Paul Krugman is a jackass (2 Viewers)

[Arsenal of Doom]

Companies are making money but they are taking defensive positions. Not because there is no demand (again, there is demand enough for them to be making record profits) but because they do not know what is going to happen down the line that will impact their business. Consumers are taking defensive positions because of unemployment. One of the biggest things we can do to help the economy is eject the uncertainty out of the system.

You keep making arguments that virtually every economist out there disagrees with. Demand IS a huge problem Chad. Sorry that it doesn't fit into your political narrative.

Why is there no demand? How are corporations making record profits with no demand?

I'll hang up and listen to the spokesperson of virtually every economist.

That liberal beacon the WSJ had a piece on this just last week - I'm surprised you missed it Chad.

Dearth of Demand Seen Behind Weak Hiring

BY PHIL IZZO

The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists in a new Wall Street Journal survey.

"There is no demand," said Paul Ashworth of Capital Economics. "Businesses aren't confident enough, and the longer this goes on the harder it is to convince them that they should be."

In the survey, conducted July 8-13 and released Monday, 53 economists—not all of whom answer every question—were asked the main reason employers aren't hiring more readily. Of the 51 who responded to the question, 31 cited ...

But please keep ignoring the facts and insisting that there isn't a demand issue.

Man, I love ya but sometimes you are dense. I am not saying demand is not soft. I am asking you why it is soft. I am also further stating soft demand is not the primary reason for business not hiring because if it was then we would see very low profits.

You refuse to accept anything that might mean a slight crack in your liberal worldview.

So, let me ask again.

Why is demand lacking?

If demand is lacking so much to make business not hire then how are they (as a trend) coming up with record profits?

Really? This is pretty obvious.

 

[Chadstroma]

I can be pretty partisan at times. But I do criticize Obama when I think he deserves it (frequently on foreign policy). And my response wasn't meant to say "Dems don't cause any uncertainty." It was more a lampoon of Republicans who last November and December wouldn't say anything about the economy other than "uncertainty, uncertainty, uncertainty" and then turned around and created more uncertainty.If Republicans really thought uncertainty was the primary obstacle to strong economic growth, then they should make pragmatic compromises on these issues their top priority. Instead they seem to go out of their way to re-open old battles and fabricate new crisis, all adding additional uncertainty to the situation rather than lowering it.

Surprise, surprise... both sides are driven by politics just much if not more than by philosophy. I would say that I don't think that the debt ceiling is a fabricated crisis. In one sense, it is- since we could default without a deal that extends the ceiling.... and in that way, I see the point. However, on the other hand the problem is our out of control spending that both parties have been apart of for years but have excelled over the last two administrations to outrageous and unsustainable levels. In that sense, pretty much everything that could and will go bad in what amounts to a voluntary default will happen over the long term without major changes in how our government spends money that it does not have. Right now it amounts to a game of political chicken but the stakes are high for the nation. Obama's goal right now is a deal that shelves this until after the 2012 election for obvious political reasons. The Republicans want to keep this discussion in the forefront for obvious political reasons as well as philosophical. We CAN NOT allow a default. The Republicans that claim that nothing bad will happen make me cringe. At the same time though, I have to say that as long as we get a deal in place before we lose our top credit rating (the more likely bad thing to happen than an outright default) then I am actually happy about this because this entire thing has forced real discussion about concessions in spending that seemingly would never have been put on the table. We are getting to the wire now though and some sort of compromise must get done. The inability to do so will be the fault of both parties who have their own power grab goals in this making of a debacle.

 

[Chadstroma]

Companies are making money but they are taking defensive positions. Not because there is no demand (again, there is demand enough for them to be making record profits) but because they do not know what is going to happen down the line that will impact their business. Consumers are taking defensive positions because of unemployment. One of the biggest things we can do to help the economy is eject the uncertainty out of the system.

You keep making arguments that virtually every economist out there disagrees with. Demand IS a huge problem Chad. Sorry that it doesn't fit into your political narrative.

