Paul Krugman

Paul Krugman And Robert Reich: Sages On The Economy Too Much Ignored!

We have two brilliant, courageous educators who have promoted the understanding that the only way to get out of the economic downturn we have been in, is to do more stimulus spending, and have proved by what is going on in Europe that austerity is a disastrous policy, but they are too much ignored by many people, who choose to believe the conservative and Republican mantra on the economy, which is to do more of the same economic policies that have failed, those of George W. Bush, and Ronald Reagan before him.

Paul Krugman of Princeton University, winner of the Nobel Prize in Economics, and columnist for the New York Times, is a brilliant economist, and has called for a budget package that does not destroy the middle class any more than it is already!

So has Robert Reich, former Secretary of Labor under President Bill Clinton, and Professor of Political Economy at the University of California, Berkeley, who has advised policies that make sense, but is also ridiculed by those who do not understand our history, and the economic cycle!

To promote austerity is seen as wrong headed, and would lead to a disastrous downturn in the economy, something Great Britain’s government has discovered, and both men advise us NOT to follow the same course!

The future of the middle class and the poor is at stake, and we would be wise to respect and follow the advice and counsel of both Krugman and Reich at this delicate time!

Nobel Prize Winner Paul Krugman And The American “Depression” Solution: An Activist Government!

Paul Krugman, the winner of the Nobel Economics Prize, columnist for the New York Times, and Professor at Princeton University, has written a new book about how to deal with the American “Depression”, as he calls the Great Recession.

Just suggesting that we are going through a depression is a stunning statement, but Krugman, despite attacks from conservatives, Republicans, and Texas Congressman Ron Paul and his libertarian views, is correct in stating that austerity, being pursued in Great Britain and elsewhere in Europe in a way that has led to a worsening economic condition throughout the continent, is absolutely the wrong thing to do at this time.

The time for cutting spending is when there is a booming economy, not an economy with millions of people unemployed, and attempts being made to cut back the social safety net for desperate people. As Krugman writes, it is John Maynard Keynes, whose ideas helped Franklin D. Roosevelt during the Great Depression, who needs to be followed today.

After all, even Richard Nixon said he was a Keynesian when he decided to impose wage and price controls in the 1970s, and it was Keynesian ideas that helped Gerald Ford and Ronald Reagan during the two worse economic downturns in the 1970s and 1980s since the end of the Great Depression until those time periods!

So Krugman advocates much more government intervention and spending than Barack Obama was able to get through Congress in 2009, and argues that had more been done then and since, our economic condition would be far better than it is now.

There may be skeptics, and certainly Ron Paul supporters live in their own parallel universe, but Paul Krugman needs to be listened to, and followed, hopefully, by a Democratic controlled Congress in 2013 and after!

2011 Is Becoming A Repeat Of 1937-1938! Economic Disaster In The Making!

In 1937, under great pressure from critics, President Franklin D. Roosevelt cut back federal spending on the New Deal after four years of greatly increased spending, which had brought down the unemployment rate and given millions of Americans hope for the future, with the growing number of jobs and economic expansion resulting from people having income increases.

Conservatives then, as now, condemned the New Deal spending, and Roosevelt, unfortunately, reacted to it, and the result was the infamous collapse of the economy again, what is referred to as the Recession of 1937-1938 within the era of the Great Depression.

The result of what was done due to conservative pressure was the following:

1. The Dow Jones Industrial Average dropped 49 percent from its peak in 1937 by the year 1938.

2. Manufacturing production dropped by 37 percent, greater than from 1929-1933 under President Herbert Hoover.

3. Unemployment percentages, which had reached 25 percent in 1933 as Hoover left the Presidency and then declined to 14 percent, suddenly rose to 19 percent because of the cut in federal spending, and the corresponding loss of jobs all over again.

4. Price declines, due to lack of spending, led to deflation, which is far worse than inflation.

The events of the past week, with steep stock market declines, and gyration of stock prices like we have never seen them before, is a danger sign, a warning sign, that we could have a disastrous economic collapse that could be even worse than 2008!

