Stimulus

It's Mankiw v. Krugman.

Let me ignore the adage that when elephants fight the mice get trampled and join in.  This is from Krugman:

Which then raises the question: how can you believe that [if we could somehow get businesses to spend some of that cash, it would create jobs], and not also believe that if the U.S. government were to borrow some of the cash corporations aren’t spending, and spend it on, say, public works, this would also create jobs? (Brad DeLong has tried to make this argument repeatedly).

First, I have no doubt that a public works project could "create jobs".  In an extreme case, the day shift could dig holes and the night shift could fill them in.  At union scale, of course. 

Now, one might argue that the discipline of actually showing up and working at the team-oriented task of digging or filling holes developed useful job skills for the participants.  Then again, it might breed cynicism and skepticism, so let's agree that the social value of the dig/fill jobs program is zero.  In that case, rather than "creating jobs" by way of useless public works it would be just as efficient to cut taxes for people likely to spend the money, or hand out money to random passers-by, or extend unemployment benefits. 

Yet we won't find Paul Krugman arguing for the stimulative benefits of, for example, a cut in the payroll tax. Presumably he believes there are all sorts of worthy public works projects representing positive value-added that have never been undertaken because We the People have heretofore been too foolish to spot their value.  Maybe!  Or maybe the sorts of public works likely to be quickly undertaken are simply not that valuable.

From a different perspective, Prof. Krugman would fall down laughing at the notion that temporary tax cuts could induce permanent changes in consumer or business behavior.  And most economists would join him - as recent examples, the cash for clunkers credit propped up sales until it lapsed, as did the home-buyers credit.

Yet Prof .Krugman is perfectly comfortable insisting that a temporary increase in spending will produce longer term changes in business and consumer behavior:

Spend now, while the economy remains depressed; save later, once it has recovered. How hard is that to understand?

Could he be right?  Maybe - the key would be to disguise the spending, not so easy in this age of transparency.

The problem with temporary tax cuts is that "everyone" knows they are temporary.  Stores don't restock after a successful tax-refund sale; factories don't expand, hire new workers, and run more shifts to meet the new orders.  Everyone knows it is a one-time event.

Some public works provide the same transient demand and have the same zero-impact.  However, certain types of spending are well-disguised. If a government work crew breezes into town to patch all the potholes or expand the library, merchants know the demand created by those workers is temporary.  But a guy spending his unemployment check looks a lot like a guy with a regular job.  And a policeman or teacher who is getting paid by way of a Federal grant doesn't look any different from a policeman or teacher who has had a regular job for years.

If Krugman is right that people can't figure out that the government-sponsored demand is transient, it may induce permanent changes in hiring or spending decisions.  Otherwise, a government program widely understood to be temporary will have about as much impact as a tax cut understood to be temporary.

Comments

[Clarice]

Today's Legal Insurrection has the pics you are looking for. Stimulus money spent to build sidewalks no one is using..crews are finished and gone and downtown stores are still empty.

[Danube of Thought]

It is clear that Krugman sees no difference at all in the social utility of work financed by private enterprise in the expectation of earning a return, and work financed by the taxpayer for jobs, jobs, jobs.

[Extraneus]

"if the U.S. government were to borrow some of the cash corporations aren’t spending"

You know what I'd rather hear than their rationalizations? Their moral arguments. That would presumably be more honest, but I guess it might not get them the big prizes. The feathers would be pretty hard to wipe off, too.

[NK]

Hey TM--

a rare serious comment from me. You give Prof. Paul "Fraud" Krugman way too much credit. This Krugman "stimulus" discussion is both sterile and fraudulent because Krugman intentionally, and fraudulently, excludes DEBT from the discussion. The TRILLION PLUS dollar stimulus Krugman pushed the Congress to adopt has been 100% debt funded-- there are no national savings to draw upon. Ignoring the interest cost owed on the TRILLIONS of dollars of Debt the Congress has floated in the last 18 and pretend government "stimuls" is free, is yes fraudulent. Worse, for the reasons you touch on the "stimulus" spending has been virtually all transfer payments to politically favored interest groups; public unions, the UAW, low income households that don'rt even pay income tax, and democrat party politicians in bankrupt states and cities. No new airports, nuke plants, or even wind farms for G_d sake have been built. Remember Krugman used to justify this "stimulus' becasue of the 'multiplier effect' of government stimulus; the multiplier Obama used for his sales pitch?. Krugman's dropped that multiplier nonsense, because he knows nobdy would buy that BS today. Our experience in the last 2 years proves that debt based government service has an economic value of something LESS than 1. So while the stimulus pushes on a string and causes no real economic growth today, the cost of "stimulus" -- the future debt service -- is real and will reduce future growth. Today's economic problems are ultimately debt based-- too much debt carried by consumers, businesses and government during the last 7-8 years. Solution? a big ole' crap sandwich being eaten by everyone based on deleveraging and asset re-pricing i.e. asset values going down. Businesses that stayed in business have largely done that, consumers have been forced to do that by reduced credit availability -- the Federal govenment- Hah! Its attempt to defy the iron law of market valuation is a sick joke. So don't give Krugman credit he doesn't deserve. By ignoring the 800 lb debt gorilla in the room, Krugman proves himself to be a fraud.

