The secret GOP meeting to destroy the economy in time for 2012

Yep, welcome back to me — I return in time to see Paul Krugman's tale of Republican destruction of American lives and futures for political gain. This is actually a two-parter.

■ One, The Professor calls the Republican Party on its Shermanesque March to the White House, burning everything in its path. A joyful return indeed (my usual emphatic and paragraphic intrusions):

Does anyone remember the American Jobs Act? A year ago President Obama proposed boosting the economy with a combination of tax cuts and spending increases, aimed in particular at sustaining state and local government employment. Independent analysts reacted favorably. For example, the consulting firm Macroeconomic Advisers estimated that the act would add 1.3 million jobs by the end of 2012. ...

But the bill went nowhere, of course, blocked by Republicans in Congress. And now, having prevented Mr. Obama from implementing any of his policies, those same Republicans are pointing to disappointing job numbers and declaring that the president’s policies have failed.

Think of it as a two-part strategy. First, obstruct any and all efforts to strengthen the economy, then exploit the economy’s weakness for political gain. If this strategy sounds cynical, that’s because it is. Yet it’s the G.O.P.’s best chance for victory in November.

What some call "cynical" others call something else. More on that below, but first this, from Krugman, in which he proves his point — that these aren't your daddy's policy differences:

[D]o Republicans really believe that government spending is bad for the economy? No.

Right now Mitt Romney has an advertising blitz under way in which he attacks Mr. Obama for possible cuts in defense spending — cuts, by the way, that were mandated by an agreement forced on the president by House Republicans last year. And why is Mr. Romney denouncing these cuts? Because, he says, they would cost jobs!

Krugman calls that "weaponized Keynesianism" — the belief that government only creates jobs when those jobs create happy pants for the testosterone crowd cheering soldiers onward. (Krugman has a slightly different definition.)

And there's this:

What about the argument ... that Mr. Obama should have fixed the economy long ago? ... The short answer is, you’ve got to be kidding.

I know you're being ironic, but no sir, no one's kidding. Read on.

■ Second, about that characterization. Krugman calls this "cynical." Last I heard, members of Congress have a sworn fiduciary obligation to protect the Constitution and benefit the people:

Fiduciary: a person to whom property or power is entrusted for the benefit of another.

Did I say "sworn"? Thought so. What about violating that oath and damaging the nation you're sworn to "benefit" — all for personal gain?

Some dare call that "treason" — including criminal defense attorney John Reed, as quoted in this great piece by Howie Klein at DownWithTyranny:

When Kansas Republican state Senator Jean Schodorf of Wichita watched a discussion of Draper's book and learned about the obstructionist meeting she decided to quit the Republican Party, which her family had been active in since the time of Abraham Lincoln.

She told John Celock of HuffPo that "When I heard that while people were suffering from the recession that Republican leaders were plotting to get even with the president, that was it."

People are waking up to this sociopathic behavior by the GOP leadership. And more than a few people recognize it as treason against the American people. Retired criminal defense attorney John Reed:

We know now, though, that the very same day the world welcomed the new President into office, a small group of powerful men, bent on his destruction, secretly met to design a plan to create economic and political chaos in America for the coming four years, solely for the purpose of regaining the House of Representatives in 2010, and the Presidency in 2012.

And now we have the first indications that American voters are starting to grasp what the Republicans had in mind and what they did.

Half the country is now aware of the GOP conspiracy to tank the economy and even if many Republican voters have grown immune to reality most independent voters now understand why the recovery has taken so long.

Read Howie's post for the rest. The details are stunning. This wasn't a virtual meeting; it happened, and Howie names the participants.

Some call them traitors. I could be persuaded to be one.

I'm reminded that a "crisis" is a turning point. We had one in 2000, when the American people blessed Bush v Gore with their silent approval.

Here we have another. Imagine if Romney wins, with as many people being aware of the Republican treachery as the article above says, and he wins by less than the number of disenfranchized voters in, let's say, Ohio or Pennsylvania.

At that point, I'd be with Mr. Franklin in his comment to a fellow American. It's one thing to be the thief; it's another to be the victim who hands stuff eagerly over. If you read the sign and bought it, the product is yours with my blessing.

GP

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"Niallism" — This is what defrocking an academic looks like (climate scientists, take note)

This is a follow-up to this post about kicking intellectually dishonest academics out of their (former) profession.

The post had two parts:

• The first half, in which Krugman takes "Niall Ferguson the political operative" (my phrase) to task for being, well, more or less a dishonest political actor.
  
  
• The second half, in which I recommend doing same to Koch-fueled climate "scientists" who have traded integrity for a career as an operative, but kept their lab coats anyway.

For those who've been spared the pleasure, Niall Ferguson is the "economic historian" who has turned up seemingly everywhere these days defending austerity and ridiculing anyone who proposes solutions not endorsed by the world's elites.

PBS has created shows around his views; respected magazines often host his opinions; and most recently Newsweek has used his byline to trash Obama with obvious lies in a blatantly political cover story. (Yes, lies. And Ferguson, trading on his academic brand, was the delivery boy.)

Now via Krugman, we're led to this by Matthew O'Brien in The Atlantic. Here's what defrocking and de-labcoating an academic looks like. Climate guys, take note (my emphasis and paragraphing):

The Age of Niallism:
Ferguson and the Post-Fact World
Bluster cannot make untruths true

People who believe facts are nothing think you'll fall for anything. Call it Niallism.

