Krugman Triples Down on His Smear of Friedman and Bernie

The Gang of 4, Krugman, and the journalist love the meme that Friedman is so bad that he is like a Republican. The journalist assumes that Friedman must have done something bizarre in his model, just like Republicans who game their models. She contrasts Republicans with their honorable "New Democrat" opposites.

[Republicans] have insisted on "dynamic scoring," measuring the budget impact of various pieces of legislation according to how much magic sparkling pixie dust they believe such pieces of legislation will bestow on the economy. They have put forward tax plans that do not -- cannot -- add up, and kept on insisting that they would. They have promised everyone no taxes, awesome jobs, and a pony -- all for free.

Democrats, say what you will, have avoided doing this to anything like the same degree. They have admitted that tax cuts do not pay for themselves. They have recognized that government spending needs to be financed with budget cuts, revenue increases, or a jump in the deficit.

The journalist, in her effort to come to the Gang of 4 and Krugman's aid, again ends up condemning them and revealing her ideological views and lack of understanding of economics. First, the economy is in fact "dynamic" and changes in demand do have critical impacts on the economy. The problem with "dynamic scoring" as practiced by Republicans is two-fold. First it is asymmetric in ways that make no economic sense. Tax reductions are modeled as increasing growth, but increased spending is not though both operate by increasing demand. Second, they assume that tax reductions lead to large increases in hours worked that are far in excess of what the data show. Note that both of these failures are deliberate modeling errors designed to support Republican ideological priors.

Here's the problem -- Friedman didn't do any of these things or anything similar. If he had, Romer would have spotted it and based the open letter on the "pixie dust."

Second, the virtuous Democrats that the journalist described are also a major part of the problem. "Democrats" have not "admitted" that increasing government spending must lead to "a jump in the deficit." That is the economically illiterate (according to both Krugman and Christine Romer) admission of the pro-austerity wing of the Democratic Party associated with the Clintons. The reality, as Krugman and Romer (a member of the Gang of 4) have stressed, is that "government spending" increases, in many circumstances, will lead to an eventual reduction in deficits by spurring employment and growth, which increases government revenue and reduces many government expenditures. Indeed, that is largely why the standard model that the Gang of 4 and Krugman embrace, without any "pixie dust," produces the results that Friedman found. The standard model shows that both the pro-austerity "New Democrats" that the journalist praises and the Republicans with their gamed "dynamic scoring" models that she scorns are wrong. Bolder turns out to be much better. The standard macro model, therefore, finds that Bernie's plan will "have huge beneficial impacts" (to quote the Gang of 4). (Also, the journalist and the New Democrats do not understand money, so the entire "needs to be financed" theory is wrong.)

The journalist and Krugman, of course, do not bother to reveal that many economists have reacted with horror to the Gang of 4 and Krugman's efforts to smear Friedman (as a convenient way to smear Bernie). I noted in my first column that Jamie Galbraith destroyed Krugman and the Gang of 4 in his column.

You can tell how desperate Krugman is by the rhetorical gambit he has chosen to rely on. Recall that all of this began with a scathing, personalized and public attack on an economist by for the high crime of running competently and carefully a standard macro model and finding evidence that supported the economic plans of a candidate (Bernie) that he did not support. The smear is bizarre and insanely over the top. The assumption of journalists is -- surely economists of this status would not perform a public lynching of this nature unless Friedman used "pixie dust." If he had done so the Gang of 4 and Krugman would have pointed that out in their open letter and Krugman's three columns attacking Friedman.

Krugman's rhetoric reveals that he has nothing beyond ever-escalating Trumpian insults -- labeling Friedman's use of the standard macro models (that Krugman endorses) "voodoo," "horrifying," "fuzzy math," "embarrassing," "outlandish," and requiring a "miracle." None of the ad hominem remarks would have been required if Paul had found that Friedman actually committed "voodoo" by using the equivalent of a "magic asterisk." The Gang of 4's effort would still obviously be political (a chance to bash Bernie) but at least it would have a clear economic basis.

Krugman exemplifies the old law joke. "When I'm strong on the facts I pound the facts, when I'm strong on the law I pound the law, and when I'm weak on both I pound the table." He has decreed two revealing edicts complete with impassioned pounding. First, no one is allowed to critique the Gang of 4 and Krugman's smears of Friedman. Prominent economists that do, such as Jamie Galbraith, simply do not exist in Krugmania. This is understandable, of course, given Jamie's evisceration of Paul and the Gang of 4, but it is still unprincipled.

But Krugman reaches a depth he has not publicly plumbed before in his second edict. He tries to cast the people who launched the smear, the Gang of 4, as the victims of a smear because economists have had the temerity to point out their errors. Krugman is enraged that people believe that the Gang of 4 wrote the letter as a means to attack a candidate they oppose -- Bernie. Given that the Gang of 4 openly did so and attacked Bernie for the work of an economist (Friedman) who supports Hillary, the entire world has figured out that the Gang of 4 and Krugman are seeking to defeat Bernie.

The curves of Krugman's intellectual dishonesty, arrogance, and moral blindness, however, intersect at their respective maxima in this sentence.

Mr. Sanders really needs to crack down on his campaign's instinct to lash out.

When you are the midst of your third writing in two days lashing out in an effort to smear an economist and a candidate you oppose, it takes a special form of hypocrisy and chutzpah to smear Sanders on the grounds that it is illegitimate for economists like Jamie Galbraith to successfully refute the Gang of 4 and Krugman's smears of Friedman and Bernie. Paul, we know you love your "pecking order" of economists, but no one is entitled to a free pass based on status. The same rules apply to the Gang of 4 and you. You have to bring logic and facts rather than a rolling barrage of ad hominem smears at those who use your own models and find that they predict the completely unsurprising result that bold plans like Bernie's "have huge beneficial impacts."

You, after all, made precisely this point about why the 2008 stimulus program should have been far larger. Recall how the "freshwater" modelers responded to your point -- they abused the results of your model's predictions in rhetoric every bit as frenzied as you now hurl at Friedman and Bernie. They at least believed your models were wrong. Friedman's unpardonable sin in your book is that he has emulated your work using your model and found as you did that much bolder is much better. Paul, please complete the irony by predicting that Bernie's plan will produce hyper-inflation -- any day now.