Showing posts with label Paul Krugman. Show all posts
Showing posts with label Paul Krugman. Show all posts

October 15, 2011

Murdoch Pattern of Misconduct

Open Letter to the Federal Communications Commission:

Dear FCC members:

Forget the political implications for a moment and envision what you'd LIKE to do to the Murdoch media syndicate.

The Occupy movement is your signal that the time has come to act on visions like that prompted above.

Paul Krugman is right, again: Pattern of Misconduct

Now it's time for the FCC to act.

To Contact the Commissioners via E-mail

Chairman Julius Genachowski: Julius.Genachowski@fcc.gov
Commissioner Michael J. Copps: Michael.Copps@fcc.gov
Commissioner Robert McDowell: Robert.McDowell@fcc.gov
Commissioner Mignon Clyburn: Mignon.Clyburn@fcc.gov


gdaeman_scroll_small

August 12, 2011

Hourglass with Sand in One Side

I posed the following one Paul Krugman's blog:

Why is it that I have the strong image of an hourglass with all the sand trapped in one end when I think about our current economic situation? If this analogy is useful, what is the analogue of turning the hourglass over in this case?


We'll see if he responds.

Sources:

gdaeman_scroll_small

October 18, 2010

Opportunities to Miss

Not sure it's kosher, but I'm going to re-print a Paul Krugman blog post in it's entirety:

In today’s [New York Times] report on the foreclosure mess, a revealing sentence:

As the foreclosure abuses have come to light, the Obama administration has resisted calls for a more forceful response, worried that added pressure might spook the banks and hobble the broader economy.

Surely this can serve as a generic statement:

As NAME ISSUE HERE has come to light, the Obama administration has resisted calls for a more forceful response, worried that added pressure might spook the banks and hobble the broader economy.

Stimulus, bank rescue, China, foreclosure; it applies all along. At each point there were arguments for not acting; but the cumulative effect has been drift, and a looming catastrophe in the midterms.

Or to put it another way, the administration has never missed an opportunity to miss an opportunity. And soon there won’t be any more opportunities to miss.

===== End ====

Ouch!

Sources:

Challenge the Establishment Blog

gdaeman_scroll_small

May 10, 2010

Greece Spending Beyond it's Means

Lots of people on this side of the Atlantic are pointing at Greece and making statements about it spending beyond it's means. They are referring to government spending. Of course, the US has spent beyond it's means too, most seriously by Reagan and the Bushs.

Then, there are insightful people who see get to the kernel of the issue, like the following commenters on a post by Paul Krugman:

Ben W
Boston, MA

Paul said: "And it’s true, we did something like that too. [deficit spending] But guess who was in power then? Funny about that."

It's called "Starve The Beast."

Khal Spencer
Los Alamos, NM

I thought that running deficits even in good times was part of the "starve the beast" policy under Reagan and Bush I and II. Of course, it wasn't supposed to be a "kill the beast" policy, was it?

gdaeman_scroll_small

September 5, 2009

Krugman on "Math in Economics"

I guess Paul Krugman has done a little math in his career. He responds to critics who have painted him with the broad brush as an opponent of mathematical modeling in economics.

Kurgman Blog Post

What I objected to in the mag article was the tendency to identify good math with good work.

Sources:

Paul Krugman blog, September 11, 2009.

gdaeman_scroll_small

April 8, 2009

The Establishment

For the past year or so I've taken to using the phrase "establishment media" instead of "mainstream media." Some people dismiss the word "establishment" as some notion that only exists in the paranoid minds of left wingers. Often, they're just parroting the rants of right wing talk show hosts who play a role in shielding the establishment.

The establishment is real, and establishment media is too. Thanks to Newsweek editor Evan Thomas, we have a frank admission from his April 6 musings about Nobel economist Paul Krugman:

By definition, establishments believe in propping up the existing order. Members of the ruling class have a vested interest in keeping things pretty much the way they are.


They want to maintain their lock on power and wealth, and are willing to do so at the expense of the unwashed masses (that's us).

If you are of the establishment persuasion (and I am), reading Krugman makes you uneasy.


