TCS Daily

Paul Krugman’s‘In The Tank’ Displays His ‘Upward Failure’

By James K. Glassman - December 13, 2000 12:00 AM

Paul Krugman is one nasty man. The theme in his "Reckonings" column on the op-ed page of The New York Times can be summed up in a few words: "I am smart. People who disagree with me are dumb." Such a line of reasoning makes unpleasant, unenlightening reading, and you have to wonder why the Times has put up with Krugman for this long. Perhaps the answer lies in the general decline of the op-page, which has become dominated by Maureen Dowd, once an excellent political analyst but who now writes as though she is auditioning (unsuccessfully) for a writer's job on the Jay Leno show.

Krugman has three other virtues as a Times op-ed writer: He is predictably to the left; he is controversial, and he has good credentials as an economist. Unfortunately, Krugman's deficiencies outweigh these virtues. For one thing, he has the lazy-op-ed writer's disease: he tends meet his deadlines by doing riffs on recent news stories. He does little research and breaks no new ground. Instead, he simply postures. In a way, you can't blame him. He is as busy as he is nasty.

In his Wednesday column -- headlined "In the Tank?" - Krugman picks up a Washington Post story about fellows from conservative and free-market think tanks playing a major role in George W. Bush's administration. In the 1970s and 1980s, he writes, "the think tanks provided the intellectual shock troops for the Reagan revolution." But things have changed.

Krugman goes on: "Neo-conservative ideas are no longer radical; they have become trite." Meanwhile, think tanks "have become waiting rooms for the conservative nomentklatura - a class of intellectuals among whom talent is much less important than political reliability." These people, he says, "are professional ideologues, who currently earn a living by repeating conservative slogans but hope that they will soon be under secretaries and assistant secretaries." Blah, blah, blah.

The entire Krugman column is predictable - free of facts and research, full of snide asides and, of course, the usual assertion that no one else has any "talent" - an important word in the Krugman lexicon.

In fact, the think tanks to which Krugman refers - Heritage, Cato and the American Enterprise Institute (where I am a resident fellow) - have done a lot of important work in the post-Reagan years.

The two major policy prescriptions offered in this campaign by Gov. Bush - Social Security reform and school choice - were developed by conservative think tanks, which also sold them effectively to the policy world and the public. The Clinton administration's top policy achievement - welfare reform - was born and bred at AEI and Heritage, and work on free trade at AEI and Cato helped Clinton pass both the North American Free Trade Agreement and the World Trade Organization pact. Meanwhile, these think tanks and others have developed an intelligent critique of the global-warming strictures proposed in 1997 at Kyoto (our own, a new-style cyber-think tank has done influential work recently on climate change as well as on telecommunications and antitrust).

AEI - to cite the think tank I know best -- is developing, among dozens of other initiatives, a rigorous examination of the subsidization of Fannie Mae and Freddie Mac (something that Krugman's liberal friends should have done long ago) and a broader look at needless financial regulation; a project to bring competitive, creative federalism back into American life, and research that has found sensible market-based alternatives to the current Medicare system.

Two highly regarded economists at AEI served as top economic advisers for presidential campaigns. Lawrence Lindsey, a former governor of the Federal Reserve, who previously taught at Harvard, advised Gov. George W. Bush. Sen. John McCain was aided by Kevin Hassett, a former Fed senior economist who taught at Columbia, co-authored with me of the book Dow 36,000 (which Krugman has attacked, apparently without reading, in five separate articles) and also writes a column every two weeks for Tech Central Station.

I could go on, but it is futile to answer Krugman's charges with actual facts, since he cares so little for them.

As put it: "If the three think tanks in question are so useless, why do Times political and policy reporters often quote experts who are based at them? Are they wasting their readers' time? Why does the Times print op-ed pieces written by their scholars? If AEI is so useless, why do even Democratic politicians like Sen. Lieberman participate in its events on military reform, and why do even Democratic politicians like Rep. Richard Gephardt participate in its events on tax reform?"

One answer, of course, is that such politicians are more open-minded than Krugman. The current issue of The International Economy (TIE) reports on a meeting of top hedge-fund managers sponsored by Morgan Stanley Dean Witter in the Bahamas, where Krugman was a speaker.

"While Krugman was making his presentation, several of these investor legends acted puzzled and indicated that what they saw happening in the economy didn't square with what he was saying," according to the magazine. "They had a very different view of reality than Krugman, whose professional positions have entailed academic jockeying at Stanford, MIT and Princeton. "Krugman, rather than listening to the financial traders, most of whom have outperformed the market over many years, gave them a lecture.

"TIE was told he said, in typical Krugman-esque style, 'Let me see if I can make this simple enough for you people to understand.' "At that point, hedge fund guru Julian Robertson said he'd had enough, got up, and walked out of the room. Others expressed their disgust as well and started to leave."

But Krugman's self-confidence would be more impressive if it were deserved. It isn't. His track record is strewn with embarrassing predictions. Bob Woodward talks about one of them in his new book on Alan Greenspan, Maestro.

"On February 4 [1996], Stanford University economist Paul R. Krugman weighed in in the New York Times Magazine declaring that higher-growth proponents like 'financier-pundit Felix Rohatyn' were living with a 'delightful fairy tale.' Krugman wrote, 'In fact, the so-called revolutions in management, information technology and globalization are vastly overrated by their acolytes.'"

In the nearly five years since Krugman's article, the U.S. economy has probably performed better than in any such period in U.S. history. Unemployment fell from over 5 percent to under 4 percent, inflation averaged a mere 2 percent, the stock market more than doubled, and GDP growth zoomed along at 4 percent, boosted by amazing gains in productivity - thanks specifically to the "revolutions" that Krugman derided.

You would think that anyone who makes such haughty and inaccurate predictions would be laughed out of town. Instead, Krugman benefits from what his former editor, Michael Kinsley of Slate, has called "upward failure." The more fatuous and faulty his pronouncements, the broader his audience.

But upward failure can last only so long. In the end, the "look-at-me!" style of op-ed writing backfires. The author begins to look like a buffoon; no one takes him seriously any more. Krugman is on the verge of such distinction, a sad ending for someone with (as he will be only too happy to remind you) so much talent.

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