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Stay the Course
For this is the third time in history that a major economy has found itself in a liquidity trap, a situation in which interest-rate cuts, the conventional way to perk up the economy, have reached their limit. When this happens, unconventional measures are the only way to fight recession.
Yet such unconventional measures make the conventionally minded uncomfortable, and they keep pushing for a return to normalcy. In previous liquidity-trap episodes, policy makers gave in to these pressures far too soon, plunging the economy back into crisis. And if the critics have their way, we'll do the same thing this time.
The first example of policy in a liquidity trap comes from the 1930s. The U.S. economy grew rapidly from 1933 to 1937, helped along by New Deal policies. America, however, remained well short of full employment.
Yet policy makers stopped worrying about depression and started worrying about inflation. The Federal Reserve tightened monetary policy, while F.D.R. tried to balance the federal budget. Sure enough, the economy slumped again, and full recovery had to wait for World War II.
The second example is Japan in the 1990s. After slumping early in the decade, Japan experienced a partial recovery, with the economy growing almost 3 percent in 1996. Policy makers responded by shifting their focus to the budget deficit, raising taxes and cutting spending. Japan proceeded to slide back into recession.
And here we go again.
On one side, the inflation worriers are harassing the Fed. The latest example: Arthur Laffer, he of the curve, warns that the Fed's policies will cause devastating inflation. He recommends, among other things, possibly raising banks' reserve requirements, which happens to be exactly what the Fed did in 1936 and 1937 - a move that none other than Milton Friedman condemned as helping to strangle economic recovery.
Meanwhile, there are demands from several directions that President Obama's fiscal stimulus plan be canceled.
Some, especially in Europe, argue that stimulus isn't needed, because the economy is already turning around.
Others claim that government borrowing is driving up interest rates, and that this will derail recovery.
And Republicans, providing a bit of comic relief, are saying that the stimulus has failed, because the enabling legislation was passed four months ago - wow, four whole months! - yet unemployment is still rising. This suggests an interesting comparison with the economic record of Ronald Reagan, whose 1981 tax cut was followed by no less than 16 months of rising unemployment.
O.K., time for some reality checks.
First of all, while stock markets have been celebrating the economy's "green shoots," the fact is that unemployment is very high and still rising. That is, we're not even experiencing the kind of growth that led to the big mistakes of 1937 and 1997. It's way too soon to declare victory.
What about the claim that the Fed is risking inflation? It isn't. Mr. Laffer seems panicked by a rapid rise in the monetary base, the sum of currency in circulation and the reserves of banks. But a rising monetary base isn't inflationary when you're in a liquidity trap. America's monetary base doubled between 1929 and 1939; prices fell 19 percent. Japan's monetary base rose 85 percent between 1997 and 2003; deflation continued apace.
Well then, what about all that government borrowing? All it's doing is offsetting a plunge in private borrowing - total borrowing is down, not up. Indeed, if the government weren't running a big deficit right now, the economy would probably be well on its way to a full-fledged depression.
Oh, and investors' growing confidence that we'll manage to avoid a full-fledged depression - not the pressure of government borrowing - explains the recent rise in long-term interest rates. These rates, by the way, are still low by historical standards. They're just not as low as they were at the peak of the panic, earlier this year.
To sum up: A few months ago the U.S. economy was in danger of falling into depression. Aggressive monetary policy and deficit spending have, for the time being, averted that danger. And suddenly critics are demanding that we call the whole thing off, and revert to business as usual.
Those demands should be ignored. It's much too soon to give up on policies that have, at most, pulled us a few inches back from the edge of the abyss.
- Posted in
48 Comments so far
Show AllWill the public bite? The fact that Obama's measures have been timid and ineffective will be seen by most as reason to pull back-- not to move toward stronger action. I think this is a mistake Obama will not recover from. In 2012 we will probably go back to Republican governance-- and almost everyone, no matter how much they may suffer will once again have learned the wrong lessons.
So Krugman basically says, "Just keep printing money and everything will be okay, and don't worry about inflation because massive fiat money created out of thin air won't cause inflation. He also gave me a great deal on the Brooklyn bridge.
