Everybody knows that Paul Krugman is a Nobel Prize-winning economist, a sometimes combative columnist and a liberal lion. But in a conversation which aired this weekend, we learned more about his personal response to an ongoing crisis he describes as "really nasty," "very, very severe," and "gratuitious," and which he says "will not go away quickly or necessarily at all" unless we do something.
We learned how Krugman trolls for music online, that he still believes that Ben Bernanke has been "assimilated by the Borg," and that, despite his fondness for science fiction, he describes himself as "not that cosmic."
He may be wrong about that last part.
We interviewed Prof. Krugman for our "Conversations" series on The Breakdown. (Previous guests include Katrina Vanden Heuvel, Thom Hartmann, economics/law professor William K. Black, Jr., and other very interesting folks.) Krugman's on a publicity run to push his new book -- and not, we suspect, because he needs the money. The book promotes some policies that he (and we, along with many others) feel are urgently needed. (He's speaking at the American Dream conference next month, too.)
Krugman's book is called End This Depression Now! (exclamation point included). If that sounds like a self-help book -- the sequel to Listening to Prozac, maybe, or something by Dr. Wayne Dyer -- that's not altogether inappropriate in this age of collective near-despair.
(He could have called it Economy, Interrupted.)
We began by asking Krugman if what we had heard was true: That he became an economist because he loved the Foundation series of science-fiction novels by Isaac Asimov. (I was such an Asimov fan as a kid that I sent him a short story I'd written when I was twelve years old. In return I got a postcard that encouraged me to 'keep writing,' a diplomatic choice of words whose delicacy I failed to appreciate at the time.)
In the Foundation series, the fate of the Galactic Empire is studied and guided by a brilliant team of scientists known as 'psychohistorians,' whose field was invented by a 22nd-century genius named Hari Seldon. Like Krugman, I was fascinated by the idea that you could predict the human future if you just had enough information. Selden designed a handheld computer called the Prime Radiant, which projected its data and equations in the air around him. It all seemed pretty cool to me back then, too. We have a word for kids like that nowadays:
Nerds.
In Asimov's novels, the Galactic Empire periodically faced a "Seldon Crisis." These existential dangers were usually navigated with the advice and guidance of the psychohistorians. I asked Krugman if the American empire was facing a "Krugman crisis."
"I'm not that cosmic," Krugman said.
In fact, Krugman was determined to keep the focus on the prosaic, straightforward nature of the problem, the human cost of our inaction, and the fact that its solutions are straightforward and practical. "We know to take textbook economics and apply it to this situation," he said, "(but) very few people in positions of influence are willing to listen. That's a horrifying thing, because we're suffering gratuitous economic disaster."
"It's completely unnecessary."
As Krugman put it in our conversation, the hard part is the politics. "(The economic solution) is not mysterious. This is not 'Gosh, what are you people proposing? This was all hashed out in papers a decade ago, many of which were written by Ben Bernanke."
"To the extent that people say the economics is confusing or uncertain," Krugman said, "that's overwhelmingly because people want it to be."
"Benanke knows all about this," Krugman said. That led to a question about the groupthink mentality that's keeping Washington focused on the wrong problem -- deficits -- in a time of widespread suffering. He spoke of the "turf theory," which says that people "end up defending institutional prerogatives... we're supposed to fight that. We've had a rather severe shortage of people in positions of power who are willing to fight that."
Krugman's differences with the Administration lay less in what he sees as the President's personal values and more in the White House's perceptions of the political and pragmatic: "I believe that the President hasn't bought into the stigmatization of the people in distress, but what he has done is accepted the notion... that you should stay within the confines of a conventional wisdom as defined by what amounts to a successful, deceptive propaganda campaign."
"And I'm arguing that's a losing strategy, even politically."
As I write this, the Peter G. Peterson "Fiscal Summit" is taking place in Washington DC. (Sen. Bernie Sanders and a number of other people are gathering outside to protest it, too) There, under the sponsorship of the anti-government billionaire Peterson, political heavyweights will gather to promote two insane ideas: that our most urgent problem is government deficits, not the economic misery of millions, and that the smartest thing we can do right now is pursue the austerity policies that are shattering Europe economically and politically.
