Paul Krugman asks why he is a Keynesian:
sort-of approvingly quotes Russ Roberts, who views all macroeconomic
positions as stalking horses for political goals, and declares in
Krugman is a Keynesian because he wants bigger government. I’m an anti-Keynesian because I want smaller government.
OK, I’m not going to
clutch my pearls and ask for the smelling salts. Politics can shape our
views, in ways we may not recognize. But I’m aware of that risk, and
make a regular practice of asking myself whether I’m letting that kind
of bias slip in. In fact, I lean against studies that seem too much in
tune with my political preferences. For example, I’ve been aggressively
skeptical of studies that seem to show a negative relationship between
inequality and growth, precisely because that result is so convenient
for my political tribe (which doesn’t mean that it’s wrong.)
So, am I a Keynesian
because I want bigger government? If I were, shouldn’t I be advocating
permanent expansion rather than temporary measures? Shouldn’t I be for
stimulus all the time, not only when we’re at the zero lower bound? When
I do call for bigger government — universal health care, higher Social
Security benefits — shouldn’t I be pushing these things as job-creation
measures? (I don’t think I ever have). I think if you look at the
record, I’ve always argued for temporary fiscal expansion, and only when
monetary policy is constrained. Meanwhile, my advocacy of an expanded
welfare state has always been made on its own grounds, not in terms of
alleged business cycle benefits.
In other words, I’ve
been making policy arguments the way one would if one sincerely believed
that fiscal policy helps fight unemployment under certain conditions,
and not at all in the way one would if trying to use the slump as an
excuse for permanently bigger government.
This all sounds very well and good, except for one thing. Do you EVER recall Paul Krugman once calling for a REDUCTION in government spending at any point of the business cycle? Do you ever remember him recommending spending cuts or tighter monetary policy at all?
In 2013, Krugman wrote: “I’ve often argued on this blog and in the column that now is a particularly bad time to cut spending.” And this was four years into the Fed-reported economic recovery. Last year, he pointed out that “Prima facie, cutting spending depresses economies.” Even looking back to the heights of the 2007 and 1999 booms, I can’t find any evidence that Krugman called for fiscal contraction or anything but more spending and more taxes.
In any event, we already know why Krugman is a Keynesian. He read Foundation, he wants to be Hari Seldon, and Keynesianism permits him to wallow in the delusion of controlling future events.