Krugman Kinda, Sorta Retracts a Key Part of Last Friday’s ‘Sanders Over the Edge’ Op-ed

Yves here. You have to look really hard to see this as a retraction. Sanders’ name is not mentioned once in the current Krugman op-ed, while Sanders was named in the headline of last week’s op-ed and that op-ed title is featured clearly right below Krugman’s latest column.

But Mann is probably correct, that for Krugman, this part she flags is meant as a retraction, or at least a walkback, which is just further confirmation of how intellectually dishonest he is.

By Beverly Mann. Originally published at Angry Bear*

It doesn’t have to happen. As with so much else, this year’s election is crucial. A Democrat in the White House would enforce the spirit as well as the letter of reform — and would also appoint judges sympathetic to that endeavor. A Republican, any Republican, would make every effort to undermine reform, even if he didn’t manage an explicit repeal.

Snoopy the Destroyer, Paul Krugman, New York Times, today

I posted here twice in the last few days about the stunningly bungled political commentary about the New York Daily News editorial board interview of Sanders, a transcript of which that paper released last Tuesday.  The second of my two posts was titled:

Why did Paul Krugman and the Washington Post editorial board—both of whom know better—misrepresent that it was Sanders rather than the New York Daily News editorial board that was wrong about what Dodd-Frank provides, and about whether it would be Treasury or instead the financial institutions themselves that would determine the method of paring down?

In today’s op-ed Krugman has retracted that allegation against Sanders in his op-ed from last Friday.  But what prompted the retraction—and especially the timing of it—is itself important: The federal judge’s opinion in the MetLife case was issued on March 30, the news reports about it were published mostly on March 31, and the New York Times published a critical editorial on it on Apr. 4, the day of the New York Daily News editorial board’s interview of Sanders.

A significant part of the media-criticism frenzy of Sanders for saying that he was unsure about the extent to which Dodd-Frank authorizes the federal government to determine that a financial institution is systemically so important because of its size that it must be pared down concerned questions about that opinion, by that one federal judge, issued less than a week earlier and containing some strange and unexpected—and inaccurate—statements about the relevant part of that statute.

Apparently on the ground that Sanders by then should have read the opinion and discussed it in detail with legal and finance-industry experts, the New York Daily News editorial board and most of the mainstream political analysts and pundits who opted to weigh in on it did so with the verdict that Sanders does not know much about this signature issue of his.  Or maybe it was just on the ground that no politician should ever, regardless of the circumstances, say he or she does not know something, does not know enough yet about a new development or about an obscure fact, point or event, or hasn’t thought through something in particular—or maybe everything in particular—and that any politician is, according to the prevalent assembly-line political-journalist guidelines, is toast.

And Hillary Clinton, who at a televised debate two months earlier had said the very opposite of what the New York Daily News editorial board and its journalist parrots were saying about that exchange between the editorial board and Sanders, and emphasized that she had made the same point earlier in the campaign—specifically, about Dodd-Frank, what it authorizes, and how clear those provisions and their breadth are—herself parroted that take.  With no indication of irony.

The first of my two posts on that interview and its aftermath was titled:

Clinton admits she failed to do her homework, and therefore misunderstood, when she stated at the February debate that Dodd-Frank already authorizes the Treasury Dept. to force too-big-to-fail banks to pare down and that therefore no further legislation authorizing it is necessary.  That’s quite an admission by her, and the New York Daily News editorial board (and the Washington Post’s Chris Cillizza) should take note.

This will be my last post on that editorial board interview and the punditry’s reaction to it.  Gratefully.

* Mann reproduced more of the Krugman op-ed than she intended to, per an update to her post. I’ve trimmed the extract to reflect her intention.

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  1. ahimsa

    Just from reading NC links over the past couple years, I think it’s clear Krugman is not worth reading. So, does NC really need more posts about Krugman? This is a serious question.

    1. PlutoniumKun

      I guess the obvious response to this is that Krugman has such a hugely influential bully pulpit that its impossible to ignore him. He is just too important. While in the past he has often fought the good fight, he has gone completely off the rails recently and its important that he is called out every time he does it.

    2. pretzelattack

      he’s very influential, and the influence is often pernicious. is it worth refuting propaganda? or do you think nc is not the place to do it.

      1. cassandra

        If not nc, then where else will you find the requisite economic competence to stand toe-to-toe with this kind of ubiquitous BS?

    3. jsn

      If you engage with any frequency in trying to explain the issues covered here at NC to less engaged but decent people, you frequently find yourself arguing with Krugmanite memes. Clear published rebuttals are a helpful reference for changing minds.

