The administration has had multiple big victories in Congress, most notably on health reform, yet President Obama’s approval rating is weak. What follows is speculation about what’s holding his numbers down: He’s too liberal for a center-right nation. No, he’s too intellectual, too Mr. Spock, for voters who want more passion. And so on.Wow. I remember when the discrepancy was he's so much more well-liked than any of the policies his Congress is enacting. I'm going to adopt the hypothesis that there's no discrepancy at all.
Krugman goes on to say that people are mainly just unhappy about the painful economic realities, and Obama should just do things that will improve the economy and not worry about what people will say and think about the specific policies. Just do what will work, let that happen, and the people will be happy again.
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118 comments:
Krugman seems to be saying Obama has not been doing what Obama thinks will work?
For once I agree with Krugman, at least in his descriptive capacity:
But the only real puzzle here is the persistence of the pundit delusion, the belief that the stuff of daily political reporting — who won the news cycle, who had the snappiest comeback — actually matters.
Exactly. But in his prescriptive capacity, Krugman is, as always, deeply deluded and wildly fantastic.
The best way for Mr. Obama to have avoided an electoral setback this fall would have been enacting a stimulus that matched the scale of the economic crisis...."
Krugman continues to flog the disprovable hypothesis that a really really huge stimulus would have made all the difference.
To his personal chagrin, he appears to be the only pundit that Obama doesn't listen to.
I've started calling the (permanently?) unfinished hotel at Regent and Monroe the OE Hotel : the Obama Economy Hotel. I pass it every day on my bicycle on the way to work.
The question is: Will it be finished before that really big hotel in North Korea?
Maybe Obama's legislative achievements aren't really his. I don't recall him working that hard -- overtly -- to get them passed.
MadisonMan wrote: Maybe Obama's legislative achievements aren't really his. I don't recall him working that hard -- overtly -- to get them passed.
Nancy Pelosi did the work. Obama got the credit. It's not fair -- for either of them.
You can fool all the Krugmans all the time, and you can fool the liberal media some of the time, but you cannot fool all of the the Americans watching a con man lying through his teeth all of the time now.
I love all the articles about how much he's accomplished, that fail to mention he couldn't even convince Congress to write up a budget this year.
Just add a bit of sugar and the yeast will prosper and be happy. If people were the sort of fungus Krugman thinks they are his advice would be on the mark.
Obama will not rest until the economy improves.
Or until tee time.
But he'll remain distracted during his chip shots, and have a furrowed brow.
A victory for Obama isn't necessarily a victory for the people...what with this being a democracy and all.
Krugman fails to either mention or perhaps notice that Obama's so-called "victories" are unpopular with a majority of the people. Then he prescribes remedies even the Europeans are laughing at.
wv: dowskipp (no joke)
The unwritten assumption in Krugman's piece is that America needs a savior, a leader, a top-down commander to solve its problems.
...because the American people can't solve the problems themselves. They can't just, say, get to work doing productive things, saving money, and making tough choices to benefit themselves and their families in the long-term.
Instead, Krugman insists that our future well-being must come from the top:
The best way for Mr. Obama to have avoided an electoral setback this fall would have been enacting a stimulus that matched the scale of the economic crisis.
And who would get this stimulus money? The friends of Krugman and Obama who are connected to their politico-academic-media establshment would! Basically, Krugman is saying that Obama should pay off more of his patronage clients with taxpayer money and that would solve his popularity problem. Yeah, right...
But... wait a sec... Where have I seen this plot before? The giant government, the need-based spending, the patronage? Oh, yeah, it's the distopian America that Ayn Rand portrayed in Atlas Shrugged. Too bad the Republicans have been shitting on objectivist ideas for so long now; maybe they could learn a thing or two about how to deal with the current situation.
"Just do what will work ..."
If only. But that requires O to be pragmatic, conerned with real-world stuff, that some (a certain lawprof comes to mind) unaccountably thought he was. Alas, he turned out to be pretty much what was in front of everyone's eyes all along -- an academic with no executive or private sector experience who disdains real-worldism in favor of theorizing, and whose only real accomplishment was writing two books about himself. True to form, O's answer to every question comes in the form of disconnected rhetoric -- it's what got him this far and it's pretty clearly what he expects will work for him again. But that's not likely to morph into "just do what will work" anytime soon.
That's life in the Time of Hope & Change.
So Obama keeps pushing these laws and every time he does, his popularity dwindles.
Gee, um, maybe its because WE DON’T LIKE HIS LAWS. I know shocking idea and all that.
Also getting half the country covered in oil can’t have helped much. I mean there is that, too. You think the people in Louisiana losing their jobs are going, “well, thank God they passed that financial regulation.”
I swear, some people are just slow.
As Pogo hints, who was defeated in these Obama victories? The people had to kick the Repubs in the ass to get them to fight at all. Obama won some battles and Krugman is surprised that the defeated don't immediately surrender. Too bad we don't have gulags, huh Paul?
When you are smarter than everyone else, democracy sucks.
