Paul Krugman | Guns, Ships and Chips: On Economic Inflexibility – The New York Times

By Paul Krugman

Opinion Columnist

“What do shipping containers and artillery shells have in common? This isn’t a trick question. The answer is that both have been in very short supply at some point over the past three years. And these shortages tell us something disturbing about modern economies: They aren’t nearly as flexible as many people, myself included, had thought.

About those artillery shells: Like many people, I’ve been closely following the war in Ukraine. Everyone knows the broad outlines of the story so far: Vladimir Putin’s Russia invaded in February of last year, expecting a quick victory over Ukraine’s much weaker army, but the Ukrainians, astonishingly, defeated the would-be blitzkrieg and the war has turned instead into a brutal slugging match.

No matter how valorous, Ukrainians on their own would have no chance in such a match. But they have received crucial aid from Western nations that see Ukraine — as do I — as a crucial front in the defense of democracy.”

“. . . .   That is, in contrast to the story told by Samuelson’s curve, it may be very hard to produce more guns in the short run even if you’re willing to give up a lot of butter.

The revelation that economies aren’t as flexible as we thought has many implications for policy. Supply-chain constraints weren’t the sole reason inflation took off in 2021, but they were clearly an important part of the story, with implications for future monetary policy. And in general, economic inflexibility suggests that we should be taking more precautions against the possibility of future disruptions, especially for strategic goods, but possibly more widely.

But all of that demands a much longer discussion. The main point for now is that it turns out that the Rolling Stones may have had it backward: Modern economies generally do a very good job of getting people what they want, but sometimes you just can’t get what you need.”

Paul Krugman | Conspiracy Theorizing Goes Off the Rails – The New York Times

By Paul Krugman

Opinion Columnist

“On Feb. 3 a train carrying hazardous materials derailed in East Palestine, Ohio. Some of the contents immediately caught fire. Three days later authorities released and burned off additional material from five tankers. These fires caused elevated levels of harmful chemicals in the local air, although the Environmental Protection Agency says that the pollution wasn’t severe enough to cause long-term health damage.

Train derailments are actually fairly common, but you can see how this one might become a political issue. After all, the Obama administration tried to improve rail safety, for example by requiring superior modern brakes on high-hazard trains, and then the Trump administration reversed these regulations. As it happens, these regulations probably wouldn’t have prevented the Ohio derailment, because they were too narrow to have covered this particular train. Still, the events in East Palestine would seem, on the face of it, to strengthen the progressive case for stronger regulation of industry and hurt the conservative case against regulation.

Instead, however, the right is on the attack, claiming that blame for the disaster in Ohio rests on the Biden administration, which it says doesn’t care about or is even actively hostile to white people.

This is vile. It’s also amazing. As far as I can tell, right-wing commentators have just invented a whole new class of conspiracy theory, one that doesn’t even try to explain how the alleged conspiracy is supposed to work.”

David Lindsay Jr.

Hamden, CTPending Approval

Great essay Paul Krugman, thank you. Incandescent. It seems time again here to mention, that we should bring back the fairness doctrine for journalism and social media, which Ronald Reagan gutted.

InconvenientNews.net

Paul Krugman | Why Republican Politicians Still Hate Medicare – The New York Times

By Paul Krugman

Opinion Columnist

“The Republicans who now control the House will soon try to slash Social Security and Medicare. They plan to achieve this by holding the economy hostage, threatening to create a financial crisis by refusing to raise the federal debt ceiling. The interesting questions are why they want to do this, given that it appears politically suicidal, and how Democrats will respond.

Before I get into the puzzles, let me start by pointing out that the plot against the social safety net isn’t a conspiracy theory. The general shape of the scheme has been widely reported for months. The arithmetic is also clear: It isn’t possible to achieve huge reductions in the budget deficit, while at the same time depriving the I.R.S. of the resources it needs to go after tax cheats, without deep cuts in popular social programs.”

Paul Krugman | Why Republican Politicians Still Hate Medicare – The New York Times

By Paul Krugman

Opinion Columnist

“The Republicans who now control the House will soon try to slash Social Security and Medicare. They plan to achieve this by holding the economy hostage, threatening to create a financial crisis by refusing to raise the federal debt ceiling. The interesting questions are why they want to do this, given that it appears politically suicidal, and how Democrats will respond.

Before I get into the puzzles, let me start by pointing out that the plot against the social safety net isn’t a conspiracy theory. The general shape of the scheme has been widely reported for months. The arithmetic is also clear: It isn’t possible to achieve huge reductions in the budget deficit, while at the same time depriving the I.R.S. of the resources it needs to go after tax cheats, without deep cuts in popular social programs.

