Paul Krugman is a jackass (2 Viewers)

[Andy Dufresne]

Krugman is like the theoretical physicist that keeps repeating that he could teleport objects if only he could harness the energy of a supernova.

Even I could solve most of the world's economic problems if I had eleventy billion dollars.

 

[Captain Quinoa]

Krugman

well this endorsement just about says it all.p.s., we're nowhere near 1938 yet in the cycle of history repeating itself, but maybe we can fire up New Deal II: Electric Boogaloo and speed this depression process along..

 

[Bottomfeeder Sports]

Krugman

well this endorsement just about says it all.p.s., we're nowhere near 1938 yet in the cycle of history repeating itself, but maybe we can fire up New Deal II: Electric Boogaloo and speed this depression process along..

So we are still in 1931?

 

[Soonerman]

1938 in 2010By PAUL KRUGMANPublished: September 5, 2010 Here’s the situation: The U.S. economy has been crippled by a financial crisis. The president’s policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections.The president in question is Franklin Delano Roosevelt; the year is 1938. Within a few years, of course, the Great Depression was over. But it’s both instructive and discouraging to look at the state of America circa 1938 — instructive because the nature of the recovery that followed refutes the arguments dominating today’s public debate, discouraging because it’s hard to see anything like the miracle of the 1940s happening again.Now, we weren’t supposed to find ourselves replaying the late 1930s. President Obama’s economists promised not to repeat the mistakes of 1937, when F.D.R. pulled back fiscal stimulus too soon. But by making his program too small and too short-lived, Mr. Obama did just that: the stimulus raised growth while it lasted, but it made only a small dent in unemployment — and now it’s fading out.And just as some of us feared, the inadequacy of the administration’s initial economic plan has landed it — and the nation — in a political trap. More stimulus is desperately needed, but in the public’s eyes the failure of the initial program to deliver a convincing recovery has discredited government action to create jobs.In short, welcome to 1938.The story of 1937, of F.D.R.’s disastrous decision to heed those who said that it was time to slash the deficit, is well known. What’s less well known is the extent to which the public drew the wrong conclusions from the recession that followed: far from calling for a resumption of New Deal programs, voters lost faith in fiscal expansion.Consider Gallup polling from March 1938. Asked whether government spending should be increased to fight the slump, 63 percent of those polled said no. Asked whether it would be better to increase spending or to cut business taxes, only 15 percent favored spending; 63 percent favored tax cuts. And the 1938 election was a disaster for the Democrats, who lost 70 seats in the House and seven in the Senate.Then came the war.From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.The economic moral is clear: when the economy is deeply depressed, the usual rules don’t apply. Austerity is self-defeating: when everyone tries to pay down debt at the same time, the result is depression and deflation, and debt problems grow even worse. And conversely, it is possible — indeed, necessary — for the nation as a whole to spend its way out of debt: a temporary surge of deficit spending, on a sufficient scale, can cure problems brought on by past excesses.But the story of 1938 also shows how hard it is to apply these insights. Even under F.D.R., there was never the political will to do what was needed to end the Great Depression; its eventual resolution came essentially by accident.I had hoped that we would do better this time. But it turns out that politicians and economists alike have spent decades unlearning the lessons of the 1930s, and are determined to repeat all the old mistakes. And it’s slightly sickening to realize that the big winners in the midterm elections are likely to be the very people who first got us into this mess, then did everything in their power to block action to get us out.But always remember: this slump can be cured. All it will take is a little bit of intellectual clarity, and a lot of political will. Here’s hoping we find those virtues in the not too distant future.

Worst column ever. His descent into unmitigated hackery continues at breathtaking speed.

 

[Vultan]

1938 in 2010

By PAUL KRUGMAN

Published: September 5, 2010

Here’s the situation: The U.S. economy has been crippled by a financial crisis. The president’s policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections.

The president in question is Franklin Delano Roosevelt; the year is 1938. Within a few years, of course, the Great Depression was over. But it’s both instructive and discouraging to look at the state of America circa 1938 — instructive because the nature of the recovery that followed refutes the arguments dominating today’s public debate, discouraging because it’s hard to see anything like the miracle of the 1940s happening again.

Now, we weren’t supposed to find ourselves replaying the late 1930s. President Obama’s economists promised not to repeat the mistakes of 1937, when F.D.R. pulled back fiscal stimulus too soon. But by making his program too small and too short-lived, Mr. Obama did just that: the stimulus raised growth while it lasted, but it made only a small dent in unemployment — and now it’s fading out.

And just as some of us feared, the inadequacy of the administration’s initial economic plan has landed it — and the nation — in a political trap. More stimulus is desperately needed, but in the public’s eyes the failure of the initial program to deliver a convincing recovery has discredited government action to create jobs.

In short, welcome to 1938.

The story of 1937, of F.D.R.’s disastrous decision to heed those who said that it was time to slash the deficit, is well known. What’s less well known is the extent to which the public drew the wrong conclusions from the recession that followed: far from calling for a resumption of New Deal programs, voters lost faith in fiscal expansion.

Consider Gallup polling from March 1938. Asked whether government spending should be increased to fight the slump, 63 percent of those polled said no. Asked whether it would be better to increase spending or to cut business taxes, only 15 percent favored spending; 63 percent favored tax cuts. And the 1938 election was a disaster for the Democrats, who lost 70 seats in the House and seven in the Senate.

