All posts tagged Paul Krugman

The Fight Against Oligarchy: “Don’t Give Up Hope On This”

Recently a Republican candidate for the U.S. Senate in South Dakota (unfortunately Democrat Tim Johnson is retiring), a doctor of medicine for God’s sake, posted on her Facebook page the following viral image with a typical Tea Party message:

How hilarious. A real knee-slapper.

That a doctor, who says that “God is calling her to serve a higher purpose and to fight back against an intrusive federal government,” would subscribe to such stupidity—military families are increasingly using food stamps and 83% of the money spent on the food stamp program goes to households with “a child, an elderly person or a disabled person”—says either a lot about the God she worships or about the God she wants to worship or about how evangelical Christianity mixed with Republican politics can stain the mind with a glorious Technicolor of ungodliness.

Sadly, the idea behind that viral message is shared not only by a lot of Republican candidates and politicians holding office, but a lot of average folks, some of whom benefit from government programs, like the food stamp program, and some of whom will not walk but run to a polling place in November and gladly vote for people like this doctor-candidate in South Dakota.

Why is that?

Let’s start with Thomas Piketty, whose 700-page book, “Capital in the Twenty-First Century,” is all the rage. Piketty’s book, which essentially is a look at the changes in the concentration of wealth over time, has surprised a lot of people, including the venerable liberal economist Paul Krugman. Here’s what he said to Bill Moyers (I highly recommend watching or reading the entire interview):

BILL MOYERS: Inequality’s been on the table for a long time. You’ve written extensively, others have, too. I mean, it’s a familiar issue, but what explains that this book has now become a phenomenon?

PAUL KRUGMAN: Actually, a lot of what we know about inequality actually comes from him, because he’s been an invisible presence behind a lot. So when you talk about the 1 percent, you’re actually to a larger extent reflecting his prior work. But what he’s really done now is he said, “Even those of you who talk about the 1 percent, you don’t really get what’s going on. You’re living in the past. You’re living in the ’80s. You think that Gordon Gekko is the future.”

And Gordon Gekko is a bad guy, he’s a predator. But he’s a self-made predator. And right now, what we’re really talking about is we’re talking about Gordon Gekko’s son or daughter. We’re talking about inherited wealth playing an ever-growing role. So he’s telling us that we are on the road not just to a highly unequal society, but to a society of an oligarchy. A society of inherited wealth, “patrimonial capitalism.” And he does it with an enormous amount of documentation and it’s a revelation. I mean, even for someone like me, it’s a revelation.

BILL MOYERS: I was going to ask, what could– what has Paul Krugman had to learn from this book?

PAUL KRUGMAN: Even the title, the first word in the title, “capital.” We stopped talking about capital. Even people like me stopped talking about capital because we thought it was all about human capital. We thought it was all about earnings. We thought that the wealthy were people who one way or another found a way to make a lot of money.

And we knew that that wasn’t always true. We knew that in the Gilded Age or in the Belle Époque in Europe, which he prefers to talk about. That high incomes were mostly a result of having lots and lots of assets. But we sort of said, “Well, that’s not the way things work anymore.” And he says, “Oh yeah? It turns out that you’re wrong.” That’s true, that right now, a lot of high incomes in America are people who didn’t start out all that rich. But we’re rapidly moving towards a state where inherited wealth dominates. I didn’t know that. I really was– I should’ve known it. I should’ve thought about it, but I didn’t. And so then here comes this book with– I mean, it’s beautiful– absolutely analytically beautiful, if that makes any sense at all.

BILL MOYERS: As you know, I’m no economist, but I found this book, as I said in the opening, just very readable and suddenly there would be this moment of epiphany.

PAUL KRUGMAN: Yeah, it’s a real “eureka” book. You suddenly say, “Oh,
this is not– the world is not the way I saw it.” The world in fact has moved on a long way in the last 25 years and not in a direction you’re going to like because we are seeing not only great disparities in income and weakrugman on moyerslth, but we’re seeing them get entrenched. We’re seeing them become inequalities that will be transferred across generations. We are becoming very much the kind of society we imagine we’re nothing like.

BILL MOYERS: Here’s Piketty’s main point: capital tends to produce real returns of 4 to 5 percent, and economic growth is much slower. What’s the practical result of that?

PAUL KRUGMAN: What that means is that if you have a large fortune, or a family has a large fortune, they can — the inheritors of that large fortune — can live very, very well. They can live an extraordinary standard of living and still put a large fraction of the income from that fortune aside and the fortune will grow faster than the economy.

So the big dynastic fortunes tend to take an ever-growing share of total, national wealth. So once you– when you have a situation where the returns on capital are pretty high and the growth rate of the economy is not that high, you have a situation in which not only can people live well off inherited wealth, but they can actually pass on to the next generation even more, an even a higher share.

And so it’s all, in his terms, “r” the rate of return on capital, and “g” the rate of growth of the economy. And when you have a high r, low g economy [r > g], which is what we now have, then you’re talking not– you’re talking about a situation in which dynasties come increasingly to increasingly to dominate the top of the economic spectrum and a tiny fraction of the population ends up very dominant.

Not only does that “tiny fraction of the population” dominate the economic spectrum, but those same folks are dominating the media, with messages like the one spread by our Christian Republican candidate in South Dakota. Krugman says that,

…there’s a very effective apparatus of TV and print media and think tanks and so on who hammer against any suggestion of redistribution. It’s just, they’ve managed to convince a lot of people that it is somehow un-American.

