Thread by @LHSummers

I waited a day to respond to @paulkrugman’s latest column to see if sleeping on it would temper my negative reaction. It didn’t.

Do Democrats Have a Technocrat Problem? nytimes.com/2022/02/22/opi…

Krugman worries about economists with independent, technically based opinions. I worry about columnists who write columns that flatter the prejudices of the constituency they have chosen.

Technocrats proving independence??? I hear frequently from Democratic economists who privately are sharply critical of policy but won’t speak publicly.

The issues range from transitory inflation to corporate greed to buy America to tariffs to certain nominations. That is the larger problem.

As @jasonfurman points out, @paulkrugman's chart about gas prices across countries proves nothing about the incidence of a tax in a single country.

On greed, antitrust, and inflation, I can’t understand Paul’s views. The fact that so many more goods now are in short supply with long queues suggests to me that prices have risen by less, not more, than demand conditions warrant.

The fact that the housing market (which is certainly not concentrated) and the labor market (where monopsony is thought to hold wages down) are on fire should give pause.

Paul won his Nobel Prize for work on increasing returns to scale. Why does he not countenance the idea that rising scale for firms can reduce prices to consumers?

Would he prefer that the Walmarts, Targets and Costcos give way to small local outlets?

How can anyone given the lags involved take seriously the idea that antitrust will matter for inflation over a 2-year horizon?

The obvious explanation for the facts in meatpacking is a shortage of people willing to work in the industry, which reduces supply to consumers and demand from ranchers.

Are there real economic studies (not blogs by political actors) refuting this theory in favor of the monopoly power theory of a few months meat price inflation?

Btw, Paul misrepresents the context of Kennedy’s steel price comments. The key fact was that Kennedy had previously jawboned down wage costs. Very different than anything proposed now.

The best politics over time come from policy success. That depends on sound objective serious analysis, not dominated by political calculation