And now, they're coming for your Social Security money - they want your fucking retirement money - they want it back - so they can give it to their criminal friends on Wall Street. And you know something? They'll get it. They'll get it all from you sooner or later. Because they own this fucking place. It's a Big Club: and you're not in it.
"…first a Keynesian observes that fiscal stimulus can increase growth in a depressed economy. Second, as an attempted reductio, a conservative says “if that was true, then you could increase growth by breaking a bunch of windows.” Third, the Keynesian accurately points out that you could, in fact, increase growth by breaking windows. Fourth, the conservative accuses Keynesians of wanting to break windows or believing that window-breaking increases wealth. But nobody ever said that! The point is that we have very good reasons to think smashing windows would be a bad idea—there’s more to life than full employment—and that’s why Keynesians generally want to boost employment by having people do something useful like renovate schools or repair bridges."
— Matt Yglesias, leaving out the next line in the exchange; the one where the conservative screams “that’s socialism,” makes a lot of unfounded claims about runaway spending, and then says government initiated stimulus has never worked, and most especially never worked in the guise of the colossal stimulatory effect of government spending to fight WWII. That recovery was the either “power of the markets” or “the markets anticipating Reagan and ‘morning in America.’” As usual.
"[Rather than a double dip recession] we may be looking at 2 years or more where the growth could be in the range of 2.0 percent or even less. When we have 9.1 percent unemployment, this is an outrage. If we get people applauding because at least we are not seeing a double dip, then we have to calmly escort these ignorant beings to somewhere far away from economic policy discussions. They clearly do not have a clue and need to try a different line of work.
Finally, it is 100 percent nonsense to say that the government is out of policy options. We can do more stimulus. The financial markets are yelling at the government at the top of their lungs saying “borrow more money.” That’s what 2.6 percent interest rate on 10-year Treasury bonds means. There are balanced-budget worshipping politicians who say that the government can’t do anything, but this is not true and the NYT has no business repeating it.
The Fed could also do more. […] Ben Bernanke has himself suggested: targeting a long-term interest rate (e.g. a 1.0 percent 5-year Treasury rate) or a higher rate of inflation (e.g. 3-4 percent). […]
The government could also try to create jobs by taking steps to lower the value of the dollar. The Chinese government has been making threats that it will stop buying up U.S. government debt if we don’t take their advice. The Obama administration could ask what they most want and then do the exact opposite. If the Chinese government stops buying U.S. assets then the dollar will fall against the yuan. This is equivalent to imposing a tariff on Chinese imports and giving a subsidy to U.S. exports. In other words, it should lead to a burst in net exports which will lift the economy and create jobs."
— Dean Baker is either giving great analysis of the nation’s near term economic outlook and policy options —or— reciting a litany of facts, large and small, that you will never, ever hear on any MSM outlet. Even by accident.
I’m not sure which, though.
"In the same way that Wall Street hoovering up a third of all corporate profits is the new normal. Or that 9% unemployment is the new normal. Or that obstruction, rather than legislation, is the new normal for Congress. Or that massive spending cuts during a recession is the new normal. Or that conducting three overseas wars at the same time is the new normal.
The new normal kind of sucks, doesn’t it?"
— Kevin Drumreflects on the “new normal.”
I think this phenomenon, more than anything explains why we’re going to default. Maybe not this time, but sooner than later. And even then, in the economic ruins that follow, there’s only a passing chance that the important lesson, the moral of the story will sink in. More likely it’ll be blamed on ACORN, the EPA, and dread socialist fifth columnists and so forth. But I just don’t see how the boil gets lanced without the paroxysm. And, even then, the end result may be that the boil is simply inflamed further.
Paul Krugman: David Altig points out that given the recent decline in gasoline prices, we’re likely to see a negative headline inflation number by June. What will the inflationistas say?
Lemkin: They will say that this is definitive proof that further austerity measures must be implemented immediately, the deeper and harsher the better, and preferably coming through brutal cuts to Medicare and the social safety net. Likewise, deep cuts to the tax rates of the top 1% are indicated. What other response is even possible?
