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Damn straight Paul! The established powers keep trying to tell us that austerity and more failed trickle down economics is the answer. They are wrong. The Great Recovery begins with public investments.

#politics #progressive #economics #GreatRecession
cc +Professor Paul Krugman Fan Page
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Hans Carota's profile photoSteve Kappes's profile photoOle Olson's profile photoMatt Shalvatis's profile photo
83 comments
 
Dude .... the guy is a hack ... thinks Martians attacking us would help the economy. NOT an Non Sequiter dummy
 
Too bad you didn't read his original article. It might have been a bit over your head though.
 
+Scott Munro Your ideology is interfering with your ability to read. Be careful, the next step in this degenerative process is throwing your own feces.
 
Let me guess, martian man wants the Feds to spend even more money. This will "improve" the economy! Lol that is original???? I think it insane.
 
Blocking trolls makes the internet better.
 
Telling it to Greece and more importantly the rest of the world, is the point.
Republicans on a sinking ship will be the ones yelling "you're running the bilge pumps too much, that's why we are sinking!"
 
+Scott Munro I'll bet you're the type that watches Hee Haw and needs to have the jokes explained to you
 
We've had the rough equivalent of a Martian attack in Japan, and guess what -- the spending for repairing all the damage is boosting the long moribund Japanese economy. +Scott Munro is too stupidly ideological to understand that the Martians were just a thought experiment like Schrödinger's cat for quantum physics.

The point of the thought experiment was that you didn't need the disaster to get the economy out of a tailspin -- you could just start spending on other things we need, like teachers, police and fire control, environmental cleanup, roads, sewers and other infrastructure.

Not only that, but the spending is almost free, because once the economy gets moving again, tax revenues go up and you can then pay down what was borrowed to get it moving. Current interest rates are near zero, so it's an even better bargain right now.
 
Actually, +Geoffrey Swenson I do understand that is a thought experiment! It is all the more stupid that an ECONOMIST would spout the broken glass fallacy! You do know what that is right?????? LMAO
 
+Scott Munro I think you are missing the point, Krugman was saying, if I remember correctly, that you don't have to break the glass. Typically we are resistant to infrastructure spending unless motivated to do so by disaster. You would get greater net effect if you did the spending without the disaster.
 
+Steve Kappes I am not missing the point. The Broken Window Fallacy works WITHOUT the broken window as well. It all comes down to what Bastiat explained that you need to see both what is seen AND unseen, You see the spending on infrastructure, but what is UNSEEN is what the money WOULD HAVE BEEN SPENT ON had this money not been looted from the taxpayers.

http://freedomkeys.com/window.htm
 
+Scott Munro is spot on. The government doesn't have any money, so whatever it spends it is taking from the private sector (whether now or in the future). If there were a productive use for whatever the government is spending money on, the private sector would do it. Since the private sector isn't doing it, we know that every dollar the government spends is moving from a more productive use to a lesser productive use.
 
That is the hurdle some people can't get over. For the greater good you sometimes need to compel income redistribution.
Some people believe that there is some natural system to economics that will arrive at a blissful conclusion if left
unattended. They believe this even though there is no example in history that would show it to be true. I think of it as being
the same as finding your home on fire. There is a natural process that in the end will see all of the resources in the home
redistributed in a natural way, but it isn't going to be an outcome you are happy with. You would probably step in to
regulate the process.
 
+Clint Fix Hey some excellent points here on G+!

+Steve Kappes So what you are saying is that politicians can spend your money better than you? OK go to any politician you want and write him a check. Please do not ask armed gunmen to show up at my house to override my spending plans.
 
btw +Steve Kappes can you explain to me HOW these politicians attain the wisdom of what projects to spend on?

How do they come to the conclusion that building a new government school is more impotent than my wish to send my kids to a school of my choice?
 
+Steve Kappes The problem is that the government is neither benevolent nor smart enough to be able to help on the net. Market forces and private charity are always better at helping folks that need help. If they touch something, it will create more problems that it fixes.
 
+Clint Fix It amazes me that people fail to realize that government is just a small group of men. How could these men possibly know how to improve the lives of 300 million people, all who have completely different values????
 
+Clint Fix. You said... "Market forces and private charity are always better at helping folks that need help". Yeah, that's only if and when they want to help. Right now, even with government helping, there are so many people who need help now. So where are the market forces? Where are the private charities? Why aren't they stepping up right now? Because government is there? I call BS on that. The fact that there are so many folks that need help right not attests to the fact that market forces and private charity cannot even begin to make a difference. Because in most cases, they do not want to make a difference. Take government out of the picture and there will be ten times as many that need help.
 
