Tag: Paul Krugman

Krugman vs. Keen: Rhetoric vs. Reality

 About two months ago economists Paul Krugman and Steve Keen got in a very public, somewhat unpleasant, and very unusual, online spat.

  It is worth noting that not only did Krugman not win the debate, he was pretty convincingly defeated. Businessinsider, which didn’t have a dog in this race, explained it as thus:

 Ultimately, Krugman does not come off as persuasive in this fight, writing that continuing to respond is “wasting [his] time,”

  The points of dispute probably went over the heads of most people, and thus the debate was probably ignored by most people, but the fact the debate happened at all is very significant. Why? Because this wasn’t a left-right debate that we see in Washington. This was a debate that displays just how extreme the discussion of economics has drifted in today’s world.

 So who is Steve Keen? He’s an Austrialian economist, author and a disciple of John Keynes and Hyman Minsky.

 Nouriel Roubini appears to be the most commonly recognized by (virtually all) the main sources I’ve seen. Yet, economists chose Australian Professor Steve Keen over Roubini for the Revere Award (outvoted by more than a 2 to 1 margin – details below) for publicly warning of the Global Financial Crisis.

 If you listen to mainstream media, you will hear that there are two alternative economic theories in the world today: 1) right-wing, Chicago School, “austerians”, who believe that to get back to “growth” and get more “competitive” we need to lower our standard of living and balance our budgets (except when it comes to military spending, of course), and 2) neo-Keynsian liberals like Paul Krugman who think we need massive amounts of deficit spending in order to get the economy going (including more military spending).

  On one side you have faith in markets, in the other you have government-managed economy.

Congressional Game of Chicken: Deficit Deal Post Mortem

Cross posted from The Stars Hollow Gazette

On the PBS News Hour, Nobel Prize winning economist, Paul Krugman and Martin Feldstein, a professor of economy at Harvard University and former chair of Reagan’s Council of Economic Advisers, discussed the failure of the Deficit Super Committee (click here for the transcript) :

What stands out is what was not mentioned by either Krugman or Feldstein, the Bush tax cuts, which the Republicans insisted be made permanent in exchange for any tax revenues no matter how meager. In the light of the Republican objection to an extension of the 2% payroll tax cut because of the $250 billion dollar per year cost, it is laughable in the face of the fact that just extending the tax cuts another 10 years would cost $5.4 trillion in revenue losses., four times as much as the payroll tax cuts. But not a peep from either man or the interviewer.

Krugman was correct in stating that the Democrats were far too generous and, as John Aravosis has pointed out in the past, they are lousy negotiators, always starting from their bottom line. However, Dana Milbank in his the Washington Post opinion makes clear that this committee was doomed from the start by the mere presence of one man, Sen. Jon Kyl (R-AZ), an immovable object when it comes to tax increases, “doing Norquist’s bidding in killing any notion of higher taxes”:

The sabotage began on the very first day the supercommittee met. While other members from both parties spoke optimistically about the need to put everything on the table, Kyl gave a gloomy opening statement. “I think a dose of realism is called for here,” he said. That same day, he went to a luncheon organized by conservative think tanks and threatened to walk (“I’m off the committee”) if there were further defense cuts.

When Democrats floated their proposal combining tax increases and spending cuts, Kyl rejected it out of hand, citing Republicans’ pledge to activist Grover Norquist not to raise taxes. Kyl’s constant invocation of the Norquist pledge provoked Senate Majority Leader Harry Reid (D-Nev.) to snap at Kyl during a private meeting: “What is this, high school?” [..]

Norquist, who worked to defeat a compromise, brags about his control over Kyl. When Kyl made remarks in May that appeared to leave open the possibility of tax increases, Norquist called Kyl and adopted “the tone of a teacher scolding a second grader as he recalled the conversation,” Politico reported. Norquist boasted to the publication that, after he upbraided Kyl, the senator “went down on the floor and he gave a colloquy about how we’re against any tax increases of any sort. Boom!”

