Paul Krugman

Have Decades of GOP Deregulation & Safety Net Gutting Made Depression the New Normal? (November 18, 2013)

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Nobel Prize-winning economist and New York Times columnist Paul Krugman is never afraid to ask the tough questions. Though his Times blog bears the name “The Conscience of Liberal,” the title is sort of an unfortunate misnomer. Krugman’s esteemed reputation was fostered by a decidedly nonpartisan, common sense approach to policy evaluation. It is more a sign of the times that his Keynesian monetary philosophy has earned him the liberal firebrand label. It’s not that Krugman has moved to the left over the course of his career. It’s more that politicians, the media and other economy wonks have veered so far rightward.

I also appreciate that Krugman is an agitator, failing to be complacent about the status quo while accepting situations as “the way things are.” Thank goodness because we live in an era of such whitewashed talking points, of corporate media ownership and blurred lines between church and state that feed each other symbiotically.  It’s a real challenge to stumble across any real, independent thinkers.

This week, Krugman is at it again, acting as the proverbial thorn in the side of the “deficit scolds” he sees it as his civic duty to expose. In an early Monday morning column entitled, “A Permanent Slump?,” he wonders, “what if the world we’ve been living in for the past five years is the new normal? What if depression-like conditions are on track to persist, not for another year or two, but for decades?”

If it is indeed the case that the anemic job and economic growth we’ve experienced in recent years (and, as Krugman rightly points out, well precedes the late-2008 housing and stock market collapses) is now standard operating procedure, we have to go further. We must ask ourselves what’s changed? Why does it seem the robust glory days of the American middle class are behind us, and why should we accept this as so?

Krugman begins with a rather empirical observation about the undistinguished trap of modern economics. He notes, “the evidence suggests that we have become an economy whose normal state is one of mild depression, whose brief episodes of prosperity occur only thanks to bubbles and unsustainable borrowing.”  Thus he ties the latter Bush II “boom years” not to genuine expansion, but rather the disingenuous fraud perpetrated by record household debt and criminally destructive mortgage lending.

Slower post-Boomer population growth, which has led to reduced demand for infrastructure, products and services is offered as an unavoidable accessory to the economy’s stagnation, as well as “persistent trade deficits, which emerged in the 1980s and since then have fluctuated but never gone away.”

All common sense as pertains to the “why?” and I’m sure that even most right-wing economists would find little with which to quibble thus far. But then Krugman transcends the talking point laziness afflicting most GOP think tanks and dares to ask “what?” we can do to upend this trap.

“Central bankers [including the Fed] need to stop talking about ‘exit strategies.’ Easy money should, and probably will, be with us for a very long time. This, in turn, means we can forget all those scare stories about government debt…if our economy has a persistent tendency toward depression, we’re going to be living under the looking-glass rules of depression economics — in which virtue is vice and prudence is folly, in which attempts to save more (including attempts to reduce budget deficits) make everyone worse off — for a long time.”

And this is where he goes in for the kill vis a vis Republican policymakers and the cowardly, election cycle-focused Democrats afraid to contradict them:

“I know that many people just hate this kind of talk. It offends their sense of rightness, indeed their sense of morality. Economics is supposed to be about making hard choices (at other people’s expense, naturally). It’s not supposed to be about persuading people to spend more.”

Ironically, the “spend more” doctrine was championed by George W. Bush after the atrocities of 9/11, rightfully so, in order to stave off a panic-induced economic contraction.  The then-President offered up tax rebates and broadly encouraged Americans to use the funds to stimulate the economy, rather than save or pay down household debt. I offer this example not to champion the overall deficit-busting proclivities of Bush, but rather to hearken back to a time, just a little over a decade ago, when Republican economic policy went further than robbing the lower and middle classes to give gifts to the rich, all while performing Jedi mind tricks in an effort to convince the struggling that these actions were in their best interest.

For years now, the modern GOP has tried to leverage the Federal deficit, combined with “these are unusual times” rhetoric to try to wrench the social safety net out from under us, and delay job-creation spending to provide relief to the long-term unemployed. Only, as Paul Krugman demonstrates, these are not unusual times and current policy, if left unchecked, will only worsen the decline of hardworking American prospects.

That’s exactly what the one percent is hoping.  If we let these tactics continue to succeed as they have, shame on all of us.

Paul Krugman’s Stubborn Mastery of Facts Continues to Undermine G.O.P Policy (September 9, 2013)

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Every now and then a pundit publishes a piece of writing so simple, so right on, that it’s necessary to force a momentary pivot away from the gaping maw of the 24/7 news cycle to celebrate it. It’s one thing to share a link on Facebook or retweet a story, but I have to wonder if those sorts of essentially mindless activities have supplanted the demand of critical thought. And as a busy person who is as often as guilty of the “read, digest and move onto the next thing” as anyone else, I’m going to practice what I preach this week.

