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7 Days: Krugman on Obamanomics, and How to Prosecute the Case, with Reagan and vanden Heuval

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Perhaps the best columnist in America, Paul Krugman shares his anxiety on 7 Days in America about the gap between Obama's economic case and Obama's political candidacy.

In a week of excessive Democratic hand-wringing, though, the point is a fair one: given the Republicans' awful economic record, why is a brilliant and savvy Democrat running only slightly ahead of a Bush mini-me who got into Annapolis based on affirmative action (for admirals' offsprings) and who pleads ignorance on the dismal science?

Our conversation with Krugman -- and then Ron Reagan and Katrina vanden Heuvel -- did produce some ideas on how to turn a debate into a rout:

*TWO NUMBERS. It's my experience that in a back-and-forth, a powerful, concrete number can seize the rhetorical high-ground and dominate discussion. I recall how all my earnest (and long!) rebuttals in the 1970s about the benefits of consumer/envronmental regulation lost out in the public conversation when conservative economist Murray Weidenbaum asserted, without much evidence, that regulation cost $200 billion. Q.E.D.

Today's numbers are 95% and 300%. They should be put on buttons, used in podium speeches, and emblazoned on signs almost as often as "CHANGE we can believe in."

When McCain's chief spokeswoman went on Race to the White House last week saying it was "a lie" that McCain would be Bush's third term -- not wrong, mind you, but a "lie" -- the answer should always be that "McCain voted with Bush 95% of the time" in the Senate. What part of 95% didn't she understand? Ok, let's concede that McCain's views on tax cuts for the top one percent, tax giveaways to Big Oil, and trade aren't identical to Bush's but only 95% the same, voters will understand how the Republican nominee will predominantly continue policies that produced the worst job performance in decades, a sub-prime mortgage and credit crisis, and record gas prices.

If you like W's policies 95%, vote for McBush.

Also, studies have shown that the GDP under Democratic presidents has been more than 300% higher than under Republican presidents. So whenever McCain falsely aserts that Obama will raise everyone's taxes or that he'll balance the budget by 2013 despite cutting revenues by several hundred billion annually, the affirmative answer is -- Democrats grow the economy far more than Republicans. 300% more. For the most recent example, contrast Clinton and Bush.

So if you a middle class worker worried about your job, pay and health benefits, the progressive party in America has produced far more prosperity than the conservative one.

*THE NEW NARRATIVE. Remember how Dukakis, Gore and Kerry all started their campaigns as econmic moderates but ended them as full-throated economic populists, sounding like Nader circa '65? Gore found his populist voice at the Convention with his "powerful vs. the people" theme.

Obama seems to be starting to hit his stride here with this comparison -- he's "on your side" while McCain is "out of touch" when he's lost track of the number of homes he owns, cites $5 million as the cut-off for rich, relies on Paul (let-them-eat-cake) Gramm for economic wisdom. Random threads are starting to be stiched together into a convincing pattern -- Obama will fight for the middle class while McCain is in the (gas) tank with Big Oil. Or to pick up Ron Reagan's point that ridiculing McCain with humor is a good tactic (as it was for Ron's father), perhaps the Republicans theme song in Minneapolis will be "Home home home on the range."

"Change" got Obama to a solid 45% of the electorate. "On your side" populism gets him over 50% by bringing along struggling families who inherently understand that laissez isn't fair.

*A NEW TONE. It's all too easy for political spectators to hope that Obama gets tougher with the Rove-like attacks on his character and patriotism. Joe Klein writes that O should show more passion and Carville argues that he should get mad at someone or something.

But Obama's effortless and eloquent equanimity is a great asset -- especially against a truly hot-headed McCain -- and a natural tone at that, based on reading Dreams From my Father and watching him in the debates. He should stick to what comes naturally and which is a presidential personality...but show passion and get mad about an issue. So keep an even or humorous tone in replying to McCain's barbs and ads but then pivot and show real passion about lost jobs and lost home equity that's denying the american dream to millions of hard-working Americans. Let ads, surrogates and VEEP nominee Joe Biden attack McMoments. Obama should stay poised and presidential, exept when it comes to talking about the screwing of the middle class.

*A CRYSTALLIZING METAPHOR. It may have been unfair in some logical sense, but when Romney (George) said he'd been brainwashed on Vietnam, and Bush 41 seemed startled by a supermarket scanner, and John Edwards got a $400 haircut, these small betraying moments grew into metaphors about what was wrong with that candidate. Ditto McCain's 7 or 8 or 10 homes. How better to convey that he's out -of-touch with average Americans? As the never disappointing Gloria Borger said on CNN, voters "don't think there's anyting wrong with being rich." Ok. But while an FDR and JFK were surely rich, they also used their public pulpit to speak up for working and poor families. By his tax and regulatory policies, however, McCain has proven to be a tribune of the economic elite.

