The Austerity Assassins

Krugthulu:

When David Cameron became PM, and announced his austerity plans — buying completely into both the confidence fairy and the invisible bond vigilantes — many were the hosannas, from both sides of the Atlantic. Pundits here urged Obama to “do a Cameron”; Cameron and Osborne were the toast of Very Serious People everywhere.

Now Britain is officially in double-dip recession, and has achieved the remarkable feat of doing worse this time around than it did in the 1930s.

Kthug goes on to point out that with the Brits, these are self inflicted wounds- basically Cameron is tightening the cilice on the thigh of England for past sins of the financial markets. However, I wonder how many trillions of dollars of wealth are being left uncreated, leaving tens of millions mired in poverty, as Europe continues it slow death march to the martial beat of Angela Merkel and Wolfgang Schaeuble’s austerity drums?

In other austerity news, this is amusing (in a sick kind of way):

Not long ago, the Dutch were among the hardest of hardline enforcers of budgetary discipline in the euro zone. As the crisis intensified last autumn, the country’s prime minister and finance minister argued that states which failed to control their deficits should face external supervision, fines, or even expulsion from the single currency.

That commitment to fiscal rigour abroad has been undermined by domestic economics and politics. The Netherlands has been hard hit by the slowdown: growth went into reverse in the fourth quarter of 2011, and the International Monetary Fund expects the Dutch economy to be the only core euro zone country to endure recession this year. This puts the country at risk of breaching the euro zone’s deficit targets, and forced ministers to consider more austerity. But the planned cuts proved too harsh for the fragile Liberal-Christian Democrat coalition – and for Geert Wilders’ Freedom Party, on whose support the government relied. Elections now look likely, possibly as early as mid-July.

It also looks like Sarkozy will fall. It should now be obvious to everyone that Krugman has been right all along, and that austerity is the equivalent of bleeding with leeches, except instead of using leaches, you just slit your own throat while telling yourself the math demands it.

*** Update ***

Atrios:

The cunning plan of growing the economy by making sure that nobody but rich people has any money will work! It cannot fail, it can only be failed!

Pretty much.

105 replies
  1. 1
    Tractarian says:

    You had me at Schaeuble.

  2. 2
    BGinCHI says:

    To read Krugman daily is to see that we live in a mad, mad, mad, mad world.

    History is going to shake its head at this period in financial malfeasance.

    Fucking Cassandra.

  3. 3
    Patricia Kayden says:

    Thank goodness Pres O had the sense not to go down the European path.

  4. 4
    Wag says:

    Angela Merkle grew up in East Germany. I wonder if she isn’t a Manchurian Candidate plant from the old Communists, now unfurling plans that will destroy the evil capitalist society that wrecked the Fatherland of her youth.

  5. 5
    Xenos says:

    With Sarkozy down, things will start to get interesting. The French hold even more bad Greek debt than the Germans, but the Germans are not about to bail out their banks if there is a way to squeeze the Greeks some more.

    Meanwhile, German owned supermarkets in Greece are shutting down because people are walking shoplifting all the food out and the employees can’t be bothered to stop them.

  6. 6
    MikeTheZ says:

    It should now be obvious to everyone that Krugman has been right all along

    But Krugman is shrill, so clap louder bitches, austerity for all!

  7. 7
    Belafon (formerly anonevent) says:

    If the recession had started in 2006, we might have learned something. As it is, Obama came in and signed a stimulus which stabilized everything. Therefore, if he had done nothing, things would have gotten better on their own. The American people don’t learn from success because the only time they look up from their television is when they are in pain.

  8. 8

    Well, we have done the austerity dance according to Krugman, and other assorted progressive heroes, so where is our double dip recession?

    lost decade looming – http://dealbook.nytimes.com/20.....e-looming/

  9. 9
    Citizen_X says:

    It’s Merkel, damn it, M-e-r-k-e-l.

  10. 10
    S. cerevisiae says:

    When wingnuts tell me that we can’t borrow any more I counter them with it’s actually the perfect time to borrow and prime the economy with interest rates at all-time lows. When the economy gets humming along again then you tackle the debt.

  11. 11
    Culture of Truth says:

    “If Mr. Hollande were to say that he wants to increase government spending and save less, he’ll lose the confidence of the financial markets,” – Peter Altmaier, parliamentary whip of German Christian Democrats.

    oh noes u luz konfidenz

  12. 12
    The Snarxist Formerly Known as Kryptik says:

    @S. cerevisiae:

    But that means you’re a Keynesian MarxoSoshulizt who should get the fuck out of this country because Austerity Wins, Bitches!

