Truth Breaks Out Unexpectedly About Economic Situation & Russ Baker Tells US the Truth About CNN's Fr*cked Up Snooze

Today for a mild deviation from the norm I'd like to share some of my favorite online sites and their current concerns (which we all share).

I'll be back tomorrow with more riveting reporting on the con artists gently (and not so) leading us down our well-trod primrose path.

For some devastating insight we have Paul Krugman, who calls a spade a spade, er, austerity  a country destroyer.

The Austerity Agenda

Paul Krugman

May 31, 2012 

Comments

“The boom, not the slump, is the right time for austerity.” So declared John Maynard Keynes 75 years ago, and he was right. Even if you have a long-run deficit problem — and who doesn’t? — slashing spending while the economy is deeply depressed is a self-defeating strategy, because it just deepens the depression.

So why is Britain doing exactly what it shouldn’t? Unlike the governments of, say, Spain or California, the British government can borrow freely, at historically low interest rates. So why is that government sharply reducing investment and eliminating hundreds of thousands of public-sector jobs, rather than waiting until the economy is stronger?

Over the past few days, I’ve posed that question to a number of supporters of the government of Prime Minister David Cameron, sometimes in private, sometimes on TV. And all these conversations followed the same arc: They began with a bad metaphor and ended with the revelation of ulterior motives.

The bad metaphor — which you’ve surely heard many times — equates the debt problems of a national economy with the debt problems of an individual family. A family that has run up too much debt, the story goes, must tighten its belt. So if Britain, as a whole, has run up too much debt — which it has, although it’s mostly private rather than public debt — shouldn’t it do the same? What’s wrong with this comparison?

The answer is that an economy is not like an indebted family. Our debt is mostly money we owe to each other; even more important, our income mostly comes from selling things to each other. Your spending is my income, and my spending is your income.

. . . So the austerity drive in Britain isn’t really about debt and deficits at all; it’s about using deficit panic as an excuse to dismantle social programs. And this is, of course, exactly the same thing that has been happening in America.

In fairness to Britain’s conservatives, they aren’t quite as crude as their American counterparts. They don’t rail against the evils of deficits in one breath, then demand huge tax cuts for the wealthy in the next (although the Cameron government has, in fact, significantly cut the top tax rate). And, in general, they seem less determined than America’s right to aid the rich and punish the poor. Still, the direction of policy is the same — and so is the fundamental insincerity of the calls for austerity.

The big question here is whether the evident failure of austerity to produce an economic recovery will lead to a “Plan B.” Maybe. But my guess is that even if such a plan is announced, it won’t amount to much. For economic recovery was never the point; the drive for austerity was about using the crisis, not solving it. And it still is.

Also, we have this gem on Dr. Krugman's relevance and one other usual suspect from the ever-reliable Robert Kuttner:

Our Most Widely Ignored Public Intellectuals

Robert Kuttner

June 4, 2012

Why don't those in power listen to economists Joseph Stiglitz and Paul Krugman?

A prophet, says the Bible, is not without honor save in his own country. As the most prestigious economic dissenters of this era, Joseph Stiglitz and Paul Krugman form a category of two: astonishingly prescient, widely read, and largely ignored by those in power.

Both won Nobel Prizes for their early virtuoso technical economic work. Stiglitz’s research, starting in the late 1960s, showed that markets do not follow the standard economic model of efficient competition, because a buyer or seller often has access to privileged information. Stiglitz enriched the well-established idea that transactions have hidden costs or benefits to the wider society. These “externalities,” he demonstrated, are not exceptional but pervasive. This insight applied particularly to the environment, where transactions are so often free to the polluter and costly to the planet.

Krugman, in the late 1970s, did pioneering research challenging the orthodox conception of international trade. Where most economists dating back to David Ricardo in 1817 had viewed trade patterns as based on the natural comparative advantage of nations, Krugman demonstrated that governments could create competitive advantages through strategic measures to develop export industries. Still, Krugman was more sanguine about markets then, and he distanced himself from those advocating that the U.S. embrace explicit industrial policies to promote manufacturing.

