George Will Smacks Down Paul Krugman With Simple Reaganomics
By Noel Sheppard | October 10, 2010 | 21:00
George Will on Sunday once again proved how little Nobel laureate Paul Krugman actually knows about economics.
As the Roundtable segment of ABC’s “This Week” approached its conclusion, host Christiane Amanpour referred to French Finance Minister Christine Lagarde’s claim earlier in the program that her country’s economy is already growing and doesn’t need any further stimulus spending.
Krugman, who is always interested in government laying out more dollars it doesn’t have, bashed Lagarde’s view saying, “I think she's got a fantasy, which is a popular European fantasy, which bears no relationship to what's actually happening.”
With the ball nicely teed up, Will smacked a monster drive down the middle of the fairway that would make Tiger Woods proud (video follows with transcript and commentary):
CHRISTIANE AMANPOUR, HOST: Well, let's just talk about the economy right now, because you heard what Christine Lagarde said, very, very tough on austerity, saying that her numbers show that it's actually working. Why should there be more stimulus? I just want to play what Alan Greenspan said about this also this week, and then we'll discuss it.
(BEGIN VIDEO CLIP)
GREENSPAN: I know everyone says, let's wait for a couple of years, keep the stimulus going, and then we'll solve the problem. I think that's a very risky strategy. I don't -- I don't deny that -- if I knew that was -- you could do that, that is obviously the best strategy. I'm not sure the markets are going to allow them to do that.
(END VIDEO CLIP)
AMANPOUR: Paul?
PAUL KRUGMAN, NEW YORK TIMES: Let me just -- I don't know quite how to say this. Christine Lagarde said, "Let's not talk about theory. Let's talk about the numbers." My numbers are not the same as hers. The European Commission numbers say that the unemployment rate in France is going up, not down. So I don't know where she's getting that from. And where she says people are worried about the deficit, the people who have a real stake in worrying about the deficit are investors, bond investors. Interest rates are at near record lows in all of the G-7 countries. I think she's got a fantasy, which is a popular European fantasy, which bears no relationship to what's actually happening.
GEORGE WILL: For 20 months now, we've had the most rapid expansion of federal discretionary spending in our history, not just in nominal dollars, but relative to the size of the economy. In that 20 months, private-sector non-farm employment has declined by 1 million jobs. We have a contrast. In 1983, when the Reagan tax cuts kicked in, we had a booming job creation which, relative to the size of this economy, would translate to 7 million new jobs.
(CROSSTALK)
KRUGMAN: All of this is -- that boom in federal spending never happened. Once you take out the stuff -- the special emergency spending, it just never happened. And, you know, Reagan had the help of a huge cut in interest rates.
The ignorance and/or dishonesty on display here was astonishing. To claim there has been no boom in federal spending in the past two years requires what Hillary Clinton would call a willing suspension of disbelief.
George W. Bush's fiscal ’09 budget originally called for outlays of $3.1 trillion. This indeed ballooned to $3.52 trillion.
However, if such an increase was just “special emergency spending” as Krugman claimed, we should have seen a decrease in expenditures after the financial crisis ended.
Of course, nothing could be further from the truth for FY ’10 spending rose to $3.72 trillion, and FY ’11 is projected to be $3.83 trillion.
As such, Krugman is either horribly informed as one of the Left’s most respected economists or he’s a liar.
As for Reagan having “the help of a huge cut in interest rates,” Krugman just moments before said, “Interest rates are at near record lows in all of the G-7 countries.”
Indeed. The current federal funds rate is basically zero, and is therefore far lower than when Reagan was president making it quite fascinating to see a Nobel Prize winner in economics contradict himself in roughly sixty seconds.
Maybe most importantly, expounding on Will’s point that clearly Krugman will never agree with, a 20 percent increase in federal spending combined with the lowest interest rates in American history has yet to bring down the unemployment rate in this country.
If that is not an indictment of Obamanomics, I don’t know what is.
*****Update: After getting smacked down by Will, Krugman decided to reiterate this nonsense in his column Monday.
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Comments
I'll go with liar.
Submitted by kch50428 on Sun, 10/10/2010 - 9:12pm.
As such, Krugman is either horribly informed as one of the Left’s most respected economists or he’s a liar.
