By William K. Black
(Cross-posted and Benzinga.com)
Chris Matthews considers it urgent and essential that President Obama and House Speaker Boehner reach what they call a “Grand Bargain” that would impose an austerity budget and begin to unravel the safety net. Why is it essential? Matthews provided no analysis or discussion. It was simply obvious that austerity and beginning to unravel the safety net were essential because otherwise we would face budget austerity via the so-called “fiscal cliff.” The form of austerity imposed by the fiscal cliff would throw us into recession, increase unemployment, increase the budget deficit and the debt, cut social programs (and military spending), but not unravel the safety net. If you think that adopting even greater austerity plus far more severe cuts to social programs and the safety net (i.e., what I term the “Great Betrayal”) in order to avoid “fiscal cliff” austerity is logically insane – then you might be rational. Matthews, however, thinks that ability to use logic makes you a problem.
On Friday, November 9, 2012, Matthews advised his viewers that it was essential to ignore Paul Krugman’s objections to the economic impact of the Grand Bargain because he was on “the far left.” (Matthews then danced around that label.) At no time did any of the MSNBC hosts ask anyone with economics expertise whether austerity and beginning to unravel the safety net would be harmful or helpful to the nation. The logical incoherence I have explained was never mentioned. The only time an economist was mentioned was Matthews’ fact and logic-free denunciation of Krugman. Matthews did not explain why Krugman opposed the Grand Bargain.
Matthews claimed that it was essential for Congress and the public to ignore a Nobel Laureate in Economics’ warnings that what was being proposed was a bad plan that would harm our economy. Matthews said that Obama (a lawyer and politician) must tell Krugman that he was going to ignore Krugman’s economics warnings because “I’m President, you’re a columnist.”
Matthews has again proved one of our family rules – it is impossible to compete with unintentional self-parody. Let’s try a slight variant of Matthews’ motif. If a Nobel Laureate in Physics writes a column warning that the President is proposing a bad plan to send humans back to the moon because the plan relies on bad physics the President should respond: “I’m President, you’re a columnist” – and proceed to ignore his warning.
Krugman is not remotely “far left” and his predictive record on economic policy is vastly superior to Geithner’s. Matthews and Obama might wish to consider that the July 2011 austerity deal would, under their own logic about the dangers of the faux fiscal cliff, have plunged America back into recession and doomed Obama’s chances of re-election whereas Krugman’s proposals for increased stimulus would have speeded the recovery and aided Obama’s victory.
Krugman is attempting one of the most difficult tasks in the world – saving a politician dreaming of creating a legacy from false promises of fame fed by his economically illiterate advisors. Matthews knows that Krugman would obliterate Geithner in any economic debate. The last thing that Obama needs more of is sycophants. They imperil his presidency and the nation.
Bill Black is the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. He spent years working on regulatory policy and fraud prevention as Executive Director of the Institute for Fraud Prevention, Litigation Director of the Federal Home Loan Bank Board and Deputy Director of the National Commission on Financial Institution Reform, Recovery and Enforcement, among other positions.
Bill writes a column for Benzinga every Monday. His other academic articles, congressional testimony, and musings about the financial crisis can be found at his Social Science Research Network author page and at the blog New Economic Perspectives.
Follow him on Twitter: @williamkblack
MSNBC is loaded with crypto political hacks. Virtually all there endorse bargaining away some of the social safety net.
They march in lockstep to the orders of the corporate overlords who pay their salaries. Liberals they are not.
“The President should respond: ‘I’m President, you’re a columnist.'”
From the guy who cheered the fact that Sandy hit the East Coast and helped Obama win.
YES, “Krugman would obliterate Geithner in any economic debate.”
BUT Obama has by his ” earlier betrayal” put the banker fox (Geitner) not only as the guard of the hen house but also as the suppier of fresh hens.
As Frederick Soddy wrote (1926,1933 “The Role of Money”),”
It was recognized in Athens and Sparta ten
centuries before the birth of Christ that one
of the most vital prerogatives of the State was
the sole right to issue money. How curious that
the unique quality of this prerogative is only now
being re-discovered. The” money-power ” which
has been able to overshadow ostensibly responsible
government, is not the power of the merely ultra-
rich, but is nothing more nor less than a new
technique designed to create and destroy money
by adding and withdrawing figures in bank ledgers,
without the slightest concern for the interests of
the community or the real role that money ought
to perform therein.
The more profound students of money and,
more recently, a very few historians have realized
the enormous significance of this money power
or technique, and its key position in shaping the
course of world events through the ages. … It is con-
cerned less with the details of particular schemes
of monetary reform that have been advocated
than with the general principles to which, in the
author’s opinion, every monetary system must at
long last conform, if it is to fulfil its proper role
as the distributive mechanism of society. To allow
it to become a source of revenue to private issuers
is to create, first, a secret and illicit arm of the
government and, last, a rival power strong enough
ultimately to overthrow all other forms of
Does this sound familar ? Check what William K Black has to say about “banks”.
BUT THERE IS HOPE. Maybe, just maybe Bernanke can give Obama an opportunity to join Lincoln.
As Lincoln set salves free, Obama could set “we the people free”.
One simple move-“QE 4 WAR”
All true. But then, we all knew this would happen. Barack Obama will take whatever deal he and his staff conclude is the best deal they can get. They will not let the deadline pass. They will no threaten to let it pass. They will not intimate in any way that they are willing to let it pass. They will allow the Republicans (and their corporate-Democratic allies) to maximize the leverage that the media’s ignorant doomsday-ranting confers on them. Said leverage will be used to mount the largest politically practicable attack on the poor and the weak, starting with the poorest and the weakest. As a group, these elites have convinced themselves that shredding the safety net is necessary and urgent, and even though the reasoning behind this conviction ranges from weak to non-existent, nothing will stop them from doing so. And certainly not a wee-weeing contest between Chris Mathews and Paul Krugman.
Chris Mathews is not a journalist. Media people like him (a.k.a. “access whores”) are remarkable for their intellectual incuriosity – standardized “expert” opinion is more than good enough for them. Repeating it and baking it into their programs’ narratives is what these people do. It’s pretty much all that they do. Larger issues just confuse them. Worse still, larger issues remind them of their limits and undermine their all-important egos. And even merely as a pundit and columnist, Paul Krugman knows the game and can be trusted to play it. We in the MMT world should think more than twice about the possible future consequences of polishing his “Nobel Prize”. (Which is awarded by bankers, not scientists, and which is institutionally unconnected to the real Nobel Committee.)
The question we face, and which has been posed in other threads on this site, is political – what comes next? What do we do *now*? Now that the election is over, and the elites are ready to recast it in their own interest, what can we do to stop or oppose them? And this is an especially big question for Bill Black, because his bank-regulating history and incredibly well-titled book (i.e. “The Best Way to Rob a Bank is to Own One”), along with his ebullient personality and always-apparent good humor, have combined to make him a much-sought-after guest on some pretty widely-seen ) shows. Also widely-heard, as in radio. Bill Black is the closest thing MMT has to a media star, and he will no doubt read these comments closely.
What should we tell him?
I’m still thinking about it.
Bill, Chris Matthews has always been Obama’s sychophant in chief! The one with the really big mouth!