Showing posts with label Paul Krugman. Show all posts
Showing posts with label Paul Krugman. Show all posts

Apr 25, 2013

Krugman Prevails Again over Austerity

Thomas Herndon devastates
GOP fantasy economics
Updated - 'The really guilty parties here are all the people who seized on a disputed research result, knowing nothing about the research'

"(L)ast week, a startling discovery (by Thomas Herndon, a Ph.D student at the University of Massachusetts-Amherst) obliterated one of the key premises upon which the whole austerity movement was based. ... The discovery of (a) simple math error eliminated one of the key 'facts' upon which the austerity movement was based," notes Henry Blodget.

Economists, notably Paul Krugman, have been tearing out their hair for years trying to reason with Republicans and too many Democratic policymakers.

But facts, like evidence, logic, science and other liberal constructions mean nothing to many Republican policy makers, aka the austerians, no matter how badly Americans families suffer.

Don't look for this new development to change policy radically and immediately; Repubs such as Paul Ryan and company are not easily swayed.

Here's Krugman on the austerity agenda:
You get the idea: The austerity agenda looks a lot like a simple expression of upper-class preferences, wrapped in a facade of academic rigor. What the top 1 percent wants becomes what economic science says we must do.

Does a continuing depression actually serve the interests of the wealthy? That’s doubtful, since a booming economy is generally good for almost everyone. What is true, however, is that the years since we turned to austerity have been dismal for workers but not at all bad for the wealthy, who have benefited from surging profits and stock prices even as long-term unemployment festers. The 1 percent may not actually want a weak economy, but they’re doing well enough to indulge their prejudices.

And this makes one wonder how much difference the intellectual collapse of the austerian position will actually make. To the extent that we have policy of the 1 percent, by the 1 percent, for the 1 percent, won’t we just see new justifications for the same old policies?

I hope not; I’d like to believe that ideas and evidence matter, at least a bit. Otherwise, what am I doing with my life? But I guess we’ll see just how much cynicism is justified.
As John Nichols notes: "Nobel Prize-winning economist Paul Krugman suggests that an essential underpinning of the 'the intellectual edifice of austerity economics' has been called into question. But, adds Krugman, 'the really guilty parties here are all the people who seized on a disputed research result, knowing nothing about the research, because it said what they wanted to hear.'"

See also UMass Econ in the News.

Dec 16, 2012

Krugman on the GOP and Intellectual Degradation

After reading Paul Krugman's column this morning, it's unclear whether Krugman believes the GOP propaganda mill, such as the Heritage Foundation, is composed of people who are lying or delusional.

What is clear is Krugman's utter disgust with the GOP commissars who would happily throw the world into a depression out of lust for the visceral satisfaction sustained by the resulting gutting of Social Security, Medicare and Medicaid.

Nov 29, 2012

Krugman on Paul Ryan: Con Goes On

Paul Krugman this morning:
I wondered recently whether Paul Ryan, who is a con man pure and simple, would be able to step right back into his role as Washington’s favorite Honest, Serious Conservative.

Well, Alec MacGillis appears to have the answer: Foreign Policy Magazine has named Ryan one of its top 10 global thinkers.

And people wonder why I’m so caustic about the Very Serious People.

Sep 10, 2012

GOP Blocks Econ Policies, Then Asserts Policies Have Failed

Paul Krugman: "[The American Jobs Act] bill went nowhere, of course, blocked by Republicans in Congress. And now, having prevented Mr. Obama from implementing any of his policies, those same Republicans are pointing to disappointing job numbers and declaring that the president’s policies have failed.

Aug 15, 2012

Paul Ryan's Insider Trader Scandal May Blow Back onto Romney

Paul Ryan cashes in for $1,000s

This story is not just about Paul Ryan, Washington creature and pampered scion, caught downing two $350 bottles of wine with a hedge fund manager at a D.C restaurant.

This is a venal insider trading story that has the legs and potential to dominate the all-important news cycle for weeks moving past Labor Day.

"Over the weekend, the Richmonder blog broke what looked like a whopper of a story: that Republican vice-presidential hopeful Paul Ryan had lined his pockets from information he had obtained from a now-legendary meeting that took place on September 18, 2008," writes Lynn Parramore.

