You know, with the newest employment numbers, I have no doubt Krugman is right:
O.K., Thursday’s jobs report settles it. We’re going to need a bigger stimulus. But does the president know that?
Let’s do the math.
Since the recession began, the U.S. economy has lost 6 ½ million jobs — and as that grim employment report confirmed, it’s continuing to lose jobs at a rapid pace. Once you take into account the 100,000-plus new jobs that we need each month just to keep up with a growing population, we’re about 8 ½ million jobs in the hole.
And the deeper the hole gets, the harder it will be to dig ourselves out. The job figures weren’t the only bad news in Thursday’s report, which also showed wages stalling and possibly on the verge of outright decline. That’s a recipe for a descent into Japanese-style deflation, which is very difficult to reverse. Lost decade, anyone?
Wait — there’s more bad news: the fiscal crisis of the states. Unlike the federal government, states are required to run balanced budgets. And faced with a sharp drop in revenue, most states are preparing savage budget cuts, many of them at the expense of the most vulnerable. Aside from directly creating a great deal of misery, these cuts will depress the economy even further.
The problem is that while Krugman is probably right, he was also right last week when he said that climate change is a serious issue and that we need to spend a lot of money to address it. And he was also right the week before that when he said that we need to do something about the health care system. And on and on.
Add to that, the opposition, which stood by and did nothing when Bush exploded the deficit in peactetime, and then write things like this (and this really is a wingnut tour de force- almost every sentence contains multiple falsehoods, distortions, and outright gibberish):
Porkulus has utterly failed, as has the Obama administration’s fiscal policies. Businesses have conserved capital in the face of massive new taxes and costs associated with Obama’s stated fiscal policies, such as cap-and-trade, foreign-income taxation, and the higher interest rates that will spring from the massive deficits Obama plans to create. The capital necessary for growth won’t appear in the market under these conditions, as we have clearly seen. When will the media begin to hold this administration responsible for Obama’s economy-killing agenda?
Now some of you might disagree, but I happen to know that Ed Morrisey is not that god damned stupid. I read him before he signed on with the Malkin empire, so I know he is just playing along because he knows what pays his bills. But he doesn’t have to believe this stuff, nor does Michele Bachmann really need to believe that the Census workers will- actually, I’m not really sure what she thinks the census workers are going to do. They are just playing a game to convince the people dumber that them, and believe it or not, there are a lot of those people out there.
So Krugman is right. Again. But there isn’t anything that anyone can do about it.