Krugman et al

[Haroun Al Poussah]

Fraternity of Failure - Paul Krugman
MAY 15, 2015

This story is included with an NYT Opinion subscription.

Jeb Bush wants to stop talking about past controversies. And you can see why. He has a lot to stop talking about. But let’s not honor his wish. You can learn a lot by studying recent history, and you can learn even more by watching how politicians respond to that history.

The big “Let’s move on” story of the past few days involved Mr. Bush’s response when asked in an interview whether, knowing what he knows now, he would have supported the 2003 invasion of Iraq. He answered that yes, he would. No W.M.D.? No stability after all the lives and money expended? No problem.

Then he tried to walk it back. He “interpreted the question wrong,” and isn’t interested in engaging “hypotheticals.” Anyway, “going back in time” is a “disservice” to those who served in the war.

Take a moment to savor the cowardice and vileness of that last remark. And, no, that’s not hyperbole. Mr. Bush is trying to hide behind the troops, pretending that any criticism of political leaders — especially, of course, his brother, the commander in chief — is an attack on the courage and patriotism of those who paid the price for their superiors’ mistakes. That’s sinking very low, and it tells us a lot more about the candidate’s character than any number of up-close-and-personal interviews.

Wait, there’s more: Incredibly, Mr. Bush resorted to the old passive-voice dodge, admitting only that “mistakes were made.” Indeed. By whom? Well, earlier this year Mr. Bush released a list of his chief advisers on foreign policy, and it was a who’s-who of mistake-makers, people who played essential roles in the Iraq disaster and other debacles.

Seriously, consider that list, which includes such luminaries as Paul Wolfowitz, who insisted that we would be welcomed as liberators and that the war would cost almost nothing, and Michael Chertoff, who as director of the Department of Homeland Security during Hurricane Katrina was unaware of the thousands of people stranded at the New Orleans convention center without food and water.

In Bushworld, in other words, playing a central role in catastrophic policy failure doesn’t disqualify you from future influence. If anything, a record of being disastrously wrong on national security issues seems to be a required credential.

Voters, even Republican primary voters, may not share that view, and the past few days have probably taken a toll on Mr. Bush’s presidential prospects. In a way, however, that’s unfair. Iraq is a special problem for the Bush family, which has a history both of never admitting mistakes and of sticking with loyal family retainers no matter how badly they perform. But refusal to learn from experience, combined with a version of political correctness in which you’re only acceptable if you have been wrong about crucial issues, is pervasive in the modern Republican Party.

Take my usual focus, economic policy. If you look at the list of economists who appear to have significant influence on Republican leaders, including the likely presidential candidates, you find that nearly all of them agreed, back during the “Bush boom,” that there was no housing bubble and the American economic future was bright; that nearly all of them predicted that the Federal Reserve’s efforts to fight the economic crisis that developed when that nonexistent bubble popped would lead to severe inflation; and that nearly all of them predicted that Obamacare, which went fully into effect in 2014, would be a huge job-killer.


Given how badly these predictions turned out — we had the biggest housing bust in history, inflation paranoia has been wrong for six years and counting, and 2014 delivered the best job growth since 1999 — you might think that there would be some room in the G.O.P. for economists who didn’t get everything wrong. But there isn’t. Having been completely wrong about the economy, like having been completely wrong about Iraq, seems to be a required credential.

What’s going on here? My best explanation is that we’re witnessing the effects of extreme tribalism. On the modern right, everything is a political litmus test. Anyone who tried to think through the pros and cons of the Iraq war was, by definition, an enemy of President George W. Bush and probably hated America; anyone who questioned whether the Federal Reserve was really debasing the currency was surely an enemy of capitalism and freedom.

It doesn’t matter that the skeptics have been proved right. Simply raising questions about the orthodoxies of the moment leads to excommunication, from which there is no coming back. So the only “experts” left standing are those who made all the approved mistakes. It’s kind of a fraternity of failure: men and women united by a shared history of getting everything wrong, and refusing to admit it. Will they get the chance to add more chapters to their reign of error?

nyt

[Haroun Al Poussah]

Paul Krugman really hurt Alan Greenspan's feelings

Seth Lipsky at The Wall Street Journal reports that Alan Greenspan, the former chairman of the Federal Reserve, has backed out of a conference on monetary policy this summer because of a scathing blog post written by Paul Krugman in The New York Times.

The conference, organized by the American Principles Project, is meant to be a counter-conference to the Fed's annual retreat-cum-summit at Jackson Hole, Wyoming. According to the group, Greenspan bowed out because of a recent post by Krugman called "The Worst Ex-Chairman Ever."

Krugman has criticized Greenspan for his failure to recognize the housing bubble that led to the 2008 financial crisis, and his subsequent warnings that the central bank's stimulus efforts could lead to spiraling inflation. In his post, Krugman also dinged the American Principles Project, saying it "combines social conservatism — it's anti-gay-marriage, anti-abortion rights, and pro-'religious liberty' — with goldbug economic doctrine."

fonte

[Lark]

Paul Krugman - New York Times Blog

Blinkers and Lies

Jeb Bush definitely did us a favor: in his attempts to avoid talking about the past, he ended up bringing back a discussion people have been trying to avoid. And they are, of course, still trying to avoid it — they want to make this just about the horserace, or about the hypothetical of “if you knew what we know now”.

For that formulation is itself an evasion, as Josh Marshall, Greg Sargent, and Duncan Black point out — each making a slightly different but crucial point.