So the urging of Nobel Prize winning Paul Krugman of Princeton University and the New York Times, and of former Labor Secretary, (Bill Clinton) and University of California at Berkeley Professor Robert Reich that MUCH MORE federal spending is needed to stimulate the economy, and that budget cuts on a massive scale with no tax increases is a disastrous policy, needs to be listened to by government leaders!

However, with a GOP House majority, and the fact that Republicans can filibuster in the Senate with their 47 members, it makes such a possibility just about impossible!

The American people, by their ignorance or lack of understanding, have caused this mess by creating a split Congress, with, of course, corporate spending endorsed by the Citizens United case of the Supreme Court, playing a major role as well in causing a disastrous economic situation, which will cause much suffering, and guarantee the worst economic conditions since the Great Depression will become far worse in the next two years, until the next Congress, hopefully, will reverse course, but only if the Democrats win both houses and keep the White House!

Paul Krugman And Robert Reich Challenge Obama: Stop Giving In To Opposition Republicans!

Leading liberal, progressive voices such as NY Times columnist Paul Krugman, winner of the Nobel Prize in Economics and Professor of Economics at Princeton University, and Robert Reich, former Labor Secretary under Bill Clinton, and Professor of Public Policy at the University of California, Berkeley, have called upon President Obama to stop giving in to Republicans, as they claim he did in December’s and this month’s budget deals.

They call upon the President to work against the temptation to copy the Republicans on the budget issue, and instead call for tax increases on the top two percent, and support the Medicare and Social Security system by recognizing that we must all have shared sacrifice and expect the closing of tax loopholes and the raising of taxes on the middle class, which should have gone up during the Bush administration to cover the wars in Iraq and Afghanistan, and the prescription plan for seniors, all of which was paid for with borrowed money.

This is a bold statement by both, and one awaits Barack Obama’s reaction to the Paul Ryan plan to change Medicare to a voucher system and avoid any new taxes.

The Obama speech will be made public today, and it may have a great effect on united backing of Obama within his party for the 2012 election, and certainly will frame the debate over the budget and the raising of the debt ceiling, challenges the country faces before the year ends!

The Danger To Academic Freedom At Universities, The Media And All Free Thinkers!

It is interesting that a person, with no special qualifications other than a big mouth and ability to be outrageous in his statements on radio or cable, can be totally protected in his free speech rights, but if a college professor or intellectual voices his educated judgment, the move is on to discredit him, and destroy him if possible, as a radical or an extremist!

This has happened to Professor William Cronon, the President Elect of the American Historical Association, of which the author is a proud member, for his criticisms of the Wisconsin state government for what it has done and is doing to the rights of state employees regarding collective bargaining, an idea that came to Wisconsin earlier than anywhere else!

Paul Krugman of the New York Times brings attention to this issue in the Sunday edition of his column, and it is, indeed, very troubling.

The same tactic has been used against those scientists who promote climate change legislation, and the aim of the right wing in the Republican Party and in the news media is clear: Do everything to “shut up” the college professors and intellectuals who dare to challenge the right wing agenda of destroying academic freedom and free speech for those who disagree with their agenda!

The Rush Limbaughs, Glenn Becks, Sean Hannitys, Bill O’Reillys, etc of talk radio and television will continue to spew forth their propaganda, but those who oppose their lies and deceptions must not allow themselves to be intimidated from telling the truth, and promoting an open minded look at history, science, public affairs, and every other area of knowledge, as it is precisely these professors and intellectuals who keep the hope alive of a truly educated population who understands history, science, public affairs, rather than the misconceptions and fabrications of the far right, which will stop at nothing to promote their propaganda, and have taken control of the Republican Party, lock, stock and barrel, to the detriment of the American people!

