Hey Krugman, Sometimes its not the "economy stupid" Posted by Max Bergmann

Paul Krugman's column today goes too far in blaming Gordon Brown's problems on the economic crisis.

In his column titled "Gordon the Unlucky" (yes often columnists have no control over the title), Krugman attributes Brown's political difficulties to the souring economy. Krugman's column is definitely worth a read as it demonstrates how British and American economic approaches alligned and how all political parties supported the same approach. Good stuff. But his conclusion that the economic meltdown is why Labour and therefore Brown are in deep trouble is way, way too simplistic. Krugman writes:

If Democrats had been in power when the bad news [economic crisis] arrived, they would have taken the blame, even though things would surely have been as bad or worse under Republican rule. You now understand the essentials of the current political situation in Britain.

Actually, no you don't. The Labour party and Brown were in trouble long before the economic crisis. It is not a case of being "unlucky." Tony Blair did not exactly cruise to victory in the last election. The Labour party has been hurt by the war in Iraq, constant political scandals - the recent expense scandal being particularly damaging - and the simple fact that they have been in power so long that they have become staid and boring.  Labour and Brown have failed to really inspire anyone with their ideas and direction for the country and after a decade in power there just isn't much energy. On top of this, David Cameron has rejuvenated the conservatives. Cameron has energized the party, put forward some innovative positions, and has sought to bring the conservatives into the 21st century (except when it comes to the EU - his approach is more about taking the UK back to the 1970s). All of these factors, have helped make a Labour defeat look inevitable.

Now, the economic downturn has definitely hurt Brown and undermined his record as the steward of the British economy when he served as Chancellor of Exchequer (Treasury). But Brown got high marks at home and abroad for his inital response to the crisis and - ironically - has used the economic crisis as the very reason for continuing on as Prime Minister. Its a factor. But it is by no means the only one contributing to Brown's troubles. Yet Krugman implies that it really would make no difference who was in power:

Still, if an election were held today, Mr. Brown and his party would lose badly. They were in power when the bad stuff happened, and the buck — or in this case, I guess, the quid — stops at No. 10 Downing Street. It’s a sobering prospect. If I were a member of the Obama administration’s economic team — a team whose top members were as enthusiastic about the wonders of modern finance as their British counterparts — I’d be looking across the Atlantic and muttering, “There but for the disgrace of Bush v. Gore go I.”

Krugman is spot on in his economic point that the Obama administration should be more wary of the "wonders of modern finance." But the state of the economy is not the sole determining factor for political success or failure. It contributes, but there is every reason to believe that if the econmic crisis never happened Brown would still be in trouble even if everything were rosy economically. Just as the economic crisis ended up hurting McCain and helping Obama, it wouldn't be right to say that Obama won simply because of the economic meltdown. A lot more went into it. Additionally, Krugman points to Bush vs. Gore - but that election demonstrated that even with a roaring economy the party in power could be put into jeopardy.

This may sound like quibbiling, but Krugman's implication that nothing else matters then the state of the economy strikes me as a crude form of economic determinism - which I guess can sometimes be expected when an economist does politics. Krugman is dead on about the economic lessons, but the political lesson that the Obama administration should internalize from Brown's troubles is that political movements - such as New Labour - after a period of time lose energy and inspiration and therefore must evolve and develop and bring in new blood.

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