Krugman and Keller

Prof. Krugman, in “Hawks and Hypocrites,” says the deficit scolds have discredited themselves with arguments that are wrong and also dishonest.  Yes, Paul, they have.  But they’ll probably end up shredding the safety net anyway.  Mr. Keller calls for “A New Manhattan Project” and says the misery of Hurricane Sandy has created a fleeting moment of political will, a chance to assure the survival of our greatest metropolis.  The nation is supposed to rally together and save a great city.  I don’t recall the same cri du coeur after Katrina.  Oh, right…  All those brown people don’t matter as much as all those bankers.  Silly me.  Here’s Prof. Krugman:

Back in 2010, self-styled deficit hawks — better described as deficit scolds — took over much of our political discourse. At a time of mass unemployment and record-low borrowing costs, a time when economic theory said we needed more, not less, deficit spending, the scolds convinced most of our political class that deficits rather than jobs should be our top economic priority. And now that the election is over, they’re trying to pick up where they left off.

They should be told to go away.

It’s not just the fact that the deficit scolds have been wrong about everything so far. Recent events have also demonstrated clearly what was already apparent to careful observers: the deficit-scold movement was never really about the deficit. Instead, it was about using deficit fears to shred the social safety net. And letting that happen wouldn’t just be bad policy; it would be a betrayal of the Americans who just re-elected a health-reformer president and voted in some of the most progressive senators ever.

About the hypocrisy of the hawks: as I said, it has been evident for years. Consider the early-2011 award for “fiscal responsibility” that three of the leading deficit-scold organizations gave to none other than Paul Ryan. Then as now, Mr. Ryan’s alleged plans to reduce the deficit were obvious flimflam, since he was proposing huge tax cuts for the wealthy and corporations while refusing to specify how these cuts would be offset. But in the eyes of the deficit scolds, his plan to dismantle Medicare and his savage cuts to Medicaid apparently qualified him as a fiscal icon.

And how did the deficit scolds react when Mitt Romney served up similar flimflam, with Mr. Ryan as his running mate? Well, the Peter G. Peterson Foundation is deficit-scold central; Peterson funding lies behind much of the movement. Sure enough, David Walker, the foundation’s former C.E.O. and arguably the most visible deficit scold in America, endorsed the Romney/Ryan ticket.

And then there’s the matter of the “fiscal cliff.”

Contrary to the way it’s often portrayed, the looming prospect of spending cuts and tax increases isn’t a fiscal crisis. It is, instead, a political crisis brought on by the G.O.P.’s attempt to take the economy hostage. And just to be clear, the danger for next year is not that the deficit will be too large but that it will be too small, and hence plunge America back into recession.

Deficit scolds are having a hard time with this issue. How can they warn us not to go over the fiscal cliff without seeming to contradict their own rhetoric about the evils of deficits?

This wouldn’t be hard if they had been making a more honest case on the budget: the truth is that deficits are actually a good thing when the economy is deeply depressed, so deficit reduction should wait until the economy is stronger. As John Maynard Keynes said three-quarters of a century ago, “The boom, not the slump, is the right time for austerity.” But since the deficit scolds have in fact been demanding that we make deficits the priority even when the economy is depressed, they can’t go there.

So what we get instead, for example in a white paper on the fiscal cliff from the Committee for a Responsible Federal Budget, is a garbled set of complaints: The adjustment is too fast (why?), or it’s the wrong kind of deficit reduction, for reasons not made clear. Or maybe they are made clear, after all. For even as it rails against deficits, the white paper argues against raising tax rates and even suggests cutting them.

So the deficit scolds, while posing as the nation’s noble fiscal defenders, have in practice shown themselves both hypocritical and incoherent. They don’t deserve to have a central role in policy discussion; they really don’t even deserve a seat at the table. And they certainly don’t deserve to have one of their own appointed as Treasury secretary.

I don’t know how seriously to take the buzz about appointing Erskine Bowles to replace Timothy Geithner. But in case there’s any reality to it, let’s recall his record. Mr. Bowles, like others in the deficit-scold community, has indulged in scare tactics, warning of an imminent fiscal crisis that keeps not coming. Meanwhile, the report he co-wrote was supposed to be focused on deficit reduction — yet, true to form, it called for lower rather than higher tax rates, and as a “guiding principle” no less. Appointing him, or anyone like him, would be both a bad idea and a slap in the face to the people who returned President Obama to office.

Look, we should be having a serious discussion about America’s fiscal future. But a serious discussion is exactly what we haven’t been having these past couple years — because the discourse was hijacked by the wrong people, with the wrong agenda. Let’s show them the door.