This may sound odd but I've seen President Obama as riding the coattails of the democratic congress. Yes he manned the "bully pulpit" more than a few times but the agenda-setting and "ramming through" has been congressional leadership work. Too often I get the impression BO will accept anything that looks or smells like a ________________ (i.e. healthcare bill, climate bill, immigration reform)
In a phrase:
He's a poor leader
A Duck Soup Administration if there ever was one.
Dem pollster Stan Greenberg's recent Democracy Corps survey suggests that opposition to Obama policies are driving Indi and GOP enthusiasm to vote, while the economy (especially unemployment) is depressing Dem enthusiasm.
Not only did Obama not ask the turtle, he ignore the turtle while it emphatically said no.
"When you are smarter than everyone else, democracy sucks."
LOL
He rammed the policies through without any care to build a consensus. The nation's business community has been destabilized by his interventions, his incredibly long bills (2000+ pages which no one quite understands) and he's largely regarded as a racist creep (the Boston police situation clarified that for all but the most clueless).
Until he got elected he was for the numbers on every issue. Now he's against the numbers on every issue: most recently coming out in favor of illegal immigration, and supporting the Mexican president at the cost of his own border.
Successful despots know that it is better to be feared than to be loved.
One needs only to kill or imprison but a few; it encourages the others.
Might I suggest the Gulag South Chicago?
The question is: Will it be finished before that really big hotel in North Korea?"
The thing reminds me of North Korea; spartan, concrete, empty.
People don't dislike, they HATE Obama because he is out to destroy them. People are funny that way.
Obamanomics is best referred to as Ba wreckonomics.
The administration has had multiple big victories in Congress, most notably on health reform, yet President Obama’s approval rating is weak
On Mondays, Krugman writes about how these successes have been overlooked and the President hasn't been given enough credit.
On Wednesdays, Krugman writes about how Obama hasn't done enough.
On Fridays, Krugman writes about how the Republicans have obstructed each of these progressive policies that are so good for the country.
It's called the multiplier effect. Multiple Krugmans.
Just like everyone else, and I mean EVERYONE, Krugman has no idea what these Obama victories mean. They are thousands of pages and will cost trillions of dollars. That's all anyone knows.
You're not especially good at reading comprehension, Ann Althouse. Kind of like a lot of your fanbase here. you falsely represent Krugman's words.
Krugman, from the linked article:
"In short, it looks as if the administration itself was taken in by the pundit delusion, focusing on how its policies would play in the news rather than on their actual impact on the economy. "
Nowhere I see does he say, as you try to paint him with: "Just do what will work, let that happen, and the people will be happy again."
Krugman is clearly saying to reduce the pundit obsession (Rahm calls David Brooks frequently) and instead focusing on real improvements for real people. Shocking.
For November, Krugman suggests:
"Mr. Obama’s best hope at this point is to close the “enthusiasm gap” by taking strong stands that motivate Democrats to come out and vote."
And it seems the President is doing this, as his strong comments against the Republican/Ben Nelson filibuster of extending unemployment benefits demonstrates.
Obama's main failing has been in being too solicitous of Republican support long after it was clear they are pursuing a scorched earth strategy.
Republicans, meanwhile, have stressed the need to return to the Bush policies that got us into this mess to begin with.
That article is a hoot. Krugman's point of view is that everybody in America is delusional except for him.
Krugman still believes that a President can micormanage an economy. Sort of gives an insight into his pseudo-Marxist beliefs.
We need a 2nd American Revolution. This time Obama = King George.
bagoh:
"Krugman has no idea what these Obama victories mean. "
Bullshit. Regurgitated talking points that are not based on Krugman's actual writings on these bills.
Your avatar should be a parrot.
Bush's policies didn't get us into this mess.
AL:
You're not especially good at reading comprehension, Ann Althouse.
*snort*
What got us into this mess was 30 years of spending like drunken sailors. Everything else is peripheral to that.
Even funnier: AlphaSockPuppet scolding anyone about regurgitating talking points. :)
Alex, somehow I doubt you can describe the differences between Marxist and Keynesian economics.
To call Krugman a Marxist is idiocy.
Scott, you, on the other hand, have an appropriate avatar: a vegetable.
AL:
The difference between Marxism and Keynesinan is a matter of degree. Keynesians believe in government interference up to a point, Marxist believe in taking over the entire private sector.
Tax Cuts.
Alex, thanks for that demonstration of ignorance.
GM : explain the causality link between tax cuts and the economic crisis. I'm waiting.
President Obama this morning, turning up the heat on the filibustering Republicants:
"A majority of Senators have tried not once, not twice, but three times to extend emergency relief on a temporary basis," Obama said from the Rose Garden, surrounded by a handful of individuals whose unemployment insurance had run out because of senatorial dithering. "Each time a partisan minority in the Senate has used parliamentary maneuvers to block a vote denying millions of people who are out of work much ended relief. These leaders in the Senate who are advancing a misguided notion that emergency relief somehow discourages people from finding a job should talk to these folks. That attitude, I think, reflects a lack of faith in the American people."
Instead, the Republicans attack the unemployed as lazy.
(And Senator Ben Nelson supports the their filibuster).
No, he’s too intellectual
Even my very liberal husband, who voted for Obama, agrees with me that Obama is didactic, condescending, and dripping with disdain for us ordinary folk.
