Tag: Paul Krugman

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Why the facts are bad for Republicans

It amazes me some of the crap people believe even when facts and the truth prove them wrong on a regular basis. I’m use to such “thinking” having been involved in the atheist/humanism/freethought movement for more than 15 years. I’m use to religious believers being stubborn but I have to slap my head when usually smart people believe stupid crap. Republicans seem to have a corner on that freaky behavior.

Markos at Daily Kos posts samples of the hate mail he gets being the founder of a major liberal blog. Here is a comment sent to him and his response:

“just a comment

I just recently discovered all this “interesting” information on your website and I have concluded one thing……..it is YOU and people like you that are responsible for my ripping up my DEMO-NUT card and becoming a PROUD REPUBLICAN! There is nothing more dangerous to America than a rabid left wing liberal. Well maybe a crazy jihadist with a bomb strapped to his chest; but you haven’t figured that out yet and probably you never will. Idiot.“

Dude, where have you been? A crazy jihadist might be able to kill some people, but liberals would provide (true) universal single-payer healthcare, work toward peace on earth, spread tolerance and equality of opportunity, hold greedy corporations accountable for their looting of America, work to replace fossil fuels with clean renewal energy, create a fair and sane immigration policy, and even the negotiating playing field between workers and big business.

Saturday Hate Mail-a-palooza

Some Republicans get spoon fed the wacko idea that LIBERALS are destroying the country when the facts and the truth show that we would be so much better off as a nation if the liberals ran the government. Those pesky facts would also show that it was the work of the GOP in Congress and their corporate lords that brought us the 2008 economic collapse and helped make the Gulf oil spill worse that it needed to be.

Just look at the actual history of this country and you will see liberals and progressives leading the country forward and conservatives bring us down.

“I’m speaking totally for myself and I’m not speaking for the Republican Party and I’m not speaking for anybody in the House of Representatives but myself, but I’m ashamed of what happened in the White House yesterday. I think it’s a tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown. In this case, a $20 billion shakedown with the Attorney General of the United States who is legitimately conducting a criminal investigation and has every right to do so to protect the interests of the American people participating in what amounts to a $20 billion slush fund that’s unprecedented in our nation’s history that’s got no legal standing and what I think sets a terrible precedent for the future,” said Barton.

“I’m only speaking for myself. I’m not speaking for anybody else, but I apologize. I do not want to live in a country where any time a citizen or a corporation does something that is legitimately wrong and is subject to some sort of political pressure that is, again, in my words, amounts to a shakedown. So I apologize,” he said.

Rep. Joe Barton (R-TX) on June 17th 2010 hearing about BP Oil spill

And it isn’t just Joe Barton saying this about the escrow fund:

The fact is BP didn’t have to set the money aside. They could’ve waited until any legal cases were resolved or any other foot dragging methods a large company employs to keep from having to pay damages.

The GOP also ignores polling showing they are on the wrong team on this issue:

68 percent of respondents want more regulation of the oil industry;

72 percent favor “Barack Obama’s proposals to develop alternative sources of energy and reduce the amount of oil and other fossil fuels that are produced and used in this country”;

69 percent believe such plans will increase jobs.

According to the poll, opposition to increased offshore drilling has grown 10 points since May and is now twice as high as it was in 2008. Fifty-eight percent of those questioned support a six-month moratorium on new drilling in the Gulf and other offshore sites; 68 percent favor increased regulation of the oil industry in this country.

“There is a gender and generation gap on offshore oil drilling – women and younger Americans are less likely to support drilling offshore and more likely to support a moratorium,” says CNN Polling Director Keating Holland.

Measures that directly target BP are also popular – 63 percent favor lifting the liability cap on BP and 53 percent would support criminal charges against some BP employees or executives.

CNN Poll: Half say Gulf will never recover

Then we have the deficit hawks who show up around election time to whine about money being spent. It’s different this time because we are still in financial trouble and if these hawks get their way we might end up in another economic collapse. As Economist Paul Krugman wrote recently:

Many economists, myself included, regard this turn to austerity as a huge mistake. It raises memories of 1937, when F.D.R.’s premature attempt to balance the budget helped plunge a recovering economy back into severe recession.