There’s a lot I simply don’t understand here, but let’s talk for a second about the thing in bold. Forget all of the problems with the chart and sustained unemployment and people dropping out of the job market and people accepting lower pay or benefits and everything else that your red and blue chart doesn’t address. That “steepest climb” you’re talking about … that climb doesn’t show job growth. Every one of those months shows continued job losses. And the time when the stimulus end?—that’s the time where there is actual job growth. The chart, in other words, can tell a story that’s exactly the opposite of what you’re saying in bold.
Now, you can argue that the stimulus resulted in smaller job losses than there would have otherwise have been, or that the job growth at the tail end of the chart was sparked by the stimulus that preceded it—you can argue these things, but the chart doesn’t prove these things. The chart is just data, with its flaws and limitations.
Seriously? Leaving aside the bit about your troubles with pesky “data”, your expectation is that one month: catastrophic job loss. Next month: spectacular, robust return to full employment of the go-go days of old. In the history of the world, I challenge you to show me a recession that ended abruptly. The one you might point out is the one you also wouldn’t want to mention, as it ended as a direct result of massive and sustained government spending (see: World War II, in which basically everyone in the country had a fake “government” job. How’d that work out for us?). They all end more or less like what we’re seeing now, a gradual improvement in “bad” numbers, then progressive and building improvement on “good” numbers. Businesses don’t simply rehire x-million workers overnight; in fact, they only hire when they absolutely have to, and are thus not typically leading indicators of a recovery. You’ll recall that this recession was declared “over” in September of 2010.
Likewise, you can see the same trending in the diminishing output gap. I know, I know, more dread data. The Democrat and his empirical reality crap again. But it’s a fact: the economy is improving, if slowly. It improved more quickly during the time of the stimulus. Were said stimulus still unspooling, we’d be seeing faster improvement now. The sooner we close said output gap, the sooner revenues improve and the sooner the deficit “crisis” is at an end.
The GOP, of course, knows this too. That’s why they’re riding this particular hobby horse so hard right now. It’s the opportunity to jam their view of society down our throats while the public is scared and feeling serious economic pain. Once things noticeably improve there will be even less stomach for “shared sacrifice” at the hands of eviscerating the social safety net coupled to deep tax cuts for the rich. So, from their perspective it’s now or never. That fact, as much as anything, is why they all voted for the Ryan plan. They see this moment as their last, best chance to end Medicare this decade.
Let me see if understand this: You originally posted a quote that suggested we’re living in a conservative dream-world in which government has shrunk over the past two years, and that this has caused economic stagnation. Now you’re arguing that things have gotten better these last two years because of Democrat policies. I don’t think there’s a consistency here, but I have to tip my hat to the partisan dexterity.
In, as Yglesias likes to say, a “decent world,” we’d all agree that (1) a job loss chart can’t tell the whole story of the economy, (2) the job loss chart doesn’t reflect the number of people who have given up and dropped out of the labor market, and (3) throwing red and blue colors on a chart doesn’t mean you’ve shown causation.
Nope. I’m pretty clearly pining for a world in which the media questions conservative desires and their likely outcomes based on real world observations. How’s austerity working out in the UK? How’s government-based job loss affecting our larger economy, re: the jobs chart? Why do you think more job loss at the hands of state and local cutbacks will magically create jobs when, in fact, more people will be out of work and have no money to spend in the broader economy? That sort of thing.
I’m also saying that in a world with larger implementation of “Democrat policies” that the jobs graph would look better than it does. That’s not “partisan dexterity,” it’s cold reality. Government funded jobs are jobs. Period. People are employed to do something and receive a paycheck. That money feeds back into the larger economy. As the private economic situation improves, those government backed jobs can begin to taper. It’s no coincidence that the steepest climb in that chart is also the period of highest government stimulus and the graph flattens as the stimulus ends.
Predictably, we’re also seeing exactly this model play out in the auto industry. Government directly funds US auto companies. Those companies and their suppliers remain in business. People are employed. Conditions improve. Companies repay government and go their merry way. And but also: no Serious People seem to notice. Ever.
Far from it. The conservatives and their media enablers act as if none of this has transpired. Cuts today, cuts tomorrow, cuts forever! Couple that with some high income tax breaks and a ban on abortions and the country would start to grow again! Huzzah!
