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.
Invented centuries ago in France, the bidet has never taken off in the States. That might be changing.
“It’s been completely Americanized!” my host declares proudly. “The bidet is gone!” In my time as a travel editor, this scenario has become common when touring improvements to hotels and resorts around the world. My heart sinks when I hear it. To me, this doesn’t feel like progress, but prejudice.
Americans seem especially baffled by these basins. Even seasoned American travelers are unsure of their purpose: One globe-trotter asked me, “Why do the bathrooms in this hotel have both toilets and urinals?” And even if they understand the bidet’s function, Americans often fail to see its appeal. Attempts to popularize the bidet in the United States have failed before, but recent efforts continue—and perhaps they might even succeed in bringing this Old World device to new backsides.
As the Trump presidency approaches a troubling tipping point, it’s time to find the right term for what’s happening to democracy.
Here is something that, even on its own, is astonishing: The president of the United States demanded the firing of the former FBI deputy director, a career civil servant, after tormenting him both publicly and privately—and it worked.
The American public still doesn’t know in any detail what Andrew McCabe, who was dismissed late Friday night, is supposed to have done. But citizens can see exactly what Donald Trump did to McCabe. And the president’s actions are corroding the independence that a healthy constitutional democracy needs in its law enforcement and intelligence apparatus.
McCabe’s firing is part of a pattern. It follows the summary removal of the previous FBI director and comes amid Trump’s repeated threats to fire the attorney general, the deputy attorney, and the special counsel who is investigating him and his associates. McCabe’s ouster unfolded against a chaotic political backdrop which includes Trump’s repeated calls for investigations of his political opponents, demands of loyalty from senior law enforcement officials, and declarations that the job of those officials is to protect him from investigation.
Congressional Republicans and conservative pundits had the chance to signal Trump his attacks on law enforcement are unacceptable—but they sent the opposite message.
President Trump raged at his TV on Sunday morning. And yet on balance, he had a pretty good weekend. He got a measure of revenge upon the hated FBI, firing former Deputy Director Andrew McCabe two days before his pension vested. He successfully coerced his balky attorney general, Jeff Sessions, into speeding up the FBI’s processes to enable the firing before McCabe’s retirement date.
Beyond this vindictive fun for the president, he achieved something politically important. The Trump administration is offering a not very convincing story about the McCabe firing. It is insisting that the decision was taken internally by the Department of Justice, and that the president’s repeated and emphatic demands—public and private—had nothing whatsoever to do with it.
How evangelicals, once culturally confident, became an anxious minority seeking political protection from the least traditionally religious president in living memory
One of the most extraordinary things about our current politics—really, one of the most extraordinary developments of recent political history—is the loyal adherence of religious conservatives to Donald Trump. The president won four-fifths of the votes of white evangelical Christians. This was a higher level of support than either Ronald Reagan or George W. Bush, an outspoken evangelical himself, ever received.
Trump’s background and beliefs could hardly be more incompatible with traditional Christian models of life and leadership. Trump’s past political stances (he once supported the right to partial-birth abortion), his character (he has bragged about sexually assaulting women), and even his language (he introduced the words pussy and shithole into presidential discourse) would more naturally lead religious conservatives toward exorcism than alliance. This is a man who has cruelly publicized his infidelities, made disturbing sexual comments about his elder daughter, and boasted about the size of his penis on the debate stage. His lawyer reportedly arranged a $130,000 payment to a porn star to dissuade her from disclosing an alleged affair. Yet religious conservatives who once blanched at PG-13 public standards now yawn at such NC-17 maneuvers. We are a long way from The Book of Virtues.
Although the former secretary of state’s contentious relationship with the president didn’t help matters, Tillerson’s management style left a department in disarray.
Rex Tillerson is hardly the first person to be targeted in a tweet from Donald Trump, but on Tuesday morning, he became the first Cabinet official to be fired by one. It was an ignominious end to Tillerson’s 13-month stint as secretary of state, a tenure that would have been undistinguished if it weren’t so entirely destructive.
Compared with expectations for other members of Trump’s Cabinet, the disastrous results of Tillerson’s time in office are somewhat surprising. Unlike the EPA’s Scott Pruitt, Tillerson did not have obvious antipathy for the department he headed; unlike HUD’s Ben Carson, he had professional experience that was relevant to the job; and unlike Education’s Betsy DeVos, his confirmation hearing wasn't a disaster.