First, as Josh says, Iraq was not a good faith mistake. Bush and Cheney didn’t sit down with the intelligence community, ask for their best assessment of the situation, and then reluctantly conclude that war was the only option. They decided right at the beginning — literally before the dust of 9/11 had settled — to use a terrorist attack by religious extremists as an excuse to go after a secular regime that, evil as it was, had nothing to do with that attack. To make the case for the splendid little war they expected to fight, they deliberately misled the public, making an essentially fake case about WMD — because chemical weapons, which many believed Saddam had, are nothing like the nukes they implied he was working on — and insinuating the false claim that Saddam was behind 9/11.

Second, as Greg says, even this isn’t hindsight. It was quite clear at the time that the case for war was fake — God knows I thought it was glaringly obvious, and tried to tell people — and fairly obvious as well that the attempt to create a pro-American Iraq after the invasion was likely to be an expensive failure. The question for war supporters shouldn’t be, would you have been a supporter knowing what you know now. It should be, why didn’t you see the obvious back then?

Finally, and this is where Atrios comes in, part of the answer is that a lot of Very Serious People were effectively in on the con. They, too, were looking forward to a splendid little war; or they were eager to burnish their non-hippie credentials by saying, hey, look, I’m a warmonger too; or they shied away from acknowledging the obvious lies because that would have been partisan, and they pride themselves on being centrists. And now, of course, they are very anxious not to revisit their actions back then.

Krugman

[Lark]

The Wall Street Journal’s absurd Paul Krugman hypocrisy: No one is better at “character assassination” than them
The Wall Street Journal accuses Krugman of "character assassination" -- funny, given their long history of it

So according to the Wall Street Journal, former Fed Chairman Alan Greenspan got his feelings hurt last week because Paul Krugman criticized him on his blog. And the Journal is just livid about it. You see, the act of criticism is now tantamount to censorship:

To the list of questions the left has sought to place off limits to open debate—global warming, same-sex marriage, campaign finance, abortion—add a startling new topic: monetary reform. And what a scalp has just been claimed.

Alan Greenspan, who was chairman of the Federal Reserve for nearly two decades, has pulled out of a conference this summer on monetary reform. He did so May 8, two days after the New York Times published a blog post by Paul Krugman labeling Mr. Greenspan the Fed’s “worst ex-chairman ever.”

Mr. Krugman was set off by word that Mr. Greenspan had been billed as one of the speakers for a counter-conference that is set to take place in Jackson Hole, Wyo., in late August, as the Federal Reserve holds its annual retreat there. Mr. Greenspan declined to comment on why he has withdrawn, but the conference’s sponsor, the American Principles Project, confirmed to me that he did so in the wake of Mr. Krugman’s attack.

The humanity! Je suis Alan Greenspan.

Apparently the most shocking thing about Krugman’s attack was the terribly personal nature of it. In fact, it was nothing short of character assassination: Krugman “derided the former Fed chairman for worrying about inflation, for generally trusting markets, and for voicing opinions on the central bank he once led,” wrote the author of the piece, Seth Lipsky.

But it wasn’t just Greenspan whose honor he so crudely besmirched:

Mr. Krugman also attacked the American Principles Project, whose chairman is a conservative Catholic, Sean Fieler. “The group,” he writes, “combines social conservatism—it’s anti-gay-marriage, anti-abortion rights, and pro-‘religious liberty’—with goldbug economic doctrine.”

Adds Mr. Krugman: “The second half of this agenda may be appealing to Greenspan, a former Ayn Rand intimate—as Paul Samuelson remarked, ‘You can take the boy out of the cult but you can’t take the cult out of the boy.’ But the anti-gay stuff? And helping these people attack his former colleagues?”

Somebody pass the smelling salts, stat. What could be more insulting than putting the term “religious liberty” in quotes? (Why he might as well have accused the Catholic church of once harboring pedophile priests!) Belittling Alan Greenspan for attacking his former colleagues when he was just going to … attack his former colleagues is obviously beyond the pale.

The good news is that the right wing is fighting for civic decency, particularly the columnists and editorialists of the Wall Street Journal, which goes out of its way to take the high road. Here’s a perfect example from one of their columnists last week:

I wonder if any aspirant for the presidency except Hillary Clinton could survive such a book. I suspect she can because the Clintons are unique in the annals of American politics: They are protected from charges of corruption by their reputation for corruption. It’s not news anymore. They’re like . . . Bonnie and Clyde go on a spree, hold up a bunch of banks, it causes a sensation, there’s a trial, and they’re acquitted. They walk out of the courthouse, get in a car, rob a bank, get hauled in, complain they’re being picked on—“Why are you always following us?”—and again, not guilty. They rob the next bank and no one cares. “That’s just Bonnie and Clyde doing what Bonnie and Clyde do. No one else cares, why should I?”

That’s Peggy Noonan ,of course, another civility cop who routinely smears the reputations of Democratic politicians with all the finesse of a 15th century House of Borgia hit man, and then whines whenever someone on the other side decides to fight fire with fire. This has literally been going on for decades. Indeed, the Wall Street Journal has pretty much defined the genre of high end character assassination for decades now. Famously, they targeted former Clinton aide Vince Foster several times, in “a string of highly critical editorials in the Wall Street Journal in June and July 1993,” as the Washington Post put it, which “ left Foster even more ‘distraught.’”

Suffering from clinical depression, Foster killed himself shortly thereafter. And then the right wing media, the congress and much of the mainstream political press which blindly followed them as if they were Pied Pipers, spent years and many millions of dollars torturing the family with absurd allegations and investigations into his death, some even suggesting that Hillary Clinton murdered him. (That included, among others, Rush Limbaugh, who has continued to make this insinuation in the years since. That would be the same Rush Limbaugh who Weekly Standard editor William Kristol once described as “almost a Wall Street Journal editorial page of the airwaves.”)

