Krugman’s Karma Forces Him to Feel the Bern and Attack the Kochs for “Buying Politicians”

By William K. Black
June 4, 2016     Bloomington, MN

When last we read Paul Krugman he was repeatedly demanding that Bernie Sanders cease criticizing Hillary Clinton for a lifetime addiction of taking tens of millions of dollars in political contributions and hundreds of thousands of dollars in speakers’ fees from Goldman Sachs and other business interests.  (I am an economic adviser to Bernie.)  While Professor Krugman consistently stressed that the data show that business campaign contributions do rig the system, Hillary Surrogate Krugman suddenly professed that business political campaign contributions and speaker fees have no corrupting effect on politicians.

Economists should be honest for all the usual reasons, but economists who wish to affect policy have an additional reason to embrace intellectual honesty.  Karma means that an intellectually dishonest economist is likely to be promptly confronted by the desirability of telling the truth in order to prevent disastrous policy on precisely the subject he or she just lied about.

Krugman suddenly felt the Bern and wrote a June 3, 2016 column denouncing the Koch brothers for “buying politicians” in order to prevent any effective policy against global climate change.  “[B]uying politicians is a pretty good business investment for fossil-fuel magnates like the Koch brothers.”

Corporations buy politicians because doing so is a great business investment.  As financial regulators we always said that a bank’s highest return on assets is on its political contributions.  Krugman knows that the Kochs buy politicians in order to rig the system, but conveniently pretends to believe that Goldman Sachs does not buy politicians as a “good business investment.”   As long as politicians take money from these corporations their CEOs and their political cronies will continue to rig the system.

Given that Krugman’s column describes Hillary’s nomination as “inevitable,” I have a question for him.  Why aren’t you making every possible effort to convince her to take the Bank Whistleblowers United’s (BWU) campaign financing pledge to stop taking money from the Wall Street felons?  Indeed why aren’t you urging her to stop taking money from big business, make public the texts of the speeches she gave to Goldman Sachs, and donate Goldman’s speaking fees to a real charity?  Bernie has proven that Hillary need not take money from big business in order to raise ample funds for her campaign.  She can run a clean campaign finance program and dramatically increase her popularity.  In your eagerness to defend her you have become her enabler-in-chief.  You encourage Hillary’s worst qualities, the ones that cause her terrible unfavorable ratings.  Bernie is not causing Hillary’s problems, but you are adding to them.

8 responses to “Krugman’s Karma Forces Him to Feel the Bern and Attack the Kochs for “Buying Politicians”

  1. Thanks for your work supporting Bernie. I do have one question though. Why does he continue to say we need to tax Wall Street to pay for his government programs. We all know taxes do not fund spending. Does he reject MMT, does not understand MMT, or is he being politically disingenuous? Yes, Wall street needs to be better regulated, but not by “fooling” the American people about taxes and spending.

  2. Very good point. It’s crazy that Krugman is spending his time bashing Sanders rather than holding Clinton’s feet to the fire.

  3. Markq, you bring up a valid point, unfortunately politics and economics rarely coexist in harmony.

  4. What’s the over-under on Krugman being shocked-SHOCKED when Hillary collapses on any and all of the proposed spending on her website after the first Republican says deficit? I don’t think it gets to February.

    • SufferinSuccotash

      Give her a break. The terms “belt-tightening” and “government is just like a household” won’t be heard until February.

  5. Taxation is part of the polarizing mechanism, distorting the economy. As far as MMTers are concerned, the demand destruction by untaxing wealth, and shifting taxation onto labor should be clear.

    In a capitalist state with government not operating productive industries, government operates out of an allocation of surplus from the private sector. How do you source this? Tax distribution, along with the MMT fiscal policy ideas. MMT: the money is spent into the economy and then pulled out as taxes. Taxation is part of the provisioning process for government, and how the allocation sourcing is distributed. In other words, whose demand is being eaten into and how much?

    And so yes, taxing Wall Street is a good idea, more specifically, unearned income. Labor should be untaxed, since we are largely at subsistence level.

  6. MarkG- I suspect it is because Bernie doesn’t want to get into that argument and be dismissed, like many MMT’ers including myself, when trying to explain how the economy works to people that will wrongly accuse him of not understanding the subject. I think it’s a “pick your battles” situation. I know I have gotten nowhere trying to convince people how it all works. The sad fact is (paraphrasing a study from a while back) “misinformed people rarely change their minds when presented with the facts”.

  7. There is absolutely zero chance that broaching the topic of MMT would be productive on the campaign trail. Just look at the backlash when Trump said “We just print the money!” Truest thing to ever come out of his mouth, and he was pilloried for it. (No, I don’t believe the Don has been secretly reading up on MMT.)

    Raise MMT awareness from office, not from the stump. Filibuster a “balanced budget” bill and fill the time with fiscal fidelity.