|
Media Infiltrations: Republicans and the Populist Temptation  Wall Street Journal February 9, 2010 Why Taxing Stock Trades Is a Really Bad Idea Wall Street Journal January 6, 2010
"What has been your worst blogging experience? "That's a guy who actually stalks me on the Web and once stalked me personally." "I'm saying this...guy's a jerk."
 The Happy Body Aniela and Jerzy Gregorek What I'm listening to:  Langley Schools Music Project What I'm watching:  Star Trek What I'm playing:  Speed Racer Order these from Amazon.com at Amazon's normal low prices... and a fraction of your order goes to help support this site. Thanks!
Thanks to Irwin Chusid, public editor.
|
Chronicle of the Conspiracy
Join us as we discover, document, expose and challenge the bad people, the bad institutions and the bad ideas that stand in the way of wealth creation -- and show you how to fight back!
Thursday, May 01, 2003
|
Get new major postings to this weblog via email -- free. Click here to sign up! |
Perhaps you saw this earlier today. Representative Harold Ford, Jr. (D-TN) used the Luskin-debunked $500,000-cost-for-each-job-argument today in his questioning of Alan Greenspan after his House testimony. Greenspan let it slide by as Ford layered on more and more strident concerns. I'm not sure Greenspan even noticed it in any event.Part of Greenspan's response was to draw a sharp distinction between reductions in taxes on investment as opposed to taxes on demand. This is precisely the distinction I've cited in my rejoinders to Krugman's ornately scholasticized after-the-fact rationales. For more analysis of the theoretical issues raised by Krugman, be sure to read several new letters posted on our letters page (go here and scroll down to read them all).Rumors are that Ford's endorsement of Kerry this week was to put him in the running for the VP nod if Kerry is the Dem nominee. He sure was steamed up today and, predictably, swinging wildly armed with Krugmanian "facts."
Terry Sautter
Posted by Donald L. Luskin at 12:34 AM |
link 
Wednesday, April 30, 2003
|
Get new major postings to this weblog via email -- free. Click here to sign up! |
In all that ink he endlessly cites textbook economic theories -- "Hey, this is turning into a seminar," he chirps in the latest ink-jet. But I'm with Krugman's students on this one: Krugman's seminars suck. He's even doing here the same thing he does at Princeton -- assigning as reading stuff he wrote five years ago in Slate.
And what's the point of it all? I suppose it's to re-establish his damaged credibility with a little shock-and-awe display of his academic virtuosity. But more deeply it's an attempt to bully us into believing that that an heroic after-the-fact claim is not so heroic and not so after-the-fact. The claim is that the 1.4 million new jobs created by President Bush's tax-cuts -- which Krugman stipulated -- would all vanish after no more than a single year. That claim, which he never made in his April 22 column, is necessary to justify his otherwise insupportable claim that the entire ten-year cost of the tax-cuts should be compared to the value of a single year's salary. In other words: the claim that the jobs will vanish after just one year is so completely predicted by canonical theory that he meant it all along and needn't have said it in his column.
Of course when he told the "little people" who read his column that Bush would spend $500,000 in tax-cuts on $40,000 worth of jobs, he did not disclose that this seemingly self-evident arithmetic truth was in fact the top card in house of cards of mere theory! Krugman would like to shock and awe us into thinking that these theories in his textbooks are actually true and so it's no less than a law of nature that those jobs would vanish after one year. But that's hardly the case. His little diagrams aren't "true" -- they're just crude approximations representing enormously complex human systems at about the precision of cave drawings. They have never been subject to rigorous testing or proof, and they never will be, no matter how many millions Krugman earns by forcing his helpless students to buy his textbooks containing these diagrams.
And even if we accept them as actually true, then there are all kinds of error-prone judgments to be made in applying them to today's specific economic situation and these specific tax-cuts; Krugman is forced to go into all that at length with lots of elephant-shit about "liquidity traps" and Fed policy and so on, trying to connect the dots between these textbook theories and his specific claim that the jobs will vanish after exactly one year. But at the end of the day it's all just theory upon guess upon judgment upon conjecture upon approximation. None of which was disclosed in his agitprop arithmetic.
So the claim that those 1.4 million stipulated new jobs will all vanish after just one year is an heroic claim, and an undisclosed one. Is it also an after-the-fact claim, made up only after the column was published to backfill Krugman's blunder? What did he think, and when did he think it?
That is something that only Paul Krugman knows. In his latest web site posting he's practically pleading with us to believe he thought it all along. I happen to think that he's lying about it. I think he just saw an opportunity to take a cheap shot a Bush, got sloppy and took it, got caught, and is now claiming whatever he has to claim to justify himself. But who knows?
So Paul Krugman, on that point, ego te absolvo. Sin no more. Do you feel better now?
