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Robert Skidelsky Certainly Does Not Think There Is Only a Dime's Worth of Difference Between Cameron and Obama

Ryan Cooper Talks to Michael Kinsley, as One Would to a Child


Why oh why can't we have a better press corps?

To extend a metaphor originated by R.G. Hawtrey: the house is on fire, and Michael Kinsley is out there screeching about how we dare not hook up the firehose because there was a flood 40 years ago. And now Ryan Cooper tells me Kinsley is back--this time screeching not just because those of us who know what we are talking about want to hook up the firehose, but also because we are not treating him with the sufficient respect he believes is his due.

So Ryan Cooper attempts a mitzvah, and tries to get through by taking the advice Saris offers in Galaxy Quest as to how one should talk to Mathezar:

A Calm, Reasonable Explanation of Why Michael Kinsley Is Wrong about Austerity: Writing in TNR, Michael Kinsley is annoyed Paul Krugman and his “attack dogs” calling him lots of nasty names… as a (sometimes unsuccessful) proponent of a more generous lefty discourse, perhaps a bit of decency might get through. To wit:

  1. Inflation is nothing to worry about. Kinsley has been wringing his hands about this since 2010…. Inflation is no worry because there is still a lot of slack in the economy, mostly in the form of unemployed workers. The price level is set by market forces, not by magic, and increased economic activity will come largely in the form of new jobs and services, not increased prices…. If you want a bartender, there’s one for the hiring, you don’t have to bid one away from someone else. If people buy more shoes, companies can just run the shoe factory a bit faster…. If Kinsley wants Krugman et al to take his inflation concerns seriously, he needs a story for how it will happen.

  2. The national debt is nothing to worry about…. Since the 2008 crash, the government has borrowed hugely, but borrowing costs for new debt have plummeted to the point that people now are paying for the privilege of giving their money to Uncle Sam for ten years…. Rates on US debt are the combination of expected inflation (low), expected real short-term interest rates (low), and a “term premium,” (i.e., it costs more to borrow money for 30 years than for 5). But the financial system is awash in liquidity—corporate profits are at historic highs, and labor’s share of national income is at historic lows…. Business and finance see little to invest in—why build more factories if people can’t afford more products?…. [S]o [the cash] goes into US debt. Kinsley keeps asking how we’re going to deal with the national debt… the answer is: when we get back to full employment… we can do some fiscal consolidation without cratering the labor market because the Fed will be able to drop rates to compensate.

As Matt O’Brien points out, the longer it takes to get to full employment, the greater the number of long-term unemployed there will be, who find it nearly impossible to find jobs. This is fast becoming a major structural problem in the US economy, one that took WWII to solve last time it happened. Personally, I’d say this country could use five years at least of rip-roaring wage growth to make up for the last forty, but this is the basic picture Kinsley is asking for.

I noted seven howlers in Kinsley's original attack on Paul Krugman:

  1. Kinsley's claim that Krugman had coined "austerian" to dismissively make "adherents sound like aliens from another planet" when the word was actually coined by Jude Wanninski.
  2. Kinsley's claim that Republicans and conservatives think Obama is an "austerian"--simply writes "yes" when he means "no" (and nobody at the New Republic catches it in proofing).
  3. Kinsley's profession that he is puzzled about what "Austerian" policies are--meaning either that he has not done his homework, or he is merely affecting a bizarre rhetorical pose.
  4. Kinsley's claim that there is only a dime's worth of difference between the policies Cameron-Osborne want to follow and those that Obama-Biden wants to follow.
  5. Kinsley's claim that "the lesson of Paul Volcker" is that large budget deficits are incompatible with low inflation.
  6. Kinsley's acknowledgement that he hasn't bothered to try to figure out whether and to what degree the experiences of Greece and Iceland are relevant to the United States.
  7. Kinsley's claim that "Austerians don’t get off on other people’s suffering coupled with his claim that "Austerians deserve credit: they at least are talking about the spinach"--when Krugman's entire point is that we don't need that kind of spinach right now.

I won't have any time to spend on this for at least another two weeks. So cansomebody who has read the new Kinsley tell me if he doubles down on any of those seven, or if he quietly drops all seven of these claims? And whether he introduces any new substantive arguments at all, or is just whinging, and really should read Daniel Davies?