The right and the far left tend to agree on one thing: President Barack Obama’s economic policies leave a lot to be desired. On Sunday’s broadcast of CNN’s “Fareed Zakaria GPS,” those two perspectives duked it out, represented by two-time presidential candidate Steve Forbes and New York Times columnist Paul Krugman.
Forbes argued that the president’s stimulus spending, which bailed out many local and state governments and is said to have prevented the layoffs of firemen and teachers, didn’t “jump-start” the economy.
“The whole notion that, you know, government by that way can jump-start the economy is a false one,” Forbes said “Where did they get that trillion dollars from? It does not come from heaven. What it comes from is either borrowing, printing money, which is a form of taxation, or taxation itself. So it removes resources from the private sector where it could be put to productive use and perpetuates a lot of things that should not be perpetuated.”
Forbes said other factors, products of Obama’s economic policies, weighed on the economy. Had Obama done nothing, he insisted, things might be different today.
“The weak dollar, sending private capital overseas, uncertainty about the tax code, massive new regulations coming on health care and the financial sector, those are real headwinds,” Forbes said. ”But the government — if President Obama had done nothing when he took office, he’d be a genius today.”
Krugman accused Forbes and “people like” him of discounting the Occupy Wall Street protest movement.
“This is, again, why we need an Occupy Wall Street,” Krugman said. “Because, you know, from my point of view — and I’ve said this many times — people like Steve [Forbes] are recapitulating 80-year-old economic fallacies. They’re hijacking this whole discussion on the eve of the greatest failure of those conservative policies that we can possibly imagine, somehow making the problem, the case that the problem was we weren’t conservative enough.
“But because of the way our normal discussion is structured, because of who has access to — to megaphones, because of who ends up dominating debates in Congress, the other side, which said ‘hey, wait, the problem is not that we’re doing too much, we’re not. The problem is that we’re not doing enough, got practically squeezed out of the debate.’”
“And thank God a ragtag group of protesters down in Zuccotti Park and elsewhere had made us go back to saying, ‘Hey, wait, you know, what? What is the problem here? Shouldn’t we be doing more?’”
“When has massive government spending ever revived [an] economy in peacetime?” Forbes countered.
Krugman had an answer of sorts: “Actually, there’s been a sustained set of economic research these past two years on the whole question of stimulus or austerity. Take the austerity, does cutting government spending actually have an expansionary effect? The International Monetary Fund has done a series of careful studies, and it’s been overwhelming. The world works the way a Keynesian analysis says it should.”