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 Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
Some conservatives are defying expectation and backing the Vermont senator.
When Tarie MacMillan switched on her television in August to watch the first Republican presidential debate, she expected to decide which candidate to support.
But MacMillan, a 65-year-old Florida resident, was disappointed. “I looked at the stage and there was nobody out there who I really liked. It just seemed like a showcase for Trump and his ridiculous comments,” she recalled. “It was laughable, and scary, and a real turning point.”
So she decided to back Bernie Sanders, the self-described “Democratic socialist” challenging Hillary Clinton. MacMillan was a lifelong Republican voter until a few weeks ago when she switched her party affiliation to support the Vermont senator in the primary. It will be the first time she’s ever voted for a Democrat.
If you want to annoy a scientist, say that science isn’t so different from religion. When Ben Carson was challenged about his claim that Darwin was encouraged by the devil, he replied, “I’m not going to denigrate you because of your faith, and you shouldn’t denigrate me for mine.” When the literary theorist Stanley Fish chastised atheists such as Richard Dawkins, he wrote, “Science requires faith too before it can have reasons,” and described those who don't accept evolution as belonging to “a different faith community.”
Scientists are annoyed by these statements because they suggest that science and religion share a certain epistemological status. And, indeed, many humanists and theologians insist that there are multiple ways of knowing, and that religious narratives exist alongside scientific ones, and can even supersede them.
The Speaker’s reformist ambitions fall victim to his need to manage the media cycle.
Before taking the speakership last month, Paul Ryan made a promise to fix a “broken” House of Representatives and return the chamber to “regular order.” Eschewing the centralized authority of his predecessor, John Boehner, Ryan promised to put legislative power back in the hands of rank-and-file members—something key House constituencies had been clamoring for.
Under regular order, House bills go through an often-lengthy process from subcommittee to the floor; they are vetted, debated, and amended before receiving a final up-or-down vote. A return to regular order is one of the few areas with serioussupport from both ultraconservative Freedom Caucus members and progressive reformers in the House. After all, legislators on both sides of the aisle want a chance to be heard, offer amendments, and share expertise. Ryan concurred: “The committees should retake the lead in drafting all major legislation. When we rush to pass bills, a lot of us do not understand, we are not doing our job.”
Nobody’s focused on winning the peace. That’s a big problem.
In August 1941, Winston Churchill and Franklin Roosevelt met off the coast of Newfoundland to outline a shared vision for the post-World War II era. The British prime minister was so thrilled to see the American president that, in the words of one official, “You’d have thought he was being carried up into the heavens to meet God.” The two countries issued the Atlantic Charter, which sought “a better future for the world” through the principles of self-determination, collective security, and free trade. The United States hadn’t even entered the war yet, but it was already focused on winning the peace. The endgame was not just the defeat of the Axis powers, but also the creation of a stable global order, in which World War II would be the last world war.
Prosecutors indict a Chicago police officer for first-degree murder and release a “deeply disturbing” video of the shooting.
Updated at 1:25 a.m on November 25.
The city of Chicago released the dashcam footage of Laquan McDonald's final moments Tuesday evening, one day earlier than they had originally announced. City officials gave journalists a link to a third-party site where they would have a one-hour window to download the six-minute and fifty-three-second video clip. (City officials bizarrely cited “limited bandwidth” as the reason for for the time limit.) The website crashed almost immediately, but DNAinfo Chicago uploaded the entire video to YouTube.
The clip begins with a 45-second disclaimer then shows the police vehicle on which the dashboard camera was mounted travel to the scene. Five minutes and fifteen seconds pass before McDonald first appears, walking in the middle of a mostly empty city street near two other police vehicles. McDonald is walking at a brisk pace while carrying something in his left hand. (Police reports say it was a knife.)
In the name of emotional well-being, college students are increasingly demanding protection from words and ideas they don’t like. Here’s why that’s disastrous for education—and mental health.
