Tag Archives: Paul Krugman


Paul Krugman, ever the liberal, is less vituperative than usual in today’s column in the New York Times.  It is entitled Europe’s Austerity Madness and is well worth reading.  Not for the column’s correctness but for its clarity.  He outlines with rare accuracy the predominant views of the cause of Europe’s financial woes and the solution for them.

First we must note that what passes for the Right in most of Europe would be called Liberal in the U.S.  This places Krugman’s argument more in the Socialist camp than Liberal.  He says of the European Right,

Talk to German officials and they will portray the euro crisis as a morality play, a tale of countries that lived high and now face the inevitable reckoning.

And fear of a backlash from voters who believe, wrongly, that they’re being put on the hook for the consequences of southern European irresponsibility leaves German politicians unwilling to approve essential emergency lending to Spain and other troubled nations unless the borrowers are punished first.

Despite the insertion of the word “wrongly”, Krugman has done a good job of stating the argument coming from Europe’s Right.  One other fault to find, it’s not punishment that’s sought; it’s bearing the consequences of one’s own decisions.  If you choose to live beyond your means don’t ask someone else to pay for it.

In Krugman’s view,

More austerity serves no useful purpose; the truly irrational players here are the allegedly serious politicians and officials demanding ever more pain.

Consider Spain’s woes. What is the real economic problem? Basically, Spain is suffering the hangover from a huge housing bubble, which caused both an economic boom and a period of inflation that left Spanish industry uncompetitive with the rest of Europe.

Spending was not the problem and austerity is not the solution.  Greece and Spain are victims of a housing boom and collapse that occurred in the private sector.  The fault is with other nations in the Eurozone that are failing in their moral obligation to redistribute some of their relative wealth to where it is needed.  Inferred in that view is the notion that the greed of capitalism was the source of the problem and socialism is the solution.  Get the cause wrong and so it will be with the solution.


Today’s column begins “There has been plenty to criticize about President Obama’s handling of the economy.”  And then he goes on to criticize Congress for “this week’s refusal to implement debt relief by the acting director of the Federal Housing Finance Agency…”  For a minute I was concerned that Krugman had adopted views dangerous to his continued employment by the New York Times.

Further reading relieved my fears.  The debt relief he is calling for would increase the federal debt.  (I should have known better than to think otherwise.)  The debt relief he espouses is government assistance for people who bought houses with mortgages they could not afford.

The columnist closes with “As I said, Mr. Obama has made plenty of mistakes.”  “If our economy is still deeply depressed, much – and I would say most – of the blame rests not with Mr. Obama but with the very people seeking to use that depressed economy for political advantage.”

There you have it, straight from the pen of a Nobel Prize Winning economist.  The President has made plenty of mistakes but when it comes to Barack Obama even his own mistakes are not his fault.


Let the New York Times increase your knowledge, at least on these 3 things.  Ignore my comments.  I never even went to college.

1. Republicans must be as pleased as Punch with Obama’s economic program.  The President is following economic policies Republicans consider ideal and have always dreamed they could put in place.

What should be done about the economy? Republicans claim to have the answer: slash spending and cut taxes. What they hope voters won’t notice is that that’s precisely the policy we’ve been following the past couple of years. Never mind the Democrat in the White House; for all practical purposes, this is already the economic policy of Republican dreams. ~ Paul Krugman

And all the time I thought the Republicans were saying cut the strangling over-regulation, stop stifling oil and coal production, stop passing vague laws for your czars to enforce as they see fit, stop threatening to increase the tax burden when things are already slow and stop attacking success.  In other words, just get out of the way.

2. Obama is slashing spending at a rate not seen since the end of the Korean War.

Look first at total government spending — federal, state and local. Adjusted for population growth and inflation, such spending has recently been falling at a rate not seen since the demobilization that followed the Korean War. ~ Paul Krugman

Mr. Krugman provides this link, Mr. Obama a big spender to a couple of charts that he portends prove his point.  The charts do show a sharp decline in the last 12 months, but the charts are not a picture of spending at all.  They are a convoluted measure of growth rates.  To illustrate – If you spend 100% more this year than last, and then 50% more next year than this, and 30% more on top of that in the third year, then the lines on Krugman’s charts would show a dramatic decline while you were actually spending more and more each year.