He also agrees that there is no solid evidence to prove that Obama is an intellectual, if by "intellectual," you mean an intelligent deep thinker.
I don't have a PHD in economics or teach at Princeton. I will never receive the Nobel Prize! But I have read about all the cash that is sitting on the sidelines. Two trillion in corporate cash and one trillion in bank reserves! That is the massive stimulus that the economy needs!
Why is all that cash being kept out of the market? We all know why! Everyone is afraid of the next shoe to drop! Everyone is worried about all of this "success" that President Obama has already acheived!
Alpha,
Are you concerned with the deficits that Obama is running? Were you happy with the deficits that Bush ran?
"Krugman continues to flog the disprovable hypothesis that a really really huge stimulus would have made all the difference. "
It's a pretty simple concept. Private sector spending was way way down. The only potential source of spending, the lifeblood of an economy, was government.
What we got was real small, far smaller than the shortfall in private sector spending.
Republicans got their massive tax cuts plus deregulation of finance and energy and other. Judge it by results! We nearly went through another Great Depression!
Conservative economics has been given more than a fair chance and has failed miserably.
The central problem with the Obama Administration and the liberal/left overall (broad strokes please) when it comes to the economy is that they see the private sector as secondary to the public sector. That is, the purpose of the private sector is to provide the resources and capital for the state to use and distribute.
State interest first, economic concerns second. The economy in service to the state.
No, they're not socialists or Marxists. They're statists.
Until they jettison that view, the economy will struggle to recover.
And it’s working: by blocking Democratic efforts to alleviate the economy’s woes, the G.O.P. is helping its chances of a big victory in November.
Krugman's "stab in the back" theory. But what exactly were these "Democratic efforts to alleviate the economy's woes" that Republicans blocked? A larger and even more reckless stimulus -- check. But it was the Administration and Congressional leadership, too. They didn't want the price tag to exceed a trillion dollars. They were reading not the Republicans but the moderate and conservative Dems whose votes they needed. I suppose you could argue that the Republicans annoying habit of running candidates against Democrats in congressional districts, causing moderates to worry about such arcane, obscure matters as their voting records, constitutes a de facto form of obstruction. If Republicans would just stand down and leave voters with only one choice for Congress -- a Democrat -- then Democrats could have spent much, much more. Damn Republicans!
But seriously, what is Krugman talking about? What have the Democrats proposed as economic relief since early 2009?
It's a pretty simple concept. Private sector spending was way way down. The only potential source of spending, the lifeblood of an economy, was government.
But doesn't it matter what the money is spent on?
So much of this stimulus went to state and local governments to plug holes in their budgets. Which mean a lot of the money went to shore up underfunded pension funds. Was that stimulative? Or was it just putting off some very uncomfortable political decisions for local Democrats for another election cycle?
Your "simple" idea might have had some merit when government's debt is manageable. But given the size of the debt, you could argue that the federal government has been engaged in Keynesian stimulus for 75 years.
Knowing that every penny of the stimulus was borrowed -- knowing that we'd be paying it all back plus interest -- might have caused business to use whatever new revenues were pumped into the economy to hedge against the inevitable inflation and tax increases coming to pay for the stimulus.
I'm beginning to suspect Keynesianism is invalid in an era of greater financial transparency. In the 30s, federal spending was just mo' money. But now, too many economic decision-makers see a bigger picture, and that mitigates any good the stimulus could have done.
Allen:
"Are you concerned with the deficits that Obama is running?"
Yes, they are too small given the economic conditions. It is the wrong time to try to reduce the deficit, like a person picking a fight when they are weak.
Best way to reduce the deficit is through economic growth. Given the high unemployment that is our biggest impediment to growth.
"Were you happy with the deficits that Bush ran?"
No, I was upset with the massive levels of deficit spending because I know they have one standard for Republicans and another for Democrats.
Plus, the Bush deficits didn't really invest in the country, just to dig us deep into two wars and to give out huge tax breaks to the richest Americans. It's not like we got better infrastructure, more jobs or are better prepared for our future as a result.
Still waiting for the causality link between the Bush tax cuts and the economic crisis. *crickets*
Bush's tax cuts are the biggest driver behind today's deficits. What did our nation get for that?
(Hint: "jobs" is not a correct answer)
But I'm not hanging out here anymore, so have fun, all. Adios.
AL - the biggest driver of today's deficits is out of control spending.
Alpha Lib's intelligence to word density is particularly low today.
The strain is showing of having to support the train-wreck that is the Obama administration.
Massive levels of deficit under Bush? Are you serious? Too small of deficits under Obama? Now, you're kidding, aren't you?
Then there's this:
"Still waiting for the causality link between the Bush tax cuts and the economic crisis. *crickets*"
Haven't said his tax cuts caused the economic crisis because I don't think they were a major factor, thought they are the number one reason for the debt.
Instead, I'd point more to his deregulation/lax regulation of the financial industry as a key cause. This is something that some Democrats also share blame for (see repeal of Glass-Steagall, etc).
Then there's ignoring the housing bubble -- Krugman called that years in advance of the bubble bursting.
