The horizon is not so far as we can see, but as far as we can imagine

Paul Krugman Against Bernie Sanders

So, Paul Krugman has a column in which he says he thinks Clinton has better policy proposals than Sanders:

As far as I can tell, every serious progressive policy expert on either health care or financial reform who has weighed in on the primary seems to lean Hillary. (emphasis mine)

Ah.  Serious.

Ok, Paul. Let’s bring up some history, Paul.

You supported Bernanke, strongly. Not just in his appointment as Federal Reserve Chairman, but during his tenure–during which he refused to do anything about the housing or financial bubbles.

Bernanke, for those who don’t know, was the man who plucked Krugman out of MIT and moved him to Princeton, where Krugman was a star. MIT had a lot of very brilliant economists, Princeton had very few.

Then, let us return to that word “serious.” For years, the word “serious” has been used to freeze out outsiders. “Serious” foreign policy experts are the most pernicious: They were virtually unanimous in their support for the Iraq war, for example.

We know how that went.

“Serious” almost always means you are part of the establishment.

Because of this, the “serious policy experts” are almost all wrong. Take Obamacare (ACA). It’s done some good, but a lot of problems have resulted in which people can’t use it because the deductibles are too high.

The serious people (like Krugman) who supported the ACA somehow didn’t predict this.

The un-serious people who opposed the ACA did predict it.


Meanwhile, Krugman links to Paul Starr of Politico (Politico, ok), who attacks Bernie’s “Medicare for All” policy.

Starr’sattack has three prongs:

  1. Bernie’s not viable in a general election because he is a “socialist” and Americans will never vote for that because they say they don’t like the word. Might be true, but head-to-head polls show Bernie doing just fine.
  2. Medicare-for-All can’t be passed, because it would involve a large tax increase.
  3. Medicare- for-All is a bad idea because it is inefficient and pays only 80 percent of costs.

It’s a bad sign when you’re misleading your readers. Here’s what Aetna has to say about Medical Cost Ratios:

In general, the minimum percentage of premium health plans must spend on health care is 85 percent for large groups and 80 percent for small groups and individual policyholders.

So, at most, a 5 percent difference.

Starr also suggests that Medicare is less efficient. This is untrue. In fact, Medicare spends about 2 percent on administrative costs. Private health care plans spend about 17 percent.

So, Medicare is more efficient and its ratio is only slightly less than the private ratio. If the US switched to a Medicare-for-All system, it would be simple enough to go to 85 percent and would still cost less.

The international experience for single payer is that it costs about two-thirds what US healthcare costs.

Even in a non-single payer system, Medicare has kept costs down better than private insurance:

Ok. So, Medicare-for-All would cost the Americans less than private insurance + ACA has. To try and deny this is like saying the sun doesn’t rise in the morning. It’s not not just wrong, it’s not just a lie, it is delusional.

Would taxes have to be raised?

Absolutely. But since Americans pay, y’know, premiums, if the tax raises were distributed properly (a.k.a. if corporations paid their fair share), most people would have more take-home money in the end, or corporations would be paying less for insurance. There have been cases of corporations going to Canada just to avoid having to provide medical insurance.

That leads to the feasibility argument. Can Medicare-for-All be passed? Probably not. But it won’t be passed if the President doesn’t try, that I guarantee.

It can be sold, however; Medicare is popular. And it is popular with the Republican base, I might add.

Starr’s argument really comes down to obfuscation (that’s the polite word) and, “It’s not likely to pass so we shouldn’t try.”

Sanders has been a member of Congress for a long time. If he can’t get what he wants, he’ll negotiate–that’s how it works. And he’ll get more because he’s starting from a stronger position.

Meanwhile Clinton won’t even try.

As for financial reform, it is hard to even. Sander’s position is “break up the too-big-to-fail banks” and “restore Glass-Steagall.” That includes breaking up the too-big-to-fail shadow banks. The Clinton position is that shadow banks should be regulated, but not broken up or subject to Glass-Steagall. Her position is the weaker position, and arguments otherwise are obfuscation, at best. Krugman obfuscates this in his actual post, suggesting that Sanders doesn’t think shadow banks are too big to fail.

