Obama's Krugman Problem

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The 2000-2003 period was a dark time for the left. There were few in the media whom we could point to as a voice of truth in a period of increasing media fealty to Bush. New York Times columnist Paul Krugman was one of the few brave voices of truth and eerie prescience on issue after issue of concern to progressives. As Jerome put it in early December:

If there's one person that I would point to in the establishment press that was there during the wilderness, the period of '01-'03, before Dean arrived on the scene, it was Paul Krugman. The guy should be awarded some sort of Presidential award by the next President for his truth telling while nearly all the rest of the establishment press could only be found on their knees in front of BushCo during the beginning of this decade.

Which is why I take Krugman's concerns about several of Barack Obama positions to heart. For one thing, he's been overtly critical of Obama on his treatment of Social Security:

Lately, Barack Obama has been saying that major action is needed to avert what he keeps calling a "crisis" in Social Security -- most recently in an interview with The National Journal. Progressives who fought hard and successfully against the Bush administration's attempt to panic America into privatizing the New Deal's crown jewel are outraged, and rightly so.

And he's identified Obama's stimulus package as the least progressive of the Democrats' plans:

The Obama campaign's initial response to the latest wave of bad economic news was, I'm sorry to say, disreputable: Mr. Obama's top economic adviser claimed that the long-term tax-cut plan the candidate announced months ago is just what we need to keep the slump from "morphing into a drastic decline in consumer spending." Hmm: claiming that the candidate is all-seeing, and that a tax cut originally proposed for other reasons is also a recession-fighting measure -- doesn't that sound familiar?

Anyway, on Sunday Mr. Obama came out with a real stimulus plan...[H]is stimulus proposal is similar to those of the other Democratic candidates, but tilted to the right.

But most concerning of all are the red flags Krugman has raised vis a vis Obama's health care proposal, which, as has been made quite clear by now by both Clinton and Obama alike, does not include an individual mandate and thus can not be technically considered universal. As a counter to this, Obama claims health care would be affordable under his plan and, hence, the uninsured would buy in.

This is where Krugman bristles.

Why have a mandate? The whole point of a universal health insurance system is that everyone pays in, even if they're currently healthy, and in return everyone has insurance coverage if and when they need it.

And it's not just a matter of principle. As a practical matter, letting people opt out if they don't feel like buying insurance would make insurance substantially more expensive for everyone else.

If you'd like specifics as to the difference a mandate makes, take a look at this chart Krugman posts on his blog citing a study by leading health care economist Jonathan Gruber, which outlines the vast difference in both coverage and cost of a mandate plan vs. a non-mandate plan. Upshot: non-mandate plans cover only about half the uninsured and, subsequently, the cost per newly insured is $4400 vs. $2700 under a mandate plan. No wonder Senator Clinton has taken to touting it as her prime point of distinction with Senator Obama.

But no matter how many statistics Krugman points to, nothing cuts to Krugman's deep-rooted distrust if Obama more than this indictment of Obama's non-mandate strategy:

From the beginning, advocates of universal health care were troubled by the incompleteness of Barack Obama's plan, which unlike those of his Democratic rivals wouldn't cover everyone. But they were willing to cut Mr. Obama slack on the issue, assuming that in the end he would do the right thing.

Now, however, Mr. Obama is claiming that his plan's weakness is actually a strength. What's more, he's doing the same thing in the health care debate he did when claiming that Social Security faces a "crisis" -- attacking his rivals by echoing right-wing talking points.

Krugman wrote that on November 30, 2007. Remember what I said about Krugman's prescience? Cut to Krugman's February 1st post on his blog titled "Obama Does Harry and Louise Again" in which he draws our attention to a particularly problematic mailer from the Obama campaign that uses a not so subtle anti-government message to criticize Clinton's plan:

The way Hillary Clinton's health care plan covers everyone is to have the government force uninsured people to buy insurance, even if they can't afford it.

Ohhh, big government baaaad. But that's not the worst of it. Krugman updates his post:

Ezra Klein adds a screenshot of the original Harry and Louise ad -- they've obviously deliberately copied it. Just to remind everyone, Harry and Louise were the center of the vile smear campaign the insurance lobby waged against health care reform in 1993 -- and this time a Democratic candidate is doing the smearing for them. [...]

I know that Obama supporters want to hear no evil, but this is really, really bad.

So one has to wonder, when trying to differentiate himself from his rivals on various domestic issues, why does Obama go consistently to the right? Krugman nails it.

Mr. Obama wanted a way to distinguish himself from Hillary Clinton -- and for Mr. Obama, who has said that the reason "we can't tackle the big problems that demand solutions" is that "politics has become so bitter and partisan," joining in the attack on Senator Clinton's Social Security position must have seemed like a golden opportunity to sound forceful yet bipartisan.

But...on Social Security, as on many other issues, what Washington means by bipartisanship is mainly that everyone should come together to give conservatives what they want.

We all wish that American politics weren't so bitter and partisan. But if you try to find common ground where none exists -- which is the case for many issues today -- you end up being played for a fool. And that's what has just happened to Mr. Obama.

