Krugman - I Deserve A Parade!

Paul Krugman explains that, with the exception of certain iconoclastic, unheralded Nobel Laureates, the elites have been idiots on the Big Questions of the day, or decade:

The past three years have been a disaster for most Western economies. The United States has mass long-term unemployment for the first time since the 1930s. Meanwhile, Europe’s single currency is coming apart at the seams. How did it all go so wrong?

Well, what I’ve been hearing with growing frequency from members of the policy elite — self-appointed wise men, officials, and pundits in good standing — is the claim that it’s mostly the public’s fault. The idea is that we got into this mess because voters wanted something for nothing, and weak-minded politicians catered to the electorate’s foolishness.

So this seems like a good time to point out that this blame-the-public view isn’t just self-serving, it’s dead wrong.

The fact is that what we’re experiencing right now is a top-down disaster. The policies that got us into this mess weren’t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.

Anyone who knows Krugman knows that this tirade will segue to the Bush tax cuts and the war in Iraq, but we will excerpt it anyway:

These days Americans get constant lectures about the need to reduce the budget deficit. That focus in itself represents distorted priorities, since our immediate concern should be job creation. But suppose we restrict ourselves to talking about the deficit, and ask: What happened to the budget surplus the federal government had in 2000?

The answer is, three main things. First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs.

So who was responsible for these budget busters? It wasn’t the man in the street.

On tax cuts:

President George W. Bush cut taxes in the service of his party’s ideology, not in response to a groundswell of popular demand — and the bulk of the cuts went to a small, affluent minority.

Hmm - Al Gore also ran on a promise to cut taxes, although that may have been backed by as much conviction as Bill Clinton's vanishing middle class tax cut in 1993.  In any case, per this Gallup poll 65% of Americans thought their taxes were too high back in 2001; that figure is currently 50%, with another 43% opining that their taxes are "about right".  Vox populi.

The Iraq debate is endless; here is Krugman on the housing collapse:

Finally, the Great Recession was brought on by a runaway financial sector, empowered by reckless deregulation. And who was responsible for that deregulation? Powerful people in Washington with close ties to the financial industry, that’s who. Let me give a particular shout-out to Alan Greenspan, who played a crucial role both in financial deregulation and in the passage of the Bush tax cuts — and who is now, of course, among those hectoring us about the deficit.

So it was the bad judgment of the elite, not the greediness of the common man, that caused America’s deficit.

Let's hear if for the common man!  Krugman's conclusion:

Does any of this matter? Why should we be concerned about the effort to shift the blame for bad policies onto the general public?

One answer is simple accountability. People who advocated budget-busting policies during the Bush years shouldn’t be allowed to pass themselves off as deficit hawks; people who praised Ireland as a role model shouldn’t be giving lectures on responsible government.

But the larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

So, the voice of the common man is the voice to which we should be listening?  Has Krugman even looked at polling data for ObamaCare, the bank bailout, or the auto bailout?  Those are all Big Government cramdowns backed by policy elites.

More likely, Krugman's message is that he has been right about everything and we should be listening to him. Oh, well - back in the day, at the outset of a weak recovery, the irresponsible Bush deficits were going to lead to hyperinflation, according to Krugman.  Today, anyone worried about hyperinflation or deficits should be silenced.  Maybe people will listen to Krugman once they can figure out which Krugman to listen to.  Maybe!

Comments

[Rob Crawford]

Someone still reads Krugman?

Why?

[Tully]

Krugman suffers from a variation of Pauline Kael Syndrome.

[Cohen the Barbarian]

Hmm, the deficit under Bush was $160B and falling prior to the mortgage debacle. Nothing to do with the tax cuts of course. So much for the Reality based community.

[Extraneus]

If only the rich people hadn't stolen that $2 trillion from the government, we'd be sitting pretty right now.

[MarkO]

Worse yet, someone still posts about Krugman.

[Captain Hate]

If Krugman falls over in the woods, does anybody but TM hear it?

[Janet]

If Krugman falls over in the woods, does anybody but TM hear it?

