Friendly Fire


Newsweek went with a cover story this week about President Obama being attacked by leftist economist Paul Krugman.

In his twice-a-week column and his blog, Conscience of a Liberal, he criticizes the Obamaites for trying to prop up a financial system that he regards as essentially a dead man walking.

This is the biggest threat to Obama’s race to socialize the country before anyone notices what he’s up to. There was a philosophical reason that Obama built his career in partnership with Jeremiah Wright, Michael Pfleger and Bill Ayers, and eventually the nation will catch on. The President hopes to eliminate the last vestiges of the constitution before reality sets in for the average American.

In conversation, he portrays Treasury Secretary Tim Geithner and other top officials as, in effect, tools of Wall Street (a ridiculous charge, say Geithner defenders). These men and women have “no venality,” Krugman hastened to say in an interview with NEWSWEEK.

Of course, Krugman doesn’t have a problem with trashing the premise upon which America was based, which is what makes this all the more fascinating. He’s right there on the far left, with Obama. Krugman is a Nobel Prize winning economist, and his fear is that America will not be able to recover economically from this presidency.

But they are suffering from “osmosis,” from simply spending too much time around investment bankers and the like.

That’s a nice way to say that the guys in charge of cracking down on Wall Street are Wall Street.

In his Times column the day Geithner announced the details of the administration’s bank-rescue plan, Krugman described his “despair” that Obama “has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing. It’s as if the president were determined to confirm the growing perception that he and his economic team are out of touch, that their economic vision is clouded by excessively close ties to Wall Street.”

What, exactly, is his problem with the administration’s policies?

Krugman generally applauds Obama’s efforts to tax the rich in his budget and try for massive health-care reform. On the all-important questions of the financial system, he says he has not given up on the White House’s seeing the merits of his argument—that the government must guarantee the liabilities of all the nation’s banks and nationalize the big “zombie” banks—and do it fast. “The public wants to trust Obama,” Krugman says. “This is still Bush’s crisis. But if they wait, Obama will be blamed for a fair share of the problem.”

The quicker that happens, the better for the constitution.

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