Then came the war.

From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.

Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.

But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.

The economic moral is clear: when the economy is deeply depressed, the usual rules don’t apply. Austerity is self-defeating: when everyone tries to pay down debt at the same time, the result is depression and deflation, and debt problems grow even worse. And conversely, it is possible — indeed, necessary — for the nation as a whole to spend its way out of debt: a temporary surge of deficit spending, on a sufficient scale, can cure problems brought on by past excesses.

But the story of 1938 also shows how hard it is to apply these insights. Even under F.D.R., there was never the political will to do what was needed to end the Great Depression; its eventual resolution came essentially by accident.

I had hoped that we would do better this time. But it turns out that politicians and economists alike have spent decades unlearning the lessons of the 1930s, and are determined to repeat all the old mistakes. And it’s slightly sickening to realize that the big winners in the midterm elections are likely to be the very people who first got us into this mess, then did everything in their power to block action to get us out.

But always remember: this slump can be cured. All it will take is a little bit of intellectual clarity, and a lot of political will. Here’s hoping we find those virtues in the not too distant future.

This guy eats Krugman's lunch on a regular basis...Seven Years Off

The first problem with Paul Krugman's hypothesis is that 2010 is not 1938, it is 1931. This should be obvious because at no point in the last two years has anyone except me, Robert Prechter, Mike Shedlock, Karl Denninger and a few other economic heretics admitted that we have been in a depression for months now.

Here’s the situation: The U.S. economy has been crippled by a financial crisis. The president’s policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections.

The president in question is Franklin Delano Roosevelt; the year is 1938....

From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.

Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.

But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.

The second problem here is that Krugman is making a standard post hoc ergo propter hoc mistake. While the US did engage in a massive burst of unrestrained federal spending, it was not the spending that produced the postwar prosperity except in that it paid for the munitions and manpower that was used to destroy every industrialized economy that was not already destroyed by the Germans or the Japanese.And the third problem, of course, is that the Keynesian notion that government spending is economic growth, let alone is capable of creating growth that is a multiple of the spending, is both logically and empirically false. Remember, no one even began to recognize that the Great Depression was a great depression until the end of 1931.

http://voxday.blogspot.com/

 

[Captain Quinoa]

Krugman

well this endorsement just about says it all.p.s., we're nowhere near 1938 yet in the cycle of history repeating itself, but maybe we can fire up New Deal II: Electric Boogaloo and speed this depression process along..

So we are still in 1931?

apparently

 

[tommyGunZ]

1938 in 2010

By PAUL KRUGMAN

Published: September 5, 2010

Here’s the situation: The U.S. economy has been crippled by a financial crisis. The president’s policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections.

The president in question is Franklin Delano Roosevelt; the year is 1938. Within a few years, of course, the Great Depression was over. But it’s both instructive and discouraging to look at the state of America circa 1938 — instructive because the nature of the recovery that followed refutes the arguments dominating today’s public debate, discouraging because it’s hard to see anything like the miracle of the 1940s happening again.

Now, we weren’t supposed to find ourselves replaying the late 1930s. President Obama’s economists promised not to repeat the mistakes of 1937, when F.D.R. pulled back fiscal stimulus too soon. But by making his program too small and too short-lived, Mr. Obama did just that: the stimulus raised growth while it lasted, but it made only a small dent in unemployment — and now it’s fading out.

And just as some of us feared, the inadequacy of the administration’s initial economic plan has landed it — and the nation — in a political trap. More stimulus is desperately needed, but in the public’s eyes the failure of the initial program to deliver a convincing recovery has discredited government action to create jobs.

In short, welcome to 1938.

The story of 1937, of F.D.R.’s disastrous decision to heed those who said that it was time to slash the deficit, is well known. What’s less well known is the extent to which the public drew the wrong conclusions from the recession that followed: far from calling for a resumption of New Deal programs, voters lost faith in fiscal expansion.

Consider Gallup polling from March 1938. Asked whether government spending should be increased to fight the slump, 63 percent of those polled said no. Asked whether it would be better to increase spending or to cut business taxes, only 15 percent favored spending; 63 percent favored tax cuts. And the 1938 election was a disaster for the Democrats, who lost 70 seats in the House and seven in the Senate.

Then came the war.

From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.

Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.

But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.

The economic moral is clear: when the economy is deeply depressed, the usual rules don’t apply. Austerity is self-defeating: when everyone tries to pay down debt at the same time, the result is depression and deflation, and debt problems grow even worse. And conversely, it is possible — indeed, necessary — for the nation as a whole to spend its way out of debt: a temporary surge of deficit spending, on a sufficient scale, can cure problems brought on by past excesses.

But the story of 1938 also shows how hard it is to apply these insights. Even under F.D.R., there was never the political will to do what was needed to end the Great Depression; its eventual resolution came essentially by accident.

I had hoped that we would do better this time. But it turns out that politicians and economists alike have spent decades unlearning the lessons of the 1930s, and are determined to repeat all the old mistakes. And it’s slightly sickening to realize that the big winners in the midterm elections are likely to be the very people who first got us into this mess, then did everything in their power to block action to get us out.

But always remember: this slump can be cured. All it will take is a little bit of intellectual clarity, and a lot of political will. Here’s hoping we find those virtues in the not too distant future.

