Okrent Swings and Misses

In his final column as NY Times Public Editor, Daniel Okrent charged that "Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers," but didn't bother to give a single example to support his smear. Krugman, not surprisingly, took offense. Okrent responded with some specific charges, which Krugman then devastatingly rebutted, as has Brad DeLong.

Krugman and DeLong don't bother to answer some of Okrent's sillier charges, so let me. Okrent criticizes:

[Krugman's] 1/27/04 assertion that the cost of unemployment insurance "automatically" adds to the federal deficit. This two-fer misrepresents a pair of facts: that unemployment insurance is largely borne by the states, and that major federal contributions to the states come about only because of an act of Congress, which is hardly automatic.

Obviously this quibble over Krugman's use of the word "automatic" has no relevance at all to Okrent's original charge: that Krugman misrepresents the numbers. Presumably this is why Krugman and DeLong ignore it.

But it's worth pointing out just how ignorant Okrent's complaint is. Krugman is just using the absolutely standard language economists use to describe this particular aspect of fiscal policy, called "automatic stabilizers." For example, in his undergraduate textbook, Greg Mankiw (recently chair of the Bush Council of Economic Advisors) writes

"The system of unemployment insurance automatically raises transfer payments when the economy moves into a recession, because unemployment rises." [Mankiw, Macroeconomics, 1992, pp. 324-5]

which is something you'll find in pretty much any macro textbook, whether written by a conservative or a liberal. And which is almost exactly what Krugman originally wrote. Let me join with Jonathan Chait is saying that Okrent ought to be ashamed. 
¶ -the Chef 5/31/2005 07:45:00 PM |