Paul Krugman: Obama Ad Distorts My Column, He Should Retract It

A few days ago, the Obama campaign released an ad defending his opposition to Hillary Clinton's gas tax holiday. The Clinton campaign immediately challenged the sourcing of one the ad's claims. ABC's Jake Tapper reported:

The quote in the ad says of Clinton's gas tax vacation proposal, "experts say it will boost oil industry profits," and it cites the New York Times on April 28, referring to a column by Paul Krugman -- generally a columnist supportive of Senator Clinton's plans.

But the column in question -- and the quote -- have nothing to do with Clinton. They have to do with Sen. John McCain's gas tax holiday proposal -- which Krugman refers to as "a measure that would, in fact, do little to help consumers, although it would boost oil industry profits." ...

Krugman says that the "McCain gas tax plan is a giveaway to oil companies, disguised as a gift to consumers. Is the supply of gasoline really fixed? For this coming summer, it is. Refineries normally run flat out in the summer, the season of peak driving. Any elasticity in the supply comes earlier in the year, when refiners decide how much to put in inventories. The McCain/Clinton gas tax proposal comes too late for that. So it's Econ 101: the tax cut really goes to the oil companies."

And then this key sentence: "The Clinton twist is that she proposes paying for the revenue loss with an excess profits tax on oil companies. In one pocket, out the other. So it's pointless, not evil. But it is pointless, and disappointing."

So he suggests that Clinton's gas tax proposal will give revenues to oil companies then take them away with her "windfall profits."

Now Paul Krugman is speaking out. In a blog entry posted Monday, he writes:

I did not say that the Clinton proposal would increase oil industry profits. If the ad implies that I did, it should be retracted.

The Clinton proposal is financed by an excess profits tax. At worst, it sends money in a circle. In practice, it would probably reduce oil industry profits at least slightly, since the rise in the pre-tax price of gasoline probably wouldn't wipe out all of the tax cut.

I was very clear when I wrote about the Clinton proposal that while I didn't think it was good policy, it was not the same as McCain's, and relatively harmless. If the Obama people are suggesting otherwise, they're being deliberately dishonest.

That said, this whole point may be moot. The current version of the ad already seems to have been changed to remove the reference to Krugman's piece. Watch it:

Comments

[FrictionSoul]

Just hair splitting by crybaby Krugman. I like him but of late he's been too whiny. Gas Holiday Tax, no matter how you split it, boosts oil company profits. End of story. No retraction necessary save for Krugman's.

[geobushono]

Lawrence O'Donnell was on with Sam Seder yesterday, and reminded all of us that he (O'Donnell ) was working for the Clinton Whitehouse when Clinton imposed a 5c gas tax.......­Now the other clinton proposes to rollback the tax for 3 months....­.......
OK, 5c/gal X 15 years, vs. .43c/gal (tax holiday) X 3 months....­..........­..do the math.
Also, Larry reminded us that Stephanopolous was WH flack at the time the tax was initiated and he knows the entire history and yet didn't ask hrc about the apparent reversal of opinion...­.......
....and to the hrc supporters, donn't any of you try to tell us that bill was President and she was suffering in silence.

[CindyKay]

Again they fail to Mention that Hil-LIAR-Y & McINSANE do not have any Authority & can not Provide a Gas Tax Holiday , they also fail to mention that the Winfall tax will be Vetoed by the Dick-Tater & if by some Miracle thay did find a way to get a Gas tax Holiday The Gas Companies will RAISE their Prices to make up the difference .

Wake Up Folks , It means Nothing , they are actually Promising NOTHING. Gee.......­...Sounds like the same old same old to Me. Time for a Change Don't You Think ?

We need Honesty & Obama is the only one being Honest !

[factanonverba]

It's a tax you moron so even if prices rises there is still no tax on it.

