Oh, this is hilarious.
On Monday’s broadcast of “Morning Joe,” New York Times columnist and Nobel Prize-winning economist Paul Krugman argued that “deficit things” aren’t something to be worried about, at least for the time being. But according to Steve Rattner, the Obama administration’s former “car czar,” Krugman’s analysis is the economic equivalent of climate change denial.
On Tuesday’s “Morning Joe,” Rattner reacted to Krugman’s remarks by making the analogy between climate change and the government’s long-term fiscal challenges, and suggested that both are problems requiring immediate attention.
“[T]o me, being a debt denier is the same thing as being a climate change denier,” Rattner said. “We’re putting millions of tons of carbon in our atmosphere every day that we are going to have to deal with, and we’re incurring billions of debt every day we have to deal with.
But which one actually affects people’s lives today? Or, should we just let the grandkids deal with it? Heh. h/t to Chris Horner.
wow…that is going to be a very interesting dialogue in the papers. Krugman has an advantage in that he can formulate his response in an article and blather on and on (as he almost always does).
A fancy way of deferring it to our grandkids. Pick an enemy you can’t fight (climate change) and equivocate about the national debt. Presto! Another enemy you
can’twon’t fight!Oh drat. Strike tag is bogus….
[Fixed. Use angle brackets. — mod.]
If anyone thinks this was an off the cuff remark by Rattner, think again. They never say unplanned things as the goal is always controlling the message. This is their new meme.
Peter Schiff – Operation Screw The Fed goes all-in on QE
There’s one big difference: debt is definitely 100% anthropogenic while climate change is theoretically some percentage anthropogenic.
[snip]
I’ll just dismiss the silliness of the phrase “climate change denier” insofar as its usage is just a sign of the writer being either lazy or stupid, or both. Beyond that, I have developed great concern about my share** of the USA National debt. But if a Nobel Prize winner tells me not to worry, well okay then, I’ll move on.
**
http://www.budget.senate.gov/republican/public/index.cfm/national-debt
Rattner has to be retarded or something. Everyone that believes that climate change is real is fooled by socialist propaganda/numbers adjusting to create the warming.
The same is true with the socialist propaganda/numbers for adjusting the debt ceiling. Krugmans “Nobel” is as scientifically sound as al-gore’s.
Can’t help but notice the timing of the remark…one day after Holocaust Day…have these people no shame? ….sorry, what was I thinking…
Krugman would have fit right in at Pravda ca. 1954. There is the Party Line and there is Gulag. That is the mentality Krugman brings to the NYT.
Hahahaha…one intellectual incompetent (Mr. Rattner) calling out another ignoramus giganticus (Krugman) is pretty funny. Maybe they will duke it out in a free broadcast UFC cage fight. The two sheep could slaughter each other rather than help lead the rest of the world into the darkness.
…Nobel Prize-winning economist Paul Krugman…
———————————————————————-
Alfred Nobel did not establish a prize category for economics – it isn’t a science.
Then again, what gore and the IPCC are doing is not science, and they were awarded the Nobel Prize.
Never mind…
Krugman is an embarrassment to anyone who has studied economics.
Forgive my lack of scientific knowledge here. But isn’t the paper in paper money made from forest products? Maybe not. Who knows, these days it could be made out of a new element called, ‘nothingness’. But, if it is made from forest products, isn’t that a hydrocarbon? And, at the rate Washington’s burning through money, isn’t it conceivable that we should tackle that first? Think of the trillions of bits of carbon. Of course maybe we can find some more new carbon sinks like Solyndra. Or, maybe there’s clean burning dollar technology. Maybe a super high speed dollar incineration process that leaves not a trace.
So far the evidence is that doubling the concentration of CO2 in the atmosphere has more positive impacts than negative ones.
So why should we want to do anything about it. Much less do so urgently?
The temperature has stopped going up for some 16 years. I only wish we could do that with the national debt.
I updated Obama’s climate change paragraph from a few days ago. Glad to see the MSM is starting to catch up.
“We, the people, still believe that our obligations as Americans are not just to our desire for immediate entitlements, but to all posterity. We will respond to the threat of ballooning debt, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of economists, but none can avoid the devastating impact of raging spending, and crippling interest payments on our debt, and powerful special interests demanding their share of my money. The path towards sustainable spending will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot allow other nations to enable our growing debt, as it crushes new jobs and new industries – we must claim the promise of a budget surplus and shrinking debt. That is how we will maintain our economic vitality, for it is economic prosperity that funds the preservation of our national treasure – our forests and waterways; our croplands and snowcapped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.”
All fixed.
The biggest debt (and growing) of ANY country ever in the world and recorded history,and it is nothing to worry about??? Can somebody please tell me just exactly what Krugman and Oblame did to get a Nobel prize??? Alfred must be doing about 20,000 rpm in his grave.
This seems like another reminder that, although current temperature curves say that there is no or very little correlation between CO2 and global average temperature, the meme that says “CO2 causes Global Warming” is alive and well. How does one drive a stake through the heart of that vampire? It is time for it to die.
Grow more plants; quit spending!
Two completely effective solutions to these “problems” they’re complaining about–and from a Climate Realist, no less.
But do you think they’d ever consider either solution? Of course not! They’d then have nothing to complain about.
It is also a means of creating a belief that the models must be grounded in reality because the debt problem certainly is. Anyone with credit cards gets the problems of debt. It creates a metaphor that can be related to at an emotional level. It also serves to concretise a concept that is not actually concrete in the least.
When I was researching this post http://www.invisibleserfscollar.com/now-more-than-five-years-into-an-attempt-to-help-organize-a-near-total-revision-of-human-behavior/ I came across the plans to use education and social science research and what gets funded in the hard sciences to force a belief in climate change. The document involved IHDP and Ehrlich’s Millennium Assessment of Human Behavior. The planners fully intend to track what it takes to change minds and confront any obstacles in their way. I kept thinking of this blog site as what they were alluding to every time they described removing obstacles to belief.
Over and over again it called attention to the importance of metaphors and narratives in selling a story. The even mentioned the Spaceship Earth as a metaphor the typical person could visualize.
That’s precisely what the media is doing here. Remember media and education are just two tools of a desire to control communication politically. No more annoying memes allowed that might undermine Statism.
The difference between debt and CO2 is that the CO2 will eventually come out of the atmosphere. Debt, if left alone, doesn’t go away.
Krugman is a Keynesian. Like with the global warming hypothesis, in Keynesian macroeconomic there are tipping points and positive feed backs (multipliers). Like global warming theorists, there is also the belief that the government can save everything quite painlessly by a few simplistic policies.
There is something that Krugman does not recognize, that is different from climatology. The problem with huge deficits is that there are tipping points that are all too real – and which many Southern European states have now passed. Haven’t heard too much recently about climate tipping points though.
Tom Jones says:
“How does one drive a stake through the heart of that vampire? It is time for it to die.”
Comment often across the internet, whenever you get the chance. On blogs, under newspaper articles, on any source that allows comments. The more folks that read what they privately suspect — that the “carbon” scare is grant-fed nonsense — the sooner public opinion will change.
“Debt, if left alone, doesn’t go away.” Sure it does. Bankruptcy comes instantly to mind, shortly followed by quantitative easing.
Some economists hold the belief that it is much better to carry debt than not. And this is true, to a certain point. However, Krugman makes this argument often in order to make an argument for some liberal idea. In my view, his thinking goes like this: He supports a wide range of liberal ideas, including the global warming scam; it costs money; we can use debt since debt is not bad; therefore he can reassure us no liberal idea is wrong insofar as it might cost too much money.
Some debt is OK in two ways. First, the “money multiplier” effect. I put $110,000 in a bank for whatever interest. The bank, unregulated, would lend 100% of it. However, they have to hold a portion back to service requests for demand deposits, to civer bad debt, etc.
