SeevsPlace » paul krugman

Where’s the Recovery?

Mardé — Fri, 27 Aug 2010 13:14:14 +0000

Paul Krugman hits the nail on the head again with his Op-Ed this morning, This Is Not a Recovery. He points out we need 2.5% GDP growth just to keep unemployment from rising, and instead, the latest figure out this morning for the second quarter is 1.6%! Instead of treading water with a 2.5% growth we’re being swept backwards, as though in a Pakistan flood, with a mere 1.6% growth.

Here’s the most popular comment, twice as many votes as the next most popular, on Krugman’s article:

As enlightening as your commentary always is, it assumes that policy makers have the interest of the average American, and in particular the unemployed, at heart.

The name of your blog is quite revealing here: you indeed appear to have a conscience, and as a liberal (and further as one freely admitting to the same) you possess a small healthy dose of naivete about your fellow man, generally believing in good intentions. I’m afraid the same can not be said about the majority of those at the Fed or otherwise controlling the reigns of the broader economy.

As an economist, you really should know better than anyone: whenever an inexplicable behavior arises, the best way to find an explanation is always to simply “follow the money”. So who stands to benefit from high unemployment?

If you look at the last ten years of US economic history, you see repeated rises and falls that all follow a similar pattern: when the economy is growing, the average worker fails to benefit. When the economy falls, the worker always loses the most, in terms of both buying power and job security. The benefit to large business owners, who control the majority of wealth and political power in the US, is substantial. The shakier the labor market, the more workers worry about their job security and the less compensation they are willing to work for. Eventually most workers are simply happy to have a job at all and are forced to settle for less and less.

What other explanation, for example, in the government’s complicity in allowing US jobs to be shipped increasingly overseas?

The political and the wealthy in the US are well enough intertwined to form a well-oiled machine. The working class is increasingly powerless. The federal officials you seem to hope for see things in terms of what is most beneficial for them, and increasingly this is to work in alignment with the very wealthy, who contribute most to their election and who stand to offer most in the private sector when they cycle back out of government.

As long as labor is weak and nervous, with the promise of better times always around the corner, unrest is kept at bay enough to permit the rich to keep getting richer with little or no downside.

As nice as it would be to believe in a government with the interests of the little guy at heart, it’s about as much based on hard evidence as Santa Clause. Let’s grow up and either decide to stop complaining about it or talk about some way to fight back.
Recommended by 548 Readers

Yes, this is a pretty cynical comment, but unfortunately it may in very large part be true. The question is, How do we fight back?

Thanks to “Klark, New York, NY” for the comment in red.

AHA, Here’s a Good One!

Mardé — Mon, 10 May 2010 12:36:51 +0000

While reading Paul Krugman’s excellent piece, Sex & Drugs & the Spill, in the NYT this morning, I came across this comment. It pretty much sums up the way I feel. But it’ll probably take another hundred years, if we make it, before it’s realized in this increasingly right wing country. Thanks, Dim from Texas, whoever you are.

It has become clear that we need much stronger regulations of many industries and to make those regulations work we need a good competent government, I completely agree with you there. When the Soviet Union collapsed this was portrayed as a definitive proof that capitalism, or market economy, is superior to socialism. Of course, Soviet Union was rotten from the inside by over-regulation much much earlier, but events in recent years indicate that market economy is not that superior. Russia was just a wrong country to set an example. If socialism, or even communism, first took root in a country like Germany or Japan the result would have been quite different (no, I didn’t not forget about East Germany which was forced into a soviet type system). I feel Karl Max was right and we will all eventually end up in an economic system that is a healthy hybrid of socialism and market economy. And the role of socialism will be played by strong regulations, channeling the energy of the market economy toward common good, a system which is more fair for all, with checks and balances, not rigged so much to benefit the insiders – Wall Street, corporations, politicians – as it is now.

Brains Turned to Mush

Mardé — Fri, 24 Jul 2009 12:37:52 +0000

Most popular comment on Paul Krugman’s Op-Ed this morning:

I’m beginning to believe that George W Bush was the president the American people deserved. I can’t believe the take away from President Obama’s press conference was his comment about the idiocy in Cambridge. The American people’s brains have been turned to mush. Too much Fox News, American Idol, etc…has rendered people into easily duped dolts. We now have a chance to take a positive step towards fixing our Health Care embarrassment, and the debate is off the charts ridiculous. In a simple nutshell: do you want to keep being screwed by the Corporate Health Insurance Companies, or do you want to move towards fair, moral, universally accessible Health Care. It’s that simple.