[srp]

To understand the mentality of modern Keynesians you have to really take in their belief in a gap between "actual output" and "potential output." They see lots of slack resources (unemployed people and machines) along with ultralow interest rates and conclude that we are far below our "potential" output. Why? Because they think that all the investors and employers are basically waiting for everybody else to make the first move--"I'll hire and invest if you hire and invest because then there will be enough demand for the increase in what I make/sell." it's all a big coordination problem, in their view.

So if you take this view, the government borrowing money to employ people is making the first move. Since the resources (capital, land, labor) would have been idle absent the government program, there is no real cost to putting them to work and then businesses will get confident that more people are going to be employed consumers, more investment and employment is going to be generated to satisfy those new consumers, etc. (hence the "multiplier").

Mankiw effectively points out some of the big holes in this simple theory in a way that Keynesians will recognize. But they will not recognize debt as a problem when it can be incurred at zero interest rates out of the cash hoards of willing lenders. There the problem is one of sovereign debt credibility--everything is fine just before you go over the cliff.

[Ignatz]

A merchant may not know whether a particular client is using money from unemployment or a job but he knows generally when there are a bunch of unemployed people so the effect of not knowing whether certain demand is from what source is not analogous to the certain knowledge a tax break is permanent or temporary.
Moreover the borrow-money-private-corporations-aren't-spending argument has a rather serious flaw.
There is usually a very good reason corporations aren't spending money; because the market is signalling not to. So when government sops up the money companies aren't spending when they shouldn't be there is less for them to spend when market conditions are favorable to spending. So sustainable growth is sacrificed for short term, make-work stupidity like cash-for-clunkers.
Sane people see cash for clunkers and the homebuyer tax credit as the colossal, pointless, acceleration-of-demand failures they are; Nobel Laureates somehow see them as successes.

[Rick Ballard]

NK,

Mankiw handles a portion of that argument in his too brief rebuttal. The fraudulent aspect of Krugman's fantasy (IMO) is that he uses only current interest expense as the "cost", totally ignoring the fact that the Fed is holding down rates to historical lows that cannot be maintained ad infinitum. He also willfully ignores the danger posed by Treasury to continuing to finance at very short duration. It is quite conceivable that the interest cost of the current debt load could double in four to seven years and put the US in a position that would be classified as bankruptcy (no hope of future income ever providing funds sufficient to repay debt).

[srp]

Rick's last comment is a good elaboration of my last sentence.

[jimmyk]

a government program widely understood to be temporary will have about as much impact as a tax cut understood to be temporary.

I don't agree with this, though I'm totally not a fan of Keynesian economics. The reasoning is not the same for the two cases. Most people will save a temporary tax cut because it doesn't affect their "permanent income" (to use Milton Friedman's term). But spending is spending, and temporary spending can have a temporary effect, which may be all you want to do anyway.

The real problem with temporary government spending is not that it's temporary, it's that it never is temporary, and, as Mankiw points out, that means it results in huge future tax increases, which discourages private spending even in the present. People feel poorer knowing that their taxes are going up, businesses don't want to invest, etc.

[Captain Hate]

It's Mankiw v. Krugman

Maybe sylvia v. Krugman would be a more equitable pairing.

[Extraneus]

Does anyone still believe that Krugman's rationalizations are honest, even after the multiple posts at this blog highlighting his conflicting statements over the years?

The man's a socialist. Any argument that furthers government control of the means of production, and the fruits of the people's labor, is a good one, even if it needs to be self-repudiated at a later time. The progs will gladly forgive him.