So, they lend $100,000 of my deposit to someone to buy a home for $100,000. That $100,000 goes partly to title firm, etc., but mostly to home seller. Home seller deposits $90,000 in the bank. $80,000 of that loaned out, and 10% holdback to service demands for demand deposits and to cover bad debt.
Now, bank has $200,000 in assets springing from $100,000.
Saving.lending money creates wealth.
The other way liberal economists can argue indefinitely for ever-increasing deficit spending is that a burgeoning economy creates wealth simply by expansion, development of new markets, development of efficiencies and scales of efficiencies, etc. As the economy grows, the tax base grows.
So, deficit spending leads to an ever-expanding economy, and so future tax revenue will cover the deficit.
This does work. To a certain point.
It fails in the same two ways. The housing market crashed because (in part) too many loans went bad; the banks were lending too liberally. The hold-back was not sufficient to cover the bad loans.
So, the way 100,000 can become 200,000 works as long as only a modest portion of the loans go bad.
So, that is where the liberal argument for spending supported by the money multiplier effect fails.
When good money is thrown after bad, the efficiency and market expansion line fails to work. Solyndra did not produce wealth. A few received their millions, shuffled th emoney over-seas, and our economy was constricted to that degree.
Welfare does not produce people who contribute to overall economic growth and efficiency. It will only in a round-about way. If welfare reciipents have children who grow up to have jobs and ddevelop businesses, then the ‘welfare’ was actually working as an investment: money spent to create more wealth.
Saving ourselves from disaster is merely safeguarding the economy; it is not building wealth. If an actual disaster is prevented, then the net effect will be positive. But the “precaution principle” can be applied to many feared but unrealistic disasters (global warming, overpopulation, and so on) that to spend money safeguarding every disaster scenario would bankrupt us.
If and when solar becomes cost-effective versus coal etc., the market will take off on its own.
Finally, a problem of debt is that the borrower is slave to the lender. When China sends us baby food with melamine in it, or baby toys with lead paint, or threatens the other China, how can we confront them? We are not international equals; we are their slaves. If we get mad at them and throw some trade embargoes for giving our kids lead-tainted toys, they simply jack with our economy.
So, Krugman and others can come up with the debt-is-good arguments. All are valid, to a certain point. But over-extended is over-extended, Adam Smith still prevails, and the borrower is always slave to the lender.
Wasting taxpayer money on a scam is wrong.
That’s spending money we don’t have on something we don’t need.
That’s called waste.
cn
I really have to wonder at these two palooka’s . Krugman thinks printing money will fix the economy. That being the case why doesn’t every country just print their way out of difficulty like Zimbabwe did. That should work.
The CO2 boogyman that worries Ratner is beyond pathetic.
Both of them are quite useless and in my opinion cocaine has a lot to answer for. You can substitute liberal/left ideology for cocaine if you like because they are both absurd in their outcomes but it really doesn’t make any difference. They are both dismantling everything good that has been built up over centuries.
The debate isn’t about economics or science it’s about ideology.
Terrible political sense.
In my experience:
Folks who worry about the debt tend to think AGW is nonsense. They will tune him out.
(These look at data relative to history, and don’t trust academics)
Folks who worry about AGW are also Keynesians. They will tune him out.
(These look at model output, and trust consensus)
I’m obviously (over)generalizing, but I believe there is truth in my observation. Both groups think this man is a fool.
Debt left alone grows with the intrest rate, compounded year on year.
But which one actually affects people’s lives today?
=================
both…..
They told me I had to give them my money to hold…..because I was too dumb to save it on my own
….they spent it on Solyndra
They told me I had to give them my money to pay for my health care…because I was too dumb again….they spent it on windmills
Now they tell me they spent all the money I gave them and there’s no more money…..but they have the money for new infrastructure projects and to hire more government employees…..
They told me we’re all going to die from the heat…..if they don’t make heating in the winter more expensive…..now people can’t afford to keep warm
The told me cheap energy was the problem….so they raise the price of everything I need
…and their mouth piece campaigned by telling me how irresponsible I had been with my spending, credit cards, savings, mortgage, etc
Here’s the linkage: Paul Krugman was an adviser to ENRON as it was developing it’s fraudulent accounting and energy trading schemes.
Tom J: ‘paper money’?
Tom, US currency is actually made from 25% cotton and 75% linen. No wood products were sacrificed in this. However, there is a rumor that growing cotton involves carbon dioxide.
What a joy to see Krugman get a taste of his own venom!
Who are the deniers? Those that pay no attention to the 16 year stall in temperatures.
chris y says:
January 29, 2013 at 11:35 am
Amazing how very very close the President came to making a great speech. But unlike horseshoes and hand grenades…
Interesting how he equates two issues that are on the political poles. Left wingers thing AGW is a problem, but debt is great. Right wingers thing debt is a problem but AGW is insignificant. He should have fun trying to find allies on this one…
thelastdemocrat says:
January 29, 2013 at 11:57 am
“So, they lend $100,000 of my deposit to someone to buy a home for $100,000. That $100,000 goes partly to title firm, etc., but mostly to home seller. Home seller deposits $90,000 in the bank. $80,000 of that loaned out, and 10% holdback to service demands for demand deposits and to cover bad debt.
Now, bank has $200,000 in assets springing from $100,000.”
That’s not the only way it works. Fractional reserve banking allows the bank to lend a multiple of your deposit, because it is assumed that not all lenders (you and other depositors) will want their deposits back at the same time.
“Exceeding $79.5 million must have a liquidity ratio of 10%”
http://en.wikipedia.org/wiki/Reserve_requirement#United_States
When you deposit 100k, they can lend a million.
When the home seller in your example deposits his 100K, they can lend another million.
It’s very good business as long as there’s no bust.
“We’re putting millions of tons of carbon in our atmosphere every day that we are going to have to deal with, and we’re incurring billions of debt every day we have to deal with.”
Regardless of whether CO2 is bad or not? Watch and share this key 3 minute video (which converted me from a warmist to a skeptic) for a concise convincing rebuttal of the nearly universally held position that CO2 drives climate temperatures: http://www.youtube.com/watch?v=WK_WyvfcJyg&info=GGWarmingSwindle_CO2Lag
Anyway, in the long term, we are going to move away from carbon based fuels, naturally. In the meantime, the real concern is that we maintain and build our resource base (energy) so that we remain productive as a society, so that we don’t degrade into chaos as a society, and our population doesn’t crash. On the other hand, that seems to be the warmist goal:
“If I were reincarnated, I would wish to be returned to Earth as a killer virus to lower human population levels.” -Prince Phillip, World Wildlife Fund [note that the WWF is now spending millions of effective dollars on an ad campaign promoting AGW, and we need a counter to this {!}]
“We have wished, we ecofreaks, for a disaster… to bomb us into the stone age, where we might live like Indians, with our localism, .. our gardens, our homemade religion, guilt free at last.” -Stewart Brand, Whole Earth Catalogue
Trouble is, 97% of money is created by commercial banks out of nothing. They can do it because they have a license to do it from govt/legislature. Best business on earth, why, one gets something for nothing, also, utterly destructive to the economy.
Government does not create money, it borrows it. This is how public debt is created.
apachewhoknows says:
January 29, 2013 at 12:27 pm
“Debt left alone grows with the intrest rate, compounded year on year.”
That’s the reason for Bernanke’s zero interest rate policy – and why he will not allow it to rise ever again (He will fail, though).
Latitude says:
January 29, 2013 at 12:34 pm
Yet their “mouth piece” forgot to add how irresponsible his supporters would be with their votes.
How convenient.
