Krugman: Political Intimidation Killing Recovery's 'Last Remaining Hope'

The New York Times:

As I write this, investors around the world are anxiously awaiting Ben Bernanke’s speech at the annual Fed gathering at Jackson Hole, Wyo. They want to know whether Mr. Bernanke, the chairman of the Federal Reserve, will unveil new policies that might lift the U.S. economy out of what is looking more and more like a quasi-permanent state of depressed demand and high unemployment.

Read the whole story: The New York Times

Comments

[BlackRabbit]

07:49 PM on 08/29/2011

Astonishing the Krugman is able to fathom the inner thoughts and emotions of Ben Bernanke.

But it's all a bunch of hooey. Krugman has no more insight into what's driving Bernanke than anyone else. This narrative simply fits Krugman's economic -- and let's face it, political --predilections.

[smolensk-lies]

08:30 AM on 08/29/2011

gotta love the krug. anyone else see last weeks clip , where a red cheeked krug, looking like the after pic of a week long bender, explained why the euro wasn't going to work out (12 years late)?

keep channeling keynes, krug. chug a lug

[getsit]

05:37 PM on 08/29/2011

He said it 12 years ago. You must be 10 years old and have the mind of one.

[smolensk-lies]

01:23 AM on 08/30/2011

i saw it last week, with a clearly current, older krugman . i wont wait up for your link ref 1999

he was generally a champion of the euro and eurozone from 1999-2010 - like in this 2008 read. http://justoneminute.typepad.com/main/2008/01/krugman-cheerle.html enjoy, and stop ly-ing. get it?

[Guitarsandmore]

07:59 AM on 08/29/2011

The banks are their own worst enemy. If they would stick to making simple loans with simple interest and no other conditions the economy would right itself. But I keep hearing from friends trying to buy houses that banks are still throwing in all kinds of strange conditions and co-signers and changing terms. Few consumers are buying into that. Banks are screwing themselves.

[LazyRepubs]

12:22 AM on 08/29/2011

Poor Krugman. He is right of course. But his problem is that he wants to use his discipline, his academic study and knowledge, to help the masses. All through history there has been a demarcation between the intelligentsia and the common plebes. He has to realize that although he has studied hard and knows how to make the machine work....the macine has to invite him, to accept him. But the machine is a composition of stupid opportunistic clowns, rhetoriticians, and those who follow them. It will sink. Knowledge, reason, clear thought and argument will be trumped by rhetoric anytime because the masses love rhetoric. They will die in mass, with clear intuitons about the value of their lives but lacking in their appreciation for their own reason and its power.

[DON McDONALD]

02:00 PM on 08/29/2011

A major problem is that folks demand "simple answers" to problems for which there just plain are NO simple answers.

[getsit]

05:41 PM on 08/29/2011

The no longer teach critical think and problem solving skills in schools anymore, along with history, geography, science, social studies, political science, PE, music and other arts programs. If you think people are stupid now, just wait for our children who are being shortchanged a worldly education grow up. Those homeschooled kids also need to reach educational goals and should be monitored by the school districts they live in.

Idiocracy here we come.

[ChasG]

04:51 PM on 08/28/2011

Krugman is a brilliant ( though often self-congratulatory) economist who has often come across as someone who has a chip on his shoulder (for being left out of the innercircles of power. Never-the-less, I have admired and respected his knowledge of economics despite his political amateurism. That said, this is one of the best analyses of the politics of our economic problems that Krugman has produced. It is honest, objective and well informed. The right wing in this country wants to return to the days after the Declaratiion of Independence and before the ratification of the Constitution. The right wing has abandoned everything this country has stood for, including 222 years of incrementally progressive social change. And for once, the headline speaks to the substantive truth. My kudos to Mr. Krugman, and to the HP editors. Keep up the good work, please.

[bikerdude]

02:44 PM on 08/28/2011

I believe that long term greed has trumped common sense. All these devious market manipulation instruments are being used to elevate personal wealth at the cost of others. That eventually runs out. I also believe that we are witnessing the end of capitalism as we know it. They are finally reaching that pinnacle where a small group of people control most of the wealth and they are NOT sharing it. For capitalism to survive and thrive, there has to be at least a modicum of ethical behavior... We seldom prosecute the white collar criminal who is hiding behind the corportation...
Without strict regulation and stringent enforcement they will not stop on their own...
Real businesses need customers to buy their products at a fair price. When the cost of goods also includes the millions upon millions of jobs shipped off shore, then the cost isn't worth it if they gave away their products. We ALL need to act like patriotic Americans.

[ChasG]

04:57 PM on 08/28/2011

I agree to a certain extent; we are witnessing the predictable end of "capitalism" as a growth-oriented economy, which has more to do with finance that with free enterprise. I do not believve we are witnessing the end of market-based economies, except for those products and services where there is an inflexible demand and a non-responsive and over-priced supply, such as healthcare. I believe we are on the threshold of the death of market-based healthcare, but not the death of all markets..

