Feeds:
Posts
Comments

Archive for the ‘Fauxiconman’ Category

Paul Krugman’s latest book End This Depression Now! is a master work of career self-immolation, and we should all be thankful. When a man who has previously been taken seriously sinks this low by his own hand, you have to feel that it’s Christmas early.

We all know by now that throughout the great orgy of federal debt pile-up that began under George Bush ($10 trillion deficit in 2008) and continued with malicious abandon by Barack Hussein Obama ($16 trillion and counting, in only three years!) Paul Krugman, former economist, has argued passionately against fiscal austerity and in favor of more spending.

This alone disqualifies him from ever being considered more than a clown from here on in — a court jester to amuse us before we turn our attention to adult things. But his latest book is his self-coup de grace.

Matthew Bishop, New York Bureau chief of the Economist, walked the tightrope of reviewing the book for the New York Times (and nearly fell off as he oscillated between the required flattery of the subject and his own better sense of economics) and gave us the highlights, starting with the obvious:

…he offers the classic Keynesian remedy of the government making up for the lack of private spending by splashing the cash around itself. Even now, Krugman argues, full employment could be restored to the United States in less than two years, given the political will to spend a lot of money. <source>

And what about all of the resulting debt?

Krugman suggests cavalierly that any extra government borrowing probably “won’t have to be paid off quickly, or indeed at all.”

There you have it: classic Liberal insanity in full display. It is insane because it acts as if the government has not spent a lot of money in the last four years. Does anyone actually believe this to be true? Krugman does, for one: he would say that Obama has spent only a little and not nearly enough. It is also insane because it is full-on fantasy world: let’s borrow into oblivion because we’ll never have to pay back the lenders. If you own U.S. Treasuries, how does that statement make you feel? I guess you never knew that your loan to the government was really a charitable contribution.

Loves inflation like a clown loves looking ridiculous

But here is where Krugman ends his career: he argues in favor of inflation as a general remedy to all of our ills, because, you see, it will inflate away all those messy debt obligations.

One of the advantages of inflation cited by Krugman is that it reduces the real value of all that depression-inducing debt, like the mortgages people use to buy homes. On today’s current low inflation trend, Krugman anticipates prices being 8 percent higher in 2017 than today. But, he says, “if we could manage 4 or 5 percent inflation over that stretch, so that prices were 25 percent higher, the real value of mortgage debt would be substantially lower than it looks on current prospect — and the economy would therefore be substantially farther along the road to sustained recovery.”

If the malignancy of what he is saying is not completely obvious, let me help by bringing back a great article (seriously) written by another Liberal, Michael Kinsley, which I reviewed in my essay Tip Our Hats to Michael Kinsley?

Fears inflation, as he should, and as should we all.

Here is Kinsley on the nefarious idea of having the federal government destroy the value of our currency, and therefore all of America’s stored wealth — yours, mine, and eveyone’s — through inflation:

Compared with raising taxes or cutting spending, just letting inflation do the dirty work sounds easy. It will be a terrible temptation, and Obama’s historic reputation (not to mention the welfare of the nation) will depend on whether he succumbs.

Plain language is refreshing: letting inflation do the dirty work, except that what Kinsley (and nearly everyone) knows is that inflation is the assassin that kills its client as well as its target. Bishop invokes the same theme by acknowledging that Krugman’s siren song can be quite intoxicating to politicians who lack the iron will and patriotism of Scott Walker, governor of Wisconsin:

…politicians will conclude that borrowing and inflating the debt away is a lot more palatable than cutting public spending and/or raising taxes.

After 20 column inches of quasi-support for Krugman, Bishop finally starts to save himself from guilt by association with some bits of lucidity, mainly by reminding the reader of that adult concept called consequences (yes, Paul, actions we take do have consequences):

Inflation imposes real costs, for instance on retired baby boomers reliant on fixed dollar annuities and on foreign investors in government bonds. How those bondholders would respond is anyone’s guess, though they might shift away from the dollar or euro to other currencies or to alternatives like gold. Inflation would certainly increase the risk of the dollar losing its status as the world’s reserve currency, with potentially serious political consequences like competitive devaluations, accusations of currency manipulation, trade wars and maybe worse…

Even here, Bishop treads more lightly than he should have: inflation is the most cruel tax of all taxes because it eats away the fruits of our labor stretching all the way back to the first dollars we each have ever earned: all savings get eaten away (not just baby-boomer savings, Mr. Bishop) and our years of hard work are rendered worthless by government bureaucrats who took the easy way out, which is to say the way that Krugman is urging and pleading them to take.

