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Triumph of the Wrong

"Economically, Could Obama Be America's Best President?"

Paul Krugman
NOV. 6, 2014

The race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet midterms to men of understanding. Or as I put it on the eve .. http://www.nytimes.com/2010/09/03/opinion/03krugman.html .. of another Republican Party sweep, politics determines who has the power, not who has the truth. Still, it’s not often that a party that is so wrong about so much does as well as Republicans did on Tuesday.

I’ll talk in a bit about some of the reasons that may have happened. But it’s important, first, to point out that the midterm results are no reason to think better of the Republican position on major issues. I suspect that some pundits will shade their analysis to reflect the new balance of power — for example, by once again pretending that Representative Paul Ryan’s budget proposals are good-faith attempts to put America’s fiscal house in order, rather than exercises in deception and double-talk. [see Ludicrous and Cruel, below] But Republican policy proposals deserve more critical scrutiny, not less, now that the party has more ability to impose its agenda.

So now is a good time to remember just how wrong the new rulers of Congress have been about, well, everything.

First, there’s economic policy. According to conservative dogma, which denounces any regulation of the sacred pursuit of profit, the financial crisis of 2008 — brought on by runaway financial institutions — shouldn’t have been possible. But Republicans chose not to rethink their views even slightly. They invented an imaginary history .. http://www.ritholtz.com/blog/2011/11/examining-the-big-lie-how-the-facts-of-the-economic-crisis-stack-up/ .. in which the government was somehow responsible for the irresponsibility of private lenders, while fighting any and all policies that might limit the damage. In 2009, when an ailing economy desperately needed aid, John Boehner, soon to become the speaker of the House, declared: “It’s time for government to tighten their belts .. http://www.cbsnews.com/news/boehner-government-needs-to-tighten-its-belt/.”

So here we are, with years of experience to examine, and the lessons of that experience couldn’t be clearer. Predictions that deficit spending would lead to soaring interest rates, that easy money would lead to runaway inflation and debase the dollar, have been wrong again and again. Governments that did what Mr. Boehner urged .. http://krugman.blogs.nytimes.com/2014/11/06/spending-and-growth-2009-13/, slashing spending in the face of depressed economies, have presided over Depression-level economic slumps. And the attempts of Republican governors to prove that cutting taxes on the wealthy .. http://www.cbpp.org/cms/index.cfm?fa=view&id=4110 .. is a magic growth elixir have failed with flying colors.

In short, the story of conservative economics these past six years and more has been one of intellectual debacle — made worse by the striking inability of many on the right to admit error .. http://www.bloomberg.com/news/2014-10-02/fed-critics-say-10-letter-warning-inflation-still-right.html .. under any circumstances.

Then there’s health reform, where Republicans were very clear about what was supposed to happen .. http://www.nytimes.com/2014/09/01/opinion/paul-krugman-the-medicare-miracle.html: minimal enrollments, more people losing insurance than gaining it, soaring costs. Reality, so far, has begged to differ, delivering above-predicted sign-ups, a sharp drop in the number of Americans without health insurance, premiums well below expectations, and a sharp slowdown in overall health spending.

And we shouldn’t forget the most important wrongness of all, on climate change. As late as 2008, some Republicans were willing to admit that the problem is real, and even advocate serious policies to limit emissions — Senator John McCain proposed a cap-and-trade system similar to Democratic proposals .. http://www.nytimes.com/2008/05/13/us/politics/12cnd-mccain.html. But these days the party is dominated by climate denialists, and to some extent by conspiracy theorists who insist that the whole issue is a hoax concocted by a cabal of left-wing scientists. Now these people will be in a position to block action for years to come, quite possibly pushing us past the point of no return.

But if Republicans have been so completely wrong about everything, why did voters give them such a big victory?

Part of the answer is that leading Republicans managed to mask their true positions. Perhaps most notably, Senator Mitch McConnell, the incoming majority leader, managed to convey the completely false impression that Kentucky .. http://www.washingtonpost.com/blogs/fact-checker/wp/2014/10/16/mitch-mcconnells-puzzling-claims-on-insurance-in-kentucky-post-obamacare/ .. could retain its impressive gains in health coverage even if Obamacare were repealed.

But the biggest secret of the Republican triumph surely lies in the discovery that obstructionism bordering on sabotage is a winning political strategy. From Day 1 of the Obama administration, Mr. McConnell and his colleagues have done everything they could to undermine effective policy, in particular blocking every effort to do the obvious thing — boost infrastructure spending — in a time of low interest rates and high unemployment.