  13. 13
    Rick Massimo says:

    I remember that Sarkozy getting elected was greeted with “EVEN THE FRENCH ELECTED A CONSERVATIVE HA HA SUCK IT LIBTARDS” and pointing out that a French conservative was still about four steps to the left of John Edwards was far too complicated for our conservative friends to grasp.

    I wonder what Fox will tell them to say now.

  14. 14
    MattF says:

    The interesting thing about the fall of the Dutch government is that Wilders’ ‘Freedom Party’ are genuine right-wing xenophobes, i.e., not nice people. So, if the Dutch assholes can get a clue, why can’t ours?

  15. 15
    Bludger says:

    Our Galtian overlords are truly terrible people. I weep for Europe. For Pete’s sake, end the Euro and start printing money.

    Cameron has only himself to blame, he can start printing pounds tomorrow.

  16. 16
    Culture of Truth says:

    I believe the correct term is “proven fucking right”

  17. 17
    Steeplejack says:

    Would love to see the corresponding graph for the United States, i.e., how are we doing now compared to the ’30s?

  18. 18
    Enhanced Voting Techniques says:

    First it was the Long Depression in the 1870s that only ended with massive military spending that lead directly to WWI, then the Great Depression that ended with massive military spending that lead to WWII. Sounds like yet again the conservatards will screw the economy over until it turns into a war.

  19. 19
    bobbo says:

    The sad part is, even now, with the evidence in, the odds of the fools and/or evil people who run the world changing course don’t look good IMHO.

  20. 20
    karen says:

    Pundits here urged Obama to “do a Cameron”; Cameron and Osborne were the toast of Very Serious People everywhere.
    Now Britain is officially in double-dip recession, and has achieved the remarkable feat of doing worse this time around than it did in the 1930s.

    Which was the Repugnants plan all along….

    Therefore, if he had done nothing, things would have gotten better on their own.

    Which is your way of saying that Obama did nothing…

    The lesson of today is Obama did nothing but stop things from getting worse. He did nothing to make it better. Of course the fact that he didn’t cave into the austerity demand of the Repugs just means he didn’t make it worse. He deserves no credit for that. And since things would have gotten better on their own why have a President?

  21. 21
    MattF says:

    @Steeplejack: We’re doing better, thanks to Ben ‘Traitor’ Bernanke’s policies. We could be doing much better, but, yadda yadda.

  22. 22
    PeakVT says:

    @General Stuck: Well, we have done the austerity dance according to Krugman

    You’re reading comprehension sucks if you think Krugman has said that.

  23. 23
    Omnes Omnibus says:

    @Culture of Truth: Fuck the CDU.

  24. 24
    c u n d gulag says:

    Better to suffer the many rather than punish the few.

    No one reading this is “Too Big To Fail.”
    And so, we will be targeted to fail.

    And the pig’s who caused this mess, continue eating at the trough of avarice.
    They didn’t even miss a meal.
    They just were given ours.

  25. 25
    Culture of Truth says:

    The European Parliament is considering treating banks like utilities such as water and electricity providers. Bankers oppose the measures as it would eliminate their bonuses.

  26. 26
    Mudge says:

    The beauty of Krugman’s leech analogy is that you use the leech to cure the patient to remove the bad humors. When the patient gets worse (due to the bleeding), the solution is more bleeding.

    When austerity doesn’t work..more austerity!

    There are signs some politicians are slowing realizing the patient will die with more bleeding.

  27. 27
    Amanda in the South Bay says:

    And I hope the ConDems return to obscurity and forever are tainted by associating with the Conservatives.

  28. 28
    karen says:

    @MattF:

    So, if the Dutch assholes can get a clue, why can’t ours?

    Because the Dutch are not owned by Koch, Wall Street, etc.

    The truth is one day they won’t bother with middlemen like the Congress and President. One company will be the government. I just hope it’s not in my lifetime.

  29. 29
    Jrod says:

    @General Stuck: I’m glad you’re focused on important matters, like your grudge against everyone who supported H. Clinton in 2008 or who’s ever critisized Obama. Silly lefties, can’t you see that Krugman is the worst creature on the planet? He is the true enemy.

  30. 30
    burnspbesq says:

    The position of the German government is now and has always been based on the absolute necessity of protecting the German banks from having to mark their holdings of Greek debt to market, in which case their insolvency would be clear to everyone, including their depositors.

