Paul Krugman | What a Dying Lake Says About the Future – The New York Times

Opinion Columnist

“A few days ago The Times published a report on the drying up of the Great Salt Lake, a story I’m ashamed to admit had flown under my personal radar. We’re not talking about a hypothetical event in the distant future: The lake has already lost two-thirds of its surface area, and ecological disasters — salinity rising to the point where wildlife dies off, occasional poisonous dust storms sweeping through a metropolitan area of 2.5 million people — seem imminent.

As an aside, I was a bit surprised that the article didn’t mention the obvious parallels with the Aral Sea, a huge lake that the Soviet Union had managed to turn into a toxic desert.

In any case, what’s happening to the Great Salt Lake is pretty bad. But what I found really scary about the report is what the lack of an effective response to the lake’s crisis says about our ability to respond to the larger, indeed existential threat of climate change.”

Paul Krugman | Crime and Political Punishment – The New York Times

     Opinion Columnist

“Results from Tuesday’s primaries in California suggest that crime may be a big issue in the midterm elections. In San Francisco, a progressive prosecutor was ousted in a recall vote. In Los Angeles, a businessman and former Republican who has run for mayor on the promise to be a big crime fighter made a strong showing.

It’s not hard to see why crime has moved up on the political agenda. Murders surged nationwide in 2020 and ticked up further in 2021, although we don’t really know why. Right-wingers blame Black Lives Matter, because of course they do. A more likely explanation is the stress caused by the pandemic — stress that, among other things, led to a large increase in domestic violence.

Despite the recent surge, the overall homicide rate is still well below its peak in 1991, and the geography of the political backlash doesn’t seem closely correlated with actual crime rates: San Francisco and Los Angeles both have less violent crime than, say, Houston. But rising crime is real, and voter concern is understandable.”

David Lindsay Jr.
Hamden, CT | NYT comment:
It is hard to be consistently excellent. Krugman writes about the precipitous drop in crime, “But my reading is that there’s no consensus on why that decline — which took place all across the nation, in red states and blue — took place.” It appears that my favorite economist has not read “Freakonomics,” by University of Chicago economist Steven Levitt and New York Times journalist Stephen J. Dubner. Levitt dedicates a chapter to this issue, and claims that his studies show that abortion became legal in the 1973, and many states had dramatic down turns in crime 20 years later. Why, he asked, then stated, probably because there was a dramatic decrease in unwanted male babies many of whom would grow to be hardened criminals in about 20 years. He has lots of data, from a large number of states. Paul Krugman should at least address the leading explanation in the minds of lesser men.
David Lindsay Jr. is the author of “The Tay Son Rebellion, Historical Fiction of Eighteenth Century Vietnam” and blogs at InconvenientNews.Net

Paul Krugman | From the Big Short to the Big Scam (cryptocurrency) – The New York Times

Opinion Columnist

“Remember “The Big Short”? The 2010 book by Michael Lewis, made into a 2015 film, told the story of the 2008 global financial crisis by following a handful of investors who were willing to bet on the unthinkable — the proposition that the huge rise in housing prices in the years before the crisis was a bubble, and that many of the seemingly sophisticated financial instruments that helped inflate housing would eventually be revealed as worthless junk.

Why were so few willing to bet against the bubble? A large part of the answer, I’d suggest, was what we might call the incredulity factor — the sheer scale of the mispricing the skeptics claimed to see. Even though there was clear evidence that housing prices were out of line, it was hard to believe they could be that far out of line — that $6 trillion in real estate wealth would evaporate, that investors in mortgage-backed securities would lose around $1 trillion. It just didn’t seem plausible that markets, and the conventional wisdom saying that markets were OK, could be that wrong.

But they were. Which brings us to the current state of crypto.

Last week the Federal Trade Commission reported that “cryptocurrency is quickly becoming the payment of choice for many scammers,” accounting for “about one of every four dollars reported lost to fraud.” Given how small a role cryptocurrency plays in ordinary transactions, that’s impressive.”

Paul Krugman | How the West Is Strangling Putin’s Economy – The New York Times

Opinion Columnist

“Russia’s military failure in Ukraine has defied almost everyone’s predictions. First came abject defeat at the gates of Kyiv. Then came the incredible shrinking blitzkrieg, as attempts to encircle Ukrainian forces in the supposedly more favorable terrain in the east have devolved into a slow-motion battle of attrition.

What’s important about this second Russian setback is that it interacts with another big surprise: The remarkable — and, in some ways, puzzling — effectiveness, at least so far, of Western economic sanctions against the Putin regime, sanctions that are working in an unexpected way.

