Obamanomics: Trillions for Nothing

Saturday, September 15, AD 2012

 

 

Another fine, and timely, econ 101 video from the Center for Freedom and Prosperity.  When future historians write the history of the Obama administration, and what a sad farce that tale will consist of, I think they will stand aghast at all the borrowed money poured out by the Federal government with virtually zero positive impact on the economy.  In regard to Keynsian economics, the Obama administration is proof that one of Karl Marx’s maxims has proven to be a largely accurate observation on human affairs:  Hegel remarks somewhere that all facts and personages of great importance in world history occur, as it were, twice. He forgot to add: the first time as tragedy, the second as farce.

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6 Responses to Obamanomics: Trillions for Nothing

  • Keynes v Hayek – What a brilliant piece of parody.
    Couldn’t help smiling about the Security guard at the door doubling as a proctocologist 🙂

    Listening to what Friedman said, its a pity Keynes didn’t live a little longer. In any event, people take what they want from those who propound theories and become famous, and use those pieces of the theory to suit their own ends, whether or not they fully understand them.
    Greetings, Mr. Obama.

  • Don the Kiwi:

    Greetings from occupied America.

    Re: proctology. I did my post-doctoral field work reading “vox nova” blog. Thank Heaven I don’t need to do it any longer.

    I read that late in his career, Keynes attended a conference of economics egg-heads. He said that he was the only one present that wasn’t a “Keynesian.”

    Keynes would have had Obama and progressives pegged: “How anybody, or any system, so dull and illogical could have exercised such influence over so many . . . ” will be a subject for future historians, or space aliens exploring the ruins of mankind.

  • There is one way federal spending can have stimulative effect on the economy and that is increasing defense spending. Before I go any further. I must issue the big fat disclaimer that I work for the DoD (Navy exactly) as a civlian employee.

    But the defense department is the only federal agency that creates meaningful private sector jobs. I mean the military doesn’t build its own tanks, planes or ships. Or even guns bullets, vests, or even uniforms. And we need a much bigger military, especially a bigger blue water Navy. Our enemies are on the move militarily, China is growing its blue water Navy while we are cutting ours to the bone. Russia is on the move and of course Iran is nuking up. Serving this need would provide a much needed boost to our economy, especially in areas where there is a concentration of military bases and where there are manufactuers of military equipment. There is actually some historical precedent for this: it was the WWII ramp up of military production that brought us out of the Depression, not FDR’s New Deal, which actually prolonged the Depression.

    Now, there would be some side effects to this. One, would be waste. After 28 years in the DoD employ, if you include my eight years of active duty in the Navy, I know a thing or two about waste in the defense department. After all, it is part of the Federal Government. The other is an increase of federal employees in the DoD. But the net benefit will be well worth it.

    Unfortunately. this is something even Paul Ryan doesn’t seem to understand. For him to talk about the need to cut defense spending in the same breath as entitlement reform during last year’s debt ceiling debate demonstrates this. The prospective 500 billion cut viz sequestration (thank you John Boehner and Barack Obama) in addition to the already draconian Obama cuts will not only have a chilling effect on security as well as our economy.

  • My father, who was a veteran of WWII and wisely frugal, often tried to explain ‘that is increasing defense spending’ because the ‘defense department is the only federal agency that creates meaningful private sector jobs.’ Honest work for honest pay. He was adamant that the business of government was to both improve the country’s travel ways for private economic pursuits and protect the country from waste and danger – and not its business to interfere in private lives. Everyone would have a chance to work and live because ‘money can’t grow on trees’.

    It is insane to give and lend bundles of nothing or borrow what can’t be repaid. Someone someday will not get what is coming to him and grow angry. The financial industry has jobs that are based on nothing real because there is no accounting for a government of broken or no budgets, insider personal gain/stealing, dishonesty, and so on. No concrete evidence or no policing. Look at some of the career politicians and their lifestyles – do they also need that paycheck ? If so much of our leaders’ time is spent campaigning for donations, then it proves they know the value of a dollar when it’s for personal gain.