3. With Barack Obama as President, U.S. borrowing costs are lower than they ever were before in the history of the country.

Well, U.S. borrowing costs have just hit a record low. ~ Paul Krugman

Wags have often said “You can’t make this stuff up”.  Paul Krugman can.  Perhaps that’s why he won a Nobel Prize.


Conservatives complain about the main stream media, and rightly so.  But there is another main stream and it’s a good one.  It’s main stream America.  Stray too far from it and you will find yourself in a vulnerable spot.  The left has strayed too far from it and main stream America is finally taking notice.

A recent survey found 60% of Americans now declare themselves to be conservatives.  That’s a substantial increase from prior estimates.  It would be reasonable to presume that the shift is largely due to the left’s having moved too far from the middle for the comfort of independents.  How many moderates are happy supporters of the Occupy Wall Street campers, for instance?

The 2010 election results, the popularity of libertarian Ron Paul and the even stranger popularity of Donald Trump, momentary though it was, indicate the people have had enough.  They have listened to enough platitudes and compromising language; strong talk is what they want to hear now.

FOX News has more viewers than all the other cable networks combined.  The blogosphere has evolved from a pajama game to become a genuine threat to the New York Times.  And let’s not forget the Tea Party, a true grass roots phenomenon that rose from the right.  The Tea Party is healthy and strong four years after its birth precisely because the Tea Party is main stream America.  The Occupy movement failed badly after only a few months because it is not.  Just a few weeks ago, the Supreme Court threw out voting district maps drawn to favor the Democratic Party by a liberal judge.  The decision was unanimous.

The Right is exerting itself in many ways.  Nevertheless, the Left still grows stronger.  Obama announces a cut in the size of the armed forces, military men and women who pledge their allegiance to the Constitution.  And then the President promises to create a domestic police force larger and more powerful than the U.S. Army.  Presumably such a force would be beholden to the President, not to the Constitution.

Recently a Bill was introduced in Congress that would lay the foundation for cybercensorship.  Both sides initially supported it because the advantages were obvious and the disadvantages of no concern as long as you could trust government.  This one really was a step too far.  No one trusts government; no one ever should.  That’s why we have three branches and the separation of powers.  Congress never passed the Bill, but Obama made it law anyhow.

Not long ago we only had to contend with lunacies like Paul Krugman’s idea that of getting out of debt by accelerate spending.  The Obama administration is much farther from mainstream America than that.  All that Krugman’s ideas would do is send us into bankruptcy and he would wonder why.  Obama would take away our liberty, our way of life and send us into bankruptcy.


We learn from Mr. Krugman that he, and only he has the answer.  There is the “Republican narrative and the German narrative. Neither story fits the facts.”

“The Republican story ….. is that Europe is in trouble because it has done too much to help the poor and unlucky,”  This is a classic mischaracterization of Republican and conservative positions.  Conservatives have just as much compassion for the truly poor and unlucky as anyone.  The objection is to the creation of dependency and an unsustainable welfare state that extends well beyond the poor and unlucky to include a majority of the populace.  The inimitable Denis Miller put it succinctly when he said “We just want some bona fides, that’s all”.

“[C]ountries that aren’t on the euro seem able to run large deficits and carry large debts countries that aren’t on the euro seem able to run large deficits and carry large debts without facing any crises. Britain and the United States can borrow long-term at interest rates of around 2 percent; Japan, which is far more deeply in debt than any country in Europe, Greece included, pays only 1 percent… Britain and the United States can borrow long-term at interest rates of around 2 percent; Japan, which is far more deeply in debt than any country in Europe, Greece included, pays only 1 percent.”

What’s that Paul,“without facing any crises”  There’s the rub.  What must it take to get Mr. K to see a pending crisis?  George Osborne holds the position of Chancellor of the UK, a position similar to that of our Treasurer.

The Government ‘has run out of money’ and cannot afford debt-fuelled tax cuts or extra spending, George Osborne has admitted. In a stark warning ahead of next month’s Budget, the Chancellor said there was little the Coalition could do to stimulate the economy. Mr. Osborne made it clear that due to the parlous state of the public finances the best hope for economic growth was to encourage businesses to flourish and hire more workers. “The British Government has run out of money because all the money was spent in the good years,” the Chancellor said.