This shows my choice in using the phrase "establishment media" is well founded.... and they should be uneasy.

gdaeman_scroll_small

March 28, 2009

GDAE Podcast Episode 9

Episode 9 - March 28, 2009 
  • Seymour Hersh in his own words on Cheney Assassination Teams;
  • Prosecution of Bush is not a fringe issue, Obama and Stephanopoulos on the people's most popular question to Obama;
  • American Prospect founder Robert Kuttner predicts Geithner gone in 60-days. A solution? A Resolution and Finance Corporation (RFC);
  • Business reporter who exposed ENRON, Bethany McLean, on who will eat the losses?;
  • Former IMF chief economist Kenneth Rogoff on biting the bullet now or facing a "lost decade". Also, here comes inflation.
  • Nobel economist Paul Krugman's despair over Obama's rehash of the Bush bailout plan. 

    You can take ACTION:  AskDOJ@USDOJ.gov   Urge Attorney General Eric Holder to investigate Bush administration officials for wide ranging crimes.

Play GDAE Podcast Episode 9 from this page.

Previous Episodes & 60-Sec Promo:

GDAE Podcast Episode 8 March 15, 2009
GDAE Podcast Episode 7 March 1, 2009
GDAE Podcast Episode 6 February 17, 2009
GDAE Podcast Episode 5 February 6, 2009
GDAE Podcast Episode 4 January 24, 2009
GDAE Podcast 60-Second Promo

gdaeman_scroll_small

March 26, 2009

Feeling Shafted by Obama

So, we hear Nobel Prize winning economist Paul Krugman tell us Obama has gone with a "zombie idea" ... a bad idea that won't die. Yes. Obama has bought into the original Bush administration idea of having the government take the bad assets off the banks books, granted in slightly more confusing formula that nobody understands. This places most people in the position of hearing the government say "Trust us." Comforting, eh?

Not only is the Bush era idea a zombie, the approach is creating zombie financial institutions... institutions that should be allowed to die, but keep living. Now, I'm not saying the too-big-to fail institutions should simply be allowed to die. We need to harvest their functional organs in the process, the organs that support pensions, university endowments, and services to the real economy (not the phony financial house-of-cards economy).

I predict we will eventually get to this alternative solution, but not after a lot of the inside crowd are able to extract more wealth from the system at our expense. This sure-to-fail approach will also place us at risk of what the Japanese know as their "lost decade."

The sooner we push Obama to the solution of "harvest and let die" the better we all will be. That solution also has the benefit that, as the organs are harvested and spun off as smaller, independent firms, we will find ourselves in a future without the too-big-to-fail zombie financial monopolies stalking the earth.

Psssst... Do Something

Sources:

Democracy Now, “The Zombie Ideas Have Won”–Paul Krugman on $1 Trillion Geithner Plan to Buy Toxic Bank Assets," March 23, 2009.

gdaeman_scroll_small

January 14, 2009

Korean Blogger Arrested?

Paul Krugman ponders why Team Obama's economic plan falls short of providing enough stimulus to reduce unemployment to "natural" levels. His calculations suggest, within three years the Obama plan will push unemployment down to about 7.3% (from an estimated peak of 8.7%.... "natural full employment" is pegged at 4.3%).

My Comment on the matter:

Maybe Team Obama is considering a two-objective problem in which the objectives conflict with each other:

1) Minimize Unemployment
2) Minimize Inflation

Perhaps they have a trade-off curve that shows a break-point when unemployment is at 7.5% with diminishing returns on driving down unemployment as inflation goes through the roof.

Elaboration: As US dollars are flooded into the world market they loose their value. The Fed has already pumped out way more than the Treasury Department's $700 billion for the financial bailout, with little fan fare. Word is that inflation is a certainty and will likely be taking off while the uninformed TV pundits are still lamenting the deflationary economic collapse.

BTW, has you heard about the popular Korean blogger who was arrested after he posted a piece on Korea moving away from US Treasuries? Here's a Digg article on it for you to help promote.

The word is that the mad rush from US Treasury bonds is going to take place fairly soon; there is already movement away, in part because there is legitimate concern the US cannot pay off the bonds, as mentioned recently in an opinion piece published by the Washington Post [1].

I'm thinking about 1) Taking a loan, the interest of which will be inflated away (that's effectively the US plan for getting out of debt), 2) Buying assets now (stocking up on the basics like toilet paper while it's still cheap), and 3) Gold.

Update: What happened to the blogger Park Dae-Sung?

