I don't understand the statement, "printing money isn’t inflationary in a depressed economy." Friedman said the same thing about the GD.
But wasn't one of the reasons that the Venezuela economy lapsed into egregious inflation is because they printed too much money? Or was it because they didn't invest in infrastructure bonds to get the economy rolling? It gets fuzzy here for me on this issues.
By the way, Reagan wrote policy based on his horoscope and he called his wife mommy.
1
GOP hypocrisy on economics has been evident since the 1994 election that swept in GOP control of the House for all but 4 years and control of the Senate for all but 6 years.
What Prof. Krugman writes about is classic neo-conservative economic policy. It is, like its political counterpart, completely devoid of principles but full of contextual application.
Democrat in the White House? Deficits and debt are bad; social programs like food stamps are bad; stimulus infrastructure spending is bad.
But, put a Republican in the White House and suddenly deficits are immaterial, increases in national debt are not discussed or brushed away with breezy arguments about "tax cuts pay for themselves." Social service programs are still a focus for budget cuts, but the proposed "savings" are overwhelmed by tax cuts and military/Homeland Security spending increases.
No, nothing new in this column - nor in the GOP economic playbook.
My dear departed father subscribed to the saying “ A Republican cannot sit down and enjoy a good dinner unless he knows that somewhere someone else is hungry”.
Amen!
4
One point that Krugman ignores, probably intentionally, is that much more in 2019 than in 2008, there are exogenous factors that are limiting inflationary pressures. Examples are competition from foreign labor and a strong dollar. This means that a Fed reduction in interest rates is less likely now than 11 years ago to trigger inflation. Many mainstream economists fault the Fed for its December 2018 rate hike. In fact, current Republican calls for the Fed to reduce interest rates are, in fact, supportable and not as contradictory as Krugman asserts.
Apparently, GOP believes that "The Road to Serfdom" is prescriptive.
2
There was a serious recession following the First World War which was "cured" by balancing the budget and fiscal austerity. This has been the GOP/Koch brothers holy doctrine ever since, damn the facts! Especially since the Koch's father had to pay much higher taxes under FDR's New Deal. They have never understood that putting money on the street creates demand which results in more purchases which flows through to raw material manufacturers like Koch Industries.
4
Couldn't it just be simple class warfare? Maybe they really do want to make it harder for people to eat and pay their bills when they aren't working and harder to save up when they are working.
"Historically, the Republicans have been geniuses at throwing away advantages."
- US Sen Mark Hatfield-ret
"It is difficult to free fools from the chains they revere."
- Voltaire
3
Yes, those of us who have been paying attention since Reagan already know how the GOP operates. Their partisan malice and outrageous hypocrisy are easily predictable. Now Trump, along with republicans like Mitch McConnell and Lindsey Graham and the Rupert Murdoch disinformation network, have taken malice and hypocrisy to new levels. Democrats unfortunately are too weak and ineffective to respond. Unless more voters wake up in time for the next election, things will get worse and our enemies, including the GOP's friends in Russia, couldn't be happier.
6
While this column is partly true, it doesn't tell the whole story. NIETHER party seems to care about the immense debt being accrued by our government. There is no plan, not publicly announced anyway, that is being promoted to address the increasing debt. Instead, we continue to add new programs, regardless of our ability to fund it. This is complete fiscal irresponsibility on the shoulders of ALL of our elected officials. If it were a true concern of theirs, they would be shouting of the dangers of our debt from the rooftops. Instead, .....crickets......on both sides of the aisle. Why are we paying taxes again? - oh yeah, its used as punishment.
@Chad
Well, even you don't have it right, because one side loudly claims to care about it (when they're not in power) and then actively works to make it worse (when they are in power).
1
A more interesting, and much shorter, column would examine the history of Republican economic thought since "Atlas Shrugged" was published. In summary, it would read: Rich white men good, should be richer.
17
@Stephen Beard YES
2
The financial crisis has not ended yet, the Fed still has all time historic low interest rates and a huge trillion dollar balance street
2
No, they're just hypocritical. And most people don't realize that the reason why there is so little inflation now, despite large money supply increases, is that the money is pooling up and just sitting there.
2
As the economy expands, money supply has to expand to accommodate growth. Krugman and Keynesians operate from the wrong mode; (Phillips Curve) that more people working creates inflation. As long as they religiously believe in this correlation that broke down long ago and has no theoretical underpinning, they will conclude mistakenly that Republicans are acting in bad faith.
P.S. Expanding money supply when output is going down (because of a burst housing bubble which Krugman advocated on these pages in 2001) does not help recover that output that should have never taken place in the first place. As far back as Adam Smith wrote about this but do not expand Krugman explain that to partisans who believe every falsehood he peddles on this page.
4
@SG
" Krugman and Keynesians operate from the wrong mode; (Phillips Curve) that more people working creates inflation."
What proof do you have that his theory his wrong and yours is right? In the era of a President who lies every day, I'm not going to take a Republican's word for anything.
22
@Charlesbalpha
If you still believe in Phillips Curve, you have not paid attention to any data since at least 1969. Inflation is not caused by people working but by government hitting printing presses (M) when there is no output (Y); MV=PY. Krugman won't tell you but what do you think drives all these bubbles (housing, commodities) when M expands and inflation metrics do not capture while a substantial part of middle class' income is spent on housing. Also, what Krugman won't tell you is that inflation is regressive taxation; i.e. it hurts the poor more and it creates more unequal distribution of wealth while the rich engage in wealth protecting measures instead of making capital available for productive investment (which, BTW, helps the poor).
6
@Charlesbalpha - If can reply for SG who has mostly the right ideas, since 2008 we have had more people working, but little inflation. This implies the Phillips Curve is just wrong.
1
Paul opines that the GOP acts in ways that will achieve its ends, one being to discredit democrats. But their main objectives are to create chaos, cripple democracy, and instal an Oligarchy of very very right wing “Christian” billionaires. Crippling the Dems is just a paving stone in their road.
10
Could this column be a suggestion that the current state of the Republican party has been headed toward the ice berg for years or is a carefully planned soft coup of our government starting a long time ago. I am not sure we want an answer to this question.
5
In 07,08 Venezuela had high growth acceptable inflation after Chavista policies were expanded. Mr Krugman used this as a vindication of Krugmans economic ideas and socialist policy. Inflation in Venezuela is now huge.. then as now we are assured inflation is no threat.
2
@Lane
But of course, you don't have any links to back up such claims, do you ... ? ;-)
Krugman isn't a socialist, he's a social-democrat. Chavez was a dictator. By definition, both have NOTHING in common, remember?
7
@Lane And only a person trying to tell lies with a couple of facts would try and draw a direct line from July '08 to over 10 years later May '19.
It's pathetic really. The ONLY people you sway are people who willingly play the con game you are playing. Anyone else knows just how stupid your assertion is.
Krugman ALWAYS makes claims in a context and makes clear there are conditions that need to be met for a theory to hold true.
You blithely throw out the context and his conditions and think you are making a valid point. The only thing you are doing is making some wonder if you work for Stephen Moore.
7
"call the Fed’s independence into question.”
The usual projection by the right wing. If we're doing it, accuse others of doing it.
13
Hey Pauli K stop throwin sad on the repubs. They just playin the game called politics. They can bob and weave and change their ways like night and day since all that matters is to win the game. Pushing a balanced budget amendment till they are in play.
3
We should be deeply suspicious of any politician who "displayed an easy comfort with titans of business, embraced unfettered international trade and praised a budget-balancing plan that would have required cuts to Social Security."
And, anyone who said it was an “oversimplification” to blame the global financial crisis of 2008 on the U.S. banking system.
Or, anyone who said that when it comes to writing effective financial regulations, “The people that know the industry better than anybody are the people who work in the industry.”
And anyone who thought that those who serve in the highest office should be allowed to continue to own (and operate?) their businesses. “There is such a bias against people who have led successful and/or complicated lives,” Mrs. Clinton said. The pressure on officials to sell or divest assets in order to serve, she added, had become “very onerous and unnecessary.”
https://www.nytimes.com/2016/10/08/us/politics/hillary-clinton-speeches-wikileaks.html
2
On top of that, they've made their voters believe that somehow it's Democrats who didn't want to pass bills that would speed up the recovery, whereas it has been the GOP that massively blocked each and every bill that would have done so, according to non partisan CBO analyses.
Under Obama, they haven't cared about making America greater for a minute. And obviously, they still don't care today. They simply take credit for the Obama economy now, and use it as a way to once again falsely attack Democrats.
The only real, decent political party today is the Democratic Party.
Some Democrats may believe that it's possible to make legislative progress faster than others, but apart from this internal "division", NO one is even THINKING about starting to massively lie to their own voters and America as a whole the way the GOP does.
17
This accurate current history of political behavior provoked a further thought that I wanted to share with you and your readers.
I believe Republican positioning on economic policy seems to be related to the strong instinct that permitted the evolution of our species. The altruistic instinct to be loyal to the group (flock of birds, school of fish, etc.) appears to be the behavioral driver in the bad faith positioning of Republicans on the economy over the economic realities and the resulting impact on the larger society.
Strangely most biologists agree loyalty to the group is a basic requirement for successful evolution of human society.
In my years of close observation of political behavior, I know of Republicans who were first elected as Democrats who changed their allegiance to the Republican party after a major social upheaval in their States prompted by the decision to integrate public schools caused them to reassess their political careers.
I am a Democrat because of the passage of Social Security which was reinforced by the passage of Medicare. The choice to ally with Democrats rather than Republicans, who called these programs socialistic, helped me decide because I thought our society would be better served with these social programs.
Now, I strongly believe that we should collectively work to confront the challenge of global warming, even though I know it will be very disruptive and I wish that my Republican friends would join the effort.
10
@james jordan
"Loyalty to the group" is also a primary driver in collective human behavior of conflict.. even wars and genocide.
it's tribal, it relies on the most primal parts of our brain, and it causes more harm and anguish then almost anything else human beings do ... because it drives the human being to set aside compassion and a willingness to listen and to protect others who feel differently then they do.
Group based factionalism is the great defect in human society.
8
@Chuck
Thanks for reading my comment, I have been closely involved in US national policy for most of my adult life and even though close, I am still astounded by the fundamental drivers of human behavior. Your comment was enlightening.
I am disappointed that we politicized the global warming threat because it made it extremely difficult to bring the economic and knowledge power to the international community. I have been reading the history of the decisioning that created the Bretton Woods talks which appears to be the framework for the how we allocate resources in the current time: The U.N., World Bank, I.M.F., etc.
I believe that if our leaders have any sense of human and World economic history they will realize that the challenge is huge and we must mobilize to create a new source of energy -- sort of like the mobilization effort made for WWII.
6
@james Jordan
"We" didn't politicize the global warming threat. The Kochs, the Mercers, and the Republican politicians they pay for did the politicizing. Once again, science, truth, and reality are on the side of the Democrats, while every Republican is a lying hypocrite.
8
"...printing money isn’t inflationary in a depressed economy."
It depends in whose hands the money ends up, Paul.
1
@hm1342
dear HM
you might really want to do a little research here
Paul, and many others have published time series data on the monetary base and inflation
I really think if you looked at the data, you would realize you are wrong
yours
2
@hm1342
"...printing money isn't inflationary in a depressed economy."
Tell that to Venezuela, Hungary, Zimbabwe, Yugoslavia, Germany and Greece. They all ended up with hyperinflations that started by printing an extra 10%.
Our form of government is so radically different than any other around the U.S. that economists utterly fail to fully appreciate the role of rational expectations on our economic outcomes. People rationally expect that an Obama will be followed by a Trump, therefore Obama's policies don't do as much damage.
Our system is always balancing.
@ezra abrams
@John Huppenthal
With quantitative easing, the money that was printed did not get into the hands of the people. It stayed at higher levels (like banks) who still held control over how much got into the economy. If, for an imaginary example, the government printed enough money to put a million dollars into the hands of every person in the U.S., I would expect inflation to happen.
2
The Fed is prepping for a flashcrash, this has nothing to do with inflation.
1
@northlander
Republicans are prepping to cause a flash crash as soon as the 2020 elections are completed... so that they can force a reset for corporations on labor costs.
Nothing like a short but sharp recession to turn a labor market from a pro worker environment to a pro corporation environment. It happens to be one of the favored methods to reset and control labor costs in this country. Corporations do not like tight labor markets as it drives their costs up.. due to competition for employees.
5
The US threw all reason to the winds when it allowed that ridiculous insertion of "under God" into the national loyalty oath recited frequently in schools and public events. It has absolved the whole political system from responsibility for anything. Whatever happens is just "God's will".
9
@Steve Bolger
Sorry.. but in my view "One Nation Under God" is completely different than "Gods Will".
One is a statement of reasoned foundation of the princple of compassion, fairness, and lawfullness, and the other is simply religion being used to scape-goat whowever is considered "them" in the ever popular human game of "us VS them".
And in reality.. the only people that should be upset about "One Nation Under God" are athiests, on belief grounds ... and frankly since an atheist does not believe in God.. why would they actually care?
1
@Chuck
We care because we don't like "creeping Christianity" perverting our government.
4
This is one good thing about having a Republican in the Oval Office. When they're not in office, they sabotage everything. And since the Democrats don't yet do this, we're better off with a Republican.
1
Wall Street is doing marvelously well. The elites are happily running the country into the ground. Regular people are financially drowning , if your a minority you are part of the 24 hr walking dead. The recession never ends for minorities since we are still treading water. First fired last hired no matter how qualified we are,
two individual who were nominated to be members of the Fed were an embarrassment for the world stage. just goes to show that intellectual qualities doesn’t matter on this new universe it’s all who you know.
Wall Street is making money off of the American people laughing all the way to the Russian and American banks,
7
@Tony
Being a minority has absolutely nothing to do with it, per se. You are presenting an obvious observable symptom as a cause.
It would be more accurate to state that the recessionary effects of the economy never end for those who are not wealthy and often live paycheck to paycheck and have little or no reserves for when things go badly.
4
Share buybacks, something that has been going on for quite some time, are helping prop up the stock market. This behaviour should be viewed as rather worrying as it is extremely short-sighted.
"The world is changed. I feel it in the water. I feel it in the earth. I smell it in the air. Much that once was is lost, for none now live who remember it... And nine, nine rings were gifted to the race of men, who, above all else, desire power."
The republicans' supreme court wears five of those rings now. The other four are in escrow with their congressional leaders. Is there any surprise that they've become wraiths whose motto, "Ask not what you can do for your country. Ask what you can do for yourself, at everyone else's expense", is the battle cry for all their "wrank" and file economists, politicians, and most ironically, voters who were, all of them, deceived.
8
When the republican party meets in secret in the basement of a D.C. steak house to plot to insure, no to vow to insure, that anything Obama tried to do must be sabotaged, thereby sabotaging each and every American, how is that not at least sedition? Or treason?
When Mitch McConnell, ranking republican in the Senate, says on Nation TV that their goal was to make Obama a one term president, how is that not sedition? Or treason?
republicans have not believed in democracy or America for at least 50 years.
Forty years after the New Deal America was humming right along.
Forty years after Reagan and we can't fill our potholes.
t rump's party must be voted onto the ash heap of history next year or we won't have a Nation.
8
would that it were so simple.
2
@Bob Laughlin
Maybe we could let those red states secede from the union. I would help build the wall to keep them out -- no, I mean to protect them from all those liberals lurking about.
Interest rates should not be lowered. We are storing up problems for the future, much as the Bush tax cuts of the early 2000s did.
I would be interested to hear from Professor Krugman on why inflation is not increasing now, with a hot economy and low interest rates.
5
@CarpeDiem64
a brief glance at a people like @delong, Justin Wolfers, Larry Mishel, etcc will tell you that the lack of inflation is a huge puzzle among leftish economists
think of the economy like a balloon. squeeze one part, another swells out. there is not much inflation in the consumer sector because it is still hurting for money, not in the position of having too much chasing too little. but in the high end art market, the securities market, and in upscale real estate, prices swell to astronomical heights, because that's where most of the money, and almost all the surplus beyond maintenance rates, is concentrated.
6
@Pottree There may be something in that. I don't think it is the whole answer, but thanks.
1
Couldn't it be argued that the Fed's recently increasing interest rates is part of the recent growth and lower unemployment?
I think interest rates should continue to increase. 1. The Fed needs leverage in the event of a downturn. 2. People need a decent return on savings; especially the retired. 3. More savings means banks have more money to loan. 4. Reasonable rates leads to better decisions about using borrowed money.
4
@Patrick Hunter
Interest rates are simply the most effective and powerful tool that central banks have to keep an economy in the desired "green zone". They don't want inflation too high or employment too low... and since almost everything in the economy depends in some fashion on borrowed money... interest rate setting is the most effective faucet to adjust.
Now... very high inflation can and will drive very high interest rates... successfully, or not, depends ... Like we had back in the 70s. Personally, I don't ever want to see the central bank take it's hands off the faucet and allow inflation to ever get started in that sort of extreme direction again.
1
@Patrick Hunter - I put rising rates down to the Fed trying to buy itself some wiggle room to react in the next recession.
Listen to CNBC's Rick Santelli and others on the right oppose the actual policies of central banks it is because they think a depression is good for us all. They want the benefits of a cleansing depression regardless what that does to most people or the democratic governments of various nations.
6
@Daniel A. Greenbaum
Pretty much true in my view. Though I don't think they want an actual depression... just a nice painful, yet short lived recession. It keeps those who work for a living every day and are not wealthy --> under the thumb of the wealthy. Same goes for debt and policies that encourage it.
3
@Daniel A. Greenbaum - The Republican formula is clearly pro-cyclical - cut taxes for rich people when times are good, and brutualize the poor with spending cuts when times are lean.
1
And I still remember when Paul Gigot from the WSJ proclaimed on This Week that after Californians voted to increase our taxes that businesses would flee the state and bankruptcy was on the horizon. Well that certainly was wrong. It’s not that the tax increase solved all our problems but businesses have grown and we have had surpluses for the last few years! Amazing when I read recently that he is the editorial page editor for the WSJ. Seems there continue to be folks who are rewarded for being wrong.
17
Dealing in bad faith is too kind a compliment for the Grand Old Phonies.
The Republican Party is an industrial Grand Old Propaganda assembly line that deals in complete dastardly deception, completely comfortable to lie through their teeth for the sake of creating and sustaining a winner-take-all 0.1% vulture capitalist society by soaking their rapacious greed in the delicious battered country fried dough of faux religion, 'conservatism', gun anarchy, and the American heartland's steadfast authoritarian conviction that "my ignorance is just as good as your knowledge".
And when all of their 'fear and loathing' campaigns fail to deliver a winning GOP margin, there' always the corrupt Republican gerrymander, widespread Jim Crow voter suppression laws, black box vote counting, voter file purges, rigged Republican Supreme Courts, the red-religious-regressive stacked Senate, the slave-era Electoral College and 0.1% campaign finance bribery laws to bring home the electoral bacon.
Republicans can't stand democracy, representative government or the will of the people... they can't stand America.
Republicans aren't just economically bankrupt, they're morally and intellectually bankrupt.
What they are good at is creating an oligarchic anti-democratic state...similar in many ways to the Russian oligarchic anti-democratic state.
Decent Americans don't Republican...and those who do align themselves with the same brand of authoritarianism that Vladimir Putin champions.
Nice GOPeople.
87
The problem is America's abject addiction to magical thinking. Whether it be racism, religion, guns or 'Trump is good for the economy' Americans are just not into critical thinking. It's public education system has been gutted, healthcare has become predatory and cave dwellers are running the show wherever you look, but that's just normal.
The GOP plays this fact like a pipe organ. In the face of such primitivism and regression, the coming election will resemble Charlottesville, the villagers chasing people up the hill torches lit, screaming JuJu curses.
22
@Angstrom Unit
Not magical thinking... fantasy thinking. :)
They love to peddle fantasy and fiction as fact.
2
@Angstrom Unit
nothing like Europeans with their holier then thou attitude
tell me how is immigration and atonement for the congo going ?
In the Trump administration, being an utterly loathsome individual seems to be a strong qualification for high office, not an impediment. After all, Donald Trump is president.
What we have here is standard playbook practice for the Republican Party. The Party would much prefer to explode the national economy to smithereens rather than have it succeed under any leadership carrying the "D" label.
This is the same Party that would rather have the Narionette Master, Vladimir Putin, pulling the puppet strings in Washington DC then to have the Democratic Party running the show.
19
It must be comforting to have a blissfully ignorant audience of sycophants that hang on this fakir's every utterance. Alas, they are as famously misled as Rudolph Hess with about as much chance at success as his mission had.
5
I know this is true. What baffles me is how such a large group of people can be so insincere and unprincipled. Don't they understand the need for ideas to be rooted in the truth?
Then again the research in the social sciences has shown that politics makes people stupid. I read one study that shows it even makes people worse at math. But why is it happening to the right so much more than the left? Maybe because the right cares more about winning elections than holding correct ideas, and the left cares more about the correctness of the ideas than winning elections.
Unfortunately, the people who care about winning elections more than holding accurate ideas rooted in reality and truth are better at winning elections.
We can't let these idiots win again.
12
@Matt Mullen
"Don't they understand the need for ideas to be rooted in the truth?"
Not when it interferes with 'winning'. They've forgotten that the whole point of democracy is to allow for winning and losing on the merits of an argument that never ends, to play again on another day. Not to win once, destroy your enemy, and rule forever regardless of any merit to any argument.
7
Well yes, you're right & that's why Obama & Biden were using their bully pulpits to point out Republican hypocracy every day. Never happened, right? It would have been so conflictual - better to pursue some failed notion of bipartisanshipiness. The problem was not just with the Republicans - if you don't push back you're gonna get pushed & it happened.
8
What a deceptive and hypocritical bunch is the republican party, ignorant by choice and 'a la Trump', most prominent when Obama was the president, aclear sign that racism remains 'alive and well', and white nationalism a clear and present danger to such a diverse society as these United States. A healthy exchange of arrogance with humility seems in order, so that tolerance and solidarity become a common value in this, by now, devalued democracy.
5
I have the same reaction of disgust when republicans appear on my TV screen.
By now we should all understand, their only goal and focus is to destroy and suffocate the democracy that people spilled their blood to preserve.
I have no excuse for anyone who votes for this abhorrent sold out party.
8
yep' all they did is get in the way the whole time but remember
they have what's called a selective memory and have never been wrong along with liar in chief and his AG who has no memory at all at times.
1
Only blindly biased Paul Krugman would pick this time to criticize Republicans on economics. Last I checked, the market is setting record highs, unemployment is setting record lows, and there recently was a higher than expected quarterly GDP, despite the government shutdown. But, by all means, let’s talk about what people were saying in 2009. Krugman has no credibility, and is hardly an asset to your already one-sided non-ideologically diverse Republican-hating editorial pages.
4
@Richard I suggest that Krugman is not the one who is 'blindly biased".
5
@Richard brilliant insight. All the trends you mentioned started when Obama was president and have simply continued. trump has done NOTHING. I know, the truth is hard to handle, right?
6
The economy today is just part of our boom & bust cycle that will have to be cleaned up after Trump is out of the picture. It will not provide a good future for all Americans.
6
Sometimes one word says all that needs to be said, and "sabotage" is the one word that captures the essence of the current Republicans in Congress. Another word applicable is "spineless."
9
Let's look a some history on the debt.
After WWI, we had 10 years of balanced budgets. Here are the debt figures:
07/01/1920 $25,952,456,406.16
06/30/1930 $16,185,309,831.43
In 1929, the debt was only 16% of GDP
AND THEN WHAT HAPPENED !?
