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Obama has Krugman and Stiglitz For Dinner


[last lines]
Hannibal Lecter: [on telephone] I do wish we could chat longer, but... I'm having an old friend for dinner. Bye.
Clarice Starling: Dr. Lecter?... Dr. Lecter?... Dr. Lecter?... Dr. Lecter?...

Over a roast-beef dinner, served with some fava beans and a nice chianti (I made that last part up), President Barack Obama had at the White House for dinner some of his sharpest critics on the economy, including New York Times columnist Paul Krugman and Columbia University economist Joseph Stiglitz:
Obama listened and questioned while Krugman and Stiglitz, both Nobel Prize winners, pushed for more aggressive government intervention in the banking system.
The report is by Evan Thomas in Newsweek; Prisoners of the White House:
Smart decisions don't grow in a vacuum. The most successful presidents recognize the fact and encourage debate--and even rivalry--between their advisers. They do their best to consider the options fully. All the same, it's harder than many people might imagine for our national leaders to keep the field of opinions from turning into a monoculture.
It's the curse of the modern presidency. Our chief executives need to make an active, aggressive effort to reach beyond their immediate circle of advisers, to demand fresh thinking and avoid the sycophancy that comes with the Oval Office. Otherwise, they'll only hear what they want to hear--or what their aides tell them.
It is obvious that President Obama has been, and is reaching out, to friends and foes, alike something his predecessor G W Bush had no interest in, or concept thereof. 

It would be easy to invoke the "keep your friends close, keep your enemies closer," bromide but I think what the President is doing is much more than that. 

Obama has a probative mind capable of perception, learning, and reasoning.  His confidence is strong and he is not a prisoner of his own ego allowing him accept, and implement good ideas no matter what, and where the source.  It is those qualities that put him on track to be one of our greatest presidents. 

Of course, only time will grade President Obama's administration, but right now he's off to a hell of a good start.

"The universe is wider than our views of it." - Henry David Thoreau, Walden, conclusion.


52 Comments

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He had them for dinner? Much better than being out to lunch. Yes, Obama has a penchant for inviting the naysayers to his lair, but what makes Evan Thomas think he's going to listen? It could be that he wants THEM to listen. Or that nobody listens.

I don't know who is right about the ways to get out of this mess, and I'm glad their talking, but I want to see some action. I want to see JOBS. You can only save a company for so long by getting rid of the workers and shutting down factories. You can only keep the money flowing for so long by giving it without strings to bankers who don't want to lend it.

You can't have a strong economy without a strong job market. I want to see Obama talking to the people who can actually create jobs. They need to talk about how to create them, how to sustain them and how to pay workers a living wage.

I see a glimmer of hope in the announcement that he is going to crack down on the off-shore crooks who don't see the need to pay their share of U.S taxes, but already they're threatening the loss of more American jobs if anybody messes with them. They don't want to pay taxes to the U.S or hire American workers? Fine. Now they're foreign.

Krugman and Stiglitz want to build the deficit even more. If it means using that considerable stash for useful things like creating and maintaining jobs, I say go for it. But if it's just more money going to the Fat Cats, then get out the chianti and let Hannibal have them. They're useless to us.

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I think Obama sees what you see, Ramona. I see he really is all OUR president. Have faith. Have hope. Have patience. A better day is coming.

Thanks for commenting.

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Ramona, you are dead on. Don't let up on this theme. It's about jobs and workers, not finance.
Obama is unfamiliar with the pre Milton Friedman economic views and should listen carefully to Jamie Galbraith who never even flirted with Friedman ReaganRubinomics. I am happy that Krugman and Stiglitz and Simon Johnson are rethinking the whole Free Market Flim Flam and realize that it hurt the REAL economy. They are welcome.

Who was FDR's most trusted cabinet member? Frances Perkins, Labor Secretary. Until Labor takes its place at the head of the line, we only have glimmers of hope. We are fed gruel and pretend that it is steak.

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I think Thomas made it pretty clear he didn't think the dinner in question would have much impact and that the dinner notwithstanding Obama's economic advice is very limited.

