Political Animal


January 12, 2013 10:42 AM Paul Krugman Explains Why He Really Didn’t Want That Treasury Job, Anyway

By Adele Stan

In a fascinating and sprawling interview with Bill Moyers, airing this weekend on the PBS show, Moyers & Company, New York Times columnist and Nobel laureate Paul Krugman explained why he didn’t want to be nominated to the post of Treasury secretary, even after 235,000 people signed an online petition urging the president to appoint him, and offers his take on Jack Lew, the president’s nominee:

PAUL KRUGMAN: …I probably have more influence…, doing what I do now, than I would if I were inside trying to, you know, do the court power games that come with any White House — even the best — which I don’t think I’d be any good at. So no, this is fine. And what the president needs right now is he needs a hardnosed negotiator. And rumor has it that’s what he’s got, so.
PAUL KRUGMAN: That’s right. The president can’t pass major new legislation. He can’t formulate major new programs right now. What he has to do now is bargain down or ride over these crazy people in the Republican Party. And we what we need now is not deep thinking from the treasury secretary. If the president wants deep thinkers, he can call Joe Stiglitz, he can call other people. What he needs from the Treasury secretary is somebody who’s going to be very effective at dealing with these wild men and making sure that nothing terrible happens.

But that’s not the most interesting part of the interview. Believe it or not, where it gets really fascinating is in Moyers’ discussion with Krugman on the difference between a recession and a depression. (As the title of Krugman’s new book, End This Depression Now!, he thinks what we’re in is the latter.)

While he concedes that the current depression, as he sees it, is not as horrific as the Great Depression of the 1930s, Krugman asserts that it’s likely worse than we perceive, because things that once made a depression obvious to all — breadlines, “will work for food” signs and the like — have take new forms in the the electronic age, and at a time when some public welfare, however meager, is available, and all acting in concert to hide widespread suffering from view:

KRUGMAN: Somebody said that food stamps are the soup kitchens of the modern depression. That there’re a lot of people who would be standing in line to get that soup, who are instead, and it’s a good thing, who are instead getting — I guess it’s now called SNAP, Supplementary Nutritional Assistance Program — but who are getting those debit cards, and are getting essential food stuffs. And they’re at the grocery store and they look like anybody else. But the fact of the matter is they are still as desperate, they’re getting by day to day with the aid of a trickle of government aid, just like the people who were standing in line at the soup kitchens in the ’30s, but they’re not visible. They, we don’t have guys selling apples in street corners partly because, you know, the city licensing wouldn’t allow that anymore.

I totally buy that. I know lots of people of all generations who consider themselves middle-class, but are living hand to mouth. The young people working marginal jobs with no prospects and an unimaginable pile of college debt. The middle-aged people short-selling homes that were theirs for years. The old people who never earned enough to invest in mutual funds.

I know them. Don’t you?


  • Rick B on January 12, 2013 11:49 AM:

    Good post, Adele. A point on Krugman's insight and a discussion of some of the differences between the Depression in 30's and today.

    Krugman seems to be one of the few in the media who have a clue regarding what has been happening to America since the Bush administration. Krugman really understands the problems of the government and the skills needed for the Treasury Secretary job, too. He also understands that those skills are not what he has.

    Depression? There are no apple-sellers because Americans travel by car instead of walking in the city streets where they were a market for apple-sellers. The automobile has totally changed society. One change is that markets - even for panhandlers and apple-sellers - all require parking spaces. My local CVS runs the panhandlers off from their parking lot quite frequently.

    And SNAP works because it supports some of the grocery stores in poor neighborhoods. If a neighborhood gets so poor that everyone is on SNAP then the grocery stores pull out, leaving a food desert. The convenience stores then sell bread, beer and canned goods to the residents without cars. Bread and canned goods are bought with SNAP at sky-high markups. Without SNAP there would be a lot more food deserts. (Food desert - no supermarket within a mile.) The absence of public transportation makes this worse.

    In the 30's people who had local family and support groups and could find casual labor stayed in the cities. Most of the rest went back to the family farm. The family farm is now gone.

