Submitted by: Mike Spindell, Guest Blogger
When I started as a college student about 50 years ago I took the Sociology I course as a required subject. There is little I remember from that course and less I remember about the instructor, except for his introductory words on the first day of class. To paraphrase him he said: “You will be taking a lot of courses in what are called the Social Sciences. Approach them all, including mine, with skepticism because they really aren’t science courses like those you’ve learned as a high school student. They will spend a lot of lecture time though trying to prove they are truly scientific, don’t believe them”. His clear meaning was that although the Social Sciences try to operate as if they are using the scientific method of experiments/research to prove theories, most of the work done is skewed to prove the theory of choice by those doing the research. In the five decades since that lecture my own experience and reading has taught me how true the advice from that long forgotten Sociology instructor is.
The social science that has my attention at the moment is Economics. I’ve read many an economist, from all points on the political spectrum and frankly while I favor those such as Krugman and Baker, I take most of what they say as opinion, rather than scientifically determined truth. Yes I’ve even read “Freakonomics” by Levitt and Dubner and the follow-up “Superfreakonomics” and while they were good reads I see them as not only bad science, but a conflation of economics with other social sciences that is superficial at best. This is really the problem with many economists and their theories. They presume to divine human behavior via the prism of economic theory. In the end their proofs are merely retrofitting their pre-judgments. That brings me to the “Austerity” movement which has hampered the recovery from the economic “depression” brought on by the wars and tax reductions of the Bush years, while it has also caused a crisis worldwide through its imposition upon many nations. The foundation research that has justified this “Austerity” movement came from two Harvard Professors: Carmen Reinhart and Kenneth Rogoff. A University of Massachusetts student Thomas Herndon found that their work was filled with mathematical errors in their research spreadsheets. http://www.huffingtonpost.com/2013/04/16/reinhart-rogoff-austerity-research-errors_n_3094015.html Their spreadsheets were their “proofs” that economic austerity promotes economic recovery and this theory, long held by many economists, is the basis for the imposition of austerity onto so many Nation’s economies and is the source of bitter national debate in our own. Though I will present some overview and links amplifying “austerity’s” false assumptions, my interest is in presenting my view on why the powers that be have imposed this doctrine, whose effects fall squarely upon 99% of the people of these nations, leaving the wealthiest unscathed.
Thomas Herndon with others published a paper about Reinhart/Rogoff’s findings stating this:
“ The new paper, by Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst, set out to reconstruct the findings of an influential 2010 paper by Reinhart and Rogoff, called “Growth In A Time Of Debt.” Reinhart and Rogoff, both of Harvard, claimed that economic growth slowed fairly dramatically for countries whose public debt crossed a threshold of 90 percent of gross domestic product.
The problem is that other economists have been unable to recreate Reinhart and Rogoff’s findings. Herndon, Ash and Pollin now say they were able to do so — but only by leaving out big, important pieces of data.
Using the same spreadsheet that Reinhart and Rogoff used for their research, Herndon, Ash and Pollin found that “Growth In A Time Of Debt” was built around a handful of significant errors. Correcting for those errors changes the findings dramatically: Average GDP growth for high-debt countries jumps from negative 0.1 percent to 2.2 percent.”
What we see then is that calculation “errors” showed that GDP growth for high debt countries actual increased rather than decreased. Reinhart and Rogoff (R&R) have been arguing that debt decreases GDP as the rationale for austerity and their argument seems not only unproven, but wrong. It gets worse.
The Harvard economists have argued that mistakes and omissions in their influential research on debt and economic growth don’t change their ultimate austerity-justifying conclusion: That too much debt hurts growth.But even this claim has now been disproved by two new studies, which suggest the opposite might in fact be true: Slow growth leads to higher debt, not the other way around.
In a post at Quartz, University of Michigan economics professor Miles Kimball and University of Michigan undergraduate student Yichuan Wang write that they have crunched Reinhart and Rogoff’s data and found “not even a shred of evidence” that high debt levels lead to slower economic growth. And a new paper by University of Massachusetts professor Arindrajit Dube finds evidence that Reinhart and Rogoff had the relationship between growth and debt backwards: Slow growth appears to cause higher debt, if anything.
