When I get my daily email from the editorial page of the New York Times, I scroll through to see whether there’s anything on economic issues I should read.
As a general rule, I skip over Paul Krugman’s writings because he’s both predictable and partisan. But every so often, his column will grab my attention, usually because the headline will include an assertion that doesn’t make sense.
The bad news is that this is usually a waste of time since most of his columns are ideological rants. But the good news is that I periodically catch Krugman making grotesque errors when he engages in actual analysis. Here are a few examples:
- Earlier this year, Krugman asserted that America was outperforming Europe because our fiscal policy was more Keynesian, yet the data showed that the United States had bigger spending reductions and less red ink.
- Last year, he asserted that a supposed “California comeback” in jobs somehow proved my analysis of a tax hike was wrong, yet only four states at the time had a higher unemployment rate than California.
- And here’s my favorite: In 2012, Krugman engaged in the policy version of time travel by blaming Estonia’s 2008 recession on spending cuts that took place in 2009.
But perhaps he’s (sort of) learning from his mistakes. Today, we’re going to look at Paul Krugman’s latest numbers and I’ll be the first to say that they appear to be accurate.
But accurate numbers don’t necessarily lead to honest analysis. Krugman has a post featuring this chart, which is supposed to show us that GOP presidential candidates are wrong to pursue “Bushonomics.”
In looking at this chart and seeing how Krugman wants it to be interpreted, I can’t help but think of the famous zinger Reagan used in his debate with Jimmy Carter: “there you go again.”
Let’s consider why he’s wrong.
First, he asserts the chart is evidence that GOP candidates shouldn’t follow Bushonomics.
I actually agree. That’s because the burden of government spending jumped significantly during the Bush years and the regulatory state became more oppressive. All things considered, Bush was a statist.
Krugman, however, would like readers to believe that Bush was some sort of Reaganite. That’s where we disagree. And if you want to know which one of us is right, just check what happened to America’s rating in Economic Freedom of the World during the Bush years.
Second, Krugman would like readers to think that Presidents have total control over economic policy. Yet in America’s separation-of-powers system, that’s obviously wrong. You also need to consider what’s happening with the legislative branch.
So I added a couple of data points to Krugman’s chart. And, lo and behold, you can just as easily make an argument that partisan control of Congress is the relevant variable. As you can see, Republican control of Congress boosted job growth for Obama, whereas the Democratic takeover of Congress led to bad results during the Bush years.
By the way, I don’t actually think congressional control is all that matters. I’m simply making the point that it is misleading to assert that control of the White House is all that matters.
What is important, by contrast, are the policies that are being implemented (or, just as important, not being implemented).
And since the economic policies of Bush and Obama have been largely similar, the bottom line is that it’s disingenuous to compare job creation during their tenures and reach any intelligent conclusions.
Third, since Krugman wants us to pay attention to job creation during various administrations, we can play this game – and actually learn something – by adding another president to the mix.
Krugman doesn’t identify his data source, but I assume he used this BLS calculation of private employment (or something very similar).
So I asked that website to give me total private employment going back to the month Reagan was nominated.
And here’s what I found. As you can see, good private-sector job growth under Reagan and Clinton, but relatively tepid job growth this century.
Now let’s take a closer look at the total change in private employment for the first 81 months of the Reagan, Bush, and Obama Administrations. And you’ll see that Krugman was sort of right, at least in that Obama has done better than Bush.
And if there’s no recession before he leaves office, he’ll look even better than Bush than he does now. But Obama doesn’t fare well when compared against Reagan.
So does this mean Krugman will now argue GOP candidates should follow Reaganomics rather than Obamanomics or Bushonomics?
I’m not holding my breath waiting for him to make a correction. By the way, keep in mind what I said before. Presidents (along with members of Congress) don’t have magical job-creation powers. The best you can hope for is that the overall burden of government diminishes a bit during their tenure so that the private sector can flourish.
That’s what really enables job creation, and that’s the lesson that really matters.
But it’s not easy to find the truth if you put partisanship above analysis. Krugman erred by making a very simplistic Bush-Republican-bad/Obama-Democrat-good argument.
In reality, the past several decades show that it’s more important to look at policy rather than partisan labels. For instance, the fiscal policies of Ronald Reagan and Bill Clinton are relatively similar and are in distinct contrast to the more profligate fiscal policies of George W. Bush and Barack Obama.
P.S. Paul Krugman’s biggest whopper was about healthcare rather than fiscal policy. In 2009, he said “scare stories” about government-run healthcare in Great Britain “are false.” But you can find lots of scary stories here.