Paul Krugman Mumbles about Misguided Monetary Mentalities and Offers Other Hokums about our Currency

Abstract: Paul Krugman of the New York Times monotonously and tautologically restrokes the eternal quest for more government and higher taxes using any artifice. The goal here is twofold: [1] to encourage the growth of government for any reason and [2] to raise taxes until capitalism is crushed and the splendor of socialism, or worse, is restored. He now counsels that our falling dollar, despised and shunned by more and more foreign banks is a good thing. This will help our export business he says while not mentioning the high costs of importing goods, services and oil from the rest of the world. He selectively rummages through odd bits of history and throws in a few stale caveats from 1924 while ignoring the disastrous consequences of just printing money and monetizing the debt with abandon. As a supposed economist, he apparently never studied Argentina or Germany or Zimbabwe. He argues against a stable currency as being some weird out of date concept and then wanders off into the swamps with an incoherent dissertation on “maintaining the gold value of one’s currency,” a discredited theory of Keynes from the 20s. He hints that the demise of the dollar unfairly reflects on Obama.

We can search the Internet or the standard paper literature for examples of successful propaganda accomplishments that have ultimately crushed societies and learn much about the general unawareness of the populace. Blessed with a host of imbecilities and other cognitive deficiencies, the good citizens of our country act as if they reside in some imaginary polis and blissfully wander about in a swamp of confusion attracted by the bright lights of phony promises and the noisy urgings of political leaders. They hunger for promises. Great leaders, alert to this frame of mind deficiency,  mount their sturdy kumquat boxes and deliver soul-stirring speeches with promises of wealth, peace and society; the pacified polis cheers. We can offer some praise  about the sturdy constitutions of such victims since when they are beaten, conscripted and fleeced they are observed to be seen crawling back to their beloved flim-flam artists for more promises with renewed sincerity and invigorated hope.  No matter if they were cheated, beaten or starved or even kept in some cold and distant gulag they want to believe and this craving to be herded like sheep fuels the modern propagandist who may be masquerading as a political leader, an expert or advisor to such, or to an actual government official, or just some common loser with a Ponzi scheme.

The proof statements in such political promises most frequently revolve around the advice of an ‘expert’ and these ethereal beings abound in clusters around their political benefactors who provide them with praise, jobs and phony research or study grants subsidized from the aforementioned victims. It seems you can extract everything from a True Believer and force them to the very brink of hunger and insanity and then suddenly offer them just one more ‘promise’ and they will gladly expire or yield all their possessions while being swelled with a sense of gratitude and contentment. Thus, the culturing and posturing of the ‘expert’ is essential to modern politics and propaganda is their soothing but lethal weapon. They offer tailored and trimmed promises.

For today’s example of how experts thrive in certain narrow political or cognitive channels we study the teachings and counsel of one Paul Krugman[1][2][3][4] as his works provide the political and thus economic  impetus for effortlessly  fleecing the cognitively disnimble. Such is the process provided, free of course, by the New York Times that is known affectionately as the Walter Duranty Papers[5] in honor of their Pulitzer Prize winner wh0se portrait proudly hangs on the wall in New York City to inspire all leftist journalists. The only thing better might be sniffing lotus blossoms or snorting coke at political meetings or union parties.

Propaganda at its finest:

“One lesson from the Great Depression is that you should never underestimate the destructive power of bad[6] ideas. And some of the bad ideas that helped cause the Depression have, alas, proved all too durable: in modified form, they continue to influence economic debate today.”[7]--Misguided Monetary Mentalities By Paul Krugman Op-Ed Columnist Published: October 11, 2009 [Emphasis is mine in all quotes.]

We must avoid bad ideas.

Implicit in this interesting bit of circular logic is the assumption that our hero can tell bad ideas from the good. Saddled with the mandate that he only must proffer ideas that increase debt or big government, we can now probe the logic and substance of his unwritten words[8] and extract them for analysis. Paraphrasing what  the Old Red Lady taught us,[9] you must read what is not written to get the message--but look deeper: [Quoting Dowd: “But, fair or not, what I heard was an unspoken word in the air: You lie, boy!”[10]]. Properly constructed, an essay based on negative evidence and circular logic is unassailable but we are now equipped to sift out the truth thanks to Maureen Dowd.[11]

“What ideas am I talking about?”-- Misguided Monetary Mentalities By Paul Krugman

We wonder if you know.

