As he and host Keith Olbermann dismissed the legitimacy of John McCain's plan to drill for more oil domestically to reduce gas prices, Krugman complained that Barack Obama is not being aggressive enough in attacking McCain, and recommended that Obama charge that McCain's plan is an "outrage," and that the Arizona Senator is "insulting your intelligence, he's really doing bad stuff." (Transcript follows)
Olbermann plugged the segment during a commercial break, asking why anyone would "trust a Republican" on the issue of gas prices: "With the price of a gallon of gas up $2.50 since George Bush was sworn in, why would anybody trust a Republican to do the right thing on prices at the pump, drilling or the profit that ExxonMobil just declared for the second quarter, $11,680,000,000?"
The Countdown host set up his interview with Krugman by blaming high gas prices on having "two former oil men in charge of the country." Olbermann: "Eight years ago, the average price of a gallon of gas was $1.47 and now it's $3.95. Eight years ago, ExxonMobil's second quarter earnings were $4,015,000,000. Today, that company announced second quarter earnings that are the highest in U.S. corporate history, a record-breaking $11,680,000,000. ... Amazing what happens when two former oilmen are in charge of the country. How in the heck did we not see that coming?"
Krugman began by arguing that President Bush is "not responsible for high oil prices," but that the President had failed in his campaign promise to talk OPEC into increasing oil production: "Now, whether, you know, Bush is responsible for high oil prices, I don't think you can make that case. But we should remember that he promised, he said back in 2000, that he had, he knew what to do. He would be able to talk OPEC into opening the spigots and, you know, they haven't managed to do that, so this is a failed energy policy, for sure." Krugman also argued that the increased drilling would have an "insignificant effect on the price."
After arguing that he has in the past "partially blamed the news media for just not reporting" on some of the "crazy stuff" that President Bush has "come out with," Krugman expressed his disappointment that the public supports more oil drilling in spite of the press being "pretty good in saying [the oil drilling plan] is nonsense."
Olbermann brought up Brazil's use of sugarcane as a source of fuel, and asked if high oil company profits were the reason such alternative energy is not more widely used in America. Krugman informed viewers of what he sees as "the real reason to hate Exxon."
Krugman: "Oh, no, they don't do, I mean, if you want to, you know, the reason to hate Exxon is not that it makes so much money, per se, it's the fact that it has not done anything to address the energy problem, and it's actually spent heavily on, you know, financing climate skeptics, on basically blocking intelligent policy, on muddying the waters of our debate. Now, whether we could have, you know, to be fair, we don't have lots of sugarcane, so we couldn't really have done it as easily as the Brazilians did. But we could, you know, if Jimmy Carter had actually managed to sell us on energy conservation 30 years ago, we would be in a lot better shape than we are right now."
Olbermann brought up the public's support of more domestic oil drilling, and asked Krugman what Obama "should be doing that he is not doing."
The liberal columnist offered his advice that McCain be more aggressive: "I think he's falling into the kind of mistake that I would tend to make, which is saying, 'You know, this is silly, this is ridiculous. Nobody is going to believe that,' and that's not good enough. And I think he's got to, look, when I read Obama's response to the McCain ad about, you know, prices at the pump, Obama's response was, you know, 'This is the same old politics,' which is true, but, you know, he was being dismissive. Obama was being dismissive when he ought to be outraged. He's got to do something. 'This is an outrage. This guy is insulting your intelligence, he's really doing bad stuff, and you shouldn't be taken in by this,' not just sort of, 'Oh, well, you know.' I think this was Obama being a little bit too much of a professor, if I can say that."
Below is a transcript of relevant portions of the Thursday, July 31, Countdown show on MSNBC:
KEITH OLBERMANN, AT 8:16 P.M.: ExxonMobil made $1,486 per second in profits in the second quarter, and John McCain is pushing for more oil drilling and more tax breaks for ExxonMobil. Gas, big oil, Obama, McCain and Paul Krugman. And the Sy Hersh report -- sitting around Dick Cheney's office, daydreaming of dressing up American Navy SEALS as Iranians, shooting at them, claiming Iran was trying to start a war and then attacking Iran.
...OLBERMANN, DURING COMMERCIAL BREAK AT 8:17 P.M.: With the price of a gallon of gas up $2.50 since George Bush was sworn in, why would anybody trust a Republican to do the right thing on prices at the pump, drilling or the profit that ExxonMobil just declared for the second quarter, $11,680,000,000? The economist and columnist, Paul Krugman, next.
