Nicholas Confessore's Outstanding Article in the Washington Monthly, Dec. 2002Entitled: Comparative Advantage:
How economist Paul Krugman became the most important political columnist in America.By Nicholas Confessore
"There have always been columnists who, for better or worse, commanded the greatest attention of their day. Think of Walter Lippmann during the postwar consensus, Joseph Kraft during the Vietnam era, or George Will during the Reagan years. William Safire heralded the Clinton backlash of the early 1990s, Maureen Dowd the frothy, decadent latter half of the decade. In much the same way, Paul Krugman, who has written a column twice-weekly for The New York Times since January 2000, is essential reading for the Age of Bush. If you work in Washington, you probably read Krugman's column, and if you read Krugman's column, you probably have strong feelings about Krugman himself. Mention his name at a Washington dinner party, and at least a few people are bound to rave--or curse.
It's not immediately clear why. Krugman is a pretty good writer, but not a great one. He's adept at explicating numbers and statistics in clear English, but he's not a stylist like Dowd or the The Washington Post's Michael Kelly. Krugman isn't well-connected in Washington; in fact, he almost never leaves the environs of Princeton University, where he has taught economics since 2000. He's not a connoisseur of politics. He can't tell you how many votes John F. Kennedy won Illinois by in 1960 or who Arthur Finkelstein is. Nor is Krugman much of a reporter. There are few facts in his columns that any Times intern couldn't glean from documents published daily by the Congressional Budget Office or dozens of Beltway think tanks. Krugman doesn't travel around the country interviewing lieutenant governors or lard his columns with juicy blind quotes. He doesn't plot Democratic strategy like E.J. Dionne, dine with foreign dignitaries like Thomas Friedman, or write smart big-think like Ronald Brownstein. Nevertheless, for nearly two years, Krugman has been the columnist every Democrat in the country feels they need to read--and every Bush Republican loves to hate.
Krugman's primacy is based largely on his dominance of a particular intellectual niche. As major columnists go, he is almost alone in analyzing the most important story in politics in recent years--the seamless melding of corporate, class, and political party interests at which the Bush administration excels. Like most people, the Washington press, and especially pundits, were slow to grasp the magnitude of the shift. Krugman, whether puncturing the fuzzy math of Bush's tax cut or eviscerating the deceptive accounting behind Bush's Social Security plans or highlighting the corruption behind Dick Cheney's energy task force, has nearly always been the first mainstream writer to describe--and condemn--Bushonomics in plain English.
As an economist, of course, Krugman surely has an edge over most liberal pundits; his sterling academic reputation gives his critiques a punch that few Democratic politicians or liberal editorialists could hope for. But in truth, little that Krugman writes about has relied on his academic expertise. His columns aren't about trade theory or stochastic calculus, but about flagrant deceptions and fourth-grade arithmetic. What makes Krugman interesting, in short, is not just why he writes what he writes. It's why nobody else does.
Facts vs. Spin
"This is not what I do. This is not who I am," Krugman sighs. It's a week before the election, and he has invited me to his tiny, cluttered office on the fourth floor of Princeton's Woodrow Wilson School, an imposing pile of white marble that, from a distance, resembles an oversized bicycle rack. In pictures, Krugman looks self-assured, even a little hard-eyed. In person, he's friendly but ill at ease, a schlumpy professor in chinos and a beige button-down, who dislikes being interviewed, he says, owing to a few bad experiences with reporters. And it shows--his eyes dart nervously around the room, and every so often he rubs his face vigorously with both palms. "This is not my natural habitat. Sometimes, I think that if I had known what it would be like, I would never have agreed to do this column. What I really do is international trade and finance," he says, gesturing toward an anonymous stack of papers on one side of the room. "Professionally," he adds, "I should be worrying a lot about Brazil right now."