This guy eats Krugman's lunch on a regular basis...Seven Years Off

The first problem with Paul Krugman's hypothesis is that 2010 is not 1938, it is 1931. This should be obvious because at no point in the last two years has anyone except me, Robert Prechter, Mike Shedlock, Karl Denninger and a few other economic heretics admitted that we have been in a depression for months now.

Here’s the situation: The U.S. economy has been crippled by a financial crisis. The president’s policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections.

The president in question is Franklin Delano Roosevelt; the year is 1938....

From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.

Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.

But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.

The second problem here is that Krugman is making a standard post hoc ergo propter hoc mistake. While the US did engage in a massive burst of unrestrained federal spending, it was not the spending that produced the postwar prosperity except in that it paid for the munitions and manpower that was used to destroy every industrialized economy that was not already destroyed by the Germans or the Japanese.And the third problem, of course, is that the Keynesian notion that government spending is economic growth, let alone is capable of creating growth that is a multiple of the spending, is both logically and empirically false. Remember, no one even began to recognize that the Great Depression was a great depression until the end of 1931.

http://voxday.blogspot.com/

Beale's a smart dude, but he's in way over his head talking economics with Krugman.

 

[dickey moe]

1938 in 2010By PAUL KRUGMANPublished: September 5, 2010 And it’s slightly sickening to realize that the big winners in the midterm elections are likely to be the very people who first got us into this mess, then did everything in their power to block action to get us out.

That's weird -- I thought the leftists were supposed to be losing elections this November.

 

[Vultan]

This guy eats Krugman's lunch on a regular basis...

Seven Years Off

The first problem with Paul Krugman's hypothesis is that 2010 is not 1938, it is 1931. This should be obvious because at no point in the last two years has anyone except me, Robert Prechter, Mike Shedlock, Karl Denninger and a few other economic heretics admitted that we have been in a depression for months now.

Here’s the situation: The U.S. economy has been crippled by a financial crisis. The president’s policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections.

The president in question is Franklin Delano Roosevelt; the year is 1938....

From an economic point of view World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Over the course of the war the federal government borrowed an amount equal to roughly twice the value of G.D.P. in 1940 — the equivalent of roughly $30 trillion today.

Had anyone proposed spending even a fraction that much before the war, people would have said the same things they’re saying today. They would have warned about crushing debt and runaway inflation. They would also have said, rightly, that the Depression was in large part caused by excess debt — and then have declared that it was impossible to fix this problem by issuing even more debt.

But guess what? Deficit spending created an economic boom — and the boom laid the foundation for long-run prosperity. Overall debt in the economy — public plus private — actually fell as a percentage of G.D.P., thanks to economic growth and, yes, some inflation, which reduced the real value of outstanding debts. And after the war, thanks to the improved financial position of the private sector, the economy was able to thrive without continuing deficits.

The second problem here is that Krugman is making a standard post hoc ergo propter hoc mistake. While the US did engage in a massive burst of unrestrained federal spending, it was not the spending that produced the postwar prosperity except in that it paid for the munitions and manpower that was used to destroy every industrialized economy that was not already destroyed by the Germans or the Japanese.And the third problem, of course, is that the Keynesian notion that government spending is economic growth, let alone is capable of creating growth that is a multiple of the spending, is both logically and empirically false. Remember, no one even began to recognize that the Great Depression was a great depression until the end of 1931.

http://voxday.blogspot.com/

Beale's a smart dude, but he's in way over his head talking economics with Krugman.

http://www.amazon.com/Return-Great-Depress...4217&sr=8-1

 

[Vultan]

If Only It Were World War II Again?

September 6, 2010 3:50 P.M. By Victor Davis Hanson

Paul Krugman has written yet another piece warning us that we have not borrowed enough (after we took his advice to borrow massively and got little results). We are facing a 1938-like downturn, he says, and so we need to borrow massively as if we were in something like World War II — the assumption being that, in the 1940s, the economy was jump-started by the war, got into high gear, and created the sort of revenues that make massive debt manageable.

I’m not an economist, but as an historian, I consider this an abject misreading of the postwar period, at least through the early 1950s. The war years were characterized by frenetic hyperactivity: Americans worked long hours, women were brought into the work force, new towns and manufacturing centers sprang up, and people gave up necessities — all on the assurance that this furious pace and consumer scarcity would be short-lived.

As WWII ended and the clean-up began, there was an enormous amount of pent-up global demand for goods. Given the wreckage in Europe, Japan, and Russia and the underdevelopment of India, Asia, and South America, we were about the only ones with the industrial and commercial wherewithal to supply the world rebound — often receiving cheap oil, gas, minerals, and interest in exchange, which supplemented our own vast supplies of comparatively cheap and easily recoverable resources. Nor should we forget the psychological element: Americans, after winning two wars, were enormously confident about their newfound international stature and influence.

At home, four years of consumer deprivation during the war and the weak demography of the 1930s had combined to create huge demand, all while society was increasingly leaving the farm for good and becoming suburbanized. The result was that in the late 1940s and 1950s, the birth rate soared and consumers enthusiastically made first-time purchases of washers, dryers, fridges, cars, etc. Thus, the American economy grew by leaps and bounds.