Posted by Donald L. Luskin at 9:02 AM |
link
Monday, April 28, 2003
|
Get new major postings to this weblog via email -- free. Click here to sign up! |
My regular readers will hardly need to be reminded that in that now-notorious column he stipulated that President Bush's proposed tax-cuts would create 1.4 million new jobs, but then claimed they would cost $500,000 per job while the average salary for those jobs would be a paltry $40,000 per year. Krugman's lie is the invidious comparison between the ten-year value of the tax-cut and the one-year salary for the jobs -- designed to make the tax-cuts look outrageously ineffective and expensive.
Obviously -- it's just an arithmetic truth -- there's only one thing that Krugman could possibly say that would make that invidious comparison non-invidious. Krugman would have to claim he meant all along when he first wrote the column that he believed the 1.4 million new jobs would vanish after a single year. Why wouldn't Krugman want to say that unless forced up against the wall where he had to say it? Because it's an obvious lie that he meant it all along -- and even if he did mean it all along, it's nothing but a SWAG -- a stupid wild-ass guess, with no particular justification other than his random say-so.
He didn't come out and say it in his first apologia. He stopped short (so to speak), indulging only in this bit of bullying:
"...no serious economist thinks that a tax cut or spending increase will have any effect on employment more than a couple of years from now."
He came pretty close in his second apologia (early edition), but it's approximate and contingent on (complicated) assumptions (a semi-SWAG):
"If that assumption is right, the job creating effects of any fiscal expansion will be of short duration, a year or two..."
And now... with the second apologia in its evening edition... the SWAG is now fully swagged. We see Krugman pull out all the stops, resorting even to bold-face type. I can just imagine his tiny fists pounding the keyboard, banging out the only words that can save him...
"the additional jobs are here today, gone tomorrow. Don't take my word for it - check any major principles textbook."
And...!
"...this means that the fiscal stimulus raises employment relative to what it would otherwise have been only while the liquidity trap lasts. Again, the jobs go away."
Wait!! There's more!!
"But did I mention that the jobs go away? Jeez."
Well, as a matter of fact, no -- he didn't mention that. Not in his April 22 column -- the one read by hundreds of thousands in the "newspaper of record" and syndicated around the world to countless other papers. He's now -- finally! -- mentioned it on his own private web site, read only by the economics and media cognoscenti.
Now why didn't he mention that where it counted? Did he not really believe it all along? Is it just after-the-fact backfill? Probably. But Krugman would have us believe now that it was just all to complicated and sophisticated to explain -- after all, his latest apologia even uses aggregate-demand-aggregate-supply diagrams!
"The bottom line: there's a very good reason why I compared the annual cost of employing a worker with the 10-year cost of the Bush plan. When the NY Times starts letting me put diagrams in my columns, I'll consider offering fuller explanations."
He'll consider it? This is his worst lie of all -- because it takes no diagrams or lengthy explanations to make the point about the short life of the new jobs. All Krugman would have had to say in the April 22 column is "In my judgment as an economist the 1.4 million jobs will only last one year." That's just 15 words. It's not a full explanation, but it doesn't have to be -- it's fair disclosure that there is opinion involved in what was passed off as pure arithmetic. All the diagrams from all the textbooks in the world don't make it any less a mere opinion.
Shame, shame, shame on you Paul Krugman, you self-appointed defender of the "little people." You plutocrat of the intellect -- it would have only cost you 15 words -- but you knew even the "little people" wouldn't believe it if it was only your opinion. And you just had to score your point by any means necessary (sound familiar?). So now you spend hundreds upon hundreds of words, trying to salvage your reputation before the judgment of the big people. And, apparently, before the judgment of your own mirror.
>>Update... Two more letters from school. One from a Princeton senior who faults Krugman for being a lousy lecturer -- but says there are few complaints about his bias (perhaps, the writer opines, because the students aren't knowledgeable enough to detect it). The other from a beleaguered campus conservative who's started fighting back when his professors quote Krugman in their classes.
>>Update 2... The infinitely sycophantic "Bobby" of the Unofficial Paul Krugman Archive has weighed in on the "divide by ten" controversy. A good time is guaranteed for all.
Posted by Donald L. Luskin at 11:02 PM |
link
|
Get new major postings to this weblog via email -- free. Click here to sign up! |
As a Princeton undergrad and one whose friends are Paul Krugman victims, I must tell you how much I've enjoyed his squeamishness over your remarks on his op-eds. Divide by ten… geez!
You know, that smarter-than-thou bullying is exactly what he does on campus, too. He's a terrible professor by all accounts. His lectures are awful, and his ratings on the student course guide are abysmal.
These statistics are from the Student Course Guide, an online guide,
password-protected for students only and maintained by the Undergrad Student
Government. I need to remain an anonymous -- as a Princeton undergrad I
could possibly get in trouble with the USG or the University for divulging
these. They're some of the lowest I've seen, and student evaluators tend to be
pretty generous.