    4. Donald

      As others have said,Krugman has to be refuted when he makes stupid or dishonest arguments. Many liberals today idolize him–I was a fan myself until he started his slimy anti-Sanders campaign. I remember how nasty he was towards anti- globalization protestors in the 90’s, but thought he had undergone a fundamental change. It seems the old Krugman is back.

      1. Donald

        And speaking of the 90’s, one of the most amazing things about this campaign is the rewriting of history. I remember Clinton as the new type of Democrat who got tough on crime and ” reformed” welfare and was friendly to Wall Street. He didn’t run away from this image– it was who he was. Now I read about how he was a progressive forced to sign legislation by the Republicans. People seem to have forgotten how ubiquitous Tom Friedman was– he was sort of the unofficial mouthpiece of this 90’s DLC ideology and of the Clinton outlook on how the world worked. And there was no difference between the Clintons on these issues that I recall.

    5. Tadit Anderrson

      The substantive point is his multiple conceits, including a neo-liberalism in which the dominant narrative is corporate authority. Slick Willie’s reposte of “….. it’s the “Economy Stupid,” actually boiled down to talking about “even better times..for the few including the re-enlistment of former cold war and corporate structured “Democrats.” “Gresham’s dynamic only is allowed as a fictionalized seigniorage, rather than as a commons with attendant temple scribes, bankers, customs, taxes and thieves, with distinctions not always easy.

    6. ahimsa

      Thanks for all the replies. I take the point about propaganda needing to be continually critiqued/challenged.

    7. different clue

      Krugman remains an influential MSM propagandist, of great value to the Establishment. Unless his credibility and reputation can be publicly destroyed and his value as a propaganda asset likewise destroyed, he will remain a deadly threat to the advancement of economic and social knowledge and understanding.

      Therefor, it is perfectly reasonable for NaCap to do what it can to degrade the value of Krugman as an asset all the way down to zero if possible.

    8. Patti

      Yes, NC provides a great service to those of us who come here for perspective & information. There are so many people for whom economics and finance are unapproachable. Many believe everything Krugman writes and cannot fathom his bias & misrepresentation. I often send ppl here to read the ‘other side of the story’. Please keep writing/debunking & referencing past posts. Otherwise this information will be buried in the archives. Much gratitude.

  2. EndOfTheWorld

    I agree with ahimsa. I have avoided even glancing in the direction of Krugman’s “words of wisdom” for a long time. Why listen to propaganda?

    1. diptherio

      In order to be able to refute it, as has been pointed out above. Unfortunately, lots of people still consider Kruggy a legitimate source of information.

      1. annie

        besides, how are those of us who have un-subscribed to the nyt in protest to know what and how krugman is misrepresenting unless we read these refutations?

  3. divadab

    @amhimsa @endofthe world:

    Russians used to read Pravda even though they knew it was propaganda – why? Because even the most blatant propaganda contains useful information.

    Exposing Krugman as a propagandist is a good thing – I mean, he works for the NY Times, which sold us the invasion of Iraq. But what can we learn from the targets of Krugman’s propaganda? That the Imperial regime is scared shitless of Bernie Sanders and the threat to its control he represents. Their remaining candidate is Clinton, the Republican imperial candidates having been vaporised. (Isn’t it interesting how the Dems are so much more tolerant of their own imperial candidate and how fooled such a significant portion are by her?).

    Anyway I continue to read Krugman – I think ignoring him deprives us of much that is useful.

    1. visitor

      I used to read PK’s column regularly, but gave up almost entirely. A few events led me to view PK as somebody whose views are largely obsolete (if one wants to be charitable), or as a charlatan (if one wants to put it in the nastiest form possible).

      1) The first aspect dealt with the discussion of abenomics, years ago. The analysis by PK was insightful in his macro-economic framework, but he seemed oddly fixated on reflation as the solution to restart the economy (priming expectations, eroding debts, etc). He had almost no concern about purchasing power; however, if inflation rekindles and wages stagnate, then reflation is actually detrimental to the population at large. I took it simply as a kind of blind spot of PK. Historically, as we know, the “third arrow” of abenomics, i.e. increasing wages, was a dud.

      2) A more serious matter was a discussion about international shipping and its surprisingly massive CO2 emissions. PK suggested that simply halving the sailing speed would reduce pollution proportionally.

      When reading that, it dawned on me that PK did not understand the concept of throughput. For goods to be delivered at the same rate, one would need either twice as many ships, or ships twice as big; pollution would not be reduced by halving speed. PK was lambasted by others exactly on these grounds, but I was shocked: can a “Nobel Prize” winner ignore such a fundamental concept?

