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.
The comparatively less flashy, less spirited former First Kid managed to show her mom’s softer side at the DNC on Thursday.
Yes, yes, yes. Chelsea Clinton is not the most charismatic orator—as the Twittersphere was happy to point out during her brief address on Thursday night. She is like her mother that way. There’s something not quite natural about her self-presentation. She’s not stilted, exactly. But she can come across as too cautious, too reserved, too conscious of other people’s eyes upon her.
But, let’s face it, as the lead-in to Hillary’s big nominating speech, a little bit of boring was called for. Unlike some of this convention’s high-wattage speakers, there was zero chance Chelsea was going to upstage Hillary with a barnburner or tear-jerker. Chelsea wasn’t there to pump up the crowd. Her role was to comfort, to explain, to cajole, with an eye toward giving Americans a glimpse of her mother’s softer side.
In her acceptance speech, the Democratic nominee took on her Republican rival by throwing Donald Trump’s own words back at him.
The unicorn of American politics, the “real Hillary Clinton”—the Hillary Clinton I’ve known for nearly 30 years—that Hillary Clinton likes to wear low-heeled shoes to a butt-kicking.
“A man you can bait with a tweet is not a man we can trust with nuclear weapons,” she said of her Republican rival, Donald Trump, while accepting the Democratic presidential nomination, the first woman in U.S. history to head a major-party ticket.
It was a sound bite for the ages, searing and on point.
“Do you really think Donald Trump has the temperament to be commander in chief?” she continued. “Donald Trump can’t even handle the rough and tumble of a presidential campaign. He loses his cool at the slightest provocation. Imagine, if you dare, imagine him in the Oval Office facing a crisis.”
The father of a Muslim American who died in Iraq confronts Donald Trump.
Khizr Khan began his speech at the Democratic National Convention on Thursday with words I wish he didn’t have to say: “Tonight we are honored to stand here as parents of Captain Humayun Khan and as patriotic American Muslims—as patriotic American Muslims with undivided loyalty to our country.”
I wish he and his wife didn’t have to stand there as the parents of a 27-year-old Army captain who was killed by suicide bombers while serving in the Iraq War. And I wish Khizr Khan hadn’t felt the need to declare his patriotism and loyalty to the United States of America. Those truths should have been self-evident.
The state of the union is not strong when an American feels compelled to clarify such things. In better times, Khizr Khan, who was born in Pakistan and moved to America from the United Arab Emirates, might have begun his speech with what he said next: “Like many immigrants, we came to this country empty-handed. We believed in American democracy—that with hard work and [the] goodness of this country, we could share in and contribute to its blessings.”
Narcissism, disagreeableness, grandiosity—a psychologist investigates how Trump’s extraordinary personality might shape his possible presidency.
In 2006, Donald Trump made plans to purchase the Menie Estate, near Aberdeen, Scotland, aiming to convert the dunes and grassland into a luxury golf resort. He and the estate’s owner, Tom Griffin, sat down to discuss the transaction at the Cock & Bull restaurant. Griffin recalls that Trump was a hard-nosed negotiator, reluctant to give in on even the tiniest details. But, as Michael D’Antonio writes in his recent biography of Trump, Never Enough, Griffin’s most vivid recollection of the evening pertains to the theatrics. It was as if the golden-haired guest sitting across the table were an actor playing a part on the London stage.
“It was Donald Trump playing Donald Trump,” Griffin observed. There was something unreal about it.
Can Hillary Clinton’s projection of steadiness resonate with an unsettled country?
PHILADELPHIA—It was a hot and stormy week at the Democratic convention, one that began with discord and ended with invocations of togetherness. “People are anxious and looking for reassurance,” Hillary Clinton, the newly anointed Democratic nominee, told a cheering convention crowd—“looking for steady leadership.”
This was the theme of speaker after speaker at the Democratic convention: steadiness, calm, shelter from the storm. The party’s stars took the stage one by one, railing against divisiveness and doomsaying and fear. They painted a picture of a new American normal: optimistic, stable, square, patriotic. A silent majority of tolerant, diverse, cosmopolitan people, hopeful and unthreatened by suspicion or difference. A transgender woman, an illegal immigrant, a Muslim veteran’s father: This, the convention asserted, is the face of a country that has been through the discombobulating wringer of social and demographic change, and come out the other side smiling and holding hands.
A church facing setbacks elsewhere finds an unlikely foothold.