And beyond all that, we now have it in black and white — well, blue on blue. CNN has obtained a screenshot of a slide presented at a closed-door Republican meeting on Tuesday. The first bullet point calls for balancing the budget within 10 years, which is mathematically impossible without deep cuts to Social Security, Medicare and Medicaid. The second calls for reforms to “mandatory spending” — which is budget-speak for those same programs. And the final point calls for refusing to raise the debt limit unless these demands are met.”

” . . . . Here’s what I think is going on: Even now many, perhaps most Republicans in Congress aren’t culture-war zealots. Instead, they’re careerists who depend, both for campaign contributions and for post-Congress career prospects, on the same billionaires who have supported right-wing economic ideology for decades. They won’t stand up to the crazies and conspiracy theorists, but their own agenda is still tax cuts for the rich and benefit cuts for the poor and middle class.

And the culture warriors go along because they basically aren’t interested in policy substance.”

Paul Krugman | Is the Inflation Storm Letting Up? – The New York Times

By Paul Krugman

Opinion Columnist

“The average national price of regular gasoline this Christmas was almost 20 cents a gallon lower than it was a year earlier. Prices at the pump are still higher than they were during the pandemic slump, when economic shutdowns depressed world oil prices, but the affordability of fuel — as measured by the ratio of the average wage to gas prices — is most of the way back to pre-Covid levels.

Now, gas prices aren’t a good measure either of economic health or of successful economic policy — although if you listened to Republican ads during the midterms, you might have thought otherwise. But subsiding prices at the pump are only one of many indicators that the inflationary storm of 2021 to ’22 is letting up. Remember the supply-chain crisis, with shipping rates soaring to many times their normal level? It’s over.

More broadly, recent reports on the inflation measures the Federal Reserve traditionally uses to guide its interest rate policy have been really, really good.

So is this going to be the winter of our diminishing discontent?”

David Lindsay: I am sharing this article mainly to share this one comment:

V

Vic

WashingtonDec. 26

@Sheila Here on the west coast gas prices rose over $1/gallon about a month before the election because the oil companies took six refineries offline for “unscheduled maintenance”. An obvious attempt to influence the election. Since the election, prices have dropped almost $1.50 a gallon.

In Reply to Sheila484 Recommended

Paul Krugman | Why Petulant Oligarchs Rule Our World – The New York Times

By Paul Krugman

Opinion Columnist

“Some years ago — I think it was 2015 — I got a quick lesson in how easy it is to become a horrible person. I was a featured speaker at a conference in São Paulo, Brazil, and my arrival flight was badly delayed. The organizers, worried that I would miss my slot thanks to the city’s notorious traffic, arranged to have me met at the airport and flown directly to the hotel’s roof by helicopter.

Then, when the conference was over, there was a car waiting to take me back to the airport. And just for a minute I found myself thinking, “What? I have to take a car?”

By the way, in real life I mostly get around on the subway.

Anyway, the lesson I took from my moment of pettiness was that privilege corrupts, that it very easily breeds a sense of entitlement. And surely, to paraphrase Lord Acton, enormous privilege corrupts enormously, in part because the very privileged are normally surrounded by people who would never dare tell them that they’re behaving badly.

That’s why I’m not shocked by the spectacle of Elon Musk’s reputational self-immolation. Fascinated, yes; who isn’t? But when an immensely rich man, accustomed not just to getting whatever he wants but also to being a much-admired icon, finds himself not just losing his aura but becoming a subject of widespread ridicule, of course he lashes out erratically, and in so doing makes his problems even worse.”

Paul Krugman | How China Lost the Covid War – The New York Times

By Paul Krugman

Opinion Columnist

Do you remember when Covid was going to establish China as the world’s dominant power? As late as mid-2021, my inbox was full of assertions that China’s apparent success in containing the coronavirus showed the superiority of the Chinese system over Western societies that, as one commentator put it, “did not have the ability to quickly organize every citizen around a single goal.”

At this point, however, China is flailing even as other nations are more or less getting back to normal life. It’s still pursuing its zero-Covid policy, enforcing draconian restrictions on everyday activities every time new cases emerge. This is creating immense personal hardship and cramping the economy; cities under lockdown account for almost 60 percent of China’s G.D.P.

In early November many workers reportedly fled the giant Foxconn plant that produces iPhones, fearing not just that they would be locked in but that they would go hungry. And in the last few days many Chinese, in cities across the nation, have braved harsh repression to demonstrate against government policies.