As soon as the war began there was a great deal of talk about bringing economic pressure to bear against the invading nation. Most of this focused on ways to cut off Russia’s exports, especially its sales of oil and natural gas. Unfortunately, however, there has been shamefully little meaningful movement on that front. The Biden administration has banned imports of Russian oil, but this will have little impact unless other nations follow our lead. And Europe, in particular, still hasn’t placed an embargo on Russian oil, let alone done anything substantive to wean itself from dependence on Russian gas.

As a result, Russian exports have held up, and the country appears to be headed for a record trade surplus. So is Vladimir Putin winning the economic war?

No, he’s losing it. That surging surplus is a sign of weakness, not strength — it largely reflects a plunge in Russia’s imports, which even state-backed analysts say is hobbling its economy. Russia is, in effect, making a lot of money selling oil and gas, but finding it hard to use that money to buy the things it needs, reportedly including crucial components used in the production of tanks and other military equipment.”

Paul Krugman | Crashing Crypto: Is This Time Different? – The New York Times

Opinion Columnist

“Last week TerraUSD, a stablecoin — a system that was supposed to perform a lot like a conventional bank account but was backed only by a cryptocurrency called Luna — collapsed. Luna lost 97 percent of its value over the course of just 24 hours, apparently destroying some investors’ life savings.

The event shook the crypto world in general, but the truth is that this world was looking pretty shaky even before the Terra disaster. Bitcoin, the original cryptocurrency, peaked last November and has since declined by more than 50 percent.

Here’s one way to think about that decline. Almost everyone is concerned about the rising cost of living; the Consumer Price Index — the cost of a representative basket of goods and services — has gone up about 4 percent over the past six months. But the cost of the same basket in Bitcoin has risen around 120 percent, which means inflation at an annualized rate of about 380 percent.

And other cryptocurrencies have performed far worse. Two cities — Miami and New York — have introduced their own cryptocurrencies, with enthusiastic support from their mayors. MiamiCoin is down more than 90 percent from its peak, and NewYorkCityCoin is down more than 80 percent.”

Paul Krugman | Putin, Ukraine and the Illusion That Trade Brings Peace – The New York Times

Opinion Columnist

“On April 12, 1861, rebel artillery opened fire on Fort Sumter, beginning the U.S. Civil War. The war eventually became a catastrophe for the South, which lost more than a fifth of its young men. But why did the secessionists believe they could pull it off?

One reason was they believed themselves to be in possession of a powerful economic weapon. The economy of Britain, the world’s leading power at the time, was deeply dependent on Southern cotton, and they thought a cutoff of that supply would force Britain to intervene on the side of the Confederacy. Indeed, the Civil War initially created a “cotton famine” that threw thousands of Britons out of work.

In the end, of course, Britain stayed neutral — in part because British workers saw the Civil War as a moral crusade against slavery and rallied to the Union cause despite their suffering.

Why recount this old history? Because it has obvious relevance to the Russian invasion of Ukraine. It seems fairly clear that Vladimir Putin saw the reliance of Europe, and Germany in particular, on Russian natural gas the same way slave owners saw Britain’s reliance on King Cotton: a form of economic dependence that would coerce these nations into enabling his military ambitions.”

Paul Krugman | The Great Resignation is Coming to an End, Statistics Show – The New York Times

Opinion Columnist

You’re reading Paul Krugman’s newsletter, for Times subscribers only.  A guide to U.S. politics and the economy — from the mainstream to the wonkish. Get it in your inbox.

All of the evidence suggests that right now, it’s unusually easy for U.S. workers to find jobs and unusually hard for employers to find workers. The odd thing is that we have a very tight labor market, even though the number of employees is still about a million and a half below prepandemic levels and even further below the prepandemic trend:

Not all the jobs are back.

Not all the jobs are back.

Paul Krugman | America’s Economy in the European Mirror – The New York Times

“Last week Eurostat, the European Union’s statistical agency, released a revised estimate of the euro area’s February inflation rate. It wasn’t a happy report: Consumer prices were up 5.9 percent from a year earlier, more than most analysts had expected. And it’s going to get worse, as the effects of the Ukraine war weigh on food and energy prices.

Britain hasn’t yet released its February inflation number, but the Bank of England expects it to match the rate in the euro area.

Of course, U.S. inflation is even higher, with February consumer prices up 7.9 percent from a year earlier. These numbers aren’t exactly comparable, for technical reasons, but inflation in the U.S. does seem to be running around two percentage points higher than in Europe. I’ll come back to that difference and what might explain it. But surely the fact that inflation is up a lot in many countries, not just America, is worth noting.

After all, the entire Republican Party and a fair number of conservative Democrats insist that the recent surge in U.S. inflation was caused by President Biden’s big spending policies. Europe, however, had nothing comparable to Biden’s American Rescue Plan; last year the euro area’s structural budget deficit, a standard measure of fiscal stimulus, was only about a third as large, as a percentage of G.D.P., as America’s.”