What Kinsley identified as an admittedly paranoid vision (The Fed and Obama may conspire to inflate our way out of the debt) has become an overt, blow-the-trumpet policy recommendation by Paul Krugman, former economist and professional clown.

At this point, Paul, you have consigned yourself to the category of laughingstock, and your trumpet-playing days are over. From now on, you get to use a kazoo.

Entertain us, clown.

Krugman the Clown, Former economist, with his kazoo

Advertisements

Read Full Post »

Paul Krugman, known as fauxiconman on this blog (since he is a fake economist and also a con man), just wrote a piece about Europe in which he seeks to indulge the Liberal fantasy that welfare statism is not responsible for the ongoing Greek tragedy (as if!!).

He feebly attempts to raise his game by keeping the reader in suspense about why Europe is truly in crisis — having dispelled the notion (in his own mind, but no one else’s) that European welfare statism and its resulting deficits are to blame. His punchline? The European monetary union, and the EURO currency, are to blame.

So what does ail Europe? The truth is that the story is mostly monetary. By introducing a single currency without the institutions needed to make that currency work, Europe effectively reinvented the defects of the gold standard — defects that played a major role in causing and perpetuating the Great Depression. <source>

Ohhhhhhh, it all makes sense now.

But no, it doesn’t, for the simple reason that Greece was bankrupt BEFORE it joined the European Union. Let that sink in, Paul: Greece’s gargantuan welfare state, where government pensioners retired young and masses of the population lived off of government payrolls forevermore, had already bankrupted the country. Yes, fauxiconman, Greece joined the monetary union — lied its way in, in fact — after its bloated welfare state had collapsed in on itself, though it successfully and willfully obscured this fact from the Germans and others (that is the definition of fraud, folks).

Indeed, Krugman ignores fiscal indebtedness completely and totally.

In his world, the amount of government borrowing is of no consequence, and in this he achieves the pinnacle of Liberal insanity (borrow! borrow more!! borrow even more!!! And when you can’t pay it back….SO WHAT!!).

In Paul’s magic world, countries such as Greece would be just fine if only they were allowed to devalue their own currency, thereby boosting exports and reviving the economy.

If the peripheral nations still had their own currencies, they could and would use devaluation to quickly restore competitiveness. 

Ohhhh, all Greece needs to do to restore its competitiveness is to devalue its currency! PRESTO and it’s done — they’re competitive again, just like that!

This man calls himself an economist…….

But not so fast, con man: you need to explain how Greece bankrupted itself before it joined the EURO currency, which according to you is the heart of the problem; tell us: how did Greece bankrupt itself BEFORE joining the EURO?

I know you can’t answer because it would mean the total failure of your published nonsense, so I will answer for you. Greece bankrupted itself before joining the EURO by pursuing Liberal social policies that discouraged productivity and encouraged public looting of the government treasury via public sector union benefits that vastly exceeded productivity.

But Krugman is not satisfied in just distorting reality beyond recognition. No, he wants to sever the link between the Greek crisis and warnings of a similar downfall for the United States. ‘Don’t worry’, he constantly advises.

The next time you hear people invoking the European example to demand that we destroy our social safety net or slash spending in the face of a deeply depressed economy, here’s what you need to know: they have no idea what they’re talking about.

This man actually believes we should spend spend spend, without limit.

