On 02.27.2011 The Santa Cruz Sentential posted a condensed version of my article, The Fallacy of the Republican/democrat Flip/Flop on Civil Rights
"Once again Paul Krugman has tried to prop up his worldview by simply lying. In his previous article he said the Republican Party had abandoned the party of Lincoln, by embracing the racist south for a voting block. The reality of course was the South finally outgrew the Jim Crow Democrats and joined the rest of the nation, while Democrats for 40 years have been trying to remove the stench of segregation and Jim Crow from their party. In his article, “Wisconsin Power Play” he states that major conservative pundits insisted President Obama help Mubaraka suppress the uprising in Egypt. This of course has no foot in reality; conservatives across the board have condemned Mubarak where it was Secretary of State Clinton and Vice President Biden who proclaimed their backing of the Mubarack regime. It is a shame that Krugman has the notoriety that gives him the space in your paper to write such trash."
If I have one purpose in writing these articles it is trying to root out those that blindly follow the likes of Paul Krugman. The response was from one of those folks. It gives one some insight on how the left nurtures progressive thought with lies and mis-information.
Brad Goodwin's letter in the Feb. 26 paper claims Paul Krugman lied when he said major conservative pundits insisted that President Obama help Mubarak suppress the uprising in Egypt when, in fact "conservatives across the board have condemned Mubarak." In fact, it is Mr. Goodwin who is misinformed. It's easy to find statements on the Internet from conservative pundits like Rush Limbaugh, Glenn Beck and Sean Hannity, before Mubarak stepped down, praising Mubarak and suggesting that people "root for" him to prevail that was Limbaugh. Try it yourself; it won't take long. People should be more careful before calling others liars and accusing them of writing trash.
Peter Gelblum, Boulder Creek
This response should have been my the original article, as I backs up the original concept that Paul Krugman is indeed a liar. Whether the Sentinel will print it is questionable.
"As usual those of the left never actually listen to the likes of Rush Limbaugh or other conservative pundits, they simply read a Google hit from Media Matters to find quotes taken out of context. Peter Gelblum rushing to the defense of Paul Krugman, claims Rush Limbaugh and other conservative pundits did indeed denounced the uprising in Egypt; he commented, "before Mubarak stepped down, praising Mubarak and suggesting that people "root for" him to prevail that was Limbaugh". The Limbaugh quote in context occurred while he was discussing the Muslim Brotherhood and their anti-west rhetoric; "No one really knows who to root for...If you are concerned with US interests, we should root for Mubarak to prevail. Would Mr Gelblum deny that Mubarack was been a strong ally of the west? Krugman is a hack and a liar, for this there is no doubt."
edited 03.06.2011.
Another example of Paul Krugman's intellectual dishonesty is how he mixes statistic apples and oranges to arrive at what ever conclusion fits his world view. Here is an excellent article by iowahawk.com Longhorns 17, Badgers 1 , that references one of Krugman's recent trips to fantasy land where he tries to equate collective bargaining and high school tests scores; I love it when a rather dry scholarly piece contains the word "bullshit!".
Showing posts with label Paul Krugman. Show all posts
Showing posts with label Paul Krugman. Show all posts
Tuesday, March 1, 2011
Tuesday, February 15, 2011
The Fallacy of the Republican/Democratic Flip/Flop on Civil Rights and Racism
Once again Paul Krugman tries to re-write history as he explains why the South deserted the Democrats; not because they outgrew segregation, but because Republicans were willing to abandon the founding values of their party for Southern votes; it's the old flip/flop theory the Democrats have espoused to try and falsely place themselves on the right side of history. “There was a time when Republicans used to refer to themselves, proudly, as “the party of Lincoln.” But you don’t hear that line much these days. Why? The main answer, presumably, lies in the G.O.P.’s decision, long ago, to seek votes from Southerners angered by the end of legal segregation. With the old Confederacy now the heart of the Republican base, boasting about the party’s Civil War-era legacy is no longer advisable.” Abraham Lincoln, Inflationist
Before I delve into history, lets quickly look at human nature. History is replete with racists and bigots that have matured and grew spiritually to renounce their bigotry. However there is simply not a case for the reverse; one would have to look far and wide to find a group that was a champion of civil rights and suddenly became bigoted toward the same group; the concept is absurd.
The short answer of why the Republicans took the south in the 60's and lost the black vote is looking back to the end or WWII when the Southern Democrats continued segregation, while the rest of the country saw this rightly as black oppression. President Truman de-segregated the military (after it had been re-segregated 40 years earlier by Southern Democrat President Woodrow Wilson; probably the most racist president the country has ever known) and then President Eisenhower's Civil Rights act of 1957, which was filibustered and watered by the Southern Democrats lead by the then Speaker of the House Lyndon Johnson. However the writing was on the wall and the Democrats, lead by now President Johnson, realized that the racism of the Southern Democrats would probably end the Democrats prospects for another Democratic President, unless they could persuade black voting block to leave the Republicans and vote Democratic (“Johnson wanted a cosmetic bill that would enhance his presidential ambitions without alienating his white Southern base. “Ike liked Civil Rights” by David Nichols (09-12-2007).); to this purpose Johnson pushed through his1964 Civil Rights Bill, and the Economic Opportunity Act of 1964“I’ll have those niggers voting Democratic for the next 200 years.” and “These Negroes, they’re getting pretty uppity these days and that’s a problem for us since they’ve got something now they never had before, the political pull to back up their uppityness. Now we’ve got to do something about this, we’ve got to give them a little something, just enough to quiet them down, not enough to make a difference.” and “I’ll have those niggers voting Democratic for the next 200 years.”
While as LBJ said, this was to insure that blacks would be compelled to vote Democratic for generations (200 years), it was not by helping the black man prosper, but by making blacks almost totally dependent on hand outs from the government, destroying the black family by mandating recipients could not have the father living in the household, and subsidizing illegitimate black births which increased from 9% in the 50's to 70% today. Johnson's Phony War on Poverty (V)irtually every liberal, when pressed on the matter, will inevitably claim that the parties "switched," and most racist Democrats became Republicans! In their minds, this historical ju jitsu maneuver apparently transfers all the past sins of the Democrats (slavery, the KKK, Jim Crow laws, etc.) onto the Republicans and all the past virtues of the Republicans (e.g., ending slavery) onto the Democrats! That's quite a feat! Short History of Democrats, Republicans, and Racism
The problem of course is Democrats are on the wrong side of history on this, so liberal revisionists have been trying for 40 years to wash the stench of Jim Crow and segregation from their party. Lets look at history for a moment. First, Abraham Lincoln is the founder of the Republican Party, which was born from the abolitionist’s movement. There has never been a moment that Republicans have not referred to themselves other than the party of Lincoln. Next you have the Civil War, where the Southern Democrat slave owners fought tooth and nail against the Republicans and the Northern army to preserve their way of life. During the reconstruction era, the Northern army occupied the south and federally protected the civil rights of the freed slaves. The only deal that was cut was the “Compromise of 1877,” where the Republican and Southern Democratic Presidential candidates had both won about 50% of the vote. Realizing appointing the Republican Rutherford Hayes would likely re-ignite hostilities in the South, Rutherford made a deal with the Democrat Samuel Tilden, that we would withdraw the Northern troops from the south. The result was the “Redeemer” democrats took control and initiated the Jim Crow laws.
“Historians argue that the assurances offered to some Southern Democrats to prevent a filibuster were not a "compromise"(Peskin, 1973). Others argue that the Republican party abandoned Southern Blacks to racist Democratic party rule in order to gain Democratic support (DeSantis, 1982). In any case, Reconstruction ended, and the supremacy of the Democratic Party in the South was cemented with the ascent of the "Redeemer" governments that displaced the Republican governments. After 1877, white supremacy generally caused the South to vote Democratic in elections for federal office (the "Solid South") until 1966.” Wikipedia
To even propose that the old Confederacy is now the heart of the Republican party is to ignore the rise of the Klu Klux Klan, that even ex-President Bill Clinton said of Robert Byrd, was a necessity in the South, “He once had a fleeting association with the Ku Klux Klan, what does that mean? I’ll tell you what it means. He was a country boy from the hills and hollows from West Virginia. He was trying to get elected.” But the Left continues perpetuate the idea that somehow a group of people that have historically been an advocate and savior of black freedom and liberty, would somehow become racist for political purposes. The reality is the only group of people that retained their racism for political purposes were the Democrats that wanted to keep the Democratic party together during the 1950's.
One place the left likes to point to as evidence of the Republican sudden turn toward racism is Goldwaters opposition to the 1964 Civil Rights Act; Goldwater's opposition to the 1964 Civil Rights Act provided liberals an opening to tar the Republican Party as racist, and they have tenaciously repeated that label so often over the years that it is now the conventional wisdom among liberals. But it is really nothing more than an unsubstantiated myth -- a convenient political lie. If the Republican Party was any more racist than the Democratic Party even in 1964, why did a higher percentage of Republicans than Democrats in both houses of Congress vote for the 1964 Civil Rights Act? The idea that Goldwater's vote on the 1964 Civil Rights Act trumps a century of history of the Republican Party is ridiculous, to say the least. A Short History of Democrats, Republicans, and Racism
History also shows the realignment of the South toward the Republican Party was two fold. First as the Democrats embraced a more progressive platform they ignored their conservative religious base. "A more likely explanation for the long-term shift from Democratic to Republican dominance in the South was the perception, fair or not, that the Democratic Party had rejected traditional Christian religious values and embraced radical secularism. That includes its hardline support for abortion, its rejection of prayer in public schools, its promotion of the gay agenda, and many other issues." A Short History of Democrats, Republicans, and Racism
Second, the South simply became more educated and became less agricultural, which lead to a realization of the racial Birgit that was the basis of segregation .“Modernization that brought factories, businesses, and cities, and millions of migrants from the North; far more people graduated from high school and college. Meanwhile the cotton and tobacco basis of the traditional South faded away, as former farmers moved to town or commuted to factory jobs. The immediate cause of the political transition involved civil rights.” Wikipedia.