Why is there no demand? How are corporations making record profits with no demand?

I'll hang up and listen to the spokesperson of virtually every economist.

That liberal beacon the WSJ had a piece on this just last week - I'm surprised you missed it Chad.

Dearth of Demand Seen Behind Weak Hiring

BY PHIL IZZO

The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists in a new Wall Street Journal survey.

"There is no demand," said Paul Ashworth of Capital Economics. "Businesses aren't confident enough, and the longer this goes on the harder it is to convince them that they should be."

In the survey, conducted July 8-13 and released Monday, 53 economists—not all of whom answer every question—were asked the main reason employers aren't hiring more readily. Of the 51 who responded to the question, 31 cited ...

But please keep ignoring the facts and insisting that there isn't a demand issue.

Man, I love ya but sometimes you are dense. I am not saying demand is not soft. I am asking you why it is soft. I am also further stating soft demand is not the primary reason for business not hiring because if it was then we would see very low profits.

You refuse to accept anything that might mean a slight crack in your liberal worldview.

So, let me ask again.

Why is demand lacking?

If demand is lacking so much to make business not hire then how are they (as a trend) coming up with record profits?

Really? This is pretty obvious.

Yes, yes, yes.... we know from the guy who has Obama '12 in his sig line that it is Bush's fault. Thanks for your addition to the discussion. Now go play with the other children.

 

[pantagrapher]

Amazing how some people still just deny all the evidence of stagnant consumer demand. So much so that they've created this fantasy that everything would start churning along if Obama would quit baffling the delicate private sector with his uncertainty cloak.

I don't know. Some of the uncertainty argument makes a lot of sense. I mean, businesses have no idea if Obamacare is going to stay or be overturned. They have no idea if the Bush tax cuts are going to be extended or allowed to expire next year. They have no idea if their customers who are government employees are going to be thrown out of their jobs due to upcoming spending cuts, thus lowering the demand for their products. They have no idea if the tax loopholes they've gained through their lobbying efforts over the last 20 years are going to be thrown overboard in new tax reforms. They have no idea whether the regulations on their business are going to be enforced because of gov't agency budget cuts, or are going to be overturned by Congressional Republicans ... so they'd prefer to not abide by them as that would save money, but technically they still are legally required to comply. They have no idea if their gov't subsidies are going to continue. There's a lot of uncertainty out there.

So instead of believing the obvious—that excess capacity and low demand give the private sector no reason to invest—you prefer to believe this convoluted, unquantifiable explanation instead? If household debt were low and consumers were spending freely and the private sector was struggling to keep up with demand, do you honestly believe they would ignore the prospect of making more revenue—that they would opt instead to sit on their hands—because of "uncertainty"?

Actually, my post was supposed to be taken tongue-in-cheek, as a sarcastic critique of the Republican "uncertainty" mantra when most of the uncertainty out there that they claim to be so concerned about is the result of Republican policies and partisan demagoguery.

Damn you.

 

[RCon]

It seems to me that this recession was caused by the economy overheating over the past 20-ish years by several bubbles, and once the last of those bubbles popped, the economy as a whole was significantly "higher" than what it could naturally support without the help of the bubbles. No matter what spending government does, the economy is not going to pick up until the actual economy intersects with where the economy "should have been" without the bubbles. Government spending may flatten out the dips, but all that's going to do is A) put taxpayers on the hook for additional debt in the future, and B) delay the intersection point at which the economy can recover.

http://img546.imageshack.us/img546/2770/oversimplification.png

See the hand-drawn graph above for an illustration of my thoughts. I freely admit this is not a scientific analysis, a massive oversimplification, and not at all drawn to scale; it's merely meant to make it easier to understand what I typed above. Anyway, the three green lines simply represent different economic trajectories based on different levels of government spending. I think I prefer the lowest level of government spending. Yes, it's most painful, but it keeps the economy down for the shortest amount of time, and it causes the least amount of public debt, which in turn should enable the economy to be healthier once the lines intersect again.

