I really wish I could just write Krugman off as some fearmonger, but everything he has said so far has been pretty accurate, so the whole Italy Greece meltdown is quite terrifying to follow.
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Come for the politics, stay for the snark.
Dear Washington Post, you are the darkness now.
Take hopelessness and turn it into resilience.
You cannot love your country only when you win.
This country desperately needs a functioning fourth estate.
Motto for the House: Flip 5 and lose none.
The cruelty is the point; the law be damned.
Museums are not America’s attic for its racist shit.
The gop is a fucking disgrace.
“In the future, this lab will be a museum. do not touch it.”
Following reporting rules is only for the little people, apparently.
Disagreements are healthy; personal attacks are not.
You’re just a puppy masquerading as an old coot.
The republican speaker is a slippery little devil.
It’s always darkest before the other shoe drops.
They punch you in the face and then start crying because their fist hurts.
Michigan is a great lesson for Dems everywhere: when you have power…use it!
My right to basic bodily autonomy is not on the table. that’s the new deal.
Fuck these fucking interesting times.
rich, arrogant assholes who equate luck with genius
One way or another, he’s a liar.
A thin legal pretext to veneer over their personal religious and political desires.
The party of Reagan has become the party of Putin.
Our messy unity will be our strength.
One lie, alone, tears the fabric of reality.
shortstop
John! It’s just “fearmonger.” Love, shortstop.
jurassicpork
Greece painted itself into a corner and there are no palatable options. Either they default and throw away the euro and go back to the drachma or adopt some austerity measures. Short of winning Powerball, Greece is going to have to take its lumps one way or the other.
Of course, they got this way because Greeks famously don’t like to pay taxes, sort of like a certain party I can think of. You want a picture of the future United States under Republican rule? Look no further than Greece.
Btw, here’s my latest podcast with Anastassia of The Daily National. Ana wanted to talk about my liberal and conservative manifestos but we also got around to talking about #OccupyWallStreet and what Nov. 5th means for bankers.
Punchy
I believe the full acry is PIIGS. Portugal, Ireland, Italy, yada yada. Economics is droll.
The only “Euro” I’ll be having next will be at lunch in my favorite Greek restaurant.
Villago Delenda Est
John, please.
The man is shrill. Our pundit overlords who know much better than us have already pronounced the verdict on Krugman.
Ignore him. Pay attention to the MoU who got HIS inside info from some cabbie in Bangalore.
John Cole
@shortstop: Thanks!
The Snarxist Formerly Known as Kryptik
@Villago Delenda Est:
Precisely. Don’t worry your little head, John, even if you can’t ignore KThug, our media will pick up the burden of ignoring him for you! You can thank them later!
PeakVT
I’d say maddening and depressing, not terrifying. Then again I’m not involved in exporting anything to the Eurozone.
And Greek politicians are planning to put an ex-ECB official in charge. I’m sure the Greek people will just luurve that…
ETA: Numbahs, if you’re into that kind of thing.
Shinobi
Sometimes I just want Paul Krugman to lie to me and tell me everything is going to be okay, just so I could believe it for a second.
srv
Krugman just doesn’t get politics, no other option is possible [insert context here]
/Stuckians
singfoom
As if the MotUs would be perturbed enough by Krugman’s rationality to stop fucking their supposedly job-creating chickens.
They’re too busy counting their merit free bonuses and spending more money than any of us will see in a lifetime.
I’d really like to see one of the Euro countries go Iceland on the banks.
I’d also really like to know how the 50% haircut they’re proposing will effect Gold In Sacks. Or did they just help Greece structure the deals that helped destroy the country and pocket their fees and get out.
It always seems to be about the counterparties…
cathyx
And of course it would surprise no one that the US taxpayers are helping to bail out the European banks because we have so much money to give away.
http://online.barrons.com/article/SB50001424052748704760604577011852238080484.html?mod=BOL_twm_col#articleTabs%3Darticle
cathyx
@Shinobi: And maybe pat your head while he says it, too.
reflectionephemeral
What has Krugman been wrong about?
He was right about the unaffordability of the Bush fiscal policies, about the nature of the California energy crisis, about the false rationale for invading Iraq, about the need for more stimulus in 2009.
