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Truth on the Market:

Lots of good stuff over at Truth on the Market blog, especially about the "stimulus package" and its disingenuous advocates (one of whose initials is P.K.).

EricPWJohnson (mail):
Paul Krugman - just another liar? - just another Partisan Hack? - disgraced Nobel Laureate?

Bush Spending
2.6.2009 8:55am
Allan (mail):
Interesting. But, Mr. Bernstein, I and a lot of people have a tendency not to believe anyone who 1) supported Bush's proposals and 2) calls Obama supporters disingenuous.

We just got done with four years of Bush and his policies. Look where we are. Something did not work, and, based upon the last election, the majority of us believed it was the conservative (or what passed for conservative under Bush) policies that were to blame.

So, I, and I believe the majority of right thinking americans (tongue firmly planted in cheek) find no reason to believe criticisms in Obama from the right.

That is not to say that the criticisms are not justified. It is to say that the critics have little or no credibility right now.
2.6.2009 8:58am
Sarcastro (www):
I always assume that people who disagree with me are stupid, or evil or both.

It's amazing and sad how many posts on this blog are by total liars who I will never listen to until they stop lying and start agreeing with me.
2.6.2009 9:05am
DavidBernstein (mail):
Interesting. But, Mr. Bernstein, I and a lot of people have a tendency not to believe anyone who 1) supported Bush's proposals and 2) calls Obama supporters disingenuous.


(1) I certainly didn't support "Bush proposals" writ large, and I doubt the bloggers at Truth on the Market did, either.

(2) Do you understand the difference between "calling Obama supporters disingenuous" and stating that particular advocates of the Obama stimulus package are disingenuous?
2.6.2009 9:09am
DavidBernstein (mail):
Eric, it's pretty amusing that Krugman doesn't think that a 50% increase in discretionary spending from 300 billion to 450 billion in seven years counts as a big increase in spending. A 150 billion here, 150 billion there, soon you're talking real money!
2.6.2009 9:14am
Calderon:
Sarcastro said I always assume that people who disagree with me are stupid, or evil or both.

Yeah, whenever I read Krugman's columns that attitude of his comes through very clearly. Or were you talking about someone else? (and yes, I'm being sarcastic)
2.6.2009 9:58am
U.Va. Grad:
Peter Krieser, star of Six Feet Under and lately of Dirty Sexy Money?
2.6.2009 10:15am
U.Va. Grad:
I can't even get my own jokes right. Peter Krause.
2.6.2009 10:15am
jukeboxgrad's favorite YouTube video:
So, I, and I believe the majority of right thinking americans (tongue firmly planted in cheek) find no reason to believe criticisms in Obama from the right.

"Shut up," he explained.

That is not to say that the criticisms are not justified. It is to say that the critics have little or no credibility right now.

I agree with you those people who advocated that Bush spend boatloads of money on projects of dubious merit for the purpose of strengthening the U.S. economy have little or no credibility. I agree: Nancy Pelosi, Harry Reid, Joe Biden, Paul Krugman, and Barack Obama have very little credibility right now.
2.6.2009 10:23am
jukeboxgrad's favorite YouTube video:
We just got done with four years of Bush and his policies. Look where we are. Something did not work, and, based upon the last election, the majority of us believed it was the conservative (or what passed for conservative under Bush) policies that were to blame.

If you want to argue that Bush's tax and/or spending policies are to blame for our current economic woes, fine. If you're going to do that, I would appreciate an explanation of how Obama's tax/spending policies differ in a meaningful way from Bush's.

Last time I looked, Obama was leaving the Bush tax cuts in place, at least for now. A persuasive argument can be made that Bush threw too much money at wasteful projects without regard to whether the majority of the country wanted them, but so far that appears to be B.O.'s M.O. If Bush's porked-up spending sprees were bad, why is Obama's superior?
2.6.2009 10:31am
glangston (mail):
This was a pretty good visual aid. I would say it could even enlighten down to the 6th Grade or so.
2.6.2009 10:39am
AndyinNc:
Awesome, another group of conservative lawyers who are experts on the economy!
2.6.2009 10:48am
Tony Tutins (mail):
The trouble is, that no matter what one's politics, you can find an economic theory to support your prejudices, with a Nobel Prize winner to back you up. Translated to the biological realm, Lysenko would be honored along with Darwin. The Dismal Science is a Carollian Caucus-Race:

However, when they had been running half an hour or so, and were quite dry again, the Dodo suddenly called out `The race is over!' and they all crowded round it, panting, and asking, `But who has won?'

