Yes, it’s true. A lie, repeated a thousand times, can become the truth. How so? Just change the definition of “truth.” (See homosexual marriage, or austerity. Human being-wise, “is-master” Bill Clinton comes to mind.)
The lie being repeated today is this: The Economic Argument Is Over — And Paul Krugman Won. How did Krugman win? Because Krugman fanboy Henry Blodget says so. And who is Blodget? He’s a banned for life financial-insider and $4 million disgorgement/fine guy whose bona fides speak for themselves.
What is the Blodget hypothesis?
…”stimulus” spending, economists like Paul Krugman argued, would help reduce unemployment and prop up economic growth until the private sector healed itself and began to spend again.
Yes, we saw how well that worked with the Democrats’ “stimulus,” did we not? And we’re still seeing it in America’s brilliant ongoing economic performance.
Blodget also says a spreadsheet error in has disqualified “austerity” and that we can continue to accumulate debt ad infinitum:
An academic paper that found that a ratio of 90%-debt-to-GDP was a threshold above which countries experienced slow or no economic growth was found to contain an arithmetic calculation error.
Once the error was corrected, the “90% debt-to-GDP threshold” instantly disappeared. Higher government debt levels still correlated with slower economic growth, but the relationship was not nearly as pronounced. And there was no dangerous point-of-no-return that countries had to avoid exceeding at all costs.
Despite Blodget’s assertions—not the same as proofs—reality suggests there are points-of-no return unless the debt accumulator, that is, national governments all around the world, decide to 1) inflate the debt away by making more money or 2) default. And there is, of course, the dread U.S. economic performance where the Obama recovery has been worse than the Bush recession.
They say economics is the dismal science. A better description would be that we have economists who are dismal pseudo-scientists. And those pseudo-scientists who can’t keep up with reality choose to write (as do those who are banned for life from the investment industry).
Oh and that “Nobel Prize for Economics” thing? A bit misleading, to say the least.
How would Paul Krugman, Brad DeLong, et al (that is, “many economists”) explain Sweden? Likely by denying reality.
While the rest of Europe and the United States have gone on massive spending sprees fueled by government borrowing and tax hikes, Sweden took a different approach. In the Spring 2012 Economic and Budget Policy Guidelines, the Swedish Government and its Finance Minister, Anders Borg, have laid out a plan that is focused on lowering taxes. Their rationale? “When indviduals and families get to keep more their income, their independence and their opportunities to shape their own lives also increase.”
So why didn’t Sweden hop on the stimulus bandwagon like the U.S. and much of Europe?
Anders Borg explains, “Look at Spain, Portugal or the UK, whose governments were arguing for large temporary stimulus… Well, we can see that very little of the stimulus went to the economy. But they are stuck with the debt.” We have now seen that attempts at austerity within the Eurozone have met a similar fate: none of it was serious. As spending increases have been squandered, spending cuts have been a charade, failing to target the big government programs at the core of the debt crisis.
Stuck with the debt. Of course stuck with the debt assumes that there won’t be the Krugman favored “debt relief,” AKA default, haircuts, or massive inflation.
The lesson from Keynesianland: always a borrower be. And for the lenders that are required for the borrowers to borrow? There’s a sucker born every minute. And that sucker has a printing press and/or the ability to “buy” government debt.
Despite slow projected growth for 2012, Sweden is expecting annual GDP growth of over 3 percent starting next year, projected out through 2016 by which time their unemployment is expected to slide down to just about 5 percent. During this time the Swedish gross debt is expected to drop from 37.7 percent/GDP to 22.5 percent/GDP as a result of government surpluses. For comparison, US gross debt to GDP is well over 100 percent and climbing. All this success must be on the backs of the working class right? Wrong. Wages are slated to rise in Sweden by nearly 4 percent annually through 2016.
The recovery-by-stimulus model has failed across the board, and as Mr. Borg has pointed out, we are still stuck with the damage it has done. With the refusal of the Obama administration, Congress, and their European counterparts to accept serious spending cuts, maybe it’s time to try something that’s actually working.
Something that’s actually working. Imagine the possibilities.
From Paul Rugrat (AKA Paul Krugman) on how a bureaucratic functionary undid the otherwise spring-loaded-for-success Obama economy: it’s Bush’s fault.
…this week’s shocking refusal to implement debt relief by the acting director of the Federal Housing Finance Agency — a Bush-era holdover the president hasn’t been able to replace — illustrates perfectly what’s going on.
