Tuesday, September 28, 2010

Krugman's Non Sequitur

In his comments about Howard Kurtz's profile of him, Paul Krugman declares himself to be a Great Man of Principle: "I support tax increases that will reduce my own after-tax income...."

That is fine, and I figured all along that Krugman, who makes in a year what many of us would have to work a lifetime to earn, would claim that if he is taxed more, the entire country would be better off. Maybe.

But the next line struck me as odd:
I worry greatly about unemployment, even though my own living is secure; I warn about growing inequality, even though I’m of the class that has gained from rising disparities; I’m upset about the direction this country is going, even though my own life is comfortable.
My question is this: How has Krugman gained from "rising disparities"? Is Krugman saying that because his income is rising, the incomes of others MUST fall?

If he is, then, economically speaking, he is giving us a non sequitur and is subscribing to the "fixed pie" argument in economics. That is, there is no such thing as real economic growth; the economy is fixed, and if one person gains, that automatically means that someone else loses.

That is a Third-World view of how an economy works. But, then, a person who subscribes to Y = C + I + G + (X-M) as the Gospel of Economics is going to have a skewed economic perspective.


Paul said...

Isn't he saying that he worries about inequality even though he's on the 'better off' side of it, and hence might seem to have no need to worry about it? Doesn't sound at all like a non-sequitur to me, whatever else there is to criticize about it.

William L. Anderson said...

No, he is saying that he benefited from "inequality." It follows that if his income is high, the reason is that others have low incomes. In economic analysis, one does not necessarily follow the other.

Ike said...

Actually, you're both wrong, and it's even worse than you thought.

Krugman is subscribing to a premise that dictates Fairness is the optimum.

He's nodding his head in a self-righteous bout of Reverse Schadenfreude (Eduerfnedahcs?), worried because others haven't benefited as much as he has.

Every metric of wealth, comfort and standard of living tells us that we are all better off than we were 30 years ago, when Reagan, Stockman and Laffer made the impardonable sin of stealing a page out of JFK's playbook instead of FDR's.

Krugman actually has no idea what he is saying... it's all a part of the Liberal Conscience attempting to steal the moral high ground. You see, to Krugman, the rich are presumed selfish unless proven otherwise. And Paul's clear enunciation that he's willing to make the supreme sacrifice (of *what*, he suspiciously fails to enunciate) in order to buttress his failed economic and political ideology.

The mere existence of on intellectual who is willing to act against his own perceived self-interest is proof enough that his Heart and his Virtue are in the right place, and therefore we must follow him!

(Of course, when poor and dirty stupid conservatives want to vote against increases in government programs designed to "help" them, they are derided for not knowing what is good for them. They are NEVER virtuous for voting against the interests liberals would ascribe to them. Instead, they become the latest Arkabamippi joke, or worse, an entire book about what's wrong with people in Kansas.)

You are right, that Krugman is wrong. But his flavor of wrong is far more sinister than you let on.

Scott D said...

Yeah, there's something really fishy about his statement here. He's essentially saying that he is one of many people in his "class" who have been awarded privelege at the expense of others. You could even argue that he's saying, "I have not earned my money honestly."

It's a real balancing act, being wealthy and yet denouncing wealth accumulation as the reason for poverty. Krugman must try very hard not to seem to be a hypocrite, even to himself. Hence his very strange statement about class and his being "concerned".

Paul said...

I think Ike's criticism is probably correct - certainly I'd guess that's Krugman's motivation. But from the words that Krugman writes:

*He worries about inequality.
*He is in the group that has gained from inequality.
*There is another group that has not gained from inequality (and because we know that Krugman is well off, we can assume he's referring to the not well off group)
*He says nothing about whether that other group has become poorer, or just stayed the same.
*Further, he doesn't say that his gain came at the expense of that other group.

It's entirely possible he's saying what Ike implies, but he could just be saying that he thinks inequality is bad in and of itself, and making the point that he thinks this even though he might appear to have benefited from it.

Tom said...

With more than due respect to Krugman, he may be alluding to the recent census report that the gap between rich and poor has widened.

AP Lerner said...

"Every metric of wealth, comfort and standard of living tells us that we are all better off than we were 30 years ago"

This comment is complete and utter nonsense. FYI - we are living with record levels of poverty according to the latest Census report. And, as Tom points out, record levels of inequality. And middle class incomes have not budged in decades.

Of course, since folks on this blog do not believe in statistics, data, and facts, I'm sure these realities have gone unnoticed.

What metrics of wealth and comfort are you talking about? The metrics of government employees? Sure, if you have a cushy government funded job like Prof. Anderson, life is good these days. Well, until a Republican takes over as governor and starts slashing education spending.

Tim Johnston said...

Paul's response was also mine.

A poor choice of words on Krugman's part but it reveals his ideology, I think, namely that disparaties of wealth must mean the poor are getting poorer while the rich get richer - which is not necessarily the case.

callahan auto said...

