Krugman has not gone as far as Michael Moore, who recently called for the arrest of the CEO of Standard & Poors for permitting his agency to downgrade U.S. Government debt, but he is moving in that direction. As Anthony Gregory has put it, we are seeing the totalitarian mindset of the Progressives in action, and Krugman is right in the middle of it with his unhinged rhetoric. (Gregory, one of the most insightful writers out there today, notes that we now are faced with totalitarian thinking on both right and left. His column definitely is worth a read.)
Before deconstructing Krugman's column and his latest blog posts, I would like to quote Tucker who makes a most salient observation regarding S&P's supposed sin:
Krugman seems to regard the down-rating as the sin that cries out to heaven for vengeance. And why? Because S&P had given Lehman Bros. an A rating before it went bankrupt and therefore the company has no credibility.That is an excellent point. Furthermore, what Krugman does not point out is that the government was strongly encouraging the formulation of the toxic assets through its various programs, and the Federal Reserve System quietly stood in the background with its promised "Greenspan-Bernanke Put."
Huh? Doesn’t his point suggest the opposite of what he intends? By his own account, S&P has a bias to overrate bonds. S&P down rated U.S. debt from AAA to AA+. Seems like S&P could continue to downlist U.S. debt a long way before even approaching Lehman territory. Plus, if A is supposed to be a vote of confidence in Lehman, how can AA+ constitute a pessimism so horrible that it is a crime against humanity?
To say it another way, one easily can argue that S&P was doing what its political masters wanted it to do: give high ratings to government-inspired debt. Likewise, as we can see with the reaction of Krugman, Moore, Congress, and the White House to the latest S&P move, the consequences of telling the truth -- that the emperor wears no clothes -- are severe. With upcoming Senate hearings on S&P, we can be assured that the iron fist of the state is going to follow.
So, it is politics after all, but a different kind of politics. Krugman blames Goldstein, er, the Republicans, for all of the problems -- ALL of them. According to Krugman, even when the Democrats held the White House AND insurmountable majorities in the House and Senate, somehow Goldstein, er, the Republicans, managed to keep them from spending what Krugman says was enough money to "stimulate" the economy and give it "traction."
How did the Republicans do that dastardly deed? Why they disagreed with Paul Krugman. Yes, mere words, something that never bothered the Democrats before, suddenly stopped them dead in their tracks and made them initiate what Krugman has called "austerity." Yes, through Fox News (which Krugman and his allies never watch, anyway), the conservatives managed to destroy all the good Krugman demanded that Obama do. The fact that the Democrats had the major media all on their side from the NY Times to the news networks apparently meant nothing, as just the existence of dissent somehow overpowered the powerful.
To me, that is a huge howler. What Krugman is saying is that the very presence of people who might see the world differently than him is unacceptable. Given his recent endorsement of the view that the only way we can bring back prosperity is through state violence against businesses and banks, we can see where he and his political allies are headed. Look for Krugman to endorse measures in the future that smack of totalitarianism and outright violence.
Krugman no longer is even engaging in debate. The same person who spoke glowingly of "death panels" now is claiming that only the conservatives have used the term. For that matter, Krugman's ally Robert Reich also has endorsed "death panels," although he termed things differently.
For all of his talk of being the prophet in the wilderness, Krugman clearly is part of the political establishment. The recent Time screed against the Tea Party points out that the establishment view is that Ben Bernanke is a sober tiller of the economy, that John Maynard Keynes provides the way to prosperity, and that Ron Paul is a wacko nut job. In other words, the political establishment -- and Time is part of that group -- has no problem with Krugman.
What we are seeing is a roadmap to destruction. On one side, Krugman is claiming that tax-borrow-print-spend will bring us prosperity when, in fact, it will only make things worse. And as the hole continues to get deeper, Krugman and his friends are going to call for outright totalitarian measures against anyone who disagrees with them. You can bank on that one.