Tag Archives: Krugman

WHAT DEBT?

Paul Krugman has good news for Californians and all Americans, particularly your grandchildren and those who are still just a wink in the eye of their parents.  There is no debt problem after all.  Sounds a bit radical but it can’t be.  The president said the very same thing in a meeting with the Speaker of the House.

According to the gospel of Paul, NYT: Jan 17

“The budget deficit isn’t our biggest problem, by a long shot. Furthermore, it’s a problem that is already, to a large degree, solved.” -  and – “(Similar things are happening at the state and local levels — for example, California appears to be back in budget surplus.)”

I say, give the man a handicap sticker for his car.  He is as blind as a bat.

With no apologies for the lack of a segway, here is a thought from a man whose vocabulary was bigger than a dictionary, William F. Buckley.  Buckley said that while the Left says it is open to other points of view, it always shocks them to discover that there are other points of view.

KRUGMAN DOES GREECE

What follows are verbatim quotes from Paul Krugman’s article today in the New York Times.

“Yes, there are big failings in Greece’s economy, its politics and no doubt its society.”
“Greece does indeed have a lot of corruption and a lot of tax evasion, and the Greek government has had a habit of living beyond its means.”
“Beyond that, Greek labor productivity is low by European standards — about 25 percent below the European Union average.”

From that Krugman concludes:

“But those failings aren’t what caused the crisis that is tearing Greece apart…”
“The Germans and the European Central Bank [must] realize that they’re the ones who need to change their behavior, spending more and, yes, accepting higher inflation…Greece will basically go down in history as the victim of other people’s hubris.”

In Krugman’s world, wherever that is, if a nation is ridden with corruption, allows extensive tax evasion and has a habit of living beyond its means for years, then when the money runs out it’s someone elses fault. With thinking like that the man could become president of the United States.

And then the economist turned journalist asks why the U.S. doesn’t have “the kind of severe regional crises now afflicting Europe?” His answer is “that we have a strong central government, and the activities of this government in effect provide automatic bailouts to states that get in trouble.”

So the reason America remains on a relatively sound footing is because we support failures automatically.

FAKE ECONOMIST SEES ONLY SHAME IN 911. IT’S KRUGMAN OF COURSE

September 11, 2001 attacks in New York City: V...

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Paul Krugman couldn’t bring himself to say one single decent thing about one single human being in his New York Times column on the tenth anniversary of the World Trade Center tragedy.  Thousands of real heroes, 2.977 victims, every one innocent, a solemn day of remembrance and this Nobel Prize winner cannot put his ideology aside to say one word in honor of the dead.  He uses the day only to vent his anger.  Hate consumes a man’s soul.

Forgive me for my immodesty, but I ask you to compare what this high school graduate wrote in the post below to what the New York Times just published by a Princeton professor with a PHD.  Now tell me, if you were the publisher of the world’s paper of record, which writer would you hire and which one would you fire? Would you go with the PHD or the common man?


PAUL KRUGMAN BREATHES LIFE INTO AN OLD JOKE ABOUT THE NEW YORK TIMES

Headline from the New York Times:
World to End Tuesday! Women and Children Expected to be Hardest Hit!”

That was the old joke. Krugman’s actual headline on Feb 27,2011 read “Leaving Children Behind“.
The theme of his piece is that Republicans are making “draconian cuts in spending… And who will bear the brunt of these cuts? America’s children.”

KRUGMAN’S WORLD

Perhaps the sky is green, the ocean is orange with pink polka-dots and the chairs all clap as he approaches the podium. Paul Krugman lives in another world.

There are zombies in Krugman’s world and ‘they are us’. Krugman’s podium is the NY Times where he writes Op-Ed articles like Monday’s When Zombies Win. Reflecting on the mid-term elections he asks “How did that happen?” It is not a rhetorical question. He truly doesn’t know. Where in the world has…excuse me, where out of the world has he been? In the bubble, of course in a self imposed exile shielded from alternative thought.

“Free market fundamentalists have been wrong about everything.” Everything, Paul? If everything is wrong, then the only alternative would be socialism, wouldn’t it?

“The Obama stimulus – which was about 40% tax cuts, ” Forty percent tax cuts? Were did that come from? The green sky perhaps.

“Clinton …raised taxes and… presided over spectacular job growth .” You got that right, but I would have liked it better if you had said “presided over spectacular job growth and then he raised taxes”, for that was the order in which they occurred. You also might have added that Clinton inherited a growing economy from Bush the senior, then presided over the dot com bubble, and handed the bust to Bush the junior along with a rapidly collapsing economy.