But that wasn’t the only lurid story the Wall Street Journal editorial page pimped during that era. There were many. This testimony from the floor of the House in 1994 recounts one specific incident of outrageous speculation:

A Wall Street Journal editorial in March chastised the “respectable press” for showing “little-to-no appetite for publishing anything about sex and violence” in Whitewater-related matters.

It proceeded to report that while working on a story for the New Republic about incestuous relationships between business leaders and politicos in Arkansas, writer L.J. Davis opened the door to his Little Rock hotel room and remembered next awakening face down on the floor with a hefty bump on his head and “significant” pages of his notes missing. The implication was that some sinister elements had tired to quash Davis’ piece.

But Davis soon admitted drinking at least four martinis that night. No pages were missing from his notebook, and he had no idea how he ended up on the floor. “I certainly wasn’t about to conclude that somebody cracked me on the head,” Davis said at the time.

The Journal concluded that Arkansas was “a congenitally violent place, full of colorful characters with stories to tell, axes to grind, and secrets of their own to protect.” They scolded their fellows in the media saying “the respectable press is spending too much time adjudicating what the reader has a right to know, and too little time with the old spirit of ‘stop the presses.’”

They listened and learned and eagerly gobbled up any tale that some obscure Arkansas con-man offered up and repeated it as if it were a recently unearthed Dead Sea scroll. This went on for years. As one sensational story after another was debunked by congressional investigations and special prosecutors, they would drop it and move on to yet another one.

The Journal wasn’t the only publication to traffic in these gothic melodramas, but it was one of the most proficient. In addition to the editorial and op-ed pages daily evisceration of everything Clinton, their star “investigative reporter” James B Stewart was obsessed with Whitewater and evidently spent hours trolling the backwoods of Arkansas for dirt. He wrote a book called “Blood Sport” in which he made the bold claim that Mrs Clinton was a criminal and would be indicted. Bob Somerby recounted his strange role a while back:

Published by Simon and Shuster in 1996 to the accompaniment of a multimedia publicity campaign, Stewart’s book “Blood Sport” claims to be the inside story of “the president and first lady as they really are.” Set forth as a sweeping narrative, it includes dramatized scenes and imaginary dialog purporting to represent the innermost thoughts of individuals whom the author had in some cases never met, much less interviewed.

“Scenes that Mr. Stewart could never have observed first hand,” complained New York Times reviewer Michiko Kakutani, “are recounted from an omniscient viewpoint. Mr. Stewart rarely identifies the sources for such scenes not does he take into account the subjectivity and often self-serving nature of memory. The reader never knows whether the quotes Mr. Stewart puts into the mouth of an individual…are from a first or second hand source.”

Arkansas writer Gene Lyons wrote a seminal piece for Harper’s, later turned into a book called “Fools for Scandal” in which he exposed the naivete of the political press, particularly the gullible Stewart’s “expose”.

LYONS (1996): But then came Stewart’s big book tour. For a while, you couldn’t turn on a TV talk show without seeing Mr. Pulitzer Prize. Nightline, Washington Week in Review, Charlie Rose, National Public Radio—the man was everywhere. And just about everywhere he went, Stewart made the same pitch. Blood Sport uncovered no big crimes in Whitewater, just a lot of deceit, bad character, and political opportunism. But surely, Ted Koppel urged during Stewart’s March 11, 1996 Nightline appearance, there was something. “What is it you would say,” Koppel asked, “if you were obliged, in fifteen or thirty seconds, to summarize what is troublesome about Whitewater and what will come back to haunt the Clintons?”

According to Somerby Stewart replied, “It is a crime to submit a false financial document.” He accused Hillary Rodham Clinton of filing a false financial statement to renew a Whitewater loan in 1987 and added that the First Lady’s guilt was “a question for a prosecutor and a jury to decide.”

(As anyone who’s read “The Hunting of the President” by Lyons and Joe Conason knows, Stewart made a truly embarrassing error by failing to check the second page of the document she supposedly falsified. And needless to say the First Lady was never indicted.)

The Wall Street Journal clutching its pearls about Paul Krugman crucifying poor Alan Greenspan by complaining about his policies and questioning the company he keeps is really rich. Yes, those hit jobs on the Clintons from the 90s were a long time ago. But between Peggy Noonan and her tag team partner Karl “Bush’s Brain” Rove, you can be sure they’re getting ready to take another stab at it. After all, all they have to do is pick up a sharp shard from the remains of the journalistic glass house that’s lying at their feet.

salon

[Lark]

Errors and Lies
MAY 18, 2015

Surprise! It turns out that there’s something to be said for having the brother of a failed president make his own run for the White House. Thanks to Jeb Bush, we may finally have the frank discussion of the Iraq invasion we should have had a decade ago.

But many influential people — not just Mr. Bush — would prefer that we not have that discussion. There’s a palpable sense right now of the political and media elite trying to draw a line under the subject. Yes, the narrative goes, we now know that invading Iraq was a terrible mistake, and it’s about time that everyone admits it. Now let’s move on.

Well, let’s not — because that’s a false narrative, and everyone who was involved in the debate over the war knows that it’s false. The Iraq war wasn’t an innocent mistake, a venture undertaken on the basis of intelligence that turned out to be wrong. America invaded Iraq because the Bush administration wanted a war. The public justifications for the invasion were nothing but pretexts, and falsified pretexts at that. We were, in a fundamental sense, lied into war.

The fraudulence of the case for war was actually obvious even at the time: the ever-shifting arguments for an unchanging goal were a dead giveaway. So were the word games — the talk about W.M.D that conflated chemical weapons (which many people did think Saddam had) with nukes, the constant insinuations that Iraq was somehow behind 9/11.

