Althouse: Paul Krugman adds a new layer of shellac to Barack Obama.

December 3, 2010

Paul Krugman adds a new layer of shellac to Barack Obama.

"... a pay freeze for federal workers. This was an announcement that had it all. It was transparently cynical; it was trivial in scale, but misguided in direction; and by making the announcement, Mr. Obama effectively conceded the policy argument to the very people who are seeking — successfully, it seems — to destroy him."

172 comments:

Scott M said...: From Cambridgegate to the health care sausage to today, Mr. Obama hasn't needed much help destroying himself. Boobery comes to mind as an apt way to describe his administration's competence, but that is an outright slander on boobs, most of which are perfectly competent. Soft, supple, and competent.; 12/3/10, 8:06 AM
ndspinelli said...: Krugman is one of the "chosen ones". The "elite" progressive journalists invited to lunch @ the White House during those early glory days. Krugman is a weasel...hell, he actually looks like a weasel. If you want friend in Washington, get a dog, not a weasel. Our prez is a cool Jimmy Carter.; 12/3/10, 8:11 AM
MikeR said...: Noticed that Krugman, along with a lot of other stuff, added the comment that the amount of savings is trivial. Everyone was saying that by the recent earmarks discussion too. Well, I'm tired of it. I long for a return to the days when billions of dollars were real money. I've had to cut a budget in hard times. You don't just do the big stuff. You look at everything, and get started removing things you don't need. It gets you in the mood for the harder cuts.
Once America realizes that Congress is actually going to make cuts and balance the budget, it may be able to tolerate what that involves.; 12/3/10, 8:15 AM
Drew said...: Does anyone actually listen to Paul Krugman anymore?

Q: How many times is a NYT pundit allowed to be wrong before he gets fired?

A: Approximately 1 Kajillion!; 12/3/10, 8:16 AM
Kev said...: (the other kev)

I know that the columnists for the Times probably don't even come to the building these days, but I'd love to eavesdrop on a lunchroom chat between Krugman and Friedman. It'd be like 'My Dinner with Andre' crossed with - 'Duck Soup?'; 12/3/10, 8:17 AM
traditionalguy said...: Appearance is all the Emperor Obama deals in, and his announcements never have any level of truth in them. It is amazing that Krugman, who is a professional spin master himself, is seeing that too. Authenticity has become the valuable thing again now that we are all running short of money. We now tend to reject the pretty confidence men and demand the true story. I blame Sarah Palin. Her influence is destroying the great DC con game run since the end of WWII. Who is this woman?; 12/3/10, 8:22 AM
Robert Cook said...: This comment has been removed by the author.; 12/3/10, 8:22 AM
Robert Cook said...: "Q: How many times is a NYT pundit allowed to be wrong before he gets fired?"

How long did it take before William Kristol was fired?

Krugman has a long way to go before being as wrong as often or as badly as Kristol.; 12/3/10, 8:24 AM
Anonymous said...: Robert -- If that's true, how is it that -- as you contend -- the United States signed onto any treaty allowing its leaders to be hauled in front of some international tribunal?

I note that you haven't mentioned said star chamber in awhile. What's up with that? I miss the hilarity.; 12/3/10, 8:25 AM
Scott M said...: The rich are getting richer, as they say, and the poor are eating shit.

Can you point to a period in history where this wasn't the case?; 12/3/10, 8:26 AM
Anonymous said...: "...he announced a pay freeze for federal workers..."

Don't worry Mr. Krugman this won't affect step raises, bonuses, and new hires.; 12/3/10, 8:26 AM
Robert Cook said...: Obams is not in the least incompetent, which is easily seen when one dispenses with any illusions or misperceptions that he is attempting to serve either a liberal agenda or the working people or even the American populace as a whole. As with his predecessors, Obama is serving the interests of the wealthy who put him and virtually everyone in Washington in office.

He is doing a bang-up job for them. The rich are getting richer, as they say, and the poor are eating shit.

(Deleted original and reposted with edits to remove typos.); 12/3/10, 8:27 AM
Hagar said...: Well, Social Security payments are frozen for the second year in a row, because there "is no inflation." So, why should Federal employees get pay raises anyway? And of course, it is not just the Feds, since State and local governments tend to follow the GS schedule and point to that for justificaton and CYA.

Given that Federal pay (and thus State and local) pay rates already run 25-50% above private industry rates for similar work, it would make more sense to impose a 10% across the board reduction in pay, and perhaps a 10% RIF as well!

That would produce some real savings and deficit reduction plus the army looking for work - any work - might bring some increased economic activity!; 12/3/10, 8:28 AM
Robert Cook said...: "Can you point to a period in history where this wasn't the case?"

I'd agree this is the general trend of history, but one of the things we boast about ourselves as Americans is that, as a democratic republic, we govern ourselves and "all men are equal" and therefore "no kings" and all that. At times in our history, we have actually passed policies that benefitted the common man, and working people have fought for labor rights and fair pay and so forth and have brought about safer working conditions and better pay for all.

Obama, the man who is alleged (by idiots) to be so liberal he's actually a socialist who intends to bring about a socialist tyranny in America, is serving the same old masters as his predecessors in office.; 12/3/10, 8:38 AM
Clyde said...: @ Drew

"Q: How many times is a NYT pundit allowed to be wrong before he gets fired"

The answer, my friend...; 12/3/10, 8:43 AM
Scott M said...: At times in our history, we have actually passed policies that benefitted the common man, and working people have fought for labor rights and fair pay and so forth and have brought about safer working conditions and better pay for all.

All the while, the rich got richer and the poor continued to eat shit. Pretty good shit relative to the rest of the poor in the world, but shit nonetheless. Your claim that this is somehow related to the current state of affairs is still inapt.; 12/3/10, 8:50 AM
jungatheart said...: tradguy:
"Who is this woman?"

The lib's worst nightmare; a woman with ovaries of steel.; 12/3/10, 8:58 AM
jungatheart said...: I nominate Drew as Kruggie's replacement...he has mad math skillz.; 12/3/10, 8:59 AM
Paddy O said...: "Obama, the man who is alleged (by idiots) to be so liberal he's actually a socialist who intends to bring about a socialist tyranny in America, is serving the same old masters as his predecessors in office."

Isn't this what all socialists have done, wherever socialism takes over? That's why there's never a pure socialism, because those in power serve the power and wealth that got them there and keeps them there. Meanwhile, under socialism the poor and workers suffer even more, because not only does the system still abuse them, but they are caught in the illusion that their suffering is now for some higher cause, so can be continually duped by their self-serving "comrades" -- who are really just paternalistic swine using a rhetoric of equality to support their own dominance.; 12/3/10, 9:01 AM
Scott M said...: Paternalism will be the 21st century's racism...if we're lucky. If we're unlucky, higher social ideals will be the last things on our minds.; 12/3/10, 9:04 AM
Robert Cook said...: "Your claim that this is somehow related to the current state of affairs is still inapt."

To the contrary, it's exactly to the point of your first comment, which sparked my reply: Obama is seen as "incompetent," because people assume he's failing at what they perceive he is trying to do, (feed the poor? stop the war?), but he's succeeding at what he's actually trying to do: help the wealthy stay wealthy and become more wealthy.

I'm sure he wouldnt' see it that way, or at least wouldn't admit it, but given that he has supported the powerful even before he won the presidency--see his vote in favor of the FISA law revision which included retroactive legal cover for the telecoms who aided Bush in his illegal wiretapping, (this was when I knew I would never give this putz my vote)--it's apparent he is just another apparatchik of the empire.

By the way, I wonder if there's a way the Nobel Committee could be petitioned to take back Obama's Peace Prize? I'd love to see that, and it's certainly called for.; 12/3/10, 9:05 AM
David said...: No one in the US is poor in any way that would be sensible to any person born before 1930.

