Why Paul Krugman is All In for Hillary

During the insanity of the Bush/Cheney years, Paul Krugman was a voice of reason. He fought back against the deficit scolds and zombie liars and austerians in the wake of the 2008 crash, offering clear, understandable lessons in Keynesian economics, lessons that had been conveniently forgotten and had to be fought for all over again. He went on television and faced down establishment doofuses on a regular basis. For that, he deserves thanks.

But all during those years it was easy to overlook that Krugman was not, and is not, a progressive. His interventions in this primary season have made that abundantly clear. In October 2015, Krugman downplayed the significance of the repeal of the banking regulation known as Glass-Steagall in his analysis of the 2008 crash, despite the fact that many economists, including Joseph Stiglitz, regarded that act of deregulation as one that led to a banking culture that was bloated, reckless, entangled in complexity, and systemically dangerous.

Krugman's other major impact on American economic discourse has been on trade policy. But now that Bush is gone and the effects of the 2008 crash have been moved off the front pages, Krugman's basic economic orientation is again becoming clear, and it isn't pretty: his economics are straight outta the Clinton 1990s.

“NAFTA will have no effect on the number of jobs in the United States.”
--Paul Krugman, in 1993

“I support P.N.T.R. [with China]”
--Paul Krugman, in 2000

“I've described myself as a lukewarm opponent of the Trans-Pacific Partnership; although I don't share the intense dislike of many progressives [...]”
--Paul Krugman, in 2015

And how did that turn out for manufacturing towns and cities across the country? It's been a nightmare:

manpayrolls.png

Just think for a moment of all the social and psychological turmoil that is represented in this small graph. Imagine the many communities destroyed by the completely unnecessary outsourcing of much of our manufacturing. Imagine what it must be like to go from, say, making tables and chairs in a factory to telling WalMart shoppers that the cheap, Chinese-made tables and chairs are in aisle five. Krugman rarely acknowledges the tragic human toll of his free trade advocacy, and he usually has some excuse up his sleeve (such as "no one could have known China would manipulate its currency" or "no one could have known that more complex and high-tech manufacturing would be outsourced too").

So consider what it means to have Krugman's record. A substantial part of Krugman's intellectual and political legacy is the notion that "free trade" agreements such as the two big ones he supported (and the third that he kinda sorta set aside for the moment, much like his favored candidate) are better for us than we think they are. Bernie Sanders, who was against these trade deals (which he calls "disastrous"), thus represents nothing less than a complete repudiation of a concept that was and is at the core of Krugman's career. Krugman, for all his humor and apparent modesty, is not the kind of person to admit that sort of fundamental error. So remember those quotations above every time you see Krugman's attacks on behalf of Hillary.

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such rave reviews, but suggests Bernie's programs are too much. Meanwhile, Piketty has complimented Bernie's economic stances. I got with that latter.

Krugman is a human being and can be wrong. I seem to remember him being for the bailouts, and even gushed that Pr. Obama saved America by seeing the bailouts through. There were other alternatives to the bailout. They were never even mentioned.

Still, Krugman is pretty bright and it is worth reading his blog and column. Like any scholar, though, we shouldn't just accept anything he says. Certainly his politics are in support of status quo, like lots of people who live in bubbles. Joe Klein is acting like Marie Antoinette lately. "Everything is fine, why are people so angry?" Get the fuck out of your bubbles guys, leave the gated community and go see why people are pissed.

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Alison Wunderland's picture

Krugman's been espousing Limousine Liberal bullshit for the past decade. Sure, he was a "voice of reason" when he had the clear distinction of being a not-Bush, but aside from adhering to Keynesian economics, he usually doesn't know what he's talking about. Stopped reading him years ago.

Do you read Robert Reich? He's on the side of the Angels in my book.

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Oldest Son Of A Sailor's picture

I'll go with what Steve Keen has to say on economics...
He's got it right and Krugman is totally wrong...

[video:https://www.youtube.com/watch?v=KIaXVntqlUE]

Start this one at 3:48 for the Steve Keen forecasting the next recession...
[video:https://www.youtube.com/watch?v=7OSHu80IXi0]

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"Do you realize the responsibility I carry?
I'm the only person standing between Richard Nixon and the White House."

~John F. Kennedy~
Economic: -9.13, Social: -7.28,
detroitmechworks's picture

A neologism for our site, since that particular one is very TOP.

I'm going to go with "Close The Puzzle Box".

Essentially, banishing a demon we let in, but realize isn't doing us any freaking favors. (Hellraiser joke/reference)

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I do not pretend I know what I do not know.

Oldest Son Of A Sailor's picture

Put him/her on the compost pile...

Kind of a green waste recycling thing...

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"Do you realize the responsibility I carry?
I'm the only person standing between Richard Nixon and the White House."

~John F. Kennedy~
Economic: -9.13, Social: -7.28,

The first was well worth the investment of time. It revealed to me that neoliberalism isn't the uniform of economics. One might now ask whether there are enough like Keen to turn global economics away from what Keen convinces me is a disastrous course.

The second gave me a headache with the rah-rah hype pacing and noise despite Keen having some interesting things to say. Maybe someone can cut out the bilge and just leave Keen's part?

Edited for typo

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Vowing To Oppose Everything Trump Attempts.

Oldest Son Of A Sailor's picture

At the UMKC that a subscribing to this, several of which are advising Bernie...

Stephanie Kelton and William Black...

[video:https://www.youtube.com/watch?v=Q1SMjeuyF-Y]

[video:https://www.youtube.com/watch?v=FqIr45gRr-k]

You Can Find More Renegade Economics Videos Here...

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"Do you realize the responsibility I carry?
I'm the only person standing between Richard Nixon and the White House."

