[ˈɡasˌlīdiNG]
NOUN
the practice of psychologically manipulating someone into questioning their own sanity, memory, or powers of reasoning:
(a friend of mine wrote this——)
“in 2001, Krugman called George W Bush “Keynesian”, & then said “everybody knows Keynesian economics is dead & discredited”, then warned about deficits. He was partly right. Even CATO Institute supply side economist, Alan Reynolds called the Bush tax cuts “mostly demand-side revenue reductions that will cause unwanted & immoral deficits”...(paraphrase on both, but almost exact).
The thing about Krugman is that in 2009, after the Fed cut interest rates to zero percent in 2008——& even though Obama-Biden had promised to cut spending & raise taxes to balance the budget, Krugman came out of 2009 claiming Biden’s Keynesian “stimulus” was too small......ie creating shovel-ready jobs for illegal immigrant road crews.......as if a 1930s jobs program would work for 2010 when few Americans....especially not females.....did blue collar, manual labor. (the fact that Trump & his campaign staff could not trash Biden on his performance on jobs & deficits under Obama is an unforgiveable sin)
The price of gas & beef doubled after Biden-Obama 2009 stimulus ...producer price inflation spiked almost to 8% & producers could not pass the inflation along to consumers because the market would not bear it, so this inflation led to massive layoffs worse than under Bush in 2008 or 2002......and massive amount of business closings....which only made the problem of housing worse....as Obama threw all his tricks into putting Humpty Dumpty back together again....instead of letting home prices fall & make them more affordable, with banks not having to lend and risk as much. We never were on the verge of a 1930s Depression, because aggregate demand CANNOT crash like it did then because of unemployment insurance, welfare foodstamps, SS & Medicare & a much bigger public sector at all levels of government & because people don’t put all their money in banks anymore and when banks do fail, they don’t take everybody’s money with them, so they have nothing to live on.
Krugman was completely silent about Obama-Biden running up twice as much debt as Bush did.........in fact....as I already noted, Krugman said the Biden-Obama stimulus failed because it was not big enough.....even though it really failed because—combined with the Fed’s silly QE2 under Bush ‘s Fed chair Bernanke, it killed consumer confidence & demand....ie the demand side of the economy that Keynesian economics is all about. Supply side economics is about business investment & business spendingm competition and innovation in free markets with a strong, stable dollar.
When GOP got some power in Obama’s 2nd term & started pushing “austerity” and the Fed ended QE2, the press warned that everything would crash and we might be plunged into a Depression.....same as they believed would happen after WW2 when the troops came home, but it didn’t. (in fact, the GI bill & SS were created to get & keep people out of competing for jobs, because Democrats did not know how to create jobs).
as it turned out, the real recovery began when after QE2 was ended and austerity was implemented, the price of gas fell from $3.60 to about $2, even though unemployment rate was falling fast. This was the opposite of what happpend under Biden-Obama policy. When Obama took office, the price of gas had fallen with demand as the unemployment rate had risen to 7.5%, The price of gas that was $4 in 2008 (and which Bush foolishly blamed on India and China)....the price gas had fallen to $1.85 by Obama’s inauguration day.......leading lots of voters to believe that it fell because Bush was gone and Big OIl was now afraid of gouging.....but gas price falling by more than 50% going into 2009 gave Obama a tailwind & cheered consumer confidence and spending, which made the recession end by June 2009....earlier than was predicted would happened if there was no stimulus at all.
