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Friday, July 25, 2003

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TIMES EDITORIAL BOARD: WHO NEEDS EXPERTS?   
Here's a provocative response to John Seater's comments on the lack of apparent expertise on the New York Times Editorial Board ("The Newspaper of Not Knowing What the Hell You're Talking About" July 24, 2003). It's from Eric Savitz, the west coast editor of Barron's -- a friend, and at one time my editor at the dearly departed Industry Standard. Savitz begins,

"Let me say this about Seater: when it comes to the news business, he in fact does not know what the hell he is talking about. For one thing, I suspect you could make the exact same assertions he makes about the Times about the editorial board of, say, The Washington Times, or National Review. Do any of those publications feature soil science or statistics experts writing editorials?"

Seater focused his fired on the Times, and I certainly spend a lot of pixels on the Times here, too. That's because the "newspaper of record" has a special duty to be excellent -- so it's especially noteworthy when they are not excellent. But Seater wouldn't seek to defend the Washington Times or National Review, and either would I (though, of course, I write for National Review, and so would argue that at least one of its writers is fully qualified). Seater specifically states that he sees the problem of unqualified journalists as pandemic. Savitz continues,

"I do not have to be Vince Lombardi to write knowledgably about football. It does not require a Ph. D. in astrophysics to cover the space program, and it is certainly possible to write about economics, or politics, or the environment or anything else without formal training. What's required is general intelligence, common sense and an ability to ferret out the truth -- that is what good journalists and editorialists are supposed to do, seek the truth.

"I hardly think, by contrast, that simply being a lawyer makes one qualified to write about the law; it might help in certain circumstances, but hinder the writer in others. Now, if you choose to argue that any individual writer is guilty of naively covering a particular subject, fine. Writers should know their own limitations. I do not attempt to cover the ballet, I would be a very poor golf reporter and I don't spend a lot of time puzzling out agricultural policies. The kind of blanket condemnation that Seater is shelling out is silly."

Far be it from me to argue for credentialism -- especially academic credentialism. I myself don't have a degree in anything at all. And at the New York Times, the one guy who does have academic credentials in economics -- Princeton economics professor Paul Krugman -- is the worst of the lot. Compared to him, ignorance is bliss. The point is that people who write about anything should know what they are talking about -- how they came by that knowledge is immaterial. I'm entirely confident that my career experience has earned me at least the equivalent of a masters in finance, and I consider myself eminently competent to write about markets and economics at the very highest level.

But Seater did not pin his argument exclusively on academic credentials. He noted that the Board members also lacked work experience credentials. It would appear that their only ostensible qualifications to write on their subjects for a newspaper as important as the Times is the fact that they write on their subjects for a newspaper as important as the Times.

Should apparent qualifications matter, provided that their editorial product is good? No, they should not -- and in that sense, Eric's critique is right on the money. But that money is in a straw man's pocket. Their editorial product is not good, and Seater would not have adduced a theory to explain a bad product if the product were good. The Times editorial writers do not, as Savitz would urge them, "know their own limitations."

Savitz concludes,

"I just read his own bio, and saw no journalism degree in evidence...so by his logic, clearly he should shut up. Of course, my degree is in economics, not journalism. So what do I know?"

A clever gotcha, I admit -- sounds like something from one of my Krugman takedowns. But I don't think it really has much force. Seater needn't have journalism credentials, because he is not acting here as a producer of journalism. He is a consumer of journalism, and is expressing his opinions about the product that he consumes. How could anyone argue that he is not an expert on his own consumption experience?

He doesn't like the product, and has adduced a theory about why the product isn't better -- which in an important sense is really an axiom, not a theory at all: the product is bad because the people who produced it weren't qualified to produce a good product, which lack of qualification is evident in the fact that the product is bad. That leaves the only question being: what, specifically, is the nature of the lack of qualification? Lacks, by their very nature, are limitless in their potential specifications. But the absence of academic and work credentials would seem a sensible place to start.

