The Debt Hostage Crisis And Paul Krugman’s Political Naiveté
It seems like people lose track of reality pretty easily these days. The reason why we were forced into negotiating with the terrorist Republicans is that they threatened to run our economy off a cliff — unless President Obama acquiesced to their demands. It truly was a hostage situation and Republicans pretty much admitted it. People lost sight of that fact throughout the process and somehow morphed it into a budget fight, as if President Obama welcomed it. This whole mess was forced on him and there was no easy way out.
What were President Obama’s options? From what I know about it, he could either deal with the Republicans and try to get a “compromise” from the hostage takers or he could invoke the 14th Amendment to the constitution and raise it himself. The 14th Amendment option has some issues attached to it, however…
Obama would be greatly extending his executive powers and setting a new precedent, which would have a host of potential ramifications. Furthermore, Obama’s administration officials do not believe that the fourteenth amendment grants the president that power, and elsewhere the Constitution grants Congress the sole authority over borrowing money.
Now I know that isn’t a concern to those who have a vision of the President as a dictator, which ironically comes from the left these days, but thankfully President Obama understands the ramifications of taking that drastic step. Personally, I wish he had done it, but I’m extreme.
There is a third option as well. The President could have let the U.S. AND world economy crash into the ground, pointing fingers the entire time at those dastardly Republicans and repeating “it’s their fault, it’s their fault” — as the country scratched its collective head and wondered why the President didn’t stop it. I don’t think that was ever considered as an option, but it certainly has been hanging over the situation like a stench. I’m glad our president has the best interests of all people in mind when making big decisions like this.
When I read and hear the people on the left screaming about “caving” and “folding” and all sorts of other dramatic characterizations, I can’t help but wonder how they would have handled the negotiations with the hostage takers. They never seem to say how the president should have done it differently, but they speak with such confidence that what the President did was wrong. As you’ll see below, Paul Krugman makes an attempt at answering that question. I take some credit for asking him in the comments of his blog.
The critics on the left frequently say things like “he should tell them” or ” he needs to be more forceful” or “he should just demand that they…” and all of those statements say to me that these people have no fucking clue. “Saying” and “demanding” things is all well and good, but what happens when the person you are making the demands to has fingers in their ears, mumbling “I can’t hear you, na na na na, na”. Then what?
Paul Krugman provides a perfect example of the irrationality of many on the left when it comes to politics. I respect Paul Krugman for his Keynesian economic ideas, but as a political pundit, not so much. Over the last few years, weeks, and days — he has proven to me that his skills in the ways of Washington politics are less than stellar. Here are some snippets from recent blog posts by Krugman. In this one, he embraces the wisdom of Bruce Bartlett, hmmmm….
No time to do any original posting tonight. But for those who missed the first time I linked to it, here’s Bruce Bartlett — an economic adviser to Ronald Reagan — explaining why Obama is indeed a moderate conservative in practical terms.
When you follow the link, Bartlett attempts to force the current situation into a historical model, playing the game of “historical false equivalencies” that many pundits like to do, especially with previous elections from 30 or 40 years ago. Krugman, in a later post, excerpted a large portion of Bartlett’s “wisdom”. The interesting thing to me about Krugman’s embrace of Bruce Bartlett is that Bartlett was one of the architects of Ronald Reagan’s supply-side economics. I shit you not. Bartlett even wrote the book “Reaganomics: Supply-Side Economics in Action” and co-authored the book “The Supply-Side Solution“. I wonder if Paul Krugman embraces supply-side economics now as well, or does he only pick and choose Bartlett’s wisdom as needed. I’m sure the fact that Bartlett mentioned Krugman at the end of his article had nothing to do with Paul linking to his piece.
As I was scanning through Krugman’s posts, I came across another that just smacked of irony. It was the day after he embraced Bruce Bartlett’s ideas about President Obama. In this post, he takes on some Reagan economists. It’s kind of weird that he didn’t mention Bartlett in that post…
First Michael Boskin, now John Taylor: there seems be an epidemic of politically conservative economists who used to be technically competent repeating the obviously wrong falsehood that Reagan ushered in an era of “unprecedented” growth.
You can imagine my surprise when I read that last bit after having just read 3 posts where Krugman goes to great lengths to quote and use to his political ends — one of the people responsible for creating Reagan’s economic disaster. In one day, Krugman is using a Reagan economist for his own political ends and the next he is excoriating them.
