Krugman: "Revolting" Europeans

Paul Krugman's Op-Ed piece in the New York Times today looks at the failure of Europe's leaders to address their unemployment and other economic woes, opting instead to rely on austerity measures to restore "confidence" in the markets.

"What’s wrong with the prescription of spending cuts as the remedy for Europe’s ills? One answer is that the confidence fairy doesn’t exist — that is, claims that slashing government spending would somehow encourage consumers and businesses to spend more have been overwhelmingly refuted by the experience of the past two years. So spending cuts in a depressed economy just make the depression deeper."

Krugman has been harping on Europe's economic problems for some time now, and it seems the voters in many European countries are taking notice and "revolting." You can read the entire article here.

Eurozone Unemployment Hits Record High

Unemployment in the Eurozone has risen to a record high of 10.9%, continuing a worsening trend since last year. In the 17 countries comprising the Eurozone, the countries whose currency is based on the euro, there was only a rise in unemployment of 169,000 from February’s mark, but enough to raise unemployment up from 10.8%. By contrast, the U.S. has seen unemployment fall from 9.1% last August to 8.2% in March. Europe’s growing crisis has lead to renewed calls to shift their economic focus from austerity to spending, with the president of the European Central Bank calling for a growth pact.

Led by Germany, Europe’s #1 economy, and Britain, Europe has tested austerity economics – reduced spending and raising taxes – championed by many conservatives and Right-wing analysts who say that tackling debt is the best way to revive a faltering economy, claiming reduced debt will restore confidence in the markets for people to start investing again.

But progressive economists, such as Dean Baker and Paul Krugman, have been arguing for years a Keynesian approach to restoring growth after the recession, that deficit spending is not only the best way to resuscitate the economy, but austerity actually exacerbates a recession, prolonging the downturn and increasing unemployment.

And now, it seems, their projections are in fact coming to fruition. After some initial upticks in some European economies (Ireland was lauded early as a prime example of austerity success), half of Europe has now slipped back into a recession. Unemployment in Spain and Greece is over 20%, and, even worse, unemployment for people under 25 is staggeringly over 50%. Even Germany has begun contracting.

With elections set this week in Greece and, more importantly, France, where the likely winners will push for less austerity and more pro-growth initiatives, it’s likely Europe will see even more opposition to their failed fiscal adherence to austerity of the last two years.

Krugman: "How Stupid Does Romney Think We Are?"

Paul Krugman's Op-Ed piece today in the New York Times asks this question in response to the presumptive Republican presidential nominee's appearance last week in front of a closed Ohio factory and Obama's handling of the economy.

From the piece:

"For the Bush era didn’t just end in catastrophe; it started off badly, too. Yes, Mr. Obama’s jobs record has been disappointing — but it has been unambiguously better than Mr. Bush’s over the comparable period of his administration.

This is especially true if you focus on private-sector jobs. Overall employment in the Obama years has been held back by mass layoffs of schoolteachers and other state and local government employees. But private-sector employment has recovered almost all the ground lost in the administration’s early months. That compares favorably with the Bush era: as of March 2004, private employment was still 2.4 million below its level when Mr. Bush took office.

Oh, and where have those mass layoffs of schoolteachers been taking place? Largely in states controlled by the G.O.P.: 70 percent of public job losses have been either in Texas or in states where Republicans recently took control."

You can read the entire article here.

Paul Krugman Argues For Inflation

"[W]ould a rise in inflation to 3 percent or even 4 percent be a terrible thing? On the contrary, it would almost surely help the economy.

"How so? For one thing, large parts of the private sector continue to be crippled by the overhang of debt accumulated during the bubble years; this debt burden is arguably the main thing holding private spending back and perpetuating the slump. Modest inflation would, however, reduce that overhang — by eroding the real value of that debt — and help promote the private-sector recovery we need. Meanwhile, other parts of the private sector (like much of corporate America) are sitting on large hoards of cash; the prospect of moderate inflation would make letting the cash just sit there less attractive, acting as a spur to investment — again, helping to promote overall recovery."

Continue reading here.

Romney: 'It's Good, but It Could Be Better.'

I've been talking about this for a month now. An improving economy is the absolute worst thing for Mitt Romney. He has thus far staked his entire campaign on how the policies of President Obama have failed to restore American prosperity and Romney alone offers the secret ointment to cure our economic malaise. But as the months have drifted by and Romney's inability to focus on the general election, what, with having so much trouble securing just the republican nomination from Rick Santorum, who's been hard-lining social issues on the campaign trail, Romney has been unable to focus on the true issue of this election, the economy.