What’s he been wrong about? The guy writes about politics a bunch a times each week, I’m sure there’s something. But I don’t think he’s ever been wrong about any big things.
JGabriel
PeakVT:
If the Eurozone goes into another recession (or depression), which a Greek default or a collapse of the Euro would pretty much guarantee, they’re probably taking us with them.
.
Violet
Germany, and to a slightly lesser extent France, have to be hating the situation they’re in right now.
Shinobi
@cathyx: I could sit on his lap and ask Santa Krugman for an employed Christmas.
Jenny
NAFTA, PNTR, TARP, that Banks-to-Big-too-fail aren’t a problem, that Glass-Steagall is irrelevant, that the Cadillac-Tax is great. That it was a mistake for him to work as an economist for Reagan.
You know, he’s only been wrong about little things.
Chuck Butcher
@reflectionephemeral:
You may have noticed from Iraq forward that being right is a pretty good recipe for being ignored or fired and being wrong is consequence free and a ticket to lots of Media time.
Violet
OT – I can’t believe there hasn’t been a front page post on the creation of NotMittRomney.com. I know the Republicans hate him, but I can’t believe this is real. Yet it is. They really are, Anybody But Mitt. The Today Show even mentioned Newtmentom today.
Martin
@Punchy:
What about Iceland?
The acry grows as demand warrants. In time it may grow from PIIGS to EUROPE.
Oh, and the problem isn’t Italy, it’s Italy’s banks. And can we establish a new economic rule? “You can’t promise to pay out money that doesn’t exist”. I know that sounds like some kind of economic crazytalk, but it seems like that one statement would clear up a lot of problems.
JGabriel
@Shinobi:
It wouldn’t work. Cf. Buffy 2.07, 1997:
.
Shinobi
@JGabriel: Buffy just needed to work on her powers of self delusion.
UNICORNS! THEY ARE REAL! OBAMA IS BRINGING ME ONE PERSONALLY!
RossinDetroit
According to an old Krugman paper I scanned this morning, Greece just needs to put a penny in the bank & travel at near light speed for 1000 years. Only 10 years will pass for Greece but 1000 years of interest will accrue on Earth. Probelem solved in one decade.
FlipYrWhig
@reflectionephemeral: IMHO he has often underestimated the difficulties involved in getting a bigger, more effective stimulus past conservative Democrats in the senate. And in general he seems to me often to confuse being _right_ about policy with being able to convince hesitant and dumb politicians to _embrace_ that right policy. In other words, he tends to trust that when you’re right you win the argument, when politics is (sadly frequently) about how to deal with opponents and bargaining partners who _refuse_ to do what’s right and similarly refuse to be convinced by facts. But that’s not really Krugman being “wrong” vs. “right.”
JGabriel
@Martin:
Not on the Euro. They defaulted, and now they’re doing better than anyone expected. Not great, but better than PIIGS.
.
mk3872
Cole:
Except for his dire predictions of the U.S. double-dip recession. Actually, make that Reich & Krugman who were both wrong about that.
cathyx
According to this Guardian article, Germany owes Greece reparation money from WWII that has never been paid.
Maybe now their even.
http://www.guardian.co.uk/commentisfree/2011/jun/21/germany-greece-greek-debt-crisis
David Koch
Buffy’s problem is she didn’t use the bully-pulpit to stop Hellmouth.
RossinDetroit
Ron Paul and others want to do away with reserve rules. Have 100% of deposits on hand at all times. Makes lending impossible, though.
JGabriel
@mk3872:
So far.
.
different-church-lady
Oh piddly poo. I resigned myself to sustenance farming months ago.
Shinobi
@FlipYrWhig: I think someone in the conversation needs to represent the ideal world scenario, otherwise it is too easy to completely lose sight of it.
daveNYC
@David Koch:
Instead she used an
executive orderdeus ex machina.Martin
@Jenny:
Was he wrong about those things? The problem I see from the arguments from the left is that they get cause and effect all wrong. NAFTA supposedly is to blame for all of these jobs being outsourced, yet supposedly China and India is where they all went. The cause and effect there has always been a mystery to me.