Thank you Mark C. from San Francisco.

SINGLE PAYER, YES!

Mardé — Tue, 09 Jun 2009 15:25:01 +0000

Here are the best arguments for Single Payer Health Insurance I’ve come across yet:

[youtube]http://www.youtube.com/watch?v=Wi1acHg3mhw[/youtube]

We’re lucky we have that great journalist, Bill Moyers, around. Here he’s interviewing two strong advocates of Single Payer, David Himmelstein, MD, co-founder of Physicians for a National Health Program, and Sidney Wolfe, MD, director of Public Citizen’s Health Research Group.

What chance in Hell does Single Payer have in this country?

I’ll answer my own question. It has NO CHANCE.

So what do we do? Stand with Dr. Dean and go all out for the Public Option. He explains this in the following:

[youtube]http://www.youtube.com/watch?v=hzASZoU2obM[/youtube]

This piece by Bernie Horn convinced me that Single Payer can’t work politically, and that our only option is the Public Option.

Right now, members of congress, including Olympia Snowe in the Senate are watering down the Public Option so that it will end up not being a Public Option. Read Paul Krugman on the Snowe “trigger”.

That’s why we’ve got to Stand with Dr. Dean. Sign his petition!

Response to Krugman

Mardé — Mon, 30 Mar 2009 12:25:44 +0000

Nobel prize winner in economics, Paul Krugman, has another good Op-Ed in the NYT this morning. I’ve been reading the comments to his article and found one I think is spot on and one-ups Paul. Here it is:

Dr. Krugman, without digging through dozens of books and articles, and hundreds of email newsletters and posts, I can’t say exactly how many I’ve read predicting both the current American disaster and explicating the stupid and selfish policies of the I.M.F., World Bank, and our Fed and financial system. America was drunk on power and self-satisfaction. Mr. Bush and his “team” — if that’s what we could call an emaciated shell of neocons and the likes of Greenspan and Paulson — were not borrowing from Peter to pay Paul but robbing both to support their bogus wars and pie-in-the-sky budgets. They deliberately pumped up the price of real-estate and allowed a reverse salami-tactic to add small slices of greed until finally the whole cancerous mess exploded in our and the world’s face.

Of course every word you write tonight makes sense, but I didn’t see the worst miscreants even mentioned. Yes, Rubin, Greenspan, and Summers were there about two-thirds of the way through the build-up of the house of cards, which began during Reagan’s first year in office. And, yes, they were blind to the disaster they were pushing further down the path. Mr. Clinton, who was so compromised after the CIA/Contra operation in Arkansas, was further weakened by scandal and Newt Gingrich, such that he stopped being a Democrat and rolled over to be an Eisenhower Republican (lite). Then along came liar George Bush, 9/11 (which somehow happened despite numerous warnings), the use of 9/11 as a pretext for what Mr. Bush had in mind all along, and the American people fat-dumb-and-happy from all the prosperity of the exploding housing market, which turned perhaps half the homes in the country into giant ATMs.

It is no wonder that Europeans don’t respect us, that U.S. G-20 efforts will be met with resistance. The one thing you say tonight with which I disagree is: “even when — as in this case — the Americans are right.” Perhaps from a purely economic perspective we’re more right than the Europeans, which is to say that they should make stronger stimulus efforts. Certainly you’re correct in saying that the whole world needs to pull together, especially the G-20 nations. But if we are deranged enough to think we can continue to wage war (or peace, or whatever today’s euphemism is) in Iraq and Afghanistan, maintain some 800 military bases around the world, be the de facto world cop, and march relentlessly ahead with our military budget, why would Europeans and others respect us? If we can’t simply pass a few laws about automobile mileage and emission standards and then enforce them, why would Europeans think we could lead the world economy? If we can’t figure out a way to shift to an economy based more on production and less on consumption — especially of foreign-made goods, again we can see why others are cynical about the U.S.’s ability to lead.

The ultimately ugly truth is that we are too hypocritical as a nation to be taken seriously by others. If a child’s parents are on drugs, they’d best not lecture the child about not using drugs.
— Butler Crittenden, San Francisco, CA

Read and Weep!

