Krugman’s Dire Conclusion

When Paul Krugman writes about economics, he’s on target. When he steers into politics, he misses the boat. Take his concluding paragraph in his recent column, entitled, Know-Nothing Politics, in which he claims in his concluding paragraph that:

In any case, remember this the next time someone calls for an end to partisanship, for working together to solve the country’s problems. It’s not going to happen — not as long as one of America’s two great parties believes that when it comes to politics, stupidity is the best policy.

His entire column is spent opining on the energy policy debate spurred on by presidential bickering over the worth of offshore drilling and tire gauges.  If you haven’t been paying attention, Obama suggested that we could conserve enough oil as could be pumped via offshore drilling if everyone kept their tires inflated to auto manufacturer specifications.

The McCain campaign quickly put out the message that the Obama energy plan is in fact a tire gauge. The blogsphere ignited, howls of derision flamed in both directions. Krugman opted to join the fray, not providing the economic analysis of either-or, but simply taking up the position that it is only Republicans that are “party of stupid.” I guess he needed to do something about all those other columns he wrote in critique of various Obama policy.

In dissecting economic policy, Krugman, in March of 2008, had this to say:

The moral is that it’s important to take a hard look at what candidates say about policy. It’s true that past promises are no guarantee of future performance. But policy proposals offer a window into candidates’ political souls — a much better window, if you ask me, than a bunch of supposedly revealing anecdotes and out-of-context quotes.

Then Krugman was speaking to the Mortgage lending issues, yet now he favors ignoring those political souls. Fortunately, the LA Times, did look at the political souls of energy policy through campaign stump speeches and revealed some not-so-surprising observations.

The eagerness to put Obama’s remark through the meat grinder of literalness, and the glee with which the McCain campaign mocked the suggestion — staffers whipped up pocket air gauges labeled “Obama’s Energy Plan” — proves only one thing: When it comes to politics, conservation doesn’t sell. Many Americans are allergic to the suggestion that they should change behavior or moderate consumption, particularly when it comes to their automobiles.

Insert Jimmy Carter’s infamous sweater advice here, and you get the gist of what isn’t selling in Peoria.  So the LA Times informs us, tire pressure monitoring systems are mandatory in new cars, concluding that Obama’s advice is somewhat behind the times. The article also recounts how difficult it is to actually find an air pump and what the reliability of gas station gages are. All helpful context for the political commentary:

The tire gauge vs. offshore drilling debate frames a competition of world views. On one side are those who believe in conservation as a practical matter and, perhaps, a matter of “personal virtue,” per Vice President Dick Cheney. On the other are those who find the tire inflation message an insufficiently grand and inspiring idea, weak-wristed, retreatist. Offshore drilling has the romance of heavy industry, with hard-hatted men named “Deke” going after what America needs. What, after all, is more macho: an oil derrick or a tire gauge?

The offshore drilling position also enjoys the stupendous advantage of asking nothing from consumers.

Americans have never been sold on the collective power of numbers, the notion that small, relatively painless gestures of conservation can add up. And so Jimmy Carter will be immortalized as a feckless thermostat-watcher in a cardigan.

I’ve been standing in the AutoZone for about an hour now. I’ve bought a dent puller and some vinyl-restoring compound for my wife’s Jeep Cherokee. Then Ken Trenkelbach of Houston comes in to buy — aha! — a tire gauge. I ask him if his consciousness has been raised by Obama.

“I just want to make sure I have air in my tires,” he says.

Trenkelbach, who says he’ll probably vote for Obama, doesn’t have much sympathy for the oil and gas industry, even though he’s from Houston. But he also thinks Obama’s advice will go unheeded. People have known for years that they need to inflate their tires, he says. “What, now they’ll listen?”

So who is really stupid here–the political party that frame philosophical debates based on wishful thinking, or the political party that pragmatically understands that people don’t listen? I say it’s neither, the party responsible for the stupidity in politics is we the people. If journalists and opinion column writers spent more time explaining and analyzing economic policy, maybe just maybe we’d get less promises and more action out of our politicians.

source: NY Times, Know-Nothing Politics, By PAUL KRUGMAN, August 7, 2008

source: LA TIMES, Gauging the furor over Obama’s tire pressure remark, By DAN NEIL, Aug 8, 2008

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  • Anonymous

    Krugman is no economist if he doesn’t understand that drilling is going to increase the supply of oil which in turn will lower prices.

  • Rufus

    What’s wrong with trying to encourage people to use common sense? Read my lips, we cannot drill ourselves out of the stupidity of SUVs, et al. China is adding 25000 cars a day, Vietnam is adding 3500 scooters a day, India is adding 500+ cars a day. Off shore rigs are SOLD out for 5+ yrs. The ONLY answer is to do ALL of the following. Conserve, increase CAFE standards, discourage SUVs, drill when possible, but it is of little consequence – time to end the era of the fossil fuels asap. Gore and swiftboat Pickens agree on that – nuff said.

  • http://www.yourct.com Chris MC

    Doesn’t anybody here agree that supply-side economics is a valid description for present day economics; or consider themselves a “supply-sider”; or think that supply-side economics is good economic policy for the US?