So, the idea that the Republicans abandoned the party of Lincoln to seek a voting base of racists whites in the South, abandoned by the Democrats, is a fallacy simply made up and repeated the by Democrats since the 1960's . The reality however is grounded in the fact that black oppression by the Democrats was simply no longer politically viable. The answer was to create a welfare state designed to make blacks totally dependent on the state. One of the primary vehicles was Johnson's welfare program that subsidized black illegitimacy (rose from 23% to 76%), resulting in the break up of the black family (the subsidy would only be paid if there was no male living in the house), higher incarceration rates of young black males (in 1960 1350 out of 100,000 blacks were incarcerated; by 2010 that number rose to 4250 blacks out of 100,000; certainly a major driver is their alienation from the family and responsibilities of supporting a wife and children), and abortion levels that are now to equal to live births (over 1 million a year). And of course if Republicans dare talk reform they are branded as racists.
In 1950, 17 percent of African-American children lived in a home with their mother but not their father. By 2010 that had increased to 50 percent. In 1965, only eight percent of childbirths in the Black community occurred out-of-wedlock. In 2010 that figure was 41 percent; and today, the out-of-wedlock childbirth in the Black community sits at an astonishing 72 percent. The number of African-American women married and living with their spouse was recorded as 53 percent in 1950. By 2010, it had dropped to 25 percent. The Black Family is Worse Off then 60's
In the 1960s the Democratic Party essentially changed its strategy for dealing with African Americans. Thanks largely to earlier Republican initiatives on civil rights, blatant racial oppression was no longer a viable political option. Whereas before that time Southern Democrats had overtly and proudly segregated and terrorized blacks, the national Democratic Party decided instead to be more subtle and get them as dependent on government as possible.Short History of Democrats, Republicans, and Racism
It is a shame that Krugman has the notoriety that gives him the space to write such trash. But it does give credence to the Ronald Reagan Quote, "One picture is worth 1,000 denials," or in Krugman’s case, it’s not pictures he denies, it’s the inconvenient truth of historical fact.
See more at, More about the false narrative about the"Southern Strategy"
Before I delve into history, lets quickly look at human nature. History is replete with racists and bigots that have matured and grew spiritually to renounce their bigotry. However there is simply not a case for the reverse; one would have to look far and wide to find a group that was a champion of civil rights and suddenly became bigoted toward the same group; the concept is absurd.
The short answer of why the Republicans took the south in the 60's and lost the black vote is looking back to the end or WWII when the Southern Democrats continued segregation, while the rest of the country saw this rightly as black oppression. President Truman de-segregated the military (after it had been re-segregated 40 years earlier by Southern Democrat President Woodrow Wilson; probably the most racist president the country has ever known) and then President Eisenhower's Civil Rights act of 1957, which was filibustered and watered by the Southern Democrats lead by the then Speaker of the House Lyndon Johnson. However the writing was on the wall and the Democrats, lead by now President Johnson, realized that the racism of the Southern Democrats would probably end the Democrats prospects for another Democratic President, unless they could persuade black voting block to leave the Republicans and vote Democratic (“Johnson wanted a cosmetic bill that would enhance his presidential ambitions without alienating his white Southern base. “Ike liked Civil Rights” by David Nichols (09-12-2007).); to this purpose Johnson pushed through his1964 Civil Rights Bill, and the Economic Opportunity Act of 1964“I’ll have those niggers voting Democratic for the next 200 years.” and “These Negroes, they’re getting pretty uppity these days and that’s a problem for us since they’ve got something now they never had before, the political pull to back up their uppityness. Now we’ve got to do something about this, we’ve got to give them a little something, just enough to quiet them down, not enough to make a difference.” and “I’ll have those niggers voting Democratic for the next 200 years.”
While as LBJ said, this was to insure that blacks would be compelled to vote Democratic for generations (200 years), it was not by helping the black man prosper, but by making blacks almost totally dependent on hand outs from the government, destroying the black family by mandating recipients could not have the father living in the household, and subsidizing illegitimate black births which increased from 9% in the 50's to 70% today. Johnson's Phony War on Poverty (V)irtually every liberal, when pressed on the matter, will inevitably claim that the parties "switched," and most racist Democrats became Republicans! In their minds, this historical ju jitsu maneuver apparently transfers all the past sins of the Democrats (slavery, the KKK, Jim Crow laws, etc.) onto the Republicans and all the past virtues of the Republicans (e.g., ending slavery) onto the Democrats! That's quite a feat! Short History of Democrats, Republicans, and Racism
The problem of course is Democrats are on the wrong side of history on this, so liberal revisionists have been trying for 40 years to wash the stench of Jim Crow and segregation from their party. Lets look at history for a moment. First, Abraham Lincoln is the founder of the Republican Party, which was born from the abolitionist’s movement. There has never been a moment that Republicans have not referred to themselves other than the party of Lincoln. Next you have the Civil War, where the Southern Democrat slave owners fought tooth and nail against the Republicans and the Northern army to preserve their way of life. During the reconstruction era, the Northern army occupied the south and federally protected the civil rights of the freed slaves. The only deal that was cut was the “Compromise of 1877,” where the Republican and Southern Democratic Presidential candidates had both won about 50% of the vote. Realizing appointing the Republican Rutherford Hayes would likely re-ignite hostilities in the South, Rutherford made a deal with the Democrat Samuel Tilden, that we would withdraw the Northern troops from the south. The result was the “Redeemer” democrats took control and initiated the Jim Crow laws.
“Historians argue that the assurances offered to some Southern Democrats to prevent a filibuster were not a "compromise"(Peskin, 1973). Others argue that the Republican party abandoned Southern Blacks to racist Democratic party rule in order to gain Democratic support (DeSantis, 1982). In any case, Reconstruction ended, and the supremacy of the Democratic Party in the South was cemented with the ascent of the "Redeemer" governments that displaced the Republican governments. After 1877, white supremacy generally caused the South to vote Democratic in elections for federal office (the "Solid South") until 1966.” Wikipedia
To even propose that the old Confederacy is now the heart of the Republican party is to ignore the rise of the Klu Klux Klan, that even ex-President Bill Clinton said of Robert Byrd, was a necessity in the South, “He once had a fleeting association with the Ku Klux Klan, what does that mean? I’ll tell you what it means. He was a country boy from the hills and hollows from West Virginia. He was trying to get elected.” But the Left continues perpetuate the idea that somehow a group of people that have historically been an advocate and savior of black freedom and liberty, would somehow become racist for political purposes. The reality is the only group of people that retained their racism for political purposes were the Democrats that wanted to keep the Democratic party together during the 1950's.
One place the left likes to point to as evidence of the Republican sudden turn toward racism is Goldwaters opposition to the 1964 Civil Rights Act; Goldwater's opposition to the 1964 Civil Rights Act provided liberals an opening to tar the Republican Party as racist, and they have tenaciously repeated that label so often over the years that it is now the conventional wisdom among liberals. But it is really nothing more than an unsubstantiated myth -- a convenient political lie. If the Republican Party was any more racist than the Democratic Party even in 1964, why did a higher percentage of Republicans than Democrats in both houses of Congress vote for the 1964 Civil Rights Act? The idea that Goldwater's vote on the 1964 Civil Rights Act trumps a century of history of the Republican Party is ridiculous, to say the least. A Short History of Democrats, Republicans, and Racism
History also shows the realignment of the South toward the Republican Party was two fold. First as the Democrats embraced a more progressive platform they ignored their conservative religious base. "A more likely explanation for the long-term shift from Democratic to Republican dominance in the South was the perception, fair or not, that the Democratic Party had rejected traditional Christian religious values and embraced radical secularism. That includes its hardline support for abortion, its rejection of prayer in public schools, its promotion of the gay agenda, and many other issues." A Short History of Democrats, Republicans, and Racism
Second, the South simply became more educated and became less agricultural, which lead to a realization of the racial Birgit that was the basis of segregation .“Modernization that brought factories, businesses, and cities, and millions of migrants from the North; far more people graduated from high school and college. Meanwhile the cotton and tobacco basis of the traditional South faded away, as former farmers moved to town or commuted to factory jobs. The immediate cause of the political transition involved civil rights.” Wikipedia.
So, the idea that the Republicans abandoned the party of Lincoln to seek a voting base of racists whites in the South, abandoned by the Democrats, is a fallacy simply made up and repeated the by Democrats since the 1960's . The reality however is grounded in the fact that black oppression by the Democrats was simply no longer politically viable. The answer was to create a welfare state designed to make blacks totally dependent on the state. One of the primary vehicles was Johnson's welfare program that subsidized black illegitimacy (rose from 23% to 76%), resulting in the break up of the black family (the subsidy would only be paid if there was no male living in the house), higher incarceration rates of young black males (in 1960 1350 out of 100,000 blacks were incarcerated; by 2010 that number rose to 4250 blacks out of 100,000; certainly a major driver is their alienation from the family and responsibilities of supporting a wife and children), and abortion levels that are now to equal to live births (over 1 million a year). And of course if Republicans dare talk reform they are branded as racists.
In 1950, 17 percent of African-American children lived in a home with their mother but not their father. By 2010 that had increased to 50 percent. In 1965, only eight percent of childbirths in the Black community occurred out-of-wedlock. In 2010 that figure was 41 percent; and today, the out-of-wedlock childbirth in the Black community sits at an astonishing 72 percent. The number of African-American women married and living with their spouse was recorded as 53 percent in 1950. By 2010, it had dropped to 25 percent. The Black Family is Worse Off then 60's
In the 1960s the Democratic Party essentially changed its strategy for dealing with African Americans. Thanks largely to earlier Republican initiatives on civil rights, blatant racial oppression was no longer a viable political option. Whereas before that time Southern Democrats had overtly and proudly segregated and terrorized blacks, the national Democratic Party decided instead to be more subtle and get them as dependent on government as possible.Short History of Democrats, Republicans, and Racism
It is a shame that Krugman has the notoriety that gives him the space to write such trash. But it does give credence to the Ronald Reagan Quote, "One picture is worth 1,000 denials," or in Krugman’s case, it’s not pictures he denies, it’s the inconvenient truth of historical fact.
