mere 'policy entrepreneurs'." Mr Krugman wages, and always has waged, intellectual thermonuclear war against all whom he regards as denizens of the pit and carriers of error. He's usually right (80% of the time?); he's sometimes wrong. The interesting question--which you did not pose--is what has the Bush administration done over the past three years to draw such a concentration of Mr Krugman's intellectual fire? It is odd that you name only one critic,lyinginponds.com, but mention unnamed "people" and "critics" who "cannot all be easily dismissed"?, "game theorists" who were "not convince[d]", "fellow economists, jealous". Perhaps this is because...

Posted by DeLong at 11:00 AM

October 22, 2003
Glenn Reynolds Has Already Unravelled

Henry Farrell wonders if Glenn Reynolds even reads the stuff he links to: Crooked Timber: Krugman watch : Looks as though Dan’s prediction has come to pass; Glenn Reynolds claims grandly in Instabolded type that the “ANTI-DEFAMATION LEAGUE is blasting Paul Krugman for anti-Semitism.” To put it as kindly as possible, this is a rather … overenthusiastic interpretation of the ADL’s letter to the New York Times, which merely suggests that Krugman “underestimates the significance of the anti-Semitic diatribe by Malaysian Prime Minister Mahathir Mohamad.” Of course, this isn’t the first time that Reynolds’ enthusiasm for a good slur has gotten in the way of the facts, but surely he can do better than this. Does he even read the stuff that he links to? I wonder. I don't know how much Glenn Reynolds reads of the stuff he links to. I suspect the answer is "most"--that he has turned into a guy who never lets the facts get in the way of a bad slur. But it is clear, as Tim Lambert notes, that Reynolds doesn't remember his own archives: Eschaton: Instapundit, May 7, 2003:"Donald Luskin is stalking Paul Krugman..."Instapundit, Yesterday:PAUL KRUGMAN'S UNRAVELLING: He's accusing Donald Luskin of being...

Posted by DeLong at 09:25 AM

Russell Baker on Paul Krugman

Russell Baker on Paul Krugman: The New York Review of Books: The Awful Truth: Krugman's column is remarkable for its single-minded concentration on the President's economic policy. There is very little of the mock ideological posturing about "conservatism" and "liberalism" which most pundits churn out on dull days. He rarely deals with foreign policy except as it affects the economy. He has not said much about the Bush administration's astonishing switch to a unilateral policy of mak-ing preemptive war against nations the President considers dangerous, and there has been virtually none of the conventional pundit's bread-and-butter material: information about what insiders are saying, meditations on the small-town virtues of New Hampshire, startling scoops on what the next usually reliable poll will reveal about public outrage, contentment, or utter indifference. Most pundits dwell on such stuff because they started out as political reporters or were politicians themselves when they were hired into journalism. They grew to maturity talking this shop talk, and they come to the work with a somewhat limited intellectual reach, as well as a repressive sense of dignity. Few are equipped to challenge the mathematics and economic theory underlying the Bush budget, and though Krugman may scold them...

Posted by DeLong at 09:07 AM

September 24, 2003
My Favorite Paul Krugman Essay

As everyone knows, I am a huge fan and admirer of Princeton economist Paul Krugman*. Everyone should go and buy Paul Krugman (2003), The Great Unraveling: Losing Our Way in the New Century (New York: Norton: 0393058506). And everyone who can should try to go see him talk on Friday September 26, 12:00-1:30, Andersen Auditorium, Haas School, U.C. Berkeley. However, The Great Unraveling: Losing Our Way in the New Century doesn't contain my favorite Krugman essay. This is my favorite Krugman essay, from Paul Krugman (1998), The Accidental Theorist (New York: Norton: 0393046389).... An Unequal Exchange Paul Krugman To a naive reader , Edward N. Wolff's Top-Heavy: A study of the increasing inequality of wealth in America might seem unlikely to provoke strong emotional reactions. Wolff , a professor of economics at New York University, provides a rather dry matter of fact summary of trends in wealth distribution, followed by a low-key case for a modest wealth tax. Although Wolff has done a commendable technical job in combining data from a number of sources to produce a fuller picture-in particular his book tells us more about both long term trends and international comparisons that has previously been available-the rough outlines...

