Paul Krugman: We Are In Economic "Purgatory" (VIDEO)

Despite Federal Reserve Chairman Ben Bernanke's upbeat comments Friday that the U.S. economy is on the cusp of recovery, economists Paul Krugman and Robert Reich remain unconvinced that the outlook has gotten that much better.

Krugman acknowledged that we have seen some better economic numbers recently, but lamented our tendency to view the economy in black and white terms when the reality is more nuanced:

We've got a problem with terminology because we usually say either the economy is in recession or the economy is recovering. Either you're in hell or you're in heaven. And the trouble is we're actually in purgatory. We're actually in a situation almost for sure GDP is growing; almost for sure the business cycle leading committee will eventually decide the recession ended this summer. But almost surely also we're still losing jobs. The unemployment rate is going to continue to rise. So we're in that infamous jobless recovery state.

Reich was more blunt in his assessment, telling Stephanopoulos that "anyone who says we're out of the woods, or even moving out of the woods, has got to be lost at sea. There is no evidence that this economy is doing much better. The best that can be said is we're getting worse more slowly."

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Comments

[nielsdartfam]

It’s great that the world is breathing a sigh of relief, but whats really important is what comes next. Here: https://www.mindreign.com/en/mindshare/Economic-Conditions/sl4358145ppp5pn1.html this guy knows more than me

[bobm0001]

While we're on the subject, when are conservatives going to start admitting that Obama's economic strategies seem to be working.

[carlosgriffin]

You mewan the strategies started by George Bush?

[vooter]

You mean the strategy of raining magic counterfeit dollars down on the world? LOL...no, I don't think that's working....

[pmag88]

Rather than dumping the lion’s share of the money into paying unemployment benefits when we already know that unemployment may rise for at least another year, at least some of it should have been re-directed towards creating jobs. --

Think about this. If every small town in America used municipal and agricultural waste to create bio - diesel and ethanol, right there we'd have created dozens or hundreds or thousands of jobs per town and city that will never be outsourced. At the same time we'd be cleaning up the environment and weaning ourselves off foreign oil. And why shouldn't an unemployed person who works in retail, or finance, or technology or whatever, be trained and temporarily employed in the rebuilding of American infrastructure and green job technology ? Certainly that would be a lot more cost effective than just paying unemployment and trying to keep things afloat until the economy slowly turns around. Look, all it will take to create substantial job growth right now, is to re-direct a reasonable portion of the money allocated for stimulus towards that end. There is work that needs done and we need jobs and the money is there. Re-direct it.

[steppenwolfsayshi]

I think so too. We could have atleast made some real effort to put the unemployed to work rather than just sending them a check. Then we could have something to show for all that money.

And I hate this nonsense about horrible "virtue of thrift." Until the US starts making things, real things, we don't have money to spend. And until the socio-economic factors that are repressing the middle class change-expensive healthcare, expensive secondary education (or even primary if you don't have access to a good public school where you live), lack of job opprotunity-because of combined globalization, bad trade policy, bad education policy, and bad manufacturing policy, lack of retirement security-because of corruption in the financial system...i can think of more, but you get the idea...until then, we don't have money to spend. How's that for trickle down economics? Who knew, it does exist. And I guess it trickles up too-the rich go broke with the poor, except when we bail them out. This is not a business cycle problem. It is structural.

[carlosgriffin]

Ok, time to burst some bubbles. The whole idea behind this economy is to NOT grow it. Obama wants to get the economy to a point where it's what people like Krugman and Obama like to call "sustainable". The problem with this is there is no job growth in that type of economy. It's the main reason behind Obama pushing hard for volunteerism after college, and it's why he wants his civilian corps to be funded by taxpayer money. The civilian corp will have to pay their people and it wil get expensive.

Eventually, the goal is to have everyone in the USA have an income that is all in a general range of everyone else. Soclalist/Mar.x.ist to the rescue. This is why he is so hell bent n destroying what we have now. The sad truth will be driven home to all when hyper-inflation sets in.

[magestyx]

Anyone using the term 'jobless recovery' other than to ridicule it should be immediately fired. They are obviously way to unintelligent to grasp the economic situation. This administration's use of the term is simply to rebrand their massive screwup and make it more palatable to the American people who are blinded enough to fall for it.

Don't let them get away with this!!!

Kudos to the Supreme Court for at least making the Fed say where they wasted our money!