BTW History shows us that every time we embraced austerity and balanced the budget for a while, we got a depression and every major depression followed a period of surpluses. This happened 6 times
After WWII we had even more debt as a percent of GDP, but we had mostly deficits for 27 years,
Here are the debt figures:
06/28/1946 $269,422,099,173.26
06/30/1973 $458,141,605,312.09
As you can see, the debt almost doubled, but we got the interstate highway system, Medicare. a median real household income that was 74% larger, and GDP growth averaged 3.8%.
BTW the public debt was 109% of GDP in 1946 and the gross debt was 121%. Those figures are about 77% and 100% today.
Please explain why we ever have to pay off or even pay down the debt. Debt service is running less than 1% of GDP, the lowest in about 60 years.
When did we pay off the debt from WWII? When did too much debt EVER negatively impact the economy? Many times (e.g. 1929) too little debt sure did.
The definition of insanity is doing the same thing over and over and expecting a different result.
http://www.whitehouse.gov/omb/budget/Historicals
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo3.htm
8
How’d that collapse thingy work out, Paul?
4
How is your call on the Trump stock market?
2
It almost seems that a requirement to become a Republican is to be a spinous ignorant in economic theory.; ant the second requirement is to go through life without learning of your errors.
It is very difficult tome to understand how that tribe of ignoramuses can survive in the XXI century.
3
Economic hypocrisy is just one important example of the systemic Republican mantra - lies, lies and more lies until it sounds like truth to enough people to vote for you.
For 4 decades Republicans have been lying about their true policy objectives - take all the economic goodies and hand it to the wealthy elite who in turn will give the Rs the money to get elected so they write more economic rules giving handouts to the corporate and wealthy elite. Where have all the economic benefits gone over the last 30-40 years? One guess. Major corporate CEO pay has gone from 30 times their average workers' pay to over 300 times just in the last 40 years. Abigail Disney (Disney heir) pointed out last week, Robert Iger's $65mm compensation in 2018 is insane (current CEO of Disney). That is 1424 times the average Disney worker's pay. So - Republicans have been lying to America for decades and trump is simply the most egregious of them all - unyielding lying and corruption. Though certainly imperfect, the Dems actually care about the middle class and those left out in America. The R's just don't care about anyone but their paymasters and themselves. This is a huge difference and I am amazed that so many of my fellow Americans just don't get this. Sorry - ignorance is not blissful. It's just ignorance. It's stupid!!
8
When is Krugman going to quote himself, he could pick any column, and say "of course that was totally wrong"?
Grasping at straws. I can just picture him scratching his head yesterday and wondering how to spin this.
4
The party of NO - Never Obama.
2
The GOP is The Party of Fraud.
For forty years, they’ve been crying fraud and crime by everyone else, while secretly (they fallaciously think) committing the greatest acts of fraud, embezzling, pure theft and actual treason in the history of our country. At the city, state and federal levels, the story is the same.
This is why when Biden claims all we have to do is get rid of Trump and we’ll be in Happy Land again, he’s completely delusional, and should be instantly counted out as a candidate for the US Presidency.
Biden will just waste more time we don’t have trying to convince a blind and stupid wall to be an octopus.
Meanwhile, the planet will continue to burn up.
4
It's a new twist on a practice as old as tapeworms: bleed the host. However, most parasites realize that you don't kill the host.
Sadly, Trump, the "conservative" GOP, and their corporate and foreign sponsors, are dumber than tapeworms.
The last time this happened in my memory was during the German occupation of areas they conquered in World War II. The local collaborators they "shopped" prior to invasion did just fine--see the high life lived by Quisling, Pétain, and Laval--until their countries were liberated.
It's up to the voters to see through this charade here.
4
While Republican voters watch the rabbit, Republican leaders are busy rigging the box office.
1
Yup.
I mean, what else is there to say?
1
Typo in this article:
...G.O.P. deficit posturing was hypocritical – obvious, that it, to everyone except the entire Beltway establishment.
1
Their ideology is simple:
Obtain political power for your rich sponsors, at all costs to the people, the economy, democracy, individual freedoms, intelligence and law enforcement agencies, national security... and their own reputation.
9
This is bordering on the treasonous. Not only do Republians wish bad things will happen during a Democratic Presidency, but they also take active measures to effectively hurt America and the American people, in the hope that the Predident will be blamed. An alliance between Republicans and Russia was destined to happen...
11
The Republicans sabotage our economy and governmental traditions, the Democrats do all they can to sabotage traditional morality and traditional American culture and way of life. Pick your poison. Different people will make different choices based on their values and I respect that.
@JackC5 Republicans successfully destroyed "traditional morality" etc and at the same time fooled millions of Americans into blaming the Democrats for it.
Republican hypocrisy aside, the graph shows the employment rate rising steady since 2012. Trump hasn’t done a thing for the economy.
4
@Doug Lowenthal
Of course, you give Obama credit, and he accepts credit for anything good that has happened since he left office.
If that is true, why did Obama say that we needed to accept 1.5% GDP growth as the new normal?
How long did it take to build that little fantasy world you're living in?
2
Ayn Rand, Ryan's hero, wrote of creating a Nirvana in the mountains by creating a dystopia that brings down the U.S.A. and the world. Citizens starve in the streets, but in Nirvana gold is king. Ryan was seen as a sensible Republican. (For an example of s senseless one, see Trump.) People who put their walled-off compounds in the mountains ahead of the needs of their (our) country, our security, and our people are not heroes. They are greedy traitors.
11
Agreed, Republicans are indeed practitioners of hypocrisy run amok. To add insult to injury their penchant for nominating such unworthy people to manage the countries offers just adds to their inability to lead this country in a manner befitting one deserving the power. Trump actually mentioned his daughter as a possible president of the World Bank simply because..."she's good with numbers". I can only hope 2020 Democrats will aptly use this very pertinent set of facts that convey Republicans cannot be trusted to govern for the benefit of this country - but only for themselves.
3
you mean, gasp, ryan wasn't a serious policy wonk1?
and the republicans are power hungry--and nothing else!?
birds are dropping out of the sky as i look out my window.
4
At one time there were responsible Republicans, but they always seemed to be undercut by their more irresponsible colleagues for personal gain and power.
As seen in the editorial by James Comey May 1, 2019, Dishonest Donald has usurped the party and created a core of sycophants, concerned only with increasing their bank accounts at the expense of the public. Reading about them, we call it "Profiles in Cowardice," all of them, some of the most despicable government employees of all time.
A collection of hypocrites, constantly contradicting them selves, then saying they did not. Even the AG lies to protect tRump, he has abdicated his place as the peoples attorney, and has become the presidents protector, protecting him for public scrutiny. Previous government corruption looks small time when compare to these people, fortunately for them, when they are kicked out of office they do not have to face the same fate as those French whom they are very much like.
They have no shame, they will be pilloried in history, but escape the real pillory, too bad, they need to be held up to public shame.
4
When did the Republican party become the party of evil, the day Reagan sold their souls to the corporate oligarchs and bankers culminating in trump and his tax cuts for the wealthy and big corporations. Well they have drained that well and filled the swamp, what's next?
6
Republicans aren't total hypocrites, they just have to win whatever the cost may be to others. Every time Republicans get into power, they roll back regulations on doing business. In fact, if it weren't for Republicans need to win whatever the cost may be to others, there'd be no need at all for regulations on doing business; the golden rule alone would suffice.
4
It isn’t just “conservative” politicians. “Conservative” business leaders also pout and retract to punish “liberals”, even at the expense of the country as a whole.
4
Once again, thank you Paul Krugman for refusing to give up on pointing out the hypocrisy and trickery of the Republican Party for the sake of themselves as opposed to the good of our country. I’ll add their obvious insulting and condescending expectation that no one will notice what they are doing. Despicable.
5
It was obvious that Troll Krugman would be coming out with an economic oriented Opinion piece day after all his economic doomsday predictions went up in smoke last week. 3.2 GDP growth with record (best in 50 years) employment and wage growth underway. All with little if any inflation. This political hack has been been saying the sky was falling for the last three years and it’s so gratifying to see concrete evidence of his foolishness.
2
It is actually worse that Paul Krugman indicates.
What the Republicans wanted during Obama was a continuation of the recession that was set off during the time of G.W. Bush. They wouldn't even minded another Great Depression in which everything wrong could then be blamed on the Democrats...those overspending liberals!...and all social programs could be whacked down to minimum size. Once food stamps, Medicaid and Social Security were taken off the threat board of worrying billionaires, some money could be put back in by Republicans to right the ship (but not before thousands had died from suicide, untreated diseases and, yes, sheer hunger). I never imagined my fellow citizens would be capable of such cruelty but they've convinced me they are, indeed.
Paul Ryan truly believed in the Ayn Randian nonsense: the poor deserve the rough justice handed to them by the enterprise capitalist system because, you see, it will shock them to get up off their hospital beds and go to work as a greeter at Walmart. The Republicans would get their dreams fulfilled: the public, stuck in a depression, would be ready and willing to accept whatever prescription offered.
This kind of political strategy is thoroughly unpatriotic and, to a degree, evil, but so what? It fits out of the playbook of Newt Gingrich politics: create a huge mess and then announce you are the only person capable of cleaning it up. The table was set by Gingrich, Ryan and McConnell but the feast was gobbled down by Trump.
10
"What all this tells us is that Republican positioning on economic policy has been in bad faith all these years."
To fix this statement, just remove the words "positioning on economic". Then you'll have a more accuratedescription of that retrograde, denialist "party".
2
This is a great column--I agree with every word about Republican irresponsibility and hypocrisy--but I've already read the same one roughly 30 times. There seem to be some default subjects Krugman goes to when there's not something new to say come deadline time. Maybe the Times could find some other voices from the left and put them into the mix?
2
Summarizing your summary; YUP!
It's the insane Republicans revolting. They are so dangerous they want another civil war. Trump is the epitomy of their insanity, specially aided by the party to be the puppet and signer.
Even with my very primitive individual budget economy knowledge knows you have to lower interest rates during slow growth to encourage borrowing to grow the economy.
The idea of raising interest rates during low growth was obviously a simplistic way of enriching lenders whose lending demand was curtailed by the slow economy. It was simply meant to increase lenders profits in lean lending times. It was simply favoring lenders predatory practices.
What's the difference between the Republicans and a criminal organization? Anybody?
2
"Republican economists" -- isn't that an oxymoron since economics supposed to be science, not a political strategy?
The next time anyone tells you they vote for the R's because they want to grow the economy, here's a useful link that shows how the economy actually does better under Democratic presidents. You'll gobsmack those pesky kinfolk that just don't get it because they've been brainwashed to think the opposite.
https://www.jec.senate.gov/public/_cache/files/309cc8e1-b971-45c6-ab52-29ffb1da9bf5/jec-fact-sheet---the-economy-under-democratic-vs.-republican-presidents-june-2016.pdf
1
It looks like we now have to add GOP politicians and economists to the old old running joke. What happens when a snake, a GOP Politician, GOP economist and a lawyer cross a road and you are unable to stop?
Avoid and save the snake...
Cain, who was named for the same position, was also rejected for being a loathsome person rather than for being horrible in economics.
But in both cases, being loathsome in itself was not even the real reason a few (only four) Republican Senators rejected them. It was because the loathsomeness would impose a price on those Republican Senators. Do you doubt it? Have you ever heard of a guy named Trump?
1
The prevailing hypocrites have little problem with being caught in their own fabrications it doesn't matter, as long as the trend favors their own well being and disadvantages the least fortunate, nothing else matters. The needs of the nation are other peoples problem.
"a desire to sabotage Barack Obama." The total Republican policy without any regard of the impact on Americans' lives! The walking dead of Reaganism myth continues to the present but now even further diseased with the Trump/Republican massive tax cut to the 1%. Perhaps we have crossed the point of no return!
3
Conservatives believed in and preached Social Darwinism, in the late nineteenth and early twentieth centuries. It meant, in its simplest terms, that only the strong and or the smart deserve to survive. Meaning that starvation wages and abject poverty were the due of all those minions of poor, weak, stupid undeserving, sub humans, who littered the countryside. When Darwin became unpopular, with millions of anti intellectual Christians, many of whom were the same poor undeserving souls, and with the rise of Marxism, Conservatives found a new way to fashion their philosophy around the horrors of Socialism. But, through it all, over the course of more than a century, has been the simple, stark belief among Conservatives, that the weak deserve their fate. That is why healthcare, or health, for that matter is not something deserved by all Americans, why any form of help for the poor, or even the middle class, is creeping Socialism. What the great majority of Republicans in power believed then and now, with their every breath, is that only the strong deserve to survive.
7
Are you saying that Trump and his cabal of Republican economists and political leaders like former House Speaker Ryan and current vice-president Pence were and, indeed, are hypocrits? What’s wrong with a little hypocrisy in our civic discourse and setting economic policy? Don’t we want, relish, and applaud those political leaders who talk out of both sides of their mouth? Don’t we in America want to be conned and misled? Well, maybe, and on further analysis, being hypocritical ain’t so healthy or desirable.
1
Paul krugman got a bad case Trump deranged syndrome and can’t get over 2016 but this column title is misleading , the congress and the fed did bail out everybody and the few republicans fiscal conservatives lost the argument.
The economy did start recovering and if president Obama failed to convince the American Public and companies it’s his failing , Teump took the bull by the horn and when the fed tried raising interest rates he publicly shamed them and threatened to start firing people , that’s what commander in chiefs do .
Obama was unable to get the GOP to go along with any plan to seriously increase federal spending on anything other than military spending and the anemic one-time infrastructure program. The GOP was confused by the economic hocus pocus that bailed out the big banks and auto companies and since the money went to giant corporations, they couldn't work up much indignance over those programs. They were enthused about 'balancing the budget' by cutting programs for the poor, the elderly, education, and science.... which Obama treated as 'compromises'.
3
I followed the link to the open letter to Ben Bernake. Was there anything else submitted with this letter? There is not anything in it other than some people they think differently. No supporting evidence.
All of the GOP's faux-theorizing and temporizing is chaff for one fact: these supplysiders and egregiously irresponsible tax cutters are shills for the big rich, their patrons. And it's not just about money, at all. To paraphrase Oscar Wilde, "Everything in the world is about money, except money. Money is about power."
Atlas Shrugged, indeed. This IS a TV show. And not a reality one.
1
Hey Prof. Krugman. It's fine exposing Republican charlatanism to a few thousand members of the chattering classes in your columns in the New York Times. But you clearly care about this stuff and if you want to make a difference you should be getting your message out on the popular TV shows like Colbert and Ellen! (OK, I just checked and saw you did Colbert. That's the right idea, but you might want to try not doing it on a roller coaster next time! https://www.youtube.com/watch?v=ir7lwqnPlrg)
GOP lying and hypocrisy has been swallowed and even encouraged by a large percentage of the population. This group wallows in resentment and jealousy. They think they are getting away with it with good economic news, but when something is too good to be true it usually is. A fire storm is coming and the GOP will be purged with fire, while everyone else will be purged for letting it happen. We will all burn.
1
When is Krugman going to look back at the columns he has written over the last two (or more) years and pen his trademark "of course, all those warning were totally wrong"?
@Daphne Unfortunately, he'll never have to.
The Modern Republican Party is revealing itself:
Global Plutocratic
Morally Expedient
Unpatriotic
3
GOP since 1980, adjusted its ideology, policies and programs to suit the belief systems (or the lack thereof) of their current President. The only constant theme which binds the party is the ‘transfer of wealth upwards’ --- thru ‘regressive taxation’ and cutting ‘middleclass Entitlements’. They were all decent men; when occasionally the underlings employ “dog whistles”, the leaders miss it in the hurry burry of elections but regret it for the rest of their lives!
Trump is different! With him at the helm, “all that is solid melts and all that is sacred is profaned”! He made the subtle ‘dog whistles’ the clarion calls! Most Republicans keep their distance from their President except when the time comes for Tax Cuts! Those who are close to him, beware, don’t take prisoners! But their half-time in WH is short”!
Republicans: bad
Democrats: good
We get it Paul.
3
Republicans have a one horse economic idea, lower taxes on their wealthy donors. Let us reviewu; Obama inherits the worst Republican economic dislocation, the Republican Great Recession since their Great Depression. Obama engineers a recovery putting the collapsed housing, auto, and financial sectors and the nation back on their feet. Republican Mitch's contribution to our recovery "just say no, we'll make him a one term President. Now the proven world champion serial liar, who knows nothing and understands less about economics wants to claim credit for Obama's continuing recovery. Check the gold standard economic indicators from the U S Bureau of Labor Statistics. The graph lines are following the exact Obama recovery path. But my god Republicans have had to increase the national debt over $2 trillion in deficit spending to keep up the Obama pace.
https://www.bls.gov/web/empsit/cps_charts.pdf
Trump and Republicans contribution to our recovery, over $2 trillion of new debt created by giving the wealthy there massive tax breaks for average Joe, Jane, and their children to pay repay. The same with Reagan's 186% debit increase or Jr. Bush's 101% debt increase with the kicker collapsing the economy. What happened to trick me once?
3
If any regular citizen did any of the things the Reeps did they would be in prison. More and more I see our so called leaders commit felony after felony with zero consequences and this has been going on wholesale as soon as W took office. The Reeps hate America and Americans they only love more money at any cost.
I have zero faith in the numbers coming out of the Commerce Department and the Labor Department - 3.2% GSP and 263,000 jobs created in April, etc.
Remember when Jack Welch questioned the economic numbers coming out of the Obama administration? Well, that's where I am now.
Why would - or should - we trust Wilbur Ross or Alex Acosta? Both are known to be dishonest and subject to corruption.
Look at the numbers coming out of HHS and DHS regarding migrants on the southern border - they've been proven to be lies because of focused investigative reporting and lawsuits by the ACLU.
How about the numbers on civilian deaths in Syria and Yemen from the Pentagon? More proven lies.
Economists and financial reporters with skill and sleuth must investigate.
2
Uh, how do you think they got rich in the first place?
1
OK, Paul, we get it.
We promise not to remind too many people that you forecast the utter collapse of the U.S. economy when this amazing Economy President won his election.
The DJIA was around 18,000 at that time. No WONDER all the retired worker's 401-k's and IRAs are doing so robustly well.
Today's only surprise: that Dr. K mentions Spymaster-in-Chief Barack Hussein O, originator of the domestic spying effort that morphed into an active coup d'etat against the leader of the free world.
Lead on, Democrat progressives. (not)
For reassurances that there was NOTHING wrong with deficit spending that boosted the national debt, I refer all readers to ANY Krugman writings or interviews during the glory days of the Obama administration.
1
Dr. Krugman, can you please give us a first-pass answer to when the markets will recover? https://www.nytimes.com/interactive/projects/cp/opinion/election-night-2016/paul-krugman-the-economic-fallout
1
Yes, of course. But how do we make this clear to the average voter? It matters not how well Krugman explains Republican hypocrisy and double-dealing here in the NYT. The MAGA hat crowd will never know what economic perfidy their preferred party engages in, and that’s the real problem.
2
With all due respect, thanks, Capt. Obvious.
Not just the GOP that drank the Kool-Aid. I seem to recall Schumer and Pelosi saying, very recently, that a 2 TRILLION infrastructure plan should be financed on a pay-as-you-go basis. I guess we’re all Pete Peterson now.
It is a sad commentary that Republican economic policy is not tied to what they believe is the best economic policy for the country but instead only what benefits them politically.
This is a good argument against constraining the Federal Reserve and giving more power to Congress in setting economic policy.
1
I take your point, Michael oh, but do you really want to put more economic policy making power in the hands of the Congress that we have had over the past several years?
Both regular editorial writers for the New York Times and many of the commenters agree that Trump and the Republican party are destroying America. Evidently a majority of Americans believe that Trump and the Republican party are destroying our nation. But nothing gets done.
We have an "embarrass de richesse" of Democratic candidates for President, which may be such a distraction that we quibble over nominating one of the many excellent choices. Somehow, we need to get our act together to fight for the Constitution, for decency and for ethics by focusing on ridding the White House of Trump and his polluted sycophants!
30
@Elizabeth Bennett
You may see the Democratic race as "quibbling over nominating one of the many excellent choices." I see, so far anyway, only two candidates who will be loyal to us - the regular people - who don't own most of the wealth.
3
Sabotage, duplicity, insincerity and hypocrisy can all be applied to Republican economic policy, but more so, to Republican policies generally. There has long been a GOP shell game, a three-card Monte sort of exercise that has sought to create an image of universal opportunity, on the one hand, while controlling the board with deceptive intent, on the other.
It's nothing new. Then players may have changed, but the duplicitous practices haven't.
It is has become clear that a rising tide does not, in fact, raise all ships. The GOP, while long arguing that it does, never actually intended that it do so. It is for the mega-yacht, and not the bass boat owners that the Republican Party governs, its protestations to the contrary notwithstanding.
Why those left behind still believe that the GOP cares about the little guy is beyond me, but if Diogenes are looking for an honest man, he should not be knocking at the Republican door.
8
I have to say as someone who has always had Republican friends that I find myself in a state of shock at the bad faith being exhibited across the board within that party. To their credit, if any of the Republicans I know aren't shocked as well, they certainly aren't sharing that with me. In fact, the arguments we've had in the past have now become nostalgic memories as we share our mutual horror at this odious administration and the quislings who are enabling it.
For a party that prided itself on fiscal continence, mythical in my view, but legitimate if one bought into their ideology, law and order and values, family and otherwise, they have now abandoned any pretense of commitment to anything but short term profit and power mongering to such a degree as to resemble an amorphous, predatory collection of insatiable beasts.
Our democracy is under assault from without and within.
6
It doesn't shock me that the tea party republicans have done a complete 180 regarding deficit spending and interest rates. Standard politics as usual. Imagine clean shaven Ted Cruz as principled deficit hawk, newly bearded Ted Cruz as Kenyesian economic crusader. He isn't the first pol to flip flop so completely. What is so galling is that if the Democrats take back the White House the beard will be gone. The tea party rhetoric will return. And if anyone ask's Ted about the Keynesian beard he will say "What beard, I never had a beard." Show him a picture of the beard and he will say "fake news". And even more shocking is his supporters will buy into the lie. The Trump brand of politics is here to stay.
5
If the expansion ends, or worse, reverses itself anytime before Nov. 2020, you can bet Trump will put all, and I mean all, of his efforts into squeezing unwise, short-term help from the Fed.
It will be a nasty war, as the Fed fights to remain independent.
Trump has made it clear he knows the stakes: A president (especially an unpopular one) cannot be re-elected during a sour economy.
And a historically terrible president has a better chance of re-election during a growing economy.
1
Something has to be said about the poor management of the economy by Republicans, always. The Republicans are like children in school who learn a little about a subject and then think they know everything. Deregulation is their mantra. Their universal fix for everything. They like driving fast with no breaks. They like playing chicken. When they fly off the road in midair they blame any reason they could dream up for the pending disaster. No wonder Warren Buffet is a life long Democrat.
3
The sinister cost of Trump's presidency is the debasement of federal office.
Trump's appointments, from the supreme court, to lower level judges and now Barr and the recurring attempts to dictate Fed policy by appointing forth rate economists, but loyal presidential supporters.
I fear for the very foundations of our country, especially if Trump succeedes in 2020.
Comy was profound when he said that "Trump eats your soul in small bites", given four more years, Trump will eat the soul of the country.
3
I’m going to keep writing this until a majority of Americans recognize it as fact: The current Republican Party is the greatest enemy of democracy that the United States has had to face since Southern Democrats engineered the secession of the states that would form the Confederacy. We are in real trouble.
