Oh, hey- Krugman has been right all along:
The euro zone is hurtling back into recession, economists declared after official figures this week portrayed a shrinking economy. But by some measures the downturn has been under way for years.
With the exception of Germany, none of Europe’s biggest economies have returned to the level of economic output they had at the beginning of 2008, before the subprime mortgage crisis in the United States spread across the Atlantic, according to calculations by two U.S. economists, Peter Rupert and Thomas F. Cooley.
The figures suggest that Europe is already well into what could become a lost decade — a period of pernicious stagnation and wasted potential that could have lasting effects on ordinary citizens.
Economic growth not realized represents investments in education that were never made, research that was never financed, businesses that failed and careers that ended too early or never got off the ground.
“There are larger implications that people don’t think about,” said Mr. Rupert, a professor of economics at the University of California, Santa Barbara. “There is a huge decline in human capital.”
So depressing.
Publius39
The title of this piece is so apt at this point with regards to our economic discourse and you can already bet your ass that the market networks will have some Very Serious Person on to tell them the only reason austerity failed is because they didn’t cut enough. If only America was a country that could learn from the mistakes of others…
cathyx
It isn’t any better here.
Corner Stone
Damn you Cole! Don’t you know there’s an election this year?
Shut up, Shut Up, SHUT UP.
Johannes
I’m shocked, shocked! Oh, hell, even this won’t penetrate the shell–the article blames both the Austerity Hawks and the Feckless Spendthrifts. Both sides do it!
The Moar You Know
They didn’t cut enough. Send Ryan over there and let him show them how it’s done.
JKormac
It’s Brad DeLong’s First Law of Economics: Paul Krugman is always right.
Ben Franklin
Europe=Japan—–verklempt
Villago Delenda Est
The important thing to remember here is that the banksters are not suffering too much for their own fuckups.
Which is all that really matters, after all.
Maude
@The Moar You Know:
Don’t forget to send all of the House Republicans.
What Europe is doing is self destructive.
rikyrah
Krug has been on the money with this
Roger Moore
@Publius39:
I can never figure it out. Are we supposed to believe in American Exceptionalism, which means we’re different from all the other countries out there, especially European Social Democratic states, or are we supposed to look at what other countries do and copy their good ideas?
cathyx
What Europe needs is healthcare vouchers. That would save a lot of tax money that could then go to the poor banks.
Karelian
Tip: go to Google News and type in “Ryan” and “stimulus” as key words.
This is gonna be goooood.
Even WSJ and ABC are brutal.
jp7505a
When as childern, we clapped real hard and Tinker Bell came back to life. Obviously we have not been clapping hard enough for the confidence fairy to come to our rescue. So the first oder of business is to clap/slap the Very Serious People up-side the head. It might not wake up the confidence fairy but it will make the rest of us feel better.
Belafon (formerly anonevent)
@cathyx: I’ll take 8% unemployment here versus the 23% unemployment in Spain.
cathyx
Somebody broke the blog again.
Maude
Anyone have having a spot of trouble getting on the site?
Turgidson
Getting rid of Medicare will fix Europe right up.
Maude
I’m in moderation and I did nothing wrong. I haz a sad.
cathyx
@Maude: I’m in moderation too. And I’m innocent too.
13th Generation
@Corner Stone:
Nice to see you back here lately. Sometimes I just don’t have the energy to step up like you do.
scav
Austerity has not failed, it has succeeded brilliantly in establishing a self-sustaining virtuous cycle of ever-increasing mandatory thrift and cut-backs!
/bleah
ArchTeryx
And I’m one of those bits of human capital that this “lost decade” likely will simply throw away, along with my family and loved ones.
Molecular biologist with the misfortune of being born a decade too late. Or a couple of decades too early.
There’s a good reason why suicide spikes during economic depressions, and I’m staring it in the face. Not quite the same as reading about it in the history books…
Maude
@cathyx:
We got taken out of mod. We are indeed innocent.
The Other Chuck
@Roger Moore: We’re supposed to do what we’re told by our betters. Our Betters tell us they create jobs. Our Betters demand a tax cut for their largesse. Our Betters tell us we don’t have a class system, so we are supposed to obey them and agree.
