Paul Krugman and the Unbearable Lameness of Partisanship

In a recent appearance on bloggingheads.tv with Mark Schmitt, I expressed disdain for the current spate of conservative-bashing books by Jonathan Chait, Greg Anrig, and Paul Krugman. Now don’t get me wrong: conservativism deserves some fairly spirited bashing these days. But what I objected to about these books was their crude partisanship – specifically, their grossly distorted, black-hats-versus-white-hats version of recent American political history.

I didn’t get a chance there to flesh out my criticisms in any detail, so I’d like to do a little bit of that here. And thanks again to bloggingheads.tv (if you’re not familiar with it, it’s really a terrific site), I’ve got an excellent jumping-off point: an interview of Paul Krugman by none other than Mario Cuomo. Cuomo, it turns out, is an excellent interviewer, carefully drawing out Krugman’s views and gently challenging him at a number of points. And the picture of Krugman that emerges is one of a man completely besotted with ideological enthusiasm.

You have to remember who Paul Krugman is, or at least who he was: an immensely talented economist, winner of the John Bates Clark medal, capable of analytical ingenuity at the most rarefied level and simultaneously a gifted popularizer of complex economic ideas. So how can someone with so much brainpower, with such talent for subtlety and insight, say something like this? Or this?

Let’s focus on these two snippets. In the first, Krugman says that the middle-class society he grew up in (i.e., the American political economy of the quarter-century after World War II) did not evolve by the invisible hand of the market; it was created by FDR and the New Deal. Meanwhile, the “second Gilded Age” we now live in (i.e., the American political economy of the past quarter-century) was created by Reagan and other right-wing politicians.

And in the second clip, Krugman defines liberalism as the idea that we are our brothers’ keepers, and that government needs to ensure a basic minimum for all citizens. Conservatives, on the other hand, believe “you’re on your own.”

In these clips we see, not subtlety or insight or analytical ingenuity, but the Manichean worldview of the true believer: one mass political movement, defined by its noble intentions, accomplishes unalloyed good, while a rival mass political movement, motivated by base and selfish values, works to undo that good.

For an alternative to Krugman’s stick-figure morality play, you can read my book on the coming of mass prosperity and its cultural and political consequences. For present purposes, though, note just a few things that Krugman’s FDR worship/Reagan demonization skips over:

  • the extent to which widespread prosperity was the result of impersonal market competition rather than benevolent politicians
  • the extent to which the “great compression” of the early postwar decades was created by the cataclysms of depression and total war
  • the extent to which the New Deal included policies that most economists today of whatever ideological persuasion would regard as utterly wrongheaded (e.g., the farm subsidies regime of the Agricultural Adjustment Act, and the industrial cartelization attempted by the National Industrial Recovery Act)
  • the heavy reliance of the New Deal political coalition on support from southern segregationists, and the consequences of that reliance for the shape of many New Deal policies
  • the fact that the postwar system of political economy led after a couple of decades to stagflation and a breakdown in productivity growth
  • the fact that one after another unionized American industry proved incapable of keeping pace with foreign competition during the ’70s and ’80s, and thus that business as usual was unsustainable
  • the fact that Great Society social programs were followed, not entirely coincidentally, by an explosion of crime, urban riots, family breakdown, and welfare dependency
  • the fact that Cold War liberal internationalism produced the Vietnam debacle
  • the fact that the New Left and the ’60s counterculture exerted powerful influences on reshaping the character of American liberalism, with important consequences for the appeal of that liberalism to traditionally Democratic working-class constituencies
  • the fact that the sweeping economic deregulation of the ’70s and ’80s enjoyed bipartisan support (much of it occurred during the Carter administration)
  • the extent to which the increase in measured income inequality reflects demographic rather than economic or public policy changes (e.g., more single-parent households, more dual-earner households, more immigration, older population, better-educated population)
  • the fact that, according to virtually every conceivable physical indicator, material living standards for Americans across the board have risen dramatically over the past quarter-century (i.e., the so-called “second Gilded Age”)

How can someone as intelligent and informed as Krugman concoct an interpretation of the post-World War II era that does such violence to the facts? How can someone so familiar with the intricate complexities of social processes convince himself that history is a simple matter of good guys versus bad guys? Because, for whatever reason, he has swapped disinterested analysis and scholarship for ideological partisanship. Here, in a revealing choice of phrase, he paraphrases Barry Goldwater’s notorious line: “Partisanship in the defense of liberty is no vice.”