This well-financed Washington obsession is the inspiration for Tom Tomorrow's latest cartoon, which gives a sci-fi twist to the economic debate that Krugman should especially appreciate (despite the fact that his own fate in it turns out to be dire.)
Tom Tomorrow's aliens say what all aliens used to say: "Foolish human." And if anything comes through more strongly than ever in the new book (and our conversation), it's Krugman's own humanity.
I asked about the challenge of hearing useful advice go unheeded, or avoiding a breakdown into aggravated despair in clashes like his recent one with Ron Paul, whose views on war and civil liberties add a great deal to our discourse -- but whose economic remarks to Krugman were just off the wall. (Paul was saying something at great length about the Greek and Roman empires and the gold standard, as I recall).
"I try to keep the perspective that I'm frustrated because I can't get people to listen to what seems to me to be obviously the right ideas," said Krugman. "The real people who are frustrated are the 59-year-olds out there who don't have jobs and may never get another one, or the nineteen-year-olds coming out of college with no job prospects."
"A sense of humor helps, too."
Krugman's book shows great empathy for the victims of our politically-induced economic malaise, too. He uses the moving Peter Gabriel song "Don't Give Up" to frame a discussion of our current economy's human costs. That led us into a discussion about the Willie Nelson/Sinead O'Connor version of that song, which I encouraged him to check out. (There's a sample of it in the interview), his YouTube habits, and ... well, you just gotta listen.
Krugman's a brilliant guy and excellent writer who I agree with most of the time. He stood up against the near-hegemony of the right in the public sphere during the run-up to the invasion of Iraq. That took a lot of courage. He's been taking a lot of bows and arrows ever since. (Rush Limbaugh even interrupted his tirade against me to take a shot at Krugman. I considered the association a compliment.)
Krugman won his Nobel for macroeconomics, which is as close to "cosmic" as it gets in that field. Psychohistory may even have influenced his Nobel-winning work (I wish I'd asked him,) which was in economic geography and economies of scale. (Hari Seldon preferred a sample size of one quintillion people. That's not currently available -- not on this planet, anyway.)
Cosmic or not, it was a down-to-earth and compassionate guy who showed up for the interview. He's written an important book that should be read by millions of people around the country -- and by a couple hundred or so in Washington, where its message is most urgently needed.
You can hear the interview here. We also did an special report entitled "The Case Against Chase: The Fall of the House of Dimon," and commented on the -- well, the psychohistory -- of Mitt Romney's bullying episode. The full episode's podcast is below:
Some of our other conversations can be found on the Breakdown Conversations page. (Sorry about the formatting; we're working on it.)
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
Paul Krugman: How Bad Things Are
Economics and Politics by Paul Krugman - The Conscience of a ...
Paul Krugman - The New York Times
We're going to become the preferable society that works at a laundry mat to make money to pay for other people to do our laundry.
I would like to hear Krugman's response to a piece by Sheila Bair, former head of the FDIC, who yesterday took him to task over the way to get consumers spending again. She has a point:
http://finance.fortune.cnn.com/2012/05/11/sheila-bair-economy/
Krugman's recommendation for recovery as outlined in *End this Depression Now!" is logical and admirable. But it factors in everything but bankers' and corporations' exquisite talent for preying on human weakness and desperation.
I admire Bair for what she did at the FDIC, and I admire Krugman. I would like to see him take her on.
Also Noam Chomsky has an excellent op-ed piece in Al-Jazeezar today- Plutonomy and the precariat: On the history of the US economic decline.
Take the Rich Off Welfare
by Mark Zepezauer and Arthur Naiman
Odonian Press, 1996
http://www.iefd.org/articles/politics_who_gets_what.php
In almost every enterprise, government has provided business with opportunities for private gain at public expense. Government nurtures private capital accumulation through a process of subsidies, supports, and deficit spending and an inequitable tax system. From ranchers to resort owners, from brokers to bankers, from auto makers to missile makers, there prevails a welfarism for the rich of such stupendous magnitude as to make us marvel at the corporate leaders' audacity in preaching the virtues of self reliance whenever lesser forms of public assistance threaten to reach hands other than their own.