James E. Powell
@Publius39:
the market networks will have some Very Serious Person on to tell them the only reason austerity failed is because they didn’t cut enough.
My right-wing family members and friends already say this all the time. When asked to specify exactly what Obama has done or not done that causes them to despise him so much, it is his failure to cut more government spending.
jl
thanks for link to article. Two comments.
As Kthug himself says, it is not Kthug who got it right, but the Keynesian apporach to macroeconomics, so we should remember that Kthug. Alan Blinder, Brad DeLong, Joseph Stiglitz, Dean Baker, James Galbraith, Robert Solow, Olivier Blanchard, Kristina Romer all have said about the same thing, just to name celebrity economists.
Second, the article is very weak on analysis. I may have missed it, but no mention, certainly no discussion of the problem of the Euro currency area. As in most pretty bad articles on economics, the causal mechanism behind the ups and downs and ins and outs of the economy are completely opaque.
I do not understand why. Can the reporter not call up well known economists from the two opposing sides and at least give a summary view of how and why this crap happens, for a little compare and contrast?
No, apparently that is impossible.
The article ends with a couple of dreadful sentences that give the quasi religious moral tale of normal recessions being being healthy episodes of purging the rot of economic excess. Several of the Keynesians I mentioned above have debunked that theory (and I am being charitable in calling that a theory, it is more like sad posturing and empty moralizing in an attempt to pretend it is a theory.).
But thanks, interesting reading.
Linda Featheringill
In the article, it mentions that the US has recovered back to the point where it was in 2008 before the crash. That’s better than the majority of European countries have done.
But I’m not clear on what they mean by “recover.” Wall Street has practically recovered. The auto companies are doing pretty well. And manufacturing jobs are becoming more plentiful. But unemployment is still high and lots and lots of people are in really tight situations.
We’re doing better than England, though.
Thoughtcrime
Austerity has succeeded brilliantly in requiring people to lead more austere lives.
Thoughtcrime
Have they tried tax cuts for the wealthy yet?
Bokonon
Clearly, the only answer for this is a round of tax cuts.
Coupled with more spending cutbacks.
Conservatism can never fail … it can only be failed. Including conservative economics.
wrb
@Linda Featheringill:
And the wealth of the middle class has collapsed.
wrb
@Linda Featheringill:
And the wealth of the middle class has collapsed.
cathyx
@Belafon (formerly anonevent): With all the factors that our 8% unemployment doesn’t consider, I don’t believe ours is that low.
Bokonon
Tax cuts! Time for aggressive tax cuts! For the job creators!!
JoyfulA
@ArchTeryx: When family and friends are all irritable, depressed, and scared, as happens in economic bad times, there’s nobody around to level things out; everybody needs help.
Hang in there. Things will get better eventually, as I keep telling myself.
I’m too old to think of major changes for myself, but have you considered applying to medical school? As a molecular biologist, you certainly have more life sciences knowledge than most MDs, and the academics should be a breeze for you.
Baud
If government didn’t exist, we’d all be trillionaires by now.
cathyx
@Belafon (formerly anonevent): With all the factors that our 8% unemployment doesn’t consider, I don’t believe ours is that low.
JoyfulA
@ArchTeryx: When family and friends are all irritable, depressed, and scared, as happens in economic bad times, there’s nobody around to level things out; everybody needs help.
Hang in there. Things will get better eventually, as I keep telling myself.
I’m too old to think of major changes for myself, but have you considered applying to medical school? As a molecular biologist, you certainly have more life sciences knowledge than most MDs, and the academics should be a breeze for you.
Baud
If it weren’t for government, we’d all be trillionaires by now.
PeakVT
before the subprime mortgage crisis in the United States spread across the Atlantic
This is lazy narrative regurgitation. The truth is that Europe’s problems are home-grown, and the crisis in the US was at most a trigger.
1badbaba3
Heh-heh heh heh-heh – Stay the course – Heh-heh heh.
Hill Dweller
@wrb: The wealth of the middle class has been collapsing for 30+ years. The recent recession was drastically sped it up.
