Think Again: It’s Not Really ‘Krugman vs. the World’
SOURCE: AP/ Fredrik Persson
Economist and columnist Paul Krugman appeared on MSNBC’s “Morning Joe” last week with show co-hosts Joe Scarborough and Mika Brzezinski, as well as Council on Foreign Relations President Richard Haass and former Pennsylvania Gov. Ed Rendell (D) to discuss the deficit. The five of them spent more than 20 minutes on the issue—quite an achievement for a cable news program—and Krugman found himself quadruple-teamed the entire time.
Krugman argued that America’s long-term deficit is not the problem that America’s political class insists it is, especially with regard to Medicare and Medicaid. Far more significant, he argued, is the challenge of “job creation,” which is currently thwarting our economic recovery from reaching millions of middle-class Americans who continue to suffer the effects of the 2008 financial crisis.
It’s not that Krugman opposed efforts to reduce the debt per se. Rather, he explained, “I’d like to see us paying down the debt but not at the cost depressing the economy right now.” Regarding Medicare and Medicaid, he added that, “Health care costs have slowed a lot lately,” and that the long-term financing problems facing these programs—as America ages, and more and more people depend on them—might not appear as critical when the time comes to deal with them.
All of the other participants in the discussion objected to his arguments, but none were able to elaborate. Speaking of the extension of Bush tax cuts, Scarborough opined, “It seems like we’ve thrown everything but the kitchen sink at the economy,” without much success. His view appeared to be that there was really no point in trying to do more—but, to be fair, it’s not clear whether he had any point at all.
Haass said he thought the economy could be stimulated through “immigration, free trade, change the corporate tax rate”—all favorites of corporate lobbyists but questionable as to their ability to create jobs. There was also much talk of “Simpson-Bowles”—the deficit reduction plan put forth by the president’s bipartisan fiscal commission, co-chaired by former Sen. Alan Simpson (R-WY) and former White House Chief of Staff Erskine Bowles—though Krugman pointed out that not even all of the members of that commission had endorsed the plan’s recommendations.
(Recall, as political writer Alex Pareene did, that at the 2012 Republican National Convention, Republican vice-presidential candidate Rep. Paul Ryan (R-WI) “opened his acceptance speech by nonsensically blaming the president for a plant closing that happened before he took office and went on to blast Obama for failing to support a ‘centrist’ deficit-reduction proposal that Ryan himself had personally torpedoed in the House of Representatives.” Republican presidential candidate and former Massachusetts Gov. Mitt Romney used the same tactic during the first presidential debate.)
Brzezinski made the point that ignoring the debt was akin to ignoring climate change, but Krugman explained that this was “a really bad analogy,” given the fact that every year we are significantly increasing horrific effects of greenhouse gases—effects that cannot be reversed—while, in fact, our fiscal problems may very well improve over time. He went on to say that, in any case, the fiscal issues facing our nation are a second-order problem when compared to the cost that careless cuts in social and entitlement spending could do to our fragile economic recovery.
Given the lack of substance with which Krugman’s arguments were met, one would have concluded that the four members of Scarborough’s panel were overmatched in their discussion. Krugman had facts, figures, and a deep understanding of economic theory, evidenced by his many decades of practice as both an economics professor and a government advisor, including a post as senior international economist for the President’s Council of Economic Advisers under former President Ronald Reagan, and his Nobel Memorial Prize in economic sciences. These are just a few of the many reasons The Economist labeled him “the most celebrated economist of his generation.”
His critics, in the discussion, could not compete. And while one might be sympathetic to the difficulty that most people have in calling up complicated facts and economic theories on the spot—especially when faced with a bevy of television cameras—one cannot help but be depressed by Scarborough’s next day follow-up on Politico comically titled “Paul Krugman vs. the World.”
