Yesterday Paul Krugman took a break from fantasizing about President Bush and turned his venom toward Arnold Schwarzenegger. His column is titled “Conan the Deceiver”, consistent with Krugman’s current tactic of calling everyone he doesn’t like a liar.
Krugman’s column makes a single point, that Schwarzenegger has not been very specific about how he proposes to deal with California’s budget problems. True enough, but not exactly original. Moreover, Arnold’s theory that a more favorable business climate will keep jobs in California and improve the local economy, thereby eventually balancing the budget, is at best a long-term solution but not, certainly, an explanation of what to do about next year’s $8 billion shortfall.
But Krugman doesn’t get twice-a-week real estate in the Times’ op-ed section to deliver the platitude that Arnold isn’t being very specific. Krugman is billed as a famous economist, and the Times presumably pays him to give readers the details. Unlike, say, Arnold. As usual, however, Krugman is content to substitute malice for information. Here are the key paragraphs of Krugman’s attack on Schwarzenegger:
“Mr. Schwarzenegger’s description of the state economy is pure fantasy. He claims that the state is bleeding jobs because of its ‘hostile environment’ toward business, and that California residents groan under an oppressive tax burden: ‘From the time they get up in the morning and flush the toilet, they’re taxed.’
“One look at the numbers tells you that his story is fiction….California isn’t a high-tax state: through the 1990’s, state and local taxes as a share of personal income more or less matched the national average, and with the recent plunge in revenue they’re now probably below average.
“What is true is that California’s taxes are highly inequitable: thanks to Proposition 13, some people pay ridiculously low property taxes.”
Now, one basic fact jumps out at the reader: while Krugman refers to a “look at the numbers,” he never actually mentions any numbers. Odd. (Especially since Krugman ridicules Arnold for saying that “The public doesn’t care about figures.”)
This bit of coyness is particularly striking: “with the recent plunge in revenue they’re [California taxes] now probably below average.” Consider that modest turn of phrase: “they’re now probably below average.” What, exactly, is Krugman suggesting? That data on state and local tax burdens hasn’t become available since the mid-1990’s? Or is he telling us that even though he is a highly paid, full-time columnist for the New York Times, it’s just too much trouble for him to look up the current data, and he prefers to speculate that California taxes are “probably below average”?
Krugman is revealing something, I guess, about his own indolence, since it takes less than one minute to locate 2003 data on tax burden by state. And it turns out–surprise, surprise–that California, far from being “probably below average,” actually has the 8th highest tax burden of the 50 states, at 10.6%.
Hmmm. Maybe Krugman should stop calling other people liars until he gives up his nasty habit of tossing out factual assertions that are the exact opposite of the easily-verified truth.
One more thing: Krugman’s claim that California’s tax system is “highly inequitable” because property taxes are low is a classic example of any-port-in-a-storm partisan punditry. It is a basic tenet of “progressive” politics that property taxes are regressive and therefore should be supplemented, if not replaced, by income taxes and other more progressive levies. That is what California has done, for better or worse: property taxes are low, but income taxes are high. Where property taxes take the place of income taxes, as in New Hampshire for example, liberal politicians foam apoplectically about the injustice of raising money through the regressive property tax.
Krugman has become an embarrassment to the Times. The question now is what to do about him. When a newspaper gives a columnist twice-weekly space, is the grant considered to be in perpetuity? How does the newspaper gracefully get out of the deal if the columnist runs out of things to say, and is left hopelessly behind the times (Maureen Dowd) or more or less loses his mind (Krugman)? It will be interesting to see how the Times approaches this problem.
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