DAYS OF THE COIN: Columnist Krugman talks pork to the people!

FRIDAY, JANUARY 11, 2013

We liberals don’t know how to talk: Inexorably, your Daily Howler was churning out those results! Just as it always does!

At least, that’s how it seemed at the start of Paul Krugman’s important new column.

In a piece whose headline said “Coins Against Crazies,” Krugman was unveiling an odd idea—Obama should mint a magical coin if Congress won’t raise the debt limit. As he started, he seemed to be making all the appropriate moves:

KRUGMAN (1/11/13): So, have you heard the one about the trillion-dollar coin? It may sound like a joke. But if we aren’t ready to mint that coin or take some equivalent action, the joke will be on us—and a very sick joke it will be, too.

Let’s talk for a minute about the vile absurdity of the debt-ceiling confrontation.

Ignore the presence of the word “vile.” Krugman started by acknowledging the fact that minting a magical coin may sound absurd—perhaps a bit like a joke. And as he continued, he explained—in clear, simple prose—the way our budget process works:

KRUGMAN (continuing directly): Under the Constitution, fiscal decisions rest with Congress, which passes laws specifying tax rates and establishing spending programs. If the revenue brought in by those legally established tax rates falls short of the costs of those legally established programs, the Treasury Department normally borrows the difference.

Lately, revenue has fallen far short of spending, mainly because of the depressed state of the economy. If you don’t like this, there’s a simple remedy: demand that Congress raise taxes or cut back on spending. And if you’re frustrated by Congress’s failure to act, well, democracy means that you can’t always get what you want.

Time-bombs lurk inside that passage. But so far, Krugman’s exposition and tone seemed to make perfect sense.

Do we liberals have any idea how to talk—how to talk pork to the people? By light years, Krugman has been our most valuable journalist (MVJ) over the past dozen years. In today’s column, he proposes a peculiar idea—the minting of a magical coin.

Does Paul Krugman know how to explain this rather peculiar idea?

On balance, we’d have to say no. As Krugman continues, he starts to explain why we may have to mint that trillion-dollar piece of change—the coin which sounds a bit like a joke.

In the passage which follows, we’d have to say that Krugman starts talking over the head of the people, in the manner of those who will fail:

KRUGMAN: It’s crucial to understand three things about this situation. First, raising the debt ceiling wouldn’t grant the president any new powers; every dollar he spent would still have to be approved by Congress. Second, if the debt ceiling isn’t raised, the president will be forced to break the law, one way or another; either he borrows funds in defiance of Congress, or he fails to spend money Congress has told him to spend.

Finally, just consider the vileness of that G.O.P. threat. If we were to hit the debt ceiling, the U.S. government would end up defaulting on many of its obligations. This would have disastrous effects on financial markets, the economy, and our standing in the world. Yet Republicans are threatening to trigger this disaster unless they get spending cuts that they weren’t able to enact through normal, Constitutional means.

Our guess? Krugman just lost the crowd. Here’s why we say that:

In that passage, Krugman attempts to explain why the GOP’s threatened conduct is "vile." But he utterly fails to do so.

As everyone knows, this country has endured about three hundred budget crises in the past several years. We’ve bumped into limits and gone over cliffs in dizzying, mindless succession.

No one with an ounce of sense is still paying attention to the various cries of wolf which emerge from these flirtations with alleged disaster. In that passage, Krugman utterly fails to tell the people why this latest crisis could turn out to be “vile”—truly bad.

Are there any words in that passage which tells us why this cry of wolf should be heeded? The word “default” appears. But most people have no idea what that word means—and if you watch the Fox News Channel, you have been hearing what follows.

Guest host John Roberts spoke with Brit Hume on last weekend’s Fox News Sunday:

ROBERTS (1/6/13): Brit, when you look at the potential effects of going past the debt ceiling and defaulting on our loans, it's the difference between peering over the edge of the Grand Canyon versus peering over the edge of your bed with the fiscal cliff deal. I mean, how much is at risk here if they don't get this done?

HUME: Senator Cruz was right. There's no danger of default on the debt.

ROBERTS: Despite all the warnings?

HUME: We hit the debt ceiling, we can't borrow anymore. Tax receipts continue to flow. They cover about 60 percent of the federal spending. Debt service is about 6 percent or 7 percent. So there'd be plenty of money, as Senator Cruz pointed out, to cover the debt service.

So what you'll hear, John, in the weeks ahead, is that we'll be defaulting on our obligations. That doesn't—that's not reference to the kind of default you'd have if you didn't make payments on the national debt. That means you can't pay for all federal spending.

Question: How many liberals know how to explain why Hume's statement is wrong? Indeed, while we're at it:

Is Hume's statement wrong?

“There would be, no mistake, major, major disruptions,” Hume said as he continued. “But we need to be careful about the use of the term ‘default’ because it's—it really is scare talk.”

Is is true? is our use of the term “default” just a bit of scare talk? Before he was done, Hume seemed to suggest that the GOP shouldn’t take this path. (“I think a lot of Republicans have to recognize, if you control one house of the Congress, you can't really wag the dog from that position...What they need to do is win some elections.”)

How odd! When he said that Republicans should win some elections, Hume almost sounded like Krugman! But millions of people are being told that we won’t go into true “default” if the debt limit stays where it is—and millions more have no idea what the term “default” means.