+Clint Fix Examples? Would the EPA be an example of a successful government intervention? Mileage requirements for cars? Interstate Highway System? Public Education? The military?
 
Since scott monroe is just a crazy troll I recommend blocking him.
 
+Matt Shalvatis Why don't we have enough private charity right now? The government is crowding out private charity. When people are spending upwards of 50% of their income in taxes (sales, income, property, FICA, etc) there isn't a lot over for private charity. We haven't had anything close to a free market in the U.S. since before 1913.

+Steve Kappes The EPA is a horrible example of successful government intervention. So are mileage requirements. There doesn't need to be a law to increase mileage requirements - if the public thinks it's important enough, they'll vote with their dollars. Public education is laughable in this country. Aren't you embarrassed to even talk about that being successful? Federal grants/student loans for higher education are the culprit of higher tuition costs. The highway system? This would have happened through private investment (in fact, a lot was). The military - you finally hit on one that is constitutional. However, it's failed in its current form too. It's supposed to defend our country, not be sprawled out into 100+ countries.

Failed government programs that are supposedly "for the common good": Medicare, social security, welfare, USDA, Dept. of Homeland security, FDA, EPA, etc, etc. THey are all hugely wasteful and ineffective.

If a government program doesn't benefit EVERYONE equally, but favors groups of different people it is inherently wrong. The government should not be in the business of picking winners and losers.
 
Ahh, Lew Rockwell. The chief ghostwriter of Ron Paul's investment newsletters. You know, the ones with the highly racist articles. Come on +Scott Munro, you can do better than that. Or maybe you can't.
 
Look, if any of you think more spending and a looser monetary policy is going to fix the economy, you learned nothing from history. Tightening of monetary policy by Harding pulled us out of the crash in 1919-1920 in no time. Hoover spent money and loosened monetary policy like crazy then FDR continued it on an even larger scale and it took many years to rebound (kinda like the recession right now). Bush spent and spent and spent and Obama is doing it on an even larger scale. Result - very slow 'recovery'. The malinvestment in our economy is horrible right now. All the monetary easing is just putting a bandaid on a wound with that crazy flesh eating bacteria in it. Believe Krugman as much as you want, but when you're broke, have no retirement and no job, you'll know why. Btw, Krugman is the one that pushed to create a housing bubble to pull us out of the dot-com crash.
 
Bush's spending was the worst kind, basically taking future tax dollars, putting them in a pile and setting them on fire.
Had it been spent on any number of other things the outcome would have been very different.
 
+Matt Shalvatis first of all that has been blown wildly out of proportion. Secondly, the post was made my Butler Shaffer, who teaches college in California. Thirdly, you are committing the "Genetic" logical fallacy. That's why.
 
Suggested reading:
Economics in One Lesson - Henry Hazlitt
Anything by Bastiat
Anything by Rothbard
The Mystery of Banking - Rothbard
The Price of Everything and The Invisible Heart by Russell Roberts
Anything from Peter Schiff
The Road to Serfdom by F.A. Hayek
Griftopia
The Wealth of Nations - Adam Smith
Gold: The Once and Future Money - Nathan Lewis
Creature from Jekyll Island - Griffin
Anything from Kiyosaki
 
+Steve Kappes I find it funny how you criticize Bush (which he was a terrible president), but yet still want to give the government more power to make decisions with your money. Do you only want the government to have that power when it's someone you agree with in office? What about when there's someone in office that you don't agree with...like Bush? Are you for free markets then?
 
+Clint Fix The system is going to have bad presidents. I'd rather they weren't the ones I voted for but if one doesn't work out, they can be voted out. It is just a feedback mechanism for the market. There is no perfection in the world. I see waste of resources everyday, the private sector is no better at that than the government is.

I'm not actually for giving the government more power than what it currently has, that isn't what this thread is about. This thread is about the fallacy of not using the government's power to sustain the economy in a downturn. In the last couple of bubbles I would have been arguing that the government should have been cooling things down. That is the biggest weakness that I see in our system, we allow the economy to overshoot when damping that response is just as important as smoothing out the declines.
 
