Are We Being Unfair to Paul Krugman?
In the comments section the other day, Uwe Reinhardt wrote:
Krugman is not even a tenth as stupid as the supercilious commentary on this blog suggests.
Which got me to thinking. Is Paul Krugman treated fairly at this blog? In general, the blogosphere is a surprisingly congenial place. The comments can get out of line, of course, but most bloggers — right and left — are respectful of those they disagree with. At the bloggers conferences I have attended, everyone gets along just fine — regardless of political differences.
Krugman, however, presents a special problem for economists — regardless of their political preferences and regardless of whether they blog.
Let’s start with last Friday’s column. It was about the sad state of the labor market.
Since Barack Obama took office almost 10 million people have dropped out of the labor force. More than half a million dropped out in the last month alone. Today, a record 90 million people — almost one third of the entire population — are not working and not even looking for a job.
“How did that happen?” Krugman asks. One answer is supplied by University of Chicago economist Casey Mulligan — one of the top labor market economists in the country and a regular contributor to The New York Times economics blog. In a new book, Mulligan estimates that roughly half of the excess unemployment we have been experiencing is due to the lure of entitlement benefits — food stamps, unemployment compensation, disability benefits, etc. In other words, we are paying people not to work. In a separate analysis, Mulligan estimates that much of the remaining unemployment may be due to other Obama administration policies, especially the Affordable Care Act.
So what does Krugman have to say about Mulligan’s study? Nothing. Nothing? Not a thing. Not about Casey’s study or any other serious study. But he rejects Mulligan’s conclusion by claiming that the fall in labor force participation
wasn’t a mass outbreak of laziness, and right-wing claims that jobless Americans aren’t trying hard enough to find work because they’re living high on food stamps and unemployment benefits should be treated with the contempt they deserve.
Aaah, yip-yip-yip-yip-yip-yip-yip
Mum-mum-mum-mum-mum-mum
Get a job
Shaaa, na-naa-na, shaaa, na-naa-na-na
Hmmm. Last time I looked, economics is a science. Statements about the economic system are either true or not true. Their validity is not affected one whit by the political views of economists or other people. And facts of reality do not mysteriously become untrue even if they are treated with contempt.
Through the years, I have worked with academic economists all over the country, helping them craft editorials, statements for press releases, and various other lay descriptions of their work. In every case, the primary concern of the scholar was: What will other economists think when they read this? Most members of my profession think they have a duty to the profession. When they speak to the public, they want their colleagues to see that in the process of simplifying for a lay audience, they have fairly and accurately reported what economic research shows.
Krugman, who hasn’t done serious research for years, clearly doesn’t care what his fellow economists think. He can, without the slightest evidence of embarrassment, pretend that an entire body of empirical research doesn’t even exist. That’s his choice. However, The New York Times bills him as a Nobel Laureate in economics. So when Hollywood types read Krugman, they think they are reading economics.
This is bad for the entire profession. Krugman rarely writes a column without including a venomous attack on those who disagree with him — questioning their ethics, their honesty and their motives. But in economics, as in the other sciences, arguments ad hominem aren’t legitimate arguments.
One more bit of deceptiveness from last Friday’s column. Krugman says the solution to the unemployment problem is more stimulus spending and (after what he admits are only back-of-the-envelope calculations) assures us that “we would be a richer nation, with a brighter future.” Okay, everyone is entitled to an opinion.
What he doesn’t say (and what readers are surely entitled to know) is that when the Congressional Budget Office estimated the 10-year effects of President Obama’s stimulus proposal it projected the long-run effects would be negative. That is, incomes will be lower, jobs less plentiful, the federal deficit higher, etc. because of the stimulus! CBO projections, by the way, are the standard Congress is required to use in estimating the effects of the legislation they vote on.
As I’ve pointed out more than once, when it comes to health policy Krugman is almost always wrong. That by itself is not remarkable. Most health policy wonks are also usually wrong in the way they think about health economics. But Krugman is the only person I know who can’t resist insulting an entire political party or the 40% of the population that calls itself “conservative” or other scholars who disagree with him in the process of being wrong.
Once in a while I refer to him as Paul (if-you-disagree-with me-you-must-be-evil) Krugman. But on the whole, we usually pull our punches at this blog (as do most other bloggers). On balance, Krugman gets off lightly. He deserves much worse.