Which actually, if you look at American history, that’s not all true. But they– it’s just been pushed very hard. I think also the United States, look, we have to admit, race is always lurking under almost everything in American life. And redistribution in the minds of a lot of people means taking money from people like me and giving it to people who don’t look like me…

That media “apparatus” is how a lot of people, who are either benefiting from government programs or who would benefit from an expansion of government programs, become sympathetic to that “don’t feed the humans because they’ll grow dependent on government” meme represented by that ridiculous viral image spread by a doctor who wants a seat in the U.S. Senate. Average folks are being manipulated by the moneyed class, a class of people who somehow feel oppressed:

BILL MOYERS: You wrote something the other day that’s hard to forget. You said, “We live in such an ugliness in America right now.”

PAUL KRUGMAN: Yeah. This is one of the things that puzzles me actually about my own country, which is it’s one thing to have disparities of income and wealth and to have differing views about what we should be doing about it. But there’s a level of harshness in our debates mostly coming from the people who are actually doing very well.

So, you know, we’ve had a parade of billionaires whining about being– you know, the incredible injustice that people are actually criticizing them. And then comparing anyone who criticizes them to the Nazis. You know, it’s almost a tic that they have. This is– this is very strange. And it’s kind of scary because, you know, it’s one thing if someone without a lot of power seems to be going off and into a rage for no good reason. But these are people who have a lot of influence because of the amount of money they control.

Influence. Money buys influence. It always has and, thanks to the Supreme Court, it can buy more influence than ever. Here is one definition of influence:

the capacity to have an effect on the character, development, or behavior of someone or something…

That is why we find so many average people supporting candidates who perpetuate such hateful nonsense about food stamps and government dependency—and who perpetuate the myth that we all can have the American Dream, if we’ll just keep working our asses off at two or three jobs and keep our heads down and our mouths shut. These average folks are actually doing the bidding of billionaires.

Obviously, if the rich have the means and the permission to buy tons of influence and thus effect the “character, development, or behavior” of people, the very idea of democracy is undermined. If what we see going on right before our eyes continues, we are just kidding ourselves that “we the people” actually rule.

But regular readers know that I try to find hope in and for the future and refuse to say that all of this depressing stuff dooms us forever. Refreshingly, Paul Krugman does the same:

BILL MOYERS: Given what you just said and given the fact that there’s this ugliness, what do you think it’s going to take? A mass uprising? Consistent demonstrations? Insurgent politics? How are we going to stem the tide that he says is taking us into oligarchy?

PAUL KRUGMAN: There’s a negative and there’s a positive take. Piketty argues — seems to argue through much of the book that we only escaped the old oligarchy for a while thanks to really disastrous events. Thanks to wars and depressions, which disrupted the system. That’s an argument you can make.

On the other hand, if you read histories of the New Deal, you know that it didn’t come– it didn’t spring out of nowhere. That we had a progressive movement and a lot of proto New Deal programs building for quite a long time.

There was, in fact, a move in America. There was an increasing political, philosophical readiness to take on inequality of wealth and power long before FDR moved into the White House. And so, I think there are better angels of our nature. That there is this ugliness which can be frightening. But there is also a redemptive streak in — here and in other places.

And that– don’t give up hope on this. That given consistent argumentation, given events, and perhaps you know, as people become more aware of what is actually going on, then there is a chance of changing things. Do we know that? No. But there’s nothing in what we know now that says you should give up hope of being able to change this even without a catastrophe.

If it is any consolation, and I admit it isn’t much, the doctor in South Dakota who posted that ignorance-inspired message on Facebook is losing in the polls. The problem is she is losing to a Republican man who will likely be the next U.S. Senator from South Dakota, former governor Mike Rounds, who right-wingers are accusing of being a RINO on repealing the Affordable Care Act, and who said in response,

Obamacare is bad for the country and I have always opposed it.

I didn’t say it would be easy to keep hoping.

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by R. Duane Graham on May 5, 2014  •  Permalink
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Posted by R. Duane Graham on May 5, 2014

https://duanegraham.wordpress.com/2014/05/05/the-fight-against-oligarchy-dont-give-up-hope-on-this/

Plutocratic Paranoia

Paranoia strikes deep
Into your life it will creep
It starts when you’re always afraid
Step out of line, the man come and take you away

—Stephen Stills, “For What It’s Worth“

In a God-fearing, if not God-ordered, world, one would think that when a billionaire, worried about “a rising tide of hatred of the successful one percent,” stupidly compared progressive critiques of wealth inequality in America to “fascist Nazi Germany,” that reputable institutions, say, like The Wall Street Journal, would have the sense to unequivocally condemn such outrageous nonsense.

Nope. Not only did the Journal publish this disgruntled plutocrat’s letter about a week ago, today we find that the paper’s editorial writers, always happy apologists for our emerging plutocracy, have now become defenders of plutocratic paranoia. Oh, there was the gentle admission that one ought to be more careful in one’s use of comparisons to Nazi Germany, but the real condemnation was saved for what the writers called “the politics of economic class warfare,” which is how the rich right views any criticism of the one-percenters gobbling up most of the bennies the economic recovery has handed out the past four years or so.

Paranoia is striking deep into the hearts of some of America’s wealthiest folks and the ideological defenders of an out-of-adjustment economic system. Perhaps they are starting to believe that liberal critiques of what has been happening for the last 35 years are beginning to resonate with the electorate. Why else would the WSJ editorialists end their defense of the disgruntled plutocrat by falsely saying that liberals are “promoting personal vilification and the abuse of government power to punish political opponents”?

