So where are the Democratic politicians and presidential wannabe's hammering this point every day?
Cue the crickets.
8
Unfortunately, the vast majority of Americans can't even balance their checkbooks, let alone understand federal deficits and GOP hypocrisy. Consequently, this pathetic, right wing scheme will continue, as the rich get even richer and the rest of us suffer.
15
Just waiting for the next financial crisis...meanwhile reading Chris Hedges latest treatise on the flailing American Democracy, "America: The Farewell Tour".
3
Debt is not revenue.
3
It's good that you have reported this very important fact(s) but what really has to happen is that someone should make a documentary for tv and Democrats must mention it as often as often as possible so it really sinks in to the American consciousness.
3
Can someone tell me why folks who are in the Middle or Lower Middle Class keep voting for Republicans? Can't they see that the Republican party is "Lucy" to their Charlie Brown, always pulling the football away as they are attempting to kick it? The Republican Party is dedicated to making life worse for average Americans. It's in their charter. Republicans will only help the wealthy and powerful and lie to everyone else. That is just the way they like it, but that doesn't mean you, as an average person, needs to keep them in office.
11
If the republicans held the White House and both legislative bodies in 2009, I suspect that -- w/o raising taxes on the 1% as part of any fund therefor --they would have employed deficit spending so as to save more than their 'faces' -- w/o embracing or acknowledging Keynesian theory, and while giving full 'misdirection' to the reality and 'function' of their 'play.'
But even with such a full-house of executive and legislative 'cards' (plus 'reins' on the Supreme Court) … just imagine, if trump had been prez at the outset of the great recession, how, and how so surely and so swiftly, the economy,the citizenry and the republic would have been flushed 'down the drain' of his wanton self-regard and lazy ignorance.
3
I am a retired teacher, and sadly have to admit that educators have failed for several generations to teach the critical thinking necessary to understand Republican hypocrisy. I've been out knocking doors to register voters and it's sad how many poor people feel helpless, hopeless, and cynical. Republicans, as Mr. Krugman has noted many times, have been telling big lies for decades about how their fiscal conservatism while cutting taxes for the wealthy will create a thriving economy that provides better paying jobs. Trump simply went a few steps farther and told bigger and better lies. I fear that even a blue wave won't be enough to turn this ship around.
12
The Great Recession was caused by government intervention in the market to stimulate home buying with easy credit, and by providing "protection" for private-market culprits by means of laws, regulations, bailouts and "helpful" housing organizations such as Fanny and Freddie gaming the housing market.
"The "system" (the fed, its bank cartel, and the plethora of alphabet agencies created by Congress to regulate the markets, failed utterly. What should have been a short-lived recession was prolonged by government interference in markets, particularly in the form of its bailouts. The Recession barely recovered during all of Obama's tenure thanks to his "progressive" policies of tax-em, control-em and regulate-em serving as a noose on economic growth, which can only come from the productive private sector, never from the tax-and-deficit-dependent state.
FDR perpetrated the same litany of semi-socialist stimulation and regulation, so-called, during his administration, and the result was 13 more years of the Great Depression, making it by far the longest in U.S. history.
Professor, your Democrat-blinkered view of history is as distorted and contrived as Trumps account of his "incredible success" in saving Puerto Rico after Hurricane Maria.
5
Re: Bailout Repayment
While the bailout focus was too-big-to-fail banks through TARP, there were multiple other financial search and rescue interventions by other federal agencies that raised the total cost to taxpayers some experts estimate as high as $13 trillion. Also by 2008 the rapid proliferation of non-bank lending and finance accounted for more unsecured debt than held by traditional banks.
Separately the two government-sponsored agencies that guarantee mortgage and housing loans -- FHA and Fannie Mae -- were bailed out at a cost nearly equal to the bank bailout. Even investors with significant exposure in bank and finance stocks were later bailed out.
Remember the cause of the credit crisis was banks and finance companies pushing consumer debt from refinanced mortgages with only $1 dollar in capital to cover $40 in loans. Aggressive mortgage refinancing raised total US household debt from 80% of total income to 136% by 2006.
Consumers had borrowed over $1 trillion through mortgage refinancing by 2008, which accounted for the massive spike in consumer spending that drove the economy to its peak of corporate prosperity.
Instead of paying people more (wages were stagnant) Corporate America effectively lent consumers the money they didn't make from their jobs to buy stuff they couldn't afford to drive corporate prosperity, obscene management compensation and increased stock values.
They lent us our own money and got very rich when we couldn't pay it back.
5
Paul, thanks for pointing out the long time of high unemployment. I lost my job in November 2013 in a corporate down-sizing. I did not find a new job until August of 2014. Becasue the recession was officially "over," congress used this as an excuse to cut unemployment to 6 months. My small severance, decent savings, and a working husband were all that prevented me from going under. By cutting benefits in a time of historic high unemployment, the goal of the GOP congress was to shame those of us who could not get jobs. They prefer a population that is so low, so down on themselves that many easily fall sway to propaganda, xenophobia, nationalism, and blaming of the others. Those are their talking points, and look where it has all taken us.
4
Krugman’s analysis can be extrapolated to explain government policies that
1. confer a preferred, 15% income tax rate to those who invest in and draw their income from the stock market (who are those who have disposable income and can afford to takes risks with their savings),
2. require those without employer-paid health insurance to first pay tax on their income and then buy insurance with after-tax money (as opposed to those who receive tax-free health insurance benefits from their employers), and
3. allow candidates for public office to take legalized bribes in the form of very lightly regulated and mostly anonymous campaign contributions.
This type of injustice must stop.
6
Dear Mr. Krugman,
I am confused by a California political matter. You are quoted as opposing a ceiling on rental units. The American Economic Association in 1992 said that 93% of its members agree a ceiling on rents reduces quality and quantity of housing.
Could you please bring me up to date on this. We have to vote on it in November.
Mr. Krugman, while you're correct that Republican obstruction was responsible for the still largely unrealized recovery for most Americans, you incorrectly give the Democrats a free pass. If Geithner's "dismissal" of more stimulus had not been accepted by the Dems it wouldn't have mattered. But while the Dems were bailing out the perpetrators of the Crash, what did they do for all the "little people"? Nothing. Life savings and retirements were lost; houses repossessed; jobs lost, but where was the stimulus for them? Like the great Reaganomics Myth, they promised that saving the wealthy would lead to that recovery "trickling down" to the rest of us. Of course that worked as well as Reaganomics has.
And speaking of "trickle down", since its inception under Reagan, there have been ample opportunities for the Dems to undo that ruinous system, but they haven't. Why? Because they chose to chase after the same wealthy donors as the Republicans, and those donors LOVE "trickle down" since their exponentially increasing wealth NEVER trickles down!
You're right Paul, it is politics, but it includes both political parties. And that's why a man that wasn't associated with either party - up until he decided to run for President - was able to get so much support. When both parties are seen as failed, what's the alternative? And had you not been part of the Hilary Team, and put your support behind Sanders, we wouldn't be having this discussion at all.
9
"Why didn’t rapid financial recovery lead to rapid economic recovery?"
Simple answer the recovery was strictly oriented to saving the banks, their investors and the system. They only suffered a hiccup, the real disaster was ultimately born by the middle class, the millions who lost their homes, lifes savings and their jobs with little or no assistance from their government. Eight years later we are still left twisting in the wind while the Wall Street Bankers, the rich plutocrats, corporate CEOs and politicians are dining on caviar and wondering what we poor people are doing, if they even bother to ask the question anymore. They seem far too busy trying to figure out how they put an end to health care and Social Security for we who are not worthy of the masters of the universe.
5
@Steve
This is one more comment confounding TARP, the bank bailout (= a bipartisan bill, and a LOAN, fully paid back by the banks thanks to Obama, and with interests) and ARRA, the Stimulus, which contained mainly well-designed subsidies and tax cuts for the middle class and small businesses and was only supported by Democrats and heavily criticized (and its second part effectively blocked) by the GOP, even though according to the CBO it's what turned Bush's -8% GDP into a decade-long 2% GDP.
Krugman explains the difference once again in his op-ed, so how come that notwithstanding this fact, ten years later so many comments here STILL confound both ... ?
With voters like that ...
4
@Ana Luisa, who's confounded? The fact of the matter remains as Dr. Krugman has pointed out repeatedly that the stimulus was "too small". The fact of the matter remains that Wall street was given a bailout, foreclosed homeowners, the victims of these "bankers" were not. No banker lost his misbegotten fortune, no banker went to jail. The fact remains that TARP kept in place a banking system that by most accounts is set to fail again. The one thing that TARP did was to pull it over the eyes of the middle class (pun intended). See you at the next Wall Street Bailout, this time with stakes.
Letting good happen to the economy while a Democrat sit in the White House would be a dangerous way of exposing the lie of Republicans being the economic experts.
It would be akin to the issue of letting Democrats get a healthcare plan passed. Even a deeply compromised healthcare plan has exposed the Republicans’ lie that Democrats can’t fix healthcare. While Democrats certainly didn’t fix healthcare, they made a positive change, and the country doesn’t want to go back to the bad old days.
Just imagine if the country got a taste of effective economic policy. Wow! It would be a game changer. We’d find out that trickle-down doesn’t trickle down. We’d find out that spending money on middle-class needs benefits all of us. Maybe we’d find out that Republicans just aren’t worthy of anyone’s vote, unless you’re in the top 1%.
10
While I agree with the premise that the Republicans did not help with the needed bigger stimulus, it always troubled me that the banks were not given direction how to use their massive bailout funds.
Had some of those funds been used to reset and extend interest rate jumps for the most toxic loans, then millions of bankruptcies could have been avoided. After all, it was the bankers and mortgage industry who foisted these resetting rate loans onto to the working class, and took a big cut from the transaction.
So blame also goes to the way the bailout was handled. The workers who were trying to move up had no control over losing their jobs. It was not them who turned traunches of low quality loans into investment vehicles. Banks should have used the bailout funds to extend the entry level rates.
1
I like the references here to infrastructure spending - a step in the right direction.
Blaming Republicans for the defects in the recovery misses two factors. First, TARP was initiated under Bush, and the Republicans. Second, no one went to jail under the Obama administration for issues related to the Recession.
What was really at work was a bipartisan effort which we don't understand to this day.
Why?
This will again go back to privatizing profit and publicly funding risk, but no easily implemented solution is evident.
3
@UTBG
You're confounding TARP, the bank bailout (= a loan), and the ARRA (the Recovery Act, a stimulus containing mainly subsidies and tax cuts for the middle class and small businesses).
TARP has always had bipartisan support.
The Republicans however strongly opposed ARRA, and managed to block the second part of it. That is what Krugman is talking about here.
Let's put in this way.
Today we are literally living a political crisis in Washington. Absurdity is the law.
I learned out of something
In America. we are truly living in a world, the concept hero is the ruling belief in our minds ( some say salvation mentality). I mean we are really looking at the mouth of Presidents.
We have a congress in my mind fade into the oblivion, most malign Trump supporter claim that USA does not need a congress and on the ground facts he is right.
American democracy ( which we witness in Nixon, Regan, Clinton times) is not alive today. Congress is not exist in todays world . Where are they?
Republicans in Congress certainly succeeded entirely abolishing Congress oe simply reduced a rubble.
Then Are we really living in a democracy.
I am a Democrat, I really do not care next president will be a democrat or republican ( I care shouldn't be 2nd term Trump ) but do we still have Congress!
GOP ruined the American Democracy, abdicating entire power of Congress and handing over the bidder.
We have serious problem with our Democracy.
Is American democracy Alive or in Coma?
While one can agree with Krugman's basic premise that Republicans did all they could to prolong the effects of the financial crash with the aim of harming the Obama administration, to say that the financial aspects of the crisis were over by mid 2009 is complete nonsense. He should perhaps read the book by his former boss. That would be Ben Bernanke.
Neither was the malice, ignorance and insanity totally confined to the right. Sanders voted against TARP.
13
@John
By that Krugman clearly refers to the fact that by then, all the big banks were indeed saved, so THAT factor threatening to put us into a Great Depression was gone.
Of course, that does not mean that all structural problems that have led to the banking crisis in the first place were already solved by then too. But that's not what Krugman is saying here.
As to Sanders: he voted against TARP knowing that 74 Senators would vote for it and as a consequence that it would pass and that his vote wasn't needed. And he did so because he wanted to go further than that, so no, you cannot possibly compare this to Republicans systematically blocking the Recovery Act and the subsequent extension of crucial Recovery Act tax cuts for the middle class and small businesses.
@Ana Luisa
Sorry but your account isn't borne out by either Bernanke or Geithner for whom the purely financial aspects of the crisis persisted well into 2010 at least. Have you read either of their books?
So Sanders was indulging in gesture politics in furtherance of an idiotic agenda. I'd say in its way it was an exact replica of Republican behavior even if not so damaging.
My recollection of events is that it was partly a question of political capital. The White House preferred to place more emphasis on dealing with health care (Obamacare) than on rescuing the economy. It wasn't a question of either/or. Rather one of emphasis. Rahm Emanuel (then in the West Wing) was the one pushing for more stimulus then and putting health care on the back burner. He lost that argument in the White House.
At least that's what I recall. If Emanuel's group had won the argument, folks would be complaining now that the Democrats had squandered the opportunity for national health insurance.
@Skip
That's a myth that has been circulating in progressive groups for a while, but it isn't fact-based.
With a -8% GDP and 700,000 jobs lost when Obama came in, the first priority of course was turning around the economy through an emergency stimulus bill. That's how in Feb. 2009 already, the Democrats and three Republican Senators passed the $787 Recovery Act.
The idea was to first implement that bill, until the downward spiral was stopped and inverted, and to then, just before the midterms, pass a second and similar stimulus package, to speed up the recovery. Many GOP lies were spread about the stimulus, so the idea was to do it in two different stages, allowing vulnerable Democratic Senators in red states and swing states to show the results of the first stimulus to justify the second part.
In the meanwhile, a full year was dedicated to debating and designing Obamacare and getting it through Congress.
What happened then is that unexpectedly, Ted Kennedy died and his seat went to a Republican. THAT is what made the second stimulus impossible, NOT the passage of Obamacare or somehow a decision among Democrats that the second package wouldn't be necessary anymore.
3
@Skip, the premise that health care reform is separate from economic recovery is a false one. Health care reform saves the economy billions and is a boon to individuals, so you can argue that it was akin to a middle class tax cut.
1
During the Obama administration, a certain right wing mouthpiece whose last name recalls the word "inSanity", daily and without fail, whined and bemoaned the deficit as greatest threat to "freedom loving Americans, their kids and their grandchildren", than an invasion of Chinese, Russians, the French and or space aliens. He falsely claimed it to be greater than all the deficits combined for every previous administration - an end to life as we know it.
What do you hear from him now?
It must be tax cut magic - the words debt and deficit have magically disappeared.
5
The kicker is that today the GOP seems hell-bent on ruining the economy over the longer term now that it controls all the levers of governmental power. The Republican Party is unfit to hold power because it has no interest in governing and despises the organs of governance under its control.
6
Scorched earth indeed! And if we don't vote them (the Republicans) out they will march on. Next on deck - gutting social security, medicare and medicaid.
This is not my guess - they have told us so (only they cloak it in more responsible well meaning sounding labels).
After that and the last dagger in healthcare they WILL be coming for our retirement plan assets. Expect some big juicy tax bites in the coming years out of the savings of WAGE earners. (You know - people who worked for a living)
It won't be over until the masses are hobbled at the knees.
2
The injustice of it all is that the Republicans got rewarded in the 2010 midterms (especially at state levels to redistrict and Gerrymander), 2012, 2014 and then in 2016. Maybe what's broken in America is a huge segment of the population that is highly partisan - I'm talking about those tea partiers who are now nowhere in sight. I'm talking about all those Christians who cried for moral values after the Monica Lewinsky affair, but stays silent over Stormy Daniels. The Republican politicians can get away with murder (literally in the case of the Iraq war death tolls) because the base allows it.
10
So despite GOP scorched earth, Obama nearly doubled the national debt but that stimulus was insufficient for Paul Krugman. Would tripling the debt in eight years have been enough?
3
@Michael W
He did NOT double the debt.
What Republicans don't tell you is that Bush left with a STRUCTURAL, record $1.4 trillion deficit. "Structural" means that it takes decades to get rid of it, EVEN if all new presidents wouldn't sign any non paid for new spending bill into law.
What Obama did is reinstalling Clinton's pay-as-you-go rule (which Republicans had abandoned, as they again already did today), and then investing in just ONE, one-time deficit increasing bill, the $878 billion Recovery Act, knowing that the most important factor driving the deficit, when he was coming in, was the -8% GDP that Bush left us with, and that only a serious stimulus could turn the economy around and produce decade-long steady GDP growth.
Then, he managed to cut Bush's $1.4 trillion deficit by two thirds over the next six years.
Of course, that still means that the Bush deficit year after year increased the debt. But you cannot possibly attribute that increase to Obama, as he didn't sign any bill into law that actively contributed to increasing the debt, you see?
Compare that to what the GOP is doing today: once again passing gigantic and not paid for budgets, whereas their tax cutting plan for the wealthiest Americans already on its own doubles the deficit Obama left us with. THAT is what actively raising the debt mean, you see?
12
@Michael W
You mean like under Ronald Regan?
2
@Ana Luisa I did not suggest that the near doubling of the national debt that took place under President Obama was active or passive. But it did happen and would have grown even larger if Krugman's recommendations had been followed. Casting blame on administrations that preceded and followed is irrelevant.
Mr Krugman for me , in Canada, it is obvious that there is two United States of Americas ; the RED and the BLUE. You have to elect a President who can avoid such a polarisation in reuniting the whole country. Trump and the GOP are not doing that and , frankly, I don't know what they are doing apart the destruction of your institutions and the sowing of chaos.The vision of a country where the whealth will go only to 0.01% of the population may work for Arkansas ( with the Koch brothers) and other similar oligarch's areas but cannot work for a country of 335M human beings . The US people deserve universal health care,clean environmental country, accessible education and safe retirement; this cannot be deliver by the GOP and the oligarchs. The best way to get a consensus is to ask the residents of each state what they want and draw a line in accordance with the results, but such a line should be draw befor any attemp at rebuilding unity.It is not good to force things on people, it is better when then can make their own choice.Less governmental interventions and reduce taxes are legetimate request but cannot live well with universal health care and education; so let the people of each state make their choice...and live with it! Best
3
Additionally, and ironically, the GOP's defifcit ballooning tax cuts look as if they will turn out to be deflationary. Evidence is mounting that companies in heavily competitive industries like retail and autos, are using at least part of their 14 percentage point windfall to cut goods prices.
This will keep the yield curve from "normalizing" and banks from improving their NIMs
1
One reason most people don't fully appreciate the content of this article is because it requires more than a tweet or a 30 second ad spot to correctly communicate. The candidate who can reduce these somewhat intricate points into a slogan or media campaign is what will get people to alerted, activated and out voting.
Problem is, I don't think such a person is on the horizon.
2
We should stop hoping for quick fixes for complicated problems.
It's not one or the other campaign slogan that will restore America's greatness after years of GOP corruption, it informing ourselves as citizens, constantly fact-checking our own deepest beliefs and engaging in real, respectful debates with those who disagree, and then making sure that our families, friends, neighbors and colleagues go voting, that will make the difference.
In a democracy, there are no shortcuts or silver bullets. The only way to obtain a government for the people, is to actively invest, each one of us, in a government by the people.
What 250-character tweets can do, IF they are copy-pastes of the main Fox News talking points of the day, is to create an "alternative facts" world where everything is simply and people who look/think like you do are the good guys and all the others the bad guys.
To imagine that the same strategy of lying and can lead to REAL change and a government that manages to work together and pass competent, science-based bills that benefit not wealthy donors but the middle class, is absurd.
The only thing you can achieve with simplistic, fake news based slogans, is a government that works for the 1% wealthiest donors and that's it.
What we need now are REAL campaign platforms, proposing fact-based policies that have been proven to help the middle class. And that means not waiting for the perfect guy out there but rolling up our own sleeves ...
Yes WE can! ;-)
7
Corporate America was very much in on this bad faith approach. Throughout the "recovery years" they continued to lower wages by dumping benefits retirement and insurance benefits. As this happened families had to make up the differences. For most of us this limited the budgets for spending and any ability to save.
The theme of Republicans claiming that "their opposition to anything that might limit mass unemployment was driven by a deep commitment to fiscal responsibility" is a philosophy that lives in Corporate America. Corporations had record profits before Trump was elected and they sat on them. The second Trump fed them their tax cuts they upped their own bottom lines while waiting for deregulations, yet none of this has translated into a difference for the average family. No doubt these companies continue to lobby the Republicans to keep average Americans in their place or even tamp them down some more.
60
Two key elements that slowed the crisis were federal government austerity and consumers paying down debts. Both trended in unprecedented ways.
Federal spending was flat at around $3.5 trillion from 2009 to 2014, so spending as % GDP fell. In fact, we spent a bit less in 2014 than 2009, unheard of austerity when federal spending historically rose about 5% prior to the Obama era. We should have been increasing spending as % GDP, as Reagan did until employment recovered after the tough 1981-82 recession.
This cut about 0.4% from GDP from 2010-2014. In other words, instead of GDP growing 2.2% on average during that time, it would have grown 2.6% if we had just allowed government spending to have a neutral (0%) effect on GDP growth.
The second big (and terribly under-reported) issue was that households paid down a total of about $1 trillion in debt from 2009-2012, rather than borrowing and spending as they had in the bubble years, when about $7 trillion was added to debt from 2000-2007. Much of this debt reduction was foreclosures, unfortunately.
Homeowners got little if any help, and the net worth of median family fell from about $140,000 at its peak in 2007 to $84,000 in 2013; it recovered to $97,000 by 2016, the latest data from the Fed Survey of Consumer Finances.
If Republicans want credit for austerity and cutting the budget deficit back to historical average as % GDP by 2014, then they get credit for the slow recovery.
1
@David Doney
Slowed the crisis [recovery], that is.
I'm grateful to the powerful credibility in this analysis for allowing me to believe my own eyes.
1
Old blood out. New blood in. May we vote in a much different congress in 52 days.
5
The Federal Reserve lowered interest rates. This enabled many weakened firms to stay in business but not to regain financial health. So they continued in operation in a weakened state.
In contrast, in 1920 there was a deep economic slump. In response the Federal Reserve did not lower interest rates nor did the Federal Government perform a bailout. Then (as a result?) the economy snapped back.
I think that our 1920 experience informs us as to the policy we should have used in response to the failure of Lehman Brothers.
1
Absolutely correct, Paul!!
3
Great column Dr Krugman - calling it like it was/is, and naming names!
3
The great strength of democracy is that the people elect their own representatives.
The great downfall of democracy is that it is often antithetical to true leadership on the part of those who are elected.
2
I'm no economist, but it seemed blatantly obvious that big businesses, and their Republican politician toadies, immediately saw the recession's silver lining (for themselves):
* a chance to get rid of employees because labor costs impede profits
* a chance to squeeze more work at the same cost out of the remaining employees
* an excuse to freeze or reduce wages and benefits
* a good way to move into inevitable automation while
minimizing the human toll as not their fault or responsibility
* making people compete viciously for scarce jobs, driving down wages and reducing or eliminating benefits and offering an excuse to get rid of undesirable employees
* stepping up the pace of offshoring, outsourcing, or simply replacing Americans with HB1 indentured servants
in all, a Mr. Potter holiday masquerading as an economic crisis.
humbug
5
And because the inadequate stimulus didn't reach the hinterland, working-class white felt disenfranchised by a black president. In 2016 they were consumed by rage and voted for "pie-in-sky-promising" Donald Trump. Mitch McConnell's evil plan worked perfectly.
3
@PA Voter
Do you think that working class coal miners, those working in coal fired generation plants, or anyone working that depended in some way on the coal industry was harmed by Obama? How about those who desperately needed jobs that pipeline construction would have provided, were they harmed? No matter how one looks at it Obama placed ideology over the welfare of millions of Americans desperately in need of jobs. Obama delayed the economic recovery - that is just plain fact.
3
@jaco
Look, when Obama came in the economy was shedding 700,000 jobs a month. In less than two years, he turned it around, without any GOP help, and now a whopping five of the last seven years we saw MORE jobs being created a year than under the GOP and Trump for the moment.
So let's first see how long it will take the GOP to get job creation at the same pace as Obama did (knowing that they started from a MUCH better economy (+ 2% GDP with frequent +4% quarterly growth) than Obama did (-8% GDP, that each quarter was more negative than the previous one, AND will all the big banks failing simultaneously), and then we'll talk.
As to coal miners and the Keystone pipeline: we're only talking about VERY few jobs here, as coal has become to expensive so the market is switching to much cheaper natural gas for years already, whereas the Keystone pipeline would have created some thousands of temporary jobs and that's it. In the meanwhile, all objective studies - not "ideology" - was showing how detrimental both would be to America's greatness in the long run.
So you may believe that Obama "delayed the economic recovery", but as all studies have proven the exact opposite, you'll have to accept that this kind of fantasies only belong in "alternative facts worlds" ... ;-)
3
jaco,
A little hyperbole don't you think?
Coal employees number under 80,000.
We are talking office staff, truck drivers, sales staff as well as those actually getting dirty.
https://www.washingtonpost.com/news/wonk/wp/2017/03/31/8-surprisingly-sm...
As for pipeline construction, again, you are so far off it begs the possibility of disingenuousness. Under Pres. O's watch gas 'n oil grew tremendously.
https://money.cnn.com/2016/07/21/investing/trump-energy-plan-obama-oil-b...
As for working pipe layers, Pres. O. tried to pass a bill to replace and repair old and failed lines. Republicans shot down that infrastructure build. Yet you blame Pres. O.
https://www.politico.com/story/2015/04/aging-gas-pipeline-overhaul-barac...
Your "plain fact" is in need of more factness.
Try again.
1
Greed. VOTE.
4
If the Republican argument is so obviously self-contradictory, why do so many Americans buy it? I think it's because there is an irrational but deeply held belief in American culture: what's good for the billionaires is good for me. It has always been there, but probably reached full fervency during the Reagan years. People who make $50k a year still instinctively align with the super-rich, because we have a firm culturally-rooted psychological need to see ourselves as one of the special winners. To acknowledge that we have need for programs like universal healthcare, public education, etc. is to acknowledge we are among the the countless, faceless losers.
Trump, I think, gets this. Next to white nationalist rhetoric, the idea of "winner" vs "loser" is probably the most prominent theme in his propaganda. He sells the illusion to his supporters that they are basically like the guy who has his name in gold letters on a skyscraper. It's just a matter of time (and mass deportation of job-stealing immigrants) before they, too, get their names in gold on a skyscraper. So why vote for silly, socialist policies? Vote for the big tax break for when you make your mega-millions.
9
But for those with loads of money it was a (hopefully) once-in-a-lifetime chance at huge discounts on American assets. Great news for the same people & corps who most benefited from the GOP's recent tax cuts.
Of course that's probably just a coincidence.
5
Mnuchin?
W offered additional stimulus to Obama to take effect before Obama took office. Obama turned it down. [A disclaimer before I proceed -I never voted for W and gladly voted twice for Obama.] I felt that was a mistake at the time because republican hyper-partisanship was long established by then. Republicans will gladly allow US citizens to suffer as long as they see a political advantage.
4
You failed to include the fact of public sector jobs being cut because Republicans didn't want to spend the money on people. Again, in an attempt to mess with the recovery, at the time in history when public sector employment is increased in order to get people a paycheck, the Republicans chose to make it more difficult for Obama to succeed and sited fiscal responsibility in cutting jobs. The fact that Obama (and his policies) managed to succeed in turning the economy around in spite of such vindictiveness makes it all the more impressive. And please don't forget the Republicans wanted to kill the domestic car companies... Funny how all this is forgotten.
5
The Republican party continues to destroy with wars revenging countries, war on women, war on immigrants, war on the elderly, war on the disabled, war on the poor, and war on our democracy and rule of law. They have no positive input period.
5
Dr. Krugman fails to disclose that his hero Obama and his Democratic colleagues controlled Congress. Whining about Republicans is misleading.
7
@No. The Democrats controlled Congress for only 8 months. Ted Kennedy died of brain cancer, and our then Republican governor named Scott Brown, another Republican, as the interim replacement, thereby costing the Democrats their majority in the Senate and putting in the hands of a man who declared he would make Obama a one term president. Facts are stubborn things.
7
@No
And what exactly is it that he's saying here about Republicans and that would become false as soon as you take the fact into account that Democrats for a couple of months indeed controlled Congress .. ?
Do you realize that if you don't give any arguments, it's you who risks being seen as a "whiner" ... ?
4
@No
In the 2010 midterms the Republicans took control of the house by the biggest margin in 70 years.
https://www.theguardian.com/world/2010/nov/03/us-midterm-election-result... c
Then Republicans took control of both the Senate and house. Obama had a mere two years before His administration faced complete obstruction from the rich and white party of Republicans.
2
The housing bubble was only a symptom. It it had not been that it would have been something else.
The first thing to realize is that the federal deficit measures the flow of money FROM the federal government TO the private sector.
In the 1990's spending and the deficit were reduced. The flow of money out of the federal sector was reduced.
Simultaneously the flow of money into the private sector was reduced. Then in about 1996 money began to flow out of the private sector, out of the country in fact. In about 1998, Money started flowing into the federal sector. This is the Clinton surplus. Money was rapidly flowing out of the private sector.
In 2001, the Bush administration started, and we had deficits again, but our trade deficit was really large. Except for a brief period in 2003, the Bush deficits were not large enough to compensate for the money going out of the country. Money still flowed out of the private sector.
People then turned to banks to get money. Private debt exploded. But the banks could create only so much money.
Finally in 2008, the economy crashes. Now there certainly were other factors which contributed to the 2008 crash. e.g. high inequality meant the Rich had excess money to speculate with, but the cumulative effect of money leaving the private sector from about 1996 to 2008 and the resultant huge increase in private debt was the main cause.
A friend of mine who was a local Republican precinct official told me a the beginning of the Bush administration that he had mixed feelings. "Republican Presidents," he said, "usually screw up the economy." In truth, deficits and sound fiscal policy never seems to matter, and harebrained belief in economic fairies always prevail. Generally, supposed anti-government Republicans usually grow the economy. All that happened under Bush who raised deficits to then highs during a robust economy. Now, Republicans have lost their supposedly recaptured--under Obama--principles and their concerns about deficits once again. Short termism once more triumphs over principle--if they ever had any to begin with.
2
Correct me if I'm wrong, but didn't President Obama have huge majorities in both Houses of Congress from 2009-2011? Still we got no meaningful healthcare bill and a popgun for a stimulus package. Oh yes, blame those Republicans. Our great President Obama should have struck hard while he could, but perhaps it was Ms Pelosi and Mr Reid who objected? Maybe? Think so?
8
@Gary Adams
I correct you; you are wrong. There was never a filibuster-proof majority in the Senate because the Republicans would not concede the election to Al Franken, and when that election was settled, Sen. Kennedy died. And, for all its flaws, the Affordable Care Act was a significant healthcare law that increased the number of insured Americans, slowed the rate of growth of medical spending and saved lives. And yes, things would have been much, much better but for the cynical, bad-faith and harmful in the extreme, outright obstruction of the Republican Party. So, I suppose the moral of this correction is that those who remember history are doomed to misinterpret it.
13
As studies show, Obamacare curbs federal and individual cost increases, all while saving an additional HALF A MILLION American lives a decade.
his stimulus turned Bush's -8% GDP into a decade-long 2% GDP and constantly lowering unemployment rate.
Both evolutions were calculated and predicted by the independent CBO.
"Not meaningful", you call this.
And that's precisely the problem with this country.
By the way, Dems only had a filibuster-proof Senate majority during 6 months in 2009, and until they lost Ted Kennedy's seat (2010). Needless to add that 1/3 of elected Democrats were representing red states. THAT is why, like in any democracy, each and every bill signed into law is a compromise between progressive ideals and Republican amendments, you see?
What you call "striking hard" simply doesn't exist, in a democracy. And as long as part of the progressives in this country will believe in this kind of silver bullets, all while staying home and as such actively contributing to directing the country into the exact opposite direction of those same ideals, progress, which is necessarily a step by step process, will happen slower than it could be.
Pelosi and Reid will sleep well at night, knowing that they saved 40,000 American lives a year, all while having risked their entire careers by getting the Democratic party together around a complicated compromise bill. THAT is certainly more courageous than standing at the sidelines and yelling "not enough!", isn't it ... ?
6
Don't forget that Mitch McConnell said the Republican goal was to make Obama a failed president. In addition to the hypocritical Republican "fiscal responsibility" mantra -- they wanted to make sure nothing good happened while Obama was president, regardless of what that meant to most Americans.
14
many were hoping for the black death to sweep the land. when that didn't happen, they had to settle for second best: Mitch McConnell.
