Krugman enters the sandbox on Morning Joe!

TUESDAY, JANUARY 29, 2013

It’s hard for the gang to stay calm: Yesterday morning, Paul Krugman did a 21-minute segment on Morning Joe. To watch the full segment, click this.

There were no commercial breaks. Eight hours later, Joe Scarborough offered his thoughts in Politico under this headline: “Paul Krugman vs. the world.”

It may have seemed that way to someone watching the lengthy segment. Former governor Ed Rendell took a fairly balanced view. But by the end, it became quite clear—the rest of the Morning Joe gang weren’t buying Paul Krugman’s crazy outlook.

How thoroughly was Krugman rejected? According to Scarborough, several pundits found it hard to stay calm in the face of Krugman's wild views!

As he started his column, Scarborough burlesqued Krugman’s stance:
SCARBOROUGH (1/28/13): Nobel Prize-winning economist Paul Krugman came on “Morning Joe” Monday to discuss his latest book and the state of affairs in Washington. Mr. Krugman's view is that Americans would be better off if its government ran deeper deficits and ignored its long-term debt. That, of course, runs counter to conventional wisdom across the Western world, which is exactly why the New York Times columnist believes Spain and Great Britain are suffering through endless recessions.
Does Krugman actually think we should “ignore our long-term debt?” We’ve seen him say very different things in more civilized surroundings—on Charlie Rose, for example. Soon, Scarborough explained how hard it was for the gang to stay calm as Krugman voiced his views:
SCARBOROUGH (continuing directly): His argument also runs counter to what I have been saying in Congress and in the media since 1994...But most of our viewers did not tune in to hear me talk over the Nobel Prize winner. They tuned in to hear Paul Krugman. So I did my best to give him space.

But maintaining calm was not as 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. Richard took exception to the suggestion that deficits don't matter and that long-term debt can be pushed to the side for years to come. Mr. Haass, Admiral Mullen and former Clinton chief of staff Erskine Bowles all believe that entitlements and debt are the most pressing challenges we face as a country over the next few decades.

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.
In fairness, Brzezinski didn’t actually use the term “head in the sand” and her alleged gasp wasn’t audible. But on this gender throwback program, Brzezinski has always been willing to serve as a foil for her dominant male co-host.

In this case, he jacked her reaction beyond what it was, without explaining why we should think that Mika is equipped to gasp at, and thereby refute, a Nobel-winning economist. (We certainly wouldn’t be.) In fairness, Brzezinski's interjection near the end of the segment was foolish on its own terms, without her co-host's embellishments.

Let’s return to Joe’s picture:

It wasn’t easy for the gang to stay calm when Krugman began to expound—and Mika even let out a gasp! Add to this childish crayon drawing the following words from an angry Steve Rattner and it’s time for the children to take their picture home to Mommy.

Ignore the initial sentence structure. We added some punctuation:
SCARBOROUGH: [Krugman’s] response drew a spirited email from former Treasury official and “Morning Joe” regular Steve Rattner in defense of Mika's analogy, who wrote the following:

“We are putting millions of tons of carbon in the air every day; we are also adding billions of dollars to our future entitlement obligations every day. We are borrowing (stealing?) from our children to pay far more in benefits to seniors than we are paying into the system.

“We have something like $60 trillion in unfunded liabilities to Medicare and Social Security. Paul Krugman would like us to just wait until those programs run out of money, at which point those unfunded liabilities would be just that much larger."
We're sorry, but Social Security is never going to “run out of money,” at least not in the way the term implies to the average person. But so what? As early as 1994, such presentations had famously convinced the bulk of younger Americans that they were more likely to see a UFO than to draw Social Security benefits. People like Rattner have been hustling such people every single day since.

Scarborough’s drawing is wondrously childish—and even after all these years, Rattner won’t restrict himself to language which doesn’t mislead. Meanwhile, very few people who watched that segment really understood what the combatants were claiming.

In short, Scarborough failed to create a coherent discussion, then fed Politico this.

(For Greg Sargent’s reaction, click here.)