Krugman is a liar.
I concur.
Submitted by mattm on Sun, 10/10/2010 - 11:21pm.
I concur.
I used to watch the last 30 minutes of this show.
Submitted by Texndoc on Sun, 10/10/2010 - 9:18pm.
On Sunday mornings I always choose the Fox News Sunday show over Meet the Press and after it's conclusion would tune to the ABC News panel because usually the timing was it was just the start of the panel discussion. These days I can't last more than 5 minutes because the panel is about as balanced as watching "The View". Christiane AND Travis Smiley AND Paul Krugman versus little George Will? Not watching. I don't care if George Will does slap back with some marvelous moments now and then - and he does*. We need more than just him.
(* one of my favorite moments was a panel discussion on the "Inanity" of comments from Christine O'Donnell, Sharron Angle, etc and he marvelously thundered "And you were all silent with "We are the ones we have been waiting for!" which is the most inane thing ever said by a campaign in recent years!")
ABC should be embarrassed
Submitted by seeseebutler on Mon, 10/11/2010 - 5:02pm.
I do not know how ABC News can dare claim to be unbiased when it regularly has lopsided panels on its Sunday morning talk show. If it were really concerned it would be ashamed of what the show has become under the left wing leadership of that islamic sympathizing radical Christiane Amanpour.
Krugman is the typical
Submitted by pwoz on Sun, 10/10/2010 - 10:13pm.
Krugman is the typical limp-wristed liberal who knows he's full of S, but still talks down to anyone who disagrees with him, as if they are 10000% incorrect. He was plugging Porkulus like it was the greatest thing since sliced bread, but once the failure started being noticed (fairly quickly), instead of admitting he was wrong, he said OMG WE NEEDED A BIGGER STIMULUS!!! INFRASTRUCTURE!!!! RAWR!!!!
Eat S and die, Krugman.
I think I have noodled out where Krugman gets this stuff
Submitted by Dave. on Sun, 10/10/2010 - 10:20pm.
It comes from the vodka in the coffee cup he always seems to have a death grip on.
-Dave
Can't Krugman be both?
Submitted by bobdog on Sun, 10/10/2010 - 10:52pm.
"As such, Krugman is either horribly informed as one of the Left’s most respected economists or he’s a liar."
Seems to me he can be both at the same time. It's not a mutually exclusive choice.
Wrong. Wrong. Wrong.
Submitted by The Vet on Sun, 10/10/2010 - 11:01pm.
Krugman: ...the people who have a real stake in worrying about the deficit are investors, bond investors. Interest rates are at near record lows in all of the G-7 countries.
Some 60% of our debt is short term debt - 2 year bonds. When investors get worried, interest rates will likely skyrocket. And we are stuck. This guy is an idiot.
Let's not knock Paul Krugman. He is admired and has the
Submitted by Rush Fan on Sun, 10/10/2010 - 11:50pm.
support of many respected Nobel laureates. Among them are experts in the field of Global Warming, Climate Change and Hoaxes (Al Gore), Faith, Gas Lines and the Jewish Issue (Jimmy Carter), and Apologies, Welfare, Racism and Wealth Distribution (Barack Obama).
So Paul Krugman joins a list of the finest Progressives and Socialist Nobel Prize winners this country has produced. Yes, these men are also noted for handling the truth recklessly, but that's beside the point. They are Nobel Prize winners, and George Will is not.
Nobel Appeasement Prize
Submitted by seeseebutler on Mon, 10/11/2010 - 4:56pm.
The list of winners says more about the leftist leanings of the Nobel selection committee then it does the winners. The Nobel Peace Prize has become a farce. It should be called the Nobel Appeasement Prize
Investment has decreased, not spending
Submitted by Andrew_M_Garland on Mon, 10/11/2010 - 12:31am.
The wrong diagnosis leads to disastrous policy, particularly when based on non-scientific but convenient dogma.
For example, George Washington was probably killed by draining out his blood, according to the medical theory of "bad fluids". How could doctors believe such a crazy thing? Because the body is complicated, they could not easily relate cause to effect, and they wanted to "do something, anything" to cure disease.