What's a few million jobs when you have to keep those big donors happy? You know that old saying, "A smiling rich man is worth a thousand unemployed." Do the math: smiling rich donors x 1000 unemployed per donor = a few million unemployed. It is right there on page 135 of the Republican playbook.
5
This is an almost great little essay on the long, slow recovery. Here's the problematic last paragraph, however:
"So if you want to understand why the great slump that began in 2008 went on so long, blighting so many American lives, the answer is politics. Specifically, policy failed because cynical, bad-faith Republicans were willing to sacrifice millions of jobs rather than let anything good happen to the economy while a Democrat sat in the White House."
Krugman assumes I think just a bit too much bad faith on the part of the Republicans. Yes, they clearly were motivated to make Obama fail. And yes, they clearly have no real concern with debt. But they also, I think, do have a real concern with the thought that government support of normal people breeds dependency, and they are deeply allergic to that. They're happy to help businesses become "job creators," but they don't want to help the "undeserving poor" with direct government support. This is true ideology, grounded, I think, in deep resentment of government insofar as it has ever been either a source of taxation or regulation that limits business, or a support for liberal, cosmopolitan values.
many are happy to see the government foster dependence in the military contractor segment, though.
2
" policy failed because cynical, bad-faith Republicans ...sacrifice[d] millions of jobs rather than let anything good happen...while a Democrat sat in the White House."
True--Republican pols were liars--bilking the middle class for power and tax cuts ("re-distribution") to the wealthy. They were captious; misanthropic.
But Krugman too is cynical; cynics doubt people are as virtuous as they seem or say; they know power corrupts. The US constitution is cynical--protecting citizens from tyrannical majorities, moneylords, and myth-marketers.
"Date:1542
2 : the attitude of a cynic: as (a ) contemptuously distrustful of human nature and motives "those cynical men who say that democracy cannot be honest and efficient — FDR" (b) based on or reflecting a belief that human conduct is motivated primarily by self-interest "a cynical ploy to cheat customers""
All rational adults are cynics. Trump and his ilk are cynics too--believing people are selfish (thus easily conned), stupid (lacking foresight) and gullible (suckers for lies). Trump's greed turns his cynicism into a license to bilk.
The constitution's drafters were cynics too--but altruistic--designing a system to protect people from themselves.
Ironically that got called "Democracy"--by de Tocqueville-- the word is not in the US Constitution. He needed a contrast for --"Aristocracy".
But a century of myth-marketing has perverted the constitution, resurrecting Aristocracy--Moneyball; Neo-feudalism.
1
It must be miserable to be Paul Krugman. All he can see each and every day and when looking in all various directions is the shortcomings (or natural bumpiness) of America; and in every possible instance it all stems from the evil motives of those dastardly Republicans who care only about their own riches and who care nothing for American and its people. If only the noble and pure Democrats could have their way in all things, then all Americans would live in perfect harmony and happiness...
The whole concept of a balanced approach seems not to be in the DNA of PK.
It makes one wonder if he is actually that cynical and simpleminded...or if he just thinks the readers may be so described.
It's amazing that the adults at the NYT don't give him some guidance.
8
"If you are looking up from the depths of depravity, anyone can look good."
Explains Trump's "Best People" promise.
Paul = thanks for demonstrating again in writing that you have abandoned even the pretense of being an economist, in favor of full time fullmination as a partisan political hack.
One thing you might add to your "analysis" of the actions of those evil Republicans in Congress.
They were all elected by their constituents - and well before the Democrats blamed their worst election defeats on "the Russians."
Looking forward to your next sermon to the already converted. They illuminate so much.
6
@Fred Rick
Imho you don't even know what "partisan" means.
This is an OP-ED. That means that it gives a SUBJECTIVE interpretation of objectively proven facts. It also means that of course, if you prefer a different political philosophy, you will tend to want to interpret those same facts differently.
A democracy only thrives when there's a constant real, respectful debate between people adhering to different political philosophies.
In Trump era, however, supporting a different philosophy than conservatism (whatever that still means today - certainly NOT fiscal conservatism, as Krugman correctly points out) is BY DEFINITION rejected.
THAT is what "partisan" means when Republicans use that word. They simply refer to the fact that they disagree on certain points, but won't even start trying to find out on what more precisely, let alone come up with interesting arguments, as for them, not sharing their own political philosophy is enough to reject ANY opinion as presumably entirely false.
Don't you see how absurd that mentality is? And how it is actively undermining our democracy, because of your baseless and coward fear of any real and serious debate ... ?
Looking forward to any on-topic argument or debate ... not to "illuminate" us, but to TOGETHER think and fact-check and challenge each other's beliefs, so that TOGETHER as a nation, we can get closer to the objective truth.
Because truth matters.
2
@Fred Rick Come on, Fred, surely we aren't going to pretend that once elected all politicians do exactly what their constituents want? In fact, poll after poll shows that for the most part the majority of Americans disagree with many of the policies passed by those politicians.
Most recently those policies involve GOP priorities such as killing health care with no replacement, NRA extremism, climate change denial and tax cuts for the wealthiest Americans, something Trump claimed he would never do as president, lol. He also promised to bring in great health care, cheap, for everyone. Again, laugh out loud.
Americans are also appalled by the punitive, often random immigration policies, the corruption displayed by this administration, enabled by a pandering congress. Further, they do not want Roe vWade overturned and support Planned Parenthood. The GOP could care less about people's priorities and have big plans for more tax cuts for the wealthy, cutting Medicare and Social Security and reducing rights for everyone but their angry base of religious zealots and polluters.
3
I’m so glad that Obama relied on seasoned professionals, and not party hacks like Paul Krugman. Partisan politics are the one true evil that continues to threaten America.
3
@Rick
He invited Krugman to the White House too, remember?
And if you disagree with what Krugman writes here, why don't you try to tell us with WHAT more precisely, and why?
That would certainly be more helpful than rejecting an entire op-ed simply because it's an op-ed (because what else does "partisan" mean here ... ??).
What is threatening this democracy today is that more and more citizens refuse to engage in what citizens of a democracy have to engage in in order for any democracy to thrive:
- systematical fact-checking
- constant real, respectful debates about fact-checking and about the indispensable different interpretations of those facts due to the eternal existence of different, equally valid political philosophies.
"Partisan politics" means as citizens blindly following no matter what your favorite politician tells you to be the truth. In other words, in means confounding subjective opinion and objective truth, and no longer even trying to get closer to the objective truth.
I'm very happy that Obama and Democrats rely on experts in their field too, because that's what leads to fact-based and as a consequence efficient policies.
Rejecting this op-ed as "partisan", however, is THE perfect illustration of what "partisan politics" means. And yes, that's the biggest threat to America today.
3
@Rick. It's fine to be entitled to your own opinions, but not your own facts. Disagree with Paul Krugman on the merits of his arguments. You may say whatever you wish, but Paul Krugman is an educated, experienced, and thoughtful economist who studied and worked hard for years to attain his expertise and skill, just as, I am sure, you have in your given field.
1
@Barbara
I agree. Paul Krugman is an intelligent and well educated economist. He received a Nobel prize for his work on international trade and economics, and you don’t get that from a Cracker Jack box. If he wrote a regular column about international economics, I’d probably find it to be fascinating. But he doesn’t. His columns are virtually always about politics. They consistently sing praise about Democrats and castigate Republicans. The world is not so simple. For example, during all 8 years of the Obama administration, Krugman made fun of anyone that raised any concern about the deficit. As soon as Republicans came into power, he reversed his position.
I’m neither a Democrat or a Republican. I’ve voted for both, as well as third party candidates. I’m a long-time subscriber to the NY Times, but I also subscribe to the Wall Street Journal to get a more balanced perspective. And I have no use for partisan hacks.
Talk about “hitting the nail on the head!!!”
1
As usual Paul, you leave out the scariest part. The last two years of majority GOP leadership have "harvested" for them a parade of deregulations that present a real danger of producing another financial storm. Be afraid............again!
5
Yes Mr. McConnel and Mr. Ryan promoted the myth "We know everything everyone else knows nothing." Oh yes Obamacare must be repealed and the deficit the deficit must be slashed and must be guarded above all else. Everyone sucked up the myth Ryan a wonk on policy and McConnell keeper of the flame of financial stoicism will get us on the road to prosperity and we will
all be on the road to financial freedom. One thing Trump did for all of us that needed the veil to be lifted was...Seven Years! Seven Years McConell had to come up with a health plan that would be good for everyone. Guess what he had ZERO!!!!!!!!! And Ryan the greatest nerd,policy wonk helped Trump increase the debt to trillions and guess what the deficit we don't here about this everyday bc I guess it was a hoax and now Ryan is getting out b4 he is blasted everyday 4 not believing in much. He especially does not care about the
working man. This charade is over. It makes us wonder what does McConnell,Ryan, McCarthy Nunes do when they go to their office everyday from 8-5pm. NOT MUCH
3
"Republicans were willing to sacrifice millions of jobs rather than let anything good happen to the economy while a Democrat sat in the White House."
Addendum to the above quote from Mr. Krugman's op-ed:
. . .'while a Democrat AND A BLACK MAN sat in the White House.'
7
"Specifically, policy failed because cynical, bad-faith Republicans were willing to sacrifice millions of jobs rather than let anything good happen to the economy while a Democrat sat in the White House." I would modify this to . . . .while a Black Democrat sat in the White House." Ignoring the racial dimension to this self-inflicted wound surely smacks of rose-colored glasses.
6
No Republicans are qualified to criticize Trump for lying because their lies are so much worse, in substance and in the harms done to this country, this people and this world; and the proof for that is in last year's tax cut bill.
Bad faith politics come from bad faith politicians. And if voters keep voting these politicians into office, I can only conclude that they are either too cluelessly dumb, or utterly foolish. They are foolish because the damages that these bad faith politicians created affect also their lives.
So much have been said about these politicians, but what about the foolishness of the Republican voters?
And then they all stood tall and mouthed fancy big words about country and honor, and everybody clapped. It makes me want to puke thinking this.
3
Republicans are the anti Americans. There is no other way to describe them.
5
Very important this year to note that Republicans were able to impose austerity on the country in the middle of the Great Recession because the Democrats lost Congress in the 2010 midterms.
6
More than not wanting to let anything good happen to the economy under a Democrat, what drove Republican intransigence was their fear that Americans would see the benefit of government intervention.
Republicans worried that we might be entering another post-Depression, FDR-style era that would wipe them off the map of relevancy. So, Republicans instituted a reign of terror against anything that smacked of socialism. And, of course, the media bought in to the narrative that gave short shrift to a reasoned, compassionate and pro-active response to the Great Recession. And, also of course, Dems ran scared, afraid of their own shadows, unable to assert themselves in the way the great FDR did.
5
I always thought in 2009 when he size of the Keynesian stimulus was being debated (and opposed by the Repubs) that had it been much larger (as Prof Krugman at the time argued) that 'we could have hit two birds with one stone ' (please excuse the tired metaphor). We faced then and now more so than ever the world historical crisis of Climate Change, and we could have used the stimulus to restructure our economy to begin to rely much more on sustainable energy sources. And at the same time we could begin to rebuild our raggedy infrastructure. We would have set an example globally as well as we pulled ourselves and our trading pardners out of the the Great Recession. Now it might be too late as the Repubs have exploded the deficit anyway - and for nothing.
3
The slump lasted so long because of the bailout. We didn’t get the benefit of a recession: purging inefficient enterprises. Instead we propped up the imprudent and improvident instead letting natural free markets recycling those resources into productive sectors. Bank bailouts, the GM bailout, and extended unemployment benefits all have the same net effect albeit in different levels. Of course the politicians did that in order to bail out themselves, avoiding the natural consequence of their own unemployment.
@Bronson, your premise is utterly wrong. The Great Recession was NOT caused by inefficient enterprises.
Plus, the country would have plunged into another Great Depression had the auto and bank bailouts -- and massive stimulus package -- not been adopted.
Millions more would have lost their jobs. Hunger would have become rampant.
Stop believing so much in the magic of the marketplace. We tried laissez-faire capitalism in the 19th century and it was a complete disaster.
7
Republicans will pay any price for smaller government including bankrupting the government. Solvent government that adds value to the collective good is abhorrent them.
4
@Jude
Constantly rigging the game by abusing the government in order to shift wealth from the middle class to the wealthiest 1%, at no matter what cost for America's greatness, indeed makes the government look small, very small ... .
And the same goes for the people who commit this kind of abuses.
Compare that to the courageous Democrat members of Congress, who voted for Obamacare knowing that, as the CBO had shown, it would not only save an additional half a million American lives a decade, but also curb federal and individual cost increases.
THAT is what true greatness and "nobility" of character means.
After a decade of anti-American GOP abuse, it's time to make the government great again ... !
5
The bad faith politics of the GOP during the Obama years was all pervasive and it's amazing he accomplished what he did in spite of their knee jerk obstruction.
But what I find even more disturbing is the fact that not only have they continued to lie about the results of his efforts, which basically saved the economy no thanks to them, once given the majority, they immediately made a beeline backwards and have been very busy engaging in the same unsound ideological policies despite reams of evidence in states that had GOP governors of its abject failure.
Here we go again with a deficit busting and incoherent tax bill that blithely skips over the middle class and rewards people who don't need the extra, extra. While people from both parties agreed that corporate taxes should be lowered, naturally the GOP went overboard, as they did in their equally mindless gift to the military without serious consultation as to best practices according to that military. On top of that, they are once again attacking healthcare, also in a blind fashion, and particularly women's health care with nary an idea of what will replace a once functioning (huge) sector of the economy.
I don't think I've ever seen a more perverse administration and party in my lifetime.
4
The ''recovery'' (if you can call it that) has been on the backs' of workers and you, the taxpayer - of course
That is why it has (and continues) to take so long.
Socialism has been initiated for those at the top (to lock in their profits) while unabashed capitalism (the costs and risk) has been further downloaded upon you.
This has come by the state (again you the taxpayer) subsidizing profits for businesses through social payments. (snap and the like) Productivity is up, while wages are not. (especially against inflation for buying power)
You are working harder and longer for less, while all of the other costs (just to live) go up and are downloaded upon you.
Government itself is being privatized (let alone education - health care) and if you are going bankrupt to pay for the essentials, then you are not going to go out and purchase frivolous things.
The rich are though, which is papering over the numbers to make them seem like the economy is chugging along. They got a couple of TRILLION free (from you the taxpayer) to spend, so obviously, they are on a little buying spree.
I am sure cat food sales are up too.
2
The ''recovery'' (if you can call it that) has been on the backs' of workers and you, the taxpayer - of course
That is why it has (and continues) to take so long.
Socialism has been initiated for those at the top (to lock in their profits) while unabashed capitalism (the costs and risk) has been further downloaded upon you.
This has come by the state (again you the taxpayer) subsidizing profits for businesses through social payments. (snap and the like) Productivity is up, while wages are not. (especially against inflation for buying power)
You are working harder and longer for less, while all of the other costs (just to live) go up and are downloaded upon you.
Government itself is being privatized (let alone education - health care) and if you are going bankrupt to pay for the essentials, then you are not going to go out and purchase frivolous things.
The rich are though, which is papering over the numbers to make them seem like the economy is chugging along. They got a couple of TRILLION free (from you the taxpayer) to spend, so obviously, they are on a little buying spree.
I am sure cat food sales are up too.
5
In our market-driven economic system, business desires as little government involvement or regulation as they can arrange via political relationships. This has been the case throughout our history, and it is even more obviously true today.
The Republican Party has adopted the interests of the private sector as its own. In fact, the GOP owes its continued existence to the cash pipeline through which the private sector invests millions to insure that the status quo remains overwhelmingly favorable to its needs.
Absent from this symbiotic relationship is any regard or concern for the public welfare. Which is why anyone who supports the Republican Party, strictly from the standpoint of self-interest (unless you are swimmingly wealthy) is an utter fool.
3
@PaulB67, the tragedies of what you say are these: a) the GOP propaganda machine has focused on being anti-abortion and pro-gun, so that a swath of America whose focus is on these issues only, goes along with the GOP no matter what. b) poll after poll tells us that these two issues are not important to the rest of us-- individual liberty and a secure present and future for ALL, are. But we are ruled by a carefully crafted government where the ideas and desires of the majority take a back-seat to this carefully constructed minority. And in the end, no person wins-- only the corporations and a handful of oligarchs, who by their greed, prove that they are not "people my friends," anymore than corporations are.
And don't you dare go to an interview with wrinkles or gray hair or (gasp!) both. Because you know that when your hair turns, you've lost every single ounce of knowledge and should just be put on an ice floe.
5
The ''recovery'' (if you can call it that) has been on the backs' of workers and you, the taxpayer - of course
That is why it has (and continues) to take so long.
Socialism has been initiated for those at the top (to lock in their profits) while unabashed capitalism (the costs and risk) has been further downloaded upon you.
This has come by the state (again you the taxpayer) subsidizing profits for businesses through social payments. (snap and the like) Productivity is up, while wages are not. (especially against inflation for buying power)
You are working harder and longer for less, while all of the other costs (just to live) go up and are downloaded upon you.
Government itself is being privatized (let alone education - health care) and if you are going bankrupt to pay for the essentials, then you are not going to go out and purchase frivolous things.
The rich are though, which is papering over the numbers to make them seem like the economy is chugging along. They got a couple of TRILLION free (from you the taxpayer) to spend, so obviously, they are on a little buying spree.
I am sure cat food sales are up too.
2
The ''recovery'' (if you can call it that) has been on the backs' of workers and you, the taxpayer - of course
That is why it has (and continues) to take so long.
Socialism has been initiated for those at the top (to lock in their profits) while unabashed capitalism (the costs and risk) has been further downloaded upon you.
This has come by the state (again you the taxpayer) subsidizing profits for businesses through social payments. (snap and the like) Productivity is up, while wages are not. (especially against inflation for buying power)
You are working harder and longer for less, while all of the other costs (just to live) go up and are downloaded upon you.
Government itself is being privatized (let alone education - health care) and if you are going bankrupt to pay for the essentials, then you are not going to go out and purchase frivolous things.
The rich are though, which is papering over the numbers to make them seem like the economy is chugging along. They got a couple of TRILLION free (from you the taxpayer) to spend, so obviously, they are on a little buying spree.
I am sure cat food sales are up too.
2
The Foxes stole all the Golden Eggs,
and drank toasts with fine champaign.
Old Goose they'd starved, and longed to carve.
They delighted in her pain.
Oh! They danced to her cries of pain.
Old Goose she died.
Away Foxes did fly
to their Islands in the Sun.
And the Sheep they'd fleeced
did cry and bleat,
waving bibles, flags, and guns.
But the Foxes had their fun
on their Islands in the Sun.
1
Nothing changed because no one went to jail.
149
@vandalfan Well, except for Bernie Madoff. He stole from rich people.
1
@vandalfan Boom. No one went to jail because the state is not separate from the market. We live in a political economy, not a system with a market sphere upon which a state intervenes.
1
@vandalfan
Precisely vandals. And we continue to privatize profit & socialize risk.
-- banned 21
In the Senate in 2009 a small group of Ds demanded more tax cuts and less stimulus. The Ds had to compromise in order to defeat a R filibuster in the Senate. This notion that tax cuts will magically work wonders on anything. Stimulus for infrastructure repair was a more useful place to activate the economy.
I take exception to the idea that the main culprit of the 2008 crash was the housing real estate bubble. If it had been just that alone, the 2007 recession would not have morphed into a near death experience for Western capitalism. What really made the financial crises rock was what was built on the residential AND commercial real estate bubbles - securitized bond issues and CDS and CDO derivatives that were "engineered" to appear to be low risk investment grade assets. All of those assets were based on the junk mortgages originated by commercial banks, private mortgage brokers, Europe's big and not so big financial institutions and Wall Street's Big Five investment banks using massive amounts of leverage. And they were financed using short-term loans secured through the perceived value of the derivatives mentioned above. It was the collapse of the derivatives' value after they had spread the contagion of sub-prime lending throughout the Western world's economic system that caused the 2008 collapse. So the crises' trigger may have been lousy real estate underwriting, but the disease that almost killed the patient was unregulated and fraudulent cowboy capitalism in financial debt markets.
And by the way, all of that is still going on today.
7
100% on point!
1
Homeowners should have been bailed out. Homeowners were least responsible for the housing collapse; after all, Greenspan was testifying up until the very end before the collapse that there was real value in those mortgages. How were homeowners to know that behind the scenes bankers and brokers were fraudulently pumping up the value of housing? And yet homeowners got stuck with over-priced mortgages, got foreclosed, and ended up with 20 to 50% less wealth. Meanwhile, banks bought those foreclosed houses for fair market value and rented them back to former owners. Bailing out the banks and not the homeowners was bad economic policy and wrong. They should have been allowed to refinance their homes for fair market value which would have been a much-needed stimulus to the economy, and would have made homeowners whole.
5
While "unemployed looking for work" is the common BLS stat provided by journalists none of the official statistics I am familiar with (GDP, payroll employment, etc.) measure the product or employment in the underground economy. Besides drug sellers and sales there are myriad opportunities on the internet for unaccounted for YouTubers, eBay entrepreneurs, etc these sectors are surely much more important than 10 years ago and yet we seem to stumble along without appreciating their contribution to employment and GDP. Isn't this significant?
4
Let's not forget Tim Geither was one of the architcts of the financial collapse when he was president of the NY Fed. He was practiced in looking the other way. He was a terrible appointment by Obama who never realized that. In fact the Obama administration was almost as much owned by the banks as were Bush and Paulson.
Obama and Biden both campaigned on changing the bankruptcy code to permit homeowners to write down their mortgage debt to the value of their homes, just the way every business can do with every one of its secured debts. As soon as they were elected we never heard about this proposal again. The big bankers got to them. I am intimately familiar with this situation because I was a partner at one of the largest law firms in the world in their NY office during 2007 to 2009. My speciality was bankruptcy and corporate restructuring.
5
This is a hyperpartisan essay which gives a distorted view of why the effects of the Great Recession lasted so long.
Essays like this make some conservatives believe the NY Times is fake news.
When fraud was discovered at Enron, Jeff Skilling went to jail. The perpetrators of the Great Recession did not however receive criminal trials. That would have been Obama's justice department which failed to prosecute Dick Fuld, Angelo Mozilo and others who had apparently bent the rules according to many books written at the time.
And make no mistake, it was fraud, although the blame was widely dispersed. If everyone is doing something wrong, it can't be wrong, right?
The investment banks had devised complicated derivatives which only they fully understood and sold them to pension funds which had balances decimated when housing prices fell.
Why is it that when a poor person steals a pizza from a 7-11 with a gun he goes to jail, but a banker can preserve his vast fortune in spite of selling derivatives that destroyed pensions of the little people?
Add to this the fact that Obama's ARRA was way too small and had very little infrastructure spending. Compare China. It has recently built about 16,000 miles of high speed electric rail.
The US has one such project in the planning stage, a rail line from LA to SF.
And Obama has the gall to PREACH about global warming when he had the opportunity to replace some autos with high speed rail!
The sanctimony of liberals is amazing.
6
@Jake Wagner: Your comment is off-base in almost every particular. To buttress your case of their negligence, you left out Dodd-Frank, the Consumer Financial Protection Bureau, and other Democratic initiatives. You omitted the fact that ARRA was too small was because Republican legislators fought against it tooth and nail. There were no major infrastructure initiatives like high speed rail precisely because Republicans challenged all large and forward looking government-funded projects. Even today, Republicans are trying to weaken Dodd-Frank and CFPB.
But the big take away here is the seismic shift in Republican attitudes about government deficits. Krugman mentioned one time Republicans threatened to not raise the debt limit because they wanted discretionary budget cuts. But from 2010-2016, Republicans made multiple threats to shut down the government or refuse to raise the debt limit; in fact they did shut down the government in 2013 for two weeks, and cost us money in the process. Yet one year into the Trump administration, these dedicated deficit hawks passed a gigantic corporate tax cut, resulting in a dramatic increase in deficits projected well into the future.
So, please spare us the apoplectic indignation about the "sanctimony of liberals." We all know who the hypocrites are.
5
A question: exactly what laws did Dick Fuld break?
3
@Jake Wagner
Uh ... and this is coming from a Republican ... ?
You're blaming the only political party that supported a $878 stimulus and turned around Bush's -8% GDP into a decade-long steady 2% GDP, and that invested in infrastructure works and created the Consumer Financial Protection bureau, Paris Climate agreement to not do enough, all while supporting the party that constantly attacked him for doing so and obstructed these attempts and today is trying to get rid of each one of them ... ?
And then you blame a NYT op-ed about deficits not for getting facts or arguments wrong, but for not spontaneously adopting your own subjective opinions, and that is your measure to claim it's not a credible newspaper ... ?
Where's the coherence or intellectual honesty in all of his ... ?
4
How and when congressional Republicans became slaves to the rich is a topic for better minds than mine. But an element in the abandonment of any pretense of fiscal responsibility can be found in a statement of 1988 presidential aspirant Gary Hart when he said, referring to campaign funding, “We’re independent contractors.”
Not any more, thanks to the “Citizens United” ruling. Why are the parties so partisan? Because the money comes from the parties now. Loyalty to the party is not optional unless you are planning on ‘pursuing opportunities elsewhere’. Republicans have become the party of oligarchs. Good luck to us all.
2
Question 1. What percentage of the human population has low empathy?
Question 2. What percentage of the Republican Party and corporate CEOs have low empathy?
Question 3. Why would anyone want low empathy people in charge of the rest of us?
3
We don't live in Lake Woebogone.
The republicans believe unrestrained business executives will promote everyone to the top of the pile, but its a pile and someone has to do the work, and those people deserve as much credit as anyone.
3
The folks yelling at President Obama because he didn't do this and he didn't do that either need to show up and vote, or stop complaining that Trump acts like an autocrat.
Similarly, if you want Republicans stopped in their tracks--and you ain't seen nothing yet--vote, or shaddap.
2
I wish those eternal GOP boogeymen "tax-and-spend Democrats" would do some actual taxing and spending.
Here is even a scarier observation. Why are the Republicans in office after this travesty?
Why can't this information be accepted by the citizens who were most affected?
Is it because we are so overwhelmed with our lives and financial burdens that we do not have the energy it takes to sty on top of all these issues?
If this could be explained in six words for those who are working 24/7, maybe that would get everyone's attention.
Until then most of us will remain in the dark.
You need to reach those who do not read the New York Times or watch public TV.
7
So how do the GOP get away with this scam? Well look at the coverage of the national debt during Obama and now. Back then when the deficit and debt were the lesser problem, it was in the news every week. Now when it has been exploded by tax cuts for the rich and corporations we don't hear a thing about it except on comedy shows. Shame on you corporate media shills.
6
Essentially, nothing has changed since the Reagan era supply-side economic disaster. (let's quadruple the debt, yea) The deficits and debt will continue to explode into the future and the GOP will blame “entitlements” from the Dems—mainly to cut benefits and move money into rich pockets. That propaganda has worked for decades.
With zero financial instruments available now to help correct a deep recession…well…hold on to your bonds…the worst is yet to come. It is just a matter of time.
We must all speak and share these truths in the next six weeks. We must make clear what Republicans have perpetrated.
2
And republicans knew they would get away with their insane obstruction during Obama years, and wastful tax cut under Trump.
They are getting away with murder simply because they are supported by 40% of the public no matter what. The power of right wing propaganda.
5
With austerity in Europe and a pathetic recovery at home in the US where good full time jobs that pay well are hard to find or nonexistent. Where companies keep hours below full time on purpose to avoid paying benefits. Where companies use temps instead of offering permanent jobs. Where young people graduate from college strapped with debt to find no jobs or at best underemployment. Where young people end up living with their parents because they can't afford rent or house payments (only to be ridiculed).
Where all the above, and when the people responsible for this mess became even wealthier, and the we wonder why it is that hate groups, neo-nazis, white supremacists, and nationalists become prevalent?
Adam Smith talked about 'creative destruction' but when societies depend on corporations and elevate corporations to some untouchable ideal that is exempt from taxation - - this is what you get!
If you want society to work, you need government. If you want to make money, you need a business. These are two separate entities. And to say that we need the government to operate more like a business is just patently wrongheaded. Corporations and businesses do not care a whit about society, or cities, or countries unless there is a monetary benefit to them. Once they find a better deal, they're gone along with the jobs and the tax base.
So now we have social unrest in the US and Europe. Who could have seen this coming?
7
@JD Ripper Well... anyone who knew that German pensioners were going to get squeezed by taxes while inviting 1.5 mil military aged-men with no German skills to join The Dole. Pretty clear this was a bad idea. Perhaps 250k skill-less 3rd worlders would be enough for German neighborhoods to absorb.
@Steph
Part 2 of this was the destabilization of the Middle East by the US invading Iraq and creating a power vacuum when Saddam was overthrown. The dominos started falling all across the Middle East and a refugee crisis was initiated. Where did the refugees go? Europe was the logical safe choice.
You couldn't plan an outcome where the European right wing had so much red meat to chew if you tried.
It's always self-serving, double-dealing, deceitful Republicans. When they lose the Congress, they will probably turn to bank robbery and home burglary. Because, let's face it, they STILL don't have enough money, and they still haven't hurt the have-nots enough.
1
By any objective measure, our Republican led federal government has delivered results. Our economy is booming, wages are increasing, and unemployment is at historic lows. The “slump” lasted throughout Obama’s tenure because he was an anti-business economic illiterate. His “you didn’t build that” philosophy crushed innovation with strangling regulations, etc. Tax cuts and deregulation work every time. Crazy Keyenesian spending is a recipe for disaster.
4
@Registered Repub
Except that there is NO way to show that the current economical boom and wage increase and low employment is the RESULT of the current GOP government, because:
1. it's the EXACT continuation of the Obama economy, as not one single economical graph shows any Trump dent, and
2. Republicans didn't pass any major, fact-based economical legislation yet.
So stop inventing stories and start admitting the truth: it's Obama who turned Bush's -8% GDP into a decade long +2% GDP, and who cut Bush's $1.4 trillion structural deficit by two thirds.
The only "economic illiterates" here are GOP voters who still blindly follow no matter what GOP tweet rather than finally starting to do some fact-checking themselves.
As to the "you didn't built that" meme: look at the video and you'll see that Obama was referring to roads and bridges, built by taxpayer money, NOT to the building of a private sector business.
Stop letting yourself be fooled and start to think for yourself, if you care for this country ... !
2
@Registered Repub
Let's see how much blowback you get to your comment. Did you really expect to get a lot of high fives? First of all, wages are not increasing. And President Obama was not an "anti-business economic illiterate." For years while he was in office, pundits wondered why business owners were sitting on their stores of $ instead of investing it. They could have been doing so much more to help the recovering economy but they chose to wait for a more sympathetic party in power. And how about that deregulation you are such a fan of? Like making it easier to release methane into the atmosphere...I see, it doesn't really matter whether we have a country or a planet left for our kids and grandkids as long as we are comfortable right now.
2
Debt is the last four letter word that horrifies most Americans. Like several others, it is essential to life.
When you talk about Republican hypocrisy you may as well go back to their patron saint. Saint Ronald Reagan ran as a fiscal conservative who was going to wipe out the budget deficit and pay off a large portion of U.S. national debt. After eight years of running the United States he quintupled the national debt for less than a trillion to over 4 trillion. Ronald Reagan is the guy that all members of the GOP have cited as their standard bearer of conservative ideals. I rest my case on the dysfunction of the Republican party since 1980.
4
Republicans' cold-hearted immorality in the Great Recession is similar to the cold-hearted immorality displayed by their man Richard Nixon when he made a secret deal with the Vietnamese to continue the Vietnam War for several more months to insure his election, thus sacrificing the very lives of thousands of teenaged American boys for political gain. Republicans are, and have been for years, a criminal organization operating on behalf of American oligarchs. Nothing else. They should be thrown out of office and into jail as rapidly as it can be managed, and we shouldn't stop until we've held every last one to account.
1
America is indeed the "land of opportunity." The Republicans and the neoliberal Democrats have given the rich the opportunity to steal everything that isn't nailed down.
Reagan proved deficits don't matter.
We won the midterms Paul, This [ massive deficit spending] is our due.
- Vice president Cheney to Treasury secretary Paul O'Neill in 2003.
Citizens United: Political spending is a form of protected speech under the First Amendment, and the government may not keep corporations or unions from spending money to support or denounce individual candidates in elections.
Corporate money equals political power. This is the formula that underlies everything the Republican party stands for, every policy it promulgates, every piece of legislation it proposes.
It is no more complicated than this. There is no money trail to follow down a dark corridor of greed and corruption. Everything is right out in the open, transparent and bearing the stamp of approval of the Supreme Court. There is no reason for Republican leadership to pretend otherwise, especially since there is no liability, as evidenced by their control of all 3 branches of the federal government as well as a majority of state legislatures and governorships.
While the overt nature of Republican loyalty to their corporate benefactors is repugnant, it is at least understandable; it keeps them in power. What is truly astonishing is how many people support this theft of our nation's wealth and well-being by voting into office the very men and women who built this system to enrich no one but themselves and their corporate overlords.
