"The Conscience of a Liberal": as mythical as the unicorn

The Tagalog phrase "walang hiya ka" (which you may have seen me saying lately to some twit commenters) literally means "you have no shame" but is quite strong in connotation. It's appropriate here: Krugman has no shame whatsoever. The hypocrite and partisan hack wrote last April about "overpaid bankers." Not once did he mention Robert Rubin, who received $115 million for his 10 years on Citi's board. (In return, Rubin did the wonderful job of increasing Citi's risk-taking, contributing in no small way to its financial woes.) But his biggest hypocrisy is predicting "A fiscal train wreck" in 2003, after the second round of Bush's tax cuts.

Well, the problem was never the cut in taxes, but that Congress actually increased spending at the same time. Now that the budget has gotten Really, Really Bad, painfully obvious to anyone paying attention, what is Krugman saying? Well, as I wrote in May, when a Times op-ed says "Fiscal Suicide Ahead" while a Democrat is in the White House, you know Krugman didn't write that.

Yesterday he blogged about how the debt is bad but not that bad, with the title, "How much is $9 trillion?" What happened to the self-professed "alarmist" Krugman of 2003? If you put the two pieces side by side, there's no way in hell you could think it was the same person. The difference is obvious to anyone who understands Krugman: as long as Democrats are in power, Krugman's the Monty Python Black Knight when it comes to the burgeoning federal debt. "It's only a flesh wound!"

"But what's really scary — what makes a fixed-rate mortgage seem like such a good idea — is the looming threat to the federal government's solvency." - Paul Krugman, March 11, 2003

"Right now, federal debt is about 50% of GDP. So even if we do run these deficits, federal debt as a share of GDP will be substantially less than it was at the end of World War II. It will also be substantially less than, say, debt in several European countries in the mid to late 1990s. (There are some technical issues in comparing these various numbers — gross debt versus net (mainly about Social Security) and overall government debt versus federal, but they don’t change the basic picture.)" - Paul Krugman, August 23, 2009

My, my, what a difference an administration makes!

Actually, the picture is even worse than is commonly calculated, because the "percentage of GDP" debt ratios typically do not count the unfunded liabilities of Social Security and Medicare. When you factor in what Krugman deliberately ignores (because with a Democrat in power he doesn't want to admit it's that bad), the debt situation is far worse than World War II. Starting in 2016, Social Security payouts will exceed payroll tax revenues, and this country will see problems it never has before.

I will, though, admit that Krugman finally did get one thing right. Part of what he wrote in 2003: "But my prediction is that politicians will eventually be tempted to resolve the crisis the way irresponsible governments usually do: by printing money, both to pay current bills and to inflate away debt." Was he listening to Austrian economists at the time?

Then again, he said it only in hypocrisy. The Federal Reserve is buying up trillions of dollars of U.S. Treasury securities and mortgage-backed securities, far more than it ever did in the Bush years. But while Democrats are in control of the executive and legislative branches, Krugman's criticism is nowhere to be found.