The Great Unraveling

>> Saturday, March 7, 2015

Finally got to this one. I realized when I was reading this that I have had this for more than 7 years. At first, I thought it would have been 7 years this summer since I purchased it, but inbetween the pages was my receipt from December 10, 2007 with the purchase price of $6.95 (because it was a used book).

In a way, I was surprised that most of this turned out to still be a good read even though some of the columns/essays within are more than 15 years old. This is the paperback version that has essays from 2003 and 2004 after the initial hardback version was published. I'm glad I have that version because things would feel a little left out without those columns.

I vaguely remember reading a review of this book--I'm pretty sure it was this book and not one of Krugman's other books, which are collections of his New York Times columns--where the reviewer lamented that the columns should have been completely chronological, not divided into smaller sections. I can understand the reviewer's point, particularly since, at the time, the reviewer noted that it could be seen much easier how things were falling to pieces under George W. Bush. But reading this more than 10 years after its publication date, I really appreciated that his columns were sorted by topic first, then published chronologically. Had I read this 10 years earlier I might not have the same opinion, but it's harder to remember all the issues as they happened a decade ago and still follow everything along.

But even still, reading through this you can see how Krugman was right on when spotting things from the get go, such as who Bush was choosing as his economics advisers.

From "The Two Larrys," November 19, 2000:
The point is that Bill Clinton turned for advice to a strong, independent professional economist, who would have been an important player whatever his politics. Mr. Bush has turned to an economist whose career has been entirely associated with his political orientation. And more specifically, Mr. Lindsey's career has depended on the patronage of the Bush family.

So the younger Mr. Bush's decision to elevate Mr. Lindsey above the many Republican economists who do have reputations independent of their politics says something. Not, I think, that Mr. Bush is a fanatical ideologue himself--though Mr. Lindsey is much more partisan than any of Mr. Clinton's economists. Mainly, it says that Mr. Bush values loyalty above expertise, perhaps that he has a preference for advisers whose personal fortunes are almost entirely bound up with his own.
I don't remember Mr. Lindsey, but the "loyalty above expertise" remark is spot on. I can still remember when Bush selected his personal lawyer as a Supreme Court nominee--Harriet Miers--and everyone was just stunned since she would obviously be completely out of her depth on the court and no way would she ever make it out of her confirmation hearing unscathed.

In hindsight, it's unsurprising since we all know now how terrible the Bush Administration was. But tons of people couldn't admit it when it was happening, such as the California energy crisis.
From "In Broad Daylight," September 27, 2002:
But why did energy companies think they could get away with it?

One answer might be that the apparent malefactors are very big contributors to the Republican Party. Some analysts have suggested that the energy companies felt free to manipulate markets because they believed they had bought protection from federal regulation--the conspiracy-minded point out that severe power shortages began just after the 2000 election, and ended when Democrats gained control of the Senate.
Coincidence? I think not. And I think the above paragraph demonstrates why it's essential to have more than one political party.

The Bush Administration didn't care how things happened as long as they could get what they wanted. I can still remember living in Tacoma, and feeling some of the effects from the California energy crisis affecting Washington state. I was lucky that I lived in Tacoma and had electricity coming from a publicly-owned utility, not from a private company such as Puget Sound Energy where some people did have rate increases due to what happened to the South.

But the Bush Administration didn't care about that. From "Delusions of Power," March 28, 2003:
Another answer is that Mr. Cheney basically drew his advice about how to end the energy crisis from the very companies creating the crisis, for fun and profit. But was he in on the joke?

We may never know what really went on in the energy task force since the Bush administration has gone to extraordinary lengths to keep us from finding out. At first the nonpartisan General Accounting Office, which is supposed to act as an internal watchdog, seemed determined to pursue the matter. But after the midterm election, according to the newsletter The Hill, Congressional Republicans approached the agency's head and threatened to slash his budget unless he backed off.

And therein lies the broader moral. In the last two years Mr. Cheney and other top officials have gotten it wrong again and again--on energy, on the economy, on the budget. But political muscle has insulated them from any adverse consequences. So they, and the country, don't learn from their mistakes--and the mistakes keep getting bigger.
Here's another example of Krugman pointing that out from "The Reality Thing," June 25, 2002:
President George H. W. Bush once confessed that he was somewhat lacking in the "vision thing." His son's advisers don't have that problem: they have a powerful vision for America's future. In that future, we have recently learned, the occupant of the White House will have the right to imprison indefinitely anyone he chooses, including U.S. citizens, without any judicial process or review. But they are rather less interested in the reality thing.

For the distinctive feature of all the programs the administration has pushed in response to real problems is that they do little or nothing to address those problems. Problems are there to be used to pursue the vision. And a problem that won't serve that purpose, whether it's the collapse of confidence in corporate governance or the chaos in the Middle East, is treated as an annoyance to be ignored if possible, or at best addressed with purely cosmetic measures. Clearly, George W. Bush's people believe that real-world problems will solve themselves, or at least won't make the evening news, because by pure coincidence they will be pre-empted by terror alerts....