Belafon (formerly anonevent)
@Violet: I don’t know. Does it strike you as interesting that almost all of the losses by the PIGS have been balanced by increases in Germany?
JGabriel
@RossinDetroit:
Makes banking impossible. The whole point is that the banker can use deposits to generate profits which are used to pay overhead, salaries, dividends, and interest.
Require that all deposits be kept 100% on hand, and not only can’t you make loans, you can’t make payroll either.
.
Jenny
I have to say, I disagree with KTHug on many issues, especially his addiction to fucking “free” trade, but I agree with him that FDL is a loony-toon, neo-truther swamp:
different-church-lady
@mk3872:
How the heck can we double dip when we’ve hardly exited the first dip?
Economically we’re living in a huge flood plain. The actual dip is like a creek running down the middle of it.
redshirt
@David Koch: It’s time we elected a Slayer that isn’t sleeping with demons! Bring the adults back to the Hellmouth!
different-church-lady
@JGabriel: Agreed: that’s not a bank Paul is describing — it’s a vault.
FlipYrWhig
@Shinobi: Fair enough, but there’s a difference between waving the banner of “What We Need” and offering interpretations for why we haven’t gotten it. I’m not sure he does that last bit as well as he does the first. And, frankly, he’s so valuable on the first that he might as well do it exclusively, I think.
Linda Featheringill
@different-church-lady:
subsistence farming.
Violet
@Belafon (formerly anonevent):
I think they’ve been able to hold it together so far. Maybe they will for the long run too. But at some point, it seems likely that someone will be left holding the bag. The Germans don’t want to bail out the Greeks (or Italians, or whoever). The average folks in those countries are paying the price, or are going to pay the price, so far. But if that doesn’t hold up, well, where will all those losses go?
ornery
@jurassicpork: Greece painted itself into a corner…
Of course you meant the Greek FINANCIAL SECTOR and CORRUPT POLITICIANS painted the Greek people into a corner … you somehow missed labeling things clearly.
I’m sure you just forgot, whoever you are.
Jenny
@Martin: They did go to China. That’s why I specifically included PNTR.
I would love for KThug to waddle down to Occupy Wall Street and tell them how much he loves “free” trade, just to watch the protesters pelt him with tomatoes.
different-church-lady
@Linda Featheringill: Thank you. I almost resigned myself to the wrong thing. I would have starved to death.
Amir Khalid
At some point, a front-page post on the Eurozone crisis needs to have the headline:
ETA: But I think I just guaranteed that this will never happen. Oops.
Cris (without an H)
@different-church-lady: And we all know the problem with a vault. It’s vulnerable to a dirty bomb attack.
KG
@daveNYC: yeah, but there’s another Hellmouth in Cleveland…
scav
@different-church-lady: Subsidence Farming might explain the sinking feeling though.
srv
@Martin: Krugman haters only hear what they want to hear.
Krugman wanted TARP to include ownership (bailout for stock) in the banks in return for the bailout. The “always politically unrealistic” Krugman gave in to what was… possible.
As for PNTR, try to imagine a US economy right now where China did not hold a couple of Trillion in US Debt and we had no rational actors (besides them) re our economy.
JGabriel
@srv:
Krugman also wanted nationalization of the worst offenders, which probably would have meant Citi & BofA.
.
Jenny
@srv:
I love it how this “hippie-puncher” is revered by no-nothings. He wrote in the NY Times that Ralph Nader is an “extremist” for opposing “global trade agreements”, and that Nader was as “disgusting” as Newt Gingrich.
I would pay to watch him go down to OWS and punch hippies as “extremists” for opposing his precious global trade sell outs.
AA+ Bonds
Nader isn’t an extremist, he’s an eccentric, he merely hangs out with extremists nowadays in really damning photographs
different-church-lady
@scav:
Sub… sidence… I really need to get my eyes checked, because even though I wasn’t going to spell it right, that isn’t even what I was going to spell wrong.
Satanicpanic
From the title of this post I thought we were still talking about Joe Paterno
AA+ Bonds
Jenny you are an effective troll.
