On the stimulus
Here’s Krauthammer on the stimulus:
“[Obama] did a huge Keynesian gamble, and it failed.”
But super-Keynesians such as Krugman say it failed because it wasn’t nearly super enough. It should have been bigger.
And Obama says if he hadn’t done it, things would have been much worse.
The beauty of it is that you can’t absolutely prove these statements untrue. You never can. The road not taken stubbornly remains untaken.
Logic would seem to dictate that if a large dose of something doesn’t work, more of the same won’t help. But believers argue that the dose didn’t reach the therapeutic threshold. And with economic interventions—as with all interventions that involve complex systems—it is stunningly difficult to tease out the effects of a single variable.
And so the argument continueth…
The stimulus was not aimed at creating private sector jobs. It was aimed at preserving the jobs of union workers. While the money was flowing it met that objective, especially in government. When it stopped there was nothing to show for it except debt. It’s the old story of giving a man a fish versus teaching him to fish. When the fish is gone, the man is hungry.
Now the Dems are talking about roads and bridges. Too late folks. The money is spent.
Oh no! Nay! Nay! I shall not taketh thy bait!
It may continuth for thee, yeah! Go wherever it leadeth, though destruction it will be!
But hark! It’s settled for me! I shall siteth peacefully under the old oak tree, singing to Hayek tweedle-dee, tweedle dee!
In a 15 trillion dollar economy which is shrinking, yes dollars from government spending can go to families who are employed or contracted by government…
… or to business which provide goods and services to government.
So therefore, 800 billion in new spending on goods, services, employees and contractors will be “helpful”.
But is it the right kind of helpful?
Is it the long term solution?
The answers to those two questions are No.
As the private sector was temporarily helped – ALL business were very aware that they shouldn’t be making HIRING decisions based on the temporary spending.
Therefore no matter how large the temporary spending is (even if tripled) all people will do is sock the money they receive away and pay down debts.
The employment picture would NOT improve unless businesses and individuals feel that the economic picture will improve.
That is why economics is a social science. Every indicator shows that people do not feel confident that this current government understands economics 101 and will NOT make the right decisions concerning regulations, health care costs, unionization, etc. etc.
Neo . . .
Your link to Amazon seems to have vanished. I have some books and kindle books that I’d like to buy via your website.
Promethea: It still appears on my computer. I’m using Firefox; don’t know whether that matters or not.
The other night, though, I noticed that it didn’t appear even on my computer. I refreshed it, and then it appeared. It seemed to have something to do with the loading speed.
I appreciate your trying to order through my blog. Maybe you should try refreshing, or using another browser? Let me know whether you continue to have problems—we aim to serve!
Webutante: LOL!
But it still continueth in the larger world out there…
The stimulus was always designed with the purpose of keeping Democrats in office in November 2010. That, in turn, would help Obama’s re-election in 2012.
It was supposed to do that by stopping the layoffs of unionized public employees. Keeping them employed meant they’d continue to pay unions dues. The union dues would then be used to help fund the Democrats election campaigns in November.
The other way it was designed to help the Democrats in the Nov 2010 elections was the timing of how it was disbursed. One of the things that disgusted me about it was that the stimulus was only trickled out for the first 2-3 quarters of 2009. That’s when several hundred thousand people a month were losing jobs. That was the maximum amount of suffering. But the stimulus didn’t start pickingup steam until 4Q 09. Then it really picked up in 1Q 10 and reached it’s maximum amount in 2Q 10. Then it tapered off the next few quarters.
And stimulus powered GDP performed pretty much how you’d expect. Peaking in 1Q 2010 at 3.9% growth. Then in 2Q10 it dropped slightly to 3.7%. Dropping fairly hard in 3Q 10 to 2.5%. But the economy was still expanding, but at a slower rate.
The Democrats thought they’d bought the November elections with the design and disbursement schedule of the stimulus. After all, why would voters change horses when it appeared GDP was growing again?
I think the reason why the Democrats plan to buy the election failed is mostly because they did not anticipate the Tea Party. The Tea Party saw the stimulus was a sham, and the healthcare law was a freedom killer, and they rose up and spoiled what was a good plan.
