Paul Krugman, the award winning economist and columnist for The New York Times, railed against the Bush administration Friday before a packed crowd at Ryan Family Auditorium in the Technological Institute.
“There is a vast right-wing conspiracy. It’s out there, you just have to do a little digging,” Krugman said in a two-hour speech sponsored by College Democrats and Students for Ecological and Environmental Development.
Addressing a breadth of topics from social security privatization to the state of the media, Krugman argued that Republicans in the White House and Congress, as well as non-governmental groups such as The Heritage Foundation, are pursuing a radical, ideology-driven agenda that would have dire repercussions for the U.S. economy.
“It’s going to be a very grim period,” Krugman said of President Bush’s second term. “In particular it’s a huge blow to those of us who see ourselves as part of the reality-based community.
“The first point is just that it is very clear that there is not going to be any scaling back of the radicalism, that we are going to see the policies become more extreme,” he added.
The main elements of Bush’s economic agenda, according to Krugman, will be social security privatization and tax cuts, which will attempt to undo the legacy of progressive economics and the New Deal. Krugman said both of these goals were unnecessary and dangerous.
“There is in fact no urgent social security crisis,” said Krugman, who explained that the current system could be secure for the next 40 years.
“It’s ideologically driven,” Krugman said, adding that the cost of privatization could reach $2 trillion. “The reason Social Security is under attack is not because it is in trouble but because it works so well. It is the prime legacy of the New Deal.”
According to Krugman, Bush’s planned tax cuts on “savings and investments” — essentially property-based income such as stocks and bonds — would land the United States in similar trouble.
The tax cuts would create a system where only wages were taxed and would disproportionately burden the middle and lower classes. Also the cuts would be difficult if not impossible to pay for, he said.
Krugman concluded that there is no viable way to pay for the tax cuts on capital income, and as a result they would add to the deficit.
That rising budget deficit, he said, as well as a short-term debt to foreign governments of $2 trillion, is leading to a steep plunge in the value of the dollar and an ensuing fiscal crisis.
Only America’s status as a First World nation has kept it from suffering an inflationary disaster like Argentina’s, he said. But that protection cannot last forever.
“All of this is uncharted territory,” Krugman said. “No first world country has ever been this irresponsible. And no key currency country, no country with the world’s most important currency has ever been this irresponsible.”
Throughout the rest of his remarks and a question-and-answer session, Krugman made several surprising statements, including that CNN was more dangerous than Fox News because people hadn’t figured out CNN also was part of the conservative movement.
Speaking to his own reputation as a “shrill” liberal, Krugman said, “The funny thing is basically how moderate my views are. I’m a free-market Keynesian.”
Admitting that he comes off as one-sided, Krugman added, “I think someone who tries to be balanced and evenhanded in these times is being fundamentally dishonest.”
College Republicans President Henry Bowles said Krugman’s speech surprised him.
“I thought he was very articulate and more charming than I would have expected,” the Medill junior said.
Reach Jordan Weissmann at [email protected].
