Three things changed to convert Paul Krugman from a raving Michael Moore-ish leftist (in the eyes of the Establishment) into a very serious man.
1. He won the Nobel Prize in Economics
2. A Democrat took over the White House
3. Krugman is now attacking a Democrat rather than a Republican
Winning the Nobel Prize does confer a degree of credibility. I think the same factor has helped Al Gore be more persuasive as an advocate for addressing climate change. But the reason Krugman gets his face on the cover of Newsweek with a headline Obama is Wrong is primarily because he is a Democrat criticizing a Democrat, and that is more newsworthy because, if nothing else, it is at least somewhat surprising.
Even though Krugman enjoys some rather well-credentialed Establishment perches (NYT’s opinion page, Princeton University professor), it was easy to dismiss him during the Bush years. His track record as a critic of Bush was strong, but that didn’t seem to gain him much respect. He was more likely to be invited on Bill Maher’s HBO program than This Week with George Stephanopoulus. Meanwhile, NYT’s centrists like David Brooks and Tom Friedman seemed at times to be ubiquitous on the Sunday morning political shows, cable news, and even PBS.
Some of this is justified. It was much more newsworthy when a William Buckley or Newt Gingrich came out and criticized Bush than when some Democratic columnist did so. The reverse remains to true for an Obama administration. Yet, even acknowledging this, the default position of the Establishment press is that liberals are not serious and their views can be ignored until such time as they begin bashing a Democratic president. If nothing else, this dynamic is annoying.
Writing in Newsweek, Evan Thomas seems to blame Krugman for this situation.
Paul Krugman has all the credentials of a ranking member of the East Coast liberal establishment: a column in The New York Times, a professorship at Princeton, a Nobel Prize in economics. He is the type you might expect to find holding forth at a Georgetown cocktail party or chumming around in the White House Mess of a Democratic administration. But in his published opinions, and perhaps in his very being, he is anti-establishment.
I think it’s a difficult case to make that a man like Krugman can be anti-establishment. What he is is a man within the Establishment who is willing to call bullshit on his peers. And that is a rare and valuable thing. I admire Paul Krugman for his willingness to be contrarian both now and when the rest of his pack was ginned up to invade Iraq.
Of course, that doesn’t mean I think he is right about a lot of what he saying lately. His vision of a world without securitization seems almost stupid and not worthy of an economist of his stature. His statement this morning on This Week, that we’re going to have to apologize for criticizing the Japanese because we’re doing the exact same thing, was somewhere between imprecise and dishonest.
I’m going to keep my eye on Krugman as the media builds him up. Is he letting his sudden acceptability go to his head? Is he falling into a role (Uncle Tom) that he is supposed to play? Is he bitter that Hillary Clinton didn’t win the nomination?
Krugman is not an idiot, but he should be careful that he isn’t treated as a useful one by corporate and Republican enemies of Obama’s policies.
Krugman is a finance economist with orthodox views that lead him to support NAFTA and to have completely missed what Obama is doing. And his criticism of Geithner has been exceptionally sloppy and full of basically nonsensical arguments from authority.
He was, however, a hero of the republic during the Bush years.
he’s ahead of the (abysmal) average, but was very clueless and offensive about europe last week.
like obama, he’s a major upgrade, but a miss is as good as a mile…
Krugman’s attacks on Obama have been poorly sourced and slippery – even during the primaries.
On what planet is Brooks a centerist? He came out of the American Enterprise Institute for crying out loud.
Krugman’s criticisms of Obama is very similar to Dean Baker, Bruce Webb, Duncan Black, and other liberal economists. Soros is also making similar criticisms.
find a Republican columnist to Brooks’s left.
red herring.
just because there may or may not be republican columnists to brooks’ left does not make him a centrist. it just makes him not-as-right-wing as some of his colleagues.
if the room is filled with 10 nazis and one Italian fascist that doesn’t make the Italian a centrist. It just makes him not a nazi.
well, how would you define a centrist, then?
Jim Jeffords and Lincoln Chafee left the party. I’m defining centrist as someone who is as far left as they come and still calls themselves a Republican. In the world of conservative punditry, either Brooks qualifies or no one does.
It is OK to vote for “No One”.
I can help with that.
Nine years ago, Brooks wrote a book called “Bobos in Paradise.” It was mostly a bit of feel-good pop sociology in which Brooks attempted to illustrate the divide between what he saw as the major cultural divide of the United States: well-off, left-leaning cultural elites who shop at Anthropologie, vs. working class, heartland folks with NASCAR wraparound shades and ripped sleeves.
It was, along with a lot of the articles he wrote at the time, mostly bullshit, but it did two things for him. First, by poking fun of the well-off while lauding the everyman, it reinforced each group’s stereotypes about the other, elevating hi to the status of serious ethnographer – or at least, not a pompous windbag prone to making stuff up. Second, by associating himself with the well-off group he made fun off, he allowed himself to be cast as the useful idiot – Republican’s could cite him as being a liberal, even has he was described as “every liberal’s favorite conservative.”
