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Keynes Rejected

Krugman:

[President Obama] has effectively given up on the idea that the government can do anything to create jobs in a depressed economy. In effect, although without saying so explicitly, the Obama administration has accepted the Republican claim that stimulus failed, and should never be tried again.

What’s extraordinary about all this is that stimulus can’t have failed, because it never happened. Once you take state and local cutbacks into account, there was no surge of government spending. [. . .] Fiscal policy didn’t fail; it wasn’t tried.

Meanwhile, The New Republic tells us how great Tim Geithner is because "Wall Street looks like a patient that staggered off its death bed and promptly took up ultra-marathoning[.]" Yes, that should warm the hearts of Dems and progressives everywhere. Mortgage crisis? Unemployment? Not Geithner's problem. Banks making obscene amounts of money? Job well done Timmeh. Sheesh.

Speaking for me only

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    Did the Obama Administration (5.00 / 4) (#1)
    by inclusiveheart on Mon Feb 14, 2011 at 04:13:23 PM EST
    "give up" or were they always basically determined to go through the motions of acting out a stimulus kabuki - much of which was in tax credits that few could capitalize on - before they just started in on continuing the process of robbing the US Treasury that started more than a decade ago?

    Anyone serious about putting this country back on solid economic ground would have come into office with a comprehensive plan that would have addressed jobs, infrastructure and innovation.  Looking back, at least George Bush pretended to care when he sent me that $300 check.  Oh and he wanted me to have a house, too!  This guy wants me to tighten my belt while he gives away our collective investment in this country to a handful of uber-rich people who just don't need more than they already have.

    Any voters serious about the economy (5.00 / 1) (#6)
    by Towanda on Mon Feb 14, 2011 at 04:38:58 PM EST
    in 2008 would have demanded more answers to or even more questions about the economy, with the evidence since 2007 that it ought to have been the number-one issue in the campaign.  But noooo, the media and the ADD voters had other agendas -- and most egregious were those voters and media (blogs included) that made it all about winning for the candidates, not winning for the people.

    I do not forgive them, none of them, the fools.  

    Parent

    To be fair... (5.00 / 1) (#13)
    by inclusiveheart on Mon Feb 14, 2011 at 04:58:10 PM EST
    In the context of a campaign, what are the answers to tough questions?  Obama was a blank slate and that was by design.  That team played to the projections of their audience.  "Hope" was a brilliant manipulation of the audience - it can mean anything to anyone - it can be tender - it can be fantastical - it can be glorious and triumphant - it can be down to earth and realistic.  "Change" - same thing - it can be incremental - it can be radical - it can be safe relief - it can be adventure - it can be whatever different people seek.  It did not matter what the answer to the questions were because they were positively associated with a mindset that most anyone could adhere to in those two words.

    I watched that campaign and that candidate now President and thought that they played it brilliantly - but I also thought that that level of play suggested that these characters were more cynical and potentially more corrupt than most anyone that I talked to during that time could have imagined.  Most people I knew were just looking for relief; looking for change from George Bush; in need of a sense of security; etc.  I think that this team of politicians took advantage of a beleaguered population;  and I don't think that they care much about the fact that they did other than the fact that it worked.  Tighten your belts people!

    The reality is that there hasn't been as successful an effort to build a cult  that I can think of ever.  Hundreds of millions of people bought into the dream.  The question is whether or not they will stick with it.  And that's the real question yet to be answered.  I think that there are already signs that suggest that the Kool-Aid will be rejected when attempts are made to pass it around.  But maybe not.  We'll see.

    Parent

    "Fair" was not at all operative (none / 0) (#33)
    by Towanda on Mon Feb 14, 2011 at 07:08:36 PM EST
    in the face of all that you describe well of that new low point in the history of this land.  "Blank slate," "by design," "manipulation," "cynical," "corrupt," "took advantage" -- nope, a header "to be fair" just doesn't correlate with anything in your comment, other than that the populace was "beleaguered."  But the populace has been under extreme pressure before and came through without being so foolish.

