Krugman: Obama Seems to Be Following the "Expanding by Contracting" Theory

[amborin]

I Ruined The Economy And All I Got Were These Lousy Tax Cuts

That’s the title of a report by David Dayen.

Key takeaway:

Republicans theorize that a deficit deal would increase confidence in the business sector and financial markets,
spurring economic growth all by itself. But there’s ample reason to suspect this ”expanding by contracting” theory.

Sadly, the Obama Administration appears to have swallowed it. Last week, several White House officials, including
Director of the National Economic Council Gene Sperling, stressed deficit reduction as the primary component
of their economic-growth strategy, and repeatedly claimed that reducing the deficit would generate “confidence.”

snip

Mike Konczal adds,

Someone noted that with Goolsbee leaving all of the big names surrounding economic policy are
no longer economists but lawyers and people associated with Wall Street. And it is also telling
that, with the Larry Summers editorial from the weekend, all of the economists you’d recognize
who have left the administration are calling for more stimulus, while it is those there now calling for confidence.

It’s worth noting, too, that it’s not even good politics. Having made the “pivot” from jobs to deficits
because they thought it was what voters wanted to see, they’ll now get beat up over … not focusing on jobs.

http://krugman.blogs.nytimes.com/

[w4rma]

1. Sad. (nt)

[ProSense]

2. Interesting

"Someone noted that with Goolsbee leaving all of the big names surrounding economic policy are no longer economists but lawyers and people associated with Wall Street. And it is also telling that, with the Larry Summers editorial from the weekend, all of the economists you?d recognize who have left the administration are calling for more stimulus, while it is those there now calling for confidence."

Summers called for more stimulus last year and also in a farewll speech.

The culprits are Republicans and Krugman appears to know that given the title of the piece.

Unfortunately, Summers' call for addiitional stimulus was met with screams of "asshole."

Wonder what's Krugman's take on the latest jobs initiative?

[madinmaryland]

3. There is a jobs initiative?

[MannyGoldstein]

5. Yes!

But not jobs for Americans. There are three new "free" trade treaties that Obama is negotiating.

[dionysus]

6. you're right, manny. obama wants us all to be paupers. i'll never vote dem again.

:eyes:

[MannyGoldstein]

10. I have no evidence that Obama wants us to be paupers,

nor do I have evidence that he wants us to prosper.

But we do have plenty of evidence that Obama wants the wealthiest to prosper, and will fight hard to make it happen.

[MannyGoldstein]

4. Krugman called Summers an asshole for wanting additional stimulus?

If Krugman didn't call him an asshole, than who did?

Summers is, in fact, an asshole: but calling for more stimulus, even if way too late, is a positive thing.

As to the Republicans... well, one question at a time.

[madinmaryland]

8. That post has to be the most bizarre thing I have read in a long time.

Krugman has been saying for at least two years that we needed a huge stimulus to kick start the economy and cutting government spending is the WORST thing we could do.

[amborin]

11. from the get go, K lamented the paltry size of the original stimulus, and argued it should have been

much larger; he's also called repeatedly for additional stimulus spending

Summers is an asshole, and an advocate of reaganomics; perhaps his recent call for another stimulus package reflects
the growing certainty that we're headed for a double dip, if not worse

[madinmaryland]

13. Isn't that what I just said, minus the comment about Summers?

:wtf:

Summers is an ass. Krugman has been correct about what is happening for at least 10 years.

[madinmaryland]

7. Krugman has been saying for at least two years that we need a stimulus larger than

the small one in 2009.

Are you saying that Krugman is opposed to a stimulus???

:wtf:

[girl gone mad]

14. Summers "stimulus" involved giving more money to corporations.

He was rightly called out for being the neoliberal piece of shit that he is.

[Name removed]

9. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Karmadillo]

12. K&R

nt