Normally I think I have a handle on the mind of Paul Krugman. People often send me alleged “Krugman Kontradictions,” and while I admire their zeal, I have to tell the eager correspondents, “Nah, I know exactly how Krugman’s fans would reconcile those two positions.”
But I am genuinely puzzled by two recent Krugman posts. Even I, with an almost fanatical devotion to his writings, can’t be sure what he means, because at face value his statements are so preposterous. So I’ll just document them here, and let his apologists offer hypotheses in the comments.
CASE 1: People at the Heritage Foundation Don’t Actually Believe in Supply-Side Economics
OK so Menzie Chinn and Krugman have been running a particularly absurd theme for a few weeks now, claiming that it is a contradiction for conservatives to fret about the “fiscal cliff,” since they were so stridently arguing back in 2009 that the Obama stimulus package wouldn’t boost economic growth. I was astounded that neither Chinn nor Krugman even entertained the possible reconciliation that such conservatives (a) opposed the massive boosts in federal spending in the stimulus package and (b) opposed the sharp tax-rate increases that are scheduled for 2013. You can say that such worries are wrong, but there’s nothing contradictory about them.
Well, the Heritage Foundation explicitly came out and said as much, in response to Chin. Now here’s how Krugman discussed the exchange:
Menzie Chinn is having a dialogue, or something, with the Heritage Foundation. He pointed out that their arguments against stimulus, aside from being primitive and wrong, would also imply that the fiscal cliff is harmless. They respond in part by claiming that all they’re worried about is the incentive effects — yeah, right — and also by claiming that famous economists made the same arguments.
In the above quote, what in the world does Krugman mean by the “yeah right”?! To repeat, I’m not asking people to criticize him saying that; I want to know…what does he mean by that? For example, one possible interpretation is that Krugman thinks the Heritage Foundation was relying on Keynesian theory to worry about a reduced deficit hurting the economy, and then when Menzie Chinn pointed this out to them, they scrambled and in desperation made up a story about being afraid of supply-side incentive problems from tax-rate hikes. Is that what Krugman is saying?! Is his mental model of his opponents really that messed up?
CASE 2: Krugman Wags His Finger at People Who Hold His Exact Position on the Deficit
OK, now in the very next post, Krugman writes this:
Oh, dear. This is embarrassing. Yet another Peterson deficit-scold front grouphas emerged, running a full-page ad in the Times. This time a bunch of national-security types, who should know better — plus Paul Volcker, whoreally should know better — have signed on.
It’s the usual stuff: demanding that our leaders put together
a fiscal framework that results in substantial deficit reduction over the next 10 years and structural changes to our fiscal policies that eventually balance the budget over the long term
The language on taxes seems a bit more open to higher rates than in the past, and they actually call for defense spending cuts. But what makes the whole thing absurd is that they want all of this as part of “the resolution of the fiscal cliff by the end of the year”. That is, in the next two weeks.
OK, let’s walk through this. I didn’t go look up the ad (the link doesn’t go there), but from what Krugman just said above, we can conclude the following about this group’s position:
(a) They want to reduce the deficit over the next 10 years, and eventually balance it in the long term.
(b) They want to cut defense spending.
(c) They want to get a deal in place to avoid the default changes that will otherwise kick in, in 2013.
(d) They are open to higher tax rates on upper income earners.
Somebody correct me if I’m wrong, but…doesn’t Paul Krugman endorse every single thing on this list? Isn’t it odd for Krugman to summarize a group’s views–every single one of which he himself holds–and then describe the whole thing as “embarrassing”? What the heck?!
NOTE: I’m sure if you went to the group’s website, or googled the Times ad, you could come up with some point on which they differed from Krugman’s views (meaning Krugman’s views since 2011, not in 1998, 2003, or late 2008 of course). But Krugman quoted and summarized their position in a way that reflects his own position. It would be like me saying, “This is embarrassing. Krugman says reducing tariffs can improve welfare.”