...OLBERMANN: Eight years ago, the average price of a gallon of gas was $1.47 and now it's $3.95. Eight years ago, ExxonMobil's second quarter earnings were $4,015,000,000. Today, that company announced second quarter earnings that are the highest in U.S. corporate history, a record-breaking $11,680,000,000. Our fourth story on the Countdown: Amazing what happens when two former oilmen are in charge of the country. How in the heck did we not see that coming? Exxon's earnings as record-breaking as they were, were not as high as Wall Street projected, so the company shares dropped today. The classic case of "What have you done for me lately?" Nevertheless, this year promises to be even more lucrative for the oil industry than last year when companies made over $155 billion. Such record oil profits giving Senator Obama an opportunity to point out that his opponent's policies on oil are not geared towards helping the consumer, that, according to the administration's own Energy Department, increasing offshore drilling will not lower gas prices now, and will not produce any oil for at least 10 years, and even then, would not affect more than a few cents on a gallon of gas. But a gas tax holiday would only save consumers half a tank of gas through the whole summer, and that the only people helped by such policies are the ones already making money hand over fist.
BARACK OBAMA: Senator McCain proposed a corporate tax plan that -- listen to this -- would give $4 billion each year to the oil companies, including $1.2 billion to -- guess who? ExxonMobil. Last month, Senator McCain raised more than $1 million from, guess who? Oil and gas executives and employees most of whom, most of these campaign contributions came after he went to Houston to meet with a bunch of oil executives and announced that he was in favor of offshore drilling.
OLBERMANN: We're joined now by New York Times op-ed columnist and professor of economic and international affairs at Princeton University, Paul Krugman. Thanks for your time tonight, sir.
PAUL KRUGMAN, NEW YORK TIMES: Good evening.
KRUGMAN: Well, the gas prices and the oil profits are going together. I mean, basically, you've got an oil company that owns some oil and the price goes up the way it has, they`re going to make a lot of money. Now, whether, you know, Bush is responsible for high oil prices, I don't think you can make that case. But we should remember that he promised, he said back in 2000, that he had, he knew what to do. He would be able to talk to OPEC into opening the spigots and, you know, they haven't managed to do that, so this is a failed energy policy, for sure.
OLBERMANN: And speaking of failed energy policies, offshore drilling as a solution, even the Bush administration's own figures, experts, departments, showing how meaningless this is, why is McCain still pushing it? And why does it seem to be resonating with a lot of people?
KRUGMAN: Well, he's still pushing it because it's resonating. And I have to say, this is a little bit, you know, this is as clear cut, this is as cut and dry you can get. The Energy Information Administration last year in its energy report specifically addressed this and they said basically, no new oil, zero, zip until 2017 and insignificant effect on the price ever. So, you know, this is not, this you got from the horse's mouth, if you like. But, you know, the people, it sounds good. We're going to drill, we're going to, you know, get some more stuff and American oil and I have to say, this is kind of disillusioning because, in the past, I've, you know, when Bush has come out with crazy stuff, I've partially blamed the news media for just not reporting on this. In this case, actually, the press has been pretty good in saying this is nonsense, but it's still working. And half the American people, according to the latest polls, think that allowing this offshore drilling will, you know, cut oil prices next year when, in fact, it's going to take 10 years for it to do anything at all.
OLBERMANN: When you see a country like Brazil, which 30 years ago said enough to this and launched these serious, intense, alternative energy programs, and now, some huge percentage of their cars run on, essentially, modified sugarcane. Is the reason we don't do that here and have not committed to that here, the fact that Exxon just declared an $11 billion second quarter profit and Wall Street was still disappointed? I mean, what is the incentive for these companies to spend to develop alternatives?
KRUGMAN: Oh, no, they don't do, I mean, if you want to, you know, the reason to hate Exxon is not that it makes so much money, per se, it's the fact that it has not done anything to address the energy problem, and it's actually spent heavily on, you know, financing climate skeptics, on basically blocking intelligent policy, on muddying the waters of our debate. Now, whether we could have, you know, to be fair, we don't have lots of sugarcane, so we couldn't really have done it as easily as the Brazilians did. But we could, you know, if Jimmy Carter had actually managed to sell us on energy conservation 30 years ago, we would be in a lot better shape than we are right now.
OLBERMANN: Back to the price of gas and the profits and this presidential campaign. If you look at those swing state polls, particularly in the 50/50 figure that you mentioned about people believing that more drilling will affect, it will lower prices next year, and McCain has clearly gotten a bounce from that belief, it would seem Obama is not winning one of the battles that might be easiest for him to win. Why not? And what should he be doing that he is not doing?
KRUGMAN: Well, you know, I think he's falling into the kind of mistake that I would tend to make, which is saying, "You know, this is silly, this is ridiculous. Nobody is going to believe that," and that's not good enough. And I think he's got to, look, when I read Obama's response to the McCain ad about, you know, prices at the pump, Obama's response was, you know, "This is the same old politics," which is true, but, you know, he was being dismissive. Obama was being dismissive when he ought to be outraged. He's got to do something. "This is an outrage. This guy is insulting your intelligence, he's really doing bad stuff, and you shouldn't be taken in by this," not just sort of, "Oh, well, you know." I think this was Obama being a little bit too much of a professor, if I can say that.
OLBERMANN: Yeah, specify it, walk people through it. Paul Krugman of the New York Times, always an education, thank you, sir.
KRUGMAN: Thank you.
