July 13th, 2011
in Op Ed

by Steven Hansen

Those that have followed my writing know that from time-to-time I take a swipe at Nobel Laureate Paul Krugman. Combining economics with partisan politics loses his message on most conservatives who view Professor Krugman as a liberal lapdog.

This is tragic as much of what Professor Krugman espouses are solutions most knowledgeable people could accept.  Although everyone has the right to express a political opinion, mixing politics and economics from a recognized expert in economics adulterates the economic message.

Follow up:

Professor Krugman's recent OpEd To the Limit is a completely partisan attack:

Bear in mind that G.O.P. leaders don’t actually care about the level of debt. Instead, they’re using the threat of a debt crisis to impose an ideological agenda. If you had any doubt about that, last week’s tantrum should have convinced you. Democrats engaged in debt negotiations argued that since we’re supposedly in dire fiscal straits, we should talk about limiting tax breaks for corporate jets and hedge-fund managers as well as slashing aid to the poor and unlucky. And Republicans, in response, walked out of the talks.

So what’s really going on is extortion pure and simple. As Mike Konczal of the Roosevelt Institute puts it, the G.O.P. has, in effect, come around with baseball bats and declared, “Nice economy you have here. A real shame if something happened to it.”

And the reason Republicans are doing this is because they must believe that it will work: Mr. Obama caved in over tax cuts, and they expect him to cave again. They believe that they have the upper hand, because the public will blame the president for the economic crisis they’re threatening to create. In fact, it’s hard to avoid the suspicion that G.O.P. leaders actually want the economy to perform badly.

If the tables were turned, the Democrats would be doing the same to the Republicans - Obama has wrongly voted against raising the debt ceiling in the past.  The political party in opposition always screws with the party in power.   This much of this debt argument is between two political parties who are both misrepresenting the situation.

The USA is at a debt crossroads.  The debt crisis did not start with the 2011 budget.  And trying to balance the budget in one year is stupid talk.  It is interesting that many Americans listen to the rhetoric, and associate personal and sovereign budgets.  The propaganda from AARP who believe this debt crisis is solvable without touching entitlements.   Others believe huge public works projects are the key to kick start GDP (thus getting more revenue for the government), while others believe cutting taxes will improve the economy (thus getting more revenue for the government.

The vast majority want the budget to balance without increasing taxes.

I do not believe a sovereign budget necessarily needs to balance, but the current debt buildup is destructive.  Just cutting spending here and there is NOT going to end the crisis.  New priorities must be established, and new approaches to government must be tried.

Professor Krugman's underlying message, however, is correct - the debt ceiling increase MUST happen.  The debt was caused by both political parties taking their eye off the ball.   If they did not want the debt to go up, why did both political parties keep funding foreign confrontations and bailouts, and legislate expanding social programs.  There is more than enough blame to spread around.

Because my background is not academic - but was on the execution end of policy, I will never fully agree with Professor Krugman.  I am a pragmatist, not a theorist.   There are reasons good ideas don't work.  But I will continue to read Professor Krugman's work, and pick out the grains of wheat from the chaff.


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  1. Dirk says :

    "Obama has wrongly voted against raising the debt ceiling in the past."

    When was that? Had it been clear already that with the Bush tax cuts extended and wars in Iraq and Afghanistan fought that the government debt ceiling would become a problem? If not, I find no fault with Krugman's position and I am sure that if a Democrat would hold the government up over the debt ceiling he would voice his anger just as vehemently. If, however, Obama voted against a rise in the debt ceiling just before he became president and the debt problem was clear already, I would agree with you.

  2. admin (Member) Email says :


    Thanks for raising the issue. The facts are not that well known. Obama voted against raising the debt limit in 2006. Here is an excerpt from a discussion presented at (

    Obama was asked directly about his vote on April 15, in an interview with George Stephanopoulos of ABC News. Here's their exchange:

    "You've got to extend the debt limit," Stephanopolous said. "And your job is a lot tougher because of your vote in the Senate against extending the debt limit. When did you realize that vote was a mistake?"

    "I think that it's important to understand the vantage point of a senator versus the vantage point of a president," Obama replied. "When you're a senator, traditionally what's happened is, this is always a lousy vote. Nobody likes to be tagged as having increased the debt limit for the United States by a trillion dollars. As president, you start realizing, you know what, we can't play around with this stuff. This is the full faith and credit of the United States. And so that was just an example of a new senator making what is a political vote as opposed to doing what was important for the country. And I'm the first one to acknowledge it."

    So Steve's statement about voting wrongly can be taken back to Obama's own words of a couple of months ago.

    John Lounsbury

  3. roger erickson says :

    Exactly. A retired teacher once said that it's important to let students make their own discoveries. Give people dry facts, and let them co-own their own conclusions. That's why it's far more important to combine discourse with patience, and have complete separation of policy & education.

    Tomorrow's context will be different, and you want people to be able to parse, not just blindly believe & try to propagate yesterdays instructions.

  4. daryl roberts says :

    Economists address a reality that incorporates political dynamics, not a sterile isolated set of metrics only. GOP positions could be viewed as just opposition party dynamics, but I think they overreach considerably, by their devotion to interests of the upper .01%. Its not just their intransigence over increasing upper marginal rates, but they muddy the waters by demagogically arguing that "all taxes" will be raised, & continue to stand by trickle down theory & financial deregulation, which has had 10 years, 44,000 manufacturing plants moved overseas, & a catastrophic meltdown driven by under-regulated derivatives- to demonstrate its failure as a framework. So opposition to revenue proposals, which have a social justice component, & opposition to financial regulatory efforts, can't be filtered out as merely partisanship. GOP mission has always been focused on methods to enhance wealth transfers upward. The best efforts to reduce entitlement spending would have been a single payor system, but because the GOP fostered a demagogic outcry against "socialism", it was taken off the table & the drama was played out over an inherently less effective structure to expand coverage AND reduce costs. I view with a jaundiced eye GOP posturing about concern for jobs, when most of their post mid-term legislation has been focused on abortion & other social issues, or actively attempting to cut funding that sustain public sector jobs, & supporting efforts to diminish union related job protections. I also find it typical of GOP perspectives to minimize treatment of defense spending as a significant factor, fixing on "% of GDP" as a metric that allows for continuing expansion; Dems are barely any more insightful. Chalmers Johnson pointed to the redundancy of 600 bases & an imperial reach that squanders far too much national treasure. I find it ironic that means testing as a method for reform of entitlements results in reversed partisan roles, when in simple class terms, both marginal rates & means testing should be coordinated. Complaints that there is a class war overtone should refer to Buffett's comments: "there's a class war, & our class is winning"...nicely understated. Krugman leads as a critic, doesn't seem to be anyone's lapdog.



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