In Quick Hits, counterspin calls attention to a several weeks old Alternet piece by Open Left's Dave Johnson, who wrote the original as a Fellow at Campaign for America's Future, "6 Shocking Ways Conservatives Helped Cause the Economic Destruction of America". It's actually more than that. It's more like "6 Charts Showing 6 Shocking Ways Conservatives Helped Cause the Economic Destruction of America Starting with the Election of Ronald Reagan", and it reminded me of another item I noted recently, but didn't do a diary about, Paul Krugman's late May blog post, "Did The Postwar System Fail?" What struck me about these items in tandem is the contrast between the density of Krugman's argument vs. the conversation-stopping clarity of Dave Johnson's sequence of charts.
Johnson's piece starts off bluntly, followed by a series of charts telling a simple, but powerful story (the first three are included):
It seems that you can look at a chart of almost anything and right around 1981 or soon after you'll see the chart make a sharp change in direction, and probably not in a good way. And I really do mean almost anything, from economics to trade to infrastructure to ... well almost anything. I spent some time looking for charts of things, and here are just a few examples. In each of the charts below look for the year 1981, when Reagan took office.
Conservative policies transformed the United States from the largest creditor nation to the largest debtor nation in just a few years, and it has only gotten worse since then:
Working people's share of the benefits from increased productivity took a sudden turn down:
This resulted in intense concentration of wealth at the top:
The rest of the charts illustrate further links in the chain:
And forced working people to spend down savings to get by:
Which forced working people to go into debt: (total household debt as percentage of GDP)
None of which has helped economic growth much: (12-quarter rolling average nominal GDP growth.)
In contrast, Krugman gives us one much more ambiguous chart, comparing the 1970s and 2000s:
Funny, isn't it? The Ford-Carter years look no worse - in fact, somewhat better - than the Bush years, especially if you look from business cycle peak to business cycle peak. And that was in the face of two very severe oil shocks. So a question for all the people who say that the economic troubles under Jimmy Carter discredited postwar economic policies: why don't the troubles under Bush similarly discredit post-Reagan policies? Funny how that works.
Krugman's argument is similarly nuanced. On the one hand, he says, 'yes, there was a problem in the 1970s', but on the other hand, he says that the measures taken went far beyond what was necessary:
Here's what I think: inflation did have to be brought down - and Paul Volcker, not Reagan, did what was necessary. But the rest - slashing taxes on the rich, breaking the unions, letting inflation erode the minimum wage - wasn't necessary at all. We could have gone on with a more progressive tax system, a stronger labor movement, and so on.
My point here is not that Johnson is right and Krugman is wrong. Both are right, in their own ways. But the problem that even Krugman has recognized (albeit not in those terms) is one of hegemonic warfare. And only Johnson is responding in a manner that reflects that, working to construct a counter-hegemonic narrative.
Krugman's blog post is only one of many in his ongoing struggle to discredit a number of conservative economic narratives. This is one that grew out of trying to debunk the myth of Reagan as some kind of economic savior, as Krugman explains at the beginning of this post:
I've been posting about the contrast between the popular perception on the right that America had slow growth until Reagan came along, and the reality that we did fine pre-Reagan, in fact better; see here, here, and here. And what I'm getting as a common response - including from liberals - is something along the lines of, "That's all very well, but by 1980 the postwar system was clearly failing, so what would you have done instead of Reaganomics?"
Which all goes to show just how thoroughly almost everyone has been indoctrinated by the current orthodoxy.
So, it seems clear to me that Krugman recognizes the need for the sort of argument that Johnson is making, but he's still too much wedded to his own training as an academic economist to fully embrace the sort of argumentation that's needed to get the job done. He's also probably constrained by his own habits of thought that revolve around the New Keynesian modeling tradition.
Yet, Krugman has already displayed a remarkable ability to grow beyond his old boundaries in public, in real-time. So why not suggest that he can and should do more? There is a moral imperative here, and moral imperatives are what have driven him before--not just the imperative toward honesty, but also toward public service, the root reasons that economics was born as a branch of moral philosophy in the first place.