Plus, the Bush deficits didn't really invest in the country, just to dig us deep into two wars and to give out huge tax breaks to the richest Americans. It's not like we got better infrastructure, more jobs or are better prepared for our future as a result.
Well over the course of Bush's tenure, the two wars have cost about $1 trillion. The debt increased from $5 trillion to $10 trillion so its anyone's guess where the other $4 trillion went.
Then again I'm puzzled how you see Bush's deficit spending is bad while Obama's is good. I mean using logic and all.
Also, the tax cuts benefitted anyone who was paying Federal income tax. As the 'rich' already pay the lion's share of federal income taxes, it stands to reason they'd see a benefit too.
lulz now Alpha Troll is saying that the Bush tax cuts didn't cause the economic crisis. But that will get him in HOT water with his progressive friends over on Huffington Post.
We face $1-$1.5 trillion deficits for the next decade.
The Bush tax cuts ($1.2 trillion over 10 years), which will expire, will generate about $120 billion in revenues per year. Assuming other factors stay the same.
For someone to say the Bush tax cuts are the chief contributor to the deficits is just simply not true.
Proof? The tax cuts will expire this year. Next year we'll still have $1 trillion-plus deficit.
Instead, I'd point more to his deregulation/lax regulation of the financial industry as a key cause. This is something that some Democrats also share blame for (see repeal of Glass-Steagall, etc).
William Clinton is on record defending his signing of the bill and insists it actually softened the crisis.
You can read it here
Bill Clinton (Sept. 24): Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn't signed that bill. ...You know, Phil Gramm and I disagreed on a lot of things, but he can't possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I'd be glad to look at the evidence. But I can't blame [the Republicans]. This wasn't something they forced me into.
Alpha;
focusing on real improvements for real people.
I guess the people just haven't appreciated all of those jobs saved
"Each time a partisan minority in the Senate has used parliamentary maneuvers to block a vote denying millions of people who are out of work much ended relief."
Undoubtedly some politics involved but the underlying principle is
show me the money first
And from the news report:
Obama noted that Republicans voted to extend jobless benefits under his GOP predecessor, George W. Bush, but had been unwilling to do so now.
Oh wait I thought not doing what Bush had done was good,!?
AlphaLiberal said...
"No, I was upset with the massive levels of deficit spending because I know they have one standard for Republicans and another for Democrats."
How true.
Krugman used to bitch about Bush's deficits, now he thinks the deficit ain't nearly big enough.
Alex said...
What got us into this mess was 30 years of spending like drunken sailors. Everything else is peripheral to that.
As the proud father of a sailor, I resent the comparison to politicians. Most sailors - drunk or sober - have more class, more character, and better fiscal responsibility than politicians.
Larry - my apology to seamen.
I guess we got it wrong in the '60s!
War isn't good for the economy!
AlphaLiberal wrote: It's a pretty simple concept. Private sector spending was way way down. The only potential source of spending, the lifeblood of an economy, was government.
Or tax cuts. But let's buy into the big government mythology for one second. Great stimulus!
All we have are models -- predictive models that failed and statistical models that attempt to filter the data since then.
In terms of predictive models, consider that the economists in the administration that worked on the near-$1T stimulus are the ones that came up with the models that Obama used to promote it.
These models turned out to be wildly optimistic.
The defense, by most of the stimulus's defenders was to beg for more time (Krugman, begging for more money, being an exception). Here's a highly sympathetic treatment by Media Matters:
Additionally, on July 10, The Wall Street Journal reported on its most recent survey of 51 economists on the state of the economy, finding that while only eight of the economists supported an additional stimulus, "[w]hen asked how much the stimulus has helped the economy, 53% of respondents said it has provided somewhat of a boost but that the larger effect is still to come."
The problem is that the article is a year old. That's from July 10, 2009. Two thousand and Nine.
Here’s another article from 2009, this one from a New York Times ‘Room for Debate’ column.
The 'green shoots' optimism of the stimulus' supporters looks awfully laughable now. The pessimist from Cato, on the other hand, nails it:
"the stimulus plausibly shifted the timing of economic activity without necessarily improving the long-term path."
We've had more time now. How's that worked out?
As a percentage of GDP tax revenues have been roughly level since the fifties. Tax cuts (even if they led to lower revenue, which they don't) are too minor to be the problem. The guilty variable is simply government spending which is way up since then and rising rapidly now.
Graphically:
http://reason.com/blog/2010/07/17/its-the-spending-stupid
AL, I think the title of the article linked is aimed at you.
Henry:
Re economists, I get a kick out of the media when it asks Mark Zandi [an economist who gave some advice to the stimulus crafters] what he thinks of the stimulus so far? As if he would trash his own [i presume well-paid] work.
I thought the "Obama paradox" was the episode in the original series that space continuim that the enterprise went through to find the Riddler and the other dude who were both half black and half white but on different sides.
It was post racial science fiction as I recall.
Much like the one when Capt Kirk gave Uhuru some tongue!
Alpha
> President Obama this morning, turning up the heat on the filibustering Republicants:
Look if you are going to give the president head like that, you should cup his teabag, too.
But yeah, do explain to me how it is that taking money from the productive and giving money to people who are not working gets them back to work.
