Your Paul Krugman crib sheet

Posted By Daniel W. Drezner Monday, November 16, 2009 - 2:28 PM

In his New York Times column today, Paul Krugman writes about the problem of macroeconomic imbalances between China and the United States. Which is fine, except he wrote the exact same column last month. Just like last month's column, this one makes some good points and fails to mention some important dynamics. Beyond the inclusion of a useful footnote, however, there's nothing new here.

As part of an ongoing public service to busy readers of Foreignpolicy.com, the hard-working staff here at the blog is ready to help you bypass the chore of having to read the same Krugman column time and again with this handy-dandy crib sheet. My guess is that the next six months' worth of Krugman columns will boil down to the following assertions:

The root of macroeconomic imbalances is the Chinese (undervalued) peg to the dollar;
Obama and Geithner should be "tough" on China's dollar policy;
Concerns about incipient U.S. inflation are... er... inflated;
That goes double for long-term concerns about rising debt levels;
The February 2009 stimulus was too small;
The Republicans are blinkered;
The Obama administration should act in a more partisan and progressive manner.

Now, let me stress that I agree with 1, 3, and 6 at this point, and I'm agnostic on 4 and 5, so it's not like Krugman is wrong in what he's saying. It's just that he's saying the same damn thing over and over again.

COMMENTS (12)

EXPLORE:CHINA, DOLLAR, PAUL KRUGMAN

Meet the newest neocon

Posted By Daniel W. Drezner Monday, February 9, 2009 - 2:56 PM

I'm 50% convinced that Paul Krugman's op-ed today is correct, and the moderates wound up damaging the stimulus more than they improved it.

The thing is, I'm also 50% convinced that Krugman is to Keynesians as Richard Perle is to neoconservatives. When an embittered ideologue derides his political leader for demonstrating a willingness to compromise and "negotiating with yourself," well, one does get the sense of deja vu.

The rhetorical parallels between neocons and Keynesians are increasingly disturbing. Martin Wolf argued late last week that "shock and awe" is required to stimulate the global economy -- a point seconded by Krugman. Critics of the Keynesian approach are summarily dismissed as wingnuts.

Not all Keynesians are acting in this manner. Brad DeLong has provided substantive rebuttals to critics of the stimulus.

I'm in the Ken Rogoff camp on the economy -- I'm somewhat dubious about the ability of any stimulus package to really jumpstart the economy, and very wary about the long-term costs of this strategy (for one thing, Bretton Woods II still needs to be unwound). But I also don't have a better idea and "the situation is so dangerous it has to be tried."

But I also know that when I hear anyone using rhetorical tropes that remind me of Richard Perle, I run like hell in the opposite direction. And Krugman is increasingly sounding like Perle.

UPDATE: See Clive Crook and Will Wilkinson on this point as well.

COMMENTS (5)

EXPLORE:MEDIASPHERE, KEYNESIANS, NEOCONSERVATIVES, PAUL KRUGMAN, STIMULUS

Let's talk Paul Krugman down from the ledge

Posted By Daniel W. Drezner Friday, August 15, 2008 - 4:29 PM

A few years ago, at some long-forgotten conference, I was on a panel with Paul Krugman about the future of trade openness. I was in a pretty gloomy mood at the time because of all of the protectionist rhetoric coming out of world capitals. Krugman was more optimistic; he thought that the postwar trade institutions could withstand a little protectionist rhetoric. I bring this up because Krugman is the one in a gloomy mood today:

[C]an things fall apart again? Yes, they can. Consider how things have played out in the current food crisis. For years we were told that self-sufficiency was an outmoded concept, and that it was safe to rely on world markets for food supplies. But when the prices of wheat, rice and corn soared, Keynes’s “projects and politics” of “restrictions and exclusion” made a comeback: many governments rushed to protect domestic consumers by banning or limiting exports, leaving food-importing countries in dire straits. And now comes “militarism and imperialism.” By itself, as I said, the war in Georgia isn’t that big a deal economically. But it does mark the end of the Pax Americana — the era in which the United States more or less maintained a monopoly on the use of military force. And that raises some real questions about the future of globalization. Most obviously, Europe’s dependence on Russian energy, especially natural gas, now looks very dangerous — more dangerous, arguably, than its dependence on Middle Eastern oil. After all, Russia has already used gas as a weapon: in 2006, it cut off supplies to Ukraine amid a dispute over prices. And if Russia is willing and able to use force to assert control over its self-declared sphere of influence, won’t others do the same? Just think about the global economic disruption that would follow if China — which is about to surpass the United States as the world’s largest manufacturing nation — were to forcibly assert its claim to Taiwan.

I can understand Krugman's concerns, and if George W. Bush keeps demanding things that Russia ain't going to do, then the official Drezner Protectionism Advisory System will shift from Edge of the Cliff to Crossed the Rubicon.* It's that last paragraph where the slippery slope problem creeps up, however. I know it's cool and hip to lump all non-democratic states together right now, but it's worth pointing out that China is not Russia. Oh, and Taiwan is not Georgia. The last thing the Chinese want right now is a major disruption of the system. And, thankfully, in the last Taiwanese elections, the Saakashvili-type candidate lost. Even before he lost, the Bush administration had sided with China more than Taiwan. The point is, while I'm not thrilled with recent developments, I'm not as gloomy as Paul Krugman. *Based on this post, the five advisory levels of the Drezner System are, in ascending order of worry: