No one pays attention to Krugman!

FRIDAY, FEBRUARY 8, 2013

The way our culture works: Paul Krugman writes the same column today for perhaps the three hundredth time.

It happens to be a very good column. It’s also a mark of the times.

Krugman starts by noting that a recent statement by John Boehner was pretty much absolute nonsense (see below). From there, he turns to his standard column. He’s written it three hundred times.

First, he states his basic point. Then he makes a phantasmagoric statement.

He’s written this column three hundred times. No one is paying attention:
KRUGMAN (2/8/13): But that’s a secondary issue. The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road.

Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.

This really isn’t a debatable proposition at this point. The contractionary effects of fiscal austerity have been demonstrated by study after study and overwhelmingly confirmed by recent experience—for example, by the severe and continuing slump in Ireland, which was for a while touted as a shining example of responsible policy, or by the way the Cameron government’s turn to austerity derailed recovery in Britain.
First, Krugman states “the key point.” After that, he says his point “really isn’t debatable.”

In one way, he’s right. In another way, he’s missing the shape of the culture.

Krugman comes close to being right. Without any question, his key point isn’t being debated. That’s because we live in an age when elites feel no obligation to react to argument, facts or analysis.

You can stick your “debate” right up your ascot! Our society’s Very Serious People operate outside the realm of proposition and debate.

Our elites tell us the stories they like. They then ignore everything else.

The whole world saw this culture play out when Krugman did Morning Joe two weeks back. Joe Scarborough let Krugman say his piece. Eight hours later, he ran to Politico and pretended that Krugman had made the world’s craziest statements. See THE DAILY HOWLER, 1/29/13.

Krugman’s statements weren’t crazy at all. But that had nothing to do with the way our culture works

Krugman’s column is very important. Or would be, in some other world.

Concerning what Boehner said: At the start of the column, Krugman notes the recent Boehner howler.

This is what John Boehner said—and why it was laughably wrong:
KRUGMAN: John Boehner, the speaker of the House, claims to be exasperated. “At some point, Washington has to deal with its spending problem,” he said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”

Actually, Mr. Boehner needs to refresh his memory. During the first decade of his time in Congress, the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in. It was only when George W. Bush arrived and squandered the Clinton surplus on tax cuts and unfunded wars that the budget outlook began deteriorating again.
Please. If you can think back fifteen years, you know that Boehner’s complaint is bogus. But so what? Ludicrous statements are the norm in our modern culture. They’re accepted by one and all.

Krugman points to the lunacy in what Boehner has said—but that’s where the discussion will end. Within our modern Potemkin news culture, no one cares if political leaders make claims which are clownishly wrong.

We’ve worked with Charles Blow’s column all week, and with the new book it draws on. His column made claims which are laughably bogus. But no one cares. It’s the norm.

Despite millennia of high-minded claims, this is the way our culture works. High-ranking people say crazy shit. Everyone acts like it’s normal.

24 comments:

  1. Sorry, Bob. It's just Krugman's opinion that the government isn't spending too much and Boehner's opinion that the government is and has been spending too much. It's just Krugman's opinion that lower government spending means more jobs. Boehner and the economists who agree with him hold the opposite opinion. One could advance evidence for either side of this debate. IMHO neither side could prove absolutely that it's correct.

    Krugman can say it "really isn’t a debatable proposition." And, you can call Boehner's opinion "bogus", "lunacy", and "crazy shit." These strong words don't take the place of an actual proof that Krugman's opinion is more correct than Boehner's.

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    1. In fact, one side's evidence is overwhelming, the other side's "evidence" all but non-existent. But, much like the climate change "debate," hacks and trolls pretend that there are two equivalent sides.

      You know one side has lost the actual debate when it runs to the the "it's all just opinion" fallback. People with credible arguments to make, make them.

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    2. "It's just Krugman's opinion that lower government spending means more jobs."

      Well, Krugman's -- and John McCain's (if it's defense spending!) -- and anyone who's looked at, you know, data and such.

      DavidinHisOwnAsshole can show up here and say "what Krugman says is just his own *opinion*" -- Because there's no policing this board for rationality. And DavidinHisOwnAsshole pays no penalty for his perpetually corrected bullshit. He just runs away to post more crap another day.

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    3. D & C, I think you made a typo. Krugman's position is that lower government spending means fewer, not more, jobs, and apparently Boehner, and the (minority of I expect) economists who share his view, think somehow cutting federal spending will create more jobs. Frankly, I fail to understand how cutting government spending is not going to increase unemployment. And by the way, what specific cuts is Boehner proposing? I may be missing something, but as far as I can tell, he won't say.