Paul Krugman| How Not to Have a Putin Recession – The New York Times

Opinion Columnist

“Kevin McCarthy, the Republican House minority leader, said something cynical and transparently dishonest the other day. To be fair, that’s sort of an evergreen remark; you could have said the same thing about him just about any week over the past few years. But this particular statement seemed important, because it involved a lie that has a direct bearing on how America will respond to Russia’s invasion of Ukraine.

Here’s what McCarthy tweeted: “These are not Putin gas prices. They are President Biden gas prices.”

Now, that’s just false. You can argue about how much responsibility Biden’s policies bear for inflation in other parts of the economy, but the rising price of gasoline reflects the rising world price of crude oil, which hasn’t been significantly affected by anything Biden has done. And soaring crude prices have caused prices at the pump to surge in nations around the world, indeed by roughly the same amount. That is, these really are Putin gas prices.

Why does this matter? Aside from the crassness of McCarthy’s attempt to blame Biden for something that really, truly isn’t his fault, there’s an important economic issue here.

Like it or not, the world is facing a Putin shock: a surge in the prices of oil and other commodities as a consequence both of Russian aggression and of the West’s retaliation with economic sanctions. But will the Putin shock lead to a recession (outside Russia itself, which is probably facing a near-depression)?”    . . .

David Lindsay: Keep reading. Krugman is magnificent.

The top comments are also very good. I approved the top six. Here are the top ones currently:

That’s What She Said
The WestMarch 14

It’s a shame gasoline has such a stranglehold on the economy. Relying on gasoline for a sound economy is like relying on cigarettes for sound health. It’s an addiction that should’ve been dealt with long ago.

18 Replies964 Recommended

Bruce Williams
ChicagoMarch 14

McCarthy in particular and the right in general want a recession to help them gain control. That’s obvious.

8 Replies858 Recommended

Socrates commented March 14

Downtown Verona, NJMarch 14

There are incredibly few adults in the political room these days…and an incredible number of children. Kevin McCarthy and Mitch McConnell are doing their Party First:Country Last best to ensure that both the economy and democracy tank in order to regain Grand Old Power, at which point they will…step on the gas pedal of cooking the climate, do their utmost to give the Mercer family and a few other billionaires a new raise with fresh tax cuts, and make sure that government fails to help the American people while bamboozling them with tall tales about a war on Christmas, guns and apple pie. Higher interest rates are needed to deflate the real estate and Wall St bubbles and the inflation bubble. Higher taxes on the tax dodging class are desperately needed to level the playing field. Campaign finance reform is desperately needed to reverse the the Republican oligarchs’ ownership of the United States Congress. The internet needs to be regulated so disinformation doesn’t further collapse the American mind with more Pizzagate, QAnon and conspiracy jabberwocky that has reduced a third of Americans into Big Lie zombies. But hard medicine and actual problem-solving and Republicans just don’t get along. They much prefer quackery, charlatanism and magical thinking to boring reality-based solutions. So it’s “Biden Gas Prices” from now until they invent their next marketing gimmick. What did you expect from the Gaslighting Over People party…thoughtful analysis and discourse ?

16 Replies754 Recommended

Eric commented March 14

OregonMarch 14

‘We’ll do ok’ if gas goes back to $2.50 a gallon? No, we won’t. Chea     gas is enabling mindless consumption to destroy the climate. Gas needs to cost $10 a gallon, minimum. Shocking people out of their complacency with high prices is the only way that we will ever get the transition to a carbon-neutral economy off of the ground. There is no viable alternative: people are not going to do this voluntarily. By the way, I drive a truck full of tools that gets 17 mpg to work every day. What I don’t do is drive it 30 miles to a grocery store or a gun range or whatever. We can’t legislate away bad choices, but we can force people to pay for what they are doing to the planet.

20 Replies523 Recommended

Paul Krugman | Putin’s Economic Miscalculation With Ukraine – The New York Times

“But a funny thing has happened in this case. So far, economic pressure against Russia appears to be highly effective, crimping Russian trade even in goods that haven’t officially been placed under sanctions. The financial restrictions that have already been imposed have made transactions with Russia — even the purchase of oil — difficult; fears of future sanctions, plus the general sense that any Western institutions perceived as helping the Putin regime will face harsh treatment from regulators, have led to widespread self-sanctioning, cutting off even trade that is formally permitted.

We don’t know yet how this plays out, but if we see the kinds of mass civilian casualties and reign of terror that seem all too likely in the weeks ahead, the effect may be to largely isolate Russia from the rest of the world economy.

Economists have a rather arcane term for this kind of isolation: “autarky.” And it’s likely to be extremely damaging.

You might think that autarky is just a strong form of protectionism, which also tends to reduce trade. But it’s actually a lot worse.”