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Monday, October 10, 2005

Paul Krugman: Will Bush Deliver?

How will Bush pay for the post Hurricane Katrina reconstruction effort? Tax increases? Budget cuts? Hope the Fed prints money? Push it off to the future? Krugman starts his latest column by wondering if we're asking the right question. He is not sure there will be a large bill to pay after all because he doubts the administration will deliver the help it said it would give:

Will Bush Deliver?, by Paul Krugman, NY Times: ...Bear with me while I make the case for doubting whether Mr. Bush will make good on his promise. First, Mr. Bush already has a record of trying to renege on pledges to a stricken city. After 9/11 he made big promises to New York. But as soon as his bullhorn moment was past, officials began trying to wriggle out of his pledge. ... It's not clear how much federal help the city has actually received. With that precedent in mind, consider this: Congress has just gone on recess. By the time it returns, seven weeks will have passed since the levees broke. And the administration has spent much of that time blocking efforts to aid Katrina's victims.

In the news lately, though not prominently enough for Krugman's taste, is the fight over a bipartisan bill to extend Medicaid coverage to all low-income hurricane victims, some of whom can't afford the medicine they need. Since this is a fight the White House has led, Krugman wonders:

Since the administration is already nickel-and-diming Katrina's victims, it's a good bet that it will do the same with reconstruction - that is, if reconstruction ever gets started. ... what's striking to me is that there are no visible signs that the administration has even begun developing a plan. ... And as far as we can tell, nobody is in charge.

I remember hearing that Karl Rove would lead the reconstruction effort. Is anybody in charge of this drifting ship?:

Last month The New York Times reported that Karl Rove had been placed in charge of post-Katrina reconstruction. But last week ... the White House press secretary denied that Mr. Rove ... was ever running reconstruction. So who is in charge? "The president," said Mr. McClellan.

With the president in charge, Krugman expects nothing but foot-dragging on post-Katrina reconstruction. But isn't that politically risky? How can a strategy of reneging on promises pay political dividends?

I've been reading "Off Center," an important new book by Jacob Hacker and Paul Pierson, political scientists at Yale and Berkeley respectively. ... One of their "new rules for radicals" is "Don't just do something, stand there." Frontal assaults on popular government programs tend to fail, as Mr. Bush learned in his hapless attempt to sell Social Security privatization.

So foot-dragging, acting like you are addressing important problems while actually stalling as much as possible is politically effective? Hmmm. Maybe an example would help:

For example, the public strongly supports a higher minimum wage, but conservatives have nonetheless managed to cut that wage in real terms by not raising it in the face of inflation. Right now, the public strongly supports a major reconstruction effort, so that's what Mr. Bush had to promise. But as the TV cameras focus on other places and other issues, will the administration pay a heavy political price for a reconstruction that starts slowly and gradually peters out? The New York experience suggests that it won't.

I see. But suppose I'm not convinced that the administration is this clever. Are there any other explanations?

Of course, I may be overanalyzing. Maybe the administration isn't deliberately dragging its feet on reconstruction. Maybe its lack of movement, like its immobility in the days after Katrina struck, reflects nothing more than out-of-touch leadership and a lack of competent people.

    Posted by on Monday, October 10, 2005 at 12:11 AM in Economics, Politics | Permalink  TrackBack (1)  Comments (6)

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    » Economists View on Paul Krugman from BigBlogLog

    Mark Thoma of Economists View has a nice summary and response to Paul Krugmans op-ed piece for the New York Times questioning whether Bush will deliver on his promised federal aid for hurricane Katrina victims. Krugman is not particular... [Read More]

    Tracked on Monday, October 10, 2005 at 03:58 PM


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