But back to the festering problems: on the economic side, this is starting to look like the most dangerous patch for the nation and the world since the summer of 1998. Back then, luckily, our economic policy was run by smart people who were prepared to learn from their mistakes. Can you say the same about this administration?

As I've noted before, the Bush administration has an infallibility complex; it never, ever, admits making a mistake. And that kind of arrogance tends, eventually, to bring disaster.
The above was from 2002, before the Iraq War had begun. Before Katrina. No one could hold them to account. It was literally like large parts of the Bush Administration only majored in Making Shit Up when they graduated from college. From "Stocks and Bombs," September 13, 2002:
In general it's a bad omen when advocates of a policy claim that it will solve problems unrelated to its original purpose. The shifting rationale for the Bush tax cut--it's about giving back the surplus; no, it's a demand stimulus; no, it's a supply-side policy--should have warned us that this was an obsession in search of a justification.

The shifting rationale for war with Iraq--Saddam was behind Sept. 11 and the anthrax attacks; no, but he's on the verge of developing nuclear weapons; no, but he's a really evil man (which he is)--has a similar feel.

The idea that war would actually be good for the economy seems like just one more step in this progression.
And things like that are why they made such good fodder for The Daily Show. But continuing on for a moment about the Iraq War from "Conquest and Neglect," April 11, 2003:
But there is a pattern to the Bush administration's way of doing business that does not bode well for the future--a pattern of conquest followed by malign neglect.

One has to admit that the Bush people are very good at conquest, military and political. They focus all their attention on an issue; they pull out all the stops; they don't worry about breaking the rules. This technique brought them victory in the Florida recount battle, the passage of the 2001 tax cut, the fall of Kabul, victory in the midterm elections, and the fall of Baghdad.

But after the triumph, when it comes time to take care of what they've won, their attention wanders, and things go to pot.
And they certainly did. Continuing on from "Dereliction of Duty," June 17, 2003:
A conventional war, on the other hand, is a lot more fun: you get stirring pictures of tanks rolling across the desert, and you get to do a victory landing on an aircraft carrier. And more and more it seems that that was what the war was all about. After all, the supposed reasons for fighting that war have turned out to be false--there were no links to Al Qaeda, there wasn't a big arsenal of W.M.D.'s.

But never mind--we won, didn't we? Maybe not. About half of the U.S. Army's combat strength is now tied down in Iraq, facing what looks increasingly like a guerrilla war--and like a perfect recruiting device for Al Qaeda. Meanwhile, the real war on terror has been neglected, and we've antagonized the allies we need to fight that war. One of these days we'll end up paying the price.
And I would call that price ISIS. And the fact that we'll undoubtedly have to go back again probably next year. Well, we probably wouldn't HAVE to, but since the hawks in this country have never not had other people fight another war they didn't like, we probably will.

On a bunch of other topics in the book, I can still see plenty of relevance for today. From "The Long Haul," September 10, 2002:
Far more important, of course, is the question of law and civil liberties. Great democratic leaders have broken the rules in times of war: had Abraham Lincoln not suspended the writ of habeas corpus in 1861, there would be no United States today. But the situation was extreme, and the lapse was temporary: victory in the Civil War brought a return to normal legal procedure. Can anyone think of an event that would persuade our current leaders that they no longer need extraordinary powers?

The point is that our new, threatened condition isn't temporary. We're in this for the long haul, so any measures we take to fight terrorism had better be measures that we are prepared to live with indefinitely.

The real challenge now is not to stamp out terrorism; that's an unattainable goal. The challenge is to find a way to cope with the threat of terrorism without losing the freedom and prosperity that make America the great nation it is.
Some of that is right out of the civil liberties battles of today, such as demonstrated by the Citizenfour documentary. NSA crap that is still ongoing and probably won't stop for the next few years at a minimum. That's not counting all the people on no-fly watch lists and other things either.

But his comments regarding the Bush tax cuts are still relevant to today since they're still in place, depriving the government of being able to do its job. From "Business As Usual," October 22, 2002:
Administration officials claim that the S.E.C. can still do its job with a much smaller budget. But the S.E.C. is ludicrously underfinanced: staff lawyers and accountants are paid half what they could get in the private sector, usually find themselves heavily outnumbered by the legal departments of the companies they investigate, and often must do their own typing and copying. Officials say there are investigations that they should pursue but can't for lack of resources. And the new law expands the S.E.C.'s responsibilities.

So what's going on? Here's a parallel. Since 1995 Congress has systematically forced the Internal Revenue Service to shrink its operations; the number of auditors has fallen by 28 percent. Yet it's clear that giving the I.R.S. more money would actually reduce the federal budget deficit; the agency estimates that it loses at least $30 billion a year in uncollected taxes, mainly because high-income taxpayers believe they can get away with tax evasion. So starving the I.R.S. isn't about saving money, it's about protecting affluent tax cheats.