Because friends, Paul Krugman’s Monday morning column, “The Wonk Gap,” subtitled, “What the G.O.P. doesn’t know can hurt us,” is really what it’s all about.  I have long admired The New York Times’ Nobel Prize-winning economist for his approachable, accessible good sense. That approval went to another level in the fallout from the late 2008 financial collapse and the Great Recession that we seem unable to fully shake. While a large assortment of Krugman’s colleagues began to issue battle cries railing against the Federal deficit and debt, when it was clear that our biggest problem was the dual devastations of joblessness and demolished home value and equity, Krugman refused to throw in with popular opinion.

The result is that while the often-heartless austerity team has been proven wrong time and again (there’s zero examples of cutting a nation’s way to prosperity – see Greece, Spain, etc.), Krugman’s Keynesian philosophy has been vindicated over and over. He labeled the 2009 stimulus package too small and argued that a larger plan would pose no great threat to our nation’s long-term debt structure. With a U6 unemployment ratestill hovering near 14 percent, a measure that includes people seeking full-time employment, as well as those forced into part-time positions out of basic necessity, the jobs situation hasn’t improved much in the last four years.  Meanwhile factcheck.orghighlights the obfuscations of the GOP’s favorite debt policy fraud, Paul Ryan, by concluding “Ryan’s chart ignores $2 trillion in deficit reduction and compounds that exaggeration by projecting the inflated deficit figures out for many decades in the future.”

If the data fails to support the G.O.P. platform and the liberalism of economists like Paul Krugman has been proven to encompass solid policy as well as human empathy (imagine!), why then have the failed ideas of the modern Republican Party been so difficult to banish from our discourse? Let’s go to the man himself for a possible answer:

“[A sizeable portion of today’s Republican leaders] are inadvertently illustrating the widening ‘wonk gap’ — the G.O.P.’s near-complete lack of expertise on anything substantive. Health care is the most prominent example, but the dumbing down extends across the spectrum, from budget issues to national security to poll analysis. Remember, Mitt Romney and much of his party went into Election Day expecting victory.”

Moreover by tuning out any creditable sources that conflict with the party’s wish fulfillment, Krugman writes, “conservative ‘experts’ are creating false impressions about public opinion…Modern conservatism has become a sort of cult, very much given to conspiracy theorizing when confronted with inconvenient facts. Liberal policies were supposed to cause hyperinflation, so low measured inflation must reflect statistical fraud; the threat of climate change implies the need for public action, so global warming must be a gigantic scientific hoax. Oh, and Mitt Romney would have won if only he had been a real conservative.”

I experience a genuine surge of adrenaline, accompanied by an increased pulse rate, flushed cheeks and giddiness when I read truth manifestos like this one.  Whereas the majority of conservative pundits have to contort themselves to make anything resembling a logical point, Krugman’s very success is located in the simplicity of his arguments. He is unafraid to continuously point out, very respectfully, that the emperor is wearing no clothes.

I respect Krugman’s apparently genuine belief that there will be a time when facts win, when the people of this Great Union will pause to wonder why they keep getting poorer, availing themselves of less and less opportunity anytime the modern Republican party controls an arm of the government. More war, less jobs and the removal of the social safety net even as the top one percent and the corporate interests they represent gobble up remaining resources. There are certain weeks I feel almost too demoralized, too exhausted to continue raising my voice in an attempt to counter the efforts at middle and lower class suppression I see everywhere I look. It is in part the stubbornness of experts like Krugman, with too many credentials to ignore, that inspires me to continue. We can’t let today’s G.O.P. destroy this great democracy. If Krugman can find new and interesting ways to spread a staunchly consistent message, then so can I.

Paul Krugman Rightfully Calls The Fed Out for Bowing to Political Pressure (June 24, 2013)

Becky SarwateLeave a comment

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New York Times columnist and Nobel Prize-winning economist Paul Krugman published an early week column entitled, “Et Tu, Bernanke?” The Latin allusion references the literary accusation of traitorousness, uttered by fallen Roman dictator Julius Caesar to his friend and fellow statesman Marcus Brutus at the moment of his assassination. A piece of dialogue from the pen of legendary dramatist William Shakespeare, the quote lives on because of its pain and simplicity. There are few wounds that rival the discovery of betrayal from people and institutions that we have taken for granted as acting in our best interests.

Krugman, a longtime opponent of the failed austerity plans implemented across Europe and the United States, has been a powerful, if lonely voice speaking against fiscal pain that only increases the torment of those who most need a lifeline. As Krugman has written many times in a variety of ways, the Great Recession, in large degree, is not the result of profligate financial behavior from ordinary citizens. It is instead a unique challenge presented by the runaway malfeasance of “too big to fail” banks, mortgage brokers and lenders and a host of other big businesses that have bounced back in while those they fleeced bore a double penalty: the taxpayer burden of resuscitating these institutions even as jobs, homes and retirement accounts went the way of the Edsel.