His housing faux pas is a near perfect way at a near perfect moment to galvanize Obama's economic story going into a Convention where Night #2 -- "Renewing America's Promise" -- may prove as important by November as Obama's acceptance speech as Invesco Field Thursday night. Swing voters know that he can give a great speech, but they need to know that he can genuinely empathize with their economic plight as well.

You can listen to the entire show here.

AIR AMERICA'S INTERVIEW WITH PAUL KRUGMAN, AUGUST 23, 2008:

Mark Green: In a recent New York Times column, you wondered why Obama isn't getting more "traction" on economic issues, given all the bad economic news and McCain's incompetence on this topic. Could it be that Obama is just personally more comfortable and knowledgeable talking about social, foreign and process issues?

Paul Krugman: "Well, he knows his stuff pretty well. It may not be his absolute strongest point, but he sure knows a lot more about economics than McCain does. But he has this tendency, which I worried about even a year ago, to say -- 'let's put partisan divisions of the past behind us' and then talk about economics as if both parties have made mistakes and it's time to move forward. He's been reluctant to drive home this message that Republicans now have a long track record of really screwing up the economy, and Democrats do much better. In his big economy speech on August 1, he seemed to go out of his way to avoid pointing out that the bad times were when Republicans were in office and the good times were when Democrats were in office. Hopefully he'll get over that."

Green: Previous nominees like Dukakis, Gore and Kerry also started their campaigns being cautious on the economy but ended up being full-throated populists. Might Obama do that as well?

Krugman: "Well I hope so. This [economy issue] is as ready-made as you can imagine, and this has happened [in the past]. Gore made a huge comeback when he started emphasizing these economic issues, and that was at a time in 2000 when there was a kind of assumption that prosperity was here to say, and that it really didn't matter who was in the White House. So there's tremendous opportunity now to highlight those differences. But it's not just a matter of sniping, of saying that Phil Gramm is still advising McCain - it's driving home that we have now got decades of experience that the policies of the right wing, the policies that McCain has endorsed, don't work for working Americans."

Green: In your book The Conscience of a Liberal, you explain how the growing income and wealth gap is not inevitable, that we had a ''Great Compression" in the 50s and 60s when the gap narrowed but then conservative policies effectively sabotaged middle class earnings. Is there any way Obama can make economic inequality a wedge issue or will he flinch because of fear of being attacked as launching "class warfare"?

Krugman: "Sure, and there are multiple models here. Al Gore did it, and again that helped him a lot - not quite enough but a lot. Bill Clinton! If we could just find some way of having Barack Obama give Bill Clinton's acceptance speech to the 1992 Democratic convention. That was a terrific speech. It was full of very simple language saying -- look, under these guys, the operators, the wheeler-dealers, have prospered, while ordinary people who are trying to make a living have done very badly, and we can change that. I don't think the public cares much about the 15-point policy proposals (although people like me care) but you need to make the simple point that it really matters who is in the White House, and that people with an 'R' after their name have been bad for workers."

Green: Ok, how much does a president influence economic results, as opposed to natural trends, trade patterns, FED decisions. 10%? 50%?

Krugman: "Well, here's what we know. According to one of my colleagues, Larry Bartels in the politics department, working Americans really do vastly better under Democratic administrations. It's a little bit of a puzzle for economists who want to be able to be shown the policy tools that make that happen, and we can only get at some of it. But the historical facts [show] that it makes a big difference. Then there are a lot of things that are mostly under the radar. Like who's appointed to the national labor relations board, what kinds of decisions are made about workers' rights and bargaining, how is union organizing treated? You know, if we got the Employee Free Choice Act, which is something Obama is supporting and that McCain is dead set against, that can make a huge difference."

Green: So could good labor policy under a President Obama help organized labor make a comeback? Why should only 1 of 10 American workers be unionized when 1 in 3 are in Canada?

Krugman: "Yeah, it could make a major comeback. I'm not especially 'Wal-Mart is the root of all evil,' but it's a giant corporation that is un-unionized, and it could be unionized. And that in itself would tilt the bargaining position of labor in America. There's a huge difference between Canada and the United States on unions. There's this country up north, they even speak the same language, eh, and yet they preserve a strong union movement. It's a political thing that we've become a country in which labor is so weak."

Green: Staying on this point of how policies can affect economic outcomes, could middle class families see significant real wage increases in an Obama Administration?