    Personally, I think that what will be operative for the fool voters in 2012 will be repeated.  To paraphrase none other than Bush, the mantra of the voters:  "Fool me once, shame on you.  Fool me -- you can get fooled again."

    Parent

    This paragrah, (5.00 / 4) (#35)
    by NYShooter on Mon Feb 14, 2011 at 07:22:18 PM EST
    From a good-bye letter to his friends as he sinks towards death: He's almost 60 year old, 2 years unemployed, college educated,  with a 35 year management resume,

    "I can't help but juxtapose our plight to the tycoons and politicians. They are never satisfied with their enormous wealth, and always want more millions no matter whom it hurts. They STEAL from pension funds, banks, the people and government, and little Wall Street investors. Then rather than face punishment, they become petty kings in this world. They are disloyal to America, unpatriotic, and serve their own foreign UN-American greedy causes and demand more and more and more.

    I feel that this is not the nation into which I was born. I was born in America, the land of the free and the home of the brave. America, where people give as much as they receive. America, where all people work for the common good, and try to leave a better and more prosperous nation for the next generation. America, where people help their neighbors and show charity and mercy. This new America is alien to me -- it is an America of greed and corruption and avarice and mean spirited selfishness and hatred of the common good -- it is an America of savage beasts roaring and tearing at the weak, and bullying the humble and peacemakers and poor and those without means to defend themselves. I am not welcome here anymore. I don't belong here anymore. It's as if some evil beast controls government, the economy, and our lives now."

    And, this is the America that Obama and Geithner feel is the way it should be, and that they are the perfect guardians of this new America.

    Parent

    True. True. True. (5.00 / 1) (#2)
    by Ga6thDem on Mon Feb 14, 2011 at 04:16:50 PM EST
    Your average voter could care less about the stock market and it certainly doesn't win elections unless they decide just to limit elections on Wall Street traders in '12.

    Obviously Tim Geithner (5.00 / 2) (#3)
    by Militarytracy on Mon Feb 14, 2011 at 04:28:33 PM EST
    Does know how to read the people he decides to read, and he saved what he understood.  I think it is impossible for any of us to not argue for the preservation of our own current reality and the life of its key components.

    If it is true though that Geithner has a gift of finding a way for people to accept limits, what a terrible waste of talent.  There were no easy solutions to the financial meltdown, but there were solutions that would have made the lives of average Americans a lot better at this point in all of it than it is right now.  There were solutions that would not have allowed the engine of our economy to be destroyed to the degree that it is.  Other entities would have had to deal with limits too though and not only the peasants. Those entities are entities near and dear to Timmeh's self identity though. If Geithner is brilliant on some level about something, it certainly is a wasted brilliance or a brilliance put poorly to use IMO.  It is also a brilliance obviously without even the most basic of ethics.

    In the book "Cahokia," the author (5.00 / 1) (#8)
    by oculus on Mon Feb 14, 2011 at 04:51:40 PM EST
    mentions that, during the Great Depression, the federal government set up a program to employ archeologists to study/excavate/catalog various sites around the U.S.  

    they (5.00 / 1) (#10)
    by Capt Howdy on Mon Feb 14, 2011 at 04:53:32 PM EST
    paid artists to make murals and posters.  can you imagine that happening now?

    Parent
    I knew about the artists and writers (5.00 / 1) (#14)
    by oculus on Mon Feb 14, 2011 at 05:00:13 PM EST
    but not the archeologists.

    Parent
    cultural studies (5.00 / 1) (#16)
    by jeffinalabama on Mon Feb 14, 2011 at 05:02:50 PM EST
    were big... recording of traditional music, ethnographies... amazing what happened.

    Moe amazing what's not happening today.

    Parent

    yeah (none / 0) (#18)
    by Capt Howdy on Mon Feb 14, 2011 at 05:07:32 PM EST
    didnt they pay people to, like, go into the mountains of Appalachia to record traditonal music and stuff like that.