In truth, Krugman hasn't been a pure academic since at least the mid-1990s, when he first began writing widely for popular magazines like Fortune and Slate. But his column for the Times has been unusual on several counts. One is what Krugman enthusiasts might call his sense of mission. Beginning during the 2000 campaign Krugman began to write frequently about George W. Bush, and since Bush took office, the president or his administration have made an appearance in about three-quarters of Krugman's 200 or so columns. He has written especially forcefully, and especially often, about the Bush administration's plans for privatizing Social Security ("Enron-like") and Bush's now-passed tax plan ("patently, shamelessly dishonest"). Indeed, Krugman has written so many columns attacking Bush's tax cut that you could make a book from them--as, in fact, he did, publishing Fuzzy Math: The Essential Guide to the Bush Tax Plan in May 2001. And although Krugman can get pretty worked up--he once compared Bush to the nativist French politician Jean-Marie Le Pen--he's generally not a screamer. Rather, he writes mostly about facts, and spin: the fact that at least 40 percent of Bush's tax cut will eventually go to the wealthiest 1 percent of Americans, versus the administration's spin that it was aimed mainly at the middle class. Plenty of other columnists have made these points. But only Krugman makes them in such detail, over and over again.
If Krugman's zeal is in part what makes him so appealing to liberal activists, it's also what makes him so off-putting to Republicans and conservatives--and a fair number of center-left journalists. Krugman is regularly attacked by fellow pundits, most exhaustively by former New Republic editor-turned-blogger Andrew Sullivan and former Washington Monthly editor-turned-blogger Mickey Kaus, each of whom inveighs against Krugman almost as often as Krugman inveighs against Bush. And like many partisans, Krugman can stir unruly passions. Last year, after he published an encomium to the late economist James Tobin, he received a bizarre screed from actor and game-show host Ben Stein; Stein, who majored in economics in college, accused Krugman, a likely future Nobel laureate, of having a "limited background" in the field. There are Web sites devoted to attacking Krugman's work, as well as a Paul Krugman Archive, which contains every article he has ever written, started by a high school student in New York.
For Krugman devotees, however, the main appeal is his proclivity for writing things before it is okay to write them. Journalists may love to break news, but they hate to contradict the narratives that crystallize around particular politicians or policies. Late last winter, for instance, the established storyline on California's energy crisis was that Left Coasters had only themselves to blame: the state had passed a flawed deregulation law, which led its utilities to rely on the spot energy market when prices were high. This neutral explanation came from the supposedly competent and disinterested Federal Energy Regulatory Committee, so reporters favored it. And while the press gave plenty of column inches to the Bush administration's preferred spin--that environmentalists had stymied the construction of needed generation capacity--few reporters gave credence to groups like Public Citizen, who blamed the crisis on market manipulation by energy companies, many of them based in Texas and enjoying close ties to the administration. But Krugman, noting that economists had long worried about the vulnerability of California's trading system to price-fixing, argued that market manipulation was the obvious culprit; otherwise, he wrote in March 2001, the power company executives "are either saints or very bad businessmen." Krugman was ignored at the time. Twenty months later--following the collapse of Enron, three federal investigations into the California crisis, and a passel of indictments against energy company officials--Krugman has been proved right.
More often, though, his scoops are conceptual. The tax cut, Bush's Social Security plan, Enron, the energy crisis, and Harken--all Krugman hobbyhorses--were widely covered in the media. But he has been the only prominent columnist to attempt to weave all of them into a single, continuing narrative about the Bush administration's policies, wealth inequality, corporate profiteering, and the ascendancy of crony capitalism. Many political columnists, for instance, expressed outrage and anger over the way Enron executives locked ordinary employees into Enron-only 401(k) plans while they themselves were unloading the company's stock. For Krugman, though, Enron's abuse was of a piece with the Bush approach on tax cuts: "First, use cooked numbers to justify big giveaways to the top. Then if things don't work out, let ordinary workers who trusted you pay the price."
Krugman was not, and is not, the only person in America who believes that the Bush administration is in cahoots with interests out to bilk Americans and pervert the political process. But as a Times columnist, closely read by the political elite and syndicated to papers across the country, he has been able to validate the anger of a whole class of angry, frustrated Democrats who feel that he's the only one prepared to describe the world as it really is. "He goes against the very basic thing that people and journalists want to believe about Bush: 'Say what you want, but the guy's honest,'" says James Carville, the blunt, flamboyant host of CNN's "Crossfire." "Krugman says, no--he's a complete fraud."