And at this point we have plenty of evidence to confirm everything the war’s opponents were saying. We now know, for example, that on 9/11 itself — literally before the dust had settled — Donald Rumsfeld, the secretary of defense, was already plotting war against a regime that had nothing to do with the terrorist attack. “Judge whether good enough [to] hit S.H. [Saddam Hussein] ...sweep it all up things related and not”; so read notes taken by Mr. Rumsfeld’s aide.

This was, in short, a war the White House wanted, and all of the supposed mistakes that, as Jeb puts it, “were made” by someone unnamed actually flowed from this underlying desire. Did the intelligence agencies wrongly conclude that Iraq had chemical weapons and a nuclear program? That’s because they were under intense pressure to justify the war. Did prewar assessments vastly understate the difficulty and cost of occupation? That’s because the war party didn’t want to hear anything that might raise doubts about the rush to invade. Indeed, the Army’s chief of staff was effectively fired for questioning claims that the occupation phase would be cheap and easy.

Why did they want a war? That’s a harder question to answer. Some of the warmongers believed that deploying shock and awe in Iraq would enhance American power and influence around the world. Some saw Iraq as a sort of pilot project, preparation for a series of regime changes. And it’s hard to avoid the suspicion that there was a strong element of wagging the dog, of using military triumph to strengthen the Republican brand at home.

Whatever the precise motives, the result was a very dark chapter in American history. Once again: We were lied into war.

Now, you can understand why many political and media figures would prefer not to talk about any of this. Some of them, I suppose, may have been duped: may have fallen for the obvious lies, which doesn’t say much about their judgment. More, I suspect, were complicit: they realized that the official case for war was a pretext, but had their own reasons for wanting a war, or, alternatively, allowed themselves to be intimidated into going along. For there was a definite climate of fear among politicians and pundits in 2002 and 2003, one in which criticizing the push for war looked very much like a career killer.

On top of these personal motives, our news media in general have a hard time coping with policy dishonesty. Reporters are reluctant to call politicians on their lies, even when these involve mundane issues like budget numbers, for fear of seeming partisan. In fact, the bigger the lie, the clearer it is that major political figures are engaged in outright fraud, the more hesitant the reporting. And it doesn’t get much bigger — indeed, more or less criminal — than lying America into war.

But truth matters, and not just because those who refuse to learn from history are doomed in some general sense to repeat it. The campaign of lies that took us into Iraq was recent enough that it’s still important to hold the guilty individuals accountable. Never mind Jeb Bush’s verbal stumbles. Think, instead, about his foreign-policy team, led by people who were directly involved in concocting a false case for war.

So let’s get the Iraq story right. Yes, from a national point of view the invasion was a mistake. But (with apologies to Talleyrand) it was worse than a mistake, it was a crime.

Krugman

[tommy]

CAMBRIDGE – “If the facts change,” John Maynard Keynes is supposed to have said, “I change my opinion. What do you do, sir?” It is a question his latter-day disciples should be asking themselves now.
Long before the United Kingdom’s recent general election, which the Conservatives won by a margin that stunned their critics, the facts about the country’s economic performance had indeed changed. Yet there is no sign of today’s Keynesians changing their minds.

Because I admire him as an historian, not least for his Keynes biography, I omitted Lord Robert Skidelsky’s name from my post-election commentary critiquing the contemporary Keynesian take on the UK economy. Opprobrium was best heaped, I believed, on Paul Krugman, as he makes such a virtue of heaping it on others. Unwisely, Skidelsky has leapt to Krugman’s defense.
Let me restate why the Keynesians were wrong. In the wake of the 2010 British election, Skidelsky, like Krugman, predicted that Chancellor of the Exchequer George Osborne was gravely wrong in seeking to reduce the budget deficit. In November 2010, he described Osborne as “a menace to the future of the economy” whose policies “doomed [the UK] to years of interminable recession.” In July 2011, he told the Financial Times that Osborne was “making a wasteland,” warning that financial markets might soon lose confidence in his policies.
In June 2012, Skidelsky argued that “since May 2010, when US and British fiscal policy diverged, the US economy has grown – albeit slowly. The British economy is currently contracting. … For Keynesians, this is not surprising: By cutting its spending, the government is also cutting its income. Austerity policies have plunged most European economies (including Britain’s) into double-dip recessions.” And, in May 2013, he reported that “The results of austerity had been “what any Keynesian would have expected: hardly any growth in the UK … in the last two and a half years … little reduction in public deficits, despite large spending cuts;…higher national debts… [and] prolonged unemployment.”
By this time, groupthink had taken hold. Skidelsky approvingly quoted Krugman’s claim that Britain was “doing worse this time than it did during the Great Depression.” More than once he echoed Krugman’s assertion that Osborne had been motivated by an erroneous belief that if he did not reduce the deficit, he might forfeit investor confidence (the “confidence fairy”).
Just a week before the UK voted this month, Skidelsky speculated that voters, “still wobbly from Osborne’s medicine,” might “decide that they should have stayed in bed.” Instead, the Tories won an outright majority, confounding pollsters and Keynesians alike. What could possibly have gone wrong – or, rather, right?
The last-ditch argument now put forward by Krugman is that the UK electorate was fooled into voting Conservative by a one-year pre-election boom, cynically generated by a covert Keynesian stimulus. It cannot have been easy for him to abandon his cherished macroeconomic model in favor of a conspiracy theory, especially one that two decades ago lost whatever explanatory power it ever had for UK elections.
But there is an alternative explanation: the Keynesians were wrong. “Austerity” was not nearly as harmful as they predicted. Fiscal stabilization may have contributed to a revival of confidence. In any case, nothing in modern British economic history told Osborne that he could risk running larger deficits with impunity.
There has been some sleight of hand in assessing Britain’s recent economic performance. For example, Dean Baker took International Monetary Fund data for the G-7 countries’ GDPs and made 2007 his base year. But a more appropriate benchmark is 2010, in the middle of which Cameron and Osborne took office. It is also worth including the latest IMF projections. And per capita GDP must surely be preferable to aggregate GDP.
image: http://www.project-syndicate.org/flowli/image/ferguson3-fig1/original/english

