Tough Love: Paul Krugman & Obama’s Economic Policy

by Terry Lamb

April 8, 2009

Large chart images: Paul Krugman, Barack Obama, Christina Romer, Larry Summers, Paul Volcker

The cover story in last week’s Newsweek was “Obama’s Nobel Headache”. In it, Evan Thomas lays out the facts to a mystery I’ve been pondering since Obama started putting together his economic team: Where’s Paul Krugman?

Right before Obama named his team, Paul Krugman became an even more glittering star in the living economic pantheon by being given the Nobel Memorial Prize in Economics “for his analysis of trade patterns and location of economic activity”. He is also a professor in Economics at Princeton and the London School of Economics, and a member of the Group of Thirty international economic body as well as the Council on Foreign Relations. He writes regular op-ed pieces for the New York Times in his column revealingly called “Conscience of a Liberal” (title perhaps inspired by a book by the late Paul Wellstone). He has shown special fascination for and understanding of macroeconomics, especially international trade and finance and “economic geography”. His economic ideology is of the “European social democrat” ilk. He decries the growing gap between rich and poor and feels greed needs to be held in check — hence is pro-regulation.

He is also outspoken and prefers being an outsider, according to Thomas. His op-ed pieces have carried more than a few draconian pronouncements, like the one on March 23, 2009 (when Treasury Secretary Tim Geithner spelled out the details of his bank-rescue plan). He called the plan “cash for trash” and said it “filled him with a sense of despair”. His preferred plan: The government must quickly act to nationalize the big, “zombie” banks (to stop the bleeding through bonuses and other self-interested actions) and guarantee the liabilities of all the nation’s banks. The lack of funding of the current plan will lead to a downturn like Japan’s “lost decade”, which started in the 1990s.

What Is It with Paul Krugman, and Why Is He Saying These Terrible Things about Us?
Well, now I know that Krugman disagrees with Obama’s guys (but is probably more aligned with Christina Romer), but why is he on the outside? What does he think is going on? What makes him tick?

To go a little deeper into the mystery, the wise astrologer uses the tools of her trade. We have an untimed birth chart for Mr. Krugman, shown above. Even without the birth time, which gives us the location of the planets around the wheel and the degree of the Moon, we can see a great deal about a person. The resulting solar chart shows that Krugman was born a Pisces with a Virgo Full Moon.

The Pisces is evident in descriptions of him. Evan Thomas describes Krugman as shy, sweet, not a prima donna, wears his fame lightly, gentle, a little absent-minded, and adaptive. These are all Pisces traits, when Pisces is not masked by a stronger energy. A mentor, Robert Solow, describes him as “very unassertive, mild mannered” as a grad student. His demeanor in public appearances is humble and unassuming. When he won his Nobel Prize, he was not out there blowing his horn. It was another day in the life, despite it being the accomplishment of a major goal for him.

The Virgo Moon comes out as “nervous[ness]” and nerdiness and contributes to his reputation for gentility, lack of hauteur, and adaptiveness. Being an academic is second nature to this Moon. What may go unnoticed with these placements, however, is the quality of the Full Moon: It has “crisis consciousness” in two forms. First, it can adapt to and deal with crisis when it actually arises. Second and less favorably, it can see crisis in everything that moves.

The Assertive Mr. Krugman
Pisces-Virgo does not describe the whole man. No description of Paul Krugman would be complete without noting his strong Aries streak, a part of him which is well known to colleagues, friends, and probably his wife. It certainly comes out in the more strident tones of his op-ed pieces and his sometimes need to dial back on the rhetoric.

Does it surprise you then that he has Mars in Aries? This powerful rulership placement overpowers nearby Venus in Aries (her detriment), while the two oppose his early-fifties trademark Saturn-Neptune conjunction. This is both complex and deep, speaking to what drives him and his sense of purpose in life. One thing for sure, whatever Saturn-Neptune represents, he is driven to express it, or express against it. He is likely to be “anti” about the things he's interested in. This is even more the case when the universe throws in Uranus in Cancer and Chiron in Capricorn. The resulting cardinal grand cross gives us a revolutionary, or as he describes himself, “anti-establishment”, made quiet by Pisces-Virgo.

Saturn-Neptune & the 50s Crowd
For those born in 1952-53, Saturn and Neptune were conjunct each other, and all those born in this age group share a common awareness and related purposes. At its core, on a social level Saturn-Neptune is about how wed we are to consensus reality, that dream that we all dream together. This dream plays a huge role in an economy. We learn that money has value, so it has value. If we were to lose our faith in money, that a particular currency (or even money in general) faithfully represents our goods or efforts, the currency stops working. If we lose our trust that a system will reward us fairly for our goods or efforts, or that it will protect us against harm to their value, the whole system falls apart. Krugman carries this seed forward with his attunement to the economy and humanity's macro trends and systems.