This is my last word (well, last words) on Niall Ferguson, whose Newsweek cover story arguing that Obama doesn't deserve a second-term has drawn deserved criticism for its mendacity from Paul Krugman, Andrew Sullivan, Ezra Klein, Noah Smith, my colleagues James Fallows and Ta-Nehisi Coates and myself.

The problem isn't Ferguson's conclusion, but how Ferguson reaches his conclusion. He either presents inaccurate facts or presents facts inaccurately. The result is a tendentious mess that just maintains a patina of factuality -- all, of course, so Ferguson can create plausible deniability about his own dishonesty.

Then he gets specific:

Exhibit A is Ferguson's big lie that Obamacare would increase the deficit. This is not true. Just look at the CBO report Ferguson himself cites. ...

And then gets even more specific than that. After much dissection of the indefensible and dishonest, O'Brien concludes:

Of course, it's not just Ferguson. There is an epidemic of Niallism -- which Seamus McKiernan of the Huffington Post defined as not believing in anything factual. It's the idea that bluster can make untruths true through mere repetition. We expect this from our politicians, not our professors.

In the end, O'Brien contrasts the academic Ferguson was with what he has become, a blustering liar unworthy of his frock and his credentials. A sad, ironic side-by-side.

I'd have gone one step further. I'd have not only taken his frock; I'd have burned it in the public square. But that's me.

O'Brien does the next best thing — he names the essence of dishonesty after the man:

Niallist: One who believe facts are nothing.

"Niallism" has a great ring to it, and if god is just, it will follow the man to the grave. A fitting monument, given the human suffering Ferguson helps cause. After all, he's an eager and well-worked lackey for the Billionaire Bankers Club, and those folks are doing real damage.

Climate scientists, take note. Taking away the lab coat is an option.

You could spend your lives engaging with your bought denier "colleagues" — who would frankly like nothing better. Or you could dispatch them more quickly, as O'Brien has done, with strong "uncollegial" strokes, and move on to the next big job.

I personally like the latter choice; there should be a price for academic dishonesty in matters this important. But that's me.

GP

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Krugman on extracting a price for intellectual dishonesty (climate scientists, take note)

Just a small point, but with it I want to make a larger one.

■ The small point is about Paul Krugman and his slow path to calling out his professional fellows who ... lie. Used to be, professional courtesy seemed to quiet his tongue, making him assert his "disagreement" even as he says the facts are in another direction.

Let's say that differently. In the past, when fellow credentialed economists and related professionals misused their credentials to mislead — when they acted like lying right-wing operatives with an agenda — he would point out their errors but not their obvious motives.

That's been changing, however, and in "state of the Krugman" posts I've been taking note. Here's one of those posts from 2011:

In addition, [Krugman has been] getting to the point ... where he sees "Republican-leaning economists" as not just confused, but actual bad actors who "lend their credibility" to the party's delusions, and by extension, to the party's bad-faith ... political behavior.

That's quite an admission for a professional academic — to accuse your peers of intellectual dishonesty, not just idiotic (but forgivable) disagreement.

At that point Krugman wasn't ready to kick these people out of the profession, but he was getting close, sneaking up on it.

This week he got even closer in his discussion of Niall Ferguson's lies in the Newsweek cover-story take-down of Barack Obama (my emphases):

We’re not talking about [Ferguson's] ideology or even economic analysis here — just a plain misrepresentation of the facts, with an august publication letting itself be used to misinform readers.

And:

[M]aking false claims about readily checkable facts ... was unethical on his part[.]

"Unethical" is a strong accusation, PhD-to-PhD.

But Ferguson lent his professional cred to Newsweek to further a lying and cynical political hit. "Unethical" is a mild world for that; "hackish" would be closer.

The next step would be to kick Ferguson out of the profession so you don't have to keep debunking him, time after painful time. How do you accomplish that? By removing the one thing he needs to do cloaked operative work — his professional reputation.

If he's no longer in the profession, simply say so (it's not a crime; I'm no longer in many professions). Then just say what profession he is in.

My fun version goes like this:

"For a while now, Niall Ferguson has been making counter-factual assertions, all of which tend to produce political results, not intellectual ones.

"I can only conclude that he's decided to leave the academic profession under which he writes and enter another — that of 'Say-Anything Political Operative.'

I honor that change and wish him well in his new career. He is no longer a member of mine."

Following this, all references by me to Ferguson would be accompanied by a standard Homeric epithet. Instead of "grey-eyed Athena" he'd be "Ferguson the political operative." For example:

"I see that Ferguson the political operative has published another factless diatribe in The Economist. I counted seven attempts to mislead. Have I missed one?

"In other news, zombie-eyed Paul Ryan has cited Ferguson the political operative in support of raising taxes on kittens and dogs. How nice."

I joke, of course, but it's really pretty simple. If a so-called "professional" won't act like one, say so. It's only the truth, which is more than you're getting from them.

■ Which leads me to fact-challenged climate-denial "scientists" on the take. Why should they not get the same treatment I would give Ferguson (above)?

It's one thing to constantly debunk them; this is happening now. But that pretends they're honest actors. Why not just say, in words of your choosing:

"You're not a professional scientist; you've become something else. The discussion no longer includes you."

If the grown-ups in the climate profession take this advice, they'll get two benefits. One, they'll clear the fog from the room, allowing for honest scientific debate. How helpful is that?

And two, they will hasten work that needs to be done before a life-changing deadline occurs — 12°F baked-in warming and no way back. It will be a whole lot easier to "unconfuse the people" about their choices without all that faux-science noise.