Krugman appears to have become so much a creature of the status-quo and New York elites he isn’t worth more than a casual dismissal.

I feel bad about Krugman. I remember when he was essentially the only national columnist willing to take on George W Bush.

But one can, I suppose, only expect so much from a man who spent his life at MIT, then Princeton, then writing for the New York Times. I had hoped Krugman would be an exception.

So, Paul:

Or it could be because they are, one and all, corrupt corporate lackeys. I report, you decide.

If it barks like a dog.

I was right about Iraq. I was ahead of the “serious financial experts” on the housing boom and financial crisis. I predicted correctly that the economy would never recover for most people after 2008. I said the next crisis would start in China. I said that America was ripe for a man-on-horseback many years ago (presaging Trump.)

I’m not a “serious” analyst in the way people like Krugman mean it, because I’m a nobody.

Not a member of the club.

But regarding financial reform, I say Sanders is better than Hilary. And regarding health care reform, well, judge for yourself if Sanders proposal is impossible, but it is better policy as policy.

Paul Krugman. Well, he did have one extended period of bravery when it mattered greatly. For someone who is a member of the establishment, that is remarkable. I will remember it, honor its memory, and not be too harsh on him.  Given the world he lives in, his beliefs are not surprising.

I had hoped he would prove to be more than a creature of his circumstances, that he could sustain his bravery and insight, but it was an unreasonable and unfair expectation.

Goodnight Paul. Thank you for standing up when you did.

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  1. Ian Welsh

    Since this is about the primary and I know such issues can be heated, I request that commenters keep it relatively civil. Yes, you know when you aren’t being civil.

  2. That leads to the feasibility argument. Can Medicare-for-all be passed. Probably not. But it won’t be passed if the President doesn’t try, that I guarantee.

    Of course the biggest problem is that Medicare-for-all wipes out the insurance and payments-administration systems as well as greatly reduces doctors’ bargaining power, in one fell swoop. Of course, you’re going to say—and rightly—“yay! what’s not to like!” The problem is that those two lobbies are now very deeply rooted in American society (I used to hear billing clerks talk about work on the bus when I lived in the USA quite often, it’s surprising how many there were), and “president trying” is not cost-free—it involves taking on these lobbies, and almost certainly failing. Since at minimum, the majority of the population worships their doctors.

    That’s the whole problem with the “didn’t even try” narrative. What are you going to sacrifice for a president who “tries” on medicare-for-all and fails—burning political capital that could be used on a more incremental approach? Until the population is willing to ignore the doctors’ lobbies and actively throw the insurance industry under a bus (including all the jobs that are now associated with it), the politics do not bear about the “President must try” proposition.

    We are, yet again, going to be relitigating Obamacare, it seems, *sigh*. Your problem is again shown in this post: you present the very real merits of Medicare-for-all, but those are all policy questions/answers, and therefore almost quaintly besides the point.

    Of course I think Sanders is better on a lot of issues, but if he ever comes to office, boy oh boy are y’all going to be disappointed when he takes stock of what is politically possible, and tones down policy proposals not to what is right, but what can be passed in the other branches of government.

  3. Ian Welsh

    Don’t be an ass.

    I said in the post itself that what he wants to do would be difficult politically.

    As for Doctors, many of them are doing well out of this system. Many are not. It is not a monolithic block.

  4. I said in the post itself that what he wants to do would be difficult politically.

    Maybe so — it’s not whether it would be difficult, that’s the question, though. It’s the approach. What approach to you expect him to begin with? What do you think he should give away, and for what?

    As for Doctors, many of them are doing well out of this system. Many are not. It is not a monolithic block.

    Certainly it isn’t, but the ones who are doing well have been setting the tone, for obvious reasons. Plus, you know, they aren’t the only vested interest that has conceivable backing in the population.

