Economy
See other Economy Articles
Title: Krugman's Rightful Victory Lap - Mone Too...
Source:
The NY Times
URL Source: http://www.nytimes.com/2011/06/03/opinion/03krugman.html?_r=1
Published: Jun 3, 2011
Author: Paul Krugman
Post Date: 2011-06-03 12:10:35 by war
Keywords: None
Views: 145640
Comments: 159
Earlier this week, the Federal Reserve Bank of New York published a blog post about the “mistake of 1937,” the premature fiscal and monetary pullback that aborted an ongoing economic recovery and prolonged the Great Depression. As Gauti Eggertsson, the post’s author (with whom I have done research) points out, economic conditions today — with output growing, some prices rising, but unemployment still very high — bear a strong resemblance to those in 1936-37. So are modern policy makers going to make the same mistake? Mr. Eggertsson says no, that economists now know better. But I disagree. In fact, in important ways we have already repeated the mistake of 1937. Call it the mistake of 2010: a “pivot” away from jobs to other concerns, whose wrongheadedness has been highlighted by recent economic data. To be sure, things could be worse — and there’s a strong chance that they will, indeed, get worse. Back when the original 2009 Obama stimulus was enacted, some of us warned that it was both too small and too short-lived. In particular, the effects of the stimulus would start fading out in 2010 — and given the fact that financial crises are usually followed by prolonged slumps, it was unlikely that the economy would have a vigorous self-sustaining recovery under way by then. By the beginning of 2010, it was already obvious that these concerns had been justified. Yet somehow an overwhelming consensus emerged among policy makers and pundits that nothing more should be done to create jobs, that, on the contrary, there should be a turn toward fiscal austerity. This consensus was fed by scare stories about an imminent loss of market confidence in U.S. debt. Every uptick in interest rates was interpreted as a sign that the “bond vigilantes” were on the attack, and this interpretation was often reported as a fact, not as a dubious hypothesis. For example, in March 2010, The Wall Street Journal published an article titled “Debt Fears Send Rates Up,” reporting that long-term U.S. interest rates had risen and asserting — without offering any evidence — that this rise, to about 3.9 percent, reflected concerns about the budget deficit. In reality, it probably reflected several months of decent jobs numbers, which temporarily raised optimism about recovery. But never mind. Somehow it became conventional wisdom that the deficit, not unemployment, was Public Enemy No. 1 — a conventional wisdom both reflected in and reinforced by a dramatic shift in news coverage away from unemployment and toward deficit concerns. Job creation effectively dropped off the agenda. So, here we are, in the middle of 2011. How are things going? Well, the bond vigilantes continue to exist only in the deficit hawks’ imagination. Long-term interest rates have fluctuated with optimism or pessimism about the economy; a recent spate of bad news has sent them down to about 3 percent, not far from historic lows. And the news has, indeed, been bad. As the stimulus has faded out, so have hopes of strong economic recovery. Yes, there has been some job creation — but at a pace barely keeping up with population growth. The percentage of American adults with jobs, which plunged between 2007 and 2009, has barely budged since then. And the latest numbers suggest that even this modest, inadequate job growth is sputtering out. So, as I said, we have already repeated a version of the mistake of 1937, withdrawing fiscal support much too early and perpetuating high unemployment. Yet worse things may soon happen. On the fiscal side, Republicans are demanding immediate spending cuts as the price of raising the debt limit and avoiding a U.S. default. If this blackmail succeeds, it will put a further drag on an already weak economy. Meanwhile, a loud chorus is demanding that the Fed and its counterparts abroad raise interest rates to head off an alleged inflationary threat. As the New York Fed article points out, the rise in consumer price inflation over the past few months — which is already showing signs of tailing off — reflected temporary factors, and underlying inflation remains low. And smart economists like Mr. Eggerstsson understand this. But the European Central Bank is already raising rates, and the Fed is under pressure to do the same. Further attempts to help the economy expand seem out of the question. So the mistake of 2010 may yet be followed by an even bigger mistake. Even if that doesn’t happen, however, the fact is that the policy response to the crisis was and remains vastly inadequate. Those who refuse to learn from history are condemned to repeat it; we did, and we are. What we’re experiencing may not be a full replay of the Great Depression, but that’s little consolation for the millions of American families suffering from a slump that just goes on and on.
