Two By Krugman

September 23, 2005
The Big Uneasy
By PAUL KRUGMAN
Although Hurricane Katrina drowned much of New Orleans, the damage to America's economic infrastructure actually fell short of early predictions. Of course, Rita may make up for that.

But Katrina did more than physical damage; it was a blow to our self-image as a nation. Maybe people will quickly forget the horrible scenes from the Superdome, and the frustration of wondering why no help had arrived, once cable TV returns to nonstop coverage of missing white women. But my guess is that Katrina's shock to our sense of ourselves will persist for years.

America's current state of mind reminds me of the demoralized mood of late 1979, when a confluence of events - double-digit inflation, gas lines and the Iranian hostage crisis - led to a national crisis of confidence.

Start with economic confidence. The available measures say that consumer confidence, which was already declining before Katrina hit, has now fallen off a cliff. One well-respected survey, from the University of Michigan, says that consumer sentiment is at its lowest level since George Bush the elder was president and "America: What Went Wrong?" was a national best seller.

It's true that gasoline prices have receded from their post-Katrina peaks. But even if Rita spares the refineries, a full recovery of economic confidence seems unlikely. For one thing, it looks as if we're in for a long, cold winter: natural gas and fuel oil are still near their price peaks. And most families were already struggling even before Katrina. A few weeks ago, the Census Bureau reported that in 2004, while Washington and Wall Street were hailing a "Bush boom," poverty increased, and median family income failed to keep up with inflation. It's safe to assume that most families did even worse this year.

Then there's the war in Iraq, which is rapidly becoming impossible to spin positively: the purple fingers have come and gone, and there are no more corners to turn. As a result, views that people like Howard Dean were once derided for are becoming the majority opinion. Most Americans say the war was a mistake; a majority say the administration deliberately misled the country into war; almost 4 in 10 say Iraq will turn into another Vietnam.

And many people are outraged by the war's cost. The general public doesn't closely follow economists' arguments about the risks of budget deficits, or try to decide between competing budget projections. But people do know that there's a big deficit, that politicians keep calling for cuts in spending and that rebuilding after Katrina will cost a lot of money. They resent the idea that large sums are being spent in a faraway country, where we're waging a war whose purpose seems increasingly obscure.

Finally, fragmentary evidence - like a sharp drop in the fraction of Americans who approve of President Bush's performance in handling terrorism and the failure of large crowds to show up for the Pentagon's "America Supports You" march and country music concert - suggests that the confluence of Katrina and the fourth anniversary of 9/11 has caused something to snap in public perceptions about the "war on terror."

In the early months after 9/11, America's self-confidence actually seemed to have been bolstered by the attack: the Taliban were quickly overthrown, and President Bush looked like an effective leader. The positive perception of what happened after 9/11 has, needless to say, been a mainstay of Mr. Bush's political stature.

But now that more time has elapsed since 9/11 than the whole stretch from Pearl Harbor to V-J Day, people are losing faith. Osama, it turns out, could both run and hide. It's obvious from the evening news that Al Qaeda and violent Islamic extremism in general are flourishing.

And the hapless response to Katrina, which should have been easier to deal with than a terrorist attack, has shown that our leaders have done virtually nothing to make us safer.

And here's the important point: these blows to our national self-image are mutually reinforcing. The sense that we're caught in an unwinnable war reinforces the sense that the economy is getting worse, and vice versa. So we're having a crisis of confidence.

It's the kind of crisis that opens the door for dramatic political changes - possibly, but not necessarily, in a good direction. But who will provide leadership, now that Mr. Bush is damaged goods?



Copyright 2005 The New York Times Company

September 26, 2005
Find the Brownie
By PAUL KRUGMAN
For the politically curious seeking entertainment, I'd like to propose two new trivia games: "Find the Brownie" and "Two Degrees of Jack Abramoff."

The objective in Find the Brownie is to find an obscure but important government job held by someone whose only apparent qualifications for that job are political loyalty and personal connections. It's inspired by President Bush's praise, four days after Katrina hit, for the hapless Michael Brown, the director of the Federal Emergency Management Agency: "Brownie, you're doing a heck of a job." I guess it depends on the meaning of the word heck.

There are a lot of Brownies. As Time magazine puts it in its latest issue, "Bush has gone further than most presidents to put political stalwarts in some of the most important government jobs you've never heard of." Time offers a couple of fresh examples, such as the former editor of a Wall Street medical-industry newsletter who now holds a crucial position at the Food and Drug Administration.

A tipster urged me to look for Brownies among regional administrators for the General Services Administration, which oversees federal property and leases. There are several potential ways a position at G.S.A. could be abused. For example, an official might give a particular businessman an inside track in the purchase of government property - the charge against David Safavian, who was recently arrested - or give a particular landlord an inside track in renting space to federal agencies.

Some of the regional administrators at G.S.A. are longtime professionals. But the regional administrator for the Northeast and Caribbean region, which includes New York, has no obvious qualifications other than being the daughter of the chairman of the Conservative Party of New York State. The regional administrator for the Southwest, appointed in 2002 after a failed bid for his father's Congressional seat, is Scott Armey, the son of Dick Armey, the former House majority leader.

You get the idea. Go ahead, see what - or rather who - you can come up with.

Jack Abramoff is a lobbyist who was paid huge sums by clients such as casino-owning Indian tribes and sweatshop operators on Saipan. Two Degrees of Jack Abramoff is inspired by the remarkable centrality of Mr. Abramoff, who was indicted last month on charges of fraud, in Washington's power structure.

The goal isn't to find important political players who were chummy with Mr. Abramoff - that's too easy. Instead, you have to find people linked by employment. One degree of Jack Abramoff is someone who actually worked for the lobbyist. Two degrees is a powerful Washington figure who hired someone who formerly worked for Mr. Abramoff, or who had one of his own former employees go to work for Mr. Abramoff.

Grover Norquist, the powerful antitax lobbyist, is a one-degree man. Mr. Norquist was Mr. Abramoff's campaign manager when he ran for chairman of the College Republican National Committee, then became his executive director. And don't dismiss this as kid stuff: as Franklin Foer explains in The New Republic, the college Republican organization pays serious salaries and has been a steppingstone for the likes of Lee Atwater and Karl Rove.

Mr. Rove, by the way, is a two-degree man. He hired Susan Ralston, Mr. Abramoff's personal assistant, as his own personal assistant. For those unfamiliar with what that means, Ms. Ralston became Mr. Rove's gatekeeper - the person who determined who got to see the great man.

Tom DeLay, the House majority leader, is also a two-degree man. Tony Rudy, who worked for Mr. DeLay in several capacities, left to work for Mr. Abramoff.

Finally, somebody should be considered a two-degree man on account of the recently arrested Mr. Safavian, who worked for both Mr. Abramoff and Mr. Norquist, then went first to the G.S.A. and on to the White House Office of Management and Budget, where he oversaw procurement policy. But I'm not sure who gets credit for hiring Mr. Safavian.

O.K., enough joking. The point of my games - which are actually research programs for enterprising journalists - is that all the scandals now surfacing are linked. Something is rotten in the state of the U.S. government. And the lesson of Hurricane Katrina is that a culture of cronyism and corruption can have lethal consequences.



Copyright 2005 The New York Times Company