Paul Krugman: It's time for Obama "to realize that populism is exactly what the economy needs"

[Better Believe It]

Op-Ed Columnist
Reform or Bust
By PAUL KRUGMAN
September 20, 2009


I was startled last week when Mr. Obama, in an interview with Bloomberg News, questioned the case for limiting financial-sector pay: “Why is it,” he asked, “that we’re going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?”

That’s an astonishing remark — and not just because the National Football League does, in fact, have pay caps. Tech firms don’t crash the whole world’s operating system when they go bankrupt; quarterbacks who make too many risky passes don’t have to be rescued with hundred-billion-dollar bailouts. Banking is a special case — and the president is surely smart enough to know that.

All I can think is that this was another example of something we’ve seen before: Mr. Obama’s visceral reluctance to engage in anything that resembles populist rhetoric. And that’s something he needs to get over.

It’s not just that taking a populist stance on bankers’ pay is good politics — although it is: the administration has suffered more than it seems to realize from the perception that it’s giving taxpayers’ hard-earned money away to Wall Street, and it should welcome the chance to portray the G.O.P. as the party of obscene bonuses.

Equally important, in this case populism is good economics. Indeed, you can make the case that reforming bankers’ compensation is the single best thing we can do to prevent another financial crisis a few years down the road.

It’s time for the president to realize that sometimes populism, especially populism that makes bankers angry, is exactly what the economy needs.

Please read the complete article at:

http://www.nytimes.com/2009/09/21/opinion/21krugman.html?_r=2&ref=opinion

[mucifer]

1. Time to go back to those community organizing roots.

[anonymous171]

2. But ivory tower "progressives" detest populism.

They call it "demagoguery" and say that it harms the public discourse.

[Better Believe It]

3. Plus it raises the concept of class, or as the Republicans say "class war"

And everyone knows we live in a classless society here .... a regular capitalist paradise!

We are all in this together, we are all Americans!

Bull shit!

And the President must represent all of the people.

More bull shit!

[Guy Whitey Corngood]

15. Shiiiit, we lost the "class war" a long time ago. nt

[xocet]

17. Damned Ivory Tower...

To which "ivory tower 'progressives' " are you referring?

Krugman is a professor.
Summers is a professor.
Greenspan has a Ph.D. in economics.
Obama was a professor.

Every single person mentioned in the article and the author of the article, too, can be shown to be affiliated with the university system. Clearly, the classification of "ivory tower" has nothing to do with the content of your comment and merely represents either a carelessly-worded remark of yours or an anti-intellectual bias.

Would you care to re-phrase your point? I did not know that there were any anti-intellectual progressives. That has typically been a conservative role.

[Raineyb]

32. Summers is no progressive

Greenspan is a Ayn Randian, definitely NOT a progressive. I'm sure the word "progressive" was in quotes for a reason.

[anonymous171]

52. I don't worship people just because they bought a degree

So yeah, I guess I am "anti-intellectual," since I care more about what people do with that education than about where they got it.

[JDPriestly]

60. Degrees are not bought. They are worked for. You do not become

a full professor of economics at a major university without hard, hard work.

[Trillo]

62. Only professors at major universities work hard

Everyone else is a lying slacker deserving of a lifetime of financial punishment. Nobody else works hard. Proof? Where's their money or their status?

/mirror off

[JDPriestly]

64. That is not at all what I said. I just said that people cannot buy degrees

that get them top posts at universities. Most people who have higher degrees worked hard and sacrificed to get them. You can be 100% certain that if a person is a professor at a major university he or she worked hard to get that degree. Lots of other people work hard too. I was responding to a post claiming that the professor had bought his degree. That is an unfair insult.

[Trillo]

65. of course professors bought their degrees!

A mirror is "reversed", it makes no attempt to duplicate your image, though sometimes we forget that. It shows us the other side of the coin, so to say. Carl Jung wrote of our shadows, and how we unknowingly project our own shadows onto others because we deny those very real aspects of ourselves to ourselves. This is similar to what a mirror does, though of course it's meant as a metaphor and not a literal.

But of course most professors bought their degrees! Where are the "free universities" they went to? Maybe a very small percentage got some grants that offset some of the purchase price. Maybe an even smaller portion were able to get grants to pay for all their expenses, we hear of that from time to time, just like we hear of folks winning the Lottery from time to time.

