…it can only be failed. Think tankers at the WSJ:
Confusion reigns supreme. The International Monetary Fund told the U.K. this week that it should cut taxes and boost spending while also praising the fiscal consolidation of 2010, which saw a mere 1% cut from public spending. Labour and Conservative politicians argue over the extreme severity of the coalition’s spending cuts while ignoring the fact that the national debt is set to increase to a staggering £1.6 trillion by 2015, from £1 trillion in 2010. A false dichotomy—will “austerity” get us out of the economic crisis or will “growth”?—is posed as if the right answer will somehow lead us out of economic despair.
At a time such as this, we need clarity. We need to know where we want to go—and then to boldly implement the policies that will get us there. For all those who wish to see a return to enduring prosperity, new research published today by the Centre for Policy Studies suggests a simple, specific destination. We find that the size of government as a proportion of GDP is a major influence, controlling for other factors, on a country’s rate of economic growth. If you want growth, scaling back the state should be an aim whether you have a deficit or not.
Austerity uber alles. Having said that, Krugthulhu versus Arthur “The Curve” Laffer on Real Time tonight may actually get me to watch the show for like…the first time ever. BEARD TENTACLES OF SANITY invading Laffer’s concrete skull on live TV might be kind of nifty to see.
Maybe. We’ll see.
I think it’s great that the WSJ is going after the Republicans for attempting to undo the automatic defense cuts they agreed to in the deficit deal they negotiated with Obama.
That is what they’re doing, right?
I’ve sat through way too many Maher shows waiting for competent people to make lucid, compelling progressive arguments, but it rarely happens.
Maher is clueless about policy, and the show isn’t set up(too many guests) for legitimate debate. Even smart, reliable liberals usually perform badly on that show. The wingers routinely lie, but Maher is too thick to catch them.
That has got to be one of the stupidest statements on economics I have ever heard.
There’s a reason we have terms like contractionary policy vs. expansionary policy, FFS.
Where is the WSJ getting this shit? They seem to be completely ignoring the whole of reality and just making shit up. Not that this is a surprise, but I at least expect them to be more clever about it. Brooks is even better about this shit.
This think tank needs to be derided, mocked, and laughed out of the WSJ. This isn’t even barstool economics. This is just insane.
BTW, notice the fraud:
When a country is experiencing high growth rates, the natural consequence is that the proportion of government spending to GDP goes down.
I’m assuming that what their stats show is that countries with a lousy GDP have a larger % of that GDP coming from government.
So, these people are not so stupid as to fail to understand correlation is not causation, are they? And if they are not, this is purely propaganda in the service of plutocracy. They are either stupid or evil. Possibly both.
Unfortunately, Kthug has a face (and delivery) for print. As a debater, he is 2nd string, I wish it were otherwise, but CLV (French).
As much as I delight in his columns, I cringe at his appearances.
The WSJ apparently thinks we are all boneheaded morons. Or they are in fact boneheaded morons. Or both.
Grover Norquist is probably cringing at these asshats for their utter failure to carry the lie properly.
You are not supposed to give the game away like this. How many people did it take sitting around a table to come up with this ridiculous twaddle? Jesus wept.
This was mentioned in another thread but it really belongs here: http://www.guardian.co.uk/world/2012/may/25/payback-time-lagarde-greeks
IMF to Greeks: DIAF and please don’t come begging for water to save your dirty kids.
We truly are ruled by ghouls and monsters.
Anyone going to live-blog this? Probably a job for Ken Layne.
We have growth. The growth of the income inequality gap continues on, and if we want it to continue, we must do as the WSJ wise men say.
I usually spell it “CLFV,” but I take your point.
It’s like no one has studied this problem before and they have no idea what to do.
@beltane: That was a pretty disappointing bit of attempted bullying by Lagarde, who for the most part has been the least idiotic of the “Troika”. But who knows, maybe yelling at a economically-strapped country will produce the desired results this time.
Stuck in the Funhouse
There problems are some different than us on the supply and demand scale, but full scale austerity in already heavily socialized democracies, seems like a recipe for disaster.
