Free Markets, Free People


A cold day in Georgia in non-recovery summer

Well, not really, but that pretty much describes metaphorically how often Paul Krugman and I agree on things.  But today, Krugman, wondering what Ben Bernanke of the Fed is going to say today in his big speech believes it will probably be more of the same.  Albeit, we’re in a recovery, more slowly than we’d like and things will soon get better.  Krugman isn’t buying it (and neither am I.  If this is a recovery, I’d hate to see a recession). :

Unfortunately, that’s not true: this isn’t a recovery, in any sense that matters. And policy makers should be doing everything they can to change that fact.

Krugman also zeros in on the main problem that those policy makers should focus on:

The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead.

In fact, the GDP number for this past quarter is 1.6%. That’s revised sharply downward from the original 2.4% reported and touted by Democrats recently.  That, as Krugman points out, isn’t a good number when you are looking at unemployment.

Krugman then chastises those who are pumping sunshine up our skirts when the real economic news doesn’t warrant it – like the President and VP.  Bernanke and Geithner:

Why are people who know better sugar-coating economic reality? The answer, I’m sorry to say, is that it’s all about evading responsibility.

Ya think!  Gee wish I’d been saying that for, oh, I don’t know, 18 months.  For 12 of that it was Bush’s fault.  For the past 6, it’s been all sunshine, roses and “recovery summer”.  In effect, although not at all as blatantly, Krugman is validating John Boehner’s call to fire Obama’s economic team.  Because it is clear that the policy makers haven’t a clue of how to fix this mess.

At this point in his op-ed, Krugman reverts to his old self – a hack.  After talking about evading responsibility, he goes for the “obstructive Republicans” canard. 

And when he finally gets around to saying what he’d do, as you might suppose, it is spend more money that we don’t have.

Addressing the Fed he says:

The Fed has a number of options. It can buy more long-term and private debt; it can push down long-term interest rates by announcing its intention to keep short-term rates low; it can raise its medium-term target for inflation, making it less attractive for businesses to simply sit on their cash. Nobody can be sure how well these measures would work, but it’s better to try something that might not work than to make excuses while workers suffer.

In layman’s terms he’s saying let inflation loose and buy more debt (borrow).  He then covers his rear by saying “hey, it may not work, but it is better than doing nothing”. 

I’m not at all sure that’s the case.  In fact, my guess is if you let the inflation dragon out of the cage, you’ll never recapture it until it has ravaged the economy.  All that money that’s been pumped into the economy has to be wrung out at some point.  And there are no painless ways to do that of which I’m aware.

As for the administration his advice is as follows:

The administration has less freedom of action, since it can’t get legislation past the Republican blockade. But it still has options. It can revamp its deeply unsuccessful attempt to aid troubled homeowners. It can use Fannie Mae and Freddie Mac, the government-sponsored lenders, to engineer mortgage refinancing that puts money in the hands of American families — yes, Republicans will howl, but they’re doing that anyway. It can finally get serious about confronting China over its currency manipulation: how many times do the Chinese have to promise to change their policies, then renege, before the administration decides that it’s time to act?

Sure, let’s hand even more money to the two financial black holes – Freddie and Fanny – that have already sucked down half a trillion dollars we don’t have trying to shore up their loses and return them to solvency. Republicans have every reason to howl about Freddie and Fannie.  If Krugman were anything but a hack, he’d have to admit that.

And if he thinks the Chinese – who are actually in a real recovery – are going to stomp on their economic progress to fix ours, he’s dreaming.  Both proposals are absurd on their face.  But then when it comes to actual solutions, I’ve come to expect that from him.

However, at least in the first part of his column, he and I were in pretty much perfect agreement.  I need to go take a bath now.

~McQ

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38 Responses to A cold day in Georgia in non-recovery summer

  • Krugman is a one-trick pony.  Spend more.  More government.
    We all know him to be the snake-oil salesman he is (and that’s REALLY charitable).

    • When your only tool is a hammer, every problem looks like a nail.  That is Krugman.

  • Are the Chinese really in a recovery?  I keep reading things that indicate they’re actually in a bubble in a lot of ways

  • OT – kinda – as it does relate to the economy…
    via Balko and the heroes at the Institute for Justice:  Georgia’s neighbor – Alabama
    Eminent domain, by any other name … still stinks.