      AC in MA

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  2. Quaker in a BasementFebruary 8, 2013 at 6:02 PM

    It's just Krugman's opinion that lower government spending means more jobs.

    Exactly backwards. It's Krugman's position that less spending mean fewer jobs.

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  3. Like Michael Moore said, "we live in fictitious times".

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  4. Quaker, thanks for the correction of my careless error.

    In fact, one side's evidence is overwhelming, the other side's "evidence" all but non-existent.

    Really? I think there's considerable evidence that lower government spending leads to more jobs.

    -- The fact that states with low-spending governments, like Texas, have better economies than high-spending ones, like California.

    -- In divided countries like Germany and Korea, the side with the smaller govenment did much, much better than the side with the bigger government.

    -- Stimulus programs have not led to prosperity in this country, neither FDR's stimulus, Bush's stimulus, nor Obamas stimulus.

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    1. The Federal Government of the United States of America is a bigger purchaser of primarily American goods and services than the 20 largest U.S. corporations COMBINED. Are you suggesting it's an open question whether it would be desirable and would help the economy in a time of high unemployment if those 20 largest corporations, together constituting about 20% of the entire GDP, would cut back on their spending? When you have to resort to backing your argument by comparing South Korea to North Korea and West Germany to East Germany, you've lost the argument big time. The North European governments have bigger governments than we have -- Germany, Netherlands and the Scandinavian countries -- and they have been doing better on the employment front for some time, and that's despite the fact that wages and benefits in those countries are now considerably higher in those countries than in the U.S. So have Canada and Australia.

      State governments do not have the predominant macroeconomic impact on their economies.

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    2. You have a reasonable argument as far as it goes, urban legend. It would be convincing if the government had a huge store of unspent money, which they had collected. However, in order to maintain its high spending, the federal government has three choices, all with adverse economic impact.

      1. Take lots of money out of the private sector to maintain their spending. Then money taken in taxes offsets the impact of greater government spending.

      2. Borrow lots of money. Then interest costs go up, which offsets some of the government spending. Interest on the national debt currently runs over $400 billion per year. That's government spending which is not going back into the economy. Also, the private sector knows that they will be on the hook for the loans. They adjust their behavior in that light.

      3. Print money. This eventually causes inflation and loss of value of the dollar versus foreign currencies.

      The bottom line is that there are both negative and positive economic impacts from high government spending. It's not obvious what the net impact is.

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    3. Quaker in a BasementFebruary 9, 2013 at 2:22 PM

      -- The fact that states with low-spending governments, like Texas, have better economies than high-spending ones, like California.

      States are not countries. They mostly steal jobs from each other.

      -- In divided countries like Germany and Korea, the side with the smaller govenment did much, much better than the side with the bigger government.

      Right. The big difference between East and West Germany was government spending.

      -- Stimulus programs have not led to prosperity in this country, neither FDR's stimulus, Bush's stimulus, nor Obamas stimulus.

      Stimulus programs aren't designed to lead to prosperity. They're designed to "prime the pump" and get moribund economies moving.

      Now cue the clown music and hop back in your tiny little car.

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    4. Quaker in a BasementFebruary 9, 2013 at 2:36 PM

      David, states neither borrow nor print money. You have undermined your own argument.

      At present, federal government spending has driven interest rates all the way up to...barely above zero. Similarly, inflation is very nearly nonexistent.

      Under these circumstances, what do you suppose would be the effect of cuts in government spending?

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    5. D and C, aside from what is pointed out above, your argument comparing Texas with California is truly bogus. Texas has oil, that's the principal reason its economy is better than some other states. My state, Massachusetts, has significantly lower unemployment than Texas, and other red states, like Mississippi or Alabama have far worse economies than states like Massachusetts, with its higher taxes.

      AC/MA

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  5. No point in trying to rebut David in Cal.'s assertions (which are not "evidence" of anything, just assertions).... States are not a federal government (e.g., can't make their own money) -- apples and oranges problem. "Better economy" isn't a useful describer (definition problem: what is "better"? whose economy, anyway?). Cherry-picking (we could cherry-pick in the other direction: MA has a relatively high-spending government and is doing well economically, relative to other states; NJ has been drastically cutting its spending, and its economy has been getting worse, even pre-Sandy; how about Cameron's Great Britain?). Divided government: interesting examples, Germany and Korea! Totally irrelevant. (Actually, Germany may run counter to his point, since spending in the east has helped that sector's economy at least somewhat.) Stimulus programs haven't contributed to (I don't think anyone claims they ever simply "led to") prosperity, or rather, overall economic improvements: the evidence that they certainly have contributed, under the right economic conditions (like the FDR and Obama stimulus programs during periods of radical contraction of private spending) is overwhelming and has been presented so many times that David in Cal's ignorance must be willful. Exactly the source of Krugman's frustration.