This morning, Krugman breezed right past that point—the point at which he had to explain why the other team’s proposal is “crazy” and “vile.” Instead, he rushed ahead to the passage which follows.

In this passage, he may have shown a classic type of bad judgment:

KRUGMAN (continuing directly from above): Republicans go wild at this analogy, but it’s unavoidable. This is exactly like someone walking into a crowded room, announcing that he has a bomb strapped to his chest, and threatening to set that bomb off unless his demands are met.

Which brings us to the coin.

Having failed to explain why their conduct is vile, Krugman compared the other team to a bunch of mad bombers—the “Crazies” of his headline.

He didn’t say the other team’s threat was like threatening people with bombs. He said it’s exactly like doing that! But he never explained what will occur if the bomb goes off.

Is the threatened refusal to raise the debt limit exactly like threatening people with bombs? That is a matter of judgment. We’ll guess that many people will judge that the answer is no, especially given Krugman’s sad attempt to explain the consequences if the threat is enacted.

Can we talk? Krugman doesn’t seem to know that we the people don’t know what he’s talking about—just as he says he didn’t know, as late as 1999, that the two parties are different. Krugman has long been our most valuable journalist. But in this case, our MVJ doesn’t seem to have any idea how voters may view this matter.

How may voters see this matter? Let’s talk pork about the people:

After reading Krugman’s column, many people still won't understand why this crisis is more serious than the other “crises” of recent years. They won’t understand what “defaulting” means. They won’t understand why the prospect should scare them.

They won’t understand what Krugman means when he says that this action would have “disastrous effects on financial markets, the economy, and our standing in the world.” They will understand what it means to compare the other team to a group of mad bombers—to “Crazies.”

They will understand that clump of language—and a great many unaligned voters won’t like it.

Most of those people won’t read Krugman’s column line by line. But if they did, they would find time-bombs all through his prose—time-bombs Krugman didn’t spot as he composed his argument.

Where are the time-bombs in Krugman’s prose? For starters, let’s return to that highlighted passage in just his fourth paragraph:

KRUGMAN: Under the Constitution, fiscal decisions rest with Congress, which passes laws specifying tax rates and establishing spending programs. If the revenue brought in by those legally established tax rates falls short of the costs of those legally established programs, the Treasury Department normally borrows the difference.

Lately, revenue has fallen far short of spending, mainly because of the depressed state of the economy. If you don’t like this, there’s a simple remedy: demand that Congress raise taxes or cut back on spending. And if you’re frustrated by Congress’s failure to act, well, democracy means that you can’t always get what you want.

Why wouldn’t voters reverse Krugman’s logic? Congress is empowered to keep the debt limit where it is. If Paul Krugman doesn’t like it, democracy means that he can’t always get what he wants!

And uh-oh! Voters who don’t understand the urgency of this latest crisis might react in a similar way to Krugman’s next paragraph:

KRUGMAN (continuing directly): Where does the debt ceiling fit into all this? Actually, it doesn’t. Since Congress already determines revenue and spending, and hence the amount the Treasury needs to borrow, we shouldn’t need another vote empowering that borrowing. But for historical reasons any increase in federal debt must be approved by yet another vote. And now Republicans in the House are threatening to deny that approval unless President Obama makes major policy concessions.

It’s true. Based on elementary logic, we don’t really need another vote to empower the additional borrowing. But our laws permit and require that vote—and for people who have become convinced that debt is an overpowering problem, it may seem like serendipity that Congress gets to reconsider its past actions this way.

We liberals know how to talk to ourselves. But do we know how to talk to others? Do we know how to talk to the bulk of the American people?

The following passage makes sense to us. Will it make sense to others?

KRUGMAN: It’s crucial to understand three things about this situation. First, raising the debt ceiling wouldn’t grant the president any new powers; every dollar he spent would still have to be approved by Congress. Second, if the debt ceiling isn’t raised, the president will be forced to break the law, one way or another; either he borrows funds in defiance of Congress, or he fails to spend money Congress has told him to spend.

In the past week, we liberals have been selling that argument to each other—but does that argument really make sense? Rather plainly, if Congress refuses to raise the debt limit, it will be telling Obama not to spend all that money, the money earlier Congresses called for.

Would Obama be breaking the law if he follows that new mandate? On the surface, we’d have to say no—although this has made perfect sense to us as we’ve talked to each other all week.

Why is this threat unlike all other threats? Krugman gigantically fails to explain. But he name-calls the opposition in a way all voters will recognize. He then makes a proposal which, he admits, sounds a great deal like a joke!

What do we liberals think of the people? Quite often, we’re all too happy to tell you! As we’re happy to explain, we think they’re racists—and we think they’re authoritarians. We think the voters in North Dakota are part of the “neo-Confederacy.” (You know? The voters who just elected a personable young woman Democrat to the United States senate?)

We think their limbic brains don’t work. We run videotape of a young woman who didn’t go to Stanford and we tell dick jokes at her expense—as we pretend that we’re embarrassed by what we keep choosing to do.

We think that twenty percent of the people are just like John Wilkes Booth!

Can we talk a bit of Tom turkey for once? We liberals aren’t any nicer than anyone else—and we’re often dumbly tribal.

Paul Krugman has been a light to the world—and he doesn’t seem to know how to talk to the people! Most people won’t know what he’s talking about—until all that name-calling starts.