Once a precedent is established that a government can spend more than it has already received in tax revenues then there is no built-in braking effect preventing it from justifying a little bit more deficit spending . . . endlessly. All the time ignoring the inevitable systemic collapse in the long run. My advice is individually we withdraw and take individually the severe economic pain now for our own individual total solvency, do not procrastinate.
In the scenario of the politically directed pseudo-science of alarming AGW from CO2, once the precedent of having government virtually dominate the scientific process (as it currently does) in climate research and assessment, then there is no built in braking effect on escalating climate alarmism . . . . but there is a trust calibration mechanism called the skeptical blogosphere to remind the public that untrustworthy climate science is no basis for destroying to modern world.
John
So Krugman is denier who is in denial and castigates those he sees as in denial whilst the government who are in denial are not in denial? My head hurts.
/sarc
Meanwhile…Up North.
We are also being challenged from abroad by those who would seek to end our way of life for the supposed benefit of the animals that share our environment. Seals are not endangered, and polar bear populations are increasing under our successful co-management. That’s an inconvenient truth that animal-rights activists and environmentalists don’t want you to know about.
http://fullcomment.nationalpost.com/2013/01/29/terry-audla-on-idle-no-more-the-view-from-the-far-far-north/
The problem is quite simple to those who deny denial deniers deny denying deniers deny denying denial denying.
Although I am not a USA ciitzen I used the share of debt calculator to see what a person turning 21 in 2013, would be faced with, before setting out in life, all bright eyed and bushy tailed
Ans: $750,000.
But mind you, most Australians think their Government is also run by stupid people.
thelastdemocrat says:
January 29, 2013 at 11:57 am
—
There’s an old saying. When you owe the bank $1000, the bank owns you. When you owe the bank $1,000,000 you own the bank.
Yes we owe China a lot of money, but what are they going to do about it. If they do anything to hurt our economy, we will never be able to pay them back. And if you don’t believe the loss of that money would be devastating to the Chinese economy, then you havent been paying attention to the CHinese economy lately. Right now China and the US are two legs of a two legged stool. If either of us collapses, we take the other down with us.
Well, of course climate change is real. The climate is supposed to change. He surely means to say “anthropogenic climate change.” Some people know the difference and some don’t, which is normally one way to see if somebody has an idea what they’re talking about or not.
But as far as Krugman goes, if Krugman was right about spending, deficits, stimulus, etc., Greece would have the best economy in the world.
When Greece, Spain and Italy have problems with their debts, the prescriptions of the international community was to force them into austerity measures —cut government spending, social security, etc and raise taxes even to a point that unemployment went up over 15 per cent and even to 25 per cent and their economies went into recession. Well it is not just those EU countries but Asian and South American countries had received similar prescription to solve their debt and repayment problems. But how come when US faced an automatic spending cut and increase in taxes, the so called “fiscal cliff”, the whole world was taking a long breath that congress could agree to a formula to avoid the fiscal cliff ? Does this have to do with the abandonment of the gold standard and the limitations of the special drawing rights as substitute for gold? Well one US dollar is equal to one US dollar, although the purchasing power of one trillion dollar US debt today could be worth less much less a billion in the next few years even after adding the interest. As one Chinese government official puts it, their holdings in US debts or bonds are like fridges full of spoiled and rotting fish. But China and the rest of the world continue to buy and horde US debts or bonds.
MarkW.
This is what I don’t understand about so called dumping claims in international trade disputes. If China were to truly sell goods to the US at below their own production costs it would harm them more than it harms us because for any good there are more consumers of the good than producers. So by selling us goods at below their own production costs they would in net be subsidizing our economy at the expense of their own.
A) Why would any think they would do something like that?
B) Even assuming they were doing it, using a greater good perspective, why would we want them to stop?
The problem with the national debt is going to be that either interest payments (which are already something like 12.5% of total federal expenditures) will eventually completely overtake the budget if the fed doesn’t stop spending more than it takes in or China runs out of money to loan us.
On the latter point, when China needs to start borrowing money to keep the US economy going where the hell do people expect the money to come from?
“A government that robs Peter to pay Paul can always depend on the support of Paul.”
by George Bernard Shaw
For once, Krugman is right in this. Jobs are what are important. Peter Schiff and Steve Ratner are as bats**t crazy as Michael Mann and his merry band.
Ratner and Schiff, et al, can’t seem to wrap their heads around the idea that we’re not on the gold standard anymore. We have a sovereign fiat currency, and have had, both domestically and internationally, since August 17, 1971. But they don’t know what that means, so they spout leftover laws from the gold standard era about the debt ceiling–the debt ceiling law was enacted in 1917 to keep gold from leaving the country–and the falsehood that we are leaving debt to our grandchildren. As silly as the CO2 left for our grandchildren argument, but as pernicious as an IPCC report.
I’m not up for arguing the case here, so I’ll leave some links, written in simple language that non-economists can understand:
“What Happens When the Government Tightens its Belt?”
http://neweconomicperspectives.org/2011/05/what-happens-when-government-tightens.html
“What Happens When the Government Tightens its Belt? (Part II)”
http://neweconomicperspectives.org/2011/06/what-happens-when-government-tightens.html
One of the best to explain the consequence of Americans not understanding their monetary system is Dr. Bill Black:
“Why the World Economic Forum and Goldman Sachs are Capitalism’s Worst Enemies”
http://neweconomicperspectives.org/2013/01/why-the-world-economic-forum-and-goldman-sachs-are-capitalisms-worst-enemies.html
Watch this 90 minute video that is worth every minute. Black talks for about 17 minutes. The rest is Q&A, but it’s all devastatingly smart and informative. Google for more Black:
http://dailybail.com/home/dr-william-k-b….nk-robbery.html
Canada, Australia, Japan, and Great Britain have monetarily sovereign currencies as well, although their central banks have different structures and operating procedures depending on how their governments set them up. For example, the 50,000 shares of the The Bank of Canada are owned by the Canadian Ministry of Finance. In the US, the Federal Reserve is divided in 12 regional banks, whose shares are owned by the banks in that particular region wherein each bank, regardless of size or shares, has only one vote. The US President appoints the governors that run the system as a separate governing body, but Congress enacts the rules and laws that says what it can do. Complicated. (pssst….Mullins, Schauf, and Kah got a lot wrong as a result of the Fed’s lack of transparency and arrogance; namely, the off-repeated falsehood that the US government pays interest to the Fed, when the truth is that all profits from the Federal Reserve system are returned to the US Treasury annually, by law, since 1947, after operating expenses are paid, and stock dividends that amount to about 1.5% to 1.8% of annual profits per annum.)
Whoops, the correct link for the Dr. Bill Black video is
http://dailybail.com/home/dr-william-k-black-the-great-american-bank-robbery.html
Tom J says:
January 29, 2013 at 11:27 am
Forgive my lack of scientific knowledge here. But isn’t the paper in paper money made from forest products? Maybe not….
>>>>>>>>>>>>>>>>>>>>>>>>>
No in the USA, Canada and many other countries ‘Money it is debt’, as in mortgages, car loans, student loans, credit card loans, business loans…. Only about 3% of the money supply is actual physical currency. This is why one of the hidden ‘I gotcha’s’ in Obamacare was a one liner requiring all businesses to report EVERY transaction over $500/customer/year to the IRS unless it was via a credit card. Small businesses screamed bloody murder and it was killed thank goodness or we would be choking on red tape by now.
From the article: “It’s like waiting to see after we put a lot of carbon in the atmosphere and see if we can still breathe.” That’s amazing; it’s got to be a new low for ill-informed commentary.
Why hasn’t the well-organized and well-funded denial machine produced more films like this? It’s been, what, four years?
