Greg Mankiw Blasts Paul Krugman
The former chair of the White House Council of Economic Advisers is, to put it mildly, quite critical of the New York Times columnist:
Economist Greg Mankiw Sounds Off… (Fortune)
Q: So you often read the paper and slap your forehead?
A: Let me give you example. This is as I was arriving [as the new chair of the White House Council of Economic Advisers]. Glenn Hubbard, my predecessor, was leaving. I read one of Paul Krugman’s New York TimesÃ¢€™ columns, and he said something like, “Hubbard said he was leaving to be with his family, but you could see the knives sticking out of his back.” The suggestion was that he’s being kicked out. I knew that wasn’t true. I knew I got the job in large part because Glenn recommended me. So here we have Krugman sitting in some office in New Jersey making a supposition about what’s going on in Washington and then writing for the New York Times, with readers presuming that he knew something.
Q: Krugman is a very respected economist. What are your thoughts on his transformation into a columnist?
A: I had Paul as a teacher at MIT. And when I was at CEA in ’82 and ’83, he was there as well. I was a junior staffer in the Reagan administration. Two members of the senior staff were Krugman and (former Harvard economics professor, Clinton Treasury Secretary and current Harvard president Lawrence) Summers. At that time he was a brilliant economist. I thought he’d win a Nobel prize. I think there’s a good chance he still will. His early work on international trade theory deserves it.
It’s strange what’s happened since then. When he became a New York Times columnist, he decided to abandon writing about economics as an economist does. He’s very liberal, which is fineÃ¢€”most of my friends at Harvard are liberalÃ¢€”but whenever someone disagrees with him, his first inclination is to think that person is either a liar or a fool. It’s amazing to me that an academic would behave that way. The one thing that I value about academia is open-mindedness, the premise that all ideas and different points of view should be considered. No one has a monopoly on the truth. The one defining characteristic of a good professor is to be open to all viewpoints.
Q: How do you explain what you describe as this change in Krugman?
A: I guess if you’re a columnist, you want to be widely talked about and be the most e-mailed. It’s the same thing that drives talk show hosts to become Jerry Springer. You end up overstating the case because it makes good reading. The problem is that economists by their natureÃ¢€”with a lot of “on the one hand” and “on the other hand” in their proseÃ¢€”can make boring reading.
Well, at least Krugman now has confirmation that DC powerbrokers read his pieces.
Mankiw also discusses Karl Rove: “To the extent there was a political constraint, it wasn’t from Karl’s shop, it was from Congress.” If you’re interested in more substantive discussions, he has thoughts on Social Security, deficits, and inflation, among other topics.
(Via Tyler Cowen.)
Update: Needless to say, Mankiw isn’t following the Richard Clarke model of official departure.
My favorite part of the interview is the following:
I think all economists walk around wishing more policymakers and voters knew basic economics. That’s why I like teaching Ec10 (the basic introductory economics course at Harvard and one of the most widely attended classes at the university) next yearÃ¢€”that’s the big news today here at Harvard, at least my corner of it. The debate about outsourcing, for example, was basically about what the gains from trade are.
It’s the Harvard mantra: every professor in every economic class that I’ve taken has filed this very complaint. While I generally agree, Mankiw should have still been more mindful of his outsourcing remark. The United States does indeed benefit to the extent that countries like India become better complements. For instance, if the Indians improve in how they operate call centers and other business services, which are what we import, then Americans gain. But what if these improvements enable the Indians to make significant progress in software development, which is what we presumably specialize in and export? Then our gains from trade become undercut. Obviously, I lack the data for this empirical question (though I tend to side with Mankiw overall). But the issue isn’t as clear-cut as his remark suggested, even among those who have some understanding of basic economics. And this is setting aside distributional considerations that get people really exercised.