Krugman's World

by Alexander Cockburn

"At the beginning of the new millennium, then, it seemed that the United States was blessed with mature, skillful economic leaders, who in a pinch would do what had to be done. They would insist on responsible fiscal policies; they would act quickly and effectively to prevent a repeat of the jobless recovery of the early '90s, let alone a slide into Japanese-style stagnation. Even those of us who considered ourselves pessimists were basically optimists: we thought that bullish investors might face a rude awakening, but that it would all have a happy ending." A few lines later: "What happened to the good years?" A couple of hundred pages later: "How did we get here? How did the American political system, which produced such reasonable economic leadership during the 1990s, lead us into our current morass of dishonesty and irresponsibility?"

Across the past three years Krugman has become the Democrats' Clark Kent. A couple of times each week he bursts onto the New York Times op-ed in his blue jumpsuit, shoulders aside the Geneva Conventions and whacks the bad guys. For an economist he writes pretty good basic English. He lays about him with simple words like "liar," as applied to the Bush crowd, from the president on down. He makes liberals feel good, the way William Safire returned right-wingers their sense of self-esteem after Watergate.

Krugman paints himself as a homely Will Rogers type, speakin' truth to the power elite from his virtuous perch far outside the Beltway: "Why did I see what others failed to see?" he asks, apropos his swiftness in pinning the Liars label on the Bush administration. "I'm not part of the gang," he answers. "I work from central New Jersey, and continue to live the life of a college professor -- so I never bought into the shared assumptions. ... I don't need to be in the good graces of top officials, so I also have no need to display the deference that characterizes many journalists."

All of which is self-serving hooey. The homely perch is Princeton. Krugman shares, with no serious demur, all the central assumptions of the neo-liberal creed that has governed the prime institutions of the world capitalist system for the past generation and driven much of the world deeper, ever deeper into extreme distress. The unseemly deference he shows Clinton's top officials could be simply, if maliciously explained by his probable hope that one day, perhaps not too long delayed in the event of a Democratic administration taking over in 2005, he may be driving his buggy south down the New Jersey turnpike toward a powerful position of the sort he has certainly entertained hopes of in the past.

Faintly, though not frequently, a riffle of doubt perturbs Krugman's chipmunk paeans to the Clinton Age. "In an era of ever rising stock prices hardly anyone noticed, but in the clear light of the morning after we can see that by the turn of the millennium something was very rotten in the state of American capitalism." It turns out he means only book-cooking of the Enron type (an outfit the hermit of Princeton once consulted for).

As a neo-liberal Krugman makes sure to advertise he has enemies to his left. He carefully reprints at the end of his collection a 1999 paean to the WTO from Slate (where he had plenty of room to burst through the straitjacket of 750 op-ed words) stuffed with vainglorious claims for the virtues of globalization. But has "every successful example of economic development this past century -- every case of a poor nation that worked its way up to a more or less decent, or at least dramatically better, standard of living ... taken place via globalization; that is, by producing for the world market?"

The fact that he skirts Cuba and can't be bothered even to address the consequences, or even contours, of the shift in Third World economic strategies in the post-war period, tells us how little Krugman is prepared to look with any honesty at his own economic ideas in the mirror. What of Argentina, a devastating advertisement for neo-liberal failure? Amid the rubble Krugman has this to mumble from within the 750-word straitjacket: "I could explain at length the causes of Argentina's slump: It had more to do with monetary policy than free markets." A page or two later, brooding comfortably in a column titled "The Lost Continent" (of Latin America), Krugman asks, "Why hasn't reform worked as promised? That's a difficult and disturbing question." But not one that he's prepared to address.

In the concluding pages of a 426-page book where Krugman might have disturbed himself and his audience with difficult questions about the widening gap, right through Clinton time, between rich and poor across the world and here in the United States, about the reasons why Clinton's bubble economy collapsed so abruptly, Krugman prefers to indulge himself in playing to the gallery, Thomas Friedman-style, with some Nader-bashing. He reprints a column written in July 2000, when Ralph Nader had decided that a Third Party candidacy was the only way he could forcefully raise just those "difficult and disturbing" questions the respectable and conventional Krugman shirks: "And was I the only person who shuddered when Mr. Nader declared that if he were president, he wouldn't reappoint Alan Greenspan -- he would 're-educate' him?"

Now suppose someone like Nader had re-educated Alan Greenspan prior to 1996, when the Fed chairman refused to impose the margin requirements on stock market speculators that would have punctured the bubble. It would have been a useful piece of schooling. But reeducation classes weren't on the agenda then any more than they are now, at least in Krugman's pages, so deferential to his heroes, like Robert Rubin (Krugman reverently invokes "Rubinomics"), who kicked aside regulatory impedimenta like Glass-Steagall and then sprinted out of his Treasury job to cash in on the fruits of his deregulatory labors as co-director of the Citigroup conglomerate.

Krugman is a press agent, a busker, for Clintonomics. For him, as for so many others on the liberal side, the world only went bad in January 2001. If a Democrat, pretty much any Democrat conventional enough to win Wall Street's approval, takes over again, maybe in 2005, the world will get better again. Who wants to read a 426-page press release? Fortunately, we don't have to, particularly as we have to hand a new, serious, radical scrutiny of Clintonomics and neoliberalism, by Robert Pollin, and it is to his "Contours of Descent" that I propose to turn in a couple of weeks.