Thursday, January 28, 2016

Krugman is not only wrong about Bernie Sanders, he's also wrong about the New Deal

(WPA workers on a road improvement project in Baltimore, Maryland, 1936. Photo courtesy of the University of Maryland College Park Archives.)

Krugman is wrong on Sanders and his supporters

In a recent op-ed, economist Paul Krugman critiques Bernie Sanders and his supporters. His concern is that Sanders and his supporters are wide-eyed dreamers, unaware of political realities:

"The point is that while idealism is fine and essential--you have to dream of a better world--it’s not a virtue unless it goes along with hardheaded realism about the means that might achieve your ends... Sorry, but there’s nothing noble about seeing your values defeated because you preferred happy dreams to hard thinking about means and ends. Don’t let idealism veer into destructive self-indulgence."

But former U.S. Secretary of Labor Robert Reich suggests otherwise:

"Krugman doesn’t get it. I’ve been in and around Washington for almost fifty years, including a stint in the cabinet, and I’ve learned that real change happens only when a substantial share of the American public is mobilized, organized, energized, and determined to make it happen." 

I agree with Reich; and I don't think Krugman understands Sanders' supporters (of which, I am one). We understand that Sanders, if elected, will not get everything he's fighting for. But we want someone who will use the bully pulpit more aggressively than President Obama has. We want someone who comes to the bargaining table with more fire, and a higher starting offer. Too often, Obama has begun negotiations with a low bid, and then caved even further. Sanders and his supporters know that compromise is often necessary but, damn it, you have to come in swinging. Politics is dirty and nasty - always has been, always will be. With so much economic inequality today, and so much financial corruption, we need a fighter; not the "adult in the room" who passively let's the country swing further to the right in an effort to remain genteel. 

Krugman is wrong on the New Deal

Krugman also writes, "And the question Sanders supporters should ask is, When has their theory of change ever worked? Even F.D.R., who rode the depths of the Great Depression to a huge majority, had to be politically pragmatic, working not just with special interest groups but also with Southern racists. Remember, too, that the institutions F.D.R. created were add-ons, not replacements: Social Security didn’t replace private pensions..."

Krugman is right that FDR was hindered by southern Democrats who were highly, and openly, racist. But he's wrong that New Deal institutions were "add-ons, not replacements." In fact, he's shockingly wrong.

The Securities and Exchange Commission was not an add-on. It was a replacement for a wild-west, fraud-ridden stock exchange. The Civilian Conservation Corps was not an add-on, it was a replacement for deforestation. The WPA and other New Deal work programs were not add-ons, they were replacements for unemployment and infrastructure neglect. The Rural Electrification Administration was not an add-on, it was a replacement for a powerless rural America. I could go on all day long - the TVA, certain parts of the Fair Labor Standards Act, the Soil Conservation Service, and so on. All of these things were wide-ranging, breathtaking replacements for the status quo. I'm not even sure Social Security can properly be deemed an add-on. It's true that it didn't replace private pensions - but did everybody have a private pension? For those who didn't, wasn't Social Security a replacement for a penniless retirement?

Paul Krugman is a great economist, and has persistently provided a rational voice to counter the foolishness that spews from the mouths of billionaire-backed Republicans and Tea Partiers. But his remarks on Sanders and the New Deal are not his best moments.

3 comments:

  1. This comment has been removed by the author.

    ReplyDelete
  2. Someone in the know just told me that the otherwise rational Paul Krugman has taken political fire from the Hilary team. What exactly the H camp used to rile PK into acute irrationality is beyond my info bank. (Not that PK was ever a beacon of radical light. In most print venues at least, his economic vision is rather dim at times. Please elucidate, if you will the tipping point for this severe PK meltdown.

    ReplyDelete
    Replies
    1. Thanks for your comment. As far as I know, Krugman is solidly in the Clinton camp. But, as an op-ed writer, I'm sure he's bound to irritate everyone from time to time. It's just the nature of the business I suppose. I like Sanders, even in light of Krugman's critique, because he seems to be the only candidate who isn't in the back pocket of Wall Street.

      Delete