    SNAP is something of a replacement of the family on the farm as a substitute for work that supports life in the city. But critically, SNAP supports supermarkets where they could not otherwise exist. That's why it is administered by the Department of Agriculture, not HHS like welfare. SNAP is first and foremost welfare to food distributors. It keeps the food distribution infrastructure in existence

    SNAP is critical infrastructure to modern large urban societies for people who no longer have rural families they can depend on.

  • bleh on January 12, 2013 12:18 PM:

    Not to get all fanboi here, but I don't think the rather snarky headline is justified. Krugman was saying the same thing on his blog at least a week ago, even before Lew's nomination was effectively a done deal (at least outside the WH). I don't really think there's any "sour grapes" to it.

    And frankly, who can blame him? Tenured Ivy League professor with NY Times gig vs. cabinet Secretary? I know which one I'd take...

  • MB on January 12, 2013 12:31 PM:

    >I probably have more influence

    I'm sorry to say, it is hard to have less influence than none. He is a pariah -- always right and not willing to shy from saying so in the face of those always wrong.

  • Adele Stan on January 12, 2013 12:52 PM:

    C'mon now, bleh, lighten up. I really doubt that Krugman himself would be offended by that headline.

  • c u n d gulag on January 12, 2013 12:56 PM:

    Well, I didn't want to date Halle Berry either...

    Which is a good thing, since I'd have had as much chance of getting a date with her, as Krugman had of being Treasury Secretary.

    My Mother and I get SNAP.
    I've been unemployed for almost 3 years, and she's almost 81.
    We get a whopping $16 a month for the BOTH of us, because she still has this house.
    I'm not complaining - it's milk and eggs for most of a month, and we're in a lot better shape than a lot of other Americans. At least we have the house. For how much longer, is up in the air...

  • Adele Stan on January 12, 2013 12:56 PM:

    Great point, Rick B! I'd never thought of it that way, but makes perfect sense as you explain it. I've lived in food desert areas, and it's hard to explain to others just how disruptive it is to all aspects of life -- including mental health.

    So, what you're saying, then, is that SNAP is more than a benefit to the needy; it's a boon to business. What's not to like? (The Tea Partiers will think of something.)

  • rrk1 on January 12, 2013 1:03 PM:

    Krugman is smart enough to avoid, and is wary of sacrificing his integrity, to become a court politician. No president wants a truly independent thinker willing to speak truth to power. Besides Obama is a closet Republican, and Krugman most definitely is not. Lew will cater to the banks and other financial interests, as did Geithner. Krugman, and Robert Reich, wouldn't be enchanted by Wall Street so that also eliminates them from any insider role.

    Obama is smart, but he's no liberal, and we should stop pretending he is.

  • troglodyte on January 12, 2013 1:31 PM:

    In my region there have been men standing on selected street corners and freeway offramps carrying signs "Will work for food" for years. Nothing matching the old photos of the Great Depression, to be sure, in which crowds of men would be standing on corners. Nearly always single males, in simple clean clothes. I have talked with several 20-something who piece together small contracting jobs to survive until they can rejoin an expanding economy.

    I have shopped at a grocery with largely a SNAP clientele. The displays and service are spartan, but the produce is good and cheap. So it is possible to water the food desert. Kudos to Rick B for describing it well in the first post.

  • square1 on January 12, 2013 2:09 PM:

    The dirty secret of the Democratic Party is that they effectively have no response to the current economic crisis.

    Sure, in a dysfunctional, two-party system the Democrats can always point to the other guys and say "they would be worse." And that is true. The Republicans are worse. They would take the current depression and make it worse, if they had their way. But what the Democrats can't do is make the current crisis better.

    Since 2008, there are virtually no major economic policies that Democrats, on the national level and led by Obama, can point to and say "we were in favor of X, had we passed X the economy would be much better, and the Republicans stopped us from passing X."

    In early 2009, the White House passed a stimulus package that was virtually identical in size to what they asked for -- and before people say that it was the most that Obama could have passed, I would remind people that his team settled on their preferred figure prior to his inauguration and before there were any negotiations with the new Congress. It is impossible to say that a larger package couldn't have been passed.

    From early 2009 through the fall of 2011, the White House not only made no mention of more stimulus, but actively sought to cut government spending and unilaterally instituted federal wage freezes.