Capitol Pains
Krugman was born and raised on Long Island, where he enjoyed what he describes as an "utterly conventional" suburban childhood. After reading Isaac Asimov's classic Foundation novels, he nurtured a secret desire to be one of Asimov's "psychohistorians"--futuristic social scientists who could predict the course of human history. At Yale during the 1970s, he did the next best thing, majoring in economics under the tutelage of economist William Nordhaus. Like Nordhaus, Krugman attended graduate school at MIT; in 1977, Krugman joined the economics faculty at Yale. Within a few years, he had begun to help think through what would later be called "new trade theory," which holds that an increasing proportion of trade can be explained by technological innovation rather than countries' comparative advantage (i.e., in natural resources). Krugman's work on the subject cemented his academic reputation and launched him into the ranks of rising young stars in the field.
His first and last sojourn in Washington began in 1982, when Martin Feldstein, then chairman of Ronald Reagan's Council of Economic Advisers (CEA), invited Krugman, Lawrence Summers, and a few other whiz kids onto the CEA's staff. The early '80s recession and debt crisis had thrown Reagan's economic policy into disarray, and Feldstein had been brought in to fix things up. Working in government had two contradictory effects on Krugman. On the one hand, it induced in him a deep dislike for those he would later describe as "policy entrepreneurs"--activists and journalists, usually lacking academic credentials, who seemed to exert so much influence over economic decision-making in Washington. Feldstein was a pioneer of the supply side policies then in favor among Reaganites, who believed taxes were the most important determinant of economic growth. But unlike policy entrepreneurs such as Jude Wannisky and The Wall Street Journal's Robert Bartley, Feldstein refused to pretend that Reagan's massive tax cut could pay for itself. When Feldstein insisted on issuing accurate budget projections anticipating government deficits, and even called for a small tax increase to offset them, the administration's supply side purists attacked. (Treasury Secretary Donald Regan even urged reporters to "throw out" the council's annual report.) Like many economists, Krugman cherished his discipline's purity, and the sight of Feldstein being pummeled for not painting a rosier election-year picture was deeply disillusioning. "One thing you learn when you're working in an administration--not to mention at the Fed, where it's even more extreme--is to think three times before you speak and then bite your tongue," says Alan Blinder, the Princeton economist and former vice chairman of the Federal Reserve. "That's not how academics normally behave."
But Krugman also found that he liked writing about economic policy, and a seed was planted. The technical papers and books that he produced during the mid- and late 1980s, many of them integrating and extending his earlier work on trade theory, were notable for their creativity and number and helped set Krugman on his way to winning the John Bates Clark Medal, awarded biennially to a rising young economist, in 1991. But Krugman's late-'80s work was also less abstract than his previous efforts, drawing inspiration from real-world policy dilemmas. Eventually, at the suggestion of Michael Barker, a former Hill staffer working at The Washington Post, Krugman, by then ensconced at MIT, sat down to write his first book for a popular audience. The Age of Diminished Expectations, a kind of primer on basic economic principles as they applied to current events, was published in 1990. And while it wasn't a bestseller, the book was lucid, informative, and widely read among journalists and opinion leaders, launching Krugman's career as a bona fide public intellectual.
Very soon, however, Washington disappointed Krugman again. His writing and congressional testimony about income inequality brought him to the attention of Bill Clinton's campaign in 1992, which used some of his findings to attack the Bush administration. When Wannisky and other conservatives argued that skyrocketing income inequality was in fact a myth, Clinton's aides enlisted Krugman to help them fight the ensuing propaganda war. When he published a defense of Clinton's economic plan in the Times that August, it was widely assumed that Krugman would be Clinton's pick, should he win, as chairman of the Council of Economic Advisers.
Clinton did win. But his economic transition team was headed by Robert B. Reich, a Harvard lecturer, journalist, and author who had penned the early '90s other big policy tome, The Work of Nations. Not only had Reich tussled with Krugman over trade policy during the 1980s; he had also gone to Oxford with Clinton. Eventually, Reich became Secretary of Labor in the new administration, while Berkeley economist Laura D'Andrea Tyson was named chair of the CEA. Many other economists were drafted into top administration slots, including Krugman's colleague from the Reagan days, Larry Summers. But Krugman was passed over--largely, say former Clinton officials, because he was deemed too volatile. (After clashing with fellow attendees at Clinton's Little Rock economic summit, for example, he had appeared on "Larry King Live" to declare the meeting "useless.")
