September 10, 2003

Paul Krugman, New York Times Columnist and Author of "The Great Unraveling: Losing Our Way in the New Century"

Franken's book, Conason's new book, now a book by Paul
Krugman...Krugman, of course, I call the moral
conscience of the NYTwits and the Voice of Greater
Greenspania...These books are political grenades hurl
them at the thought barricades...You are not alone....
Paul Krugman to BuzzFlash.com: "Well, a couple of
things. The first is that a good part of the media are
essentially part of the machine. If you work for any
Murdoch publication or network, or if you work for the
Rev. Moon's empire, you're really not a journalist in
the way that we used to think. You're basically just
part of a propaganda machine. And that's a pretty
large segment of the media.


September 11, 2003

Paul Krugman, New York Times Columnist and Author of "The Great Unraveling: Losing Our Way in the New Century"

A BUZZFLASH INTERVIEW

Paul Krugman to BuzzFlash.com: "Well, a couple of
things. The first is that a good part of the media are
essentially part of the machine. If you work for any
Murdoch publication or network, or if you work for the
Rev. Moon's empire, you're really not a journalist in
the way that we used to think. You're basically just
part of a propaganda machine. And that's a pretty
large segment of the media.

As for the rest, certainly being critical at the level
I've been critical - basically saying that these guys
are lying, even if it's staring you in the face - is
a very unpleasant experience. You get a lot of heat
from people who should be on your side, because they
accuse you of being shrill, which is everybody's
favorite word for me. And you become a personal
target."

* * *

Thank God for this Man! A Princeton University
professor who pens a column for the New York Times,
Krugman is probably the most visible mainstream media
commentator, among a handful, who "gets it." He views
the Bush Cartel as "revolutionary power...a movement
whose leaders do not accept the legitimacy of our
current political system." In short, Krugman
understands that the Bush gang is anti-democracy at
its core.

But, as an economics professor, Krugman is most on his
game when he exposes the bumbling, tragic farce of the
fraud known as Bush economics (something that might
have been created by the Keystone Cops if they had
turned sides and become robbers). A con artist on a
riverboat gambling ship has more financial acumen than
the Bush crew. Krugman reveals the Bush Cartel for the
greedy, reckless, incompetent hustlers that they are.
Like most BuzzFlash readers, he is amazed that the
nation, as whole, hasn't caught on to the fact that we
have the bank robbers running the bank.

"The Great Unraveling: Losing Our Way in the New
Century," Krugman's new book [LINK], is primarily a
collection of past Krugman columns. The man is an
Emile Zola for our time, unforgiving in his exposure
of the insidious financial incompetence and calculated
deception of the current administration. Because of
his academic background, he has the heft to back up
his trenchant perspective with the "bonafides."

Coming across Paul Krugman's column in the New York
Times is like finding an oasis in the desert.

Interviewing Krugman was like drinking from a cool
pond in a 120-degree weather.

* * *

BUZZFLASH: Many of our readers don't realize that you
are an economics professor at Princeton. How did you
come to write a column for The New York Times op-ed
page?

KRUGMAN: Well, they just called me out of the blue.
Actually it was Tom Friedman who acted as
intermediary, because I'd met him. But it was just out
of the blue. It was 1999, and at the time, it seemed
like our problem was: "How do we deal with prosperity
and all the interesting things that were happening in
the business world?" They thought that they needed
somebody to write about that, and somehow had learned
that in addition to regular professor-type stuff, I'd
actually been writing journalistic pieces for Fortune
and for Slate, and they asked me to come on. It seemed
like it might be interesting and fun, and of course we
figured that the U.S. policy would be sensible and
reasonable, and I'd be writing mostly about disasters
elsewhere of the new economy. And what do you know? It
turned out to be something quite different from
anything we imagined.

BUZZFLASH: Your focus is often on international trade
and international monetary systems.

KRUGMAN: Yes, the professional work is basically about
that.

BUZZFLASH: You're not a full-time journalist. Do you
think that gives you a bit of distance from both the
media and from politics when you write your columns?

