Mr. Krugman's Science, Part 3

In a way, a traditional liberal like me must ask himself, why criticize Paul Krugman?  Mr. Krugman, after all, is the most ostentatiously liberal public intellectual in America.  His blog is entitled "The Conscience of a Liberal."  I don't know what that means, exactly, but it sounds deeply ethical and caring.  I guess.  Maybe just a touch sententious, actually.  Well, okay - a lot sententious, but this comes with the territory of his self-appointed role as guardian of the American welfare state. Someone has to protect it from the Grover Norquists of the world, doesn't someone?

Ay, there's the rub.  I think that's why American liberalism is beginning to break down into factionalism.  It used to be much clearer what you ought to believe as a liberal.  Sitting around dinner tables with my peeps as I traversed through adulthood, I already knew what every person at the table believed, and they knew what I believed.  We were all for the same Good Things, were we not?

Then one day we looked up from the miniscule portions of a California-cuisine dinner arrayed on a plate festooned with artistically arranged glazes of food coloring to notice that Planet Earth had been destroyed, and that we, as humans, had destroyed it. And when all was said and done, the main driving force behind this destruction was overpopulation and overuse of Earth's resources, both of which were potentiated by modern technology.  The great enemy of our viability, in other words, was the sheer size of our enterprise and the energy-using intensity of our economy.

In other words, Big Government Liberalism, which depends upon a centralization of power and distant control of our lives (with the voting populace reduced to voting based on Pavlovian reactions to media-created images), increasingly appeared as one of the manifestations of the Underlying Problem, along with globalization, monopolies, and giant concentrations of power in medicine, energy production and agribusiness. all of which are bound up in a synergistic and symbiotic combination.

Then we began to get sick of the whole thing.  So much for liberal unity of purpose.  The right wing, on the other hand, is fundamentally connected by a shared apocalyptic vision, that this life is essentially an audition for the Life That Counts, so who cares if the Earth is trashed?  What global warming?  Et cetera.  The siren call of religion is easy to understand: once you free yourself from the restraints of Reality, anything can be believed.  As the White Queen told Alice in Through the Looking Glass, she could "believe six impossible things before breakfast."

Mr. Krugman, for whatever relevance he may still have, is probably not aware that times have passed him and his Conscience by.  He seems, in general, to have a hard time staying current.  In recent months has has divulged that he was not aware until very recently that automation posed a threat to American labor, and before that he let out that he was ignorant of the connection between consumer spending in America before 2006 and the inflating housing bubble.  Other thinkers, such as Kevin Phillips, had written entire books on the subject: the American "consumer economy" was sustained by the process of cash-out refinancing, flipping houses, equity lines of credit and the like, and left only with their flatlining incomes, Americans could not keep this joke of an economy going.

You'll never convince Dr. K of that.  In a recent blog: 

"I know that this is a conclusion many people hate. They really, really want to believe that bad things must have good causes — that if you are suffering from high unemployment and low output, it must be because there is something deeply wrong, probably the fault of liberals. But what was deeply wrong with the US economy in late 2008 that wasn’t true of the US economy in late 2007? Recessions happen, and any halfway plausible story about how they happen is likely to suggest that non-fundamental government interventions, like printing money, can make things better."

As Dr. Evil said:  You just don't get it.   The same things are wrong with the American economy in 2013 as were wrong with the American economy in late 2007 and 2008.  "Recessions happen." For this you need a Ph.D?  Contrast this with Mr. Phillips and his analysis written back in 2006, before "Lehman Brothers" and the other great signifiers used by Monday Morning Quarterbacks such as Mr. Krugman: 

...the underlying Washington strategy… was less to give ordinary Americans direct sums than to create a low-interest-rate boom in real estate, thereby raising the percentage of American home ownership, ballooning the prices of homes, and allowing householders to take out some of that increase through low-cost refinancing. This triple play created new wealth to take the place of that destroyed in the 2000-2002 stock-market crash and simultaneously raised consumer confidence.

 Nothing similar had ever been engineered before. Instead of a recovery orchestrated by Congress and the White House and aimed at the middle- and bottom-income segments, this one was directed by an appointed central banker, a man whose principal responsibility was to the banking system. His relief, targeted on financial assets and real estate, was principally achieved by monetary stimulus. This in itself confirmed the massive realignment of preferences and priorities within the American system….

Likewise, huge and indisputable but almost never discussed, were the powerful political economics lurking behind the stimulus: the massive rate-cut-driven post-2000 bailout of the FIRE (finance, insurance, and real estate) sector, with its ever-climbing share of GDP and proximity to power. No longer would Washington concentrate stimulus on wages or public-works employment. The Fed's policies, however shrewd, were not rooted in an abstraction of the national interest but in pursuit of its statutory mandate to protect the U.S. banking and payments system, now inseparable from the broadly defined financial-services sector.

 The top-down central control of the American economy, guided by the Federal Reserve, is what Mr. Krugman explicitly advocates.  It is Krugman's firm belief that there is nothing standing in the way of recreating the exact conditions that prevailed in late 2007 other than our unwillingness to print the money necessary to "take up the slack" in the economy created by the bursting of the housing bubble (by reinflating that bubble and engineering a stock and bond bubble to go with it).  It is this unabashed pimping for a status quo that has come and gone, and that increasing numbers of people recognize is ecologically ruinous, that makes Mr. Krugman's polemics so unappealing, whether we're always aware of it or not.  He's rich and prominent, so the status quo works for him.  It weighs a little more heavily on the Consciences of other humans.