Krugman, Putin and the New York Times

Paul Krugman is an outstanding scholar-journalist, arguably the most enlightening among the New York Times’s regulars. He has grown in his years with the Times, possibly to the dismay of the top brass of the paper. When he was taken on as a regular in 2000 Krugman was a free trade enthusiast, and in his very first regular column (January 2, 2000) he admonished the protesters at the World Trade Organization gathering in Seattle (12/99) for portraying globalization as “an ideology of and for a rootless cosmopolitan elite that is out of touch with ordinary people.” He claimed then that the protesters’ oppositional cause is “denying opportunity to Third World workers.” The big problem for the next century, as Krugman then saw it, was whether the recent beneficial globalization revolution could build a mass constituency. Krugman had earlier been a strong supporter of NAFTA, a believer in the policy-constraining effects of the “natural rate of unemployment,” which he took as a given, as well as accepting that the concern over poverty had “exhausted the patience of the general public” and dealing with it was “politically out of bounds.” He also claimed that Western nations had “grown out of the sabre-rattling nationalism that led to catastrophic warfare in 1914.” (This was just after the U.S. war on Yugoslavia and the early moves of Clinton in expanding NATO toward the Russian border.) Krugman was in tune with the NYT editors.

Krugman’s faith in free trade weakened over the following 14 years, and although he never assailed NAFTA and outsourcing as major elements in the degenerative features of the political economy, he did express doubts about them and has been dubious about the merits of the Trans-Pacific Partnership agreement. He has pressed for more aggressively expansionist Keynesian policies, repeatedly scoffing at inflation fear-mongers. Moreover, in the face of increasing income and wealth inequality and the inability of the political economy to address this set of issues, Krugman has even moved to the point of identifying the problem as one of class warfare

But Krugman has still been unable to escape from the biases and prejudices of the spokespersons and ideologists of the imperial and warfare state, dramatically illustrated in his recent column on “Why We Fight Wars” (August 17, 2014). His remarks here are sadly reminiscent of the themes of the NYT editors, reporters and approved op-ed columnists. He may over time have been able to rise above Thomas Friedman’s “flat earth” absurdities, but he swallows whole the Friedman-Keller-Brooks-Kerry-Power (etc.) party line on the non-U.S./NATO source of any war threat, and on Russian president Vladimir Putin’s villainy.

He tells us that war was once a struggle for gain and still is in the case of contemporary civil strife. But for modern wealthy nations like the United States war “doesn’t pay.” It is “very, very expensive,” and it is hard to attack and exploit sophisticated economies “without killing the goose that laid the golden eggs.” But how about unsophisticated economies that sit on golden eggs (oil) underground? He never discusses such a case, although Iraq would seem hard to ignore. Also the wars and display of military muscle that allowed the United States to establish a privileged position in Saudi Arabia and other oil and mineral rich states, make for gains to an elite that should not be overlooked.

Thus the first and possibly most shocking fallacy in his argument is its failure to distinguish between the interests of the elite, on the one hand, and ordinary citizens and society as a whole, on the other. Doesn’t war pay for Lockheed-Martin, GE, Raytheon, Honeywell, Halliburton, Chevron, Academi (formerly Blackwater) and the vast further array of contractors and their financial, political and military allies? An important feature of “projecting power” (i.e., imperialism) has always been the skewed distribution of costs and benefits. The costs have always been borne by the general citizenry (including the dead and injured military personnel and their families), while the benefits accrue mainly to privileged sectors whose members not only profit from arms supply and other services but can plunder the victim countries during and after the invasion-occupation. (For evidence as regards European colonialism, see Grover Clark’s classic, The Balance Sheets of Imperialism [Columbia University Press: 1936]. Clark made a clear distinction between net benefits to the war-making elite and net costs to the underlying populations of both attacker and victim countries.).

The elite benefits from war can be exceptionally large because, under war conditions, standards regress in the confusion and need for expedited service and under the cover of patriotic ardor, so that markups and literal looting can be higher and more brazen than under peacetime conditions. The followup plundering can also be great, with deals made with the newly installed puppet governments that treat the invading carpetbaggers with great generosity.

