June 21, 2005,
It seems there is no limit to Paul Krugman’s hatred of the Republican party. And apparently there’s no limit to the New York Times’s willingness to embarrass itself by printing yet another hilarious error-filled column by America’s most dangerous liberal pundit.
In his Friday column, Krugman attempts to spit out the salacious details of scandals involving Republican politicians in Ohio. But what Krugman doesn’t seem to know is that many of the politicians he’s talking about are Democrats! And because the Times does no fact-checking of its op-ed columns, his absurd blunders now live forever in the “newspaper of record.”
Krugman’s column concerns apparent improprieties in the management of investment funds by the Ohio Bureau of Workers’ Compensation. Ohio’s state government is dominated by Republicans, so for Krugman the BWC scandals are “an object lesson in what happens when you have one-party rule untrammeled by any quaint notions of independent oversight.”
This all started in April when the scandal now referred to as “coingate” was documented on the Angry Left hate-blogs that Krugman sources. Apparently the BWC made a highly unconventional investment in rare coins managed by a high-profile Ohio Republican fundraiser, Tom Noe. It remains to be seen how much real fire there is to “coingate,” but there is certainly plenty of smoke: Though Noe is an expert in coin investments, he is also currently under investigation by the FBI for campaign finance violations, while other matters of ethical impropriety of unknown merit have been raised.
Krugman covers all of this before going on to describe what he calls “an even bigger story” in Ohio, that wicked bastion of Republican “one-party rule”:
the Bureau of Workers’ Compensation invested $225 million in a hedge fund managed by MDL Capital, whose chairman had strong political connections. When this investment started to go sour, the bureau’s chief financial officer told another top agency official that he had been told to “give MDL a break.”
According to the Columbus Dispatch, BWC’s loss was actually $215 million leave it to economist Krugman to get the number wrong and err on the side of partisan melodrama. But either way that’s a huge number, and it makes the $13 million loss in “coingate” look like small change (as it were).
We’re talking about personal payoffs … MDL Capital employs the daughter of one of the members of the workers’ compensation oversight board …
Quite a scandal. But Krugman seems ignorant of the fact that the MDL scandal is all about Democrats, all the way. (Or perhaps he knows this and chooses not to acknowledge it.)
According to the Toledo Blade, which Krugman cites as his source for this “bigger story,” the person who told the BWC’s CFO to “give MDL a break” was George Forbes, a member of the BWC’s oversight commission. Forbes is also president of the Cleveland chapter of the NAACP, former president of the Cleveland City Council, former candidate for mayor of Cleveland, and a Democrat.
And who’s that daughter who’s employed by MDL? You guessed it, didn’t you? It’s Mildred “Mimi” Forbes, daughter of the very same and very Democratic George Forbes.
The MDL scandal began in the mid-1990s when Ohio passed an affirmative-action law requiring its public investment funds to direct more business toward minority-owned investment managers. It was similar to law, usually promoted by Democratic legislators, that was passed in many other states during the same era. MDL Capital was founded in Pittsburgh by Mark D. Lay, an African-American.
Tom Maguire of the Just One Minute blog is aghast that Krugman failed to mention Mark D. Lay by name in his column, considering the homophonic coincidence of Kenneth Lay (Krugman’s former boss at Enron) and House Majority Leader Tom DeLay two of Krugman’s favorite GOP punching bags. But there’s no confusing this Lay with a Republican. This Lay has been a heavy contributor to Democratic Pennsylvania politicians, according to the the Pittsburgh Post-Gazette. (Recipients include Pennsylvania House minority leader Bill DeWeese, who recently nominated Lay to a position on the state’s Commonwealth Financing Authority).
MDL and Lay were marketed to Ohio’s public investment funds in the late 1990s by Democrat lobbyist Jerry Hammond, formerly president of the Columbus City Council, according to the Dispatch. MDL paid Hammond $3,000 a month to introduce the firm to Ohio politicians. It was a nice investment for MDL the Bureau of Workers’ Compensation alone has paid the firm $2 million in fees, and Ohio State University is a client, too.
At BWC, Hammond introduced MDL to oversight commission members, including George Forbes, the late Neal H. Schultz, and William A. Burga. I can’t say as to Schultz’s political leanings, but Forbes is a Democrat and so is Burga. In fact, Burga is a member of the Democratic National Committee and the Ohio Democratic Party Executive Committee, and is also president of the Ohio AFL-CIO.
It must have been these behind-the-scenes Democratic machinations that Krugman was referring to when he wrote,
These efforts have already created an environment in which politicians from the right party and businessmen with the right connections believe, with good reason, that they have immunity.
Immunity? The Democrats may wish it were so. Pennsylvania Democrat Bill DeWeese, the recipient of Lay’s largesse, is aggressively defending his patron. But Republican attorney general of Ohio, Jim Petro, is suing Lay for fraud and breach of contract. Republican Petro, by the way, was endorsed a decade ago by Democrat George Forbes when he was running for office against one of Forbes’s Democratic rivals, someone whom Forbes once attacked with a metal folding chair during a Cleveland City Council meeting (according to the Cleveland Plain Dealer).
Michael Meckler points out on his Red-State.com blog that the case has been assigned to a Democratic judge who is running for Ohio secretary of state in the next election. Meckler says, “with both ‘prosecutor’ and judge eyeing statewide election next year, there is the strong likelihood the case could turn into even more of a political circus.”
So much for Krugman’s thesis of “one-party rule.”
Krugman clearly has no idea who’s doing what to whom in Ohio. All he knows is that he hates Republicans, and that if there’s a scandal out there, Republicans simply must be behind it. He claims in his column that “Ohio’s state government today is a lot like Boss Tweed’s New York,” and he says of the Republican party, “they’re trying to turn America into a giant version of the elder Richard Daley’s Chicago.”
Even for Krugman, the sheer virulence of this condemnation of the GOP surely must be a first. By comparing Republicans to Tweed and Daley, he’s saying that they’re as bad as … Democrats!
Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm. He welcomes your visit to his blog and your comments at firstname.lastname@example.org.