7/24/2019 Paul Krugman 11/20

http://slidepdf.com/reader/full/paul-krugman-1120 1/1

Paul Krugman

 joined The New

York Times in 1999

as a columnist on

the Op-Ed page

and continues

as a professor of

economics and

international

affairs at Princeton

University. He was awarded the

 Nobel in economic science in 2008 .

 Mr. Krugman i s the author or editor

of 21 books and more than 200

 papers in prof essional jour nals and

edited volumes. His latest book is

“End This Depression Now!” 

The Great Depression wasn’t ended bythe intellectual victory of Keynesian eco-nomics. In fact, the publication of Keynes’s“The General Theory” was followed bythe great mista ke of 1937, when PresidentFranklin D. Roosevelt tried to balance thebudget too soon and sent the e conomy intoa severe recession. What put a decisive endto the slump was World War II, which ledto deficit spending on a scale that had beenpolitically impossible in the United States.

This story is what led me to suggestfacetiously a few years ago that we shouldfake a threat from space aliens i n order toprovide a politically acceptable cover forstimulus.

Now France has been attacked, unfor-tunately, by real terrorists instead of fakealiens, and President François Hollandeis declaring that security must take pre-cedence over austerity. Is this the start ofsomething big?

I should offer an obligatory disclaimer

that will do no good in the face of stupid-ity: I am NOT saying that terrori sm is agood thing, just as those of us who point towartime fiscal stimulus aren’t saying thatWorld War II was a good thing. We’re justtrying to thin k through some side effects ofthe atrocity.

The question we should ask is whetherthe fiscal indiscipline caused by jihad-ists will make a significant difference toFrance’s economic performance.

My guess is that it probably won’t. De-fense and security spending in the UnitedStates rose by around 2 percent of grossdomestic product after 9/11 — but that i n-volved a much bigger military buildup thanFrance is likely to undertake now, plus itinvolved the Iraq war. More likely, we’re

looking at a fraction of a percent of G.D.P.,which is small compared with the austeritythat Europe has imposed in recent years.

Unless France’s response is much biggerthan I’m imagining, the impact on growthwon’t be large.

The Farce Is Strong With This One

And that one, and that one, and, well,across the board.

It took no time at all for the r ight-wingresponse to the Paris attacks to turn into avile caricature that has me feeling nostal-gic for the restraint and statesmanship ofDonald Rumsfeld and Dick Cheney.

The Republican Presidential candidateMarco Rubio said on ABC’s “This Week”that we have to denounce radical Islamin general — as opposed to jihadists inparticular — because of Hitler. After all,making Islam the rhetorical equivalent ofNazism is a great way to win support fromthe world’s 1.6 billion Muslims.

The historian Niall Ferguson wrote ina recent column in The Australian that aterrorist attack on a couple of sites withina huge modern metropolis by a small num-ber of gunmen is just like the sack of Romeby the Goths.

And the conservative commentatorHugh Hewitt thinks that taking a remarkfrom President Obama totally out of con-text on Twitter will convince anyone ex-cept the right-wing base that the man whohunted down Osama bin Laden has beenan anti-American terrorist sympathizerall along.

I’ve deliberately selected people who aresometimes portrayed as moderate, smartor both. This is what the reasonable wi ng ofthe modern right looks like.

PAUL KRUGMAN

 A New Focus in France:

 Security Over Austerity 

During a Republican presidential de-

bate earlier this month in Wisconsin,

Jeb Bush criticized Senator Marco Ru-

bio’s attendance record in the Senate

by remarking: “I mean, literally, the

Senate, what is it, like a French work-

week? You get like three days where

you have to show up?”

The comment sparked a backlash in

the French press, and Gérard Araud,

France’s ambassador to the United

States, responded on Twitter by saying:

“A French work week of 3 days? No

but a pregnancy paid leave of 16 weeks

yes! And proud of it.”

Mr. Araud later cited productivity

data that contradicted Mr. Bush’s as-

sertion that the French have a short

workweek. Eventually, Mr. Bush’s team

apologized.

The candidate’s campaign has floun-dered in recent months. Mr. Bush has

gone from being the presumptive front-

runner for the presidential nomination,

to being in fif th place or lower in many

polls. Many analysts now consider Mr.

Bush’s former protégé, Mr. Rubio, to be

the establishment candidate best posi-

tioned to win the nomination.

Three days after this month’s debate,

terrorist attacks struck Paris, and Mr.

Bush responded with a call to declare

war on the Islamic State, urging Presi-

dent Obama to put American troops on

the ground in Iraq and Syria.

Critics quickly attacked his com-

ments. Summarizing Mr. Bush’s pur-

ported strategy in The New Yorker,

John Cassidy wrote: “You go in mili-

tarily; you knock off the local regime

and take out its forces, at which point

— not before you send in the milita ry

— you figure out how to keep the peace.