I read sites across the spectrum and am bitterly amused to still see all the angry comments aimed at "O'Bummer" or "O'Bozo," at his weakness and failures and destruction of America and yada yada yada. If these writers had any capacity for self-reflection - which obviously they don't - they would realize that they wanted him to fail and rooted for him to fail. The Republican Party obstructed any and all efforts to help the President improve our national situation, whether it was concerted resistance to infrastructure stimulus or the same blanket opposition to the ACA, a plan originally birthed in conservative think tanks and championed by the likes of Mitt Romney. They succeeded well and managed to elect a strutting ignoramus with an immense talent for distraction while behind the scenes their termite minions chew up our national safety net for the benefit of the wealthy and influential.
2
“It’s the republicans, stupid.”
To paraphrase James Carville, campaign strategist to Bill Clinton against President Bush, “It’s the economy, stupid.”
What's our problem?
Republican policies implemented when republicans controlled the White House and Congress are the source many of our country’s social and economic problems. Control rising up since the terms of President Nixon to today’s Trump-led federal government.
1
Now ask yourself why anyone would knowlingly vote for a party that is not tackling growing income ineequality. That's really the question. You can demonize the Republicans all you want but that begs the real question. The answer, I believe is rooted in racism, xenophobia and the idea that the state religion in the USA is an odd form of Christianity. The tea party never cared about fiscal responsibility, they just wanted to stop abortions and keep minorities in their place. The best way to do that was to reduce social outlays - the biggest slice of discretionary spending. Until the rest of us actually go to the polls we'll continue to put up with sham economics rooted in racism, xenophobia and phony religion.
2
The demon lurks in the tax cut. Beware October.
In this column Professor Krugman provides a concise and accurate history of the economic policy of the past 10 years. Other than perhaps his imputations of Republicans' motives, nearly every American voter should be able to agree on the basic outlines of the historical facts he describes. What I find so frustrating is that only a minority of Americans (from what I can tell) seem to grasp this basic narrative and utilize it in making their voting (or nonvoting!) decisions. It is enough to make one despair about the possibility of rational popular rule. One change that might help a little is if TV news journalists were to move away from their obsessive coverage of the scandal de jour and focus more on explaining the big picture. One thing I am continually surprised about in conversation with friends and acquaintances is how often they can describe the accurately the trees but seem confused by the forest.
5
It is very difficult to understand what is the Republican end game. Are they in a tribal zero sum game with the Democrats (you win, we lose, and vice versa), basic ideology aside? Or do they have a deeply ingrained belief that anyone, no matter the circumstances of their birth, can get ahead with hard work? Those that don't make it have only themselves to blame. Perhaps, more cynically, the world order as they see it must have legions of poor people making low wages to make it possible for the rich, and aspiring rich, to prosper and maintain their position in society. Does their sense of worth require having large numbers of "little people" at their beck and call? In fact, this is how things were since ancient times before the industrial revolution and the emergence of an organized and politically powerful middle class. Peasants not too long ago could be executed for hunting on the land of the aristocracy. Is there a deep impulse in human nature to create social stratification? Ultimately, it is a question of power. For progress to resume in the creation of more egalitarian societies, people, workers, communities, regions must organize and press for their share of what it takes to live with dignity. Otherwise, our erosion back to a 19th century world order will continue.
5
Thank you for this eye-opening essay, Mr Krugman. One slight quibble: I think the determination behind the Republicans' unprecedented refusal to cooperate with the president came from a willingness to sacrifice millions of American jobs rather than let anything good happen while a black man was in the White House. The root of their attitude wasn't partisanship so much as the fear of minorities "taking over."
8
Thank you professor Krugman. Hopefully we can reward your astute observational powers with a position in the next Democratic administration that is tasked with cleaning up the economic malfeasance of the combined efforts of the Republican party and the Trump administration. Now if we could only get an Avenatti type politician to slap Republican voters in the face with this argument. Alas, we must exit the post-truth phase of American politics before any such message has a chance of being believed by those who have been conned into believing that voting Republican is good for the economy.
1
"But the most important reason the great slump went on so long was scorched-earth Republican opposition to anything and everything that might have helped offset the fallout from the housing bust."
Forget Trump. The biggest PROBLEM in this country is the greedy, corrupt GOP.
2
What a joke to blame the Republicans. Obama spent trillions to bailout the Too Big to Fail banks. Democrats had majorities in both the Senate and House. We could have stimulated the economy by allowing the banks to fail and be recapitalized by the government. We could have then refunded the Individual Federal Tax Returns, up to $50,000, for the last five years, 2003 to 2008. Wealthy people would have been the big losers, the housing crash and foreclosures would have been avoided and the benefit would have gone to the middle class. We could have cut immigration to the United States which would have raised salaries. It would have been the perfect time to cut immigration since the economy was already in turmoil. The Republican weren't any better but lets remember, the Democrats had complete control of the government and they choose to bail out the rich and allow the middle class to flounder.
1
Letting all the perpetrators off the hook was a catastrophic mistake, the perception was that you can commit a financial crimes with terrible global consequences and go free, that perception eroded what was left of any trust in public institutions and justice.
BIG MISTAKE!!!
We the people, will be paying for generations to come.
4
Just so's we know, there was an excellent article in the Times this week on Obama's decision to focus on getting the financial system back up and running, almost to the exclusion of all else.
It's fair enough to criticize that choice, though I for one really do wonder about the sanity of the "let them all crash!" types.
But the screeches against Obama from left and right alike (and right there, that similarity ought to get some of the Berniacs to grow a clue) about how he didn't do this and he didn't do that and he didn't do anything are just bonkers. He did rather a lot, as anybody watching Trump trundle around trying to break every single thing that was new and working ought to know.
And also: Krugman's point is in many ways pretty simple. When economic times are good, you spend on such things as infrastructure and education, because they're not only smart investments in the future, they act as a sort of rainy day fund. And you cut borrowing, because you can.
And when times go bad, you cut taxes for the middle class and below, and government borrows to keep things running, and for jobs.
The Right's theory is nah, do it the other way around. And since that doesn't work for beans, be sure to grab as much loot as you can while the economy churns. Then blame lefties for what you grabbed.
6
The Biggest Republican hypocrisy was bailing out the people who caused the crisis. They ignored the principle of moral hazard with corporations and banks but continue to apply it liberally to people who really do need a hand up - the homeless, the sick, children, immigrants. For them, the crisis never ended.
3
Dr. Krugman, well stated as usual. However, you let Obama off way too easily as usual. He was swept into office on the heels of a 14 million personal volunteer 'army.' His very first action? Tell them thanks, I'll take it from here. "You're fired", to use today's parlance.
He could have-should have-asked them to march on Washington. Asked them to stage sit-ins in their own towns. Republican obstruction? He idolized Saint Ronnie, more so than Bill Clinton, in his own words. Take a page from the Ray-gun playbook. "Go over the heads of congress and straight to the American people."
Then Obama proceeded to declare "that we can either save the banks or punish them. We can't do both." I knew right then that we had been sold a bill of goods.
Follow that up by "dithering" on health insurance reform for two years. Not getting his own fingernails dirty. Handing it off to Max Baucus and Joe Lieberman. Figuratively fiddling on health care while the economy was in chaos. He does get credit for stopping the bleeding. But not for truly changing the foundation of the economy.
Then the ultimate back stab to the working people of America. The extension of the Bush tax cuts for the already filthy rich.
Of course fixing the economy was not his priority. Fixing it for the investor class was.
I say this as someone who voted for Obama. Twice. Given the alternatives, what choice did I have?
1
The prob is, none of this actually happened, and it's pretty hard to get swept into office on anybody's heels.
As a strong supporter of Obama in general you can’t blame it all on them. Obama was timid in his stimulus, let the health debate take too long and give Republicans power. Okay, he had obstructionist Congress, but he never learned to wield the “big stick” of his office. A speech isn’t the same as the hard political work. Read Too Big To Fail about how the bankers were incredulous he never asked them for anything while bailing them out.
Never elect a Senate newcomer again, with little experience in using power of office.
7
@Bruce Kirsch
In real life, when signing the second part of TARP (the bipartisan bailout, in other words a LOAN), it's Obama who attached strings to it, forcing banks to pay back those loans fast, and WITH interests. Which they did.
As to the Recovery Act: it's BECAUSE he's extremely competent when it comes to organizing people who have different interests and ideas that he managed to get a $878 billion stimulus through Congress in only a MONTH in office.
And from the very beginning, the idea was to pass a second, similar passage a year later.
The only reason why that never happened is because by then, "we the people" got distracted and allowed the GOP to destroy the Democrats' filibuster-proof majority.
Conclusion: as Obama had decades of experience in bringing people together, negotiating and getting things done, he turned around a -8% GDP and created a decade-long solid economic growth, passed the first HC reform bill in decades, which will soon have saved a whopping half a million American lives, brought us to full employment, strongly invested in the arts and sciences, strongly increased our international standing and collaboration with allies and foes alike, and convinced the entire world to for the first time come together and start tackling climate change.
And all this with a totally corrupt GOP who was and is spreading fake news on a daily basis, and can't achieve anything in Congress.
"Timid", you call this ... ?
Not very credible ... ;-)
1
@Bruce Kirsch You have it backwards. Never re-elect an incumbent. They are all corrupted puppets of the money donors.
Why can't Democrats use Krugman's article to campaign in this year's elections and in 2020's? Do what the GOP does so brilliantly: hammer home a single message.
Surely some talented wordsmith can come up with some pithy campaign phrases -- about Republican hypocrisy and how they always manage to line their own pockets at the expense of the rest of us.
Let's make sure the Dems stay on topic -- and let Trump voters know they've been had.
8
The only way to reduce a complex reality to simple slogans is to distort the truth and start lying.
The reason why the GOP is supposed to be so good at "messaging" is because they founded Fox News, which spreads fake news 24/7 and created a complete "alternative facts" world.
Once you do, it becomes easy to give your base the impression that you get it and fight for them: all that is needed are 250-character tweets that copy-paste Fox News talking points.
Democrats, however, still have the guts and moral character to stick to the truth.
And the truth is that any real, lasting, radical, non-violent, democratic legislative progress is step by step progress. You need a LOT of explications for people to understand this. In other words, you need what Saul Alinsky called "politically literate" citizens.
Building a majority of politically literate voters takes much more than some simplistic and false slogans. It means constant engagement on the ground, teaching people how to fact-check, how to study who's doing what in DC, to understand how compromising works, to learn to distinguish integer politicians from fake politicians, etc.
Fox News made conservatives believe that liberals are "evil people", so now Republicans don't have to do anything to get their vote anymore. "Not Hillary" is enough for them to go out and vote for the exact same GOP politicians who are betraying them on a daily basis.
Democrats need well-informed, engaged voters, and that WE have to do ...
4
@Ana Luisa If it's that hard, it ain't happening. Pithy phrases don't have to be dishonest; Krugman's columns are full of good ones, and political guru types are constantly recommending others. The problem has been that Dem leaders, even the sainted Obama, constantly reject them.
@Keithofrpi
It happened each time major progress has been made in DC (whether on civil rights or the New Deal).
Time to have a little more trust in our own power as citizens, and to start acting, rather than standing at the sidelines and keep on yelling "not enough!" to those who fight in the mud ... aka Dem politicians.
We don't need no false promises from gurus.
We have all the fact-based policies that can end the GOP corruption and move us into the direction of progress for the middle class again.
No more excuses. Time to vote! ;-)
The GOP game plan is simple. Count on a base that accepts alternative facts. Make a mess of government finances when in power. Rebrand the party as fiscally conservative when losing power. Blow the dog whistles loud and often. Keep the donors happy by favoring legislation for the oligarchs and against the working poor.
6
New York is a Democratic majority state; NYC is too - and yet, check out our infrastructure, our disgusting subway and bus system, our rails and roads, our public buildings, such as courthouses, which are dumps beyond belief. So, please don't tell me it's all the fault of Republicans.
1
Deficits during the Great Recession were hyped by Fox News. My mother-in-law proclaimed that Obama's trillion dollar deficits were going to destroy the country. When I asked her why she wasn't worried about the $10 trillion run-up in debt caused by Bush, but now was worried about the 11th trillion, she just looked at me. My mother-in-law, by the way is college-educated and had a career in insurance. Unfortunately, she only watches Fox News because the other media is "biased".
4
Finally, you lay it out in clear. comprehensible terms. Geithner was the wrong choice; he sees money, not people. He's a Wall street guy, for heaven sake. The money illusion triumphed once again.
4
That the Republicans played obstructionist politics during the entire Obama Administration is true. But what is also true is that President Obama, for all his qualities, was also ill equipped to fight back. His personality disliked controversy, battles, and strong arm tactics. The bully pulpit was an abstraction to him. As such he let the Republicans run circles around him. He also gave up too easily on major initiatives, such as the public option in the ACA, and in attempting to satisfy the Republicans without a fight. Remember when he was willing to negotiate a budget deal with Paul Ryan without any pre-conditions?
A Hillary in the White House would have beaten the Republicans to a pulp. What we needed in the White House was a lion. What we had was a lamb.
2
"In English, nobility is defined as human excellence, as that which is illustrious, admirable, lofty, and distinguished, in values, conduct, and bearing" (J. Kornfield)
There's a reason why Republicans, traditionally cultivating "nobility" as a natural part of conservatism as a philosophy and as inherited from the Ancient Regime at its best, since a decade now all of a sudden turned their rhetoric and campaign ads against "the elites".
It's because they were perfectly aware of the fact that they themselves no longer even tried to live up to "nobility", in the real sense of the word, so they urgently needed their voters to start hating everything that looks like the "elites", because if not, they would soon find out how utterly "amoral" they had become, as a political party.
And there's also a reason why they hated Obama so much, apart from racism (which some, but not all conservatives share): they knew that he was THE perfect incarnation of real "nobility", both when it comes to his character as a man, and the way he governed and kept sticking to his very stable moral compass, even when the GOP, for eight long years, was focused on only one thing: lying and cheating so much that people would start hating him and start believing that liberals are "evil".
And so it's Obama who cut Bush's $1.4 trillion deficit by two thirds, but Republicans who today already doubled it, and then falsely accuse Obama for the debt increase during 2008-2016.
Only nobility is TRUE greatness.
2
Look at the GOP voters' comments here ... not ONE of them is on-topic.
Most of them probably didn't even read this op-ed. They simply repeat GOP talking points over and over again, without even starting to think about the fact that you cannot possibly be a real, engaged patriot if you refuse to fact-check your own spontaneous beliefs and subjective opinions.
Yes, all objective evidence shows that GOP politicians have become totally amoral, hypocritical, and detrimental to the backbone of this country, the middle class.
But GOP voters have to be blamed too, not for being amoral and hypocritical (most of them are very good and decent ordinary citizens, contrary to GOP politicians) but for so blindly following 250-character tweets and then categorically refusing to engage in any real, respectful, on-topic debate.
It's when part of the citizens no longer respect proven truths and start to withdraw from serious debates that a democracy risks to implode.
As soon as GOP voters remember just what it means to be a citizen of a democracy again, the wealthiest elites won't be able to buy their votes anymore, and Russian meddling into the elections won't have any serious impact anymore.
Conclusion: our first goal now should be to invite GOP voters to have real, respectful debates again. Only THAT will allow us to fight back, liberals and conservatives TOGETHER, as of course we continue to have much more in common than what divides us.
2
Beg pardon Mr. Krugman, I think you leave out one aspect of the crisis that still lingers, and that was the contraction of credit. During the crisis, there was lots of money made available tax free to banks, but they were not lending the money to the bottom 90 percent.
If a person went into the crisis with credit card debt, that credit was deeply constricted with lines of credit dried up, and interest rate spikes that resulted from the damaged fico scores. I know this is still a problem, because it is still happening to me. The constriction of credit available through the crisis and the ultra high rates of 28+% charged by banks that were getting money for free was the biggest fraud of all.
I think to miss this point is to miss the whole effect of the crisis on the working class.
4
But look how far cynicism, bad-faith, and obstruction can get you. The Supreme Court is lopsided toward conservatism. Republicans control the federal government. And a critical mass of Americans believe alternative facts (or don't give a hoot about facts at all). In politics, moral reasoning can't compete with Machiavellian methods.
4
This note explains why no Republican, at any level, for any office, can be trusted. It also explains why the only reasonable government "job" that should be allowed any Republican is "inmate".
I will not vote for any Republican until there is a demonstration they have learned, they refuse Koch money, they go fact based, and they acknowledge the disaster they have made for the country and the planet.
I am not holding my breath.
Yes, there are some Republicans, at some levels of government who are not all bad, all the time. (Some of the mayors interviewed on the weather channel recently appeared fully adult, and very much just what you want to see in a mayor.) That said, on policy levels and non-local politics, there needs to be a complete reckoning, apology, and commitment to lawful, factful governance. Even the mayors, who did well with evacuation and short-term preparedness, and will likely do well with recovery, failed utterly with strategic preparedness because of their lie-based belief in the non-impact of climate change.
2
NYTimes. I knew this, but thank you for reminding me. Can you please again run the article or articles that explain how some people, who are crucial to the plurality necessary to embrace the characteristics of a sensible society and are now identified as the base Trump conservative voter, do not see this.
Don't bother. This is also too obvious. Once someone achieves money, they achieve power. And the struggle to change economic status comes at a price and the price, not unusually, insulates against any empathy for those who have not or cannot make the same transition.
The sense of threat that caucasians may feel at the prospect of becoming a minority is purely based on the bigotry that has been employed in gaining ascendancy. Their concern is unfounded. Once minorities of any kind achieve economic power they will also embrace the conservative view of the underachiever as lazy or incompetent or unworthy.
1
Also don’t forget Ted Cruz’s government shutdown that caused automatic spending cuts across numerous government agencies. These spending cuts also impacted the recovery and belong fully on the GOP.
7
Sadly, the economic crisis hit European countries, even at the lowest levels of the political structure, because municipalities and such invested in hedge funds.
Things were bad enough when the Republican party ruled both houses with a Democratic president, basically stopping anything good from happening. Now, with a Republican president and both houses anything goes, regardless of taxpayer's wishes, common decency , and the welfare of our nation.
3
The factors like financial profligacy, regulation averse reckless banking, and the risk hiding complex financial instruments that were behind the 2008 economic and financial crisis have begun making their presence in the economy it could be safely predicted that another financial crisis is about to strike with similar catastrophic consequences.
3
"When Christina Romer, the administration’s top economist, argued for more stimulus, Tim Geithner, the Treasury secretary, dismissed it as “sugar.”"
Well, maybe Obama shouldn't have appointed Geithner, a former Kissinger and Associates employee, later mentored by Rubin, a Goldman Sachs man.
"We can debate endlessly whether the Obama administration could have gotten a bigger, more sustained stimulus through Congress"
No need for endless debate, Obama caved, asking for unspectacular amounts - his last request was for $200 billion, a nice size stimulus for, say, Ireland - although Obama had no problem requesting spectacular amounts for bank bailouts.
Yes, neoliberals, we understand that the Republicans hate working Americans, but the question on our minds is, what have the Democrats done for us lately?
3
What was the amount of Obama's first stimulus, please? And who ran the House after 2010?
@Ed Watters
That's an easy one.
They prevent the GOP from repealing Obamacare and replacing it with Ryancare, which would destroy the healthcare of a whopping 30 million Americans.
If you know that Obamacare insures 20 million more Americans than the previous system, and as such saves an additional 40,000 American lives a year, as studies show, then it's easy to calculate what Democrats have done for us lately: thanks to then, soon a whopping half a million American lives will have been saved. And many Democrats in Congress have been willing to give up their own career (because of the massive GOP lies about the ACA) in order to make this happen.
As to the bank bailout: that was $400 billion. And it's a bailout, which means a LOAN. Which thanks to Obama all the banks have already fully paid back years ago, and WITH interests. So taxpayers earned millions of dollars here - apart from the fact that, as economists across the political spectrum have shown, you HAVE to do this when all big banks start failing simultaneously and GDP starts spiraling down, if not you have a downright depression, with much more damage on Main Street.
And it's thanks to Obama's $878 billion stimulus that the downward spiral was turned around and the foundation for a decade long steady economic growth had been laid, as the CBO has shown.
He wanted to sign a similar, second stimulus package into law in 2010, but by then, "we the people" stayed home and let the corrupt GOP take over DC ...
1
It seems misleading to say we are “near full employment” when work force participation is so low. Don’t add credence to the myth of recovery.
3
@Devin You might want to start asking some fundamental questions about Krugman and exactly what his agenda is. He's more neoliberal than liberal.
Dr. Krugman, you refer to a slowdown in consumer spending as a negative outcome in this piece. Do you really see high levels of consumer spending, in light of extensive environmental devastation and species extinction around the world, as a plausible measure for a successful economy now and in the future? I admire the clarity of your thinking and would love to see you write about this topic in your column. Thanks.
1
There's nothing here I disagree with or did not pretty much know already. It is nicely put together. What I see in this history, however, is that the Democratic Party's decision to run Barack Obama rather than Hillary in 2008 was a national tragedy. Anybody the Democrats ran, even Hillary, would have been elected in that year. She would have been mean enough to have called out the Republicans for what they did; Obama, lovely man that he is, dealt with them as a loyal opposition. They weren't.
2
That's one of the myths progressives (including the Huff Post) started to believe very early on, during Obama's first term.
Here's why it false.
First of all, nothing in her biography indicated that Hillary is "mean". That too is fake news made up by the GOP propaganda machine.
Secondly and more importantly, if you listened carefully to what Obama said as president, it was more than obvious that he knew Republicans were rigging the game rather than sticking to fair play. Time and again, he denounced such approach to governing, and called them out on it.
What he did refuse to do though, is to go low when they go low, as Michelle so powerfully summarized.
Why?
Because having the guts to acknowledge the truth, respect our democratic institutions even when it's hard, and cultivate strong moral values and character is NOT being weak, it demands much more courage and strength than the GOP's lying and cheating.
And when it comes to achieving real, non-violent, lasting, radical, democratic change, it is the ONLY way to get there. There are no shortcuts or silver bullets.
Conclusion: one of the biggest mistakes that part of the progressives in this country tend to make, is to imagine that democracy is some kind of ideal, something we'll achieve at the end of the road. As Saul Alinsky reminded us: it is not, it is the very MEANS by which we'll achieve our ideals. Abandon it, and you can still obtain things for wealthy minorities, as the GOP does, but NOT for America as a whole.
4
If you read Democracy in Chains, by Nancy MacLean, it becomes crystal clear that the conservative/libertarian philosophy (actually a religion) that has consumed the GOP is really intended to shrink government and eliminate government programs above all else. Any action by government is reflexively bad, and any opportunity to cut taxes and thereby shrink government is good. They believe fervently that unfettered free-market capitalism is the perfect instrument to achieve any and all objectives. It's chilling how completely this perspective has taken over the national dialog--thanks to the Kochs' bottomless funding. Seriously, read Democracy in Chains and connect the dots about how these fanatics have patiently inched toward controlling all the levers of power to achieve their "perfect market."
3
Promises broken: balanced budgets, help for workers, better, cheaper health insurance, infrastructure jobs, a stronger western alliance, improved trade policy and immigration reform.
Promises kept: Tax cuts for those least in need, Americans driven against each for political gain, corporate enrichment, no wage growth, no help for Social Security or Medicare, no renewable energy and no environmental protection.
4
"Days of fear, years of obstruction" is broader and deeper than written about here. The 'trickle down" economics of Reagan never trickled down as projected, but the Republicans knew that, as they did with the Bush tax cuts that gave us, along with other typical Republican policies, the Great Recession that Mr. Krugman discusses here. Why anyone would believe and trust any Republican in office now who doesn't denounce the party and Trump is beyond me. They are turning our government into more for the 1% and less for all the rest, including education, healthcare, infrastructure, safety net for everyone, etc. etc. as well as deregulating all the contributors of pollution that lead to climate change and bigger (more tremendous, as our 'so-called' president would say) natural disasters, while increasing military spending that does nothing to combat our real foe's cyber attacks and outright bribery of our elections. MAGA Mobsters are governing America, the most corrupt, greedy, destructive caretakers of our planet in history. The day of reckoning is coming. Justice will be served.
3
For 40 years we have watched as the stock market makes the very rich even richer while the job market keeps the middle class and working poor in a state of financial insecurity.
What has been one common denominator in that space of time? Republicans have had the reins of government or the power to put on the brakes of government for a great deal of that space of time.
Some voters had bought into the idea that keeping some woman in some far off city from getting an abortion was more important that getting their children's futures on course. You know, family values.
Well maybe it is finally becoming clear to a majority of We the People that the family values represented by republican are the values of the Capone family, the Manson family.
As President Obama has clearing articulated this last week; this is the most important election in our life times.
Vote like your life and the lives of your children depend on it.
They do.
5
Excellent column - two points need to be added:
First, there is a popular myth among some on the left that Obama just needed to "push harder" for a bigger stimulus and we would have gotten it, because we had a filibuster-proof majority in the Senate, right? Well no: there were not 60 Democratic Senators for the first half of 2009. Al Franken was not sworn in until July, due to Republican court challenges to the Minnesota election results. (Later that summer, Senator Kennedy died.) This matters because without a filibuster-proof majority, Democrats could not pass a stimulus measure without Republican votes.
Second, after Republicans took over Congress in the 2010 election (due to many Democrats who had voted in 2008 not bothering to show up), the big thing they gutted was aid to state and local governments. This matters a lot. Even states with good reserves were not prepared for the Great Recession. Federal aid was essential, and when that was cut off, local governments found themselves having to lay off badly needed employees (public safety, etc.) in 2011. Think back to the employment reports in 2011-2012: private sector employment was growing steadily if not strongly, but public sector layoffs brought the overall employment figures down, month after month. The Republicans did this.
6
Just the same old, same old.
The Republican Party's main goal for decades has been to unravel government spending, regulation, and programs that benefit people and restrict the obscene profits of the corporatists that run it, spurred on by the collusion of right wing Christian and anti-government libertarians who see the Party as their ticket to winning the culture wars, banning abortion, thwarting the hated liberals, etc.
Pushing fiscal responsiibility and "small government" was important to some Republicans for honest reasons, but mostly it has been just a cynical scam to scuttle the social safety net and privatize government run schools, prisons, Social Security, etc; providing corporate America with even more unrestricted power and opportunity to feed their greed.
Passing tax cut after tax cut, while touting fiscal responsibility, yet still spending on wars and the military has always been the strategy by which they hope to push through the elimination of Social Security, Medicare, funding for the despised Planned Parenthood, etc.
Of course Republicans worked to limit government stimulus to the economy in 2008 and beyond; the last thing they wanted was for government (particularly Barack Obama's presidency) to be seen as effective in spurring economic recovery.
They're still at it - passing massive corporate tax cuts, scuttling health care, increasing military spending -
Same old, same old.
2
Thank you! This explains better than anything else I've seen why anger remains at such a high level. People lost their jobs and their houses and everything they were taught was part of the American dream, but the pain was not shared remotely equally. Even though financial leaders were much more responsible for the crisis than ordinary citizens. Commentary on the "anniversary" of Lehman Brothers' fall still suggests that it was an either/or decision - either we save the financial system or help those irresponsible citizens keep their houses ("moral hazard"!). Your explanation of the politics is terrific.
4
The Feds saved the day by absorbing trillions into their balance sheet.
It is only now, a decade later, that our economy will be faced with absorbing the very same debt back into the economy.
The return of the turkeys coming home to roost is just beginning and facing the fiscal consequences of the crash has been postponed until now.
I think it is safe to say our president will recommend “printing money” as a solution to the unavoidable debt problem.
4
We've come to depend on excellent analysis from Dr. Krugman and I personally am never disappointed. Something else perhaps worth mentioning: the anger rightfully felt by the middle class and poor at the refusal to hold the culprits responsible for the crime. President Obama had an opportunity to put the wind at his back by pursuing a fundamental need for justice. Had he done this, he could have tapped into that emotion, built a populist powerhouse and then dare the Republicans to defy him. A more savvy and experienced politician like FDR would have done exactly that. By following Tim Geithner's lead and so-called expertise, he tossed the card, forfeited the high ground and then had to fight the Republicans on ground of their choosing. Ten years later the country is still paying for it.
1
@DB
Populism, by definition, always weakens any democracy. Obama knew this.
In a democracy you fight back not by twisting the law so that each new government can put the previous one behind bars, but by actively voting out those you fundamentally disagree with, systematical fact-checking, and voting for those who want to move the country into the direction you support.
And the only reason why for Republicans, the fight happens on ground of their choosing, is because they founded a 24/7 fake news propaganda machine creating that ground in the first place.
We should never ever ask Democrats to give up real governance and moral character too and to start imitating those under the belt strategies, as they seriously undermine what makes any democracy not only great but simply a functional political regime.
In the end, the truth always prevails, and all non-violent progress is necessarily step by step progress. THAT is what FDR has shown. And it's what the entire US history has shown.
The outcome of populists movements, on the other hand, is in general the exact opposite of what ordinary citizens need and want ...
1
@Ana Luisa
You are confusing Populism with Trumpism.
Populism is the support for the concerns of ordinary people (those who were hurt the most during the Great Recession).
By pursuing prosecutions against the offending players, you are letting ALL Americans know that you shouldn't do the crime if you can't do the time. Resignations and recriminations are simply not enough. You need the deterrence that comes from incarceration if found guilty.
While changing the laws MAY deter future felons, anyone who has spent time working on Wall Street knows that the gamblers are always innovating and always looking to take over the house. Appropriate and consistent punishment lets them and everyone else know that, if they do that and wreck the house, they will end up in a much bigger house.
NY Times:
In Financial Crisis, No Prosecutions of Top Figures
By GRETCHEN MORGENSON and LOUISE APRIL 14, 2011
'... no senior executives have been charged or imprisoned, and a collective government effort has not emerged. This stands in stark contrast to the failure of many savings and loan institutions in the late 1980s. In the wake of that debacle, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail. Among the best-known: Charles H. Keating Jr., of Lincoln Savings and Loan in Arizona, and David Paul, of Centrust Bank in Florida.'
@DB (second comment)
Thanks for your reply.
As historians have shown, "populism" refers to attempts by politicians to reinforce the prejudices and lowest instincts of ill-informed ordinary citizens in order to gain power (and then use it for their own personal gains).
It's the easiest way to win an election, as you don't need to invest time in explaining the truth anymore.
As to prosecuting: what those who caused the 2008 crisis have done is certainly immoral, but that is not the same thing as criminal. To be criminal (= the condition for being prosecuted and indicted) means to transgress an existing law. And of course, the financial elites who did were careful enough to pay tons of lawyers to make sure that no clearly illegal act was ever committed.
So here too, promising to prosecute would be mere "populism".
That being said, if you believe some bank CEOs did transgress existing laws in 2008, could you please explain who and what law more precisely?
Our oldest son earned his Masters' and found his first job just as the global financial meltdown kicked in.
His entry-level salary was what allowed our family (his parents & two younger siblings) to keep a roof over our heads. It was touch & go but with a lot of determination & some radical decisions about where to live, we all made it to a normal quality of life -- one that includes occasional visits to the doctor.
The student loan burden hit his generation hardest. Not only was his college debt six times greater than mine a generation earlier, he chose to pay for our basic expenses instead of his student loans. As a result, the interest on his loans soared to 18%.
We are not the only family in this situation, Mr. Krugman, as you know. Articles are being written about the kids no one had because of the Great Recession. But what about the impacts on education, aspirations, careers? Our 2nd child has yet to attend college.
The bankers roared back to full-throated prosperity. Many families sustained crippling blows to their household economy. Our son has done well; our own business never recovered. Whenever we have an intelligent government again (if), the student debt crisis has to be addressed & some form of fair adjustment made to help all those of the young who were unfairly penalized, or had their career prospects damaged, simply by being caught up in the storm caused by financial crimes committed by others... by others who did very well for themselves, in the end.
6
But the question is: Why do the victims keep voting in their victimizers ? Until that question is answered correctly and practically, what we endure will continue.
6
I lost my job in the Great Recession when the hospital where I worked was sold to a for-profit corporation. The easiest way to boost the bottom line is to cut payroll. I was "last one hired, first one fired."
It took me 8 years--going back to school, earning a teaching certification and a Masters degree, as well as $176K in graduate student loans--before I found a full-time job again. I love being a teacher, but I'm still earning $12K LESS than what I was making in 2007. And the Republicans were NO help at all.
9
ObamaCare
3
Brought to you by the Heritage Foundation.
We need to restore the right power balance between employees and employers for the proceeds of economic growth to become more evenly distributed.
But as long as money is allowed to flow unlimited into politics, workers stand no chance. After Citizens United it is now way too easy for corporate owners to divide the working class along race, religion, identity etc., preventing any of the worker struggles (pay, holidays, healthcare, ...) from becoming valence issues.
