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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe Economic Argument Is Over — Paul Krugman Has Won
The Economic Argument Is Over Paul Krugman Has Won
For the past five years, a fierce war of words and policies has been fought in America and other economically challenged countries around the world.
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Over the course of this debate, evidence has gradually piled up that, however well-intentioned they might be, the "Austerians" were wrong. Japan, for example, has continued to increase its debt-to-GDP ratio well beyond the supposed collapse threshold, and its interest rates have remained stubbornly low. More notably, in Europe, countries that embraced (or were forced to adopt) austerity, like the U.K. and Greece, have endured multiple recessions (and, in the case of Greece, a depression). Moreover, because smaller economies produced less tax revenue, the countries' deficits also remained strikingly high.
So the empirical evidence increasingly favored the Nobel-prize winning Paul Krugman and the other economists and politicians arguing that governments could continue to spend aggressively until economic health was restored.
And then, last week, a startling discovery obliterated one of the key premises upon which the whole austerity movement was based.
An academic paper that found that a ratio of 90%-debt-to-GDP was a threshold above which countries experienced slow or no economic growth was found to contain an arithmetic calculation error.
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more:
Read more: http://www.businessinsider.com/paul-krugman-is-right-2013-4#ixzz2RTc1FAE6
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http://www.colbertnation.com/the-colbert-report-videos/425748/april-23-2013/austerity-s-spreadsheet-error?xrs=share_copy
magellan
(13,257 posts)The failure of austerity was obvious a long while ago. If those in charge were truly interested in what was best for their countries, they'd have abandoned it already.
This. Is. What. They. Want.
This is all going according to plan. In my darker moments, I feel certain the ruling classes are intentionally reducing all of us to serfs and peasants again while elevating themselves to a pre-Enlightenment-style aristocracy.
Myrina
(12,296 posts)They wish the early 20th century worker's rights movement had never happened & are doing their level best to un-do any and all of the progress average folks have made.
They don't want a middle class, they want poor working rabble too desperate and dumb to do anything other than catch crumbs & keep the wheels of capitalism going.
Evil Fuckers.
deutsey
(20,166 posts)I think they also believe they can--as John Lennon once prophetically sang--keep us drugged with religion and sex and TV (or, now, virtual technology).
And if enough of us DO try to take to the streets calling for change (like Occupy), they have enormous police-state power that can quickly quash such movements.
They may be right, but they're also too arrogant and stupid to realize that they won't be able to sustain that for long before some serious shit blindsides them hard, either through revolution, economic collapse, the environment going haywire, etc.
Myrina
(12,296 posts).... they want to maximize their profits NOW - they're not building "empires" like the Rockefellers & Vanderbilts, it's all about instant gratification. Perhaps because they know they can't have a long-term 'empire' because of those things you mention ("Get it while the gettin's good" .
deutsey
(20,166 posts)They're fixating on the the short-term gain at the expense of their own (not to mention OUR own) long-term security, the fucking morans.
I don't think we could ever make a utopian paradise here on earth, but we could create something that's much more sustainable and in balance with the natural world while filling the basic needs of much of the life on this planet.
But that would require assholes relinquishing their desperate need to be more important and better than everyone else, which I guess means we're all doomed, because that ain't going to happen any time soon.
dotymed
(5,610 posts)Sometimes I wonder if "they" know something that we don't about the future. "They" sure act like in the movie 2012 where "they" have to pay a billion euros to survive on the Chinese built "arks."
Probably not that scenario but "they" have definitely thrown long term stability to the dogs in order to make huge profits N
deutsey
(20,166 posts)It was recently when I read an article about a trend of people building backyard fall-out shelters again. Some of the designs I saw were pretty elaborate, a few were almost like a small neighborhood underground. I wondered if really wealthy people aren't building such well-supplied "escape hatches" for when the shithouse goes up in flames.
I don't know if they are or not and don't spend much time thinking about it. Your post just reminded me of it.
I wondered back in 2000 why they had to have Bush in there one way or another. It was perfectly obvious that they were going to get him in the White House come hell or high water. I knew then that the rich were putting him in there to fix it so they could accumulate money faster and I wondered why. Then Bush bought that land in Paraguay over a large aquaphor...well, go from there....
dotymed
(5,610 posts)Yes, Some of them are very elaborate. They have hospitals, auditoriums, schools, etc... They are huge underground cities and very costly to join. They give discounts for vital occupations like Dr.'s, engineers and even certain tradespeople. A couple of years ago, I posted the website of one of these places. Also the manufacturers website. The structures were built in sections with a special material and hermetically sealed (joined) to the other buildings. These were futuristic, underground cities (very elaborate) and huge. The cost to buy a space there was tremendous but selling like "hotcakes."