Both Stiglitz and Krugman are, in the somewhat overused term, public intellectuals. Both received their Nobels during the George W. Bush era for work done decades earlier, in part because the Swedish Nobel Committee wanted to empower critics of American conservatism. The Nobels gave them additional luster and made them harder to dismiss. With views on the edge of respectability, both are scrupulously careful to avoid error. 

Each still spends substantial time teaching, Krugman at Princeton and Stiglitz at Columbia. Krugman, of course, devotes most of his non-academic efforts to writing a twice-weekly column as well as a blog for The New York Times. Stiglitz’s main extracurricular activity is trying to change the world via globe-trotting meetings with national leaders, conferences and projects at an institute he founded at Columbia and in collaboration with other progressive think tanks, and work taken on for various agencies of the United Nations.

Of the two, Stiglitz has been the more unorthodox throughout his career. His radicalizing experience was working in the Clinton administration, where he regularly crossed swords with economic policy czar and later Treasury Secretary Robert Rubin and Rubin’s protégé Lawrence Summers on everything from environmental issues to banking regulation. He was appointed in 1993 to the Clinton Council of Economic Advisers, where a key patron and ally was Vice President Al Gore, who admired Stiglitz’s environmental work.

Elevated to council chair in 1995, Stiglitz in 1997 became chief economist of the World Bank, a position typically filled at the pleasure of the U.S. government. There, he did not hesitate to criticize U.S. policies on Third World debt and development. He had several public disagreements with Summers, and his position became untenable.

By contrast, Krugman’s only work in government was a sabbatical at the Council as a professional staffer in the Reagan years. In the mid-1990s, while still mainly a technical economist at MIT, Krugman concluded that Americans just didn’t understand economics. It annoyed him that non-economist crackpots of the right and left were gaining a hearing as serious thinkers. So he systematically set out to write for a broad audience. He proved to be good at it, contributing to The New York Times, The Washington Post, Harper’s, Slate, and The American Prospect as well as writing popular books.

When the Times offered Krugman a job as a staff columnist in 1999, the editors were expecting an articulate, moderately liberal economist expert at translating economic topics to a general readership. What they got was America’s pre-eminent progressive polemicist. Krugman’s radicalizing experience was George W. Bush. His choice not to pull punches has caused some detractors to criticize him as shrill.

In a 2005 farewell column, then–Times Public Editor Daniel Okrent wrote that Krugman has “the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults.” Okrent provided no documentation for the assertion. It’s not clear that a more circumspect Krugman would have more direct impact on national policy: He is marginalized for the content, not the tone.

Taken together, Stiglitz and Krugman occupy something like the indispensable role that John Maynard Keynes played in the period between 1919 and his death in 1946. Keynes’s sheer intellect and deftness at translating abstruse economics into wry English won him a wide readership. In a time like our own, when austerity was peddled as the cure for depression, his was the voice in the wilderness whose theoretical insights about the need for public outlays to maintain demand kept being vindicated by events.

Yet except for the accident of massive wartime deficit spending and a burst of practical influence late in life, when Keynes designed a new international monetary system for the postwar era, his ideas were purged of their radicalism by governments and economists alike. In recent decades, mainstream economics has turned his broad theories of the instability of capitalism into a cookbook on the occasional usefulness of deficits, while too many policymakers have reverted to a pre-Keynesian obsession with budget balance. 

In this orthodox climate, Stiglitz and Krugman are excluded much as Keynes was. The practical reforms that logically flow from their ideas would include drastically increasing regulation of finance, creating a medley of measures to promote equality, and massively increasing public spending. None of this has been on the table for a Democratic president since Lyndon Johnson.

In their new books, Krugman and Stiglitz both argue that the income distribution in America is outrageous, with economic as well as social consequences. Krugman, in End This Depression Now!, a primer on how Keynesian economics applies to today’s circumstances, offers a smart explanation of why the dynamics of this slump are reminiscent of the 1930s, with a downward spiral of depressed purchasing power reinforced by debt overhangs, especially in housing.

In fact, Krugman first warned of the risk of “the return of depression economics” in his 1999 book by that title, which dealt in part with Japan’s deflationary slump. Here he unpacks the central role of deregulated finance and exotic speculation in the current crash, drawing on the late economist Hyman Minsky’s work on the fragility of financial systems. Krugman argues that a moderate dose of inflation would be preferable to prolonged depression, and he’s right. 