 

[Arsenal of Doom]

Companies are making money but they are taking defensive positions. Not because there is no demand (again, there is demand enough for them to be making record profits) but because they do not know what is going to happen down the line that will impact their business. Consumers are taking defensive positions because of unemployment. One of the biggest things we can do to help the economy is eject the uncertainty out of the system.

You keep making arguments that virtually every economist out there disagrees with. Demand IS a huge problem Chad. Sorry that it doesn't fit into your political narrative.

Why is there no demand? How are corporations making record profits with no demand?

I'll hang up and listen to the spokesperson of virtually every economist.

That liberal beacon the WSJ had a piece on this just last week - I'm surprised you missed it Chad.

Dearth of Demand Seen Behind Weak Hiring

BY PHIL IZZO

The main reason U.S. companies are reluctant to step up hiring is scant demand, rather than uncertainty over government policies, according to a majority of economists in a new Wall Street Journal survey.

"There is no demand," said Paul Ashworth of Capital Economics. "Businesses aren't confident enough, and the longer this goes on the harder it is to convince them that they should be."

In the survey, conducted July 8-13 and released Monday, 53 economists—not all of whom answer every question—were asked the main reason employers aren't hiring more readily. Of the 51 who responded to the question, 31 cited ...

But please keep ignoring the facts and insisting that there isn't a demand issue.

Man, I love ya but sometimes you are dense. I am not saying demand is not soft. I am asking you why it is soft. I am also further stating soft demand is not the primary reason for business not hiring because if it was then we would see very low profits.

You refuse to accept anything that might mean a slight crack in your liberal worldview.

So, let me ask again.

Why is demand lacking?

If demand is lacking so much to make business not hire then how are they (as a trend) coming up with record profits?

Really? This is pretty obvious.

Yes, yes, yes.... we know from the guy who has Obama '12 in his sig line that it is Bush's fault. Thanks for your addition to the discussion. Now go play with the other children.

Actually, I don't think it has much of anything to do with Bush. 70% of our economy is based on personal consumption, and it's consumers that really took the brunt of the recession and continue to feel residual pressure. As you noted a couple of times above, businesses have been able to maintain reasonable profitability in spite of no growth. They've done this in large part by sharply cutting expenses, including payroll. Trillions in consumer equity has been lost to the housing bubble collapse. Access to consumer and business credit continues to be tight, though more progress has been made on the business front. All of these things put serious pressure on demand.

 

[Orange Crush]

Yes, yes, yes.... we know from the guy who has Obama '12 in his sig line that it is Bush's fault. Thanks for your addition to the discussion. Now go play with the other children.

You've become quite shrill over the past couple months, Chad. Is everything going ok with you?

 

[urbanhack]

Please point me to where I've ever said anything related to this.

Ok, what do we need to do in order to get out of this economic hell?

Balance. Balance between the capitalistic and socialist elements of our economy and society. Unfortunately this is not possible with our current political system. It is controlled by corporations and special interests. I'm not sure if it's even possible to change at this point.Oh..and economic hell? For all the problems we have right now, there sure are an awful lot of people doing extremely well from what I can see.

 

[Andy Dufresne]

Sore loser.

Hey Paul -

 

[Joe T]

Sore loser.

Hey Paul -

I stopped at, "We currently have a deeply depressed economy."

 

[tommyGunZ]

Sore loser.

Hey Paul -

I stopped at, "We currently have a deeply depressed economy."

why?

 

[Joe T]

Sore loser.

Hey Paul -

I stopped at, "We currently have a deeply depressed economy."

why?

Because of the extreme inaccuracy in the starting point.

 

[tommyGunZ]

Sore loser.

Hey Paul -

I stopped at, "We currently have a deeply depressed economy."

why?

Because of the extreme inaccuracy in the starting point.

you dont believe that the economy is depressed and functioning far below capacity?

 

[Joe T]

Sore loser.

