Bill Black: Krugman Triples Down on His Smear of Friedman and Bernie

Yves here. Krugman’s behavior is utterly disgraceful and he deserves to be called out on it. Again, I urge readers to contact the Times’ Public Editor about this shameful lapse. A classic management error is the “firm within a firm,” where an individual or tem gets to write their own rules and ignore management. AIG and Drexel are case studies of the sorry results. Does the Times regard Krugman as Too Big to Discipline?

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives

Paul Krugman is plumbing new depths of moral obtuseness, arrogance, and intellectual dishonesty in what is now his third smear of the well-respected economist Gerald Friedman in two days.  My prior column discussed Krugman’s two columns on February 17, 2016.  Here is Krugman’s lead in his column dated February 19.

On Wednesday four former Democratic chairmen and chairwomen of the president’s Council of Economic Advisers — three who served under Barack Obama, one who served under Bill Clinton — released a stinging open letter to Bernie Sanders and Gerald Friedman, a University of Massachusetts professor who has been a major source of the Sanders campaign’s numbers. The economists called out the campaign for citing “extreme claims” by Mr. Friedman that “exceed even the most grandiose predictions by Republicans” and could “undermine the credibility of the progressive economic agenda.”

That’s harsh. But it’s harsh for a reason.

But why did they send a “harsh” and “stinging” letter in a manner calculated to try to destroy the career of an economist?  If they found a grievous error in Friedman’s work, why didn’t they email him and point it out?  Why did they personalize the attack and suggest that he must be doing it for Bernie?  Why did they personalize their attack on Bernie, who did not commission Friedman’s study?  Why has Krugman tripled-down on the personal attacks on Friedman and Bernie?

Here are a few things that a reader would want to know, but would never learn from the Gang of 4 or any of Krugman’s three efforts to smear Friedman.  First, Friedman is a political supporter of Hillary Clinton.  He did not gin up an economic study to benefit his favored candidate.  He looked at the economic impact of Bernie’s proposals because that is what macroeconomists do.  It is not clear whether the Gang of 4 did the minimal due diligence to discover this fact before they decided to smear Friedman by implying that he was a political hack shilling for Bernie.  It is certain that they know now and should immediately correct their open letter, formally withdraw it, and apologize to everyone they smeared.

It is certain that Paul Krugman has known since, at the latest, his second post smearing Friedman and Bernie that Friedman, like Krugman, is a Hillary support.  Krugman has not bothered to tell his readers that critical fact, and continues to smear Friedman in a manner designed to convey the opposite to his readers.  This is unworthy of him.

It is clear that Krugman realized almost immediately after his morning post on February 17, 2016 that the Gang of 4 and he had been caught red-handed in a smear of Friedman and Sanders.  His second post, two hours later, admitted that the Gang of 4’s smear was devoid of any logical criticism of Friedman.  As Krugman phrased it, the open letter “didn’t get into specifics.”  Yes, that’s part of what makes it a smear.  You call an economist’s work garbage ginned up to support his favorite candidate – and you never provide a logical explanation with a single specific of what the economist supposedly did so wrong that he should be, not corrected, but publicly humiliated.  And no, they did not leave the specifics out of their open letter in order to avoid humiliating Friedman while sending him a detailed private email detailing his grievous specific errors.

The truth is that the Gang of 4 and Krugman launched their smear of Friedman without pointing out a single error in his work.  Indeed, that only begins to reveal the truth, for Krugman plainly did not evaluate the accuracy of Friedman’s modelling before he chose to smear Friedman.  Two of the economists, Austan Goolsbee,and Laura D’Andrea Tyson do not do macro modelling and Alan Krueger is overwhelmingly a labor economist.  Christina Romer is the only true macroeconomist.  Goolsbee and Tyson would not have been able to critique Friedman’s modeling and even with Alan Krueger’s econometric skills he would have had to invest a great deal of time to be able to do so.  I would love to take the deposition of each member of the Gang of 4 and Krugman.  Journalists need to ask just how long each spent reading Friedman’s studies and obtain the contemporaneous notes they made during their reading an analysis of the studies before they wrote the letter.  I guarantee that the answers will shock readers.

Did even one of you consider the ethics of trying to destroy Friedman’s career as a cynical means to your desired end of harming Bernie’s election prospects?  What you have done is an unethical abuse of power and status for the most unseemly of goals – political advantage.

One of the reasons we can be so confident that any deposition and document discovery request revealing the Gang of 4 and Krugman’s contemporaneous notes would be so shocking is that a journalist has gotten into the fray and tried to bail out the Gang of 4 and Krugman.  She did not understand that she was actually damning both by checking with the Gang of 4 on what work they actually did before launching their public smear campaign.  She reported on the sole basis for the Gang of 4’s smear:  “This was not because they reran the numbers, to be fair, but because they seem far-fetched.”

I will take this slowly for the benefits of journalists who wish to write about this subject.  That sentence condemns the Gang of 4 and Krugman.  Note that her effort at “fair[ness]” lasted exactly one clause.  You can condemn a study without having rerun the numbers if (a) the researcher gimmicked the inputs or (b) used a bogus model.  As I noted in my first column on this subject many of us would agree that the standard macro models are grossly unreliable.  But that is not what the Gang of 4 and Krugman are asserting, for Friedman used the same models that the five smearers embrace.

That leaves us with two sources of criticism.  Data entry and computational errors are one source, but there is no suggestion that the Gang of 4 and Krugman have done the analysis necessary to discover such errors.  They do not assert any such error.

The remaining source of criticism would be that Friedman gamed his inputs.  He could, for example, have put in a fiscal multiplier vastly larger than economists such as the Gang of 4 and Krugman believe exists.  That is not, however, their criticism.  It isn’t for two reasons.  First, several of the economists involved are not expert in the debate about proper multipliers.  Second, the economists involved that are most expert on multipliers have been arguing for years that the multipliers are substantial, and arguably larger than those that Friedman used in his study.

What an economist cannot do is what the Gang of 4 and Krugman have done:  I have no problem with your inputs, your model, or your math – but I hate your results so I’m going to abuse my status to smear and try to destroy you and the candidate I oppose.  Reread the journalist’s sentence that unintentionally condemns the Gang of 4 and Krugman:  “This was not because they reran the numbers, to be fair, but because they seem far-fetched.”  Focus on the second (vague) misuse of the word “they.”  You can complain about inputs on the basis that they “are” (not “seem”) “far-fetched” – i.e., contrary to the known facts about multipliers.  There is a critical difference between inputs to and outputs from a model.  You cannot dismiss a study just because the outputs “seem far-fetched” – and you certainly can’t smear the economist on the basis of your “priors” about what those outputs would be.  Your contrary priors, after all, have just been falsified by the model.  The phrase “seems far-fetched” is a statement of the Gang of 4 and Krugman’s “priors” – priors that were implicitly falsified by Friedman’s study.

The Gang of 4, Krugman, and the journalist love the meme that Friedman is so bad that he is like a Republican.  The journalist assumes that Friedman must have done something bizarre in his model, just like Republicans who game their models.  She contrasts Republicans with their honorable “New Democrat” opposites.