As you can see from the chart from Dube’s paper below, growth tends to be slower in the five years before countries have high debt levels. In the five years after they have high debt levels, there is no noticeable difference in growth at all, certainly not at the 90 percent debt-to-GDP level that Reinhart and Rogoff’s 2010 paper made infamous. Kimball and Wang present similar findings in their Quartz piece.
This contradicts the conclusion of Reinhart and Rogoff’s 2010 paper, “Growth in a Time of Debt,” which has been used to justify austerity programs around the world. In that paper, and in many other papers, op-ed pieces and congressional testimony over the years, Reinhart And Rogoff have warned that high debt slows down growth, making it a huge problem to be dealt with immediately. The human costs of this error have been enormous.
Even after University of Massachusetts graduate student Thomas Herndon found Reinhart and Rogoff’s work included errors and that their 2010 paper was missing important data, the researchers stood by their ultimate conclusion: that growth dropped off significantly after debt hit 90 percent of GDP. They claimed that austerity opponents like Paul Krugman have been so so rude to them for no good reason.” http://www.huffingtonpost.com/2013/05/30/reinhart-rogoff-debunked_n_3361299.html
What is so infuriating about R&R is the destruction that follows in the wake of there now debunked theories. The unemployment in Europe is has reached record high levels high levels, countries like Greece and Spain have rioting in the streets and a new neo Nazi movement is gaining popularity throughout Europe. http://www.huffingtonpost.com/2013/05/31/eurozone-unemployment-record-high_n_3364881.html The cost in human suffering is incalculable, but these fatuous academic asses are not concerned with people, they are concerned with their reputations and they are concerned with catering to wealth. Their theories, rather than being the result of real research and experiment, are in effect self-fulfilling prophecies. This is NOT science; it is overweening egotism in tandem with uncaring self interest. This tale, however, gets worse. Huffington Pos contributor: Mark Gongloff wrote this article on Friday: “Austerity Fanatics Won’t Let Mere Economics Stop Them From Thinking They’re Winning” in it he writes:
“Like Hiroo Onoda, the Japanese soldier who hid on an island in the Philippines for 30 years refusing to believe Japan had lost World War II, austerity fanatics are never going to admit their failure. Instead, they are going to keep pushing the policies that are making millions of people in Europe and the United States miserable.
The latest example of their denial is a piece by Michael Rosen of the American Enterprise Institute, a conservative think tank, entitled “Austerity And Its Discontents.” He declares that, far from being shamed by the recent discovery of errors in influential research by Harvard economists Carmen Reinhart and Kenneth Rogoff, austerity fans have recently gained “the upper hand” in the global argument over austerity.
Rosen argues that Reinhart and Rogoff’s many loud rebuttals to their critics helped give austerians the “intellectual high ground.” He ignores that, in fact, Reinhart and Rogoff’s rebuttals have only compounded their errors. He also ignores that further research has debunked Reinhart and Rogoff utterly, revealing that their biggest mistake was in confusing the cause-effect relationship between high debt and growth. It turns out, contra Reinhart and Rogoff, that there is no evidence that high debt causes slow growth — in fact, the opposite might be true.
But then the austerians have never really needed the intellectual high ground. Their phobia of government debt is based mainly on the idea that debt is just bad because of course it has to be. It is bad when people take on a lot of debt, ipso facto the same thing is bad for government. We must eat our spinach, not our dessert!
Rosen is absolutely right when he points out that Germany, and the American Enterprise Institute, and the Wall Street Journal editorial page, and Michael Kinsley, and the many, many other long-time fans of austerity have only redoubled their efforts to push austerity measures in the wake of the Reinhart-Rogoff debunking and re-debunking. http://www.huffingtonpost.com/2013/05/31/austerity-failure-fanatics_n_3367787.html?ref=topbar
Now that I’ve presented the situation to you at least from my side of the fence, you can make up your minds about austerity. While I agree with many of the conclusions delivered by the writers quoted above my slant on it all is somewhat different. I believe that all economic theories and political theories, despite their validity, mask what is truly going on in our world today. It is easy of course to compare the call for austerity by conservatives under Democrats and the out of control spending and debt run up in the Reagan, Bush I and Bush II administrations. This comparison would lead one to believe there is fiscal hypocrisy at the bottom of this and that is true. However, the fiscal hypocrisy exist as much among Democrats as Republican’s as Max Baucus proved in his terms as Senator. Bill Clinton cut government to balance the budget. He aided in the erasure of Smoot Hawley and he hurt American jobs by signing NAFTA and CAFTA. President Obama has likewise played the fiscal conservative card, while complaining it has been forced on him. He has even put cuts of Social Security and Medicare on the table, although neither is related to the national debt.
