Paul Krugman was on Democracy Now! yesterday morning (transcript here), and while much of what he said is well-known to readers of Open Left, it's worth highlighting how appearance there contrasted with his use as mere rhetorical foil on Face the Nation this weekend, during a segment with Austan Goolsbee. On FTN, his observation that Geithner's plan was "heads I win, tails the taxpayers lose" was quoted, only to tee up Goolsebee's talking point "refutation". There was no opportunity for a back-and-forth, which would have left Goolsbee looking like a fool. On Democracy Now!, naturally, Krugman got the chance to explain just what he meant. These contrasting appearances provide a telling snapshot of the dismal state of economic discourse in the midst of the greatest crisis since the Great Depression. First the clip, then more analysis.
AMY GOODMAN: Members of the Obama administration hit the Sunday talk show circuit yesterday to drum up support for the administration's plan to purchase up to a trillion dollars in troubled mortgages and other so-called toxic assets. Austan Goolsbee, a key White House economic adviser, was on Face the Nation. Harry Smith of CBS News quoted from your writing about the administration's plan. This is an excerpt.
HARRY SMITH: There's been a lot of negative press about this thing that hasn't even been unveiled yet, and Paul Krugman, in his blog today, said, "For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose."
AUSTAN GOOLSBEE: I don't think that's an accurate description. I mean, if the government doesn't make money, the private sector doesn't make money either. I mean, these guys are coming in in a partnership, and one of the reasons you want to have the partnership is precisely so that, A, the government doesn't massively overpay for these troubled assets that are on the balance sheets, and B, so that everybody's got skin in the game and you don't get into situations where you're paying guys for failure.
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