In any case, back to reality. Paul Krugman published a piece a few days ago that addressed the billionaire’s comparison of progressivism to fascism, but he went much further:

Anyway, thinking about this sort of thing makes me realize that there’s a danger, especially for progressives, of confusing the proposition that Obama’s billionaire haters are stark raving mad — which is true — with the proposition that Obama has done nothing that hurts the plutocrats’ interests, which is false. Actually, Obama has been tougher on the one percent than most progressives give him credit for.

Oh, I know that some lefties don’t want to hear it, but Krugman, who has been somewhat critical of President Obama over the years, has some facts to back up what he is saying:

Start with taxes. The Bush tax cuts haven’t gone completely away, but at the very high end they have been pretty much reversed; plus there are additional high-end taxes associated with Obamacare. The result is that taxes on wealthy Americans have basically been rolled back to pre-Reagan levels:

Meanwhile, financial reform looks as if it will have significantly more teeth than expected.

So the one percent does have reason to be upset. No, Obama isn’t Hitler; but he is turning out to be a little bit of FDR, after all.

That chart (which was lifted from an excellent article written by the Atlantic’s Jordan Weissmann) along with Krugman’s remark about the unexpected “teeth” in financial reform (“Dodd-Frank“) may explain why some billionaires, who should have nothing in the world to complain about—what good is all that dough, if you are still afraid of the rabble?—would resort to Nazi references when talking about liberals criticizing them. They feel victimized. Yep. Victimized.

Matthew O’Brien, in a piece titled, “Why Do the Super-Rich Keep Comparing Obama to Hitler?” referenced an occasion during Obama’s first term in which some really wealthy folks, including some of those Obama had referred to late in 2009 as “a bunch of fat cat bankers on Wall Street,” leaned on Obama’s campaign manager, Jim Messina, for a little love from the President. Messina was in New York looking for campaign money—since Obama had done very well among Wall Streeters in 2008—and The New York Times described what happened:

For the next hour, the donors relayed to Messina what their friends had been saying. They felt unfairly demonized for being wealthy. They felt scapegoated for the recession. It was a few weeks into the Occupy Wall Street movement, with mass protests against the 1 percent springing up all around the country, and they blamed the president and his party for the public’s nasty mood. The administration, some suggested, had created a hostile environment for job creators.

Messina politely pushed back. It’s not the president’s fault that Americans are still upset with Wall Street, he told them, and given the public’s mood, the administration’s rhetoric had been notably restrained.

One of the guests raised his hand; he knew how to solve the problem. The president had won plaudits for his speech on race during the last campaign, the guest noted. It was a soaring address that acknowledged white resentment and urged national unity. What if Obama gave a similarly healing speech about class and inequality? What if he urged an end to attacks on the rich? Around the table, some people shook their heads in disbelief.

“Most people in the financial world,” a top Obama donor later told me, “do not understand how most of America feels about them.” But they think they understand how the president’s inner circle feels about them. “This administration has a more contemptuous view of big money and of Wall Street than any administration in 40 years,” the donor said. “And it shows.”

How a group of people with more money than Allah could feel victimized by Obama or any other slightly left-of-center Democrat is beyond me. Perhaps they are starting to hear too many comparisons they don’t like. Maybe they don’t like it when they hear, as it was recently reported, that “The 85 richest people in the world now have as much money as the 3.5 billion poorest put together.”  Or maybe they don’t like it when they hear Paul Krugman’s latest comparison, which he presented yesterday on NPR’s All Things Considered:

I just had my favorite statistic of this morning. The top 40 hedge fund managers in America earned as much as 300,000 schoolteachers in 2012. So that gives you an idea of how unequal a society we’ve become.

You can see where that might ring with a sting in the ears of those “top 40 hedge fund managers,” sort of like a Hitler comparison rings in the ears of a liberal.

But let’s be clear here. No one, at least no one that I know, is talking about “punishing” rich people. It’s not a bad thing that hard work and innovation is rewarded over sloth and foolishness. As Krugman said on NPR:

Nobody thinks that we should be a society without monetary incentives. No one thinks that we should have exact equality or even anything close to that. The point, however, is that our notion of what kind of society we should be, I think, is something like the kind of society we actually were 30, 40 years ago where we had a broad middle class, where the gap between people at the top and the average or the median American was not that large.

See? There’s no need for those hyper-sensitive, fraidy cat billionaires to go all Hitler on us.

Finally, even though there is a rather robust defense of plutocratic paranoia going on among some conservatives, there is some evidence that even Republicans are starting to get the message that the inequalities we see among us threaten our stability as a nation, or, more likely, they are starting to think that such inequalities threaten their electoral prospects as a national party. They are starting to talk about the issue, even though they largely blame it on Obama, and offer as solutions the same old tax-cutting, trickle-down, anti-regulatory nonsense.

But at least for now the issue is front and center and that’s not a bad thing.

by R. Duane Graham on January 30, 2014  •  Permalink
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Posted by R. Duane Graham on January 30, 2014

https://duanegraham.wordpress.com/2014/01/30/plutocratic-paranoia/

Ben Bernanke Channels Paul Krugman

I have been watching Ben Bernanke, chairman of the Federal Reserve Board, testify this morning before the Senate Banking Committee.

He has sounded a lot like Paul Krugman.*

Krugman, an economist of distinction who also happens to be a liberal, has been telling anyone who will listen that all the scary talk about the national debt is misplaced, considering that we have a genuine jobs crisis going on right now.

Bernanke said this morning:

High unemployment has substantial costs, including not only the hardship faced by the unemployed and their families, but also the harm done to the vitality and productive potential of our economy as a whole.