Then, 1000 years of leftist economics:

“The economic historian Peter Temin has argued that a key cause of the Depression was what he calls the “gold-standard mentality.” By this he means not just belief in the sacred importance of maintaining the gold value of one’s currency, but a set of associated attitudes: obsessive fear of inflation even in the face of deflation; opposition to easy credit, even when the economy desperately needs it, on the grounds that it would be somehow corrupting; assertions that even if the government can create jobs it shouldn’t, because this would only be an “artificial” recovery.”-- Misguided Monetary Mentalities By Paul Krugman

The chief slice of propaganda here is that our expert has relied on some other expert who studied the Great Depression and came to the conclusion that big government is always best. This is a good idea. Printing money is a good idea we learn although Germany is not mentioned here.[12]

The gold standard acted as a reference for currencies such that governments might only print more money at their peril and be exposed. Thus, Keynesianism allows the government to steal wealth by financial stratagems from the tax payers.  This theory was recently amplified by the noble Warren Buffett when he slipped and said this:

“Every country that has denominated its debt in its own currency and has found itself with uncomfortable amounts of debt relative to the rest of the world, in the end they inflate,” Buffett explains. That becomes a tax on everybody that has fixed dollar investments.”[13]--Buffett Sees Massive Inflation to Handle Staggering Debt. Monday, May 4, 2009 By Dan Weil [Emphasis is mine in all quotes]

Buffett even offers a way for politicians to sneak around the inflation problems and get elected:

“Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes. In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”[14]-- Greenback Effect By Warren E. Buffett

Hide behind inflation! What a deal! What a New Deal!

“America isn’t about to go back on the gold standard. But a modern version of the gold standard mentality is nonetheless exerting a growing influence on our economic discourse.”-- Misguided Monetary Mentalities By Paul Krugman

“Consider first the current uproar over the declining international value of the dollar.”-- Misguided Monetary Mentalities By Paul Krugman

Here we go! We now can expect a cerebral display of logic and history and such that tells us it is sound and proper to just print money and let our currency flutter into the financial latrines—a good idea in his lexicon we learn. Take a look at the US dollar Index chart here http://www.bloomberg.com/apps/quote?ticker=DXY:IND. The rest of the world sees the dollar morphing into so much crap and is selling dollars and buying gold. Thus Krugman must refute this quest for monetary stability and sooth us all with the virtues of spending ourselves into some kind of condition that is crushing California.[15] That is called being progressive.

The dollar is sinking and everybody knows it and foreign governments are shifting away from the dollar in search of a better reserve currency.[16]

But, our hero must now muster and cluster the proper elements of history and lecture from his own brand of buncoeconomics[17] and instruct us in the proper path forward, which means more spending and bigger government. Those are good ideas. He has apparently only read A Tract on Monetary Reform in 1923 by Keynes and he parrots the stale anti-gold Keynesian slogans.[18] He seems not to recognize any other economics. People who routinely get insulin shock treatments seem to forget the recent past and only remember distant memories while retaining the ability to read, play the piano and work the levers of propaganda machines for profit.

 The shocker!!

“The truth is that the falling dollar is good news. For one thing, it’s mainly the result of rising confidence: the dollar rose at the height of the financial crisis as panicked investors sought safe haven in America, and it’s falling again now that the fear is subsiding. And a lower dollar is good for U.S. exporters, helping us make the transition away from huge trade deficits to a more sustainable international position.”-- Misguided Monetary Mentalities By Paul Krugman

Right over the edge of the cliff. The sinking dollar is a good idea! A strong dollar is a bad idea. Did you get it??

“But if you get your opinions from, say, The Wall Street Journal’s editorial page, you’re told that the falling dollar is a terrible thing, a sign that the world is losing faith in America (and especially, of course, in President Obama).”-- Misguided Monetary Mentalities By Paul Krugman

The defense of the indefensible. Faith in Obama is a good idea; faith in the dollar is a bad idea. Here we have some neophyte in charge who is an ideological racist[19][20], a liar[21] and a Marxian advocate or stooge[22] who promised he would not raise taxes for those below $250,000 income and would reverse this horrible unemployment and then nationalized two auto companies and advocates printing 9 trillion dollars in the near term and we have lost faith in this guy Obama??