Stated that way, the only way to refute Seater would be to argue that the Times editorial product is good. If that were true, then any explanation Seater comes up with for why it was bad would be wrong. Eric, do you argue that the product is good? If not, then what's your alternative explanation for why it's bad, if you don't like Seater's explanation?

>>Update... Journalist Bill Hobbs weighs in.

Posted by Donald L. Luskin at 1:32 AM | link   


Thursday, July 24, 2003

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BROOKS TO JOIN TIMES OP-ED PAGE IN SEPTEMBER   
Bruce Bartlett informs us,
"According to Drudge, David Brooks of the Weekly Standard will become a New York Times columnist in September. This marks the first time in my lifetime that the Times has had an explicitly conservative columnist. I don't count Safire, who is at best a moderate Republican, and anyway long past his prime. No word on who will be replaced or cut back."
One that last point, Bruce, well... I have an idea...

Posted by Donald L. Luskin at 9:40 PM | link   

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THE NEWSPAPER OF NOT KNOWING WHAT THE HELL YOU'RE TALKING ABOUT   
Three days after Bill Keller was named executive editor of the New York Times, the newspaper of record's editorial page started running brief bios of all the people on its Editorial Board, one each day, starting with editor of editors Gail Collins. Economist John Seater at North Carolina State University pointed out to me the remarkable fact that "The Times' editorial writers, to a person, have not been trained in any of the subjects they write about, with the exception of law." Is the newspaper of record actually the newspaper of not knowing what the hell you're talking about?

Seater continues,

"I am reminded of the never-ending (and never-heeded) criticism of the training of public school teachers, whose education never seems to concern the subject matter they will be teaching but only the theory of how to teach it. A couple of the Times' editorial writers have been to law school and write about legal matters. OK, no complaint there. But what is Andres Martinez doing writing about economics? He has a master's degree in Russian history and no apparent training in economics at all. He also writes about federal regulatory issues, another subject he seems unequipped to discuss knowledgably.

"He is not unique; indeed, he is the norm. For example, Robert Semple writes about environmental issues; he holds a master's degree in history and has spent his working life as a political reporter and then an editor. He has not been trained in biology, chemistry, or ecology. Philip Boffey writes about science and medicine; he has a bachelor's degree in history and has been a reporter, editor, and editorial page writer. He has not been trained in physics, chemistry, biology, or medicine. Verlyn Klinkenborg writes about agriculture and the environment; he has a PhD in English literature, has taught creative writing, and has written books and articles. He has not been trained in soil science, horticulture, or ecology. Carolyn Curiel writes about national trends and the environment; she has a bachelor's degree in radio/TV/film, served under President Clinton as ambassador to Belize, and has been a sports writer. She has not been trained in economics, statistics, forecasting, biology, or ecology. And so it goes, on and on. As far as I can tell, every one of these people, except the lawyers, has been trained in journalism, either in school or on the job, but almost certainly has no expertise in the subjects he or she writes about.

"Given such a cast of characters, it is no wonder the Times writes such vacuous, foolish editorials; their writers haven't the skills to understand the issues they hector us about. A first-rate writer not only writes well but also understands what he is writing. The Times, at least, doesn't hire people like that, not in economics or anything else (except for legal issues). The problem seems to go well beyond the Times, afflicting many leading newspapers and television networks. I am puzzled by all this. Markets usually work quite well at weeding out the bad products and replacing them with good products. So either there is a market failure of some sort in the entire national news business, or there are a large number of news consumers who enjoy reading or hearing ignorant assertions by untrained people."


Posted by Donald L. Luskin at 1:05 PM | link   

DATE RAPE OR FOOD FIGHT?    Here's Novak on the foodfight presided over by House Ways and Means chair Bill Thomas, as the committee worked on the administration's proposal for pension relief. Sounds like Thomas overplayed his hand a bit, but then who ever said that the congress was populated by wise men? And what exactly would you have done when the Democrats tried to obstruct passage of this entirely sensible proposal? Whatever his errors of style, don't forget that thanks to him we got a 25% capital gains tax cut this year.

