Category Archive for ‘Paul Krugman’ at Steven Landsburg | The Big Questions: Tackling the Problems of Philosophy with Ideas from Mathematics, Economics, and Physics

on July 17, 2010

. 3 Comments

Somehow we’ve gone a month since the last weekend roundup. So this will reach back a little further than usual in time.

Riddles. We tackled some riddles: Why do guys with deep pockets take on risky ventures instead of selling them off to someone with nothing to lose? Why, when a plane headed for Atlanta is diverted to Greenville, does everyone else choose to stand for an hour at the ticket counter while I (and only I) saunter over to the Hertz counter and grab one of many available cars? And why does Jet Blue, after investing $800 million in its new terminal at JFK, choose to make that terminal so hellish a place that I for one will never travel through it again if I can possibly avoid it?

Paul Krugman. Yes, I know, I can’t seem to let this topic go. I was at it here, and then here, and here and finally here.

Let me summarize my complaint in a paragraph: Krugman has some policies he’d like to see enacted. Some people oppose those policies for silly reasons and others oppose them for sensible reasons. Krugman habitually ridicules the silly reasons and pretends that he has therefore dispensed with the sensible reasons.

More specifically, Krugman attacks “deficit hawks” but ignores the “spending hawks” who present a much stronger case for fiscal restraint. He’s right to attack the deficit hawks, who make the silly mistake of conflating spending (which is costly) with tax cuts (which are not)—but then he makes the same mistake himself when it suits his purposes.

Incidentally, my Toy Stories post contains a link to a toy model intended to highlight the key questions that Krugman willfully ignores. At the end of that post I added an addendum confessing to arithmetic errors in the model and inviting readers to correct them. On a second reading, I realized there are no arithmetic errors—just one typo in an equation. Because some comments refer to that typo, I’ve chosen not to correct it, but it’s explained in the current addendum to the original post.

Books. Our book posts covered everything from the ridiculous to the sublime to the magnificent.

Math. The music of the primes gives a glimpse of the glorious intricacy of arithmetic, and our post on Fermat’s Last Theorem gives a small taste of how to tackle a particularly vexing problem.

Videos We had videos on cruel and unusual punishment, on the end of racism, and on how to fix everything.

Miscellaneous. Can Mike Huckabee possibly believe the things he says about religion? Does anyone still subscribe to the superstition of dollar cost averaging? And why the disproportionate outrage about an oil spill in the Gulf when there’s so much more to be outraged about?

Okay, we’re more or less caught up now! See you Monday.

Toy Stories

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on July 6, 2010

in Bad Reasoning, Paul Krugman and Policy

. 33 Comments

Paul Krugman is at it again, casting aspersions on everyone who opposes extended unemployment benefits while offering absolutely no positive argument for those benefits. Let me explain what would count, to an economist, as a positive argument.

There’s no question that extending benefits would be good for the currently unemployed, and no question that it would be bad for those who are called on to foot the bill. Economists usually deal with that kind of conflict by asking what policy you’d prefer if you had amnesia, and and didn’t know your own employment status. (You can read a lot more about this approach to policy analysis in Chapter 16 of The Big Questions.) The amnesiac is an impartial judge who is forced to care about everyone, because he/she might be anyone.

You Can’t Keep a Good Straw Man Down

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on June 22, 2010

in Bad Reasoning, Economics, Paul Krugman and Policy

. 21 Comments

The artwork above is courtesy of Jodi Beggs, proprietress of the lively Economists Do It With Models site, who graced us with a visit in yesterday’s comments and expanded on those comments on her own page. (That’s me kicking Paul Krugman in the gut.)

Jodi objects to the tone, and in part to the substance, of my response to Paul’s recent attacks on the “deficit hawks” who oppose various spending programs that Paul happens to favor. I’d summarized his rhetorical technique as follows:

There He Goes Again

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on June 21, 2010

in Bad Reasoning, Economics, Paul Krugman and Policy

. 23 Comments

Paul Krugman sinks to a new low with this passage:

In America, many self-described deficit hawks are hypocrites, pure and simple. They’re eager to slash benefits for those in need but their concerns about red ink vanish when it comes to tax breaks for the wealthy. Thus, Senator Ben Nelson, who sanctimoniously declared that we can’t afford $77 billion in aid to the unemployed, was instrumental in passing the first Bush tax cut, which cost a cool $1.3 trillion.

