Thanks to Glenn Reynolds at Instapundit for pointing out my National Review Online "Krugman Truth Squad" column yesterday, "Prove It or Correct It." Lots of good reader responses came in as a result, including these two.

One is from Ross McKitrick, Associate Professor, Department of Economics, University of Guelph in Canada, and one of the authors of Taken By Storm: The Troubled Science, Policy and Politics of Global Warming (click here to order it from Amazon.com, or click here to read more about it).

"Periodically Paul Krugman turns his attention to Kyoto and global warming, a perfect Trojan horse for the folks who'd like to expand the bureaucracy and raise taxation levels. In his August 8 New York Times column, he spins up a conspiracy theory based on some Salon.com article that supposedly shows global warming is uniformly accepted by all scientists except those bought and paid for by the fossil and auto industries. Then he defends his conspiracy theory by insinuating that Senator James Inhofe is spinning his own conspiracy theories:

"'And before you accuse me of a conspiracy theory, listen to what the other side says. Here's Senator James Inhofe of Oklahoma: "Could it be that manmade global warming is the greatest hoax ever perpetrated on the American people? It sure sounds like it."'

"The Inhofe speech from which Krugman took a single line was about two hours long. It was a detailed, well-informed survey of the conflicting evidence on climate change and the clear evidence of the harm Kyoto would do to the US economy. There is no conspiracy theorizing in the speech, but there is an attempt at the end to account for the motivation of so many uninformed people to push the global warming concept. It ends as follows:

"'Finally I will return to the words of Dr. Frederick Seitz, a past president of the National Academy of Sciences, and a professor emeritus at Rockefeller University, who compiled the Oregon Petition: "There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gasses is causing or will, in the foreseeable future, cause catastrophic heating of the Earth's atmosphere and disruption of the Earth's climate. Moreover, there is substantial scientific evidence that increases in atmospheric carbon dioxide produce many beneficial effects upon the natural plant and animal environments of the Earth."

"'These are sobering words, which the extremists have chosen to ignore. So what could possibly be the motivation for global warming alarmism? Since I've become chairman of the EPW Committee, it's become pretty clear: fundraising. Environmental extremists rake in million of dollars, not to solve environmental problems, but to fuel their ever-growing fundraising machines, part of which are financed by federal taxpayers.

"'So what have we learned from the scientists and economists I’ve talked about today? 1) The claim that global warming is caused by man-made emissions is simply untrue and not based on sound science. 2) CO2 does not cause catastrophic disasters—actually it would be beneficial to our environment and our economy. 3) Kyoto would impose huge costs on Americans, especially the poor. 4) The motives for Kyoto are economic not environmental—that is, proponents favor handicapping the American economy through carbon taxes and more regulation. With all of the hysteria, all of the fear, all of the phony science, could it be that man-made global warming is the greatest hoax ever perpetrated on the American people? It sure sounds like it.'

"This is where Krugman got the quote."

And here's one from another economist -- he has asked for anonymity, so I'll only say that he is affiliated with one of the regional Federal Reserve Banks. Responding to my objection to the statement in Krugman's August 1 New York Times column in which he claimed that real per capita California state spending growth was explained by inflation and population growth, when those factors had already been included in the numbers he quoted. The economist responds,

"On the real per capita business (and I hate to admit it) I'm with Krugman. The raw number of the budget increase is huge -- something like 40%. The real per capita increase is 10% (or, more correctly, 13.4%). That implies that 'most of the spending growth was simply a matter of keeping up with the population and inflation' just as Krugman states. Krugman isn't stating that real per capita spending didn't increase, but only that real per-capita increases make up a minority of the raw increase. That is, 10% out of 40% (or, more correctly, 13.4% out of 40%) is less than half."

I responded,

"It doesn't surprise me that an economist would have no problem with Krugman's statement about real per capita spending. When I first read the statement it didn't bother me either, because I easily knew what Krugman meant -- he was implicitly saying that population growth and inflation reduced what would otherwise seem to be even greater spending growth to 'only 10%' (of course it's really 13.4% according to Krugman's own source, but that's another matter).

"But then I started getting emails from readers, who are not economists. They were confused and misled by the way Krugman chose to express himself. I went back and read it again, and could see what they meant. Considering that Krugman has been browbeating the Treasury Department for the way it speaks about tax distribution statistics, he should set a high standard and say exactly what he means. The evidence of the emails I got is that people were misled -- and it's no coincidence that they were misled in the direction that flattered Krugman's point. While that element of Krugman's statement may not deserve a 'correction' per se, he should certainly acknowledge its flaws (and hopefully not in his usual supercilious way of sighing, smiling ironically, and then going on about how he sometimes forgets that he's not writing for other trained economists, and space is so constrained, and so on and so on....)."

The economist shot back,

"We are basically in agreement then, probably more than you think. While the sentence does not fall into the category of 'factual error and thus needs correction by the newspaper' it does fall into the category 'not a very good argument and thus needs refuting.'

