Monday, January 19, 2009

Krugman v. Obama

I started this blog last year with writeups criticizing some fuzzy thinking by Dr. Paul Krugman, the noted economist-pit bull-lion (take your pick) of the left (see Krugman Loses It). His op-ed today at the New York Times, "Wall Street Voodoo", is of real importance because it reveals two major criticisms of Barack Obama himself. This criticisms may be missed by a quick read, so I wanted to post this rather than devote myself to my second cup of the day.

A. Consider paragraph 1, which appears to be a typical partisan snipe by Dr. Krugman:

"Old-fashioned voodoo economics — the belief in tax-cut magic — has been banished from civilized discourse. The supply-side cult has shrunk to the point that it contains only cranks, charlatans, and Republicans."

DoctoRx here. Who campaigned on a platform of a tax cut for 95% of Americans? And who has put almost half of the proposed stimulus package into tax cuts rather than Government spending? Well, the correct answer is: Barack Obama. Since he is not a Republican, then he must be either a crank or a charlatan, in Dr. Krugman's view.

B. After the body of the argument, the piece ends in a pessimistic note:

"Unfortunately, the price of this retreat into superstition may be high. I hope I’m wrong, but I suspect that taxpayers are about to get another raw deal — and that we’re about to get another financial rescue plan that fails to do the job."

DoctoRx here. Who will be the President who Dr. Krugman fears will provide taxpayers a raw deal, and another failed rescue plan (and who as Senator voted for the prior failed rescue plan and last year's failed stimulus plan (remember that one, with the useless rebates?)): It's the O-man, that's who!

This split amongst the Democratic faithful is big news.

And for what little it is worth in the scheme of things, I agree with most of Dr. Krugman's points, though I disagree with his use of the N-word ("Nationalization" of the banks), both on policy grounds and on tastelessness grounds (especially given the ethnic heritage of Mr. Obama; let's not even mention an "N" word even in the service of a joke). Instead of nationalizing the failed banks, I say let 'em go. Even their names are toxic at this point. I'm going to die. So are you. So can failed companies, whether they make machine tools, sell consumer electronics or off-price women's clothing . . . or whether they happen to deal in financial matters.

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