No doubt, recovery in the UK began more slowly than in other G7 economies, except Italy. But there is also no doubt that the UK recovery picked up speed after 2012. Last year, its growth rate was the highest in the G-7. According to the IMF, only the US economy will grow faster over the next four years, with the UK then regaining the lead.
It is wrong to assume that the UK could somehow have replicated the German or American recovery, if only Keynesian policies had been followed. The UK’s position in 2010 was exceptionally bad in at least four respects, and certainly much worse than that of the US.
First, public finances were extremely weak, as a 2010 Bank for International Settlements study of trends in debt-to-GDP ratios clearly showed. The baseline scenario for the UK at that time was that, in the absence of fiscal reform, public debt would rise from 50% of GDP to above 500% by 2040. Only Japan was forecast to have a higher debt ratio by 2040 in the absence of reform.
Second, including financial-sector debt, non-financial business debt, and household debt the pre-crisis UK had become, under Labour governments, one of the world’s most leveraged economies. In 1997, Labour’s first year in power, aggregate UK debt stood at around 250% of GDP. By 2007, the figure exceeded 450%, compared with 290% for the United States and 274% for Germany. Government debt was in fact the smallest component; banks, businesses, and households each had twice as much.
Third, inflation was above the Bank of England’s target. From 2000 until 2008, the inflation rate had crept upward, from below 1% to 3.6%. Among G-7 countries, only the US rate was higher in 2008; but, whereas US inflation cratered when the crisis erupted, the UK rate remained stubbornly elevated, peaking at 4.5% in 2011.
Finally, the UK was much more exposed than the US to the eurozone crisis of 2012-2013, as its principal trading partner suffered two years of negative growth.
So the real question is this: Did Osborne successfully stabilize the UK’s public finances? If the Keynesians had been correct, he would undoubtedly have failed; growth would have turned negative and the fiscal/debt position would have worsened.
That is not what happened. Net government debt as a percentage of GDP had soared from 38% to 69% from 2007 to 2010. It rose under Osborne, too, but at a far slower pace, and is forecast to peak at 83% this year, after which it will decline. By 2020, according to the IMF, only Canada and Germany will be in better fiscal health.
image:http://www.project-syndicate.org/flowli/image/ferguson3-fig1/original/english

Stabilization of the public debt has been achieved by a drastic reduction of the government’s deficit from a peak of just under 11% of GDP in 2009 to 6% last year. By 2018, according to the IMF, the deficit will have all but vanished. The same story can be told of the government’s structural balance, which fell from 10% of GDP in 2009 to 4% in 2014 and should be just 0.5% in 2018.
image: http://www.project-syndicate.org/flowli/image/ferguson3-fig3/original/english

This is an impressive performance in comparative terms. The US, for example, will still have a 4%-of-GDP deficit by 2020 on either of the above measures.
To be sure, the UK did not “deleverage”; but, under Osborne, the debt explosion was contained. Among advanced economies, only Germany, Norway, and the US achieved smaller increases in aggregate public and private debt/GDP ratios from 2007 to 2014.
UK inflation was also brought under control, without the overshoot into deflation experienced by some developed countries. Osborne cannot claim direct credit for this, of course; but the choice of Mark Carney to serve as Governor of the Bank of England was unquestionably his.
Most important, no prolonged or double-dip depression occurred. Far from being worse than in the Great Depression, the economy’s performance after 2010 was better than it had been in the recessions of the early 1980s and early 1990s. Indeed, the UK outstripped the other G-7 economies in terms of growth last year, and its unemployment rate, which never rose as high as the rates in the US and Canada in the teeth of the crisis, currently stands at roughly half those of Italy and France.
image: http://www.project-syndicate.org/flowli/image/ferguson3-fig4/original/english

Measured by job creation, too, UK performance was as good as the best, with employment increasing by roughly 5% between 2010 and 2014. As Jeffrey Sachs has noted, the UK employment rate, now at a record-high 73%, exceeds by far the US rate of 59%.
image: http://www.project-syndicate.org/flowli/image/ferguson3-fig5/original/english

The fact is that the more Keynesians like Skidelsky and Krugman talked about the “confidence fairy,” the more confidence returned to UK business. One can argue about why that was, but it seems unlikely that Osborne’s successful fiscal consolidation was irrelevant. There is certainly no evidence to support Krugman’s repeated assertion that a country in the UK’s situation – with its own currency and with debt denominated in that currency – could borrow without constraint in the aftermath of a major banking crisis. (Perhaps the Keynesians prefer to efface from their memories the mid-1970s, when Labour politicians, encouraged by Keynesian advisers, attempted to do just that.)
image: http://www.project-syndicate.org/flowli/image/ferguson3-fig6/original/english

And the Keynesians’ comparisons with the Great Depression were plainly risible from the outset. In terms of unemployment, even the recessions of the 1980s and 1990s were twice as painful.
image: http://www.project-syndicate.org/flowli/image/ferguson3-fig7/original/english

Without question, the UK has endured some real pain. From 2010 to 2015, average inflation-adjusted weekly earnings fell more than under any postwar government. But the electorate has decided that the right time to draw a conclusion about the performance of Cameron’s team (now only at its likely half-way point) will be in 2020, not 2015. The good news is that since September 2014, earnings have been growing in real terms. The plunge that began under Labour took time to stop, but it is finally over.
image: http://www.project-syndicate.org/flowli/image/ferguson3-fig8/original/english

Like Krugman (though his tone has been much less obnoxious), Lord Skidelsky has made the un-Keynesian mistake of sticking to an erroneous view in the face of changing facts. I look forward to the time when both have the intellectual honesty to admit that they were wrong – horribly wrong – about the economic consequences of Osborne’s strategy.

