Now There's The Dishrag We Know

The other day, I managed to praise something written in the left-wing dishrag. Just to make certain that the world returns to its normal state of affairs, I wanted to post Don Luskin's latest takedown of Paul Krugman, a.k.a., America's favorite intellectually dishonest economist. Luskin's Krugman Truth Squad is always good reading, but especially in this case. Luskin notes Krugman's frustration with the fact that tax revenues have surged in response to the Bush tax cuts, and takes glee in hammering Krugman's lame assertions that the cuts are a disaster...

Krugman snarls,

The usual suspects on the right are already declaring victory over the deficit, and proclaiming vindication for the Laffer Curve — the claim that tax cuts pay for themselves, because they have such a miraculous effect on the economy that revenue actually goes up.

Count me — and anyone else who’s seen this chart — as among “the usual suspects.” And as long as we’re making cinematic allusions, let me add that I love the smell of tax revenues in the morning. Smells like victory.

The best Krugman can do is forecast that the explosion of revenues in the wake of the 2003 tax cuts won’t last. Why? For one thing, Krugman claims that “the economy as a whole is, if anything, doing worse than one would expect at this stage of an economic recovery.”

Again, consider reality. Since the recession bottom in the fourth quarter of 2001, real GDP has grown 12 percent. That beats the 11 percent growth over the comparable period in the previous economic recovery — the one that began on Bill Clinton’s watch, which Krugman once called an “economic miracle.”

Krugman also frets that the revenues flowing into the U.S. Treasury are the wrong kind. Not enough revenue growth, he complains, is coming from taxes “tied to the number of jobs and the average wage, such as payroll taxes and income taxes.”

Consider reality: Personal withheld tax revenues are up 7.3 percent compared to last year, and social insurance and retirement receipts are up 6.4 percent (source: U.S. Treasury). Yes, there’s been even greater growth in corporate tax revenues. But why are corporate revenues the wrong kind of revenues?

And yes, there’s been a surge in non-withheld personal income-tax revenues, which Krugman guesses is mostly from capital gains. Why are those the wrong kind of revenues? Perhaps because slashing the capital-gains tax rate was the signature of Bush’s 2003 cuts; a surge in those revenues proves just how vindicated the adherents of the Laffer curve really are.

Now, I'm not going to defend the deficit, because I think we could have an even lower one if the President had been more willing to wield the veto pen, or if the GOP Congress behaved the way a GOP Congress should. But Krugman's not attacking federal spending as much as he is the tax cuts -- as Luskin notes, Krugman wants to expand the size of the federal government to provide health care.

Krugman is a former Enron advisor. Maybe this explains the death of Enron.