How to distort history

Krugman doesn´t miss any opportunity to “harass” republicans even if to do so he has to take some “liberties” with the historical facts:

Reagan did not start an era of unprecedented growth by any measure: employment, GDP, productivity, whatever. But maybe the easiest way to see what didn’t happen is to look at median family income in constant dollars:

A spectacular increase during the high-tax, strong-union postwar generation; fitful improvement since, with the only sustained rise during the Clinton years. That’s the story; it’s amazing how many people don’t know it. (My bold)

Oh, by the way, GW Bush presided over pretty good productivity growth but terrible job growth, even before the recession. So the overall result was poor.

If you take a closer look at the facts, the “conclusion” changes quite dramatically:


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17 thoughts on “How to distort history

  1. Pingback: Krugman does it again | Historinhas

  2. So what’s your point? Under Reagan, real median income increased 1.5%/yr. Even if you just pick his best six years (’83-”89), as suggested by your misleading line, he got 2.2%/yr. Under Kennedy/Johnson, it increased 3.9%/yr. How does annotating the graph turn 1.5%/yr into “unprecedented”?

    • The Reagan years are clearly indicated and show that this statement by Krugman is false:
      A spectacular increase during the high-tax, strong-union postwar generation; fitful improvement since, with the only sustained rise during the Clinton years. That’s the story; it’s amazing how many people don’t know it.

  3. I thought Reagan was elected in 1980. Must be mistaken.

    Instead of arguing over which kink of the graph is or is not a “sustained rise”, we should just tabulate the numbers (GDP, median income, unemployment, deficits, whatever else one might want) for each president. The result will be that the Reagan years were mediocre in most respects. Not as bad as the past decade, not as good as Clinton or the postwar period, certainly not stellar or magic by any non-arbitrary measure. Plus, inequality started to take off about 1980 although Hacker/Pierson argue that the real turning point was the late 1970s. In any case, Krugman is arguing against those who say that more Reaganomics would be the right recipe for our current crisis. That claims is absurd and some of the reasons are laid out on my blog. Briefly, Reaganomics initially increased unemployment before it decreased it; second, whatever economic success may be ascribed to Reaganomics is in large part due to deficit spending, which is precisely what today’s GOP portrays as the root of all evil, rather than part of the solution.

    • Reagan was president from January 1981 to January 1989.

      The problem with history is that it´s continuous, making it hard to isolate periods according to presidents.
      For example, the second half of the 1960´s laid the groundwork for the inflationary 1970s which gave way to the high unemployment of the early Reagan years during which inflation was being drastically reduced, providing the “raw material” for the “Great Moderation”.
      Reagan wanted to reduce government. For that you have to reduce spending (under the authority of Congress). In 1986 Congress got its act together and G/Y fell significantly. The end of the Cold War, (defeat of the Soviet Union) was a Reagan achievement, giving rise to the “peace dividend”, reducing G and deficits. There were also technological externalities for the civilian economy (internet and all that).
      Clinton´s “glorious years” were in many ways a direct consequence of what came before…and so it goes.

    • Yes, you remember well. I was just pointing to the irony that Reagan’s tax hikes – in the middle of a recession – have been largely purged from the memory of his supporters. They would roast Obama on a spit for suggesting that we need more revenue (but only from the rich who can afford it) and in the same breath bask in nostalgia over Reaganomics, completely oblivious to the fact that Reagan not only raised taxes in the middle of a recession but actually raised them on the middle class.

      “The problem with history is that it´s continuous, making it hard to isolate periods according to presidents.” I don’t disagree with that but I ask you for consistency. You can’t set the goalposts the way you want.

      “Reagan wanted to reduce government.” There is not a shred of evidence for that. He reduced some parts of government but expanded others (you guessed it, the military) far more. In the aggregate, he massively expanded government spending, financed by deficit spending. That is a fact. Whatever your opinion of Reagan, you gotta own up to the facts.

      • Yes, the military. But that was to “anihilate” the Soviet Union. The “peace dividend” was a fall of 4 percentage points in G/Y during the 1990s and the deficit turned into surplus in 1998!
        “Facts”, particularly in economics, given it is a dynamic process, is always subject to interpretation.
        Reagan reduced taxes in 1981 and over the next years increased them. But the net reduction was still very significant (about 50% of the initial decrease.

  4. “Yes, the military.”

    Sounds like I wasn’t supposed to mention that delicate M-word? Look, Reagan either reduced spending or he didn’t reduce spending. As a matter of fact, the second statement is true and the first is false. Therefore, whoever affirms the first statement is either misinformed or lying.

    ““Facts”, particularly in economics, given it is a dynamic process, is always subject to interpretation.”

    Hear hear, postmodern relativism anyone? You were accusing Krugman of getting *facts* wrong, not interpretations.

    “Reagan reduced taxes in 1981 and over the next years increased them.”

    True. Also true: Obama reduced taxes and then proposed some increases. Yet Reagan is a tax-cutting hero in the fantasy of his admirers while Obama is a big government villain in the fantasy of those very same people. Plus, those are the people who affirm that any kind of tax increase for any purpose under any kind of circumstances is against the Bible. What is happening here is not a matter of interpreting facts differently, but a big fat memory hole in combination with ordinary dishonesty.

  5. “What is happening here is not a matter of interpreting facts differently, but a big fat memory hole in combination with ordinary dishonesty”.
    In that you are exactly right. And that sort of thing is what Krugman frequently engages in. And will lead nowhere, no matter who you “sanctify” or “demonize”.

  6. “And that sort of thing is what Krugman frequently engages in.”

    You have been challenged to provide facts contradicting Krugman and all you have come up with is to show Krugman’s own chart with a vertical line through the year 1983, which you have defended as “The Reagan years are clearly indicated” when in fact they are clearly not indicated. Repeated calls to provide facts contradicting Krugman, for example to tabulate economic indicators for the Reagan years, have not been answered (unless you count “The problem with history is that it´s continuous, making it hard to isolate periods according to presidents” as an answer).

    Despite all that, you claim that Krugman “frequently engages” in dishonesty, not having provided a single verifiable example. On the other hand, you, João Marcus Marinho Nunes, have claimed that “Reagan wanted to reduce government” when the verifiable fact is that Reagan expanded government in the aggregate. G/Y averaged 22.3% during the Reagan years, compared to 21.1% Carter, 21.9% Bush I, 19.4% Clinton, and 20.4% Bush II. Reagan spent a record 23.5% in 1983 that was only broken in 2009 (GWB’s last budget). “Ho to distort history” is an apt headline for this post, to say the least.

    I rest my case. You have done a great job making my point. Thanks.

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