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Paul Krugman Shreds GOP Contenders, Says They Are Their Own 'Hurricane Katrina'

Paul Krugman Shreds GOP Contenders, Says They Are Their Own ‘Hurricane Katrina’

Paul Krugman, arguably one of the best economists in America, loves to shut down the Republicans at any turn. He calls them out on not just issues in the economic/fiscal realm, but on social and cultural issues too. In a recent op-ed in the New York Times, he really laid into a few of the 2016 GOP contenders – Jeb Bush, Chris Christie, Donald Trump and Scott Walker. And, given the recent 10th…

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…you might argue that even if the current minimum wage seems low, raising it would cost jobs. But there’s evidence on that question — lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many “natural experiments” here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment.

Why is this true? That’s a subject of continuing research, but one theme in all the explanations is that workers aren’t bushels of wheat or even Manhattan apartments; they’re human beings, and the human relationships involved in hiring and firing are inevitably more complex than markets for mere commodities. And one byproduct of this human complexity seems to be that modest increases in wages for the least-paid don’t necessarily reduce the number of jobs.

What this means, in turn, is that the main effect of a rise in minimum wages is a rise in the incomes of hard-working but low-paid Americans — which is, of course, what we’re trying to accomplish.

Finally, it’s important to understand how the minimum wage interacts with other policies aimed at helping lower-paid workers, in particular the earned-income tax credit, which helps low-income families who help themselves. The tax credit — which has traditionally had bipartisan support, although that may be ending — is also good policy. But it has a well-known defect: Some of its benefits end up flowing not to workers but to employers, in the form of lower wages. And guess what? An increase in the minimum wage helps correct this defect. It turns out that the tax credit and the minimum wage aren’t competing policies, they’re complementary policies that work best in tandem.

So Mr. Obama’s wage proposal is good economics. It’s also good politics: a wage increase is supported by an overwhelming majority of voters, including a strong majority of self-identified Republican women (but not men). Yet G.O.P. leaders in Congress are opposed to any rise. Why? They say that they’re concerned about the people who might lose their jobs, never mind the evidence that this won’t actually happen. But this isn’t credible.

For today’s Republican leaders clearly feel disdain for low-wage workers. Bear in mind that such workers, even if they work full time, by and large don’t pay income taxes (although they pay plenty in payroll and sales taxes), while they may receive benefits like Medicaid and food stamps. And you know what this makes them, in the eyes of the G.O.P.: “takers,” members of the contemptible 47 percent who, as Mitt Romney said to nods of approval, won’t take responsibility for their own lives.

Eric Cantor, the House majority leader, offered a perfect illustration of this disdain last Labor Day: He chose to commemorate a holiday dedicated to workers by sending out a message that said nothing at all about workers, but praised the efforts of business owners instead.

The good news is that not many Americans share that disdain; just about everyone except Republican men believes that the lowest-paid workers deserve a raise. And they’re right. We should raise the minimum wage, now.

In fact, almost everyone following the situation now realizes that Germany’s austerity obsession has brought Europe to the edge of catastrophe — almost everyone, that is, except the Germans themselves and, it turns out, the Romney economic team.

Needless to say, this bodes ill if Mr. Romney wins in November. For all indications are that his idea of smart policy is to double down on the very spending cuts that have hobbled recovery here and sent Europe into an economic and political tailspin.

—  Paul Krugman, We Don’t Need No Education
Romney is scamming voters, claiming not only that he can make up the lost revenue by closing unspecified loopholes, but that he can do so in a way that doesn’t shift the tax burden away from the rich onto the middle class. He can’t, as a matter of sheer arithmetic — which is the point of that Tax Policy Center study… The Romney campaign isn’t even trying to make a substantive argument in response — they’re just calling names.
—  Paul Krugman on Romney’s tax policies.
[T]here’s a reasonable argument to be made that part of what ails the world economy right now is that governments aren’t deep enough in debt.
— 

Paul Krugman

People genuinely listen to this chucklehead.

Never mind that public debt worldwide has tripled in the last 15 years (from about $20 trillion to about $60 trillion). And never mind that those who most gain from government largesse, which becomes said debt, are those closest to the spigot and with bigger hands to fill. The rich and connected, in other words - banks, giant corporate entities, political cronies, etc. What happened to your concern about “income inequality,” Paulie?

Anyway, here’s a completely irrelevant chart for your perusal:

Oh, and another:

Find a cozy corner of the crow’s nest, lookout boy, and take a nap. The Titanic will be fine.

Once upon a time, Democrats pretended to care about the debt. But that was before they were in power.

By the way, if you’ve managed to not lose your senses in violent bouts of sad laughter at Señor Krugman’s Keynesian prattle, the jokers at Alternet have come to Krugman’s defense claiming - and if you have bladder issues you may want to go relieve yourself before reading this - that: “No one creates safe assets quite like the government does.”

Seriously. They seriously wrote that. And, presumably, they seriously believe it.

>”No one creates safe assets quite like the government does. Not Wall Street, contrary to some arguments. The “con jobs” of subprime mortgages and derivatives that led to the housing bubble and ultimately to the crash of 2008 and Great Recession is an indicator of how safe that is.

Granted, their analysis is flawed so it’s understandable that their conclusion would be as well. Allow me to dust off a previous post from 2013:

Housing is made more expensive mostly because of goosed demand facilitated by easy credit from government agencies and lowered lending standards facilitated by government decree. The housing bubble is decades in the making (though it really began its meteoric climb in the 1990s), and the recent correction didn’t come anywhere near correcting since the same activities that led to the bubble are mostly still in effect. A dramatic decrease in lending standards put people into homes that they could not afford, creating an increase in demand that drove the costs of owning a home upward.