This question the Dodo could not answer without a great deal of thought, and it sat for a long time with one finger pressed upon its forehead (the position in which you usually see Shakespeare, in the pictures of him), while the rest waited in silence. At last the Dodo said, `EVERYBODY has won, and all must have prizes.'
2.6.2009 10:51am
geoff manne (mail):
Thanks for the link, David. And I can't, off hand, think of any Bush policies I supported, although there was/were probably one or two.

On this, AndyinNc, I do profess incredible ignorance. In fact, my complaints about Krugman and his ilk are rooted essentially in the fact that they are not humble enough. The economy is massive, government is predictably and congenitally (in the non-literal sense) constrained in its ability to promote social welfare, and the problems here are irretrievably complex. Which is why I would just once like to see the folks promoting the most incredible increase in the size and scope of our government and our debt ever acknowledge uncertainty and the possible costs of their actions.
2.6.2009 11:25am
AndyinNc:

Which is why I would just once like to see the folks promoting the most incredible increase in the size and scope of our government and our debt ever acknowledge uncertainty and the possible costs of their actions.

I'm sure you were much more concerned about the cost of war in Iraq and the Bush tax cuts, because each of those alone will end up running more than twice the cost of this stimulus, massively increasing our debt.

Unfortunately, few Republicans were concerned about costs or deficits for the past 8 years, so it's plainly obvious that they're being disingenuous about their concerns now.
2.6.2009 11:34am
BGates:
Andy, how expert do we have to be to say spending $1,000,000,000,000 nobody has on stuff nobody wants is a bad idea?
2.6.2009 11:35am
BGates:
the Bush tax cuts...will end up running more than twice the cost of this stimulus
How much more expert would you have to be to recognize the difference between a reduction in revenue and a cost? That's leaving aside the fact that the effect of the tax rate cuts is described as reducing government revenue by its opponents, while the bloated stimulus is acknowledged to increase government cost by $1,000,000,000,000 by its supporters.
2.6.2009 11:39am
Tony Tutins (mail):

how expert do we have to be to say spending $1,000,000,000,000 nobody has on stuff nobody wants is a bad idea?

True, it doesn't go far enough. As has been pointed out many times, the Great Depression did not end until World War II removed surplus workers from the market, while the government spent huge sums on men and materiel.
2.6.2009 11:42am
geoff manne (mail):
I guess Andy just wants to be contentious. I'm not a Republican and even if I were I wouldn't presume to speak for other Republicans (I'm pretty sure there are disagreements within the party about things like this, but maybe I'm wrong). Anyway, I don't see how it supports uninformed and hasty support for the current detritus on the table to point out that it comes close on the heels of other costly pieces of detritus coming out of government. To me, this just gives further pause, and support for the notion that government has in the past and will in the future tend to get it wrong. [But it's OBAMA!!!! Did you hear me?? OBAMA!!!! -ed. Um, yeah. I forgot. Government is evil only when run by George Bush. Democrats, on the other hand--they do the Lord's work.]
2.6.2009 11:59am
AndyinNc:

Andy, how expert do we have to be to say spending $1,000,000,000,000 nobody has on stuff nobody wants is a bad idea?

How expert do you have to be to say that preemptively attacking a country that hasn't attacked us, based on sketchy, massaged intelligence is a bad idea?

See, the problem for the right is that they did so much stupid stuff for the past 8 years that pretty much anything they say or do now will be instantly recognizable as hypocrisy.

As for the stimulus, I agree, we could easily cut it down to $500 billion by getting rid of all the dumb things that the Republicans want included.
2.6.2009 12:00pm
Sarcastro (www):
All the jobs the government ever created were stupid, dumb jobs we don't want anyway! Public good? More like a good that hasn't yet been released to rome free in the private sector!

Now Tax Cuts, on the other hand, are the bomb. Imagine how bad our economy would be if Bush hadn't cut them!
2.6.2009 12:18pm
Thorley Winston (mail) (www):


From the article David linked to:


Except there is a strong economic case--not mere political cliches, whether Paul agrees with it or not-- that suggests that tax cuts might work better (and more quickly). There is evidence (in the very text of the bill) that this has turned into an embarrassing and ineffectual wish list of Democratic shibboleths instead of a "targeted, temporary and timely" stimulus package. There is evidence that the long-term (and we're not talking that long-term--I plan to be alive in 2019, you?) effect of the current plan is net negative. But never mind all of that--it's just Republicans playing politics (this part is true of the elected officials, I assume, but Krugman would thusly tar the ideas of Barro, Mankiw, Murphy, Lucas, Becker, Cochrane, Zingales, etc., etc.) and Democrats trying to save the world (this part is patently false, of course).