Find me a community in the US that lives in uninsulated shacks with dirt floors, no electricity and without indoor plumbing, or any of those things. Find me a community in the US that is malnourished or where people have been unable to obtain 1500 calories of food each day for the last month.

Heck, you can't even find me a community in the US so poor that they can't afford medical care (although, oddly, you can show me people who can't afford health insurance because they make too much money).

Starting with the New Deal, the US went on a spree that ended poverty in an absolute sense, leaving us only with the poor, in a relative sense, and individuals who, for a variety of reasons, are unable to avail themselves of the opportunities offered them.; 12/3/10, 9:07 AM
Anonymous said...: Only in a country as great as ours could our most pressing problem among our poor be obesity.

But rant on, Cook. Tell us about illegal wars -- made illegal by rich crony capitalists. Or something.; 12/3/10, 9:09 AM
Scott M said...: Obama is seen as "incompetent," because people assume he's failing at what they perceive he is trying to do, (feed the poor? stop the war?), but he's succeeding at what he's actually trying to do: help the wealthy stay wealthy and become more wealthy.

That's not why I call his administration incompetent. I suggest it's because of all the unforced gaffs, knee-jerk reactions, and projections of American weakness on the world stage.; 12/3/10, 9:09 AM
Known Unknown said...: Find me a community in the US that lives in uninsulated shacks with dirt floors, no electricity and without indoor plumbing, or any of those things.

It's called Appalachia, but no worries — it's just dumb bitter clinging poor white people!; 12/3/10, 9:22 AM
David said...: It's called Appalachia.

Yeah, thanks for playing, but no.; 12/3/10, 9:27 AM
Anonymous said...: It was called Appalachia 50 years ago. Now it's called China. Just don't tell Tom Friedman.; 12/3/10, 9:31 AM
bagoh20 said...: I'm not sure if leftist ideology makes a man a fool, or fools gravitate to it, but the correlation is strong.

Fools and children - both need our support.; 12/3/10, 9:34 AM
bagoh20 said...: Find me a community in he U.S without ubiquitous, technology: cell phones, computers, internet, flat screen TV, hot meals available in seconds for $4.50. Food stamps, and government checks delivered daily.

We are all sissies now.; 12/3/10, 9:39 AM
test said...: Krugman's the struggling parent who justifies a $4 StarBucks latte every day by saying "it's only $4" while whining about how broke they are.

It's so embarassing the only sensical conclusion is that he knows he's being foolish, but he's suffering the hit to his credibility to give cover to Democrats raising taxes. He agrees with raising taxes not as an economist but as a political value judgement and thus is willing to pay a net price, but refuses to admit the cost in pursuit of his policy preferences.; 12/3/10, 9:43 AM
AllenS said...: We have so much money that our prisoners have cell phones and get checks from the IRS.; 12/3/10, 9:44 AM
former law student said...: Obama would play draw poker with his hand face up. He continually relies on the kindness and decency and patriotism of conservatives.; 12/3/10, 9:46 AM
test said...: "Obama, the man who is alleged (by idiots) to be so liberal he's actually a socialist who intends to bring about a socialist tyranny in America, is serving the same old masters as his predecessors in office."

Only an idiot would think these factors are actually contradictory. Socialism primarily benefits large currently powerful businesses government apparatchiks.; 12/3/10, 9:47 AM
former law student said...: Q: How many times is a NYT pundit allowed to be wrong before he gets fired?

While I didn't add up the number, Kristol was shown the door after a year.; 12/3/10, 9:47 AM
Anonymous said...: Krugman has a long way to go before being as wrong as often or as badly as Kristol.

Note that you couldn't provide 2 examples.; 12/3/10, 9:49 AM
Anonymous said...: I also love the fact that the left sincerly believes that higher pay for federal workers is good for America.; 12/3/10, 9:50 AM
Anonymous said...: "Obama would play draw poker with his hand face up..."

He's been playing poker for two years and losing. The worst of it is, he is playing with our money.; 12/3/10, 9:50 AM
Anonymous said...: The rich are getting richer, as they say, and the poor are eating shit.

At no time in American history have the "poor" been richer.

You're a blathering idiot.; 12/3/10, 9:51 AM
Anonymous said...: but one of the things we boast about ourselves as Americans is that, as a democratic republic, we govern ourselves and "all men are equal" and therefore "no kings" and all that.

What is funny is that much like a monarchy, you support policies of taking wealth and redistributing it.; 12/3/10, 9:54 AM
Scott M said...: He continually relies on the kindness and decency and patriotism of conservatives.

Hmm...don't remember any of that "relying" thing as the back-room deals rolled willy-nilly during the health care passage...breaking a campaign promise, I might add. Are you suggesting, FLS, that the President thinks he's going to get kindness, decency and patriotism from the bitter clingers?; 12/3/10, 9:54 AM
Anonymous said...: He continually relies on the kindness and decency and patriotism of conservatives...

by snarking "we won."; 12/3/10, 9:56 AM
former law student said...: At no time in American history have the "poor" been richer.

At no time in the past 100 years of American history has the gap between rich and working class been greater.

We are rapidly becoming a Third World country; the world's first undeveloping nation. The only middle class will be the statali like Althouse.

Expect gun towers coming to the gated communities near you. Invest in armored limousine manufacturers. GM was foolish to give up selling Humvees.; 12/3/10, 9:57 AM
Anonymous said...: At no time in the past 100 years of American history has the gap between rich and working class been greater.

I've never understood why this bothers leftists so. It is inarguable that our poor live like kings relative to millions -- billions -- of people in the world. What is so bothersome to you that our rich live like kings compared to people who live like kings?; 12/3/10, 9:59 AM
Scott M said...: Machos beat me to it.; 12/3/10, 10:00 AM
garage mahal said...: but he's succeeding at what he's actually trying to do: help the wealthy stay wealthy and become more wealthy.

The Feds shoveled 3.3 Trillion dollars to zombie banks and corporation between 2008-2009. Many in overnight loans with junk collateral that made them zombies in the first place. But Democrats tell us they're trying, but can't extend a measly unemployment extension. An actual good investment, approx $1.61 return on the dollar. And now the Masters of the Universe lost all that money, still have shit on their balance sheets, don't want to pay for it, and they're coming for you. See "Deficit Commission".; 12/3/10, 10:01 AM
MikeR said...: "At no time in the past 100 years of American history has the gap between rich and working class been greater." How totally untrue. Maybe if you look at income, I haven't checked it. But who cares? Poor Americans get Ipods, and wide-screen TVs, and cars, and MRIs. The gap between rich and poor is almost entirely in things that no one had two decades ago.; 12/3/10, 10:04 AM
Anonymous said...: MikeR - "Noticed that Krugman, along with a lot of other stuff, added the comment that the amount of savings is trivial. Everyone was saying that by the recent earmarks discussion too. Well, I'm tired of it. I long for a return to the days when billions of dollars were real money. I've had to cut a budget in hard times. You don't just do the big stuff. You look at everything, and get started removing things you don't need. It gets you in the mood for the harder cuts.

Once America realizes that Congress is actually going to make cuts and balance the budget, it may be able to tolerate what that involves."

Your comment reminded me of the "broken window" theory of policing and crime control, in that cleaning up the small stuff is credited with changing the atmosphere in such a way that there is less tolerance for the big stuff (see New York City). It's about attitude as much as anything else, and the small stuff counts, too. And, as Glenn Reynolds has pointed out, earmarks are the gateway drug to the much bigger expenditure for other things that legislators get bought off with. We need an across-the-board attitude change.; 12/3/10, 10:05 AM
test said...: "At no time in the past 100 years of American history has the gap between rich and working class been greater."

This is the price of everyone becoming better off. FLS shows again that leftism is driven by envy.

His absurd paranoia and fearmongering when predicting the effects of inequality should be saved for the next time he asserts the left (or he in particular) is "reasonable".; 12/3/10, 10:07 AM
former law student said...: The gap between rich and poor is almost entirely in things that no one had two decades ago.

