Paul Krugman Misreads the Political Situation, I Think

Paul Krugman writes:

The Obama Agenda: It’s feeling a lot like 1992 right now. It’s also feeling a lot like 1980. But which parallel is closer? Is Barack Obama going to be a Ronald Reagan of the left, a president who fundamentally changes the country’s direction? Or will he be just another Bill Clinton?... [T]he odds are that this will be a “change” election — which means that it’s very much Mr. Obama’s election to lose. But if he wins, how much change will he actually deliver?

Reagan, for better or worse — I’d say for worse, but that’s another discussion — brought a lot of change.... America at the end of the Reagan years was not the same country it was when he took office. Bill Clinton also ran as a candidate of change... portrayed himself as someone who transcended the traditional liberal-conservative divide, proposing “a government that offers more empowerment and less entitlement.”... The Clinton administration achieved a number of significant successes, from the revitalization of veterans’ health care and federal emergency management to the expansion of the Earned Income Tax Credit and health insurance for children. But the big picture is summed up by the title of a new book by the historian Sean Wilentz: “The Age of Reagan: A history, 1974-2008.” So whom does Mr. Obama resemble more? At this point, he’s definitely looking Clintonesque....

[F]or Democrats, winning this election should be the easy part. Everything is going their way: sky-high gas prices, a weak economy and a deeply unpopular president. The real question is whether they will take advantage of this once-in-a-generation chance to change the country’s direction. And that’s mainly up to Mr. Obama.

Reagan had ideological majorities in both houses of congress throughout his presidency--remember the "boll weevils"? Clinton did not even have ideological majorities in his first two years.

Yet Reagan's conservative achievements were remarkably limited:

• A tilting of the tax code to redistribute income to the rich

And were more than offset, IMHO at least, by his major liberal achievements:

• To end the Cold War by trusting Gorbachev's good faith--in spite of everything the Republican foreign-policy establishment and the wingnut ideologues could throw in his path to try to stop them.
• To cement the government's entitlement-spending role as provider of a mind-bobbling amount of primarily middle-class social insurance: Social Security, Medicare, and Medicaid as we know them.

And then there were Reagan's "achievements" that were simply stupidities:

• Arming Iraq to fight Iran and at the same time arming Iran to fight Iraq
• Letting Menachem Begin and Ariel Sharon off their leash to launch their "Peace for Galilee" invasion of Lebanon
• Wasting a fortune on a military buildup just as the Red Army was atrophying
• Slowing American economic growth via the drag put on the economy by his huge budget deficits.

The true history of the U.S. since 1980, IMHO at least, is not Sean Wilentz's "Age of Reagan" but is instead composed of a half dozen or so deeper and broader tides, like:

1. The end of the Cold War
2. Other winner-take-all factors that have, in combination with education, pushed American income polarization back to Gilded Age levels.
3. The failure of American taxpayers to support their state and local governments in expanding funding for public education--and the impact of reduced public education effort in sharpening the distinction between rich and poor.
4. The computer revolution in productivity growth.
5. The rise of China (and soon, we hope, India) as industrial powers.
6. The extraordinary social liberalization of America--if you had told any Republican in 1980 that 2008 would see (a) a Negro with an Arabic-Swahili name beating a veteran figher pilot in the presidential polls and (b) gay marriage as the big cultural issue of the day, said Republican would have blown several gaskets. And if you had said that this would have been the result of an "Age of Reagan" said Republican would have melted down completely.

Ronald Reagan (or perhaps Nancy Reagan, her astrologer, and George Shultz--we are not sure how advanced his Alzheimer's was when) played a constructive role in (1). He played a role in amplifying the destructive effects of (2) and (3). His deficits and the reduced investment seen in the 1980s as a result played a role--how large we are not sure--in delaying (4). And he was essentially irrelevant as far as (5) and (6) are concerned.

I think Obama would have a better chance than Clinton or Reagan of being a positive, transformational president if he takes office supported by ideological majorities in the congress. It would, I think, be hard to do as little with his ideological majority as Reagan did with his. (It would be impossible to do as little with his ideological majority as Bush has done with his.) And Clinton never had the chance--think of Sam Nunn, John Breaux, Buddy Tauzin, Bob Kerrey, and the other congressional barons whom Clinton had to deal with in 1993-94 even before Gingrich.

Whether an Obama presidency would see him having an ideological majority in congress is an open question. I think that both John Ellwood and Robert Reischauer are on record as thinking not: that just as in 1993-94 the congressional balance of power in 2009-2010 is likely to be held by the boll weevils...

Comments

[anne]

Nicely argued.

[Steady Eddie]

Krugman's more fundamental mistake is to take such a narrowly framed and dubiously accurate view of what the specifics of a campaign mean for how a President governs thereafter. The greatest change Presidents campaigned on plans of far more limited scope and specificity than their Presidencies delivered, to reassure voters that they didn't intend to be radical. Lincoln campaigned on a non-abolitionist platform of curbing the expansion of slavery into the West and of the slave power's legal reach into the North. FDR campaigned on a New Deal of vague content, with specifics mainly about reducing the deficit. Both responded to the opportunities they had once they were elected, and used their persuasive speaking skills as President to go much further than they had promised in their campaigns.

