In case you missed it (I only saw it because I fortuitously happened to be flipping channels), Krugman appeared on Stephanopoulos’ ABC vehicle This Week. It was great – he left that old toady George Will puffing for air:
GEORGE WILL (Off Camera): Two points. Two points we keep saying, the sluggish economy. In spite of all the shocks it's endured, it grew at 2.4 percent last year. Compound that over 30 years the size of the economy doubles. That's not chopped liver. The European Union would love to have it, second, last year . . .
FAREED ZAKARIA [IIRC this comment as well as the following one attributed to Zakaria were actually spoken by Krugman] (Off Camera): Unemployment is going up every week, George, as you see.
GEORGE WILL (Off Camera): Still at 5.8 percent.
FAREED ZAKARIA (Off Camera): That's a meaningless number.
GEORGE WILL (Off Camera): It's the number we deal with.
GEORGE STEPHANOPOULOS (Off Camera): Why is it meaningless?
PAUL KRUGMAN: Because for reasons we don't understand a very large number of people are dropping out of the labor force. The right number to look at is job growth which has been negative. You know, we've lost 2.2 million jobs since early 2001. Almost 500,000 of those in the last two months. You know, you may say GDP is growing. The guy who lost his job six months ago and can't find another one doesn't care what GDP is doing. He cares what's happening to the job market and the job market is steadily deteriorating. Mysteriously, that's not showing up in the measured unemployment brief but you look at what happening and you discover that's not because jobs are growing, it's because more and more people are dropping out of the, are saying when they're asked have you been looking for a job in the last two weeks, they say no, I can't find one.
GEORGE WILL (Off Camera): If you're gonna, if you're gonna stipulate that the numbers coming from the government are meaningless then we have trouble . . .
PAUL KRUGMAN: No, we look at the battery of numbers. And sometimes one of them is probably a reliable indicator.
GEORGE WILL (Off Camera): Let me give you a, let me give you a number 'cause this goes with what Fareed was talking about, what needs stimulated. Last year alone, one year, Americans put $150 billion in their pockets to refinancing their mortgages. Now, that dwarfs what we're talking about in terms of the year on year tax cut.
FAREED ZAKARIA (Off Camera): But there is a limit to refinancing. Interest rates are moving into Japanese levels.
PAUL KRUGMAN: But that's, but that, that in a way, that's the indictment of the tax cut, right? We're talking about these tax cuts which are $350, $550 billion but at least in the Administration proposal more than 80 percent of that comes after 2004 so these are, whatever the tax cut is about it's not about stimulating the economy, okay, I think it's about, I think it's about scoring. Winning a game.
GEORGE WILL (Off Camera): But Paul, that insulates, that insulates it from the, the accusation that it's merely about reelecting the President because clearly this isn't going to kick in and change life for the second quarter of next year.
GEORGE STEPHANOPOULOS: (Off Camera) And that is the last word this week. Thank you all. We'll be right back with George Will.
As you can see the old fraud Will is unused to anyone (certainly not Cokie or Sam) questioning his “wisdom” and when confronted with facts tries to spin wildly.
The ending, with Will trying to claim that the stimulus impotence of the Bush tax give-away somehow speaks to its virtue is pure looking-glass stuff.
Unfortunately the transcript does not convey the grasping-at-straws desperation that was evident in Will’s increasingly shrill attempts to obfuscate the basic issue – the economy sucks.
And Stephanopoulos’ intervention had the feel of a boxing ref halting a fight that had got ugly in order to award a TKO.
As far as I can tell Krugman is not a regular on this program so you might want to tell ABC that he should be by clicking here.
[Click on this link for the full transcript addressing Korea, WMD etc.]
Krugman also used his latest column in the NY Times to hit home the basic point he adumbrated on ABC – the economy is about jobs (it doesn’t matter how wealthy the US is on average if you don’t have a job) and the Bush economy has become a job-sucking machine:
Jobs, Jobs, Jobs
Did you know that President Bush's economic plan will create 1.4 million jobs? Oh, and did I mention that the plan will create 1.4 million jobs? And don't forget, the plan will create 1.4 million jobs.