Mardé — Wed, 04 Feb 2009 17:46:30 +0000

I’ve been getting pissed at what’s going on. Here we have Obama trying to make nice with the Republicans, and you know? They could care less^*. Some of them are masters at speaking out of both sides of their mouths simultaneously, while others don’t even bother to hide their sanctimonious nastiness. Mitch McConnell would be in the former camp, John Boehner in the latter.

Oh, but Obama’s just as bad as the rest of them! Look at all these tax swindlers he’s appointed to high office. Sure, squeaky clean you’ve got to be to get into high office these days, especially if you’re a Democrat. Tom Daschle’s tax problems seem large to the “ordinary person”, and they are. However, he is not a crook! He would have been the best choice to beat back the Republican machine which will pull out all the stops, along with the insurance industry, to beat back any attempts to establish what they’ll call “socialized medicine”.

The best guy for Daschle’s job would be Arnold S. Relman, M.D., but nobody’s ever heard of him and he’d have zero political clout amongst the hyenas. That’s why we needed Tom Daschle, tax warts and all.

I’m so sick of the news media, especially the sanctimonious news anchors, you know, Katie, Brian, Chris and Charlie, not to mention that slime journalist Maureen Dowd of the NYT. Oh, I’m pissed alright!

I try to read people who really know what the hell’s going on like Paul Krugman and Robert Reich, plus a lot of financial blogs all over the place. Hey, Robert Reich’s latest blog entries are really great!

Many economists feel the stimulus plan isn’t large enough! Even the conservative well-known economist, Martin Feldstein, Ronald Reagan’s chief economist, told Congress that the stimulus should be $800 billion.

I could rattle on but why don’t you just read Barney Frank’s latest comment? Frank to bankers: People hate you! OK, I’ll stop now!

* Well, according to this article he is making some progress.

UPDATE:
Here’s Josh Marshall on Denial As Political Strategy:

Behind all the back and forth over the Stimulus Bill is a simple fact: the debate in Washington is rapidly moving away from any recognition that the US economy — and the global economy, for that matter — is in free-fall. The range of outcomes stretches from severe recession to something closer to a replay of the Great Depression, though that label is perhaps better seen as a placeholder for ‘catastrophic economic collapse’ since the underlying place of the US economy in the world economy is very different from what it was in 1929. This reality was palpable in the political debate until as recently as a few weeks ago. But Republicans are using a strategy of conscious denial to push it off the stage.

Take stock of the last few weeks and you can almost visualize the two conversations — path toward economic calamity and debate over Stimulus Bill — diverging.

The other key into the current debate is that the Republican position is ominously similar to their position on global warming or, for that matter, evolution. The discussion of what to do on the Democratic side tracks more or less with textbook macroeconomics, while Republican argument track either with tax cut monomania or rhetorical claptrap intended to confuse. It’s true that macro-economics doesn’t make controlled experiments possible. And economists can’t speak to these issues with certainty. But in most areas of our lives, when faced with dire potential consequences, we put our stock with scientific or professional consensus where it exists, as it does here. Only in cases where it goes against Republican political interests or economic interests of money-backers do we prefer the schemes of yahoos and cranks to people who study the stuff for a living.

Of course, at some level, why would Republicans be trying to drive the country off a cliff? Well, not pretty to say, but they see it in their political interests. Yes, the DeMints and Coburns just don’t believe in government at all or have genuinely held if crankish economic views. But a successful Stimulus Bill would be devastating politically for the Republican party. And they know it. If the GOP successfully bottles this up or kills it with a death of a thousand cuts, Democrats will have a good argument amongst themselves that Republicans were responsible for creating the carnage that followed. But the satisfaction will have to be amongst themselves since as a political matter it will be irrelevant. The public will be entirely within its rights to blame Democrats for any failure of government action that happened while Democrats held the White House and sizable majorities in both houses of Congress.

Fiscal Equivalent of War

Mardé — Fri, 09 Jan 2009 14:52:36 +0000

Many argue that it was really World War II that got us out of the great depression of the 1930′s. Our vast increase in military spending is what reduced the 16.9% unemployment of 1936 to the 4.7% unemployment of 1942, they say.

So, Obama’s plan may not be up to snuff, may not be the fiscal equivalent of war. Paul Krugman is saying it’s only about one-third of what is needed. John Judis suggests an additional $70 billion in high-speed rail plus a new international monetary system.

Are these guys right? Or are our problems to be solved by tax breaks for the rich, Republican style? Me? I’ll take the former.

