March 29, 2002
From the desk of Jane Galt:What I learned from Professor
What I learned from Professor Krugman this week
Valuable insights from a professional economistMany people are spending time making fun of Paul Krugman's latest column just because it serves as an extended whine about how all the boys on the right are meeeaaannnnn. They're missing the point. This column represents a radical new way of looking at things that I feel no trepidation in saying could transform the field of Economics as we know it. In just 500 short words, Krugman has swept away some of the most basic tenets of his profession, revealing a daring new methodology that, if it becomes widespread, could liberate us all. I've pulled out four of the most revolutionary insights -- but don't stop there. Read it yourself, and be amazed.
Insight #1: You Can Always Tell in Advance Which Capital Investments Will Pay Off
Which is why central planning works so well. Consider this incisive analysis of the Whitewater investigation:
The group's efforts managed to turn Whitewater — a $200,000 money-losing investment — into a byword for scandal, even though an eight-year, $73 million investigation never did find any evidence of wrongdoing by the Clintons.
It's outrageous, isn't it? I think we should pass a law saying that no one's allowed to invest any money in anything unless they have a 100% guarantee that the investment will pay off.
Insight #2: Highly Localized Samples are Representative
. . . for some reason there is a level of anger and hatred on the right that has at best a faint echo in the anti-globalization left, and none at all in mainstream liberalism. Indeed, the liberals I know generally seem unwilling to face up to the nastiness of contemporary politics.
Now, when I was doing boring old marketing surveys, I wasn't allowed to just survey my friends to produce an answer because my stupid professor thought that they shared too many characteristics like being upper middle class professionals in their late twenties who were enrolled at the University of Chicago Graduate School of Business. Clearly, he wasn't in tune with the latest research. I don't know what Krugman's methodology is for drawing sweeping generalizations about the entire population of the US based entirely on conversations with his friends, but boy, I can't wait to get my hands on it! I could kill an entire year's product planning over beers and cheese fries at Jimmy O'Brien's!
Insight #3: Extremely Small Samples are Representative
I wish they'd told me about this in statistics!
It's also true that in the nature of things, billionaires are more likely to be right-wing than left-wing fanatics. When billionaires do support more or less liberal causes, they usually try to help the world, not take over the U.S. political system. Not to put too fine a point on it: While George Soros was spending lavishly to promote democracy abroad, Mr. Scaife was spending lavishly to undermine it at home.
According to Forbes, there are 497 billionaires in the world . . . yet Krugman was able to completely describe the behavior of the population with a sample size of just 2, just .4% of the total population -- and no worries about the reliability of samples smaller than 50, either! Using this radical new technique, I will finally be able to complete my dissertation: All People Named Paul Are Good Economists but Bad Liars: A Case Study.
Insight #4: You don't need any boring old numbers to make your case
In my economics classes, my professors were appallingly obsessed with numerical proofs of my statements. Just let me say something obvious, like "most people own a computer", and they'd want me to go waste time digging up the actual number of people who had a computer, and divide it by the number of people, all so I could tell them something I already know. Too bad I never took a class from Krugman.
Slate's Tim Noah, whom I normally agree with, says that Mr. Brock tells us nothing new: "We know . . . that an appallingly well-financed hard right was obsessed with smearing Clinton." But who are "we"? Most people don't know that — and anyway, he shouldn't speak in the past tense; an appallingly well-financed hard right is still in the business of smearing anyone who disagrees with its agenda, and too many journalists still allow themselves to be used.
I have no idea how Krugman knows what "most people" know, or don't know. I don't know whether he has personally spoken with "most people", or has a Brookings study on the matter, or whether he just took a statistically valid sample by asking his mother-in-law and her cleaning lady. But I don't care, because I'm so freed by the prospect that I can get away from all that tedious calculation simply by using precise terms like "most" that I don't even want to know how he performs that voodoo that he do so well. I just want to turn this article into one of my econ professors and demand a couple of retroactive A's.
Thank you, Mr. Krugman. For Economics students everywhere. We are in your debt, sir . . . Deeply, deeply in your debt.
Posted by Jane Galt at March 29, 2002 4:48 PM | TrackBack | Technorati inbound links