According Russian economist Kondrat’ev, the world economy is moving in cycles, each 40-50 years long. They are driven by technical innovations and consist of 6-8 years of depression or slug, than 25-30 years of growth, which becomes in the end of the growth phase weak, and a new crisis or depression follows. Nothing done during depression phase can end it, but all strategic decisions made at this period define success or failure of the following 25-39 years. Be careful what you chose these deciding years, because it is impossible to change the direction of development of a country during growth phase.
“But super-Keynesians such as Krugman say it failed because it wasn’t nearly super enough. It should have been bigger.”
Paul Enron Krugman also thinks an invasion by extra-terrestrials will turn the economy around.
Keynes is never (indeed, cannot be) supported by logic; its proponents say the same they did about Communism: it’s a lovely idea that just hasn’t been properly enacted. Of course, this neatly avoids any standard of failure (but oddly, not success). Problem is in a so-called “mixed economy” too many folks tacitly agree with that lovely idea, leaving the field open for more tries.
Alas, for statists this means “more” rather than different. It’s quite easy to theorize with other people’s money — and until this is attacked “*morally* they’ll keep trying.
It is my impression that most of the stimulus was directed toward state and local governments. Scott’s comment gives a possible rationale.
Since the public sector is funded by the private sector, the obvious Keynesian recourse was to lay off government workers, jump-start the private sector with stimulus or tax cuts, and hire back the laid off government workers when the private sector began delivering sustainable tax revenues again.
Suppose, instead, that you borrow money to sustain the public sector for a time and leave the private sector to fend for itself (or impose new regulations on it). If the private sector does not recover, you’re worse off than when you started.
I have never understood the defense of Communism cited by Valjean — that is, that “it’s a lovely idea that just hasn’t been properly enacted.” When so many decades have gone by during which every single effort to put the “lovely idea” into practice has failed wretchedly and resulted in misery, death and ruin, it seems clear to me that there must be something deeply wrong, dysfunctional, and — shall I say — unlovely about the fundamental design. Otherwise, somebody, somewhere, would have been able to make it work as planned by now.
Promethea — Neo’s Amazon links were also missing for me when I read my way through this comment thread, but while I was typing this comment — at least three or four minutes after landing here — they suddenly popped into place. Maybe the page is simply loading slowly, and they’ll show up eventually.
Parker: you think it wouldn’t? We’d all get that Rosie the Riveter spirit again!
Afterthought: I applaud when people bash Obama, but let’s not forget the “contributions” of Bush and his cronies.
gs: I doubt any of us here would say that GWB was blameless. But I’m confident that Obama would have done more or less what he did, regardless of what his predecessor did. Do you disagree?
In many ways, President Obama resembles a teenager who has railed for years against the idiocies of his parents… and suddenly finds himself on his own, able to try to put all his “lovely theories” into practice. (If anything, Obama is much more stubborn than that teenager, possibly from his teenaged opinions having hardened in place over the intervening decades.)
One thing GWB did know how to do was to change course. I’ve yet to see evidence that his successor can do that.
respectfully,
Daniel in Brookline
Mrs Whatsit,
I fully understand your confusion; the defense certainly perplexes me too — even on a pragmatic level, as you point out. But I think it lives on because the idea of a state-controlled economy — unlovely as it is — still enjoys wide moral support.
If you doubt it, ask yourself why the Democrats think their “throwing granny over the cliff” schtick will work.
Daniel in Brookline Says:
gs: I doubt any of us here would say that GWB was blameless. But I’m confident that Obama would have done more or less what he did, regardless of what his predecessor did. Do you disagree?
Not at all. I’m with those who say that Bush left a bad situation and Obama made it (a lot) worse.
In many ways, President Obama resembles a teenager who has railed for years against the idiocies of his parents… and suddenly finds himself on his own, able to try to put all his “lovely theories” into practice. (If anything, Obama is much more stubborn than that teenager, possibly from his teenaged opinions having hardened in place over the intervening decades.)
I’ll go a step further and say that Obama represents the academic/bureaucratic/administrative class whose specialty is holding power without responsibility while broadcasting how smart they are and how dumb everybody else is.
