Chapter 2

The Mad Collectivist

Paul Krugman as Ellsworth Toohey, the man who preaches socialism from the pages of America’s newspaper of record

“We’ve fixed the coin. Heads—collectivism, and tails—collectivism. . . . Give up your soul to a council—or give it up to a leader. But give it up, give it up, give it up. My technique . . . don’t forget the only purpose you have to accomplish. Kill the individual. Kill man’s soul. The rest will happen automatically. Observe the state of the world at the present moment. Do you still think I’m crazy . . . ?”

—The Fountainhead

Who is Ellsworth Toohey?

In The Fountainhead, villain Ellsworth Toohey symbolizes the collectivist, in contrast to the hero, Howard Roark, who symbolizes the individualist.

Toohey was a brilliant and articulate—but sickly and puny—child, raised in an impoverished household by a weak father and an overprotective mother. He was envious of his wealthier and stronger classmates, and he used his sharp mind and even sharper tongue to undermine them.

After going through a brief religious phase as a teenager, Toohey becomes an avowed socialist. In adulthood, he drops any overt association with socialist politics, but dedicates his life to promoting collectivism gradually, through his growing influence as a public intellectual.

He writes a book on architecture throughout history, and improbably it becomes a best seller. Toohey parlays that into a regular column in New York’s leading newspaper, the New York Banner—ostensibly for architectural criticism, but quickly evolving into a personal soapbox from which he promotes all manner of collectivist causes.

Beyond obvious advocacy, Toohey’s strategy with the column is to promote architects and other artists—authors, composers, playwrights—of no ability, to enshrine mediocrities as superstars. His goal is to corrupt the culture—to advance collectivism by default, by eliminating from the culture any great individuals who could have offered an alternative.

Toohey singles out the brilliant architect Howard Roark as his most dangerous opponent—an exemplar of the greatness of the individual, not the collective. To defeat Roark, he masterminds a series of complicated plots aimed at discrediting Roark and economically ruining him, at one point causing him to abandon architecture and work as a laborer in a quarry to survive.

Throughout, Roark never lifts a finger to either fight Toohey or defend himself against him. Toohey is simply beneath Roark’s notice, demonstrating Rand’s belief that evil is small and impotent, and best simply ignored.

Christiane Amanpour’s eyes darted back and forth in fear and her mouth twisted in disgust, because she could see where this was going. A guest on her Sunday morning political talk show, ABC’s This Week, was getting dangerously overexcited, and something very regrettable was about to happen.

She could see that he was winding himself up as he talked about how a recent deficit-reduction panel hadn’t been “brave enough”—because it failed to endorse the idea of expert panels who would determine what medical services government-funded care wouldn’t pay for.1 When ObamaCare was still being debated in Congress, conservative spokeswoman Sarah Palin had created a media sensation by calling them “death panels,” causing most liberals who supported ObamaCare to quickly distance themselves from any idea of rationing care as being tantamount to murder.

Cut to Amanpour’s horrified face. Cut back to the guest. Then it happened.

The guest said, “Some years down the pike, we’re going to get the real solution, which is going to be a combination of death panels and sales taxes.”

It was all the more horrifying because the guest was not a conservative, not an opponent of ObamaCare. This guest was an avid liberal, a partisan Democrat, and an enthusiastic supporter of government-run health care. He was endorsing death panels, not warning about them. He was saying death panels are a good thing.

Apparently it didn’t bother him that his choice of words, “real solution,” had historical parallels that are very disturbing in any conversation about government control over who will live and who will die.

And it was even more horrifying because of who this guest was. This was no fringe lefty wearing a tinfoil hat churning out underground newspapers in his parents’ basement. This was an economics professor at Princeton, one of the country’s most prestigious universities. This was the winner of the Nobel Prize in economics, the highest honor the profession can bestow. This was a columnist for the New York Times, the most influential newspaper in the world.

This was Paul Krugman, live, on national television, endorsing government control over life and death. And while we’re at it, let’s raise taxes on those who are permitted to live.

The Abysmal Pseudo-Scientist

Who does Paul Krugman think he is to think such things, never mind say them on television?

He’d like to think he’s John Maynard Keynes, the venerated British economist who created the intellectual framework for modern government intervention in the economy. Keynes is something of a cult figure for modern liberal economists like Krugman, who read his texts with all the exegetical fervor with which Scientologists read the pulp fiction of L. Ron Hubbard. But Krugman will never live up to Keynes. However politicized his economic theories, Keynes’s predictions were so astute that he made himself wealthy as a speculator. Economics is called “the dismal science,” but as we’ll see, Krugman’s predictions are so laughably bad his economics should be called the abysmal pseudo-science.

If Krugman is not Keynes, maybe he’s John Nash, the mathematician portrayed in the film A Beautiful Mind. They’re both Princeton economists. They’ve both won the Nobel Prize in economics. And they’re both bonkers. In Krugman’s own words, “My economic theories have no doubt been influenced by my relationship with my cats.”2 But so far there’s been no movie about Krugman, just a cameo appearance as himself in the lowbrow comedy Get Him to the Greek in which his lines consist of “Yeah,” “Thank you,” and “Oh boy.”

