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DEBATING POLITICS, ECONOMICS AND OTHER TIMELY TOPICS WITH PAUL KRUGMAN OF THE NEW YORK TIMES

FRIDAY, NOVEMBER 20, 2015

PAUL KRUGMAN

A New Focus in France:


Security Over Austerity
The Great Depression wasnt ended by
the intellectual victory of Keynesian economics. In fact, the publication of Keyness
The General Theory was followed by
the great mistake of 1937, when President
Franklin D. Roosevelt tried to balance the
budget too soon and sent the economy into
a severe recession. What put a decisive end
to the slump was World War II, which led
to deficit spending on a scale that had been
politically impossible in the United States.
This story is what led me to suggest
facetiously a few years ago that we should
fake a threat from space aliens in order to
provide a politically acceptable cover for
stimulus.
Now France has been attacked, unfortunately, by real terrorists instead of fake
aliens, and President Franois Hollande
is declaring that security must take precedence over austerity. Is this the start of
something big?
I should offer an obligatory disclaimer
that will do no good in the face of stupidity: I am NOT saying that terrorism is a
good thing, just as those of us who point to
wartime fiscal stimulus arent saying that
World War II was a good thing. Were just
trying to think through some side effects of
the atrocity.
The question we should ask is whether
the fiscal indiscipline caused by jihadists will make a significant difference to
Frances economic performance.
My guess is that it probably wont. Defense and security spending in the United
States rose by around 2 percent of gross
domestic product after 9/11 but that involved a much bigger military buildup than
France is likely to undertake now, plus it
involved the Iraq war. More likely, were

looking at a fraction of a percent of G.D.P.,


which is small compared with the austerity
that Europe has imposed in recent years.
Unless Frances response is much bigger
than Im imagining, the impact on growth
wont be large.
The Farce Is Strong With This One
And that one, and that one, and, well,
across the board.
It took no time at all for the right-wing
response to the Paris attacks to turn into a
vile caricature that has me feeling nostalgic for the restraint and statesmanship of
Donald Rumsfeld and Dick Cheney.
The Republican Presidential candidate
Marco Rubio said on ABCs This Week
that we have to denounce radical Islam
in general as opposed to jihadists in
particular because of Hitler. After all,
making Islam the rhetorical equivalent of
Nazism is a great way to win support from
the worlds 1.6 billion Muslims.
The historian Niall Ferguson wrote in
a recent column in The Australian that a
terrorist attack on a couple of sites within
a huge modern metropolis by a small number of gunmen is just like the sack of Rome
by the Goths.
And the conservative commentator
Hugh Hewitt thinks that taking a remark
from President Obama totally out of context on Twitter will convince anyone except the right-wing base that the man who
hunted down Osama bin Laden has been
an anti-American terrorist sympathizer
all along.
Ive deliberately selected people who are
sometimes portrayed as moderate, smart
or both. This is what the reasonable wing of
the modern right looks like.

PIERRE TERDJMAN FOR THE NEW YORK TIMES

People gather around a makeshift memorial at Republic Square in Paris on Nov. 15, two days after terrorists killed 129 people in
a series of attacks. President Franois Hollande has vowed that security spending will trump the nations austerity policies.

READER COMMENTS FROM NYTIMES.COM

War Should Never Serve as a Stimulus


Surely we have the brains to
come up with ways to stimulate
our economies that dont involve
warfare.
GEORGE, AUSTRALIA

The repercussions of this conflict look hazy indeed. No one who


has seriously studied the Islamic
State understands how to negate the
threats posed by the organization
and the possibility of military extremism as a response.
So is ISIS a passing phenomenon,
or does the group represent a fundamental shift in the world? If its the
latter, we could certainly expect to
see some economic impacts.
DAVID, UTAH

group of terrorists.
There are not enough worthwhile
military targets to justify a moderate air campaign, much less a massive invasion.
In fact, Ive found myself rather
annoyed after hearing news reports
about French aircraft destroying
ammunition dumps and buildings
that were described as ISIS headquarters. French and American
planes would have destroyed those
targets long ago. So its absurd to
think that such targets still exist.

