The Tea Party won!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:the best stimulus would have been a program to buy 2,500,000 foreclosed homes. say the average price was $200,000 - the federal govt could have put down 20%, so is that $100B, and had the FED finance the other 80% through mortgages to the states and use the houses for public housing at low cost rent. would have immediately solved the housing problem and gotten a great deal on public housing for state and local govts.

Why not just give a job to every unemployed person, at the median family income, for years? That's how much money we're talking about.

no. buying homes at depressed prices at historically low rates would bolster the low income housing stock for the next 50 years and in one stroke solve the housing bust. $100B is much less than the worthless stimulus. If that # is too high, then cut it in half or by 2/3rds. $33B still gets you 700K homes...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:the best stimulus would have been a program to buy 2,500,000 foreclosed homes. say the average price was $200,000 - the federal govt could have put down 20%, so is that $100B, and had the FED finance the other 80% through mortgages to the states and use the houses for public housing at low cost rent. would have immediately solved the housing problem and gotten a great deal on public housing for state and local govts.

Why not just give a job to every unemployed person, at the median family income, for years? That's how much money we're talking about.

no. buying homes at depressed prices at historically low rates would bolster the low income housing stock for the next 50 years and in one stroke solve the housing bust. $100B is much less than the worthless stimulus. If that # is too high, then cut it in half or by 2/3rds. $33B still gets you 700K homes...

Sorry - I meant that that was how much was in the stimulus, not that it was how much you were talking about.

I'd rather give people jobs and maybe accomplish some great things with the work than further prop up and inflate the housing market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:First a dot-com bubble, then a real estate bubble....now it's a big government bubble with even more leverage than the others. The result is totally predictable.

You mean like the Great Depression of the 1950s?

Actually the 1950s weren't all that great economically. Part of why Truman left office with Bushian approval ratings.

[Anonymous]

BTW, wasn't 40% of the "worthless stimulus" in the form of tax cuts? Or do tax cuts only count when it's high-end marginal rates, dividends, cap gains, etc.?

[Anonymous]

Anonymous wrote:Actually the 1950s weren't all that great economically. Part of why Truman left office with Bushian approval ratings.

The point is that there wasn't a collapse like we've had.

[Anonymous]

The interesting thing about the debate between the anti-Keynesians and the Keynesians is that we've already put the dueling hypotheses to the test. From conserviative pundit David Frum:

Imagine, if you will, someone who read only the Wall Street Journal editorial page between 2000 and 2011, and someone in the same period who read only the collected columns of Paul Krugman. Which reader would have been better informed about the realities of the current economic crisis? The answer, I think, should give us pause. Can it be that our enemies were right?

Krugman in the NYT:

The knee-jerk response of commenters is “But the Obama stimulus failed, deficits, yada yada. Also, Krugman has a beard.” Or something like that. But let’s talk for a second about Frum’s proposition, focusing just on the past few years.

It’s kind of annoying when people claim that I said the stimulus would work; how much noisier could I have been in warning both that it was grossly inadequate, and that by claiming that a far-too-small stimulus was just right, Obama would discredit the whole idea?

Of course, the WSJ also said that the stimulus wouldn’t work. The difference was in how it was supposed to fail.

The WSJ view was that federal borrowing would crowd out private spending by driving interest rates sky-high, that the bond vigilantes would destroy the economy. Note that when the linked editorial was published, the 10-year rate was at 3.7%, with the Journal in effect predicting that it would go much higher.

My view was that government borrowing in a liquidity trap does not drive up rates, and indeed that rates would stay low as long as the economy stayed depressed.

How it turned out.

That’s a pretty clear test; among other things, you would have lost a lot of money if you believed the WSJ view.

Inflation is another issue; the WSJ kept telling readers that a big inflationary surge was coming. Commodity prices have muddied this issue to some extent, but even so actual developments on the inflation front have been a lot closer to what Keynesians were predicting than to the right-wing line.

Of course, I would much rather have actually had adequate policy than be vindicated by the form of our economic failure.

The amazing thing is that we no longer have any media or social structure that holds those in power accountable for results. It's like we wake up every morning, and every action that was made before has been totally wiped away. The folks who were right never get any traction; the folks who were tragically wrong get a megaphone and a free hand.

[Anonymous]

Anonymous wrote:The amazing thing is that we no longer have any media or social structure that holds those in power accountable for results. It's like we wake up every morning, and every action that was made before has been totally wiped away. The folks who were right never get any traction; the folks who were tragically wrong get a megaphone and a free hand.

The media (I'm not counting Faux, since they operate under their own separate system) hate it when someone is righter than they were. They hate correcting themselves, so they won't correct anyone else who espoused the popular story. And since the right always creates the popular story, the media don't call them out.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The amazing thing is that we no longer have any media or social structure that holds those in power accountable for results. It's like we wake up every morning, and every action that was made before has been totally wiped away. The folks who were right never get any traction; the folks who were tragically wrong get a megaphone and a free hand.

The media (I'm not counting Faux, since they operate under their own separate system) hate it when someone is righter than they were. They hate correcting themselves, so they won't correct anyone else who espoused the popular story. And since the right always creates the popular story, the media don't call them out.

Excellent point. It's just so frustrating since a) we're never able to adjust to counter our mistakes since we always misattribute the causes of our problems, leading to even worse policy; and b) yahoos like PP continue to misapply "knowledge" that they don't seem to understand very well.

For example, PP probably heard some propaganda point about "government spending crowding out private investment" and like the proverbial "hedgehog" he clings to that as the one thing he knows. Unfortunately, it's not applicable here. Why do the pundits and politicians keep repeating it after its been debunked? Well, their policy goal is to reduce the tax burden on extremely wealthy people, and to keep inflation as close to zero as possible. The way you do that is to convince non-wealthy people that radically reducing government spending and cutting taxes on the extremely wealthy will benefit them--after all (all evidence to the contrary) they create jobs!!!