[carlosgriffin]

magestyx,

The only way Obama can complete his transformation of our economy is to actually have a jobless recovery. It's one of the ways you level the playing field. Study some of Krugmans economic wish lists and you will get the idea. We are all going to be paid on fairly equal terms, and for this to happen a lot of jobs have to be trimmed. Soci.al.ism, ain't it grand?

[c6steve]

Yea, and Capitalism since Reagan has been all wine and roses right? Look whats happening to this country of ours. I don't have all the answers but for one side to come out and continually blame the other, left-right, Dem.-Rep., it`s nonsense. both of these parties are bought and paid for. They are both to blame for the continual drop in most of our standard of living. For most Americans the`American dream` is gone

[magestyx]

A level playing field? How can millions of middle and lower income workers losing their jobs while the rich get richer possibly be a level playing field? HuffPost ran an article only a week ago showing that we've now reached the biggest gap in wealth this country has ever seen-- even worse than the Great Depression-- and the trend is RISING.

People with the idea of 'crash it completely, then fix it' are enabling this administration to do terrible things. I'm glad that there are so many others who are fighting this so that we don't become the SSA!

[mjc]

With all the focus for the past eight years on a president and an administration that could do nothing for we ordinaries, it is just too bad that Obama didn't run as a Republican since it seems as if most of his policies and advisors and even his latest speeches are so similar to Geo Bush's. Then, perhaps, there would be Democrats with the courage of their convictions who could lead us to health care, environmental reform, and economic control that could get the housing and unemployment problems solved.

[artistcain]

Again i ask is this county ready for a French style Revolution???
Just make sure you take down the right people and institutions.

[carlosgriffin]

Wuth you on the left and me on the right, who's to say which are the right institutions?

[WRP64]

Highest regards for Robert Reich, but his metaphors are a mess here.


If anyone who says we are out of the woods is out to sea.
And that anyone is one of we.
Then we are indeed out of the woods.
And we are out to sea.

[carlosgriffin]

Small man, small thinking!

[SlappHappy]

Ronnie "the deregulator" Raygun and his Raygunomics got this whole ball of wax rolling and now we have ended up on the edge of the abyss.

[clairemcnair]

You are absolutely right! And the idiots on the Hill and Wall Street still haven't figured out that you can't keep eliminating jobs, pushing down wages while transfering all the wealth to the top 1% and have a healthy "consumer based" economy. "Trickle down" = "Let them eat cake."

[didereaux]

I do not believe they are idiots, nor that they do not understand 'it'. They are mentally unbalanced is becoming clear...the truth is they don't CARE about the consequences! They religiously BELIEVE in Milton Friedmans' fantasy...namely that a country with completely unregulated business, and a government reduced to collecting parking meter fines is Utopia.

These people of Wall Street and politics and business who follow this line of monetary pursuit and policy are zealots, and fanatics, no different in one iota from religious zealots and fanatics.

[carlosgriffin]

Wrong, when was the last time a poor person gave you a job?

[c6steve]

Bravo Bravo

[Telemachus]

"This is your captain speaking. I have good news. We are still in a dive, but the rate of the increase in acceleration has diminished somewhat. Also, the pieces breaking off have made us lighter, and the gaping holes in the fuselage are greatly reducing the demands on the air-conditioning system."

[Tyler-Durden]

lol

i swear this is funny but it may just be cuz of the oxygen mask!

[publicradio]

country is going down the tubes and there's nothing we can do about it

good articles: http://www.iamned.com

[norkas]

The Republicans want NO laws for Wall Street and the banks after this multi trillion meltdown because of the laws take off the books by Republicans that allowed legal garbage that was worthless to be bundled and sold and we now pay trillions for garbage.

No regulations the Republicans and there numbed minded supporters yell. Now the Republicans leaders of todays are the biggest thieves i have ever seen i history because the majority of them will not protect is against economic ruin because they are being payed off by wall street lobbyist with more then campaign donations.

Some Republicans will profit i by leaving office and having a unreal paying job with a lobbyist firm or wall street for selling out America an promoting NO regulations so the next scam will be worse and take my word this is not over yet .

What you will see uncovered in the next few months will be trillions more of write offs we have to pay for because wall street had a legal tool to make sht into money

[humanbeing-rick]

As Paul said: “We have always known that heedless self-interest was bad morals,” said Franklin Delano Roosevelt in 1937. “We know now that it is bad economics.” And last year we learned that lesson all over again.

The right wing stole our government and economic systems for the last couple of decades, dominating the rest of us with their elitist policies. Now the right wing claims that our government is bad for us, and do not want any reform or intervention on behalf of our people. The right wing still insists that regulation is bad, and that the free market is good - both ideas have proven to be miserable failures.

