Paul "Veg-O-Matic" Krugman

by Charles

Daniel Okrent started this tempest in his fare thee well column in the New York Times, with this sentence:

Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults.

Okrent must have known the response he would get from this sentence, and he was brave for doing so.  Not surprisingly, Dr. Krugman responded forcefully in the Times' public editor web journal:

Mr. Okrent has so far offered only one example that, if true, would have justified his all-out attack on my ethics.

Krugman initially responded to the only example he thought was "significant", then later responded to Okrent's specific example [sentence updated].  Leaving aside the notion that one sentence in a column with thirteen separate numbered topics constitutes an "all-out attack", Krugman does have a history of fitting his data to his politics.  The liberal economics professor may consider the other criticisms a picking of the nits, but when you're a columnist in the most prominent newspaper in the country, those nits aren't so small. The fellas at QandO have been on a roll lately, and Jon Henke demonstrates how Krugman has sliced and diced in the "significant" example.  Dale Franks hit Krugman on stagflation, and Henke provides a coup de grace in this detailed follow-up.  Tom Maguire writes about his walk down memory lane with Krugman.  Andrew Samwick adds a few observations, concluding with this:

Any time spent reading Krugman in search of an informed, liberal economist's point of view is time that could be better spent reading Brad DeLong's blog.

Samwick has a follow-up here.  Jim Glass adds more to the mix, as does Tim Worstall.  Part of the reason I don't read Krugman that much anymore is that I know who he's going to attack, that he's going to pick and choose the data that supports his attack, and it's much more entertaining to read the blogs that show which bits of countervailing data that Krugman failed to bring up.  There are few "on the other hands" in his columns.  The other reason I've cut way back on Krugman is the unceasing, unrelenting one-sidedness.  Lying in Ponds:

I doubted that it was possible, but Paul Krugman, with yesterday’s well-timed perfectly partisan effort, has now written 500 New York Times columns, and not a single one of them qualifies as a "crossover column" — one which consists mostly of criticism of one’s own party, or praise of the other. Remember that his column began in January 2000, so the unwillingness to cross party lines extends back to the entire final year of the Clinton administration.

Must be some kind of record. In any case, you don't have to read that many columns to know the agenda of this bitter and vengeful man.

(also seen at Redstate.org)

Comments

[Slartibartfast]

Dude -- did you read Dantheman's post?

Which one? I'm aware he's attempting to effect change, but he hasn't given any detail at all about that, so I'm not sure what that means.

There was an alternative ready to go, so I guess you're sympathetic.

Was there? What's the bill number?

But to say that his facts are in error, either sloppily or dishonestly, you have to quote him making a statement of fact and show that it's wrong.

Sure, happy to oblige:

Right now, if you buy a book at your local bookstore, you probably pay sales tax. If you order it from Amazon.com, you don't. This unequal treatment is largely due to administrative issues: state and local governments haven't yet figured out how to collect taxes on catalog shopping, let alone e-commerce. But there is also a legal impediment: the Internet Tax Freedom Act of 1998, of which John McCain was a chief sponsor, imposed a three-year moratorium on Internet taxes.

IFTA is not a legal impediment to collection of any taxes on online purchases. Sorry, it just isn't. It may have a future opportunity to be a legal impediment, but as of February 2000, when he wrote that, it wasn't. And it still isn't, five years later. For how many years does he have to be wrong before we can acknowledge him being wrong?

[LizardBreath]

Which one?

Oh, possibly the post of his that I quoted immediately below?

IFTA is not a legal impediment to collection of any taxes on online purchases.

It legally impedes states from changing the law to tax those transactions. That's the legal impediment -- while ITFA remains in force, the states are precluded from changing the law to close the loophole. You would have an argument if Krugman said that IFTA prevented the states from enforcing their current laws, or from collecting taxes under their current laws. He doesn't say that, as much as you might like him to have. He is clearly discussing the true facts: that IFTA prevents changes in state law to collect taxes on Internet transactions, and that there is no sound economic reason to grant such transactions a tax advantage over in-state retail transactions.

[Slartibartfast]

Oh, possibly the post of his that I quoted immediately below?

I saw that, but it didn't seem relevant. DTM's organization could be comprised of hundreds of thousands of competent, committed lawyers and have been within a millisecond of passage when IFTA passed, or it could be backed by a dozen college students that just started working on it last week. More likely somewhere in between, but it's impossible to tell where the needle points. Hence: a useless bit of information. This is what I attempted (and failed spectacularly) to say a couple of posts ago. Mea culpa.

It legally impedes states from changing the law to tax those transactions.

