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Paul Krugman is going to be bald if he keeps scratching his head over the conventional wisdom that keeps showing up on the economy. His years as a teacher drive him to explain why people are wrong, and to wonder why they don’t seem to understand the basics.

For example, he locates a graph that clearly indicates that the recent changes in the dollar are not that drastic and certainly nothing to worry about. The same graph shows that the Hedgemony had the dollar falling every year of their reign, and no one said anything.

But, then, they never do when there’s a Republican in White House. The deficit that is such a crisis now was run up under Reagan and the Bushes, but it didn’t become a problem until a Democrat won the White House. Hell, Alan Greenspan started complaining because Clinton was running a surplus at the end, and paying down the national debt.

The National Debt Clock was shut down during the Clinton years, but the Shrubbery gets in and not only did it have to be turned back on, they had to add another digit.

The basic problem with the economy is exactly what Nancy Pelosi says, unemployment. Until people get back to work, they can’t pay taxes and they can’t buy anything. The deficit and the economy are impossible to deal with when you have double digit unemployment.

The employment boost that usually comes at the start of school didn’t happen this year. There won’t be any employment boost for the Holidays because sales are expected to be worse than last year. The effects of the first stimulus bill are running out, and the job picture didn’t improve – it was just a little less bad than it might have been.

This will have no effect on conventional wisdom, which will demand the White House do things that are guaranteed to make things worse. This is what happens whenever a Democrat is in the White House, so it should have been expected. Republicans always reduce revenues by cutting taxes on people who can most afford it and increase spending on things we don’t need, but it is the Democrats who are required to repair the damage.

† – It’s OK If You’re A Republican


1 Badtux { 11.26.09 at 12:11 am }

I was at a Sam’s Club in Louisiana earlier today. The place was empty. As in, echos empty. There were no (zero) lines at the checkout counters.

There will be no holiday bounce this year.

– Badtux the Economics Penguin
.-= last blog ..Bizarro world World Nut Daily =-.

2 Bryan { 11.26.09 at 12:23 am }

One of my neighbors works at WalMart [part-time, of course] and she’s worried about getting hours, as she has been below 20 per week for several months. I will do a parking lot scan this Saturday, as I have to go by there, but I don’t have much hope of a crowd. My feeling is that it will be worse than last year.