  5. Ian Welsh

    Didn’t write the article you wanted, eh? We’ll see if I feel like it later.

    In the meantime, note that I said if he couldn’t get Medicare for all, he can negotiate for less.

    Just like Clinton.

    You’re responding to the article you think I wrote, not the one I did.

    I’m done. Continue without me.

  6. V. Arnold

    Why does anybody even listen to Krugman; he’s an educated idiot, IMO.

  7. Brian

    For me the biggest irony here is that Krugman is now using the word “serious” to attack Sanders’ supporters, while he himself spent the last 15 years mocking the “very serious people” who supported Iraq, tax cuts etc. Oh well.

  8. Jeff Wegerson

    Thanks for the clear-eyed view of Krugman, past and current.

    The right knows how to demand purity and accept progress. They will demand complete privatization of Medicare yet gladly accept moving the beginning age back from 65 to 70 or even 66. Sanders likewise will demand Medicare for all yet gladly accept moving the age forward to 60. And that is how to eventually overcome the lobbyists. The same way the right has been killing off unions. Bit by bit.

  9. someofparts

    Well, archdruid says we should expect to be dealing with President-elect Trump next November.

    Is anyone really surprised that our man-on-horseback turns out to be Bart Simpson?

  10. EmilianoZ

    Krugman has been on my ignore list for a long time. I read Naked Capitaliem every day. Even when they reference him I don’t bother. Since 2008 I must have read 3 or 4 posts by him and been disgusted by those. Everything about him screams “Establishment”. He looks so smug. His writing style is smug.

    Americans may be attached to their physicians but I’m pretty sure they would gladly throw the insurance industry under the bus. These are the guys who set the deductibles so high they can’t use their insurance. These are the guys who will do anything to deny you some costly operations, who set the co-pays as high as they can, who make sure the hospital will throw you out before you’re properly healed.

    The business between the hospitals and the insurance companies seems really murky. I once inspected some hospital bills. The hospitals usually ask for some astronomical prices but the insurance companies only pay a small fraction, 30% or lower.

  11. Mandos says that, “The problem is that those two lobbies are now very deeply rooted in American society…” Um, no, and especially not the insurance lobby which is mostly despised by American society. They are deeply rooted in the pockets of the American legislature, which is a horse of an entirely different color.

    “Until the population is willing to ignore the doctors’ lobbies…” The population has been ignoring the doctors’ lobby for decades. It barely knows that the AMA even exists. Unfortunately, the same cannot be said for legislators.

    “…and actively throw the insurance industry under a bus” The public has been actively throwing the insurance industry under a bus ever since the “insurance reform” debate first began, perhaps more than is really justified. Sadly, the legislature has crawled under the bus and gleefuly accepted the money that the insurance industry was offering them from underneath that bus.

  12. As to Paul Krugman, I can only say that no man is entirely useless; he can always be used as a bad example. I cite him frequently on my blog, in the form of providing a quote from his column and describing why it proves him to be an idiot.

  13. nihil obstet

    On doctors:

    About half of U.S. doctors are now employees, and I keep reading that more of them are expressing increasing unhappiness about the pressure to streamline service to maximize income. There seems to be increasing unhappiness from doctors about the way the medical business is currently set up in the U.S.

    In addition, I’m not sure that the much vaunted American love of their doctors is as great as is frequently reported. There is fear that lack of choice would assign them to a bad doctor (cough, mutter, immigrant, minority, mutter, mutter), but so many lack access to doctors at all or have had to look around in insurance networks or have had issues with the personnel (usually billing personnel) in medical offices, that the Marcus Welby fantasy of the small private practice with a doctor devoting his full attention and time to you is long gone.

  14. filegumbo

    Couldn’t Bernie pass medicare for all via reconciliation? Isn’t that how ACA was passed?