      3) The third stage was a spat via Internet blogs between PK and Steve Keen. I had difficult wrapping my head around SK’s notion that demand = GDP+debt variation, but after reading a few additional articles on credit and how money is actually created I came to accept that SK was probably right and PK probably wrong. I chalked that on PK’s concepts of finance being out of date (it’s normal, people get usually out of date in some aspects of their profession as they age) — but with (2), I started taking what he wrote with a dose of salt.

      4) What led me to write off PK entirely was a post where he proposed an explanation of economic trends — I think as a comment on some recent statistical figures and FED decisions. To shoulder his argument, he relied upon the IS-LM model.

      Now, PK loves IS-LM, and reuses it time and again as an explanatory framework. The problem is that he never uses an empirically founded representation. His model is always of the abstract kind: smoothly curved or completely straight lines, graphs with no scales whatsoever, not a single empirical observation to ground the model.

      Given that that IS-LM has been existing for some 70 years, and that all relevant statistical data (interest rates, GDP, unemployment, etc) have been collated for about as long, I just found it unacceptable that somebody who touts that model as a fundamental explanation of the economy is incapable of substantiating his argument with empirical data. 70 years of modeling and available data and still no empirical IS-LM curve for an actual country? For me this discredited the discourse of PK entirely and reduced it to “vigorous handwaving”.

      And that is how I came to not bother too much with PK any longer. Maybe I am too harsh.

      1. Kaleberg

        Having just come off a Vaclav Smil high reading about the Prime Movers of Globalization, I’ll note that reducing ship speeds by maybe 20-40% would halve the carbon costs. Those big diesels are extremely efficient, and generally the larger, the more efficient they are. Smil ran the numbers, and cutting speeds modestly would dramatically cut fuel consumption which depends on overcoming the hull’s friction with the ocean once the ship is at speed.

        Also, I’m not sure about your argument about throughput. Changing vessel speeds would change latency, not throughput. If all ships moved at 1/2 the speed, they’d each carry the same cargo. The same number of ships would deliver the same number of TEUs every so many days. The difference would be that any change in plans would require a longer adjustment time, so we’ll all have to wait longer for new iPhone cases when a new model comes out. (Granted, there’s already a lot of speculative manufacturing here with sellers doing complete runs and shipping them in hopes that the new model will fit.)

  4. EndOfTheWorld

    I think the NY Times is less and less of a big deal all the time. How are they doing with their circulation? I’m guessing less and less every year.

  5. flora

    This bit from Krugman:
    “A Democrat in the White House would enforce the spirit as well as the letter of reform — and would also appoint judges sympathetic to that endeavor.”

    riiight. Obama, continuing in the footsteps of Bill Clinton, has gone after Wall St. His AG has cracked down on TBTF bankers engaged in illegal practices and brought the financial super-predators to heel. His SEC head has strongly enforced existing laws, protecting investors and pensions. oh…. wait…..

    1. TK421

      And Hillary “received more donations from Wall Street than any Republican” Clinton would go after them as well!!!

  6. Ben

    PK believes he is infallible and most of his readers are intellectually deficient. And he thinks he could get away with any nonsense he blurts out by virtue of his N prize credential

  7. MikeNY

    Mort Zuckerman, owner and publisher of the NY Daily News, is a billionaire and sits on the national advisory board of JP Morgan Chase. Quelle surprise.

    “Billz for Hillz!”

  8. just_kate

    the spirit of reform – as in single payer is NEVER EVER going to happen. i don’t think that sentiment means what he thinks it means. now back to the issues…

  9. Screwball

    Any digital ink disseminated in the attempt to discredit, abuse, or expose the stench of Paul Krugman is well worth it. Please continue.

    1. TK421

      What a shame.

      When you refuse to support someone because you perceive them as “unelectable”, aren’t you basically abdicating democracy itself?

  10. Sandwichman

    “further confirmation of how intellectually dishonest he is”

    Something that needs no further confirmation.

  11. Andy Monniker

    Indeed, refusing to vote for someone “because they can’t win” is a public declaration that one’s ego is so fragile that it needs to always be on the winning side, regardless of what that side represents or stands for.

    I hear a lot of it from Yanks.

    1. sd

      LOL….brilliant! Voting for a winner is right up there with voting for someone because they have “leadership” qualities. (Notice I didn’t say ‘skills’….)

  12. Eliot

    If Tom Hayden now locates himself to the right of Bernie Sanders he has degenerated politically qualitatively from the reformist New Left politics he espoused in his most leftist period. Moving ever rightward in a period when the masses are beginning to awaken and move leftward is pathetic.

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