Ya think? He also said—again sounding like Paul Krugman:

In terms of the near-term recovery, there is a sense in which monetary and fiscal policy are working at cross purposes. To some extent, the fiscal policy decisions being made are mismatched with the timing of the problem. The problem is a longer-term problem, and should be addressed over a longer time frame in a way that, to the extent possible, it does no harm to the ongoing recovery.

In other words, the actions of Congress (fiscal policy—focusing only on long-term debt) are working against the Fed’s actions (monetary policy—buying government bonds now in order to help stimulate the economic recovery) and the result of those “cross purposes” is sluggish growth and needlessly high unemployment.

Now, we have to ask ourselves: Why would congressional Republicans, who are leading the charge when it comes to ginning up fear over our long-term debt problems, want to work against the economic recovery?

You can supply your own answer to that question. Suffice it to say here that we not only have most economists in the country saying it, including Paul Krugman, we now have clearly on the record the chairman of the Federal Reserve Board saying it too: Stop worrying so much about the future and concentrate on the now. There are still a lot of folks suffering from the Great Recession.

As for the dreaded sequestration, Bernanke supported the Congressional Budget Office’s “reasonable estimate” that the automatic $1.2 trillion spending cuts due to begin on Friday will dampen economic growth in 2013 by 0.6% and cost 750,000 jobs.  He also said that, in terms of the effects on economic growth, it didn’t matter much how the cuts were made, whether judiciously or injudiciously. That’s simply too much money to extract from the economy in the short term, even though “the sequestration takes place over time” and its impact “would probably build over a period of months.”

Bernanke also made a point about the constant battles over fiscal policy, what with cliffs, sequestration, and continuing budget resolutions, which cause enormous amounts of uncertainty for everyone and which Republicans use as devilish leverage to drastically cut spending. He said:

Uncertainty itself is costly.

Yes, the uncertainty created by hostage-taking Republicans, again and again, is costly, even though no one can exactly quantify it. But I doubt even the Fed chairman, trying to talk sense to the kidnappers, will help.

Ultimately, the American people will have to send the kidnappers a message because, in our democracy, the people are, paradoxically, both the hostages and the hostage rescuers.

_______________________________

* Even though the two players have had their disagreements in the past.

by R. Duane Graham on February 26, 2013  •  Permalink
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Posted by R. Duane Graham on February 26, 2013

https://duanegraham.wordpress.com/2013/02/26/ben-bernanke-channels-paul-krugman/

Austerity Doctors Warn: If We Don’t Stop Spending We’ll Go Blind!

I have seen and heard countless Democrats, including President Obama, make the case that allowing sequestration to happen next week is bad for the country, from jeopardizing our military readiness to damaging our ability to conduct medical research.

However, none of the scary stories that Democrats tell reporters, who then tell the public, are working to change the minds of Republicans, many of whom have actually decided that sequestration is the best cure for what ails the country.

Haley Barbour, former governor of Mississippi and a man who once chaired the Republican National Committee, is one of those Republicans—let’s call them “austerity doctors”—who want to fix the patient by hurting the patient.

National Review.com reported yesterday:

...Haley Barbour says he expects the GOP to allow sequestration to occur, and that the party should see it as an important step toward fiscal responsibility. “I hope and believe that Republicans will allow the sequestration to go into effect, so that we can start down a path of trying to get control of spending and reduce the deficit,” Barbour explained on Fox Business Network’s Cavuto…

These austerity doctors are so worried about the deficit that they are willing to do almost anything to get Americans to stop what Republicans see as our bad habit of pleasuring ourselves with federal dollars.

All of which reminds me of another doctor who tried to do what he thought was right by using rather strange techniques to get Americans to stop pleasuring themselves.

John Harvey Kellogg is most famous for co-inventing the breakfast cereal Corn Flakes in 1895. But he also had a medical degree and ran a sanitarium in Battle Creek, Michigan, owned by the Seventh-day Adventist Church. And he also held what we regard today as bizarre opinions about, well, I’ll let Wikipedia say it:

He was an especially zealous campaigner against masturbation.

Self-pleasure, according to the theologically-minded doctor, was self-destructive:

Kellogg strongly warned against the habit in his own words, claiming of masturbation-related deaths “such a victim literally dies by his own hand,” among other condemnations. He felt that masturbation destroyed not only physical and mental health, but the moral health of individuals as well.

Dr. Kellogg thought that masturbation caused cancer, epilepsy, insanity, and, according to Wikipedia, “dimness of vision.” Yep. Keep it up and you’ll go blind.

Given the doctor’s views, something had to be done to fix things:

Kellogg worked on the rehabilitation of masturbators, often employing extreme measures, even mutilation, on both sexes. He was an advocate of circumcising young boys to curb masturbation and applying phenol (carbolic acid) to a young woman’s clitoris.

He also creatively applied “one or more silver sutures” to the penis in order to make erections “impossible,” therefore,

the slight irritation thus produced acts as a most powerful means of overcoming the disposition to resort to the practice.

This guy was serious:

He also recommended, to prevent children from this “solitary vice”, bandaging or tying their hands, covering their genitals with patented cages and electrical shock.

In his Ladies’ Guide in Health and Disease, for nymphomania, he recommended “Cool sitz baths; the cool enema; a spare diet; the application of blisters and other irritants to the sensitive parts of the sexual organs, the removal of the clitoris and nymphae…“

In Teaching America About Sex: Marriage Guides and Sex Manuals from the Late Victorians to Dr. Ruth , the authors, M.E. Melody and Linda Peterson, try to explain Dr. Kellogg’s work:

Kellogg certainly was not deluded. Part of the American tradition includes a view of a righteous God who punishes moral transgressions. In Kellogg’s view, these transgressions are acts of treason against divine governance and, hence, call for decisive responses. Though his teaching about masturbation seems extreme, the act must be understood as rebellion against divine governance, an ostensibly minor event that can, if amplified, cause the destruction of nations.

