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Paul Krugman is pointing out this morning what a few of us so-called "doom-and-gloomers" have warned against. This Friday's December employment report and the gross domestic product report five Fridays from now will likely be the most positive we've seen in two years:

There will be lots of bullish commentary — and the calls we’re already hearing for an end to stimulus, for reversing the steps the government and the Federal Reserve took to prop up the economy, will grow even louder.

But if those calls are heeded, we’ll be repeating the great mistake of 1937, when the Fed and the Roosevelt administration decided that the Great Depression was over, that it was time for the economy to throw away its crutches. Spending was cut back, monetary policy was tightened — and the economy promptly plunged back into the depths.

This shouldn’t be happening. Both Ben Bernanke, the Fed chairman, and Christina Romer, who heads President Obama’s Council of Economic Advisers, are scholars of the Great Depression. Ms. Romer has warned explicitly against re-enacting the events of 1937. But those who remember the past sometimes repeat it anyway.

Krugman goes on to say that these numbers could easily be just blips. The Japanese, for instance, showed phenomenal growth in 1996, but were far from out of the woods in their lost decade.

We Americans have just completed our own lost decade, as Neil Irwin wrote in the Washington Post Saturday:

There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.

Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 -- and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s.

And the net worth of American households -- the value of their houses, retirement funds and other assets minus debts -- has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data were initially collected in the 1950s.

The Uh-Oh Decade, as a few called it in the contests of 1999, turned out to be a prescient name, economically and otherwise. But the problems for the U.S. economy started well before then, even if the impacts weren't immediately apparent. While the auto industry and other manufacturing businesses moved their operations to cheap-labor  maquiladoras in Mexico or simply lost market share to countries that had export-oriented industrial policies, U.S. trade policy gave away economic advantages for a pig-in-a-poke in return. Thus did structural unemployment gradually began taking its toll, first among the lower middle class, then steadily working its way up the ladder.

The cracks and chasms were papered over by the bubble economy, massive unsustainable consumer debt and neoliberal, deregulatory happy-talk about the new world economic order that would, just you wait and see, make us all more prosperous,  

The Great Recession, which, in the manner that economists measure such matters, has been over now for five or six months, even though its devastating impacts have yet to recede, is anything but a blip. It's true, as some wag noted, things are still awful now, but 12 months ago they were terrifying. We seemed perched on the precipice. We averted having a disaster become a catastrophe, thanks to the remnant legacy of the New Deal - policies that Republicans fought (and still fight) tooth and nail, such as unemployment compensation - as well as the Obama administration's push for a federal stimulus. But we're still on dangerous ground. And if the deficit hawks have their way - including the fake ones in the Republican Party who don't care about such matters when they're in power - we could be back teetering on the ledge in short order.

The consensus view - the average cited by the experts - is that we'll see a break-even unemployment number for December. That is, no net jobs lost, and none gained. Some observers have made a case for a gain as large as 50,000. That's a far cry from the 741,000 loss reported 24 12 months ago.  

The 50,000 may well be a blip, however. The numbers that will really count are those reported in February and March. If the improvement trend holds through those months, then will be the time to break out a few smiles.

However, suppose for a moment that we were to return to the employment growth of the 1990s, when an average of 225,000 jobs a month were generated. If we could do that, it would take 36 months to regain the 8.1 million jobs lost since the Great Recession officially began in December 2007. That means getting back to where we were would take until February 2013, 13 months longer to recover on the employment front than in any recession since the 1930s. And not many observers think it's likely the economy will create jobs that fast, certainly not in 2010. Not, that is, unless more stimulus is applied. The $155 billion jobs bill passed by the House of Representatives three weeks ago certainly won't do the trick.  

If your unemployment benefits are about to run out for the third time, or you're living on nothing but food stamps, or you're working a part-time job because that's all you can get hired for, then the short term is what matters and what Congress and the administration do right now is what counts for you and at least 26 million other Americans in your shoes.

But the long-term reality is that little-to-nothing has been done over the past few decades to deal with the real killer in all this, structural unemployment, the kind that permanently eliminates jobs. Some structural unemployment caused by changing technology and innovation and a shift in consumer preferences is inevitable. Driven by the right policies, equally well-paying jobs come around to replace them. But some structural unemployment comes from eliminating jobs without replacing them with anything. At least not by anything in the U.S. Workers displaced in this way, especially older but-not-yet-financially-able-to-retire workers, can find themselves in tough straits for a long time. The country's full of those. They aren't, of course, the only victims as any twentysomething college graduate with $35,000 in student loans and no job can attest.

America needs a transformation to put the brakes on our race to the bottom. This ought to include a lot things, not the least of which are a permanent federal jobs program, decent pay for a shorter standard work week (which hasn't been changed for 75 years), and incentives, including legal ones, for cooperative enterprise ownership.      

An essential ingredient of this transformation is an industrial policy whose components include fairer trade policy and a labor-market strategy. Most countries - including almost all of America's leading trading partners - have such policies, each of them designed, even by the Red capitalists of authoritarian China, to make life for their citizens better.

So, in the coming weeks, while eagerly watching the news about unemployment, the GDP and all the other statistics that indicate the immediate direction of the economy, it's well to remember that America’s fate now rests in the hands of other countries’ industrial policies. Not having our own is, ultimately, an economic suicide pact courtesy of the promoters of the same policies and behavior that got us into this gigantic economic mess.

Originally posted to Daily Kos on Mon Jan 04, 2010 at 08:05 AM PST.

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Comment Preferences

  •  Blips better than dips. (19+ / 0-)

    In an economy based on perception, positive news, however groundless, can act as a stimulant.

    (Hard to type with crossed fingers.)

    Finally, some new songs up at da web site!

    by Crashing Vor on Mon Jan 04, 2010 at 08:09:39 AM PST

    •  They should be celebrated only as evidence that (4+ / 0-)

      the stimulus worked, and we should do more.

      The way I read it, MB is simply warning that Congress shouldn't take this as a sign we're all better now, that a "jobs bill" isn't necessary anymore, or that we don't need some big change in trade policy.

      This is a huge jobs hole we've got to fill -- 13 M from 1999 to present is what I'm reading here.

      •  Can Consumers Buy Things With 'Confidence' Now? (2+ / 0-)
        Recommended by:
        vets74, renzo capetti

        I'm pretty sure it still requires money.

        ~Ruff

        •  Bernanke is still igoring SAVINGS and INVESTMENT. (0+ / 0-)

          This little wimp is acting and speaking as though inflation is the one and only statistic of interest for the economy. He pushes the Taylor Curve as the be-all and end-all here.

          That is incompetent.

          In fact: the core statistic is Average Personal Savings.

          This economy requires a 4% saving rate to maintain investment and near-full employment.

          That is true year in and year out. No exceptions.

          Here is what the Greenspan-Bernanke years did to America. A $1.5-trillion shortfall in savings and investment:

          Savings 98-08

          White is the insufficiency.

          Dark is the meager actual savings.

          Bernanke is running The Fed quite stupidly. He serves the very few who hold bonds, but strangles saving and investment.

          Forcing zero-effective-interest rates is a disaster. Perhaps he skipped Econ 101 -- jumped right up to graduate school without the basics ???

          Angry White Males + Personality Disorder delusionals + Pro-Life Christians

          =EQ=

          The GOPer Base

          by vets74 on Mon Jan 04, 2010 at 01:08:52 PM PST

          [ Parent ]

          •  And Yet, Obama Re-Nominated Him (1+ / 0-)
            Recommended by:
            Words In Action

            And that tells you who Obama's economic policies are tilted toward.

            ~Ruff

            •  Amazingly, Krugman & Co. called for it. (0+ / 0-)

              Nobody got the core of what has happened.

              Angry White Males + Personality Disorder delusionals + Pro-Life Christians

              =EQ=

              The GOPer Base

              by vets74 on Mon Jan 04, 2010 at 03:20:33 PM PST

              [ Parent ]

              •  Structural unemployment won't end, its natural- (0+ / 0-)

                The only appropriate response to exponential improvements in workplace productivity (work produced per person) and the resultant need for fewer people to work for the same output, is a massive investment in education that allows us to pick up the high tech, higher paying jobs that are being created as the low skill jobs vanish forever.

                I suspect that at least two or three good jobs that last at least ten or fifteen years, often longer, are created somewhere for every 10 or 20 low skills jobs that vanish for good..

                Otherwise, those jobs will be created, but in Asia, Europe or increasingly, South America.

                We have to create a good climate for innovation here.

                We have our priorities completely backwards.

                We need to stop thinking about how we can spend less on education and start thinking about how we can spend and do more to nurture creativity and reduce the kinds of stress that destroy young minds and families.

                And obviously, its not just education, we need to create national technical literacy as a default state, and provide a good climate for knowledge workers. One that doesn't ridicule smart kids or studious behavior.

                Also, we need to stop seeing ourselves as an island onto itself. We are in direct competition with the rest of the world for the intelligent and creative. Keeping that worker here will require us to have health care that isn't a global poster child of injustice.  Health care that doesn't drive those with "options" away.

                " But some structural unemployment comes from eliminating jobs without replacing them with anything. At least not by anything in the U.S. Workers displaced in this way, especially older but-not-yet-financially-able-to-retire workers, can find themselves in tough straits for a long time."

                Taiwan moved to Single Payer and 95% coverage at high quality in One Year
                101,000 Americans don't NEED to die in 2011

                by Andiamo on Fri Jan 08, 2010 at 09:28:40 PM PST

                [ Parent ]

    •  A pretty solid trend on jobless claims... (7+ / 0-)

      is what has me fairly optimistic...that and the fact that personal income has stabilized a bit.

