Tag Archives: Paul Krugman

Periodic Update from Krugman the Indispensable

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Paul Krugman was right about Bush’s tax cuts and the Iraq War. He was right about the 2009 stimulus. He’s been right about Europe’s austerity program. I’m sure he’s right about this too:

“The latest projections [from the Congressional Budget Office] show the combined cost of Social Security and Medicare rising by a bit more than 3 percent of G.D.P. between now and 2035, and that number could easily come down with more effort on the health care front. Now, 3 percent of G.D.P. is a big number, but it’s not an economy-crushing number. The United States could, for example, close that gap entirely through tax increases, with no reduction in benefits at all, and still have one of the lowest overall tax rates in the advanced world.

But haven’t all the great and the good been telling us that Social Security and Medicare as we know them are unsustainable, that they must be totally revamped — and made much less generous? Why yes, they have; they’ve also been telling us that we must slash spending right away or we’ll face a Greek-style fiscal crisis. They were wrong about that, and they’re wrong about the longer run, too.

The truth is that the long-term outlook for Social Security and Medicare, while not great, actually isn’t all that bad. It’s time to stop obsessing about how we’ll pay benefits to retirees in 2035 and focus instead on how we’re going to provide jobs to unemployed Americans in the here and now.”

http://www.nytimes.com/2013/06/03/opinion/krugman-the-geezers-are-all-right.html

The Cutting vs. Spending Argument Should Be Over

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In a recent blog post, the (indispensable) economist and columnist Paul Krugman has summarized his view of our economic predicament and what we should do to get out of it. He did this in response to a billionaire who went on TV and spoke like a simpleton. Krugman makes his case as clearly as possible, so it’s worth reading if you have any doubts at all about whether the government should be cutting or increasing spending in our present circumstances. 

http://krugman.blogs.nytimes.com/2013/04/27/the-ignoramus-strategy/

Henry Blodget, who isn’t an economist and was convicted of securities fraud when he was a research analyst at Merrill Lynch, argues that the argument about cutting vs. spending is over and Krugman won.

http://www.businessinsider.com/paul-krugman-is-right-2013-4

It’s clear that Krugman and his like-minded Keynesian colleagues have won the argument in the sense of having offered enough evidence to prove their thesis to reasonable people. Whether they’ve won the argument in the sense of getting politicians to change their policies isn’t clear yet. The most we can reasonably expect is that the tide has turned.

As we know, most people, especially politicians and pundits, hate to be proven wrong. Admitting that they were wrong to promote government austerity in response to the Great Recession would require a lot of character.

What I would love to see is President Obama, who is said to be a reasonable person, admit that his search for a “Grand Bargain” with the Republicans has been a terrible mistake. He should admit that we need to repeal the Sequester immediately (not just as it affects air travelers) and increase spending on infrastructure, education, research, grants to local government, etc. etc.

If it would help, Obama could have Krugman sit next to him and explain the situation in terms that even billionaires would understand! Not everyone would be convinced (there are plenty of simpletons and others with their own agendas), but it would be a step in the right direction.

Postscript 4/29/13 —

This is a sensible summary from Washington Post columnist E. J. Dionne (although it’s not really a “whodunit?” because we know who done it):

http://www.washingtonpost.com/opinions/ej-dionne-the-economic-whodunit/2013/04/28/6948f9a4-aea9-11e2-8bf6-e70cb6ae066e_story.html

It’s Nice When the World Makes Sense

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Even if the underlying facts aren’t so great at all.

Case 1: Paul Krugman ties together two recent stories: how the economic evidence for cutting government spending during a recession is non-existent, and how cutting spending on programs like Medicare and Social Security is the preferred strategy of the rich. It probably won’t make any difference that the scientific support for government austerity during an economic downturn has been demolished, since facts don’t necessarily trump ideology. For the most part, the political class is subservient to the upper class. Marx, who helped generate a vast number of ideologists himself, wasn’t wrong about everything.

http://www.nytimes.com/2013/04/26/opinion/krugman-the-one-percents-solution.html?ref=paulkrugman

Krugman cites the study I wrote about under the title “What the 1% Want from Washington”:

https://whereofonecanspeak.com/2013/04/07/what-the-1-want-from-washington/

Case 2:  According to the New York Times, the Boston police commissioner admitted this week that Dzhokhar Tsarnaev (joh-KHAHR’ tsahr-NEYE’-ehv) and the boat in which he hid were both in the 20-block search perimeter all along. It’s not clear why Tsarnaev wasn’t found during the manhunt, but it wasn’t because the boat was 1 block outside the search perimeter, as the Watertown police chief claimed. (See the post below, which includes a transcript of the police discussing where to search.)

In this case, it didn’t make sense that a small army of police failed to search an area 2 or 3 blocks from where the guy dumped his getaway car. What didn’t make any sense now makes some sense. People make mistakes and then make excuses. No shock there. 

A Scandal of Enormous Proportions — And It’s Funny, Too

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Along with Paul Krugman, Stephen Colbert and his writers are among the best analysts of current affairs working today. Here, the brilliant Mr. Colbert discusses a recent discovery: the principal academic evidence for cutting government spending during a serious economic downturn is baloney, and not the nourishing kind. The Harvard professors who issued the study didn’t share their data with other economists, ignored data that didn’t fit their hypothesis and made a crucial Excel coding error.

The mind reels. And workers and families worldwide suffer.

(For some reason, I couldn’t get the video to embed, so you’ll probably have to put up with a brief commercial.)

http://www.colbertnation.com/the-colbert-report-videos/425748/april-23-2013/austerity-s-spreadsheet-error?xrs=share_copy

Paul Krugman discusses the same issue with fewer laughs:

http://www.nytimes.com/2013/04/19/opinion/krugman-the-excel-depression.html?_r=0

The Forgotten Millions

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I’ve been intending to write something here about how America has become a low-wage nation compared to other developed countries. In the meantime, here’s a link to the latest column from the fairly indispensable Paul Krugman, in which he points out that unemployment is still a terrible problem and briefly explains what will happen if we start down the “fiscal slope” (it’s not really a cliff, since its effects will be gradual):

“The unemployment crisis goes on and on, even though we have both the knowledge and the means to solve it. It’s a vast tragedy — and it’s also an outrage.”

Throw in the issues of underemployment and low wages and the problem is even worse.

http://www.nytimes.com/2012/12/07/opinion/krugman-the-forgotten-millions.html?hp