    To piggy-back on the MIchael Moore quotation above: remember Al Franken's book, Rush Limbaugh is a Big Fat Liar?

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  6. If it is assumed that all people are liars, then the distinction must be found in the purpose for their mendacity. The purpose is usually multifaceted, not myopic as some suggest. If the purpose is to confuse and confound citizens to consolidate power, steal wealth and disregard their well-being then many professionals participate in this gambit. Without humility to temper ambition and there are laws. Without the equal application of those laws the sanctity of the law is manipulated with cynicism and respect for the law is diminished. The concept that human nature acts first, last and always in its economic interests is an axiom tainted with cynicism. Therefore, people cheat to compete and they compete not as a team, but as individuals. The absence of a common purpose weakens our nation. It really is one political party that is weakening our nation, but none dare speak its name.

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  7. Quaker in a basement asks: what do you suppose would be the effect of cuts in government spending?

    My guess is that the short-term effect would be to
    reduce the GNP to some unknown degree. But, should the government be barred from taking any action that has a short-term negative impact on the GNP? Of course, not. In fact, I believe the recent tax increase will reduce the GNP to some degree.

    We cannot just continue to run trillion dollar deficits covered by a trillion dollars a year of newly created money. In the long run, this policy will lead to disaster. If we don't make some big reforms, we may look back to today's economy as being the good times.

    So, we need to cut spending a lot and probably raise taxes even more. Whenever we do this, the economy will suffer, at least in the short run.

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    1. The man who started out delivering a stern lecture about "opinions", comes back with a bunch of "I guesses," and then a statement of his opinion passed off as a fact. I wonder how that happened. Perhaps a brilliant attempt at using irony to make a point.

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    2. Right you are, Anonymous. I gave my opinion (in response to Qiab, who asked for my opinion.) Krugman has given his opinion. Unlike Krugman and Bob Somerby, I don't claim that my opinion isn't debatable or that contrary opinions are "bogus", "lunacy", or "crazy shit."

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    3. .....and after all ..gravity is just a theory Stop feeding the troll

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    4. "Unlike Krugman and Bob Somerby, I don't claim that my opinion isn't debatable"

      Actually, you already conceded that Krugman's point *wasn't* debatable: you agreed with it.

      Krugman: "Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink."

      DavidinHisOwnAsshole: "My guess is that the short-term effect would be to reduce the GNP."

      Don't pretend Krugman doesn't engage his critics with data, he does. On that point, it's you who fails, miserably.

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    5. As you point out, AnonymousFebruary 10, 2013 at 9:13 AM, my opinion is the same as Krugman's regarding the short-term impact on jobs. But, Krugman also wrote that cutting spending "would be irresponsible and destructive." I disagree with this point.

      Anyhow, the point isn't my opinion vs. Krugmans's. The point is, Krugman is merely expressing an opinion, which shouldn't be taken as fact.

      Krugman is a brilliant economist, but he's a partisan. He could just as well have written, "Start with a basic point: Increasing taxes destroys jobs and causes the economy to shrink." The same Keyensian theory supports both the original comment abd the modified version.

      Krugman supports big government, so he only addressed the Keyensian interpretation on the spending side. Krugman says we shouldn't reduce reduce government spending because it means fewer jobs. Yet, it's good to increase taxes, even though that step also means fewer jobs.

      To be clear, IMHO we need both reduced spending and higher taxes now, even though that will mean fewer jobs now, because there will be very bad long-term consequences if we continue to run a huge deficit and and to create new money at a historic pace.

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    6. In what way is Krugman a "partisan"? As far as I can tell, the Obama administration has as little use for Krugman and his recommendations as Paul Ryan or any other demented member of the republican party.

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    7. Quaker in a BasementFebruary 11, 2013 at 12:19 PM

      My guess is that the short-term effect would be to reduce the GNP to some unknown degree.

      Unknown? It will reduce GNP by roughly the amount of the spending reduction. Government spending is a component of GNP; a reduction in government spending will directly reduce GNP. There's no need to guess.

      And when GNP declines? What do you suppose happens to unemployment? Hm?

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