Posted by: Doug Henwood | March 14, 2016

Varieties of Krugmanesque experience

Paul Krugman’s talking shit about Bernie Sanders again:

Indeed, what the Sanders movement, with its demands for purity and contempt for compromise and half-measures, most nearly resembles is not the Trump insurgency but the ideologues who took over the G.O.P., becoming the establishment Mr. Trump is challenging. And yes, we’re starting to see hints from that movement of the ugliness that has long been standard operating procedure on the right: bitter personal attacks on anyone who questions the campaign’s premises, an increasing amount of demagogy from the campaign itself. Compare the Sanders and Clinton Twitter feeds to see what I mean.

This is funny, since it’s a bitter personal attack coming from a centrist ideologue on a political movement that challenges his view of the world and that of his candidate, Hillary Clinton. Anyone who believes in popular mobilization and not rule by technocrats is a demagogue to someone like Krugman.

But speaking of purity and demagogy and contempt for half-measures, let’s do a little time travel and recall what Paul Krugman wrote about the massive fraud that used to be Enron, which collapsed in 2001 causing scores of billions of dollars in losses and putting 20,000 employees out of work. Pointing out that the company paid him $50,000 to join this advisory board to introduce this quote would no doubt be regarded by Krugman as yet another bitter personal attack. Pure coincidence for sure! Anyway, here’s Krugman writing in Fortune in 1999:

The retreat of business bureaucracy in the face of the market was brought home to me recently when I joined the advisory board at Enron—a company formed in the ’80s by the merger of two pipeline operators. In the old days energy companies tried to be as vertically integrated as possible: to own the hydrocarbons in the ground, the gas pump, and everything in between. And Enron does own gas fields, pipelines, and utilities. But it is not, and does not try to be, vertically integrated: It buys and sells gas both at the wellhead and the destination, leases pipeline (and electrical-transmission) capacity both to and from other companies, buys and sells electricity, and in general acts more like a broker and market maker than a traditional corporation. It’s sort of like the difference between your father’s bank, which took money from its regular depositors and lent it out to its regular customers, and Goldman Sachs. Sure enough, the company’s pride and joy is a room filled with hundreds of casually dressed men and women staring at computer screens and barking into telephones, where cubic feet and megawatts are traded and packaged as if they were financial derivatives. (Instead of CNBC, though, the television screens on the floor show the Weather Channel.) The whole scene looks as if it had been constructed to illustrate the end of the corporation as we knew it.

It’s all there—the born-again 1990s neoliberal love of The Market, the embrace of business as revolutionary, the genuflection before Goldman Sachs, and the excruciating cliché “not your father’s X.”

The Krugman archives are full of interesting material. For example, he wNow he’s busily denouncing Sanders for his attempts to bring something like a Scandinavian welfare state to the U.S., citing the worries of his tepid liberal colleagues that it would just be too expensive. In 1998, just before he wrote that Enron informercial, he disclosed that his ideal regime would be “Sweden of 1980…very generous and high social expenses, a flat income distribution and no unemployment.” Seven years later, in 2005, he told Pepe Escobar that “We should be getting 28% of GDP in revenue. We are only collecting 17%.” (Update: now it’s 19%.)

It’s funny—now that there’s a candidate advocating something like that agenda, he’s against it, standing instead with the finger-wagging, “No, you can’t have that!” contingent. But a guy who’s getting paid $225,000 a year to teach one graduate course and study income inequality is familiar with embracing contradictions.

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Responses

  1. It’s a real shame that Krugman is the Keynesian liberal economist “rock star.” He doesn’t have an ounce of Robert Kuttner’s integrity.

  2. Krugman has long been a gatekeeper – going back to his young days in Portugal following their Carnation Revolution (look it up). I have no idea why Leftists even quote this guy. He ideologically hates them.


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