    Finally, realizing that with unemployment still hovering close to 10% (with real unemployment even higher), Obama's team proposed a new jobs package. After initially, refusing to pass it a la carte, Obama immediately caved, passed part of his proposal in a deal with the GOP and then let the rest of his jobs proposals fade from the news cycles, at which time Obama went back into deficit-reduction/Grand Bargain mode.

    In short, it is very difficult to look back on the past 4 years and point to any substantive economic policies that Obama would have implemented had Republicans not been obstructionist.

    There are two ways to interpret this. One is that Obama is basically a non-crazy Republican in the mold of George H.W. Bush or Bob Dole. That, when given the choice, Obama picks people like Geithner, Bernanke, Lew, Orszag, Immeldt, Simpson and Bowles because...Obama largely agrees with those guys (with an emphasis on guys).

    And the possibility is that Obama secretly harbors far more liberal policy preferences but is too gutless -- for lack of a better word -- to even express a theoretical preference for more stimulative economic policies. I disagree with this view, but if true, I would have even less respect for Obama than I currently do.

  • Rick B on January 12, 2013 9:25 PM:

    Adele, the food aid to the hungry was originally a direct distribution of "surplus" food which the federal government purchased to keep the price of the agricultural products up. Most famously it was the surplus butter that was bought by the feds to keep butter prices up and support the dairy farmers. This was true into the 1960's.

    The county social workers were known to hand out butter, cheese, and turkeys among other food items. The thing is, it was a rather limited program and it did not use the existing food distribution infrastructure.

    Then the food distribution companies convinced Congress to create the food stamps program. It utilized (and subsidized) the commercial food distribution channels that already existed to supply supermarkets.

    Food stamps were a lot more efficient than distributing surplus food stocks which had been bought to support food prices and keep the farmers and dairy farms in business. They still are.

    If you want to bankrupt a number of supermarkets, just cut out the SNAP program. You'll also get a sizable number of convenience stores and gas service stations who provide bread, eggs, and convenience food which is not prepared on site.

  • John Robert BEHRMAN on January 12, 2013 9:56 PM:

    With all due respect to squre1, ...

    He is correct that "the dirty secret of the Democratic Party is that they effectively have no response to the current economic crisis."

    But, then he (or she) goes on to declaim that President Obama is either (a) a non-crazy Republican or (b)secretly harbors far more liberal policy preferences but is too gutless to even express a theoretical preference for more stimulative economic policies.

    The President is working within the US constitution to make sure that a Democratic President can be C-in-C without the the support of elements in the GOP who think they own "national security" because, well, they do own a lot. The fate of Democratic Presidents since 1948 suggests to me that it will be hard to become and remain the first and only "Lincoln Democrat".

    So, it hardly matters what theoretical preference this President might have for more stimulative economic policies. We have profound problems of international, national, and municipal finance. Both Congressional parties are utterly complicit in these. The best this President can do is marginalize the GOP and try to minimize the profound corruption and indisicpline of Congressional Democrats, relative to the corrupt, indisciplined, but also actually crazy Republicans.

    Almost all legislation is passed by unanimous consent and is written and paid for by lobbies. Even bills passing by a "bi-partisan majority" like the "Fiscal Cliff Deal" are complex bargains in which self-serving individual members from both parties sell their vote for particular considerations in and out of the bill in question. That is how it goes when there is simply no parliamentary discipline or, in the Senate, majority rule.

    As an actual party official I regret my party's many failings. But, I work every day to overcome them and so, too, does this President. I have no problem with being critical of the party or the President. But, I wish other critics were better informed and constructively engaged.

  • Fritz Strand on January 13, 2013 9:01 AM:

    I don't blame Krugman for not wanting to work in a (closet) Republican administration.

    Lew a tough negotiator? Yeah, but he is sitting on Wall Street's side of the table negotiating for them against everyone else. The public gets to chose between lunatics or money grubbing sociopaths.

  • Anonymous on January 13, 2013 10:34 PM:

    square one, JRB is right on, we are ruled by lackeys of the monied class. There is no longer a party that represents the People of this country, only the two twin parties that lick the boots of the lords of wallstreet. Obamster acts like a rethuglican because he does not want to get shot like Martin and John and Bobby + [Wellstone]. See a trend there?