Sunday, October 26, 2014

Paul Krugman: "Obama has emerged as one of the most consequential and, yes, successful presidents in American history."

By Robert Wenzel

Paul Krugman is out with an essay at Rolling Stone on President Obama. It is only one note short of being a full hagiography.

If one were to show the essay to any well-read person, without any indication that the piece was published by Rolling Stone and written by Krugman, the person shown such piece would most certainly guess the paper was a rushed work by an over enthusiastic high school freshman, with above average potential to become an eventual high school geography teacher.

There is no indication that the author of the paper has any
deep understanding of history or economics. There is certainly no indication that the paper was written by a Nobel prize winning university professor.

Krugman tells us in the essay:
Obama has emerged as one of the most consequential and, yes, successful presidents in American history.
His evidence for this claim? Obamacare.

Krugman claims it is a success because:
[M]ultiple independent surveys show a sharp drop in the number of Americans without health insurance, probably around 10 million, a number certain to grow greatly over the next two years as more people realize that the program is available and penalties for failure to sign up increase.
This, indeed, has been a constant theme of Krugman's in his NYT columns, that X number have signed up for Obama that previously didn't have insurance., and thus Obamacare is a success.

But shouldn't the measure of success be how well Obamacare is in delivering healthcare, not  how many have signed up? I may declare that I am going to give everyone in the world a million dollars, who emails me their address, but the measure of success of my million dollar program should't be how many sign up for the program, but how well I deliver on the promise to pay everyone who signs up for a million dollars. And this is where Krugman's declaration that Obamacare is a success makes no sense.

It is only over time that we will see how well that Obamcare delivers on its promise to deliver quality healthcare. But further, any half-way decent economist will tell you that central planning, and Mussolini-type central planning of healthcare is exactly at the essence of Obamacare, is a terrible structure to create efficiency, increased productivity and overall improved delivery of products and services to consumers. In other words, Krugman is ignoring they basic fundamentals of economics, taught to us by such greats as Ludwig von Mises, Friedrich Hayek and Murray Rothbard, about the necessity of failure of central planning structures, He is declaring victory for Obama simply because Obama has signed people up for a medical structure that economic theory tells us will be a failure!

Also note that Krugman appears to approve of the coercive nature of Obamacare, when he writes that the number of signees for Obamacare will climb further because of penalties that will be levied against those who fail to sign up. Note to Krugman: Coercion is never an indication of a great and wonderful regime, from the perspective of those being coerced.

Krugman also delivers some praise for the work done by Obama in the area of bank regulation that followed the 2008 financial crisis. But, he does this by never once addressing the ultimate cause of the crisis, Federal Reserve manipulation of the money supply. (SEE: Austrian School Business Cycle Theory.)

Most curious, Krugman declares that a recovery, albeit slow, has been occurring:
[W]e should note that things could have been worse. In fact, in other times and places they have been worse. Make no mistake about it – the devastation wrought by the financial crisis was terrible, with real income falling 5.5 percent. But that's actually not as bad as the ''typical'' experience after financial crises...: Recovery has been slow: It took almost six years for the United States to regain pre-crisis average income. But that was actually a bit faster than the historical average.
Does this mean Krugman is admitting that his 2012 book, End This Depression Now!, where he starts the book by writing:
This is a book about the economic slump now afflicting the United States and many other countries---a slump that has entered its fifth year and that shows no sign of ending anytime soon.
was way off base?

Krugman is a little better in his analysis of Obama foreign policy and the national security state  but his recounting of recent history, incredibly, seems to ignore multiple ground battles by US troops.

Here's what he gets right:
I do, however, need to address one area that has left some early Obama supporters bitterly disappointed: his record on national security policy. Let's face it – many of his original enthusiasts favored him so strongly over Hillary Clinton because she supported the Iraq War and he didn't. They hoped he would hold the people who took us to war on false pretenses accountable, that he would transform American foreign policy, and that he would drastically curb the reach of the national security state.
None of that happened. Obama's team, as far as we can tell, never even considered going after the deceptions that took us to Baghdad...and he has defended the prerogatives of the NSA and the surveillance state in general.
But then he oddly writes:
On overall foreign policy, Obama has been essentially a normal post-Vietnam president, reluctant to commit U.S. ground troops and eager to extract them from ongoing commitments, but quite willing to bomb people considered threatening to U.S. interests.
For sure, Obama does appear to reluctant to commit US ground troops, but is this "normal post-Vietnam" presidential action.