I'll have to check, I believe one of the nicest was in the area that bush, chaney and rice bought their land together (Brazil?).
Eleanors38
(18,318 posts)Good, stable salaries. That model is collapsing to be replaced not by capitalism as we knew it but by a profligate class which can get anything it wants, anytime. And it will seek to have the police & military power to keep it that way.
brush
(53,745 posts)I think they are arrogant and confident enough to believe that their wealth can buy them more than enough security to wall themselves off from us, the rabble, in their wealth enclaves. And if their security can't they're begining to find ways to beef up police forces with drones. And we know who those drones are meant for. I'm sure ALEC is even crafting legislation that will allow the military to operate in the country, something that's always been off limits. That's in anticipation of being able to put down any popular uprisings.
What they don't take into account is that there is always a way. Police and military are not going to turn and fire on their own people forever. And I say we are not only going to eat cake, where going to eat cake and bread, and meat too.
WCGreen
(45,558 posts)They ignore the protesters...
Yavin4
(35,423 posts)Better to give workers a slighly larger piece of the pie than to lose the entire pie. Now that Soviet style communism has collasped and China is nothing more than a corrupt authoritarian capitalist nation, there's no fear among the aristocracy of another worker revolt.
Thus, they are emboldened to pursue austerity.
deutsey
(20,166 posts)It was more about saving capitalism than it was about implementing socialism.
I still admire what was accomplished with the New Deal, mind you. But seeing it in that context makes sense when you realize there were violent strikes in the streets, workers taking over factories, etc.
Yavin4
(35,423 posts)and by giving labor political and economic power. Without his reforms, we would either be socialist or more likely fascists.
dotymed
(5,610 posts)ladjf
(17,320 posts)brush
(53,745 posts)momsrule
(100 posts)Have been noticing for some years already that wages have stagnated except for those in high places. With the advent of Citizens United debacle, those in high places can buy legislation that advantages only themselves/corps. Those in power want not just power but all the money they can grab, while paying little or nothing in taxes. Remember Romney wanting to reduce capital gains taxes? No wonder the deficit spending. Government tax coffers are getting leaner.
deutsey
(20,166 posts)Billionaire Britain: Just how little the rich contribute would shock most people
We are living in an economy increasingly geared to catering to the wealthy
http://www.independent.co.uk/voices/comment/billionaire-britain-just-how-little-the-rich-contribute-would-shock-most-people-8587803.html
BethanyQuartz
(193 posts)We are much easier to control this way.
deutsey
(20,166 posts)I heard an interview with Chris Hedges (by Richard Wolff) in which he said he believes this situation is unsustainable, that eventually the burden most people are under will erupt.
He said he didn't know what will spark it, but it will happen.
However, he wasn't confident it would be positive...while he hoped it would manifest into something along the lines of Occupy, he said the rightwing seems more organized and better prepared to exploit such a situation.
BethanyQuartz
(193 posts)There are two ways I know of to stave off popular movements for economic and resource reform that annoy the wealthy. One is to frighten and oppress and deprive people so badly that they turn to dictators. This happened in Germany and Italy.
The other is to create a large middle class and convince them that it is in their interests to keep the rich in power. This happened in the US after WWII.
But it looks like the day of the middle class is over here. Will they really be so foolishly short-sighted as to go the other way now, nurturing desperate poverty, hatred, and fear? It seems so. I hope I'm wrong.
Nay
(12,051 posts)up every last dime for themselves.
They didn't follow bad recommendations nor data. They found recommendations and data to fit their goals.
fasttense
(17,301 posts)Capitalism is what is the problem. Austerity is simply a more vindictive version of it.
The problem is that the uber rich control the corporations and through them they control the majority of the wealth of our labor.