  31. 31
    butler says:

    It should now be obvious to everyone that Krugman has been right all along, and that austerity is the equivalent of bleeding with leeches

    You would think so, but I guarantee they’ll turn around and blame the Euro Zone Crisis, ie those deadbeat Greeks and Italians who kept spending too much and didn’t want austerity. Meaning the only thing to do now is to have MORE austerity in order to balance things out. More leeches please!

  32. 32
    Steeplejack says:

    @S. cerevisiae:

    Yes, we should be borrowing a ton of money at nearly 0% and beavering away on the civil engineers’ (ASCE) wish list of infrastructure projects.

  33. 33
    Narcissus says:

    I can’t wait for Sully to eat crow

  34. 34
    Culture of Truth says:

    The City of London Corporation said Europe cannot afford to drive away the best and brightest minds by giving the impression it doesn’t welcome high earners.

  35. 35
    Belafon (formerly anonevent) says:

    @karen: I should have added a WINGNUT-LOGIC tag to the middle of my statement. I was trying to point out that because things didn’t get worse, they obviously, according to wingnuts, would have gotten better by him doing nothing.

  36. 36
    burnspbesq says:

    @karen:

    The Dutch are every bit as corporatist as anyone else. Their government wants jobs, and in order to get them they are willing to cut amazing deals with multinationals that want to “optimize” their worldwide effective tax rate.

  37. 37

    Fiscal stimulus has been an established rule of thumb for this country for quite a while, and when the wingers are in power, they have passed such stimulus bills of their own. Though usually smaller than the ones dems passed when they were in power during a recession recovery.

    The republicans now, are not interested in anything holy, or good for the economy, or the country, which by extension would be good for Obama. And that can’t happen in their world, right now.

    It’s all been kabucki bullshit, and Obama has like the little energizer bunny, beating his drum for one thing, and doing something entirely different. like the solid keynesian he is, with no short term deficit reduction cuts aka “austerity”, and stuffing bill after bill with extra dollars for extra stimulus, as well as keeping the Bush middle class tax cuts in place, that would likely have given us a double dip recession, if those extra spending dollars had been taken out of middle class paychecks.

    He gets no credit from any of it with the pro left, or their progressive foot soldiers.

  38. 38
    comrade scott's agenda of rage says:

    @Mudge:

    When austerity doesn’t work..more austerity!

    This is a corollary to the “Conservatism never fails, it is mortal men who fail conservatism.”

    Both are an accurate reflection of Einstein’s definition of insanity.

  39. 39
    Comrade Mary says:

    @Xenos:

    Meanwhile, German owned supermarkets in Greece are shutting down because people are walking shoplifting all the food out and the employees can’t be bothered to stop them.

    I am a very bad person for approving of this.

  40. 40
    cmorenc says:

    The upside to the likely upcoming Dutch elections is that maybe they’ll dump the socially regressive (by Dutch standards) current government, which has been on a mini-Jihad against one of the Netherlands’ most economically successful sectors, its cannabis coffee shops (because proposals had been made to restrict access to those shops by foreigners). For years, Amsterdam has been one of the most delightfully libertine, yet responsibly self-disciplined cities in the world, where pot smoking is welcomely tolerated, yet treated in the same fashion as cigarette smoke: keep it where you don’t impose your second-hand smoke on unwilling others. The desire to curtail the scale of the sex-worker window trade is a bit more understandable, and it’s not because the Dutch have suddenly gone prudishly repressive about sexuality, but rather mainly because of too much infiltration of that business (and the supply sources of SWs) by criminal eastern European elements.

  41. 41

    @PeakVT:

    bullshit, and you are insane to now deny what Krugman has been Obama bashing from day one. I gave you a link, there are many more just like it. Remember “Obama caved” with the debt reduction deal. He’s a “wimp”.

  42. 42
    bootsy says:

    Boy, it’s funny that you don’t get the renamed glibertarian troll on any of those posts that prove his philosophy is nothing but a false religion totally unconnected with real economics. What’s his name again, el Gato or somethin’?

  43. 43
    burnspbesq says:

    @General Stuck:

    I used to have a problem with Krugman’s political tone-deafness, but I got over it. You should too. His job description does not include tailoring policy recommendations to the realities of our dysfunctional Congress. His job is to say what should be done. It’s up to the Administration to do as much of it as possible, given its finite stock of political capital and with due regard to other priorities.

  44. 44
    ruemara says:

    @Comrade Mary: No, you’re not. I”m all for it.

