May 3, 2005

#181: Krugman "gets it"

P. Krugman

KRUGMAN TRUTH SQUAD

Programs for the poor are “poor” programs. That has been a mantra of the left for as long as we can remember. This is shorthand for the concern that if better off people are allowed to opt out of social programs, those programs atrophy from neglect and become only for persons who are poor or otherwise dependent. Paul Krugman gives a full exposition on this view in A Gut Punch to the Middle (05/02/05). Fear and loathing practically oozes out of every paragraph. The reason is simple. Modern liberalism depends on expanding dependency, not contracting it. To them, dependent people are assets. And assets must grow, not shrink.

The reason Bush’s “progressive indexing” of future Social Security benefits is a gut punch is because it threatens to free not just middle class workers, but also lower middle class workers, from the dependency they have been in for years. A reform that encourages people to invest in personal retirement accounts and depend less on Social Security is a major step toward an ownership society. But the problem for Democrats is that people who own things are no longer reliable Democrats. Krugman gets it! The fraction of the truly poor is small and getting smaller and the importance of Social Security will become smaller too if modest wage earners can become more independent. So the real gut punch here is to Krugman and the liberals, not to workers of any income level. The reason for all the teeth gnashing is concern that Bush will divide their troops.

The good news is that overall the liberals are losing these days. What we are witnessing should be viewed as death throes. Even the “limousine” liberals that Krugman hangs out with are shrinking in number and are now confined largely to boardrooms and editorial staffs of media elites, Hollywood and the west side of Manhattan. To us the interesting question is which rats will abandon this leaky boat? And when? Well, Hillary is certainly looking for a gangplank already. In
Squad Report # 176 we reported Krugman’s expressed dread of another Clinton candidacy. So we are betting that the Krugster will “go down with the ship.” He’s what American’s need. An irrelevant loser they can depend on.

[The Truth Squad is a group of economists who have long marveled at the writings of Paul Krugman. The Squad Reports are synopses of their discussions. ]

Posted by John Weidner at May 3, 2005 7:27 AM
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