So let’s check in with some American reality and see how that kind of thinking is working out. San Jose California is once again nearly bankrupt, and lo and behold the cause is very similar to the Greek example. Behold:

San Jose Mayor Chuck Reed, a Democrat, told Vanity Fair that “Our police and firefighters will earn more in retirement than they did when they were working.” He continued, “It’s staggering. When did we go from giving people sick leave to letting them accumulate it and cash it in for hundreds of thousands of dollars when they are done working? There’s a corruption here. It’s not just a financial corruption. It’s a corruption of the attitude of public service.” <source>

Here is a chart that puts things in rather easy perspective <source>:

From the statistics you can see that tax increases are dwarfed by employee cost increases, and yet the number of employees has decreased despite all that extra money. The residents of San Jose have had to make do with less:

Over the past 10 years, San José residents have seen significant reductions in core city services. To close its ongoing budget deficits, the City has been forced to:

  • Shrink our police force by hundreds of officers, including cuts in patrol, special op’s & investigative services.
  • Eliminate four engine companies and one truck company in the fire department, while also implementing flexible brownouts.
  • Cut branch library hours down from 6-7 days/week to only 4 days/week.
  • Reduce hours at “hub” community centers and seek alternative operators for all 43 satellite/neighborhood centers.
  • Greatly reduce funding for street paving (the # of residential and arterial streets sealed are down 73% and 61%, respectively).
  • Eliminate funding for sidewalk repairs and street tree services (which are now the responsibility of property owners).
  • Delay opening newly-built libraries, community centers and the police substation.
  • Significantly reduce funding for park maintenance, code enforcement, traffic calming, park rangers, crime and gang prevention programs, and youth/senior services. <source>

What you see in the above list is increasing austerity by a city that is required to balance its budget. In the real world, such as the one this Mayor (Democrat) is living in, there are finite resources, and this means making hard choices and ultimately receiving less, not more, from government.

Paul Krugman would have us believe that Democrat Chuck Reed “doesn’t know what he’s talking about”. He would also have us believe that governments have unlimited resources (magic!) and can borrow into infinity (magic!), and that we never have to face any spending tradeoffs (Liberal Utopia!).

Really? Which man do you think has a grasp of reality, Krugman, or Chuck Reed?

It’s not even close.

Read Full Post »

I call Paul Krugman “Fauxiconman” for obvious reasons (he’s a fake economist, more media creation than actual member of the profession, and he’s a con artist, though perhaps among the worst in history because he fools only those afflicted with Liberal fantasies of utopia — and how hard can that be?).

He wrote a sentence in a recent article critiquing the Republican response to the Manchurian’s State of the Union that made me literally laugh out loud, though he did not mean to be funny:

Although Apple is now America’s biggest corporation as measured by market value, it employs only 43,000 people in the United States, a tenth as many as General Motors employed when it was the largest American firm. <source>

That phrase: “…employs only 43,000 people…” really hit my funny bone. What a fool this man is. Forty three thousand people is a big number no matter how you look at it or what you compare it to.

But to compare it to General Motors circa 1960? News flash for Paul: the era of big manufacturing of cars in the USA is in long-term secular decline, no doubt aided and abetted by repeated union shakedowns of corporate treasuries over the decades, and to chase after it while ignoring other growth sectors is worse than stupid: it is cruel.

No surprises here.

Read Full Post »

There are many stories lately of increasingly bankrupt states and how they are “kicking the can” a few more times down the road rather than dealing responsibly with the looming debt bomb, but this description of Illinois  in the New York Times takes the cake:

Few workers with neglected 401(k) retirement accounts would risk taking out second mortgages to invest in stocks, gambling that the investment gains would be enough to build bigger nest eggs and repay the loans. But that is just what Illinois, which has been failing to make the required annual payments to its pension funds for years, is doing. It borrowed $10 billion in 2003 and used the money to invest in its pension funds. The recession sent their investment returns below their target, but the state must repay the bonds, with interest. The solution? Illinois sold an additional $3.5 billion worth of pension bonds this year and is planning to borrow $3.7 billion more for its pension funds.

Borrowing money to play the stock market in hopes of a miracle….woops.

We are in late-stage empire right now, and it’s downright scary. Good thing we have Nobel-winning economist in Paul Krugman advising us to stay in the casino and hit the China ATM to play another round at the tables (“Drinks on the House!” says Paul), and great thing we have an America-loving President with loads of executive leadership experience to see us through the crisis.

 

Read Full Post »

Earlier this year there was an unheard of reversal in treasury spreads (the extra yield required on corporate bonds versus treasury bonds), when, at certain points, a few corporate bonds (P&G for example) yielded less than U.S. treasuries (a corporation considered less risky than our fine government…). This was the biggest possible indictment of runaway deficits, cumulatively approaching 100% of GDP this year, putting us near the top of the ladder of shame (see this chart).