As a boy, Krugman says his “secret fantasy” was to be Hari Seldon, the “psychohistorian” from science fiction author Isaac Asimov’s Foundation trilogy, who used what we would now call econometrics to secretly control the progress of human civilization.3 This inspiration is what drew Krugman to study economics, as he has revealed more than once, as though he were proud of it.4

Maybe in practice he’s more like Dr. Strangelove, the dark Hari Seldon, the cold war madman of Stanley Kubrick’s film masterpiece. They both have near-genocidal notions of how government should determine who lives and who dies—especially what kind of experts they should consult in the decision. Krugman is nostalgic for the cold war era when “the U.S. government employed experts in game theory to analyze strategies of nuclear deterrence. Men with Ph.D.s in economics, like Daniel Ellsberg.”5 Maybe you thought real men don’t have PhDs in economics. But Krugman does.

But Paul Krugman isn’t Keynes, Nash, Seldon, or Strangelove—as much as he’d like to be. The indisputable truth is he is the living embodiment of Ellsworth Toohey, the villain from Ayn Rand’s first great novel, The Fountainhead.

Krugman mocks people who have been inspired by Rand,6 but he himself is living Rand with every breath he takes. Truly, the parallels between Krugman and Toohey are downright eerie.

The Economist Who Couldn’t Shoot Straight

Before we proceed, let’s get something important out on the table. Most critiques of Krugman as a public intellectual begin with what is apparently an obligatory disclaimer, usually in the very first sentence—something to the effect that Krugman is a very accomplished and well-respected economist. After all, he won the Nobel Prize. Then comes the “But . . .” and the critique proceeds in earnest, often scathingly.

Why concede any honor at all to Krugman?

So what if he won the Nobel Prize? There are plenty of left-leaning political icons (Jimmy Carter, Al Gore, Barack Obama); witch doctors (Egas Moniz, the doctor who pioneered the frontal lobotomy); and even the odd terrorist (Yasser Arafat) who’ve been kissed on the forehead by the king of Sweden.

Of what real value or distinction is Krugman’s work as an academic economist? There was a time a decade or more ago when his work on international trade and currencies was frequently cited in the economics literature, but far less so now, and some in the profession have come to regard it as rather trivial. Nowadays Krugman’s work on trade and currencies is limited to rants in his Times column directed at China, advocating protectionism that most serious economists regard as retrograde and naive if not downright dangerous.17

The real test of Krugman’s mettle as an economist is the accuracy of his economic forecasting. The fact is that, with about two decades of evidence now in, Krugman’s track record, to use a technical term favored by economists, sucks.

As we’ll see, he’s not always candid about this. But once, under the pressure of a televised debate with conservative talk-show host Bill O’Reilly, Krugman blurted out an understated if truthful self-evaluation: “Compare me . . . compare me, uh, with anyone else, and I think you’ll see that my forecasting record is not great.”18

The most egregious example of “not great” is Krugman’s 1982 utterly incorrect prediction that inflation would soar. He made this prediction from no less lofty a perch than the White House, as staff member of the Council of Economic Advisers (CEA) in the first Reagan administration. Here’s how Krugman remembers that time:

[T]he summer of 1982 was a moment of near-panic among the Reaganauts, as the recession and the debt crisis seemed to threaten catastrophe. They not only hired [Martin] Feldstein, they gave him the freedom to bring in a politically incorrect team of whiz-kids (which included Larry Summers . . .) in the hope that he could turn things around. By 1983, with a recovery well under way, the political types were back in charge.19

In other words, according to him, the world was in crisis—but Krugman parachuted in and cleaned everything up. But according to the archives of the Reagan Presidential Library, the truth is that Krugman’s only substantive contribution at CEA was a September 9, 1982, memo co-authored with Lawrence Summers called “Inflation During the 1983 Recovery.” Krugman and Summers wrote,

The Inflation Time Bomb?

We believe that it is reasonable to expect a significant reacceleration of inflation in the near future. Much of the apparent progress against inflation has resulted from the temporary side effects of tight money and high real interest rates. These side effects must be expected to reverse themselves as real interest rates decline and the economy expands. . . . Our very rough guess is that correction of . . . distorted relative prices will add at least 5 percentage points to future increases in consumer prices. . . . This estimate is conservative.20

When Krugman wrote this, the U.S. consumer price index inflation rate was 4.9 percent—high by recent standards, but down significantly from its catastrophic peak at 14.59 percent 18 months before. In that environment, for the self-described “whiz-kid” who found himself in the White House, this was a very bold prediction.

It also turned out to be hilariously, side-splittingly, knee-slappingly, rolling-on-the-floor wrong. Except for a tiny uptick the very next month, inflation didn’t rise; it fell. Four years later, it had fallen to 1.18 percent, a rate so low as to border on deflation. It didn’t even get back up to the same level at which Krugman had originally warned of a “time bomb” for about seven years. The highest inflation ever got from then through this writing was 6.37 percent, less than a percentage point and a half higher than when Krugman wrote his memo.

In other words, the entire inflation rate wasn’t much more than Krugman predicted the increase in the inflation rate would be.

What does Krugman himself say of this prediction? He simply lies about it. In a June 2004 Times column revealingly titled “An Economic Legend,” he had the temerity to write, “Inflation did come down sharply on Mr. Reagan’s watch . . . it all played out just as ‘left-wing Keynesian economics’ predicted.”21 Considering that Krugman is a left-wing Keynesian economist, and considering that it all played out exactly the opposite of what he had predicted, this claim would appear to be a lie—unless he’s talking about all the other left-wing Keynesian economists (admittedly, there are lots of them).