Hey Paul -

I stopped at, "We currently have a deeply depressed economy."

why?

Because of the extreme inaccuracy in the starting point.

you dont believe that the economy is depressed and functioning far below capacity?

I appreciate your attempt to move the target, but that's not what he said in the article. He said, "We currently have a deeply depressed economy" which is not remotely true.

We actually have a growing economy that is being slowed by high unemployment, but that is far and away from being a deeply depressed economy.

 

[tommyGunZ]

Sore loser.

Hey Paul -

I stopped at, "We currently have a deeply depressed economy."

why?

Because of the extreme inaccuracy in the starting point.

you dont believe that the economy is depressed and functioning far below capacity?

I appreciate your attempt to move the target, but that's not what he said in the article. He said, "We currently have a deeply depressed economy" which is not remotely true.

We actually have a growing economy that is being slowed by high unemployment, but that is far and away from being a deeply depressed economy.

I think you are confusing "depressed" with the technical economic term "depression". There is zero argument amongst economists that our economy is depressed by a number of factors, even though we are not technically in a "depression". refusing to read krugman because you are confused is good shtick.

 

[guderian]

FYI the S&P 500 is looking like it will show roughly 9% year-over-year revenue growth this quarter and double-digit profit growth.

Perhaps another round of anti-business policies and rhetoric will cause them to shoot the locks off of their wallets and hire in the US instead of overseas...

 

[tommyGunZ]

FYI the S&P 500 is looking like it will show roughly 9% year-over-year revenue growth this quarter and double-digit profit growth. Perhaps another round of anti-business policies and rhetoric will cause them to shoot the locks off of their wallets and hire in the US instead of overseas...

obama the "anti-business guy" is good shtick as well.

 

[DiStefano]

Sore loser.

Hey Paul -

I stopped at, "We currently have a deeply depressed economy."

why?

Because of the extreme inaccuracy in the starting point.

you dont believe that the economy is depressed and functioning far below capacity?

I appreciate your attempt to move the target, but that's not what he said in the article. He said, "We currently have a deeply depressed economy" which is not remotely true.

We actually have a growing economy that is being slowed by high unemployment, but that is far and away from being a deeply depressed economy.

I think you are confusing "depressed" with the technical economic term "depression". There is zero argument amongst economists that our economy is depressed by a number of factors, even though we are not technically in a "depression". refusing to read krugman because you are confused is good shtick.

I don't blame Krugman for being depressed. With a pinko Commie wife, and his increasing irrelevance, he'd better get over to England and their National Health Service, which he lusts after.

 

[pantagrapher]

Macroeconomic FollyAll of a sudden, people seem to have noticed that policy is moving in exactly the wrong direction. We’re getting headlines like this: Debt Deal Puts U.S. on Austerity Path as Economy Falters.I’ll need to write up my thoughts here at greater length, but let’s just say for now that what we’ve witnessed pretty much throughout the western world is a kind of inverse miracle of intellectual failure. Given a crisis that should have been relatively easy to solve — and, more than that, a crisis that anyone who knew macroeconomics 101 should have been well-prepared to deal with — what we actually got was an obsession with problems we didn’t have. We’ve obsessed over the deficit in the face of near-record low interest rates, obsessed over inflation in the face of stagnant wages, and counted on the confidence fairy to make job-destroying policies somehow job-creating.It’s a disaster – and maybe not only an economic disaster.Fears of far-right rise in crisis-hit GreeceATHENS, Greece — They descended by the hundreds — black-shirted, bat-wielding youths chasing down dark-skinned immigrants through the streets of Athens and beating them senseless in an unprecedented show of force by Greece’s far-right extremists.In Greece, alarm is rising that the twin crises of financial meltdown and soaring illegal immigration are creating the conditions for a right-wing rise — and the Norway massacre on Monday drove authorities to beef up security.The move comes amid spiraling social unrest that has unleashed waves of rioting and vigilante thuggery on the streets of Athens. The U.N.’s refugee agency warns that some Athens neighborhoods have become zones where “fascist groups have established an odd lawless regime.”Got that 30s feeling, all the way.