I guess the Germans are the fly in the euro ointment, fanatical about deficits causing hyperinflation that rode Mr. Hitler into power. The whole world is fucked up, and this business will spin all out of control, and we’ll be lucky to live through it.
Then we get this news
Well, that’s just peachy, ain’t it. Now all we need is a president Romney to put defense missiles on the Russki front steps to lead us to a better Apocalypse. The fundies will love it.
@PeakVT: At least she stopped short of suggesting that Greek parents save money on food by eating their children.
Does Krugman have Asperger’s syndrome? On tee vee he’s comes off as a real odd ball.
That photo of Lagarde looks absolutely ghoulish. She looks sort of like that tanorexic mom that was in the news a few weeks ago. I don’t think they’re doing her any favors by using that photo.
Neo-Classical Economics. Which is based on:
1. People have rational preferences among outcomes that can be identified and associated with a value.
2. Individuals maximize utility and firms maximize profits.
3. People act independently on the basis of full and relevant information.
Each item in the list is demonstrably out of touch with Reality.
@David Koch: Someone needs to cultivate a stable of spokesmodels who could explain real-world economics to an uninformed public in a TV friendly way. I am serious about this.
@Stuck in the Funhouse: I guess the Germans are the fly in the euro ointment, fanatical about deficits causing hyperinflation that rode Mr. Hitler into power.
Which is irrational, since the hyperinflation was over by 1924 and it was massive unemployment caused (in part) by austerity in response to the GD that brought the NSDAP to power.
@Violet: She looks like an upscale version of Jan Brewer. I guess the only difference between our clown car and the European clown car is that the Euro clown car is a BMW. I expected better.
Villago Delenda Est
Sheila the waitress (portrayed by Mercedes Ruehl in The Secret of My Success):
“Expansion is a positive reaction to the universe
While retraction or cutting back or pulling off…
Those are all negative forces.”
The IMF has fully embraced the negative.
@Violet: Definitely a very unflattering photo. A better one.
@beltane: I swear on tee vee he comes off as rainman. http://www.bloomberg.com/apps/data?pid=avimage&iid=iaULDhrH7RU0
Villago Delenda Est
To say that Adam Smith pooh-poohs this notion in The Wealth of Nations is to understate.
The Neo-Classical economists are like the 19th century advocates of the Miasma Theory of disease http://en.wikipedia.org/wiki/Miasma_theory who stubbornly clung to their theory long after it was conclusively proven that contagious diseases were caused by microbes. This type of stubbornness in the face of empirical evidence cost many people their lives then and it is costing many people their livelihoods now.
Maybe they should privatize their healthcare systems and go to a free enterprise employer based model. That will solve so many problems.
I’ve given up on Maher’s show. He thinks he’s being ‘well-rounded’ by including the lightning rod wingnuts on the panel, but all he’s doing is giving them another venue to spout their cut-and-paste Fox talking points. Gets real old real fast.
If I wanted the opinion of the WSJ or felt it had any validity, I’d slit my throat. As it is, the cuts look better on them: tongues if I’m in a good mood, other dangly bits if I’m in a bad.
@Villago Delenda Est:
But it’s proof Bubbles Do Not Happen!!!!!11!!!!!! since nobody with “full and relevant” information would buy real estate right before prices crater. (Right?)
And the Facebook IPO didn’t happen either. Also. Too.
On another subject Anonymous: The Fable of “Moral Arithmetic”:
Actually, the Wall Street Journal is “getting this shit” from Herbert Hoover’s secretary of the Treasury, Andrew Mellon, in 1930:
There’s nothing “neo-” or “new-” about any of this. It’s the same mindless stupid ignorant folly people rushed to put into policy like lemmings scrambling over a cliff before Keynes created modern macroeconomics in 1936.
And here we are, back in 1930, lockstep-marching to the drumbeat of the same mindless stupid ingorant folly…
But that’s what it is labeled.
(I didn’t do it! :-)
Marxsome German wrote, “history repeats itself, the first as tragedy, then as farce.”