[narciso]

it's curious when I read Drury in mid cycle, and McCarry, where he seemed to sketch politicians, like Edward Jason and Walter Dobius, who said utterly ridiculous and often false statements, but were taken seriously.
McCarry was the same way, specially when I read "Better Angels" in the late 80s, now the likes of Patrick Graham, seem an understatement. Krugman has to be the figment
of somebody's deranged imagination, like in
a Pirandello play

[hit and run]

Captain:
Maybe sylvia v. Krugman would be a more equitable pairing.

They should pair.

Just think of the offspring.

[Clarice]

IBD doesn't think much of the suit against Az either:

"The feds say they want to focus on cartels and ignore garden-variety illegals caught in the act of committing crimes.

But that only signals they haven't learned the lesson of James Q. Wilson's "broken windows theory," which emphasizes the value of enforcing against petty lawlessness to discourage far worse crimes and criminal networks.

It's one thing for Feds to not want to do their job. But it's appalling to see the government smear a state as racist, and then bring a lawsuit that only highlights its own failure to do its job.

If it's a crime to enforce federal law, then why do these laws exist?"

[Captain Hate]

They should pair.

Just think of the offspring.

The phrase "multiple DUIs" comes to mind....

[matt]

I would disagree, ext. Krugman is a statist/corporatist. Somehow, he thinks that by fiat government can dictate markets and is the vehicle for wealth creation. Mussolini, Keynes, and Marx made this mistake.Krugman is just following a path already trodden.

They don't get markets and the creation of wealth.

[jorod]

Unless those holes lead to new factories and offices, you are not creating jobs.

[stevesturm]

TM: you touch on but don't quite nail it. The key is whether businesses and consumers view the particulars of a given stimulus as something that will result in more people having more money to spend for more than a short period of time. If they do, businesses expand and hire, banks loan, consumers spend and all is well. If they don't view a particular stimulus positively, they continue to lay off workers and hoard cash... in other words, no recovery.

As you touch on, this explains why the public usually responds with a shrug to one-time tax rebates or boosts in government spending: they don't think those steps will result in a long term increase in confidence and spending and, in a self-fulfilling sort of way, confidence doesn't go up and the tax cut / spending is wasted.

And Krugman, for all his fancy credentials, doesn't see the forest for the trees. He only sees spending and he views it as an end-all... increase spending and the economy recovers, he never picks up that it isn't the spending, per se, that matters, but rather the public's reaction to the spending that is so critically important.

[East Bay Jay]

I'm starting to fell 'pro-stimulus' now that Prof Krugman has guaranteed near 0% interest rates until we have to pay it back. What? He can't actually guarantee that? Never mind.

Economists can't help drawing trend lines that reach out to forever. Regular people, after seeing these lines invariably change course 'unexpectedly', have good reason to be doubters. Economists miss and call too soon shifts all the time. Arguably economics is worse today than, say, 30 years ago - if they are any better it's logically due to more data points to factor in and Krugman, the only economist most people have heard of, is mobbed up in politics unfortunately so it's likely worse.

[Clarice]

It's not a science, East Bay. It's magic.

[sbw]

Why do these people not recognize that a gimmick used to make the speedometer read higher (more jobs) does not make an automobile move faster (more work serving real demand)?

They seem uninterested in the engine of the economy itself -- individual ingenuity rewarded by wealth creation that pays off everyone, and confidence that increases the velocity of wealth through the system.

When pedants talk what better approach is there than to laugh.

[Dave (in MA)]

"During the Fiscal Year 2012, the Air Force really will have to hold a bake sale to buy a bomber. It's a thrilling time to be a liberal." --Stephen Green

[Barry Dauphin]

We can create a lot of dig/fill jobs if we give the workers spoons to use instead of shovels.

[Porchlight]

When pedants talk what better approach is there than to laugh.

True, but pedants like Krugman are currently running the show, and it's becoming so scary as to not be funny.

BTW I just received your book from Amazon last week, sbw - looking forward to reading it.

[sylvia]

Here's an interesting article on business cycles and real estate. I haven't read it all, but so far so good.

http://www.foldvary.net/works/rebc.html

[sylvia]

A clip:

The elements of the Georgist theory are: 1) Land is essential for all production. 2) In any particular economic region, the supply of land is inelastic; it has a fixed supply. 3) When a boom is underway, the anticipated increase in land values induces speculators to buy it for price appreciation rather than for present use, which causes its current value to rise above that warranted by present use. 4). Once wide-spread speculation sets in, land values are carried beyond the point at which enterprises can make a profit after paying for rent or mortgages. Production slows down, reducing aggregate demand. The slowdown ripples through the economy, increasing unemployment and bringing forth a depression.