Posted by DeLong at 04:50 PM

September 12, 2003
Tyler Cowen Blasts Off for the Gamma Quadrant

The usually highly-intelligent Tyler Cowen digs himself in deeper: he attempts to justify his shrill, sloppy, and self-righteous (though not quite ad hominem) misreading of Paul Krugman with an argument that entails the conclusion that Milton Friedman is not a free-market economist: Thanks for the coverage, please note also that my blog post has real praise for Krugman and his book. I still see a contradiction in Krugman, I don't think I am misreading him. Consider the second quotation, which you call the macro one. Krugman believes, as do you (and many others), that Keynesian demand management can improve economic performance. This argument typically comes bundled with a belief in some kind of rigidity or price stickiness, or various other microeconomic imperfections. In other words, it requires a belief that markets fail at some micro level, which contradicts quotation one. There are other economists, as you yourself note, such as Friedman and Hayek, who believe that these micro imperfections are not so important. Krugman does not believe in the market as much as these other (respected) economists, again contra quotation one. The point is not that the logical error is so interesting but rather that Krugman's writings now use (sloppy)...

Posted by DeLong at 12:07 PM

May 12, 2003
Paul Krugman's "Thinking About the Liquidity Trap"

Paul Krugman's "Thinking About the Liquidity Trap": Thinking about the liquidity trap: We live in the Age of the Central Banker - an era in which Greenspan, Duisenberg, and Hayami are household words, in which monetary policy is generally believed to be so effective that it cannot safely be left in the hands of politicians who might use it to their advantage. Through much of the world, quasi-independent central banks are now entrusted with the job of steering economies between the rocks of inflation and the whirlpool of deflation. Their judgement is often questioned, but their power is not. It is therefore ironic as well as unnerving that precisely at this moment, when we have all become sort-of monetarists, the long-scorned Keynesian challenge to monetary policy - the claim that it is ineffective at recession-fighting, because you can?t push on a string - has reemerged as a real issue. So far only Japan has actually found itself in liquidity-trap conditions, but if it has happened once it can happen again, and if it can happen here it presumably can happen elsewhere. So even if Japan does eventually emerge from its slump, the question of how it became trapped and what...

Posted by DeLong at 07:28 AM

May 10, 2003
The Causes of Slavery or Serfdom: A Hypothesis

Paul Krugman's post, Serfs Up!, reminds me of one of my major sins this spring (for which I must atone): my cutting Evsey Domar (1970), "The Causes of Slavery or Serfdom: A Hypothesis," Economic History Review 30:1 (March), pp. 18-32, from my spring 2003 Economics 210a reading list. As Krugman summarizes Domar's main point: Domar was motivated by his knowledge of Russian history. Serfdom in Russia, he knew, wasn't an institution that dated back to the Dark Ages. Instead, it was mainly a 16th-century creation, contemporaneous with the beginning of the great Russian expansion into the steppes. Why? He came up with a simple yet powerful insight: there's no point in enslaving or enserfing a man unless the wage you would have to pay him if he was free is substantially above the cost of feeding, housing, and clothing him. Imagine a pre-industrial society where population is pressing on limited land supplies, and the marginal product of labor - and hence the real wage rate under competitive conditions - is barely at subsistence. In that case, why bother establishing property rights in human beings? It costs no more to hire a free worker than to feed an indentured laborer. Indeed,...

Posted by DeLong at 10:08 PM

March 12, 2003
Mickey Kaus Is Puzzled

Mickey Kaus is puzzled: Don't Rush Me VI - Time for the grand gesture? By Mickey Kaus: About What Me Worry? I believe whatever Paul Krugman tells me, of course -- he's going to win the Nobel Prize, not me -- but I'm confused. It seems like only two months ago he had me terrified that inflation was going to go down so low it would plunge into negative territory, as in Japan. Now, after reading today's column, I'm worried that the government will decide to "inflate away debt" and "interest rates will soar." ... In other words[u]nless we slide into Japanese-style deflation, there are much higher interest rates in our future.What I don't understand -- and I recognize I may be missing something -- is why we can't end up somewhere in between inflation so low that it's a crisis and inflation so high that it's a crisis. In other words, not in a crisis! If I'm wondering about this, I bet so are many other Krugman readers. Explanation, please! ... Mickey Kaus is puzzled because he doesn't get the fact that that the two different problems that worry Krugman (and me!) operate at different time scales. One--possible deflation--is a...

