Krugman's Economics 101: Clinton Knows What She’s Talking About; Obama Leans Right

Photo credits: AP

Reminding readers of the potential for a recession, Paul Krugman, professor of Economics and International Affairs at Princeton University, critiques what the leading candidates have to say about economic policy in his op-ed column in today’s NY Times. Below are abbreviated versions of Krugman’s responses to each candidate's economic proposal (to read his original column, go here):

McCain:

But shouldn’t we worry about a candidate who’s so out of touch that he regards Mr. Bubble {Greenspan}, the man who refused to regulate subprime lending and assured us that there was at most some “froth” in the housing market, as a source of sage advice?

Giulani:

...his answer to the economy’s short-run problems is a huge permanent tax cut, which he claims would pay for itself. It wouldn’t.

Huckabee:

...well, what can you say about a candidate who talks populist while proposing to raise taxes on the middle class and cut them for the rich?

Romney:

He’s still offering nothing but standard-issue G.O.P. pablum about low taxes and a pro-business environment.

Edwards:

...he proposed a stimulus package including aid to unemployed workers, aid to cash-strapped state and local governments, public investment in alternative energy, and other measures.

Clinton:

Last week Hillary Clinton offered a broadly similar {to Edwards’} but somewhat larger proposal. (It also includes aid to families having trouble paying heating bills, which seems like a clever way to put cash in the hands of people likely to spend it.) The Edwards and Clinton proposals both contain provisions for bigger stimulus if the economy worsens.

And you have to say that Mrs. Clinton seems comfortable with and knowledgeable about economic policy. I’m sure the Hillary-haters will find some reason that’s a bad thing, but there’s something to be said for presidents who know what they’re talking about.

Obama:

The Obama campaign’s initial response to the latest wave of bad economic news was, I’m sorry to say, disreputable: Mr. Obama’s top economic adviser claimed that the long-term tax-cut plan the candidate announced months ago is just what we need to keep the slump from “morphing into a drastic decline in consumer spending.” Hmm: claiming that the candidate is all-seeing, and that a tax cut originally proposed for other reasons is also a recession-fighting measure — doesn’t that sound familiar?

Anyway, on Sunday Mr. Obama came out with a real stimulus plan. As was the case with his health care plan, which fell short of universal coverage, his stimulus proposal is similar to those of the other Democratic candidates, but tilted to the right.

Krugman concludes with an appropriate jab at the superficiality of media coverage of the 2008 campaign:

In short, the stimulus debate offers a pretty good portrait of the men and woman who would be president. And I haven’t said a word about their hairstyles.