Additionally, it is more than rare for an official (especially the President) to believe he really needs more advice than that provided by the people he trusts. When an invitation of this kind goes out, regardless of it being billed as a way for the big guy to hear more opinions, it is more typically used as a lobbying opportunity where the official charms and schmoozes the attendees. My guess is that is exactly what's happened here with Stiglitz and Krugman though I wish to God he would listen to them since they're right and Geithner and Summers are pursuing ruinous policies that will harm us and our children for many years to come. But at least we'll be able to rest easy knowing all of their Wall Street buddies and their children will be obscenely wealthy until the end of time as a result of the handouts they're being given.

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Krugman was briefly interviewed today by WNYC's Brian Lehrer in front of a small audience. He spoke with mild approval of team Obama's economic performance. (at least , that's my subjective reaction-others might disagree).

The entire interview is in the WNYC archives.

A possible reaction is that Obama was just succesful in manipulating them. Until given reason to the contrary (which happens a lot) I take people and events at face value. So I assume Obama was seeing K&S in order to learn from them-and they are perceptive enough so they would have known if they were just being used. And O is smart enough to know that they would know etc etc etc.

I expect some plain speaking took place.

Krugman was asked today whether he was unhappy not to have been invited to join the Administration and said that one look at his messy office would convince anyone that he didn't belong in an administrative position.

(Reminded me of James Carville in 92, when he was asked whether he would join the Clinton administration replied "I wouldn't want to be the citizen of a country that had me in the cabinet".)

He certainly didn't sound as if he felt he had either been dissed.

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i get the sense that obama is really interested in good ideas and is not blinded by ideology in considering ideas that actually make sense.

that's what the republicans don't get. stiglitz and krugman are arguing from reality, thus, their views and advice carries weight. more tax cuts from the flat earthers is a non-starter, thus they've sidelined themselves from the debate.

if nothing else, i'm pleased that obama is open to considering advice from experts on the merits and is willing to engage his critics.

we are still very early in his administration and have yet to see how he will react to stalled or failing initiatives.

this is an encouraging sign and demonstrates confidence and a willingness to research and consider all available options.

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I agree totally. They are Nobel economists. Obama is a master politician and a born leader.

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Yeah, I was thinkin, I mean did he have them with potatoes and some ketchup?

Krugman wants more money spent just like Ramona here says. But our New President cannot just pull it out of some orifice. And he has a ten year plan that can be added to. And he is interested in Krugman has to say. I believe he is interested anyway.

The market is up. Unemployment rates stink. What will it look like 6 months from now?

It is roadwork season again and I believe that seeing the workers on the roads with the signs will piss off a lot of drivers, but subconsciously--in some Jungian sense-these drivers will realize that people are working and they are working because of THIS PRESIDENT and his initiatives.

How will this play out? What is the placebo affect all by its lonely? Moderate Dems must not be eschewed. Now people are beginning to yell about Senator Lincoln. We need someone named Lincoln in the Senate in our party, ha. And Nebraska. Geeez we need a dem in Nebraska.

And Senator Lincoln was a stalwart for this party when we had a one vote lead in the Senate. She is just one example.

Krugman does not have to work the politics. And yet he is part of the political framework, rootin on the sidelines for liberal causes.

And Krugman aint goin to dump all over the administration anyway.

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He's plying them like a cheap fiddle. They're very smart but sometimes smart people's egos get bigger then their brains.

Re Blanch Lincoln she's an opportunist of the worst kind. To quoth, sir dayz, "haaaaaa"

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I'm curious if Krugman's and Stiglitz's impressions of the meeting are? Did they feel Obama was receptive to what they had to say or defensive? Was he peppering them with questions or rationalizing the current plan? i did a brief search, but couldn 't locate anything (assuming either are even willing to discuss it).

Does anyone know if he has also met with Roubini? His would be another good voice to hear from if indeed Obama wants a full hearing of alternative views.

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Good question. Please post if you find something. I, too.

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Obama to dinner guests: I won.

