And last night the Gym some ass-hat two machines down from me not only had Fox News On, but had it turned UP. (Usually the TV's are muted and just show subtitles.) So I got to listen to a marvelously fact-free response from the four members of the Fox Panel who HAVE NOT won Nobel Prizes in Economics. Devoid of rational response, or evidence to support their so called “miracle,” they report to calling [Krugman's analysis] the “Alien Invasion” theory suggesting either that Krugman credits illegal immigration ALONE for ALL of Texas’ growth, or that he was suggesting that little green men, perhaps from Mars, were somehow to thank. And of course, the average Fox viewer is more likely to hear that explanation and think, “Wow, that Krugman sure is a nut!” rather than, “Wow, these Fox peoples sure are stupid!” Because remember:
A LIBERAL WILL TELL YOU WHY YOUR ARGUMENT IS WRONG.
A CONSERVATIVE WILL TELL YOU WHY YOUR ARGUMENT IS LIBERAL.
(As an aside, between how pissed off I was getting listening to Fox and the Trainer playing the Greatest Hits of the Rocky movies with one his clients, I did have a really good workout!)
(Another aside - I couldn't find a transcript of the Fox segment, but while looking for one, I found almost the next best thing: This Idiot's Blog. Check it out, although preferably not right after you've eaten! We got a future Hall of Shamer here, for sure.
Well, anyway, I’m all for debunking “Miracles” as anyone who understands my Humanist and Skeptical Philosophy already knows. And I heard an EXCELLENT story on NPR this morning that started where Krugman left off and ran with it, showing even more reasons why the “Texas Miracle” is unlikely to apply to the broader economy. You can find a transcript and audio HERE, but here are some of the highlights:
1) Population Growth: Texas has had an influx of immigrants, both legal and illegal, yes, but also many people moving there from other States. And, as Mister Krugman pointed out, it’s not like EVERY STATE’S population can grow based on people moving there from OTHER STATES. So, either it IS (or will have to be) an actual “Alien Invasion,” as Fox sarcastically put it, or it won’t work. Nice work there, Fox.
2) Public Sector growth has been every bit as robust as Private Sector growth. Liberals would be neither surprised nor bothered by this, but remember: He’s promising small Government. Apparently what’s been good for Texas will NOT in fact be good for the rest of the Country – at least according to him and his Tea-Backers.
3) The overwhelming majority of the private sector jobs have paid minimum-wage or less. Governor Perry, please, despite what your Tea-Backer and Supply-Side buddies will tell you, we don’t just want jobs. We want GOOD PAYING JOBS. Filling the economy with part-time, minimum wage jobs (or worse) is NOT what we’re looking for!
4) Despite all that Public Sector Growth – that the Right isn’t even prescribing? Texas ranks 49th in per pupil public school spending, and 50th – tied with Mississ-fucking-ssippi (or as my father-in-law calls it: The states that keep West Virginia from being LAST in anything) in the percentage of adults that go without health insurance.
5) Texas residence still go without many of the services that residents of every other state enjoy. Remember folks, because this is his recipe for success: Sub-Minimum Wage Jobs, and no Public Services. THAT’s the Texas “Miracle.”
6) Perry's “Enterprise Fund,” which gives taxpayer money to companies to come to, or expand in, Texas. *ugh* OK, putting aside that this is little more than Rick Perry giving tax-payer money to the company’s that back his campaign (alone enough to warrant his removal from office) this might sound a bit familiar. In one of the rare instance in which I agree with the tea-baggers, another word for this is… duh-dah-daaaaaah: STIMULUS. (You know: That thing they want to GET RID OF so we can have MORE JOBS?) (Idiots.) And in one of those rare instances that I agree with Rick Perry, depending on how this is administered this can be a good thing. Of course, I’d prefer public works projects to strait corporate giveaways, but, in a rare instance where Paul Krugman and Rick Perry would agree, the economic effect is largely the same: IT CREATES JOBS. But, of course, this will likely be off the table when it comes to the rest of the country. The Tea Party Republican Retards have no intention of spending any money to fix anything. (At least, not while Obama's in office.)
And finally, the one that PISSES ME OFF THE MOST…
7) What kind of companies thrive in Texas? What are the biggest employers there, the ones driving most of that jobs growth? Well…
1: Gas prices go up =>the economy slows.
2: Slow economy => no jobs => less demand => gas prices drop.
3: Low gas prices mean people have more money, as they are no longer being strangled by the oil companies. (Thank you, Mister Keyenes!)
4: More money => more demand => economy starts to improve.
5: Economy improves, demand goes up => GAS PRICES GO UP.