And then there was the time in late February 2000, two weeks before the peak of the dot-com stock bubble at Nasdaq 5,000. Krugman wrote in his Times column that the Dow Jones Industrial Average was overvalued, saying, “let the blue chips fall where they may.”22 As for the Nasdaq—which at that point had almost doubled over the prior year, and more than tripled over the prior three years—Krugman said soothingly, “I’m not sure that the current value of the Nasdaq is justified, but I’m not sure that it isn’t.”

We all know what happened. As of this writing, the Dow is about 20 percent higher than when Krugman wrote those words—and that’s not including a decade of dividends. The Nasdaq is about 42 percent lower. It hit bottom in October 2002 a 75.7 percent loss from where Krugman said not to worry about it. After something of a recovery, stocks fell again. They put in a real bottom—from which the Nasdaq would ultimately more than double—in March 2003. That is, about a week after Krugman wrote a Times column asking the rhetorical question, “Is there any relief in sight?” His tragically wrong answer: “No.”23

Perfect bookends—he missed the top, and then exactly three years later, he missed the bottom. But then he outdid himself. In June 2003, with the Nasdaq up 20 percent since Krugman’s “No,” did he recognize his error and reverse course? Again: “No.” Krugman wrote that “the current surge in stocks looks like another bubble.”24 From there the Nasdaq was to rally another 75 percent.

At around the same time, afraid of what he called a “fiscal train wreck” that would lead to disastrously high interest rates, he announced in the lead paragraph of a March 2003 Times column: “So last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I’m terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits.”25

Rates didn’t rise, even when budget deficits skyrocketed beyond anything he could have imagined then, driven by government “stimulus” spending that he himself urged. He has acknowledged that error, confessing, “I wrongly believed that markets would look at it the same way.”26

The Little Man Lives Large

For Krugman, “wrongly believed” may just be a fancy way of saying, “I lost money on that one.” Perhaps lots of money, because Krugman probably has a great deal of mortgage debt. That’s because he’s being hypocritical when decries what he calls the “lifestyles of the rich and tasteless” and the mansions of “plutocrats.”27 His own home in Princeton is a custom-built 6,000-square-foot compound, which according to records of the Township28 sports a four-car garage, music room, library, and greenhouse, and a fire-pit where he and his faculty friends burn effigies of prominent conservative politicians.29 He also has a vacation home in St. Croix and a $1.7 million co-op in New York City.30

In this one way, Krugman is very unlike Ellsworth Toohey. Toohey is an honest socialist, if such a thing is possible. At least he’s an ascetic, living in a “monk’s cell” of an apartment, “scornful of material display.” But Krugman lives large. How does he afford it? Clearly, he’s not making the big bucks as a speculator as Keynes did (unless in his personal trading account he’s deliberately doing the opposite of what he advises his readers to do). There are speaking fees, no doubt. All public intellectuals feed from that trough. And they get to meet the most interesting people there.

For instance, there’s the time in 1999 when Krugman was in Kuala Lumpur, Malaysia, speaking at a business conference.31 While he just happened to be in town, he just happened to spend a day with Malaysia’s prime minister, Mahathir Mohamad, including, according to Krugman, a “staged ‘dialogue’—which was played out in semi-public, in front of a disturbingly obsequious audience of a hundred or so businessmen.”32

Mahathir is a rabid anti-Semite, who has demonized Jews for causing Malaysia’s economic problems. Krugman shrugged that off, sighing that he knew Mahathir “would try to use me politically—to provide a veneer of respectability. . . . But sometimes an economist has to do what an economist has to do.”33 Like what, exactly, in this case? What duty was discharged by Krugman’s appearance with the loathsome anti-Semite Mahathir, other than enjoying a day as the center of attention “at the Palace of the Golden Horses, a vaguely Las Vegas–style resort outside Kuala Lumpur”?

In a Times column in late 2003, he defended Mahathir’s anti-Semitism, rationalizing it as a realpolitik response to the U.S. invasion of Iraq.34 Apparently in Krugman’s mind, however bad anti-Semitism is, George W. Bush’s policies are worse. The Times column ran with the subhead, “Anti-Semitism with a purpose.” The Anti-Defamation League was not amused, slamming Krugman for being tolerant of anti-Semitism because of “his obsession with criticizing U.S. policy.”35

In the ensuing controversy, Krugman claimed, “I have never received any money from Mahathir.”36 But that’s not a claim he can make with respect to some of the other bad actors he’s gotten himself involved with.

Adding Consult to Injury

One of Krugman’s worst predictions—and quite an honor it is to earn that designation, considering how much competition there is for it—was not an economic one, but a sociological one. No doubt thinking of some of Keynes’s farsighted observations, Krugman prophesied in a January 2002 Times column, when the ashes were still warm at Ground Zero in lower Manhattan, “I predict that in the years ahead Enron, not Sept. 11, will come to be seen as the greater turning point in U.S. society.”37

Lunacy, to be sure. U.S. history books a century from now will feature pictures of the World Trade Center aflame. Who, even now, remembers much about Enron? Oh yeah—it was that company that cooked the books. A couple of its executives went to jail, didn’t they?

