Paul Krugman | How Biden Blew It on the Debt Ceiling – The New York Times

By Paul Krugman

Opinion Columnist

“As soon as Republicans took control of the House last November, it was obvious that they would try to take the economy hostage by refusing to raise the federal debt limit. After all, that’s what they did in 2011 — and hard as it may be to believe, the Tea Party Republicans were sober and sane compared to the MAGA crew. So it was also obvious that the Biden administration needed a strategy to head off the looming crisis.

More and more, however, it looks as if there never was a strategy beyond wishful thinking. I hope that I’m wrong about this — that President Biden will, at the last minute, unveil an effective counter to G.O.P. blackmail. He may even be forced to do so, as I’ll explain in a bit. But right now I have a sick feeling about all of this. What were they thinking? How can they have been caught so off-guard by something that everyone who’s paying attention saw coming?

For those somehow new to this, the United States has a weird and dysfunctional system in which Congress enacts legislation that determines federal spending and revenue, but then, if this legislation leads to a budget deficit, must vote a second time to authorize borrowing to cover the deficit. If even one house of Congress refuses to raise the debt limit, the U.S. government will go into default, with possibly catastrophic financial and economic effects.

This weird aspect of budgeting allows a party that is sufficiently ruthless, sufficiently indifferent to the havoc it might wreak, to attempt to impose through extortion policies it would never be able to enact through the normal legislative process.”

David Linday:  I fear Krugman has panicked prematurely. I am very sympathetic to his reaction, but I like the commenters who remind us of little faith, that Biden isn’t as soft as likes to sound.  Here is an excellent comment I approve:

John Brews

Santa Fe, NMMay 16

Well, Paul is upset. But here is my idea of Biden’s plan. Speculation of course. Biden wants Americans in general to understand the GOP is ready to ruin the Country for no reason. No reason. So Biden is letting the clock run and letting McCarthy look more and more like a flailing victim of the GOP nut cases. When the situation is clear to most of us, Biden will state that there really is no alternative to the 14th Amendment solution. He must simply pay the bills and ignore McCarthy, because McCarthy cannot do a thing to compromise. Biden will have to make a speech clearly describing why this action is needed. He might also address the possibility of the Supreme Court being drawn into the fray. But probably that issue should be left to later. If the Supreme Court is enticed to rule that the 14th Amendment action is “unconstitutional” or some other objection is raised, Biden has one option, perhaps not the only one, but one option is open: ignore the Court. The Court and the GOP might fume, but the Court has no power to compel compliance, and Congress is incapacitated, and can do nothing either. So Biden will be free to pay the bills, and the naysayers can go take a walk.

3 Replies190 Recommended

Paul Krugman | Liz Truss’s Tax Cuts Won’t Help Britain’s Economy – The New York Times

By Paul Krugman

Opinion Columnist

“Britain is in a very difficult economic position. The British economy, like the U.S. economy, seems to be seriously overheated, with substantial amounts of inflation driven by high domestic demand. Unlike America, it is also facing the full force of Europe’s energy crisis, driven by the efforts of President Vladimir Putin of Russia to use a shut off of natural gas to bully the West into abandoning Ukraine.

So many of us expected Britain’s economy to go through a rough patch in the months, or maybe even years, ahead. What few foresaw, as far as I can tell, was a policy zombie apocalypse.”

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Farhad Manjoo | Riding a Bike in America Should Not Be This Dangerous – The New York Times

By Farhad Manjoo     Opinion Columnist

“MOUNTAIN VIEW, Calif. — At about 8:15 a.m. on a Thursday morning in March, Andre Retana, a 13-year-old riding his bike to middle school, pulled up to a red light at the intersection of El Camino Real and Grant Road in this Silicon Valley suburb.