9
When I was growing up the prominent bumper sticker was: “Love It or Leave It.” If you didn’t support the war effort you didn’t love the country and therefore should leave. Protesting the war was totally unacceptable. Republicans and conservatives were clearly those who “loved” America and fully supported the war.
If we brought back that sticker today it is clear that Republicans do not love the men / women of our country. If they loved the people -all the people - of our nation they would want health care for all, they would not stymie recovery just because the president is not of their party, they would support gun legislation,, they would ........ The hard hearted Republicans support giving more wealth to the already wealthy rather than seeking ways to strengthen the people of this country. Greed is more important than the needs of the majority of Americans. I would like to respect conservative views, but not at the expense of so many. It is way beyond time for most Republicans to “leave: this country or call for policies that benefit more rather than fewer people.
2
Your way too kind Paul. Republican behavior circa 2008 was well beyond simple “bad faith”. They were willing to risk the entire economic system to sink Obama. We were on the precipitous, and it didn’t matter...politics trumped all else. I watched it and have never forgotten it...which is a major reason why I wouldn’t vote for ANY Republican EVER. It’s no longer a political party, it’s a gang.
6
Even the theory that low rates cause inflation is self-contradictory, like most GOP articles of faith. It's even ignorant from their own perspective - Cheap money for the big end of town means the big end makes more money, and they didn't get it.
Real inflation happens in assets and accessibility, and while worrying about inflation, some GOP saints were simultaneously screaming "Deflation will kill us all!", with asset prices all over the place. Meanwhile they managed to almost ignore the subprimes, the middle class Apocalypse, and every other indicator of real economic issues, while focusing on their brand of redneck, regressive politics.
It's like they're brainwashed, and it's getting worse.
2
Krugman should explain more about the 3.6% unemployment rate--the lowest in a long time. It's being spotlighted all over the media with Trump and Friends taking credit for this milestone.
Why doesn't economist Krugman devote his column to putting this in context, explaining cause and effect, why it's so low, what it means--for the millions of us non economists who will be voting in 2020. What could be a bigger deal in our politics now?
Easy to bash the 'loathsome' Steven Moore and his crazy ideas.
Republicans are a party of malcontents just as they were when they formed in 1854 resulting in the American Civil War. It's a function of gravitational forces attracting the heaviest of anger and hatred. From obvious bigotry in Obama's time to inventing foes in others, the Republicans are simply an unfortunate reality of nature we should simply adapt to and minimize their negative impacts on society. They are financial predators like any Mafia. Their goals are only of enrichment in the moment as they desire the old robber baron days as we eternally correct the harm they do in the endless political cycle of power. The Republicans prey on everyone and we support everyone.
2
Republican politicians and "economists" want monetary policies that are helpful to Republican presidents but, even more than that, they want monetary policies that are helpful towards the rich. If those policies will benefit the rest of us, fine and dandy. If not, perhaps they'll agree to cut taxes just enough so that blue-collar workers will feel as though they're getting something out of this, too. And then they'll be persuaded to blame the poor, the aged, the handicapped, the "illegals" and, ultimately, all immigrants for the taxes that they're still forced to pay. Shameful.
comment submitted 5/4 at 2:48 PM
2
lying and corruption are the hallmark of the modern (post Eisenhower) Republican philosophy and governance. Unfortunately, they have been highly successful by using fear lies to steal and win election.
2
Written by a Nobel prize winner, one would ordinarily assign significant gravitas to an article like this.
However,
Every
Single
Prediction
You
Have
Made
about the impact of Trump's policies on the economy
Have
Been
Wrong.
And
Measurably
So
So why should we listen to you any more ?
2
I never believed that Republicans cared about deficits. Their post-2008 behavior was clearly designed to help Obama fail so they could run against him on a bad economy.
The Republican Party believes in one thing only: lowering taxes. Whatever justification they give doesn’t have to make sense. Their voters are either too clueless to know or too cynical to care.
The problem for Democrats is that there are many who agree with or are susceptible to these cartoon deficit arguments. They now have Joe Biden, who still seems to believe that Republicans are honest, but just got hijacked by Trump. Actually, Trump is the embodiment of the Republican political philosophy.
3
"And now, in economic news, Republicans once again adopt the most expedient point of view that currently dovetails with their agenda of justifying their own greed."
The correspondents can just read this sentence every day, and save on writers' salaries. (Not that Republicans would be fond of paying for writers. anyway.)
1
"Republican positioning on economic policy has been in bad faith all these years. They didn’t really believe that a debt crisis and hyperinflation were looming. They were just against anything that might help the economy while a Democrat was president."
Uh, yeah. Didn't Mitch McConnell say that, right out loud, when he announced that his number one priority as majority leader was to make certain that Barack Obama served only one term?
Republican hypocrisy is hardly worth mentioning, much less writing about. I'd rather be educated about why people seem to think the economy is doing so well, when from where I sit all I see is a stagnant working class struggling to tread water while all the wealth rises to the top. That just doesn't look to me like an economy that is doing well
2
Paul Krugman, you are always wrong, including your dire prediction the the economy would collapse under Trump.
But instead of admitting this and showing a modicum of contrition, you spend this entire article saying how totally wrong everyone (Republicans) are. So rich.
3
While Republican efforts to sabotage the economy seem to be episodic (usually corresponding to when the White House is controlled by Democrats) one thing is always prominent and clear: Republican hypocrisy has not season, it is always, always present.
Remember how Trump is so concerned with enacting this campaign promises, recall he's so serious he shut down the government for more than a month... Recall also, then, that Trump promised to "balance the budget fairly quickly" and also promised to erase the entire national debt. Well, that's not happening, as is obvious to everyone. Trump curiously, doesn't mention it any more. I wonder why that is... hypocrisy? Delusion? Or just his usual pervasive deceit?
1
All they care about is power. The good of the country is not a factor. Vote them out.
2
The chart says it all.
Trump’s campaign-rally-style events, which occur on a regular basis (um, even when there’s no evident ongoing election campaign—Your Tax Dollars at Work, folks), are a pretty clear indication that his base don’t do graphs, Paul. Or statistics. Or data in general. Or reality, if you want the truth.
THAT is why someone like Biden will be a death sentence for Dems if he’s the candidate in 2020. I’m a left-brain type like you, Dr. Krugman—physicist and mathematician. But still, I realize, just like you surely do, that whoever we nominate in 2020 has to spark passion as well as having sound arguments like this column lays out. Reality-based populism? Now there’s a concept to get behind. Not sure who it’ll be, but I don’t think Biden has it in him, based on his recent comments about China, among other things.
The sabotage by the republicans of our economy and our democracy have been motivated by more than bad faith and corporate-capture corruption. There was/is a large dose of bigotry involved as well.
"They [Republicans] were just against anything that might help the economy while a Democrat was president."
The fact that the President was a black man as well, made it all the more important that any accomplishments be diminished. (and now, reversed) They needed to make sure that this type of outrage never happen again.
I don't think our country will survive much longer. We're too proud and too simple to just accept something that should be painfully obvious.
1.) We brag that we are a "Christian Nation"
2.) That book the Christians talk about so much has a chapter at the end where everything goes wrong, and the world as we know it is destroyed - except for a chosen few who are snatched out to be with god.
3.) It's time to admit that the war and famine and pestilence and all that other language that gets used nowhere but in the eschatological fantasies of Evangelical Christians is what they want.
4.) They want that because they think that is what their god wants; and - more sickening - they think they'll be raptured out of here leaving only their shoes behind when it all goes wrong.
We have to face the reality that, as deluded and psychopath as they may be, they honestly do think that to make things as bad as possible is just what their god wants them to do - and they will be rewarded for it in heaven.
They are provoking world leaders, guaranteeing that our energy and pollution problems go unresolved until they pass tipping points of no return -
and people who are too blind to know better love them for it,
It's time we admit that some people in this country think the end of the world is a good thing, because they think it won't happen to them; they'll be in the sky box with dad laughing at us down here.
And it's going to stink to burn it all for nothing, with no redemption.
3
We have God, Sen. McConnell and Donald Trump watching over things. I do wish everyone would calm down. What could possibly go wrong?
1
The Fed’s policy “looks an awful lot like an attempt to bail out fiscal policy, and such attempts call the Fed’s independence into question.”
This statement is actually somewhat true. Although, not for the reasons Paul Ryan suggests. The Fed was bailing out fiscal policy because Obama couldn't pass fiscal expansion in light of Republican obstruction. The Fed essentially had to expend all its leverage to keep the US out of a deflationary spiral. The Fed was reacting to fiscal policy, or more accurately its absence, in response to Republican austerity.
The GOP is remarkably consistent in blaming everyone else for the problems they intentionally created.
10
While I typically agree with most economic analysis put forth by Paul Krugman I am not always in agreement with his political analysis. Today in point, Mr. Krugman asserts that republican economic policy is driven by undermining the democratic leadership. I suggest that their real motive is to increase earnings of the top 1% regardless of what it means to the health of the American economy. In this way they then receive funding from the 1% to become or stay a congressman (e.g. Ryan, et al.) or even become a Vice President (e.g. Pense.).
5
Low interest rates, increasing the money supply 2-1/2 times did nothing for growth and business investment. Zero. Productivity plunged, wages stagnanted, and the middle class suffered.
Meanwhile the rich got richer. Exactly what the Obama elites where throwing back into our faces at every turn.
2
@hawk: All currencies are established by fiat, and the value of such currencies themselves rests on their capacity to make more of themselves in lending institutions. Money has a time value. When the time value of money is very low, or zero, it just stagnates.
The games the Fed plays with interest rates to manipulate employment levels are Tomfoolery. Monetary policy should maintain a stable fair time value of money and yield curve, and fiscal policy should maintain employment levels. The "dual mandate" to the Fed to do both with monetary policy is an abrogation of responsibility by Congress.
2
I do believe there are plenty of democrats who want to control spending more and better. Kind of childish to try and make the point that it's a republican thing.
1
As for this statement, "But Republicans were up in arms, warning that the Fed’s policies would lead to runaway inflation. A Congressman named Mike Pence introduced a bill that would prohibit the Fed from even considering the state of the labor market in its actions. A who’s who of Republicans signed an open letter to Ben Bernanke demanding that he stop his monetary efforts, which they claimed would “risk currency debasement and inflation,” I don't think Larry Summers is a Republican.
I know lots of people that preach lots of things and don't practice what they preach.
GOP monetary policy:
1. Wealth interests support spread of fear and resentment.
2. GOP legislators pass wealth interest giveaways.
3. Wealth interests rebranded "job creators."
4. Fair wages rebranded "job killers."
5. Struggling workers triumphantly assured economy is saved.
6. Go back to 1. and recycle.
11
I would like to see what economists think of the theory as to why inflation never took off as trillions of dollars were pumped into the economy following the Great Recession was because the majority of that money went to either balance the banks balance sheets or 95% of the generated recovery wealth went into the coffers of the 1%, effectively siphoning it out of the economy at large, depressing rapid growth and wages, and as an extension, inflation. In other words, people, 99% of them, remained struggling to recovery from the Great Recession and had little extra income to spend on stuff. So despite quantitative easing and any recovery wealth being generated from that, the majority of that wealth was sequestered in the hands of a few who literally couldn't spend it fast enough. If there are any economist out there who could comment on this theory please post it. Just curious.
5
The charts and numbers in Paul Krugman’s column today are interesting confirmation to us nerdy readers who like that sort of thing. All we really need to know, however, about Republican hypocrisy on the subjects of interest rates, the Federal Reserve and inflation is contained in the final paragraph.
“What all this tells us is that Republican positioning on economic policy has been in bad faith all these years. They didn’t really believe that a debt crisis and hyperinflation were looming. They were just against anything that might help the economy while a Democrat was president.”
16
The GOP will go down in history as the destroyers of checks and balances, judicial independence, and democracy itself.
Nice legacy.
21
The Reserve Bank of Australia thought QE was dubious: banks do not immediately “invest” in job creating enterprises when their balance sheet is packed with Fed transfers. There was no demand for loans. The Labor government and RBA spent a lot though: the RBA with a $2000 cheque to all households, Labor with a quick and huge stimulus, in the schools building fund. The banks were forced to pay a tax on this. I think Yellen was better on this than Bernanke.
The rest is correct! The vile “Nasty Party” in Australia denied the GFC took place. In power, it ran a Labor DEBT scare and gave heaps to the top end of town. It has no clue about monetary policy, just like the Republicans, and will hate our RBA for lowering its rate just 2 weeks before our general election.
Please keep your fingers crossed for us - Labor may win on a more progressive programme than it’s done for years.
3
"It was utterly predictable that Republicans would decide that deficits don’t matter as soon as they recaptured the White House.". so where exactly did Krugman make this prediction? Prediction in hindsight is not prediction.
3
@Richard Gaylord Yes, it was predictable and Krugman did predict that deficits wouldn't matter to the GOPers with a Republican in the White House. As predictions go, it was not a heavy lift. The Republicans have repeatedly attacked deficits when Democrats are in power only to support deficits when they regained power. The pattern extends back at least as far as 1937.
Krugman is right to be passionate about this issue. Badly timed austerity hurts ordinary Americans,
7
@Richard Gaylord Nice try at obfuscating things. Fact is anyone paying any attention to the Republican tax-cutting mania knew this. I'm quite certain that Krugman wrote about their hypocrisy many times. Not really worth researching.
Would you care to defend their behavior? Do you believe in the magic of tax cuts? Do you think they pay for themselves? That claim is central. It has never been true for any of their numerous tax cuts.
If you accept that reality then all their prattling about the deficit is easily seen as utterly dishonest.
But you apparently fail to see it. Because you don't want to. So you obfuscate.
1
@Richard Gaylord, having a memory will definitely not get you invited to Dr. K's house for a football game watch party!
Keeping the interest rate low is first and foremost providing liquidity, and not yet printing money. The volume of money does not increase unless somebody takes out this liquidity, and invests it. At that moment however, there is a value on the balance sheet. That's why low interest rates, or public investment on borrowed capital do not lead to inflation. The reason for the runaway inflation in Germany in 1923 was that the printed money had been invested in ammunition that had gone up in smoke, or in arms that had been reduced to scrap value after the war i.e. the volume of money was not balanced by a value any longer.
5
A whole generation of young people entering the market during those years are permanently impacted, and their potential lifetime earnings damaged. I have two kids who graduated then, and they STILL make far less than graduates with the same major earned straight out of university just two years earlier. A whole ten years later, earnings still haven't recovered to pre-crash levels. This is a generation that has to delay home ownership, marriage, and starting a family. The impact of this economic treachery will be felt far into the future.
20
@Kathryn sorry, this generation won’t buy homes because the obama admin saddled them in debt with the student loan scam, shifting it to fed control for political opportunism in 2008.
I would love to see the government run like a good honest and open successful non-profit.
"The Sabotage Years" have been with us forever. What we don't get about education of our own citizenry is troubling. Actual respect is another.
Mr Ryan is probably not measurably smarter or dumber than most of us, but he sure got the picture fast. Too bad, seriously, he chose the path he did. Too bad a lot of them do. Difficult to think they might all be driven by beliefs found in another, imaginary, dimension.
Of course there is the advantage that virtually all of the institutions which in any way connect us are controlled by men who appear to be cut from similar cloth. No surprise.
If anything our governance is being forced to evolve and it may be the right, which represents a sizeable part of the white electorate, is setting up the barricade our justice system will represent. After all the dust settles the Supreme Court has the last say and it may be very difficult for the men and, if any more are seated, women during the remainder of Mr Trump's term to be considered impartial.
3
"Republicans have been the party of fiscal irresponsibility since Reagan, and there was no reason to believe that they had changed."
I'm not sure what Republican Party Mr. Krugman is referring to. Even during the Reagan years the GOP complained about deficits as an excuse to cut social programs, while ignoring any deficits from tax cuts. While Reagan did raise taxes several times to deal with the deficit, the rhetoric has remained the same for the GOP, tax cuts good, social programs bad.
6
@Joe Sparks: Reagan saved Social Security for the next generation or two, even though he also declared Medicare to be socialism. Would that our current legislators had his principles.
3
@Joe Sparks Joe, when Krugman says, since Reagan, that doesn't mean, after Reagan. That means since Reagan took office, and ever since.
6
@Miriam Medicare is not socialism. It is a valuable social program that provides healthcare to older Americans. Reagan did not care much about truth in labeling.
Americans had a revolution, wrote a Constitution and governed under that Constitution because there are some things that government must do and other things that government should be prohibited from doing. The men and women who enacted and administered Medicare are capitalists, not socialists. Dishonest labeling is just dishonest.
3
Amazingly, as your FRED chart shows, despite the political shenanigans of those who control U.S. fiscal policy, the red line shows that the "Employment Rate" is almost back to where it was prior to the financial collapse and deep contraction of 2008-2009. It is sad is to realize the huge loss of self-respect and damage to households and families that occurred during the contraction and slow recovery period.
Imagine the potential of the U.S. economy if the upward slope of the red line were started in 2008.
The visible valley from 2008 til now was a huge unnecessary loss. And now, the country is left with a seriously degenerated, congested, unsafe, unhealthy infrastructure, raging income inequality and for many Americans less opportunity for self improvement.
I see our fiscal policy as totally misguided by failing to invest in projects and programs that will return more than the investment. Many times the failure to invest has come from the classic arguments of free enterprise and government is too big.
We have not been creative enough in our government policies to reach the level of investment in the Interstate Highway System by Republican President Eisenhower and the clean air and clean water achievements signed into law by Richard Nixon.
Now, we have an urgent compelling need to mobilize our labs, industries, and capital into transitioning away from fossil fuels and steadily converting the U.S. to an all electric economy. But this challenge is being ignored.
17
A fundamental problem for the Bank of Japan has been that zero interest-rate policy and quantitative easing were never supposed to run as long as they have. They’re meant to jolt households and companies to borrow, spend and invest, spurring prices to rise, the economy to perk up and then allow the central bank to wind back the stimulus.
Instead, two decades of rock-bottom interest rates have hurt the nation of savers, who have responded by tightening their belts. Low-cost loans have propped up unprofitable companies while big business has piled into investing overseas as the market shrinks at home.
11
It was all a part of their plan to make Mr. Obama a "one term President". Now they are equally determined to make Trump a two term President. Principles? Who cares about principles?
26
Sadly, your assessment that Republicans intentionally sabotaged the US economy for political advantage, oblivious to the pain they were imposing on ordinary Americans, was obvious at the time. McConnell meant it when he said that his primary aim after Obama's election was to ensure that Obama not be re-elected. Republicans fell dutifully in line, opposing or limiting all efforts to improve the economy, hoping to pin the GW Bush Great Recession on the Democratic president instead.
With Republican politicians, party always comes first. Where God, country, and their own constituents rank after that is anyone's guess.
32
Ben Bernanke invented “quantitative easing.” It was an original policy. He actually did print $3 billion of new money, boosting the money supply 30%. Why that money continues to sit in a reserve account at the Fed, instead of going into circulation, remains kind of a mystery. It’s ridiculous to blame the Republican politicians for not understanding it. QE has worked. So now they’re going along. The whole thing remains a science experiment, though. The fact people are worried about what it might do, that’s human nature.
2
$3 billion would be a tiny fraction of the quantitative easing , which worked as intended, despite Republican objections to try and limit its size.
3
@Tucson
"...QE has worked..."
Maybe, maybe not. We would have to do a though experiment where by we think through an alternative reaction to the downturn.
But, we do know that gold went from $425 to $1,800, oil went from $30 to $130. Altogether, speculators in every variety of inflation hedge from gold to real estate to silver to art walked away with $5 trillion, the biggest heist in modern history and to this day, trillions are still stored away in those stagnant investments that would otherwise be improving productivity and raising wages.
From 1981 to 2001, gold stayed below $425 an ounce and real median personal income increased 38%.
Since 2000, real median personal income has only increased 3.8%.
The evidence that QE "worked" nowhere apparent to my examination.
2
@Barry of Nambucca: The Republicans did manage to limit the size of Obama's stimulus plan, focusing their news bites to criticism of one failure, of the solar panel-manufacturing company whose name does not come to mind right now.
1
I always have thought that the Birch Society's conspiracy to default on the debt unless it received the contractionary fiscal policy sequester was the biggest scandal of my lifetime and should be investigated. John Huppenthal is going on and on about regulations, which have only affected environmental policy. I would like to know whether there is any question that the summer 2011 debt ceiling crisis was in fact a bad faith, traitorous decision to knee cap the economy for political gain. Y'all talk about the tax cut, but the GOP also lifted the sequester, in 2017, after the economy had recovered. How did that not show utter treason to the country?
8
Republicans never admit they are wrong nor do they ever admit they lie. Trump is their leader. The entire Republican Party walk lockstep. They don’t like democrats to succeed. That is why they want to raise the interest rates when the economy is down. To get re-elected, they want to lower the rates in booming economy. For Republicans, it is Party that comes first before the country. They will murder the nation if necessary to save the party.
27
Most ironically, if the Fed now keeps rates low, when wages are up, doesn't that risk creating an economy with both inflation and low interest rates. A bad place to be for everyone, except those who own large amounts of real estate?
5
in case you are one of the wealthy one percent . wages are not really up . any increase we may see in the near future still won't allow us to catch up to the standard of living we had in the fifties. wages have been stagnant for decades. the inflation rate has been low but the cost of living has outpaced any gains seen by meager wage increases.
it's not about how much they pay you its about whether or not you can live on it or not.
8
@Allie
"...wages have been stagnant for decades..."
Maybe it depends on how you define stagnant.
From 1981 to 2000, real median personal income increased 38%.
Only 3.8% since then.
2
I'm having a nice time reading these trenchant comments while listening to Bolt Thrower. Is there is a mechanism using which we can outlaw the Republican party by declaring them extreme and hazardous for our democracy? I wish there were. May be an organized march in the streets is required on an unprecedented scale. One can hope.
The GOP servants don't value our country. And I'm scared the lengths they'll go to end it for all of us.
25
@SK
"...don't value our country..."
Perhaps, but perhaps they create value for our country:
Real GDP increase in 2018? $680 billion
Real GDP increase in 2016? $244 billion
In 2018, Black and Hispanic total employment set ten all-time records and at higher wages than in 2016.
In 2018, wage increases were higher than any other year since 2007.
In 2018, debt as a proportion of GDP dropped by over $200 billion after increasing by over $120 billion in 2016.
3
@John Huppenthal
This is credit card economy created by 2017 tax cuts. Music starts when the bills are due.
12
@Kodali
Bills are due every month no ? They have been showing up for over two years now (actually, way longer).
Fiscal responsibility is always needed.
1
The only Republican really pounding the table for rate cuts is President Trump. He's consistently complained about Fed policy since he was a candidate. He is also wrong in my humble opinion. As for the GOP's long-held inflation complaints, they are correct. Median CPI (calculated by the Cleveland Federal Reserve and Ohio State University) has risen 50% since 2016. The chained consumer price index for all items has also risen since 2016 after holding relatively steady between 2013 - 2016. Professor Krugman's columns would far more relevant if they were far less partisan and occasionally more correct.
4
@Once From Rome
"...he is also wrong..."
Perhaps but perhaps not.
Money supply was increased over $860 billion in 2016 even though GDP only increased $470 billion (nominal).
Money supply was only increased $494 billion even though GDP increased $985 billion in 2018.
These numbers are insane by any policy yardstick.
But, that is monetary policy these days: a completely pretend culture that someone, somewhere knows what they are doing.
3
@John Huppenthal M2 is increasing, yes, but at roughly the same rate that it has increased over the past couple decades. I think Trump is wrong economically but also politically. He should stay out of Fed policy-making, as all Presidents should.
