Sunday, May 9, 2010

Krugman's Consistency Deficit

In the comments to my Greece post, J. Strupp and I had a little back and forth about economist Paul Krugman's attitude toward deficits. I want to assure Strupp that while unfounded assertions make up a large percentage of discourse on the internet, I try really hard not to traffic in them.

I accused Krugman of not having a problem with deficits, as long as they are being run by Democrats. My accusation was based on an article from Econ Journal Watch that I had recently read. From the abstract:
Economists affiliated or aligned with one of the parties may be suspected of changing their positions on budgets deficits to serve their favored party or win favor with its constituency. This paper investigates selected economists, to see whether their tune changes when the party holding the White House changes. Six economists are found to change their tune—Paul Krugman in a significant way...
And from the paper:
Upon the 2006 Democratic victory in Congress, Krugman reverted to favoring deficits. In a column entitled “Democrats and the Deficit” he wrote:
One of the biggest questions is whether the party should return to Rubinomics—the doctrine, associated with former Treasury Secretary Robert Rubin, that placed a very high priority on reducing the budget deficit. The answer, I believe, is no...And the lesson of the last six years is that the Democrats shouldn’t spend political capital trying to bring the deficit down. They should refrain from actions that make the deficit worse. But given a choice between cutting the deficit and spending more on good things like health care reform, they should choose the spending. (Krugman 2006)
So deficits are OK, as longs as they are for what Krugman perceives as the "good things". I think we really ought to expect more from someone who is cited with such authority on these matters.

No comments: