Monday, October 10, 2011

A Beautiful Mind: Part II

Paul Krugman shows he is sinking deeper into dementia, with a series of recent editorials. First, from Friday (emphasis added).

Bear in mind, too, that experience has made it painfully clear that men in suits not only don’t have any monopoly on wisdom, they have very little wisdom to offer. When talking heads on, say, CNBC mock the protesters as unserious, remember how many serious people assured us that there was no housing bubble, that Alan Greenspan was an oracle and that budget deficits would send interest rates soaring.

Uhh, like Paul Krugman said himself:

So what? Two years ago the administration promised to run large surpluses. A year ago it said the deficit was only temporary. Now it says deficits don't matter. But we're looking at a fiscal crisis that will drive interest rates sky-high.

Now Krugman is chiming in on the Occupy Wall Street protests.

Consider first how Republican politicians have portrayed the modest-sized if growing demonstrations, which have involved some confrontations with the police — confrontations that seem to have involved a lot of police overreaction — but nothing one could call a riot. And there has in fact been nothing so far to match the behavior of Tea Party crowds in the summer of 2009.

Seattle police arrested 25 people on Wednesday as they clashed with protesters and hauled away tents. The protest continued after arrests were made.

Wednesday's showdown — in one of downtown's most popular gathering spots — began just after lunchtime, as some demonstrators refused a city order to remove the tents.

Several influential New York state lawmakers have received threatening mails saying it is “time to kill the wealthy” if they don’t renew the state’s tax surcharge on millionaires, according to reports.

“It’s time to tax the millionaires!” reads the email, according to WTEN in Albany. “If you don’t, I’m going to pay a visit with my carbine to one of those tech companies you are so proud of and shoot every spoiled Ivy League [expletive] I can find.”

These are the shocking scenes that have led some people to accuse the Occupy Wall Street protesters living rough in New York's financial district of creating unsanitary and filthy conditions.
Exclusive pictures obtained by Mail Online show one demonstrator relieving himself on a police car.
Elsewhere we found piles of stinking refuse clogging Zuccotti Park, despite the best efforts of many of the protesters to keep the area clean.

Thousands of Occupy Wall Street protesters swarmed the Brooklyn Bridge Saturday, shutting down car lanes and setting up yet another tense showdown with the NYPD.

Roughly 700 people were arrested after standing in the roadway, blocking the Brooklyn-bound lanes. Traffic in the opposite direction was slowed -- but still running after the 4 p.m. standoff.


Lonnie Bruner said...

There's no contradiction on his deficit comment. He wrote that in 2003 as they were gearing up for a big war and Bush decided not to raise taxes to pay for it; in addition, they actually CUT taxes at the same time as a war -- the first in our history. It drove the country into serious debt. So much so that on Obama's first day in office, the deficit was $1.2 trillion when CBO, as Krugman mentions, had projected 10 years of surpluses. And you know enough about economics to understand that 2003 was very different from now. Back then there was a crowding out issue if the gov't ran big deficits. Now, there isn't. We have weak demand on all fronts and are in a liquidity trap. Don't you know this? The situation has changed. But it's not surprising coming from a libertarian who thinks the same medicine should be applied to the economy at all times.

James B. said...

Whatever logic he may have for not predicting inflation in 2011 does not change the fact that he incorrectly predicted it in 2003, thus the irony of his statement.

I am always amused at CBO projections. Hmm, as long as we assume that tax revenues will continue at the inflated rates of the dotcom boom forever, and the government never increases spending, for any reason, we will always have surpluses! I am reminded of the old economist joke, "Assume a can opener."

Lonnie Bruner said...

You people have been screaming about inflation for 3 years. And it still hasn't arrived. Krugman has gone over and over this and has a model and mountains of statistics and evidence explaining it. You'd know this if you read his blog.

James B. said...