3
@Once From Rome: Were you in the U.S. in the seventies, during the oil imbargo, when inflation was double digits, and drivers got their gasoline on alternate day, and waited in long lines to do so?
Another reason not to listen to politicians when they offer economic advice...
2
@Thomas Tisthammer Not politicians. Republicans.
Somehow, the question of honesty, sincerity, and integrity do not make it into the voting booth, if the turnover of complete power to the Republicans in 2016 is any indication.
Politics is much more like a popularity contest, the kind we had in the sixth grade. Apparently, the gun and god issue, along with borders and coal/oil, along with an expressed disdain for Hillary Clinton, far outweighs the hypocrisy and dishonesty demonstrated in this column.
4
Bottom line -Republicans have no integrity, no honesty, no honor, and no clue. All their actions are meant to create short term circumstances that will improve their chances of reelection. Party over country, party over truth, party over everything except greed. They draw the line at greed, they worship greed.
27
I don't think this post of Krugman is fair to Republicans.
Macroeconomics is hard. Macroeconomic models don't accurately predict boom times and recessions. There is a simple reason for this. Macroeconomics tries to model human behavior, and humans are often irrational. This is what makes macroeconomic prediction difficult.
Members of the Federal Reserve Open Market Committee have a difficult task. But they make it a little easier by trying policies out. They raise the Fed Funds rate by 25 basis points then try to measure the impact on the economy. If unemployment goes up they back off and lower rates. If inflation picks up they raise rates.
This is true no matter what their politics.
Politicians have to look further ahead than just a few months, so their task is a bit harder. An infrastructure spending bill for example will be in place for several years. It may lower unemployment or raise inflation but the effect will be more long term.
Economists whether working on monetary policy at the Fed or fiscal policy for government politicians use the same basic tools. They largely agree on what the effects are. Arguments are over which of countervailing forces will win out.
Also the economic arguments get mixed with arguments about whose interests to promote. Thus an infrastructure program provides jobs for construction workers. Which party has members who will benefit?
It really doesn't help matters for Paul Krugman's criticism to be so partisan.
2
@Jake Wagner So Krugman is being partisan because he points out the partisan nature of Republican economic policy. Read the article. Republicans ignore basic economics when mounting a policy stance. Republican policy is purely motivated by political concerns. Republicans consistently blocked any of Obama's attempts to boost the economy, not for economic reasons (long run or otherwise) but because they were worried it would work and boost Democratic fortunes. These are not good faith actions.
46
@Jake Wagner
"Also the economic arguments get mixed with arguments about whose interests to promote".
This sounds partisan to me and substantiates Dr. Krugman's point. The inequality we experience now is the result of hyper partisan polices by the "you know who" party that benefited the most from those polices.
4
@Jake Wagner It's a data-driven article. Did you read it? Facts are still facts - and they aren't partisan.
Republicans do not view the Country as “us,” which is incredibly offensive with the way they pound their faux patriotism. Republicans look upon the U.S. economy as a playground for their own personal enjoyment. If things go bad, they simply position themselves to take advantage of the situation.
20
@K. Corbin
"...they..." "...playground..." "...their personal enjoyment..."
GDP increase in 2018? 3.2% and $680 billion (real).
GDP increase in Europe? 1.2% and $210 billion (real)
Median household income increase in the U.S.? $1,000. After taxes? $2,000.
Europe? $400, $400
What happens when a large proportion of the intelligentsia have been indoctrinated into believing that taxes don't have a significant effect on economic growth?
2
@John Huppenthal
Taxes do, at certain margins. So does availability of credit. For years we have measured aggregates. Now we are living in an age where a select few have ridiculous wealth, funded in large part by debt for the many.
No way to run any kind of society. We sacrifice the many for the few.
8
I wish all you Republican sympathizers would stop trying to rescue your position by pointing to the GDP. increases in GDP along with productivity have only benefited corporations and shareholders. the increase in the GDP hasn't benefited me one iota.
8
Too bad the economy is not about who is in office. It’s about the ideological struggle within the “one present”. All we see are hand puppets who are nothing more than a little gas. When PACs, Super PACs and Dark Money became everyday business, our last chance at actually having any shot at participating in the discourse and results in a meaningful way was gone.
11
@James Fitzpatrick
Maybe, maybe this was your chance.
Trump has shown his authoritarian tendencies and his admiration of dictators is well known. It is safe to assume that Trump will attempt to rule as America's first dictator supported by AG Barr, McConnell, and Graham as they will be part of the regime. Trump will interfere in all businesses, the fed ,justice ,intel and will try to stifle the free press. Perhaps Trump will form an alliance with Putin and withdraw from NATO so they may rule the world . A Trump Moscow Tower may go up funded by taxpayers with Ivanka and Jared official co-presidents ,Hannity Inspector General to remove democrats from govt and crush the free press allowing only FOX STATE TV with Trump commercials on 24/7 , MAGA HATS mandatory to get a job or to vote. It can happen here in fact it is happening.
12
@REBCO
I think we all must learn enough Russian to, how you say? Global warming anyone?? Tovarich Trump and his master in the Kremlin will gleefully preside over their immense graft, but then discover there is no one who want's their millions in a post climate change world. I'll bet that they will both whine that nobody told them what was happening. A least we will have the cold comfort of seeing the Grahams and McConnells of the morally defunct GOP naked and defenseless as the rest of us, perhaps holed up in Mar-a-Lago with no servants or body guards or sycophants to order around, toasting soggy marshmallows over bonfires of greenbacks as the waters rise with the temperature.
1
@REBCO
I think paranoia treatment is covered by the ACA. You should strongly consider it.
This post is , well, sheer lunacy.
None of this will happen.
1
@Norville T. Johnson
It was satire but did you follow Trump's phone call to Putin where he ignored the Russian interference in our elections and agreeing with Puti that he is not interested in Venezuela . Paranoia may be covered but delusion is not .
It is not just economic policy on which the Republicans demonstrate their hypocrisy and hatred. They opposed nearly every measure that President Obama supported, not because of a serious policy consideration, but because if Obama was for it, they were against it. That is the caliber of leadership we have in the Republican party. Or had. That caliber has now sunk so low the highest approval is coming from the Kremlin.
26
Sadly, I have reached the point where I wonder if the latest good grades for the economy are as rigged as bribed college admissions. It is sad that after almost 80 years as a person with a good measure of confidence in our government, I now have cause to question the veracity of all government reports or assertions, thanks to the Liar in Chief, who saw no need to tell our most formidable adversary - during an hour long telephone conversation - that he should not meddle in our elections. Ten thousand lies and still counting.
30
@JP
"...question the veracity of all government reports..."
That would be quite a conspiracy. The BLS statisticians were all in place before Trump came into town. Given the proclivities of Washington D.C., it would seem to be much more likely that the scale would be tilted against Trump instead of towards him.
Think of the most common reports and how these are interpreted negatively against Trump.
For example jobs. We get a monthly report that lists total job creation. Part-time jobs are treated in these reports the same as full-time jobs. No problem as long as the proportion of part-time jobs is about the same every month, you are comparing apples to apples.
But, that proportion changed dramatically in 2017 and 2018.
In 2016, only 70% of the jobs created were full-time jobs. In 2017, that changed to 100% and it stayed at 100% in 2018. It not only was 100% but Trump escalated an additional 700,000 part-time jobs that Obama created to full-time. More than 100% of the jobs that Trump created were full-time.
That's a big, big story. You can see the effect in real disposable income. In 2016, real disposable income increased $244 billion. In 2018, real disposable income increased $597 billion.
That's a huge story. Never got told, never got reported.
Yes, there is a bias, but it is not in Trump's favor.
3
@John Huppenthal Yes, there's more disposable income...for the wealthy and corporate executives due to the tax law passed by tRump and the republicons.
There are highly profitable corporations which now pay ZERO taxes, and even get tax REBATES.
Yes, the workers have gotten some crumbs but it's people like tRump who have garnered the lion's share of the increases in disposable income.
15
@John Huppenthal
Bear in mind that 'full-time job' is a boundary term, subject to redefinition for tactical purposes. I don't know if the rhetorical goalposts have been shifted in this instance; but I have read of states that treat two hours of work in a week as 'employment' that disqualifies the individual from receiving public benefits.
8
Why stop counting people at 54 when the Recession ensures that people will have to be working past 70? This measure of the economy and employment is fundamentally flawed not including the single largest growing population as well as being ageist. By both measures, no one, Trump et Al. as well as Krugman remain clueless.
5
@no one special
Civilian employment ratios and reports include all ages.
The unemployment rate for people 75 years of age or older is only 2.8%. So we can see, that if you want a job, their are jobs for older people.
The employment to population ratio for 64 to 75 years and older is 24%, up from 20% in 2010. So, whether you are correct and older people need employment or whether they just want employment, there are jobs to be had and older people are taking them.
2
@John Huppenthal, as someone who is 60 and has spent the last 5 years, after being downsized from a good job 3 months shy of her 55th birthday, I beg to differ. Good jobs are hard to find once one is older. Employers don't want to pay for experience. They don't want to pay to train. They don't want to hire enough people so that employees don't burn out. And some of us don't want to, or can't do minimum wage jobs and keep body and soul in one piece.
I want (as do others, older or not) a job that pays me a decent salary for the skills I have acquired. But employers have taken to advertising for people who have less than 5 years experience and a wealth of skills. Or they are asking for 2 years at an entry level job. Jobs are there and so are the people. Employers don't want to hire. I'm in IT. I see it all the time. They refuse to consider anyone who truly has the skills they say they require for a job. And then they bring in a foreigner or outsource it. Outsourcing is inefficient and demoralizing.
In truth, employers sabotage themselves just as the GOP sabotages the economy and the lives of 99% of us.
10
@hen3ry
You are so right on all points.
2
What needs to be said clearly and loudly is that the employment numbers are a simply straight line from 2012 onward: President Trump has not affected the growth established during President Obama's administration ... yet. We've been lucky so far.
7
@Gerard
"...employment numbers are a straight line..."
Depends on what kind of ruler you are using and how you define employment.
In 2016, 1.56 million full-time jobs were created.
In 2018, 3.1 million full-time jobs were created, a 100% increase
There ain't no ruler that connect that series of years with a straight line.
3
@John Huppenthal
For anyone interested in the important trends, I found these BLS charts to be quite informative: https://www.bls.gov/web/empsit/cps_charts.pdf
As I read them most of the critical measures follow a fairly linear path from about early 2010 to the present.
4
@John Huppenthal More jobs were created under Obama, per month. What about the increase in debt by 400 - 600 billion per year under Trump? I thought Republicans wanted "no deficits" under the contract with America. But deficits skyrocketed under Bush and now again under Trump. Why aren't you hand-wringing over that anymore?
13
Of real concern, is that there are no consequences for Republicans and their economic policies. Their economic position is determined by base politics, not what is good economic policy for America. Selling an unfunded tax cut, that was heavily skewed to the mega rich, is just another example of poor economic policy at the wrong time, to the detriment of the US economy in the long term.
If the US economy is going as well as both Trump and the GOP claim, why are they putting undue pressure on the Federal Reserve, to cut interest rates?
14
@Barry of Nambucca
"..heavily skewed towards the rich..."
Perhaps but all families of four making $53,000 or less had their taxes reduced to zero. In some peoples minds, that would make it as heavily skewed to the poor and middle class as conceivably possible.
And, comparing our taxes with those world-wide, our families of four making $53,000 or less would have the lowest taxes of any family in the world.
Does it get any better than that?
1
@Barry of Nambucca
"If the US economy is going as well as both Trump and the GOP claim, why are they putting undue pressure on the Federal Reserve, to cut interest rates"?
Exactly!. Kinda reminds me of Trump's financial statements. When he wants get a loan, his assets are "bigly" but when he needs to pay taxes his assets/income is "snigly".
1
in the classic model of rhetoric, we have logic, authority and emotion. This is a helpful use of the first two, but popular opinion (especially the "Republican brand) seems to conclude with the third...
6
Since Ronald Reagan took office in 1981 the Republicans have clung, like blood starved vampires, to trickle down or, as Bush correctly called it, voodoo economics. The only people that have won in this game are the richest. Like so many other games the GOP has played over the decades it's become normal to us. We no longer have a government that works on our behalf. Reagan demonized government and the GOP has worked very hard to create logjams and to dismantle it except for the extremely wealthy families and corporations.
I have come to the conclusion that the GOP has not ever been interested in the welfare of the common man or woman in America. In their eyes we are nothing and merit no consideration. The worst thing that we do is to continue to put them into office and positions of responsibility that they don't deserve.
The GOP is responsible for ruining the lives of at least 2 generations: the latter half of the baby boom and the people born in the late 60s and 1970s. What upsets this reader is the knowledge that their policies were carried out with the full understanding of the damage they would do to 99% of us.
5/4/2019 7:22pm
73
@hen3ry
"...ruining the lives of at least 2 generations..."
From 1981 to 2000, real median personal income increased 38%. The poor did even better.
Didn't happen in high tax Europe.
Our median household income is $62,400 while Europe's is less than $40,000.
Yes, things went badly after 2000. But, that was 18 years later and the economy slammed into Clinton's tax increase in 1999 and 2000.
Otherwise, we might be up at $70,000 per household with Europe back at $40,000.
1
@hen3ry Unfortunately, with money comes control, whether that be media saturation or voter disenfranchisement.
2
@John Huppenthal
With Clinton, the banks were panicked that the US was no longer going to issue T-Bills, and all of our loans were tied to them. Why? The deficit was going to zero. By the way, all the growth you talk about happened under Clinton, not Reagan (in 1981). Most of it happened in the Clinton years. And it was due to computers and dot-com technology efficiencies, not one party or the other.
Furthermore, Reagan increased SSI taxes massively in 1983, (along with Tip O'Neil) and other taxes 11 times more in his reign. Finally, just to burst the last Republican trope, interest rates were not "22%" under "bad policies of Jimmy Carter", as Republicans often lie about. It hit 22% in Reagan second year in office, primarily due to Paul Volkers policies at the Fed.
The truth will set you free.
12
You simply have to admire Mr. Krugman. After eight years of tepid growth (the Obama years), the now less regulated economy has finally taken off. Until now, the usual claim from the left (including from Mr. Krugman) was that it’s all because of the seed planted in the Obama years. Now that the economy just wouldn’t stop growing and this claim becomes more contrite than ever, Mr. Krugman comes up with a stroke of genius - the economy really wanted to grow like that during the Obama years, but the Republicans sabotaged it ! Gold, Jerry, pure gold !
7
@Gimme A. Break
Yeah, and imagine how strong the economy would be with zero taxes and no regulations. Maybe the GOP should try that next.
15
@Gimme A. Break has a point worth considering, if you can get through his sneering. The economy, though a variety of measures, has indeed "taken off" (wages is a notable exception, save for the $1m+ people). And it really did seem to happen to jump immediately upon Trump's election. Why is that?
The cynical part of me wants to say the 1%, who really do have too much sway in our economy, did so to express their election pleasure. But the pragmatic side of me thinks there is more to it -- including the "seed planted" theory. I hope @Gimme A. Break will acknowledge that possibility, especially because (a) tepid growth is, in fact, positive growth and (b) the otherwise irrational "belt tightening" and seequestration that the Republican Congress demanded (and Obama acceded to a moderated version).
We missed our chance, in my humble opinion, to dramatically enhance our national infrastructure in 2009-2015 (and perhaps longer, but the economy really did take off), and instead Congress punted to the Fed to save the economy with QE and QE2. What a shame those dollars didn't go to real tangible production - trains, tunnels, bridges, high speed wi-fi and fiber optics, remodeling schools, building flood controls, etc etc etc ... I have trouble forgiving the elected GOP for that (and Obama, too, but the president doesn't control the purse).
7
@Gimme A. Break
Based on what evidence? What policy changes have contributed to this said increase?
The growth rate today is occurring at the same pace as under Obama. Even with the sugar high of the new tax law, the rate of growth has not changed. If Trump's policies are responsible, would we not see an increase in the rate of growth, as you claim?
8
Federal Budget Deficits are Fuel for the Economy
Everyone has understood this since Keynes explained it 8 decades ago. Well everyone except Democrats who re-enacted the PayGo statute in 2009 before the Great Recession had even ended.
Deficits are not the cause of inflation. The worst inflation (14%) and highest interest rates (15% 10 yr Treasury) of the past 70 years occurred in 1973-82 when deficits averaged 2.4% of GDP and the debt-to-GDP ratio was always less than 35%. Since 2009, however, deficits have averaged 5.4% of GDP and the debt-to-GDP has been over 100% for the past 6 years. But inflation is 2% and has not exceeded 4% annually in over 25 years.
Deficits don't cause high interest rates either. In 2000 when we had the largest ever federal budget surplus of $236 Billion, the 10yr Treasury bond rate was 6.03%. But now, with a deficit of $1 Trillion, the 10yr Treasury bond rate is 2.65% (1Q2019). With a trillion dollar deficit, the interest rate is less than half what it was when we had the largest surplus in history.
Obviously Republicans don't care about truth, facts or data as Deranged Donald has proven conclusively. But the rest of us have an obligation to the truth.
9
@Paul Mathis
Perhaps but perhaps you and Trump agree exactly.
Simply pump out more money and hold the fed funds rate to zero.
How would that be different from Venezuela? They started out by expanding currency by just 10%.
They weren't able to fool their citizens. Venezuelans knew what was coming next, a faster and bigger run of the printing presses.
Our citizens also know what's coming next. We know what Volcker did to get things under control in 1983.
We are confident the fed would do it all over again and quickly if inflation popped back up above 3%.
But, the fed could get overwhelmed if it listens to the siren call of easy money.
It's clear Republicans have been highly hypocritical about economic policies. I could go into myriad detail about how this is true, but really all you have to do is look at the difference in what they say about a Democrat President versus a Republican President doing exactly the same thing.
16
@Greg
I think cynical is the more appropriate term. Republicans know that deficits are fuel for economic growth so they starve the engine of fuel whenever a Dem is president.
The good economy we're currently in, has less to do with trump being president, since many factors come into play.
With trump, when the stock market is up, of course he takes credit. When it goes down, "it's leveling", he said.
If it crashes, he'll blame the democrats.
When trump used his slogan, "Make America Great Again", no one has ever called him on just what period he speaks of.
At first, I thought it must be Saint Reagan. Then perhaps he meant the 1950's. Later, it seems like he wants the
"Gilded Age" to return.
But after his comments to the so-called "evangelicals", as he promised how great it's about to become for them, I believe he's hurling us back to the Dark Ages, when religion ruled.
We are in a truly dangerous time.
32
Thank you, Paul, for highlighting the Republican hypocrisy of the Obama Era. It was during this 2009-2010 period that I concluded once and for all that modern Republicans don't love their country, they love their ideology.
Mitch McConnell declared (apparently without an iota of shame) that his party's goal was to make Obama's presidency a failure. I'm still amazed — and very sorry — that McConnell was not immediately charged with sedition, or worse, for such a traitorous statement.
If he had been slapped down then and there, America would now have Merrick Garland on the Supreme Court instead of the authoritarian Gorsuch, and we surely would have a much more muscular Affordable Care Act shielding us from the health-care disasters that Republicans even yet seem determined to inflict upon us.
51
@Grandpa Brian
"Republicans don't love their country, they love their ideology."
Actually, Republicans love power. They don't have any ideology.
1
Oh.
You’d like to start arresting political opponents for sedition.
Good thinking. Great thinking.
After all, it’s exactly what Trump threatens to do, and it’s always worked out well for this country.
Good grief.
1
"Republicans had been the party of fiscal responsibility since Reagan"? What? You must be joking. Reagan quadrupled the debt after running against it. That is the GOP norm. Perhaps you meant to say that Republicans have campaigned on fiscal responsibility -- and then promptly abandon it until it suits their partisan purposes?
20
@Beth that's not what he wrote. This is what he wrote: Republicans have been the party of fiscal irresponsibility since Reagan, and there was no reason to believe that they had changed.
And they've proved it over and over again.
18
@Beth
Reread what Krugman actually wrote, which is -"Republicans have been the party of fiscal irresponsibility since Reagan,......"
1
The GOP have been showing their true colors in many areas since Trump came to power. I predict after Trump is out of office and bad things start coming about because of his tenure that Republicans will blame everything on him and forget entirely that they were the ones who supported him.
20
@Doug Hill - No. Republicans will go for their "traditional"way of doing things and blame the Democrats.
Yes, Republicans believe in magic and keeping their donors happy. If they were rational, they would have worked to hasten the recovery to where businesses trusted in continuing rapid expansion. Then they could demand tax cuts when they would offer the greatest return and result in the lowest deficits. But they are not being reasonable, just willful.
9
Reagan asserted that cutting taxes will not create deficits and debts because it frees money to be used in the real economy where wealth is created. Furthermore he asserted that the government does not reflect the will of the people through their elected representatives so reducing government will increase the power of the people. These remain the bedrock of Republican policies and justify what Trump is doing to undermine our liberal democracy.
Tax cuts when there are not real surplus revenues always result in deficits. Government spending is a huge part of the real economy because the government buys everything from the private sector. No regulations have ever been introduced except to remedy big problems for society created by private entities. Government represents the will of the people because that is how our government is arranged. When government withdraws, private wealth and power acts with impunity.
The Republicans are struggling to create a freedom in their views which will produce oligarchy by plutocrats and theocrats, and no freedom at all.
"Both measures are at post-crisis highs now, and sure enough, Republicans are advocating now the policies they opposed when they were most needed."
True. But they are still needed.
Why? Because wages are only now just beginning to respond. Our measures of unemployment were thrown far out of usual territory by the depth and length of the Great Recession (which Republicans made deeper and longer, and yet profited from).
It is not yet time to stop. Labor needs some of the rewards of recovery. It hasn't gotten it yet.
10
And lowering interest rates and more deficit spending on tax cuts for the wealthiest and the military will improve the ordinaty Joe’s lot in life how, pray tell?
2
@Robert, those are not the measures he is referring to. He is referring to the obscenely low interest rates and deficit spending **that goes directly to employment and economic stimulus.** I am confident he isn't referring to the Tax Reform Act.
I cannot take a position; I don't have enough economic sophistication. But interest rate increases have not been extraordinary (notwithstanding the president's fury at the Fed), so I think that part is wrong.
@SHI Dancer -- My concern is for the too common mantra that the economy is booming and unemployment defeated.
It isn't, not for the people who still don't get raises, and others who still don't have jobs. Whole sections of the country are not included, and a lot of individuals are left out even in the sections that are included.
It isn't good enough, and too many are calling it victory. Republicans claim it as their own, while Democrats assign it to Obama and want to trim back the Republicans. I just want it to continue until it reaches everyone.
3
There is one thing for Republicans more important than simply staying in power but for the life of me, I can't remember what it is.
45
@Lawrence Zajac
It's money: lots of gratuities, some of them legal. And if you lose an election, a GOP stalwart can depend upon a generous offer from a right wing propaganda mill.
4
Republicans' primary interest has long been to stay in power. There are no principles that can't be compromised for this goal. Family values? Not important anymore. Fiscal responsibility? Not while a Republican is in office. National security in the face of a hostile foreign power's cyber attacks? Who cares. I don't think Mitch McConnell is cowed by Donald Trump--he refuses to bring up a bipartisan bill to protect our elections because he thinks Putin is helping his party. He wants that help to continue in 2020. And so does Donald Trump.
43
For years I have tried to teach there was no famine in Ireland. There was a failure of potatoes the food of Ireland's lowest economic pentile. One million peasants starved to death and one million more were sold into the urban squalor of the new cities of the Industrial Revolution.
