When I ran for public office a few years ago, I argued that there were two dominant problems in America that needed to be addressed:
- Growing debt.
- Growing economic inequality
My proposed answers were (1) government austerity, and (2) education. Today in his column, NY Times columnist Paul Krugman mocked both me and my positions:
- “Regular readers know that I sometimes mock ‘very serious people’ — politicians and pundits who solemnly repeat conventional wisdom that sounds tough-minded and realistic. The trouble is that sounding serious and being serious are by no means the same thing, and some of those seemingly tough-minded positions are actually ways to dodge the truly hard issues.”
- “The prime example of recent years was, of course, Bowles-Simpsonism — the diversion of elite discourse away from the ongoing tragedy of high unemployment and into the supposedly crucial issue of how, exactly, we will pay for social insurance programs a couple of decades from now. That particular obsession, I’m happy to say, seems to be on the wane. But my sense is that there’s a new form of issue-dodging packaged as seriousness on the rise. This time, the evasion involves trying to divert our national discourse about inequality into a discussion of alleged problems with education.”
Regarding inequality, Krugman suggests that instead of being distracted by education issues, government efforts for greater equality should focus on increasing taxes on the rich, increasing benefits (so-called investments), and thing like increasing the minimum age and facilitating more unionization.
Since reading Piketty’s book on Capital in the 21st Century, I have revised my inequality thinking in favor of more structural reforms such as what Krugman is suggesting. Free-market capitalism needs to be tweaked to produce the results that we as a country want. Results, not economic philosophy, have to be the ultimate objective.
Piketty’s book also convinced me that the most effective way of dealing with our national debt is not austerity, as Europe has tried, but rather to grow our way out – i.e., restraining the growth of spending. But I’m not sure Bowles-Simpson equated to austerity.
Also, one mocking statement by Krugman really sticks in the craw of this life-long insurance guy:
- “… the supposedly crucial issue of how, exactly, we will pay for social insurance programs a couple of decades from now.”
As an insurance guy, I think it is silly not to worry about how you are going to pay for insurance obligations (Social Security, Medicare) that come due two decades from now