    I agree that defense and interior are a place for job growth with substance.
    A minor example learned while working as auditor (bean counter) for an aerospace contractor:
    a widow wanted to stay home to raise her children so she fed and educated them by sewing plain bags for machined parts as an independent contractor. That enterprise amazed me.

    Old sound buildings are being closed just because the location and cost of rewiring and updating the facilities costs money. Instead, places with no character are built that cannot withstand time. Mall open and then close, while shops disappear.
    Trees planted along highways are being strangled and killed by vines that could easily be managed by workers. Schools – unspeakable waste. On it goes everywhere that has a skyrocketing cost.

    I can almost hear him as to the 2012 wreckage. His generation had kids who rebelled, took a left turn, are making laws and demanding to be tolerated – but can’t manage to do the same.

  • “Eat when you’re hungry.
    Drink when you’re dry.
    If the sky don’t fall in,
    You’ll live ’til you die.”

    From Zerohedge (warning: pervasive bearish sentiment) blog:

    “Marc Faber, . . . , remains very bullish on gold. In another excellent Bloomberg interview, Faber said that ‘the trend for gold prices will be steady but the trend for the dollar and other currencies will be down. So in other words gold in dollar terms will trend higher.’ ‘How high it will go, you will have to call Mr Bernanke and at the Fed there are other people who actually make Mr Bernanke look like a hawk and so they are going to print money.’ Faber is on record as to the importance of owning physical gold and he again warned about the importance of owning gold but not storing it in the U.S. ‘You ought to own some gold but don’t store it in the U.S., the Fed will take it away from you one day,’ Faber astutely noted. He said that Bernanke is a money printer and this could lead to massive inflation and the Dow Jones at 20,000, 50,000 or 10 million. Faber cheerily predicted that the ‘the Federal Reserve’s monetary policy will destroy the world’ and ‘eventually we will have a systemic crisis and everything will collapse.’”

    N.B. the prophesied confiscations. It would not be limited to gold. Your IRA and 401k are in their sights.

    Pray for the best. Prepare for the worst.

    Cheers!

Keynesian Twilight Zone

Monday, September 19, AD 2011

There are few things sadder than a one trick pony whose trick fails to work.  Obama, with a faith whose fervency cannot be doubted, believes with all his soul that vast government spending is the mechanism to lift the country out of this never ending bad slump.  That his policies have failed to do anything other than to increase our massive public debt, sways him not at all.  For a true ideologue, and that is what Obama clearly is, a collision between reality and  beliefs merely means that reality is wrong since the beliefs are beyond question.  Thus in economic policy this administration is one endless Groundhog Day where the nation is stuck in a loop of high unemployment, minimal economic growth and ever expanding public debt.

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15 Responses to Keynesian Twilight Zone

  • He makes Carter look good.

    Thomas B. Reed, “Every time he opens his mouth he subtracts from the sum of human knowledge.”

    “The Emperor Has No Clothes.”

    I know! I’m a racist.

  • That his policies have failed to do anything other than to increase our massive public debt,

    The last assessment I saw calculated the multiplier of the stimulus spending at 0.6, not at 0.0. (IIRC, there were economists who offered just that estimate going in). Arguably it was not worth the candle but not nothing.

  • At least one study Art asserts that the stimulus cost a net 595,000 jobs:

    http://canadafreepress.com/index.php/article/36584

    Much of the stimulus of course merely allowed the states to use federal money to pay for highway projects instead of state funds. Estimates of the cost of jobs “created or saved” by the stimulus range from 287,000 per job from detractors to a “mere” 100,000 per job by supporters. Blue smoke and mirrors is too kind a phrase for 787 billion dollars sent down a rat hole. Obama would have had more of an economic impact if he had just gone from town to town throwing $20,000 checks made payable to cash at random from the presidential limousine.

  • In fairness to the President, he seems to be channeling the Democratic Party’s cognoscenti in matters economic. The new line (propagated by Joseph Stiglitz) is that the stimulus was not large enough, we have a plentiful supply of useful public works, and that we are fools not to borrow at minimal interest rates (as if those rates were set in stone). Thomas Sowell posed the question some time back as to whether Dr. Stiglitz et al could state their propositions regarding stimulus in a manner that was potentially falsifiable. Morning’s Minion, take it away.

