News, politics, progressive culture, music, acoustic music

Archive for the ‘Political Economy’ Category

Shorter Krugman: Obama is a Republican

with one comment

Paul Krugman tries to figure out why the President seems to downplay Keynesian responses to the ongoing economic nightmare:

I’m not alone in marveling at the extent to which Obama has thrown his rhetorical weight behind anti-Keynesian economics; Ryan Avent is equally amazed, as are many others. And now he’s endorsing the structural unemployment story too.


The question then is why. As I’ve tried to show many times, the facts overwhelmingly refute the anti-Keynes talking points. Neither the invisible bond vigilantes nor the confidence fairy have made an appearance. So why is Obama talking up those talking points?

OK, here’s an unprofessional speculation: maybe it’s personal. Maybe the president just doesn’t like the kind of people who tell him counterintuitive things, who say that the government is not like a family, that it’s not right for the government to tighten its belt when Americans are tightening theirs, that unemployment is not caused by lack of the right skills. Certainly just about all the people who might have tried to make that argument have left the administration or are leaving soon.

And what’s left, I’m afraid, are the Very Serious People. It looks as if those are the people the president feels comfortable with. And that, of course, is a tragedy.

In other words, the reason Obama acts like a moderate Republican is because he is a moderate Republican.

Meeting adjourned,brothers and sisters. the bar is open and I’m gonna use it.

Written by slothropia

July 6th, 2011 at 8:36 pm

Krugman Destroys Paul Ryan Budget

without comments

Who wants to hear Paul Krugman totally dismantle the Paul Ryan federal budget plan?

Melissa Block speaks with Paul Krugman — economics professor at Princeton University and a columnist for the New York Times — and Douglas Holtz-Eakin — president of the American Action Forum and former chief economist for the President’s Council of Economic Advisers. Krugman and Holtz-Eakin discuss Republican Rep. Paul Ryan’s budget proposal, which suggests turning Medicare and Medicaid into state block grants to address the federal budget.

Follow the link to NPR and listen to the story.

Here’s Krugman making the same points in Print:

1. Savage cuts in programs that help the needy, amounting to about $3 trillion over the next decade.

2. Huge tax cuts for corporations and the wealthy, also amounting to about $3 trillion over the next decade.

The fake points are:

3. “Base broadening” that makes those tax cuts revenue neutral. Ryan has refused to name a single tax preference that he would, in fact, be willing to get rid of; all he and his party do is keep repeating “revenue-neutral” in the hope that people believe them.

4. Unspecified cuts in spending outside Medicare, Medicaid, and Social Security that would shrink the government — including defense! — back to 1920s levels.

5. Replacing Medicare with vouchers that would leave most seniors unable to afford insurance. Right.

So if we focus only on the real stuff, this is a plan to leave the deficit pretty much where it is, but to sharply cut aid to the poor while sharply cutting taxes on the rich. That’s serious!

I await the President’s statement tomorrow with much trepidation.

Written by slothropia

April 12th, 2011 at 9:32 pm

Krugman: Down with Rotten Mellon Doctrine

without comments

Nobel Laureate and the official economist of, Paul Krugman, presents more evidence that Republicans and Tea baggers are neither stupid nor misinformed but simply rotten to the core:

“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” That, according to Herbert Hoover, was the advice he received from Andrew Mellon, the Treasury secretary, as America plunged into depression. To be fair, there’s some question about whether Mellon actually said that; all we have is Hoover’s version, written many years later. But one thing is clear: Mellon-style liquidationism is now the official doctrine of the G.O.P.

Two weeks ago, Republican staff at the Congressional Joint Economic Committee released a report, “Spend Less, Owe Less, Grow the Economy,” that argued that slashing government spending and employment in the face of a deeply depressed economy would actually create jobs. In part, they invoked the aid of the confidence fairy; more on that in a minute. But the leading argument was pure Mellon.

