Thomas Frank: Paul Krugman's sloppy, wet kiss

Krugman's ode to Obama in Rolling Stone seems like the work of someone who hasn't read Krugman the last six years

Published October 19, 2014 11:00AM (EDT)

Paul Krugman, Barack Obama                                            (Reuters/Tim Shaffer/Jim Bourg/photo montage by Salon)
Paul Krugman, Barack Obama (Reuters/Tim Shaffer/Jim Bourg/photo montage by Salon)

Paul Krugman is easily the best newspaper columnist at work today; for years, he has been the only American columnist who matters. His relentless, one-man war on austerity, I believe, should have earned him a second Nobel Prize.

As Salon readers know, Krugman has for years been willing to criticize the Obama administration. However, in a much-discussed essay the economist published in Rolling Stone last week, he reverses himself and declares that Obama has won him over; that the president is “one of the most consequential and, yes, successful presidents in American history.”

What makes Krugman’s article peculiar is that he now derides as irresponsible “Obama-bashing” some of the very criticisms of the administration that he himself has made over the years. In 2010, for example, he strongly hinted that bankers had been engaged in “white-collar looting”; in Rolling Stone he laughs at people who complain that “Wall Street hasn’t been punished.” The Krugman of today also, amazingly, distances himself from certain misguided souls who are upset because “income inequality remains so high”; amazing because this is a subject on which Krugman has written for decades—indeed, just a few months ago he penned a scorcher against people who deny the mushrooming problem of inequality.

Krugman tells us that his regard for the president was late to bloom. I myself moved in the opposite direction. I liked Obama a lot in 2008; in fact, I even voted for him during his ill-fated run for Congress in 2000. I anticipated great things from his presidency, in part because he wasn’t connected in any obvious way with the Clinton administration. And I have been increasingly disappointed by his performance as the years passed.

Liberals like me favored, in general terms, each of the president’s main achievements—health care reform, the stimulus of 2009, and the Dodd-Frank financial reform act (which, among other things, established the Consumer Financial Protection Bureau). However, many of us also recognized that each of these was something of a half-measure—in part because we paid such close attention to Paul Krugman. On the stimulus, Krugman himself made the case for its inadequacy, many times over. Dodd-Frank was a step in the right direction but it clearly didn’t go far enough. Apart from the welcome launching of the CFPB, the law is extremely complex and its rules still aren’t completely written. As for Obamacare, people like me have high hopes that it might someday evolve into something closer to the program the public wanted and the program the public needs, but as of today it’s still just the individual mandate, and it’s got lots of setbacks (the problem of high deductibles, for example).

Krugman’s approach in Rolling Stone is to take a look at these things and announce that the glass is half full, rather than half empty as his previous observations led him to believe. Based on this new and more accurate reading, he pronounces Obama to have earned Mount Rushmore status.

I wish that were so. Like millions of others, I once had great hopes for the Obama presidency. In 2008 I thought the man had exactly the mental and emotional equipment to achieve presidential immortality. What’s more, I still hold Obama in high esteem, and sometimes I think he could yet make it into the pantheon, although the unhappy prospect of a completely Republican Congress is rapidly closing off that possibility.

So allow me to make the case for half empty. The criterion of presidential greatness is how well the man in the Oval Office addresses the big questions of the day. On one of them, the environment, Obama’s record is not too bad. But on the really momentous economic issues of our time—all of them brought into sharp, awful focus by the financial crisis of 2008—Obama’s response has ranged from merely competent to disastrous.

Take the problem of Wall Street: the meltdown, the recession and the bailouts. The disaster happened, of course, while the dreadful George W. Bush still occupied the White House, but the cleanup was left to Barack Obama. The way was open, with the application of a little presidential muscle, for a complete restructuring of this industry. But from the Department of the Treasury to the Department of Justice, all that Team Obama wanted to do was to “foam the runway,” get things back to normal for the good old banks.

Or take inequality. The world understands that it’s out of control, that the trends in this direction are sweeping our little bateau of state directly toward a roaring cataract called oligarchy. On this question, Krugman today applauds Obama for letting certain Bush tax cuts expire, but anyone with access to the Internet knows this isn’t even close to enough to reverse the drift toward plutocracy. There were other strategies available, however. Card check or some variation on it would have allowed unions to make a comeback and would thus have helped to bend the inequality curve. Restoring the estate tax would have helped, too. Not negotiating any more “free-trade” treaties might also have been wise. And, as my friend Bill Black wrote in his response to the Krugman article, “by discrediting the banks and bankers” through means of prosecuting a few of them, “the administration would have enormously increased the political space for real reforms on executive compensation,” meaning bonuses, a factor responsible both for the epidemic of fraud that brought on the financial crisis and the supersonic acceleration in upper-bracket income.

Let me put the Obama years into context like this: What the times called for was a second New Deal, for a wholesale makeover of the economic system. What Obama chose to deliver instead was a second round of '90s-style bipartisanship. As I have written before, the president looked out over a nation laid low by epic white-collar misbehavior and decided that what we needed was for politicians in Washington to get along with one another. To me this represented an almost inconceivable blunder, a category mistake even, but it was a misstep very much in keeping with the priorities of Washington, D.C.—with the prejudices of the centrist consensus types who populate this town and whom Paul Krugman used to glory in deriding.

So the crisis went to waste and our smart young president let an era of possibility slip through his fingers. The cost of missing this opportunity is impossible to measure.

In the meantime, this primary failure has allowed the long-running problem of the right to grow even worse. It is obviously true, as Krugman knows well, that many of our Republican brethren are today living in a land of ideological make-believe, where they imagine treason in high places and dream about conquest by secretive, malevolent foreigners. Indeed, I would go farther than Krugman here: This sort of nightmare culture, which was once a thing of dark corners and unusual minds, is rampant today. It was bad in the Clinton years, it got worse in the Bush administration, and now it’s everywhere.

