The Sum of Some Fears: Economic Prospects and Denial

The Sum of Some Fears - New York Times: By Paul Krugman

So why did people seem so shocked by a few more bad housing and oil numbers? What I guess I didn’t realize was how deep the denial still runs.

Over the last couple of years a peculiar conviction emerged among some analysts — mainly, for some reason, among those with right-wing political leanings — that the housing bubble was a myth and that the real bubble was in oil prices....

I didn’t think many people believed this stuff, but the market’s sudden freakout over housing and oil suggests that I was wrong.

Anyway, now reality is settling in. And there’s one more thing worth mentioning: the economic expansion that began in 2001, while it has been great for corporate profits, has yet to produce any significant gains for ordinary working Americans. And now it looks as if it never will.

That is, perhaps, Krugman's oblique response to David Brooks' prior column. I was hoping for a more comprehensive response.

Health Care Terror

New York Times: By Paul Krugman

That’s what we learn from the overwhelming response to Michael Moore’s “Sicko.” Health care reformers should, by all means, address the anxieties of middle-class Americans, their growing and justified fear of finding themselves uninsured or having their insurers deny coverage when they need it most. But reformers shouldn’t focus only on self-interest. They should also appeal to Americans’ sense of decency and humanity.

What outrages people who see “Sicko” is the sheer cruelty and injustice of the American health care system — sick people who can’t pay their hospital bills literally dumped on the sidewalk, a child who dies because an emergency room that isn’t a participant in her mother’s health plan won’t treat her, hard-working Americans driven into humiliating poverty by medical bills.

“Sicko” is a powerful call to action — but don’t count the defenders of the status quo out. History shows that they’re very good at fending off reform by finding new ways to scare us. ...

Now, every wealthy country except the United States already has some form of universal care. Citizens of these countries pay extra taxes as a result — but they make up for that through savings on insurance premiums and out-of-pocket medical costs. The overall cost of health care in countries with universal coverage is much lower than it is here.

Meanwhile, every available indicator says that in terms of quality, access to needed care and health outcomes, the U.S. health care system does worse, not better, than other advanced countries — even Britain, which spends only about 40 percent as much per person as we do.

Yes, Canadians wait longer than insured Americans for elective surgery. But over all, the average Canadian’s access to health care is as good as that of the average insured American — and much better than that of uninsured Americans, many of whom never receive needed care at all. ...

“We have always known that heedless self-interest was bad morals; we know now that it is bad economics.” So declared F.D.R. in 1937, in words that apply perfectly to health care today. This isn’t one of those cases where we face painful tradeoffs — here, doing the right thing is also cost-efficient. Universal health care would save thousands of American lives each year, while actually saving money.

What is it that our fellow citizens, almost uniquely among the people of the world, can't seem to get about this? It isn't that hard. What is wrong with us?

Sacrifice Is for Suckers

New York Times: By Paul Krugman

Back when the investigation into the leak of Valerie Plame Wilson’s identity began, Mr. Bush insisted that if anyone in his administration had violated the law, “that person will be taken care of.” Now we know what he meant. ...

Mr. Bush says that Mr. Libby’s punishment remains “harsh” because his reputation is “forever damaged.” Meanwhile, Mr. Bush employs, as a deputy national security adviser, none other than Elliott Abrams, who pleaded guilty to unlawfully withholding information from Congress in the Iran-contra affair. Mr. Abrams was one of six Iran-contra defendants pardoned by Mr. Bush’s father, who was himself a subject of the special prosecutor’s investigation of the scandal.

In other words, obstruction of justice when it gets too close to home is a family tradition. And being a loyal Bushie means never having to say you’re sorry.

A suitable response by Paul Krugman to David Brooks' insufferable column earlier this week.

Just Say AAA

New York Times: By PAUL KRUGMAN

What do you get when you cross a Mafia don with a bond salesman? A dealer in collateralized debt obligations (C.D.O.’s) — someone who makes you an offer you don’t understand.

...Now, you might have thought that S.& P. and Moody’s, which gave Thailand an investment-grade rating until five months after the start of the Asian financial crisis, and gave Enron an investment-grade rating until days before it went bankrupt, would by now have learned to be a bit suspicious. And you would think that the regulators, in particular the Federal Reserve, would have learned from the stock bubble and the wave of corporate malfeasance that went with it to keep a watchful eye on overheated markets.

But apparently not. And the housing bubble, like the stock bubble before it, is claiming a growing number of innocent victims.