Here’s the report’s explanation of how layoffs would create jobs: “A smaller government work force increases the available supply of educated, skilled workers for private firms, thus lowering labor costs.” Dropping the euphemisms, what this says is that by increasing unemployment, particularly of “educated, skilled workers” — in case you’re wondering, that mainly means schoolteachers — we can drive down wages, which would encourage hiring.

There’s more. Read the whole thing.

Written by slothropia

March 31st, 2011 at 7:50 pm

RSA Animate: Crisis in Capitalism

without comments

Fighting a losing battle v dreaded rino virus and thus too sick to post. But here’s a very interesting talk about crises in capitalism. Take good notes. there will be a quiz.

Written by slothropia

March 14th, 2011 at 1:45 pm

Egypt: It Can’t Happen Here – Or Could It?

without comments

Last Friday morning I shared the relief, if not the ecstatic joy, that the people of Egypt must have felt when Mubarak’s resignation was suddenly and tersely announced. “At last,” I thought, “Our long international nightmare is over.” Having obsessed over developments in Egypt for two weeks I thought that I could think about something else for awhile – like my 2010 tax return for example.

OTOH while the spotlight has swung away from Egypt’s closeup, the revolution there is far from complete. Heck, I don’t think even Tunisia’s Jasmine Revolution™ is quite complete yet.

Egypt has taken a giant step forward but on a very hazardous path. What may facilitate a successful completion of the journey to a democracy is the manner in which the revolution has so far been conducted. The people of Egypt reached a consensus about the kind of change the country needs and then peacefully took to the streets in growing numbers. Mubarak never saw it coming and in the end had no way to resist the demand for change, starting with his resignation.

From here it looks like the people of Egypt are demanding two kinds of distinct but intertwined change. They want procedural and constitutional change, so that everyone has a say in the direction of the nation, but they also want outcomes and conditions to change. They want to be free of arbitrary persecution and prosecution and they want changes in the material conditions under which they live, meaning more employment opportunities and a higher standard of living.

The historic and remarkable element in the Egyptian is the relatively peaceful way in which a nation changed its direction. Contrast with conditions here in the U.S. Bob Herbert says , “We’re in serious danger of becoming a democracy in name only.” :

While millions of ordinary Americans are struggling with unemployment and declining standards of living, the levers of real power have been all but completely commandeered by the financial and corporate elite. It doesn’t really matter what ordinary people want. The wealthy call the tune, and the politicians dance.

So what we get in this democracy of ours are astounding and increasingly obscene tax breaks and other windfall benefits for the wealthiest, while the bought-and-paid-for politicians hack away at essential public services and the social safety net, saying we can’t afford them. One state after another is reporting that it cannot pay its bills. Public employees across the country are walking the plank by the tens of thousands. Camden, N.J., a stricken city with a serious crime problem, laid off nearly half of its police force. Medicaid, the program that provides health benefits to the poor, is under savage assault from nearly all quarters.

The newspapers – and cable news and talk radio – continue to go along for the ride. The corporate media continues its transformation into a Pravda for obscenely wealthy capitalists. The
rich own the media and make it serve their needs. As John Cole says:

One thing that even the dim bulbs in the media should understand by now is that there is in fact a class war going on, and it is the rich and powerful who are waging it. Anyone who does anything that empowers the little people or that threatens the wealth and power of the plutocracy must be destroyed. There is a reason for these clowns going after Think Progress and unions, just like there is a reason they are targeting wikileaks and Glenn Greenwald, Planned Parenthood, and Acorn. To a lesser extent the fail parade that was the Daily Caller expose on Journolist was more of the same.

You have to understand the mindset- they are playing for keeps. The vast majority of the wealth isn’t enough. They want it all. Anything that gets in their way must be destroyed. They don’t care if they poison every stream or crack the foundation to your house or if your daughter dies getting a back alley abortion or if every one in your mining town has an inoperable tumor. They just don’t give a shit.