Where to begin?

First, no economist—let me repeat that—NO economist, not even Paul Krugman on the days when he’s being an economist—would count a tax cut as a cost for purposes of policy analysis. A cost is something that consumes resources, not something that changes the ownership of resources. My Principles of Economics students all understand this; so, presumably, does the Nobel-prize winning author of a prominent Principles textbook. (A possible exception: You could call a present-day tax cut costly if it necessitates a future tax increase which, for some reason, is costlier to collect than the present-day tax. I guarantee you this is not what Krugman has in mind. If it were,the $1.3 trillion number that he highlights would be totally irrelevant to the actual cost.)

Next, unemployment benefits are costly, both insofar as they discourage recipients from seeking work and insofar as they necessitate taxes that discourage productive activity. The cost of $77 billion worth of benefits is not $77 billion, but it’s not zero either.

So unemployment benefits are costly and tax cuts are not. Which doesn’t mean that all unemployment benefits are bad or that all tax cuts are good, but it’s plenty adequate to absolve the hypocrisy charge.

But Krugman, as is his wont lately, appears committed to the following flat-out dishonest rhetorical agenda:

Bad Logic — Or Bad Arithmetic?

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on June 15, 2010

in Bad Reasoning, Economics, Paul Krugman and Policy

. 15 Comments

In a blog post on what he calls the “Bad Logic of Fiscal Austerity”, Paul Krugman lays the following calculation before the public:

Let me start with the budget arithmetic, borrowing an approach from Brad DeLong. Consider the long-run budget implications for the United States of spending $1 trillion on stimulus at a time when the economy is suffering from severe unemployment.

That sounds like a lot of money. But the US Treasury can currently issue long-term inflation-protected securities at an interest rate of 1.75%. So the long-term cost of servicing an extra trillion dollars of borrowing is $17.5 billion, or around 0.13 percent of GDP.

Yes. That’s the long-term cost of borrowing an extra trillion dollars. (Actually, the cost is even lower than Krugman says it is.) But the long term cost of spending an extra trillion dollars is somewhere in the vicinity, of, oh, about a trillion dollars, or about 7.4% of GDP.

Now you might argue that if some of that spending puts unemployed resources to work, then the true cost of spending a trillion is somewhat less than a trillion, but Krugman, at least here, does not attempt to make that argument. Nor do I expect that even Paul Krugman would dare to argue that an adjustment for unemployed resources could reduce the cost of government spending by roughly 98%.

Krugman is right when he says that borrowing is cheap. But the issue isn’t borrowing; it’s spending—and spending is expensive. It appears that like the President, Krugman wants to divert your attention from spending to borrowing so he can dismiss legitimate concerns without even acknowledging them. It’s a cheap trick. Don’t let either of them get away with it.

Edited to add: In fairness to Krugman, he appears to be imagining that the trillion is never paid back, so that the cost of spending it is simply the debt service of 17.5 billion per year forever. But his column makes it sound like the cost is a single one-time payment of 17.5 billion, which is absurd.

Weekend Roundup

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on April 17, 2010

. 9 Comments

The bulk of the week was devoted to Krugman on green economics, with posts here, here, and here.

Although I agreed with Krugman on some points and disagreed on others, there were two places where I not only disagreed but thought he had the economics wrong. First, he is wrong when he suggests that if we’re more risk averse, it follows that we should spend more on climate control. The reason is that risk averse people don’t like income inequality (because it boosts the risk of being born poor), and spending more on climate control exacerbates income inequality across generations. Therefore risk aversion cuts both ways on this issue. Second, Krugman is wrong when he gives (some) credence to James Hansen’s economically illiterate belief that altruism is somehow less effective under a cap-and-trade regime than under an emissions tax.

To round out the week, we had two posts about shameless hucksters trying to gull the public. Those posts are here and here.

As always, I’ll be back on Monday.

Krugman on Climate—Some Final Words

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on April 14, 2010

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Having blogged twice this week (here and here) on Paul Krugman’s green economics essay, I want to add a couple of quick comments on what it takes to contribute usefully to this discussion.