[Republicans] have insisted on “dynamic scoring,” measuring the budget impact of various pieces of legislation according to how much magic sparkling pixie dust they believe such pieces of legislation will bestow on the economy. They have put forward tax plans that do not — cannot — add up, and kept on insisting that they would. They have promised everyone no taxes, awesome jobs, and a pony — all for free.

Democrats, say what you will, have avoided doing this to anything like the same degree. They have admitted that tax cuts do not pay for themselves. They have recognized that government spending needs to be financed with budget cuts, revenue increases, or a jump in the deficit.

The journalist, in her effort to come to the Gang of 4 and Krugman’s aid, again ends up condemning them and revealing her ideological views and lack of understanding of economics.  First, the economy is in fact “dynamic” and changes in demand do have critical impacts on the economy.  The problem with “dynamic scoring” as practiced by Republicans is two-fold.  First it is asymmetric in ways that make no economic sense.  Tax reductions are modeled as increasing growth, but increased spending is not though both operate by increasing demand.  Second, they assume that tax reductions lead to large increases in hours worked that are far in excess of what the data show.  Note that both of these failures are deliberate modeling errors designed to support Republican ideological priors.

Here’s the problem – Friedman didn’t do any of these things or anything similar.  If he had, Romer would have spotted it and based the open letter on the “pixie dust.”

Second, the virtuous Democrats that the journalist described are also a major part of the problem.  “Democrats” have not “admitted” that increasing government spending must lead to “a jump in the deficit.”  That is the economically illiterate (according to both Krugman and Christine Romer) admission of the pro-austerity wing of the Democratic Party associated with the Clintons.  The reality, as Krugman and Romer (a member of the Gang of 4) have stressed, is that “government spending” increases, in many circumstances, will lead to an eventual reduction in deficits by spurring employment and growth, which increases government revenue and reduces many government expenditures.  Indeed, that is largely why the standard model that the Gang of 4 and Krugman embrace, without any “pixie dust,” produces the results that Friedman found.  The standard model shows that both the pro-austerity “New Democrats” that the journalist praises and the Republicans with their gamed “dynamic scoring” models that she scorns are wrong.  Bolder turns out to be much better.  The standard macro model, therefore, finds that Bernie’s plan will “have huge beneficial impacts” (to quote the Gang of 4).  (Also, the journalist and the New Democrats do not understand money, so the entire “needs to be financed” theory is wrong.)

The journalist and Krugman, of course, do not bother to reveal that many economists have reacted with horror to the Gang of 4 and Krugman’s efforts to smear Friedman (as a convenient way to smear Bernie).  I noted in my first column that Jamie Galbraith destroyed Krugman and the Gang of 4 in his column.

You can tell how desperate Krugman is by the rhetorical gambit he has chosen to rely on.  Recall that all of this began with a scathing, personalized and public attack on an economist by for the high crime of running competently and carefully a standard macro model and finding evidence that supported the economic plans of a candidate (Bernie) that he did not support.  The smear is bizarre and insanely over the top.  The assumption of journalists is – surely economists of this status would not perform a public lynching of this nature unless Friedman used “pixie dust.”  If he had done so the Gang of 4 and Krugman would have pointed that out in their open letter and Krugman’s three columns attacking Friedman.

Krugman’s rhetoric reveals that he has nothing beyond ever-escalating Trumpian insults – labeling Friedman’s use of the standard macro models (that Krugman endorses) “voodoo,” “horrifying,” “fuzzy math,” “embarrassing,” “outlandish,” and requiring a “miracle.”  None of the ad hominem remarks would have been required if Paul had found that Friedman actually committed “voodoo” by using the equivalent of a “magic asterisk.”   The Gang of 4’s effort would still obviously be political (a chance to bash Bernie) but at least it would have a clear economic basis.

Krugman exemplifies the old law joke.  “When I’m strong on the facts I pound the facts, when I’m strong on the law I pound the law, and when I’m weak on both I pound the table.”  He has decreed two revealing edicts complete with impassioned pounding.  First, no one is allowed to critique the Gang of 4 and Krugman’s smears of Friedman.  Prominent economists that do, such as Jamie Galbraith, simply do not exist in Krugmania.  This is understandable, of course, given Jamie’s evisceration of Paul and the Gang of 4, but it is still unprincipled.

But Krugman reaches a depth he has not publicly plumbed before in his second edict.  He tries to cast the people who launched the smear, the Gang of 4, as the victims of a smear because economists have had the temerity to point out their errors.  Krugman is enraged that people believe that the Gang of 4 wrote the letter as a means to attack a candidate they oppose – Bernie.  Given that the Gang of 4 openly did so and attacked Bernie for the work of an economist (Friedman) who supports Hillary, the entire world has figured out that the Gang of 4 and Krugman are seeking to defeat Bernie.

The curves of Krugman’s intellectual dishonesty, arrogance, and moral blindness, however, intersect at their respective maxima in this sentence.

Mr. Sanders really needs to crack down on his campaign’s instinct to lash out.

When you are the midst of your third writing in two days lashing out in an effort to smear an economist and a candidate you oppose, it takes a special form of hypocrisy and chutzpah to smear Sanders on the grounds that it is illegitimate for economists like Jamie Galbraith to successfully refute the Gang of 4 and Krugman’s smears of Friedman and Bernie.  Paul, we know you love your “pecking order” of economists, but no one is entitled to a free pass based on status.  The same rules apply to the Gang of 4 and you.  You have to bring logic and facts rather than a rolling barrage of ad hominem smears at those who use your own models and find that they predict the completely unsurprising result that bold plans like Bernie’s “have huge beneficial impacts.”

You, after all, made precisely this point about why the 2008 stimulus program should have been far larger.  Recall how the “freshwater” modelers responded to your point – they abused the results of your model’s predictions in rhetoric every bit as frenzied as you now hurl at Friedman and Bernie.  They at least believed your models were wrong.  Friedman’s unpardonable sin in your book is that he has emulated your work using your model and found as you did that much bolder is much better.  Paul, please complete the irony by predicting that Bernie’s plan will produce hyper-inflation – any day now.

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106 comments

  1. Skippy

    Serious question – is he on drugs – taking life style tips from Ayn Rand when crafting the narrative… really…

    Skippy… not being flippant here, I would not sign a contract with him without a full medical and psychological report… full stop…

    1. Benedict@Large

      I’ve seen this with Krugman several times before, most especially during the MMT Wars that took place several years back. Paul does not like to be questioned by those he consider his inferiors (a large group to him), and he responds by going overboard, not knowing when to stop. Sure, some commenters (then and now) have not treated him kindly, but this guy is a professor with decades of rebellious students in his classrooms, and it should be well within his skillset to be able to handle such discomforts, of at least not completely melt down with what is obviously a deep inner rage. Yet he does so, and once you’ve see it a few times, it’s even predictable.