  • Arg, Matey!

    It likely isn’t Master Keynes’ fault.

    Nick Gillespie, “Whalen isn’t simply dumping on Keynesianism, he’s bent on pointing out that even its latter-day adherents are straying far from their master’s theory. And in this, he’s surely correct. As Allen Meltzer has argued, Keynes was against the very sort of large structural deficits that characterize contemporary federal budgets and policy, believing instead that deficits should be ‘temporary and self-liquidating.’ And Keynes believed that any sort of counter-cyclical spending by government should be directed toward increasing private investment, not simply spending current and future tax dollars on public works projects. Or, to put it another way: If the federal government had a strong track record of responsible spending, it would mean one thing if it went into hock for a short period of time to goose the economy (again, whether this would work is open to question). It means something totally different when a government that spent all of the 21st century piling on debt and new, long-term entitlement programs responds to an economic downturn first by creating yet another gargantuan entitlement (Obamacare) and taking on even more debt in the here-and-now.”

    Shiver me timbers! I doubt Master Keynes would call class war/demagoguery fiscal policy.

  • “There are few things sadder than a one trick pony whose trick fails to work. Obama, with a faith whose fervency cannot be doubted, believes with all his soul that vast government spending is the mechanism to lift the country out of this never ending bad slump.”

    Why do you hate Catholic Social Teaching?
    Love,
    Morning’s Minion

  • Catholic social teaching doesn’t say we should abdicate to Caesar what is our own God-given duty as Christians to do. It is NOT Caesar’s responsibility to feed the hungry, give drink to the thirsty, clothe the naked, care for the sick, etc. That’s our duty as the adopted children of the Great King, and every time we abdicate our responsibility and evade our accountability to keep the command that God gave us to love our neighbor as ourselves, then we sacrifice on the altar of political expediency our citizenship in the Kingdom of Heaven and the very power of God in our own lives for the temporal “graces” of a secular national socialist democracy and its Obamanation of Desolation. The lesson of Judas Iscariot is clear when he suggested that the proceeds from the oil with which Mary annointed Jesus’ feet could have been given to the poor. Judas said that not because he cared about the poor but because he was a thief. That’s exactly what Scripture says in John 12. Government is no different. And by the way, we shouldn’t be seeking the bread that perishes as that crowd did in John 6, but the eternal Bread of Life. Jesus didn’t feed that crowd a second time. He noted exactly what they wanted: another free handout. TANSTAAFL – There Aint No Such Thing As A Free Lunch – not then and not now.

  • The following is a Walter Williams column from 1998. Diverting money from the free productive private economy into the wasteful and destructive government command economy is disastrous.

    New study shows economic growth is inversely proportional to government spending

    20 MAY 98 – James Gwartney and Randall Holcombe, economics professors at Florida State University, and Robert Lawson, an economics professor at Capital University in Columbus, Ohio, have just completed a report for Congress’ Joint Economic Committee. The title is The Size and Function of Government and Economic Growth.

    The report points out, as just about every American knows, the expansion of the U.S. economy has now moved into its eighth year. It’s been 15 years since a major recession. That’s the good news.

    Despite this performance, the real rate of economic growth during the 1990s is less than half that achieved in the 1960s. In fact, our average rate of growth has fallen during each of the last three decades.

    Greater economic stability, but less rapid growth, has also been the pattern of other developed nations. Gwartney, Holcombe and Lawson, using data from 60 nations, produce convincing evidence that there’s a strong negative relationship between the size of government, increases in government expenditures and economic growth.

    In the case of our country, the authors conclude: If government expenditures, as a percentage of Gross Domestic Product (GDP), had remained at their 1960 level, the 1996 GDP would have been 9.16 trillion instead of 7.64 trillion. That translates into $23,440 for the average family of four.