Hahhahaha!

[Thomas Collins]

Well, Krugman has stumbled upon one correct statement. It is a failure of the elites, just not the ones he is talking about. It is a failure of the nanny state elites who came to power in the election of 2008.

[Petrobras.]

What went wrong?
========

[They all went to pee in some sea green soup.]

Deregulation, eh? Yes, and Fannie, and Freddie, and MERS.
=======

[Paul Zrimsek]

Deregulation, sure. Those stupid elites were crazy to think the economy could work without being constantly supervised by the wise... uh, elites.

[Comanche Voter]

Krugman is about as relevant as a 9 year old boy sitting in a mud puddle and making "mud pies". Those mud pies are clearer than his arguments.

[pagar]

"and MERS."

"t is an outrage and nothing short that MERS' straw officers purport to “assign the note” along with the deed of trust in many of the assignments. Since this is entirely impossible, it is also a violation of state recording laws because a false instrument has been submitted for recordation.

http://www.sourceoftitle.com/blog_node.aspx?uniq=769

[Tom Bowler]

TM, that's an excellent synopsis of every column Krugman has written in the last ten years. A little variation in the packaging, but other than that they're all about the same. Times readers demand predictability!

[East Bay Jay]

When he cites a $2 trillion figure for the tax cut he's pointing the finger at the middle class. The guy with the Camry and the 1,500 sq ft suburban ranch. And since over half the country supported the Iraq War, he's fingering the populace for that too. The dumbass can't even get out of his own 'don't blame the people' column without blaming the people.

[MarkD]

I didn't pay the $49, so I thought I would never read or hear anything about him or any of the other NY Times columnists. Maybe the Times figured out that they would make a lot more charging fifty bucks to make them go away. Where do I send my subscription?

[maryrose]

Paul Krugman is as clueless today as he was 3 years ago. Even a first grader experiences a learning curve.
No mention at all of Frank ,Fannie Freddie who we are still bailing out to the tune of 8.2 billion. Why would we give them more money to flush down the toilet? Too Big To Fail car companies and all but Lehman's who drew the short straw.

[maryrose]

Forgot to mention the Unstimulus Package to the tune of almost 900 billion-hence we got a huge deficit ON Obama's Watch!

[glasater]

Haven't read Pagar's link yet--and I will--but during Kudlow's show there was breaking news that big banks are offering a 5 bil settlement for the mess.
It was "guesstimated" that this is an initial offering and subject to negotiation.

[David in Mi]

Sorry to disrupt the love fest here (or hate fest if you're name is Krugman) but you reference an article from '03 that shows Krugman to have frightening ability to predict.

P1 interest rates have not skyrocketed. Swing and a miss.

P2 "the tide of red ink will keep on rising" nailed that

P4 8 years ago "the 10-year deficit will be at least $3 trillion.(vs cbo's 1.8)" Nailed that.

P7 "looming threat to the federal government's solvency." Nailed that.

p8 "because of the future liabilities of Social Security and Medicare, the true budget picture is much worse than the conventional deficit numbers suggest." Nailed that.

p10 "my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money" Nailed that.

We have not seen inflation yet, but our debt is still there and our trade deficit is growing - so the temptation and consequence Krugman describes is still a possibility.

But I see your point, he only got 5/6 right, I'm sure you did better.

[David in Mi]

Fun factoid - on your poll numbers about opinions on income tax rates - in both cases at least some portion of those saying they were taxed too much paid no income tax. at least 1% now and 5% in '01.

[BR]

Pagar, thanks for keeping your eye on MERS, etc. Always appreciate your posts.

Question is, how will a $5 billion settlement from banks make the mersed up recordation whole again for property owners.

[larry]

Call these jackasses on it every time! Tax rate increases seldom increase tax revenues. The Bush rate cuts in '03 resulted in a sharp increase in revenue. Too bad W allowed spending to continue out of control so the revenue increase was masked and these jackasses get to keep lying about tax rates. Call them on it!

[cheap jerseys]

It is a failure of the nanny state elites who came to power in the election of 2008.