by PAUL KRUGMAN
Published: February 15, 2009
By now everyone knows the sad tale of Bernard Madoff’s duped investors. They looked at their statements and thought they were rich. But then, one day, they discovered to their horror that their supposed wealth was a figment of someone else’s imagination.
Unfortunately, that’s a pretty good metaphor for what happened to America as a whole in the first decade of the 21st century.
Last week the Federal Reserve released the results of the latest Survey of Consumer Finances, a triennial report on the assets and liabilities of American households. The bottom line is that there has been basically no wealth creation at all since the turn of the millennium: the net worth of the average American household, adjusted for inflation, is lower now than it was in 2001.
Read on...
Peacenik is thinking some people think Peacenik is a Doomsdayer. Particularly after Doomers made the front page of Sunday's Toronto Star and Peacenik sometimes uses the language of Doomers. But as Peacenik said, Peacenik just reads the news and comments. Here we have Krugman again talking about the illusory surge in asset values over the last decade. And the simutaneous real surge in personal and corporate debt. Peacenik asks everyone to read Dan's post at theautomaticearth. Everyone is broke. Every state. Every city. Every town. Every business. And every individual. Peacenik asks the reader to just scroll through Illargi's post at theautomaticearth. Read the red headlines. GM and California and Ireland and Latvia will probaby declare bankruptcy this coming week. Peacenik read the headlines. Peacenik thinks this is the worst economy anyone living has ever seen. Imagine that. The financial industry has created more debt than the world's GDP. Banks, pension plans and countries are broke. These are facts. Does that make Peacenik a Doomer?
Showing posts with label Krugman. Show all posts
Showing posts with label Krugman. Show all posts
2/16/09
2/13/09
Failure to Rise
By PAUL KRUGMANPublished: February 12, 2009
Or maybe not. These aren’t normal times, so normal political standards don’t apply: Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dreams.
Let’s start with the politics.
It is Friday the 13th and the world economy still exists. Financial Armageddon has been avoided for another week. Peacenik feels a generalized sense of anxiety as Peacenik surveys the financial press. Krugman has a sick feeling in the pit of his stomach as he contemplates the stimulus and the economy. Peacenik is beginning to think that minus some Black Swan event, everything will just unravel, slowly. Just like all of George Bush's efforts were to prevent a total collapse until he was out of office, Obama's efforts will delay the end. Buy time. Hope for the best. But the psychology is locked in. Peacenik doesn't think the public thinks the good old days are coming back. Peacenik thinks more and more people are agreeing with Peacenik. And that is a very worrisome development, on Friday the 13th. Have a good weekend.
By any normal political standards, this week’s Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne!
Or maybe not. These aren’t normal times, so normal political standards don’t apply: Mr. Obama’s victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama’s postpartisan dreams.
Let’s start with the politics.
It is Friday the 13th and the world economy still exists. Financial Armageddon has been avoided for another week. Peacenik feels a generalized sense of anxiety as Peacenik surveys the financial press. Krugman has a sick feeling in the pit of his stomach as he contemplates the stimulus and the economy. Peacenik is beginning to think that minus some Black Swan event, everything will just unravel, slowly. Just like all of George Bush's efforts were to prevent a total collapse until he was out of office, Obama's efforts will delay the end. Buy time. Hope for the best. But the psychology is locked in. Peacenik doesn't think the public thinks the good old days are coming back. Peacenik thinks more and more people are agreeing with Peacenik. And that is a very worrisome development, on Friday the 13th. Have a good weekend.
2/9/09
The Destructive Center
By PAUL KRUGMANPublished: February 8, 2009
What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?
A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.
Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.
Read on...
Peacenik read a lot about the stimulus plan on the weekend. Peacenik read a list of the stuff that the republicans insisted on stripping out. It was all mildly progressive, good stuff, like food stamps and health care and assistance to students. No one wants financial armageddon. Not even Peacenik. But when you read about the process and you read about the special interests and how they still wield influence it is very difficult to cheer for the success or survival of these cretins. The political process in the U.S. is so broken that it is now counter-productive. The compromise stimulus will fail. The original stimulus might have failed. Do not look in the black hole of debt. Peacenik looked.
What do you call someone who eliminates hundreds of thousands of American jobs, deprives millions of adequate health care and nutrition, undermines schools, but offers a $15,000 bonus to affluent people who flip their houses?
A proud centrist. For that is what the senators who ended up calling the tune on the stimulus bill just accomplished.
Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn’t have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.
Read on...
Peacenik read a lot about the stimulus plan on the weekend. Peacenik read a list of the stuff that the republicans insisted on stripping out. It was all mildly progressive, good stuff, like food stamps and health care and assistance to students. No one wants financial armageddon. Not even Peacenik. But when you read about the process and you read about the special interests and how they still wield influence it is very difficult to cheer for the success or survival of these cretins. The political process in the U.S. is so broken that it is now counter-productive. The compromise stimulus will fail. The original stimulus might have failed. Do not look in the black hole of debt. Peacenik looked.
11/14/08
Krugman: Return of Depression Economics
From Professor Krugman: Depression Economics Returns. A few excerpts:
I don’t expect another Great Depression ... [but] We are ... well into the realm of what I call depression economics. By that I mean a state of affairs like that of the 1930s in which the usual tools of economic policy — above all, the Federal Reserve’s ability to pump up the economy by cutting interest rates — have lost all traction. When depression economics prevails, the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly.
Peacenik thinks this is an optimistic post for a Friday. Krugman, recent winner of a Nobel Prize for economics, doesn't think there is going to be a depression. Yippee!! Have a good weekend.
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