    The authors also compared developed countries with the smallest increases in the size of government between 1960 and 1996 to those with the largest increases and looked at their growth rates. In 1960, government spending as a percentage of GDP in the United States, Iceland, Ireland, United Kingdom and New Zealand averaged 28.9 percent. The growth rate for those countries in 1960 averaged 4.3 percent. In 1996, government spending in those countries rose, averaging 39.1 percent, and their growth rates fell, averaging 2.7 percent.

    Developed nations with the largest increases in government size between 1960 and 1996 were Portugal, Spain, Greece, Finland, Sweden and Denmark. In 1960, those governments spent an average of 28.1 percent of their GDP, and their growth rates averaged 6.4 percent. In 1996, government spending averaged 54.5 percent of GDP, and their growth rates fell to an average of 1.2 percent. From these statistical estimates, Gwartney, Holcombe and Lawson show that for each 10 percent increase in government spending, there’s a 1 percent decrease in the rate of growth.

    The authors are not anarchists; they acknowledge an important critical role for government, namely that of providing the legal and physical infrastructure for the operation of the market and a limited set of public goods to provide a framework conducive to economic growth.

    As governments move beyond these core functions, however, they adversely affect economic growth through the disincentive effects of taxation, diminishing returns as government takes on activities for which it is ill-suited and government interference with the wealth-creation process. Governments aren’t as effective as markets in adjusting to changing circumstances and discovering innovative production methods.

    The Gwartney, Holcombe and Lawson study understates government size because it doesn’t take into account its regulatory burden. But even with this minor shortcoming, will the study’s persuasive argument and evidence lead Congress to reduce government size? I doubt it.

    The reason is that it is impossible for any of us to know or appreciate how much wealthier we would have been had government expenditures remained where they were when John Kennedy was president. In other words, how can a family of four know that it is $23,440 poorer because of Washington and its state and local governments?

  • “Why do you hate Catholic Social Teaching?”

    Do you equate CST with the progressive, Demorat class war? If so, I love more prosperity but love less economic destitution and financial repression.

    It’s not yer mother’s CST, minion matey.

  • It is time we all just understood the stark fact that Obama doesn’t know any better. No, he’s not very bright, doesn’t spend time thinking things over and wouldn’t know an idea if one fell on him. We elected the “Un-named Democrat” who always does so well in polling. We put upon Obama whatever wonderful things we wished to find and we then voted for our dream…but the dream was carried by a man who’s only claim to being worthy is to have two wonderful daughters…which is no small thing, but hardly something that fits a man for the Presidency.

  • Keynes was against the very sort of large structural deficits that characterize contemporary federal budgets and policy, believing instead that deficits should be ‘temporary and self-liquidating.’ And Keynes believed that any sort of counter-cyclical spending by government should be directed toward increasing private investment, not simply spending current and future tax dollars on public works projects.

    The Roosevelt Administration’s largest deficit prior to the War amounted to about 4% of gross domestic product. The president and Congress turned in two balanced budgets during the period running from 1933 to 1941.

  • Friends, Americans and undocumented immigrants, I come to bury Obama not to libel him. The failures men fall into . . .

  • So ten years ago we passed tax cuts lowering the federal tax take to the lowest it has been since before WWII, the result was the worst 10 years of employment growth in the same time frame. The response to the fact that the current President’s policies have not quickly enough repaired the damage of the last President’s policies is to ask for deeper tax cuts. And the Democrats are the one trick ponies.

    To hold true to Keynes’ teachings, President Clinton raised taxes and produced a surplus while during the good times. The president who followed him cut taxes and turned that into a deficit. Tracking from the end of WWII our total debt as a percentage of GDP continually dropped until1981 when we cut taxes on the promise that it would increase revenue. Revenue did not increase until the massive tax increases of the mid 1980’s took effect. Nowhere in historical economic data is there evidence to support tax cutting to produce long term jobs. There is plenty evidence that the government can spend money (even deficit spending) and create infastructure that leads to long term job creation. Two prime examples are the interstate highway system and the internet. This isthe type of spending originally proposed, unfortunately, it was changed to allow it to get through congress.