First, the Rugrat seems to forget President Obama’s history of making recess (and unconstitutional) appointments when the Senate is in session, so with that explanatory-fail out of the way, onto more non-explanation:
Some background: many economists believe that the overhang of excess household debt, a legacy of the bubble years, is the biggest factor holding back economic recovery. Loosely speaking, excess debt has created a situation in which everyone is trying to spend less than their income. Since this is collectively impossible — my spending is your income, and your spending is my income — the result is a persistently depressed economy.
How should policy respond? One answer is government spending to support the economy while the private sector repairs its balance sheets; now is not the time for austerity, and cuts in government purchases have been a major economic drag.
Many economists? Yes, and four out of five dentists recommend sugarless gum for their patients who chew gum.
And Paul, there is the government who’s now about 25 percent of the economy and they’re spending about 140 percent of their income. This very same government has spent over $5 trillion more than its income during the Obama era.
…the Federal Reserve’s refusal to act in the face of high unemployment and below-target inflation is a scandal.
But fiscal and monetary policy could, and should, be coupled with debt relief. Reducing the burden on Americans in financial trouble would mean more jobs and improved opportunities for everyone.
The Fed has bought much of the government’s debt (over 60% in 2011) the Obama Administration has created, so to follow the Rugrat’s logic, maybe the Fed needs debt relief.
Or perhaps the government itself needs debt relief. Or even the American people who fund the government.
After all, each taxpayer’s share of the national debt is about $194K and $64K of that has happened on Obama’s relatively short watch. And those numbers don’t include the nation’s true unfunded liability which is closer to $500K per taxpayer.
The real lesson? Who—besides the government—will loan money without an expectation of repayment (let alone reasonable return)? Not even a fully indoctrinated lefty like the Rugrat would do that.
While the President can’t control the economy, he can influence it. Obama has and his influence—all of it bad—is his legacy.
Finally, Paul (and Barry), It isn’t the taxes. It’s the spending.
Paul Krugman has a lofty platform. He has a massive megaphone and an epic echo chamber. He has a Nobel Prize for economics. Does any of this mean we should listen to him? If you buy into this from Nassim Nicholas Taleb or the following, no.
When Friedrich von Hayek became a Nobel Laureate in economics in 1974 he said: “The Nobel Prize confers on an individual an authority which in economics no man ought to possess.” The truth of this is demonstrated daily by the case of Paul Krugman.
And some more evidence (there’s lots) that we’d be well advised to ignore Krugman? How about something from The Center for Geoeconomic Studies (associated with the Council on Foreign Relations) which shows he chose to cherry-pick his facts in order to “demonstrate” the “Icelandic Post-Crisis Miracle.”
We showed that Krugman’s “miracle” was merely an artifact of comparing changes in Iceland’s real GDP with that of Estonia, Ireland, and Latvia since the strategically chosen 4th quarter of 2007.
Why did Krugman choose the 4th quarter of 2007? Because starting with any other quarter would have ruined his story. Based on the GDP data available at the time he made his figure (which have since been revised), Iceland’s GDP had fallen a whopping 5 percentage points between Q3 and Q4. By starting his story in Q4 Krugman managed to lop that off, making Iceland look much better.
We showed that the miracle story collapses as the starting date for the comparison is backed up. What we find is a simple story of large booms and busts in Estonia and Latvia, and much smaller booms and busts in Iceland and Ireland.
Ah, the question of economics (and government): what’s your baseline?
The Center initially showed how Krugman constructed his false-miracle in 2010, but now he’s dragging the issue back to the surface. So what’s the real Krugman agenda?
Once again, Krugman has relied on a Potemkin-Village graphic to illustrate his wider claim, which is that Icelanders derive unambiguous net benefits from their government obliging them to hold and transact in a national currency that their trading partners will not accept. (80% of Greeks consistently reject going back to such a state.)
Liberal economists: choosing facts that support their positions, ignoring those that don’t.
Institutionalized mental health care has collapsed through the years.
…across the country, the number of psychiatric beds has shrunk dramatically in recent decades.
The Treatment Advocacy Center’s study pegged the decline at nearly 90 percent — from one psychiatric bed for every 300 Americans in the 1950’s to one bed for every 3-thousand today…
Among the most destructive things known to man is an idiot with initiative.
Brad DeLong is a liberal economist. With initiative. You do the math.
The S&P stock index now yields a 7% real (inflation-adjusted) return.
One might ask, “Brad, just when is now and what did you use as your start and stop points?”
Such questions are not unreasonable as this site says the S&P 500 Dividend Yield is 2.09% as of 4:30 pm EDT, Thu, 31 May 2012.
Or you might use the S&P 500 Total Annual Returns which is listed for 2012 as 2.05%.