Obama’s election fulfilled their aspiration: they are unmistakably in charge for the first time in decades. Be careful what you wish for, the saying has it.
One thing GWB did know how to do was to change course. I’ve yet to see evidence that his successor can do that.
Agreed.
The idea of a therapeutic dose is useful. A large man probably won’t get relief from a headache if he takes just one aspirin tablet. Three of four will probably do the job. Maybe two. Krugman argues he should swallow a whole bottle.
For most things there’s a proportionality of response. Step on the gas a bit, engine revs a bit. But with this mysterious economy we have — which nobody can understand and which just seems to have a life of its own — we should put our faith in a hidden buildup of productive forces that will take effect only when enough inputs are made, but not before.
The reality of Krugman’s approach is closer to the maxim of toxicology — dose is everything. Why is proportionality not applicable to questions of stimulus?
Is it just me or does anyone else see the Obama administration as a Jerry Springer show for people with graduate degrees?
The earth has a fever! More green technology please.
Sorry, couldn’t help that.
Nice point, Richard. When cars used to run completely out of gas, we had to prime the carburetors, but if you poured too much gas in, you “flooded” it, which was easy to do. Or how about when you’re pumping up a bicycle tire with a non-manual pump and you don’t know how much to put in the tire? You think, is it just 20 or 30 pounds of pressure, or is it way higher? I usually ended up maxing that baby out leading to a quick blowout. It’s just human nature to want to over tighten and over fix things.
“”Paul Enron Krugman also thinks an invasion by extra-terrestrials will turn the economy around.””
Parker
The man does have a point. People respond to legitimate uncontrollable threats much better than ongoing threats of our own making. I can concieve of a circumstance where i’d pay a lot more money in taxes. But coddling self proclaimed victim groups to insure more incompetence gets generated ain’t one of them.
Richard Ong asks, “Why is proportionality not applicable to questions of stimulus?
If the question is proportionality then 🙂 let’s ask if the cure for an obese man is a large pizza.
But wait. The large man should have 5 large pizza’s 🙂 That’ll do the trick!!
Meanwhile the arteries are clogging up and the liver is failing and the colon has cancer and diabetes is killing circulation to the mans toes.
OK. More pizza!
What Obama fails to see, is that you cant raise the level of the low end of the pool by bailing buckets from the deep end… as do most who are honest and seek redistribution as a form of parity, the ones that know better and seek it anyway, want power not parity.
Neo @ 3:04 . . .
I just came back, refreshed, and now the Amazon link is back.
We’ve had the Fool v. Knave debate here lotsa times. Verdict’s in. Knaves run in packs, apparently. We now have the Statists as flash mobs.
I personally wrote a blog comment and I can attest to the fact that it saved 10,000 jobs. If you don’t believe me, prove that I didn’t!!!
“Parker: you think it wouldn’t? We’d all get that Rosie the Riveter spirit again!”
“The man does have a point.”
When WW2 ended and the troops came home and war spending stopped all was not rosy with the economy. The economic hay days that blossomed in the 1950-1960s were made possible because we were the only industrial nation that had not suffered the destruction and the horrors of WW2. We lost many troops but compared to others as a percentage of population it was minimal and we did not suffer the lose of tens of millions of civilians otherwise known as productive workers and consumers.
The industries that expanded for war production were the only large, undamaged industrial base in the world. We flooded the world with our products from raw steel to televisions to locomotives to airplanes. We had no real competitors. And made in America needed no label because pretty much any manufactured consumer item for 20 years could only be made in quantity and quality in America.
By the logic Krugman embraces instead of gearing up to defeat imaginary extra-terrestrials we should make war against other, non-imaginary terrestrials without end. Lets declare war on the entire Islamic world and build the machines that will be required and draft millions of young men to slaughter and lay waste to every Islamic nation. Next, lets start a war with China. That would require even more airplanes, aircraft carriers, tanks, cruise missiles, predator drones, rifles, bullets, etc., and an army of 30 million. Once we defeat China; lets take on Russia, Western Europe, Mexico, and South America. We’ll all be rich!
Its the broken window fallacy writ large. Destruction does not produce wealth, it simply transfers wealth from one pocket to another pocket. Care to break every window in your town and watch the economy grow?
