Comments on: It’s The Economy!

By: Badtux

Badtux — Thu, 04 Nov 2010 15:25:30 +0000

Austerians think hoarding is just fine and dandy, Bryan, even though it sort of defeats the whole purpose of money, which is to be a more portable way of trading turnips for other stuff you need (turnips make a lousy currency, ever tried carrying turnips around in your pockets? No? Don’t bother ;). I think the Austerians should be called the Smaugians. All they want to do is lie around in a cavern full of gold and treasure and gloat, “my pretties, oh my pretties!” For some reason they think storing pieces of toilet paper with pictures of dead people on it is useful for some purpose other than eventually trading that toilet paper for things you can, like, actually eat or wear or sleep in. Smaug’s treasures at least were pretty, and, in some cases (the mithril mail), actually useful… but the Austerians? Bah.

By: Bryan

Bryan — Thu, 04 Nov 2010 03:38:50 +0000

Yeah, Badtux, has been pointing out that Germany’s “austerity” was a reduction in the increase, not an actual decrease of spending. People also miss the reality that German auto workers make twice what US autoworkers make. That’s why some of the German car companies have been shifting production for the North American market to the US and Canada.

Austerity will make things worse, and the debt harder to pay off. If you don’t have some inflation, people won’t spend money, they’ll hoard it. Someone has to spend or the economy stalls out.

By: Kryten42

Kryten42 — Thu, 04 Nov 2010 02:29:07 +0000

Heh! Speaking about Germany’s suposed austerity drive (well, someone mentioned it in one of these threads… often I think!) 😉 😛

Anyway… Krugman points out:
The Strange Death of Fiscal Policy

One clear result of the midterms is that we won’t have anything like a further round of stimulus. And this, in turn, means that the narrative all the Very Serious People will tell is that fiscal policy was tried, it failed, and that’s that.

But the real facts don’t at all support the conventional wisdom.

Actually, let me focus on an international comparison. You often hear the US experience contrasted with Germany: America, we’re told, went for Keynesian policies, while Germany chose austerity, and Germany did better.

But as far as GDP is concerned, Germany did not, in fact, do better
…
Yes, Germany did better on employment — but this reflects policies that American conservatives surely don’t support, including employment subsidies, strong unions, and rules making it difficult to fire workers.

And what may be even more surprising: if we look at actual government purchases of goods and services, as opposed to transfer payments (many of them just payments from the federal government to states), Germany was more Keynesian than the United States
…
So, it’s an amazing thing: Obama and company have managed to convince people that big government failed, without actually delivering big government.

Update: Just to be clear, I’m not saying that the Germans were big Keynesians; the point is that neither of us were.

By: Bryan

Bryan — Tue, 02 Nov 2010 05:15:35 +0000

As you found out I was already dealing with the “dean of conventional wisdom” and his ignorance of the real world.

By: Kryten42

Kryten42 — Tue, 02 Nov 2010 04:43:40 +0000

Yeah. Of course, if you listen to the morons like Broder, it's because the USA isn;t fighting enough war's, damn it! All Obama has to do (in Broder's tiny mind) is go to war with Iran, and all will be well! Broder: ‘As We Accelerate Preparations For War [With Iran], The Economy Will Improve’ I think Cole get's it mostly right (thogh even he doesn't seem to realise how bad a war with Iran would be): On How War with Iran might Destroy the United States Though I do strongly disagree with Cole's opening paragraph! Broder is a complete right-wing neo-con tool! And if I was Cole... I wouldn't be holding my breath for a retraction or any *thoughtful* corrections from Broder!