It is safe to say that Paul Krugman is much smarter than I am, and that he understands more economics than I do. He generates a great deal of incisive analysis about the economy, and has often had a gift for stabbing straight through to the one underlying piece of data that gives lie to an otherwise plausible economic theory.
I want to get that out of the way, because otherwise my readers (left and right) might assume that this post is a "libertarian economics blogger makes fun of liberal economist's poor reasoning skills" special, and that's not at all why I'm writing it. Paul Krugman is a brilliant and interesting analyst. He also, like everyone else, can be wrong.
There's an interesting phenomenon that often happens when I blog something critical of Paul Krugman: some of his bigger fans turn up in my comments to argue that I am not worthy to talk, because Paul Krugman is a brilliant insightful analyst who has forgotten more economics than I will ever learn--all undoubtedly true. Over and over, they say, Paul Krugman gets it right when other commentators get it wrong. And as proof of this rare perpicacity, they offer the fact that . . . Paul Krugman called the housing bubble in May 2005.
There is rich irony in the belief that Paul Krugman must be right, and I must be wrong, because he had the foresight to call the housing bubble. That's because I saw it in 2002. As you can see, I blogged quite a bit about it before Paul Krugman wrote his first column on the topic. Neither of us, as far as I can tell, understood what that meant for the financial system. But both of us saw it coming, me a little sooner.
This is not that surprising, actually. Lots of people saw it coming. You hear people asking a lot where the financial journalists were--how they could have missed the housing bubble--and the answer is that they didn't! The Economist was writing about it even before I did, thanks to Pam Woodall, the brilliant economics editor who really may have been the first commentator to identify the global phenomenon. Housing bubble stories and op-eds regularly appeared in newspapers like, well, The New York Times. But most people weren't reading the financial press (or this blog) in 2005, and so when they discover that Paul Krugman was writing about the housing bubble way back then, it seems like amazing foresight.
Meanwhile, today I stumbled across another example of Paul Krugman's "foresight", via David Henderson. Chris Alden, a co-founder of Red Herring, blogs about an article Krugman wrote for them back in the 1990s:
He went on to make some specific predictions, all of which were either mostly or completely wrong:
"Productivity will drop sharply this year."
Nope - didn't happen. In fact productivity continued to improve, as this chart shows:
"Inflation will be back. ...In 1999 inflation will probably be more than 3 percent; with only moderate bad luck--say, a drop in the dollar--it could easily top 4 percent."
"Within two or three years, the current mood of American triumphalism--our belief that we have pulled economically and technologically ahead of the rest of the world--will evaporate."
Nope -- that didn't happen, either. Though September 11th, which happened more than three years after this article, and the Lehman Brother's collapse, which happened more than 10 years after this article was written, have certainly reduced American triumphalism. Here is where I think Krugman may have been the most right, albeit it way too early.
"The growth of the Internet will slow drastically, as the flaw in 'Metcalfe's law'--which states that the number of potential connections in a network is proportional to the square of the number of participants--becomes apparent: most people have nothing to say to each other!
By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."
"As the rate of technological change in computing slows, the number of jobs for IT specialists will decelerate, then actually turn down; ten years from now, the phrase information economy will sound silly."
"Sometime in the next 20 years, maybe sooner, there will be another '70s-style raw-material crunch: a disruption of oil supplies, a sharp run-up in agricultural prices, or both."
Meh. While have seen oil prices spike (although they have yet to reach the annual peak we saw in 1980), this was not due to a crunch or disruption or running out of oil) but rather growth in demand.
I'm inclined to be more charitable than Alden on a couple of these, but there's no question that Krugman got some things really, really wrong.
But it doesn't follow that Krugman is an idiot who should get no respect--any more than calling the housing bubble made him an infallible genius. Krugman remains a giant intellect who is well worth reading on virtually any economic topic. He is also capable of being badly wrong about things.
You often hear people complain that pundits or analysts aren't punished for getting things wrong. But this is why they aren't: everyone gets things wrong. The question "How can you expect us to listen to Pundit Y when he got everything wrong, and our guy called things correctly" only reveals that the person asking it has managed to forget all the blunders "our guy" made.
What pundits give you is not a perfect map of the future--the only people who succeed in that are characters in historical novels written by an author who already knows what happened. What's important is their thought process--do they point you to arguments you hadn't considered? Do they find data you ought to know about? Do they force you to challenge your own decisions?