Much of China’s growth has come from subsidizing specific, favored industries and businesses at the expense of all others. They’ve done everything they can to “stimulate” their economy and they’ve run out of stimulus money and things to stimulate.
As for dumping, our consumers aren’t harmed. However, domestic businesses and their workers are harmed. Overall, it’s usually a net gain, as more consumers benefit than employers and workers are harmed by the unfair competition. You may also notice that these dumping complaints come from businesses or labor organizations with political connections.
I’ll add one caveat — it’s possible China will subsidize and industry and dump its products below cost and then raise their prices once their domestic competitors are out of business.
I apologize for that formatting snafu at January 29, 2013 at 2:59 pm.
This is what happens sometimes – especially as people get older, they start to make loose associations on unrelated topics. I have to remind myself about it all the time.
This says it all http://niklowe.blogspot.co.uk/2013/01/that-american-national-debt.html
thelastdemocrat says:
January 29, 2013 at 11:57 am
….Some debt is OK in two ways. First, the “money multiplier” effect. I put $110,000 in a bank for whatever interest. The bank, unregulated, would lend 100% of it. However, they have to hold a portion back to service requests for demand deposits, to civer bad debt, etc.
So, they lend $100,000 of my deposit to someone to buy a home for $100,000. That $100,000 goes partly to title firm, etc., but mostly to home seller
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
WRONG!!!!!
You forgot about FRACTIONAL RESERVE Banking. You put $3000 dollars in to saving and the bank then lends out $100,000. Although in actual fact they do not even do that.
EXAMPLE
This is the speech that Senator Aldrich had the cojones to quote at a New York City dinner speech on October 15, 1913 IV Proceedings of the Academy of Political Science #1, at 38 (Columbia University, New York (1914)) after he got the ‘Aldrich Plan’ aka the Federal Reserve Act passed.
Well, interestingly, Rattner got out of the kitchen where I guess he saw books being cooked.
Huge point. One idea I’ve had is for somebody with extra $ or fund raising ability to do Google Adwords or the like and pay to drive people to this video (which shames Al Gore & the IPCC for their key CO2 deception). Do something so that nearly everyone will see at least this video as far as AGW is concerned.
Contact DRUDGE somebody.
See if he’ll link to the video.
RockyRoad says: Grow more plants; quit spending!
Actually that is the perfect solution … applied to all the unnecessary federal employees such as gravy train climate scientists, lying EPA officials, etc. ; take away their salaries and send them all to re-education farms.
Two eminently sensible questions, that unfortunately don’t look behind the “curtain” to see what the wizard is really up to.
If the only effect of dumping by China was to subsidize American lifestyles we’d say “Bring it on!” However, in real life dumping has long term negative consequences for the “dumpee”. Steel is a popular example. Cheap Chinese steel puts pressure on American mills to lower their prices, a good thing all else being equal. When the Chinese government subsidizes Chinese steel by allowing it to be sold for less than the cost of production (dumping), the price may go so low that American mills are forced out of business, or margins are so thin they cannot upgrade to newer technologies and fall further into the competitive hole. Once the major American players have left the stage, the Chinese jack up the price to recover their shortages and then some. Because steel is such a capital-intensive industry, it’s almost impossible for an American manufacturer to emerge and challenge the near monopoly. This, in fact, was exactly how Carnegie became the single most powerful steel magnate the US has ever seen.
Some industries we’ll probably never recover; anything where labor costs are the major driver are likely gone for good except for niche manufacturers. At least until global labor costs equalize (in a couple hundred years or so). Those industries where capital costs are paramount (chemicals, pharmaceuticals, and yes, steel) are more “preserveable” if guarded from predation. Businesses will still go under as a result of stupid decisions by management (and labor; “Hostess,” anyone?) but at least they can have an honest shot at it if we discourage dumping.
Better yet, we’re going billions further into debt because we’re spending a pile to ameliorate a problem that may or may not surface 100 years in the future, instead of investing wisely now in — eventually — in research developing economically feasible and cost effective alternative energy resources (like LFTR) and waiting to see if there will or will not be any problem to solve that is worth the effort and money at some point in the future. LFTR makes sense regardless of global warming and/or CO_2. Even plain old inefficient Uranium makes sense regardless of CO_2. Solar will make sense — eventually — and is worth research investments now. Very little of this is worth wholesale subsidized investment to produce energy at a loss now, and it makes no sense at all to make energy more expensive when it is the fundamental factor limiting not only our prosperity but the prosperity of the whole world.
If Europe hadn’t bought into CAGW fifteen years ago and invested a huge amount of money on inefficient and intermittent power resources instead of developing and maintaining the ones they had, the regional economy wouldn’t be on the edge of disaster across the board. You can’t piss away hundreds of billions of dollars to no effect.
And the most amusing thing of all — no warming over the entire interval where they’ve been spending money like made to prevent — warming. Even as CO_2 has continued to go up.
rgb
So we have Rattner, who has us in the hole for $20B+ for the GM and Chrysler bailouts not to mention his screwing of the bondholders for a sweetheart deal to the UAW, lecturing Krugman about the evil of excessive debts (Rattner actually gets that right). Meantime we have Krugman wearing his “End is Nigh” placards in 2003 from Bush’s “excessive” debt who now suddenly has no problem running deficits in excess of 5% of GDP for the next decade. Essentially Krugman’s argument is that debt is good as long as you can’t pay for it. I’m abusing Keynes, but that economic school of thought is so obviously bankrupt I’m really disappointed at how strongly it persists.
In one way Rattner is right about Krugman being a denialist. Since the Fed manufactures money electronically, all of those trillions of New Dollars are generated primarily from fossil fuels. So the creation of money is truly worse than we thought!
@MattS
Dumping is used as a temporary measure to attempt to collapse local competitors for your manufacturing output. It was used fairly successfully by the Japanese in the electronics market to move the rest of the US consumer electronics manufacturing oversees.
The biggest problem is people confuse getting out competed with dumping and assume that countries with lower labor and regulatory costs are somehow cheating them out of a cushy job. The only way for us to compete with a lower labor cost market is to make our individual productivity levels cause a massive decrease in per unit costs. We can’t do anything about the regulatory costs except to vote the big government nanny state types out of power!
Owen
eo says:
January 29, 2013 at 2:23 pm
When Greece, Spain and Italy have problems with their debts, the prescriptions of the international community was to force them into austerity measures —cut government spending, social security, etc and raise taxes even to a point that unemployment went up over 15 per cent and even to 25 per cent and their economies went into recession….
>>>>>>>>>>>>>>>>>>>>>>>>>>>
Hate to tell you but the US unemployment is ~ 23% and climbing. link
The only reason most people do not know that is because the government changed how they counted the “unemployed” They now have a new category called the discouraged worker. The Bureau of Labor Statistics (BLS) says if a worker is out of work but hasn’t looked for a job in the past four weeks, he isn’t considered employed or unemployed; he simply isn’t counted as part of the labor force at all.
If you consider the graph in the first link it tells a rather nasty story. The real unemployment is rising while the BLS numbers are declining. This means the number of discouraged workers who “wanted and were available for work,” but have given up looking for a job is increasing -NOT GOOD!
Shadow Statistics graph of year to year changes in Withholding Taxes and Actual Amount Withheld Do not forget the Fed doubled the US money supply in 2008/2009 which effectively halved the value of the dollar. You can see that reflected in the price increase in gas at the pump.
When Obama said the price of energy would skyrocket he also meant the cost of everything else would too as the value of the dollar torpedoed. However thanks to Clinton’s NAFTA and WTO your wages will stay the same or decline. The US Census Bureau released median income, poverty and insurance stats today,… the trends in median income are not encouraging,… the median wage is declining, wages at the top are increasing.
Krugman is right in one sense, the situation is so far gone that a few more zeroes don’t matter.
