Replies to post #10004 on Nothing But Politics

[Rick Faurot]

WASHINGTON (Dow Jones)--U.S. employers hired workers at the slowest pace in eight months in July, contradicting the assertions of U.S. economic policymakers that the job market is improving and adding to fears the the economic recovery may be fizzling.

Non-farm business payrolls grew by a net 32,000 last month, the smallest increase since December, the Labor Department said Friday. The department also said employers created 61,000 fewer more jobs in May and June than was first estimated.

[Chris McConnel]

U.S. July job growth slows to 32,000


Tax cuts for the rich are sure working swell.

[Rick Faurot]

Paul Krugman, Witness to the Great Unraveling of America
A BUZZFLASH INTERVIEW

This is our second interview with the only journalist in America who doesn't appear to need an eyeglass prescription (see also "Paul Krugman, New York Times Columnist and Author of The Great Unraveling: Losing Our Way in the New Century"). Next to him, the self-infatuated television pundits and many news columnists appear to be wandering around with a highly distorted vision of America under Bush. But Krugman, almost alone among them, sees that the emperor is wearing no clothes.

Krugman would be the last to lay claim to any heroic insight into the radical, incompetent Bush administration. In fact, he is constantly amazed that others don't see through the impostors in the White House.

Coming upon a Krugman column in The New York Times reassures us that there are some sane people out there in the mainstream media who deviate from the Kafkaesque enabling of the dangerous ship of fools currently at the helm of America. Maybe it helps that Krugman is not a journalist by training. He's an economics professor at Princeton, which allows him to be so lucid in his analysis. Maybe it's because he doesn't rely on the White House to spoon feed him information, which is how to best describe the Washington press corps. Maybe he's not reliant on the corporate media to support him, since he always has his "day job" as an academic.

All we know is that Krugman sees the light, while so many others stumble around in a befuddled state of confusion. America is well-served by his courageous columns at a time when a person who tells the truth is looked upon with much suspicion.

Krugman's bestselling collection of columns, The Great Unraveling, has just been released in an expanded paperback edition.

* * *

BuzzFlash: In the preface to the hardcover edition of The Great Unraveling: Losing our Way in the New Century, you make ironic use of Henry Kissinger’s Ph.D. thesis at Harvard as a way to understand the radicalism of the Bush Administration. Could you explain that a bit more?

Paul Krugman: Well, it’s really good for explaining how reasonable people can’t bring themselves to see that they’re actually facing a threat from a radical movement. Kissinger talked about the time of the French Revolution, and pretty obviously he also was thinking about the 1930s. He argued that, when you have a revolutionary power, somebody who really wants to tear apart the system -- doesn’t believe in any of the rules -- reasonable people who’ve been accustomed to stability just say, "Oh, you know, they may say that, but they don’t really mean it." And, "This is just tactical, and let’s not get too excited." Anyone who claims that these guys really are as radical as their own statements suggest is, you know, "shrill." Kissinger suggests they'd be considered alarmists. And those who say, “Don’t worry. It’s not a big deal,”are considered sane and reasonable.

Well, that’s exactly what’s been happening. For four years now, some of us have been saying, whether or not you think they’re bad guys, they’re certainly radical. They don’t play by the rules. You can’t take anything that you’ve regarded as normal from previous U.S. political experience as applying to Bush and the people around him. They will say things and do things that would not previously have made any sense -- you know, would have been previously considered out of bounds. And for all of that period, the critics have been told: "Oh, you know, you’re overreacting, and there’s something wrong with you."

We just saw it with the increased level of terror alerts. Among those of us who had made a judgment about what kind of people we’re dealing with, the reaction was, this timing was awfully convenient. After all, they’ve done this sort of thing before. Of course, this was criticized as completely unreasonable to say -- after all, this time we’ve got "specifics." But here we are with this morning’s headlines: Oh, it’s all three-year-old information.

BuzzFlash: Headlines in mostly The Washington Post and The New York Times revealed the information predated 9/11.

Paul Krugman: Right.

