Krugman distorts how CA works

Krugman - wikipediaApril 9, 2013

By John Seiler

At CalWatchDog.com, we’ve published some articles on Paul Krugman’s column praising California supposedly new, high-tax, big-spend liberal government. I read the column again and a few more comments are necessary.

He might have a Nobel Prize in economics. But if he were a journalist intern here and submitted his recent piece on California, I’d have deleted it and told him to start over. It’s obvious he did absolutely no research on it, but just wrote off the top of his head. Three thousand miles away, he thinks he knows everything about our complex state. Consider this howler:

“California isn’t a state in which liberals have run wild; it’s a state where a liberal majority has been effectively hamstrung by a fanatical conservative minority that, thanks to supermajority rules, has been able to block effective policy-making.”

In fact, on everything except the budget, a majority vote was all that was needed. For more than 40 years liberal Democrats have controlled the state Legislature, except for one year, 1995, when Republicans had a majority in the Assembly. So on almost everything — schools, abortion, health care, the environment (especially AB 32) — it really has been Liberal Democrats Gone Wild.

Even “supermajority rules” on the budget were ended in 2010 with Proposition 25; the only exception was taxation, which still requires a two-thirds vote. But despite that, the Republican minority never could do much on the budget anyway, except for one year: 2011, when they blocked Gov. Jerry Brown putting a tax-increase on the budget.

Taxes

But even the tax issue is not a story of a “liberal majority…hamstrung by a fanatical conservative minority.” In 2009, enough Republicans joined the majority Democrats to pass a $13 billion tax increase pushed by Republican Gov. Arnold Schwarzenegger, the biggest tax increase of any state, ever.

Krugman is as unspecific as an amateur blogger. But he seems to be talking about GOP legislators in 2011 blocking putting an extension of the Schwarzenegger tax increases on the state ballot that year. Krugman:

“Over the years, California’s Republicans moved right as the state moved left, yet retained political relevance thanks to their blocking power. But at this point the state’s G.O.P. has fallen below critical mass, losing even its power to obstruct — and this has left Mr. Brown free to push an agenda of tax hikes and infrastructure spending that sounds remarkably like the kind of thing California used to do before the rise of the radical right.”

Acutally, the supermajority “spending” part, as noted, was taken care of by Prop. 25. As to the taxing part, it was not the Legislature that raised taxes last year, but an initiative for which signatures were gathered, and which voters passed in November.

2011

And as to the 2011 attempt by Brown to raise taxes — assuming that’s what Krugman is referring to — here’s what really happened. Brown wanted to continue the $13 billion Schwarzenegger tax increases, which were expiring. But Brown was elected in 2010 on a specific promise not to raise taxes unless the people voted for it.

In 2011, he tried to get a handful of Republicans to join with the majority Democrats to put the $13 billion tax “extension,” as he called it, on a Special Election he would call in Nov. 2011. Krugman probably doesn’t know it, but governors can call special elections if initiatives are ready for a vote, such as the Special Election in 2005 over Schwarzenegger’s reform plan; which was defeated in its entirety.

Brown is a savvy politician. He knew that, if a Special Election were called in Nov. 2011, the tax increase would be the focus of attention. So he wanted some Republican legislators as cover. He could say, “See, even Republicans are open to tax increases.”

But for once (unlike with Arnold’s 2009 tax increase), Republicans stood solid.

Even then — even then, Dr. Krugman, Nobel Laureate — Brown could have put the the tax increase before voters in Nov. 2011. All he had to do was get his “troops,” as he calls teachers’ union members, to gather signatures for a tax-increase to be put on the Nov. 2011 ballot, then himself call a Special Election.

He didn’t do that for political reasons.

He did do something similar, but with a more modest tax increase of $6 billion instead of $13 billion, for the Nov. 2012 ballot. Circumstances were more favorable then because it was a general election with a popular Democratic president heading the ticket, bringing out many more Democratic votes. So just five months ago, the Proposition 30 tax increase passed.