    Parent
    of course (none / 0) (#19)
    by Capt Howdy on Mon Feb 14, 2011 at 05:08:09 PM EST
    the only reason I know that is because there is a movie on the subject

    Parent
    The thing is I can (5.00 / 1) (#37)
    by Militarytracy on Mon Feb 14, 2011 at 07:44:16 PM EST
    I can imagine all of that.  And being the bull headed goal oriented pain that I am, everything standing in the way of that is only a wall to be hammered down :)

    Parent
    I was told by some older artists (5.00 / 1) (#36)
    by Militarytracy on Mon Feb 14, 2011 at 07:41:47 PM EST
    in Sante Fe NM that the New Deal Art Program was pivotal in enriching the artist colony and keeping them alive, and probably played a very large role in the end in what Santa Fe has now become in the art world.

    Parent
    Unfortunately, nowadays, (none / 0) (#38)
    by DFLer on Mon Feb 14, 2011 at 08:10:05 PM EST
    only the rich can afford to live in Santa Fe or Taos.

    Parent
    That's true (5.00 / 1) (#44)
    by sj on Tue Feb 15, 2011 at 09:35:49 AM EST
    but if you don't mind living a half hour away, life can still be affordable -- if often a bit rustic.  And the country is just as beautiful.

    Parent
    yes it is (none / 0) (#52)
    by DFLer on Wed Feb 16, 2011 at 08:33:32 PM EST
    I had the good fortune to live in Arroyo Seco, just outside of Taos, for 18 months.

    Parent
    Ah, delighted to read that you (none / 0) (#34)
    by Towanda on Mon Feb 14, 2011 at 07:13:22 PM EST
    are reading about that extraordinary site and civilization.  I met Mel Fowler not long before he died, I read his book -- and that first book now has led me to almost a shelf full of works on Cahokia as well as a trek to what is left there.

    Then I also found a new book on new breakthroughs in understanding Mayan culture.  No question for me, when I saw the art and hieroglyphs and more from both cultures, that they were connected -- including the find of artifacts from each culture at sites of the other.  Their trade networks were massive, between Mayans and Middle Mississippians.

    Parent

    Archivists as well (none / 0) (#40)
    by cal1942 on Tue Feb 15, 2011 at 01:47:22 AM EST
    At least one of the federal census' was soundexed.

    Parent
    It was so amusing when Obama went to (5.00 / 2) (#15)
    by esmense on Mon Feb 14, 2011 at 05:01:11 PM EST
    the business community and asked them to hire more.

    Businesses don't create jobs. Demand creates both businesses and jobs. And demand is created by consumers with some money left in their pockets or some borrowing power left on the credit card.

    Too few Americans meet those qualifications nowadays.

    And the President and the Republicans are doing everything they can to assure that there will be even fewer who do in the future.

    well (none / 0) (#21)
    by Capt Howdy on Mon Feb 14, 2011 at 05:09:57 PM EST
    if you believe reports there was/is? supposed to be a lot of hiring "in the pipeline" that they were hedging on moving forward on.  I have heard this discussion in my company.

    Parent
    In my own business we saw demand start to (5.00 / 3) (#24)
    by esmense on Mon Feb 14, 2011 at 05:23:40 PM EST
    pick up at the high end in October. (And our foreign sales, mostly to the Scandanavian countries, Germany and Australia, have been strong.) Other small businesses in my industry (specialty after-market auto parts) have reported the same thing. I'm glad to see the high end customers recover from the scare they got from the original market tumble, and, for us, a company that caters only to a narrow, niche market anyway, the strong return of those customers is enough. But a niche, upscale market of the super affluent is never going to provide the jobs our economies needs and the broad prosperity we once enjoyed.

    Parent
    It no longer matters to me why the (5.00 / 2) (#31)
    by Anne on Mon Feb 14, 2011 at 06:19:30 PM EST
    administration made the decisions it did, except that they seem to think - as the Bush administration did on so many things - that just saying something worked, or is working, makes it so.

    There seems to be a deep belief in ability of the private sector, and private markets, to solve everything, and no trust in or commitment to the role of government in helping pull the country out of the hole it's in.

    For them, once they brought the TBTF banks back from the brink, it was "game over, nothing to see here, go away and let us get back to making money for us."

    I've just had it, I really have.  Sick of the enabling policy, sick of the constant drumbeat that we HAVE to cut spending, HAVE to bring down the deficit, HAVE to "get serious."