17 comments:

  1. What really aggravated me was the discussion of Krugman's views on this morning's show, where Krugman wasn't there to defend or explain them.

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  2. Still think Krugman could've done a better job making his case. For instance, a couple of things come to mind.

    He failed to make an adequate distinction between "short-term" and "long-term" debt. Economists understand what that means. Presumably pundits do, too. Viewers may not.

    Relatedly, Krugman argued that we needn't worry about long-term debt and entitlements right now, since the state of the economy is so important right now. Of course this is true, but it's a subtle point. This plays into the portrait of foolish egghead professorial Liberals who lack the rectitude of ordinary folks, who have the wisdom to be concerned about the future.

    Krugman defends this position by saying that, even if it were desirable not only to deal with short-term unemployment but also grapple with long-term entitlement reform, we cannot rely on politicians to do more than one thing at a time, and therefore the current situation takes precedent. While no doubt true, this also happens to be a very cynical observation. That enables Joe, Mika, and their guests to take "the high road" and exhort us to expect more from our politicians. I would not fault the average viewer from favoring a more hopeful, optimistic outlook on this one.

    There were missed opportunities, as well.

    For instance, several of the guests repeatedly invoked the names "Simpson" and "Bowles" as a talisman to ward off criticism of deficit-cutting. Aside from a brief "two guys" swipe, Krugman didn't confront this head-on and ask, "Who are Simpson and Bowles? Why do you keep saying their names as if they have all the answers? What are THEIR qualifications?", etc.

    There are other problems, as well. My point is that, while Paul Krugman is of course absolutely correct on the policy and the substance, by my lights he fails to understand how he sounds and how the game must be played if we want to have any hope of winning on the policy. People like Joe, Mika, and Ed get this. Too often, we Liberals do not.

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    1. Something else Krugman missed:

      One of the guests (I forget his name) said something like, "Your projections for entitlements depend on a rosy picture of the economy, growing at a healthy clip. But what if that is too optimistic?"

      Well...

      IIRC, Krugman's (and Dean Baker's, for instance) projections for Social Security and Medicare are none other than those of their Trustees and of the CMB, whose baseline scenarios project the economy to grow in the future like it has in the past. That's a very reasonable expectation, and if things go otherwise, that demands the kind of structural defect to the economy that Krugman points out just isn't evident. BUT, more important is this. IF the economy grows more slowly than those baseline scenarios, whether or not that impacts entitlements (of course it does), it ALSO generates continuing unemployment. Put another way, if those projections are "rosy", then long-term entitlements are the least of our issues, and jobs are EVEN MORE critical. Krugman should have pounced on this.

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    2. I haven't viewed the segment -- I really cannot bear this crew, and Krugman is never very good in these situations. As an undergraduate college professor, I have a take on Krugman: he doesn't teach undergraduates, and he is not good at imagining where the basically uninformed but interested, bright, and curious may be coming from. (No swipe at Princeton intended -- most Princeton prof's do a lot of undergraduate teaching and take it very seriously. But as far as I can tell, Krugman does not teach undergraduate courses.)

      Not Krugman's fault, and kudos to him for trying. My question: why are so few economics and business reporters capable of following Krugman's arguments? (or Stiglitz's, or Brad deLong's, or other economists with very pubic profiles?)

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    3. mch, good points all. As for why few economics and business reporters seem incapable fo following Krugman's arguments, I speculate the reasons are these
      1. Television reporting of any strip rewards people with the ability to engage and maintain an audience, not necessarily people who are good at reporting, reasoning, etc. They're entertainers.
      2. This is only slightly less true of print journalists, especially in high-profile perches. Besides, if they're not already on TV, they probably want to be.

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  3. Hey, speaking of childish, misleading commentary, where's this list's own Rattner, David in Ca?

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    1. This comment has been removed by the author.

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    2. Excuse me? I don't understand your reply.

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  4. The over riding point that Krugman failed to is that it is all but impossible to try to reduce the deficit or pay off any of the debt in the current economic conditions. We are in the middle of recovering from the largest recession since the one that triggered the ten years of the Great Depression. The deficit is high now because of the recession reducing tax receipts and the increased costs of the automatically triggered deficit measures, like unemployment compensation, that prop up demand.