5
The evidence has been accumulating for years, but it is inescapable now - the Republican party is not fit to govern. My friends who identify as independents say they vote for the individual, not the party (although most independents actually vote pretty consistently for candidates from one party), and that's fine. And if they they don't like the Democratic party, that's fine too. But my recommendation to them is that they should join the growing number of people who have come to realize it is in their best interest to vote for not-Republican.
7
Amen.
1
Republican economic ideology: ... and the devil take the hindmost...
McConnell: The single most important thing we want to achieve is for President Obama to be a one-term president.
National Journal on Oct. 23, 2010
And the unemployed of this country be damned.
4
Wow. New angle for Krugman. The Republicans are to blame. First time for that. Oh, wait- every single article says same thing. Maybe Times readers can yell Fox News at yet another ny times article like this
1
Our President - Putin’s puppet - is destroying our country for all folks. Many of his loyal helpers have pled guilty or have fled the scene of the crimes against the American people and ALL of humanity. His lack of humanity, his narcissism, his greed are obvious to all.
What can be done to right the “ship our state” before his evil actions sink it?
1. Tax all monies as income - money is money, just as Bitcoin claims. No low rates for in-earned income!
2. Stop the crazy, consumer costly trade wars - add a 10% VAT to all goods and services “sold” in the USA. These revenues should be invested in modernizing/maintaining infra-structure ... time for a new trans-Hudson tunnel ... a real hi-speed train down the eastern corridor... Clean water, Clean air, hardening infra-structure against global sea-level rise, world class education for the young... etc. etc.
3. Enact a Carbon Fee and Dividend - where all the fees are returned to ALL US citizens - a fee ($205/ton) on all 1200 Carbon producers (polluters) + a border fee on imported Carbon will send a check of over $3000/month to 99 million US families.
Easy?
Facts, evidence -based actions, not lies and fiction
3
Republican obstructionism started the day Obama was elected. Mitch McConnell did his best to hinder obstruct and deny. He had the help of his racist fellow Republicans. Just take a look at their elected officials, they are as white male Christian as they come (and one Asian woman cabinet member who happens to be Mitch's wife, she is not black so she passes the smell test).
The republicans live in a self made 17-18th century, they are so behind times that although they profess to be christians, their actions fall in the realm of dark evil selfish.
6
Specifically, a Black President sat in the White House.
4
This Krugman piece is nonsense....I apologize doctor. typically you publish an article that is well thought out, even if I disagree with it.........this time, You've ignored all the reality and chosen to whitewash the evidence. From my perspective, nothing happened in 2008, except that a small group of Wall Street-Beltway Insiders, responsible for the gluttony and self-serving regulation that caused the crash....give themselves credit for manipulating the US Treasury to save their own necks! No american's house was saved, No american's job was saved, Nothing of any value was salvaged for America......The prima=donna tight-rope walker flailed around momentarily and then regained his composure.......Stay the Course. In days of old, when a financial crisis hit..........JP Morgan bailed out the Govt............2008..........the Govt bailed out JP Morgan and drove America deeper into debt.........following rules that no longer apply in the 21st Century.
@Wherever Hugo
In real life, all economists across the political spectrum supported TARP, the 2008 bailout.
Why?
Because all the big banks were failing simultaneously, and last time that happened, it provoked the Great Depression, remember?
Economists call a situation a "depression" when GDP is at -10% or lower. When Bush left the White House, it was at -8% and getting lower each quarter. At the same time, the economy was shedding a whopping 700,000 jobs a month.
And you nevertheless imagine that "nothing happened in 2008" ... ?
You also seem to ignore that the bailout was a LOAN? And that thanks to Obama, a couple of years later already the banks fully paid them back, and with interests? So the bailout not only didn't increase the debt, it gave taxpayers money, you see?
And it prevented a -10% GDP, which would have meant much more people losing their jobs.
The Recovery act (a combination of subsidies and tax cuts for the middle class and small businesses) then turned the economy around and, as the non partisan CBO had calculated, lay the foundation for a decade-long economic growth and an average of 150,000 new jobs a month.
That means that thanks to Obama and the Democrats, for years already we're having one million more jobs a month than if the GOP would have controlled DC in 2008 and would have opposed any real stimulus but simply have given the wealthiest 1% yet another huge and deficit-increasing tax cut ...
3
It wasn't just a Democrat in the white house, it was a Black Democrat in the white house.
Not a coincidence.
5
“...while a [black] Democrat sat in the Oval Office.” An important distinction.
4
A Democrat in the White House, you really mean a black Democrat in the White House. Although he is no longer in WH, Trump continues his inexorable hard on to overturn and/or obliterate all the good Obama , a decent bloke, did for good old USA.
6
It's scary what Krugman wrote...scarier still is he might actually believe what he wrote.
@MLH
And yet, you can't come up with any argument to refute his analysis, apparently?
It's blind ideology, not fact-based analysis and rational debates, that should scare us.
Dr. Krugman can also further emphasize, as other writers (viz 'Crashed') that economics conditions improved in the US compared to internationally in large part due to taxpayer support. Nations by contrast that failed to invest internally or within the European union with programs of austerity struggled longer and harder. There is no good historical data or writing on this topic to suggest that larger economic stability or improvement are likely to improve for more than a few under current Administration policies.
3
Republicans, at least since Reagan, do not believe in government, they believe in ruling. Government implies running a country which includes protecting the nation, helping people to have successful lives and raising money to do this. Ruling is about taking and keeping power by whatever means are available and benefiting those wielding power and their supporters. Republicans have painted themselves into a corner and use no new taxes, guns and other less savory wedge issues to hold off the wolves.
5
I recently read one of Bob Woodward's book about the Obama years, The Price of Politics, covering the feuds over fiscal policies, budgets, deficits & debt ceilings. The details are a bit mind-numbing but revealing. And damning.
Woodward was no Obama fan--he presents him as often over-confident, inept, tone-deaf. Sometimes clueless.
But I found his portrayal of the Republican leadership devastating & stunning. A remarkably cynical, ideological & rigid bunch of frat boys, they were determined to use the financial crisis as their chance to basically destroy Social Security, Medicare, and Medicaid. ("Structurally change" was their term.) Just when Americans needed the safety net, they tried their best to defund & destroy it. And also to take the ax to healthcare reform, of course.
Obama was willing to tinker with entitlements but insisted that the pain had to be shared--ie, ending tax cuts for the rich. The GOPers were unwilling to raise any revenue; the high-end tax cuts were their most sacred cow.
One telling incident was a conversation Obama had with Boehner, saying that he (Obama) was doing well and that sacrifices must be shared by people like himself, not dumped on struggling wage earners. After they left Boehner & his staff mocked Obama, saying he was ashamed to be successful, & thus crazy and stupid.
And yes, they were determined to deprive Obama of any success & wanted the economy to crash on his watch.
If there's a hell, they are headed there.
5
@MaryC
And then we're not talking yet about the reason why Obama was prepared to give up certain entitlements: it's because he believes in democracy and as a consequence in compromising when your own political party lost the last elections - EVEN when that loss was mainly due to lies spread by the other party.
And ANY American patriot should indeed be ashamed when today he belongs to the wealthiest 1%, because of course, they didn't built that, it was bill after bill in Congress that artificially shifted all that money from the middle class to the wealthiest Americans.
Republicans have lost their moral compass and confounded "winning" and "cheating" long before they decided to put someone as "amoral" as Trump in the White House.
In the meanwhile, the Trump-Fox News propaganda machine has created an "alternative facts" world for the GOP voter base, allowing them to do no matter what in DC, as there will always be enough people in their PR machine to spin it into a narrative that makes those voters believe that Democrats are "evil" and as a consequence, ANY Republican in DC is good an absolutely necessary thing to support and vote for.
1
Absolutely on point.
3
corrupt GOP would not invest in infrastructure jobs when money was cheap & jobs were needed. they prattle about infrastructure now but do nothing. they allow those who made the most from financial collapse to make even more on the backs of children & grandchildrem with tax scam. meanwhile don the con adds >$1K per American in tarriffs without him or Congress taking responsibility for a tax hike
the SWAMP now has a new feature - snakes & clowns
3
Here's the thing ... as long as you beat the drums of white grievance and cultural extinction, you can fool an awful lot of people about virtually anything. Presto, people can blame their lot in life on those "hordes of rapist immigrants" and "moocher minorities". That is the cynicism and overarching bad faith perpetrated by the GOP.
3
I always have trouble spelling hypocrite, but I've come up with a handy abbreviation: GOP.
5
It lasted so long for two reasons, first the Obama administration was drunk on power creating tens of thousands of pages of regulations costing $100's of billions - a jackboot on the economy. Second Obama followed, for the most part, Krugman's advice.
1
I don't spoze you'd care to explain how that worked, or offer the eensiest fact to support your ideological statement.
@Robert
Here ya go:
https://capitalresearch.org/article/obama-era-regulations-cost-record-12...
The last paragraph sums it up, but I would insert "black" before Democrat.
McConnell, Ryan, et.al.: Meet the new Hooverites, same as the old Hooverites.
The 2008 Mortgage Crisis, was brought to us by the Insiders. Not Republicans. Not Democrats. The Insiders...those wealthy people that fund both Repubs and Democrats. They hedge their bets in order to maintain their position. Robert Rubin is to blame. Larry Summers is to blame. Tim Geithner is to blame. George Bush is to blame. Barry Obama and John McCain are to blame. The are convinced of their own superior intelligence and ability. No one can stop them! Whahahahahha!
Great article, but I’m curious why when discussing this topic the issue of homeowners fiscal irresponsibility is never brought up? The same millions of individuals that lost their homes are in some way responsible for the market explosion via their incapacity of to make mortgage payments.
I’m not suggesting blame gets thrown around but if this were a crisis of another nature such as an opioid epidemic, we would hear very different ideas regarding solving the real problem which is financial illiteracy. Why hasn’t financial accountability or balancing a check book become critical lessons to learn in public education? Why are public banking centers that teach risk, loans, interest rates and debt not a feature of our strategy to prevent a crisis like this from happening again?
Until the general populace becomes more fiscally educated, there will continue to be a consumer for bad financial products.
1
I had a feeling this, in tandem with and at the direction of various captains of finance and industry, was the case throughout those years. Here's something else, I also have a feeling the current expansion is being rigged and propped up, and not just by Republican politicians in both Houses, to make this train wreck of an administration look good for the midterms.
1
The irresponsible tax cut is simply a prelude to cuts in social programs like Social Security and Medicare. The next thing we will hear out of the Republicans is that we can't afford such programs at the current levels. Maybe then the old fools who support the Republicans will get a glimmer that they have been voting against their own best interests.
2
the 'zero sum game' maneuvering by boehner, mcconnell, and other top gop legislators to limit or potentially kill the stimulus package that the obama administration intended to implement to reverse the economic downturn reflects the gop's priorities.
their mentality was that if a depression occurred with a newly elected charismatic, young, african american president that crippled the people, so be it.
nothing has changed; gop partisanship has accelerated.
1
A major reproach of Obama's presidency was his empowering of people like Geitner, Poulson and their ilk , to get too close to the corrupt, greedy and still unindicted bankers and to lose sight of 'main street.' Hillary had the same problem. Warren and Saunders seem to be the only answer.
1
@T.R.Devlin
Elizabeth Warren would make an excellent president.
Republicans used the huge, festering pile of unemployed to sow their seeds of hatred, just like all extremist movements have done in the past.
The GOP requires an underclass two function, one part to disdain, mock and direct hatred toward, the other to supplement their base.
The sooner this party is replaced, the better.
1
For more than three decades now, it's Democrats who cut or even eliminate inherited deficits, and Republicans who create or increase them, and increase them massively.
How come that GOP voters still tend to believe the opposite?
Republicans know that many of them ignore the difference between the deficit and debt, and ignore what a structural deficit means.
So first they create structural deficits (= which by definition cannot be eliminated entirely during two presidential terms alone), which increase the debt, and then when a Democrat (Obama, in this case) manages to cut that inherited deficit by two thirds, they use the fact that one third of that structural, GOP created deficit still stands and as a consequence the fact that the debt constantly went up, to tell their voters that it's Obama and the Democrats who increased the debt.
The only way for Republicans to control DC is to massively lie and betray this country's conservatives 24/7.
As at the same time GOP fake news has turned Democrats into "evil people", Republicans can do no matter what they want, once they arrive in DC, as now GOP voters will continue to vote for them just in order to avoid "the worst", namely Democrats controlling DC.
The only way to stop this programmed destruction of America's middle class and as a consequence greatness, is for the 65% of this country who don't vote GOP to get out and vote too ... even in the absence of the "ideal" candidate ...
3
There is overwhelming evidence that:
Once a modern Republican, never again a loyal American.
Once a modern Republican, never again a decent person.
2
Detroit got double-whacked; auto companies & real estate crashing simultaneously. My husband lost a 4th generation business and was without significant income for many years. That income can never be recovered. We came within a fingernail of losing everything. I cannot shake the feeling that it will happen again. We are both doing fine, but we are freelance/independent contractors...when those marketing budgets and discretionary income get whacked - we will too. The American Dream exists in snatches and moments, but it's just a dream you can't live in.
1
This is what you get when you drown the government in a bath tub. The rich set the rules to suit themselves. Everyone else will have to adopt a policy of servility in order to feast at the trickle down table.
3
The Republicans and their overlords continue to bamboozle average Americans during this election season. A Koch backed PAC just dropped another 1.3 million dollars into the Walker campaign in Wisconsin. Republican donors and their minion politicians are very generous when it comes to spending on mud slinging ads that clutter our media with innuendo and lies.
1
At the rate the US is going, assistance of all kinds will eventually be left to the judgment and generosity of the charities set up by plutocrats for public relations.
2
We ran up roughly $10 TRILLION in debt under BHO, with pathetic results, and you’re contention is that we suffered because we weren’t irresponsible ENOUGH?!?!
EVERY prediction the left makes about it’s proposals always proves wrong. They predicted the fraudulent stimulus would produce very specific results; it didn’t. They told us that if we failed to extend unemployment benefits – again – unemployment would soar and the economy would tank; precisely the opposite happened. You yourself predicted that the economy would tank once DT was elected; how’s that prediction worked out?
In short, don’t you ever get tired of being wrong?
We’ve proved – again – that the problem with the US is government: taxes are still too high and regulation is still to draconian. And, of course, spending is obscene.
The debt problem does not arise because taxes are too low, but because spending is outrageous. But try and cut; the Dems, in the teeth of deficits approaching $1T, argue we should waste hundreds of billions more on welfare spending.
The slump started because of leftist affordable housing policy. It continued because BHO figured we could tax, borrow, spend, and regulate our way to prosperity. That have never worked, and it never will.
1
@Michael: You complain that too much regulation is part of the problem, but the air quality regulations Obama put in place would have saved hundreds of lives each year. Why doesn’t anyone seem upset that Trump has eliminated them? Republicans keep talking about regulatory reform, as if it was a good thing! Poor people are more likely to live near factories and coal plants, and they can’t afford to move just because their child has asthma, so that’s who will be hurt the most by this.
1
You're confounding debt and deficit.
Bush left with a structural and record $1.4 trillion deficit.
As economists across the political spectrum explain, a "structural" deficit is a deficit that no president can eliminate overnight, even not if he wouldn't sign any not paid for new spending bill into law.
ALL economists also agree that it will take more than a decade to fully eliminate the Bush deficit.
That means that by definition, even when Obama and Trump don't sign any new bill into law, the debt will go up, you see?
In order to know what each president believes when it comes to the deficit, in that case, you have to start looking in detail at WHAT kind of bills they sign into law: bills that are fully paid for or not? And bills that lower the deficit, or bills that increase it?
In other words, we already know (we already knew back in 2009, actually) that under Trump, the debt with inevitably go up.
In order to know WHAT part of that debt increase will be HIS fault, and IF they're such a part at all, we have to ANALYZE the debt increase under his watch.
If he doesn't sign any debt increasing bills into law, you cannot possibly blame him for the debt increase that WILL be the case in 2020.
But if he does, HE will be responsible for that part of the increase.
Obama CUT Bush $1.4T deficit by two thirds, so you can't blame him for increasing debt. Today, Trump already doubled the inherited deficit, so he is to blame for increasing the debt, you see?
2
Did you think the deficit caused by Bush's wars wasn't real until Obama put it on the books?
1
Yes, please raise my taxes!
Steve Mnuchin made billions off of others misery. He is now the Secretary of the Treasury.
6
It's great to see Dr. Krugman restricting himself to something he's knowledgeable about. His writing on popular, political and social matters is so obviously opinionated that it just pushes his readers, both pro and con, to follow suit. I guess it's all about pushing buttons....
If only Trump would follow suit. Of course, he would then be totally silent. This would be a pleasure, and good for America.
1
What an original explanation from Krugman; the Republicans did it.
1
What would make this column, and quite a number of others on this subject by PK, more effective would be a more galvanizing, catalyzing, animating, motivating term than “bad faith” to describe the bloody and cruel dishonesty of the GOP. Bad faith is accurate yet fuzzy enough to leave us unmoved and unmoving. I call for suggestions.
1
@Jean Louis
I propose:
False-hearted,
Perfidious,
Two-faced,
Treacherous,
Under-handed,
Miscreants.
As usual, PK delivers a message full of name-calling - essentially accusing all Republicans of intent to destroy the country. Plainly absurd. Also, PK seems to think that ever-greater government control of all aspects of the economy will assure economic success. Also nonsense. He never addresses the incredible long-term disastrous implications of the huge debt burden. Nor does he admit that higher taxes will never solve the problem. So, cutting taxes has become about the only way, politically, to limit spending, unfortunately. The results by definition are ugly. The Press needs to present the case from both sides - but reports mostly about the name calling. Congress needs to address the issue directly - but fails to overcome the name calling. Perhaps sending everyone back to Kindergarten would be a good start.
@Wildebeest
You clearly didn't even read this op-ed, and just summed up typical GOP ideological talking points used to keep their voter based fired up and ignorant enough to accept no matter what that they do in DC.
In real life, Krugman DENOUNCES huge debts, and blames the GOP of constantly doing the exact opposite and create them.
And since when is cutting taxes somehow LOWERING the deficit and debt, as you propose ... ? Don't you see that purely mathematically, that's absurd?
Obama cut Bush's record and structural $1.4 trillion deficit by two thirds. How did he do this? Among other things by INCREASING taxes for people like himself and Trump. Contrary to the GOP's wealthiest donors, Democrats' wealthiest donors actively support paying a little more taxes in order to help lower the deficit.
And of course, other measures are needed to cut the deficit. Those include reinstalling the pay-as-you-go rule (= no new spending bill signed into law that isn't fully paid for and doesn't add a dime to the deficit), and of course cutting unnecessary spending in new budgets.
But what did the GOP do now that they control DC?
You would have known the answer to this question if you would have read it before commenting on it: DOUBLING the deficit, and passing gigantic and not paid for budgets, all while increasing spending (on the military, and on things that the military is NOT asking for).
Any ideas about this, other than "sending everyone back to Kindergarten" ... ?
@Wildebeest Everything you have written looks irrelevant in the light of the cocaine high tax cut enacted by Republicans to goose the economy past the November election.
This rings true to me!
1
September 13th is my birthday. .the truth is such a refreshing gift. .thank you.
The GOP is still seeking the Holy Grail.
The end of Social Security and Medicare.
3
Read the Economist's latest cover story: "Has Finance Been Fixed?" The answer is no. We're heading for another crash, sooner than later thanks to deregulation of our financial institutions by the Orange Buffoon and his minions.
3
Don't forget another key element. Obama was not supported in the midterms by a large number of Democratic voters, who chose to stay home, happy in the knowledge that they had cast a vote for the first black President. Consequently, he continued to face growing opposition in Congress, and was unable to enact the legislation that may have shortened this crisis.
3
Merrick Garland economics
1
Dr. Krugman, you used to be such an interesting author, often making contrarian economic arguments supported by facts and logic. You were the thinking man's columnist--with the Nobel to prove it.
But now every single column you write ascribes bad faith and nefarious motives to Republicans, and gives Democrats the benefit of the doubt at every turn--even when they obviously make mistakes. Now look, I have no love for congressional Republicans. But this johnny-one-note treatment of complex policy questions is not only boring, it's harmful.
Are you really naïve enough to believe that all Democrats want to help people and all Republicans are motivated by greed and malice? Earth to Krugman: they're all self-interested; they all just want to get re-elected.
1
POlitics is a power game and reoublicans continue to dominate the game. Only two years after winning the White House and dominating both Houses of Congrss the Democrats squandered their opportunity. Whine all you want but you blew it. Incompetence in the game of politics.
The Tea Party dominated the switch, and their followers honestly feared the huge increase in federal debt—especially at a time when debt was killing them. Good people scared by the crisis
Democrats had no answer. Their earlier spending sorees made them less than credible Republicans expoited the fear—and then did what the Tea Party asked. They cut spending and in so doing gained credibility.
That may gave been bad policy but it was great politics. It gave republicans total control for eight years and counting. They got their massive tax cuts, their absolute control of the courts for decades, broke the back of sicialized medicine, bragging rights on the economy, and national support for low taxes except possibly in the rich. The democrats are just a bunch if unrelated civil rights units.
Republicans have clearly signaled the understanding that austerity was dumb policy by lurching in the other direction. But guven the same circumstances they would do it all again. It is a Power Game not a morality play.
As has been pointed out by many articles both here and abroad, the recession of 2008 hurt millions of people all over the world. Many, many people lost their homes, their jobs, and much else. But the rich continued to get richer while the poor and the middle class will never recover. The nation will never recover from this unless and until a new position is taken which benefits the poor and the middle class, impose new taxes on the rich and much else.
1
At last, someone has said it: Republican intransigence prolonged the process of recovery. It makes perfect sense to borrow when rates are low, and it's the classic role of government to do so in order to stimulate demand via public works projects and elsewhere. Unfortunately, the Reagan supply-side folks are still around, and so what passes for a "stimulus" among republicans is to cut taxes for the rich.
5
Also, federal fiscal stimulus was to some extent offset by cuts in state spending, also driven by Republicans.
1
I think the Republicans just wanted the deficit to be theirs, not Obama's. They wanted to create a deficit based on the big tax cuts we have seen under Trump. If Obama had already created a deficit as big as this one with infrastructure projects and middle class tax cuts, they'd have a hard time making another big one for their own version of tax cuts. They were saving it for their sponsors.
3
There is, perhaps an explanation for the Republican Party’s antagonism towards fiscal stimulus and serious efforts to address unemployment. It comes in “The Worldly Philosophers” by Robert L. Heilbroner, an economic historian I’m sure PK knows well.
In his chapter on John Maynard Keynes, Heilbroner writes about the economic crash that brought on the Great Depression, and the near-desparate measures taken to right the sinking ship. A major part of the solution was a massive investment by the federal government to spur economic activity and address the widespread catastrophe of massive unemployment. At the time, this idea was called “priming the pump,” which was necessitated by the reluctance of the private sector to spend in a period of such grave uncertainty.
Most of us know the rest of the story, but Heilbroner reveals a long-forgotten aspect of this long-ago crisis: businesses, he writes, felt that government fiscal stimulus threatened their livelihood, and they wanted no part of it. Quoting: “Government spending never truly cured the (1930s) economy—not because it was economically unsound, but because it was ideologically upsetting.” Business sat out the crisis, prolonging unemployment and ruining the lives of millions, and setting the parameters of GOP orthodoxy for generations to come.
Sound familiar?
2
"Stimulus vs. deficit
In the summer of 2009, Geithner was asked by a television interviewer whether tax hikes would be needed to rein in the nation’s debt. Geithner responded it was too early to tell, an early hint of the priority he put on cutting the deficit.
Political strategists at the White House were mortified. Obama had promised not to raise taxes on the middle class. This had been a centerpiece of his election campaign. At a White House briefing a day after Geithner’s remarks, he was publicly chided by Obama’s top spokesman for engaging in a “hypothetical.”
But Geithner already had the president’s ear. Privately, Obama offered reassurance. “I’d have said the same thing,” Obama told him, according to two people familiar with the conversation."
So , Mr. Obama's "just like families have to tighten their belts, so does the US" had nothing to do with the prolonged slump? It looks to me like a completely bipartisan dose of austerity for everyone but the moneyed classes just to let them know their place.
Dr. Krugman is forgetting that Mr. Obama embraced the same "household budget" austerity nonsense which Republicans had sold for years as a justification for reduced social spending. Far from denouncing this self-serving orthodoxy, Obama was ready to give away the store to John Boehner, effectively trashing years of progressive public policy.
With the choice of curtailing the political power of the banks and promoting the interests of ordinary people, Mr. Obama chose the banks at every turn.
You can thank him for Trump.
1
@jrd
I'm not thanking him for Trump because I'm a Type 1 Diabetic who was finally NOT denied an insulin pump due to my "pre-existing condition".
All I have to thank YOU for is your short-sightedness at that as well as the fact that the GOP decided to get another war on only between 2011 - 2018 it was against our former president.
if everyone saw as clearly as the good Professor does, there wouldn't be a republican in Washington for fifty years, following 2008. Burt now we have Trump, who represents the republican party circa 1989, and does it badly. These people couldn't get elected if it wasn't for a great big thumb on the electoral scale in the form of gerrymandering and vote suppression. Things have finally gotten so bad, there is a mass uprising against the right, the loss of the house is a foregone conclusion and Mitch is worried about losing the senate. I hope he has a lot of sleepless nights, in return for the sleepless nights everyone else had during the recent depression, the "Mitch McConnell Depression" (credit to Keithofrpi below for that name).
4
The Republican scorched earth policy was politically successful, in large part, because the Obama Administration failed to defend its accomplishments (e.g. saving the country from another great depression, making healthcare available to all). After 2010 the administration often seemed to agree with the Republican critique that deficits were too high, stimulus was not needed, and there wasn't enough money to help the everyday victims of the recession. When the argument devolved into a debate about who was best at limiting government, Republicans won, almost by default.
2
@Mindin
I couldn't disagree more.
It's up to US, ordinary citizens, to inform ourselves and look at who's doing what in DC.
If you did, you would have noticed that Democrats have actually ALWAYS supported the idea that in general, deficits are bad and have to be avoided or paid back as soon as possible - except during recessions, when they are the only solution to turn around the economy and as such prevent much higher deficits.
And the Recovery Act was never meant to be the first AND last stimulus measure. When it was signed into law, Democrats already agreed to pass second stimulus package a year later, once the economy would have been turned around, and in order to speed up the recovery so that long-term unemployment could be avoided as much as possible.
They didn't expect, at the time, that they would lose Kennedy's seat, and thereby a filibuster-proof majority in the Senate. And yet they did.
They CONSTANTLY tried to get more stimulus signed into law after that, but the GOP systematically blocked it. It even only accepted to extend the Recovery Act tax cuts for the middle class IF Democrats accepted to make the Bush tax cuts for the wealthiest Americans (and that were never paid for) permanent ... .
And yes, at the time, and notwithstanding Bush's record $1.4 trillion deficit and Cheney's notorious "deficits don't matter", many people still believed the GOP lie that they, not Democrats, cared about deficits. THAT is OUR fault, not Democrats'...
4
Lets be clear - Republicans hobbled the recovery in order to return to power, and were rewarded for doing so by the very Americans most negatively affected by that policy. Until we all wake up to the fact that Republican's allegiance is to party, not country, America's future is in great peril.
8
I agree with the case made regarding the initial stimulus package being constrained by the Republicans. However, didn't the series of QE work- arounds accomplish the same end goal, stimulating the economy?
2
What is most overlooked as the cause of the Depression was speculators bringing oil prices out of the reach of almost everyone.
In 2005 When Hurricane's Wilma and Katrina only damaged a few drilling rigs in the Gulf Of Mexico, speculators used this as an excuse to steadily raised the price of a commodity the entire world is made of.
Realistically I believe Presidents George W and Obama are largely to blame. W protected his friends in the oil industry and when asked by journalists on TV, did he know gas was $4 a gallon, W said, "I did not know that." Obama said it was great gas was so expensive; it would encourage people to use other sources.
I wouldn't blame just the Republicans and definitely not every Democrat. There is plenty of blame to go around.
You are so right about this that I think it's time to give the slump a proper name: the Mitch McConnell Depression. And it was a depression, not what is euphemistically called a recession. A recession takes place when business production gets ahead of consumption, making companies cut back. It's led by business, and recovery starts when production and consumption return to balance. That's not what happened in 2008. Then we had a sharp and lasting drop in demand. That's a depression.
7
Instead of bailing out the banks, that stimulus money should have gone to citizens, earmarked to pay off their credit card and mortage debt. The banks would have still received the money, but it would have left the population in a much better state.
4
@JM
You're confounding a bailout and a stimulus.
It's by deliberately cultivating that confusion that the GOP has won the 2010 elections.
A bailout is a loan. Giving a loan to the biggest banks at a moment when they were all failing simultaneously has always been supported by economists across the political spectrum, as it's the only way to prevent a Depression. That's why both Republicans and Democrats supported it and voted for it in Congress. And it DID prevent a depression (= MUCH more layoffs than what happened now).
Thanks to Obama, however, banks were forced to pay back those taxpayer funded loans quickly, AND with interests. Which they did. So that's how taxpayers ended up getting MORE money (thanks to the interests) than they invested in those loans, you see?
A totally different thing is the Recovery Act (the bailout was called TARP). THAT was a Stimulus. And most of the money of this stimulus (half of which were subsidies, and half of it tax cuts and tax credits) went to the middle class and small businesses.
And THAT is what the GOP totally opposed. And instead of having the guts to admit this shameful behavior, they made voters believe that a stimulus and a bailout are the exact same thing and that it meant increasing deficits by giving money to Wall Street and the wealthiest citizens and that that is why they opposed the Recovery Act ... and THAT lie then created the Tea Party.
1
There were so many good policies that could have been implemented if it weren't for the corrupt and vile behavior of the right wing of the Republican party.
At a time when the gov't should have been providing stimulus, the Republicans blocked funding for much needed infrastructure. Imagine the people who were out of work suddenly working on building the country back up, and the improved productivity we would all be sharing in the years after new roads, bridges, tunnels, and ports are built.
Don't forget the "grand bargain" that was negotiated by Speaker John Boehner and Pres. Barack Obama, which would have lowered corporate tax rates and helped stabilized the finances of the country:
https://en.wikipedia.org/wiki/Grand_bargain_(United_States,_2011)
That would have been a bipartisan compromise which would have been much better than the travesty of a tax bill that we are stuck with, which in fact has exploded the deficit, leaving future generations with an even bigger exploding fiscal time bomb than ever.
3
This is so obvious that even a liberal arts major like me can see it. Companies only hire when doing so is in their best interest. It is only in their best interest when having more employees means more revenue. (This is not heartless; it is sound business practice.)
And the only thing that makes having more employees pay for itself is when they are producing goods and services that you can sell for a profit.
Bottom line: we need consumers to save the day when unemployment is high. You give the working poor and the middle class a tax break and I promise you, they will consume more. Give it to Warren Buffet or Mitt Romney and it won't change their spending habits one bit--they already spend what they want.
Another option is for the government to do the spending directly, such as on roads, schools, power grids, etc.
The GOP cannot possibly be so dense as to not realize this.
10
Let’s not forget Republicans in Congress voted down the bailout package in late September of 2008 - the results of which simultaneously sent the market down 700 points AND valided investors fears that any reasonable solution would be tainted by partisan gamesmanship.
3
What I remember most vividly about the financial crisis was the purported father of the TEA Party, Rick Santelli, asking if we wanted to pay our neighbor’s mortgage that he had secured with a liar’s loan.
The answer was, of course, no.
But, what Santelli did so deftly was move the spot light from everybody who had made that liar’s loan possible.
While fanning the flames of anger at the irresponsible neighbor, he muted anger at the bankers, the brokers, the real estate agents, President Bush who had given a full throated shout out to home ownership and Larry Kudlow who had spent the previous month touting “the greatest story never told.”
7
In 2015, I obtained a 15-year mortgage at a fixed interest rate of 3.5 percent. I've mentioned this to some of the people I've encountered who are Trump fans and have asked each of them to tell me where that can be obtained today.
They have no answer. They react with a wide-eyed expression, speechless, as if they've been flash-frozen.
I think they just might be.
6
When a Democrat is in the White House, deficit spending is the great evil. When a Republican is in the White House, deficit spending is great - so long as it comes in the form of tax cuts for the richest. How come so many people fail to see this blatant double standard? The hypocrisy is glaring. Or do they see it and not care? In either case it's worrying.
604
@Nullius . Many americans are busy going to their second and third jobs to make ends meet to pay due attention to the incessant blathering coming out of Washington. Glad to be retired.
@Nullius, most people don't see it because they're distracted by other, shinier objects, like God, gun, and gays. At least here, in the US, maybe less so in the UK? What's that you say about Brexit?
@Nullius
Too many people have bought into the bigotry that Republicans are virtuous and Democrats are evil. The T-shirt stating that they would rather be Russian than Democrat expresses their real sentiments.
