CEOs Know Nothing of the Economy

Paul StebbinsPaul Krugman is unhappy. Lydia DePillis at Wonk Blog wrote another one of those horrible interviews with people no one cares about, “Shame on us”: How Businesses Brought the Debt Limit Mess Onto Themselves. It is with Paul Stebbins, who we are supposed to care about because he is the CEO of 74th company on the Fortune 100. But he’s really being interviewed because he’s a representative of Fix the Debt, the Pete Peterson funded group determined to cut the deficit by taking money away from the old and poor.

Krugman is upset because Stebbins shows a typical lack of understanding about economics and politics. He notes that Stebbins thinks that the economic problems we have come from our government debt. “You get the sense that he’s completely unaware of the actual debates that have taken place about economic policy, probably unaware of how much the actual deficit and forecasts of future debt have changed. So he’s angry at Washington for not facing up to a fake problem.” That’s absolutely true. What’s more, the deficit scolds that Peterson funds have not celebrated the fact that the federal deficit has cratered. Part of the problem is as Krugman claims: they don’t even know that it has happened. But the other part is that they don’t care about the deficit; they just want to use it as an excuse to cut entitlement programs.

Stebbins is also wrong on the politics. As Krugman characterizes him, “The AARP, fighting against cuts to benefits, is just like Republicans threatening to plunge us into debt crisis if Obama doesn’t kill health reform.” But the actual quote from Stebbins is helpful:

Because their reality is, the Club for Growth is telling every single Republican member of Congress “we’re going to raise $5 million to beat you in a primary if you even mention the word revenue.” And AARP is telling every Democratic member of Congress, “If you even mention the word entitlement reforms,” which is all that throw grandma into the snow stuff, “we’re going to raise $5 million and beat you in a primary.”

Put aside the “throw grandma into the snow” comment, which says about all you need to know about how Stebbins thinks of the needs of the poor and old. And also ignore the fact that the AARP is really not in the primarying business—Congressional Democrats don’t get liberal primary challenges very often. What is most important is that Stebbins frames the debate as though he alone is in the reasonable center. He has created a continuity: on one side there are tax increases and on the other is cutting entitlements for the poor. Since Fix the Debt wants to do both, that makes them the heroes because everyone knows the truth is right down the middle. Of course, when it comes right down to it, the deficit scolds are for cutting social security and raising taxes on the middle class. The last thing these people want to do is cause even the slightest amount of pain for the rich.

But there is a more fundamental issue in all of this. Why does the Washington Post think that the CEO of a large business knows any more about the economy on a macro scale than anyone else? And even if he did know something about it, wouldn’t we have to worry that his business interests would cloud an objective judgement? And wouldn’t that be more so the bigger the company was? This is a big part of the problem with media coverage of the economy: it is presented through the lens of big business. Every day on the news, we hear how the stock market did. We almost never hear how workers’ wages are doing. (Now that would be a depressing segment each night!)

I wouldn’t mind if Stebbins were being interviewed about trends in transportation fuels. As the CEO of a company that does that, he might have something useful to say. But he apparently can’t say anything about the economy generally without simply repeated long refuted talking points. But it’s worse than that. He is also someone who testifies before Congress with the same ignorant certainty as when he talks to Washington Post reporters. Is it any wonder that our nation is so screwed up?


I’ve been ending a lot of articles that way. The truth is that the government shutdown and Debt Ceiling crisis are really having an impact on me. And it seems that it doesn’t much matter how badly the Republican Party (With lots of help from the Democrats!) drives the economy into the ground, the people will continue to ignore it. But maybe they are the smart ones, because it doesn’t seem to much matter what we do. But we could at least vote the worst ones out of office.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

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