What is happening here is the result of the wealthiest people and the largest corporations becoming international entities. The rise of the multi-national could well herald the decline and fall of the nation state. From the perspective of the “Haves” it makes perfect sense. Why be bound by the laws of a particular nation, when you can break free and roam the world as you please? Truly, to these multi-nationals and the people behind them, the world is their oyster. The only problems they have are government regulation, taxes and those pesky workers who want more wages. The solution is to bring the 99% to a level slightly above starvation. This ensures that they will work for any amount that helps them put some food on the table. It necessitates that social assistance programs be destroyed so the peasants will have no choice but to seek shelter from devastation at some low paying job that keeps them little above subsistence.
Imagine yourself as one of the Super Rich, or as the CEO of a huge multinational corporation. My guess is that most of them see themselves as extraordinary people, chosen by fate or God to be in their exalted positions. They are able to go anywhere in the world on a whim. They don’t have one palatial home they have five, some in the world’s greatest Cities and others in the world’s most beautiful places. They don’t have one luxury car they have twenty collectibles and a fleet of limousines to take them place to place, flanked by bodyguards. While it’s true some wealthy eschew these outward signs, usually it is done as some sort of reverse snobbery, like the Kennedy penchant for driving Oldsmobiles, or J.B. Hunt driving to work every day in an old Chevy, with a paper bag lunch prepared by his wife.
The rich are not like your and me and moreover they know it. The truth is austerity is one more step on the road toward worldwide feudalism. Our wealthy class has helped to plot this out and they are served by people like Reinhart and Rogoff as courtiers and henchmen. They are leading us to a chaos they believe will result in solidifying their hold on the world and their eventual Nobility. However, when chaos descends on society through the discontent of so many, even wealth might not be protection against the violent psychopaths that gain control. That’s what I think about austerity, what do you think?
I guess post are still being censored.
The US Titanic hit a iceberg in 2007 & the Fed Reserve is pumping 85 billion month of more water & Carmen Reinhart, Kenneth Rogoff & Paul Krugman are arguing of what tunes the band should play next.
Me, I’m trying to stay in the lifeboat & ask others how we can get rid of the Federal Reserve System, Wallst Banks/Insur. Co’s & the IRS for individuals if we make it back to dry land “after” the crash that’s headed this way.
Bron, David Blauw, others, Buddies, Suck It Up! LOL;
Remember this turd after he, Buffet, Wallst theives got their massive govt welfare bailout check? Time for some austerity for these type of creeps.
**More on Munger’s descent into dementia:
At the Michigan event, one questioner said he had attended both Berkshire and Wesco meetings. “You mean the groupies have followed me here?” Munger asked. To another who asked whether the government should have bailed out homeowners instead of Wall Street, Munger said: “You’ve got it exactly wrong.”
“There’s danger in just shoveling out money to people who say, ‘My life is a little harder than it used to be,’” Munger said at the event, which was moderated by CNBC’s Becky Quick. “At a certain place you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in and cope.’”
When one hears hypocrisy like that, what can one say but – Charlie Munger. Of course, when financial organizations, and complete bankrupt states comes begging for money to their respective central banks, as is the case each and every day in Europe, and soon among the various broke states in the US, not to mention thousands of pension funds, sucking it in is such an anathema. Or at least it would be to people like Munger and Buffett, who have invested their entire life savings in the perpetuation of a regime that will eventually result in the same social upheaval if not outright global conflict, that Munger laments caused WW2.
Luckily for him, he won’t be around to see it.