Krugman on Climate

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on April 13, 2010

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Yesterday I blogged about Paul Krugman’s recent piece on climate control policy. The bottom line: After recovering from a shaky start, Krugman does a good job of laying out the issues and posing many (though not quite all) of the right questions. But I’m not sure he gets the answers right.

A few years ago, writing in Slate, I listed the key questions that the Al Gores of the world mostly fail to address or even acknowledge. (See also the discussion on pages 186-190 of The Big Questions.) Krugman (thankfully) is no Al Gore, and he does address most of these questions. Let’s see how he does with them.

A Tale of Three Economists

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on April 12, 2010

in Current Events, Economics, Paul Krugman and Policy

. 12 Comments

Halfway through reading Paul Krugman’s New York Times piece on green economics, I had my snarky retort all ready to go. Then in the second half he went and got all reasonable on me. I still don’t buy his conclusions, but (sadly for readers who like fireworks), he’s not (at least in this instance) nuts.

Weekend Roundup

Published

on March 13, 2010

. Closed

Here at The Big Questions, we try to stand up for clear thinking and shame its enemies. This week, the enemies included Paul Krugman (writing on unemployment), the President of the United States (expounding on rising insurance premiums), a Washington Post columnist who seemed to forget that political reforms are supposed to serve a purpose, and that perpetual offender, the Conventional Wisdom, in its judgments about anti-gay agendas and fiscal responsibility.

Unless Krugman or someone like him offers an irresistible target tomorrow, I’ll see you next on Monday. Thanks for visiting.

Krugman versus Krugman

Published

on March 7, 2010

in Bad Reasoning, Economics, Outrage and Paul Krugman

. 35 Comments

I don’t usually post on Sundays, but this letter to the New York Times from the indispensable Don Boudreaux is too priceless to pass up.

Edited to add: I don’t always read Krugman’s column, but since Don’s link sent me there today, I can’t resist noting one more outrage: Krugman thinks that extending estate tax relief to the top .25% of estates is a policy “on behalf of” that .25% of the population, as opposed to a policy on behalf of everyone who benefits from capital accumulation, higher wages and economic growth.

Or more precisesly, he doesn’t think that. But he says it.

Click here to comment or read others’ comments.

Wind Production

Published

on January 11, 2010

in Bad Reasoning, Economics and Paul Krugman

. 34 Comments

Once upon a time in America, whenever an administration spokesman spouted economic nonsense, you could rely on Paul Krugman for a sneer, a blast of outrage, and frequently an imputation of the basest motives. That time ended on approximately January 20, 2009. Today Krugman sleeps at the wheel while administration press spokesman Robert Gibbs spews forth the following:

I think it’s safe to say that for quite some time, when it came to building the solar panels and the wind towers and the wind turbines and a lot of the manufactured equipment for clean energy, we had a number of foreign countries that were doing much better in addressing that demand than we were. And as the President has said often, the type of demand for these components in manufacturing is only going to increase as we seek solutions to our energy problems.

And we have to ask ourselves as a country, are we going to create those jobs and create those components, or are we going to import those components from overseas? The President believes that we have an opportunity to lead the world in this type of manufacturing.

Nobody in the Bush administration ever displayed more economic ignorance, but Krugman was all over those guys every time they came close. Now he lets it slide. So let me do his job for him:

When the domestic demand for a product increases, the law of comparative advantage tells you to import more of it, not less. If it is in fact true that “the type of demand for these components is only going to increase” then American manufacturers might want to start producing them, but American consumers will certainly want to import more of them, and any attempt to circumvent that is a good way to make Americans poorer.

(For those following along in their economics textbooks: The world supply and demand for, say, wind turbines, must be more elastic than the domestic supply and demand, so a demand shift has a smaller effect on the world price than the autarkic domestic price and so must increase the foreign comparative advantage—or decrease the domestic comparative advantage, if any.)

For goodness’s sake—if Barack Obama or Robert Gibbs discovers that he really likes bananas on his Cheerios, is his first thought that he’d better start growing bananas, or is his first thought that he’d better figure out where to buy them? That’s the kind of question Paul Krugman used to ask. I miss him.

The Top Ten

Published

on December 31, 2009

in Blogging and Paul Krugman

. 28 Comments

Since everyone else is doing end-of-year retrospectives, I thought I’d chime in with a list of the ten most-commented-upon posts here at The Big Questions blog in the year 2009. Now, this blog is only two months old, but we’ve already had roughly 75 posts, so a top 10 list at this point is perhaps not too presumptuous.

