Why are Republicans Wrong about Everything?

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Dr. F.

Big Wall climber
SoCal
Topic Author's Reply - Mar 3, 2013 - 11:13pm PT
Ben Bernanke, Hippie

By PAUL KRUGMAN

Published: February 28, 2013 642 Comments
NY Times


We’re just a few weeks away from a milestone I suspect most of Washington would like to forget: the start of the Iraq war. What I remember from that time is the utter impenetrability of the elite prowar consensus. If you tried to point out that the Bush administration was obviously cooking up a bogus case for war, one that didn’t bear even casual scrutiny; if you pointed out that the risks and likely costs of war were huge; well, you were dismissed as ignorant and irresponsible.


It didn’t seem to matter what evidence critics of the rush to war presented: Anyone who opposed the war was, by definition, a foolish hippie. Remarkably, that judgment didn’t change even after everything the war’s critics predicted came true. Those who cheered on this disastrous venture continued to be regarded as “credible” on national security (why is John McCain still a fixture of the Sunday talk shows?), while those who opposed it remained suspect.

And, even more remarkably, a very similar story has played out over the past three years, this time about economic policy. Back then, all the important people decided that an unrelated war was an appropriate response to a terrorist attack; three years ago, they all decided that fiscal austerity was the appropriate response to an economic crisis caused by runaway bankers, with the supposedly imminent danger from budget deficits playing the role once played by Saddam’s alleged weapons of mass destruction.

Now, as then, this consensus has seemed impenetrable to counterarguments, no matter how well grounded in evidence. And now, as then, leaders of the consensus continue to be regarded as credible even though they’ve been wrong about everything (why do people keep treating Alan Simpson as a wise man?), while critics of the consensus are regarded as foolish hippies even though all their predictions — about interest rates, about inflation, about the dire effects of austerity — have come true.

So here’s my question: Will it make any difference that Ben Bernanke has now joined the ranks of the hippies?

Earlier this week, Mr. Bernanke delivered testimony that should have made everyone in Washington sit up and take notice. True, it wasn’t really a break with what he has said in the past or, for that matter, with what other Federal Reserve officials have been saying, but the Fed chairman spoke more clearly and forcefully on fiscal policy than ever before — and what he said, translated from Fedspeak into plain English, was that the Beltway obsession with deficits is a terrible mistake.

First of all, he pointed out that the budget picture just isn’t very scary, even over the medium run: “The federal debt held by the public (including that held by the Federal Reserve) is projected to remain roughly 75 percent of G.D.P. through much of the current decade.”

He then argued that given the state of the economy, we’re currently spending too little, not too much: “A substantial portion of the recent progress in lowering the deficit has been concentrated in near-term budget changes, which, taken together, could create a significant headwind for the economic recovery.”

Finally, he suggested that austerity in a depressed economy may well be self-defeating even in purely fiscal terms: “Besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short run for any given set of fiscal actions.”

So the deficit is not a clear and present danger, spending cuts in a depressed economy are a terrible idea and premature austerity doesn’t make sense even in budgetary terms. Regular readers may find these propositions familiar, since they’re pretty much what I and other progressive economists have been saying all along. But we’re irresponsible hippies. Is Ben Bernanke? (Well, he has a beard.)

The point is not that Mr. Bernanke is an unimpeachable source of wisdom; one hopes that the collapse of Alan Greenspan’s reputation has put an end to the practice of deifying Fed chairmen. Mr. Bernanke is a fine economist, but no more so than, say, Columbia’s Joseph Stiglitz, a Nobel laureate and legendary economic theorist whose vocal criticism of our deficit obsession has nonetheless been ignored. No, the point is that Mr. Bernanke’s apostasy may help undermine the argument from authority — nobody who matters disagrees! — that has made the elite obsession with deficits so hard to dislodge.

And an end to deficit obsession can’t come a moment too soon. Right now Washington is focused on the idiocy of the sequester, but this is only the latest episode in an unprecedented run of declines in public employment and government purchases that have crippled our economy’s recovery. A misguided elite consensus has led us into an economic quagmire, and it’s time for us to get out.
Reilly

Mountain climber
The Other Monrovia- CA
Mar 3, 2013 - 11:25pm PT
Krugman is just miffed that he is irrelevant and deservedly ignored.
Dr. F.

Big Wall climber
SoCal
Topic Author's Reply - Mar 3, 2013 - 11:25pm PT
wrong
jstan

climber
Mar 3, 2013 - 11:47pm PT
Krugman is just miffed that he is irrelevant and deservedly ignored.

Lincoln pointed out in the debates with Stephen Douglas that when Douglas said Lincoln wanted to end slavery, " he was telling you something he could not know." Your post above makes an ad hominem attack based upon something you can not know. Almost by any measure you take, your comment has no value.

