President Obama has tried — desperately, and far beyond the point at which it made any kind of sense — to reach across the partisan divide in the United States. He has bent over backward to be nice to bankers. He has clearly been uncomfortable with any kind of populist rhetoric, although that may finally be changing.
And his reward for all this is that Mitt Romney, the former governor of Massachusetts and current candidate for the Republican presidential nomination, describes him as a full-on Marxist: from each according to his ability, to each according to his needs. “[Obama] seeks to replace our merit-based society with an entitlement society,” Mr. Romney said in a recent speech. “In an entitlement society, everyone receives the same or similar rewards, regardless of education, effort and willingness to take risk. That which is earned by some is redistributed to the others. And the only people to enjoy truly disproportionate rewards are the people who do the redistributing — the government.”
Reality just doesn’t matter here — which is why Mr. Obama might as well reach out to his base instead of the unreachable right.
The Long and the Short of It
Olympia Snowe talks nonsense. “Fiscal shenanigans such as permanent tax increases to pay for one-year temporary measures are precisely the problem that drove our nation into a $15 trillion debt crisis,” the Republican senator from Maine said in a statement earlier this month, in response to a new bipartisan jobs-creation bill.
Actually, it’s nonsense on multiple levels. A nation that can borrow at negative real interest rates isn’t exactly facing a debt crisis. We do have a $15 trillion debt in the United States — but that debt reflects a combination of (1) permanent tax cuts, not paid for at all (2) large temporary spending on wars, not paid for at all, and (3) a severe economic crisis, which has depressed revenue (mainly) and required some emergency spending (which accounts for only a small piece of the debt).
And another thing: Short-term outlays offset by long-term austerity is precisely what macroeconomics 101 says you should do when faced with a depressed economy. It’s not “shenanigans”; it’s orthodox macroeconomics and the height of responsibility.
All this gives me an occasion to say more about something that comes up fairly often both in comments here and in attacks from the usual suspects: Why did I criticize President George W. Bush’s deficit-increasing policies, then call for more deficit-increasing policies from Mr. Obama?
Part of the answer is the difference in economic conditions. Deficit spending is expansionary when the economy is in a liquidity trap; it does nothing but crowd out other spending when you’re not up against the zero lower bound.
The other part of the answer is that although the Bushies were happy to use Keynesian arguments to justify their tax cuts, those cuts were all designed to be permanent — that is, they were irresponsible precisely because they weren’t temporary. Nothing of what Mr. Obama has done commits that sin: his long-term spending, basically on health reform, is paid for, and everything else, like aid to state and local governments or expansion of unemployment benefits, was both designed to be temporary and has proved temporary in reality.
Ah well — just another day in political Bizarro World.
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Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008.
Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including “The Return of Depression Economics” (2008) and “The Conscience of a Liberal” (2007).
Copyright 2011 The New York Times.
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