Paul Krugman continues his Chicken Little tour in service to his new book, End This Depression Now!, by giving the Obama campaign a little free advice. Did I say “free”? Actually, it comes at a steep, steep price:
In his book, which hit shelves May 1, Krugman laments the “shadow of economic catastrophe” we live in, and the opportunity cost of huge stockpiles of underutilized human and physical capital. The government should put that to work, Krugman says, first by reversing the state layoffs of teachers, firefighters and other employees, and then ideally with a New Deal-style public works push to rebuild American infrastructure by putting the unemployed to work. But even though GOP opposition makes that all but impossible, Krugman believes it’s a mistake for Obama not to go the extra mile and at least tell voters what more he would do if only he could.
“There is a political danger to Obama, which is that [Mitt] Romney can go around saying, ‘The economy is still lousy,’ which is true,” Krugman said. “And the fact that Obama has never made a really clear case for his own economic leadership hurts. Now, I still think Obama will probably win, because there are other issues, but they have created a trap for themselves on the economic policy front by allowing themselves to own a weak economy in a way that they shouldn’t, because a lot of the problem has been tortured opposition from the Republicans.”
The White House’s narrative developed amid strong political headwinds. Pressure not only from Republicans but many Democrats and even administration officials, along with a broad establishment consensus, compelled Obama to pivot to deficit-reduction, after the Democrats’ 2010 congressional losses and in the face of an exploding national debt.
I’m pretty sure that a proposal to spend another $2 trillion in stimulus spending would just about put a bow on the election for Mitt Romney, not Barack Obama. That became very clear after 2010, when Republicans won a landslide in House elections that hadn’t been seen in a midterm since 1938. However, the notion that Obama pivoted to deficit reduction is rather ludicrous. His proposed FY2013 budgets reduced the deficit to $900 billion, which is better than the four straight trillion-dollar-plus deficit budgets Obama signed — remember, he signed the FY2009 budget after the Democratic Congress played keep-away with George W. Bush — but it’s hardly a reduction to pre-Obama levels.
On the other hand, Krugman does correctly identify the inherent contradiction in Team Obama’s campaign:
“They’ve tied themselves up in knots because they’ve bought into this notion that it would sound wrong to admit that they haven’t been able to do everything that they really should have done,” Krugman told TPM in an interview following the release of his new book, “End This Depression Now!” “It’s incredible — they can’t quite make up their minds on whether the theme is that Republicans are standing in the way of doing what has to be done, or things are really good and America’s back on track. The problem is that you can’t perceive both of those lines at the same time.”
No, they have to argue that the 2009 stimulus worked, when it obviously didn’t. They can’t blame GOP recalcitrance for that, either; Democrats locked Republicans out of the drafting of that stimulus package, and then passed it themselves without any GOP votes in the House and only three in the Senate, including one who later switched parties (Arlen Specter). They own the 2009 stimulus package, and they own the results.
Speaking of results, the Romney campaign released another campaign ad today, attacking Obama on his promises of economic resurgence:
How do you define “progress”? Probably not with these economic statistics. No matter what Krugman claims now, the Obama administration proposed the $800 billion stimulus and predicted it would stop joblessness from rising above 8%, and it hasn’t been below 8% since. That’s failure no matter how one wants to spin it.
Update: Liz Peek slams Krugman’s “left-wing bullying” of Ben Bernanke:
Paul Krugman vaulted over the line recently, issuing an ad hominem attack on Fed Chair Ben Bernanke for not doing enough to boost the economy. Krugman’s anxiety that the stuttering recovery will bounce President Obama from the White House seems to have loosened his already-fragile grip on reality. His conclusion – that “right-wing bullying” is holding Bernanke back – seems especially nonsensical, even for the truculent Mr. Krugman. …
Krugman’s frustration is understandable. Many Americans are still without jobs, and income growth is tepid. However, driving the nation full tilt towards the next financial cliff is not the answer. Leadership and pro-business measures such as those adopted in Canada and Germany in recent years – an approach consistently undervalued by the Obama White House – would better help us get back on the speedway.
Fortunately, the Fed is in the hands of a sober driver, who appears immune to right-wing bullying. Let us hope he will resist Krugman’s left-wing bullying as well.
I think that’s a safe bet. Is anyone taking Krugman’s advice these days? Anyone? Bueller? Bueller?