Paul Krugman is also a liberal economist. With initiative.
As background, consider this: man is the only creature who can deceive himself.
Now onto the economic topic of the week, austerity.
Austerity is alleged to have use as an economic term. However, its precise definition is unclear and it seems austerity can mean many things to many people.
Traditionally, austerity was thought to mean something like “reduced availability of luxuries and consumer goods, especially when brought about by government policy.”
So how was the austerity effort in Europe received? Poorly, it would appear based on recent elections. In fact, in alt-reality land, austerity is being declared dead by bright and shining stars including Paul Krugman, Robert Reich, and Eugene Robinson.
There is, however, a more reality based assessment. And it comes from IBD:
Now, the left’s argument goes, a new “growth strategy” premised on more government spending, not less, is needed — just like in Spain, Greece and Italy.
The only problem: The idea of EU austerity is a myth.
Only the left (and/or the traditional media) would view more government spending as a growth strategy. If such a strategy were to work, wouldn’t you think the people’s long and glorious history of government deficits would have created such growth? And that it would especially gotten better in the last half-decade?
Or would you instead think low levels of productivity, high levels of government interference (and taxes), and bad demographics have led the left to the edge of the fiscal cliff?
Back to IBD:
Austerity? Spending has boomed in the EU over the last decade. During the 2000s, EU member nations collectively boosted government outlays by 62%. Average government spending by EU nations today stands at about 49.2% of GDP — vs. 44.8% in 2000.
On its own website, the EU itself ridicules the notion of government austerity as a “myth.”
“National budgets are NOT decreasing their spending, they are increasing it,” the EU says, noting that in 2011, 23 of the 27 nations in the EU increased spending. This year, 24 of 27 will do so.
Just as an obese person can observe an strict regimen of diet and exercise for a day or two, the EU fail nations (especially Greece, Spain, Italy, and perhaps soon, France) are alleged to have attempted to practice austerity for a few months—even though the EU knows it isn’t true—and they are now resolved: they will limit themselves to a family sized bag of Cheetos washed down with two-liters of Coke and a half-gallon of Chunky Monkey as dessert. For breakfast.
Because of the recent electoral outcomes in Europe, the anti-austerians are declaring austerity is a failure; austerity had its fifteen minutes of fame in Europe and now its as dated to the left as Milli Vanilli is to the rest of the world.
Instead, just remember that George Orwell was ahead of his time. Today, the anti-austerians favor doublespeak which changes the meaning of words and actions as convenient. For them, austerity means more government spending.
After all, the machine must be fed. And ignorance is strength.
Linsanity is (was) the Jeremy Lin phenomenon.
Insanity is doing the same thing over and over and expecting different results.
Argument from ignorance asserts a proposition is true because it has not yet been proven false.
This makes Paul Krugman and Robert Reich, AKA Paul Rugrat and Robert Tyke insane. And ignorant.
Jeremy Lin is merely on the Knicks injured reserve, but he could be back for game five versus the Heat. Were he to suffer a brain injury instead of a knee injury, he might want to consider a future as a liberal economist. But I digress…
Both Krugman and Reich offer the same “economic” shtick over and over again: Borrow more money. Spend more money. Print more money. Repeat ad infinitum until the next national-level collapse and/or revolution.
From the Rugrat:
Critics [like Krugman himself] warned from the beginning that austerity in the face of depression would only make that depression worse.
…the failure of austerity policies to deliver as promised has long been obvious. Yet European leaders spent years in denial, insisting that their policies would start working any day now, and celebrating supposed triumphs on the flimsiest of evidence.
The failure of austerity policies in the above context means this: to try and approach living within a nation’s means. Snip.
…serious analysts now argue that fiscal austerity in a depressed economy is probably self-defeating: by shrinking the economy and hurting long-term revenue, austerity probably makes the debt outlook worse rather than better.
Yes, the Rugrat considers himself a serious analyst. And perhaps because no one has come up with a model to disprove him, regardless of the self-evident non-austerity fail, he considers his hypothesis to be true. And Reich is cut from the same dwarfish cloth.
Here’s Reich, who is at least more succinct (if no less insane):
Blame it [that is, the epic European economic fail, sans Germany] on austerity economics – the bizarre view that economic slowdowns result from excessive debt, so government should cut spending.
Naturally, the Europe to America implication is this: bad things will happen to the United States should we practice “austerity.”
Yet only a liberal economist (or two) could think the U.S. Government adding over $6.2 trillion to the national debt in the last four fiscal years is somehow approaching the aforementioned and dangerous austerian approach.
That’s because we all know that deficit government spending somehow magically creates a multiplier effect of something greater than 1.0. Except when it doesn’t. Like for at least the last four years.