I always thought Obama was too nice and never treated GOP the way they deserved to be treated for their misdeeds during Bush 43. He should have shamed them into submission. I am hoping that if the democrats ever get back the congress and the WH they do not repeat this blunder - it is not revenge, but accounting for their crimes against the weak, the poor, the old, the children, the women - in fact against humanity. And against our country. Without this accounting the lessons will never be learned and such behavior will be repeated again and again.
2
@SM
And how would that work, concretely, "shaming them into submission"?
Their fake news propaganda machine had already accused Obama of all the corrupt and immoral things that the GOP is doing today under and together with Trump. So they had undermined all credibility that he still had left.
In such a circumstances, you literally immunize your base against any possible "shaming" from the other party.
And then we're not even talking yet about the fact that continuing to respect our most important institutions and to cultivate moral character, even in the Oval Office (= what some started to call "being nice") is actually crucial to keep those institutions functioning well and working by and for the people rather than being sold out to the highest bidder, as the GOP is doing today.
The only ones who literally have the power to force the GOP to get their moral backbone back are we the voters. Only when we start to massively vote them out time and again, when their most important value becomes "amorality", will they get it and end the massive corruption in their midst.
If we don't, and prefer to stay home until the absolutely ideal Democratic candidate is on the ballot, we'll always allow a corrupt minority to rig the game and step by step dismantle America's greatness ...
1
Too often columns such as this are written with the nebulous cast of unidentified political operations corralled under the heading of Democrat and Republican when in fact these organizatioins exist only as words with no actual relationship to the men and women who lie at the heart of each.
People take profits and people suffer losses as a result of other people's machinations, which when hidden from view under the aegis of political party does nothing, but punt the blame of these policies away from the human beings who sponsor and profit at the expense of those they purport to represent.
Are Republicans actually elephants? Democrats mules?
Nameless men and women, greedy and frightened members of both major political parties, hide behind policies ascribed to an affiliation which covers their tracks.
Democrats and Republicans need to be named and in this way called out not as politicians rather as the avaricious human beings they are. Members of Congress on both sides of the aisle as well as their friends profitted from the recent tax giveaway
Corporations have human board members and the wealthy have names.
Until these people are called out not just as the "wealthy" or "members of the board", but by name and interest, change will remain as amorphous as the clouds.
2
The last recession highlighted a significant change that began with Reagan whereby we transitioned from boom-bust economics to boom-collapse economics. The new cycle is characterized by an unsustainable boom fueled by speculation and public debt that disproportionately benefits the top, a collapse that threatens the nation state, deficit spending to save the nation state, rapid expansion of public debt to fund deficit spending, rising inequality as deficit spending disproportionately benefits the top, and repeat.
There was a time when public debt was invested in infrastructure and other tangibles that broadly benefited all. Now, public debt is used to make whole the architects of the collapse and to assuage just enough of the anger held by the losers to avoid civil unrest. The observations that next time will be no different are correct because nothing will change so long as the dynamics of boom, collapse, greater deficits, more debt, and more inequality push more wealth upward. Arguments in favor of greater deficit spending and more debt after the next collapse, well, that just enables the bad behavior responsible for the mess and perpetuates the deeply flawed economics of boom-collapse.
I agree with Paul - Republicans are liars, grifters, and hypocrites. However, both Republicans and Democrats failed to hold Wall Street and banks accountable for the last collapse, and that failure sowed the seeds for the next collapse and another massive transfer of wealth upward.
1
I wish there was a way we could reboot our government. The people occupying Congress and the White House clearly do not care for the average American.
The question I have is why were Republicans able to get away with this.
It was their policies that caused the problems and created the housing bubble. That is the housing bubble was the result of Alan Greenspan monetary policy to rescue the economy from George Bush. Without the housing bubble we would have had president John Kerry. It is a easy to blame the media for its failure to do any actual analysis and instead under "both side now" put on the same people who turned Clinton surplus to Bush debt and under Obama lit their hair on fire over deficit spending. But you also have to blame voters who vote for other than economic reasons. Remembering that half of the 47% who Romney demonized as takers voted for Romney, a substantial number of Americans wanted to inflict pain on there fellow Americans. Remember the ovation the audience at a Republican 2012 debate to the suggestion that people without health care should die. Noting that you cannot love America when you hate Americans, the Republican base do not want to share the greatness of America with other than White Christians and were willing to put up with pain to keep others poor. I have been reading many articles lately analyzing "White" evangelicals. As most Blacks are evangelicals, what more needs to be said.
3
Politicians of all stripes want to spend our taxpayer money once they attain elective office, no matter what they say on the campaign trail. That should be accepted as fact. Where they differ is what they want to spend it on. Republicans want to spend it on tax cuts for the wealthiest, fancy-schmancy military hardware, and currently, the Trump family's globe trotting, and little else.
And legal fees.
I agree 100% Paul Krugman. The hypocrisy of the Republicans, especially around the Federal deficit, is even bigger than President's Trump's inflated sense of himself. They are in this to cut taxes for themselves and their rich donors. End of story!!!
The other hypocrisy rising today is their self-importance when it comes to the rules of law. Brett Kavanaugh worked for Ken Starr, and they spent four years searching for something and they finally got him for lying under oath to a grand jury. No small offense. However, when the same Brett Kavanaugh lies in front of a Senate hearing, in 2004, 2006, and again last week in 2018, not one of the five Republican senators who voted to impeach Bill Clinton for lying under oath, will stand up for what is right and speak out against Kavanaugh and against his nomination to the Supreme Court.
Republican hypocrisy was dangerous and created long lasting suffering for millions of Americans in 2009, 20010 & 2011; and Republican hypocrisy today will have negative impacts on our country and its most vulnerable people for many years to come.
4
Division of the electorate serves to keep the powerful in power and the fearful GOP base can be relied upon to vote for the politicians that will produce the candidates that the American plutocracy needs.
Just ask: What would the highest individual and corporate tax rate be if all religious, race and social issue conflict cases before the court suddenly disappeared ?
The GOP big money donors who fund the Federalist Society don't care about school prayer, ten commandment displays, gays, guns, or flag pins, and corporations have no objection to the cheap immigrant labor that they profit from; a divided American electorate is the objective.
The last thing they want are Americans voting in their own economic interest above all other issues.
To understand how the stage was set for a Trump to take advantage of the power of fear and hate, we must answer the question : What would the highest individual and corporate tax rate be if all religious, race and social issue conflict suddenly disappeared?
1
Democrats are judged as too smart wonks. Republicans will continue to be judged by whether you would want to have a beer with them (for example: Dubya). Short term thinking Trumps long term thinking in the USA and its looking more and like that in Europe and around the world. The GOP has always been better at that since the working person learned to forgot what they found out about organizing for power, and were successfully goaded fully into racial and immigration talk only.
You are trying to tell us that if Obama proposed a tax cut for people, that republicans would have been against it? If he had proposed tax cuts, he might have gotten some republican cooperation, and gotten passed some legislation that you would have favored. And how were trillion dollar deficits NOT stimulus? I assume you are saying they should have been two trillion? No, Mr. Krugman. The truth is Obama was the wrong man at the wrong time. He had no clue what to do, and stagnated us for 8 years. I know it’s hardfor you to accept that you were and continue to be wrong, but the facts don’t lie.
dr Krugman could've added a few more words about the 'folks' who keep on voting against their own best interests when they vote for the repubocrites.
1
Thank you, Dr. Krugman. This is all very true and should be very obvious to anybody that followed real news organizations or that has a functional brain. And here lies the problem... these two features appear to be missing from approximately half of the voting population
While this administration brags about employment numbers and economic rise those jobs are not paying living wages. This same newspaper has reported on the victims of 2008 and how many of them have taken jobs that do not even cover modest rents.
The irony continues as we have a Treasury Secretary who profited from the bad mortgages that accelerated the housing crisis and an administration and a Congress obsessed with deregulation.
The entire trumpanian cabal is a disaster in the making
4
The main catalyst for this obstruction was and still is Mitch McConnell. He is a stain on the fabric of our republic.
1
Let’s face it. It wasn’t just because Obama was a Democrat; it was because he was a black Democrat and the oligarchs who were trying to run the country behind the scenes saw that there was sufficient racism in the Republican party rank and file to capitalize on it to thwart the President. Deregulation in every sphere was the goal and appealing to the racism of the heartland was where the answer to increased corporate profits for the already rich truly lay. Enter Trump. That’ll teach ‘em to elect a black man.
6
Mr Krugman has been wrong on the economy so many times I'm shocked anybody reads his column! the economy is growing with record tax revenue after he said it would collapse. More jobs then ever. Try reading real economists like Moore, Kudlow, Laffer or Sowell.
1
@Michael
Before you can show an economist wrong, you have to analyze WHAT he said more precisely, you know.
What Krugman said is that one year after Trump's campaign promises would be signed into law, the economy would fall into a recession again.
He didn't clearly accentuate the fact that of course, he was talking about SIGNED INTO LAW promises, not just Trump entering the WH in itself. So the next day already, he apologized and clarified his statement.
Until today, 90% of what Trump promised (withdrawing from NAFTA and NATO, hundreds of billions of foreign goods under high tariffs, a wall on the southern border, destroying the TTP, etc.) hasn't been signed into law yet at all.
THAT is why what Krugman said didn't happen yet, you see?
As to whether it would happen the day Trump finally starts rolling up his sleeves: that's an interesting debate you can have. NOT something to blindly discard without any serious arguments, as you're doing here.
Finally, we don't have "more jobs than ever". During five of Obama's years in office, Obama had higher job creation than what Trump is having ... . And you actually don't see any Trump dent in economical graphs at all, just a continuation of the Obama evolution ...
Conclusion: to talk about science in a serious way, you need arguments, not ideology and tweets. And when it comes to the topic of this op-ed (the Recovery Act) Krugman has been proven to be entirely right ...
3
@Michael
Kudlow?!?
@Michael
He may have been wrong few times, and admitted that. But supporting conservative politicians who are wrong all the time, like Kudlow, is quite another matter.
The republicans are geniuses. I'm amazed they can fool so many people so much of the time. They will eventually have their autocracy, no doubt. Call them cynical but they are winning against liberal values.
3
"Republicans were willing to sacrifice millions of jobs rather than let anything good happen to the economy while a Democrat sat in the White House." Entire GOP focus was to ensure that Obama "failed" without regard to the consequences for which the U.S. is still experiencing, perhaps even 2016 Trump! Americans, especially MAGA, seem unaware that the U.S. is increasingly an "Outlier" compared to other advanced countries.
4
I've often wondered why Republicans decided to do everything in their power to make the first African-American President a failure. What an historical event Obama's election afforded us. Since our founding, people of color had been governed mostly by white men and had accepted that governance. Now on the night of Obama's inauguration, a small group of Republican leaders, all white men, gathered at dinner to decide use this occasion not to see how they could help this black man and the country but how they could destroy him. What we lost by their decision is immeasurable. It was an opportunity for the Republican Party to show their support of the black community by helping their first President and the country out of the mess they had handed him. Sadly, this did not happen.
3
Specifically, Mitch McConnell.
3
Just a day or two ago, the Times published another article which contained the following stats:
- They "typical" (I'm assuming the Times really meant "average") white American family's net worth is still 19% LESS than it was in 2007.
- And for the "typical" Black or Hispanic family, those figures are 40% and 46% respectively.
In other words, most Americans are substantially poorer than they were eleven years ago. And if these "typical" net worth figures are truly statistical averages (and not "medians") - this indicates that tens of millions of Americans are still barely scraping by, paycheck-to-paycheck, while others (the millions of 50+ Americans who lost their jobs and/or houses in the Great Recession) have simply been cast aside as "disposable". They don't show up in any BLS statistics.
So that rosy 4% unemployment number Trump likes to brag about? That doesn't include the millions of Americans 50 - 65 years old who've simply given up after years of utterly futile searching for employment anywhere remotely close to their commensurate skills and experience.
Age discrimination has been rampant for many decades (too many "over-qualified" job-seekers chasing too few white-collar jobs). But since 2008, it's as solid as a brick wall. If you're over 50, (even with a college degree and a sterling resume), NO ONE wants to hire you.
Well almost no one. Walmart is always looking for greeters.
1
This is a very weak argument for such a strong conclusion.
1
Social Security was the difference between 2008 and 1929. Its must be saved.
9
And the Republican Party needs to pay for it, at the ballot box, for the next 80 years.
2
Lehman Brothers failed 10 years ago. Most of the perpertrators of the super scam that came to be known as the GFC are still in prison and not only has it removed these criminals from the system but it has provided a clear message to the financial markets about future expectations..........if only
1
Been there done that with this topic. At least pound away at the rise in defense spending.
It also explains the Republicans' acceptance of Trump's lies - the GOP are practiced liars who know it works.
1
Ten years.
Sorry, that's way too long for the average Republican memory.
That's why they voted in a president who contradicts himself every five minutes.
1
Professor Krugman, like many pundits, believe we're in a Constitutional crisis. But the Constitution is fine. We're in an EXISTENTIAL crisis because our leaders refuse to use the 25th Amendment. It's clear the current President is mentally incapacitated and yet he remains. The Constitution provides a remedy for that.
8
Also, Republicans act with utter disdain for their constituents. It's not only that their racism caused them to obstruct President Obama as much as they could. It's also that they preferred the money from their big donors, who also disdain non-rich Americans. Plus, their constituents, who, also being racist, didn't really care that much nor did they understand it at all. It's racism, pure and simple, plus greed, plus disdain that are the reasons why we need to throw those bums out. Plus, Merrick Garland, which has nothing to do with the situation we are in but still. Not an honest one in the bunch, nor a single patriot among them.
5
Remember when republicans used to try to shame Democrats by saying they were trying to ruin the future of our grandchildren through profligate spending and deficits and federal debt?
Somehow there wasn't a peep out of the fiscal chickenhawks with the latest tax giveaway and massive increase in military spending. I guess republicans don't care about our grandchildren anymore?
6
What GOP financial strategy is all about can be summed up in one phrase: reduce government revenues to the point where social security and government medical insurance -- distributional measures that reduce inequality -- are economically impossible.
This is not about social policy; this is about putting your thumb in somebody's eye for the sheer joy of being super-tough. Add on the GOP addiction to ever-increasing stocks of government weaponry and assault rifles for all and you get the point. This is not "cynical bad faith." This is something far worse -- sadism.
4
Lying is the GOP's "pre-existing condition"
Their ideas have never worked and they run up
huge deficits and pay for nothing. then the Dems
have to clean up the mess and the whine about
taxes.
deja vu all over again
Lawrence Peter Berra
4
Paying people to not work for 99 months is a policy that should never be used again. Expanding Medicaid to 135% of the poverty rate, surging Federal Transfers, especially SS disability by loosing the rules, and encouraging illegal economic refugees to cross our Southern borders had nothing to do with the GOP.
The perfect storm, and now the Liberals want to pass the blame?
It was all GW’s fault, right?
"You know, Paul, Reagan proved deficits don't matter."
Dick Cheney (to Paul O'Neill) 2002
Implicit in that famous quote was that deficits can be selectively used as opposition to a Democratic Congress or President. That intellectual dishonesty is now on vivid display for all but the most hopelessly gullible to see. Shameless, really.
If only Trump had invented 'Priming the Pump' earlier.
Sigh.
1
So of course your answer would have been for the government to spend more money. Which bucket would that have come from?
@Jackson
Which bucket is the huge amount of spending coming from now, when several buckets have been emptied by the tax cuts for the rich? Prof. Krugman is a professional economist who understands that McConnell and co. have done exactly the opposite of what experts recommend: austerity when spending is needed, and now spending and tax cut stimulus and exploding the deficit when debt could/should be paid down. The pocket-book consequences for millions and millions of people, including millions who have died and millions yet unborn and millions who voted for and will continue to vote for these snake oil salesmen, are almost incalculably bad.
1
@Jackson
Progressive taxation. It is a tried and true solution that made possible the 1950's, a golden age in America.
Why do you ask such softball questions?
Teddy Roosevelt figured it out afore you were born, laddy. A little known fact about Teddy is that he was a highly intelligent man, in addition to being tough as nails.
the economy continues to generate jobs that rob workers of the means to sustain themselves, driving them to safety net programs to supplement their below survival wages
wages that don't allow people to live on their pay are theft
5
Unfortunately, McConnell knew he could get away with sabotaging the recovery and sacrificing a generation because most people just don't pay attention.
He almost literally did shoot someone on 5th avenue...
4
Well, Marie Antionette found out what happens when you tell them to eat cake.
Taking and taking only works for so long. By analogy, you can stretch a rubber band only so far, and then ...
2
The Trump - Kushner Tax Cut for the Rich stuck a fork into Social Security. I'd like to stick a fork into you know who ...
1
The legacy of this crisis and it's progeny, specifically the mindless "too big to fail" policies, is a permanent scar on the lives of millions of mainstream Americans who lost homes through foreclosure and jobs through economic instability.
Now, the Republicans in Congress have rewarded corporations and fat cats with unneeded tax cuts while aiming squarely at Social Security, Medicare and food stamp reductions to help pay for their recklessness.
Ordinarily, such behavior would be expected to be disastrous for Republican election efforts. But, these are hardly ordinary times. The Democrats must articulate a clear message to voters, wrapping this evil around the necks of Republicans, who, frankly, still do not believe that young people, minorities and women will turn out to oust them.
285
@Doc Unneeded? Who decides what is "needed?" Given the disadvantage corporate America was at versus other nations re: corporate tax rate (if not, why would a company ever invert to CANADA???), your claim is dubious at best.
Furthermore, to characterize reduction of socialistic programs as "evil" shows the very problem in politics today: if I disagree with your policy views, I am not just of a different opinion, I am "evil."
I'm glad Krugman wrote this informative column, but it is extremely old news to anyone who was paying attention.
The mystery to me at this point is why anyone in the United States would every vote for a Republican to represent them in either House of Congress. Mitch McConnell, for example, hails from Kentucky, which was, and continues to be, one of the poorer states in the country. What has McConnell ever done for the benefit of his constituents?
4
And the "obstruction" continues under its architect, Senate Majority Leader Mitch McConnell, who reneged on his Constitutional duty to provide "advice and consent" on Judge Merrick Garland, and now is pushing to seat Judge Brett Kavanaugh under equally dubious conditions that has obstructed the release of a large portion of his record in the Bush administration. As Bob Woodward accurately titled his book, we are still in the "Days of 'Fear.'" McConnell has undermined the Constitution, normal Senate procedure with this obstruction and the nuclear option, and now the Supreme Court itself. The "fear" is palpable.
7
The great press failing of the Obama years was near silence, on the sustained GOP sabotage of vigorous recovery, in particular renewed fiscally stimulus during the 2010 -2016 period. This silence gave a free pass to the Romney camp as signs (failed) attempt to defeat Obama for bad macroeconomic performance and was the basis for the growth of working class - in particular Rust Belt -- economic disgruntlement to the point where faux Populist attributions of blames drew them to Trump in pivotal numbers.
So poor was press coverage that even movements as progressive as Occupy Wall Street stressed abstract nostrums like "redistribution" rather than concrete demands for renewed stimulus.
4
We spent well over a trillion dollars on a war of choice that we are still paying for. That's a lot of infrastructure.
6
The worst for me was witnessing my country abandon 35% of its citizens as expendable. The bailed out elite, public sector, and institutions would generate enough economic activity that no more unemployment assistance, debt relief, etc. was necessary. In spite of Republican obstruction, democrats came up way short. I'll never recover from the cruelty we inflicted on those that needed help the most.
1
This is a marvelous article saying things that don’t get said enough. I’d just take it one step further.
The opposition to Obama was more specific than partisan. There’s no way Obama or any Democratic President would push through anything like the tax giveaway to the ultra-rich we’ve now enacted. The Koch organization was in it for the money, and that’s why the country had to be held hostage. We were held up and robbed.
8
When Bush left with a record and structural $1.4 trillion deficit ("structural" meaning: that cannot possibly be entirely eliminated in less than a decade, even if all new presidents would sign no new spending bill into law at all), Cheney notoriously said:
"DEFICITS DON'T MATTER".
When Obama, who has always been a fiscally conservative Democrat, just like most Democrats, reinstalled the pay-as-you-go rule that Clinton had first installed but the GOP rejected under Bush, and then cut Bush's deficit already by 2/3 in eight years even though he had to deal with the worst economic crisis in half a century ... Republicans all of a sudden flip-flopped and claimed that only one thing mattered: deficits.
As soon as they took over DC in 2017, they again flip-flopped (including Trump, who promised to reduce the deficit and constantly criticized Obama for not having done enough - or rather, in his "alternative facts" rhetoric, for having increased the debt, knowing that most GOP voters would ignore the difference between deficit and debt and between temporary deficit and structural deficit ...). They IMMEDIATELY dropped the pay-as-you-go rule, signed a gigantic and not paid for budget into law, and a tax reform bill that on its own already doubled the deficit again.
So GOP theory is clear: deficits don't matter when we govern, and they are the only that matters when we don't... independently of what effect this theory has on the middle class and as a consequence America as a whole.
9
Real federal government expenditures (FRED: W019RCQ027SBEA) turned downward starting in the third quarter of 2010 when Democrats were still in charge. Krugman is certainly right that Republicans care nothing about deficits, or even about the economy as long as profits and high and taxes are low, but Democrats could have done a lot more in the early part of the slump. With 20/20 hindsight it seems likely that if they had devoted more attention to the economy instead of pivoting to health care they would not have lost the 2010 midterms. Then a better healthcare plan could have been passed.
Are Democrats going to make the same mistake and neglect economic issues in the upcoming elections?
1
Seems this would be a good time, too, to introduce the concept of "potential GDP".
The austerity that was keeping us mired in depression was also creating the conditions that would ensure a smaller economy far into the future, even when the economy was no longer depressed. We liquidated the potential for higher future output.
The GOP, McConnell and Ryan, have done a tremendous disservce to the nation. When the economy collapsed in 2008 they favored restrictive spending which did not help those suffering from the recession. Now in the midst of economic expansion they enact a budget that will increase the deficit into the far future. How much of the budget is wasted on the military? They propose cuts in food stamps and other programs for the poor to "balance" the budget. Their tax law only benefits the wealthy at the expense of the wage earners.
In the political arena, they are restricting the right to vote to ensure Republican legislatures and a Republican Congress.
1
It lasted so long because the depth of the devastation was really not revealed to the American public by academics, economists and the "street".
Take a look at the broader pricing of homes, not an index. Some states are priced at 1999-2000 prices. That wipes out 18 years of appreciation and or mortgage payments.
Its also the reason that Mr Obama recovery was misrepresented as slow. The recovery was a whole lot better than the economic numbers were showing because the depth of the losses during the crisis were significantly greater than reported.
Question:
How much of the current national debt can be directly associated with the crisis and recovery? 10 trillion? if so that is a significant portion of any GDP number ever reported. Digging out over years just makes it a longer process not a more efficient process.
Can you imagine, the media, academia and the government misrepresented facts to the public? That's democrats, republicans, economists, and the media. Not conspiracy-facts.
1
It's all true. I was a republican candidate for the New York State Assembly in 1991 and 1992. The Republican Party then openly discussed bankrupting the government in order to lower taxes. The strategy was if you couldn't lower taxes otherwise then run up huge deficits and create a financial crisis so government spending would have to be reduced. Obviously, the targets of that reduce spending were Medicare, Medicaid and Social Security. I stopped being a Republican years ago.
6
Excellent column - two key points need to be added:
First, there is a popular myth among some on the left that Obama just needed to "push harder" for a bigger stimulus and we would have gotten it, because we had a filibuster-proof majority in the Senate, right? Well no: there were not 60 Democratic Senators for the first half of 2009. Al Franken was not sworn in until July, due to Republican court challenges to the Minnesota election results. (Later that summer, Senator Kennedy died.) This matters because without a filibuster-proof majority, Democrats could not pass a stimulus measure without Republican votes.
Second, after Republicans took over Congress in the 2010 election (due to many Democrats who had voted in 2008 not bothering to show up), the big thing they gutted was aid to state and local governments. This matters a lot. Even states with good reserves were not prepared for the Great Recession. Federal aid was essential, and when that was cut off, local governments found themselves having to lay off badly needed employees (public safety, etc.) in 2011. Think back to the employment reports in 2011-2012: private sector employment was growing steadily if not strongly, but public sector layoffs brought the overall employment figures down, month after month. The Republicans did this.
13
I respectfully disagree, I would not assume cynical motives for someone worried about the federal debt.
For me, the error in the response to the financial crisis was that the response with the wrong tool. Monetary stimulus was applied rather than fiscal stimulus. We are still seeing the effects of this: the FED balance sheets is still 4.2 trillion; it was a steady .9 trillion before the crisis.
Mr. Geithner is responsible for this decision. He came from Wall Street to the FED, and when the crisis hit, he used the FED to benefit Wall Street. Misplaced faith in the financial market to regulate itself caused the financial crisis, and that misplaced faith is still present now.
1
With all respect, as Paul explains here, you're confounding the financial crisis and the economical crisis.
The financial crisis has been solved, and very quickly, through the Wall Street bailout that both parties agreed upon and have voted for. But a bailout is a LOAN, and when Obama came into office, he and Geithner attached strings to those Bush era loans, by adding a deadline for paying them back, and interests. As a consequence, a couple of years later already they not only prevented a Great Depression (through massive failing of all banks simultaneously), but they also got all the taxpayer money back, and with interests.
So this was NOT a "stimulus", this was a loan.
On the other hand, because of the housing crisis, GDP got lower each and every quarter, and each month 100,000 more people lost their jobs than the previous month. By the time Obama came in, 700,000 Americans were losing their jobs A MONTH.
The Recovery Act was designed to stop that downfall, turn the economy around and lay the foundation for decade-long steady economic growth - which is what it indeed achieved.
This law, however, was half tax cuts and tax credits, and half subsidies. So HALF of it was fiscal stimulus, you see? And not tax cuts for the wealthiest, but tax cuts for the biggest job creators, small businesses (and only if they hire/keep an employee!) and for the middle class.
As to regulation: that was done by the Dodds-Frank bill, not by hoping that the market would regulate itself ...
3
"Fiscal conservatism" worked very well for a very long time and is going to take a very long time to halt--maybe forever?
The audacity of debt. Go back even further and see the US being built on it. Nothing more conservative than getting back to it.
1
On a Monday in 1987, the Stock Market crashed. My boss, an economist and a visionary, was taken by surprise and was pacing the floor in our office at Rock Plaza. It was a sharp 500 Dow-Jones drop, a serious recession, the cause of concern for all financial parties, and the rural states of our country suffered the most and the longest.
Earlier I was thinking this is happening again, where it is going to take longer for the rural region to get back on its feet, wondering if government-funding is coming our way.
In 2007, with a determination to place all my savings under the banner of a bank, I was given a warm greeting, and when asking like a six-year old, whether America could experience another Big Depression, the two young representatives thought this was a stitch - (should we have a crisis like the 1930s, it will be nothing short of catastrophic, will spread globally, does not bear thinking about, were some reserved thoughts).
The Republican Party started to crumble a decade ago or more, impacting on the Democratic one. There is no FDR to come in with a New Deal, and regardless of party affiliation, nobody is singing 'Happy Days Again'.
Some of our communities are on the FTP (the fair exchange program), and we are not banking our trust in government any more. There is lower attendance at school; some courses are being dropped for lack of funds.
The Economy is booming, and while we may dance, we are left in the cold to find ways to cope.
2
"Why did the slump last so long?"
For a start, many people lost faith in the system and grew despondent. Many of those damaged by the collapse had done nothing wrong and, indeed, everything right, and yet they approached retirement with nothing to show for all those years of effort.
The unfairness within the system and the despondency of individuals affected could have been easily avoided -- or jolted back to normal -- had a few score of these bankers actually spent time in jail. It was fraud, after all.
When no one is held to account, people despair. It's normal.
318
@James Devlin
And now you know why we have an opioid problem in this country. If you look back at the Depression era, alcoholism, and alcohol related deaths rose exponentially during those years, as you said, people's despair.
3
@James Devlin... While I entertain revenge fantasies as much as anyone, I also think it’s important to recognize that most of the “it” wasn’t, in fact, fraud. There was certainly malfeasance, but collateralized debt obligations and mortgage-backed securities were all perfectly legal. The problem was—and is—systemic: The multi-million-dollar SEC is no match for the multi-trillion-dollar financial giants. Proposed regulations have been shot down and enacted regulations have been watered down. While I’d be as happy as anyone to see an AIG or Lehman CEO marched off in handcuffs, revenge really needs to happen at the ballot box.
James Devlin--The slump lasted so long because the rich refused to shoulder their responsibility to the nation. Republicans, in control of Congress, refused to should their responsibility to the nation. Then, when things began to look profitable, they cut taxes for the rich. They obstructed Barack Obama, at every turn. Republicans will create the next financial crisis, as they did the last, which is just around the corner.
3
Infrastructure spending & the resultant jobs would have helped. We are failing miserably with our bridges & roads; they are in terrible shape. Right there was a means to do what needed to be done and to, in the process, boost the economy. It did not happen - it is still not happening even though the Twitterer made promises to pass such projects during the campaign.
Guess he'd rather give money to corporations and wait to see if they create jobs or trickle down some of their windfall in the form of raises for ordinary working folks.
275
@Anne-Marie Hislop, infrastructure spending, here in MA we did take advantage of the stimulus. Despite, lo and behold, communities in Andover, North Andover and Lawrence lived the night on the streets because of gas explosions due to faulty gas pipelines that badly needed repair. Here in MA our MBTA, transport system needs a major overhaul, our subway being among the oldest in the country. We try to do our best, we have a cooperative Republican governor, yet, if we do not focus on efficient rebuilding of infrastructure, our communities will suffer, wholesale. Yesterday we got a sad glimpse of why we need more attention on our own rebuilding repair construction projects.
4
@Anne-Marie Hislop
Really, we still fall for that trickle down Laffer curve poppycock.
3
Gary Cohn signed on for two purposes while he was on loan from Goldman Sachs: tax cuts and privatization of the infrastructure program. A "public/private" infrastructure partnership would have been a way for Goldman to skim off billions in management fees for essentially doing nothing, which is their business model. Coming in, Cohn had no notion of just how colossal an idiot he would have to deal with in Trump; I'm willing to believe he was as snookered as the most benighted Trump voter, but quickly realized that infrastructure was a non-starter. Once he got his tax cut, he cut bait, several hundred million dollars wealthier. Nice work if you can get it.
5
Barack Obama sat in the Whitehouse for eight years.
Even when I was at odds with one decision or another I thought he had a first rate mind and a deep sense of social responsibility.
I have not felt that way about Mitch McConnell or Paul Ryan—ever. The column makes it plain that fiscal conservatism was just a convenient tool to beat up on the then President and make the rich a lot richer.
My God, how did we get here? I am hoping November will offer us a way out.
891
@Warren Shingle It doesn't really matter which party wins in November. The politicians are in the pocket of big money. They simply have way too much power.
Big money has the same ideology as a cancer cell: endless growth. A healthy body has an immune system to counter the bad cells, to keep them in check.
The bad cells are winning in the body of US. Sad
I came of (political) age when Reagan was president but didn't realize for years that his policies did more harm to the social commons than helped.
Then I learned that Republicans have been against the New Deal that included Social Security and Medicare ever since it was launched.
I still do not understand what ideology Republicans stand for except "each man for himself". They don't even follow that when they're in power, and instead pass policies that benefit only like-minded people like themselves.
@Warren Shingle What you fail to understand is that the Democrats, in deference to the same wealth that the Republicans bow to, offered us only fiscal conservatism-lite, offering cuts to Social Security, Medicare, freezing federal employee pay, "rescuing" home owners with the failed HAMP.
As an economist myself I totally agree with Krugman's opinion that the fiscal stimulus was too small and cut off too soon or the economy would have recovered in far fewer than ten years.
However, I also blame Obama and the Congressional Democrats in 2009-11 for failing to change housing laws that would have allowed most of the 10 million families who lost their homes to refinance and remain in them, thus shortening the housing bust. No bank/mortgage official went to prison, but millions lost their homes when they should have been allowed to refinance and stay there.
Also not all of the trillion dollar stimulus the Democrats did approve was spent. In my own state of Virginia, perhaps a hundred million dollars for temporary jobs went unspent. Why?
9
Obama had no support from the do nothing congress- both from re-election concerned Democrats & of course the GOP who vowed to sink his legacy. With this dynamic Please explain how any safety valves were to be placed into affect to save the homeowner? The power is and remains with the moneyed class.
6
@john isn't taking any responsibility for the Republicans making bad decisions. Why not?
The Republican Party has had a chance for the last 17 years to rebuild our nation's infrastructure. They've blown it. They didn't do it under Bush. They obstructed Barack Obama throughout his 8 years in office, not wanting him to get credit for anything positive, including infrastructure. They've shown no interest or inclination in building anything except military weapons since Donald Trump came into office. This is a party that destroys, not builds. That so many Americans don't appreciate this or don't care never ceases to amaze me. Such inaction coming from the party that claims to love America more than the Democrats.