Funny, two decades ago, no one would have associated the working class with "the poor." And owning a few China-made trinkets makes no one economically secure.; 12/3/10, 10:09 AM
bagoh20 said...: "He continually relies on the kindness and decency and patriotism of conservatives."

Which is exactly what he's getting. The problem for him is that the kindness, decency and patriotism are not intended for him but for the nation. He's just chosen the wrong side in this fight. He can't really help that, it's what he's always been about.; 12/3/10, 10:10 AM
former law student said...: This is the price of everyone becoming better off. FLS shows again that leftism is driven by envy.

Ah, the trickle-down theory! I wondered when that would make a comeback.

The Right -- keeping the working class bitter clingers since 1980.; 12/3/10, 10:11 AM
Scott M said...: $1.61 return on the dollar

Garage...that's $0.39 less than the $2 for every $1 Pelosi claims. Please cite your source for the $1.61 as I've been unsuccessful in getting Pelosi to cite hers.

Logically, if you're in a situation where you would be eligible for unemployment payments (which are less than what you were making), you should be in total "hunker down" mode. You arrange with your debtors/utilities/whatever to make minimum payments and spend only on the absolute essentials like food. You do NOT go out and buy flatscreens and cars.; 12/3/10, 10:11 AM
Anonymous said...: FLS -- Maybe the poor should stop buying electronic trinkets and start saving money for a rainy day instead. There oughta be a law! No more trinkets for the poor.; 12/3/10, 10:12 AM
bagoh20 said...: "Funny, two decades ago, no one would have associated the working class with "the poor."

Think about what your saying there. What has changed? They work, they make money, they have things, yet they can't support what?

The answer is: they can't support what the government spends now. Income has been stable, spending is exploding.; 12/3/10, 10:14 AM
bagoh20 said...: In a healthy system the trickle does go down, and also up and sideways. The problem is there is a big rain gutter called government capturing it for their friends and voters.

Trickle is not a theory any more than rain is a theory. Both have always been here, healthy and necessary for growth.; 12/3/10, 10:19 AM
garage mahal said...: Please cite your source for the $1.61 as I've been unsuccessful in getting Pelosi to cite hers.

My source is Moody's.

You arrange with your debtors/utilities/whatever to make minimum payments and spend only on the absolute essentials like food. You do NOT go out and buy flatscreens and cars.

Who says these people are buying cars and flatscreen TV's? On a couple hundreds bucks a week? Where do you guys get this stuff?; 12/3/10, 10:19 AM
Anonymous said...: It's called Appalachia, but no worries — it's just dumb bitter clinging poor white people!

Ah, yes - Appalachia. Letcher County, KY is where I learned what Bob Barker looked like life-size. I learned it by seeing a snippet of The Price is Right on a 72” TV owned by a tenant in a publicly-subsidized apartment I was conducting an annual inspection in.

That right there was some heartbreaking poverty, let me tell you.; 12/3/10, 10:20 AM
former law student said...: 7m: Accepting this absurd premise, tell me how long you could live on $1600, the price of a nice flat screen TV?; 12/3/10, 10:22 AM
Scott M said...: Who says these people are buying cars and flatscreen TV's? On a couple hundreds bucks a week? Where do you guys get this stuff?

I'm not. I'm wondering, as a non-economist, how paying absolute minimums on liabilities (or putting them off completely), minimum utilities, and food creates wealth, ie, takes a dollar and somehow makes it $1.61.

Do you know? Cuz I don't and it certainly isn't prima facie.; 12/3/10, 10:25 AM
Anonymous said...: tell me how long you could live on $1600, the price of a nice flat screen TV?

In Chicago? About a month. Longer if I don't buy a flat-screen TV.

Who says these people are buying cars and flatscreen TV's?

Data that says so many Americans own cars and flat-screen TVs that, by virtue of a thing called math, a large percentage of people who meet the definition of poor in the United States own cars and/or flat-screen TVs. Facts are such a bitch when you are on an ideological quest.; 12/3/10, 10:27 AM
MikeR said...: "And owning a few China-made trinkets makes no one economically secure." Brief comment to contain two mistakes.
1) China-made trinkets. Modern technology is not a trivial thing; it makes our lives easier, more pleasant, and safer in every conceivable way. I mentioned MRIs, right? What about cataract outpatient operations? Do you understand what that meant to me, as opposed to what my grandfather went through? And hip operations that really work? And in other parts of life, what about the incredible amount of information available at a finger's touch? And GPS? And Wal-mart? And - but never mind. There is no comparing the standard of living today with two decades ago.

2) economically secure. You just changed the subject. That has nothing to do with how rich Bill Gates is. It has everything to do with a collapsing economy, which perhaps we disagree on how to fix.; 12/3/10, 10:27 AM
Anonymous said...: It's not enough for our poor to have cars and iPhones and flat-screen televisions. They must also have a six-figure stock and bond portfolio.; 12/3/10, 10:29 AM
Unknown said...: Seven and the rest are correct about what's called poverty in this country being a joke. Parts of India, some of the Islamic countries, particularly on the Horn of Africa, some of the internal areas of South America - that's where you see what poverty is.

ndspinelli said...

Our prez is a cool Jimmy Carter.

His cool is like Michelle's fashion sense.

Manufactured.

PS I see The Daily Worker has laid off Cook.; 12/3/10, 10:34 AM
AllenS said...: tell me how long you could live on $1600

What do you mean? $1600 a month? $1600 a year? $1600 for the rest of your life?

I lived from 1999 to 2009 on about $1800 a month.; 12/3/10, 10:36 AM
Hoosier Daddy said...: At times in our history, we have actually passed policies that benefitted the common man, and working people have fought for labor rights and fair pay and so forth and have brought about safer working conditions and better pay for all.

I do believe you live a most jaded life and must be a real downer to hang with. I mean it’s inconceivable that the nation you think we are would allow some college kid to create a business from his dorm room that turned into a multi-billion dollar enterprise. Or some geek who tinkering around in his garage could revolutionize the computer industry or that some moron could think he could take on the USPS and create an international parcel delivery company or that some schmuck could start up a coffee shop that turned into a national franchise or another geek could build a computer in his garage and compete with IBM or that some old coot name Sam could turn a mom and pop general store into an international phenom.
I mean how is it possible that the plutocratic oligarchy you think we live under allow these no bodies to create such enterprises?; 12/3/10, 10:39 AM
garage mahal said...: Michael Jordan made it to the NBA and millions. Why can't everybody do that?; 12/3/10, 10:50 AM
Anonymous said...: Michael Jordan made it to the NBA and millions. Why can't everybody do that?

In the society you would create through your preferred policies, you would - wittingly or unwittingly, it really doesn't matter - prevent Michael Jordan from doing that.; 12/3/10, 10:56 AM
Michael said...: FLS: "At no time in the past 100 years of American history has the gap between rich and working class been greater."

but if the poor are well off by historical standards what difference does this make other than creating class envy? If I have a Ford but you drive a Bentley does that mean that my life is shit? What difference does "the gap" make?

In the real world that I live in I see people all the time in Bentleys that manifestly cannot afford them. Perhaps poor choices lead to "the gap."; 12/3/10, 10:57 AM
Scott M said...: Michael Jordan made it to the NBA and millions. Why can't everybody do that?

The point is that he's able to do so. Another point is that everyone shouldn't be able to do it or it wouldn't be exceptional, would it? Do you suggest an equality of outcomes in which everyone plays pretty much the same level of basketball? Or would you rather a system in which the truly exception basketball players be allowed to make as much money (salary, product placement, etc) that the market will bear?; 12/3/10, 10:58 AM
Hoosier Daddy said...: Michael Jordan made it to the NBA and millions. Why can't everybody do that?

garage you admitted that you make six figures and drive a classic BMW. Why can't everybody do that?; 12/3/10, 11:00 AM
holdfast said...: "Obama is seen as "incompetent," because people assume he's failing at what they perceive he is trying to do, (feed the poor? stop the war?), but he's succeeding at what he's actually trying to do: help the wealthy stay wealthy and become more wealthy."