1badbaba3
Heh-heh heh heh-heh – Stay the course – Heh-heh heh.
Lojasmo
@13th Generation:
Because Content Free Snarky Bullshit is so hard, Amirite?
Baud
If it weren’t for government, we’d all be trillionaires by now.
mainmati
The Conservatives on both continents are bent on creating a vast “reserve army of the poor” to keep wages low, destroy the social safety net and drive up net income for the rich. It ultimately will end up in highly politically unstable states as well as a degeneration in economic infrastructurethat will ultimately undermine the 1%’s interests.
All of this austerity in the face of extremely low borrowing rates, quite aside from the sheer economic insanity will serve only to help China and other states with national industrial policies.
Baud
If it weren’t for government, we’d all be trillionaires by now.
MikeBoyScout
Now that you know House Republican Ideological Leader & and the Republican’s budgeting genius, Paul Deficit Hawk Ryan lost track of $1-5 million in his personal finances and admittedly mismanaged over $40 million in stimulus funds in the past two years, which ticket this fall could turn this country into Greece?
Gekko/Galt – Regardless!
MikeBoyScout
Now that you know House Republican Ideological Leader & and the Republican’s budgeting genius, Paul Deficit Hawk Ryan lost track of $1-5 million in his personal finances and admittedly mismanaged over $40 million in stimulus funds in the past two years, which ticket this fall could turn this country into Greece?
Gekko/Galt – Regardless!
Keith
It’s even worse – given the recent piece Kthug highlighted from the New Statesman – not only was he right, but now even those who called for austerity in the UK, (one of the few governments in the EU with their own sovereign currency!) admit that austerity is not now the prescription.
Of course, they regret they cannot admit to their prior error.
Truly, austerity can never fail, it can only be failed.
Maude
@MikeBoyScout:
Now, that’s really getting picky. He didn’t mean to.
Yutsano
@Bokonon: A negative tax rate for those over $1,000,000. Anything else is crushing socialism.
ArchTeryx
@JoyfulA: To make a long story short, medical school was my original destination, but even back then, I realized I would never survive residency. At 40 and with a permanent chronic illness, I *KNOW* I’d never survive residency now.
Basically, it’s Science (or some related field) or bust for me now. And I’ve looked at several related fields – teaching, museum exhibit design, core lab administration – but the Depression has swamped them all. The ladders have been pulled up.
And you are absolutely right. What has me down right now isn’t just my own situation (temp job steadily counting down toward unemployment) but the perpetual torrent of bad news from all my friends and loved ones, and the knowledge that I *can’t do anything to help*.
Linda Featheringill
@PeakVT:
Some of Europe’s problems did start in the US because everybody and their dog invested in diced and sliced subprimes. Then when people [like me] collapsed under the weight of the deal and when there was no desire on the part of the banks to negotiate to work things out, everyone who had invested heavily in these high yield mortgages lost, including European banks, etc.
But I do agree with you in that even though I personally caused much of the US and Europe to crash and burn, Europe also had their own mistakes to atone for. And they are totally responsible for their silly actions since then.
[By the way, there is life after foreclosure.]
1badbaba3
This blog done ‘sho ‘snuff gone crazy!
Methinks ’tis the revenge of the Shaved Pussy! Ahhrrr!
JCT
@ArchTeryx: This is a terrible time for science in this country, a largely ignored casualty of the austerity kick. My Chair spends all of her time trying to keep our junior faculty afloat and I am watching my field (cardiovascular research) wither away as MDs have given up on academic careers. The true disaster is the filter down effect as med and grad students realize what is happening and decide against research careers.
The effects of this may well be permanent. Self-infllicted obsolescence. So stupid.
Try to stay with it – are you at a level where a senior postdoctoral or research associate is a possibility? Cross train into a different system? MolBio skills are flexible as you know. The problem with med school is the debt, not to mention years of extra training….
Sending strong thoughts your way.
Davis X. Machina
@Belafon (formerly anonevent): Something similar to our U3 is pretty much what the EU uses for its unemployment headline number. It’s an ILO standard.
Our U6 — the more comprehensive measure — is 15%. Spain’s U6 is probably pushing 40%. Their youth unemployment is over 50%.
