CEOs All At Sea
October 03, 2013, 11:00am

By Paul Krugman

Lydia DePillis continues her informative series of blog posts on the political haplessness of big business, which with all its money and connections finds itself not only unable to stop the slide into chaos but unable even to exert any appreciable influence. But I still don’t think the businesspeople understand their problem.

DePillis gets at some of this in her post, but still, I think, doesn’t get to the root of the problem.

I tried to explain all of this last year, writing about the confusion of Howard Schultz of Starbucks, a genuinely good guy trying to make the political situation better — and helping not at all. Schultz, and I think many other business types was (and presumably still is) suffering from a triple misconception about our situation.

First, CEOs still talk as if debt and deficits were the central issue of economic policy. They never deserved that place; they certainly don’t deserve it now that the deficit has clearly been falling too fast and the debt outlook is stable for the next decade. Yet they can’t let go of the notion that a grand bargain on the budget — as opposed to an end to destructive austerity — is what we need.

Second, many CEOs are, I believe, genuinely naive about the people they deal with. They believe, for example, that Paul Ryan actually cares about deficits. They haven’t grasped, or refuse to grasp, the reality that the whole thing about deficits was really about using economic crisis as an excuse to tear down the social safety net.

Finally, they’re still trying to position themselves as the middle ground between extremists on both sides, when the reality is that we have a basically moderate Democratic party confronting a radical Republican party that doesn’t play by any of the normal rules. If you insist on thinking of Ted Cruz and Elizabeth Warren as somehow symmetrical figures, you’re already so out of touch with political reality that there’s no way you’re going to have useful influence.

I do sometimes wonder how these guys can be that naive, and some of them probably aren’t — they’re playing class warfare on the sly. But some of them really do seem clueless, probably because thinking about the reality of American politics today would make them uncomfortable — and who’s going to tell the guy in the big office things that make him uncomfortable?

It’s not just Fox News watchers who live in a bubble; sometimes, wealth and power can have the same effect.