300 million other Americans, however, won’t have the same privilege.
For those who wish to projectile vomit at their monitors, here are two straight hours of unbridled hypocrisy. **
http://www.zerohedge.com/article/munger-tells-25-million-americans-suck-it-and-thank-god-bank-bailouts-brk-benefits-95-billio
dAVID Blauw:
you might want to look at government printing presses as well. they have stolen far more wealth than the “banksters”.
Mike Spindell:
then you havent looked at the Baltic states. Neither have you looked at the growth of government spending in those countries in Europe which are not doing well.
So all in all your article is pro taxing and spending. Which is actually what puts the “peasantry” in bondage.
Adequate living wages and standards come from a good economy where labor can sell itself to the highest bidder. Just look at the want adds for jobs in the oil fields of North Dakota if you dont believe me.
A farmer with 100 silos filled with corn is a happy successful farmer. He can trade all types of things backed up by his full bountiful silos.
Today Banksters have a 100 silos of money. Each one (on paper) claims to have a full value. …… But to look into these silos one finds derivatives, default swaps, futures trades, projected incomes, etc. all leveraged up to 40X earnings.
Political “science” Economic “science” theorists can easily explain why a silo 1/40th full is as valuable and equal to a silo that is full.
I am blue collar, High Falutin Finance is not my ken, so I am sincere when I call BS on this madness of 40X piles of phony money.
These silos are modern day financial towers of Babel. The Banksters keep building them higher, the walls thinner, the shingles more opaque.
Monuments of unfettered Capitalism, (symbols similar to the spam comment Mike mentioned clogging word press) LOL. More Bigger Better. In other words a “fantasy” false as a flying pig, wisps of smoke shaped to fulfill our hubricidal ignorance, a palliative for the masses, cocaine for the UberWealthLords, teetering in mild winds, soon to crash in a steady breeze.
Get ready Peeples of the world, we will soon be buying the farm again.
… Old Mother Milo / Went to the Silo
To get her poor middle class a Bone
But when she got there / the Silo was AIR
And She and Her middle class HAD NONE
Mike Spindell:
I have been doing a little checking and was wondering if you had looked at the Baltic states and the increase in spending in the European countries? Also did you take into account the boom during the Clinton years? Spending was cut then too.
I am not sure you have provided enough information one way or the other to come to any valid conclusions about austerity.
“I am not sure you have provided enough information one way or the other to come to any valid conclusions about austerity.”
Bron,
Much of the information I provided came from the quotes and links that I put in. Not only am I not an economist, but I made the point that I don’t trust economics as a predicative modality, rather I think it is people arguing their pre-judgments. The difference between our political views is that you are a free market capitalist, with a strong aynish tendency. I am a retired social worker, psychotherapist and Social Services executive, who believes that the mass of people need protection from the elite who rule us, plus adequate living wages and standards. The links and articles discuss the economics of the situation, but my remarks are pointed to the devastation that has plagued these societies due to austerity. Beyond that I clearly stated my viewpoint that in this Austerity initiative I see an attempt at imposing a feudal society upon humanity fostered by people who see themselves as “above” the peasantry that is represented by the 99% of humans.
Bron: I don’t think the question is whether it is valuable; the question is whether it preserves value any better than other valuable things.
Silver, except for the period when the Hunt brothers tried to corner the market, has been a better preserver of value than gold. Stocks in large cap dividend paying companies have been a better preserver of value than gold.
Silver has far more industrial uses than gold, and has been more stable, probably because there is less mythology and mystique about silver than there is gold, so perhaps less speculation about it, and fewer speculative bubbles.
Many things are valuable, and have inherent uses and utility. A house is valuable, but as we just saw recently, speculation can drive a bubble in pricing that collapses, and then the common investor gets screwed; because the way to make money in a bubble is to bet against the market and those bets require the extreme wealth of banks, corporations or individual billionaires that can take multi-million dollar risks (like buying credit default swaps).
When we talk about preserving value, in the face of inflation, we are essentially talking about preserving the hours of labor it required for you to buy the value-preserving item. When you sell it in a future economic environment, the “preservation” requirement is that it should buy just as much as your younger self could have earned in this new environment with the same number of hours. (That formulation conveniently sidesteps any questions about inflation, advances in technology, etc. “Value” is hours of work, in your current state of health and productivity.)
