New York Times columnist Paul Krugman and MSNBC's Joe Scarborough had an at times heated discussion about budget deficits, debt, and the economy on PBS's Charlie Rose Monday evening.
At one point Krugman got so rattled by the facts that he actually said Scarborough quoting what he had said in the past was making an ad hominem attack against him (video follows with transcript and commentary):
JOE SCARBOROUGH: The thing is, though, we don't know, as Bob Ruben says, you never know when a bond crisis is going to come. It's not like we're going to get a warning. You're going to wake up one day and suddenly there's going to be a crisis. When is that going to happen? I don't know.
PAUL KRUGMAN: All kinds of things can happen, right?
SCARBOROUGH: What do you mean all kinds of things? Paul, again, you've been predicting this for 20 years.
KRUGMAN: You know, that's such a tired argument. You go and search for quotes and stuff I said once upon a time instead of dealing with the issue.
SCARBOROUGH: It’s not once upon a time. We’re talking about you said this for fifteen years. And so then you woke up one day and said, “I was wrong.”
KRUGMAN: No.
SCARBOROUGH: You said we needed to create a housing bubble to replace the NASDAQ bubble.
KRUGMAN: Come on, that’s a, you know that I was joking when I said that. Come on.
SCARBOROUGH: You were joking?
KRUGMAN: Yes, yes of course. This is so disappointing.
SCARBOROUGH: It is disappointing.
KRUGMAN: So disappointing. Is all you can do is ad hominem and say, “Oh, you said this” and you were, pull out the…
SCARBOROUGH: Well, anybody that knows me knows I don't engage in ad hominem attacks.
KRUGMAN: That's what you’re doing right now. That’s awful.
SCARBOROUGH: Actually, I'm quoting back what you say.
KRUGMAN: We're trying to have a serious discussion here.
SCARBOROUGH: Well then don’t accuse me of ad hominem attacks.
So quoting what someone said in the past is an ad hominem attack?
Krugman alluded to this at his blog Monday as word got out about his odd performance:
Well, we’ll see how it comes out after editing, but I feel that I just had my Denver debate moment: I was tired, cranky, and unready for the blizzard of misleading factoids and diversionary stuff (In 1997 you said that the aging population was a big problem! When Social Security was founded life expectancy was only 62!)
Actually, when Social Security was founded, life expectancy was 57. Now it's 77, a "misleading factoid" folks like Krugman choose to ignore.
As for Scarborough's quotes of previous Krugman contentions, earlier in the program he noted that in the '90s, Krugman had written about it being irresponsible for the federal government to run budget deficits because of the impact the baby boomers were going to have when they began retiring.
According to Scarborough, Krugman claimed it was going to hit the fan in 2012. Yet now that we're here, and 10,000 baby boomers are retiring every day, debt and deficits are no longer a problem.
I guess that's an ad hominem attack in Krugman's view.
Now in fairness to Krugman, his point was that the time to deal with the debt was in the '90s when the economy was doing well and unemployment was much lower. He doesn't feel it's appropriate to be doing that now in a much weaker economic condition with stubbornly high unemployment.
Scarborough rebutted this by saying - accurately in my view - that we could be achieving fiscal policy that both stimulates the economy and reforms entitlement programs.
Krugman didn't agree.
As for Krugman "joking" about needing a housing bubble to replace the NASDAQ bubble, here's what he wrote on August 2, 2002:
[P]redictions of an imminent recovery in business investment keep turning out to be premature. Most businesses are in no hurry to go on another spending spree. And those that might have started to invest again have been deterred by sliding stock prices, widening bond spreads and revelations about corporate scandal. [...]
A few months ago the vast majority of business economists mocked concerns about a ''double dip,'' a second leg to the downturn. But there were a few dogged iconoclasts out there, most notably Stephen Roach at Morgan Stanley. As I've repeatedly said in this column, the arguments of the double-dippers made a lot of sense. And their story now looks more plausible than ever.
The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.
Sound like Krugman was joking to you?
I guess like Scarborough I'm now also guilty of an ad hominem attack for having the nerve to quote what Krugman wrote almost eleven years ago.
*****Update: In Krugman's 1997 book "The Age of Diminished Expectations" he wrote:
Why worry about deficits? There is a huge army on the march. Baby Boomers are getting older. this enormous generation will being turning 65 in 2010. Their ranks will swell inexorably. This aging population will create huge, foreseeable budget problems.
The numbers are fairly simple. Medicare and Social Security have both promised the great majority of people benefits that are much larger than their contributions…..Those paying in will stagnate, those making claims will explode. The result will be a completely predictable budget crisis. [...]
We know and surely as you can know anything about the economic future at 15 years from now our obligations will face large increases. Borrowing ourselves ever deeper into debt is Startlingly Irresponsible behavior by any standard.... It will create a severe political crisis.
We must act soon or there will be a real problem with solvency.
We're now sixteen years since this was published and 10,000 baby boomers are retiring every day.
Yet Krugman now believes we can wait to act despite claiming sixteen years ago "We must act soon or there will be a real problem with solvency."
