Paul Krugman's Nasty Habit

Paul Krugman's Nasty Habit

Poor Paul Krugman. He’s got a habit he can’t break. He blames Republicans every time something goes wrong. It started when Bush won Florida and never really stopped. Like most habits, it’s insidiously rewarding. It even won him a Nobel Prize. There’s nothing on his resume that screams “genius research.” Instead, he made it onto the anti-Bush affirmative action Nobel list. From Gore to El-Baradei to Obama to Pinter, criticizing or opposing W became a sort of “plus factor” for the Nobel board. Instead of writing about the economy, he just blasted the GOP twice a week and sure enough got his Nobel in 2007. After that, his habit has only gotten worse, the prize reinforcing his deepest impulses.  

Last Sunday, he said we are in a “Republican economy,” as it reflects GOP budgetary philosophy. He claims Obama has not been a big spender, an idea we demolished HERE, but let’s add two things. As a percentage of GDP, spending is at its highest since World War Two.  We never had a trillion dollar deficit before he took office, and will have four in a row since.  So he is not a “small spender,” either, Dr. K. 

La Krug next complains that the states have cut spending, so overall government spending is down, harming the recovery. I frankly doubt there is an overall reduction, considering the 4-plus trillion additional Federal dollars spent. But even if it were true, it would be because most states require balanced budgets.  If he advocates changing that, fine, but  this fact is only tangentially related to current Republican actions.

He notes that taxes are at historic lows, driving the deficit. He’s incorrect about the causal relationship here, and also neglects to point out that it was the President who negotiated the extension of the Bush tax cuts. Perhaps he can discuss it with him the next time they get together for a meeting of the Bash-Bush Club, I mean, the Nobel Prize Winners Annual Tea.  

Other than that, every GOP House budget and tax proposal save one, the modest JOBS act, has been rejected by the Senate.  Does this suggest Republican hegemony?  Come now, Paul.

He notes that T-Bills have record low yields, proving that  inflation concerns were wrong, and that thus we should have spent more. He forgets to mention that Europe’s meltdown offers fixed-income investors limited options, thus driving US debt rates lower. He’s one of those rare economists who quotes pricing without referring to market conditions.  Maybe the only economist. Hey, maybe he deserved the Nobel after all!  

Despite saying it was too small, he also fails to note that the Stimulus was by far the largest in history, and nonetheless did not achieve even the modest goal of keeping unemployment below 8 per cent.  Those darned facts.

His advice, after all this putative evidence, is for Obama to run against Congress and the GOP.  First-rate and original thinking. He says Obama’s team has “failed to highlight Republican obstruction,” but the President has been running against Congress since at least his “Teddy Roosevelt” speech in Kansas, in Dec. 2011, and maybe since last July, when he began the “Pass this Bill” mantra. So The Krug-Man is advising the President to do something he’s been doing every day for at least six months and maybe a year. 

What Krugman really feels is what Bob Schrum said the same day:  If Obama runs on his economic record, he’ll lose.  So he has to blame somebody else.  At least the President has shown some originality in this department, castigating commodity “speculators,”  European doldrums, the tsunami in Japan, offshored assets, the lack of shovel-ready jobs, the weather, etc.  But Dr. Scruffman has his habit, and thus his political solution:  Blame the Republicans.  Maybe there’s some kind of Nicoderm patch for this.