Near two major state highways, the El Camino and Grant crossing is one of the area’s busiest and most dangerous sections of roadway. The intersection lacks dedicated bike lanes and other features to protect bicyclists and pedestrians from fast-moving motor vehicle traffic. Instead the intersection is an asphalt-and-concrete love letter to cars. Gas stations occupy two corners; an America’s Tire store sits on a third, a BMW dealership on the fourth. Its traffic design, too, prioritizes the efficient movement of cars and trucks over other uses of the road. To keep traffic humming along, motorists on all of its corners are allowed to turn right on red lights.

As Andre approached the intersection’s southeast corner, he rode alongside a construction truck waiting at the light to turn right. A police investigation would later determine that the truck had come to a complete stop at the red light. Police say the truck driver, high up in the cab, had never seen Andre, who was in the truck’s blind spot.”

Paul Krugman | America’s Very Peculiar Economic Funk – The New York Times

https://www.nytimes.com/2022/03/03/opinion/biden-economy-inflation-jobs.html

By Paul Krugman

“I’ve been on a few trips recently and took the opportunity to do a bit of naked-eye economic assessment. As I’m sure many people can confirm, planes are flying full, while shops and restaurants are jammed. It definitely looks like a booming economy out there.

That’s also what the numbers say. In his State of the Union address, President Biden — while acknowledging that inflation has eroded wage gains — pointed to the 6.5 million jobs added last year, “more jobs created in one year than ever before in the history of America.” This claim was entirely correct.

Yet the public doesn’t believe it. According to a new survey by Navigator Research, only 19 percent of Americans believe that the U.S. economy is experiencing more job growth than usual, while 35 percent say that it is experiencing more job losses than usual.”

“. . .  And while I do not come here to bash the news media, I do feel that we’re missing a big part of the story if we take negative public views of the economy at face value without pointing out that they’re at odds not just with official statistics but also with self-reported experience. And we should try to understand where that disconnect is coming from.”  -30-

David Lindsay Jr.

Hamden, CT | NYT comment:

Good question, thank you Paul Krugman. I like the comment that it is partly the poison of GOP and Fox and company negative propaganda. I think it is also the fault of the news. I don’t remember ever seeing once, a giant headline at the NYT this year, about how good the economy or hiring really was last year. I learned about it from quiet articles, as if it were not a big deal.

I propose a third cause, climate change, extinction rates, and overpopulation anxiety. Informed people are deeply depressed at regular intervals if they are paying attention. This funk, which is real, also possibly permeates the larger society. They see the devastation around the world in the news, and my guess is that it effects their general outlook more than many economist and social commentators think.

Traditional economics hasn’t caught up to the realty of over population and limited planetary resources. While the economic slump due to Covid caused headlines. Underneath those headlines, one read, our social carbon footprint declined dramatically. The vaccines save millions of lives. Even that good news has a dark component. 8 billion humans are the cause of both the climate crisis and the great sixth extinction of species, which is accelerating. I predict that even people who don’t understand or follow this science, who don’t look up, are at some level disturbed by the stories referring to it.

David blogs at InconvenientNews.net

Paul Krugman | Trump’s Trade War With China Was a Failure – The New York Times

https://www.nytimes.com/2022/02/15/opinion/china-trade-war-trump.html

“Do you remember Donald Trump’s trade war? You can be forgiven for having forgotten all about it, given everything that has happened since; it sounds trivial compared with his effort to stay in power by overturning a fair election. Even in terms of policy while in office, it was far less important than his pandemic denial, and probably less important than his tax cuts or his sabotage of health care.

But the trade war was uniquely Trumpian. His other policy actions were standard-issue Republicanism, but the rest of his party didn’t share his obsession with trade deficits; indeed, he probably wouldn’t have been able to do much on that front except for the fact that U.S. law gives presidents enormous discretion when setting tariffs. Only Trump really considered trade deficits an important issue; and he, er, trumpeted what he called a “historic trade deal” under which China agreed to buy an additional $200 billion in U.S. goods and services by the end of 2021.