Here are the 2000 stats -- this is his first semester since then teaching
undergrads, I think, and that's why there aren't any newer statistics. At the
end of this semester, new statistics should be posted.
Here are some stats for Krugman's lectures, class size of maybe 350 or so.
ECO 102 Fall 2000 Statistics
|
|
Unacceptable <--> Excellent |
||||||
|
1 |
2 |
3 |
4 |
5 |
# |
Avg. |
|
|
LECTURES: |
|
|
|
|
|
|
|
|
Stimulation of independent thinking |
13% |
29% |
38% |
19% |
2% |
307 |
2.7 |
|
Clear presentation subject matter |
16% |
22% |
37% |
20% |
4% |
307 |
2.7 |
|
Overall quality of lectures |
16% |
27% |
39% |
16% |
2% |
308 |
2.6 |
Interesting, isn't it, that the famed econo-columnist received "excellent" from only 2% of the class. Perhaps more telling are the statistics from his precept. The professor generally has to teach one precept (small group or "section"), and the TA's teach the rest).
|
Sub-Report for Students in |
|
|
|
|
|
|
|
|
|
Unacceptable <--> Excellent |
|
|
||||
|
1 |
2 |
3 |
4 |
5 |
# |
Avg. |
|
|
LECTURES: |
|
|
|
|
|
|
|
|
Stimulation of independent thinking |
|
47% |
26% |
26% |
|
19 |
2.8 |
|
Clear presentation of subject matter |
16% |
21% |
47% |
16% |
|
19 |
2.6 |
|
Overall quality of lectures |
16% |
32% |
37% |
16% |
|
19 |
2.5 |
|
PRECEPTS, CLASSES: |
|
|
|
|
|
|
|
|
Ability to raise challenging questions |
21% |
53% |
21% |
5% |
|
19 |
2.1 |
|
Ability to help clarify course material |
21% |
16% |
42% |
11% |
11% |
19 |
2.7 |
|
Ability to encourage participation |
37% |
37% |
26% |
|
|
19 |
1.9 |
|
Instructor's responsiveness |
16% |
32% |
32% |
16% |
5% |
19 |
2.6 |
|
Overall quality of precepts, classes |
33% |
28% |
28% |
11% |
|
18 |
2.2 |
|
Stimulation of independent thinking |
7% |
13% |
47% |
27% |
7% |
15 |
3.1 |
|
Clear presentation of subject matter |
7% |
20% |
47% |
20% |
7% |
15 |
3.0 |
|
Overall quality of readings |
7% |
27% |
40% |
13% |
13% |
15 |
3.0 |
|
PAPERS, REPORTS, |
|
|
|
|
|
|
|
|
Guidance in prep of written work |
25% |
25% |
31% |
13% |
6% |
16 |
2.5 |
|
Comments response to written work |
38% |
25% |
31% |
|
6% |
16 |
2.1 |
|
Overall value papers,reports,exams |
6% |
38% |
38% |
19% |
|
16 |
2.7 |
|
GENERAL: |
|
|
|
|
|
|
|
|
Contribution to knowledge of subject |
|
21% |
47% |
26% |
5% |
19 |
3.2 |
|
Contribution to critical evaluation |
5% |
21% |
58% |
16% |
|
19 |
2.8 |
|
Contribution to interest in subject |
11% |
58% |
16% |
16% |
|
19 |
2.4 |
|
Overall quality of the course |
11% |
58% |
16% |
16% |
|
19 |
2.4 |
Now, to put icing on the cake, compare Krugman's stats to the average precept rating (for all preceptors in the course).
|
PRECEPTS, CLASSES: |
|
|
|
|
|
|
|
|
Ability to raise challenging questions |
9% |
22% |
31% |
27% |
10% |
303 |
3.1 |
|
Ability to help clarify course material |
9% |
14% |
21% |
29% |
27% |
308 |
3.5 |
|
Ability to encourage participation |
10% |
17% |
25% |
30% |
17% |
307 |
3.3 |
|
Instructor's responsiveness |
6% |
12% |
20% |
32% |
31% |
308 |
3.7 |
|
Overall quality of precepts, classes |
9% |
17% |
23% |
30% |
20% |
306 |
3.4 |
Krugman's precepts are, in all areas, significantly below average for the
course -- and the other preceptors aren't professors or New York Times columnists.
The problem at Princeton is that the good teachers don't get tenure: look what
happened to Andrew Isenberg, who won the Teaching Award (see:
http://www.dailyprincetonian.com/archives/2003/04/28/opinion/8077.shtml).
Instead, the big names get tenure -- and it's often detrimental to the students.
Which isn't to say that most big names are bad teachers, but some (like Krugman)
are.