Well then he is a miserable f*cking failure, because according to Obama my family is "rich", yet in the past two years I've seen my wages freeze, my bonus cut to a pale shadow of its former self and a bunch of my friends and colleagues out on the street. My local taxes, state taxes, utilities, medical insurance contribution and other costs have all been going up well above the rate of inflation, and in January I am going to get pummeled by a massive tax increase (because I am "rich" see). So how again is the Affirmative Action President helping the wealthy? Oh - I'm the wrong kind of wealthy - wealthy enough to demonize and hit with punitive taxation, but not wealthy enough to be Obama's buddy.; 12/3/10, 11:00 AM
GMay said...: This comment has been removed by the author.; 12/3/10, 11:03 AM
Anonymous said...: If everybody doesn't make as much money as Michael Jordan, then it is an unacceptable injustice.; 12/3/10, 11:04 AM
GMay said...: I take a break from the blog for awhile to come back and see garage talking finance.

Unlike our dollar, garage's musings on finance never lose their comedic value.; 12/3/10, 11:06 AM
Hoosier Daddy said...: The point is that he's able to do so.

Precisely. In the type of country that Robert Cook thinks the US is, none of those people would have ever done what they did. On the other hand garage is mad because not everyone can be a Bill Gates or Mark Zuckerburg or Mike Dell and that somehow is the fault of the 'system'.

Honestly I thank Allah and the Prophet every day that I'm not a liberal. It must suck being in a constant state of angst because someone, somewhere on the planet only got one lolipop instead of his God given right to three.; 12/3/10, 11:07 AM
AllenS said...: Barack Obama made it to the presidency and made millions. Why can't everybody do that?; 12/3/10, 11:08 AM
AllenS said...: Michelle Obama worked in a hospital and made $300,000 a year. Why can't everybody do that?; 12/3/10, 11:09 AM
MikeR said...: "according to Obama my family is "rich", yet in the past two years I've seen my wages freeze". Holdfast, you badly misunderstood. There are lots of wealthy people getting shafted. Think of all those small business owners. The Democratic Party is in the control of the politically connected wealthy. Sorry, you are not included. Get a lobbyist.; 12/3/10, 11:11 AM
David said...: Krugman had it right/

The announcement was a cheap theatrical with no substance. The supposed "freeze" won't actually freeze salaries, among other things.

Cheap theatrics can work for a second tier legislator and fringe academic, which was Obama's status before he became President. The do not work for actual Presidents.; 12/3/10, 11:14 AM
Scott M said...: Michelle Obama worked in a hospital and made $300,000 a year. Why can't everybody do that?

Please define "worked" in this context.; 12/3/10, 11:14 AM
garage mahal said...: On the other hand garage is mad because not everyone can be a Bill Gates or Mark Zuckerburg or Mike Dell and that somehow is the fault of the 'system'.

Yea, that was my point, totally. You sure nailed it.; 12/3/10, 11:14 AM
GMay said...: You know, the incessant whining about The Gap Between Rich and Poor™ from the left never ceases to baffle.

Could one of you lefties educate this poor guy (My income puts me below middle class, yet somehow I manage to subsist on more than "shit", contrary to the blathering of self-deluded fools), on how this "gap" is such a bad thing? Please, show your work.

This ubiquitous metric, while interesting - when tossed out on it's own with no context - is a rather juvenile argument. When you examine more facts (tough for lefties I know), like the undeniable fact that the poor in this country have the highest standard of living ever...well, you get the picture.

Come on lefties, wow us! 'Specially poor fellers like me. Tell me why I need to be mad at The Man Keeping Me down™!; 12/3/10, 11:18 AM
Hoosier Daddy said...: Yea, that was my point, totally. You sure nailed it.

Well maybe you should try harder at making your point more clear rather than leaving it up for interpretation.; 12/3/10, 11:20 AM
GMay said...: Robert Cook lobbed one up: "...but one of the things we boast about ourselves as Americans is that, as a democratic republic, we govern ourselves and "all men are equal" and therefore "no kings" and all that."

Would now be a bad time to point out that the document says "all men are created equal"?

Since you can't get the quote right, I'll skip on the finer points of debate like what the word "king" means and how to differentiate between one and a rich man. Or even the subtleties of what "created equal" means to this discussion...and all that.

wv: unglog - "You need to unglog all the histrionic bullshit from your arguments."; 12/3/10, 11:25 AM
Hagar said...: I think the "gap between rich and poor" argument has something to it, but .....

This is out of my league, but I think one may look at the "economy" as a large bubble containing "the real world," and the financial markets as a smaller bubble floating above the economy, perhaps with some interaction between the two bubbles, but they are clearly distinct from each other.
Our Government financial managers come from the financial bubble; it is where they have lived and what they know. So, in these times they create a lot of new money and pour it into the financial bubble with the result that there is a lot of excess money sloshing around inside there, and the financial wallahs pay themselves outrageous bonuses and get very "rich," but it is not "real" money generated by the economy below; it is just "Monopoly money" printed by their former colleagues, now in Goverment offices.

Which is why I think things are out of balance; these financial machinations will only string out "The Great Recession," and may well cause the "R" to be replaced with a "D." I don't think things will get better until more of these bubbles are pricked and deflated, and our "financial wizards" exposed for the "naked emperors" they are.

So, "Fasten your seatbelts, it's going to be a rough ride!"; 12/3/10, 11:29 AM
test said...: "On the other hand garage is mad because not everyone can be a Bill Gates or Mark Zuckerburg or Mike Dell and that somehow is the fault of the 'system'."

The left fails to understand the world around them. Gates, Zuckerberg, and others like them created an IT environment where tens of millions of Americans (and even more elsewhere) from modest or lower backgrounds became solidly upper middle class. The event was the greatest expansion of economic inclusion in the lifetimes of most people alive today. Yet it is also the very event which increased income inequality.

So by their reasoning this vast economic inclusion is so devastating we have to reorder society to minimize the effect.; 12/3/10, 11:44 AM
GMay said...: Hagar said: "So, in these times they create a lot of new money and pour it into the financial bubble with the result that there is a lot of excess money sloshing around inside there, and the financial wallahs pay themselves outrageous bonuses and get very "rich," but it is not "real" money generated by the economy below; it is just "Monopoly money" printed by their former colleagues, now in Goverment offices."

This is where garage stumbles back in to step all over his dick and say "but the government doesn't print money to pay for things."; 12/3/10, 11:55 AM
AllenS said...: So what is it, fls? $1600 a month? $1600 a year? $1600 for the rest of your life?; 12/3/10, 11:56 AM
Bruce Hayden said...: As someone else I think pointed out, Krugman is a mercenary tool. I think that his taking $50k from Enron to flog its stock, pretty much says everything you need to know about the guy.

This whole Keynesian thing was pretty much debunked by the late 1970s and early 1980s. So, why its resurgence?

My theory is that the economics was made to fit the spending agenda. The Democrats, when they took complete control of the government at the end of 2008 had a lot of constituencies to pay off, starting with government workers, but also including GE, greens, and a lot of others.

The problem was that they wanted to spend a lot of money on their friends, but the economy was not cooperating. Rather, it was tanking. Not free fall yet, but suffering. So, what to do?

The answer was to resurrect failed Keynesian economics, and to pretend that all this wasteful spending would somehow buy our way out of the recession. They then proceeded to get high on some, likely illegal, substances, where they bid up the value of the fiscal multiplier that they were going to use to sell this Ponsi scheme to the American public.