Masturbation can cause “the destruction of nations”? I remind you that Speaker John Boehner told a gathering of religious broadcasters two years ago:

Yes, this debt is a mortal threat to our country.

If all this is a little too much for you, good. It’s too much for me too. I share with you Dr. Kellogg’s zeal against onanism because I see a similar zeal among Republicans regarding, as I said, what they see as our national bad habit of pleasuring ourselves with federal dollars. They want to stop it, and if it means using the fiscal equivalents of silver sutures and carbolic acid and cool enemas and a spare diet—the sequester—then so be it.

Meanwhile, economist Paul Krugman—who has been under fire from the austerity doctors on TV and radio and in print—has exactly the right take on the sequestration mess:

The right policy would be to forget about the whole thing. America doesn’t face a deficit crisis, nor will it face such a crisis anytime soon. Meanwhile, we have a weak economy that is recovering far too slowly from the recession that began in 2007. And, as Janet Yellen, the vice chairwoman of the Federal Reserve, recently emphasized, one main reason for the sluggish recovery is that government spending has been far weaker in this business cycle than in the past. We should be spending more, not less, until we’re close to full employment; the sequester is exactly what the doctor didn’t order.

by R. Duane Graham on February 22, 2013  •  Permalink
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Posted by R. Duane Graham on February 22, 2013

https://duanegraham.wordpress.com/2013/02/22/austerity-doctors-warn-if-we-dont-stop-spending-well-go-blind/

Fundamentalist Politics

“Faith is…the evidence of things not seen.”

—Hebrews 11:1

Paul Krugman’s latest column is very kind to conservative Republicans, calling them,

The Ignorance Caucus

Ignorance, you know, is curable. And some of us think that what ails the Republican Party these days is not so curable. Krugman was sort of taking it easy on them.

In any case, he pointed out a few things that should scare all thinking people:

Last year the Texas G.O.P. explicitly condemned efforts to teach “critical thinking skills,” because, it said, such efforts “have the purpose of challenging the student’s fixed beliefs and undermining parental authority.”

On Eric Cantor’s “major policy speech” last week, Krugman said,

when giving a speech intended to demonstrate his openness to new ideas, Mr. Cantor felt obliged to give that caucus a shout-out, calling for a complete end to federal funding of social science research. Because it’s surely a waste of money seeking to understand the society we’re trying to change.

Krugman adds:

the entire National Science Foundation budget for social and economic sciences amounts to a whopping 0.01 percent of the budget deficit.

In his speech, Cantor said he supported medical research, but Krugman points out that,

he and his colleagues have adamantly opposed “comparative effectiveness research,” which seeks to determine how well such treatments work.

The federal government, since it runs a rather large health insurance program—Medicare—and since it partners with the states to run another rather large insurance program—Medicaid—and since it operates a rather large health care system—the Veterans Health Administration—might be interested in the comparative effectiveness of health care treatments. But Republicans, preferring ignorance and thus incompetence, want to keep government in the dark.

On climate research, Krugman notes the usual attempts by Republicans to kill it. And even when they don’t kill it, even when they consent to some meager research, they still can’t help themselves from asserting their fondness for ignorance:

Republicans in the State Legislature have specifically prohibited the use of the words “sea-level rise.”

That would be like trying to assess the dangers of playing football but prohibiting the use of the words “brain damage.”

Here’s more conservative-embraced ignorance via Krugman:

House Republicans tried to suppress a Congressional Research Service report casting doubt on claims about the magical growth effects of tax cuts for the wealthy.

On guns and violence:

…back in the 1990s conservative politicians, acting on behalf of the National Rifle Association, bullied federal agencies into ceasing just about all research into the issue.

Why should Republicans fear knowing things? Because knowing things is often an enemy of fixed beliefs. And the GOP has a lot invested in those fixed beliefs. Related to that, Krugman hits on something of fundamental importance that all Americans need to make an attempt to understand because it is responsible for much of the lack of progress we see:

The truth is that America’s partisan divide runs much deeper than even pessimists are usually willing to admit; the parties aren’t just divided on values and policy views, they’re divided over epistemology. One side believes, at least in principle, in letting its policy views be shaped by facts; the other believes in suppressing the facts if they contradict its fixed beliefs.

Epistemology is a big but necessary word because it is critical to our advancement as individuals and society. Epistemology comes to us from philosophy, and all philosophers by the nature of their discipline have, or should have, something to say about it. In short it is “the theory of knowledge,” which involves thinking about what “knowledge” is, how we get it, how we know it is genuine—heck, if even there is such a thing as “genuine” knowledge.

Krugman referenced the Texas Republican Party’s rejection of critical thinking skills. He wasn’t kidding. Here is the original language in the party’s 2012 platform:

Knowledge-Based Education – We oppose the teaching of Higher Order Thinking Skills (HOTS) (values clarification), critical thinking skills and similar programs that are simply a relabeling of Outcome-Based Education (OBE) (mastery learning) which focus on behavior modification and have the purpose of challenging the student’s fixed beliefs and undermining parental authority.

What Texas Republicans did was advance their own theory of knowledge, their own epistemology, which has “fixed beliefs.” And their theory of knowledge is based on the following, also part of their platform:

Traditional Principles in Education – We support school subjects with emphasis on the Judeo-Christian principles upon which America was founded and which form the basis of America’s legal, political and economic systems. 