At least that part happened in my dream sequence:

After a pleasant dinner where the guests were treated graciously, where they complained about Tim Geithner and Larry Summers-- no wait, Tim and Larry were there so they had temper their words a little, and Joe Biden, wearing his swine flu mask (luv that Joe!) and Rahm and Axelrod -- they retired to the President's study or perhaps the Oval office, with after dinner drinks, and cigars offered outside at the picnic table, and after the President has quizzed and peppered them all manner of questions, he simply says, "I won. You guys have your lovely Nobel prizes and your million dollar cash awards. You got tenure. You got op-ed columns. You got a decent sized megaphone. I, on the other hand, put my ass out there and ran for President. I put forth ideas, I organized and led a movement. I took back the White House. I am now responsible for the lives and well being of some 350 million Americans here and abroad. I am the most powerful person in the world. I selected the people around me that I believe are best qualified to do the jobs I have assigned them. And that includes Tim and Larry and Joe B. and Hillary and everyone else on my staff and in the executive branch. I do not appreciate you second-guessing them every step of the way. I don't appreciate you second-guessing me every step of the way. If you have something constructive to say, as you saw tonight, I'm willing to listen. You've been invited to the White House tonight, and you will be again, if constructive discussion is on your agenda. We will not agree on how to move forward with the economy. For me, this is not some academic exercise. I have a job to do here. If you're willing to help, I'm sure Tim or Larry or Joe B. can put you to good use. But they are the point men on the economy and they have my full support. I won. My name is Barack Obama and I am the President of the United States."

At that point an aide comes in and says very seriously, ominously, "Mr. President, you're needed in the SitRoom. It's C-STAD*." Obama nods to Rahm and Joe B., who removes his flu mask to reveal a Halloween costume pig nose, and the three head out of the Oval office through a cluster of staffers moving briskly about the West Wing.

Ah, to sleep, perchance to dream... Of course, there is no "situation" they just wanted the dramatic exit.

*C-STAD, the fictional Comprehensive Surface to Air Defense system in the movie "The American President."

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"I won" is a pretty weak argument. George W Bush won (by hook & crook, granted), but it didn't make his economic arguments and policies any better. Or, if you will, replace the word "economy" with "Iraq" and have Bush invite his critics to dinner.

As for the "not appreciating the second-guessing," ummm.... Jeez. Last I remembered, one of the big lessons of the last 8 years was NOT to sit back and shut-up when Presidents say stuff you disagree with. In a democracy, the President can think what they think, and the only proper response when they say they don't appreciate the second-guessing is... "Big whoop."

Or do we have to shut-up and not second guess on single payer health care, and Afghanistan and the prosecution of torturers etc.? Do we all have to support the White Sox now? Damn. (Go Cards, he whispered.)

I mean, I'm glad everyone thinks Obama is brilliant, so do I, and it's nice he had some people over to dinner, better late than never, but... ummm... I think we should be working through and speaking out about what WE think needs to be done, rather than what we think he wants.

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Dear Quinn... it is but a dream... not for real... not what Obama did say... but what I might have scripted for him to say... weak or not is immaterial... it a movie, the play's the thing, all the world is a stage and we are the extras... I am not Aaron Sorkin or Larry O'Donnell, and I didn't stay at a Holiday Inn Express last night... I'm just a girl in the bright lights and big city with a dream and song in my heart, with Gene Kelly and the "kids" ready to put on a barn-burner of a show, filled with fun and frolic, love and laughter, and a few washed-up vaudevillians with desire to do the act one more time, just like the good ole days... Why have realism when fantasy is so much more delicious?

Oh, and Hillary testifying before Congress: "President Obama won the election. He beat me in a primary."

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I love your dream, Jade. I want to have it tonight!

BTW, when Obama says "I won" even in your dreams, it's a far cry from GWB saying "I won". What Obama really means is "WE won". GWB of course means "I won, you lost".

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I have to stop going to bed so early. Oh, Jade what vision, what truth. You weren't dreaming, you were calling it as it is.

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.

A génie told me . . .

. . . that BO loves bananas, whipped cream and nuts...

With those tastes, ya' can't go wrong.

~OGD~

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Fascinating. I almost fell off my chair this morning when I read this line in Krugman's NY Times column today:

"Credit where credit is due: President Obama and his economic advisers seem to have steered the economy away from the abyss."

Not that Krugman would be so crass as to toss in a rare compliment in return for dinner, but I'm sure it didn't hurt!

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but watch out for the qualifier... "seem to..."

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When I read that column and started thinking about stagflation and long term low grade recessions I immediately got the shakes thinking how the republicans would use it to return to power. I may be forced to pray for Obama.