Are you saying that to be in a top professorial position at a top university, that such a professor had to get their college education entirely for free(!), in addition to whatever work was required that ultimately led to their degrees?

[JDPriestly]

66. If you are a good enough student, you get scholarships and work as an undergrad.

You study hard, get good grades and get accepted to a graduate school. Again, you may get a teaching fellowship or you may borrow money for your studies. If you get good grades, you can get the education even if you don't have any money. Many of us did it.

[Trillo]

67. Unfortunately, that was the experience of "the few", not "the many."

I note you didn't "directly" answer my last sentence question to you. I sort of think your post says the answer is Yes, but the absence of the Yes direct answer, is notable.

As I was thinking about Carl Jung's Shadow since writing (and editing) my last reply to you, I tentatively realized that our corporatist society and our Top 400 elites and how they control us, (i.e., authoritarianism, but also manipulated media, as well as disguised ownership through the corporate shell structures, IOW both grossly overt as well as seemingly infinite subtleties, et al) is probably higher education's Shadow.

[JDPriestly]

71. I don't understand your question.

Everyone else is a lying slacker deserving of a lifetime of financial punishment. Nobody else works hard. Proof? Where's their money or their status?

I did not say that nobody else works hard. As for money and status, very few of us get those things. Money and status are not so important. I was responding to your absurd assertion that people with advanced degrees who teach in higher education "bought" their degrees. That is a silly statement. You cannot just buy a degree from a reputable school. It doesn't work that way. It especially does not work that way in graduate programs other than maybe the MBA programs. I don't know what goes on in MBA programs.

[Romulox]

70. Hard work is a necessary, but not sufficient, precondition.

Many or most of the Ivey league is comprised of the children of alums.

[change_notfinetuning]

26. You mean like "Cash" Sunstein? n/t

[Trillo]

68. Thanks.

Sunstein's 2006 book, Infotopia: How Many Minds Produce Knowledge, explores methods for aggregating information; it contains discussions of prediction markets, open-source software, and wikis. Sunstein's 2004 book, The Second Bill of Rights: FDR's Unfinished Revolution and Why We Need It More than Ever, advocates the Second Bill of Rights proposed by Franklin D. Roosevelt. Among these rights are a right to an education, a right to a home, a right to health care, and a right to protection against monopolies; Sunstein argues that the Second Bill of Rights has had a large international impact and should be revived in the United States. His 2001 book, Republic.com, argued that the Internet may weaken democracy because it allows citizens to isolate themselves within groups that share their own views and experiences, and thus cut themselves off from any information that might challenge their beliefs, a phenomenon known as cyberbalkanization.
http://en.wikipedia.org/wiki/Cass_Sunstein

[glitch]

4. Blaming the health care crisis on the uninsured is another example of his anti-populist rhetoric. nt

[wroberts189]

12. And the damned thing is all they have to to is look at the rapidly collapsing MA mandate model. nt

[MannyGoldstein]

5. All Evidence Points To Obama Deeply Admiring Bankers

As far as I can tell.

[Lorien]

20. 'Admiring" or "in the pockets of"?

Goldman Sachs was one of his top contributors.

[ProSense]

6. Krugman: The good news is that senior officials in the Obama administration...

The good news is that senior officials in the Obama administration and at the Federal Reserve seem to be losing patience with the industry’s selfishness. The bad news is that it’s not clear whether President Obama himself is ready, even now, to take on the bankers.

Credit where credit is due: I was delighted when Lawrence Summers, the administration’s ranking economist, lashed out at the campaign the U.S. Chamber of Commerce, in cooperation with financial-industry lobbyists, is running against the proposed creation of an agency to protect consumers against financial abuses, such as loans whose terms they don’t understand. The chamber’s ads, declared Mr. Summers, are “the financial-regulatory equivalent of the death-panel ads that are being run with respect to health care.”

Good article.

[AusDem]

63. hmm, i don't know....

sadly i think its a lesson you learn pretty early on as president. You don't mess with the bankers.

[PM Martin]

69. Will Obama take a hardline stance against

the financial industry, or will he let them destroy what is left and deem himself a single-term President.

[patrice]

7. Yes, let's invest in U.S. Will work for U.S. - TVA style Care Community Development plans

Kansas Nurses are on the job and READY to build standards based care-community (-ties) and health care reforms, by those providing the care FOR and WITH the PEOPLE!, American Care.

