Friday, May 17, 2002

More blather from Matthew Hoy's Hoystory anti-Krugman attack column today. I'm not overly worried about this guy actually scoring a blow; Krugman, with typical ease, both answered and humiliated that moronic "partisan" charge with this lovely little blurb on his main site, and it's ludicrous to think that the garden-variety neo-cons Krugman critics like Hoy could actually score points on the man. This particular entry was actually fairly complimentary to Krugman, but there are still some good parts.

Let's take a look at some highlights, shall we?

In the wake of the Enron scandal and the ripple effect it's had on the accounting world, I certainly agree that accounting rules have to be strengthened. Where I disagree with Krugman is the necessity that the government take a lead role.I think that most corporations, at least for the next few years, are going to want their accountants to follow the strictest accounting rules possible. If Standard & Poor's guidelines for one-time expenses are more informative to investors then investors will act on that information. As long as public corporations' books are open to scrutiny and accountants are honest, the system works. The problem with Enron was in how they cooked their books, with the aid of Arthur Anderson.

The problem is that this is a classic Free Rider situation. Every company in the business is going to want to look like they've remedied their practices and are going to want someone (else) to do the proper work so they can actually make proper forecasts for their own clients. They aren't going to want to do it themselves, though; "cooked books" and bad advice are just too lucrative to give up. Krugman's beloved "moral hazard" would come into play sooner or later, even after that "next few years". Much of this came out of the last big boom... what happens when the next one hits and corporations decide that creative accounting is "the wave of the future" once again? What happens when the the "dumb money" decides that everything's hunky-dory, and somebody decides to cash in on their ignorance? There's a reason regulatory bodies exist, and its to deal with corporations when they're feeling larcenous (like before) not when they've been caught with their hands in the cookie jar and get slapped (like now).

That's a fairly minor economic point, though, that just shows that Hoy doesn't understand Krugman very well. The comments on the tax column on his page made that pretty clear (before he deleted them... heh) but it's a point worth repeating. What's really funny are garden-variety bashes like this:

When I flipped to the second printed page of Krugman, I was overcome with relief. Krugman had not been abducted by aliens. He had not been replaced by a "pod-person"

There it was, in black and white, an attack on President Bush.

What if it's deserved? I refer you back to this. Krugman seems to delight in mocking and humiliating his critics. He certainly has a gift for it, even as they keep on swinging and missing, swinging and missing...

Finally, it appears that Krugman may be adjusting his columns in an attempt to remove himself from the top of lying in ponds list of most partisan pundits...Add the negative on Bush to the negative on Levin along with the positives of McCain and Levin and this column balances out very nice.

There is power in the blogosphere.

The self-congratulatory nature of bloggers, especially neo-con bloggers, is part of the reason I felt compelled to start this. Honestly, if I didn't like the medium so much I would have stayed away because of the attitude. Birds of a feather, I suppose. This particular bird, however, needs to learn something about methodology, because the methodological base of this "partisan pundits" thing is utter nonsense. It is, as my old political theory prof would say, "Dangerously Wrong". I haven't seen statistical science this bad since The Bell Curve. The very notion that Krugman can "massage" it only shows how barmy it truly is.

Somebody else is swinging-and-missing over here. I'd suggest that Krugman start his own blog, but he's too busy writing a textbook on economics.

The "Amateur Economist" suggests that

in order to test Krugman's assertion, he needs to be compared to other economists who are columnists.

Well, actually his argument is that his columns are demonstrably true and accurate and that the reason is because he understands economics. Horse vs. cart, friend. Still, I'll agree. Lets find other columnists who are currently writing a textbook on economics and we'll talk, hmm?

The neo-con sector of the "Blogosphere" needs to do a little speedbag work, I think. It's getting pummelled.

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