Reactions to Krugman

I went to see Paul Krugman speak earlier this evening at the Freie Universität. Krugman primarily discussed his new book, “Conscience of a Liberal,” rehashing the book’s arguments for the audience. Krugman’s main point is that inequality in the US has risen dramatically in recent decades, to the point where income disparities now resemble Gilded Age America, when robber barons and J.D. Rockefeller set the national agenda. Krugman asserts that the middle-class and largely egalitarian America of the 1950s was created – not simply born on its own – as a by-product of the New Deal’s social policies. (Taxes on corporations and the rich, for example, were significantly lower prior to WW2.) In recent decades, however, many redistributive mechanisms and populist policies have been undermined by “movement conservatism,” an informal alliance between conservative think tanks, religious leaders, and monied interests that has been an extremely powerful force in American politics. In his book, Krugman heralds the decline of movement conservatism and encourages the passage of progressive social policies – such as universal health care – to put the middle class back on solid footing.

While his talk certainly wasn’t disappointing, I felt like it was intentionally “dumbed down” somewhat for the German audience, and I would have preferred to hear more on his view of the current state of the US economy and financial markets. There was a Q&A session after the talk, in which I asked Krugman to comment on: 1) whether of not the US Consumer Price Index has been distorted for political reasons (in his new book, “Bad Money,” Kevin Phillips, an extremely respected economist, claims that the CPI is understated by several percent – see John Williams’s site for more details); and 2) the veracity of the depictions in John Perkins’s book, “Confessions of an Economic Hitman.”

Not surprisingly, Krugman didn’t lend much credence to the CPI theory or John Perkins. Krugman said he personally knows and trusts many of the economists at the US Bureau of Labor Statistics, but admitted that other government stats have been manipulated in recent years for political reasons. Regarding John Perkins, Krugman said that he was somewhat incredulous when he read certain parts of “Confessions” (a reaction I also had) and doubts that everything Perkins claims is one-hundred-percent true. (Krugman did allow, however, that “you never know” and that the kind of corruption Perkins describes does occur.)

Biking home from the talk, I recalled Foucault’s famous inversion of the dictum “Knowledge is power.” For Foucault, the reverse was true: “Power is knowledge,” i.e. the powerful use their influence to manufacture “hegemonic narratives” that gain widespread acceptance not for their inherent truth, but rather due to the interests that stand to benefit from their dissemination. This is essentially the argument Krugman makes about movement conservatism – one key to understanding its ascendancy is to look at how powerful corporate interests have been expressed through the funding of right-wing think tanks and other institutions that formulate conservative doctrine. The interesting fact here is that many of the academics who rise through the ranks in these institutions are not simply bending their arguments to “serve their masters,” so to speak, but rather that selective factors are at work to weed out “non-believers” and promote those who truly harbor conservative worldviews, regardless of their ultimate academic merits.

Considering Krugman’s rejection of the “conspiracy theories” I queried him about, I can’t help but wondering if similar selective factors have been at work in Krugman’s career. Quite simply, What are the limits of debate? Could it be that Krugman simply represents a liberal counterpart to the conservative opinion leaders he maligns? Krugman, despite his left-wing views, is still a “mainstream voice” – the core validity of the US government and economic system is not cast into question. I certainly don’t consider myself a radical – I believe in markets and the need for a strong national defense (to put it simplistically) – but this is an interesting point to consider. The commentators who truly excoriate US policies – Noam Chomsky, Chalmers Johnson, Gore Vidal, Alexander Cockburn, James Howard Kunstler, et al. – find no voice in mainstream media. Is Krugman merely a blue-state Bill O’Reilly?

Krugman in Berlin

Paul Krugman, the celebrated New York Times columnist, is in Berlin this week, and will be speaking on the 22nd at the Freie Universität. In his latest blog entry, Krugman writes about the “jelly donut” myth, which still has traction in the US despite its blatant falsehood. JFK’s statement – “Ich bin ein Berliner” – was, of course, grammatically correct, but can be willfully misinterpreted as meaning “I am a jelly donut.” (A possible equivalent would be Pope Ratzinger saying “I am a New Yorker” and all of Germany thinking he meant the Reuben sandwich.)

Krugman is an extremely important voice in America at the moment. His latest book, “The Conscience of a Liberal,” explores the political underpinnings of widening inequality in the US. Krugman draws attention to the startling fact that the average US worker’s inflation-adjusted income has barely risen since the early 1980s – despite two decades of rising productivity. The earnings of those in upper-income brackets, however, have soared – particularly the earnings of the top 1 percent of the population – a fact Krugman attributes to the rise of movement conservatism and regressive tax and social policies.

As a NYT columnist, Krugman is an important whistle-blower and fierce opponent of the Bush administration’s policies. An economist by training, Krugman regularly provides valuable insights in his column and blog about the US economy and the current mortgage and credit crises. I’ll be extremely interested to see what Krugman has to say on Thursday.