Anoniminous
MA! FYWP has gone OCD again.
Which FP’er forgot to make it take it’s clomipramine?
ArchTeryx
@JCT: Actually a post-postdoc at the University of Michigan, in a technician job (because that’s literally all I could find). The problem is, that research associate job, while it is awesome in a lot of ways (I have a great boss) is *temporary*. Come December, I’m unemployed again. And in the meanwhile, I get to watch the lives of my family, my fiancee, and many of my friends fall apart around me.
I’ve been cross-training like crazy into multiple related sciences, which, in an economy more then utterly moribund, would make me a decently hot item. I’ve even just published a card game designed to teach teenagers basic microbiology, but finding marketing and support for it is nigh impossible.
The Depression seems to smash everything I and my loved ones try. I wish it were otherwise.
WereBear
@ArchTeryx: I wish you the best, and agree… I hope things get better for all of us!
cathyx
If Mitt feels good about his 13% tax rate, what’s keeping him from showing us his returns?
cathyx
@cathyx: Oops, wrong thread.
JoyfulA
@ArchTeryx: What about pathology as a residency that shouldn’t be one of those 60-hour-straight sorts of body breakers? My husband’s one brother-in-law started off in that until he figured out the jobs were salaried and he wouldn’t strike it rich.
And with the card game, do you have some made up? If so, list them on ecrater.com. It’s free listing and no commission and will take you an hour or two to figure out the how-to instructions. You have nothing to lose but some time. And that same husband of mine sold a hundred bamboo floor mats there (long story).
Triassic Sands
Krugman may have been correct all along, but he should still be ignored, because he’s shrill. This country would be so much better off if we had fewer shrill people who are right and more pleasant morons who are always wrong. After all, can’t we all just get along?
And while I’m at it, paying attention to Mitt Romney’s taxes and business practices and honesty, for that matter, is just mean-spirited, small-minded nitpicking. What people need to pay attention to are Romney’s policies, except people 55 and older should completely ignore the Medicare debate, because it doesn’t apply to them. (Except, of course, if you’re a nitpicker and want to point out insignificant, small-minded petty stuff like what current Medicare recipients will gain if Romney is elected; namely, increased medication costs when Obamacare is repealed and the “donut hole” fix goes away. Yeah, yeah, yeah, nitpickers, they’ll lose wellness preventive benefits like free annual check-ups, too, but who the hell cares about preventive medicine. Not big-minded Mittens.
Enhanced Voting Techniques
@ArchTeryx:
Things always change. They are bad now, but they will get better later. Don’t get carried away.
Jay in Oregon
@Baud:
We would indeed. Of course, a gallon of mlilk would cost $25 billion dollars…
Mnemosyne (iPhone)
@ArchTeryx:
Not sure if you’re coming back to the thread, but have you given pharmacy school a thought? I know there’s a pretty major shortage of pharmacists in California, at least.
Mnemosyne (iPhone)
Argh. Can someone please release me from mod for daring to use the P word?
ArchTeryx
@Enhanced Voting Techniques: Yes, persistence always wins. But me and mine may not survive long enough to see that day. Having us all end up homeless and on the street is not the way I want to die, or watch my loved ones die.
ArchTeryx
@Mnemosyne (iPhone): There are times I do wish that this place had a feature of the Great Orange Satan, allowing one to track their own comments independent of posts. Their pseudo-chat-rooms help a lot.
I’m past the point of more schooling, after spending more then 16 years in college just to get this far. I’m just plain out of money and so is my family. I need a steady salary and health insurance to survive, and the lack of one is what is killing me.
ArchTeryx
@JoyfulA: Indeed I do. By “publish” I mean I have a complete copy and it’s been printed in its initial print run from The Game Crafters (www.thegamecrafters.com) (It’s called “Dr. Arch’s Mutations” by-the-by). I’m also trying to get it onto Kickstarter, but balancing it with my day job is difficult, and as I said, I don’t have Hasbro’s marketing department or budget to do the job of getting it into the public eye.
I’ll definitely look at listing on ecrater.com, though. Thank you for that suggestion!