[bikerdude]

12:42 AM on 08/29/2011

I do not disagree with what you stated. I was speaking more to strict capitalism. Every other country is subsidizing their work forces and are much more strict with how companies are run than we are. I defy you to go to a country like England or Germany and "get a job"....Ain't gonna happen. Even if you work there as an American someone will have to pay for that privilege.

[getsit]

05:45 PM on 08/29/2011

The definition of Capitalism basicly says it is business and workers working together where both benefit. By undercutting the workers, not sharing with the PRODUCERS of wealth, and buying our Congress to go along with this whole scam on the middleclass, we can say that we have a Plutocracy. We vote but get no representation except from a few in our government who can't make any headway because so many of their compatriots are bought.

[bethel1974]

10:49 AM on 08/28/2011

The growth the U.S. is looking for will have to come from another or new industry that provides jobs and create a new paradigm

[bikerdude]

02:47 PM on 08/28/2011

OR we could add a tariff for each job shipped out of our country. Or we could insist that regulations tighten and and prosecution for violations are severe and consistent. It should not matter what color the collar of the thief who robs a bank or an industry.

[wtf is this]

11:59 PM on 08/28/2011

Switch your thinking to tax breaks if you create jobs in this country. More tariffs will only influence the companies themselves to relocate.
Meanwhile drop any loopholes that aren't directly related to US job creation.

[getsit]

05:46 PM on 08/29/2011

Penalize for every job that goes out of the country, give tax breaks for every job that pays DECENT WAGES AND BENEFITS. Not part time, low paying with no benefits jobs.

[wtf is this]

11:56 PM on 08/28/2011

There's tons of options. Think renewable energy or mass transit. But the country is not willing to invest in these -- they disrupt the dependence on big oil. Unless we're willing to invest something in towards the future, we're stuck with yesterday's technology

[getsit]

05:47 PM on 08/29/2011

I hope horses never become extinct because we may need them sooner than we think!

[bethel1974]

10:48 AM on 08/28/2011

QE2 and QE1 was a simple plan to replace the money that was drawn out of the economy by the greatest transfer of wealth in history. Under Bush so much cash was removed from the U.S. economic machine it could not be replaced. That is why corporations right now can make a profit by trading and investing instead of selling and manufacturing. All the money is at the top, and they have their eyes and hearts set on the Social Security Trust Fund. They have no intentions to employ people in the rates that was in the past necessary. Emerging markets growth is replacing U.S. growth and the MNC's see no reason to invest in the U.S. just maintain the status quo.

[bikerdude]

02:50 PM on 08/28/2011

Fanned and faved... You have beautifully said what I have been trying to say for a long time. I believe "transfer of wealth" as we have seen it, especially under Bush is a criminal endeavor and must be prosecuted as such if RICO is the instrument to use, so be it...
Thanks again...

[bethel1974]

03:38 PM on 08/28/2011

This nation needs all three forms of the GDP working together. Consumer, Gov't and Private industry. Right now you have all three not working. Neither is feeding into the other. With the tea party and GOP has effectively cut off the gov't consumption part so what is left. Private industry and they are not spending because the other two are not spending.

[ChasG]

04:03 PM on 08/28/2011

The greatest transfer of wealth, and the easiest to remedy, has been through the tax code over the past three decades. QE1 and 2 had nothing to do with a transfer of wealth, but an emergency measure to curtail the deflationary destruction of everyone's wealth from top to bottom.

[ChasG]

03:42 PM on 08/28/2011

"Greatest transfer of wealth in history?" That's been occurring over the past three decades, and has nothing to do with "Quantitative Easing" so-called. What happened that required QE was the destruction, not transfer, of wealth caused by the housing bubble followed by the deep and rapid deflation of housing-based wealth when the bubble burst. Destruction of wealth and transfer of wealth are not the same thing, but what they have in common is a disproportionate effect on those with the least amount of wealth to begin with.

[bethel1974]

04:02 PM on 08/28/2011

I beg to differ. Housing was not the only catalyst in this destruction that has occured. We have seen wealth transferred, now China, India, Latin America, Middle East has disportionate wealth based on the U.S. outsourcing and importing everything the U.S. citizens need to function in life. What do you think was being passed for payment, U.S. dollars. QE is a reactionary step to fill the hole that has been dug by the lose of consumer buying power and gov't lack of spending on goods not just giving money to wall street.