It would take a lifetime to sort out all the people Krugman owes an apology to, based on insults slung here and there on the basis of bad information or faulty reasoning. However, I for one would be willing to wipe the slate clean in return for a Jimmy-Swaggart-type-plea-for-forgiveness delivered at the Republican National Convention.
The tears would have to be real of course.
I don’t think it should come as too big a surprise that unemployment benefits entice some people to stay out of the labor market. Why else would statistics show that people are far more likely to find a job as the expiration of their benefits nears.
Working pays better than not working. In addition, people feel better about themselves when they are productive. But, at the margin, many people (especially those nearing retirement) who cannot find a job that pays what they would like to earn will be unwilling to spend 40 hours a week working (plug commuting time getting ready or work) when the marginal benefit is only a few dollars per hour above welfare benefits.
Follow the money. We have created perverse incentives and these are the results. It is ridiculous that the debate has become so focused on “class warfare”.
Thanks for backing up what I’ve long suspected about Krugman. More economists need to publicly disclaim him. Unfortunately, he is probably the most visible “economist” in the field.
“Hmmm. Last time I looked, economics is a science. Statements about the economic system are either true or not true. Their validity is not affected one whit by the political views of economists or other people. And facts of reality do not mysteriously become untrue even if they are treated with contempt.”
Not an argument — attacking the arguer by insinuating that they are somehow bigoted or classist does not disprove the thesis that people are responding to a very particular set of incentives.
Exactly. If you’ve followed Krugman at all you know that his arguments are consistently founded on Marxist class ideology.
Sure, but you don’t even have to be a Marxist to understand that his dismissal of this argument is an ad hom with no substance.
You’d be surprised how people think. Ad hominems are dismissed unless they are directed toward “racists”, “sexists”, “classists” or bigots of any sort. It has gotten pretty easy for people to blame any and all problems on bigotry even though there is no basis for it.
I don’t trust that people are actually thinking these things through.
I agree with Jenn. Some people who insinuate that welfare recipients are lazy may be class-biased or bigoted. The fact remains, however, that many individuals have had their decision calculus altered by the availability of money when they’re not working. This doesn’t necessarily make them “lazy” but rather demonstrates that the government is creating the necessary preconditions for 9-5 work to seem unpalatable in the face of alternatives. People who point that out aren’t arguing about class but rather demonstrating an empirically verifiable trend.
Definitely true. My point is that I think that a huge number of people are sucked into illogical thinking. I don’t trust people.
I doubt Krugman is interested in apologizing, he’s making too much money off his flock of sheeple.
Krugman gave up his economist card a long time ago and instead carries a pseudo-moralist card that all progressives have. His analysis and prescriptions are the most shallow and bankrupt form of argument and economic thought.
I agree with Uwe. Krugman isn’t stupid at all. He is brilliant — but corrupt. He is corrupted by politics. He will say anything, do anything to advance a political agenda, all cloaked in the (brilliant) mask of being a Nobel prize-winning economist and Princeton professor, and therefore credible.
But these Princeton boys stick together. If you really want to set off Uwe, make a comment about the reprehensible Peter Singer, another Princeton fellow who believes that rats should have the same rights as human babies (or something).
Exactly. Krugman has an “ends justify the means” mentality.
It definitely has cultural cachet to throw your credentials behind a far-left agenda. Krugman long ago ceased being an economist and is now trying to be to economics what Bono is to people who do real charity.
I agree with the thrust of John’s blog on Krugman, but it does not exactly respond to Uwe’s point — that Krugman is not as stupid as many here make out. I agree with that, too. A PhD Nobel Laureate cannot be that stupid. I tend to see him as “ideologically challenged”.
It’s not just that Krugman can ignore an entire body of empirical research. He can also ignore the Paul Krugman who wasn’t ignoring said research.
To wit:
“Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. Most economically advanced countries provide benefits to laid-off workers as a way to tide them over until they find a new jobs. In the United States, these benefits typically replace only a small fraction of a worker’s income and expire after 26 weeks. In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of ‘Eurosclerosis,’ the persistent high unemployment that affects a number of European countries.”
— Paul Krugman and Robin Wells, Macroeconomics, p. 210
http://books.google.com/books?id=dpTBdNGGrtUC&pg=PA210&lpg=PA210&dq=krugman+eurosclerosis+unemployment+incentive&source=bl&ots=GiMUCFpvMz&sig=vCcb2wkdXyBbx7wMDf_pjewae2U&hl=en&ei=FRORS-_BD8H08QaU9dz2BA&sa=X&oi=book_result&ct=result&resnum=4&ved=0CBQQ6AEwAw#v=onepage&q&f=false
Krugman’s Nobel Prize was as big a fluke as Obama’s “Peace” prize.