This Republican epistemology—which has authoritarianism and inerrant biblical religion at its core—is not limited to Texas Republicans, although they feel free enough in that state to unabashedly share it with the rest of us. The theory of knowledge that says there are fixed beliefs that critical thinking should not explore is a feature of all fundamentalist religion, and, sadly, it is today a feature of what we can confidently call fundamentalist politics.

And whether we call it ignorance or something else, we have to recognize that fundamentalist politics represents a threat to our progress and our national well-being.

by R. Duane Graham on February 11, 2013  •  Permalink
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Posted by R. Duane Graham on February 11, 2013

https://duanegraham.wordpress.com/2013/02/11/fundamentalist-politics/

What You May Not Know About The Debt But Should

“Can we now start talking about unemployment?”

—Paul Krugman

for almost four years now, we have argued back and forth on this blog about deficits and debts and jobs.

My position, and one that seems stunningly obvious to me, has always been that jobs and the economic recovery deserve precedence over debt reduction, even though long-term debt is a problem that has to be addressed.

For those of you who don’t follow Brad DeLong, the professor of economics from Berkeley, you are missing something valuable in the debate you see on television or read in the paper every day, almost all of that debate focused solely on deficit reduction. (Go here and read DeLong’s bona fides, if you think he’s just another liberal economist.)

Sunday, DeLong posted a blog entry with the title,

NO, WE DON’T REALLY NEED ANY MORE DEFICIT REDUCTION UNTIL 2020

He borrowed from Paul Krugman, who borrowed from the Center on Budget and Policy Priorities (peer review?), this graph:

deficit reduction and stabilization

[Note: BCA is the Budget Control Act of 2011 (that “settled” the first debt-ceiling fight and which brought us the so-called fiscal cliff at the end of 2012) and ATRA is the American Taxpayer Relief Act, signed on January 2 of this year (the fiscal-cliff “settlement”).]

Here is Krugman’s description of the graph:

The vertical axis measures the projected ratio of federal debt to GDP. The blue line at the top represents the projected path of that ratio as of early 2011 — that is, before recent agreements on spending cuts and tax increases. This projection showed a rising path for debt as far as the eye could see.

And just about all budget discussion in Washington and the news media is laid out as if that were still the case. But a lot has happened since then. The orange line shows the effects of those spending cuts and tax hikes: As long as the economy recovers, which is an assumption built into all these projections, the debt ratio will more or less stabilize soon.*

Krugman makes the point that,

for the next decade, the debt outlook actually doesn’t look all that bad.

True, there are projected problems further down the road, mainly because of the continuing effects of an aging population. But it still comes as something of a shock to realize that at this point reasonable projections do not, repeat do not, show anything resembling the runaway deficit crisis that is a staple of almost everything you hear, including supposedly objective news reporting.

We know that most Beltway journalists have bought into the hype over deficits and debts, since that is just about all that Republicans want to talk about now that they aren’t in the White’s House. But the focus of congressional and presidential efforts in the short term should be on keeping the economy stimulated enough to really catch fire.

Brad DeLong offers this stinging rebuke of the President:

In focusing in 2013 on further deficit-reduction deals rather than on policies to boost employment growth and infrastructure investment, President Obama is making yet another hideous economic policy mistake.

Now, to be fair to Mr. Obama, he can’t entirely control the debate. He has constantly talked about the dangers of deep cuts in government spending and the need to keep the economic recovery going.

But he faces stiff opposition in Congress from austerity-drunk Republican teapartiers who are aided and abetted by an establishment press, a press that pushes on the public the weird idea that we are going to bleed to death if we don’t slit our throats now.

You figure it out. I can’t.

In the mean time, we need to stop worrying about the damn deficit for a while and start worrying, even exclusively worrying, about jobs and economic growth.

_______________________

* For budget geeks: About that red line on the graph above, the one that shows deficits leveling out as a percentage of the economy, that was the point of the Center on Budget and Policy Priorities original piece, which explained it this way:

Achieving $1.4 trillion in additional deficit savings would stabilize the debt at about 73 percent of GDP by 2018.  Some analysts prefer a lower debt ratio, such as 60 percent of GDP, a goal that the European Union and the International Monetary Fund adopted some years ago.  No economic evidence supports this — or any other — specific target, however, and IMF staff have made clear that the 60 percent criterion is an arbitrary one.  In addition, even if such a target were the best one before the recent severe economic downturn pushed up debt substantially in most advanced countries, it would not necessarily be an appropriate target for debt over the next ten years, given the severity of the downturn and continued economic weakness.  The critical goal now is to stabilize the debt in the coming decade.

by R. Duane Graham on January 15, 2013  •  Permalink
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Posted by R. Duane Graham on January 15, 2013

https://duanegraham.wordpress.com/2013/01/15/what-you-may-not-know-about-the-debt-but-should/

The Magic Penny

Love is something if you give it away,
Give it away, give it away.
Love is something if you give it away,
You end up having more.

It’s just like a magic penny,
Hold it tight and you won’t have any.
Lend it, spend it, and you’ll have so many
They’ll roll all over the floor.

—”Magic Penny,” words and music by Malvina Reynolds

Okay. Now it’s getting serious. Paul Krugman has blogged about it.

The “it” is what I will call, as a tribute to the great Malvina Reynolds, the Magic Penny, but what those in the know are calling Platinum Coin Seigniorage. It has to do with the Treasury Department ordering the U.S. Mint to issue, say, a $1 trillion platinum coin and then depositing it in the government’s account and using the “seigniorage profits” (the difference between the face value of the coin and the cost to produce it) to do things like, oh, pay bills.