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Don Key you are right on the money with this cite/link. Answer a lot of questions in one swoop!!!

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Glad read the news about the dinner, 'cause that's really interesting, but overall, that Newsweek article has to be one of the most banal pieces of Villager CW pap I've read since, well, okay, yesterday.

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So is Evan Thomas... My mom would be proud, I got to edit him.

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Obama invited me for dinner.

But I had to decline. He looked a little hungry.

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Aren't you glad he didn't invite you for "Bwakfast"?

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(thunk)

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Its nice that he is meeting with dissenting economists but I am not sure what good it will do. I guess my biggest worry is that nobody, economist or not, seem to have a solution to this.

The truth is we are in the very beginning of a fundamental restructuring. We have millions of jobs that will never come back. In the Auto industry, Finance, Journalism, construction, real estate, printing, and soon Healthcare. The causes are multiple (from the demographic decline of middle class to the breakdown of our financial risk management systems, to the radical changes caused by our new information technology), and the ramifications are still little understood.

Its all well and good to want aggressive action on banks and quickly punish the risk takers- but towards what aim?

I share the Krugman/Stiglitz financial crisis view, but then what? Do we really think that if we write off a few trillion in toxic debt that these industries will magically return to viability? There is no easy or politically viable solution to what comes next. I can only hope that Obama and Larry summers recognize that and hence are okay with not rushing dramatic action without the first enacting the necessary accompanying legal changes. Obama needs political creditability to push through fundamental changes so a go slow approach might be the wisest one.

Or maybe I'm drinking the cool aid.

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Agreed fully, Saladin. Add to that that households are gonna be yanking 5%-10%-15% into paying down debt and boosting savings.... And then, if unemployment stays up, it'll be very hard for Federal deficits to come down to where they're supposed to be, hard for corporate sales/profits to rise to where they're supposed to be, etc. I have no idea where people think the money is gonna come from the fill the gap that home equity loans and the real estate boom are gonna leave (to say nothing of the wider debt picture.) Because neither Krugman nor Stiglitz, Summers nor Geithner have a clue....

But right now, as predicted, we're getting the Spring "Obama Bounce," and everyone seems keen to forget all about that nasty economy thing. Hey, the Dow's up to 8,000! It's nutso.

Ah well. It's been a long Winter. Huzzah! Maybe Obama'll have a big party on his lawn! ;-)

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Interesting take Sal. I'm no good at this big-picture stuff, but I want a shot of whatever you're drinking. I'm not sure I get this: 'He should go slow so he can make fundamental changes'. Seriously, I don't get this argument. He's not doing a great job on the financial mess - these stress-tests look badly handled, the mortage modification bill just died without a peep from the White House, etc. Going slow in this sector just means propping up and sustaining the power of the big banks. It doesn't improve the prospects of fundamental changes to, eg., bank regulation. It makes it that much harder. The one argument Krugman et al concede to the administration on these issues is that there is no political backing for more radical action, so they're maybe doing the best they can with the weak hand they've been dealt. We'll see how things turn out, but I don't see a super subtle political 'strategy' here. Now pass me that punch-bowl...

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Obey, I mean legislating new rules of the game. New financial rules, major Health care reform, Major energy reform.

He is popular but you don't reform 25% of your economy without significant backlash. And Krugman et all is right that he does not yet have a mandate for radical change. Building confidence and taking one major legislative battle at the time seems a prudent approach, particularly when you are daily caricatured like this, and you are going to be pushing large social programs.

Limping along might not be so bad politically, it is hard for me not to see how populism will not rise as the shock wears out and reality sets in. If the bankers keep screaming about going Galt while nursing at the public teat patience is going to wear thin. I am not saying that this is the plan, but I am drinking the Koolaid. Progressives have been out of power for 25 years so I am willing to hope they might have a little patience and enact major change over a few years as the economy adjusts.

But hey my friend. Its the spring time, I recommend a sip under a cherry blossum

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alright - pass me the damn sake, then!! (clink!)
;0)

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Kanpie! :}

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Roast Beef and Fava Beans? I don't know about that. I only have eaten Fava beans once and I don't remember the taste that would go well with Roast Beef. Maybe I'll have to revisit the beans.
But, they would have gone well with ... chicken!!hahahahaha

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aw, go soak your er, fava beans.