AP - your reply is complete and utter nonsense. Nothing you wrote actually disproves the post you responded to. Rising inequality alone proves nothing relative to certain income groups becoming richer or poorer in an absolute sense. Your other points provide no further insight whatsoever.

You show a tremendous shallowness of thought for someone who holds their own intellect in such high regard. Clean it up.

Bob Roddis said...

Maybe Krugman should feel guilty about getting paid for what he writes.

Daniel said...

Wayne -
How is this a fixed pie perspective at all???

Where does he say "I have gained from others losses". He doesn't all he's said is that he's the beneficiary of all of these trends. He's on the "rich get richer" side of the inequality story.

My concern is that all of your posts seem to be driven by a willful misreading of Krugman.

Do you actually believe Krugman thinks these things? You can't possibly believe that. When you write your posts as if he does when the plain English of Krugman's posts is available for anyone to read, you only make yourself look silly.

Aren't there more rewarding things to blog about than this?

AP Lerner said...

"My concern is that all of your posts seem to be driven by a willful misreading of Krugman."

Willful misreading is being generous. I'd say blatant misrepresentation would be more accurate.

jgo said...

"Every metric of wealth, comfort and standard of living tells us that we are all better off than we were 30 years ago"

Whattayamean "we", stranger? Some of us were a lot better off 23-30 years ago (and much of it can be traced to specific legislation -- from the Carter to Obama admins which started kicking in 1983-01-01 and since).

Don't confuse aggregate historical statistics like median and mean with what happens to/with individuals and their conditions in the present. How fat are those tails on the distribution? How does it appear in longitudinal studies of individuals?

There is no "gap" between "rich" and "poor"; it's a continuum, and people move and jump from location to location on the continuum over time. Talk of a "gap" is just a propaganda ploy.

OTOH, those "record levels of poverty" are about where they've been since the "Great Society" scams were launched. Part of the reason is that the bar keeps getting adjusted.

Daniel said...

AP Lerner -
What can I say, I'm a generous guy.

callahan auto said...

Daniel -

A portion of Krugman's quote is as follows: "even though I'm of the class that has gained from rising inequalities". Krugman is strong suggesting, or at the very least implying that his class has "gained" at the expense of other classes. This is certainly not an unreasonable position to take given Krugman's history and rhetoric. Also, not the the president framed the issue as a question as in "i wonder". He did not use a declarative statement implying certainty.

You characterizing the professor's view here as "willfully misreading" Krugman is well, I don't know, willfully misleading.

Lastly, a piece of advice. If AP agrees with you, you are probably wrong.

Paul said...

Callahan - in that case, let's just answer the original question:

"Is Krugman saying that because his income is rising, the incomes of others MUST fall?"

No. He's saying that the rich and poor have grown farther apart, and he's in the rich group. He's also saying that he worries about that.

Everything else is being projected onto him (perhaps reasonably, given his record), and is not what he's saying.

callahan auto said...

Paul - Did you totally ignore everything I wrote? You obviously have a different interpretation of what Krugman wrote, no problem.

I am simply saying that the words he chose and given his history, it is a very reasonable view to take that Krugman believes his class has "gained" at the expense of other classes.

My main point being that such an interpretation does not require a "willfull misreading" of what Krugman wrote in his blog.

Paul said...

Callahan - No, I didn't ignore what you said. And you're right, what you suggest is a reasonable conclusion to draw from Krugman's background.

But you also made the excellent point that the original post was asking a question, specifically "Is Krugman saying that because his income is rising, the incomes of others MUST fall?"

The answer to that is no. It might be what Krugman thinks, but in the piece referenced it's not what he is saying.

To break it down even more, assume that 10 years ago Krugman was paid $10 and I was paid $5. Now he's paid $20 and I'm still paid $5. He's of the group that has gained from rising disparities, and I am not. That's all he *said*, whatever you might choose to *infer*.

As an aside, I'm concerned about rising inequality. This isn't because I care about what rich people get paid (or poor people), but because of research that suggests that inequality in and of itself makes for dysfunctional societies (e.g. parts of http://en.wikipedia.org/wiki/Economic_inequality#Social_cohesion). I've no idea if that's something Krugman is concerned with, I mention it only to show it's possible to be concerned about inequality without being a class warrior.

callahan auto said...

Paul - fair enough...I agree with you that it would be incorrect to conclude that Krugman is saying that the income of other classes "MUST" fall and he very well may be saying what you suggest. That said, the use of the word "gain" is an interesting choice if the only concern is that inequality is rising irrespective of the absolute increase/decrease of a specific class. A better choice of word would be "earned".

Paul said...

Callahan - 'Gained' does carry a hint of 'someone else lost' (though it doesn't require it) so I quite agree with your point. I suspect Krugman wouldn't like the substitution of 'earned' though - that word carries a hint of having worked for it, and a lot of people have just been in the right place at the right time (or had the right parents).