Arnold Kling  

Quoted Out of Context Again

Land of Lincoln... Morning Commentary...

[UPDATE Feb. 13 2:40 PM eastern time: Andrew Sullivan of The Atlantic has done the gentlemanly thing and withdrawn the racism charge. Adam Serwer of The American Prospect has apologized for not taking into account the full context. ]

I am still waiting for word from Vanity Fair and The New York Times.

Paul Krugman writes,

And the rhetorical response of conservatives to the stimulus plan -- which will, it's worth bearing in mind, cost substantially less than either the Bush administration's $2 trillion in tax cuts or the $1 trillion and counting spent in Iraq -- has bordered on the deranged...

It's "destroying my daughters' future. It is like sitting there watching my house ransacked by a gang of thugs," said Arnold Kling of the Cato Institute.

I was talking about Henry Paulson's $700 billion bank bailout, and then I said that we have a new gang of thugs doing the same thing. If you lump together the Paulson bailout, the stimulus, and the Geithner bailout, sooner or later you're talking about real money.

I also prefaced my remarks by saying, "I think about this like an economist. I feel about it as a father." And I transitioned to the substance of my remarks by saying, "That's how I feel. Now back to how I think." I tried to differentiate between expressing thoughts and voicing anger, and Krugman does not acknowledge that I made that attempt.

Anyway, my guess is the folks at Cato will be happy to have their name in print. So I've earned every penny of my salary (which is nothing, but I'm not complaining. I'm what they call an "adjunct scholar").

But what really hurts is being quoted correctly, by Patriot's Quill, a blog that I confess I don't ordinarily read. Unlike the magazine-affiliated bloggers who slimed me based on a misquote, this guy actually had the nerve to read something I wrote.

It was an essay called, Some Keynes for Bush. It was written on December 20, 2000, which was when he was President-elect (Bush took office in January of 2001. I suppose if I were a lefty I would put scare quotes around "elect"). The dotcom recession was underway, and I thought it was going to get ugly. I proposed a fiscal stimulus.

One approach that would be congenial to Bush would be a large tax cut. Unfortunately, much of the tax cut that was part of his campaign was "back-loaded," with the larger cuts occurring farther into the future. If anything, we probably need a more front-loaded tax cut.

In addition, some of the tax cuts most popular with Republicans may not be very stimulative, because they are likely to be saved rather than spent. For example, eliminating the "death tax" is unlikely to unleash much spending. I cannot imagine that the marginal propensity to consume out of inheritances over $700,000 (smaller inheritances are tax-free today) is very high.

An alternative would be to give large grants to state governments--what used to be called general revenue sharing. For example, the Federal government might give each state $1,000 for every person living in that state. This would amount to a $280 billion program.

So, how do you reconcile Kling in 2000 with Kling in 2009?

1. They are actually pretty similar. I proposed a timely, targeted, temporary stimulus then, and I would support one now. Today, I prefer a cut in the employer portion of the payroll tax, because of my "Minsky moment" thesis. I opposed a partisan, pandering permanent policy then (the Bush tax cuts) and I oppose one now (the Pelosi-Reid spending bill).

2. I have changed my views on the trade-off between current unemployment and future indebtedness. Then, I wrote,

if you ask me to choose between a full-employment economy with a budget deficit and a recession economy with a surplus, I would not choose the surplus. The full-employment economy will help to give more work experience to younger people. That will make them more productive later in life. Ultimately, the best hope for dealing with the demographic crunch is higher productivity, not government savings.

Obviously, I take the opposite view today. I think this is primarily because I have become less confident that Keynesianism will work. The economy did not really behave the way I expected that it would in the dotcom recession, and I think that the reason is that labor is no longer homogeneous. See my Lectures in Macroeconomics.

I also am more worried about the long-term fiscal outlook. Relative to where I was in 2000, I am surprised that Bush ran such big deficits (you would think he would have cut spending) and that he did nothing about Social Security or Medicare (other than to add a huge unfunded prescription drug benefit to the latter). Moreover, the financial bailouts are another huge source of indebtedness.

Anyway, I give Patriot's Quill credit for journalistic accuracy. Clearly, the blogosphere has something to teach Vanity Fair, The American Prospect, and The Atlantic about that subject. (UPDATE: A commenter points out that Andrew Sullivan of The Atlantic has done the gentlemanly thing and withdrawn the racism charge.)