      What worries me the most is the large gap between worker productivity and compensation. Workers are still having to produce far too much for far too little.

      A.B.D., Public Policy and Administration; Ph.D. to follow: August 2010

      by APA Guy on Mon Jan 04, 2010 at 08:15:39 AM PST

      [ Parent ]

      •  The "fewer jobless claims" number are NOT (6+ / 0-)

        really good news.  This always happens when there are periods of job loss.

        First, a few jobs lost--then a really big amount of jobs lost, which are not recovered or replaced.  When most workplaces have gotten as "lean" as they possibly can--when it is impossible to keep the business open with any fewer workers--then the number of job losses go down.  Because almost all of the job shedding has been done.

        Have you ever brushed out the winter out of a hairy dog?  It works the same way.  At some point, there is almost nothing left to shed.

        To say that my fate is not tied to your fate is like saying, "Your end of the boat is sinking."--Hugh Downs

        by Dar Nirron on Mon Jan 04, 2010 at 08:22:13 AM PST

        [ Parent ]

        •  Oh, I don't disagree with you in part... (1+ / 0-)
          Recommended by:
          Crashing Vor

          Worker productivity is FAR too high at this time of recession for employers to be holding their cash like they are in lieu of investing in labor.

          But even in times of economic growth, jobless claims number in the hundreds of thousands. The fact that they have stabilized (and even been reduced) over the past couple of months is good news any way you shake it.

          A.B.D., Public Policy and Administration; Ph.D. to follow: August 2010

          by APA Guy on Mon Jan 04, 2010 at 08:25:29 AM PST

          [ Parent ]

          •  Business Doesn't Invest in Labor (5+ / 0-)

            A business hires when they need additional staff in order to meet actional or anticpated increased demand for goods and services. The whole idea that business owners will hire more workers if they have enough extra cash lying around due to government tax breaks is called Trickle Down economics and it never worked. The way to increase hiring is to put money into the hands of people who will spend it right away. That will increase demand which in turn will increase the need for more workers to supply the demand. The new workers will their new cash will in turn stimulate further demand, which will increase the need for even more workers.

            •  Sadly, you're right...and what a shame... (2+ / 0-)
              Recommended by:
              Dar Nirron, Kristina40

              Imagine how our economy would grow if businesses actually (gasp!) invested in their labor force instead of their mansions and golden parachutes!

              A.B.D., Public Policy and Administration; Ph.D. to follow: August 2010

              by APA Guy on Mon Jan 04, 2010 at 09:02:36 AM PST

              [ Parent ]

              •  Take A Look At Eisenhower Tax Code (4+ / 0-)

                The tax system essentially confiscated large amounts of wealth that was not employed in industries that created jobs for American workers.

                How about making that part of your dissertation?

                ~Ruff

                •  The bar chart, above, demonstrate this. (0+ / 0-)

                  Reaganomics and the Bush years were all about redistribution in favor of the wealthy.

                  This class of wealthy -- today's Richistan crew -- do not save.

                  They are about McMansions, cars, cruises, and fucking the slaves. Useless.....

                  BTW: consider the Donald Trump projects -- all of them -- if you want a simple measure of Richistan madness.

                  Its one crazy roll of the dice after another.

                  Angry White Males + Personality Disorder delusionals + Pro-Life Christians

                  =EQ=

                  The GOPer Base

                  by vets74 on Mon Jan 04, 2010 at 01:13:15 PM PST

                  [ Parent ]

                  •  Doesn't productivity improvement mean less work (0+ / 0-)

                    is required of each human worker?

                    So, eventually, factories and service businesses may look like Amazon's warehouses. People are in charge, but they don't do most of the work.

                    On the floor, people are actually in danger. They get in the way.

                    Taiwan moved to Single Payer and 95% coverage at high quality in One Year
                    101,000 Americans don't NEED to die in 2011

                    by Andiamo on Fri Jan 08, 2010 at 09:33:09 PM PST

                    [ Parent ]

                    •  Business is investing in silicon labor forces (0+ / 0-)

                      as well as human. Each have strengths and weaknesses.

                      Humans are meant to do creative knowledge work.

                      Any kind of work that follows a script is best done by machines.

                      Taiwan moved to Single Payer and 95% coverage at high quality in One Year
                      101,000 Americans don't NEED to die in 2011

                      by Andiamo on Fri Jan 08, 2010 at 09:38:56 PM PST

                      [ Parent ]

            •  Workers health (2+ / 0-)
              Recommended by:
              Dar Nirron, renzo capetti

              Wait until the bill for all this uncompensated work comes due.  We have spent the last few decades using up our work force.  The average worker has been treated just like third world labor with body crushing work loads and low pay.  Expect a health care crisis, centered around our work force, to come to a head any time now.  The bidness community doesn't want to have to pay for their abusive workplace policies.  THAT is why they are angling to make employer provided health insurance a thing of the past.

        •  Yup, yup, yup. (7+ / 0-)

          In a nutshell:

          Day 1:
          Company A announces that is closing down operations and liquidating assets.

          Day 2:
          Mission accomplished.

          End of Day 2 press release:

          Company A is pleased to announce that it will lose no money in the coming quarter.

          Free speech? Yeah, I've heard of that. Have you?

          by dinotrac on Mon Jan 04, 2010 at 08:31:27 AM PST

          [ Parent ]

          •  Day 3 morning news: (6+ / 0-)

            Company A's overnight stock soared and happy investors opportunistic, dividend-driven market manipulators roared on news that Company A will lose no money in the coming quarter. Nowhere to be seen was anything about those former workers on the losing end of the deal.
            _____

            Such is the America we've allowed to be foisted upon us exported and then re-imported for half price in the name of "Fair Trade".

            "Some Say" Fox is a news channel.

            by here4tehbeer on Mon Jan 04, 2010 at 09:04:12 AM PST

            [ Parent ]

            •  And The Democratic Party Has Run For A Decade (3+ / 0-)

              or more on doing away with tax breaks for exporting jobs.

              And the DINOs haven't done a thing about it other than fundraise on their repeatedly broken promise.

              If things are going to change, we have to change out the DINOs with representatives who owe their positions to 'We, The People".

              Otherwise, voting for more of the same DINOs will get us more of the same.

              ~Ruff

      •  Bingo! (6+ / 0-)

        Productity soars, but the benefits do not accrue to workers, which in turn may prevent demand from going enough to support significant recovery.

        Great comment.

        The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

        by fladem on Mon Jan 04, 2010 at 08:28:51 AM PST

        [ Parent ]

        •  Beware Paul Krugman's prognostications (3+ / 0-)
          Recommended by:
          savvyspy, PhilW, TheLizardKing

          I have every intention of writing a 2010 preview diary, and I want to ABSLOUTELY ASSURE the leading Doomers on this site -- and I have point-blank advised Mr. Blades that I consider him a "blocker" for those Doomers by writing pre-emtive articles poo-pooing anticipated good news -- that I will be dealing up front with Professor Krugman's record as a prognosticator.

          Here's a hint:
          HAHAHAHAHAHAHAHAHAHAHAH !!!!!!!!!!!!

          "When the going gets tough, the tough get 'too big to fail'."

          by New Deal democrat on Mon Jan 04, 2010 at 08:38:39 AM PST

          [ Parent ]

          •  not (6+ / 0-)

            not one job created in 10 years, 1 in 4 american kids on food stamps, 1 million kids dropping out of school each and every year,  what part of this aren't you getting?

            (regarding the bank mess) They want to cure the patient but not deal with the disease.

            by dark daze on Mon Jan 04, 2010 at 08:41:41 AM PST

            [ Parent ]

            •  Here's a little basic english for you: (3+ / 0-)
              Recommended by:
              savvyspy, koNko, PhilW

              "prognostications" = "future"

              "not one job created in 10 years etc" = "past"

              Paul Krugman, as I will demonstrate later this week, while a great economist, has an absolutely abysmal record as a prognosticator.  It does not speak well of either Mr. Blades or his golden boy Mr. Swern that they failed to research that.  But then, that would be in accord with their wreck of a record in 2009.

              "When the going gets tough, the tough get 'too big to fail'."

              by New Deal democrat on Mon Jan 04, 2010 at 08:48:17 AM PST

              [ Parent ]

              •  lol (3+ / 0-)
                Recommended by:
                pkbarbiedoll, dotdot, renzo capetti

                man you should do stand up, your such a joker.

                Yes, so much has changed for the better in the last few hours that how possibly could the last 10 years be any indication of what is to come.

                Nothing has changed, and what little has has been for the worse (regulation wise), and you think things will just magically get better.  Must be nice to live in fairytales.

                (regarding the bank mess) They want to cure the patient but not deal with the disease.

                by dark daze on Mon Jan 04, 2010 at 09:13:11 AM PST

                [ Parent ]

              •  oh by the way (5+ / 0-)

                1 in 4 kids on food stamps = NOW
                1 million kids dropping out of schools each year = NOW
                Bankrupt states= now
                10's of millions of unemployed americans= now
                and on and on..

                (regarding the bank mess) They want to cure the patient but not deal with the disease.

                by dark daze on Mon Jan 04, 2010 at 09:16:17 AM PST

                [ Parent ]

                •  How will more money solve the dropout rate? (0+ / 0-)

                  We spend the most per capita on education of all the OECD countries.

                  So instead of pointing out the obvious, care to offer any solutions?

                  •  How about... (0+ / 0-)

                    ...we make learning an engaging phenomenon instead of the spirit crushing busy work that passes for 'education' these days.  Maybe less students would drop out if they actually enjoyed the process!  What a novel approach!
                    Instead we just condition them to accept the mind numbing routine of being a wage slave.  The ones with the most on the ball are the ones who reject the system first!