And, here is the great part, and is part of what Krugman apparently brought to the party - if and when the economy continued to tank, and then actually drop into free-fall, they could just argue that the problem wasn't that they were spending all this money on their friends, but, rather, they just hadn't spent enough, and if they could just up the ante some more, it would work.

Of course, this is unfalsifiable because they could always claim that we had just now squandered enough money yet, and if we were to, it would work, guaranteed. No matter how much they had spent.

The problem though is the same with the gambling technique of always doubling down - when you run out of money, you are now really broke.; 12/3/10, 12:00 PM
Bruce Hayden said...: Whoops, left out something important in my last post:

Of course, this is unfalsifiable because they could always claim that we had not yet squandered enough money, and if we were to do so, it would work, guaranteed. No matter how much of our money they had spent.; 12/3/10, 12:07 PM
Scott M said...: I see a lot of references to that Moody's paper citing $1.61 GDP for every $1 of unemployment benefits the government sends, but I still can't find the explanation.

Can anyone 'splain it to this layman? Economics ain't my bag, baby.; 12/3/10, 12:07 PM
Anonymous said...: garage you admitted that you make six figures and drive a classic BMW. Why can't everybody do that?

This is outrageous. While poor people have to hitchhike, fatcats like garage drive luxury cars.

In a truly moral and just society, everyone would hitchhike.; 12/3/10, 12:09 PM
Anonymous said...: At no time in the past 100 years of American history has the gap between rich and working class been greater.

And?

We are rapidly becoming a Third World country;

Hysterical.

Yes, all those damned people with 2 cars, it is just like sub-saharan Africa dammit!!!; 12/3/10, 12:11 PM
garage mahal said...: This is outrageous. While poor people have to hitchhike, fatcats like garage drive luxury cars.

That car cost $1200 at an auction.

This is where garage stumbles back in to step all over his dick and say "but the government doesn't print money to pay for things."

It doesn't, moron.; 12/3/10, 12:13 PM
Anonymous said...: But Democrats tell us they're trying, but can't extend a measly unemployment extension. An actual good investment, approx $1.61 return on the dollar

Now that is funny!

Yes, unemployment benefits create jobs too!!; 12/3/10, 12:14 PM
Anonymous said...: garage mahal said...
Michael Jordan made it to the NBA and millions. Why can't everybody do that?

Because life isn't fair.

Because not all people are born equally talented.

What, are you 16?

This isn't a serious question.; 12/3/10, 12:15 PM
Anonymous said...: I see a lot of references to that Moody's paper citing $1.61 GDP for every $1 of unemployment benefits the government sends, but I still can't find the explanation.

Economists have discovered that if you get money circulating, this is a good thing. It tends to breed.

Just don't get it wet, and don't feed it after midnight.; 12/3/10, 12:16 PM
Anonymous said...: My source is Moody's.

And then what?

garbage:
do you even understand what this means?

Note: The bang for the buck is estimated by the one-year dollar change in GDP for a given dollar reduction in federal tax revenue or increase in spending.

Do you understand what "estimated" means?; 12/3/10, 12:19 PM
Robert Cook said...: "...according to Obama my family is 'rich', yet in the past two years I've seen my wages freeze, my bonus cut to a pale shadow of its former self and a bunch of my friends and colleagues out on the street."

Must be nice to work a job where you get annual bonuses; I never have.

The wealthy for whom Obama is a minion--following his predecessors in the White House--are not salaried employees, no matter how handsome their salaries compared to most Americans; he's working for the people who pay you, who own and run everything...the CEOs of the banks and Wall Street firms and corporations.

I infer you make $250,000.00 or above--if I'm wrong, please correct me. In your circumstances, you may feel not so wealthy at all, and compared to the people Obama works for, you're not, but if you're making above the $250,000.00 figure, you're making more than most Americans will ever make.; 12/3/10, 12:22 PM
Scott M said...: Note: The bang for the buck is estimated by the one-year dollar change in GDP for a given dollar reduction in federal tax revenue or increase in spending.

I read and re-read that sentence under the table a few times because the best stuff can sometimes be found with an asterisk in front of it. However, I'm still at a bit of a loss on the math. As I said earlier, the logic escapes me as well. Unemployment recipients aren't free-wheeling spenders.; 12/3/10, 12:22 PM
Scott M said...: Show me a chart, Cook, of human endeavor that isn't on a bell curve.; 12/3/10, 12:24 PM
Anonymous said...: I see a lot of references to that Moody's paper citing $1.61 GDP for every $1 of unemployment benefits the government sends, but I still can't find the explanation.

There is no explanation as it is crap.

If it were true, the "stimulus" would have worked.

It didn't.; 12/3/10, 12:24 PM
Anonymous said...: "I see a lot of references to that Moody's paper citing $1.61 GDP for every $1 of unemployment benefits the government sends, but I still can't find the explanation.

Then if half the country was unemployed and we doubled unemployment benefits ...just watch the ol' GDP jump. Prosperity is right around the corner.; 12/3/10, 12:24 PM
Anonymous said...: Clearly, everyone should be unemployed and just let the government print and spend all the money. My God, think what a boon it would be GDP and to our lives. We could all drive classic BMWs and live like Michael Jordan.

Does Geithner know about this?; 12/3/10, 12:27 PM
Anonymous said...: ScottM,

this idea that "Unemployment benefits help drive the economy" is idiotic and something only a leftist could believe.

There is no actual evidence it is true.

Also note:

Economists Claudia Sahm, Matthew Shapiro and Joel Slemrod studied the way people spent the stimulus checks that were sent out in the first half 2008. Using data from the Reuters/University of Michigan Survey of Consumers, they found that spending patterns were “strongly at odds with the conventional wisdom.” It turns out that the poor were actually less likely to spend their 2008 stimulus checks than the wealthy. What’s more, analysis of the 2001 stimulus found much the same thing.

garage is not that bright and easily misled.; 12/3/10, 12:29 PM
Anonymous said...: Additionally,

"For instance, numerous studies, including some by Larry Summers, have found that increasing the length of duration of potential unemployment benefits increases the average length of unemployment."

I'd like to see garbage tackle that one...; 12/3/10, 12:32 PM
Michael said...: I am more curious than ever about THE GAP . What, my dear lefties, is the proper size of THE GAP?

Is is a percentage? A dollar amount? What differntial, if any, would be acceptable.; 12/3/10, 12:32 PM
Anonymous said...: "Clearly, everyone should be unemployed and just let the government print and spend all the money. My God, think what a boon it would be GDP and to our lives. We could all drive classic BMWs and live like Michael Jordan.

Does Geithner know about this?"

No, he's still trying to get a handle on TurboTax.; 12/3/10, 12:35 PM
Robert Cook said...: "Would now be a bad time to point out that the document says 'all men are created equal'"?

I'm aware of the actual quote, but I wasn't trying to quote from the Declaration of Independence, but rather to glibly describe our own self-perception as a people.

What does it actually mean, though, to say "all men are created equal?" It's self-evidently not true...all men are smarter than some and dumber than some; all men are more attractive than some and uglier than some; all men are wealthier than some and poorer than some; and so on.

What it means is that all men are equally deserving of the rights afforded by law and of equal access to and protection of, by, and from the law.

In practice, this is also self-evidently not true; privileges accrue to those with wealth, and they see these privileges as rights; the rights that belong to the poor as to us all are scorned by the wealthy as privileges of which the poor are undeserving, and they endeavor to wrest those rights away from the poor. They have largely succeeded in this.; 12/3/10, 12:44 PM
Michael said...: Robert Cook: "Must be nice to work a job where you get annual bonuses; I never have."

Why not? Has it ever occurred to you to look for that kind of work? As an ultra smart leftie has it ever occurred to you to start a business and keep whatever you make for yourself? Has it ever dawned on you that you could go into sales and work on a commission-only basis (no safety net!) and based solely on your own efforts make well over a quarter of a million dollars a year?

