"…In Democrat-world, up is up and down is down. Raising taxes increases revenue, and cutting spending while the economy is still depressed reduces employment. But in Republican-world, down is up. The way to increase revenue is to cut taxes on corporations and the wealthy, and slashing government spending is a job-creation strategy. Try getting a leading Republican to admit that the Bush tax cuts increased the deficit or that sharp cuts in government spending (except on the military) would hurt the economic recovery.
Moreover, the parties have sharply different views of what constitutes economic justice.
Democrats see social insurance programs, from Social Security to food stamps, as serving the moral imperative of providing basic security to our fellow citizens and helping those in need.
Republicans have a totally different view. They may soft-pedal that view in public — in last year’s elections, they even managed to pose as defenders of Medicare — but, in private, they view the welfare state as immoral, a matter of forcing citizens at gunpoint to hand their money over to other people. By creating Social Security, declared Rick Perry in his book “Fed Up!”, F.D.R. was “violently tossing aside any respect for our founding principles.” Does anyone doubt that he was speaking for many in his party?…"
Full column: http://www.nytimes.com/2011/11/18/opinion/krugman-failure-is-good.html?_r=1&scp=1&sq=failure%20is%20good&st=cse
3 comments:
Neither Democrat or Republican view is even 50% correct. Both have taken huge liberties with ' promote general welfare' in the Preamble to the Constitution. The OWSer's have got one part of their message right: the political and financial systems are hopelessly corrupt as they now exist. Notice I said 'financial' and not 'economic' system. The financial gains made by the labor and general welfare movements(globally,not just in the US) of the mid 20th century were undone by the deregulation of the banking industry from 1980 til the present. You can't legislate economic justice, you have to build it from the ground up. The best way to start is no use any of the major banks for your financial transactions, use a credit union and/or a small local bank. Get out debt and stay out of debt. Interest especially credit card interest is how the bankers have inflated the price of everything. It's going to at 20 years or more of at least 50% of the population being smart with their money to get into a position of financial power to dictate terms to the banksters. Notice after the Credtit Card Reform act of '09 came into effect, the banksters simply found other ways to charge folks more money for their 'services'.
I agree with everything Carlos said here and I would add that Krugman is as clueless as the rest of the political class of which he is a member. He is the most partisan and status quo of economists, he seems to believe that we can continue down this path indefinitely. What he is arguing will be completely irrelevant within the next year or two.
The western world is in a tremendous debt crisis that is now beyond either party's solutions. European banks are insolvent because they are leveraged to the hilt and the biggest portion of their assets are european sovereign debt. Junk assets which cannot possibly be repaid and when the phony value is marked down the banks will be instantly insolvent. When they are unable to refinance their bonds they will fail, and nobody wants to purchase their bonds at this point which is why the rates have skyrocketed just recently. The euro banking system is four times larger than the US and the results will be catastrophic for the global financial system. US banks still have over 500 billion of their money market assets in euro banks. The Fed and the US govt cannot allow these losses to US money markets and the global financial system. We will all be on the hook for this disaster. This is the result of governments borrowing far beyond any reasonable level for decades in collusion with their financier partners who package and sell the debt and make billions from it. Google 'Goldman Sachs Greek Debt' and discover how first they packaged and hid the debt off books for the Greek government, then shorted it!
http://www.nytimes.com/2010/02/14/business/global/14debt.html?pagewanted=all
Speak of the devil, here's the story from today's NYT front page. The largest Italian bank, UniCredit is in immediate danger. BTW UniCredit used to be Kredit-Anstalt the Austrian-Hungarian bank that collapsed in 1931 and set off the financial collapse that led to the great depression. This crisis has arrived and may be a matter of days or weeks instead of months or years.
Europe Fears a Credit Squeeze as Investors Sell Bond Holdings
http://www.nytimes.com/2011/11/19/business/global/lenders-flee-debt-of-european-nations-and-banks.html?_r=1&hp
Post a Comment