There are plenty of countries still embracing this idea that the government is able to accomplish anything. France comes to mind and I'm sure Mr. Krugman can find lucrative employment advising those socialists. In America I have the right to my life, my liberty and my property, the latter of which I carefully preserve for my children and theirs, not anybody else. Every American has the right to do the same but we must all start from where we are and over the course of generations success can be achieved. The U.S. government spends exorbitant amounts of money on myriads of initiatives that have shown no success but rather are detrimental to those they intended to help. Their answer: we need to spend more and since the appetite for borrowing it is fading they will tax us more to continue their failures. It is up to each and every individual to work towards the future of their descendants, that is American. There are plenty of other countries that will decide your future for you. Go there if you are unable to decide your own fate but leave me alone. I have the right to bear arms not for protection from my neighbors but to protect my life, liberty, and property from those in power make up these claims that I need to share my stuff with the slaves they've created. It is shameful to not be able to provide for yourself and doubly shameful if you have a family that is housed, fed and clothed on my dime.
 
+Steve Kappes The private sector is MUCH better at correcting malinvestment than when the government is involved. It's simple...if a company isn't producing goods/services that the public wants at a price they're willing to pay for it, they go out of business. The same is not true for the government. It doesn't have risk to worry about.

Your theory is instead of letting the heroin addict go through withdrawals to ease the pain and give them more heroin. Krugman's idea to fix the dot-com bubble was to ease the pain by creating a housing bubble. His quote in 2002,

"A few months ago the vast majority of business economists mocked concerns about a 'double dip,' a second leg to the down-turn. But there were a few dogged iconoclasts out there, most notably Stephen Roach of Morgan Stanley. As I've repeatedly said in this column, the arguments of the double-dippers made a lot of sense. And their story now looks more plausible than ever.

The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. TO FIGHT THIS RECESSION THE FED NEEDS MORE THAN A SNAPBACK; IT NEEDS SOARING HOUSEHOLD SPENDING TO OFFSED MORIBUND BUSINESS INVESTMENT. AND TO DO THAT, AS PAUL MCCULLEY OF PIMPCO PUT IT, ALAN GREENSPAN NEEDS TO CREATE A HOUSING BUBBLE TO REPLACE THE NASDAQ BUBBLE."

Still want to follow Paul Krugman's advice?
 
+Steve Kappes Then I guess there's nothing more to talk about. You're content with ignoring history and the massive amount of devastation as a result of Krugman's advice.
 
http://news.google.com/newspapers?nid=1129&dat=20020806&id=tqgkAAAAIBAJ&sjid=YHADAAAAIBAJ&pg=4930,4388629

A pointer to the Krugman article. Krugman wasn't advocating a housing bubble, he was repeating a comment that had been made in a discussion of why the economy was behaving as it was. He did correctly state that somehow demand had to be increased for business to continue to invest.

I see that quote is being misused all over the internet. When one side has to fabricate all of their data points it suggests they have no leg to stand on.
 
+Clint Fix +Scott Munro, I don't think either of you realize how Government spending is the lifeblood of our economy. By investing in our country's infrastructure (through "failed" (as you call them) programs such as federal highway grants, public education, flood protection programs, and the list goes on and on) the Government infuses money directly into the economy by putting money in the hands of the people through the jobs created by said programs.

Do you really think life was better before 1913? Do you not know of how big corporations ruled the country in the latter half of the 19th century? How these corporations put profits above all else and paid their workers abysmal wages. How it wasn't until the formation of Labor Unions and the trust busting work by Teddy Roosevelt and others that peoples lives were bettered. Corporations are inherently evil because of their need to profit, which becomes the bottom line; everything else gets thrown aside as insignificant.

How can you say the EPA is irrelevant. You are naive if you think the market would steer towards higher mileage vehicles and a cleaner environment on its own. Why? Because it is cheaper to produce lower mileage vehicles, and conduct business in matters which are detrimental to the environment (China, anyone?). Again, this takes us back to the whole profit is king in the private sector. Without EPA regulations, water quality would be disastrously toxic, undrinkable. Rivers would be ignitable (like in several cases in the mid-west in recent history).

Both of your views of government are extremely twisted. And getting back to the original topic of this thread, how did the USA get out of the great depression in the 1930's? Government spending, and yes, A WAR (sorta sounds like a similar situation as Paul Krugman's example). You are both delusional if you think this Country would be better off without our Government as we know it today. Yes, it can be inefficient, and even wasteful at times, but it is a thousand times better than what a "free market" would lead too.
 
+Hans Carota Wow, this amount of nonsense could keep me busy for weeks!

Let's just focus on this first:

how did the USA get out of the great depression in the 1930's? Government spending, and yes, A WAR (sorta sounds like a similar situation as Paul Krugman's example).
- Hans

Here are facts:

1) The New Deal never got the economy out of the depression. (15% unemployment in 1940)

2) WW2 Never got the economy out of the Depression.

3) Massive spending cuts, tax cuts, and decontrol of the economy in 1946 ended the Depression.