Non-inflation WatchToday’s personal income report was predictably dreary, as the march to a lost decade (or more) continues apace. But let me highlight one piece of the report: the inflation, or lack thereof.The personal consumption expenditures deflator fell, thanks to falling commodity prices. More interesting is the sharp decline in inflation as measured by the PCE deflator minus food and energy, which has traditionally been the Fed’s favorite measure of “core” inflation.Many of the people who keep seeing runaway inflation just around the corner made a big deal of last month’s PCE core, which rose at an annual rate of 3.1 percent. Aha! they said: inflation is here. But some of us argued that this was a temporary blip, driven by the indirect effect of commodity prices even on core prices. And all consumer price index-based measures of core inflation turned down last month.Now the same thing is happening with the PCE core, which rose at an annual rate of only 1.3 percent in June. Later today we’ll get the Dallas Fed trimmed mean measure, which was already down in May and will almost surely show further decline in June.So once again the usual suspects — the people who predicted runaway inflation from Fed expansion and soaring interest rates from federal borrowing — are being proved wrong, while textbook macroeconomics is continuing to work just fine.Too bad the people who get everything wrong are driving Very Serious discourse and policy.Update: And, right on cue on the Yahoo finance home page, “The Outlook for Inflation Is Dire”: Peter Tanous. Also, hyperinflation by 2010.

 

[Andy Dufresne]

Is that first block something from Krugman?

 

[pantagrapher]

Is that first block something from Krugman?

Yeah, both blocks are from Krugman's blog.

 

[Andy Dufresne]

Is that first block something from Krugman?

Yeah, both blocks are from Krugman's blog.

I can't believe he connected those dots.

 

[Joe T]

FYI the S&P 500 is looking like it will show roughly 9% year-over-year revenue growth this quarter and double-digit profit growth.

Perhaps another round of anti-business policies and rhetoric will cause them to shoot the locks off of their wallets and hire in the US instead of overseas...

Thanks guderian, but I regret to inform you that our economy is deeply depressed according to all economists. /Tgunz

 

[Slapdash]

I think it is pretty clear to anyone that follows the numbers on the economy that it is still deeply depressed. I know better than to expect people around here to acknowledge those though.

 

[pantagrapher]

I think it is pretty clear to anyone that follows the numbers on the economy that it is still deeply depressed. I know better than to expect people around here to acknowledge those though.

What are you talking about? The S&P 500 is performing wonderfully, which means the economy is in fine shape.

 

[Andy Dufresne]

I think it is pretty clear to anyone that follows the numbers on the economy that it is still deeply depressed. I know better than to expect people around here to acknowledge those though.

"Deeply" is a relative term around which it'll be difficult to gain consensus.

 

[Joe T]

I think it is pretty clear to anyone that follows the numbers on the economy that it is still deeply depressed. I know better than to expect people around here to acknowledge those though.

I follow the economy very closely. So, I'll take a link to the numbers supporting our economy is deeply depressed.

 

[Slapdash]

I think it is pretty clear to anyone that follows the numbers on the economy that it is still deeply depressed. I know better than to expect people around here to acknowledge those though.

I follow the economy very closely. So, I'll take a link to the numbers supporting our economy is deeply depressed.

If you follow the economy, then don't need me to link to output, incomes, consumer spending, housing, employment, prices, and wages all being significantly below trend.

 

[Slapdash]

I think it is pretty clear to anyone that follows the numbers on the economy that it is still deeply depressed. I know better than to expect people around here to acknowledge those though.

What are you talking about? The S&P 500 is performing wonderfully, which means the economy is in fine shape.

Meh. Wonderfully would imply to me it has been able to surpass its high of 10 years ago.

 

[RCon]

Is that first block something from Krugman?

Yeah, both blocks are from Krugman's blog.

