Jonathan Alter Explains Why Krugman is Wrong

Writing in Newsweek, Jonathan Alter explains Why Krugman is Wrong and “Why Obama’s approach to health care isn’t naive.” I’ve previously discussed Krugman’s attacks on Obama here and here, and also note the response from Robert Stein which I quoted yesterday.

Alter notes that running for president as a populist is a losing proposition:

Krugman is a populist. He writes that if nominated, Obama would win, “but not as big as a candidate who ran on a more populist platform.” This is facile and ahistorical. How many 20th Century American presidents have been elected on a populist platform? That would be zero, Paul. You could even include Al Gore, who won the popular vote in 2000. Instead of exploiting the peace and prosperity of the 1990s, Gore ran on a “people vs. the powerful” message. It never ignited.

Krugman says that pundits like me who reject sharp anti-corporate rhetoric and prefer cooperation are “projecting their own desires onto the public.” We’ll see. But last time I checked, millions of Americans still work for corporations or aspire to do so and bashing them wholesale is a loser politically. It works sometimes in Democratic primaries with a heavy labor vote (though not for Dick Gephardt). But not in general elections. The last two Democrats elected president-Jimmy Carter in 1976 and Bill Clinton in 1992-also campaigned during recessions. Both were smart enough to reject populism in favor of a responsive but upbeat message.

Alter looks back at what worked for the Clintons, and why their attempts at health care reform did not:

Krugman is an economist and I trust his forecast that things are going to get even worse for working-class Americans in the months ahead. The middle-class squeeze is real. Predatory lenders and CEO greedheads should be called out. So should insurance and drug companies. But it needs to be done in a way that produces results, not just spleen-venting.

How? Just after Clinton was elected, he convened a meeting of economists, CEOs, labor leaders and many others in Little Rock. The purpose of the meeting was to argue out what should be done about the ailing economy, with many of the ideas expressed there later becoming part of Clinton’s successful 1993 economic recovery package. The whole thing was on television.

Sound familiar? This is essentially what Obama is proposing for health care after he’s elected. If Hillary Clinton had done this on health care in 1993—instead of convening a secret task force—she might have been able to build a stronger public case for reform.

Edwards and Krugman think that’s naïve. They want the evil drug and insurance industries excluded from any of these conversations. Edwards surely knows better than this. The drug industry that he seeks to bar from a seat at the table is the same industry working to save his wife Elizabeth’s life and that of anyone else with a serious disease, including me. The answer to price-gouging is to force these companies to negotiate drug prices with the government, a reform any Democratic president would quickly enact.

Ideally, health insurance companies should be eliminated altogether. But a single payer plan isn’t viable politically, as Edwards readily admits. The only option is to curb their power and expand coverage through more regulation.

Alter argues that Obama has the smarter approach to achieving change:

Obama’s idea is a better one: Get every special interest out in the open on television, where the new president can cross-examine them and expose their phony rationalizations for charging $100 a pill or denying coverage to sick people (and Edwards, the former trial attorney, would be especially good at this). Then, having triumphed over the drug and insurance companies in the court of public opinion, the legislative victories will follow. It is, indeed, a fantasy to think these interests will roll over entirely, but they will get a much worse deal.

The Edwards alternative-to simply overrun them-is unrealistic. Even a 1932-style mandate at the ballot box (highly unlikely) wouldn’t make them capitulate. Look what happened when New York Gov. Eliot Spitzer, elected in 2006 with a huge mandate, tried to “steamroll” a bunch of hacks in Albany. He got his head handed to him.

To call Obama “anti-change,” as Paul Krugman does, is anti-common sense. Leadership requires a mixture of confrontation and compromise, with room for the losers to save face. “They have to feel the heat to see the light,” LBJ liked to say. That heat is best applied up close. In public. Across the big table.

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