Paul Krugman makes an intellectually honest argument against the buy-America provisions that almost made it into the Obama fiscal boost program:
Protectionism and stimulus (wonkish) - Paul Krugman Blog: Should we be upset about the buy-American provisions in the stimulus bill? Is there an economic case for such provisions? The answer is yes and yes. And I do think it’s important to be honest about the second yes....
[Under p]rotectionism... each country produces goods in which it has a comparative disadvantage, and consumes too little of imported goods... under normal conditions that’s the end of the story. But these are not normal conditions. We’re in the midst of a global slump.... [T]here are major policy externalities. My fiscal stimulus helps your economy, by increasing your exports — but you don’t share in my addition to government debt... this means that the bang per buck on stimulus for any one country is less than it is for the world as a whole.... [I]f each country adopted protectionist measures that “contained” the effects of fiscal expansion within its domestic economy? Then everyone would adopt a more expansionary policy — and the world would get closer to full employment.... Yes, trade would be more distorted, which is a cost; but the distortion caused by a severely underemployed world economy would be reduced....
What’s the counter-argument? Don’t say that any theory which has good things to say about protectionism must be wrong: that’s theology, not economics. The right argument, I think, is... [e]verything I’ve just said applies only when the world is stuck in a liquidity trap... [not] the normal situation. And if we go all protectionist, that will shatter the hard-won achievements of 70 years of trade negotiations — and it might take decades to put Humpty-Dumpty back together again.
And Clive Crook attacks Paul for being... intellectually dishonest. Clive Crook on Paul Krugman:
Politics is damaging the credibility of economics: Economists are failing to express anything resembling consensus on the most basic questions of economic policy.... I had thought they would at least agree that raising trade barriers at a time like this must be a bad idea. Then I read Paul Krugman, Nobel laureate, Princeton professor, and New York Times columnist...
But the column Crook cites--the one above--does say that raising trade barriers at a time like this is a bad idea.
Crook goes on:
[Krugman] explain[s] that raising tariffs – though perhaps unwise for other reasons – “can make the world better off”. “There is a short-run case for protectionism,” he went on, “and that case will increase in force if we don’t have an effective economic recovery programme.” What are his readers to make of this?
Well, they are supposed to read Paul Krugman. Theen they would understand that on those exceptional cases when the world is in a liquidity trap it faces a fiscal policy coordination problem. Trade barriers, Krugman says, lessen that problem--but their (momentary, transitory) advantages do not offset their (persistent, permanent) drawbacks.
Crook, however, goes on:
This impression of disarray... is not the fault of economics.... It is a mostly false impression created by some of its leading public intellectuals, Mr Krugman among them.... If you wish to know what Mr Krugman thinks on any policy question, do not read his scholarly writings; see which policies are advocated by the progressive wing of the Democratic party. Mr Krugman agrees with liberal Democrats about most things, and for the rest gives as much cover as the discipline of economics can provide – which, given its scientific limitations, is plenty. He does this even on matters where, if his scholarly work is any guide, the economics is firmly against his allies. Liberal Democrats are protectionists. Mr Krugman is not, but politics comes first...
Once again, more slowly now: Krugman's column asks the question: "Should we be upset about the buy-America provisions in the stimulus?" And Krugman's answer is: "Yes, we should be upset."
Now just what in the Eternal and Holy Name of The One Who Is is going on here?
In the second half of the column things become less muddy. Crook's first targets in the column are elsewhere. But Crook has succumbed to the High Broderism--he cannot be "unbalanced," he cannot attack a right-winger like Robert Barro for what Barro does say without also attacking a left-winger like Paul Krugman--albeit for what Paul Krugman does not say.