Yep, that’s the one. But Krugman will never forget Enron, even if the rest of us already have. That’s because at the time it was quite le scandale, and it turned out that Krugman was caught right in the middle of it, with his hand in Enron’s cookie jar.

In 1999 Krugman wrote an article for Fortune magazine.38 It was unexceptional for that heady time, basically a puff piece about the wonders of the so-called new economy driven by technological and managerial breakthroughs. What was exceptional about it was that the company that served as the centerpiece of the article, the paradigm of “The Ascent of E-Man,” was Enron.

Krugman was totally taken in. He even rhapsodically described the company’s “pride and joy”—its trading room—which later was exposed as a fake set up to fool Wall Street analysts.39 You’d think he would have known better, because by the time he’d written that article he’d become an Enron insider.

He mentioned in the text of the article that he had “recently joined the advisory board at Enron”—and then went on to praise the company, and to aid and abet its projection of a fraudulent facade. But he didn’t mention the fact that the pay for a year on the advisory board was $50,000.40 Maybe that’s what kept him from seeing the truth about Enron, even though from his position he was able to look at the company up close and personal.

Once Enron was exposed as a fraud—by others, by people who were not on the take from the company—Krugman wrote about it frequently in his Times columns. The specific idea was to link the Texas-based company to Texan George W. Bush, and the more general idea was to attack private business and use Enron as an excuse for more government regulation. For all the thunderbolts Krugman hurled at Enron from the Olympus of the New York Times, he disclosed his involvement with the company only once, at the very beginning.

In a January 2001 column, Krugman said he’d “signed on” to the advisory board—bracketing this confession fore (“this newspaper’s conflict-of-interest rules required me to resign”) and aft (calling the board “a hatchery for future Bush administration officials”).41 But that was it as far as disclosure was concerned—though he was to write about Enron many, many times, accusing the Bush administration of “crony capitalism” without mentioning that he himself was one of the cronies.42

The low point in Krugman’s Enron hypocrisy was surely reached with a Times column in December 2001, where he heaped scorn on its “vision thing: it would create markets in everything, and make money by trading in those markets.”43 He blasted “business gurus” and “consultants” who acted as though Enron’s critics “just didn’t get it.”

Not one word about the fact that he himself was one of those business gurus who, just two years before, had praised Enron’s “vision thing”—right down to the (fake) trading room where they would “create markets in everything.” And not one word about the fact that he was a consultant to Enron itself, and at the same time as he’d helped Fortune magazine’s readers to “get it.”

Let’s see if we “get it” now. How did Krugman use the consulting fees he was paid from Enron—and, for that matter, the payment we assume he got from Fortune for helping its readers lose 100 cents on the dollar invested in Enron? Was that the down payment on the vacation home in the Caribbean? Or did it pay for that fire-pit for effigy-burning?

The Krugman Truth Squad

The plot of The Fountainhead revolves around the conflict between Ellsworth Toohey, the villainous collectivist, and Howard Roark, the heroic individualist. Toohey is an active antagonist in the conflict, constantly scheming to thwart Roark’s brilliant career. But Roark is passive; he defeats Toohey by eventually outlasting him, and in the meantime not wasting his time on him.

In one of the book’s most memorable scenes, Roark and Toohey encounter each other by chance, at a point where Toohey has very nearly ruined Roark’s career. Ever the second-hander, needing to define himself through others, Toohey asks Roark to tell him honestly what he thinks of him. Roark, the man who lives entirely by his own opinion of himself, simply says, “But I don’t think of you.”

Maybe I should have followed Roark’s example, but I didn’t. I spent years thinking about Paul Krugman. That makes this an anomalous chapter in a book created to help people emulate the success of Ayn Rand’s heroes. But my story with Paul Krugman shows that real-life Rand villains can be defeated. If it serves your values to oppose them, it can be done.

I don’t remember now exactly how it started. But in 2002, I decided to write a book. It was going to be called The Conspiracy to Keep You Poor and Stupid. The idea was to explain how big government, big business, big media, and big academia block your road to financial freedom—and tell you it’s for your own good. In October of that year I started a blog by the same name to help me write the book. The blog took on a life of its own, thanks to Krugman, and ended up consuming so much of my time that I never wrote the book.

From the beginning, I had Krugman in mind as a prime mover in the conspiracy, standing at the intersection of big media and big academia. Early on I became aware of the connection between Krugman and Ellsworth Toohey. It was Krugman himself who tipped me to it, in a Times column in February 2003 in which he taunted Federal Reserve chairman Alan Greenspan for betraying his longtime friendship with Ayn Rand. He went so far as to quote Rand quoting Aristotle: “A is A: non-contradiction.”44 In a blog posting I said, “Rand’s intense advocacy of laissez faire capitalism and her heroic sense of life couldn’t be more antithetical to Krugman’s welfare-state politics and his apocalyptic vision.”45 And that’s when I realized that Krugman was Toohey, “the little but brilliant man with an inferiority complex who wants to take over the world.”