801
@Larry Let private industry (properly tax incented) rebuild our infrastructure. Toll roads for all!
2
@Larry
And yet I keep reading that Trump has declared, over and over, "It's Infrastructure Week!"
2
@TimothyCotter
I hope your reply was snark. What private company is going to build roads or bridges in areas that won't yield a profit? Are you saying that people in rural areas don't deserve roads or bridges?
I know, right. It is almost as if the Republican Party is intent on creating a hereditary aristocracy in the US by beggaring the lower classes and reducing them to permanent serfdom.
And by lower classes this means you, dear reader.
30
Because they have wiped out the good, solid Middle Class with globalization and automation.
And by discovering that, without unions, it was no longer necessary to share profits with employees, beginning the obscene boom in the inequality phenomenon.
Really? Most wealthy elite now are Dems - Wall Street, Hollywood, Silicon Valley, pro sports, you name it. They, too, prefer to live above the sweltering masses, sending crumbs to the poor by government programs, promising ever more without delivering. They may vote for higher taxes because their wealth is not at risk. And they know more taxes will always “trickle-down” to the working “middle-class” who carry the burden as always. The government elite mingle easily with the ever-more concentrated power of the financial elite; talk about crony capitalism, we have it in spades.
The solution: break up the oligarchies, the institutions, the duopolies, and drain the swamp in DC. It will take a curmudgeon. Look! Perhaps we have one!
The blighting of American lives hasn't ended even though unemployment is much lower. There are people whose lives have been ruined because they were unable to find new jobs or jobs that paid decent wages. Employers continue to complain that they cannot find people especially in STEM fields. There are plenty of people out there. Employers don't want to hire anyone who will cost more than an entry level salary. They want 30 years of experience from a 25 year old.
Housing costs are still too high in many areas. If the costs are low the jobs aren't there. Employers don't want to pay to relocate people. Medical costs are beyond the reach of plenty even with insurance to pick up some of the tab. The GOP is adding to the burden even if its supporters don't see that. The richest corporations and families don't need more tax breaks. All that does is shift the burden to those who cannot afford it, 95% of us who are not rich by any stretch of the imagination.
If the GOP thinks that most of us like being unemployed, without savings, in a state of chronic stress perhaps they ought to come and live our lives for a few months without any financial assistance from friends. See how it feels to work hard, to be unable to plan a week ahead, to realize that your hard work means nothing to an employer and that your landlord/bank can evict you for any reason at all. Oh, and that your employer can fire you for no reason at all.
We're living the American nightmare.
1061
@hen3ry
"They want 30 years of experience from a 25 year old."
This is so true. I recently saw a job posted as an entry-level position requiring a high school diploma and three years of experience in a field you couldn't get a job in with only a high school diploma. The list of responsibilities filled nearly a page and required initiative, problem-solving, and complex managerial skills.
Setting an ostensibly low bar for credentials and expecting high professional standards is just a way to make clear that you intend to pay entry-level wages for first-rate work. In my college town, that job is likely to go to someone with a master's degree and several years of experience, who will be paid like a high-school graduate (who has no chance of getting the job).
10
don't worry be happy or worry and be miserable...ur call. circumstances need not effect the choices u make. I'm not saying it will be easy I'm saying make good choices and b happy.
@hen3ry, thanks for thinking of our youth and mentioning their struggles. Do not worry, the youth are the most enlightened ones today and they wish to own their future. All we need to do is give them a listen. If you missed doing that in the 2016 election season, you have an opportunity now....do not ignore our youth. They are fighting for their lives (think gun safety) and their livelihood (think medicare for all, free higher education, raising minimum wages). Don't be like Paul Krugman who refused to listen to our youth, although he is supposedly an educator.
1
To their credit, the people involved did what they could at the time considering the limitations created by politics, but in the end, we are worse off than when we started. The financial firms that created and profited from those risks are bigger than ever, inequality is as bad and maybe even worse, and politicians are more likely than ever to work to lines the pockets of the wealthy and the corrupt. That said, some of the choices that these men made were self-serving, treating Paulson's old firm Goldman Sachs better than other firms, or making choices that favored the wealthy over others via Geitner. Much good was done, but even for the positives, bad choices were made that will be impossible to undo. The harm inflicted on small debtors was and continues to be damaging, and should have been unconscionable.
5
"What the crisis called for, then, were policies to boost spending, to offset the effects of the housing bust."
So, Paul, am I too understand the the current admistration, which just cut taxes thereby pushing deficts to 1 Trillion dollars a year for the foreseeable future has corrected past Republican efforts to constrain deficits, hence, slowing growth?
Republicans, now that they are running the kind of deficits that Obama ran for five years are now on the right track?
hmmm........maybe something is wrong with your picture of fantastical deficits as a way out of a (admittedly Republican) created economic mess?
Maybe Dwight Eisenhower's approach after WW II might be looked at again? He brought government spending under control, balanced the budget, and, presided over a real economic boom that ended up ERASING the WWII debt. What was wrong with that approach??
Has printing money worked for Zimbabwe??
@Michael
With all respect, you don't get it.
Nobody except for Republicans are claiming that tax cuts are ALWAYS a good thing and help America as a whole thrive.
And under Obama, Republicans systematically blocked tax cuts for the middle class and small businesses (the biggest job creators), so the only ones claiming this kind of stuff don't respect their own theory at all.
What Krugman is saying is that cutting taxes for the middle class stimules the economy only in ONE particular economical situation: a great recession, where consumer demand is very low because people lost tons of money.
That, moreover, is also the only circumstance in which TEMPORARILY increasing the deficit to pay for a one-time tax cut is justified, as a recession means much lower tax income, which in itself strongly increases the deficit, so the first priority here, ALSO from the point of view of deficit reduction, is to get the economy going again.
And it worked: Obama came in with a -8% GDP and record and structural $1.4 trillion deficit inherited from the Bush administration.
When he left, GDP had been at 2% for 6 years in a row, and Bush's deficit was already cut by two thirds.
What is needed now is a continuation of those policies: no new tax cuts, no new spending bills that aren't fully paid for, and deficit-reducing bills.
The GOP is doing the exact opposite: huge, unpaid for spending bills, massive tax cuts when GDP is positive so no stimulus is needed, and doubling the deficit...
19
@Michael What you and so many others conveniently forget is that Eisenhower had much higher tax rates on the rich to work with, and an economy that worked for everyone.
Strong unions helped workers get their fair share of the wealth they helped create and the pay gap between the shop floor and the board room was a lot smaller. Real anti-trust action kept corporations from becoming too big - having more players in the game instead of a few giants created more opportunities, more innovation, and more competition.
And let’s not forget the massive government investment in people through the GI Bill. It expanded the middle class, put people through college, and into homes.
Republicans have been working to reverse all of that for decades. They have succeeded - and they’re not stopping.
Greed knows no limits.
5
"@Michael What you and so many others conveniently forget is that Eisenhower had much higher tax rates on the rich to work with, and an economy that worked for everyone. "
This.
The main thing that made Ike a "good" Republican president is that he inherited a government machinery that had been fine-tuned and fully upgraded by twenty years of Democratic governance, and unlike virtually all of his successors, he had the good sense to let it run and not go pushing any of the buttons.
If you're advocating for that kind of Republican, well, I can't disagree.
1
I tend to view Republican actions over the last couple decades as engineering the biggest theft in the history of mankind by taking earnings from average Americans via tax law and diverting those earnings to billionaires with the same tax law.
The last tax cut amounts to a fully legal raid on the treasury that commits future generations to turning their lifetime earnings over to the billionaires.
44
@TheLifeChaotic I often wonder how many mob bosses stare at the walls in their prison cells at night - or even in their mansions, those who didn't get caught - and wonder how much more successful they could have been if they'd become bankers, lawyers, robber-barons, and other licensed thieves who steal things with contracts, mergers and acquisitions, and campaign finance donations instead of with guns and baseball bats.
My elderly neighbor lived on $16,000 last year. He received back from the IRS $540.
So much for tax breaks for the poor, working and middle classes.
25
What effect does 10,000 people a day retiring and collecting and spending soc sec benefits have on the economy? Is this an infusion of money into the economy? What if these people collect and continue to work?
@observation
We're at full employment now, so if these people continue to work, younger people, raising a family and building a house etc. will be out of work.
Allowing older people to retire is a necessary condition for allowing the next generation to thrive (apart from the fact that of course, it's also the most morally responsible thing to do).
5
@Ana Luisa
So you're saying that the elderly population most of who have never had a pension, and constantly worry that Wall Street will rape whatever retirement savings they have accumulated, have a moral responsibility to "get out of the way"?
Maybe things are better in Belgium, but here social security does not provide a sustainable living. Most baby boomers have drifted from recession to recession and being downsized from one company to the next. So unfortunately we can't get out of the way.
Where is all of the money supposed to come from? Let immigrants in regardless of their financial status and we pay for their health care etc. Medicaid spending is out of control. NY state spending is orders of magnitude higher than other states. My taxes are enormous. Yet democrats want me to pay more more more without ever demanding responsible behavior from those that do not pay, and without restricting who can come into this country. You are right though- it is about color.... not black or brown, but simply green. I am tired of paying paying paying for others without getting anything in return from them.
1
@Ny Surgeon
What you get in return is a highly educated, healthy, peaceful, thriving society.
Anything wrong with that?
Getting nothing return? You get society in return. You get an educated populace, a healthy populace. Just because you can't easily apply a price tag on that doesn't mean it's not worth anything
1
@Ny Surgeon I wouldn't want you performing surgery on me. You cannot see that the Republicans are not financially responsible. They blew up the deficit when it was entirely unnecessary, and in so doing, removed a tool that could be used when it becomes necessary to increase the deficit. Your "open borders" argument comes straight from Fox News. It isn't immigrants that are taking your money; it's your Republican friends. Do you really want to live in a country where there is no social welfare? I wonder if you would prefer to live in a gated community guarded by a private security force, unable to go out in the city for fear of being robbed by people who have no money and no job. The money is going to be spent. The Republicans want to spend it where it isn't needed.
In Feb. 2009, in the midst of the Great Recession, crucial tax credits and tax cuts for the middle class and small businesses (= the biggest job creators in this country) made up half of the Recovery Act, and yet, Republicans massively decided to vote "no".
When most of those tax cuts expired at the end of 2010, WHO blocked their extension?
Republicans.
Obama and the Democrats being highly competent negotiators, they nevertheless ended up getting the GOP to vote for an extension.
What did the GOP ask "in return" (because of course, when a Republican does something for the middle class, he's not satisfied yet, he believes he needs something in return)?
The extension of the Bush tax cuts for the wealthiest citizens - tax cuts that were never paid for in the first place.
THAT, to me, was the first truly eye-opening moment, when it comes to clearly seeing that the Grand Old Party no longer existed and was now replaced by the most corrupt and cynical people belonging to the financial elites, and who clearly abandoned everything that the word "elite" since the ancient Greeks already referred to: highly virtuous people, with strong moral character.
Only 3 Republican Senators have voted for the Recoery Act: Sherrod Brown and the two Sen. of Maine (after lots of political concessions by the Democrats). John McCain, now the face of "the last Republican with moral values", failed to vote for it.
From then on, they blocked ANY attempt to help Main Street or America as a whole.
25
Totally agree edith you. One thing though, Sherrod Brown is a Democrat. Arlen Specter was the 3rd Republican vote.
1
@Ana Luisa Sherrod Brown is a Democrat.
1
Not only I think I understand why the slump lasted for such a long time, but I also understand that it brought us Trump to the WH.
Now the suffering is increasing since there is further will to sacrifice more: disaster victims, illegal immigrant children, Americans with health preconditions and even Trump supporters who are suffering from this administration and this GOP Congress governing.
6
The root causes and penitential cures of the 2008 financial crisis will probably be forever above my head. What is clear to me however, is that we were very close to a total collapse of the world wide economic structure. At the very last minute bankers and congress managed to plug up the drain with billions of dollars of loans (all of which were eventually paid back).
While watching a recent retrospective on these dark days I had a frightening thought. What if Trump had been the president during this crisis? Would the USA survive a complex crisis with DT and his acolytes in the White House. Be afraid.
17
@Aaron F. Kopman, M.D.
"Be afraid." I would only add to that "Be very afraid."
I have had this same thought many times. We were only saved from complete disaster by the Bush administration's willingness to put aside it's libertarian beliefs in order to save the economy. (Aside: Are you a hero if you save someone from drowning after you threw them in the water?) Will Trump have the same pragmatism, or will he say that banks aren't really failing but that news of such is just a Democratic plot?
The really terrifying thing is that I think we know the answer.
I can contribute a data point in support of Republican bad faith, at the state level. I live in Florida, and the state turned down federal money for transit and road work.
Now that there is a R President, they are digging up everything! Road work seems to be on all major roads, certainly the I-4 corridor is being rebuilt.
9
The Republicans continue their mantra. In the congressional race in my adjacent district (VA-02), the RNCC is running an ad showing a car careening first across the center line and inevitably off the highway onto the left berm, claiming "Elaine Luria is against the tax cut giving $1,300 to the average family" and that she is "too far left" compared to her opponent, Scott Taylor, who votes overwhelmingly for whatever Mr. Trump hacks up for his base. The "average" tax cut would be nice if evenly distributed but it clearly skews to those who need it least of all. Furthermore, the ad fails to mention any "gift" to the middle class vaporizes in the near term and the benefit to the entitled is permanent.
Hogwash is still hogwash, however slickly packaged.
30
@Douglas McNeill
"Average" is the key word here. Remember the parable that tells us that Bill Gates walks into a bar and the "average" income among the customers becomes millions.
My husband and I have an income of about $80,000 per year. Our tax guy tells us that we will pay $1,600 less this year in taxes. The amount goes down the lower you go on the income scale. The "average" family income is now $61,000. Think about what that means.
The problem is made worse by the fact that recovery varies according to location. A few places are booming; others are still caught in the economic doldrums and nothing is being done to change that.
2
Puertorico not adequately rehabilitated yet and North Carolina is being devastated as we write.These and other past and potential future developments require heavy public financial commitments.The commitment is practiced in the form of rehabbing life via erecting durable, resilience prone Infra-Structures, urbanization,hurricane or storm, for the most part,neutralizing barriers( these measures by the way create more skilled work force). All these necessitate introducing some degree of respective higher tax so as to distribute the financial burden of the unavoidable cost.Selectively practicing tax reduction,especially to those who need no subsidy,goes counter to securing long term National, even global Economic gain.Moreover,as one can confirm,by engaging multidisciplinary Math Scientists,in a serious discussion the afore mentioned public resource commitments potentially require introducing integrated scientific approach towards erecting and sustaining a durable vibrant Nation(s), in the process most aspects of knowledge are made to flourish too.TMD.
4
Good analysis but stops short. Republicans, libertarians, entrepreneurs prefer high unemployment because it reduces their labor costs. Why is this seldom included in liberal critiques of policy? Low unemployment is not a goal shared across party lines.
14
Same with immigration of skilled labor, my salary as an engineer has not increased in more than 10 years adjusted for inflation. one thing is certain there no shortage of US engineers (as corporations claim to justify massive granting of B1 visas)
2
Had my old business school professor, Arthur Laffer, not drawn his famous curve on a cocktail napkin, we might not be in the trouble we are in today. In postulating that a lowering tax tide raises all ships, he gave Republicans a mantra which has survived for decades following the Reagan era.
The problem with it is that in its simplicity, it ignores, or causes its adherents to ignore, myriad other complicating factors in our economic environment, many of which conspire to neutralize, at best, or altogether destroy, at worst, any politically expedient benefits that it purports to deliver.
No matter that it has evolved into leaving out huge swaths of the population who now feel abandoned, taken for granted and disenfranchised. For whatever reason, they seem unable to unburden them from the shackles of delusion that tax cuts are designed primarily to help them, which they clearly are not.
The problem with Republican politics today is that it revolves around hollow bromides designed to deceive average Americans into believing that they are the party's primary concern, while the real goal is gaining the support of the wealthy and corporations in order to stay in power. It is a combination of Three-Card Monte and a shell game.
With all due respect to Professor Laffer, who I genuinely like, there are simply not enough cocktail napkins in existence to clean up the economically soggy mess that strict adherence to his curve leaves on our nation's table.
38
@Quoth The Raven
If taxes are at 90%, his theory works...
A government needs to do three things first;
1, Ensure that all citizens receive quality education,
2. Ensure that everyone who wishes to work can, and
3. Ensure everyone has access to affordable health care.
After that worry about the other stuff, but these three need to come first
35
@Thomas
Since governments exist, guaranteeing national security has always been their first job.
It's what is called the "monopoly on violence", in political philosophy: instead of burdening citizens with having to find their own local militia to keep them safe, all violence that is not ordered by and implemented by the government becomes illegal.
Having a central power able to enforce this law is how for more than 2,000 years now having a state or government is defined.
Once you have a state, those in power can decide to install a constitutional democracy, or a dictatorship.
The reason why a democracy is supposed to be the best political regime is precisely because it has been proven to be the best guarantee to obtain, as ordinary citizens, all the other crucial things that we do better collectively than if we let the wealthiest take as much as they can for themselves: education, work, healthcare.
Today's Republicans never studied history, and - at best - still believe that the Ancient Regime, where all political power is concentrated in the hands of the financial elites, will some day miraculously end up benefiting the other 99% too.
They never really embraced the idea that a government has to ensure that each individual can freely pursue happiness. Their violent worldview makes it impossible for them to understand how of course, governments CAN create equal opportunity for all citizens.
And then we're even not talking about the current, totally corrupt GOP yet.
4
I agree but it assumes that our present government cares about the country, they don't.
4
Just as 9/11 gave the neo-cons the crisis they needed to get America to invade Iraq, the Business wing of the GOP saw the financial crisis as a way to get America to turn the keys to the government over to them.
Tax cuts and interest rate cuts for the rich, wage and benefit cuts for everyone else.
27
@Ronny, it is all an incestuous relationship. John Bolton inserted himself into the Trump National security foreign policy team and betcha he had the blessings of George W Bush, Condi Rice who want to make sure that they are never ever held accountable for the wars in Iraq and Afghanistan and the subsequent distraction from focusing on real domestic issues like infrastructure health care education jobs social security etc etc. Witness now, John Bolton with Trumps blessings, seeking to abolish international crimes tribunal. It is the only way we will never ask George W Bush why he led the country astray into 2 unfounded and unfunded wars which had global implications far and wide. Witness the destructions in Iraq Syria Yemen those people never had a chance.
2
When Mitch McConnell declared that the objective of Republicans in the Senate was to make Barack Obama a one-term President, he meant it. He and John Boehner deliberately undercut EVERY policy Obama proposed. When the GOP proposed policies and Obama endorsed them, McConnell and Boehner would immediately reverse themselves and oppose it, along with their caucuses.
In both Houses, the GOP had heartily endorsed George W. Bush's deficit and debt exploding policies, reversed themselves when a Democrat became President, then reversed themselves AGAIN when Trump was elected.
Because it has ALWAYS been about power and creating a permanent feudal-type of rule where one party and the corporate interests rule over the needs of 99% of the nation.
That's the problem.
15
Conservatives/Republicans always care more about power and the people who wield the greatest economic power than their fellow citizens. How they get that power and how they wield it once they have it is irrelevant to them, lying cheating stealing is all acceptable to them.
This unfortunately puts liberals at a disadvantage in the political arena we believe in fairness and honesty how do you combat a opponent that says the rules are for you but not them. The media is supposed to call them on this but we have a major media company that programs 24/7 of 100 percent propaganda to support conservatives and their followers eat it up.
Maybe just maybe Trumps personality disorders and pathological lying is turning off just enough of the fence sitters to clean house this year but I’m not holding my breath.
The next financial crisis is out there just waiting and one can only hope that Republicans are nowhere near the levers of power when it arrives.
2
The Tea Time chapter in Jane Mayer's, "Dark Money" is enlightening. Americans for Prosperity (hah!) and Freedom Works (or doesn't) coordinated "No Stimulus" and launched the Tea Party. The House Young Guns and Mitch McConnell had a no cooperation strategy with the goals of a one term presidency for Obama and a government so dysfunctional that the party which ruined the government would run the government.
6
This is all the more apparent because the danger of large deficits is in a developed economy a complete sham with competent financial mangement. To see this look at Japan with a debt to GDP ratio of twice the U.S. The Japanese Government went it wants to stimulate the economy issues debt, the debt has no private buyers but the Central Bank buys the debt and the government pays debt to itself because the Central Bank is a government agency and interest paments are returned to the government. This debt burden is zero and the government prints money at will or rather when the economy needs public investment. Its interesting and telling that this solution is not discussed here even by liberal economists. While the Japanese economy may have problems its not inadequate infrastructure and lack of gernment spending!!
1
It has been tragic that the Republican Party has prevented the needed stimulus package to revitalize our economy due to its rigid ideology and its policy of obstruction. They prevented taking advantage of a rare opportunity to improve our dated infrastructure at very low interest rates. Yet given our absurd politics they were rewarded with total control of our government and with Trump. Then we got a tax cut favoring the extreme wealthy and corporate interests and leading to enormous deficits. No wonder social and income equality are at gilded era levels. No nation could have worse policy choices forced on them by a heavily financed minority party. Just pathetic!
8
Voters have known for decades that Republicans don't care in the least about fiscal responsibility, but they continue to elect them. Most GOP voters are mean-spirited and suicidal. They would rather bring America down than tolerate people they don't agree with. We will not have a free America, until sane people outnumber them at the polls.
10
Re: comments that assert Democrats had a super-majority in the Senate and control of Congress for the first 2 years of Obama's Presidency:
On January 20th, 2009, 57 Senate seats were held by Democrats with independents Sanders and Lieberman, which gave them 59 votes, 1 less than a filibuster-proof “total control.” Republicans held 41 seats.
The 59 included Kennedy and Franken. Kennedy had a seizure during Obama's inauguration and never returned to the Senate. Franken wasn't seated until July 7 because of a vote recount his opponent demanded.
The real Democratic Senate in January, 2009 was 55 Democrats plus 2 Independents, which is 57.
That was when Obama’s “stimulus” was passed. No Republicans in the House voted for the stimulus. Democrats didn’t have “total control” of the Senate and needed Snowe, Collins and Specter to break a filibuster for its passage.
In April, 2009, Republican Sen Specter became a Democrat giving them 58 votes.
In May, 2009, Sen Byrd got sick and returned in July. Even with Franken finally seated and Byrd back, Democrats still only had 59 votes.
Kennedy’s seat was temporarily filled by Paul Kirk in September.
Democratic control of Congress lasted from September 2009 through February 2010 when Republican Scott Brown replaced Kennedy.
Did Obama have “total control” of Congress? Yes, for 4 months, which is when Obamacare was passed with 60 all-Democratic votes.
Republicans own American misery and lies, big and tweeted, can't change that.
53
@Yuri Asian
Thank you for that timeline. It won't dent the Republican nonsense claim that Democrats had "total control for 2 years" but for anyone interested in actual facts and accurate history, it is very helpful.
Why does Obama get off the hook so easy? The cynic in me argues that, from the beginning, he was worried foremost about who would pay for his library. He had that famous meeting with Wall Street CEO's after the crash and told them he was the only thing standing between them and the pitchforks - then, inexplicably, proceeded to give away the store. He asked for nothing in return and got less than nothing; with Geithner and Holder as his helpmates he didn't even need the GOP to undermine him. It was clear with whom his sympathies lied and if you need any more proof, follow his post-presidential behavior. Obama wasn't out of office two weeks before he was snapping selfies with a succession of billionaires (I know, it was only with the "good" billionaires). It turned my stomach. He has also made several, highly remunerative, Hillaryesque speeches to Wall Street firms as former president. OK, the man is free to do whatever he wants but you cannot cavort one moment with plutocrats and then stump for candidates the next as a populist - without looking like a hypocrite to everyone.
Now we are supposed to regard Obama as the Anti-Trump, because he is an intelligent, thoughtful, well-informed man, but it was his desperate urge to be liked by the wealthy and ultimately be part of their club that gave us Trump. Not everybody could see through him and his lofty rhetoric, but looking at his anointed successor Hillary was like wearing x-ray glasses.
10
@stan continople Paul Krugman has once again laid out the facts which run contrary to this attempt to sanitize the obstructionism led by Mitch McConnell. The President was fully prepared to negotiate and compromise with Congress to put the interests of the country first. MCConnell and his minions would have none of it and still put party and their political machinations ahead of the well being of the country.
@stan continople lol love it
@stan continople
I always thought he looked like he was doing a hostage tape.
Stop confusing my spell check.
I could not agree more! Republicans have built an infrastructure where they think they can make some of themselves rich at the expense of the rest of us. Fools that they are, lots of the Republicans that assume they are going to be among the rich, will not. They will be among the rest of us.
I hope enough wake up soon enough to vote the Republicans out. But the job does not end there. There are plenty of Democrats that will need to go next. The middle class has been in a steady decline since about 1970, thanks to both Republicans and Democrats. But I'll bet if we defeat many Republicans many Democrats will get the message. Maybe we won't have to vote all of them out, just quite a few.
2
Dr. K.
You are being too kind to the republicans / conservatives and their owners when you say that they did not want anything good to happen to the economy when a Democrat was in the White House. They don't want anything good to happen to the 99% no matter who is in the White House.
They want to keep us under their thumb. If I remember my political philosophy correctly, it was Eric Hoffer who pointed out that dictators keep their own people in poverty for a reason. If you are so busy trying to simply get enough to eat (or in America trying to pay for medical care or worrying about what appliance will break down next and wipe out the little savings you've been able accumulate) you will not pay attention to the fact that you are being robbed.
A crumb here and there and an occasional distraction are all that's needed to control a vulnerable population.
Sound familiar?
4
The Great Recession in the financial sector ended quickly. Sure, because the policy makers who ended it came from the financial industry - they definitively took care of their own, regardless of the rest of the economic impact thereby left addressed. Then Republicans took over Congress, and any fiscal policy was stalled (can't let President Obama 'win' anything) and Republicans fought "to prevent huge deficits". Of course, deficit spending would have been precisely the correct economic prescription *then*. After the Republicans stymied President Obama for the remainder of his two terms, we get Trump, and oh, those deficits? Well, nevermind... let's blow up another $1.5 Trillion in debt, precisely at the wrong time, when the economy is finally roaring along. When the next bust comes, who's going to clean that up...? You got it - another Democratic president, who will have to fight Republican 'deficit hawks' every bit of the way. Republicans - no shame, no honor, and no end to their hypocrisy.
1
It's the same story over and over; uninhibited speculation fueling a financial bubble and when the bubble bursts, the victims of the swindle are left to suffer while the enablers of the fraud empty the Federal coffers. Somehow the victims also end up being the culprits, because, well, they're "losers" anyway. The cycle of greed, cynicism and hypocrisy keeps repeating itself.
9
If I recall correctly you were an enthusiastic supporter of the government’s TARP bailout plan, which in my purely humble layman’s opinion is the reason why the banks and corporations still control our legislative process.
The only corporation that felt the full brunt of the TARP program was GM where shareholder equity was wiped out unlike their financial contemporary’s such as AIG, BOA, and Citibank, which reserved shareholder equity.
The beneficence of the government towards AIG specifically came back to bite them when Maurice Greenfield decided to file a lawsuit to recover lost monies he claimed the government’s bailout actually cost him.
Moreover Bernanke's Depression lesson was his decision to omit the perceived mistakes of a the Financial Reconstruction Corporation by deciding the TARP bailout would omit the transparency of the aforementioned depression era’s Financial Reconstruction Corporation
In contrast to our bailout, Iceland made the decision to allow their banking industry to fail, and nationalized the industry. The decision by Iceland to nationalize their failing banking industries, while not prefect, hopefully eliminated the wealth and power of the existing financial CEO’s and I hope they were reduced to street corner selling of apples and pencils. ..
Finally, the fiscal stimulus here in the US was primarily used by states to balance budget shortfalls in their state budgets as opposed to rebuilding our crumbling infrastructure. On point, IDK!!!!!
Krugman consistently refuses to place the proper amount of blame where it belongs - right on President Obama. Whether he sincerely believed that Republican light was the correct policy, was bought off with the lure of fantastic wealth for serving the 1% like the Clintons, or was just gutless, the fact remains that it was his total lack of forceful leadership that allowed the middle class to be decimated. Had he forcefully confronted the Republicans, let his Justice Department indict some of the criminal bankers responsible for the massive fraud, and gone directly to the American people with the true facts and pushed an aggressive policy, things would surely have gone differently.
5
Paul spent the Obama years telling us we will never grow at 3% again, because, well, it’s very technical.
Now, Obama’s abysmal record on the economy is all due to Republicans.
Yet, people can compare and contrast without Paul’s help.
Which economy do you think they prefer?
5
American "conservatism" is an unholy alliance between a relatively small, cynical - and sociopathic - anti-democratic economic elite who don't believe in anything except their next dopamine hit (from learning that their stocks have risen, for instance) and an expansive anti-secularist, anti-modern, anti-American fundamentalist religious right who believe in dogmatic untruths to a degree and extent not comparable to any other religious community of any other contemporary Western nation. Both are disinclined for secular democratic (and Democratic) American governments to rule and succeed. The US, the West and Humanity requires that there be a "Night of the Strong Handcuffs" to deal with these people. Too bad the American left is so weak and the Pentagon only believes in climate change, and not doing something about it, and only defending the interests of the United States overseas.
4
I will never forget the psychological terror of those years, the economic damage it inflicted on our family (although we came through it with our home and our business intact), or the spectacle of millions of decent, innocent victims of grim economic forces and greed-conspiracies that had been hatched on Wall Street and unchecked by the Bush administration.
The "banksters" were never punished and by now it's clear that they will never be. That leaves the Republican office-holders whose cruel and hypocritical efforts did so much to prolong and worsen the crisis. They're the only malefactors whom we still have the ability to punish in at least one way: by driving them out of power.
Let's drive them out of power beginning on November 6th!
10
"No, they haven’t abandoned their commitment to fiscal responsibility; they never cared about deficits in the first place."
Praise the Lord! Brother Krugman has seen the light!
The Republicans have been lying about everything except their love of the rich.
9
Professor, you need to remember what the word "but" stands for. It is the exception to the rule/proposition, and it is the guaranteed tool of any cop-out anywhere.
You've used it 10 times in your article. It is still used by Republican commentators to show why deficit scolding does not apply today.
If you think the Republican party as it exists today is *an* opposition (/governing) party, you need look at only one thing : Their approach to voting (and its suppression.)
Since it is actual unstated policy, there is no other logic that you need to put forth for why they are not a legitimate party.
I have said for at least 5 years on your columns that the only thing preventing Democratic losses in Presidential elections is turnout.
If you can get the turnout past 60-62 percent, you will never lose.
You can blame the Democrats later for their wimpishness and the likes of Tim Geithner for toeing the Goldman Sachs line. (Because they will only do a little, not much, better.)
We are way past time for logic and honest protestations.
We are the enemy. It is we who fail to turn out for our candidate. As umpteen articles showed after 2016, we heard what people said ("Nothing is going to change").
No professor, as much as us, you have learned nothing. You are *again* barking up the wrong tree.
Obstructionism+negativism+cynicism+hypocrisy equals yesterday's, today's and most likely tomorrow's Republicanism. The human toll created by these policies equals a moral depression the likes of which we have seen before yet somehow continue to repeat. Ditto for our habitual proclivity for lengthy wars in faraway places with no exit strategy. While more's the pity, voting against such ongoing behavior is a definitely positive solution.
10
Taking care of wealthy people is always the first order of business. Making it look like you are taking care of the rest of society is the second order of business. The real problem is something always comes along to refocus attention on the first order before the second task is complete. So it's kind of like a massive fire affecting an entire region. The fire department puts out the wealthy homes' fires. Then, while heading over to the average homeowners' houses in flames, the firefighters get a call to return to the wealthy homes to put out a few hot spots. And to manage all the fires, the localities agree to increase the flow of water in the pipelines. And the hoses are always connected to the hydrants in the rich neighborhoods. And the less affluent are told over and over that there is plenty of water in the pipeline, to just sit tight. We will get to you. Problem is the hoses never seem to get connected to the hydrants in those poorer areas. Because a proportionally few residents have tapped in on their own. And the other homeowners are told the reason they don't see any help is the people downstream from them are stealing their water. While full water pressure is always at the ready upstream from them. It always amazes me how eager people are to buy this argument. While their own hoses burn to the ground.
5
Republicans acted the way they did because their hedge fund constituents were cashing in on the foreclosure boom. The funds ordered the Majority to 'slow walk' the recovery so they could continue to cash in on the housing crisis.
17
Even with a 60 vote Senate, democrats couldn't eliminate the carried interest loophole for wall street criminals. It's naive to put all this on Republicans.