“Bush… cut taxes and presided over anemic growth even before the crisis.” Which crisis, Paul? I presume you mean 911. Facts are right again, but I think you are connecting the cart to the wrong end of the horse. The order was (1) anemic growth – as we said, inherited from Clinton, (2) tax cuts – yes, to stimulate the economy when it was poor, (3) the crisis – an incipient recovery cut off at the knees by 19 Islamists, 3 airplanes and 6 pilots with slit throats.

Do you know what came next, Paul? It was a strong economy, nearly 4% annual growth and a jobless rate that fell to 4.4%. And then clipped at the knees again, the mortgage crisis. Who brought that about? Space doesn’t allow explaining that here, but you can read about it here and here. It wasn’t George Bush.

Dear reader and fellow zombie, I haven’t even covered the first four paragraphs. Let’s skip the rest and go straight to the end. Krugman does not like the tax deal Obama just made with the enemy. He says “We all understand the need to deal with one’s political enemies. But it’s one thing to make deals to advance your goals; it’s another to open the door to zombie ideas. When you do that, the zombies end up eating your brain — and quite possibly your economy too”.

Definitions;
Zombie – a soulless body in the Voodoo cult of Haiti
Enemy – any Republican

“WILL SOMEONE PLEASE SHUT PAUL KRUGMAN UP”

The Economist in Chief for the New York Times has been pleading for our government to spend more, spend heavily and spend it now. Nobel Paul insists we must spend and spend until the economy improves. Like the old carpenters joke “I measured twice and cut twice, but the board was still too short”, Krugman would have us keep cutting the board until it is long enough.

Thankfully no one is listening, not even Barack Obama. Perhaps hoping for a more appreciative ear across the pond, Krugman turned to England. His urgings for the U.K. to spend its way out of debt prompted the UK Telegraph to run the headline that is the title of this post.

“Professor Krugman lambasts Britain’s coalition government in his latest column for its deficit reduction plan, which he reckons will condemn the UK to a depression.

Here’s a taste: “What happens now? Maybe Britain will get lucky, and something will come along to rescue the economy. But the best guess is that Britain in 2011 will look like Britain in 1931, or the United States in 1937, or Japan in 1997. That is, premature fiscal austerity will lead to a renewed economic slump. As always, those who refuse to learn from the past are doomed to repeat it”.

Krugman is obviously referring to the Roosevelt era and inferring that the Great Depression occurred because FDR did not spend enough. When Roosevelt assumed office the National debt was less than 20% of GDP. By the end of his first term it was 50% of GDP, now it is about 90%. On May 9, 1939, after 7 years of the Roosevelt administration, Henry Morgenthau, FDR’s Treasury Secretary and chief architect of the New Deal said “We have tried spending money. We are spending more than we have ever spent before and it does not work.”

Now just who is it that is refusing to learn from the past?

KRUGMAN IS CORRECT, PARTLY

Krugman may be a Progressive political advocate posing as an economist but when Krugman is right, Krugman is right, well partly. In a recent Op Ed piece for the Times he writes “Default Is In Our Stars”. His thesis is that excessive debt played a key role in the creation of the current financial crisis and that reducing debt to reasonable levels by curtailing spending puts a damper on the economy. That much is correct.

He didn’t exactly say debt, he said personal debt. I don’t think he considers government debt to be debt. Having started his piece by saying (personal) debt was a cause of the crisis he then says “A naive view says that what we need is a return to virtue: everyone needs to save more, pay down debt, and restore healthy balance sheets.” That is naïve?

Our Nobel winning economist has been calling all along for the government to go deeper in debt on another stimulus plan. Now he is calling for consumers not to save and not to slack off on their spending. In other words, to remain over-extended. That idea would push the problem further down the road and deepen it. Then what of the future?

It has long been my opinion that those on his side of the political divide are given to short term thinking. Give a hungry man a fish and the problem of hunger is solved. If he is hungry again tomorrow, give him another fish. Meanwhile, condemn the fisherman for trying to gain from his work. If the supply runs out…..no never mind that, the man is hungry. Just give him a fish.

Krugman’s solution – “In the end, I’d argue, what must happen is an effective default on a significant part of debt, one way or another.” What is default? It is a broken commitment. It is passing the cost of ones spending onto someone else. It is the liberal solution. And “one way or another” is an example of not thinking something through to its consequences.

The default could be implicit, via a period of moderate inflation that reduces the real burden of debt; that’s how World War II cured the depression.” Huh? It was inflation that cured the Depression? He could not have meant that it was WWII that got us out of the Depression, not FDR; that’s an observation only made by Conservatives and denied by the Left.

Let me see, do I have this right? What the nation needs now is is continued high levels of personal debt, less personal savings, more government money spent on stimulus programs, which means a higher level of government debt, and a return of inflation. It makes me proud to say I do not have a PhD.

Here is a link if you want to read the article.