My first post about Krugman was on the eighth day of the blog’s life, and several days after the 2002 midterm elections in which the Republicans consolidated their control of Congress.46 I was commenting on a Krugman Times column in which he blames the GOP’s victory on “the real conservative bias of the media.” Yes, believe it or not, that’s what he said—and in a blatant display of his own partisan bias, he went on in the course of the column to gradually morph the editorial we from “us” to “some of my friends” to “Democrats” and finally, simply “the party.”47

I started blogging more and more about Krugman because I was fascinated by his deepening descent into a very public paranoia about the Bush administration and the Republican party—and as an economist myself, I resented the way he was using the imprimatur of the profession to enhance his credibility. He was also using the imprimatur of the New York Times, pushing the envelope of how aggressive one could be on its editorial pages. His attacks on the Bush administration became increasingly aggressive, strident, and bizarre: comparing him to the emperor Caligula, gratuitously evoking his youthful alcohol abuse, accusing him of outright corruption, and—in a book of collected Times columns—likening the Bush administration to the Third Reich.48 These utterances were unseemly, nasty, vindictive, personal, and hate-filled—the stuff of tabloids or ranting blogs, not journalism’s “Gray Lady.”

Maybe Krugman’s hateful attitude was just a way of getting rich and famous. As N. Gregory Mankiw, the respected Harvard economist, said of Krugman, “I guess if you’re a columnist, you want to be widely talked about and be the most e-mailed. It’s the same thing that drives talk show hosts to become Jerry Springer.”49

Whatever his motive, I was intrigued by the vicious cycle he was stoking. The Times let Krugman get away with his spew of hate, and in doing so, this standard setter for American journalism redefined what is considered acceptable within mainstream political commentary. As the boundaries of discourse loosened and coarsened, Krugman would just keep throwing dirt at them; they’d then loosen and coarsen some more. The same thing happened in The Fountainhead with Ellsworth Toohey and the Banner—and it ended up destroying the Banner as it may yet destroy the Times.

At issue was not just the tone that the Times permitted Krugman to take. At the same time, Krugman’s columns became increasingly filled with distortions, exaggerations, contradictions, out-of-context quotations, and misquotations. On the pages of what is widely regarded as America’s “newspaper of record,” these distortions had the power of truth and entered the history books as facts.

I set out to expose those distortions, and to force the New York Times to correct them. If the Times would correct them, then we could excuse them as mere rhetoric, or perhaps errors. But if no corrections were made, then the very failure to correct would make them willful lies.

I started first on my blog, and soon afterward in a series of columns for National Review Online—the web site of the venerable conservative magazine—called “The Krugman Truth Squad” (KTS).

The inaugural KTS column appeared on March 20, 2003.50 The series of columns was structured as what is now called “crowdsourcing”—within several hours of a Krugman column appearing on the Times web site, I and a network of fellow bloggers would put it under a microscope and discover all the filthy microbes hiding in every crack. We’d fact-check every claim, confirm every quotation, run down every source, and compare every statement for consistency with statements made in the past. The KTS called Krugman “America’s most dangerous liberal pundit,” and our promise to readers was: “We’ll read Paul Krugman so you don’t have to.”

I won’t cite here very many of the dozens upon dozens of prevarications that my Krugman Truth Squad exposed in 94 columns over five years. If you are interested, look up my name in the author archives of National Review Online, where most of the KTS columns can still be seen.

In most cases, any given one of Krugman’s prevarications—if uncorrected, his lies—will seem trivial, as though I were nit-picking to focus on it. But the cumulative effect of them all—every exaggerated statistic designed to bolster some economic argument, every out-of-context quotation designed to make some conservative politician look venal or conservative economist look stupid, every inaccurate historical citation designed to make conservatives into crooks and liberals into heroes—is to shape Krugman’s narrative with a persuasive power it would never achieve if it were confined to the truth. In the same sense, the cumulative effect of my persistent blogging, and of the Krugman Truth Squad columns, has been to gradually erode that persuasive power.

My Truth Squad got Krugman’s attention right away. After just a month, in an April 2003 KTS column, I took Krugman to task for a whopper he’d told the day before in his Times column.51 Concerning claims by the Bush administration for job creation as a result of its proposed tax cuts, Krugman wrote,

[L]et’s pretend that the Bush administration really thinks that its $726 billion tax-cut plan will create 1.4 million jobs. At what price would those jobs be created? . . . The average American worker earns only about $40,000 per year; why does the administration, even on its own estimates, need to offer $500,000 in tax cuts for each job created?52

Sounds sensible if you read it fast—and pretty damning of Bush’s plan—especially you assume you don’t have to question Krugman’s claims, since these words were written by a Princeton economist on the pages of the New York Times. But now: stop, think, and question.

That $726 billion number came from a report prepared by Bush’s Council of Economic Advisers (yes, the same White House office for whom Krugman had written that foolish report about the “Inflation Time Bomb” two decades earlier). The estimate of 1.4 million jobs created was just for the first single year of the tax cuts, 2004. Yet the $726 price tag was for 10 years. In other words, Krugman was pushing the entire 10-year cost of the tax cut onto a single year of jobs creation.

