Krugman: White House Excluding "Progressive-Economist Wing"

Newsweek's Michael Hirsch profiled Joseph Stiglitz for next week's magazine, asking why a world-renowned economist who predicted the financial crisis has been left out of the administration.

[W]hile he may be a Nobel laureate, in Washington he's seen as just another economic critic--and not always a welcome one. Few Americans recognize his name, and fewer still would recognize the man, who is short and stocky and bears a faint resemblance to Mel Brooks. Yet Stiglitz's work is cited by more economists than anyone else's in the world, according to data compiled by the University of Connecticut. And when he goes abroad--to Europe, Asia, and Latin America--he is received like a superstar, a modern-day oracle. [...]

While he had no great desire to go back into government, friends say he was deeply disappointed when an offer didn't come from Obama last fall. Not surprisingly, Stiglitz believes his old rival was behind it, though Summers denies this.

In a blog post Sunday morning, Paul Krugman said Hirsch "somewhat misses the point." It's not that Stiglitz is being excluded because of his criticism and his tendentious relationship with some Obama officials, Krugman says. Rather, an entire economic perspective is lacking in the White House.

[T]he larger story is the absence of a progressive-economist wing. A lot of people supported Obama over Clinton in the primaries because they thought Clinton would bring back the Rubin team; and what Obama has done is ... bring back the Rubin team. [...]

I think the real story is more about excluded points of view than excluded people.

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Comments

[hardrain77]

I think the problem is that Joseph Stiglitz probably never worked for Goldman Sachs. How else is he expected to catch Obama's ear?

[getsit]

I voted for Clinton in the primaries and would have loved to have her a president. Obama was my second choice because of his statements on healthcare not being mandatory. He is doing exactly what most progressive voters though Hillary would have done. I see Hillary to the left of Obama on many issues I am concerned about. Today's economic and healthcare issues are proving it to me. I am extremely unhappy with Obama.

[jmpurser]

I see Obama having fallen to where Hillary promised to start off.

[getsit]

nahhhh. People didn't listen. People didn't pay real attention to what was being said or understand it. The messiah had come.

I like someone who knows where the bodies are buried, not someone who is willing to compromise to the extent that we lose. Someone who will fight for a progressive agenda. Someone who knows how to really negotiate. Someone who knows we can't "all just work together." This is a fact for this country. By the time someone is elected, the opposition is already working to destroy the elected.

[conservatist2010-12]

Left vs. Right During a recession Republicans think that tax cuts create job growth....Democrats think spending future money up front creates growth......

[pragmaticdallasite]

When a business makes a capital investment it's not immediately profitable.

How does a business make money without spending it?

[lightningbolt]

It doesn't matter what party is in power. The Treasury Secretary and the President's economic advisers will always be from Wall St., and Wall St. hates progressives because they cut into their ill-gotten profits. Until Summers and Geithner are replaced, Obama will have absolutely no credibility in his economic policies.

[jozzie]

Wall Street will always be in power if WE don't do anything about and accept it passively.

[conservatist2010-12]

Not really.....the tea parties are not only against high taxes(we believe you should keep as much of YOUR money you can).....they are against the power of the government,and the shredding of the Constitution for 2 decades...We the people are makilng a stand,and I welcome all to participate...The government should be scared as hell of us...we are their boss....If a state wants gay marriage (by votes)..they should get it....We should be voting on all kinds of things(but we let them make our decisions for us)..ENOUGH IS ENOUGH

[mioffe]

Dear lightningbolt & jozzie Wall St., banks only distribute our money to Companies.
If perhaps, mortgage and cars companies create bubbles it is not foult of bankers or Wall St.
It is mass media, advertisement, create vacuum in our minds.

When we received profit or visibilities of profit we invest. We must blame ourself for our stupidity, not make others responsible for that.

When Government spent money to support bubble or their result-it is huge problems.

[jozzie]

"Wall St., banks only distribute our money to Companies"

Ew boy... I recommend you read anything recently written about Goldman Sachs.

You are dangerously under-informed about what this last meltdown of ours REALLY was.

[mioffe]

No, dear jozzie I am informed enough how bubble system work-without your own decision no one Goldman Sachs, nor Madoff will take your money.
It was true as for Internet bubbles as today.
Our economy is sick and working on old ideas. If person sick his blood is also sick.
Money are blood of economy.
In information technology we have innovation and the best products in the world.
Finansial crisis bring damage even for them.
Slogan "it is economy, stupid" is working again.

[pragmaticdallasite]

This is the institutionalized establishment thinking us Progressives are up against:

Bernanke's Bad Teachers

http://www.dollarsandsense.org/archives/2009/0709friedman.html

[jozzie]

Excellent article. I've bookmarked it.