These CEOs and board members of corporations decide what to do with the profits of our labor. Why? Why should they get the final say on what to do with what we make with our labor? Why should they keep the profits from our work? They have no more a right to them than they have a right to own our children. We need to take over the corporations. We need to get rid of the CEOs and board members and replace them with us workers. We need more than unions, we need more than higher wages, we need to be in a democratic society even at work. We need a democratic work environment to prevent the uber rich from hurting us with capitalism like they do over and over again.
FDR put in regulations that would have stopped this Great Recession. The minute the politicians took off those regulations, we had another capitalist economic crash. We had the regulations removed because the CEOs and Board Members have all our wealth from all our labor and they used that wealth from our labor to take away all those regulations they hate so much. You can not control corporations with more regulations, you can not control capitalist crashes by giving away the wealth of your labor to the uber rich. They will merely use that wealth to corrupt democracy and destroy economies over and over again.
We must take back the corporations and turn them into worker controlled and directed businesses. The reason Russia failed is because instead of a CEO and Board of Directors, they put the government in charge AND NOT the workers. The same with China. They are NOT socialist or communist. They merely replaced the dictatorship of CEOs and Board of Directors with dictatorships of the state or government. True democracy can only be obtained by the workers having control over the end products of what they make.
xtraxritical
(3,576 posts)fasttense
(17,301 posts)When I first came to DU, when the bushes first stole the election, we were just glad to have a place to talk about liberal ideas without right wing nuts coming in and disrupting everything. Now DU is a place to find real liberal ideas. Talk show host mention it as a source of information and more and more people join everyday. Slowly real liberal ideas are catching hold again among American people.
If we keep pushing liberal ideas, they eventually seep into the American psyche. When enough Americans are talking about taking over or occupying the board rooms of corporations then we take to the streets in nonviolent protest demanding that the corporations we funnel our tax dollars into be run by the workers who actually do the real work.
And/Or just don't play the corporate game. Become a "self employed" person, join a co-op or develop a worker run business.
Here are some links to get you started: http://rdwolff.com/ and http://www.democracyatwork.info/
Spread it around.
brush
(53,745 posts)Worker-owned cooperatives have worked on a regional level in Mondragon, Spain since the mid 50s.
Look it up if you've never heard of it.
cbdo2007
(9,213 posts)A "pure" form of capitalism would be just fine. We have nothing close to capitalism in the U.S.
Marr
(20,317 posts)Anyone promoting austerity measures at this point is undeniably and beyond all doubt nothing more than a salesman for the 1%.
pampango
(24,692 posts)zipplewrath
(16,646 posts)they've never appeared to pay much attention to Krugman.
another_liberal
(8,821 posts)The big bankers control White House economic policy, I doubt if others even get to talk to the President about that.
tblue
(16,350 posts)Him and Robert Reich. Should have done it from the getgo.
WillyT
(72,631 posts)malaise
(268,729 posts)CTyankee
(63,893 posts)I taunted Joe and the other "bobbleheads" on the show. It was so much fun!
It does mess up the austerity meme - indeed it destroys it
CTyankee
(63,893 posts)twitter.
tiredtoo
(2,949 posts)i can't seem to find it.
I do twitter and just tweeted link. will continue to do so.
tiredtoo
(2,949 posts)CTyankee
(63,893 posts)has been named "most beautiful woman in the world" or something like that...
They really ought to be ashamed of themselves.
another_liberal
(8,821 posts)The Republicans are not intending to revive our economy, and austerity won't accomplish that anyway. They are merely using austerity as a means to ensure their ultra-wealthy sponsors are never forced to pay more in taxes. The fact that a marginal increase in taxes on the wealthy could fund a government program to actually put millions of Americans back to work doesn't interest them at all.
on point
(2,506 posts)I'm afraid they won't change until everything completely collapses
Just like a junkie, they won't change (or allow change) until rock bottom is hit.
dotymed
(5,610 posts)the "pukes."
Mustellus
(328 posts)There is a technical name for including all the data in your spreadsheet..... Just like you were going to use it....
... and then only including the data you want to include by selecting only certain columns.
Its called fudging. Its called dishonesty. Its called lying. (Paul Krugman was just being polite...)
And they were stupid enough to release the entire spreadsheet.. with the instructions for selecting the data still there, but hidden to a cursory inspection. Probably smugly assuming no one would look at the cell summation instructions. That they would just be impressed that all the data was included.
CTyankee
(63,893 posts)TOLD them he was doing a paper trying to replicate their study. I guess they were sanguine because they had gotten away with this so far in a spectacular way and some little grad student from a state university wouldn't be believed anyway...