The way to remove that noise (I'm using the term in a "signal-to-noise ratio" sense) is to discredit them professionally, marginalize them, within the community and in the media they so depend on to do their damage.

This executes prong four of our five-pronged solution. They keep their money from Heartland, but you take away their lab coat, their place at the table.

After all, it was their choice to leave the profession for better pay; all the reputable scientists need do is ... say so.

UPDATE: A complete list of climate series pieces is available here:
The Climate series: a reference post.

GP

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Krugman explains what's in the Ryan plan

In the interest of keeping you informed, I bring you the Professor, briefly back from vacation, to offer the low-down on Paul Ryan's budget plan.

You've probably heard it vilified. You've probably not heard it explained.

According to Krugman, the Ryan budget has two phases, the first ten years, prior to the conversion of Medicare to VoucherCare, and the years after that conversion.

Krugman on the first ten years (all emphasis mine):

In the first decade, the big things are (i) conversion of Medicaid into a block grant program, with much lower funding than projected under current law and (ii) sharp cuts in top tax rates and corporate taxes.

Is this a deficit-reduction program? Not on the face of it: it’s basically a tradeoff of reduced aid to the poor for reduced taxes on the rich, with the net effect of the specific proposals being to increase, not reduce, the deficit.

How does Ryan get to claim that the deficit will be reduced in this phase? "Magic asterisks" — assertions that can't possibly be true, but which everyone accepts anyway:

First, he insists that the tax cuts won’t reduce revenue, because they’ll be offset with unspecified “base-broadening”.

"Base-broadening" means broadening the tax base (taxing more things and/or closing loopholes). Right; lift your glass and say "Never gonna happen."

Second, there are large assumed cuts in discretionary spending relative to current policy[.]

Both of these assertions (magic asterisks) were made without the hint of a shred of a list showing what would be done to achieve them. That's what makes the asterisks magic; like Tinker Bell, you just gotta believe.

After the first ten years, VoucherCare starts to kick in, which transfers a whole lot of medical costs back to Granny (and all of the suckers who voted for him). But the plan is still not a deficit-reduction plan unless there are major cuts to ... ready? ... the military:

[M]uch of the supposed deficit reduction comes not from Medicare but from further cuts in discretionary spending [which eventually falls] to 3.5 percent of GDP ... this number includes defense, which is currently around 4 percent of GDP.

Of course these are just lies to fool the eagerly-fooled press and the right-wing rubes. The plan's proponents know these are just assertions.

All you need to know? Ryan proposes:

[S]lashing Medicaid, cutting taxes on corporations and high-income people, and replacing Medicare with a drastically less well funded voucher system.

It's the asterisks that make this look like "deficit reduction."

GP

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Ryan was chosen to "exploit the gullibility and vanity of the news media"

That's Paul Krugman, writing from an undisclosed location (vacation). Emphasis and paragraphing mine:

So, let me clarify what I believe is really going on in the choice of Paul Ryan as VP nominee.

It is not about satisfying the conservative base, which was motivated anyway by Obama-hatred; it is not about refocusing on the issues, because R&R are both determined to avoid providing any of the crucial specifics about their plans.

It is — as Jonathan Chait also seems to understand — about exploiting the gullibility and vanity of the news media, in much the same way that George W. Bush did in 2000.

Read the rest; there's quite a bit more. I think he makes his point.

Just wanted to add this data point to the discussion. Will this be the worst year of Mitt Romney's life? If so, I wouldn't want to be the first company Bain Capital "acquires" in 2013 — or the first dog that Romney "acquires."

GP

To follow or send links: @Gaius_Publius
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Bush-era holdover FHFA chief refuses to implement Obama homeowner mortgage forgiveness

This story comes to us via Paul Krugman.

Edward DeMarco, acting director of the FHFA (Federal Housing and Finance Agency) and a Bush-era holdover, has refused a request from the Obama administration to implement a program of debt relief for underwater mortgages.

FHFA is the controlling agency for Fannie Mae and Freddie Mac, "the government-sponsored lenders that were effectively nationalized in the waning days of the George W. Bush administration."

In other words, a Bush-appointee (and "civil servant" or non-political jobholder) is refusing to implement administration economic policy that offers debt forgiveness (a form of bailout) to someone other than banks.

As Krugman says elsewhere, "Fire Ed DeMarco. Do it now."

There are many angles to this story. Let's unpackage them, starting with why debt matters in the current crisis.

■ Personal debt (economists call it "debt overhang") is one of the main reasons our economy is not recovering. As I noted here:

[W]hen all the women who wanted jobs had gotten them ... our "prosperity" became debt-driven. That period lasted until, oh, yesterday (ok, 2008). By my count, that's 20-plus years of debt intake. Clearing that debt is a job that has to be done. Starting now is a very good thing.

How long will it take to clear 20 years of debt? If it "only" takes ten years, we'll have gotten off lightly — and it will feel like forever.

Also this, from the same piece:

We won't have a real recovery until that debt is either paid off or destroyed (via bankruptcy, forgiveness, or some other form of debt-clearing). ...

Think of household debt as a hole that has to be filled (with money) before big-screen spending can resume. The ratio of "debt relative to income" is a key metric in recovery of the consumer economy. The point at which debt-burdened people "feel" unburdened enough to start spending — that's when their personal economy recovers.

In other words, no recovery without debt reduction in some form. And the slow way — making every banker whole in a depressed jobless economy — can be slow the point of "never gonna happen." Personal debt must be cleared by some faster means.