  • Anonymous

    Oil is NOT a fossil fuel and is renewable:

    http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=59991

    So Viet Nam can add a bizzilion more putt-putts and China a gazzilion more Hummers and it wouldn’t matter a hill of rice.

  • Anonymous

    What about oilfields that lie under China? Don’t tell me there aren’t any; they had dinosaurs just like any other continent did. Why not open up drilling in China? In fact, why doesn’t CHINA open up drilling in China?

    “Gas guzzling SUVs”. I always get a good laugh out of this comment, because it’s almost always made by some envious cheap little 4-cylinder driver who can’t afford to buy an SUV.

  • anon

    It’s right under our noses, for heaven’s sakes. Olive oil, people. How many opened bottles do you have in the pantry? It’s cheaper and you can ingest it, if necessary.

  • Charles the Hammer

    With all due respect, it is unlikely to find any reasonable assessment of either politics or economics in the pages of the LA Times or the NY Times. One measure of economic reality that might dawn upon both newspapers is evident in the thousands of employees they must lay off in the face of their diminished circulation. The market is voting with an exodus of eyes unwilling to pay for continued devotion to leftist dogma.

    Mr. Krugman reveals himself unintentionally when he recounts a chance meeting at the AutoZone auto parts store where, he sees a friend buying a tire pressure gauge, “I ask him if his consciousness has been raised by Obama.” The mere fact that Krugman, once paid $50,000 a year as an Enron consultant, dares to insert himself as a good-faith, unbiased observer is absurd on its face. But, I imagined my response to such an insulting inquiry:

    “Oh yes Paul, I could not possibly have thought to economize or conserve on my own. Whenever I have trouble with my household budget or my car, I go straight to the editorial page of the Times or to Obama’s web site for clarification (you putz!). We proletarian types can hardly be trusted to operate in our own self-interest without the wise guidance of lawyers from Harvard or economists from Princeton. I thank you for never taking partisan political pot shots at the president for his adherence to supply-side economic theory. Tax cuts are bad as you’ve repeatedly stated in your columns and I am proud to be in THE state that most heavily taxes fuel. Most of us started tinkering with our cars and driving habits before gas crossed the $3.00 mark. A friend of mine in the trucking business was inspecting tire wear on one his five rigs the other day, when he tapped the tire thumper on his forehead exclaiming, “Dang! Obama’s right! If I would just inflate my tires correctly, I won’t have to sell a kidney to keep on truckin’ !” By the way Paul, let me know if Mr. Obama has any more golden conservation tips like, “drive slower”, “accelerate at a gradual pace”, or “plan your errands so that you can do multiple things in one trip”. I so enjoy receiving pedestrian advice in a pedantic, condescending tone. Hey, in case any of your pals need work, I understand that they’re hiring Ivy League grads to replace the pit crews at Indy and Daytona. You guys just know everything!”

    So never mind Krugman’s fake neutrality in the face of his unbridled bid for a position in a Democratic administration. Forget his ill-conceived critique of every single tax cut. He’s just a guy down at AutoZone (right) lobbying for a logical approach to energy policy. What crap! Paul Krugman is a central planner, a socialist, and an opportunist. His real concern is for, surprise, Paul Krugman! A competent plan for energy in America might include a respect for consumers. Free people in free markets have a better batting average than “experts” dictating from some central bureau. Exploration for new sources of fossil fuel must be a part any plan that embraces reality. Drilling for oil is not evil, nor is mining coal. Nuclear electrification is a must. All other sources must be pursued as well. No adjustment can be “off the table”. Each has its environmental and economic trade-off. Conservation and good stewardship of resources are also important. But, you already knew that.

  • Doug Wolkon – Author of The New Game

    Can we please count the money? How much is out there? We print more dollars as the underlying assets of our country depreciate in real value. Does the Fed really think they are bigger than the market. The dollar is about to look like the peso and then it is ONLY a question of how strong is your local economy? Global trade is now too expensive for the masses. Speaking of masses, massive unemployment in both financial services (only “growth” industry in U.S. for last 5 years, not a good thing since it is inflationary in nature; i.e. money makes more money, but less food) and government (largest employer in the U.S.; such socialistic character is unsustainable) is about to occur. What to do? The auto and steel industries will begin to manufacture windmills, solar panels and trains instead of houses and cars. Silicon Valley will be the leading innovator in the renewable energy revolution (where the “real” profits will be) and Wall Street will finally find a sustainable mortage business in renewable energy (duh!). State Pension and other “long-only” savings and retirement funds will buy renewable energy until it is coming out of their ears along with making significant investments in local farms as the social and financial returns on local farming profits will be too large to pass up (global food and transportation costs will experience hyperinflation while land prices for local farms will continue to decrease in price). Great opportunity for our state pension funds to make sustainable double digit returns .

    Renewable energy (oxymoron) assets will prove to be the only true guarantor as they are backed by mother nature. Would you rather have solar panels and mother nature as your collateral or a guarantee from the same guys that guarantee Fannie, Freddie and Sallie – our very own Wizard of Oz; The Fed.