Post Comment Private Reply Ignore Thread
Top • Page Up • Full Thread • Page Down • Bottom/Latest
Comments (1-28) not displayed.
.
.
.
#29. To: lucysmom (#20)
You ignorant libTURD cow, there is no possible similarity between the two. Except in the fetid and fevered bird like "brain" pan of the typical libTURD mouth breather. Did you even finish third grade?
Spoiled, stupid and ignorant, brain dead phuckwads, libTURD fools, tools, and idiots, are the real sickness; the messiah "king" obammy and his regime are only the symptoms.
Regardless... Smoot Hawley shut most trade down in the early 1930s. Both imports and exports were about 5% of GDP. Even after Smoot-Hawley, the US had the lowest or near lowest tariffs in the world. As a monetarist, per se, and knowing that recessions and depressions are monetary in nature, I discount Smoot Hawley as having any substantial impact.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." Government spending and tax credits do not equate to communism. They don't equate to Socialism either. PING me in a few years when you've had a HS level course in "isms".
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." Money is not fleeing the US. IN fact, the US bends over backwards via the tax code to accommodate these inflows. So, if that was your point it was...pointless.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." That the stimulus would be a failure because of where it was targeted? (A way to keep his union pals working for awhile longer so he could reap the benefits of their campaign contributions for 2012)... So did he say that???? We didn't need the stimulus, plain, pure and simple.... It didn't accomplish anything other than to put us more in debt, and help bribe his "Gangsta" buddies for their support....
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Inflation is not an indicator or a characteristic of a recession. Want to try again? What does occur during a recession is that people LOSE their jobs. Companies have a productivity baseline that, minimally, would have to be that the result of every dollar invested in production should equal a dollar of output. labor, being a cost of production, is the "easiest" to adjust. What Keynes would tell you, and which he states in his general theory, is that WAGES and PRICES should be subject to legislative controls rather than controlled through monetary policy. Had you made that argument as being a flaw in his General Theory you'd have agreement with me. Keynes saw inflation as a temporary dislocation that could be easily manipulated. He was wrong, of course. And while you do cite history correctly - Nixonomics - you take away the wrong lesson. The reason why the Keynesian model does not work is because the fiscal policy of the US government has been anti-Keynesian for the last 30 years. IN 1985/86, Keynes would have been demanding of Reagan that he stop spending and pay down debt. He would have been doing the same in the middle part of the last decade. Keynes was not an advocate of spend, spend, spend.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." It targeted consumers and public works projects. We didn't need the stimulus, plain, pure and simple.... We were in the depths of a recession that was on its way to being a Depression. It did a great job of stopping that almost in its tracks. The problem is that it did little else. Tax cuts, btw, are both stimulative AND put us into debt. I've never seen you argue against one.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." Putting aide the aphoristic qualities of that statement, the goal of quantitative easing is not to devalue the currency but to fund an available capital pool. And if you want to see a currency devalue, watch what happens when the EU meltsdown.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." That the stimulus would be a failure because of where it was targeted? It targeted consumers and public works projects. Yea I remember all of those stupid road signs that said "This Road will be repaired using Stimulus money"..... Well the signs are now gone and the road is still the way it was before, no repairs, no repaving, no nothing.... "EXCEPT" the signs are gone, guess that's what the money was for to put up and take down signs..... phucking brilliant!!!!
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Ask the Japanese about stimulus plans, they did 8-10 of them and are still suffering to this day from that useless shit....
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
I've never seen you argue against one. You won't because the debt is temporary..... if in conjuction with that you get rid of a lot of government rules and regulations that inhibit economic growth... Which is pretty much all the bureacracy the Dumbassocrats have dreamt up over the years, because they think we are all just too stupid to run our own lives..... (And they can't even run their own....... LOL.....)