Read more at http://www.project-syndicate.org/commentary/the-economic-consequences-of-mr-osborne-by-niall-ferguson-2015-05#8FKqJYwKEU0IzHRU.99

Krugman afinal estava totalmente errado. 

[Zark]

Krugman afinal estava totalmente errado. 

deixa-te disso tommy, vai lá brincar com o lego. disto não riscas nada.
tu é que quiseste trazer o Niall Fergusson para o baile. depois não te queixes. neste momento ele é o laughing stock dos economistas, mesmo os conservadores.
sentiu-se melindrado pelo posts do krugman. diz que já não quer brincar, que o krugman é mau, que é o krugman que está errado, quer ir-se embora para casa e levar a bola do jogo.
enfim, é só rir.
o principal argumento contra o krugman é que ele é 'mau' para os seus coleguinhas. o greenspan também se queixou há uns dias atrás.
florzinhas de estufa. e hipócritas à décima centésima cas, claro.
vai lá para o teu cantinho e lê mais umas coisas, tommyzinho.
acabaste de ganhar umas orelhas de burro tal qual o mariquinhas do Fergusson.


Niall Ferguson Displays His Ignorance of Economics
Published: 11 May 2015

You have to admire Niall Ferguson. There aren't many people who are willing to write lengthy diatribes on topics on which they seem to know next to nothing, but some would say that is the definition of a Harvard professor.

Anyhow, he apparently believes that the victory of the Conservative Party in the U.K. election last week showed that he was correct to endorse their austerity policy and that Paul Krugman was wrong to criticize it.

If he was familiar at all with the literature on the impact of the economy on elections he would know that elections are largely determined by the economy's performance in the last year before an election, not an administration's entire term. And, since the conservatives relaxed their austerity in the last two years (as had been widely noted long before the election), the economy was not performing badly in the immediate lead up to the election.

Ferguson's piece presents a cornucopia of silly mistakes, which I don't have time to address, but I will give my favorite:

"On more than one occasion during the crisis, Krugman applauded Gordon Brown for injecting capital directly into the British banks rather than relying on purchases of "troubled assets," the initial thrust of the Troubled Asset Relief Program in the United States. In October 2008, Krugman engaged in the kind of sycophancy that usually indicates a man angling for a knighthood:

'Has Gordon Brown, the British prime minister, saved the world financial system? ... The Brown government has shown itself willing to think clearly about the financial crisis, and act quickly on its conclusions. .... Governments [should] provide financial institutions with more capital in return for a share of ownership ... [a] sort of temporary part-nationalization ... The British government went straight to the heart of the problem - and moved to address it with stunning speed.'

"TARP has of course proved far more successful than the UK's nationalization of too-big-to-fail behemoths like RBS."

The small detail that Ferguson apparently missed is that TARP also went the route of giving the banks capital in exchange for share ownership in the form of the purchase of shares of preferred stock.

At the time, Plan A from the Bush administration was to directly purchase the bad assets from the banks (hence the name "Troubled Asset Relief Program"). Krugman and others argued that the better route was to give the banks capital, which is what TARP eventually did, following Gordon Brown's lead. (I personally favored letting the market work its magic and then pick up the pieces after the Wall Street behemoths were buried in the ground.) In other words, Ferguson is bizarrely holding up TARP as an alternative course to the path set out by Brown, when in fact it followed the path set out by Brown.

But the real story is the overall performance of the U.K. economy, which Ferguson somehow thinks was extraordinary. The data beg to differ, even if the U.K. has done better in the last couple of years as the government relaxed its austerity. Here is the per capita GDP record of the G-7 economies since the crisis.



Source: International Monetary Fund.

As can be seen, the U.K. ties France for fifth place, only beating out Italy for last place. If we treat 2010 as the start point, it managed to close the gap with France in the next four years (which also was forced to pursue austerity since it was in the euro zone), but fell further behind Germany, Japan, Canada, and the U.S.

In 2014, seven years after the beginning of the crisis, per capita GDP in the U.K. was virtually identical to what it had been in 2007. By comparison, per capita GDP in the U.S. in 1988 was 20.1 percent higher than it had been at start of the 1981 recession. In 1997 it was 12.8 percent larger than it had been at the start of the recession in 1990. It would require some extraordinary affirmative action for conservative politicians to follow Ferguson and declare the Cameron record a success.

For folks who thought I was being unfair to use 2010 as a reference point, since Cameron only took office mid-year, you're right. The OECD has the quarterly data. The UK economy grew at a 2.0 percent annual rate in the first quarter and a 4.0 percent rate in the second quarter when Cameron took office. This slowed to 2.6 percent in the third quarter and 0.1 percent in the fourth quarter. So taking the year as a whole as the start point for Cameron is undoubtedly too generous.

I should also explain that there is a reason for using the pre-recession level of output as a reference point. In the old days (i.e. before the pathetic recovery from this downturn) economists expected economies to bounce back quickly from a recession, making up the ground lost in the recession. This is why we had years of 5-7 percent growth following the steep downturns in 1974-1975 and 1981-1982. This recession has been different in that we have not seen a steep bounce back in any country. I feel it is appropriate to apply normal economic standards to evaluate policy performance instead of using affirmative action for inept policymakers.

fonte

Z
 

[Incognitus]

Bem, afinal os Alemães é que estavam correctos, porque será que os criticam tanto?