Aren't you glad your so much smarter than Krugman? Can't you hardly wait for the Republicans to come back into power with their superior fiscal policies? Ok, look, I'll admit all I ever took was Econ 101. What about you?
Greg, I'm just going on my gut. Yeah, I had a couple econ courses, we all did. I know that Krugman offered examples to support his point. I just cannot see how huge increases in "M3" cannot result in hyperinflation. Believe me, I will be quite pleased to be proven wrong. I generally agree with Krugman, just not this time. Am I smarter? Maybe. If hyperinflation develops I guess I am. If not then I'm just another asshole with an opinion.
The Obama Administration seems to be continuing the policies of the previous Republican Administration, which in order to protect the guilty, shall remain unnamed. Escalation in Afghanistan. Urging the Pakistani government to attack its own citizens, yes, those deemed to be "terrorists" by the United States, even though those particular people have never attacked the US. But both administrations assert that we must be very afraid of these "terrorist networks" because, no shit, they really do want to attack us. (Anyone ever wonder why, really?) Anyway, possibly that is true. But a better, cheaper, more logical and less deadly approach would be infiltration of those 'terrorist' groups by legitimate, existing police agencies, not wholesale military invasions of multiple countries. Obama has in fact increased the defense (sic) budget. As would have the Bush Administration.
Why was all of that not off topic? Because it is one of the money pits the US Taxpayer is forced to finance. Krugman is an economist. Why does he not point out the tremendous drain our militarist interventionist foreign policy since the end of World War II has had on the treasury? Without that, the current crisis would never have developed.
As always, in my humble opinion.
Well, in defense of Krugman (and I love to defend the guy cause I think he's exceptional), he did stand up against Bush war policy. Of course the defense budget and related expenses amount to no less than 1/2 of US government spending. It is insane, but difficult to change since money and politics have nothing to do with logic. Simply walking away from Bush's wars is easier said than done. Avoiding foreign entanglements in the first place is far preferred. With Obama's recent appointment of new military leadership in Af-Pak, it seems the plan is for smaller scale strikes against Taliban, etc. As we are getting uncomfortably close to a decade in our current Afghan debacle, somebody better come up with something better pretty damn quick or give the fuck up.
Ekaton's got a right to speak, degree or no.
But I'm wondering, Ekaton, why your translation of Krugman reads so differently than Krugman, when you both seem to be writing English.
Since I'm up the Same Famous Creek without an econ degree myself, though, what I'd like to hear from Krugman is what fallout we will get because the rich boys with the deep pockets are sucking up all that bailout $$. It seems to me that while prices are falling, the chosen rogues can hold money back, then snap things up quickly when they think prices will rise.
It seems that the problem is not just recession vs inflation, but massive theft. Why shouldn't I think of these bailout schemes as Robin Hood as a bad drunk, stealing from the poor and middle class to give to the chosen rich?
When the rich decide to bring their loot back into the economy, doesn't that mean that the rest of us have to provide them services for table scraps? As I understand it, part of the reason this worked in the sense that it did work under Roosevelt had to do with the introduction of a graduated income tax. Obama seems to be staying the Bush course by shunting money to the rich and pretending that it will drift comfortably to the lower classes.
I would be more confident about deficit spending if I found anyone spending on anything anybody needs. But Obama's bleeding resources just to bleed others. Why should any of us pay because a few corporate cowpokes want to burn half of everything between Tel Aviv and the Pashtun?
It's not just the Federales, either. As California slips into its own financial sunset, the Governator decides, "Whoops, no more education or hospitals" while spending goes on to house prisoners corralled for drug charges and the immigrants guilty of picking and preparing our food, caretaking our kids and cleaning our houses, hefting our furniture, sewing our clothes.
Maybe the next time Arnold sits down and has a couple hits, he should think about the drug laws and what it costs to occupy over half of the entire law enforcement and penal system just to keep California's main cash crop off of the tax rolls.