Or are you one of the dumb lefties that are so rare? The lazy ones, of course, are everywhere. Its the dumb ones that are hard to find.; 12/3/10, 12:51 PM
Anonymous said...: Michael -- Why over-complicate things with creating wealth in that old way. We're all going to quit our jobs, thereby stimulating the economy by $1.61 GDP for each and every one of us. The longer we don't work, the more this titanic GDP boost multiplies.

The gravy train will last forever. Mansions and Beemers for everyone!; 12/3/10, 1:00 PM
Michael said...: Seven: I must say that the single most enlightening thing about Althouse is the liberal commentary on economic matters. As a group they are stunningly out to lunch. Is it possible that every single one of them is an academic or govt. employee? I suppose that accounts for much of it, but it is really tragic how little they appear to know about making and keeping money. And minding their own business.; 12/3/10, 1:11 PM
garage mahal said...: We're all going to quit our jobs, thereby stimulating the economy by $1.61 GDP for each and every one of us.

You're not very bright are you? If you quit your job to take unemployment benefits you would be taking money out of the economy. If you don't have a job, you have nothing. The couple hundred per week in UI probably gets spent immediately in the economy, don't you think? Things like gas, groceries. Maybe a new shirt for a job interview.

How could this possibly be so hard to fucking understand?; 12/3/10, 1:13 PM
Anonymous said...: "Is it possible that every single one of them is an academic or govt. employee?.... "

No. Just 95% of them.; 12/3/10, 1:19 PM
Scott M said...: The couple hundred per week in UI probably gets spent immediately in the economy, don't you think? Things like gas, groceries. Maybe a new shirt for a job interview.

How could this possibly be so hard to fucking understand?

Because a couple of hundred per week of activity that HAS to be scaled back from normal (ie, spending based on UI payments because you're out of work and don't know when you're going to work) can't do more for the consumer economy than normal spending from a person with a full-time job.

You're still buying groceries, but your buying MORE than just the bare necessities. You're not a lights-off and thermostat nazi. You don't put off driving to recreational activities. YOU DON'T PUT OFF RECREATIONAL ACTIVITIES.

It just doesn't make sense that a person on UI is spending more in the economy than that same someone with a full time job.

I have a full time job, Garage, and I don't work for the government. How much GDP do I generate per dollar earned?

Look, I want to understand this properly and I've been pretty clear about that without rhetorical attacks on your character. You're doing nothing to help me here.; 12/3/10, 1:21 PM
Anonymous said...: Hey! Garage figured out something about economics. Awesome.

Tomorrow, we'll work on sarcasm and how to detect it.

In 2011, we're going to try to get you laid! But baby steps...; 12/3/10, 1:22 PM
garage mahal said...: It just doesn't make sense that a person on UI is spending more in the economy than that same someone with a full time job.

Nobody is saying unemployed are contributing more in the economy than an employed person.

They don't have a job. They don't have any money. Any UI benefits are likely to be SPENT into the economy, right away. Thus, a good bang for the buck.; 12/3/10, 1:38 PM
GMay said...: garage mahal, displaying his commanding grasp of all things economics proclaimed: "[The government] doesn't [print money to pay for things], moron."

Yet still can't figure out why the government just had to print up a bunch of fresh monopoly money when they issued some fresh treasuries.

Ignorant lib. But I repeat myself.; 12/3/10, 1:39 PM
GMay said...: ScottM pleaded: "Look, I want to understand this properly and I've been pretty clear about that without rhetorical attacks on your character. You're doing nothing to help me here."

And he won't. You can engage him in good faith all day long and the only thing he will do is display epic ignorance on a topic he has no business wading into. You might as well go ahead with the rhetorical attacks on his character, because he's incapable of rational and/or informed discussion.; 12/3/10, 1:43 PM
Scott M said...: Nobody is saying unemployed are contributing more in the economy than an employed person.

Granted. The gap in the current debate, then, is why continue them if an employed person has more bang. Even a decent-paying middle income job has pretty shitty UI payments. As long as you can suck it up pride-wise, it's still, even in this economy, possible to find work that will pay more.

What would these people do if there simply were no benefits at all? Assume nobody had ever heard of unemployment insurance. What then?; 12/3/10, 1:43 PM
Scott M said...: @Gmay

Hush...; 12/3/10, 1:44 PM
Anonymous said...: Any UI benefits are likely to be SPENT into the economy, right away.

So, again, let's all quit our jobs and collect unemployment. We'll all immediately SPEND it. In fact, let's all SPEND it all on the first day, so we can get more on day two.

I'm telling you, this will be magical. In a week, the economy will be humming at 100 percent capacity. Instant recovery. The best part is that we'll all be SPENDING, since none of us will be working.; 12/3/10, 1:45 PM
garage mahal said...: Yet still can't figure out why the government just had to print up a bunch of fresh monopoly money when they issued some fresh treasuries.

It was an asset swap. The Fed didn't print anything. Wrong again!; 12/3/10, 1:59 PM
GMay said...: Robert Cook responded: "I'm aware of the actual quote, but I wasn't trying to quote from the Declaration of Independence, but rather to glibly describe our own self-perception as a people."

Then you failed. I do not consider all men equal and am well aware that doesn't jive with leftist's stated philosophy (though it mirrors their personal feelings quite well). And I'm not alone.

You spoke in a generality that was based (and you well know it) on the phrase from the DoI.

"What does it actually mean, though, to say "all men are created equal?" It's self-evidently not true...all men are smarter than some and dumber than some; all men are more attractive than some and uglier than some; all men are wealthier than some and poorer than some; and so on."

I, like many others, consider it to be equality of opportunity.

You, I'm almost certain, think in equality of outcomes.

This is the root of your failure I mentioned before.

"What it means is that all men are equally deserving of the rights afforded by law and of equal access to and protection of, by, and from the law."

Agree completely.

"In practice, this is also self-evidently not true; privileges accrue to those with wealth..."

What privileges and more importantly why?

"...and they see these privileges as rights;"

Says who? If I had the money to bet, I'd say you thought healthcare was a right instead of a privilege. There are plenty of those who are anything but wealthy who feel the same way. Insert Social Security, Medicare/caid, welfare, unemployment, or any other redistributive government program.

"...the rights that belong to the poor as to us all are scorned by the wealthy as privileges of which the poor are undeserving, and they endeavor to wrest those rights away from the poor. They have largely succeeded in this."

Looks like I would have won my bet, but I'll give you the benefit of the doubt here. What are the rights that have been wrested from us poor types? And whodunnit? And again...why?; 12/3/10, 2:01 PM
GMay said...: garage mahal said: "It was an asset swap. The Fed didn't print anything. Wrong again!"

I didn't say the Fed Printed anything. The Treasury prints money you fucking idiot.

If I thought you could define "asset swap"...hell, if I thought you could define "asset"...I'd engage you here. Ahhh, fuck it, I like seeing how well you shit yourself on these threads (By the way, the SS scheme is an asset swap. One that inherently doubles the gov't liabilities).

You do understand that when the gov't creates securities it has to back them with something right? You do know that the only thing the gov't can back it with is money right? You realize that "swapping assets" doesn't create revenue right? You know that the only "asset" the gov't has is its ability to tax its citizens right? What you think are assets the government owns(Toxic Assets™, auto companies, financial institutions) are not actually assets - they're liabilities. You know that right?

No, you don't know any of that. Why am I even asking?

By the way, did you ever learn what a bond was?; 12/3/10, 2:16 PM
garage mahal said...: I didn't say the Fed Printed anything. The Treasury prints money you fucking idiot.

How much did they print. And cite.

Here is what you said:

"Yet still can't figure out why the government just had to print up a bunch of fresh monopoly money when they issued some fresh treasuries."

So how much?; 12/3/10, 2:20 PM
Alex said...: Jay:

Note that you couldn't provide 2 examples.