KRUGMAN: What it means is that I don't have any of the
usual journalistic or the journalists' incentives. I'm
not part of the club. I'm not socially part of that
world. I don't go to Washington cocktail parties, so I
don't get sucked into whatever kind of group-think
there may be, for better or for worse. I don't
necessarily hear all the latest rumors, but I also
don't fold in with the latest view on how you're
supposed to think about things.

It also means that I'm moonlighting. This is not my
career, or I didn't think it is, anyway. And if it
means that if I'm frozen out, if the Times finally
decides I'm too hot to handle and fires me or
whatever, that's no great loss. So I'm a lot more
independent than your ordinary average journalist
would be.

BUZZFLASH: You make the case that a revolutionary,
right wing movement has set out to transform the
United States, and they're succeeding. So much of the
print media and so many television broadcast
journalists have become more like stenographers for
the official government spin than probing journalists.
What's your take on that?

KRUGMAN: Well, a couple of things. The first is that a
good part of the media are essentially part of the
machine. If you work for any Murdoch publication or
network, or if you work for the Rev. Moon's empire,
you're really not a journalist in the way that we used
to think. You're basically just part of a propaganda
machine. And that's a pretty large segment of the
media.

As for the rest, certainly being critical at the level
I've been critical - basically saying that these guys
are lying, even if it's staring you in the face - is
a very unpleasant experience. You get a lot of heat
from people who should be on your side, because they
accuse you of being shrill, which is everybody's
favorite word for me. And you become a personal
target. It can be quite frightening. I've seen cases
where a journalist starts to say something less than
reverential about Bush, and then catches himself or
herself, and says something like, "Oh, I better not
say that, I'll get 'mailed.'" And what they mean by
"mail" is hate mail, and it also means that somebody
is going to try to see if there's anything in your
personal history that can be used to smear you.

It's like shock therapy, aversion therapy. If you
touch these things, you yourself are going to get an
unpleasant, painful electric shock. And most people in
the media just back off as a result.

BUZZFLASH: Bottom line: It's just easier not to be
critical.

KRUGMAN: Your personal life, your professional life,
is much easier if you oscillate between reverential
pieces about the commander in chief and cynical pieces
which equate minor foibles on one side with grotesque
lies or deceptions on the other.

BUZZFLASH: Economic decisions are certainly
politicized, but you do have numbers - you have the
advantage of showing what works, what doesn't, which
numbers add up, and which don't. It seems like so much
of the criticism you get is sort of dismissive, but no
one challenges you on the substance of the arguments
you're making.

KRUGMAN: Oh, I get challenged all the time on the
substance, but usually by people who have no clue, or
who are just looking for anything. So if I say the
number is 2.15 and it's actually 2.143, someone will
come after me, saying: "Lie, lie it's inaccurate!"
So that's what's going on. But the amazing thing about
this is that we're not talking about close calls here.
When you talk about [Bush] administration policy, it's
not a case of, well, "OK, maybe I disagree with your
model, but according to your model, this policy will
do what you say it will." These guys are insisting all
the time that two minus one equals four. There isn't
any reasonable argument in their favor, but there's a
lot of power in their favor.

BUZZFLASH: There's a wonderful chapter in the book of
your collection of columns on that theme. Let's focus
on something specific - the unprecedented deficit.
Last week, I think it was projected at nearly $500
billion, staggering even beyond Bush Senior's records
in the early '90s. How is it that this has not become
more of an issue, and why don't more Americans see
this as gross mismanagement of the economy?

KRUGMAN: Well, for the general public, it's very
abstract. It's very hard to understand.
Understandably, there are a very small number of
people who sit down and do the accounting, and say,
"Gee, how are we going to pay for Social Security in
the next decade, given this?" It's not quantum
mechanics; it's not hard stuff, but it does take some
attention. The truth is, when I started doing this
column, I wasn't a U.S. budget expert at all, and I
had to put in a lot of work learning how to read those
numbers. And you don't expect the guy in the street to
understand that.