Well, yes, that's the purpose of it. Why should internet transactions be taxed, when telephone transactions aren't? Look, the problem with collection of state sales tax, as I understand it, isn't that there isn't law in place establishing said taxes, but that there isn't a decent methodology in place to facilitate collection of said taxes. IFTA didn't do a thing to change that situation; repeal IFTA and there's still the issue of how to collect sales tax. Figure out how to collect existing state sales tax and IFTA would allow that collection, as I read it. Do you disagree?

[Dantheman]

slarti,

"DTM's organization could be comprised of hundreds of thousands of competent, committed lawyers and have been within a millisecond of passage when IFTA passed, or it could be backed by a dozen college students that just started working on it last week. More likely somewhere in between, but it's impossible to tell where the needle points."

Technically it's neither, as lawyers like me are associate members of the organization. It's far closer to the first than the second, as the regular members' convention is big even by Las Vegas standards (this year's had over 35,000 attendees), and the lawyer's convention (which I will attend later this year) has typically over 1,200 attendees.

"Look, the problem with collection of state sales tax, as I understand it, isn't that there isn't law in place establishing said taxes, but that there isn't a decent methodology in place to facilitate collection of said taxes. IFTA didn't do a thing to change that situation; repeal IFTA and there's still the issue of how to collect sales tax. Figure out how to collect existing state sales tax and IFTA would allow that collection, as I read it."

Phooey. I could write a computer program to do it, tying it to the recipient's zip codes to deal with local sales taxes, although since I haven't programmed in two decades, it would be in a dead language like Pascal. The problem is that the internet was considered to be an infant industry which needed protection, which seemed to be an out-of-date argument even in 1998, and absolutely silly when this was permanently extended in 2001.

[Slartibartfast]

Phooey. I could write a computer program to do it, tying it to the recipient's zip codes to deal with local sales taxes, although since I haven't programmed in two decades, it would be in a dead language like Pascal.

So what's the problem? I think I've asked this question multiple times, now. Oh, I think I see the problem:

but that there isn't a decent methodology in place to facilitate collection of said taxes.

Replace "facilitate", above, with "enforce".

The problem is that the internet was considered to be an infant industry which needed protection

Which protection is that, exactly? Other than barring things like taxing email traffic?

[Slartibartfast]

BTW, Dan, what is the name of this organization?

[Dantheman]

slarti,

"So what's the problem? I think I've asked this question multiple times, now. Oh, I think I see the problem:

but that there isn't a decent methodology in place to facilitate collection of said taxes.
Replace "facilitate", above, with "enforce"."

No, the problem is that since the sales taxes are collectible due to this law, no one is going to spend time writing the program. The enforcement methods are not too difficult, either (e.g., extending the requirement that physical stores need to submit monthly sales tax reports to include on-line sellers).

"The problem is that the internet was considered to be an infant industry which needed protection
Which protection is that, exactly? Other than barring things like taxing email traffic?"

Protection like having on-line purchases being free from sales tax (the topic of this whole discussion).

I'd prefer not to say what the organization is, as someone intrepid may be able to figure out my identity.

[Dantheman]

Errata -- sales taxes are _not_ collectible.

[LizardBreath]

If in sales tax, you include use taxes, I disagree.

If states were allowed to define Internet presence within a state as a sufficient nexus to require internet vendors to collect the use taxes the states now impose on but cannot collect from consumers, they could collect those taxes -- IFTA blocks that.

If vendor states were allowed to impose a special Internet tax equal to the amount of the sales tax (placing such taxes on a level with in-state transactions) on out-of-state retail transactions not otherwise subject to sales taxes, they could collect such taxes -- IFTA blocks that.

If states figured out some other solution to collecting their current sales and use taxes that placed the onus of who is required to collect the taxes in question on a different party -- IFTA blocks that.

IFTA places a legal impediment on the states' abilities to tax Internet retail in a manner commensurate with in-state retail. That's all Krugman said, and it is clearly true. I'm not sure if you're taking the position that it places no such legal impediment, in which case you're simply wrong as a matter of fact, and I'll stop arguing and leave you to do your own research or to remain confused, or if you are quibbling about the distinction between collecting sales and use taxes under 1998 law, which did not address untaxed Internet retail transactions, and collecting sales/use taxes under new law which would address such transactions, in which case you are quibbling about a distinction not raised in, addressed, or relevant to the Krugman's column.

At this point (actually, many comments ago) we're simply wasting each other's time. Do enjoy the rest of your day.

[Slartibartfast]

Oddly, this guy seemed to think that ITFA guarantees that existing tax collection methodologies would be followed. These people seem to agree with me, too.

If your position is that ITFA legally constrains state sales tax on goods that currently cannot be taxed anyway, I think we've reached a point where we part ways, because this is the same sort of dispute where one party says reduction in the planned tax increase where the other insists that it was a tax cut. If Krugman's the latter kind of guy, he's always going to be wrong in my book.