The quickest and best way in my opinion is for everyone that is fighting for this and that to wake up and come together and realize that our only chance as Americans is to regain control of our representatives, both left and right, to truly represent us and do what is best for our country.
To do that we have to take the money out of politics.
http://www.getmoneyout.com/
sign the petition
FF'd
Then, Krugman comes along and tells the people who are already over their heads in debt, "Reject the austerity and keep right on borrowing in perpetuity, otherwise you will have to live on just what you produce yourself, and you will be much poorer!"
Unfortunately, Krugman's advice requires that those facing the "austerity" somehow find somebody else dumb enough to loan them more money, which usually is not possible. I hope Krugman dispenses his advice at no cost, because that is what it's worth.
I do not understand why you people are complaining. Ruining our economy has been your goal for decades.
http://en.wikipedia.org/wiki/Starve_the_beast
Your policies have bore fruit. Why are you not dancing in the streets? You are winning.
You are winning. You should be happy to take the credit for the ruination of our country.
Why are you now trying to give it to us on the left. We have been fighting against this happening for over 30 years.
The notion that Republican means small government couldn’t be further from the truth.
Orrin Hatch (R) ..... "Six years ago under President ["W"] when we [Republicans] had the majority, it was standard practice not to pay for things,"
August of 2001, federal budget surpluses began to disappear and new deficits began to loom, the president had an unusual fit of candor and described these developments as "incredibly positive news," arguing that this would now put Congress in a "fiscal straitjacket."
As conservative Rick Santorum explained it, he first hated deficits, but then came to like them because they made it harder to pass any new spending bills.
“I came to the House as a real deficit hawk but I am no longer a deficit hawk. I’ll tell you why. …Deficits make it easier to say no.”
A depression is not the problem. It is the solution to the problem.
Read Krugman -- he lays out the path to recovery.
Sometimes, "austerity" (aka, 'living within your means') becomes unavoidable when there is nobody left out there dumb enough to loan you more money.
I'm glad you kept writing. Though I too have suspected double and hidden meanings in bits of advice handed to me over the years, I found the obvious or direct interpretation to be the most useful to follow.
As for Krugman, he rocks.
I never miss his NYT columns, and have yet to find anyone effectively refute him. A few always will try as we see in the comments, and as usual they supply only disputable "refudiation."
"OFF WITH THEIR HEADS"
Yes, austerity is needed, but it must be accompanied by a clear plan to grow an economy, whether it's Greece or any other country in fiscal trouble, for two reasons.
First, one cannot pay off a huge debt by destroying the means of creating the wealth necessary to pay the debt.
Second, without some vision for a turn around, ordinary people simply will not accept the pain.
We'll all accept pain if we can see a possible end to it, but when leaders - as is happening in Europe now - simply say, "Well, you just have to suffer and that's all there is to it," of course people reject it.
There must be hope and hope requires a vision of a better furure along with some path leading to that future.
That's what Merkel and her technocrats don't get. That's what the Republicans don't get.
But that's the lesson in what the Greek people are saying to the world, "We'll take the pain, even if we didn't cause the problem. But give us hope; give us a vision; give us a plan instead of only punishment."
Anthony
http://www.observationpoint.com.au
Of course the recession was not caused by the Government - except to the extent that they had de-regulated the banking industry in such a way as to make such a collapse inevitable. The banking collapse in America, and spreading around the world, is the cause of the suffering of Americans and Greeks.
The Republicans over here, and Merkel in Germany want to reduce Government spending, and thereby increase the suffering of the poor. Of course, the people who caused the problems get off scott free. In fact most of the bankers still got their bonuses after their pathetic performance. No wonder people are angry when it's clear that the people who caused the problems, are not suffering in the same way as the poor.
My solution - spread the suffering by taxing the super rich at very high rates. Greece should do the same, though I'm sure they have less head room than America.
And do what Iceland did, let a few banks fail and send a few decisiona makers to prison.
Not much chance of that happeneing though.
Cheers,
Mr. Krugman's economic views require one to have complete knowledge of the future, or at least allow a person to manipulate the economy of the past. Normally that is not the case.