The perils of inductive reasoning...

[Anonymous]

The worst case of this was with the Bush wars. Kucinich opposed them from go, so the media wrote him off as a silly hippie. When they realized he was right, they still wrote him off.

I know that when my kids "learn" about the Bush wars in school, they'll be told that they just kinda happened, and if any mistake is acknowledged, it will be strongly suggested that everyone was confused, that there was no real opposition.

If haven't read Lies My Teacher Told Me, you should.

[Anonymous]

Anonymous wrote:The worst case of this was with the Bush wars. Kucinich opposed them from go, so the media wrote him off as a silly hippie. When they realized he was right, they still wrote him off.

I know that when my kids "learn" about the Bush wars in school, they'll be told that they just kinda happened, and if any mistake is acknowledged, it will be strongly suggested that everyone was confused, that there was no real opposition.

If haven't read Lies My Teacher Told Me, you should.

There was an awesome short bit that Atrios posted on this a few days ago. Let me see if I can find it. Oh, yeah. Here we go:

Others have pointed this out, but it is similar to the time leading up to the Iraq war, when dirty hippies would point out obviously stupid and false things only to be mocked by the Very Serious People who were busy applying duct tape to their houses.

[Anonymous]

One last quote for the geniuses pushing austerity:

Macroeconomic Folly: All of a sudden, people seem to have noticed that policy is moving in exactly the wrong direction. We’re getting headlines like this: "Debt Deal Puts U.S. on Austerity Path as Economy Falters."

I’ll need to write up my thoughts here at greater length, but let’s just say for now that what we’ve witnessed pretty much throughout the western world is a kind of inverse miracle of intellectual failure. Given a crisis that should have been relatively easy to solve — and, more than that, a crisis that anyone who knew macroeconomics 101 should have been well-prepared to deal with — what we actually got was an obsession with problems we didn’t have. We’ve obsessed over the deficit in the face of near-record low interest rates, obsessed over inflation in the face of stagnant wages, and counted on the confidence fairy to make job-destroying policies somehow job-creating.

It’s a disaster – and maybe not only an economic disaster.

Awesome summary here: http://delong.typepad.com/sdj/2011/08/macroeconomic-folly-nytimescom.html

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The amazing thing is that we no longer have any media or social structure that holds those in power accountable for results. It's like we wake up every morning, and every action that was made before has been totally wiped away. The folks who were right never get any traction; the folks who were tragically wrong get a megaphone and a free hand.

The media (I'm not counting Faux, since they operate under their own separate system) hate it when someone is righter than they were. They hate correcting themselves, so they won't correct anyone else who espoused the popular story. And since the right always creates the popular story, the media don't call them out.

Excellent point. It's just so frustrating since a) we're never able to adjust to counter our mistakes since we always misattribute the causes of our problems, leading to even worse policy; and b) yahoos like PP continue to misapply "knowledge" that they don't seem to understand very well.

For example, PP probably heard some propaganda point about "government spending crowding out private investment" and like the proverbial "hedgehog" he clings to that as the one thing he knows. Unfortunately, it's not applicable here. Why do the pundits and politicians keep repeating it after its been debunked? Well, their policy goal is to reduce the tax burden on extremely wealthy people, and to keep inflation as close to zero as possible. The way you do that is to convince non-wealthy people that radically reducing government spending and cutting taxes on the extremely wealthy will benefit them--after all (all evidence to the contrary) they create jobs!!!

The perils of inductive reasoning...

When you hear a bunch of people repeating a specific phrase like "crowding out" over and over, it is inevitably part of a conservative propaganda campaign. A bunch of hacks come up with a message of the day or week or month, then they get conservative pundits to start using it, and finally it is everywhere. It appears to be true because everyone is talking about it.

[Anonymous]

Anonymous wrote:Democrats lost!! No tax increases on America. Now that hard working president can go back to doing what he loves best, playing golf and posing shirtless while 10% of our country looks for work. That stimulus didn't do squat. We want our country back.

And thanks to you it is worth 15% less today than it was a few weeks ago. #Winning!

[Anonymous]

Anonymous wrote:One last quote for the geniuses pushing austerity:

Macroeconomic Folly: All of a sudden, people seem to have noticed that policy is moving in exactly the wrong direction. We’re getting headlines like this: "Debt Deal Puts U.S. on Austerity Path as Economy Falters."

I’ll need to write up my thoughts here at greater length, but let’s just say for now that what we’ve witnessed pretty much throughout the western world is a kind of inverse miracle of intellectual failure. Given a crisis that should have been relatively easy to solve — and, more than that, a crisis that anyone who knew macroeconomics 101 should have been well-prepared to deal with — what we actually got was an obsession with problems we didn’t have. We’ve obsessed over the deficit in the face of near-record low interest rates, obsessed over inflation in the face of stagnant wages, and counted on the confidence fairy to make job-destroying policies somehow job-creating.

It’s a disaster – and maybe not only an economic disaster.

Awesome summary here: http://delong.typepad.com/sdj/2011/08/macroeconomic-folly-nytimescom.html

Krugman has been so discredited how can he even show his face in public anymore? Hack.

[takoma]

Anonymous wrote:Krugman has been so discredited how can he even show his face in public anymore? Hack.

By having everything he predicted come true? Obama compromised with the GOP and ignored Krugman, so now GOPologists blame Krugman for the results. Which, by the way, were less disastrous than what would likely have occurred had they gotten all they fought for.