Oh well; Happy Valentine’s Day everybody.

Written by slothropia

February 14th, 2011 at 10:42 am

Bernie Sanders Should Stay in the Senate

with 2 comments

Hello, Guardian readers. And thanks to Michael Tomasky for linking to this little blog and my December 1 post about Bernie Sanders’ interview with Rachel Maddow.

Tomasky seems to take at face value my suggestion that Bernie should run for President. Actually it was just my way of saying Bernie is a hero to me and many others. I do not want to see him run for President because he might not win and he is truly a national treasure in the Senate. It would be neat, however if he could be joined in the Senate by a few more socialists of his ilk. Fat chance, I know.

Here is some of Bernie’s filibuster from earlier today, which I shamelessly (but legally) lifted from KO’s Countdown site.

Visit for breaking news, world news, and news about the economy

This is what Bernie does best. I don’t know why progressive Democrats are seemingly so reluctant to speak like this and to bring such clarity to issues. I have the feeling that if some teabag Republican accused Bernie of waging class warfare he might shoot back “Yeah? Well you started it. But we’re gonna finish it.”

I think that the push back on the Obama/McConnell compromised has surprised and raised the morale of many liberal and progressive Democrats. Maybe we can start a movement or something.

Written by slothropia

December 10th, 2010 at 9:52 pm

truthout: Revisiting the Politics of Social Change by Cary Fraser

without comments

Currently, truthout has a post up by Cary Fraser about Revisiting the Politics of Social Change that along the way makes a number of very astute observations on the site of the U.S. spoiler alert: It looks pretty bad. There is so much in the piece that needs to be read and discussed, I would like to just post it aas is. But that’s not how we do things in the blogosphere, so let me quote some excerpts and encourage everyone to go read the whole thing for themselves.

The November 2010 midterm elections have unveiled the fissures in America to reveal a society suffering a loss of self-confidence and a fragmentation of its political system…In the face of the Tea Party’s mobilization of anti-Obama sentiment around concrete economic issues, the administration demonstrated that it was unable to fashion a coherent response to the populist onslaught and the Republican Party leadership’s obstructionist attempts to block policy initiatives to ameliorate the consequences of the economic downturn.

After the brilliant 2008 campaign, I for one thought that the new President would be able to advance the progressive cause by prioritizing its policy goals, and pursuing them effectively. Obama would use his mighty oratorical skills to persuade the people of the need to act decisively in pursuit of solutions to the nation’s problems. But instead of Lincoln with a jump shot we got a neo Liberal Prufrock, afraid to eat a peach or take a stand. This dithering weakness and betrayal of his base allowed the Tea bag GOP to define Obama and the Democrats in terms that fit the Right’s narrative.

But wait! There’s more.

The Obama administration has found itself hostage to Wall Street’s predatory practices in the name of “saving American capitalism” – with adverse consequences for the wider society. This perception of relative disadvantage coming out of the economic crisis has been validated by recent reports from the federal government. According to the Washington Post, recent government indicators show that:

*Even as conditions are likely to remain miserable for job seekers for years to come, an extraordinary bounce-back is underway in the nation’s corporate sector, with profits rebounding 28 percent over the past year to an all-time high in the third quarter.

*Businesses’ spending on compensation for employees, by contrast, rose only 7.6 percent.

*Among the reasons for the strong earnings growth were that financial companies are no longer suffering from massive write-downs on bad investments, as they were in 2008, and profits from U.S. firms doing business overseas have shot up.

I don’t think these observations are controversial, although I don’t think the White House would accept them. Tragically, the Obama Administration has spent most of its first two years helping corporations grow stronger while doing next to nothing to rescue or empower middle class and working class families.

The 2010 midterm election has led the Obama administration to a fork in the road – in both ideological and political terms. The president will have to decide whether he will live up to the promise of change that defined his 2008 campaign or whether he will be content with a legacy of being the savior of the primordial predatory capitalism that has eviscerated the middle and working classes of America.