See more at, More about the false narrative about the"Southern Strategy"
Tuesday, January 18, 2011
Why The Left Has To Lie
In Paul Krugmans recent Op-Ed piece, A Tale of Two Moralities, Krugman presents the difference between the economics prospective from the left and right. From the Left he says, “One side of American politics considers the modern welfare state — a private-enterprise economy, but one in which society’s winners are taxed to pay for a social safety net — morally superior to the capitalism red in tooth and claw we had before the New Deal. It’s only right, this side believes, for the affluent to help the less fortunate.” Krugman’s prospective of the right, “The other side believes that people have a right to keep what they earn, and that taxing them to support others, no matter how needy, amounts to theft. That’s what lies behind the modern right’s fondness for violent rhetoric: many activists on the right really do see taxes and regulation as tyrannical impositions on their liberty.” What Krugman show here is two of the main tenants of the left; the first is they have to lie about what they really want to do to the economy and American people, and the second is the left will will say anything, no matter how untrue, to mislead the American people. How did I get her from there? Well let’s look at what Krugman said. While Krugman did hit some points of a conservative philosophy, he also interjected the left’s new propaganda effort that the right is predisposed to violent rhetoric. If there is a better example of Goebel’s “big lie” philosophy, I haven’t seen it. If indeed Krugman is correct, how come this pre-disposition toward violent rhetoric only surfaced during Obama’s Presidential campaign, and was never discussed during the last 8 years under President George Bush. As a matter of reality, it was the left that embraced some of the most violent and reckless rhetoric that has ever been laid on any President. Another example is the lets rhetoric aganist Rush Limbaugh and Sarah. When Limbaugh said we wanted President Obama to fail, the Left said they wanted his kidneys to fail; which is more vile? When Sarah Palin said she was targeting Rep Gabrielle Griffin's state using a map with cross-hairs, the left said Palin should have been shot in the head instead of Griffin; which better defines violent hate speech?
What is obvious is the Left’s sensitivity to violent rhetoric is proportional to how much power they wheel in Washington. When the Democrats have the majority, then the left's violent rhetoric meter becomes very sensitive, when the Republicans are in charge, then the sensitivity of the violent rhetoric meter is tuned way down. Almost by definition the left is known for angry protests, unruly crowds, violent demonstrations and attack rhetoric and race baiting designed to provoke extreme emotional responses. Just look at the communist and socialist organizations, unions, anarchists even neighborhood organizers that are forever trying to rally their forces for revolution and change by any means necessary. And the left continues to state it is the right that is responsible for violent rhetoric, stating their opposite reality as fact and if it is repeated enough times; the citizenry will eventually believe it.
This is one of the bases of propaganda. The Left needs propaganda, which was developed in it’s modern form by Progressives in the late 19 century by the likes of Edward Bernays, because the citizenry does not know what is good for them and will not willingly give up their liberties for the good of the collective. The true difference between the left and right is the left believes that the citizenry is not capable of governing itself society is best left to elite planners; aka governing over the collective. The Right believes in the unalienable rights of the individuals and their right to govern themselves; aka government by the people.
After the shootings in Arizona, there was an avalanche of Democratic politicians that simply wanted to do away with our First Amendment right of freedom of speech; it was alarming how many of our representatives seemed to have no concept of the basis of liberty. Either that or it is an incremental step toward a planned and controlled society. The reason is, for societal planning to be successful the government needs to have the complete trust of the citizenry; and to be beyond reproach, government must be beyond criticism, so criticism of the government must be severely curtailed or completely eliminated. This tactic has been used very successfully throughout history when a totalitarian government has taken control.
So returning to Krugman’s Op-Ed piece, and how his pretending to describe the prospective of the right amounted to “the lefts basic premise that the citizenry are not capable of running their own lives, and therefore must relinquish their liberty in the name of security,” is he could not tell the truth about either prospective, so he had to lie. Rather than “the affluent to help the less fortunate” being “morally superior,” what Krugman is espousing is his belief that government is better at making moral decisions than the citizenry; that would be a hard sell if he was being truthful. I’ve already discussed the absurd notion of the rights ownership of violent rhetoric. But when Krugman says “the other side believes that people have a right to keep what they earn, and that taxing them to support others, no matter how needy, amounts to theft,” he again is emphasizing that the government is better at spending money that the citizenry; which they are, but only by the way the citizens money is either wasted, or creates a sub group of Americans that are entirely dependent on government. President Obama and the Democrats have even recommended the removal of tax deductions for charitable donations, believing the government is losing tax revenue through these donations, as the government would be much better at deciding where these charitable donations are needed. But the up side of all this is the American people are much more aware than the Left gives them credit. Having a consumer economy means the American people have seen everything modern marketing has come up with, which has it’s basis in various forms of propaganda, so we know a liar when we hear one and the American people hear the left loud and clear
Monday, January 10, 2011
Political Hack Paul Krugman Says Never Mind the Facts
Jared Lee Loughner is an anarchist psychotic who seemed to have had a personal vendetta against Rep. Gabrielle Giffords since 2007. But this has not stopped the left from immediately blaming Sarah Palin for her "Targeting Map" and/or the political rhetoric from the right in general. The left wing's political hack, Paul Krugman is crossing his fingers and praying he can make a nexus to the Republicans saying, “We don’t have proof yet that this was political, but the odds are that it was….You know that Republicans will yell about the evils of partisanship whenever anyone tries to make a connection between the rhetoric of Beck, Limbaugh, etc. and the violence I fear we’re going to see in the months and years ahead. But violent acts are what happen when you create a climate of hate. And it’s long past time for the GOP’s leaders to take a stand against the hate-mongers.” This of course has no basis in fact at all. But the left uses this propaganda, where the same lie is repeated over and over until it is hopefully believed. The left has also tried to fan the flames, trying to create the impression that the right has been perpetrating toxic hate speech, when in reality it is nothing of the kind. The problem is the political rhetoric of right, while not hateful, has been very effective, so the left has been trying to portray the speech as something harmful, with the anticipation that at some point a violent incident like the Arizona shooting will occur, so they can blame the violence on the right and respond with their prepared narrative. The problem here is it looks like the left has jumped the gun and will be unable to show the casual effect they were hoping for; but it will not be for the lack of trying.
One of the key players in blaming right wing rhetoric for this horror is Sheriff Clarence Dupnik, the man leading the investigation into the shooting in Arizona. In an interview with Fox’ Megyn Kelly, Sheriff Dupnik first berates Republicans with "We see one party trying to block the attempts of another party to make this a better country," then places the blame squarely on the right wing TV and radio. "There are a whole lot of people in this country who are very angry about the politics of people like Gabrielle," Dupnik said. "There was a lot of vitriolic statements made night and day on radio and TV about her support of health care, about her support of some of the other things, and some of the vitriol got .... a lot of people agitated." But when asked if the sheriff had discovered anything in his investigation that suggested that Loughner was "listening to radio or watching television and was in any way inspired by what he heard or saw?" Dupnik said no. So no facts to back up any of his accusations, just partisan rhetoric. What he didn't say was, while Gabrielle Giffords was a target of the Tea Party, she is a Blue Dog Democrat, who's conservative views on the 2nd Amendment and Border security is what won her her reelection, despite voting for Obamacare. If the extreme right was going to target a democrat for assassination, Ms Gifford would have been far down on the list. Further, Lounghner also killed Federal Judge John Roll, who was known for his respect for the Constitution and states right; also not an obvious target of the right. What is beginning to emerge, however is a pattern were Dupnik ignored numerous complaints about Loughner's volatility and is now trying to lay blame elsewhere to divert attention from himself.
But as Byron York from the Beltway Confidential remarks in his article, Journalists urged caution after Ft. Hood, now race to blame Palin after Arizona shootings. The title alone says volumes as it speaks of the hypocrisy of the left.
"But the question is, is there any evidence that the suspected shooter in this particular case was a Sarah Palin fan, read Sarah Palin's website, was a member on Facebook, watched her tweets, or anything like that?" "None at all," (congressional reporter Jessica) Yellin responded. "And there is no evidence that this was even inspired by rage over health care, broadly. So there is no overt connection between Sarah Palin, health care, and the [shootings]."
In an exclusive interview with Mother Jones, a friend of Jared Lee Loughner, Bryce Tierney, said Loughner once asked Rep. Gabrielle Giffords at a rally “What is government if words have no meaning?" Giffords' answer, whatever it was, didn't satisfy Loughner. "He said, 'Can you believe it, they wouldn't answer my question,' and I told him, 'Dude, no one's going to answer that,'" Tierney recalls. "Ever since that, he thought she was fake, he had something against her."
Still Krugman won't let it go. In an Op-ED piece Climate of Hate Krugman, rather than apologize for his earlier blog statements, he wrote, "It’s true that the shooter in Arizona appears to have been mentally troubled. But that doesn’t mean that his act can or should be treated as an isolated event, having nothing to do with the national climate." In other words, there is simply no nexus between the shooter in Arizona and the Tea Party or any political rhetoric for that matter, but I'm going to try and make one anyway. He goes on to say, " Where’s that toxic rhetoric coming from? (What does that matter if it's irrelevant to the shooting?) Let’s not make a false pretense of balance: it’s coming, overwhelmingly, from the right (as one of my favorite bloggers Krugman is Wrong responded to this,"the left will just keep saying it over and over again, like they said the Tea Party protests were violent despite no violent action ever taking place").
Krugman continued, "It’s hard to imagine a Democratic member of Congress urging constituents to be “armed and dangerous” without being ostracized; but Representative Michele Bachmann, who did just that, is a rising star in the G.O.P." Of course Bachmann was referring to be being armed with information that would be dangerous to the Democrats energy bill, but how about candidate Obama saying, ""If they bring a knife to the fight, we bring a gun?" Krugman is so oblivious here he can not even comprehend how, while trying to demonize his enemy, he is demonizing himself and the Democratic Party. But never mind that. The left had been anxiously waiting for this moment and were "locked and loaded" with their replies (oops my bad). With no evidence, no facts, no information to contradict that Jared Lee Loughner is anything other than a psychotic killer, or that he was even aware of Michele Bachmann's political rhetoric or even who she is, Krugman becomes that which he professes to so concerned about, the toxic purveyor of political hate. Krugman is everything that is wrong with politics; even with all partisanship aside he is simply dishonest. And Americans despise a liar.