  45. 45
    gaz says:

    @karen:

    The truth is one day they won’t bother with middlemen like the Congress and President. One company will be the government. I just hope it’s not in my lifetime

    Murray Hill, Inc. For president! woohoo!

    (Actually, I love these guys)

  46. 46
    schrodinger's cat says:

    This is so stupid and sad at the same time. We learned the lesson that austerity does not work in a recession during the Great Depression but we have economies around the world repeating the same mistake again and again. It is like they have forgotten their history.

    It would be like physicists forgot about relativity and quantum mechanics and went back to classical mechanics because it was more elegant or something.

  47. 47
    PurpleGirl says:

    @Enhanced Voting Techniques: No, the last decade hasn’t worked out the same way. We’ve conducted two wars and racked up huge bills but they’ve paid for them with credit and while defense contractors have made money, it hasn’t flowed into the economy in general. Manufacturing is different these days, as is the composition of the military. More equipment and fewer people.

  48. 48
    PeakVT says:

    @General Stuck: I saw the link, and it proves that your reading comprehension sucks. Here, try this quote on for size:

    I also suspect that Obama administration economists would very much like to see another stimulus plan. But they know that such a plan would have no chance of getting through a Congress that has been spooked by the deficit hawks.

    Also, get yourself some facts.

  49. 49
    Chris says:

    @Rick Massimo:

    I remember that Sarkozy getting elected was greeted with “EVEN THE FRENCH ELECTED A CONSERVATIVE HA HA SUCK IT LIBTARDS” and pointing out that a French conservative was still about four steps to the left of John Edwards was far too complicated for our conservative friends to grasp.

    So is the fact that in fifty years of Fifth Republic, France has had exactly one left-wing president, every other one being a conservative. It’s not exactly fucking news that France would elect a right-winger.

  50. 50
    JGabriel says:

    __
    __
    John Cole @ Top:

    Kthug goes on to point out that with the Brits, these are self inflicted wounds- basically Cameron is tightening the cilice on the thigh of England for past sins of the financial markets.

    Damn, nice metaphor. Me likey.

    .

  51. 51

    @burnspbesq:

    Not a chance. Not so long as he, or any other prog hero mixes in politics with their expertise. I don’t need Krugman to tell me that keynsian theory is a good one. And I really don’t think Obama does either. I do need him to tell the fucking truth, all of it, within his expertise, rather than using polemic style to prove himself right.

    But it is good to see you finally finding something to agree with the group on.

    Now back to the usual group think.

  52. 52
    Steeplejack says:

    @burnspbesq:

    A good summation.

  53. 53
    mdblanche says:

    But, but everybody knows European conservatives are to the left of our liberals. How could austerity have even happened in the first place with that nice Mr. Cameron in charge?

  54. 54
    gaz says:

    @General Stuck:

    now deny what Krugman has been Obama bashing from day one.

    ….and your point is?

    Or wait, maybe your point is that the fact that obama’s admin has been consistently and demonstrably wrong on the economy (though not as bad as the MOTUs and GOP) should take a backseat to party-fealty and Obama fluffing. Maybe that was the point you were getting at?

    Where your whole argument falls down General, is the part where KThug has been, ummm – RIGHT ABOUT ALMOST ALL OF IT!

    * ahem *, excuse me
    So now, you were saying?

  55. 55

    @PeakVT:

    Like I said yesterday, Krugman always, or usually covers his ass with a statement like what you quote, then goes right back to the wanking Obama is a ‘wimp’ theme. Self serving double talk.

  56. 56
  57. 57
  58. 58
    PeakVT says:

    @General Stuck: Krugman always, or usually covers his ass with a statement like what you quote, then goes right back to the wanking Obama is a ‘wimp’ theme.

    Translation: “Fuck what Krugman says, I know what thinks.”

  59. 59
    Citizen Alan says:

    @General Stuck:

    I asked this question the other day and never saw a response, so I’m asking again:

    Do you really think you’re doing anything positive for Obama by acting like the absolute worst caricature of a mindless Obot who goes into a frothing rage whenever anyone expresses any disappointment over or disagreement with the President, no matter how tepid?

  60. 60

    Listen, I like most of the people here, but refuse to blindly follow any pundit without question. I will support a competent dem in the Oval Office, with fury, if need by. Knowing he ain’t perfect, but where my support despite that imperfection, and others supposedly on my side, actually matters. It matters little with a columnist at the NYT’s, imho. I offend the prog gods, and banish myself to Obot purgatory. Off with me head.