Today’s situation is not comparable: We are in hock to foreign creditors for trillions and have not been a net creditor since the 1980s. A China, Brazil, South Korea, Taiwan, or India is as or more likely to supply recovering demand for food, steel, or electronics. One can read Krugman-like arguments in Greek newspapers today — that only more massive borrowing can stimulate Greek demand, provide jobs, and grow Greece out of its recession. As if present-day deficits and aggregate debt with soon-to-be-rising interest payments don’t really matter.

http://www.nationalreview.com/corner/24573...or-davis-hanson

 

[pantagrapher]

If Only It Were World War II Again?September 6, 2010 3:50 P.M. By Victor Davis Hanson Paul Krugman has written yet another piece warning us that we have not borrowed enough (after we took his advice to borrow massively and got little results).

Wrong right off the bat. "We" did not take Krugman's advice. He said at the outset that the stimulus was too small and his predictions regarding its effectiveness have largely played out.

 

[pantagrapher]

InfrastructureSome bleary-eyed thoughts from Japan on the reported administration proposal for $50 billion in new spending:1. It’s a good idea2. It’s much too small3. It won’t pass anyway — which makes you wonder why the administration didn’t propose a bigger plan, so as to at least make the point that the other party is standing in the way of much needed repair to our roads, ports, sewers, and more– not to mention creating jobs. Once again, they’re striking right at the capillaries.Beyond all that, the new initiative is a chance for me to air one of my pet peeves: the stupidity of the claim, which you hear all the time — and you’ll hear again now — that it’s always better to provide stimulus in the form of tax cuts, because individuals know better than the government what to do with their money.Why is this claim stupid? Because Econ 101 tells us that there are some things the government must provide, namely public goods whose benefits can’t be internalized by the market.So suppose we’re going to put $50 billion of resources that would otherwise be idle to work. Is it better to use them to produce public goods like improved roads, or private goods like more consumer durables? That’s not at all obvious — and anyone who tells you that basic economics settles the question, that is says that devoting more resources to production of private goods is better, doesn’t understand Econ 101.And there’s a pretty good argument to be made that we are, in fact, starved for public goods in this country, so that it would actually be a good idea to shift some resources to public goods production even if we were at full employment; in that case, we should definitely give priority to public goods when trying to put unemployed resources to work.Anyway, it’s all academic right now. My response to the administration plan, at least as best as I can respond given a massive case of jet lag, is a big eh.

 

[Andy Dufresne]

"Infrastructure" is the new "do it for the children".

 

[pantagrapher]

"Infrastructure" is the new "do it for the children".

Worst use of the "_____ is the new _____" construct ever.

 

[Andy Dufresne]

"Infrastructure" is the new "do it for the children".

Worst use of the "_____ is the new _____" construct ever.

No it's not. The mantra now is that as long as the money is spent on infrastructure then it's good money spent. I've seen numerous perfectly good roads being repaved here in Minneapolis. Sure they're providing jobs, temporary as they may be. But are they really improving the infrastructure? Is it adding to or will it add to the wealth of our nation? When do we start tearing down buildings so we can build new ones?

 

[Desert_Power]

"Infrastructure" is the new "do it for the children".

Worst use of the "_____ is the new _____" construct ever.

No it's not. The mantra now is that as long as the money is spent on infrastructure then it's good money spent. I've seen numerous perfectly good roads being repaved here in Minneapolis. Sure they're providing jobs, temporary as they may be. But are they really improving the infrastructure? Is it adding to or will it add to the wealth of our nation? When do we start tearing down buildings so we can build new ones?

I think that, with the sorry state of our infrastructure, the cases you describe would be few and far between. There is a vast amount of infrastructure in very poor shape, it doesn't make sense to me to expect that the money is somehow going to miss the majority of that and end up tearing up good roads to replace them. I can think of several examples of dollars from the first stimulus going straight to projects that have been needed for quite sometime. I guess though that we each color anecdotal evidence to our beliefs.

 

[Vultan]

If Only It Were World War II Again?September 6, 2010 3:50 P.M. By Victor Davis Hanson Paul Krugman has written yet another piece warning us that we have not borrowed enough (after we took his advice to borrow massively and got little results).

Wrong right off the bat. "We" did not take Krugman's advice. He said at the outset that the stimulus was too small and his predictions regarding its effectiveness have largely played out.

Right right off the bat. Many of the 'we' didn't want any stimulus at all so the fact that there was borrowing is tantamount to following his advice. Also, many of those who argued against the stimulus also predicted it would be ineffectual. Who to believe, those who said it wasn't enough or those who said any amount would never be enough, that it would be a waste? Japan has tried stimulus after stimulus, how's that working out for them?I will edit to add that I also hold the view that our country's infrastructure is falling apart and is in need of a massive works bill. But I don't view it as 'stimulus', just common sense.

 

[Andy Dufresne]

"Infrastructure" is the new "do it for the children".

Worst use of the "_____ is the new _____" construct ever.

No it's not. The mantra now is that as long as the money is spent on infrastructure then it's good money spent. I've seen numerous perfectly good roads being repaved here in Minneapolis. Sure they're providing jobs, temporary as they may be. But are they really improving the infrastructure? Is it adding to or will it add to the wealth of our nation? When do we start tearing down buildings so we can build new ones?

I think that, with the sorry state of our infrastructure, the cases you describe would be few and far between. There is a vast amount of infrastructure in very poor shape, it doesn't make sense to me to expect that the money is somehow going to miss the majority of that and end up tearing up good roads to replace them. I can think of several examples of dollars from the first stimulus going straight to projects that have been needed for quite sometime. I guess though that we each color anecdotal evidence to our beliefs.

