November 03, 2003,
Schadenfreude that's that word for taking pleasure in the other guy's failure. But what's the word for that feeling you get when you've been hoping for the other guy to fail, but he ends up succeeding . . . spectacularly? A schadenfreudian slip? How about Krugmanfreude?
The latter was the suggestion of ex officio Krugman Truth Squad member John Davidson. It's the perfect word for what America's most dangerous liberal pundit, Paul Krugman and the whole Democratic party, for that matter must be feeling right now as they face the reality of last Thursday's announcement that gross domestic product grew at a stunning 7.2 percent annual rate in the third quarter. That's the fastest rate in almost twenty years.
Krugman has used every possible form of hyperbole to damn President Bush's economic policies: "train wreck," "banana republic irresponsibility," "obviously ... heading us in the direction of fiscal catastrophe," and so on. So this great economic news really is a world of Krugmanfreude, and Krugman isn't taking it all that well.
Last Friday, Krugman still managed to churn out his regular New York Times column. He did the best he could with it. As ex officio Krugman Truth Squad member Lindsay Osbon put it, "The hard part about eating crow is making it look like it tastes good." Here's Krugman smiling while he chews:
... it's possible that we really have reached a turning point. If so, does it validate the Bush economic program? Well, no. Stimulating the economy in the short run is supposed to be easy, as long as you don't worry about how much debt you run up in the process.
New Krugman Truth Squad member, NRO contributor Jerry Bowyer (author of The Bush Boom), told me by e-mail, "My favorite part is when he said that it’s easy to get a short term stimulus. This from the crowd that said the Bush stimulus plan had no short term stimulus effect." KTS stalwart Matthew Hoy, on his blog HoyStory.com, nailed Krugman's attempt to snatch defeat for President Bush from the jaws of prosperity:
Bush can do nothing right when it comes to the economy nothing. If the economy remains in the doldrums, then it's because of Bush's tax cut ... If the economy improves, then it only does so in spite of Bush's tax cut and other economic policies and even then it doesn't matter because the government's running a deficit ... there's no way you can win.Here's the best shot Krugman can take at Bush at this point:
... it would be quite a trick to run the biggest budget deficit in the history of the planet, and still end a presidential term with fewer jobs than when you started. And despite yesterday's good news, that's a trick President Bush still seems likely to pull off.Not bad, under the circumstances. I'm sure all of that will be repeated endlessly by Democratic politicos in the media echo chamber. But there's not a single idea in those 47 words that isn't based on economic trickery. Let's take it apart, concept by concept.
First, are we running "the biggest budget deficit in the history of the planet"? Krugman Truth Squad stalwart Tom Maguire had the answer for that on his Just One Minute blog. He wrote,
Imagine, if you will, that George Bush had announced yesterday that, under his stewardship, the US economy had grown more than in any previous quarter in history ... in nominal, no adjustment for inflation or anything else terms, this is our biggest quarterly increase ever. And no one cares. Because the correct growth measure is as a percent of GDP. And if Bush said otherwise, we would all agree he was being duplicitous, or stupid. Or maybe we wouldn't. ... when Prof. Krugman describes the "biggest budget deficit in the history of the planet" he can only be speaking in nominal terms.Indeed. As a percentage of GDP, even using the worst-case "on-budget" budget deficit to make things look as bad as possible, the Office of Management and Budget's 2004 estimate of 4.3 percent is smaller than in sixteen other years (and not much larger than it was in the comparable year of Bill Clinton's first term in office). If we use the "total" budget deficit, then even in dollar terms when adjusted for inflation there have been larger deficits in seven of the last twenty years. And the planet endures.
Let's talk about whether Bush will "end a presidential term with fewer jobs than when [he] started." As Krugman Truth Squad member Robert Musil pointed out on his Man Without Qualities blog, it's all a matter of which jobs statistics you look at. Naturally, Krugman chooses to look at the worst. He focuses on the "payroll" survey produced by the Department of Labor, which shows 2.6 million jobs lost since Bush took office. But the DOL's alternate jobs statistics the "household" survey that is used to compute the unemployment rate shows that the economy is down only 273,000 jobs. That small job deficit can be cured with even the most modest recovery over the next year.
But even if we use the tougher "payroll" statistics that Krugman insists upon (as though they were the only statistics), it may be a lot easier than Krugman wants to admit for Bush to end his first term with a net jobs gain. On what theoretical or empirical grounds can Princeton economist Paul Krugman say this "likely" won't happen? (For the record, Krugman has softened on this point. Last month he told MSNBC's Buchanan & Press that a first-term jobs decline is "a near lock now unless there’s a miracle."
The facts don't support Krugman on this; he must simply be sticking to his anti-scientific partisan conviction that everything Bush does is wrong. But if you step away from partisan prejudice and look at the simple facts and pull statistics from the DOL's website it's clear that what Krugman calls a "miracle" is, in fact, quite typical. In fact, in 57 percent of the 12-month periods starting after 1948, jobs grew at a rate equivalent to today's economy adding 2.6 million jobs.
If it were pure luck, history would suggest that Bush has better than a 50/50 chance over the next 12 months to pull it off and Bush actually has 15 months. A "lock"? Krugmanfreude.
What are other more serious and less-politicized economists saying about the prospects for jobs? What do the world-class econometric models say the ones that look at dozens of real-world factors and are not straightjacketed by Krugman's political orthodoxy? Krugman Truth Squad member Steve Antler an economics professor at Roosevelt University noted on his EconoPundit blog that the well-respected econometric model of Ray C. Fair, fellow at the International Center for Finance at Yale, is showing that
1. Job loss actually zeros out this quarter. By New Year's Day, 600,000 new jobs will have been generated by the recovery.When it happens, Krugman will be in an even greater world of Krugmanfreude beyond anything he can imagine today. But he'll probably still be calling it a "miracle." After all, that's what people always call things they don't understand.
At least Krugman will have one consolation: four more years of his favorite subject matter.