Krugman dreams of a better day!

FRIDAY, DECEMBER 6, 2013

McDonough makes progress unlikely: In today’s column, Paul Krugman dreams of a better day. Let’s examine three key passages.

Even as he starts his column, Krugman starts breaking the rules:
KRUGMAN (12/6/13): Much of the media commentary on President Obama’s big inequality speech was cynical. You know the drill: it’s yet another “reboot” that will go nowhere; none of it will have any effect on policy, and so on. But before we talk about the speech’s possible political impact or lack thereof, shouldn’t we look at the substance? Was what the president said true?
The gentleman wants us to “look at the substance?” Are pundits allowed to suggest that?

As he continues, Krugman discusses Obama’s suggestions about income inequality. Once again, the columnist attempts to sidestep the basic rules:
KRUGMAN: [B]ecause the president was willing to assign much of the blame for rising inequality to bad policy, he was also more forthcoming than in the past about ways to change the nation’s trajectory, including a rise in the minimum wage, restoring labor’s bargaining power, and strengthening, not weakening, the safety net.

And there was this: “When it comes to our budget, we should not be stuck in a stale debate from two years ago or three years ago. A relentlessly growing deficit of opportunity is a bigger threat to our future than our rapidly shrinking fiscal deficit.” Finally! Our political class has spent years obsessed with a fake problem—worrying about debt and deficits that never posed any threat to the nation’s future—while showing no interest in unemployment and stagnating wages. Mr. Obama, I’m sorry to say, bought into that diversion. Now, however, he’s moving on.
Krugman, please! If it weren’t for “fake problems,” would our public discussion recognize any problems at all?

Our third point is meant to be serious. As he closes his important column, we think Krugman understates a very important point:
KRUGMAN: Finally, ideas matter, even if they can’t be turned into legislation overnight. The wrong turn we’ve taken in economic policy—our obsession with debt and “entitlements,” when we should have been focused on jobs and opportunity—was, of course, driven in part by the power of wealthy vested interests. But it wasn’t just raw power. The fiscal scolds also benefited from a sort of ideological monopoly: for several years you just weren’t considered serious in Washington unless you worshipped at the altar of Simpson and Bowles.
Ideas do very much matter! But the power of the fiscal scolds doesn’t derive from “several years” of high-end propaganda.

The powerful interests which pushed their ideas have been doing so for decades. For most of that time, the liberal world pretty much stared off into air.

Has the liberal world started to push back with better ideas? If so, it’s been a long time coming. By the way:

If you want the public to adopt your ideas, you have to find ways to make common cause with the public. Tremendous amounts of “liberal” action now seem to involve gratuitous insult and the ensuing division.

On that score, we were especially struck by Katie McDonough’s recent piece in Salon. It concerns an incident at Minneapolis Community and Technical College.

McDonough has no apparent idea what happened in this incident. Nor does she seem to have any idea that she has no apparent idea.

In comments, things get much, much worse. Because the incident in question involves claims about race, it has produced 1476 comments as we rush our copy to press.

Even by modern standards, we'd have to say that those comments devolved into pure tribal warfare. Here's the problem:

None of the commenters seem to be in a position to know what actually happened. That said, very few of them seem to realize that they don’t know—and McDonough made no attempt to bring this perspective to them.

Krugman wants Obama’s new ideas to matter. We’d like to see that happen too.

But few of those ideas will take hold in a world where two tribes can be led to name-call bitterly about an endless succession of incidents where no one has the slightest idea what actually might have happened.

We’ve come to admire McDonough’s spirit, we note in a mansplaining aside with a large dollop of condescension. That said, her journalistic effort was non-existent here.

This is the shape of the new Salon—and of conquest through division, the plutocrat’s oldest ploy.

20 comments:

  1. Krugman pretends that debt and deficit are independent from unemployment and stagnating wages. These four problems are related. All four are exacerbated by high government spending.