Posted by Donald L. Luskin at 10:06 AM | link   

DEFICIT DATA    Worried about those "record deficits" in the federal budget? The Congressional Joint Economic Committee has just put out this simple guide that puts it all in perspective (and this separate chart supplement).

Posted by Donald L. Luskin at 9:55 AM | link   

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MORE ON THE PLAME GAME   
The seeming scandal that Bush administration officials apparently outed a covert CIA operative -- Valerie Plame, the wife of Niger uranium investigator Joseph Wilson -- continues to go entirely unreported by the three major US newspapers. Paul Krugman's unsubstantiated coverage of it his New York Times column Tuesday remains the one and only mention in the Times, the Washington Post or the Wall Street Journal. Even Newsday, which has spearheaded the story with articles late Monday and again Wednesday, is silent today. I can't imagine how a scandal-crazed press could not be spreading this story all over the front page every day -- it's certainly been a topic at White House press briefings (yesterday and again today).

This story is just not going to go away, despite the big-press silence this week. Based on my conversations in the last 36 hours with Washington contacts, here's how I'm very sure it's going to turn out -- and it will hinge on two key questions.

Was Plame really a covert operative? Yes, but this will be difficult to officially confirm and there will be debates as to just how covert she really was, and what real harm was done by outing her.

Who outed her, the White House or the CIA? Both. Both are understandably furious with Wilson -- the White House for the embarrassment he has caused and for what they see as his disingenuous and partisan statements in the media.  But outing Ms. Plame was not to punish Wilson, but to refute him: Ms. Plame's involvement in Wilson's selection for the Niger assignment trivializes him, makes him seem less an expert and more of a hack on a nepotistic boondoggle. The administration officials who spoke to the press probably weren't even thinking about outing Ms. Plame, as such -- after all, Wilson had effectively already done that when he outed himself by going public with his CIA-sponsored work. And therein lies the reason why the CIA is furious at Wilson -- what he has done is an enormous breach or protocol and security.

Friends in our blog neighborhood have weighed in with a number of comments. Bill Hobbs has tracked down Wilson's Democratic and anti-war background, and has documented the heavy-duty scandal-mongering emanating from the leftist side of the blogosphere. But I think Bill may be trying a bit too hard to put the best face on what is, in fact, an incident of some importance, and one that does not exactly cover anyone with glory. Tom Maguire has a useful timeline of the Plame "affair," although it is incomplete in that it doesn't mention our pathbreaking work in the matter (sniff). And he's groping close to the truth when he draws the distinction between sources cited as "administration officials" and "government officials."

Posted by Donald L. Luskin at 2:14 AM | link   


Tuesday, July 22, 2003

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TREASON (AND I DON'T MEAN ANN COULTER)   
SPECIAL UPDATE, JULY 23, 2003: I'd always rather be lucky than smart. Yesterday Paul Krugman appears to have done something not very smart, but he might have gotten very lucky. In the post below, I criticized Krugman for making the very grave accusation in his New York Times column of July 22 that "Bush administration officials have exposed the identity of a covert operative." I observed that there appeared to have been no basis for Krugman to have assumed that the operative was "covert" -- and it would be her covert status that would make the exposure into what Krugman called "a criminal act."

Shortly after my column was published, a reader told me about an article on the website of New York Newsday of which I had been unaware. This article appeared to corroborate Krugman's claim. Corroborate, but not justify -- the timing of its publication makes it unlikely that it was Krugman's source (and even if he had advance knowledge of the story he did not cite it), so its corroboration may have been nothing more than a stroke of luck -- one that has saved Krugman from having made an over-reaching claim. And the Newsday piece only corroborated, it did not prove. It remains unclear whether the Newsday story is accurate; its claims have not been corroborated or even repeated by any other major newspapers as of this writing.

I decided yesterday that it would be prudent to remove the post from this website while I evaluated the new information -- for good or for ill, that's one of the things we web publishers can do. But at the same time, I committed to myself that that it would be re-posted as soon as possible with whatever amplifications or corrections were required. Krugman may bury his problems, but not me. What follows is my entire original post -- not a word has been altered. At four points I have inserted comments to incorporate new information, presented in gray type and set off by ***asterisks.