Ireland's food export economy boomed as food was forbidden those that Swift had talked about 120 years earlier in his Modest Proposal.
The elimination of two million souls served the interest of Ireland's absentee landlords and their hirelings just as Swift had suggested in his Modest Proposal.
The economic system we had then had the same name we use today neoliberalism.
Samuel Johnson defined conservatism in his 1775 letter to the American Congress which he called Taxation No Tyranny. The GOP is not conservative. GOP economics just like GOP theology has been part and parcel of the Western Canon for 2500 years and dogma always conquers science.
The dinosaurs never knew what hit them we will destroy ourselves knowing what we are doing. We will destroy ourselves blaming magic when we know full well as did Jefferson, Washington and Franklin it is we alone who will determine our future.
Reagan defeated a scientist and taught us all, when ignorance is bliss t'is folly to be wise.
Where should I go to start believing that ten years of steady economic growth, and lower unemployment began not at the beginning but at the end? It is only Voodoo if you don't believe in magic and time travel.
24
@Montreal Moe That was powerful Moe: I had no idea of the connection between neo liberalism and the real politic surrounding the Irish potato famine, I do however understand the analogy, and must arrive at the same conclusion. Thank you, I hope everyone will read your comment and give it the consideration it deserves, quite sobering.
5
@Montreal Moe
Yes Ireland was exporting barley during the famine. Yikes !
But how is that different from us drinking coffee, eating chocolate, etc. etc. which is often harvested by workers near or on the brink of starvation in their own countries ? Growing export crops for cash instead of food crops for themselves ?
If you look a bit further back in time, the introduction of the potato to Ireland allowed a sudden population surge of poor landholders -- you could raise a large family pretty much on potatoes, milk and the occasional bit of beef. And you could raise potatoes on land which would not grow other crops, and graze the family milk cow on the land you couldn't even grow potatoes on. Unfortunately, the potatoes were all pretty much the same genotype and very susceptible to the spores of potato blight, which may have drifted in on the wind. All it took was a few weeks to turn not only the winter's food supply but next year's potato seed into mush. And to collapse that whole system.
At the moment, we can keep most devastating crop diseases at bay. But with an increasingly variable climate, rapidly adapting plant pathogens, and our inclination towards hybrid monoculture crops, we should be aware that similar crop failures await us all.
12
@Montreal Moe yes yes and yes
Now let's add charlatans, ignorance, arrogance, theocracy, bigotry, and authoritarianism (BTW gobs of these existed in Ireland's RCC and aristocracy) to the current GOP's list of existential dangers and you have a perfect storm brewing for little ole USA.
But but but the economy is so strong!
Yeah - thanks to the courage of President Obama. Any fool can see the trends he started are just continuing - thanks to his creating a fairly sound base. He does deserve the credit - especially since Trump seems to think he deserves it for mostly whacking at the foundational structures that sustain things.
But really here is the bottom line for me at least and I hope about 58% see it my way.
Circa 1930 there was no doubt in many minds that the wrong Parties were indeed the most capable - the ones that could make trains finally run on time and roads be built that were futuristic in design. But existentially - they were rotten and corrosive beyond belief - they proved they were!
Was it moral to hold your nose and vote for them when your conscience was convulsing?
I believe Trump and GOP are bankrupting the Nation tangibly and spiritually. We may have a few sugar highs along the way to our debilitating moral diabetes - a diabetes we will pass along to our our posterity.
That posterity will curse us for being so amoral, selfish, uncaring; so disrepectful of truth, reason, our enlightened beginnings, our modernity.
Shame on us for the current GOP.
2
The GOP & big campaign donors calling the shots complain about efforts to 'redistribute' wealth to the citizen majority. As if the nation's resources/productivity belong to the elites. But they set up our politics so our nation's wealth is already "re-distributed" --up to them.
Then when we try to assert equal rights to a fair share from our labor and productivity, we're insulted as big govt radical left wing 'redistributors'.
Generations ago, America was a world role model of middle/working class success. Ratio of CEO to average worker pay was much lower. Wealth/ political influence was more fairly distributed in the citizen majority.
Once, ordinary citizens could live decently in their own home, get vocational training or college degrees with little debt, and retire with pension security. Our 2020 candidates must concretely explain how this worked, contrasted with now.
But our politics 'redistributed' our national resources away from the majority up to the top elites. Business profits were legally invested in our political campaigns, but not called bribery. This was propagandized to be a guarantor of our American "Freedoms." Our own highest court sold us out.
Now the international GINI Index rates US economic mobility behind other democracies.
Now, the media must start talking about the needed campaign finance reform most voters favor, that will unblock our politics. Media must spotlight what we once had, how we lost it, and how to start getting it back.
17
@Meredith
They need to shine a relentless light on the Koch network. Which, I am convinced, would like to see a majority of us poisoned, bankrupt, and dead.
1
Hands down, the Republican party (whatever the current manifestation) has become the most self-serving political party in my memory. The retention of power without regard for the damage done to institutions, laws and citizens is a mantra for them. They have two views of the economy: One, the we are in power view, good. Two: the other guys are in power view, bad. The go to moves are cut taxes on the wealthy (and deplete the treasury) and cut entitlements to make up for lost revenue. Rinse and repeat.
22
It hasn't been about normal economic policy for a long time, it's about an increasingly powerful and corrupt plutocracy having grabbed the reins... Until we address that, any expansionary policies will likely fail to address the real issues so many of us face -- rising costs for things like housing and healthcare, stagnant wages, longer and longer work hours, intensifying inequality and just a general sense of being played for chumps. I'd also like to see a deeper dive into the jobs and inflation numbers, which feel positively Pravda-like in their disconnect from reality...
13
@sue denim, I must vehemently disagree with your cynical suspicion of economic measure results. The Dept of Commerce, Dept of Labor, and GAO have excellent civil servants dedicated to their technical work and to our country.
Your comment, in fact, reminds me of Fox News throwing shade at them during the Obama administration.
@SHI Dancer
I guess where you stand depends on where you sit but in this case there is reason for concern I believe. To start, jobs numbers often overlook things like wage stagnation, underemployment, over employment, dropout rates, job security, access to benefits like health care, etc, basically the quality of life associated w jobs. And inflation stats often miss key issues like health care, housing, childcare, tuition, and even tax rates. And yes, I also do worry about the possible politicization of said numbers under the current admin, esp given the broader disregard for facts we’ve seen of late, so I think special care needs to be given in reporting on them both for context and accuracy.
republican's calls for anti-inflation measures in 2010-2011, and their current calls for inflationary monetary policy are certainly hypocritical. they are not motivated by any concern for the middle class and poor Americans. republicans are solely interested in protecting the wealth and privilege of their wealthy benefactors. never the less the notions that there is little or no inflation is absurd. everyone is affected differently by price increases except in 5 critical areas; housing, food, health care, education and transportation. productivity may have jumped recently over 3 percent, but its hard to believe that it did so in the above critical areas. everyone who lives on a budget knows that the cost of food increases from one shopping day to another. when you have just spent 200 dollars on food and can carry the load for car to house in one trip you know how expensive food has become. in the area of transportation the price of gas is as high with oil at 60 dollars a barrel as it was when oil was over 100 dollars a barrel. what going on there. housing is getting more expensive every month in many locations, and we all know that a trip to the doctor can be life threatening. getting an education continues to be an education in inflation. all this does not even count the disastrous affects of the recent tax "reform" that basically benefited the wealthy. lets not kid ourselves. we are getting hammered by both the right and the left
4
Those "rosey" figures are little more than an advertising slogan that base in real life terms has not seen much in job security. Millions are struggling with housing costs, medical premiums and jobs that generally offer little in increased earnings potential. the winners in this economy are not the average family.
17
The "inflation hasn't happened" mantra is repeated only by individuals who have no idea how inflation is calculated (Douthat a couple weeks ago) or want to deceive (Krugman). The Bureau of Labor Statistics uses a slew of deceptive techniques to mask the true pace of inflation.
Consider:
The cost of housing is the single largest component of CPI. Unfortunately BLS uses an entirely arbitrary method called "Owner's Equivalent Rent" to calculate it.BLS contacts random homeowners and asks them to provide the hypothetical rent they would charge were they to rent out their house. Thus the most significant determinant of official inflation numbers is the "guesstimate" of lay people.
Every time Apple releases an iPhone, BLS cuts the inflation rate by .1%, since it perceives the new phone to have "more value" at the same price.But nobody buys every new iPhone, and the iPhone's core function, making phone calls, is unchanged.
BLS uses "substitution bias" to suppress true inflation numbers for many commodities.If the price of New York Strip steak rises from $8 a pound to $9 a pound, and a consumer who traditionally bought NY Strip now buys flank steak at $8 a pound, BLS claims that this circumstance is non-inflationary.
It's painfully obvious to anyone who has been the primary consumer in a household that inflation is still very alive.
13
@Charles So is inflation running higher or lower than claimed by BLS?
4
@zebra123
His assertion is that true inflation is higher. There are also reasons to think it might be lower, but neither is 100% certain.
@Alan, the argument is over what's "true" inflation. There's no one, obvious measure.
There are adjustments all over the place in every economic data point, to weed out one-time factors and the like. I'd love to watch the conspiracy theorists, like the original poster in this thread, try to work out every detail of pricing thruout the economy and see how well he'd do. (I agree with him about the substitution effect, but doubt that it changes the overall measure that much.)
1
Further evidence that Republicans understand little about economics (chief among them, Trump), and simply approve of any measures that will work against the president when he (she?) happens to be a Democrat and for him when he is a Republican.
8
@hdrummond
"...understand little about economics..."
Yes, but what if they are right but pure accident?
What is the most scientific thinking about money? Friedman's thinking turns out to have been completely wrong. Velocity is not positively correlated with money supply.
The Phillips Curve is proven to be a joke.
Unemployment and Inflation are correlated with other variables, not each other.
The lack of public discussion seems to leave us all to our own devices.
Gold and all other inflation hedges took off appearing to allow speculators to walk away with over $5 trillion of investment in one of the biggest heists in history and leaving another $10 trillion stacked up in these stagnant, unproductive investments. Doesn't theory allow us to conclude that money policy killed wage growth?
Real median personal income went up 38% from 1981 to 2000. Only 3.8% after that.
6
Economic cycles follow the reaction of the populations to the Jupiter Saturn relationship in our Sky far more than to the people who happen to be in charge of managing our money policy at any given time. Jupiter has been closing in on Saturn for the past seven years and the economy is due to peak when they are both viewed in the same place by the end of 2019 in the first degrees of Aquarius. The last time these planets were in opposition was in 2008, when the economy tanked, and we thought the sky was falling in. President Trump will enjoy this economic plateau which will even last throughout his second term if reelected, no matter the bad decisions, or choices he makes in his appointments. The next opposition of these two planets won't come until 2029, no surprises there either, just the mathematics of the passage of time up in our Sky.
8
But, Mr. Krugman, please! Besides all your elegant explanations about why Republicans were so wrong, what do you think about the 3.2% growth in Q1 and 3.6 % unemployment? And while you are at it, what role if any, did the tax cuts and relaxation of government restrictions on business played a role with these results.
9
@Ahmet Goksun
3.6% unemployment is indeed good news.
But 3.2% GDP growth was exceeded 6 times during the Obama years.
And what about our growing debt funded by the tax cut?
49
@Ahmet Goksun The idea behind the tax cut was to goose the economy and, as you stated, it is working. That is why the GOP is doing it. The problem is that goosing the economy during an expansionary period actually is inflationary (unlike during a recession). Yea, it is fun now, but we will pay for it later.
2
@Christopher - You assume taxes provision (federal) government programs. The GOP is under no such illusion. Remember "Reagan proved deficits don't matter" - Dick Cheney.
But just ask yourself where people get the dollars to pay taxes if the government doesn't spend them out into the economy first. Dollars don't grow on billionaires. Beardsley Ruml (a Fed governor) wrote "Taxes for Revenue are Obsolete" in 1946.
As for the "debt" -- that's more like bank debt than household debt. Your bank account is your asset, but to your bank, it's a liability (i.e. debt). Same thing, different point of view.
Imagine a group of depositors marching down to the bank to demand they make bank debt (their accounts) smaller! Not very sensible!
What do we call all the dollar financial assets circulating in the economy, then? Answer #1: Citizens' savings. Answer #2: National 'Debt'
Fan of R's or not...see how it works?
1
Speaking of what we know about GOP economics .. like it or not, presidential tenures are consequential. Look no further than GDP growth by party tenure ... specifically, annual growth in real GDP per capita (see BEA NIPA table 7.1).
Since 1929, the economy has produced ~ 3 times the growth under the Dems vs the GOP .. and that excludes the FDR high growth war years 1941 - 1944.
Indeed, the Dems are the party of growth .. not the GOP.
21
@JH
"...the party of growth..."
Maybe we should look at policies instead of party:
In October of 1929, Republicans declared their support for a 60% sales tax on imports called the Smoot Hawley tariff. The stock market tanked 36% in 5 days. That month, the downturn began.
In 1932, Hoover increased income taxes from 25% to 63% retroactive to the beginning of the year sucking funds and causing a bank panic. The 90% fall of the stock market was complete.
In 1948, Republicans overrode Truman's veto putting in place a tax cut that, by allowing income splitting, allowed women to enter the workforce without oppressive taxation. Thus, the economic growth of the 50s plus 6 of the highest quarters of growth ever registered.
In 1964, following the Kennedy tax cuts, economic growth was 6.5% and 6.6%.
Following the Johnson tax increase in 1969, growth was zero in 1970.
Following the Reagan tax cut, growth was 7.3% in 1984, the highest growth year in the last 65 years. And, Reagan's last six years of growth was 31%, the highest since the Kennedy tax cuts.
We can think of the 1990s as a time period where Clinton and Bush increased the tax rate from 28% to 39.6% or as an extension of the Reagan years with him having reduced the rate from 70% to 39.6%.
But, in 2000, the economy slammed into that Clinton tax increase and we have wandered ever since until Trump appears to have righted the ship.
5
@John Huppenthal - There is a difference in whose taxes are cut. Tax cuts for the Rich or more generally, income & wealth inequality, are bad for the economy. Economists have a concept called the velocity of money. It is the frequency that money changes hands in domestic commerce.
Here's an example. Suppose the government gives Scrooge McDuck a Billion for advice on the comic book market, If Scrooge puts the bucks in his basement, and forgets about it, that doesn't help the economy at all. That Billion has a velocity of 0. Also, if Scrooge loses a financial bet to Daddy Warbucks, and the Billion moves from Scrooge's basement to Daddy's, that is a change, but the velocity does not change because it is not a useful change. It doesn't affect commerce.
Money going to the Rich has a lower velocity than money going to the non-rich. The Rich spend a lower percentage of their money. What's a guy or gal who already has so many houses he can't remember how many & an elevator for his horse gonna spend his money on? The answer is he is going to use it to speculate.There is a correlation between inequality & financial speculation. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1661746 Speculation is bad for the economy. That money has a very low velocity. AND it increases risk which we have seen in 2008 ain't a good thing.
Since 2007, the velocity of money has plunged. https://fredblog.stlouisfed.org/2016/04/a-plodding-dollar-the-recent-decrease-in-the-velocity-of-money/
12
"Righted the ship"? The economy grew more in several Obama years than in any Trump year so far. Without trashing the environment or dangerously cutting financial regulations designed to head off another 2008-type crash. Why is growth the only measure that matters to conservatives? that's an insane priority.
6
Labeling " I am all wrong," "bad faith," and a range of personal characteristics, in a culture of enabled and sustained toxic, alt-facts, and elected and selected officials who operate, all over, at all levels, with personally unaccountable judgments and decision-making, by both words and deeds don't help anyone. More than words are needed to right wrongs. To repair errors which are repairable.
1
We know the Republicans are operating in bad faith. But the question remains - should interest rates be reduced? If we are below the price inflation target, why not?
@Elmer fudd
Isn't the real reason that Trump wants interest rates reduced is that he owes a lot of money?
9
@Charlesbalpha
It's that America owes a lot of money.
Unfortunately a huge amount of US citizens do not understand that the Republican Party opeartes in bad faith with regard to almost every policy. The Trump administartion has proved that. Trump is principally motivated by self-interest, cruelty and greed. Virtually every Republican in Congress supports Trump unqualifiedly. A reasonable person needs no graphs or charts to understand this basic truism.
Just for one example, look at SC. The civil war started in SC. SC gave Trump more than 70% of its votes and Senator Graham is now Trump's chief Confederate general. MAGA means make the US the way it was before Abraham Lincoln and the 13th, 14th and 15th amendments.
22
That party that doesn't believe in democracy manipulates voters to believe they must protect their 'freedoms' from Big Govt regulations ---which would actually protect them. Our democracy is stolen with much voter cooperation.
Our norms are set by limitless mega donor money in elections defined by our highest court as constitutional 'free speech'. A more gross distortion of democracy is hardly imaginable.
Media columnists avoid tracing this, even as they criticize the results. A country that turns its elections over to the elites for financing certainly won't limit elite profits and power making the rules.
Let's ask---why are many Americans so vulnerable to manipulation? We see True Believers and also opposition that’s been too weak.
How did our political culture prepare voters to believe in and vote for people working against their interest? And then be proud of how 'independent' they are.
Our politicians green lighted FOX News to grow huge after long standing anti monopoly laws for media were repealed by the GOP and Bill Clinton.
They also put destructive forces in motion by repeal of long standing sensible bank regulations.
So ultimately we got FOX as GOP state media, the 08 crash ruining lives, plus dominant Oligarch power. Sounds almost like Russia!
Do the Dems have the guts to break up big banks, big money elections and big media, to resuscitate our democracy? Seems too left wing, with columnists & cable news staying within limits of our norms.
10
@Meredith
Actually I don't think either party believes in democracy. The Republicans engage in voter suppression. The Democrats remove issues like abortion and gay marriage from democratic control when they don't think they can win on them.
Ergo, I'm an independent voter.
4
"printing money isn’t inflationary in a depressed economy."
This is the heart of Keynes and Krugman's economics. I am not sure what Krugman means, but wasn't the economy in Weimar Germany depressed in 1923, and in Zimbabwe in 1998, and in Venezuela in 2005? They printed money and made inflation worse, much worse.
The correct statement is printing money need not be inflationary when the economy is not constrained. By that I mean when the economy is free to grow.
In Weimar the economy was constrained because there was not enough arable land to grow food. 1,000,000 Germans staved to death during and right after WWI.
Look, while prices ARE proportional to the amount of money in the economy (times its velocity), they are INVERSELY proportional to the amount of stuff the country can produce. If you make more widgets, their price goes down. If the economy can grow, and the new money facilitates growth, then we will not get excess inflation regardless whether the economy is "depressed" or not.
Furthermore, if you do not print enough as in 1996 to 2008, then in order to conduct commerce, people and businesses have to borrow from banks which are short of money for reserves. In 2007, the big banks had 27 or 28 times the amount in outstanding loans as they had in reserves. The banking system would have cratered if the FED hadn't poured TRILLIONS into it. We would have had 1929 all over again.
It about time Krugman and the Keynesians get this right.
6
@Len Charlap
Weimar Germany's problem was that World War I had wrecked Germany's economy. The same thing happened in the Confederacy in the US when they were losing the Slaveowners' Rebellion. That's what causes hyperinflation.
1
@Charlesbalpha - If you mean the allied sea blockade prevented Germany from getting food from outside, sure. "wrecked the economy" is not a very precise statement.
3
@Len Charlap
All of the combatants had accumulated war debts, but the allies covered theirs by demanding "reparations" from Germany, and that's what wrecked Germany's economy -- you can't get blood out of turnip. Keynes observed the treaty negotiations and predicted that the unjust reparations demands would cause a disaster.
Maybe the Fed was never separate from politics and the economy has too many moving parts for anyone to consistently understand it let alone manage it correctly. Unfortunately for the Dems the game is presently going in favor of the Republicans. All of the money creation of the past decade currently working, supposedly innocently, to benefit economic growth, has not been non-inflationary, the inflation has been in stock prices, which everyone likes. Look out when stocks turn down and millions of retirees now living high on their stock market gains start applying for welfare!
3
"They didn’t really believe that a debt crisis and hyperinflation were looming. They were just against anything that might help the economy while a Democrat was president."
Party over country. How is that not treason?
21
There was never anything insightful about the Paul Ryan agenda--just a reshuffling of our Treasury to the most wealthy, coupled with a punitive attitude toward the poor.
And of course, no thought of consequences.
11
The GOP blocked additional stimulus spending when the economy needed it to pull EVERYONE out of the Great Recession and backed it when they had control of the Oval Office. Donald Trump is on track to add $9T to the debt from the end of FY
17 to the end of FY21. That's $500B more in four years than Obama spent in eight. What's this talk about an 'economic miracle'?
The government is borrowing from all of us to goose stock prices that only help a few of us...Looks like another transfer payment to me.
22
Paul’s argument is totally convincing. But I hope no one reading it still needs to be convinced. His assessment is as true for any other important Republican policy position. Insincerity is beyond dispute. Policy is politics, and only that.
So, let’s understand that substantive policy debate with this Republican Congress is pointless.
What else do we need to understand, to be realistic in dealing with Republican leadership? Lawlessness, shamelessness, unbridled aggressiveness, for a start. The House should not expect to hear from Barr or Mueller. (And Mueller might have anticipated how Barr would process his report.)
The consolation of being in the right (as to monetary policy or anything else) is inadequate to the challenge and is irrelevant to change, in current circumstances. The first step is a realistic appreciation of what Republican leadership has become. But we should all be there by now. Let’s focus on the next step, a practical strategy for change, as immediate as possible. Something useful in a street-fight, where there are no rules.
17
It's frightening at least to me when Buffet says he doesn't understand what's going on. Partisan politics might not be our biggest problem. And are things actually that going that well? Or is the the way the books are kept phony? I know to many people that were forced to retire early to be a believer.
Is it just me but is the party out of power always hoping for a recession because it will position them for a win? It doesn't matter who's in charge then. Still it's easy to find good news if you try. I understand climate models use the same science as economic models do. They might not be quite right either. True it could turn out to be worse but who wants to see the future anyway? The unbearable truth at least for some is if the economy continues doing what it does Trump may get a second term.
4
@JoeG
Climate scientists rely on science. They create models which have, as input, measured data. There are these things known as the laws of physics. Some laws, which we understand very well, have successfully sent astronauts to the moon. Those laws do not change depending on who is president.
Climate science is far more complicated than a moonshot, but models are still created based on scientific principles. That's why it has taken decades to come to a consensus--first, there was an identification of a potential problem due to our release of CO2. Then, there were theories and projections about what would happen. Data has been continually accumulated and now there is robust consensus in the scientific community. They may not be exactly right, but at least they're studying the problem based on science.
Economists have theories that are frankly all over the place. They create models and generate equations based on those theories, but they are not based on laws of physics. Look at this new "theory" being touted now called "Modern Monetary Theory." Economists are all in fits about it, yet some wall street types have bet big money by relying on some of its principles:
https://www.nytimes.com/2019/04/05/business/economy/mmt-wall-street.html
Don't compare what scientists do with what economists do. They're not "based on the same science." They may both create models, but they don't have the same rational basis.
12
@JoeG, despite what many believe, Economics is not a science. It requires study of history (of people and money) and sociology for the purpose of guessing what will happen next in any given situation. Using math does not equal being a scientist. Some economists are better at parsing and, therefore, predicting.
I truly wish climate scientists used the models of economics. Well, maybe not, they they'd be entirely useless for fighting against climate change.