As far as the U.S. is concerned we already know Krugman’s position is to keep increasing the level of spending until it gets us out of debt.  It’s my blog but I am a generous chap so I’ll give the famed economist the final word… which is –

“The next time you hear people invoking the European example …. here’s what you need to know: they have no idea what they’re talking about.”


The world blew up this morning at about 8 o’clock.  There is nothing left. According to the New York Times, women, children and minorities suffered the most.  Vladimir Putin vowed he would restore the Soviet Union, even though it is now scattered in fragments somewhere in space.  Chavez says America did it, of course.  Obama blamed it on Bush.

“The United States are gone, all 57 of them”, noted  President Obama, then added “Well, at least it’s a complete transformation.  My only wish is that Martha’s Vineyard could have been spared”.  The insurance industry is in a panic as you might expect; they had exclusion clauses for losses due to war but not for this.

Al Gore termed it an environmental disaster.  He said it never would have happened under his administration.  He held his home state of Tennessee responsible.  “My own friends, the people who knew me best let me down.  If I had carried Tennessee the Supreme Court would not have been able to revoke my election.”  The Sierra Club expressed concern that the fracturing of earth into a collection of asteroids presents a threat to already endangered species on the other planets.  “If one of the big chunks, like Africa for instance, hits one of the smaller planets the impact will be devastating”, a representative explained.

Harold Camping called in long distance and said excitedly, “I called it!  I was just a little bit off on the date”.  Paul Krugman insists it could have been prevented if the government had only raised taxes and spent more money.  But when asked how in the world (excuse the passé expression) that would help, all he returned was a silent grin.  On the political front, the 99% are enraged.  The group is protesting that their rights have been denied because they no longer have any place to demonstrate.

The good news is Palin channeled Ronald Reagan and reports that he smiled and said “Take heart.  I have unshakeable faith in the resourcefulness of the American people.  A great hill will be rebuilt and the United States will shine brightly from the top of it once again”.


Depression and Democracy is the title of Krugman’s column in the New York Times today.  I know little about the Hungarian political party known as Fidesz, but beyond that, what Krugman wrote was dead right as far as it went.  Democracy is under threat.

…the gravity of European political developments isn’t widely understood.

First of all, the crisis of the euro is killing the European dream. The shared currency, which was supposed to bind nations together, has instead created an atmosphere of bitter acrimony.

…a Europe-wide recession now looks likely

Europeans [are] furious at what is perceived, fairly or unfairly (or actually a bit of both), as a heavy-handed exercise of German power.

Nobody familiar with Europe’s history can look at this resurgence of hostility without feeling a shiver.

The ecojournalist doesn’t hesitate to use the H word either.  Krugman never was known for his political correctness, if you will pardon the pun.

…ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.

Now we must delve into uncertain territory, what the author thinks but doesn’t say.  Just which movement on the current scene does he think a figure like H best represents?  Krugman limits his remarks in the article to political parties in Europe.  Speaking domestically, would it be the Occupy movement or the Tea Party?

Spokesfolks from the left see the problems; they just don’t see the causes so they come to the wrong conclusions about the solutions.  They are looking at the malaise through a window when they should be using a mirror.


Paul Krugman never ceases to amaze. He acknowledges the economic mess we are in but seems to be unaware of who has been in control of the White House and the Congress in recent years. Here’s what he had to say yesterday about present conditions.

A few readers have asked what I make of recent economic indicators. The answer is, nothing good.

By my count we’ve had four adverse surprises lately: GDP, private-sector payrolls, service-sector survey, and new claims for unemployment insurance. Since there seem to be a fair number of Charlie Browns out there — people who keep expecting a housing recovery, even though Lucy keeps pulling away the football — I guess we should add weak housing numbers to the mix.

It looks like a sputter, not a crash, but it’s definitely not good.

Dear reader, you and I know the Democrats have controlled both the House and the Senate since January 2007. Even Krugman must know who has been in control of the Executive Branch for the last two plus years. With Democrats remaining in control of the Senate and the presidential specter of veto, Republicans have been unable to put any real plans into law in the 4 short months since they won the House. So Paul, how is it you see that it’s the Republicans who got us where we are when the Democrats have been driving the bus?