“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” Von Mises
We are many years past the point where voluntary abandonment is politically possible.
policycritic says:
January 29, 2013 at 2:43 pm
For once, Krugman is right in this. Jobs are what are important….
>>>>>>>>>>>>>>>>>>>>>>>>>>>
If you want to increase jobs it is easy. GET RID OF THE G@D D@@M RED TAPE and regulations!!!
Forget mucking around with the Federal Reserve. Just quit messing with the heads of small business people. In my case alone the US government KILLED three of my businesses, one of which I was just about to launch.
Over half of new jobs come from small business.
This allows small businesses to hire people (cheap) from India or China or elsewhere instead of locals just like the international corporations and therefore makes them more competitive.
Matthew Parris – a former MP – wrote in the London Times recently (sadly, paywalled) about the recent rhetoric from Argentinian PM De Kirchner concerning the Falkland Islands. His theme was that the 1980’s Falklands war was only a skirmish compared with the acts of the original European settlers, who deliberately exterminated the indigenous population of Argentina in the 19th century after its secession from Spain.
One quote struck me as very telling in the climate debate (Parris attributed the quote to the book “Patagonia Perdida” by Sanchez and Zaffaroni). It is: “There has never been a massacre without what in criminology is described as a neutralisation of values. I neutralise my values by demeaning my victim. I neutralise my values by claiming that my victim is the aggressor.”
While (hopefully!) we are not talking of massacres in the literal sense, in the climate debate it seems to me there is this same “neutralisation of values” being deployed. Examples are warmists freely using the “d-word” as a demeaning term; claiming that sceptics are funded by “big oil”; that sceptics (as aggressors) are seeking to overturn “settled science” – and many more (including as here comparison with “debt deniers”, whatever that term might actually mean).
It might be an interesting project to develop software to scan articles, papers, comments etc and come up with a (normalised) “neutralisation value” score for the item!
The big difference is the effects of debt are all bad and will start soon. I personally doubt we will get through 2013 without an implosion in world trade. Whereas, the effects of AGW are mostly good and won’t have significant effect for decades, if ever.
Wow… Although Rattner is right on two issues: 1) the debt and unfunded liabilities need immediate solutions, 2) Paul Krugman is an idiot, his claim that Krugman’s lunacy is on par with honest CAGW skepticism is non sequitur.
Krugman believes that the way to get out of debt is to first go deeper in debt and worry about the consequences later. CAGW skeptics believe CAGW theory is fatally flawed based on assumptions clearly not supported by existing empirical evidence.
Simple accounting, math and knowledge of history clearly show that countries taking on debt in excess of their GDP, all eventually collapse.
It’s obvious the Keynesians and CAGW aficionados are the ones not facing reality and are implementing policies that will eventually destroy many people’s lives and livelihoods. Ironically, many of the expensive CO2 policies governments have implemented have contributed substantially to the debt crisis.
Hayek>Keynes
“For once, Krugman is right in this. Jobs are what are important.”
So eliminate the 80% of government that gets in the way of companies trying to create jobs.
Currently we have Western governments taking money from companies who could use it to employ people to do something useful and instead using it to employ people to dig holes and fill them in again. Since those jobs do not contribute anything, no-one other than the government is going to pay for them, so that policy rapidly becomes impossible to change. Then the hole-digging programs expand until the entire economy collapses because there’s no money left for real jobs.
Paul “An Alien Invasion Would Help The Economy” Krugman?
IMHO after the Peace commission started giving prizes to terrorists, the entire Nobel brand became worthless. I care more if you won Employee of the Month at McDonalds than I do if you won a Nobel prize. I know some people still hold a lot of esteem for other commissions, but I think that, especially in more subjective areas as literature and economics, it’s all politics.
My rather simplistic understanding of US debt is that with the federal governments debt at over $16 trillion, every American owes over $51,000.
As of November 2012 the federal government had borrowed $4.8 trillion from itself:
$376 billion from Department of Defense Military Retirement Fund,
$819 billion from Civil Service Retirement and Disability Fund Office of Personnel Management
$228 billion from Federal Hospital Insurance Trust Fund
$2.6 trillion from Federal Old-Age and Survivors Insurance Trust Fund,
and over one hundred other accounts.
In addition to money the federal government owes to individuals and corporations it also owes over $5.5 trillion to foreign countries:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
“Both President Obama and Professor Krugman are using very broad historical strokes to make the case that an activist federal government is essential to prosperity.
“In 1944, government spending at all levels accounted for 55 percent of gross domestic product (GDP). By 1947, government spending had dropped…to just over 16 percent of GDP.”
” Ironically, it seems that the postwar prosperity that America enjoyed after World War II was less the result of a carefully crafted political agenda than a by-product of what government stopped doing.”
http://mercatus.org/publication/economic-recovery-lessons-post-world-war-ii-period
The post world war II economic boom was essentially due to the US government reducing military spending. As far as I’m aware it didn’t have to spend money on Medicare, Social Security, the Department of Education, the Department of Housing and Urban Development, the Department of Energy and the Environmental Protection Agency.
The debt can’t be paid off by simply raising taxes or printing money and a major concern is the potential rise in interest rates. In 2012 the interest on the debt was about $359 billion.
http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm
If the annual interest rate was to rise to 8% as it was in the 1980’s the payment on the current debt would be $1.3 trillion which is around half the US government’s total revenue for 2012.
The US federal government and the EU and its member states could make no better start in reducing their debts than by cutting all funding to the Manns of this world.
D.J. Hawkins & More Soylent Green!,
“However, domestic businesses and their workers are harmed. Overall, it’s usually a net gain, as more consumers benefit than employers and workers are harmed by the unfair competition. You may also notice that these dumping complaints come from businesses or labor organizations with political connections.”
No, there is no evidence that this is ever not a net gain in practice.
“I’ll add one caveat — it’s possible China will subsidize and industry and dump its products below cost and then raise their prices once their domestic competitors are out of business.”
The same argument gets raised against monopolies and it’s invalid. That I am aware of there is not one single solitary case of this happening in real life. Cite some evidence if you think I’m wrong.
In real economic terms it can’t happen. They could raise prices in theory but only so far and not above a normal market rate for any significant amount of time. The problem is no matter how badly the old competition get’s crushed, once they raise prices they face two threats. One is market substitution. The other threat is that of entirely new competition rising up. That new competition will have newer and better plant, equipment and processes than the old competition and they face the real possibility that the new competition would have lower unit costs.
To put both of these threats in therms of the specific example of steel raised by by D.J. Hawkins:
On market substitution, composite materials like carbon fiber are fast reaching the point where they can replace steel in most structural application not only in terms of structural properties but in terms of energy needed, precision in complex shapes and material waist. China raises prices and global demand for steel tanks. China gains no profit from excess prices that exceeds our gains while they were dumping.
On new competition. China raises prices. Fred inventor comes forward and says he has a new design for a steel mill all new tech. It will produce steel for a fraction of the cost of China’s current steel mils in terms of labor, energy and material waste. “But such a design does not exist” you reply. To which I reply “Necessity is the mother of invention.”. More time, money and energy will get sunk in to inventing something we need now than in something we might need 10, 20 or 30 years from now.
Surely, the real and current debt problem is very largely BECAUSE of the unnecessary burdens on business imposed by responding to the conjectured and notional climate “problem”.