                    •  Education isn't about being fun. (0+ / 0-)

                      You can't compete with the internet, hormones, drugs, video games, cable TV, and sex even if you tried. Trying to get kids to enjoy the process is futile. Either kids will enjoy or they won't, but they aren't quitting because it isn't fun. They quite for a myriad of social reasons that have nothing to do with how fun advanced math is.

                      Already going hell, just pumping that gas.

                      by Common Cents on Mon Jan 04, 2010 at 02:37:41 PM PST

                      [ Parent ]

                      •  has to do with jobs and opportunity (0+ / 0-)

                        always leads back to the same place.  You give people good jobs, thats gives them stability, self esteem, they settle in a place, they look to actually raise a family.

                        Broken families are directly related to no opportunities. The strong black laborer was tossed to the curb side 50 years ago, and you see the direct result. ( Gang and drugs is a direct effect too, Did you know that cartels directly selected the african male as a point of interest because even the cartels knew american society had basically done away with them)

                        With even less opportunites now for entire new demographics, look for the situation to worsen greatly.  Edcuation and everything else starts at home.

                        (regarding the bank mess) They want to cure the patient but not deal with the disease.

                        by dark daze on Tue Jan 05, 2010 at 12:41:53 PM PST

                        [ Parent ]

                        •  We have to make work so much fun and (0+ / 0-)

                          so interesting that people will not see it as work.

                          I doubt if most people will ever be able to have jobs where they don't want to go home. But that should be the goal.

                          We need to find big challenges, and try to solve them.

                          Every big challenge needs to be seen as a big opportunity.

                          Taiwan moved to Single Payer and 95% coverage at high quality in One Year
                          101,000 Americans don't NEED to die in 2011

                          by Andiamo on Fri Jan 08, 2010 at 09:41:38 PM PST

                          [ Parent ]

              •  It's not about Krugman, it's about reality! (3+ / 0-)

                Don't try and say everything is wonderful because Krugman got a few calls wrong.  If you're going to argue the economy is in some type of sustainable recovery, put your numbers on the table and show your sources.

                We are in a transitional economy. There are explanations presented that show why the current numbers are misrepresenting what is happing in the real economy. If President Obama doesn't wake up, and realize we can't go back to bubble/debt driven economics, we're all going to be in more trouble than we can begin to imagine.

                •  It's Pretty Much Already Too Late (3+ / 0-)

                  The First Great Depression had upward blips on a general trend of collapse.

                  It's nearly impossible to see much difference between Bush/Bernacke/Paulson and Obama/Bernacke/Geithner.

                  In the old Tarzan movies when the airplanes engine sputtered to a stop, getting the plane to level off as it hit the treetops did not mean a safe return to the landing field.

                  ~Ruff

              •  Someone woke up on wrong side of bed today... (3+ / 0-)
                ...but, now they're making it my "problem."

                First off...when you comment with lines such as:


                ...It does not speak well of either Mr. Blades or his golden boy Mr. Swern that they failed to research that.  But then, that would be in accord with their wreck of a record in 2009...

                ...it's all downhill from there.

                As for your widely-anticipated (by whom, exactly?) diary, later this week...I can only imagine the headline...

                "We may be in for a V-shaped recovery?"

                "We may win Powerball?"

                "We could be witnessing positive job growth for the rest of our lives?"

                ...only to add at the end of the diary, some reality-based commentary, akin to footnotes which tell us that--just in case you're wrong--you can refer back to something completely opposite of your irrational exuberance at a later date, to sooth your ego, so that you may then claim "you were right."

                Funny thing that...when you play both side of an issue...pandering to the audience, then putting in reality-based commentary at the very end of a post, you will cover all bases.

                Contrary to your claims, I really do NOT make prognostications. (Sure, I've made a couple of comments about the market tanking, earlier in 2009--like many other better-qualified folks did--and I was totally wrong; but, again, what's that actually have to do with the economy? NOTHING!) I agree with the sentiments of others, sometimes, but I don't sit there acting as if my liberal arts education entitles me to act like a trained economist, unlike some amateur armchair economists in the blogosphere that put forth that false meme.

                Food for thought...but, don't choke on it. It'll cause regurgitation, much like that to which I'm responding now.

                GET. A. GRIP!

                (That's some nasty crap you're peddling here.)

                "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

                by bobswern on Mon Jan 04, 2010 at 10:17:57 AM PST

                [ Parent ]

              •  Because Krugman the Pundit (0+ / 0-)

                Often strays into areas of economics where he has no professional expertise, e.g., mometary policy. But don't expect to make many friends here contradicting or criticizing this sacred cow.

                Ask me about my daughter's future - Ko

                by koNko on Mon Jan 04, 2010 at 06:59:41 PM PST

                [ Parent ]

            •  Psychology Is An Important Factor In Recovery (2+ / 0-)
              Recommended by:
              Ruff Limblog, tlemon
              Some crooks must be pinched
              Some profits must be confiscated
              Loopholes plugged
              And job creativity across the country is the immediate and continuous cure for 30 to 45 million struggling workforcers near crushed in poverty debt.
              Numbers and percentages, margins and averages are superficial fixations. I don't even want to argue about it. People will feel and know things are better when the full imaginative power of socio-economic designers is given the chance to work for us all. I do not believe we have begun to sketch the new blueprints.

              Lies at the top cause murder and misery at the bottom.

              by renzo capetti on Mon Jan 04, 2010 at 09:59:49 AM PST

              [ Parent ]

    •  However, be wary ... (7+ / 0-)

      Of head-in-the-sand regional Republicans who will twist any good news into a free-market, non-interventionist, limited-government monologue/diatribe.

      The Republican brand: "Consequences, schmonsequences, as long as I'm rich"

      by D in Northern Virginia on Mon Jan 04, 2010 at 08:17:05 AM PST

      [ Parent ]

    •  What point is this man trying to make other than (3+ / 0-)
      Recommended by:
      Roadbed Guy, koNko, naus

      doom and gloom? Seriously. For example,

      Krugman goes on to say that these numbers could easily be just blips. The Japanese, for instance, showed phenomenal growth in 1996, but were far from out of the woods in their lost decade.

      He has huge following here, why I don't know.

      •  Another guy with a huge following here is Pres. (5+ / 0-)

        MB wrote

        ...America needs a transformation to put the brakes on our race to the bottom. This ought to include a lot things, not the least of which are a permanent federal jobs program, decent pay for a shorter standard work week (which hasn't been changed for 75 years), and incentives, including legal ones, for cooperative enterprise ownership.  ...    

        Hell, that's what I voted and donated for, or so I thought. Still have hope, silly me.

        Industrial policy is way over due. Are there signs that the Administration will lead in this area? Krugman?

        www.yesweSTILLcan.org

        by divineorder on Mon Jan 04, 2010 at 08:20:24 AM PST

        [ Parent ]

      •  Well, I think MB is trying to temper optimism... (4+ / 0-)
        Recommended by:
        Dar Nirron, TomP, zapus, DRo

        with reality. There are many good-looking economic indicators out there (durable goods, for example), but there is also a lagging disparity between worker productivity and compensation.

        A.B.D., Public Policy and Administration; Ph.D. to follow: August 2010

        by APA Guy on Mon Jan 04, 2010 at 08:21:58 AM PST

        [ Parent ]

        •  Until We Generate Some 300,000 Good Jobs A Month (1+ / 0-)
          Recommended by:
          Words In Action

          There are no good economic indicators.

          If the US economy generates less than 158,000 jobs a month we lose ground.

          'Jobless Reovery' is a Damnable Lie.

          Depressions don't improve until there is a labor shortage.

          ~Ruff

          •  That wll never happen.. (0+ / 0-)

            Those jobs might actually be appearing when the economy recovers, or even when it isn't, but little itsy bitsy machines are getting them and its completely under the radar.

            Meanwhile, thanks to all those little itsy bitsy machines inside of everyday objects, which increasingly can communicate, even, humans who have not been spending all their free time learning aren't needed any more.

            Taiwan moved to Single Payer and 95% coverage at high quality in One Year
            101,000 Americans don't NEED to die in 2011

            by Andiamo on Fri Jan 08, 2010 at 09:44:56 PM PST

            [ Parent ]

        •  Funny (1+ / 0-)
          Recommended by:
          PhilW

          I read it as MB trying to temper reality with pessimism.

          I haven't read one doom and gloom economic diary here that used leading economic indicators to predict where the economy is headed. Every one of them either did an apples to oranges comparison using trailing indicators like unemployment or, worse, anicdotal, small sample size stories of why the economy isn't recovering.

          I think the jury is still out what shape the recovery will take but the train has left the station on this. The economy is growing and that growth, according to many indicators, is gathering steam.

          I just don't see what the front pagers are looking to gain by constantly bashing the recovery. I understand the anti-free market crowd that don't like the economic system the world operates under but that's more of an ideological argument. These economy diaries seem to want to make people believe something that is basically not true.

          I also understand fully that just because from an economic theory prospective, the US economy is improving, that doesn't mean there aren't a large number of people that aren't seeing tangible improvement. But if we are discussing the economy from a theoretical standpoint, I just don't see what the "gloomers" stand to gain.

          Objectively this diary doesn't seem to hit the mark.  

      •  oh yes (5+ / 0-)

        We are all idiots for listening to the words of a world-renowned, Clark Medal & Nobel Prize winning economist who has been correct far more often than most other economists and pundits this decade. Yes, it is such a question about why people listen to him... where is George Will's new column?

      •  Strangly, I happened to go to Japan (2+ / 0-)
        Recommended by:
        Ed in Montana, Chicago Lulu

        for the first time in my life at the end of their "lost decade" . . .