  15. reslez

    “Relitigating” Obamacare became a foregone conclusion a minute after Obama signed it into law! Every “nonserious” person who examined it seriously knew it was only a stopgap giveaway to the insurance industry that would have to be revisited in 5-10 years. It fell far short of actually solving the US’s health care problem, but then it was never intended to.

    Many doctors hate the current system. They hate wrestling with insurers and seeing patient care dictated by blindsighted policy. They are not going to oppose reform en banc.

    We can’t reform the system because people will lose their jobs? Tell you what, I bet most people currently in the industry who spend their day denying claims and wrangling payment codes would far prefer retraining for a career change that involves actual patient care! That would have a chance of improving our abysmal health outcomes, too. Oh cry me a river for these workers. They hate their jobs as much as we do!

    Krugman is ridiculous on this, his posts have been ridiculous, and his response has been to complain that he is being ridiculed by mean people.

  16. Bill Hicks

    I, too, was a big fan of Krugman during the Bush years–up until the time he shilled for the TARP law. Since then he has indeed been on my “ignore” list.

    Krugman really isn’t so different from many other “angry” liberals from the 2001-2008 time period who decided that the election of a black Democrat suddenly made everything hunky dory (which is why the antiwar movement dried up as of 1/20/09). For Krugman the “game” itself matters more to than trying to alleviate the ever increasing levels of economic injustice in this country. It’s sad, really.

  17. Sorites Problema

    Norman Solomon did a fine job on both David Trilateral Commission Brooks and Paul. It ran in a couple of places. I salute Norman’s tone as there is an Alice in Wonderland quality to both these guys this week.

    Paul is becoming the NYT’s personal lap dog for Hilary’s “policy” .. and I just am curious what the payoff for his support is going to be. The what’s-in-it-for-me agenda seems less than covert to my little eyes.

    Has his overpaid position at CUNY really really gone to his head and he forgets about us wee folks?

    If it weren’t a waste of time I’d send him a Venn diagram of his “logic” and point out he needs a refresher in soriteses. I love your deconstruction, Ian.

    But just maybe the wiser course would be just to give him the poverty tour up in East Harlem …

  18. The Tragically Flip

    Krugman is probably a generally decent guy and I think he’s sincerely wrong, not a “shill” and all the rest. He’s been on the side of the angels more often than not.

    But yeah, of the times he’s been wrong, this is the worst. And throwing “serious” at Bernie supporters is pretty damn bad, especially for him.

  19. Michael Taylor

    I would encourage your readers to actually look at Dr. Krugman’s long record, especially through the 1990’s to 2008 . It was outstanding and unmatched by anyone writing in a public forum on a weekly basis (degree of prescience, accuracy, etc. -credit where credit is due!). He was one of the only voices in the MSM to assess the Bush quagmire and call the housing bubble. I do agree that he has seemed less effective when addressing aspects of financial regulation or his recent concerns about Bernie. I do believe he is wrong on Sanders, but I also thought that Wall Street should have faced personal legal consequences for 2008!

  20. Daize

    Insurance industry? Lobby? I say throw all of those god-damned mother-fuckers under the bus, and hang the rest.

    If you think those stupid fucking whiny bitchez (I hate insurance companies even in France) are gonna survive what is coming, you are dead wrong.

    The times they are ‘a changin’; don’t be left behind.

    Love ‘n Kisses,

  21. Margaret Thatcher famously said “There is no such thing as society”. This caused a lot of confusion but I am pretty sure she was referring to what a lot of people now call the “establishment” or “metropolitan elite”. To me that just reeks of conspiracy theory. Most people just do not have that multiplicity of friends but know they can always call someone if they need to. So its a network, but it is not organised or has any set policy. As always, cock-up rules!

    I am also intrigued by how you claim to have been “right about Iraq”. If this isn’t an establishment view nowadays I don’t know what is. Although the Iraq war and it’s aftermath were appallingly conducted, it is difficult to prove a negative. Why was Saddam so determined not to allow Hans Blix and his weapons inspectors in when he knew he had no WMD? Answer: to maintain the deterrent effect. Why did he need that? Because his intention was to re-invade Kuwait. We prevented that.