Of course, the number of comments may be a poor predictor of post quality. So after I give you the Top Ten, I’ll point you to a few others that I think equally worthy.

That having been said, the Top Ten are:

In tenth place, Brain Teaser, wherein the puzzle I used as a lead-in got far more attention than the meat of the post itself. That’s okay; it’s a good puzzle.
In ninth place, What Are You Surest Of?, wherein I asked what you’re surer of than you are of evolution.
In eighth place, Trading Up was the first of several posts on the case for free trade. Notable followups include Krugman: The Flip Side and The Sierra Club. Or, in a lighter but no less telling vein, The $10,000 Suit.
In seventh place, Thoughts on Health Care Reform, where I argued that insurance is not part of the solution; it’s part of the problem.
Here the notable followups include Playing Politics, Making Health Care Work and our first video post, Is Health Care a Right?—The Movie.
In sixth and third places, we have the two posts where I presented the questions from the honors exam I administered at Oberlin College: The Honors Class, Part I and The Honors Class, Part II. The notable followups, of course, were the posts that revealed the answers: The Big Answers, Part I and The Big Answers, Part II.
In fifth place, Krugman to the Rescue, wherein I lament Paul Krugman’s excessive investment in forgetting what he knows about economics.
In fourth place, There He Goes Again wherein I lament Richard Dawkins’ odd notion that explaining life is the same thing as explaining the Universe.
In third place—I already told you what’s in third place!
In second place, Blind Justice, where we tackled the ethics of discrimination. There was notable follow-up discussion over on the Rust Belt Philosophy blog, and more here at The Big Questions in the Analogize This thread.
Finally, in first place, we have Non-Simple Arithmetic, on the complexity of arithmetic. It’s a bit of a fluke that this landed in first place, since the great flurry of comments consisted almost entirely of a back-and-forth between me and one extremely persistent and extremely dissatisfied poster. Still, I like this post and am glad to see it on the list. If you like this sort of thing, you might also enjoy my posts on Godel in a Nutshell and Principia Mathematica: The Comic Book.

Finally, here are a few of my favorites that didn’t make the Top Ten for comments, though that might just mean they were uncontroversial. Or to put this another way—maybe these posts were so perfect that readers thought they had little to add!

Policy related: Of Jerks and Bullies (on immigration) and It’s Not Rocket Science, (on cap and trade).
On the origins of Everything: Life, The Universes and Everything
Hilarity: On the Amazon reported on one of the funniest things I’ve ever seen. And this followup reported on one of the saddest. If you want a good giggle, you might also check out Postman’s Nightmare
Math tricks: Here, here, and here.
Finally, and dearest to my heart, three posts about extraordinary and inspirational people: the great philosopher Daniel Dennett, the great songwriter Johnny Mercer, and the great American Indian leader Red Cloud.

I’m taking New Year’s Day off. I’ll see you Saturday.

From the Sierra Club

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on November 24, 2009

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I am a proud member of the Sierra Club. No, not that Sierra Club; what I mean to say is that I am a regular reader of the parenting blog ChildWild, and a fan of its wise and charming proprietor Sierra Black. I am therefore delighted that Sierra seems to have become a regular reader and frequent commenter here on The Big Questions, and glad to see she’s sticking around despite frequent disagreements—much as I do on ChildWild.

Over on another thread, amidst a discussion of the case for free trade, Sierra threw me for a brief loop with an issue I’d never seen raised before, though I’ve since learned that it’s commonplace in certain corners of the Internet. I thought, then, that it might be worth responding in a separate post.

(I’ll admit too that another motive for the separate post was my conviction that I’d be able to slip in a perfect pun around the phrase “Sierra, Madre”—Madre, of course. meaning mother, and what with her running a parenting blog and all and—well, it’s bad enough to have to explain your jokes, but here I am trying to explain a joke I couldn’t even figure out how to make. But by the time I’d realized the pun was stillborn, I was already committed to this post.)

