Krugman: Story of this election is an economic policy that failed to deliver

[Kurt_and_Hunter]

Note that what the professor is doing here is not dampening enthusiasm but rather continuing to fight (futilely) to shape the post-election battlefield so that this election will not be taken as "proof" that Keynesian economics doesn't work.

This is vital work. This is a matter of national survival.

Falling Into the Chasm
By PAUL KRUGMAN
Published: October 24, 2010


If Democrats do as badly as expected in next week’s elections, pundits will rush to interpret the results as a referendum on ideology. President Obama moved too far to the left, most will say, even though his actual program — a health care plan very similar to past Republican proposals, a fiscal stimulus that consisted mainly of tax cuts, help for the unemployed and aid to hard-pressed states — was more conservative than his election platform.

A few commentators will point out, with much more justice, that Mr. Obama never made a full-throated case for progressive policies, that he consistently stepped on his own message, that he was so worried about making bankers nervous that he ended up ceding populist anger to the right.

But the truth is that if the economic situation were better — if unemployment had fallen substantially over the past year — we wouldn’t be having this discussion. We would, instead, be talking about modest Democratic losses, no more than is usual in midterm elections.

The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task.

. . .

http://www.nytimes.com/2010/10/25/opinion/25krugman.html?th&emc=th

[Greyhound]

1. K&Rugman

[Vincardog]

2. Why? Because it was greatly inadequate to the task. AKA No where Progressive/Liberal enough

[MannyGoldstein]

3. I respectfully disagree with Dr. Krugman (first time ever?)

But the truth is that if the economic situation were better — if unemployment had fallen substantially over the past year — we wouldn’t be having this discussion. We would, instead, be talking about modest Democratic losses, no more than is usual in midterm elections.

In the mid-term elections of 1934, Democrats picked up lots of seats - incredibly, only 17 Republicans remained in the Senate. This is what happens when Democrats act like Democrats.

[countrydad58]

25. Absolutely!

[Crankie Avalon]

4. It is ever thus with half measures. n/t

[qazplm]

5. but the situation wouldn't be appreciably better

even if he did exactly what Krugman said/advised, because it TAKES TIME.

There are no solutions, not even Krugman's that in 18 months would have made the economy better enough to make folks happy.

Unemployment at 8% instead of 10% is not going to make folks happy.

So while I can agree with his overall criticisms of Obama, his analysis that the election would be different if Obama had been more liberal I don't agree with because it underestimates the depths we were in when Obama came into office.

[Greyhound]

6. Because the world renown economist just doesn't understand how bad the collapse is?

You've crossed the bounds of credulity with this 'analysis'.

[qazplm]

9. uh no

because an economist is not a politician.

He has no more expertise in political outcomes than you or I.

And it's the very fact that he's said the collapse is bad that leads to the flaw in his POLITICAL analysis.

But yeah, if you believe that things would have been all nice and happy in 18 months, then I'm not the one with a credulity problem.

[Greyhound]

12. "because it underestimates the depths we were in when Obama came into office."

Your words, not mine.

[qazplm]

15. politically

underestimates, not economically underestimates.

You tell me, what does he think the results would be right now if we'd done things exactly as he says.

His answer isn't why we'd be at 5-6% unemployment and the stock market would be booming and everyone would see that things are looking good.
His answer is and has been, a little better.

A little better POLITICALLY is not going to change jack.

[Greyhound]

20. Using history as the predictor, the market would stabilize at something closer to true valuations,

unemployment would be dropping, and the Democrats would be arguing over how many seats they would be picking up.

But we'll never know for sure because the man that was sent to the White House with a mandate across party lines from all over the nation and nominal control of both Houses of Congress chose to preserve the people that wrecked it all and will still never support him over those that voted for him.

He made the decisions, we pay the price.

[qazplm]

21. unemployment would be dropping

how much? 1 percent? 1.5?

And no there would be no argument over how many seats to be picked up, that's plain wrong.

You are grasping for blame in a situation POLITICALLY where it's futile to assign it.

You want to attack Obama for following the wrong economic policy for long-term success, feel free. But arguing that somehow if only we'd been more liberal that magically things would have gotten appreciably better in less than 2 years time to the point that Dems would buck most prior history and not lose seats in this cycle is off, very off.