    Imagine you come home from work one day to a notice on your front door that you have 45 days to demolish your house, or the city will do it for you.  Oh, and you’re paying for it.
    This is happening right now in Montgomery, Ala., and here is how it works: The city decides it doesn’t like your property for one reason or another, so it declares it a “public nuisance.”  It mails you a notice that you have 45 days to demolish your property, at your expense, or the city will do it for you (and, of course, bill you).
    Your tab with the city will constitute a lien on your property, and if you don’t pay it within 30 days (or pay your installments on time; if you owe over $10,000, you can work out a deal to pay back the city for destroying your home over a period of time, with interest), the city can sell your now-vacant land to the highest bidder.
    Alabama law empowers municipalities to do just this.  Officials can demolish structures that they determine, “due to poor design, obsolescence, or neglect, have become unsafe to the extent of becoming public nuisances…and [are] causing or may cause a blight or blighting influence on the city and the neighborhoods in which [they are] located.”  Keep in mind, so-called standards like “obsolescence” are so vague they can mean anything, so even a well-maintained home that government officials don’t like the look of can be fed to the bulldozers.

    The mayor of Montgomery, AL is Republican Todd Strange.  Along with basically the entire government of Alabama.

    This is the kind of government jackboot authority that frightens me the most.  And if you think that Republicans are all about small government and property rights, then look no further than Montgomery, Alabama.

    Cheers.

    • Republicans = mixed bag
      Deemocrats = absolute consistency = BIG GOVERNMENT
      You choose.

      • Is “mixed bag” kind of like when you buy a can of “mixed nuts” it contains at least 80% peanuts?  Not really though, huh?  At least with the can of mixed nuts, they tell you that it contains at least 80% peanuts.
        Everytime I open up that republican “mixed bag”, they are not the nuts I’m looking for.  I get robbed.

        Besides, there are more choices than just republicans and democrats.

    • I can’t disagree either.   I read that this morning.  It is frightening to see any government with that much power.   Alabama needs to change it law to make a much stricter process prior to declaring a property a public nuisance and that needs to include a public hearing.  Perhaps if this procedure is turned around onto the mayor and his property, he will be a little more cautious.

      • Rick, the video suggests that there is LOTS of due process.  I DO NOT condone the law, but it isn’t different in theory than a lot of condemnation ordinances across the nation.

        • I did not get a message of due process out of the video.  I got an example of a guy with favorable court rulings who still got his property demolished.   I also saw:

          ” Keep in mind, so-called standards like “obsolescence” are so vague they can mean anything, so even a well-maintained home that government officials don’t like the look of can be fed to the bulldozers.”
          Since by billing the property owner for the cost of the demolition can lead to confiscation, this process can easily be consider back door eminent domain.    Even the term “blight” is terribly undefined and seems to lie in the eye of the beholder.

          • Rick, “due process” frequently leads to perverse and very wrong outcomes.  But it ISN’T caprice.  It ISN’T somebody taking a notion unilaterally and taking your property.
            We agree.  The law stinks.  It is WORSE than imminent domain, since the ID law generally requires something LIKE the market price be paid.
            My point is that…other than the lousy drafting…this law is vanilla common-place.

          • Rags, the quote I included indicated  vague definitions which defy due process which at least gives someone a chance.  The quote I included showed exactly someone, the government, unilaterally taking your property.  I also disagree that this is commonplace.  Were it commonplace, it would not be remarkable.

            It is “eminent domain”.

    • Is there any evidence that the government of Montgomery Alabama is predominatly republican? My guess is that like most areas of Alabama which has a large African American community, it is not.

      • The Mayor might be Republican, but is he behind this?  City councils often have more power than mayors.

        • Just googled the city council, four of them are black, probably not Republicans.

          I am not saying that Republicans are not capable of trampling rights, but I just wondered why you were so quick to want to leap to conclusions about Republicans when I never see you do the same for Democrats. 

          This is probably not a party thing, just some greedy dickheads who found a hole in the law. Hopefully they will be shut down by the courts.

    • “Along with basically the entire government of Alabama.”
      Except – the governor of Alabama is a democrat, there are 34 senators – 20 of which are DEMOCRAT, that leaves?
      103 members of the house – 60 of those are DEMOCRATS, that leaves?

      yeah – Pogue – where are you getting your talking points man?
       

      • Oh, man…
        You mean Poque told ANOTHER lie…?!?!??
        And here am I, believing the drunken Irishman….

      • Bob Riley is a Democrat!?!?  Not according to him, he’s not.
        Besides, it is the State of Alabama which gives these municipalities the authority to do this.  And the mayor of Montgomery, a Republican, could stop this in its tracks.  But he chooses not to.

    • We need to get Dale Peterson on the case.
      Tell him the Mayor is stealing election signs.

