Chronicle of the Conspiracy
Saturday, January 03, 2004DRUCKER ON JOBS, GLOBALIZATION, AND ALL THAT First and best management guru Peter Drucker has a fresh take on the changing structure of the American economy. Bet you didn't know that "we import twice or three times as many jobs as we export. I'm talking about the jobs created by foreign companies coming into the U.S." How about this: "The U.S. remains the cheapest place in the world to produce for many of the more advanced industries. I say that not because our wages and salaries are so low. They aren't. But employee benefits are much cheaper than in Europe, and American workers are more flexible." Did you realize that "we have the highest proportion of our population in the workforce by far than any other country in the industrialized world. We have the lowest long-term unemployment rate in the West. "
Posted by Donald L. Luskin at 9:25 PM | link
Okay, Crichton has a point. The speculation in the media is even more worthless than the facts in the media. But he leaves out two very important elements. First, publishing facts is of little market value unless those facts somehow inform people's future choices, so it's entirely natural that fact-publishers would try to meet customer needs by setting their facts in the most useful context. Whether they do it well is another mater -- but speculation per se is not without value. Second, Crichton fails to include himself among the media speculators. It seems that as a speech-maker he operates often in the skeptical debunking mode (see here, and here). But as a novelist and scenarist, his work is entirely speculative -- and I can't think of a single example in which his speculations do not "crisis-ize" his subject by exploring the worst possible hypothetical outcomes. Is he arguing here for the worthlessness of his own oeuvre?
Posted by Donald L. Luskin at 1:27 PM | link
Posted by Donald L. Luskin at 1:42 AM | link
Friday, January 02, 2004KRUGMAN COMES OUT FOR DEAN The Q&O blog notes that Paul Krugman's column today amounts to an endorsement of Howard Dean for president, and wonders about the ethical implications. As I read it, that's not a violation of the New York Times' Code of Conduct. After all, the Times ran it, so they must approve of it. The Code of Conduct deals with endorsements outside the pages of the paper which the Times can't control. And I'm an eye-witness to one such ethics violation -- and I've got it on tape.
Posted by Donald L. Luskin at 10:16 AM | link
LIBERTARIANS BELOW KRUGMAN'S RADAR James DiBenedetto of Eleven Day Empire notes that Paul Krugman's column today overlooked the Libertarian Party as one of several spoilers for Al Gore in the 2000 election:
"What do the states of Iowa, New Mexico, Oregon, and Wisconsin have in common? Each went for Al Gore in 2000, by less than 10,000 votes. And in each, both the Libertarian candidate, and Pat Buchanan, garnered more votes than Al Gore's margin of victory over George Bush. Those four states have a combined 30 electoral votes - more than Florida's 25... "
Posted by Donald L. Luskin at 9:55 AM | link
KOHN KEEPS HIS FINGERS CROSSED Bob Kohn -- the author of Journalistic Fraud: How The New York Times Distorts the News and Why It Can No Longer Be Trusted -- holds out some hope for "public editor" Daniel Okrent : "...we should not be so cynical as to completely deny the possibility of reform at the New York Times."
Posted by Donald L. Luskin at 3:02 AM | link
JOKE OF THE DAY Doing big business, Bill Gates-style.
Posted by Donald L. Luskin at 2:38 AM | link
SO JUST WHO SHOULD BE PRESIDENT, ANYWAY? Krugman today, advising the Democratic field on how to avoid the Prisoner's Dilemma of primary politics:
"This is no time for a candidate who is running just because he thinks he deserves to be president."
Posted by Donald L. Luskin at 1:55 AM | link
ARE WE SURPRISED? The letter from Bechtel in the International Herald Tribune didn't make it into the Times today.
Posted by Donald L. Luskin at 1:53 AM | link
Thursday, January 01, 2004
But that won't be good enough for Krugman. Broken toilets in a war-torn country will remain for him symbols of the Bush administration's failure and corruption. If the fact that America's "newspaper of record" disparages the US soldiers and contractors -- and many times more Iraqi workers -- who are doing their best under difficult circumstances, then that's just collateral damage in Krugman's war.
Posted by Donald L. Luskin at 8:31 PM | link
LETTERS FROM THE OPPOSITION, SUCH AS IT IS Lest you think I only publish flattering letters, here are two from readers who disagree with my refutation of Paul Krugman's lies about the unemployed. You'll notice two things right away (and they are related to each other). These letters have no greater logical force than simply to assert "I disagree, and so there!" -- and the authors don't have the courage to identify themselves.
I disagree. The unemployment numbers vastly underestimate the number of people who quit looking or settled for part-time work.
