I hate to enter the circular firing squad that is the hallmark of my party these days, but this week's Krugman column really got to me. Was it this gem?
But it’s just wrong to blame the war for our current economic mess: in the short run, wartime spending actually stimulates the economy.
Strangely, no. Although, I was amused that Krugman conflated the wartime spending of Vietnam (where, say, we made our own steel) with that of Iraq (and our mysteriously missing billions). Hint: you can't spell GDP without "domestic", Paul.
No, what bothered me was that after carefully informing the public on the need for regulation in the financial industry, he uses it to pillory both the Obama and Clinton campaigns in a manner that can only be called "fair and balanced". Are two unlike things equal? Find out below the fold!
Here's the end of Krugman's piece:
Last year, there was no question at all about the way Wall Street’s financial contributions to the new Democratic majority in Congress helped preserve, at least for now, the tax loophole that lets hedge fund managers pay a lower tax rate than their secretaries.
Now, the securities and investment industry is pouring money into both Mr. Obama’s and Mrs. Clinton’s coffers. And these donors surely believe that they’re buying something in return.
Let’s hope they’re wrong.
Well, that sounds pretty damning doesn't it? They're all corrupt, a pox on both their houses, nothing more to see here. Except here's Obama's position, from my favorite part of Obama's speech on race:
Just as black anger often proved counterproductive, so have these white resentments distracted attention from the real culprits of the middle class squeeze - a corporate culture rife with inside dealing, questionable accounting practices, and short-term greed; a Washington dominated by lobbyists and special interests; economic policies that favor the few over the many.
Sounds to me that the lobbyists haven't made the sale. How about the Clinton record on banking? Well, there is the 2001 bankruptcy bill she voted for, which she was "happy that it never became law". But let's dig a little deeper into those 35 years of experience, to her husband's record:
Soon after he formed Citigroup, Congress repealed a Depression-era law that prohibited goliaths like the one Mr. Weill had just put together anyway, combining commercial and investment banking, insurance and stock brokerage operations. A trophy from the victory — a pen that President Bill Clinton used to sign the repeal — hangs, framed, near the magazine covers.
And what of Krugman's expert witness, Robert Rubin?
On Oct. 22, Weill and John Reed issue a statement congratulating Congress and President Clinton, including 19 administration officials and lawmakers by name. The House and Senate approve a final version of the bill on Nov. 4, and Clinton signs it into law later that month.
Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"
The Depression-era law repealed here was the Glass-Steagall Act. Its repeal (which enabled Krugman's "shadow banking" system) is arguably the cause of the current financial crisis. I find it odd that Bill's complicity, or even the words "Glass" and "Steagall" are missing from Krugman's article. "Is that simply an omission...?"
For the record, I am a professional cynic. When cynicism works well, it threads the needle between the short- and the long-term, matching current promises to expected performance. And in politics, it always pays to expect disappointment. So I can appreciate Krugman's "just words" tone.
But here is a situation where you have the architects of the banking crisis (the Republicans and the DLC) on the one hand, and on the other you have someone who clearly understands the problem, speaks to it, and has yet to fail you. If your cynicism prevents you from separating actual disappointment from potential disappointment, it's not cynicism anymore. It's paranoia.
Thanks for reading this far. For more in-depth analysis on Glass-Steagall, I found this excellent read while sourcing: Bill Clinton's Role In Mortgage Crisis.