If you see things in this perspective, then preserving value is about buying things that are NOT rare, and NOT the subject of much speculation, but also are useful and do not rot or deteriorate, and are plentiful enough that the market is unlikely to be cornered, and the free market can be relied upon to keep prices relatively close, and financially speaking are semi-liquid and can be sold in a reasonable amount of time; i.e. neither buyers or sellers are rare, so competition on both sides exist.
I do not think rare metals are a very good choice for preserving value. In the face of constant speculation, it is too unstable, it is too difficult to tell what the “right” price should be. If the goal is to gamble, then instability can lead to big happy wins, or significant losses. If the goal is to preserve value without being blind-sided, anything with significant price instability has to be ruled out.
mespo:
and all this time I thought the Romans had textile mills, farms, far reaching trading posts, roads, water service, baths, etc. which brought civilization to barbarians. How much tax did the Romans exact from the conqured peoples? My guess was that it was less than what is extracted under our system and if the article is right so am I.
“[18] Many of the taxes then as now were indirect taxes that individuals paid, but were simply part of the cost of doing business. Most of these taxes were placed upon goods as they traveled from one part of the Empire to another, collected as transit tolls or portoria at town gates and harbors. These taxes could amount to 2 to 5 percent of the value of the goods.[10] Several specific taxes were added during the reign of Augustus: a 1 percent tax on items bought at auction (akin to our sales tax) and a 5 percent tax on certain cases of inheritance. There was also a tax in place on the sale and the manumission of slaves of 4 to 5 percent. Much like our own dizzying number of obscure indirect taxes, they too had a wealth of small taxes on all manner of goods and transactions, many of which we know about only thanks to random references. Thus for instance there were at various times taxes put on nails, and yes, even on the collection of urine (a necessary component in the textile industry).[11]
[19] Then, as now though, the taxes that people complained about and felt most heavily were direct taxes which they had to pay on specific occasions. The most significant of these taxes was placed on the major source of economic production in the ancient world: land. Individuals were required to pay taxes on land owned outside of Italy. These taxes were assessed by surveyors who evaluated the tax burden of plots based on geographic features and the quality of the land. In theory this tax as it was estimated by the government usually should have amounted to about ten percent of production. Because of the many layers of profiteering, in reality the land taxes actually paid were likely to be much higher for most people and could even be lower for the very wealthy thanks to their political connections and influence. In addition to the considerable burden of the land tax there was also a poll tax collected on individuals who were not citizens. The census that appears prominently in the Gospels during the reign of Augustus is fundamentally a tool of taxation: tying people to their land and counting them for purposes of tax collection.
[20] In the ancient world, much as today, all of these direct taxes created a paper trail. Written on papyri, this ancient paper trail preserves scattered moments in individual lives as people fulfilled their own personal tax obligations. Beneath their dull exterior the tax documents offer fascinating expressions of the real and perceived burdens of taxation with some very familiar accompanying sentiments.[12]”
The Romans provided public works too. I am pretty sure this article is speaking about the 1st century.
I would be more than happy to pay 10% of my annual income and 4-5% in sales tax along with other use taxes. Those parasitic Romans, what does that make the US government?
nick:
“When we’re in Alaska I eat Halibut almost daily. The best fish in my book.”
I dream of fresh halibut, I used to eat it every chance I got. It is a wonderful fish.
tony c:
George Soros is indeed a brilliant man. But gold will always have a store of value just like other precious metals such as palladium, platinum and silver just for their industrial use.
Michael Murry: Three good posts.
Although I do not agree with Orwell’s analysis. Continuous war does use up products of industry, that is true, but the point isn’t to avoid increasing the wealth of the world, or to keep an hierarchical society (which is a result of human nature and inevitable) it is to steal the wealth constantly being created.
I do not have Orwell’s poetry; but in essence wealth is created by hours of human labor, physical or intellectual. Either activity consumes calories, which are as cheap as potatoes, and produces something worth much more than the calories that went into it.