Krugman didn't take the rejection well, and lashed out at Clinton's appointees. To Washingtonians, the key division on the Clinton economic team lay between the stimulators, such as Reich and Tyson, and the deficit hawks, notably Treasury Secretary Lloyd Bentsen and budget director Leon Panetta. But for Krugman, the key division was between real economists qualified to set national policy and policy entrepreneurs, who were not. In a Times article that January, he was quoted as saying Tyson lacked "analytical skills"--just a few weeks after giving a speech at the annual meeting of the American Economic Association lambasting Reich and Ira Magaziner as "pop internationalists" who "repeat silly clichés but imagine themselves to be sophisticated."
Reich, Tyson, and a handful of other alleged policy entrepreneurs came in for further attack in Krugman's next book, Peddling Prosperity (1994). It wasn't just that they were wrong, Krugman declared. It was that they were all dangerous hacks, snake-oil salesman selling foolish remedies to credulous politicians (like Clinton). Real economists eschew policy, insulating themselves from the intellectual compromise endemic to the political world. Policy entrepreneurs, however, tend to write "in newspapers and semi-popular magazines like Foreign Affairs, The Harvard Business Review, and The New Republic." Moreover, the "fault line between serious economic thinking and economic patent medicine, between the professors and the policy entrepreneurs," Krugman wrote, "is at least as important as the divide between left and right."
But what was strange about Peddling Prosperity, as economics journalist Robert Kuttner would note in a lengthy assessment of Krugman published in The American Prospect two years later, was that Krugman quickly became the most prolific policy entrepreneur of them all. (Reich and Kuttner are co-founders of the Prospect, where I was a staff writer for four years.) By 1996, Krugman had published enough articles in Foreign Policy, Fortune, The Economist, Harper's, this magazine, and, yes, Foreign Affairs and The Harvard Business Review, to fill a second mass-audience book--Pop Internationalism. His defense? "What I eventually realized," he wrote in the introduction, "was that an effective answer to pop internationalism would require a new kind of writing ... essays for non-economists that were clear, effective, and entertaining."
Evidently, the urgency of combating pop internationalists outweighed the dangers of popular writing, and Krugman took to his new task with great enthusiasm. Slate signed him up for a column, as did The New York Times Magazine, and he quickly mastered the form. Some of Krugman's best writing dates from this period, and he was acclaimed as the heir to John Kenneth Galbraith. His pieces in Slate, especially, were funny, revealing, and exceptionally fluid, if occasionally dismissive to those with whom he disagreed. As always, a good portion of his writing was devoted to debunking them--leftists who criticized the World Trade Organization, supported protectionism, and still believed in Keynes; conservatives who argued that the Dow could reach 36,000 and still believed in supply side economics.
It was largely on the strength of Krugman's writing for the Times Magazine and Slate--plus, of course, his burgeoning academic reputation--that Howell Raines, then the Times editorial-page editor, approached Krugman about writing a regular column. This was in 1999, at the height of the boom, and Raines felt that the Times needed someone who could, as Krugman puts it, "write about the vagaries of business and economics in an age of prosperity." Krugman's early Times column was notably less droll than his earlier writing and covered the kinds of topics he and Raines had discussed: the AOL Time-Warner merger, Bill Gates, and, when it finally happened, the stock market plunge. But Krugman still had a taste for the blood of the "hired gun"--"usually a mediocre economist," he wrote in an April 2000 column, who "has found a receptive audience for work that does have an ideological edge."
The Anxieties of Influence
There's a sense, then, in which Krugman hasn't changed. His writing about the Bush administration, like that about policy entrepreneurs, is primarily concerned with stupid economic policy--or at any rate, what Krugman considers to be stupid economic policy. He hasn't changed his substantive views on comparative advantage or monopolistic competition. It's worth noting, moreover, that Krugman was passed over for a Clinton economic post for precisely the qualities that make him such an effective Bush critic: His peevishness; his confidence--bordering on arrogance--in his own ideas; his lack of concern for the niceties of political or bureaucratic culture, and his resulting isolation from Washington life.