  61. 61

    @Citizen Alan:

    I asked this question the other day and never saw a response, so I’m asking again:

    I did offer a response, you must have missed it, BUT I’ll repeat IT, WITH LOVE.

    BLOW IT OUT YOUR ASS

  62. 62
    gaz says:

    @General Stuck: Krugman is not a professional politician, nor a professional Democrat, GS. He’s an economist who works at the new york times. His job is to comment on economic policy. He doesn’t happen to agree with most of what Obama is doing. He says so. That’s his job.

    Who said anything about following a pundit without question? That’s not what’s going on here. What’s going on here is that you are miffed because he writes about a lot of stuff that the white-house and the treasury dept and the feds are doing that he disagrees with.

    If an R were in office, you’d be giving kthug head right about now. But he’s attacking “your guy”. It doesn’t matter that it’s on the merits. Not for you. We get it.

  63. 63

    :

    “Fuck what Krugman says, I know what thinks.”

    And you say I have poor reading comprehension.

    I described what he does, So add your own interpretation to what someone is thinking who says one thing, then turns around and says something altogether different.

    @gaz:

    If an R were in office, you’d be giving kthug head right now. But he’s attacking “your guy”. It doesn’t matter that it’s on the merits. Not for you. We get it

    LOL, back to the Obama apologist theme. Krugman doesn’t tell the truth when mixing his expertise on the economy, with politics. You can think I’m doing anything you want.

  64. 64
    gaz says:

    @General Stuck:

    You can think I’m doing anything you want

    Of course I can (as can most of the people on the board). We don’t need your permission, but thanks anyway.

  65. 65
    gaz says:

    @General Stuck:

    LOL, back to the Obama apologist theme

    I bet you hear this a lot.

    Funny, that

  66. 66

    @gaz:

    You can think I’m doing anything you want

    Yea, right. my saying that – was granting permission, and not simply stating a fact of blog life. But thanks anyway.

    Are we done here?

  67. 67
    gaz says:

    @General Stuck: I’m pretty sure we were done after #62, but feel free to continue.

  68. 68
    terraformer says:

    It’s important to consider why it’s been all austerity, all the time (below copied from somewhere I can’t recall, probably comments at Kthug’s place).

    Austerity policies provide real and significant benefits to the few, the elite, the ones making the policies.

    For starters, austerity policies:

    – keep tax rates low for the wealthy, and for those claiming unearned income

    – drive wages down, severely

    – generate insecurity among workers so that they so fear for their survival that they will do as they’re told, without complaint or attempting to organize unions)

    – drive prices of real property down, severely, and those with money can swoop in and buy at fire sale prices

    – deprive people of the government benefits that were previously “guaranteed” so that they will distrust government and any other promises made in the future

    – increase the disparity between the wealthy and non-wealthy, because what fun is it to be wealthy if it doesn’t make you stand out as “special”?

    – prevent educational opportunity to the young of the non-wealthy, thereby enhancing the opportunity for the young of the wealthy, giving them an even better head start in life

    – make people so fearful for their own survival that they begin to lash out at others “beneath” them, or at public employees who have it better than they do; scrabbling for scraps keeps our attention focused away from those really calling the shots

    – accustom people to a life of kowtowing to employers for even poverty wages, and voila! Good help is now quite easy to find!

    Austerity would not be adopted if there were no benefit to elites.

  69. 69

    @gaz:

    Nah, I’ve said all I needed to. I am by my lonesome on this topic, and don’t want to upset the FSM with blasphemy. So please have the last word, if you want. Hopefully, not an insult I’d have to respond to. Awe, heck, let’s live large, say any damned thing you want. freebie.

  70. 70
    PeakVT says:

    @General Stuck: I described what he does,

    No, you asserted your opinion of what he does.

    But whatever. You’re completely irrational on this. I think I’ll join gaz in moving on.

  71. 71
    Paul in KY says:

    @gaz: I do wish Mr. Krugman would acknowledge more in print that Pres. Obama’s hands have been tied (stimuluswise) by the nutty Republicans and their masters (those who benefit from ‘austerity’).

  72. 72
    gaz says:

    @Paul in KY: I believe he’s argued that at length in certain contexts.

    During the run up to the initial stimulus package, as it was taking form, he made these arguments. He * did * say that Obama should have pushed harder, and he did mention the lack of political capital. He came to different conclusions than the whitehouse.