The Iraq invasion-occupation provided many illustrations of very large costs based on straightforward looting. In January, 2005, the Special Inspector General for Iraqi Reconstruction, Stewart W. Bowen, Jr., reported that an estimated $8.8 billion from the U.S.-controlled Development Fund for Iraq (DFI) was missing and unaccounted for. Under the terms of the UN resolution creating the DFI, these funds were “to be used in a transparent manner to meet the humanitarian needs of the Iraqi people…” On June 21, 2005, Representative Henry Waxman, submitted a report on Rebuilding Iraq: U.S. Mismanagement of Iraqi Funds, which pointed out that U.S. authorities withdrew from the DFI account at the Federal Reserve Bank of New York nearly $12 billion in cash, the largest cash withdrawals in history, including over 107 million hundred dollar bills. In late June, 2004, in the last week of its existence, the U.S.-dominated Iraq Coalition Provisional Authority ordered more than $4 billion in cash for urgent delivery, including the largest ever one-day transfer of cash ($2.4 billion). No accounting firm and apparently nobody else monitored the rapid disbursement of these huge sums, doled out in duffel bags, or passed out to favored parties from trucks, with very large sums simply vanishing. U.S. officials have not been able to account for the disposition of these billions of dollars, which are only a small fraction of the contract-based war loot associated with recent U.S. wars.

Krugman is very sketchy in answering his main question of why wars happen—his central argument is that “governments all too often gain politically from war, even if the war in question makes no sense in terms of national interest.” He illustrates this by reference to Russia and Putin—“the roots of the Ukraine crisis may lie in the faltering performance of the Russian economy…Russian growth has been sputtering—and you could argue that the Putin regime needed a distraction…No doubt its an oversimplification to say that the confrontation in Ukraine is all about shoring up an authoritarian regime that is stumbling on other fronts. But there is surely some truth to that story—and that raises some scary questions.”

So Krugman is able to trace the Ukraine crisis to internal factors in Russia, but he cannot do the same for his own country. In the Ukraine the United States is, by implication, just defending that nation against its neighboring aggressive state which IS driven by internal forces. He says Russian growth has been sputtering, but Krugman has repeatedly called attention to the difficulty the Obama administration has had in getting us out of a depressed economy and putting through domestic reforms that would benefit the Democratic base. Making war comes much more easily. Krugman must be familiar with the concept of “Military Keynesianism,” which captures the fact that military spending can be the acceptable route to spending for prosperity in times of inadequate aggregate demand. So wouldn’t this ease in spending for war and difficulty in getting government resources for civilian needs make for war based on internal U.S. conditions? Krugman dodges the issue..

The United States has engaged in making war on an almost continual basis since World War II and has a permanent war system in place. It has a gigantic military-industrial complex that did not fade away with the demise of its supposed threatening rival, the Soviet Union, but, in fact, continued to grow. Paul Krugman fails to mention the MIC, and apparently cannot imagine that the MIC and its allies want and make wars because that is their reason for existence and source of personal and institutional social and financial advance. He also does not mention the AIPAC lobby as a force pressing for military action in the Middle East. In fact, in his over 1,750 bylined articles in the NYT since August 1986 Krugman mentions the MIC once and AIPAC and the Israel lobby never. The failure to recognize these structural forces and built-in pressures makes Krugman’s analysis a form of apologetics for homeland actions which go beyond mere “saber-rattling.”

Glenn Greenwald points out that Obama wanted to go to war against Syria just a year ago as a matter of allegedly urgent national security, but was stopped by public opinion, a failed British parliamentary vote, and the intervention of peace-maker villain Vladimir Putin. Greenwald writes: “Now the Obama administration and American political class is celebrating the one-year anniversary of the failed ‘Bomb Assad!’ campaign by starting a new campaign to bomb those fighting against Assad – the very same side the U.S. has been arming over the last two years. It’s as though the U.S. knew for certain all along that it wanted to fight in the war in Syria, and just needed a little time to figure out on which side it would fight. …Something very similar happened in Libya: the U.S. spent a decade insisting that a Global War on Terror – complete with full-scale dismantling of basic liberties and political values – was necessary to fight against the Unique Threat of Al Qaeda and ‘Jihadists’, only to then fight on the same side as them, and arming and empowering them.”  ((Glenn Greenwald, “The Fun of Empire: Fighting on All Sides of the War on Syria,” The Intercept, August 27, 2014))

Krugman will have none of this. In keeping with chauvinistic premises that he shares with the editors, the United States is the benevolent party, defending against evil external forces that are affected by “nationalism” and other scary internal pressures from which his country is free.