After land prices and rents drop, the normal rent and land prices are restored, increasing the profitability of enterprise. The economy recovers.

[sylvia]

More:

Karl Pribam (1940, p. 65) points out that in the latter stages of a boom, rentals fail to adjust themselves to costs, rendering building activity unprofitable. Since land prices are slow to move downward, they contribute to the break of the building boom. William Newman (1935, p. 18), echoing George, wrote that "Excessive land values, reached after the boom has continued for some time, are eventually found to have no counterpart in increased earnings, and therefore contribute to the break of the building boom."

[narciso]

Georgism, what alchemy is next on the burner, also you ignore this was a government policy
driven boom, through the CRA revisions, and Fannie and Freddie's involvement in the market

[Morgan]

Disguising the increased demand is probably even worse, because the increased spending/hiring is based on bad assumptions, that the increased demand is not transient.

The entire idea, whether disguised, open, or whatever, is taking money from one person and giving to another. It absolutely takes money from producing areas (the only ones that can be taxed) and puts it into less-productive areas (ideas no one would invest in rationally). Stupid. And it all derives from the idea that people are too stupid or unsophisticated to know what to do with their own money.

It will be a past, present, and future fail.

[sylvia]

More:

But construction in the cities continued with undiminished ardor during 1927-1928. From 1923 to 1929, the square feet of office space in Chicago almost doubled. So powerful was the 1920s boom and subsequent bust that no new office buildings were erected and no new large hotel was built from 1931 to 1950 (Hoyt, 1970, p. 153).

....Hoyt (1970, p. 532) remarked that the increase in the number of foreclosures in 1927 "was a barometer of approaching financial storms."

Murray Rothbard (1975, p. 86) reports that the money supply of the United States increased by 62 percent during the 1920s boom. The major increases took place in 1922-25. Most of the expansion consisted of loans, i.e. credit expansion. Here again, the money and credit system, this time orchestrated by the new Federal Reserve System, fueled the speculation.

[sylvia]

Yup, that article says it all. It's interesting to see about the boom and busts going back to the 1700's. It finally explains the business cycle.

[bgates]

When pedants talk what better approach is there than to laugh.

Well, there's throwin' stuff.

[srp]

Morgan: The theory is not that people don't know how to spend their own money. It's that no one will spend their money (or hire or invest) unless everybody else looks like they're spending. (And for some mysterious reason people won't cut their prices and wages enough to induce a restart that way.)

[koppnijaksen]

Ok, I owe the IRS money. But anyway they sent out stimulus checks for people to go buy stuff to stimulate the economy?right???

colotox

[AL]

Government of any level sucks in spending money. Private capital is way more effective in wealth creation.

There are cases when government is the last resort of the nation, like in case of war, financial meltdown, or severe recession. In that cases government spendings are arguably justified, even if all the money are borrowed, but for sole purpose of DAMAGE CONTROL. This is what Keynes talked about.

Hacks like Krugman is simply using such damage control measures to justify switch to government-run economy.

If government-run economy would be more effective than capitalist one, Cuba and N.Korea would be the richest nations in the world.

[AL]

Sylvia, for some reasons land (or in broader terms real estate) is used the same way as gold: as solid capitalization base to create money (capital), with a leverage of 5-30. Real price of 1 million house is 50 grand in land and 50 grand in brick and mortar. Remaining 900 000 is talked leverage.

[Old Lurker]

Al, I would insert a period after the fifth word in your 4:50 post.

[L!ink U!nder N!ame]

Melinda might enjoy the magnetism of the moment at the Blackboard. Lucia is the best. She reminds me of cathyf.
==========================

[narciso]

A little colocquoy on the course not taken, in the LUN

[Captain Hate]

Damn narc, I think you just broke Clarice's spellcheck with that sucker.

[sylvia]

Well AL, this article points out the role of "land" as compared to just real estate as an important driver of the economy. I think it's true.

"Homer Hoyt (1933, p. 233) remarked that "Wealth in the form of land or buildings which seemingly rests on so secure a physical foundation in fact depends on the ability of landlords to maintain gross rents above operating costs for long periods in the future". "

[sylvia]

On land in the 20's:

"Absorption of vacant land for new buildings starts a boom in vacant land and the subdivision of vacant land into lots for speculative resale. Many lots are laid out by real estate companies solely for the purpose of selling to "investors" without having to build on them.

From 1920 to 1929, 279,000 lots were subdivided in Chicago's Cook County, mostly sold to speculators.