The 31-year-old Park, better known as his pen name "Minerva,'' was arrested early this year on charges of circulating false rumors in cyberspace but was exonerated in April. The prosecutors appealed the court decision, though.

MORE from the Korea Times, September 28, 2009.

Sources:

1. Washington Post, DEFAULT OPTION: We're Borrowing Like Mad. Can the U.S. Pay It Back? January 11, 2009.

gdaeman_scroll_small

December 1, 2008

Thoughts as I Read and a Tear for Tanta

Obama is simply changing the name and location of Guantanamo Bay concentration camp. Preventive detention, that is, being held without charges, is one of the principle reasons the United States of America broke from Britain. We can't let Obama close Guantanamo, Cuba and open Guantanamo, USA. [Thanks to Chycho.com and Dahr Jamail].

Paul Krugman is saying we need real deficit spending to counter the great unraveling. Hmmm...? Didn't Krugman write a book of that title in 2003? It's not like we didn't see this coming.

He also sang his praises for gifted CalculatedRisk blogger Tanta, who passed away at age 47. I was strongly moved by the kind thoughts of Doris “Tanta” Dungey.

Can you believe that Obama considered CIA insider John Brennan, a close associate of George Tenet, to head the CIA? Brennan is leading Obama's transition review of intelligence agencies. Brennan supported warrantless wiretapping and kidnapping (extraordinary rendition) under Bush. At least Brennan was smart enough to decline the offer saying he didn't want his nomination to be a distraction.

And you should see the comments to this one:

Arundati Roy asks how we should resist

Which leads you to the question, What is "DroppingKnowledge"?


Psssst... Do Something

Sources:

gdaeman_scroll_small

November 26, 2008

First Rate Progressive Economic Voices

According to Paul Krugman:

the Obama administration’s new economics advisory board would seem like a very good place to give progressive economists a voice. There are a number of excellent people whom Obama might not want to put in line positions but would be very much worth bringing in to offer well-informed alternative views. At the risk of insulting those I forgot to mention, I would think immediately of James Galbraith, Larry Mishel, Dean Baker, Jared Bernstein.


Sources:

Paul Krugman's Blog entry, About that advisory board.

gdaeman_scroll_small

November 24, 2008

Shock Doctrine Antidote

Shock Doctrine capitalism is at work. Memory is an antidote. Paul Krugman has done well wielding the antidote in this blog entry.

Oh! Look! Congressman John Boehner has egg on his face. Perhaps he should be exposed for his attempted exploitation of the shock doctrine.

Psssst. Do Something!

Contact John Boehner: (202) 225-6205 or
(800) 582-1001.
More contacts

Contact the Media
. Explain to the editors why you think John Boehner has egg on his face.

gdaeman_scroll_small

November 17, 2008

Stop Blaming the Community Reinvestment Act

The right wing talking points, blathered by establishment media pundits, say that all those mortgages forced upon poor black people by the Community Reinvestment Act caused the bubble that caused the financial mess. Basically, it's all Bill Clinton's fault.

Well, Bill Clinton might share the blame as leader of the corporate wing of the Democratic Party, but it wasn't the Community Reinvestment Act that did it; that law was enacted in 1977. According to Aaron Pressman who blogs on Newsweek:

University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations.

Hard for CRA to be the majority of the subprime problem when it wasn't even a majority of the subprime market. CRA loans had more regulatory supervision, required recipients to receive counseling before and after receiving the loans, CRA Banks were more than twice as likely as other lenders to retain originated loans in their portfolio and the CRA loans were lower intrest rates making them easier to pay (less subject to defaults). This is what the Traiger & Hinckley Study finds (PDF file here).

Paul Krugman provides us the data to show it also wasn't Fannie and Freddie. As I've explained, the hyper profits being made on Wall Street by selling bonds backed by everything, including new mortgages, and all the derivatives of those bonds (basically things like insurance on the bonds, bets on future prices of the bonds and the insurance, and other crazy poker game gizzmoes), generated GREAT DEMAND on Wall Street for new mortgages (like Ross Perot's great sucking sound). When you build profits on a house of cards, you can predict the outcome.

The regulators in Washington let the bubble grow and should have predicted the outcome. They are truly to blame, because regulators should know something about a history rife with speculative booms and busts.