It is fairly obvious that the Senate Republicans under the leadership of Sen. Mitch McConnell and Norqist’s Svengali-like control, are willing to risk the stabilization of the economy and kill any job creation bills to defeat President Obama and gain control of both houses. As Aravosis points out in his article today the best that Feldstein could do was blame both parties equally. Perhaps over the next year, the Democrats and President Obama should continue to put forth really bold bills, bolder than the President’s last job proposal, to further demonstrate the intransigence of the Republicans. It might go a long way to shed the image that Democrats are the party of capitulation.  

Obama’s Economic Fallacies

Cross posted from The Stars Hollow Gazette

Nobel Prize winning Economist and New York Times columnist Paul Krugman has nailed Barack Obama’s economic polices and his penchant for feeding the right wing economic fallacies, as “the false government-family equivalence, the myth of expansionary austerity, and the confidence fairy” and, as Dr. Krugman points out, Obama did it in two sentences:

Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.

Dr. Krugman has already debunked both the myths of government-family equivalence and expansionary austerity. Yet the President still thinks that by caving to the right wing Hoover economic policies the economy will get better. This appears to be a signal that he is about to cave to Republicans once again on spending cuts and no new revenue sources that has led will further slow the economy and may spiral the US into a second recession or worse.  

Krugman’s Lolcat and Spongebob Squarepants

Krugman's Lolcat

Nobel Laureat Paul Krugman has recently posted the lolcat above on his blog at the New York Times, and I’m happy to accept it as a companionable indication that despair about so-called “democracy” and the little blue planet which locally hosts it isn’t confined to bloggers with an audience in the single digits, like me, but extends all the way up to the top of the commentariat.

But on the bright side, Spongebob Squarepants now totally dominates cable TV!


And there’s a lot of wisdom in those pants!


Krugman: Is Obama More of a Coward, or More of an Idiot?

Paul Krugman, November 1, 2010…

John Boehner, the House minority leader, was widely mocked last year when he declared that “It’s time for government to tighten their belts” – in the face of depressed private spending, the government should spend more, not less. But since then President Obama has repeatedly used the same metaphor, promising to match private belt-tightening with public belt-tightening. Does he lack the courage to challenge popular misconceptions, or is this just intellectual laziness? Either way, if the president won’t defend the logic of his own policies, who will?

Is Obama more of a coward, or more of an idiot?

You decide.

Obama Undone By His Own Bullshit

Republicans and tea-baggers are winning the public debate about “big government” with the argument that “big spending” has failed to reduce unemployment much below 10%, and why are Obama and the Democrats so pitifully ineffective at refuting the dim-witted rants of a mob of yahoos?

Paul Krugman analyzed Obama’s self-inflicted dilemma in a recent column.

Actually, the administration has had a messaging problem on economic policy ever since its first months in office, when it went for a stimulus plan that many of us warned from the beginning was inadequate given the size of the economy’s troubles.

You can argue that Mr. Obama got all he could – that a larger plan wouldn’t have made it through Congress (which is questionable), and that an inadequate stimulus was much better than none at all (which it was). But that’s not an argument the administration ever made. Instead, it has insisted throughout that its original plan was just right, a position that has become increasingly awkward as the recovery stalls.

And a side consequence of this awkward positioning is that officials can’t easily offer the obvious rebuttal  to claims that big spending failed to fix the economy – namely, that thanks to the inadequate scale of the Recovery Act, big spending never happened in the first place.

The real story is clear enough in the graphic below, from the Bureau of Labor Statistics, representing the total number of jobs in the USA month by month, in thousands.


The bottom falls out of employment beginning in August 2008, high-lighted in red, 460,000 jobs disappear between August and September, and  month after month 550,000 jobs vanish between September and October, then 720,000, then 670,000, and so on until November and December 2009, when the bleeding finally stops, and very modest growth ensues.

This is the story Democrats should have been telling over and over and over and over, on every talk-show and at every press conference. Bush/Cheney cut the throat of the American economy, Obama’s stimulus stopped the bleeding, and now we need another transfusion.