You might have been more effective had you pointed out that Krugman himself has said our liquidity trap will end when inflation is feared generally and when interest rates rise. Were that to happen all new debt incurred by the US and all refinances might well become fiscally unsustainable. To be fair you would need also to point out the Fed has been hedging that eventuality in their "project twist" wherein short term securities are sold to finance Fed purchases of longer dated issues. The Fed is trading for its own account.

Every position anyone takes is a bet that depends for its success upon what the future will bring. If you have data as to that future, I think you would have everyone listening with bated breath.
Reilly

Mountain climber
The Other Monrovia- CA
Mar 3, 2013 - 11:55pm PT
Well,it was hardly an ad hominen. Maybe meaninglessly glib?*. ;-)
Let's be honest Big Ben and the Fed are merely in a holding action now primarily directed at
maintaining investor and consumer confidence and, hence, equities' share value. What else
can they do at this point?


*But it did serve to provoke a meaningful response from you, jstan.
TGT

Social climber
So Cal
Mar 4, 2013 - 12:19am PT
More "Beat the Press"

http://www.nypost.com/p/news/opinion/opedcolumnists/beat_the_press_96lFrUNync5zuBZTiZ6aUL

“I had a young reporter asking tough, important questions of an Obama Cabinet secretary,” says one DC veteran. “She was doing her job, and they were trying to bully her. In an e-mail, they called her the vilest names — bitch, c--t, a--hole.” He complained and was told the matter would be investigated: “They were hemming and hawing, saying, ‘We’ll look into it.’ Nothing happened.”
rottingjohnny

Sport climber
mammoth lakes ca
Mar 4, 2013 - 01:34am PT
boo hoo...!
Skeptimistic

Mountain climber
La Mancha
Mar 4, 2013 - 08:00am PT
It's pretty suspicious that the person quoted (one DC veteran) as well as the reporter who allegedly received the email aren't specifically named. I'm sure if such an email actually existed from a cabinet level secretary, it would be page one news, not buried in some blog...
Dave Kos

Social climber
Temecula
Mar 4, 2013 - 09:03am PT
Oh dear!

One of the people who works for one of the people who works for the Kenyan said a mean cuss word!


TGT

Social climber
So Cal
Mar 4, 2013 - 10:06am PT

You mean the Hawaiian Marxist?



Today, lots of liberal grandees attack the rich and yet do their best to act and live just like them.

Take financial speculator and leftist billionaire George Soros, who is back in the news. Soros is able to fund several progressive think tanks that go after the 1 percent because he is the most successful financial buccaneer of the age — notorious as "the man who broke the Bank of England" and was convicted of insider trading in France. The Soros family investment firm's most recent speculating coup was betting against the Japanese yen. That made Soros $1.2 billion in just three months — enough capitalist lucre to keep funding Media Matters and other attack-dog progressive groups for years to come.

Facebook co-founder and Obama campaign organizer Chris Hughes just bought the New Republic and has rebranded the magazine as an unapologetic progressive megaphone.

How odd that hip Facebook just confessed that it paid no federal or California state income taxes for 2012 on its $1.1 billion in pre-tax profits on its US operations alone. Odder still, Facebook will probably receive a federal tax refund of about $429 million. Apparently Facebook's "well-connected" found some "high-powered accountants" to write off their stock options as a business expense.

Perhaps Treasury Secretary-designate Jack Lew should have a look at Facebook's tax contortions. He should be familiar with the big-money paper trail, given that Lew himself took a nearly $1 million bonus from Citigroup after it had received billions of dollars in federal funds to cover its gargantuan losses.

Lew, like his tax-dodging predecessor, Timothy Geithner, has a propensity for doing just the opposite of what the president used to preach against. Obama, remember, warned Wall Streeters not to take bonuses after their failing companies received federal money.

Obama also derided dubious offshore Cayman Islands tax shelters. Yet he apparently forgot to tell that to Lew, who invested in a fund registered to the same Potemkin Cayman Islands building that Obama had used as a campaign prop to bash the one-percenters.

One of the nation's best-known class warriors is former US Rep. Jesse Jackson Jr. of Chicago, who for years has damned the wealthy for their ill-gotten gains. He is expected to plead guilty to fraud charges after he and his wife allegedly siphoned off $750,000 from their campaign accounts to pay for an assortment of one-percenter extravagances like a $43,000 Rolex watch.

Today's leftists like the high life as much as their demonized conservative rivals. The more they damn the bad "millionaires and billionaires," apparently the less guilt they feel about living it up in Palm Beach or Aspen, paying no taxes, offshoring their profits or wearing Rolex watches.

The vast growth of the federal government has splashed so much big money around New York and Washington that even muckraking progressives can't resist. Loud redistributionist rhetoric offers the necessary vaccination shot that makes privileged leftists immune from any criticism — or guilt — over indulging in tax avoidance, billion-dollar speculation or aristocratic tastes.

George Orwell long ago noticed the same thing, when in Animal Farm the pig elite loudly damned reactionary humans even as they sought to copy them by walking on two legs.


http://www.victorhanson.com/articles/hanson030313.html
dirtbag

climber
Mar 4, 2013 - 10:47am PT
boo hoo...!

