Paul Krugman’s Statistical Reality
I have a saying: “When everyone around you seems crazy, it’s probably you.” Useful advice, to be sure.
Well, everyone around Paul Krugman seems to be misinformed:
Well, here’s a little secret: most voters don’t sit around reading Clive Crook columns or debating the Bowles-Simpson plan. They have a gut sense — things are getting better or they’re getting worse — and mainly vote on that basis. They’re not paying attention at all to this stuff.
Well, alright, not everyone. Just the vast majority of voters. Unfortunately for Krugman, this statement reveals something about him rather than the voters. Krugman is the one who is out of touch with reality.
How can that be? Isn’t Krugman formulating his ideas based on massive amounts of economic data? Kind of. He has access to more economic statistics than do most of us, but in aggregate “most voters” by far have the upper hand. Every voter has a checkbook to balance and ends that need to meet. Every voter gets to experience the economy first hand. In contrast, all Krugman has is a position that shields him from economic hardship and a glut of statistics.
Krugman lives in a statistical reality. People around him could be losing their jobs left and right, but as long as unemployment remained flat, Krugman would insist that there is no employment crisis. He could suddenly find his dollars not stretching as far, but as long as core inflation remained flat, Krugman would insist that there is no inflation. He could see small businesses closing left and right, but as long as the calculated regulatory burden upon them remained the same, Krugman would claim that they’re not over-regulated.
Now, checking one’s personal reality against the statistics is not necessarily a bad thing. In the first case, one might see people losing their jobs left and right when a factory closes down. Doesn’t mean there is a broader employment crisis. In the second, there could be local factors raising prices. In the third, it could be any number of local or temporary things hurting small businesses.
The problem comes when the statistics are at odds with the reality experienced by the vast majority of people. A reasonable person in that case would begin to question the statistics. Krugman, an academic at heart and a political hack by trade, bitterly clings to the statistics in the face of reality. The statistics tell him a story that he wants to believe: interventionist government is good for the economy. That is Paul Krugman’s statistical reality.
The reality of the current economy is pretty clear. Things are bad and getting worse. The only people to whom the bad news is unexpected are academics, journalists, and politicians. Krugman, arguably all three at once these days, desperately wants to believe that his statistical reality is the true one — so desperately, in fact, that he will insist that the experiences of millions of Americans are invalid and that the conclusions they draw from them are mere “gut instinct”.
Sorry Paul, when everyone around you seems misinformed, it’s probably you.