First, he pointed out that government spending has been cratering since 2010 — and openly mocked the idea that Mitt Romney has an answer to unemployment.
KRUGMAN: Well, the economy is weak. It’s not terrible, but it’s weak. The bitter irony here has to be for Obama, certainly for people like me, is that if the Republican answer is «let’s slash spending, let’s have low taxes,» that’s actually the policy we’ve been following. It’s amazing, actually. Especially if you look at the last couple of years, what we’ve actually seen is sharply…STEPHANOPOULOS: Let me show you — we have a chart in your blog this morning.
KRUGMAN: Yeah, this is…
STEPHANOPOULOS: We created it. It shows the point you’re making.
KRUGMAN: Yeah, this is real government spending, so it’s federal, state and local combined, deflated, you know, adjusted for population growth and inflation, and it is plunging. It’s plunging mostly because of cutbacks at the state and local level, because the aid that they were receiving in the stimulus has run out, but also because unemployment benefits have been expiring because Congress won’t — you know, Republicans in Congress won’t extend them.
So in effect – and, by the way, if you extend that chart backwards, there’s been nothing like this since the demobilization after the Korean War. We’re actually practicing government austerity on a scale that we haven’t seen in 60 years. It’s not the president’s policy. In effect, we’ve already got the policies that Republicans say they will impose if they take the election, and yet, of course, it may lead to the defeat of this president.
STEPHANOPOULOS: And that’s the point Stephanie was making, so bringing it back to you, what would Governor Romney do right now — not in the future — right now, to get the economy moving again?
FEHRNSTROM: Well, it’s not just, as Paul says, tax policy. That’s part of it, of course, but it’s also spending policy, it’s regulatory policy. It’s confronting China on their unfair trade practices. It’s — it’s a whole — it’s labor policy, George.
The governor has laid out very detailed plans. People can go to mittromney.com and learn about them for themselves. But I think what we really have here…
KRUGMAN: … …I know from detailed plans and there is nothing there. There is not…
Brutal.
Then, Krugman throws cold water on Willard’s big «get tough with China and that will create jobs» plan.
CUTTER: … he’s going to deregulate Wall Street, which we know how that turns out. We’re going to go back to risky financial deals that crashed our economy. And on China, you know, we’ve been hearing this blustering on China for quite a while now. What exactly is the governor going to do? There’s…
STEPHANOPOULOS: … I want to bring in George Will.
FEHRNSTROM: He’ll do what this president has failed to do in China, which is to declare that China is a currency manipulator. Look, we’re all in favor of free trade. In fact, we don’t think this president has done enough to reinvigorate trade talks — trade talks with our friends, but China is — is robbing us blind. They’re stealing…
KRUGMAN: I was very much for that. I’ve been demanding that we declare — but the window for that has passed. Right now, the Chinese economy is tanking. So if you were thinking you were going to get a big boost out of beating up on the Chinese now, two years ago I thought was really a good time to do that. But my god, now that is totally out of date.
Last but not least, he exposes the flimflammery of the Ryan plan — after George Will got Ferhnstrom to commit to it.
WILL: On another matter, I didn’t hear a robust answer to George’s question. Where does the governor stand, Governor Romney, on the Ryan plan? Does he endorse it?
FEHRNSTROM: Oh, he’s for — he’s for — he’s for the Ryan plan. He believes it goes in the right direction. The governor has also put forward a plan to reduce spending by $500 billion by the year 2016. In fact, he’s put details on the table about how exactly he would achieve that. So to say he doesn’t have a plan to — a plan to restrain government spending is just not true.
KRUGMAN: Can I say, the Ryan plan — and I guess this is what counts as a personal attack — but it isn’t. It’s not an attack on the person; it’s an attack on the plan. The plan’s a fraud. The plan is a big bunch of tax cuts, some specified spending cuts, basically for poor people, and then a huge magic asterisk which is supposed to turn into a deficit reduction plan, but, in fact, if you look what’s actually in it, it’s a deficit-increasing plan.
just tell the truth that there is really no plan there, neither from Ryan, nor from Governor Romney, is just the truth. That’s not — if that’s — if that’s being harsh and partisan, gosh, then I guess the truth is anti-bipartisanship.
FEHRNSTROM: So may I ask you, Paul, do you prefer the president’s plan?
KRUGMAN: Oh, yeah. I mean, the president — at least it’s — you know, I don’t approve of everything, but there are no gigantic mystery numbers in his stuff. We do know what he’s talking about. His numbers are — you know, all economic forecasts are wrong, but his are not — are not insane. These are — these are just imaginary.
Wonderful.
Whenever Krugman is on one of these shows, putting some hapless Republican blowhard in his place, I’m reminded of the Marshall McLuhan scene from «Annie Hall.»