      1. fresno dan

        I think Krugman is performing an invaluable service – in showing that he, and a great deal of the “lamestream” media (the one thing Palin nailed) just isn’t all that concerned about FACTS. Nor are they concerned about fair dealing. Nor are they concerned about the details that can clarify controversies – now, why is that:
        1. Too stupid to determine ANYTHING???
        2. Resolution might make stories less entertaining, and reduce reduce revenues???
        3. Resolution might take too many man hours, and reduce profitability???
        4. The media has never been objective, is not objective, and will never be objective. Stories are consciously slanted, generally by omission.
        5. Defend the brand – until you reach the “Cosby” event horizon, you diminish your brand by undermining your “stars.”
        6. maybe something else – I don’t know

        If I have said it once, I have said it a thousand times – the most difficult thing for most humans is to admin they are wrong. I have had a tendency toward it myself. But once you can do it, it is soooo liberating.

        I really don’t know what is going on here. What I really suspect is that most economic modeling is gibberish, and is nothing but OPINION, and you can make plausibly any results you want.

        I suspect the next “phase” of the controversy is that Krugman and the Gang of Four will PRODUCE some “error” in Friedman’s work, and Friedman and his supporters will say it is totally ridiculous, and Krugman will say it is GINORMOUS….than someone will find where Krugman did the very same thing, and Krugman will say it was not the very same thing…..ad infinitum.

        As I have said over and over, it is a big McGuffin. I don’t care if NAFTA or TPP raises GDP – because what is clear to me, for fifty years rising GDP has been going more, and more, and more to the wealthiest. That is not a natural law of nature, that is how POLITICALLY things are set up. We can change that IF WE WANT!

      2. Left in Wisconsin

        a professor with decades of rebellious students in his classrooms

        Not so sure about this. My Ivy days were a long time ago but even then it was very unusual for a student to take on a big name professor. I would guess things are worse now, not better.

        1. Left in Wisconsin

          BTW, according to a commenter yesterday on a different post, the journalist Black is referring to happens to be Ezra Klein’s wife. Small world!

          1. grayslady

            Thank you for that piece of information. It explains a lot.

            This is beginning to remind me of the New York Times-Dick Cheney-Iraq War fiasco, where Cheney’s minions would feed information to the NYT, the Times would write a supportive story, and then Cheney would appear on the Sunday talk shows using publication of information in the NYT as verification for his points. Krugman and Lowrey have just taken that dirty tricks routine and freshened it up a bit.

      3. Donald

        This is all mild in comparison to how he behaved in the 90’s towards those who questioned the benefits of free trade. The ugly Krugman you see in the past few weeks was much worse in the late 90’s.

      4. Skippy

        @Benedict@Large…

        Sorry mate, but I’ve been watching Krugman for decades, his last stop down under was like watching Greenspan spin reality. This is compounded by a track record of intransigence and pettifoggery highlighted here on NC going back to 2012.

        http://www.nakedcapitalism.com/2016/02/krugman-and-his-gangs-libeling-of-economist-gerald-friedman-for-finding-that-conventional-models-show-that-sanders-plan-could-work.html#comment-2552760

        Are some holding out for an epiphany to bring back the persona that never was… for the fear that if they took off the rose colored glasses… how it might emotively pain them… or is a case of fear of losing a possible perception management tool with magnetism…. which might find a spine and lean into the cart against the headwinds…

        Skippy…. what if Krugman is just another neoliberal albeit with pangs of guilt….

  2. voteforno6

    Good luck getting the Times to publicly admonish Krugman. If they haven’t cracked down on Maureen Dowd after all these years, there’s no reason to think that they’ll do anything to Krugman.

    1. Yves Smith Post author

      Yes, but you need to make them squirm. The Times isn’t doing all that well financially these days, and Kruggie and the paper’s over the top HIllary boosterism is alienating readers, which is going to cost then in a tangible way.

      1. RW Tucker

        I mean, this is the same paper who allows another Friedman, one Tom, to write for them. They are often shameless in their editorial section.

      2. Helmholtz Watson

        Who cares? The NYT and Paul Krugman are their own worst enemies. Let them shill for Hilary, it’s blatantly obvious and they aren’t fooling anyone; they only damage their already damaged brands.

        Krugman has become a joke to a lot of people. I would like to think he means well but he intensely ideological and anyone who is intensely ideological is ignorant.

        He is a neolibearl moron like that other neoliberal moron who writes a column for them also named Tom. And then there is the neocon named David. And they wonder why they are failing financially?

      3. John Wright

        This is probably old news to most NC readers, but here a link to an article ABOUT the New York Times editorial page in a different New York City publication.

        I may have gotten the link from NC…

        http://observer.com/2014/02/the-tyranny-and-lethargy-of-the-times-editorial-page/

        Here is one quote pulled from the article:

        “One current Times staffer told The Observer, “Tom Friedman is an embarrassment. I mean there are multiple blogs and Tumblrs and Twitter feeds that exist solely to make fun of his sort of blowhardy bullshit.”

        Blowhardy bullshit…seems an apt description of Tom Friedman.

        I believe many commenters write as if Friedman/Dowd/Kristof/Douhat will read and learn from their thoughtful comments.

        I asked the Times public editor if it is known if the editorial writers ever read the readers’ comments, but this went unanswered.

        In Krugman’s defense, I believe he reads at least some of the readers’ comments.

        I believe each editorial writer has a style and brand (see below) to maintain and wants to avoid damage by “straying off the reservation”.

        The observer piece referenced has: “But I will say, regarding Friedman, there’s the sense that he’s on cruise control now that he’s his own brand”

        There is frequently some value in the New York Times online editorial page, but it is in the readers’ comments that are prompted by the Times editorial writers.

        Accordingly, I believe the best writers published in the Times are some of the thoughtful readers.

        And they are working for free.

  3. salvo

    thanks! Unfortunately, there is a great reverence for Krugman in the german left. I’ve started posting links to both of your articles in some german left-leaning blogs which usually positively reference to Krugman

    1. Detroit Dan

      Good. Please keep up the good work.

      I’ve documented one instance of Krugman being completely wrong, then flipping to the MMT position while never bothering to acknowledge his error: Is Paul Krugman Ever Wrong.

      Krugman’s a phony, in my opinion. I love it when he describes something as “wonkish” and then descends into unintelligible gibberish, as when using the ISLM diagram to explain something. It’s all just patently absurd, and the current episode is a clear demonstration that he’s a political hack as opposed to a serious economist.

      1. paulmeli

        “Krugman’s a phony…”

        +1.

        This needs to be said, over and over and over again. He has the bully pulpit and he’s using it to screw the working man. Hopefully there’s a special place in Hell for sell-outs like Krugman.

        On the other hand, Bill Black and Michael Hudson are National Treasures™.

      2. Helmholtz Watson

        Krugman evidently has no idea how money and banking works which says it all. Later last year he wrote in one of his columns that banks take in deposits from savers and lend them out to borrowers, thereby acting as “intermediaries”. He evidently has no idea of the truth, namely, that banks create money out of thin air when they agree to make loans. The fact that he doesn’t understand our monetary system is bizarre and bit scary. So yes he is a “phony”.