  • “So ten years ago we passed tax cuts lowering the federal tax take to the lowest it has been since before WWII, the result was the worst 10 years of employment growth in the same time frame. ”

    Get behind me, Satan.

  • Ziggy zoggy!
    Ziggy zoggy!
    Oy! Oy! Oy!

    Look it up. Terrorist attacks 9/11/2001. Recession. Global war on terror. Average unemployment rate during Bush presidency 5.2% (Eurozone average 8.2%). Also, tax reductions were passed to Buffett”s secretary: 50% pay no federal income tax. Stop me!

    Bush’s tax cuts were passed based on the same conservative, private sector growth concepts as another great American President: JFK.

    Employers are not hiring because taxes aren’t high enough . . . Actually, it’s Obamacare.

    You cannot reason with a person that will not agree that 2 + 2 = 4.

Vatican Bank Chief Condemns Keynesianism

Monday, January 24, AD 2011

Current fiscal and monetary policies in the United States and Europe risk increasing government control over national economies, resulting in weakened political strength throughout “the whole of the western world,” the Vatican’s top banking expert said.

Writing in the Jan. 14 edition of the Vatican newspaper, L’Osservatore Romano, Tedeschi warned of the growing influence of “Keynesian” economic theory on both sides of the Atlantic.

Governments on both sides of the Atlantic, he said, are committed to Keynes’ policy of increasing public debt to sustain levels of economic production, consumption, and employment.

He said artificially low interest rates are another key to the strategy of increasing spending and discouraging saving. With no incentive to keep money in the bank, those who would have otherwise been savers are pushed to spend.

“Zero interest rates factually equal a de facto transfer of wealth from he who was a virtuous saver (although not for Keynes) to he who has become virtuously (for Keynes) indebted,” he said. “Practically, it’s about a hidden tax on poor savers, a tax transferred to the wealthy, (that is), over-indebted states, business people and bankers.

More. That sound you hear is Morning’s Minion’s head exploding.

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5 Responses to Vatican Bank Chief Condemns Keynesianism

  • That sound you hear is Morning’s Minion’s head exploding.

    LOL. Maybe unsurprisingly that’s the first thought I had when I read the title of this post.

  • “If QEII is successful increases in the money supply will be matched by increases in output (as millions of currently unemployed workers find jobs), so the purchasing power of savings need not be degraded. And if you are one of the millions of unemployed, you will in fact be much much better off.”

    This seems quite problematic to me. Isn’t it somewhat “perfect world” analysis? “If all the money trickles down to the right people, who spend it on the right things, productivity will up, people will be employed” and so on. However, looking at it simplistically, it seems to me that employment is created by others’ need (or, more darkly, desire). If I want a wagon wheel, and I do not have one, I can either make it, or buy it. Therefore, we need wheelwrights (or car makers). If the needs do not exist, trickling down funds will create jobs temporarily, but demand may not necessarily rise.

    Daniel Goldman noted in First Things, here: http://www.firstthings.com/article/2009/05/demographics–depression-1243457089, that the recession we are experiencing is directly related to downfall in demand, especially for housing:

    “Housing prices are collapsing in part because single-person households are replacing families with children. The Virginia Tech economist Arthur C. Nelson has noted that households with children would fall from half to a quarter of all households by 2025. The demand of Americans will then be urban apartments for empty nesters. Demand for large-lot single family homes, Nelson calculated, will slump from 56 million today to 34 million in 2025–a reduction of 40 percent. There never will be a housing price recovery in many parts of the country. Huge tracts will become uninhabited except by vandals and rodents.”

    I would argue that as demand for housing falls and has fallen, so will demand for other material assets. Current fiscal stimulus (soon to be paying for growth in China’s military), combined with our individualistic and obsessive focus on no children / 1 child families, will sink us.

  • Jonathan,

    1. That is David Goldman, not Daniel Goldman. He is untrustworthy.

    2. Housing prices per the Case-Shiller index are almost precisely what they were in February 2009.

    3. That index has been criticised as exaggerating volatility in housing markets due to its national indices being derived from some of the most overheated markets.