Hans, please tell us how we got out of the 1921 depression.
 
Infrastructure is one thing and if money wasn't being wasted on things the government has no business meddling in, it wouldn't be a problem. Before there was a DOE, we were number one in the world scholastically. Now that billions of dollars have been spent on making our eduaction system better, we are number 21. GOOD JOB. Welfare, unemployment, job training, food stamps, have not lowered the number needing them, it has increased to the point where half our population is supported by the other half. After billions of dollars on the war on drugs, there has been zero effect. Drugs are as plentiful and as widely used as ever. I can do this all day, the government operating outside its constitutional authority always fails. Where the government went astray is when it forgot that whatever is does must apply equally to all citizens. Taking my money and giving it to someone else thereby creating a dependent is not equal nor within the definition of promoting the general welfare. Def. general welfare - of no group or class.
 
+Scott Munro please tell us what caused the Great Depression. Please tell us what caused the Great Recession.

Oh wait, I know this one, the belief in a free market and the subsequent deregulation of said market.

I misspoke before: What got this country out of the Great Depression? Government spending and, oh wait...the War (my previous comment made it sound like the war was in the 1930's, but we all know it was in the 40's ;) ).

To borrow from Wikipedia:
"America's entry into the war in 1941 finally eliminated the last effects from the Great Depression and brought the U.S. unemployment rate down below 10%"

And again:
"The common view among mainstream economists is that Roosevelt's New Deal policies either caused or accelerated the recovery, although his policies were never aggressive enough to bring the economy completely out of recession."

You don't get out of 20+% unemployment in the blink of an eye.
 
Still wating on the 1920-21 depression. How did we get out of it???????
 
+Hans Carota I think you're ignoring the 1920-1921 depression. Everytime the government has attempted stimulus during a major downturn it has prolonged it. During the great depression you had Hoover and FDR stimulating like crazy and in the great recession you had Bush and now Obama stimulating at a level never seen before. The result in both of those cases...a long and painfull downturn. Compare that to how Harding handled the downturn in 1920:

"We will attempt intelligent and courageous deflation and strike at the government borrowing which enlarges the evil. We promise that relief which will attend the halting of waste and extravagance, and the renewal of the practice of public economy, not alone because it will relieve the burdens, but because it will be an example to stimulate thrift and economy in private life.

Let us call to all the people for thrift and economy, for denial and sacrifice if need be, for a nationwide drive against extravagance and luxury, to a recommittal to simplicity of living, to that prudent and normal plan of life which is the health of the republic. There hasn't been a recovery from the waste and abnormalities of war since the story of mankind was first written, except through work and saving, through industry and denial, while needless spending and heedless extravagance have marked every decay in the history of nations."

Harding paid off the war bonds slashing the national debt by 1/3. Thomas Woods wrote about it saying,

"The Federal Reserve's activity, moreover, was hardly noticeable. As one ecnomic historian puts it, "Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction." By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down from 11.7 percent in 1921 to 6.7 percent at it was only 2.4 percent by 1923."

This sounds like a much faster recovery than 3+ years at 8%+ unemployment with the largest ever monetary stimulus ever embarked upon.

Compare the 1920-1921 depression to the great depression. From 1920 to 1921, the stock-market dropped by 47% and unemployment doubled. By the end of 1922 the dow ws back above 100. Even Keynesian Robert Gorden said about the recovery, "Government policy to moderate the depression and speed recovery was minimal. The federal reserve authorities were largely passive... Despite the absence of stimulative government policy, however, recovery was not long delayed."

It's amazing what you can learn from history.

Savings and thrift will fix an ailing economy, not wreckless spending.

BTW, consumer spending levels returned to pre-recession levels in May of 2010! Why is the recovery still absent?!

History can probably shed some light on the reason if you'd study it.
 
+Hans Carota Krugman failed to see the housing market debacle, even after championing increasing spending in the housing sector to create it. I think it's a bit...well...stupid to use him as a credible source for economics. He's the same guy that thinks that a hurricane destroying a city boosts the economy. Other sources would be cool instead of Krugman and all his infinite wisdom.
 
+Clint Fix Of course, except that Krugman did none of those things. I've followed his column for years and he has been right on everything I can recall. Now, if you take sentences in his columns out of context like you are doing, you can paint any picture you like.
 
+Steve Kappes Show me an article from Krugman from between 2003-2005 warning of a housing bubble. And which part of the column from him that I posted is taken out of context? The part where he recommends that we increase housing ("To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment, and to do that...Alan Greenspan needs to create a housing bubble to replace the nasdaq bubble.").

