Paul Krugman attacks what "everybody knows to be true" and says "everyone" is wrong. The truth?
So by all means let’s keep an open mind about new ideas. But we should bear in mind that the world would be in much better shape right now if economic orthodoxy had in fact been followed.
Every Reaganist knows that "Paul Krugman" (whatever that might be) is a liberal who says liberal things about economics. They are half wrong. He is a liberal who says conservative things about economics. He is "the man" who agrees with "textbook economics" not your hippy-dippy new ideas about reality.
How about the second question. Is what Krugman says true? He would very much like it to be. His entire existence is based on the idea that "orthodox economics" produces liberal economic policy recommendations.
Well, how could that possibly be when everyone knows that, just the other day in the NYT, the author of the most popular economics textbook said free trade is always good and Congress is plain stupid if they don't pass the Trans Pacific Partnership, a trade deal currently being negotiated? So says Greg Mancow in "Economists Actually Agree On This One."
So how does Krugman frame the battle?
On one side you have the Very Serious People — politicians, media figures, big business types who like to weigh in on public affairs. On the other side you have mainstream economists. So it’s VSPs versus MSEs.
Mancow, Harvard professor... Nay... Chair of the Harvard Economics Department and textbook author will be happy to know that he's not an economist.
Krugman's solution to this confusion: Mancow is right about trade always being good (disavowing liberal principles and reality), but the TPP is not a trade agreement, so the textbook doesn't apply. ("This Is Not A Trade Agreement")
In other words, Krugman defines "mainstream orthodox economics" as what Paul Krugman says. When other orthodox, credentialed, or Nobel winning economists disagree, they are departing from the orthodoxy that they otherwise clearly represent, by definition (PK's definition).
How does a non-economist policy maker do the right thing? Krugman says: "Easy. Just follow the orthodox." What's that? "Whatever I say."
This much is obvious: a very smart man is working very hard to believe he has devoted his life to a valid discipline that reveals the truth, while at the same time believing his own two eyes. The strain is starting to show.