6: GOTO 1
And it doesn’t make a difference whether the oil is foreign or not. (Shell is a Dutch company. They still employ a lot of Texan-Americans.) The problem is that oil and gas (energy) prices will ALWAYS act as drag on the economy. They will ALWAYS be a negatively correlated indicator. Until we break their stranglehold we will not be able to escape this pattern. It’s like a tax on the rest of the economy, but one who’s rate actually goes up to the point that it kills growth as soon as there IS any. And nowhere has this kick-in-the-balls been more evident than in my home state of Michigan. High gas prices killed the SUV. That’s great for the environment, don’t get me wrong. It needed to happen, and it was inevitable that big-Auto would need to transition off of them. But the gas prices have gone back down since then! They slowed the economy and were really what kicked off the mortgage crisis. (Not the kindling, of course, just the spark.) And the two brought the Big Three automakers to the brink of bankruptcy. And we haven’t had a robust recovery – because the Republicans and big oil won’t LTE US!
Nice going.
Oh yeah… and as for the whole Low-Tax, low Regulation business environment?
8) Texas job growth has not kept pace with its population growth: They have higher unemployment that the high-tax, highly regulated, robust public service providing states of New York and Massachusetts. (You remember Massachusetts, right? The state with near-universal health care coverage, compared to Texas’ rank of dead last?)
So THAT’S his recipe folks:
• Shitty, Low paying jobs
• No public services
• Little to no health insurance
• Underfunded schools
• High gas prices
You know what? If THAT shit works? I just might start believing in “miracles!”
Nice work Eddie, but you missed one thing that I heard, I believe on NPR, having to do with Perry's "Enterprise Initiative." Part of the initiative is devoted to using tax breaks to poach companies and jobs from surrounding states. Obviously, that wouldn't work for the country at large.
ReplyDeleteBTW, thanks for the "Boom!" on MMFA earlier. All is forgiven. (heh, heh)
Oh, my God! How did I miss that?! LOL. Of course!
ReplyDeleteYou know... All and all, I think it's really indicative of how they thynk. They focus entirely on RESULTS, and not a lick on the PROCESS that brought them about. (Good or bad.)
Economy's Bad + Obama's the Prez = Obama's policies suck.
(Never mind that "his" policies are all Republican, or the the Recession really satrted under Bush, or that the recent Republican grandstanding has caused all of our recent problems. Blah, blah, blah...)
Likwise:
TEXAS added Jobs + Perry's the Governor = Rick Perry's policies must be GOOD.
Never mind [everything I said] and [the point you added] OR that this has been going on since before even GOVENROR BUSH'S days, in fact going all the way back to the days of Governor Ann Richards (-D). They won't tell you (or remember) that one either. So what if it won't work on a National Level and is even proving to be unsustainable and damaging at the State Level? (Or that it was done with GOV'T SPENDING which these people claim doesn't work?!)
Who cares? Perry added jobs. Obama didn't. So you suck, we win.
It's no wonder these people are so easily led.
I really don't care about Perry, the snake. I'm more interested in what Krugman said about creating a fake war to stimulate the economy.
ReplyDeleteWhat do you think of the counter argument to Krugman's? Peter Schiff wrote and article a year ago explaining why a fake war would be a terrible way to grow an economy.
http://www.europac.net/commentaries/why_not_another_world_war
"But to repeat the impact of World War II today would require a truly massive effort. Replicating the six-fold increase in the federal budget that was seen in the early 1940s would result in a nearly $20 trillion budget today. That equates to $67,000 for every man, woman, and child in the country. Surely, the tremendous GDP growth created by such spending would make short work of the so-called Great Recession.
The big question is how to pay for it. To a degree that will surprise many, the US funded its World War II effort largely by raising taxes and tapping into Americans' personal savings. Both of those avenues are nowhere near as promising today as they were in 1941.
Current tax burdens are now much higher than they were before the War, so raising taxes today would be much more difficult. The "Victory Tax" of 1942 sharply raised income tax rates and allowed, for the first time in our nation's history, taxes to be withheld directly from paychecks. The hikes were originally intended to be temporary but have, of course, far outlasted their purpose. It would be unlikely that Americans would accept higher taxes today to fund a real war, let alone a pretend one.
That leaves savings, which was the War's primary source of funding. During the War, Americans purchased approximately $186 billion worth of war bonds, accounting for nearly three quarters of total federal spending from 1941-1945. Today, we don't have the savings to pay for our current spending, let alone any significant expansions."
"Yes, US production increased during the Second World War, but very little of that was of use to anyone but soldiers. Consumers can't use a bomber to take a family vacation.
The goal of an economy is to raise living standards. During the War, as productive output was diverted to the front, consumer goods were rationed back home and living standards fell. While it's easy to see the numerical results of wartime spending, it is much harder to see the civilian cutbacks that enabled it.
The truth is that we cannot spend our way out of our current crisis, no matter how great a spectacle we create. Even if we spent on infrastructure rather than war, we would still have no means to fund it, and there would still be no guarantee that the economy would grow as a result."
What do you think?
