Thursday, December 7, 2017

WAR: Paul Krugman vs. Greg Mankiw

These two really do not like one another. This is the economics version of Trump versus Kim Jong-un.

Here's Mankiw's post which provides a good sense of the entire battle:

Paul Krugman...Sigh

I usually refrain from commenting on all the silliness found over at Paul Krugman's blog. But in a post a couple days ago, Paul is especially dyspeptic and calls me out by name. Let me offer a few comments.

1. Paul says I have never admitted to making a math error. Well, I would if I thought I made such an error. I make them all the time. But in this case I am not convinced.  Neither is University of Chicago professor Casey Mulligan, who thinks Paul made a math error. I spoke with several other economists (some of whom share Paul's politics) and they don't see Paul's point either.

2. Paul says that economists like me have not been sufficiently critical of President Trump and his policies. Let me point out

A . I said during the election that I would not vote for him.
B.  I criticized his obsession with the trade deficit.
C.  I encouraged tax reform to be revenue neutral.
D.  I called the tax bill an "unworkable mess."
E.  I lamented the new tax on university endowments.
3. Paul thinks that economists like me should be more vocal about how horrible the tax bill is. I might be if I thought it was completely horrible, but despite its many flaws, there are parts that I like, including the lower corporate tax rate, the move to a territorial tax system, the reduced deduction for state and local taxes, and the scaled back mortgage interest deduction (in the House bill). Overall, the tax bill is a mixed bag, with some bad features and some good features.

4. Paul seems to take the position that unless you agree with him about the tax bill, you are unprincipled. In the world as I see it, reasonable people can disagree, and progress is best made when people do not question the moral rectitude of others simply because they hold different opinions.

But Krugman may have had a point when he wrote:
[P]eople like Greg Mankiw and Martin Feldstein, who have written in favor of the general idea of lower corporate taxes, which is OK – that’s a position one can hold in good faith, even if I disagree (and even if Mankiw at least seems to have screwed up his analysis without admitting error). But have any of them spoken out about the reality of the actual legislation, the bad analysis being offered by political figures, the corrupt political process? I may have missed some condemnations, but I haven’t seen any.
PREDICTION: Krugman will fire back at Mankiw with North Korean style nuclear weapons. We will get to see how far they reach. Pass the popcorn.


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