Will the real Paul Krugman please stand up?

Originally posted by Melanerpes
okay -- I will look at both statements in their entirety
First the one from 2004

"Basically we have a world-class budget deficit not just as in absolute terms of course--[b]it's the biggest budget deficit in the history of the world--but it's a budget deficit that as a share of GDP is right up there.

It's comparable to the worst we've eve ...[text shortened]... rophic

the tone here is clearly NOT alarmist -- but rather ho-hum[/b]

I see. It's the tone.

Or alternatively it's just you nit-picking.

Originally posted by Palynka
I see. It's the tone.

Or alternatively it's just you nit-picking.

You originally stated that there was "no contradiction" between the two statements - while I agreed with sh76 that there was a pretty big contradiction.

So if you regard my subsequent effort to respond to this as "nit-picking", I will assume that you now agree with me.

One thing in the 2009 may have hinted at the reason for the change in tone. Krugman cites commentators who argue that the large deficits mean that we shouldn't push ahead with healthcare reforms. I suspect that Krugman wants very much to see these reforms be passed and knows that sounding the alarm about deficits would greatly reduce the chances that this legislation might be passed.

Originally posted by telerion
Okay. I'll bite. Why is he an idiot? I mean it's one thing to dislike his conclusions or to point out the ways in which the field has surpassed him, but an idiot? Really?

Well, his misconceptions, whether of good intent or not, caused severe damage to the world economy, particularly in the anglo-saxon world.

Originally posted by Palynka
I see. It's the tone.

Or alternatively it's just you nit-picking.

Yes, it is the tone.

If there's one thing I learned in law school, it's that virtually every statement can be reconciled with virtually every other statement, No two fact patterns are identical and few pairs of statements or circumstances are identical.

Perhaps Krugman's two statements can be logically reconciled. Okay, they can be reconciled. But the manner in which he says it presents an about face.

In the former statement, he presents an alarmist almost panicky picture of the smaller deficit, all but prophesizing catastrophe based on the deficit. Now, when a much bigger deficit is being run up, he talks as though it's no big deal. If he would have said in 2009 "Well, you know, as I've always said, deficits are dangerous and terrible. But, hey, we may need to bite the bullet and run up a deficit now just to stabilize our economy." then, fine. I wouldn't have (much of) a problem with it.

But in the latter quote with a lukewarm caveat thrown in at the end, he basically asserts that deficits bigger than the one he decried in 2004 are no big deal.

By the way, regarding two other points made on this thread:

1) I know he's gone after Obama for not spending enough. I don't think he's necessarily biased in favor of Obama, per se. I think he's biased in favor of the liberal position. When deficits are run up because of low taxes, he decries them. When they're run up because of enormous social spending, all of a sudden, they're not so bad.

2) I also found that remark that the economy in 2004 was "depressed" a little odd, as it seems to have run counter to his point. My guess is that he didn't want to, God forbid, say anything that might be construed as a ground to praise something about the Bush administration, so he had to throw in that the economy was depressed in 2004 (which, of course, it wasn't).

Originally posted by Melanerpes
You originally stated that there was "no contradiction" between the two statements - while I agreed with sh76 that there was a pretty big contradiction.

So if you regard my subsequent effort to respond to this as "nit-picking", I will assume that you now agree with me.

One thing in the 2009 may have hinted at the reason for the change in tone. Krug ...[text shortened]... larm about deficits would greatly reduce the chances that this legislation might be passed.

If your contradiction is reduced to tone, then I'll call it out as the delusional nit-picking. I (and several others agreed) showed how there is no contradiction in substance due to the cyclical considerations. If you want to go into discussions about tone, all I can do is point and laugh.

Originally posted by sh76
Yes, it is the tone.

If there's one thing I learned in law school, it's that virtually every statement can be reconciled with virtually every other statement, No two fact patterns are identical and few pairs of statements or circumstances are identical.

Perhaps Krugman's two statements can be logically reconciled. Okay, they can be reconciled. But the ma ...[text shortened]... throw in that the economy was depressed in 2004 (which, of course, it wasn't).

No, he doesn't prophesize catastrophe based on the deficit alone. He prophesizes it because "fundamentally, the government isn't taking in enough money to pay for the programs and we have no strategy of dealing with it". He's quite explicit about it. I even see him hint that a larger downturn would at least justify such a deficit, but I agree that it could be construed differently.

Originally posted by Palynka
No, he doesn't prophesize catastrophe based on the deficit alone. He prophesizes it because "fundamentally, the government isn't taking in enough money to pay for the programs and we have no strategy of dealing with it".

And, do we now have a strategy of dealing with it?

Originally posted by sh76
And, do we now have a strategy of dealing with it?

Probably not yet, but now is not the time to do the structural changes and that's what he says in his second statement.

Originally posted by Palynka
No, he doesn't prophesize catastrophe based on the deficit alone. He prophesizes it because "fundamentally, the government isn't taking in enough money to pay for the programs and we have no strategy of dealing with it". He's quite explicit about it. I even see him hint that a larger downturn would at least justify such a deficit, but I agree that it could be construed differently.

"fundamentally, the government isn't taking in enough money to pay for the programs and we have no strategy of dealing with it"

I agree - it's not the deficit in 2004 by itself that worries him (or even the accumulated debt up to that point), but the fact that those deficits will continue unchecked well into the future. And five years later, I definitely see no more of a strategy in place than there was in 2004.

But the thing that really bothers me about the two statements is very much related to the change in tone. Why does he consider the long-term outlook in 2004 to be so troubling, while in 2009, he seems not at all concerned even though the long-term fiscal outlook has gotten so much worse?

I (grudgingly) accept that politicians will change their positions depending on how the winds are blowing - those than can't do this to some extent probably don't make it very far. But I don't like it when people who are supposed to be "experts" do this. They lose a lot of their credibility and it raise doubts about their objectivity.

Now there could be legitimate reasons for Krugman's changes in position. Perhaps his position on the seriousness of deficits has evolved since 2004. A chronology of his statements since 2004 may show increasing ambivalence, or a gradual change in his views. It's also possible that the 2004 statement was taken greatly out of context and that most of his other statements about the deficit during this year were much less alarmist. Or maybe the current economic crisis scared him so much that he's no longer as worried about the long-term deficit.

It's also possible that Krugman addressed the specific reasons for his change in position in a previous statement and chose not to repeat them in the statement sh76 posted.

Originally posted by Palynka
Probably not yet, but now is not the time to do the structural changes and that's what he says in his second statement.

One of the arguments I made was that Krugman may actually be just as concerned about the deficit picture as he was in 2004. But he might be deliberately downplaying the issue right now because he fears that he could inspire efforts to balance the budget before the economy has fully recovered.

He may be so worried about premature budget actions that he's actually willing to take a hit to his credibility.

Originally posted by sh76
[i]
• "Basically we have a world-class budget deficit not just as in absolute terms of course--it's the biggest budget deficit in the history of the world--but it's a budget deficit that as a share of GDP is right up there. It's comparable to the worst we've ever seen in this country. It's biggest than Argentina in 2001. Which is not cyclical, there's only a l es between these statements... Nah! Krugman isn't.... biased???? Is he?

[/i]quote from 2004....did you not read this?


So, if you take a look, the only thing that sustains the U.S. right now is the fact that people say,[b] 'Well America's a mature, advanced country and mature, advanced countries always, you know, get their financial house in order,' but there's not a hint that that's on the political horizon[b]

Originally posted by uzless
[/i]quote from 2004....did you not read this?


So, if you take a look, the only thing that sustains the U.S. right now is the fact that people say,[b] 'Well America's a mature, advanced country and mature, advanced countries always, you know, get their financial house in order,' but there's not a hint that that's on the political horizon[b]

[/b][/b]Krugman is stating nowhere on the political horizon is there a hint that America is going to get it's house in order -- as a response to those people that argue that a mature country like America is surely going to get it's act together.

Originally posted by Melanerpes
[b]"fundamentally, the government isn't taking in enough money to pay for the programs and we have no strategy of dealing with it"

I agree - it's not the deficit in 2004 by itself that worries him (or even the accumulated debt up to that point), but the fact that those deficits will continue unchecked well into the future. And five years later, I d ...[text shortened]... in a previous statement and chose not to repeat them in the statement sh76 posted.[/b]

Don't you think it's a bit early to start attacking Obama of fiscal irresponsiveness? So far, deficits are justifiable. Bush had several years of showing no sign of caring before Krugman made that comment. It's early to expect the same level of apprehension as now is not the time to talk about fiscal contraction.

It's not changing the position as the wind is blowing. One had a track record of ignoring the issue, as for Obama it's early to tell.

Originally posted by Melanerpes
[/b]Krugman is stating nowhere on the political horizon is there a hint that America is going to get it's house in order -- as a response to those people that argue that a mature country like America is surely going to get it's act together.[/b]

In 2004 wouldn't you agree with him? Republicans were ignoring the issue and the Democrats possible candidates seemed quite weak.

Originally posted by telerion
Okay. I'll bite. Why is he an idiot? I mean it's one thing to dislike his conclusions or to point out the ways in which the field has surpassed him, but an idiot? Really?

Friedman wasn't an idiot. He was conniving force for evil. The people who like Friedman are the idiots.