“”I personally wrote a blog comment and I can attest to the fact that it saved 10,000 jobs. If you don’t believe me, prove that I didn’t!!!””
Hangtown Bob
And i contend if not for wearing my lucky hat to the game, the Braves would have suffered a much greater loss Wednesday against the Giants.
neo.
See “The Martian Shop”. I first found it in Fantasy and Science Fiction about fifty years ago.
Guy with lots of money fakes up a Martian infiltration. Earth pulls together.
Author was an optimist.
What I would like to know is whether or not Krugman complained at the time of the first stimulus that it was not large enough, and that as a result unemployment would be larger that what Obama claimed it would be without the stimulus. If so, he is at least being consistent. If not, he is a partisan hack.
I would be interested in finding out the proportion of thinking that is objectively concluding that the stimulus was not big enough–or that some other progressive effort failed–and how much is not wanting to admit to having been wrong, and how much is consciously interested in ruining the current system by doubling down.
Said it before, the most likely result of a suggesed action is the intent of the person who suggests it, other assertions notwithstanding. And the result of an action taken was the actor’s intent, excuses and predictions aand promises notwithstanding.
Exceptions must be proven to a high degree of rigor, which is to say, I hardly ever believe them if the person is over, say, thirteen.
Yes, Krugman was very consistent on this, saying from the start that the stimulus was too small.
See, for example, this and this.
This day in history August 19
1934:Germans voted to make Adolf Hitler their Fuhrer.
On August 19, about 95 percent of registered voters in Germany went to the polls and gave Hitler 38 million votes of approval (90 percent of the vote).
it took about 5 years for the changes and structuring (Gliecshaltung) to be set before the mask came off… and all of the world to reach Sept 1 1939
Germany had huge unemployment, but the having to build up material for war and defense as a solution, brought the nation to full employment…
as would a similar action which would cut the US off from China, or others…
one should understand that Krugman is like all despotic economists serving a cause.. his answer can NEVER be less, for to those that judge his loyalty and grant him his place and butter his bread, would no longer do so. he pimps the line he earns from
According to Krugman, his interest in economics began with Isaac Asimov’s Foundation novels, in which the social scientists of the future use “psychohistory” to attempt to save civilization. Since “psychohistory” in Asimov’s sense of the word does not exist, Krugman turned to economics, which he considered the next best thing.
ie.. a fanatic who would save he world…
by the way that mentality was key to the people who served the new fascist state, a hybrid of capitalism and communist socialism, where they would seek to control the beast of capitalism and domesticate it through state laws, decrees, licenses, taxes, and if needed nationalizing and helping construct larger monopolies, seeking to tame and use the economy.
the communists did not think that what the business men did was special enough or complicated enough and so envisioned taking control themselves and just switching people (much like feminism in europe)…
the germans thought, as with italy, that these people are needed to do what they do, but they should do it with an eye for and from the state…
BOTH saw Capitalism = Judaism/Christianity
and so the easiest way to end it as a free thing outside of the domesticated false system that appears like it (but is completely controlled), was to destroy western civilization and exterminate its people…
which is why, if we didnt accept the immigration breaking, we would notice the demographic genocide
Krugman comes from the communist idea in the US that all ideas are ok, even bad ones like communism, its just that we have to discuss them and fund them to make them work, and so are allowed on the table.
ie… his job is to NORMALIZE the abnormal by constant extreme advocacy… ie… he got his nobel prize not because he was right, but because having one and haivng him spout is something the left can use!!!!!
while hayek recieved a nobel before krugman for disproving krugman (Technically)
what i have noticed is that they give an AFFECTATION of understanding… but dont really. i ahve noticed this in the geneticists too… but all one has to do is ask a question which reveals this, and they go ape sh* t
The Poverty and Poison of Paul Krugman
by William L. Anderson
http://www.lewrockwell.com/anderson/anderson207.html
but thats the point… that these are lies, and that we are NOT allowed to call out lies, and are to accept them as an alternaticve truth
of course who set us up and trained us for 4 generations to accept lies and contradictions as normal, and unassailable?
