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Paul Krugmen seems shocked, truly shocked, and indignant to discover Mitt Romney, and the Republicans, are grossly misinterpretating economics facts and findings about our economic recovery in The Secret of Our Non-Success.

The main point, however, is that the Romney team is willfully, nakedly, distorting the record, leading Ms. Reinhart and Mr. Rogoff — who aren’t affiliated with either campaign — to protest against “gross misinterpretations of the facts.” And this should worry you.

According to Paul Krugman, professional economists have established that the 2008 financial crisis was uniquely severe and involved debt overhangs which will not lead to a typical business cycle recovery - it is going to "take years to restore full employment."  

In other words, this is not President Obama's fault as is alleged by Romney and Ryan, who are trying to reduce this to a false equivalence of a "he said - she said" stand-off.  Instead, Paul Krugman argues this is Romney and the Republicans taking a stand against science and fact, and this should worry us a great deal.  

Harvard’s Carmen Reinhart and Kenneth Rogoff studied past similar financial crises, induced by the bursting of speculative bubbles, and found they are followed by prolonged years of "high unemployment and weak growth." Later research by the IMF, and others have confirmed this, according to Krugman, who also reminds us he too warned this downturn was different and needed greater stimulus for recovery.  

History shows us that these kinds of financial crises are caused when speculative credit bubbles burst, leaving so many families and companies with such high levels of debt they are forced to reduce spending - and for a long time until this debt overhang is worked off. Our usual antidotes for recessions of cutting interest rates to encourage borrowing to boost consumer demand does not work, because too much debt already exists.

What we need, in these situations, is a Keynesian kind of government stimulus. It is exactly the wrong time for the "austerity plans" to be cutting government jobs and spending.  

In particular, what the economy really needs after a financial crisis is a temporary increase in government spending, to sustain employment while the private sector repairs its balance sheet. And the Obama administration did some of that, blunting the severity of the financial crisis. Unfortunately, the stimulus was both too small and too short-lived, partly because of administration errors but mainly because of scorched-earth Republican obstruction.
Paul Krugman warns us that if we let politicians get away with blatantly repudiating scientifically established facts, we will be on a slippery slope, where we can not imagine where it will end.
Look, economics isn’t as much of a science as we’d like. But when there’s overwhelming evidence for an economic proposition — as there is for the proposition that financial-crisis recessions are different — we have the right to expect politicians and their advisers to respect that evidence. Otherwise, they’ll end up making policy based on fantasies rather than grappling with reality.
Satirically, he suggests that "the next thing you know Republicans will start rejecting the overwhelming evidence for man-made climate change.  Oh, wait."

Can you imagine the kind of world we will leave our children, and future generations, if we start acting like ant-science Luddites, even to the point of our having our  politicians and media taking science and critical thinking skills out of political discussion? What will be next - education, health care, and reproductive freedoms?

How will our nation, and workers be able to compete with emerging nations pulling all the stops to educate their children with math, science, and the best thinking skills possible? We could risk losing our leadership, not just in science, and research, but manufacturing and everything else.    

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Comment Preferences

  •  A speculative bubble that people like Romney (14+ / 0-)

    helped create and benefited from, you can understand why they would be in the denier category.  

  •  The Rs represent the ignorant; they vote, but dont (1+ / 0-)
    Recommended by:

    The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

    by a2nite on Mon Oct 22, 2012 at 01:32:17 PM PDT

  •  Except (1+ / 0-)
    Recommended by:

    Much of this is a matter of philosophic difference.  Krugman's "mistake" is that he's overlooking the extent to which conservatives view this (as everything else) as a moral issue.

    It is an article of faith among social conservatives that Westerners as a whole are "too affluent" and that we're basically spoiled and lazy.  This isn't just Americans.  The purpose of austerity isn't to promote economic growth through supply side economics run wild.  It's to punish the electorate.

    An important objective of social conservatism is to promote winners and losers, because this is how God sorts out the good from the evil.  (A corollary is winner-takes-all economics; ultimately there can only be one true Lord; he's the guy who has the most stuff in the end.)  It has nothing to do with capitalism, socialism, monetary policy, deficits, or anything else.  It is about culling out immorality.

    As with any such paradigm shift, people like Romney come out of the woodwork like vultures (that is his business model, I don't think he gives a shit about any political philosophy) to clean up on the carcasses of failed philosophies such as this.

  •  Woof, woof. (1+ / 0-)
    Recommended by:

    Keep on following the trail and posting the evidence. Better than average diary today HoundDog.

    What are their names and on what street do they live-David Crosby-"If I Could Only Remember My Name"

    by IB JOHN on Mon Oct 22, 2012 at 01:46:47 PM PDT

    •  Thanks IB JOHN. I didn't really write this (2+ / 0-)
      Recommended by:
      cwsmoke, johanus

      weekend because I was depressed.  

      I've been doing doing an experiment to see how much I could learn about writing and blogging in these months before the election while helping President Obama and as many Democrats as possible get elected.

      So I set myself a goal of doing six post a day just for discipline which is what Meteor Blades, kos, Crawford, and all those front pagers do.  

      But, with everything else going on some of them are just slap and paste, Hey check out this cool article or poll.

      I sort of figured this Krugman thing would be one of those to warm up.  But, as I tried to cut this down to a fair use three paragraphs too many crucial insights were on the cutting room floor so I spent time paraphrasing, and interpreting the argument.  Which I agree makes a better post but take a lot more time for me than it should.  

      I don't mind doing it if they are received well.  But, if I spend an hour or two on a post that get 6 rec and comments it takes the wind out of my sails for a while.  

      I'm trying to find a balance.  

      But, here I think may be an opportunity for Team Obama to create an ad that takes things to the next level and ties together the anti-science thing across not just the Romney Ryan economic lies, but lies on choice, and across the board.  So I was motivated by the fact that even if this post isn't seen by many, maybe it will tee up the idea for someone else to get it in front of Axelrod, Plouffe, or our Super PAC folks in time they can make an assessment and maybe get something out.   (Maybe delusions of grandeur but still motivating.)

      But, I could have done four or give slap and claps in the same time, so I may have to give up this disciplined writing test of trying to do six a day.

      The means is the ends in the process of becoming. - Mahatma Gandhi

      by HoundDog on Mon Oct 22, 2012 at 02:00:28 PM PDT

      [ Parent ]

  •  Silly Paul. The science of Kolob (2+ / 0-)
    Recommended by:
    katiec, HoundDog

    is quite different than earthly, merely human sciences. Gosh,  the chutzpah of nonbelievers is really something, for pete's sake.

    What we call god is merely a living creature with superior technology & understanding. If their fragile egos demand prayer, they lose that superiority.

    by agnostic on Mon Oct 22, 2012 at 01:51:51 PM PDT

  •  Economic Science Isn't Terribly Popular With Eithr (2+ / 0-)
    Recommended by:
    HoundDog, pgm 01

    party. Certainly not in the issue of wealth concentration.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Mon Oct 22, 2012 at 02:03:46 PM PDT

    •  Joseph Stiglitz has argued that excess (3+ / 0-)
      Recommended by:
      pgm 01, johanus, lostinamerica

      concentration of wealth may be one of the primary drivers of our current economic cross-currents and troubles.

      At a certain point, the middle class has insufficient resources to sustain consumer demand according to this theory, which I believe has some validity.

      The means is the ends in the process of becoming. - Mahatma Gandhi

      by HoundDog on Mon Oct 22, 2012 at 02:09:10 PM PDT

      [ Parent ]

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