“…in a decent world, conservatives would be forced to acknowledge that these are the [employment] results they claim to want. The private sector’s not being held back by the grasping arm of big government. Government is shrinking. And the shrinking of the government sector isn’t leading to any kind of private sector explosion. It’s simply offsetting meager private sector growth. Indeed, I’d say it’s holding it back. Fewer state and local government layoffs would mean more customers for private businesses and even stronger growth on the private side.”
— **Matt Yglesias**, pining for a decent world. That sort of attention to detail would require the media to leave critical questions about Weiner’s penis on the cutting room floor. I don’t think *anyone* wants to live in an America that’s like that.
What’s sad about this is that Yglesias knows he’s being disingenuous. He knows the the size of government isn’t measured by the number of people it employs. He knows that federal spending has increased substantially during Obama’s presidency. He knows that federal contractors are counted in the private sector employment numbers. He knows that there are more, not fewer, regulations now than there were two years ago. He knows that there are more, not fewer, laws on the books now than there were two years ago.
Democrats had control of this country for two years, and things are terrible. I understand it’s the job of the political hack to spin this as a Republican failure, but it isn’t one. In a decent world, Yglesias would acknowledge this.
Indeed, our troubles began on Jan 19, 2009 and haven’t improved a whit since. Goddamned Democrat monsters:
"A number of economists tell us if we can cut spending it will lead to a better environment for job creation in America"
— John Boehner, Speaker of the House.
Exactly what number of economists would that be, John? One? Two? Because the vast preponderance of economists, at least those located anywhere on the Earth think otherwise. And you don’t have to throw your lot in with a bunch of pointy-headed intellectuals either, because that’s an experiment that’s been tried. In fact, they’re trying it right now in the UK and, hey presto!, it’s costing jobs not creating them. And the UK’s experience is far from being an outlier in this regard. Cutting government spending to “create” jobs is something that’s never been shown to, you know, work. Ever.
"…how much more concrete could our current situation be? Republicans — and, unfortunately, some Democrats too — are pushing for an economic austerity plan that will keep unemployment high and the job market loose. The result is downward pressure on wages, which keeps middle-class incomes stagnant and corporate profits high. This benefits the executive and investor class, and while it’s a shortsighted benefit, it’s a benefit nonetheless. And it’s not thanks to globalization or returns to education or anything like that. It’s due to a deliberate political decision that favors the rich at the expense of everyone else."
— Kevin Drum
If only we had a particularly skilled orator in high office somewhere who could use some sort of bully pulpit to explain this concept in simple terms once or twice a day from now until the thought finally sinks in and takes root. Meh: So it goes.
My guess is that Republicans are hearing from the business lobby that even risking a default would be totally unacceptable.
This because he notes Paul Ryan’s recent statement implicitly accepts that the debt ceiling will be raised (not can be, or might be):
"I want to make sure we get substantial spending cuts and controls in exchange for raising the debt ceiling"
Fair enough, Chait, and I’m sure they are already hearing it from the business lobby, but I think you’re forgetting the Tea Klanners in the back benches as well as the rump of the idiot Blue Dogs who all too often also think along similar, overly simplistic economic lines. We should never forget that a smaller and less organized contingent of these idiots managed to defeat the initial bailout, sending shockwaves through the markets that then and only then convinced them to do what was right (and not what played well with their foolish constituencies, most of whom want the US on a gold standard as soon as possible).
The problem with a similarly construed default bait-and-switch in which a symbolic first vote happens and then is undone some time later: the shockwaves in this case would be the end of the American economy as we know it. And there’d be no take-backs. It would simply be over. Once the genuine possibility of a default is even raised, you’ve basically defaulted. Why should anyone act otherwise in the aftermath of such a near-default? The thinking would immediately coalesce along the lines of: they didn’t actually pull the trigger this time, but we’re just one election away from something like that happening, and that’s more risk than we can bear. Get a few of these “I’m heading for the doors” mentalities together and our whole economic construct falls apart. Irrevocably.
They’re dumb enough, they’re bad enough, and dog gone it, people (will) hate them. But, rest assured, they’ll find a way to do it and will be laughing all the way to the gold deposit bank and calling it strict constructionism.