tag:blogger.com,1999:blog-17206839.post1532422806892332676..comments2023-09-09T09:26:22.175-04:00Comments on Andrew Samwick's Blog: Krugman on Paulson's SpeechAndrewhttp://www.blogger.com/profile/13514024573333057559noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-17206839.post-67353484522326773702006-08-20T18:59:00.000-04:002006-08-20T18:59:00.000-04:00You may have demonstrated that Krugman is wrong in...You may have demonstrated that Krugman is wrong in his analysis, or at very least incomplete in his argumentation, but you have not shown one bit of evidence how his own experience as a member of the upper 1% class should suggest anything whatsoever.Richard Schwartzhttp://www.rhs.com/poweroftheschwartznoreply@blogger.comtag:blogger.com,1999:blog-17206839.post-42422500461233768202006-08-20T19:41:00.000-04:002006-08-20T19:41:00.000-04:00Krugman's argument is roughly:If a person is i...Krugman's argument is roughly:<br><br>If a person is in the top 1 percent, then his or her gains relative to the population over the last 25 years are mainly due to the workings of the dominant political ideology.<br><br>Krugman's own experience is a contradiction to this argument, except insofar as his keen ability to criticize that ideology has widened his audience considerably. But I don't think that's the mechanism he had in mind.<br><br>So the suggestion is merely that he test out his arguments on cases he knows best--his own, presumably--before he makes such an argument, and in so doing craft a better argument.Andrew Samwickhttp://www.blogger.com/profile/13514024573333057559noreply@blogger.comtag:blogger.com,1999:blog-17206839.post-10174416975262727682006-08-21T10:02:00.000-04:002006-08-21T10:02:00.000-04:00I like how Krugman pointed out that Bill Clinton w...I like how Krugman pointed out that Bill Clinton was bogged down with congressional "hard-line right-wingers." Presumably, because of this, Clinton was unable to stop Krugman's suggestion that "since 1980 the U.S. political scene has been dominated by a conservative movement firmly committed to the view that what’s good for the rich is good for America."<br><br>OK, fine. But that movement must have gotten off to a bad start for Reagan seeing how he never had a Republican congressional majority in both Houses... Bush 41 never had a majority in either House. But at least Carter did... for all four years of his presidency... <br><br>I guess the Democratic majorities in Congress in the last 25 years were the hard-line right wingers?mattnoreply@blogger.comtag:blogger.com,1999:blog-17206839.post-6516552936215396962006-08-21T16:11:00.000-04:002006-08-21T16:11:00.000-04:00AndrewI'm afraid I have to join Mark Thoma:Som...Andrew<br><br>I'm afraid I have to join Mark Thoma:<br><br><i>Some readers, including Mark Thoma at Economist's View, misconstrued it as suggesting that if Krugman is in the top 1 percent, then he is being dishonest if he advocates policies that would reduce the income of the top 1 percent....Obviously, I don't believe that.</i><br><br>So, first, let me apologize for my mistake. I will say, though, that it was an easy mistake to make -- I had to re-read your previous post more than once to convince myself that I had, indeed, misconstrued it. More precisely, I should say that I had to re-read it to convince myself that the most reasonable interpretation of your post suggested misconstruction -- I don't think it was the clearest thing you've written (and you usually write with admirable clarity). Either way, my bad.<br><br>That said, what you were actually doing -- using Krugman's personal experience as a way to illustrate the supposed ridiculousness of his claims -- seems to me to be a pretty questionable line of attack. First, you are making an N=1 argument (all a skeptic needs to do to counter your argument in this sense is find a single counter-example). Second, I can't imagine that you really think education has anything to do with Krugman's probable outpacing of so many of his (our!) economist peers, for the very simple reason that we all have PhDs. Clearly the story has to be about skill rather than education per se -- whatever it is that Krugman and the rest of us do, he is getting paid more to do it (I'll grant you that he writes pop books and many of the rest of us don't, but again, that has nothing to do with returns to education -- rather it has to do with returns to writing ability or skill at polemicization, or whatever). <br><br>I read