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7 February 2002

Our current howler (part II): The boy ain’t right

Synopsis: Sullivan challenged Krugman on substance. Maybe insults are what he does best.

Bush’s aggressive accounting
Paul Krugman, The New York Times, 2/5/02

We first gave up on Andrew Sullivan when he penned his "flat tax" piece for the New York Times Sunday magazine (see THE DAILY HOWLER, 1/16/02. For real-time reports, see THE DAILY HOWLER 1/18/00, 1/19/00). In his article, Sullivan not only offered a ludicrous general assessment of why the flat tax was bound to prevail (life was getting so much simpler!). He also got taken to the cleaners on every aspect of the plan which he tried to describe. The piece showcased the merry mix of traits we have come to expect from the Brainy Brit’s sorry screeds. It showed his overwhelming self-confidence—mixed, of course, with his endless skill at being taken for a long, slow, dumb ride.

So maybe we’d all have been better off if he’d just kept insulting Paul Krugman. We have never understood the passion play that drives his hatred of the terrible Timesman; Sully’s shots at Krugman predated Enron, but he has never really explained their provenance. And he seldom dared to challenge anything poor Krugman said on the merits. Typically, Sullivan contented himself with snide little shots—and cowered away from matters of substance. This week, though, he tried to do right. Predictably, his effort showed the trademark confusion that drove his flat tax piece into the ditch.

On Tuesday, Krugman began his NYT column by dinging budget maven Kent Conrad. According to Krugman, the new Bush budget didn’t display "Enron-like accounting," as Conrad had said the day before; it was actually "[l]ast year’s budget, the one that included that big tax cut," that had "a strong touch of Enron about it." Krugman went on to explain what he meant, and Sullivan was soon badly bollixed:

KRUGMAN: Enron’s illusion of profitability rested largely on "mark to market" accounting. The company entered into contracts that would yield profits, if at all, only over a number of years. But Enron jumped the gun: it treated the capitalized value of those hypothetical future gains as a current profit, which could then be used to justify high stock prices, big bonuses for executives, and so on. And that’s more or less what happened in last year’s budget. The Bush administration took a bullish 10-year surplus projection—a projection that had a built-in upward bias, and in any case should have been regarded as no more than a guess—and treated it as if it were hard fact. On the basis of those surplus fantasies the administration—aided by an audit committee, otherwise known as the U.S. Congress, that failed to exercise due diligence—gave itself a big bonus in the form of a huge tax cut.

Did last year’s budget projections involve "surplus fantasies?" It’s hardly a novel idea. Over the course of the past several years, every publication on the face of the earth has explained the "built-in upward biases" in the ten-year surplus projections offered by budget authorities. In the summer of 1999, for example, the CBO and the OMB issued large surplus projections. In response, a range of popular rags and mags warned about the bogus assumptions which artificially drove up the digits. Here are just a few of the pieces which explained the so-called "phantom surplus:"

The Los Angeles Times: "HUGE SURPLUS IS BUILT ON BIG ASSUMPTIONS," Janet Hook and Peter Gosselin, 7/11/99
USA Today: "Bloated spending could eat surplus," Owen Ullmann, 7/29/99
The Washington Post: "A Primer on Budget Surplus," George Hager, 8/5/99
The New York Times: "Surplus Dreams," Richard Stevenson, 8/10/99
U.S. News: "Honey, We Lost the Surplus," Jodie Allen, 8/16/99
Time: "PHANTOM SURPLUS," Nancy Gibbs, 9/20/99

All the articles described a built-in problem with the new projections. The forecasts, they explained, had been based on assumptions which everyone knew to be utterly bogus—assumptions which the two parties had directed budget authorities to make. (The bogus assumptions make the numbers look good which is, of course, excellent politics.) What was written about that year’s surplus projection? It was a "phantom," an "illusion," a "fantasy," a "dream," with the credibility of a "ponzi scheme." The two parties were waging a "whopper war," Allen wrote. Within the major American press corps, it was virtually impossible to find a dissent from this critique of the surplus projections. When Krugman referred to the "upward bias" in last year’s surplus numbers, he was referring to a generic problem which has been widely discussed for years. Based on his general ranting and clowning, of course, only a fool would think Sullivan knows this.

At any rate, here’s what Krugman was saying about last year’s "bullish" surplus projections. Due to bogus built-in assumptions, there was an "upward bias" in the numbers from the start. And as everyone knows, ten-year projections are intrinsically shaky, even when assumptions are made in good faith. But, instead of treating the surplus as a "guess," the Bush Bunch treated it as "hard fact"—and carved a large tax cut out of the "surplus fantasy." Given the Bush Admin-to-Enron analogy, the tax cut was "more or less" like the way Enron had "treated the capitalized value of hypothetical future gains as a current profit." Here’s the analogy, boys and girls: Enron treated hypothetical profits as if they were fact; the Bush Admin—with the aid of Congress—treated hypothetical surpluses in the same way.

None of that is very hard—unless you’re Andrew Sullivan. But, rushing to record his invaluable views at 42 seconds after 2:06 in the morning, Sullivan showed his typical, speed-induced incomprehension of all that he surveyed. This is surely our favorite part of the Brainy Brit’s heavy-lidded limning:

SULLIVAN: But wait a minute. For this analogy to even begin to work, wouldn’t…the Congress, including many Democrats, have to have been complicit?

Duh. Clearly, Krugman said that the Congress was complicit; he compared Congress to Enron’s audit committee, saying it "failed to exercise due diligence." Maybe it would have been a bit more clear if Sullivan had waited until 8:06 or even 9:06 before rushing to offer his latest prize rant. But then, Sullivan shows no sign of grasping Krugman’s analogy at all. Here is his full-bore complaint:

SULLIVAN: But wait a minute. For this analogy to even begin to work, wouldn’t the tax cut have to have been applied only to the members of the administration? And wouldn’t the Congress, including many Democrats, have to have been complicit in that? And wouldn’t the tax-payers, like Enron’s shareholders, have been fleeced rather than reimbursed? You have to wonder if Krugman has so bought his own demagoguery that for a split second he almost believed that.