Is Krugman not aware that George Bush I committed ground troops to  Panama ans Iraq. And that George Bush II committed ground troops in even more aggressive manner, again in Iraq and in Afghanistan?

Overall, the Krugman essay is devoid of deep understanding of economics. Further, it appears to be written in such a hasty manner that it somehow failed to take into account numerous post-Vietnam actions by US ground troops. But, if this paper were written by a high school freshman, one could say there is a glimmer of hope for the student, since in the closing there is an indication of  the capability of independent insight, certainly not Nobel Prize worthy, but a streak of sound independent thinking, since his closing paragraph does include this very astute observation:
[F]or all his anti-government rhetoric, Reagan left the core institutions of the New Deal and the Great Society in place.
Krugman seems to get Obama almost completely wrong, but he sure knows how to spot the lefty in Reagan--and for that Krugman can be a useful limited tool for those of us who believe the state has been on an unending expansionary mode. Yes, even during the Reagan years.

Robert Wenzel is Editor & Publisher at and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics


  1. I again submit that Krugman has no familiarity whatsoever with basic Austrian concepts and analysis. None of them do. This indicates that they are scared to death of us.

    As to Krugman, I'm two years older than he is (23 months) being born in March 1951. EVERYBODY at Michigan State from 1969 to 1973 hated Nixon, the Viet Nam war and the draft. Krugman graduated from high school in 1971 and started college that year. Apparently, those times did not impact him at all (which is almost impossible unless he attended a southern military school) and he seems to have had no political views at all until marrying his current wife, Madame Mao II.

    He's a strange bird.

  2. FWIW, I posted this comment on the RS site. Am I way off base?


    Ok, lets summarize shall we? Maybe with some musical accompaniment: crony bailouts; chaos in Iraq and across the middle east; increased racial tensions in the US; increased tensions with Russia over nothing that concerns us; Ebola and other diseases appearing in the US for the first time in history with the CDC caught with their pants down; the reappearance of TB in a big way; food and energy inflation; increasing income disparity; the disappearing middle class; health insurance in chaos; the utter corruption of the IRS, the DOJ and other federal agencies; the militarization of the civilian Police; the hyper-regulatory State... any more?

    Remind me again which are the good parts? Ok, I get it that in the mind of a Progressive like Krugman, support for Gay Marriage trumps all other issues. And I get that Krugman is down with the crony bailouts since he is official economic adviser to the cronies. But come on. It is definitely beginning to feel like we are living in the Bizarro World of the Superman Comics.

  3. It's hard to see why anyone looking at the economy (aside from financial markets and real estate) would claim that there's some sort of recoverygoing on. The labor force has collapsed and we've replaced many full time jobs with part time ones (due to obama care).

    Equally ironic, is that, looking at a recent chart, posted here at EPJ, if we subtract Texas from the equation (oil boom), we have less jobs now than before the crisis. And we know how much Krugman hates fossil fuels.

  4. For Krugman, who has copped a Nobel Prize, likely made some millions for speeches/consulting, and others like Buffett, yes 'successful' for them, for the rest the 'Obama Years' are an unmitigated disaster (unfortunately, seems to be par for the course anymore for occupants of his office).

  5. White House Says States Can’t Be Forced to Follow CDC
    The Obama administration said it can’t compel state and local officials to follow federal guidelines in dealing with Ebola, leading to a patchwork of responses on the return of health-care workers from Africa.
    Can someone explain why does a state have to obey the fda, then?

    Food and Drug Administration
    The Food and Drug Administration (FDA or USFDA) is a federal agency of the United States Department of Health and Human Services, one of the United States federal executive departments.

    Centers for Disease Control and Prevention
    The Centers for Disease Control and Prevention (CDC) is the national public health institute of the United States. The CDC is a federal agency under the Department of Health and Human Services

  6. I've encountered a number of people lately who have insurance, need medical care for an ongoing problem, but can't afford the high co-pays and deductibles. So they don't go.

    A few years ago the average person without insurance might not have been able to afford medical care that costs a few thousand dollars for a minor procedure. Now they have insurance but don't afford a few thousand dollars for the co-pays and deductibles which have to be paid upfront. So what's the difference?

    The standard for success is access to care, not access to low value insurance.