Krugman makes clear that these setbacks at the individual household level are still a long way from resolved. In fact, “The first thing you need to understand is how far we remain from full employment four years after the official end of the 2007-9 recession. It’s true that measured unemployment is down — but that mainly reflects a decline in the number of people actively seeking jobs, rather than an increase in job availability.” Simply put, almost five full years after the late-2008 market crash that sent the U.S. economy into a tailspin, many former members of the vibrant middle and working classes that made this country the envy of the world, have thrown in the towel.

The average American’s stoic ability to endure great suffering without the benefit of lobbyist dollars and infrastructure is not a reason to letup on policy making that could and should restore middle class dignity and security. Unfortunately, the very same folks who are all for corporate welfare stand firmly against “freedom killing” efforts to relieve the common man’s burden. Any talk of a jobs bill, an extension of unemployment benefits or Medicaid coverage is greeted with right wing howls against the “nanny state,” the threat of longterm deficits, etc.

But as Krugman points out, the Federal Reserve, should be immune to the disingenuous pressure of this chatter. A supposedly independent body with a three-prong mission (maximum employment, stable prices, and moderate long-term interest rates), the Fed suddenly seems as willing as the bulk of the GOP to abandon the first charge of its raison d’etre. And the columnist further suggests that the Fed never went far enough to aid the unemployed American in the first place: “You can argue — and I would — that the Fed’s activism, while welcome, isn’t enough, and that it should be doing even more. But at least it didn’t lose sight of what’s really important. Until now.”

Krugman is referring to Fed Chairman Ben Bernanke’s highly anticipated speech late last week in which, disappointingly, the leader indicated an imminent reduction in “stimulus” measures in favor of a return to normal monetary policy. The problem with this plan, as I have already highlighted, is that the nation remains dreadfully far away from that vaunted “maximum employment” goal. And the suggested reason for the Fed’s exhausted disinterest is more than slightly troubling.

“In any case, my guess is that what’s really happening is a bit different: Fed officials are, consciously or not, responding to political pressure. After all, ever since the Fed began its policy of aggressive monetary stimulus, it has faced angry accusations from the right that it is ‘debasing’ the dollar and setting the stage for high inflation — accusations that haven’t been retracted even though the dollar has remained strong and inflation has remained low. It’s hard to avoid the suspicion that Fed officials, worn down by the constant attacks, have been looking for a reason to slacken their efforts, and have seized on slightly better economic news as an excuse.”

We all know from experience that the squeakiest wheel tends to get the grease but that trope implies that the wheels all need attention in the first place. Why would a group that has been proven so wrong for so long – the conservative economists and think tanks – continue to have such an influence on supposedly nonpartisan policy making? It is more than frustrating and disheartening. It’s dangerous. It’s disloyal, even.

The Republican Party Resolves to Destroy Middle Class Once and For All in 2013 (December 27, 2012)

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Paul Krugman, the famed economist and Op-Ed columnist forThe New York Times, has, in recent years, coined quite a few clever nicknames for hypocritical fiscal conservatives. And in referring to fiscal conservatives, he does not write of the dying breed of Republicans like Bob Dole, the former Senator, Presidential candidate and disabled war veteran who was humiliated in public by his own party earlier this month.

Dole made a rare appearance in the Senate chamber several weeks ago in an attempt to promote passage of a seemingly benign U.N. Treaty, the Convention on the Rights of Persons with Disabilities. Designed to improve access and mobility for the disabled across the globe, the treaty met with defeat from the crazed likes of political also-ran Rick Santorum, who decried the treaty on the catch-all Tea Party grounds that it posed a “direct assault on us and our family!”

It’s enough to make you wonder if Dole asked Santa for a time machine this Christmas so he could venture back to 1996 and fall off the stage at that rally directly onto Santorum’s delusional, useless noggin. It’s frightening to consider that in 2013, nearly 20 years after his failed bid for the Oval Office, Dole would be considered an unelectable liberal radical within his party’s ranks.

But I digress. When Paul Krugman writes of “deficit scolds,” “bond vigilantes,” and my personal favorite, “prophets of fiscal doom,” he refers to true charlatans like Congressman Paul Ryan, who wrote former President George W. Bush a budget-busting blank check for eight years, rubber stamping every unaffordable idea of which Dubya could dream, before suddenly putting on his serious monetary face the minute a Democratic President took the oath of office.