Comments and Sharing

COMMENTS (15 to date)
Brian Shelley writes:

You were young and naive. So you dabbled with a little statism, who hasn't? Experimentation, that's what being young is all about.

Darren writes:

Dr. Kling:

Any way to get Heritage to put the video of the seminar on their website? It is conspicuous by its absence on the "Live Event Archive."

Arnold Kling writes:

I hope to have word today about the video. But I was also hoping yesterday....

ao writes:


Give the Atlantic some credit. Andrew Sullivan has issued a correction, which you cannot say for the Prospect or Vanity Fair:

Randy writes:

I feel the same way about the gang of thugs... of course, I think the same thing.

Michael writes:


For those of us who have followed you over the years, this is a minor slip up. Your time and wisdom are too valuable be wasted on petty bouts of nonsense from your new critics.

Don't lose sleep over it.

Eshan Shah-Jahan writes:

Regarding the Krugman quote, assuming that the war in Iraq was completely elective, it makes sense to say the stimulus is cheaper than the war. However, saying the stimulus is cheaper than the tax cuts only works from the government's perspective, not the people's. Spending is more expensive than not spending.

Billy writes:

Cut Dr. Krugman some slack. He stopped separating his emotions from his economics a long time ago.

Serolf Divad writes:

Everyone should read patriotsquill... it's the BEST BLOG EVAH (and very exclusive)!

Dan Weber writes:

Comments are closed on comments for that article. I skimmed through and found only one with "Kling" in it, by someone who seeks to defend you:

Greg Ransom writes:

Arnold, your a hero to all of us out here -- your readers.

At this point, Krugman's readers know what they are getting ..

George writes:

I'm really pissed off at this smear. Not just because Arnold is so mild-mannered and reasonable that you half-expect him to snatch off his glasses and become Supereconomist — even if he were a ranting blowhard like 95% of the rest of the blogosphere, this perpetuation of a misquote without any attempt to verify it is deeply irresponsible.

While Krugman didn't play up the racism angle, you'd think the New York Times could spare ten minutes of an intern's time to check the damn quote. Arnold may get an apology from Krugman (they were in the same econ PhD program together), but he'll never get a correction. He should push for one anyway.

Ignoring smears and wild charges of racism, as a couple commenters have suggested, is the wrong thing to do. If Arnold ever wants to enter public life, rest assured someone will dig up the smear. The misquote and all the poisonous analytical growths that thrive on it have spread far across the Web, making them about as permanent as anything ever written. Corrections (in comments, if not by the original author) should be right there alongside them in perpetuity.

There's a saying of the ancient Greeks: "A lie is halfway around the world before the truth gets its boots on." This is a perfect example, except that the lie has gotten all the way around the world. Now that the video is up on Heritage, it's time to pursue the lie and kill it.

Again, this whole thing sickens me, and Arnold should not take it lying down.

Michael S. writes:

The prospect ALSO issued a correction:

And I think when you read it you may realize that Mr. Serwer was not in fact trying to "slime" you, and in fact had a lot of trumped up and awful accusations lobbed at him by people supposedly defending you.

Paludicola writes:

Now that I have watched a video of the speech in question, I cannot even entertain any criticism besides, perhaps, an admonition for hyperbole, but the way that Professor Kling spoke those words was so mild and calm that it seems like a benign attempt to compensate for lack of perceptible anger in his tone.

This entire fiasco has been at best silly and at worse infuriatingly frustrating. It certainly has done nothing to improve anyone's understanding of the stimulus bill.

Joe writes:

I used to run a small clinic in a public hospital and I was embroiled in a racism scandal as well. An African-American employee accused me (I'm white) of racial discrimination after I failed to discipline another employee she had also charged with racism. The charges were eventually dismissed, but only after 18 months of futile mediation attempts and general dithering. During the investigation I was advised by hospital lawyers to pretend that nothing unusual was happening in order to avoid charges of retaliation (the rest of the staff was unaware of the charges).

Needless to say it was an intensely toxic atmosphere and I dreaded going to work every day. It seems that Arnold is taking this in stride, but at times it must be enraging, and I'm sorry he had to deal with it. I found the experience deeply distressing and even now, years later, it bothers me on occasion. (I envy the fact that he can publicly defend himself, but I'm thankful that the charges against me were relatively low-profile.)

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