> It's a pretty simple concept. Private sector spending was way way down. The only potential source of spending, the lifeblood of an economy, was government.
Or, have the government take a lot less of our money and give it back to us.
> What we got was real small, far smaller than the shortfall in private sector spending.
And still it would actually have cost the taxpayers, or more like the children of the taxpayers, far less money if they judge gave every person whose job was “saved or created” by Obama a check for $100,000.
> Judge it by results! We nearly went through another Great Depression!
Okay what specific regulation did the republicans pushed for and got that cause this mess. Go for it.
The real problem has been government interference in the economy. Where do you think the NINJA loans came from?
> Conservative economics has been given more than a fair chance and has failed miserably.
So let’s try socialism instead! Because that worked swimmingly!
> Yes, [the deficits] are too small given the economic conditions
Okay, we are done here. No need to say more.
You, sir, are a complete idiot.
Wait, are you the president in real life?
> Best way to reduce the deficit is through economic growth.
And you apparently think that the best way to grow the economy is to take the money from private businesses and give it to bureaucrats who have never run a business in their lives. Brilliant!
> Bush's tax cuts are the biggest driver behind today's deficits.
Lol a deficit is a refusal to stop spending more money than you take in. Bush is not responsible for Obama’s decision to spend more money than he is taking in. duh.
Trooper:
LOL - you spelled Uhuru correctly. What were the odds?
Uhura.
If tax cuts are the problem, then Obama should raise them a bunch and fix it. Absurd? Of course. Imagine what would happen. You don't need my help.
Or, cut taxes a bunch. Absurd? Maybe. Imagine what would happen.
Mad Man:
LOL again! I was wrong heh.
As others have noted, when people want to get out of a hole and those with the shovels only want to dig, instead of filling in the hole, it doesn't take much in the way of good sense to figure out why the people are unhappy.
Alex said...
We need a 2nd American Revolution. This time Obama = King George.
In his wildest dreams.
AlphaLiberal said...
You're not especially good at reading comprehension, Ann Althouse. Kind of like a lot of your fanbase here. you falsely represent Krugman's words.
...
And it seems the President is doing this, as his strong comments against the Republican/Ben Nelson filibuster of extending unemployment benefits demonstrates.
Obama's main failing has been in being too solicitous of Republican support long after it was clear they are pursuing a scorched earth strategy.
Instead, the Republicans attack the unemployed as lazy.
Alpha never heard of, "I won".
PS All the Republicans want is for the unemployment checks to be paid for. They've suggested using unspent stimulus money, but the Demos resist because we all know what a howling success the stimulus has been.
The Republicans also note that paying unemployment beyond a given time frame acts as a disincentive to going back to work. History is fairly clear here. Of course, the Zero and his Congress making war on business does stand as an impediment to new jobs.
All that said, and it's easily documented, people like Alpha still feel obliged to lie - although this is the strategem coming down from the top. All the Demos want is another boodoggle to buy votes.
Because it's all they have left.
Krugman is an idiot if he can't see that Obama has not had a "success" if all he's done is pushed through legislation that the public doesn't want, with his majorities. "Success" is when you convince the country that they want the crap you're serving. Obama has not done that. Fail.
LOL - you spelled Uhuru correctly. What were the odds?
I would have got that in one, but only because I bought a Black Uhuru cd years ago for the singular reason that they did a cover of Peter Gabriel's "Mercy Street" and I'm definitely a Gabrielphile...in a musical sense, anyway. For my money, it doesn't get much better than "Solsbury Hill". It's almost Alice In Chains "Nutshell" good.
Gee, you'd think a super bright guy like Krugman could figure this "paradox" out. {/snark}
Befuddled LIBERALS scratch their heads and wonder why the vast majority of the country isn't spreading rose petals at their feet...
Heh,snort! I feel a teachable moment coming up this November,ya,betcha!
Alpha Liberal@ 1:21 PM...Glad to see that you are in agreement with the Tea Party who say that both Dems and GOP insiders colaborated in ignoring the housing bubble. That was a planned disaster with insiders from both of the Parties planning life boats for themselves and their friends as the known consequence of our industrial jobs leaving for China, India , Mexico, and Viet Nam was masked for 10 years by a Dot Com bubble, a Y2k bubble and finally a housing boom on easy to borrow money to be paid back by the inflationary price rises as the Real Estate was sold to another unemployable in the USA borrower.
Extending unemployment benefits costs money. Tax cuts for the rich pay for themselves. Basic economics here people.
If gummint spending truly had a multiplier effect, the smart thing to do would be to spend 100 times what we have been. Every day.
Henry Hazlitt: Economics in One Lesson
"It is not a simple question, as so often supposed, of taking something out of the nation’s right-hand pocket to put into its left-hand pocket. The government spenders tell us, for example, that if the national income is $1,500 billion then federal taxes of $360 billion a year would mean that only 24 percent of the national income is being transferred from private purposes to public purposes.[1] This is to talk as if the country were the same sort of unit of pooled resources as a huge corporation, and as if all that were involved were a mere bookkeeping transaction. The government spenders forget that they are taking the money from A in order to pay it to B. Or rather, they know this very well but while they dilate upon all the benefits of the process to B, and all the wonderful things he will have which he would not have had if the money had not been transferred to him, they forget the effects of the transaction on A. B is seen; A is forgotten.
