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

[mitsie]

You know I am sick and tired of hearing from these people who just want to whine. Can't they find something productive and creative to do?

[jmpurser]

Well Obama could make the people who "whine" wrong. Then we'd stop listening. But they keep being right.

[quiviran]

They have, hence the Nobel Prize.

[ckfan]

And please tell us about the research that garnered the Nobel Prize and how its relevant to REAL WORLD economics.

[TequilaMockingbird]

The larger problem is where are the Progressives anywhere in this Admin? I haven't seen them invited to any table.. and that is what will lose Obama my vote... I understand there are no magic solutions because everything has gotten twisted and the roots are deep.... and things take time.. blah blah blah.. but.. Progressive voices must be heard and the National conversation needs to include a credible Progressive POV... I had hoped that Obama would give as much thought to Progressive Ideology as he has to the Republican Ideology... Republican and Democrat are essentially meaningless Monikers that attempt to illustrate a difference when there truly is none.. Our Representatives in Washington arrive beholden to Agenda Driven corporations.. and leave the same way.

[mitsie]

Then go vote for a Republican and see how much that will get you.

[quiviran]

No more, but we'll get without any expectations.

[Citizen4Justice]

Thats the core problem, we have a political duopoly and both parties of it are obscenely corrupted by campaign contributions and lobbying perks. Other countries have several viable parties, not just 2. Where did we go wrong?

[Dr Manhattan]

Keep voting for a phonies like Obama and see how much that will get you.

[HisPetGoat]

I wish Obama were more progressive, but I know there are political realities I don't fully understand.

When I voted, I did consider voting for the right only to hasten the ultimate collapse and chaos in the hope that something better could be raised from the ashes. My belief was that our institutions and policies are irredeemable.

Instead, I suspended my cynicism amd indulged my optimism to vote for Obama because, if nothing else, I know he means well and I don't have the moral right to wish chaos on everyone.

[jmpurser]

As Krugman said I voted for Obama because he WASN'T a Clinton. Then he turned around and restaffed the White House straight out of the Clinton Rolodex.

I knew Obama wasn't a liberal or progressive but I hoped he was open to their ideas.

I was wrong on both counts.

[TJCole]

Jefferson said: "Ours is not a system based upon trust, but one of suspicion..!"

It's our responsibility in a participatory democracy to be ever suspect and observant of our government all government due to the "eternal abuses" of government all government..always...!

Krugman and Stiglitz are performing their duty as they see it as Americans, for the greater good of our people and our General Prosperity, which is our real economy...!

[HisPetGoat]

Hear, hear.

I skeptical of Jefferson though. Just kidding!

[toxicbrainpoison]

Its true Krugman and Stiglitz have actually been right about a lot of things. They seem to understand that economy is not just overall gdp (an average that doesnt show how poor the bottom is) and the stability of our economy depends on the stability of the entire system. Its not selective capitalism, its common sense capitalism. If the base of the economy is unstable, the whole deck of cards falls over.... and guess who will still be on top of the heap? We gotta stop letting wall street make the rules. The black box mentality is ignorant.

[HisPetGoat]

Krugman and Stiglitz are Keynesians.

[jekyll]

That is their problem.

[TJCole]

Krugman is more a devotee of J.S. Mill...

[quiviran]

So?

[jmpurser]

Which explains WHY they're right so often.

[2tango]

How can that nobody is asking to check the military-Pensions?

I remember Stockman was fire because he said...THE MILITARY-PENSIONS ARE BEYOND ANY BODY IMAGINATION.

IS A HUSH-HUSH ?

[mpak]

In my opinion every column of Krugman’s is an impeachment of his economic ideas, his political convictions, and his cherry-picking intellectual dishonesty. But let’s leave that aside for now and focus on one particularly impeachable fact about Krugman that has been evaded for way too long: his advice early this decade, post dot-com bust, when the government was beginning to inflate the housing bubble.

[pragmaticdallasite]

No let's not leave that aside. Please elaborate.

[mpak]

the quotes are below

[mpak]

In 2002: "To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."