        You know, to the casual observer, things didn't really look all that bad (except, I suppose their opportunity to totally take over the entire economy of the world was lost, but to me that meme always seemed to involve just a tad of 80's style Lou Dobbism from the get go . . .).

        •  went to a mexican resort (2+ / 0-)
          Recommended by:
          renzo capetti, Miggles

          wnet to a mexico resort town not to long ago, looked pretty nice, so I guess mexico is in good shape too.  /snark off

          (regarding the bank mess) They want to cure the patient but not deal with the disease.

          by dark daze on Mon Jan 04, 2010 at 08:49:10 AM PST

          [ Parent ]

        •  I've been to Japan too and I disagree with you (1+ / 0-)
          Recommended by:
          renzo capetti

          And it looks like Eastern Europe.  All I saw were the miles and miles of gloomy concrete apartment blocks with rooms the size of my wife's minivan.  And guess what? they cost $200,000 for 1000 sq feet too.  Most Japanese eat on noodles and $10 bento boxes.  

          It made me a believer in Japan's lost decade. China is rapidly catching up to Japan.  

          •  I suppose that one sees what he or she (0+ / 0-)

            wishes to see.

            For example, I've been to NYC and seen mile upon mile of Eastern European concrete-style apartment buildings as well . . .  So while I agree that much of Japan is a bit drab and crowded, I'm not sure it stacks up that badly against your average US-style suburban sprawl.  Plus, much of it is not that way.  I am sure that the average DK reader can avail him or herself of tools such as Google Earth to see for themselves . ..

            In any event, in Japan (in contrast to both NYC and Eastern Europe - or for Hong Kong for that matter), I was told it was safe to "go anywheres" . . . .

            Plus, I was able to get totally cromulent meals in restaurants in Japan for 500 or 600 yen - essentially, no more expensive than anywheres else.

            Plus, they have really good cold sugar-free ice tea sold everywhere for 100 or 150 yen for 500 ml - just try getting that in the USA!

            •  You have to compare middle class with middle clas (0+ / 0-)

              The US has a lot of inequality for sure, so it's obviously easier to find faults in the US, but I would argue that the middle class in the US is still doing better than the Japanese middle class.  Only a small percent of the American population live in NYC, the larger group of Americans live in what you call suburban sprawl, which IMHO is far more luxurious than what the average Japanese enjoys.  You won't find many Japanese homes with insulation or central air.  Most middle class Japanese homes and apartments are what fresh out of college 20-somethings in America rent.  As a whole, Japan is not a more pleasant alternative to the US.  Japan is probably the only country in the world that works more hours than us Americans. The trains in Japan are packed like sardines with salarymen getting off from work at 8pm.    They get home at 9pm, crash, and then wake up for the next day's work.

              When I lived in Japan, I could not get "totally cromulent" meals as you state for 500 or 600 yen.  It was very easy for me to spend more than 1000 yen on a decent meal with a drink.  Taxis in Japan were 780 yen for 2 km.  The Shinkansen bullet train and plane tickets were both obscenely expensive.  A roundtrip train ride between Tokyo and Kyoto (just 200 miles away) runs over $450.  

              •  I knew somebody who left a $89,000 (1+ / 0-)
                Recommended by:
                vets74

                job in Buffalo for a $60,000 (or the yen equivalent) job in Tokyo.

                I thought he was batshit crazy considering that hit he took in the "standard of living" realm.

                But, he wouldn't move back to the Buffalo (note that this is not a Buffalo-bashing post, it generically applies to most any US city) suburbs for anything, apparently living in an interesting place trumps having a big ass SUV and over-sized McMansion.

                But, as your post exemplifies, most Americans do not feel that way.

                Which in many ways is what's wrong with this country . ..

      •  Why? (4+ / 0-)

        He has huge following here, why I don't know.

        Speaking strictly for myself, he hasn't missed yet insofar as what he's said about the economy as it relates to me.

        Then there's that Nobel prize thingy...

      •  Because he's an accomplished panderer (0+ / 0-)

        .. er ... pundit. Pundit.

        Since receiving his Nobel, Krugman has settled into a comfortable spot as the all-purpose know-all economist of choice for the Center-Left, carefully tracking public sentiment to stake positions for his Op-Ed column.

        I have occasionally criticized some of the positions he has taken (including some of his famously bad calls) and almost without exception the reply will mentioned his Nobel, as if that bestows upon him some magic economic omnipotence in subjects were he has no real expertise and now peer-reviewed papers. For example, his column last week on monetary policy was much quoted even by MB, yet Krugman has no real expertise in this area, while at least 2 other Nobel Laureates I quoted back actually recieved their recognition for work in this area.

        But more power to him, I'm sure the pay is a lot better than his Day Job.

        Ask me about my daughter's future - Ko

        by koNko on Mon Jan 04, 2010 at 07:16:32 PM PST

        [ Parent ]

    •  01/20/2009: anniversary of a lost decade (2+ / 0-)
      Recommended by:
      Crashing Vor, renzo capetti

      But nothing was done — and the illusory good numbers we’re about to see will probably head off any further possibility of action.

      I refuse to have a battle of wits with an unarmed person - Pogo

      Polk Gulch

      by annieli on Mon Jan 04, 2010 at 08:26:53 AM PST

      [ Parent ]

    •  exactly (1+ / 0-)
      Recommended by:
      Crashing Vor

      part of any economy truly is perception.

      This isn't a perfect machine and you can't perfectly predict it because confidence and optimism are parts of the machine.

      So while a positive blip may burst, it could also drive behavoirs that help sustain the blip and turn it into something more.

      Don't know if that will happen or not. Maybe it won't but I think it is still at least somewhat an open question.

    •  the corporados created MILLIONS of jobs during (1+ / 0-)
      Recommended by:
      Crashing Vor

      the last decade.

      Alas, they were all in China.

      Some of the blame must go to the American labor unions.  Back when they had actual power, they could have made it a point to protect all the other workers in their industry (heck, in their own COMPANY) -- they could have fought to guarantee that a Ford worker got the same pay for the same job, no matter what country the plant happened to be located in.  That is the ONLY way to prevent the companies from whipsawing everybody by moving their factories to the lowest-wage countries available.

      Instead, the American unions went with "Buy American!" and "America First!", and left all those other workers hanging.

      Now we are paying the price for it.

      Dem Party Motto: "Hey, at least we're better than nothing!"

      by Lenny Flank on Mon Jan 04, 2010 at 09:31:31 AM PST

      [ Parent ]

      •  In the 30, Ford used a lot of slave labor (0+ / 0-)

        They did just a good a job as unionized workers. For free. We have to avoid that fate here.

        Carrots do work better than sticks, in the long run. but when supply is so high, its hard to get companies to think that way naturally.

        Taiwan moved to Single Payer and 95% coverage at high quality in One Year
        101,000 Americans don't NEED to die in 2011

        by Andiamo on Sat Jan 09, 2010 at 06:23:25 AM PST

        [ Parent ]

    •  Clap harder for Tinkerbell! (0+ / 0-)

      So if we just believe it enough and click our heels together, those 20% of un- and underemployed will get job offers tomorrow?

      Because that's essentially what you're saying.

      This is what the Republicans were doing in '07-'08.  See: Phil Gramm and 'Nation of Whiners'.

  •  You mean (9+ / 0-)

    The 741,000 loss reported 12 months ago, not 24, right?  

    The argument Dems need to be making is that the stimulus led to this small improvement, and that therefore more stimulus, and specifically, more job related stimulus is necessary to help the situation continue to improve.

    I don't think it's a foregone conclusion that this is a blip.  But certain things need to happen and change in order for it not to be a blip.

  •  Waiting to see how job boards go this time (2+ / 0-)
    Recommended by:
    Crashing Vor, Dar Nirron

    this year. Last year there was a significant uptrend in listings, before everthing went in the crapper.

    Conservatives want live babies so they can raise them to be dead soldiers.- George C.

    by gereiztkind on Mon Jan 04, 2010 at 08:11:20 AM PST

  •  need to work on the middle (9+ / 0-)
    The economic policies of the Bush era were classic trickle-down, which was great for the rich and made the big-picture numbers look good, but the middle class got it worse and worse. And the middle class is the engine of the American economy. The rich basically benefit from the labor of the middle class, and the middle class tax base helps subsidize the needs of the poor.

    So what needs to be done to preserve the middle class? Preserve and restore the manufacturing jobs that used to power America. Make it easier to start and maintain small businesses. Make it easier to move from job to job.

    And those last two are largely about universal health care. People stay in jobs because of concerns (real or imagined) about losing/changing their health insurance. So employers can afford to pay them less and less. It's not at all unusual for someone who stays at a job for several years to wind up making less after accounting for inflation than when they started!

    But yes, the middle class needs opportunities for growth and change. And that's what's been lost.

    Once upon a time, this was a reality-based community. Sigh.

    by Orbital Mind Control Lasers on Mon Jan 04, 2010 at 08:13:59 AM PST

  •  Tax cuts (10+ / 0-)

    With 0 job growth in the era of the Bush Tax cut,hopefully this will kill dead the notion of any generic tax cuts to create jobs.

    Afghanistan:Graveyard to empires-It's not just a bumpersticker

    by JML9999 on Mon Jan 04, 2010 at 08:14:06 AM PST

  •  blip (8+ / 0-)

    Census employment will be a temporary blip.  What we need is protectionism--undoing the NAFTA type of giveaways.  In the '30s, protectionist tariffs were bad because we were an exporter--now we are a huge importer, and currencies are being kept out of synch--especially by China and Korea.  With modern transport, our domestic manufacturers need protection--at least temporarily.