Parramore notes media avoidance of Ryan's many political problems thus far, as Paul Krugman notes this morning, likely won't persist.

Certainly this insider trading story is moving forward, no matter that some are buying the Romney campaign's knock down that Ryan's trades "were part of a Russell 1000 index fund that automatically traded stocks as part of a pre-set formula," as Benjy Sarlin asserts.

Brad DeLong, professor of economics at the University of California, Berkeley, scoffs at Sarlin's explanation.

Writes DeLong:

There is no way in hell--if you are rebalancing to try to track the Russell 1000 index--you make only 58 trades in a year, that you make 27 of those 58 in large money-center banks, and that 10 of those trades involve shifting your money from Citi to Goldman and back five times.

No way in hell.

I don't know what was going on. But it appears that Ryan's flacks are--for some reason--simply making s@#& up.

Romney and Ryan lying? No.
By Lynn Parramore

On [September 18, 2008], Fed Chairman Ben Bernanke and then-Treasury Secretary Hank Paulson broke the news to congressional leaders that they would have to approve a bailout to avert a complete meltdown of the financial system.

America was lurching toward catastrophe. But some folks were apparently thinking about their stock portfolios. Checking through Ryan’s financial disclosure reports, the Richmonder discovered that Ryan had sold the stocks of several major banks that day, while purchasing – surprise! – stock in Paulson’s old firm Goldman.
Check out the rest of Parramore's piece, because no way this story gets buried.

May 4, 2012

How to End This Depression

End this Depression NOW!
It's obvious who Paul Krugman is talking about when he notes the "depression we’re in is essentially gratuitous."

Gratuitous as in the Republicans' pushing the world into a pit and self-consciously stopping the people and communities from clawing their way out, as the GOP hauls in $millions in campaign contributions, while laughing at the 99 percent.

Writes Krugman:

The depression we’re in is essentially gratuitous: we don’t need to be suffering so much pain and destroying so many lives. We could end it both more easily and more quickly than anyone imagines—anyone, that is, except those who have actually studied the economics of depressed economies and the historical evidence on how policies work in such economies.

The truth is that recovery would be almost ridiculously easy to achieve: all we need is to reverse the austerity policies of the past couple of years and temporarily boost spending. Never mind all the talk of how we have a long-run problem that can’t have a short-run solution—this may sound sophisticated, but it isn’t. With a boost in spending, we could be back to more or less full employment faster than anyone imagines.
"If you want to ask 'what is the structural problem with the U.S. economy?' I say it's not a structural problem with the economy, it's a structural problem with our politics; in particular the fact that we have one party that has gone completely off the deep end, and is not interested at all in helping to run this country unless they get to run it all." (Economic Policy Institute, May 2, 2012. Video below)

Oct 11, 2011

Paul Krugman Is Tired of Trying to Reason with You People

Read Paul Krugman for a dose of sanity during a crazy period of American history.

Krugman, a Nobel-prize winning economist, is the author of The Return of Depression Economics (W.W. Norton and Company; 2000) and a large body of work that is most frequently ignored by President Obama's economic team.

From Krugman on Plutocrats and Occupy Wall Street:
It remains to be seen whether the Occupy Wall Street protests will change America’s direction. Yet the protests have already elicited a remarkably hysterical reaction from Wall Street, the super-rich in general, and politicians and pundits who reliably serve the interests of the wealthiest hundredth of a percent.

And this reaction tells you something important — namely, that the extremists threatening American values are what F.D.R. called “economic royalists,” not the people camping in Zuccotti Park.

Oct 7, 2011

The Pathology of George Will

George Will continues his descent into paranoia as his excursions from reality become more frequent.

It did not take long to brand as Soviet-minded 'collectivists' the vast majority of Americans who want reform and an accounting of the Wall Street gang—a small number of people who brought us the global economic crisis and then were bailed out with $700 Billion in tax dollars.

By Paul Krugman

George Will believes that Elizabeth Warren wants to turn him into a collectivist slave.

Bwahahahaha. First, however, we will turn him into a mindless automaton by forcing him to ride high-speed trains.
George Will's job as Wall Street apologist and defamer of the American people is never done. But does he really believe slavery is coming?