Concerning the debt I, for one, just don’t get it. After all “Reagan proved deficits don’t matter”:
http://crooksandliars.com/jon-perr/reagan-proved-deficits-dont-matter
and Greenspan convinced Congress and President Clinton that surpluses were a bad thing:
http://www.dailykos.com/story/2011/07/07/992184/-Greenspan-in-2001-We-re-paying-down-the-debt-too-fast-VIDEO
This in addition to wiping out the last vestiges of Glass-Steagall (which required that banks act like BANKS and not CASINOS) and other deregulation (actually getting rid of all OVERSIGHT) of the financial industry allowing the 2008 debacle to the rescue tune of approximately 16 trillion (THE DEBT):
http://4closurefraud.org/2011/10/10/a-history-lesson-we-should-never-forget-the-long-demise-of-glass-steagall/
http://www.forbes.com/sites/traceygreenstein/2011/09/20/the-feds-16-trillion-bailouts-under-reported/
Even when the CFTC tried to at least get a handle on the worst offenders trading derivatives, that agency was permanently prevented from doing so on Greenspan’s recommendation:
http://en.wikipedia.org/wiki/Brooksley_Born
And let’s not forget, Greenspan’s hardcore party of choice.
And then on top of all this, the only other party available wants to add to the misery by raising energy prices and regulating CO2. It appears that Lobbyists and Big Corporate money rule the people we vote for and my conclusion is that for anyone not wealthy it’s just going to get economically harder, especially with real inflation (per 1980 standards) at around 10% (and that’s not even considering “real unemployment”
http://www.shadowstats.com/alternate_data/inflation-charts
http://www.shadowstats.com/alternate_data/unemployment-charts
http://www.foxbusiness.com/government/2012/10/05/real-unemployment-rate/
http://www.forbes.com/sites/peterferrara/2012/10/11/obamas-real-unemployment-rate-is-14-7-and-a-recessions-on-the-way/
Well at least I’ve got my Big Screen (with lots of sports channels and cop shows)/ Face Book/ I-Phone/Video games (hey I’ll drive a really old car before I give THOSE up) to take my mind off the final days of doom, and Church to allow forgiveness/acceptance of the economic rape by the politicians, global corporations and the rich/powerful.
http://en.wikipedia.org/wiki/File:Chart_of_US_Top_1%25_Income_Share_%281913-2008%29.svg
http://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States
sarc off???
There is no Nobel prize for economics. “A prize was created by Sweden’s Central Bank in 1969, called … “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It was not established by Nobel, but supposedly in memory of Nobel. It’s a ruse and a PR trick, and I mean that literally. And it was done completely against the wishes of the Nobel family. Sweden’s Central Bank quietly snuck it in with all the other Nobel Prizes to give retrograde free-market economics credibility and the appearance of scientific rigor” (Yasha Levine)
It’s amazing to see the two wings of the same central banking bird in action. One is underplaying the reality of fake debt while the other is overplaying the reality of fake climate change.
“And let’s not forget, Greenspan’s hardcore party of choice.”
You’re assuming Greenspan wasn’t intending to destroy the existing financial system by feeding it fiat money until it exploded. Since he was a devout Randian in his younger days, that’s a poor assumption to make.
Nope that ain’t the quote of the week Anthony… Sorry.
THE quote of the week comes from Al Gore:
http://www.theglobeandmail.com/news/news-video/video-al-gore-believes-democracy-in-american-has-been-hacked-hopes-for-change/article7957537/
In this AP video he praises Al Jazeera and justifies his sale of Current TV to them… because of their climate change coverage!!!!
LOL
DoomedAnyway,
“Concerning the debt I, for one, just don’t get it. After all “Reagan proved deficits don’t matter”:”
Your confusing the national debt with deficits. The national debt is the LONG TERM debt of the US Government. Deficits are single year budget short falls. Individual Deficits don’t matter as long as you don’t let long term debt pile up out of control. In the long term, it’s the National Debt that matters.
The interest payments alone on the National Debt accounts for 12.5% of the annual federal budget and that number is growing. That’s just the interest on the Debt it contains no principle payments.
After Regan, Bush I attempted to balance the budget but failed miserably. He made a deal with a Democrat controlled Congress for spending cuts in exchange for tax increases that the Democrats wanted. The Democrats got their tax increases and then enacted token cuts coupled with enough new spending to out spend the tax increases 2 to 1. Note: For fairness sake not all of that new spending was actually voted on by the Democratic congresses during the Bush 1 Presidency. A significant portion was natural growth in entitlement programs. All this time under increasing budget deficits and growing National Debt.
Then came Clinton. He got immediately saddled with a Congress with both houses under Republican control. The Republicans in congress managed to push Clinton into a balanced budget. Clinton’s real genius was not the balanced budget itself but managing to convince the Democratic rank and file that it was all his idea while fighting the establishment in his own party tooth and nail to get the balanced budget enacted. (what balanced the budget under Clinton was real spending cuts + tax cuts)
Then Bush II happend. (Kind of the way Sht happens. I will confess to voting for him the first time around.) The Republicans now had the control of the Whitehouse and both houses of Congress. In a fit of apoplexy they threw fiscal responsibility, the best selling point they had with swing voters, out the window. Deficits abound and the National Debt continues to pile up.
Now we get to Obama who shows if anything even less fiscal responsibility than Bush II. Out of his first 4 year term in office only 2 annual budgets were passed as is required by law. For the first 2 years he had a congress with full Democrat control.
Social Security + Medicare + other federal entitlement programs + interest on the National Debt is somewhere between 50 and 55% of the total federal budget.
Defense spending is around 45% of whats left over for discretionary spending. So Social Security + Medicare + other federal entitlement programs + interest on the National Debt is somewhere around twice the size of the defense budget.
There will never be another balanced budget with out real meaningful entitlement reform that leads to real reductions in entitlement spending.
The problem is that Dem vs. Repub stopped being about Liberal vs. Conservative a long time ago. The candidates for both major parties are mostly Corporatists.
policycritic says:
January 29, 2013 at 2:43 pm
“For once, Krugman is right in this. Jobs are what are important. Peter Schiff and Steve Ratner are as bats**t crazy as Michael Mann and his merry band.
Ratner and Schiff, et al, can’t seem to wrap their heads around the idea that we’re not on the gold standard anymore. ”
Printing green pieces of paper makes you wealthy, you’re saying?
“I’m not up for arguing the case here, so I’ll leave some links”
That’s so sweet of you, admitting defeat before anyone even says a word.
MarkW says:
January 29, 2013 at 1:59 pm
Yes we owe China a lot of money, but what are they going to do about it. If they do anything to hurt our economy, we will never be able to pay them back. And if you don’t believe the loss of that money would be devastating to the Chinese economy, then you havent been paying attention to the CHinese economy lately.
You REALLY do not want to put that policy to the test!!
MattS says:
January 29, 2013 at 6:11 pm
……On new competition. China raises prices. Fred inventor comes forward and says he has a new design for a steel mill all new tech. It will produce steel for a fraction of the cost of China’s current steel mils in terms of labor, energy and material waste. “But such a design does not exist” you reply. To which I reply “Necessity is the mother of invention.”. More time, money and energy will get sunk in to inventing something we need now than in something we might need 10, 20 or 30 years from now.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
You are naive as heck. The Monopoly has the money, political clout and incentive to protect their position. Do you really think the invetor has a snowball’s chance in Hades of winning? Or do you think he will be ‘relieved’ of his invention or stonewalled?
In the USA we have raised the entrance bar very very high via red tape and regulations so an inventor has no real hope of competing. If you make a breakthrough on say a treatment on Arthritis do you thing the drug companies will ALLOW you to sell it? The answer is NO, my doctor worked for years with another doctor to get through the FDA a drug that arrests Rheumatoid Arthritis in the 1960’s. The FDA refused to allow testing. Stopping the inventor was as simple as that.
In another case my boyfriend (metallurgist) was part of a group that came up with a device that turned an off the street 1983 V8 gas guzzler into a car that got over 50MPG. Do you see that car on the market, HMMMmmm?
…..
Today, any new technology will be transfered to China or stolen by China. The US government will tell you that.