          1. susan the other

            and Hillary has most recently been pretending that she does not support TPP, and she failed to gain the support of the unions… oh well…

  4. der

    Me thinks Serious Establishment Professor Krugman is doing a yeoman’s job of carrying Clinton water with hopes of a courtiers appointment in the preordained Clinton Administration.

    1. RUKidding

      Quite likely and/or at least a lot of love tossed in his general direction by the Clinton Admin. A complete lickspittle, imo. No respect for Krug the Thug.

  5. roadrider

    Krugman jumped the shark some time ago with his shilling for the Obamacrats. I stopped reading him and subscribing to the Times shortly into Obama’s first term. The MSM is little more than the propaganda wing for the elite scumbags who feel entitled to run the country. Goebbels and Pravda would be proud.

    1. RUKidding

      Same here. I hadn’t subscribed to the Times in ages and ages (issues with home delivery), but I used to buy it routinely on business & vacation trip flights. Since the early days of Obama, I stopped. The NYT was always biased to the corporatocracy, but it used to have some redeeming features. Not no more. Haven’t bothered to read it at all over the past 7+ years. Thanks, Obama!

  6. Andrew Foland

    I’m honestly puzzled by all the economic criticism of single payer and state-funded higher education, as if there aren’t at least a factor of ten more successful examples of those models in the world than of the funding models we currently have in the US.

    “At least a factor of ten” is a very generous and diplomatic way of putting it.

    1. Uahsenaa

      The beautiful–or perverse–thing about American Exceptionalism (TM) is that it allows you to pretend the rest of the world simply doesn’t exist or is irrelevant. In other words, we can’t have nice things because we’re just too damn special and Free (TM).

      1. fresno dan

        +1000
        or
        solving problems for the masses, if it diminishes profits to the few, simply cannot be discussed…

    2. RUKidding

      I haven’t seen Michael Moore’s latest documentary, Where to Invade Next, but I believe he discusses similar issues by illustrating how other countries are managing to provide their citizens with needed services without going into deep debt (or whatever).

      I haven’t seen any reactions to Moore’s film, but typically the Very Important People condescend to Moore, mock him and similar. Moore’s imperfect like the rest of us, but I give him props for highlighting these issues, usually with some humor thrown in. I plan to see the film.

      But you know, in this libertarian fundamentalist country, you simply have to pull yourself up by your g*dd*mned bootstraps, or you’re a nothing burger and don’t deserve ANY help whatsoever, under any circumstances, blah de blah…

      1. Left in Wisconsin

        I saw it this weekend and highly recommend. Even for someone who pays attention, it was eye-opening. Also, the (mostly) Europeans that Moore interviews are horrified by what he tells them about us. And many point out that their humanistic social policies had American roots.

        A few tidbits:
        Italy: 35-ish vacation days and 10-12 public holidays per year
        France: public elementary schools with chef and team preparing lunch. Lunch lasts one hour, 4 courses, real china and glassware, lunch seen as time for learning about food and how to eat.
        Finland: best schools in world, no standardized testing, virtually no homework, much shorter school day than in US.
        Norway: prisons where rehab is the object
        Slovenia: free college even for non-natives
        etc.etc.

        1. Uahsenaa

          Not to mention Cuba, a country that has been subject to a US trade embargo for more than a half-century now, somehow manages to find the resources to provide free, universal healthcare and education through university, a feat the richest country in the world somehow cannot pull off.

      2. annie

        you better see it soon; it bombed at boxoffice and will probably disappear soon. well worth anyone’s time. could be a sanders commercial.

        1. trinity river

          I have been surprised that it is getting a two-week run here in my southern city. That’s much more than most excellent documentaries get. Wish the seats were packed.

  7. Pat

    Haven’t checked out the claim, but the latest defense of the Krugman/Gang of Four is that Galbraith’s letter can clearly be dismissed because he lied about his own work in it.
    Oh, and I’ve been told I would understand how this all came about and the real facts if I had followed Goolsbee and Krugman’s twitter exchange. (I know I look to twitter for serious economic discussions that actually examine a full study in detail and find its flaws).

    1. Benedict@Large

      Galbraith is meticulous in everything he does. Camp Hillary is playing with dynamite if they think they can take him on. And they are simply brain dead if they think they can get away with calling him a liar.

    2. Joe Firestone

      I’ve never known Jamie Galbraith to speak or write with anything but the utmost integrity. I also have had a few personal contacts with him, and my impression is that he is quiet, kind, considerate, patient, shows the utmost in courtesy in his interactions with questioners, and is an old-fashioned person who cares greatly about honor. I cannot imagine him telling other than the truth about his own work, as he sees it.

      Krugman, on the other hand, not so much.

  8. Steve H.

    “The Nobel Prize-winning Op-Ed columnist Paul Krugman”

    In a previous post, Yves said Friedman might have a case for libel. Krugman’s byline makes it clear he is expressing opinions, and could say the moon is camembert if he wanted.

    If there is a case for libel, make it now. Trading opinion pieces reduces the level of discourse. Legal action actually stings.

    1. Yves Smith Post author

      Calling it an opinion does not necessarily make it one under the eye of the law:

      Can my opinion be defamatory?

      No—but merely labeling a statement as your “opinion” does not make it so. Courts look at whether a reasonable reader or listener could understand the statement as asserting a statement of verifiable fact. (A verifiable fact is one capable of being proven true or false.) This is determined in light of the context of the statement. A few courts have said that statements made in the context of an Internet bulletin board or chat room are highly likely to be opinions or hyperbole, but they do look at the remark in context to see if it’s likely to be seen as a true, even if controversial, opinion (“I really hate George Lucas’ new movie”) rather than an assertion of fact dressed up as an opinion (“It’s my opinion that Trinity is the hacker who broke into the IRS database”).

      https://www.eff.org/issues/bloggers/legal/liability/defamation

      As one reader said yesterday, Krugman routinely takes the posture of objectivity about his views.

      He’s also, by repeating presenting defamatory remarks about Friedman as factual, making it easier to meet the generally not so hard to demonstrate standard of malice.

      The reality is that Krugman can get away with being a bully because he has a much bigger net worth that Friedman and pretty much no academic save maybe the very feisty Steve Keen, once he gets tenure, would get into that kind of row. And suits are emotionally draining. But Krugman is getting really reckless. I hope one day he stomps on someone who has a tough litigator in the family who decides it would be a career-enhancing move to go after Krugman and winds up winning.

      1. ScottW

        Having represented newspapers for decades, dealing with the folks in the editorial department is the worst. Most of them believe slapping the label “opinion” on their column exempts them from suit. As you point out, false facts are false facts and can be the subject of libel. But most believe if they just quote someone else they cannot be held responsible. Libel law is not their strong suit.

        I almost fell victim to Krugman’s slam of Friedman. Thank you for providing context to his attacks. I am going to write the public editor with a link to this article and tell her just read it–every word. They limit complaints to 300 words, so the link is best.