Similarly, top officials don't really believe that the S.E.C. can do its job with less money; the whole point is to prevent the agency from doing its job.
You have to wonder even today, if the S.E.C. been properly financed would some of the collapse of 2008 been prevented. I don't think all of it could have been, but I do think some of it may have come to light sooner rather than later. But the I.R.S. being underfinanced is still affecting the U.S. I still remember saying to one of my friends that a bunch of societal and political problems could be fixed by a progressive tax system. She agreed. It's unfortunate that 10 years on from Krugman writing the following that the situation isn't any better, from "Red Ink Realities," January 27, 2004:
This decline in tax collections from the wealthy is partly the result of the Bush tax cuts, which account for more than half of this year's projected deficit. But it also probably reflects and epidemic of tax avoidance and evasion. Everyone who wants to understand what's happening to the tax system should read Perfectly Legal, the new book by David Cay Johnston, The Times tax reporter, who shows ideologues have made America safe for wealthy people who don't feel like paying taxes.

I was partially struck by Mr. Johnston's description of the carefully staged Senate Finance Committee hearings in 1997-1998. Senators Trent Lott and Frank Murkowski accused the I.R.S. of "Gestapo"-like tactics, and Congress passed new rules that severely restricted the I.R.S.'s ability to investigate suspected tax evaders. Only later, when the cameras were no longer rolling, did it become clear that the whole thing was a con. Most of the charges weren't true, and there was good reason to believe that the star witness, who dramatically described how I.R.S. agents had humiliated him, really was engaged in major-league tax evasion (he eventually paid $23 million, still insisting he had done no wrong).
People like that can still get away with that level of tax evasion because the I.R.S. is still without the resources to go after tax cheats. Ugh.

On a different note, I was glad to read this comment about public health, from "Paying the Price," September 16, 2001:
Last year Laurie Garrett, the author of The Coming Plague, followed up with a chilling book titled Betrayal of Trust: The Collapse of Global Public Health. The story she tells is ominously similar to that of airport security: a crucial but unglamorous piece of our public infrastructure has been allowed to fray to the point of collapse--partly because we have relied on the private sector to do the public sector's job, partly because public agencies have been starved of resources by politicians busily posturing against "big government." Don't be surprised if it turns out that we have left ourselves as vulnerable to an attack by microbes as we were to an attack by terrorists, and for exactly the same reasons.
We are enduring a measles outbreak right now, but you have to wonder what things would be like if we had a flu going around that was of the same intensity of the flu pandemic of 1918. Would the anti-vaxxers be so fixed on their current rationales and strategies? It's something to think about since we probably going to have some kind of large-scale pandemic in the next 15 years.

But I think I have to end on a happier note, and for that I'll turn to Krugman on the Brits. From "Man on Horseback," May 6, 2003:
At first the White House claimed the dramatic tail-hook landing was necessary because the carrier was too far out to use a helicopter. In fact, the ship was so close to shore that, according to The Associated Press, administration officials "acknowledged positioning the massive ship to provide the best TV angle for Bush's speech, with the sea as his background instead of the San Diego coastline."

A U.S.-based British journalist told me that he and his colleagues had laughed through the whole scene. If Tony Blair had tried such a stunt, he said the press would have demanded to know how many hospital beds could have been provided for the cost of jet fuel.
Yeah, it's always funnier when it's not your leader, and the British media in some ways can be better than their American sycophantic counterparts.

But for proof that Krugman actually does write about economics, I offer this long quote from his former column at Fortune magazine ("Supply, Demand, and English Food," July 20, 1998:
For someone who remembers the old days, the food is the most startling thing about modern England. English food used to be deservedly famous for its awfulness--greasy fish and chips, gelatinous pork pies, and dishwater coffee. Now it is not only easy to do much better, but traditionally terrible English meals have been become hard to find. What happened?

Maybe the first question is how English cooking got to be so bad in the first place. A good guess is that the country's early industrialization and urbanization was the culprit. Millions of people moved rapidly off the land and away from access to traditional ingredients. Worse, they did so at a time when the technology of urban food supply was still primitive: Victorian London already had well over a million people, but most of its food came in by horse-drawn barge. And so ordinary people, and even the middle classes, were forced into a cuisine based on canned goods (mushy peas!), preserved meats (hence those pies), and root vegetables that didn't need refrigeration (e.g., potatoes, which explain the chips).

But why did the food stay so bad after refrigerated railroad cars and ships, frozen foods (better than canned, anyway), and eventually air-freight deliveries of fresh fish and vegetables had become available? Now we're talking about economics--and about the limits of conventional economic theory. For the answer is surely that by the time it became possible for urban Britons to eat decently, they no longer knew the difference. The appreciation of good food is, quite literally, and acquired taste--but because your typical Englishman, circa, say, 1975, had never had a really good meal, he didn't demand one. And because consumers didn't demand good food, they didn't get it. Even then there were surely some people who would have liked better, just not enough to provide a critical mass.

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