Why Oh Why Are We Ruled by These Liars? (George W. Bush Smirks Edition)
Gillian Tett on Credit Derivatives and IB Losses

Yes, Andrew Sullivan Is Still a Dork

He writes:

www.AndrewSullivan.com - Daily Dish: MANKIW ON KRUGMAN: Almost as damning as Dan Okrent.

And gets eviscerated by an anonymous correspondent:

You are dead wrong (as well as sloppy and lazy) in your portrayal of Okrent and Mankiw's statements about Paul Krugman. (For the record, I know both Paul and Greg. although not well.)

The Okrent case is the more egregious: he says that Krugman "slices and dices" data to support his point of view, without offering an example. I'm an economist myself, and know the macro data very well. I can't think of single example to support Okrent's statement. (Paul has published corrections regarding a couple of minor, and non-substantive, points.) Most conservative attacks on his arguments involve innumeracy or sheer ignorance of basic facts or basic principles of economics; many involve willful misrepresentation.

Now consider Greg's statement (and I'm paraphrasing) that "Paul seems to think that everyone who disagrees with him is either fool or a liar." To begin with, I'll stick to economics. The plain fact is that the Bush Administration has been consistently and deliberately mendacious in its public portrayal of its economic policies. (This characterization, by the way, is the overwhelming consensus in the professional economics world, which includes many conservatives.) Capable policy apointees (like Greg or Glen Hubbard) have had no meaningful input in this Administration; nor has the professional staff at places like Treasury or CEA. All economic policy involves politics. But the politicization of the policy making process in this Administration is without precedent in my professional life.

Paul would have been called a moderate or even conservative Democrat prior to this Administration. (Read his classical essay, "In Praise of Cheap Labor," if you're under the illusion that he's some sort of leftist.) So would I. Paul appears strident only because he's had the bad manners to say that people are lying when they're obviously lying. (A prominent case in point: many of the President's public statements about the finances of the social security system have been plain, simple untruths.) And what's maddening to Paul, and to me, is that there's no core of conservative principle in this Administration. A conservative devotion to free markets has been displaced by reckless spending, reckless tax cuts, crony capitalism and special interest give-aways. What "balanced" take on these issues should Paul offer?

More generally, you should know better. Remember, I've confined myself so far to economic policy. Do you want to defend the honesty and integrity of this Administration on, say, abuse of detainees?

And then gets re-eviscerated by Matthew Yglesias:

Matthew Yglesias: The Lies, The Lies: As we know, and as this letter writer to his site reminds us, Andrew Sullivan has been a pretty consistent proponent of the view that Paul Krugman is some sort of liar. At issue, are Krugman's repeated insistences that George W. Bush's economic policy is founded on a tissue of lies. Krugman is, of course, entirely correct about this. The unnoted irony here is that in his May 14, 2001 column 'Downsize,' Sullivan conceded Krugman's point:

Ah, but the details. The Krugmans and the Chaits will shortly have a cow, if not a whole herd of them. The Times will weigh in again with yet another barrage of articles, editorials, and op-eds opposing any tax relief that would actually benefit those who pay most of the taxes. And, to be fair to these liberal critics, they're right about one thing. One of the tax cut's effects will surely be that the United States won't be able to afford a vastly expanded Medicare drug benefit. And the archaic sinkhole known as Social Security won't be shored up either. And Medicare, may the gods preserve us, may even have to grow at a slightly slower rate. In fact, many of the spending programs that some still believe solve most human problems will encounter the only political resistance that matters in budgetary matters: insolvency.

To which my response is: Hoorah. We don't need these expansions of the welfare state. We need to privatize Social Security if we want to provide for our retirement in ways slightly more up-to-date than those based on economics and life-expectancy figures devised in the 1930s. We don't need to add yet another entitlement for the most pampered generation--our current seniors.

And if there is one thing we have learned in the past 20 years, it's that controlling government spending is simply impossible without deficits. Look back at the last decade. A huge part of Bill Clinton's economic success was his remarkable grip on public finances. He deserves credit for this, although the Republican Congresses from 1994 to 1998 were mainly responsible, and Ross Perot made deficit-cutting hot. But from 1998 on, all hell broke loose. Last year, discretionary spending increased by a whopping 8 percent--under the Republicans. The minute deficits became surpluses, in other words, the politicians started bribing the voters with their own money. The only relevant question is: Why do Dennis Hastert, Trent Lott, Dick Gephardt, and Tom Daschle know better than taxpayers how to allocate their own resources? . . . Some commentators--at this magazine and elsewhere--get steamed because Bush has obscured this figure or claimed his tax cut will cost less than it actually will, or because he is using Medicare surplus money today that will be needed tomorrow and beyond. Many of these arguments have merit--but they miss the deeper point. The fact that Bush has to obfuscate his real goals of reducing spending with the smoke screen of 'compassionate conservatism' shows how uphill the struggle is.

Yes, some of the time he is full of it on his economic policies. But a certain amount of B.S. is necessary for any vaguely successful retrenchment of government power in an insatiable entitlement state. Conservatives learned that lesson twice. They learned it when Ronald Reagan's deficits proved to be an effective drag on federal spending (Stockman was right!)--in fact the only effective drag human beings have ever found. And they learned it when they tried to be honest about taking on the federal leviathan in 1994 and got creamed by Democrats striking the fear of God into every senior, child, and parent in America. Bush and Karl Rove are no dummies. They have rightly judged that, in a culture of ineluctable government expansion, where every new plateau of public spending is simply the baseline for the next expansion, a rhetorical smoke screen is sometimes necessary. I just hope the smoke doesn't clear before the spenders get their hands on our wallets again.

Now needless to say, Sullivan differs from Krugman in thinking that this is a good thing, while Krugman thinks it's a bad thing. But that's really all there is to it. Bush was lying. As Sullivan correctly points out, the lies were integral to securing public tolerance for Bush's agenda. Krugman has tried to expose the lies in hopes of denying Bush's agenda public support. It's very hard to see how Krugman can be held culpable in this scenario.