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    Replies
    1. Please develop the appropriate model for this talking point derived from Fox News, with the following items:
      appropriate explanatory notes
      model outcomes proving this is true
      preferably some real life examples as backup so that it isn't a PDOOMA
      the appropriate Nobel Prize(s) recognizing your achievements

      Delete
    2. Funny and apt response.

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    3. These four are not related in the way that you and Robert Barro believe them to be.

      High government spending relative to the unemployment and wage deflation which anti-cyclical policy would remedy is useful and good.

      Unemployment and stagnating wages are not generally exacerbated by high government spending, unless you're a right- or center-leaning economist.

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    4. High government spending relative to the unemployment and wage deflation which anti-cyclical policy would remedy is useful and good.

      I agree that's sometimes the case, depending on various factors. However, I meant permanent high government spending. High government spending is a drag on business. It means higher taxes on business and often means government borrowing that tends to crowd out private borrowing.

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    5. But none of this actually obtains. During recessions, federal spending as a percentage of the GPD goes up. In 1983 it was 24%, going down thereafter and bouncing around between 21% and 23% for a decade. During the boom times of the Clinton years, the percentage dipped as low as 19%. After the 2008 crash, the percentage went to 25% and is now down to a bit over 21%, the average of the years 1973 to 2012.

      There's no data that supports your contention that high government spending is necessarily a drag on business. It doesn't necessarily mean higher taxes on business, and as the Fed is keeping interest rates near zero, private borrowing isn't being crowded out.

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    6. deadrat, you make some good points. However, I meant to address long-term spending. E.g., see http://globaleconomicanalysis.blogspot.com/2012/08/government-spending-as-percentage-of-gdp.html
      Back in the period 1947 -1967, federal spending was much lower than in recent decades, and growth of GDP was much faster. See http://www.multpl.com/us-gdp-growth-rate/table/by-year

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    7. DAinCA,

      I don't know whether to laugh or cry.

      1. Your second source gives annual growth rates. Almost completely meaningless. In 1950, the GDP grew by 18.19%. Great, right? No, in 1949 the economy contracted by 3.46%. You have to look at a longer-term trend.

      2. Your second source gives the growth rates measured against current dollars. Again, meaningless. You have to look at constant dollars.

      In your two-decades of the Golden Age of Cherry-picked Data, 1947-1967, the GDP did a bit better than doubled. In the 45 years afterwards, the GDP did better than 2.5 times. I'll let you calculate the slopes of the lines.

      3. GDP by itself doesn't tell all that much. As the population grows, you expect the GDP in relatively good times to grow. You have to look at GDP per capita, and the slope of that line is remarkably constant since 1947.

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  2. This comment has been removed by the author.

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  3. Obama's comments are meaningless now. When he was first elected and had all of the political muscle, he could have tried to do something about this inequality. He didn't even try; he worked as hard as he could to give the repugs the keys to controlling legislation by being all "bipartisany." After using all of his power to enrich the 1% even more, now he will mention the current reality. His involvement will go no further.

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    Replies
    1. please . . . please shut up.

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  4. "The powerful interests which pushed their ideas have been doing so for decades. For most of that time, the liberal world pretty much stared off into air."

    Actually, no, liberals triangulated and adopted plutocratic notions as their own: NAFTA, welfare "reform," a draconian crime bill, while pursuing great liberal achievements such as school uniforms. What's changing is the demographics of the populace, and the pain people are feeling from the effects of income inequality. The population is waking up. They won't be lulled by triangulating liberals anymore.

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  5. In addition, even a cursory review of polling data reveals that much of the US population embraces social-democratic policy that either closes the income gap, or at least amerliorates it. Large majorities favor taxing the wealthy. And our most social democratic cohort of all may be the Tea Partiers, 70% of whom, in repeated polling, don't want Medicare touched.

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  6. McDonough's piece was entirely factual - there was really no attempt at analysis. She was not there and apparently did not interview anyone (or if she did the video, she doesn't seem to appear in it), so no, she does not "know" what happened except from what she got from others. Why criticize her for this? Of course commenters know exactly what happened and why, but is Bob going to get after the commenters on every blog post?

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