This is the reason slavery is profitable; a slaver puts in food calories and the human labor that fuels produces something that not only pays for all the food calories, but the coercive forces required to keep people working as slaves, with enough left over to also make the slaver rich. That is why slavery has to be outlawed, because it is extremely profitable, but the majority of people with a conscience do not believe profit should be obtained by this route.
We can say the same thing about the minimum wage. After outright slavery was outlawed but before there was a minimum wage, an indirect form of slavery was discovered; exploitation of the desperation of workers faced with starvation or working in unhealthy, dangerous work for barely subsistence wages. Again, stealing the value created by their labor.
The ceaseless wars against labor unions, collective bargaining, minimum wage increases, safety regulations like OSHA, taxation to provide retirement (social security) and healthcare (Medicaid, Medicare, health insurance) are driven by simple greed and the profit-motivated desire to get as large a share of the wealth being created by human labor (physical and intellectual) as they (the elite and wealthy recipients of these rewards) can take.
To tie it back to Mike’s post, they do not mind debt spent on wars if that money is spent buying their products, protecting their wealth, or creating new markets. They do not like debt spent on people as social benefits, however, because they see that as ultimately cutting into their profits by increasing their taxes, or requiring inflation that reduces the purchasing power of their accumulated wealth. Debt is just an excuse to demand austerity. War is used similarly; any excuse for austerity is a good excuse until it affects military spending, because that kind of austerity reduces spending on social programs which cut into profit.
Poverty and ignorance are nowhere near as important to the hierarchical society as Orwell thought. Certainly if we delineate poverty and ignorance relative to the global scene, the typical American suffers from neither. But the typical American is still being robbed of a rightful share of whatever profits their labor produces (and it is a share, not all of it).
The problems are driven by greed. Wealth isn’t a constant, new wealth is created every day by human labors, that is eventually translated into stores of wealth (human labor units) and the exploitation is all about diverting some unfair share of that created wealth into one’s pocket. As they say, follow the money, because 90% of the motivations really are all about money. A small part is played by egomania, hatreds, paybacks, spite and jealousies, but seldom enough to sacrifice any significant profits upon those altars.
Mike Spindell 1, June 2, 2013 at 6:42 pm
Dredd & Oly1,
Your stuff wound up in a the spam filter, perhaps because there is an unbelievably heavy traffic of spam comments (from Penis Enlargement to Louis Vuitton). I identified them as not spam, which they clearly weren’t and they should (I hope) appear shortly.
=======================================
Thanks.
Mr. Word Press was educated in the propagandasphere like the rest of us, but has not thrown of some of the shakles we have thrown off.
I requoted part of it to our local historian, nick, and it was evidently seen as subversive extremist mythology by Mr. Word Press.
Like all actual history seems to be treated these daze.
Let us keep our eyes on the prize, so to speak:
So, more poverty and ignorance, please!
Hence the ceaseless, counterrevolutionary attacks by the ruling corporate oligarchy against labor unions and collective bargaining, national health care, and public education, all of which “threaten” to help lift the working class out of poverty and ignorance and into the middle class. Can’t have that. Must have a “war” against that. Naturally, our rulers label that which they most fear — namely, us — as “Monolithic World Communism” and “Global Terrorism,” etc., anything that will frighten and distract us “proles” from even supposing that our government exists every bit as much to serve our interests as those of the 1% who already have more than enough to impress their friends and neighbors.
No more phony “war.” No more deliberately induced poverty and ignorance. No more parasitical 1%. We don’t need them. And, anyway, they won’t starve without their phony “wars.”
The ruling corporate oligarchs use the phony “war” paradigm (and have since 1945) to terrify into submission and effectively impoverish huge numbers of Americans. In this way the corporate rulers of the United States wage open war against their own subjects — which means, us.
They have no problem with either big government or class warfare, just so long as they get to monopolize the former so as to exclusively practice the latter.
I liked your article, Mike S, but in it you only hinted at “war” and “tax cuts” as two major driving causes of the current and continuing global financial mess. Hence, “the most substantial element of state power” — i.e., “war” and its squandering of immense national resources — somehow has found itself “removed from public debate.” I suggest keeping it front and center. Ditch the phony “war” paradigm and get back to the proper business of America: peace and freedom.