I found another post from Mr. Krugman where he uses the “denial” approach — the “I don’t believe them and you can’t make me” approach. Krugman was making a half-hearted attempt to respond to people like me who have been asking him how he would have done it differently. Here is part of his response…(emphasis mine)
But the answer is clear: I would have made a statement declaring that giving in to this kind of blackmail would constitute a violation of my oath of office, and that my lawyers, on careful reflection, have determined that there are several legal options that allow me to ignore this extortionate demand.
Now, the Obama people say that this wasn’t actually an option. Well, I hate to say this, but I don’t believe them.
Wow, you have to give him credit for being honest in just denying ideas that don’t fit with his narrative — just come out and say “I don’t believe them.” And what are those several options that “my lawyers, on careful reflection” have come up with?
And then the other day, Paul Krugman goes even further with his denial and in my opinion, damaged his reputation as an economist as well as that of a political pundit. I’m not sure why I should listen to anything he says after reading this next post.
I guess I have to be explicit at this point: yes, I would vote no.
What about the catastrophe that would result? Several thoughts.
Second, the people who claim that terrible things would immediately happen in the markets also claimed that there would be a big relief rally once a deal was struck. Not so much: the Dow is down 121 right now.
Did you catch that, we shouldn’t trust those people who claimed there would be a big relief rally. But remember, we should listen to Bruce Bartlett, one of the architects of supply-side economics. Paul should at least be consistent with his dismissal of ideas from people who were wrong before. There’s more…
Third, the idea that a temporary disruption would permanently damage faith in US institutions now seems moot; if you haven’t already lost faith in US institutions, you’re not paying attention.
I suppose he is trying to argue that the damage is already done, so fuck it, let’s go all out and default. What the hell, people have already lost faith in US institutions so we might just as well confirm it for them. Great idea, Paul. That may work for your snarky political views, but I doubt that it would do our economy much good.
Deaniac83 at The People’s View has a most excellent analysis of the entire debt deal, where he takes on Krugman as well for his political naiveté. Go read the entire analysis, I think you will be surprised at exactly what was in the deal that you aren’t hearing anywhere else. I loved these two paragraphs…
Read that again. That’s what the media and the whiners are not telling you. The President agreed to no Medicare benefit cuts in the “trigger.” None. The cuts, if they automatically happen, would go to whom? The providers. Who are these providers? Doctors, hospitals, clinics, Medical device makers, service providers, drug manufacturers. Who do you think they mostly donate to in the political season? The entire pressure on these Medicare cuts are on the private medical (and pharmaceutical) industry! So let’s ask that question again. The Medicare “trigger” is a trigger really from whom again? As a matter of fact, both big triggers (Defense and Medicare provider cuts) are triggers for the Republicans!
So while Krugman is correct in pointing out that the Teabaggers will hold everything and its mother hostage in order to get what they want, what they want is already being taken away from them: they will not be able to threaten the deficit reduction group with looming cuts in Social Security, or programs for the poor, civilian or military retirement, or Medicaid, or even Medicare benefits. Instead, if the Republicans do not let the deficit committee act in a manner commensurate with the President’s demand that it include tax revenue increases, they will be setting up big defense cuts and setting themselves up for dry campaign coffers on donations from the medical and pharmaceutical industries.
Finally, I feel compelled to explain that Paul Krugman has never liked President Obama, even before he was elected. Steve Benen sums up Krugman’s dislike for President Obama in this post about Newt Gingrich calling the Obama administration “a Paul Krugman presidency”…
Second, does Newt Gingrich ever actually read Paul Krugman? I don’t know the Nobel laureate personally, but reading his columns, blog, and Twitter feed, and watching his media appearances, I’m left with the impression that Krugman loathes President Obama. He made little effort to hide his aversion to Obama as a candidate in 2007 and 2008, and has been quite candid in the years since about his near-constant frustrations with this White House. At times, I get the sense that Krugman’s take on this presidency borders on contempt.
As I was looking back at Krugman’s opinions on the last Democratic president, Bill Clinton, I found that although he wasn’t a huge fan of some of Clinton’s policies, it didn’t seem to rise to the level of contempt. I’ll let you speculate on why that might be.