Seems there were two financial "systems" at work. Toxic waste being sold as platinum, and then there was The Fed supporting it all, fertilizing it and giving it more oxigen.

What pisses me off is the "conservative" misinformation machine's mantra blaming Fannie/Freddie for a system that they were only a small part of. Anytime I hear the words "Fannie" or "Freddie" in a conversation about the meltdown, I know it's coming from an ignoramus.

[pragmaticdallasite]

Exaclty.....and apparently Barney Frank was the most powerful man in Washington despite being in the minority for 12 years in Congress.

[JackieRSM]

Very well put jozzie!

[olmossy]

Not only that, but as far as I know, Freddie and Fannie are both Private, Stockholder owned companies since the late 60s.
Even though they were inspired by the Government origanly.
I would guess when the Government ran program started really making money, the Big Banks steped in and took over. Now everyone wants to blame the Government.

[mioffe]

Our economy need new directions. We have cars, but it is too costly to pay for fuel.
We have houses but it is too difficult to afford their prices for millions of people. If it will be zero interest rate it is too difficult to pay anyway for heating, cooling and others utilities, if we are loosing jobs.

In this situation bankers, lawyers, even economists couldn't solve our problems.

We need more Inventors to found new sollutions.

Our problems are Managers, which became Managers directly from school of Management. They do not understand spirit of invention and always trying to make profit from old direction:
Houses are profitable, let put money in houses,
Cars are profitable, let put money in them.

We need put money in absolutely new directions.
Only Inventors, Scientists, Engineers could provide them.

What our Companies and Management are doing with Inventors?
They pay them mostly $300-$1000 and that it.

Government could change this situation.
It is better to pay for new inventions, which create job, than for unemployment, which is waste of money.

[pragmaticdallasite]

Yes, government investments in R&D brought us the Internet.

[pragmaticdallasite]

Exxon just announced a $600 million investment in research for commercial algae production. The inventor previously lived off of Government grants......without that Government investment this would not be happening.

http://www.nytimes.com/gwire/2009/07/16/16greenwire-some-see-exxon-investments-into-alt-energy-sig-14080.html

[mioffe]

Dear pragmaticdallasite, of course to be oil independent is great direction, but if Exxon management will ask me, I will ask them:

WHY? Why are you investing in new fuel for almost the same old cars?
In cars weighting more than 2000 Lb person with average weight 200 Lb is moving to job and back. Real efficiency of this movement if we will calculate fuel production and distribution, stop on every light, heating (cooling) etc will be less than 1%.

Electrical power allow us to create small 20 Lb cart, which will moved by road, on road without intersection. It will be zero emission transportation.

[conservatist2010-12]

The EU has dropped their "climate change programs"...they have failed....Socialim has left France with 8% average unemployme­nt...Spain is at 18% now....the entire EU has switched to the Conservative Party

[conservatist2010-12]

Capitalism is the reason we have passed up EVERY OTHER COUNTRY in 233 years.....Right now we have both Socialism,and Capitalism­......Soci­alism has never worked anywhere...it has been tried for 2000 years....I dont like the mix...Pure Capitalism is the best system..bu­t...Democr­ats dont like it because the more you learn,work,and apply...the more money you get....It leaves the mindless behind...Actually it helps them also,but its hard to sell to the people.....In a Pure Capitalistic system Welfare would be $20,000 a year(because of the wealth created as a whole......In Socialism (the money eventually runs out,because it takes the drive away)..why work hard if someone will take it...the result is less money and wealth created...and Welfare drops to $12,000 a year

[jozzie]

Oh, it's you again. Posting the same adolescent drivel.

The U.S. became a super power for LOTS of reasons. The biggest one being that it was BIG. Our form of capitalism has been the most wasteful of human resources, and locked into ruinous cycles of booms and busts. The regulations that were put in place back in the 30's afforded us the longest reprieve in this depressing cycle -- long enough for the rapacious aspects of capitalism to forget how it shoots itself in the foot and long enough to actually TAKE OVER the government. We now have a corrupt government working for the banks, not us. Financial sector is now 40% of GDP, a vampire sucking the life out of real wealth.

Do some reading and stop spewing the same baseless nonsense you seem to be so proud of espousing.

[pennstater21]

Laughable, you have no understanding of what creates the boom and bust cycle. Government intervention with the interest rate and money supply! It simply sends mixed signals to the entrepreneur making him believe a capital investment is profitable when in the long run the low interest rate/easy money is not sustainable. Debt creation is not the same as capital creation. No logical argument can refute this.

