Greg Sargent on the "centrist dodge"

Greg Sargent:

A little while back I suggested that many pundits are regular practitioners of what you might call the “centrist dodge.” Paul Krugman defines it for us very nicely:

A Very Serious, chin-stroking pundit argues that what we really need is a political leader willing to concede that while the economy needs short-run stimulus, we also need to address long-term deficits, and that addressing those long-term deficits will require both spending cuts and revenue increases. And then the pundit asserts that both parties are to blame for the absence of such leaders. What he absolutely won’t do is endanger his centrist credentials by admitting that the position he’s just outlined is exactly, exactly, the position of Barack Obama.

Krugman, of course, is talking mainly about his Times colleague Tom Friedman, though plenty of others fit the mold. MORE...

Dear Mr. President- (friendly advice)

Paul Krugman:

The point is that it’s now time — long past time — to get serious about the real crisis the economy faces. The Fed needs to stop making excuses, while the president needs to come up with real job-creation proposals. And if Republicans block those proposals, he needs to make a Harry Truman-style campaign against the do-nothing G.O.P.

This might or might not work. But we already know what isn’t working: the economic policy of the past two years — and the millions of Americans who should have jobs, but don’t. MORE...

Bob Schrum:

Time and again, most recently during the manufactured debt crisis, the president has already proved that he's the reasonable person in the room. Now he has to prove that he's the passionate person in the room — and that he's passionate about the things that matter to ordinary, hard-working, and out-of-work Americans. This is where he would do well to listen to his progressive ranks and his own progressive instincts. He has to put an edge on his message, as FDR and Harry Truman did. MORE...

Howie P.S.: Meanwhile, the President has an idea of his own, "Obama Pushing Jobs For Unemployed Military Veterans":

President Barack Obama is asking Congress to approve new initiatives to help some of America's 1 million unemployed military veterans find work, including tax credits for companies that hire out-of-work vets.

The proposal Obama is to outline Friday is part of the president's efforts to return to a focus on jobs after spending weeks mired in the contentious debt-limit debate that consumed the White House for much of the summer.MORE...

H/t to Greg Sargent.

Paul Krugman on the Debt Deal (with video)

MEDIAite with video from ABC News (02:26):

Paul Krugman was very disappointed with President Obama and the Democrats for allowing the Republicans to frame the debt debate. Krugman insisted on the This Week roundtable, “from the perspective of a rational person, in other words, a progressive on this stuff, we shouldn’t be talking about spending cuts at all now.” Yet, according to Krugman, the “rational people” have now lost big time.

Krugman’s grim forecast, as a result of Republican-leaning “compromises” which focus on spending cuts, is that the American economy will experience worsening unemployment and general misery in the future. MORE...

Krugman: "Vouchercare Is Not Medicare"

Paul Krugman:

Medicare is a government-run insurance system that directly pays health-care providers. Vouchercare would cut checks to insurance companies instead. Specifically, the program would pay a fixed amount toward private health insurance — higher for the poor, lower for the rich, but not varying at all with the actual level of premiums. If you couldn’t afford a policy adequate for your needs, even with the voucher, that would be your problem. MORE...

Krugman On "Fears and Failure" and "phantom menaces."

Paul Krugman:

So we’re paying a heavy price for Washington’s obsession with phantom menaces. By looking for trouble in all the wrong places, our political class is preventing us from dealing with the real crisis: the millions of American men and women who can’t find work. MORE...

Krugman on "Bin Laden Dead"

Paul Krugman (op-ed, MY Times):

Good, and good riddance. But it’s hard to see how it changes anything important.

"Paul Krugman’s lonely crusade: What’s Left of the Left"

Benjamin Wallace-Wells (New York):

If you are looking not only for clues into Barack Obama’s character but for a definition of what his presidency will mean to the country, then the speech on fiscal policy that he delivered at George Washington University the Wednesday before last is the most significant one he has ever given. It is, in its own way, an astonishing document, alive with the themes that undergirded his Philadelphia speech on race and his Nobel Prize acceptance, on the tragic enmeshment of American limitations and American strength. Obama was responding mostly to the Republican budget plan, and he understood exactly what its author, Representative Paul Ryan, had in his sights: “This vision,” Obama said, “is less about reducing the deficit than it is about changing the basic social compact in America.”