In general, lacking said degree, I have to wonder how this-all does or does not correspond to a household wherein Dad and Mom charge out all the credit cards to buy firearms to shoot up the gas station on the corner, buy GPS & and surveillance hoodoo to check the older kids' drug habits, let Grandma croak in the living room when she goofs in her self-medication, then shrug when the kids talk about school and say, "Shuck's, there just ain't no way."
I'm sure Krugman does not mean to defend WHAT the $$ is spent on, but experience with small economies suggests that such details might become important.
Good point about the money being spent on crap. Less than 1% is being spent on renewable energy. This is what Obama holds up as Repowering America. Bunch of slick hucksters getting over, Krugman too. I went to see him give a talk live. I tried to ask him some hard questions about the economy, Peak oil, manipulating unemployment statistics, printing cash toward inflation. You know what he told me? Nothing, didn't answer any of my questions, told me it was my imaginiation that unemployment statistics were manipulated and that he didn't feel like answering the rest of what I asked him.
He's a numnut establishment douche bag obviously.
I've been to a Krugman talk too. By the way, did you ever see that study that came out a few years ago which revealed that most stupid people don't realize that they are? It's really quite fascinating.
You write with more eloquence, humor and insight than I will ever achieve.
Kent
No/one/is/shutting/up/EKATON/or/being/abusive./Sarcasm/is/warranted/from/time/to/time/and/by
/itself/should/not/be/offensive/to/anyone/who/is/not/overly/sensitive.
Sorry--/my/laptop/keyboard/has/no/spacebar.
Okey doke.
Try dots between words instead, and hit return every twelve words or so...
So the latter half of your message won't go off the sceen window...
Unless you are just joking...
Rabid, right wing Republicans best hope is for too little government stimulus money. If the economy continues to stagnate, they may have hope of a return to power. Their only other hope (like Cheney's?) is for a major terrorist attack. I'm sure a few right wingers are currently planning for that also. For some of these radicals, the end justifies the means, and sometimes the means are bad medicine indeed.
juxtapose this article with the one today by Chris Hedges...why does Krugman not mention the global picture Hedges outlines?
Hedges is very intelligent, but he has a problem with becoming a devote to his own apocalyptic visions. He was trained in religion throughout his younger years and then saw a lot of crap as an overseas reporter. I've read and listened to many of his thoughts, and he generally expresses a great deal of certainty to his nearly relentlessly pessimistic views. I believe his certainty is much like that of religious devotees who simply "believe."
Hedges was really quoting Hudson.
“Milton Friedman’s misfortune is that his policies have been tried.”
---John Kenneth Galbraith
Well Greg, read “Collateral Damage” by E. P Heidner, part I and II.
>>> www.scribd.com/people/documents/2169400-ep-heidner <<<
and then tell me if that doesn't challenge your optimism.
As for Krugman: "Aggressive monetary policy and deficit spending have, for the time being, averted that danger."
Yes, FOR THE TIME BEING.........
The U.S. Government has crafted a distortion of reality. They have found a way to cover up 85% of the nation's actual debt!
The Feds essentially keep two sets of books that make up America's debt portfolio. The first set of books is the widely publicized "National Public Debt." The National Public Debt is currently over $11 trillion and is climbing at a rate of almost $4 billion per day. This is the figure that's quoted in the evening news and on the famous U.S. National Debt Clock in Manhattan. In the past century, this debt has skyrocketed nearly 400,000%.
But the National Public Debt doesn't even come close to telling half of the story.
The U.S. Government Is Another $60 Trillion in the Hole!
The U.S. government doesn't classify future financial responsibilities such as social security, government-sponsored health care, and other contractual obligations as "public debt." With this simple act of reclassification the Feds have been able to shield the American public from the truth about the country's actual debt position. Nevertheless, these financial obligations will cost the American taxpayers roughly $60 trillion!
This debt is no secret among Washington insiders, nor is the fact that the government is trying to hide it. In fact, David Walker, the former U.S. Comptroller General and the nation's top accountant between 1998 and 2008 said, "As the federal official who signs the audit report on the government's financial statements, it is apparent that our government's financial condition is far worse than advertised."