[b1rd67]

Everything you wrote is utter nonsense.... you have no idea what you're talking about!

[conservatist2010-12]

If you disagree...state a comment

[conservatist2010-12]

thats what I thought...NO Substance..just talk

[jozzie]

Oh, it's you again. Posting the same adolescentdrivel.

The U.S. became a super power for LOTS of reasons. The biggest one being that it was BIG. Our form of capitalism has been the most wasteful of human resources, and locked into ruinous cycles of booms and busts. The regulations that were put in place back in the 30's afforded us the longest reprieve in this depressing cycle -- long enough for the rapaciousaspects of capitalism to forget how it shoots itself in the foot and long enough to lull us into allowing it to actually TAKE OVER the government. We now have a corrupt government working for the banks, not us. Financial sector is now 40% of GDP, a vampiresucking the life out of real wealth.

Do some reading and stopspewing the same baseless nonsense you seem to be so proud of espousing.

[jozzie]

Oh, it's you again. Posting the same adolescentdrivel.

The U.S. became a super power for LOTS of reasons. The biggest one being that it was BIG. Our form of capitalism has been the most wasteful of human resources, and locked into ruinous cycles of booms and busts. The regulations that were put in place back in the 30's afforded us the longest reprieve in this depressing cycle -- long enough for the rapaciousaspects of capitalism to forget how itshootsitself in the foot and long enough to lull us into allowing it to actually TAKE OVER the government. We now have a corrupt government working for the banks, not us. Financial sector is now 40% of GDP, a vampiresucking the life out of real wealth.

Do some reading and stopspewing the same baseless nonsense you seem to be so proud of espousing.

[pragmaticdallasite]

You are awesome

[conservatist2010-12]

I studt Economics...you speak of Marxism

[CaptainFailmore]

You realize that when you punctuate every sentence with an overgrown ellipsis, people start reading everything you type in William Shatner's voice, right?

[pragmaticdallasite]

lol!

[blueken]

So far Obama has been about as progressive as Bill Clinton was, that is to say, not progressive at all. He is so middle of the road that if he keeps it up, he will not deliver on a single promise made during the election. He will become the first president of color, and the biggest liar to ever live in the White House, and that's going some.

[jozzie]

If he keeps it up, there won't be a two party system, as we have known it. There will be a "Democratic" Party that bears all the resemblance of what once was considered The Republican Party, and the Republicans will be so crowded out that they will form The Wacko Party -- which we are seeing now.

Then there will be a need of a new, third party -- The Progressive Party. I think this country would do well to break up the winner-take-all two party slugfest we've had to date. In fact I hope we get lots more parties, reflecting REAL issues and insisting on REAL media coverage for them.

[conservatist2010-12]

the majority 40% are Conservati­ves....20% are Liberal...and 35% are Independant.....A Conservative Party is more likely....Americans that work hard,dont want their money stolen

[conservatist2010-12]

Obama has terrible numbers now......More people are against his policies than for them

[blueken]

Denile just ain't a river in Egypt. I was watching the news and someone from the GOP was railing against banking regulations. He actually had the nerve to say "Some people think that the government should decide what is risky and what is not". Good lord, look what happened when the government stepped aside and let the banks have their way with the people! Do we need them to kidnap our wives and daughters before we say enough. I have never taken an ARM or Sub Prime loan, but I have certainly paid the price for those that did. I now pay higher interest rates on my credit card, my house and my retirement investments have lost a lot of money. Do I want the government to step in between the banks with risky loans and people who can't make the payments? You bet I do. Let's stop makeing castles made of sand. The tide will come in again.

[olmossy]

I don't doubt that Stiglitz and Krugman are right. What they need to do is come up with a strategy that will force Congress and the President work FOR the American People instead of the Lobbyist.

[OldGuyWhoFeelsGood]

The use of the word, "tendentious," in your post above makes no sense. Perhaps you meant "contentious?"

[DrRoberts99]

Perhaps the reason Dr. "Doom" and Dr. Krugman are not sitting at the Obama table is that they were wrong. These two were the leading academics that called for nationalizing so called "zombie" banks, which would have wiped out billions in shareholder equity. Roubini called Wells Fargo a zombie bank.
When wells Fargo announces earnings on Wednesday, ask Roubini how a zombie bank earns billions in a quarter.

[NedroidPrime]

It's called "creative accounting".

If these banks went under, would the shareholders not be wiped out? Wouldn't the only difference be the effect on the overall system?

Seriously, do you really believe that GS and WF are actually making that money?