I guess you can tell I’m not a big fan. It’s not that he’s incredibly stupid, although certainly I think his track record is shoddy, or that his line is particularly egregious, since he’s mostly recycling CW anyway. It’s that somehow he managed to elevate himself to pundit status while being totally white bread. Bill Kristol is still doing interviews, but people know he’s crazy. Brooks just keeps on keeping on, quietly.
One thing I am sure I do understand about Krugman: whatever his expertise in the field of economics (of this I am not competent to judge) — politically, he is clueless. Depending on the circumstances, this makes his views either refreshing, annoying, or some combination of the two.
sometimes history just lines up for one man. it do so for obama and it did so for krugman.
by the way, lets not even pretend krugman is being used. he is trying to push obama into doing what we all know should be done. the politics/practical restraints on the obama administration make their actions excusable, but krugman is right.
dissent is important. lets not start implying that krugman is a useful idiot.
But the reason Krugman gets his face on the cover of Newsweek with a headline Obama is Wrong is primarily because he is a Democrat criticizing a Democrat, and that is more newsworthy because, if nothing else, it is at least somewhat surprising.
Surprising? Really? One hallmark of Democrats is that we won’t hesitate to critique one of our own. Will Rogers’ words still ring true today.
Sorry, Booman, I followed your links about securitization and Krugman wins in my mind. The process has created a casino in the banking business and apparently also a lot of wealth that doesn’t really exist when we all stop pretending. You know, California real estate, for example. Maybe tighter regulations and set limits might have helped make this big drop a little less precipitous, but I can’t see this as much better than the bustouts of the S&L collapse.
The links didn’t match either. The first Krugman link goes to globalization and nationalism, the second link is a response to another piece, no?
As far as the reason why Krugman is getting the pub now, because he’s attacking Obama, I agree. From what little I understand about macroeconomics I am in Krugman’s territory, although I don’t swear allegiance to him.
thx, the securitization link is fixed now.
“Krugman is not an idiot, but he should be careful that he isn’t treated as a useful one by corporate and Republican enemies of Obama’s policies.”
On the other hand, progressives blindly attacking Krugman as wrong because he disagrees with Obama only ends up serving the same corporate and Republican enemies of Obama’s policies, doesn’t it?
I think that’s the far more likely outcome that Krugman goes down to a progressive circular firing squad, not as a GOP Trojan horse.
Maybe it’s not politically feasible but the world without securitization seems like a much better world to me.
Professor Krugman has a track record of being dismissed as a crackpot by people who turn out to be totally wrong.
I would be surprised if he’s all wrong in his opposition to the Obama bank bailout.
Isn’t Krugman a useful idiot for… Obama? Seems that way to me, my logic being as follows: the biggest threat to Obama is to be plausibly framed as an outlandish Big Gummint Bolshie protecting cosmopolitan bankers (and values) while expropriating the heartland. Having Krugman denouncing the administration for not being Big Government enough, for not being confiscatory enough, for being too pro-market, creates space for Obama in what becomes then the perceived middle.
It’s true that what causes the corporate media outlets to give Krugman this sudden prominence is presumably a desire to help get the Obama agenda bogged down by friendly fire, but I think they’re miscalculating.
The same logic (without outside sponsors) applies to Bowers, Hamsher & Co: A screaming idiot corner seems useful to me, provided it doesn’t get too much traction.
Granted, a dialectic without idiots would seem heavenly, but in the absence of that utopian state of affairs…
that thought has crossed my mind.
Obama’s discussions with the bankers must be improved by the notion that Obama’s base is pushing him to just nationalize.
Oliver Willis nails it.
It’s worth considering that Barack Obama is, at best, a member of the Establishment who is occasionally willing to call bullshit on his peers, which makes him not all that different than Krugman, their differences of opinion aside.
This is the same guy who folded on FISA, whose Justice Department has backed as many Bush-era policies on detainees as it has rescinded, and whose economic advisers in particular are very, very establishment.
The difference between Obama and Krugman on the economy is that Obama sees the current system as basically sound and hard to improve upon in any substantial way; it just needs some tweaking to avoid abuses and provide more stability. Krugman, on the other hand, is arguing that the current system has some fundamental problems that require equally fundamental solutions. Obama is a mild reformer, and Krugman is — or is attempting to recast himself as — a mild revolutionary.
Though I rather doubt Krugman, being such a mild revolutionary, will be a major player in the future battle whose lines are only beginning to be drawn now, the Obama-Krugman division foreshadows the division that will dominate the next century, that is, the division between capitalists and ex-capitalists. We are arguably long overdue for that battle, having had to wait most of the 20th century for the communist experiment to fail before we could arrive at a moment when people begin to notice that, hey, capitalism doesn’t look so hot when it no longer has the abysmal failure of communism to compare against.