As for the media, I guess the point is that not very
many people understand this stuff. And those who do -
the idea of saying, "My god, these guys are looting
the country" - that's uncool. It's not what you want
to do. Right now there's a column in the latest
Newsweek entitled, "The Brainteaser of Deficit Math,"
which basically confirms everything I've been saying
all along, that this is wildly irresponsible and it's
actually unsustainable. But the tone is kind of
distant and cool. I don't know whether he actually
doesn't feel any outrage, or just feels he shouldn't
do that.

BUZZFLASH: Two points to add to that is during the
last press conference that Bush held before he went
off to Crawford, Texas, he was asked once or twice
about the deficit by a couple of reporters. And he
deflected the questions and kept talking about jobs.
You could tell there was a clear strategy to not talk
about the deficit. Instead, Bush talked about
something tangible to make it appear to the American
public that Bush was concerned about creating jobs.

Do you think part of the reason that people don't hold
the Bush administration more accountable is that they
basically just give it the benefit of doubt? As if to
say, "Surely someone in power has to know what they're
doing; there has to be logic to the madness and order
in the chaos."

KRUGMAN: I waver on that. Sometimes I think that's
what people think. Certainly, I think that's the case
with a lot of the media. The concept that the
president of the United States is flat-out lying about
the sustainability of his own economic policy -
that's too high a hill for them to climb. And I guess
the general public tends to give him the benefit of
the doubt.

But there's a definite tilt in the way these things
are covered and perceived. I think the average voter
in California is feeling outraged about the state's
$38 billion deficit, and then you stop and think for a
second. You say, wait a second - first of all, it's
not $38 billion. It turns out that was a two-year
number, and this year they've closed the books. And
it's only $8 billion for next year. And, anyway, that
number should be as abstract and remote from the
ordinary residents of California as the national
budget deficit is from the ordinary American.

But there's a machine that keeps on beating it out,
saying Davis is bad; Davis is irresponsible; the
deficit - he lied to us. And the press picks it up,
and, in turn, it makes its way to the public. So you
have a situation in which mainstream publications
continue to report and hammer on Davis' $38 billion
deficit, which isn't even remotely true, while Bush,
for the most part, gets a free pass on the $500
billion deficit which is absolutely real.

BUZZFLASH: In your book, you give special attention to
the origins of the California energy crisis. Who would
you say is to blame for that?

KRUGMAN: What actually happened in California was that
the system was a little short on capacity - not
actually less capacity than demand, but the usual
margin wasn't there because of a drought and a couple
of other things. That created a situation in which
energy companies could game the system by
strategically taking a plant offline or scheduling a
power transmission in such a way that it could be
guaranteed to create congestion on the transmission
grid, and a whole bunch of other strategies. Basically
by pulling power off the market, they could drive
prices up.

So what you had was a basically normal, slightly tight
power situation that was transformed into a wild chaos
of brownouts, blackouts, and prices up to 50 times
what's normal due to companies gaming the system. It
wasn't some vast conspiracy. It was mostly companies
seeing what they could do individually. And it was
created by a badly conceived deregulation scheme that
set the system up for this to happen. So that's the
story, and if you have to say who's to blame, well,
companies were out there maximizing profits quite
ruthlessly, but that's to be expected. You want to
blame Pete Wilson for setting up the system where that
could happen, and you want to blame the energy
regulators, which basically means the feds, for
refusing to do anything about it.

BUZZFLASH: You had a wonderful column on Arnold
Schwarzenegger, "Conan the Deceiver," and what little
details he's revealed of his economic plan. I think it
must be maddening for you to actually understand what
the real-life consequences are of the empty rhetoric
that politicians make.