This is our government, and we can make it either good or bad. It is up to us, the people.
I take offense to the right wing continuing to insist otherwise.
They seem intent upon continued destruction of our government, our economy, and regulatory systems. The right wing comes very close to the defintion of a traitor.

Good people of America, stand up for what is right, stand up for your fellow man.
In God I trust.

[Tyler-Durden]

nice comment, Rick.

hang in there. we the people will take our govt back from the elite. we just need to:

1) identify the bad eggs in govt
2) identify trustworthy americans to replace them
3) promote them on the web like they're the next american idol star, so people know who to vote for
4) enact the necessary laws to cut lobbyist influence, regulate the market, decide whether it is better to nationalize the banks or not, eliminate the Fed, regulate the oil and agra industries, and start subsidizing the green industries to create jobs

once we start building the industry of energy conservation, the jobs will come. there is so much to be done, and people want to work. it's just a matter of having someone HONEST coordinate it, with the goal to be RESULTS, rather than individual profits.

we have to get the GREED out of the equation.

[hollygirl]

I couldn't agree more - fomenting the seeds of discontent used to be known as treason and the right-wingers and these crazy cable shows are flirting very dangerously with that.

[Soulsurfer]

The PR push to show some improvement in the economy is BS..........still no jobs, costs are not going down, and no infrastructure investments of any meaningful size. Just because the "markets" are doing better doesn't mean jack, but the MSM and investor class like it just fine. Mr. Reich is spot on.

[WOODGUN]

hey, have you seen the latest in Bammernomics? Following the 'huge success' (?????)of the 'cash for clunkers' program (less than 10% of allocated funds paid out due to typical govt admin problems), they are now coming out with 'cash for caskets' where the gubmint will pay to bury yer sorryazz with taxpayer funds - as if there's not enough deficit & debt now!!!! sheesh, what a bunch of m0r0ns!!

[Buddy McCue]

No, that's just the latest in rightwing i diocy.

Last week L imbaugh decided to rename the fictional "death panels" with the new "cash for caskets."

Somewhat more recently, FOX decided to use that same phrase to describe State Programs that provide indigent funerals. I guess they liked the sound of the phrase.

[KarateKid]

How about Cash for Wackos as a way to get rid of righties?

[Telemachus]

That wouldn't work. There's no secondary market for the scrap.

[KarateKid]

Instead of showing us your utter !gnorance, you should be going to school and learning the English language, how to spell correctly and use proper grammar. You might get a job better than the McDonald's job you currently have.

And, hey, Super Size me, fella.

[Tyler-Durden]

this shows how easily led you are.

they are not "coming out" with anything new. homeless people with no surviving family have always had tax paid burials. they don't just toss 'em in the landfill.

how's it feel to be so gullible?

[Mark Kraft]

Reich is one of the best, most humane, most knowledgeable and down-to-earth individuals out there. It's surprising, frankly, that the Obama administration hasn't put his talents to good use.

[SlappHappy]

Surprising, and worrying, too.

[hellboundtrain]

With no accountability for those that have gotten our nation into this disaster, the entire world will see US for what we really are: a FRAUD! The rest of the nations will not want to do any more business with US ever again.

The nation will be shunned. Do you think it isn't happening already?

Karma, (As ye sow, so shall ye reap, for the Christians in the crowd) or retribution will be very, very nasty, but the revulsion with which the rest of the world's nations views the U.S. is understandable.

AAA ratings for everything = fraud
No SEC investigations in to improprieties = fraud
No Upholding the Rule of Law = fraud
CEO pay 100's times that of working man imbalance = massive injustice
Bailout $ apportioned to the the richest = fraud
Not observing the Geneva Conventions, which we signed = fraud
Keeping those that perpetrated crimes in their positions to continue their crimes = no justice = fraud

We were all put on this speeding train when the FED came into existence, and the same greed mentality that caters to unsavory desires of the elites with corporatism and ever-greater profits, at any cost without regard to other human beings.

If their are no changes, then the trajectory remains the same.

[WOODGUN]

I agree with accountability - throw Barnyard Cranks, Dodd and Bammer in the slammer for the Fannie & Freddie fiasco which started it all - along with the ACORN goons who forced banks to make NINJA loans

[Buddy McCue]

What a colorful imagination you have.

[KarateKid]

But, before that, let's bring Bush, Cheney and the rest of that criminal gang to justice. You don't have peep to say about that, do you, hypocrite?