■ The barriers to clearing personal debt are many. They include:

1. Republican desire to kill the economy in order to recapture the White House.
   
   
2. The desire of both Democratic and Republican elites (office holders and power brokers) to make sure their paymasters (sorry, our bankers) don't lose a dime.
   
   
3. The desire of the rubes (sorry, media-led American voters) to make sure no "undeserving" person gets one federal cent that a rube might otherwise pocket for himself.

About the first, need any more be said?

About the second, Krugman notes this about the Obama administration's debt-relief policy:

Unfortunately, the administration’s initial debt relief efforts were ineffectual: Officials imposed so many restrictions to avoid giving relief to “undeserving” debtors that the program went nowhere.

About the third, as soon as Lyndon Johnson–created welfare programs benefited dark people, white America rebelled. From Nixon's "southern strategy" to Reagan's "welfare queens" to Clinton's "welfare reform" — the War on Poverty quickly became a war on the poor. To thunderous bipartisan applause.

■ The Obama administration has apparently seen the light, or at least some of it. Krugman again:

More recently ... the administration has gotten a lot more serious about the [personal debt] issue. And the obvious place to provide debt relief is on mortgages owned by Fannie Mae and Freddie Mac ...

The idea of using Fannie and Freddie has bipartisan support. Indeed, Columbia’s Glenn Hubbard, a top Romney adviser, has called on Fannie and Freddie to let homeowners with little or no equity refinance their mortgages, which could sharply cut their interest payments and provide a major boost to the economy.

The Obama administration supports this idea and has also proposed a special program of relief for deeply troubled borrowers.

That administration support involves Tim Geithner and the Treasury Department. Krugman from a different source:

Treasury Department [has requested that FHFA] offer debt relief to troubled homeowners ... backed by an offer by Treasury to pay up to 63 cents to the FHFA for every dollar of debt forgiven.

But DeMarco, acting head of FHFA, has refused the offer. And that's where things stand. For Krugman, this is unacceptable.

[T]here is simply no way that it makes sense for an agency director to use his position to block implementation of the president’s economic policy, not because it would hurt his agency’s operations, but simply because he disagrees with that policy.

■ Who is Ed DeMarco and why is he acting this way?

He’s a civil servant who became acting director of the housing finance agency after the Bush-appointed director resigned in 2009. He is still there, in the fourth year of the Obama administration, because Senate Republicans have blocked attempts to install a permanent director. And he evidently just hates the idea of providing debt relief.

He's a Bush holdover (a kind of embed) who ended up acting director because of Mitch McConnell's obstructionism. If he can't be fired, he can certainly be replaced at the start of Obama's second term via a recess appointment, something Krugman strongly advocates.

As to why this refusal to act, Krugman and I differ. He puts all the blame on the aforementioned Senate Republicans, with some justification.

I put the blame on Obama, for not clearing out the embeds years ago — apparently not even wanting to.

And now that he has finally decided to offer a dollop of non-banker bailout (albeit timed for election season), his four-year indulgence of Ed DeMarco has bit him hard.

■ Will DeMarco get away with it? I'm going to guess Yes, though I could be wrong. Even though he's likely doing R-party bidding (Krugman is right about that), his defense will appeal to point three above — rube-hate of the "undeserving" — a position that Mr. Obama, I strongly suspect, fully shares.

How will we know if I'm right? See if DeMarco gets fired (that may or may not be possible). Then, after the election, see if he gets recess-appointed out. I think the odds may be in my favor.

UDPATE: David Dayen agrees that DeMarco won't be fired. Scroll down for the reason.

GP

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The epic heat wave: "Of course it's about climate change"

UPDATE: A complete list of climate series pieces is available here:
The Climate series: a reference post.
________

Sorry, did I just say "climate change"? I ought to say Climate Catastrophe. So should you.

This will be the first of many posts on climate catastrophe. In my opinion (but not only mine), we're passed the tipping point. And following Dornbusch's Law, having arrived, it's coming on faster than anyone expected.

Krugman, with the first bit (my paragraphing):

The Burning Land

I’ve been searching for something useful to say about the epic heat wave and drought afflicting U.S. agriculture, other than that this is the shape of things to come.

Of course it’s about climate change: a rising number of temperature records is exactly what you’d expect given an underlying upward trend in global temperatures.

He won't be alone saying this on these pages. I have a raft of pieces tabbed up and waiting to be posted.

Just for good measure, this via Michael J. Roberts, whom Krugman links to in a different post (my emphasis):

The weather fluctuates and heat waves happen. But the data show that the relative frequency of extreme events like this has increased tremendously. Just look a few posts back or read Jim Hansen's Climate Dice paper (PDF). Statistically speaking, this is almost surely climate change.

Hansen is one of the big guns in the field. I'll have more on Hansen's new paper later.

After a brief consideration of the (considerable) consequences, The Professor looks at the prospect for change in policy:

there is no prospect whatsoever of getting action.

So there.

The outcome isn't good. It's still not too late to at least mitigate the catastrophe (yes, the c-word again; get used to it).

But that would take a dictatorship which transfers massive wealth from the Koch Bros and their Ilk to alternative energy ... now.

You could do that via a huge tax. But as I said, a (friendly) dictatorship would be needed, because the political system is locked up, both parties are compromised and complicit, and the media, which should be messaging on behalf of the solution ... is messaging on behalf of the problem.

Screwed, to use a carpentry term.

We'll have more on climate catastrophe very soon — there are now lots of voices with lots of data.

