The Economics and Politics of Chaos

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Krugman Blog / NYT

The Economics and Politics of Chaos

The best commentary I’ve seen on what just happened is visual, and can be seen here. Unfortunately, I don’t think I should put that image on a Times web site.

But how did we get here? Interestingly, Ezra Klein implicitly offers two quite different interpretations.

First, he describes very well what the policy issue, such as it is, amounts to:

This is all about stopping a law that increases taxes on rich people and reduces subsidies to private insurers in Medicare in order to help low-income Americans buy health insurance. That’s it. That’s why the Republican Party might shut down the government and default on the debt.

Indeed. There’s a definite class-war aspect to this fight, pitting the interests of the 0.1 percent against those of lower-income families. But at this point the 0.1 percent, by and large, are pleading with the GOP to knock it off. So while class war may have been where this started, the monster has long since escaped from its cage; even Karl Rove, more or less the designated defender of upper-class privileges, is whining that the party won’t listen to him.

In a different post, Klein alludes to this by quoting Mann and Ornstein:

The GOP has become an insurgent outlier in American politics — it is ideologically extreme; scornful of compromise; and dismissive of the legitimacy of its political opposition.

It’s very important, I think, to realize that while right now the GOP seems to have been taken hostage by its radical wing, the general strategy of responding to a lost election by trying to gain through blackmail what the party couldn’t gain at the polls was a consensus decision, arrived at way back in January. If the leadership is now dismayed by where it finds itself — leading a party of “lemmings with suicide vests” — it has only itself to blame.

And a crucial piece of the story, I think, is the conservative bubble, which among other things means that many on the right have wildly distorted ideas about Obamacare. A fair number of GOP politicians may actually believe that it’s a communist plot, or the moral equivalent of slavery, or something.

Coming back to the class warfare issue: my working theory is that wealthy individuals bought themselves a radical right party, believing — correctly — that it would cut their taxes and remove regulations, but failed to realize that eventually the craziness would take on a life of its own, and that the monster they created would turn on its creators as well as the little people.

And nobody knows how it ends.

Paul Krugman

Paul Krugman is professor of Economics and International Affairs at Princeton University and a regular columnist for The New York Times. Krugman was the 2008 recipient of the Nobel Prize in Economics. He is the author of numerous books, including The Conscience of A Liberal, The Return of Depression Economics, and his most recent, End This Depression Now!.

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