2004 has just begun, yet you are already starting your tactics from 2003 so
that you might be able to have something against Krugman. Once again, however,
you fail miserably. You're simply twisting his words to try and prove him wrong,
but you can't. Krugman is not making claims for the highest percentages or
numbers ever, so your charts don't prove him wrong. Try again, chump.
Posted by Donald L. Luskin at 5:24 PM | link
THINGS MUST BE PRETTY BAD... From The Australian, Australia's national daily newspaper, in a New Year's round up of bearish economic forecasts:
"Even high-profile US economist Paul Krugman is worried..."
Posted by Donald L. Luskin at 2:36 PM | link
Wednesday, December 31, 2003
Is it true that an "an unusually large number of people have given up looking for work, so they are no longer counted as unemployed"? No. The chart at left, based on data from the Department of Labor's web site, shows that Krugman is lying. To begin with, the number of what the DOL calls "discouraged" workers is a tiny fraction of the total workforce (where the total workforce is the sum of employed, unemployed and what the DOL calls "marginal" workers) -- well under 1%. It is currently nowhere near its highest levels of the last decade. And during the last recession, it failed to track the rising pattern of overall unemployment -- it has done better. In absolutely no sense is this number "unusually large."
Is it true that "many of those who say they have jobs seem to be only marginally employed"? Who knows what Krugman thinks it means to "seem" to be marginally employed (no doubt when he reads this, he'll think of something). But the DOL has an official definition of "marginal" workers. If Krugman -- a trained economist who should know these things -- means something else, then he should say so. The chart at right shows that the number of marginal workers, just like the number of discouraged workers, is small -- and it has not tracked the rising pattern of overall unemployment (it, too, has done better). In absolutely no sense does there "seem" to be "many" marginal workers.
I'll send a note about this to New York Times "public editor" Daniel Okrent. Will he see this as the substantive misrepresentation that it is? Or will this be excused as mere "opinion" because Krugman chose to hide behind weasel-words like "unusually large" and "many" and "seem"? For my money, Krugman's weasely language makes the lies even less defensible.
Posted by Donald L. Luskin at 6:16 PM | link
FIRE WITH FIRE Here, from a reader: how to use traditional liberal ideals to take on America's most dangerous liberal pundit:
"Mr. Luskin, "I enjoyed the letters in response to Professor Krugman's column on Tuesday. However I think that there is one very important issue that is affecting Wal-Mart's Christmas sales/profits. There is a backlash against Wal-Mart in most communities that is significantly changing the demographics of the people who walk through the automatic doors of the Wal-Mart super centers. The fairly recent raid that produced illegal immigrants working as janitors and the long standing problems with the promotion and treatment of women by middle management personnel at Wal-Mart has turned off many customers that normally head to Wal-Mart for a good deal on frozen vegetables or lawn furniture. I think that this refutes the Krugman assertion that Wal-Mart sales indicate worse wages for working Americans. Instead it shows that expected wages and current wages allow most people to choose between Wal-Mart and their problems or a higher priced grocery and durable goods store that does not have the dilemma of lower prices for compromised ethics."
Posted by Donald L. Luskin at 9:04 AM | link
JOKE OF THE DAY
Posted by Donald L. Luskin at 8:59 AM | link
THAT'S TELLIN' HIM The New Orleans Times-Picayune runs the kind of letter that the New York Times would never dare to.
Posted by Donald L. Luskin at 2:06 AM | link
Tuesday, December 30, 2003LETTERS ON KRUGMAN'S "SO-CALLED BOOM" For some reason there's been a wave of reader interest in Paul Krugman's New York Times column today. I'll reproduce some of the best letters here in a moment. But first an addendum on Krugman's citation today of research by the Economic Policy Institute -- making a point about wages and productivity that Krugman said several years ago was "just plain wrong," and made by people whom he said "are simply misunderstanding basic arithmetic." Krugman said today, "Calculations by the Economic Policy Institute show real wages for most workers flat or falling even as the economy expands."
If you look at the actual "calculations" on EPI's website, you won't find much. Just a big bar-chart comparing 3rd and 4th quarter estimated GDP growth to 3rd and 4th quarter estimated wage growth for "blue-collar workers in manufacturing and non-managers in services." Amazingly, EPI cites no source whatsoever for its wage growth figures -- these seem to be less "calculations" than inventions. And I assume the figures are all pre-tax (although, truew to form, it doesn't say one way or the other) -- that way Krugman gets to ignore the positive effects on after-tax wages of Bush's tax cuts. And for all that, the EPI still offers a caveat that Krugman doesn't bother with -- one which renders the "calculations" virtually meaningless:
Krugman is simply not one of those economists who "correctly point out." Now, on with the letters.