According to Scarborough, in the face of Krugman’s arguments, “maintaining calm was not … easy for Council on Foreign Relations president Richard Haass, who agrees with former Joint Chief chairman Michael Mullen, that long-term debt poses the greatest threat to America’s national security.” They both agree, moreover, with “former Clinton chief of staff Erskine Bowles … that entitlements and debt are the most pressing challenges we face as a country over the next few decades.”
Scarborough also notes:
You can add my liberal co-host, Mika Brzezinski, to that group. Mika let out a gasp when Mr. Krugman suggested Medicare and Medicaid shortfalls should be ignored. She compared Krugman’s “head-in-the-sand” approach to the one taken by climate change deniers.
Krugman’s response to Brzezinski, noted above, inspired a “spirited email from former Treasury official and ‘Morning Joe’ regular Steve Rattner in defense of Mika’s analogy.”
What Scarborough fails to note in this follow-up is that none of the people he mentions above are economists, much less economists even close to Krugman’s stature. Indeed, it’s hard to see what training or expertise that a talk-show host feels qualified him or her to argue at all, “liberal” or not. The two people Scarborough cited with direct experience in economic policy in government—Erskine Bowles and Steven Rattner—are also deeply connected to the worlds of banking and corporate finance, both of which are interested in keeping profits where they are rather than tackling job losses, purchasing power, and housing security experienced by the middle class in recent decades via Keynesian intervention in the economy. In other words, they are operating on the basis of ideology—one that may be widely shared by the corporate-funded political elite in Washington, but not one that has demonstrated itself to be helpful to the hundreds of millions of Americans who have failed to see much in the way of benefits since our economic recovery began in 2009.
As Katrina vanden Heuvel pointed out in The Washington Post:
More than 20 million people are in need of full-time work—and single women, minorities and the young have fared the worst. Wages are sinking. The top 1 percent captured fully 93 percent of the nation’s income growth coming out of the Great Recession in 2010. The young find good jobs scarce, even as they carry record student loan debts, now higher than credit card debt.
In a reply to Scarborough on his New York Times blog, Krugman employed the term “incestuous amplification,” which, as he writes, happens “when a closed group of people repeat the same things to each other—and when accepting the group’s preconceptions itself becomes a necessary ticket to being in the in-group.” As to Scarborough’s belief that he and his friends have “the world” on their side, Krugman counters:
As Joe Weisenthal points out, the reality is that among those who have expressed views very similar to mine are the chief economist of Goldman Sachs; the former Treasury secretary and head of the National Economic Council; the former deputy chairman of the Federal Reserve; and the economics editor of the Financial Times.
In a better world, the people in charge of making policy would examine the evidence—and the qualifications of those making the arguments based on such evidence—and allow the best alternative to emerge. Alas, that is not the world in which we live. Instead, as Krugman accurately notes, “all the Very Serious People have committed their reputations so thoroughly to the official doctrine that they almost literally can’t hear any contrary evidence.”
This is hardly a new phenomenon. We saw it, as Krugman notes, in the run-up to America’s disastrous war in Iraq. And we saw it more recently—and sadly, all too similarly—in Scarborough’s recent pre-election attack on statistician and election forecaster Nate Silver. In that case, as in this one, he ignored all the evidence that lay behind Silver’s deeply detailed mathematical calculations with the casual, uninformed attacks on Silver such as: “Anybody that thinks that this race is anything but a tossup right now is such an ideologue, they should be kept away from typewriters, computers, laptops and microphones for the next 10 days, because they’re jokes.” Sadly, it requires less a degree of knowledge about any given political issue than a feel for political fashions in insider Washington and the media.
Alas, the joke is almost certainly on us. Krugman may be the man with the facts and the evidence on his side, but he is not, to borrow a phrase from President Reagan, the guy who paid for the microphone.
Eric Alterman is a Senior Fellow at the Center for American Progress and a CUNY distinguished professor of English and journalism at Brooklyn College. He is also “The Liberal Media” columnist for The Nation. His most recent book is The Cause: The Fight for American Liberalism from Franklin Roosevelt to Barack Obama.
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