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
"EXCEPT" the signs are gone, guess that's what the money was for to put up and take down signs..... phucking brilliant!!!! Challenge.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." Are you Obamas lover? You sound like a bitch protecting her man.
Have you been asleep since KempRoth? You cannot cut taxes that fall predominantly into the hands of 2% of taxpayers and expect to see any kind of significant return in revenues. As for your other GOP talking point, the US is very pro-business. I challenge you here and now to cite "rules and regulations" that put a significant damper on economic growth. I issued that challenge to Erica last year, btw, and his response was to throw a snit fit and pout me on bozo - so he claimed. I've also challenged pegler when he's mouthed that talking point. I'm still waiting for his answer.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." You can enjoy bozo for a while again while you unstick your needle.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." I worked for a Japanese company for 9 years. You can't stimulate an economy without giving incentive to spend money. All of their "stimulus" was to give incentive for foreign investments [capital outflow] and exports.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." I think I'm going to see if you are telling the truth. If so you get a timeout.
A timeout for what? You seem to have a napoleon complex. Are you shorter than six feet tall?
Why would you give a timeout for telling the truth?
It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte
war received a 15 min timeout for bozoing the host.
See 48.
You're a petty little tyrant.
Which is an enabled function and does you no harm. You can always email someone, bonehead. "He's ignoring me." Shit Stone, you sound like the Tammy Faye Bakker of forum owners.
rotflmao.
Proxy IP's are amusing.....lmao
I worked for a Japanese company for 9 years. You can't stimulate an economy without giving incentive to spend money. All of their "stimulus" was to give incentive for foreign investments [capital outflow] and exports. But the point is their stimulus plans didn't work either!!!!! They are so far in debt it isn't funny and have publically said they were a waste of time.....
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Challenge. So you want me to go take pictures of where the signs "WERE" at one time and post them for you?????? LOL......
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Did you take away his milk and cookies too????
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
I'm pretty harsh. 15 min. But I let him keep the cookies.
That may be your point that supports your agenda however that doesn't make it "the" point.
It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte
We had one of those projects a few blocks from my house; the intersection was torn up, the work was done, and the street repaved. Now the signs are gone.
It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte
That may be your point that supports your agenda however that doesn't make it "the" point And the original point was..... "Back when the original 2009 Obama stimulus was enacted, some of us warned that it was both too small and too short-lived". In essence do the same thing the Japanese did and failed at......
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Well goody for you.....
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
You should have done him a favor and took them away, permanently... that way he wouldn't have to keep wearing spandex
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
The 2009 stim worked. No matter by what measure you care to apply it worked. Just because the US is experiencing what is actually near the long term trend growth as opposed to above trend growth it does not mean that the stim was a failure.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." The Japanese did - and have done - nothing to stimulate domestic consumption.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." What's so funny Boofer? That you're an idiot or that Stone is?
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." All projects in Ohio were completed or are near completion. Google it if you don;t believe me.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." So their population is growing but they're not buying anything made in their own country???? Sounds familiar doesn't it!!!!!
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
All projects in Ohio were completed or are near completion. Google it if you don;t believe me. So why don't you just send me the link.....
"I love the 45 caliber M1911, I respect the 9MM M9 Beretta but I only carry a CZ for my own personal protection". Quote courtesy of Lt Col John Dean Cooper, recognized as the Father of Modern Handgunning
Ask Boofer...I'm not your file clerk.
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." Japan raised the consumption tax, what effect do you think that would have on domestic buying?
It is our responsibility to protect that child once that child’s born too. When we start debating a budget, let’s make sure we don’t cut 100,000 vaccines. Let’s make sure we’ve got health insurance. We seem to worship what we cannot see, but as soon as that baby’s born, oh no, we don’t want to be intrusive. Texas is going to shrink government until it fits inside a women’s uterus. Senator Leticia Van de Putte
Comments (70 - 159) not displayed.
Top • Page Up • Full Thread • Page Down • Bottom/LatestThe US was to Europe in the late 1800s what China is to us today.
#30. To: jwpegler (#16)
International trade was tiny in the 19th century compared to today.