And yet something has changed. Now it's Krugman's work that cuts with an ideological edge. To read through his columns about Bush is to watch disdain pass through frustration into rage. The first few, written during the 2000 campaign, are dismissive; how could anyone take what this guy is saying about his budget seriously? But a few weeks before Election Day, Krugman was getting impatient. "I really, truly wasn't planning to write any more columns about George W. Bush's arithmetic," he wrote in an October dispatch. "But his performance on 'Moneyline' last Wednesday was just mind-blowing." In the space of a few minutes, he noted, Bush had made three major misstatements--about how much he had promised to spend on prescription drugs for seniors, about how much of the surplus his tax cut would eat up, and about whether Social Security got a better "return" than bonds. "What is really striking here is the silence of the media--those 'liberal media' conservatives complain about," Krugman lamented. "As I said, I don't want to keep writing about this. But reporters seem to be too busy chasing rats and dogs to look at what the candidates say about their actual policy proposals." The same went for Bush's Social Security proposal. "It just was not acceptable to report Bush's plan straight," Krugman told me recently, "to assert that it requires a large influx of money from someplace to make it work."
Even after Bush became president, it's clear that Krugman saw Bush's deceptions as more joke than threat. In particular, Krugman, like many people outside and inside Washington, didn't believe that the Bush administration would persevere with the tax cut in the face of a deepening slump. But as Bush and his lieutenants did just that--and more infuriatingly, began to offer an endlessly changing, and often contradictory, set of explanations and numbers to defend their plan--Krugman's writing changed. He no longer wrote about policy hustlers of the left and the right; instead, he began to devote the majority of his columns to the Bush administration. His tone was more angry, less wry. During the campaign, Raines had forbidden him to use the word "lie" when describing Bush's proposals, even the demonstrably mendacious Social Security plan. Now Krugman used it with gusto. "Mr. Bush was lying [during the tax cut debate]," he wrote in August 2001. "It was obvious from the start that the administration's numbers didn't add up. And in case you were wondering, the administration is still lying."
"There's been a kind of missionary quality to his writing since then," muses Princeton's Blinder. "He's trying to stop something now, using the power of the pen." But that's not all. The change is deeper: Krugman now takes politics seriously. As Kuttner puts it, "The interesting thing about Krugman is that he was a mainstream neoclassical economist who was moderately liberal as a citizen, but tended to look at politics as an illegitimate distortion of the perfection of the market economy. He viewed the left and the right as symmetrical evils. Krugman has now discovered power."
Krugman seems to agree. "I think we were all living in a fool's paradise in the late 1990s. There probably wasn't as much energy in my criticism of the right. I was wrong, obviously," he says. "If I'd understood where politics would be now, it would have been quite different. I thought that Reich and Magaziner were proposing bad ideas, but that's not the same as being frightened of where they might be taking us. We can have arguments about trade policy later. Now I'm frightened."
White and Wrong
Krugman has also discovered that when you're the center of attention and you make a mistake, people notice. The most serious error was in a column written last July about Bush's dealings with the Texas Rangers, of which he became a part-owner in 1989. It's well known that Bush put $606,000 into the syndicate that bought the Rangers in 1989, about 2 percent of the total cost. When the deal was initialized that same year and Bush became the team's general manager, the syndicate awarded their well-connected partner an additional 10 percent stake, gratis. When the team was sold in 1998, Bush earned $14.9 million on his original investment. But Krugman went further, charging that Bush's extra return was "a 12-million dollar gift" to "a sitting governor," when in fact the gift had been awarded years before Bush's election as governor in 1994. Krugman later admitted the error--on his Web site, but not in the Times.
In a column about Army Secretary Thomas White, Krugman, citing a report by reporter Jason Leopold in the online magazine Salon, wrote that shortly after White knew of Enron's impending losses, he wrote an email to another executive "Close a bigger deal. Hide the loss before the 1Q." White, charged Krugman, was an "evildoer." But two weeks later, after White told the Times he couldn't "recall" writing the email in question, Salon took the story off their site, and after re-examining Leopold's evidence, neither Salon nor the Times could authenticate it. In his next column, Krugman apologized for the mistake. But not before he was roundly pilloried for repeating the quote, even more so than Salon for printing it. "Krugman Comes Clean" wrote Andrew Sullivan on his Web site, as though Krugman had been involved in some kind of cover-up.