I'm just saying that the idea that any infrastructure spending is good infrastructure spending is false. I'm also not the guy that's going to say everything the gov't spends money on is a bad idea.

 

[pantagrapher]

If Only It Were World War II Again?

September 6, 2010 3:50 P.M. By Victor Davis Hanson

Paul Krugman has written yet another piece warning us that we have not borrowed enough (after we took his advice to borrow massively and got little results).

Wrong right off the bat. "We" did not take Krugman's advice. He said at the outset that the stimulus was too small and his predictions regarding its effectiveness have largely played out.

Right right off the bat. Many of the 'we' didn't want any stimulus at all so the fact that there was borrowing is tantamount to following his advice.Also, many of those who argued against the stimulus also predicted it would be ineffectual. Who to believe, those who said it wasn't enough or those who said any amount would never be enough, that it would be a waste? Japan has tried stimulus after stimulus, how's that working out for them?

That's just nonsense. Especially since his predictions about the effect of what stimulus there was have played out.Or are you really arguing that ~$600 billion stimulus spending did not narrow the output gap relative to what it would have been without it?

 

[guderian]

Is that supposed to be a gotcha?

Right now, we’re at 6.5% unemployment and a 3% output gap – but those numbers are heading higher fast. Goldman predicts 8.5% unemployment, meaning a 7% output gap. That sounds reasonable to me.

He based that early figure on estimates of 8.5% unemployment. Those unemployment estimates were obviously low. So he later revised his number upward.

So he's proclaiming victory because he was wrong about the size of the stimulus AND the unemployment estimates? If he thought that 8.5% unemployment "sounds reasonable" and argued for a $600 billion stimulus, then how does he have a shred of credibility left? According to his own writing he uses Goldman's economic estimates, does "back-of-the-envelope" forecasting to derive demands for hundreds of billions in stimulus and this is all based on stuff that "sounds reasonable" to him. He basically says "we need a $600B stimulus to help employment. Oh, unemployment is 2 points higher even though we had a bigger stimulus than I was arguing? Well it's obvious, we needed an even bigger stimulus." Sounds well thought out to me.

 

[pantagrapher]

Is that supposed to be a gotcha?

Right now, we’re at 6.5% unemployment and a 3% output gap – but those numbers are heading higher fast. Goldman predicts 8.5% unemployment, meaning a 7% output gap. That sounds reasonable to me.

He based that early figure on estimates of 8.5% unemployment. Those unemployment estimates were obviously low. So he later revised his number upward.

So he's proclaiming victory because he was wrong about the size of the stimulus AND the unemployment estimates? If he thought that 8.5% unemployment "sounds reasonable" and argued for a $600 billion stimulus, then how does he have a shred of credibility left? According to his own writing he uses Goldman's economic estimates, does "back-of-the-envelope" forecasting to derive demands for hundreds of billions in stimulus and this is all based on stuff that "sounds reasonable" to him. He basically says "we need a $600B stimulus to help employment. Oh, unemployment is 2 points higher even though we had a bigger stimulus than I was arguing? Well it's obvious, we needed an even bigger stimulus." Sounds well thought out to me.

I don't understand how you could expect him not to revise his estimate upward as the actual unemployment numbers came in.

 

[Andy Dufresne]

I don't understand how you could expect him not to revise his estimate upward as the actual unemployment numbers came in.

But he's not just "revising estimates". He's claiming that he argued for a bigger package in the first place.It's like him telling you it's going to be cold today so you should wear a sweater and then later in the day when it's actually colder than predicted mocking you for not wearing a parka like he told you to.

 

[guderian]

I don't understand how you could expect him not to revise his estimate upward as the actual unemployment numbers came in.

The thing he was arguing for--a stimulus--was supposed to positively affect unemployment. Unemployment isn't an 'input', it's supposed to be the result. At least that's what he was arguing. Furthermore, he ended up getting a stimulus that was 50% bigger than the one he requested, so he already got the bigger stimulus and he was still wrong.

 

[pantagrapher]

I don't understand how you could expect him not to revise his estimate upward as the actual unemployment numbers came in.

The thing he was arguing for--a stimulus--was supposed to positively affect unemployment. Unemployment isn't an 'input', it's supposed to be the result. At least that's what he was arguing. Furthermore, he ended up getting a stimulus that was 50% bigger than the one he requested, so he already got the bigger stimulus and he was still wrong.

So let me get this straight. Krugman wrote ad nauseam in the months prior to the actual legislation that $800 billion was too small. But now, based on a single preliminary blog post, the entire argument in this thread has suddenly changed to "Krugman got a bigger stimulus than he requested."

 

[pantagrapher]

$600 BillionOy, it seems that another out-of-context quote of mine is being used to claim that I thought the Obama stimulus plan was just dandy. So: back in 2008, I wrote this piece in which I called for stimulus of 4 percent of GDP, or $600 billion. Didn’t we get that, and more?No. If you read the actual argument — which explains in detail how I arrived at the number — you’ll see that I was thinking in terms of a one-year program; $600 billion is 4 percent of one year’s GDP. I wasn’t clear about the issue of stimulus spread out over 2 years; but if you apply the math in that post, you’ll see that it implies a two-year program twice that size, which was just about what Christina Romer concluded was appropriate.And by January it was already apparent that the slump was going to be deeper than I expected when I wrote that original post.