    Not mentioned enough is the near bankruptcy of many of our largest states--esp. CA.  They will be forced to cut back on municipal employees and that blip will be bad and long lasting.  What Reaganism destroyed will not be rebuilt overnight.  They not only starved the beast, they raped and pillaged.

  •  The Stimulus (7+ / 0-)

    The Obama fiscal stimulus plan is expected to have its peak effect on G.D.P. and jobs around the middle of this year, then start fading out. That’s far too early: why withdraw support in the face of continuing mass unemployment? Congress should have enacted a second round of stimulus months ago, when it became clear that the slump was going to be deeper and longer than originally expected. But nothing was done — and the illusory good numbers we’re about to see will probably head off any further possibility of action.

    If Krugman is right that portends worsening economic news just before the midterms.

    Here we are now Entertain us I feel stupid and contagious

    by Scarce on Mon Jan 04, 2010 at 08:17:40 AM PST

  •  may see some depressed republicans (2+ / 0-)
    Recommended by:
    Bobs Telecaster, HawkRock33

    If we have a good jobs report on friday that's really going to upset all the republicans that want us to fail. First the terrorist attack failed and now this. How much good news can America get without starting to think Obama is doing something right!

    •  Like this? (2+ / 0-)
      Recommended by:
      PhilW, HawkRock33

      Stocks Surge to Open 2010 on Deals, Strong Data

      Manufacturing activity rose for the fifth consecutive month in December, according to the Institute for Supply Management, which reported that its index of national factory activity rose to 55.9 -- the highest level since April 2006. Economists had expected a reading of 54.

      RW reaction:  ZOMG!  You people were supposed to go Galt!  What's the matter?  Too in love with making money to make Obama fail?

      Want to get more work done? Punt Harry Reid in '10.

      by Steaming Pile on Mon Jan 04, 2010 at 08:44:08 AM PST

      [ Parent ]

  •  In other words (2+ / 0-)
    Recommended by:
    Brooke In Seattle, HawkRock33

    in more ways than we already suspected, there was absolutely no point in Bush being President.

    If apes evolved from humans, why are there still humans?

    by Bobs Telecaster on Mon Jan 04, 2010 at 08:19:29 AM PST

  •  We have certainly become a can't do nation (10+ / 0-)

    We seem to have an abundance of economists setting policy that refuse to acknowledge the reality of our collapsing job market. Instead of manufactured goods or technology worthy of selling here and abroad, job creation over the past decade has come mainly in the forms of selling products made elsewhere, selling real estate (housing bubble), construction, and selling services. The Fed is still tinkering with interest rates and modeling economic recovery based on outdated assumptions. I hope we wake up before the race to the bottom is over.

    The uninsured keep dying. Death to AHIP!

    by DWG on Mon Jan 04, 2010 at 08:20:01 AM PST

  •  The only thing they are accomplishing (6+ / 0-)

    right now is blowing up another bubble.  That is all they know.  Until such time as the fundamental problems with our economy are addressed (wages vs productivity and a huge private sector debt burden) anything we see is just an illusion.  The Treasury bubble will be spectacular when it bursts...and it will burst...and it won't be freaking pretty.

    ~War is Peace~Freedom is Slavery~Ignorance is Strength~ George Orwell "1984"

    by Kristina40 on Mon Jan 04, 2010 at 08:22:11 AM PST

  •  Excellent, MB. (15+ / 0-)

    These two things are key:

    America needs a transformation to put the brakes on our race to the bottom.

    An essential ingredient of this transformation is an industrial policy whose components include fairer trade policy and a labor-market strategy.

    Do our elites, inlcuding those in the White House, see this?

    "Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has." Margaret Mead

    by TomP on Mon Jan 04, 2010 at 08:23:26 AM PST

  •  How would this work exactly? (1+ / 0-)
    Recommended by:
    HawkRock33

    America needs a transformation to put the brakes on our race to the bottom. This ought to include a lot things, not the least of which are a permanent federal jobs program, decent pay for a shorter standard work week (which hasn't been changed for 75 years), and incentives, including legal ones, for cooperative enterprise ownership.  

       

    Making the government the employer of first-middle-and-last resort, paying people more to work less, and creating enterprises with deficient access to capital don't sound like promising economic policies unless the goal is a Potemkin economy whose sole purpose is to create nominal employment.  I hate to sound like a Republican, but it's really quite jarring to see these progressive remedies bundled together.

    Enrich your life with adverbs!

    by Rich in PA on Mon Jan 04, 2010 at 08:24:10 AM PST

    •  Republic Rump (of Labour) Party arguments (0+ / 0-)

      decent pay for a shorter standard work week (which hasn't been changed for 75 years)

      This has been a topic in the (Freedom) economy since Mitterand.

      Why economists dislike a lump of labor
      Tom Walker (lumpoflabor@gmail.com)

      Review of Social Economy, 2007, vol. 65, issue 3, pages 279-291

      Abstract: The lump-of-labor fallacy has been called one of the "best known fallacies in economics." It is widely cited in disparagement of policies for reducing the standard hours of work, yet the authenticity of the fallacy claim is questionable, and explanations of it are inconsistent and contradictory. This article discusses recent occurrences of the fallacy claim and investigates anomalies in the claim and its history. S.J. Chapman's coherent and formerly highly regarded theory of the hours of labor is reviewed, and it is shown how that theory could lend credence to the job-creating potentiality of shorter working time policies. It concludes that substituting a dubious fallacy claim for an authentic economic theory may have obstructed fruitful dialogue about working time and the appropriate policies for regulating it.

      I refuse to have a battle of wits with an unarmed person - Pogo

      Polk Gulch

      by annieli on Mon Jan 04, 2010 at 08:43:14 AM PST

      [ Parent ]

    •  Cooperative enterprises don't ... (4+ / 0-)

      ...have to have "deficient access to capital" if there are community investment banks to provide it. And a federal jobs program that provides both training and a backstop when the private sector is not performing adequately is not providing nominal employment. As for paying people more for working less, as lots of people who still have jobs are well aware, we've been paying people the same (or less) for working more for quite a while now.

      Don't tell me what you believe. Tell me what you do and I will tell you what you believe.

      by Meteor Blades on Mon Jan 04, 2010 at 09:06:20 AM PST

      [ Parent ]

  •  The word is globalization (5+ / 0-)

    and we need to understand it and define policies that reflect this reality.

    I don't understand why Democrats are afraid of this word.  

    Obama and Bernanke have kept us out of a complete disaster.  They deserve credit for that. Far more than they get here. Moreover, Obama's statement that we need to spend our way our way out of this mess compare favorably with statements from FDR in '37.

    So my guess is growth will continue and unemployment will decline some.

    But the blind spot in the Obama Administration will remain, and the focus on the left over the financial bailouts and their mismanagement will distract it from the real crisis: declining real wages for 80% of the population as a result of the twins forces of offshoring and automation.

    The bitter truth of deep inequality has been disguised by an era of cheap imported goods and the anyone-can-make-it celebrity myth - Polly Toynbee

    by fladem on Mon Jan 04, 2010 at 08:26:55 AM PST

  •  I have never seen Krugman happy or smiling he (1+ / 0-)
    Recommended by:
    HawkRock33

    always seems to be haunted by a childhood dream.....
    if I was just a bit funnier, or just a bit more good looking I would have gotten second base with Miriam in Jewish Summer Camp....

    I have seen him School George Will about the Great-Depression and FDR actions..

    but he seems to be suffering from a great depression of his own.

    •  He has the look of a guy.... (0+ / 0-)

      who gets it in the middle of a wilderness surrounded by people who don't.  Economic forcasting is like weather forcasting-a few basic underlying facts and a lot of variables.  He spent the last ten years being the crackpot who turned out to be the guy that got it most right.

      Deficits don't matter.  Dick Cheney
      Go shopping.  George Bush
      I got the best healthcare in the world.      I did but the 20 people they layed off to pay my salary won't.

  •  There are two sides to this (1+ / 0-)
    Recommended by:
    fladem

    If this is still a blog primarily about politics and supporting Democrats then doom and gloom on even optimistic news is unhelpful and indeed counter-productive.

    Obviously in terms of the real world people are hurting and a measured response is required. I think the administration has been playing this exactly right - highlighting good news while at the same time being clear that there is a long road still ahead.

    There is nothing worse than looking out of touch. I continue to believe the GOP will look totally out of touch come the fall with better economic and employment figures behind us. How will they respond when they opposed everything that Dems can say saved the economy?

  •  Time for Global Warming hats. (0+ / 0-)

    Just about anybody on DK will quickly jump in to chastise you (and, certainly, to chastise me -- over and over and over) if you mention the lack of additional warming over the last ten years.

    It's easy to say "Blip, man -- just look at the 200 years prior."

    It's tempting to say "Ah ha! We're dumping CO2 into the air faster than ever but the temperature's not going up so all this crap out man-made warming is hooey"

    But the truth is more like "Hmmm. Must've left something out of the model. Drag, too, because it's really hot already and I don't know if that thing we left out is permanent or limited in capacity to help or growing or shrinking or what.  Sure would like to know because, well, you're right about one thing: we're dumping more CO2 into the air than ever."

    Apply the same eye to economic figures that seem to be hopeful, but leave 15 million people out of work.  They might be the signs of a real turnaround.  They might be a blip. They might be signs of an economy that is retooling itself to work without those 15 million people.