[Zark]

Conservatives and Keynes

Tony Yates asks, “Why can’t we all get along?” Lamenting another really bad, obviously political defense of austerity, he declares that

it’s disappointing that the debate has become a left-right thing. I don’t see why it should.

But the debate over business-cycle economics has always been a left-right thing. Specifically, the right has always been deeply hostile to the notion that expansionary fiscal policy can ever be helpful or austerity harmful; most of the time it has been hostile to expansionary monetary policy too (in the long view, Friedman-type monetarism was an aberration; Hayek-type liquidationism is much more the norm). So the politicization of the macro debate isn’t some happenstance, it evidently has deep roots.

Oh, and some of us have been discussing those roots in articles and blog posts for years now. We’ve noted that after World War II there was a concerted, disgraceful effort by conservatives and business interests to prevent the teaching of Keynesian economics in the universities, an effort that succeeded in killing the first real Keynesian textbook. Samuelson, luckily, managed to get past that barrier — and many were the complaints. William Buckley’s God and Man at Yale* was a diatribe against atheism (or the failure to include religious indoctrination, which to him was the same thing) and collectivism — by which he mainly meant teaching Keynesian macroeconomics.

What’s it all about, then? The best stories seem to involve ulterior political motives. Keynesian economics, if true, would mean that governments don’t have to be deeply concerned about business confidence, and don’t have to respond to recessions by slashing social programs. Therefore it must not be true, and must be opposed. As I put it in the linked post,

So one way to see the drive for austerity is as an application of a sort of reverse Hippocratic oath: “First, do nothing to mitigate harm”. For the people must suffer if neoliberal reforms are to prosper.

If you think I’m being too flip, too conspiracy-minded, or both, OK — but what’s your explanation? For conservative hostility to Keynes is not an intellectual fad of the moment. It has absolutely consistent for generations, and is clearly very deep-seated.

Krugman

* William Buckley, fundador da National Review, ideólogo da direita americana.

[Incognitus]

A maior resistência ao Keynes virá de só se lembrarem dele nos ciclos correctivos, como já vimos.

[Zark]

A maior resistência ao Keynes virá de só se lembrarem dele nos ciclos correctivos, como já vimos.

já vimos?
agora as tuas opiniões são dadas por ti próprio, como factos consumados?

se vimos alguma coisa foi um superavit em 1995, na administração Clinton.

Diz antes: A maior resistência ao Keynes virá de só se lembrarem dele nos ciclos correctivos, como já vimos, na minha opinião.

opinião essa que é desde logo desmentida pelo acima mencionado superavit.

como já vimos....
presunçãozinha hein?

Z

[Incognitus]

A maior resistência ao Keynes virá de só se lembrarem dele nos ciclos correctivos, como já vimos.

já vimos?
agora as tuas opiniões são dadas por ti próprio, como factos consumados?

se vimos alguma coisa foi um superavit em 1995, na administração Clinton.

Diz antes: A maior resistência ao Keynes virá de só se lembrarem dele nos ciclos correctivos, como já vimos, na minha opinião.

opinião essa que é desde logo desmentida pelo acima mencionado superavit.

como já vimos....
presunçãozinha hein?

Z

Já vimos que o Krugman tem para aí uma centena de artigos a vociferar contra a falta de gastos / excesso de austeridade durante um ciclo correctivo, e devem ser um punhado (se é que existe algum) a vociferar contra o excesso de gastos / falta de austeridade durante um ciclo expansivo.

Só não vê mesmo quem quer não ver. Isto é para lá de óbvio.

-----------

O superávit FAZ parte da teoria do Keynes. Mas não faz parte da actuação de quem vocifera contra umas e outras coisas, claramente. A maior crítica ao Keynes vem de ninguém se lembrar dele durante os ciclos expansivos. Lembrassem-se dele nessas alturas, e neste momento a defesa da austeridade seria muito menor ou inexistente.

-----------

Embora não existam estatísticas sobre isto, a discrepância é de tal forma brutal que é perfeitamente óbvia.

[Incognitus]

Para que não existam dúvidas, eu declaro-me já aqui um Keynesiano se aplicarem a teoria toda em vez de só se lembrarem dela nos ciclos recessivos.

[Zark]

Só não vê mesmo quem quer não ver. Isto é para lá de óbvio.

para mim não é óbvio.
a tua opinião para mim não é óbvia.

o que é obvio para mim é que o último superavit que uma administração teve, foi em 1995, num ciclo económico positivo.

os actos valem mais que palavras.

deixa-te de tomar a tua opinião pela realidade., pá.

L

[Zark]

Para que não existam dúvidas, eu declaro-me já aqui um Keynesiano se aplicarem a teoria toda em vez de só se lembrarem dela nos ciclos recessivos.

O clinton aplicou.
antes dele teve três administrações republicanas, todas deficitária, e depois teve duas administrações republicanas, todas deficitárias.

O Clinton foi o único presidente a apresentar um superavit na mega expansão económica 1982 - 2000. com duas adminstrações reagan e uma bush senior.

Isto são factos.
opiniões são opiniões.

Z

[Zark]

Lifelong Republican Turns On His Party, Embraces Obamacare

Luis Lang, who is currently crowdfunding for medical expenses that he can’t afford because he didn’t sign up for insurance under Obamacare, has become a viral sensation. However, the 49-year-old South Carolina resident says he doesn’t want to be the poster child for the Republican Party’s opposition to health care reform anymore.