 

[guderian]

$600 BillionOy, it seems that another out-of-context quote of mine is being used to claim that I thought the Obama stimulus plan was just dandy. So: back in 2008, I wrote this piece in which I called for stimulus of 4 percent of GDP, or $600 billion. Didn’t we get that, and more?No. If you read the actual argument — which explains in detail how I arrived at the number — you’ll see that I was thinking in terms of a one-year program; $600 billion is 4 percent of one year’s GDP. I wasn’t clear about the issue of stimulus spread out over 2 years; but if you apply the math in that post, you’ll see that it implies a two-year program twice that size, which was just about what Christina Romer concluded was appropriate.And by January it was already apparent that the slump was going to be deeper than I expected when I wrote that original post.

Because only a liberal like Krugman would think of stimulus in "per year" terms...

 

[guderian]

$600 Billion

Oy, it seems that another out-of-context quote of mine is being used to claim that I thought the Obama stimulus plan was just dandy. So: back in 2008, I wrote this piece in which I called for stimulus of 4 percent of GDP, or $600 billion. Didn’t we get that, and more?

No. If you read the actual argument — which explains in detail how I arrived at the number — you’ll see that I was thinking in terms of a one-year program; $600 billion is 4 percent of one year’s GDP. I wasn’t clear about the issue of stimulus spread out over 2 years; but if you apply the math in that post, you’ll see that it implies a two-year program twice that size, which was just about what Christina Romer concluded was appropriate.

And by January it was already apparent that the slump was going to be deeper than I expected when I wrote that original post.

And if it was apparent by January that the slump would be deeper, why did team Obama put out these forecasts in February: "After contracting at a 1.2% rate in 2009 the White House sees growth domestic product growth snapping back by 3.2% next year and then 4% or higher the three years after that."Link

You can't say that you were wrong about how bad the economy was going to be, but THIS time you need to believe me.

 

[pantagrapher]

$600 Billion

Oy, it seems that another out-of-context quote of mine is being used to claim that I thought the Obama stimulus plan was just dandy. So: back in 2008, I wrote this piece in which I called for stimulus of 4 percent of GDP, or $600 billion. Didn’t we get that, and more?

No. If you read the actual argument — which explains in detail how I arrived at the number — you’ll see that I was thinking in terms of a one-year program; $600 billion is 4 percent of one year’s GDP. I wasn’t clear about the issue of stimulus spread out over 2 years; but if you apply the math in that post, you’ll see that it implies a two-year program twice that size, which was just about what Christina Romer concluded was appropriate.

And by January it was already apparent that the slump was going to be deeper than I expected when I wrote that original post.

And if it was apparent by January that the slump would be deeper, why did team Obama put out these forecasts in February: "After contracting at a 1.2% rate in 2009 the White House sees growth domestic product growth snapping back by 3.2% next year and then 4% or higher the three years after that."Link

You can't say that you were wrong about how bad the economy was going to be, but THIS time you need to believe me.

Krugman has said all along that the administration's forecasts have been far too optimistic.

 

[Bottomfeeder Sports]

$600 Billion

Oy, it seems that another out-of-context quote of mine is being used to claim that I thought the Obama stimulus plan was just dandy. So: back in 2008, I wrote this piece in which I called for stimulus of 4 percent of GDP, or $600 billion. Didn’t we get that, and more?

No. If you read the actual argument — which explains in detail how I arrived at the number — you’ll see that I was thinking in terms of a one-year program; $600 billion is 4 percent of one year’s GDP. I wasn’t clear about the issue of stimulus spread out over 2 years; but if you apply the math in that post, you’ll see that it implies a two-year program twice that size, which was just about what Christina Romer concluded was appropriate.

And by January it was already apparent that the slump was going to be deeper than I expected when I wrote that original post.

Because only a liberal like Krugman would think of stimulus in "per year" terms...

So I was correct, and I think it was pretty clear-

yes Captain Hindsight Paul Krugman. So $800 billion was too small Paul? Weird, because you thought it needed to be "at least $600 billion" -- and by my math $800 billion > $600 billion.

Stimulus Math

4% of GDP would suggests 4% in one year...?

 

[Andy Dufresne]

Oh, woe is Paul...

Things Could Be WorseBy PAUL KRUGMAN

“Japan’s problems now are the same as they were in the 1990s, when you were writing about them. It’s depressing.” So declared one economist I spoke to here. “But the Japanese don’t seem all that depressed,” objected another. Both were right — and the conversation crystallized some thoughts I’ve been having about Japan’s situation, and ours.

A decade ago, Japan was a byword for failed economic policies: years after its real estate bubble burst, it was still suffering from chronic deflation and slow growth. Then America had its own bubble, bust and crisis. And these days, Japan’s record doesn’t look that bad to an American eye.

Why not? For all its flaws, Japanese policy limited and contained the damage from a financial bust. And the question in America now is whether we’ll do the same — or whether we will take a hard right turn into economic disaster.

In the 1990s, Japan conducted a dress rehearsal for the crisis that struck much of the world in 2008. Runaway banks fueled a bubble in land prices; when the bubble burst, these banks were severely weakened, as were the balance sheets of everyone who had borrowed in the belief that land prices would stay high. The result was protracted economic weakness.