    4. The 30% drop in the Case-Shiller 20-city index during the period running from August 2006 to February 2009 had nothing to do with demographic factors. Family structure was not revolutionized in that 30 month period.

The Super Secret, Mystical Recession Cure

Tuesday, November 2, AD 2010

For some reason, I found myself reading through Paul Krugman’s recent NY Times material. Perhaps it was a desire for a little mental vaunting, what with the direction the elections seem to be taking, and if so I should have come away quite satisfied as Mr. Krugman is in full Chicken Little mode. A GOP takeover of congress will be a disaster, and we should all be very afraid. Stupid people are allowing their emotions to run away with them and will destroy the world economy through getting all moralistic about debt. And of course, the reason why the entire world doesn’t see things Krugman’s way is because macroeconomics is too hard for them to understand.

Well, I’m certainly prepared to admit that Krugman’s expertise in macroeconomics is greater than my own — and I’ll even stretch and say that my understanding probably goes farther than that of the average bear.

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15 Responses to The Super Secret, Mystical Recession Cure

  • Here is what is so very difficult for this idiot (moi) to understand: why a man with a PhD that knows there is to know about economics is not a multi-billionaire?

    Posted at Instapundit: “They’ve spent the past 18 months calling you names and questioning your sanity and patriotism. But today you get to vote, and that’s all that matters.”

  • I don’t think a formerly unemployed person who gets a new government job is going to sit on his money because of some mystical economic anxiety that wouldn’t exist if it were a private sector job. A well-designed stimulus works in theory and in reality.

    After two years the program is a success, and so the wind turbine program ends. Now what happens to those workers and the capital investments in those factories? How easily are they turned to other work, and how long are they unemployed in the interim? Do we simply end up with another economic slowdown as a result of massive unemployment in the windfarm industry?

    Same could be said of the public works projects of the Great Depression. If it’s successful, the economy would pick up and there would be more demand for unsubsidized jobs.

    The way I see it, the problem with stimulus is almost entirely about your second point. The government is unlikely to create many jobs that don’t replace private sector jobs. What percentage of the unemployed can weatherize homes and make wind turbines?

    Ideally, we would’ve had a high skill jobs program in place so the unemployed can tutor kids or patrol streets. But there’s no chance of that happening now.

  • I didn’t read your article, DC, because then I’d have to read excerpts of Krugman, and that’s not going to happen. But I hope your article was good anyway.

  • I certainly don’t think that a formerly unemployed person who gets a government job won’t spend more money than they did while unemployed — but in order for the theory to work they need to not only spend more than while unemployed, but that spending needs to make the private sectore become so encouraged that they decide good times are here again, ramp up capacity, hire a bunch of people, etc. That seems pretty hard to do.

    To be honest, I would think that in our modern economy the best approach (though it doesn’t have the virtue of allowing congress to spend like a drunken sailor on all their favorite programs) would be to stick with a stimulus which consists of payroll tax relief for businesses and extended (and perhaps more generous) unemployment benefits for those actually out of work. There are those who argue that even this slows the reallocation of resources, but I’d think it’s an acceptable risk because of the human benefits.

  • Extended more generous unemployment benefits = Government jobs without the benefits of work

  • I thought you made some really good points. Particularly, that the spending needs to be focused much different in this economy than in the 1930s and that people are scared to spend b/c they’re worried about the bill they’re going to be hit with in the future. I know I am expecting taxes to be have to be raised sometime soon, so I’d be preparing if I have any money to save.

  • Paul Krugman is, to put it as nicely as possible, an idiot. Keynesian economics is a failure.

    The private sector employs the most people. The private sector is the engine of creation and ideas. Government is not. Stimulation of the private sector through lower personal income tax rates, lower corporate income tax rates, and lower taxes on investment and capital gains is what successfully stimulates an economy into recovery and increased employment. The subsequent economic growth results in increased tax revenues.

    Krugman is far too stupid to understand this. So are the Democrats and far too many Republicans.

  • Keynes was particularly annoyed that in a depression people tend to save and not spend. Guess why?

    Mr. Krugman is a product of the academy; his ideas are academic.