    Maybe he should be more aggressive arguing the hands tied thing… I really don’t know. And if KThug has a significant blind-spot it’s in performing political calculus. That’s certainly a weakness of his, but then again, he’s an economist, not a political strategist, so I read him in that light.

  73. 73
    Linnaeus says:

    @terraformer:

    In other words, austerity is the instrument by which the elites can bring about neofeudalism.

  74. 74
    Culture of Truth says:

    He doesn’t happen to agree with most of what Obama is doing. He says so. That’s his job.

    My impression he agree with almost all of what he is doing, particularly with regard to economics. His chief complaints are that the stimulus should have been bigger (but O had the right approach, unlike the GOP and Europe) and that Obama should do a better job selling his achievements.

  75. 75
    Jay B. says:

    @gaz:

    Of course, you are also ignoring that the President’s hands were ALSO tied by his own Administration, long before it got to the GOP. Larry Summers shot down more aggressive numbers, numbers people like Krugman were screaming for at the time.

    The hilarious lengths you guys go to is really amazing. What is Krugman supposed to do? Make sure your feelings aren’t hurt? There were three places to put the blame. First with Obama’s economic (not political) advisers who asked for too little in the first place, then with the proposal which had way too much in the way of tax cuts which add far less to the economy than does spending, then, of course, with the GOP who want us all to suffer. Even if the stimulus was the best of all possible worlds (which is the normal default setting of all you experts here), it’s still possible to criticize it from an economic perspective. Honest.

    Unemployment is still over 8%, the recovery is mediocre, jobs haven’t come roaring back and the states are getting killed because the money (which was too little) dried up. This is plain, honest fact. AS IS — and Krugman has made this point about two billion times — the plain, honest fact, that DESPITE its size, the stimulus prevented something far worse and the Administration deserves credit for that.

    What you guys seem to want is propaganda so you can feel better. Honest critiques of outcomes really freak you guys out.

  76. 76
    Paul in KY says:

    @gaz: Don’t get me wrong, I like the guy. He tells it like it is (from his perspective).

  77. 77
    Some Loser says:

    So we are not allowed to criticize Paul Krugman now? Really? Are we really going to attack anyone who has anything bad to say about Krugman?

  78. 78
    Jay B. says:

    @Some Loser:

    Go ahead! You’ll be wrong and Krugman will still be right, but flame away! He said something qualified about the President. Burn him!

  79. 79
    gaz says:

    @Jay B.:

    Of course, you are also ignoring that the President’s hands were ALSO tied by his own Administration, long before it got to the GOP

    Really? Am I really ignoring that Jay, or are you just upset with me because KThug is shrill?

    It’s rhetorical, so don’t bother answering.

  80. 80
    Some Loser says:

    @Jay B.:
    Flame him? I said criticize. Criticism isn’t bad. Actually, it is an essential part of growth in my opinion.

    Anyway, take a look at yourself. Look at what I posted and look at how you responded. You proved my point.

    I didn’t mention President Obama, I just mentioned any general criticism. You immediately attacked me for that. Calm down. I ain’t got a beef with the guy, not like Stuck.

  81. 81
    gaz says:

    @Paul in KY: Sometimes I find his lack of accounting for political calculus irritating, and sometimes I find it refreshing. It depends on the context, I guess.

    He tends to think along the lines of results. Economics is essentially the study of the behavior of money and markets, and so a lot of times I think the excess baggage of politics gets in the way. On the other hand, he doesn’t tend to suggest policy solutions that are politically feasible, but rather economically feasible, and that can be problematic to say the least.

    On the numbers he’s been right. In the “how could Obama have possibly done better” department, not so much. But I don’t read him for that. I read about politics when I want that stuff.

    Frankly, Krugman’s commentary on politics is never much of a draw to me – at best he says something obvious, and at worst he says something completely naive.

    He’s an economist. He does mix politics with economics to mixed effect (some good some bad) but I read him for his learned opinion on the state of our wealth.

  82. 82
    gaz says:

    @Jay B.: OOPS. Hey man my bad. Took a couple of reads before I caught the snark.

  83. 83
    pseudonymous in nc says:

    In Britain, austerity is the bullshit rationale for launching a massive assault on the social contract: NHS “reform”, higher education “reform”, affordable housing “reform” — all working from the perspective that whatever’s more fucked up about those things in the US needs to come to the UK fast, so that Cameron’s rich mates can profiit.

  84. 84
    Tonal Crow says:

    A troll? A troll! The strongest troll,
    Is but a passing thing:
    If you feed it only pie,
    It’ll cease its crap to fling.