And the policy response was too little, too late. The Bank of Japan cut interest rates and took other steps to pump up spending, but it was always behind the curve and persistent deflation took hold. The government propped up employment with public works programs, but its efforts were never focused enough to start a self-sustaining recovery. Banks were kept afloat, but were slow to face up to bad debts and resume lending. The result of inadequate policy was an economy that remains depressed to this day.

Yet the picture is grayish rather than pitch black. Japan’s economy may be depressed, but it’s not in a depression. The employment picture has been troubled, with a growing number of “freeters” living from temporary job to temporary job. But thanks to those government job-creation plans, the country isn’t suffering mass unemployment. Debt has risen, but despite constant warnings of imminent crisis — and even downgrades from rating agencies back in 2002 — the government is still able to borrow, long term, at an interest rate of only 1.1 percent.

In short, Japan’s performance has been disappointing but not disastrous. And given the policy agenda of America’s right, that’s a performance we may wish we’d managed to match.

Like their Japanese counterparts, American policy makers initially responded to a burst bubble and a financial crisis with half-measures. I’ve lamented that fact, but at this point it’s water under the bridge. The question is: What happens now?

Republican obstruction means that the best we can hope for in the near future are palliative measures — modest additional spending like the infrastructure program President Obama proposed this week, aid to state and local governments to help them avoid severe further cutbacks, aid to the unemployed to reduce hardship and maintain spending power.

Even with such measures, we’ll be lucky to do as well as Japan did at limiting the human and economic cost of the economy’s financial woes. But it’s by no means certain that we’ll do even that much. If the Republicans go beyond obstruction to actually setting policy — which they might if they win big in November — we’ll be on our way to economic performance that makes Japan look like the promised land.

It’s hard to overstate how destructive the economic ideas offered earlier this week by John Boehner, the House minority leader, would be if put into practice. Basically, he proposes two things: large tax cuts for the wealthy that would increase the budget deficit while doing little to support the economy, and sharp spending cuts that would depress the economy while doing little to improve budget prospects. Fewer jobs and bigger deficits — the perfect combination.

More broadly, if Republicans regain power, they will surely do what they did during the Bush years: they won’t seriously try to address the economy’s troubles; they’ll just use those troubles as an excuse to push the usual agenda, including Social Security privatization. They’ll also surely try to repeal health reform, which would be another twofer, reducing economic security even as it increases long-term deficits. I'm also positive that they will promote the eating of children and the recycling of old people as well as make it mandatory that everyone purchase a gun and go to church.

So I find myself almost envying the Japanese. Yes, their performance has been disappointing. But things could have been worse. And the case Democrats now need to make — the case the president finally began to make in Cleveland this week — is that if Republicans regain power, things will indeed be worse. Americans, understandably, are disappointed over, frustrated with and angry about the state of the economy; but disappointment is better than disaster.

 

[RCon]

Seems like it would be so much simpler for him to just write "Democrats are always right, Republicans always suck." every week. I guess he must get paid by the word.

 

[IvanKaramazov]

Seems like it would be so much simpler for him to just write "Democrats are always right, Republicans always suck." every week. I guess he must get paid by the word.

He could always spend the next 800 words patting himself on the back for correctly predicting the housing bubble (along with two thirds of the rest of the developed world). He never seems to tire of doing so on his blog.

 

[Soonerman]

Seems like it would be so much simpler for him to just write "Democrats are always right, Republicans always suck." every week. I guess he must get paid by the word.

Yeah, he's definitely mailing it in. He basically rewrites the same column every week. If I was in charge of the newspapers running his columns, I'd just keep running the same one over and over to see if anyone noticed.His column about how WW2 spending ended the Depression and how it would work exactly the same way today was at about the level of a dim 8th grader.

 

[TwinTurbo]

I don't understand how you could expect him not to revise his estimate upward as the actual unemployment numbers came in.

But he's not just "revising estimates". He's claiming that he argued for a bigger package in the first place.It's like him telling you it's going to be cold today so you should wear a sweater and then later in the day when it's actually colder than predicted mocking you for not wearing a parka like he told you to.

Sometimes I think Krugman could double as an Astrologist. He provides vague economic horoscopes and later refines the meaning to fit the outcome. The only constant in his narrative is that the GOP sucks while Democrats are usually awesome and would be even more awesome if they would just keep trying to hit his constantly moving targets and his constantly changing fiscal views depending on which party is in power.

 

[tommyGunZ]

I don't understand how you could expect him not to revise his estimate upward as the actual unemployment numbers came in.

But he's not just "revising estimates". He's claiming that he argued for a bigger package in the first place.It's like him telling you it's going to be cold today so you should wear a sweater and then later in the day when it's actually colder than predicted mocking you for not wearing a parka like he told you to.

Sometimes I think Krugman could double as an Astrologist. He provides vague economic horoscopes and later refines the meaning to fit the outcome. The only constant in his narrative is that the GOP sucks while Democrats are usually awesome and would be even more awesome if they would just keep trying to hit his constantly moving targets and his constantly changing fiscal views depending on which party is in power.

You must not read Krugman very often. He's been very critical of Obama in many of his columns over the past two years.

 

[tommyGunZ]

Seems like it would be so much simpler for him to just write "Democrats are always right, Republicans always suck." every week. I guess he must get paid by the word.

Another person who apparently doesn't read Krugman regularly. Krugman regularly chastises Democrats in his pieces. Of course he rips Republicans more, but it's not his fault that Republican solutions to our economic problems are a joke.