  • And before ya go and get all excited – Montgomery, can’t have it’s own set of laws that are in VIOLATION of the STATE CODE of ALABAMA…..
    Alabama law empowers municipalities to do just this.  ”

    “Over the last 5 years” -  the article says – these homes have been demolished….

    Todd Strange became the 56th mayor of the city of Montgomery on March 10, 2009, and was sworn in on March 23, 2009.  (which doesn’t excuse demo’s going on after his arrival, I realize….)

    Prior to Todd?
    Why…that would be Bobby Bright, current Democratic Governor of the state of Alabama.


    History
     

    • Current

      Todd Strange – the REPUBLICAN mayor.

      The actions that we are taking [the destruction of private property] is speaking volumes about cleaning up our city…


      Yeah, it is speaking volumes, your eminence.
      I’m not excusing democrats, merely pointing out that the Republicans seem to be no better.
      You seem to want to defend against that.

      Did you guys even watch the video???

      • I think this is an excellent example of a TERRIBLE law.
        So…?
        This isn’t EVEN imminent domain…which would give property owners just compensation.  This is more like a trash or mowing ordinance.  It STINKS…as law goes…and SHOULD be repealed.
        What does it have to do with Republicans as an alternative to the Collective?  Can you show it isn’t being used to do what it SHOULD DO?

        • Can you show it isn’t being used to do what it SHOULD DO?

          Umm… What should it do, Rags?
          I’m curious as what a staunch conservative like yourself thinks about the government taking private property and giving it to the highest bidder?  Without reason or compensation to the owner.

          • Well, Poque, according to your video…it doesn’t DO that.
            What is DOES do is condemn property to be demolished…just as do mowing or trash ordinances…or crack-house ordinances in a dozen jurisdictions (or more).
            The ONLY time it transfers ownership is when the owner fails to pay the assessment for demolition...just like in Houston when the owner fails to pay for trash removal or mowing on derelict properties…or property taxes.
            Do I like the Alabama law?  NO!  I think I said that.  It IS NOT, BTW, “eminent domain” (or even imminent domain).  Eminent domain is where the Cardinal lives…

    • Why…that would be Bobby Bright, current Democratic Governor of the state of Alabama.

      Why …Bobby Bright was never the governor of Alabama, let alone the “current Democratic governor.”
      I would state that maybe you’re stuck in history… but I don’t know where you are now.

      • O.o!!!!!! Holy….uh…..stuff….

        I wish I could plead the drugs Pogue – but I’m not on any (that I know of….).

        I also wish I had linked the stuff I thought I was reading because I was clearly reading from some….what…internal source?….holy……and it would be interesting to see what I thought I was reading…good Lord…..

        At any rate, my most sincere apologies for(my self inflicted gunshot wound) the Bright comment.
        Not to diminish that collosal disaster – it doesn’t negate that the laws in place are the state laws, and they occurred over the last five years, and Bright (who I see at least does exist and is not a further figment of my derangement) was the mayor of Montgomery during three of those.   (I’m wagering if they go back further there are more, I find it funny that people are only interested now, wonder why, but I find myself hardly in a credible position at present, so have done.)

        Here’s an interesting note however –  Alabama Governer (Republican) Bob Riley (hey! I got it right!)
        just signed new legislation into law in reference to seizure by eminent domain…..
        http://www.npr.org/templates/story/story.php?storyId=4789551&ps=rs

        • Well, we all make mistakes.  I made a mistake in this thread too when I wrote “along with basically the entire government of Alabama.”  Clearly that is inaccurate and was an assumption I made based on the politics and politicians I’ve seen out of Alabama.  That doesn’t excuse my mistake and I would offer an apology to readers for that mistake.
          The intent, of course, was not to excuse democrats or even suggest that they would be any better on the issue, but to indict republicans who are clearly being shown to support such travesties.

          And there always seems to be an excuse or rationale from politicians of all stripes to support this.
          In that vein, we have Rags here ridiculously comparing the destruction of private property and forcing the owners to pay for it, to failure to pay one’s trash bill.  And something tells me that Rags would not be making this laughable jump if the the mayor of Montgomery happened to be a democrat (or “deemocrat” as he so effetely puts it).

          I also offer my apologies to McQ for steering this thread in another direction.  That was not my intent.  Okay, maybe it was just a little.  ;)

          Cheers.

          • …we have Rags here ridiculously comparing the destruction of private property and forcing the owners to pay for it, to failure to pay one’s trash bill.