But Obama pretended that his original stimulus was just exactly right, and now Democrats don’t have a story to tell.

Unemployed Presidents and “Structural Unemployment”

Bill Clinton is prominently quoted in Paul Krugman’s recent column about “structural unemployment.”

For example, former President Bill Clinton recently told an interviewer that unemployment remained high because “people don’t have the job skills for the jobs that are open.”

Krugman refutes this nonsense in one line.

Unemployment has surged in every major occupational category.

So there is no category of “job skills” that would equip millions of workers for millions of jobs that don’t exist.

But debating sold-out hures like Bill Clinton and Barack Obama about public policy is beside the point.

Neither of those narcissists ever gave a damn about the public, and the bottom line was always “What’s good for me is good enough for the country.”

Since Bill Clinton left the White House, he has collected more than $100 million in deferred bribes from his grateful corporate clientele, after eight years of nonstop de-regulation and runaway mergers and acquisitions.

More than $100 million in earnings!

And the really important question isn’t “How did he “earn” all all the money?”

The really important question is “When did he earn it?”

And it should be obvious even to a hockey-puck that Bill Clinton earned all that money in the White House, and his fantastic income is nothing but a huge deferred bribe.

So if you want to impress Barack Obama…

If you want Barack Obama to take an interest in the public good instead of always and only what’s good for Barack Obama…

Forget about Krugman’s arguments and any other variety of “public policy debate,” because all of it would pass right through Obama’s empty head like static on a radio, and instead of debating, slam Bill Clinton into prison for public corruption.

Send Obama this message!

“If you ever collect a dime from your corporate buddies, you’re going to prison, sucker!”

“You’re working for us now, you’re working for the public from now on, or you’re working for nobody!”

Senate Subcommittee: The Role of Credit Rating Agencies

I saw Krugman on the TVeee over the Weekend. Something he said, made me think the Goldman Email Gate, was a big Mis-Direction.

So I decided to follow up on that hunch; I took to the Intertubes, and began to follow his trail of breadcrumbs …

Berating the Raters

By Paul Krugman, NYTimes — April 25, 2010

No, the e-mail messages you should be focusing on are the ones from employees at the credit rating agencies, which bestowed AAA ratings on hundreds of billions of dollars’ worth of dubious assets, nearly all of which have since turned out to be toxic waste. And no, that’s not hyperbole: of AAA-rated subprime-mortgage-backed securities issued in 2006, 93 percent – 93 percent! – have now been downgraded to junk status.

What those e-mails reveal is a deeply corrupt system. And it’s a system that financial reform, as currently proposed, wouldn’t fix.

Krugman: “Obama Wasn’t The One We’ve Been Waiting For”

From Paul Krugman’s blog…

Health care reform — which is crucial for millions of Americans — hangs in the balance. Progressives are desperately in need of leadership; more specifically, House Democrats need to be told to pass the Senate bill, which isn’t what they wanted but is vastly better than nothing. And what we get from the great progressive hope, the man who was offering hope and change, is this:

“I would advise that we try to move quickly to coalesce around those elements of the package that people agree on. We know that we need insurance reform, that the health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don’t, then our budgets are going to blow up and we know that small businesses are going to need help so that they can provide health insurance to their families. Those are the core, some of the core elements of, to this bill. Now I think there’s some things in there that people don’t like and legitimately don’t like.”

In short, “Run away, run away”!

And more from Krugman…

Obama Liquidates Himself

A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback?

It’s appalling on every level.

It’s bad economics, depressing demand when the economy is still suffering from mass unemployment.

It’s bad long-run fiscal policy, shifting attention away from the essential need to reform health care and focusing on small change instead.

And it’s a betrayal of everything Obama’s supporters thought they were working for. Just like that, Obama has embraced and validated the Republican world-view — and more specifically, he has embraced the policy ideas of the man he defeated in 2008. A correspondent writes, “I feel like an idiot for supporting this guy.”