Stay tuned. If nothing else, the Blame Game should be hours of entertainment all by itself. (I'm serious; I can't wait until the complicit start dancing and pointing — and asking for Federal money.)

GP

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We already have socialist health care in America, and it's the most expensive option

America already guarantees free health care (kind of) to everyone. By law, hospitals have to give care to everyone who enters their emergency departments.  From Voices of San Diego:

It's called EMTALA, short for the Emergency Medical Treatment and Active Labor Act. President Ronald Reagan signed it into law in 1986. It's regularly cited as one of the greatest unfunded mandates our government ever passed.

EMTALA mandates not only that hospitals take care of anyone who enters their emergency departments — anyone — but that they not discharge those patients unless they're safe and stable.

To recoup their losses, hospitals simply pass the costs to insurers, and the rest of us, through higher rates. Though some of that sounds like more justification for simply gouging the rest of us.

"To recoup their losses," Roberts wrote, "hospitals pass on the cost to insurers through higher rates, and insurers in turn pass on the cost to policy holders in the form of higher premiums."
And hence to me, as I gulp at our employees' health care bill.

The numbers really are brutal. In 2011, Sharp Healthcare had to give $287 million in so-called "uncompensated care." For Scripps, the number was $268 million. For UCSD? $80 million.
Uncompensated care is a bit of a misnomer. The hospitals don't just absorb that loss and pout. Not all of it.

They have people to pay. Doctors aren't cheap and their supply is controlled.

No, they pass those costs onto people with insurance. It's an unfair burden for employers committed to providing health care to their employees. It certainly doesn't make it easier to hire people.

The entire health care system in our country is one big ponzi scheme. The hospitals charge more for the uninsured, and more importantly, for the insured.  Hospitals can charge ridiculous rates and insurance companies, after negotiating them down to a less-but-still-ridiculous rate pay them.

For my recent cataract surgery, the charge to use the hospital facilities for the 20 minute surgery was $14,000 per eye. That's ridiculous. The insurance company got them "down" to $5000 an eye - again, just for the facilities, the surgeon and anesthesiologist was extra, as was the laser they used to cut my eye (that alone was $1100 out of my pocket, that I had to pay BEFORE they'd do the surgery).  That's an absurd amount to pay for cataract surgery, but I needed to see this particular doctor as I'm at a much higher risk of a detachment and blindness as a result of the cataract surgery, because of my past retinal problems.  And that's what the hospital charges.

I saw a video the other day of Krugman on CNBC in which he notes that if we simply got the cost of American health care down to the prices they charge in France, we'd likely solve our deficit problem.

Our problem is the cost of health care is bankrupting all of us.  And our healthcare system is so corrupt, so ponzi, so inbred, that it reinforces the high prices.

So while I'm willing to accept that a portion of the higher prices comes from having to pay the medical bills of the uninsured, that's not the only reason hospitals and doctors and insurance companies charge so much.  They charge so much, as the old joke goes, because they can. Read the rest of this post...

CNBC at its worse with Paul Krugman

If anyone wants to see just how offensive CNBC can be, you need to check out this episode from earlier in the week. If a sleazebag like Jamie Dimon was on the show, they'd all be getting in line to kiss his feet, much the way they do with the insufferable Jack Welch who padded his retirement from GE quite comfortably. (Welch is now in the business of giving his name to a for-profit school. The for-profit school industry has been under attack recently for leaving students in debt without any real skills, but that's another story.)

Maybe it's because Krugman has been right about the economy so much more than CNBC has been in recent years. In their defense, it's hard to see what's going on when you're is under the table giving head to the goons of Wall Street who ruined the economy.

Krugman holds his own and gets in a lot of great points including the costs of the French healthcare system compared to the US, but the CNBC crew is ugly. It's highly offensive but the Wall Street crowd gets off on abusive behavior. Especially when they're wrong and the other person has been right all along. Read the rest of this post...

Krugman: "Romney is in very serious trouble"

I've been arguing for a while that this is a Done Deal Election — partly because I agree and partly to avoid the Left-on-Left foodfight that seems to pop up during elections. To me, that seems a total waste of a coalition-building opportunity.

Now Paul Krugman weighs in, and offers evidence. His bottom line is in my headline — "Romney is in very serious trouble."

The Professor (my emphasis and paragraphing:

Plutocrats on Parade

Robin Wells has a very good essay on the Romney phenomenon in the Guardian. After all the whining over “class warfare”, the GOP has more or less forced an election that really is about the very rich versus everyone else — and the Romney supporters are so insulated by their wealth that they can’t even see the problem.

I would just chime in that I agree with Robin that Romney is in very serious trouble.

Think of the pattern that’s accumulating: the obfuscation over the Bain record on jobs, outsourcing, and all that, the mysterious offshore accounts (and the magical $100 million IRA), the stonewalling on past tax records, and now his insistence that he was no longer working at a company that continued to list him as CEO and pay him lots of money. ...

This could be famous last words, but it looks to me as if Romney is in the process of getting defined — and his party won’t like the results.

And for good measure, wait till this gets out. Remember the "nail ladies"?

So I was curious: what do “nails ladies” earn? The answer, according to the BLS Occupational Employment Statistics, is that in 2010 the mean annual wage of Manicurists and Pedicurists(395092) was $21,760.

Among other things, this means that nails ladies probably face a higher marginal effective tax rate than Romney donors.

After evidence that Romney is risking felony charges, throwing the "nail ladies" back in his face seems almost symbolic. He didn't even make the comment.