Here’s the relevant part of Sierra’s comment:

Weekend Roundup

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on November 21, 2009

in Economics, Paul Krugman and Roundup

. 16 Comments

Lots of economics this week. We celebrated the Dr. Jekyll side of Paul Krugman (after having lamented his Dr. Hyde a week ago), explored the economics of college admissions and of work and play, and ended the week with a pop quiz. I’ll discuss some of the quiz answers in the near future.

Midweek we took a break to celebrate the centenary of the great Johnny Mercer.

To round out the week’s economics theme, here’s some recommended reading from around the web:

John Cochrane’s devastating rebuke of Paul Krugman
Bill Easterly on the perils of declaring health care a “right”.
Robert Murphy takes on the Efficient Markets Hypothesis. I don’t completely agree with this one, but Murphy definitely scores some points and it’s way fun to read.

Work and Play in Europe and America

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on November 19, 2009

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My post about Paul Krugman’s loopy proposals on employment policy generated some considerable discussion about why Europeans work so much less than Americans do. Actually, there are two separate questions here:

Why do Europeans work less than Americans?
Who’s happier?

A few observations:

Krugman: The Flip Side

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on November 17, 2009

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Having recently bashed Paul Krugman, and in the full expectation that I’ll have occasion to bash him again, let me interject that Krugman is not just a first rate economist; he is also, when he wants to be, a superb economic communicator, with a long paper trail to prove it.

Take, for example his essay on the widespread failure of intellectuals to grasp Ricardo’s theory of comparative advantage (the basis of the case for free trade). Instead of simply bemoaning the problem like the rest of us, Krugman makes a valiant and useful attempt to identify its root causes.

He starts with an analogy I’m also fond of (I’m not sure which of us has been using it longer): The theory of comparative advantage is like the theory of evolution by natural selection—to those who understand it, it is simple and compelling; yet non-experts can find it remarkably difficult to grasp.

In The Big Questions, I argue that this analogy ultimately breaks down: The theory of evolution is compelling largely because of the evidence that supports it, while Ricardo’s theory is compelling largely because of the logic that supports it. It’s not too surprising that a first-rate physicst or literary critic could be unfamiliar with a body of evidence, but it’s a little more unsettling when that same physicist or literary critic can’t follow a simple chain of logic.

Weekend Roundup

Published

on November 14, 2009

. 2 Comments

Lots of good discussion on the blog this week. We began with a lively debate about the moral basis for antidiscrimination laws, which inspired some thoughtful commentary from the anonymous Rust Belt Philosopher, leading to an extended dialogue over on his blog. That dialogue has pretty much wound down, but I think that much of it is well worth reading even if it’s a little late to jump in.

Our thread on free trade was equally provocative. I’m sure I’ll soon return to some of the issues that came up near the end of the thread.

I offered a brain teaser to illustrate a key point from The Big Questions, namely that honest truthseekers can’t agree to disagree. I threw in a comparison to a related brain teaser about blue-eyed islanders, and my own brain teaser was quickly forgotten as the blue-eyed islanders became the focus of discussion. That was never my intention, but I’m thrilled that people found something interesting to discuss. Those who insist on controlling their threads’ directions should take up sewing, not blogging.

We also met the Ass Meat Research Group, and I said a few words about Paul Krugman. In entirely separate threads, of course.

See you all on Monday!

Krugman to the Rescue

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on November 13, 2009

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. 52 Comments

It’s always impressive to see one person excel in two widely disparate activities: a first-rate mathematician who’s also a world class mountaineer, or a titan of industry who conducts symphony orchestras on the side. But sometimes I think Paul Krugman is out to top them all, by excelling in two activities that are not just disparate but diametrically opposed: economics (for which he was awarded a well-deserved Nobel Prize) and obliviousness to the lessons of economics (for which he’s been awarded a column at the New York Times).

Hot Air

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on November 2, 2009

in Books, Economics, Paul Krugman and Policy

. 11 Comments

Steve Levitt and Steve Dubner, the SuperFreakonomics guys (formerly the Freakonomics guys) have raised a lot of temperatures with their chapter on global warming. The backlash began with Paul Krugman, who in turn was neatly skewered by several authors, but most effectively by the journalist Ari Armstrong.

The critics have raised two objections that come perilously close to contradicting each other: First, Levitt and Dubner are accused of minimizing the problem. Second, they are accused of overeagerness to solve the problem, as opposed to, say, demonizing the responsible parties. Of these, only the first deserves to be taken seriously.