To be a partisan is, by definition, to see the world partially rather than objectively: to identify wholeheartedly with the perspectives of one particular group and, at the extreme, to discount all rival perspectives as symptoms of intellectual or moral corruption. And the perspective Krugman has chosen to identify with is the philosophically incoherent, historically contingent grab bag of intellectual, interest group, and regional perspectives known as postwar American liberalism.

Of course, over the period that Krugman is addressing, the contents of that grab bag have changed fairly dramatically: from internationalist hawkishness in World War II and the early Cold War to a profound discomfort with American power in the ’70s and ’80s to a jumble of rival views today; from cynical acquiescence in Jim Crow to heroic embrace of the civil rights movement to the excesses of identity group politics to a more centrist line today; from sympathy for working-class economic hardship to hostility to working-class culture and back again. Yet with a naive zeal that leaves even Cuomo visibly nonplussed at several points in the interview, Krugman embraces the shifting contents of this grab bag as the one true path of virtue.

I understand the us-versus-them pleasures of ideological partisanship. In my younger days, I indulged in them with gusto. But at some point, ideology joined Santa Claus and the tooth fairy in my attic of discarded beliefs. Firm values, yes; definite points of view on contested empirical questions, to be sure – but to see a country as diverse, yet blessedly prosperous and stable, as this one as an ongoing war between angels and devils is to live in a fantasy world.

[cross-posted from www.brinklindsey.com]

In Utah, You Work for the UEA

On November 6, Utahns will vote on a referendum to decide the fate of a statewide voucher program passed by the Utah legislature and signed by the governor earlier this year. As anyone who knows anything about public schooling would have predicted, the major force fighting against choice has been teacher unions, with the National Education Association (NEA) having donated at least $1.5 million to date to the anti-choice cause. And, as this article in yesterday’s Salt Lake Tribune makes clear, defeating choice is an obsession for the state’s NEA affiliate, the Utah Education Association (UEA). Of course it is, because monopolists will stop at nothing to protect their monopoly. But this begs a question to which almost everyone must already know the answer, but many just won’t admit it: Who really works for whom? Do public school teachers work for the public, or does the public really work—and pay taxes—for the teachers?

The answer is all too clear, and that alone ought to make people in Utah, and around the country, support as much school choice as they can get.

Corporate Tax Cut Revolution Continues

From the Canadian Financial Post:

The Conservative government delivered a mini-budget yesterday that lowered the Goods and Services Tax for a second time and reduced corporate taxes by one-third over the next five years as part of a $60-billion multi-year package of tax cuts…Perhaps the biggest surprise was Mr. Flaherty’s commitment to cut the corporate income tax rate deeper than planned, from its current 22.1% to 15% in 2012.

To put this in context, $60 billion over five years means about $12 billion per year. Since the American economy is about 10 times larger, the equivalent cut here would be about $120 billion per year, which is pretty big cut.

The average federal/provincial corporate tax rate in Canada today is 36%. Thus, cutting the federal rate by 7 points should drop the average combined rate to about 29%. By contrast, the combined U.S. federal/state rate is about 40%.

Here’s the interesting political part:

Liberal leader Stéphane Dion said his party would not oppose the measures, ensuring they receive Parliamentary approval as early as today…The proposal comes as Mr. Dion toured the country arguing for lower business rates and promising, if elected, to take the general corporate rate lower than the 18.5% the Conservative government had initially proposed.

That’s the Liberal party leader, in a country where “liberal” used to mean left-of-center statist. It seems that everywhere but Washington, the times are a changin’.

