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.
How the election looks to backers of the Republican nominee
Perhaps the hardest thing to do in contemporary American politics is to imagine how the world looks from the other side. I’ve made no secret of why, as a Republican, I oppose Donald Trump and what he stands for. But I’ve also been talking to his supporters and advisors, trying to understand how they see and hear the same things that I do, and draw such very different conclusions. What follows isn’t a transcription—it’s a synthesis of the conversations I’ve had, and the insights I’ve gleaned, presented in the voice of an imagined Trump supporter.
“You people in the Acela corridor aren’t getting it. Again. You think Donald Trump is screwing up because he keeps saying things that you find offensive or off-the-wall. But he’s not talking to you. You’re not his audience, you never were, and you never will be. He’s playing this game in a different way from anybody you’ve ever seen. And he’s winning too, in a different way from anybody you’ve ever seen.
The most personally moving, and most fundamentally patriotic, moment of the Democratic National Convention was the appearance by the bereaved parents of Army Captain Humayun Khan, and the statement about the meaning of their son’s life and death, and about the Constitution, by Mr. Khizr Khan.
After Khizr Khan spoke, politicians and commentators on most networks said they were moved, humbled, inspired, choked up. (Commentators on Fox did not say these things, because their coverage cut away from the Khans for Brit Hume and Megyn Kelly, plus a Benghazi ad.)
Not the people—the term. How generational divisions have driven down voter turnout over the last century of American politics.
Throughout the 2016 U.S. presidential election, pundits and activists have debated how to get more Millennials involved in politics, always stressing their distinctive character. But it was actually this tendency to slice up the electorate into unique generations that drove young people from politics in the first place.
In the 19th century, children, youths, and adults “mingled freely together” at rowdy campaign rallies, lured by the holy trinity of booze, barbecue, and bonfire. Older citizens introduced young people to politics, helping to drive voter turnouts to their highest levels in U.S. history. “It’s the ‘big fellow,’” observed the Republicans canvassing in pool halls and saloons in the 1880s, who does the best job getting “the ‘little fellow”’ into politics.
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.
Last night, in her overall very successful acceptance speech, Hillary Clinton said with ruthless precision about her opponent:
Ask yourself: Does Donald Trump have the temperament to be Commander-in-Chief?
Donald Trump can't even handle the rough-and-tumble of a presidential campaign.
He loses his cool at the slightest provocation. When he's gotten a tough question from a reporter. When he's challenged in a debate. When he sees a protestor at a rally.
Emphasis added, as it was in her delivery:
Imagine—if you dare, imagine—imagine him in the Oval Office facing a real crisis. A man you can bait with a tweet is not a man we can trust with nuclear weapons.
I can’t put it any better than Jackie Kennedy did after the Cuban Missile Crisis. She said that what worried President Kennedy during that very dangerous time was that a war might be started—not by big men with self-control and restraint, but by little men—the ones moved by fear and pride.
A collection of books recommended by The Atlantic’s editors and writers
The Atlantic’s editors and writers share their recommendations for summer reading—new titles, old favorites, and others in between.
By Yaa Gyasi
In her first novel, Yaa Gyasi cleverly weaves the intergenerational tale of a family through a series of short, but interrelated stories set in what’s now Ghana during the mid-18th century. The two women at the center of the novel, Effia and Esi, are half-sisters who wind up on vastly different paths. One is captured during a battle between tribes, sold, and winds up on a slave ship bound for the U.S. The other—separated from her village and married off to a British slaver—ends up living on top of the dungeons that hold her own kin and hundreds of others who would also become slaves. The novel traces the lineage of these women through the tales of their children, and their children’s children, and so on—up until the present day.
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 World Well-Being Project uses Facebook updates to correlate language with personality traits.
Do our Facebook posts reflect our true personalities? Incrementally, probably not. But in aggregate, the things we say on social media paint a fairly accurate portrait of our inner selves. A team of University of Pennsylvania scientists is using Facebook status updates to find commonalities in the words used by different ages, genders, and even psyches.
“Governments have an increased interest in measuring not just economic outcomes but other aspects of well-being,” said Andrew Schwartz, a UPenn computer scientist who works on the project. “But it's very difficult to study well-being at a large scale. It costs a lot of money to administer surveys to see how people are doing in certain areas. Social media can help with that.”
Last month, my wife and I found ourselves in a disagreement about whether or not our apartment was clean enough for guests—the type of medium-sized disagreement that likely plagues all close relationships. In the midst of it, there was a lull and, feeling exhausted all of a sudden, I got up and left the living room. In the bedroom, I immediately fell face down into the sheets. The next thing I knew it was 20 minutes later and my wife was shaking me awake. I hadn’t meant to fall asleep; I just felt so fatigued in that moment that there was nothing else I could do.
This wasn’t new for me. A few weeks earlier, I had come into conflict with an acquaintance over some money. We were exchanging tense emails while I was at my office, and I began to feel the slow oozing onset of sleep, the same tiredness that came on when, as a child, I rode in the backseat of the car on the way home from some undesired trip. A sleepiness that overtakes the body slowly but surely and feels entirely outside of your control.
Learning how to bond with my daughter, who found comfort in the familiarity of being alone, has come through understanding reactive attachment disorder.
My hands hover over the computer keyboard. They are trembling. I hold down the shift key and type the words with intention, saying each letter aloud: “R-e-a-c-t-i-v-e A-t-t-a-c-h-m-e-n-t D-i-s-o-r-d-e-r.” The words “reactive attachment disorder” are memory beads I gather into a pile and attempt to string along on a necklace.
I think back to when Judith, my neighbor who is a psychiatrist, offhandedly threw out the term the first time she met Julia. We were talking about babies who start their lives in orphanages, and she mentioned the disorder. She wasn't suggesting that my daughter Julia showed any signs, but she’d said it was a well-known problem with children who’d been adopted from Romanian orphanages in the '80s and '90s. I remember nodding my head and thinking, Shut up, Judith. We got Julia young. It shouldn't be an issue.