    I am not an expert on Obama’s medical reforms, but you may like my post at

  22. i saw paul krugman speak once and was very disappointed by his insipidity – he co-appeared with, and seemed to me in his depth of insight and analysis, to be very similar to e.j. dionne, columnist for the washington post

  23. jsn

    Krugman outed himself right at the start of the Obama administration as gatekeeper of the Democratic Party Left with his muddleheaded attacks on balance sheet views of finance (MMT) as mysticism.

    Since then he has recognized the counter-productivity of austerity and regularly labeled its acolytes as Very Serious People. Shall we start referring to him as Very Serious Paul?

    Is Bart Simpson old enough yet to run for President?

  24. Is the adoration of Trump on the right, or the rise in Sanders’ support among Democrats, a real rejection of the usual Paid-Off-By-TPTB politics as represented by Bush and Clinton?

    On the Democratic/Left side, if that support is linked to Sanders’ ideas about fiscal reform, a government’s social contract with its citizens — and doesn’t just represent a general dissatisfaction with the times we’re living in — then Krugman needs to reconsider some of his reported comments about Americans and “Socialism”.

    I agree with the bulk of what Krugman has written, but pre-2008 and after. He understands the redistribution of wealth in America, what that means for the lives of actual people, and what the stakes are. My only question to him would be, in terms of the inequality between Owners and everyone else, how much worse do things need to get; how much more unequal, before there’s a change? Call it Socialism; so be it, but that change needs to be made.

    Any changes either Krugman or Sanders have argued for will be resisted by the Owners. If Krugman is arguing for evolutionary change, in small increments, I couldn’t agree — and I don’t see Mrs. Clinton having the spine to really face down TPTB. Appeasers never do.

  25. Hugh

    Another blogger eCahn and I elicited Krugman’s connection to Bernanke in an FDL forum shortly after he received his pseudo-Nobel. It came up in the context of us criticizing Bernanke. Krugman volunteered that Bernanke who at the time was chair of the economics department got him his job at Princeton. For that, he was eternally grateful and would not criticize him. If you went back and looked, while Krugman did criticize Fed policy from time to time, his criticisms were often restrained and you probably won’t find more than a handful of instances where Bernanke’s name is even mentioned anywhere around such a criticism.

    I always think of Krugman as a straightforward neoclassical with Keynesian flourishes and as an unimaginative Democratic partisan. He is the very embodiment of the Establishment liberal. He will criticize certain aspects of the system but never the system itself which has so generously accorded him his wealth, positions, and privileges. This is why he will always go so far and no further. Waiting for Krugman to get it is an exercise in frustration. Like many here, I gave up on it and him years ago. And as Ian points out, if nobodies like us can see better and farther than Krugman and have much better track records than he does, what does this say about the elitist culture Krugman comes from and epitomizes?

    Krugman’s rep is vastly overblown. He was wrong on free trade in the 90s. He walked this back in the last few years but I have no idea where he stands on globalization. He was right to criticize Bush and to propose that the Obama bailout be more Keynesian, i.e. jobs oriented. But in retrospect, his criticisms of Bush fall into his Democratic partisanship and his Keynesianism, such as it was, has always been his one saving grace and the only thing that distinguished him from every other hack economist on the planet (even though I should add that Keynes is by no means a panacea). He has never understood, as all neoclassicals don’t, either money or banking.

    One of the things I like to do is look at artists. Thanks to the web, I can assemble a large collection of an artist and track their trajectory from their early formative years when they are still learning their trade and figuring out who they are to their revolutionary and mature work and then quite often to the point where they hit a creative wall and burn out. If you look at Krugman this way, you see someone coming out of a Democratic New Deal tradition who kept a few of these elements going into economics but overall followed the prevailing trend, neoclassicism in economics and the Democratic party, in politics. He had a few good moments but he was never a great thinker nor an original one. He was loyal, in that once bought he stayed bought. If I had to say where he hit his wall, where he completely embraced his mediocrity, it was in the first years of the Obama Administration when he realized that Obama had no use for him and no position was going to be forthcoming. It was at that point that Krugman decided to cash in, coast on his reputation, and channel his inner hack. I mean who knows, if Hillary Clinton becomes President as the Conventonal Wisdom to which Krugman adheres says she must, maybe she will need another toady. If so, Krugman will be ready in the wings.