Econo-gimp and others have pointed to the recent rally in U.S. treasuries as a sign that the bond market has stopped worrying about the titanic U.S. cumulative debt (and learned to love the bomb) and, in an act of obamagoguery, the cabal is using it to buttress arguments in favor of more socialist spending binge, deficits be damned.

But the truth will keep us free: the resurgent popularity of U.S. treasuries since April has been mostly a function of a flight to Superpower during the Greek debt crisis and related fracturing of the EURO currency and loss of confidence in the EU and global economy, not some “well considered” endorsement of our fiscal nightmare. In other words: we are very lucky, not responsible or smart. By letting themselves be duped by Greek socialists, the Europeans blew a historic opportunity to unseat the U.S. dollar as a reserve currency and stirred fears of global economic turmoil, which drove purchases of U.S. treasuries despite our own massive deficits. This is not an outcome we should take false comfort in. It is built on shifting sand.

But Krugman won’t stop hawking this con until we are China’s bitch. Perhaps he should spend more time helping the Manchurian and Congress mitigate the impending massive tax increases that will hit the United States like rolling thunder in 2011 (as the Bush tax cuts roll off). Oh, wait – I temporarily forgot the depths of his depravity: he loves tax increases even more than he fears a slowdown in government spending on entitlements. The horror.

Read Full Post »

Fauxiconman, otherwise known as Paul Krugman, hasn’t given up his hopes of bigger and crazier deficit spending. In today’s piece, entitled “Lost Decade Looming”, he tries to assure readers that the USA is nothing like Greece and offers evidence of this by highlighting treasury yields, which have fallen in recent weeks after a run-up two months ago amidst concerns of America’s runaway deficit spending.

As I have noted before, fauxiconman loves to write articles for the layman in which he presents half, or a third, of the picture and conveniently leaves out the more relevant data. In this case, he left out an analysis of the yield on treasuries versus the yield on high grade corporate bonds (the “spread“), which is the more relevant statistic.

But that’s nothing new, and I’m far more disgusted by a different section of his nonsense. After noting the recent U.S. stock market decline and bond market rally he says:

What’s behind this new pessimism? It partly reflects the troubles in Europe, which have less to do with government debt than you’ve heard; the real problem is that by creating the euro, Europe’s leaders imposed a single currency on economies that weren’t ready for such a move.

Europe’s leaders “imposed a single currency” on countries like Greece? Is he joking? Boy is this guy a hack. Krugman’s heart always seems to bleed for the wrong party (a Liberal hallmark, falling in love with the leech while having contempt for the host). In this case he offers sappy misplaced compassion for Greece, which he apparently sees as the unwitting victim of “Europe’s leaders”.

This is beyond wrong, it is psychotic delusion. As everyone knows, Greece WANTED to join the European monetary union SO BADLY that it LIED ITS WAY IN by claiming their 2009 federal deficit was within the 3% guideline set by the “European leaders” who know all too well that member countries must have fiscal discipline in order for the union to work for all members. Once it completed its infiltration into the union, Greece promptly blew up financially and revealed its colossal, willful fraud: the actual deficit was over 13% – when you lie, lie BIG! – and then moved straight-away into demanding a massive bailout. Responsible members of the EU were faced with the shit sandwich choice of (a) bailing out the lying Greeks, or (b) refusing to help them and imperiling the Euro currency to the detriment of the rest of Europe. Who is the victim and who is the abuser here?

Krugman exposes the fractured and broken lens of his mind when he characterizes Greece as the victim instead of the abuser in the above fact pattern, and any fans of his have no choice but to face this reality.

Read Full Post »

Some of the nice people who support universal healthcare actually don’t realize that the public option is a trojan horse designed to destroy private insurance in a two-step process.  Just as they naively believe that an extra 40 million people jammed into the system will not destroy the current level of care, they also naively believe Liberal politicians who dress up a socialist agenda in free-market clothing (“…the government plan will compete with private plans…”).  There are some powerful videos on the web in which the charade is uncloaked in all its ugliness.  Here is fauxiconman with a candid articulation of the plan to nationalize healthcare:

Heritage has a nice collection of many more, shall we say, moments of candor, here.

Read Full Post »

Older Posts »