The Krugman Speaks

I like Paul Krugman's stuff because it all seems to be totally reality-based.  He's a "leftie" (whatever that means), but his ideology doesn't get in his way.  And since he's engaged in a little thing called "science", it's generally a good thing to let the evidence lead you to a rational conclusion rather than trying to make the numbers fit a particular expectation of how you think the world is supposed to work.

Here's Krugman's whole post from yesterday's NYT:

Transatlantic Divergence

Deadline pressure, so not much blogging this weekend. But pursuing the theme that America is doing the least worst among major economies, here’s a chart I find illuminating:

In the early stages of the crisis, unemployment rose more rapidly in the US than in Europe. This mainly reflected differences in institutions: it’s much easier to fire people in America. From some point in 2010 onward, however, the US situation has gradually improved; initially some of the drop in unemployment was basically people leaving the labor force, but more recently there have been solid though modest gains in the ratio of employment to the relevant population (you have to adjust for aging).

Meanwhile, Europe has gotten much worse; now formally in recession, but the truth is that it has been going downhill all along.

Why the divergence? The obvious answer is that the austerity stuff broke out in 2010, and the austerians took over policy much more completely in Europe than in the United States.

That last paragraph is the main point.  And I think he's trying to tell us that if we give in to the siren song of Austerity, we just make it harder to get ourselves out of the hole we're in.  Also, I've heard others warning us against the effects of Shock Doctrine style economic policy.

We'll have to see, but it seems like Republican politics is not changing much.  I see the Benghazi crap as their attempt to manufacture a 2nd-term scandal for Obama, and now, with all this bogus posturing about a Fiscal Cliff (more like a short ramp IMHO) and talk of some Grand Bargain, they're trying to hang a major rap on him for a double-dip recession and whatever shitty thing that happens as a result of the sudden drop in Demand that happens when you make big cuts in federal spending.  And then, of course, as the 2010 mid-terms roll around, they make all the noise they can possibly make about how all the bad stuff happened on Obama's watch and we have to admit it's all about Obama's failed policy etc etc.