Paul Krugman’s most important NY Times column in quite awhile, IMHO, is now up at that newspaper’s website. I hope people reading this will click on the link, below, and provide comments regarding same, if they’re so inclined.
As indicated, I’ve entitled this post: “'Things Are Not O.K.' (Part I, by Paul Krugman)." I have more to add to it; and, I’ll do just that in a second post, over the next few hours.
We are, still, very much living in an era of record-breaking income inequality, long-term joblessness, and a housing/mortgage fiasco -- all three being metrics which either equal or have surpassed levels reached during the Great Depression -- created by decades of unbridled greed-gone-wild on Wall Street. I will delve into greater details on those realities in “Part II.”
Exacerbating these inconvenient truths, perhaps the greatest, most politically-inconvenient reality of the moment is that U.S. taxpayers are, as you read this, still subsidizing Wall Street’s institutionalized efforts to (as Joseph Stiglitz first coined the term) socialize their losses, while our Masters of the Universe continue to privatize make-believe profits, to the tune of hundreds of billions of dollars per year. (More about this in “Part II,” as well.)
Last but not least, things are teetering on the abyss in (not just in Greece) Europe, and U.S. banks, contrary to MSM propaganda, are up to their necks in counterparty derivatives exposure, perhaps (thanks to weak-to-nonexistent Dodd-Frank legislative efforts to put a saddle on derivatives trading; even now, we don’t know the extent of it, but it is substantially more than we’ve been led to believe in the MSM) to a point which could make the AIG bailout of 2008 look like a day at the beach. The fact that we do not know the full extent of the problem, more than four years after the start of the greatest recession in our country’s history since the Great Depression, speaks more to this truth about the failure of our government than anything I could add. (Again, more on this in a few hours.)
In the meantime, here’s Krugman…
Things Are Not O.K.
Paul Krugman
New York Times
Monday, February 6th, 2012
In a better world — specifically, a world with a better policy elite — a good jobs report would be cause for unalloyed celebration. In the world we actually inhabit, however, every silver lining comes with a cloud. Friday’s report was, in fact, much better than expected, and has made many people, myself included, more optimistic. But there’s a real danger that this optimism will be self-defeating, because it will encourage and empower the purge-and-liquidate crowd.
So, about that jobs report: it was genuinely good, certainly compared with the dreariness that has become the norm. Notably, for once falling unemployment was the real thing, reflecting growing availability of jobs rather than workers dropping out of the labor force, and hence out of the unemployment measure.
Furthermore, it’s not hard to see how this recovery could become self-sustaining…
At this point, Krugman discusses the lack of new housing formation as being part of the problem relating to our nation’s housing slump. I think he’s oversimplifying matters, but I’ll reserve comment on that until later tonight, too.
As Krugman notes: “That said, our economy remains deeply depressed. As the Economic Policy Institute points out, we started 2012 with fewer workers employed than in January 2001 — zero growth after 11 years, even as the population, and therefore the number of jobs we needed, grew steadily. The institute estimates that even at January’s pace of job creation it would take us until 2019 to return to full employment. “
So this encouraging employment report shouldn’t lead to any slackening in efforts to promote recovery. Full employment is still a distant dream — and that’s unacceptable. Policy makers should be doing everything they can to get us back to full employment as soon as possible.
Unfortunately, that’s not the way many people with influence on policy see it…
As usual (of late), I’m not going to provide narrative on his entire column. You should read it, yourself; come to your own conclusions.
I will be back in a bit, with a second post, in follow-up to what I’ve touched upon, briefly, above. In the meantime, I strongly encourage you to checkout Krugman’s column.
See you, again, in a bit...