So, Paul, maybe a column on how and why this happens, repeatedly?

The Murdoch Factor

New York Times: By Paul Krugman

There doesn’t seem to be any legal obstacle to the News Corporation’s bid for The Journal: F.C.C. rules on media ownership are mainly designed to prevent monopoly in local markets, not to safeguard precious national informational assets. Still, public pressure could help avert a Murdoch takeover. Maybe Congress should hold hearings.

I detest Rupert Murdoch and all he stands for.
Paul Krugman is one of my favorite columnists (probably second to my classmate Frank Rich), and I rarely disagree with him in a major way.

This (Congressional hearings on a Murdoch takeover of the WSJ) may be his worst idea ever.

The 'Usefully Dangerous' Economist

From Dissent:

This is the story of two economists—John Kenneth Galbraith, who died last year at age ninety-seven, and Paul Krugman, who at fifty-four is in his prime as an economist and a columnist for the New York Times. Like Galbraith, Krugman is a forthright liberal, the most well-known economist of his generation, skilled at writing about economics for a general public.

Yet relations between the two were not what one might think. Throughout much of the 1990s, Krugman declared war on popular writers of economics, and sneeringly said of Galbraith that “he has never been taken seriously by his academic colleagues, who regard him as more of a ‘media personality.’” The “fault line,” he wrote, “between serious economic thinking and economic patent medicine, between the professors and the policy entrepreneurs, is at least as important as the divide between left and right.”

But the world changed when George W. Bush was elected in 2000, and what is arguably the worst administration in the history of the United States took office. It seemed to shake Krugman to the core. He now says of his polemics in the 1990s, “I was wrong obviously. If I’d understood where politics would be now, it would have been quite different.”

Whether lashing out at the administration’s shifting explanations as to why they were delivering truckloads of cash to the wealthy in the form of tax cuts or explaining the dishonesty in the administration’s plans to privatize Social Security or puncturing the cultlike worship of Alan Greenspan or railing against Bush’s deceptions about the war or describing how oil company lobbyists made energy policy for Dick Cheney’s task force, Krugman has committed himself to exposing “the lies of the powerful.” ...

Now his explanation incorporates power and politics: “The government can tilt the balance of power between workers and bosses in many ways—and at every juncture this government has favored the bosses.” The minimum wage has withered, tax policy favors the rich, the administration blocked corporate reform, thus allowing CEOs to reward themselves at unprecedented levels, and perhaps most important, “There has been a concerted attack on the institutions that have helped moderate inequality—in particular unions.” This is Krugman at his “pleasantly contentious” and “usefully dangerous” best. Somewhere, John Kenneth Galbraith is smiling.

Lies, Sighs and Politics --more from Krugman, on health plans

From The New York Times:

There wasn’t anything comparable to Mr. Romney’s rewritten history in the Democratic debate two days earlier, which was altogether on a higher plane. Still, someone should have called Hillary Clinton on her declaration that on health care, “we’re all talking pretty much about the same things.” While the other two leading candidates have come out with plans for universal (John Edwards) or near-universal (Barack Obama) health coverage, Mrs. Clinton has so far evaded the issue. But again, this went unmentioned in most reports.

By the way, one reason I want health care specifics from Mrs. Clinton is that she’s received large contributions from the pharmaceutical and insurance industries. Will that deter her from taking those industries on?

Lies, Sighs and Politics

From The New York Times: By Paul Krugman

Look, debates involving 10 people are, inevitably, short on extended discussion. But news organizations should fight the shallowness of the format by providing the facts — not embrace it by reporting on a presidential race as if it were a high-school popularity contest.

For if there’s one thing I hope we’ve learned from the calamity of the last six and a half years, it’s that it matters who becomes president — and that listening to what candidates say about substantive issues offers a much better way to judge potential presidents than superficial character judgments. Mr. Bush’s tax lies, not his surface amiability, were the true guide to how he would govern.

Krugman lambastes the media for superficiality (to put it mildly) of its coverage, then and now.
Why do so many of us put up with (or contribute to) it?

Give 'em hell, Paul!

From The New York Times: For God’s Sake: By PAUL KRUGMAN

The infiltration of the federal government by large numbers of people seeking to impose a religious agenda — which is very different from simply being people of faith — is one of the most important stories of the last six years. It’s also a story that tends to go underreported, perhaps because journalists are afraid of sounding like conspiracy theorists.