Doom!
September 20, 2011 11:27 PM Subscribe
Doom! Our economic nightmare is just beginning. John Judis: policymakers are repeating the mistakes of the 1930s. Via Paul Krugman.
This post was deleted for the following reason: Link is behind a paywall -- vacapinta
Paywall. >:(
posted by aeschenkarnos at 11:45 PM on September 20, 2011
posted by aeschenkarnos at 11:45 PM on September 20, 2011
Well, maybe the people who most need to read it are the only ones who can afford to.
posted by oneswellfoop at 11:45 PM on September 20, 2011 [1 favorite]
posted by oneswellfoop at 11:45 PM on September 20, 2011 [1 favorite]
Here it is without the paywall.
posted by jimmythefish at 11:54 PM on September 20, 2011 [1 favorite]
posted by jimmythefish at 11:54 PM on September 20, 2011 [1 favorite]
I don't think Romney is an idiot, he's just pretending to be.
One interesting thing, Bush actually believed in Keynesian economics. He claimed he was running a deficit in order to help boost the economy. And he literally sent out stimulus checks. A $300 check in his first term and later the $600 check. Can you imagine Obama trying something like that, much less getting it passed through congress?
And Bush also claimed he thought that Wars would stimulate the economy as well (He actually made this claim in private before the Iraq war). They certainly enriched military contractors.
Instead the vast bulk of Obama's economic policies have been Tax cuts and Spending cuts. So economically Obama has actually been much more conservative then bush, at least since Obama's first stimulus, which was way to small.
Unfortunately, bush completely ignored the housing bubble, the problems on wallstreet and so on. However, does anyone think Obama would have done anything different, given his apparent fealty to wallstreet?
But like I said, Romney isn't stupid. There's no reason to think he doesn't really think Keynesian economics can work, and he'll want to be re-elected as well so there's a decent chance that he, like Bush will try some stimulus.
But anyway, who knows. Rick Perry seems like he would be a disaster.
posted by delmoi at 12:07 AM on September 21, 2011
One interesting thing, Bush actually believed in Keynesian economics. He claimed he was running a deficit in order to help boost the economy. And he literally sent out stimulus checks. A $300 check in his first term and later the $600 check. Can you imagine Obama trying something like that, much less getting it passed through congress?
And Bush also claimed he thought that Wars would stimulate the economy as well (He actually made this claim in private before the Iraq war). They certainly enriched military contractors.
Instead the vast bulk of Obama's economic policies have been Tax cuts and Spending cuts. So economically Obama has actually been much more conservative then bush, at least since Obama's first stimulus, which was way to small.
Unfortunately, bush completely ignored the housing bubble, the problems on wallstreet and so on. However, does anyone think Obama would have done anything different, given his apparent fealty to wallstreet?
But like I said, Romney isn't stupid. There's no reason to think he doesn't really think Keynesian economics can work, and he'll want to be re-elected as well so there's a decent chance that he, like Bush will try some stimulus.
But anyway, who knows. Rick Perry seems like he would be a disaster.
posted by delmoi at 12:07 AM on September 21, 2011
Wars = blood money. The karmic retribution sucks.
posted by five fresh fish at 12:16 AM on September 21, 2011
posted by five fresh fish at 12:16 AM on September 21, 2011
From the article:
"Yet it’s not just Romney and the other Republican presidential candidates who seem oblivious to the lessons of the ’30s. From David Cameron to Angela Merkel to Japan’s new Prime Minister Yoshihiko Noda, many of the world’s leaders are convinced that austerity is the way to fix our broken economy...."
It's like when the psychiatrists all go mad, and decide that the rest of the world is crazy. Everyone in a position of power is wrong, but because they're all wrong in the same way they see reinforcement in the opinions of their peers. If you don't believe that deficits are the problem... well, then you must be wrong, or so they say. Look how everyone else wants to cut spending.
posted by Kevin Street at 12:17 AM on September 21, 2011
"Yet it’s not just Romney and the other Republican presidential candidates who seem oblivious to the lessons of the ’30s. From David Cameron to Angela Merkel to Japan’s new Prime Minister Yoshihiko Noda, many of the world’s leaders are convinced that austerity is the way to fix our broken economy...."