    Try Belloc’s ECONOMICS FOR HELEN, as a simple but accurate explanation of the public economy. As J.K. Galbraith noted, economics is not that difficult to understand – unless you burden it with unnecessary and superficial mathematics.

  • Associating current Keynesian economics with JM Keynes does the man a disservice. He was a pragmatic man who espoused government spending when it could have helped. I doubt that he would have endorsed the the policies of his noisier followers.

  • “Extended more generous unemployment benefits = Government jobs without the benefits of work”

    The difference is that unemployment pays people less than they would make working to look for a job — a government job turns someone from a job seeker into a job holder. Thus, leaving someone looking for work doesn’t involve a top down decision on specialization, it leaves emergent order to work out what sort of jobs people should train for and take.

  • RR is kidding, right?

    About the “Extended more generous unemployment benefits = Government jobs without the benefits of work?”

    That’s a joke, right?

  • Oh, sorry, he said, “…without the BENEFITS of work.”

    Perhaps it’s because it’s 1 AM, but something made me think he was saying something like, “…without the DRAWBACKS of work.”

    Never mind.

    (Of course, it isn’t just “without the benefits of work”; it’s “with the additional drawbacks of a marginal increase in the incentive for joblessness.”)

  • Te Deum laudamas . . .

  • What was Reagan’s definition of an economist? Someone who tells you why something that works in practice won’t work in theory?

  • I don’t think it’s economics as a whole that’s the problem — Krugman just happens to be one of those people who, in regard to politics, believes that if you fail at something it’s because you didn’t do more of what he wanted.

German Economist: America Is Becoming Too European

Friday, September 3, AD 2010

I found this piece from the English-language edition of Der Spiegel by University of Hamburg economics professor Thomas Straughaar very interest, in part because it reads very much as written by someone who is looking at American history and culture from the outside, yet trying to understand it for what it is. A key passage from the second page:

This raises a crucial question: Is the US economy perhaps suffering less from an economic downturn and more from a serious structural problem? It seems plausible that the American economy has lost its belief in American principles. People no longer have confidence in the self-healing forces of the private sector, and the reliance on self-help and self-regulation to solve problems no longer exists.

The opposite strategy, one that seeks to treat the American patient with more government, is risky — because it does not fit in with America’s image of itself.

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4 Responses to German Economist: America Is Becoming Too European

  • I’d say the author has a better understanding of this country than many Americans do.

    The author fears that if America adopts European ways, “the American age will have really come to an end.”

    But the good professor fears this because he, unlike large numbers of leftists both here and in Europe, actually likes America. He sees the “The American Age” as a positive. The end of the American Age is precisely the result the left is after and when you look at it from that perspective, Obama’s not doing a bad job.

    America is evil in leftist eyes because – oh, heck, all you have to do is read Vox Nova and you’ll have the reasons. The secular left would add a few other reasons to loathe the US – far too many “Christianist” yokels who have silly qualms about abortion and gay marriage. These people never seem to ask themselves if the American Era might be preferable to a Chinese Era, or an era in which there is no superpower at all, just an ineffectual UN in thrall to states like North Korea and Iran and state-funded terrorist groups.

    Unless we get a grip on ourselves and steer back from the cliff’s edge, we may indeed find ourselves living out one of those 2 scenarios. And my bet is that many lives – not just American lives by any means – would once again become nasty, brutish and short, and the world would find itself yearning for the good old days of the American era.

    Another thing: I have noticed that Euro-admiring lefties are pretty good at ignoring aspects of Europe they disagree with. They’ll tout Europe’s smaller cars (it would be pretty difficult to maneuver a Explorer through narrow medieval streets) and railway system, but not, say, France’s nuclear energy program. Or they’ll praise more relaxed attitudes about adulterous politicians or public nudity, but when you mention that no European country allows partial birth abortions – well, that’s one example of American “exceptionalism” they don’t mind at all.

  • B…b…b….but Paul Krugman says …

  • [email protected]!

  • I’m always weary of these cultural arguments. How’s homogeneous state-friendly Greece doing?