 

[Andy Dufresne]

The only time Krugman rips democrats is when they're not as liberal as he is.

 

[Abashail]

Seems like it would be so much simpler for him to just write "Democrats are always right, Republicans always suck." every week. I guess he must get paid by the word.

Another person who apparently doesn't read Krugman regularly. Krugman regularly chastises Democrats in his pieces. Of course he rips Republicans more, but it's not his fault that Republican solutions to our economic problems are a joke.

Yeah, the narrative is usually "I'm always right. Democrats are ineffectual and naive and republicans always suck."

 

[TwinTurbo]

I don't understand how you could expect him not to revise his estimate upward as the actual unemployment numbers came in.

But he's not just "revising estimates". He's claiming that he argued for a bigger package in the first place.It's like him telling you it's going to be cold today so you should wear a sweater and then later in the day when it's actually colder than predicted mocking you for not wearing a parka like he told you to.

Sometimes I think Krugman could double as an Astrologist. He provides vague economic horoscopes and later refines the meaning to fit the outcome. The only constant in his narrative is that the GOP sucks while Democrats are usually awesome and would be even more awesome if they would just keep trying to hit his constantly moving targets and his constantly changing fiscal views depending on which party is in power.

You must not read Krugman very often. He's been very critical of Obama in many of his columns over the past two years.

I've read almost every Krugman article that he's written during that time and am aware he's almost "given up" on Obama although I think it's a pure act on his part. He obviously can't withhold criticism of Obama because the policies haven't worked, not that the GOP are offering much better. But he's still a partisan hack and almost all of his criticism of the Democrats is actually thinly veiled attacks on the GOP.

 

[Statorama]

Krugman calls Gov. Christie's effort to save the taxpayers billions "the worst policy decision ever made by the government of New Jersey"

What a Jackass.

 

[Bronco Billy]

but it's not his fault that Republican solutions to our economic problems are a joke.

A blindfolded pig throwing darts at a board could do better than the Dems right now. A blindfolded pig with 1 leg throwing darts over his shoulder could do better than Krugman.

 

[Andy Dufresne]

Dizzying. Truly dizzying. I can't count the number of bets he hedges and straw men he constructs in this one. And I shudder to think of how big "big" really means to Krugman & Co.

Latest

 

[tommyGunZ]

Dizzying. Truly dizzying. I can't count the number of bets he hedges and straw men he constructs in this one. And I shudder to think of how big "big" really means to Krugman & Co.

Latest

Nice rebuttal of Krugman's arguments. Next time just post a and save yourself some keystrokes.

 

[Andy Dufresne]

Dizzying. Truly dizzying. I can't count the number of bets he hedges and straw men he constructs in this one. And I shudder to think of how big "big" really means to Krugman & Co.

Latest

Nice rebuttal of Krugman's arguments. Next time just post a and save yourself some keystrokes.

It would be just more of the same. Kind of like the columns themselves.Really, this is getting to the "I wanted to destroy something beautiful" stage. It was funny to begin with, but now it's getting kinda sad.

 

[Bottomfeeder Sports]

Dizzying. Truly dizzying. I can't count the number of bets he hedges and straw men he constructs in this one. And I shudder to think of how big "big" really means to Krugman & Co.

Latest

Oh please! Krugman is dead on that this great expansion of the federal government by Obama that those on the right are up in arms about is mostly a figment of their imagination at best and ignorance at worst. Of the ten to twenty trillion in deficits of this decade that is so shocking is almost entirely made up of spending that we (you and I) were arguing about when Hillary was going to have a tough rematch with Rudy Giuliani for president. Lazily charge Obama a trillion for the stimulus, a trillion for that first spending authorization bill, and a trillion for Obamacare and you still have seven to seventeen trillion of "out of control Obama spending".

 

[Andy Dufresne]

Not so much of a jackass in this one. Actually, I agree with most of it.

Link

 

[Andy Dufresne]

More non-jackassery from Krugman. The man is fascinating.

Rare and Foolish - A Criticism of the Chinese

 

[dickey moe]

More non-jackassery from Krugman. The man is fascinating.

Rare and Foolish - A Criticism of the Chinese

First, and most obviously, the world needs to develop non-Chinese sources of these materials. There are extensive rare earth deposits in the United States and elsewhere. However, developing these deposits and the facilities to process the raw materials will take both time and financial support. So will a prominent alternative: “urban mining,” a k a recycling of rare earths and other materials from used electronic devices.

Who, I say, who could possibly be holding back exploration/exploitation of our own raw materials in the U.S.? Hmmmmmmmmm.

 

[Andy Dufresne]

More non-jackassery from Krugman. The man is fascinating.

Rare and Foolish - A Criticism of the Chinese

First, and most obviously, the world needs to develop non-Chinese sources of these materials. There are extensive rare earth deposits in the United States and elsewhere. However, developing these deposits and the facilities to process the raw materials will take both time and financial support. So will a prominent alternative: “urban mining,” a k a recycling of rare earths and other materials from used electronic devices.

Who, I say, who could possibly be holding back exploration/exploitation of our own raw materials in the U.S.? Hmmmmmmmmm.

My thoughts exactly. I wonder if he could be brought to say it.

 

[RCon]

More non-jackassery from Krugman. The man is fascinating.

Rare and Foolish - A Criticism of the Chinese

I notice he doesn't offer any suggestions, just criticism of the status quo.