And we know something about insiders walking off with the windfall profits. Our mission, if we choose to accept it, is to claw back those profits from the swindlers.

Sources:

BusinessWeek blog, Community Reinvestment Act had nothing to do with subprime crisis, Aaron Pressman, September 29, 2008.

gdaeman_scroll_small

October 26, 2008

Back-of-the-Envolope Estimate of the Iceberg's Size

Many people have pondered the unspeakable, "I wonder if the $700 billion bailout is enough?" Even Sarah Palin, in a bit of twisted logic opposing a stimulus package, said the unspeakable:
This next one of the Democrat's, [which is] being proposed, should be very, very concerning to all Americans because to me it sends a message that $700 billion bailout, maybe that was just the tip of the iceberg. [1]

So, how big might the iceberg be? Well, economic Nobel laureate, Paul Krugman, gives us a sense based on some historical examples:

Japan’s bank bailout in 1998 was more than $500 billion, in an economy whose dollar GDP was only about 1/4 that of the United States today. Do the math. And the just-announced IMF loan to Iceland is $2.1 billion — that’s for a country with only 300,000 people. Both of these numbers seem to suggest that an eventual outlay of $2 trillion is in the realm of possibility.

Add that to the $3 trillion war that was supposed to cost $60 million, the rest funded by Iraqi oil revenues.

As I write this on Sunday night I'm reading that "Monday in Japan" finds the Nikkei 225 Stock Average has fallen to a 26-year low. Paul Krugman has another bit of insight to share...

Right now I feel like the guy who was told, “Cheer up — things could be worse!” So he cheered up, and sure enough, things got worse.

Worse? We turn again to Paul Krugman for the truly unspeakable in his blog entry dated October 10, 2008 entitled "Faustian Bargains."

"I’ve lately become a reader of Across the Curve, the blog of the bond trader John Jansen.... it’s really helpful to have reports from a “tone and feel of the markets” guy who can tell you what the numbers can’t.

And his opening comment this morning is a shocker. After describing some of the weird action in Treasuries, he says:

Is this the beginning of the end for the dollar and the Treasury market? Is this the first sign of the bursting of the bubble in Treasury securities? That market, in a sense, represents the ultimate bubble as it exists at the whim and caprice of foreign investors, who have as participants in a Faustian bargain, financed our war(s) and our lifestyle so generously over the last decade. Maybe even that bizarre construct is crashing about us as we speak.

Krugman closes, "Maybe I should be drinking something a bit more … calming .. than coffee right now."

Sources:

[1] Politico.com, "Palin allies report rising camp tension," Ben Smith, October 25, 2008.

Paul Krugman's Blog, The Conscience of a Liberal.

gdaeman_scroll_small

September 15, 2008

The Second Coming: A Statement on the Global Economy?

The Second Coming by W. B. Yeats

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spritus Mundi
Troubles my sight: somewhere in the sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?


1920

This poem popped into the head of economist Paul Krugman as he thought about the unraveling economy. Interpretations of William Butler Yeats' poem consider things like a failing empire. Sound familiar?

Sources:

Krugman Column that cites this poem, The Widening Gyre, October 26, 2008 (might require logging into the NY Times web page).

Image Credit: Ravensdawn

gdaeman_scroll_small

February 8, 2008

The Bigger They Are, The Harder They Fall

Paul Krugman zeros in on the how the "widely watched" indicator of trends in the service sector [70% of the economy] "has fallen off a cliff."

More specifically, the Institute for Supply Management reported that its new composite index measuring the health of the service sector was 44.6 in January. A reading above 50 indicates expansion, while below 50 indicates contraction. That was down from 54.4 in December. "This is an absolute collapse of this index," said Nigel Gault, chief U.S. economist at Global Insight... AKA "fallen off a cliff."

Krugman also leads us to a paper by Carmen Reinhart and Kenneth Rogoff - PDF for which there "has been a lot of buzz."

Reinhart and Rogoff explore the historic record for the "Big 5" bank-centered financial crises in industrialized nations. They cite "the five most catastrophic cases" to be episodes in Finland, Japan, Norway, Spain and Sweden.

They address some specifics the common refrain, "but this time it's different," only to make me more uncomfortable with the mainstream economists and pundits who use this refrain. Notworthy is the following:

This time, many analysts argued, the huge run-up in U.S. housing prices was not at all a bubble, but rather justified by financial innovation (including to sub-prime mortgages), as well as by the steady inflow of capital from Asia and petroleum exporters.