Former Narcotics Cop Creates a Tell-All Video

Barry Cooper was a narcotics cop in Texas who made countless arrests. But when he started busting the relatives and friends of politicians, he found himself in trouble with the law. Disgusted with this turn of events, Cooper came up with an idea to get even with the authorities. He created a DVD called Never Get Busted Again. The DVD reveals dozens of ways to avoid detection and arrest by narcotics officers. The DVD is causing a stir in law enforcement circles, but Cooper is unbowed. He has plans for another DVD called Never Get Raided Again. Interestingly, Cooper admits that he feels quite guilty about raids that he was personally involved in: “I used to break into houses at three o’clock in the morning with 10 other men, after throwing a flash grenade through the window,” Cooper says. “I would drag Mom and Dad away and send the kids to the department of human services — over a bag of pot — and totally ruin that entire family.” And those are just the raids where no one is injured or killed. Cato has documented plenty of raids that go awry.

In my book, After Prohibition, three former law enforcement officers explain how they started out as drug warriors but eventually came to the view that the drug war was not only not working, but it actually has disastrous side-effects. Colorado Sheriff Bill Masters is another example. Early in his career, Masters received awards from the DEA for his drug busts. Later, Masters turned against the war and wrote a terrific book called Drug War Addiction. There are so many cops breaking ranks these days, that there is now an organization called Law Enforcement Officers Against Prohibition (LEAP).

For Cato scholarship on the drug war, go here. I also recommend this recent essay by Ethan Nadelmann. And for more info on how to handle yourself in a confrontation with the police, go here.

Update: Several individuals who work in the drug reform movement have emailed me to say that they dispute the quality and accuracy of Cooper’s Never Get Busted Again DVD.  I thank them for alerting me and wanted to pass it along.  Buyer beware.  For what it’s worth, I can and do recommend the Busted DVD from Flex Your Rights.

Halloween Fright From Iowa Tax Collectors

Trick-or-treating just got a bit more expensive thanks to the hobgoblins at the Iowa Department of Revenue. The tax-hungry bureaucrats have decided to tax pumpkins because they are used for decoration instead of food. Yahoo.com reports:

The Iowa Department of Revenue is taxing jack-o’-lanterns this Halloween. The new department policy was implemented after officials decided that pumpkins are used primarily for Halloween decorations, not food, and should be taxed, said Renee Mulvey, the department’s spokeswoman. …Previously, pumpkins had been considered an edible squash and exempted from the tax. The department ruled this year that pumpkins are taxable — with some exceptions — if they are advertised for use as jack-‘o-lanterns or decorations.

But in the glorious tradition of bureaucracies everywhere, there is a form to fill out - at least for taxpayers who eat pumpkins:

Iowans planning to eat pumpkins can still get a tax exemption if they fill out a form.

This sounds like added bureaucracy, but Iowa taxpayers should be happy. By this time next year, the bureaucrats will decide that some people are falsely claiming that they are eating pumpkins in order to dodge the tax. So the new form will require families to send in photos of pumpkin pie. The following year, some bureaucrat will decide that some of the pies were actually bought in stores, so tax exemptions will only be allowed if a bureaucrat is invited over for dinner. I’m just kidding, of course. At least I think.

On a more serious note, special tax exemptions for pumpkins based on their use is symptomatic of why the tax code is a mess. It’s a mess in Washington, and it’s a mess in the states. The common thread in all cases is that politicians try to micro-manage the economy (and raise campaign cash) by imposing penalties and creating loopholes. The ultimate victims are the small business owners who now will have even more of their time consumed by bureaucratic nonsense:

Kautz, who has owned his farm for seven years, was particularly dismayed with the notion of requiring customers to fill out a form verifying that they planned to eat the pumpkins they were buying. “It’s another crazy, crazy, stupid thing,” he said. Kautz said he will estimate how many pumpkins were bought for non-food purposes, and then will send the tax on that amount to the revenue department. “It gets unfeasible for people to have small businesses,” he said. … Other Iowa pumpkin sellers also expressed confusion about the new policy. … None said they are asking customers to fill out the tax-exemption certificate.