Now here’s Mr. Keller’s LONG piece:

When the monster storm struck, my colleagues at The Times’s Room for Debate desk asked an array of experts whether New York should build protective barriers against the next one. The answers covered, pardon the expression, the waterfront: Do something big! (“Worth the Investment”) Do something small! (“Big Projects, Big Problems”) Do nothing much! (“Low on the List of Life-Saving Ideas”) Think about doing, well, something! (“A Wake-Up Call to Consider the Options”)

My friend and fellow columnist Joe Nocera, who grew up in Providence, R.I., thinks New York should look to that city’s waterfront defense system of dikes and gates. My friend Andy Revkin, whose indispensable Dot Earth blog is where serious climate conversation takes place, prefers to emphasize more modest projects aimed at bolstering the city’s resilience. New York’s governor, Andrew Cuomo, has expressed interest in taming the surging sea. Mayor Michael Bloomberg sounds more skeptical.

It’s enough to send you down a deep hole of denial — which, I fear, is where the whole question of New York’s survival will end up without a public outcry or a feat of leadership. The problem is not just that smart people differ wildly about what to do; it’s that the problem crosses multiple jurisdictions, that everything costs loads of money and that humans have short memories. The will to do anything ambitious tends to recede almost as fast as the tide surge.

But this is no time for fatalism or forgetting. While victims are still digging out, while the costs are still adding up, now is the time to set big things in motion. When President Obama visits this week, he has an opportunity to address not just the misery before his eyes, but the magnitude of the future threat it represents and the scale of the commitment required. Leading the world in the effort to curtail climate change is a moral obligation to our descendants, but there is an equally urgent need to defend against the consequences of the damage already done to our poor biosphere. At the risk of slighting the brutalized communities of the Rockaways and the Jersey Shore, I’ll call it a new Manhattan Project. It would make someone a fine legacy.

I’ve spent some time talking to people who study weather disasters from different angles, looking for a leadership to-do list. Here’s where I’d start:

Come together.

The number of local, state, regional and federal agencies that have a piece of the action in disasters is paralyzing. Everybody is in charge, so nobody is in charge. This problem needs a chairman of the board: someone with the conviction and the pulpit to rally support, with the authority to bring some order to the chaos, with the trust of the private sector and with the requisite mastery of politics, bureaucracy and finance. The logical candidate is Mayor Bloomberg. Of course the three governors — Andrew Cuomo of New York, Chris Christie of New Jersey and Dannel Malloy of Connecticut — are essential partners, sources of authority, energy and ingenuity. But someone needs to play the role Mitt Romney played in the rescue of the Olympics. (Yes, Mitt’s available. No, I don’t think so.) Bloomberg has made climate change and its urban consequences a priority for five years. He’s a first-class manager and isn’t running for anything. His initial skepticism regarding a re-engineering of the waterfront could actually be an asset; advocates will have to make their case. He’s tenacious (O.K., stubborn) and he’s independent (sometimes, admittedly, to the point of being politically tone deaf). He’s consumed with the immediate business of recovery, and he’s a lame duck, with just a year to go, but he’s singularly positioned to get this started and — who knows? — saving New York might turn into the perfect post-mayoral project for a capable billionaire.

Think big and small, long and short.

There are lots of short-term and medium-term things to be done. Revkin calls them the no-brainers — measures to improve the resilience of the city: toughening building codes to get vulnerable electrical systems out of flood-prone basements, retrofitting tunnels and subways with waterproof lids or inflatable barriers, paving streets with more permeable surfaces. Bloomberg’s administration has made a good start on planning a more resilient infrastructure, but these things are expensive and some are resisted by developers. Superstorm Sandy should put a foot on the accelerator.

But resilience isn’t enough. Unless we are resigned to letting New York become Venice — or Atlantis — we need to contend with the reality that seas are rising and severe weather is here to stay. If we are going to do any major re-engineering of our waterfront, we’re already late getting started. Malcolm Bowman, the oceanographer who heads the Stony Brook Storm Surge Research Group and who is probably the region’s leading champion of building floodgates, points out that comparable projects protecting London, the Netherlands and St. Petersburg, Russia, have taken decades to build. Just the study required to decide what, if anything, to build is likely to take five years, and the Army Corps of Engineers, which is responsible for managing our navigable waterways, won’t start studying until Congress tells it to.

Bowman’s team has a concept that entails two barriers — one in the upper East River, the other stretching from northern New Jersey to southwestern Long Island — with floodgates for shipping. He estimates the cost at $16 billion, which seems cheap against the $50 billion or more cost of Sandy. Is that the right approach? I’m the wrong guy to ask. It’s time to call in the army.

Think green … enough.