Yeah, I'm still waiting for the examples from FLS and garage.; 12/3/10, 2:23 PM
Alex said...: The Treasury doesn't "print" much paper dollars any more. What the Federal Reserve does is bump up the computer balances of the Federal reserve Banks so they instantly have more money to loan. It's all digital now.; 12/3/10, 2:24 PM
garage mahal said...: By George I think someone has it!; 12/3/10, 2:31 PM
Hagar said...: The money paid out in unemployment insurance may well generate $1.60 for each $1.00 spent. However, there is more than $1.00 spent, because the Federal overhead in collecting the taxes and distributing the payments need to be counted in.
Also, each $1.00 collected in taxes is $1.00 deducted from private spending, which, in any economic development plan report I have ever seen, is generally estimated to generate several times over itself. And people receiving wages from work are themselves contributing, which people receiving payments not to work, are not.; 12/3/10, 2:37 PM
test said...: garage mahal said...
By George I think someone has it!

Congratulations on wasting everyone time pushing a pedantic non-issue. Why don't you take out an ad in the school paper alerting everyone?; 12/3/10, 2:39 PM
Scott M said...: @Hagar

This is why the soundbyte about $1.61 from $1 sounds good, but doesn't make any sense at all.; 12/3/10, 2:41 PM
Michael said...: Garage: "By George I think someone has it!"

I don't believe it is you. The digital nature of the transaction does not mean that it is not the equivalent of printing money. Should someone want their loan repaid they will not be satisfied with a book notation at their bank. they will want the good funds via wire transfer perhaps followed by the receipt of actual greenbacks. Which only the Treasury can print.; 12/3/10, 2:47 PM
Anonymous said...: "The Treasury doesn't "print" much paper dollars any more. What the Federal Reserve does is bump up the computer balances of the Federal reserve Banks so they instantly have more money to loan. It's all digital now."

Now the banks can borrow for 0% and lend at 4%. Now a money market account can barely preserve the principal. Now the dollar will be worth less. Now there is a liquidity bubble in the US stock market. What can go wrong?; 12/3/10, 2:48 PM
Automatic_Wing said...: The Treasury isn't printing money. What's happening is that the Federal Reserve is going around buying up bonds, so that the sellers of the bonds (governments and private companies) have more money available to inject back into the economy. That's how it works in theory, anyway.

Quantitative Easing; 12/3/10, 2:53 PM
Robin said...: No Cook, you were not trying to make any comment about how we view ourselves as a people when you deliberately misquoted the Declaration of Independence. You were trying to fool people into thinking that America is about equality of outcome when it never was. It is about equality of opportunity.

You were trying to destroy a great principle to make it seem like your corrupt ideology.; 12/3/10, 2:53 PM
test said...: Scott M said...
@Hagar

This is why the soundbyte about $1.61 from $1 sounds good, but doesn't make any sense at all.
_________________

The 1.61 was arrived at by taking the high end of the ranges when analyzing the various factors.

Other analyses conclude .7.

http://www.stanford.edu/~johntayl/carnegie1march.pdf

The bottom line is that these "multipliers" never include the effect of later repayment. So all they're saying is that if you borrow to spend total GDP is higher during that period (duh).

It's like saying credit card spending is innately good because it allows you to spend more without even including the repayment terms in your analysis.; 12/3/10, 2:54 PM
garage mahal said...: I don't believe it is you. The digital nature of the transaction does not mean that it is not the equivalent of printing money.

Gmay said we printed money [and I assumed he was referring to QE2). No new financial assets were added to the private sector. No new money was printed or created. The assets already existed! They are merely swapping reserves for bonds.; 12/3/10, 2:55 PM
GMay said...: Thank you Marshal. Beat me to it.

garage's silly pedantics aside, here's a couple of the links you requested. Both are from lefty favored sites. This shit isn't hard garage.

A quick NPR take.

"This is where the Fed gets to use central-bank magic. They pay for that $50 billion purchase in new money. They just invent it. That's what the Fed — but nobody else — gets to do."

Emphasis mine.

But wait, you asked for more! You wanted to know how much.

CNN's numbers

"The central bank will buy $600 billion in long-term Treasuries over the next eight months, the Fed said Wednesday. The Fed also announced it will reinvest an additional $250 billion to $300 billion in Treasuries with the proceeds of its earlier investments.

The bond purchases aimed at stimulating the economy -- a policy known as quantitative easing -- will total up to $900 billion and be completed by the end of the third quarter of 2011."

Now I know they're talking about complicated debt instruments (like "bonds" and "Treasuries", terms you choose to remain willfully ignorant of despite have roughly one quarter of Althousians educate your sorry ass on them), but there it is.

Any more questions?; 12/3/10, 2:58 PM
garage mahal said...: Any more questions?

yea, just one. You said the gov printed a bunch of monopoly money. I asked how much. Did you find it? How much did they print? Or do you just want to admit you were wrong about that.; 12/3/10, 3:06 PM
Scott M said...: @Marshal

Thanks for that link. My eyes are indeed glazed over. I did, however, try to do a couple of cursory searches to find relevance to the unemployment subject we've been bouncing around. Can you point me to place in that doc where it's discussed? I'm not saying it ain't there, I'm just admitting my ignorance in locating it.; 12/3/10, 3:10 PM
Alex said...: What's really happening is the Fed does a SQL Update on their balances. that's all folks.; 12/3/10, 3:12 PM
GMay said...: I just showed you garage. Let's add shitty reading comprehension to your list of non-existant understanding of economics and government debt.

If you want to argue stupid pedantic shit about printing money when that's a colloquial term used by even top economists and financiers, then head on back over to 4chan where I'm sure you're considered above average.; 12/3/10, 3:15 PM
garage mahal said...: You said they printed money. They didn't. Just admit you're wrong.; 12/3/10, 3:34 PM
Alex said...: garage - stop badgering your fellow commentator. You are more interested in scoring ego-points, then moving on with the discussion. You are exactly the type of asshole who I would never have a real life conversation with.; 12/3/10, 3:37 PM
test said...: "Can you point me to place in that doc where it's discussed?"

Figure 7 on page 41, discussed on page 25; 12/3/10, 3:47 PM
Scott M said...: Thanks. More glaze for the eyes.; 12/3/10, 3:50 PM
GMay said...: garage,

I'll admit I'm wrong as soon as you admit you're a blithering idiot.

Ready...go!; 12/3/10, 4:18 PM
garage mahal said...: It's alright Gmay. We all make mistakes. Even me! I know it's embarrassing, kind of like getting beat up in front of your friends.; 12/3/10, 4:30 PM
GMay said...: So you admit you're a blithering idiot. Ok, I admit I was wrong when I called you a "fucking idiot".

And to appease your inner pedant, I will no longer use the commonly accepted terminology of "printing money". I will now say that the government creates money out of the same magical unicorn farts that power the Obama administration.

We all good now?; 12/3/10, 5:09 PM
garage mahal said...: You're still not quite getting it. The government didn't create money. lol

Close enough though.; 12/3/10, 5:21 PM
Alex said...: The Federal Reserve creates money by executing SQL UPDATE statement and using replication.; 12/3/10, 5:23 PM
Anonymous said...: but can't extend a measly unemployment extension. An actual good investment, approx $1.61 return on the dollar.