women are as good at X as men are
the reason that they dont do as well, is that there is a conspiracy to skew the tests against them
even though men and women are the same in this ideology, women are better…
a 120lb woman can demolish a 240 lb man with weapons… and not muss her hair.
a woman can bring home the bacon, fry it up in the pan, and never let you forget your a man… (the soviet new socialist woman delivered to us by madison ave)
who taught us that having women on a team is magtically productive? that we are equal but they multitask better?
you see… its an ideology of contradictions and outright lies in which one has to accept the ego position of the truth to counter… and what woman would gladly accept that she is not pretty? or as desireable (any one notice how they want equality of selection?)
or how about this kind of contradiction:
“[W]omen, like men, should not have to bear children…. The destruction of the biological family, never envisioned by Freud, will allow the emergence of new women and men, different from any people who have previously existed.” — Alison Jaggar, Political Philosophies of Women’s Liberation: Feminism and Philosophy, (Totowa, NJ: Littlefield, Adams & Co. 1977)
heck… they sell birth control as freedom from being a woman and having periods… i guess that now we have batmitzvahs we dont need periods… that is a privelege of the elite.
but the bigger point is that once you normalize living on contradictions…
then you can no longer separate the invalid lies from the valid debateable points, everything is equal… nothing can be cast out for invalidity…
how can you cast out krugmans communist finances as neo liberal capitalism if you live a life of similar contradictions and there aint no way your going to clean house only in one corner.
and so, as i said, until we are willing to cast out the cancers that make abnormal thinking normal… we wont have the thought procesesss to oppose organized assauts on our thinking disguises as honest debate with everything on the table
personally, its inane to have everything on the table,and its NOT A GOOD THING…
ie… if everything on the table is allowed, then lies are allowed… then human executions are allowed. then gulags are allowed… social engineering… communism.. gutting the constitition, etc.
and after, they will say, what part of everything did you not understand when you ACCEPTED it?
just so its CLEAR in its parallels of Gleichshaltung…
Just replace hitler with you know who
just replace german, with american
and replace nazi, with Progressive Democrat…
what people fantasize thanks to movies is that they get power, and a week later there are posters and flags and so on and so forth…
no… they get power then they have to change the state in certain ways… of course if you dont know this, know the history, and so on, you will imagine that the moves of Gleichshaltung would be just party trying to gain advantage while it can
but what is not being noticed is that these are ILLEGAL changes and changes that are ignoring law…
ie… the restructuring is violating the law to get its structure in place… and people like krugman are a distraction from any real debate or real action…
ie… his purpose is to prevent consensus on what they dont want, to happen in the peoples minds… ie… as long as there are people with false credentials (earned by stacking the board who gives them out), there are people who will refuse, like hux, just to be reawsonable.
oh… they would choose if they knew 110%, but less than that, they will just stand around… even if it changes, they will continue to try to act the same and not change their behavior… that is until someone shatters their idea of their reality and there is no more way to skirt or play with it, no matter how many krugmans
anyone noticing the authoritarian dictatorship that is now russia, and how it has nuclear weapons, and how its now also teamed up solidly with China…
any one realize that they have their fingers on a grenade stuffed up the oompa of the american people and are going to pull that pin…
when? 2012..
here, let me make it EASY…
if you had the worst president in the history of the US in office, and your goal was the removal and destruction of that state, and your open about it, then would you want them to replace him with another person just as you have been able to maneuver things to take advantage of it in spades?
ie… does russia and china do better in their END GOALS if Obadiah stays or goes?
right now we have similar structures, similar skirting of the law, the same ideology, external agents helping, and on and on..
heck… given what Reagan did to the soviets would you think that they, given history of man, would just let it rest and NOT persue the same in revenge?
Putin Calls U.S. ‘Parasite’ as Russia Gobbles Its Debt
http://www.bloomberg.com/news/2011-08-18/putin-slams-u-s-parasite-after-1-600-jump-in-russia-holdings.html
taken and converted from a history timeline:
On the state and local level, American town and city governments were allowed to continue as before but the Progressive Democratic Party political chain, extending upwards to the Gauleiters, existed side by side with the local government establishments.