Paul Krugman succeeds on that score, even if his crystal ball is a little cloudy.
President-elect Donald Trump has committed a sharp breach of protocol—one that underscores just how weird some important protocols are.
Updated on December 2 at 7:49 p.m.
It’s hardly remembered now, having been overshadowed a few months later on September 11, but the George W. Bush administration’s first foreign-policy crisis came in the South China Sea. On April 1, 2001, a U.S. Navy surveillance plane collided with a Chinese jet near Hainan Island. The pilot of the Chinese jet was killed, and the American plane was forced to land and its crew was held hostage for 11 days, until a diplomatic agreement was worked out. Sino-American relations remained tense for some time.
Unlike Bush, Donald Trump didn’t need to wait to be inaugurated to set off a crisis in the relationship. He managed that on Friday, with a phone call to the president of Taiwan, Tsai Ing-wen. It’s a sharp breach with protocol, but it’s also just the sort that underscores how weird and incomprehensible some important protocols are.
The Daily Show host was measured, respectful, and challenging in his 26-minute conversation with TheBlaze pundit Tomi Lahren.
Tomi Lahren, the 24-year-old host of Tomi on the conservative cable network TheBlaze, feels like a pundit created by a computer algorithm, someone who primarily exists to say something provocative enough to jump to the top of a Facebook feed. She’s called the Black Lives Matter movement “the new KKK,” partly blamed the 2015 Chattanooga shootings on President Obama’s “Muslim sensitivity,” and declared Colin Kaepernick a “whiny, indulgent, attention-seeking cry-baby.” At a time when such charged political rhetoric feels increasingly like the norm, Lahren stands at one end of a widening gulf—which made her appearance on The Daily Show with Trevor Noah Wednesday night all the more fascinating.
In his first year at The Daily Show, Noah has struggled to distinguish himself in an outrage-driven late-night universe. He has sometimes seemed too flip about the failures of the country’s news media, something his predecessor Jon Stewart made a perennial target. Noah’s 26-minute conversation with Lahren, though, posted in its entirety online, set the kind of tone that Stewart frequently called for throughout his tenure. The segment never turned into a screaming match, but it also avoided platitudes and small-talk. Lahren was unapologetic about her online bombast and leaned into arguments that drew gasps and boos from Noah’s audience, but the host remained steadfastly evenhanded throughout. If Noah was looking for a specific episodethat would help him break out in his crowded field, he may have finally found it.
A professor of cognitive science argues that the world is nothing like the one we experience through our senses.
As we go about our daily lives, we tend to assume that our perceptions—sights, sounds, textures, tastes—are an accurate portrayal of the real world. Sure, when we stop and think about it—or when we find ourselves fooled by a perceptual illusion—we realize with a jolt that what we perceive is never the world directly, but rather our brain’s best guess at what that world is like, a kind of internal simulation of an external reality. Still, we bank on the fact that our simulation is a reasonably decent one. If it wasn’t, wouldn’t evolution have weeded us out by now? The true reality might be forever beyond our reach, but surely our senses give us at least an inkling of what it’s really like.
A hotly contested, supposedly ancient manuscript suggests Christ was married. But believing its origin story—a real-life Da Vinci Code, involving a Harvard professor, a onetime Florida pornographer, and an escape from East Germany—requires a big leap of faith.
On a humid afternoon this past November, I pulled off Interstate 75 into a stretch of Florida pine forest tangled with runaway vines. My GPS was homing in on the house of a man I thought might hold the master key to one of the strangest scholarly mysteries in recent decades: a 1,300-year-old scrap of papyrus that bore the phrase “Jesus said to them, My wife.” The fragment, written in the ancient language of Coptic, had set off shock waves when an eminent Harvard historian of early Christianity, Karen L. King, presented it in September 2012 at a conference in Rome.
Never before had an ancient manuscript alluded to Jesus’s being married. The papyrus’s lines were incomplete, but they seemed to describe a dialogue between Jesus and the apostles over whether his “wife”—possibly Mary Magdalene—was “worthy” of discipleship. Its main point, King argued, was that “women who are wives and mothers can be Jesus’s disciples.” She thought the passage likely figured into ancient debates over whether “marriage or celibacy [was] the ideal mode of Christian life” and, ultimately, whether a person could be both sexual and holy.
A single dose of magic mushrooms can make people with severe anxiety and depression better for months, according to a landmark pair of new studies.
