This actually made me get up and pace around the office for a minute. I had to let it sink in, it was so delicious.
Krugman is a Keynesian because he wants bigger government. I’m an anti-Keynesian because I want smaller government. Both of us can find evidence for our worldviews.
Now that was a surprising thing for Roberts of all people to say (as even Daniel Kuehn agreed). For example, if you listen to this EconTalk podcast where Roberts interviews a card-carrying Keynesian, Roberts is the model of courtesy. There are lots of people in the liberty movement for whom the above statement might be accurate, but Roberts would not have been near the top of my list.
So perhaps he mistyped, and meant to say something more like, “There aren’t controlled experiments in economics, and to be honest I think we all bring our biases to the table. I can look out and see all sorts of ‘objective’ evidence that Keynesian policies fail, but I have to be fair and admit Krugman can see just the opposite. In the grand scheme, I can’t honestly say my evidence is more objective than his. Of course I truly believe I’m right, but let’s be frank, maybe I can’t help but feel that way.”
Anyway, back to Krugman today and his predictable reaction to Roberts’ candid admission:
What is true is that some conservatives in America have always opposed Keynesian thought because they believe it legitimizes an active role for government — but that’s not what Keynesianism is about, and not the reason I or others support it.
…Russ Roberts may choose his economic views because they support his political prejudices. I try not to. Maybe I sometimes fall short — but I try to analyze the economy as best I can, never mind what’s politically convenient, and indeed to bend over backward to avoid believing things that make me comfortable, to avoid turning everything into a morality play that confirms my political values.
OK here my BS meter was off the charts. Since I have been reading Krugman, I can’t think of a single episode where there has been economic or political controversy, and Krugman used his economic analysis to weigh in on the side of the group wanting smaller government on that particular issue. I’m not saying Krugman is a full-blown socialist, I’m saying that when he jumps into a fight, I can’t ever remember him delivering uppercuts to the people whose position happens to imply a
smaller bigger role for government.
(In case you think I’m being a hypocrite, I have–on very rare occasions, to be sure–grudgingly conceded that Krugman/DeLong had a point on something, and that my free-market brethren were being inconsistent in their arguments. It’s true, I have never come out and called for more government powers, but I do try to be mindful of the distinction between economic analysis and moral considerations. I can’t find the best examples of this, but after looking for a few minutes I came up with this post, where I defended Krugman from Scott Sumner and Pete Boettke. Of course, you could claim that my anti-Sumner anti-GMU bias just outweighed my anti-Krugman bias there; perhaps so.)
Anyway, as if sensing that people would be skeptical, Krugman then offers up an example of how he doesn’t make economics a morality play:
Here’s an example: is economic inequality the source of our macroeconomic malaise? Many people think so — and I’ve written a lot about the evils of soaring inequality. But I have not gone that route. I’m not ruling out a connection between inequality and the mess we’re in, but for now I don’t see a clear mechanism, and I often annoy liberal audiences by saying that it’s probably possible to have a full-employment economy largely producing luxury goods for the richest 1 percent. More equality would be good, but not, as far as I can tell, because it would restore full employment.
So I’m trying to figure this thing out, as best I can. If you’re not, we’re not in the same business.
OK, I put the “often annoy liberal audiences” in bold. I want someone to show me one time in his blog where Krugman ever made that point. I’m not betting my life that he didn’t, just saying I can’t ever remember him saying it.
And now, what you’ve all been waiting for. The Most Klassic Krugman Kontradiction of All Time. After the above post, where Krugman pats himself on the back–in contrast to that ideologue Russ Roberts–for his willingness to not mix up issues of inequality with the causes of our downturn, IN THE VERY NEXT #)$(#$* POST, Krugman writes:
A wonderful juxtaposition:
Max Abelson reports on the sorrows of the financial elite:
An era of decline and disappointment for bankers may not end for years, according to interviews with more than two dozen executives and investors. Blaming government interference and persecution, they say there isn’t enough global stability, leverage or risk appetite to triumph in the current slump.
Options Group’s Karp said he met last month over tea at the Gramercy Park Hotel in New York with a trader who made $500,000 last year at one of the six largest U.S. banks.
The trader, a 27-year-old Ivy League graduate, complained that he has worked harder this year and will be paid less. The headhunter told him to stay put and collect his bonus.
“This is very demoralizing to people,” Karp said. “Especially young guys who have gone to college and wanted to come onto the Street, having dreams of becoming millionaires.”
Meanwhile, Catherine Rampell reports on Bankers’ Salaries vs. Everyone Else’s, telling us that
the average salary in the industry in 2010 was $361,330 — five and a half times the average salary in the rest of the private sector in the city ($66,120). By contrast, 30 years ago such salaries were only twice as high as in the rest of the private sector.
It would all be hilariously funny if these people weren’t destroying the world.
An interesting juxtaposition indeed. Not an actual contradiction, of course. A Krugman Kontradiction. He can’t be convicted in any court, but boy oh boy 99% of his readers will get the message.