One of the key players in blaming right wing rhetoric for this horror is Sheriff Clarence Dupnik, the man leading the investigation into the shooting in Arizona. In an interview with Fox’ Megyn Kelly, Sheriff Dupnik first berates Republicans with "We see one party trying to block the attempts of another party to make this a better country," then places the blame squarely on the right wing TV and radio. "There are a whole lot of people in this country who are very angry about the politics of people like Gabrielle," Dupnik said. "There was a lot of vitriolic statements made night and day on radio and TV about her support of health care, about her support of some of the other things, and some of the vitriol got .... a lot of people agitated." But when asked if the sheriff had discovered anything in his investigation that suggested that Loughner was "listening to radio or watching television and was in any way inspired by what he heard or saw?" Dupnik said no. So no facts to back up any of his accusations, just partisan rhetoric. What he didn't say was, while Gabrielle Giffords was a target of the Tea Party, she is a Blue Dog Democrat, who's conservative views on the 2nd Amendment and Border security is what won her her reelection, despite voting for Obamacare. If the extreme right was going to target a democrat for assassination, Ms Gifford would have been far down on the list. Further, Lounghner also killed Federal Judge John Roll, who was known for his respect for the Constitution and states right; also not an obvious target of the right. What is beginning to emerge, however is a pattern were Dupnik ignored numerous complaints about Loughner's volatility and is now trying to lay blame elsewhere to divert attention from himself.
But as Byron York from the Beltway Confidential remarks in his article, Journalists urged caution after Ft. Hood, now race to blame Palin after Arizona shootings. The title alone says volumes as it speaks of the hypocrisy of the left.
"But the question is, is there any evidence that the suspected shooter in this particular case was a Sarah Palin fan, read Sarah Palin's website, was a member on Facebook, watched her tweets, or anything like that?" "None at all," (congressional reporter Jessica) Yellin responded. "And there is no evidence that this was even inspired by rage over health care, broadly. So there is no overt connection between Sarah Palin, health care, and the [shootings]."
In an exclusive interview with Mother Jones, a friend of Jared Lee Loughner, Bryce Tierney, said Loughner once asked Rep. Gabrielle Giffords at a rally “What is government if words have no meaning?" Giffords' answer, whatever it was, didn't satisfy Loughner. "He said, 'Can you believe it, they wouldn't answer my question,' and I told him, 'Dude, no one's going to answer that,'" Tierney recalls. "Ever since that, he thought she was fake, he had something against her."
Still Krugman won't let it go. In an Op-ED piece Climate of Hate Krugman, rather than apologize for his earlier blog statements, he wrote, "It’s true that the shooter in Arizona appears to have been mentally troubled. But that doesn’t mean that his act can or should be treated as an isolated event, having nothing to do with the national climate." In other words, there is simply no nexus between the shooter in Arizona and the Tea Party or any political rhetoric for that matter, but I'm going to try and make one anyway. He goes on to say, " Where’s that toxic rhetoric coming from? (What does that matter if it's irrelevant to the shooting?) Let’s not make a false pretense of balance: it’s coming, overwhelmingly, from the right (as one of my favorite bloggers Krugman is Wrong responded to this,"the left will just keep saying it over and over again, like they said the Tea Party protests were violent despite no violent action ever taking place").
Krugman continued, "It’s hard to imagine a Democratic member of Congress urging constituents to be “armed and dangerous” without being ostracized; but Representative Michele Bachmann, who did just that, is a rising star in the G.O.P." Of course Bachmann was referring to be being armed with information that would be dangerous to the Democrats energy bill, but how about candidate Obama saying, ""If they bring a knife to the fight, we bring a gun?" Krugman is so oblivious here he can not even comprehend how, while trying to demonize his enemy, he is demonizing himself and the Democratic Party. But never mind that. The left had been anxiously waiting for this moment and were "locked and loaded" with their replies (oops my bad). With no evidence, no facts, no information to contradict that Jared Lee Loughner is anything other than a psychotic killer, or that he was even aware of Michele Bachmann's political rhetoric or even who she is, Krugman becomes that which he professes to so concerned about, the toxic purveyor of political hate. Krugman is everything that is wrong with politics; even with all partisanship aside he is simply dishonest. And Americans despise a liar.
Monday, November 29, 2010
David Brooks vs The Liberal Technicians; i.e. Paul Krugman is Wrong
In his recent Op-Ed piece, The Two Cultures, David Brooks takes a look at a new economic study of stimuluses’, which comes to the conclusion that they work best with countries that have low debt, fixed exchange rates and closed economies and not countries “like the U.S. with high debt and floating exchange rates.” Unlike Germany, the United States economy is intimately tied to it’s trading partners by overseas manufacturing of US products. Therefore while an $800 billion stimulus might seem to leave a “large footprint” considering the US $14 trillion GDP, “it is hard to find in a $70 trillion global economy.”
Another observation by Brooks parrots my article The Immaturity of Obamanomics. Here Brooks points out the futility of trying to scientifically quantify human behavior and spending habits, “The liberal technicians have an impressive certainty about them. They have amputated those things that can’t be contained in models, like emotional contagions, cultural particularities and webs of relationships. As a result, everything is explainable and predictable. They can stand on the platform of science and dismiss the poor souls down below.” The issue of course is adhering to Keynesian dogma, such as “liberal technician” Paul Krugman. Keynesian models and projections are simply speculative fairy tales, but the likes of Paul Krugman refuses to take his head out of the ground to look around at the real world. Brooks writes, “If the government borrows trillions of dollars, this will increase public anxiety and uncertainty, the conservatives worry. The liberal technicians brush aside this soft-headed mush. These psychological concerns are mythological, they say. That’s gaseous blathering from those who lack quantitative rigor;” this statements pretty much defines every Paul Krugman article I have ever read, or I’m sure he has ever written.
So what is the answer? Well it’s pretty much the opposite of anything Paul Krugman espouses. In the real world you don’t borrow money to reduce the debt. Only in the fantasy of Keynesian macroeconomics, is this considered “a brilliant and aggressive stimulus (model).” It’s what you think it should be. Government cannot create jobs nor will it ever make a profit. In order for the government to receive higher tax revenues, it needs to promote job creation, not raise taxes. This means drastically cutting government expenses and leaving as much capital in the private sector as possible. If there is one area that government can improve is to rein in the naked derivatives market. Since the repeal of Glass-Steagle, the money that was traditionally used to buy stocks and bonds has been invested in these made up instruments, leaving American business grossly under funded; in Germany they have already been outlawed; “When you look around the world at the countries that have come through the recession best, it’s not the countries with the brilliant and aggressive stimulus models. It’s the ones like Germany that had the best economic fundamentals beforehand.”
On might remember that it was Paul Krugman who loudly denounced Germany’s conservative stimulus and austerity, which subsequently boosted their economy to the most robust in all of Europe, contrary to Krugman’s statement, “The key point is that while the advocates of austerity pose as hardheaded realists, doing what has to be done, they can’t and won’t justify their stance with actual numbers — because the numbers do not, in fact, support their position (the numbers Krugman talks about are made up Keynesian numbers).” As I said in Germany Proves the Keynesians Wrong, they were indeed right and Krugman was indeed wrong, just as he is always wrong.
In the final analysis we are left with the obvious, that as much as it was been advertised, you can’t reduce human behavior to a Newtonian equation; human reaction is much closer to Chaos Theory, which produces a pattern but is not necessary predictable. Brooks observed that liberal technicians view “psychological factors like uncertainty and anxiety really are a mirage. The first time a business leader tells you she is holding off on investing because she is scared about the future, you dismiss it as anecdote. But over the past few years, I’ve had hundreds of such conversations.”
As I have said so many times before, Keynesian theory is accepted by those who view government as the answer to society’s problems. Rather than accept the fact, that limited government with reasonable regulations allows the free market to find it’s own level and prosper, Keynesians want constant government influence, unwilling to accept that the economy would work better without it’s interference. Brooks ends with this; “It all makes one doubt the wizardry of the economic surgeons and appreciate the old wisdom of common sense: simple regulations, low debt, high savings, hard work, few distortions. You don’t have to be a genius to come up with an economic policy like that.” It’s like the law of supply and demand; as with gravity, it would exist whether you recognized it or not and is not so easily manipulated.
Another observation by Brooks parrots my article The Immaturity of Obamanomics. Here Brooks points out the futility of trying to scientifically quantify human behavior and spending habits, “The liberal technicians have an impressive certainty about them. They have amputated those things that can’t be contained in models, like emotional contagions, cultural particularities and webs of relationships. As a result, everything is explainable and predictable. They can stand on the platform of science and dismiss the poor souls down below.” The issue of course is adhering to Keynesian dogma, such as “liberal technician” Paul Krugman. Keynesian models and projections are simply speculative fairy tales, but the likes of Paul Krugman refuses to take his head out of the ground to look around at the real world. Brooks writes, “If the government borrows trillions of dollars, this will increase public anxiety and uncertainty, the conservatives worry. The liberal technicians brush aside this soft-headed mush. These psychological concerns are mythological, they say. That’s gaseous blathering from those who lack quantitative rigor;” this statements pretty much defines every Paul Krugman article I have ever read, or I’m sure he has ever written.
