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Thursday, August 12, 2004

Krugman vs. O'Reilly: Luskin Helps Referee

Last week, Paul Krugman debated Fox's Bill "Factor" O'Reilly on Tim Russert's CNBC show. During the debate, O'Reilly distorted Krugman's columns:
Mr. O'REILLY: Well, I don't buy that all. And, you know, Mr. Krugman is a smart guy, but Mr. Krugman was absolutely dead 100 percent wrong in his columns two years ago when he predicted the Bush tax cuts would lead to a deeper recession. You can read his book and see how wrong he was.

Prof. KRUGMAN: Actually, you can read it. I never said that.

Mr. O'REILLY: Sure you did...

Prof. KRUGMAN: I said that it would lead to a lousy job creation...

O'Reilly: Column after column after column. You made the point, in your book, okay, that these cuts, these tax cuts were going to be disastrous for the economy.

Krugman: Nope!

O'Reilly: They haven?t been.

Krugman: Uh, uh, I'm sorry. That's a lie. Let me just say, that's a lie.
So who's right? One way to find out is to read all of Krugman's columns. I've read them all and I have no doubt that Krugman is accurately representing what he wrote and O'Reilly isn't.

A faster way is to read the blog of Krugman-stalker Donald Luskin. Yesterday, Luskin scoured Krugman's columns for us, looking for someplace where Krugman had incorrectly predicted that Bush's tax cuts would lead to a "deeper recession" over the last two years. Here's three of the four items on his list (the forth item is just as silly, but it's silly in a different way, so I've cut it in the interests of brevity):
So Krugman predicted a "fiscal crisis" and a "fiscal train wreck" due to huge tax cuts for the rich in the face of record deficits. Sounds pretty bad, and recessions are pretty bad, so Luskin and O'Reilly think that Krugman must have predicted a recession!

Well, no. As you can tell from Luskin's quotes, without even looking at the complete articles, Krugman wasn't talking about the short term. He's wasn't making predictions of a prolonged recession, a prediction that could have been proven wrong over the past two years, as O'Reilly claims. Krugman is predicting something that will begin to bite in 10-15 years, "once the baby boomers retire in large numbers." He's predicting something that will be dealt with by a "future administration," as he wrote in the March 11, 2003 column.

In these column, Krugman is justifiably worried about long-term budget problems: "fiscal" just means relating to the federal budget. He's worried that when the Social Security system has to start withdrawing from the trust fund, and Medicare costs soar, there won't be enough tax revenue to pay the bills. Since Krugman has repeatedly charged that Bush aims to "starve the beast," to provoke a crisis where there's no choice but to drastically slash Social Security, Medicare, and the rest of the welfare state, one would think this point would be hard to misunderstand.

So why did O'Reilly and Luskin both think they could get away with distorting Krugman's writings? I think Krugman has O'Reilly's number when he complained post-debate about "how hard it is to argue with a pathological liar. Because the problem is in real time, as it's happening, you can't fact check everything."

Luskin's strategy is different. He's blogging, where links and quotations are expected, so it's harder for him to flat-out lie. Instead, he just strips out the context. The first four sentences in the Krugman-O'Reilly exchange above, with their names in caps, aren't included in Luskin's account of the debate. So Luskin makes it seem as if O'Reilly didn't make the foolish charge that Krugman predicted a "deeper recession" in the short run. He wants the reader to think that Krugman is denying that he predicted that the tax cuts would be "disastrous." Krugman has certainly warned that we may be heading for disaster, but he's been talking about a decade or two down the road, not in the last few years.


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