Dream a Little Dream of Our New Economic Future
One good thing about Krugman is that, with so many planets in cardinal signs, he can pioneer new concepts. He can create the future. He is uniquely equipped for this when we add the visionary qualities of Pisces and the pragmatism of Virgo.

You see, it takes courage, knowledge, wisdom, and vision to see the future, not the least because what we see is what we create. Although Paul Krugman may be glum about how Obama’s administration is handling the economic crisis, I keep asking myself, “And this is bad because . . .”. Krugman does suggest that substantive changes will take place in the world economy, changes that he still couches in terms of the old reality. However, he does have a vision of a better future, where the distance between rich and poor is flattened, greed is curbed through regulation, and where it is possible to do good and still succeed.

In a fascinating report on Monday, “Economic Downturn Signals a New Normal”, Robert Siegel ponders the question of what will become the new normal once the new economic reality becomes established, whatever that is. He asks, “How will the recession change our country in the long term?” “They change us in ways we can hardly imagine,” says historian David Kennedy. Some of the suggestions: less credit, more saving; less home-buying, more renting; less spent on possessions, more on experiences; changes in what is considered a luxury experience or item; a smaller role for the U.S. Krugman would surely sign up for some of these possibilities if he weren’t so busy still trying to give voice to a better path to them.

Why Doesn’t Obama Listen to Krugman?
President Obama, for all his strengths, is human. He has been known to defer to his advisors, especially in areas of great complexity or where he is less well-informed, such as the economy (the former) or military policy (the latter). Obama’s advisors may be telling him that Krugman’s position is too extreme; Krugman feels that Geithner is too close to the crisis, including the people who created it, and has adopted too much of the investment banker mindset. He feels that Larry Summers has more resiliency in seeing through their foibles, and he hasn’t yet given up on the administration to move closer to his idea of what will work.

Astrologically, there are many connections between Krugman’s and Obama’s charts, but the key points of annoyance appears to be first, one of personality, and second, one of ideology. The personality differences are many, but you get prickles when you put a Leo (Obama) and a Pisces in the same room. There’s something about the attention-seeking of Leo that really gets under a Pisces’s skin. (Perhaps it’s what Pisces secretly wants but spends so much time studiously avoiding.)

Mystery Solved, Partially
But with Obama’s Saturn directly square to Krugman’s, Obama is at once too pragmatic for Krugman; and with Obama’s Pluto on Krugman’s Moon, Obama is the wrong kind of pragmatic for Krugman. In fact, with Krugman’s Pisces-Virgo approach to life, he could be called the Idealistic Pragmatist. And if he didn’t have such romantic notions of being the nerd who saved civilization (born of reading Asimov’s Foundation series in his youth), he might be willing to compromise more on his viewpoints — but would it help us if we didn’t have the caped economic crusader speaking for the poor masses huddled at the door of the big banks?

Obama may end up listening to Krugman. He and Larry Summers stay in touch and share a mutual respect. However, it will go through the Summers filter. If Summers buys it, it will be transmitted and perhaps used. Summers is an idealistic Sagittarius who has more astrological connections with Obama, especially ones that give him that father-figure feel (Summers’s Saturn on Obama’s absent-father Neptune).

More troubling is the fact that Obama’s economic team is decidedly old school, with the exception of Christina Romer. While this is a cause for concern in my opinion, it doesn’t trouble me as deeply as it would if this were still the case at this time next year.

Saturn-Uranus Provide the Timing.
We are still in the first half of the Saturn-Uranus opposition period. Because they interact over two yearly planetary cycles, there is a two-step process in “getting it right”. This pair is heavily implicated in the economic crisis we are now experiencing (but are not the only culprits). By the fall, it will become apparent that the administration’s approach will need adjustments. Obama and Summers (with the help of past Fed Chair and elder economist Paul Volcker) may find their way to a more Krugman-like direction. What is now considered slightly lunatic fringe may become the new mainstream.

If you think Krugman is a lone voice in the wilderness, think again. There’s William Greider, Robert Kuttner, Dean Baker, Robert Reich, and Nouriel Roubini, to name a few of those who speak with a similar voice. Once we see what type of regulation policy the Obama Administration embraces, we’ll know how contented this bunch will be. Regulation is likely to be the strongest feature of Saturn-Uranus Phase II.

For now, patience, optimism, creativity, and informed activism are our best economic policies. I’m not sure that we can or should save the banks, myself. However, that’s the path we’re on, and if we’re going to do it, we should do it right.

© Terry Lamb