I smell another New York Times retraction coming up. And a big one. Paul Krugman has made a statement in his Times column today which -- if it had been directed against a private individual rather than public officials -- would almost certainly trigger a libel suit. It's an extraordinarily serious allegation, tantamount to accusing Bush administration officials of treason.

"...Bush administration officials have exposed the identity of a covert operative. That happens to be a criminal act..."

Krugman has been raking President Bush over the coals for his "16 words" in the State of the Union address -- so now, let's do a little raking with these "18 words" of Krugman's. Let's start by putting Krugman's 18 words in context (which is more than Krugman ever does when he quotes President Bush):

"And while we're on the subject of patriotism, let's talk about the affair of Joseph Wilson's wife. Mr. Wilson is the former ambassador who was sent to Niger by the C.I.A. to investigate reports of attempted Iraqi uranium purchases and who recently went public with his findings. Since then administration allies have sought to discredit him — it's unpleasant stuff. But here's the kicker: both the columnist Robert Novak and Time magazine say that administration officials told them that they believed that Mr. Wilson had been chosen through the influence of his wife, whom they identified as a C.I.A. operative.

"Think about that: if their characterization of Mr. Wilson's wife is true (he refuses to confirm or deny it), Bush administration officials have exposed the identity of a covert operative. That happens to be a criminal act; it's also definitely unpatriotic."

Okay, let's look at this statement under the microscope, and watch a lie being born.

We'll start with the first sentence: "And while we're on the subject of patriotism, let's talk about the affair of Joseph Wilson's wife." First, we're not "on the subject of patriotism." It's a peculiar error for a newspaper well known for being heavily copy-edited, but other than the title of the column -- "Who's Unpatriotic Now" -- there's was no reference to patriotism in the column whatsoever. And similarly, there's no "affair of Joseph Wilson's wife" -- these two paragraphs are the attempt to invent one. 

***Another reader alerted me to an online column by David Corn on the website of The Nation, published on July 16, two days after the Novak column mentioned in Krugman's column. It has been quoted, discussed, and linked on several other websites -- none of great note, but arguably this constitutes an "affair." This matter was also mentioned prominently in a feature on Wilson on "NBC Nightly News" on Monday evening, aired as Krugman's column was going to press. The Newsday article appeared even later than that, posted on the paper's website at 9:48 PM, EDT.

***A follow-up Newsday story today suggests the "affair" has graduated to a cause celebre, complete with denunciations and calls for investigations by Democratic senators.

The second sentence: "Mr. Wilson is the former ambassador who was sent to Niger by the C.I.A. to investigate reports of attempted Iraqi uranium purchases and who recently went public with his findings." What a coincidence -- it just so happens that Wilson "went public" by publishing an op-ed in none other but the New York Times itself on July 6. Considering that Krugman's Times column is a defense of copyrighted material that appeared in the Times, journalistic ethics demand that this potential conflict of interest be disclosed. But then...

The third sentence: "Since then administration allies have sought to discredit him — it's unpleasant stuff." What's the "unpleasant stuff"? Krugman never says -- so we are left to imagine a vicious smear campaign that does not, in fact, exist. CIA director George Tenet discussed Wilson's report (without naming Wilson) in his courageous statement in which he expressed regret that the Niger intelligence had been cited in the State of the Union address. While Tenet argued both that the investigatoin was incomplete and that elements of it partially supported the Niger intelligence, he said nothing whatsoever disparaging of Wilson. Presidential spokesman Ari Fleischer said in a press briefing the day after Wilson's Times op-ed that there was "zero, nada, nothing new here." And in another press briefing the day after Tenet's statement, Fleischer forcefully argued that Wilson was presenting a one-sided view of his investigation for the media. But there was no "unpleasant stuff" whatsoever. About the most "unpleasant stuff" I can find is the fact that Bush and security advisor Condoleezza Rice affronted Wilson's pride by not having known about his work prior to the inclusion of the "16 words" in the State of the Union -- a regrettable omission that they freely admit.

