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Posts Tagged ‘Paul Krugman’

Economist’s View – “Springtime for Hypocrites”

December 18, 2010 Leave a comment

From the Economist’s View:

“Springtime for Hypocrites”

Paul Krugman:

Just two weeks ago, the deficit was the great evil, and all the VSPs insisted that we needed fiscal austerity now now now. Then, magically, a big tax cut — increasing federal debt by more than the original Obama stimulus, and substantially raising the probability of making unaffordable tax cuts permanent — was the greatest thing since sliced bread.

Why, it’s almost as if all the concern about the deficit was a front for opposing anything progressives might want, to be dropped as soon as debt was being run up on behalf of conservative goals. But that can’t be true, can it?

Many Republicans are still playing starve the beast. The next step for the GOP is to use the deficit problems that are created by the tax cut legislation as evidence that government spending is out of control. The biggest target for cuts will be social insurance programs. I wonder how many people realize that the revenue loss from the tax cuts will be more than three times the shortfall in Social Security (the tax cuts to those making over $250,000 alone would eliminate the Social Security shortfall)?

Economist’s View – A Few Reactions to the Tax Cut Agreement

December 7, 2010 Leave a comment

From the Economist’s View:

A Few Reactions to the Tax Cut Agreement

Update — More Reactions:

Paul Krugman:

So the tax deal is out. Obama extracted some concessions, with the big surprise being a payroll tax cut. How much better do these concessions make the thing? …[T]his raises GDP by 0.7 percent relative to otherwise; rule of thumb is that one point on GDP is half a point on unemployment, so add 0.35 points to the CBO numbers.

That’s a two-year average; what about timing? Both the payroll tax break and the unemployment extension are for the first year only. So, a bigger boost next year, fading out in 2012. Since all the evidence says that elections depend on the rate of change of unemployment, not its level, this is actually bad news for Obama: he’s setting himself up for an economic stall in the months leading into the 2012 election.

Oh, and he’s overpromising again:

“It’s not perfect, but this compromise is an essential step on the road to recovery,” Mr. Obama said. “It will stop middle-class taxes from going up. It will spur our private sector to create millions of new jobs, and add momentum that our economy badly needs.”

Millions of new jobs? Millions? Not by my arithmetic.

So, was this worth it? I’d still say no, although it’s better than what I expected over the weekend. It still greatly increases the chances of the Bush tax cuts being made permanent — especially because the front-loading of the stimulative stuff actually worsens Obama’s 2012 electoral prospects.

Overall, enough sweetener has been added to diminish, but not eliminate, the bitterness of the disappointment.

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AMERICAblog – Krugman: The ‘soft corruption’ of the economics profession

December 7, 2010 Leave a comment

From AMERICAblog:

Krugman: The ‘soft corruption’ of the economics profession

by Gaius Publius on 12/07/2010 12:29:00 AM

Seems I’ve been reading some Krugman lately, but it’s been well worth it. In this blog post he comments on the film Inside Job (which Chris in Paris discussed here).

I won’t highlight everything in the post (I’m saving the “helicopter” comment for you to enjoy alone). But this jumped out — the Professor finally sees it:

There aren’t, I think, all that many cases when economists are literally paid to offer a specific opinion — although Greenspan’s defense of Keating qualifies. But the movie didn’t say there are. What it suggested, instead, was a kind of soft corruption: you get paid a lot of money by the financial industry, you get put on boards, but only if you don’t rock the boat too much. Besides, you hang out with these people, and get assimilated by the financial Borg. I think all of that is very true.

You don’t get your kids into Exeter by disagreeing with the billionaire donors of the Brookings Institute.

Now maybe he can stop assigning the noble badge of Honest Differences to the PhD-ed retainers who refuse to make sense. I know, baby steps.

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Economist’s View – Paul Krugman: Let’s Not Make a Deal

December 6, 2010 Leave a comment

From the Economist’s View:

Paul Krugman: Let’s Not Make a Deal

Democrats should not give in to demands to extend the Bush tax cuts for all taxpayers:

Let’s Not Make a Deal. by Paul Krugman, Commentary, NY Times: Back in 2001, former President George W. Bush pulled a fast one. He wanted to enact an irresponsible tax cut, largely for the benefit of the wealthiest Americans. But there were Senate rules in place designed to prevent that kind of irresponsibility. So Mr. Bush evaded the rules by making the tax cut temporary, with the whole thing scheduled to expire on the last day of 2010.