In other words, you — that is, we — do

precisely what the United States andits allies did in Iraq and Afghanistan

under the leadership of Jeb’s brother

George W.”

BACKSTORY

Bush Backtracks on Remarks

Surely we have the brains to

come up with ways to stimulate

our economies that don’t involve

warfare.

— GEORGE, AUSTRALIA

The repercussions of this con-

flict look hazy indeed. No one whohas seriously studied the IslamicState understands how to negate thethreats posed by the organizationand the possibility of military ex-tremism as a response.

So is ISIS a pa ssing phenomenon,or does the group represent a funda-mental shift in the world? If it’s thelatter, we could certainly expect tosee some economic impacts.

— DAVID, UTAH

During World War II, American

workers made a ton of money, by

1940s standards, though they had

few things to spend it on. Ration-ing goods and the sale of war bondskept money out of the economy — bydesign. After the war ended, peoplestarted cashing in their governmentbonds, and the economy experi-enced a major stimulus, as designed.

— BOB DOBBS, CALIFORNIA

The French response to the re-

cent attacks in Paris will not be

much bigger than you expect, Mr.

Krugman.

The Islamic State is not the Tali-ban, nor is it the Iraqi a rmy. It’s arelatively small, cowardly, psychotic

group of terrorists.There are not enough worthwhile

military targets to justify a moder-ate air campaign , much less a mas-sive invasion.

In fact, I’ve found myself ratherannoyed after hearing news reportsabout French aircraft destroying“ammunition dumps” and buildingsthat were described as ISIS head-quarters. French and Americanplanes would have destroyed thosetargets long ago. So it’s absurd tothink that such targets still exist.

— RICHARD F., COLORADO

Mr. Krugman, you are exactly

right about Keynes and World War

II. But the current situation regard-

ing ISIS is a much smaller affair.That said, what could prove to be ahuge project is an effort to rebuildthe Middle East.

After all, the economic stimulusspurred by World War II was fol-lowed by the Marshall Plan. Afterthis conflict with ISIS ends, perhapsa Mesopotamia Plan can be imple-mented.

— S., VIRGINIA

God save us from anyone who

declares that World War II ended

the Great Depression. Yes, un-employment in the United Statesdecreased because we shippedmillions of men oversees. And, yes,gross domestic product rose be-cause Uncle Sam was buying lots ofplanes, tanks and bombs.

But personal consumption, a veryimportant economic measurement,stayed low throughout the war

because very few consumer itemswere available for purchase. On theother hand, industrial producersconnected to the war effort made out

quite nicely.When someone says that World

War II ended the Great Depression,ask him: Who did it end it for? And,similarly, when someone says thatmassive government spending willboost the economy, ask him: Whoseeconomy?

— C., MASSACHUSETTS

The conservative response con-

demning all Muslims is exactly

what the terrorists want. (At least Mexicans are getting a break whileRepublicans in the United States un-leash their xenophobia on someoneelse.)

Also, why does the United Stateshave to respond to the attacks inParis? France and Russia have mili-

taries that are more than capable ofsmashing these thugs.

— P.J., NEW YORK 

Niall Ferguson seems to movefarther and farther away from

fact-based analysis every year.— MORLEY, GEORGIA

Mr. Krugman, you seem to be-

lieve that the Republican base has

gone mad, which is an assessment

that I completely agree with. Be

careful, however, not to underes-

timate the extent to which huge

parts of the Islamic world have

also gone around the bend.

— JORGEN, DENMARK 

READER COMMENTS FROM NYTIMES.COM

 War Should Never Serve as a Stimulus

DEBATING POLITICS, ECONOMICS AND OTHER TIMELY TOPICS WITH PAUL KRUGMAN OF THE NEW YORK TIMES FRIDAY, NOVEMBER 20, 2015

ONLINE: COMMENTS 

Comments have been edited for clarity and

length. For Paul Krugman’s latest thoughts

and to join the debate online, visit his blog at

krugman.blogs.nytimes.com.

PIERRE TERDJMAN FOR THE NEW YORK TIMES

People gather around a makeshift memorial at Republic Square in Paris on Nov. 15, two days after terrorists killed 129 people ina series of attacks. President François Hollande has vowed that security spending will trump the nation’s austerity policies.

It’s been obvious for a while thatJeb Bush is toast. Recently, how-ever, he became French toast: Af-ter making a crack about Frenchworkweeks that was completelywrong, the Republican presiden-tial candidate apologized for themistake.