Are We On The Way To A Third Depression? The 2010 Midterm Elections Are The Key! :(

Nobel Prize Winning Economist Paul Krugman, a NY Times columnist, has stated recently that the United States is in danger of falling into a “Third Depression” that will last for many years! 🙁

This is not the first time the suggestion has been made, mostly out of fear, that the economic downturn that began in December, 2007, may slip further into a long range deterioration in employment, housing, corporate growth, state and local government services, and sustainability of the government “safety net”! 🙁

Krugman describes what he calls the “Long” Depression of 1873-1879, begun by the Panic of 1873 on Wall Street, but causing economic instability for two decades after the formal end of the event, lasting until the turn of the 20th century!

Of course, the later “Great” Depression of 1929-1939, which saw a revival from 1933-37, but then a further decline in 1937-38, was the worst economic times this nation has ever seen! 🙁

The problem in Krugman’s estimation is that MORE economic stimulus is needed, rather than less, and this debate about spending versus the deficit is raging in Washington, DC, and will determine the future of this economic downturn we are living through, which is called by many others besides Krugman, as the “Great Recession!” 🙁

IF the Republicans, with their lack of ideas on the economy other than more tax cuts for the rich, somehow regain control of both houses of Congress in the midterm elections, then it seems quite clear that we are doomed to a further decline and total social disintegration, as if conditions do not improve, the danger of a breakdown of law and order is a real threat! 🙁

As the author stated in an earlier entry, we cannot afford to let 2010 and after become 1937-38, when Franklin D. Roosevelt gave in to criticism of government spending, cut government programs, and triggered a new economic collapse only turned around by World War II!

So the midterm elections are the key to our economic future, and will determine much of the next decade of economic history for all Americans!

The First Decade Of The 21st Century: “The Big Zero”

We are ending the first decade of the 21st century in a few days, and as we look back, the realization is, as Paul Krugman in the NY Times calls it, that the period was “The Big Zero”, with the nation in the midst of the “Great Recession” as it ends.

How is it Zero? First, the investment in stocks in the beginning of the decade came out with no profit by its end, including for those who were planning for their retirement, the so called “Baby Boomers” born after World War II.

Job Creation was Zero, and the highest unemployment since 1983 by the end of the decade resulted.

Housing prices came out Zero, after a boom early in the decade, and a complete collapse late in the decade.

Median family household income was also Zero, a sad commentary on the economic disaster of the past decade.

Overall, nothing good happened economically, and one has to wonder how we emerge from this economic mess with the possibility now of expansion of war into Yemen, and concern about the future of Iran and Pakistan, along with the continuing wars in Iraq and Afghanistan.

Tax cuts and deregulation under George W. Bush contributed a lot to this disaster, and yet we hear nothing new from GOP leadership.

What a difference from the Clinton 90s when there may have been moral lapses on the part of the President, but it was a time of economic boom and avoidance of foreign wars. To try to make this first decade of the new century look good will be a massive undertaking that I doubt anyone who is sane will attempt to do!

Great Advice From Economist Paul Krugman: Pass The Imperfect Health Care Legislation!

Nobel Prize winner Paul Krugman, Princeton economist and NY Times columnist, gives all of us who are exhausted by the Health Care controversy great advice: PASS THE BILL!

Contradicting those liberals, such as Howard Dean, who say we should drop the legislation and start all over, Krugman points out that every major reform ever passed starts out as imperfect and gets better over time.

Passage of the bill would do the following:
1. Discrimination based on medical condition or history would be banned. Pre-existing condtions would no longer be a basis for rejection, and insurance could not be canceled when someone gets sick.
2. Substantial government aid to those who are not covered for health insurance at their work would be provided.
3. Small employers who provide health insurance for their employees would receive tax breaks.
4. Premiums for lower income and lower middle income workers would drop dramatically.
5. 30 million people not covered by health insurance would come under the umbrella of this legislation.
6. This would be the first strong effort to curb health care costs, which have been rising much faster than inflation.

To follow the leanings of Howard Dean and other far left liberals would mean giving the same advice as conservatives and the Republican party has been promoting all along. But if nothing is done now, then it is unlikely that anything will be accomplished in the remainder of the Obama Presidency, and very possibly, for the next generation or more.

To believe that the Democrats will have a bigger margin of seats in 2010 or beyond is certainly a utopian vision. The time for action, although imperfect and incomplete, is NOW!