[patrice]

8. Complete and appropriate health care is a human right, but then, so is Peace. nt

[branders seine]

9. If it weren't for Krugman, Hartmann and Sirota,

I think I'd just pack up and go home.

[wroberts189]

11. I could think of a few more but I know what you mean. nt

[Iwillnevergiveup]

23. Yes, indeed

Like Frank Rich, Robert Scheer, Nicholas Kristof, Brad Friedman, Garrison Keilor, most of the New Yorker and the Nation writers, Rachel Maddow, Arianna Huffington, Amy Goodman....there are some smart, sane people out there.

[KoKo]

30. Jane Hamsher, Howard Dean, Frank Rich, The Nation Magazine, Matt Taibbi,

Open Left, Smirking Chimp, the Economic Populist, the Big Picture Blog....

[Jim Sagle]

45. And don't forget Dylan Ratigan.

[wroberts189]

10. I am forced to agree with this excerpt:

"quarterbacks who make too many risky passes don’t have to be rescued"


I love the Prez. but I was also disturbed by his comparison of HC mandates to auto insurance... (an easily winnable counter argument being you do not have to own a car).


I take it on faith he knows full well these things. I hope he is just playing a safe game.

And on edit: Knows what he is doing and will do the right thing.

knr

[KoKo]

44. I'm sad to say this...but I think Obama is totally "well meaning"...but "totally clueless."

He's an incredible speaker..but was brought to power by those who "own him." He has the choice of being a GREAT PRESIDENT...or a mild failure.

I hope he is bright enough to consider that HE HAS THE POWER, NOW! ....and will CAST OFF THOSE WHO "Brung Him to the Party!"

Go OBAMA... It's NOT TOO LATE TO LEARN FROM MISTAKES OF ALL OUR WEAK DEM PRESIDENTS of the LAST 30 YEARS!

:applause:

[90-percent]

51. Brung him to the party?

It's WE THE PEOPLE THAT BRUNG HIM TO THE PARTY. HE WORKS FOR US AND DAMN WELL BETTER DO WHAT HE PROMISED US HE'D DO!

Do we still have a real democracy or is this just theater put on for us by our fascist corporate masters. They want all the money and property in the whole system and will ruin millions of us to get it!

A relevant Zappa quote:

"The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater."

I feel the brick wall is 6 inches from my face these days.

-90% jimmy

[KoKo]

54. We did think it was "We the People"...but it was "thin" as your quote from Zappa

implies... :-( The "illusion."

[wroberts189]

55. Who owns him? It was all grassrooots donations to prez... nt

[Jakes Progress]

13. Krugman. Right. Again.

Nothing should be loose now because at least twice a week Krugman nails it.

[Vidar]

14. K&R

[Stevepol]

16. I'd like to give 50 recs. This is Obama's only real weakness IMO

He's decided to take a ride with Geithner, but I don't think Geithner knows where he's going.

[Lorien]

21. Geithner knows

he's sucking every last penny from the bottom 95% to feed it to the top 1%.

[Uncle Joe]

18. Kicked and recommended.

Thanks for the thread, Better Believe It.

[polichick]

19. Yes - tweaking around the edges of a corrupt corporate system won't cut it...

And it's not what this prez was elected to do.

[pundaint]

24. Can it be cut?

So we got Republicans who lead in the wrong direction, and we got Democrats who wont lead at all. Isn't it time for another option?

[polichick]

25. We can replace blue dog Dems with progressive Dems, or...

...we can build a whole new party ~ but yeah, it's time for another option.

[Joe Chi Minh]

22. K&R

[Pharaoh]

27. What we need is a maximum wage

Say 2 million a year. And if you can't make it on that. tough shit.

[tclambert]

29. That is an interesting idea.

Gonna have to ponder on the implications. Do we allow loopholes for artists' and inventors' royalties, capital gains for owners/founders of businesses, stock dividends, bonuses? Would it cool the ambitions of the truly exceptional? And, of course:

Who would play quarterback?

[tclambert]

My wife liked your maximum wage idea, and suggested tying it to the minimum wage.

For instance, Maximum wage = 100 x Minimum wage. If full-time minimum wage yields $20,000 a year, maximum wage can hit $2 million. If the rich want to increase the maximum, and you know they will, they must also accept raising the minimum. Oh, that would be sweet!

