Economist Paul Krugman in a recent blog writes about Dayton congressman, John Boehner: “Boehner’s idea of economics is completely insane.”
Krugman absolutely disagrees with Boehner’s thinking and seems to be in honest despair that a congressional leader with a lot of influence could actually advocate Boehner’s view. Krugman asks, “Can this country be saved?”
Krugman strongly disagrees with Boehner’s hard stance on government spending. Boehner keeps repeating this theme: “It’s time for government to tighten their belts and show the American people that we ‘get’ it.”
Krugman writes, “He (Boehner) is talking about the current economic crisis as if it were a harvest failure — as if we faced a shortage of goods, so that the more you consume the less is left for me. In reality — even most conservatives understand this, when they think about it — we’re in a world desperately short of demand. If you consume more, that’s GOOD for me, because it helps create jobs and raise incomes. It’s in my personal disinterest to have you tighten your belt — and that’s just as true if you’re ‘the government’ as if you’re my neighbor.”
That’s high praise for Boehner given Krugman’s record of being wrong for the past eight-plus years as a columnist. Well, he’s been wrong since he left Enron, and given how that worked out, he wasn’t much better as an economic adviser back then, either.
People like to try to intimate that Krugman’s been wrong, but the facts are still what they are. Those same people also like to blame Obama for this Depression, which is 100% owned by the Republican Party, and people like “Junket John” Boehner, who never met an idiotic Chimpy policy that they didn’t embrace. Hell, Boehner is STILL insisting that giving the wealthy even more tax breaks and lowering yet again (!) the tax on FOREIGN earnings is just going to fix everything.
I shouldn’t be too hard on Junket John-after all, “his” ideas were fed to him by the same lobbyists who send him off for those suntan enhancements. It’s a wonder he can even remember to repeat them, what with all the alcohol in his system.
Mack, several points I’d like to make. First, good job of following the Republican line of attacking the person and ignoring the substance of their remarks. Second, Krugman as early as 2005 was challenging Greenspan on not regulating the sub-prime mortgages, thus predicting the current crisis. So much for being wrong. Third, he was only a consultant for Enron which required him to spend four days a year in Houston. Finally, I’ll take Krugman’s intellect on economic matters over Boehner’s any day. Where’s John Boehner’s Nobel Prize for economics?
Boehner’s idea of good economic policy is playing 18 holes someone else paid for …
We need to remember that Boehner is one of Dayton’s Congresspeople because the Republicans carved some Democratic votes out of Dayton and gave them to Boehner, who had and continues to have a safe seat, in order to help create a safe seat for Mike Turner. Boehner was and remains in tune with his main constituencies in Warren, Butler and some of the more rural counties in the area. However his primary constituency is the Republican leadership, of which he is now a part, due in part to a system where legislators select voters rather than voters selecting legislators. They have a strategy to obstruct and resist Obama and hope to regain some of the votes they lost. Representing people in Dayton is the farthest thing from his mind.
This economic crisis, unprecedented in the minds of most Americans, challenges our conventional realities. Large debt, coming from Bush’s tax cuts and war and now the various TARP and stimulus packages, can’t help but create unease. Most Americans know debt is bad even as they have been financing their consumer purchases with it, since wages have been stagnant and for many have disappeared. We know you can’t just print money forever, and that the power to collect debts, often owned by China or oil producing countries, is the power to destroy. We also have a new situation where businesses are dependent on loans from a banking system which has been poisoned by a Ponzi scheme of bad mortgages. The way to fix this, whether by fixing mortgages, giving billions to banks with no questions asked, reconstituting the banks, or doing nothing and let unregulated markets take their course, remains in doubt. In additiion, most people understand that while in times of contracting economy, individuals want to contract their purchasing and live within their means, the overall effect of this is more contraction.
There is something wrong about CEOs getting huge bonuses while the company flounders, lays off employees, and negotiates reduced wages from the workers. There is also something wrong about a government refusing to tighten its belt in hard economic times. The more it taxes the less people have to spend.
Krugman is a verified socialist at best, a quasi-communist at worst. The fact Krugman was an economist for Enron. He was part of the problem and continues to be part of the problem. I do not put too much credence in his Nobel Prize; didn’t they give one to Yasser Arafat too? The crisis we are in today, especially in the housing market is the fault of EVERY American, not just the political hacks. Over extended credit because of an insatiable appetite for consumer goods and HOUSES that were unaffordable is what caused this mess. Krugman’s idea of printing money and having government spend or rewarding individuals’ irresponsible economic behaviorour as a way back to “prosperity” verifies my first sentence. Do you all think we will learn from this economic lesson as our grandparents did from the Depression?
Joe, when you write, “Krugman is a verified socialist at best, a quasi-communist at worst,” you are saying that you believe Krugman’s thinking to be formed and directed by ideology, rather than by science. Because he is saying something that you don’t want to believe — “Boehner’s Idea of Economics Is Completely Insane” — you are attacking, ad hominem, Krugman himself including, of all things, attempting to sully his Nobel prize!
You are saying that you deny that Krugman is a trustworthy authority. A big problem in any discussion involving the economy is that there is little trust in economists in general. You don’t trust Krugman because you believe that his political view, not his science, is what directs his thinking. This idea that economics is all about politics has a long history. But maybe you don’t trust Krugman because you simply don’t like his advice.