Posted by DeLong at 07:30 AM

September 13, 2002
Paul Krugman on the "Economic Rationale" for War Against Iraq

Perhaps the stupidest things written about what action should be taken in response to Iraq's flouting of U.N. resolutions on its armaments are Larry Kudlow's cry to invade Iraq to raise the Dow and John Podhoretz's cry to invade Iraq to elect more Republicans to Congress in November. Here Paul Krugman takes on the mostly-whispered claim that a war against Iraq would be "a good thing" for the American economy. Needless to say, policy should rest on whether Saddam Hussein is the successful object of containment policies--a cautious tyrannical madman--or is likely to develop and use weapons that will turn New York or Tel Aviv into abattoirs, not on its effect on the year-over-year growth rate of real GDP. Stocks and Bombs: ...World War II is a very poor model for the economic effects of a new war in the Persian Gulf. On balance, such a war is much more likely to depress than to stimulate our struggling economy. There is nothing magical about military spending — it provides no more economic stimulus than the same amount spent on, say, cleaning up toxic waste sites. The reason World War II accomplished what the New Deal could not was simply that...

Posted by DeLong at 11:00 AM

September 08, 2002
Six Degrees of Paul Krugman

Peter Passell writes about his twelve favorite economics websites. From the Milken Review that he edits: paul krugman | www.wws.princeton.edu/~pkrugman/ | Unofficial site:www.pkarchive.org/ Everyone, it seems, either loves Paul Krugman, or loves to hate him. One reason is that he gets amazing exposure through his Op-Ed column in The New York Times. Another is that he writes better than any economist since Keynes. Yet a third is that he doesn’t suffer fools (or knaves) easily – which often makes his opinion pieces a gas to read. His own Web site contains a sampling of his work, including some striking analytic pieces. But his unofficial site, run by Krugman groupies, is a whole lot more complete, and a whole lot more fun. It includes a lot of material about Krugman as well as stuff by him. xavier sala-i-martin | www.columbia.edu/~xs23/home.html Some economists are smart. A few are funny. A very few, including Columbia University’s Xavier Sala-i-Martin are smart and funny. Who else, after all, would grace his home page with a picture of Miss Piggy in her pigs-in-space getup, and a pair of floating eyeballs that follow your cursor around the site? Check out the picture of his favorite supermodel. Or...

Posted by DeLong at 11:01 AM

July 07, 2002
Before Paul Krugman Leaves for His Vacation...

Before Paul Krugman leaves for his vacation, he takes one more shot at George W. Bush. Between the two options Krugman gives us--Bush knew about and benefited from Harken's accounting frauds, and Bush was just a very negligent and disconnected director--I think the second is by far the most probable. Succeeding in Business ...the ploy works as follows: corporate insiders create a front organization that seems independent but is really under their control. This front buys some of the firm's assets at unrealistically high prices, creating a phantom profit that inflates the stock price, allowing the executives to cash in their stock. That's exactly what happened at Harken. A group of insiders, using money borrowed from Harken itself, paid an exorbitant price for a Harken subsidiary, Aloha Petroleum. That created a $10 million phantom profit, which hid three-quarters of the company's losses in 1989. White House aides have played down the significance of this maneuver, saying $10 million isn't much, compared with recent scandals. Indeed, it's a small fraction of the apparent profits Halliburton created through a sudden change in accounting procedures during Dick Cheney's tenure as chief executive. But for Harken's stock price -- and hence for Mr. Bush's...

Posted by DeLong at 03:36 PM

November 12, 2001
Is Paul Krugman "Partisan"?

Krugman the Partisan Paul Krugman: An Equal Opportunity Critic of Government (November 27, 2001): Every once in a while I read something about how Paul Krugman is the most partisan Democrat alive: someone who would rip the throat out of any Republican, while cuddling up to any Democrat, regardless of the merits of the case. The first thing I do is wonder how short people's memories are. The second thing I do is wonder why people don't make better use of Lexis-Nexis to research what Paul has written. For Paul's animus is not directed against Republicans, it is directed against people in government who--in Krugman's eyes--do stupid things and then play fast and loose with the truth in order to try to fuzz the issue. In fact, I remember well when Paul Krugman's fangs-bared attacks were launched against... Democrats... me, in fact... or, rather, against my bosses in the Clinton Treasury--for I was just a spear-carrier, qualified to conduct analyses of what the likely effects of alternative policies would be, but not a maker of High Policy myself. Paul Krugman (1994), Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations (New York: Norton: 0393312925). p. 289: "Imagine...

Posted by DeLong at 12:09 PM