Krugman’s blog, 1/23/16

There were three posts on Saturday and none yesterday.  Saturday’s first post was “Wonks and Minions:”

One of the differences between right and left in America is that the progressive infrastructure includes a contingent of genuine wonks — commentators on policy who really do make models and crunch numbers, and sometimes come up with answers that aren’t fully predictable from their politics. The list includes Ezra Klein, Jonathan Cohn, Jonathan Chait, Mike Konczal, myself some of the time, and others. Right now the wonk brigade has been weighing in on Bernie Sanders, and is in general not too impressed on either financial reform or health care.

And the response of some — only some — Sanders supporters is disappointing, although I guess predictable given that somewhat similar things happened during the 2008 primary. There will, I guess, always be some people who, having made an emotional commitment to a candidate, can’t accept the proposition that someone might share their values but honestly disagree with the candidate’s approach.

Right now I’m getting the kind of correspondence I usually get from Rush Limbaugh listeners, although this time it’s from the left — I’m a crook, I’m a Hillary crony, etc., etc.. OK, been there before — back in 2008 I was even the subject of tales about my son working for the Clintons, which was surprising because I don’t have a son.

But I’m used to this stuff. It’s a bit more shocking to see Mike Konczal — one of our most powerful advocates of financial reform, heroic critic of austerity, and a huge resource for progressives —attacked as one of Hillary’s minions and an ally of the financial industry.

What’s really funny is that neither Mike nor I, nor, I think, any of the other wonks-turned-evil-minions have changed positions. Most of us argued long before there was a Sanders candidacy that the focus on Glass-Steagall and too-big-to-fail was misguided. In fact, I argued that position very early in the Obama years, at the same time I was arguing for temporary nationalization of a couple of big banks. I argued for an Obamacare-like strategy on health care, with perhaps a very gradual transition to single-payer via the public option, in my book The Conscience of a Liberal; and most of the progressive health care experts I can think of adopted pretty much the same position. So nobody should be surprised that a candidate who appears to be disregarding the analysis that led to these positions is coming in for some criticism.

Anyway, I’m not going to obsess over this — this too shall pass, just like the 2008 primary season when I was history’s greatest monster because I was skeptical about the Obama promise of transformation.

The second post on Saturday was “How To Make Donald Trump President:”

Donald Trump at a campaign rally in Sioux Center, Iowa, on Saturday.
Donald Trump at a campaign rally in Sioux Center, Iowa, on Saturday
(Evan Vucci/Associated Press)

Step 1: Democrats nominate Bernie Sanders. I don’t think Sanders is unelectable, but when you look at polling, remember that Hillary Clinton’s numbers reflect her standing after more than two decades of constant character assassination, whereas Republicans haven’t even begun to go after him.

Step 2: Michael Bloomberg decides to save the country by entering the race as a supposed alternative to the two extremes (hey, centrist pundits have been urging him to do that forever, even when Barack Obama was in reality pursuing all the policies they wanted).

Step 3: Some Democrats defect to Bloomberg, because they actually listen to those centrist pundits. Hardly any Republicans do — remember, two-thirds of them currently support Trump, Cruz, or Carson, and anyway they’ve never heard of Bloomberg. Also, New York values.

Step 4: Trump wins a yuuuuge victory.

The last post on Saturday was “Levels, Rates, and Sweden:”

I’ve been unhappily surprised by a lot of what has gone on within the economics profession since the 2008 crisis. But one of the most depressing things, in a way, has been the extent to which well-known economists seem confused about the difference between levels and rates of change. Unfortunately, you see this all the time — for example, in the constant assertions that because some country posted a year of pretty good growth after several years of austerity, this proves that austerity doesn’t actually depress the economy.

Now Lars Svensson points us to an evaluation of Swedish monetary policy by Marvin Goodfriend and Mervyn King (!) which argues that the Riksbank had some justification for raising rates in a still-depressed economy because GDP was growing moderately fast.

So, do we think the Fed should have been tightening policy in 1934? I mean, the economy was growing at a blistering pace:

But it was growing at that pace after a catastrophic slump, and unemployment was still immense.

I thought everyone understood this point, which is after all very easy. But nooooo …

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