Walker has also said, "Current federal financial reporting and budgeting provides policymakers and the public with an incomplete and even misleading picture."Add it all up, and the United States government is on the line for almost $70 trillion in total financial obligations, including public debt.
This is today’s scenario. Lets look at what’s coming:
The U.S. Government Accountability Office released a new report a few weeks ago called "The Federal Government's Financial Health." In this report, the GAO reported an expected increase in National Public Debt of over 500% within the next several decades! And this is the U.S. government's own estimates!!!
A similar move in the nation's actual debt — that's the National Public Debt plus all other fiscal responsibilities — would result in a total financial obligation of over $550 trillion! That's over $1.8 million that would be owed by every American citizen!
But back to the present: America's current $70 trillion debt works out to about $500,000 per working American or to put it differently, every American child is born into debt owing nearly a quarter million dollars! The interest on that debt alone is going to cost almost twice as much as educating the child!
And here is the most interesting bit: the blame for this swindle cannot be attributed to one party, Democrats or Republicans, but is rooted in the whole system.
The addicted system just ran out of smokes.
We are still denying addiction.
We have to get to the shop tomorrow.
We've found a nicotine patch in the drawer.
On it it says: 'CHANGE WE CAN BELIEVE IN'.
Trying to make sense of the TOTAL US debt is quite a complicated process. I won't pretend I know much about it, but it is easy to make the situation look far more dire than it actually is. SS will pay for itself for 2 or 4 more decades, and of course some 'adjustments' will be necessary (but far from horrific). Medicaid and health care are the HUGE problems America faces...no easy answers. Once the economic mess we're in is over, we must do far better at balancing our budget. I blame Reagan and W for massive deficit spending that was definitely not required.
Brilliant post, yachtie...!
Thanks for the EPHeidner link...
Everyone here should take the time to read this 100 page historical essay to get the big picture...
Ditto!
Let's not forget that we will be seeing over $2 Trillion in Alt-A loans resetting between 2010-2013. According to the article I read, close to 20 percent of these are already in default.
"The switch-back to “mark-to-make-believe” accounting is an expedient scheme that allows the banking elite to conceal their losses and use the same obscure and discredited models to inflate their balance sheets."
When you can eliminate "accounting rules", the financials can then be seen again through rose-colored glasses.
Precisely my thoughts. You beat me to it. The major omission in Krugman's article is the American dollar, which appears to be on the chopping block as a new form of currency replaces it as the international monetary standard. At this point, I am more inclined to go along with Michael Hudson than Paul Krugman.
One thing I didn't hear Hedges mention: that the U.S.'s kick-butt military doesn't figure in the thinking of people who'd want to dump our currency. Frankly, I think it DOES figure into their thinking. It's got to scare them. I'm not saying its right. Russia and China can, of course, do their own thing, and will. But India might be a little worried about ticking off Uncle Sam, and that goes for many other countries as well that might need our help in the future. I noticed Japan is not represented in those talks...
Good point.
“Milton Friedman’s misfortune is that his policies have been tried.”
---John Kenneth Galbraith
Cicero: "Freedom is participation in power."
Krugman seems to want the Fed to continue to run the currency printing presses 24/7 and he wants, I suspect, much more stimulus spending. I agree with him on the stimulus spending. I don't fully understand all the ramifications of currency inflation as they relate to the present situation based on his historical analysis. I think the danger of hyper-inflation is real, but I think few can predict at this point how long we have before it is triggered and what would trigger it.
Krugman seems to envision a balancing act between having money available for private investment, encouraging them to jump in asap, priming that pump with government stimulus spending on a larger, better planned scale than what we've seen so far--and failing to adequately prime the stimulus pump--therefore leading to a renewed depressionary spiral. If that happens, I think coeval inflation will feed into that spiral.
But the devil is in the details of the "stimulus": Whether it continues to over-rely on short-term infrastructure projects or does the difficult but urgently needed work of investing in re-building a long-term (hopefully much more Green) middle-class sustaining industrial manufacturing base within the U.S.