And yet, having defined the fight so starkly, Obama delivered a plea for compromise. He ended a stirring defense of the welfare state by explaining his plans to gut it. Then he said that even this proposed $2 trillion cut in government spending was only a starting point for negotiation: “I don’t expect the details in any final agreement to look exactly like the approach I laid out today,” he said. “This is a democracy; that’s not how things work.” There were notes of deference, and passivity: If Obama believed that his vision of society was at stake, why place it so squarely on the partisan bargaining table—or why not at least begin with a stronger gambit? This was, at any rate, the point of view of one particular strain of liberal reaction, whose position was summed up with poignant resignation by New York Times columnist Paul Krugman. “I could live with this as an end result,” he wrote. “If this becomes the left pole, and the center is halfway between this and Ryan, then no. MORE...

H/t to Ari Melber.

Krugman on Obama: Can he fight? "So far the answer has been no."

Paul Krugman:

In retrospect, the roots of current Democratic despond go all the way back to the way Mr. Obama ran for president. Again and again, he defined America’s problem as one of process, not substance — we were in trouble not because we had been governed by people with the wrong ideas, but because partisan divisions and politics as usual had prevented men and women of good will from coming together to solve our problems. And he promised to transcend those partisan divisions.

This promise of transcendence may have been good general election politics, although even that is questionable: people forget how close the presidential race was at the beginning of September 2008, how worried Democrats were until Sarah Palin and Lehman Brothers pushed them over the hump. But the real question was whether Mr. Obama could change his tune when he ran into the partisan firestorm everyone who remembered the 1990s knew was coming. He could do uplift — but could he fight?

So far the answer has been no. MORE...

Howie P.S.: On cue, William Greider writes in The Nation:

There is a cloying Boy Scout quality in his style of leadership—the troop leader urging boys to work together on their merit badges—and none of the pigheaded stubbornness of his "I am the decider" predecessor, nor the hard steel of Lyndon Johnson or the guile of Richard Nixon.

Sam Seder and Paul Krugman on Election Day (with video)

Sam Seder, video (03:28):

Sam Seder says vote and vote against Republicans and their policies.

Paul Krugman:

So again: it was mainly the economy, with the effects of a bad economy reinforced by Obama’s consistent policy of undercutting both messages and movements that might have helped Democrats weather the economic storm. MORE...

Krugman: "Brother, Can You Spare a Dime? I Only Earn Six Figures" (with video)

Paul Krugman, with video (03:18):

I live in a very sheltered world, yet I know young people just out of college who can’t find employment; men in their late 50s who have lost their jobs and think they will never find another; and families barely scraping by, terrified by what might happen if anyone were to get sick. These days, there are terrible stories everywhere you look.

Yet some Americans who have secure jobs and rather high incomes are feeling very sorry for themselves because it’s possible that they might have to pay somewhat higher taxes next year if the temporary reductions made during President George W. Bush’s tenure in office are allowed to expire for the wealthy. MORE...

Krugman: "There never was a big expansion of government spending."

Paul Krugman:

Here’s what you need to know: The whole story is a myth. There never was a big expansion of government spending. In fact, that has been the key problem with economic policy in the Obama years: we never had the kind of fiscal expansion that might have created the millions of jobs we need. MORE...

Howie P.S.: Krugman won a Nobel prize in economics, so I'm just going to assume he's got his numbers right.

Krugman on Obama's New "Infrastructure" Proposal

Paul Krugman:

Some bleary-eyed thoughts from Japan on the reported administration proposal for $50 billion in new spending:

1. It’s a good idea
2. It’s much too small
3. It won’t pass anyway — which makes you wonder why the administration didn’t propose a bigger plan, so as to at least make the point that the other party is standing in the way of much needed repair to our roads, ports, sewers, and more– not to mention creating jobs. Once again, they’re striking right at the capillaries. MORE...

Howie P.S.: Anticipate more "infrastructure" talk (in the $200 billion range) from Obama Wednesday in Cleveland.

Krugman: "1938 in 2010"

1938 Buick Coupe

Paul Krugman:

Now, we weren’t supposed to find ourselves replaying the late 1930s. President Obama’s economists promised not to repeat the mistakes of 1937, when F.D.R. pulled back fiscal stimulus too soon. But by making his program too small and too short-lived, Mr. Obama did just that: the stimulus raised growth while it lasted, but it made only a small dent in unemployment — and now it’s fading out.