Republican politicians are obviously under instructions to push that job number. On the Sunday talk shows some of them said "1.4 million jobs" so often that it sounded like an embarrassing nervous tic.
Of course, there's no reason to take that number seriously. Basically, the job-creation estimate came from the same place where Joseph McCarthy learned that there were 57 card-carrying Communists in the State Department. Still, let's pretend that the Bush administration really thinks that its $726 billion tax-cut plan will create 1.4 million jobs. At what price would those jobs be created?
By price I don't just mean the budget cost; I also mean the cost of sacrificing other potential pro-employment policies on the altar of tax cuts. Once you take those sacrifices into account, it becomes clear that the Bush plan is actually a job-destroying package.
Not that the budget cost is minor. The average American worker earns only about $40,000 per year; why does the administration, even on its own estimates, need to offer $500,000 in tax cuts for each job created? If it's all about jobs, wouldn't it be far cheaper just to have the government hire people? Franklin Roosevelt's Works Progress Administration put the unemployed to work doing all kinds of useful things; why not do something similar now? (Hint: this would be a good time to do something serious, finally, about port security.)
The answer is that we can't have a modern version of the W.P.A. because, um . . . because tax cuts are essential to promote long-run economic growth. Yes, that must be it. Just look at a new study by the Congressional Budget Office, now headed by an economist handpicked by the Bush administration. It concludes that the Bush plan may have either a positive or a negative effect on long-run growth, but that in any case the effect will be small. Wait, that's not the answer we wanted. Quick, find another expert!
Meanwhile, the United States is in effect about to run a W.P.A. program in reverse. That is, as a nation we're about to reduce spending on basic needs like education, health care and infrastructure by at least $100 billion, maybe more. And these spending cuts — the result of the fiscal crisis of the states — amount to a job destruction program bigger than any likely positive effects of the Bush tax cut.
Until recently it has been hard to get people excited about the states' worst fiscal crisis since the Great Depression. For about two years state governments were able to use fancy financial footwork to put off the full effects, and the public probably regarded warnings about looming catastrophe as exaggerated. But now, as Timothy Egan reported yesterday in The New York Times, states are "withdrawing health care for the poor and mentally ill. They are also dismissing state troopers, closing parks and schools, dropping bus routes, eliminating college scholarships and slashing a host of other services." Not to mention unscrewing every third light bulb in Missouri government offices. (Honest.)
Aside from their cruelty and their adverse effect on the quality of life, these cuts will be a major drag on the national economy. So if the administration really cared about jobs, it would provide an emergency package of aid to state governments — not to pay for new spending, but simply to maintain basic services. How about $78 billion — the same sum just allocated for the Iraq war?
Oh, never mind. Anything that would distract from the tax-cut message is out of the question. In fact, rather than compromise on its goal of maximum long-run tax cuts for the wealthy, the administration now says that it's willing to phase tax cuts in gradually — making them even less effective as an economic stimulus.
So when you take the policy consequences into account, it's clear that the administration's tax-cut obsession isn't just busting the budget; it's also indirectly destroying jobs by preventing any rational response to a weak economy. In its determination to stay on message, the administration is also determined not to do anything that would actually help ordinary families.
But did I mention that the Bush tax plan will create 1.4 million jobs?
As far as I know Krugman is the first person with access to the media to accurately spell out the opportunity costs of Junior’s economic “plan.” By giving so much tax money away Bush actually costs the economy jobs that could otherwise be created (or maintained) through a more prudent use of resources. Bush’s plan is not just unfair and expensive – it is inefficient and is costing Americans jobs that are needed and could otherwise be created and/or maintained – for example in schools, cop-shops, healthcare and “homeland” defense.
However don’t hold your breath waiting for the punditocracy to appreciate the truth behind this basic principle from economics 101. The “celebrities” at the top of the media food chain directly benefit from Bush’s tax plan and his borrow-and-spend policies. First Enron, now the US govt: the folks at the top are not about to clue us workaday “losers” in to the truth.
12:58:59 PM 
|