BuzzFlash: There was an article, as you know, in The New Republic, which said the Bush Administration had put pressure on the Pakistani government to come up with a "high-profile al Qaeda target" in the last two weeks of July, and preferably during the Democratic Convention. That article was met with a lot of skepticism, although it was quite detailed and written by three people for a prestigious publication. And indeed, what has happened is it has been announced that a high-target al Qaeda individual was arrested by the Pakistanis. He had actually been arrested the Saturday before the Democratic Convention, but it was only announced, I believe, on Wednesday or Thursday.

Paul Krugman: It was Thursday, a few hours before Kerry’s speech.

BuzzFlash: So exactly what had been foretold, but dismissed by some as a conspiratorial theory, was proven to be true. On top of that,it was three-year-old information, the pre-9/11 information, that was the primary basis, even the Administration admits, for the so-called specific terror alerts. (They said "specific," even though the information was more than three years old.) The information came from the computer of this high-target al Qaeda figure who was captured by the Pakistanis at the request of the Bush Administration, basically, to drown out the message of the Democratic Convention.

Paul Krugman: Well, you know, just about a year ago, in one of the new columns in my book, I said that the stakes are very high for the Bushies, because we all know that there are terrible suppressed scandals. And that was before we even had any hint about Abu Ghraib. They will do anything to win. You have to expect that it’s going to be the dirtiest campaign in American history, and so it’s proving. We probably ain’t seen nothing yet. Over and over again, the people who made a judgment about the motives of the Administration, and assessed the facts on the basis of that judgment, have proved again and again to be getting it right in interpreting the latest story. People who keep on clinging to the belief that these are reasonable people who behave like a conventional government have been snookered.

BuzzFlash: I want to talk about the media a bit. You’ve had some recent columns on the media, including one that caused a bit of a dust-up with CBS. But do you think the two articles that appeared in The New York Times and Washington Post regarding the terrorist information being three years old are, for lack of a better word, a sign of progress in the media?

Paul Krugman: Yes. Something has happened, although I’m not entirely sure how much it’s the media and how much it's the intelligence professionals who were responsible.

BuzzFlash: Yes, one newspaper cited 12 different intelligence sources that anonymously said this was dated information.

Paul Krugman: I think maybe a year ago, the Times and the Post wouldn’t even have published this, despite that. No, between the dismay of the public and professionals and the fact that the media are wising up a little bit, there’s progress. But, boy, take a look at what happened when Howard Dean said something completely reasonable on Sunday. He was totally trashed for questioning the timing of Ridge's announcement. But there’s complete vindication for what he said. And let’s see if we have any apologies from cable news.

BuzzFlash: Well, and he also had said, before, that we’re not any safer since Saddam was captured. He got trashed for that, and it took a reporter from Irish television to bring it to the attention of Bush -- that indeed we have had more terrorist attacks since 9/11 than before. American reporters scoffed at Dean, and yet an Irish reporter was the only one to confront Bush with this information -- which is factual.

Paul Krugman: Yes.

BuzzFlash: Let me ask you about the media. Today you have a column about the Democratic Convention coverage, or lack thereof. And you got in a tussle with CBS because you accused them of not really...

Paul Krugman: I just talked about the thinness of coverage of issues. I said there had been no account on major TV networks that I could find that gave an adequate account of Kerry’s health care plan, which is his principal, his core domestic proposal. And CBS -- I think that was one guy acting on his own, actually -- he just...

BuzzFlash: He was a producer?

Paul Krugman: Yes. He went into this weird thing misrepresenting what I said in the column, framing that I had said there had never been any issue coverage, which I didn’t say. And it was really one of those things where the words were all in capital letters and so on. And of course, it wasn’t what I said.

CBS actually is the best, if you take a look at the coverage. CBS is the best, but it’s still pretty pathetic. I have looked at their report on the competing health care plans, and I don’t think there’s any way that a viewer who didn’t come into that with a lot of knowledge could have figured out what Kerry is proposing, how it differs from Bush. And they would have come out with one definitely false impression, which was that Kerry’s plan was unfunded, because the report quoted Bush saying it’ll break the bank, and didn’t explain that Kerry has a plan to pay for it by rolling back some of the tax cuts.