I have a broad scope of friends in a demographic spread that covers much more than your average reader, most likely. I can assure you that the basis of Mulligan’s opinion is correct. This from first hand, personal empirical knowledge. The folks aren’t evil or necessarily lazy, its just the way it is. For many of us and our upbringing to take like this was an embarrassment, degrading or humiliating. That is no more for far too many. Big culture shift, and Mulligan’s identifies it: “In other words, we are paying people not to work.”
You can spend a long while googling “Paul Krugman contradictions”…
“It would take a lifetime to sort out all the people Krugman owes an apology to, based on insults slung here and there on the basis of bad information or faulty reasoning. However, I for one would be willing to wipe the slate clean in return for a Jimmy-Swaggart-type-plea-for-forgiveness delivered at the Republican National Convention.
The tears would have to be real of course.”
Funny!
Uwe, you miss the point entirely.
The issue is not whether Krugman is “a tenth as stupid” or half as stupid, or some other fraction, because I suspect that we all agree that his brain can process in a mechanical sense just fine.
The issue is the extent to which Paul lets his partisan ideology overwhelm his reasoning and his statements. He feigns that he is offering economic expertise.
John does a fair job, both of reporting what Paul says and in refuting it. It is because Paul is so famously biased that he provides such a tempting target.
Does Paul even have a problem with how people are “uncivil” to him. I thought it was a New York/MIT thing (amplified by the fact that Bob Solow was his mentor) where he just learned to argue without pulling any punches and, by the standards of say, gentlemen from the South, hitting below the belt.
Greg Mankiw seems to genuinely dislike Paul for being an ass, but I got the sense that Paul “hates” Greg the way Yankees fans hate Red Sox fans, you kind of know deep down that it is just a game.
A new Cato study, referenced in this past weekend’s WSJ, estimates that the value of a full welfare package – food stamps, housing, health care – is higher than a job paying $12 per hour. How can you ignore the incentives to drop out of the labor force created by this government hand out? We are becoming more like France. I suppose that this is the kind of change that Krugman hoped for.
That is probably only true for single people with kids.
“Economics is a science,” and “statements about the economic system are either true or not true.”
Why are Casey Mulligan’s statements true, and Paul Krugman’s statements mere opinion? They are both based on economic observations.
To use an example of two economists addressing the same subject, would you consider Mark Pauly’s statements on moral hazard to represent scientific truths whereas John Nyman’s statements to be mere opinion?
Facts are important and should not be ignored, but an analysis of the facts often falls into the category of normative economics. Economics would indeed be a dismal science without normative judgements. Thank goodness we have both Casey Mulligan and Paul Krugman to listen to, even if I personally identify more closely with Krugman’s normative statements, and John Nyman’s as well.
Great post this morning.
“Hmmm. Last time I looked, economics is a science. Statements about the economic system are either true or not true. Their validity is not affected one whit by the political views of economists or other people. And facts of reality do not mysteriously become untrue even if they are treated with contempt.”
This brings me back to the offer I made you some time ago, John: selling you my georgeous ocean-front property in Iowa. Do you sincerely believe that a researcher’s ideology does not find its way into her or his statistical analysis?
Sure you don’t want to buy it?
Not persuasive. Ideology finds its way into “real” science all the time. Consider climate science, which everyone seems to classify as “real” science.
Consider this reformulation: Do you sincerely believe that a [climate] researcher’s ideology does not find its way into her or his statistical analysis?
Given the events of the last 5 years, it is clear that they do, even in “real science.” In climate science, the ideological bias has even extended to corrupting the baseline data. Briffa cherry picking tree Yamal tree rings. No CRU adjustment for the fact that temperature stations in rural areas have declined over time and had their readings filled in with urban temperatures.
The important thing about real science is that sooner or later the ongoing conversation exposes the ideological bias for what it is and results that do a better job of exposing truth come to be preferred.
I will open a bottle of Moet Chandon tonight, because this is the first time in human history that I agree with Linda — even if only accidentally.
The quote with which I opened my comment is, of course, John’s, and I found it so very touching. Indeed, I promise never to explore with John the topic of Santa Claus with John, lest I disillusion him there, too.