It’s one way to get around the GOP’s willingness to wreck the economy by threatening not to meet all of our nation’s obligations.

Now, you can go read about it and make up your own mind, but here is why, if Mr. Obama is going to do something extraordinary to avoid Republican threats not to raise the debt ceiling, I prefer the option involving the Fourteenth Amendment, which I have mentioned before (and which the President obviously is reluctant, very reluctant, to use).

Here is my reason for that preference: Using Section 4 of that amendment will throw Republicans into such a tizzy that it will make their birtherism seem sane. They will thus spend all of their free time figuring out how to, first, impeach the President, then, second, how to convict him if they do. It will tie them up for months and months and bring out the crazies for all, and by “all” I mean the non-Fox-watching public, to see.

In the mean time, President Obama has absolutely nothing to fear from getting convicted in the Senate, and, as the impeachment of and failure to convict Bill Clinton demonstrates, Obama will be more popular than ever when it is all done!

It’s a real win-win!

by R. Duane Graham on January 4, 2013  •  Permalink
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Posted by R. Duane Graham on January 4, 2013

https://duanegraham.wordpress.com/2013/01/04/the-magic-penny/

Of Course We Need Economic Growth

Anson Burlingame, local conservative blogger and contributor to the Joplin Globe, commented on a piece I wrote (“Liberals Love Wealth“). His response included the following:

I have just completed a semester of study of macro economics at MSSU…

Not one word, not one textbook assignment, essentially not “anything” was taught about income distribution in the entire course. No “Keynesian vs Classical” theories, no debate of differing views over WHAT is the real income distribution, how do we measure it, what is “good” or “bad” income distribution or most important what to do about it.

That makes me wonder how the “science” of economics addresses that hot political potato of today…I only hear politicians and pundits opining on the matter. To me that is akin to political arguments over nuclear power without understanding to some degree at least the “science” behind such a source of electrical power…

As all of you discuss income distribution I offer this challenge to further consider. WHICH is more important today, growth in REAL production of goods and services that will SELL around the world, a competitive world OR redistribution of WEALTH, not just income, amongst various segments of America? CAN you achieve BOTH at the same time? I frankly don’t know the answer to that question nor have I “studied” such an issue in academia yet…

Anson

My reply:

Anson,

Your study of macroeconomics is admirable, and, like you, I would want (demand?) a discussion about what politicians and pundits argue about all the time: income (re)distribution, especially since, at bottom, what constitutes an economy is the way we collectively use our resources to produce and distribute goods and services.  I can’t think of anyone better suited to help us understand the issue you raised than folks trained to analyze the economy.

As far as how economists in the field address your question, there are think tanks, etc., on all sides that publish papers; there are economists like Robert Reich or Joseph Stiglitz or Paul Krugman (on my side) who write currently about your topic and appear on TV or radio, as well as countless others who have published works in the past. So, it turns out that economists do have a lot to say about the subject.

Among ordinary folks, talking about income and wealth  distribution is not really akin to talking about nuclear power for the reason that people don’t need a degree in economics to know what fairness-justice is (perhaps they do, though, need a course on John Rawls), and it is our collective sense of fairness (expressed through our political choices) that determines whether, say, we will spend X on redistributive social programs or nothing at all.

You asked which was more important, economic growth or “redistribution of wealth, not just income.” You also asked, “Can we achieve both at the same time?“

I went back on your blog and looked at an exchange we had more than three years ago about “How Do We Pay For “STUFF” (your title). Your first sentence was:

I am not sure how the federal government can pay for all the “stuff” demanded by voters, are you?

My rather lengthy response (I was willing, in those days, to invest the time in debating you) included this sentence:

Without economic growth, there is no way to solve any of the fiscal problems.

I hope you read and reread that sentence I wrote three years ago, Anson. Often it is that folks on your side ignorantly claim that liberals like me don’t give a damn about economic growth, only about spending more rich people’s money. Hooey.

Of course growth is essential to doing the stuff we liberals want to do. We are keenly aware that too much taxation and regulation stifles growth, just as conservatives should be keenly aware (few are, though) that too little taxation and too little regulation stifles civilization.

But I said all that to say this: Of course we can have both growth and a more equitable distribution of wealth (and income). In fact, both are necessary for our national well-being. The economic story of America in the twentieth century is the story of how we grew into an economic badass and yet began to figure out how to divvy things up a little more fairly (at least until conservative thinking began to take root in government and media in the 1980s).

Now, just how we get more economic equality without negatively affecting economic growth is what makes public policy choices so difficult. However, we first have to agree—we liberals and you conservatives—that a more equitable distribution of income and wealth is a goal we should pursue. Very few on your side think so (beyond helping those who can’t help themselves), and that is the source of a lot of our disagreements.

I will agree with any conservative who believes that economic growth is the best way to fight poverty. The problem is that some among us inevitably won’t get much from that formula. Indeed, some will get left out altogether, for whatever reason.

What do we do about them? Their children? And what do we do about older folks who are no longer competitively productive?

I’ll give you a hint: we don’t leave them to fend for themselves or agonize in the streets. We should help them, provide for their children (bread, butter, and books), and give them some sense of security in their old age. In a civilized society, that is what we should do.

But those things are expensive. And to pay for them we need to get the money from those who have it. Call it redistribution, call it whatever you want. But in a myriad of ways we do it each and every day, and we should strive to do it better.

And economists can and should help us understand how to do so, and if your professor failed to even bring up the subject then you missed something important.

