August 11, 2003

DONALD LUSKIN IS challenging the New York Times to correct Paul Krugman’s errors:

When is the “newspaper of record” going to run a correction of Paul Krugman’s egregious mathematical error in which he claimed, in his August 1 column, that growth in real per capita California state spending from $1,950 in 1990 to $2,211 in 2003 was “only 10%,” when anyone with a pocket calculator can tell that it is really 13.4 percent? And when will it correct Krugman’s flatly deceptive claim that this growth “was simply a matter of keeping up with the population and inflation,” when calculations of real per capita growth, by definition, already take those factors into account?

I challenge the Times either to demonstrate that Krugman’s calculation and his characterization are accurate, or to correct his errors. For a Princeton economics professor, this should be a simple matter to straighten out with the editors.

And when is the “newspaper of record” going to run a correction retracting the embarrassing quotation that Krugman attributed to the Bush administration’s Treasury Department in his August 5 column, but which no one in the Bush administration or the Treasury Department ever actually said?

Right after they correct Maureen Dowd’s egregious misquotes, I suspect. And maybe after they correct the serious error on federal sentencing that law professor Eric Muller pointed out.

UPDATE: An economist reader emails:

Luskin does a good public service by getting on Krugman. Krugman’s column is an embarrassment to my profession. However, Luskin’s latest does Krugman a disservice and I would hesitate to tout it.

Here is Krugman’s relevant sentence.

As analysts at the nonpartisan California Budget Project point out, real state spending per capita was only 10 percent higher in 2002-03 than it was in 1989-90 — that is, most of the spending growth was simply a matter of keeping up with the population and inflation.

Now the 13% versus 10% correction is, of course, valid assuming Luskin’s numbers are correct, but on the real per-capita business (and I hate to admit it) I’m with Krugman. The raw number of the budget increase is huge – something like 40%. The real per-capita increase is 10% (or, more correctly, 13%). That implies that “most of the spending growth was simply a matter of keeping up with the population and inflation” just as Krugman states. Krugman isn’t stating that real per-capita spending didn’t increase, but only that real per-capita increases make up a minority of the raw increase. That is, 10/40 (or 13/40) is less than 1/2.

Perhaps Luskin will have a response.

ANOTHER UPDATE: Luskin emails:

It doesn’t surprise me that an economist would have no problem with Krugman’s statement about real per capita spending. When I first read the statement it didn’t bother me either, because I easily knew what Krugman meant — he was implicitly saying that population growth and inflation reduced what would otherwise seem to be even greater spending growth to “only 10%” (of course it’s rally 13.4% according to Krugman’s own source, but that’s another matter). But then I started getting emails from readers, who are not economists. They were confused and misled by the way Krugman chose to express himself. I went back and read it again, and could see what they meant. Considering that Krugman has been browbeating the Treasury Department for the way it speaks about tax distribution statistics, he should set a high standard and say exactly what he means. The evidence of the emails I got is that people were misled — and it’s no coincidence that they were misled in the direction that flattered Krugman’s point. While that element of Krugman’s statement may not deserve a “correction” per se, he should certainly acknowledge its flaws (and hopefully not in his usual supercilious way of sighing, smiling ironically, and then going on about how he sometimes forgets that he’s not writing for other trained economists, and space is so constrained, and so on and so on….).

There you are.

ANOTHER UPDATE: Luskin now has more on his blog.

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