“Obama has embraced and validated the Republican world-view.”

And that’s the whole story of Obama’s miserable Presidency.

Krugman vs Ailes

The Main Event Smack Down from Nobel Laureate Paul Krugman.

Krugman 1/Ailes 0

Why is BarbWa Wawa moderating “This Week”? ABC has no other credible moderators? WOA! Is Ailes the new Guinness Book record holder for double chins? I mean they must go to his knee caps..OK I won’t go any further with that thought, too gross. EWWW.

h/t Blue Texan @ FDL

Banksters get Tagged in the UK, Only to Flee to, Guess Where?

Finally a Representative body, that knows WHO they work for …

Class war breaks out in the U.K.

The Labor government announces a tax on exorbitantly-paid bankers. American populists gnash their teeth in envy

By Andrew Leonard, Dec 9, 2009

Unsurprising headline of the year: “U.S. Probably Will Avoid Matching U.K. 50 percent Bonus Tax.”

Alistair Darling, the U.K. Chancellor of the Exchequer, announced the tax — aimed squarely at overpaid bankers


From Bloomberg:

“There are some banks who still believe their priority is to pay substantial bonuses,” Darling said in Parliament. “I am giving them a choice. They can use their profits to build up their capital base. If they insist on paying substantial rewards, I am determined to claw money back for the taxpayer.”

Paul Krugman says the move is “entirely reasonable.” Justin Fox asks, “why the heck not?” Felix Salmon says “well done.”

But don’t expect a repeat across the pond.


Interesting … maybe the People CAN Fight back?

Krugman: “Populism that makes Bankers Angry is Exactly what the Economy Needs”

Crossposted at Daily Kos

   Yesterday, in a NYTimes Op-Ed titled “Reform or Bust”, Nobel Economist Paul Krugman gave some well needed advice on good economics and good politics that President Obama and Democratic members of Congress should listen to.

    It’s not just that taking a populist stance on bankers’ pay is good politics – although it is: the administration has suffered more than it seems to realize from the perception that it’s giving taxpayers’ hard-earned money away to Wall Street, and it should welcome the chance to portray the G.O.P. as the party of obscene bonuses.

    Equally important, in this case populism is good economics. Indeed, you can make the case that reforming bankers’ compensation is the single best thing we can do to prevent another financial crisis a few years down the road.

   One obvious point is the need, politically, to make the GOP the party that defends huge Wall St salaries and bonuses, which they will do anyway and gladly. Politically, the GOP can not be for the bonuses. They just can’t. Even more so, they can not be against the regulations AND against the bailouts. It just won’t work. Like Saruman in Lord of The Rings when confronted by Gandalf and the Riders of Rohan at the foot of Orthanc, the GOP can not be all things to all people, or against all things either. When too many eyes are watching at once the illusion is broken. The GOP can not be against all cures and still appear in the populist corner, as their teabagging antics try to portray, badly. The GOP must stand for something, and they do, they stand for the Super Rich and Corporate Wealth. Proving this is very important.

    Recently wingnutty teabagging Republican Senator Jim DeMint (C Street-SC) offered his answer to all that economically ails Wall St. Guess what? His answer; More Tax Cuts!

    Instead of looking at more regulation, we could do a lot by fixing our tax system here in this country, to make us globally competitive. The President needs to focus on what really has caused problems and look at what has really made America so prosperous, and I’m afraid that’s not the lens he’s looking through right now.


    Because who would think that cutting taxes for Wall St would be kind of rewarding for them, or a serious attempt at real reform.

    The GOP has NO new ideas, and the only ones they do have are Failed, totally and utterly Failed. Bipartisanship with these guys is a sort of cheating off of the dumb kid in class at ths point. It WILL NOT WORK. I understand why Obama has made the effort, but no it is time to play hardball, it is NO LONGER the time to keep trying to make the GOP feel good about themselves, especially when their ideas suck and they hope you fail.

    More and my own analysis below the fold.


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