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.
On Tuesday, the late-night host once again devoted his show to the politics of American health care. This time, though, he offered indignation rather than tears.
“By the way, before you post a nasty Facebook message saying I’m politicizing my son’s health problems, I want you to know: I am politicizing my son’s health problems.”
That was Jimmy Kimmel on Tuesday evening, in a monologue reacting to the introduction of Graham-Cassidy, the (latest) bill that seeks to replace the Affordable Care Act. Kimmel had talked about health care on his show before, in May—when, after his newborn son had undergone open-heart surgery to repair the damage of a congenital heart defect, he delivered a tearfully personal monologue sharing the experience of going through that—and acknowledging that he and his family were lucky: They could afford the surgery, whatever it might cost. Kimmel concluded his speech by, yes, politicizing his son’s health problems: He emphasized how important it is for lower- and middle-class families to have comprehensive insurance coverage, with protections for people with preexisting conditions. “No parent,” he said, speaking through tears, “should ever have to decide if they can afford to save their child’s life. It shouldn’t happen.”
Even Iran, with its abysmal human-rights record, feels comfortable criticizing the U.S.
In his sovereignty-centric speech Tuesday to the UN General Assembly, President Donald Trump threatened to “totally destroy North Korea”; called Iran “a corrupt dictatorship” whose “chief exports are violence, bloodshed, and chaos”; and said Venezuela’s government “has inflicted terrible pain and suffering on the good people of that country.”
The remarks have prompted the expected reactions from Iran, whose foreign minister called it an “ignorant hate speech [that] belongs in medieval times,” and Venezuela’s foreign minister, who countered: “Trump is not the president of the world ... he cannot even manage his own government.” North Korea, whose nuclear-weapons and missile programs have raised tensions with its neighbors and the U.S., is yet to respond.
The foundation of Donald Trump’s presidency is the negation of Barack Obama’s legacy.
It is insufficient to statethe obvious of Donald Trump: that he is a white man who would not be president were it not for this fact. With one immediate exception, Trump’s predecessors made their way to high office through the passive power of whiteness—that bloody heirloom which cannot ensure mastery of all events but can conjure a tailwind for most of them. Land theft and human plunder cleared the grounds for Trump’s forefathers and barred others from it. Once upon the field, these men became soldiers, statesmen, and scholars; held court in Paris; presided at Princeton; advanced into the Wilderness and then into the White House. Their individual triumphs made this exclusive party seem above America’s founding sins, and it was forgotten that the former was in fact bound to the latter, that all their victories had transpired on cleared grounds. No such elegant detachment can be attributed to Donald Trump—a president who, more than any other, has made the awful inheritance explicit.
Its faith-based 12-step program dominates treatment in the United States. But researchers have debunked central tenets of AA doctrine and found dozens of other treatments more effective.
J.G. is a lawyer in his early 30s. He’s a fast talker and has the lean, sinewy build of a distance runner. His choice of profession seems preordained, as he speaks in fully formed paragraphs, his thoughts organized by topic sentences. He’s also a worrier—a big one—who for years used alcohol to soothe his anxiety.
J.G. started drinking at 15, when he and a friend experimented in his parents’ liquor cabinet. He favored gin and whiskey but drank whatever he thought his parents would miss the least. He discovered beer, too, and loved the earthy, bitter taste on his tongue when he took his first cold sip.
His drinking increased through college and into law school. He could, and occasionally did, pull back, going cold turkey for weeks at a time. But nothing quieted his anxious mind like booze, and when he didn’t drink, he didn’t sleep. After four or six weeks dry, he’d be back at the liquor store.
The meaning of Trump’s fire and fury foreign policy.
Above all else, President Donald Trump wants the world to see him as strong. He has repeatedly described himself as “militaristic,” and his cabinet as a group of “killers.” He relishes saying the supposedly unsayable. When he spoke at the UN General Assembly yesterday, he surely wanted his listeners to be awed by his toughness. Better, as Machiavelli said, to be feared than loved.
Trump’s team loaded his speech with harsh words and phrases. He promised to destroy North Korea if attacked. He called the Iran nuclear deal an embarrassment. He rejected globalism and spoke at length about the benefits of sovereignty, nationalism, and patriotism.