BuzzFlash: I want to ask a couple specific questions about the media. Let’s put aside certain conspiratorial theories like you read on sites like ours, that there’s a corporate media, and that reporters know they have to report within a narrow frame because it’s much safer if they’re not too hard on the Bush Administration. Let’s put that theory aside for a second. Let’s just ask about the technology of television.

Is there something about the television medium, beyond the bias that a network may have, or an individual reporter, to kind of go with the Administration and be tough on the Democrats? Is it a bias in the modern technology that you’ve just got these news cycles? Basically on television, what you get is just surfing the headlines -- the technology is such that you just get news nuggets. You don’t get paragraphs. You get one-sentence headlines, and you kind of surf those. And even on CBS, for instance, a long report there is two minutes or two-and-a-half minutes. What can you really explain about Kerry’s health care policy in two minutes?

Paul Krugman: I’m not going to let them off that easy. Actually, there were a lot of little details in their story, but they weren’t the ones that you needed to know. There was no reason why they had to say Bush says it will break the bank. Why wasn’t there the follow-up sentence: "...but Kerry says he can pay for it by rolling back tax cuts for people making more than $200,000 a year." They didn’t include that following clause.

BuzzFlash: Why, do you think?

Paul Krugman: I think it was more sloppiness than anything else, but there’s a bias in the sloppiness. Reporters and producers know very well that if they do anything that can be construed as an unfavorable misrepresentation of Republican positions, there will be hell to pay, while misrepresenting what Democrats say is cost-free. Historically, there has been no punishment. Specific examples are not all necessarily cases of deliberate slanting of the news, but they sometimes are. For the most part, it’s simply asymmetric threats -- it’s safe to be snarky about Democrats, but to play it safe, you have to be extremely respectful towards Republicans.

BuzzFlash: Professionally, you’re an academic who studies the economy, a mystery to most of the world. Certainly, among economists, there is a wide-range of viewpoints -- from the Milton Friedman school to the Galbraith school and so forth. It’s as open-ended in viewpoints as political outlook.

Paul Krugman: No, it isn’t really. The spread of ideas is exaggerated.

BuzzFlash: Then let’s just say it’s a complicated field. Can television, which is what codes information to most Americans today -- can those short cycles possibly explain academic theory and what’s happening with economics?

Paul Krugman: Well, some things are going to be hard, but some things are not. Again, take a look and you see misrepresentation of things where it’s not necessary. For example, during the 2000 campaign, when Bush was touting the Social Security privatization, he was saying, you know, you can get 4% by putting your money in bonds, and you only get 2% in Social Security. That's a totally bogus comparison, because Social Security has got to pay for the current retirees.

Well, I would have thought that TV could try to explain that fact. But I saw a couple of news shows that actually had graphics -- you know, bar charts -- of return on Social Security versus return on a bond -- 2% versus 4%. They were actively aiding this garbage comparison. That was not a case of the subject being too complicated. This was active -- they thought that people could understand a bar chart, but they chose to use their bar chart to support a bogus right-wing position.

BuzzFlash: Moving on to another issue, you have in your book a quotation from Tom DeLay from a speech at the National Press Club -- and he’s been quite open about this -- that his role is to insure that his Biblical world view is reflected in the United States government. That was the reason he went after Clinton, because Clinton was, in essence, an infidel. He wasn’t a follower of DeLay’s Christian world view. You also quote DeLay, and then paraphrase him again, that it’s our duty in a war to reduce taxes. How does this sort of economic policy fit in with his Biblical world view? Where does that come from in the Bible?

Paul Krugman: Well, I don’t know if you can say. The fundamental fact of American politics -- and I’ve sharpened my view on this since last year and the hardcover edition of the book -- is that we’ve got an alliance between the religious right and the accumulators of great wealth. Those are the people who are running things. And then the question would be, how is it that these things go together so well? What happened to the streak in Christianity that is reveling and populist? Why has that been completely eliminated? George Lakoff has written about a conservative world view that you can kind of make sense of. It doesn’t work by the numbers, but it does work, sort of, emotionally. There's a focus on self-reliance, and therefore letting the wealthy get wealthier, with this world view.