KRUGMAN: Well, I've given up a lot to do this column.
My habitat before was not just academics, but I was
part of the sort of high-level, very genteel policy
circuit - you know, finance ministers, economists and
big bankers, sitting around tables with glasses of
mineral water, and having high-minded discussions
about global policy. I'm very much part of that, or I
was very much part of that comfortable world where the
working assumptions - the pretense, if you like - is
that we're all men of good will, and it's all
intelligent and that the issues are deep. And if there
are divisions, it's because there are really two
sides.

And then here I am in the middle of this, trying
desperately to get a few more people to notice that we
have wildly dishonest, irresponsible people making
policy in the world's greatest nation. And currents of
abuse are coming in the mail and over the e-mails, as
we saw. There are many mornings when I wake up and
say, "Why am I doing this? But you got to do it."

BUZZFLASH: Grover Norquist, head of Americans for Tax
Reform and a board member of the National Rifle
Association and GOP advisor, made a comment that he
wants to shrink the size of the federal government so
small that he could drown it in a bathtub. When you
look at the Bush economic policy, are we dealing with
an ideology to destroy social programs and the federal
government? Or is it mismanagement? Or both?

KRUGMAN: I think you have to think of this as there's
more than one player in this thing. If you ask
Norquist or the Heritage Foundation about where the
economic and social policy intelligentsia really
stands, their aim is to roll us back to Herbert Hoover
or before. Norquist actually thinks that we've got to
get back to before the progressive movement - before
the McKinley era, which actually is one of Karl Rove's
guiding lights as well. So there's definitely an
important faction in the Bush administration and in
the Republican Party that really wants to unravel all
of this stuff and basically wants us to go back to a
situation where, if you are unlucky, and you don't
have enough to eat, or you can't afford medical care,
well, that's just showing that you weren't
sufficiently provident. And then, for these people,
there would be no social safety net whatsoever.

Other people in the party, and other people in the
coalition, have deluded themselves into thinking that
somehow this is all going to be painless, and we're
going to grow our way out of the deficit. Other people
really don't care about any of that and are viewing
their alliance with these people as a way to achieve
their social goals - basically roll back the
revolution in social mores over the past few decades.

So there is a coalition, but there's no question that
if you ask what do the core ideologues want, the
answer is they want to roll it all back. If you looked
at what the Heritage Foundation says, they use the
terms "New Deal" and "Great Society" as essentially
curse words. Everything Franklin Roosevelt or Lyndon
Johnson did to provide a little bit of a cushion for
Americans having bad luck is a bad thing, from their
point of view.

BUZZFLASH: As a professor, if you were giving a
lecture and you had to define the economic policy of
the Bush administration, could you get your arms
around it? How would you define it?

KRUGMAN: There is no economic policy. That's really
important to say. The general modus operandi of the
Bushies is that they don't make policies to deal with
problems. They use problems to justify things they
wanted to do anyway. So there is no policy to deal
with the lack of jobs. There really isn't even a
policy to deal with terrorism. It's all about how can
we spin what's happening out there to do what we want
to do.

Now if you ask what do the people who keep pushing for
one tax cut after another want to accomplish, the
answer is they are basically aiming to create a fiscal
crisis which will provide the environment in which
they can basically eliminate the welfare state.

BUZZFLASH: Talking about perception, why is it, even
after the staggering deficits, and three million jobs
lost, when you look at the polls, ordinary people
perceive Republicans as better at managing the economy
and the federal budget than Democrats. Even though
we're just starting to understand just how good the
Clinton-Gore economic policies were, the false
perception still exists the Republicans can handle the
economy better.

KRUGMAN: Again, I think it comes back to press
coverage. Just this weekend, I was looking at
something: There's an enormous scandal right now
involving Boeing and a federal contract, which appears
to have been overpaid by $4 billion. The Pentagon
official who was responsible for the contract has now
left and has become a top executive at Boeing. And
it's been barely covered in the press - a couple of
stories on inside pages. You compare that with the
White House travel office in 1993. There were
accusations, later found to be false, that the
Clintons had intervened improperly to dismiss a couple
of employees in the White House travel office.

