Paul Krugman: Loans and Leadership

[stratomagi]

Since someone asked me to, I posted Krugman's first article after Obama's economic speech yesterday...I don't always agree with him as I've mentioned before but at any rate i respect the guy, so here it is.

When George W. Bush first ran for the White House, political reporters assured us that he came across as a reasonable, moderate guy.

Yet those of us who looked at his policy proposals — big tax cuts for the rich and Social Security privatization — had a very different impression. And we were right.

The moral is that it’s important to take a hard look at what candidates say about policy. It’s true that past promises are no guarantee of future performance. But policy proposals offer a window into candidates’ political souls — a much better window, if you ask me, than a bunch of supposedly revealing anecdotes and out-of-context quotes.

Which brings me to the latest big debate: how should we respond to the mortgage crisis? In the last few days John McCain, Hillary Clinton and Barack Obama have all weighed in. And their proposals arguably say a lot about the kind of president each would be.

http://www.nytimes.com/2008/03/28/opinion/28krugman.html?_r=1&oref=slogin

[FrenchieCat]

1. Here's a different take from Krugman's....

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=5291417&mesg_id=5291824

[bhikkhu]

2. Thanks for that.

Though with the GE months away I don't think it is a good time for certainty on economic plans, and I don't give Krugman any more credit than a crowd of other economists who merely "saw it coming" and can now rest upon the validation of their predictions.

I think both candidates have good plans, but there is a gulf of time between now and inauguration. I am looking more for an open mind and an intelligent team - looking forward rather than back - than for "I'd do this right now" and "this" is of no use at all come January.

Obama's speech was quite good. I have not been satisfied by any president's economic policies since Carter, and had I been better informed then I probably wouldn't have liked Carter's ideas either. As far as the economy, I am fairly certain that change will be obligatory and painful in both the short and the long term. On the general principle that experience leads to fixed ideas and policies (which in the economic arena simply no longer apply) I would choose Obama as less indoctrinated into formal and dated economic practices and views, an open and well informed mind, capable of adapting to what will be needed.

[papau]

4. Not a different take - same take but wiithout knowledge of 1930's sucessful approach now Hillary's

approach.

As usual Obama went to the lions den - wall street in this case - and in the lions den said nothing to disturb the lions.

five-year mortgage interest freeze or a moratorium on foreclosures is indeed a bit more conservative than FDR in the 30's - but a great deal more liberal, progressive, effective, workable than Obama's minimalist approach to change

[JoFerret]

5. Hillary takes the bold progressive action focussed steps

Obama backs off.
Same with health care.

Why are we settling for less? In this election of all elections? When we could win and win BIG.
Why are we settling for less than the right thing, for half measures and mealy mouthed baby steps?

Jesus - how long must we democrats wait for a decent leader with the courage to do the right things for ALL of us?

[anigbrowl]

6. I fail to see what's bold or progressive about Hillary's plan

Looks like fat subsidy to the financial services industry to me, without any serious structural reforms. What really surprises me is that Krugman's column is so short; it contains virtually no detail and almost leaves readers less knowledgeable than they were before.

[joshcryer]

7. Obama's Health and Economic plans "put it in the hands of the businesses."

Hillary's are significantly more progressive in that they put it in the hands of the government.

How is this not apparent in Krugman's analysis?

[joshcryer]

8. Your naive comment in the other thread:

You said essentially that "price controls are for the illiterate."

But that's what the fed has been doing since the 80s. What is for the "illiterate" is the idea that the economy can magically fix itself without strict regulation and control.

Krugman comes from the liberal economicists, those who believe in highly regulated capitalism.

And indeed, regulated capitalism is the only capitalism that works, as testified by the failures of deregulation here and around the world whenever it is done.

[Shakespeare]

9. You do know, I hope, that Obama proposed more regulation (and RE-regulation) than Hillary did?

She offered a bigger quick-fix package (which realistically stands little change of passage) for the front end (immediate future), but Obama has a more substantial long-term plan with greater regulation that will prevent this type of crisis from happening again.

[JoFerret]

10. More regulation is very good.

.

[joshcryer]

13. Nope, he called for it but his answers don't say that at all.

His whole speech was about "regulating capitalism" (it makes the liberal crowd happy), but there's no real substance to his arguments. Look at the plans themselves.

His calls for tax cuts proves that his "regulation" is all talk. Regulation, by definition, is done by taxing and then building social networks to fight the despotic aspects of capitalism.

[AP]

11. Didn't Clinton suggest that Volker, Greenspan and Rubin form a commission to come up with a

solution?

[joshcryer]

14. Yes, she also said that she got shot at by snipers in Bosnia.

She's not very politically astute when it comes to these sorts of things.

[papau]

3. excellent analysis - agrees with my own - and indeed seems obvious

[JoFerret]

12. The differences are clear. Bold and progressive v. cautious and orthodox

... Mrs. Clinton’s ...the substance of her policy proposals on mortgages, like that of her health care plan, suggests a strong progressive sensibility.

...

... Barack Obama’s speech on the economy on Thursday followed the cautious pattern of his earlier statements on economic issues.

I was pleased that Mr. Obama came out strongly for broader financial regulation, which might help avert future crises. But his proposals for aid to the victims of the current crisis, though significant, are less sweeping than Mrs. Clinton’s: he wants to nudge private lenders into restructuring mortgages rather than having the government simply step in and get the job done.

Mr. Obama also continues to make permanent tax cuts — middle-class tax cuts, to be sure — a centerpiece of his economic plan. It’s not clear how he would pay both for these tax cuts and for initiatives like health care reform, so his tax-cut promises raise questions about how determined he really is to pursue a strongly progressive agenda.

All in all, the candidates’ positions on the mortgage crisis tell the same tale as their positions on health care: a tale that is seriously at odds with the way they’re often portrayed.

...

Mrs. Clinton, we’re assured by sources right and left, tortures puppies and eats babies. But her policy proposals continue to be surprisingly bold and progressive.

Finally, Mr. Obama is widely portrayed, not least by himself, as a transformational figure who will usher in a new era. But his actual policy proposals, though liberal, tend to be cautious and relatively orthodox.

Do these policy comparisons really tell us what each candidate would be like as president? Not necessarily — but they’re the best guide we have.

[joshcryer]

15. Kick.