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Paul Krugman | The World According to the GOP

Thursday, 24 October 2013 10:06 By Paul Krugman, Krugman & Co. | Op-Ed

CREDIT: MOIR, Australia/CartoonArts International/The New York Times Syndicate)(Image: Moir, Australia / CartoonArts International / The New York Times Syndicate)

Over at The Washington Post's Wonkblog, the reporter Lydia DePillis recently asked: "Remember when Republicans were worried about 'economic uncertainty'?" Actually, no, I don't. I remember when they claimed to be worried about economic uncertainty - but it was completely obvious even at the time that this was nothing but an attempt to put a new, quasi-academic gloss on the same old, same old.

What they really meant was that the economy will boom only once we get rid of the Islamic atheist Kenyan socialist and install someone who will be nice to rich people. They grabbed hold of some research that seemed, if you didn't read it carefully, to support their complaints, but there was never any question that they would drop the uncertainty thing the moment it became inconvenient in the pursuit of their real goals. And so they did.

It's a lot like the austerity debate, where it was obvious all along that all the carping on debt was really a way to go after the welfare state - a point demonstrated forcefully by the hostile reaction of people like the European Commissioner Olli Rehn when the French began reducing their deficit by raising taxes rather than slashing benefits.

The point is that there are a lot fewer economic arguments out there made in good faith than a naïve observer might think - and that's precisely because powerful forces are doing their best to hoodwink said naïve observers. So, goodbye "economic uncertainty." The truth is that nobody ever took it seriously.

CEOs All at Sea

At Wonkblog, Ms. DePillis has continued writing an informative series of posts on the political haplessness of big business, which with all its money and connections finds itself not only unable to stop the slide into chaos but unable even to exert any appreciable influence. But I still don't think the businesspeople understand their problem.

Ms. DePillis gets at some of this in a recent post titled "Why Big Business Failed to Stop its Worst Nightmare in D.C.," but still, I think, doesn't get to the root of the problem. I tried to explain all of this last year, writing about the confusion of Howard Schultz, the CEO of Starbucks, a genuinely good guy trying to make the political situation better - and helping not at all.

Mr. Schultz, and I think many other business types was (and presumably still is) suffering from a triple misconception about our situation. First, CEOs still talk as if debt and deficits were the central issue of economic policy. They never deserved that place; they certainly don't deserve it now that the deficit has clearly been falling too fast and the debt outlook is stable for the next decade. Yet they can't let go of the notion that a grand bargain on the budget - as opposed to an end to destructive austerity - is what we need.

Second, many CEOs are, I believe, genuinely naive about the people they deal with. They believe, for example, that Paul Ryan, the chairman of the House Budget Committee, actually cares about deficits. They haven't grasped, or refuse to grasp, the reality that the whole thing about deficits was really about using the economic crisis as an excuse to tear down the social safety net.

Finally, CEOs are still trying to position themselves as the middle ground between extremists on both sides, when the reality is that we have a basically moderate Democratic party confronting a radical Republican party that doesn't play by any of the normal rules. If you insist on thinking of senators Ted Cruz and Elizabeth Warren as somehow symmetrical figures, you're already so out of touch with political reality that there's no way you're going to have useful influence.

I do sometimes wonder how these guys can be that naïve, and some of them probably aren't - they're playing class warfare on the sly. But some of them really do seem clueless, probably because thinking about the reality of American politics today would make them uncomfortable - and who's going to tell the guy in the big office things that make him uncomfortable? It's not just Fox News watchers who live in a bubble; sometimes, wealth and power can have the same effect.

© 2014 The New York Times Company
Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.
Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008. Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including "The Return of Depression Economics" (2008) and "The Conscience of a Liberal" (2007).
Copyright 2014 The New York Times.

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Paul Krugman | The World According to the GOP

Thursday, 24 October 2013 10:06 By Paul Krugman, Krugman & Co. | Op-Ed

CREDIT: MOIR, Australia/CartoonArts International/The New York Times Syndicate)(Image: Moir, Australia / CartoonArts International / The New York Times Syndicate)

Over at The Washington Post's Wonkblog, the reporter Lydia DePillis recently asked: "Remember when Republicans were worried about 'economic uncertainty'?" Actually, no, I don't. I remember when they claimed to be worried about economic uncertainty - but it was completely obvious even at the time that this was nothing but an attempt to put a new, quasi-academic gloss on the same old, same old.

What they really meant was that the economy will boom only once we get rid of the Islamic atheist Kenyan socialist and install someone who will be nice to rich people. They grabbed hold of some research that seemed, if you didn't read it carefully, to support their complaints, but there was never any question that they would drop the uncertainty thing the moment it became inconvenient in the pursuit of their real goals. And so they did.

It's a lot like the austerity debate, where it was obvious all along that all the carping on debt was really a way to go after the welfare state - a point demonstrated forcefully by the hostile reaction of people like the European Commissioner Olli Rehn when the French began reducing their deficit by raising taxes rather than slashing benefits.

The point is that there are a lot fewer economic arguments out there made in good faith than a naïve observer might think - and that's precisely because powerful forces are doing their best to hoodwink said naïve observers. So, goodbye "economic uncertainty." The truth is that nobody ever took it seriously.

CEOs All at Sea

At Wonkblog, Ms. DePillis has continued writing an informative series of posts on the political haplessness of big business, which with all its money and connections finds itself not only unable to stop the slide into chaos but unable even to exert any appreciable influence. But I still don't think the businesspeople understand their problem.

Ms. DePillis gets at some of this in a recent post titled "Why Big Business Failed to Stop its Worst Nightmare in D.C.," but still, I think, doesn't get to the root of the problem. I tried to explain all of this last year, writing about the confusion of Howard Schultz, the CEO of Starbucks, a genuinely good guy trying to make the political situation better - and helping not at all.

Mr. Schultz, and I think many other business types was (and presumably still is) suffering from a triple misconception about our situation. First, CEOs still talk as if debt and deficits were the central issue of economic policy. They never deserved that place; they certainly don't deserve it now that the deficit has clearly been falling too fast and the debt outlook is stable for the next decade. Yet they can't let go of the notion that a grand bargain on the budget - as opposed to an end to destructive austerity - is what we need.

Second, many CEOs are, I believe, genuinely naive about the people they deal with. They believe, for example, that Paul Ryan, the chairman of the House Budget Committee, actually cares about deficits. They haven't grasped, or refuse to grasp, the reality that the whole thing about deficits was really about using the economic crisis as an excuse to tear down the social safety net.

Finally, CEOs are still trying to position themselves as the middle ground between extremists on both sides, when the reality is that we have a basically moderate Democratic party confronting a radical Republican party that doesn't play by any of the normal rules. If you insist on thinking of senators Ted Cruz and Elizabeth Warren as somehow symmetrical figures, you're already so out of touch with political reality that there's no way you're going to have useful influence.

I do sometimes wonder how these guys can be that naïve, and some of them probably aren't - they're playing class warfare on the sly. But some of them really do seem clueless, probably because thinking about the reality of American politics today would make them uncomfortable - and who's going to tell the guy in the big office things that make him uncomfortable? It's not just Fox News watchers who live in a bubble; sometimes, wealth and power can have the same effect.

© 2014 The New York Times Company
Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.
Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008. Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including "The Return of Depression Economics" (2008) and "The Conscience of a Liberal" (2007).
Copyright 2014 The New York Times.

Hide Comments

blog comments powered by Disqus