In contrast, from 1930 to 1950 there was almost no subdivision of lots for resale; the subdivision was done for actual building (Hoyt, 1970, p. 153)."

[bunkerbuster]

What about China? They've dumped gazillions into stimulus and the place is booming. While matt and others toss around Mussolini references and talk about fiat money, the real socialists in East Asia are growing their economies like mad. I'd be the last one to suggest the chinese model is superior to the more mixed economies of the u.s. and europe, but I do think that if you're going to be discussing the performance of socialism meaningfully, you'll be looking at China and the rest of East Asia as Exhibit A rather than rambling on about Cuba, North Korea and the Soviet Union...

[Melinda Romanoff]

kim-

Fascinatinting comments. You can tell who's studied and who hasn't pretty quickly. I'll play there later.

Meet David Ricardo.

And search for a observation by him and named for him: "Ricardian Equivalence".

[rse]

I know you're sorry I'm interrupting Sylvia's flow but this (LUN) nails how the MSM simply avoids inconvenient but material and true stories.

I love this succinct phrase- If you get your info from the MSM most of what you "know" is not true and most of what you do not know is important.

The story in particular cites Byron York's google search showing massive avoidance of his NASA "foremost mission is Muslim outreach" story.

Enjoy and let's repeat that phrase regularly so that not knowing better becomes an embarrassment to anyone who thinks of themselves as educated and sophisticated.

[rse]

Mel-

I am sorry to have interrupted your flow.

[sylvia]

Well taking into consideration that real estate is overpriced, and that is the main reason for our recession, what could be our counter reaction to that. I think inflation for wages is the only way to adjust real estate prices downwards in comparison.

So I suggest fast tracking the rise of the min wage. And yes increasing government spending, perhaps across the board pay raises for all government workers, including the military, as well as hiring for new jobs.

[sylvia]

Or, instead, perhaps some more Fed money to compensate people who had to sell their homes at a loss to soften the blow, and I'm talking a lot of money, not just a tax write off, and then just let the real estate markets flow downwards.

[Melinda Romanoff]

Before meeting David Ricardo, there was a sentence that was dropped, and that comment makes NO sense, what so ever.

"As for the here and now regarding stimulus, this has been covered by a contemporsry of Adam Smith quite well."

Try inserting THAT before David.

Sorry.

[Old Lurker]

DFTT

[Melinda Romanoff]

sylvia, dear, is the current collapse of real estate prices, both commercial and residential, a destruction of credit or a stand alone price event? And is it deflationary?

If wages are to rise, where is the actual money going to be created for that hike?

I'll wait. And bring your last health insurance bill to use as an ID, so you can check in.

[sylvia]

Actually I don't think we should do anything for the economy, other than just wait for real estate to adjust downwards.

Maybe just some tinkering with slight min wage increases, which are already scheduled, and some slight high end tax increases to adjust for the growing deficit, but just because it needs adjustment anyway and would be good economic policy, not because it's going to save the economy.

[Melinda Romanoff]

OL-

Ooops, I thought I was using a shovel to whack it back under the bridge.

[narciso]

How about we don't assume anything Krugman has said is true since around 1997

[sylvia]

"a destruction of credit or a stand alone price event? And is it deflationary"

Your questions are inane. It is not solely a destruction of credit, because it is a result of rising prices and a lack of profitability. It is not a stand alone price event because it is the result of predictable gowth in prices due to predictable trends that have cycled throughout out history.

It is not deflationary until the profitablity decreases under the carrying costs, which is has in recent years, thus yes in recent years it is deflationary.

If wages were to rise, it would because we had inflation and we would grow the money supply. But it would be a calculated inflation needed to adjust the cost of real estate downward in comparison to wages.

Did you get tired waiting?

[Melinda Romanoff]

rse-

Flow? What flow? That made sense to you?

I must be way better than I think.

[voice goes shrill due to helium}

[Melinda Romanoff]

I want to play poker with you.

[Janet]

Great link to Powerline RSE.

LUN Feds Pressure Dems to Return Money From Convicted Financier
"That's it. The rest of them apparently lied when they said they'd pay the money back. They include luminaries such as Bernie Madoff pal Chuckie Schumer, Schumer puppet Kirsten Gillibrand, Dingy Harry, Frank Lautenberg, Chris Dodd, Dick Durbin, John Kerry, Carl Levin, Barbara Boxer and Al Franken, among others."

Only we the people are expected to "give" all our money to the feds. to finance their "great ideas".