I’m not a China expert, and I have no idea where this is going. As far as I can tell, actual China experts don’t know, either. But I think it’s worth asking what lessons we can draw from China’s journey from would-be role model to debacle.

Crucially, the lesson is not that we shouldn’t pursue public health measures in the face of a pandemic. Sometimes such measures are necessary. But governments need to be able to change policy in the face of changing circumstances and new evidence.

And what we’re seeing in China is the problem with autocratic governments that can’t admit mistakes and won’t accept evidence they don’t like.

In the first year of the pandemic, strong, even draconian restrictions made sense. It was never realistic to imagine that mask mandates and even lockdowns could prevent the coronavirus from spreading. What they could do, however, was slow the spread.

At first, the goal in the U.S. and many other countries was to “flatten the curve,” avoiding a peak in cases that would overwhelm the health care system. Then, once it became clear that effective vaccines would become available, the goal was or should have been to delay infections until widespread vaccination could provide protection.

You could see this strategy at work in places like New Zealand and Taiwan, which initially imposed stringent rules that held cases and deaths to very low levels, then relaxed these rules once their populations were widely vaccinated. Even with vaccines, opening up led to a large rise in cases and deaths — but not nearly as severe as would have happened if these places had opened up earlier, so that overall deaths per capita have been far lower than in the United States.

China’s leaders, however, seem to have believed that lockdowns could permanently stomp out the coronavirus, and they have been acting as if they still believe this even in the face of overwhelming contrary evidence.

At the same time, China utterly failed to develop a Plan B. Many older Chinese — the most vulnerable group — still aren’t fully vaccinated. China has also refused to use foreign-made vaccines, even though its homegrown vaccines, which don’t use mRNA technology, are less effective than the shots the rest of the world is getting.

All of this leaves Xi Jinping’s regime in a trap of its own making. The zero-Covid policy is obviously unsustainable, but ending it would mean tacitly admitting error, which autocrats never find easy. Furthermore, loosening the rules would mean a huge spike in cases and deaths.

Not only have many of the most vulnerable Chinese remained unvaccinated or received inferior shots, but because the coronavirus has been suppressed, few Chinese have natural immunity, and the nation also has very few intensive care beds, leaving it without the capacity to deal with a Covid surge.

It’s a nightmare, and nobody knows how it ends. But what can the rest of us learn from China?

First, autocracy is not, in fact, superior to democracy. Autocrats can act quickly and decisively, but they can also make huge mistakes because nobody can tell them when they’re wrong. At a fundamental level there’s a clear resemblance between Xi’s refusal to back off zero Covid and Vladimir Putin’s disaster in Ukraine.

Second, we’re seeing why it’s important for leaders to be open to evidence and be willing to change course when they’ve been proved wrong.

Ironically, in the United States the politicians whose dogmatism most resembles that of Chinese leaders are right-wing Republicans. China has rejected foreign mRNA vaccines, despite clear evidence of their superiority; many Republican leaders have rejected vaccines in general, even in the face of a huge partisan divide in death rates linked to differential vaccination rates. This contrasts with Democrats, who have in general followed something like New Zealand’s approach, if much less effectively — restrictions early on, relaxed as vaccination spread.

In short, what we can learn from China is broader than the failure of specific policies; it is that we should beware of would-be autocrats who insist, regardless of the evidence, that they’re always right.”    -30-

Paul Krugman | How Democrats Can Fight This G.O.P. – The New York Times

By Paul Krugman

Opinion Columnist

“Normally, one would expect a political party that suffered severe electoral disappointment — falling far short of typical midterm gains despite high inflation and consumer discontent — to moderate its positions, to seek compromise in order to achieve at least some of its policy goals.

But the modern G.O.P., in case you haven’t noticed, isn’t a normal political party. It barely has policy goals, other than an almost reflexive desire to cut taxes on the rich and deny aid to those in need. It certainly doesn’t have policy ideas.

Republicans spent much of the election talking about inflation. But in a news conference just after securing a narrow majority in the House, top Republicans declared that their top priority would be … investigating the Biden family.

So the G.O.P. won’t help govern America. It will, in fact, almost surely do what it can to undermine governance. And Democrats, in turn, need to do whatever they can both to thwart political sabotage and to make the would-be saboteurs pay a price.”

“. . . . .  The good news is that Democrats can, as The Washington Post’s Greg Sargent puts it, “crazyproof” policy during the lame duck session, raising the debt limit high enough that it won’t be a problem and locking in sufficient aid for Ukraine to get through the many months of war that surely lie ahead. And Democrats would be, well, crazy not to do these things as soon as possible.