Krugman’s remarks on Russian nationalism and Putin are pathetic and show that his understanding of the Ukraine crisis is minimal, but in complete accord with U.S. war propaganda, which flows through the NYT in both news and editorial perspectives. (Veteran journalist Robert Parry has been providing a valuable running commentary on the NYT’s “profoundly biased” coverage of Ukraine; see his “Selective Outrage Over Ukraine POWs,”, August 25, 2014) Krugman never for a moment conceives that the crisis might be a result of the steady U.S. advance toward Russia’s borders, its own interventions in Ukraine and the genuine security threat that its successful regime change in Kiev poses to Russia. Knowledgable analysts like Stephen Cohen, John Mearsheimer, Ray McGovern, Michael Scheuer and John Matlock all see the Russian actions as defensive and not based on nationalist frenzy and empire building; just as they see the U.S.-NATO advance as aggressive, foolish and dangerous.

In an article in the establishment journal Foreign Affairs, John Mearsheimer writes: “The taproot of the trouble is NATO enlargement, the central element of a larger strategy to move Ukraine out of Russia’s orbit and integrate it into the West…. Since the mid-1990s, Russian leaders have adamantly opposed NATO enlargement, and in recent years, they have made it clear that they would not stand by while their strategically important neighbor turned into a Western bastion. For Putin, the illegal overthrow of Ukraine’s democratically elected and pro-Russian president — which he rightly labeled a ‘coup’– was the final straw. He responded by taking Crimea, a peninsula he feared would host a NATO naval base, and working to destabilize Ukraine until it abandoned its efforts to join the West.” ((John Mearsheimer, “Why the Ukrainian Crisis Is the West’s Fault,” Foreign Affairs, September.-October, 2014)) Krugman misses this crucial line of analysis, in parallel with the fact that none of these authors are permitted access to his paper.

Krugman says “we have to worry about escalation in Ukraine,” but again he pins the onus for this solely on Putin and Russia. But wasn’t the escalation quickly brought about following the February 2014 coup with the Kiev government’s pacification program in the East? Putin is pledged to protect Russians in Eastern Ukraine, but he has given strong evidence that he aims for a federal solution in Ukraine, not a conquest and/or full independence for the East. He has not gotten any support for this either in Kiev or Washington; the latter could easily bring about a cease fire and negotiated federal solution if it desired, but it hasn’t shown any interest in doing this. Arguably, this is because Washington has Putin in a trap in which he must suffer a defeat and admission of weakness by Kiev success in its pacification effort, at heavy cost to Eastern Ukrainians, or give a military response that would possibly bring war more widely or at least further discredit him and Russia in the West as aggressors. The United States has done well in creating chaos in the Middle East, and the powerful war party is happy, with good further prospects.  ((Michael Payne, “Washington War Hawks Simply Ecstatic Over Growing World Turmoil,” NationOfChange, August 26, 2014))

Krugman ends on the note that if “authoritarian regimes without deep legitimacy are tempted to rattle sabers when they can no long deliver good performance,” then we must worry about China’s reaction when their miracles come to an end, “something many economists think will happen soon.” But his own country is still suffering from excess unemployment, has barely gotten out of its major aggressive wars in Iraq and Afghanistan, increasingly rattles sabers on the Ukraine and around China itself, threatens escalated military action in Iraq and Syria, and has managed a huge extension of NATO membership and ”out-of-area” responsibilities, with almost daily training and attack-defense exercises from the Baltic to the Black Sea, Mediterranean and the Western Pacific. This all follows the demise of the Soviet Union, whose threat was held to justify NATO and the MIC. But Krugman is not worried about this and doesn’t find it “scary.” We are the good guys, and all those wars in which we have engaged we must assume to have been based on good reasons. There may be a class war at home, but it stops there. I repeat: we are good.

• First published in Z Magazine, October 2014

Edward S. Herman is an economist and media analyst with a specialty in corporate and regulatory issues as well as political economy and the media. Read other articles by Edward.