From when? The second one at least seems like it must have been written years ago, or there's a typo in the last line.

 

[pantagrapher]

Is that first block something from Krugman?

Yeah, both blocks are from Krugman's blog.

From when? The second one at least seems like it must have been written years ago, or there's a typo in the last line.

The second one might seem old because the people Krugman is criticizing have been warning of hyperinflation continuously since 2008.

 

[pantagrapher]

Hope Is Not A Plan

Nor is it good politics. So what the heck are they thinking?

President Barack Obama’s spokesman is discounting talk that the economy may be headed back into recession, despite recent concerns of economists.

Spokesman Jay Carney says there is no question that economic growth and job creation have slowed over the past half year.

But, Carney told a White House briefing, “We do not believe that there is a threat of a double-dip recession.”

Of course there’s a threat. Larry Summers puts the odds at one in three; I might be slightly more optimistic, but the risk is very real. Who, exactly, is at the White House who knows better?

And think about the politics here. For two years the White House has been determinedly cheerful, always declaring that the recovery was on track, that its policies were working fine. And all it did was squander its credibility. Maybe admitting the truth, saying that in fact we hadn’t done nearly enough, would not have helped get useful legislation through Congress. But at least it would have conveyed the message that the WH was living in the same reality as ordinary workers.

Now they’re doing it again. To what purpose? Do they think the markets will be reassured? Do they think consumers will be reassured? At this point, after the “summer of recovery” came and went a whole year ago?

Spin is part of politics. But sometimes you have to know when to stop.

 

[Chadstroma]

Yes, yes, yes.... we know from the guy who has Obama '12 in his sig line that it is Bush's fault. Thanks for your addition to the discussion. Now go play with the other children.

You've become quite shrill over the past couple months, Chad. Is everything going ok with you?

I am doing great actually. Can be better but never been more content with life. However, with a 4 month old my sleep schedule is all messed up... so maybe I am a but edgier at times than normal. Thanks for the concern and apologies for snapping at ya guys at times. (well, when you don't deserve it at least)

 

[Chadstroma]

Hope Is Not A Plan

Nor is it good politics. So what the heck are they thinking?

President Barack Obama’s spokesman is discounting talk that the economy may be headed back into recession, despite recent concerns of economists.

Spokesman Jay Carney says there is no question that economic growth and job creation have slowed over the past half year.

But, Carney told a White House briefing, “We do not believe that there is a threat of a double-dip recession.”

Of course there’s a threat. Larry Summers puts the odds at one in three; I might be slightly more optimistic, but the risk is very real. Who, exactly, is at the White House who knows better?

And think about the politics here. For two years the White House has been determinedly cheerful, always declaring that the recovery was on track, that its policies were working fine. And all it did was squander its credibility. Maybe admitting the truth, saying that in fact we hadn’t done nearly enough, would not have helped get useful legislation through Congress. But at least it would have conveyed the message that the WH was living in the same reality as ordinary workers.

Now they’re doing it again. To what purpose? Do they think the markets will be reassured? Do they think consumers will be reassured? At this point, after the “summer of recovery” came and went a whole year ago?

Spin is part of politics. But sometimes you have to know when to stop.

The President is always a bit of a cheerleader when it comes to the economy. The White House has to be very careful in trying to instill confidence because a lack of confidence created by a comment from the White House can have a real negative impact. So, you will always have the White House err on the side of optimism when it comes to the economy. At the same time though, if you go too far with it then you lose credibility quickly. I think the Obama White House has certainly erred for 3 years on the side of optimism but it really is not too much more than any other recent administrations. I am not going to be critical of that- I much rather them err on the side of the positive spin than err the other way.

 

[Jackstraw]

Frum and Krugman, together at last.

http://krugman.blogs.nytimes.com/2011/08/04/wrong-and-right/

Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?

 

[Slapdash]

Frum and Krugman, together at last. http://krugman.blogs.nytimes.com/2011/08/04/wrong-and-right/Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?

