I’m tired of arguing about Krugman with everyone, but I’d like to point out a remarkable passage in Evan Thomas’s piece about Krugman in Newsweek:
If you are of the establishment persuasion (and I am), reading Krugman makes you uneasy. You hope he’s wrong, and you sense he’s being a little harsh (especially about Geithner), but you have a creeping feeling that he knows something that others cannot, or will not, see. By definition, establishments believe in propping up the existing order. Members of the ruling class have a vested interest in keeping things pretty much the way they are. Safeguarding the status quo, protecting traditional institutions, can be healthy and useful, stabilizing and reassuring. But sometimes, beneath the pleasant murmur and tinkle of cocktails, the old guard cannot hear the sound of ice cracking. The in crowd of any age can be deceived by self-confidence…
I agree with John that the piece was content-free in general. But I credit Thomas for admitting what role establishment media plays.
(via a reader in today’s WaPo chat with Kurtz)
Jesus, that is what I have been saying all along!
Not about Krugman (I’m more pro then con), but about the frickin’ establishment.
I was a little amazed by that passage, and honestly it points to advantage there is to having a Krugman rabble rouse some.
This is what I thought was preceptive take from Ed Kilgore on Krugman and where he is coming from.
and vice versa. you don’t get to be a member of the ruling class by promising to dismantle The System.
Hale "Bonddad" Stewart disagrees with Krugman.
Greenwald made the same point in a recent column, too.
What ruling class? This is America, where anyone with a few million in his pocket can make something of himself. Ya’ll are a bunch of Commies.
@Dennis-SGMM: This from a guy who wants an Italian car? That’s what your friends at Commie Martyrs High would like you to think, isn’t it?
Comrade General Stuck
Maybe we should start calling Krugman Grigori, the only one who can stop the bleeding.
That’s pure patriotism. The Italians were our staunch allies in WWII right after they were the Germans’ staunch allies.
edit: Ya’ got me: Nothing gets the chicks at old CMHS like a car whose horn plays the Internationale.
Is this really news? The status quo lives on, even Obama has talked about how hard it is to break out of it. Read the TNR article about how Senate Dems are vetoing Obama’s most progressive tax policies from the budget. The Democratic Party is just as invested in the status quo as the Republican Party.
As for Krugman, I don’t know if he is right, but isn’t the stock market just one big Ponzi scheme anyway? If the status quo plan being enacted now to fix the banks fails, this gives Obama the room to be radical. Honestly, I hope the status quo way works because it’ll hurt the least amount of people.
Not really, no. Price-to-earnings ratios are reasonably stable (not perfectly stable, but reasonably so) on average.
Leelee for Obama
Uh, really, talking about rare condor is really a disservice to the conservation of rare species.
Sure, the meat is tender and juicy, and the big lugs are easy to shoot at, but ….
Oh shit, sorry.
Well played sir, well played. The day is yours.
Now, I am off to try to sleep off some more of the cold that has parked itself inside my head.
I watched Krugman on the ABC Sunday news show and felt sorry for him. But I also realized that there is no grand conspiracy by the establishment. Just the typical shallow laziness and stupidity at work.
Krugman was part of the discussion roundtable, with George S, George Will, Cokie Roberts and Matthew Dowd, discussing Stephanopolous’ earlier interview with the Treasury secretary. It was soon clear that none of these people knew a damn thing about economics, and could not even pose an intelligent question to Krugman.
Cokie Roberts would panic and just admit that Congress really didn’t care about budgets or deficits. This is more revealing than Roberts would probably admit; Roberts’ is a Beltway insider (and daughter of a political dynasty) so she understands how the less intelligent boobs in Congress rely on willpower and bluster to cover for them.
George Will tried to cover himself by pulling an irrelevant historical anecdote out of his ass. And Matthew Dowd was just stumblebum stupid, unable to manage a coherent thought.
The Roundtable was necessary only because ABC has to showcase their high-priced talent. Krugman was game, but with no one to bounce ideas against, and no intelligent follow-up questions to respond to, just ended up looking like a bemused Buddha.