In America, many self-described deficit hawks are hypocrites, pure and simple: They’re eager to slash benefits for those in need, but their concerns about red ink vanish when it comes to tax breaks for the wealthy. Thus, Senator Ben Nelson, who sanctimoniously declared that we can’t afford $77 billion in aid to the unemployed, was instrumental in passing the first Bush tax cut, which cost a cool $1.3 trillion. 

That ’30s Feeling

The major drag on the economy is still health care costs since the reform that was passed was only a start and the major parts haven’t taken effect yet. Blogger digby wrote:

Any deficit scold who doesn’t put reducing health care costs at the very top of the agenda is just a demagogic crank doing the dirty work for the aristocratic overlords.

Basic Arithmetic

The GOP want to kiss corporate ass, cut the social safety net, and lie about it all.

I hope the bruise on my head goes away before November so I can party during another Democratic election victory. 

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Organized disruptions of constituent town halls are un-American

Congress is in recess until September. At these times many go back to their districts and have town hall meetings with constituents to find out their views on issues the Congress member has been dealing with. It is one way to take the temperature of the electorate. During this recess and with health care reform on the table, conservative groups have been organizing so-called “grassroots” protests at the town hall meetings. They and their major insurance plan backers want to make it look like the “public” is opposed to reform and if the Congress person doesn’t agree then they shout them down and disrupt the meeting. These thug tactics by conservatives are un-American and give a false perception of major opposition to reform.

Here is an example:

David Neiwert at Crooks and Liars wrote:

No one has a problem with right-wingers marching in protest of the health-care plans. That’s certainly their right. And no one minds that they choose to participate in these forums. But town halls were never designed to be vehicles for protest. They have always been about enabling real democratic discourse in a civil setting.

When someone’s entire purpose in coming out to a town-hall forum is to chant and shout and protest and disrupt, they aren’t just expressing their opinions — they are actively shutting down democracy.

And that, folks, is a classically fascist thing to do.

Are Republicans and their thugs killing off the Town Hall as a democratic forum? 

But before you say “well liberals have done it before….”, Paul Krugman had this to say:

Some commentators have tried to play down the mob aspect of these scenes, likening the campaign against health reform to the campaign against Social Security privatization back in 2005. But there’s no comparison. I’ve gone through many news reports from 2005, and while anti-privatization activists were sometimes raucous and rude, I can’t find any examples of congressmen shouted down, congressmen hanged in effigy, congressmen surrounded and followed by taunting crowds.

And I can’t find any counterpart to the death threats at least one congressman has received.

The Town Hall Mob

The fact is that polls show majority support for Obama’s ideas on health care reform (starts with question 37) and the people who show up and disrupt the town hall meetings are the same people who can’t stand a Democrat is President, who has been encouraged by conservative groups and pundit douchebags, and many who are horrified that an African-American is President.

Rush Limbaugh got it wrong when he claimed the President and Democrats were using Nazi tactics in the reform debate, it seems the conservatives are doing the Nazi tactics. Back in the 1920’s Brownshirts would invade and disrupt meetings of other political parties in Germany. Even the Nazis learned that thuggery wouldn’t win them the election so they ended up reducing the influence of the Brownshirts and stopping the meeting disruptions.

When are conservatives going to learn the same lesson?

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Zombie Banks Need to be Nationalized

One of the items mentioned in President Obama’s address to Congress was about the continued mess in the financial sector. Billions have been given to various banks yet the credit market is still too tight to help ease the economic mess we are in. If credit isn’t flowing then businesses have no way to buy new inventory or equipment and some may not be able to make payroll. Economist Paul Krugman makes the case that these “zombie” banks need to taken over and I agree.

Krugman writes:

Let’s be concrete here. There’s a reasonable chance — not a certainty — that Citi and BofA, together, will lose hundreds of billions over the next few years. And their capital, the excess of their assets over their liabilities, isn’t remotely large enough to cover those potential losses.

Arguably, the only reason they haven’t already failed is that the government is acting as a backstop, implicitly guaranteeing their obligations. But they’re zombie banks, unable to supply the credit the economy needs.

To end their zombiehood the banks need more capital. But they can’t raise more capital from private investors. So the government has to supply the necessary funds.