    The deliberate gas-lighting of the American people is serving a very few people and entities, and I'm sick of there being almost no challenge to this BS in the mainstream media - they are all singing from the same songbook.

    It's just getting to be too much.

    As to why the decisions (5.00 / 1) (#43)
    by sj on Tue Feb 15, 2011 at 09:32:35 AM EST
    have been made, I, like you, have reached my own conclusions.  And it really doesn't matter if I'm right or wrong.  What matters is the actual decision.  And it's result.  They consider a bill, any bill, to be a checkmark in the column of issues on their To Do list.  

    As to whether something "works" or not, I would ask "who is receiving the benefit? Is that entity satisfied?"  If the answer is "yes" then it's working.  

    Unfortunately the entity of the American people isn't even on their radar.  Except in terms of needing to be addressed from time to time to be given a sales job and a pat on the head.  I feel like that's seen as a nuisance job.

    I'm sick of it, too.  I'm heartsick and I'm angry and I don't know what to do about it.  For years I was boots on the ground and an organizer for the Democratic party.  At this point, I feel like I contributed to this mess with all that work.  I gave time, money and energy that was all subsumed by these people.

    My eyes are open.  I see this happening.  I don't know what to do.

    Parent

    No one seems to know what to do... (none / 0) (#45)
    by Anne on Tue Feb 15, 2011 at 10:08:02 AM EST
    I truly don't feel as if we have any voice; what we're doing at the ballot box is becoming more and more irrelevant.

    But I am understanding revolution a lot better than I used to.

    So, there's that...

    Parent

    there's that (none / 0) (#46)
    by sj on Tue Feb 15, 2011 at 10:10:22 AM EST
    We've slid into a soft fascism. (none / 0) (#41)
    by observed on Tue Feb 15, 2011 at 04:40:22 AM EST
    Repitition (none / 0) (#42)
    by jmacWA on Tue Feb 15, 2011 at 09:30:03 AM EST
    that just saying something worked, or is working, makes it so.

    Sadly, I believe that this has become a fact.  The issue is that it is said in so many different ways, and in so many different mediums, that even when you are aware, you don't always see it.  What we are dealing with is subliminal seduction (it's the only way I can explain the results of the last 3 presidential elections)

    Parent

    Exactly my sentiments. (5.00 / 1) (#32)
    by esmense on Mon Feb 14, 2011 at 06:51:22 PM EST
    I tired of the nonsense. Some Republican said today that Obama's budget would lock us into "generational debt." Lets get serious. 30 years of "conservative" spending that absolutely nobody has wanted to step up and pay for has locked us into generational debt and a ruined economy. Two wars and massive tax cuts. That's pure stupidity -- and something that certainly shouldn't require a econ degree to understand. We've been running our affairs like idiots who think they could repeal the laws of gravity just by jumping off the roof and shouting that it is so.

    The splat at the bottom of that jump isn't pretty, but it sure shouldn't be unexpected.  

    I'm always amused by the tactic of (3.00 / 3) (#23)
    by Farmboy on Mon Feb 14, 2011 at 05:21:24 PM EST
    saying that as the person under discussion hasn't commented on a topic, let's speak for them - then lambast them for what we said.

    Here, I'll try one: "Although without saying so explicitly, Krugman is expressing a strong desire for a large strawberry milkshake. This is disheartening, as a man of his age should be paying closer attention to his diet. Why, oh why won't he just push away from the buffet table?" See how easy and fun!

    WTF? (5.00 / 1) (#25)
    by Big Tent Democrat on Mon Feb 14, 2011 at 05:31:04 PM EST
    he probably fled (none / 0) (#26)
    by Capt Howdy on Mon Feb 14, 2011 at 05:37:16 PM EST
    ftw I didnt think it was for you.

    Parent
    Krugman is a contrarian (none / 0) (#27)
    by Farmboy on Mon Feb 14, 2011 at 05:51:30 PM EST
    It's what Times pays him to be. Anything the administration is for, he's against it. But sometimes, there's no "there" there, so he has to build his windmill on bare ground before he can tilt at it. I don't hold anything against him for it; I'm sure he has column inches to fill.