Fool! As National Review madeclear, real men don’t admit to,let alone apologize for, errors:“Apologizing to the French willnot score Bush any points with theG.O.P. primary electorate,” JohnFund, the magazine’s national-affairs correspondent, wrote. “Itmay show he is a gentleman, butit also shows he lacks the killerinstinct of his father and brotherwhen they ran for president.”

Hey, look at Ben Carson.But in truth the French deserve

an apology from a lot of Americanpoliticians and commentators. Ifyou think that France is a nationwhere everyone is either lazy

or unemployed, compared withhard-working America, you’re not

 just repeating a caricature, you’rerepeating a caricature that’s beenout of date for many years. TheFrench do take more vacations

than Americans do, but in theirprime working years, they’re a lot

more likely to be employed thanwe are (see the chart).

Whenever I mention this fact,I get mail from people who insist

that I must be wrong and demanda correction. And even well-in-formed commentators seem to beunderinformed on this point. Forexample, Justin Fox — while notwrong in what he wrote in a recentBloomberg column on entitlementspending (here: bv.ms/1MCjmQz)— doesn’t seem aware thatFrance’s lower overall labor forceparticipation is entirely the resultof early retirement and lower em-ployment among the young, whichin turn partly reflects studentsnot having to work while they’rein college.

Of course, such employmentsuccess isn’t supposed to happenin countries with generous wel-fare states like Fra nce’s. And tobe fair, the chart here may reflectAmerican failure as much as it

does French success. Still, peopleshould know that their image ofFrance, and Europe in general, isreally, really wrong.

PAUL KRUGMAN

Caricatures and Labor Force Distortions

No need to apologize, Jeb! After

the idiocy of “freedom fries,” the

few people in France who follow

domestic American politics con-

sider it an honor to be insulted by

Americans.— CHRISTIAN PERPIGNAN, FRANCE

If you’re a Republican, there’s

nothing much worse than being

labeled a “gentleman.” That’s thekiss of death in right-wing politics.It’s possibly even worse than if you

believed in science. Or if you wereFrench.

— JIM HANSEN, CALIFORNIA

Who would want high-speed

trains; universal access to health

care and low-cost prescription

drugs; publicly funded preschool

for all with certified teachers;

tuitionless public universities;

subsidies for cultural institutions;

subsidized summer camps and

child care; and more paid vaca-

tion?

What a nightmare!— NANCY CADET, NEW YORK 

In the United States, even withthe Affordable Care Act , we are

always at risk. The middle-aged

woman cleaning my teeth at mydentist’s office recently told me: “Myhusband and I are afraid. Americais such an expensive place to live.What will we do when we have toretire?” The concept of “freedom” isrelative when we compare life in theUnited States to life in France a ndother European countries. I am freeto work many hours for low pay. I a mfree to get sick and die. I am free toride two or more hours to and fromwork on a bus. And I am free to l isten

to corrupt politicians pandering topeople’s worst base instincts.

— HAROLD WINTER, FLORIDA

I spent several months living in

Paris and Lyon. There are some

things that the French get wrong.

But there’s also an awful lot that

they get right.

I remember taking t he TGV,France’s high-speed rail network,several times to Lyon from Paris.Cars that the train passed on thefreeway looked like they were stand-ing still.

And when I got back to the UnitedStates, I wondered why the govern-ment wasn’t building high-speedrail. Airport s are so crowded, andit’s much nicer to travel from one cityto another by train.

I don’t understand why President

Obama didn’t push for high-speedrail as part of an infrastructurespending project during the recov-

ery from the Great Recession.— BLAISE ADAMS, CALIFORNIA

The social democracies of Eu-

rope and elsewhere care about

their people, so they provide them

with basic services like health

care and education. In the UnitedStates, however, a college educationis becoming prohibitively expensive,and conservatives consider Obam-acare to be downright sinful.

— NAME WITHHELD, GEORGIA

France is pretty much Exhibit A

in the Encyclopedia of Conserva-

tive Revisionism. We often forgetthat no other country was as finan-

cially supportive of our efforts in theRevolutionary War as France.

— R. LAW, TEXAS

READER COMMENTS FROM NYTIMES.COM

From Freedom Fries to Foot-in-Mouth

70

84

Source: Organization for Economic Cooperation and Development THE NEW YORK TIMES

Employment Ratio, Ages 25-54

72

74

76

78

80

82

       1       9       9       5

       1       9       9       6

       1       9       9       7

       1       9       9       8

       1       9       9       9

       2       0       0       0

       2       0       0       1

       2       0       0       2

       2       0       0       3

       2       0       0       4

       2       0       0       5

       2       0       0       6

       2       0       0       7

       2       0       0       8

       2       0       0       9

       2       0       1       0

       2       0       1       1

       2       0       1       2

       2       0       1       3

       2       0       1       4

UNITED STATES

FRANCE

Percent