And such borrowing becomes problematic if the money isn’t paid back, or if it is, if it’s paid back at less than full value, either due to financial haircuts or inflation.
As to the serious analysts tag the Nobel Prize winning Krugman credits himself with, I must defer to polymath Nassim Nicholas Taleb of The Black Swan fame. Taleb refers to the aforementioned Nobel Prize in economics as “absurd” “pseudo-science” which is “reminiscent of medieval medicine.” And he’s got more, far more, but here’s a good representative chunk:
…economic models, it has been shown, work hardly better than random guesses or the intuition of cab drivers…
Other than that, liberal economists should be inherently trusted, honored, and deferred to. At least as much as random guesses and cab drivers.
John Lott’s take down of Paul Krugman, also known to this site as Paul Rugrat, is a great read and is totally on-target.
When I started this blog, my intent was to largely parody the idiotic columns written by the usual lefties: Paul Rugrat, Dana Milkbag, Moron Dowd, Robert Reich III, Charles Blows, et al.
I found the task far more difficult than imagined as their columns were already (if unintentionally) self-parodying to begin with. It was like reading The Onion, only funnier and paradoxically, also more sad. And none more so than Krugman, whose columns flirt with the absolute limits of human irrationality and denial.
“Economist,” thanks to Rugrat and his ilk, is now right up there with “politician” and “climate scientist” as far as earned respect, accuracy, and truthfulness are concerned.
Everyone needs to read Paul Krugman once in a while, if for no other reason than to make you feel better about your own intellect.
Don’t be dismayed by Krugman’s shrill tone and vacuous logic, just laugh along and remember this lesson: man is the only creature who can lie to himself.
Krugman has a column called Natural Born Drilllers and yes, reading it will make you feel better about yourself. In fact, it makes one wonder: if a man like Krugman can win a Nobel Prize in Economics, how bad were that year’s non-winners? What a terrifying thought…
Today Krugman tells us “…U.S. energy policy has very little effect either on oil prices or on overall U.S. employment.”
Of course, the statement is self-evidently absurd. Don’t believe me? Well, shuffle the statement around, and make it read like this: Saudi Arabian energy policy has very little effect either on oil prices or on overall Saudi employment. Is it absurd yet?
Or maybe broaden it even more: nowhere on earth do energy policies have much effect on either oil prices or on overall employment.
Paul, consider my alternate hypothesis: our energy policy massively effects oil prices, and ergo, overall U.S. employment. How so, you ask?
Because all other things being equal, $2 a gallon gas is likely to leave a household (that drives 20,000 miles a year in a vehicle that averages 20 mpg) an extra $2000 in disposable income versus $4 a gallon gas. Most households are going to spend at least a bit of that $2000 and spending creates a need for workers. People working, Paul, effects unemployment.
Krugman is merely attempting to carry the water for the Administration on this topic. Charles Krauthammer, as an alternative, offers this:
“The American people aren’t stupid,” said Obama on February 23, mocking “Drill, baby, drill.” The “only solution,” he averred in yet another major energy speech last week, is that “we start using less, that lowers the demand, prices come down.” Yet five paragraphs later he claimed that regardless of “how much oil we produce at home . . . that’s not going to set the price of gas worldwide.”
So: Decreasing U.S. demand will lower oil prices, but increasing U.S. supply will not? This is ridiculous. Either both do or neither does. Does Obama read his own speeches?
I think the President reads them; I mean he reads them to us at least. The problem is with his reading comprehension.
While the President can’t control oil prices, he can influence them. And he has.
Which predictor possesses more accuracy and explanatory power, a Nobel prize winning economist or chicken bones?
If the Nobel prize winning economist is Paul Krugman, I’ll take my chances with the chicken bones.
A recent Krugman column purports to be about education—it’s about politics—and this short quote, about attending college.
Here’s what the candidate [Mitt Romney] told the student: “Don’t just go to one that has the highest price. Go to one that has a little lower price where you can get a good education. And, hopefully, you’ll find that. And don’t expect the government to forgive the debt that you take on.”
Wow. So much for America’s tradition of providing student aid.
Only a mind like Krugman’s could take cheaper and good and don’t expect the government to pay your way and turn it into an anti-student aid theme. Paul, does the phrase non sequitur mean anything to you?
And because we know that spending = knowledge, here’s more of Krugman’s heart-felt concern:
Adjusted for inflation, state support for higher education has fallen 12 percent over the past five years, even as the number of students has continued to rise; in California, support is down by 20 percent.