This was, it turned out, bad for America but good for Republicans. Most voters don’t know much about policy details, nor do they understand the legislative process. So all they saw was that the man in the White House wasn’t delivering prosperity — and they punished his party.

Will things change now that the G.O.P. can’t so easily evade responsibility? I guess we’ll find out.

http://www.nytimes.com/2014/11/07/opinion/paul-krugman-triumph-of-the-wrong.html

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Ludicrous and Cruel

By PAUL KRUGMAN
Published: April 7, 2011

Many commentators swooned earlier this week after House Republicans, led by the Budget Committee chairman, Paul Ryan, unveiled their budget proposals. They lavished praise on Mr. Ryan, asserting that his plan set a new standard of fiscal seriousness.

Well, they should have waited until people who know how to read budget numbers had a chance to study the proposal. For the G.O.P. plan turns out not to be serious at all. Instead, it’s simultaneously ridiculous and heartless.

How ridiculous is it? Let me count the ways — or rather a few of the ways, because there are more howlers in the plan than I can cover in one column.

First, Republicans have once again gone all in for voodoo economics — the claim, refuted by experience, that tax cuts pay for themselves.

Specifically, the Ryan proposal trumpets the results of an economic projection from the Heritage Foundation, which claims that the plan’s tax cuts would set off a gigantic boom. Indeed, the foundation initially predicted that the G.O.P. plan would bring the unemployment rate down to 2.8 percent — a number we haven’t achieved since the Korean War. After widespread jeering, the unemployment projection vanished from the Heritage Foundation’s Web site, but voodoo still permeates the rest of the analysis.

In particular, the original voodoo proposition — the claim that lower taxes mean higher revenue — is still very much there. The Heritage Foundation projection has large tax cuts actually increasing revenue by almost $600 billion over the next 10 years.

A more sober assessment from the nonpartisan Congressional Budget Office tells a different story. It finds that a large part of the supposed savings from spending cuts would go, not to reduce the deficit, but to pay for tax cuts. In fact, the budget office finds that over the next decade the plan would lead to bigger deficits and more debt than current law.

And about those spending cuts: leave health care on one side for a moment and focus on the rest of the proposal. It turns out that Mr. Ryan and his colleagues are assuming drastic cuts in nonhealth spending without explaining how that is supposed to happen.

How drastic? According to the budget office, which analyzed the plan using assumptions dictated by House Republicans, the proposal calls for spending on items other than Social Security, Medicare and Medicaid — but including defense — to fall from 12 percent of G.D.P. last year to 6 percent of G.D.P. in 2022, and just 3.5 percent of G.D.P. in the long run.

That last number is less than we currently spend on defense alone; it’s not much bigger than federal spending when Calvin Coolidge was president, and the United States, among other things, had only a tiny military establishment. How could such a drastic shrinking of government take place without crippling essential public functions? The plan doesn’t say.

And then there’s the much-ballyhooed proposal to abolish Medicare and replace it with vouchers that can be used to buy private health insurance.

The point here is that privatizing Medicare does nothing, in itself, to limit health-care costs. In fact, it almost surely raises them by adding a layer of middlemen. Yet the House plan assumes that we can cut health-care spending as a percentage of G.D.P. despite an aging population and rising health care costs.

The only way that can happen is if those vouchers are worth much less than the cost of health insurance. In fact, the Congressional Budget Office estimates that by 2030 the value of a voucher would cover only a third of the cost of a private insurance policy equivalent to Medicare as we know it. So the plan would deprive many and probably most seniors of adequate health care.

And that neither should nor will happen. Mr. Ryan and his colleagues can write down whatever numbers they like, but seniors vote. And when they find that their health-care vouchers are grossly inadequate, they’ll demand and get bigger vouchers — wiping out the plan’s supposed savings.

In short, this plan isn’t remotely serious; on the contrary, it’s ludicrous.

And it’s also cruel.

In the past, Mr. Ryan has talked a good game about taking care of those in need. But as the Center on Budget and Policy Priorities points out, of the $4 trillion in spending cuts he proposes over the next decade, two-thirds involve cutting programs that mainly serve low-income Americans. And by repealing last year’s health reform, without any replacement, the plan would also deprive an estimated 34 million nonelderly Americans of health insurance.

So the pundits who praised this proposal when it was released were punked. The G.O.P. budget plan isn’t a good-faith effort to put America’s fiscal house in order; it’s voodoo economics, with an extra dose of fantasy, and a large helping of mean-spiritedness.

http://www.nytimes.com/2011/04/08/opinion/08krugman.html