The fourth sentence: "But here's the kicker: both the columnist Robert Novak and Time magazine say that administration officials told them that they believed that Mr. Wilson had been chosen through the influence of his wife, whom they identified as a C.I.A. operative." Isn't it remarkable that Krugman would quote conservative icon Robert Novak as an authority on anything more important than the time of day? Well, partisan punditry make strange bedfellows. Here's what Novak said in a July 14 Chicago Sun-Times column:

"Wilson never worked for the CIA, but his wife, Valerie Plame, is an agency operative on weapons of mass destruction. Two senior administration officials told me his wife suggested sending Wilson to Niger to investigate the Italian report. The CIA says its counter-proliferation officials selected Wilson and asked his wife to contact him. 'I will not answer any question about my wife,' Wilson told me.

And here's what Time reported in a July 17 story:

"And some government officials have noted to TIME in interviews, (as well as to syndicated columnist Robert Novak) that Wilson's wife, Valerie Plame, is a CIA official who monitors the proliferation of weapons of mass destruction. These officials have suggested that she was involved in her husband's being dispatched [sic] Niger to investigate reports that Saddam Hussein's government had sought to purchase large quantities of uranium ore, sometimes referred to as yellow cake, which is used to build nuclear devices.

"In an interview with TIME, Wilson, who served as an ambassador to Gabon and as a senior American diplomat in Baghdad under the current president's father, angrily said that his wife had nothing to do with his trip to Africa. 'That is bulls__t. That is absolutely not the case,' Wilson told TIME. 'I met with between six and eight analysts and operators from CIA and elsewhere [before the Feb 2002 trip]. None of the people in that meeting did I know, and they took the decision to send me. This is a smear job.'"

This is a "smear job"? To say that Wilson's wife "suggested" or "was involved" in Wilson's trip? For one thing, who's to say it's not true -- according to Novak, the CIA agrees Plame was "involved" -- and if it is true, is it still a smear? And what if it's false -- what exactly is the "unpleasant stuff" here? Is it the implication that Wilson's wife finagled an all expenses paid trip for her hubby to Niger? Now maybe if he were investigating Iraqi uranium purchases from Maui I could see the point, but it seems to me the most "unpleasant" element of it is that it suggests that Ms. Plame must not like her husband very much.

*** These remarks were, perhaps, too flip. They were made assuming strongly that Ms. Plame is not a covert operative, in which case exposing her involvement is only a matter of casting doubt on Wilson by suggesting nepotism. But if she is a covert operative, then exposing her could endanger her. In Newsday, Wilson asserts that the purpose of that would be "to keep anybody else from coming forward."

Now on to the fifth sentence: "Think about that: if their characterization of Mr. Wilson's wife is true (he refuses to confirm or deny it), Bush administration officials have exposed the identity of a covert operative." Huh?! When did "their characterization" of Ms. Plame go from being an "operative" (per Novak) or an "official" (per Time) to being a "covert operative"? That's Krugman's characterization. That's not reporting... that's not commentary... it's just plain old making stuff up. Apparently the Times has learned nothing about fact-checking from the Jayson Blair scandal -- or perhaps Krugman longs for the same kind of Pablo Picasso-like "retirement" from the Times that former executive editor Howell Raines told Charlie Rose he intends to enjoy -- now that he's been chucked out onto the hard pavement of West 43rd Street.

*** This is the heart of the matter: Did Krugman have reasonable grounds to make the leap from "operative" and "official" to "covert operative"? Maybe Ms. Plame is, in fact, exactly that -- but one thing's for certain: nothing in his Times column provides grounds for saying so. The fact is that in his column he offers no source beyond Novak and Time, and those two sources simply don't justify what Krugman said.

*** A national security official I spoke to late yesterday ventured, "The bottom line is that Krugman couldn't possibly know, unless he has a reliable CIA source." Well, we can't rule anything out, but what about media sources?