That's a pretty good summary of why I'm opposed to the Porkulus Bill that's being debated in Congress and pushed by the administration. I don't think that "stimulus" bills work as a general rule and that they usually end up doing more harm than good due to the timing of when the effects are felt and this bill seems worse in terms of its size. If we had to have a "stimulus" bill (and I don't favor one), I probably would prefer one that was composed mostly of tax relief. That the advocates of the bill are taking advantage of the crisis to push through their wish list of spending programs makes it more offensive still but even if Obama had offered a clean bill like he initially promised, I would still oppose it on the macroeconomic grounds stated.
2.6.2009 12:34pm
A. Zarkov (mail):
Manne says (on the Truth on the Market blog):
Krugman's latest opinion piece is here. Like me, Paul is beating the same drum over and over (oh, and by the way, like at DeLong's place, my comments mysteriously don't show up on his blog.
I didn't realize that Krugman does that too. DeLong will delete (with no comment) any comment he thinks people should not read. Even short, polite on-topic comments. You can see a comment appear, then a little while later, it will disappear down the DeLong memory. Sometimes you see people commenting on a non-existing comment leading to confusion. This policy does not speak well either of Krugman or DeLong. What are they afraid of?
2.6.2009 12:35pm
Sarcastro (www):
I also like to listen to Rush Limbaugh. His moniker "Porkulus" adds hilarious generalization to the debate! See, if you define pork broadly enough, everything but tax-cuts is pork!

The fact that the majority part is doing what they think is right to fix this crisis makes them all liars pushing this through whatever they want! It's tax relief or pork, there is nothing else!

I have also found evidence that only tax cuts work. No, you cannot see the evidence.
2.6.2009 12:42pm
Tolley Jenkins (mail):
AndyinNC. Stop with the Iraq War crap. It's a straw man and simply irrelevant. Your assumption that opposition to the stimulus only comes from down-the-line Republicans is overly simplistic.

Saying that "Bush did it" is no excuse. Believe it or not, a lot of those who oppose the stimulus also oppose a great number of the things Bush did.
2.6.2009 12:43pm
Raghav (mail) (www):
Whatever the merits of the specific stimulus bill on the table, DeLong and Krugman are right to be shocked that the likes of John Cochrane seem to implicitly believe that the velocity of money is typically constant and therefore crowding out is one-for-one.
2.6.2009 12:48pm
George Smith:
You're right, Allan, something didn't work. Fannie and Freddie didn't work. Dodd and Frank were their protectors and enablers. Reforms and closer supervision were proposed. They were blocked. And here we are. Lotta things might be Bush's fault, but this ain't one of 'em. A stimulus is supposed to be about enabling businesses (mostly small ones) to continue to produce goods ans services and to create jobs. Instead we have a liberal wet dream of a porkulus bill funding every pet project and interest group. ACORN fer Gaia's sake? This will do nothing except to expand the size of government and its control over the economy, and two, or more likely four, years from now, we will be right where we are now. But, then that is precisely what the Dems want.
2.6.2009 12:48pm
Sarcastro (www):

Fannie and Freddie didn't work

And giving homes to poor black folks is the only financial problem we have!

ACORN never made any jobs. All they do is voter fraud! They've never help with health care or affordable housing or poor people!
2.6.2009 12:59pm
George Smith:
I'm considering the source.
2.6.2009 1:50pm
Steve H:
Andy, how expert do we have to be to say spending $1,000,000,000,000 nobody has aren't currently covered by tax revenues after the Bush tax cuts and the Iraq War on stuff nobody wants will accomplish a lot for the country and the American people is a bad idea?
2.6.2009 1:54pm
Steve H:
(Sorry, hit "Post Comment" instead of "Preview." And now it's too late.)
2.6.2009 1:55pm
RPT (mail):
"Sarcastro:

I also like to listen to Rush Limbaugh. His moniker "Porkulus" adds hilarious generalization to the debate! See, if you define pork broadly enough, everything but tax-cuts is pork!"

Thanks for the derivation of the "Porkulus" term. RL is on the roly-poly side, and he is certainly a big fan of stimulus pills.
2.6.2009 2:01pm
Fedya (www):
UVA Grad:

Actually, the PK stands for Prin Kerr, a typo for Orin Kerr. ;-)
2.6.2009 2:19pm
Ryan Waxx (mail):
Iraq War, yadda yadda yadda...



Now now children, you need to share nicely.

Republicans got their turn to defend the country from terrorists, now its the democrats turn to pay off their political allies.