It's an interesting question, and I could reply "in theory," but I'd have a hard time defending KRUGMAN without a link to the article in question. Schiff never mentions Krugman by name in his article, and I have a hard time believing this is something that Krugman has actually ADVOCATED for, or done more than simply use it as an academic example. In fact: I'm calling BULLSHIT on it now, strait up. And I couldn't find anything about it on Google, so if you can't provide me a link to the Krugman piece, I can't speak to it specifically. (OTOH, if you HAVE a link, I would absolutely be interested in reading it!)
ReplyDeleteIn an academic sense? WWII DID get us out of the great depression. (We'll leave any discussion of the New Deal off the table for now.) But that doesn't mean we make wars for economic growth. (I'll leave that to the Bush's and Cheney's of the world and continue to criticize them for it.)
But as for the idea that we're taxed so heavily now?
Puh-lease!
Not even close. Compared to BEFORE the War? Yeah, fine, we're taxed pretty heavily. But in the years following the war the top-tier tax bracket was 90%. And it remained as high 70% until about 1980. And even in the first SIX YEARS of the Ronald W. Reagan administration it remained at 50%. Today it's at what? 35%? Seems to me wa have some room to maneuver there, and I've demonstrated in previous posts the effect that going back to those first Reagan tables (adjusted for inflation, of course) would have on the vast majortiy of Americans. (Not much - and the wealthy could afford the difference.) Here's one example: http://eddiecabot.blogspot.com/2011/02/party-of-fiscal-responsibility.html
Do I think we need more spending? In the short term? HELL YES. Once unemployment is down and growth is back on track? HELL NO. THAT'S the time to worry about the deficit. (IOW - WTF was Bush doing about the deficit and the debt during the 5 or 6 GOOD years he had? NOTHING. He was deficit spending to give the rich more money. That's it!) The Right only cares about deficts NOW becuase they know Obama will be blamed for the (completely unecessary) pain of "fixing" them.
And in the meantime, how should we pay for these thing? Simple: Just go back to Ronald W. Reagan's FIRST tax table, and just go easier on the poor and middle class.
Once we're actually PAYING for everything? And have a real sense of what it's REALLY costing us? (For greater or lesser?) THEN we can have some intelligent conversations about what to cut. Until then, no one really has a dog in teh fight. And once we ARE paying for it all and paying down the debt? Should we find that we can live with taxes as they are, and 90-some% of the country is doing just fine (as are the rich, even thought they'll still whine like little bitches)? Then why change a damn thing?
Personally I think that's the greater reason that the Right keeps puching this anti-tax rhetoric. Not only is it about the money, but when the public sees what absolutely minimal impact taxing the top 2%, 1% 0.1% etc... has? The Right will be rendered permanently irrelevant. They'll never win an economic argument again.
Anonymous... Did you mean the "fake alien invasion" thing? That Krugman said would boost defense spending similar to before WWII? I didn't think so, because that was recent (April 2011) where schiff's pice was a year old (July 2010) but that's all I could find.
ReplyDeleteYes, I meant the fake alien invasion thing. Schiff's piece was a year old and it was not in response to Krugman's piece. I just wanted to get your opinion on the premise that WWII got the USA out of the great depression and war being a good way to stimulate an economy.
ReplyDeleteI agree taxes were higher back then and we actually RAISED taxes to pay for wars (I bet if we did that back in 2003 NO ONE would have supported the invasion of Iraq, but I digress).
Bush really messed up the country, by blowing the surplus of the Clinton years and digging us into the hole of Iraq and Afghanistan. We are in big trouble right now and I'm not so sure more spending can get us out of it. The Fed can only keep interest rates near zero for so long. I think we are just prolonging a large market correction and the longer we prolong it, the worse it will be.
But then again, it is just one man's opinion on a blog who is not a Nobel winning economist.
One thing we can agree on: Bush really F*cked us.
Well, I DON'T think war is a GOOD way to boost an economy. I think it is an EFFECTIVE way, in some respects, depending on the nature of the economy. (It would be better for ours than for, say, some African Nation's, for example.) But (as you point out) that doesn't make it GOOD.
ReplyDeleteThe question in my mind, however is not WHETHER WWII ended the Great Depression, but rather WHY. And the answer? FULL EMPLOYMENT. (After 10 strait years of close to 20% GLOBAL unemployemtnt.) That's it. Finished goods were short and rationed, yes, but mass production back then wasn't what it is now, and War was also much more labor intensive then it is now. (So more resources needed to be consumed at the front lines. Not the case so much anymore: Drones and missles don't need to eat! LOL)
Would it WORK? Well, yeah, probably. But that doesn't make it RIGHT. I think Krugman has a POINT but I think he speaking more out of frustration at Right Wing obstruction than anything else. (IOW: Defense spending might be ONE THING they wouldn't filibuster / obstruct.) I don't see him advocating for War, just getting a bit desperate to find some idea that would fix things that the right wouldn't reflexively throw up on.