Thus, a town could possibly have a non-Progressive Democratic leader and town council, but such persons were merely “rubber stamps” for the local head Progressive Democratic leader.
the next paragraph was about paramilitary groups… and the SS… but in this case, we have holder, and HHS… and the SEIU.. (notice how a judge had to tell them not to throw feces)…. as well as the brutal class, and most are not paying attention to obama’s social group that he said would be bigger than the US military… (you think that if he starts giving out class based jobs to do things as in last century people wont line up?)
By later 2012, there was virtually no distinction between the progressive democratic Party and the american government.
[the policies of the progressive party and the state were one and the same regardless of constitution, or laws… what the progressive party wanted, it got, regardless of protests from the public or if the majority was opposed to it!]
Obama, by this time, had remolded and merged the office of President into the new responsibilities of leader of America and remained leader of the progressive democratic Party.
The Democrat flag was now the official Flag of America and the American armed forces now wore progressive insignia and swore personal allegiance to the leader.
In addition, nearly all progressive Party groups were sponsored and in some way connected to the American government
i love this quote rewritten:
Some claim that this confusion arose from Obama’s great failings, his boredom with administrative detail, and his preference for wider questions like foreign affairs.
It seems more like that Obama was satisfied with this system that enabled him to block and nullify any initiative or individual unacceptable to him.
the original:
Some claim that this confusion arose from Hitler’s great failings, his boredom with administrative detail, and his preference for wider questions like foreign affairs. It seems more like that Hitler was satisfied with this system that enabled him to block and nullify any initiative or individual unacceptable to him.
who is Jesse Lee?
our Truth Czar!
who was Goebbles?
Minister for Popular Enlightenment…
a truth czar… (but since germans were opposed to communism, they couldnt use czars so called them ministers)
so the democratic national committee responsibilities are becoming one with the state… that is, they are moving tasks that are party tasks into state departments… like who?
and about that time, the same time as now…
the VOLK started acting out and attacking the scape goats..
just as blacks and other are now attacking whites as oppressors.. the party is refusing to prosecute them, just as they refused to prosecute the brutal class for actions against the jews… and just like then, they equate capitalism with judaism…
how about on economy?
we have 1.. and call it crony capitalism..
Third Way’s Anne Kim at DNC 2008, Denver
http://www.flickr.com/photos/thirdwaythinktank/3619572299/
today they hide it… calling it CENTRISM
Third Way (centrism) (wiki)
how about the speeches of economic self sufficiency?
how about the wars dont stop?
and we refuse to respect sovereignty?
from the history timeline:
All these ideas formed a part of Nazi economic thinking, but they were never coordinated into a single economic strategy.
The big winners of the Nazi economic policy were large industrial companies, especially those geared to rearmament.
and who are the winners of Obama?
the auto industry he nationalised [Too]
the banking industry he nationalized through regulation [Too]
the schools he took over with by controlling who gets funded?
big companies can buy uo small company ip now…
its a feild day as they are consolodating into larger state controlled entities.
it takes years… not weeks
sound familiar YET?
pigford… the national endowment for the arts being tasks for the leader and the cause… departments of state helping campaigns… as if the state and the party are indistinguishable…
from the same wiki page
ok… is it clear yet?
when communism fell that left only ONE form of dictatorship on the table… Fascism… with China booming using that model, and maintaining power.
guess what won in 1995?
not capitalism… fascism…
and just read that list… and the third way CEntrism stuff
its Nazi (nationalizers) all over again…
the merging of party and state and the outing of all other parties, with the idea of not having to listen to anyone else.
its all the same
and its the SAME TARGETS…
dont think so?
then let the socialists tell you THEMSELVES
from World Socialism org
(world socialism is communism)
http://www.worldsocialism.org/canada/marx.and.antisemitism.1960.v27n214.htm
its a interesting piece in which they point out marx antisemitism, and the left apologist then comes up with excuses a to marx was in a bad mood..
but one of the more telling is this in which they are so focused on one point that their point then proves what they wish to disprove:
but noticed how his attack on the second part, he agrees that Capitalism = Judaism/Christianity
so what will eventually happen is a repeat of history
except that there will be no rescuers this time
helen thomas let the mask slip, it wasnt a fluke