Its only fair!
2.6.2009 2:49pm
David M. Nieporent (www):
Eric, it's pretty amusing that Krugman doesn't think that a 50% increase in discretionary spending from 300 billion to 450 billion in seven years counts as a big increase in spending. A 150 billion here, 150 billion there, soon you're talking real money!
Many liberals act as if massive increases in government are a good thing. Krugman has this weird habit, even for a liberal, of acting as if massive increases in government aren't actually massive at all. A few years ago, during discussion of Medicare reform, Krugman acted as if permanently bumping up federal spending up by 10% of GDP was really no big deal.
2.6.2009 2:53pm
Sarcastro (www):
And they say the every part of the New Deal still lives with us today! Just like with this stimulus, we'll just keep building the same bridge foreveeer! Oooooh! Scaaaary!

Government growth never dies! Conservative hate will keep it alive in all our hearts and comments pages!
2.6.2009 3:02pm
JoeSixpack (mail):
Even The One has freely admitted that raising capital gains tax rates does not lead to an increase in tax revenue (he just wants to do it anyway, out of "fairness"), which would logically also mean that reducing capital gains tax rates does not decrease government revenue or increase the deficit. I am therefore impressed with the bravery shown by Sarcastro and his ilk in disagreeing so freely with the Dear Leader.
2.6.2009 4:03pm
Steve H:

Even The One has freely admitted that raising capital gains tax rates does not lead to an increase in tax revenue ...


Citation? (To Obama's actual words, not someone mischaracterizing his answer in the April debate.)
2.6.2009 4:51pm
byomtov (mail):
Eric, it's pretty amusing that Krugman doesn't think that a 50% increase in discretionary spending from 300 billion to 450 billion in seven years counts as a big increase in spending. A 150 billion here, 150 billion there, soon you're talking real money!

Over the seven year period from Jan, 2001 to Jan, 2008, inflation was about 20%. So adjusted for inflation the dollar amount you refer to grew by about 25%, not 50%. That turns out to be a touch over 3% a year. Also, don't forget that some spending is a function of population, which grew about 9% during that period.
2.6.2009 7:04pm
David Welker (www):

Lots of good stuff over at Truth on the Market blog, especially about the "stimulus package" and its disingenuous advocates (one of whose initials is P.K.).


Okay, I will bite. What argument did you find over at Truth on the Market that Paul Krugman is disingenuous? I couldn't figure out what it might be, except the supposed tension in his views on World War II?

Here is what Krugman had to say about Barro's WSJ article.

Krugman pretty much nailed Barro against the wall intellectually, and Barro is not happy.

There is no contradiction here:
The start of World War II is stimulative. It leads to the full employment of idle resources. Government expenditures at this time do not lead to crowding out, because there are a lot of idle resources.

(2) The continuation of World War II beyond a certain point is not stimulative. You have two reasons to think that the multiplier on government spending will be lower as the war goes on. (1)Rationing prevents private spending from expressing itself. (2) We were already at full employment. Increased government expenditures thus crowd out private expenditures.

Paul Krugman is not advocating fiscal stimulus because the economy is running and full capacity and he loves inflation. He is advocating fiscal stimulus because monetary policy has run out room to be effective and because we are at much less than full employment. To hammer that point in, note the 598,000 jobs that have been lost in January alone.

Basically, you think that Paul Krugman's arguments on World War II are contradictory merely shows your misunderstanding of those arguments, not that Paul Krugman is disingenuous.

Maybe you should be more cautious before engaging in immature name-calling? That you disagree with Paul Krugman is not really a good reason to embarrass yourself by acting in a childish manner. If you have other reasons besides the arguments associated with WWII to try to support your misplaced ad hominem attack against Paul Krugman and other advocates of fiscal stimulus, I would love to hear it.

By the way, if your intent is to say that particular advocates of stimulus are disingenuous as opposed to saying that people who advocate stimulus in general are disingenuous, you could be a whole lot more clear.
2.6.2009 9:55pm
David Warner:
Zark,

"What are they afraid of?"

It isn't fear.
2.7.2009 1:42pm
David M. Nieporent (www):
Okay, I will bite. What argument did you find over at Truth on the Market that Paul Krugman is disingenuous? I couldn't figure out what it might be,
Look harder.
except the supposed tension in his views on World War II?
Nope; that's not it. I'll give you a hint: it's his insistence that there is no case to be made by people who disagree with him, that anybody -- no matter how well credentialed -- who takes a different view is engaging in politics, while he's above it all and doing pure economics.
2.7.2009 3:26pm

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