Oak Ridge National Laboratory Hacked…one of a group of national science laboratories run by the Department of Energy, was recently the subject of a targeted attack which resulted in a loss of data. Once again, there is reason to believe the attack comes from China.
Fact: Our debt to GDP is hovering on 106%. Europe is around 80%. We are in in worse shape overall with our government spending. When interest rates go up, inflation will be the only way out. We are screwed – unless magically, our GDP increases dramatically and for a sustained period of time. With Obama and the Democrats so powerful because they’ve learned how to pander to the average taker, we are headed for a disaster.
Mornin’ Joe reminds me of another Ratner (see: http://en.wikipedia.org/wiki/Gerald_Ratner ) – distantly related perchance(?), makes one wonder if such common sense runs in the family.
Yep. Enjoy! The effects are all good.
Mittal steel has done a pretty god job of underpricing competition, dumping and then raiding their depleted competition. After taking over regional players like ISKOR in South Africa (RSA) they jacked up prices to the point manufacturers decamped to China where they get subsidised steel sheets.
Further, products imported to RSA from China are even made from stainless steel produced in Middleburg, RSA. They land below the local price of the same raw material made locally. This is a combination of the two business models: dumping followed by jacking, and product dumping in the front yard of the country of raw material origin.
The fact that the can is being kicked down the road does not change the ultimate consequences: someone has to suffer, lose, or be exploited.
The irony is rich, but not surprising. Krugman is an another spoiled academic/activist in a large group of like minded spoiled brats.
Actually, it was out of respect for the thread, since this is not an economics website. A reference would do, if anyone were interested.
Our monetary system since 1934 has operated domestically on fiat currency. It’s what permitted three government economists to determine in 1939 that we, as a country, could produce the armaments and materiel for WWII, and put everyone back to work (since we also had the physical resources). GDP increased 400% over the next five years to meet that need. From “Keep From All Thoughtful Men” by military historian Jim Lacey, 2011, using misfiled documents form the National Archives.
In 1971, Nixon took us off the gold standard internationally to stop the French from draining the US gold supply at $35/oz. It was supposed to be a temporary announcement, but the financial value to the country showed itself. (The oil crisis of 1973 and Volker’s mishandling of the Fed led to inflation, but were separate and apart from the 1971 currency adjustment. Inflation was alleviated when natural gas prices came down in 1978 and its use as energy ballooned. Oil was down to $10/barrel by 1990.)
Only the federal government has the power to be counter-cyclical in a downturn, as in our cold economy today. By this I mean, only the federal government, as the issuer of the currency, has the power to spend into the economy–with those pieces of green paper you mock–to provision itself and buy the goods and services that the private sector produces: research, infrastructure (a $2T to $4T need at the moment), education, communication, health care (not a handout to insurance companies), etc.
The federal government is not doing it. It is letting the private sector suffer, because Obama and people like Geithner, and probably incoming Lew, have no idea how the monetary system actually works. The private sector is deleveraging (paying off debt). It has no extra income to spend on goods and services. Businesses have no reason to hire, as a result. Therefore, there are no jobs. Consequently, no income. Repeat the cycle. (Disclaimer: I think Geithner should be disgraced for his behavior as Sec Treas, and I think he should be charged with gross malfeasance for his behavior as Chairman of the NY Fed in failing to stop mortgage fraud–the Fed is the only entity in this country with the requirement and authority to regulate mortgage banks, specifically–which Geithner was warned about by the FBI in open testimony in Sept, 2004. He did nothing. He did zip.) Political appointees to the Fed do not understand how the Fed and our monetary system works. But the worker bees do. Read their papers.
Allow me to upset your day: the deficit is far too small. It needs to be a lot bigger to fix this economy right now. When the economy is at full employment and we have a smoking hot economy nearing inflation, then we can tax people and cut federal government spending to cool it down. Not now. The notion that we are leaving debt for our grandchildren is nonsense, and is obviated by the fact that we have a fiat currency. We’re not paying off the debt for WWII, are we, because we denominate our debt, as a country, in our own currency. Yeah, we print it internally. By decree. Fiat. The Congress authorizes it. It’s part of our Constitution. Germany 1923, not so lucky; it bankrupted itself by having to pay for its WWI debt in other nations’ currencies. And therein lies the problem of the Euro. Spain, Portugal, Greece and Italy, all 17 members of the EU gave up their sovereign currencies to take on a foreign currency, the Euro, controlled by a bunch of unelected guys, and now they’re [snip . . mod].
Gail,
“In another case my boyfriend (metallurgist) was part of a group that came up with a device that turned an off the street 1983 V8 gas guzzler into a car that got over 50MPG. Do you see that car on the market, HMMMmmm?”
There are a lot of inventions out there that claim to do something like this. All have failed to produce the claimed results when independently tested.
@Gail
Yup. You’re right, but it started a long time ago when no one was paying attention. In late 1979, early 1980.
At minute 2:50 in Part 6 of the 2011 INET Interview, Australian economist Steve Keen says that China announced its plans to relocate production from America to China. I contacted Steve Keen to verify this. He said he was there as part of an Australia-China press conference, and heard it.
Were we paying attention? Do we have foreign desks to investigate this stuff? Does anyone read anything more than local and possibly national news? No.
So what happened? After we destroyed the Mexican peso and Mexican mom-and-pop companies with NAFTA (well, Goldman Sachs did that, which the US fed govt reimbursed them for in 1996) and thumbed our noses at the NAFTA labor price of $2.22/hour because China beckoned with $0.60/hr labor (courtesy of Rubin, Rahm Emanuel, and others ramming the WTO, or GATT, through in 1998), American companies ran to China.
We, in our profound ignorance and arrogance, thought we were ‘opening the markets’ and ‘the Chinese would be buying from us’. That idiotic head of Clinton’s economic council, Laura Tyson, actually said so. Charlie Rose propagated the idea. “They’re going to be buying from us.” So our pompous greedy business owners rushed to China, made them sign non-disclosure agreements, taught them quality-control, where we got our supplies and resources, thought they were saving on shipping by giving them the names of their customers for direct-ship, and more importantly, we gave them our proprietary secrets and processes . . . because they signed a damn piece of paper.
These contracts were for five years. So do the math. 1998. 1999. 2000. Plus five years. Time came to renew the contracts. Did the Chinese re-up? No. They refused to sign, closed the factory, walked across the street with five years worth of info and engineering prowess, opened up a new factory, and beat us in every market we introduced them to.
This is why every American citizen has to drop whatever they think they know about how the US economy, and learn how the US monetary system actually works. Today. The US economy is run on a fiat currency–stop bioching about ‘printing money’–and is not here to serve a financial index or enrich the banks. The US economy exists for a public purpose, and the sooner we learn the A-B-C of that the better off we will all be. Screeching about the deficit is the first thing you drop. Second, is thinking that Social Security and Medicare are going to bankrupt us. Impossible.
Good Stuff @ RockyRoad,
January 29, 2013 at 11:38 am
“[T]o me, being a debt denier is the same thing as being a climate change denier,” Rattner said. “We’re putting millions of tons of carbon in our atmosphere every day that we are going to have to deal with, and we’re incurring billions of debt every day we have to deal with.
Grow more plants; quit spending!
Two completely effective solutions to these “problems” they’re complaining about–and from a Climate Realist, no less.
But do you think they’d ever consider either solution? Of course not! They’d then have nothing to complain about.
They will never quit spending our Money because they’re addicted to it!! All the investment in “clean” energy will just be a total waste of time. They spent nearly as much on the clean tech’s as on dirty coal fired and for what? A measly 10% of the total! And it’s intermittent to boot. At least in Australia we have a federal election on september the 14th and we can kick’em out Hard.