Back in the 1980s, during my 15-year career with the Hughes Aircraft company (“Huge Air Crash,” as my mother called it) I would often get into political/economic arguments with my colleagues of the right-wing Republican (but I repeat myself) persuasion. I would ask them how they could attack U.S. government spending when that spending provided them with their jobs and livelihoods. This question would incense them, as if I had impugned the virtue of their virgin mothers. They would insist on lecturing me that “Government spending is only spending on social programs” (which they gladly took advantage of, but claimed to hate all the same). When I would point out the self-serving hypocrisy of their position, they would just huff at me, turn their backs and walk off. Conversation over. What they didn’t want to acknowledge, they simply called by some other name or flatly dismissed from consideration altogether. None of that has changed. But that needs to change, and fast.
Until the working people of the United States rid themselves of the corporate militarist parasites — both civilian and military — who afflict them, they will never even begin to address the means by which they might better their own economic and societal futures. As the meandering comments on this thread attest, what remains “on the table” once the real meat has managed to escape detection, wouldn’t nourish a gnat.
Paul Krugman: Debunked Reinhart-Rogoff Paper ‘Did A Lot Of Damage’ (VIDEO)
The Huffington Post
Posted: 06/02/2013
http://www.huffingtonpost.com/2013/06/02/paul-krugman-reinhart-rogoff-paper_n_3375212.html
Having a public spat with your colleagues and former classmates over the best way to fix the global economy can be “very unpleasant,” according to Paul Krugman.
The Nobel Prize-winning economist and New York Times columnist told Fareed Zakaria that “the stakes are high” in his public debate with Carmen Reinhart and Ken Rogoff, over their research which found a close correlation between high levels of public debt and slow economic growth. Researchers recently debunked the two economists’ findings, which were widely cited by pro-austerity politicians to justify cutting governments spending.
In the aftermath, Krugman has been critical both of the politicians who used Reinhart and Rogoff’s research to push for austerity and of the economists themselves for not doing more to admit that their ultimate conclusion was wrong. The two posted a letter last month accusing Krugman of engaging in “uncivil behavior” in his criticisms.
“This one claimed result — which is that growth falls off a cliff when debt is at 90 percent of GDP — that’s what the world picked up on and that result is false,” Krugman told Zakaria on an episode of his show “Fareed Zakaria GPS,” which aired on CNN Sunday. “That paper of theirs did a lot of damage by giving people who didn’t want stimulus, who didn’t want any kind of expansionary policy a way to scare their opponents.”
Indeed politicians’ rush to impose government belt-tightening in an aim to improve growth has had unfortunate consequences, especially in Europe. The eurozone unemployment rate rose to a record high 12.2 percent in April, thanks in part to the region’s drastic austerity measures.
And in the U.S., policymakers’ decision to slash government spending held back economic growth last quarter, according to Reuters.
Mark, BINGO!!
Joy:
The problem with your analysis is that you conflate our modern Western economy with that of ancient Rome. Rome’s economy was essentially parasitic in its Empire stage and while the Grachi’s failed in their bid to restore some semblance of economic class equality it is unfair to compare deficit spening and cronyism in a modern economy to one essentially based on plunder and for which debt instruments like bonds were an unknown commodity. If you want to talk about the corrosive effects on modern economies of deficit spending or the debilitating morale wrought by cronyism, we certainly can but to proclaim a total economic collapse of the West which an imploding US economy would entail ranks right up there with the type of analysis that appeals to folks who start their most important public commentary with, “Hey, dittoes Rush. Love the show.”
You seem to apply what you claim is the biggest flaw. You state your belief, then proceed to apply selective facts to bolster that belief. How are you different than the others? Is it because that you are right, and they are wrong?
Bron, If you ever want to get up to Canada, I highly suggest Banff and Lake Louise. We flew into Calgary which is a nice town. Whistler is also cool. Did that in a Vancouver trip. I think Vancouver is overrated, they have a huge heroin problem w/ the related street crime. Do you have any suggestions?