The solution might be to have an economics roundtable with another Nobel prize winner, or at least reporters who knew a damn thing about the economics beat.
By the way, David Gregory on "Meet the Press" did somewhat better in his interview with the Treasury secretary than anything that happened over on ABC. Gregory is not an economics whiz, but he is a better reporter and interviewer than Stephanopolous, and could at least ask a thoughtful question. It would be interesting to see him with Krugman.
Of course, the problem here is that those who are not in the ruling class don’t necessarily have a rational alternative. I realize that some lefties want to say, "We won, therefore we are right," but stale lefty ideas are just as stoopid as anything that comes from the wingnut or evangelical crowd.
I dunno, the lefty ideas by and large are not THAT bad.
That said, the problem is that a good portion of the public has a vested interest in the status quo. They don’t want to have to pay an extra buck for their Starbucks so the guy behind the counter can make the same wages they do.
Actually, they don’t want the guy behind the counter making the same wages they do, period.
Yes, and there are entire investment strategies based on looking at the relationship between equity value and actual capital asset value of a company.
When you can buy a company for less than it is really worth, then you can end up with a bargain. Knowing what a company is really worth is a basic investment concept.
Not a trading concept, which is a whole different animal.
Take a company like CHK (Chesapeake Energy) which owns energy assets (oil and gas reserves, let’s say) and whose real worth is based on real stuff. A few years ago you could buy those assets, on a per share basis, for a song, and when oil went high, the stock price went right with it.
Which, BTW, it will do again.
You know, I heard John McCain’s former economic advisor on NPR last week, saying that he thought nationalization of failed entities like AIG was necessary. Might be interesting to get him on with Krugman and have them debate various options; let the people see that even opposite ends of the political spectrum can agree on some things, and give them a more substantive sense of where they disagree.
Anyone not interested in Krugman’s shrillness should definitely not read Robert Kuttner today.
That piece somewhat reminds me of the Taibbi peice in the most recent Rolling Stone which covered much of the same area. I was stunned that they appear to be running most or all of the program essentially totally "off the books", in the sense there is no way for Congress to get the info on what is going on.
Comrade General Stuck
Wingnut unintended wisdom of day.
John Mccain on Senate floor now, opining on the unprecedented step of the federal government firing a CEO of a major corp.
"What message does that send to CEO’s of other companies"
"that they could be fired too?"
Well, er, yea Maverick. Might jerk a knot in their flush asses.
Nationalization is really not a solution. It begs the question of what kinds of policies and regulations need to be in place, and exactly how nationalization would a) solve the problem of toxic loans and b) lead to more liquidity in capital markets.
But I agree with you that having someone like McCain’s economic advisor and others discuss the issue with Krugman would be far more informative than the nonsense that we are being peppered with.
Another tidbit: during the ABC Sunday show discussion, Krugman brushed aside some comments from George Will or Cokie Roberts by noting that the budget deficit has been greater than the total of GNP (GDP) at various times in US history and did not hamper economic expansion. When George Stephanopolous jumped in with an angry challenge, "When?!" Krugman calmly — and obviously — replied, "Just after WW II."
This exchanged underscored a subtlety in the debate over the economy that is just flat out missing. And this subtlety also encompasses those who believe for some reason that nationalization is a magic bullet, without having the slightest clue as to how economies work.
I appreciate some of Kuttner’s argument about openness, but Sweet Jesus in a handcart, could we get some alternatives to the Treasury plan instead of handwringing about how some speculators will make a profit from the government’s actions?
Is this really news?
It is certainly not news that an Establishment seeks to perpetuate itself. The "news" is that the America’s mass media, the vaunted Fouth Estate without which there can be no liberty according to certain Founding Fathers, understands itself to be an accomplice to that corrupt motive and isn’t afraid to say so publicly.
This probably happened around the same time the media was slipping into it’s Liberal Media costume and our governing public servants became the "ruling class" (a phrase recently promulgated which people are already using).
