Economics Lesson Quote of the Day

"Recently Senator Rand Paul, potential presidential candidate and self-proclaimed expert on monetary issues, sat down for an interview with Bloomberg Businessweek. It didn’t go too well. For example, Mr. Paul talked about America running 'a trillion-dollar deficit every year'; actually, the deficit is projected to be only $642 billion in 2013, and it’s falling fast.  But the most interesting moment may have been when Mr. Paul was asked whom he would choose, ideally, to head the Federal Reserve and he suggested Milton Friedman — 'he’s not an Austrian, but he would be better than what we have.' The interviewer then gently informed him that Friedman — who would have been 101 years old if he were still alive — is, in fact, dead." --  Nobel Prize economist Paul Krugman in this morning's New York Times.  "Ayn" Rand Paul shows himself to be a moron when it comes to his area of supposed expertise.  Krugman completely dismantles what passes for economic theory in today's Stupid Party echo chamber.  It's a hodge-podge of harebrained ideas from Ayn Rand's novels, "voodoo economics" from the days of St. Ronnie of Hollywood, and stuff that's just made up out of whole cloth because it conforms with their world view.  We have to keep these people as far away from power as possible.

Cartoon of the Day

(click to enlarge)

(Tony Auth, via gocomics.com)

Rethugs Favor Tax Increase on Middle Class

Rethugs hate the idea of tax increases on the "job creators" (i.e., the rich), but they're all for letting the payroll tax cut, benefiting low-and-middle income Americans, expire. Why?

Rethug Gilded Age Economics and Dismantling a Century of Progress

We have two articles appearing in the Kaplan Daily today on the dangerously extreme economic philosophy of the current Rethuglican/ New Confederate Party. [Note: to read both articles in their entirety, once you go to the page link, click on the underlined introduction in each.] One, by Greg Ip, reviews the retrograde "voodoo economics" of leading party lights (as in "light-weights"). Alexander Keyssar traces the campaign to unravel nearly a century of social and economic progress by right-wing yahoos and plutocrats who want to turn back the clock to the 1880's (see Perry, "Hair", below):

"...To a historian, the agenda of today's conservatives looks like a bizarre effort to return to the Gilded Age, an era with little regulation of business, no social insurance and no legal protections for workers. This agenda, moreover, calls for the destruction or weakening of institutions without acknowledging (or perhaps understanding) why they came into being."

The only thing missing in the equation is a muscular, dynamic progressive counterweight to the momentum on the far right (paging Barack Obama...).

More Sunday Reading: Economics 101

Here's more reading to follow up on the post below, regarding the dumbassery of austerity in a recessionary period (and, yes, it's by another "faculty lounge product", but not one graduated by Glenn Beck University like "Stultis"). He's actually a Nobel laureate.
(Image: Am that u, Stultis?)

Sunday Reading: Cutting Our Way Back to the Depression

This Sunday's must-read is an article in the Kaplan Daily by historian Robert S. McElvaine, "Want to Avoid Another Depression? Try Understanding the First One" (sorry, no link). His point is that recovery from the Great Depression was stalled and nearly torpedoed in 1937 by the same policies Rethugs are pushing in today's economic environment - "slashing spending, concentrating ever more wealth and income at the top, and blocking effective regulation." McElvaine writes:

"The 2009 stimulus staved off a second Great Depression, but it should have been much larger to produce a genuine recovery. Subsequently, even with majorities in both houses, the Democrats let the GOP define the argument and failed to force through needed programs to get the economy back on its feet... The goal of Republicans today, though, is to use the claim that we cannot afford social programs as an excuse to go back to the halcyon days of Calvin Coolidge."

It's somewhat understandable why the facts-averse, low-information, history-on-its-head numbnuts on the right want to pursue the same ideologically rigid policies that led to disaster nearly 75 years ago. They can't help themselves. But why otherwise intelligent, rational people who are nominally Democrats feel they have to go along with this remains one of the great political mysteries of the decade.

Failing to Learn From the Past

With the dismal jobs report from May, Rethugs demand more spending cuts. Whether their motivation is strictly partisan sabotage or a basic lack of understanding economics, Rethugs and the cowardly Dems who allow the far-right to set the terms of debate would have us do precisely the opposite of what is needed to promote a healthy economy. Nobel winner Paul Krugman tells us why 2011 is looking like a repeat of 1937, despite ample warnings.

Reminding the Voters

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The red bars represent the job situation under Preznit Dumbya, while the blue bars show the situation under President Obama. We were losing nearly 800,000 private sector jobs per month as Dumbya and The Dick exited. Now, while slow and painful, the jobs have been coming back, despite every obstruction the Rethugs could throw in the President's path. So Dems, here's a suggestion: Remind the voters, show this graph, and ask them if they really, really want to go back.

(source: Washington Monthly)

The Rethugs' Mask Slips Again

How many times have we heard Congressional Rethugs talk about "job killing" actions of the Dems, and how they know how to create jobs? Well, apparently, the Rethugs like job creation. . .overseas. Senate Rethuglicans unanimously blocked a vote on a Dem bill to eliminate tax breaks for companies shipping jobs overseas, and to provide tax breaks for companies bringing jobs back to the U.S. That the U.S. Chamber of Commerce and National Association of Manufacturers backed the Rethug position tells you all you need to know about their priorities. It seems that when they talk about "job creation" they actually mean "wealth creation" for their top-earning supporters.

If this doesn't become an election issue, then the Dems should hang it up. It's a "twofer" for them: tax breaks for business and jobs at home. And again, the Rethugs have been exposed as a party that will, time and again, side with the multinational corporations and the investor class over the middle class.

The Good Old Days

It's become the norm to consider the Bushit years as an overall disaster for middle class Americans, and it was. Nobel Prize-winning economist Paul Krugman, writing in today's New York Times, has another piece of evidence to present: the net worth of the average American household is lower than it was in 2001. Debt rose as consumers assumed that their assets -- principally their houses and stocks -- would continue to increase. Not so, and Americans saved less of their incomes in the past 8 years that in preceding years, exacerbating an economy based on credit and inflated assets.

Small wonder that Dumbya's rating among Presidential historians places him just above Millard Fillmore, and such luminaries as Warren G. Harding and James Buchanan, at a comfy #36 of 42 previous presidents (Grover Cleveland having served before and after President Benjamin Harrison).

The Rethug Economic Royalists

An op/ed in today's WaPo by three stooges... er "scholars" at the far right American Enterprise Institute (Alan Vicard, Alex Brill, and Arthur Brooks) takes great issue with Obama's tax plan. Why? Well, because it doesn't "reduce the tax penalty on work and saving." Translation? The tax cuts for the wealthy will end! The "entrepreneurs" will have less incentive to earn and create jobs! There will be no Trickle Down!

This last bastion of the four- decade- old right-wing economic ass-hattery known as "Trickle Down economics" has been all but routed following the debacle of the last eight years (stagnant growth, except in the gap between the rich and the middle class) and the catastrophe of the past few months. But, just under this Trickle Down Triplets' op/ed is a partial rebuttal by Harold Meyerson, from which we would like to quote:

"...[T]he coming Republican calamity is a consequence of public anger at the economy that predominantly Republican perspectives and policies have shaped over the past four decades, in which the vast majority of Americans no longer share in the prosperity of good times and get clobbered when the economy turns bad."

Amen.

(Photo: Messrs. Viard, Brill and Brooks of the American Enterprise Institute)