AA+ Bonds
Paul Krugman will soon come around to the idea of structural changes in the balance of the world economy, or the New York Times will go bankrupt as the center of power relocates elsewhere on the globe, dragging Paul Krugman along with it most likely.
Jenny
@AA+ Bonds: it’s really trollish to oppose NAFTA and PNTR and helping Reagan accomplish trick-down economics. Tell that to the people occupying Wall Street.
Chris
@Cris (without an H):
LOLOLOLOLOL.
David Koch
I love Krugman. His ThomasFriedman-like promotion of every free trade agreement in the past 30 years has made me Billlllliooooooons, while literally killing millions of union jobs. It’s a win-win. My wealth goes up, while their income goes down.
Thanks, Paul! You’da man! I couldn’t have done it without you.
scav
@different-church-lady: You didn’t, I’m just running with mo betta misspellings. It’s one of my few real talents.
HyperIon
@reflectionephemeral wrote:
a fair number of his commenters take him to task today for being a crappy energy policy guy.
General Stuck
@srv:
mclaren
The significant issue about the Eurogeddon is that if Europe implodes financially, it could well drag America back down into a double-dip recession with it.
A breakup of the European Union and the collapse of the Euro isn’t the end of the world, of course. A smaller core EU may well survive, made up of Britain, France, the Netherlands and Germany, and within that core group the Euro may well remain stable. But if the other European states exit the EU and abandon the Euro for their own currencies, you’re going to see significant barriers to trade going up and a lot more economic frictional forces in transactions twixt nations, and economists generally agree that this would augur lower growth rates for European economies in the near future.
Since the U.S. economy is already near stall speed, this would bode ill. It could mean higher unemployment (say hello to 10%-12% by Obama’s re-election night) and further disintegration of the middle class in America. If we do get a double dip recession and unemployment zooms back up to 12%, your average Americano might get desperate enough to do something reckless, like voting for, oh, I dunno, Perry or some other crank. Even if that doesn’t happen and Obama gets re-elected, a double-dip recession means a lot more riots, a lot of riot-armored muggers with badges beating down people in the tent cities (I vote we call them Bushvilles, in the manner that shantytowns in the 1930s were called Hoovervilles), and more erosion of democracy as the 1% that owns America increasing calls out their militarized goon squads to prove that they’re not going to get thrown out of power without a fight.
Oh, and as for what Krugman has been wrong about…some economists take him to task for his claim that Japan had a “lost decade.” 3% unemployment and tremendous infrastructure construction isn’t exactly a “lost decade.” If we could do that well during a decade of flat economic growth, we’d be in really good shape.
cathyx
@mclaren: Why would Britain adopt the euro now after all that has happened?
deadrody
Indeed. But, hey, lets emulate their ridiculous European socialist model ANYHOW!!!!
Hooray for OWS
4jkb4ia
@37: The “fake scandal” was in the way that FDL Central hyped that. It was not in whether there should have been more disclosures about Gruber, even the public editor figured that out. Here is EW saying that we don’t know if any of this will pan out to being a scandal, but because it wasn’t disclosed to us that Gruber had this contract when he put on his expert hat, maybe people weren’t asking important questions.
And if I have to apologize for using “firebagger” on another post, I will do that.
handy
@cathyx:
Where do you read that?
4jkb4ia
You don’t need Kthug to predict that this will all end badly. I think the markets are trying to price in that this will end badly because they have not been given any reason to trust the politicians in Greece or Italy yet. But I don’t know if I agree that Greece and Italy should inflate away their problems–but I don’t have a Nobel Prize.
But that was a good post and I’m glad you got me to read it.
cathyx
@handy:
Omnes Omnibus
@cathyx: Your error here was expecting mclaren to make sense.
SiubhanDuinne
“The glory that was Greece and the grandeur that was Rome.”
Sigh.
handy
@cathyx:
Edited: good catch I didn’t see it at first.
handy
@Omnes Omnibus:
I think the problem is one of clarity. Britain hasn’t (and I don’t expect in light of current conditions won’t) adopted the Euro. But it is a core member of the EU. I’m guessing that Mcclaren’s point was that this core will survive, with those members whose currency is the Euro continuing in that.