Maybe you’re right and it’s not really news. We’ve never got a chance to see what it looks like in real time for a people to have defrauded themselves out of their own rights and legacy.
Tip o’ the hat to ya Cons: you really did back the Good Old Days. Which were as "Good" as the Good Old Boys are.
Montysano (All Hail Marx & Lennon)
Let’s remember that Krugman has, since the beginning of the financial clusterfuck, allowed for the possibility that this is The Big One, and that no amount of money-shoveling can fix the problem. Thomas says:
While CDS and all the other financial innovation are what grabs the headlines, the systemic problems are both much deeper and much broader. We’re tied to a system that demands infinite growth in a world of finite resources.
@Montysano (All Hail Marx & Lennon):
Which means what, exactly? The coming of some kind of economic rapture? Stuff like this is the economic equivalent of "Jesus is coming."
I credit John for calling what would happen to Krugman.
Link Newsweek cover image*
"Obama is Wrong" – that’s gonna be helpful – thanks.
* Does flickr not post here?
The grandson of the Socialist Party’s candidate for President gleefully cops to being "establishment" inclined. Looks like he learned something from the old man’s travails…
Montysano (All Hail Marx & Lennon)
I skimmed the Kuttner article, and agree that my emotional reaction is to be disappointed with Obama for the lack of transparency. But like other issues (detainee policy, prosecutions of Bush officials), I’m not sure that this is an area where Obama could, or even should, make a rapid or radical shift in policy. His measured pragmatism seems a better strategy. For good or ill, The Market now seems to be the de facto dictator of the USA. If any rapid moves are made, then The Market haz a sad, or gets the sniffles, and big chunks of the world start falling apart.
Holy Shit! Pension Benefit Guarantee Corp. put nest egg in stocks. $64 billion is a pittance these days, though.
Oh, and the guy who did it – former Lehman Bros. exec.
They’re f***king insane.
My understanding of nationalization is that it would allow the creditors of "failed" entities like AIG to get a pretty fair amount of their money back, and quickly, and that would add confidence to the system. I’ve seen it explained [I think in one of DougJ’s posts] in terms of an FDIC but for inter-bank loans, rather than consumers.
That’s actually only telling part of the story. If we look at the debt relative to the GDP both Reagan and W had us running at over 40% (debt/GDP). Obgama’s plan will take us from mid 40% to mid 60% (with our current GDP of $15 trillion). Other countries that are currently operating at such a ratio (~60%) are France, Germany, maybe Spain, and Italy is way over that (somewhere around 80%). So although we were operating at over 100% coming out of WWII, we’re not even going that far yet, and that’s sort of info that needs to be used as a stick for groups like the Blue Dog Dems.
To me, the people citing Thomas’s confessions of Establishmentarianism is his admission that there is, and he considers himself a part of, a ‘ruling class’ in the American political media.
Hasn’t everyone already ingested the right-wing talking point that Evan Thomas is the son of Norman and is therefore a socialistMarxistjihadistCommie?
Oh, that’s only relevant if he reports bad news on Republicans? Well, then, carry on.
Only possibly related to this conversation.
@Comrade General Stuck:
As long as we don’t start calling him Necker…
Anyone catch this from Howie today?
He sounds like he’s leading up to a juxtaposition, but he never gets there. "Sometimes the status quo is good" is not followed by "sometimes the status quo needs to change." Instead, he seems to be saying that it is always good to safeguard the status quo – the only danger is that when the status quo changes, the "ruling class" will lose their power. Which, obviously is the the great danger he would like to avert. It’s a call to the ruling class to wake up – leave the cocktail party a little early this weekend – and tend to the serious business of maintaining their authority.
I guess Howie thinks that being "establishment" is something assigned at birth, and if you’ve ever been less than filthy rich and world famous you can’t be part of the establishment.
"I’m not establishment, I went to a state school! Now, pardon me while I take a little swim in my money bin."
"could we get some alternatives to the Treasury plan"
Nationalize and re-regulate. We’ve been hearing them for months now from Krugman, among others. It isn’t like the alternatives haven’t been spelled out.