        In the end, the public editor will at best forward on complaints about Krugman to the Editorial Department who will do nothing with them. They are getting exactly what they want from Krugman. Lots of people who support Clinton having yet another rationale why Sanders’ policies are doomed, and lots of Sanders’ supporters weighing in on Krugman’s fawning over Hillary. What could be better.

  9. templar555510

    Sterling effort Bill once again . So just where does this animus towards Sanders / Friedman spring from ? I have a feeling it is because of the ‘ S ‘ word – Socialism . It’s the love that dare not speak its name . Trotsky put it most succinctly ‘ Who whom ‘ either we tilt towards capitalism or we tilt towards socialism . I use the word ‘ tilt ‘ advisedly . This is the death of the liberal class that Chris Hedges has analysed so carefully and now – with the possibility of a socialist leaning candidate in the frame is clearly on show with Krugman and co. all feeling threatened by an agenda that they pay lip service to, but in reality has the potential to diminish their status with the elites. Shameful, but we can at least take comfort from the fact we know them now for what they are.

    1. PlutoniumKun

      Yes, I really do wonder about source of the animus – I haven’t read Krugman in a while (no particular reason except the paywall), but the stuff he was writing 5 or 6 years ago seemed closer to Sanders than Clinton. Its perfectly reasonable for him (or anyone) to decide to prefer Clinton on the basis that ‘she can get more done’, or whatever the current excuse is, but its beyond me why he (and many others) have burned all boats with regard to Sanders. It makes no real sense whatever.

    2. NotTimothyGeithner

      I don’t think Krugman is upset about policy. This is about an elderly man with no platform connecting with young people who are implicitly rejecting Krugthullu en masse because he belongs to the past. Krugman is old. Sanders became an elder. People have never really changed. Krugman is demanding respect and for the kids to get off his lawn. Even if Hillary wins, she and her ilk will be gone in 2020. The lack of youth support for the status quo is far too large.

        1. washunate

          This. It is going to be one of our biggest social challenges. The established order has gone so against the wishes of younger Americans, both in length of time and intensity of the oppression, that it is going to be a difficult task to reconcile once enough younger Americans form a critical mass as adults that they’re in charge.

          The arrogance and lack of awareness amongst educated pundits in particular makes reconciliation that much harder.

      1. Fiver

        ‘Even if Hillary wins, she and her ilk will be gone in 2020.The lack of youth support for the status quo is far too large.’

        Here’s a hears it first here: She’s going to end up impeached for a future breach of conduct again rooted in a simply astounding case of runaway entitlement – something the Repubs can go all gnarly on while the real problems just keep compounding, like the still-endless wars that are passed seamlessly from one Admin to the next as if the natural order of things.

  10. DJG

    I’m beginning to wonder about the strong streak of condescension among the Hillary-o-crats and her campaign condottieri. I have people on my Facebook feed trying to lecture the world (but especially those under 40) about McGovern and other supposed catastrophes. I’m also detecting a strong streak of Eternal U.S. High School, in which the economics club and the pep club now join to tell the rest of us how to vote for student government. Yet Americans seem to lap up the condescension (in spite of endless testimonials to being “bad-ass”) and remain mired in our high-school cultural and political model.

    Thanks for this post: It is one more symptom of how stagnant we as a nation are that we are already seeing the “big guns” out touting eight more years of economic and political stagnation. Because, as we all know, voting for Bernie Sanders is a huge risk and the very definition of folly. And Ted Cruz is the Face of God.

    1. diptherio

      “Eternal U.S. High School” is a very apt way to describe the state of American politics today, especially as it is actually practiced by those who make their living at it. Which is why it’s so frustrating for anyone with an ounce of maturity to really dive into it – you have to interact with a bunch of overgrown teenagers on a regular basis. Logic and facts mean nothing – personal aggrandizement and an obsession with current trends prevail. It’s pretty pathetic.

  11. ScottW

    Add to the above the fact Krugman is giving intellectual cover to the idea single payer, paid family leave, a $15 minimum wage, tuition free public higher education, etc., are just “happy dreams.” Along the way he has thrown out insults against people who have the audacity of believing Democrats might actually support such policies.

    Of course many of those policies were supported by the intellectuals until their fearless leader was pushed into a corner by Bernie. Exposed, they now have to say we get more by asking for less. Seriously? Like Hillary, they just keep inventing rationales and policies as they go along.

    Unless it is equal pay for equal work. That is a policy we can all get behind.

      1. diptherio

        What he really meant was “Hope or change” but an error at the printers gave everybody the wrong impression, that they could have both simultaneously.

        1. Greg

          To me, that one ended when Obama suspended his campaign in ’08 to rush back to Washington to vote for Dot Com Immunity. You kind of knew right there.

  12. Unorthodoxmarxist

    There’s a reason Lenin and the Bolsheviks exiled Russian intellectuals of Krugman’s ilk after the Revolution. Many have cried crocodile tears over the ship that took them out of the USSR but what use would we have for Krugman-types after our own radical change? I would submit very little.

  13. John Wright

    One can remember Austan Goolsbee’s 2008 reassurance of Canadian officials that candidate Obama’s criticism of NAFTA was “political maneuvering”

    http://www.nytimes.com/2008/03/04/us/politics/04nafta.html

    “According to the writer of the memorandum, Joseph De Mora, a political and economic affairs consular officer, Professor Goolsbee assured them that Mr. Obama’s protectionist stand on the trail was “more reflective of political maneuvering than policy.””

    So Goolsbee is quite comfortable with leaving a completely wrong impression with the voters, in this case, that Obama was going to reform NAFTA,if the politics behind it are good.

    A good guy to have on your team.

  14. craazyman

    You guys shouldn’t waste all your mental energy now arguing with nutjobs cause when Professor Kelton gets her hands on the budget all hell is gonna break loose.

    This is nothing compared to what your gonna read then. Man oh man. Don’t waste too much energy trying to hold serve when you’re up 5-3 and your one game away from the match. So what if it’s 5-4. You’ll be serving and 6-4 wins.

    All these guys and ladies are heading for the Newtonian Delusion wing of the insane asylum anyway. Why argue on the internet with crazy people? It’s like arguing with a poodle barking ferociously at you with bloodshot eyes from 8 inches off the ground.

    When Professor Kelton starts teaching the nation about MMT it will be a while before it sinks in, that’s for sure. There will certainly be some confusion, perhaps even some contention, maybe even some invective! It could get messy, let’s be honest. We need to hold back some fiscal multiplier firepower for that day, or that year, frankly. We can’t shoot the wad now. We need to build up the wad so it lasts over a series of rhetorical thrusts. Hopefully we’re up for it. I know I am! The peanut gallery will have a whole new album of fake songs once Professor Kelton takes over the budget.

    I don’t care what these economists say, good or bad. I gave Bernie $100 Sunday and I may give him some more money. I like a man who stands for principles I believe in in a real authentic way — a man who’s not just faking it like an actor to get elected for vainglory and ambition. How many more of those can we take? I can’t take one more. I will never vote again (and not just due to laziness), except I’d vote for Bernie. I’m just being honest. I couldn’t care less about somebody’s econometric model or what Paul Krugman says. Why would anybody care? I guess if they like arguing that’s fine. I like making up fake songs. Maybe those are two things that are similar enough to be elements of a set. I’m not judging or being critical, so nobody take it that way. I’m on Team Bernie and I want Bernie to win.