I'm getting to like this idea the more I think on it. Thanks, Pharaoh.

[Pharaoh]

38. Yes, the only problem is

IT MAKES TOO MUCH FUCKING SENSE!!

Because the world is fucking insane!

[pundaint]

42. 30x is a better multiple

It's closer to the historical point of revolutionary uprisings.

[tclambert]

28. Matthew Stafford, Detroit Lions' quarterback, could use a bailout.

not necessarily in dollars. He would surely welcome pass blockers and pass receivers as well.

[Hawkowl]

31. Obama as Rainman

I think Obama is as smart as an autistic savant. Brilliant politician who doesn't have a clue how the economy, military or anything else functions. Or maybe he is always looking for the easy way out because he has no moral code. This would explain his being bewildered by partisanship and his inability to discern evil.

[Demeter]

34. More Like Peter Sellers in "Being There", I Think

the blank slate upon which people post their dreams and fears.

[tclambert]

36. "In the garden, growth has it seasons.

First comes spring and summer, but then we have fall and winter. And then we get spring and summer again."

[Pharaoh]

37. Chauncy Gardner!

:rofl: :rofl: :rofl:

[chill_wind]

47. "As long as the roots are not severed, all is well."

eom

[KoKo]

56. I still think there's "something there." It hasn't been awakened ...yet..

but I see in his eyes a sadness there. His media blitz shows a man on "auto pilot." It's not Chauncy to me...yet. It's an awakening of some kind. Or..at it's worst..a resignation of what it means to find out you have been bought and paid for.

Let's see how far he goes with that. He still has a huge chance. But, then it is easy to take the licks and end up like Bill and Hillary and the rest of the folks we believed in....they end up with more power and money. But, it wasn't the money with the Clintons...it was the Power and maybe "settling for less."

Obama still is a rookie. Let's hope there's much more there.

[Hawkowl]

61. Brilliant!

Ha! I think you've hit the nail on the head!

[GrimReefa]

33. Good question, Mr. President

“Why is it that we’re going to cap executive compensation for Wall Street bankers but not Silicon Valley entrepreneurs or N.F.L. football players?”

As Krugman mentioned, there is a salary cap in the NFL (not to mention that "NFL football" is redundant), but let's be generous and assume he meant MLB players. The question is still valid - why no caps on those guys?

Not a hard cap, or an explicit one, but something more in line with the way the economy worked for, oh I don't know, the entire post-Depression 20th century until Ronnie Reagan ruined everything. Back in the days when we had a top marginal income tax rate of 75-80%, we had the largest and most diverse middle class in the world, which was the engine for the greatest economy the world had ever seen. The days of the decline of the American standard can be traced right to Regan and his gutting of the progressive tax system. NOBODY needs to be making more than, oh I don't know, 3-5 million a year. Tax income over that amount at 80%, all of a sudden CEO pay will come down across the board, workers' wages will go up, American schools will go back to producing the most well-educated students in the world, crime rates will plummet in cities where folks can suddenly earn enough on an honest day's work to where they don't have to turn to drugs and violence, and the US can regain its status as the Greatest Country in the World, which we truly were for damn near a half-century.

Everything we do until then is a band-aid on a bullet hole.

[earth mom]

35. Everyone on DU would be pissed if * said the same thing. But when Obama says it,

it's "ALL GOOD" to lots of people around here.

Wake up DU!

[colsohlibgal]

39. Tax The Fat Cats

GrimReefa nails it. It just never seriously gets discussed and it is totally the elephant in the room. It's been one long gravy train for the super well off since The "B" actor president. It's not just the top marginal income tax rate, which he slashed from 70 to 28%, it has been, over the subsequent years, cuts on capital gain taxes, nobody making over 100,000 gets chipped for SS, etc. Tons more cash for the fat cats, screw the rest of us, and not in a good way.

The income inequality in the USA is wide, and getting ever wider.

The people are out there and they are thirsty, if Obama said "what the Hell I'm going seriously populist", he would get stuff done and he would win in an enormous landslide in 2012 - the birther/wing nut population gets so much play in the corporate media, but that are a distinct minority, mostly a regional party, and the future does not look bright because younger folks don't tend to give a hoot about those social wedge issues the wing nuts like to use.