I wish I had any hope at all that Obama would choose door number 1. But I do not.

However, beyond the changes in health care that emerged from the recent legislation, progressive social forces will have to offer an alternative political vision of America in opposition to the predatory ethos of governance that the Republican Party, sections of the Democratic Party and both parties’ corporate paymasters have embraced since the Reagan era. The three decades of Republican ascendancy in American politics since Ronald Reagan was elected president in 1980 have been defined by widening income disparities between the truly wealthy and the rest of the society; the accelerating export of jobs and industrial capacity to other countries; growth of the underground economy based on the trafficking of drugs, guns and other dangerous substances; the neglect of public education and an expansion of the prison-industrial complex, resulting in the underdevelopment of the intellectual capital available to society; an increasing deference to Wall Street’s speculative excesses and its focus upon the index of short-term business profitability; and neglect of the country’s infrastructure, a dereliction that was highlighted in the wake of Hurricane Katrina in 2005.

Progressives and/or liberals in the U.S. can no longer allow the Democratic party to act or speak for them. The democratic party is dysfunctional, divided and compromised. The two party system is not meeting the needs of the nation because a party of the left is desperately needed but is not an option in the near term.
Therefore the U.S. left (loosely speaking) need to organize around issues and principles and not be afraid to call out those in power of whatever party.

A broader vision of American economic recovery is now more necessary than that provided in the first two years of the Obama administration. The recent call by Warren Buffett, Bill Gates and Ted Turner for the government to tax the wealthy at higher rates than those currently applied will undoubtedly help to intensify the debates over tax reform under the Obama administration. It will be important for other sectors of society to become involved in challenging the rhetoric of lower taxes that has been championed by Republicans from Reagan onward. The illusion that the rest of the world will continue to finance America’s deficits for the maintenance of its claim to being a superpower is not sustainable over the medium- and long-term. American political debates will have to acknowledge that reality.

Further, current political leaders may need to take refresher courses in American history to understand that America’s influence was greatest in the world when its tax rates and fiscal policies helped to fuel the era of international economic stability that followed World War II. The Vietnam quagmire that led the Nixon administration to abandon the gold standard was followed by the oil crises of the 1970s, which eroded American competitiveness and triggered the progressive restructuring of the American economy away from the industrial development that had secured the U.S’s role as an international leader during the 20th century… American political leaders will have to be educated that the Republican shibboleths of low taxes, limited government and predatory capitalism will contribute to the further erosion of America’s appeal in the wider world. Further, those shibboleths, if enacted as policy, will limit American society’s capacity to avoid the crippling effects of high levels of unemployment and underemployment over the long-term.

In both the near and long terms, following the Right’s policy prescriptions will result in a smaller economic pie that is less equally divided. And the perpetual Orwellian wars are a major component of the downward spiral of the U.S.

Like I said, everyone should read this piece for its very astute analysis.

Written by slothropia

December 5th, 2010 at 11:57 pm

Whiskey Tango Foxtrot Is Happening at the World Bank?

without comments

Remember the old days – two days ago – when the President of the World Bank seemed to advocate a return to the gold standard?

LONDON — Leading economies should consider adopting a modified global gold standard to guide currency rates, World Bank president Robert Zoellick said on Monday in a surprise proposal before a potentially acrimonious G20 summit.

Writing in the Financial Times, Zoellick called for a new system of floating currencies as a successor to the Bretton Woods fixed-exchange rate regime, which broke down in the early 1970s and involved measuring currency rates against gold.

The former U.S. trade representative, who served in several Republican administrations, said the new system “is likely to need to involve the dollar, the euro, the yen, the pound and (a Chinese yuan) that moves towards internationalization and then an open capital account.

“The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values,” he added.

Zoellick did not spell out in detail how this system might work, but said it would help to rebuild the confidence of financial markets and the general public in the global monetary system after the financial crisis.