Duane

by R. Duane Graham on December 7, 2012  •  Permalink
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Posted by R. Duane Graham on December 7, 2012

https://duanegraham.wordpress.com/2012/12/07/of-course-we-need-economic-growth/

“Good News” For A Change From Paul Krugman

Economist and liberal Paul Krugman, who has been quite sour on the economy despite his sympathy for President Obama, wrote what I consider to be a rather remarkable column on Thursday.

Krugman asked: Is the economic “mess” Obama inherited “really getting cleaned up“? He wrote:

The answer, I would argue, is yes. The next four years are likely to be much better than the last four years — unless misguided policies create another mess.

That’s kind of shocking coming from him, since he believes Obama’s stimulus was much too small, and that his administration did not take seriously the need for widespread debt relief, which he has argued would have made the recovery much stronger.

But his reasoning for his latest cautious optimism goes like this:

On Inauguration Day 2009, the U.S. economy faced three main problems. First, and most pressing, there was a crisis in the financial system, with many of the crucial channels of credit frozen; we were, in effect, suffering the 21st-century version of the bank runs that brought on the Great Depression. Second, the economy was taking a major hit from the collapse of a gigantic housing bubble. Third, consumer spending was being held down by high levels of household debt, much of which had been run up during the Bush-era bubble.

He pointed out that the financial system crisis was resolved “quite quickly” but by itself did not “produce a robust recovery.” And then he writes something that all of us who care about this stuff should understand:

Fast recoveries are almost always led by a housing boom — and given the excess home construction that took place during the bubble, that just wasn’t going to happen. Meanwhile, households were trying (or being forced by creditors) to pay down debt, which meant depressed demand. So the economy’s free fall ended, but recovery remained sluggish.

The “good news” Krugman says (man, that sounds funny coming from him) is that,

The forces that have been holding the economy back seem likely to fade away in the years ahead. Housing starts have been at extremely low levels for years, so the overhang of excess construction from the bubble years is long past — and it looks as if a housing recovery has already begun. Household debt is still high by historical standards, but the ratio of debt to G.D.P.* is way down from its peak, setting the stage for stronger consumer demand looking forward.

And what about business investment? It has actually been recovering rapidly since late 2009, and there’s every reason to expect it to keep rising as businesses see rising demand for their products.

So, as I said, the odds are that barring major mistakes, the next four years will be much better than the past four years.

We can only hope that the next four years are not Romney’s first term as president, in which case Krugman will have to go back to his old pessimistic self.

_________________________

* Keep in mind he is talking about the ratio of “household debt” to GDP, not government debt.

by R. Duane Graham on September 7, 2012  •  Permalink
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Posted by R. Duane Graham on September 7, 2012

https://duanegraham.wordpress.com/2012/09/07/good-news-for-a-change-from-paul-krugman/

A Fiscal Fantasy

This morning on MSNBC Ezra Klein made a great point about how most of the talk surrounding Ryan’s budget plan has been limited to the Medicare issue. But there is a lot more to it than that:

What people don’t realize about it is the cuts to other health care programs, primarily Medicaid, are almost twice  as large as Medicare…

Medicaid, of course, is a means-tested health program for low-income folks, including children, the elderly, and the disabled.  More than half of the funding for each state is provided by the feds.

According to the Kaiser Commission on Medicaid and the Uninsured, those Ryan—now Romney-Ryan—cuts Klein referenced, along with repeal of the Affordable Care Act which Romney and Ryan promise to accomplish, will in, say, Missouri mean that somewhere between 46% and 53% of folks who would otherwise be enrolled in Medicaid under current law in 2021 would not be so enrolled.

That represents between 650,000 and 750,000 Missourians whose well-being, unless the state came up with more revenue itself (!), would be sacrificed in the name of budget austerity that has as its guiding principle the idea that rich folks need more tax cuts.

But that’s not all. Klein also makes the point that the Ryan plan is designed to shrink other parts of government spending as a share of the economy, to uncivilized levels by 2050. He  presented this graph:

Klein wrote something remarkable that should be shouted from the housetops (emphasis mine):

The truth is that the Ryan budget’s largest long-term savings don’t come from Medicaid or Medicare or Social Security, or even Medicaid and Medicare and Social Security put together. They come from everything else. Ryan says that under his budget, everything the federal government does that is not Medicare, Medicaid or Social Security will be cut to less than 3.75 percent of GDP by 2050. That means defense, infrastructure, education, food safety, energy research, national parks, civil service, the FBI — all of it. Right now, that category of spending is 12.5 percent of GDP.

Think about that. A government that small could not possibly “establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity” in 2050. But it’s all nonsense, as real-time, Nobel Prize-totin’ economist Paul Krugman pointed out:

Look, Ryan hasn’t “crunched the numbers”; he has just scribbled some stuff down, without checking at all to see if it makes sense. He asserts that he can cut taxes without net loss of revenue by closing unspecified loopholes; he asserts that he can cut discretionary spending to levels not seen since Calvin Coolidge, without saying how; he asserts that he can convert Medicare to a voucher system, with much lower spending than now projected, without even a hint of how this is supposed to work. This is just a fantasy, not a serious policy proposal.

Well, what is serious is the philosophy behind the proposal, which philosophy is based on a fantasy, a fantasy that what is wrong with our fiscal house can be fixed by throwing the poor, the elderly, and the sick in the streets to fend for themselves and by shrinking government to a size that could truly be drowned in Grover Norquist’s bathtub.

by R. Duane Graham on August 13, 2012  •  Permalink
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Posted by R. Duane Graham on August 13, 2012

https://duanegraham.wordpress.com/2012/08/13/a-fiscal-fantasy/

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