Omnes Omnibus
@handy: I don’t disagree with you. OTOH life is too short to spend much time parsing mclaren’s writings.
burnspbesq
@reflectionephemeral:
He either never understood or refused to acknowledge that it was politically impossible to get a stimulus that was big enough to do the job through Congress in 2009. That’s pretty much it.
burnspbesq
@Omnes Omnibus:
Ya think?
Omnes Omnibus
@burnspbesq:
Occasionally, but only when all other options have been exhausted.
burnspbesq
@ornery:
Bullshit. It’s not Bugs Bunny and Daffy Duck spending all day every day dreaming up new and improved ways to evade Greek taxes.
A clue is a good thing to have. You should try to find one.
different-church-lady
@scav: I think I’m just going to go lie down for long time now…
Liberty60
But wasn’t this all the fault of Jimmy Carter and CRA?
I am sure there were plenty of young bucks in Athens or Rome who were buying houses and T-bones because the liberals forced the banks to give them money.
scottinnj
Isn’t the whole Euro mess Barny Frank’s fault just like the whole financial crisis is his fault?
eemom
@jurassicpork:
Or maybe Greece ought to follow your model and resort to panhandling from random strangers on blogs, asshole.
eemom
@burnspbesq:
Are you saying the reality is something different from this?
If so, I’d really like to hear more about this esteemed “clue” of yours.
mclaren
@Omnes Omnibus:
Your reading comprehension error was in concluding that the clause “A smaller core EU may well survive, made up of Britain, France, the Netherlands and Germany” applies equally to “within that core group the Euro may well remain stable.”
The two clauses refer to different situations. I assumed everyone would get that, and didn’t account for some extremely dense readers like yourself, Omnes. Britain is one of the most stable and important members of the EU because of the size of its economy and the vitality and global influence of its culture, even though it never adopted the Euro.
If the smaller economies abandon the Euro, the Euro will probably still remain stable if France and the Netherlands and Germany and perhaps some other countries like Finland and Norway continue to use it.
Stability of the core nations of the EU =! all the nations in the EU using the Euro as a basic currency. This helps explain why Omnes Omnibus despises my posts. He lacks basic reading comprehension skills.
cathyx
@mclaren: It was actually my “reading comprehension error” that you’re referring to. I actually like your opinions and mostly agree with you, but in my defense, you were unclear in your writing about this topic so I feel I have to defend Omnes Omnibus in this case.
Omnes Omnibus
@mclaren: Actually, I tend to have more issues with your hair-trigger overreactions than anything else to do with you, but no matter.
Edited to fix a typo.
xian
Surely, Fannie and Freddie are to blame for the Eurozone crisis (and also Barney Frank, of course).
Jenny
@xian:, @scottinnj:
Barney Frank?
I thought every crisis is
the anti-Christ’sObama’s fault, no?mclaren
@Jenny:
This illumintes an important misconception by the obots.
Those of us who’ve consistently criticized Obama mostly have not slammed him for the economy.
Obama can do very little about the economy. No president can do much about the economy. Yes, Obama had a 2-year window, but 1) he inherited such an incredible economic mess, it’s hard to see how he could’ve gotten the economy back to, say, 6% unemployment by now and a 4% growing GDP even if he’d had FDR’s congress behind him, because it just takes a damn long time to deleverage all that debt;
2) Obama faced vicious opposition from lunatic Blue Dogs,who mostly got flushed out of congress like sewage for their efforts (smart move, Blue Dogs);
3) There are huge structural problems in the world economy. Globalization isn’t working except for the superrich. Algorithms + databases + the internet + robots are hurtling us into a new economic paradigm, one in which capitalism as we know it mostly doesn’t work. Warren Buffett has said “the internet is a net negative for capitalism,” it mainly excels in giving stuff away for free. But since the internet is eating everything, it’s eroding capitalism. We’re rapidly headed for a world in which, as Bruce Sterling put it, “Everything is mostly free and no one has a job.” Every job someone does represents some choke point of inefficiency in the economy. As technology removes those choke points of inefficiency, they’re removing everyone’s job.