Neither does the President of the World Bank:

NEW YORK ( — A return to the gold standard by major economies is not practical, World Bank President Robert Zoellick said Wednesday, just two days after an opinion piece he wrote stirred talk of the need to do just that.

“The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values,” he wrote in the piece that appeared on the opinion pages of Monday’s Financial Times.

Speaking in Singapore Wednesday, Zoellick clarified that he was referring to the need for gold to play a role in a new international monetary system, which would need to balance the values of the the dollar, the euro, the yen, the pound and eventually the Chinese yuan.

“Gold is now being used, being viewed, as an alternative monetary asset. This is not the same as a gold standard,” he said in prepared remarks.

Press accounts of his presentation said he added “I don’t believe you can return to a fixed exchange rate system and that is the gold standard. I’m not advocating a return to the 19th century when money supply was linked to gold.”

World Bank spokespeople in Washington couldn’t confirm those comments due to the time difference with Singapore.

Whatever Zoellick was trying to accomplish with his original remarks, they were taken by many as a call for a return to a gold standard and “sound money” to maintain the value of currency by limiting how much of it is created. This is a fairly traditional idea of conservative economists and monetarists like Alan Greenspan and Milton Friedman. Many economists and historians put at least some of the blame for the Great Depression on the gold standard.

Economist Nouriel Roubini reacted pretty swiftly to Zoellick’s trial balloon:

Reviving the gold standard, a move to regulate global money supply, is a bad idea in that it will make business cycles more volatile and take away central banks’ abilities to fight inflation, says New York University economist Nouriel Roubini.

It also won’t help monetary authorities fight unemployment.

“A fixed exchange regime, even if it is not a gold standard … that world just doesn’t work. Because in that world, monetary policy by definition instead of being counter-cyclical becomes pro-cyclical,” Roubini tells CNBC’s NetNet.

“Suppose you have a fixed exchange rate regime … it just exacerbates the business cycle.”

The gold standard, a global fixed exchange rate that has garnered some advocates these days, would take away a country’s ability to heat or cool its respective economy in an effort to create jobs or tame inflation.

Central banks would also be unable to stockpile money to act as a lender of last resort in the event of a run on banks.

And so Zoellick walked it back a bit. But his original musings should not be a surprise. After all the World Bank has long been a happy home for reactionary economics. This incident does illustrate the extent to which the Right in the U.S. is actively seeking a return to a 19th century political economy.

Maybe it’s just a coincidence, but it appears that other conservative notions are finding a welcome at the world bank:

Parents and Friends of Ex-Gays & Gays – PFOX – will soon be able to say that its programming is supported by funding provided to it by the World Bank.

As part of the World Bank’s efforts to ”strengthen communities,” the Community Outreach Program coordinates an annual workplace-giving campaign that includes World Bank matching funds given to various community groups and international nonprofits. Depending on the level of employee participation, the bank’s matching funds are either 50 percent or 100 percent of the employee donations.

For the first time, the World Bank’s 2010-2011 Community Connections Campaign will include PFOX immediately above Parents, Families and Friends of Lesbians and Gays (PFLAG) on its list of eligible organizations, a fact confirmed Wednesday evening by a World Bank spokesperson.

WTF, World Bank. Just WTF.

Shock Doctrine in the UK

without comments

I was watching the world news on BBC America a few nights ago and the talking heads were all in agreement that the Tory government had no choice but to make draconian cuts to the UK budget. Unless they wanted to emulate Japan, which did not reduce living standards during its economic troubles in the ’90s or during the current world wide slowdown. Japan may not be paradise but it seems to be getting through the crisis as well as or better than most of the industrialized world. .