"That is, what fraction of a raw spending increase that is due to real per capita spending increases is irrelevant? What matters is the real per capita increase itself. If one focuses on the fraction, it's as if having a lot of inflation or population growth gives the state a license to increase real per capita spending.

"The higher the inflation and population growth, the higher real per capita spending growth can be and still allow the state to claim that the fraction of the increase due to real per capita growth is below some level, say 50%, and thus be able to argue that most of the increase is due to population growth and inflation. This is nonsense."

Well said!

As Dr. Evil himself said of Mini-Me in The Spy Who Shagged Me, "He's evil, he wants to take over the world, and he fits easily into most overhead storage bins." Well, we know Krugman is evil. We know he wants to take over the world. And we know he's small -- "gnomishly handsome," Newsweek once called him. He himself once said, "...perhaps I am just not imposing enough in person to be inspiring (if I were only a few inches taller ...)."

And both of them just love to put things in quotation marks. Remember how Dr. Evil and Mini-Me kept pantomiming quotation marks with their fingers around words like "laser" and "liquid hot magma"? Krugman does the same thing -- he makes things into quotations that aren't really quotations.

Remember last week when I pointed out the embarrassing quotation that Krugman attributed to the Bush administration's Treasury Department in his August 5 column, but which no one in the Bush administration or the Treasury Department ever actually said? Krugman was talking about how Treasury had provided NBC's Tim Russert with statistics on the effects on six example families of repealing the Bush tax cuts. Krugman mocked the Treasury for claiming an "example of a 'lower income' elderly household was one receiving $2,000 a year in dividend income." I have seen the documents that Treasury provided to Russert, and neither they nor similar documents published in January used the expression "lower income" in relation to this example household (nor to any other), and Russert never said it either.

Krugman repeated the invented quote Saturday in a posting on his personal web site. The posting was Krugman's response to a stinging rebuttal published in the Times letters section the same day, from Andrew B. Lyon, the former Treasury deputy assistant secretary for tax analysis, whose staff prepared the examples for Russert.

Robert Musil on his Man Without Qualities blog does an outstanding job of taking apart Krugman's rebuttal-of-the-rebuttal. I will add to it only the observation that the version of Lyon's letter reproduced on Krugman's website is different than the version published in the Times. Judging by the way it is formatted, the version on Krugman's website appears to have been cut and pasted from an email -- either from Lyons directly, or as a "heads-up" from the Times. Here it is, with strike-throughs indicating material omitted in the Times version, and underlines indicating material added.

"As the former Deputy Assistant Secretary responsible for tax analysis at the Treasury Department from April 2001 to July 2003, I must respond to Mr. Krugman’s Aug. 5 recent column (August 5, 2003) accusing it of political bias.  

"The Treasury does detailed analysis of tax legislation and has reported many of these analyses on its web site. The Treasury Department also frequently responds to requests by the media for analysis. Mr. Krugman objects to an analysis that showed the effects of the 2001 and 2003 tax cuts for six representative families. Among the six representative families, the analysis provided an example of , including a married couple, both spouses aged 65, with $40,000 in income, including $2,000 in dividend income. Mr. Krugman objects He says that such a family is not representative of elderly taxpayers.

"Obviously, no single example can be representative of all elderly taxpayers, but the example is useful precisely because it is unlikely to be misinterpreted - it applies to the couple described. Further, this couple has income quite close to the median for such filers their age, their $2,000 in and dividends is quite close to the average amount of dividends for elderly filers at their that income level, about half of which have whom receive dividends income. As a result, the elderly couple Mr. Krugman objects to is quite representative of such income tax filers. The example couple in the example would see has seen a decline in its income tax liability decline from $1,396 to $675 as a result of the 2001 and 2003 tax cuts.

"Mr. Krugman is certainly free to oppose the tax relief, provided to the taxpayers described in these examples but he should be more circumspect in asserting political bias in the underlying analyses."  

Note that the Times omitted three critical sentences. First, there are two omitted sentences in which Lyon had defended himself against Krugman's broad charge that the Treasury has been drawn into politics as evidenced by its having provided information for Russert (which was used in an interview with Howard Dean): "The Treasury does detailed analysis of tax legislation and has reported many of these analyses on its web site. The Treasury Department also frequently responds to requests by the media for analysis."

Second, there is one omitted sentence in which Lyon dealt with the broad issue of whether the Treasury's examples were "representative" or not: "...the example is useful precisely because it is unlikely to be misinterpreted - it applies to the couple described." In other words, it is a representative example of itself. Krugman had called all the examples "wildly unrepresentative" -- yet Lyon's letter itself, written in response to Krugman, is the first time anyone in the Bush administration has ever asserted that the examples are intended to be "representative" in any sense in the first place.

Without the elements contained in the omitted sentence, Lyon's letter ends up being nothing more than a quibble about statistics. Its last paragraph, in which he says Krugman "should be more circumspect in asserting political bias in the underlying analyses" is rendered a non sequitur.

Posted by Donald L. Luskin at 2:31 AM | link    

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