Krugman's 1992 Prediction

There's been a lot of talk about the Newsweek article on economist Paul Krugman. But this part seems particularly relevant:

With dry humor, he once told a friend the story of attending an economic summit in Little Rock after Bill Clinton was elected president in 1992. As the friend recounted the story to NEWSWEEK, "Clinton asked Paul, 'Can we have a balanced budget and health-care reform?'--essentially, can we have it all? And Paul said, 'No, you have to be disciplined. You have to make choices.' Then Paul says to me (deadpan), 'That was the wrong answer.' Then Clinton turns to Laura Tyson and asks the same questions, and she says, 'Yes, it's all possible, you have your cake and eat it too.' And then [Paul] says, 'That was the right answer'." (Tyson became chairman of Clinton's Council of Economic Advisers; she did not respond to requests to comment.) Krugman confirmed the story to NEWSWEEK WITH a smile.

Krugman, of course, was right: Clinton balanced the budget but never did anything about healthcare. Tyson was wrong.

I'm sure glad Obama has decided to seek Tyson's advice, and not Krugman's.

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doesn't help that he did a one time consulting job for enron either :)

but i like reading his writings, there's a couple of excellent archives online.

By working class (not verified) on 31 Mar 2009 #permalink

Well, I think it really just goes to show that failures in achieving political ends often have nothing to do with economic realities and everything to do with confrontational psychology. Democrats in Congress wouldn't give Clinton his health care plan out of their own local bickering, then Republicans wouldnt' give Clinton his health care plan first out of being a general bunch of stonewalling blockheads and later out of being an adversarial bunch of behavioral hypocrites bent on taking him off his throne.

Now, did Krugman predict that the health care plan wouldn't go through because of the money or because he knew more about politics than Tyson? I'm guessing the latter.

In which case, Tyson is still wrong, but it has nothing to do with how much Krugman knows about economics and everything to do with how much he's reported on politics in his columns over the last 20 years.

By Joe Shelby (not verified) on 31 Mar 2009 #permalink