Russ Roberts, in his paper “Gambling with Other People’s Money,” details the entire process of perverted incentives in the housing market that incentivized buyers to purchase more and bigger homes while protecting investors from the risks of making such loans - all which led to dramatic increases in housing prices, most of which are still artificially overvalued today. (Also relevant are Woods’ Meltdown, Sowell’s Housing Boom and Bust, and Norberg’s Financial Fiasco).

The “Great Recession” of 2008 is wholly a product of government, from the Federal Reserve to the GSEs.

But let’s not go off the rails. The topic here is that debt is outrageously high, and Paul Krugman is an irresponsible madman

(via Financial Terrorists On The Road - Krugman And Rogoff Peddling Toxic Advice | Zero Hedge) Image from The Evil Queen.

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From the article, yo:

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So, yes, in the year 2014 we have a Harvard professor running around trying to do Franklin Roosevelt one better. FDR took the people’s gold in 1933. Now Professor Rogoff wants their cash—–the last refuge where citizens can anonymously safeguard their wealth from the depredations of the state.

krugman.blogs.nytimes.com
Ryan in Two Numbers

[Y]ou can learn everything you need to know [about Ryan’s budget] by understanding two numbers: $4.6 trillion and 14 million.

Of these, $4.6 trillion is the size of the mystery meat in the budget. Ryan proposes tax cuts that would cost $4.6 trillion over the next decade relative to current policy — that is, relative even to making the Bush tax cuts permanent — but claims that his plan is revenue neutral, because he would make up the revenue loss by closing loopholes. For example, he would … well, actually, he refuses to name a single example of a loophole he wants to close.

So the budget is a fraud. No, it’s not “imperfect”, it’s not a bit shaky on the numbers; it’s completely based on almost $5 trillion dollars of alleged revenue that are pure fabrication.

On the other side, 14 million is the minimum number of people who would lose health insurance due to Medicaid cuts — the Urban Institute, working off the very similar plan Ryan unveiled last year, puts it at between 14 and 27 million people losing Medicaid.

That’s a lot of people — and a lot of suffering. And again, bear in mind that none of this would be done to reduce the deficit — it would be done to make room for those $4.6 trillion in tax cuts, and in particular a tax cut of $240,000 a year to the average member of the one percent.

Paul Krugman asks: What were "people like Sean Hannity of Fox News, who went all in on Mr. Bundy’s behalf, thinking?"

From the New York Times:

“Today’s conservative leaders were raised on Ayn Rand’s novels and Ronald Reagan’s speeches (as opposed to his actual governance, which was a lot more flexible than the legend). They insist that the rights of private property are absolute, and that government is always the problem, never the solution.

The trouble is that such beliefs are fundamentally indefensible in the modern world, which is rife with what economists call externalities — costs that private actions impose on others, but which people have no financial incentive to avoid. You might want, for example, to declare that what a farmer does on his own land is entirely his own business; but what if he uses pesticides that contaminate the water supply, or antibiotics that speed the evolution of drug-resistant microbes? You might want to declare that government intervention never helps; but who else can deal with such problems?

Well, one answer is denial — insistence that such problems aren’t real, that they’re invented by elitists who want to take away our freedom. And along with this anti-intellectualism goes a general dumbing-down, an exaltation of supposedly ordinary folks who don’t hold with this kind of stuff. Think of it as the right’s duck-dynastic moment.

You can see how Mr. Bundy, who came across as a straight-talking Marlboro Man, fit right into that mind-set. Unfortunately, he turned out to be a bit more straight-talking than expected.”

NOT THE ONION: Income Inequality Institute Will Pay Paul Krugman $25,000 Per Month

In late February, the City University of New York announced that it had tapped Princeton economist and New York Times blogger Paul Krugman for a distinguished professorship at CUNY’s Graduate Center and its Luxembourg Income Study Center, a research arm devoted to studying income patterns and their effect on inequality.

About that. According to a formal offer letter obtained under New York’s Freedom of Information Law, CUNY intends to pay Krugman $225,000, or $25,000 per month (over two semesters), to “play a modest role in our public events” and “contribute to the build-up” of a new “inequality initiative.” It is not clear, and neither CUNY nor Krugman was able to explain, what “contribute to the build-up” entails.

It’s certainly not teaching. “You will not be expected to teach or supervise students,” the letter informs Professor Krugman, who replies: “I admit that I had to read it several times to be clear … it’s remarkably generous.” (After his first year, Krugman will be required to host a single seminar.)

Naturally, CUNY is taxpayer-funded. After all, who in their right mind would pay Paul Krugman so much of their own money, particularly to do so little?

The Classic Krugman Pushback

CNBC’s Joe Kernen: “It goes back to our forefathers, who said limited government, low taxes,”

NYT’s Paul Krugman: “I don’t remember actually hearing about that. I don’t think that’s in there.”

Federal income tax was created in 1913.

Krugman added: “People getting their news from sources like that are probably getting terrible advice about any kind of investment that depends on macroeconomics.”

All the evidence says that public systems like Medicare and Medicaid, which have less bureaucracy than private insurers and greater bargaining power, are better than the private sector at controlling costs. I know this flies in the face of free-market dogma, but it’s just a fact. You can see this fact in the history of Medicare Advantage, which is run through private insurers and has consistently had higher costs than traditional Medicare. You can see it from comparisons between Medicaid and private insurance: Medicaid costs much less. And you can see it in international comparisons: The United States has the most privatized health system in the advanced world and, by far, the highest health costs.
—  Nobel Prize winning economist Paul Krugman