It was a remarkably arrogant and sloppy thing for Krugman to put in writing. Especially considering that a couple of months earlier he’d made a similar claim in a television interview, and without missing a beat the interviewer had caught the distortion—and forced Krugman to backtrack. PBS’s Geoff Colvin asked Krugman, “Well, but it’s going to go for longer than just this one year, right?” And all Krugman could say was “Well, yeah. . . .”53

But then he repeated the distortion, and having already acknowledged it to Colvin, the second time around it wasn’t just a distortion—it was a lie. And it was in writing, in the pages of the New York Times. There was no backtracking—and for Krugman, certainly no confession. All Krugman could do was try to justify it retroactively, which he did in a lengthy series of posts and updates on his Princeton web site. Emitting increasingly alarming screeches of desperation, he cited abstruse charts and graphs based on Keynesian macroeconomic theory to justify his erroneous claim—which for all the highfalutin econobabble was self-evidently simply the result of his having failed to divide by 10.54 Keynes would be rolling in his grave, only he’s too busy laughing. Perhaps that’s why Krugman’s last gasp on the subject was a link on his web site pointing to a scene from Monty Python.55

After that my KTS dogged Krugman relentlessly, catching dozens upon dozens of errors, distortions, and misquotations in his columns, which when left uncorrected became lies.

Krugman couldn’t help but take notice. In a May 2003 blog posting as part of the divide-by-10 fiasco, he called me “my stalker-in-chief.”56 Four months later, when Tim Russert on his CNBC television show confronted Krugman with one of the embarrassing self-contradictions pointed out in my Krugman Truth Squad columns, Krugman said he’d been “so far just stalked, uh, intellectually.”

Okay, it was funny. But then things got very nasty.

Ordeal by Slander

In October 2003 I attended a lecture by Krugman in an auditorium on the campus of the University of California at San Diego.57 It was part of a tour to promote his new book, a collection of Times columns called The Great Unraveling.

The experience was very much like living out the scene in The Fountainhead in which the character of Ellsworth Toohey is first introduced. Toohey is giving a lecture in a crowded auditorium, exhorting the audience to support a striking union, concluding with a call to collectivism: “Let us organize, my brothers. Let us organize. Let us organize. Let us organize.” While Toohey is described by Rand as “puny,” when he speaks before an audience his voice “unrolled as a velvet banner. . . . It was the voice of a giant.” We witness the scene from the viewpoint of two members of the audience, who for reasons they don’t understand are gripped with horror when they hear Toohey, and flee the auditorium.

Krugman was introduced by a University potentate saying, “God bless Paul Krugman,”58 and the audience erupted in cheering and applause. Krugman gave an intense, commanding speech, and the audience hung on every word. On television, Krugman’s voice is high-pitched with a crude New York accent, and he stammers and stutters and pauses and repeats himself—but that night it was Toohey’s velvet banner.

I was gripped with horror. I’d spent months debunking and defanging Krugman; but until I saw that cheering audience, I’d never really grasped the vastness of the force I was dealing with. It wasn’t just Krugman; it was the millions of people who adore him, who already believe the kinds of things to which he merely gives voice, and who made him possible in the first place. I just wanted to get out and go back to my hotel and take a shower.

But I was with a friend, and we’d agreed that when it was over we’d get him to sign copies of his book for us. I waited in line for a few minutes while he banged out scrawled signatures by the dozen, and when he was done with mine, I asked, “Would you inscribe it to me personally?” He said, “Yeah, all right—what’s your name?” I said, “Don . . .” and he wrote Don. Then I said, “Luskin: L-U-S-K-I-N,” and by the time he got halfway through, he realized. His eyes started shifting, like Richard Nixon, but he said nothing. I said, “Now you keep up the good work, Paul.” He muttered, “Yeah, yeah, fine.”59

I went back to my hotel and wrote a blog post about the experience.60 Within hours, a link to my post had been put up on the blog called Eschaton, posted by the pseudonymous Atrios (who turned out later to be the leftist economist Duncan Black). The entire text of Atrios’s post consisted of the words: “Diary of a Stalker By Donald Luskin.”61

Ten days later, on October 17, Krugman went on national television, on the Fox News show Hannity & Colmes, and said of me, “That’s a guy, that’s a guy who actually stalks me on the Web, and once stalked me personally.”62

Let me be clear about what happened here. Krugman wasn’t speaking metaphorically or jocularly, as he had been months earlier when he called me his “stalker-in-chief.” This was an accusation of actual stalking—“personally,” as Krugman put it. Stalking is a felony, one with a connotation of particular malice, if not perversion, and I had just been accused of it.

And let me say to anyone who thinks I am exaggerating when I refer to Krugman as a liar, this proves that he is. I did not stalk Paul Krugman. Meeting him at a public book-signing is not stalking. For him to say that I stalked him is an attack, a character assassination, and a bald-faced lie.

What did it feel like? Everyone wants their 15 minutes of fame. You tell yourself that any publicity is good publicity in our celebrity-driven culture. But no one wants what my family and I went through: week after week in which I was accused, over and over again on the Internet by the hate-filled leftist blogging community, of having committed the kind of felony associated with psychopaths. By November, the affair had become such a cause célèbre it had even been chronicled in the New Yorker.63 The worst parts were the death threats aimed at my wife and daughter.

Here again I felt I was living out scenes from The Fountainhead. Ellsworth Toohey deliberately used his position in the media to ruin the reputation of Howard Roark, who represented in Toohey’s mind the primal spirit of individualism to which his own philosophy of collectivism was fundamentally opposed. I wish I could say anything so cosmic was at work in Krugman’s attempt to destroy me. Sure, a clash of philosophies was involved. But for Krugman I doubt that had much to do with it; I was marked for destruction simply because I’d gotten in his way, and from his narcissistic point of view as a wannabe “psychohistorian” whose “secret fantasy” was to control the galaxy, that was enough.

