Few prominent economists have a worse record predicting the impact of Obama’s economic policies than Paul Krugman. Writing for the New York Times and touting his close “genuine contact” with the “smart” economists and others in the Obama administration and the Democratic congressional leadership, Krugman has been, and remains, Obama’s most important champion. Not only has he been defending Obama’s Keynesian-type deficit-spending, but he has been advocating still more of these same failed policies.
The economy just can’t gain ground. Thirty-four months since the "recovery" started in June 2009 and the actual number of jobs have increased by just 0.4%. Hardly making up for the 5.5 percent drop in jobs from the peak. Given Krugman’s continued prominence in supporting Obama during the coming election, the best way of evaluating the advice is going to give voters is to see how accurate his claims have been up to this point.
It is important to realize just how terrible Krugman’s record has been. He predicted on CNBC: “I am still guessing that we will peak out at around 9 percent [unemployment] and that would be late this year.” He assured listeners that double-digit unemployment was “not the most likely event” and “Actually, we are already seeing some positive effects [from the Stimulus].” With unemployment peaking at 10.1 percent and still above 9 percent over two-and-a-half years after he predicted it would peak, Krugman was wrong on both counts.
Krugman’s predictions were also filled with personal attacks against those with whom he disagreed. In March 2009, when Greg Mankiw, the chair of George W. Bush’s Council of Economic Advisers, and some conservative economists questioned what they called Obama’s “overly optimistic” growth predictions, Paul Krugman questioned their honesty. In a New York Times blog post titled the “Roots of Evil,” Krugman attacked Mankiw as “more than a bit of deliberate obtuseness” and that “we can expect fast growth.”
Yet, our economic growth has not even come close to what Obama and Krugman predicted. It has also been much slower than past economic recoveries. This last year Obama predicted that GDP would grow at 4 percent, while in fact it was less than half of that -- just 1.7 percent.
Mankiw challenged Krugman to a bet over whether the Obama prediction was right, but, despite all Krugman’s abusive rhetoric, he never responded. Krugman must be glad that he never bet his money to back up his claims of “evil” or “deliberate” misinformation, but he never tempered his rhetoric.
Amazingly, despite his track record against conservatives, Krugman didn’t flinch in late 2010 when he claimed: “It’s also worth pointing out that everything the right said about why Obamanomics would fail was wrong.”
Krugman’s predictions were no more accurate for other countries. He criticized the reduction in German government spending in June 2010 as a “huge mistake,” and said: “budget cuts will hurt your economy and reduce revenues [by reducing economic growth].” Yet, more than a year later, Germany’s unemployment rate continued falling, dropping by 0.7 percentage points between June 2010 and August 2011. And as of June 2011, German GDP during 2011 grew at 3 percent, almost twice as fast as our own GDP growth. Germany accomplished the lower unemployment and higher growth rates without burdening its children with the massively higher debt that Obama and Krugman advocated.
But you get some idea why Krugman predictions have so been consistently wrong by understanding that he just thinks government spending is free. He also thought that the 9/11 attacks “could even do some economic good” by stimulating the economy because “all of a sudden, we need some new office buildings” and “rebuilding will generate at least some increase in business spending.” Let’s the buildings and spend the money on something else.
Digging ditches and filling them in again leaves people no better off. Krugman has a different view: “If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better off.”
The federal government’s publicly held debt has almost doubled in just over three years. How many more rosy predictions coming from Paul Krugman can we afford?
John Lott is a FoxNews.com contributor and the co-author of “Debacle: Obama's War on Jobs and Growth and What We Can Do Now to Regain Our Future” (John Wiley & Sons).
John R. Lott, Jr. is a columnist for FoxNews.com. He is an economist and was formerly chief economist at the United States Sentencing Commission. Lott is also a leading expert on guns and op-eds on that issue are done in conjunction with the Crime Prevention Research Center. He is the author of eight books including "More Guns, Less Crime." His latest book is "Dumbing Down the Courts: How Politics Keeps the Smartest Judges Off the Bench" Bascom Hill Publishing Group (September 17, 2013). Follow him on Twitter@johnrlottjr.