If Republicans retain control of both the Senate and the House after the 2018 elections, Social Security, Medicare and Medicaid will be on the chopping block especially if there is another economic downturn. There is an old saying among Liberals that our progress toward social equality takes two steps forward and one step backward. With Trump and right-wing Republicans still in charge after the 2018 election, we may well take two or three steps backward
. The progress we've made since the great depression of the '30s in providing a safety net may be wiped out. The thought of our elderly population being without these services is frightening. But guess what Republicans will also probably do if they retain control: How about another round of tax cuts for the wealthy!
23
The part of dealing with the recession that led to the current constitutional crisis is the lack of any prosecution for the underlaying fraud plus making the bankers whole.
Bailing out the banks and bankers by having the costs spread to the general economy was the trigger for a lot of the last 10 year's politics.
9
The injury to the economy, to jobs, to household wealth, to property values - they destroyed the housing "market" - caused by allowing Lehman to go under - and we know now it could have been avoided - is still going on today.
People who lost their good paying jobs, were never able to replace them, or the income that went along with those jobs; the trillions in household wealth that was destroyed are not growing on trees waiting to be plucked - that money is gone; some people - many people - are still underwater on the houses they bought before the meltdown and can't refinance them with our low interest rates because they have no equity.
We won't get into the human costs of all this economic perfidy: it's too depression at this hour of the morning.
Think positive: Vote Democratic so this doesn't happen again (and it can).
14
All very good points . I wish Dr krugman would take the farther step to name the big players of the donors class who dictate to national republican politicians how to vote.
Republican politicians did not write the tax bill, they voted on it with little idea of what it contained. The donor class wrote the tax bill.
20
When are we going to fully admit none of these policies were borne of anything other than the GOP donors demanding their purchased politicians doing exactly what they were ordered to do? Harming the working and middles classes was the purpose both of the meltdown and the failed recovery. Note Krugman says those at the very top recovered almost immediately while millions of working and middle class folks will never recoup their losses. The billionaire donor class was simply reminding the rest of us that they can do these kinds of things with impunity. Next up is the full repeal of all labor laws, the social safety net, and the end of free elections.
35
If the GOP retains control of Congress after the midterms, expect to see heated performances about "concerns over the deficit" accompanying proposals to cut support programs. They got the tax cuts. If they hold Congress, massive cuts to certain types of spending are next.
30
Sad, but true. Unfortunately, the mother of all recessions awaits on the horizon.
26
I'd like to hear more from Mr Krugman about the disconnect between increasing profits of financial institutions and the health of the overall economy. Banking was once a sleepy, unsexy business whose main purpose and social justification was the efficient funneling of capital into the 'real economy' and multiplied its benefits. Financial manipulation has become an end in itself, that skims enormous sums from the accelerating movement of capital and concentrates wealth toward a progressively smaller part of the population. I hope there are some economists out there who will go further into the social, political and moral role of finance in the overall economy.
56
The connect becomes obvious when they crash.
@Joel Try reading the excellent economist John Kay,
"Other People's Money"
I second your request, and concern. It seems to me, and evidently you, that we have the most profitable area of the economy today composed of brilliant people who do nothing productive in the sense of producing real wealth, or of improving people's lives, but who rather make obscene fortunes by their cleverness in swapping paper. To compound this, they then drive up the prices of services and irreplaceable resources, such as land, for the rest of society.
"So if you want to understand why the great slump that began in 2008 went on so long, blighting so many American lives, the answer is politics. "...has a notion. With no intention to interfere in US political controversies, I'd like to describe the picture I see. (I) Political consent at that time, that might be still the case partly, was very much concerned about the enviroment. Much eager to perceive any kind of economic growth as evil. That was the rationale. (II) On the other hand there is a reality not to be overseen. Christians have the largest population on the planet. Christian culture, may have some problems with consumer society. Christian values were and maybe still are on the rise on political level. A certain combination of these two shaped the political reaction (financial regulations) to the Lehman case. Since these two issues in Europe were more intense facts, the economic results of such became also more intense in Europe rather than in the US. GDP gap between US and Europe widened at such time in favor of US. President Trump deregulated, and it seems that the gap is continuing to widen. I totally agree that politics has much responsibility on that issue. But I think it's beyond the sides of politics. It looks more like a general political consent which shaped financial rules at that time and still has supporters not to undermine.
Everybody with a single neuron firing knows Republicans hampered recovery from the worst recession since the Great Depression with obstructionism, and RLS is doing a great job of explaining how they've managed to rig elections to keep their hold on power. Despite their spite for the aptly dubbed “precariat”, burning questions remain of how to resist the vultures feeding on the better angels among us.
All of us have known bigots and greedy people in our lives, and though we didn't allow them to overtake the student council or elect them “Class Favorite” in high school, we have elected the crookedest of thugs to govern us and to loot the people by denying them fair pay, or opportunities for education like most of us took for granted. I'm tired of quoting facts from the CDC about how much a single-payer system would save people, rich and poor alike, or from esteemed economists such as Professor Krugman, only to be shouted down by people I once looked up to, all of whom have matured into “adults” with intellects and discernment below that of a well-educated 6th grader.
Yes, we remember the GOP's response to the crisis like it was yesterday, and we've seen that they can continue hitting new depths of hate, shame and foolishness. Call me bitter, because I am, but relief will only come when the crooks in Congress are driven out en masse, and that will only happen if they figure out that super-rich con artists and not their neighbors are robbing them blind.
88
@Gary Henscheid
'Yes, we remember the GOP's response to the crisis like it was yesterday' - because tragically, yesterday' for so many, is still 'today.'
27
@SB - Ha, that's good SB - thanks !! I haven't participated in this blog nearly as much in the past three years as I once did, but I already said most of what I wanted to say long ago. It's great to see the same group of regulars still making so many compelling arguments for a more progressive America though, plus a lot of newcomers, who post a bigger variety of interesting views all the time. As for me, I still manage to screw up my own comments a lot, but I was mainly venting anyway, so nothing's lost but a little of my time, and that of a few readers.
Please keep giving it hell through November, from Ireland and everywhere else: Somewhere out here are sensible people reading and changing their views, possibly even people in high places, and speaking of our masters - may the best Democrats win !!
1
@Gary Henscheid - The biggest blunder in the comment above was saying I was tired of quoting to deaf ears the CDC rather than the CBO on how much money a single-payer system would save taxpayers, but I was thinking of something much less glaring, at least to me, until just now. My parents both vote Republican, so I guess it's in my genes to overlook the obvious and to have priorities all messed up, but in their case, in politics, and in mine, in my own writing.
2
I get it as do millions of others yet to recover. Unfortunately, by the time the next economic crisis hits--being fueled now by Trump and his enablers' reckless policies--again blame will be at the Democrats feet and they will be the ones to clean up the mess.
21
@Ann
The Dems won't even be able to clean up the mess if they aren't in office. So tell it to "the base" -- if you can get through to them.
There has been about one recession per year since WWII. On aveage they last less than a year. And recovery then follows. The economy cycles but one thing is always true. The other guy caused the recession and our team ended it.
1
One per decade
1
If the economy recovered, the chances of making Obama a one-term president went down.
31
The Republican obstructionist who arguably did the most damage to recovery from the crash was Tim Geithner, per David Dayen's recent article in The New Republic https://newrepublic.com/article/151159/tim-geithner-resistance-inside-ob...
and previously in the American Prospect
http://prospect.org/article/needless-default.
Dayen presciently warned that the wiping out of the wealth of many million working and middle class Americans would "haunt Democrats." Their sense of betrayal was a major factor in the 2016 election catastrophe.
7
Republicans have had only one goal; make the United States government much smaller except in matters concerning the military, and corporate subsidies. In fact, the obscene military budget, and the trillions wasted in Iraq and Afghanistan, is all about aiding corporate adventurism and securing the free, and cheap, movement of goods around the globe, at the expense of workers everywhere and the benefit of corporatist.
The political reality in the United States, however, is that the government services that Republicans hate are actually well liked by the public. Government does work. In order to overcome this the Republicans have employed a three pronged strategy. First is to spend the United States into insolvency so that we have no choice but to eviscerate popular programs. Second is to erode the trust in the American people in government generally. The underfunding, and mismanagement of FEMA that led to glaring failures under both Bush, and now Trump, is a glaring example of this. It is amazing to see the functional difference of just that one agency under Democratic vs Republican regimes. The third prong is to do everything in their power to prevent a Democratic administration from looking good. Under Clinton it was endless investigation, under Obama it was an open declaration that they would deadlock the legislative process to prevent him from doing anything in that realm. In the first case it was to de-legitamize, and in the second to emasculate. They are succeeding.
64
I seem to remember a LOT of uncertainty and volatility during the Obama years with respect to possible financial contagions, a commodity crash, and successive emerging market debt crises, culminating in the 2015 global recession.
Arguing that the U.S. could have spent its way out of these global headwinds is probably a revisionist view.
Especially given the magnitude of QE conducted by the Fed.
3
@Mmm,
Farewell to the TPP, as the Asian Bridge continues to grow and we regress.
@Mmmyou remember wrong
While we're talking about Republican bad-faith, why not discuss how Republicans pushed through massive tax cuts, while destroying the social safety net, by lying and pretending that the wealthiest got poorer after the financial crisis? Republicans deliberately misrepresented income inequality and then conflated it with wealth inequality. Income inequality is massive, and any recovery gains were gobbled up by those at the top. While average Americans never recovered from the "Great Recession," the rich regained all losses in income within only a few years, and then surpassed them. Further, the wealth of the richest Americans radically increased almost immediately. The reality of inequality in America after the 2007 financial crisis was that the very rich quickly became much wealthier than they were before, even if for a very short time they made slightly less income. The reason why wealth inequality in the U.S. dramatically widened after the financial crisis is pretty simple; the markets where the rich make their real wealth have been booming. Most Americans are not in the highest income bracket, and are also in lower-wealth brackets, so they largely, or completely, missed out on what was a stock market recovery. This is exactly what Thomas Piketty wrote about in "Capital in the Twenty-First Century." Thanks to the Republicans, the rate of return on capital is increasingly greater than the rate of economic growth. The result is increasing concentration of wealth at the top.
43
From reading the comments it is clear Professor Krugman is preaching to the choir. I have nothing to add to the excellent comments.
I always believed the great turning point in American politics was the S&L scandal. When the oligarchs and their Republican
allies got past that with no political fall out, they realized they could get away with anything, and so they did.
Feed a third of the population the red meat cultural issues they crave for personal justification, and they'll let you eat their lunch everyday.
59
@goofnoff: The Fed's manipulations of interest rates under the "dual mandate" wiped out traditional banking where banks held loans in their own portfolios, and paved the way to loan securitization and derivatives plays. Volcker's interest rate spike made the S&Ls insolvent.
"What we needed [was] increased government outlays and tax cuts for lower- and middle-income families, who would be likely to spend them."
There were so many opportunities to substantially increase spending like infrastructure repair & start building a nationwide network of highspeed rail system as well as beautification of inner-city areas throughout the country; the latter would bring down inner-city crime rates when the youth are busy rebuilding their neighborhoods. When the interest rate was near zero, the cost would've been so low.
Tax-cuts for lower-income groups could be achieved best by cutting payroll tax, which was done for 2 yrs. but it could have been done permanently by say, cutting payroll tax on the first $10K to 1% & on the second $10K to 2%. A good way to strengthen Soc Sec trust fund is by lifting the cap on it but then again cut it to 1% beyond say $150K to be less unpalatable to the rich.
(Both tax-hike & tax-cuts ought to be modest/moderate, unlike how it was at the tax-reform of 1986, when the top rate was cut to 28% when the bulk of tax-revenue came from the middle class. Prior to that, the rich were squeezed too much with a top rate 70% on over $215K, $650K now- if it were on over $25 million, that wouldn't be too bad)
I would say another higher marginal rate of 50% is necessary, but only on the highest 0.05% incomes FROM ALL SOURCES. That would bring in hundreds of $billions annually to significantly reduce the deficit.
17
Thank you Dr. Krugman for providing an article that allows us to pontificate about how abusive the GOP is toward most Americans. Even as the Republican Party has spent decades protecting gun manufacturers and the nasty weapons produced from regulation so we find the same protection from regulation provided to the carbon and auto industries and health care and banks. Protecting business at all cost outweighs any other consideration. Assurance of quality health care for most Americans or responsible care of the environment as the oceans warm or less greedy interest rates on student loans or supporting tariffs that wreck havoc on small businesses ... are ignored to benefit a few. Yes, it is a Party to be condemned for its ruthless actions against so many.
26
Government, monetary systems, stock and bond markets are “confidence” games. People must choose to participate and they can’t be forced. When people lose faith in government or business, the system takes a big hit. The election of Donald Trump is Exhibit A.
Our economic system runs on individual consumer spending, then business spending. After the 2008 Great Recession, even people with money and whose jobs were not in jeopardy stopped spending because they were shocked and frightened. Also, not spending money became virtuous, whereas being seen replacing all the windows in your house when so many others were suffering seemed both bad and possibly tempting fate. Simply put, there was a collective drop in “confidence”. It takes time to build, and ultimately overbuild, “confidence” in the system. Even now a bubble is building somewhere, in the U.S., China or Europe, fueled by the need of governments and societies to live beyond our means. We just can’t help ourselves.
One question of Mr. Krugman: If it was within the power of government to quickly right the economic ship and get it sailing full speed again why didn’t the Obama Administration push the necessary legislation—with sufficient funds aimed at the right projects—through Congress without Republican interference or input, in the same way Democrats passed Obamacare without a single Republican vote? After all, the Democrats had control of the Presidency, the House and the Senate for two years after Obama was sworn in.
5
I agreed with you then and still do that a significantly greater stimulus paired with tax cuts was needed, together with less of a blind rush to regulate and a fairer apportionment of pain between Main Street and Wall Street, although I think you are too kind to the party in power between 2009 and 2011. Management of the crisis initially was, in my view, mostly sound. But the failure of nerve (or vision) later, which might have blunted the return of the deficit hawks and the resumption of partisan gamesmanship that continues to be our essential gift to civilization, still seems to me where most of the blame must be laid.
2
Once again, Paul Krugman is onto something quite serious. One need only recall the infamous 2009 Republican seance at the swank Washinton, DC steakhouse, The Caucus, (close to the peak of the financial panic, when many midde class families were flocking to McDonald's in a desperate effort to salvage their homes) where they colluded on a single overriding congressional agenda over the next four years.
It was not, as one might think from their self-righteous hyperbole, to pass legislation to help people suddenly thrown out of work. Rather it was to concentrate exclusively on thwarting, at all costs, anything that the Democrats might propose to advance the cause of the stricken middle class with the explicit goal of preventing President Obama from achieving a second term in office.
While it cannot be denied that during past periods of Democratic control of the levers of power, they proffered their own bags of d∂irty politics in an effort to hold Republicans at bay, nothing approaches the shear callouness of that Republican resolution of pure self-interest during our time of great national peril.
This November and again in 2020, we'll be at critical juctures for reclaiming our democracy. We'll need, as so often in the past, to roll the dice. Let's hope that this time, given the Republican track record of promising to shower us with gifts but dumping five lumps of coal named Trump, McConnell, Ryan, Tax Cut, and Health Care Repeal on us, the Democrats will prove up to the task.
38
@Peter G Brabeck
Thank you for putting it so clearly. In 2008, when faced with a desperate financial situation for all Americans, Republicans crafted a strategy to serve their own political agenda. The plight of American citizens was not on their agenda. The political machine, and in this case I'm referring to the republican machine, has no interest in its constituents.
11
"Tim Geithner, the Treasury secretary, dismissed it as “sugar.” Beyond that, efforts to fight unemployment had to deal with a bizarre Beltway consensus that despite high unemployment and record low interest rates, debt, not jobs, was the real problem."
It is important to realize that bizarre Beltway consensus was the Democratic Establishment position, not just Republicans. Tim Geithner actually proposed that he be replaced as Treasury Secretary by Hillary Clinton, a big supporter of his adamant support of that bizarre consensus.
None of them were willing to do stimulus spending to save innocent workers or homeowners from the long-spreading economic disaster, only to "print money" to give at near-zero interest to bankers to save only them, save them from their own mistakes.
Now we see that bizarre consensus rallying in DC, claiming the election was stolen from them, and trying to get us back to that same bizarre consensus.
It should be no wonder that something, anything won other than that. It should be no surprise that attempting to blame Trump, who came along 8 years later, does not seem to save those of the bizarre consensus from the derision of voters who no longer believe their fluff and excuses.
3
So it was a financial crisis, but a financial crisis of the middle class, not of the banking institutions or their insurers. In fact, the middle class financial crisis had been going on much longer due to stagnating wages, but was being financed through the property bubble. What brought it all crashing down was in fact the oil boom of 2007. Suddenly, that $500,000 suburban home 70 miles from work (and 12mpg Suburban vehicle) didn't seem so attractive anymore when gas was >$5/gallon. Family budgets collapsed and suburban mortgages with them. The reason it's taken so long to get back to anything like normal is because wages are still stuck in the doldrums and family budgets are going nowhere. It won't take a lot to send it over the edge again, when families are living on a knife edge.
10
I find it interesting that somehow, no matter how bad a situation is, Republicans can find a way to make things worse.
40
Dr. K,
Every word of what you write in this brief history is true but since at age 70, I was very much hurt by the credit crunch and had to liquidate in order to avoid becoming homeless, I followed the events and the recovery program very carefully. The "fiscal headwind" as Mr. Bernanke called it was created by the efforts of some very serious people, who are still with us, who felt that our problem was debt.
It makes me ill because our best could not grasp that debt was the result of revenues dropping like a stone.
Republicans were empowered by the bad Obama policy response that gave priority to controlling the long rising costs of healthcare.
A young, very bright, very well liked economist, Peter Orszag, Director, Office of Management and Budget recommended to the President that he should initiate the health insurance initiative, The Patient Protection and Affordable Care Act and Mr. Obama, accepted the recommendation. It was passed by the Democratic Congress and I don't believe that it received a single Republican vote in the Senate.
Remember, before the election, polls showed that Americans overwhelmingly were for a single-payer system with the objective of reducing the rising costs that Mr. Orszag had been tracking as a staffer.
This initiative provided the energy and Big Money to mount the Tea Party movement within the Republican Party, which was the major contributor to the Democrats losing the House in 2010 and essentially ended the Obama Presidency.
4
We need a $1 tax on every stock market transaction. Maybe once a quarter there is a free transaction day for regular people to make changes to their portfolio. Exempt IRAs and 401k.
56
And yet the people most hurt by Republicanpo9licies continue to vote Republican. Burn me once, shame on you. Burn me twice, shame on me.
40
@AP18 Yes, it is a special kind of stupid which confounds all of us who watch in ever increasing dismay. We so need this nightmare to end.
1
If the USA government had to bail out the banks and ended up with a $700 billion deficit in 2009 because of their Corporate Welfare bailout then that was the wrong thing to do. What the government should've done was let the banks fail and start up a government pension and health scheme. That was an opportunity missed for the government to nationalise the health and pension scheme. Big business privatises it's profits and socialises its losses so more government is better for the economy. Also, all USA governments, past and present, are wrong for weakening the Glass-Steagall Act; Consumer Protection laws and the Dodd Frank Wall Street reform legislation. What would Lincoln think of all this!
22
@CK Lincoln who?
While one Democrat said notoriously that a recession should not be wasted, the GOP acted on that maxim. An adequate stimulus was obstructed; and resistance to relief for mortgage holders was expressed by a commodities trader with an atavistic snarl that birthed the Tea Party. Then came Trump with a promise of tax relief for the middle class--a promise he broke with boastful alacrity.
34
And here's the 'best' part....the 2008 meltdown was created by Bush-Cheney and the Republican Party in the first place, and then they refused to clean it up and happily blamed their horror show on that black guy in the Oval Office.
The reckless Bush-Cheney tax cuts gave the rich extra gambling money to juice Wall St., the ratings agencies became unregulated, corrupt rubber stamps for junk securities and sliced and diced junk mortgages, and the Bush-Cheney Administration specifically prevented states' Attorneys General from investigating banks handing out no-documentation, no-interest, no-income mortgages under the idiotic 'free-market' mantra of 'financial innovation'.
In 2003, during the height of the predatory lending crisis, the the Office of the Comptroller of the Currency (OCC) under Bush-Cheney invoked a clause from the 1863 National Bank Act to to preempting all state predatory lending laws, thereby letting financial predators run wild.
The Bush-Cheney OCC also issued new rules that prevented states from enforcing any of their own consumer protection laws against national banks.
The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, unsuccessfully fought the new rules.
The 2008 mortgage crisis wasn't something that just 'happened'.
It was a manmade Republican public policy disaster.
Voting Republican is always an act of nationally-assisted suicide.
November 6 2018
785
@Socrates. The destruction of the infrastructure of the nation that is going on under Trump through his Cabinet appointees is truly colossal. It has the potential to make any downturn now even worse than 2008 because it is destroying the levers by which the federal government actually gets thing done!
2
@Socrates
It already disturbs me that the mess the current occupant of the White House will leave behind will have to be cleaned up by the next Democratic Administration. This same cycle has already repeated itself over three decades and yet too many Americans have never noticed it....
2
@Socrates
Yes, and now this irrational deregulation is on steroids. Take the environment for example. We have opened pristine and rare ecosystems to development and explotation by big monied interest. Once these areas are compromised the original qaulities can not be brought back. It was brought to my attention that ephemeral ponds can now be filled without any prior goverment approvel. Each of these ponds is important habitat for the planets amphibian species. The ponds also contain many other species that have become rare and unique. Lets save those things can never be recovered.
1
Don't forget the example of why stimulus was the right solution: Of all the western democracies effected by the Great Recession, the US rose fastest compared to those who chose the austerity the right was preaching.
22
@Andrew Ross
Australia didn't even experience a recession. Partly because our banks were stronger and not as unregulated, but mostly because our treasury secretary advised our progressive government to "Go hard, go early" with a stimulus package and this advice was followed. That didn't stop our conservative opposition from complaining loudly about our increased debt burden as a result. Typical.
4
The gang in the gray flannel suits supported the men in the nation's board offices back in the day.
Now, with the fear factor added in, the 49% just has to continue to figure how to hold its own. The one percent and congress aren’t about to stand up to the Executive branch. It's almost as if the two party system is dead as well as the concept of separation of powers.
2
Put in plain language; The Republican powerful are robbing the nation and stashing the wealth in foreign businesses, bonds, and secret bank accounts off shore, right next to their other homes in foreign lands. They call it, "Globalization".
20
@Waves of Brain
Not only do they have a low propensity to spend their marginal dollars, but what they do spend is more likely to be spent outside the U.S. Thus, little or no stimulus from a tax cut for the wealthy. I'm not sure anyone factors this in.
10
"Specifically, policy failed because cynical, bad-faith Republicans were willing to sacrifice millions of jobs rather than let anything good happen to the economy while a Democrat sat in the White House."
You forgot to append "African American" in front of "Democrat". That qualification had a lot to do with it, too.
(As do the Calvinist underpinnings of the Social Darwinist, "the poor are lazy and unworthy", "if you're so smart, why aren't you rich" attitude of so many Republican libertarian oligarchs, who see themselves as the Elect and anyone without capital means as undeserving of any help at all, leading them to try to contract any attempt on the part of government to expand what they see as 'welfare' while more normal viewpoints would see those government efforts as adding to the commonweal. But that's a different rant.)
22
At the beginning of the crisis, the Democrats controlled the house and the Senate.
In 2009 they had the presidency, a super majority in the Senate and the house - they could literally do what ever they wanted and they promised change.
Instead they continued the Bush (worst president ever) administration finance policies and enacted Mitt Romneys Massachusetts health care plan from a decade ago. There was less than a half hearted attempt at a larger stimulus and single payer.
The predicament we are in now stems from that failure to deliver any meaningful change that people overwhelmingly voted for.
2
@Tom, Bear in mind many of the Senate Democrats were not much different on economic and health issues as many Republicans. Also, the 'super' majority you mentioned was only in effect for about five months.
9
@Tom: Your impressive store of knowledge must contain the nugget that although the Dems held the Senate, the GOP launched an unprecedented number of filibusters: during Obama's presidency, they numbered more than all the filibusters launched since the birth of the nation.
1
@Tom
On January 20th, 2009, 57 Senate seats were held by Democrats with independents Sanders and Lieberman, which gave Democrats 59 votes, one shy of filibuster-proof “total control.” Republicans held 41 seats.
The 59 included Kennedy and Franken. Kennedy had a seizure during Obama's inauguration and never returned to the Senate. Franken was not seated until July 7 because of a vote recount demanded by his opponent.
The real Democratic Senate number in January, 2009 was 55 Democrats plus 2 Independents, which equals 57.
That was when Obama’s “stimulus” was passed. No Republicans in the House voted for the stimulus. Democrats didn’t have “total control” of Senate and relied on Snowe, Collins and Specter to break a filibuster insuring it’s passage.
Then in April, 2009, Republican Senator Arlen Specter became a Democrat giving them 58 votes.
In May, 2009, Sen Byrd got sick and returned to the Senate in July. Even though Franken was finally seated and Byrd returned, Democrats still only had 59 votes.
Kennedy’s empty seat was temporarily filled by Paul Kirk in September.
Control of Congress by Democrats lasted from September 2009 through February 2010 when Scott Brown, a Republican, was sworn in to replace Kennedy.
Did Obama have “total control” of Congress? Yes, for 4 months, which is when Obamacare was passed with 60 all-Democratic votes.
Republicans own American misery and lies, big and tweeted, can't change that.
3
As written of in the NYTimes, another housing crisis looms ahead. There is a trick the banks are using to get even wealthier; remember that the first years of mortgage payments are mostly interest that the bank keeps with little equity owned by the debtor. Seductive offerings by banks have culminated in the reality that the banks are earning not only the mortgage interest, but the homes themselves through foreclosures. I wouldn't want to pay interest to the bank for years and lose the house. And then what happens? The banks resell the foreclosed homes continuing the cycle. Only truly well to do consumers succeed in holding equity in a home. Banks sucker in lower income groups into their trap.
5
Not to relieve the GOP of its responsibility, another reason for the slow recovery is that, unlike prior recessions, governments--state, local and Federal--didn't add back public jobs during the recovery.
7
It sickens me to hear Trump brag about the growth of the economy when the GOP Congress did all it could to slow economic recovery under Obama. As GOP leader Mitch McConnell said "The single most important thing we want to achieve is for President Obama to be a one-term president"."
40
Raising the debt limit is useful only when the economy is in recession and a complete nonsense once the GDP has fully recovered.
2008-2009 : economy is in recession, it makes sense to inject trillions of public money into the system to protect the most impacted and vulnerable citizens.
2010 : economy recovers from the recession, it makes sense to inject small amount of public money into the system to help the most vulnerable to come back on track.
2011 and beyond : GDP is back to pre-2008 level and growths continuously, no reason to inject public money into the system, the one and only priority for the administration is to generate a public surplus to decrease the astronomical debt.
Only selfish people with no kid or stupid people supported the idea of raising the debt limit in 2011.
@Erwan You're wrong. See Paul's argument. The economy being in a technical recession isn't necessary to think about a stimulus - even if it is performing not as well as desired, a stimulus may be warranted. Even now, the right kind of stimulus would be useful.
Besides, do you know what the debt limit is?
5
@Erwan
I think Erwan intended to say "depict spending" not "debt Limit".
Wrong. The debt limit is an artificial line in the sand. The money under that limit has already been Appleby and needs to be paid out. Anyone who cares about their children would never vote conservative Republican. As Krugman delineates, they are always the problem.
11
What I don't understand is why the Democratic Party hasn't scorched and salted the earth under the Republicans and their plutocratic sponsors in return, in the past two years! Surely, two can play at that game?
Dr. Krugman is restrained in his analysis of what happened.
We can call the period from 1980-2018 "The Great Theft."
It's been one, long, conservative, Republican, plutocratic attack upon the United States Government (remember how Reagan convinced everyone how "lazy and inefficient big government employees were"? "Welfare moms driving Cadillacs?" [giving rise to Aretha Franklin's popular song in the '80's] Etc.???), and upon the citizens it is supposed to represent.
The only slight slowdown in the process was when it became clear the days of Republican Shadow Governments were temporarily over, during Barack Obama's Presidency -- probably the last real Presidency this country will ever have. And there, as Paul indicates, the plutocrats dug their heels in every step of the way, to prevent anything being done for anyone but themselves.
And here we are on the other side, with the Republican Coup complete. Tyranny, poverty, police state brutality and disenfranchisement every direction you look.
Long before the French invented the more humane guillotine, there were still plenty of other ways to deal with oppression, as history has shown from Cromwell's time to our own.
It's only a matter of time.
25
@Steven - You are right that Democrats could engage in obstructionism just as well as Republicans can, but there are probably several solid reasons for not doing so. First, it wouldn't work out as well for Democrats, partly since they don't have a media arm as large and committed to deception as Republicans have in Fox. Second, it the people Democrats have traditionally represented - the lower, middle, and parts of the modestly wealthy classes – would probably be the only ones to actually suffer from Democratic obstructionism: The super wealthy can and do thrive equally well in a downturn as well as in a roaring economy. Third, and I could be wrong about this as well as the other two reasons, it's hard to imagine targeting and pulling off boycotts big enough to make major dent in their corporate sponsors without hitting many other businesses with severe collateral damage as well, although legislative actions such as requiring companies receiving federal subsidies to pay a living wage would help.
In short, I like your idea of fighting fire with fire in LBJ style, but I'm afraid in a world of scorched earth Republican tactics, any backdraft from more of the same would end up harming those it was intended to help.
4
“The single most important thing we want to achieve is for President Obama to be a one-term president…..
It is possible the president’s advisers will tell him he has to do something to get right with the public on his levels of spending and [on] lowering the national debt.... If he were to heed that advice, he would, I imagine, find more support among our conference…”
Senator McConnell 2010
Paul is exactly on the money. The Republican hypocrites made the national debt the big issue during the Great Recession, then no sooner do they get in power they drive the national debt into the stratosphere with a tax cut for big business and the filthy rich.
The Democrats really need to get control of the House this November, so please vote.
184
Blame your neighborhood Republican, for he (mostly, not she) is to blame, not only for the fake deficit hawkishness when we needed stimulus, but also for fake plans to "replace" healthcare with anything, fake thoughts and fake prayers to shooting victims, fake voter fraud, a free pass to fake schools that seek profit over knowledge, even fake wars like the one against weapons of mass destruction that did not exist. Just today, the Republican Party's head honcho touted fake death tolls in Puerto Rico. The problem with all this fakery? Stagnant wages are real. Cancer that you can't afford to treat is real. Gunshot wounds, hurricanes, getting out to vote only to discover that your name has been stricken from the rolls, debt collectors, dead civilians and soldiers--all real. No matter what Republicans say.
57
Persuasive on the wholesale corruption and dishonesty of the Republican Party -- the evidence is abundant -- but not on the "centrist" technocrats like Geithner who determined the response to the subprime mortgage collapse and the subsequent economic crisis.
It took Democrats as well as Republicans to demolish Glass-Steagal and set the stage for boom and bust money-grubbing by the financial services industry.
I sure as heck want to see the Democrats retake the House of Representatives in November. But the longstanding bargain between so called "centrists" on both sides of the aisle is really about serving different flavors of the one percent.
Again, Mr. Krugman is plainly right that the Republicans are much worse than the Democrats on any factual basis. But the worst does not excuse the somewhat better, when the latter also spends most of its time coddling the rich, feeding the military-industrial complex at the expense of basic human needs, and pontificating about "comprehensive immigration reform" that will only further strengthen the cheap labor lobby.
Maybe after the November election, I hope with a Democrat-led House, Mr. Krugman can recalibrate his target to include the Democrats who have also been working, wittingly or unwittingly, for regressive policies.
20
I totally agree with Krugman's opinion about the Republicans bad faith. No way were they going to allow Obama and the Democrats a better recovery. In fact the worse the recovery the better for them politically. Remember the Tea Party? But Obama made two mistakes. The first was having so many Wall St. types in the Treasury Dept. Having them oversee their own professional friends and ex-colleagues was not good politics. The second was not having some Wall St. CEO's take the perp walk. The two mistakes led to the accusation from feckless Republicans of a "bail out", and put Obama on the defensive, and he never really recovered the trust of the American people.
33
@Joe Smith Obama did not make any mistakes. He owed his presidency to corporations and banks who funded his campaigns in both Chicago and for Senate and the presidency. His rhetoric never matched his actions. His actions for 8 years were pro banks and corporations. He never got the FBI to go after the bankers, and he looked the other way when people were defrauded and forced out of their homes. Some of those foreclosures were done by lenders who did not actually own the titles, but he did not make the slightest effort to arrest these crooks. He assisted Countrywide, the worst of these lenders, by helping it to get bought up by Bank of America.
2
McConnell saying his #1 job was making sure Obama was a 1 term President;
Sequestration;
Absolutely no republican cooperation.
If not for the Fed.....
and now the Fed has no arrows in its quiver
and the republicans are cutting taxes, regulations and increasing spending like there's no tomorrow.