To take apart Krugman's more recent examples, Reagan's biggest specific campaign promises were to cut taxes and boost defense spending, both of which were popular politically but problematic as policy; as Brad's litany indicates, he was hardly able to do anything lasting in the more radical parts of conservative dogma; his lasting "conservative" legacies were the deficits and right-wing political framing increasingly echoed by the corporate media. Clinton campaigned on health care reform and economic stimulus, and delivered on neither because of his own failures in negotiating philosophy and leadership skills, and a thoroughly dysfunctional Democratic Congress before the Newt Congresses. He re-established the Democrats' credibility as responsible holders of the executive branch, but because of his lousy leadership skills, he did nothing to change the political framing, and his triangulating "give away half the store before you start" negotiating philosophy only made that political framing problem worse.

It's not how you campaign, it's what you do with the presidency once you get there that matters. As Krugman reminds us once again, he's an economist not a historian.

[Anonymous]

Reagan's legacy also includes appointing Scalia and Kennedy to the Supreme Court, and elevating Rhenquist to Chief Justice. These appointments have done as much damage as any of Reagan's other policies.

[M. Dunham]

Is it redistributing income if it starts with the rich and ends with the rich? Wouldn't that just be called "keeping one's income"?

[PaulC]

Krugman: "One thing is clear: for Democrats, winning this election should be the easy part."

Great, then how about we nail down the easy part first? I have a feeling that it may not be as easy as all that.

[Ranjit Mathoda]

Krugman doesn't understand that if Obama gets elected he will have a power no prior President has ever had: an Internet social network at my.barackobama.com that allows him to reach, inform and manage his supporters. I've outlined the idea in an essay called The Coming Digital Presidency, which can be found at http://digitalpresidency.com

[Steady Eddie]

To Anonymous: Considering Rehnquist was already on the Court, that Reagan added O'Connor, and that Kennedy was essentially forced on Reagan after the Senate defeated Bork and Doug Ginsburg withdrew for smoking dope, the damage was far less than it could have been for a two-term President. If you consider that the Bush v. Gore coup was a 5-4 decision that also required Thomas's vote, and that the current right-wing activist Court only arrived after Alito replaced O'Connor, Reagan alone was not nearly as effective in trashing the Court as FDR had been in rebuilding it during his first two terms. It took 12 more years of Republican presidencies to sink as low as we are now.

Dunham -- "keeping one's income"? No, it means not paying one's due to the society that enabled one to be in a position to make and keep that much money. If, as the arch-conservative Churchill said, taxes are the price one pays for a civilized society, then your view of taxes is a pretty good reflection of the level of civilization the current GOP wants.

[bigTom]

I think the real problem for the next president is that he is going to inherit a conjunction of severe national (some global in scope) problems that will severely test the country. Rather than concentrating on the change he would like to accomplish, he is going to be dealing with a collection of severe crisis-es. Among these are financial, energy, environment, and healthcare. If we are unlucky and we are so foolish as to provoke a US Iranian war before he takes office, the list of nasty woes to be dealt with gets even worse. The real test of the next president will be how he can handle a conjunction of severe crisis-es, not well well he can carry out an agenda crafted for normal times.

[M. Dunham]

Eddie -- And what are one's dues? Is 70% civilized enough for the top 20%?

http://www.marginalrevolution.com/photos/uncategorized/2007/12/18/tax_3.png

[Nick Patterson]

"It would be impossible to do as little with his ideological majority as Bush has done with his"

Say what? Bush has at minimum
1) Started an unnecessary war with Iraq
2) Immensely damaged the USA's reputation abroad
3) Seriously damaged the constitution.

He is perhaps the most transformational president of the last 100 years.

[Ken Houghton]

WJClinton campaigned on health-care reform and then let some idiot (I would bet Brad DeLong knows, or could figure out, who) convince him that NAFTA should be his administration's first major legislative priority.

Combine that with realising that an all-volunteer Army the size of the U.S.'s cannot afford to exclude members or it will not be able to function well in wartime--making "Don't ask, don't tell" an imperative--and any chance of enacting the planned "agenda" was gone.

Contrast with RWR's eight years of making things a lot easier for his benefactors and a little (1981) or a lot (1986) worse for the working-class members of the US (referring strictly to tax policy; destroying PATCO probably deserves its own credit for both eviscerating working-class bargaining power AND screwing up infrastructure security).

(We'll leave aside any inclination to argue that the wasted "fortune on a military buildup" sped up the end of the Cold War, since the attendant deficits are documented as having hamstrung the following Administrations, especially that of WJC, in providing aid that would have minimized the pains and increased the speed of transition to capitalism.)