"John Nash"
Posted by Donald L. Luskin at 12:45 PM |
link
Sunday, April 27, 2003
|
Get new major postings to this weblog via email -- free. Click here to sign up! |
Update... I just scrolled down the page on DeLong's web site and found another post in which he flaccidly "defends" Krugman by reproducing his entire column and his entire defense of his column. Still no mention by DeLong himself of the "divide by ten" lie -- although now DeLong is accessory after the fact by reproducing it without comment. And, at the same time, DeLong takes the opportunity to add yet another item or two of probably stolen intellectual property to his inventory. Do you have permission from the New York Times to post Krugman's whole column, DeLong? Do the Regents of the University of California know you are doing that? As an already beleaguered taxpayer of the State of California I'm getting quite concerned about the liability you are creating for me. Appropriate inquiries will need to be made. While that plays out, let me give you fair notice: if you do that with my intellectual property, the Regents will most certainly become involved.
Posted by Donald L. Luskin at 6:54 PM |
link
|
Get new major postings to this weblog via email -- free. Click here to sign up! |
SPITZER: TAINTED MACRO RESEARCH? Wall Street is bracing for the release of the details of a global settlement with New York state attorney general Eliot Spitzer and the Securities and Exchange Commission over stock research abuses. Supposedly the big banks fear revelation of specific icky examples of how their stock picks were tainted by banking relationships.
Well, when the dust settles, I've got an idea for another crusade Spitzer can get started on. How about investigating the link between the same big banks' macroeconomic research and their political relationships? Here's where the Lord High Inquisitor can start: with an investigation of why Goldman Sachs puts out macro research slanted to oppose President Bush's tax-cuts -- when Goldman is the largest single contributor to the presidential nomination campaigns of all of the Democratic wannabes.
VERACITY OR FEROCITY? It feels like forever since I've been linked by Glenn Reynolds at InstaPundit. Not sure why I've been in the penalty box there, but I seem to be back on the ice now -- sort of.
"KRUGMANBLOGGING isn't part of InstaPundit's regular diet -- in fact, this site has been Krugman-free for weeks, if not months. It used to be Kaus and Sullivan who did most of it, but lately Donald Luskin seems to have picked up the ball. I can't vouch for this post's veracity, as I haven't followed the debate. But its ferocity is certainly something to behold."
Glenn,
Glenn... now why would you say a thing like that? OK, there was
that stuff about bull's-eye shots to the forehead and twitching corpses. And the
stuff about O. J. Simpson stabbing his wife to death in the kitchen (and
then leaving the lights on -- that part was pretty rough, I admit). But other
than that...?
CUTTING REICH OWN TO SIZE Mickey Kaus has a nice catch today (involving a somewhat ironic juxtaposition of sources).
"The dirtiest little secret about the Roaring '90s is that average working families gained almost no income.
"By contrast, from 1997 to 2002, the weekly pay of the median worker rose almost 9 percent, to $656, after adjusting for inflation. The gains effectively erased almost two decades of declining pay.
SOPHISTICATED EXEGESIS To settle a bet, I happened to do a Google search on BEATLES BREAKUP -- and I accidentally came up with this astonishing example of the elephant-shit of academic economics. Here's the abstract of a working paper by two University of Michigan economics professors, called "Assortative Matching, Reputation, and the Beatles Breakup."
"Consider Becker’s (1973) classic static matching model, with output a stochastic function of unobserved types. Assume symmetric incomplete information about types, and thus commonly observed Bayesian posteriors Matching is then assortative in these ‘reputations’ if expected output is supermodular in types.
"We instead consider a standard dynamic version of this world, and discover a robust failure of Becker’s global result. We show that as the production outcomes grow, assortative matching is neither efficient nor an equilibrium for high enough discount factors. Specifically, assortative matching fails around the highest reputation agents for ‘low-skill concealing’ technologies. Our theory implies the dynamic result that high-skill matches (like the Beatles) eventually break up.
"Our results owe especially to two findings: (a) value convexity due to learning undermines match supermodularity; and (b) for a fixed policy in optimal learning, the second derivative of the value function explodes geometrically at extremes."
Now that's a sophisticated exegesis of a cultural phenomenon. I lost the bet, by the way.
A TAX BY ANY OTHER NAME Alan Erenhalt, editor of Governing magazine, has an op-ed in the New York Times today. It's all about how "unfunded mandates" from the federal government impose costs on state and local governments. The Times must feel that now that the federal government is in the hands of Republicans, that's something we suddenly need to be especially concerned about. Plain enough -- but the mystery is why Erenhalt and his sponsors at the Times can't see that an "unfunded mandate" is simply another word for "tax." Why is it bad for the federal government to tax state and local governments (who in turn have to tax their citizens) when it is good the for the federal government to tax those same citizens directly?
Posted by Donald L. Luskin at 5:16 PM |
link