Krugman's Voodoo Statistics: A kid throws rocks at Reagan's Monument

Paul Krugman Criticizes Reaganomics 
Here's how to defend it

Blogger buddy Ben Franklin would say, "Paul Krugman is a douche." I won't say that, but I do take issue with his criticism of the Reagan years.  

Lies, Damn Lies, and Statistics

Krugman proves that a crafty, beady-eyed man with some education man can make statistics say whatever he wants them to. It's all about how you aggregate or disaggregate them and how wide or narrow an angle your snapshot captures.  

He showcases the blazing hot growth of the 50's and 60's that was the inevitable result of post-WW II rebuilding, and then criticizes Reagan because his growth didn't measure up to this impossible-to-maintain pace.

So why does Fama (Eugene Fama, who trumpets the irrefutable success of Reaganomics) believe that something wonderful happened around 1980? Part of it, I suspect, is that in his milieu the politically correct thing is to pretend that nothing good happened until Reagan came along.

Sorry: there’s no measure I can think of by which the U.S. economy has done better since 1980 than it did over an equivalent time span before 1980. It may be something you’ve heard, it may be something you’d like to believe, but it just didn’t happen.

Post WW II Economic Boom Was An Historic Anomaly  
All true, I'm sure, but Dr. Krugman fails to provide a contextual backdrop. Our WW2 and post-WW2 economic and population boom is a historical anomaly. With the rest of the world in economic ruins, the US cleaned up exporting goods to help them rebuild. This rebuilding spurred astronomical growth rates in economies worldwide, and the US enjoyed an unprecedented share of the spoils. 

As Europe came roaring back and Asia climbed out of third-world status, our share of the global economy naturally shrank. The 70's was an era of economic decay, marking the end of the post-war rebuilding boom. US businesses, fat, dumb and happy, got complacent and lost even more market share. The result was more high unemployment, raging stagflation and high interest rates. Reagan and Volker turned it around.

Krugman is an Intellectually Dishonest Liberal Political Hack  
Blame Reagan? Ha! Sounds like political sour grapes to me. This is why Mr. Krugman may know economics, but he loses all credibility when he strays into political commentary. His misuse of statistics and his Nobel to manipulate public opinion is unconscionable. He's a charlatan. Some would even call him a douche...

NY Times - Krugman
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