=D

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I also wanted to add that I am a little creeped out by your choice of analogies.

Obama as serial killer Lector? Krugman/Stiglitz as former FBI agents? Who would that make Clarice? Newt? Nader. Professor Griff?

Lost me..

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Did Goldman-Sachs pick up the tab?

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Having trouble getting this link to take. Here is another link I could have used, but of course, there are eight million stories in the city describing the ties between DC and Wall St. Stigletz has told some of the best ones, but I doubt they're appropriate dinner conversation with the President (and Summers, Geithner, et al.). See today's blue plate special: Stephen Friedman.

PS If this reaching actually resulted in a change in direction on the bailout (of the economy not banks), I'd be the first to cheer.

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Thanks for these Goldman links, Don. For some reason it seems a lot easier to boo people like Krugman & Stiglitz, and imagine Obama slapping these ne'erdowells down at dinner... than it is to think about WTF is going on with Goldman and the bankers, why they're all walking, why we're accepting flagrant financial corruption, and why our cape-wearing superhero isn't... saying... or doing... a goddamn... thing... to stop it.

This just strikes me as intellectual dishonesty, frankly. It's embarrassing at this point. But hey, as long as he isn't as appalling as Cheney, I guess that's our standard. So let's give him a cheer for (in our imaginations) slapping down two of the (few) sensibly critical voices out there. (And this after complaining that the Republican critiques are nonsensical, and babbling about how important a sensible opposition is.)

What we SHOULD be doing is working like crazy to stop the abuses and corruption, and talking up some more sensible programs and policies. Like bankruptcy reform. It fell like a second-rate cake, and nada.... crickets. The thing is, FDR had 4 years of constructive criticism and constructive alternative-building IN HAND when he walked through the door in '33. While our guy gets to walk through in the same situation as Hoover was facing. Yet somehow people seem to imagine that we're doing Obama a favor by cheering this shit on.

It boggles my mind. But heck, the Dow's rising, so all must be well. The critics? Give 'em some cake. It'll all work out.

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After the recently killed foreclosure assistance bill, an esxasperated Durbin blurted out that the banks “own” congress. No one disagreed.

I know I have a simple, perhaps simplistic, take on these things. It seems so long, long ago, but I recall when Paulson was talking about “the” bailout (remember the original one-off bailout?) that had to be done to save the world. He had meted out the first half of the $700 billion (Wow, $700 billion!) and kept talking about the other “350” as if it was just chump change.

Of course, it was. Just months later, we now talk about a $trillion here, three $trillion there and no one bats an eye. No one seems to even ask where or how or to whom it is going to benefit. The program is both impossibly complicated and secretive.

Put a bunch of bankers in a roomful of money and throw a tarp over ‘em. Whatever they can grab.

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Shoot, Quinn I asked you to pipe down. Now its
too late,

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Hey pipe down over there,

You and Quinn are killing my buzz.

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Sorry, Saladin. Would you like a piece of cake?

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Will it soak up the hangover? It's gonna be a bad one.

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It'll actually cure a hangover, but you have to take two days to eat it.

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Oh yeah, i think I have had that before.

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Did Goldman-Sachs pick up the tab?

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Shorter: NFW.

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Sorry.

Short Answer: NFW.

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NO FRICKIN WAY. HA

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From Andrew Leonard's "How the World Works" blog over at Salon.com:

Oh, but would I have loved to have been a mouse in that dining room.

KRUGMAN: If you do not nationalize Citigroup and Bank of America, you will have proven to the American people that the White House is owned, lock-stock-and-barrel, by Wall Street!

STIGLITZ: The Geithner plan to fix the banking system is outright robbery of the American people, Mr. President!

OBAMA: How do you like your roast beef? Raw and bloody, I presume? Please, have some more.

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Hey, Ronald Reagan once had David Lynch over for dinner. A decade later, Lynch shot his own ode to Morning in America titled 'The Straight Story.'

Coincidence? I think not!

No, I'm kidding. We're screwed: Obama probably farted on Stiglitz's plate and screamed "COMMIE!" at Krugman.

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