Now, Chad Bown of the Peterson Institute for International Economics, who has been the go-to source on the trade war from the beginning, has a final assessment of that deal. And it turns out to have been a complete flop: “China bought none of the additional $200 billion of exports Trump’s deal had promised.”

So Trump was a chump; the Chinese took him to the cleaners. But if you want to do a post-mortem on the trade war, Trump’s haplessness in dealing with foreign leaders is actually a minor part of the story. Far more important is the fact that the shocks we’ve been experiencing since the pandemic began make the Trumpian view of trade look even more economically foolish than it did when he took office.”

Jamelle Bouie | Why We Are Not Facing the Prospect of a Second Civil War – The New York Times

https://www.nytimes.com/2022/02/15/opinion/why-we-are-not-facing-the-prospect-of-a-second-civil-war.html

“. . . .  Plantation agriculture rapidly exhausted the soil. The sectional balance of Congress aside, planters needed new land to grow the cotton that secured their influence on the national (and international) stage. As Karp explains, “Slaveholders in the 1850s seldom passed up an opportunity to sketch the inexorable syllogism of King Cotton: the American South produced nearly all the world’s usable raw cotton; this cotton fueled the industrial development of the North Atlantic; therefore, the advanced economies of France, the northern United States, and Great Britain were ruled, in effect, by southern planters.” The backlash to slavery — the effort to restrain its growth and contain its spread — was an existential threat to the Southern elite.

It was the realization of that threat with the election of Abraham Lincoln — whose Republican Party was founded to stop the spread of slavery and who inherited a federal state with the power to do so — that pushed the Southern elite to gamble its future on secession. They would leave the union and attempt to forge a slave empire on their own.”

David Lindsay: This is a great essay, and it had me struggling with the hope it is right. The following comment helped articulate some of my reservations.

haigh

NY4h ago

The majority of southerners did not benefit from slavery and even the plantation owners could have paid salaries and possibly made higher profits, as F.L. Olmstead believed he had proven after taking a year off from his practice to study the issue. He was shocked that friends who owned plantations were not interested in his findings- he decided the reason was that it was absolute power and not profit that motivated devotion to slavery. However, civil wars, like traffic accidents, are caused by different things in different countries in different eras, and they are often the result of ethnic hatred, often hatred exploited by politicians seeking power. Ignorance and resentment are key and the GOP donor elite has spent the last 50 years recruiting voters who embrace ignorance and resentment. These mostly boil down to very superstitious religious constructs and resentment, even hatred, of the professional class and “non-whites”. These people, seemingly allergic to exercising deductive reasoning, have never in our history been so concentrated in a single party, and like drunk passengers on a boat, if they all congregate on one side, the boat may capsize. This has led to a largely dysfunctional government, but however well armed many members of the GOP base may be, our military would have to split up against itself to create a civil war. More violent civil unrest is the more likely outcome to our current situation.

4 Replies200 Recommended

Paul Krugman | Behind Kentucky’s Tornado Recovery Plan – The New York Times

By Paul Krugman

Opinion Columnist

“On Friday, a devastating swarm of tornadoes swept through Kentucky. The state’s leading figures appealed for federal aid, which was promptly granted — and rightly so. Helping people and communities in need is what nations are supposed to do.

Observers couldn’t help noticing, however, that some of the Kentucky politicians asking for aid — notably Senator Rand Paul — had in the past not only opposed aid for other disaster-struck states but sneered at their pleas. What should we make of this hypocrisy?

The truth is that it runs deeper than “aid for me but not for thee.” Remarkably, if you look at how the federal budget affects U.S. regions, there’s a consistent pattern in which conservative states that preach the importance of self-reliance are in fact heavily subsidized by liberal states, especially in the Northeast.”

“. . . Topping the list of net beneficiaries was, yes, Kentucky, where residents received an average of $14,000 more from Washington than they paid in taxes. To put this in perspective, Kentucky’s 2019 net inflow of federal funds — $63 billion — was roughly 30 percent of the state’s G.D.P. that year.””