*** It turns out that Corn's column on The Nation website could have been a source, but Krugman didn't cite it. Corn refers to Wilson's wife as "an undercover CIA officer," "a CIA operative who apparently has worked under what's known as 'nonofficial cover,'" and "a woman known to friends as an energy analyst for a private firm." He says "the Bush administration has screwed one of its own top-secret operatives." I don't know how Corn knows all this, since he says Wilson wouldn't tell him "whether she is a deep-cover CIA employee," and he cites no other sources. Did Krugman know about the Corn column? Hard to know -- but if he did, then why didn't he cite it?

*** In the "NBC Nightly News" story on Monday night, Andrea Mitchell said, "Wilson tells NBC News the White House deliberately leaked his wife’s identity as a covert CIA operative." But Wilson says no such thing himself on camera, so I have to be skeptical about whether Wilson really told Mitchell something he refused to tell both Corn and Newsday. In any event, the timing of the broadcast makes it virtually impossible for this to have been Krugman's source, unless he had advanced notice of this piece.

*** The Newsday article states flatly in its second paragraph, "Intelligence officials confirmed to Newsday Monday that Valerie Plame, wife of retired Ambassador Joseph Wilson, works at the agency on weapons of mass destruction issues in an undercover capacity." And later, "A senior intelligence official confirmed that Plame was a Directorate of Operations undercover officer who worked 'alongside' the operations officers who asked her husband to travel to Niger." If Krugman had seen this seemingly open-and-shut admission, once again, why didn't he cite it?

*** Is the official admission reported by Newsday true? The national security official I spoke with was unaware of the Newsday story, although he was intensely aware of the whole "affair." He denied any official confirmation concerning Plame's status, covert or otherwise. This is consistent with the approach taken by White House spokesman Scott McClellan in a press briefing yesterday afternoon. Asked whether "the administration deliberatively blew the cover of an undercover CIA operative," he said, "That is not the way this President or this White House operates. And there is absolutely no information that has come to my attention or that I have seen that suggests that there is any truth to that suggestion." Assuming that both McClellan and Newsday are being truthful, then Newsday's "senior intelligence official" source is probably CIA. Several Newsday quotes from the official confirm this, such as "We paid his air fare." Who's the "we" if not CIA?

*** CIA or not, something about this is fishy. For whatever reason, none of the three major newspapers -- the New York Times, the Washington Post, nor the Wall Street Journal -- have yet to report on Plame's covert status, even after Wilson's seeming statement to that effect on "NBC Nightly News," the seeming official admission in Newsday, and yesterday's public statements by Democratic senators. The only exception is Krugman's column in the New York Times -- and as I said in the text above, "That's not reporting."

Okay, we're almost there -- one sentence to go: "That happens to be a criminal act; it's also definitely unpatriotic." Well, there we have it. It's one thing for Krugman to use every dirty trick in the book to disagree with the policies of the Bush administration (though even there, only an utterly amoral partisan would agree that his end justifies his means). But this is something far worse. He has accused the Bush administration of endangering the life of a "covert operative" by exposing her. He has, in essence, accused the Bush administration of a conspiracy to commit treason.

If that's not what he really means -- if that's not what the New York Times means -- then it is most urgent that a retraction be immediately forthcoming.

*** I suspect that the Times will rely on the seeming official admission in Newsday to justify not making a retraction. And surely this subject will appear in their pages again soon, as well as the pages of the Post and the Journal. My best guess at this time is that it will turn out that Novak's original sources were administration officials simply eager to trivialize Wilson, and themselves trivializing in their own minds any impropriety in revealing Ms. Plame's CIA connection. After all, they may well have reasoned, Wilson had "outed" his own CIA connection already by going public with his CIA-sponsored mission. It will probably turn out that Ms. Plame is, indeed, a covert operative of some kind, and that will be further confirmed obliquely by various government sources (but that's not the kind of thing that the CIA is likely to ever admit on official letterhead). In the meantime, we can be sure that the administration's enemies will do all they can to make this whole sorry "affair" as controversial and damaging for the administration as possible.

>>Correction [7/22/2003]: As originally written, I mistakenly referred to Wilson's investigation as a "report" as though it had been assembled in written form; it had not. I have amended the text above to reflect this.

