Martin Bashir on Tuesday said New York Times columnist Paul Krugman "deserves the Nobel Peace Prize."
Yes, the MSNBC host said Peace Prize - not one for economics - all because the perilously liberal economist has advocated more deficit spending and even more federal debt to stimulate the economy (video follows with partial transcript and commentary):
MARTIN BASHIR: It's time now to clear the air. And do you remember when a number of Republicans could not stop quoting the findings of two Harvard economists, Reinhart and Rogoff, who argued if government debt exceeded 90 percent of GDP then that country's economy was likely to collapse? So their answer and the response of many Republicans to the recession was not stimulus but austerity: slashing government spending as quickly as possible. […]
Mr. Krugman, a Nobel laureate no less, eviscerated their thesis even before it emerged that a graduate student at the University of Massachusetts had found that the data they'd used had failed to include the experience of several allied nations, contained a serious coding error, and that they'd used an odd weighting scheme, all of which had biased their findings. This only confirmed Mr. Krugman's original view.
Writing in the latest edition of New York Review of Books, he says the following: "At this point, austerity economics is in a very bad way. Its predictions have proved utterly wrong. Its founding academic documents haven't just lost their canonized status, they've become the objects of much ridicule.”
But now Carmen Reinhart and Ken Rogoff are squealing about the way their thesis has been debunked, and they’ve written a long, self-pitying letter to Paul Krugman, himself, saying in part: "We admire your past scholarly work which influences us to this day. So it has been with deep disappointment that we have experienced your spectacularly uncivil behavior the past few weeks. You have attacked us in very personal terms virtually nonstop in your New York Times column and blog posts."
I’ll tell you what is spectacularly uncivil. It is spectacularly uncivil to slash the transportation service for a child with cerebral palsy because a government followed Reinhart and Rogoff. It is spectacularly uncivil to cancel a monthly luncheon club for elderly disabled folk because two Harvard economists said that the answer to the recession was to slash spending. It is spectacularly uncivil to shut down a mother and baby group designed to support those who are suffering with post natal depression.
Paul Krugman was merely speaking up for those silent individuals whose lives have been mercilessly devastated by the advance of an economic theory that we now know is completely bogus. And for that alone he deserves the Nobel Peace Prize.
Not surprisingly, Bashir was factually incorrect in his depiction of this squabble between these economists while leaving out a lot of details.
First, when Reinhart and Rogoff's paper "Growth in a Time of Debt" was published in 2010, federal spending was $3.46 trillion. It is projected to be $3.8 trillion this year.
Is that what you call "austerity?"
I'd ask that question of Bashir, but I doubt he has any idea what austerity means.
In addition, I quite imagine Bashir didn't read Reinhart and Rogoff's letter to Krugman, and doubt that he would have understood any of it if he had.
Here are some critical highlights:
You particularly take aim at our 2010 paper on the long-term secular association between high debt and slow growth. That you disagree with our interpretation of the results is your prerogative. Your [sic] thoroughly ignoring the subsequent literature, however, including the International Monetary Fund's work as well as our own deeper and more complete 2012 paper with Vincent Reinhart, is troubling. Perhaps, acknowledging the updated literature-not to mention decades of theoretical, empirical, and historical contributions on drawbacks to high debt-would inconveniently undermine your attempt to make us a scapegoat for austerity. You write "Indeed, Reinhart-Rogoff may have had more immediate influence on public debate than any previous paper in the history of economics."
Setting aside this wild hyperbole, you never seem to mention our other line of work that has surely been far more influential when it comes to responding to the financial crisis. Specifically, our 2009 book (released before our growth and debt work) showed that recoveries from deep systemic financial crises are long, slow and painful. This was not the common wisdom at all before us, as you yourself have acknowledged on more than one occasion. Over the course of the crisis, and certainly by 2010, policymakers around the world were using our research, alongside their assessments, to help justify sustained macroeconomic easing of both monetary and fiscal policy fronts.
Your desire to blame our later 2010 paper for the stances of some politicians fails to recognize a basic reality: We were out there endorsing very different policies. Anyone with experience in these matters knows that politicians may float a citation to an academic paper if it suits their purposes. But there are limits to how much policy traction they can get with this device when the paper's authors are out offering very different policy conclusions. You can refer to the appendix to this letter for our views on policy through the financial crisis as they were stated publicly in real time. We were not silent.
Very senior former policy makers, observing the attacks of the past few weeks, have forcefully explained that real-time policies are very seldom driven to any significant extent by a single academic paper or result.
It is worth noting that in the past, polemicists have often pinned the austerity charge on the International Monetary Fund for its work with countries having temporary or permanent debt sustainability issues. Since its origins after World War II, IMF programs have almost always involved some combination of austerity, debt restructurings, and structural reform. When a country that has been running large deficits is suddenly no longer able to borrow new funds, some measure of adjustment is invariably required, and one of the IMF's usual roles has been to serve as a lightning rod. Even before the IMF existed, long periods of autarky and hardship accompanied debt crises.
Indeed, but don't expect someone such as Bashir to understand this - let alone report it.
As I've said in the past, it is truly disgraceful that a man with such limited knowledge of the issues he discusses can possibly have his own nationally televised program. That itself is an indictment of the state of today's news media.
The only upside is that Bashir has one of the lowest-rated programs in cable news. As such, very few Americans care what this man has to say let alone put themselves in a position to be propagandized by him.
Given his obvious advocacy and lack of accuracy, how can you blame them?
As for the Nobel Peace Prize, Yasser Arafat once got one for killing Israelis, Al Gore for perpetrating a hoax, and Barack Obama for getting elected president.
It only seems fitting that Krugman should get one for advocating America bankrupt itself.