...There is a similar effect when personal incomes are taxed 50, 60 or 70 percent. People begin to ask themselves why they should work six, eight or nine months of the entire year for the government, and only six, four or three months for themselves and their families. If they lose the whole dollar when they lose, but can keep only a fraction of it when they win, they decide that it is foolish to take risks with their capital. In addition, the capital available for risk-taking itself shrinks enormously. It is being taxed away before it can be accumulated. In brief, capital to provide new private jobs is first prevented from coming into existence, and the part that does come into existence is then discouraged from starting new enterprises. The government spenders create the very problem of unemployment that they profess to solve.
A certain amount of taxes is of course indispensable to carry on essential government functions. Reasonable taxes for this purpose need not hurt production much. The kind of government services then supplied in return, which among other things safeguard production itself, more than compensate for this. But the larger the percentage of the national income taken by taxes the greater the deterrent to private production and employment. When the total tax burden grows beyond a bearable size, the problem of devising taxes that will not discourage and disrupt production becomes insoluble."
I'm really not in the mood to debate the value of taking money from businesses, and taking money we don't have, and spending it on pensions for public employee union members and highway construction projects; with people stupid enough to think that this is stimulative to the "economy".
I'll wait til my fourth margarita for that fun.
For now: There is something paradoxical about Obama's numbers and performance, and I think that it stems simply from the fact that most Americans, myself included, would really like to root on the guy.
He is actually the first African American president, after all...sort of, at least. I would really have preferred it to be someone whose ancestors were slaves. And Republican. And more than half-African American. I'm not sure what all of the policies of Condoleezza Rice would have been, but instinctively, I liked her quite a bit. (I once read that she's a big Cream and Clapton fan, and that's just about enough for me right there).
But like many others, I felt that little lump in my throat when he took the oath of office. His presidency means quite a bit. And he's a likable enough fellow, despite the fact that he's apparently purposefully trying to destroy our country.
There's your paradox: People want to like him, but he's a socialist son-of-a-bitch whose goals include destruction of all US businesses so that they can be seized by the government, and redistribution of all wealth from those who have earned it to those in his voting bloc.
Not your typical New Yorker said:
"I feel a teachable moment coming up this November,ya,betcha!"
Bingo- hell it may be time to dig up the corpse of Peter Jennings so he can repeat his 1994 soundbite of "It's looks like the voters threw a temper tantrum today".
garage said: "Extending unemployment benefits costs money. Tax cuts for the rich pay for themselves. Basic economics here people."
How long should they be extended, garage? In perpetuity?
When you subsidize an activity, you get more of it. Basic economics here, people. Or do you dispute that truism?
I had the rare (these days) and happy occasion to require a machinist for my small business recently. I put ads in the local paper, and on Monster, and I received about 20 applications -- fewer than I would have 3 or 4 years ago, when unemployment was at 5%. Do you suppose that some people might be happier going fishing, and making 60% of their usual pay, instead of going to work and making 100%?
Concerning the extension of unemployment benefits, is there some point at which we consider the possibility that the job is gone for good and have the unemployed person sign up for welfare instead?
Shorter AL: sure, Obama demanded pay-as-you-go legislation...but the GOP is being mean asking him to follow a law he claimed to have wanted for a change.
You realize the GOP just wants the Dems to use unspent money to pay for it.
Why are Dems trying to starve the unemployed (due to their inept policies) just so they can borrow more money?
Just returned from a three week trip in Europe where Plalin and gun shootings seemed absent from the news,and where most of the Europeans I talked with thought America in general was delusional in ignoring the huge cost of maintaining our empire. Interestingly, except for a Swiss banker who worked for UBS and objected to the new disclosure law, the Europeans who I talked with, were positive about Obama's leadership in the world perhaps because they have different news sources and perspectives? That said, I think Krugman is right in terms of how pundit propaganda contributes to a general distortion of public perception that is subject to wild swings but wrong in suggesting government only a government stimulus as an answer.
GM;
Extending unemployment benefits costs money. Tax cuts for the rich pay for themselves. Basic economics here people.
No doubt politics are involved (And it appears, thankfully, that the public has a growing concern about federal spending and deficits.)
And I'll set aside the issue of how much and how long we should provide unemployment benefits.
All that being said I believe the core Republican argument is:
show me the money
And they'd rather use unspent stimulus money and not create new debt.
It seems like the smart thing for BO to do is call the Republicans bluff, ask that unemployment benefits come from unused stimulus money and see if they still howl. I suspect he won't do that because...........
he wants to score some political points.
Shocker...Obama acolyte hangs out with Obama acolytes.
Garage
> Extending unemployment benefits costs money. Tax cuts for the rich pay for themselves. Basic economics here people.
First, please give me a break about tax cuts for the rich. Bush discriminated against the rich less than democrats would have, thus his lack of discrimination became “tax cuts for the rich.” Its bull and if you don’t know it, then step the f--- away from the discussion because you don’t know anything about money.
