Krugman of the NYT Wonders about Pain? He Should Celebrate the Inflation that will Bankrupt us All.

The New York Times—aka the Walter Duranty Papers [1] has an all-encompassing and circuitous track record of apologizing for any form of big government as long as it involves huge spending and high taxes. Today, the Times’ famous noneconomics economist Paul Krugman [2][3][4]grinds away with some bizarre mental gymnastics about pain while ignoring some basics in economics.

I[5] have included an executive abstract of this blog that condenses the facts and themes.

Abstract of this blog: Krugman essays around the central issue of inflation and recovery of our economy. He mumbles about ‘recovery’ and suggests that traditional market forces will increase demand for autos, housing and durable goods. Unfortunately, he weasels around the hot topics of the Fed printing money [quantitative easing] and suggests, again, that we need to nationalize the banks.  Like Jack and the Bean Stalk, he seems to think that “the seeds of eventual recovery are already being planted.” He ignores the massive Obama spending and numerous bailouts and terminal business plans of GM and other companies.  This essay confirms the fact that his work is a joke and only political.  Reading this fluff was a pain.

In today’s exciting episode Times’ igNoble Leechette[6][7][8][9] starts with this:

““All participants anticipated that unemployment would remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks; a few indicated that more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates of output growth and unemployment and by an appropriate rate of inflation.[10]””—Quote from the proceeding so the Federal Reserve Open Market Committee. In Krugman’s Who’ll Stop the Pain?  by Paul Krugman Op-Ed Columnist Published: February 19, 2009  [Emphasis is mine in all quotes.][All quotes are from this link in this essay today unless otherwise indicated.]

The appropriate rate of inflation was offered in his first paragraph as 2%

Gee, Paul, Mr. Noble person—duh—what can you suggest we do other than ignore financial responsibility and just spend and spend and print more money?? He then admits he does not know the answer to the question:

“So people at the Fed are troubled by the same question I’ve been obsessing on lately: What’s supposed to end this slump? No doubt this, too, shall pass — but how, and when?”

I thought this bozo, who parades around as some kind of tax and spend expert always willing to give a soggy and tearful anti-tax- cut intermezzo with hoops and cymbals and a little hopping, might have offered his brilliant solution to O’Bozo months ago? Not so as we read his confession. But first, we need to take some blame directed at Ronald Reagan:

“Your father’s recession was something like the severe downturn of 1981-1982. That recession was, in effect, a deliberate creation of the Federal Reserve, which raised interest rates to as much as 17 percent in an effort to control runaway inflation. Once the Fed decided that we had suffered enough, it relented, and the economy quickly bounced back.”

This utterance is a backdoor, low-grade attempt to blame the economy on Reagan rather than the moron and Islamo-Fascist stooge and lap dog Peanut Jimmy who hired Paul Volker [now on O’Bozo’s staff?? Duh??] to ramp down the horrendous inflation cause by Peanut’s phony spending and social programs. Krugman cannot stand the pressure in his truss if he might criticize a left-liberal Democrat like The Peanut. He also fails to mention that Volker’s toxic cigar smoke cauterized the wall paper in the Oval Office and forgets to mention that we need to tear out all the walls and sanitize the place from this offense against nature.  We wonder where O’Bozo smokes his joints and if he uses his cigars like Slick Willie did.

The little problem of containing inflation at 2% [annually or daily?] is omitted by our Great Economic Thinker in this essay.  He surges onward with his mindless prattle:

“Your grandfather’s recession, on the other hand, was something like the Great Depression, which happened in spite of the Fed’s efforts, not because of them. When a stock market bubble and a credit boom collapsed, bringing down much of the banking system with them, the Fed tried to revive the economy with low interest rates — but even rates barely above zero weren’t low enough to end a prolonged era of high unemployment.”-- Krugman

The technical term Paul is groping for here is the ‘zero bound,’ and signals the impossibility of having interest rates below zero.  He then queries with a thought that should have been in most of his biweekly Neo-Marxist  op-eds in the New York Slimes. [11] Inflation and its control thereof are actually addressed in Econ 101 text books and interest rate changes are always used to control raging inflation. The fact that our esteemed igNoble Leechette[12][13][14][15] wanders away from this parameter is suspicious. We wonder if he ever read the pertinent chapter on this matter. After ignoring the O’Bozo stimulus he queries:

“What, then, will actually end the slump?”

Duh!?? What’s my name?

“So will our slump go on forever? No. In fact, the seeds of eventual recovery are already being planted.”

He should have been talking about our seeds of destruction as the Fed appears to be printing money, known humorously as ‘quantitative easing.’ He then mumbles about housing starts, auto sales and durable goods and the fact that demand will rise for these. This sounds wonderful until we look at Cuba where housing starts have been zero for 5 decades and the latest model car is a 54 Chevy and that food, electricity, milk and most other things are rationed.  Where was their recovery based on increased demands for these items?

“Let’s be clear: the Obama administration’s policy initiatives will help in this difficult period — especially if the administration bites the bullet and takes over weak banks. But still I wonder: Who’ll stop the pain?”

He has no clue! He cannot mention taxes or bloated government payrolls or stupid spending like rescuing the Marsh Mouse in the Queerdom of San Francisco and cannot bear to tell us that the Fed is printing money and our inflation rate will probably go ballistic when the banks start lending. His solution is to nationalize the banks?

Gee, Uncle Wizard, could you explain how that works for us?? Also, you forgot to clue us in on bank financial stability if we continue to subsidize deadbeats and illegal aliens who refuse to make mortgage payments. What happens to all the loan loses? Oh! The nationalized banks get to write that off? Gee, that works swell.  The taxpayers can pick up the bill! Sure.

Grades: C- for theory and D- for wondering off topic for this wreckage.

If the Fed prints one trillion dollars that will multiply to 10 trillion dollars and our M2 money supply bill be 18 trillion and this is called massive inflation. If, as I suspect, the Fed is willing to print 5 trillion dollar using the theory of ‘quantitative easing’ then I am a bit concerned as this might generate 50 trillion in monies. So a big block of cheese at the deli would cost $8 per pound before the easing process and $58 dollars for the same purchase after we print some money? We are all gonna get rich!! This is the new Zimbabwe Theory for Economic Paradise where all citizens are billionaires!! Wonderful!!

What sleaze disguised as economics.  Our Leechett fails to mention California[16], New York, New Jersey and probably Michigan and certainly Euro-Peons[17] for mimicking this lunacy[18] and spending their way into financial oblivion. Their economies are going into the toilet. Inflation will bury us so we wonder where the Fed got this 2% rate from. Was this number assigned by the White House?

One last thing: we paid $451 bln on the national debt last year so could you tell us how much more we will have to pay if we add $5 trillion to the debt to raise it above our GNP to $18 trillion and then have to raise interest rates to control inflation? Gee, that one sucks—does it not? If the rates soar to 10-12% would our debt service be greater than our budget? How about interest rates rising to a level of 20% to stop the inflation? I think Russia is now at 15%. Their ruble is going bust. They are a really neat socialist country that knows how to treat people and not inflict pain. They are so progressive.

Such crap.

rycK

Comments: ryckki@gmail.com