That means re-writing "free trade" treaties with enforceable labor and environmental protections. Perhaps a global minimum wage periodically adjusted to reflect global market evolutions--among other things. American industrial workers could never compete with foreign workers making the equivalent of around a dollar an hour (typical). That's a lesson our corrupt "investor class" rulers & "news" media elites are still failing to learn. But the need for a strong middle-class industrial job base is a market fundamental in terms of pushing the U.S. back into the direction of being an economically stable creditor nation with a strong and vibrant middle-class instead of the world's biggest debtor nation.
We are that debtor nation dominated by a few old Big Money oligarchs (increasingly a true inherited aristocracy in nearly every sense); moving rapidly toward a dwindling professional-dominated middle support class for that elite, and massive growing swarms of economic peons upon whom it will soon dawn that they will never have a chance for upward mobility towards realization of the American dream.
When they made the mistakes in the mid- to late 1930s that Krugman cites, World War II soon necessitated an urgent increase in industrial production and conversion of auto plants to the manufacture of war materials.
Absent the mass-perceived urgency of war-time spending to expeditiously ramp up that kind of industrial production, an intelligent administration and Congress would recognize the critical need to sell the public on the legitimate urgency (for both economic and global environmental reasons) to ramp up production and conversion to a Green export-based economy that creates environmentally sustainable goods, products, services and an entirely new energy delivery system that helps make as many people (here and around the world) energy self-reliant on alternative energy sources as possible.
The key is to get such a system up and running to fulfill domestic employment, middle-class wage & spending needs and re-generate lost economies of scale--thus significantly increasing revenue streams--and then expand into global export of the new goods, technologies & services asap.
The dollar was poised to significantly fall but the Russians announced they can find no better alternative than to continue to rely on the dollar (which their officials claim they have full faith in) as the key global reserve currency so it has had at least a temporary boost.
But time is running out on Team Obama to get their act together.
You have a lot of good thoughts here, but the global minimum wage won't happen anytime soon.
Krugman is a phoney of sorts. He is still banking on the "good" Obama who will instill fiscal disipline into the markets while everybody else has recognized Obama for the corporate stooge that he really is. The ship has sailed on actually trying to address these financial chasms brought about by Bush and his cronies. Obmama is merely continuing Bush economic policies albeit with a little window dressing. All this backroom dealing and enabling the banks will create another financial bubble before another collapse. So when Krugman says "stay the course", it's course headed straight for disaster once again.
One more thing. Krugman does not seemed to be concerned about inflation even though the govt. has poured millions of dollars into system. That is why there is no move to raise interest rates. Unchecked inflation as Greenspan even knows in the face of a long sustained rescession will create even more disastrous results. Krugman - like Obama - seems to want it both ways: Give the appearance that he is for the common good or the working man while pandering and placating his corporate cronies. This will never work.
Your ideas on inflation are incomplete. Do some serious study. Yes, too much inflation is bad and it's a tricky balancing act. Anyway, if you're worrying more about inflation than losing your job, then your lucky.
Krugman calls again for gluttony/greed minus a delta. What a magical little delta enabling such gargantuan gluttony/greed. Ah, liberalism!
Cicero: "Freedom is participation in power."
rtdrury's comment here is gibberish. Krugman cites historical data to support his contention than inflation is not the primary concern in present circumstances and he alludes to his previous expressions of the need for much more stimulus spending (at least equivalent to the loss in demand since last November). Authentic liberalism (which existed prior to 1980) does not support the level of socialism for the super-rich advocated by Obama, and does support much more and better planned stimulus spending under conditions such as those that exist today. The initiation of the bank "bailouts" was so fiscally irresponsible that it really isn't even authentically Republican by any historical comparison that existed prior to Duhhbya. This model of bailout supported both by Team Bush and Team Obama is so above and beyond the law, ethics, morals and any sense but greed that it is closer to the behavior of a global mafia crime organization than any previous American political faction: One that is still pressuring the EU banks to kowtow to its mafia hierarchy.
