Paul Krugman Calls For Economic Sanity In A Politically Insane World

Sep 04 2011 Published by under Uncategorized

Paul Krugman was on ABC’s This Week today discussing President Obama’s upcoming jobs speech when he took political leaders to task for laying off hundreds of thousands of teachers during a recession.

Here is the video from ABC News:

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Krugman laid out the political landscape that Obama’s jobs speech is facing:

And Obama has an interesting problem, because I think that — the way I think of it is, there’s three different things. There’s what we should be doing. And what we should be doing is a huge public investment program. No better time to do it. Government can borrow money almost for free, lots of unemployed workers.

Then there’s the — that’s not going to happen, because the second question is, what can actually pass Congress? And the answer is nothing. Nothing. If Obama were to call for endorsing motherhood, the Republicans in the House would oppose it.

And then, third, is what he should say. And I think that’s an interesting thing. I think he has to — he probably shouldn’t be calling for what I would want, because the public should want what I want, but it doesn’t. So he probably should be calling for things like a limited, but significant program of infrastructure repair, things that we really need, plus things that — like a large payroll tax cut.

The main thing is, I think he has to be bold, has to be making the case, look, there are things we could be doing, there are things I want to do. Those guys are not letting it happen.

Later Krugman called GOP’s governors who are laying off hundreds of thousands of school teachers crazy:

What has been happening on trend and what should have been happening. It’s all wrong. Look, we’ve laid off — in effect, America has laid off several hundred thousand schoolteachers in the last couple of years. That’s crazy, right? First of all, education is a priority. Second, we’re cutting jobs that we need at a time when — when we need to be creating more jobs, when we need to be — you know, this is — so these are real things.

If you look at — I actually just did these numbers. If you look at actual government buying things, as opposed to things like food stamps, but actual government purchases of goods and services, in a normal year, that rises by around $50 billion a year. Over the past year, it’s fallen by $60 billion. That, again, is crazy. That’s a major drag on the economy.

Krugman was correct on both counts. Obama’s jobs speech isn’t about what is going to happen, because Republicans are going to block anything that he proposes. The point of the speech is to lay out a platform that he can take to voters in 2012, and say this is what I could do to create jobs if the Republicans weren’t blocking a true jobs creation agenda.

The notion that we can somehow improve the economy by laying off teachers is sheer insanity. 58,000 teachers around the country were laid off in 2010, and that was with stimulus money. Now that the stimulus money is gone, and Republicans have taken control of governorships across the country with the intention of destroying the teachers’ unions, the layoffs have accelerated. Four thousand teachers were laid off in Pennsylvania, Scott Walker’s budget in Wisconsin has forced thousands of teacher layoffs and another 5,000 retirements, and it was projected that Rick Scott’s slashing of the education budget in Florida would lead to 20,000 layoffs, and thousands of teachers have been laid off across the state.

(New York City has also laid off over 4,000 teachers, and California has laid off tens of thousands of teachers, but California had unique revenue and budgetary issues long before the current recession came along).

In the cases above, the budget crunch is simply a pretext to weaken teachers’ unions. Krugman is right. An economy can’t be stimulated by cutting jobs. This is especially true of the consumer and consumption driven American economy, but Republicans are more concerned with carrying out an ideological wish list than putting people back to work.

As long as this nation walks down the Republican path, our economic woes will continue to mount, and Paul Krugman will continue to be one of the lonely national media voices calling for economic sanity in a politically insane world.

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