UPDATE: Obama in his press conference today said that if Paul Krugman is right, they’ll use his ideas, or at least evaluate them seriously. “No pride of authorship.”, said Obama.

Time for Action!

Mardé — Mon, 15 Dec 2008 13:48:40 +0000

Paul Krugman is back with a great op-ed in Monday morning’s NYT. Here’s the point of his piece, taken from the second paragraph:

But there’s a problem: conservative politicians, clinging to an out-of-date ideology — and, perhaps, betting (wrongly) that their constituents are relatively well positioned to ride out the storm — are standing in the way of action.

There are already a goodly number of comments on Paul’s piece. Here’s one comment that sums up the situation perfectly in my estimation:

As a historian, I am utterly shocked by the response to this economic crisis by Conservative Republicans in Washington and Chancellor Merkel’s response in Germany. What planet are these people on? Have they ever opened up a history book? I hate to say it but it almost seems as if these people have absolutely lost their minds. Here in the U.S., I do feel that these Republicans are simply trying to score political points with their out-of-date ideology by killing another powerful labor union. Meanwhile, the middle class continues to shrink at an alarming rate. Companies like the Big 3 and other major manufacturers provide this country with thousands and thousands of middle-class decent paying jobs. However, all I hear from Republicans at my university and everywhere else is that any intervention is “socialism” or “communism” or part of some internationalist conspiracy for one world government. The Red Scare is over people and McCarthy has long been dead. Why do we keep bringing back these McCarthyist rants during these times of crisis? The truth is these economic conservatives have absolutely no clue what it is like working in a factory and being on the bottom of the ladder, struggling to make ends meet every month. All they want to do is criticize workers for wanting to make a decent wage that actually keeps up with inflation. What is wrong with that? Of course, these Conservative Republicans would have no problem voting for a raise for themselves. But at the second a poor man comes to them for help or wanting health care, they stick their noses in the air. Mr. Krugman, I hate to say this but if something is not done soon with this economic situation, this country is going to fall apart beyond description. What will it take for these people to understand the situation? Do people literally have to be starving to death in the streets, fighting for food, jumping out of windows, killing themselves in their forclosed homes before they notice the problem? I mean come on: it came out the other day that we have been in a recession since December of 2007….it took them this long to notice and fess up? We need to start acting with depression economics now before it is too late. It is time for a Kenyesian revolution now more than ever. The solution is staring in the face of not just the United States but the entire international community as a whole. Why will they not accept that their completely free-market ideology has failed them?

— Matt, Ball State University

Right! Their completely free-market ideology has failed them! And us! Let’s take some action. But we’re still in that state of limbo until Bush finally goes.

The World as We Know It?

Mardé — Sun, 12 Oct 2008 03:15:18 +0000

Can it be that the world as we know it may be coming to an end? Naw, it can’t be that bad, can it? Well, I’ve been cramming as much of this global financial predicament as I can stand into my head the last couple days, between going about my daily chores and ablutions. And, as one might say, this is serious shit. Paul Krugman’s blogs have been my main starting points, but also I watched online Bill Moyers’ interview of George Soros, the man who predicted this perilous predicament a number of months ago. George states that we have wasted valuable time and are still behind the curve but may be lucky. Nothing less than a coordinated intervention by all the countries into their banking systems to supply vast sums of equity, plus huge economic stimulus packages and bailouts for homeowners, will work. Or at least it seems so. Tomorrow, Sunday, Oct. 12, 2008, may be the D-Day, D for decision. Will it work? We’ll have to see.
Update Oct. 12: Well, here it is Oct. 12, Sunday, and it looks like the Europeans at least are starting to get their acts together. We’ll see about the U.S.of A. Paul Krugman still has doubts about our commitments, but thankfully our markets are closed tomorrow, the day Columbus discovered America, or so the story goes…… Oh, and here’s another great source of info on the current situation.

Nobody Expects ……

Mardé — Wed, 08 Oct 2008 14:02:24 +0000

Nobody expects the

Spanish Inquisition!!!

So saeth Monty Python!

Paul Krugman, the noted economist, sees a lead in with our economy here:

The only thing we have to fear is fear itself. Fear and negative equity … The two things we have to fear are fear itself and negative equity, and the depleted capital of financial institutions … Amongst the things we have to fear are fear itself, negative equity, and the depleted capital of financial institutions.