Sioux Rose
METAL: Very well-stated. I feel what you feel. The degree to which law, order and basic principles have been ostensibly sold out seems something straight out of fiction. Apparently the progeny of "The Chicago School" can only relate to numbers, as opposed to anything human or humane. And their agendas, bereft of any consideration for human beings reflects this bankrupt ethos. Perhaps this is why Chris Hedge's awful predictions have a ring of truth to them, for the boomerang of karma will sooner or later hit home. Sadly those at the bottom of the fiscal pyramid will feel the weight of these egregious decisions/policies the most.
from June 9th's Asia Times:
http://www.atimes.com/atimes/China_Business/KF09Cb01.html
To Greg R, if you think Obama's stimulus plan along with these bank bailouts is going to produce anything but inflation, guess again. I not going into a long diatribe as to how inflation works or doesn't work. What I'm saying is consistant Bush policies have already produced disaster and more of the same will cost the country thousands of more jobs. Paulson was more concerned about placating Wall Street before the crash and look at the consequence: thousands of layoffs, jobs cut, plants closed. This will be no different. It's just a masquerade we're getting from Obama right now.
Paulson and the bank bailouts are one thing. If you think bailing out the banks caused thousands of layoffs, etc, then you're really not up to speed. Speaking of the stimulus plan only, without it, we could easily have deflation, and if you understand the consequences of that shit, then I know you don't want that. Anyway, I personally know several people who will have employment this summer because of the stimulus plan. Without it, they would have been on the government dole. Honestly, if you look at the total picture, we can have our stimulus cake and eat it too.
Where is the inflation?
Home prices are way down - deflation
They can't even give cars away - deflation
oil is still half the price it was a year ago.
Travel and tourism - deflation
Restaurants - deflation
Everyone is buying necessities at Walmart - deflation
I suppose when things revert back to normal we can call that inflation - Right now I'd welcome some inflation.
Excellent
observations--
mahalo
!!!
Cicero: "Freedom is participation in power."
Regular gasoline has risen .70 cents a gallon in the last two months where I live.
Food prices have been inching up for months. Were the value of the dollar to plunge again simultaneous with rising full spectrum inflation it would quickly become unaffordable even to shop at Walmart. If that happens it will be one of the signs that it's Amurkan Empire Over for good. Be very careful what you wish for.
Gee, I'm just a dumb old man from Maine, and I don't know much. Had economics 101 way back in the early 70's. It seem to me however, that had the government sent to every tax paying household a check for 20k instead of giving billions to the banking, insurance and auto industries, we would be WAY ahead now. Yes, it would still be fiat money, but the individual household would have spent the money paying mortgages, buying cars, buying imported cheaply made goods. The money would be in the same pockets as it is now, except the bottom would not be dropping out. Could be wrong, but 'trickle down' stunk under Reagan and smells just as badly under Bush/Obama... (nearly all of today's policies were set into motion before GW left office). Just an opinion
Cicero: "Freedom is participation in power."
If Team Bush or Team Obama and the Fed had committed $10 Trillion dollars to buy up all the bad home mortgages (not the stratospherically multiplied derivatives that avariciously re-leveraged them to the global tune of $64 Trillion but just the original mortgages themselves) we would not be committed to $12 Trillion in bank and insurance company "bailouts" and counting. Those banks are still flooded with bad paper, many of them hiding the fact that even with the bailout money they are still underwater. Their bailouts amount to an outrageous transfer of wealth without solving any fundamental economic problem. Bernanke has been playing one shell game after another to buy time and Obama and his Chicago boys have been going along with him and their Big Bank campaign money benefactors. But the masquerade ball is coming to an end and there are only one or two more games Bernanke can play. Obama will be an more naked emperor than Duhhbya if he doesn't get his shit together very soon. Four to six months or less.
Sioux Rose
METAL: Once again laser sharp insights. I see what you see and the ramifications are something to fear.
Historical precedents are good and in some ways comforting, but it's probably just as probable that the current economic malaise has no real precedent and is re-building the global economic architecture.