[Janet]

and LUN is the latest Dana Milbank column trying to redeem Van Jones while making fun of..."Jim Messina, Obama's deputy chief of staff, who clearly hadn't shed his opinion that the president walks on water.".

IMO most of Dana Milbank's coworkers also think Obama walks on water...or are afraid to say he doesn't.

[narciso]

Well they would wiilingly take contributions from a fraud, 'professional courtesy' and all that

[sylvia]

You know, in times like these, I think we should ask... What Would Hitler Do?

Germany faced a bad depression and runaway inflation in the 1930's, but apparently Hitler enacted some changes that got the German economy going. So what did he do exactly, and can we copy it now?

[NK]

I hesitate, but I'll try responding to Bunkerbuster with a rational explanation about China ( I know BB is a phony Troll, but here goes):

1. Relative Growth: China has slowed considerably from a 2004-2007 10% annual real GDP growth trend to about 7%, which is very close to the relative decline of 2004-2007 US GDP growth to today's 2.0-2.5%-- hence Prof. Ferguson's "Chimerica" relationship still holds to a large degree, albeit at a less prosperous level for both countries;

2. Keynesian "Pump Priming" does have logic in 2 rspects a. Drawing down national SAVINGS and b. using those savings to spend for CAPITAL infrastructure -- China did both of those, they used huge currency reserves to spend on infrastructure needs thus their results were far better than the Krugman/Barry O nonsense-- In contrast Krugman/Barry O's plan was completely 100% debt financed and virtually all of the spending was used to subsidize welfare spending on public union salaries, UAW benefit packages, low income households and profligate state/local politicians -- those welfare recipients have unrealistic and unsustainable demands because they don't produce value for anyone else, so the money was spent, but no economic growth resulted. My proof?-- this week's first time jobless claims stuck on 454,000, the 4 week average stuck on 467,000. All BarryO did was add TRILLIONs of dollars of debt, and no jobs, no growth. You want more debt, no thanks. Our alternative because the US is not China? Let people make their own choices (less government regs), let them keep more of their own money (permanent low tax rates and NO VAT), and stop adding obscene debt to the public (cut governmrnt spending at all levels). This appproach created growth and prosperity for 220+ years of the Republic, and it will again -- and less work for lobbyists and power grabbing politicians. Cheers.

[Captain Hate]

How does Milbank expect anybody to swallow that garbage? The "green" movement has disgraced themselves by letting themselves be co-opted by idiots like Van Jones, not unlike how the anti-Vietnam war people were used by a bunch of commie fronts.

[narciso]

This is like that old Dan Ackroyd sketch about the leeches,

[Danube of Thought]

Raz spoiler alert:

Minus 17 today.

[narciso]

Technically, speaking, Capt, Milbanks is the idiot, it seems the brain slug has been reattached, Van Jones knows what he is doing,
they're going to have 'fumigate' the Omni Shoreham, for the next convention

[Old Lurker]

We all know how spending vast reserves and then debt on massive infrastructure worked for the Japanese don't we? As their lost decade extends on and on.

But at least they got the infrastructure; our "stimulative investment" was wasted as many here have observed.

[narciso]

Van Jones, is a Marxist revolutionary, just like Lloyd at the FCC, and his supporters at Free Press. You can't call things by their proper name anymore

[Janet]

LUN Why Does Obama Avoid Reporters

"America was sold a story -and this story had a very bad ending."

It makes me mindful of Captain Hate's posting of a comment from AoS...that the real story is the failure of journalists & the phony Obama America was sold.

[Rob Crawford]

Spend now, while the economy remains depressed; save later, once it has recovered. How hard is that to understand?

The problem is, never in my life have I seen the government save any money. The left screams to high heaven if you dare spend the same amount from one year to the next, let alone spend less. We've had increases in government revenues, but they've spent faster than revenue increases.

They need to simply stop spending. NO MORE. It's not their labor they're dedicating to ever more baroque and bizarre causes, and the amount they demand from working people is rapidly approaching the point of us being little more than serfs.

[Melinda Romanoff]

Rob-

You are supposed to be a serf to a Democratically elected Congrees. Dingle didn't say having to control people for nothing.

[narciso]

This does parallel the 'genius' thinking of Fallows endorsing the MITI led industrial policy, when that collapsed in '90, he just went on to something else

[Jane]

I'm getting really nervous about this administration. They seemed to have every front covered.

Boy I hope I live long enough to read the story when someone writes it - hopefully from jail.

