Krugman: Fear of Eating

Paul Krugman takes on deregulation in the US, sounding a lot like a CCPA research associate. In a research paper released last year, Bruce Campbell and I contemplated deregulation in the Great White North (dubbed “smart regulation” by the previous Liberal government) and a current obsession of our policy elites, regulatory harmonization (dubbed “cooperation”). We made the case that harmonizing our regulations to those of the Bush regime, and outsourcing our approvals processes, were bad ideas.

So it is nice to see those concerns vindicated by Krugman, who ultimately points the finger at the government-is-always-bad, anti-regulation ideology of Milton Friedman. As bonus material, I have added a short article the looks at Krugman’s conversion to a leading progressive public intellectual, whose remarks would have been hard to imagine a decade ago.

Deregulation, I would argue, goes even further than what Krugman writes about. The conservative notion of “regulatory takings” – regulations that affect the profits of companies are essentially a form of expropriation and therefore must be compensated (the “pay the polluter” principle) – has made its way into the investment chapter of NAFTA, as well as the new BC-Alberta TILMA. These agreements create and codify “investor rights” that can trump public interest objectives. Deregulation is a major policy thrust in Canada right now, but it something that is lacking the serious public debate it deserves.

Fear of Eating
By Paul Krugman
The New York Times

These are anxious days at the lunch table. For all you know, there may be E. coli on your spinach, salmonella in your peanut butter and melamine in your pet’s food and, because it was in the feed, in your chicken sandwich.

Who’s responsible…? Some blame globalization; some blame food-producing corporations; some blame the Bush administration. But I blame Milton Friedman.

Now, those who blame globalization do have a point. …[S]ince the Food and Drug Administration has limited funds…, it can inspect only a small percentage of imports. This leaves American consumers effectively dependent on the quality of foreign food-safety enforcement. And that’s not a healthy place to be… [L]ast month the [FDA] detained shipments from China that included dried apples treated with carcinogenic chemicals and seafood “coated with putrefying bacteria.” You can be sure that a lot of similarly unsafe and disgusting food ends up in American stomachs.

Those who blame corporations also have a point. In 2005, the F.D.A. suspected that peanut butter produced by ConAgra … might be contaminated with salmonella. According to The New York Times, “when agency inspectors went to the plant…, the company acknowledged it had destroyed some product but…”… refused to let the inspectors examine its records without a written authorization.

According to the company, the agency never followed through. This brings us to our third villain, the Bush administration.

Without question, America’s food safety system has degenerated… [S]ince 2001 the F.D.A. has introduced no significant new food safety regulations…

This isn’t simply a matter of caving in to industry pressure… The … United Fresh Produce Association says that … without strong mandatory federal regulations…, scrupulous growers and processors risk being undercut by competitors more willing to cut corners on food safety. …

Why would the administration refuse to regulate an industry that actually wants to be regulated? Officials … are also influenced by an ideology that says business should never be regulated, no matter what.

The economic case for having the government enforce rules on food safety seems overwhelming. Consumers have no way of knowing whether the food they eat is contaminated, and in this case what you don’t know can hurt or even kill you. But there are some people who refuse to accept that case, because it’s ideologically inconvenient.

That’s why I blame … Milton Friedman, who called for the abolition of both the food and the drug sides of the F.D.A. What would protect the public from dangerous or ineffective drugs? “It’s in the self-interest of pharmaceutical companies not to have these bad things,” he insisted… He would presumably have applied the same logic to food safety (as he did to airline safety): regardless of circumstances, you can always trust the private sector to police itself.

O.K., I’m not saying that Mr. Friedman directly caused tainted spinach and poisonous peanut butter. But he did help to make our food less safe, by legitimizing what the historian Rick Perlstein calls “E. coli conservatives”: ideologues who won’t accept even the most compelling case for government regulation.

Earlier this month the administration named, you guessed it, a “food safety czar.” But the food safety crisis isn’t caused by the arrangement of the boxes on the organization chart. It’s caused by the dominance within our government of a literally sickening ideology.

Mark Levinson seeks out why Krugman has morphed from a snobby academic economist with some leanings toward popularizing economic concepts to a bona fide progressive public intellectual:

The ‘Usefully Dangerous’ Economist

By Mark Levinson

Spring 2007

This is the story of two economists—John Kenneth Galbraith, who died last year at age ninety-seven, and Paul Krugman, who at fifty-four is in his prime as an economist and a columnist for the New York Times. Like Galbraith, Krugman is a forthright liberal, the most well-known economist of his generation, skilled at writing about economics for a general public.

Yet relations between the two were not what one might think. Throughout much of the 1990s, Krugman declared war on popular writers of economics, and sneeringly said of Galbraith that “he has never been taken seriously by his academic colleagues, who regard him as more of a ‘media personality.’” The “fault line,” he wrote, “between serious economic thinking and economic patent medicine, between the professors and the policy entrepreneurs, is at least as important as the divide between left and right.”

But the world changed when George W. Bush was elected in 2000, and what is arguably the worst administration in the history of the United States took office. It seemed to shake Krugman to the core. He now says of his polemics in the 1990s, “I was wrong obviously. If I’d understood where politics would be now, it would have been quite different.”

Whether lashing out at the administration’s shifting explanations as to why they were delivering truckloads of cash to the wealthy in the form of tax cuts or explaining the dishonesty in the administration’s plans to privatize Social Security or puncturing the cultlike worship of Alan Greenspan or railing against Bush’s deceptions about the war or describing how oil company lobbyists made energy policy for Dick Cheney’s task force, Krugman has committed himself to exposing “the lies of the powerful.”

It is as if Krugman were transported back in time and took to heart Galbraith’s words from his presidential address to the American Economic Association in 1972. Galbraith insisted that power—which he defined as “the ability of persons or institutions to bend others to their purposes”—is decisive in understanding what happens in the world. He went on: “If we accept the reality of power . . . we have years of useful professional work ahead of us. And since we will be in touch with real issues, and since issues that are real inspire passion, our life will again be pleasantly contentious, perhaps even usefully dangerous.”

It’s hard to think of a better description of Krugman. His discovery of the abuse of power now seems to influence not only his op-ed pieces for the Times but also his more serious economic writing.

One example: Krugman has been writing about inequality since the early 1990s. Back then, he documented the extent of inequality and refuted conservative attempts to deny its seriousness or existence. But it is one thing to describe how unequal American society is and another thing entirely to understand the causes of inequality. In the late 1990s and early 2000s, when Krugman spoke about causes, he usually said something like this (from an interview in 1999): “Looking at the numbers makes it clear that this [inequality] is . . . [caused by] some combination of technological change and more complicated factors.”

In late 2006, Krugman said, “We have only a modest amount of direct evidence that technological change is driving increased income inequality.” Now his explanation incorporates power and politics: “The government can tilt the balance of power between workers and bosses in many ways—and at every juncture this government has favored the bosses.” The minimum wage has withered, tax policy favors the rich, the administration blocked corporate reform, thus allowing CEOs to reward themselves at unprecedented levels, and perhaps most important, “There has been a concerted attack on the institutions that have helped moderate inequality—in particular unions.” This is Krugman at his “pleasantly contentious” and “usefully dangerous” best. Somewhere, John Kenneth Galbraith is smiling.