Both columns involved major errors--one sloppy, one more understandable. (If columnists re-reported every article they ever cited from reputable magazines, we wouldn't have op-ed pages.) But it is a measure of the nerve Krugman touches that his mistakes draw vastly more criticism than the same or worse sins committed by other columnists. In a November Times column, for instance, William Safire declared it an "undisputed fact" that 9/11 terrorist Mohammed Atta had visited an Iraqi agent in Prague, even though investigations by the CIA and by the Czech intelligence agency--not to mention reams of reporting by Safire's own paper--had determined that no such meeting had ever taken place. Later, Safire changed his mind, calling his assertion "a hunch," but not an error--and nobody, save MSNBC columnist Eric Alterman, called him on it. But Safire isn't the only one. During the Enron scandal, according to the Web site Spinsanity.org, nearly 20 pundits, reporters, and columnists repeated the myth that Ken Lay had stayed in the Lincoln Bedroom during the Clinton administration; only about half of them issued corrections. Likewise, many liberal columnists--Michael Moore, Robert Scheer, even The New Yorker's Hendrick Hertzberg--wrote that the Bush administration had given $43 million in aid to the Taliban prior to 9/11, when in fact it was $43 million worth of foodstuffs and food security delivered to Afghans through the United Nations. Yet few of these errors sparked anything close to the reaction that Krugman's have.
Pages of Sin
On balance, Krugman's record stands up pretty well. On the topics he writes about most often and most angrily--tax cuts, Social Security, and the budget--his record is nearly perfect. "The reason he's gotten under the White House's skin so much," says Robert Shapiro, a former undersecretary of commerce in the Clinton administration, "is that he's right. None of it is rocket science."
So if dismantling the facade of lies around, say, Bush's tax cut is so easy to do--and makes you the most talked-about newspaper writer in the country--why don't any other reporters or columnists do it themselves? Because doing so would violate some of the informal, but strict, rules under which Washington journalists operate. Reporters usually don't call a spade a spade, unless the lie is small or something personal. When it comes to big policy disagreements, most reporters prefer a he-said, she-said approach--and any policy with a white paper or press release behind it is presumed to be plausible and sincere, no matter how farfetched or deceptive it may be.
Similarly, among pundits of the broad center-left, it's considered gauche to criticize the right too persistently, no matter the merits of one's argument. The only worse sin is to defend a politician too persistently; then you become not a bore, but a disgrace to the profession and its independence--even if you're correct. Thus, in Washington circles, liberal Times columnist Bob Herbert is written off as a predictable hack, while The New York Observer's Joe Conason, who vigorously defended the Clintons during the now-defunct Whitewater affair, is derided as shrill and embarrassing. Obviously, conservative columnists and pundits aren't quite as averse to being persistent or shrill. But center-left journalists do not, to put it mildly, take their cues about what's acceptable practice from conservative pundits.
That's because liberal journalists and conservative journalists have different value systems. Most liberal pundits--E.J. Dionne, Ronald Brownstein, or Maureen Dowd--came up through the newsroom ranks, a culture that demands shows of intellectual independence from politicians, especially Democrats. Many conservative pundits, on the other hand--Safire, Tony Blankley, or Peggy Noonan--come straight from political careers, a culture that encourages intellectual fealty and indulges one-sidedness. Krugman is not a journalist by training, and he's never held appointive or elective office. But like conservative pundits, he doesn't feel bound by the niceties that professional reporters do. Hence the discomfort with Krugman's methods among center-left journalists.
"He is obviously a very smart guy, basically liberal, with complicated views, who once recognized when his own side was wrong. And at some point he switched and became someone who only sees what's wrong with the other side, in fairly crude terms," says Mickey Kaus. "The Bush tax cut is based on lies. But it's not enough to criticize a policy to say that it's based on lies. You have to say whether it's good or bad for the country." True, Kaus is probably Krugman's most vociferous non-right-wing critic. But even among those journalists and politicos who enjoy his column, it's not uncommon to hear the comment that Krugman might be a little more effective if he were just a little less rabid. "It is considered the appropriate thing to say at a dinner party that, while Krugman is very bright, he's just too relentless on Bush," drawls James Carville. "Because to accept Krugman's facts as right makes the Washington press look like idiots."
These days, however, there's a good market for journalists willing to be a little relentless when it comes to the Bush administration. Of course, Krugman, like any good economist, knows that in most markets the biggest profits come from having some sort of monopoly. But monopolies don't endure; competitors always arise. Right now, when it comes to analyzing the intellectual underpinnings of the Bush administration, Krugman has no competition. But as is usually the case, it might be better for everyone else if this particular monopoly didn't last.