Second, where is the better place to put money? With people who have a proven track record of growing wealth. Or sad sacks who might have been working but for the subsidy we give them not to work?
Pasta @ 3:35.
You read like iowahawk’s classic take on the election: “Election Analysis: America Can Take Pride In This Historic, Inspirational Disaster”
Link: http://iowahawk.typepad.com/iowahawk/2008/11/
election-analysis-america-can-take-pride-in-this-historic-inspirational-disaster.html
cut and paste it back together. Its funny enough to be worth it. (hopefully that much will work.
The unspent stimulus money, the money that Obama doesn't want to spend on unemployment extensions, is marked for another much more important use.
The unspent stimulus is the money gusher that Obama and the Dems hope to ride on going into the 2012 presidential election cycle.
It's been planned that way from the get-go...
Bush's tax cuts are the biggest driver behind today's deficits. What did our nation get for that?
This is laughable, if it weren't so tragic that so many people actually believe this.
First, the CBO utilized much discredited static analysis to determine that the tax cuts cost anything, instead of actually increasing GDP, and thus, the tax base, more than paying for themselves.
But as important, we have trillion dollar deficits as far as we can see, even assuming that these tax cuts are allowed to expire at the end of the year.
Finally, note that the entire assumption is based on tacking the tax cuts, as an expenditure, on top of all of the Democrats massive spending increases to make the point - despite them having been in force for most of a decade now, long before the spending that they are trying to hide was authorized.
Then there's ignoring the housing bubble -- Krugman called that years in advance of the bubble bursting.
And where was he with tightening up lending with Fannie and Freddie? With the Bush Administration trying to reform those organizations? Or with the architects of the recent financial regulatory "reform" bill, Dodd and Frank, making sure that any hope of slowing down their lending to uncreditworthy borrowers on inflated housing values was prevented?
Come on - Krugman is a homer just like the guys who do the radio play by play for the Phila Eagles.
He roots for lib pols and lib policies. He is too emotionally attached anymore to be objective at all. If he is ever right again, it will be a pure accident.
When you subsidize an activity, you get more of it. Basic economics here, people. Or do you dispute that truism?
The basic economics is this:
Much of the our economy is built on bad debt through the last credit cycle. Now it's just a fight who is going to pay for the bad debts that should have never been made in the first place. No amount of stimulus or tax cuts will ever make those overvalued bad obligations go away. It's simply too large to ever be paid. That's the troof!
It's a pretty simple concept. Private sector spending was way way down. The only potential source of spending, the lifeblood of an economy, was government.
The problem with the theory is well known - it doesn't work. One of the big problems is that it assumes that all government spending is equivalent. The standard counter-example is paying one group of people to dig holes, and the other to fill them in. That, of course, does not increase national wealth, but does get money in the hands of the two groups of workers.
In this case, pretty much none of the money that was spent went to anything productive. Much of it went to give state and local government workers raises, to help fund their over-generous pensions, and to hire more people.
The interesting thing is that Keynes probably wouldn't have signed off on the big "stimulus" bill because it wasn't targeted and because it helped lock in long term deficits. He only supported deficit spending on the very short run, expecting that a surplus be run in good years. Of course, we run deficits in most good years, and now trillion dollar deficits in bad ones.
And that gets into where the money is going to come from. The answer is that it has to be borrowed, and that has innumerable adverse affects over time.
Keynesian economics takes the manna from heaven approach - assuming that the money spent is free and falls from the sky, ignoring that it has to come from somewhere, and part of that somewhere is the private sector, where many businesses are finding it extraordinarily hard to borrow money right now. And their inability to borrow is one of the reasons that we cannot get out of this recession.
"ABC, CBS, WaPo, NYT Use Loaded Poll Questions to Tout Dem Unemployment Agenda"
http://bit.ly/9FSqiZ
Tsk, imagine that.
I don't know, maybe if you force policies down people's throats that they don't want, they don't consider them "achievements".
Garage
And what, prey tell led to those bad debts?
The answer is GOVERNMENT. government created this crisis, and i don't trust them to save us, at least not without sowing the seeds of the next one.
An unaccomplished senator now becomes an accomplished president? I'd like to see a Letterman top 10 of Captain Kickass' accomplishments.
Oddly enough, when a majority think the President's "achievements" consist mostly of jamming unwanted stuff down their throats, it might be considered logical that the achiever may be considered unpopular by said majority.
(Keep in mind some portion of the majority will still be uncomfortable admitting that such a well-spoken man of color might in fact be both misguided and incompetent -- most of his "accomplishments" consisted of little more than signing whatever stinky cheese Pelosi/Reid could churn out of their filibuster-proof majority -- and its easy to think that his numbers are actually much worse than reported.)
Krugman is the poster boy of a political class who thinks their ideas are so brilliant that it must be reality that keeps getting it wrong.
The administration has had multiple big victories in Congress, most notably on health reform
Ya see. That's the problem right there.
Krugman thinks health reform is a "big victory."
(!!111!!1!)
Isn't there some lawerly Latin for that? Like ... see ...proves the point that Obama's tanking.