However, unlike what happened to Howard Roark after one of Toohey’s smear campaigns, I didn’t have to go work in a granite quarry. My career survived Krugman’s attack. And my Krugman Truth Squad stayed on the job, and moved on to achieve several decisive victories against Krugman.

The Errors of His Ways

In addition to exposing Krugman’s lies on my blog and in the Krugman Truth Squad column, I pelted the New York Times with requests for formal corrections—and was consistently rebuffed or ignored. That was to change dramatically. But at first I was surprised, since the Times has a reputation for absurd punctiliousness when it comes to corrections—setting the record straight concerning the slightest details, sometimes months or years after the error was originally run.

But I learned that the Times editorial page is managed entirely separately from the rest of the paper. It reports to the publisher, not to the executive editor. At that time it had no formal corrections policy whatsoever, except that corrections were at the discretion of the opinion writer; so human nature being what it is, there were hardly ever any corrections at all. I set about to change that—and I did.

Again, this isn’t the way Ayn Rand’s heroes dealt with her villains; they mostly ignored them. But if it’s a value to you to take on the villains in the real world, and you’re willing to pay the price, then this story proves you can do it.

I got my break when the Jayson Blair scandal erupted. Blair was a young Times reporter who resigned after he was caught fabricating stories and plagiarizing from other newspapers. To help rehabilitate its damaged reputation, the Times created the post of “Public Editor”—what other newspapers call an ombudsman—to act as an independent watchdog to assure the paper’s integrity and serve as a disinterested conduit for reader concerns. The man they hired was Daniel Okrent, and I made it my mission to recruit him to the Krugman Truth Squad.

We struck up an ongoing e-mail correspondence. When I met with him personally, his first words to me were: “You’re much better looking than Paul Krugman.” He told me that the Times didn’t deserve to be called the “newspaper of record” and vowed, “When I’m done with this assignment, I want everyone to know that.”64

I raised with him how strange it was that the editorial page had no corrections policy. I shared with him various errors and misquotations in Krugman columns that I felt were simple and objective enough to merit formal correction. Over time, in a number of cases he agreed with me about the errors, and went to Krugman and to Krugman’s editor, Gail Collins, to get corrections with or without a formal policy.

But Okrent got stonewalled, just as I had. He wrote,

I learned early on in this job that Prof. Krugman would likely be more willing to contribute to the [GOP Senator] Frist for President campaign than to acknowledge the possibility of error. When he says he agreed “reluctantly” to one correction, he gives new meaning to the word “reluctantly”; I can’t come up with an adverb sufficient to encompass his general attitude toward substantive criticism.65

Frustrated that working behind the scenes was not producing results, Okrent threatened to use his Public Editor’s column to expose Krugman’s and Collins’s intransigence. As a result, in March 2004 the Times put in place for the first time a columnist corrections policy. Okrent described the policy this way, quoting in part a memo from Collins:

[C]olumnists must be allowed the freedom of their opinions, but . . . they “are obviously required to be factually accurate. If one of them makes an error, he or she is expected to promptly correct it in the column.” Corrections, under this new rule, are to be placed at the end of a subsequent column, “to maximize the chance that they will be seen by all their readers, everywhere.”66

It was a victory, but a partial one to be sure. The corrections are to be worked into subsequent columns, not flagged in the paper’s separate corrections department, nor are the columns in which the errors were originally made to be flagged in the archives as having been subsequently corrected. With all those loopholes remaining, Krugman must have breathed a sigh of relief. But how his blood must have boiled when he read Okrent saying in the same column,

Paul Krugman, writes Donald Luskin of Palo Alto, Calif., has committed “dozens of substantive factual errors, distortions, misquotations and false quotations—all pronounced in a voice of authoritativeness that most columnists would not presume to permit themselves.”

For a wider audience, Luskin serves as Javert to Krugman’s Jean Valjean. From a perch on National Review Online, he regularly assaults Krugman’s logic, his politics, his economic theories, his character and his accuracy.67

A year and a half later, Okrent moved on. In his final column as Public Editor, he took a parting shot at Krugman, listing among the things he regrets he didn’t write more about that “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.”68

A new Public Editor, Byron Calame, took Okrent’s place. And my Krugman Truth Squad was ready to take our battle for columnist corrections to the next level.

Putting Krugman in the Correctional Facility—for Life

In August 2005, Krugman claimed in a Times column concerning the disputed 2000 Florida presidential election:

Two different news media consortiums reviewed Florida’s ballots; both found that a full manual recount would have given the election to Mr. Gore.69

On the same day, on my blog I called him out on what was an egregious lie.70 The Times itself was a member of one of the consortiums, and said in 2002 that “Mr. Bush would have retained a slender margin over Mr. Gore if the Florida court’s order to recount more than 43,000 ballots had not been reversed by the United States Supreme Court.”71 I immediately started a dialogue with new Public Editor Byron Calame to force Krugman to correct it. It should have been a slam dunk, but it took many weeks, and many e-mails and phone calls to Calame.

