Krugmans miraculous deception on Texas
By Philip Klein
Ross Douthat came to the defense of Texass economic performance under Gov. Rick Perry today and Paul Krugman was quick to fire back. But Krugmans 3-point assault misses three times. Krugmans first two arguments frame the debate in maximalist terms to lower the threshold he has to meet as a critic.
First the debate over the alleged Texas miracle is not over whether Texas is in fact a miserable failure" Krugman writes. All the critics need to show is that Texas is not in fact the miracle Perry claims. And it isnt."
To start its pretty absurd to set up a standard wherein critics only need to show that Texass economic performance cant be likened to an act of divine intervention. I could be wrong but based on the searching Ive done I can find no evidence that Perry has actually described his record as a miracle." Perry certainly didnt do so in his presidential announcement speech. He did point out that
Since June of 2009 Texas is responsible for more than 40 percent of all of the new jobs created in America."
But the actual references to the miracle" I do come across tend to be from writers attempting to expose it as a myth. Writers in fact like Krugman.
Second defenders of the miracle claims seem remarkably unwilling to confront the key argument" Krugman laments. People like me point out that Texas has not in fact been immune to the recession."
However nobody from what I can tell is arguing that Texas has been immune from the nations economic downturn. The argument has been that
the state has weathered the recession better than most states. And thats backed up by the facts.
Krugmans third argument is that even though Texass median wages are higher than the national average theyre lower than the blue states of Massachusetts New Jersey New York and California. Yet the chart Krugman created to illustrate his point is deceptive.
It starts at $10 as its base rather than $0 a trick that makes it visually appear that wages are twice as high in Massachusetts when they are in fact just 33 percent higher than in Texas. More significantly Krugman doesnt adjust for the fact that the cost of living is substantially lower in Texas which means each dollar has more actual purchasing power.
To give you an idea I checked out the cost of living data from the Missouri Economic Research and Information Center a division of the states department of economic development. Texas ranked 2nd behind Oklahoma as the lowest cost state for the second quarter of 2011 when looking at the composite cost index for groceries housing utilities transportation health care and other miscellaneous goods and services."
By contrast New Jersey was 44th California was 45th New York was 46th and Massachusetts was 49th. That is the four states Krugman cites are not only more expensive than Texas but among the costliest states in the country.
See the chart below with the numbers indexed to 100.
Putting the index figures into percentage terms the data suggests for example that even though Massachusettss median wages are 33 percent higher than in Texas its residents have to shell out 55 percent more for essential goods.
In an update Krugman snipes Yes I know about the cost of living. Read my actual argument."
But his link back to his original piece doesnt get him off the hook for trying to dishonestly pass off wage data without context.