Paul Krugman| The Republican Senate Spending Bill Vote Was Sabotage – The New York Times

By Paul Krugman

Opinion Columnist

“Yesterday every single Republican senator voted to shut down the U.S. government and provoke a global financial crisis.

Of course, they claimed otherwise; Mitch McConnell, the Senate minority leader, portrayed the vote against raising the debt limit as a test of Democrats’ ability to govern, and some of his colleagues claimed to be taking a stand for fiscal responsibility. But everyone involved understood that this was an act of political sabotage. And the terrible thing is that it might work.

The U.S. debt limit is a very peculiar institution, because when combined with the filibuster it gives a minority party the ability to undermine basic governance. You might think that once Congress has passed fiscal legislation — once it has passed bills that set spending levels and tax rates — that would be the end of the story. But if this duly enacted legislation leads to a budget deficit, which requires that the U.S. government issue debt, as few as 40 senators can then block the needed borrowing, creating a crisis.”

Jamelle Bouie | We Underestimated Trump Before. It Didn’t Go Well. – The New York Times

By Jamelle Bouie

Opinion Columnist

Sometimes, and much to our detriment, we find real events are simply too outlandish to take seriously.

Many professional Republicans, for example, initially dismissed the movement to “Stop the Steal” as a ridiculous stunt.

“What is the downside for humoring him for this little bit of time? No one seriously thinks the results will change,” an anonymous senior Republican official told The Washington Post a few days after Joe Biden claimed victory:

He went golfing this weekend. It’s not like he’s plotting how to prevent Joe Biden from taking power on Jan. 20. He’s tweeting about filing some lawsuits, those lawsuits will fail, then he’ll tweet some more about how the election was stolen, and then he’ll leave.

Republicans went ahead and humored the president, who then urged his followers to assault the Capitol and try to void the election results in his favor.”

David Lindsay Jr.

Hamden, CT | NYT Comment:

Thank you Jamelle Bouie, for an extraordinary essay– a prize winner. Let me explore. You pointed out that the northern Republicans completely underestimated the willingness of the new confederacy to fight. They thought it was a bluff, and the civil war ensued. What if Lincoln and the GOP just allowed the succession? How would history have changed? Might make a good mini series. In my own study of history, I have read several writers claim that slavery was dying out relatively quickly, without civil wars, because it didn’t have the right economic model for the new industrial societies that were developing in the western world. If the United States was allowed to break in two, would the Nazi party of Germany and the Japanese militarists be in power over most of the world today? One can easily make the dots go in that direction.

Could the Northern and the Southern States come together and fight fascism in the WW II, and if they did, would they be ready to become the industrial engine of the Allies in a relative short period of time? This thought makes me even more grateful for Lincoln and the soldiers who sacrificed for the Union. Now, who will stop this new menace, and would be dictator Donald Trump, who threatens us from within. In reading, “Inside the Third Reich,” by Albert Speer, one can see many similarities. They both designed their platforms, by what enraged their audiences. Neither had scruples.

Author of The Tayson Rebellion, and blogs at InconvenientNews.net

Paul Krugman | The Snake Oil Theory of the Modern Right – The New York Times

By Paul Krugman

Opinion Columnist

“You don’t hear much these days about “economic anxiety.” Most observers acknowledge that the rise of the Trumpist right was driven by racial and social antagonism, not economic populism.

Yet there is an economic element to political extremism, just not what you’d think. Right-wing extremists, and to some extent even more mainstream conservative media, rely on financial support from companies selling nutritional supplements and miracle cures — and that financial support is arguably a significant factor pushing the right to become more extreme. Indeed, right-wing extremism isn’t just an ideological movement that happens to get a lot of money from sellers of snake oil; some of its extremism can probably be seen not as a reflection of deep conviction, but as a way of promoting snake oil.