3
@CF
I really didn't mean to insult the economist out there but I'm tired of climate science being compared with actual hard science. No scientist would claim the entire ice shelf of Antartica is going to slide into the ocean in one fell swoop. No real scientist would calculate the volume of ice the continent without considering the terrain. No scientist takes the worst case model and says it is fact especially when it never pans out.
Climate science really is as about as accurate as social psychology, political science, marketing and most importantly journalistic science.
Yes, it's getting warmer and man is part of the problem. There's good climate scientist out there trying to figure out what's going (just like an economist) but you're going to need some real scientist to get us out of this mess and not a propagandist.
The U.S. has now had a record 103 straight months of job growth. For some only the last 28 months seem to matter.
The CBO now states "Under current law, the federal government is projected to borrow an additional $12.7 trillion from the end of 2018 through 2029, boosting debt held by the public to $28.5 trillion...".
7
@LeBronc
I understand math is hard for liberals but the economy started accelerating in 2017 with deregulation and expected tax cuts. By 2016 investment, what really matters for both productivity and growth, had collapsed and it is what doomed Hillary in states that were starved for capital because of Obama's onerous regulatory policy on capital.
3
@SG
Thanks for your reply sir/ma'am
However according to BLS The last 28 months of the Obama administration created more jobs than the first 28 months of Trump. I'm not liberal by the way. I just wish folks were less partisan and would stick to the facts when they comment.
2
Dr K, I know you don't have a crystal ball, I mean you use economic metrics and hindsight to make predictions, but in light of a booming stock market - one that's still juiced by corporations buying back their stock (does that account for the stock price rises in itself?) - and the republicans making every effort to keep the juice flowing, how long do you think this particular recovery will continue?
Plus, if this debasement of judgement continues, then what sort of consequences occur from ignoring every single economic lesson become likely? Will hyperinflation occur again or will negative inflation a la the Great Recession come back?
I know it's a lot to ask and the uber-affluent pay huge sums to know, but I know I'm not the only one worried that letting the republicans and Russian-oligarch manipulated cyclops run the govt and monetary policy is going to have severe consequences.
When it comes to economic analysis your opinion is about the only one I trust! I'd be satisfied with an open ended statement with input from others you trust as well. Well, maybe satisfied isn't the right word...
11
Trump touts the economy and will use it to try to gain re-election. And the economy is good just now. But instead of trying to pick it apart (the gains are all going to the top 1%, etc) everyone not in the Trump camp should point to the success of the economy as proof that Keynesian economics works.
The economy is doing better today than it was under Obama (minimally) because we are putting it on the credit card, not because of any miracle by Trump. The Republicans oppose deficit spending when out of office simply because they know how much better our the economy does when no one cares about the deficit. And they don't want good economies when Democrats are in control.
The Democratic presidential candidates should just say this over and over again.
9
If you want to read an economic paper that was 100% completely and totally wrong read Obama’s Council of Economic Advisors’ paper from December 2013 that makes the case for an extension of unemployment benefits. This strong economy started in Q2 2014 thanks to Speaker Ryan not renewing extended unemployment benefits. Then a few months later fracking finally started bringing down the price of oil and BOOM!
6
This is why the discipline properly is called POLITICAL ECONOMY. The operation of the economy depends on the laws and regulations - or the lack of them, or the lack of enforcement of them - that is the province of legislators and administrators.
The notion of economic science is useful for Nobel Prizes, but the "scientific content" is merely a mess of statistics that have little relation to the mathematical theorizing that imitates science.
As an eminent econometrician noted almost 50 years ago, "for every theory there is a set of data, and there is a set of data for every theory. Science? Politics?
1
@San Ta
Yes, but perhaps each body of theory deserves an audit.
Supply side economics? How much of our 3.2% growth versus Europe's 1.5% growth is explained by taxation differences versus money differences?
How much did they increase their money supply?
1
@San Ta
Absolutely! I mean, why bother to study anything at all?
Eminent Econometrician is the name of my rock band, by the way! What a small world.
Yet despite Republican sabotage, preventing a quicker recovery, Obama got us from an unemployment rate of 10% to one of 4.6% in November 2016. Essentially, he drove in a score and loaded the bases. Along comes Trump, who stands at the plate and claims he hit a home run.
118
@Tim W
And he walked....
Remember the Crash of '08? Perhaps that was meant to be the Crash of '09? GOP manipulation of fiscal and monetary policy didn't begin in 2011. The bubbles built during the GW Bush years were possibly built in full recognition that eventually they would pop, and that politically if they popped in '09, that would be a good thing.
Similarly, its impossible to believe that TrumpCo doesn't know where his advocacy of fiscal debt and loose lending will lead, eventually. They are just going to do everything they can to make that happen after the next election.
26
In every way, the Republican party is no longer comprised of patriots, it's comprised of Republicans. In other words, those who espouse policies that will keep them in power, as opposed to policies that promote the greater good.
97
Everything that the insightful Dr. Krugman writes in this column is accurate but the real question is why would the Republican party do this to America? The only answer is that the GOP has an entirely different vision for America than the democratic party.
We have to accept that the elite of the GOP have vision for America where our country is ruled by the .1 percent for the .1 percent and their heirs. With the policies that Dr. Krugman has described, the main GOP goal is the increased concentration of wealth. According to The New York Times, the richest 1 percent in the United States now own more wealth than the bottom 90 percent. With this wealth and the help of the FOX news propaganda machine, this wealth has purchased more political power. Does any thinking person believe this is an accident? Most of the GOP believe that as Steven Moore clearly stated, "Capitalism is more important than Democracy." The GOP couldn't care less if the Russians helped them win the 2016 election because they don't believe in democracy as a system of government to begin with. There is no other explanation for why the GOP has supported the economic policies described by Dr. Krugman.
141
@Son Of Liberty
"...do this to America..."
Depends on your definition of "this".
Full time job creation in last 32 months: 5.5 million
Wages increasing at the highest level since 2007.
Debt falling to a smaller proportion of GDP.
Perhaps its not so bad as it seems.
2
@Son Of Liberty.... good sum up. That party that doesn't believe in democracy manipulates voters to think we must protect their 'freedoms' from big govt regulations ---which would actually protect them. Our democracy is stolen with much voter cooperation.
Thus no limits on mega donor money is defined by our highest court as constitutional 'free speech'. A more gross distortion of democracy is hardly imaginable.
Media columnists avoid tracing this, even as they lament the results. Krugman doesn't connect the campaign finance issue in his columns. A country that turns its elections over to the elites for financing won't limit the accumulation of elite profits.
Why are many Americans so vulnerable to manipulation? Analyze how our political culture prepared them to believe in and vote for people working against their interest? And then be proud of how 'independent' they are.
Our politicians allowed FOX News to grow huge after long standing anti monopoly laws for media were repealed by cooperation of the GOP and Bill Clinton. They also put destructive forces in motion by repeal of long standing sensible bank regulations. So we got FOX as the GOP state media, the 08 crash, and increased Oligarch power. Sounds almost like Russia!
18
@John Huppenthal I know that in the age of Trump and FOX , facts have a liberal bias, but: The median U.S. household wealth fell between 1983 and 2016 from $80,000 to $78,100 while the average wealth of the top 1 percent of households more than doubled, from $10.6 million to $26.4 million. According to a report from the Economic Policy Institute, In 1978, a CEO pay was roughly 30 times the typical worker's salary. Now the average CEO pay is 271 times times the typical worker's salary. The 400 richest people in the US are worth a combined US$2.68 trillion and Bill Gates, Jeff Bezos and Warren Buffett – own as much wealth as the bottom half of the US population, or 160 million people. I would ask everyone reading this: Do these numbers look like a fair and equitable distribution of the wealth that ALL of us as a nation have created? Does this help to create a healthy democracy?
25
No one is paying attention as the economy keeps setting records for lower unemployment, increased wage growth, and record highs on the stock market. The market evidently has its own "alternative facts" and sadly they portend a Trump strong economy that may keep all those disgruntled voters who pushed him to victory in the Electoral College in the upper Midwest still in his camp. G.O.P. economics may be wacko and Trump may be wacko, but it's his economy and he'll be boasting about it from now until November 2020.
2
@Paul Wortman
I hope you are wrong, and two factors seem to suggest you are. The first has to do with the legal decisions in Wisconsin and Ohio, that districts in those sates were gerrymandered, and must be redrawn before the 2020 election. Gerrymander suits are proceeding in several other states as well. Had Hillary won Wisconsin and Ohio she would be president now and Trump would have been consigned to the dustbin of history. The Electoral College can be made to work if districts are drawn fairly.
The second is the inversion of interest rates. That suggests real economic trouble is coming. Could be six months, could be a year or more, but interest rate inversion has always predicted recession. What is never clear is when, and I don't mean when, as in the next ten years. Economic lags generally cluster around 2-3 quarters. If you'd like to track interest rates that show this flattening, as I do, see:
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
6
The states themselves are a permanent gerrymander of the presidential election, but gerrymandering within the states has no effect at all on it.
1
@Will Schmidt perlboy
"... the inversion of interest rates...suggests real economic trouble is coming..."
Perhaps, perhaps not.
Rates inverted in 1998 and 1999 and 2000 both grew more than 4%.
Not much of an indicator.
Better indicators are the stock market and consumer confidence. The stock market is at an all-time peak and consumer confidence is at a 20 year high.
In an ideal world, mastery of economic theory and history would make PhD economists indifferent to partisan politics.
Yet, the first attribute that the laity values in seeking to understand any economist’s claim is simply this: is that economist a Republican or a Democratic economist? Yet, that question is rarely asked about ,say , an expert climatologist explaining the data on global warming or a virologist discussing the data about measles vaccination.
Either Economics is not an empirical science where theories are invalidated by observable facts or to achieve career advancement PhD economists continue to “sell” old theories invalidated by observable new facts to their Rebublican or Democratic party patrons.
Nothing illuminates the distinction more than the current tribal separation of partisan economists over the mysterious observable fact that the old reliable Phillips Curve has been invalidated by reality in the twenty-first century.
Genuine economic scientists would devote themselves to understanding why Phillips’ theory has failed and modifying his theory to explain our current reality. The rules of science insist that more is learned by explaining the exception to a theory than insisting that the exception cannot be true.
4
@Thomas
Pehaps the Phillips Curve was always an illusion. That surging economic growth was pushing people up into higher tax brackets and it was high taxation that was driving inflation as they pumped up money supply in a vain attempt to overcome the negative growth effects of high taxation.
Now, at the margin, for at least a while, like in the 1990s, we have reasonable taxation at the margin.
May not last for long.
@Thomas: Precisely. Are there Democrat physicists and Republican physicists? Let's face it, some "predictions" of astrologers and palm readers come true.
1
@Thomas
It is rarely asked of climate scientists because they are often assumed to all be liberals.
1
I too am old enough (60) to remember honest, critical thinking, compassionate Republicans who worked with Democrats to live up to the ideals of the Declaration of Independence, and attempting to be fiscally responsible, at least until the 1980s.
I grew up in a Republican/Libertarian house and am truly relieved that my mother and father did not live to see how the GOP partisan politics has caused one Constitutional Crisis after another.
Though I had my disagreements with the late Senator John McCain, I really miss his pragmatism and his attempts to reach across the aisle for the benefit of as many Americans as possible.
34
The panjandrums were complaining about a skills gap for 25 years. I always thought that they were signaling that certain people were born with a skills gap and were not trainable. These mucky-mucks were loathe to train people because of the expense yet their companies were immensely profitable. They abhorred paying taxes to fund schools that would provide them trained workers.
They used this so called gap to move jobs overseas and to get certain visas to bring in skilled workers to compete against Americans at a lower wage.
11
@Mark Smith - Companies didn't move overseas because of a lack of an educated labor pool; they moved because they could avoid onerous environmental regulations (hey, who wants contaminated groundwater?) and high wage rates. By themselves, that was not enough, but coupled with a change in how businesspeople thought ("our job is to maximize shareholder value" instead of "our company serves our community") coupled with incentives to reward short-term financial results for CEOs, the Great Exodus began.
5
@Ned I worked in finance. I could tell you name rank and serial number of executives that thought that way. Shifting labor costs was a major issue and still is. Think Indian call centers. Some of those people have masters degrees.
2
@Mark Smith: Schools don't provide trained workers; they atempt to provide basic literacy and counting skills. The universities turn out graduates in gender studies, critical race relations, ethnic studies, how to organize protests, etc., most of whom are illiterate in any subject related to innovation or production, which is why they wind up flipping burgers, mixing lattes and blogging.
Republican fiscal and monetary policy, designed to rob from everyone else to give even more to the rich, is an impenetrable foreign language to Trump voters, few of whom have any idea what Mr. Krugman is talking about. Education remains the key to building an aware electorate that asks the right questions about how the government steers the economy.
33
@Ivan Goldman. But no matter how well education is formed and offered, the juggernaut FOX misinterpreting and mischaracterizing it will continue to guide 50% of us down the dangerous path we’re racing on.
13
@Ivan Goldman
"...designedd to rob from everyone else..."
Perhaps, perhaps not.
In 2018, combined total employment of Blacks and Hispanics set ten all-time records driving their unemployment rates to the lowest levels ever recorded.
In 2018, wages went up faster than any year since 2007.
In 2018, wages went up faster for the bottom quartile of employees than any other quartile.
But, we believe what we believe, not matter the facts, eh?
@John Huppenthal The FACTS on income & wealth inequality grow worse year after year. The Federal Reserve reported last year that 40% of Americans couldn't cover a $400 expense.
So since Krugman's post 2016 election predications that the economy would collapse provided to be amazing wrong he now tries to explain that this isn't really a good Trump economy but actually a delayed good Obama economy that was sabotaged by the Republicans? That is weak even for someone as partisan as Krugman. Everyone regardless of political persuasion is surprised by the current solid growth and lack of inflation and the smart people like the current Fed Chair admit that and plan to be careful going forward. I will be the first to admit I found VP Pence talking yesterday about changing to a single mandate of maximum employment ignorant and scary. But that doesn't mean anyone was talking up inflation fears in 2010 was anything other than legitimate concerns based on historic data. Looking back were they fighting the last war?, maybe, but that wasn't a secret war on the Obama presidency.
3
@Todd
"...he now tries to explain that this isn't really a good Trump economy but actually a delayed good Obama economy that was sabotaged by the Republicans?"
Try reading the column. He's writing about conservatives politicizing fiscal policy based on who is president.
13
Secret war?
Nope.
They were completely out in the open about it.
And as Krugman noted, being wrong is one thing. Being wrong again and again and again and refusing to ever admit it, flipping views and theories to suit the politics, that’s another thingy altogether.
1
@Todd
Krugman admitted he overreacted to Trump's victory, which enforces his points about GOP hypocrisy.
A world class 21st century infrastructure would be worth a little more inflation. Bad wars of choice and military industrial complex boondoggles, not so much. Republicans and Democrats used to agree on some of the practical investments even if some deficit increases went along with accomplishing a clearly defined goal arrived at by consensus. Things could be so much better. More than printing money, bad investments devalue an economy.
I'm not tired of all the winning yet, and since I consider a head of government that tells the truth (and a media that does too) a large component of us winning as a nation, I would guess I could be waiting for quite some time. The biggest deficit we need to worry about is the deficit in honesty we have, starting with the executive in the White House.
26
@Scott
Unfortunately, Republicans and Democrats agree that spending $750 billion/year on endless wars and to the profit of the "defense" industry are a worthy use of our tax dollars. Fewer than ten Democratic senators and fewer than 40 Democratic Congressmen/women voted nay - against - the war budget last time around. "We" can't afford to adequately fund public schools, help students pay for college, or have universal healthcare or decent roads, but we sure can afford more war.
3
Could this be called fiscal tribalism? It illustrates a kind of us v. them mentality in which you want your team to score economic brownie points with voters, or at least make the other team forfit points and thus drop in poll ratings.
11
@Mary M: It isn't "brownie" points, but "greenie" points. What is the colour of your currency? As the lady said in another context, "It's the Benjamins, baby."
Listen Professor, the blue collar and farmer voters who vote Repub are the ones taking the Repub hits. Let’em have it. Yes, the Repubs are not Keynsians. They are Machiavellians. And their prince is the 0.1%. This is their philosophy: People should be able to keep the money they have earned and not have it given to those who didn’t. Never mind that inheritances, monopoly power and family connections enhance earning power tremendously.
41
@lester ostroy
"...the blue collar..voters are the ones taking Repub hits..."
How is that?
In 2018, the bottom quartile of compensated workers had the highest wage increase of any quartile.
In 2018, wages went up faster than any other year since 2007. Look at Krugman's graph.
Inflation was only 1.9%, below the Fed target.
3
@John Huppenthal
A record setting pittance is still a pittance. Rents and Oil continue to increase, wiping out any gains at the bottom.
Corporate MBA cheese paring continues, a nephew received the Maximum increase in his wages ($.60 an hour! Wow!) at not quite as big retailer, but the scheduled much hyped coming boost of the minimum wage for new hires to $13 an hour will be another boost. But incentive raises and step increases are NOT going to be grandfathers, so all he will receive is another increase to $13 an hour.
7
@OzarkOrc
"...record setting pittance is still a pittance..."
All progress is relative. Our median household income is $62,400 versus high tax Europe at less than $40,000.
We are moving relative to them, increasing at over $1,000 per year.
A $1,000 is not a pittance in any book.
Then with that less than $40,000 they have $6.75 per gallon gas and $0.20/kwh electric bills.
They have a pittance, we do not.
2
So to sum it up; it takes a Republican to ruin the economy and a Democrat to save it. Simple slogan. Democrats should try it on the electorate.
90
@Mark F
"...a Republican to ruin an economy..."
?
GDP growth in 2018? 3.2%
GDP growth in 2016? 1.6%
Real disposable personal income growth in 2018? $597 billion
Real disposable personal income growth in 2016/
$244 billion
Growth in full-time jobs in 2018? 3.1 million
Growth in full-time jobs in 2016? 1.56 million
5
You’ve cheery picked your years and conditions. 2009 - 2016 set the trend line that continues to this day. Obama inherited a Bush / Republican created near depression and with zero assistance from a single Republican and only resistance from most Republicans handed Trump an economy 8 years later that was booming as it has until right now. But this latest boom required an extra trillion in national deft that every republican was agains just 2 years ago
31
@AL
"Republicans created near depression..."
Perhaps, perhaps not. Rational expectations principals may enlighten us:
The traders on Wall Street make their billions by more accurately predicting the economic future a nanosecond before their competitors.
In 2008, Wall Street traders predicted that Obama would:
1) become president;
2) enact a huge tax increase on small business by forcing the Bush2 tax cuts to expire;
3) socialize medicine, increasing its cost by $1 trillion;
4) increase federal regulation to over 180,000 pages.
Easy predictions to make, Obama was promising to do these things starting in 2007 when he declared for president.
When Obama’s probability of becoming president went to 50% (Iowa Political Markets), the stock market crashed $2.5 trillion. As it went to 100%, traders crashed the market by $8.2 trillion.
Those predictions? All correct.
Obama's policies resulted in only 13% growth. The lowest growth of any two term president in U.S. history.
There will always be shocks like the housing market - a $6.2 trillion shock. In 1987, Black Monday hit Reagan with a 22% hit to the stock market, the modern day equivalent of a $7 trillion shock.
Impact on Reagan's economy? GDP growth in 1987? 4.2% GDP growth in 1988? 3.6% Reagan's economy took the shock in stride.
Obama's economy? GDP growth in 2009? -2% First president not to have a 3% growth year since Hoover.
In 2018, Trump broke Obama's trend.
1
Let's clarify the Economic Rules for Republicans:
1. Thou shalt always argue for income tax cuts for the rich and corporations, no matter what share of the wealth they have. The top 1% now have 40% of the wealth vs. 25% pre-Reagan. The top 10% own about 85% of the stock, so that's who gets the stock buybacks. Disregard any impact on the political system such wealth concentration may have, or on the reduced government services the higher debt involves.
2. Thou shalt argue against deficits when Democrats are in office, but for them when Republicans are in office. Ignore the $34,000 more per family in national debt we'll have by 2027 just due to the Trump tax cuts, given mainly to the rich when the economy was already booming.
3. Thou Shalt argue against stimulus (fiscal and monetary) when Democrats are in office, but for them when Republicans are in office. It's all about GDP when we're in power, regardless of who gets it. Never mind job creation was faster in Obama's last 27 months than Trump's first 27 months. Whether there is an existential fiscal crisis ongoing like 2008 due to Republican deregulatory philosophy is also irrelevant to this maxim.
4. Thou Shalt argue against regulation, even when it is essential to avoid monopoly/oligopoly and externalities like pollution. Never hesitate to favor capital over labor.
With rules like that, what can go wrong?
152
@David Doney
5. Thou shalt argue against anything -- anything at all -- that might benefit rank and file workers, especially if those policies would benefit the country as a whole. Examples of things that might benefit workers include but are not limited to: unions, higher wages, unions, eligibility for overtime pay, proper classification as employee vs. contractor, unions, pensions, universal healthcare, unions, higher education, etc. The list goes on and on. And did I mention unions?
Instead, workers must be seen as "takers" and their duly-earned wages must be deemed to be theft from stockholders. Thou shalt never deviate from this vision.
36
@David Doney
How about a more simple rule? That we look at the economy from the standpoint of the poor?
in 2018, ten all-time records were set for combined total Black and Hispanic employment.
In the last 32 months, 5.7 million people have been rescued from welfare dependency.
In 2018, wages went up faster than any other year since 2007. Look at Krugman's graph.
3
@John Huppenthal
The unemployment rate has been improving since October 2009, for all ethnic groups. So giving credit to Republican policy for that is misplaced.
If the poor are your concern, how about the 1-4 million lower income people that have lost their health insurance since the end of 2016, due primarily to Trump's ACA sabotage? I quote the range as CDC figures are much lower than Gallup and other private organizations. 2017 was the first year since 2010 that the number of uninsured increased.
Food stamp (SNAP) usage peaked in 2013 and declined in 2014, 2015, and 2016 before Trump ever took office. I'm not sure what your definition of welfare dependency is but that trend has been improving for awhile.
Regarding wages, real wage growth was 0.4% in 2017 and 0.6% in 2018, versus 2.2% in 2015 and 1.3% in 2016. The nominal wage gains have been offset by higher inflation, mainly higher gas prices.
Let's give Trump credit for the one thing he's done right: Ban bump stocks.
25
I don’t know Dr. Krugman, the economy is better, jobs are everywhere, yes , even the bad ones are raises the hourly,
It’s still better to own your own business, always has the old saying it’s better to own your business than to work for someone is still true today.
We control the worlds currency,
That most lethal military the world has never really seen.
Trump is the sign of the times, so people need to catch up to the times, instead of wasting time complaining about him, I don’t think he going anywhere till Jan. 2025.
5
@Independent voter
"We control the worlds currency,"
Trump's threats to our allies and others are leading them to consider moving to alternatives to the dollar.
So, among the long list of Trump long-term destructive actions, he is undermining our control of the worlds currency
21
@Independent voter Please note that the economic growth that we are experiencing was started by solid Fed involvement under a Democratic President and Congress. Have we heard one word of thanks to those who primed the pump for the economic growth we are currently experiencing.
Who or what will the GOP and Trump blame if a recession, which has a 30-40% chance of occurring in the next 18 months according to research, happens before 2020 election?
13
@Independent voter
"I don't think Trump is going anywhere until January 2025."
May not even leave then. Ivanka and Jared have another 5 years of prep.
