Never Having To Say You're Sorry

Following up on the previous post about the change of heart among Republicans and right-wing pundits about the immediate crisis of debts and deficits, I would just once like to hear one of them say "I was wrong."

From a National Review Online interview in February 2009 with Brian Riedl, who is described as "the Heritage Foundation's leading budget analyst."

The government is going to have to raise interest rates in order to convince people to lend them the full amount they need. We’re already facing a deficit of $1.2 trillion this year, and 700 billion next year. We borrowed $700 billion for TARP, and now we’re going to borrow $800 billion for this stimulus package. Compare those numbers to the entire public debt, which was 5.8 trillion up until a few months ago. It’s going to be very difficult for a global economy, which is already in a recession, to supply the U.S. government with [$3 trillion] in new borrowing. Right now, a lot of banks are happy to buy Treasury bonds because they are safe investments . . . but overall, that may not be enough. The government may have to raise interest rates higher and higher and higher in order to persuade people to lend their diminishing savings to the government. And that’s going to hurt the economy for a long time.

Here's a Wall Street Journal story from March 6, 2009: Obama's Radicalism Killing the Dow.  Obama hadn't even been inaugurated yet, and he was the worst thing to happen since...I don't know...unsliced bread? Oh yeah, Obama's "radicalism" was just oh so extreme.

Simpson and Bowles predicted two years ago that, if we didn't adopt their proposals, in two years interest rates would be through the roof. Actually, they predicted it a little more than two years ago; we've passed their deadline for the apocalypse.

Of course these are just three isolated predictions, but everyone reading this knows that these opinions became the official Republican, conservative talking points that they stuck to for four years and are now apparently sort of half-assed abandoning. Being a politician may mean never having to say you were wrong. I guess being a pundit means the same thing.

For those inclined to automatically claim nobody ever admits their mistakes, I offer a Paul Krugman post from September 2012:

So, what big mistakes have I made over the years? Two, I think.

The first was in the mid-1990s, when I pooh-poohed claims about a surge in US productivity growth. I saw some bad logic in the arguments the productivity enthusiasts were making, and — being the professor I am — I extrapolated that into being dismissive of everything they were saying. In fact, the productivity surge was real.

The second was circa 2003, over the Bush administration’s use of the illusion of victory in Iraq to push through more tax cuts, even though the optimistic budget projections used to justify the first round had proved completely wrong. It’s worth pointing out that the situation was not at all like the present, where I support temporary deficit spending to deal with a depressed economy; the Bushies were pushing permanent tax cuts that had nothing to do with economic stimulus, and did so at a time of war with no offsetting spending cuts (and then pushed through an unfunded expansion of Medicare too). This struck me at the time as banana-republic behavior, and still does. 

However, I wrongly believed that markets would look at it the same way, and that they would lose faith in American governance, driving up interest rates on our debt. Instead, bond investors discounted the politics, and acted as if they believed that America would eventually pull itself together and start behaving responsibly. The jury’s still out on that, but clearly my short-run prediction proved wrong.

I learned from both these mistakes. In the 90s, I learned to take very seriously what people on the ground are saying about the economy, even if it isn’t well-argued. After 2003, I learned that there is a great deal of ruin in a nation — that markets give advanced countries a lot of benefit of the doubt.

Now, for those of you who think Paul Krugman is too partisan, too anti-Republican, your assignment is to find other examples of where his economic predictions were wrong. I'm sure it must gall you to think that, in 2012, he had had to go back to the mid-1990s to find one of his two mistakes. I'll give you a tip: go back before 2008, because otherwise you're just wasting your time...and time is money I'm told.