Say what you want about Krugman and his political venom, but the man has called the continued problems in Europe and deflationary pressures in the US pretty damn well. If you have not read The Return of Depression Economics yet, you should.

 

[tommyGunZ]

Frum and Krugman, together at last. http://krugman.blogs.nytimes.com/2011/08/04/wrong-and-right/

Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?

Yep. And that's one of the biggest problems with politics - there is no scoreboard.

 

[RCon]

Frum and Krugman, together at last. http://krugman.blogs.nytimes.com/2011/08/04/wrong-and-right/

Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?

Yep. And that's one of the biggest problems with politics - there is no scoreboard.

I thought election results were the scoreboard? It's just that there's always a new game right after.

 

[rolyaTy]

I've been reading Krugman for years (along with WSJ and others) and truly, he's been the economic voice of reason (and accuracy) over that time period.

The WSJ and many other sources of information regarding what's going to happen simply have been inaccurate. I think it's time to take his suggestions much more seriously regarding how we get out of this mess we seem to be sliding back into.

We don't want to replicate Japan's lost decade, although it seems like we're hell bent on doing just that.

 

[Joe T]

Wait. Are you guys saying Krugman was right?

 

[Slapdash]

I've been reading Krugman for years (along with WSJ and others) and truly, he's been the economic voice of reason (and accuracy) over that time period.

The WSJ and many other sources of information regarding what's going to happen simply have been inaccurate. I think it's time to take his suggestions much more seriously regarding how we get out of this mess we seem to be sliding back into.

We don't want to replicate Japan's lost decade, although it seems like we're hell bent on doing just that.

It is too late by now I think. Sadly, the voices clamoring for contractionary policy are louder than ever. Just like during the 30s. Just like in Japan for the last 20 years.

 

[rolyaTy]

Wait. Are you guys saying Krugman was right?

He was. About the stimulus and hyperinflation, at the very least.

 

[rolyaTy]

Interesting link rating prognosticators around 2008 elections.

 

[tommyGunZ]

Interesting link rating prognosticators around 2008 elections.

Fascinating. Thanks for sharing.

 

[pantagrapher]