For months, nay years, we have been hearing from Ryan and his ilk that failure to address our long term budget deficits presents dire consequences, an imminent collapse of American security and respectability at a minimum if not an outright nullification of our entire way of life. As we moved ever closer to the edge of the fiscal cliff, the caterwauling grew louder…until it became clear that there’s just no way that President Obama is going to go against public opinion and leave the Bush-era tax cuts intact wholesale.

And just like that, the old fiscal cliff doesn’t seem so scary to GOP leadership. After all, when you come down to it, it’s not Ryan, Santorum or the one percent who will end up hurting if Congress blows past its 2012 deadline, right?

Those who booted up their computers this week to catch up on post-holiday news were greeted with headlines like this: “Senators Returning With Little Urgency as Fiscal Clock Ticks.” Writers Jonathan Weisman and Jennifer Steinhauer report “With just five days left to make a deal, President Obama and members of the Senate were set to return to Washington on Thursday with no clear path out of their fiscal morass even as the Treasury Department warned that the government will soon be unable to pay its bills unless Congress acts.”

Why the sudden move away from Republican baying about the dangers of falling over the fiscal cliff? Another writer for The Times, Nelson D. Schwartz, offers a possible answer: “Some hits — like a two percentage point increase in payroll taxes and the end of unemployment benefits for more than two million jobless Americans — would be felt right away. But other effects, like tens of billions in automatic spending cuts, to include both military and other programs, would be spread out between now and the end of the 2013 fiscal year in September.”

Why worry about what happens at the end of the year, in other words, when it is merely the unemployed and the working middle class who will take an immediate hit to their financial solvency? And lest anyone think the GOP is really troubled by the “automatic spending cuts,” it is best to keep in mind that the word “military” is the only one that gets their attention.

By now I really ought to be used to this sort of disingenuous skullduggery, the seamlessness with which members of the GOP establishment will hold the ENTIRE NATION and its future hostage in order to save some millionaires/billionaires a few bucks, but I must confess, I am not. I urge the mass media to give these tricks their proper title – treason.

Mitt Romney Tells America His Finances are None of Our Damned Business (July 10, 2012)

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On Monday, New York Times Op-Ed columnist and economic guru Paul Krugman observed that “the contrast between George Romney and his son Mitt — a contrast both in their business careers and in their willingness to come clean about their financial affairs — dramatically illustrates how America has changed.”

George Romney unsuccessfully ran for President in 1968. At that time, the candidate got in front of questions related to his finances by releasing 12 full years of tax returns, a demonstration of transparency that ought to make those of us in 2012 nostalgic for a simpler time when the people who sought our vote actually treated us like adults. Instead this year, we have another Romney – Mittens – with a far more convoluted financial back story involving blind trusts, mysterious portfolios and offshore accounts, seeking to spoon feed the voting public a bunch of bull. Apparently if he tells America that “there’s nothing hidden there,” we should all act like the hypersensitized lemmings he believes us to be and take his word for it.

Romney has adopted the typical tactic employed by candidates who wish to dodge questions, calling repeated requests for information a mere attempt to distract voters.

Mittens, come on now: how could your refusal to come clean possibly be none of the voting public’s business? You are asking us to entrust you with our very nation and all its resources: military, financial, social and otherwise. Do we need to explain to you that in order to make the best judgment of your potential for stewardship, we need to understand your personal history in depth? If this is something your father understood, why can’t you?

And while we’re on the topic: can we talk about that blind trust? According to a report this morning from Yahoo! News, the “Republican nominee insisted he has little to do with his personal investments because they are managed by a blind trust.

‘I don’t manage them,’ Romney said. ‘I don’t even know where they are.’”

Can I see a show of hands from folks who find this credible? A man who has built a business empire and a Presidential campaign predicated upon his financial savvy, a quality that he claims is powerful enough to warrant the unseating of the highly-competent current Commander-in-Chief, would just love to have it both ways. He is both a wizard and a naive foundling, witlessly trusting those whose job it is to count his millions.

The Yahoo! Report goes on: “Responding to reports that some of his investments have been overseas, Romney insisted his ‘trustee follows all U.S. Laws.’ He added: ‘All the taxes are paid, as appropriate. All of them have been reported to the government. There’s nothing hidden there.’”

The double talk here is literally mind-bending. He is ignorant of his investments, can’t understand why we’re even interested, but rest assured, he hasn’t dodged any taxes. How do we know this? Because he says so. Stop it Mittens. Enough of this. Be a man and release ALL of your financial records and let us make decisions for ourselves, as we have been politically trained to do since we were old enough to vote. No one believes what you’re saying anyway – even the members of your own party. The best way to convince your constituents that you are not hiding anything is to stop hiding. It’s an idea that your father comprehended.

But what else should we expect from a man who has changed his tune on just about every issue before him? The Romney cynicism appears to know no limits.