[save_the_rustbelt]

as to

#2 - the mad rush to globalize the economy has done more to push inequality than anything Reagan ever did - and economists will figure this out in about 20 years when it is too late

#3 - having battled the public schools for two decades, no amount of increased spending will compensate for incompetent tenured teachers who show videos three days a week - if you doubt the sway of teachers unions in destroying the schools just Google "Detroit Public Schools"

[Rob]

Thing is Obama is running to the right of where WJC ran in 1992. His health care plan is to the right of what Clinton was hoping for. He has no transformation as big as the BTU tax. He's not even willing to take on something like gays in the military even though the country is much more open 15 years later.

[Fifi]

If Obama gets in the White House, he will have one factor tilted in his favor: the absolute, glaring failure of the Washington establishment. Everything and everyone in Washington have failed over the past 8 years. Not just the Republicans but the whole Washington ecosystem of politicians, lobbyists, journos, think-tankers, business interests, etc. They are stark naked, nothing left to cover themselves with, completely vulnerable to the slightest whiff of accountability.

Washington is a very weakened citadel, its defenders gaunt, fractious and fearsome. It's ready to fall. Pick on some and flaunt their carcass while sparing others in exchange for their unconditional support. That's the kind of conquest that takes few forces but a lot of smarts.

[wood turtle]

Regarding #3. It is very difficult to get school bond issues passed in districts where households with school age children are not in the majority. Sometimes the state has to step in, such as when students are housed in aging schools that have health risks.

I wonder if the declining birth rate would also have an effect on income polarization, as when there is an increase in childless couples when both spouses work.

[rod]

Very well put. I would say Reagan was an overwhelmed and defeated counterforce with respect to numbers five and six. Indeed, it is amazing that as Deng XiaoPing revolutionized China with his capitalist agenda during the entire Reagan Administration the United States did absolutely nothing to take advantage of this miraculous development. As to American culture, it never ceases to stun me that Reagan was so out of touch with every major cultural change in America. What Wilentz is really talking about is the huge disconnect between political power in the United States and what is really going on. But he doesn't say that.

[Fin]

Surprised to see the word "Negro". How old are you?

[dave.s.]

You're missing a big change since 1980, in my view: HUGE increase in undocumented immigrants, who will work for very low wages. Consequences: collapse in the day labor market / auto body shop labor market / meatcutter market for citizens coming out of the dreadful schools, so no road into prosperity for them. This has exacerbated the effects of a lot of the low-skill factory jobs going abroad.

[pireader]

Professor DeLong--

A lot of your post rests on a claim that Reagan had an ideologically-friendly Congress while Clinton faced an unfriendly one.

This seems factually wrong; I'd like to know your source.

My source is Poole and Rosenthal's database of Left-Right scores for each member of Congress. Their median scores for both House and Senate show Reagan facing left-leaning Congresses just as much as Clinton faced right-leaning Congresses.

Maybe Reagan's Congresses weren't as far left as you'd prefer; but it seems silly to say that they were ideologically friendly to him.

[Floccina]

My response to your comments on education:

I think that schooling in the USA is better than it has ever been, even most government bureaucracies improve (or get less bad) over time (although slowly). I think that schooling in the USA is about as good as anywhere in the world. That is not to say that schooling in the USA is good IMO it is not very good.

Schools do not so much educate as the grade people.

I do not think the tests that show Americans doing poorly do not test anything important.

The evidence says that you cannot make people smarter and that if knowledge leaks out. In other words you can heroically raise children’s scores on these silly tests at some point but he will revert in few years.

It seems to me that people all nations fall for the same silly un-scientific falsehoods at similar rates. They are all easy to manipulate due to lack of broad knowledge of science, economics, finance and accounting, history. And I believe that the basic principles of science, economics, finance and accounting, history are simple enough for people with 90 IQs to understand but we do not teach them in schools. But if in schools you focused on drilling these basic principles into people it would be more difficult to grade people (separate the capable from the un-capable).

Perhaps we should judge education (rather that schooling) by the average income/ standard of living of the people in a nation (with an exception perhaps for the petroleum wealthy).

So IMO we should spend less on schooling not more. It is the current cure all that will surely fail.

[travis]

Remember boll weevils?! How about remembering Tip O'Neil! Reagan was constantly fighting the Democratic House. The point about Bush and his majority is correct, though.

Question for Brad: what is the difference for the economy between running a deficit of $X and raising taxes by $X to close the deficit? Aren't both reducing $X of investment?

Off the top of my head, I can think of the following differences:
1) Increased taxes will take away money that would be spent on both consumption and investment. While a budget deficit takes away money largely from investment --though there might be a smallish part that would have been devoted to consumption were it not for the higher interest rates caused by a deficit.
2) A deficit shifts consumption from the future to the present.

Thoughts?

[The Dirty Mac]

#7. Failure to learn one damn thing from the collapse of the Soviet Union.

[The Dirty Mac]

#7. Failure to learn one damn thing from the collapse of the Soviet Union.