Some Fun With Paul Krugman Quotations
/Now that Trump-era U.S. GDP growth has reached the 4.1% level according to the Bureau of Economic Analysis, shouldn't we go back and review a few choice quotes from Official Manhattan Contrarian Worst Economics Writer Paul Krugman?
It's been a long time since I've done any Krugman-bashing. And why should we waste much of our valuable time on a guy who is so overcome with anger and invective that he has become a self-parody? The answer is, occasionally you need to compare his prognostications to the real world to see just how wrong it is possible to be. The operative word here is "occasionally." I promise not to do it again for a while.
But anyway, if it's been a long time since you have read anything by Krugman (and I hope it has), it may be fading into the recesses of your memory that he devoted considerable energy during the Obama presidency to excusing sluggish economic performance as having nothing to do with Obama or his policies. Slow economic growth had nothing to do with Obama's overall hostility to successful businesses; nothing to do with expensive increases in unproductive regulations; nothing to do with the war on fossil fuel energy and coal; nothing to do with corporate tax rates that were uncompetitive in the international arena; nothing to do with dozens of phony prosecutions and shakedowns of financial institutions; nothing to do with wasteful spending and debt accumulation; nothing to do, in short, with what I described all the way back in 2013 as Obama's "War Against The Economy." No, instead, slow economic growth was just the "new normal," a natural state of late-stage capitalism that was completely inevitable and just had to be endured -- or perhaps ameliorated a little by the preferred prescription of a blow-out round of entirely wasteful government spending.
You don't believe me that his predictions could have been so bad? Then I'll give you a few choice quotes. I'll choose several spanning a decent swath of the Obama "recovery." To start, there is this from September 29, 2011, "Unrecoveries and the New Normal":
Larry Mishel has a very good piece systematically debunking the zombie claim that fears of regulation are holding back job creation. There is, literally, not a shred of evidence for this claim — not in the numbers, not in what businesses say. Yet it has been eagerly adopted not just by Republican politicians but by Chicago economists, Federal Reserve presidents, and more. . . . A lot of the argumentation for the regulatory thing comes from the belief that the failure to recover strongly from the 2007-2009 recession is unprecedented. You often hear assertions to the effect that in the past the economy has always rebounded strongly after a recession, so there must be something special at work here — and that something special must be the socialist in the White House. . . . In the current context, . . . there is nothing special to explain. This is what the postmodern business cycle looks like, especially in the aftermath of a financial crisis.
I particularly like that part about "fears of regulation . . . holding back job creation" being a "zombie claim." Obviously, that had nothing to do with the stagnation! It was just "the new normal"!
Next, from November 17, 2013, "A Permanent Slump?":
[W]hat if the world we’ve been living in for the past five years is the new normal? What if depression-like conditions are on track to persist, not for another year or two, but for decades?You might imagine that speculations along these lines are the province of a radical fringe. And they are indeed radical; but fringe, not so much. A number of economists have been flirting with such thoughts for a while. And now they’ve moved into the mainstream. In fact, the case for “secular stagnation” — a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between — was made forcefully recently at the most ultrarespectable of venues, the I.M.F.’s big annual research conference. . . . [T]he evidence suggests that we have become an economy whose normal state is one of mild depression, whose brief episodes of prosperity occur only thanks to bubbles and unsustainable borrowing.
By the way, in case you are thinking of agreeing that the IMF is "ultrarespectable," you might try reading this Manhattan Contrarian post from April 17, 2013, "The Dopes At The IMF Continue Their Advocacy For Bigger Government." I guess it all depends on whose "respect" you think is worth having.
And for dessert, this one from August 15, 2014, "Four observations on secular stagnation":
The idea that the liquidity trap is temporary has shaped the analysis of both monetary and fiscal policy. And that analysis now looks much more problematic. . . . The crucial point, for now, is that the real possibility that we’ve entered an era of secular stagnation requires a major rethinking of macroeconomic policy.
So Paul, how about trying a lighter hand on regulation, an end to the jihad against fossil fuels and coal, and an overall aura of encouragement of business from the government? You will never get Krugman to admit that these things might have anything to do with improved economic performance.