>>Correction [7/23/2003]: A reader named John Corn has kindly informed me that the name of the columnist mentioned above is David Corn, not John Corn. My apologies to both Corns. I have amended the text above to reflect this.

>>UPDATE... Be sure to read Matthew Hoy's comments today on this Krugman column. He's caught Krugman in the act of a Dowd-like "phantom correction."
>>UPDATE 2... A reader comments on our letters page about Caspar Weinberger's op-ed on Wilson in the Wall Street Journal on July 18. Is this the "unpleasant stuff"?

Posted by Donald L. Luskin at 2:08 AM | link   


Monday, July 21, 2003

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DID BUSH MAKE CONGRESS LIE?   
Did President Bush deliberately lie about budget deficit projections as Paul Krugman claims in his Friday New York Times column? If so, then the conspiracy of fraud extends further than Krugman dared to imagine.

Bloomberg's Caroline Baum wrote in, saying,

"I have only one thing to say about that ridiculous Krugman column... if the White House's Office of Management and Budget is fudging the numbers, I guess the non-partisan Congressional Budget Office is doing the same."

Reader Sean Davis chimed in with the same observation, and backed it up with the numbers.

"Compare the January CBO baseline to the January OMB baseline.

Deficit/Surplus Projections in Billions of Dollars

    2003 2004 2005 2006 2007 2008
OMB Baseline -199 -145 -73 -16 26 65
CBO Baseline -264 -158 -40 5 29 51

"So if Bush lied, then CBO lied to an even greater extent by painting a rosier budget scenario than Bush. They predict a surplus a full year earlier than Bush does!

"Now let's look at the analysis of the President's proposed budget (CBO analysis was done in March; OMB analysis was done in January):

    2003 2004 2005 2006 2007 2008
OMB POTUS Budget -304 -307 -208 -201 -178 -190
CBO POTUS Budget -287 -338 -270 -218 -173 -166

"Again, CBO appears to be painting a rosier budget picture. By Krugman's own logic, they must have lied as well. So the real question must be: Did Bush put the CBO up to it, or did they lie independently? I will wait with baited breath for his column on that subject."

It wouldn't be beyond Krugman to draw the CBO into the Bush conspiracy. Remember, this is a guy who thinks the media is dominated by conservatives.

Posted by Donald L. Luskin at 12:03 PM | link   

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UNTRUE SENTENCES   
Paul Krugman's Friday New York Times column extends the "Bush lied" theme to include "Bush lied about economics." With this subject -- lying about economics -- Krugman has finally found something he is truly qualified to write about based on long and deep personal experience.

Krugman claims that Bush lied about burgeoning federal budget deficits in order to ram through his tax cuts, just as he supposedly lied about weapons of mass destruction to push through the war against Iraq. The very first line of Krugman's column confidently takes it as given -- beyond any need for discussion or proof -- that Bush lied about Iraq.

"Here's another sentence in George Bush's State of the Union address that wasn't true: 'We will not deny, we will not ignore, we will not pass along our problems to other Congresses, to other presidents and other generations.'"

If this is another untrue sentence, what was the first one? If it's the famous 16 words about African uranium -- "The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa" -- then Krugman has started his own column with a sentence that is untrue (perhaps I should say another sentence that is untrue). Because whatever else one may criticize about the intelligence concerning African uranium, Bush's statement itself was indisputably true.

But for Krugman, Bush is a liar even if what he says is true. And having thus falsely impugned the president's character in the column's first paragraph, Krugman goes on to make a very serious accusation. Krugman charges that Bush's budget projections were the result of a conspiracy of deliberate fraud. Krugman repeats this four times in the column:

  • "...the administration's claims to fiscal responsibility have rested on thoroughly cooked books."
  • "...budget analysts were pressured to high-ball estimates of future revenues and low-ball estimates of future expenditures."
  • "...the administration got us here with cooked numbers."
  • "...his administration continues to fudge the numbers..."