It ignores a whole host of things. It ignores attention-span, it ignores the depth of the problem, it ignores the media focus, it ignores the presence of a whole lot of conservadems, and it ignores the fact that there isn't a magical line for things like unemployment whereby 10% is bad but 8% makes everyone happy. Folks will not be happy for years, regardless of what gets done, or how it's done, because it will take years to return our economy to the salad days of the 90s.

[Greyhound]

24. Ah the old "ignore the argument and restate the fantasy pulled out of my ass" tactic.

As you've been shown, repeatedly on this thread, the strategy that that was followed was predicted to result in exactly what we're seeing today.

And history does indicate that we would have achieved far better results had the FDR/Raygun strategy of bypassing the beltway and going directly to the people to get the agenda through. Pissing away the momentum, hope, and exuberance of the people in favor of the parasites makes no one but the parasites happy.

Fighting for something and losing will be forgiven, refusing to fight makes people look at the other guy. And don't fool yourself, midterms are always a referendum on the sitting President and his policies. Like Clinton before him, he abandoned his base and lost any coattails he might have had to strengthen the party's position.

[qazplm]

31. ah the old

blustery emotional argument that if only we'd have done it my way everything would be great BS combined with the it worked 70+ years ago so it must be that things would turn out the exact same way politically today. Nothing's changed, populace is exactly the same, media is exactly the same, everything is the same.

Ridiculous emotional tripe.

[Greyhound]

37. Yes history is of no importance whatsoever for everything is entirely different today.

Well at least you're stubborn ignorance (do I detect a note of pride as well?) is helping to keep this kicked.
:rofl:

[qazplm]

40. as is your putrid reading comprehension

and plentiful use of strawmen and ad hominems.

Get back to me when you want to do more than defend your position vehemently and project your own emotions onto others.

[countrydad58]

28. Well the Stock Market is doing well

Everything else , not so much!

[Kurt_and_Hunter]

7. Perhaps, but political support typically tracks economic expectations more than circumstances

Reagan's "Morning in America" campaign was celebrating a directional move from 10% unemployment even though unemployment was still high in 1984.

FDR's killer 1934 mid-term was celebrating a directional move like 25% unemployment to 18%.

Most Americans today expect the economy to get worse or stay the same.

If that perception was that it was going to improve we would do a good bit better.

[qazplm]

10. that was a presidential year

which is all about expectations. Off-years are more about referendums, particularly at year 2 of a presidency.

Which is why Reagan lost seats in 1982, because the results at that point weren't good, a minor recession was brewing IIRC.

[Kurt_and_Hunter]

11. A presidential election with an incumbent president is a referendum. eom.

[qazplm]

13. I disagree, it is a mix

you are comparing the old guy with the new guy.

Lot of folks were pissed at Bush II in 2004, and if it were solely a referendum, he loses.
It wasn't because folks were not enamored enough with Kerry even as they weren't very happy with Bush.

[Kurt_and_Hunter]

18. As you wish.

Peace

:hi:

[MannyGoldstein]

8. Dems picked up lots of seats in the 1934 mid-terms

I believe that was because working Americans knew that FDR was in their corner.

[Greyhound]

14. Bingo!

This opportunity was thoroughly wasted. Unfortunately it is us that will pay the price for his timidity.

[qazplm]

17. you are free to believe that

or it could be that folks back then had longer patience and gave things more time.

It could be that the media was different back then.

It could have been the candidates he was going up against.

It's pretty simplistic to assign one reason to why a president loses or gains seats, but particularly so in saying folks knew he was in their corner.

The latest opinion polls have Obama hovering around 50%. So at least half the country thinks he is in their corner. The favorable ratings are in the 60s IIRC, so even more so think that. They don't see enough progress and so they want to vote the current incumbents out. Today's voters are fickle, lack patience, are quick to give up, and don't pay a whole lot of attention.

Totally different voting populace from the 1930s in many ways.

[MannyGoldstein]

19. FDR's first 100 days

http://en.wikipedia.org/wiki/New_Deal

People were helped. Immediately.

There was no way to see that and not know that FDR was on the side of the 'rest of us' rather than with the 'economic royalists'.