    Free speech? Yeah, I've heard of that. Have you?

    by dinotrac on Mon Jan 04, 2010 at 08:29:02 AM PST

  •  Glad to see this as an FP story! n/t (8+ / 0-)

    "I always thought if you worked hard enough and tried hard enough, things would work out. I was wrong." --Katharine Graham

    by bobswern on Mon Jan 04, 2010 at 08:33:43 AM PST

  •  you don't need a Nobel prize to know... (2+ / 0-)
    Recommended by:
    dewley notid, Kristina40

    That there is simply too much debt in the system.   Yes, the "national debt" is under 100% of GDP and a good chunk of that is the SS trust fund.  But when you addin municipal, corporate and individual debt, you get closer to 500% of GDP.

    Anyone believe that's going to get paid off?   Anyone believe we can grow our way out of that, and create enough tax revenue at all levels to pay that down?   Tax revenues are cratering, and Obama's rosy GDP growth forecasts at the beginning of his term are so unachievable that all the initiatives he hoped to accomplish are (a) unlikely to pass or (b) unfundable.

    Krugman's myopic view is to ram more debt into the system, except this time "use it smarter".  Krugman didn't win his Nobel on this sort of thing, and his credibility is dubious.  More debt is not the answer.  Less is.  At all levels.

    You want to get money and credit flowing again?  Then we've got to write down the debt burden that almost all segments of society are laboring under.  That means tough medicine for all of us.  25 years of running up the credit card, and the bill is due.  

    Obama right now is "extending and pretending".  Japan has been doing that for 20 years; they just closed the books on a second lost decade.   It's worse for us, because we can't weaken our currency like they can; we're a nation of importers.   Shall we keep following them, or shall a leader emerge to manage this national restructuring of our debts?

    President Obama, I'm looking at you.  Stop being a friend to Wall Street and heeding the incestuous advice of Geithner, Rubin and Summers.  

    •  last I checked (2+ / 0-)
      Recommended by:
      cinsch, Brooke In Seattle

      There was an administration that got the budget in surplus, and even provided a long term plan for keeping the budget in surplus.

      I realize that things are going to change for that to happen again, I am just very wary of pundits and commentators telling all of us we need to "drink our medicine" (which, in Beltway-land, always means less Medicare and SS) while the rich got to own all of the previous surplus and then some.

      •  wary is good... (2+ / 0-)
        Recommended by:
        Jagger, jerseyite

        That surplus was the result of tax revenue going asymptotic as the Internet bubble was maximized.  It was a fleeting thing,  not sustainable any longer than the Internet bubble.  

        I mean to be clearer than I was:  when we write this debt down, creditors take the hit.   Banks take the hit.  Their bondholders take the hit (the people who lent to banks).

        Currently, the losses from bad loans are being eaten by the taxpayers.  I want President Obama and Congress to devise a plan to make the people who took the risk of lending to realize the losses.   Are you a bank creditor?  Statistically, I will safely guess you're not.  Bank creditors tend to be ultra-wealthy and foreign sovereign wealth.

        It's easy to ride roughshod over taxpayers in favor of the elite.  Bush did it and Obama has continued it.  it's far harder to stand up to the elite and say, "Sorry...you lent money and you're not getting a taxpayer guarantee on it.  Lending to a bank (or Fan/Fred) is not the same as lending to the Treasury".   When our leaders say that, the economy is on the way back.  Elites will hem and haw about collapsing the system; it's a fear tactic with no merit.

    •  Too much debt, no industrial policy (1+ / 0-)
      Recommended by:
      Jagger

      Sunshine on my shoulder...

      by pkbarbiedoll on Mon Jan 04, 2010 at 09:40:09 AM PST

      [ Parent ]

    •  debt keeps things moving (0+ / 0-)

      Most small businesses run only because they can take on debt. Otherwise, our economy will contract another 50% and unemployment would soar into 40%.  

      The whole principle of capitalism is to give an opportunity for others to utilize your money better than you can.

      How do you just write off debt?  You either impose severe contraction to the economy by spending every cent you earn into debt repayment, or you bank on inflation to devalue the value of your debt.

      •  the rest of the story... (1+ / 0-)
        Recommended by:
        Jagger

        You're right about capitalism, although I would phrase it as "money flows where the return is highest".

        You're also right that businesses small and large run on debt.  Not exclusively, mind you, but debt financing is important to many businesses.   That has nothing to do with my thesis.   I'll explain further:

        You write off debt because debt the creditor's asset.  So the creditor has an asset on his books worth, say, $10,000.   But you, the debtor, can't pay it back.   You lost your job, or your business failed, or something happened.  You contact the creditor and say, "Best I can do is $5,000; I sold my assets and that is all that is left".   The creditor now has $5,000; the rest of the debt is written off.  

        When a creditor makes a loan, they take risk - the risk that they won't get paid back.   This happens all the time.   There is a well-defined mechanism for business defaults: bondholders get control of the corporation and can liquidate or restructure.  

        But the government is refusing to force banks to recognize the extent of their bad losses.   The government has used the Federal Reserve and now Fannie and Freddie and the FHA to "extend and pretend" about the condition of bank debts.   Instead, bad bank lending decisions are being eaten by the taxpayers.  This means huge bonuses for Wall Street, and 17% underemployment for main street.  

        Meet the new boss, same as the old boss.  

        Banks made those loans because someone lent their money to banks.    Until the bondholders in banks are forced to write down their assets, we will be mired in economic morass.

        President Obama has a truly historic opportunity.  He can establish a financial system that works for more than the top .01%, and implement policies supported by that structure.   A lot of people are talking about industrial policy, but it's pointless under the current financial system.   This system is the reason we have a destructive, race-to-the-bottom industrial policy.

        So far, he has done everything he can to resurrect the pre-crash system, including saddle taxpayers with enormous losses to protect Wall Street.  

  •  I know I'm not the only one (9+ / 0-)

    who thinks that say 3 years down the line very little in the way of what this diary recommends will be in place. I think it's astounding that only a year after the collapse we are nowhere near addressing the serious shortfalls of the bubble binge economy of the past 25 years. It's all been a rearranging of the deck chairs in the Titanic as far as I can tell. It looks like banks are returning to business as usual, and Wall St. in general. The continuation of the race to the bottom via global labor arbitrage is still the way to go for these people in power. It's all either fake reforms or none at all.

    It should have been a moment for drastic changes and that moment has now come and gone. I see it as above all an enormous wasted opportunity, and with dire consequences for the future because this only delays an even bigger crash, but it's only a delay. It will come.

    "People place their hand on the Bible and swear to uphold the Constitution. They don't put their hand on the Constitution and swear to uphold the Bible." --J.R.

    by michael1104 on Mon Jan 04, 2010 at 08:40:47 AM PST

    •  Big blip on horizon for office workers (0+ / 0-)

      There's a new technology, still a few years away from maturity, that is going to radically change the office. That technology is called the intelligent agent, and its a form of software that allows business to business negotiations to be conducted by software. basically its a broad category that refers to various methods of inferring and recording the business rules used by real, human agents and over as short a time as possible, translating them to the sometimes not at all obvious directives that a machine would use to do the exact same thing. Bayesian analysis.

      Suppose your business has three or four people who spend most of their time on the phone, haggling with suppliers and customers, applying your business rules.

      This process learns from all of their decisions, and fairly soon learns enough so it replaces two of them, and then continues to use the others to train itself to be better and better. As they work, every action they take is automatically analyzed and gradually, integrated into the decision making process. The machine rules are also integrated into the workflow until the software handles 95% of the work, and you only have to route the very rare exceptions to the human workers.

      Taiwan moved to Single Payer and 95% coverage at high quality in One Year
      101,000 Americans don't NEED to die in 2011

      by Andiamo on Sat Jan 09, 2010 at 06:12:35 AM PST

      [ Parent ]

      •  At least until some clever computer (0+ / 0-)

        guy figures out how to game the software and get all their supplies for a penny and sell their goods for billions of dollars due to underflow/overflow issues.  Reminds me of when someone wrote a term paper so bad that they actually got the best grade on it because the automatic grading software deducted so many points for each mistake and eventually rolled the score back over to positive after passing a certain point (−32768, I think).

  •  I'm not (2+ / 0-)
    Recommended by:
    pkbarbiedoll, Kristina40

    Colorado just lowered their minimum wage according to cnn.

    "Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all" Andrew Carnegie

    by pantherq on Mon Jan 04, 2010 at 08:41:56 AM PST

  •  Questions (0+ / 0-)

    Driven by the right policies, equally well-paying jobs come around to replace them.

    Do you have any empirical or anecdotal evidence this is the case in the US?

    Also, I would be interested in your view of how capitalist competition operates.

  •  All your blips are belong to us. (1+ / 0-)
    Recommended by:
    annieli

    To love America is to hate the GOP.

    by HawkRock33 on Mon Jan 04, 2010 at 08:43:40 AM PST

  •  I am looking forward to my good news but (0+ / 0-)

    recognize that we can't be caught sleeping in the wheel.  As to additional stimulus, while I agree we need it, we have a poisonous politicking environment where the Right would like to see us go down the gutter and reject any additional stimulus. The Administration will have limitations in that regard and pointing the limitation out is important as the Administration might just not get what it wishes. With regards to Trade, we just have to do what is fair in this globalization world. We just can't allow to be taken advantage of by China and other like China. As to Krugman, I have never seen him happy about anything so I don't really care much for him.

    ...We have many more issues that bind us together than separate us!

    by ThisIsMyTime on Mon Jan 04, 2010 at 08:44:35 AM PST

  •  he is always wrong...who cares? (0+ / 0-)
  •  The doomers.... (1+ / 0-)
    Recommended by:
    TheLizardKing

    Have been consistently wrong since March.

    •  Yeah... seems to me that this really just (2+ / 0-)
      Recommended by:
      jiffypop, New Deal democrat

      confirms that the real data continues to prove that bonddad was correct.  Think he was saying to expect numbers like this for months and was criticized heavily for it.  Simply because there's a warning attached to the good numbers, doesn't change this fact.  I don't think anyone has been advocating the elimination or reduction of stimulus around here and  everyone is on board with a jobs bill.