In a post-Sandy roundup of bright ideas for the New York waterfront, The Times’s Alan Feuer described a plan devised by an architecture firm to buffer Lower Manhattan against future storms by creating “a fringe of mossy wetlands strapped like a beard to Lower Manhattan’s chin” — parks and tidal salt marshes that would sponge up the surging tide. The architect’s rendering looked unbelievably cool. In the green part of my heart, I find this appealing. The practical part of my brain suspects it is a lovely fantasy. (Bowman, the barrier-minded oceanographer, calls it “science fiction.”) But if wetlands restoration is not the answer, most experts say it is part of the answer. One reason runways at Kennedy Airport are less vulnerable to the disabling waves that afflict La Guardia in a storm is that restored wetlands in Jamaica Bay absorb a lot of water. Green should have a seat at the table.

Don’t just rebuild. Rethink.

The toll of natural disasters has been growing, in part because of more severe weather, in part because we keep crowding more people and property into vulnerable areas. But as William Hooke, a senior policy fellow at the American Meteorological Society, points out, the damage is also a result of our failure to learn from experience. All of our postdisaster apparatus is focused on putting things back the way they were — even if that means putting people and property back in harm’s way. Hooke suggests that disaster response should emulate commercial aviation. When a wing falls off an airplane, the National Transportation Safety Board does the forensics. The N.T.S.B. has a small staff of experts, but after each disaster it drafts the talent it needs from other public agencies and the private sector — including the airlines, the aircraft makers, the pilots’ union. They do not ask how to put the wing back on the airplane. They look deep into underlying causes and serve as a catalyst for systemic reforms. It works. As commercial air travel has quadrupled, the number of accidents has remained the same or declined. “We need an analog to the N.T.S.B. for natural hazards,” Hooke says.

Stop subsidizing stupidity.

One proffered solution to weather disasters is to beat a strategic retreat from endangered areas, especially places that have been clobbered repeatedly. “There are places that Mother Nature owns,” Governor Cuomo told me, and in those places the government should look at building much differently, or buying out property owners. He’s right.

But there’s more. We not only allow people to build in vulnerable disaster zones, we pay them to do it. Federal flood insurance is subsidized. Erwann Michel-Kerjan, a Wharton School expert on risk management associated with catastrophic events, estimates that about a million American homeowners pay less than “risk based” rates — the real value — for flood coverage. The federal flood insurance program (meaning taxpayers) makes up the difference. The good news is that Congress in June passed a law phasing out the subsidy for second homes. A rare first step in the direction of common sense.

Redundancy, redundancy, redundancy.

One startling lesson of Sandy was the vulnerability of what Cuomo calls “our circulatory system” — the power, transport, fuel and communications that keep a community functioning. One step, Cuomo says, is to impose some order on competing jurisdictions so you don’t have, for example, rival electrical utilities competing for crews and equipment, bidding up the price of everything. Another is to create redundancy. How is it possible to have desperately needed gasoline sitting in underground tanks but inaccessible because the electricity is out? Why not require that gas stations of a certain scale have backup generators, even if it adds a penny or two to a gallon of gas?

The solutions might rely on technology. If you have a hybrid taxi fleet, the gas supply will last longer in an emergency. If big apartment buildings are encouraged to generate their own power (ideally solar), the consequences of a waterlogged electrical substation will be less dire. But the solutions don’t have to be complicated. As Jonathan Rose, a developer who focuses on sustainable urban design, points out, the system that gets water to New York City apartments relies heavily on the most low-tech of forces: gravity.

New thinking about budgets.

A storm blows down power lines, causing blackouts and setting homes on fire. The electrical utility companies send crews to put the power lines back up again — until the next storm, the next blackout. We know that burying the lines underground would solve the problem, but it’s really expensive and it’s not in the budget. Does that strike you as … idiotic? It does Rose. The problem, Rose says, is that in balancing expenses and revenues, governments don’t have a good way of valuing “costs avoided.” The blackouts that won’t happen because you buried the electrical lines, the businesses that won’t be shut down because you retrofitted the subways — these things have long-term value that doesn’t count in our fiscal thinking. Rose recalls that when the budding nuclear power industry could not handle the financial risks, the federal government stepped in with insurance and credit enhancement, not to mention waste disposal. He proposes a comparable approach to investing in the survival of our cities.

The original Manhattan Project mobilized 130,000 people, cost the 2012 equivalent of $25 billion and gave us, for better or for worse, the atom bomb. A new Manhattan Project could cost as much, might well employ as many people (jobs!) and would give us another century or two of America’s greatest metropolis. Because that’s what it’s really about. When Malcolm Bowman asks offhandedly, “How long do we want New York City to last?,” he is not dealing in hyperbole. He is just asking the right question.



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