Also, what do you think about Krugman's ideas that natural disasters like hurricanes somehow better the economy?
 
Oh +Hans Carota I figured that I should point out that it wasn't WWII that brought us out of the depression, but the 60% drop in government spending (wasted spending on war) at the end of the war that allowed for a recovery.
 
+Clint Fix Dude, I read his column, I don't catalog them. If you read the article with the line about needing soaring household spending, you can't possibly draw the conclusion from it that you do. He was simply writing something about the state of the economy at that time. As far as I could see he wasn't saying anything more than that what people were talking about probably was not going to work.
 
"crowding out?" yeah there's so much "crowding out" going on at the moment. Businesses are just clamoring to fill the gaps in the economy but are being crowded out by government spending.

</sarcasm>

same libertarian mantra regardless of economic circumstance. 
 
+Clint Fix I see no reason to read your crazy libertarian talking points, and see no hope for you seeing your way out of the bubble of unreality you choose to live in, and you are also hereby blocked.
 
Sorry, I edited my last post a couple of times, but I think the point is still the same.
 
Quick google search on Krugman on the housing bubble. There are a ton of links misusing the line about advocating for a housing bubble, apparently Krugman hits a nerve with some people. Here is a link of an interview from 2006 in which he comments that the US is in a housing bubble that is going to eventually burst.

Krugman on the US housing bubble

Oddly, he seems to think this is a negative thing rather than something he advocated for. :)
 
No, he didn't advocate for it. It is all over the web that he did, all of which go back to that one article from what I have seen. Even if the article was interpreted correctly, which it is not, one sentence in all of his articles over nearly a decade wouldn't really qualify as advocating.
Like I said, he really hits a nerve in some crowds.
 
And most of them probably have never actually read or watched anything directly in context. Like the the two libertards I just blocked, they believe and fear the stuff they've read or heard about in their hermetically sealed right wing bubble where he is the bogeyman liberal extreme liar.
 
Yes Krugman called the bubble but those folks prefer Peter Schiff who called the bubble from the Austrian school perspective.

There's no point mentioning that Krugman has been consistently correct on countless issues for two decades. The main one being that we are in danger of repeating Japan's mistakes of the 1990s.
 
Re the Austrian school, a stopped clock is occasionally right every now and then. But I'd think most would agree that Krugman's methods give much more reliable results. I wish Barack Obama would listen more actively.
 
Yes, it is funny to see people just making stuff up, acting like they don't know any better.
It would be really funny if people weren't using that mis-information to ruin so many lives.

What is so special about gold? why not base the monetary system on shark's teeth? Wealth is completely different than
the money supply.
 
my question is how anyone wearing a tie dye can have such pro-corporate views! Sort of betrays the principles of freedom and grassroots that tie dyes represent. Oh well, I guess some folks just give up and sell out at some point in their ives!
 
Let me get this straight. I am the guy that wants to allow all people to have the FREEDOM to choose what they uses as money..... I am against freedom lol!

Here is a thought experiment for you. Let's take a time machine back to 1913. You guys are pro- Rockefeller/ Morgan. I am against! Lmao
 
Gold is pretty, it doesn't rust so it makes great coinage, and it's rare. But It won't be rare if the asteriod mining consortium is successful, since asteroids will contain much more of it than the earth's crust, which only has trace amounts from later impacts that became part of the upper crust, but most of the gold from the molten stage of the earth migrated to the core since it is so heavy.

These days gold is more valuable for its unique properties in electronic devices than for decoration and there just ain't enough of it any more to back up all of the currencies on earth.


My roommate isn't very political but he started talking how money was debased because we aren't on the gold standard. I was taken somewhat aback by this (he isn't a winger at all). A lot of people must believe this (I did myself at one time) and are so angry about it that you can't take them through all of the many reasons why we can't go back to the gold standard.

(fixed typos)
 
+Scott Munro taxation is the price we pay to live in a civilized society. Your economic theories would lead to even greater corporate tyranny than that which already exists. You don't like public roads and parks, fine, move to Somalia.
 
+Ole Olson I'm not sure what you're responding too here since I blocked Scott Monro. But I see no reason to keep on talking to trolls like him that aren't really here to discuss issues. They are trying to dump their favorite talking points and extreme hatred of Paul Krugman on a reasonable discussion. Their lack of intellectual curiousity and unwillingness to independently verify facts -- like stuff they read about Paul Krugman - rather than actually reading his articles themselves makes it a waste of time to try to persuade them otherwise.
 
Haha were we talking about taxation? I thought we were talking about the central counterfeiting operation of the USSA. 
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