E-mail a friendPaul Krugman
airdate October 10, 2005
Called 'the Mick Jagger of political/economic punditry,' Paul Krugman is an economist, college professor and Op-Ed columnist for The New York Times. He's a professor at Princeton and has taught at Yale, MIT and Stanford. He's also been a consultant to the World Bank, International Monetary Fund and the U.N. and, during the Reagan administration, served on the Council of Economic Advisers. Krugman has won numerous awards and is the author/editor of 20 books and more than 200 professional journal articles.
Paul Krugman
Tavis: Perhaps more than any prominent columnist in the nation, Paul Krugman of the 'New York Times' has been writing extensively about the issues raised in the aftermath of Hurricane Katrina. Issues of class and race and the unprecedented reconstruction effort that lies ahead. In today's edition of the 'New York Times' he asks the simple but provocative question, 'Will Bush deliver?'
In addition to his work for the 'Times,' Paul Krugman is a prolific author and professor of economics and international affairs at Princeton. He joins us tonight from Princeton. Professor Krugman, nice to have you on the program, sir.
Paul Krugman: Great to be on.
Tavis: Let me jump right to today's piece, because a lot of people are talking about what you wrote today. Let me offer a quote from what you wrote. "Since the administration is already nickel-and-diming Katrina's victims, it is a good bet that it would do the same with reconstruction. That is, if reconstruction ever gets started.' Close quote.
So one, you raise the question of whether or not we really are ever going to see a reconstruction. And if in fact we do get reconstruction under way, you don't have any faith or hope that the resources to support it are going to be there?
Krugman: That's right. I mean - what is happening right now reminds me a lot of the atmosphere in the first couple of weeks after 9/11, when everyone was talking about how we are going to have a huge effort on Homeland Security, how we are going to have - this is the end of Bush the conservative, that we are really going to see a lot of government intervention, and of course a lot of aid to New York. And the aid to New York - did not really arrive. There were what people thought were clear promises that were not honored.
The big spending on Homeland Security, toughening the chemical plants and so on never happened. And I think - we really should ask, especially given what we have seen about how the victims have been treated just in the past six weeks, we should ask ourselves how sure are we that, you know, Bush gave a speech in Jackson Square and said we are going to do an unprecedented effort. Well, you know - he's made speeches like that before. What makes us so sure that this is actually going to happen?
Tavis: What you just offered, professor, is more than a mouthful. Let me take what you just said and break it down in three or four parts if I might, give you a chance to expound on each one. First of all, what you have intimated a moment ago is that you believe the President, where these matters of national - crisis is concerned, has a pattern of reneging on his promises. Let's talk about the reneging part of - the case you make today.
Krugman: Well, okay. New York, remember those first couple of days after - when the President finally showed up in New York and he told New York's representatives, he said, according to Chuck Schumer, the Senator from New York, he said New York has a blank check. And then a few months later when the first bill of money for Homeland Security and reconstruction came out, there was nothing like what Schumer and other people from New York thought they had been promised. And it quickly devolved into a sort of fighting for every dime.
The budget director said, you know, just a few months after 9/11, started attacking New York politicians for what he called 'money grubbing games.' The - open hearted generosity sort of quickly disappeared. And also on Homeland Security, there was talk that we are going to spend a lot to protect the nation, and this one I actually checked, just November 6th, 2001, a bipartisan delegation of people from Congress came to Bush to say, 'Here is what we need to do to protect the country.' And Bush said it is too much money and we're gonna spend this much, and if it's a dollar more, I'm going to veto it.
So all of that talk about everything changed on 9/11, it didn't. Now we have a catastrophe that is even bigger, but in terms of the agenda - the no terrorists and so on, so I have no reason, I think we have every reason, put it this way, to have no faith in promises that there is going to be a really generous reconstruction.
Tavis: All right, that's the reneging issue that you raised in your piece today. One of the other issues you raised in the piece, my phraseology here, you essentially raised the question, 'Where is the plan?' You made the case that there is no reconstruction czar, there's no commission, as yet no public hearing. So where is the plan?
Krugman: Yeah, I mean - look, nobody expects the bulldozers and cranes to be at work already. - In fact it shouldn't be. We should have a careful, think very carefully. This is - a huge undertaking, if we do it right. And it should be carefully planned. But there is no sign of movement. Where's the discussion? Where - are the hearings?
Who is in charge? - We had what appeared to be a credible report from my newspaper that Carl Rove was in charge, which - wasn't very encouraging in the beginning, and now we have the White House Press Secretary saying, 'Oh, that was never true,' and people said, well, who is in charge? And they said, well, the President, that's not good enough. We need somebody - we need there at least some clearly defined lines of authority in developing a plan. And there is no sign that anything at all is happening.