Let's roll the videotape for the second half of Crook's column. Remember: Crook misleads when he says that Krugman supports trade barriers. But Barro surely does oppose the stimulus package:
Clive Crook - Politics is damaging the credibility of economics: [M]ost economists believe that a powerful fiscal stimulus is both possible and desirable in present circumstances, and that the best stimulus would include big increases in public spending. Yet recently, Robert Barro, a scholar with conservative sympathies, wrote in the Wall Street Journal that this view was an appeal to “magic”. The problem is... that... both [Krugman and Barro] set the consensus [of the economics profession] aside so carelessly.... [They] destroy the credibility of their own discipline.... They narrow or deny the common ground. Why does this matter? Because the views of readers inclined to one side or the other are further polarised; and in the middle, those of no decided allegiance conclude that economics is bunk...
And then Crook shifts to his second target: the internet:
The web, for all its blessings, is an aggravating factor. Many of the most successful economics blogs promote communication within political groupings, not across them. On the web you best build an audience by organising a claque and stroking its prejudices. Extend elaborate courtesy to people you agree with and boorish contempt to those who do not get it. Celebrate exasperation and incivility as marks of intellectual authenticity – an attitude easier to tolerate in teenagers under hormonal stress than in professors at world-class universities. Consensus economics does exist. The Obama administration and the Federal Reserve are trying to apply it. The economics professoriate has an obligation to criticise and improve those policies. But if politics is allowed to split the discipline, and communication across that divide continues to break down, the science of economics will forfeit what little respect it still commands.
And here we have to say: "Huh?"
Robert Barro's article is not in a web publication: it is in newsprint on the op-ed page of the Wall Street Journal, which was a den of right-wing wingnuttery for decades before the world wide web was even a gleam in Tim Berners Lee's eye. That Robert Bartley and Paul Gigot have always regarded their editorial task as to degrade the stream of discourse about economic policy is a shame. But it is not the internet's fault.
UPDATE: Clive Crook responds:
Dismal science, revisited - Clive Crook: I think Paul is disingenuous (there I go again, more hysterics) when he says that the blog-post in question makes it clear he is not in favour of acting on the short-run argument for protection. You be the judge. In my view, he says it is all very complicated. He kind of supports free trade in an ideal world--that would be an Econ 101 world--but there are circumstances, which happen to be very like today's circumstances, in which protection could make sense. This "needs to be taken seriously", and the case gets stronger if optimal macro co-ordination is not forthcoming (which it won't be). Ask any Democratic congressman what Paul's advice on "Buy American" is. The answer will not be, "Don't do it." It will be, "The most brilliant economist I know of thinks there's a case"...
To which one must observe how Krugman starts:
Protectionism and stimulus (wonkish): Should we be upset about the buy-American provisions in the stimulus bill? Is there an economic case for such provisions? The answer is yes and yes...
And how Krugman ends:
Don’t say that any theory which has good things to say about protectionism must be wrong: that’s theology, not economics. The right argument, I think, is in terms of political economy. Everything I’ve just said applies only when the world is stuck in a liquidity trap; that’s where we are now, but it won’t be the normal situation. And if we go all protectionist, that will shatter the hard-won achievements of 70 years of trade negotiations — and it might take decades to put Humpty-Dumpty back together again. But there is a short-run case for protectionism — and that case will increase in force if we don’t have an effective economic recovery program.
I think Henry Farrell gets it right:
Are blogs ruining economic debate?: I suspect that Crook’s main beef with Krugman isn’t with polarization, but with the particulars of Krugman’s suggestion that the case for free trade is a qualified rather than an absolute one. Crook more or less accuses Krugman of being a dishonest partisan hack for saying this. However, from my limited understanding, Krugman is making claims that are reasonable ones within the internal debate among economists. Certainly, Crook doesn’t provide any contrary evidence. Thus, I suspect that Krugman’s perceived crime was to express these qualifications in the agora rather than in closed session. Which is to say that the ‘consensus’ that Krugman is setting aside so ‘carelessly’ is a political one – the shibboleth that free trade is an Unqualified Good Thing – rather than a seamless consensus that emerges from the underlying academic debates...