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When I was an undergraduate, one of Paul Krugman’s papers – ‘A model of balance-of-payments crises‘ from 1979 – was on my reading list. When he won the Nobel Prize for economics in 2008, it was for his work on ‘International Trade and Economic Geography‘, which was largely derived from his 1991 paper ‘Increasing returns and economic geography‘, which was also on my reading list. All of this is first rate academic economics. But, when I quote Paul Krugman on productivity, I joke that I’m quoting from his last good book, written in 1990.
This isn’t entirely fair. 1995’s Peddling Prosperity is interesting and Pop Internationalism from 1996 is very good. But, about two decades ago, about the time he became a columnist for the New York Times, the excellent academic economist was slain and replaced by a purveyor of ranting clickbait, just as the good Jedi Annakin Skywalker was seduced by the Dark Side and slain by Darth Vader.
Even The Atlantic has noticed this. A recent review of Krugman’s new book – ‘Arguing With Zombies: Economics, Politics, and the Fight for a Better Future‘ – is titled ‘Cool It, Krugman‘ and subtitled ‘The self-sabotaging rage of the New York Times columnist’. It notes that:
He writes amusingly and fluently. His combination of analytic brilliance and linguistic facility recalls Milton Friedman or John Maynard Keynes. But Krugman can also sound like a cross between a bloodthirsty Robespierre and a rebarbative GIF. Week after week, he shakes his fist righteously at Republicans and anyone who defends them: You’re shilling for the fat cats. You’re shilling for the fat cats. Over and over. Again and again.
Even so, The Atlantic gives Darth Krugman too much credit. They write:
Many passages of his book underscore how thunderingly right he’s been on the big questions of the past 15 years or so: on the overriding postcrisis need for maximum economic stimulus…
But this is false. Krugman has certainly not been proved “thunderingly right” on the question of ‘stimulus’ vs ‘austerity’. As I wrote a while back, a recent book titled Austerity: When It Works and When It Doesn’t by economists Alberto Alesina, Carlo Favero, and Francesco Giavazzi both summarizes the research on this topic and makes new contributions of its own. The evidence seems to show, in fact, that Krugman was thunderingly wrong.
In his 2012 book End This Depression Now!, for example, Krugman wrote about the British government, elected in 2010, which enacted ‘austerity’ to get its deficit under control. The result, he said:
…is an economy that remains deeply depressed. As the National Institute for Economic and Social Research, a British think tank, pointed out in a startling calculation, there is a real sense in which Britain is doing worse in this slump than it did in the Great Depression: by the fourth year after the Depression began, British GDP had regained its previous peak, but this time around its still well below its level in early 2008.
And at the time of this writing, Britain seemed to be entering a new recession.
One could hardly have imagined a stronger demonstration that the Austerians had it wrong.
In fact, as Alesina, Favero, and Giavazzi show, this is wrong:
The Conservative government implemented a program of budget cuts. Over a 5-year period exogenous fixed measures amounted to almost three percent of GDP, two-thirds expenditure cuts, and one-third tax hikes. It was harshly criticized by the IMF, which predicted a major recession. The latter did not materialize and the IMF later publicly apologized. The UK grew at respectable rates.
Their prose is less flowery, but the message is clear. The British experience is one part of a broader finding:
Tax [hike]-based plans lead to deep and prolonged recessions, lasting several years. Expenditure [cut]-based plans on average exhaust their very mild recessionary effect within two years after a plan is introduced…
Krugman, and others, may disagree with these findings. They may be right. But what they cannot argue is that the matter is ‘settled’ and certainly not that it is ‘settled’ in favor of even greater government spending.
But this is what Krugman does now, “Over and over. Again and again”, as The Atlantic points out. He takes a sincerely contested area of economics and simply announces that the matter has been definitively settled in favor of whatever position he agreed with in the first place. It follows, then, that any opposition must stem from either lunacy or venality. But what can we expect from someone who proudly admits that he won’t read things he doesn’t agree with?
The end product is a ceaseless stream of Krugman’s spittle flecked invective on the pages of the New York Times. Or, for the princely sum of $27, you can wade through 464 pages of the stuff in his new book. No doubt this is good fun for partisans, but it adds little to the intellectual life of the country, in contrast to the path-breaking contributions of the much-missed Annakin Krugman.
John Phelan is an economist at the Center of the American Experiment.