During World War II, American


workers made a ton of money, by
1940s standards, though they had
few things to spend it on. Rationing goods and the sale of war bonds
kept money out of the economy by
design. After the war ended, people
started cashing in their government
bonds, and the economy experienced a major stimulus, as designed.
BOB DOBBS, CALIFORNIA

The French response to the recent attacks in Paris will not be


much bigger than you expect, Mr.
Krugman.
The Islamic State is not the Taliban, nor is it the Iraqi army. Its a
relatively small, cowardly, psychotic

RICHARD F., COLORADO

Mr. Krugman, you are exactly


right about Keynes and World War
II. But the current situation regard-

ing ISIS is a much smaller affair.


That said, what could prove to be a
huge project is an effort to rebuild
the Middle East.
After all, the economic stimulus
spurred by World War II was followed by the Marshall Plan. After
this conflict with ISIS ends, perhaps
a Mesopotamia Plan can be implemented.
S., VIRGINIA

God save us from anyone who


declares that World War II ended
the Great Depression. Yes, unemployment in the United States
decreased because we shipped
millions of men oversees. And, yes,
gross domestic product rose because Uncle Sam was buying lots of
planes, tanks and bombs.
But personal consumption, a very
important economic measurement,
stayed low throughout the war

because very few consumer items


were available for purchase. On the
other hand, industrial producers
connected to the war effort made out
quite nicely.
When someone says that World
War II ended the Great Depression,
ask him: Who did it end it for? And,
similarly, when someone says that
massive government spending will
boost the economy, ask him: Whose
economy?
C., MASSACHUSETTS

The conservative response condemning all Muslims is exactly


what the terrorists want. (At least
Mexicans are getting a break while
Republicans in the United States unleash their xenophobia on someone
else.)
Also, why does the United States
have to respond to the attacks in
Paris? France and Russia have mili-

taries that are more than capable of


smashing these thugs.
P.J., NEW YORK

Niall Ferguson seems to move


farther and farther away from
fact-based analysis every year.
MORLEY, GEORGIA

Mr. Krugman, you seem to believe that the Republican base has
gone mad, which is an assessment
that I completely agree with. Be
careful, however, not to underestimate the extent to which huge
parts of the Islamic world have
also gone around the bend.
JORGEN, DENMARK

ONLINE: COMMENTS
Comments have been edited for clarity and
length. For Paul Krugmans latest thoughts
and to join the debate online, visit his blog at
krugman.blogs.nytimes.com.

PAUL KRUGMAN

BACKSTORY

Caricatures and Labor Force Distortions

Bush Backtracks on Remarks

Percent

84

Employment Ratio, Ages 25-54

82
80
78
76
74

UNITED STATES

72

2014

2013

2012

2011

2010

Source: Organization for Economic Cooperation and Development

or unemployed, compared with


hard-working America, youre not
just repeating a caricature, youre
repeating a caricature thats been
out of date for many years. The
French do take more vacations

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

70

FRANCE

1995

Its been obvious for a while that


Jeb Bush is toast. Recently, however, he became French toast: After making a crack about French
workweeks that was completely
wrong, the Republican presidential candidate apologized for the
mistake.
Fool! As National Review made
clear, real men dont admit to,
let alone apologize for, errors:
Apologizing to the French will
not score Bush any points with the
G.O.P. primary electorate, John
Fund, the magazines nationalaffairs correspondent, wrote. It
may show he is a gentleman, but
it also shows he lacks the killer
instinct of his father and brother
when they ran for president.
Hey, look at Ben Carson.
But in truth the French deserve
an apology from a lot of American
politicians and commentators. If
you think that France is a nation
where everyone is either lazy

THE NEW YORK TIMES

than Americans do, but in their


prime working years, theyre a lot
more likely to be employed than
we are (see the chart).
Whenever I mention this fact,
I get mail from people who insist

that I must be wrong and demand


a correction. And even well-informed commentators seem to be
underinformed on this point. For
example, Justin Fox while not
wrong in what he wrote in a recent
Bloomberg column on entitlement
spending (here: bv.ms/1MCjmQz)
doesnt seem aware that
Frances lower overall labor force
participation is entirely the result
of early retirement and lower employment among the young, which
in turn partly reflects students
not having to work while theyre
in college.
Of course, such employment
success isnt supposed to happen
in countries with generous welfare states like Frances. And to
be fair, the chart here may reflect
American failure as much as it
does French success. Still, people
should know that their image of
France, and Europe in general, is
really, really wrong.