It's like when the psychiatrists all go mad, and decide that the rest of the world is crazy. Everyone in a position of power is wrong, but because they're all wrong in the same way they see reinforcement in the opinions of their peers. If you don't believe that deficits are the problem... well, then you must be wrong, or so they say. Look how everyone else wants to cut spending.
posted by Kevin Street at 12:17 AM on September 21, 2011
Oh, and you should definitely check out this blog post by Krugman about economic Hysteresis that he says is starting.
Think about compressed air in a pump. The Gas law says Pressure * Volume = nR*Temprature. if you take n and R as constants, you can say PV ~=T. So, lets say you compress a container of air to half it's size. The temperature and pressure would both go up (you would use the Adiabatic index to figure out which would go up by how much)
Anyway, immediately after you compress the air the net change in system energy would be zero. The air would be able to push back with exactly as much force as you used to compress it.
But, the gas would be hotter then it's surrounding environment. So, over time the temperature would drop but the volume would stay constant. That means the pressure would drop.
So over time, the system loses energy.
The economy works in a similar way. According to Krugman, when we stop production, we don't lose the ability to produce. however if we're under capacity for a long time we start to lose capacity. This could be something like a company selling off their production equipment to China, or even selling it for scrap. Even just abandoning facilities or whatever. That will make it much more difficult for the economy to rebound.
posted by delmoi at 12:24 AM on September 21, 2011 [1 favorite]
Think about compressed air in a pump. The Gas law says Pressure * Volume = nR*Temprature. if you take n and R as constants, you can say PV ~=T. So, lets say you compress a container of air to half it's size. The temperature and pressure would both go up (you would use the Adiabatic index to figure out which would go up by how much)
Anyway, immediately after you compress the air the net change in system energy would be zero. The air would be able to push back with exactly as much force as you used to compress it.
But, the gas would be hotter then it's surrounding environment. So, over time the temperature would drop but the volume would stay constant. That means the pressure would drop.
So over time, the system loses energy.
The economy works in a similar way. According to Krugman, when we stop production, we don't lose the ability to produce. however if we're under capacity for a long time we start to lose capacity. This could be something like a company selling off their production equipment to China, or even selling it for scrap. Even just abandoning facilities or whatever. That will make it much more difficult for the economy to rebound.
posted by delmoi at 12:24 AM on September 21, 2011 [1 favorite]
Er, none of that should be italicised except the word "Hysteresis". I spent all that time writing it and now it looks like I'm just quoting someone!
posted by delmoi at 12:26 AM on September 21, 2011
posted by delmoi at 12:26 AM on September 21, 2011
Hah, I was impressed Krugman knew that much science.
posted by BinGregory at 12:28 AM on September 21, 2011 [2 favorites]
posted by BinGregory at 12:28 AM on September 21, 2011 [2 favorites]
The root of the global economic problem is this: there are billions of destitute, starving, desperate 3rd world people.
Before globalization the economic pool was dammed cross-cross with economic barriers. Some pools had very high water (wealthy middle class), some pools were nigh empty (3rd world).
Removing the dams means the water level falls for us and rises for the impoverished. We westerners lose comfort and social support while bajillions of the far less fortunate advance as we once did. (The truly wealthy aren't even on their yachts—the tide doesn't concern them plus, hey, they've got insurance.)
It would be nice if the 1% who own 40% would share.
posted by five fresh fish at 12:38 AM on September 21, 2011
Before globalization the economic pool was dammed cross-cross with economic barriers. Some pools had very high water (wealthy middle class), some pools were nigh empty (3rd world).
Removing the dams means the water level falls for us and rises for the impoverished. We westerners lose comfort and social support while bajillions of the far less fortunate advance as we once did. (The truly wealthy aren't even on their yachts—the tide doesn't concern them plus, hey, they've got insurance.)
It would be nice if the 1% who own 40% would share.
posted by five fresh fish at 12:38 AM on September 21, 2011
I don't think Romney is an idiot, he's just pretending to be.
Yeah, he has to feign brain death to have a shot at beating Perry for the nomination.
It bespeaks the sad reality of American politics that Romney will have a better chance at dealing with the economic crisis than Obama ever would - at least Romney can count on Democrat senate votes.
posted by mek at 12:41 AM on September 21, 2011
Yeah, he has to feign brain death to have a shot at beating Perry for the nomination.
It bespeaks the sad reality of American politics that Romney will have a better chance at dealing with the economic crisis than Obama ever would - at least Romney can count on Democrat senate votes.
posted by mek at 12:41 AM on September 21, 2011
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posted by jabberjaw at 11:43 PM on September 20, 2011