Something strange is happening at America’s colleges and universities. A movement is arising, undirected and driven largely by students, to scrub campuses clean of words, ideas, and subjects that might cause discomfort or give offense. Last December, Jeannie Suk wrote in an online article for The New Yorker about law students asking her fellow professors at Harvard not to teach rape law—or, in one case, even use the word violate (as in “that violates the law”) lest it cause students distress. In February, Laura Kipnis, a professor at Northwestern University, wrote an essay in The Chronicle of Higher Education describing a new campus politics of sexual paranoia—and was then subjected to a long investigation after students who were offended by the article and by a tweet she’d sent filed Title IX complaints against her. In June, a professor protecting himself with a pseudonym wrote an essay for Vox describing how gingerly he now has to teach. “I’m a Liberal Professor, and My Liberal Students Terrify Me,” the headline said. A number of popular comedians, including Chris Rock, have stopped performing on college campuses (see Caitlin Flanagan’s article in this month’s issue). Jerry Seinfeld and Bill Maher have publicly condemned the oversensitivity of college students, saying too many of them can’t take a joke.
Why trying to think like the Islamic State is so hard—and risky.
In killing 130 civilians in Paris—the worst such attack in France since World War II—ISIS has forced us to contend, once again, with the question of the “rationality” of self-professed ideologues. Since it wrested the world’s attention with its capture of Iraq’s second-largest city in June 2014, the extremist group has prioritized state-building over fighting far enemies abroad. This is what distinguished ISIS: It wasn’t just, or even primarily, a terrorist organization. It had an unusually pronounced interest in governance. As Yale University’s Andrew March and Mara Revkin lay out in considerable detail, the group focused its energy on developing fairly elaborate institutional structures in the territory it controlled within Iraq and Syria. ISIS wasn’t simply making things up as it went along. It may have been mad, but there was a method to the madness.
Why are so many kids with bright prospects killing themselves in Palo Alto?
The air shrieks, and life stops. First, from far away, comes a high whine like angry insects swarming, and then a trampling, like a herd moving through. The kids on their bikes who pass by the Caltrain crossing are eager to get home from school, but they know the drill. Brake. Wait for the train to pass. Five cars, double-decker, tearing past at 50 miles an hour. Too fast to see the faces of the Silicon Valley commuters on board, only a long silver thing with black teeth. A Caltrain coming into a station slows, invites you in. But a Caltrain at a crossing registers more like an ambulance, warning you fiercely out of its way.
The kids wait until the passing train forces a gust you can feel on your skin. The alarms ring and the red lights flash for a few seconds more, just in case. Then the gate lifts up, signaling that it’s safe to cross. All at once life revives: a rush of bikes, skateboards, helmets, backpacks, basketball shorts, boisterous conversation. “Ew, how old is that gum?” “The quiz is next week, dipshit.” On the road, a minivan makes a left a little too fast—nothing ominous, just a mom late for pickup. The air is again still, like it usually is in spring in Palo Alto. A woodpecker does its work nearby. A bee goes in search of jasmine, stinging no one.
Just in time for this month’s climate-change talks in Paris
Where were you on November 11, 2015?
It was only a couple weeks ago, but already you may not remember. It was a humming but unexceptional news day. In the United States, protestors at the University of Missouri had just successfully ousted their president. Marco Rubio had done fine at the fourth Republican presidential debate, held the night before. And much of Europe and the English-speaking world were honoring Armistice Day.
In two or 10 years’ time, we might recognize that Wednesday as world-historic. On November 11, the Mauna Loa Observatory in Hawaii—which produces some of the most accurate and longest-running measurements of atmospheric carbon in the world—recorded that, of every million molecules in the atmosphere, 399.68 were carbon dioxide. On the following day, November 12, it measured 401.64 parts per million of carbon dioxide. Since then, its measurement of the amount of carbon in the atmosphere has waxed and waned, but always stayed above 400 ppm. (On Monday, they read 400.15 ppm.)