[Danube of Thought]

Volokh has a little bit about the AZ lawsuit this morning. A law prof thinks the law may be enjoined because of the state usurping the feds' discretion to prosecute (not for the "trespass" offense, but for failure to carry papers).

[hit and run]

More Ras. We'll call it . . . unprecedented:

Overall, 36% say that the president is doing a good or an excellent job when it comes to the economy. Fifty percent (50%) give him poor marks in this area. It’s the first time his poor rating has hit the 50% mark.

Obama blames Bush.

[narciso]

How did his disapproval go down three points, was it the Arizona stunt

[Melinda Romanoff]

Jane-

I hope you live long enough to read it as well, but not from behind bars.

Kinda tough to keep a radio program up for your fans from the clink.

[narciso]

I'm reminded of that scene in the Stand, with this LUN

[Neo]

Simple solution to the problem ...
... take all the money going to and in the possession of economists and spend it on public works projects.

[Clarice]

DoT, you may have missed it. The other day I cited something from NRO which noted that in 2007 Az won a similar suit against the feds--Az made it a crime to hire illegals; the feds ran in to enjoin it, arguing preemption. In 2007 Az won at the Dist Ct and Ct of Appeals (9th Cir) on that one.

[narciso]

That's a very Swiftian solution, Neo, but are there enough of them to make a difference,

[Neo]

This whole thing makes you wonder if the prize money given as part of the Nobel Prizes shouldn't be taxed at a 200+% rate to keep people from having them go to their heads.

[Old Lurker]

Hit's "Overall, 36% say that the president is doing a good or an excellent job when it comes to the economy."

Anybody need further proof of the quality of our education system?

[Old Lurker]

In the alternative, if 100 is the average IQ, then approximately 50% of the dummies have IQ's below that.

[narciso]

In the LUN, representatives of "Perfidious Albion, acting stupidly

[Danube of Thought]

I'm familiar with that case, Clarice. The feds lost in the trial court and lost 3-0 in the 9th Circuit; the Obamas have just asked the S. Ct. to review it.

But it's distinguishable from the current case, in that the court held that outlawing the hiring of illegals would have only a "speculative" or "incidental" effect on immigration itself. They treated it as an employment law issue, not an immigration issue.

[bunkerbuster]

NK mumbles: ``China has slowed considerably from a 2004-2007 10% annual real GDP growth trend to about 7%, which is very close to the relative decline of 2004-2007 US GDP growth to today's 2.0-2.5%''
Let's try some facts: China's economy grew 8.9 percent in 2009 and 9.2 percent in 2008. I have no idea where you're getting "about 7 percent" but I'd wager it's adjacent to your scrotum. Moreover, even if it were 7 percent, that would not be "very close to the relative decline to today's 2%" in the U.S. And if it were, you're using different time periods.
Again, I'm the last one to hold up China's economic model as something beautiful. But I do think it's the one that by far the most people in the world are focused on and it defines socialism as we know it. Sorry, but North Korea, Mussolini and Cuba are irrelevant.
Which reminds me, who here remembers the right-wing prediction that communism could not be eliminated other than by military force? I recall that as standard Cold Warrior doctrine. Again, I ask: what about China. They've still got a politburo. Still "worship" Mao and Lenin and still let the government run make ALL the big decisions about everything. Yet, somehow, they're consistently producing world-beating economic growth and have overtaken the U.S. as the world's biggest car market, the world's biggest mobile phone market and who knows what else. By sometime next year, they'll probably be the world's biggest economy. Yet, somehow, when the subject of socialism and economics comes up, you never hear the word China come up in wingnut discussions. Instead, it's all about Hitler's government health care, Mussolini and North Korea. And they wonder why, and endlessly whine, that no one in the mainstream takes them seriously....

[Rick Ballard]

Narciso,

Only removal from power is going to "make a difference" at this point. The "hoarding" which both Ricardo and Hayek abhorred was (and is) a reaction to an increase in uncertainty. The Kendonesian commie has increased uncertainty wrt the safety of capital to the point where hoarding is a perfectly rational response. There is absolutely no difference between Chavez seizing those oil rigs in Venezuela and BOzo extorting a promised payment of $20 billion from BP. Both instances abrogate the "certainty" of rule of law and substitute the whim of the malefactor holding power in its stead.

Even if Krugman's pathetic plea for ever more wasteful spending were heeded by the profligate buffoons in the insane clown posse it could not possibly overcome the distrust engendered by the incompetent (and quite stupid) chief buffoon in the center ring.