Yet for the apparent gravity of this accusation, Krugman does not offer even the slightest shred of evidence. No details on how numbers were "cooked" or "fudged," no testimony from analysts who were "pressured." Nothing. Just baseless accusations by a Princeton economics professor writing in the pages of the "newspaper of record." By the time a week is out, these charges will be repeated elsewhere, as facts, with the New York Times cited as their authoritative source.

The closest thing Krugman offers to evidence is to point out that the administration's budget projections have not been perfectly accurate. But has any president's budget projections ever been perfectly accurate? As David Hogberg put it on his Cornfield Commentary blog,

"Krugman should know his recent budget history well enough to know that you shouldn’t put too much stock in budget projections: they are the economic equivalent of reading tea leaves. Back in 1997 the Office of Management and Budget projected a budget deficit of $121 billion for 1998... Recall that 1998 was the year the deficit turned to surplus..." of $69 billion.

Krugman not only accuses Bush of lying about the deficit -- he claims, as he has done in many previous columns, that the deficit is leading toward a fiscal catastrophe. He says, "Right now the U.S. government is running deficits bigger, as a share of G.D.P., than those that plunged Argentina into crisis."

James Clarke points out on his Right On Everything blog that Argentina's financial crisis was not caused by its deficits, but by the effect of its rigid currency exchange rate mechanism on its central bank's ability to regulate its money supply: its "peg to the US dollar may have been faulty." And, incredibly, Krugman -- whose claim to fame as an economist is in the area of international trade -- agrees! Both in the article posted on his personal website and in his Times column covering the Argentine crisis, he blames the exchange rate mechanism and never even mentions deficits once. Yet now, it's deficits that "plunged Argentina into crisis."

Even the most casual scan of the history of federal budget surpluses and deficits reveals that over the last quarter century, big deficits (as a fraction of GDP) have occurred in recession years like the present ones, as a result of falling tax receipts. Many economists would argue that the willingness to tolerate deficits in recessions is one key to getting out of those recessions. But David Hogberg notes that this causes problems for Krugman's anti-Bush arguments:

"Krugman finds himself in a bit of a pickle. Some readers might recall that he is a Keynesian (or is it neo-Keynesian?) ...Krugman believes that government spending can get us out of a recession by boosting consumption. Thus, why is it such a bad thing to run a deficit if it means that government is spending more?"

Neo-Keynesian? Or just a traditional tax-and-spend liberal? You make the call, but I can't think of a single instance in which Krugman has objected to government spending. In fact, he's protested that Bush isn't spending enough on homeland security; he's endorsed Richard Gephardt's proposal to provide tax credits to extend medical insurance to the uninsured; he's blasted the GOP for wanting to cut spending on social programs; he's excoriated Tom DeLay for blocking refundable child credits for people who pay no taxes; and he's urged extension of unemployment benefits and aid strapped states.

So deficit spending is great when Krugman wants it, or when Keynes prescribes it -- yet when Bush does it, Krugman dismisses it as a mere excuse, as "the last defense of the budget deficit." But does Krugman admit it will help the economy?

"...'yes, but.' Yes, deficit spending stimulates demand — but tax cuts for the rich, which have dominated the administration's economic program, generate very little employment bang for the deficit buck."

Krugman ignores the fact that Bush's tax cuts were for all Americans who pay income taxes, not just the rich. Be that as it may, he never explains why Keynes' deficit prescription would normally work, but will not work now in the presence of tax cuts for the rich. Does Keynes' theory hold that such tax cuts somehow suppress the demand that the deficit spending stimulates? And if tax cuts for the rich don't generate much employment, would more be generated by Krugman's prescription for tax cuts that would be "temporary, and go largely to low- and middle-income families"?

Krugman started by accusing Bush of uttering "another sentence...that wasn't true." I had to look long and hard, but I finally found a sentence once uttered by Krugman that was true. It's from his 1994 book, Peddling Prosperity, in which he wrote of the Reagan era deficits, which were far larger than today's as a percentage of GDP:

"The deficit is not nearly the monster that some people imagine."

Now who's cooking the numbers around here...?

Posted by Donald L. Luskin at 5:37 AM | link   


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