Jul 29, 2011

Krugman Hits Centrist Drivel

"Some of us have long complained about the cult of 'balance,' the insistence on portraying both parties as equally wrong and equally at fault on any issue, never mind the facts. I joked long ago that if one party declared that the earth was flat, the headlines would read 'Views Differ on Shape of Planet.' But would that cult still rule in a situation as stark as the one we now face, in which one party is clearly engaged in blackmail and the other is dickering over the size of the ransom?

"The answer, it turns out, is yes. And this is no laughing matter: The cult of balance has played an important role in bringing us to the edge of disaster. For when reporting on political disputes always implies that both sides are to blame, there is no penalty for extremism."
- Paul Krugman, NYT

Jun 13, 2011

Krugman Eviscerates Kill-Medicare Pols, Ryan and Lieberman

So desperate are Republicans to kill Medicare, they have threatened to crash the economy if Obama doesn't let them gut the popular program.

Now Joe Lieberman has chimed in.

Paul Krugman shines some needed light on the kill-Medicare debate.

Below is an excerpt with a link to the Medicare discussion at The Democratic Strategist.

Writes Krugman:

Every once in a while a politician comes up with an idea that's so bad, so wrongheaded, that you're almost grateful. For really bad ideas can help illustrate the extent to which policy discourse has gone off the rails.

And so it was with Senator Joseph Lieberman's proposal, released last week, to raise the age for Medicare eligibility from 65 to 67.

Like Republicans who want to end Medicare as we know it and replace it with (grossly inadequate) insurance vouchers, Mr. Lieberman describes his proposal as a way to save Medicare. It wouldn't actually do that. But more to the point, our goal shouldn't be to "save Medicare," whatever that means. It should be to ensure that Americans get the health care they need, at a cost the nation can afford.

... Medicare actually saves money -- a lot of money -- compared with relying on private insurance companies. And this in turn means that pushing people out of Medicare, in addition to depriving many Americans of needed care, would almost surely end up increasing total health care costs.

The idea of Medicare as a money-saving program may seem hard to grasp. After all, hasn't Medicare spending risen dramatically over time? Yes, it has: adjusting for overall inflation, Medicare spending per beneficiary rose more than 400 percent from 1969 to 2009.

But inflation-adjusted premiums on private health insurance rose more than 700 percent over the same period. So while it's true that Medicare has done an inadequate job of controlling costs, the private sector has done much worse. And if we deny Medicare to 65- and 66-year-olds, we'll be forcing them to get private insurance -- if they can -- that will cost much more than it would have cost to provide the same coverage through Medicare.

Jan 9, 2010

Stiglitz, Johnson, Krugman Sound Alarm

Three economists who during the Bush-Cheney years became political-economic pundits of sorts are sounding the macro-economic alarm.

As President Obama turns the political focus onto “jobs, jobs, jobs,” Joseph Stiglitz, Simon Johnson and Paul Krugman warn of a "enormous catastrophe" (Johnson), and real-economy circumstances about which economists are "almost universally pessimistic (Nobel Laureate Stiglitz)."

One understands the political imperative of not placing all bets [political-economic initiatives] on a single swing when mainstream Republicans will happily court more catastrophe if they can garner a political advantage out of the rubble, but Obama needs to swing for the fences and follow the advice of another economist, Nobel Laureate Krugman, who warns that "2010 [may] be a year that began in false economic hope and ended in grief."

Dec 21, 2009

Krugman: Kill the Filibuster

Putting aside the notion now pushed by Republicans that policy such as health care reform [vis a vis say war] must have overwhelming, super-majority support before it can legitimately be passed into law and sustained as public policy, the Republicans and tacitly most Democrats support anti-democratic, dangerous legislative procedures choking off the will of the American people.

The most pernicious is the U.S. Senate filibuster, and its abolition is a reform needed, as Paul Krugman writes, "unless you want the nation to sit motionless, with an effectively paralyzed government, waiting for financial, environmental and fiscal crises to strike."

Will Senate majority leader Harry Reid listen to these concerns? Does Harry Reid think?