~John F. Kennedy~
Economic: -9.13, Social: -7.28,
cinnamon68's picture

Thanks for this diary. I've read Krugman for years, bought some of his books even. As economists go, he's better than most, though Stiglitz and Reich are really better. I think part of the problem with Krugman is that he's an academic (as I am) at an elite university (as I am not) and he doesn't see or feel the effects of these policies. I'm always wanting to ask "better for whom?" when trade treaties come into focus. The Krugmans see the big picture for elites as better and not the big picture disaster for everyone else. It might be that economists should have to personally experience the downside of the deeply conservative theories they teach and espouse. Maybe living with a Pinochet and not as a carpetbagger economist.

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cinnamon68

NWIA's picture

This is very astute. As an econ major at a decent school, there were supply siders along with a majority of profs who thought Reagan was a kook. My boredom with classes that patted themselves on the back by presenting theories that explained things that had already happened in the broadest, least useful way led me to take a class on labor. Yet this was not a class on workers. It was a class on the impact of human capital on the private sector. There was only one prof who saw the world beyond his graphs and who talked about actual human beings: the solitary Marxist.

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Galtisalie's picture

still there? Most heterodox economists have been rewarded for their people-first thinking with unemployment.

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NWIA's picture

I can see that some of the thoughtless slobs I had are now "emeritus" profs. But I can't tell if they still have a marxist.

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Miep's picture

By having tariffs, depriving those in other countries of the opportunity to make their seventy cents an hour making stuff for us. As if people in other countries were completely incapable of fending for themselves without foreign invasion and land ripoff, as if this would not become a race to the bottom. Talk about noblesse oblige.

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Stay on track. Stay in lane. Don't throw rocks.

He's the Thomas Friedman of economists. I'd like to smack some MMT into that insufferable gasbag's brain.

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lotlizard's picture

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Thomas Frank, in his new book "Listen Liberal", addresses the wrong turn (rightward) the Democratic Party took, starting with Bill and Hill. With the Clintons, a well-educated professional elite class started to run the show, after abandoning a more diverse population that allowed for a more representational and egalitarian mix of policies. The Party system grew increasingly rigged and the level playing field dried up. Accommodation with Republicans economically, while offering up a few socially progressive crumbs to voters became the modus operandus. As a consequence, the Democratic working class was lost to Republicans and the middle class was starting to desert as well. Obama, a Third Way Dem like the Clintons, lost the House, then the Senate, and still has voters confused about Why, oh Why, did he fight for the TPP, open the southeast coast to oil and gas drilling, capitulate to Republicans in Congress for most of his presidency, not jail the banksters, bail out Wall Street but barely help Main Street, and drop single payer for an expensive health care act that still doesn't cover 30 million people? Life is good and getting better for elites like Paul Krugman, the Clintons, the Obamas. These people, aside from Hillary Rodham, grew up poor, but tuition was affordable when they came up. That was a time when hard work and talent could get you a seat at the table. That is no longer the case, but they're so smug in their own accomplishments and so insulated from reality, they are all but blind in how life is for the rest of us.

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Galtisalie's picture

the global capitalist economy can be primed like a pump to work just fine. It is faith-based. A democratic socialist critique that economic rights have primacy and that Keynesian economics, while better than classical laissez faire, is not sufficient to protect humanity, undercuts his religion.

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Lookout's picture

When you live in a bubble, you become a bubblehead. I live in Alabama where the average person would deny being a racist while constantly spouting racist verbage. Elitists in the same way they deny their elitism. The 1% really doesn't get it. What's the problem everything is great?

The status quo works for the elite and Krugman certainly thinks he's in the club and will defend it to the end.

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“Until justice rolls down like water and righteousness like a mighty stream.”

Alison Wunderland's picture

Yo! Good morning, everybody.

Just got around to reading the comments...

http://krugman.blogs.nytimes.com/2016/04/01/feel-the-math/?_r=0

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He would have characterized himself as being to the right of center pre-Bush. His conversion to being a social Liberal occurred at that time, but his economics remained basically neoliberal. He is very clear that he believes that there are no structual flaws in the economy, that we only need more stimulus. With our kind of current national debt, that is a major gamble. The theory goes like this. We basically need to jump-start the economy and when it is going on all eight cylinders it will allow us to retire the debt. He has pointed out many times that we never paid the huge debt of fighting WWII; that inflation and growth and time basically wiped it out. He sees that scenario for our current problem. The isue here is that he is being totally unrealistic. Our economy is not about to bloom with income disparity at its current level. Basically the vast middle class is not part of the GDP growth of the last 25 years, so the vast integrated income and wealth of the broad class of consumers does not exist. The uber wealthy cannot grow an economy, yet they have all of the income and wealth. Joseph Stiglitz remains a far better economist. We do have a structural problem and as long as Krugman refuses to recognize this he is basically a useless economist. This is why Krugman supports Hillary and Stiglitz supports Bernie. My dream is that Stiglitz would be in a Bernie administration.

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Capitalism has always been the rule of the people by the oligarchs. You only have two choices, eliminate them or restrict their power.

is that he actually appears to grok MMT, and has named Stephanie Kelton as his chief economic advisor. In addition, there are a slew of left, and heterodox economists supporting his plans, and I'm especially pleased that William K Black (a hero of mine) is among the top 10:
https://berniesanders.com/wp-content/uploads/2016/01/Wall-St-Letter-1.pdf

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MonetaryLeviathon's picture

economic, monetary and trade policies over the past 25 years and Krugman adhered to his economic ideology like he deos to this day ... Krugman would be living in a box under a bridge and hundreds of thousands of people who do sleep in boxes and under bridges in the US today wouldn't be.

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