So, average Americans are at the mercy of a petro-dollar induced real estate price rise making homes unaffordable and pushing people into exotic mortgages? So, we're supposed to take comfort in the argument that the housing prices, bid up by foreign oil money, will remain high (the bubble won't burst)? Is that supposed to give me confidence in our economy and corporate globalization?

On to the prediction, or should I say comparison.

The figure below compares the US real estate bubble with the average of the "Big 5." Years are marked along the bottom of the graph, with "T" representing the year of the onset of the financial crisis. By that convention, "T-3" is three years prior to the crisis, and T+3 is three years after the onset of the crisis.

The left side of the axis a normalized index of housing prices, allowing comparison between different time periods and currencies. The authors not "the run-up in housing prices in the United States exceeds that of the “Big Five” ... by a lot. One can't help think of the saying, "the bigger they are, the harder they fall."



There's more to the paper, which I'll let you read. It's only 11 pages long and not too techincal.

Sources:

Paul Krugman, A Long Story, February 8, 2008.

Is the 2007 U.S. Sub-Prime Financial Crisis So Different? An International
Historical Comparison, Carmen Reinhart and Kenneth Rogoff, Draft, January 14, 2008. (Linked above).

US Service Sector Contracts [recession] in January
.

January 15, 2006

Revolutionary Power


The Introduction to Paul Krugman's book, "The Great Unraveling" calls for a paradigm shift in how we look at today's World. That's because his reality has been shaken, and he shares his spine chilling revelation with us all.

Krugman, a Princeton economist, was offered a gig to write an opinion column in the New York Times. International financial crises were one of his specialties. When he took the Op-Ed job in 1999, he thought he would "write about the vagaries of the new economy, the impacts of globalization, and bad policies of other countries."

"But as events unfolded, politics inevitably intruded." Krugman eventually found himself "speaking very uncomfortable truth to power." "I began pointing out the outrageous dishonesty of the Bush administration." Krugman's book chronicles his commentaries on an unsettling pattern of abuse of power by the Bush administration.

As Krugman's book was about to go to press, someone brought Henry Kissinger's 1957 doctoral dissertation to his attention. Having the experience of critiquing the Bush administration in detail for several years, Krugman read a passage in Kissinger's dissertation "that sent chills down [his] spine, because they seemed all too relevant to current events." The passage describes how the general population responds to a "revolutionary power" that is taking over "a heretofore stable diplomatic system":

Kissinger wrote, "Lulled by a period of stability which had seemed permanent, they find it nearly impossible to take at face value the assertion of the revolutionary power that it means to smash the existing framework. The defenders of the status quo therefore tend to begin by treating the revolutionary power as if its protestations were merely tactical; as if it really accepted the existing legitimacy but overstated its case for bargaining purposes; as if it were motivated by specific grievances to be assuaged by limited concessions. Those who warn against the danger in time are considered alarmist; those who counsel adaptation to circumstances are considered balanced and sane.... But it is the essence of a revolutionary power that it possesses the courage of its convictions, that it is willing, indeed eager, to push its principles to their ultimate conclusion."

It's a case of "The Big Lie."

Krugman gives an example, of this "eager" "conviction," in a response that Supreme Court Justice Antonin Scalia gave to a "student who asked how he felt making the Supreme Court decision that threw the election to Bush. Was it agonizing? Did Scalia worry about the consequences? No: "It was a wonderful feeling," he declared."

Krugman used to be a fairly mainstream thinker until his epiphany that we are presently facing a revolutionary power that intends to undermine the principles and values of the United States. Krugman outlines his "rules for reporting" under these circumstances when the rulers are not playing by the rules:

1. Don't assume that policy proposals make sense in terms of their stated goals.

2. Do some homework to discover the real goals.

3. Don't assume that the usual rules of politics apply.

4. Expect a revolutionary power to respond to criticism by attacking.

5. Don't think that there's a limit to a revolutionary power's objectives (If they nominate a Supreme Court Justice who opposed Roe v Wade, they intend to overturn Roe v Wade).

With Bush in mind, a former director of the Brazilian mint once told me, "It's easier to prevent a dictatorship than it is to remove a dictatorship." He spoke from experience.