[qazplm]

22. people were helped

immediately during Obama's term too with tax cuts, aid to infrastructure, aid to states to keep them from laying people off, extensions of unemployment insurance, health care reform, and just like under FDR we saw an IMMEDIATE upturn in employment numbers and economic indicators that has more or less maintained to this day.

And yet, your argument is that people don't think Obama sides with us, but they thought FDR did, sorry but not seeing it. It's too simplistic of an analysis by far.

[MannyGoldstein]

34. Far fewer people are employed now than on 1/20/2009

But the bankers got record bonuses last year, a full 1% of GDP.

That's a huge problem.

[countrydad58]

33. Yes

Not a few dollar tax cut for middleclass workers, $250 one time payment for disabled & retirees, Then Freeze Colas for 2 yrs. & counting, & 47 million uninsured still that way for another 4 years.

[SemiCharmedQuark]

27. And in 1938 the voters decided to kill the New Deal and voted overwhelmingly for Republicans.

Perhaps they thought Roosevelt scaled back too soon. But if that were the case, why did Gallup have 2/3 of voters saying Roosevelt was too hard on business? Why did they decide to elect Republicans who ran on a campaign of killing the New Deal?

I suppose, by your reasoning, it was because working Americans knew Republicans were in their corner and FDR was not.

[qazplm]

32. that's the problem with simplistic reasoning

and that's what we have in this thread.

[SemiCharmedQuark]

35. I guess FDR hated working people.

:shrug:

Or perhaps there are more complicated dynamics at work.

[BlueCheese]

43. A 2% change in unemployment...

... is a big deal. I forget how big the labor force is, but we're talking several million people.

[xchrom]

16. Recommend

[DavidDvorkin]

23. No, it's the story of biased media and huge outside funding.

[AtomicKitten]

26. +1

[kenny blankenship]

29. Actually there's a veritable buffet of FAIL to sample and choose from

[bobbolink]

30. IT is clear that nobody with POWER is going to listen to Krugman, and nobody with POWER is

going to listen to those who understand Krugman.

Its hopeless. :(

[Proud Liberal Dem]

36. The real story of this election

if it should go in the Repubs' favor by a large enough margin, one of the consequences thereof will not only be *inadequate* economic policy but also HARMFUL economic policy. Krugman, as well as the rest of us will NEVER be certain whether or not President Obama and the Democrats would be in a better position now if they had done (or could have done) something or other differently. Our current economic situation didn't manifest itself overnight and won't be solved overnight. One solid year of changed economic policy (Obama's first budget didn't even take effect until this time last year) isn't enough of a benchmark to judge the overall landscape....yet IMHO.

[andym]

38. The critical part of the article is:

"And if they(GOP) take one or both houses of Congress, complete policy paralysis — which will mean, among other things, a cutoff of desperately needed aid to the unemployed and a freeze on further help for state and local governments — is a given. The only question is whether we’ll have political chaos as well, with Republicans’ shutting down the government at some point over the next two years. And the odds are that we will."

[ThomCat]

39. As So Many Of Us have said from Day One,

if only Obama had the courage to stand up for Main Street, instead of being so Timid, Main Street would stand right beside him.

But every chance he was given, he wanted to be bipartisan, and he wanted to bring the corporations "to the table" but not progressives, in the one big example not the healthcare advocates, not the people who who would be hurt most. Only the people who would profit were invited to the table. So instead of showing courage, Obama showed Politics as usual.

He abandoned Main Street. Now he wonders why Main Street might not be voting for him. Gee... :eyes:

Yes, he would do better than Republicans if given another chance, but how much better? That's always the question.

Everyone expected him to do much better this first time with his HUGE mandate, and he squandered it. Wasted it. Blew it away on absolutely nothing.

If he is given both houses again, what will he do with it? Will he decide to finally start standing up Strongly for Main Street NOW the way he should have 2 years ago? That would be wonderful, but then it begs the question, why couldn't he do that 2 years ago?

2 years of Geithner's and Summers's policies, Goldman Sach's policies filtered though Obama have helped the big businesses and investors in this country heal. But they have not helped the families and poor people in this country.

Obama's economic policies have done Jack Shit for poor people, except CREATE A HELL OF A LOT MORE OF US!

[McCamy Taylor]

41. Story of this election is.... suitcases full of cash. Period.

[Winston Wolf]

42. Thanks for the article...

...kicked and recommended.