But then, what's an election anyway, but a heavily-financed wealth transfer to the big media companies, in exchange for broadcasting symbols that are almost never accurate?

So who knows — maybe it's the nail ladies who will finally sink him. He's close to sunk, it seems, if Krugman is right.

Why do I write this? Partly because I think he's right, The Professor, and partly to get progressives focused on the other important business at hand — what to do when Obama, Bane of Bain reverts to Obama, Friend of the Corporate Coup.

If Krugman is right, that's coming, and soon.

Did I mention, "Hope is not a plan"? Hope so.

We need a plan, I think, for December 2012 and beyond, and we need it fast. There's going to be a lot of work to do to head off the assault I greatly fear is coming.

Mes centimes,

GP

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Paul Krugman speaks at Netroots Nation (video)

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Krugman the radical: "The drive for austerity was about using the crisis, not solving it"

The State of the Krugman is radical.

This is what it looks like when someone with something like mainstream cred looks behind the curtain — in public. You get a narrative, an explanation, that (a) makes perfect sense, and (b) runs exactly counter to the "straight" (mainstream) analysis — what "everyone knows" to be true.

"Everyone knows" that the drive for austerity is sincere, but wrong-headed. Wrong, says the Professor. The goal of austerity is to destroy.

Krugman is in the U.K. at the moment and asking everyone he can find "why austerity now?" (my emphasis everywhere):

Over the past few days, I’ve posed that question to a number of supporters of the government of Prime Minister David Cameron, sometimes in private, sometimes on TV. And all these conversations followed the same arc: They began with a bad metaphor and ended with the revelation of ulterior motives.

I'll leave you to read about the bad metaphor. It's an excellent, clear explanation of why a national economy is the opposite of a household economy.

Let's jump instead to those "ulterior motives":

[W]hen you push “austerians” on the badness of their metaphor, they almost always retreat to assertions along the lines of: “But it’s essential that we shrink the size of the state.”

Again, factual, so far. Now the radical analysis:

So the austerity drive in Britain isn’t really about debt and deficits at all; it’s about using deficit panic as an excuse to dismantle social programs. And this is, of course, exactly the same thing that has been happening in America. ... the direction of policy is the same [in the U.S. and the U.K.] — and so is the fundamental insincerity of the calls for austerity.

The big question here is whether the evident failure of austerity to produce an economic recovery will lead to a “Plan B.” Maybe. But my guess is that even if such a plan is announced, it won’t amount to much. For economic recovery was never the point; the drive for austerity was about using the crisis, not solving it. And it still is.

Excellent work, sir. Blessings on you and your Times column inches.

I would just add this for our readers. Think a little down the road.

If the plan of Our Betters is to not-solve the crisis (see? I told you the analysis was radical), what will the country look like when they achieve their real goal — a big-time economic crisis during which the safety net is devastated?

Tick-tick-tick.

GP

To follow or send links: @Gaius_Publius
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Paul Krugman on why austerity is a recipe for ten more years of a Depression.

Krugman says we're still in a classic Depression.

Paul Krugman on Bill Maher:

We are in a depression. We are actually in a classic depression. A depression is when nobody wants to spend. Everybody wants to pay down their debt at the same time. Everybody is trying to pull back, either because they got too far into debt, or because if they’re a corporation, they can’t sell because consumers are pulling back. The thing about an economy is that it fits together. My spending is your income. Your spending is my income, so if we all pull back at the same time, we’re in a depression. The way to get out of it is for somebody to spend so that people can pay down their debt, so that we don’t have a depression. So that we have a chance to work out of whatever excesses we had in the past, and that somebody has to be the government.

We ended the Great Depression with a great program of government spending for an unfortunate reason. It was known as World War II…but when the war broke out in Europe, and we began our buildup that Great Depression that had been going on for ten years. People thought it would go on forever. Learned people stroked their chins and said there are no quick answers. In two years, employment rose 20%. That’s the equivalent of 26 million jobs today, the depression was over. We had full employment, and it never came back, or it didn’t come back until 2008, because people managed to pay down those debts, and we had a durable recovery.

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Krugman calls out Ben Bernanke—"he's been assimilated by the Borg"

This is another state of the Krugman post. You and I, flies on the insider walls, know that Ben Bernanke is a full professor at Our Betters U. — in other words, deeply involved in running his chunk of the State for the lords and ladies who govern us. Like all retainers Bernanke works for a living, but as Chairman of the Fed he's very high up.

Paul Krugman is now acknowledging the same thing, and becoming less and less collegial in the process. Why do I say "less collegial"? Because Krugman and Bernanke are fellow academics; in fact, Bernanke used to be Krugman's boss at Princeton.

As you read the following, remember that the Fed has twin legal mandates — low inflation (for the money crowd) and low unemployment (for the masses). In reality, of course, the Fed works only for the money crowd, keeping their pockets lined.

Krugman recently called him on that in the magazine piece linked below, and Bernanke has responded. As Krugman tells the tale [bracketed inserts mine]:

Ben Bernanke responds to my magazine piece; as I see it, in effect he declared that he has been assimilated by the Fed Borg:

I guess the, uh, the question is, um, does it make sense to actively seek a higher inflation rate in order to, uh, achieve a slightly increased pace of reduction in the unemployment rate? ...

To risk that asset [by "asset" he means "low inflation," though he's actually referring to the money crowd's well-lined pockets], for, what I think would be quite tentative and, uh, perhaps doubtful gains [by "gains" he means "work and food for the masses"], on the real side would be an unwise thing to do [because the world is ruled by "wisdom" and not, say, "greed"].