And just as some of us feared, the inadequacy of the administration’s initial economic plan has landed it — and the nation — in a political trap. More stimulus is desperately needed, but in the public’s eyes the failure of the initial program to deliver a convincing recovery has discredited government action to create jobs.

In short, welcome to 1938. MORE...

Howie P.S.: Who was it that said “Those who do not learn from history are doomed to repeat it”?

"Goldman Sachs agrees with Krugman that more stimulus is needed"

theCapitalistRedux' diary on Kos:

Let me preface this by saying whiteshoes at GS aren't always the smartest guys in the room- I've sat across the table from a few research analysts, PMs, and wholesalers of theirs and they can be a mixed bag. But on the whole, they are certainly canny enough to know what's good for their firm, and spiraling deflation is rough for even the best distressed asset investor. To see them in agreement with a self-proclaimed Liberal (not in the economic sense) neo-Keynesian like Paul Krugman is not something I would normally foresee without the risks of premature austerity being so grave. MORE...

Howie P.S.: I wish I understood that last sentence, H/t to Chris in Paris.

"Do the math" with Professor Krugman: "Numerical notes on health care reform"

Paul Krugman:

A couple of notes to address complaints about the Senate bill from the left and the center. (There’s no use addressing complaints from the right; in general, the safest thing when dealing with crazy people is to avoid eye contact.

For people on the left who think this is all a big nothing, consider the subsidies. From the Kaiser Health Reform Subsidy Calculator, here’s the percentage of insurance premiums on the individual market that would be covered by subsidies at different levels of income measured as a percentage of the poverty line (all calculations are for a family of 4 headed by a 40-year-old):

Kaiser Family Foundation

Guys, this is a major program to aid lower- and lower-middle-income families. How is that not a big progressive victory?

For people in the center who worry, as my colleague David Brooks puts it, that there may be unintended consequences if you “centrally regulate 17 percent of the economy”: um, it’s a little late for that.

First of all, government insurance programs — Medicare, Medicaid, and smaller programs like the VHA, already pay more bills than private insurance companies:

Centers for Medicare and Medicaid Services

And even the private insurance is overwhelmingly provided through employers — and employment-based insurance is only tax-free unless it obeys extensive regulations. Not coincidentally, those regulations resemble, in a qualitative sense, the goals of the new health reform: employers have to offer the same policy to all their employees, which in effect rules out discrimination based on medical history and subsidizes lower-paid workers.

The point is that we don’t have anything resembling a free market in health insurance — nor should we. Reform is filling in the gaps in the subsidized, regulated system we already have — which should calm centrists — in a way that offers big benefits to those most in need — which should please progressives.

Do the math.

Krugman: "A Dangerous Dysfunction"

Paul Krugman (NY Times):

Unless some legislator pulls off a last-minute double-cross, health care reform will pass the Senate this week. Count me among those who consider this an awesome achievement. It’s a seriously flawed bill, we’ll spend years if not decades fixing it, but it’s nonetheless a huge step forward.

It was, however, a close-run thing. And the fact that it was such a close thing shows that the Senate — and, therefore, the U.S. government as a whole — has become ominously dysfunctional.

After all, Democrats won big last year, running on a platform that put health reform front and center. In any other advanced democracy this would have given them the mandate and the ability to make major changes. But the need for 60 votes to cut off Senate debate and end a filibuster — a requirement that appears nowhere in the Constitution, but is simply a self-imposed rule — turned what should have been a straightforward piece of legislating into a nail-biter. And it gave a handful of wavering senators extraordinary power to shape the bill.

Now consider what lies ahead. We need fundamental financial reform. We need to deal with climate change. We need to deal with our long-run budget deficit. What are the chances that we can do all that — or, I’m tempted to say, any of it — if doing anything requires 60 votes in a deeply polarized Senate?

Some people will say that it has always been this way, and that we’ve managed so far. But it wasn’t always like this. Yes, there were filibusters in the past — most notably by segregationists trying to block civil rights legislation. But the modern system, in which the minority party uses the threat of a filibuster to block every bill it doesn’t like, is a recent creation.