Arabic Lamp of Liberty Re-Lit!

Arabs have had almost no access to the literature and the ideas of liberty….until now. The Misbah al Hurriyya (“Lamp of Liberty”) project of the Cato Institute is bringing Adam Smith, John Stuart Mill, Ludwig von Mises, F. A. Hayek, Milton Friedman, and many more thinkers to the Arab public. The team behind the Lamp of Liberty, notably Editor Fadi Haddadin and Business and Promotions Manager Ghaleb Hijazi, have outdone themselves with a newly redesigned website for the project: www.misbahalhurriyya.org.

It’s got more than a new look, though. Now you can see the incredible success of Ghaleb’s syndication of hundreds of articles to the Arab press, find information on Misbah al Hurriyya books, including John Stuart Mill’s On Liberty, Ludwig von Mises’s Economic Policy, F. A. Hayek’s The Road to Serfdom, Johan Norberg’s In Defense of Global Capitalism, and the Economic Freedom of the World Report, and browse through hundreds of studies, articles, and essays. The site also features Mudawwanat al Hurriyya (“Blog of Liberty”), an interactive map of economic freedom (in the bottom left corner), policy debates, video streaming of interviews, online books, and much, much more.

Even those who can’t read Arabic will appreciate the ingenuity and brilliant design of the site. And when you know that it’s presenting a positive alternative to the violence, oppression, and poverty that have plagued so much of the Middle East and North Africa, you will know that the positive attractions of what Adam Smith called “the simple system of natural liberty” – rather than more violence and military force – are a powerful response to the ideas of statism and intolerance. Ideas aren’t generally defeated with mere force; ultimately, it takes another idea.

The re-designed Arabic Lamp of Liberty will be joined soon by its Kurdish [www.chiraiazadi.org] and Persian [www.cheragehazadi.org] sister projects. They’re all part of Cato’s Center for Promotion of Human Rights family of projects, including the existing Spanish [www.elcato.org] and Russian [www.cato.ru] projects (each with books, podcasts, websites, and more) and forthcoming Portuguese, Azeri, French, and African (in English, French, and Portuguese) initiatives. Ten team members of the African initiative will meet in Tanzania at the African Resource Bank meeting in a few weeks. Anyone who’s interested in supporting the promotion of libertarian ideas and policies around the world should contact the Institute. (Any funds specified for a particular language or region will be spent only on works in that language or region.)

Latest Income Tax Data

Data releases by the IRS attract much attention as pundits dig through to find out which types of taxpayers paid more or less income tax.

The Joint Committee on Taxation recently released its own data on federal income tax payments, which is somewhat different. The latest IRS data is for 2005, while the JCT data are estimates for 2006. Another difference is that the JCT data include estimates for nonfilers, which gives a more universal view of the population than the IRS data.

Here is a summary table based on the JCT data (see Table 2, page 37).

Observations:

  • 57.6% of households paid income tax in 2006, meaning that 42.4% did not pay any income tax.
  • Looking at the similar JCT table for 1990, that 42% nonpayer share is up from about 30%. Some of the reasons include the expansion of the earned income tax credit (EITC), the creation and expansion of the child tax credit, and President Bush’s new bottom tax rate of 10%.
  • The JCT data show that for 2006, 23 million filers received $43 billion in EITC, which is a key reason why most people at the bottom do not pay any tax.

As Sallie discusses, it is a problem for a democracy–particularly one less constrained by constitutional rules than in the past–to have such a large and growing share of residents not paying any tax because these folks are unconstrained in campaigning for more benefits for themselves at the expense of others.

(Yes, all workers pay federal payroll taxes, but that is often wiped-out for those at the bottom end by the receipt of EITC payments from the Treasury. And, of course, low-income workers receive an array of Social Security and Medicare benefits loosely tied to their payment of payroll taxes).