Look there are alot of people for whom $30 a month is a big deal. That's who this is intended to help. I work with the homeless here in SF and I am working with the city to get them exempted from paying sales taxes on fast food purchases because for them $0.41 cents on a $5.00 dollar meal is a big deal. No one is saying that this gas tax holiday is a long-term solution, it is a short-break aimed to help people who are struggling to put food on the table or pay utilities. For some $30 is a god send. And if you are so gung ho about Obama's energy policy, he voted for the Bush Cheney Energy Bill. Clinton didn't. Talk about caving in to Washington special interests.

[Rose52]

The average would be $28-30 over a 3 month time period. Not a month.

[cinnysmom]

how far would you have to drive to save that money? I drive 20 miles a day some days and carpool about 2 times a week. My car gets 32 miles to the gallon, give or take a mile or so. I work 5 days a week. So my savings would be about 20.00 for 3 months, not even enough to change my oil!! So you tell me how that will put food on someones table. What maybe a loaf of bread and a gallon of milk, now that's for 3 months remember. And what will 30 or 20 dollars pay towards your utility bill in the middle of summer when people have their central air or window units on? Not much, it's a sham, and you know it. Say anything, do anything to get votes!!

[TheRealMacDaddy]

Hmmmm, most homeless people I know don't own a car. Guess the Gas Tax Holiday won't help them nohow.

As far as the "Cheney" Energy Bill, you should go to THOMAS and do a little research, ie. read the Bill and what was contained in it. The resaon Barack Obama voted for the Bill was, it INCREASED Federal Funding for Alternative Energy Sources such as Wind and Solar by higher levels than have ever been allocated in our history. It also funded "Clean-Coal" and Cellulosic Ethanol programs.

But who knows, maybe if Hillary wins the nomination she will donate a hefty chunk of her and Bill's $110,000,000 to a soup kitchen...­NOT

[CindyKay]

I'm the Moron.

Get Your Head Out Of Your A**. If the Oil Company raises Prices then You are Still Paying the Same & in Some cases More ! Absolutely No Svings Involved .

AI noticed You didn't bother to address the Fact That She Can't Do Anything Now Anyway ! She Has NO AUTHORITY just More LIES & You Have No Brains !

Wake The F Up. She Is an Arrogant Pandering Elitist LIAR who hasn't paid for or Pumped gas in over 20 Years , She can't even get herself Coffee at the Local Store , She is Responsible for promoting NAFTA & For Lying about Bosnia , She has done Nothing in Her 35 years of NON-EXPERIENCE & She Won't Do Anything NOW!!!!!!

[PAposter]

Mr. Krugman,

Both of the policies are Bullshit, whether or not you said in the article. You know it , and I know it. There will be no Windfall Tax on the Oil Companies (she voted against it), so Clinton's proposal is also a giveaway, at the expense of 300,00 workers. You know, those people Clinton is supposed to care so much about.

THE CLINTONS MAKE MILLIONS ON THEIR OIL INVESTMENTS.

Suck it up Krugman, you misinterpret issues all the time.

[pupbayer]

Things must be looking up for Clinton today. Fox News is really slamming her this morning.

[vippy]

First thing this morning FOX was again pounding Rev. Wright Issues so they are not
after Hillary. I have never seen them going after Hillary but steadily keeping the
Wright Story alive.

[kay]

It's May.

When do the Clinton-McCain free summer gas programs go into effect?

I'm trying to plan my holiday.

I'll check back.

[CindyKay]

Never. They have No Authority to do it !

[incontempt]

hold off on the sandwich's

[SCG]

Any possible wonderful effects won't appear until after the primary, when the snake oil wagon has packed up and moved on..... to greener pastures. With Krugman/Dowd covering the rear of the caravan.

[heather11483]

As soon as Bush gets the legislation! You know he can't WAIT to sign a law that'll tax his friends.

[bobdob]

Krugman should pull his head out of Hillary's ass. She's a loser and he knows it.

[JiminNC]

http://youtube.com/watch?v=L9qd-P2bIiY&watch_response - Here Krugman, maybe you will enjoy this explanation of Hillary's path to the White House :)

[spiritualized]

that was really good.
i just wish someone would compile a video of hillary and bill actually making the contradictory statements themselves.

