Economists have not had a good war. In the battle over how to understand and respond to the recent financial crisis and recession, few have emerged covered in glory and medals. Indeed, some economists and economic ideas have been tarred as the proximate causes of the waves of financial destruction that swept the Western world and elsewhere.
As is often the case, some of the sharpest shots have been unfriendly fire from within the profession: The most prolific--and prominent--sniper is surely Paul Krugman, an eminent Princeton University economist who for years has been shooting from his perch as a regular columnist in the New York Times and an occasional contributor to the paper's weekend magazine,
Professor Krugman is brilliant, and there are few students or instructors of economics who have not read carefully his work on trade theory, to pick one area in which his influence has been significant. Even his polemics are well done. His much-circulated essay on the state of macroeconomics (1) is a useful overview of the divides within the economics business--even if it did suffer from his tendency to employ straw-man caricatures of financial economists, his choice betes noires, who are all described as idiots savants whose naive trust in economic models to assign prices to financial assets was obviously silly.
But since taking on the role of public intellectual in the past decade, Krugman has allowed his passionate distaste for everything connected to George W. Bush to distort his writing and perhaps to undermine his credibility.
One example, a recent New York Times column, (2) begins by attacking Republicans for expressing doubt about the value of a public health insurance option, in other words a government-run health insurance component similar to what prevails in Canada. The Republicans are, I submit, undertaking a legitimate debate over health care funding and insurance (a debate mostly absent in Canada, I feel compelled to point out). Krugman quickly shifts to an attack on growing income inequality in the United States since 1980:
Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains. And then there's the small...