It was one of the most electrifying moments in modern political television... for those who had ears!
In the red corner, Nobel sanctioned economist Paul Krugman was advocating more money, lots of it, now. In the blue corner, word-merchant historian Niall Ferguson countered for immediately reducing the debt.
In case you missed it... and many did 'miss it' even though they watched it on CNN's GPS, here's the layman's translation.
Imagine your brain sprung a leak to the outside of your skull, you would die if the hole weren't plugged. On the other hand if only one artery developed a bubble inside your skull putting pressure on the surrounding tissue, you would poke a hole in the bubble, relieve the pressure, then strengthen the artery so it wouldn't happen again. That's called an embolism. The rest of the brain would be fine. Embolisms can be fixed.
In economic terms, Ferguson is warning us that rampant debt is a financial leak threatening the entire system.
Krugman, on the other hand, counters that debt is just part of the economy. The real threat is cumulative charges, interest and profit on the debt, an expanding embolism, susceptible to regulatory popping and remedial cauterization.
But Krugman goes farther. Much farther! He calls it the "phantom in the room".
Brrr, feel the chill of fear?
The financial community is loath to talk about this ghost because we ordinary mortals might actually begin to understand. The high priests dare not give it a simple name, like profit, for fear we masses will lose faith.
Like a magician who slips and nearly reveals how a trick is done, Ferguson almost blew it. He euphemized so accurately, so close to the truth, you could almost feel the collective fiduciary scrota shrinking around the globe. Millions of high finance testes running for pubic cover, wincing in anticipation of this catastrophic blow to their semantic groin.
"Fiscal Credibility", Ferguson intoned. "Nasty Fiscal Arithmetic". "Domestic appeasement of local interest (lobby) groups". "Once you find interest rates rising..."
The phantom stirred.
Then Zakaria rescued him. "So what's the solution?"
Caught in his own dangerous rant, Ferguson scrambled for cover. "Radical fiscal reform". "Flat tax". "Cut entitlement programs". Gawd forbid we should reduce our profit. A flurry of semantic transformations to re-bury the deep structures of the daemon he had nearly exposed.
The world's banks must have heaved a huge sigh of relief. Krugman wasn't in the studio at the same time to pounce on the gaff, to expose the lie, to dress the naked emperor.
An embolism of what ... greed? Good grief!
What might Krugman have said?
Except for natural disasters like the recent one in Haiti, countries rarely fail to repay their real debt, the actual amount they initially borrowed. Every other instance of fiscal collapse in the history of the world has stemmed from an inability to keep pace with ballooning compound interest on the debt, not the debt itself.
Krugman had been brutal in anticipation. He whisked so close to naming the beast himself. "Bond Vigilantes" he called them at one point. The viscerally corrupt curia of collusion among the banks and the insurance companies who are siphoning the wealth of humanity into gated backwaters of privilege and impunity.
Of course, there are legitimate costs incurred by those who lend and those who insure us against unforeseen misfortune. They are also entitled to make an income. However, those costs should be calculated transparently based on the true actuarial risk of default or accident. Far from such a fair return, the current banking and insurance industries, no matter how low interest rates appear to be right now, continue make obscene profits from the cumulative effect of compound interest. Interest upon interest, upon interest... ad infinitum.
That is the phantom in the room!
It is the omnipresent and never-to-be named threat, not from the borrowers, not from the actuarial risk of capital default, but from the arbitrary whim of exponential greed that cranks the interest rate up to whatever the market will bear in good times, or simply threatens to do so in bad times.
Krugman's "Phantom in the Room".
Decades of political advocacy and activism haven't a fraction of the power and influence of thirty seconds of reversing an embedded pre-supposition.
Fareed, I dare you. Just one minute a week. Have an impartial and professional semanticist analyze a single utterance from the week's news coverage. Maybe just before your closing soliloquy and book recommendation. You might go down in history as having single handedly rescued democratic dialogue, and governance..
It's time someone stuck a linguistic finger down our throat and induced a little purge to clear the bullcrap...