From 2001: “KRUGMAN: I think frankly it’s got to be — business investment is not going to be the driving force in this recovery. It has to come from things like housing…. Will the Fed cut interest rates enough? Will long-term rates fall enough to get the consumer, get the housing sector there in time? We don’t know.”

From 2001:“The good news about the U.S. economy is that it fell into recession, but it didn’t fall off a cliff. Most of the credit probably goes to the dogged optimism of American consumers, but the Fed’s dramatic interest rate cuts helped keep housing strong even as business investment plunged.”

[jmpurser]

Did you notice how he was right every time?

[mpak]

It is obvious he advocating for a housing bubble early this decade. I doesn't make sense to have him choosing any of the solutions to the problem he advocated to create.

[mpak]

Sources:
http://www.pkarchive.org/column/122801.html

http://www.pkarchive.org/economy/ML071801.html

http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

[jmpurser]

Krugman doesn't call for a housing bubble in that column. Did he ever?

[mpak]

That’s right, in 2002, Krugman prescribed a government-induced housing bubble — the very thing that, by artificially driving up home prices with seemingly no end in sight, encouraged exorbitant home purchases, encouraged reckless lending, encouraged reckless borrowing, encouraged reckless securities based on reckless lending and borrowing, etc.

[jmpurser]

It was the "securitizing" the debts and claiming that made them risk free that led to the crash.

[pragmaticdallasite]

Let's keep this in perspective:

http://econlog.econlib.org/archives/2009/06/defending_what.html

http://mediamatters.org/research/200906240004

[pragmaticdallasite]

Advocating adjustments in interest rates and an artificial massive asset bubble are different things.

[jozzie]

Old and out of context.
Old and out of context.
Old and out of context.
Old and out of context.

[hardlyhikin]

Even if you read Krugman's words correctly, what may have been needed in 2001/2002 to stimulate an economy is most likely not the policy that you should keep for the rest of the decade. You ignore a ton of data about what has happened over the past seven years.

All economies are dynamic; everything that happens affects that which follows, the job of the economist in our society is to advocate and recommend policies to keep us on a path to economic equilibrium , not to blindly follow one set of dogmatic ideas.

[mrh3]

Mischaracterization. I read the articles you posted

[mpak]

he characterized himself in his own op-ed by advocating for a housing bubble?

[ManwithaParachute]

Raise your hand if you voted for Obama and will NOT vote for him again.

Conservative economics is a farce. The spend more money than they take in but, they just give it to the wealthy and play parlor trick with the books. The cost of both wars were never on the books until Obama took office. 7 + years of spending not on the books and STILL Bush managed to throw away money.

Obama has proved to be a different kind of incompetent.

[jmpurser]

I'm close to saying I'll never vote for him again. A lot can happen in the next 3.5 years but right now I'll be voting for anyone that's not Obama and Not Republican.

[quiviran]

The alternative was Sarah Palin a heartbeat away from the Presidency. No way my vote would have changed. Perhaps my expectations would be lower, looking back.

[flossophy]

Letting people keep more of the money they earn is not a farce.

Using the government to take their hard earned money away to redistribute as they please... is a farce.

[ManwithaParachute]

It is a farce when those that have the most -pay the least and the least pay the most and that is based on the only stat that counts - the individual's budget.

Throwing a war party off the books is a farce. Republicans running government is a farce. ALL of the conservative ideology is a farce. It can be summed up accurately by as a classroom full of sophomores demanding that they be allowed to teach themselves for the entire year because they do not require adult supervision, or teaching and that any damage done is not their fault but yours for allowing them to be free of adult influence....and by the way...they want their junior year free of adults too.

[wadenelson1]

The power play by Obama would be to bring Krugman onto the team with Summers & Geitner.

Turn an "enemy" into an ally.

I'm wondering what's taking him so long. I think Krugman would improve our chances of surviving this.

[HisPetGoat]

Good idea. I'll make a call today and exert my influence.

[Kassandra]

HA!

[xlntcat]

Krugman doesn't play well with others and we don't need the drama.

[mozara]

That's what Summers says so he can work for Wall Street unchallenged.

[JBS]

Actually, I think Mel Brooks would be a better choice at Treasury.

