Monday, June 28, 2010
We are now, I fear, in the early stages of a third depression.
And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.
... you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.
As far as rhetoric is concerned, the revival of the old-time religion is most evident in Europe, where officials seem to be getting their talking points from the collected speeches of Herbert Hoover, up to and including the claim that raising taxes and cutting spending will actually expand the economy, by improving business confidence.
Now that the banks and asset-holders (mostly in the markets) have been bailed out, why bother with everyone else? Krugman says there is a "failure of policy", but that's only true if the policy is supposed to help the lesser economic players (i.e. you). But given the way moneyed interests control much of governance, why expect such a "relief policy for all" to be something they care about?
There are a lot of gains to be made by the (restored) economically powerful when economies slump dramatically.
Geez. The real problem is reckless spending. The Democrats have had nearly two years to burn the economy to the ground, and now they stand in the growing pile of ashes and say, with a straight face, that the real problem is that they didn't use enough gasoline.
The only, and I mean only reason that Democrats cling to the completely discredited Keynesian economic theories is that, like the 400 pound woman who swears by the all-chocolate diet, the whole idea of reckless "stimulus" spending simply confirms the liberal's innermost desire to reward themselves by lavishing other people's money on themselves and their friends. It's the most destructive, self-centered political philosophy on the face of the earth, and the United States is stuck with it until January, when the Socialist Democratic party will be thrown in the trash can along with the Soviet Union as yet another failed makeover of communist fascism.
People will start assuming debt when they have gotten out of the crushing weight of their current debt. Everyone thought they were rich because they owned a house worth way more than they owed in mortgage and credit card debt. They thought they had positive net worth and acted accordingly. Overnight, they discovered that instead of having a positive net worth, they had a massively negative net worth. This completely changed the psychology of the American public. Now Americans are saving and reducing debt at a ferocious rate. Doing so is destroying the monetary base, but it is impossible to stop the savings and debt reduction. I, for one, am not buying ANYTHING. I am just eliminating debt. I drive a 21 year old car that is fully paid for, have paid off all my credit cards and outstanding bills. Getting out of debt is the new middle class American dream, and the Democratic party's wild, lavish, CRIMINAL spending spree is at direct odds with the new American values.
Print all the money you want. We'll erase the monetary bloat faster than you can enlarge it. You have your liberal philosophies and priorities, conservatives have theirs. And yours are on the way out.
Quite simply, Obama arrived a day too late for the spending party. Yet he and the Democrats party on as if it was still 2000. On borrowed money from the Chinese.
Come January 2011, the party is fucking over.
Anonymous must have pulled a Rip Van Winkle from 1/20/01 - 1/20/09. But to his credit, he suggests in his penultimate paragraph that 2000 was a good year, perhaps because Clinton/Gore left a huge surplus that was soon depleted while Anonymous slept, knowing in his heart of hearts that Bush/Cheney would do even better than Clinton/Gore. Alas, ....
No, 2000 was a good year because the robbery of the Social Security trust fund was in full swing. Take away the excess Social Security revenue being burned away by the government and the government would have been insolvent, like it is now.
"...when the Socialist Democratic party will be thrown in the trash can along with the Soviet Union as yet another failed makeover of communist fascism."
Sounds like someone failed Political Science 101 in college. Communists are not fascists, and fascists are not communists.
This egregious error renders anything else Anonymous says moot. If you don't understand the differences between communism and fascism, you have proven you know nothing about world history and global politics, and therefore aren't to be taken seriously.
Borrowing from the Chinese? Who do you think has been providing the U.S. with the money to (mis)prosecute two wars for the past decade? It didn't start on January 20, 2009, buddy.
Gotta love how Anon brags about his fiscal austerity. I just bought a new $9,000 motorcycle. Paid cash for it, because I have a good job and no debt other than a mortgage. I guess that makes me a conservative in good standing.
Except that I'm a liberal, and have been since Reagan was president. I'm more liberal now than I was then.
In 1937, in the midst of a slow economic recovery, FDR acquiesced to GOP demands to reduce spending amid fears of a growing deficit. The result was a sharp increase in unemployment (from 14% to 19%). A resumption in federal spending brought about an end to the recession of 1937-38.
Anon wants the government to worsen the recession by taking money out of the economy. No thanks. I'd rather see another stimulus. A larger one to begin with would have done much more good.