Paul Krugman spares Obama's blushes by refusing Treasury job

Jan 8, 2013
Charles Laurence

Republicans loathe Hagel, Democrats distrust Brennan, liberals loves Prof Krugman. But he's not interested

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WITH considerable aplomb, President Obama yesterday managed to annoy both the Republican Right and his own Democratic supporters with the names he put forward to fill two key posts for his upcoming second term.

As widely predicted, Obama's pick for Secretary of Defence is Chuck Hagel, a former Republican senator from Nebraska, and a man who would be both the first non-commissioned officer to be put in charge of the world's most powerful military machine, and the first Vietnam veteran.

Hagel was wounded in combat twice, prompting Obama to mention that he is a man who does not forget "the reality of war".

Republicans loathe Hagel because he is no hawk, because he voted first for and then against George W.Bush's wars, and because he made a $1,000 donation to fellow-Vietnam vet John Kerry's Democrat presidential run against Dubya in 1994.

And he refuses to toe a line just because it has been drawn by Israel, once saying: "I am a United States Senator. I am not an Israeli Senator." That has had him tarred as "anti-Semitic".

Other policy positions such as being keen on dialogue with Iran, wanting to bail out of Afghanistan and believing that the Military Industrial Complex could survive a budget cut are lesser sins by comparison. But they all make him a very acceptable candidate to Democrats.

Not so the other guy, John Brennan, whom Obama wants to make the head of the CIA.

A career apparatchik, Brennan is a tricky proposition because he has been among America's most senior apologists for torture. He does not call it torture, of course: he is a supporter of Advanced Interrogation Technique.

This puts Brennan at the centre of the moral debate: should America allow torture on its enemies, or should it aspire once again to be a nation held up as the world's moral beacon?

Brennan was Obama's choice for The Company back in 2008. But with the wounds of the Bush era still bleeding, the idea was quickly scotched.

So the President deftly reshuffled the cards to create a new job for Brennan on his own staff within the White House, where no one can challenge his appointments. Obama combined homeland security with national security under the National Security Council, and appointed Brennan to run it.

In this capacity, Brennan runs the drone strikes which have become Obama's signature weapon in the war on terror. And Brennan is the man Obama has to thank for the assassination of Osama bin Laden. In short, Obama owes him.

Both candidates have to be approved by the Senate in the often anguished 'nomination' process for cabinet officers, judges and so on.

What happens next will be an acid test of Obama's political clout in Washington as the new term begins. If he gets these men through - and the odds are considered "on" - he will have got his way with both his own party and the Republicans. It is all very Obama. Some might say tiresomely so.

Which is why a third name being mentioned for high office is so refreshing.

Paul Krugman (pictured above), the Princeton economics professor, is billed as the best known economist in America, and perhaps the world, after years as a columnist for the New York Times. He is a Nobel laureate. His books are bestsellers.

His latest wheeze on the Times oped page concerns a solution to America's trillion-dollar debt problem. The president is entitled to mint a coin of any denomination. Bingo: he should order a trillion-dollar platinum coin and deposit it in the national treasury and watch the debt go down.

The idea is obviously fools' gold, but that's Krugman's point. As a perfectly legal trick, it would be less damaging to the economy than Washington's games of chicken with fiscal cliffs and debt ceilings. He suggests that the coin should be stamped with the image of Speaker John Boehner, whose reign in Congress has brought the nation to the brink.

It's the sort of original thinking that makes Krugman so popular among American liberals. He was among the first to warn that the housing bubble would lead to financial collapse, he deems bank regulation essential, he espouses stimulus policies, he calls for fair taxation and the closing of the income gap, and he sees austerity as a means of making the poor pay for the greed of the rich.

Now there's a petition in place to have Krugman made Treasury Secretary. It was started by the actor/activist Danny Glover and a left-of-centre organisation called which has a petitioning arm called As of yesterday, more than 200,000 had signed up. has its origins in the innovative on-line campaigning of the Democratic primaries of 2007 which first made Obama a viable candidate, and then helped him get the better of Hillary Clinton. But in terms of political debt, that was then and Brennan is now.

Would Obama dare appoint Krugman? Of course not. The banksters would surely reach for their guns: Wall Street has long funded presidential campaigns in exchange for the top jobs at the Treasury and the Federal Reserve.

Anyway, Krugman yesterday spared Obama the need to snub him. He wrote on his blog: "An administration job, no matter now senior, would actually reduce my influence." He's right, of course.

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To quote from above....

"....And he refuses to toe a line just because it has been drawn by Israel, once saying: "I am a United States Senator. I am not an Israeli Senator." That has had him tarred as "anti-Semitic".....''

It is not just Chuck Hagel, but everyone in the world who seems to be tarred as anti-Semitic for speaking the truth about anything that is pertinent to Israel or Jews. What Hagel said is absolutely true: he works for the American people and not the Israelis - so why does that make him an anti-Semite for voicing the truth?

Are the hardliners in Israel really convinced that their hawkish approach towards the nation's safety will be the right one on the long run? Most international observers don't think so, on the contrary. It will be interesting to notice which policy Mr. Hagel will conduct towards the Middle East and the Palestinian affair in particular. Up to now Washington remained in the middle of the road, with an emotional preference for Israel. It is very unlikely that this attitude shall change. As a consequence the explosive situation in the region will remain what it is now: most uncertain and unsteady. I am afraid that this stalemate will not be in the advantage of neither Israel nor its Arab neighbours. UN resolutions couldn't force a break-through. Only a drastic switch of leadership's mentality can accomplish this. The painful truth is that there are no signs that courage and wisdom will prevail over fear and narrow-mindedness.