The first female speaker of the House has become the most effective congressional leader of modern times—and, not coincidentally, the most vilified.
Last May, TheWashington Post’s James Hohmann noted “an uncovered dynamic” that helped explain the GOP’s failure to repeal Obamacare. Three current Democratic House members had opposed the Affordable Care Act when it first passed. Twelve Democratic House members represent districts that Donald Trump won. Yet none voted for repeal. The “uncovered dynamic,” Hohmann suggested, was Nancy Pelosi’s skill at keeping her party in line.
She’s been keeping it in line for more than a decade. In 2005, George W. Bush launched his second presidential term with an aggressive push to partially privatize Social Security. For nine months, Republicans demanded that Democrats admit the retirement system was in crisis and offer their own program to change it. Pelosi refused. Democratic members of Congress hosted more than 1,000 town-hall meetings to rally opposition to privatization. That fall, Republicans backed down, and Bush’s second term never recovered.
UMBC’s big win wasn’t a miracle; it was a well-executed plan.
People now know the University of Maryland, Baltimore County, as the ultimate Cinderella, an overnight social media sensation, the team that magically emerged as the first No. 16 seed to defeat a No. 1 seed in the history of the NCAA Men’s Basketball Tournament. But our story is far less fairy tale than it is classic American dream. Our magic comes from questioning expectations, putting in the hard work, and staying focused.
The nation saw the results on the court Friday night. My colleagues, students, alumni, and their families came to the game knowing the team would give the game their all. Our men’s basketball team embodies our definition of grit. We knew the players were bringing both passion and preparation to the game. We knew that they would listen to the guidance of head coach Ryan Odom, support one another, give their individual best, and get tougher and tougher as the game went on.
Scholars have been sounding the alarm about data-harvesting firms for nearly a decade. The latest Cambridge Analytica scandal shows it may be too late to stop them.
On Friday night, Facebook suspended the account of Cambridge Analytica, the political-data company backed by the billionaire Robert Mercer that consulted on both the Brexit and Trump campaigns.
The action came just before The Guardian and The New York Timesdropped major reports in which the whistle-blower Christopher Wylie alleged that Cambridge Analytica had used data that an academic had allegedly improperly exfiltrated from the social network. These new stories, backed by Wylie’s account and internal documents, followed years of reporting by The Guardianand The Intercept about the possible problem.
The details could seem Byzantine. Aleksandr Kogan, then a Cambridge academic, founded a company, Global Science Research, and immediately took on a major client, Strategic Communication Laboratories, which eventually gave birth to Cambridge Analytica. (Steve Bannon, an adviser to the company and a former senior adviser to Trump, reportedly picked the name.)
A new six-part Netflix documentary is a stunning dive into a utopian religious community in Oregon that descended into darkness.
To describe Wild Wild Country as jaw-dropping is to understate the number of times my mouth gaped while watching the series, a six-part Netflix documentary about a religious community in Oregon in the 1980s. It’s ostensibly the story of how a group led by the dynamic Bhagwan Shree Rajneesh purchased 64,000 acres of land in central Oregon in a bid to build its own utopian city. But, as the series immediately reveals, the narrative becomes darker and stranger than you might ever imagine. It’s a tale that mines the weirdness of the counterculture in the ’70s and ’80s, the age-old conflict between rural Americans and free love–preaching cityfolk, and the emotional vacuum that compels people to interpret a bearded mystic as something akin to a god.
As an admiral I helped run the most powerful military on Earth, but I couldn't save my son from the scourge of opioid addiction.
The last photograph of my son Jonathan was taken at the end of a new-student barbecue on the campus green at the University of Denver. It was one of those bittersweet transitional moments. We were feeling the combination of apprehension and optimism that every parent feels when dropping off a kid at college for the first time, which was amplified by the fact that we were coming off a rocky 16 months with our son.
We had moved him into his dormitory room only that morning. I remember how sharp he looked in the outfit he had selected, and his eagerness to start class and make new friends. We were happy, relieved, and, knowing what we thought he had overcome, proud. At lunch, I asked Jonathan whether he thought he was ready for the coming school year. “Dad, I can handle it as long as I continue my recovery,” he said. “Everything flows from that.”