Ike

Krugman also writes, “Modern movement conservatism, which transformed the G.O.P. from the moderate party of Dwight Eisenhower into the radical right-wing organization we see today, was largely born in California.”

So he’s read some histories of conservatism. But everything has changed.

I just read a fine new book on the Eisenhower years, “Ike’s Bluff: President Eisenhower’s Secret Battle to Save the World,” by Evan Thomas. It mainly concerns defense and foreign policy. But I was reminded how different the 1950s were from today. For example, abortion was considered so abhorrent it wasn’t even mentioned in public, or in movies (See “Detective Story” with Kirk Douglas). Same-sex “marriage” was a joke at the end of “Some Like It Hot,” starring Marilyn Monroe. Ike even refused to hear ribald jokes.

On economics, Ike was obsessed with cutting waste in government, preventing inflation and paying down the national debt — all positions the opposite of Krugman.

The following graph shows the national debt as a percentage of GOP.

National Debt - GDP

You can see how Ike paid down the debt, while Obama, following Krugman’s advice, is greatly increasing it.

(Yes, I know Reagan increased the debt. I wrote articles at the time urging him not to do so. As to the Bushes, did they ever do anything right? And Clinton should be commended for reducing the debt.)

So once again, Krugman doesn’t do even a little research to find out what really happened.

I suggest that Krugman move out here for five years and closely study our quirky state. He easily could get a teaching position at USC, UCLA, Berkeley or Stanford, probably making $400,000 or more a year. Combined with his New York Times salary, book royalties, speaking fees, and investment income from his Nobel Prize proceeds, he would make well over $1 million a year, qualifying him for the 13.3 percent top income tax rate he so lavishly has praised.

Currently, he reportedly lives in Princeton, N.J. So under Republican Gov. Chris Christie, he pays only the 9.97 percent top rate.

If he thinks California under liberal rule is so fantastic, he should move out here and pay for it.

11 comments

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  1. fish
    fish 9 April, 2013, 11:59

    Remember it’s taxes for thee and not for me in Krugmans world.

    Of course Krugman has stated on numerous occasions the deficits and debt don’t matter…..and this begs the question….if they don’t matter, why tax at all?

    Of course when Team Red (Bush the Younger) was in office these things mattered tremendously so it might be good to just ignore Paulie and his delusions.

    Reply this comment
  2. Dyspeptic
    Dyspeptic 9 April, 2013, 18:13

    The bearded wonder, like most of his ivy league regressive ilk, lives in some bizarre alternate universe which only randomly impinges on what the rest of us like to think of as reality.

    Has anyone ever seen the Professor smile? He looks like he’s wrapped tighter than a cheap cigar. I hope he doesn’t have one of those special celebrity concealed handgun permits, ’cause he looks like he could go off at any minute.

    If you could convert his egomania to electricity we could power the country for the next century.

    Reply this comment
  3. @SoquelCreek
    @SoquelCreek 9 April, 2013, 19:03

    Krugman is perhaps the most intellectually dishonest “academic” in media. He’s not stupid. He knows the truth but the truth doesn’t jive with his agenda.

    I, too, encourage him to come to California. Surely his massive intellect will solve all that’s wrong with California, which Democrats call “the oasis of Democratic politics.” See what this actually means for everyday Californians.
    http://soquelbythecreek.blogspot.com/2012/10/california-oasis-of-democrat-politics.html

    Krugman’s puff-piece on California isn’t unique. Harold Meyerson of the Washington Post had a similar offering to the cult of Brown.
    http://prospect.org/article/once-and-future-gov

    Funny, though, how Meyerson’s official bio forgets to mention that he’s a vice-chair of the Democratic Socialists of America (DSA), representing the far, far Left extreme of the Democratic party.
    http://www.dsausa.org/our_structure

    You don’t get to be in California’s situation overnight. It takes decades of mismanagement and bad policy decisions.

    Reply this comment
  4. @SoquelCreek
    @SoquelCreek 9 April, 2013, 19:05

    Then again, this is the same Paul Krugman who advocated that the government fake an alien invasion to spur additional government spending. He, like many others in Washington, is what passes for serious leadership these days. We can do better.