Oh the folly of overweening hubris...
HereSince1628
(36,063 posts)and then was given so much weight.
I can't say the authors knew they had fudged the results, but uncritical acceptance of a non-peer reviewed paper in places like the IMF and Euro central banks tells us much about the seriousness of the serious people.
The math was almost too trivial for term project in a graduate class. It was surely too trivial to be checked by the folks at the IMF.
It's great to see Krugman vindicated. If it was just about an academic failure we'd chalk it up to that old saying...ASSUME makes an ASS of U and ME and be embarrassed for those with the egg on their faces.
But this has harmed millions. People have died, the world economy has suffered because the range definition copied across a column of a spreadsheet was wrong.
Such cavalier attitudes of the serious people, should strip them of their status as serious people.
prairierose
(2,145 posts)an argument by cheating. Amazingly, they always think they are so clever that no one will notice that they cheated let alone look for how they cheated. Their arrogance is astounding and apparently, never ending.
timdog44
(1,388 posts)The really wealthy, who are in charge, live globally. They wring profits out of any where that the most profits can be made. And when that area collapses they go somewhere else on the globe. They have no nationality or loyalty to any country or patriotism. The globe is there home. They can be comfortable anywhere. Until one day the entire global economy is theirs and they have all the money. Monopoly. It is a game for them. Who can amass the most?
xtraxritical
(3,576 posts)is restricted geographically with endless arguments about immigration and h-1b visas etc. Just saying...
timdog44
(1,388 posts)is not OK for the goosee.
And my solution would be called "ISOLATIONISM". Tax them to the point that it is more worth it to manufacture the goods here in America. We rightfully have to worry about good wages, good health insurance, EPA protection for the public and regulations for safety. Witness the disaster in Bangladesh with the plant that collapsed. No safety. No workers comp. No health insurance. Managers on bullhorns saying if the people did not go to work they would lose their job. 12 hour days seven days a week for about $37/month. The dirty bastards.
xtraxritical
(3,576 posts)and the Presidency forgedaboudit.
dotymed
(5,610 posts)" You know I agree, but until Democrats control both Houses of Congress
and the Presidency forgedaboudit."
Very few elected democrats are not dlc'ers.......repubs
Jakes Progress
(11,122 posts)to change their tune. We should expect our elected Democratic administration to change theirs.
We know that republicans will lie and grin about it. What we don't know, is whether our guys will do differently. We have every right to expect them to.
CTyankee
(63,893 posts)the need for austerity. Now that some grad student has put the MSM to shame for their laziness, maybe some brave soul will speak up and say something like "you reference Rogoff and Reinhart but don't you know that their study was discredited?" and see what "spokesperson" (like Tom Coburn or that sh*thead from 3rd Way) has to say in response.
How about it, media?
DirtyDawg
(802 posts)...Doctor Krugman wishes he had, or had some of his students - assuming he still has students - check the data on these two 'economists' a couple of years ago? Just maybe we could have avoided a lot of this crap...then again, the Repugs would have just found another excuse. Just as they're doing now.
CTyankee
(63,893 posts)He has his own spreadsheets and models that refute theirs. Perhaps he thought that was enough. He might not have suspected the out and out ineptitude of doing something so basic in terms of the math. I guess he preferred rebutting them with his own work. So much for ignoring the obvious...
Uncle Joe
(58,300 posts)Thanks for the thread, kpete.
kpete
(71,965 posts)Uncle Joe
peace, kp
Uncle Joe
(58,300 posts)kpete
Peace to you as well, UJ.
joanbarnes
(1,721 posts)caraher
(6,278 posts)"... evidence has gradually piled up that, however well-intentioned they might be, the "Austerians" were wrong."
The main point is, the "Austerians" are not, and never have been, "well-intentioned."
CTyankee
(63,893 posts)EC
(12,287 posts)no one bothered to check their math before. I sure hope they will now. Anytime these two put out anything it better be run through the mill.
rhett o rick
(55,981 posts)think that "they" were fooled by the math. I assume that the 1% liked the math. I think the 1% is pushing austerity. I think it will lead to the end of all traces of democracy which will lead to the final stage of fleecing the middle class.
pansypoo53219
(20,959 posts)a higher interest rate cuts their PROFITS. savers have been screwed since the rise of greenspud.
