Tamron Hall: Paul Krugman, he says that the plan "fills me with a sense of despair." Is he alone in that criticism? The Dow is up 313 points.
Chuck Todd: There are a lot of reformers on the left who want to see massive reform of the financial system, who don't like this plan, who believe it's too worried about making sure Wall Street is just as comfortable with this whole idea as it pertains to Main Street.
But a little context to Paul Krugman. He rarely has liked anything that Obama has done, when he was a presidential candidate and now as president. So I think the White House doesn't take his criticism as seriously simply because he has been so critical on pretty much every single initiative, both as a candidate and now as president. But they're mindful of the criticism and it is a growing chorus on the left, that's for sure.
John Harwood: Well Chuck, I was going to say, if the White House to choose between praise from Paul Krugman or plus 300 points on the Dow, I suspect that they would happily take the latter.
Krugman has not been critical of every single thing Obama has done. That's ridiculous. But he was critical of his campaign health care proposal which refused to endorse a mandate (now abandoned, btw, and conceded to have been a political ploy rather than a matter of principle) and his current economic policy, believing it to be too timid. He is hardly alone, but he does have the biggest perch from which to voice that view and so gets the attention. Krugman has an exceptional track record over the past decade, however, and it is a mistake for the anyone to dismiss his criticisms out of hand because of a perception that he has some personal animus.
More important than that however, is this idea that criticisms of Obama's economic policies are coming from sort of leftist fringe when the fact is that it's coming from mainstream economists. I don't know if he's parroting the White House but it's concerning. John Harwood's silly rejoinder about Wall Street being more important than an economist is a typically insular way of reporting on this issue (and to Todd's credit he did respond that the administration is loathe to use the Dow as a yardstick.) It's great that the Dow is rallying so crisply this past couple of weeks, but it operates on its own logic that doesn't really mean anything when you are talking about these fundamental, economic issues as Krugman is. Honestly, if Todd and Harwood are indicative of the political establishment's view that systemic reform of the financial system is some kind of silly leftwing joke then we are in deeper shit than I thought.
The arguments aren't about right vs left, they are about insider vs outsider, wall street vs main street, what works vs what doesn't work. Trying to use the old DFH line and saying Krugman is shrill is no more correct now than it was when the Bush administration did it. It's a lazy, outmoded paradigm.
Update: And if you want to see bankrupt thinking, check out the man who would have been Obama's commerce secretary on the budget.
Norah O'Donnell: Ok Senator, you're going to criticize it. You won't propose or put together and alternative.
Judd Gregg: No actually ...
O'Donnell: If you had a line item pen andcould go through the president's budget, name the top three things that you would excise.
Gregg: Well, basically I would limit his attempt to dramatically expand the cost of health care. We already pay 17 percent of our GDP in health care. we do not need to increase that number. Significantly, the fact is that we spend more on health care than any other industrialized nation. So there is enough money in the system for health care, you don't have to dramatically expand it because ... he wants to expand it because he wants to quasi - nationalize it.
I would also limit his attempt to nationalise the education loan program. that's not an effective or efficient way to deliver education loans. that's a big mistake.
I would also freeze discretionary spending which would save around 900 billion dollars over ten years.
In addition I would step into the entitlement accounts and say listen it's time for us to rein in the growth of the entitlement accounts and aggressively promote fiscal responsibility there.
O'Donnell then went on to quote Judd saying that using the budget reconciliation is a "Chicago style" strongarm tactic.
I can't help but find it a little bit ironic that the man who said that was invited to come into Obama's cabinet, but Krugman is dismissed as a crank.
Update II: From the Krugman is a shrill leftist file, here's the Wall Street mouthpiece Erin Burnett:
This is essentially a sophisticated plan that treasury Secretary Hank Paulson tried to do last fall. It took quite a while to get it up and running. Timothy Geithner, the Treasury Secretary, was the man who was working on it ever since then.