  26. Some Guy

    Hard to say at this point how the primaries will turn out and if the establishment will have its way , but I think what is telling is how hard the establishment folks are having to work and how they are having to throw so many illusions to the wind in their fight. Any establishment victory this time around will be pyrrhic, with Krugman’s credibility just one of many establishment victims.

    For Krugman, I sense that this last week or two will mark a permanent shift in how he is viewed on the left side of the aisle, not by everyone of course, but by a significant chunk of people – Ian’s reaction is similar to my own. Like so many in the establishment, it seems Krugman is failing to see how the world is changing outside the Beltway and how little patience and tolerance is left for triangulating bs that pretends to care about the 99% but somehow finds a reason to ignore/mock/lash out against anyone who actually threatens to make a difference.

  27. Bruce Wilder

    Vichy Left is a good way to label Paul Krugman, Paul Starr and Hillary Clinton, not to mention Jonathan Chait, Ezra Klein and a number of other mainstream pundits with Democratic coloring, who have weighed in over the last couple of weeks with rationalizations for rejecting Sanders in favor of Clinton. Health care, where Sanders advocates single-payer and finance sector reform, where Sanders advocates Glass-Steagall, are the issues. Foreign policy, where Clinton has blood on her hands goes unmentioned for the most part.
    The arguments seem to come down to a combination of learned helplessness in the face of the triumph of the plutocracy and an interesting (to me) fear of system collapse. The reason not to try structural reform of health care is that the system may unravel, according to Paul Starr, if the industry is starved of predatory profit. The rationalizations of Mike Konczal for why Glass-Steagall is the wrong remedy for shadow banking problems has a similar underlying theme.
    I find it hard even to paraphrase the arguments of Krugman and Starr, or Konczal on financial reform. The arguments have, to my ear, an Alice-in-Wonderland quality, which may be more telling than their ostensible substance. They express a desire to give up on re-structuring our economic dystopia: the dismantling of the New Deal that got us our plutocracy and new Gilded Age should not be reversed. Such a thing should not even be attempted.
    Why? Because the System, as dysfunctional as it is, is also fragile.
    Well, duh, I say. The wealth of the plutocrats derives from processes of disinvestment, of dismantling. (In contrast, in the first gilded age, the plutocrats were assembling the systems of an industrial economy; building things — doing it badly and recklessly in many cases to be sure — but adding to the stock. The refusal to share ran the potential for mass prosperity onto the shoals of the Great Depression and World War.) Disinvestment is a path where the road eventually runs out.
    The New Deal, whose promises of egalitarianism based on institutions of countervailing power and initiative in popular and technocratic government, has remained a fading memory that there is an alternative to the neoliberal program. It is not surprising that Sanders is 74; he remembers more clearly for it.
    Krugman is saying there is no alternative. Those who read him closely know that, though he claims to be a political liberal in the sense the term was invented by FDR, he is a conventional, even conservative economist. Vichy Left indeed.
    I expect the establishment will rally for another round of extend and pretend. We will get neither Sanders nor Trump. Reversing our course before the road runs out will be rejected.
    The consequences . . . will be serious. The world will confront constricting and shrinking global resource limits with an elite that wants to party on.

  28. cgordon

    From the point of view of either economics or public purpose, for health care to be a marginal cost of business is indefensible.

  29. ekstasex

    I remember Gerge Carlin telling his audience, “We’re not in the club.” But I think he and the other iconoclasts are in another club, and a better one. You can’t always know how much influence you’ve had in life. But as long as you keep telling the truth, you are still winning the thing that counts.

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