    1. craazyboy

      I know we all look forward to 4 and maybe even 8 years of rhetorical dueling with MMT as our trusty rapier of keen edged economic wit, leading us to win debate after debate until the public cries out, “I get it already.” If we can make Krugman look like the gold studded, shredded and deflated pin cushion he truly is, that makes a Bernie presidency all worth it in my view.

      But I do have this nagging thought occasionally. I generally trust Bernie, as far as that goes with politicians. Then again I’m not sure he will let Steph be White House Economic Advisor with full control over the budget. (That’s sounds like something Trump would do?) He might just give her the job because he’s really a dirty old man and Steph is waaay cuter than Larry Summers. Not that I have anything against dirty old men – I’ve always wanted to be one someday – but I can’t help thinking that’s what might be going on there.

      1. craazyman

        It would be pretty cool to have a hot Treasury Secretary. When she hands out all the money it’ll almost be glamorous. What can the republicans say to that? What can old white guys who can’t even jog, let alone lift weights in the gym like a stud (OK, maybe Paul Ryan can do that, but most of them can’t), say about a hot woman handing out money other than “Whoa! Thanks!”. Anything they say that’s critical will backfire.

        I’m a Believer

        I thought social justice was a fairy tale
        Pork for the rich, but not for me
        DC was out to get me
        That’s the way it seemed
        Disappointment haunted all of my dreams

        But she found budget space, now I’m a believer
        Not a trace of doubt in my mind
        I’ve got a job, and I’m a believer
        I’m not watchin’ Leave it to Beaver, gettin’ fried. (that line is pretty bad, but I have to work)

        1. craazyboy

          I dunno know about Treasury Secretary. I think Steph would be better off playing the Feminist Card and ward off that job. Firstly, the title should be Treasury Executive Facilitator. But even after fixing that obvious slight the republicans would say, “This is better than a strip club. I don’t need to bring any money and I leave rich!”

          Then there are all those Goldman staffers there. Steph would be getting pinched in the butt all the time because that’s where Hank Paulson and Tim Geithner kept their wallets. That would be bad.

          I think I saw somewhere that Davy Jones is considering going on tour again. It is the year of the monkey.

    1. readerOfTeaLeaves

      There’s actually a good book called “Adam’s Fallacy”, which unpacks what I’d call ‘give upism’, a new term.

      As in, “I have to have a social conscience? Be accountable to others? I give up.”
      As in, “I have to account for money accurately, not by bullish!t like ‘mark to market’? I give up.”

      The way that Adam Smith dodged personal responsibility was to end up saying, “Whoa, all those hands all moving together become Invisible, and every man for himself will just inevitability end up creating The Greatest Good for The Greatest Number. Ergo, no one needs to have a social conscience or worry about morality, because as this sucker scales, it’ll all work out.”

      IOW, Adam Smith suffered a severe case of ‘give upism’.

  15. washunate

    I’m all for pressuring particularly embarrassing acts in the corporate media.

    But I think the context is important. The NYT isn’t some great example of journalism dealing with a rogue economist. It is at the heart of what is wrong with our corporate media, a state of affairs that has been developing over the course of decades now. We are approaching the two decade mark now of when all public comments opposed media consolidation yet the bipartisan effort in DC and NY pushed for it anyway. The problem isn’t Krugman. The problem is that the whole system is rotten.

    1. sd

      Which really does explain the appeal of Sanders and Trump, both candidates were under estimated – inferior, doncha know. Outside Krugmans pecking order so to speak.

      The question I have is this: what happens to Hillary Clinton if she loses the nomination? I don’t see her showing up in either a Sanders or a Trump White House.

    2. readerOfTeaLeaves

      I’m actually a digital subscriber to the NYTimes, as well as the Seattle Times.
      I could make a pretty strong argument that, at least on the civic level in a large metro area, having a family-owned paper is incredibly important – particularly now.

      But rather than simply bashing the MSM, a la that heartless cur Sarah Palin, we just need to hold them to higher standards.

      One of my kids works in what used to be the newspaper industry.
      She works her ass off, as does every person in her group, as near as I can tell.
      So I’ve seen this thing from a different angle than many around here.

      The NYT is a special case, and shall bear the shame of Judy Miller’s help getting us into Iraq, to say nothing of the outing of a CIA agent, to their everlasting shame. Trust me when I say that I fully understand the frustration and hostility that I think your comment represents.

      But that does not automatically make every employee of the NYT guilty.
      And with the NYT totally discredited, doesn’t that leave us with too few outlets? After all, Murdock has bought up so much ‘media property’ that if we don’t have some other large entity to pay people to research, then we are basically leaving ourselves defenseless.

      I believe that a key part of the problem is the shifting economics of digitization.
      According to my daughter, the newspapers make about 1/20th off digital ads that they used to make off print ads, including the personals. Try supporting family-wage jobs, and keeping people who know a city’s history, cops, politicos, businesses, etc employed when your major cash income has dropped to 1/20th of what you used to generate — AND at the same time, you have to buy all new equipment, try to find web developers (which puts you in vicious competition with the tech companies that pay verrrry well), and you have a lot of aging people in the Murdock demo (65+) who still want print, while you are madly trying to grab the ‘iPhone/Android’ generation, which you can pretty much only reach on mobiles — and you have to compete with Facebook, LinkedIn, Twitter, and the web for their attention.

      For heaven’s sake, I understand the anger behind how badly the NYT screwed up, and the WaPo editorial board is a hopeless pack of neocon shills. I get it. It’s why I personally spend the bulk of my time on blogs, and have for about a decade.

      But I would argue that what we really need is to have the NYT allow Friedman to have a counter OpEd to Krugman’s. We should ask, politely but clearly, that they allow Kellman to have an OpEd, or Jamie Galbreith, or other ‘non-neolib’ economists have some space in their OpEds in large part to build their credibility, but also b/c the whole topic of new economic thinking is fizzing, bubbling over, and effervescent at this historical moment.

      As a digital subscriber, I feel that I’m in a much better position to politely say that I expect a wider range of views, and I expect Friedman to have some space — at least online, where it won’t cost them much to publish his rebuttal, or Bill Black’s. Otherwise, I’m just one more whiner harassing a publication that did fire that heartless bitch Judy Miller, and often has some interesting coverage. I don’t want the baby thrown out with the bathwater — I want the baby to be healthy!

      The NYT has put a ton of effort into info graphics and data-base driven analytics, (as had the Economist and FT), and frankly I believe those things provide one hell of a value! (I know something about this from a technical end, and it is no simple cakewalk to create the stuff they are providing even to non-subscribers.)

      We need good sources of information, and bashing the sh!t out of people who have been through 20 years of layoffs, despite working their asses off, does not solve problems and does not push back at the Murdocks or Palin’s of the world.