    This column was extra fun, because Krugman is playing both parts in a Punch and Judy show. In today's play Krugman speaks for Obama and says, "I'm leaving you, stimulus, and never coming back! Farewell!" "Well, the joke's on you Obama," cries Krugman. "There never was a stimulus, so you can't leave it!" The audience roars their approval, and Judy chases Punch about the stage with a stick.

    Parent

    Excuse me (none / 0) (#28)
    by Big Tent Democrat on Mon Feb 14, 2011 at 05:53:14 PM EST
    Are you arguing that Obama will return to "stimulus" at some later time? Really?

    This is a serious argument? Not from where I am sitting.

    Parent

    How can he return to something that, (none / 0) (#29)
    by Farmboy on Mon Feb 14, 2011 at 06:03:26 PM EST
    according to Krugman, never happened?

    From the column, Krugman asserts that Obama "without saying so" is saying that the  "stimulus failed, and should never be tried again." And Krugman rebuts, the "stimulus can't have failed, because it never happened."

    Crowd loves it when Punch gets his comeuppance.


    Parent

    You misunderstand Krugman (5.00 / 1) (#30)
    by Big Tent Democrat on Mon Feb 14, 2011 at 06:08:38 PM EST
    His argument is that given the fact that federal stimulus was offset by cuts in state government spending, there was no actual "stimulus." Not that Obama did not "try" it. His try was inadequate for many reasons, but the main one is his stimulus idea, inadequate on its own terms, was made nonexistent by state government cuts in spending.

    Now in this budget, Obama has clearly abandoned stimulus. Surely you do not dispute that.

    Krugman's argument is that by abandoning stimulus at this time, he basically cedes the argument on stimulus - to wit, he acquiesces to the GOP argument that the stimulus failed.

    That is Krugman's argument. Disagree with it if you will, but try addressing it.

    Parent

    Krugman is not a contrarian (none / 0) (#39)
    by Militarytracy on Tue Feb 15, 2011 at 12:38:30 AM EST
    And he takes it the easiest and is the most forgiving towards this administrations wrong headedness of the economists who run in his pack, but there is a whole pack of economists that subscribe to most of his observations and beliefs.  Some of them have won Noble prizes too.

    Parent
    Re:Krugman (5.00 / 1) (#47)
    by Harry Saxon on Tue Feb 15, 2011 at 10:20:43 AM EST

    One thing I do on a regular basis is analyze information about market size and activity, and over time, it's taken place in a very wide range of industries (yours truly specializes in oddball deals). Unless you are dealing with markets in which the government demands extensive reporting (like Japan, the data you can get in Japanese is just fantastic) or ones where you have a system of centralized reporting or other tight controls (like pharmaceuticals), it is very difficult even to get decent estimates of market size. So a basic issue is: understand the integrity of data.

    Now consider commodities. Inventories can be held LOTS of places: storage facilities by private owners (major refiners such as flour mills), finished product, private speculators (there have been reports for years of base metal stockpiling in China), even the consumer level (during the oil crisis, people kept their auto gas tanks fuller due to the even-odd license plate gas station system). Consider what a monstrous supervisory apparatus around the world would be required to track all or even a substantial portion of where inventories in various commodities could be held.

    The logical fallacy for Krugman is the official inventories he is looking at are only a subset of the places where inventory can be accumulated, and in many if not most cases a small enough subset that he cannot reach conclusions of the absence of inventory accumulation. For instance, in our long running discussion about oil prices in 2008, Krugman focused on official inventories. We pointed out that that storage was limited and actually surprisingly impractical. Those figures did not include the Strategic Petroleum Reserve (which was increasing its holdings during the 2008 price rise) nor did it consider that oil can simply be stored in the ground, via reducing well output.

    Click or Naked Capitalism Me

    Parent

    She's always giving Krugman (none / 0) (#48)
    by Militarytracy on Tue Feb 15, 2011 at 11:02:32 AM EST
    hell when she feels like he has it coming.  I bought her book, read it between Shanatram.  Reading about economic and business culture is so dry though.  No Ayn Rand bodice ripping in an Yves novel :)

    Parent
    Try (none / 0) (#49)
    by Harry Saxon on Tue Feb 15, 2011 at 12:44:17 PM EST
    "Confessions of an Economic Hit Man."