Why does Krugman assume that the good sales at Neiman Marcus and Sharper Image were strictly a function of higher income earners, and that weak sales at Wal-mart means that lower income earners had a miserable Christmas? There are a number of substitution effects that can account for this not the least of which is that stronger sales at the high end came (to some degree) from those same middle and low wage earners shopping at better stores at the expense of Wal-Mart.
Krugman's augmented unemployment rate (including those who have stopped looking for work because there ain't no jobs) is always several percentage points above the official rate. This time is no different. And it's coming down. Krugman is taking the Bob Herbert approach. I generally stay away from Herbert because when I read him, my reaction is: why doesn't someone put this man out of his misery (or at least ban him from writing about economics)? There will always be one poor soul that Herbert or Louis Uchitelle can find to prove things suck.
I loved Krugman's column this morning. Somehow he managed to say that the richest 5% of Americans, who pay 67% of all corporate income taxes, are unfairly benefiting by the increase in corporate profits. He might as well say that they are unfairly benefiting from economic growth. Would Krugman be happier if corporate profits and economic growth were falling? At least then the rich would be suffering most. I don't remember him making this argument during the recession.
Mr. Krugman's piece today on the "so-called" boom notes that some higher-end
chains did well against expectations for Christmas sales while Wal-Mart
performed more modestly. Sales at higher-end chains may reflect the
democratization of luxury, but that is a trend Mr. Krugman cannot see from his
zero-sum, class war perspective. Wal-Mart's sales and those of some other chains
may have been lower due to lower prices on things like DVD players. Wal-Mart, of
course, does more for working Americans -- through its own low prices and
through the efficient standards it sets -- than any policy proffered by
liberals, and is starting to do this favor for populations around the world. A
supposed free-trade advocate, Mr. Krugman leaves this angle unexplored.
I came across the Krugman piece called "Our so-called Boom." This is where
Krugman proves that black is white and good is bad. George Orwell, call your
lawyer. I am no economist, but a couple of things struck me as worth mentioning:
Can you please tell Mr Krugman that Sharper Image and Neiman Marcus are poor
examples of "luxury" retailers? The argument of whether Neiman Marcus' status as
luxury versus "high end" or "nice" might at least get an interesting debate
going between a couple of idiots, but calling Sharper Image "luxury" is just
plain ridiculous. Funny how his argument in the rest of the article
disintegrates without this "fact." Even so, is Mr Krugman saying that poor
people can't afford $34.95 for the Sharper Image Automatic Pepper Mill with
Light (Item #PD300) for Grandma? God, things must be much worse than I thought.
Posted by Donald L. Luskin at 6:50 PM | link
THE ENVELOPE PLEASE... AND THE WHINER IS... The New York Times reports that Paul Krugman columns were six of the top ten most-emailed opinion stories of 2003.
Posted by Donald L. Luskin at 2:51 PM | link
LIBERALPLANET: A WORLD WHERE THE MARKET WENT DOWN THIS YEAR A reader wonders what planet Gary Trudeau is on. "Today’s Doonesbury strip shows a woman who is 66 years old. She is 'a successful lawyer,' but she is unable to retire. The cause? Her portfolio went down 20% this year 'so far.' I have to wonder what on earth this woman was investing in, especially at age 66. But this is Doonesbury, so why deal with a substantially improved economy when you can just make up your own reality?"
Posted by Donald L. Luskin at 2:07 PM | link
In 1996, Krugman wrote in Slate a list of "widespread doctrines that are simply wrong--not doctrines where I disagree with the assumptions, but where the arithmetic is simply, unambiguously wrong." Number two on the list:
He adds that these doctrines are
And it turns out that Robert Reich -- the fellow who propounds this doctrine that is "simply wrong:" -- is a founder and board member of the Economic Policy Institute, whose work Krugman cites (to support an assertion which, by his own prior admission, is "simply wrong"). The EPI, by the way, is hardly the "nonpartisan think tank" that it claims to be. Its board is a who's who of union leaders. Other members (who are also founders) include Jeff Faux and Robert Kuttner -- whose economic ideas Krugman once said in The American Prospect, have no impact outside "a narrow, self-referential circle of literary intellectuals and policy wonks." Of all three of them, Krugman wrote in Slate,
But all that was then, and this is now. Now Krugman's facing a rapidly expanding economy that he denied until it was staring him in the face -- so now all he can do is grasp at straws to find something wrong with it. If that means violating a few "intellectual boundaries," then so be it. Intellectual boundary crossing in defense of extremism is no vice.
