Krugman's TV Blitz: 100% Debt OK, Paul Ryan's Budget Is 'Nonsense,' Wall Street Guys 'Destroyed the World'
New York Times columnist Paul Krugman is doing a television tour for his book "End This Depression Now!" Charlie Rose interviewed him twice, once on CBS This Morning Monday, then that night for the full hour of Rose's PBS talk show. Krugman appeared on Bloomberg TV Tuesday debating Ron Paul, and the friendlier confines of MSNBC's Rachel Maddow show that night.
Krugman's economic recovery plan, no surprise, involves lots of government jobs, a smear of Rep. Paul Ryan's budget, and a cavalier attitude toward America's massive debt load: "Britain had debt that was well over 100% of for most of the 20th century. It's not a crisis level problem....you can live with 100% for decades on end." On Rachel Maddow he said Wall Street guys have "destroyed the world."
From Krugman's PBS appearance:
Rose: We need that kind of stimulus now?
Krugman: We need the moral equivalent of, the moral equivalent of war, as we used to say. But it turns out it's relatively easy to do right now, because, it was harder three years ago. Three years ago when we were talking about the Obama stimulus, the question was, where were the projects? Where's the shovel-ready stuff? What's happened since then is we've had really terrible policy. Not so much from Obama but from absence of policy. So we've had enormous austerity at the state and local level. So all we need to do really is reverse that and that will give us the kind of boost to the economy that we need to get out of this.
Rose: Austerity at the local level?
Krugman: That's right. Get those schoolteachers rehired, get those canceled--and the firemen, and the policemen.
Rose: That will do it for you? That would be enough of a stimulus in order to generate growth in the economy?
Krugman: I do a little bit of the math in "End This Depression Now!" and as best I can tell if we could not just rehire the ones we've fired but get back to the kind of normal job growth that we should have had. So we've lost 600,000 jobs at state and local level. We should have added 700,000 just to keep up with population growth. Just to keep up with the norms of what we normally do. What we did during the Bush recession at the beginning of the last decade. If we got those 1.3 million workers employed, state and local, if we spent the roughly $300 billion a year extra that we would be spending, should have been spending, at the state and local level that's enough to get unemployment below 7%. And I think if you could do that a lot of the positive dynamics, the self-healing takes place.
Rose: So part of what you're saying is we need to stimulate the economy now, we need growth now, and we can take care of the deficit later -- the debt later – because you say the debt in fact is not as big a problem that scares you as it does other people.
Krugman: That's right, that's mostly, people who get really really, you can throw around the numbers, right, $15 trillion. But we're a $15-trillion-a-year economy, too. So you need to have some perspective there. I don't like debt. You know, if I could wave away the irresponsible tax cuts and the unfunded wars and get rid of the debt that we ran up gratuitously during the good years I would. But on the scale of things to worry about, it's just not that high. Britain -- we talk about ourselves, Britain had debt that was well over 100% of for most of the 20th century. It's not a crisis level problem.
Talking about the optimum level of debt for a nation, Krugman said "25% would be optimal but you can live with 100% for decades on end. And right now isn't the time to be worrying about that number."
The exchange about Rep. Paul Ryan (or in Krugman's typically clever, classy phrasing, "a flim-flam man" whose work is "drenched in flim-flam sauce") occurred 41 minutes into the Rose interview:
Rose: Look, this is today's New York Times: "Ryan's Rise from Follower to GOP Trailblazer." Representative Paul D. Ryan has become and his budget has become the alternative to what you say and the alternative to what the president proposes.
Krugman: It's kind of, the Ryan phenomenon is quite awesome. And I mean that in the worst possible way. The budget is a piece of nonsense. It's an obvious piece of nonsense. If you actually look at what it substantively proposes, it's cut taxes on the rich and cut aid for the poor and would increase the deficit. And all of the claims of deficit reduction rest on magic asterisks on "we're going to do something. We won't tell you what, we're do something to raise revenue and cut spending," so it's essentially a fake document. Ryan himself, John Chait has a piece in the new york magazine, Ryan himself was a budget busting deficit-mongerer through the Bush years so the whole notion he cares about the deficit is a fabrication.
Andrew Kirell at Mediaite watched Krugman's Monday afternoon appearance on Bloomberg TV's "Street Smart" with Republican presidential candidate Ron Paul and wasn't impressed. Kirell also captured Krugman's insult of Ron Paul's followers: "If Ron Paul got on TV and said “Gah gah goo goo debasement! theft!” -- which is a rough summary of what he actually did say -- his supporters would say that he won the debate hands down; I don’t think my supporters are quite the same, but opinions may differ."
Finally, Krugman appeared on Rachel Maddow's MSNBC show Tuesday night. The Huffington Post:
"I've been in meetings with the guys from Wall Street," Krugman said. "The guys from Wall Street are impressive. They're smart, they're funny, they're rich, they have great tailors and they tend to get treated seriously even if they've just destroyed the world. They tend to have a weight that bearded college professors don't in these discussions."
Krugman added that there's a strong influence of power and wealth, "which you need to actively lean against. And you try to convince politicans with good hearts that you know that guy may sound impressive and look impressive but fundamentally, he is not on your side."
Maddow asked if Krugman has seen conservative arguments about the economy change in character. "You're watching the hereditary principle starting to make a comeback," he said. "We see that a little bit from Mitt Romney. We used to think it's all about equal chances and starting line. Now it's...people should have the right to pass advantages onto their children."
Krugman later added, "We're really trying to get back to the old values of hereditary wealth and power. We've moved to a level of shamelessness in many of these things."