  85. 85
    Calouste says:

    @karen:

    Because the Dutch are not owned by Koch, Wall Street, etc.

    I’m trying to find a link, but I read somewhere that Geert Wilders’ party had fairly extensive relations with ALEC and the cluster around it. They are active climate science deniers for example. And them dropping their support for the coalition has little to do with being on the right side of an issue and more to do with just assholes being assholes.

  86. 86
    Ben Wolf says:

    Kthug goes on to point out that with the Brits, these are self inflicted wounds- basically Cameron is tightening the cilice on the thigh of England for past sins of the financial markets.

    Perhaps Kthug can then take responsibility for his own role in the financial sector’s misbehaviors, as he spent fifteen years telling everyone that the private debt bubble was macroeconomically irrelevant.

  87. 87
    Tonal Crow says:

    Does the 5-letter word meaning “without clothes” trip the moderation filter?

  88. 88
    ThatLeftTurnInABQ says:

    @Enhanced Voting Techniques:

    that only ended with massive military spending that lead directly to WWI, then the Great Depression that ended with massive military spending that lead to WWII.

    __
    I’m afraid you’ve got the causal relationships (“that lead…to”) backwards here. Pre-WW1 the European great powers were spending between 2 and 5% of GDP on their war machines, which seemed like a lot at the time but was a pittance compared with their levels of expenditure after the war started. And the example of the pre-WW2 US is even more extremely one-sided than that. Global wars drove the spending of the nation states, not the other way around. The only country for which you could make a case that unsustainable financial imbalances helped push the country towards war was circa 1938 Germany, and I don’t think many folks are going to buy the curious proposition that the person who was the German Reichschancellor at that time really needed the advice of his bankers to know which way he wanted things to go.

  89. 89
    Tonal Crow says:

    @Linnaeus:

    In other words, austerity is the instrument by which the elites can bring about neofeudalism.

    You, my friend, are a dangerous radical, by which I mean you’ve told the terrible truth.

  90. 90
    Tonal Crow says:

    @Tonal Crow: Yes, it does. Meh!

  91. 91
    ThatLeftTurnInABQ says:

    @terraformer:

    Austerity policies provide real and significant benefits to the few, the elite, the ones making the policies.

    __
    Austeriry is nothing more or less than the transfer, orchestrated by governments and their creatures the central banks, of yet more wealth upwards from those on the bottom and middle who produce the wealth to those already most well-off at the top who are nothing but parasites. The only difference between it and this sort of wealth transfer under less recessionary conditions is that the instruments of the wealth transfer are explicitly deflationary in character and therefore more publically visible rather than being conducted via the more stealthy technique of skimming off almost all of our economic growth to benefit the wealthy, which is the norm when the economy isn’t contracting.

  92. 92
    gene108 says:

    @General Stuck:

    rather than using polemic style to prove himself right.

    The math involved in higher levels of economics wouldn’t communicate much to most people. It would be over their collective heads (mine included and I took three semesters of calculus in college).

    Polemic prose is really not a bad alternative.

  93. 93
    Some Loser says:

    @gene108:

    I don’t think Stuck’s problem with Krugman is exactly his style of writing. Just a hunch.

    Though, Jared Bernstein’s blog seem like a good, easy to digest economist blog. Though I am not sure since I am very ignorant about economics.

  94. 94
    Ben Wolf says:

    @gaz:

    He tends to think along the lines of results. Economics is essentially the study of the behavior of money and markets, and so a lot of times I think the excess baggage of politics gets in the way. On the other hand, he doesn’t tend to suggest policy solutions that are politically feasible, but rather economically feasible, and that can be problematic to say the least.
    On the numbers he’s been right. In the “how could Obama have possibly done better” department, not so much. But I don’t read him for that. I read about politics when I want that stuff.

    Krugman has been wrong about most everything. While Keynesians (Krugman is not in any sense Keynesian, he is in fact a neo-liberal) and MMTers were warning about a debt-fuelled bust for many years, Krugman was dismissing them and insisting the banking system was self-limiting.

    It’s a bitter joke for Mr. Cole to suggest Krugman was correct about anything regarding the EMU. On the eve of the euro, the same Keynesians and MMTers whom Krugman regularly smears issued frank warnings that should an EMU country find itself too far indebted, the lack of fiscal union would quickly lead to a currency crisis.

    What was Krugman’s biggest worry about the EMU? That it didn’t have sufficient labor market integration.

