By PAUL KRUGMAN
Published: June 14, 2012 48 Comments
Hope springs eternal. For a few hours I was ready to applaud Mitt Romney for speaking honestly about what his calls for smaller government actually mean.
Fred R. Conrad/The New York Times
Paul Krugman
Never mind. Soon the candidate was being his normal self, denying having said what he said and serving up a bunch of self-contradictory excuses. But let’s talk about his accidental truth-telling, and what it reveals.
In the remarks Mr. Romney later tried to deny, he derided President Obama: “He says we need more firemen, more policemen, more teachers.” Then he declared, “It’s time for us to cut back on government and help the American people.”
You can see why I was ready to give points for honesty. For once, he actually admitted what he and his allies mean when they talk about shrinking government. Conservatives love to pretend that there are vast armies of government bureaucrats doing who knows what; in reality, a majority of government workers are employed providing either education (teachers) or public protection (police officers and firefighters).
So would getting rid of teachers, police officers, and firefighters help the American people? Well, some Republicans would prefer to see Americans get less education; remember Rick Santorum’s description of colleges as “indoctrination mills”? Still, neither less education nor worse protection are issues the G.O.P. wants to run on.
But the more relevant question for the moment is whether the public job cuts Mr. Romney applauds are good or bad for the economy. And we now have a lot of evidence bearing on that question.
First of all, there’s our own experience. Conservatives would have you believe that our disappointing economic performance has somehow been caused by excessive government spending, which crowds out private job creation. But the reality is that private-sector job growth has more or less matched the recoveries from the last two recessions; the big difference this time is an unprecedented fall in public employment, which is now about 1.4 million jobs less than it would be if it had grown as fast as it did under President George W. Bush.
And, if we had those extra jobs, the unemployment rate would be much lower than it is — something like 7.3 percent instead of 8.2 percent. It sure looks as if cutting government when the economy is deeply depressed hurts rather than helps the American people.
The really decisive evidence on government cuts, however, comes from Europe. Consider the case of Ireland, which has reduced public employment by 28,000 since 2008 — the equivalent, as a share of population, of laying off 1.9 million workers here. These cuts were hailed by conservatives, who predicted great results. “The Irish economy is showing encouraging signs of recovery,” declared Alan Reynolds of the Cato Institute in June 2010.
But recovery never came; Irish unemployment is currently more than 14 percent. Ireland’s experience shows that austerity in the face of a depressed economy is a terrible mistake to be avoided if possible.
And the point is that in America it is possible. You can argue that countries like Ireland had and have very limited policy choices. But America — which unlike Europe has a federal government — has an easy way to reverse the job cuts that are killing the recovery: have the feds, who can borrow at historically low rates, provide aid that helps state and local governments weather the hard times. That, in essence, is what the president was proposing and Mr. Romney was deriding.
So the former governor of Massachusetts was telling the truth the first time: by opposing aid to beleaguered state and local governments, he is, in effect, calling for more layoffs of teachers, policemen and firemen.
Actually, it’s kind of ironic. While Republicans love to engage in Europe-bashing, they’re actually the ones who want us to emulate European-style austerity and experience a European-style depression.
And that’s not just an inference. Last week R. Glenn Hubbard of Columbia University, a top Romney adviser, published an article in a German newspaper urging the Germans to ignore advice from Mr. Obama and continue pushing their hard-line policies. In so doing, Mr. Hubbard was deliberately undercutting a sitting president’s foreign policy. More important, however, he was throwing his support behind a policy that is collapsing as you read this.
In fact, almost everyone following the situation now realizes that Germany’s austerity obsession has brought Europe to the edge of catastrophe — almost everyone, that is, except the Germans themselves and, it turns out, the Romney economic team.
Needless to say, this bodes ill if Mr. Romney wins in November. For all indications are that his idea of smart policy is to double down on the very spending cuts that have hobbled recovery here and sent Europe into an economic and political tailspin.
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