[jbsouth]

Reverend Wright said Obama is a politician that will say what he has to. Take it from the man who knows him well. Rev. Wright.

[JiminNC]

http://youtube.com/watch?v=L9qd-P2bIiY&watch_response - Just for you!

[NoahVail]

Yeah! This is the sort of logic we need in the White House. This way, no matter how screwed up things get, we will be able to see the silver lining.

[msemper]

and what is hiilary and mccain with there 35 yrs of service? some people are so silly...

New rule....

silly people=Hil­lary/McCai­n supporter.­...

[paganmist]

hahahahaha.

You people are desperate when you'd first call the man every name in the book including a wackadoodle, and then do a 180 and say, "This man has the best judgement in the world! I believe every word he says. He's TOTALLY credible."

Of course he is, if he tells you what you want to hear.

Hypocrite.

[heather11483]

Hah, good point.

[spiritualized]

rev wright says it... hillary lives it.. you make the call.
hello: gas tax holiday!!!

[AAKAlan]

Krugman has become a ridiculous shill.

Isn't it sad to see a once-well-known and well-respected columnist turn into a propagandist for Hillary? It means his credibility is just gone. I cringe when I read his columns now.

Sign me: former fan!

[WoodyCPM]

I use to like his columns as well. Now, not so much. Now he seems more like a political hack.

[Wingit]

Does anyone really believe that George Bush would sign such a program into law? The Clinton's knew that this program woeuld never fly, but used it anyhow to pander for votes. Two weeks from now the MSM should be asking HRC where her great proposal stands in Congressand why she isn't fighting for its passage.

[GinnyinCO]

Obama was asked about the IL vote on MTP yesterday by Tim. I believe it was only one vote and they figured out in 6 months that it hadn't worked. Also, the state tax is different than federal - can't remember now why they are more likely to get a benefit than DC.

Anyway he ALSO pointed out that a) it wouldn't pass Congress in time or get signed by Bush. b)Hillary's windfall profits tax to make up the difference doesn't work because - she's already planned to use it for something else.

Sorry Paul. She just doesn't get budgeting.

[JadedAggie]

Gas tax removal works on the state level because it alters the Supply curve. If 5 states are all selling gas for $3.00, but in 4 of those states the $3.00 includes a $.10 gas tax you will shift supply to the state that is not levying the tax because you make $.10 more a gallon. As the supply shifts the prices begin to fall in that state until they reach equilibrium with the states around them.

[JadedAggie]

I should add that as supply shifts to your state the supply falls in the 4 other states and their prices rise. The rise in their prices is what prevents you from getting the full weight of the tax cut in your own state.

[incontempt]

and because the house and senate still has a rank infestation of republicans.

[heather11483]

Well, she said she won't listen to economists, so you really can't expect her to realise her plan makes no sense. I say give her a break. Though, considering her husband's an economics major, maybe that's why she doesn't listen to them. :/

[izAriver]

Maybe he's just competing with that kristol trash that the times gives space to.

[McFlipFlop]

What position did Hillary promise you Krugman? Guess that's going down the toilet with the rest of the Clinton promises.

[zull2]

Krugman, the main difference between McCain's proposal and Clinton's proposal is that Hillary claims she can pass some sort of windfall tax on the oil companies before summer starts.

Who exactly is she trying to kid? This is just an attempt to save face after impulsively jumping on McCain's gas tax cut strategy in an attempt to boost poll numbers...­only to get a backlash from most economists. Can she really pass a tax on oil companies through a Congress that cannot even stop an occupation with massive negative ratings? They can't even stop funding that occupation. They can't even pass marginally progressive legislation. Bush vetoes everything, and the Dems do not have enough of a majority to stop a filibuster. The Republicans are firmly in the pocket of the oil companies. They will risk their chances for being re-elected by blocking that tax bill. It is a complete joke.

The smartest thing is to back out of it now and stop talking about it. Offer another plan for immediate relief. Clinton is in over her head and realistically, there is NO difference between her plan and McCain's.