--GW Bush
#31. To: hondo68 (#19)
(Edited)
More Communism! was the battle cry of the USSR right up to the end.
--GW Bush
#32. To: jwpegler (#17)
(Edited)
Yep, money can very easily flee a country today when a government acts irresponsibly.
--GW Bush
#33. To: war (#13)
Of course, you can't cite a cogent reason WHY you don't believe him - even though what he predicted 2 years ago has come true.
#34. To: jwpegler (#18)
Wages are "sticky" downwards. In a recession, people won't voluntarily take wage cuts to clear the market price for labor so that businesses will start hiring again. So, people have to be fooled into taking a pay cut through inflation. Prices go up, wages stay the same -- a pay cut has occurred. The market price clears and businesses start hiring again.
--GW Bush
#35. To: CZ82 (#33)
That the stimulus would be a failure because of where it was targeted?
--GW Bush
#36. To: Capitalist Eric (#27)
Oh, BTW, you never addressed my point- NO country or empire has ever propelled itself to lasting prosperity, by devaluing its own currency. (What we now call "quantitative easing.")
--GW Bush
#37. To: war (#35)
#38. To: war (#35)
We were in the depths of a recession that was on its way to being a Depression. It did a great job of stopping that almost in its tracks. The problem is that it did little else.
#39. To: war (#35)
Tax cuts, btw, are both stimulative AND put us into debt.
#40. To: CZ82 (#37)
Yea I remember all of those stupid road signs that said "This Road will be repaired using Stimulus money"..... Well the signs are now gone and the road is still the way it was before, no repairs, no repaving, no nothing....
--GW Bush
#41. To: war (#35)
#42. To: CZ82 (#39)
You won't because the debt is temporary.....
--GW Bush
#43. To: A K A Stone (#41)
--GW Bush
#44. To: CZ82 (#38)
Ask the Japanese about stimulus plans
--GW Bush
#45. To: war (#43)
#46. To: A K A Stone (#45)
#47. To: A K A Stone (#45)
I think I'm going to see if you are telling the truth. If so you get a timeout.
#48. To: Fred Mertz (#46)
#49. To: lucysmom (#47)
#50. To: A K A Stone (#48)
#51. To: A K A Stone (#48)
"war received a 15 min timeout for bozoing the host."
#52. To: A K A Stone (#48)
#53. To: war (#44)
Ask the Japanese about stimulus plans
#54. To: war (#40)
"EXCEPT" the signs are gone, guess that's what the money was for to put up and take down signs..... phucking brilliant!!!!
#55. To: A K A Stone (#48)
war received a 15 min timeout for bozoing the host.
#56. To: CZ82 (#55)
#57. To: CZ82 (#53)
But the point is their stimulus plans didn't work either!!!!!
#58. To: CZ82 (#54)
So you want me to go take pictures of where the signs "WERE" at one time and post them for you?????? LOL......
#59. To: lucysmom (#57)
But the point is their stimulus plans didn't work either!!!!!
#60. To: lucysmom (#58)
We had one of those projects a few blocks from my house; the intersection was torn up, the work was done, and the street repaved. Now the signs are gone.
#61. To: A K A Stone (#56)
I'm pretty harsh. 15 min. But I let him keep the cookies.
#62. To: CZ82 (#53)
But the point is their stimulus plans didn't work either!!!!!
--GW Bush
#63. To: CZ82 (#59)
In essence do the same thing the Japanese did and failed at......
--GW Bush
#64. To: Badeye (#52)
--GW Bush
#65. To: CZ82 (#54)
So you want me to go take pictures of where the signs "WERE" at one time and post them for you?????? LOL......
--GW Bush
#66. To: war (#63)
The Japanese did - and have done - nothing to stimulate domestic consumption.
#67. To: war (#65)
So you want me to go take pictures of where the signs "WERE" at one time and post them for you?????? LOL......
#68. To: CZ82 (#67)
--GW Bush
#69. To: CZ82 (#66)
So their population is growing but they're not buying anything made in their own country????
.
.
.
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]