Here is George Monbiot , describing what the Coalition government in Britain is up to. This will also serve as a prediction of what the Teabag Republicans will do if they win a majority in the House of Representatives and start drafting federal budgets:

In her book The Shock Doctrine, Naomi Klein shows how disaster capitalism was conceived by the extreme neoliberals at the University of Chicago. These people believed that the public sphere should be eliminated, that business should be free to do as it wants, and almost all tax and social spending should be stopped. They believed that total personal freedom in a completely free market produces a perfect economy and perfect relationships. It was a utopian system as fanatical as any developed by a religious cult. And it was profoundly unpopular. For a long time its only supporters were the heads of multinational corporations and a few wackos in the US government.

In a democracy under normal conditions, those who were harmed by abandoning public provision would outvote those who gained from it. So the Chicago programme couldn’t be imposed in these circumstances. As the Chicago School’s guru, Milton Friedman, explained, “only a crisis – actual or perceived – produces real change.” After a crisis has struck, he added later, “a new administration has some six to nine months in which to achieve major changes; if it does not act decisively during that period, it will not have another such opportunity.”

The first such opportunity was provided by General Pinochet’s coup in Chile. The coup was plotted by two factions: the generals and a group of economists trained at the University of Chicago and funded by the CIA. Their ideas had already been comprehensively rejected by the electorate, but now the electorate was irrelevant: Pinochet used the crisis he had created to imprison, torture or kill anyone who dissented. The Chicago School policies – privatisation, deregulation, massive tax and spending cuts – were catastrophic. Inflation rose to 375% in 1974; the highest rate on earth. Even so, Friedman insisted that the programme was not going far or fast enough. On a visit to Chile in 1975 he persuaded Pinochet to hit much harder. The result was a massive increase in unemployment and the near-eradication of the middle class. But the very rich became much richer, and the corporations, scarcely taxed, deregulated, fattened on privatised assets, became much more powerful.

By 1982, Friedman’s prescriptions had caused a spectacular economic crash. Unemployment hit 30%; debt exploded. Pinochet sacked the Chicago economists and started re-nationalising stricken companies, whereupon the economy began to recover. Chile’s so-called economic miracle began only after Friedman’s doctrines were abandoned. The Chicago School’s catastrophic programme pushed almost half the population below the poverty line and left Chile with one of the world’s highest rates of inequality.

But all this was spun by the corporate media as a great success. With the help of successive US governments, similar programmes were imposed on dozens of countries in which crises ensured that the population was unable to resist. Other Latin American dictators copied Pinochet’s economic policies, with the help of mass disappearances, torture and killings. The poor world’s debt crisis was used by the IMF and the World Bank to impose Chicago School programmes on countries that had no option but to accept their help. The US hit Iraq with economic shock and awe – privatisation, a flat tax, massive deregulation – even as the bombs were still falling. After Hurricane Katrina wrecked New Orleans, Friedman described it as “an opportunity to radically reform the educational system”. His disciples immediately moved in, sweeping away public schools while the residents were picking up the pieces of their lives, replacing them with private charter schools.

Our crisis is less extreme, so, in the United Kingdom, the shock doctrine cannot be so widely applied. But, as David Blanchflower warned yesterday, there’s a strong possibility that the cuts programme will precipitate a bigger crisis: “it’s a terrible, terrible mistake. The sensible thing to do is to spread [the cuts] over a long time”. That’s another feature of disaster capitalism: it exacerbates the crises on which it thrives, creating its own opportunities.

Of course there is more and I invite everyone to go ZSpace and read the whole article. I would comment that South American countries like Argentina and Brazil have done relatively well since they moved left, away from Friedman’s Randian pipe dreams.

I suspect the Tories know these draconian cuts will make them unpopular, but they are willing to risk losing the next election if they are able to tie the hands of the next Labour government. Of course, the British Right have Murdoch on their side just as do the Teabaggers in the U.S. As for the Liberal Democrats, they will probably be nearly wiped out unless they somehow manage to distance themselves from Cameron and his Thatcherite policies.

Written by slothropia

October 22nd, 2010 at 10:17 am