Sunday, July 21, 2013

Krugman on Pensions: Move Along Folks,
Nothing to See Here

I really do not get Krugman's point on public pensions this morning.   Okay, I can see that he is saying, put narrowly, that the  shortfall in state and local pension liabilities isn't as big a problem as it cracked up to be.  I suppose the answer to that is the old punchline, "compared to what?"  And I guess I'd agree that the current shortfall--even a much bigger one--might not be as bad as global warming, or nuclear proliferation, whatever, but this doesn't seem to be Krugman's ultimate point.  What really seems to bug him is the intuition that there is some kind of sinister conspiracy to exaggerate the extent of a problem which, taken in perspective, just isn't that bad..  "So, why is it being hyped?," he asks, and "Do I even need to ask?"

Well, maybe he doesn't but I do.  I'm really not clear what the answer to his rhetorical question.  I guess he might be telling us that it is being hyped by those who hope to demoralize us into giving up and accepting our impending poverty and desolation.  And I agree, there might be some of that going on--the conservative noise machine has gone a long way towards achieving this result with Social Security (don't bother, it won't be there anyway!)..  But the public pension problem is real, even if not as big as a breadbox.  And I suspect a good bit of the concern comes from people who are just damn ticked off when they finally discover how badly they have been (are being) used and abused by near- (or outright) criminal mismanagement.  Pensions are a classic instance of a can that can be  kicked down the road because, even though all the interested parties will get old or dependent sooner or later, still for most of them the point is not yet.   Sure, some will say that you left the window latch unhooked last night, you really can't blame the burglar for walking off with grandmother's heirloom necklace.  But I don't really think Krugman wants to put himself in company with that crowd.

Actually, when I stop to think of it, I guess I am part of the demoralization faction because I've been pretty well satisfied for years that just about none of us--except those that get lucky and die early--will see what they thought they were promised out of their public pension.   But "move along folks, nothing to see here," is not a good solution.

Afterthought  But he was perfectly right in showcasing Dean Baker who picked up that absurd pension howler in the Washington Post this morning.

Afterthought II  For a bit of cold water on the smoldering K, go here.  "Public Plan and Reputational Risk Task Force," heh, what a concept.

Afterthought III:  In fairness, I suppose Krugman might be thinking of Walter Russell Mead, for whom every time a public pension stumbles, an angel gets its wings.  See, e.g., link.


Larry, The Barefoot Bum said...

The austerity proponents really are having giant hysterical fits about the fact that pensions and social security are going to consume something like 138% of annual GDP by next Thursday.

The whole strategy of the austerity crowd is primarily to take real but solvable problems, such as unfunded pensions, Medicare, Social Security, etc., and turn them into catastrophic crises to justify cutting every possible social program. It's getting so bad that actually believe that these guys really are, in a very literal and non-metaphorical sense, starting to plan out where to put the Soylent Green factories.

Krugman tries to be the voice of moderation in a sea of hysteria. For a capitalist, he doesn't do too poorly.

I read a lot of econ blogs, which is good and bad; good because I know what Krugman is talking about, but bad because I never remember precisely where I read anything. So I apologize for not citing any sources here.

Larry, The Barefoot Bum said...

Sorry, "fact" should be in scare quotes above.

Anonymous said...

Why the F does Sperber, Jonathan interview video start playing when I open Underbelly? Fix it!!!

Buce said...

Nothing on this end and I can't replicate it (and no other complaints). I wonder if you have a default command in your own prior history.