    A large reduction in spending or a large tax increase will just trigger another recession, further reducing tax receipts and triggering more spending, resulting in a larger, not a smaller deficit. And you only have to look at Japan or the UK to see this. The British are heading into the third round of their triple dip recession since they adopted austerity to solve their economic problems. It is even starting to dawn on the rather thick Tories that this is not the way to recover from the recession. The Japanese also drove themselves twice into recession before they realized that austerity isn't the answer.

    We must work to get the economy growing again and to make up the ground that was lost before we consider trying to reduce the deficit. And make sure that the Great Financial Crisis doesn't happen again. A good start there would be to throw three or four thousand Wall Street types in prison for the illegality that caused the crisis.

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  5. The overriding point that Krugman failed to make

    Dropped a word there....

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  6. Current Federal share of GDP (revenue) is less than 15%. the "Ryan Plan" assumes such revenue to average over 19% or $520 billion more per year than currently.
    We have a revenue problem and Krugman makes the case that once the economy improves, job growth etc will increase Federal revenue on it's own. If we then went back to Clinton era taxes, the deficit is no longer an issue.
    But the VSPs are serious people and must be heard! Pain must be meted out!

    I see that Joe learned nothing from his last encounter with an expert.

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  7. There is no way to settle this "debate", because the two parties have completely different views of what money is. Krugman has written about the different understandings himself, but is apparently unwilling to put the matter in the foreground.

    For the Serious Suits who appear on these programs, money is, or should have, a fixed and permanent asset with magical properties -- all the solidity of gold, with the fixed value and convenience of currency -- and is the consequence of a morality tale: some have it, others don't, thanks (in their view) to personal deserts. Anyone who threatens the perpetuity of their claim to their hoard and its magical properties, with the real or simply imagined fear of inflation, is the devil.

    Krugman, by contrast, views sovereign debt and money creation as elastic social conveniences, and not subject to the rules of personal finance or fixed possession. Sovereign excesses can have consequences, but not at the level which absorbs the Serious Suits.

    These two camps will never agree, because the Serious Suits are enthralled to Freud's notion, or something like it, linking money and excrement.

    Absurd claim, you say? Consider your own (and our own) neurotic relations with money -- the days, hours and years lost to worrying about it and cherishing it, before you say so. And given that history of near-universal mental illness, is it any wonder these people can't get their heads around the notion that their own sick relations with money don't and shouldn't govern national economic policy?

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    1. It's true that people get nutty about money. However, without faith, money would lose its value. You can't buy anything with Zimbabwean dollars, because sellers don't have faith that they can buy anything with Zimbabwean dollars. Zimbabweans who saved their local currency got screwed when it became valueless.

      I don't know how much money manaipulating our government can do without harming public faith in the American dollar. However, this is a concern. At some point, continued trillion dollar deficits will undermine the dollar's value.

      In a way I agree with Simple Don, that it's "all but impossible to try to reduce the deficit or pay off any of the debt in the current economic conditions." However, what if our economy doesn't get appreciably better, while deficits stay above $1 trillion and debt rises? We may be forced to take unpleasant action, under worse conditions than today's. That's the kind of thing Greece is facing.

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  8. Maybe we could just default and tell international bankers to go to hell.

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    1. In order to screw the international bankers, we can simply print lots of money and cause the dollar to weaken against their currencies. They we can repay the international bankers in depreciated dollars. The lenders will get fully paid back in US dollars, but they'll take a loss in their own currency.

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  9. Isn't Rattner the guy who spearheaded Obama's rescue of the auto industry? Surprising to hear words of austerity come from him.

    I've often wondered about Mika, who's there for eye candy and because the network doesn't trust Joe to run his own show. As the daughter of a world strategic genius, did she get her brains from the same parent who gave her the body, or is old Zbig a bit of a fraud after all? (Note: I imagine Mika gasped when she noticed Krugman ogling her assets.)

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