Why Krugman Is Wrong

Barack Obama and New York Times columnist Paul Krugman have been engaged in something of a public spat. Krugman has criticized Obama's willingness to negotiate with drug and insurance companies over health care reform as willfully naive. In Krugman's opinion, real change necessitates hard-nosed tactics, not compromise. Besides, Republicans and pharmaceutical companies will never compromise. So what good is a touchy-feely Obama, who wants us all to "just get along."

Yesterday I debated with a colleague who leans closer to Krugman on these issues than Obama.

My response? Real change requires a public mandate coupled with compromise; that the Democrats lack a mandate because they have no easily identifiable brand the public supports; that Obama is in a better position than any other candidate (particularly Hillary Clinton) to create a brand of reconciliation and pragmatism; and that a mandate and compromise will cause Republicans and corporate interests to change by public will. By contrast, electing a Democratic bull-dozer to take on the GOP the way George W. Bush has taken on the world will not yield positive results. Only bitterness and temporary change.

To my surprise, these points were made much more intelligently in a recent Newsweek column by Jonathan Alter. Alter authored a book on Franklin D. Roosevelt and provides some history lessons on how FDR successfully implemented the New Deal (note: it was not, contrary to popular belief, by bull-dozing opposition). The full article is here, with some highlights below:

Krugman is a populist. He writes that if nominated, Obama would win, "but not as big as a candidate who ran on a more populist platform." This is facile and ahistorical. How many 20th Century American presidents have been elected on a populist platform? That would be zero, Paul. You could even include Al Gore, who won the popular vote in 2000. Instead of exploiting the peace and prosperity of the 1990s, Gore ran on a "people vs. the powerful" message. It never ignited.

Krugman says that pundits like me who reject sharp anti-corporate rhetoric and prefer cooperation are "projecting their own desires onto the public." We'll see. But last time I checked, millions of Americans still work for corporations or aspire to do so and bashing them wholesale is a loser politically. It works sometimes in Democratic primaries with a heavy labor vote (though not for Dick Gephardt). But not in general elections. The last two Democrats elected president-Jimmy Carter in 1976 and Bill Clinton in 1992-also campaigned during recessions. Both were smart enough to reject populism in favor of a responsive but upbeat message. ...

When I asked [John] Edwards how any agreement could be reached without at least talking to these players in the system, he said he would offer a seat at the table to members of Congress who represent their interests. In other words, it's OK to have the congressional stooges there, but not the interests that pull their strings?

The Edwards alternative-to simply overrun them-is unrealistic. Even a 1932-style mandate at the ballot box (highly unlikely) wouldn't make them capitulate. Look what happened when New York Gov. Eliot Spitzer, elected in 2006 with a huge mandate, tried to "steamroll" a bunch of hacks in Albany. He got his head handed to him.

To call Obama "anti-change," as Paul Krugman does, is anti-common sense. Leadership requires a mixture of confrontation and compromise, with room for the losers to save face. "They have to feel the heat to see the light," LBJ liked to say. That heat is best applied up close. In public. Across the big table.