4) This is not just the aftermath of a big recession. It’s a major change in the international economy, as big as the change from 1890 to 1918. After 1918 the world was radically different than it was in 1890, and after this gigantic economic meltdown gets sorted out, the world is going to be radically different. We’re already seeing those differences — an insane GOP running a crazy black guy for president. Who would’ve predicted that in, say, 1964? And the Democrats are running a sane black guy against him. Again, who would’ve predicted that 50 years ago?
Obama deserves criticism for things he has control over. Things like our endless unwinnable foreign wars, things like ordering the assassination of U.S. citizens without even charging ’em with a crime, things like that disastrous negotiation/capitulation with the House Repubs on the debt ceiling.
Obama does not deserve to get hammered for things he can’t control. The world economy spinning out of control and rapidly flying apart under the centrifugal force of extreme technological change that seems to be rendering capitalism as we know it unworkable is one of those things Obama can’t control.
burnspbesq
@eemom:
It was right there in the original comment, albeit disguised by an attempt at humor.
Any analysis that doesn’t take into account the long history of endemic tax evasion in Greece shouldn’t be taken seriously.
See, e.g.
someguy
Greece and Italy melting down might be scary, but not as frightening as France’s sudden, shocking austerity measures. They seem to be in much worse trouble than they have been letting on.
sherparick
Krugman believes despite the sluggish growth that we have not really recovered from the Great Recession with prolonged high unemployment and failure to return to the long term trend growth rate for the U.S. economy. We are in a “Long, if lesser, Depression.” He has been concerned that the countercyclicals negatives could throw the U.S. into a second actual recession. However, as Dean Baker points out (see below rules) the two most credit sensitive areas of the U.S. economy, housing and autos, have never really recover from very drepressed levels. Since they are on the floor, they can’t fall far.
Nevertheless, as the Eurozone implodes, this will lead to deep recession in Europe (which will hurt U.S. exports to both directly to Europe and to other countries who are dependent on European exports) and likely lead to a “Credit Crunch” in the U.S. And we are going to have more Government austerity come January with Federal spending cuts, continuing layoffs in State and local Government, and the return of the FICA tax to 6.5% on employees and employers from 4%.
As regards Krugman:
I always apply the Brad DeLong rule with a Dean Baker asterisk to Paul Krugman.
DeLong’s Rule.
1. Paul Krugman is always right.
2. If you disagree with with Krugman, refer to rule 1.
* Except when Paul Krugman disagrees with Dean Baker, because Baker is is even more right than Krugman.
I note that a lot of folks are unhappy about Paul Krugman and his advocacy of Free Trade. I would first note that, as Keynes famously said about himself, as the facts change Krugman has changed his mind. Especially, when considering the U.S. China/East Asia trade relationship and the manipulation of the dollar to keep it overvalued. That is not free trade. Also, he has recognized that the micro-economic arguement for Free Trade can be outweighed by the social costs of high unemeployment and low demand.
“… The case for free trade is about microeconomics, about raising efficiency. There’s no particular reason to think that trade liberalization is good for fixing problems of inadequate demand. I mean, you learn in Econ 101 that aggregate spending is Y = C+I+G+X-M; that is, consumer spending, plus investment spending, plus government purchases, plus exports, minus imports. Trade liberalization raises X, but it also raises M. For any individual county it can go either way; for the world as a whole it’s a wash, since total exports equal total imports.
So why is trade liberalization an answer to our current problems? Because, says Wessel, it would shore up business confidence. Why, exactly?
The reason this struck me is that the need to reduce trade barriers is a central argument in that 1934 book by Lionel Robbins I blogged about the other day. And the same incoherence was present here.” “http://krugman.blogs.nytimes.com/2011/06/30/wrong-to-be-right-2/
See also:
http://dipeco.economia.unimib.it/Persone/Gilli/food%20for%20thinking/simple%20general%20readings%20on%20economics/Is%20Free%20Trade%20Passe.pdf
And has Dean Baker has repeatedly pointed out, none of these “Trade Agreements” are really not about “free trade.” They are mostly about protecting corporate copyright protections and patent rights in 3rd countries and placing blue collar manufacturing and white collar service workers in competition with low wage foreign competition.