If Chris Hedges has it his way the USA will be reduced to a second tier supplier state beholden to former communist states (and wasn’t that the communist aim, to destroy the dollar?) and their energy supplier puppets, with every facet of the so-called American way of life reduced to receivership values and practices. I'm not so sure that is entirely accurate, because, just as Krugman points out, those in control of the levers and chutes of capital are wary of and will not commit to any new formula or way of doing things for fear they will upset their apple cart (any body else’s be damned!). They are unwilling to sacrifice their own well being and, as a class, are in the process of and will continue to denude and defoliate the middle classes and the entitlement class (that buffer class systemically required, utilized and concurrently demonized by the beneficiary class that has run our economic system aground) in order to protect their own level of consumption. They will have no compunctions about, and will profess true belief in, a continuation of the maxim that what is good for them will be good for the great mass of the rest of us, regardless of all obvious proof otherwise. Kinda like GM insisting that the only cars Americans will buy are bizarre and grandiose SUVs and trucks as they are in the process of losing market share at rather dramatic rates.
They are afraid. But, if they are successful in their attempt to strip the USA of its middle class, and equally successful at maintaining order and squelching anger through the skillful use of propaganda disguised as entertainment, virtual social networking, sports, virtual reality as entertainment, and the religiosity paradigm, then they have nothing to worry about. They will most likely not live here anyway if the shit hits the fan.
In 2002, Krugman was arguing for exactly the policies that got us in this mess.
Here is the quote:
"Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
And here is the link:
http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html
Now he is arguing for creating yet another bubble using quantitative easing and it will END EVEN WORSE! There will be no more bubbles after this only collapse. The more we follow the policies argued for by economists like Krugman, the worse it will be.
Wow "at law" I hope you are not actually practicing law. You just committed a serious ethical breach. You put words you knew were wrong into the mouth of Paul Krugman whose shoes you are not fit to shine.
the Quote you cite was really a sarcastic quip, a JOKE regarding another conservative's bloviation. And it obviously went right over your head at 65 miles per hour.
http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html
The actual QUOTATION is this:
"And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble."
"Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off. But the Fed chairman's crystal ball has been cloudy lately; remember how he urged Congress to cut taxes to head off the risk of excessive budget surpluses? And a sober look at recent data is not encouraging."
(skipping down)
..."Bear in mind also that government officials have a stake in accentuating the positive. The administration needs a recovery because, with deficits exploding, the only way it can justify that tax cut is by pretending that it was just what the economy needed. Mr. Greenspan needs one to avoid awkward questions about his own role in creating the stock market bubble."
But wishful thinking aside, I just don't understand the grounds for optimism. Who, exactly, is about to start spending a lot more? At this point it's a lot easier to tell a story about how the recovery will stall than about how it will speed up. And while I like movies with happy endings as much as the next guy, a movie isn't realistic unless the story line makes sense."
no room for talk of doing less? the problem we're facing isn't a dying economy, it's a dying planet due to our economy...the very economy we continue to discuss reviving...how does that reconcile with environmental destruction?
tammons we are already in repuglican governance now. you didn't notice. new wars
lack of transparency and a major reneging on campaign promises! what's the difference
again?
Krugman, it really doesn't matter which side of Wall Street governs. Dem or Rep it is still Wall Street. Until the rights of individuals are once again elevated above those of the corporations, the corporations will win.
Overturn of Santa Clara County or Revolution - which will happen first?
atlaw perhaps you should switch to mechanics which would make you another TOOL in
the box. oh and leave law to the professionals!
Give me a break! What a bunch of bovine scat! Oakland, California has 16.5% unemployment, and Obama is worried about stepping on toes. He says "States must Balance their budgets" to CA who has a 24 billion dolla short fall, but willingly gives AIG over 200 billion before he practically gets into office. Who does this niggah think he's foolin'? The "Black" folks out here who supported him are already over him. Like the rest of the country will really recover while California is suffering, uh huh.
I don't remember Roosevelt ignoring the middle class. This guy is an uncle tom, Obama that is.
He also called Arnold "a great innovator of State government" when he visited a couple months back. Exactly, they're birds of a feather.
I guess Obama expects California to ante up some soldiers for his new War. There should be plenty since the cops are out of work and all the community colleges are cutting their resources to the max. Wow, Change. I'm so glad GM got millions too!!!!!!!! WTF??
Isn't that Bush's phrase? "Stay the course". WTF?