    When Keynesians and MMTers were warning that trade deficits could be the source of the currency crisis, Krugman was arguing that trade balances didn’t matter. Now he argues the EMU’s problem is that it isn’t spending enough. Well, it is a problem that the EMU nations aren’t spending enough but even if everyone listened and implemented every suggestion Krugman made they’d be treating the symptom and not the problem, which is a currency crisis.

    It’s bizarre to see this person become progressives’ go-to guy on economics, because his economics are not progressive. How can you call someone progressive who has argued that wages in the U.S. need to fall, that globalization is a net good, that there’s no such thing as a balance sheet recession?

  95. 95
    Some Loser says:

    @Ben Wolf:

    Speaking of economics, does Modern Monetary Theory work as well as Keynesian models? In the real world, I mean.

  96. 96
    Ben Wolf says:

    @Some Loser: The only difference between MMT and Keynesianism (the real Keynesians call themselves post-Keynesians) is a short work by Warren Mosler,Soft Currency Economics. It lays out the operational realities of the Fed and Department of Treasury, really mind-bending stuff. So MMT and Keynesianism are very close allies.

  97. 97
    Brachiator says:

    This story from the BBC news is very instructive. There is not simply a threat to the social safety net, but an unraveling of the entire middle class. No wonder they are rejecting austerity. Link here

    http://www.bbc.co.uk/news/world-europe-17757235

  98. 98
    gaz says:

    @Ben Wolf:

    Krugman has been wrong about most everything.

    Joy, another Schiff acolyte, or whatever.
    ETA: You surprised me and went full-blown no true scottsman. can’t say I saw that one coming. Kudos.

    I stopped reading after that line, you know.

    Here’s a tip: In order to be convincing, it’s best not to start your response with such baldfaced nonsense.

  99. 99
    Brachiator says:

    A bit from the BBC news piece on the Netherlands (posting on the fly from a mobile device, so apologies if this is a bit ragged):

    Hunger is not a concept you would immediately associate with one of Europe’s strongest economies. But austerity measures taken at the top are having a dramatic impact on the people at the bottom.
    __
    The economy is now in recession and unemployment has hit 6%, the highest level in six years. One in six households is struggling to cover the weekly shopping bill.
    __
    A few miles away, Amsterdam’s trendy Basis Bar is buzzing with diners determined not to let the economic crisis upset their social diaries. Here you can bring your own food, the staff will heat it up for nothing so all you have to pay for is whatever you are drinking.

    The laziness of America’s pundit class, apart from Krugman and a few others, never ceases to amaze me. The Village Dopes blandly transcribe whatever serious GOP people say about the need for tax and budget cuts, and never look for or challenge the conventional wisdom with examples from the real world that demonstrate the impact of austerity based fiscal policies. And progressive dopes swerve from stimulus to redistribution fantasies with no clear idea of what works and what fails.

  100. 100
    Ben Wolf says:

    @gaz: As I detalied how Krugman missed the biggest calls and still won’t admit it, I’ll stand by what I wrote. It’s a simple fact that he doesn’t understand banks, money or debt, which is why he keeps missing the bus. And as he’s been a prime contributor to impoverishing American workers I’ll stand by my statement that he is not a progressive.

  101. 101
    Brachiator says:

    @Ben Wolf:

    And as he’s been a prime contributor to impoverishing American workers I’ll stand by my statement that he is not a progressive

    I am not sure what your point is. By your reckoning, even if Krugman were a progressive he would still be wrong. And it does not follow at all that one must be a progressive to be a useful economist.

  102. 102
    Ben Wolf says:

    @Brachiator: That’s correct: no matter Krugman’s ideology, he’d still be wrong.

  103. 103
    rikyrah says:

    the last tag just hit me hard.

  104. 104

    […] Paul Krugman IS Cassandra: The Austerity Assassins (John Cole – Balloon Juice) […]

  105. 105

    @MattF: The Dutch far right is generally xenophobic, true, but their views on the economy tend to be more populist, almost left wing. Meanwhile, the Liberal party, economically speaking, is more in line with the Republicans ie favoring deregulation, lower taxes, austerity. I’m no fan of Wilders, but in this case he’s done the Netherlands a favor. Now the people will get a chance to debate if they continue to follow Germany’s lead.

Trackbacks & Pingbacks

  1. […] Paul Krugman IS Cassandra: The Austerity Assassins (John Cole – Balloon Juice) […]

Comments are closed.