Notice the framing — “a slightly increased pace of reduction in the unemployment rate”. It’s basically an assertion that we’re doing all right[.] ... Disappointing stuff.

In other words, Bernanke is saying, Why trade a known-bad like inflation for something as ephemeral as improved employment? After all, my friends are fully employed right now.

So much for Bernanke. But again, this post isn't about the Ben — he's a known made man already. This is about the Krugman, who dares to say so using his Times blog-inches.

Thanks, Professor. And welcome. Soon you'll be as radical as you were in 2003, when Bush was king and we were still naïve.

GP

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The Occupy Handbook, coming next week

Via Paul Krugman, we learn about what promises to be an excellent new book of essays, background, and analysis — The Occupy Handbook.

The work has 66 contributors include, including these luminaries:

• Paul Krugman
• Robin Wells
• Michael Lewis
• Robert Reich
• David Graeber
• Nouriel Roubini
• Matt Taibbi
• David Cay Johnston
• Martin Wolf
• Robert Shiller
• Peter Diamond
• Emmanuel Saez
• Amy Goodman
• Barbara Ehrenreich

Plus a great many others.

From the editorial description:

The Occupy Handbook is a source for understanding why 1% of the people in America take almost a quarter of the nation's income and the long-term effects of a protest movement that even the objects of its attack can find little fault with [sic].

Roger Lowenstein blurbs:

"More than a scrapbook of the recent Occupy Wall Street movement, The Occupy Handbook, a compilation by our best journalists, thinkers and economists, puts the story of America's revolt against inequality in welcome historical perspective.

From the barricades of 1848, to the barrios of modern Chile, to the improbable campgrounds thrown together in the shadows of New York skyscrapers, the Handbook examines the budding question of whether democracy can foster a more equal, and also a more prosperous, society.

Insightful pieces by Gillian Tett, John Cassidy, Bethany McLean and many more prepare you to think about the next outbreak of outrage and activism-which is only a matter of time."

The book will be available just in time for tax-deadline-day, April 17. You can pick it up at a local independent bookstore, or from Amazon.

Occupationally yours,

GP

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Why health insurance isn't broccoli (the short version)

Paul Krugman spends his precious Times inches on the Supreme Court ACA-broccoli debate. Along the way he has a nice tight explanation about why the two aren't comparable.

He writes (my emphasis):

Let’s start with the already famous exchange in which Justice Antonin Scalia compared the purchase of health insurance to the purchase of broccoli, with the implication that if the government can compel you to do the former, it can also compel you to do the latter. That comparison horrified health care experts all across America because health insurance is nothing like broccoli.

Why? When people choose not to buy broccoli, they don’t make broccoli unavailable to those who want it. But when people don’t buy health insurance until they get sick — which is what happens in the absence of a mandate — the resulting worsening of the risk pool makes insurance more expensive, and often unaffordable, for those who remain. As a result, unregulated health insurance basically doesn’t work, and never has.

That's pretty straight-forward. As to how to fix the problem, Krugman clearly sees the options:

There are at least two ways to address this reality — which is, by the way, very much an issue involving interstate commerce, and hence a valid federal concern. One is to tax everyone — healthy and sick alike — and use the money raised to provide health coverage. That’s what Medicare and Medicaid do. The other is to require that everyone buy insurance, while aiding those for whom this is a financial hardship.

Krugman doesn't have a SCOTUS ACA prognosis, but he does say that:

it’s hard not to feel a sense of foreboding — and to worry that the nation’s already badly damaged faith in the Supreme Court’s ability to stand above politics is about to take another severe hit.

Yes, Professor. We all have that foreboding. We've been forebode before.

GP

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Plain speaking about ALEC from Paul Krugman

This is a "state of the Krugman" post.

We've noticed recently that the Professor has been calling out his fellow economists for "playing for Team Republican" — a bold rejection of the collegial conventions that bind this profession (to each other, and also to hold their tongues).

Now he takes on ALEC, the American Legislative Exchange Council — command-and-control for the Movement Conservative war in the states.

And yes, he says "movement-conservative" in the same sense you and I mean it. This is an excellent read (my emphasis and some reparagraphing):

Lobbyists, Guns and Money

Florida’s now-infamous Stand Your Ground law, which lets you shoot someone you consider threatening without facing arrest, let alone prosecution, sounds crazy — and it is. ... But similar laws have been pushed across the nation, not by ignorant yahoos but by big corporations.

Specifically, language virtually identical to Florida’s law is featured in a template supplied to legislators in other states by the American Legislative Exchange Council, a corporate-backed organization that has managed to keep a low profile even as it exerts vast influence[.] ...

What is ALEC? Despite claims that it’s nonpartisan, it’s very much a movement-conservative organization, funded by the usual suspects: the Kochs, Exxon Mobil, and so on.

Unlike other such groups, however, it doesn’t just influence laws, it literally writes them, supplying fully drafted bills to state legislators. In Virginia, for example, more than 50 ALEC-written bills have been introduced, many almost word for word. And these bills often become law.

No words were minced. He makes the case that:

ALEC isn’t so much about promoting free markets as it is about expanding crony capitalism. ... ALEC, even more than other movement-conservative organizations, is clearly playing a long game ... they’re about creating a political climate that will favor even more corporation-friendly legislation in the future.

The "long game" — ALEC isn't just about the wins, they're about the wins that create more wins.