I do fear the damage has already been done though because of “poison pill” effects of our wonderful (/sarc) Carbon Tax and the mining Tax and just the sheer size of the Debt they have created (260 Billion and climbing).
By way of comparison, that is a gigantic amount of Debt 4 us. I know, through reading things like Anthony’s blog, how much they have screwed with us and the never ending plethora of speeches, headlines and pronouncements designed to keep them in power at our expense (literally and actually). Oh yes and they will never quit whingeing and complaining as away of wearing us down!! As we say in Aus, we’re all rooted. At least I have some skills I can sell off to the highest bidder. HFTC All.
@MattS says: January 29, 2013 at 6:11 pm
Matt, I’m a big fan of Hazlett’s “Economics in One Lesson,” but I’m not prepared to make a categorical statement that “there is no evidence that this is ever not a net gain in practice.” That doesn’t mean you’re wrong, but economics isn’t a hard science.
There are plenty of intelligent, educated people who believe free trade and globalism have destroyed the American middle class, and economics being what it is, I’ll wager you $1 we can find an economist who will say you’re wrong.
Gail Combs says:
January 30, 2013 at 1:40 am
You are naive as heck…
——————————————-
I don’t know. Sometimes the inventor / entrepreneur catches the status quo napping. Review the history of Microsoft and the early MS-DOS days, if I’m remembering correctly IBM could have retained control easily if they were on the ball – they weren’t. They didn’t understand the potential of personal computers at all.
I’m not claiming you’re totally wrong or that what you’re talking about never happens. I’m not even going to claim that it doesn’t happen alot; I really don’t know. I will say I don’t think it’s safe to just assume that the entrenched / established corporate community is even approximately omnipotent or omniscient with respects to controlling innovation and new players on the market.
I worked at Chrysler during the summers to pay for school. The old guys on the line said that they had already made tires that never ran out for the life of the car, including police cars which are retrofitted for 500,000 miles use, and Chrysler had already made an engine that ran at 100 MPH, even with the heavy metal carcasses they were in. I worked there before 1983.
This work was done during WWII, but shelved for commercial reasons.
MattS says:
January 30, 2013 at 5:59 am
…. There are a lot of inventions out there that claim to do something like this. All have failed to produce the claimed results when independently tested.
>>>>>>>>>>>>>>>>>>>>>>
Actually he worked for Ford and I think it was some sort of fuel injection they were working on but of course he could not say exactly what it was. We still used carburetors back then and gasoline fuel injection came out not long after. It may have been a combination of turbo plus fuel injection minus all the air quality stuff. All that EPA required junk on cars cuts down the fuel mileage. My 1976 Olds Cutlass 5 spd 8 cylinder with a carburetor got 26 MPG and my 1981 diesel pkup (VW) got 50 MPG after a caving buddy who was an airline mechanic finished messing with them.
After what Jim Jessup just did to my 1982 Pickup with a Cummins 12V Diesel, I am a lot more willing to believe the general run of the mill car on the road is an inefficient MESS. That old pickup is getting twice the fuel milage and she FLIES! She never had that much power before and she has over a 1/2 million miles on her.
Jim was on the design team for the engine and wrote the manual. Too bad no one at dodge or anywhere else ever uses it! We bought the Dodge factory service manual when we bought the truck. The factory manual is missing bunches of stuff about the proper way to tune that engine that is in the manual Jim Jessup wrote.
It has been forty years and if anything the fuel mileage on new cars is WORSE then I saw in the 1970s – 1980s
I presume you mean 100 MPG, but it’s still bull. If Chrysler put such an engine in their cars, it would give them a tremendous economic advantage over every other car manufacturer. The CEO and board of directors would endorse that in a minute, unless it was so expensive nobody could afford to buy it.
As for tires that last the lifetime of the car, the same thing. Chrysler wasn’t/isn’t in the tire manufacturing business. Any company that made such a tire would virtually corner the market.
So the old timers are full of bull. Always were, always will be.
Chris Mooney interviewing Paul krugman on “Point of Inquiry” — Krugnutter Gold:
http://www.pointofinquiry.org/paul_krugman_science_and_pseudoscience_in_economics/
policycritic says:
January 30, 2013 at 5:34 am
“Our monetary system since 1934 has operated domestically on fiat currency. It’s what permitted three government economists to determine in 1939 that we, as a country, could produce the armaments and materiel for WWII, and put everyone back to work (since we also had the physical resources).”
Well, that was independent of the currency as it was a wartime command economy. Besides, the US earned gold via lend&lease by selling weapons to UK and USSR.
“The oil crisis of 1973 and Volker’s mishandling of the Fed led to inflation, but were separate and apart from the 1971 currency adjustment. Inflation was alleviated when natural gas prices came down in 1978 and its use as energy ballooned.”
Volcker actually brought inflation under control by offering a higher interest rate than the inflation rate. That’s the normal way of bringing inflation under control; you reduce the money supply. Look it up, you got it the wrong way.
“Only the federal government has the power to be counter-cyclical in a downturn, as in our cold economy today. By this I mean, only the federal government, as the issuer of the currency, has the power to spend into the economy–with those pieces of green paper you mock–to provision itself and buy the goods and services that the private sector produces: research, infrastructure (a $2T to $4T need at the moment), education, communication, health care (not a handout to insurance companies), etc.”
Well, for instance priced climate research and invaluable wind turbines. Just two examples that show that the state can indeed spend all the money it prints, but you get no return in investment, making you poorer, not richer.
Do you expect your bureaucrats to spend money that they can generate in arbitrary quantity on something meaningful? Really? Do they do it right now? Oops, the US economy just contracts.
“Allow me to upset your day: the deficit is far too small. It needs to be a lot bigger to fix this economy right now.”
Hey, I’m German, you can decide to go to hell any way you like to, it’s amusing. We want our gold back, BTW, before you collapse.
“When the economy is at full employment and we have a smoking hot economy nearing inflation, then we can tax people and cut federal government spending to cool it down. Not now. The notion that we are leaving debt for our grandchildren is nonsense, and is obviated by the fact that we have a fiat currency.”
As exemplified by Robert Mugabe. I get your point. I think Mugabe is a big fan of Modern Monetary Theory like you. I hear Zimbabwe still has 217 USD in their treasury. That’s 16 trillion more than the US treasury has. Not that bad.
“We’re not paying off the debt for WWII, are we, because we denominate our debt, as a country, in our own currency.”
As I already said, the USSR and the UK paid their debt from WW II to the US. And after WW II the Dollar did NOT depreciate – it was still pegged to gold. Please check your facts.
@policycritic says:
January 30, 2013 at 6:06 am
I’d be really interested in learning how the US economy really works. Please tell us.
“I’d be really interested in learning how the US economy really works. Please tell us.”
Those who control the money-supply rule!
This power is so all-pervasive, that those wielding it, start to think they can control everything through their models, including the weather. And why not, they purchased the rest of reality with it. 😉
policycritic says:
January 30, 2013 at 7:47 am
I worked at Chrysler during the summers to pay for school. The old guys on the line said that they had already made tires that never ran out for the life of the car,
===========================================================================
Second time I have seen that assertion. As I am not a Physicist could someone please kindly explain how you can have an indestructable tyre and still have a vehicle that stops when you brake?
Be Kind … 🙂
I told my mechanic that Paul Krugman says that “Debt is something we owe ourselves”, but for some reason he still wants to be paid.
Leo Morgan says:
February 2, 2013 at 7:50 am
I told my mechanic that Paul Krugman says that “Debt is something we owe ourselves”, but for some reason he still wants to be paid.
+++++
Krugman considers “ourselves” to be other people. That the is the problem. I owe it to you to spend my money. There are all too many people who never pay a cent, but take.