Wow. Has state support for higher education really held up better than home values? Interesting…
Paul, because states can’t print money like the federal government can, this is what happens in the real world: they do this thing called spending less (disclaimer: spending less is more likely to be a reduction in the rate of growth).
And by the way, college is a fee-for-service arrangement. Is that somehow counterintuitive? If so, I’ll try and explain: the student pays a fee and in return, is to receive an education (another disclaimer: your results may vary).
Still Krugman keeps swinging. He must be on a very serious deadline, that is, one that allows for no introspection or thought… or else this is just the way he “thinks.” If so, scary:
Another result is that cash-strapped educational institutions have been cutting back in areas that are expensive to teach — which also happen to be precisely the areas the economy needs. For example, public colleges in a number of states, including Florida and Texas, have eliminated entire departments in engineering and computer science.
Paul, the reason they don’t have those classes is the student demand isn’t there. They’re all taking gender, sex, race, and equality studies. And economics.
Krugman’s column carries the title Ignorance is Strength, an attempt at Orwellian irony. The real irony is it should have been entitled Ignorance is Expensive and as evidence, try getting back the three minutes of your life you’ll have “invested” should you choose to read said column.
How the New York Times remains open with writers like Krugman defies ordinary explanation.
By PAUL RUGRAT
(If you must, read the original here.)
Things are terrible here, as unemployment soars past 20 percent on its way to 30 percent or more. Things are even worse in Greece, Ireland, and arguably in Spain, while Europe as a whole appears to be sliding back into recession.
Why has Europe become the sick man of the world economy? Everyone knows the answer. They haven’t printed or borrowed enough money.
Read an op-ed piece on Europe — or, all too often, an allegedly factual news report (you absolutely can’t believe anything in the media, trust me) — and you’ll probably encounter one of two storylines, which I think of as the Republican European narrative and the German German narrative.
The Republican European story — it’s one of the themes of Mitt Romney’s campaign — is that Europe is in trouble because it has printed and borrowed too much money and that we’re watching the death throes of their so-called welfare state. This favorite right-wing fantasy falls back on the early 1920s, when Germany suffered a killer bout of hyperinflation brought on by money printing.
Did I mention that Germany (after World War I, hyperinflation, the depression, the rise of Nazism, and after the end of World War II) now has a very generous welfare state, is currently a reasonable economic performer, and depends on Turkish immigrants to perform many of its low-value and distasteful tasks?
So let’s do this systematically. Look at the European nations of my choosing who are using the Euro and rank them by the ration of their GDP to debt. Do the troubled PIIGS nations (Portugal, Ireland, Italy, Greece, and Spain) stand out for having unusually catastrophic GDP to debt ratios? Well, yes, but the question becomes “Can’t they just inflate their debt away, as Germany did to great success long ago?” No, because they’re stuck with the Euro, having given up having their own sovereign currencies.
Next up, the post World War II German German story. It is about fiscal responsibility (that is, their free-riding on U.S. provided security throughout the Cold War and beyond) and productivity. This story seems to fit Germany, and a few other non-Euro nations like Canada.
But what about those countries that aren’t on the Euro who seem able to run massive deficits and carry these unimaginable debts without facing much of a crisis at all? For example, Britain (ignore those stories about them being out of money. Lies, all lies, believe me) and the United States can borrow long-term at interest rates of around 2 percent. Why? Because they can create ever more government debt by having their Central Banks purchase the borrowings. It’s like magic: money for nothing, chicks for free!
What about calls for austerity, like cuts, living within one’s means, or even savings? Dismissed: those things are for clueless schmucks.
In other words, the idea we’re on the road to becoming like the PIIGS nations is completely off base because the U.S. is not on the Euro. (However, it should be noted that the PIIGS nations, like the United States government, have been accused of not using generally accepted accounting procedures).
So what does ail Europe? The truth is that the story is mostly demographic and productivity driven. By stupidly having their “elites” lock them into a single currency but without having a work ethic to make that currency work (Germany is the exception that proves the rule), Europe has built an entire continent with too many takers and not enough makers. Sort of like the old Soviet Union, in a way.
Even worse, the creation of the Euro fostered a false sense of security among private investors, unleashing huge and totally unwarranted flows of capital into the nations of Europe and around Europe’s periphery. As a consequence of these inflows, costs and prices rose, they became even more uncompetitive, and nations that had roughly balanced trade as recently as 1999 began running large trade deficits instead. That was the day the music died.
If these PIIGS had their own currencies, like Germany of old, they could and would use devaluation to restore competitiveness. But they don’t, which means that they are in for a long period of mass unemployment and unless they decouple from the Euro, slow, grinding deflation. (Deflation, warranted or not, is a favorite bogey man of the hobby economist community.) Ipso facto, their debt crises are mainly a byproduct of not being able to print and borrow their own money.