“Nothing has changed on that front, and nothing will,” is how Krugman summarizes the Obamaphobes of the right in his Rolling Stone article. This is a common perception among liberals, but it isn’t exactly correct. In point of fact, the right as we know it was utterly prostrate in 2008; its signature ideas were completely discredited; its time was obviously up and prominent historians were writing its obituary. It wasn’t until a month or so into the Obama Administration that the master minds of the right hit upon a way to get the damn thing going all over again—ironically, by organizing around one of the worst conservative deeds of them all, Hank Paulson’s bank bailouts and Obama’s unfortunate-but-bipartisan embrace of same.

Looking back over the history of the Tea Party and also over the Republican campaign of complete intransigence in Congress, one is amazed by how quickly the right bounced back from the nadir of its disgrace—but one is even more surprised at how poorly Obama and Co. responded to the challenge. Did they really not see good old Republican obstructionism lurking during those long months of fruitless negotiation over Obamacare? Did they never give serious thought to some way of cross-pressuring or deflating the Tea Party upsurge? And why does it never seem to occur to the Democratic leadership that turning over economic policy to arrogant Wall Street revolving-door types—a.k.a., the experts—might stoke public outrage?

Obviously, Obama has been victim No. 1 of the resurgent right. But as the leader of the Democratic Party he was also supposed to find a way to beat these guys. Here, again, he once seemed like exactly the right man for the job.

Recall, in this connection, the public mood in 2007. A new Democratic Congress had just been seated, and in those waning days of the Bush Administration, the pollster Stanley Greenberg wrote in The American Prospect, “the world has watched the conservative revolution die an ugly and painfully slow death.” Ding, dong, the witch was dead! But there was bad news, too: Distrust for government still burned brightly in the minds of the public. One reason for this, according to a memo Greenberg’s consultancy issued that year, was a perceived lack of accountability in Washington; another was the perception that the government cared only for the views of the rich.

Even when cynicism of this sort is caused by Republican misbehavior—as it was in 2007—it is poison for liberalism, a philosophy which is attached inescapably to government. Let such toxins work for long enough and they will kill our movement. That’s why Stanley Greenberg pointed these things out and urged Democrats to take heed. Maybe that’s also why Barack Obama used to promise a war on lobbying and to bring “new ideas and new leadership” to Washington.

Well, the Wall Street bailouts basically blasted the concept of accountability to dust. Obama’s Justice Department made sure the public got the message: some people are simply Too Big to Jail. Those people also seem to have been too smart to confront. Just a few days ago, a departing member of Eric Holder’s team whined that they didn’t try to prosecute because those Wall Street guys are geniuses, masters of what he called “financial rocket science.”

And the problem of influence wielded by the wealthy and powerful? Lord have mercy. They own the place, as Dick Durbin once said of the U.S. Senate. Go down a list of Obama Administration officials and count for yourself how many came from (or left for) a job in investment banking.

What are the numbers on public cynicism today? Well, thanks to a big assist from the shutdown-crazed lunatics in the House of Representatives, public trust in government is lower today than it has been since they started keeping records. For the executive branch specifically, the numbers are comparable to those of the final years of the Bush administration. And the inevitable consequence appears to be headed our way next month.

Why is this important? Aside from the obvious and direct reason—that Obama was supposed to restore public faith in government and achieved the opposite—we need to reconsider the role the mighty righties play in the liberal imagination. If we want to believe that Obama has been a consequential and a great president, then the only way to explain his many failings is as a function of his right-wing opposition. He didn’t get the king-sized stimulus we needed, liberals often say, because the right wouldn’t give it to him. He didn’t break up the banks or prosecute the banksters because the Tea Party wouldn’t let him. He didn’t get single payer or the public option because Republicans wouldn’t go along with that. Ditto for card check, antitrust enforcement, cramdown, renegotiating NAFTA, and the rest of the items on the long, doleful list of liberal priorities.

However, anyone who has followed the news for the last five years knows there is another factor to be taken into consideration here: Obama didn’t do these things because he or his advisors didn’t want to do them. Oh, there were ways to get many of them done, especially in 2009 and 2010, when the world was at Obama’s feet, begging for action. (The only possible obstacle in those days was the filibuster power of Senate Republicans, which should have been—and eventually partially was—taken away.) But the Democrats’ heart wasn’t in it. They didn’t even try.

In this connection, allow me to quote Paul Krugman himself, in his column for July 18, 2010, on the matter of the then-looming Tea Party triumph: “The best way for Mr. Obama to have avoided an electoral setback this fall would have been enacting a stimulus that matched the scale of the economic crisis. Obviously, he didn’t do that. Maybe he couldn’t have passed an adequate-sized plan, but the fact is that he didn’t even try.”

And that, folks, leads us to the greatest disappointment of them all: This administration’s utter failure of imagination. I admit that this beef might be peculiar to me, since one of the reasons I was once so psyched to see Barack Obama in the White House is because I thought he was a man who respected learning, intelligence, new ideas. Maybe he still does, in his private life. But as president, he couldn’t seem to see what is obvious to everyone who is not a regular golfer at Congressional: That ignoring the conventional and facing down the Republicans and doing the right thing—on the stimulus, on the banks, on inequality—would also have made him enormously popular, not to mention consequential and successful. It might even have spared him the electoral comeuppance he received in 2010, and whose second installment he seems likely to take delivery on just a few weeks from now.

By Thomas Frank

Thomas Frank is a Salon politics and culture columnist. His many books include "What's The Matter With Kansas," "Pity the Billionaire" and "One Market Under God." He is the founding editor of The Baffler magazine.

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