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Fri Dec 28, 2012, 06:03 PM

KRUGMAN: “We are at war with Eastasia, and always have been.”

........business leaders intervening in our economic debate are, for the most part, either predatory or hopelessly confused (or, I guess, both).


I’d put Fix the Debt in the predatory category; it’s quite clear that the organization (which is yet another Pete Peterson front, this time explicitly dominated by corporate interests) has an agenda more focused on cutting social insurance and corporate taxes than on reducing the deficit per se.

Meanwhile, Howard Schultz, the CEO of Starbucks, exemplifies the hopeless confusion factor. By all accounts, he’s a good guy, with genuinely generous instincts. But in his message to employees, urging them to write “come together” on coffee cups, he gets the nature of the fiscal cliff completely wrong. In fact, he gets it wrong in two fundamental ways. He writes:

As many of you know, our elected officials in Washington D.C. have been unable to come together and compromise to solve the tremendously important, time-sensitive issue to fix the national debt.


OK, first of all, the fiscal cliff is NOT A DEBT PROBLEM. In fact, it’s the opposite: the danger is that with expiring tax cuts, expiring unemployment benefits, and the sequester, we’ll reduce the deficit too fast. Deficit scolds are having a hard time reconciling their sudden concern about excessive deficit reduction with everything they were saying before – and evidently Mr. Schultz hasn’t gotten the message that we are now at war with Eastasia, and always have been.

And then, on top of that, he has the politics all wrong, in the characteristic centrist way: he makes it sound as if the problem was one of symmetric partisanship, with both sides refusing to compromise. The reality is that Obama has moved a huge way both in offering to exempt more high-earner income from tax hikes and in offering to cut Social Security benefits; meanwhile, the GOP not only won’t agree to any kind of tax hike at all, it also has yet to make any specific offer of any kind.

.........

MORE:
http://krugman.blogs.nytimes.com/2012/12/28/a-double-shot-of-misunderstanding/

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