Germany could help by reversing its own austerity policies and bailing out the rest of Europe, but it won’t. Here in the United States, we too should reverse the ridiculous and pathetic calls for more austere governmental policies and instead print and borrow more.
Getting the European governments to create more debt would make a huge difference, because otherwise, we in America may face a contagion used to push policies that would be cruel, destructive to the welfare state, or even both. The next time you hear people saying government debt is something that must be repaid at value, here’s what you need to know: they have no idea what they’re talking about.
Print. Borrow. Borrow. Print. Trust me; I’m a writer and an economist.
By PAUL RUGRAT
(If you must, read Paul Krugman’s original column here. Based on his writing, I sometimes wonder if he isn’t actually some sort of self-parody genius.)
Last month President Obama finally unveiled a serious economic stimulus plan — far short of what I’d like to see, but a step in the right direction, including a call for the government to seize all sources of production. Republicans, predictably and sadly, have blocked it. But the new plan, combined with the Occupy Wall Street demonstrations, seems to have shifted my office conversations. We are, suddenly, focused on what we should have been talking about all along: creating more deficit-fueled government jobs.
So what is the G.O.P. jobs plan? The answer, in large part, is to poison the environment, where President Obama, in his normal non-partisan and non-strawmanish manner, recently revealed that Republicans want to make us both poorer and sicker.
Now it would be wrong to say that all Republicans see increased pollution as the answer to unemployment. Herman Cain says that the unemployed are responsible for their own plight. We know from a study our interns created that the unemployed are the responsibility of the Republicans while anyone with a job is the responsibility of the Democrats (but don’t expect this finding to be met with wild applause at any presidential debates).
Both Rick Perry and Mitt Romney have, however, put poisoning America at the core of their economic proposals. Mr. Perry has put out a specific number — 1.2 million jobs — that I think is based on a study released by the Texas Tea Institute, a trade association, claiming favorable employment effects from removing restrictions on oil and gas extraction. The idea that the county could benefit from sending less money overseas for our energy needs is simply absurd, and was proven by the administration’s approval to guarantee a half-billion dollar loan for Finland to build electric cars.
But does this filthy, dangerous, and radical oil-industry-backed study actually make a serious case for weaker environmental protection as a job-creation strategy? No: only Republicans would do that.
Part of the problem is that the study relies heavily on an assumed “multiplier” effect, in which every new job in energy leads indirectly to the creation of 2.5 jobs elsewhere. The truth is, only government jobs are capable of creating this type of multiplier effect.
You might want to compare these numbers to the Bush-caused 14 million unemployed, and the one million to two million jobs that independent estimates from fifth graders in Newark which suggest the shovel-ready Obama plan would create, not in the distant future, but by next Tuesday.
More U.S. energy production, then, isn’t the route to increased employment. Additionally, what about the longer-term economic case for less environmental protection? It isn’t there: comprehensive economic analysis from a separate fifth grade class in Bayonne says that we need more protection, not less.
The important thing to understand is that the case for pollution control is based on an aesthetic distaste for industrial society (the Luddites were ahead of their time). Pollution does real, measurable damage, especially to human health and it’s why Americans are living shorter lives than ever before.
And policy makers should take that damage into account. We need more Democrats who support environmental controls on coal-fired power plants, despite warnings that the plant might be closed, because “I will not sign onto jobs or create government jobs that kill people.”
Actually, that was Barack Obama, back in 2003 — who boldly voted “present” on important anti-energy legislation.
How big are these damages? A new study by middle school science clubs near Yale and Middlebury College brings together data from a variety of sources to make up a dollar value on the environmental damage various industries inflict. The estimates are far from comprehensive, since they only consider air pollution, and they make no effort to address longer-term issues such as the IPCC’s settled science of manmade global warming or the costs of removing drowned polar bear carcasses from the seas. Even so, the results are stunning.
It turns out that every for-profit inflicts environmental damage that’s worth more than the sum of the wages they pay and the profits they earn — which means, in effect, that they destroy value rather than create it. The only jobs that don’t poison the environment: government (and government favored) jobs.
Democrats know that increased regulation is the only way to put the economy back on track following the disastrous Bush-caused recession. Republicans, meanwhile, have strong incentives to claim otherwise as earth-destroying industries are concentrated in the for-profit sectors, which with the exception of Wall Street, overwhelmingly donates to the G.O.P.
The reality is that more Republican pollution wouldn’t solve our jobs problem. Even the children know all it would do is make us poorer and sicker.