Dec 18, 2009

Krugman: Don't Kill It

Update: NYT: "David Axelrod, Mr. Obama’s senior adviser, began the day by calling in to MSNBC to urge the party to hold together, warning of a 'tragic outcome' if Democrats failed to pass a bill that the White House says would expand health coverage while reining in costs." Why if so much is at stake do the Senate Dems not ditch the filibuster?

Kill the filibuster. Blast the President. But pass health care, says Paul Krugman.

Congress better fix the fracking thing, or Sen. Jim Demint's (R-SC) words on health care [Obama's "Waterlooo"] will be proven prophetic. And Demint is a bigoted, religious whackjob.

Does Harry Reid think that the political message that America cannot abide obstruction and business as usual at this time of crisis won't play well, so he just has to keep the filibuster?

Aug 21, 2009

Obama and Progressives

President Obama was elected as an agent of change with the energetic support of the peace-and-justice, civil-liberties-loving, Constitution-following, reality-based community.

So it comes as a disappointment to see Obama bow to those who are opposed to change and hostile to civil liberties.

What's going on?

Mike Madden in Salon says, "Obama's just not that into you," asking if progressives and the president are really meant for each other.

Paul Krugman says, "So there’s a growing sense among progressives that they have, as my colleague Frank Rich suggests, been punked. ... So progressives are now in revolt. Mr. Obama took their trust for granted, and in the process lost it. And now he needs to win it back."

Obama needs to make a decision: Cater to Sarah Palin and her off-the-wall, white GOP or make good on the shiny, progressive promises of the last campaign that saw Americans break all manner of new ground in their thirst for real change.

May 4, 2009

Low Wages Are No Good

You offshore American jobs and people lose their jobs.

No good, not for Americans and not for the economy.

Krugman offer some advice against falling wages; might seem obvious but Republicans love the idea of falling wages.

Concern about falling wages isn’t just theory. Japan — where private-sector wages fell an average of more than 1 percent a year from 1997 to 2003 — is an object lesson in how wage deflation can contribute to economic stagnation.

So what should we conclude from the growing evidence of sagging wages in America? Mainly that stabilizing the economy isn’t enough: we need a real recovery.

There has been a lot of talk lately about green shoots and all that, and there are indeed indications that the economic plunge that began last fall may be leveling off. The National Bureau of Economic Research might even declare the recession over later this year.

But the unemployment rate is almost certainly still rising. And all signs point to a terrible job market for many months if not years to come — which is a recipe for continuing wage cuts, which will in turn keep the economy weak.

To break that vicious circle, we basically need more: more stimulus, more decisive action on the banks, more job creation.

Credit where credit is due: President Obama and his economic advisers seem to have steered the economy away from the abyss. But the risk that America will turn into Japan — that we’ll face years of deflation and stagnation — seems, if anything, to be rising.

Apr 27, 2009

Krugman Blasts Bank Execs

I wish the Obama administration would ask for Krugman's resignation at the Times, and put this guy in charge of the economic recovery.

From Krugman:

On July 15, 2007, The New York Times published an article with the headline 'The Richest of the Rich, Proud of a New Gilded Age.' The most prominently featured of the “new titans” was Sanford Weill, the former chairman of Citigroup, who insisted that he and his peers in the financial sector had earned their immense wealth through their contributions to society. ...

All of which explains why we should be disturbed by an article in Sunday’s Times reporting that pay at investment banks, after dipping last year, is soaring again — right back up to 2007 levels. Why is this disturbing? Let me count the ways.

Apr 17, 2009

It's D-Day, Shiller, Roubini, Stiglitz, Kuttner and Krugman Sound Alarm

Just saying.

- Roubini's Pissed-Off and Stiglitz Goes Ballistic

- Robert Shiller: Depression Lurks Unless There’s More Stimulus

- Krugman: Green Shoots and Glimmers

- Kuttner: Will Obama's Economic Team Lead Him Off a Cliff?

Politically, it's time for a for-us or against-us ultimatum to the GOP while people still recognize that Bush and his GOP brought us to this mess. The TEA Party was a joke, for now.

But the idea that we have to try the recovery program now and then try something else, more comprehensive, in the Fall ain't going to work while the economy continues its slide and the GOP continues trring to appropriate unfocused frustration and aggression.