At the end of last week, the Charlotte Observer reported that Lang, a lifelong Republican who’s previously prided himself on covering his own medical bills, can’t afford to pay thousands of dollars to treat an issue stemming from his chronic diabetes.
Lang is suffering form bleeding in his eyes and a partially detached retina, which will cause him to go blind if left untreated. So he set up a GoFundMe page to solicit $30,000 in donations to cover a costly surgery that will save his vision.

Since then, the story has been picked up in left-leaning outlets across the country and covered in nationally syndicated newspaper columns. Obamacare supporters flocked to Lang’s GoFundMe page to urge him to change his mind about the health law.

In an interview with ThinkProgress, Lang joked that he might be the most hated Republican in the country right now. But he also said that, thanks in part to a flood of media attention that led him to learn more about health care policy, he doesn’t identify with the GOP anymore.

“Now that I’m looking at what each party represents, my wife and I are both saying — hey, we’re not Republicans!” Lang said. He added that, though he’s not a political person by nature and has never voted solely along party lines, he wants to rip up his voter registration card on national television so Americans will have proof that he’s making the switch.

Although the Charlotte Observer article positioned Lang against the ACA, he insists he has never been completely opposed to the law. He does, however, have some issues with the way it’s been implemented.

Like many Americans, Lang struggled to navigate the website last year and was frustrated by long wait times and technological glitches. He told ThinkProgress he thinks the law is too confusing as it’s currently written — and pointed out that it’s too difficult for him to predict his annual income as a self-employed contractor, which is what prevented him from signing up for a plan during previous enrollment periods. He was too nervous about underestimating his income during the enrollment process and being required to pay back his insurance subsidy during tax season.

But Lang’s main complaint is the fact that the Supreme Court ruled that Obamacare’s Medicaid expansion should be optional, which has given Republican lawmakers the opportunity to refuse to implement the policy on the state level. That’s led to a coverage gap preventing millions of Americans from accessing affordable insurance whatsoever.

Because Lang’s income has recently dried up, now that his deteriorating vision prevents him from working, he now falls into that gap.
“I put the blame on everyone — Republican and Democrat. But I do mainly blame Republicans for their pigheadedness,” Lang said. “They’re blocking policies that could help everyone. I’m in the situation I’m in because they chose not to expand Medicaid for political reasons. And I know I’m not the only one.”

Lang said he’s read almost every comment on his GoFundMe page. He acknowledged that a lot of people have criticized him for waiting until he got sick to think about purchasing insurance, which is not how the health care system is intended to function. But he insists that he and his wife have been discussing getting coverage now that they’re getting older, and notes that he tried his best to navigate the law last year.

“I know we didn’t do it the right way,” Lang told ThinkProgress, explaining that he’s hoping to figure out the situation with his fluctuating income so he can be the first in line to sign up for a plan during the next open enrollment period.

He said he’s always tried to take responsibility for his own bills, but he also believes that the United States should move toward a universal health care system that makes coverage available to everyone regardless of their income level. He said he “one hundred percent agrees” with the people who commented on his crowdfunding page to argue that health care is a human right.

“In fact, I have some eyesight jokes for you,” he added. “This whole thing has helped me see more clearly. Like they say, hindsight is 20/20.”

fonte

[Incognitus]

Só não vê mesmo quem quer não ver. Isto é para lá de óbvio.

para mim não é óbvio.
a tua opinião para mim não é óbvia.

o que é obvio para mim é que o último superavit que uma administração teve, foi em 1995, num ciclo económico positivo.

os actos valem mais que palavras.

deixa-te de tomar a tua opinião pela realidade., pá.

L

Já aqui meteste dezenas de artigos do Krugman a vociferar contra a austeridade.

Existiram mais anos de expansão do que de  contracção nos últimos 15 anos. Deveria ser fácil encontrar um número igual de artigos a vociferar contra o excesso de gastos nesses anos, para ser consistente com o Keynesianismo.

Tu e eu sabemos que esses artigos não existem.

[Zark]

Só não vê mesmo quem quer não ver. Isto é para lá de óbvio.

para mim não é óbvio.
a tua opinião para mim não é óbvia.

o que é obvio para mim é que o último superavit que uma administração teve, foi em 1995, num ciclo económico positivo.

os actos valem mais que palavras.

deixa-te de tomar a tua opinião pela realidade., pá.

L

Já aqui meteste dezenas de artigos do Krugman a vociferar contra a austeridade.

Existiram mais anos de expansão do que de  contracção nos últimos 15 anos. Deveria ser fácil encontrar um número igual de artigos a vociferar contra o excesso de gastos nesses anos, para ser consistente com o Keynesianismo.

Tu e eu sabemos que esses artigos não existem.

existem.
os artigos pré-2008 a 'vociferar' contra a bolha mobiliária eram o quê? expansionistas?

de qualquer forma um superavit concreto, existente, real é muitos mais importante que mil artigos.
pega noutra. essa já deu o que tinha a dar.

Z

[Incognitus]

O superávit de que falas teve várias origens e nem todas foram devidas ao Clinton. O Clinton subiu impostos cedo e isso ajudou bastante, mas também existiram 2 coisas que o favoreceram:
* Republicanos a impedirem subidas de gastos e;
* A bolha accionista.

[Zark]

O superávit de que falas teve várias origens e nem todas foram devidas ao Clinton. O Clinton subiu impostos cedo e isso ajudou bastante, mas também existiram 2 coisas que o favoreceram:
* Republicanos a impedirem subidas de gastos e;
* A bolha accionista.

claro...
não houve bolhas para os republicanos. só para os democratas.
a bolha que rebentou em 87? reagan
bolha imobiliária? bush junior.

vamos debater seriamente ou é para continuar assim?

L