    Paul Krugman: Fake Alien Invasion Would End Economic Slump (VIDEO)
    http://www.huffingtonpost.com/2011/08/15/paul-krugman-fake-alien-invasion_n_926995.html

    Reply this comment
  5. SkippingDog
    SkippingDog 9 April, 2013, 21:49

    If the actual costs of the two wars initiated under GWB had been accurately included in his budgets, his line would have a much steeper rise than the cocamamie chart included with this article.

    It’s also interesting that the same chart shows the Debt/GDP under Reagan increased about 150%, even though we weren’t at war during his administration – except for beating up on Grenada.

    Interesting, also, is the apparent fact that our Debt/GDP ratio was the lowest in modern history under Carter, whom “conservatives” and Republicans love to disparage, even as they applaud Reagan for driving up the Debt.

    Is it possible that these judgements are made on nothing more than politics?

    Reply this comment
  6. Brown delta trout
    Brown delta trout 10 April, 2013, 08:34

    It’s OK to spend money if the future looks bright and you have future commitments that guarantee spending. But if you look at what is going on now economincally how things don’t look so rosy, it seems prudent to restrain yourself before you spend so much that you will never recover. Unless you hell bent on throwing it all in. It’s called self restraint, something liberals are not know for.

    Reply this comment
  7. Ulysses Uhaul
    Ulysses Uhaul 10 April, 2013, 09:06

    Krugman loves to get your goat! No thinking person believes him….doomer’s relax and smell the thistle!

    Reply this comment
  8. jgobserver
    jgobserver 10 April, 2013, 09:42

    krugman advocates that deficits are not important. That alone makes anything he says not worth reading. California has a major problem with high taxes. That is business will be more likely to locate elsewhere. Consider Intel where most of its expansion went to Oregon and Arizona. San Jose had to pay Samsung $7M in incentives as a ransom to keep the company in San Jose. People voted to increase tax on high income individuals. High income individuals make the decision where to start or expand a business. California raises taxes to pay for things like the high speed train that will never pay for itself and it will be a drain on the treasury for all future years. The under funded pension will eventually force the democrat majority to go against their union benefactors. Consider the mayor of Chicago and public unions. The future in California is bleak at best and we have a democrat majority who will not be inclined to do anything to correct it.

    Reply this comment
  9. @SoquelCreek
    @SoquelCreek 10 April, 2013, 09:55

    SkippingDog, nice revisionist history! You said “even though we weren’t at war during his [Reagan’s] administration.”

    Perhaps you’re too young to remember. May I suggest you look up the following terms?

    * USSR (Soviet Union)
    * Cold War
    * Mutually Assured Destruction
    * Berlin Wall
    * “Mr. Gorbachev, tear down this wall!”

    The Cold War, in fact, was fought during the Truman, Eisenhower, Kennedy, Nixon, Carter, and Reagan eras.

    Reply this comment
  10. jimmydeeoc
    jimmydeeoc 10 April, 2013, 10:17

    Thanks to Soquel for pointing out Doggy’s mis-remembering.

    But even at a more basic level:

    “…..It’s also interesting that the same chart shows the Debt/GDP under Reagan increased about 150%…”

    Really? 1980-88 looks like it went from @ 30% to @ 50%. That’s 2/3, or 67% ….not 150%.

    Graphical interpretation and proportional analysis: More math-based skills liberals lack.

    Reply this comment
  11. SkippingDog
    SkippingDog 10 April, 2013, 18:14

    A cold war is not the same as a hot war. Ask anyone who’s been in the latter to explain the difference to you. I remember the 60’s and 70’s quite clearly, having served in SAC during the early 1970’s when we knew the difference between cold wars and hot.

    As to you, jimmy, a look at the chart above shows the Reagan year budgets beginning at something below 30% debt to GDP and ending somewhere between 65% and 70% or so. That’s more than a 100% increase in the debt to GDP ratio by your icon of fiscal conservatism.

    Reply this comment

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