Krugman vs. Obama Smackdown! ~ dnd

s-paul-krugman-and-obama-large

Welcome to the main event. In this corner, in the extremely blue trunks, Paul “The Nobel Laureate in Economics” Krugman. And in this corner, in the moderate blue trunks, Barack “The President of the United States” Obama. Ladies and gentlemen, let’s get ready to RUMBLE!

krugman1

For a while now, NYT columnist Paul Krugman has been using his column and blog to eviscerate President Obama’s economic plan. He has been particularly hard on Treasury Secretary Tim Geithner, though he has not spared his wrath for the rest of Obama’s economic team. This is curious as he holds Lawrence Summers, Cristina Romer and Paul Volcker in such high regard.

The conspiracy theory is that he is miffed that he hasn’t been consulted by the Obama administration, or according to some, named to a position. There are four reasons Professor Krugman has not been brought into the inner circle.

  1. He doesn’t have the temperament. He has spent his entire adult life in academia. The only time he dipped his toe into the “real world” was a year spent with the Reagan administration as a staff member of the Council of Economic Advisers. He likes to lecture, and he does it very well. Working with others who have different ideas is not in his DNA.
  2. He has an Ivory Tower view of his discipline. Having little experience in the “real world” he is unaware of the non-technical issues involved.
  3. Having no experience in government, he doesn’t understand compromise in trying to politically sell a policy.
  4. He doesn’t want to. From the outside, he has no skin in the game, no accountability. Taking pot-shots is fun and easy. Working with others to develop viable policy is hard and open to criticism.

Make no mistake, Krugman is no dummy. He received his PhD from M.I.T. and has taught at some of the best economics departments in the world. His work on “comparative advantage” was brilliant and worthy of his Nobel Prize. And he is using his position as a “celebrity economist” to push his views. But his vicious attacks smack of politics and not constructive ideas.

For more on what makes Professor Krugman tick, read Even Thomas’ excellent piece in Newsweek:

http://www.newsweek.com/id/191393

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76 Comments

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76 responses to “Krugman vs. Obama Smackdown! ~ dnd

  1. Very interesting post there dnd, thank you.

    For many years I lived next door to one of the world’s premiere bio-ethicist, he had almost all the answers and was super intelligent, but he did exist a highly protected idealistic bubble.

    This surprised me from the Newsweek article-

    “Krugman has a bit of a reputation for settling scores. “He doesn’t suffer fools. He doesn’t like hauteur in any shape or form. He doesn’t like to be f––ked with,” says his friend and colleague Princeton history professor Sean Wilentz.”

  2. Ok, I now have some caffeine and nicotine racing through my system and I’m ready to comment on dnd’s very fine thread today! I think it’s no secret I’m a great fan of Dr. K., and I consider his daily piece on The Times web site required reading.

    D I agree with you he is not a politician and his views reflect that, as I said last week, I agree with him on the ideology, not the politics. As we now finally put the era of liberal bashing to an end Dr. Krugman is to be thanked for one of those who proudly stepped up to the plate and pushed an unapologetic liberal agenda.

    For the life of me I don’t why so many people got their knickers into a twist over Krugman’s comments, we are Democrats, walking in lock step behind any politician is not our strong suite (thankfully), and I’m grateful Krugman now sees part of his role in the public debate as that of holding the president’s feet to the fire. If I were to find fault with this president it’s his in my opinion
    concern for those in the middle, that being said I’m glad Krugman is there giving voice to those of us from the left.

  3. Good Morning 🙂

    President about to speak…

    I don’t agree that the GM CEO was a sacrificial lamb…..I think he failed miserably in his job. The evidence is in the failure to sell a product that people want….and the total failure of GM.

    It’s not rocket science.

  4. Agreed UB, GM took a very short view of things, and bares a lot responsibility in the great SUV push of the last 10 years, it’s time for Change, not just for the nation at large but very much for the auto industry.

  5. good idea for the govt. to back up the warranties of both GM and Chrysler.

  6. the other push for the SUV was the tax credit put forth by Bush, a company could write off the cost of the SUV…..