The personal saving rate jumped last month and consumer loans continued their contraction - people continue to vote against Obama with their money every single day to an extent that has shifted velocity into negative territory. It's going to stay there until this particular clown posse is shoved into the dust bin.

[bunkerbuster]

And about "blaming Bush''
Let's remember: the stats show Republican presidents underperform on economic indicators across the board, decade after decade. The official wingnut excuse for that is that Democratic presidents leave them with bad economies that take years to repair. Yet another bed wingnuts make, but would never dream of sleeping in...

[NK]

OK BB you've proven it, you are an illiterate schmuck (sorry TM) with a 3rd grade reading level. Go back and read the post and check 2010 Chine GDP growth-- OK that doesn't mean anything to a troll like you. As to argument -- how did that communism work out for the PRC? How did adopting market economics work out? How did a market economy work in the US? How is Obamism working out-- EVEN BEFORE THE DEBT BOMB GOES OFF. End 'a chat -- that's a nice boy BB, now on your bike mate.

[Ignatz]

--The problem is, never in my life have I seen the government save any money.--

That's what's so depressing about a liar like Krugman.
If the economy tanks he says 'spend now save later'. When the economy recovers he says 'the coffers are full, if we can't spend now, when can we'?
The left cannot survive by honesty about their goals, hence every last man jack one of them lies about them.

[Ranger]

Jake Tapper goes a long way to get http://blogs.abcnews.com/politicalpunch/2010/07/president-obama-attacks-congress-for-delaying-his-nominees-is-he-right.html>here, but it was wortht he trip:

You can argue – and White House officials and Senate Democrats are, in fact, doing so – that Democrats were delaying Berwick’s hearing and the vote on his nomination because Republicans were going to play politics with it.

But a) that’s not the same as delaying or obstructing his nomination and b) some might argue that there’s also something to be said about combating policy arguments with better policy arguments.

-Jake Tapper

Its as close as the MSM can come to saying "you lie." But they are finally noticing.

[bunkerbuster]

Rick hallucinates: ``There is absolutely no difference between Chavez seizing those oil rigs in Venezuela and BOzo extorting a promised payment of $20 billion from BP.''
Except that there was no "extortion" involved. BP willingly, gladly, accepted the administration's offer. Nothing and no one could have prevented BP from refusing or for taking the matter to court. I get a sense that Rick's actually smarter than this, but assumes he's among people who don't get out much intellectually...

[Rob Crawford]

Except that there was no "extortion" involved. BP willingly, gladly, accepted the administration's offer.

*snort*

Go play in the yard, child. Adults are talking.

[bunkerbuster]

meant to say: By sometime next year, they'll probably be the world's SECOND-biggest economy

[Janet]

Like Jane said...I'm getting really nervous about this administration. They seemed to have every front covered.

More sketchy business at DOJ.

LUN Who will investigate the investigators?

[Old Lurker]

Well said, Rick.

Ignore the noise.

[bunkerbuster]

NK: Why don't you try a little research instead of just making stuff up? You mention 2010 GDP growth:
The International Monetary Fund ( IMF) lifted China's GDP growth forecast for 2010 to 10.5 percent from the earlier projection of 10 percent, the IMF said in a latest world economic outlook released on Thursday (July 8).
The body also revised the country's GDP growth projection for 2011 to 9.6 percent, down 0.3 percentage point from the previous estimate released in April.
With the revised figures, China still ranks first in terms of GDP growth among all economies listed in the World Economic Outlook Projections, followed by India, which is forecast to grow 9.4 percent in 2010 and 8.4 percent in 2011.

[NK]

and by the way BunkerBuster, use your 3rd grade reading level to review the following from a lefty, Lloyd Grove out in Aspen, where the other lefty intelligensia now publicly tell the truth that Barry O is a national disaster: http://www.thedailybeast.com/blogs-and-stories/2010-07-07/aspen-ideas-festival-obama-loses-support-of-nations-elite/2/
You see BB, the fight isn't really between the Left and Right anymore. The fight is between government insiders (politicians, bureaucrats and rent seekers) trying to accumulate power through government intervention and using that power to pick economic winners and losers, and on the other side economic producers-- business owners, workers and capitalists looking to invest who compete to win support from free men and women who freely choose those to purchase their products and services. This is now the fight government insiders against free men and women. Which side are you on?

[bunkerbuster]

Thanks Rob! I'm sure if you had something a little less banal to say, you'd have said it, but we all contribute what we can...