Meanwhile, progressive are struggling with the "short game" — that first first-down at the 20 yard line. Take notes, kids; command-and-control beats haphazard and statement-making every time.

The state of the Krugman is "frosty and clear." Thank you, sir, for using your precious Times inches to shine light on this secret monster.

By the way, if you're curious about ALEC's corporate funding, OpenSecrets.org has the goods. For example:

Twenty-three corporations -- including AT&T, Exxon Mobil, Kraft, Coca-Cola and Koch Industries -- compose the consortium's "private enterprise board."

Click through; their report is fascinating.

GP

(To follow on Twitter or to send links: @Gaius_Publius)
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Krugman: So Greece has defaulted. What does that mean?

So the process has started. Here's the Professor (my emphasis and some reparagraphing):

So Greece has officially defaulted on its debt to private lenders. It was an “orderly” default, negotiated rather than simply announced, which I guess is a good thing. Still, the story is far from over. Even with this debt relief, Greece — like other European nations forced to impose austerity in a depressed economy — seems doomed to many more years of suffering.

And that’s a tale that needs telling. For the past two years, the Greek story has, as one recent paper on economic policy put it, been “interpreted as a parable of the risks of fiscal profligacy.”

We've gone down that road before, the one about how Greece was bad bad bad and deserves what it gets — just like all the other struggling economies. Krugman covers that point again, then goes on to the consequences.

One is this:

[A]usterity in a slump doesn’t just inflict vast suffering. There is growing evidence that it is self-defeating even in purely fiscal terms, as the combination of falling revenues due to a depressed economy and worsened long-term prospects actually reduces market confidence and makes the future debt burden harder to handle.

You have to wonder how countries that are systematically denying a future to their young people — youth unemployment in Ireland, which used to be lower than in the United States, is now almost 30 percent, while it’s near 50 percent in Greece — are supposed to achieve enough growth to service their debt.

Krugman has answers to the headline question. First, about Greece:

[Greece and Ireland] had and have no good alternatives short of leaving the euro, an extreme step that, realistically, their leaders cannot take until all other options have failed — a state of affairs that, if you ask me, Greece is rapidly approaching.

Then, about America:

[I]f you want to know who is really trying to turn America into Greece ... it’s the people demanding that we emulate Greek-style austerity even though we don’t face Greek-style borrowing constraints, and thereby plunge ourselves into a Greek-style depression.

In other words, Greece is still on target for leaving the euro, which will occur just as soon as the crisis is so bad that a euro-exit can't make it worse.

As to ourselves, timid stimulus may keep us limping along, but the Republican party really does want to take down the economy — it benefits their owners (Our Betters) and it damages Obama. Win-win, as they say.

Let's see how that plays out.

GP

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Krugman on whether the rich really need the rest of us

Paul Krugman has a nice column on Republican attitudes on education, contrasting "social conservative" Santorum's approach with "economic conservative" Romney's. I'll let you go read; it's excellent.

But I want to point out the following (my emphasis):

But what about people like Mr. Romney? Don’t they have a stake in America’s future economic success, which is endangered by the crusade against education? Maybe not as much as you think.

After all, over the past 30 years, there has been a stunning disconnect between huge income gains at the top and the struggles of ordinary workers. You can make the case that the self-interest of America’s elite is best served by making sure that this disconnect continues, which means keeping taxes on high incomes low at all costs, never mind the consequences in terms of poor infrastructure and an undertrained work force. ...

So whenever you hear Republicans say that they are the party of traditional values, bear in mind that they have actually made a radical break with America’s tradition of valuing education. And they have made this break because they believe that what you don’t know can’t hurt them.

I've asked many times — Do the rich really need the rest of us?

So which is it? Have the super-rich decided they don't need America any more? Or are they just so in love with Supply Side Jesus that they don't know they're burning the house down with them inside?

In other words, when this country becomes a faltering second-world economy with a useful first-world military, have the super-rich prepared their financial escape? Do the rich really need the rest of us?

I'm not alone. Over at Digby's joint, David Atkins wonders much the same thing (emphasis added):

The underinvestment in public education is very intentional. Thanks largely to Grover Norquist and his buddies, it now costs more to attend a public university in California than it does to attend Harvard. The elites don't really need that many skilled workers in America. They need some, but not that many. A lot of the needed skilled workers can come from overseas immigration. The vast bulk of the American population is much more useful to them as desperate, unskilled labor.

I don't think they think we're needed. As the Brazilian and Indian and Chinese (etc.) consumer class comes online, consumers in America (our only value to them) can be retired. At that point, we're very Old World, serving the new.

I hope hope hope I'm wrong. But if I'm not, welcome to the backside of history, my fellow Americans. Brought to you by the very very rich and the politicians who serve them.

If it's any consolation, the Brits who emerged from the Great War and saw a new American world, they preceded you. The Romans of the fourth century weren't as lucky — they didn't speak Goth.

GP

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Krugman on Cato integrity—they were "insufficiently hackish" for the Koch Bros

I can't resist: Schadenfreude, c'est moi. The Professor delivers the shiv:

Via Brad DeLong, I see that the Kochs are trying to take over Cato, which they view as insufficiently hackish.

They must have high standards in this regard; after all, Cato is, among other things, a place that had something called the Project on Social Security Privatization, which it renamed the Project on Social Security Choice when it turned out that “privatization” polled badly — and tried to purge its records, to make it look as if they had never used the word privatization.

There's more, of course, but why bother?

Is Cato a client state that sometimes does good work, and only sometimes?

Do you still need to ask?

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