But I think a lot of it is a marriage of convenience. The corporate insiders and the figures of the religious right have found each other mutually useful. The thing about the religious right is that it’s actually relatively centralized. There are people who can take their flock where they want to go. And they have, in effect, made a deal with the people with multi-million-dollar incomes. "I’ll scratch your back, you scratch mine." If this coalition gets the kind of lock on power that it wants, the next phase is the struggle between those two sides. As for Tom DeLay, he is a fanatically religious person because that’s who he is, and he’s a fanatical supporter of the interests of the money, because that’s where the money is -- the money and the political support.

BuzzFlash: You had written one or two columns on the Thursday leak. We saw that, in between parts of the Democratic Convention coverage, the Bush Administration just sort of dropped on a Friday afternoon that we had a record deficit. Then Bush went campaigning in the Midwest saying we’re "turning the corner" on the economy. What’s going on here?

Paul Krugman: They just believe -- correctly -- that people don’t know their history. It really does sound like Herbert Hoover, "Prosperity is around the corner." And now Bush is saying we’re turning the corner.

Actually the deficit story is even funnier because there is a little shadow play that went on, which people who were following these things closely caught six months ago. One of the things they’re saying is, well, look, you know, six months ago, we were projecting a deficit of $520 billion, and now it’s only 440. And you see things are improving because of the booming economy. But when they issued that 520 forecast back in February, that was way above anyone else’s projection. Wall Street columnists were saying, you know, it looks like about 450 to us. And the good people at the Center on Budget Policy Priorities, which is my favorite fiscal think tank, said flatly this is a scam. They are deliberately issuing a wildly high projection so that when the actual numbers come in, even though they’re worse than the year before, they can claim things are improving. So there they go. The CBPP caught this budget thing, they told us what was going to happen, and it played out exactly the way they said it would.

BuzzFlash: Well, the Bush Administration and Karl Rove have been masterful at playing this expectations game in a variety of venues. They did that with Bush in 2000 by saying, oh, he’s going to be horrible and terrible, and don’t expect much. Then if he performed anything above that, they said, oh, God, you see, he’s really quite something.

Paul Krugman: Quite so. But the economy has gone from wild to “eh.”After one quarter of high growth, summer of last year, it settled down to an ordinary pace, and then to actually less than ordinary lately. It was only 2% in the second quarter. And job growth is barely ahead of population growth. But their plan now is to just keep on saying how wonderful the economy is, and to keep people confused through November.

BuzzFlash: Well, one of their credos, and Rove has said this, is if you say a lie five times, it becomes the truth.

Paul Krugman: Yes.

BuzzFlash: I guess the people who are jobless in Ohio don’t necessarily agree with that. We’ll probably see in November. But what does the term "jobless recovery" mean in terms of the new economy?

Paul Krugman: Well, I wonder if this is starting to become a pattern? The Bush I recession was followed by a long stretch of pretty poor job performance, although actually a lot better than we’ve seen with the Bush II recession. And this time now, here we are more than two-and-a-half years after the official end of the recession, and we’re still well below, of course, pre-Bush employment.

But more to the point, we’re well below any reasonable projection of how many jobs the economy should have generated by now. It’s pretty miserable. My favorite response now, when people ask, "Well, aren’t we doing well? What about those 1.5 million jobs since last August?" is to say, well, look at the 2002 economic report of the President, which is Bush’s own forecast -- issued after 9/11, after their recession,so you can’t claim that there was bad stuff no one could have anticipated. It said that you would have 138 million payroll jobs by now. And what we actually have is about 131 million. So we’re really in pretty bad shape. That’s a testament to ineffectual policies.

BuzzFlash: Is it true that it’s the worst job crash and performance since Herbert Hoover?

Paul Krugman: Yes, by a large margin.

BuzzFlash: In the introduction to the new paperback edition, and also in one of the 29 new columns included in this expanded edition, you refer to how the budget proposed by the White House included photos for the first time -- in fact, 27 photos -- of our "Commander in Chief." It’s almost like we’re creating a cult like the old Soviet-style cult of having the picture of the leader everywhere, even in what used to be the black-and-white Congressional budget.