But here’s the thing: the funds needed to bring these banks fully back to life would greatly exceed what they’re currently worth.

Banking on the Brink

What has been happening is the previous administration as well as Obama’s have done everything short of taking over the essentially failed banks. What I don’t understand is the aversion to do it since it happens all the time.

During the Great Depression and earlier it was common to have bank panics. There would be some incident or economic downturn which then led to a “run” on banks – where depositors lose confidence in a bank and remove their money. If too many people did this the bank would close and go out of business. Generally banks didn’t keep enough cash on hand to pay out all the deposits so unless you got your money out early you would lose any money still at the bank.

In 1933, 4,004 banks closed putting thousands of people in a world of hurt. One of the ways bank runs were minimized and are rare today was the creation of the Federal Deposit Insurance Corporation (FDIC). It provides insurance for up to $250,000 of a person’s deposit at a member bank. In return FDIC has oversight on the bank. If the health of a bank reaches a certain point, FDIC moves in, removes the management, cleans up the books, and runs the bank for a short time before it either liquidates it slowly or sells the assets to private investors.

In 2008, 30 banks have been taken over in this way by FDIC.

It is clear that the recent bail outs provided to the various banks haven’t freed up the credit market and in some cases the banks have continued on as if nothing is wrong – like spending on lavish parties or using tax payer money to give out bonuses. The bad management needs to be removed and the banks made over.

I know some are saying “But Doug, you support a bail out of the auto industry. Why can’t we let those fail too?”

The simple fact is there is a program to allow a bank to be cleaned up and continue under new ownership. If an auto maker was allowed to fail, more than likely it would be liquidated meaning it would be gone along with the thousands of jobs they had and the ones at the associated suppliers on down the line.

The solutions can’t be the same since the problems are completely different and the outcome of not doing anything are completely different.

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Tax Cuts equals “Bad Faith Economics”

Back in my college days, I had a friend who I would debate various topics with on those late night study sessions in the study lounge. He use to drive me crazy because he would always take the opposite position and would never yield, compromise, or even acknowledge any of my points. No matter what evidence I provided he would refuse to accept it. These debates wouldn’t go anywhere because of his stubbornness but he enjoyed them. He would walk around for a few days with a smugness believing he bested me. That’s how it seems Congressional Republicans are acting over the proposed stimulus plan.

The GOP has always been factually challenged but is always a good read when someone points it out in a high profile publication like the New York Times.

Paul Krugman, professor of economics and international affairs at Princeton University and who won the 2008 Nobel Memorial Prize in Economic Sciences, demolishes the current GOP talking points against the proposed stimulus plan. Let me stress. Paul Krugman is an expert in economics. It his job.

In his January 26th column he states:

As the debate over President Obama’s economic stimulus plan gets under way, one thing is certain: many of the plan’s opponents aren’t arguing in good faith. Conservatives really, really don’t want to see a second New Deal, and they certainly don’t want to see government activism vindicated. So they are reaching for any stick they can find with which to beat proposals for increased government spending.

Bad Faith Economics

He then went through the talking points and shreds them:

John Boehner, the House minority leader, calling the plan to “spend hundreds of millions of dollars on contraceptives” is simply a cheap shot and easily dismissed. The fact is the proposal is an expansion in the number of states that can use Medicaid money, with a federal match, to help low-income women prevent unwanted pregnancies, which would save the states $400 million.

The Obama plan will cost $275,000 per job created? Nope. Closer to $100,000 and lower if you take into account the tax income from those new jobs.

It’s always better to cut taxes than to increase government spending because taxpayers should decide how to spend their money? Krugman notes that a large percentage of any tax cut would be saved so spending on things like infrastructure will get more bang for the bucks. Increased tax revenue and increased spending in the private sector by the people with those created jobs will amplify the results. As an aside, the last tax cut Bush gave, when all of us got $600 or more in a check only created an infinitesimal ripple in the economy.

We should favor monetary policy over fiscal policy? Nope. Because interest rates are effectively zero right now. There are no more monetary tricks to pull out.

Krugman closes with a even more true fact facing the GOP. Obama won the election. The public has spoken.

We need better roads, bridges that don’t fall down, and school buildings that don’t make students sick. The LAST thing we need is a tax cut.

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