Wednesday, October 15, 2003
Luskin on Krugman: Don Luskin catches New York Times columnist Paul Krugman practicing deception once more.
So Krugman hand-picked a "model" that confirmed his prejudices. But does it? After spending a few minutes playing the role of Joseph Wilson IV and "drinking sweet mint tea," I found that Krugman had sexed-up his hand-picked "model." First I downloaded the Lehman press release Krugman cited. It turns out that Lehman never claimed to have "appl[ied] the same model" to the United States. It only stated that "the developed countries...are exhibiting large economic imbalances." Nothing whatsoever was said to the effect that the US's "imbalances" are any worse than those of any other country. Rather, the US is "conspicuous" only because "any financial crisis could cause considerable spillover effects to the rest of the world." I obtained the full September 1 2003 report on Damocles -- no different.
Next I called Lehman's UK-based Chief International Economist Russell Jones, the author of the report on Damocles. He'd seen Krugman's column -- I could hear the sound of his eyes rolling all the way from London. He told me "Krugman can be somewhat twisted and bitter on occasion. This analytic tool was not intended to be applied to developed countries. Damocles gave him an in to write a piece he wanted to write. He's making a career out of this kind of thing."
Strong words from Jones, who told me at the same time that Krugman is not wrong, in principle, to be concerned about the US's "rapid accumulation of debt," and that indeed the US scores poorly by Damocles' standards. But he firmly admonished, "to apply this to the US is not that relevant."
While Krugman has still not acknowledged any of the good economic news that has come out in the last several weeks, he has made a move to cover his a$$ should (horror) the economy improve to the point that even he must acknowledge it.
Still, there's no question that the U.S. has the resources to climb out of its financial hole. The question is whether it has the political will.
Of course, political will is code for electing a Democrat president in 2004. As the past few years have demonstrated, there is little any Republican, let alone President Bush, can do right in Krugman's eyes.
Krugman is also on a speaking tour touting his new book, "The Great Unraveling." The book is little more than a collection of Krugman's Times columns, which can be read for free here.
In a recent speech/preach to the students/choir at the University of Wisconsin -- Madison, Krugman is quoted as having made a couple of interesting statements.
Krugman half-jokingly claimed he feels safe challenging the administration in his columns because he can retreat to his academic career.
"I can always go back to just being a college professor, in England, if necessary," he said.
Contrast that attitude his during an interview with Germany's "Der Spiegel" last December.
KRUGMAN: What it is peculiar is that, when I arranged my column with the New York Times in Fall 1999, I actually thought I would provide good-tempered comments on the specifics of the New Economy. Instead of that, I find myself once again the lonely voice of truth in an ocean of corruption. I sometimes think that I will end up one day in one of those cages in Guantanamo Bay [laughter]. But then I can always seek asylum in Germany. I hope you'll take me in case of emergency.
The good news is that Krugman no longer holds irrational fears of Attorney General John Ashcroft and possible imprisonment as a enemy combatant. The bad news is that he still believes that the government actually has power over the Times hiring and firing practices.
Krugman ended his lecture on a more hopeful note, asserting the strength of the American economy can pull the nation through prolonged financial strain.
"The U.S. has the resources," he said. "The budget deficit is not large compared to the overall national economy."
It's surprising that Krugman made that statement, since he has been loath to report or acknowledge any economic possibility other than disaster.
Different day; same old song.