2024-07-23 8:07 PM

Krugman Spars With the Right

Every once in awhile, there’s something someone says on one of the Sunday morning blab shows that makes you sit up and take notice, to make a mental note that you must print out the transcript including said remark to make sure you have it exactly right.

Such was the case last Sunday, a comment that occurred over the course of an interesting panel discussion moderated by ABC’s George Stephanopoulos on the topic of whether or not the U.S. economy is “built to last.”

In the context of lively exchanges between fiscally-conservative Republican CEO types, including Carly Fiorina, former chairman of Hewlett-Packard and co-chair of Mitt Romney’s campaign in California, and progressives like Nobel Prize winning economist Paul Krugman and former Michigan Democratic governor Jennifer Granholm, it was one David Walker, a wonkish former controller-general of the U.S. who scored the “Play of the Game.”

“Just because it worked doesn’t mean it was right,” he said.

The “it” he was referring to was the government bailout of the auto industry, something that Granholm hailed as a massive success in the context of the economic collapse that was occurring at the time. “This was a phenomenal success,” she said (don’t forget, I’ve got the exact transcript in front of me now). “A million jobs were saved.”

Fiorina jumped in on Walker’s side in this exchange. Check this out:

Fiorina: So I did not support the bailout of General Motors…

Granholm: Of course we need an automotive industry in this nation.

Fiorina: But bailing it out and having the government own General Motors and Chrysler…

Granholm: But it happened in the midst of a collapse. There was no debtor in possession. Nobody would be willing to stand up to put money into it. The government was the debtor in collection of the last resort. We would have no auto industry…

Fiorina: I reject that supposition. And here’s why. Because…

Granholm: How could you reject it? We were calling everybody, begging…

Fiorina: Here’s why…The Secretary of the Treasury could easily have called 10 CEOs of 10 Wall Street banks and said, somebody needs to lend GM money. And it would have happened. But nobody…

Krugman: Wall Street banks were in trouble too at the moment.

At that point, a drum-and-cymbal “rim shot” was needed to underscore Krugman’s point, which was invoked over and over during the discussion revealing, on one side, a set of arguments centered on ideological constructs (note their oft-repeated pet term, “structures,” a code word for more tax cuts for the rich) and on the other side, pragmatic reality: “Just because it worked doesn’t mean it was right!”

For example, Krugman pointed out that the “difference between the Obama economy and the Bush 2 economy…is, actually unprecedented reductions in government employment. Private jobs, the private job creation record under Obama is vastly better than it was under Bush 2, way better. So private employment is almost back to where it was when Obama took office, whereas under Bush, it was down more than two million at this point in his presidency.”

Stephanopoulos interjects: “Answer to that?”

Fiorina (evading the issue altogether): “Well, I think we actually have three structural problems in the economy right now.”

In the exchanges, Krugman, an actual Nobel Prize economist, was treated like the same kind of ideologue on the left as Fiorina, the corporate CEO and Republican campaign heavy, clearly is on the right.

His assessment of the Rep. Paul Ryan budget proposal? “If you look at what’s actually in there, it’s going to blow up the deficit, not shrink it,” he said, only to have Fiorina again change the subject to “structure” by saying, “I think we need to do three things with the tax code.”

Krugman said “the government should actually re-hire the 300,000 schooll teachers who have been laid of because of misplaced austerity.”

He is the author of a new book, out just this week, entitled “End This Depression Now!” explaining why, as he said in the debate Sunday, “the most important thing right now is to end the depression we’re in.”





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