Krugman Trashes Austerity’s Phony Morality Economics

DAVOS/SWITZERLAND, 24JAN08 - Jean-Claude Trich...

DAVOS/SWITZERLAND, 24JAN08 – Jean-Claude Trichet, President, European Central Bank, Frankfurt, captured during the session ‘Systemic Financial Risk’ at the Annual Meeting 2008 of the World Economic Forum in Davos, Switzerland, January 24, 2008. (Photo credit: Wikipedia)

Apropos of a current theme of this blog, that the powerful Austrian school of economics that has supplanted Keynesianism as the go-to ideology of our government and, more and more, both political parties, is rooted in the same Nietzschean stew of pro-winner, anti-loser sentiment that appealed to the Nazis, Paul Krugman has a piece in the current New York Review of Books that devastates the “austerian” contention that Keynesianism feeds the Beast, while austerity corrects naughty economic behavior. His main support for his argument is the recent discovery of severe flaws in the methodology of two studies most often cited by austerians, one by Harvard profs Carmen Reinhart and Kenneth Rogoff and the other by Italy’s Alberto Alesina and Silvia Ardagna, purporting to show that government spending that exceeds 90% of GDP in the wake of a depression or financial meltdown is catastrophic for the economy in question.

David Stockman’s The Great Deformation … [is] an immensely long rant against excesses of various kinds, all of which, in Stockman’s vision, have culminated in our present crisis. History, to Stockman’s eyes, is a series of “sprees”: a “spree of unsustainable borrowing,” a “spree of interest rate repression,” a “spree of destructive financial engineering,” and, again and again, a “money-printing spree.” For in Stockman’s world, all economic evil stems from the original sin of leaving the gold standard. Any prosperity we may have thought we had since 1971, when Nixon abandoned the last link to gold, or maybe even since 1933, when FDR took us off gold for the first time, was an illusion doomed to end in tears. And of course, any policies aimed at alleviating the current slump will just make things worse.

In itself, Stockman’s book isn’t important. Aside from a few swipes at Republicans, it consists basically of standard goldbug bombast. But the attention the book has garnered, the ways it has struck a chord with many people, including even some liberals, suggest just how strong remains the urge to see economics as a morality play, three generations after Keynes tried to show us that it is nothing of the kind. Continue reading

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AIPAC and the Evils of Republicratism

Gung ho at AIPAC

Gung ho at AIPAC

MJ Rosenberg makes these observations on his eponymous blog:

It’s hard to watch the AIPAC conference for more than a few minutes at a time. For me, the worst part is the pandering (and lying) by Democratic politicians eager to raise money for their next campaign.

So far, Joe Biden has been the worst. He is heavily funded by the Adler family of Miami Beach (he even brought President Obama to their home for a fundraiser), one of the big AIPAC families. Here is Biden talking about how the head of the Adler klan and another AIPAC mogul gave him his “formal education” on the Middle East. (Not to mention all that money.

And, of course, Biden (like John Kerry) knows better than his AIPAC speeches indicate. I have talked to him about Israel and Palestine.He can name the top Palestinian leaders in Fatah and Hamas and tell you the differences between their respective positions. He believes Israel needs to end the occupation and talk to Hamas. He would not dare say it publicly, although he has said  it so often privately that it is amazing the media never reports it.

But Biden does what he thinks he has to because, for politicians like him (that is, pretty much all politicians), nothing is more important than keeping donors happy. Call him a hypocrite but he cries all the way to the bank.

The Republicans are different. Supporting the occupation and threatening war with Iran come naturally to them. They don’t need lobby money for their campaigns and they don’t get Jewish votes anyway.  (This is not to say that they don’t like Sheldon Adelson’s money, just that as the pro-business party, they don’t need it). They support Netanyahu because they believe that the west needs to crush the Muslim world. They do not feign Islamophobia. It’s them.

Do we not hear echoes of  Yeats in this accurate picture of today’s politics?: “The best lack all conviction, while the worst/ Are full of passionate intensity.” Continue reading

Another blast from the past

“[M]odern democracy is at the service of global capitalism. We will not be voting our way toward a more humanist redistribution of resources, least of all if the market does not require it. Similarly, when we voted for Obama in 2008, we did not really vote for what we had the audacity to hope we were voting for, nor for change we really could believe in. We were voting, simply, for the choice the Democratic Party, through its intricate, arduous and obscenely expensive vetting process, presented to Democrats and Americans as the titular head of its party. We were not voting for any ideas other than the usual handful that get talked about endlessly in media that also owe their existence and wealth to global capitalism. We get what global capitalism pays for and wants and needs in that office to further its aims and agenda (of enriching the rich and distributing resources toward that end).”

Tragic Farce

I call myself a Democrat because that’s how I’ve been registered all of my voting life. In fact, the older I get, the more disconnected I feel from that label. I don’t want to register as an independent because, Bernie Sanders notwithstanding, I can’t get over the prejudice that American independents are all right-wing at heart. Was it George Wallace’s American Independent Party that instilled this in me? Who knows? It’s beginning to feel, however, that the correct radical stance in this disintegrating context is to not register or vote at all. A vote begins to feel like acquiescence to the corruption.

Did Democrats or any other Obama supporter vote for the fiasco of the last month, culminating in the supreme surrender by our audacious leader last night to the anti-democrats of the Republican Party, bypassing the leaders of his own party to give the (fictional) partisanship-loathing centrists of the…

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