Krugman vs. Economics

Alan Blinder, Brad DeLong, Paul Krugman, and I share an intellectual heritage. Three of us got Ph.D's in economics at MIT, and DeLong's MIT connection is that he taught there.

All of us would agree with what I might call the Growth Doctrine:

Over a period of a decade or more, the most important determinant of economic well-being in a society is economic growth. Economic growth is the most reliable way to address average living standards, poverty, fiscal soundness, the viability of programs such as Social Security, etc.

This is not some right-wing dogma.

• DeLong, a liberal Democrat, makes a very strong case for the Growth Doctrine in his new textbook, Macroeconomics. The chapter on the facts of growth is outstanding.

• Blinder, another liberal Democrat, articulated the growth doctrine in a relatively little-noticed book called Growing Together.

Paul Krugman has written numerous columns on fiscal policy and Social Security, including this recent example. Yet I cannot recall a single column that spoke to the issue of how fiscal policy and Social Security policy affect economic growth.

The fact that he always comes down against the policies of George Bush may win Krugman fans in some quarters. However, he is consistently lowering the level of the debate and misleading the public by failing to frame the issue in terms of which policies would lead to more economic growth. Therefore, I believe that it is no understatement to say that Krugman is irresponsible.

Discussion Question (difficult): President Bush has promoted tax cuts and partial privatization of social security. What aspects of these policies might inhibit economic growth? What aspects of these policies might promote economic growth?