Be bold and great forces of the American people will come to your aid. "Choo-choos," as some the Tea Set derogated the labor-intensive high-speed rail project should be just the beginning of a massive public works program. [I know we have some begun now.]

And everyone knows that the fare of Robert Gibbs' “you will see in a systematic and coordinated way the transparency of determining and showing to all involved some of the results of these stress tests” didn't play and appears emblematic of opacity.

This recovery needs to be framed as Obama against Newt, Rush, Sarah Palin and the GOP.

Spook them [the GOP] , scare them [the public], shake the markets.

I know this more confrontational political strategy is being considered; well now it's D-Day, and Gen. Patton-Obama ought to lead the landing this time and all operations thereafter.

A Vision for High Speed Rail

Roubini Says Stress Test Data Overstate Macro Econ Health

Update II: As those elitist liberals hash out how to avoid a depression, the GOP and its leading journals, Human Events for example, are busily at work solving the real problem: Investigate NOW The Compelling Evidence That Barack Obama Was Born In Africa! Tea anyone, perhaps some Kool-Aid? [Photo by Russell Wallace taken at the state capital TEA Party where some 3,000 white people gathered to protest anything not Republican.]

Update: Paul Krugman in his column in the Times sums up a note of optimism, after expressing similar concerns of Nouriel Roubini's in the piece below: Krugman believes that Obama administration economists understand the imperative of: "Persistence." Without writing it, Krugman is suggesting that the GOP TEA set should not deter the course for economic recovery. In other words, ignore the fools and press on.

It's not Nouriel Roubini's (Dr. Doom) job to make us feel good. Good thing. [By the way, you can get a free subscription and access to Nouriel Roubini's Global EconoMonitor and you should consider it.] Roubini calls the stress tests "fudge tests".

On Nouriel Roubini's Global EconoMonitor, Nouriel explains that actual macro data for 2009 are already worse than the more adverse scenario in the stress tests. The actual macro data for Q1 on the three variables used in the stress tests – growth rate, unemployment rate, and home price depreciation – are already worse than those in FDIC baseline scenario for 2009 aand even worse than those for the more adverse stressed scenario for 2009.

Check out: Stress Testing the Stress Test Scenarios: Actual Macro Data Are Already Worse than the More Adverse Scenario for 2009 in the Stress Tests. So the Stress Tests Fail the Basic Criterion of Reality Check Even Before They Are Concluded ...

Conclusion: Actual macro data for 2009 are already worse than the more adverse scenario in the stress tests. These are not stress tests but rather fudge tests

This financial crisis was one due to opacity and lack of transparency in financial markets and due to regulators that were asleep at the wheel. But now the administration officials and regulators have decided to add to the fog of opacity by adding to the lack of transparency in financial markets: regulatory forbearance that allows banks such as Well Fargo to declare charge-off rates and to set aside reserves for loan losses that make no sense relative to the state of the economy and relative to their loan book; partial suspension of mark-to-market accounting that allows – starting with Wells Fargo – to hide losses and reduce the amount of write-downs on securities; likely reinstatement of some variant of the uptick rule that will restrict shorting of stock and will artificially boost equity prices (a form of legalized manipulation of the stock market by regulators that are trying to prevent short-sellers to do their job, i.e. make stock prices reflect fundamentals and prevent bubbles in stock prices); and now stress tests that fail the basic test of a reality check by making assumptions – that even in the worst case scenario that is designed from start to be too mild to be a sensible realistic stress test scenario – that are obsolete based on actual data for the economy as of Q1 of 2009. Call it a generalized 'fudge test' rather than a true 'stress test'.

Apr 16, 2009

Krugman Says 'Too many narratives'

Update: See Andrew Leonard's The Prophets of Doom - "Meet the Cassandras, 14 economists, bloggers, politicians and businesspeople of all political stripes who have become the most strident critics of President Obama's stewardship of the economy" in Salon.

In the face of know-nothing obstruction and demagoguery from the right, the Obama administration is still drawing criticism from the left for its economic recovery efforts.

Must be fun working at the White House.

Paul Krugman's blog today, Too many narratives, links to Brad DeLong and Matthew Yglesias, two perceptive writers, and all are worth a read.