Ripping the country to shreds to get his way ("I won") bothers an increasing number of people.
Garage;
Much of the our economy is built on bad debt
I would hope that you understand the supreme irony of that statement
Garage;
Much of the our economy is built on bad debt
I would hope that you understand the supreme irony of that statement given recent developments
A few words about the Republicans who are against once again extending the "emergency" unemployment benefits.
The biggest beef the Republicans have seems to be that it waives "pay-go" which, ironically, the Democrats and Obama shoved through and signed over Republican objections.
(For the record, Pay-Go is one of the few things I like to come out of Congress in the past 10 years. No surprise that the first time it's inconvenient the party to whom it is inconvenient wants to waive it, and the party to whom it is convenient now wants to treat it like gospel.)
Its obvious that those who will benefit from the extension want it to pass, but it should also be obvious that the benefits are keeping people who might benefit the economy out of the workforce. No one wants to take a job making 75% of what they did before if they can be safely unemployed and hope to wait until the job market returns to previous wage levels. Just like propping up the housing market keeps housing prices artificially elevated (which not incidentally keeps a large portion of the population's net-worth artificially inflated) keeping people who could be working at reduced rates out of the workforce is going to keep the GDP artificially depressed.
Bankers call writing off a loss "taking a haircut". It's time for the whole economy to take a haircut, because the combination of artificially supporting housing values, providing incentives to NOT work, and adding debt (which of course will have to be serviced over time starting now, when we're not in a position to take on more debt) is a bad little negatively-spiraling system. (Think Tidy-Bowl.)
Paradox, shmeridox: Only a Nobel Prize winning economist would wonder why successfully enacting a lot of unpopular stuff would lead to unpopularity.
Everyone else is quoting Garage, so I won't.
But the unemployment benefit issue brings up something I've been thinking through today.
The U.S. employment safety-net is built upon a relatively short time horizon. What you want is a v-shaped recession. Steep decline, followed by quick recovery. The cost of the steep decline to workers is assuaged by unemployment benefits. The cost of the steep decline to business is assuaged by cost-cutting and debt. A business can limp through a quarter or two by cutting payroll and reducing discretionary costs. After that, they can get loans using assets as collateral and limp along a little more.
But a long recession unknots the safety net. Lost income takes an increasing toll as savings (if any) run out. Workers stop looking for work. Meanwhile, businesses run out of people to lay off, costs to cut, and assets to leverage. They can't get loans. Then they fail.
The irony of the stimulus is that it may well have turned a short, severe correction into a longer and far more painful downturn.
The "soft landing" so beloved by policy makers may actually be worse for workers than the hard bounce.
roesch voltaire fancied: "Just returned from a three week trip in Europe where Plalin and gun shootings seemed absent from the news,and where most of the Europeans I talked with thought America in general was delusional in ignoring the huge cost of maintaining our empire."
Looks like your Euro trash friends don't follow the news much then. Nor do they understand the root or gravity of their own economic woes.
Nor do they understand the meaning of the word "empire". Bet you don't either.
Mark:
Unfortunately, the way Congress treats the Pay-go rule, maybe it should be called "Pay-go except when we don't".
Oddly enough, when a majority think the President's "achievements" consist mostly of jamming unwanted stuff down their throats, it might be considered logical that the achiever may be considered unpopular by said majority.
Where is the liberal pundit who is brave enough to present this basic fact to his or her readers?
The past month, all I've read from these quarters are variations on Krugman's theme. The idea is, "for some strange reason, the American people must be unfamiliar with all the big things Obama and Congress have done since 2009. The answer is, let's educate people on those many historic achievements, which will get people to finally give the Democrats the credit and gratitude they've earned from the electorate."
Is this just disingenuousness on the part of worried pundits trying to find a loophole that will prevent the foretold electoral disaster? Or did they really believe the public's priorities were the same as the Democrats'?
This all reminds me of that Howlin' Wolf song, "I Asked for Water."
Oh, I asked her for water, she brought me gasoline.
Oh, I asked her for water, she brought me gasoline.
That's the troublingest woman that I ever seen.
John:
Echo chambers can do that. I mean when Bob Schieffer says he was on vacation and had not heard of the Black Panther story so he never askd Eric Holder about it! Who prepped him for the interview? Does he even use the internet? It;s the same thing Charlie Gibson said about Acorn -"I was on vacation". In this age of blackberries, etc these alibis can only be explained by the effect of echo chambers and deliberate embargoes of certain stories.
I mean when Bob Schieffer says he was on vacation and had not heard of the Black Panther story so he never askd Eric Holder about it!
There's a big difference between ignorance and a self-serving lie.
@John - Love the Howling Wolf lyric.
garage, you never answered my questions.
How long would you extend unemployment benefits? Forever, then?
And:
Do you dispute that when you subsidize an activity, that you get more of it?
If so, wouldn't subsidizing the activity of "not working" lead to more unemployment? If not...you're a lost cause. I might as well argue about quantum mechanics with my six-year-old daughter, if you can't accept the idea that subsidizing and activity promotes more of it.
The true "paradox" is how Krugman continues to shred his reputation by advocating these political positions which he knows are utter bilge in terms of the real economic principles.
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