→ InteliHealth.com
→ Why Stimulus Doesn't Stimulate
. . Via Cafe Hayek - cafehayek.com/2010/10/some-links-50.html
Fred: We will all have jobs soon. The government is spending more on everything.
Mike: Who is going to do the hiring? I'm investing less in everything.
10/01/10 - Sacramento Bee by economist Ribert Higgs
[edited] Team Obama theorizes that additional government spending (demand) will cause businesses to boost production, add jobs, and trigger additional consumer spending that will ripple through the economy for a stronger overall recovery.
Yes, consumer spending is about 70% of America's gross domestic product, and an increase in consumer spending would provide an immediate boost. But, consumer spending increased slightly as a percentage of GDP during the downturn.
There was no decline in consumer spending, so what caused the downturn? Answer: a sharp decline in private investment. To revive investment, the government needs to stop threatening the profits from investment and remove the regulation and uncertainty that paralyzes new, long-term projects.
→ 06/26/10 - Easy Opinions - DIY Stimulus Policy
You too can do economics on a cocktail napkin, just like the guys from Harvard Business School. Don't be afraid of a few equations. They are only addition in a form that will impress your friends and the general public.
How long can a Man Dwel Amonng Monkeys
Submitted by Avitar on Mon, 10/11/2010 - 2:02am.
I predict that George Will will be at Fox News or a startup concervative outlet before 2012
Stimulus - it's already
Submitted by jdhawk on Mon, 10/11/2010 - 2:23am.
Stimulus - it's already happening and its a $1 trillion dollars. Its called QE II.
Freeddie Krueger and that moron Alan Greenspan are both getting what they want.
Don't you see it?????
The Federal Reserve is throwing into our economy up to 1 trillion dollars of stimulus in the form of QE II. It will move the markets up and keep Wall Street and investors happy.
With that accomplished, they are doing the dimocrats work for them. The dimocrat do not have to cut spending and they, if this works, will not have to or at least be recalcitrant to cut taxes in the future. Meanwhile, tax cuts are off the table until the new Congress takes up the measure in January 2011.
In other words, unless both houses of Congress are taken over in veto proof numbers by Republicans - which is impossible - the dimocrats keep the legislation that they have already passed and are able to stop Republicans from all but blame for the economy until the next election in 2012.
We're screwed.
George Will - you need to move away from the liberals. They are poison. You leaving this network will bring down this ultra liberal commentary program. It will be the end of Amanpisser.
Can anyone say
Submitted by Iron Tigers Vet on Mon, 10/11/2010 - 6:26am.
"The Peter Principle"?
Krugman shows his incompetence every time he opens his trap!
I cannot believe anyone can
Submitted by Beukeboom on Mon, 10/11/2010 - 6:48am.
I cannot believe anyone can be THAT stupid so I must go by Occam's Razor and surmise that Krugman is just being blatantly dishonest in his shilling for Obama.
OT: NIce New Look
Submitted by Chris Of Rights on Mon, 10/11/2010 - 6:48am.
:)
Krugman's so caught up in the
Submitted by HockeyKid on Mon, 10/11/2010 - 7:17am.
Krugman's so caught up in the esoterica of his beloved New Trade Theory (now quite long in the tooth) that he's competely lost sight of fundamental economics. He's been steeped in controlled trade models for so long that he's completely forgotten how free trade and individual decision making work. He's a one-trick pony who will continue to dine out on his Nobel prize for the rest of his life, even though he contradicts himself regularly.
"Beauty is only skin deep, but liberal's to the bone." - me
So I guess Obama's entire
Submitted by eaglewingz08 on Mon, 10/11/2010 - 7:27am.
So I guess Obama's entire budget is an 'emergency spending' measure? And once you take out that entire budget, nothing is left to 'stimulate' the economy. Too bad the Nobel Committee can't ask for its prize back. But then again, they'd only take them back from rational conservative economists, (whom they'd never give the prize to in the first place).
Amazing
Submitted by libfail on Mon, 10/11/2010 - 8:36am.
Europe isn't even wanting to do stimulus bills yet these yahoos keep pushing for em. Who would have thunk that?
Nobel Appeasement Prize
Submitted by seeseebutler on Mon, 10/11/2010 - 4:54pm.
deleted