Tavis: The other issue that you raised that I found rather interesting and provocative, was this notion of White House strategy; specifically Bush White House strategy. You make the case that on issue after issue after issue, what we get out of this White House are a bunch of grandiose statements, but not a lot of follow through, not a lot of action. I love the line you use where you suggested, quoting someone else, 'Don't just do something, stand there.'
Krugman: Yeah, look at - this is very important - there are a lot of - when - we have a government of people who really don't like the role of government, who really want to roll back the legacy of Franklin Delano Roosevelt. Now, they can't do that directly. They just found that out on Social Security. When you actually directly attack a program that people care about, then people say hey, no - we like those, we like the institutions that FDR built. But there is a lot you can do by just letting things slide.
And as fact, you can often do things by saying we are doing something and then sort of the not delivering. So - minimum wage. Now, you cannot cut the minimum wage. No one would stand for that. But you can fail to raise it while inflation proceeds, and in fact the minimum wage has been steadily declining in terms of what it actually buys. Healthcare, to actually, you know, cut back on Medicare, Medicaid, well, certainly Medicare, you can't do that.
But you can do nothing while the private sector healthcare system, while health insurance gradually collapses for the American public. And this is - saying - not doing a big reconstruction after Katrina would be way of - implementing the goal of really having government do less to help ordinary people.
Tavis: You are, as I mentioned earlier, one of the most prominent columnists in the country. That said, with all due respect, writing a column is the easy part. Any of us can write a column. I guess the more difficult part is somebody figuring out how the government meets its responsibility where the money is concerned. So let's set the columnist hat aside for a second, and put on your economist hat, professor of economics at Princeton. How should, how would the government go about paying for this anyway?
Krugman: Well look - we need more tax revenue than we're bringing in. It's not the solution to everything, but we need more tax. We need more money coming in. We have got now, the government is taking in, in total revenue, considerably less as a share of the national income than it was just a few years ago, thanks to the - Bush tax cuts. And in particular, the taxes, the payroll tax, which is the biggest tax that most people pay, is near record highs.
But other taxes, the tax rate if you were a multi-millionaire is close to record lows for several decades. So we need more money. This is going to be - we have new obligations. We do in fact have to, I don't know if we will, but we ought to be rebuilding after Katrina, we have got this war which is not going to go away right now. We have a hugely expensive though ineffective prescription drug benefit that is about to start in 2006. We need more money. Somebody has got to stand up there and say look, we had tax cuts we couldn't afford.
Tavis: Another quote I want to get to in the two minutes I have left here, is a quote that you - comes from one of your pieces a few weeks back, that again, I found fascinating. I quote here, "But in a larger sense, the administration's lethally inept response to Hurricane Katrina had a lot to do with race. For race is the biggest reason the United States, uniquely strong, uniquely among advanced countries, rather, is ruled by a political movement that is hostile to the idea of helping citizens in need.' Clearly, you think that race and class play a major part of the aftermath of this hurricane?
Krugman: Yes, we have a downsized, compared to any other advanced country, we have less of a social safety net. We just do less to protect the poor. We are actually the only major advanced country in which healthcare is not a basic right. And you ask, how is that possible? You know, we are a rich country, why don't people vote for it. And the answer in large part is that in most advanced countries, when people think of someone unfortunate, someone poor, they say 'There but for the grace of God go I.'
And here in the United States they say 'Oh, it's one of them.' I mean, it's a harsh thing to say, but it's true. If it wasn't for the racial divide, if it wasn't for the fact that people think of those in need as being people with a different skin color, although often it's not even - true, we would not be such a harsh, such a cruel society as we are.
Tavis: Some would say though, right quick, that that logic flies in the face of all the charity, all the donations that we - saw come after Hurricane Katrina.
Krugman: Look, there are many - Americans are good people, and there are many individuals who will - you know, provide - do whatever they can. And there has been a lot of charity, but there is no substitute for government action when it comes to the big stuff. When it comes to rebuilding; when it comes to an instance from post Katrina.
Right now, the Bush administration is refusing to provide housing vouchers for people to be able to afford to rent places to those who were not receiving housing aid before Katrina. We just had a large number of people's homes have just been destroyed. I don't think in any other advanced country this would happen. And it is because, ultimately it's because many of those people are a different color.
Tavis: Professor, nice to have you on the program. All the best to you.
Krugman: Thank you.
Tavis: Up next on this program, country music star Clint Black, stay with us.
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