Sympathy for the Kinsley

Paul Krugman, Daniel Drezner, and others slam fabled contrarian Michael Kinsley for his argument that we need to cut the budget deficit now because “we have to pay a price for past sins, and the longer we put it off, the higher the price will be” and that this attitude follows “the lessons of Paul Volcker and the Great Stagflation of the late 1970s.”

You know you have a problem with Drezner when, instead of calling your work “piss-poor monocausal social science,” he doesn’t even call it “social science” at all.

I have some sympathy for Kinsley, though, not on the merits—-I have no idea on the merits, for all I know he’s exactly correct on the economics—-but on his reactions to this event.

I think I’m well qualified to write about this because I know about as much of macroeconomics as Kinsley does (or so I suspect).

I think Kinsley’s economic argument goes roughly as follows: with the economy in depression, what you need to stimulate it is for businesses to hire people and for unemployed people to work. How do you do this?

– Cut taxes on businesses and lower their per-worker costs so they can afford to hire people.

– Cut taxes on rich people so they can invest more money.

– Make life more uncomfortable for unemployed people so they are motivated to work, and make life more uncomfortable for low-income people so they won’t be tempted to leave the labor force.

OK, I’m not saying the above recommendations are a good idea. They’re pure microeconomic thinking and not necessarily applicable at all to macroeconomics. But my guess is that’s roughly how Kinsley is thinking. After all, microeconomics is simpler than macroeconomics. I understand micro but not macro, and I wouldn’t be surprised if Kinsley is similar.

OK, bear with me here. Suppose Kinsley does believe the above recommendations are correct, in the sense of ultimately helping the economy and making everyone richer. As Kinsley might say in one of his phrasemaking moments: Making Donald Trump more comfortable is a small price to pay for bringing millions of Americans into the middle class. (Or something like that. There’s a reason why he writes for the New Republic and I’m just a blogger.)

Anyway, if Kinsley does believe that, then he also knows enough to realize that the above recommendations scream “conservative Republican” not “liberal Democrat.”

But Kinsley is a liberal Democrat. And, rather than saying he’s been “mugged by reality” and will now be joining the Paul Ryan campaign, he wants to make it clear that his views are coherent. He doesn’t want the Krugmanites to vote him off the island.

So, given all these premises, I can see where Kinsley’s coming from. He wants to be a charming contrarian and occasional gadfly. He wants to feel safe enough in his liberal perch to advocate conservative policies without losing his parking space on the center-left side of the street.

But that’s the problem with being contrarian. Sometimes it pisses people off.

P.S. In searching for kinsley krugman, I found this amusing bit from anti-Krugman blogger Robert Murphy from March, 2010:

But the thing that’s really aggravating about all this, is that if, say, the dollar crashes in 8 months and we start running 12% annualized CPI growth, it’s not as if Krugman, Yglesias, et al. are going to say, “Gosh, I apologize for trashing Kinsley back in March 2010.”

I guess Krugman, Yglesias, et al. are off the hook on that one!

13 Responses to Sympathy for the Kinsley

  1. Barry Ickes May 24, 2013 at 2:20 pm #

    Andrew, you sure would not make comments like that if Kinsley had written something about red state voters. You trashed Jeff Frankel for much milder sins (not knowing your work) than Kinsley’s (not knowing the difference between fiscal and monetary policy, or what happened in the 1970’s). Easy to be sympathetic to people when they are blowharding on somebody else’s field.

    • Andrew Gelman May 26, 2013 at 3:35 am #

      Barry:

      I agree. It is only because of my ignorance of macroeconomics that I can write in this way.

  2. Dan May 24, 2013 at 3:26 pm #

    Everything is relative. This position of Kinsley is only contrarian in the context of liberal demand-side (i.e., Keynesian) positions. Krugman would argue that Keynesianism is itself still the contrary position in an environment where the conventional wisdom is still austerity-driven, i.e., supply side.

    There are microeconomic arguments for demand-side: no business will hire labor for production capacity until demand proves there is a market to sell to, regardless of surplus capital which seems to be all over the place these days (those investors *can* afford to hire more people right now, but it makes no business sense to get too far out in front of the recovery, as measured directly by your own firm’s sales). Also, few people really want to remain unemployed: real employment offers more income than safety-net programs, especially the way those programs have been structured over the last couple decades.