The political scientist Barbara Sinclair has done the math. In the 1960s, she finds, “extended-debate-related problems” — threatened or actual filibusters — affected only 8 percent of major legislation. By the 1980s, that had risen to 27 percent. But after Democrats retook control of Congress in 2006 and Republicans found themselves in the minority, it soared to 70 percent.

Some conservatives argue that the Senate’s rules didn’t stop former President George W. Bush from getting things done. But this is misleading, on two levels.

First, Bush-era Democrats weren’t nearly as determined to frustrate the majority party, at any cost, as Obama-era Republicans. Certainly, Democrats never did anything like what Republicans did last week: G.O.P. senators held up spending for the Defense Department — which was on the verge of running out of money — in an attempt to delay action on health care.

More important, however, Mr. Bush was a buy-now-pay-later president. He pushed through big tax cuts, but never tried to pass spending cuts to make up for the revenue loss. He rushed the nation into war, but never asked Congress to pay for it. He added an expensive drug benefit to ,Medicare, but left it completely unfunded. Yes, he had legislative victories; but he didn’t show that Congress can make hard choices and act responsibly, because he never asked it to.

So now that hard choices must be made, how can we reform the Senate to make such choices possible?

Back in the mid-1990s two senators — Tom Harkin and, believe it or not, Joe Lieberman — introduced a bill to reform Senate procedures. (Management wants me to make it clear that in my last column I wasn’t endorsing inappropriate threats against Mr. Lieberman.) Sixty votes would still be needed to end a filibuster at the beginning of debate, but if that vote failed, another vote could be held a couple of days later requiring only 57 senators, then another, and eventually a simple majority could end debate. Mr. Harkin says that he’s considering reintroducing that proposal, and he should.

But if such legislation is itself blocked by a filibuster — which it almost surely would be — reformers should turn to other options. Remember, the Constitution sets up the Senate as a body with majority — not supermajority — rule. So the rule of 60 can be changed. A Congressional Research Service report from 2005, when a Republican majority was threatening to abolish the filibuster so it could push through Bush judicial nominees, suggests several ways this could happen — for example, through a majority vote changing Senate rules on the first day of a new session.

Nobody should meddle lightly with long-established parliamentary procedure. But our current situation is unprecedented: America is caught between severe problems that must be addressed and a minority party determined to block action on every front. Doing nothing is not an option — not unless you want the nation to sit motionless, with an effectively paralyzed government, waiting for financial, environmental and fiscal crises to strike.

HC: 'Kill The Bill' Debate Rages

Most progressives are expressing severe doubts or opposition to the Senate health care bill, as presently written. Meanwhile, according to this from The Huffington Post, this feeling is not unanimous:

New York Times columnist Paul Krugman, on the other hand, says progressives shouldn't take out their anger at President Obama by torpedoing the health care bill.

[T]he truth is that health care reform was probably doomed to be deeply imperfect. As Ezra Klein pointed out a few weeks ago, we're basically in a hostage situation: progressives really, really want to cover the uninsured, while centrists whose votes are needed can take it or leave it. So the centrists have a lot of power -- which in the case of Joe Lieberman means the power to double-cross and indulge his pettiness.

Now, in a hostage situation there are times when you have to just say no -- when giving in, by encouraging future hostage-takers, would be worse than letting the hostages perish. So the question has to be, is this one of those times? I don't think so, given the history: as Kevin Drum points out, health reform has come back weaker after each defeat. I'd also point out that highly imperfect insurance reforms, like Social Security and Medicare in their initial incarnations, have gotten more comprehensive over time. This suggests that the priority is to get something passed.

By all means denounce Obama for his failed bipartisan gestures. By all means criticize the administration. But don't take it out on the tens of millions of Americans who will have health insurance if this bill passes, but will be out of luck -- and, in some cases, dead -- if it doesn't.

Likewise, Mother Jones blogger Kevin Drum writes:

When big legislative efforts go down in flames, they almost never spring back onto the calendar anytime soon — and that's especially true when big healthcare bills fail. It didn't happen in 1936, it didn't happen in 1949, it didn't happen in 1974, and it didn't happen in 1995. What makes anyone think it will happen in 2010?

If healthcare reform dies this year, it dies for a good long time. Say what you will about the Democratic leadership, but Harry Reid, Barack Obama, Rahm Emanuel, Nancy Pelosi, and Steny Hoyer all know this perfectly well. So do John Boehner and Mitch McConnell. (Boy do they know it.)