      And now they're thinking about banning toy guns... AND THEY'RE GOING TO KEEP THE FUCKING REAL ONES! - Carlin

      by TheLizardKing on Mon Jan 04, 2010 at 08:58:37 AM PST

      [ Parent ]

      •  sure (0+ / 0-)

        sure you happy talker where calling for positive jobs numbers late summer , early fall,  gee how quickly you forget.

        (regarding the bank mess) They want to cure the patient but not deal with the disease.

        by dark daze on Mon Jan 04, 2010 at 09:04:43 AM PST

        [ Parent ]

        •  I guess that's possible, but I don't remember it (0+ / 0-)

          that way.  Thought they were pointing to Nov/Dec for job growth based on the trends they were seeing.  If I'm mistaken, I apologize.  I'm not a financial guy, so I'm not debating the issues here.

          And now they're thinking about banning toy guns... AND THEY'RE GOING TO KEEP THE FUCKING REAL ONES! - Carlin

          by TheLizardKing on Mon Jan 04, 2010 at 09:16:06 AM PST

          [ Parent ]

        •  You mean the "second half recovery" for 2008 (2+ / 0-)
          Recommended by:
          Brooke In Seattle, dark daze

          or the "second half recovery" for 2009?  Maybe 2010?  The fact is none of the underlying problems have been addressed.  Not one.  They slapped a band aid on it, gave away trillions to the banksters and called it a recovery.  Nobody seems interested in actually putting a stop to the derivatives betting parlor that is once again booming with no oversight.  Nobody has come up with a feasible recovery plan for states that are bankrupt.  Nobody bothers to discuss what happens when they blow up the commodities bubble...Just stick our heads in the sand and hope for the best...that'll do it.

          ~War is Peace~Freedom is Slavery~Ignorance is Strength~ George Orwell "1984"

          by Kristina40 on Mon Jan 04, 2010 at 09:30:25 AM PST

          [ Parent ]

    •  Doomers... (5+ / 0-)

      ...who urged a larger stimulus in January/February have been proved right, as even the President (via the jobs summit) and the House of Representatives (via the jobs bill) seem to have conceded.

      Don't tell me what you believe. Tell me what you do and I will tell you what you believe.

      by Meteor Blades on Mon Jan 04, 2010 at 09:12:41 AM PST

      [ Parent ]

      •  No..they haven't been (0+ / 0-)

        proven right.  You want to be proven right.

      •  Was anyone here actually against a larger (0+ / 0-)

        stimulus?  I just remember that everyone liked the idea of a larger stimulus, but there were the typical political compromises that prevented it from happening.  I know I personally liked the idea, but didn't see it happening and never really expected much.

        And now they're thinking about banning toy guns... AND THEY'RE GOING TO KEEP THE FUCKING REAL ONES! - Carlin

        by TheLizardKing on Mon Jan 04, 2010 at 11:15:22 AM PST

        [ Parent ]

  •  I'm not optimistic.... (3+ / 0-)

    Supply-siders and Wall Street still have too much influence. I think things still have to get much worse before real change is activated. I hope I'm wrong.

  •  anyone who reads Krugman's column in NYT (3+ / 0-)
    Recommended by:
    jiffypop, jobu, TheLizardKing

    should also read Ross Douthat - oh silly me, we don't read columns by people we don't agree with here do we!!!  well I do, becasue that way i am able to see both sides of the tory.

    http://www.nytimes.com/...

    Anyway, this column pretty much sums up the dilemma facing the USA - that because of globalisation and climate change the planet cannot sustain the kind of growth that would raise America's tide again, except literally ofc ourse.

    So those who are calling for America to turn to a governement interventionist socialist style economy are as bereft of real solutions as those like Krugman who bemoan the reluctance of the Obama administration to nationalise everything and re-distribute the wealth and pump even more taxpayer money into the economy and raise the deficit even more.  People here don't seem to think it matters, and maybe it doesn't, we could always default. Who knows, there is no model to learn from.

    Its a mystery, wrapped inside an enigma inside a conundrum What to do?  So let's all just complain and blame someone else.

    Let's have some answers guys, that would actually work and get passed into legislation.  The party's over.  Need to think of new solutions and new models for a new century and a new world.  You think people in India, Asia and China and Russia are going to hand over their newly gotton gains so Americans can work a shorter workweek?  Get real.

    •  huh (5+ / 0-)

      you agree with us doom and gloomers and you dont even seem to know it.

      Let's have some answers guys, that would actually work and get passed into legislation.  The party's over.  Need to think of new solutions and new models for a new century and a new world.  You think people in India, Asia and China and Russia are going to hand over their newly gotton gains so Americans can work a shorter workweek?  Get real.

       exactly, that is our point, this country is is no way shape, or form ready for this new century.  Its a race to the bottom, The american quality and standard of living is falling, just how far is the question.

      THAT HAS BEEN OUR POINT ALL ALONG.

      (regarding the bank mess) They want to cure the patient but not deal with the disease.

      by dark daze on Mon Jan 04, 2010 at 09:07:16 AM PST

      [ Parent ]

  •  Luckily (0+ / 0-)

    Luckily, we have one more year of spending under the first stimulus package.
    Lots of people -- including yours truly -- though the money should have been spent more quickly.
    Now, it will continue to be spent. Doing otherwise would require as much congressional unanimity as any other law does -- and that's very hard to come by these days.

    If "con" is the antonym of "pro," what is the antonym of "progress"?

    by Frank Palmer on Mon Jan 04, 2010 at 08:58:36 AM PST

  •  no, by all means (0+ / 0-)
    Only BAD news is not a 'blip,' but true inarguable portents of certain economic and social collapse.  Sunny day?  Bullshit.  By nighttime it will be dark; count on it.  And what -- have we banished rain?  Unlikely; not with Geithner in the government.  He loves rain.  Just like his damned Wall Street buddies.  

    Andrew Mellon & GOP: 'In a Depression, assets return to their rightful owners'

    by Tuffie on Mon Jan 04, 2010 at 09:01:30 AM PST

  •  How screwed are we? (5+ / 0-)

    The global mobility of capital allows the surplus value (profit) generated by workers in one country to be removed to other far flung localities where government enforced limits on workers demands produce even higher rates of return on the transnational, oh so cosmopolitan plutocrats' investments.

    America has been looted and we are left complaining about the distribution of the few crumbs left.

    The frog jumped/ Into the old pond--/ Plop! (Basho)

    by Wolf10 on Mon Jan 04, 2010 at 09:06:08 AM PST

    •  We have to start thinking in terms of all Earth (0+ / 0-)

      Multinationals have been doing that for centuries. The nation-state concept is kept because its a convenient structure for them to divide up the spoils.

      During World War II, big companies like Ford, GM, and IBM worked for both sides, and kept close relationships with all the leaders. Their needs were respected, and none of them were punished. They were too big to fail.

      Taiwan moved to Single Payer and 95% coverage at high quality in One Year
      101,000 Americans don't NEED to die in 2011

      by Andiamo on Sat Jan 09, 2010 at 06:16:38 AM PST

      [ Parent ]

  •  36 Months or Double That (5+ / 0-)

    The population of th US continues to grow and we need an additional 130-150 thousand jobs every month for those new workers just to keep employment numbers constant. There is no real decrase in unemployment until job creastion reaches beyond tose numbers It looks like that figure of 36 months assumes that the population of the US will remain constant. Replacing only the jobs lost in the last decade would still leave us with increasingly higher levels of unemployement.

    Unless drastic changes are made - mandated shorter worke weeks, huge government jobs programs, protectionist economic policty - 10% unemployement will become the new benchmark for what is acceptable in our economy.

    •  If you leave out immigration (0+ / 0-)

      the population of the US, and most of the rest of the developed world, is shrinking.

      Wages would rise if it weren't for immigration.

      Taiwan moved to Single Payer and 95% coverage at high quality in One Year
      101,000 Americans don't NEED to die in 2011

      by Andiamo on Sat Jan 09, 2010 at 06:17:55 AM PST

      [ Parent ]

  •  Agreed ... but (0+ / 0-)

    Agree with most of your comments except....

    And if the deficit hawks have their way - including the fake ones in the Republican Party who don't care about such matters when they're in power - we could be back teetering on the ledge in short order.

    I agree that Republicans don't know how to do anything with a deficit except make it bigger, but ... there is a limit (ultimately) to what the government can do/spend without causing serious long term damage to the economy.

    What most people seem to be missing is that the US standard of living will have to fall much further to "balance" with its world neighbors, and to make up for 30 years of living beyond its means.

    The current stimulus programs are only softening the blow while avoiding real reform. The decline in living standards will come, the question is upon whose terms. The way things are going now, it may well be on China's or the international financial community's terms (a la Argentina).

    There are a number of things that should be getting done that would hurt a lot right now ... but would set the table for a stronger future. Just a few for consideration:

    1. Massive cuts in military expenditures (wasteful spending, that is no longer affordable if it has to be paid for with money borrowed form the Chinese)
    1. Large cuts in Ag subsidies.
    1. Huge push to reduce energy imports (to break the trade deficit problem), including higher taxes.

    Instead of just upping spending, there also needs to be cuts to spending  (real ones) and a reorientation of spending towards what really has to be done (which could involve cuts/job shares in public sector wages/benefits for the duration of the crisis) and away from the less than essential.

    Keynesian pumping only works if you saved during good times to have enough to spend during bad. The former did not happen, so now there is much less than can be spent without causing a longer term crisis ... yet the society has not yet come to terms with that.