Villago Delenda Est
The South Sea bubble did not happen, the Tulip craze did not happen, the entire dotcom bubble did not happen.
The obvious fiction of “full and relevant information” is one that Smith discusses and demonstrates just does not exist outside of theory, and he proceeds to provide examples.
I’m sure that our brilliant neoliberal economist overlords just skimmed over all that unfortunate contrariness of the master.
@mclaren: If Mellon had his way it would have been his own class that would have ultimately been liquidated.
Maher does okay all on his own, with the monologues and the new rules. He gives airtime to morons and doesn’t nail them nearly often enough, but if you’re not looking for a well-moderated conversation between thoughtful people, I’d watch.
Last week he told Grover Norquist off in pretty fine fashion at one point, to much applause, though GN just nasaled on past him as if his hearing were defective.
If nothing else, it’s creepily fascinating to watch people lie with straight faces.
O/T but worth it (IMHO) …
Wonkette for Teh WIN!
@Baud: I’m just trying to reconcile the WSJ’s newfound concern for spending with its 8 years of sucking W’s spend-like-a-drunken-sailor cock.
@Stuck in the Funhouse: “I guess the Germans are the fly in the euro ointment, fanatical about deficits causing hyperinflation that rode Mr. Hitler into power.”
But that is just it, it was NOT the hyperinflation. That was in 1923. In 1933 unemployment in Germany was 47 fucking percent and then Hitler came into power.
They have learned the wrong lesson from those two events.
Everyone but the financial barons dealt with the hyperinflation,
they started out with nothing and ended with nothing.
unemployment deranged the nation, but did not kill off the financial barons.
The wrong people learned the wrong lesson.
ETA: PeakVT beat me to it.
@Anoniminous: That was
Marxsome German writing what he claimed Hegelsome other German said, actually.
And to add to the hilarity, they both got it wrong. The tragedy/farce remark was referring to similarities in the forcible siezures of power engineered by Napoleon Bonaparte (tragedy) and Napoleon III (farce) respectively. But while Napoleon III did in time turn out to be a clown emperor who fucked up almost everything* he turned his hand to (a good deal like a certain recent Republican president we all know), in point of fact during the actual siezure of power more people were killed as a result of political violence the 2nd time around under N.III, than were casualties the 1st time around under N.B.
So stickly speaking as a matter of historical accuracy it should have been: first as farce, then as tragedy. But then that doesn’t sound as good, does it?
*[with the notable exception of the urban redevelopment which gave us the wide and graceful boulevards for which Paris is known today. Wide and graceful that is, so that loyalist troops would have better lines of fire with which to pour grapeshot into rioting crowds, should the occasion arise, but hey when it comes to architecture, good results count for more than bad intentions]
Napoleon III was an absolute buffoon in foreign policy, but don’t sell him short on the domestic stuff; he also instituted universal male suffrage. It might not have mattered much during his reign when he had all the real power, but the principle remained in place after he was gone. (And like in America, universal suffrage appalled quite a few people in the bourgeoisie who were happy that the republic gave them a voice, but would never have dreamed it should apply to the rabble).
France has had a weird political spectrum in the last two centuries; they’ve had conservatives, they’ve had progressives, and in between the two, a Third Way embodied by Bonapartists in the nineteenth century, and Gaullists in the twentieth, which looks a lot like standard conservatism at first glance but frequently ends up doing more for progressivism than the actual progressives.
Bankers taste like chicken. Pass it on.
I see the dishonest “as a percentage of GDP” metric is very popular by the guys who spend big during their guys’ administrations, blow up the economy, and nosedive GDP right before a Dem administration.
They’ll play this until they get a divide by zero error, and the American electorate still will be to innumerate to figure out the problem.
@Anoniminous: I suppose. Maybe we should go back to lords, serfs, castles and steam locomotion as well.
I figured we were all well past that. Based on their slow adaption of modern models, I suspect this “think tank” must have been driven by the catholic church or something.