But when one moves beyond the image Trump tries to project and looks at the consequences of his words, things look quite different. His UN speech was one of the least effective, weakest, and indecisive ever given by an American president. It’s not that it failed against some arbitrary standard set by the foreign-policy establishment he despises. It failed on its own terms. And how it failed tells us something important about where his foreign policy is headed.
More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.
One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”
Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”
Jeffrey Gerrish’s decision to cast a ballot in Virginia isn’t so much a gotcha on him as it is on the president’s voter-fraud commission.
Jeffrey Gerrish made a mistake. Not a big one, although he did break the law. But it’s a mistake many people make, and for the most part, they aren’t called out by the Senate Finance Committee and in the pages of The New York Times.
Most of the people who make the error, however, are not nominees of a president who has alleged that there were 3 to 5 million fraudulent votes cast in the 2016 election, or who empaneled a commission to consider voter fraud that is on a dubious hunt to try to validate that wild, unsubstantiated claim. Jeffrey Gerrish, however, is President Trump’s nominee to be deputy U.S. trade representative, so it happens that investigators realized he cast his vote in the 2016 election in Virginia, even though he had moved to Maryland—a far less competitive state in national elections.
“If the world’s major powers can’t agree on what the UN is for, what does that mean for its future?”
Since the Second World War, American presidents have repeatedly gone before the United Nations General Assembly and made a similar argument: The United States has national interests just like any other country, but in the modern era those interests are increasingly international in scope and shared by people around the world, requiring more of the multilateral cooperation that the UN was founded to foster.
John F. Kennedy argued that nuclear weapons necessitated “one world and one human race, with one common destiny” guarded by one “world security system,” since “absolute sovereignty no longer assures us of absolute security.” Richard Nixon spoke of a “world interest” in reducing economic inequality, protecting the environment, and upholding international law, declaring that the “profoundest national interest of our time” is the “preservation of peace” through international structures like the UN. In rejecting tribalism and the walling-off of nations, Barack Obama asserted that “giving up some freedom of action—not giving up our ability to protect ourselves or pursue our core interests, but binding ourselves to international rules over the long term—enhances our security.” These presidents practiced what they preached to varying degrees, and there’s long been a debate in the United States about the extent to which America’s sovereign powers should be ceded to international organizations, but in broad strokes the case for global engagement was consistent.
As Trump considers military options, he’s drawing unenforceable red lines.
Speaking before the UN General Assembly today, President Donald Trump announced that, unless North Korea gives up its nuclear weapons and ballistic missile programs, “the United States will have no choice but to totally destroy” the country. He sounded almost excited as he threatened, “Rocket Man is on a suicide mission for himself and for his regime.”
North Korea is a serious problem, and not one of Trump’s making—the last four American presidents failed to impede North Korea’s progress towards a nuclear weapon. President George H.W. Bush took unilateral action, removing U.S. nuclear weapons and reducing America’s troop levels in the region, hoping to incentivize good behavior; Presidents Bill Clinton and George W. Bush tried to negotiate restrictions; President Barack Obama mostly averted his eyes. North Korea defied them all.
Donald Trump used his first address at the United Nations to redefine the idea of sovereignty.
Donald Trump’s first speech to the United Nations can best be understood as a response to his predecessor’s final one. On September 20, 2016, Barack Obama told the UN General Assembly that “at this moment we all face a choice. We can choose to press forward with a better model of cooperation and integration. Or we can retreat into a world sharply divided, and ultimately in conflict, along age-old lines of nation and tribe and race and religion.”
Three hundred and sixty-four days later, Trump delivered America’s answer: Option number two. His speech on Tuesday turned Obama’s on its head. Obama focused on overcoming the various challenges—poverty, economic dislocation, bigotry, extremism—that impede global “integration,” a term he used nine times. Trump didn’t use the term once. Obama used the word “international” 14 times, always positively (“international norms,” “international cooperation,” “international rules,” “international community”). Trump used it three times, in each case negatively (“unaccountable international tribunals,” “international criminal networks,” “the assassination of the dictator's brother using banned nerve agents in an international airport”) Obama warned of a world “sharply divided… along age-old lines of nation and tribe and race and religion.” Trump replied by praising “sovereignty” or invoking “sovereign” no fewer than 19 times. And while he didn’t explicitly defend divisions of “tribe and race and religion,” he talked about the importance of nations “preserving the cultures,” which is a more polite way of saying the same thing.