Great moments in economics journalism

This morning’s Washington Post contains a gloomy story from Frank Ahrens about the prospects for recovery compared with the prospects for a slowdown or the dreaded double-dip recession.

In the story, one liberal (Paul Krugman) and one conservative (an equity strategist on Wall Street) were cited as sources. That’s not so surprising.

What is surprising is that the writer takes a full paragraph to examine Krugman’s perceived “biases” — that is, that he believed the federal economic  stimulus was too small, and hence believes more stimulus is needed to prevent further economic problems.

Those don’t seem like “biases” so much as “a point of view,” but OK.

The trouble is, the Wall Street guy has no such disclaimers affixed to his argument about maintaining the Bush tax cuts on the richest Americans. In case you’re keeping score at home: A Nobel-prize winning economist requires numerous caveats. A Wall Street guy with a personal economic stake in his political views is presumably objective.

This offends me almost as much as Ahrens transcribing his back-and-forth e-mail exchange with the guy — including printing the portion of his reply that is ALL CAPS. I think there is a bipartisan consensus that this constitutes reader abuse.



    July 8, 2010 at 8:50 am

    The problem with Paul Krugman is that he thinks we can spend ourselves silly to get short term economic activity, and then magically switch gears to curb the huge deficit at a later date. At this point, Congress has neither the will or the ability to cut spending at a level that would have any impact. As long as we rely on consumer spending to pump the economy, we will run huge trade deficits, and there will be no sustainable growth in jobs.We are on a course to disaster, and the more we listen to folks like Krugman, the quicker we will get there.

  2. Jeff Shaw

    July 8, 2010 at 9:01 am

    The thing is, we *can* spend now and curb the deficit later. Economic growth leads to more prosperity, which leads to more tax revenue, which pays down the deficit.

    They said the same thing about FDR’s spending — and about Clinton’s. Can someone remind me the last time we had a balanced budget?

    When you have an economic crisis the level of ours, you have two choices: follow FDR’s example (public spending to stimulate growth) or Hoover’s (fiscal “austerity” based on spending cuts).

    One gets you out of a depression; the other puts you squarely in one.


    July 8, 2010 at 10:03 am

    Democrats always like to go back to the old tired FDR argument that is now 80 years old, and not very appropriate for our current economy. No longer can we employ large numbers of workers in massive infrastructure jobs like the 1930’s. The recent huge stimulus program of almost a trillion dollars has been largely misdirected, and most folks will agree an abysmal failure in terms of creating any real growth of jobs. As for Clinton, he had the benefit of no wars, low defense spending, and a big surplus of Social Security revenue, none of which we enjoy today.

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