      Earlier, I mentioned the Seattle Times: it is owned by the Blethen Family (sp?).
      IIRC, they sold off over $100,000,000 in assets in order to hang on to the Seattle Times. They’ve had to expand their personnel to include developers, and now mobile developers and in a town with a lot of big tech companies, that is no simple task. Do I always agree with them? Nope.
      Do I always have time to read them? Nope.
      But I admire the hell out of anyone trying to keep a media business afloat in the communications shifts that we are undergoing. Anyone with enough guts to sell off other assets so that they can try to really, really improve the information to the public should be given some benefit of doubt IMHO.
      I think they’re gutsy as hell, and it’s worth 10 bucks a month to me to watch what they can do.
      Because of what they are doing, the Seattle area is one of the last regions left with an independent newspaper, and that in this day and age has the potential to be a tremendous Public Good.

      The problem in the US is that the cretans in Congress and the Reagan administration let too much media be consolidated, and that was just before the economics of digitization upended *everything*. My daughter could tell you stories from the ad agency side of things, about newspaper reporters having to go home to check out their new web pages, because their employers could not afford to upgrade their computers and software so that people could sit at the workplace and see the new updates. Newspapers that were told by huge ad agencies just how much Verizon or AT&T would pay for **full page** ads — basically, Verizon, AT&T, and other advertisers screwed former newspaper reporters out of their jobs, because the ad agencies had scale, they had power, and the newspapers were in ‘take it or leave it’ territory with absolutely no economic power. So they might run the full page ad, but that meant laying off the reporter who covered city hall.

      So yes, it is easy to bash the NYT and I share some of the frustration,
      I have to double-check my NC contribution to try and give as much to NC as I give to the NYT, because I spend about 8 minutes here for every minute that I spend at NYT.

      But in my case, bashing them just makes me feel like I’m in the gutter with Sarah Palin, and that’s no solution.
      The solution is to get them to publish Friedman’s response.
      The solution is to get them to publish more economics, and explain that we are undergoing shifts that have not happened for 300 years in terms of economic thinking — so it needs more focus now.

      BTW: McClatchy (which is the old Knight-Ridder network) sometimes has very good economic reporting. (Personally, I like their iPhone app and I use it most days.) They own a lot of the smaller metro newspapers: Boise, Sacramento… so they have a nation-wide perspective and ‘eyes on the ground’ in lots of places. You may want to check them out.

      1. John Rose

        Thank you for your well-reasoned and well-informed post. I am constantly impressed with the choice of stories the Times will print, from little corners all over the world, often obtained at great risk to the reporters. They couldn’t do them if the Times did not pay their bills.

        So do petition the public editor (kudos to the Times for having one) for giving Black and Friedman a chance to respond to Krugman. It would even make good copy! And it would advance the excellent point of highlighting our developing understanding of money and the economy

      2. washunate

        Interesting comment. You read some emotion into my post that wasn’t there. Sure, there’s some hostility. As they say, if you’re not angry, you’re not paying attention.

        But my point was just a cold observation of reality. The NYT is part of the problem, part of a system of institutions that have enabled in various ways widespread preventable suffering and death. That doesn’t mean every specific thing they do is wrong.

        But rather than simply bashing the MSM, a la that heartless cur Sarah Palin, we just need to hold them to higher standards.

        That’s an impossible proposition, though, to the point that such effort distracts from the task of building alternative voices and perspectives. It’s the same principle that says we don’t need unemployment insurance and health insurance because individual people can just give food and medicine to their neighbors in need. The problem is not one or two bad stories; mostly it is the countless stories not told, the countless lies unchallenged, the countless acts of omission, not commission. And at any rate, the issue far predates Palin. The notion that things just got bad in the GFC is one of the great memes of comfortable intellectuals.

        I believe that a key part of the problem is the shifting economics of digitization.

        What you describe as a problem I describe as a solution. Media has long exerted undue market power thanks to the tendency toward monopoly. This allowed them to charge excessive fees for advertising and restrict information and sensationalize stories and so forth. The internet allows us to rather effectively ignore the gatekeepers and challenge assertions in near real time and post craigslist ads without the corporate media markup and so forth. That’s a good thing.

        Lesser of two evils has failed us. Doesn’t mean it isn’t a bit sad what has happened, since a quarter century ago the potential for what the corporate media could have done with better leadership was enormous, but that’s a management choice, not something unique to Krugman. At this juncture, what is done is done.

      3. washunate

        P.S., thought you might appreciate a concrete example of something that far predates Palin. Here’s a FAIR report on the hawkishness of the NYT back in the 1990s when educated Serious People Democrats were all about humanitarian intervention via killing people with sanctions and misleading the public for their own good. Once you start seeing a sustained pattern, rather than one-off events like the Judy Miller WMD lies, it really changes your perspective on the value of media organizations.

        http://fair.org/extra-online-articles/new-york-times-on-iraq-sanctions/

  16. Fool

    This is so ugly. It also says much about our political economy; in the feudalistic cottage industry that is people who work for or want to work for or want something from Hillary, you get the feeling that this type of mean-spiritedness is incentivized. I hope Bernie’s revolution means Krugman’s legacy gets swept into the same dustbin that people toss Thomas Friedman columns in.

    1. NotTimothyGeithner

      I wouldn’t be surprised if a Bernie win or even strong showing causes the bean counters at organizations such as the NYT to question the salaries of certain pundits. Couldn’t the NYT get the same results for less money with the non-union Mexican equivalent of Krugman, senor Krugmano?

  17. different clue

    Could Friedman’s University sue Krugman and the Gang of Four on Friedman’s behalf?
    Could Friedman’s Department and University advance a plausible theory whereby libeling and slandering Friedman is libeling and slandering his department and his University by extension . . . and thereby allowing them to sue on their own behalf?

  18. nobody

    Ian Welsh’s latest post is à propos:

    “One of the most striking things about much culture in America is the simple meanness of it… There is also a culture of punching down… America has a high violence, high bullying society… Kick down, kiss up, because failure to pucker up can have you thrown out of the charmed circle, and obviously higher-ups want to see you acting like them, imitation being the most sincere form of flattery.”

    http://www.ianwelsh.net/the-culture-of-meanness/

  19. knowbuddhau

    Thanks much for the attention to this. I’m always curious when the ever so rational throw rationality out the window. At such times, what’s really going on? Why the sudden switch from studious Vulcan to Klingon in heat?

    For those writing to the public editor, the headlines of the 2/17 blog posts are “Worried Wonks” (10:44) and What has the Wonks Worried” (12:44). The headline of the 2/19 op-ed is “Varieties of Voodoo.”

  20. RP

    When the revolution comes Paul will not be spared.

    We can always use another set of hands to pick beets in flyover country though.