2
Paul, you are on the money about Moore being dumped for the wrong reason. Similarly, today the president of Brazil was chased out of New York for the wrong reason. Being homophobic was just one of his problems. Feminist and LGBT activism are the two political forces that command attention, especially from elite media. If only economic inequality and environmental degradation could develop effective political responses.
18
@Thal
The Favela goes ignored. And when this country becomes like Brazil as the Republicans wish it to be and a tin shack city emerges in the hills surrounding the Golden Gate the elite will conclude they have a right to be there and their world will be good.
I am old enough -- in my 70s -- to remember when there were at least some Republicans who had honest, legitimate disagreements with Democrats over policy, but those disagreements were based on differing priorities and views of what government should do. (I don't think I dreamed this!) Of course, both sides wanted to win elections, to be in the majority, and sometimes used disreputable methods of getting there, but there was more than token acknowledgement of the common good. Today I can't name even a handful of GOP officeholders who'd fit that description. I despair of the future for the middle and lower classes -- and, in fact, of the Earth -- as long as these people rule the Republican Party.
202
@karen b.
"as long as these people rule the Republican Party."
Correction: They are the Republican Party.
You know Paul I used to look forward to reading your column because more times than not I would learn something. Since Trump's been in office you've taken a position of commingling economic policy and politics. How about going back to writing a column without any reference to politics or political figures, just stick to the economy and the facts.
3
@Kurt Pickard The point Dr. Krugman is making here is that the Republicans have completely abandoned objective monetary policy. For them it is now politics everywhere, in everything, at all times. Therefore it is no longer possible to discuss monetary policy without discussing politics
And what is the Republicans/monetary political goal?
To protect the interests of the 1%. Period.
20
@Kurt Pickard
If you think the economy operates independently from politics, well, I've got some oceanfront property in Ohio I'd really like to sell you.
7
The sad thing is it might be waterfront sooner than you think.
8
If the economy slows over the next year, we have a much better chance of ousting Republicans in Congress and the White House. Our economy is driven by consumer spending, so I'm cutting back on spending. Spend less, slow the economy, and vote.
21
@GinnyV
Sorry to disappoint you but this growth is driven by INVESTMENTS thanks to corporate tax cut. Meanwhile, please continue spending less; it will make more capital available for investment (and growth). I am sure you are not dumb enough to keep your money under the mattress.
@GinnyV
Sorry to disappoint you but this growth is driven by INVESTMENTS thanks to corporate tax cut. Meanwhile, please continue saving less; it will make more capital available for investment (and growth). I am sure you are not dumb enough to keep your money under the mattress.
These would be the very same republicans that Joe Biden thinks he can trust to work with him in a bi-partisan fashion should he be elected president.
He seems to have forgotten everything that happened between 2008-2016.
191
Ever occur to you that maybe Joe ain’t forgot squat, but just thinks that he’s putting out the right message for right now and that it’s important to at least try to work with people who’re not going to go poof and disappear because you don’t like them?
12
@C Feher
And perhaps it was "work across the aisle" Biden, as vice president, who told President Obama to "work with" the Republicans( who had vowed to make him a one term-er), with such disastrous results.
4
@Robert, Obama was well-intentioned when he thought the GOP might cooperate in a bipartisan way, but he was mistaken. They take no prisoners. They cheat and lie and obfuscate and are proud of it. Biden was there, for 8 long years of the GOP blockade. Why play nice with them now?
7
Dr Krugman...
This is not news. Quite a few economists have spoken about similar Republican agenda.
I have a question.
- Please explain how the economy has improved- as they say- but you don’t see any change for the middle class.
- And why is no one talking about the %age of permanent job vs. temporary jobs in this decrease of employment rate.
Explain that to us.
For the first time in many years, I watched Fox yesterday with Charles Hurt and Thiessen from WP (I can’t believe WP has this man on their staff!) discuss economy and they made me nauseous watching them.
Their glee had a hateful wicked edge.
27
@Ash.
Productivity and GDP has improved a yuuge amount, but wages have stayed more or less the same for a very long time. Since the middle class lives on wages....
19
@Jeoffrey
"..wages have stayed the same..."
Maybe not.
Look at Krugman's graph. Wages increased more in 2018 than any year since 2007.
4
@John Huppenthal
Absolutely, willfully disingenuous. Real wages and actual spending power have dropped since WWII when you factor in basic expenses vs spending power. But that would be fact based so discardable??? All of your data-point cherry-picking magically seem to ignore reality.
https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/
https://www.theatlantic.com/business/archive/2012/08/60-years-of-american-economic-history-told-in-1-graph/261503/
https://www.forbes.com/sites/patrickwwatson/2018/09/25/real-wage-growth-is-actually-falling/#3476e4707284
https://www.brookings.edu/blog/up-front/2018/10/04/if-real-wages-arent-rising-how-is-household-income-going-up/
2
Trump's inclination to feed sugar glazed donuts to a hot economy with huge corporate tax cuts, big spending increases and demands for lower interest rates is not so surprising, considering his track record of business failure, default and bankruptcy.
But the willingness of the GOP to rationalize and accommodate his impulsive behaviors says a lot about the voters who put them in office, many of whom think Trump is their savior.
These folks are not deterred by facts, like current weakness in manufacturing and farming while the white collar sector is booming, feeding off the economic sugar high of tax cuts and driving the US trade deficit to all time highs. (Recall that Trump campaigned on trade deficits as evil, though economists say they are more a function of strong US consumer demand).
Trump's much touted trade agreement with China will do the most to help the tech sector and foreign investment, while goods production will simply shift from one Asian country to another in response to revised trade regimes.
Meanwhile, some states are stepping up to challenges of climate change, infrastructure, environmental protection, living wages and the shift to the economy of the future, increasingly ignoring the disaster in DC.
41
@Look Ahead
"...sugar glazed donuts..."
Maybe, maybe they were chunks of meat.
GDP increase in 2018? $985 billion
Deficit in 2018? $780 billion
Net $205 billion
GDP increase in 2016? $455 billion
Deficit in 2016? $580 billion
Net negative$125 billion
Debt as a proportion of GDP fell $205 billion in 2018.
Debt service is only 1.6% of GDP less than half of its peak in the 90s.
2
What Krugman and other economist are forgetting is the advancement of technology dampening inflation. While wages will stagnate due to robotics the true inflation is the constant grab of increased taxes and so called infrastructure investments. These investments are nothing more than taxes discussed as fees, fines, etc. Put those together and clearly ones disposable income cannot keep up.
3
@Linc Maguire
"...wages will stagnate..."
Maybe, maybe not. Wages went up 3.2% in 2018, inflation only 1.9%.
Where wages appear to be stagnating is high tax Europe. Our median household income is $62,400, theirs? Less than $40,000.
@John Huppenthal
Gosh, funny how, for those seemingly lower wages, those same Europeans consistently score higher on nearly every quality of life measurement conceived of. Oh wait, their real spending power is actually higher and they don't go bankrupt if they get cancer.
Evidence Mr H. You're ignoring reality. I'm not married to any political model but if our goal is A and we see A well done buy others yet claim we must do XYZ instead we're ignoring models that work and getting worse results for just so we can say doing it our way was right. Just far worse results, but gosh darn it we must be right... We have higher rates of poverty than Europe. What we're doing now is schizophrenic and ignores reality.
1
So with the economy as with everything else. If Democrats are for something, no matter how morally right or objectively true, Republicans will be against it. Democrats want to take serious action on climate change, so Republicans oppose it. Democrats want health care coverage for everybody, so Republicans do everything they can to take away the ACA. The Democrats want to take strong measures to prevent foreign interference in US elections, so Republicans drag their heels and say it's no big deal. The Democrats want to uphold the constitution and the rule of law, so Republicans support a crook as president who is doing everything in his power to subvert both. America doesn't have a two party system anymore. Not when one of them is doing everything it can to sabotage it.
163
@Bob Chisholm All true, except when it comes to white nationalism/anti-Semitism. Trump supporters and Republicans are not for that just because Democrats are against it, Republicans are for it because they actually, actively are white nationalists.
2
I had the pleasure, or misfortune, of studying economics in a few college classes, and the Republican nonsense in screaming about monetary policy in cryptic terms, trying to confuse a tired, overworked and underducated population has been a force against which I cannot argue.
20
As much as I applaud Dr. K and agree with his analysis, I fear that all our analyzing and handwringing is more fodder for the beast. The beast is energized by our feeble efforts to explain its behavior and our perplexed amazement at its perfidy. We frame our analysis under the assumption that people like Moore and Trump and the rest of the gang are rational actors and all they need is to be shown the obvious error of their thinking.
But the assumption of rationality is wrong, and all our explaining is wasted on them. They have fixed on a different metric, they are feeding on dark matter, which we who still operate in a realm of reason cannot see nor understand.
I fear there is no way to appeal to these people, their disinterest in truth and principle is complete and their delight in our discomfort sustains them and encourages them to ever greater feats of illogic.
Theirs is a revolution of irrationality, and our natural response of reasonableness is in fact counterproductive. We really need to find a different way of dealing with this unfolding disaster.
42
@T Bucklin
I think you're confusing rationality with honesty.
They are completely rational -and dishonest. They know what they're doing -and don't care.
1
As a friend of mine, a Washington political reporter and Republican himself, once said,"To reporters, and in front of a camera, Republicans talk about policy. In the elevators (of the House and Senate office buildings) all they talk about is winning elections - who can beat who. That's all they care about."
104
@BruceM So true. They see the world as a zero sum game. To the winner goes EVERYTHING.
3
@BruceM
You only get to set policy if you win elections.
Maybe they are talking about policy all the time?
@BruceM
Right now it's all I really care about too.
2
"They [Republicans] were just against anything that might help the economy while a Democrat was president.'
That may be the understatement of the century.
181
All well and good. Now distill this information into repeatable campaign talking points digestible by the working class, one which continues to vote against their own interests due to the far superior marketing machine of the GOP. Otherwise at best you’ll get glazed over eyes, and at worst you’ll hear the familiar accusations of elitism and distain for education.
20
Spot on Dr. Krugman. The republican's who support Trump, Pence, Ryan et al do not care one bit about their candidates flip flopping on fiscal policies. They support republicans who make them feel good about their racism and/or Christian agenda.
30
Preaching to the choir, but it's always good to get proof. The republican party is hazardous to democracy and to our health.
27
The entire Republican strategy for eight difficult years was to sabotage any and everything Obama would try to accomplish. The Republican leadership swore a blood oath to this effect the day Obama was elected. The GOP worked hard to stonewall every action Obama took for the benefit of the American people.
The Republicans, through their racism-based obstruction of the Obama presidency, paved the way for Donald Trump. Trump built his political career on anti-Obama Birtherism.
One can discuss rational economic policy, Keynesian or otherwise. In 2016 and in the years following, the Republicans have abandoned fiscal conservatism for outright Trumpist white supremacy and anti-immigrant nationalism. Republicans have become a disgrace to the two-party system and no philosophical analysis can justify their rejection of of our Constitution and the rule of law.
Trump is the face of the Republican Party and the super-rich Republican donors who support Trump and who benefit the most immediately from massively slashed taxes have demonstrated an alarming lack of patriotism. They will pay heavily in the long run because Trump can only bring more governmental chaos, the anathema of stable financial growth .
38
@Jefflz
"...sabotage..."
Maybe, maybe not.
The stock market didn't hit a new peak until after the Republicans took control of the House of Representatives in 2010.
@John Huppenthal
A sense of humor is very important in these difficult times.Thanks!
6
Great analysis. Unfortunately those who vote Republican either don’t understand or don’t care.
32
@Kevin
I'm going to go with "don't care".
Now the question is... do they understand that they are voting against their own interests when they are blue collar Republicans?
The reality is.. regardless of party affiliation.. the voter that votes a party line no matter what... is not the smartest of voters.. because they are simply being manipulated as feedstock for voting a party agenda no matter what that agenda may be.
There are people that actually look at any potential political policy or bias objectively and critically to determine if said policy or bias is in their best interests or not. These people are not typically easy prey for party rhetoric or conflict politics.
Then there people who work primarily from the reptile part of the human brain and simply vote tribal in classic US vs THEM conflict politics. These people are extremely easy prey for the political machines to manipulate to vote tribal no matter what. They get a ring put into their nose, metaphorically, and are led around by their chosen political party no matter what. And then we have Trumpites... who insert Trump as their political party de jour and let him lie to their face and convince them that what matter to them is only what matters to Trump.
2
@Kevin
I'm going to go with "don't care".
Now the question is... do they understand that they are voting against their own interests when they are blue collar Republicans?
The reality is.. regardless of party affiliation.. the voter that votes a party line no matter what... is not the smartest of voters.. because they are simply being manipulated as feedstock for voting a party agenda no matter what that agenda may be.
There are people that actually look at any potential political policy or bias objectively and critically to determine if said policy or bias is in their best interests or not. These people are not typically easy prey for party rhetoric or conflict politics.
Then there people who work primarily from the reptile part of the human brain and simply vote tribal in classic US vs THEM conflict politics. These people are extremely easy prey for the political machines to manipulate to vote tribal no matter what. They get a ring put into their nose, metaphorically, and are led around by their chosen political party no matter what. And then we have Trumpites... who insert Trump as their political party de jour and let him lie to their face and convince them that what matters to them is only what matters to Trump.
When our public policy is bent to advance the power of a political party, even if that party clearly knows the policy is wrong for the nation, we have entered banana republic land. That is where failed democracies go to die.
I do not think Trump's victory was an aberration. Demagogues like Trump, Chavez, Maduro, Bolsonaro arise when democracies become so corrupt that people lose faith in democracy itself. In my view, Washington became so corrupt that Trump or someone like him was inevitable.
Trump's reign is a soft putsch. The only way to prevent our slide further away from a functioning democracy is not a restoration of Washington's corrupt 'good old days', because that is what made Trump possible. We need a radical change of course.
17
lying has been GOP policy on all fronts since Reagan.
word
19
@bill b
To be fair... all politics is partly lies or distortions for political convenience. Which is not to say that all politicians like like they are channeling their inner Trump.. but rather that politics generally relies on conflict mechanics between parties.. and so there is ALWAYS spinning at play.
I will however grant to you that Republicans are more pervasive and less discriminating at the political lie machine. Their tribal followers seem to revel at being led by deception.. and very often lack application of any critical thinking skills to determine if a lie or distortion is worth following.. and just follow because of the political banner attached.
What do Hoover (Great Depression / global), Bush 1, (S&L crisis) Bush 2 (Great Recession/ global depression) have common? Republicans all. Financial collapse and the financial ruin of millions of Americans.
What do Franklin Roosevelt, Bill Clinton and Barack Obama have in common? Democrats all. Financial rescue from the Republican disasters and Restoration of US financial solvency (Clinton left office with a surplus!! Only to be pillaged by Bush2 and Cheney for their greed no matter the cost of human life.)
Why isn’t this plastered on every highway billboard across the nation? Why isn’t the political affiliation of every corporation chairman, CEO and board members that abandoned US manufacturing jobs to China public knowledge? And their names and political affiliation plastered on billboards across the heartland?
90
@Humane
Good recitation of mythology. Maybe true, maybe not.
Maybe rational expectations theory would provide a different insight to understand economics.
The traders on Wall Street make their billions by more accurately predicting the economic future a nanosecond before their competitors.
In 2008, Wall Street traders predicted Obama would:
1) become president;
2) enact a huge tax increase on small business by forcing the Bush2 tax cuts to expire;
3) socialize medicine, increasing its cost by $1 trillion;
4) increase federal regulation to over 190,000 pages.
Easy predictions, Obama promised these actions starting in 2007 when he declared for president.
When Obama’s probability of becoming president went to 50% (Iowa Political Markets), the stock market crashed $2.5 trillion. As it went to 100%, traders crashed the market by $8.2 trillion.
Those predictions? All correct.
Obama's policies resulted in only 13% growth. The lowest growth of any two term president in U.S. history.
There will always be shocks like the housing market - a $6.2 trillion shock. In 1987, Black Monday hit Reagan with a 22% hit to the stock market, the modern day equivalent of a $7 trillion shock.
Impact on Reagan's economy? GDP growth in 1987? 4.2% GDP growth in 1988? 3.6% Reagan's economy took the shock in stride.
Obama's economy? GDP growth in 2009? -2% First president not to have a 3% growth year since Hoover.
Is this why Biden is making apologies for his GOP buddies?Just in case he gets the Dem nomination, and just in case he beats Trump on election day, he hopes to have the co-operation of the GOP in enacting his agenda. Lots of luck, Joe! Do you really think they'll treat you any better just because you're white? SAD.
17
@Del - Really lame argument. Yes the GOP is bankrupt, but they hold a ton of seats in Congress, and that is not going to undo itself because you dislike it. Bipartisan effort is needed for all kinds of things, and Biden's not the only one who sees it. Kirsten Gellibrand -- a progressive's progressive -- is running on her record of bipartisan work in Congress. How did we get the ACA, Don't Ask Don't Tell, (and the list goes on)? Because hard-working Congressional Democrats got just enough R's to vote the interest of the country to get the thing over the line.
Considering Dr. Krugman has been wrong about almost everything concerning our economy it is stunning that thinking people even take him seriously anymore.
Krugman lost credibility when he allowed his politics to blind him to economic realities.
And it must kill him to realize our President and his economic advisors are far more competent than he.
3
@LarryGr
"And it must kill him to realize our President and his economic advisors are far more competent than he."
With voters like this, how can the Repub snake-oil salesmen lose?
1
what an argument! I really really believe you.
During the Bush years there was Karl Rove now the whole Republican party is Karl Rove.
26
The bottom line is that the GOP creates, adopts, propounds, and pushes policies that have nothing to do with the public good and everything to do with their own venal purposes. Those purposes include but are not limited to gaining and holding power for power’s sake, ferreting out ever new ways to give leverage to the very rich, and, conversely, disadvantaging everyone else. A political party should at least pretend to have the welfare of the American people at the core of their reason for being. But that mask fell off the collective GOP face years ago. Now it’s even added the welfare of adversarial foreign governments to its “to do” list. If, some day, we can ever get our government back from Trump and his international crime syndicate, a newly revived justice system should haul up the GOP and its shills on RICO charges. Until then, everyone, hold on to your wallets.
17
I would add one word. Keynesians were proved right again. Or maybe two words: yet again.
10
@dairubo
Perhaps.
The deficit was $120 billion bigger than GDP growth in 2016 yet growth was only 1.6%, $580 billion, $280 billion real.
In 2018, the deficit was $220 billion smaller than GDP growth yet growth was 3.2%, $985 billion, $680 real.
Keynes is not much help to understand those numbers.
Dr. Krugman, you have been repeating this truth for so many years. I don't know how you keep your head from exploding. It's hard to even imagine how Republicans rationalize this. Thanks for keeping it up!
7
The Federal Reserve System and the national debt, as currently understood by Trump and his grotesque klatch of merry economic advisers.
A man staggers out of a bar drunk as he could be.
Five minutes later he returns and demands another drink.
The bartender needs to give it to him.
6
You would think that people whose predictions are wrong time after time would be discounted/ignored afterward, but media like the NY Times insists that if we hear from Krugman/Reich/et al then we also have to hear from a Moore/Trump/Mnuchin/et al as well. Its bothsiderism at its worst, and explains a lot of why these opinions are in respectable outlets instead on nutso websites in the corner of the internet, where they belong.
TL:DR: When you find responsible fiscal conservatives who apply the same rules to themselves as to Democrats, let us know.
6
“Sometimes, when I try to understand a person’s motives, I play a little game. I assume the worst. What’s the worst reason they could possibly have for saying what they say, or doing what they do? Then I ask myself, ‘how well does that reason explain what they say and what they do?’”
- Noted Philosopher / Entrepreneur
Proposition: Today's GOP puts Party over Country and Power over Democracy.
Does this explain their action?
- Economic sabotage during the Obama administration
- Turns a blind eye to a hostile foreign power's continued efforts to undermine our democracy
- All in on voter suppression tactics
- Full support for authoritarian President despite clear ethical, emotional, and intellectual unfitness
- Stocks judiciary with judges who support expanding political power of corporations and wealthy and turn a blind eye to voter suppression
Party over Country and Power over Democracy. Is there a better explanation for the actions of the GOP?
No. There is not.
21
Your columns illuminating politics through the lens of economics are a public service and a gift making sense of the senseless. One can only hope your words somehow reach those with gut knowledge that every Republican lie must be true.
11
The final, single word on GOP Economic “ thought “ : Kansas.
Period.
22
@Phyliss Dalmatian
Yes, another instance of Kansas "bleeding." Maybe Kansas is the nation's template for self-destruction.
1
The republicans smell in Trump an opportunity to eviscerate our constitutional form of government and seize permanent power. With that goal in mind, all stands from the past on matters of policy get stashed in the trunk (nevermind the backseat).
13
If nothing else, this article implicitly demolishes the myth that we have a free market economy.
When the government has a monopoly on money and currency, and can set interest rates - the point about the governments ability to raise or lower interest rates is repeatedly emphasized here - that is not a description of a free market economy.
End the FED, and let private, competitive currencies fill that gap.
Get the government, under the guise of the FED, out of the money business.
1
@DennisG A horror show. For people with extremely short memories. Another Ayn Rand acolyte?
A whole political party untethered from moral and ethical concerns.
Priceless...
11
Another great Krugman column exposing Republican hypocrisy. (No, I am not his Dad.)
11
1. Well, you COULD read that graph as demonstrating that Republicans consistently want interest rates raised when the economy’s in the tank, as this makes life more expensive and credit harder to get for the little people, but they want interest rates lowered when economic times are good, as this makes credit and life easier for the wealthy.
That would of course be nuts, but it’s sure what it looks like.
2. Or, you could take Charles Sykes’ essay from a couple years ago truly seriously—Trumpism is really the kind of nihilism that Nietszche talked about. You know: the GOP doesn’t just want lib’ruls contradicted, they want it all burned down. Why? Because they no longer believe in anything other than their own beliefs and their own hatred.
“More substance in...{their} hatreds, than in {their} loves,” y’all. Economic policy, patriotism, conservatism, Christianity—it’s just stuff they say, stuff that’s rotted out from within.
Question is, what’s left in there?
11
Given that monetary policy is always somewhat political, the example of monetary sabotage is beyond the pale.
It would be most welcome if some of the presidential candidates on the left were to pursue a monetary policy that would combat the looming climate catastrophe. The way that this can happen is to transformed the unjust, unsustainable and, therefore, unstable international monetary system by basing it on the carbon monetary standard of a specific tonnage of CO2e per person. Such carbon-based international monetary system would lead to a transformed global governance system that would be socially, economically and ecologically sustainable. The details of the conceptual, institutional, ethical and strategic dimensions of such system are discussed in Verhagen 2012 "The Tierra Solution: Resolving the climate crisis through monetary transformation" (www.timun.net.)
States an outstanding economist and global warming activist about this Tierra global governance system with its balance of payments system of both financial and ecological debts and credits: “The further into the global warming area we go, the more physics and politics narrows our possible paths of action. Here’s a very cogent and well-argued account of one of the remaining possibilities.” Bill McKibben, May 17, 2011
6
I fight shy of Total Solutions, but I will say it might be worth looking into whether the real reason inflation has been staying low is that we’ve got to a point where we’re seriously selling stuff without pricing in the costs of the environmental costs.
In other words, we’re enjoying the economic equivalents of pumping all the fossil water out of the Ogallalla Aquifer. “Hey, look how cheap water is!”
Which is great while it lasts. Unfortunately, in effect we’re hiding what we’re spending in the future. Hey, here’s a free gratis TED talk title:
“Consumerism and Time Machines.”