    …and the repeal of the MPG requirements

  7. well that whole “small truck exemption” on fuel standards was perhaps the greatest loop whole ever written into law.

  8. dnd

    Good speech. But Chrysler and Fiat? Hyundai would be a way better choice.

  9. dnd

    “As we now finally put the era of liberal bashing”

    I guess you missed Michelle Bachman’s latest rant…

  10. These auto companies have had 20 plus years to get on the right track….remember Honda’s first car?

    “The first car out of Japan to prove that the country was going to be a serious player. Reliable and well finished, it also made economic sense to buy a Civic, which outperformed gas-guzzling American rivals during the oil crises of the 1970s. ”

    http://tinyurl.com/c4n6rm

  11. horsedooty

    the first Honda I ever saw was when I was in Frankfurt, Germany. Must of been about 1968 or so. The SOB had a motorcycle engine and was a chain drive like a motorcycle. Was a very small car. The US mandates that autos must have a closed drive shaft so that car was not allowed to be imported.

  12. dnd

    Brian,
    I don’t care if Krugman is a flaming liberal. It’s ok by me. What I was trying to point out, and I think Evan Thomas demonstrated, was that his attacks were him just being pissy because he wasn’t invited to lecture Obama’s economic team.

    It’s ok to disagree with policy, however the non-stop incessant rants are indicative of something other that policy disagreement.

  13. nannymm

    Good morning, all. Nice post, dnd. Like Brian, I am glad that Krugman gives voice to the liberal position and holds Obama’s feet to the fire. I tend to agree with his position that Obama is not doing enough to pull us out of this economic morass we are in. I think it is going to take a new-New Deal to get this economy back on track. The longer we wait, the harder it will be.
    As to the forced resignation of Wagoner, I have mixed feelings about it. While I agree that he has failed to lead GM out of its troubles, he was not in charge of GM when most of the poor decisions were made, the decisions that led up to this current crisis. However, the CEO’s of many of the banks and financial institutions that have brought us to the brink of disaster, were directly responsible for the bad policies and decisions made by their respective institutions. Yet, none of those corporate heads have been forced out, with the exception of the former CEO’s of AIG, Fannie Mac and Freddie Mac. Likewise, the UAW was forced to give very significant concessions in order for the auto companies to receive bailout funds and now are being told that they must give even more. Yet no such concessions have been wrung from Wall Street. This strikes me at patently unfair, unwise, and just plain wrong. I’m surprised and disappointed that Obama seems to be fully on board with this. I suspect that he is going to pay a price for this. Labor will not forget; neither will many others.

  14. Can’t agree with you there dnd, I don’t think Krugman is throwing a hissy fit, he is by all accounts America’s foremost Keynesian, he’s fulfilling that role.

    And on another point I think Fiat is the only one really interested in buying Chrysler, they’ve been looking for a way back into American market for a long time.

  15. That’s cool Doots,

    Honda was smart enough to adjust and continue to develop their product, thus allowing expansion into the US market.

    I feel for the auto workers, but it’s like any other business, you have to provide a product people want to buy, and you have to do it within your cost structure…or the company fails.
    _____
    I think Kugman is in a good place, he is able to make his points, create discussions, and then walk away. If he gets pissy once in while, so be it….if he get too pissy people will scream sour grapes.
    ____
    The auto companies have had over 40 years to get it right. The SUV craze really hurt them because the price per unit was so high….even if the same number of auto are sold this year, the revenue will be substantially lower. People finished buying 40k+ autos on credit….that party is over.

  16. dnd

    “Likewise, the UAW was forced to give very significant concessions in order for the auto companies to receive bailout funds and now are being told that they must give even more. Yet no such concessions have been wrung from Wall Street.”

    Nannymm,
    I’m curious, what sort of concessions would you want Wall Street to give?

  17. You know the entire SUV disaster was no accident, it was created by exemption of small trucks in the CAFE standards.

  18. A hike in the capitol gains tax would be a very good start dnd, also a transaction tax on stock trades also.

  19. dnd

    “I think Kugman is in a good place, he is able to make his points, create discussions, and then walk away.”