This is Krugman’s best krugmaniacal artifice to date.

“After all, the unemployment rate is a horrifying 9.8 percent and still rising, while inflation is running well below the Fed’s long-term target. This suggests that the Fed should be in no hurry to tighten — in fact, standard policy rules of thumb suggest that interest rates should be left on hold for the next two years or more, or until the unemployment rate has fallen to around 7 percent.”-- Misguided Monetary Mentalities By Paul Krugman

There is no mention of the effects of wildly printing money here even though many states [Germany, Argentina, Brazile and our probably model Zimbabwe] have never survived when they monetized the debt as we are doing. They were rescued by foreign loans in all cases and we wonder who will rescue us? China?? There is also no mention of the frantic efforts by the Fed to fight deflation[23], which is threatening to collapse our society. This financial crisis was caused by low interest rates and the improper use of credit and the treacherous policy of ‘affordable housing’ to bribe the low class to vote for the left that has destroyed trillions of dollars. This lunatic Keynes influenced FDR and inspired his New Deal. Hitler, FDR, Churchill and others like Stalin adored Keynes as they now had a certified scenario to spend and spend and each play the role of a galactic geopolitical colossus who could move mountains of wealth and national boundaries around to suit them.

Where is the discussion on job creation by the stimulus program? Where is the discussion on the costs of this phony and massive attempt to nationalize our health care system and the trillions that that will cost us and our children? How do we handle 12 trillion dollars of debt? What is the true cost of Cap and Trade and EcoNazism?

Does Krugman tell us that the” current uproar over the declining international value of the dollar” comes from our trading partners and allies world wide? No, he implies that this is some kind of right-wing plot to denigrate Obama and force the poor into starvation or worse.  He offers no discussion on when to apply the financial brakes and pull back from hyperinflation if we keep on blindly printing money. He still probably wants to nationalize the banks.

He sums up with:

“And it’s crucial that we don’t let this mentality guide policy. We do seem to have avoided a second Great Depression. But giving in to a modern version of our grandfathers’ prejudices would be a very good way to ensure the next worst thing: a prolonged era of sluggish growth and very high unemployment.”-- Misguided Monetary Mentalities By Paul Krugman

We have avoided nothing of the sort. The first depression was caused by a debt-driven deflationary spiral and we are clearly in the second one in 75 years. The Fed pours trillions [7.36 trillion dollars to be exact[24]] into the banks and other unknown institutions and the money supply M2 doesn’t budge. Money is frozen in the banks. The money is swarming into some Black Hole and hiding there. It is being hoarded and held in reserve for the ugly times we face in the near future. We are in a classic debt-driven deflationary spiral[25] and still going down. The housing credit bubble is still bursting with toxic assets steadily becoming more toxic[26] and we now await the commercial real estate bubble and then consumer credit. Our biggest banks are now just hollow zombies attached to the Fed’s balance sheet flush with imaginary money flowing in iridescent tubes to their capital accounts so they can act out the pretense that they are solvent. Krugman says nothing about spending, the national debt, and the effect of a weak dollar on oil imports and on everything else we must buy from China.

A sobering analysis from Ambrose Evans-Pritchard writing on our new natural gas supply:

“Energy bulls gambling that the world economy will soon resume its bubble trajectory need to remember two facts: industrial production over the last year is still down 19pc in Japan, 18pc in Italy, 17pc in Germany, 15pc in Canada, 13pc in France and Russia, 11pc in the US and the UK and 10pc in Brazil. A 12pc rise in China does not offset this.”[27]-- Energy crisis is postponed as new gas rescues the world By Ambrose Evans-Pritchard Published: 5:47PM BST 11 Oct 2009 [Emphasis is mine in all quotes.]

This is not good news for the greens and the rest of the bad news is for all of us: Only China is growing. And Krugman and his green chums want to tax energy and make industrial production sink even lower in the US.  Krugman chucks chum and chopped liver for the far left as usual and contributes nothing to the issues at hand except to offer more bad ideas. He is a two trick pony: Big government and bigger government, a bad and then a worse idea.

rycK

Comments: ryckki@gmail.com