No; yes; no; and you don’t "have to wonder" that at all. Not being completely delusional, Krugman isn’t claiming that the administration gave a tax cut to its own members and to nobody else. He is claiming that, just as Enron used hypothetical profits to serve the company’s various interests, so too the administration used the hypothetical surplus to serve its general interests. It really isn’t all that hard—unless you’re working, as Sullivan does, at high speed at 2:06 in the morning. Sullivan also utterly bungles Krugman’s argument about this year’s metaphorical "one-time charge." But did you expect more clarity from The Sandman over that one? This part of Krugman’s metaphor came in the second part of his piece. Our man’s eyelids were drooping ever lower by the time he arrived at that part.

Sullivan’s latest stupid rant calls for some serious scolding. First, his evolving devotion to instant judgment is an insult to the American public interest. Sadly, Sullivan has been praised for his speed-of-light work, but isn’t it clear that his devotion to speed is precisely his problem? Always saying at what precise second he has put his marvelous mots into print, Sullivan has managed to do the following in the past several weeks:

  1. He issued an ugly slander against a Clinton speech which he hadn’t yet bothered to read. The next day, of course—when he read the speech—he noted that he had been wrong in his slanders. Too late, loser. By the way, why do conservative cohorts who claim to care about character accept such repulsive, stupid conduct?
  2. He issued a bit of puzzling "weird science," offering sweeping theories about "red" and "blue" states based on one resident of each! Question: Just how stupid—just how utterly stupid—are we prepared to let our discourse be?
  3. He ranted and railed against that ol’ debbil, liberal bias (taking his standard, single-example approach). But oops! He failed to realize that the document which had him so ripped-n-riled hadn’t come from the press corps at all. It was, in point of fact, a press release, written by one Larry Klayman! Who on earth—except speedy Sullivan—ever makes such bizarro "mistakes?"

Let’s ask it again: Just how stupid—just how utterly stupid—are we prepared to let our discourse be? And tell us that we’re wrong when we say it: This boy simply just plain ain’t right.

Here at THE HOWLER, we’re deeply forgiving, so we’re prepared to believe that all this nonsense is a function of dumbness, ego and speed. But Sullivan—who waxes about America’s need for security—is deeply undermining its need for intelligence. Shouldn’t someone who confuses a press release for the work of the media stop to take a very deep breath—and maybe a few weeks’ vacation?

Next: More budget bullroar.

What might have been: There were serious questions in Krugman’s piece if Sullivan had wanted to challenge them. Here, for example, is what Krugman asked and said about the new Bush budget:

KRUGMAN: [T]he military buildup seems to have little to do with the actual threat, unless you think that Al Qaeda’s next move will be a frontal assault by several heavy armored divisions. We non-defense experts are a bit puzzled about why an attack by maniacs armed with box cutters justifies spending $15 billion on 70-ton artillery pieces, or developing three different advanced fighters (before Sept. 11 even administration officials suggested that this was too many). No politician hoping for re-election will dare to say it, but the administration’s new motto seems to be "Leave no defense contractor behind."

Since Sullivan’s an expert on all he surveys, he could have cleared up Krugman’s "non expert" questions. For example, why does "an attack by maniacs armed with box cutters justify spending $15 billion on 70-ton artillery pieces?" Is Krugman right when he says that the budget develops advanced fighters which the military recently didn’t want? Did September 11 change the world in such a way as to recommend these projects? In fact, Sullivan doesn’t have a clue about the answers to any of those questions. And since he couldn’t get his reply on line by his preferred 2:06:42, he instead decided to rant a bit, pretending to get all tangled up on the minutia of a simple analogy.

Readers, it’s all about speed—and it’s all about standards. Look back over the List of Three. Then ask yourselves why people who care about their country’s interests should tolerate this insulting mess.


The Daily update (2/7/02)

The emperor’s new link: The buffoonism simply never stops with Sullivan and his axis. At exactly six seconds past 6:27 on Tuesday night, Sullivan threw the ball to OpinionJournal’s James Taranto, somehow thinking that the scribe had "skewered Krugman" that day. To Sullivan, Taranto’s column was "more evidence that the Times columnist makes it up as he goes along." In fact, Taranto’s column was just more evidence that your discourse is run by naifs and poseurs. In a hard and dangerous world, by the way, that’s a national security problem.

Taranto thought that Krugman’s 1/22 column contradicted his Tuesday piece. Sorry. What Krugman said on Tuesday was perfectly apt; ten-year budget projections are intrinsically shaky—"no more than a guess," if you want to be mildly hyperbolic. What Krugman said two weeks ago didn’t contradict that in any way. In fact, this year’s surplus projections are much lower than last year’s projections, and everyone agrees on the reasons for that; the biggest reason for the reduction is the Bush tax cut. Let’s say it again, so even Sullivan gets it: Everyone agrees on that fact. This year’s 10-year projections are intrinsically shaky, just as last year’s projections were. But why are this year’s projections much lower? There is no dispute about that.

This matter, by the way, is about as complex as tying your shoes or scratching your keister. The fact that Sullivan doesn’t even understand this—and make no mistake, Sullivan doesn’t understand this—well, the fact that Sullivan doesn’t understand this means that the boy simply just plain ain’t right. In a rational world, he’d have washed out long ago. But this is not a rational world. Our suggestion: Next time you visit his hapless site, recall the emperor and that fine suit of clothes.