    Sra Burrito, I agree, and I think he loves it there. But for economic thought, the MSM should bring in other economists who aren’t such ideologues. I’d suggest Robert J. Shiller.

    ps. Shiller’s book “Irrational Exuberance” is great reading for anybody who invests.

  20. The ford Fiesta looks really good…but my last Ford was a nightmare….1998 Ford Windstar purchased brand new – replaced with a 2003 Honda Odessey…..won’t be back in a Ford anytime soon.

    Gas guzzlers and record profits for big oil.

    Carry on everyone….see you later

  21. Sorry that Gas Guzzler comment, was to the connection of the CAFE standards and SUVz……..I’m late….ciao

  22. dnd

    “And on another point I think Fiat is the only one really interested in buying Chrysler, they’ve been looking for a way back into American market for a long time.”

    My point was that Hyundai has risen from the ashes. Remember the Hyundai Excel? A step up from the Yugo, but not by much. Now they make great cars that are in demand.

  23. “MSM should bring in other economists who aren’t such ideologues”

    I don’t think that’s really the heart of the issue, Krugman’s popularity is not a creation of MSM. Krugman stepped into a role that had been vacant in this country for a very long time, reminding people that economics is not just an issue of dollar and cents but a vehicle for social justice (and injustice). Also the man is a first rate smart ass which also makes him a good interview.

  24. dnd

    “A hike in the capitol gains tax would be a very good start dnd, also a transaction tax on stock trades also.”

    1. capital gains should probably be progressive so if someone who earns $5000/year would be taxed at a different rate than someone who makes $5,000,000/year.

    2. There is a transaction tax on trades. It’s called capital gains.

  25. Capital gains taxes are not the same as a financial transaction tax.

  26. dnd

    They are if you have gains! What you are proposing is the same if you buy a pack of gum you should pay a tax for the act of buying the gum, in addition to the sales tax.

  27. nannymm

    For starter,dnd, I would like to see a severe cap on bonuses at any company that receives taxpayer funds; a cap on interests rates on credit cards; major limits on expense accounts; salaries more in line with other industries, and significantly higher taxes on incomes over $250,ooo. It would also be nice to see penalties on those companies that enticed the elderly, minorities, and other unsuspecting consumers to purchase sub prime and other toxic mortgage products. And, I would also like to see these so-called geniuses who dreamed up many of the toxic asset products be investigated and prosecuted if it is found that they broke any laws or violated the public trust. Beyond that, I’m open to suggestions.

  28. eProf2

    Paul Krugman doesn’t live in the “real world”! Give me a break, and every other professor in higher education today, yesterday, and tomorrow. Re: Professor Krugman, he writes for the NYTimes, appears on television, and lives a private life, paying taxes, worrying about his kids’ college education, and all the other things people in the “real world” do. Academe is an integral part of the real world, unless you think educating the next generation, discovering scientific breakthroughs, fending for tenure, constantly being reviewed for scholarship isn’t real enough to qualify as being in the real world.

    Non-academics are forever throwing this shibboleth out to defame or demean someone is inappropriate for another-wise excellent post on the differences between Krugman’s thoughts and those of the president. To castigate Krugman as not being of the “real world” is to red-bait in the tradition of McCarthyism. And, dnd, I don’t think that’s what you meant to do. It’s unfortunate that non-academics simply throw that phrase out to somehow denigrate the professoriate, in this case Professor Krugman.

  29. Hey eprof, good to see you, and sorry d, but I do think eprof brings up a very valid point, one I wish had occurred to me!

    🙂

  30. nannymm

    Great point, eprof. The professors I know all have mortgages to pay just like the rest of us. They shop and pay bills, worry about healthcare and tuition costs, and toss and turn at night as their retirement accounts disappear.

  31. And dnd capital gains tax are an after the fact tax, dependent on making gains, likening a capital gains tax to a sales tax just doesn’t cut it for me. We charge taxes a great many products regardless if a profit is made or not. Why should stocks be exempt?

