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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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.”

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.”

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.

Paul Krugman | Republicans Have Their Own Private Autocracy – The New York Times

By Paul Krugman

Opinion Columnist

“I’m a huge believer in the usefulness of social science, especially studies that use comparisons across time and space to shed light on our current situation. So when the political scientist Henry Farrell suggested that I look at his field’s literature on cults of personality, I followed his advice. He recommended one paper in particular, by the New Zealand-based researcher Xavier Márquez; I found it revelatory.

“The Mechanisms of Cult Production” compares the behavior of political elites across a wide range of dictatorial regimes, from Caligula’s Rome to the Kim family’s North Korea, and finds striking similarities. Despite vast differences in culture and material circumstances, elites in all such regimes engage in pretty much the same behavior, especially what the paper dubs “loyalty signaling” and “flattery inflation.”

Signaling is a concept originally drawn from economics; it says that people sometimes engage in costly, seemingly pointless behavior as a way to prove that they have attributes others value. For example, new hires at investment banks may work insanely long hours, not because the extra hours are actually productive, but to demonstrate their commitment to feeding the money machine.”

In the context of dictatorial regimes, signaling typically involves making absurd claims on behalf of the Leader and his agenda, often including “nauseating displays of loyalty.” If the claims are obvious nonsense and destructive in their effects, if making those claims humiliates the person who makes them, these are features, not bugs. I mean, how does the Leader know if you’re truly loyal unless you’re willing to demonstrate your loyalty by inflicting harm both on others and on your own reputation?”

David Lindsay Jr.

Hamden, CT | NYT Comment:

Thank you Paul Krugman for another superlative essay. This writer worries greatly about the prospects of the future. Regarding the new covid 19 pandemic, I harbor dark thoughts of using sticks, not carrots. Deny anyone who refused a vaccine, the right to hospital care if they get covid. I think Bret Stephens is the only writer I’ve read who has dared say this before I said it in public now. One or two other commenters are bringing us similar ideas. To continue my line of dark thinking, Protect our front line medial personnel. Let the new covid patients who refused vaccination go to a quarantine ward in a prison in the hospital to die as quickly as possible. Require proof of vaccination for everything under the sun or society has to offer. The only exemption, would be a medical one, in writing from a medical doctor, corroborated by a government agency, such as the CDC.

David is the author of “The Tay Son Rebellion” and blogs at InconvenientNews

Paul Krugman | The Decline of Republican Demonization – The New York Times

https://www.nytimes.com/2021/03/25/opinion/republicans-biden-stimulus.html?action=click&module=Opinion&pgtype=Homepage

“. . . And looking forward, why should we expect the G.O.P. to do any better in opposing Biden’s longer-term initiatives?

Bear in mind that both infrastructure spending and raising taxes on the rich are very popular. Democrats seem united on at least the principle of an invest-and-tax plan — and these days they seem pretty good at turning agreement in principle into actual legislation.

To block this push, Republicans will have to come up with something beyond boilerplate denunciations of socialists killing jobs. Will they? Probably not.

In short, the prospects for a big spend-and-tax bill are quite good, because Democrats know what they want to achieve and are willing to put in the work to make it happen — while Republicans don’t and aren’t.”   -30-

Paul Krugman | Et Tu, Ted? Why Deregulation Failed – The New York Times

By Paul Krugman

Opinion Columnist

• Feb. 22, 2021

• 1788

Credit…Justin Sullivan/Getty Images

“Nobody is ever fully prepared for natural disaster. When hurricanes, blizzards or tsunamis strike they always reveal weaknesses — failure to plan, failure to invest in precautions.

The disaster in Texas, however, was different. The collapse of the Texas power grid didn’t just reveal a few shortcomings. It showed that the entire philosophy behind the state’s energy policy is wrong. And it also showed that the state is run by people who will resort to blatant lies rather than admit their mistakes.

Texas isn’t the only state with a largely deregulated electricity market. It has, however, pushed deregulation further than anyone else. There is an upper limit on wholesale electricity prices, but it’s stratospherically high. And there is essentially no prudential regulation — no requirements that utilities maintain reserve capacity or invest in things like insulation to limit the effects of extreme weather.

The theory was that no such regulation was necessary, because the magic of the market would take care of everything. After all, a surge in demand or a disruption of supply — both of which happened in the deep freeze — will lead to high prices, and hence to big profits for any power supplier that manages to keep operating. So there should be incentives to invest in robust systems, precisely to take advantage of events like those Texas just experienced.” . . .

” . . . The disaster in Texas, however, was different. The collapse of the Texas power grid didn’t just reveal a few shortcomings. It showed that the entire philosophy behind the state’s energy policy is wrong. And it also showed that the state is run by people who will resort to blatant lies rather than admit their mistakes.

Texas isn’t the only state with a largely deregulated electricity market. It has, however, pushed deregulation further than anyone else. There is an upper limit on wholesale electricity prices, but it’s stratospherically high. And there is essentially no prudential regulation — no requirements that utilities maintain reserve capacity or invest in things like insulation to limit the effects of extreme weather.” . . .

Opinion | America Didn’t Give Up on Covid-19. Republicans Did. – By Paul Krugman – The New York Times

By Paul Krugman

Opinion Columnist

• June 25, 2020
• • 1859

A doctor at a drive-up Covid-19 testing site in Scottsdale, Ariz., in May. The recent rapid spread of the virus has overwhelmed the state’s testing capacity.Credit…Ross D. Franklin/Associated Press

“Earlier this year much of America went through hell as the nation struggled to deal with Covid-19. More than 120,000 Americans have now died; more than 20 million have lost their jobs.

But it’s looking as if all those sacrifices were in vain. We never really got the coronavirus under control, and now infections, while they have fallen to a quite low level in the New York area, the pandemic’s original epicenter, are surging in much of the rest of the country.

And the bad news isn’t just a result of more testing. In new hot spots like Arizona — where testing capacity is being overwhelmed — and Houston the fraction of tests coming up positive is soaring, which shows that the disease is spreading rapidly.

It didn’t have to be this way. The European Union, a hugely diverse area with a larger population than the U.S., has been far more successful at limiting the spread of Covid-19 than we have. What went wrong?

The immediate answer is that many U.S. states ignored warnings from health experts and rushed to reopen their economies, and far too many people failed to follow basic precautions like wearing face masks and avoiding large groups. But why was there so much foolishness?

Well, I keep seeing statements to the effect that Americans were too impatient to stay the course, too unwilling to act responsibly. But this is deeply misleading, because it avoids confronting the essence of the problem. Americans didn’t fail the Covid-19 test; Republicans did.”