Krugman At His Worst

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Krugman at His Worst

March 24, 2015

by Robert Huebscher

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As an economist, Paul Krugman has much to offer. Sometimes I agree with him, but more often he challenges me to defend my opposing position. When he uses his privileged perch at the New York Times to advance his political agenda, however, he is nothing more than another second-rate “talking head” littering the media. Such was the case with his column on March 16, Israel’s Gilded Age.

Krugman’s goal was to demonize Israeli Prime Minister Benjamin Netanyahu on the eve of the Israeli elections. That intent was obvious in the first paragraph; Krugman claimed that Netanyahu insulted President Obama by delivering his speech before Congress on Iran’s nuclear ambitions in an attempt to divert attention from supposed problems in the Israeli economy.

Those problems, Krugman claimed, include increasing income inequality and poverty in Israel. He blamed these on Netanyahu’s failed policies.

You know you are listening to Krugman the talking head – and not Krugman the economist – when he uses a favorite tactic to scorn his target: a comparison to George W. Bush. In this case, Krugman says that Netanyahu attempted to divert the world’s attention from its domestic problems to the foreign issue of Iran, just like Bush had done with Iraq.

Krugman the economist has made valuable points about income inequality and the corrosive effect it can have on a society. But Krugman the talking head takes selective economic data and twists and distorts it to skewer his political foil.

In this column, Krugman cited a study that purported to show that the share of Israeli citizens living in poverty has roughly doubled over the last two decades. That metric is based on the share of the population living on less than the country’s median income.

But here’s what Krugman didn’t tell his readers. That metric is an incomplete measure of poverty. If a country’s overall income and its standard of living increase (as it has in Israel), then everyone benefits. A larger share may be earning less than the median income, but the median income has increased, as has the income of those supposedly in “poverty.”

Furthermore, in the case of Israel, much of the poverty can be attributed to its ultra-religious (haredi) citizens. That segment of the population has a very high rate of unemployment because they choose to devote themselves to religious studies instead of working. Indeed, studies have shown that, while the haredi are “poor” by economic metrics, they don’t feel poor, and acknowledge that their poverty is a matter of choice – not due to forced hardship or failed economic policies, as Krugman alleges.

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