[aynrandfan2012]

09:58 AM on 08/28/2011

Krugman.......the smart dummy.......Krugman is highly educated in failed philosophy......He is educated in a form of morphed Keynesian economics......Jonh Maynard Keynes want to smooth out the business cycle (which will never work anyway)......but Krugman has kept the same premise,but adds in wealth redistribution coupled with mindlless regulation and deficet spending.....Krugman also worships Altruism/Collectivism......which is the worlds oldest philosophy of failure......He takes the Individualism out of the picture of Economics,and replaces it with collectivism....which is what destroyed every Country throughout time.....Altruism/Collectivism are incompatable with Freedom.......Krugman is the path to poverty,starvation and economic collapse...

[bikerdude]

02:57 PM on 08/28/2011

If Ayn Rand was alive today she would be appalled by what these white collar thieves have done. "Krugman also worships Altruism/C­ollectivis­m" is a laughable charge. The world's oldest philosophy of GREED which we see playing out right now. We need to prosecute the "individuals" who have banded together to keep the wealth in their own hands. They are using LACK of regulation and enforcement as permission to commit robbery. For freedom to work, there MUST be a level playing field not one slanted to the advantage of the privileged few..

[aynrandfan2012]

04:25 PM on 08/28/2011

you are wrong sir...........greed is the worlds oldest way......the protection of mans rights is the answer.....you can have Washington tax and spend your money all you want to....the outcome of Big Gov will always be the same

[Peter Combs]

01:21 AM on 08/28/2011

The fact is, no one who understands the role of the Fed, who heard Bernake's comments from two weeks ago and his comments prior to the ending of QEII thought he would do anything.

He said repeatedly in the recent past he wouldn't. If you know anything about the Fed, this Chairman or past Chairman, they rarely say anything unexpected or shocking...and are very careful to ease into new policies.

The Fed cannot lower Interest rates any lower..and QE has had little to no effect which is discernible..WHile he has some options, they are rather limited, anything beyond that would require a policy change in Washington on all sides, highly unlikely for now. Even more unlikely as their is little reason to do anything until the EU decides their future, the bailouts and whether or not the EU will survive longterm. Our own economy is interlocked with Europes...pumping our own economy at this point might be a waste of time.

[ChasG]

05:25 PM on 08/28/2011

"QE has had little to no effect which is discernibl­e." The key word in this sentence is "discernable." It is extremely difficult to prove what didn't happen because it was avoided, but QE was applied during a period of deflation, which then ended within the year or so. Deflation has historically been show to be a self-fueling downward sprial that likely caused the Great Depression. I think we have successfully avoided that, and not by accident.

[ChasG]

05:30 PM on 08/28/2011

I agree with most of the rest of your comments, but would add one consideration; the recent economic slowdown which began in March/April coincided with the debt crisis fabricated by the Tea Party's brinkmanship. We may see a slow summer, because that is often the case, but there's a very good chance seasonal economic growth will resume within a couple of months without any additional QE or stimulus. We still need more stimulus spending on infrastructure to sustain this growth beyond a period of spending, because infrastructure spending creates national wealth and facilitates commerce.

[LibertyRoy]

12:29 AM on 08/28/2011

Time to get Krug back on the me.ds

[S M V]

08:43 PM on 08/27/2011

Thank you Dr. Krugman for the first positive news I have heard today. The fact the political pressure is working making it possible that the Fed will avoid trying to create the next bubble to cover up the last is very encouraging. I also ask that you please return to your economic roots and stop being a cheerleader for government management of our economy.

Thank you.

[intolleft]

08:17 PM on 08/27/2011

The aliens are causing it Paul....the aliens.

[rotorhead1871]

05:00 PM on 08/27/2011

the guy is looking like he is from MARS...and talking like he is from....well....not our world...

[redscarecrow]

12:33 PM on 08/27/2011

Hey, Free Marketeers, the corporate/political elite do not want free markets and do not allow them, and any freeing up of markets (ie deregulation) is always on their terms. Friedrich von Hayek is a fantasy like Selma Hayek.

[S M V]

08:56 PM on 08/27/2011

Just a quick question. Who said this during a presidential debate?

[S M V]

08:59 PM on 08/27/2011

Just a quick question. Who said this during presidential debate:

"I share the basic beliefs of my region about an excessive government intrusion into the private affairs of American citizens and also into the private affairs of the free enterprise system. One of the commitments that I made was to deregulate the major industries of this country. We've been remarkably successful, with the help of the Democratic Congress. We've deregulated the air industry, the rail industry, the trucking industry, financial institutions; now working on the communications industry."

Answer: retraC ymmiJ

[cynic1]

09:17 AM on 08/29/2011

No doubt - deregulation has been an ongoing mantra of both parties for the last 5 decades. We have only had more government regulation when it became too obvious something had to be done. Use tobacco as an example. Since 1960 folks knew tobacco killed but it took until the 1990's to stop cigs from being advertised and elimination of public smoking. The show Mad Men shows how drastically things have changed. Government only acts when it is forced. Otherwise politicians are the b-otches of Corporations