Paul Krugman: Bush's delusions of economic triumph (Barf)

PRINCETON, New Jersey Republicans, we hear, are frustrated by polls showing that Americans have a poor opinion of President George W. Bush's economic leadership. In their view, the good news about Bush's economic triumphs is being drowned out by the bad news from Iraq.

A recent article in The New York Times, citing concerns of "Republican elected officials, pollsters and strategists," put it this way: "The creation of nearly 900,000 new jobs in the last four months - a development that might otherwise have redefined the race in Bush's favor - has been largely crowded out of the electorate's psyche by images from Iraq."

Funny, isn't it? In 2002, Republican Party strategists used the impending Iraq war to distract the public from the miserable economic news. Now they're complaining that Iraq is taking voters' focus off the economy.

But is the economic news really that good? No. While the recent economic performance is better than in the administration's first three years, it isn't at all exceptional by historical standards. And after those three terrible years, the economy has a lot of ground to make up.

Let's start with the "nearly 900,000 new jobs" created in the last four months. Is that exceptional? Well, during the first four months of 2000, the last presidential election year, the economy created 1.1 million new jobs. An e-mail message to Bush's supporters from Ken Mehlman, his campaign manager, takes a longer view, boasting of 1.1 million jobs created since last August (when job growth finally turned positive). But in April 2000, payroll employment was 2.3 million higher than in August 1999.

And that was after seven years of sustained employment growth; rapid job growth is hard to achieve when the economy is already close to full employment. To find a year comparable to 2004, we need to look back to 1994, when the economy was still recovering from the first Bush recession. In the first four months of that year, the economy added almost 1.3 million jobs.

The experience of 1994 also gives us some indication of how likely job growth is to "redefine" an election. Between December 1993 and November 1994 the economy gained 3.6 million jobs, a number beyond the Bush administration's fondest dreams. Yet voters, convinced that President Bill Clinton was leading the country astray, gave his party a severe defeat in that year's midterm elections. So it's interesting that a new CBS News poll finds that 65 percent of Americans believe that the country is headed in the wrong direction - a level not seen since 1994.

If you want to convince yourself that I'm not playing games with dates, go to the Bureau of Labor Statistics Web site at stats.bls.gov. Click on "U.S. economy at a glance," then on the green dinosaur next to "Change in payroll employment," for a 10-year chart of monthly job gains and losses. The chart reveals that for 37 months, from January 2001 to February 2004, the Bush administration presided over dismal job numbers: Employment for each month fell, or grew far more slowly than the norm during the Clinton years. March and April were much better, but they still weren't exceptional by 1990s standards.

And a mere return to Clinton-era job growth isn't enough: After all those years of poor job performance, America needs extra-rapid growth to make up for lost time.

Here's one way to look at it. The job forecast in the 2002 Economic Report of the President assumed that by 2004 the economy would have fully recovered from the 2001 recession. That recovery, according to the official projection, would lead to average payroll employment of 138 million this year - 7 million more than the actual number. So we have a gap of 7 million jobs to make up.

And employment is chasing a moving target: It must rise by about 140,000 a month just to keep up with a growing population. In April, the economy added 288,000 jobs. If you do the math, you discover that Bush needs about four years of job growth at last month's rate to reach what his own economists consider full employment.

The bottom line, then, is that Bush's supporters have no right to complain about Americans' failure to appreciate his economic leadership. Three years of lousy performance, followed by two months of good but not great job growth, is not a record to be proud of.

Krugman seems to have completely forgotten his recent prediction that these 900,000 jobs would not be created. He hopes we won't notice that, while he again moves the goal post.

Paul Krugman should of just stayed in the ivory tower making a good living as one of the top international economic professors in the country and collecting nice royalties from the textbooks he authored. I have a graduate degree in economics and Krugman is a giant in international economics. I have used his textbook in an undergraduate course, heard him give a lecture and read many of his academic papers. The interesting thing is I would of never thought of him as some raving lunatic fringe liberal from his academic writings. Maybe thats a credit to economics as a field of study as opposed to what the other social sciences have become. I try to think of him as a great economist he is and a future noble prize winner and not as the utter failure as an op-ed writer.

Gee, no mention of Quarter on Quarter GDP growth, low interest rates, low unemployment, high productivity, low inflation, and rising wages.

Nor any explanation of why jobs were disappearing from the months before President Bush took office until his tax cuts finally got our economy back on the right track again.

In short, typical liberal denial...typical Krugman.

I remember reading Krugman's book "Age Of Diminished Expectations" in college. Essentially Krugman's thesis was that the 1990's were an age of expectations on the part of the American people. Yet why is ever liberal pundit including Krugman, harkening back to this "age" as a golden time. Krugman was a spiteful pessimist then and still today. Sounds like Krugman has delusions of grandeur.

"I have a graduate degree in economics and Krugman is a giant in international economics. I have used his textbook in an undergraduate course..."

You do realize that Krugman missed the entire 1990's economic boom, yes?! He predicted near stagnation.

The Age of Diminished Expectations, Third Edition: U.S. Economic Policy in the 1990s
by Paul Krugman (Author)

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I almost forget about that book. The textbooks I used were more theoreticial in nature and did not contain the crap found in books meant to go as best sellers on the NY Times list.

Krugman predicted that the tax cut would not get us out of the recession, and spent the first two years of W's Admin helping to block it. Now he's been proven wrong, and not only that, but history suggests that if he and his liberal buddies in DC had gone along with it in the first place, we never would have had a recession at all, and no jobs would have been lost, and we would still be running a surplus.

Of course, like a good liberal Dem., he can't see the obvious, and insists that the policy is a failure.

Krugman is wrong and has always been wrong... but, as with all ideologically blinded academes, he cannot face it. He childishly thinks we will forget his earlier predictions, and buy a whole new lump of gristle from him. He predicted tax cuts wouldn't end the recession? I predict a strengthening economy won't end his lies.

mkj6080 wrote: Paul Krugman should of just stayed in the ivory tower making a good living as one of the top international economic professors in the country and collecting nice royalties from the textbooks he authored. I have a graduate degree in economics and Krugman is a giant in international economics. I have used his textbook in an undergraduate course, heard him give a lecture and read many of his academic papers. The interesting thing is I would of never thought of him as some raving lunatic fringe liberal from his academic writings. Maybe thats a credit to economics as a field of study as opposed to what the other social sciences have become. I try to think of him as a great economist he is and a future noble prize winner and not as the utter failure as an op-ed writer.

Oh yeah, it's a real shame he tried to apply his absolute academic genius to the real world. Somehow the wheels fall off of many wagons at that turn.

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