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(Photo courtesy of Princeton University)

CRITIQUE OF FISCAL POLICY, AND MORE: Paul Krugman, New York Times columnist and Princeton University economics professor, spoke last week at the Princeton Public Library.
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With Presidential Election Looming, Paul Krugman Sharpens the Criticism

Matthew Hersh

Paul Krugman has been criticizing the policies of George W. Bush since the infancy of his presidency, but in the months leading up to this year's election, the New York Times columnist has widened his scope to a broader spectrum of issues. This criticism has been rejected by some and embraced by others, but at an appearence at the Princeton Public Library last Tuesday, it was clear he was among friends.

Hired by the New York Times in January 2000 to cover global economic issues, Prof. Krugman quickly set the crosshairs on the fiscal initiatives put forth by then-Candidate Bush, and just last year, the Princeton University economics professor compiled an anthology of his New York Times opinion pieces in The Great Unraveling: Losing Our Way in the New Century (Norton 2003). He made his appearance at the library to preach to the political choir on hot-button election year topics such as the tax cuts, the war in Iraq, and issues of governing with faith.

Prof. Krugman's book bolsters his argument that the economic decline from the boom of the 1990s was exacerbated by President Bush's leadership and his failure to accept "the legitimacy of our current political system." He questions the administration's stance on everything from Social Security ("What is certain is that Mr. Bush's actual Social Security proposal would bankrupt the system"), to tax cuts ("the economy needs stimulus now; it doesn't need tax cuts for the very affluent five years from now").

Interestingly enough, Prof. Krugman said those who will benefit most from the tax cuts are communities with "upper-middle incomes" like Princeton. However, as he pointed out, those who are considered to be part of the president's political base are more likely to be hurt than helped by the cuts.

"What's funny is if you look at the geography of politics, a state like New Jersey has a lot more to gain from this tax-cutting regime than a state like Montana, which will most likely vote for Bush next Tuesday."

But that argument has not been clearly outlined by any political opposition to the president's fiscal initiatives. "It's hard to get through. It's ideology. Out there in the heartland, you have people who believe firmly that there are a large number of family farms being broken up to pay a state tax, but no one's been able to come up with any examples."

Prof. Krugman was quick to point out, however, that Mr. Bush's Democratic challenger, Sen. John Kerry, will most likely not deliver a "radical change of policy" to "undo" the damage he said has been done under the current administration's policies. "Unless there's a true miracle in the first couple years [of a Kerry administration], there won't be much of a change in policy."

The "radical" change will occur if Mr. Bush is re-elected, Prof. Krugman said, warning of Social Security privatization and "more big tax cuts."

"Whether Kerry can roll back what Bush has already done, I don't know, but he can certainly stop doing more."

The library audience, which featured one member raising his hands to what appeared to be an almighty power when he said "God willing, Kerry will be elected," was largely on the professor's side. Michael Moore's Fahrenheit 9/11, deemed by Prof. Krugman as a "sloppy, self-indulgent, disorganized, misleading, very great movie," seemed to resonate with an audience inclined to accept only the "very great" part of Prof. Krugman's description.

In an article in the October 16 New York Times Magazine, Ron Suskind alleged that President Bush governs largely through faith, arguing that the same thinking applied to the war in Iraq. But does faith govern Mr. Bush's fiscal policy? In an interview before his library appearance, Prof. Krugman said he did not think that was necessarily the case:

"The ideologues behind [the tax cuts], want the fiscal crisis. They see it as starving the beast. Their view is you have to deprive the government of revenue to force cuts in nasty things such as social security and medicare and that doesn't happen unless people say 'we can't afford these things anymore.'"

So a fiscal crisis is integral to the administration's fiscal vision?

"I guess they're just betting it's a fiscal crisis that just lets them cut the programs without bringing the whole economy down, as opposed to another Great Depression," he said.

"I don't think someone is thinking these things through," Prof. Krugman said, adding that the administration's top White House economic advisor is a "very good economist who they keep locked in the basement and bring out every once in a while for a press conference."

Overall, Prof. Krugman managed to display his perspective without coming off as blatantly partisan. This was not a John Kerry stump speech, but a thoughtful critique of the confluence formed by politics, economics, business, and the role of the media. Many critics of Prof. Krugman chide him for being endlessly critical of the Bush administration, but it is safe to say that should there be a President Kerry, it is doubtful the economist will be watching him no less closely.

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