So what is the answer? Well it’s pretty much the opposite of anything Paul Krugman espouses. In the real world you don’t borrow money to reduce the debt. Only in the fantasy of Keynesian macroeconomics, is this considered “a brilliant and aggressive stimulus (model).” It’s what you think it should be. Government cannot create jobs nor will it ever make a profit. In order for the government to receive higher tax revenues, it needs to promote job creation, not raise taxes. This means drastically cutting government expenses and leaving as much capital in the private sector as possible. If there is one area that government can improve is to rein in the naked derivatives market. Since the repeal of Glass-Steagle, the money that was traditionally used to buy stocks and bonds has been invested in these made up instruments, leaving American business grossly under funded; in Germany they have already been outlawed; “When you look around the world at the countries that have come through the recession best, it’s not the countries with the brilliant and aggressive stimulus models. It’s the ones like Germany that had the best economic fundamentals beforehand.”
On might remember that it was Paul Krugman who loudly denounced Germany’s conservative stimulus and austerity, which subsequently boosted their economy to the most robust in all of Europe, contrary to Krugman’s statement, “The key point is that while the advocates of austerity pose as hardheaded realists, doing what has to be done, they can’t and won’t justify their stance with actual numbers — because the numbers do not, in fact, support their position (the numbers Krugman talks about are made up Keynesian numbers).” As I said in Germany Proves the Keynesians Wrong, they were indeed right and Krugman was indeed wrong, just as he is always wrong.
In the final analysis we are left with the obvious, that as much as it was been advertised, you can’t reduce human behavior to a Newtonian equation; human reaction is much closer to Chaos Theory, which produces a pattern but is not necessary predictable. Brooks observed that liberal technicians view “psychological factors like uncertainty and anxiety really are a mirage. The first time a business leader tells you she is holding off on investing because she is scared about the future, you dismiss it as anecdote. But over the past few years, I’ve had hundreds of such conversations.”
As I have said so many times before, Keynesian theory is accepted by those who view government as the answer to society’s problems. Rather than accept the fact, that limited government with reasonable regulations allows the free market to find it’s own level and prosper, Keynesians want constant government influence, unwilling to accept that the economy would work better without it’s interference. Brooks ends with this; “It all makes one doubt the wizardry of the economic surgeons and appreciate the old wisdom of common sense: simple regulations, low debt, high savings, hard work, few distortions. You don’t have to be a genius to come up with an economic policy like that.” It’s like the law of supply and demand; as with gravity, it would exist whether you recognized it or not and is not so easily manipulated.
Thursday, October 14, 2010
Keynesian Economists and Drug Addicts
One of the main Blame Bush talking points is that the economy was in such bad shape after the Bush meltdown, that it will take more than the last 18 months to turn the economy around; and there is some truth to this. The problem is Obama seems to be going in the same direction that Bush was going in when the economy failed. While the sub-prime banking failure pushed the economy over the edge, the economy was already suffering a slow down that caused Bush to institute a $300 billion stimulus plan. The cause of the economic slowdown was primarily the rising cost of oil, which had risen to from $45 a barrel at the end of 2006, to $80 a barrel at the end of 2007 (it would continue to rise to $135 a barrel in 2008). So one could argue that the recession and banking meltdown, while closely related at the time, are now two different problems. And with the banks repaying the TARP (Troubled Asset Relief Program) money and oil prices at least the same as 2007 levels, it would seem the economy was ripe for a Keynesian stimulus. The problem is Keynesian economics is a farce and stimuluses don't ever work.
President Obama poured over $800 billion into the American economy as a stimulus with almost nothing to show for it. He said this stimulus would be dealt out to shovel ready projects to get the economy going again. But what became obvious almost immediately, was the money instead disappeared into state coffers, unemployment insurance and left wing projects dreamed up by the Apollo Alliance (the liberal think tank that wrote the stimulus bill). This left even the heavily partisan Paul Krugman, to denounce in several of his Op-Ed pieces that the stimulus wasn’t a stimulus. Paul Krugman said that the $800 billion stimulus needed to be much larger and used more for stimulus projects, such a repairing and building infrastructure, such as a rail tunnel so workers in New Jersey will have less traffic when they drive to and from New York, even though both states have unemployment rates over 10%. While Krugman has not given a specific figure, one can suppose that he is talking trillions of dollars; this would be added to the $2.5 trillion debt left by 8 years of Bush Administration and the additional $2.5 trillion in debt already attributed to President Obama in his first two years. And of course, if a theoretical $1.5 trillion 2nd stimulus did not kick start the economy, than Krugman would say it’s because it was also not big enough. I would like to borrow a line from Krugmaniswrong.com who deconstructs every Paul Krugman Op-Ed piece. “They convince themselves that if only they had “more” everything would work perfect. Two types of people in this world have that mentality. Keynesian economists and drug addicts.”
But in a rare refreshing moment, President Obama in a recent interview with the New York Times, conceded that the shovel ready projects his stimulus was supposed fund, not only didn't exist, but there is "No such thing as shovel-ready projects". But it does make one wonder, then where did all the money really go? All that is necessary now is for the President to realize that government cannot create jobs; that borrowing large amounts of money to stimulate the economy and loan to bankers, makes about as much sense as cutting taxes without cutting spending, and simultaneously fighting two wars. And finally, while cutting taxes is not the answer to everything, increasing taxes is certainly the way to increase unemployment, especially raising taxes on the top 2% who are the ones that will most likely fund most of the new jobs. But I may be asking for way to much.
President Obama poured over $800 billion into the American economy as a stimulus with almost nothing to show for it. He said this stimulus would be dealt out to shovel ready projects to get the economy going again. But what became obvious almost immediately, was the money instead disappeared into state coffers, unemployment insurance and left wing projects dreamed up by the Apollo Alliance (the liberal think tank that wrote the stimulus bill). This left even the heavily partisan Paul Krugman, to denounce in several of his Op-Ed pieces that the stimulus wasn’t a stimulus. Paul Krugman said that the $800 billion stimulus needed to be much larger and used more for stimulus projects, such a repairing and building infrastructure, such as a rail tunnel so workers in New Jersey will have less traffic when they drive to and from New York, even though both states have unemployment rates over 10%. While Krugman has not given a specific figure, one can suppose that he is talking trillions of dollars; this would be added to the $2.5 trillion debt left by 8 years of Bush Administration and the additional $2.5 trillion in debt already attributed to President Obama in his first two years. And of course, if a theoretical $1.5 trillion 2nd stimulus did not kick start the economy, than Krugman would say it’s because it was also not big enough. I would like to borrow a line from Krugmaniswrong.com who deconstructs every Paul Krugman Op-Ed piece. “They convince themselves that if only they had “more” everything would work perfect. Two types of people in this world have that mentality. Keynesian economists and drug addicts.”
But in a rare refreshing moment, President Obama in a recent interview with the New York Times, conceded that the shovel ready projects his stimulus was supposed fund, not only didn't exist, but there is "No such thing as shovel-ready projects". But it does make one wonder, then where did all the money really go? All that is necessary now is for the President to realize that government cannot create jobs; that borrowing large amounts of money to stimulate the economy and loan to bankers, makes about as much sense as cutting taxes without cutting spending, and simultaneously fighting two wars. And finally, while cutting taxes is not the answer to everything, increasing taxes is certainly the way to increase unemployment, especially raising taxes on the top 2% who are the ones that will most likely fund most of the new jobs. But I may be asking for way to much.
Wednesday, October 6, 2010
Krugman Reduced To Shilling for the Democrats
The other day I heard a liberal radio program KSCO “What’s Left” rag on the Republican Pledge plan. The primary ammunition was an article by Paul Krugman (Downhill With the G.O.P.), where he cites another economist Howard Gleckman of the “nonpartisan” (quotations added) Tax Policy Center has done the math. As he points out, the only way to balance the budget by 2020, while simultaneously (a) making the Bush tax cuts permanent and (b) protecting all the programs Republicans say they won’t cut, is to completely abolish the rest of the federal government: “No more national parks, no more Small Business Administration loans, no more export subsidies, no more N.I.H. No more Medicaid (one-third of its budget pays for long-term care for our parents and others with disabilities). No more child health or child nutrition programs. No more highway construction. No more homeland security. Oh, and no more Congress.” The deejay hammered anyone who called with an alternate view with, “There is no way this will work, look at what a nonpartisan economist said.”
The flaws in Krugman's article starts with the Tax Policy Center, which is anything but non-partisan, and is part of the Brookings Institute, which is a progressive think tank that embraces Krugman's Neo-Keynesian theories. As I said before Krugman views taxes and revenue as a zero sum gain; the more taxes the more revenues, the less taxes to less revenue. They refused to acknowledge decades of history that that have shown higher tax rates create diminishing returns (see video below). During the Kennedy, Reagan, Clinton and Bush years, tax cuts actually increased tax revenues; the fact that Regan and Bush redistributed increased government spending as debt, does not negate the fact that the tax cuts did increase revenues. The true root of Krugman's belief system is businesses in the free market can not be trusted to properly invest and spend the money they create, so it is necessary to heavily tax all earnings so the government can re-distribute earnings through targeted tax breaks and low interest loans; in other words they want to tax business and loan the money back to them as they see fit.
Krugman is also using the Progressive spin on the Bush tax cuts. What they want you to believe is Congress is going to cut taxes. This of course is ludicrous, because the tax cuts we are talking about occurred 10 years ago. What the Democrats are talking about is raising taxes, about $700 billion over 10 years on those that make over $250,000, which they call the rich. What’s interesting is the Democrats have already spent the money and are bemoaning the fact that if they can’t raise these taxes on the rich, then they will have to borrow the money, which will add to the deficit. Don’t you wish you could use this logic on your boss? There is also no doubt in anyone’s mind any tax increases will increase unemployment and reduce GNP by as much or more as the tax revenue it raises. And since the $700 billion figure is based on 2009 GNP computed over 10 years, there is a real possibility that the tax revenues will be considerably less as the GNP is reduced.
