This economy: Call it a ‘Krugman’ – not dead, but very slow

The New York Times had some fun yesterday with the words President Bush uses for the current economic slowdown, which can’t be called a “recession” because the economy still is expanding.

The article was headlined “Rough’ ‘Tough’ Times, but Still No ‘Recession.’” You can guess everything in the story.

But if The Times is unhappy with words like “slowdown” and “very difficult times,” perhaps it should call this economic environment a Krugman.

Chronic pessimist. Paul Krugman, a Times columnist and Princeton economics professor, has been predicting recessions that don’t show up since 2002. Recessions are common every eight years or so, so it’s remarkable that a man who teaches economics could make the wrong call six years in a row. Could his chronic pessimism have been colored by his hatred of Bush? Oh, come on! That would be childish.

Like Krugman, I’d be happy to raise taxes to soak the rich, and particularly the super-rich. But where I disagree with Krugman is that, even during a Republican administration, I believe it would be good to have an expanding economy to make more rich people subject to those higher taxes.

In January, when the nonpartisan Congressional Budget Office was predicting a better-than-even chance of no recession, and advising Congress that its $150 billion “stimulus package” is unnecessary, Krugman said:

“The signs point increasingly to an imminent, or perhaps already begun, recession.”

A trying record. Again, he was trying to cover the recession bet, but again, he was wrong. The economy expanded by 0.6 percent in the first quarter of this year, after expanding the same degree in the last quarter of 2007.

Yet Krugman is bound to be right about the economy someday, and he tries so hard with his forecasts. Why not give him something for his effort?

Let’s name any two-quarter period of economic expansion of under 1 pecent per quarter for Krugman. It would be a fitting legacy for the champion of difficult times.

Let’s proclaim loud and clear this economy is in a Krugman -- not dead, but very slow.

Frank Warner