As far as a world without securitization goes, I’m not sure I’d go quite as far as Krugman, but it’s certainly not a stupid idea. There was a world before securitization, you know, and even if there hadn’t been, even Francis Fukuyama has backed away from the idea that capitalist democracies represent the end of history. If, in a couple of centuries, our descendants aren’t living with an economic system much better than capitalism, it will be because we, they, and the intervening generations suffered an unprecedented failure of the imagination.
And one final note: It is useless to complain about the way the establishment media gloms onto liberal infighting or, say, missing white women or the annual floods in the upper midwest. That’s their intended function. It would be far more useful to lobby Congress for the breakup of the corporate media. Expecting them not to seek to distract the public in order to preserve the status quo is like expecting, oh I don’t know, vacuum cleaners to make brownies. It’s not what they do.
A world before securitization? Oh yeah? And according to you when was that? Fact: securitization is almost as old as capitalism itself. An early prototype, the German version of mortgage backed securities, the so-called Pfandbrief market, has been around for more than 200 years. Krugman seems hellbent on matching Boehner & Co when it comes to the idiocy of some of his criticisms and proposals. Why? Beats me. But he knows better.
Oh my, as old as capitalism itself?! Human civilization has been around for nearly ten thousand years. The world did not suddenly spring into existence with Adam Smith, not even a great many parts of it we think of as “modern”. Within the context of western civilization, anything that is only two hundred years old is quite recent.
I would submit to you that a large part, if not the largest part, of our problems stems from a perspective that is limited in time to a presidential term, or a single human lifetime, or even to the existence of our very young country. Thinking like that is what allowed Francis Fukuyama to publish, in all seriousness, his book, The End of History, and for it to be received without the universal derision it deserved.
Krugman, for all his faults, does know better. But knowing better involves realizing that the full spectrum of possibilities for economic systems extends far beyond the little patch of turf that has been explored by mercantilism, capitalism, and communism. Economics as a science is still in its birth throes. Making assumptions about what can be done based on what we have tried so far would be like the ancient Greeks, upon discovering static electricity when rubbing pieces of amber, declaring that they knew all there was to know about the electron.
That, really, is the crux of the matter. Science is the only source we have for reliable information, and economics has only very recently begun to submit itself to the rigors of scientific method. Heretofore, it has been more like religion or political ideology: a farrago of half-baked ideas where one can submit mere tradition — like, perhaps, 18th century German trading practices — as if it were a cogent argument.
You might as well be arguing that we base our economic system on the trading of walrus fat, which any Inuit can tell you has a pedigree far longer than the written language upon which modern contracts depend.
Your discourse is phantasmagorical.
The securitization of mortgages in the United States began in the 1970’s and really took off in the 1980’s, which, if I’m doing the math right, is less than 200 years ago. The Pfandbrief market is a nice example of a how a well regulated market for mortgage backed securities can work, but that doesn’t have any bearing on the way it has worked in the United States.
I don’t think there is anything wrong with plain and simple securitization. Our problem was that we let people speculate in a totally unregulated manner on other people’s securitization.
If I make ten $100 loans, it is perfectly acceptable to sell of $10 of each loan to ten different people, thereby decreasing the chances of default on any single bundle and getting back by $1000 to make more loans.
There is nothing wrong with the people I sold those bundles to buying insurance against the chance they might default.
What’s a problem is letting someone else come in and bid up the payout of that insurance twenty times face value.
We can fix this without criminalizing securitization. And we should.
Let me revise this.
In my scenario, there is the additional problem that we cannot allow me to make $100 loans all over town to people that have no hope of paying me back and then letting me offshift the risk to others who are unaware that I’m making shitty loans. So, we have to regulate that end of it, too.
But if I understand Krugman’s article correctly, he’s arguing that the market for mortgage backed securities is as dead as a doornail and that there is very little utility in throwing huge piles of money into trying to revive it in its current form. I don’t see why securitization can’t work, but in order for it to work a number of dramatic changes need to be make; starting with the enforcement of strict regulation on lending, strict regulation of the securitization process, strict regulation of ratings, and the elimination of credit default swaps, switching instead to insurance backed by reserves. I think all of that would need to be in place before any reasonable investor would even think about touching a new mortgage backed security at this point.
There are plenty of indications that the Obama administration plans on imposing regulations on that whole process. One area of concern is the future of the credit default swap. I won’t be sanguine about all of this being fixed in a satisfactory manner, but I don’t think we should ignore the facts that we already know.
Krugman is not just arguing for regulation, he appears to be arguing that we should get rid of the practice of securitization completely.
I think his argument is a little deeper than that. He’s arguing that securitization is already dead and that we should leave it that way. He’s also arguing that propping up big shitpile is, at best, a highly inefficient method of breathing life into the financial markets and that if it does work (a big if) all it will do is revive one of the problems that got us into the crisis in the first place.
From the politics perspective Booman what do you think about this http://www.huffingtonpost.com/frank-schaeffer/the-krugmanlimbaugh-night_b_180440.html ?
prove what an idiot you are and nobody is laughing, will you get a real job and just go away?