Don’t feel too bad about swiping it. I’m taking the notion from an old SF story about the wormhole garbage disposal....which is great, providing you don’t happen to live under the other end of the wormhole.
5
I remember Prof Krugman arguing against the "austerity" debate and hyper-inflation warnings. Fortunately, Obama, Geithner and the Fed paid attention.
Republicans--Mike Pence, Paul Ryan, Stephen Moore et al--would never, admit they were wrong then. And where are they now ? Still off in the weeds.
Trump never ceases to cherry-pick and take credit for good stats in the Obama legacy economy, never admitting the GOP drove the numbers into the Bushes during the housing/mortgage/credit crisis in 2008-9, or the Savings and Loan debacle before that.
Please continue to keep us on the level.
6
If voters fail to hold their representatives accountable for their proven and blatant "errors" (lies to serve their donor masters) why should the reps care about the accuracy of anything they say? This reality has culminated in the election and ever-growing power of Trump- the more he lies and the bigger his whoppers the more power he accrues.
I've never had an extremely flattering view of my own species, at least since the age of 12, when it became apparent that adults were almost as childish as children (just somewhat better actors), but the politics of my own country almost makes me welcome the extinction we seem to be welcoming with open arms. Certainly wouldn't be the greatest tragedy in the universe this hour.
I'm not saying we are without hope, but we certainly have a very tough row to hoe to transform our culture and therefore our species into something sustainable. Those with the long and wide view need to make themselves heard- keep trying Paul.
12
Twenty-five hundred years of Western culture and philosophy has changed nothing. When Solon was called upon to lead a failing Athens and called for the elimination of debt that had enslaved Athens best and brightest Athen's wealthiest still had sway.
Economies are designed to suit the interests of the aristocracy and priesthood. Unfortunately all too often the management picks designers who lack understanding of complexity and unintended consequences.
Some of us worry as we go to bed that our economists are too good and this time economic collapse will happen too late save our biosphere. I thought everyone was taught those ancient North African cities were destroyed because they exhausted their resources.
When did economics reach number one with a bullet in our hierarchy of needs? Even Ayn Rand might admit frolicing naked in the woods was more important than the monuments to Ozymandias.
4
Carthage didn’t go bye-bye because Carthage had exhausted its resources. Carthage went bye-bye because Rome wanted them.
And economics may be the dismal science, but Marx was right: from about the time we fell out of trees, we’ve been passing valuables around.
3
@Robert
Thank you Robert. Cartage was not a self contained isolated island it was a center of trade and commerce.
I watched the Peterson /Zizek debate Marxism vs Capitalism debate billed as the debate of the century which turned out to be a love fest between two brilliant human beings grateful for reasoned intelligent feedback in a world of 30 second soundbites.
I was in DC and watched Robert Costa interview Mark Meadows. Mr Meadows spoke what sounded like English but made no logical sense but seemed more an amalgam words from 30 second sound bytes put together to sell product but unfortunately for us the chairman of the so called Freedom Caucus need not issue a warning caveat for his Snake Oil.
Thanks to the internet we can still hear Karl Hess III speak the words he wrote for Goldwater. We are at the culmination of the Empicism/dogma debate that has been the core of Western Civilization for 2500 years and I fear we scientists will lose again and this is the final debate. I fear the dismal science is not a science but a theology whose time as come.
John Ralston Saul's The Comeback talks about Canada's European Invaders making Potlatch illegal. It isn't the passing around goods that is bad. Passing around "valuables" is as fundamental as breathing. It is the core philosophy and understanding of why we pass around valuables that has made debating Marxism and Capitalism so instrumental to our self destruction.
2
@Robert
Indeed another thank you. I spent a week in DC without email, without computer and all the other connections my internet offers. I rested my brain and got to enjoy all the other riches our unbelievably successful society offers. I got people to smile.
It is only the need for affirmation that roils your great nation that seems so set on felo de se.
I am amazed that Charles Dickens a 160 years ago recognized and wrote
"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness. It was the epoch of belief, it was the epoch of incredulity. It was the season of Light, it was the the season of Darkness, it was the winter of despair, we had everything before us, we had nothing before us, we were all going directly to Heaven, we were all going direct the other way."
Tale of Two Cities 1859
I like to believe it was in Old Montreal that Dickens wrote Tale of Two Cities that started with the above quote written in the language style, the poetry and indeed the philosophy of those that wrote the bible.
Cardinal Richelieu some would argue is the originator of the Age of Reason has his name everywhere in this Province. I often wonder if reason has not cost us our souls.
Why are the richest people that ever existed are so needy. I wonder why we are so discontented with our wealth that we are jealous of those who simply wish a little less than we already have?
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Now we know why Republican economists haven't admitted that they were wrong in the past. They weren't wrong, they knew exactly what they were doing.
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Worst of all, in two years time, the economy or the NYSE may nosedive down, after having been artificially superfuelled by Trumps'tax cuts for the rich. That would be just in time for the GOP to lay the blame of the donwturn on the coming democrat president. And most electors will fall for it, even if it was the GOP that are currently laying down the seeds of the next economic crisis.
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@SJP, this is a very real risk and the potential next gale on the horizon in the perfect storm through which we are currently struggling.
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@SJP
It sounds like a conspiracy theory but that's exactly how it's playing out. Bill Clinton left office with the economy in good shape, budget surpluses to boot. His successor George W. Bush took the ball and ran with it, revving up the economy with tax cuts and deregulation, despite the need to pay for two wars and clear signs of asset bubbles. (Clinton and especially Alan Greenspan deserve some blame for this but it happened under W's watch.) Obama inherited the resulting mess -- indeed, was probably elected because of it -- and managed to steer the economy to a sustainable recovery. (Ben Bernanke deserves credit for doing the heavy lifting when the Tea Party tried to impose destructive austerity on the country). Now that Trump has inherited a strong economy from Obama, he's turbocharged it with unneeded tax cuts and damaging deregulation, creating massive federal deficits. Interest rates are already low, leaving little room on the monetary side to bail us out in a crisis. (And I wouldn't be surprised if Trump fires Jerome Powell and tries replaces him with some stooge to make money even easier.) To borrow from Warren Buffett, you find out who's swimming naked when the tide goes out. Things may look okay now but I fear what the next downturn brings, with the corporate sector so leveraged and equity valuations so extended. And on a secular basis our public indebtedness keeps rising. The consequences may be so dire that no Democrat or Republican can solve them.
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It is obvious that more than about deficits or a bettering economy, the Republican plot was to take Obama down irregardless of the country's dire needs during the Great Recession. We see this sick ruse also with the ACA. To this day we hear the rantings of Mr. Trump to destroy Obamacare, with an emphasis on the name of our former president, even though millions of those who voted for him will lose all hope of adequate health coverage. Right now, it is all about deregulation and more wealth to the already wealthy. The Great Tax Law passed under Randian Ryan's House and Mitch's malevolent Senate is being lauded because of yesterday's bright economic news. Do not get me wrong..I am happy for my fellow Americans who are now employed whether gainfully is another story. But let us never, never forget that President Obama saved us from Bush's woeful legacy. It was under him that we saw jobs gained by the hundreds of thousands. It is a historical precedent starting with FDR that it is the Democratic Party which gets the job done, not its trickle-down counterparts across that widening aisle.
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@John Huppentha
Sources? Presidents operate on their predecessor's economy for their first year. Please source.
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You are so right. Well said!
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@Kathy Lollock
"But let us never, never forget that President Obama saved us from Bush's woeful legacy."
Perhaps, but perhaps rational expectations theory would give us a different insight:
The traders on Wall Street make their billions by more accurately predicting the economic future a nanosecond before their competitors.
In 2008, Wall Street traders predicted that Obama would:
1) become president;
2) enact a huge tax increase on small business by forcing the Bush2 tax cuts to expire;
3) socialize medicine, increasing its cost by $1 trillion;
4) increase federal regulation to over 190,000 pages.
Easy predictions to make, Obama promised to take these actions starting in 2007 when he declared for president.
When Obama’s probability of becoming president went to 50% (Iowa Political Markets), the stock market crashed $2.5 trillion. As it went to 100%, traders crashed the market by $8.2 trillion.
Those predictions? All correct.
Obama's policies resulted in only 13% growth. The lowest growth of any two term president in U.S. history.
There will always be shocks like the housing market - a $6.2 trillion shock. In 1987, Black Monday hit Reagan with a 22% hit to the stock market, the modern day equivalent of a $7 trillion shock.
Impact on Reagan's economy? GDP growth in 1987? 4.2% GDP growth in 1988? 3.6% Reagan's economy took the shock in stride.
Obama's economy? GDP growth in 2009? -2% First president not to have a 3% growth year since Hoover.
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We have discovered that when you can borrow unlimited amounts of money at effectively zero interest, you can expand the debt infinitely. This is why, as Cheney said, deficits don’t matter. We pay less interest on the national debt now than we did before the crisis, when the debt was less than half its current level. It works (we hope) for as long as the dollar is the global reserve currency and the US maintains military supremacy.
I don’t expect either of these things to change in my lifetime (I’m 57). The debt bomb will detonate some day, and empires will fall. But I look at it as similar in a sense to global warming - it will likely end very badly, but we don’t know how or when. Trying to apply traditional economic theory to it is sillyness.
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Going along a bit on the thesis, the Republican Party will use its Senate majority to undermine any successful Democratic president, including Joe Biden. Over the past 20 years, possibly more, the GOP has used its political strength attempting to damage the U.S. economy while a Democrat has held the presidency. Republican leaders have shown in multiple instances that they will literally sacrifice the entire economy in order to maintain power.
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@Neil Robinsons
"the Republicans will use their majority to undermine any ..Democratic president."
Maybe, maybe not.
The stock market didn't hit a new peak until Republicans took control of the House in 2010.
@John Huppenthal - Suppose you and I each had $10,000 to invest in 1929 (after the crash). From 1929 - 2009 there have been 40 years of Democratic administrations and 40 years of Republican ones. Suppose you put your money into the stock market during Republican administrations, but take it out during Democratic ones while I do the opposite. In 2009 you will have $51,000 in 1929 dollars, but I will have $301,000 in 1929 dollars.
Did you say the Republicans were better for business? As my Dad used to say, "The Republicans are the party of the Rich. The Democrats are the party for the rest of us."
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@Neil Robinsons
"Republican leaders have shown in multiple instances that they will literally sacrifice the entire economy in order to maintain power" I totally agree, but even with a smaller economic pie, they will ALWAYS make their personal slice of that pie ever bigger.
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What force is currently holding inflation down while unemployment is dropping relatively consistently?
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Oh, that.
Well, wages aren’t really rising, not commensurately with what we ought to be getting anyway, and then too we sell cheaper and cheaper crud that doesn’t have the environmental costs priced in.
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Great question for the professor. My non-professorial guess is: wages. These are not rising as fast as in previous tight-labor markets - because of the decline of collective bargaining?
Making very wealthy people even wealthier does not add to inflation. Which is not an argument for trickle-down economic policies, because it also doesn't add anything else to society, either. A moderate level of inflation is not a bad thing in an economy in which gains are distributed in a healthy manner.
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@Connor Stolfa
Relatively low wages.
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Republicans v. Democrats, Fresh v. Salt water, Hayek v. Keynes,... Americans flip-flop between these choices constantly. A lot of decisions are based on perception or the manipulation of our perceptions.
The economy seems to be doing well. Products and services are selling, people are being employed, taxes are low, and all is well. At least we think it is.
Income at the top has grown almost exponentially, income from wages is still stagnant for most Americans and has been for decades. The Fed is handing out cash at low interest while bank interest rate charges haven't gone down and a large portion of Americans are so poorly paid and saddled with debt that a $400 emergency is a cause for panic and serious cash-flow problems.
Yet the Trump/RNC base seems to think all is just fine, no need for any changes - well, we can remove all the Democrats from the legislatures and Governorships. They seem to think that if the wealthy are doing better then they must, by default, be doing better as well.
Will the house-of-cards hold? What happens if it falls? Simple, blame the Democrats!
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Republicans "...were just against anything that might help the economy while a Democrat was president."
The Republican Party, as an institution, has become a danger to the rule of law and the integrity of our democracy.
The problem is not just Donald Trump; it’s the larger Republican political apparatus that makes a conscious decision to collaborate with him.
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Paul please explain to us dummies why you nor the powers that be don’t include meaningful things like the cost of healthcare, rents , insurance and big ticket items that real people are concerned about, rather determining the rate of inflation from a beige book of items like clothing easily manipulated to keep down benefits like S.S. Also why don’t you acknowledge that Q.E. and zero bound rates are hugely inflationary when it comes to real estate(which transmits to rent increases, good for the rent seekers not so good for renters) also it drives up the price of stocks and other risky assets as investors seek yield in any form.
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The Fed’s monetary policy and administration fiscal policy were appropriate during the Great Recession. But this commentator is right when arguing that the CPI is overly weighted toward goods, and we are experiencing inflation now, whatever the official figure tells us.
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@Ted are you implying Krugman is on the "wrong" side of those issues? You think the Republicans want to help with the cost of healthcare more than a liberal like Krugman? QE may not be perfect but would you prefer to do nothing? I question the motivation for your complaints.
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@Ted
health care and real estate's inflationary power over the economy is a direct consequence of Wall Street using basic human needs as profit centers.
perhaps you are familiar with this statement...
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
without a roof over your head or any opportunity to access the advances in medicine made in the intervening years since the founding fathers put forward the Declaration of Independence America will never be the land of hope and promise envisioned by the founding fathers.
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As AG Barr stated, President Trump did what he did because he was frustrated. Yet when Democrats present their POV it is partisan politics. Hypocrisy is the legal tender of the GOP. It shows in their deficit spending to prevent any social programs from funding to turning from House investigations of the Mueller Report to uncover the nefarious initiatives of its origin. When interviewed, Senator Blackburn said it was time for America to move forward towards passing legislation. But when asked about the Senate initiative I just mentioned, she was good with it.
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"I made a little chart to summarize the evolution of Republican positioning on monetary policy."
That is a wonderful chart. It simultaneously shows the hypocrisy and the cluelessness of Republican politicians and their allies. We need more of these and variants of this chart to memorialize in a few diagrams, in a comprehensive fashion, all Republican misstatements and machinations about the economy.
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@Partha Neogy. Even better, prepare two charts for each data set, one with the precise points (for credibility/verification) and the other smoothed (for the non-wonky) hoi polloi.
This one would show the 2008 crash like a steep cliff, then the slow, steady rebuilding under Obama, and it would make it obvious that Trump didn't change anything, that he's riding the inertia of the Obama recovery.
Forget the monthly variations and look at the long-term trend. It would fit on a bumper sticker.
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@DMC
Momentum of Obama recovery (not inertia), but your point stands.
"What all this tells us is that Republican positioning on economic policy has been in bad faith all these years."
I have saved myself a lot of time and intellectual energy the past several years by assuming that Republican positioning on ANY policy has been in bad faith all these years. Economics, yes, but also their stances on co-equal branches of government, health care, the judicial system, human rights, immigration, executive power, the free market, trade, privacy, free speech, voter rights, the role of government in the public square--you name it.
Conservatives of all flavors have betrayed every principle based on the Constitution, the rule of law, and an American ideal of society. But their greatest act of bad faith is their unflagging, sycophantic support for a man who is clearly unfit be president and betrays the country at every turn. (Exhibit A: Lindsey Graham.)
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@Sherry S.: I agree with every Republican stance that you mentioned and would add a few more to your already miserable list: climate change denial, no plan for affordable education, resistance to reasonable gun control, demonization of reputable media sources, deregulation of Wall Street, pillage of environmental protections, record setting tax cuts for the richest people who have ever lived (shamefully marketed as a middle class boon), and their universal disdain for fair play, common decency, honest argument, and general rationality. All sold to their angry and fearful base in the name of Baby Jebus...
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@Jeff
"...Climate Change denial.."
Perhaps, but perhaps man made climate change theory needs to be questioned, needs a dose of skepticism:
They call it a carbon tax but isn't it really a gasoline tax? Don't they want to increase our gasoline prices from the U.S. price of $3 per gallon to Europe's $6.50, a $465 billion hit?
Don't they want to increase our electricity prices from the U.S. $0.12 per kwh to Europe's $0.20 per kwh, a $360 billion hit?
Are our scientists allowing that $800 billion payday influence their theories?
Wouldn't these "carbon taxes" reduce our GDP per capita and Median Household income from over $62,000 to Eurozone's $36,900?
Europe created less than 35% new jobs while we created more than 65%. Wouldn't that be devastating?
Will it even stop there.
$6.75 per gallon, $0.20 per kwh, 80% tax on business were not enough for the climate activists in France. They went for even more.
But, has it backfired. Has electricity become so expensive that wood burning is now releasing more carbon than ever?
It the midst of the "replication crisis" and with $800 billion at stake, can we trust any scientist?
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@John Huppenthal - ok, wow, that's a lot of uninformed paranoia there. Very scary anti-intellectual thinking.
Even if we buy your theory that all the world's scientists are part of a massive conspiracy, I really don't see how climate scientists are supposed to benefit from any increase in gas or electricity prices. I'm not sure why you think climate action would turn the US into Europe either. Europe hasn't transitioned to renewables yet. And I guess you don't know that burning wood has no effect on the overall level of CO2 in the atmosphere. It's burning fossil fuels that's the problem, not wood.
The scariest part is your conclusion that shouldn't trust any scientist, when your grasp of the facts is so poor. How are we meant to respond to somebody like you?
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The Republicans will want whatever their benefactors want, usually those benefactors want low taxes or no taxes, few regulations and no regulations that impinge on their companies making money, anti labor laws, the lowest minimum wage possible, and above all no cooperation with Democrats who might have a progressive bone in their body. The benefactors will even support a Democrat if that Democrat is really Republican lite. The Republican politicians will lie freely and will never respond to charges of hypocrisy and they do not have to as they think the voters are not paying attention. Maybe they are right about the voters.
29
Part of the burden of a commentator in today's world is to repeat the obvious over and over. No particular column will get through, but perhaps the slow drip-drip-drip will lead to an erosion of the lies.
I don't know what will happen in the next 18 months, but the odds are better for an economic downturn than for growth to the sky.
55
They not only didn't want to help they made every effort to sabotage the recovery.
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@mrh and, my goodness, they knew the people would like that.
@mrh Yes, and they will act the same way when the next GOP-induced crash arrives.
1
I honestly think that, from a Republican perspective, it isn't a question of good or bad faith, of honesty or lies. They are beyond such distinctions. They view themselves, as Karl Rove famously said, as creating reality, not responding to it. The goal is not a common working out of our shared interests; the goal is to make reality into an advertisement for their ideology. They want, as Margaret Thatcher said, to change peoples' souls. Economic necessity, like journalism, is simply a tool for political ends. They want, as they readily admit, democracy to function on a business model; but since democracy is based on shared values and communication, values and communication must be shaped to serve their personal profit. They have established corruption as an ideal, bribery as speech, greed and self-interest as moral standards.
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@Martin Excellent post. And yet since Reagan, the Democrats still can't seem to get their economic message across to the voters.
Republicans repeatedly formulate simple, three word, snappy phrases like "No new taxes" and every single Republican repeats it like a mantra and it sticks in voters minds.
Democrats continue to talk above the education level, issue interest and attention span of 90% of voters which is the reason their policies do not garner support.
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@Martin
Their goal seems to be a modern kind of feudalism with the koch bothers and their ilk being the lords while the rest of us get to be serfs.
5
The GOP efforts to use economic arguments against saving the US economy in 2009-2017 were mere partisan efforts to harm the economy for political benefit. Now the economy is booming and Trump really hasn't done much except reward Wall Street with a fat expensive tax cut on the policy side that increased the flow of huge amounts of capital to the highest incomes. A full fledged economic recovery has also taken hold thanks to the GOPs efforts to cease undermining the economy. Deregulation that protected the consumer and the environment has been discarded to great fanfare by the GOP campaign financiers. To the Democrats credit they have not resorted to GOP like tactics to damage the recovery for the middle class. Their should be efforts to staunch the relentless flow of capital to the wealthiest and make it available for the good of the entire society.
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Facts and other technicalities aside, Republicans have been consistently anti-Democrat and anti-liberal. And that's all that matters.
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@r a When you dismiss the facts, that says it all.
Printing money may not have been inflationary in a depressed economy, but it is also not clear that it did much good. Pushing in a string, in the absence of more prolonged fiscal expansion that might have been better at stimulating the economy.
2
This graph makes total sense. What is confusing, however, is - outside of economists - can the number of remaining people who understand it be counted on one's fingers? The great challenge remains how to make this understood to the broad electorate.
The attitude towards the Fed and deficits are just two of the abandoned GOP principles over the years: activist judges, family values anyone?
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@Larry Heimendinger. I dunno, Larry. If I take off my glasses and look at the chart from a few feet away, I see a peak in the election year of 2008, a drastic plunge, and a slow but steady climb back up to the vicinity of the peak.
I read these broad indicators as the end of the Bush/Cheney bubble, Obama's eight-year effort to rebuild the economy, and, as to the data since January 2017, Trump's lazy free ride on Obama's accomplishments. When things like the tariffs and bluster and reckless tax cuts for the prosperous start to intersect more pointedly with a changing climate in a violently volatile world order, I can't help but believe that those lines are overdue for another downturn.
Prof. K can sweat the data details all day, but the big picture is clear.
5
@DMC
"This graph makes total sense."
Yes, but what is the graph's meaning?
The graph appears to say that wages were increasing at 2.5% or less until Republicans cut taxes. Now, wages are growing at 3.2%.
The graph also appear to say that wages went straight sideways for two years when Obama put his large tax increase in place. So, it took two years for the economy to develop dimensions of untaxed or lessor taxed growth.
Ted Cruz was such a deficit hawk that he shut down the government during the Obama presidency, causing harm to many US citizens, even though he knew he could not sustain his effort, All because he was so principled in his fear of rising deficits that a red line had to drawn. Oh have things changed. The Republicans and Trump promised that their tax cut program would be either revenue neutral or even revenue positive. Whoopsie! We were just off the mark by a trillion dollars but whose counting. Cruz voted for the tax cuts eagerly. And now Trump is proposing a two trillion infrastructure act and Ted Cruz will not raise a single deficit objection because, well, it's republicans who are leading the charge and it will help in the 2020 elections. But you can count on this one thing from Cruz. If the Democrats take back the White House Sen. Cruz and the entire Republican Party will become born again deficit hawks and pretend that they never ever changed their principles during the Trump administration.
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@KJ Peters Please see Colorado Senator Michael Bennett's take down of Ted Cruz on the floor of the Senate for his stupid hypocrisy concerning the Trump shutdown over the wall. You can find it on YouTube. Great display of utter contempt for Ted Cruz. I suspect Michael Bennett is more popular in Texas than Ted Cruz.
Not that I am pushing a native son, but every Democrat should look at Senator Bennett's Presidential candidacy. He is not a professional politician and he still has his idealism about public service and what America should be. He may not win the nomination but he will help elevate the process.
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@KJ Peters I agree and it isn't hard to make the leap that the republicans objected to Obama's stimulus package and so forth because he was/is black.
3
"They were just against anything that might help the economy while a Democrat was president."
According to the book, "Democracy in Chains," the above sentence should be rewritten to read, "They were just against anything that might help the economy while Democracy is still in place in our country."
Dr. Krugman, again, I highly recommend this book. I hope you either have read it or will read it very soon, since it connects the dots and answers a lot of the questions that you pose in your columns. Once you read it I think you will be asking a different set of questions.
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