    I was initially recruited while I was in business school back in the late sixties by the National Security Agency, the nation's largest and least understood spy organization; but ultimately I worked for private corporations. The first real economic hit man was back in the early 1950s, Kermit Roosevelt, Jr., the grandson of Teddy, who overthrew the government of Iran, a democratically elected government, Mossadegh's government who was Time`s magazine person of the year; and he was so successful at doing this without any bloodshed--well, there was a little bloodshed, but no military intervention, just spending millions of dollars and replaced Mossadegh with the Shah of Iran. At that point, we understood that this idea of economic hit man was an extremely good one. We didn't have to worry about the threat of war with Russia when we did it this way. The problem with that was that Roosevelt was a C.I.A. agent. He was a government employee. Had he been caught, we would have been in a lot of trouble. It would have been very embarrassing. So, at that point, the decision was made to use organizations like the C.I.A. and the N.S.A. to recruit potential economic hit men like me and then send us to work for private consulting companies, engineering firms, construction companies, so that if we were caught, there would be no connection with the government.

    Click or Amazon Me

    Parent

    I read about this book (none / 0) (#50)
    by Militarytracy on Tue Feb 15, 2011 at 01:38:59 PM EST
    Have you read it?

    Parent
    I've seen him a number of times (none / 0) (#51)
    by Harry Saxon on Tue Feb 15, 2011 at 05:31:50 PM EST
    on the program "Democracy Now" and am familiar with the story he tells.  It sounds very plausible to me.

    Parent
    What kind of doctor (none / 0) (#4)
    by robotalk on Mon Feb 14, 2011 at 04:31:55 PM EST
    would allow a death bed heart patient to partake in an ultra marathon immediately after a heart attack?  Indeed, allowing one to do so would have the same effect on a patient as it will on our economy.  

    but, but, (none / 0) (#5)
    by jeffinalabama on Mon Feb 14, 2011 at 04:34:07 PM EST
    "a rising tide lifts all boats!"

    (Ducking and running)

    Elites circulating with other elites.

    I think (5.00 / 2) (#7)
    by Capt Howdy on Mon Feb 14, 2011 at 04:49:54 PM EST
    the availability of boats is the problem.  if you dont have one its just a flood.

    Parent
    How high is the water, Mama (none / 0) (#20)
    by jeffinalabama on Mon Feb 14, 2011 at 05:08:21 PM EST
    five feet high and rising.

    I'm worried for any national disaster, such as flooding in the midwest, or God forbid New Orleans has more problems...

    This crowd likes their money.

    Parent

    or pretty much anything unexpected. (none / 0) (#22)
    by Capt Howdy on Mon Feb 14, 2011 at 05:15:20 PM EST
    I always laugh when I hear republicans talking about how the country should run their budget like people do.  and I am like, NOOOOOOO.  
    they are running the US budget to much like I do already.


    Parent
    but (none / 0) (#9)
    by Capt Howdy on Mon Feb 14, 2011 at 04:52:38 PM EST
    I did hear the same "wall street is great so we are too" this morning on the tv.

    Parent
    We're the little people. (none / 0) (#12)
    by jeffinalabama on Mon Feb 14, 2011 at 04:57:26 PM EST
    The elites are fine. sometimes there's just too much to say about the problems being caused by this Quisling democratic regime.

    Parent
    I just always loved that boat thing (5.00 / 1) (#17)
    by Capt Howdy on Mon Feb 14, 2011 at 05:06:20 PM EST
    but I dont HAVE a boat.

    Parent
    Trickle Down baby... (none / 0) (#11)
    by kdog on Mon Feb 14, 2011 at 04:55:33 PM EST
    the monsoon starts any day now Jeff, with 30 years back trickle!  A biblical flood of wealth and opportunity is at hand, just a pipe clogged over on Wall is all, maintenance is on the case.

    Parent