The public sector is growing while the private sector isn't.4:30 PM, Oct 15, 2010 • By SETH FORMAN
Does a Nobel prize winning economist have any obligation to demonstrate basic statistical honesty, even when editorializing?
The left is unpopular, undisciplined, and ill-tempered.Aug 23, 2010, Vol. 15, No. 46 • By WILLIAM KRISTOL
The left has collapsed.
Its political support has collapsed. Public opinion polls point to a historic repudiation of the president and the Democratic party this fall—something on the order of a 60-seat Republican gain in the House. The GOP has an outside shot at taking the Senate as well.
The sound of silence.7:40 AM, Aug 12, 2010 • By JOHN MCCORMACK
For now, it seems that Nobel laureate, Princeton professor, and New York Times columnist Paul Krugman is giving up in his fight against Republican congressman Paul Ryan of Wisconsin.
Congressman Paul Ryan disputes NY Times columnist's claims on taxes, spending, and Medicare.7:30 PM, Aug 9, 2010 • By JOHN MCCORMACK
Talking late this afternoon with THE WEEKLY STANDARD, Republican congressman Paul Ryan of Wisconsin blasted New York Times columnist Paul Krugman for his "intellectualy lazy" attack on Ryan's fiscal "Roadmap." In his Friday column, Krugman called Ryan a "charlatan" and his plan to reform the welfare state and eliminate the debt a "fraud" that is "drenched in flimflam sauce." Ryan responded to Krugman in the Milwaukee Journal Sentinel over the weekend, and elaborated on his criticisms of Krugman this afternooon.
Reading between the lines.12:23 PM, Jun 21, 2010 • By MATTHEW CONTINETTI
Here is Paul Krugman today:
But if we need to raise taxes and cut spending eventually, shouldn’t we start now? No, we shouldn’t.
And yet Krugman focuses solely on the spending side of the equation, never mentioning that the Bush tax cuts on incomes, dividends, capital gains, and estates are set to expire at the end of the year. If Krugman takes his theory seriously, which he does, then why doesn't he spend as much time arguing for a delay in rescinding the Bush tax cuts as he spends arguing for ever more government spending?
A dismal spectacle.9:44 AM, Apr 27, 2010 • By MATTHEW CONTINETTI
It's hard to feel sorry for Goldman Sachs. The investment bank has tremendous wealth and political power. I support efforts to break up such institutions, and I find it interesting that Democrats with ties to the big banks are often the same ones who argue that bank-busting won't solve anything. Nevertheless, the recent campaign against Goldman is an astonishing display of political gamesmanship. It's a clear effort to blame the financial crisis solely on the big banks.
The two sides have more in common than you think.2:37 PM, Apr 26, 2010 • By MATTHEW CONTINETTI
Liberals keep voicing amazement that the debate over financial reform is proceeding much more quickly and more smoothly than the debate over health care. The reason is simple: Health care was a clash of two competing governing philosophies, whereas most everyone agrees that something went seriously awry with our financial system in the first decade of the twenty-first century. The negotiations in the Senate are a good-faith attempt to work out the differences.
Arnold Kling on America's fiscal future.4:55 PM, Apr 9, 2010 • By MATTHEW CONTINETTI
Arnold Kling responds to Paul Krugman's Friday column:
The next time the United States hits a debt-to-GDP ratio of 100 percent or more, we will look much more like Greece in 2010 than the United States in 1945. That is, our government will be in a state of paralysis, the public-sector unions and pensioners will be in a state of hysteria, and defense spending will be only a few percentage points of GDP. Like Greece, we will be devoid of options. At that point, "inflating away the debt" will not be some mild, harmless act--it will require a virulent inflation and/or capital levy that wipes out the savings everyone except those who have found safe havens overseas.
Have a nice day.
Is there a way to avoid this fate? So far, only one congressman has put forward a potential solution that does not involve economically harmful taxation and inflation. Others need to step up to the plate.
Some unexpected appreciation for a marginalized school of economics.9:56 AM, Apr 7, 2010 • By MATTHEW CONTINETTI
Martin Wolf asks his readers their opinion of the Austrian school of economics (whose most famous adherent in this country is Ron Paul):
I think we can say that conventional neo-classical equilibrium economics did a poor job in predicting the crisis and in suggesting what should be done in response. We can also say that neo-Keynesians pointed out some important precursors of the crisis, in particular, the destabilising role of huge private sector financial deficits in countries with large external deficits, such as the US, and the Keynesian view certainly played a big part in the post-crisis response, as did that of Milton Friedman.
Yet some would argue that economists working in the Austrian tradition were more nearly right than anybody else. In particular, they have argued that: inflation-targeting is inherently destabilising; that fractional reserve banking creates unmanageable credit booms; and that the resulting global “malinvestment” explains the subsequent financial crash. I have sympathy with this point of view. But Austrians also say - as their predecessors said in the 1930s - that the right response is to let everything rotten be liquidated, while continuing to balance the budget as the economy implodes. I find this unconvincing. Mass bankruptcy is extremely costly. Moreover, it is impossible to separate what is healthy from what is unhealthy during a general economic collapse triggered by an implosion of the financial system.
This isn't an endorsement by any means -- but it's interesting to see the Austrians get some credit from one of the most famous economic journalists in the world. (Be sure to read the comments following Wolf's post for a fascinating discussion.)
It might be time to break up the banks.9:37 AM, Apr 6, 2010 • By MATTHEW CONTINETTI
Before you hit the snooze button, I want to point out a fascinating debate that's taking place over financial reform. Here's where we stand. The House passed its bill in December. The Senate recently passed its bill out of committee, and it now awaits a floor vote. Two weeks ago David Leonhardt had an easy to read rundown on the issues. The package has five main components: resolution authority to take over insolvent investment banks, a Consumer Products Safety Commission, higher capital requirements, the bank tax to "pay for future bailouts," and the Volcker Rule banning banks from trading for their own benefit, not their customer's.
10:35 AM, Mar 26, 2010 • By JOHN MCCORMACK
The Democratic National Committee emails reporters a lot of stories everyday in an attempt to spin a narrative. The narrative of the week, of course, is the supposedly hateful and violent rhetoric espoused by Obamacare opponents. Paul Krugman's column today, like most days, can be stitched together from about a dozen DNC emails.
But the most amusing part of Krugman's column today is his deep concern with the "eliminationist rhetoric" of the GOP:
Kinsley vs. Krugman11:05 AM, Mar 24, 2010 • By MATTHEW CONTINETTI
It's been fascinating to watch the debate between Michael Kinsley and Paul Krugman over inflation. Kinsley, like a lot of people, worries that all this government expansion will result in inflation somewhere down the line. Krugman dismissed Kinsley with his typical combination of arrogance and ill will, saying that "textbook economics" separates inflation (not always bad) from hyperinflation (always bad). Kinsley responded by pointing out that Greg Mankiw's textbook makes no such distinction:
I have been waiting for Paul Krugman to tell me how we are going to handle the debt, once we get this recession out of the way. No, really. There’s no economist whose judgment I trust more. (About economics, that is.) I’ve been all for the stimulus and the jobs bill and even, I guess, the sundry bailouts. But don’t we at some point have to start paying the money back? And how are we going to do that? Krugman’s failure (unless I’ve missed it) to give us an answer to that question is one of the things that makes me worry.
Krugman's rebuttal? Kinsley checked the wrong textbook. In his text, Krugman points out, there is a difference "between Zimbabwe-type hyperinflation and the more moderate type of inflation that afflicted the US and others in the 70s."