    The macroeconomic argument also seems compelling: if you’re going to subsidize people, why not also put them to work and tax the income to get some of it back? So you reduce safety net spending, you get real productive value from the labor (say, infrastructure which has been subject to deferred maintenance for a long time), you keep the labor force up to speed on current useful skills, and you get the private sector moving with all that new demand, which subsequently allows the private sector to follow by grabbing that labor from the public sector. Stimulus in the form of public jobs is a temporary policy that ideally would be designed to come to a close as the private sector heats back up.

    The macro argument suggests that the sequester is actually increasing the deficit because of the multiplier effects of a non-linear economic system. Maybe Kinsley is only capable of linear thinking?

    • Pfeifer May 26, 2013 at 9:08 am #

      BINGO. Now blame the knuckleheads in Congress, so busy spending tax dollars investigating each other that they have no time to notice the slowing velocity of money and its consequences.

  3. jonathan May 24, 2013 at 7:44 pm #

    I pay 0 attention to this stuff, but I read the original and saw a bunch of errors so obvious I wondered how he decided to print them. It doesn’t take work to check the amount of debt in the 1970’s, especially given the decade has been revisited so often in the past 5 years of economic talk.

    Other than that, it’s a bunch of wind. I have no idea why I should care about pundits talking about what pundits say. The implied message is that someone cares and that caring somehow translates into a meaningful action or inaction. I see no evidence that anyone actually cares or that this means anything substantial happens or doesn’t.

  4. Displaced Person May 24, 2013 at 10:32 pm #

    This is naive false equivalence. Kinsley is ignorant and wrong, striving for a position no one knowledgeable takes because he thinks his audience doesn’t know better. For the sanctimonious above, who seem to be economically illiterate, read Brad Delong’s blog and comprehensive refutation of Kinsley’s claims. You need to ask yourself why someone with no knowledge of economics, economic history, economic philosophy or history should be taken seriously.

  5. CD May 24, 2013 at 11:47 pm #

    This account badly oversimplifies and misses the analytical and factual problems with Kinsley, especially around inflation and debt. Brad De L has been on top of those.

  6. LFC May 25, 2013 at 12:51 am #

    I read Drezner’s devastating post on Kinsley. As an undergraduate Kinsley majored in economics, if I’m not mistaken, and not at an obscure, struggling institution. Kinsley should understand basic macroeconomics, given his education. But obviously he’s more interested in writing pure, unadulterated garbage than in remembering anything he might once have learned. I don’t think of Kinsley as liberal, moderate, or whatever; idiocy seems to be his ideology, at least on the evidence of this particular episode.

  7. Kevin May 25, 2013 at 6:53 pm #

    Hasn’t Kinsley made a pretty good career of being the liberal who always seems to lose “debates” with conservatives? Was that not his job description back in the 80s and 90s on “Crossfire” and similar type shows?

    I had the sneaking suspicion that he sandbagged his own arguments in order to play that part (he was a “Fox News liberal” before there was a FoxNews, Alan Colmes, or Kirsten Powers).

    Maybe he’s just not very bright. A good writer, though.

    Or am I being too cynical?

  8. Kevin May 25, 2013 at 6:54 pm #

    .

  9. Jinchi May 26, 2013 at 2:43 pm #

    – Make life more uncomfortable for unemployed people so they are motivated to work, and make life more uncomfortable for low-income people so they won’t be tempted to leave the labor force.

    But that argument is absurd in the current context and if Kinsley believes it, he deserves all the criticism he gets. Millions of people lost their jobs because the economy crashed, not because they were too lazy to get out of bed in the morning. And there are still far more applicants than job openings.

    Making life more uncomfortable for the unemployed is just kicking them when they’re down, it won’t get them work any faster.

  10. Bloix May 28, 2013 at 9:25 pm #

    Andrew, you don’t “cut the deficit” by “cutting taxes on the rich … and on businesses.” If you cut taxes, you increase the deficit. This is not economics. It is arithmetic. If you don’t understand why, you don’t have any business writing about this. People who don’t know second grade math shouldn’t be surprised when people who do don’t want to listen to someone who argues, “maybe 2 + 2 really does equal five.”

    Kinsley’s whole career has been a series of arguments that 2+2=5. Before the internet, it used to be a pretty good gig. But nowadays, lots of people who don’t need to suck up to rich magazine owners can be heard and they just don’t have any patience for his nonsense.

    • Andrew Gelman May 28, 2013 at 9:54 pm #

      Bloix:

      As I wrote, I think I know about as much of macroeconomics as Kinsley does. I’m trying to give a sense of the feel, the “affect” of Kinsley’s piece, without getting into details on the econ. I agree with you, Drezner, and Krugman that a direct economic analysis is relevant. I just thought that it could be helpful, in addition, to consider Kinsley’s political discourse.