The plan, of course, was to come back later and make the thing permanent, never mind the impact on the deficit. But that never happened. And so here we are, with 2010 almost over and nothing resolved.

Democrats have tried to push a compromise: let tax cuts for the wealthy expire, but extend tax cuts for the middle class. Republicans, however, are having none of it. … It’s all or nothing, they say: all the Bush tax cuts must be extended. What should Democrats do?

The answer is that they should just say no…, saying no, and letting the Bush tax cuts expire on schedule, is the lesser of two evils.

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Economist’s View – Off Message Watch: “I Don’t Know That for Sure”

December 4, 2010 Leave a comment

From the Economist’s View:

Off Message Watch: “I Don’t Know That for Sure”

The administration just cannot admit that it made a mistake in proposing a stimulus package that was too small. This is from a Q&A with Austan Goolsbee::

Q. Would our economy be in better shape right now if the initial stimulus when the administration took office had been bigger?
A. I don’t know the answer to that for sure. There’s a bit of a crystal ball in that. It obviously depends on what the things were.

The right answer here is “of course if would have been better,” and to then talk about how Republicans blocked any hope of additional stimulus once it was clear the economy was doing much worse than anticipated. But because the administration refuses to admit its mistake and concede that the stimulus was too small, it cannot bring itself to argue that the economy needs more help from fiscal authorities. There were nods in this direction now and again, but the administration never really tried to make this argument, a strong push for a job creation program for example, and it has thus given up the chance to make clear which party is standing in the way of providing more help for distressed households.

Update: I see that Paul Krugman, referring to this statement by Jared Bernstein, is thinking along the same lines:

Getting Obama’s Drift: I felt sorry for Jared Bernstein, who surely knows better, having to convey the administration’s attempt to downplay the terrible jobs numbers.

I know what’s going on: the administration decided, more or less a year ago, that rather than admit that its stimulus package was inadequate and call for more, it would put on a happy face and hope for better news. But here’s the thing: by now we know that this strategy has been a political disaster. So you would think that the administration would change its line.

But to do that, someone at the top has to make the decision to change direction. And clearly, nobody has. I don’t think there was a deliberate decision to persist in an obviously losing strategy; I just think top management has gone missing. And so the administration drifts …

Firedoglake – Catfood Delirium: US Pretends It’s Not Repeating Europe’s Mistakes

December 1, 2010 1 comment

From Firedoglake:

Catfood Delirium: US Pretends It’s Not Repeating Europe’s Mistakes

By: Scarecrow Wednesday December 1, 2010 9:22 am

My dead-tree New York Times aptly depicts the mass economic insanity now gripping the US and Europe. There are several related articles, none referring to the others, but they’re all part of the same story: Governments are on their knees from bailing out insolvent banks and rescuing their economies after the financial collapse, but further crippling themselves by pretending that punishing citizens via austerity will keep their economies from tanking further.

On the Times front page, top-right, we read about America’s hysteria over federal deficits. The article frets over whether Obama’s failed Deficit (aka “let them eat Catfood”) Commission can get even a majority, let alone the required 14 of 18 votes, to endorse measures already widely panned, partly because Simpson-Bowles merely wave their hands on health care costs that are the principal driver of structural deficit. Even worse, in the aggregate their proposals shift more wealth from the middle class and elderly to the richest 10 percent of Americans, while restricting the government’s ability to right the inequality. It doesn’t occur to the Times to hope enough members will have the courage and wisdom to just say NO!

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Economist’s View – Paul Krugman: Eating the Irish

November 26, 2010 Leave a comment

From the Economist’s View:

Paul Krugman: Eating the Irish

Ireland’s austerity measures — which amount to punishing the public for bankers’ mistakes — aren’t working:

Eating the Irish, by Paul Krugman, Commentary, NY Times: What we need now is another Jonathan Swift. Most people know Swift as the author of “Gulliver’s Travels.” But recent events have me thinking of his 1729 essay “A Modest Proposal,” in which he observed the dire poverty of the Irish, and offered a solution: sell the children as food. “I grant this food will be somewhat dear,” he admitted, but this would make it “very proper for landlords, who, as they have already devoured most of the parents, seem to have the best title to the children.”

O.K., these days it’s not the landlords, it’s the bankers — and they’re just impoverishing the populace, not eating it. But only a satirist — and one with a very savage pen — could do justice to what’s happening to Ireland now.

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