Marketplace, September 17, 2003: Interview with Paul Krugman

SYNOPSIS: Paul discusses the budget, writing for The New York Times, and The Great Unraveling

KAI RYSSDAL, anchor: This is MARKETPLACE. I'm Kai Ryssdal. New York Times columnist Paul Krugman is among the most severe critics of the Bush administration and its economic policies. The thing is Krugman's an economist who's out with what is really a fairly political book. In part one of our interview, I asked him if it's possible to write about economics these days without writing about politics.

Mr. PAUL KRUGMAN (The New York Times Columnist): It's pretty hard. When I started writing columns for The New York Times, I thought they would mostly be relatively non-political, and then it became clear to me that you couldn't do that. We were having--we were going through a pretty bad period of incredibly irresponsible policies, dishonesty at--at the top levels, and that all of the economic stuff that I was originally hired to write about was colored by that. And I--there are a few--you know, I try to say a few things that are not connected with politics, but it's really hard. Right now, you just can't s--can't separate them.

RYSSDAL: Let's go over some of those things. Just, for instance, the tax policy in Washington these days.

Mr. KRUGMAN: What we have now is a combination of budget--basically, we have budget-busting tax cuts that are--are very ominous for the nation's fiscal future that--where the benefits go to--overwhelmingly to a very small part of the population, the wealthiest part of the population. And now we're stuck with the consequences.

RYSSDAL: I would guess that the White House response might be something like, 'On this, people disagree, and--and we believe that there's a way out of the woods three, four, five, 10 years down the road.'

Mr. KRUGMAN: Yeah. And that's where I have an advantage, I think, in that I am still an academic economist, at least part of me is. And I can just do the numbers. If you look at the numbers that they issued, they--their own numbers don't say what they claim they say. Their own budget statement earlier this year basically if you--if you read, you know, to page 300, if you went to the back, you went to the stuff that--where they--they actually talked about the long-run fiscal outlook, it was a picture of financial disaster. I do think that the public is starting to get a sense. I think that the--the $500 billion deficit, which is--is starting to catch people's attention, I think that $87 billion that somehow they neglected to tell us about until a--a week ago is starting to get people's attention. There is a--there is a sense in the country that things are very wrong, but I--you know, it's going to take--it's going to take some time and some educating, which is what I'm trying to do with this book.

RYSSDAL: How have your views on things changed since you started writing publicly for The Times?

Mr. KRUGMAN: It's a funny thing. I think my view on economics hasn't changed much at all. My view about politics has darkened enormously. I think that's mostly a consequence of simply, in the nature of the job, having to track all of this. I didn't used to have conversations with congressional aides telling me, 'You won't believe what they're trying to push through today,' but now I do, and that gives me a much--a much darker view of--of what's really going on.

RYSSDAL: So you really can't write about economics without writing about politics these days.

Mr. KRUGMAN: I would love to be in a world where, once again, we had basically sensible government policy, basically honest government policy, and I could talk about the follies of the new economy again, but I think it's going to be a long time before we get there.

RYSSDAL: Paul Krugman says we are in dire economic straits. Tomorrow, what to do to fix it. His book, a collection of columns and some other writings, is called "The Great Unraveling." In Los Angeles, I'm Kai Ryssdal. Thanks for being with us.

Originally broadcast, 9.17.03