Editorials

There was a small traffic jam on Gayley Road on Friday just before noon, like a miniature version of the big tie-ups when pop stars are playing the Greek Theater. I’m not sure of the cause, but it’s tempting to believe that it was because a big crossover star was on the bill at the Haas Business School. That’s crossover between academia and journalism—Paul Krugman, today’s top poster boy for intellectual types who are deeply worried that the United States is seriously, perhaps terminally, ill. Krugman, both a New York Times columnist and a Princeton economics professor, told the overflow crowd at his noon lecture that his own favorite columnist quote was from Molly Ivins: “What I hate most about the Bushies is that they make us feel like paranoid conspiracy theorists all the time.” In the audience, we roared our approval of that one. We are all getting tired of feeling paranoid, it’s true. 

Krugman’s talk was sponsored by the UC School of Journalism, so he was introduced by its dean, Orville Schell, who described the speaker as plain-spoken. Krugman is indeed blunt, but he’s blunt in a very clever way. He gave his standard stump speech at UC, honed to perfection from a long book tour on behalf of his latest release, “The Great Unraveling: Losing Our Way in the New Century.” Like all popular professors, he’s got his lecture down pat, so it’s easy to take notes in outline form. Former Chronicle columnist Lewis Dolinsky claims to have heard it three times, including all the same jokes, but, he says, “I laugh at them every time”.  

It’s whistling-past-the-graveyard gallows humor, for sure. The scariest bullet point is that the U.S. economy, because of the massive deficits created by the Bush administration, is headed for an unprecedented crisis, what he calls “the big crackup.” At present the U.S. is taking in only about 75 percent of what it spends. That contributes to a debt snowball which is heading for a deficit of at least $550 billion each year, give or take $50 billion.  

So why doesn’t anyone do anything about it? The bond markets, he says, are simply “in denial.” 

Krugman thinks that the U.S. will eventually have a “Wile E. Coyote moment,” named for the character who chases the Road Runner in cartoons. Like the Coyote, investors will run headlong over a cliff, then look up and try to backpedal furiously, but will end up crashing all the same. When will this happen? “The U.S. will have a Wile E. Coyote moment at exactly 3 p.m. on May 30, 2008,” says Krugman jocularly, though he admits he doesn’t really know. 

He says that K Street (traditionally the location of lobbyists’ offices) and Pennsylvania Avenue have merged under Bush, so that there’s no policy anymore, just politics. The lobbyists have moved into the White House. 

He compares the administration’s selling of their tax cuts to their selling of the war against Iraq. Both, he says, used similar dishonest tactics. First, the ostensible rationale keeps changing. The tax cuts were originally supposed to return the surplus to the taxpayers. When the surplus suddenly evaporated in 2001, they were sold as the answer to the slowdown in the economy. But, he points out, a $500 billion deficit should produce 10 million average worker’s jobs, and instead Bush will be the first president since Hoover to end his term with a net job loss.  

Also, both the tax cut and the war were sold under false pretenses. The Treasury Department’s tax modeling program clearly showed from the beginning that most benefits will go to a few people at the top of the income chain, and that budget surplus projections were lies. But the administration no longer discloses the results from running the model, though some think tank economists outside government still have access to it. 

Most of the information needed to understand such deceptions is in the public domain, Krugman says. He’s made a rule for himself not to use “insider stuff,” just data available to anyone. Anyone could predict what was going to go wrong in Iraq by reading the foreign press, he says. 

There’s a lot more to his spiel, and it’s terrifying. Asking people around Berkeley this weekend, though, I was surprised to learn that many well-read political people haven’t yet heard about Krugman’s crusade. He’s gone, in three years, from a free market capitalist, almost a neo-liberal, to a neo-Nostradamus, but he’s done it on the op-ed page of the New York Times, and not everyone reads the Times. Since he started his book tour, he’s been on television and radio, so that new people (a checker at Andronico’s, for example) are finally catching his message.  

Why hasn’t his analysis appeared much in other media? Krugman believes that parts of the media, e.g. Fox News, are just components of the administration’s propaganda machine. The rest of the press and media want to be objective, he says, but that’s hard, so they settle for being even-handed, which is not the same thing. He jokes that some papers, when confronted with claims that the earth is flat, would run the headline SHAPE OF EARTH: VIEWS DIFFER.  

When Krugman first started writing for the Times, during the 2000 presidential campaign, he went “from puzzlement to outrage” as he heard what Bush and his allies were saying, but the paper wouldn’t let him use the word “lies” in commenting on it. In the question period J-School faculty member Cynthia Gorney, who used to work for the Washington Post, asked why “lies” was forbidden. He said it was Howell Raines’ decision, a desire to be “gentlemanly.” ( He thinks Raines was “unfairly vilified,” nevertheless.) The Times lets Krugman say anything he wants these days.  

He reports that he’s seen other organizations and journalists get “aversion therapy” from people they’ve criticized, and back off. Paul Krugman is the best argument there is for the academic tenure system. His ace in the hole, he admits, is that he can always go back to being a professor, if journalism gets too uncomfortable.  

Becky O’Malley is executive editor of the Daily Planet.