            Why…exactly…is what I pointed out to you “ridiculous”, idiot?
            Were you aware that the City Of Houston can sell real property out from under its owners if they fail to pay for mowing or trash removal, puke?
            Or, in dozens of other places, the city can condemn property and bulldoze it (i.e., crack houses), and bill the owner for the demolition?
            Why don’t you tell us all how this is fundamentally different.
            Hmmmm……?????

          • Were you aware that the City Of Houston can sell real property out from under its owners if they fail to pay for mowing or trash removal, puke?

            Why don’t you tell us all how this is fundamentally different.

            Okay.  The fundamental difference in your scenario is that the property owners would have owed the city money for a reasonable service (cutting the grass, picking up weekly trash).  In this scenario, the property owners do not owe anything before the city decides to condemn and destroy their property, then they bill the property owners for the destruction.  Also, in this scenario, the property is condemned even in the process of the owners improving the property.

            Jim Peera, who fought the city for years to keep a property he was rehabilitating himself — the kind of entrepreneurial private redevelopment that should be encouraged, especially in this economy – obtained copies of demolition records that indicate hundreds of homes and properties have been demolished over the past five years in Montgomery.  Some may have posed an immediate threat to public health and safety — but that was certainly not the case with all of them.

            It is obvious that the city of Montgomery is condemning property arbitrarily with the intent to seize then sale the property to the highest bidder.
            Get it now?
            (“puke”… how colorful.)

          • Not “weekly trash”, dope.
            There are people around the city who leave trash on their property…often they didn’t put it there, but it is there.  Or they allow a vacant or disused lot to grow over in weeds.
            Houston will come in with a crew and remove the trash, or cut down the weeds.  If you own the property, you are billed.  If you fail to pay, the property will be taken under a tax lien.
            You say that’s a “reasonable service”.  The Alabama statute apparently says that condemning a property is also a “reasonable service” under the circumstance it names.  Both come from the same notion…the public safety empowers the authorities to act to enforce codes.
            This is also what stands behind bulldozing crack houses.  How that is different is also something you ignore.  Because, of course, IT ISN’T, but your not honest enough to address it.
            The ‘Bama law stinks, but not because of what it DOES.  It stinks because it is so poorly drafted in naming the reasons for condemnation.  APPARENTLY, it DOES provide a lot of due process…years in your video.
            In your little “he was rehabing” melodrama, one thing I thought conspicuous in its absence was the question of his building to code.
            But the thing here is you’re having vapors over OLD, OLD news, dude.
            So, yeah, I always got it.  It was your apoplexy I didn’t understand.  Still don’t.  Never will.

  • From Wikipedia:

    Bobby Neal Bright, Sr. (born July 21, 1952) is an American politician from the state of Alabama. He has been a Democratic member of the United States House of Representatives since 2009, representing Alabama’s 2nd congressional district. The district includes just over half of the state capital, Montgomery, as well as most of the Wiregrass Region in the southeastern part of the state. The Mayor of Montgomery from 1999 to 2009, Bright is the first mayor of Montgomery to be elected to the United States Congress.

  • McQ - [T]he GDP number for this past quarter is 1.6%. That’s revised sharply downward from the original 2.4% reported and touted by Democrats recently.

    How long before the regime is boasting about GDP “created or saved”?  “Had we not acted, GDP would have been much lower…”

    Bah.

    KrugmanThe Fed has a number of options… Nobody can be sure how well these measures would work, but it’s better to try something that might not work than to make excuses while workers suffer.

    I suggest that it may be better NOT to try something that might further tank our economy in the short term and bankrupt our country in the longer term.

    Here’s the thing: let’s forget for a moment that Krugman is a hack working for an increasingly unread democrat propaganda sheet and recall that he is a Nobel Prize-winning economist.  On the face of it, therefore, his opinion carries considerable weight.  Yet, there are other well-qualified and famous economists who have prescriptions completely opposite of his.  Who is right?  How do we know?

    We’re in a situation where there is no easy answer, and those that have been proposed – broadly, either MORE Keynesian “borrow and spend” or else hands off, take the pain and let the market fix itself – offer considerable pain and peril.  This is what a centrally-managed economy gets us: prolonged uncertainty and the definite prospect that the people managing the show really don’t know what they are doing, and hence we all have to suffer for their incompetence.

  • Republicans = mixed bag
    Deemocrats = absolute consistency = BIG GOVERNMENT
    You choose.

    Precisely.  I dare say that if we had control of all three branches of government being held by republicans who are actually conservative, we might stand a chance.  I hasten to point out that the only combination   that hasn’t been tried.  I place the blame for that squarely on lap of the national GOP.