Over the ensuing weeks, Krugman pulled every possible trick to avoid making a correction. In his next Times column three days later on August 22, he wrote about the “outraged reaction” about his original claim.72 He used this column, as new Public Editor Calame would later complain on his blog, only “to explain the misstatement without admitting any errors. . . . absent a formal correction, the information didn’t get appended to his flawed Aug. 19 column.”73

Then, four days later in his August 26 column, Krugman added a new correction that was itself erroneous.74 Calame exploded, “It was wrong on the results of the Miami Herald statewide manual recounts. And it didn’t deal with the fact that the original Aug. 19 generalization, the Aug. 22 column and the formal correction all erred in describing the findings of the other news media consortium (in which The Times was a participant).”75

What was so tricky about it was that Krugman’s error had come, in part, from reliance on an erroneous story in the Miami Herald (which had performed the recount for the media consortium) in which one of the scenarios where Bush won was omitted. I ran this down personally by locating and contacting a former Herald editor who had since moved to Washington, D.C., and who at my insistence went up to his attic to obtain the records necessary to establish the facts—which I passed on to Calame.

Calame’s complaints were posted on his blog on September 2, which drove Krugman to post later the same day a statement on the Times web site—but not in print—acknowledging his original error, but blaming it on the Miami Herald, and asserting that it didn’t matter anyway.76

There it remained for two weeks, with no formal and complete in-print correction. I kept hectoring Calame. Then on September 16, Calame wrote a blog post protesting,

Mr. Krugman still hasn’t been required to comply with the policy by publishing a formal correction. Ms. Collins hasn’t offered any explanation. . . .

All Mr. Krugman has offered so far is a faux correction. . . . Mr. Krugman has been allowed to post a note on his page that acknowledges his initial error, but doesn’t explain that his initial correction of that error was also wrong.77

Finally, two weeks later, Calame announced on his blog that a new columnist corrections policy would be forthcoming from Collins.78 No longer would corrections be appended only to future columns. Instead, they would be appended in the archives to the original columns in which the errors appeared, so that readers doing Web-based searches, or using services like LexusNexus or Factiva, would be informed that the articles they were viewing had been subsequently corrected.

Several days later, on October 2, Collins revealed the policy, saying that Krugman “asked if he could refrain from revisiting the subject yet again in print.” We can just imagine that conversation—the word “asked” is probably not entirely accurate. Whined? Pleaded? Begged? Whatever—Collins’s column concluded with a full and formal correction of Krugman’s multiple errors, misrepresentations, and evasions about the Florida election, and the same text is now appended to all the Krugman columns involved.79

The same day’s editorial page carried another correction under the new policy—a particularly telling and funny one.80 Three (count ’em: three!) of the Times’s columnists had to recant a single falsehood that all of them had made in the attempt to portray cronyism in the Bush administration—with Krugman having made it twice!

Op-Ed columns by Paul Krugman (Sept. 5 and 9), Maureen Dowd (Sept. 10) and Frank Rich (Sept. 18) said Michael Brown, the former FEMA director, was a college friend or college roommate of Joe Allbaugh, his predecessor. They went to different colleges and later became friends.

Cut Down to Size

Several years have passed since then. I’ve stopped posting to my blog, The Conspiracy to Keep You Poor and Stupid, and I haven’t written a Krugman Truth Squad column for many months. I decided that it was time to declare victory. And what do you know—that book of mine finally got written. Or at least a version of it, which you are reading right now.

With all I and my fellow Krugman Truth Squad members did to expose Krugman’s lies, and with a new columnist corrections policy that imposes a formal reputational cost on Krugman if he keeps on lying, it seems that Krugman has nothing to say—at least nothing that has the power to influence the national debate, as his columns once did. It turns out that it’s a lot harder to convince people when you have to stick to the truth.

Need proof? Just think how Krugman must have felt in late 2010, when the 2003 Bush tax cuts he did so much to oppose—including embroiling himself in the humiliating divide-by-10 contretemps—were extended by a Democratic president and a Democratic Congress. Impotence just doesn’t get any more humiliating than that.

At the same time, Krugman has become a victim of his own success. His vicious cycle of ever looser and ever coarser discourse has reached a dead end, and left him facing a new generation of competitors as loose and as coarse as he is. He just doesn’t stand out anymore.

There are other victims. It may be that Krugman’s vicious cycle has reached a dead end in a tragically literal sense, with the January 2010 shootings in Tucson of a congresswoman and several bystanders. There’s never been any evidence that the shooting was politically motivated, but before the blood was dry Krugman had published a post on his Times blog instantly leaping to the conclusion that “odds are that it was,” and asserting that she had been targeted because “she’s a Democrat who survived what was otherwise a GOP sweep in Arizona.” He went on to blame “the rhetoric of Beck, Limbaugh, etc.” for creating a “climate of hate.”81

Barack Obama disagrees. When he spoke in Tucson the following week, Krugman no doubt felt personally dressed down when the president said, emphatically, regarding whether the “lack of civility caused this tragedy,” that “It did not.”82

But if it did, then by Krugman’s own theory of a “climate of hate,” this assassination attempt could be seen as the deadly fruit of seeds he himself had sown years before when he began to use the Times—America’s “newspaper of record”—as a platform for personal destruction of his enemies.