Google Chairman Eric Schmidt gave a much-needed economics lesson to New York Times columnist and Nobel laureate Paul Krugman on ABC's This Week Sunday.
During a lengthy discussion about liberal and conservative views on how to stimulate the currently soft recovery, Schmidt - a known Barack Obama supporter - marvelously said to his left-leaning co-panelist, "Surely you're not arguing that the government should hire all the unemployed people" (video follows with transcript and commentary):
ERIC SCHMIDT, EXECUTIVE CHAIRMAN GOOGLE: This perpetual argument over taxes is simply a lever to try to do the right thing. It's obvious what the right thing is. And we end up talking about the wrong thing. The right thing is to get people employed in jobs that matter.
CARLY FIORINA, FORMER HEWLETT PACKARD CEO: Right.
SCHMIDT: And how do you do that? It's done largely by the private sector, largely with intelligent regulation and not too much of it. Let's figure out a way to get people being hired by business that solve problems. It will happen.
Probably like you, I was shocked to hear Schmidt say creating jobs is done "largely by the private sector, largely with intelligent regulation and not too much of it." Not surprisingly, so was Krugman:
SCHMIDT: Well, surely you're not arguing that the government should hire all the unemployed people.
Krugman was clearly taken aback by this:
KRUGMAN: No, I'm saying that the government should actually re-hire the 300,000 school teachers who have been laid off because of -- because of misplaced austerity …
Krugman would say that, but exactly how does that get people other than school teachers back to work? Once again, Schmidt saw through the hypocrisy:
SCHMIDT: That number won't fix the problem I'm talking about. If you look at forward growth in our citizen rate, they will be hired by private businesses, primarily small businesses.
Indeed, but Krugman - ever the government is the solution advocate - fought back:
KRUGMAN: But we -- we -- but the most important thing is --
FIORINA: Look at the unemployment among young people.
KRUGMAN: The most important thing right now is to end the depression we're in.
SCHMIDT: But the easiest way to solve -- the easy way to do the 300,000 is to do government block grants. I've never understood why government can't do one-time grants. The government basically funds things, but then they become perpetual. It would be relatively easy when government funding is down to essentially create that --
Schmidt here was again advocating a Republican position. GOP governors want block grants for Medicaid as an example.
But the Left wasn't done trying to defend the indefensible. Former Democratic Michigan Governor turned Current TV host Jennifer Granholm stepped up to the plate:
JENNIFER GRANHOLM, FORMER DEMOCRATIC GOVERNOR FROM MICHIGAN : Isn't' that what the Recovery Act is?
SCHMIDT: It was. But if you look at the Recovery Act, which I supported, much of that went to stuff which is now structurally part of the base.
Indeed, and that's one of the reasons Republicans fought so strongly against it because they realized much of the program was structurally permanent rather than the needed short-term stimulus.
Makes you wonder if after watching Obama and the Democrats in action since January 2009 the left-leaning Schmidt has lost that loving feeling for Hope and Change.
He wouldn't be the only one.