[abbienormal]

Agreed. These are paper gains on sales of assets. Some of these sales are to third parties but some are to shell companies and are economic shams.

In either event, these are not profits on operations and are not sustainable.

[jmpurser]

So instead of costing the shareholders billions we ponied up TRILLIONS to keep the zombies in the business of foreclosing on home owners and paying themselves bonuses and lobbying to avoid regulation.

I guess it depends on your definition of "wrong".

[pragmaticdallasite]

Perhaps we should listen to those who identified macro trends before they were obvious?

http://www.nytimes.com/2005/05/27/opinion/27krugman.html

[DrRoberts99]

One can always count on "contributors" to the Huffington Post to achieve new levels of inanity. The watchdog agencies were asleep at the switch, or worse, during the Bush years but that is no longer the case. When one reads that banks are cooking the books, one must wonder at the overall intelligence level of those, without any evidence whatsoever, that make such claims. There is still so much misinformation and disinformation regarding the TARP, that unless one has made a concerted effort to understand the program, one will be hopelessly ignorant and confused regarding what it is and what it is not. Goldman Sachs and Wells Fargo did not request TARP injections but were forced to take them by then Secreatary Paulson. Both banks had been paying quarterly dividends to the Treasury until GS just recently paid the Government back. One could go on, with actual facts, but the masses have concluded that banks are "bad" and the masses love their academic prophets of gloom and doom and zombie banks. Meanwhile, the rest of us will continue to live in our capitalistic society and do our best to prosper from the greatest system of wealth creation ever devised by man. My words, hardly, those are the words from a recent MSNBC interview with the king of honest investment managers, Warren Buffett.

[BoshSpong]

Obama's team seems to have forgotten who they are dealing with. The opposition is relentless, consuming, tireless - they will not compromise one iota - they do not see any possibility of cooperation and they will not miss any opportunity to beat up the administration -

The watered down tepid version that we are seeing is just what the doctor ordered for the opposition.

We may be witnessing the biggest wasted election of a potentially powerful leader who never got off the ground. The time for meekness and compromise is long gone - the right wing under W / Cheney made huge revolutionary changes in every aspect of government without even a whisper of a mandate.

Obama seems to be squandering a remarkable, historic opportunity -

[LBaby]

Is it him squandering the opportunity or the so-called progressive movement playing this like tone-deaf karoke singers? I have not seen the support of this so-called movement, but have seen it spend a lot of time in the last 6 months nit-picking, criticizing, and navel gazing. It seems to have taken what it was good at - criticism on the side-lines - and turned it into an art form. There is little action aside from petulant whining. No wonder he has to move more to middle - that is where the support is and where the action is. For all the progressive claims that he needs to march ahead and bull-doze the opposition, who is behind him, got his back? I mean, besides the usual progressive spectators, not sticking their necks out, on the sidelines, going "that's not it?"

[JackieRSM]

You are so right Boshspong more people need to write the White House, I have many times. We did not vote for Obama to try to be friends with the Pubs and want their input on every major issue. To hell with them!

While they ran the show bringing us down they didn't give a hoot for Democrats input. I've told him he is wasting time on them, and had better pay more attention to the people who voted for him.

We voted for him to represent our concerns, and to carry out his promises, not the right wing's. And as I've said before, the Republican party has no credibility and is unimportant to achieving the goals we Democrats support and thought Obama supported.

If Obama continues with this attitude of "looking forward" as far as not doing serious investigation into the antics of the Bush Administration on spying and torture, he will not get my vote again. It is quite evident some very wrong doing went on and the best way to see it never happens again is to pursue this. Maybe all people being tried for crimes should say let's move forward and not my past. Makes about as much sense. Obama was elected to uphold the law, and he clearly is not!

[PaxEterna]

It's not just the economics that are lacking in progressivism, it's everything: jobs, education, health care.

We are getting same ole same ole from Mr. Change You Can Believe In.

That certainly isn't what I voted for, and I don't think it's what the American people voted for when we put Obama in the WH.

The so-called once in a lifetime opportunity is being lost in multiple ways, all that the same time.

But the Martha's Vineyard vacation is still in tact. That's where the wealthy elite go to hob-knob with each other and make sure they don't run into any real people with real problems.

He should take his family to the GUlf Coast and put make that area a destination.

I bet very few Americans can afford to vacation this summer, and certainly not on MV.

Bless Paul Krugman. Call him what you want,. but at least he tells it like it is. Which is precisely WHY he is not part of the inner WH spin circle. They can't control him, and they know it.

[jmpurser]

Well said. I knew he wasn't a liberal or progressive but I did have hopes he wasn't another Clinton. My bad.