    I suspect that it will take an outside event to ring the bell, with a failed Treasury auction possibly being the event.

    I can live with doubt and uncertainty and not knowing. I think it is much more interesting to live not knowing than to have answers that might be wrong- Feynman

    by taonow on Mon Jan 04, 2010 at 09:14:22 AM PST

  •  We need to go back farther than Dec. 2007 (3+ / 0-)
    Recommended by:
    Jagger, dotdot, Words In Action

    employment levels.

    Lots of us lost jobs in 2006 and 2007, and even if we drew unemployment benefits for a while, they expired long before any of these extensions were tacked on.

    There seems to be a willful ignorance of the downward slide that has been happening even farther back, with, as you note, that structural unemployment affecting many sectors besides manufacturing and construction.

    Look at the publishing industry. Many here cheer the demise of the old journalistic paradigm. But they didn't seem to think about all the employees who were formerly middle-class workers who spent a lifetime in their fields and now have nowhere to turn. Blogging doesn't pay like a real journalism job does unless you luck into being one of the biggest with a good ad deal.

    That means people in advertising, graphic art, printing, shipping, and sales are also affected along with the editors, reporters, and publishers.

    We all know about IT and engineers, and how those workers have been shafted. Now it's happening to lots of people, even lawyers, as companies off-shore and outsource anything they can -- except the high-level executive officers, imagine that.

    As I said in bobswern's Rec Listed diary, we need a direct-hire government jobs program -- one that doesn't follow all the hiring practices of big business over the last 15 years that are designed to screen people out, not employ them. That means not rejecting people based on age, disabilities that don't affect the work, previous employment gaps, credit scores unless you handle money, drug testing unless you're a driver, or changing career fields at mid-life.

    If you can DO the job, you deserve to be hired for the job and paid a living wage.

    Of course, we also need to discuss what constitutes a living wage in this country.

    "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

    by Brooke In Seattle on Mon Jan 04, 2010 at 09:18:28 AM PST

  •  MB - you are a cherished resource on KOS (1+ / 0-)
    Recommended by:
    dotdot

    Thank you.

    Sunshine on my shoulder...

    by pkbarbiedoll on Mon Jan 04, 2010 at 09:29:56 AM PST

  •  The fundamental economic problem that... (2+ / 0-)
    Recommended by:
    Brooke In Seattle, vets74

    ...no one is discussing (not even here - too many trust fund liberals?) is the inequality of the distribution of wealth and its impact on our consumption driven economy. There will be NO recovery so long as the wealth of our nation is concentrated in the hands of the super rich who won‘t (or can‘t) spend enough to keep the economy going. It is not even their fault. A decreasing marginal propensity to consume as people grow richer is a basic tenet of economic theory. Only ten percent of our population now possess over 80% of our wealth which basically means that 90% of us do not have a pot to piss in. This results in a lack of consumer spending that guarantees that GM and Chrysler will eventually slide into full Chapter 7 liquidation, and the housing market will never recover. Unemployment will rise well into the teens and stay there. Following California’s lead, state after state government will go bankrupt as well. The answer is to recycle some of the stagnant pool of wealth (it currently is not going into productive investment) back into the economy through a highly progressive tax spent on free universal health care and education. The Obama administration will not confront the super rich to make it happen, and if the Republicans are returned to power the problem will only get worse. The result is a return to a near permanent 1930’s type of depression and one in which government at all levels will not have the resources to help its citizens.

    _____________________________________________________________________________________________________

    If you read anything today read Juan Cole‘s  recent  analysis of the super rich.

      INEQUALITY OF WEALTH
    Photobucket
    To see the data go to UCSC.

    Where we are headed if we don‘t change course and begin to fairly tax the super rich.

    Photobucket

    Photographer: Tuca Vieira, Paraisópolis Favela in Sāo Paulo, Brazil 2005

                                           

  •  I think you've touched on several good points. (0+ / 0-)

    Krugman makes a good case for something that many of us are familiar with which is what happened in 1937 when the consequences of thinking the end of the Great Depression had occurred.

    Bernanke certainly understands that history. His actions and public statements show that he gets it. I would expect that his future actions will be in line with what he knows needs to be done to turn this Great Recession from becoming The Great Collapse.

    What I don't hear from someone except that you touch on with "a transformation". The Great Depression ended with sound fiscal policies and continued with WWII. Our next period of great expansion began with the post-WWII period and continued 'til the 70s. Our current path started in 1980.

    What I don't see is how we are going to start our next great expansion. Are there people actually plotting an economic policy beyond a monetary policy that is visible to us? I'd be surprised if there wasn't but I just wish it was more out there in the public consciousness and conversation.

    We hear and I get that the next expansion will come in the form of green/environment but it needs a boost from government in the form of tax policies which encourage it in manufacturers and consumers.

    I feel much better about the chances of this coming about with Obama as President than I would if McCain had won.

    Unapologetically pro-citizen. Not anti-corporation just very pro-citizen.

    by CanYouBeAngryAndStillDream on Mon Jan 04, 2010 at 09:47:36 AM PST

  •  At least let us enjoy the pseudo-recovery a bit (1+ / 0-)
    Recommended by:
    Norm DePlume

    before we start worrying about Great Depression II, II.

    The mind can only handle so much gloom and doom.

  •  This is what worries me the most (0+ / 0-)

    But the long-term reality is that little-to-nothing has been done over the past few decades to deal with the real killer in all this, structural unemployment, the kind that permanently eliminates jobs.

    I don't know if I will ever see the kind of prosperity that my parents did, in my lifetime...

    "Mediocrity cannot know excellence." -- Sherlock Holmes

    by La Gitane on Mon Jan 04, 2010 at 10:16:23 AM PST

  •  The key part of this excellent piece: (1+ / 0-)
    Recommended by:
    Jagger

    An essential ingredient of this transformation is an industrial policy whose components include fairer trade policy and a labor-market strategy.

    Absofrickinlutely. Without a well thought out future, future oriented industrial policy, we are screwed. Every generation of American leadership has had one, except this one. The "we hate government" crowd has convinced our leadership elites that we can't do anything. We are adrift, and we must like it that way.

    Bullshit.

  •  another take on that (1+ / 0-)
    Recommended by:
    vets74

    is that the stimulus works. But it can't be maintained forever and when it is removed you have a delayed fiscal/economic reckoning. I say that because the FDR policy Krugman cites is only half the story. At that time the GDP had grown by double digits and unemployment had decreased for three consecutive years. Seems to me that if THAT sort of economic growth isn't enough to pull back on temporary government stimulus then none is.

    I already see the scenario in state government where funds that have been propped up by stimulus money for a 2 year period (at least on paper) give way to dire and dramatic decreases after next fiscal year. Rather than a gradual realignment of funding and revenue, my state is looking at massive cuts or dramatic tax increases. Or most likely, both. The private markets are in a similar pickle. Of course i could be wrong, but I also think Krugman is only half correct.

    •  The STIMULUS replaces the missing SAVINGS. (0+ / 0-)

      We have no means, whatsoever, to replace the $1.5-trillion of insufficient savings from 99-08.

      Savings tanked.

      Investment in America tanked.

      Job creation tanked.

      As soon as there was a shock, jobs fell away as leaves from an October maple.

      BTW: economics is not for grade school kids. It is applied mathematics, plus political science.

      The math guys in econ... tend not to understand comparative sociology and the applications in economics.

      Doesn't stop them from bamboozling the like of GW Bush.

      Angry White Males + Personality Disorder delusionals + Pro-Life Christians

      =EQ=

      The GOPer Base

      by vets74 on Mon Jan 04, 2010 at 01:31:29 PM PST

      [ Parent ]

      •  not sure what your resposne has (1+ / 0-)
        Recommended by:
        vets74

        to do with my critique. I meant to say that Krugman failed to mention the context of the 1937 stimulus retraction. But since you mention it, I do not see how the fed stimulus, which overwhelmingly went to state gov projects had any immediate impact on private savings?

        •  Krugman, Bernanke, Geithner -- (0+ / 0-)

          all of them ignore the failure of personal savings 99-08.

          The economy requires a 4% personal savings rate to support investment, sufficient for full employment.

          Like Reagan, Bush and the GOPers engineered a redistribution of wealth to the very rich.

          And they didn't save. Period. Either time.

          The whole statistical evidence says that "trickle down" results in "fritter away."

          These rich, now, spend their money on McMansions, cars, vacations, and fucking the slaves.

          Angry White Males + Personality Disorder delusionals + Pro-Life Christians

          =EQ=

          The GOPer Base

          by vets74 on Tue Jan 05, 2010 at 05:27:38 AM PST

          [ Parent ]

          •  We have to give companies reasons to invest (0+ / 0-)

            in people. One way would be to make America a cauldron of innovation. We could learn a lot from children and how they learn.

            They have not been beaten into submission yet.

            Taiwan moved to Single Payer and 95% coverage at high quality in One Year
            101,000 Americans don't NEED to die in 2011

            by Andiamo on Sat Jan 09, 2010 at 06:20:23 AM PST

            [ Parent ]

  •  Surpluses remove savings (0+ / 0-)

    the lost decades in the US and Japan can both be directly traced to federal budget surpluses.  Japan allowed their budget to go deep into surplus during the 1897-1992 expansion and failed to aggressively go the other way with deficit spending to fill the savings of financial assets lost during the surplus years.

    Likewise the US allowed it's budget to go into surplus in 1997.  In 2001 Bloomberg news announced the end of the surplus that it stated was the longest on record since 1927-1930.  Do those dates ring a bell?

    It's an accounting identity that a govt deficit = non govt surplus of financial assets.  to the penny.

    www.moslereconomics.com

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