Should have said interest rates, rather than inflation. Same basic idea though. In 2003 Krugman predicted massive deficits and high interest rates, by 2007 the deficit was down to around 2% of GDP and treasuries were around 4%. Come back in 4 years and we will see if that is true.

Lonnie Bruner said...

Yes, and Krugman has admitted he was wrong about that.

"""So, what big mistakes have I made over the years? Two, I think.

The first was in the mid-1990s, when I pooh-poohed claims about a surge in US productivity growth. I saw some bad logic in the arguments the productivity enthusiasts were making, and — being the professor I am — I extrapolated that into being dismissive of everything they were saying. In fact, the productivity surge was real.

The second was circa 2003, over the Bush administration’s use of the illusion of victory in Iraq to push through more tax cuts, even though the optimistic budget projections used to justify the first round had proved completely wrong. It’s worth pointing out that the situation was not at all like the present, where I support temporary deficit spending to deal with a depressed economy; the Bushies were pushing permanent tax cuts that had nothing to do with economic stimulus, and did so at a time of war with no offsetting spending cuts (and then pushed through an unfunded expansion of Medicare too). This struck me at the time as banana-republic behavior, and still does.

However, I wrongly believed that markets would look at it the same way, and that they would lose faith in American governance, driving up interest rates on our debt. Instead, bond investors discounted the politics, and acted as if they believed that America would eventually pull itself together and start behaving responsibly. The jury’s still out on that, but clearly my short-run prediction proved wrong.

I learned from both these mistakes. In the 90s, I learned to take very seriously what people on the ground are saying about the economy, even if it isn’t well-argued. After 2003, I learned that there is a great deal of ruin in a nation — that markets give advanced countries a lot of benefit of the doubt.

So yes, I’ve been wrong. Let those who are without error cast the first stone.

Update: Just to be clear, I’m talking about professional mistakes. The other kinds of mistakes … are none of your business."""

James B. said...

Ok, settled, so on to the main subject of the post, his claim that the OWS protestors are so much better behaved than the tea partiers.

Lonnie Bruner said...

"Seattle police arrested 25 people on Wednesday as they clashed with protesters and hauled away tents. The protest continued after arrests were made."

That may have been police overreaction, maybe not. I don't know.

"Several influential New York state lawmakers have received threatening mails saying it is “time to kill the wealthy” if they don’t renew the state’s tax surcharge on millionaires, according to reports."

Do you know how many Democratic lawmakers got death threats during the height of the Tea Party rallies? Tea Baggers shouted and screamed (literally) during town hall meetings all across the country. Gabby Gifford's office got a ton of threats -- including from the leading Tea Bagger, Sarah Palin who put gun sights on here district. Some Dem offices got bricks through their windows. The threats to the Left were unprecedented. Remember when Pelosi pass healthcare reform? Tea Party people went into their office buildings and were very abusive, as well as outside on the Hill. I was there.

The article you link to about defecating on a cop car was published the evening of the same day Krugman's editorial came out. It's fair to say that he hadn't heard that when he probably wrote it the day before -- on October 9.

James B. said...

Oh please, you aren't seriously still trying to pretend that Sarah Palin was actually trying to threaten anyone, are you? You are familiar with the concept of a metaphor, right?

Lonnie Bruner said...

I don't take jokes about assassination lightly.

James B. said...

It wasn't a joke, it was a metaphor, a fairly common one. A Google search for "campaign targeting" turns up over 39 million hits. Including such violent expressions as:

SPLC and Truth Wins Out Launch Campaign Targeting Destructive ‘Conversion’ Therapy

Obama campaign targets young, old, minorities

Sexy Ad Campaign Targeting Monkeys Makes A Splash

No sane person would think that any of these, including a Palin campaign graphic targeting congressional districts, is an incitement to violence.

Lonnie Bruner said...

Well, I don't take *metaphors* about putting rifle sites images aimed at politicians lightly either. The word "target" used in those contexts you mention does not have anything to do with guns. The word in that sense has multiple meanings. A rifle site is inappropriate. Anyway, she's over.