  21. ewmayer

    Re. Krugman, “This is unworthy of him.” — Not at all. While it is indeed unworthy of a reasonable person seeking to engage in fact-based – which includes the critical ‘recognizing what the assumptions and limitations of the analyses are’ components – discourse about critical policy issues facing the nation and the world, it is par for the course for an insufferably smug establishment insider who is enjoying a cushy sinecure making full use of what is perhaps the world’s greatest economic media bully pulpit via his lofty perch as the NYT’s pet in-house economic-policy wonk. After all, back in the day Krugman (in)famously was a paid shill for the ‘fabulous new-economic business model’ (do a web search for ‘paul krugman enron may 24 1999 fortune.com”‘ and ye shall find the original) of none other than Enron. Here is the deliciously-savorable money snip from the aforementioned corporate-mouthpiecing:

    The retreat of business bureaucracy in the face of the market was brought home to me recently when I joined the advisory board at Enron–a company formed in the ’80s by the merger of two pipeline operators. In the old days energy companies tried to be as vertically integrated as possible: to own the hydrocarbons in the ground, the gas pump, and everything in between. And Enron does own gas fields, pipelines, and utilities. But it is not, and does not try to be, vertically integrated: It buys and sells gas both at the wellhead and the destination, leases pipeline (and electrical-transmission) capacity both to and from other companies, buys and sells electricity, and in general acts more like a broker and market maker than a traditional corporation. It’s sort of like the difference between your father’s bank, which took money from its regular depositors and lent it out to its regular customers, and Goldman Sachs. Sure enough, the company’s pride and joy is a room filled with hundreds of casually dressed men and women staring at computer screens and barking into telephones, where cubic feet and megawatts are traded and packaged as if they were financial derivatives. (Instead of CNBC, though, the television screens on the floor show the Weather Channel.) The whole scene looks as if it had been constructed to illustrate the end of the corporation as we knew it.

    What happened to the man in the gray flannel suit? No doubt he was partly a victim of sex (er, I mean gender) and drugs and rock & roll–that is, of social change. He was also a victim of information technology, which ended up deconstructing instead of reinforcing the corporation. But probably the biggest force has been a change in ideology, the shift to pro-market policies. It’s not that government has vanished from the marketplace. It’s still a good guess that in a completely unregulated phone market, long-distance companies would buy up local-access companies and deny their customers the right to connect to rivals, and that the evil empire–or at least monopoly capitalism–would rise again. However, what we have instead in a growing number of markets–phones, gas, electricity today, probably computer operating systems and high-speed Net access tomorrow–is a combination of deregulation that lets new competitors enter and “common carrier” regulation that prevents middlemen from playing favorites, making freewheeling markets possible.

    Who would have thunk it? The millennial economy turns out to look more like Adam Smith’s vision–or better yet, that of the Victorian economist Alfred Marshall–than the corporatist future predicted by generations of corporate pundits. Get those old textbooks out of the attic: they’re more relevant than ever.

    *That* sure as hell wasn’t unworthy of him … why would a ruthless attempt to argue from authority and shout down a dissenting voice from a mere lesser non-faux-bel-prized mortal be?

    Anyone who has had the misfortune to spend any time at Krugman’s NYT blog knows that any dissent is ruthlessly excised, leaving it a pristine echo chamber for the singing of its owner’s praises. NC is doing exactly the right thing in forcefully attempting to drag this pampered economic royal out of his gilded carriage and into the sunlight.

  22. CaitlinO

    This all erupted over a prediction that Sanders’ policies could lead to 5.3% growth. Why would we even want 5.3% growth? What would that cost in natural resource depletion and an increased carbon footprint? Can the Earth take that kind of increase in human activity without ecological collapse? And why would we want to risk it?

  23. JoeintheMidwest

    @ewmayer: Wow. His gee-wiz enthusiasm about Enron and Clinton’s telecom deregulation, circa 1999, shows a stunning lack of prescience. Sort of like he showed toward Obama in 2008. And CUNY pays this guy $250,000 a year to drop wisdom?

  24. Erwin Gordon

    Mr. Black, I don’t know why you include the phrase “it is not worthy of him”. It is typical of Krugman. He’s done it his whole career and now in the death throes of when it is being made abundantly clear to all the utter folly of Keynesian economics to all willing to see and onto which Krugman has tied very tightly his sail. What would you expect but for the man to flail out at all enemies both real and imagined. But he’s been using similar tactics against all for years and all who have been pointedly highlighting the flaws in the theory on which he has built his career. No, it’s is very typical of him and expected.

    1. Yves Smith Post author

      You are totally out of line. No one demands changes of published work based on subsequent developments.

      This post ran Feb 23 and the Krugman and Gang of Four attacks started days earlier. The post is now out of Recent Items and not even on the NC front page any more. In other words, this post is now stale.

      The Romer analysis was published Feb 25. The charges are thus accurate as they stand.

      There were no “actual numbers” to back up their letter when it ran, nor did they allude to any and Krugman didn’t have any when he doubled down on Feb 22.

      Moreover, dk has a short form rebuttal on another thread, below. Basically, the Romers cooked their numbers by assuming rigid constraints and offer no support for their claims about negative effects. INET has a long-form takedown it is publishing but won’t run till Monday due to tech staff schedule reasons. It also turns out, which you fail to mention, that Friedman has been denied access to every publication in which he’s tried to rebut the original Gang of Four letter. So the charge that there is an orchestrated effort to smear him also stands.

      They have an entire section for their argument that productive capacity is too small to allow such significant growth… they seem to be arguing that productive capacity is fixed, or constrained.

      Maybe they don’t get how infrastructure spending works?

      I agree with some of their criticisms of Friedman. But those are largely matters of degree (Friedman uses some generous estimates). But their main and major criticism is that the production capacity for significant growth does not exist. This must mean that we are close to our production capacity right now. This recent report from the Fed (Industrial Production and Capacity Utilization seems to show that average current prod. cap. utilization is running below or around 80%. Crudely spitballing that an additional ~20% utilization translates into ~20% more output (I know, utilization never hits 100%)… I think Romer & Romer are spitballing, too. They also seem to completely ignore that capacities can be built (and that this contributes to employment), except when obliquely mentioning that inflation could impact capacity investment.

      Romer & Romer conclude with:

      Finally, a realistic evaluation of the impact of Senator Sanders’s policies on
      productive capacity (something that is neglected in Friedman’s analysis) suggests that those
      impacts are likely small and possibly negative.

      However, aside from mentioning their fear of negative impacts, they never explain, much less show, how such negative impacts will come about. There are a several allusions to smaller-than-predicted effects, but a scenario with a negative result is never given (it’s just “feared”).

  25. Pedro

    Well done, Paul Krugman deserved it.

    “Paul Krugman is plumbing new depths of moral obtuseness, arrogance, and intellectual dishonesty in what is now his third smear of the well-respected economist Gerald Friedman in two days.

    That’s harsh — to paraphrase Krugman.

    And to further paraphrase him, but it’s harsh for several reasons,:

    “But why did they send a ‘harsh’ and ‘stinging’ letter in a manner calculated to try to destroy the career of an economist? If they found a grievous error in Friedman’s work, why didn’t they email him and point it out? Why did they personalize the attack and suggest that he must be doing it for Bernie? Why did they personalize their attack on Bernie, who did not commission Friedman’s study? Why has Krugman tripled-down on the personal attacks on Friedman and Bernie?”

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