When John Maynard Keynes wrote his theories on macroeconomics, he was still a firm believer in the free market and argued that his theories were designed to save capitalism. He was also pragmatic; when asked what he would do if he was wrong about any of his theories, he was famous for saying, “I will change my mind, what do you do?” But Krugman's Neo-Keynesian theories have thrown out any real attempt to save capitalism, concentrating more on Social Justice and the redistribution of wealth; in this matter Krugman has become what Keynes called idiotic, which is a Socialist; more accurately a New Deal Socialist. Krugman has forsaken any real economic thought and has simply created a partisan economic theory based on the spending wants of the progressive Democrats. This was driven home in his most recent article “Fear and Favor”. In this article Krugman throws away any credibility he might have had left, and shows himself as nothing but a shill for the Democratic party. While he had one passing economic comment about the Bush tax cuts, the rest of the article was a non-economic tirade against Fox News; starting with calling the Tea Party the Klu Klux Klan, “A note to Tea Party activists: This is not the movie you think it is. You probably imagine that you’re starring in “The Birth of a Nation.” Then, being true to form, he marks off a list of the tired old complaints we have already heard about Fox from the progressives, “Ministry of Propagana”, "Orwellian fair and balanced”, and of course Fox now runs the Republican Party, which has been bought and paid for by Rupert Murdoch.
So now we know Paul Krugman and Robert Gibbs pretty much have the same job. The only difference is, much like Krugman’s allegation that Fox hires lawyers, scientists and economic prostitutes, Krugman complains most about what he has become, and much like the Climatologists that worked in obscurity until global warming reared it's ugly head, he has sold his soul to extend his 15 minutes of fame beyond it's usefulness. I will leave you with these three You Tube videos. The first is an Obama and Hillary debate. In this debate, Obama said he would raise the Capital Gains tax, even though it would reduce tax revenues for the sake of "fairness". This is the same logic used by Krugman and the political elite who really don’t care about tax revenues, they just want control of income so they can be the ones who re-distribute wealth according to their economic planning.
The second is a debate between Linda McMahon and Dick Blumethal for a Connecticut Senate seat, which has become an overnight sensation on "how to create a job". This is the best example I have seen that demonstrates how someone as intelligent as Paul Krugman, is so clueless to how the world really works outside academia.
And the third is Nancy Pelosi explaining how food stamps and unemployment insurance are the best way to create jobs.
The flaws in Krugman's article starts with the Tax Policy Center, which is anything but non-partisan, and is part of the Brookings Institute, which is a progressive think tank that embraces Krugman's Neo-Keynesian theories. As I said before Krugman views taxes and revenue as a zero sum gain; the more taxes the more revenues, the less taxes to less revenue. They refused to acknowledge decades of history that that have shown higher tax rates create diminishing returns (see video below). During the Kennedy, Reagan, Clinton and Bush years, tax cuts actually increased tax revenues; the fact that Regan and Bush redistributed increased government spending as debt, does not negate the fact that the tax cuts did increase revenues. The true root of Krugman's belief system is businesses in the free market can not be trusted to properly invest and spend the money they create, so it is necessary to heavily tax all earnings so the government can re-distribute earnings through targeted tax breaks and low interest loans; in other words they want to tax business and loan the money back to them as they see fit.
Krugman is also using the Progressive spin on the Bush tax cuts. What they want you to believe is Congress is going to cut taxes. This of course is ludicrous, because the tax cuts we are talking about occurred 10 years ago. What the Democrats are talking about is raising taxes, about $700 billion over 10 years on those that make over $250,000, which they call the rich. What’s interesting is the Democrats have already spent the money and are bemoaning the fact that if they can’t raise these taxes on the rich, then they will have to borrow the money, which will add to the deficit. Don’t you wish you could use this logic on your boss? There is also no doubt in anyone’s mind any tax increases will increase unemployment and reduce GNP by as much or more as the tax revenue it raises. And since the $700 billion figure is based on 2009 GNP computed over 10 years, there is a real possibility that the tax revenues will be considerably less as the GNP is reduced.
When John Maynard Keynes wrote his theories on macroeconomics, he was still a firm believer in the free market and argued that his theories were designed to save capitalism. He was also pragmatic; when asked what he would do if he was wrong about any of his theories, he was famous for saying, “I will change my mind, what do you do?” But Krugman's Neo-Keynesian theories have thrown out any real attempt to save capitalism, concentrating more on Social Justice and the redistribution of wealth; in this matter Krugman has become what Keynes called idiotic, which is a Socialist; more accurately a New Deal Socialist. Krugman has forsaken any real economic thought and has simply created a partisan economic theory based on the spending wants of the progressive Democrats. This was driven home in his most recent article “Fear and Favor”. In this article Krugman throws away any credibility he might have had left, and shows himself as nothing but a shill for the Democratic party. While he had one passing economic comment about the Bush tax cuts, the rest of the article was a non-economic tirade against Fox News; starting with calling the Tea Party the Klu Klux Klan, “A note to Tea Party activists: This is not the movie you think it is. You probably imagine that you’re starring in “The Birth of a Nation.” Then, being true to form, he marks off a list of the tired old complaints we have already heard about Fox from the progressives, “Ministry of Propagana”, "Orwellian fair and balanced”, and of course Fox now runs the Republican Party, which has been bought and paid for by Rupert Murdoch.
So now we know Paul Krugman and Robert Gibbs pretty much have the same job. The only difference is, much like Krugman’s allegation that Fox hires lawyers, scientists and economic prostitutes, Krugman complains most about what he has become, and much like the Climatologists that worked in obscurity until global warming reared it's ugly head, he has sold his soul to extend his 15 minutes of fame beyond it's usefulness. I will leave you with these three You Tube videos. The first is an Obama and Hillary debate. In this debate, Obama said he would raise the Capital Gains tax, even though it would reduce tax revenues for the sake of "fairness". This is the same logic used by Krugman and the political elite who really don’t care about tax revenues, they just want control of income so they can be the ones who re-distribute wealth according to their economic planning.
The second is a debate between Linda McMahon and Dick Blumethal for a Connecticut Senate seat, which has become an overnight sensation on "how to create a job". This is the best example I have seen that demonstrates how someone as intelligent as Paul Krugman, is so clueless to how the world really works outside academia.
And the third is Nancy Pelosi explaining how food stamps and unemployment insurance are the best way to create jobs.
Sunday, September 5, 2010
The Bloom is Off the Rose of Keynesian Economics
Sometimes Paul Krugman manipulates the truth to try and make his neo- Keynesian theory work and other times he just ignores reality and lies. In his ‘The Real Story” article, he makes the ludicrous statement “ inflation always falls during sustained periods of high unemployment and this time should be no different.” Apparently he forgot the Carter Administration where high unemployment and inflation was so rampant that they had to make up a new word for it (Stagflation). You may also remember that I said (Germany Proves Keynesians and Obama Wrong) Krugman would try and spin Germany’s rebound that resulted from its austerity measures; 9% raise in GDP and a drop in unemployment in a single quarter. This was after this remark in his Op-Ed piece “That 30’s Feeling;
"Many economists, myself included, regard this turn to austerity (Germany’s) as a huge mistake. It raises memories of 1937, when F.D.R.’s premature attempt to balance the budget helped plunge a recovering economy back into severe recession. And here in Germany, a few scholars see parallels to the policies of Heinrich Brüning, the chancellor from 1930 to 1932, whose devotion to financial orthodoxy ended up sealing the doom of the Weimar Republic. But despite these warnings, the deficit hawks are prevailing in most places — and nowhere more than here, where the government has pledged 80 billion euros, almost $100 billion, in tax increases and spending cuts even though the economy continues to operate far below capacity.
Well this was his statement in his Sept 5 Op-Ed, “The Real Story;”
Oh, and don’t tell me that Germany proves that austerity, not stimulus, is the way to go. Germany actually did quite a lot of stimulus — the austerity is all in the future. Also, it never had a housing bubble that burst. And with all that, German G.D.P. is still further below its pre-crisis peak than American G.D.P. True, Germany has done better in terms of employment — but that’s because strong unions and government policy have prevented American-style mass layoffs.
There is simply no way to reconcile his forecast and the180 deg spin. Paul Krugman is running scared.
What Krugman continues to harp on however is a lack of inflation as the US borrowed itself into an additional $12 trillion hole over the last 10 years; $4 trillion in last two years alone. Krugman is so sure of his neo-Keynesian belief that inflation cannot occur with sustained unemployment, that he is willing to bet the farm (aka the US and world economy) on it. The reason however, that the US economy has not experienced any inflation is mainly due to reasons that have nothing to do with unemployment, but are nonetheless very well known by real economists; the first being the cause of the Carter years of stagflation. Here was a classic example of a Neo-Keynesian refusal to do as John Maynard Keynes said to do when situations change, “I change my mind; what do you do?” The reason is centered on the price oil and how its sold. During the Carter years the US was mired in a recession and suddenly oil prices increased, resulting in inflation. The reason is simple and obvious and still very true today. The world buys and sells oil in US dollars. This leads in many ways to the tail wagging the dog; resulting in the price of oil determining the value of the dollar. As long as oil prices are stable and low, the US will dollar will tend to stay stable with low inflation. But if oil starts to spike, then inflation will set in. In the summer of 2008 the US suffered from oil prices spiking to over $4 @ gal. The result was an immediate increase in inflation from 3% to 5.6%, which fell off as soon as oil went down to its previous prices.
Next you have the Fed keeping interest rates artificially low. This can only continue as long as the US Treasury can keep selling low yield Treasury securities. One reason the Treasury securities market continues to stay relatively healthy is that Europe is 10 years closer to the Keynesian “end point” than the US, so even the small yield Treasury securities seem a better investment then those based on the Euro; but that is starting to change. Recently the Fed has announced they are going to buy more Treasury securities themselves, which will increase monetization and eventually lead to increased inflation. Another obvious issue is as the US goes deeper into the debt, the less stable the dollar becomes. Sooner or later, there will be a demand for higher yields from US Treasury securities to cover the increased risk that the added debt will bring upon the economy on which they are based . Once the Federal securities yields go up, you won’t be able to stop inflation with 40% unemployment.
Last, but certainly not least you have China. For years now, China has continually devalued its currency so it can sell its products a lower prices. This has especially helped to pump up the value of the dollar. There has been criticism of this from the other world markets, but China knows on what side it’s toast is buttered on and continues to prop up the currency of it’s biggest trading partner. China has also been one of Washington’s biggest critics for it’s Keynesian deficit spending and has periodically sold off a percentage of its US Treasury securities, of which it holds about $840 billion worth, to goad the US to reduce its debt. A higher valued Yen would certainly lead to inflation.