I guess that's why The Obama jobs deficit now stands at 7.3 million jobs.; 12/3/10, 5:43 PM
Michael said...: Garage: You are way, way over your head here. Take your tiny victory on the printing of money in the instant of QE but for the love of God quit digging.; 12/3/10, 6:04 PM
garage mahal said...: Yea, ok Michael. You hate the fact that I know what I'm talking about. I get it.; 12/3/10, 6:21 PM
Michael said...: Garage: If I wanted to know something about a BMW 2002 I would turn to you. But if you knew how to tune a 2002 and break down the engine do not assume that you could do the same with a modern 700 series. One of the great things in life if knowing what you don't know and the topic at hand is one you should be very careful with. Have you ever seen someone come out of the men's room trailing toilet paper out of their trouser leg?; 12/3/10, 6:34 PM
garage mahal said...: My 535i is a 1990. I'm doing the rear subframe bushings this weekend. An all day rear axle removal grunt-pull-hammer ordeal. I would be lost doing that on a 2010 7 series. But I would be curious as hell how a lot of it worked. I would buy the Bentley manual and study the basics. If someone claimed it ran on lighter fluid and called me a blithering idiot for claiming otherwise, I'd be more than happy to point it out and return the favor.; 12/3/10, 6:59 PM
former law student said...: Sorry, I had to contribute to the economy.

The subject was a single flat screen TV, owned supposedly by an offically poor person. Its cash equivalent is something like $1600. 7M could not feed and house his family for more than one month for $1600. Ergo, owning a flat screen TV does not make a poor person rich.

Unless "rich" means "homeless in 30 days."; 12/3/10, 7:08 PM
Michael said...: Garage: Exactly. You make my point. I would no more presume to lecture you on the fuel injection of a 530i than I would stick my hand in a fire. And if I knew one little something about one I would not crow to you about how enlightened I was, how knowledgeable I was about the series even if I had studied the book. Because cars are not my livelihood but finance is.; 12/3/10, 7:54 PM
Michael said...: FLS: The flat screen tv example is what is known as a metaphor. It is not meant to be a literal metric for wealth. It is meant to suggest that there are better ways to spend 1600 bucks for someone without financial assets.; 12/3/10, 7:57 PM
Automatic_Wing said...: It is meant to suggest that there are better ways to spend 1600 bucks for someone without financial assets.

Exactly. How can you pay for cocaine and hookers after you've blown all your money on a TV set?; 12/3/10, 8:03 PM
garage mahal said...: Because cars are not my livelihood but finance is..

Fair enough. I will defer to you on finances.; 12/3/10, 8:05 PM
garage mahal said...: But not Gmay.; 12/3/10, 8:05 PM
former law student said...: It is meant to suggest that there are better ways to spend 1600 bucks for someone without financial assets.

Better how?

I mean fucking is free but if you have a kid you'll run through $1600 in no time.

When you have a TV you sit home and watch. Football is free all day Sunday. The library lets you borrow DVDs.; 12/3/10, 8:32 PM
Joan said...: It is meant to suggest that there are better ways to spend 1600 bucks for someone without financial assets.

Snob. Who are you to say what's "better"? Just because putting off buying the large-screen tv in favor of, say, clothing and/or feeding your children is the choice you would make, why are you imposing your choices on the poor?

The poor want the same cool gadgets as everyone else and don't see why they should be punished by not having them. They deserve that stuff, and they'll buy it (on credit, of course) when they can. There are some children of homeless families at my school; one kid was out on Monday because he was out shopping with his Mom. For a new iPod touch and some bling. You see these skinny kids shivering in the morning chill (it may be 70 degrees in the afternoon sun, but at 7AM it's only about 45 degrees), but they've all got nifty phones and MP3 players and Vans or other very, very nice shoes.

It's the culture. Thrift no longer exists as a virtue; self-denial reads as stupidity to anyone with a credit card. They're living in the present, for the now. The incremental savings from not having to pay the monthly fee on that web-enabled phone won't add up to make a significant difference, at least not to them. Not enough to get them out of their drug-infested neighborhoods or away from the gangs, anyway, so what's the point of not buying the phone/tv/expensive shoes? Right, there isn't one.

It's a mentality I deal with every day, and trying to find a way to motivate children from these households to learn is difficult.

Much the same way that getting liberals like Krugman & garage to admit that these Keynesian ideas don't work, have never worked, and will never work, simply because every dollar the government spends it gets from the productive labor of its citizens, preventing the citizens from using those dollars the way they'd like to.; 12/3/10, 8:58 PM
GMay said...: Nothing like clinging to your hopeless ignorance like a scorned child garage. You do it better than anyone here.; 12/3/10, 9:53 PM
former law student said...: $1600 sounds like a lot, but adjusted for inflation, that $1600 flat screen is far cheaper than a color TV was 35 years ago. From CafeHayek.com:

Judged by changes in the
consumer-price index, what $100 bought in 1975 takes about $354 to buy
today.[2006]

Here are some other 1975 products and their 1975 prices (along with their
inflation-adjusted 2006 prices):

Sears Best kitchen range, $589.95 ($2,088).

Sears Best television, $749.95 ($2,655)

Sears Best black and white television, $137.95 ($488)

Sears Best typewriter, $278.99 ($988)

Sears lowest-cost telephone answering machine, $99.50 ($352)

Sears highest-priced tent for four adults, $84.88 ($300); 12/3/10, 10:18 PM
Automatic_Wing said...: So poor people can get better stuff for less money than they did back in the good old days, but somehow they're worse off.

Makes no fucking sense to me.; 12/3/10, 10:28 PM
Anonymous said...: FLS:

1975: $1600
2009: $6309.10

Or, in reverse:

2009: $1600
1975: $405.76; 12/3/10, 11:08 PM
Stephen A. Meigs said...: The immediate cause of the recession is that the banks' difficulties caused them to lend less. When banks restrict lending, it effectively reduces the money supply, because for most practical purposes banks create most money via lending.

When the money supply decreases, people have less money obviously, and so this causes them to spend less, which causes a recession because there are not enough buyers for products. If prices magically deflated immediately an amount corresponding to the amount the money supply decreased, and if people didn't have expectations prices would decrease more, then indeed a decrease in money supply won't make such a difference. But why would prices deflate magically? Prices only would tend to deflate after people not having much money to buy anything would cause excess supplies that would also tend to create layoffs and concomitant misery. That a sudden decrease in the money supply tends to lead to recession I think the vast majority of academic economists, whether so-called Keynsian or monetarist, believe in because it just makes too much sense to not believe it.

Krugman is one of the few columnists who actually has economic sense. Sure, one could argue whether tax cuts or increased government spending is better at stimulating the economy, but a large percentage of columnists are too ignorant even to ask that question. Any columnist who suggests either should in the sea of idiocy that constitutes economic columnists be considered above average.

Quantitative easing, i.e., buying government bonds with printed money, is probably better than doing nothing, but with interest rates already extremely low, it becomes less and less effective as the difference between bonds and money in the strict sense becomes more and more (as interest rates on bonds becomes less and less) just a matter of what particular illustrious poohbahs are drawn on the front. Moreover, though better than printing cash to buy mortgage backed securities, it should be seen as a further subsidy of the banks, whose stash of mortgage backed securities, etc., become more valuable when it is more difficult to earn investment income elsewhere. And it's the sort of thing that is better for investors in stock, whose stocks become more valuable as their dividends look better compared with increasingly paltry bond returns. Less wealthy people who more tend to earn interest incomes from savings accounts and short-term CDs will suffer because the interest rates will fall even further. And low interest rates fueled much of the speculative boom and disincentive to save that created the mess to begin with.

Wanting a balanced budget now is very stupid. Interest rates are already ridiculously low, and so the monetarist solutions are not desirable or workable. So what are the only reasonable alternatives? Lower taxes or increased government spending (or both). The money supply needs to be increased with deficits.; 12/4/10, 8:19 AM
Anonymous said...: I see Meigs has come to spew again. Nobody is going read that, dude.; 12/4/10, 8:11 PM
Stephen A. Meigs said...: Well, Seven Machos, there is always the danger of posting something late likely to remain at the end of a thread, because certain nasty people, not being the cleverest sort, aren't quite sure what sort of ends they like to corrupt. It's largely why tailgating is so common and dangerous. But I'm not particularly scared, because I sense the difference between the rear end of a thread and my own rear end.; 12/5/10, 12:28 AM