Saturday, March 16, 2013

Hating on Krugman: the Cassandra Syndrome

Paul Krugman has got to be one of the favorite demons of Republicans, billionaires, right-wingers, Eurocrats, Chicago School economists and no doubt others. Why so? How did this happen to a highly respected economist.

Well there is the fact that he is acerbic, sarcastic, and really good at mockery. Moreover, he is fiercely mocking while managing to keep his critiques substantive, unlike his critics who flail and resort to childisn name-calling - yes, I'm talking about you, John Cochrane and you, Niall Ferguson.

That's probably a minor point though. Another factor is his bully pulpit as an NYT Op-Ed writer..

The real problem, I think, is that he has been so infuriatingly right. He was, as he reminds us, one of the few public figures to call "Bullshit!" on the Bush administration's justification for the Iraq War, and almost certainly the most important single critic. He did so from a newspaper and editorial page dominated by pro-Iraq-war propaganda.

Then there was the great crash of '07. While Chicago whistled Dixie and predicted a quick rebound, Krugman saw the dimensions of the impending disaster. He also prescribed a cure, and the US took about 1/2 of the cure he and others prescribed. The result was our current and continuing half to one-third of a recovery.

Meanwhile, the wise men of Europe declared for austerity. Again he predicted disaster for the weaker Euro zone countries and disaster they have gotten. Nowhere has austerity accomplished what was promised. (The much earlier German experiment with mini-austerity took place in a much different economic climate, and is irrelevant to the response to a huge recession/depression.)

The trouble with being a successful prophet is that those you have exposed as fools resent it.