The doom hung like an anvil over her head. In 2012, a few years after Carol Vincent was diagnosed with non-Hodgkin lymphoma, she was waiting to see whether her cancer would progress enough to require chemotherapy or radiation. The disease had already done a number on her, inflating lymph nodes on her chin, collar bones, and groin. She battled her symptoms while running her own marketing business. To top it all off, she was going through menopause.
“Life is just pointless stress, and then you die,” she thought. “All I’m doing is sitting here waiting for all this shit to happen.”
When one day at an intersection she mulled whether it would be so bad to get hit by a car, she realized her mental health was almost as depleted as her physical state.
The country has become repressive in a way that it has not been since the Cultural Revolution. What does its darkening political climate—and growing belligerence—mean for the United States?
What if China is going bad? Since early last year I have been asking people inside and outside China versions of this question. By “bad” I don’t mean morally. Moral and ethical factors obviously matter in foreign policy, but I’m talking about something different.
Nor is the question mainly about economics, although for China the short-term stability and long-term improvement of jobs, wages, and living standards are fundamental to the government’s survival. Under China’s single-party Communist arrangement, sustained economic failure would naturally raise questions about the system as a whole, as it did in the Soviet Union. True, modern China’s economic performance even during its slowdowns is like the Soviet Union’s during its booms. But the absence of a political outlet for dissatisfaction is similar.
At the time of this writing, the Powerball jackpot is up to $1.5 billion. The cash grand prize is estimated at $930 million.
In a Powerball draw, five white balls are drawn from a drum with 69 balls and one red ball is drawn from a drum with 26 balls. If you match all six numbers, you win the jackpot. If you match only some of the numbers, you win a smaller fixed prize.
At $2 for each ticket, then, it would be possible to buy every possible ticket for $584,402,676. As a journalist, I don’t have that much money sitting around, but either a consortium of a few million Americans or a large and wealthy institution like a bank could conceivably assemble that level of cash.
Defending the liberal project is a Sisyphean task in part because successfully inculcating liberal norms leads to habits that weaken the ability to sustain them.
In the Western world, the percentage of people who say that it is essential to live in a democracy is in precipitous decline. In the United States, only 19 percent of millennials agree that it would be illegitimate for the military to take control of government. The president-elect routinely speculates about authoritarian policies, like stripping citizenship from those who burn the American flag in protest.
During a bygone crisis in global politics, when the liberal order was under sustained attack, Friedrich Hayek published this diagnosis of the challenge before liberals:
If old truths are to retain their hold on men’s minds, they must be restated in the language and concepts of successive generations. What at one time are their most effective expressions gradually become so worn with use that they cease to carry a definite meaning. The underlying ideas may be as valid as ever, but the words, even when they refer to problems that are still with us, no longer convey the same conviction; the arguments do not move in a context familiar to us; and they rarely give us direct answers to the questions we are asking. This may be inevitable because no statement of an ideal that is likely to sway men’s minds can be complete: it must be adapted to a given climate of opinion, presuppose much that is accepted by all men of the time, and illustrate general principles in terms of issues with which they are concerned.
“A typical person is more than five times as likely to die in an extinction event as in a car crash,” says a new report.
Editor’s note: An earlier version of this story presented an economic modeling assumption—the .01 chance of human extinction per year—as a vetted scholarly estimate. Following a correction from the Global Priorities Project, the text below has been updated.
Nuclear war. Climate change. Pandemics that kill tens of millions.
These are the most viable threats to globally organized civilization. They’re the stuff of nightmares and blockbusters—but unlike sea monsters or zombie viruses, they’re real, part of the calculus that political leaders consider everyday. A new report from the U.K.-based Global Challenges Foundation urges us to take them seriously.
The nonprofit began its annual report on “global catastrophic risk” with a startling provocation: If figures often used to compute human extinction risk are correct, the average American is more than five times likelier to die during a human-extinction event than in a car crash.
A few weeks ago, I was trying to call Cuba. I got an error message—which, okay, international telephone codes are long and my fingers are clumsy—but the phone oddly started dialing again before I could hang up. A voice answered. It had a British accent and it was reading: “...the moon was shining brightly. The Martians had taken away the excavating-machine…”
Apparently, I had somehow called into an audiobook of The War of the Worlds. Suspicious of my clumsy fingers, I double-checked the number. It was correct (weird), but I tried the number again, figuring that at worst, I’d learn what happened after the Martians took away the excavating machine. This time, I got the initial error message and the call disconnected. No Martians.