FlyByNight
(1,756 posts)I betting no.
librechik
(30,674 posts)They are totally paranoid about the deficit now. The 1% will continue to trample them.
Kolesar
(31,182 posts)that one has it all :lol:
riverbendviewgal
(4,252 posts)I was on the way home from Toronto to my north ontario home..
I heard the author on two shows on sirius radio , on the Left channel.
The author was being interviewed on the Ed Show and Tom Hartmann
check out how we are being screwed.
America's new math: one Wall Street hour = 21 years of hard work for the rest of us.
http://www.huffingtonpost.com/les-leopold/americas-new-math-1-wall-_b_3134022.html
http://www.amazon.com/How-Make-Million-Dollars-Hour/dp/1118239245
ellie
(6,928 posts)was hilarious!
Kolesar
(31,182 posts)Another masterpiece by his writers !!
Marr
(20,317 posts)the fact that the two sides don't have the same goal.
Krugman says X will be better for the country as a whole. The establishment doesn't want to improve things for the country as a whole (though they can't actually say that). They want to slant things even further in favor of the 1%.
harun
(11,348 posts)Spitfire of ATJ
(32,723 posts)...but this flies in the face of a long time campaign by the Right Wing anti-Federalists in this country that have been preaching the mantra that people should HATE the government and trust "the market", they should consider the government to be to blame for their suffering because of it's interference in "the market". It's been hawked to the point where it's no longer though of as a religion but a FACT in DC. PROVEN by the Wise & Powerful Reagan (Bow yer heads, ya heathens)
Donald Ian Rankin
(13,598 posts)You can't just declare victory unilaterally - or rather, you can, and everyone does, but it doesn't mean anything.
DallasNE
(7,402 posts)What they did was the equivalent of a doctor sewing a pair of scissors inside a patient then sending them home. Reinhart and Rogoff need to be deposited in the same discredited bin with Arthur Laffer for their economic malpractice. Their careers, in other words, should be over.
n2doc
(47,953 posts)From his blog:
But will any of this make a difference? The story of the past three years, after all, is not that Alesina and Ardagna used a bad measure of fiscal policy, or that Reinhart and Rogoff mishandled their data. It is that important peoples will to believe trumped the already ample evidence that austerity would be a terrible mistake; A-A and R-R were just riders on the wave.
The cynic in me therefore says that after a brief period of regrouping, the VSPs will be right back at it theyll find new studies to put on pedestals, new economists to tell them what they want to hear, and those who got it right will continue to be considered unsound and unserious.
But maybe Im wrong; maybe truth will prevail. Heres hoping
http://krugman.blogs.nytimes.com/2013/04/24/evidence-and-economic-policy/
smirkymonkey
(63,221 posts)NAO
(3,425 posts)I don't think we need any more debate on the subject.
Kick and rec!
tiredtoo
(2,949 posts)we are all sitting here congratulating ourselves on being right. Hopefully we are also spreading the word. Preaching to the choir while self gratifying, gains no converts.
larryjben.wordpress.com
mckara
(1,708 posts)Who should be our Secretary of the Treasury, even though he's Australian!
PoliticAverse
(26,366 posts)AnotherMcIntosh
(11,064 posts)lumberjack_jeff
(33,224 posts)DCBob
(24,689 posts)They dont care about the short term effects on the sick and poor and less fortunate. It survival of the fittest to them.. once those "freeloaders" are gone then things will really begin to improve. The right wing has lost all compassion for other human beings who they see as not pulling their weight. Its a sad situation what has become of this world.
Laelth
(32,017 posts)Fascism, according to our own WCGreen, will be the end result. "It always is," he adds.
These words have haunted me since I first read them. I fear that WCGreen is right.
-Laelth
kelliekat44
(7,759 posts)now or never. And the citizens need to be educated to this and the only way for them to be educated in this is for Obama to use the Clinton tactic of explaining the information in huge forums and on as many TV and radio programs as possible. And the message must be coupled with a call for changes in voting patterns, giving the people the single issue of jobs as the focal point. A new Congress is needed and the reason is to through out the "austerity" buffs, the debt-deficit charletons and elect representatives who stand for the peoples' interest and not corporate interests.
lumberjack_jeff
(33,224 posts)This goddamn "grand compromise" "investor confidence" bullshit is coming from him.