Posted by Donald L. Luskin at 10:59 AM | link
KEEP IT SIMPLE... OR KEEP IT? Bruce Bartlett reviews a new Treasury study on tax simplification:
"If people really want simplicity, it can be done. But my experience is that when push comes to shove, people would rather have complexity and keep whatever tax provisions benefit them. In the end, the demand for true simplicity always ends up being a mile wide and an inch deep."
Posted by Donald L. Luskin at 10:14 AM | link
WE HAVE ARRIVED Blogging makes the front page of USA Today.
Posted by Donald L. Luskin at 10:09 AM | link
JOKE OF THE DAY
Posted by Donald L. Luskin at 10:05 AM | link
LIARS FIGURE Steve Antler -- the economics professor who blogs as EconoPundit -- is back from holiday break with a bi-coastal pair of econo-gotchas. First, he nails the New York Times' Paul Krugman for confusing income distribution with tax burden distribution. Second, he nails the Los Angeles Time's David Streitfeld for inventing his own special version of the unemployment rate in order to make everything look just awful.
Posted by Donald L. Luskin at 10:02 AM | link
Monday, December 29, 2003DENIAL IS A RIBBER IN WALL STREET A banner year for the stock market and a resounding economic turnaround -- and what does Kvetchin' Gretchen Morgenson write for her year-end wrap up in the Sunday New York Times? The headline: "A Year's Debacles, from Comic to Epic."
Posted by Donald L. Luskin at 1:08 PM | link
THE APOLITICAL FED You know how the press is always talking about how the Fed won't dare raise interest rates during an election year, because "everyone knows" that they never do? But then again, there are the facts...
Posted by Donald L. Luskin at 11:14 AM | link
DENIAL IS A RIBBER IN IRAQ Baghdad now has a lower murder rate than New York City. And the US rushes humanitarian aid to earthquake-torn Iran, in cooperation with other world powers. Did I mention that the economy is recovering?
Posted by Donald L. Luskin at 11:11 AM | link
Posted by Donald L. Luskin at 11:04 AM | link
On Friday Okrent responded by writing,
I wasn't surprised that Okrent would defend Krugman under the general principle that the expression of mere opinion is inherently unassailable. As I see it, then, his defense falls under the second of the two ways that I outlined in my query: it's an opinion, but a baseless one -- though Okrent claims some "connectedness."
I responded by asking Okrent,
Okrent responded on Saturday,
Okrent said more, and there has since been further exchange of ideas on this between us, but Okrent and I have agreed to facilitate our dialog by keeping it off-the-record -- the passages above are quoted by permission.
While, of course, I would have loved it if Okrent had taken my side in the critique of Krugman's Murdoch column, I didn't expect it. And it's a surprisingly good result that my query has resulted in what is now an open line of mutually respectful conversation. I deliberately chose this ambiguous issue as my first one to raise with Okrent -- rather than some factual gotcha -- in the hopes that it would be more useful in the long-term to engage a potential ally at the level of general principle. That said, Krugman hasn't provided much material for gotcha's lately -- ever since Okrent arrived, come to think of it. Krugman has been on best behavior (for Krugman, at least). He has off-loaded his most obvious lies to the pages of The Nation -- where there is most certainly no "public editor." Eric Alterman doesn't count.
Bottom line: Okrent's presence at the Times is already making a small difference in the behavior of its bad actors. He is intellectually engaged in the core issues of journalistic integrity that transcend the fifteen minutes of fame of any one pundit, no matter how liberal or how dangerous (our friends at The National Debate will be delighted to learn that Okrent is still all over the matter of the Times' corrections policy for columnists). And Okrent is willing to constructively engage the Times' public critics. It's all good news.
Posted by Donald L. Luskin at 10:33 AM | link
GUYS, HE ACTUALLY SORT OF SAID THAT In his Friday New York Times column, Paul Krugman wagged his finger at his "journalistic colleagues" in this wonderful example of the pot calling the kettle black: "If a reporter must use anecdotes, they'd better be true." He went on to give this example:
A reader hunted down what Al Gore actually said. It's on our letters page.
Posted by Donald L. Luskin at 10:01 AM | link
Sunday, December 28, 2003GADGET DESIGNERS, TAKE THE PLEDGE! How come the electronic devices that could make us rich and smart always make us feel poor and stupid? Lenore Skenazy has a 12-step program for hardware designers that just might help.
Posted by Donald L. Luskin at 7:18 PM | link