Krugman: "There are several things we can do: first of all, healthcare. We can assure every American affordable healthcare. Every other advanced country does it; it's a uniquely American thing [not to] -- we have a level of brutality and risk in there that nobody else has. And it's something that can be solved within a year, given sixty seats in the Senate and a Democratic president willing to do it. You know, Bill Clinton was a president who had a hostile Congress for 6 of his 8 years, and even so labor did a whole lot better, workers did a whole lot better during those 8 years than they did during the Republican administrations on either side. Give us a Democratic president with a progressive agenda and Congress on his side, and you may be amazed by what can happen."

Green: Back to the camapign: McCain keeps repeating and repeating flatly untrue or inconceivable things, like Obama will raise everyone's taxes and McCain will balance the federal budget by 2013 despite giving away hundreds of billions in tax reductions. How can Obama rebut such big falsehoods?

Krugman: "I think people are prepared to be smarter on this. But McCain's repetition of big untrue statements has to be countered by Obama's repetition of big true statements. You know, he's got to be on message, he's got to be punching."

Green: Is the mainstream media merely a conveyor belt of such misinformation instead of being a filter separating the true and the false?

Krugman: "Yes, although for what it's worth, it's not as bad this time around as it was in 2000. There actually have been more news stories pointing out that these things don't add up. Maybe I've just had my standards debased, but while the coverage is pretty bad, it's not as bad as it was in 2000."

Green: Finally, do you ever worry about the high class problem of having less to write about if the President were a thoughtful Democrat rather than a soak-the-middle-class Republican?

Krugman: "Oh, look, when I was hired by the Times, the idea was that I'd be writing about, you know, business deals and financial crises and scandals in other countries, because America was a sensible, solid place. And I could just go back to doing what I thought I was going to be doing then."

7 DAYS PANEL W/ RON REAGAN, KATRINA VANDEN HEUVEL & MARK GREEN

Green: What did you think of Krugman's worry that Obama so far hasn't adequately seized or framed the economic message against McCain?

vanden Heuvel: "Well I think that Paul Krugman is right on. This is a moment for this message: Americans are suffering, they're fearful, they're anxious. And Obama has not been the most populist candidate. In the primaries, John Edwards drove the populist issues, and then Hillary Clinton did as well. What's interesting is that in the last 48 hours, Obama is back on message -- and it's a Hillary message, it's like 'I'm fighting for you.' It's not the sweeping 'change' message, because for many people in Ohio and Pennsylvania 'change' sometimes means a factory closed, a job lost. So I think there's an opening: millions of Americans want a more active government on their side, and John McCain offers more of the same -- the corporate economic trade agenda that's devastating the middle class."

Reagan: "The conventional wisdom, among Democrats at least, has always been that if you take a populist message out on the campaign trail, you leave yourself open to the charge of 'class warfare', bizarrely enough. Of course, class warfare only counts when it's the poor and the middle class standing up ag ainst our corporate oligarchy; when it's corporations preying on the poor, somehow that's not class warfare. And Katrina's exactly right that this broad change message isn't working as well in the crucial states, which I think are Virginia, Pennsylvania and Ohio. These sort of blue-collar people need something more specific [than "change"] and they need to know that this is a guy who's on their side. And what better way to indicate that than by pointing out that the guy he's running against, John McCain, owns 10 houses, flies around on a private jet, and is worth 100 million dollars. And doesn't even know how many houses he owns!"

Green: Sympathetic critics are saying that Obama doesn't have enough passion or anger when he prosecutes an economic case. So beyond the content of the message, what tone should he take in Denver and beyond?

Reagan: "He does have a problem here, and it's that Angry Young Black Man aggressively going after Old White Guy is going to send shivers through the viscera of a lot of (particularly older) white voters. I would suggest that Barack Obama needs to hire a couple of good comedy writers. Because the way to go after McCain - and McCain is a target-rich environment, as we've seen that over the last few weeks - is with humor. He did it with the housing thing -- made fun of the guy; McCain's incoherent much of the time, make fun of that. But Obama can't be too aggressive."

Green:
If I can get personal, Ron, your father was able to successfully deflect attacks with easy humor that cloaked strong words.

vanden Heuvel: "In terms of tone, I agree with Ron on humor, but on the other hand, I think Obama needs a little more passion. There is a coolness there that doesn't resonate with people who are feeling anxious, fearful. He needs to better connect with people's pain, which is maybe not 'I'm fighting for you,' but more 'I'm there, I have concrete solutions and ideas.'....He has a coolness, a cerebral style, and so whoever he picks, he needs a Vice President who is going to be out there and tough -- in the debates and the fights ahead.

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