Hayek and Mises were FUCKING WRONG ABOUT MOST EVERYTHING, also too. Just had to add that. (or to be completely magnanimous – they are certainly wrong NOW)
@David Koch: And yet, he’s definitely the smartest guy in the room. And when he says shit, I don’t want to stab him in the face, which is a bonus.
My wife thinks he’s hawt – I do too, in that tweedy bearded, professorial way (he’d have to hit the treadmill before I’d go there but still) Rain man? Not so much. Offered FWIW
@Chris: The biggest problem the French have going for them is that Germany has been slacking and hasn’t invaded lately. Gotta do it every so often I think, or they go and get all uppity.
Of course in this time of uncertainty we must summon the Wille to pursue Klarheit as provided by such a pure source of knowledge. Debate can only lead to disunity in the face of our nation’s blood foe.
Yeah it looks great if you hate democracy
Belafon (formerly anonevent)
And if you want to be tall, play basketball.
@Chris: Can we just agree at this point that the phrase Third Way is basically a Bad Thing(TM) no matter who uses it and how it’s applied? =)
@hitchhiker: Maher would be much more watchable if he didn’t just talk out of his ass all the time. I’m not saying he’s wrong all time, he’s not. And he’s funny, in a cynical asshole sort of way (which isn’t always bad). But if I watched the program regularly I’d get a concussion from the sheer force of head meeting desk that he so often evokes. His glibertarian bullshit still rears it’s head too often, and I can’t watch him without imagining Coulter in sexual situations, so he makes me more than a little sick, also too.
Bill Maher has to be the worst talk show host of all time. Every guest exists to be a foil for his brilliance, and the show often falls apart because Maher is simply not as smart and well informed as he thinks he is. He’s Jay Leno with a more colorful vocabulary.
It is a good thing it was Legarde and not a German being cavalier about children starving in Athens. I know people who barely survived the war years as children and who lost friends and family members to starvation.
As for the IMF, this is not too surprising. It is not a development organization, although it sometimes pretends to be. When the oil shocks devastated fragile African economies in the 70s the IMF squeezed the poor bastards dry, and a lot of children starved and died as a result.
I think it’s pretty LOL that a couple folks on here who think they just discovered Lagarde were definitely on here when we were talking Inside Job and I was mentioning how motherfucking dumb it was for liberals to be waxing poetic on the virtue and insight of a French trade minister from a center-right party
simply because she was bashing America in her Capitol Hill English . . .
Americans: the rich people will tell us what to think of the rich people
@Sly: he’s also smug and thinks he’s a lot smarter than he is. he’s also a misogynist asshole with a face made for punching or whatever that german word is.
Another Halocene Human
@AA+ Bonds: Bitter much?
@PeakVT: Shouldn’t that be “concerned trollka”?
No evidence is provided in the WSJ article supporting the authors’ conclusions, no methodology, no data, not even a link to their work elsewhere. Nor do they explain how a reduction in spending can induce economic growth. How rigorous.
Pretty weird that for the past 8 years the UK (London) has been gearing up for the Olympics which should have boosted employment and wages. Does anyone want to hazard a guess what happens to the Euro when the games leave town? If their austerity has caused a recession during a time of big stimulus spending, what happens next? (That sentence doesn’t make any sense, yet I think it’s what is happening)
Just from what I have read on the Internet (such as that counts), the stimulative effect of British Government spending for the 2012 London Games on their national economy has been studiously and vigorously ignored by virtually every economic commentator (domestic and foreign) – if only on the grounds of “it’s a one-time deal“.
I gather that their hope is that the influx of Olympic tourist dollars/Euros/yen/yuan/whatever (and the hopefully-consequent feel-good publicity) will boost the numbers just enough to mask the negative effects of their failing/failed “austerity” programs for another quarter or so. Well: good luck with that, chaps….
PS: Britain isn’t in the Eurozone….
@Jay C: It doesn’t matter. If London gets an economic boost they’ll say it was due to the national austerity measures. If it doesn’t they’ll say it’s because the deficit is too high and markets don’t have enough confidence to spend. The facts will be spun on the fly in any manner necessary to preserve neo-liberal economic myths.