Krugman: Fox Business crew "aren't really pro-business; they're pro-Republican"
November 12, 2009 9:06 am ET by Media Matters staff
From Krugman's November 11 New York Times blog post:
Clearly, the Fox Business crew is having a very hard time. They bill themselves as being truly pro-business - not like those leftists at CNBC. But they aren't really pro-business; they're pro-Republican. They'd like you to believe that it's the same thing; but there's this awkward fact that markets have, you know, gone up under Obama.
And this isn't just a phenomenon of the last few months. Look back at stock returns under recent presidents, which is easy using a clever gadget at Political Calculations. Taking real, dividend-inclusive annual returns on the S&P 500, I get:
Reagan: 10.08%
Bush I: 10.16%
Clinton: 14.35%
Bush II: minus 5.81%Tax-hiking Democrats are supposed to be terrible for business; I mean, Norman Podhoretz whines that Jews should be conservatives because Republican policies are better for the economy. But the data just refuse to say that - and that's even if we restrict ourselves to the stock market, never mind job creation, wages, poverty and all that.
So the whole idea of Fox Business is problematic. It's Fox, which means that it's basically an arm of the GOP; but that's a terrible match for business coverage, because the economy just refuses to punish liberals and reward conservatives the way it's supposed to.
I gather that Fox Biz has managed to push up its morning ratings by hiring that great financial guru Don Imus. But that sort of proves the point; Fox Business can get viewers, but only by turning itself into ... Fox News.
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A conservative Congress held budget growth to just over 1 percent and there were moderate tax cuts spurring investment and the dot-com bubble. Results was billions in suprlus. Krugman conveniently forgets this.
Don't forget a stimulus passed by Al Gore's tiebreaking vote in 1993 and very little growth occured over the next couple years it had virtually no effect.
Bush 1 was talked into tax increases as well, which made a mild recession a little worse.
Many variables to consider, but don't expect that from a blind partisan and washed-up theorist like Krugman.
no money to pay for two wars
the deficit was near tripled
and the budget surplus was turned into a budget deficit in 6 months.
yeah clinton did a terrible job.
i would be careful throwing around "washed up theorist" and "blind partisan" since that could easily be applied to yourself as well.
Lets not forgot who was complicit in the tax cuts, Republican in Congress! The same ones who are screaming about the deficit.
i mean neo cons are hypocritical on a daily basis so whats the point
You must be watching your reflection in the screen of your monitor as your write this and projecting your short-comings onto Krugman.
normally i would mention the fact that krugman got the economics prize but i didn't feel like wasting my breath cause i knew what he would counter with.
Back in February, Krugman was throwing blame and Obama and the Dems for not pushing for a BIGGER stim.
Krugman seems to NOW understand the political landscape that Obama & Dems are playing in whereas he did not take that into account earlier.
Fast forward to today - unemployment is rising, things are stagnant with regard to job growth (actually still losing jobs, but not as many as we were), but the bank's confidence has returned, money has returned, and they are spending more to lobby the government than they ever have in the history of their existence despite some of them being zombies. Krugman was pushing Obama because he knew these things would happen once things turned around. Obama was soft on the banks, and he was soft on the stimulus. $400 billion for tax cuts which amounted to an extra $20 in a 2 week pay check for every American? What a complete waste - that $400 billion could have went to projects that would have created jobs. Krugman was pushing for a $1.2 to 1.4 trillion dollar stimulus that Obama could have got if he wanted it.
Think about it - why is the economy and markets somewhat stabilized right now? It's because of the massive government intervention. It's because of the relief the stimulus bill gave to local and state governments and the unemployed. It's because the Fed has pumped in 4 trillion into the economy and lowered the interest rates to near 0. But growth and job creation is not there. We did just enough to stabilize things but not enough to push us over and tip the scale toward improving the economy.
Had Obama came to the Congress with a 1.2 trillion stimulus that was mostly state government relief, unemployment benefits, and spending to create jobs he could have eventually gotten it passed. If it failed on the initial vote then he could have let things deteriorate even further until Congress was forced to pass it. That was the period where he had supreme bargaining power. Instead Obama simply catered to the Republicans on the stimulus and put in all the $400 billion in tax cuts (and limited the size to $715 billion total) just to win 3 Republican votes. 3 votes for all that - he didn't have to do that if he just played the cards right and made sure that the stimulus they passed was the right one. If they had not passed his stimulus then let them sit through another month where the job losses reported are 700 or 800 thousand... that'll get Congress to work on passing something to stop the pain.
Now Obama is dealing with the consequences that Krugman predicted he'd have to deal with. This current situation is one where we need more money and more spending on jobs, but it doesn't seem politically possible to pass more stimulus now because all the conservatives are deeming the stimulus a failure because it didn't create 7 million jobs overnight. Maybe Obama will still be able to pass something and not call it a stimulus, but it should be beyond question that something needs to happen to jump start the economy from stagnation into full scale growth. It's not going to fix itself quickly but it will fix itself over many many years ruining millions (financially) in the process.
Krugman is NOW getting more attention and should have been more forceful to provide cover for Obama & Congress back in Feb/March.
If you read more recent Krugman columns, you start to get the impression that he understands U.S. politics and our legislative system make it very, very difficult to pass this type of thing.