READER COMMENTS FROM NYTIMES.COM

From Freedom Fries to Foot-in-Mouth


No need to apologize, Jeb! After
the idiocy of freedom fries, the
few people in France who follow
domestic American politics consider it an honor to be insulted by
Americans.
CHRISTIAN PERPIGNAN, FRANCE

If youre a Republican, theres


nothing much worse than being
labeled a gentleman. Thats the
kiss of death in right-wing politics.
Its possibly even worse than if you
believed in science. Or if you were
French.
JIM HANSEN, CALIFORNIA

Who would want high-speed


trains; universal access to health
care and low-cost prescription
drugs; publicly funded preschool
for all with certified teachers;
tuitionless public universities;
subsidies for cultural institutions;
subsidized summer camps and
child care; and more paid vacation?
What a nightmare!
NANCY CADET, NEW YORK

In the United States, even with


the Affordable Care Act, we are
always at risk. The middle-aged

woman cleaning my teeth at my


dentists office recently told me: My
husband and I are afraid. America
is such an expensive place to live.
What will we do when we have to
retire? The concept of freedom is
relative when we compare life in the
United States to life in France and
other European countries. I am free
to work many hours for low pay. I am
free to get sick and die. I am free to
ride two or more hours to and from
work on a bus. And I am free to listen
to corrupt politicians pandering to
peoples worst base instincts.
HAROLD WINTER, FLORIDA

During a Republican presidential debate earlier this month in Wisconsin,


Jeb Bush criticized Senator Marco Rubios attendance record in the Senate
by remarking: I mean, literally, the
Senate, what is it, like a French workweek? You get like three days where
you have to show up?
The comment sparked a backlash in
the French press, and Grard Araud,
Frances ambassador to the United
States, responded on Twitter by saying:
A French work week of 3 days? No
but a pregnancy paid leave of 16 weeks
yes! And proud of it.
Mr. Araud later cited productivity
data that contradicted Mr. Bushs assertion that the French have a short
workweek. Eventually, Mr. Bushs team
apologized.
The candidates campaign has floundered in recent months. Mr. Bush has
gone from being the presumptive frontrunner for the presidential nomination,

I spent several months living in


Paris and Lyon. There are some
things that the French get wrong.
But theres also an awful lot that
they get right.
I remember taking the TGV,
Frances high-speed rail network,
several times to Lyon from Paris.
Cars that the train passed on the
freeway looked like they were standing still.
And when I got back to the United
States, I wondered why the government wasnt building high-speed
rail. Airports are so crowded, and
its much nicer to travel from one city
to another by train.
I dont understand why President
Obama didnt push for high-speed
rail as part of an infrastructure
spending project during the recov-

ery from the Great Recession.


BLAISE ADAMS, CALIFORNIA

The social democracies of Europe and elsewhere care about


their people, so they provide them
with basic services like health
care and education. In the United
States, however, a college education
is becoming prohibitively expensive,
and conservatives consider Obamacare to be downright sinful.
NAME WITHHELD, GEORGIA

France is pretty much Exhibit A


in the Encyclopedia of Conservative Revisionism. We often forget
that no other country was as financially supportive of our efforts in the
Revolutionary War as France.
R. LAW, TEXAS

to being in fifth place or lower in many


polls. Many analysts now consider Mr.
Bushs former protg, Mr. Rubio, to be
the establishment candidate best positioned to win the nomination.
Three days after this months debate,
terrorist attacks struck Paris, and Mr.
Bush responded with a call to declare
war on the Islamic State, urging President Obama to put American troops on
the ground in Iraq and Syria.
Critics quickly attacked his comments. Summarizing Mr. Bushs purported strategy in The New Yorker,
John Cassidy wrote: You go in militarily; you knock off the local regime
and take out its forces, at which point
not before you send in the military
you figure out how to keep the peace.
In other words, you that is, we do
precisely what the United States and
its allies did in Iraq and Afghanistan
under the leadership of Jebs brother
George W.

Paul Krugman
joined The New
York Times in 1999
as a columnist on
the Op-Ed page
and continues
as a professor of
economics and
international
affairs at Princeton
University. He was awarded the
Nobel in economic science in 2008.
Mr. Krugman is the author or editor
of 21 books and more than 200
papers in professional journals and
edited volumes. His latest book is
End This Depression Now!