The world wide opinion of Keynesian economics and it’s debt fueled spending programs has not produced the results it promised, and the realization it has finally reached it’s "end point." As I wrote in another blog article It Wasn't All Bush, Keynesian economics has caused us, particularly since the 1980s, to continually borrow prosperity from our grandchildren and great grandchildren. When Reagan became president in 1981 the debt was $700 billion, when he left 8 years later it was $3 trillion; in today’s money that’s an increase of $5.75 trillion. “Since the 1980s, Americans have consumed more than they produced—and they have made up the difference by borrowing. Two decades of easy money and innovative financial products meant that virtually anyone could borrow any amount of money for any purpose.” (www.newsweek.com). Like the gangsters after prohibition, the bankers and the Keynesian will try and put the smoke back in the box, but is over. It is time to get back to being responsible again and to go out and make an honest dollar.
"Many economists, myself included, regard this turn to austerity (Germany’s) as a huge mistake. It raises memories of 1937, when F.D.R.’s premature attempt to balance the budget helped plunge a recovering economy back into severe recession. And here in Germany, a few scholars see parallels to the policies of Heinrich Brüning, the chancellor from 1930 to 1932, whose devotion to financial orthodoxy ended up sealing the doom of the Weimar Republic. But despite these warnings, the deficit hawks are prevailing in most places — and nowhere more than here, where the government has pledged 80 billion euros, almost $100 billion, in tax increases and spending cuts even though the economy continues to operate far below capacity.
Well this was his statement in his Sept 5 Op-Ed, “The Real Story;”
Oh, and don’t tell me that Germany proves that austerity, not stimulus, is the way to go. Germany actually did quite a lot of stimulus — the austerity is all in the future. Also, it never had a housing bubble that burst. And with all that, German G.D.P. is still further below its pre-crisis peak than American G.D.P. True, Germany has done better in terms of employment — but that’s because strong unions and government policy have prevented American-style mass layoffs.
There is simply no way to reconcile his forecast and the180 deg spin. Paul Krugman is running scared.
What Krugman continues to harp on however is a lack of inflation as the US borrowed itself into an additional $12 trillion hole over the last 10 years; $4 trillion in last two years alone. Krugman is so sure of his neo-Keynesian belief that inflation cannot occur with sustained unemployment, that he is willing to bet the farm (aka the US and world economy) on it. The reason however, that the US economy has not experienced any inflation is mainly due to reasons that have nothing to do with unemployment, but are nonetheless very well known by real economists; the first being the cause of the Carter years of stagflation. Here was a classic example of a Neo-Keynesian refusal to do as John Maynard Keynes said to do when situations change, “I change my mind; what do you do?” The reason is centered on the price oil and how its sold. During the Carter years the US was mired in a recession and suddenly oil prices increased, resulting in inflation. The reason is simple and obvious and still very true today. The world buys and sells oil in US dollars. This leads in many ways to the tail wagging the dog; resulting in the price of oil determining the value of the dollar. As long as oil prices are stable and low, the US will dollar will tend to stay stable with low inflation. But if oil starts to spike, then inflation will set in. In the summer of 2008 the US suffered from oil prices spiking to over $4 @ gal. The result was an immediate increase in inflation from 3% to 5.6%, which fell off as soon as oil went down to its previous prices.
Next you have the Fed keeping interest rates artificially low. This can only continue as long as the US Treasury can keep selling low yield Treasury securities. One reason the Treasury securities market continues to stay relatively healthy is that Europe is 10 years closer to the Keynesian “end point” than the US, so even the small yield Treasury securities seem a better investment then those based on the Euro; but that is starting to change. Recently the Fed has announced they are going to buy more Treasury securities themselves, which will increase monetization and eventually lead to increased inflation. Another obvious issue is as the US goes deeper into the debt, the less stable the dollar becomes. Sooner or later, there will be a demand for higher yields from US Treasury securities to cover the increased risk that the added debt will bring upon the economy on which they are based . Once the Federal securities yields go up, you won’t be able to stop inflation with 40% unemployment.
Last, but certainly not least you have China. For years now, China has continually devalued its currency so it can sell its products a lower prices. This has especially helped to pump up the value of the dollar. There has been criticism of this from the other world markets, but China knows on what side it’s toast is buttered on and continues to prop up the currency of it’s biggest trading partner. China has also been one of Washington’s biggest critics for it’s Keynesian deficit spending and has periodically sold off a percentage of its US Treasury securities, of which it holds about $840 billion worth, to goad the US to reduce its debt. A higher valued Yen would certainly lead to inflation.
The world wide opinion of Keynesian economics and it’s debt fueled spending programs has not produced the results it promised, and the realization it has finally reached it’s "end point." As I wrote in another blog article It Wasn't All Bush, Keynesian economics has caused us, particularly since the 1980s, to continually borrow prosperity from our grandchildren and great grandchildren. When Reagan became president in 1981 the debt was $700 billion, when he left 8 years later it was $3 trillion; in today’s money that’s an increase of $5.75 trillion. “Since the 1980s, Americans have consumed more than they produced—and they have made up the difference by borrowing. Two decades of easy money and innovative financial products meant that virtually anyone could borrow any amount of money for any purpose.” (www.newsweek.com). Like the gangsters after prohibition, the bankers and the Keynesian will try and put the smoke back in the box, but is over. It is time to get back to being responsible again and to go out and make an honest dollar.
Saturday, August 28, 2010
Germany Proves the Keynesians and Obama Wrong
Keynesian has been one of the predominant economic theories since the end of WWII. The United States is about 10 years behind Europe primarily because of the post WWII economic boom that occurred in the US, countering the Keynesian doom-sayers who predicted high unemployment and slow growth after the war. This delay has allowed economists in the US to look at Europe as kind of a crystal ball into the future. In March/April of this year there was a meeting of the G20 in England. There Obama was rebuffed for his Keynesian ways and was told Europe had had enough of high unemployment and low GDP, and rather than spend themselves into prosperity, they were going to tighten there belts and cut spending toward a path of austerity.
Paul Krugman, one of the loudest voices for Keynesian economics was beside himself. In a now infamous OP-Ed named “That ‘30s Feeling”, Krugman lambasted the Germans. “What’s the economic logic behind the government’s moves? The answer, as far as I can tell, is that there isn’t any. Press German officials to explain why they need to impose austerity on a depressed economy, and you get rationales that don’t add up. Point this out, and they come up with different rationales, which also don’t add up.” The reason Krugman was so adamant against austerity is one of Keynesian’s primary pillars is stimulus or perish; but he saw all this cheap money available to the Germans, “The key point is that while the advocates of austerity pose as hardheaded realists, doing what has to be done, they can’t and won’t justify their stance with actual numbers — because the numbers do not, in fact, support their position. Nor can they claim that markets are demanding austerity. On the contrary, the German government remains able to borrow at rock-bottom interest rates.” Krugman went on to forecast,“There will, of course, be a price for this posturing. Only part of that price will fall on Germany: German austerity will worsen the crisis in the euro area, making it that much harder for Spain and other troubled economies to recover.”
David Brooks wrote in his Op-ed piece “The Parent Model”, the German financial minister countered the Keynesians with, “Governments should not be addicted to borrowing as a quick fix to stimulate demand”. (No wonder Krugman hit the ceiling!). The Germans instead were looking reduce debt, balance budgets and increase confidence. Well it’s been 5 months and what has happened? The US is still mired in a recession with 9% employment and a flat GDP. Germany on the other hand has seen 9% growth in one quarter and unemployment has fallen. Brooks went on to say, “The results do underline one essential truth: Stimulus size is not the key factor in determining how quickly a country emerges from recession. The US tried big, but is emerging slowly, The Germans tried small and are emerging quite nicely." Obviously this is only one quarter and as Brooks mentioned, 9% is not a sustainable level of growth, but I'm sure Obama would rather have seen similar results prior to the upcoming November elections.
Since the Keynesians and Paul Krugman have been tone deaf to current economic trends, economists have been looking in other directions. One Global Investment company that has been gaining a lot of respect is PIMCO and their New Normal. "The result is a prolonged pause, or in some cases, a violent reversal in certain concepts that markets had taken for granted. We referred to it as the demise of the “great age” of private leverage, asset- and credit-based entitlements, self-regulation, policy moderation, and shrinking direct government involvement. Not surprisingly given the extent of the gains that were privatized and the losses that are now being socialized, the demise is occurring in the context of popular anger, confusion and what one of our speakers called “a morality play” in parliaments around the world." PIMCO describes this economic world view as a result of what they termed the Keynesian "end point;" from Bloomberg , “Time, devaluations, and debt restructurings might be the only way out for many nations,” Crescenzi wrote in an e-mailed note titled “Keynesian Endpoint” that referenced the Great Depression era economist John Maynard Keynes. Debt-fueled spending programs aimed at combating the global financial crisis of 2008 are among policy tools now “being seen as a magic elixir that has morphed into poison.”
To be fair to John Maynard Keynes, there is little doubt that we would consider it laughable that Paul Krugman is a self described neo-Keynesian. Keynes was a pragmatist and was continually reconstructing his theories and determining exactly how much control the government need take to steer the economy. He did not believe in any absolutes and was not the political harlequin Paul Krugman has become. Perhaps Krugman should listen to Keynes when he said, "When the facts change, I change my mind. What do you do, sir?"