Stiglitz, delivering on his title, The Price of Inequality, catalogs the economic inefficiencies caused by an extreme income distribution. The mega-rich can’t spend all of their income; depressed aggregate demand causes high unemployment; human potential is wasted; corporations rig competitive markets to reap monopoly profits; the immensely wealthy engage in speculation rather than productive investment.

As the political system mirrors the economy’s inequality, financial elites keep their thumbs on the scale of policy. The result, writes Stiglitz, is “our under-investment in the common good.”

Please read it all here.

From Sardonicky, one of blogtopia's best:

What's Wrong With These Pictures?

The cartoon lady in the top picture is black, unfairly paid.... and grinning her face off anyway.

The cartoon lady on the bottom is white, unfairly paid.... and somewhat upset.

From obviously the same White House artiste who brought us the cheesy "Life of Julia" series comes a brand new series of e-cards supposedly touting the Fair Pay Act. Rather than storming around the country demanding a national minimum wage as he did during his last campaign, Our Leader just wants all the people to send these cartoons to our friends and neighbors, in case they didn't know working women exist in a living hell and are either ecstatically happy about it or mildly chagrined, as the case (or race) may be.

What we really need is a conversation about the stagnating wages of both sexes, not to mention the fact that in not one of the 50 states does a minimum wage job pay a month's rent. Not one. Or how about the fact that unions are being destroyed at a dizzying clip, or that those touted "re-shored" manufacturing jobs at places like tax-evading, profit-bloated G.E. pay only half of what they did just a few years ago? But I digress.

In one of the e-cards, another cheerful white woman is shown in the express lane of the grocery store. We are told, "It's true, in more than 50% of American households, women's salaries help pay the bills, buy the groceries and provide for their families."

The implicit message, of course, is that Cheerful White Woman has a husband who also works, since she only "helps" to pay the bills. If she were the sole breadwinner, she would not be smiling in the supermarket. You can trust me on that.

I have to say, if the Romney campaign put out cartoon crap like this, buying into the mythology of the happy slave woman, there would be hell to pay, cries of racism. But since a black president's staff is putting out the distasteful propaganda, don't expect Rachel Maddow or Lawrence O'Donnell to gin up any manufactured outrage. They'll save the outrage for when the Romney campaign makes fun of the cartoons. Or when Republicans block the bill in Congress in another War on Women skirmish. But it will be win-win for the Democrats anyway -- they'll have another wedge issue to fund-raise off.

This latest White House propaganda campaign is obviously geared toward solidly middle-class, independent, Ann Romney-leaning women voters who don't have to worry about impending eviction or having enough money in a single crappy checking account to feed their kids, and who don't want to worry about the poor women who have no choice but to worry about this stuff. And it is also bending over backward to prevent the Republicans from bringing up that "angry black woman" malarkey again.
How in the world can an anti-sexism, post-racial politics P.R. campaign come across as so damned... sexist, and even racist? Once again, this White House will succeed in pleasing nobody and offending everybody.

Also, there is this quite timely but embarrassingly unpleasant (finally) truth about the late acknowledgement of the victims of drone strikes.

NY Times Bestows Humanity on Drone Victims

Could it be that the New York Times and Reuters and other news organizations are finally starting to heed some of the much-deserved criticism of their own uncritical coverage of the Obama drone attacks? For the most part, they have been willing propaganda tools of the government, referring to all the victims of the escalating assaults as "militants" - even in the face of evidence that hundreds of innocent men, women and children have been among those killed.

The Nation's Jeremy Scahill had the guts to go on TV yesterday and become the first "pundit" to call the Obama drone program in Yemen murder. His characterization provoked all the outrage we have come to expect from presidential apologists -- blaming the messenger for speaking the truth that our charismatic leader has declared himself judge, jury and executioner and is breaking the law. My hope is that Scahill is just among the first wave of a sea change in how the mainstream media will be covering this story. Could complicity be on the way out, and could some much-needed adversarial journalism be making a comeback?