You hear that, you frustrated right wing mo-fos?

boo hoo...!
locker

Social climber
FukUville
Mar 4, 2013 - 10:58am PT

Backward thinking fuking idiots...

Dr. F.

Big Wall climber
SoCal
Topic Author's Reply - Mar 4, 2013 - 11:40am PT
TGT, you still haven't apologised for being 100% wrong on everything
Woodward was Lying, there was no threat, there never has been a single threat, it was all BS, yet you go on.

It seems your Obama Derangement Syndrome symptoms have moved up a notch or 2

I will apologize for you, "your sorry you're such a right wing tool"
rottingjohnny

Sport climber
mammoth lakes ca
Mar 4, 2013 - 12:52pm PT
The benign and polite email to Woodwad was shown on TV several times and was taken way out of context by the media ,especially Fox drama entertainment...Woodwad is playing it up like a butt-hurt school boy..Either he has a new book coming out or he is suffering from early onset dementia...It is sad that this non-event is still getting attention when more important stories like Benghazi turn into mulch...
JEleazarian

Trad climber
Fresno CA
Mar 4, 2013 - 02:02pm PT
jstan,

Krugman's motivations and intentions I cannot claim to know, but the outcomes of his macroeconomic prescriptions remain open and notorious for all to see. From his prediction that the Reagan tax cuts would ignite inflation to those that stimulus spending would increase employment, his major macroeconomic predictions have been wrong in both direction and magnitude.

Krugman is a first-rate economist with a first-rate mind, but he concentrated his rigorous research on information economics. His macroeconomic record reflects his political preferences, not sound economic doctrine, practice or observation.

John
Dr. F.

Big Wall climber
SoCal
Topic Author's Reply - Mar 4, 2013 - 02:13pm PT
From his prediction that the Reagan tax cuts would ignite inflation to those that stimulus spending would increase employment, his major macroeconomic predictions have been 100% correct in both direction and magnitude.

Fixed it for you John

John, how can you be in cahoots with such a corrupt and despicable party during these times, do you just feign ignorance, or are you just part of the evil.

I remember you telling us that Obama refuses to cross party lines, he doesn't reach across the aisle, What a bunch of BS, Obama has too many times to work with the Republicans, and they just work against him no matter what the cause, even their own ideas and people (Hagel)

Even though the Dems say no

And Now we won again by a huge percentage, and the Republicans still tell us that we have to agree to their terms of more suffering and pain for the middle class, and more tax breaks for the rich and corporate entitlements

Their intentions are clear, bring down the economy and the President.
And for what? It can only be evil.


Dr. F.

Big Wall climber
SoCal
Topic Author's Reply - Mar 4, 2013 - 02:16pm PT
All the Republicans are jumping with joy to have Obama's sequester take effect.

What can be better than more lost jobs, more furloughed employees, more cuts to food safety and airline travel

Another round of recession!!! Yea!!

Why do they hate America?
Curt

climber
Gold Canyon, AZ
Mar 4, 2013 - 02:16pm PT
Krugman's motivations and intentions I cannot claim to know, but the outcomes of his macroeconomic prescriptions remain open and notorious for all to see. From his prediction that the Reagan tax cuts would ignite inflation to those that stimulus spending would increase employment, his major macroeconomic predictions have been wrong in both direction and magnitude.

Krugman is a first-rate economist with a first-rate mind, but he concentrated his rigorous research on information economics. His macroeconomic record reflects his political preferences, not sound economic doctrine, practice or observation.

You certainly are a good Republican, JE--buying fully into the Republican practice of repeating false comments often enough that less well informed people will actually believe them.

Curt
Ron Anderson

Trad climber
Soon to be Nipple suckling Liberal
Mar 4, 2013 - 02:19pm PT
yeah Doc, and at the same time we are giving $$$$ to Syrian rebels..?
Dr. F.

Big Wall climber
SoCal
Topic Author's Reply - Mar 4, 2013 - 02:27pm PT
Please tell me how cutting spending will lead to economic health.
It's the exact opposite, just like every other failed right wing idea

More guns means you are safer!
Clean skies means that corporations can pollute more
Healthy forests means you can cut more trees
No kid left behind means that all kids are left behind

every thing they say and do is ass backwards
or a projection of what they are doing.

It's like cutting spending in a house hold, just don't pay the mortgage or your car payment, that will work, right?, now you're alot richer!!

When you just write a bill and bring in more money, and keep the house and car.

All of America wants to balance our budget and pay down our debt, everyone except Republicans that spent all the money in the first place, they think we just cut social services and keep their bribes from the rich and corporate lobbyists.

We fought for these social services, so you can just forget cutting them, cut military spending, subidises to oil, close loopholes, stop offshoring profits, become a Patriot rather than sucking more money off America

It's all about priorities, and the Republicans have the priorities of the most despicable evil villains in history, screw everyone except those who are giving you money and talking points to keep the brainwashed in tow.
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