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

[aperezfl]

The Obama camp has made clear that they make no distinction between McCain and Clinton's gas tax holidays. Krugman's defense relies on the distinction between the two. But Clinton is never going to get the windfall profits tax (nor the gas tax scam) passed, so why should it matter?

[lorla]

Oh my goodness, Obama misrepresented Clinton's supporter (even though he said the holiday was no good).
They would have NEVER done that to him...as far as I know.
Shame on you Barack Obama.

[iPolitics]

Before Bush's two terms, I was able to drive my Hummer with support the troops sticker without worry.

[civitat]

I used to respect Krugman but he has completely twisted his views over the last two years to support Clinton whenever he can. It was extraordinary to see him admit that there was *anything* wrong with Clinton's gas tax holiday! I know very few educated people--whether they support Clinton, McCain, or Obama--who respect Krugman any more.