03 April 2009

The Cover Story That Wasn't

Fresh from the allergist's waiting room, I'm still thinking about this week's Newsweek cover story on Paul Krugman, "Obama's Nobel Headache." What I had hoped would be an insightful slice-and-dice of the philosophical divide between The Nobel Laureate and The New Administration turned out to be an interesting but mostly fluffy sketch of Krugman the man. Totally interesting, like I said--think US Weekly for political swooners--but completely useless in getting beyond the superficial. Krugman believes the stock market as we've known it is a "dead man walking," while Obama appears to act (yes, I choose those words carefully) from the belief that, love it or hate it, the market is still the only battery with enough juice to run the pacemaker once the administration lets go.

The article relegates Krugman to the status of rebel boy genius with the slightly wounded ego. In other words, if I read Evan Thomas correctly, part of Krugman's direction now is fueled as much by a contrarian streak as by adherence to fundamental economic beliefs. The Thomas reduction is too bad, because it misses a bigger point. Paul Krugman could be among the administration's strongest economic allies were there a push from within to get beyond the status quo on Wall Street. Indeed, Krugman even lauded, albeit quietly, Obama's plans for regulation. But one of Krugman's biggest beefs with the current tack is that it perpetuates a busted system.

I'm not the only one who thinks Thomas missed an opportunity. Joan Walsh takes her turn here, painting Thomas as "smug." She also points out that Krugman doesn't simply broadly oppose Obama (as a contrarian might). And she's right. "There’s so much to like about where Obama is going — health care, transparency in government, ending the war in Iraq. And the stimulus bill is OK, though not big enough." That's not Walsh, that's Krugman on February 26.

Easy enough, right? Krugman thinks Obama is, broadly, on the right track. Based on a generalization that Krugman thinks Obama is wrong (in case you can't read the text on the thumbnail above, the type next to Krugman's mug reads "Obama is wrong"), Thomas simply chooses to present Krugman as the face of the progressive movement. And that's where any real conversation slips away.

Krugman's very next sentence in the blog post above reads, "But on the question of fixing the banks, many of us are feeling a growing sense of despair." See how finite the disagreement is? On the question of fixing the banks. That's a good enough point from which to track the divergences between the politico-economics of a Paul Krugman vs. the politico-economics of an Obama/Geithner/Summers triumverate. And Krugman expands on that "growing sense of despair" here, here, here, here, and here. I'll stop, but you get the idea. If you read the posts, they all tackle the disagreement over sound banking policy. And they all avoid the specifically vague rhetoric of sour contrarianism.

A prominent economist disagrees with a popular president's treasury secretary over the politics and execution of banking policy. Normally, only the geekiest of the geeks and wonkiest of the wonks would even be listening. So why make more out of it than it is? Possibly because using Krugman to pit progressives against the president sells magazines?