And yes, our entire enterprise is built on the hope that, with academic freedom and peer review, eventually, over the long run, truth will triumph over ideology.
NO.
John, thank you for the article.
Love the phrase “sheeple,” and shall use that again, if you don’t mind?
Uwe shouldn’t be so sensitive and defensive?
Regards
Call it “defensive” if you wish.I call it not being naive.
Here’s a post I wrote on this issue. Click also on one of the links cited toward the end on “the Art of Siffing among Seasoned Adults.”
Forgot the link
http://economix.blogs.nytimes.com/2009/01/16/can-economists-be-trusted/?_r=0
See also http://www.princeton.edu/~reinhard/pdfs/EC%20100%20SIFFING.pdf
I find John’s analysis truly touching, all the more so because he sincerely believes it.
Economics is mostly the study of non-recurring events under non-recurring conditions.
Science? OK, if you say so… Sorry.
A few months ago Paul Krugman wrote that US debt was fine because the debt/GDP ratio was sustainable.
The problem with the debt-to-GDP ratio is not the numerator, it is the denominator.
I look at only two types of economic transactions, voluntary and involuntary.
In a voluntary transaction each party is free to maximize the value of the transaction to themselves and if they cannot do so, they may refuse to enter into the transaction. If the transaction occurs then both parties walk away better off, it’s over, and there are few unintended consequences. (This, by the way, is the heart of Krugman’s work in international trade for which he received the Nobel.)
In an involuntary transaction, one party walks away worse off. Examples are theft, fraud and taxation. One party is not free to refuse the transaction. This leads to unintended consequences as the damaged party seeks redress or acts proactively to avoid the transaction in the first place. Most involuntary transactions are accomplished with force or the threat of force.
All governments, whether North Korea, Canada, or America hold a monopoly on the legal use of force except in some cases of immediate self-defense. Because the government can legally use force or the threat of force, almost all government transactions that advance the government’s agenda, are involuntary.
So the problem with using GDP as a measure of beneficial economic activity is that government spending (and therefore taxation and borrowing) is included in GDP. Politicians want their involuntary transactions to be counted as if they were beneficial and politicians determine what counts in GDP.
Krugman’s underlying premise is that government spending promotes the general good as much as voluntary transactions do, and so he wants as much of it as possible.
However history has shown time and time again that, as forced government transactions replace voluntary transactions, a nation grows poorer and poorer. It doesn’t matter if you call them part of GDP or not. I think that this is due to the cumulative effect of all of the negative unintended economic consequences of forced transactions.
In effect, Krugman constantly advocates for the use of force despite claiming to be a “peace-loving liberal.”
Unfair? I think you are being too kind.
When reading articles by Krugman, I keep remembering the quote from Vaclav Havel: “Keep the company of those who seek the truth- run from those who have found it”
I don’t like this advice. It means I could never again have a drink with my friend John.
Always searching Uwe. but if you are buying the champaigne, may we have Dom Perignon?
“Though boys throw stones at frogs in sport, yet the frogs do not die in sport but in earnest.”
~Bion
In a socialist government, the administration will provide the jobs, so why worry and concern yourself. They also will provide education…..and illness care…and housing…..and laws rules and regulations. The government could easily give 12 hour a week jobs to everyone, thereby curing unemployment.. the government could also give telephone, travel and whatever it chooses. And many would accept whatever government gives as the standard.
If the government decides 30 hours is full time employment, it could also say if need be, that 12 hours is full time employment; just show up and pick up a check, food cards, transportation vouchers, and a Medicaid card.
Paul Krugman is to Economics what Bill Maher is to standup comedy!
One important thing to keep in mind is that many people collecting are working. They are either working for in family consumption or they are working for cash illegally. So it is mostly not about sloth.
Uwe–
Do you really think that criticizing Krugman is just a matter of bad manners? What about not wanting to be seen as complicit with his flawed view of economics lest non-economists be led into flawed policies, as they have been. That is more important than manners.
Wanda Jones
SF
Critizing Paul Krugman’s dicta is one thing, as long as it is done with some decorum. It is the supercilous and disrespectful tone of many of the comments on Krugman on this blog that triggered my opprobrium.
Krugman is one one side of a serious, world-wide debate on fiscal consolidation (i.e., reductions of deficits) vs. Keynesian demand expansion. There are serious scholars on both side of that issue.
Paul Krugman is to the economy as Al Gore is to the climate.