Paul Krugman's Delusions About Populism

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On Friday, Paul Krugman took on the advocates of "libertarian populism."

It's a subject I take a certain interest in, because I have been described as an advocate of this libertarian populism, even though I wouldn't describe myself as either a "libertarian" or a "populist." But the term is shorthand for an idea I definitely agree with: that capitalism, free markets, and small government have a lot to offer the poor--as much as or more than they have to offer the rich--and that Republicans need to focus more effort on making this case.

I've always remembered Alexis de Tocqueville describing how in the America of the 1830s, the philosophy of "self-interest properly understood"--an early version of a pro-free-market, individualist philosophy--was something that he heard "as much from the poor as from the rich." Why can't it be that way again?

Now here is Krugman's summary of what he thinks "libertarian populism" is.

"The idea here is that there exists a pool of disaffected working-class white voters who failed to turn out last year but can be mobilized again with the right kind of conservative economic program-and that this remobilization can restore the Republican Party's electoral fortunes.

"You can see why many on the right find this idea appealing. It suggests that Republicans can regain their former glory without changing much of anything-no need to reach out to nonwhite voters, no need to reconsider their economic ideology. You might also think that this sounds too good to be true-and you'd be right. The notion of libertarian populism is delusional on at least two levels."

Now let's remember that this is Paul Krugman we're dealing with, and those familiar with his standard methods know that he has a tendency to make contemptuous, authoritative pronouncements of facts which are clearly wrong. So let's begin by asking: what is the biggest grassroots, "populist" political movement of the past five years? Obviously, it is the Tea Party movement, which turned out millions of people in cities across the country, sent hundreds of thousands (at the very least) to march on the nation's capital, got a Republican senator elected in Massachusetts, and rallied a historic political wave which flipped the House of Representatives in 2010. What was the platform that motivated the Tea Party? Precisely the small-government, free-market ideology that Krugman swears could never possibly rally a populist movement. And who were the representative supporters of that movement? Guys like "Joe the Plumber," precisely the blue-collars whites who Krugman swears could never possibly respond to this message.

You can argue that the Tea Party movement ran out of steam by 2012, or (more convincingly) that Mitt Romney was the worst possible candidate to appeal to it. But you can't claim it didn't happen. Yet here is Krugman telling us not to believe our lying eyes--and then telling us that we are delusional!

Krugman has some specific targets in mind. His primary target is RCP's political horse-race expert Sean Trende, who has written extensively about what the Republicans need to do to bring back the "missing" votes of blue-collar whites. Trende has offered his own reply, in which he points out that Krugman misrepresents his position: Trende argues that Mitt Romney lost in part because of missing blue-collar whites, but he has not argued that Republicans should ignore minority voters. Yet you can see Krugman's motive: he wants to make this about race, reinforcing--for the benefit of the upper-middle-class whites who read the New York Times--the Democratic prejudice that Republicans are secret racists who only represent the interests of white people.

But Krugman's other goal is to argue that Republicans are all snooty country-club elitists like Mitt Romney, and that free-market, small-government ideas could not possibly appeal to poor or lower-middle-class voters.

"[A]s far as anyone can tell, at this point libertarian populism--as illustrated, for example, by the policy pronouncements of Senator Rand Paul--consists of advocating the same old policies, while insisting that they're really good for the working class."

You can tell that he is arguing this for the benefit of those same upper-middle-class New York Times readers because he uses the term "working class," a little bit of leftover Marxist argot which actual blue-collar workers almost never use to describe themselves.

Now here is his argument for why free-market ideas couldn't possibly appeal to all those sad-sack poor whites.

"Moreover, if you look at what the modern Republican Party actually stands for in practice, it's clearly inimical to the interests of those downscale whites the party can supposedly win back. Neither a flat tax nor a return to the gold standard are actually on the table; but cuts in unemployment benefits, food stamps, and Medicaid are. (To the extent that there was any substance to the Ryan plan, it mainly involved savage cuts in aid to the poor.) And while many nonwhite Americans depend on these safety-net programs, so do many less-well-off whites-the very voters libertarian populism is supposed to reach."

Here we get down to Krugman's basic assumptions. First, he assumes that the only thing anyone could possibly have to offer to the poor or to racial minorities is welfare payments. Second, he assumes that the only economic idea the right has to offer is cuts in welfare payments.

The first assumption is condescending in the extreme, precisely the sort of thing you would expect from a wealthy elite who looks down on poor and minority voters as "downscale." The second is clearly dishonest. There is no way that Krugman could have made his way through a career in economics without being aware of a vast field of pro-free-market economics. In fact, there is a little bit of a cottage industry on the Web of quoting Krugman's textbook on macroeconomics, where he acknowledges the validity of arguments against overgenerous unemployment benefits, for example, and comparing them to columns in which he ignores the lessons of his own textbook.

I could go on about the opportunities for free-market "populism," including many ideas with proven electoral appeal. There is the crusade against the use of eminent domain to tear down middle-class neighborhoods for the benefit of "crony capitalists." There are the "right to work" campaigns that free workers from union dues, union rules, and a union monopoly--not to mention the successful campaigns against the bloated pay and benefits of unionized government employees. There is the campaign to liberate oil and gas production from restrictions demanded by upper-middle-class environmentalists, in order to create more blue-collar jobs and bring down gas prices for those who can't afford a $100,000 Tesla. Or what about the fact that the Fed thinks it has conquered inflation because it has stopped counting food and fuel costs, which are the biggest hits on the wallets of the poor and lower-middle-class?

But boil this all down to its essence, and what does a free-market ideology, or so-called "libertarian populism," have to offer to the poor? Well, it offers them the exact opposite of more and better welfare payments. It offers the possibility of raising themselves up out of poverty through opportunities for work and enterprise. And this is precisely where President Obama and his supporters have been failing the country. The hallmark of the Obama era is the startling collapse of work. Since the financial crisis, a huge cohort of men in their prime working years have simply dropped out of the work force. Some are no doubt scraping by on those welfare benefits Krugman touts. But can anyone say they are better off for it, since many will have permanently given up the attempt to become independent and make something of themselves?

One thing we know is already preventing a recovery of employment is ObamaCare, which penalizes employers for taking on new full-time workers--something the administration has now admitted when it delayed the employer mandate in response to fears that it would generate headlines about companies laying off workers and cutting their hours. ObamaCare has even spawned a new term, the "29ers," to describe workers stuck at not-quite-full-time employment because of the prohibitive extra fines for hiring someone for more than 29 hours a week.

Polls keep confirming that ObamaCare is still unpopular--less popular, in fact, than when it was passed. Even the unions are now turning against it.

I'm pretty sure that if you want to be a populist, a good place to start would be to oppose a law that is unpopular.

So no, free-market "populism" is very real, and Krugman comes off sounding a lot like Wallace Shawn's character in The Princess Bride, who keeps declaring things to be "inconceivable" which are already happening. "Libertarian populism"? I do not think it means what he thinks it means.



Robert Tracinski is senior writer for The Federalist and editor of The Tracinski Letter.

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