[bertman]

40. The President is simply repeating what the Wall Street banksters in his Cabinet are whispering

in his ear every day. Those guys think they're the hardest-working, most deserving, most talented, geniuses on the planet. Unfortunately, being a genius at making money off pyramid schemses is usually a result of being greedy, unscrupulous, short-sighted, selfish, and immune to the concept of the common good.

As soon as the President's financial advisors were announced it was obvious that we as a nation would be dealing with the Wall Street Exceptionalism mantra to our great detriment.


Thank you posting this, Better Believe It.

Recommend.

[chimpymustgo]

41. And the President doesn't have sense/morals to know better?

[Better Believe It]

49. He's in a different class ..... a class that isn't like most of us.

[lib2DaBone]

43. It's time to think outside the box...

We need jobs. Jobs in energy, fixing the electric grid, jobs in fixing the roads..

Neither Obama nor the CONgress understand this. With no jobs... people can not purchase squat.

We need to bring the troops home TODAY! How can we afford War ...when we can't feed the American People?

Message to Obama: Quit blowing smnoke up our ass, and put AMERICA to work! Now!

[mother earth]

46. Wow. I'm truly amazed at that unsettling answer. I love PK.

He always nails it. Isn't incredible how far deep the corporate roots go? I've got to add this as a disappointment in someone I believed knew the real deal. Talk about slow change, maybe no change.

I'm looking forward to the day that elected leaders don't have to rely on big campaign corporate pockets to be elected. When are we going to go to the heart of the matter and deal with campaign finance reform? Things are bad. Thanks for this article, I'm going to read the rest of it.

I LOVE Paul Krugman....we need more like him in that "liberal" MSM...damn! I hope Obama is reading Krugman!

[MasonJar]

48. Thank you, Professor Krugman, for speaking important truth to power.

[Doctor_J]

50. Unfortunately, our president is not a populist

Susprisingly, he's more like the Wall Streeters than the people in the communities he useed to organize.

[anonymous171]

53. Right. He's a "centrist"

In other words, he is for the interests of the common man as long as they do not conflict with the interests of the elite.

[mangeydog democrat]

57. One doesn't upset the apple cart

Simple rule of life: You don't upset the apple cart as long as you are one of the few getting good apples. The current President is the "good cop" for our side in the whole good cop-bad cop political dichotomy. Meanwhile, most of the suspects, us, have been so scared, scarred and abused by the "bad cop" that we don't realize that the "good cop" is still a cop and not really on our side. This is for the metaphorically impaired: replace cop with corporatist and you might understand better. Obama will not enact any real change to any of the power structures in his term be it one or two. While roughly half of the people who voted for him will either say that he really did some good, or that we have to "wait for it" because it is all some grandmaster plan that hasn't reached its convergence point yet, and by the time most realize that it is too late for him to do any good they will be so entrenched in their predicted points and views that they will be unable to admit that we got hosed once again. And then there will be enough of a sea change too give the power structure cover to elect a republican again. Wait for it? How many are still waiting for the master plan that Kerry was going to unleash to contest the previous election? There will be no real change under any Dem president, because to even reach the White House they have to be on board with the ruling elite's control or they wouldn't even sniff it. At best we will get some pittance of change in the form of a plan that is saturated with window dressing so that a percentage will actually believe that something has been done, a percentage will be happy that they just have something to back up their argument that the "Hope" was real and valid, and the rest of us will know that nothing was really changed for the betterment of the people. People need to wake up. The election of Bush , I believe, was an open show of power that the people in charge can really do whatever they want. No party, Dem or Pub, would run a candidate out there that was so obviously and grossly unqualified to be President unless they knew that they could do whatever they wanted with little to no repercussions because the election was already bagged and bought and paid for. The Supreme Court travesty was just a furtherance of the show of total power. Then they proceeded to rape and pillage to the point where there was just enough suspicion and outrage among the general populace that things were getting mildly uncomfortable for them, and then they throw us a bone. And people were so hungry they either accepted the bone willingly, or convinced themselves it was actually a porterhouse steak. The truth is we still got boned.

[davidpdx]

58. Great article, makes you really think about what is going on

with banking reform. Now is not the time to screw around. We need to get going on pushing it through.

I posted this on my Facebook page.

[Baikonour]

59. As a Silicon Valley native...

I find the president's remarks silly and almost insulting. The California economy is in shambles. Capping the wages of people trying to get us out of this slump with a new tech boom is not the best of ideas. Wall Street? That's different.