At the end of 2013, in the low-slung, industrial Taiwanese city of Kaohsiung, a bevy of officials came to attend the ribbon cutting of a huge former hotel that had undergone a top-to-bottom, multimillion-dollar renovation. Speaking before the throngs of celebrants who blocked the flow of traffic, Taiwan’s deputy director of the Ministry of the Interior praised the group that funded the renovation and presented them, for the 10th year straight, with the national “Excellent Religious Group” award.
“For years you have dedicated your time and lives to anti-drug work and human- rights dissemination,” said the director, echoing praise offered by the mayor’s office and the president’s national-policy adviser.
The Fox host’s insistence that black laborers building the White House were “well-fed and had decent lodgings” fits in a long history of insisting the “peculiar institution” wasn’t so bad.
In her widely lauded speech at the Democratic National Convention on Monday, Michelle Obama reflected on the remarkable fact of her African American family living in the executive mansion. “I wake up every morning in a house that was built by slaves. And I watch my daughters, two beautiful, intelligent, black young women, playing with their dogs on the White House lawn,” she said.
On Tuesday, Fox News host Bill O’Reilly discussed the moment in his Tip of the Day. In a moment first noticed by the liberal press-tracking group Media Matters, O’Reilly said this:
As we mentioned, Talking Points Memo, Michelle Obama referenced slaves building the White House in referring to the evolution of America in a positive way. It was a positive comment. The history behind her remark is fascinating. George Washington selected the site in 1791, and as president laid the cornerstone in 1792. Washington was then running the country out of Philadelphia.
Slaves did participate in the construction of the White House. Records show about 400 payments made to slave masters between 1795 and 1801. In addition, free blacks, whites, and immigrants also worked on the massive building. There were no illegal immigrants at that time. If you could make it here, you could stay here.
In 1800, President John Adams took up residence in what was then called the Executive Mansion. It was only later on they named it the White House. But Adams was in there with Abigail, and they were still hammering nails, the construction was still going on.
Slaves that worked there were well-fed and had decent lodgings provided by the government, which stopped hiring slave labor in 1802. However, the feds did not forbid subcontractors from using slave labor. So, Michelle Obama is essentially correct in citing slaves as builders of the White House, but there were others working as well. Got it all? There will be a quiz.
Hillary Clinton accepted the Democratic nomination in Philadelphia, ratifying a promise made there 240 years before—that all are created equal.
PHILADELPHIA—“Daddy,” my daughter recently asked me, “Why are there no girl presidents? Is it because boys are stronger than girls? Because they’re smarter?”
It left me speechless.
On Thursday night, in the city where the Founders declared all men created equal, I found my answer. It’s because no major party has ever tried nominating one before.
“Tonight, we’ve reached a milestone in our nation’s march toward a more perfect union: the first time that a major party has nominated a woman for president,” Clinton said as she accepted the nomination. “Standing here as my mother’s daughter, and my daughter’s mother, I’m so happy this day has come.”
It wasn’t the theme of her speech. But it was the unspoken subtext that ran through it. And Clinton took pains to frame the achievement not as the triumph of some subset of Americans, but as a victory for all Americans. She proclaimed herself both “happy for grandmothers and little girls,” but also “happy for boys and men—because when any barrier falls in America, it clears the way for everyone.”
The Democrat promised voters she’d do her job intelligently and doggedly—and help them be the heroes of their own lives.
The Democratic convention, which culminated on Thursday night with Hillary Clinton, was inverted. Usually, supporting actors cover policy specifics and flay the opposing candidate. The nominee comes on at the end and offers a vision.
Hillary Clinton doesn’t do vision well. So, wisely, her campaign turned the paradigm on its head. The emotion, the vision, the rhetorical power came from others: from Barack Obama and Joe Biden and ordinary people like disability rights activist Anastasia Somoza; Khizr Kahn, whose son died in Afghanistan; and the families of slain police officers and victims of police violence. Clinton did what she’s good at: She talked about public policy and she proved that she’s not at all intimidated by Donald Trump.
Psychologists have long debated how flexible someone’s “true” self is.
Almost everyone has something they want to change about their personality. In 2014, a study that traced people’s goals for personality change found that the vast majority of its subjects wanted to be more extraverted, agreeable, emotionally stable, and open to new experiences. A whopping 97 percent said they wished they were more conscientious.
These desires appeared to be rooted in dissatisfaction. People wanted to become more extraverted if they weren’t happy with their sex lives, hobbies, or friendships. They wanted to become more conscientious if they were displeased with their finances or schoolwork. The findings reflect the social psychologist Roy Baumeister’s notion of “crystallization of discontent”: Once people begin to recognize larger patterns of shortcomings in their lives, he contends, they may reshuffle their core values and priorities to justify improving things.