strikes again, courtesy of National Review Online. In this installment, Donald Luskin points out that “there’s no shortage of good economic news nowadays — except in the mind of Pual Krugman, where hopelessness springs eternal.” Krugman claims that “there is very little evidence in the data for a strong recovery ready to break out.” But what about the fact that durable goods orders have just registered the biggest increase since the beginning of year, or that new home sales have climbed to the highest level on record; or that new jobless claims fell below the key 400,000 mark last week for the first time since early February?
Luskin shows that Krugman’s economic pronouncements never have anything to do with real economic forecasting. Rather, according to Luskin, they are about tax cuts, to which Krugman is always opposed. In 2001 Krugman was bullish on America as we were slipping into a recession because tax cuts were being advocated as a recession-fighter. Now he’s bearish, as the recovery is blossoming, because he wants to portray the tax cuts as having failed to promote that recovery.
One also imagines that Krugman was bullish in 2001 because the economy was still viewed as Bill Clinton’s. In this regard, Luskin predicts that “Bush is likely to get a double-win going into the 2004 election: the return of good times and lower-than-forecasted deficits. It won’t be an ‘it’s the economy, stupid’ election as Krugman wants. It’ll be an ‘it’s the economy
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