Paul Krugman, one of the loudest voices for Keynesian economics was beside himself. In a now infamous OP-Ed named “That ‘30s Feeling”, Krugman lambasted the Germans. “What’s the economic logic behind the government’s moves? The answer, as far as I can tell, is that there isn’t any. Press German officials to explain why they need to impose austerity on a depressed economy, and you get rationales that don’t add up. Point this out, and they come up with different rationales, which also don’t add up.” The reason Krugman was so adamant against austerity is one of Keynesian’s primary pillars is stimulus or perish; but he saw all this cheap money available to the Germans, “The key point is that while the advocates of austerity pose as hardheaded realists, doing what has to be done, they can’t and won’t justify their stance with actual numbers — because the numbers do not, in fact, support their position. Nor can they claim that markets are demanding austerity. On the contrary, the German government remains able to borrow at rock-bottom interest rates.” Krugman went on to forecast,“There will, of course, be a price for this posturing. Only part of that price will fall on Germany: German austerity will worsen the crisis in the euro area, making it that much harder for Spain and other troubled economies to recover.”
David Brooks wrote in his Op-ed piece “The Parent Model”, the German financial minister countered the Keynesians with, “Governments should not be addicted to borrowing as a quick fix to stimulate demand”. (No wonder Krugman hit the ceiling!). The Germans instead were looking reduce debt, balance budgets and increase confidence. Well it’s been 5 months and what has happened? The US is still mired in a recession with 9% employment and a flat GDP. Germany on the other hand has seen 9% growth in one quarter and unemployment has fallen. Brooks went on to say, “The results do underline one essential truth: Stimulus size is not the key factor in determining how quickly a country emerges from recession. The US tried big, but is emerging slowly, The Germans tried small and are emerging quite nicely." Obviously this is only one quarter and as Brooks mentioned, 9% is not a sustainable level of growth, but I'm sure Obama would rather have seen similar results prior to the upcoming November elections.
Since the Keynesians and Paul Krugman have been tone deaf to current economic trends, economists have been looking in other directions. One Global Investment company that has been gaining a lot of respect is PIMCO and their New Normal. "The result is a prolonged pause, or in some cases, a violent reversal in certain concepts that markets had taken for granted. We referred to it as the demise of the “great age” of private leverage, asset- and credit-based entitlements, self-regulation, policy moderation, and shrinking direct government involvement. Not surprisingly given the extent of the gains that were privatized and the losses that are now being socialized, the demise is occurring in the context of popular anger, confusion and what one of our speakers called “a morality play” in parliaments around the world." PIMCO describes this economic world view as a result of what they termed the Keynesian "end point;" from Bloomberg , “Time, devaluations, and debt restructurings might be the only way out for many nations,” Crescenzi wrote in an e-mailed note titled “Keynesian Endpoint” that referenced the Great Depression era economist John Maynard Keynes. Debt-fueled spending programs aimed at combating the global financial crisis of 2008 are among policy tools now “being seen as a magic elixir that has morphed into poison.”
To be fair to John Maynard Keynes, there is little doubt that we would consider it laughable that Paul Krugman is a self described neo-Keynesian. Keynes was a pragmatist and was continually reconstructing his theories and determining exactly how much control the government need take to steer the economy. He did not believe in any absolutes and was not the political harlequin Paul Krugman has become. Perhaps Krugman should listen to Keynes when he said, "When the facts change, I change my mind. What do you do, sir?"
Friday, July 9, 2010
Paul Krugman and the Folly of Keynesian Economics + "Fear the Boom and Bust" Rap
Paul Krugman just may be the icon of intellectual dishonesty. His continuing efforts to prove the already much discredited Keynesian theory of economics shows him to be the most anti-perspicacious economist in the current war against the free market. In his recent article, “Pushing the Unemployed With Penny-Pinching”, Krugman decried the fact that the federal government would not extend state Unemployment Insurance (UI) as “everyone took it for granted that UI that normally terminates after 26 weeks would be extended in times of persistence joblessness” (everyone?). The fact that unemployment across the nation has already been extended by 26 weeks seemed to have slipped his mind. What congress has done is decided not to extend any more UI extensions. Krugman defends extending the extensions, calling the fiscally responsible coalition in the Senate “heartless” or “clueless”. On one hand he considers it clueless to believe that extended UI “is a disincentive for them to seek new work”. Why? Well because there is some unknown “recent economic research” that says it’s not so. On the other hand he claims that UI will put money in peoples pockets that will help support consumer spending; I doubt most people would find any disposable income with a 40% reduction in pay.
This of course is the fallacy of Keynesian theory; 1) it ignores the very human decisions (and behaviors) Keynesians fault for inefficient economic outcomes; and 2) it exudes that re-distributing wealth will somehow stimulate the economy. Every time Demand Side economics extends misery, the Keynesians claim victory when the free market finally recovers despite their best efforts, and every time Supply-Side economics (reduced taxes and government spending) works, the Keynesian claim there was some other cause. One has to remember why Keynesian theory exists in the first place; it's based on a dislike of the free market and a love of government. The intellectually dishonest love to explain that President Obama is not a socialist because he does not believe in state ownership of the means of production. But in most other ways Keynesian economics is like socialism; and it would be great if it worked, but like all ideas that believe government needs to dominate over the private sector, it always ends in misery for the common man.It's the need of bureaucrats and government officials to control everything and a belief that an economy can be planned and supply and demand can be manipulated to create social justice through redistribution of wealth. What is lost on the Keynesians is supply and demand is a law of human nature, trying to manipulate supply and demand is like trying to manipulate gravity; you can stay up in the air for a while, but eventually you have to come down to earth.
This is just flat out genius.
This of course is the fallacy of Keynesian theory; 1) it ignores the very human decisions (and behaviors) Keynesians fault for inefficient economic outcomes; and 2) it exudes that re-distributing wealth will somehow stimulate the economy. Every time Demand Side economics extends misery, the Keynesians claim victory when the free market finally recovers despite their best efforts, and every time Supply-Side economics (reduced taxes and government spending) works, the Keynesian claim there was some other cause. One has to remember why Keynesian theory exists in the first place; it's based on a dislike of the free market and a love of government. The intellectually dishonest love to explain that President Obama is not a socialist because he does not believe in state ownership of the means of production. But in most other ways Keynesian economics is like socialism; and it would be great if it worked, but like all ideas that believe government needs to dominate over the private sector, it always ends in misery for the common man.It's the need of bureaucrats and government officials to control everything and a belief that an economy can be planned and supply and demand can be manipulated to create social justice through redistribution of wealth. What is lost on the Keynesians is supply and demand is a law of human nature, trying to manipulate supply and demand is like trying to manipulate gravity; you can stay up in the air for a while, but eventually you have to come down to earth.
This is just flat out genius.
Thursday, July 1, 2010
Paul Krugman is Really Worried and That's a Good Thing
Paul Krugman is beside himself that Germany and other European nations are not going to continue trying to spend themselves out of the current recession; thank god! The economy is like an engine and if it running good, it creates enough goods and services to keep everyone secure and happy. The engine uses money as fuel. The owner of the engine also pays it’s workers to keep the engine running good, makes what the workers want to buy and the workers use their wages buy the goods and services produced by the engine; this is called supply and demand. When money is not used to buy goods and services, it is used as more fuel to run the engine. The system is pretty much self correcting, except when a company gets so big it can sell products and services at a loss to drive it’s competition out of business. This is where the government steps in to make sure this doesn’t happen. However the government has also taken control of all the fuel (money) and taxes the engine owner and workers to redistribute tax money as they see fit.
Every once in a while, the engine’s fuel tank runs low and the engine starts to sputter. Now there are two theories on how to fix this problem. One is called “supply side” and the other is called “demand side”. The supply-siders believe you should help the engine owner, by cutting spending and reducing taxes on the workers and the engine owner. This is so the owner can buy more fuel and the workers can buy products. The demand-siders (or Keynesians) believe the answer is to raise taxes, borrow large sums of money and distribute it to the workers through particular workings of the engine as they see fit. Both these concepts have been tried and history shows that the supply side solution acts by filling the fuel tank, and actually results in more money going back to the government then with the higher taxes. The demand side solution has never worked. It acts like pouring gas down the carburetor; yes the engine will run, abet poorly, but only as long you pour in the gas. As soon as you stop, the engine will stop and the fuel tank will still be empty; plus the workers and engine owner will be burdened by higher taxes and will still have to pay back all the money borrowed by the government.
The big demand-sider these days is Paul Krugman. During the recent G20 meeting, the European countries have decided that after 30 years of trying to make their welfare states work and watching countries like Greece and Spain going bankrupt, they are going to turn away from Keynesian theory, unlike President Obama and stop borrowing money to infinitum. This led Mr Krugman to hysterically forecast that the world is now headed for a depression. The last time this happened, was the end of WWII. The Keynesians hysterically warned that if the US did not maintain wartime control over the economy the US was economically doomed. The result of course was an economy that grew at record rates. If you get one thing from this, let it be that when the Keynesians becomes hysterical, we’re probably doing the right thing.
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Every once in a while, the engine’s fuel tank runs low and the engine starts to sputter. Now there are two theories on how to fix this problem. One is called “supply side” and the other is called “demand side”. The supply-siders believe you should help the engine owner, by cutting spending and reducing taxes on the workers and the engine owner. This is so the owner can buy more fuel and the workers can buy products. The demand-siders (or Keynesians) believe the answer is to raise taxes, borrow large sums of money and distribute it to the workers through particular workings of the engine as they see fit. Both these concepts have been tried and history shows that the supply side solution acts by filling the fuel tank, and actually results in more money going back to the government then with the higher taxes. The demand side solution has never worked. It acts like pouring gas down the carburetor; yes the engine will run, abet poorly, but only as long you pour in the gas. As soon as you stop, the engine will stop and the fuel tank will still be empty; plus the workers and engine owner will be burdened by higher taxes and will still have to pay back all the money borrowed by the government.
The big demand-sider these days is Paul Krugman. During the recent G20 meeting, the European countries have decided that after 30 years of trying to make their welfare states work and watching countries like Greece and Spain going bankrupt, they are going to turn away from Keynesian theory, unlike President Obama and stop borrowing money to infinitum. This led Mr Krugman to hysterically forecast that the world is now headed for a depression. The last time this happened, was the end of WWII. The Keynesians hysterically warned that if the US did not maintain wartime control over the economy the US was economically doomed. The result of course was an economy that grew at record rates. If you get one thing from this, let it be that when the Keynesians becomes hysterical, we’re probably doing the right thing.
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