Credibility, Chutzpah And DebtBy PAUL KRUGMANPublished: August 7, 2011 To understand the furor over the decision by Standard & Poor’s, the rating agency, to downgrade U.S. government debt, you have to hold in your mind two seemingly (but not actually) contradictory ideas. The first is that America is indeed no longer the stable, reliable country it once was. The second is that S.& P. itself has even lower credibility; it’s the last place anyone should turn for judgments about our nation’s prospects.Let’s start with S.& P.’s lack of credibility. If there’s a single word that best describes the rating agency’s decision to downgrade America, it’s chutzpah — traditionally defined by the example of the young man who kills his parents, then pleads for mercy because he’s an orphan.America’s large budget deficit is, after all, primarily the result of the economic slump that followed the 2008 financial crisis. And S.& P., along with its sister rating agencies, played a major role in causing that crisis, by giving AAA ratings to mortgage-backed assets that have since turned into toxic waste.Nor did the bad judgment stop there. Notoriously, S.& P. gave Lehman Brothers, whose collapse triggered a global panic, an A rating right up to the month of its demise. And how did the rating agency react after this A-rated firm went bankrupt? By issuing a report denying that it had done anything wrong.So these people are now pronouncing on the creditworthiness of the United States of America?Wait, it gets better. Before downgrading U.S. debt, S.& P. sent a preliminary draft of its press release to the U.S. Treasury. Officials there quickly spotted a $2 trillion error in S.& P.’s calculations. And the error was the kind of thing any budget expert should have gotten right. After discussion, S.& P. conceded that it was wrong — and downgraded America anyway, after removing some of the economic analysis from its report.As I’ll explain in a minute, such budget estimates shouldn’t be given much weight in any case. But the episode hardly inspires confidence in S.& P.’s judgment.More broadly, the rating agencies have never given us any reason to take their judgments about national solvency seriously. It’s true that defaulting nations were generally downgraded before the event. But in such cases the rating agencies were just following the markets, which had already turned on these problem debtors.And in those rare cases where rating agencies have downgraded countries that, like America now, still had the confidence of investors, they have consistently been wrong. Consider, in particular, the case of Japan, which S.& P. downgraded back in 2002. Well, nine years later Japan is still able to borrow freely and cheaply. As of Friday, in fact, the interest rate on Japanese 10-year bonds was just 1 percent.So there is no reason to take Friday’s downgrade of America seriously. These are the last people whose judgment we should trust.And yet America does have big problems.These problems have very little to do with short-term or even medium-term budget arithmetic. The U.S. government is having no trouble borrowing to cover its current deficit. It’s true that we’re building up debt, on which we’ll eventually have to pay interest. But if you actually do the math, instead of intoning big numbers in your best Dr. Evil voice, you discover that even very large deficits over the next few years will have remarkably little impact on U.S. fiscal sustainability.No, what makes America look unreliable isn’t budget math, it’s politics. And please, let’s not have the usual declarations that both sides are at fault. Our problems are almost entirely one-sided — specifically, they’re caused by the rise of an extremist right that is prepared to create repeated crises rather than give an inch on its demands.The truth is that as far as the straight economics goes, America’s long-run fiscal problems shouldn’t be all that hard to fix. It’s true that an aging population and rising health care costs will, under current policies, push spending up faster than tax receipts. But the United States has far higher health costs than any other advanced country, and very low taxes by international standards. If we could move even part way toward international norms on both these fronts, our budget problems would be solved.So why can’t we do that? Because we have a powerful political movement in this country that screamed “death panels” in the face of modest efforts to use Medicare funds more effectively, and preferred to risk financial catastrophe rather than agree to even a penny in additional revenues.The real question facing America, even in purely fiscal terms, isn’t whether we’ll trim a trillion here or a trillion there from deficits. It is whether the extremists now blocking any kind of responsible policy can be defeated and marginalized.

 

[Andy Dufresne]

I actually agreed with the first part of that article.

The second part...not so much.

 

[pantagrapher]

Attacking S&P is dumb. If you disagree with their analysis, then say why. And don't just say, "because 2 trillion is a really big number."

Probably not enough room in his NYT column to get into specifics. He's gone into more detail on his blog over the past week.

 

[MasterofOrion]

I actually agreed with the first part of that article. The second part...not so much.

What I don't like about the article is that the S&P are the boggie man now. First it was Bush, then the teaparty and now S&P. The problem is that S&P is non-partisan and did make this judgement based on politics. We are blaming anyone who is telling us we have a problem. It is a form of denial.It is like your wife stating you need to loose weight (see has) and I respond back in anger ( I did). This is exactly the wrong response. The first step in fixing a problem is recognizing you have a problem. Blaming anyone and everyone for the problem is denial. The proper response is:Yes honey I am fat, I will go on a diet staring now. TY for caring.

 

[Kumerica]

I actually agreed with the first part of that article. The second part...not so much.

What I don't like about the article is that the S&P are the boggie man now. First it was Bush, then the teaparty and now S&P. The problem is that S&P is non-partisan and did make this judgement based on politics. We are blaming anyone who is telling us we have a problem. It is a form of denial.It is like your wife stating you need to loose weight (see has) and I respond back in anger ( I did). This is exactly the wrong response. The first step in fixing a problem is recognizing you have a problem. Blaming anyone and everyone for the problem is denial. The proper response is:Yes honey I am fat, I will go on a diet staring now. TY for caring.

But your wife would still let you pay the bill for the junk food you already purchased, right?

 

[Sergeant Spelt]

So why can’t we do that? Because we have a powerful political movement in this country that screamed “death panels” in the face of modest efforts to use Medicare funds more effectively, and preferred to risk financial catastrophe rather than agree to even a penny in additional revenues.

At some point in the last year or so didn't he come out and agree about the death panel thing?