Wednesday, May 26, 2010

It's Hard Out Here for a Laureate

Nobel Laureate and NY Times blogger Paul Krugman, that is.

First, Scott Sumner at The Money Illusion argues that the tax reductions and move toward deregulation of the Reagan/Thatcher era were successful, and that Krugman's argument to the contrary is wrong:
Krugman makes the basic mistake of just looking at time series evidence, and only two data points: US growth before and after 1980. Growth has been slower, but that’s true almost everywhere. What is important is that the neoliberal reforms in America have helped arrest our relative decline.
Then Tyler Cowen at Marginal Revolution weighs in on the tort vs. regulation debate and points out that the current disaster in the Gulf of Mexico provides a case of regulatory failure that doesn't seem to register in Krugman's analysis (italics in original):
There is in fact an agency regulating off-shore drilling and in the case under question it totally failed. How can Lake Erie, an orthogonally related success, be cited but this very directly relevant failure not be mentioned?
Now, it's important to point out that both of these critiques are by professional economists and are arguments about the merits, rather than just some guy with a free blog picking on Krugman for the partisan nature of his analyses. Krugman is still the most popular and influential writer on economic matters in the public sphere, so don't' feel too bad for him.

Besides, DeLong has his back (Saltwaters Unite!) accusing Sumner of not being able to read!

Who knew the dismal science could generate such feisty blogging?

1 comment:

D said...

Krugmans Nobel prize only furthers my argument that he and other Keynes acolytes are NOT economists, and are merely political operatives.
Krugman understands and even utilizes the correct Austrian theory of the business cycle, stating that the government needed to 'create a housing bubble to off-set the dot-com burst.'
Golly, and here I thought the 'free market' was inherently unstable, didn't self-correct, and was full of incompetent Greedy Bastards?
How could the government 'create' a housing bubble if monetary trickery combined with a fiscal funnel were not the direct cause of the business cycle?
Simple, you see!
Economic law doesn't apply to one political party and shun another. The social engineers War On Reality continues unabated.