[flossophy]

skeptical2 I'm a Fan of skeptical2 I'm a fan of this user permalink

If Obama knew he would be hated by both sides, then who does he serve? His administration is as opaque as Bush's was. He gives great speeches, but his policies don't match his words.

There is a hidden agenda, and he is not revealing it.

==============================================

flossophy I'm a fan of this user permalink

He's simply trying to hold the fracturing Democratic party together... that's all.

The coalitions are becoming self aware and realizing that the Democrats have not been advancing their interests in meaningful ways. So Obama and the Democrats are simply expanding government and bailing out their constituencies this one last time to see if it sticks for another few cycles.

They're not interested in putting the economy back together... it's about getting as many people enrolled on a government program, because they know that once they are there... they'll be entrenched for a long while.

There's no nefar|ous c0nspiracy.

[Robert Cantor]

the Richard Millhouse Nixon cover up of the Watergate break in(s) was a nefarious c0nspiracy. There are NefCons - whether there is 1 here is a different story

[flossophy]

The bigger story of Watergate was the press's as`sault on the WH.. not some little burglary.

btw, what does N|x0n have to do with Obama's government expansion agenda.

[bodo]

Since Krugman never stops bitching about the Obama government, he need not be surprised when he doesn't get invited.

[pragmaticdallasite]

chicken or the egg?

[jozzie]

Thank goodness he doesn't seem to care.

[petef59]

Criticism is what Krugman does.

[scoops2]

The dismantling of the FED will have to be done over a generation. But it needs to be done.

JFK executive order 11110

http://www.youtube.com/watch?v=ggADLt4s4pM (2min)

[scoops2]

JFK executive order 11110. The reason why he was killed.

http://www.youtube.com/watch?v=ggADLt4s4pM (2minutes)

[TJCole]

He also spoke out again David Rockefeller and the Council on Foreign relations two weeks before he was murdered in Dallas...

[flossophy]

The History Channel did a show asserting that LBJ ki||ed JFK...

go figure.

[wizedollars]

Krugman, you're just not connected with the right people, don't feel bad. If you were employed by Goldman Sachs, you would be head of the Fed Reserve.. Note there is not small business or real economy representation. This is a Goldman Sachs pillage party and you just weren't invited..

[jozzie]

You just had a conscience and weren't invited.

[mozara]

His sin: not selling his soul to Goldman Sachs.

[jozzie]

The reason this country seceded from England wasn't primarily because of "taxation." That's the elementary school easy reason they teach you. The primary reason was that England was insisting that all of our financial dealings be done through its central bank.

We rebelled against a banking system.

We should do it again.

[scoops2]

Benjamin Franklin.

[hotwire]

Please, tell me what History book you got that little tidbit of information?

[OhComeOnNow]

That is actually factual - not the complete reason, but factual. YOU could look it up.

[kagenin]

Interesting historical perspective, but that's not the whole story.

After decades of ignoring American Colonist's needs, Britain (specifically, King George) decided to try to tax the colonists to better the Empire back home.

American colonists had been taxing themselves, but to pay for things that they needed over here (civic buildings, schools and churches, important infrastructural projects vital to any emerging society). Bettering the British Empire was not on the list of things they wanted to fund, especially since the colonists were not represented in the British Parliament.

Why would American colonists help bankroll a government when they weren't represented by said government?

Thus "No taxation without representation." The GOP has skewed the meaning of those words, but these are the origins of both that phrase, and America as we know it today.

[pragmaticdallasite]

And the actual Boston Tea Party was a protest against a corporate tax BREAK, am I correct?

[flossophy]

Today it's just about high taxation and irresponsible spending.

And keep in mind... that the taxpayers are not the recipients of the Democrat's social engineering projects or welfare programs. So in a sense, they're being disenfranchised.

Why would taxpayers want to fund the expansion of the Democrat Party (British Empire) if they are not benefiting from the effort... or their ideas are not being represented within the Democratic Party (British Parliament).

So in a sense, the tea party analogy still applies.

[toxicbrainpoison]

Actually a lot of it had to do with the fact that we had no representation. We rejected the king system of divine right and put in democracy.