Beyond that, Democrats can and should hammer Republicans for their extremism, for focusing on disruption and fake scandals rather than trying to improve Americans’ lives.”  -30-

Paul Krugman | Wonking Out: Stealing Away the Golden Years of the Working Class – The New York Times

By Paul Krugman

Opinion Columnist

“My Thursday column is about the assault on Medicare and Social Security that is almost certain to follow if Republicans prevail on Tuesday. If the G.O.P. wins control of Congress, we can expect it to hold the economy hostage, most obviously by weaponizing the debt ceiling, in an attempt to force big cuts in Medicare and Social Security.

This isn’t an outlandish scenario. It already happened once. In 2011, after taking control of the House, Republicans sought to extort major cuts in the social safety net from the Obama administration — and they almost succeeded. In fact, President Barack Obama agreed to a rise in the age of Medicare eligibility, from 65 to 67. The deal fell through only because Republicans were unwilling to accept even modest tax increases as their part of the bargain.

This time around, the demands are likely to be even bigger. A report from the Republican Study Committee, which probably gives a good idea of where the G.O.P. will go, calls for upping the retirement age and the age of Medicare eligibility to 70.

The report justifies such a rise by pointing to the long-term increase in the number of years Americans can expect to live after age 65, which it calls a “miracle.”

What the report doesn’t note are two probably related caveats for this miracle. First, the increase in seniors’ life expectancy has actually been much smaller here than in other wealthy nations. Second, progress has been very uneven within America, with much bigger gains for groups with high socioeconomic status — precisely the people who need Medicare and Social Security the least — than for the less fortunate.”

“. . . . . . . How does all this bear on Republican proposals to raise the retirement and Medicare eligibility ages? Because seniors’ life expectancy varies so much by class, an increase in the age of eligibility for major programs will take a much bigger bite out of retirement for Americans with low socioeconomic status, and correspondingly fewer years to collect benefits, than it will on those higher on the ladder.

And because disparities have been rising over time, the disproportionality of that effect has been rising, too.

Look back at the figure on life expectancies by quartile. According to these estimates, American men in the bottom quartile born in 1960 can expect to live only 1.9 more years after 65 than their counterparts born in 1928. That’s slightly less than the increase in the retirement age that has already taken place. And even men in that quartile born in 1990 are expected to have only 3.5 years more time after 65 than those born in 1928; meanwhile, Republicans are proposing a rise in the retirement age to 70, a five-year total increase, and an equal rise in the Medicare age.

One way to think about all of this, which is only a slight caricature, is that Republicans are telling janitors in Oklahoma that they can’t get benefits in their 60s — even though their life expectancy hasn’t gone up by much — because lawyers in New York are living longer.

It’s quite a position to take, and it would surely provoke a huge backlash — if voters knew about it, which most of them seem not to.”  -30-

Paul Krugman | Trump Is Weak, but the G.O.P. Is Weaker – The New York Times

By Paul Krugman

Opinion Columnist

“After their party’s disappointing performance in the midterms, Republican elites seem to have decided that Donald Trump is their big problem. The Murdoch media empire has been trashing the former president. Many donors and operatives are reportedly rallying around Gov. Ron DeSantis of Florida. But Trump, who is widely expected to announce his 2024 presidential campaign on Tuesday, won’t go quietly.

Will Trump secure the nomination despite elite qualms? If he doesn’t, will a man who has never shown any loyalty to his party or, for that matter, anyone but himself, sabotage the G.O.P. out of spite? I don’t know more than anyone else who follows the news.

Let’s talk instead about how remarkable it is that someone like Trump managed to dominate one of America’s two major political parties and surely retains a substantial base.

I’m not talking about the fact that Trump holds what I consider reprehensible policy views or even the fact that he engaged in several acts, including an attempt to overturn a national election, that can reasonably be described as seditious. Clearly, most of the G.O.P. is OK with all of that.”

” . . . . . .   Also, the Republican elites trying to distance themselves from Trump spent years fluffing his image. Until a few days ago Fox News, the main source of political information for much of the G.O.P. base, gave Trump the kind of hagiographic coverage you’d expect from state media in a dictatorship.

And Republican politicians, many of whom knew Trump for what he was, spent years praising him in language reminiscent of Politburo members praising the party chairman.

Now those same elites want to push Trump out of the picture. But while they may be able to deny him the nomination, they probably won’t be able to avoid paying a heavy price for their past cowardice.”   -30-