On the White House blog, White House communications director Dan Pfeiffer pushed back on the idea Olbermann and other angry progressives are advancing -- that this bill is a dream for insurance companies. "The insurance industry has been leveraging its considerable resources in a ferocious effort to defeat this bill ... because this bill will finally wrest power away from the insurance industry and put it in the hands of American consumers," he wrote, listing the legislation's reforms.

Krugman: "I Was Kind Of Hoping Obama Might Be FDR, But Maybe Not" (with video)

HuffPo with video (03:02):

On "Real Time with Bill Maher" Friday night, New York Times columnist Paul Krugman said that while the American dream is not totally dead, it is "dying pretty fast," particularly when it comes to social mobility. Krugman made this statement during a lengthy discussion with former New York Governor Eliot Spitzer and host Bill Maher about the troubled state of the American economy and where we are in terms of reforming the system.

Both Krugman and Spitzer expressed optimism that America could right itself in the coming years if the correct steps were taken, but they were also highly critical of the degree of inequality that has become a part of American life and the lack of reform that has so far taken place.

"On bad mornings I wake up and think that we are turning into a Latin American country," Krugman said. "But on good mornings I think, well this is America, we have always in the past managed to turn ourselves around, and there is an FDR just around the corner if we could only find him. I was kind of hoping Obama might be FDR, but maybe not.

Krugman: "Why the public option matters" (Updated)

UPDATE: "Obama Tells Pelosi, Reid to Prepare to Compromise on Health Bill" (Wall Street Journal).

Paul Krugman:

Most arguments against the public option are based either on deliberate misrepresentation of what that option would mean, or on remarkably thorough misunderstanding of the concept, which persists to a frustrating degree: I was really surprised to see Joe Klein worrying about the creation of a system in which doctors work directly for the government, British-style, when that has nothing whatsoever to do with the public option as proposed. (Forty years of Medicare haven’t turned the US into that kind of system — why would having a public plan change that?)

But what is one to make of the practical, political argument from the likes of Ezra Klein, who argue that any public plan actually included in legislation probably wouldn’t make that much difference, and that reform is worth having even without such a plan?

There are three reasons to be suspicious of that argument.

The first is that I suspect that Ezra and others understate the extent to which even a public plan with limited bargaining power will help hold down overall costs. Private insurers do pay providers more than Medicare does — but that’s only part of the reason Medicare has lower costs. There’s also the huge overhead of the private insurers, much of which involves marketing and attempts to cherry-pick clients — and even with community rating, some of that will still go on. A public plan would probably be able to attract clients with much less of that.

Second, a public plan would probably provide the only real competition in many markets.

Third — and this is where I am getting a very bad feeling about the idea of throwing in the towel on the public option — is the politics. Remember, to make reform work we have to have an individual mandate. And everything I see says that there will be a major backlash against the idea of forcing people to buy insurance from the existing companies. That backlash was part of what got Obama the nomination! Having the public option offers a defense against that backlash.

What worries me is not so much that the backlash would stop reform from passing, as that it would store up trouble for the not-too-distant future. Imagine that reform passes, but that premiums shoot up (or even keep rising at the rates of the past decade.) Then you could all too easily have many people blaming Obama et al for forcing them into this increasingly unaffordable system. A trigger might fix this — but the funny thing about such triggers is that they almost never get pulled.

Let me add a sort of larger point: aside from the essentially circular political arguments — centrist Democrats insisting that the public option must be dropped to get the votes of centrist Democrats — the argument against the public option boils down to the fact that it’s bad because it is, horrors, a government program. And sooner or later Democrats have to take a stand against Reaganism — against the presumption that if the government does it, it’s bad.

Howie P.S.: The "if the government does it, it’s bad" argument doesn't seem to apply to fighter planes or bank bailouts.

Krugman: "Nick Beaudrot explains it all"

Paul Krugman (NY Times):

Health reform’s consequences:

Howie P.S.: "Nicholas Beaudrot is an accidental political observer living in Seattle, Washington. By day he writes software for Amazon.com, snowboards, and plays ultimate frisbee. By night [and morn] he posts to this blog, runs the Seattle chapter of Drinking Liberally, and tries to cook decent Italian cuisine."