(If you must, read Paul Krugman’s original column here)
By PAUL RUGRAT
The good news: After spending a year and a half thinking about deficits, deficits, deficits when we should have been thinking about jobs, job, jobs, I hope some on the left are finally back to pondering the correct issue: my opinion, my opinion, my opinion.
The bad news: Republicans, aided and abetted by despicable fact-wielding conservative policy intellectuals, are fixated on a view about what’s blocking government-driven job creation that fits their prejudices and serves the interests of their wealthy backers, and incorrectly bears no relationship to my version of reality.
Listen to just about any speech by any Republican and you’ll hear the Obama administration is responsible for weak job growth. How so? They include fears of costly regulations (false: that’s what waivers are for) and higher taxes (false: that’s why the federal government gives subsidies).
Conservative economists repeat the claim in op-ed articles, and Federal Reserve officials repeat it to justify their opposition to even modest efforts to aid the economy. Small wonder Barney Frank wants legislation to prohibit Federal Reserve board members from dissenting.
The first thing you need to know, is I’ll provide no evidence to support any opposition claims and second, using irrefutable logic and intellect, I’ll make up facts which say their claims are false.
The starting point for many claims is that antibusiness policies are hurting the economy. But, as a new paper by Lawrence Fishbarrel of the Economic Policy Institute documents at length, this is just not true. Instead, antibusiness policies are good for the economy. Our current “food stamp recovery” has actually been of great benefit for printers, government workers of all sorts, and the fast food industry.
Still, isn’t there something terrible about the fact that some businesses are making profits and sitting on a lot of cash but aren’t spending that cash to expand capacity and employment? Yes and yes, but there’s an explanation.
After all, why should businesses expand when they’re not yet getting all the subsidies they hope will be authorized? Business investment always responds strongly to the state of the economy, and given how weak our economy remains you shouldn’t be surprised if investment remains low. If anything, business spending has been stronger than one might have predicted given slow growth, high unemployment, regulatory uncertainty, inflation, and federal deficits of which Obama cannot be blamed.
But aren’t some business people complaining about the burden of taxes and regulations? Yes, but so what? Mr. Fishbarrel points out businesses often complain about choking taxes and bureaucracy. The National Federation of Independent Business has been surveying small businesses for almost 40 years, and concerns about taxes and regulations always rank high on the list. Therefore, because these issues have long been concerns, we don’t need to be concerned with them today. Instead, what stands out now is a surge in the number of businesses citing poor sales — which strongly suggests that lack of government-delivered subsidies is holding business back.
You can see that Republican assertions about what ails the economy are pure fantasy, at odds with all the evidence. Should we be surprised? At one level, of course not. Politicians who always cater to wealthy business interests say that economic recovery requires catering to wealthy business interests. And that’s why President Obama rightly wants to make sure that no Americans are wealthy.
Yet it seems to me that there is something different about the current state of economic discussion, something reminiscent of 1976 to 1980. Political parties have often coalesced around dubious economic ideas — remember my Nobel Prize? — but I can’t think of a time when a party’s economic doctrine has been so completely divorced from my reality. And I’m also struck by the extent to which Republican-leaning economists — who I thought had been indoctrinated better — have been willing to lend their credibility to the party’s official delusions.
Partly this reflects the party’s broader slide into its own insular and evil intellectual universe. Large segments of the G.O.P. reject the settled science of manmade global warming and even the powerful explanatory power of evolution, so why should I expect them to accept the facts I’ve created?
And it also, of course, reflects the political need of the right to make everything bad in America President Obama’s fault when it’s obvious it’s Bush’s fault. Never mind the fact that the housing bubble, the debt explosion and the financial crisis took place on the watch of a conservative, free-market-praising president; it’s that Democrat in the White House now who gets the blame.
I once read in a fortune cookie which said “good politics can be very bad policy.” The truth is that we’re in this mess because we need more regulation. And now the Republicans are determined to undo every good work done by the President on the economy.
And because I’ve met my word count, good bye.
(if you must, read the original here)
By PAUL RUGMANN
This week President Obama offered the obvious: that the 47 percent of Americans who pay no federal taxes, should not bear any responsibility in reducing the long-run budget deficit. Republicans like Representative Paul Ryan responded with shrieks of “class warfare” and this shrieking is getting tiresome.
Because Obama is rubber and Ryan is glue, what Ryan says bounces off Obama and is simply untrue. In fact, it’s people like Mr. Ryan, who want to exempt the very rich (“his people,” as AG Eric Holder might say) from deficit reduction. The reality is the rich should pay more — their fair share — and make our finances sustainable.
