The panelists last night, from left to right : Paul Krugman, Edmund Phelps, Robert Silvers, Jeffrey D. Sachs, and some guy named George Soros.
At the Metropolitan Museum, economists examined the growing global economic crisis.
The New York Times columnist and economist Paul Krugman said last night during his opening remarks that the U.S. federal government needed to undertake a real form of economic stimulus or intervention, in order to end the impact of the current global economic crisis on the U.S. economy. Mr. Krugman was espousing Keynesian-like economic stimulus. Mr. Krugman said that what we lacked in the United States was political will and intellectual capacity, in order to create a truly effective stimulus plan.
Mr. Krugman was speaking at a panel discussion at the Metropolitan Museum of Art, which had been organised by The New York Review of Books and the Fritt Ord Foundation of Oslo. The panel was moderated by Robert Silvers, the editor of The NYRB, who, at times, was crotchety. The other distinguished panelists included Edmund Phelps, an economics professor at Columbia University, the economist Jeffrey Sachs, and the billionaire investor George Soros.
Professor Phelps read from a long set of prepared remarks, in an even academic monotone, and when his reading dragged on, Mr. Krugman began to fuss with his glass of drinking water, and Mr. Krugman even checked the time on his smartphone. Professor Phelps dissed economists, who espoused Keynesian economics by repeating the disparaging terms : "crude Keynesian economics." To say that Professor Phelps was more than just a little flip, and more than just a little boring, would be an understatement. Later, during the discussion when each panelist was able to comment on each other's remarks, Mr. Krugman said that if anybody called him a "crude Keynesian economist," then Mr. Krugman would take that person out and punch him in the nose.
When it came time for Mr. Sachs to deliver his initial remarks, he questioned whether the economic crisis we were in was truly global. He cited exceptions, such as the economic growth in China and India, as evidence that the entire "globe" was not in an economic crisis. But then, when began to recite specific statistics, Mr. Sachs cited the lower rates of growth that China and India were experiencing. Mr. Sachs added that the middle class are being squeezed, and he said that the nation deserved better than the politically-motivated tax cuts that Congress and the Obama administration are fighting over.
Mr. Soros said that he believed that economics, as a science, has lost an appreciation for facts. He added that the U.S. economy should look for new ways to create an economy for the future. One controversial idea he had was to invest in the shale oil industry. Although the audience was primarily liberal, nobody screamed "boos" at Mr. Soros's idea.
In the discussion amongst the panelists that followed, the topic of the European economic crisis came up. The U.S. exports so little of its goods to Europe now that if European demand were to collapse, the U.S. economy wouldn't be so much at risk, it was said. But Mr. Soros described the global financial industry as being paralysed. Mr. Krugman and Mr. Sachs jointly praised the European Central Bank for supporting the Euro by flooding the European financial system with liquidity.
When it came time for the audience to ask questions, Mr. Silvers, in a snobby fit, refused to take any questions from audience members sitting up in the mezzanine. The billionaire Koch brothers must have sent a plant to the panel discussion, because an audience member asked why the U.S. was hell-bent on passing more regulation -- why couldn't the U.S. be more like Hong Kong or Singapore, which have low marginal tax rates and no regulation. Mr. Krugman was quick to dismiss the question, and the question-poser.
Most of the evening seemed to focus about the collapse of the U.S. housing market, which, combined with the financial industry bailout, has sucked out the stamina from the U.S. economy. But another important subtext to the economic collapse has been the shrinking non-security discretionary federal budget, as a percentage of GDP. Mr. Sachs said that since the time when Ronald Reagan said that the government was the problem, the national political forces have been on a relentless attack on decreasing the amount of money being invested in education, job training, and other important aspects of society, which lead to the uplifting of the poor and middle class.
In another part of his extemporaneous remarks, Mr. Soros added that he was blown away not by the amount of money that the right wing has spent on spreading the propaganda that government doesn't work, but, rather, by the fact that they were so effective with their messaging that government doesn't work, so much so that people have become cynical about government. Mr. Soros implied that people, who worked in government and who were politically left of center, needed to learn to counter the right wing's messaging.
One person up in the mezzanine, who never got to ask his question, said he wanted to ask the panelists to comment on what role did the expense of the George Walker Bush wars have on the U.S. treasury and on the larger economy ?
Another person, who never got to ask his question, said that he wanted to ask Mr. Krugman and Mr. Sachs about whether it would be a good idea, in the absence of a real form of government stimulus and intervention, for the Federal Reserve to undertake another large quantitative easing and trigger hyperinflation, which could shrink in real dollar terms the size of the federal budget that is committed to debt service.
At the end of the discussion, Mr. Soros distributed complimentary copies of his new book, Financial Turmoil in Europe and the United States. The other panelists sold copies of their books at the end of the program.