Paul Krugman: It scares me sometimes how blind people are. I first started talking about the Bush cult of personality early last year, although it was sort of obvious even before that. And I got slammed for that. What are you talking about? You are crazy, descending into madness, I think somebody wrote. And then, just a few months later, we had Operation Flight Suit, which was beyond anything even I thought they would try to do.

BuzzFlash: You call it a Lenni Riefenstahl moment.

Paul Krugman: Actually, some elderly central European refugee friends said that, in terms of the staging. It is something Bush's team regrets now. But they certainly did try to exploit that staging. And it was deeply un-American. What we thought was the American way of doing stuff, which was the exaltation of the office, not the man, and the exaltation of civilian authority over military, these people don’t believe any of that.

BuzzFlash: We have a radical regime that has Biblical world-view ideologues, as you’ve termed them -- although Tom DeLay is not officially part of the Administration, he’s de facto, since he does their bidding in Congress...

Paul Krugman: He’s the most powerful man in America after Dick Cheney.

BuzzFlash: ...and we have the plutocrats, who probably can be represented by Dick Cheney, who is more of a money guy than a Biblical world-view guy. So you’ve got ideologues of different bents. The neo-cons have the foreign policy radicalism, of which Dick Cheney is a part. And they seem impervious to facts. Facts come up to contradict their ideological assumptions, and they continue to proceed with the ideological assumptions, just adapting their excuses. But let’s say Bush were reelected. Doesn’t this have to hit the wall at some point?

Paul Krugman: Yes. You could say that we’ve hit a number of walls already. The thing is the United States is a huge, wealthy, extremely powerful country, which means that you can screw up very badly, and the consequences take awhile before they become obvious.

If we weren’t America, those budget deficits would already have led to a financial crisis. But, you know, the markets say: Well, it’s America. They’ll get their act together. And so we, the people, are still lending money. If we weren’t the world loan superpower, the ongoing disaster in Iraq would have been catastrophic already. The army is coming apart at the seams -- but slowly. This group of people have had the good luck, or maybe the bad luck in the longer run, to seize control of an institution that is capable of taking a lot of punishment before it really disintegrates.

If you think about how far down we’ve come in this short time, it’s actually pretty amazing. But I don’t know what happens if they manage to hold on, one way or another, in November. So far, every real-world thing they turned their hands to, every real-world issue, as opposed to politics, has turned to crud. Afghanistan’s a mess. Iraq’s a mess. The economy’s a mess. The budget’s a mess. Homeland Security is a mess. Four more years of this, and I don’t know. It’s going to be a pretty grim prospect.

BuzzFlash: Is it in the nature of the ideologue or the radical that, when you encounter something that contradicts your assumption, you don’t change your assumption. You just continue rolling along and change your rationale for the assumption?

Paul Krugman: It certainly seems to be true in this case. We don’t have a lot of experience with this sort of thing in this country. We never before had an administration with as much freedom to act as this one has managed to achieve, or one that’s been quite so closed-minded. You know, Nixon was a "bad guy," but, what he did was actually quite pragmatic in actual policies.

This is something completely new. We don’t have a lot of experience with it. But it is amazing, if you look at some of the ways they are willing to change policy, not in fundamental ways, but in ways that help them politically. If you read closely the reporting from Iraq, what’s pretty clear is that our army has been told to basically cede control of large swaths of the country to the insurgents in order to hold the casualty figures down until November. I guess you could call that pragmatic, although what happens afterwards, I don’t know. It was pretty clear that Bush’s initial decision was to send the troops in and level Fallujah. But after that didn’t work out too well, the next reaction was, okay, let’s just try and keep the troops on their bases, and see if we can taper this off until the election.

BuzzFlash: Paul Krugman, thank you so much, and good luck with the book. You are a great asset to this nation as far as journalism is concerned and economic analysis. Continue being as perspicacious as you have been.

Paul Krugman: Thanks a lot.

A BUZZFLASH INTERVIEW

http://www.buzzflash.com/interviews/04/08/int04041.html