Maybe there is no tomorrow for republicans.
32
For a nation of laws and not men, how is it the criminal greed and reckless risk-taking for private profit and public liability that's been meticulously documented -- Former California Treasurer Phil Angelides's financial crisis commission made numerous referrals of prominent bankers to the DoJ based on evidence of malfeasance -- produced neither indictment nor civil litigation?
Too big to fail banks paid billions in fines and penalties but as Angelides has pointed out it was actually paid by shareholders of the banks like pension funds and university endowments, not the bankers nor their unindicted co-conspirators like the Republican financial overseers during the Bush Administration who looked the other way.
Wall Street came through the Category 5 credit catastrophe unscathed and within a year or two bank CEOs were collecting the highest levels of executive compensation once again.
The adage "Commit the crime, do the time" seems to have morphed into the Republican Get-out-of-jail card.
Today Willie Sutton wouldn't rob banks because it's where the money is. He'd run for office as a Republican or a Wall Street Banker because they rob not just banks but an entire nation and laugh their way to the Cayman Islands and back.
It not only pays to vote this November, it'll cost you big if you don't.
19
@Yuri Asian
That is what the old mob did. They took their assets and moved into financial crimes. The gangsters like Gotti were already anachronisms.
1
It's really a given that Republicans adore the wealthy and accomplished who are the Captains of Industry and the very wealthy, with a proven record of financially subsidizing the Republicans ascension to power and their ability to hold it, even now a Constitutional Crisis in which we will have one party undemocratic rule in conflict with our Constitutional principles.
So what do we make of the Republican belief in "Survival of the Fittest"? I could write even more of that inhumanity. But the facts remain, only people with sinister minds would resort to accomplishing the Kings and Serfs nation we now have. This is a lone selfish power struggle by the unloving Republicans who seek limitless profits for them and their benefactors in order to hold power, now nearly absolute, only now waiting for the confirmation of Kavanaugh.
The Republican economic principle is Trickle UP and OUT, not Trickle down which could be expounded on separately as a lie. While garnering support from the gullible followers, the Republican leaders institute policies that take their wealth. Giving free reign to the banks through deregulation was an act of unthinking greed that resulted in unbridled orgies of capital lending that brought down the economy. And once again, the Democrats had to clean up the mess, profoundly embarrassing the Republicans and their principles, if you want to call them that. But actually, Greed and deregulation are indicative of a lack of principles by the party of Pirates.
18
Deficits are always bad when Democrats are in power. The rest of the time they’re fine it seems.
50
Dr Krugman,
In 2013 you participated in a panel discussion with the Late Tony Atkinson the foremost authority on inequality and Chrystia Freeland one of your greatest fans. Freeland had just published Plutocrats: The Rise of the Global Super Rich and the Fall of Everyone Else.
Neoliberalism needs a government to cut down on excess redistribution of wealth and power regardless if it Republican or Democrat. A Democracy is dependant on a strong and vital middle class. History may record that Obama saved the American economy but fail to save the country and its democracy. America is rich enough but can it be led to understand it isn't the economy that all important.
7
In the last line of this excellent article, Mr. Krugman should be more specific. He states that Republicans--through obstructionism-- "were willing to sacrifice millions of jobs rather than let anything good happen to the economy while a Democrat sat in the White House". In fact, the GOP was "unwilling to let anything good happen while an AFRICAN-AMERICAN Democrat sat in the White House".
46
@MGerard
To update, "while a woman Democrat should sit in the White House"
Let us review once again the words of South Carolina Senator Jim Demint on the night of January 20, 2009, in a smoke filled DC steakhouse before a cabal of elected Republicans, including Bob Corker, Paul Ryan, Kevin McCarthy and recently appointed senator Jon Kyl:
“Our goal is a complete gridlock for the next two years. There is no place for bi-partisanship, compromise, only acceptable outcome is total victory and any politician that disagrees will be treated as a traitor. This is war.”
This is why conservatism needs to be outlawed in this country.
53
Could I offer an alternative explanation why the slump has lasted so long?
Everybody betrayed you – your presidents, your generals, your free press, your politicians across the spectrum, from the extreme left to the extreme right.
Everybody in position of power is self-centered and egoistic, from this very columnist who failed to foresee the Great Recession but never thought for a single second to step down and give the chance to the individuals who predicted everything correctly – that the wars in Afghanistan and Iraq would be futile and open the Pandora Box, that the housing bubble was unsustainable because it’s theoretically impossible that everybody gets wealthy overnight by selling each other our homes and that the taxpayers would be stuck with the full bill, that the export of the US jobs overseas would not create the better paid jobs here in America but undermine the negotiating power and standard of living of the middle class, that the journalists would betray their readers and viewers because their advertising income made them subservient to the global corporations, and that the reckless tax cuts wouldn’t fill up the federal treasury but skyrocket the national debt.
Over the last few decades there was no single free press outlet in America willing to publish the truth and the facts.
13
@Kenan Porobic
"Extreme left"? Not since the 30s, if then. Finally we have a few candidates that identify as "Social" Democrats; thanks to Bernie.
What is "extreme" about better health care, better education, better environment, better infrastructure and better wages?
The funny thing is that most Americans agree with these goals.
7
@Patrick Hunter
It is extremely bad behavior to spend the money that we didn't collect through the taxes. It used to be called STEALING before the economists came up with different term to make us feel good about self while doing it...
Borrow and spend at the bottom. Contract at the top. Politicians of both parties still don’t get it. That a vacuous boob like Little Timmy Geithner would fail to grasp the need for stimulus at the bottom shows the lack of intelligence of the elite. Since he took his marching orders from the big bankers in nycity it is clear either they forgot to study or really did want to destroy the middle class. Destroy they did. Prediction. The next downturn takes the rest of them out. Welcome back to the dark ages. Serfdom and royalty, nothing in between. Stick a fork in it. This turkey is done.
4
We're supposed to be proud to eat Ramon noodles under a bridge in order to be worthy of the great Walton children.
13
Not only the Republicans enabled unbridled greed to occur, but Democrat leadership involved in the banks bailout failed to give the mortgage holders the bailout money to to pay down their debt while saving the banks with the same taxpayers tax dollars that made up the bailout money. Now the banks are wildly wealthy and being deregulated once again allowing unbridled greed and away we go again and the mortgage holders are once again paying taxes and mortgage interest. There are indications of another real estate crisis brewing as written of here. The drive to unlimited profits will bankrupt everyone, including the wealthy invested in finance.
4
If Democrats toughened up and fought as aggressively as Republicans do, things would be much different in this country.
14
There's a lot to unpack here. Republicans have now espoused the same core economic policies for nearly forty years. Times have changed, as have the circumstances of the American economy. And unlike when Reagan was elected, we now have a lot of data about the effectiveness of supply side economics.
History has proven that the economic policies the GOP has pushed for forty years are great for wealthy people and big business, and that they can create short term booms in the stock market, but they're terrible for anybody without enough money to invest in a significant stock portfolio. The evidence is the failure of average wages to keep up with inflation over the past few decades.
Yet Republicans stick to the same economic playbook, because it works for their patrons, by which I mean their donor class. Rank and file Republicans go along with these policies too. One wonders if Republicans will ever have a new idea about how to promote economic growth, much less one that will benefit every American, not just a select few.
Do twenty-something Republicans look at the math behind GOP economic proposals with a critical eye, or do they just accept the putative wisdom of these policies as one might the dogma espoused by the clergy at their preferred place of worship? Maybe the new generation of Republicans assume that they will one day sit among the wealthy patricians of previous generations and take advantage of these tax policies.
31
I'm actually a little surprised to see this column. The contents are so transparently true to even the casual observer that it almost goes without saying.
40
@S
It obviously can't be said enough, since so many Americans seem not to get it, hence "Trumpism" and the incredible fact that these same Republicans control Congress.
26
This is why Krugman is a Nobel Prize winning economist. And he's right. I'm sure there are many Trumpists, that would say the opposite. But its true, more stimulus was recommended, but never delivered.
This isn't the actions of a political body that is expected to do the right thing by all Americans at a time of crisis, what the GOP did was to not only hurt blue states, but their own constituency, in red states where they are complainig that they were left behind. It was all to make Obama a one term president then open the money spigot, and let it flow, so the assumed Republican president would get the credit for fixing the economy that the republicans we so willing to throw off a cliff.
This is what the Republican party always has been, at the onset of the Great Depression, caused by the republicans, the public was told to be "patient" among other things. Had Roosevelt not been elected, the depression would have been much deeper much longer.
Luckily, Roosevelt was elected, and created infrastructure jobs, so that people would have money to spend, and grow the economy.
Obama, wanted to do the same thing Roosevelt did, which was to create infrastructure jobs, building dams, bridges, roads. Which is what the Chinese to today, in economic downturns, they create infrastructure jobs, until the economy picks back up.
Maybe that's the approach the US should use to fix our infrastructure, that would be better a than giving it to corporations to profit from out tax dollars.
126
The Federal Reserve saved the world. They provided literally many trillions of dollars in liquidity to both US financial institutions and European banks. There is a new book out entitled Crashed by Adam Tooze which was just showcased on the PBS NewsHour. It explores the global links of the crisis and how the entire planet almost went down the drain. We came to the edge of a true financial apocalypse.
Meanwhile, the Republicans went on a moral hazard tirade and blamed the whole thing on poor people taking out loans they couldn't afford. The remedy is then to just spend less and shut of the money. This was absolutely the worst thing to do.
Federal Reserve did save the global economic system by saving the banks. They are equipped to do that. They are not equipped to save millions of lost jobs. They dropped interest rates to zero, but that had no effect under such dire circumstances. Only fiscal stimulation would help and that requires legislation. All the monetary stimulation possible was applied.
Republicans don't know what fiscal stimulation is. They think it's a component of socialism. But they do know what tax cuts for the rich are. That they can do. But they won't spend money on the 99%, especially the bottom 50%.
That's why the recovery has taken 10 years. The economy crawled back out on it's own with little help from from Congress. The result is millions who ended up voting for Trump and got more tax cuts for the rich and nothing for them.
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@Bruce Rozenblit
The Federal Reserve saved Wall Street and the banks. That is not the world. Panic Paulson saw the world ending because HIS world was ending. I would have been fine. We would have had a sharper but much shorter recession with stronger rebound had we let the imprudent and improvident go under.
1
Immigration isn't a good thing if the USA spent $895 billion more than it took in last year.
Maybe someone needs to take a look at the official government statistics to see if bringing in immigrants extended families is uneconomic. Maybe do what Singapore does - only let in temporary workers and visitors who have to leave once they've finished the job and been paid. That way government doesn't get ripped off by new immigrants who take more out of the system in government payments than they put in with taxes. Common sense - what's the use of giving permanent citizenship to a new immigrant if they end up bringing out there extended families who cost the government an arm and a leg in government payments and hospital care etc and welfare. It's uneconomic to bring in millions of permanent residents from third world nations that don't have a welfare system.
4
@CKExcept that, what you say, is a lie. Immigrants coming in, and their extended families, bring new blood, new stimulus, new ideas into th country and the economy. What is wasteful, and harmful, is the transfer of wealth to the 1% in tax cuts and huge subsidies to companies, who use them NOT to create jobs, but to enrich people who are already rich. Try to think for yourself, instead of repeating falsehoods created by Fox News, which is a mouthpiece of the Republicans.
6
@CK
In addition to your point being almost entirely off-topic, you fail to mention that the President's in-laws just got citizenship by being the "extended family" of Mrs. Trump.
Where is your outrage about this?
33
If you think immigration is the biggest problem our country has you are clearly not paying attention, nor have you digested the article here. Conservative Republican lies and hypocrisy, including their immigration policies, are the destroyers of our democracy.
18
The slump isn’t over yet and the worst is still to come because the system is corrupted to the very core.
It is the last moment for the individuals like Mr. Krugman to step down and give chance to the people who understand the problems and know how to solve them.
It’s getting very late. We might be run out of time if we stayed on the wrong course….
5
@Kenan Porobic
And that would be who, you, the GOP, who exactly. Since Krugman holds a Nobel Prize, that leaves you, Trump, well short of the education needed to understand economics. Remember the GOP just blew up the deficit, and is now subsidizing corporations, that you have yet to benefit from.
You're probably going to say, well the economy is booming, to that I would say, thank you Obama. The tax cut for the rich and corporations are short lived, and when the next recession comes, (one comes every time a republican is in office, there won't be any gifts to give to corporations, they have gotten everything that the government can give them, at you, your children, and your grandchildren expense.
26
@Kenan Porobic – And those who "understand the problems" better than Mr. Krugman would be ..?
4
You notice that Republicans don’t excoriate Democrats within galaxies as much or as intensely as Democrats excoriate Republicans? Re-play the speeches made over the years of Barack Obama’s presidency by Nancy Pelosi and Harry Reid, then the speeches made by Mitch McConnell, John Boehner and Paul Ryan. It’s like night and day. And Dr. Krugman sees fit to lambaste Republican unwillingness to cave to liberal programmatic boondoggles that never solve real problems but merely assuage the guilt of elites and provide pretexts for electing liberals. The Democratic threesome, Obama, Pelosi and Reid, made NO serious attempts to work with Republicans for YEARS on moderating the effects of the crash and Great Recession – not even Obama, who claimed to but was revolted at the notion that he needed to get into the trenches and DICKER with his ideological adversaries to make wholesome sausage.
It’s Democrats who created the polarized mess we’re in and who summoned the Tea Party. If Obama and a Democratic Congress 2009-2010 had been willing to listen to Republicans’ cries for attention to the private sector on excessive regulation and taxation, we might have emerged from that recession to typical sharp growth YEARS (and profound misery) before we did. After 2010, it no longer mattered, because we had entered our own Dark Ages of useless government. But no such willingness manifested, and instead the nation focused on funding public sector jobs that were lost anyway as soon as …
3
… “stimulus” funds dried up, funding green boondoggles and enriching union coffers in Detroit by expropriating private equity; after which a hung Congress wasn’t about to vote more good money to be thrown after bad.
Liberal Democrats are not self-evident social saviors and leveling America and constraining its commerce to fund social boondoggles is not an unquestioned emanation from Dr. Krugman’s burning bush. “Obstructionism?” Giveth me a break. The rascals you hired lacked the political skills to overcome the rascals opposed, or even the interest to explore ways of doing so. They just wanted to spew bile. And they did – still are.
And the most pathetic excuse from the left? That they were OBSTRUCTED, as if their panaceas were to be accepted as divine scratchings on stone tablets that even Moses shattered in anger; and that their adversaries unfairly exercised their legitimate power to stop them cold in their tracks.
Pathetic indeed. Hire better rascals.
4
it was Mitch McConnell and the Republicans who vowed to make Obama a one term president.
33
@Richard Luettgen
Thank Heaven Mr Luettgen is not in the wheelhouse!
There is a challenge to all the GOP congressmen and senators to provide justification for what they did when Obama was President and what they have done now with massive tax breaks to rich. They must address what happened to their concerns for deficit.
37
@Mir "They must address what happened to their concerns for deficit."
...And if the Republicans fail to do so, they will be re-elected, unmercifully.
2
President Obama could not get congress to approve more spending for one simple reason, the continuing ideology of St. Ronnie. Less spending means smaller government, it means as we are now seeing the reduction in agencies that we taxpayers have lobbied for years to establish. The SEC, FDA, EPA, FTC, all the regulatory commissions, it is the goal of the GOP to remove as many regulations from business as possible. They want to return to a buyer beware society. It will be your responsibility to see that your meat does not contain toxins, or for you to filter the air from that coal burning plant. Any thing that costs their friends money is a target.
They call allowing banks to borrow from the FED at 8% to bolster their reserves a bailout. It prevented runs on the banks and a 1929 type crash, the recession was deflation, it was fueled by unpayable debt and greed. Those collateralized debts were like candy to the investors, until they turned sour, then there had to be blame, and those responsible got away with it. Mr. Obama appointed a commission instead of allowing congress to hold hearings. On it he appointed some knaves who sabotaged it, The GOP has obstructed recovery means ever since.
Smaller government means a Libertarian type government. Those with the gold set the rules, the rulers give the workers just enough to keep them from revolting. Rockefeller was a piker compared to today's merchant kings.
71
I guess Krugman's love affair with the ACA prevents him from acknowledging the damper it placed on hiring and wages. Eight years of overregulation played a part as well, but no mention of any of that here.
Had Obama's first two years of complete control of Congress concentrated on jobs instead of revamping the entire healthcare system that affects every single american, Krugman would have had nothing to write on this topic.
But Obama clearly doesn't read Krugman as he took credit from the current good economy in a speech based on his own economic performance, which he must regards as excellent.
6
@kwb
It would help this observer, whose formal economic education consists of a 2 semester college course in Economics 101, in assessing this comment to have even a brief elaboration on "the damper [ACA enacted in March 2010] placed on hiring and wages."
A similar elaboration on how a concentration on jobs - with a definition - was foregone but would have solved substantially all the economy's problems, which seems to be an appropriate interpretation of Prof "...Krugman would have had nothing to write on this topic."
On reflection, something a good deal more weighty than brief elaborations to prevent the comment from being merely unsupported assertions.
This is not to say that the assertions cannot be adequately and appropriately supported. Further, while I don't have any standing to invite the commenter to do so, the Times as solicitor of comments appears to have such and I respectfully urge it to do so. Whereupon I pledge to thoroughly review the support and issue an assessment.
2
@kwb How the ACA of all things put a damper on jobs and hiring is beyond me. Employers hire workers to make things they can sell. The housing sector blew up in the Great Recession. Homeowners facing foreclosure don't buy stuff. No housing starts means no construction jobs, no lumber, no household appliances, no furniture, etc. So if stuff isn't being bought, why would employers hire?
17
Uhh, @kwb, according to statistics that even tRump touts, there was full employment when tRump came in and there is still full employment now. I.e. full employment started under Obama in spite of Republican tricks and lies.
18
The report that the US spent $895 billion more than it took in last year explains the booming economy. Give me that credit card limit and my economy will boom too.
71
@terryg The U.S. spent $895 billion more in the first 11 months of FY 2018 than it took in. There's still another month to go.
2
Dr. Krugman succinctly recounts unscrupulous Republican actions. But while Republicans have damaged the country, the problems we now face have developed over decades. The increasing effects of a globalized economy have played a major role. It is now more possible than ever for companies to offer jobs with inadequate wages and insubstantial benefits packages, and this situation has come about not only as a consequence of decades-long attacks on labor unions (again, by Republicans) but also because jobs are sent to places where labor costs are low.
Do the Democrats have any more answers than do Republicans? Until there are programs for jobs that are permanent and not part of stimulus packages, we will remain stuck in a downward cycle. Yes, the Republicans are unscrupulous, but I have yet to see substantive economic plans from Democrats.
7
@A
So people keep repeating the globalized economy, how well do you think the US economy and corporations will do, without the global economy, even the Trumplican party gets it, they call it free trade.
1
"The very same politicians who piously declared that America couldn’t afford to spend money supporting jobs in the face of a deep, prolonged slump just rammed through a huge, deficit-exploding tax cut for corporations and the wealthy even though the economy is currently near full employment."
When their man Trump says that people will get tired of winning, its worth keeping in mind there are at least 3 wins for the right in the quote above.
1) they prevented the gov't from bringing back jobs, a win since preventing the gov't from acting prevents demonstrating the gov't can help
2) the economic pain helped drive voters to the man who said "I alone can fix it" and carried on about the rigged system.
3) cutting taxes now while the economy is booming gives them the trifecta. When the inevitable downturn comes and deficits balloon they will cut social programs like Medicare and Social Security; after all everyone will agree that raising taxes during a recession will prolong or worsen it.
68
Leona Helmsley said that only little people pay taxes. She forgot to say that only little people pay the price for tax cuts, for financial mismanagement by politicians and corporations, and for other problems in America.
Where is the money to rebuild our infrastructure? Candidate Trump promised the nation that he'd fund this. It would create new jobs for plenty of people.
Where is the plan to make America great again? What about putting America first or is that only for the richest Americans?
What see and hear are lies from the very top that we're supposed to believe. Every nation is cheating us. Every trade deal made before Trump was sworn in is bad for America. Doing anything to protect the environment, protect endangered species, keep our air and water clean is bad for business. But it's okay if we die because nothing is done or regulations are rolled back.
What the GOP, Trump, and Kochtopus are doing benefit them, not us. They live in an America that has nothing to do with 99% of us. In their America jobs don't matter because they don't have to worry about paying the bills. We do. What we need to do is end welfare for the rich so that there's something there for all of us, not just the richest. Then again, there was the French Revolution, the Russian Revolution, and, more recently, the ending of apartheid in South Africa.
Revolutions and social change occur in spite of politics and rich people.
200
@hen3ry end the cororatocracy
1
So the Republicans were responsible for the slowdown of the economy and long lasting slump during the Obama years because they wouldn't let Democrats spend money we didn't have. Got it.
Now, thanks to President Trump and a Congress following his leadership, we let people keep more of their money, remove burdensome regulations, approve the Keystone Pipeline, renegotiate trade deals, etc., etc., and we have a roaring economy. Who gets credit for that?
Also, why do progressives only worry about deficits when calls for tax cuts, but not when we have stimulus spending bills?
Also, when will you be writing your thank you column to President Obama for giving us this excellent economy? Finally, if the economy continues to grow in the next few years, will Trump get any credit for it? Asking for a friend.
But...but...what about the deficit exploding
6
@Jay S.: You have it backwards. Government has to stimulate the economy during a recession, to prevent a collapse and depression, and you have to reduce the deficit when the economy is booming, fund infrastructure renewal and strengthen things that we all need such as education and job training, social safety, affordable health care and a clean environment, because then you have the money to do so, instead of showering it on the wealthy who do not need it.
176
@Anna Who decides what the wealthy needs? Asking for a friend.
@Jay S.
In typical fashion, a trumpian view of the world that doesn't fit the reality.
You talk of the democrats spending money we don't have, to stimulate the economy that the republican party destroyed. You forget that when Bush took office there was a surplus of money, and the Clinton balanced the budget for 6 of the 8 years he was in office.
You also forget that the tax break that corporations got, and the rich 0.5% and the 1% got, you'll pay for, and yet you continue to assert that you have benefited from it, really. And the rolling back of environmental regulations you've benefited from those too, how. Sure you say, well our wages have grown 2.9%, really adjusted for inflation, your still making 2007 dollars in a 2019 economy. Now your saying well companies gave bonuses, really, so out of the hundreds of billions they "repatriated" at a discount, a very small part of it was given to employees, and then it was a graduating schedule, only the longest tenured employees got the maximum "bonus". The other 4 trillion was spent where, oh right on buying back their own stock, and you've benefited from that how? unless your one of the 10% that owns 80% of the stock you haven't benefited from it at all. The CEOs who's pay is based on stock value as opposed to the long term growth of their company, that's who benefited from it.
Essentially the GOP gave the gold mine to the rich and corporations, the rest of us got the shaft.
43
I am beginning to think that the main category of economic's and the difference between major macro economic plans isn't between Keynes, Hayek, Robinson, and others. Rather what drives one's theoretical choice is really a question of how we sublimate , in Nietzsche's terms , the natural human need to punish. Liberals generally rationalise taking from those who have surplus and redistribute it . And they use things like data and evidence and concepts like the public good to justify this. They also note how many, many rich are born on third base thinking they hit a triple and work to accumulate more , often producing great amounts of negative externalities for the wider society. Conservative/ libertarians want to punish the weak, the sick, women , and other traditionally oppressed groups, because hey, the winners proved there worth by hitting triples. I invite readers to look closely at the smug satisfaction of the hard core right wing Republican Party when they throw people off of medicaid, or make food stamp recipients take drug tests, while blowing up the deficit so they can write off their private jets. It's not enough that they line their pockets with gold snatched from the public purse, they need to villainize and crush the poor, single mothers, hungry kids as somehow deserving their lot. Look at the faces in the rose garden reception after the house voted to kill Obamacare. Tell me beyond all the social science and numbers that Nietzsche isn't onto something.
544
@Brendan Taxation - the essence of which is collecting moneys for services provided - is by no means "punishment" or even motivated by a desire to hurt. It's a way to share in paying for needed goods and services. When you go out to a really nice restaurant, does the management "hate" you more than the manager of the local Mickey D's? Well, by your logic, yes.
@Brendan
A simpler explanation of the conservative/libertarian perspective would be survival of the fittest (and, yes, being born rich is an attribute of fitness). I am fine with that. If you keep artificially supporting those ill equipped to survive, you only and up enriching for failures.
@Brendan This is just silly. I want to breathe clean air and drink clean water. I want to enjoy block parties with my neighbors. I’m not interested in punishing anyone. Yes, we have to protect ourselves from people who pollute the air and water, and some of their actions are due as much to vandalism as they are to greed, but Nietzsche is essentially a philosopher of failure, and probably the last person we should look to for an understanding of our present world.
It's true that the GOP impeded the recovery. But they couldn't have stopped the Obama administration from prosecuting financial criminals and ensuring that bailouts went to Main Street as well as Wall Street.
Instead, CNBC's Rick Santelli dog-whistled the blame at "irresponsible" mortgagors (read: the poor and minorities) rather than on bipartisan deregulation. That rant gave rise to the Tea Party, and eventually, to Trump.
It was during the Clinton administration that Commodity Futures Trading Commissioner Brooksley Born warned about toxic derivatives, and her SOS was duly shot down by Dep. Treasury Sec. Larry Summers, who accused her of fomenting financial crisis. How wrong he turned out to be, but expert that he is, he went on to become one of Obama's chief advisers.
For as Wikileaks has shown, Obama's cabinet was vetted by Citigroup. Geithner has since gone on to make big bucks in private equity, and Atty. Gen. Eric Holder's seat at white collar defense powerhouse Covington & Burling was kept nice and warm for him.
Although the White House boasted in 2012 that it had criminally prosecuted 530 financiers since the collapse, a subsequent investigation by the DOJ's Inspector General revealed the real number to be only 107, with real restitution to the public less than $100 million, and not the boastful billion.
This is all a matter of public record. Maybe the Democrats will start winning elections once they start switching their allegiances to Regular Joe and Jane.
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@Karen Garcia: All this does not negate Krugman's arguments. If Obama had been a Republican, we'd be deep in the Second Great Depression now.
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@Karen Garcia
And who is Trumps cabinet vetted by, oh right Goldman Sachs. It's always amusing to read a trump supporters take on Obama's cabinet, while ignoring their republican presidents Bush, Reagan, cabinets, and the fact that those people were also friends from oh right, Goldman Sachs...facts are oh so important.
https://money.cnn.com/2018/03/07/investing/gary.
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@Karen Garcia
Hard to believe your theory of winning when a good portion of Regular Joe and Jane vote for Trump.
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Dr Krugman I remember your calls for a larger stimulus package saying it was not enough. But I clearly remember Republican opposition to any and all stimulus because of their newly found concern for deficit. Strangely they weren't concerned about deficits when W was president.
Our recovery from the Great Recession took far too long and too much of America has yet to recover from it. Republican politics have been holding this country hostage.
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Now that the deficit is on track to reach 1 trillion in the near future thanks to the Trump giveaway to the mega rich aka tax cuts, will the punditocracy and the average disengaged American FINALLY get it through their heads that the Republicans have not been the party of fiscal responsibility for a very long time, if indeed they ever were?
I’m not holding my breath.
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@Ken - I agree th Republicans are hypocrites, but fiscal responsibility for federal government has always been a disaster.
The federal government has balanced the budget, eliminated deficits for more than three years, and paid down the debt more than 10% in just six periods since 1776, bringing in enough revenue to cover all of its spending during 1817-21, 1823-36, 1852-57, 1867-73, 1880-93, and 1920-30. The debt was paid down 29%. 100%, 59%, 27%, 57%, and 38% respectively. A depression began in 1819, 1837, 1857, 1873, 1893 and 1929.
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By making it legal for corporations to no longer participate in our nation as any other citizen does, through taxation, the burden of all of the gimmes given through the Tax Scam Bill will fall upon what's left of the working and middle classes. The future should look bleaker today than any other time since the Great Depression.
The current GOP is the legislative arm of America's corporatocracy. Absolutely every single one of the departments in the executive branch has been busy rolling back everything they can in favor of corporations, regardless of the human toll those rollbacks will cause.
On the environment, nothing was too horrendous to roll back and they're not yet done. Asbestos? No problem. Coal mines dumping toxic materials into the drinking water? No biggie. That particular rollback was one of the very first pieces of legislation sent to Trump. Claire McCaskill and Joe Manchin both voted yea, by the way.
On education, predatory lending and predatory schools are back. DeVos has a personal interest there. She's also rolled back some of what President Obama and Congress did to alleviate the debt burden on our young.
Everything the Trump administration and the GOP are doing now is designed to clean us completely out. I've used the term "Ferengi economy" in previous comments. That is the age we now live in.
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Notes on ‘Capitalism, Socialism, and Unfreedom’
https://wp.me/p2KJ3H-345
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@Rima Regas
Remember that it was the liberals who gave us Kelo that lets corporations kick us out of our homes. You are half right. One side works for the corporations, but so does the other.
@KBronson
Nothing in what I wrote says any different. I was careful to word both of my comments to clearly implicate both parties.
One is completely under the control of the oligarchy. The other isn't free, either.
Scorched earth policies indeed, Dr. K. - we know from John Boehner's bragging speech of Sept. 15 2011 that GOP'ers were engaged in a 'capital strike' under Obama, unless/until they got tax cuts for 1%-ers and corporations:
https://www.huffingtonpost.com/robert-s-mcelvaine/capital-strike_b_96540...
following GOP'er Master of the Universe Paulson getting down on one knee in the Capitol at Nancy Pelosi's pantsuit hem in 2008, begging her to round up all the Dems to vote to keep 'this sucker from going down' (Dubya's words) without 1 single supporting GOP'er congressional vote:
https://www.theguardian.com/business/2008/sep/27/wallstreet.useconomy1
Awesome.
Now, the GOP'ers are planning yet another heist, since the $1.5 Trillion$ tax heist of December 2017 left too much behind for Jane/Joe Sixpack:
https://www.nytimes.com/2018/07/31/opinion/editorials/100-billion-tax-cu...
The only thing vultures know how to do is voraciously pick over more carcasses - and come up with new snake oil P.R. schemes to paper over what they are about.
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@R. Law
Vultures and snakes are absolutely necessary for our ecosystems. Republicans are not.
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The Great Recession hasn't ended yet for millions of Americans and their children who were just starting out at the start of it, and since.
Blame goes to Republicans, first. They are the ones who, when taking over the House of Representatives in 2010, began to force austerity on as much of the nation as they could. The damage Republicans did before Trump can be measured in ruined lives. Those of my generation who weren't lucky enough to hang on to their "good jobs," will probably die working. As it is, every so often, we read about older folks who are still working menial jobs well into their 70s. That's what awaits those of us in their 50s who didn't make it out of the Great Recession.
But we cannot place all of the blame only on the GOP. Democrats focused only on getting the banks bailed out and that is where Joe Stiglitz is right. Homeowners should also have had their bailout. They didn't and as a result we have housing crises everywhere in the US, with California probably going through the worst of it.
More should have been done to shore up small and mid-sized businesses at the start of the recession. The banks refused to lend and we suffered as a result.
There is also the issue of the cycles we have been going through, with each subsequent recession being worse than the previous one.
Which brings me to the Tax Scam Bill... The next recession will be a depression.
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Blog#42's 'Things Trump Did While You Weren’t Looking' https://wp.me/p2KJ3H-2ZW
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@Rima Regas this is what happens when lobbyists and corporations and the ultra rich run a country. We get government of, by, and for/in favor of the rich.
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On the cyclical nature of downturns:
There is a current debate between Joe Stiglitz and others on the nature of secular stagnation. It is a theory that explains the cyclical nature of our downturns. Here is my definition in language non-economists can absorb.
Defining Secular Stagnation
"When we think of economic downturns, we generally think of them as flat up or down. We are all familiar with terms like recession. That is what we are now very slowly getting out of. We know, from our parents and grandparents, what the utter devastation of a depression is. We know, from our most recent experience, the Great Recession, what that feels like. Some months back, a term was added to the economic conversation: secular stagnation. Though the concept isn’t a new one, it has recently been reintroduced.
Secular stagnation isn’t as intuitive as any of the terms I list above. It also isn’t a flat up or down kind of feeling. Imagine a 3-D graphic that describes movement: it’s got depth and is more akin to a creep, with sudden jerks, followed by more creeping, more jerks, going in widening concentric circles, until that cycle is broken, either with a period of growth, or another sudden slump. The theory is that each crisis is deeper, longer, and more severe than its predecessors."
https://www.rimaregas.com/?s=secular+stagnation
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Your read of recessionary cycles is flawed. The 73-74 and 81-82 recessions were worse than the 1990-91 and 2000-02 downturns.
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We need to listen to Dr. Krugman and President Obama as they set the record straight about recent financial phenomena, then vote accordingly. Otherwise, unfortunate history will repeat itself.
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