Economics asks us to accept it as a science, but it has failed to really establish itself as having much authority. But, while it is true that economists with big credentials often disagree with each other, it is wrong to suppose that there are not some bedrock principles in economics.
Boehner asserts that government, in this time of economic crisis, should be “tightening its belt,” should be spending less. Krugman thinks this notion is crazy, “Completely Insane,” because it contradicts some very well established economic principles. I wish I had a more in-depth insight into economics so that I could independently evaluate what’s happened in our economy in the last six months. Krugman to me seems a person of great integrity, good will, objectivity. I’m impressed with his Nobel Prize. What he says, to me, makes sense. To me, he seems trustworthy.
Again attacking the mesenger, not the message that Boehner’s ideas on the economy are insane.
Mike, you said mostly what I was going to say except for this. Joe’s first two sentences do not make sense.
“Krugman is a verified socialist at best, a quasi-communist at worst. The fact Krugman was an economist for Enron.”
So he’s a socialist who worked for a capitalist company that had Bush in their pocket. Doesn’t sound like a very good socialist to me.
? Sorry Maniac, I left the word “was” out of my second question. Krugman is like any self-serving individual, he has to eat, so he felt no indigestion consulting at Enron. On the other hand, was he part of Enron’s problem, who knows, I do not want to infer any conspiracy theories.
?
Mike, politicians and academics want us to believe there is such a thing as “political science” too; much like economists want us to believe their predictions of chance is also a science. Economists and Politicians, particularly on a national level are the whore and john, matters not who is the whore or who is the john. Practitioners of these sciences most definitely derive their decisions based on their opinions and beliefs. They do this because there is no real science in their professions. That is why the Democrats and Republicans each have their minions to spew forth party line predictions or projections.
Mike, I believe you are an honorable and responsible man. I also believe you most likely employ the same economic principles in your home as I do mine. We live within our means. I am not trying to over simplify this but I believe you would never employ the economic tactics in your own life that are espoused by Krugman. If we could put his methodology to scale for an individual do you really believe, the individual could ever achieve economic recovery. I think not. I do not think the individual’s great grandchild to the 4th generation would be able to pay off his debt.
Krugman’s recommendations lead to continual individual irresponsibility. This continued course of actions leads to continued GREED. We cannot spend our way out of this mess without resultant rampant inflation and that is my economic prediction.
The simple fact of the matter is, inflation is not a threat right now. Zilch. It will, of course, become a threat as the economy mends, but the choice here is basically how long you want that course to take. “Junket John” Boehner apparently doesn’t give a damn if it takes decades. About 7 in 10 Americans feel otherwise. Boehner, in fact, wants to try even more of the exact same policies that got us here now. He’s not insane; he’s an idiot.
Policy can be adjusted when inflation looms as a threat. Right now the biggest threat is DEflation, an inevitable off-product of “conservative” economic policy.
Personal responsibility suggests that all the denizens of the mortgage industry, broadly defined, who created the mess and perhaps all the government people who let them, would have to fix it. There is unfortunately no obvious legal way to accomplish this. Much of this was legal because of deregulation and a disfunctional regulatory system. And because so much passed “downstream” you probably couldn’t get it all back any more than you could get back the billions that Madoff stole.
Unfortunately we not only have a personal problem but a systems problem. The contracting economy is wiping out, not just bogus wealth created by inflated home prices, false accounting, and Ponzi like multiplication of derivatives, but real wealth that mattered to indivduals who were not “personally responsible” for the problem. It also gets rid of ongoing wealth for those innocents whose jobs disappear. It has also exposed other problems with economy, such as poor management at General Motors, an unsustainable attempt to use debt to cover for the stagnation of wages due to so much of society’s profits going to the wealthy, and environmentally unsustainable economy based on using up resources like fossil fuels and making wars to get them.
Dealing with this systems problem is different from dealing with the personal budget of individuals in a functioning economy. This seems to be what Krugman is saying and what Boehner, for political and ideological reasons, is denying.
Handing borrower money to AIG and the banking system did not cause them to open up lending, and did not fix the problem of bad mortgages and their derivatives. However tightening everyones’ belts, Boehner’s recommendation, will not fix the systemic problem, and is most reminiscent of Hoover’s reaction to the Depression. Obviously the government can not print money forever or borrow it indefinitely from China without there being consequences. Their questions seem to be whether keeping the banks on life support and hoping the value of the “toxic assets” becomes higher and more known, is preferable or whether this is a rat hole for taxpayer money and it is better to take over and reconstitute the banks, eliminate the lost and phony wealth that is in fact lost or phony, and perhaps be about having smaller and better regulated piles of money than we had the last time. This is a debateable issue on which Krugman has an opinion, but not really the issue that Boehner and the Republicans are debating.
I never endorsed Boehner’s position. Deflation is not an issue other than in the over inflated housing market. Inflation is a very real threat. Rewarding irresponsible behavior crushes the foundation of our economic system, capitalism. Krugman believes government should be the integral part of the economy I do not. My point continues to emphasize personal responsibility and mechanisms or laws that prohibit the criminal behavior rampant in the housing industry that caused this mess. There is plenty of blame to throw at both parties because both govern not for the people but for GREED. How many members of Congress are millionaires? Answer, most. I have advocated many times for reform in our election procedures and laws to ensure politicians cannot benefit from their office, sadly to no avail. Krugman’s recommendations are not the answers to our present economic situation. Politicians who truly represent the needs of their constituents are.