  32. Chrysler to merge with Fiat, just announced. Damn we live in a fast paced world.

  33. nannymm

    I wonder why so many in this country like to bash the well educated, the thinkers, the intellectuals? Perhaps all that bashing is why our educational situation is so dismal. Other countries value education; well educated individuals are admired and valued, not eschewed. But our society prefers “Joe the Plumber” and so-called “regular folks” like him. No wonder we’re in the mess we’re in.

  34. dnd

    Oh boy, didn’t mean to piss off eprof2…

    What I meant is that Krugman has had a career in academia. Obama’s team has had careers in academia, government and business, which brings a broader perspective.

    I didn’t mean to diss professors in general. As you point out, professors are essentially small businesspeople. There are some of my professors from grad school I’m still in touch with. There are professors in my family.

    My point was that Krugman is a whiny weenie 😉

  35. “whiny weenie ”

    Name calling? For shame, for shame!

    😆

  36. horsedooty

    “But our society prefers “Joe the Plumber” and so-called “regular folks” like him.”

    Nannymm,
    if this were the case then I believe that McCain would have been elected president. JTP gets a lot press as does Palin but it looks like the voting public rejected that chain of thought to some degree. At least enough to vote President Obama into office.

  37. eProf2

    No, dnd, you didn’t piss me off one bit. It’s just that so many people fall into the trap of saying academics don’t live in the real world that I just had to respond to your otherwise excellent post.

    Brian, I’m around a lot, just don’t always comment. Thanks for maintaining the web page.

  38. dnd

    “For starter,dnd, I would like to see a severe cap on bonuses at any company that receives taxpayer funds”

    Nannymm,
    Me too, but that’s not gonna fix the financial credit crunch. I think regulation, and more importantly enforcement of regulation, is the key, not concessions.

    ps. I think the wage disparity between CEO and workers in America is obscene. But I think that’s a cultural problem, not a governmental problem.

  39. dnd

    eprof2,
    I probably will try to piss you off when my Rockies crush your Dbacks 😉

  40. pissing off people aint all that bad!

    🙂

  41. eProf2

    dnd, yeah, in your dreams about the Rockies. They’ll be lucky to win 70 games this year. Look out 100 losses here come the Rockies! LOL!

  42. dnd

    eProf2,
    One week from today my friend, one week from today…

    You gonna be at Chase Field?

  43. EProf2,
    What I mean by “living in a bubble”, is it’s a different place where ideas and complex theories are promoted, explored, written and taught to those who seek to take that knowledge into an occupation outside of academics. The professors I know have not been responsible for the bottom profit line of their respected College or University, and most have pretty solid job security.

    One could easily say many occupation exist in their respective bubble….I think it’s the nature of narrowly defined vertical careers.

    Didn’t in any way want to offend you, and am truly sorry if I did. I understand your point and I am thankful you took the time to express your thoughts.

    ~peace

  44. If JTP is the regular American “guy folk” – who would be the stereotypical regular American woman folk?

  45. dnd

    Here’s a good reason for universal health care:

    “Good Samaritan Recovers After Being Hit On I-25”

    http://cbs4denver.com/local/denver.blizzard.survivor.2.971203.html

  46. I say give the guy a Morphine pump! on the house!

  47. eProf2

    UB, I took no exception to anything you had to say re: bubbles, et cetera. Almost everyone lives, thrives, or dies in a particular segment (bubble or their own world) of society. Many move from one segment to another, ie., change careers or jobs. I did as I went from being an airline mechanic for seven years until I could finish my degrees and start a community college teaching career, which lasted 34 wonderful years. Well, maybe not always wonderful, but I wouldn’t have wanted to do anything else in my working life.

    dnd, no I won’t be able to go to Chase Field for the first home stand, perhaps, the second or third, as I actually have some things on my plate (no pun intended), including watching the grandsons play baseball at the high school level two, three and sometimes four times a week. I’ll try to catch some if not all of the tv games as FoxAZSports will be covering 150 games this year, with some of the other games on the Saturday game of the week.

