Those who have followed the career of New York Times columnist and Economics Nobel Prize winner Paul Krugman have witnessed a once brilliant man become increasingly unhinged.
The last chapter in this fascinating story took place today. Paul Krugman took one more step in his journey, now questioning “American Democracy” itself after losing a political battle to the GOP. Krugman complains: “What Republicans have just gotten away with calls our whole system of government into question”.
When questioning “our whole system of government”, Krugman is hopefully not advocating abolishing the franchise. What Paul Krugman has come to oppose is not democracy, but “American Democracy”, i.e. division of power. Still, abandoning support for our system of government it is a major step to take, even for Paul.
One interesting aspect of Paul Krugman’s assault on American Democracy is the timing. We need go no further than back to 2005, when a Republican was in the White House and Democrats used division of power to slow him down, Krugman was enthusiastically defending division of power. Thus he wrote that the “religious right” and "extremists" were threatening the Filibuster: “the big step by extremists will be an attempt to eliminate the filibuster”. The filibuster in the Senate is a unique part of American Democracy.
A cornerstone of democracy is accepting when your side loses democratic battles, such as the 2010 house election when 53.5% of the two-party vote went to Republicans in part in opposition to deficit spending. Paul Krugman’s support of democratic principles is selective: American Democracy and division of power is good when it gives Democrats more power, but bad when it gives Republicans the same advantages.
This is hardly the first time we witness Paul Krugman do a 180 degree shift of views. As a recent example, Krugman first argued that the IT-boom in the 1990s should be personally attributed to President Clinton. As late as 2008 he made the case that:
“Bill Clinton’s fiscal restraint in the 1990s helped fuel the great U.S. investment boom of that decade, which in turn helped cause a resurgence in productivity growth.”
But of course now that Obama is in office, running deficits with a lagging economy, the President doesn’t automatically get credit/blame for the economy. Krugman wrote a few days ago:
“By the way, I don’t give Clinton credit for that revival; it was about learning to use technology. But in any case, there is no hint of a Reagan miracle in the data.”
The problem with Krugman is not only that he shifts opinion when it suits him, but also that his obsession to score maximum points in every short-term political battle trumps his intellectual honesty as an academic economist. Let us continue with the example above.
Professor Krugman proceeds to charitably write that colleagues Michael Bosking and John Taylor have began to “lose” their “mind”, because they use the Reagan Years as example of economic prosperity. The data Krugman cites to prove the Reagan Presidency an economic failure is multifactor productivity growth in the period 1973-1990.
Not only it is nuts to use a 17 years period to evaluate Ronald Reagan’s 8-year presidency, Paul Krugman is relying on an ill-suited outcome variable. Multifactor productivity measures the residual productivity growth you have once you remove the growth of factors of production, labor and capital. If a president, for example, raises growth by raising labor supply through tax cuts, that will not show up in multifactor productivity growth (in fact, it will probably lower it). The current rate of technological change as reflected in multifactor productivity growth is probably the economic factors a president can least effect.
Here are real per capita GDP growth rates in the post 1973 period, as measured by the Bureau of Economic Analysis, recently updated.
I will simply plot average annual real per capita growth rate of GDP during the years someone was president. This is 1981-1989 for Reagan, 1993-2001 for Clinton etc. This is the most standard measure of economic growth. For President Obama the first half of 2009 will be compared to the first half of 2011, the latest available data.
During the years when Ronald Reagan was President, the United States experiences its fastest rate of per capita growth in the post 1973 era, as fast as the Clinton years.
There is no way to determine if the growth was caused by Ronald Reagan, or if this is a historical coincidence. But nor is it any mystery, neither a sign of dementia, that economists such as Michael Boskin and John Taylor are impressed by the Reagan years.
Krugman claimed there was “no hint of a Reagan miracle in the data” because he was picking a silly period and an odd outcome variable, relying as usual on the ignorance and trust of his adoring liberal readers to get away with it.
Paul Krugman likes to claim his opponents are mentally ill. Above, we saw him accuse Michael Bosking and John Taylor of having lost their minds for reporting objective facts, that the Reagan Years were associated with high growth. Here is another recent article where he accuses most of the Republican party of being “crazy”.
It is not void of comedy that Krugman – a pundit so unbalanced that he questions “American Democracy” when he loses one political battle - constantly accuses others of being “angry”, “extremists”, to “lose” their “mind” and of being “crazy”. Project much Paul?