That was the subject, in the course of one month, of
three front-page stories in the Washington Post. So if
people don't understand how badly things are being
managed now, and have an unduly negative sense of how
things were managed in the Clinton years, well, there
in a nutshell is your explanation.

BUZZFLASH: If you had to make a projection, do you
think Clinton's presidency - specifically his
economic policy and what he did in terms of generating
jobs and creating surpluses - will survive as his
legacy, versus what happened afterwards with the Bush
administration?

KRUGMAN: Well, I think Clinton's successes will be
overshadowed by the scale of the disaster that
followed. Not that Clinton will be blamed. I think
historians will say, "Gee, there was a sensible,
basically well-intentioned government that dealt
successfully with a bunch of crazies."

A lot of good things happened in the 1920s, although
there were a couple of really bad presidents. But all
of that now, in historical memory, is colored by the
realization of what followed afterwards.

I think that with the looming disasters of the budget
on foreign policy - and the things that really scare
me, which I know we're not going to get into but let's
just mention the erosion of civil liberties at home -
I think that, in retrospect, this will be seen in
terms of how did the country head over this cliff. I
hope I'm wrong. If there's regime change in 2004, and
the new man actually manages to steer us away from the
disasters I see in front of us, then we'll probably be
talking a lot about the long boom that was begun
during the Clinton years, and how it was resilient,
even to an episode of incredibly bad management.

But I don't think that's the way it's going to play
out, to be honest. Whatever happens in the election, I
think that we've done an extraordinary amount of
damage in the last three years.

BUZZFLASH: Looking just at the economic impact of
Iraq, how much of a strain will that continue to be?

KRUGMAN: Well, there are levels and levels. I think
Iraq is going to cost us $100 billion a year for the
indefinite future. Now at one level, you can say,
well, that's only about 20 percent of our budget
deficit, and it's only about 5 percent of the federal
budget. But on the other hand, it's being added onto a
very nasty situation. It's a little unpredictable. I
don't know how much collateral damage Iraq is going to
inflict. At the rate we're going, it's clear that
unless something happens soon, we're going to have a
much bigger Army. It may seem like we have enough
troops, but I've been talking to people, including
officers, who are just crying about what they see as
the degradation of the Army's quality because of all
of this.

Right now, I'm trying to understand what a petroleum
industry expert is telling me, when he says that some
of the market futures suggest that the market is
pricing in about a one-in-three chance that unrest in
Iraq spreads to Saudi Arabia. And if that happens, of
course, then we're talking about a mammoth disaster.

BUZZFLASH: I've got to say I don't know how you sleep
at night.

KRUGMAN: I have a little trouble, to be honest. It's
this funny thing: I lived this very comfortable life
in a very placid college town, with nice people all
around. And life is good. But some of us - not just
me, but a fair number of people, including my friends
-- we've looked at the news, and we sort of
extrapolate the lines forward. And there's this
feeling of creeping dread.

BUZZFLASH: James Carville, I think, called you
courageous. Do you just call it like you see it? Do
you just look at the numbers and tell people what the
numbers tell you?

KRUGMAN: I could have made the decision to either not
do this column or to do it and to say, OK, my
expertise is economics, and I'm going to write this in
a very cool fashion. And I'm going to write columns
praising something, anything about the Bushies, and
make snide attacks on the Democrats, just to keep an
even-handed feel to it, so that people won't get mad
at me. And I decided not to do that. For whatever the
reason was - pig-headedness or whatever - I
certainly stuck my neck out quite a lot.

A BUZZFLASH INTERVIEW

* * *

Order your copy of Paul Krugman's "The Great
Unraveling: Losing Our Way in the New Century" from
BuzzFlash!
http://www.buzzflash.com/premiums/krugman.html

Resources:

The New Paul Krugman Website
http://www.wws.princeton.edu/~pkrugman/

Un-Official Paul Krugman Archive
http://www.pkarchive.org/

Alan Sloan column, "The Brainteaser of Deficit Math"
http://www.msnbc.com/news/959467.asp


Posted by richard at September 10, 2003 02:00 PM