    I don’t think I’ll set up the 13 run game this year, but I’ll think of you should the Rockies score 13 at any time this season. Check in at eprof2 once in awhile to see how the game of 13 is going.

  48. High school sports are so fun to watch, especially when one of your own is playing…Happy you are able to see him play. 🙂

  49. tesla

    World’s first mass-produced electric vehicle offers performance, efficiency and unrivaled utility, making it the only car you’ll ever need.

    http://www.teslamotors.com/models/index.php

  50. When we start seeing motels offer the ability to charge your vehicle when you stay there we’ll know the electric car has arrived.

  51. also there hasn’t been given much thought to how people who don’t live in a detached single family dwelling will deal with them.

  52. Good points

    Parking garages would have to install outlets, and offer charging docks services, and for a new business idea mobile solar powered generating carts for street parkers…..

    they will think of something…

  53. “I’m chairman of the RNC, what’s your point?”

    too too funny

  54. horsedooty

    up in North Dakota because of the cold harsh winters the motel I stayed in had outlet poles at nearly ever spot on the parking lot. They were for plugging in the dip stick heater so the oil did not freeze.

    Sra Burrito’s point about parking garages furnishing power for recharge is happening in some parts of the US.

  55. horsedooty

    Brian said,

    “I’m chairman of the RNC, what’s your point?”

    too too funny

    One of the funniest things is that the Repubs can’t just fire him either. He has to agree to step down. Look for more foot in mouth statements from RNC Chairman.

  56. He seems to posses all the emotional maturity of a 12 y/o.

  57. dnd

    Doots,
    I use to travel to Sioux Falls on business and they had the same thing. Plus, when you rented a car, they started it and got the heater going before you got to the car.

    ps. Next time you get to that neck of the woods Tea SD is great. Particularly the Tea Steak House. It’s exactly what you’d expect in small town SD. There’s a sign on the wall that says: “Take your sugar to Tea.”

  58. dnd

    “I’m chairman of the RNC, what’s your point?”

    I’m thinking we need a post and a poll as to who’s the looniest member of the GOP. Steele? Palin? Bachmann? Jindal? Cantor? Newt? Anybody else have any ideas? It’s no wonder Mike Pense is always pissed off…

    The left has their kooks too. When Charlie Rangel said that Geithner came from Wall Street, clearly he hadn’t seen Geithner’s resume (and owes him an apology). But they’re nothing compared to the right-wing wackos.

  59. But they’re nothing compared to the right-wing wackos.

    Bares repeating!

  60. Limbaugh said. “Barack Obama’s policies and their failure is the only hope we’ve got to maintain the America of our founding.”

    http://tinyurl.com/cwmj8y

    Rush is rerunning…looking for a little more spotlight…and prime time.

  61. some of beauty of a fast news cycle….old news Rush….

  62. dnd

    When Obama said that Buick’s were good cars, he knew of what he speaks. Last time I went to buy a car the first stop was at my reliable, trustworthy mechanic. I asked him what were the makes and models that he rarely saw in his shop. I asked him what he liked to work on. I asked him what was the cheapest repair. Among the usual suspects (Toyota, Honda, Subaru), he mentioned Buick, particularly for cheapest repair.

  63. Yes I’ve seen a few articles in The Times in praise of Buick. Pontiac is a goner though, I think GM will be down to 3 brands by the time this over.

  64. Limbaugh: ‘If Obama Fails, America Is Saved’

    http://tinyurl.com/cwmj8y

  65. I realized after I posted it but decided not to take advantage of my powers as blog over load and delete it!

    😉

  66. Still the talk of the town….if you know what I mean….

  67. Oh you read the New Yorker too? LOL

  68. don’t you know it…. 🙂

  69. This was most likely touched upon earlier, but Krugman serves another purpose; he has the ability say things that the insiders can’t say publicly but may be thinking, and reaction to Krugman’s words can be utilized to gauge public and political opinions.

  70. ” Shows just how deep this illogical rabbit hole goes”

    referring to Steele’s:

    “I’m chairman of the RNC, what’s your point?” on KO

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