Krugman's article in Friday's times with about the same amount of skepticism that DeLong <a href="http://delong.typepad.com/sdj/2006/08/the_primacy_of_.html" rel="nofollow">expressed yesterday</a>. But even if Krugman is painting with too broad a brush on the political-primacy front, it seems to me that there is still a lot to be said for his criticism of Paulson's (and many others') suggestion that getting more education will somehow put a big dent in the extreme-right-tail sort of inequality growth witnessed over the last couple decades. It just strikes me as ridiculous to suggest that the typical kid considering dropping out of high school would have a decent shot (say, probability=0.01) of winding up in his cohort's top 1% if only he finished school and got a BA. (See <a href="http://cardcarryingmember.blogspot.com/2006/08/greg-mankiw-krugmans-flip-flopper.html" rel="nofollow">my post from the other day</a> for a bit more on this issue.)<br><br>None of that is to say that growing-returns-to-skill is a bad explanation for much of the spread in (labor) income inequality. But there can be a growing-returns-to-skill-driven widening of the income distribution even while "People at the bottom should get more education" is not particularly useful policy advice for those who are worried about income inequality. This question is really about how effective education is in transmitting the relevant skills to people situated differently in what we might call the "underlying ability distribution" (though even that term is insufficiently rich, since it doesn't capture the idea that people's "underlying ability" could have both a levels and interaction-with-education component). Given that so much of the spread in US labor income inequality seems to be driven by people <i>within</i> the top part of the distribution, for whom I doubt educational differences are an important distinguishing variable, I am pessimistic that education is the answer. <br><br>For the record, I would love to find that I am wrong: then we will just have to argue about whether to pursue policies to increase educational attainment and thus reduce inequality.<br><br>JonahJonah B. Gelbachnoreply@blogger.comtag:blogger.com,1999:blog-17206839.post-12892414739271052812006-08-21T17:14:00.000-04:002006-08-21T17:14:00.000-04:00I appreciate your willingness to re-read the post ...I appreciate your willingness to re-read the post on my behalf.<br><br>In fairness to Paulson, he did not suggest "that getting more education will somehow put a big dent in the extreme-right-tail sort of inequality growth witnessed over the last couple decades." He talked about the HS/no-HS gap, which has widened over this period and which would be made less consequentlial by having more people become highly educated. It was Krugman who interpreted inequality to be the top 1 percent versus the rest.<br><br>I think Krugman took a cheap shot at Paulson and didn't back it up. So I viewed my N=1 argument, non-generalizable as it was, as an improvement over Krugman's line of reasoning.Andrew Samwickhttp://www.blogger.com/profile/13514024573333057559noreply@blogger.comtag:blogger.com,1999:blog-17206839.post-1033915498535685572006-08-21T18:13:00.000-04:002006-08-21T18:13:00.000-04:00AndrewI haven't read Paulson's speech, so ...Andrew<br><br>I haven't read Paulson's speech, so I will just stipulate to your point. <br><br>I have to say, though, that you have a lot more to say on this issue than just to make a self-consciously non-generalizable, arguably cheap, and as I noted, not particularly compelling, point in response to what you perceive to be someone else's cheap shot. Cheap shot for cheap shot just leaves everyone cheap, in my book.<br><br>Personally, I do think that *both* the growth in the HS/no-HS gap and the growth in extreme-right-tail-type inequality are important socioeconomic phenomena that I would prefer be addressed somehow (what that how is, is of course the $64k question). I think the basic facts of what's gone on in -- and <i>with</i>in the top 1% over the last 20 years has been truly stunning. I recognize that not everyone is bothered by the massive concentration in income and wealth that has resulted, but plenty of people are. <br><br>Anyhow, I'm glad you're writing on this issue -- I think it's a good thing for this debate to happen in the open among reasonable and reasoning economists of all political and empirical stripes.<br><br>JonahJonah B. Gelbachnoreply@blogger.com