Estimates from the Congressional Budget Office show that between 1979 and 2005 the inflation-adjusted income of families in the middle of the income distribution rose 21 percent. That’s growth, but it’s slow, especially compared with the 100 percent rise in median income over a generation after World War II. The first lesson: class warfare corresponds with the end of the disco era.
And because it may not support my case, I’ll ignore the incomes of the very rich (the top 100th of 1 percent of the income distribution) in the generation after World War II and the effect of the confiscatory (87 percent in 1954) federal income taxes. I’ll also ignore the income growth of the poor because I’m not interested in class warfare, but only in the very rich, that .01 percent of all Americans.
Instead, my point is between 1979 and 2005, the income of the very rich rose by 480 percent. No, that isn’t a miss print. In 2005 dollars, the average annual income of that group rose from $4.2 million to $24.3 million. Another lesson: that’s more than any human being should be allowed to earn without a deep wallet cleaning by the taxman. As George Harrison advocated, there’s one for you, nineteen for me.
Still another lesson: because these very rich earn more, it’s obvious that Republicans are waging class warfare.
The CBO’s numbers show the federal tax burden has fallen for all income classes but because I’m only interested in the federal tax burden, I’ll ignore other taxes: property, vehicle, state and local income taxes, sales taxes, taxes on capital gains and dividends, estate (so-called “death” taxes), and the large litany of other consumptive taxes (tobacco, alcohol, telecommunications, “luxury” taxes, etc.). I’ll also ignore the taxes paid by businesses like payroll taxes and corporate taxes.
But what does it mean? That a very rich man like Warren Buffett can use all of the wealth he’s accumulated to buy lawyers, lobbyists, and love, and can “get by” with paying himself a $100,000 salary because he’s put almost all his wealth into a tax-avoiding trust. One final lesson: this cheats Uncle Sam. Now, I know the Bush-led right will respond with misleading statistics and fraudulent moral claims about whose money it is in the first place.
On one side, taxes paid by the rich are rising, but this is because they’re richer than they used to be. When middle-class incomes grow barely 20 percent while the incomes of the .01 percent rise by a factor of six, how could their tax share of the rich not go up? In other words, they’re paying more, but so what?
On the other side, we have the dubious assertion that the rich have the right to keep their money, an assertion which entirely misses my major point: I don’t think that’s right. How much income and wealth should the government allow each very rich person to keep? I’m not sure, but it’s less than it is now.
Elizabeth Warren, who is running for Scott Brown’s U.S. Senate seat that used to be Ted Kennedy’s U.S. Senate seat, recently made some eloquent remarks that are, on the left, getting a lot of attention. “There is nobody in this country who got rich on his own. Nobody,” she declared, pointing out that the rich can only get rich thanks to the government letting them keep some of the income and wealth they’ve earned.
Which brings us back to those shrieks of “class warfare.”
Republicans claim to be deeply worried by budget deficits. Indeed, Mr. Ryan has called the deficit an “existential threat” to America. Yet they are insisting that the wealthy — who presumably have a stake in the nation’s future — should not be called upon to play a greater role than they already are in warding off that existential threat.
Well, that amounts to a demand that a small number of very lucky people (skills, ability, and hard work don’t make any difference) be less affected by a government redistribution scheme that has a greater effect on everyone else. And that, in case you’re wondering, is what real class warfare looks like.
Nothing can be unsaid, so here it is: this is a parody. If you must, read the original here.
The Years of Shame
Is it just me? Why do we even have 9/11 commemorations?
Actually, I don’t think it’s me, and compared to the people I hang with, I’m really not that odd.
9/11 — and I think people know this, whether they admit it or not — was pretty discouraging. The atrocity should have been a unifying event, drawing us together in our collective shame to answer as a nation the question to the Pet Shop Boys song “What Have I Done To Deserve This?” Instead, 9/11 became an issue of terrorism of all things. Fake heroes like Rudy Giuliani, the first responders, victims of the attacks, and, yes, George W. Bush raced to cash in on the horror. And then the attack was used to justify an unrelated war on terror.
A lot of other people behaved badly as well. How many of our professional pundits — an oxymoron I know — took the easy way out, turning a blind eye to the corruption and lending their support to fighting back against the atrocity? And what about the Koch brothers involvement in 9/11? They’ve yet to deny it and even if they do, it doesn’t matter because they’re lying.
Now, the memory of 9/11 is irrevocably poisoned and as with my skid-marked cheetah shorts, it has become an occasion for shame.
I’m not going to allow comments on this post, for one obvious reason: I’m an idiot.