Because of the Fed and Obama stimulus, gas price was driven up to over $3.50 again, and the economy crashed for a 2nd time, which Dems and their fake news blamed on Bush and “it was worse than we thought”......but the fact that it was their fault......as gas prices and the cost of a Burger King Whopper both doubled and hit the people with the least wealth hardest. The unemployment rate which has stablized at 7.5% by the end of 2008 when short selling was ended, when bonds stopped being toxic because of mark to market accounting......banks had been recapitalized, etc......(note: over 90% of banks and mortage lenders owned NO toxic bonds or had any subprime mortgage exposure and easily could have well served a depressed housing market if price of homes was allowed to fall, reducing amount of money lent out and risks at higher interest rates without any bailouts or stimulous at all in 2008. Fiscal and monetary stimulus by the Fed and Pelosi, Schumer and Bush served only to kill BOTH the supply and demand side of the economy.,.. exactly opposite of intentions.....as consumner prices on Main street soared to save Wall Street friends and donors......and money fled out of stocks and into gold, oil futures and into foreign markets and currencies........which today’s strong dollar and Trump corporate tax cuts is preventing from happening)
Needless to say, Krugman is right like a stopped watch is right twice per day. He called the Reagan economy “smoke and mirrors....an inflationary bubble that burst when the Fed raised it funds rate”.....Fact is....gold fell from over $1,000 in the 1970s to $500 under Reagan, then to $300 an ounce under Bush by 1992. The price of gasoline was $1.11 when Reagan came into office and $1.04 when he left office. Greenspan came into power by Reagan and jumped the gun by raising his funds rate to 9.75%, when CPI inflation was just over 4%. Imagine if Powell by next summer had raised his funds rate to 9%!!! Does Krugman think the Bidenomics could work well with a 9% Fed funds rate? The fact about Reagan rarely understood is that his Social Security tax increase scheduled to kick in 1990 was meant to be a counter-cyclical tax increase meant to balance the budget and to PREVENT the Fed from hiking rates......and Greenspan’s unnecessary rate hike postponed the balanced budget into happening in Clinton’s 2nd term.....because Greenspan caused a Savings and Loan crisis and recession that nobody expected, because they were used to Paul Volcker at the Fed. Even when Volcker raised his funds rate to 19%, inflation was 13.5% at the time.....so Greenspan’s hike into 1990 was a lot harder in percentage terms and into a booming economy and was completely unnecessary. After Reagan, both Bush and Clinton were told that if they raised taxes to balance the budget, then the Fed would SLASH interest rates.....so the Fed double crossed 3 straught presidents and made GOP permanently afraid of any and all tax increases.......which Sean Hannity has nationalized and made a permanent GOP idea.....and which cost Trump re election and cost GOP the House and the Senate.”
The War on Inflation is not over until the National Debt per capita growth flattens.
We haven’t even seen the worst of it IMO.
Just wait until RENTS start catching up.
Inflation Rate under the 45th President.
2017 2.1
2018 2.4
2019 1.8
2020 1.2
Inflation Rate under the Potato Head Presidency.
2021 4.7
2022 8.0
2023 4.4(through 9 months)
Krudman is a very poor economist.
if you just ignore food, energy, housing, and used cars
~~~~~~~~~~~~~~~~~~~~~~~~~~~
What the hell else is there?
When long term interest begin to RISE as the Fed keeps hiking its overnight rate, that is NOT a sign that inflation is falling, When Greenspan was at the Fed at the end of the 1990s & he had his Funds rate over 6%, he called it a “condundrum” that long-term rates were falling,…..but that was when there was a budget surplus & inflation was FALLING. Long term rate now have risen to the point where the yield curve has flattened from steep inversion. Markets do NOT believe the battle over inflation is won.
The war on inflation is over,” he posted on X, attaching a chart showing the Consumer Price Index (CPI) dropped from 7% last summer to below 2% in September if you exclude those four items. “
What is the number when these 4 items are added in?
No bell in dat belfry, but more than a few bats.
At 5% inflation, prices will have doubled in 14 years (rule of 72). We’re already three years into that, and then some. Not a very good long-term outlook.
If we had eggs, we could have bacon and eggs - - if we had bacon...
“ignore food, energy, housing, and used cars”
Food? Let ‘em eat bugs.
Energy? Sooolar! Winnnd! Hot air of politicians!
Housing? Homeless is the new normal.
Used cars? I suppose there are some used EVs around. The ones with the windshield smashed in by the last owner. I wonder why they do that./s
Was he being sarcastic?