An article in today's Times has at last referred to those killed in the latest drone strike in Waziristan as "people", and even implies that the escalating attacks by Obama are a campaign of terror to force the Pakistanis to reopen their supply routes to Afghanistan. The roads had been closed ever since an American strike killed two dozen Pakistani border soldiers and Obama refused to apologize.

I can't recommend reading Russ Baker's blog any  more wholeheartily.

Why We Can’t Stand Anyone CNN Likes

Russ Baker

Zakaria and Kissinger

I admit it. I am a pervert. I take perverse pleasure in reading people who are really, really, way off-base— presumably by accident—about practically everything. Thomas Friedman is a favorite. But it’s hard to top Fareed Zakaria, the Global Power Structure’s favorite “Person of Color (of some sort.)”

In this essay, headlined “What Were They Thinking,” Zakaria starts out by lauding George W. Bush.

Over the years, and long before the start of the Arab Spring, Bush has been consistent in pressing his freedom agenda in Africa and the Middle East — in fact, the world over.

It’s an optimistic conservatism that contrasts strongly with the pessimism of many other conservatives.

I mean, how many foolish notions can you jam into two sentences? Nobody over about the age of five really believes that Bush, happy to clamp down on freedom at home in the name of some unknowable “homeland security” — to say nothing of what he did to foreigners, in Iraq and Afghanistan — ever had a “freedom agenda.” Of course, I’ll buy the “optimistic conservatism” — who wouldn’t be optimistic when everything is handed to you?

But what really caught my eye was Zakaria’s disappointment at Bibi Netanyahu’s negativity toward Arab Spring, and, Zakaria’s especially pungent disappointment with…. the Saudis — for not embracing revolution in the Arab world.

Take for example Israel’s Prime Minister Benjamin Netanyahu, who last November called the Arab Spring an “Islamic, anti-Western, anti-liberal, anti-Israeli, undemocratic wave.” 

The irony is that in his deep suspicion about the Arab Spring, Bibi has a strange bedfellow — the Saudi monarchy.

It’s not often that you see Israel and Saudi Arabia agree on policy, but the two share a general fear of the upheavals in the Arab world.

Now, nobody could be surprised that Netanyahu would be wary of uprisings anywhere near his borders. Nor the Saudis. So why does Zakaria label them as “strange bedfellows” with the Israeli regime on this issue? If they’re strange bedfellows, then it’s only because their constant liaisons over the years have come about under cover of night.

The only “surprise” about Saudi opposition to Arab Spring uprisings is that they would oppose events that were at least partially fomented by the Saudis’ Western allies. The Saudis were plenty happy with the uprising against Qaddafi, and they’ve been backing the uprising in Syria—albeit in both cases for strategic, and even sectarian reasons. Everywhere else, things are looking pretty fine and dandy.

Zakaria understands none of this, seemingly.

The Saudis… recently hosted a conference to bolster the very opposite of modern democracy: monarchies. . . . .

What were the Saudis thinking? . . . .

At home, the Saudis dole out patronage to gain support. They have given tens of billions of dollars in assistance to the unemployed and they’ve increased salaries of soldiers and public servants. Gasoline costs some 50 cents a gallon there, an eighth of what Americans pay.

The Saudi story is, of course, more nuanced than a simple story of carrot and stick. The monarchy was popular; it was even before its latest round of largesse. And Saudi Arabia is perhaps unique in the Arab world in that the general population is more conservative than its leadership.

Zakaria knows that the Saudi monarchy is “popular” how? Those reliable Saudi public opinion polls, carried out by people in hangman’s outfits?  And as for the “patronage,” what about calling that bribery from a dictatorial clan that, increasingly desperate, will try anything…even, if absolutely necessary, giving a little of the oil revenues they steal back to the people.

What were the Saudis thinking? Well, what was Zakaria thinking? And is CNN ever thinking?

Speaking of which, here’s a news item of real interest: “CNN’s Primetime Ratings Sink to 20-Year Low.”

Maybe if CNN hired some real, actual journalists and turned them loose to do their thing, to find out what is actually going on and who is behind it, the cable network might get out of the ratings toilet. Who knows? Worth a try.

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