But that looks to be over. Romney cruised to victory in Tuesday night's primaries and that will secure half the delegates he needs for the nomination. With the nomination squarely in his sights, his focus is turning back to the President and the economy. Except while Romney's been hunkered down in far-right social conservatism land, the economy has continued to improve. Romney's arguments that the President has failed seems more vacuous day after day. So, what is the Romney campaign's answer? "It could be better."

The pivot is to say it's taking too long to recover from this recession, and that someone else could have done it better. Here's Jonathan Chait lambasting the Wall Street Journal for their noxious examination of the U.S. recovering from recessions. Besides the fact that the Journal's Ed Lazear skips over the '90's recession, because it'd be inconvenient for the Journal to talk about Clinton's tax hikes and their economic boost, he completely disregards the severity of the 2008 crash. Much like the Great Depression, the Great Recession was exceptional, and the culmination of a myriad series of events slowly crumbling the foundation of our economic infrastructure. It took years of damage to erode that foundation, and it will take years of careful repair to fortify it once again.

But here's something interesting: the presumed "could be better" candidate would ostensibly by Sen. John McCain, President Obama's opponent in 2008. McCain's economic plan was similar to the plan Britain's David Cameron employed: economic austerity. And, as Paul Krugman has noted repeatedly now that England--and the other nations that chose strict austerity after the recession--is entering a double-dip recession and unemployment is soaring, as an economy contracts and consumer spending pulls back, the government must make up that spending with economic stimulus in order to avoid further depressing the economy. McCain's policies, like Cameron's, would have prolonged the recession, and these are the same policies that Paul Ryan proposed in the House budget last week, a plan Mitt Romney has wholeheartedly endorsed. So, the rational, contextual view is, no, things could not be better with another candidate.

Krugman: "Lobbyists, Guns, and Money"

Paul Krugman's New York Times Op-Ed this morning glanced at the Trayvon Martin case, calling into question the 'Stand Your Ground' law in Florida and the political organization(s) that conspired to get the law, or ones similar to it, enacted, not only in Florida, but in numerous other states across the country. Specifically, he looks at ALEC and questions the lobbying efforts behind the bills, which, in essence, are written by the organization and introduced in state legislatures almost verbatim. So, who exactly is in office here? Elected officials? It doesn't quite seem that way.

"What this tells us, in turn, is that ALEC’s claim to stand for limited government and free markets is deeply misleading. To a large extent the organization seeks not limited government but privatized government, in which corporations get their profits from taxpayer dollars, dollars steered their way by friendly politicians. In short, ALEC isn’t so much about promoting free markets as it is about expanding crony capitalism..." continue reading here.

Paul Krugman: "Paranoia Strikes Deeper"

"Oil prices are set in a world market, and America, which accounts for only about a tenth of world production, can’t move those prices much. Indeed, the recent rise in gas prices has taken place despite rising U.S. oil production and falling imports..." continue reading here.

Elitists Vs. The 1%

I was reading through Paul Krugman's piece today in the New York Times and was struck by a sudden realization. We hear quite a bit in the media about these "elitists" who are these privileged, upper class, intellectuals that have ruined the country in numerous, countless ways. Now, there are "Right Wing Elitists" such as former President George W. Bush. And then there are "Left Wing Elitists" such as our current president, Mr. Obama. But I believe there is a discordant variation of the way the media portrays these two "different" groups.

If you were to Google "Michelle Malkin elitist" you'd find a few links to her blog and the above image will come up. These blog entries chastise the President for his apparent hypocrisy of pointing out other elitists while trying to play himself off as an average American. And we hear all the time on Fox News of "liberal elites" who are subverting the country and have taken it over(!) already. Just refer back to Glenn Beck's satirical, conspiracy-theorist run on Fox for plenty of reference material. And these elitists must be stopped at all costs from further damaging the country.



What we have from the other side of the aisle is a fixation on the 1%, the wealthiest Americans who have siphoned money for the last 30 years from the middle and lower classes, who have bought elections, and silenced the press and freedom of speech. But these are the "job creators" and hence are sacrosanct in GOP rhetoric. And therein lies the hypocrisy of the Right's defense of the 1% in light of the Occupy Wall Street protests. The right cannot stand that a contingent of the population is protesting the abuses of the wealthy, but it is the wealthy 1% who are the "elitists" the right seems to believe have destroyed the fabric of America. They can't have it both ways. Either the elites are helping the country by creating jobs, or the elites are hurting it by fundamentally stripping away our freedoms and luring us into a socialist state. The GOP needs to come to this same realization: elitists are the 1%. The funny thing is: I tend to agree with the assessment that elites have thrusts this country into a tailspin of corruption and greed.