And indeed, it's hard not to conclude that so too has the progressive blogosphere been taken in, as they have to a large degree annointed the less progressive and the less overtly partisan candidate as their own, thus giving up two fights that once were central to the movement's raison d'etre. What's been quite amusing in the wake of the embrace of Obama by the wine-track progressives is to watch them bend over backwards to justify things Obama says or does, from his was-it-or-wasn't-it praise of Ronald Reagan to his less than progressive policy positions on several issues. At least Yglesias is starting to tire of it, but Kevin Drum, who has remained thankfully Obamania-immune to date, explains progressives' complex relationship with Obama.

Obama has clearly chosen his course, and there's really no way for him to give a wink and a nudge to folks like Matt and me to let us know that he's just kidding about all this kumbaya stuff. After all, it's part of his whole appeal to both independents and moderate conservatives, and his candidacy depends on that. So if you're a liberal in Obama's camp, you just have to cross your fingers and trust him.

Because in the end, this is what it all comes down to. Is Obama kidding or not? Does he really believe that he can enact a progressive agenda by reaching out to Republicans and bridging the red-blue divide, or is he just saying this as a way of shaping public opinion and winning an election? And if he does believe it, is he right?

Which, ironically, proves one of Hillary Clinton's criticisms of Obama true: that he represents a leap of faith. It also points to why Obama has a Krugman problem in the first place: that while Obama is an unknown, Krugman has a proven track record of sound progressive judgment and when Krugman speaks, progressives listen. At least they used to.

There's more...

Reality: Why Obama Is Exploiting Racism

Obama is trying to divert attention 1) from his stinging loss in New Hampshire, and 2) from his inadequacies as a presidential candidate, mostly his cluelessness about what he'd actually do if he were president -- most recently, about what he'd do to stimulate the economy.

"He speaks with so much passion, but I'm not sure what his views are on a lot of things," says [Maurice] Frye. He worries about a poor economy and sagging U.S. dollar. He wants more substance. "I think he speaks too generally. Not being specific hurts him because no one knows him that well yet."

Meekaaeel [DeBradley] agrees. "It's good that he keeps saying what the problems are over and over again, but I need to hear the solutions, too," he says. -- From the Reno Gazette-Journal, January 13, 2008

People aren't stupid. People can see that substantive plans are missing from his rhetoric. People can see that how he'll make "change" happen isn't spelled out. Well, at least those people who haven't drunk the Kool-Aid.

Renowned economist and NYT columnist Paul Krugman writes a devastating dissection of Obama's economic stimulus package today. "Disreputable" is the term that Krugman uses to describe the Obama campaign's first weak attempt. About Obama's second attempt, delivered on Sunday, Krugman says it's "tilted to the right" and that Obama "really is less progressive than his rivals on matters of domestic policy."

There's more...

Responding to Recession..(Obama less progressive than Clinton and Edwards)

Here is Krugman's piece on the various stimulus packages of the candidates running for president.  I have made some edits to cut out talk of the republicans and also to allow for fair use.  

The conclusion is that Obama really is less progressive than the others when it comes to domestic policy.
My opinion is that a lot of people on line are fooling themselves.  Obama is the black Joe Lieberman but in a much more attractive package... and one who speaks without whining. That's my opinion, take it or leave it.  It's not going to change.


By Paul Krugman
Published: January 14, 2008

Suddenly, the economic consensus seems to be that the implosion of the housing market will indeed push the U.S. economy into a recession, and that it's quite possible that we're already in one. As a result, over the next few weeks we'll be hearing a lot about plans for economic stimulus.

Since this is an election year, the debate over how to stimulate the economy is inevitably tied up with politics. And here's a modest suggestion for political reporters. Instead of trying to divine the candidates' characters by scrutinizing their tone of voice and facial expressions, why not pay attention to what they say about economic policy?

In fact, recent statements by the candidates and their surrogates about the economy are quite revealing.


There's more...

Krugman praises Edwards' economic stimulus plan

The national media (represented by the New York Times) is starting to call the economic situation what it really is (and actually has been for quite a while): a recession.

Despite the corporate media's notorious reluctance to report bad news about the economy, the business sections of national, regional, and local newspapers will be dominated by the issue in the days and weeks to come.

Why? Because things have gotten so bad they can't be covered up any more.

Americans feel it, too:

In the latest NYT/CBS News Poll, a whopping 62% said they think the economic situation is worsening. (4% said it's getting better, 33% said it stays the same)
Last time this poll revealed such pessimism was October 1990!

(http://graphics8.nytimes.com/packages/pd f/national/01142008_pollgraphics.pdf)

There's more...

Free Trade vs Smart Trade, Edwards takes on the Supply-Siders

Since the days of Reagan, America has been chasing a Theory.

Since the Clinton era, and the rise of NAFTA and Global Free Trade, our "Corporate Leaders" have been conducting an unprecedented Social Experiment.

The Experiment: Economic Darwinism

The Test Subjects in this Experiment: none other than American Workers and our "more competitive" counterparts, overseas.




Supply-siders have argued that Economic Growth comes from empowering Corporate Interests to become "More Productive", by whatever means necessary. Be it "Tax-Give-aways to the Wealthy", or "Job-Give-aways to Poor Foreigners", well that's just fine with them, long is it results in Corporate Growth.

Supply-siders are happy to trade away American Dignity for the sake of short-term Profits: "American Workers just need some retraining. They just need to apply themselves."

"We just need to learn to Adapt" ... (to Global Markets?)


That's the Theory, that's the Spin.  What are the Results of this on-going plan to outsource the American Dream?

There's more...

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