David R. Henderson  

Krugman's Tin Ear

AIG, CDS, Suits, and Geeks... I Refused to Shake His Hand...

I could just as easily have titled this post "Krugman's Achilles Heal." Basically, it's that Paul Krugman seems never to take account of the findings of public choice. Even a basic understanding of public choice would make him question his views about how effective government can be in achieving good things.

This comes across clearly to those who, as I do, read over 30 percent of his columns in the New York Times. He seems to believe that if one can conceive of a government solution to a problem, then all that has to happen is that the legislative bodies pass a law to spend money on the problem and the problem will be fixed. He made this point explicit in a December 19 talk at the National Press Club. At just after the 5-minute point, Krugman gives an example of what he calls an "easy problem." Repairing highways, he says, in an easy problem. It might be politically difficult to get the votes, he says, but once you've got the votes, you pass the legislation and the highways are repaired.

In fact, repairing highways, if the government runs them, is a tough problem. Consider this paragraph from Brookings Institution economist Clifford Winston in his December 28 op/ed in the Wall Street Journal, "'Stimulus' Doesn't Have to Mean Pork:'

One of the biggest killers of all is that states insist on allocating federal transportation funds through a politically devised formula. The result? Smooth, well-paved rural highways and worn-out urban roadways that are paved with a layer of asphalt too thin to withstand heavy use and are therefore in need of excessive, costly maintenance.

In other words, it's not simply a matter of getting votes: it's also that the way you can get the votes undercuts the achievement of results. It would be a straightforward problem if the roads were privately owned by for-profit firms. But when it comes to government, almost nothing is "easy" except the conclusion that governments will always grasp for more power.

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COMMENTS (14 to date)
Greg Ransom writes:

Krugman. Is. A. Dishonest. Guy.

This has nothing to do with bad hearing.

The guy dissembles to advance his religious agenda.

It's pretty simple.

Greg Ransom writes:

Using concrete instead of asphalt would go a long way towards fixing this problem -- hey, solving problems is easy and I didn't even need to leave my chair.

Give ME a chair at Princeton.

doug bennett writes:

I think you mean Achilles Heel, not "Heal"

DWAnderson writes:

Obviously, this tin ear/achilles heel is not unique to Krugman. Ignorance of public choice issues is manifested in at least 90% of the commentary out there. When was the last time you heard someone propose a government solution or program or action that was tailored to address publiv choice concerns?

Lord writes:

And those private firms would seek to do the best for their customers and not seek power. Sure, and there is bridge in Brooklyn I would be willing to sell you, cheap.

MattYoung writes:

He was infected with Royalism by Keynes. Keynes assumed all governments are dictatorial and listen to economists only.

I think Krugman will get it in a few years, but first we have to listen to him say, "If only government had done this or that in a timely fashion", which we are already hearing.

David R. Henderson writes:

Lord writes:
"Sure, and there is bridge in Brooklyn I would be willing to sell you, cheap."
How much?

Lord writes:

Naive libertarians believe government is a cesspool of politics, and markets are free of them, but all human societies, institutions, and interactions are loaded with politics, the difference is one of degree and locality. While government is more powerful in general, many others have greater influence in narrower realms.

Steve Roth writes:

>"Paul Krugman seems never to take account of the findings of public choice"

That may be because the central tenet of public choice theory--at least as defined in your EconLog link:

"voters 'vote their pocketbooks,' supporting candidates and ballot propositions they think will make them personally better off"

Is false, according to all the research--decades of it. (I'm not sure what "findings" your post is referring to.) It's another of those childishly simplistic faith-based beliefs (see: supply-side, creationism, etc.) that doesn't hold any water when you look at the facts on the ground.

Bryan can explain this research to you, or you can follow the footnotes in his book.

It's also worth taking his advice: "drop specious analogies between markets and politics, between shopping and voting."

Ross writes:

Krugman wrote a column about public choice a long time ago over at Slate.com. Krugman's conclusion was that we needed more government, in the form of campaign finance reform.

Sheldon Richman writes:

Steve Roth: Without taking issue with Caplan, whose book I much admire, I think the relevant point here about Public Choice is that politicians will serve their own ambitions rather than what is in the "public interest," assuming that can even be defined in any helpful way.

David R. Henderson writes:

Re Steve Roth's comment, I second Sheldon Richman's response. Were I to commission an update of the Public Choice article, I would ask its author William Shughart, to modify the section on voters, in line with some of Bryan Caplan's research. But a careful reading of the whole of William Shughart's article justifies the conclusion that public choice has much to add in understanding the political system.

J Cortez writes:

I liked this response to Krugman:


I Epstein writes:

I once saw Krug work an audience on C-Span. The man is intellectually dishonest. He enjoyed putting one over.

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