June 29, 2010 archive

The Third Depression & G20, The Shape Of Things To Come?

Paul Krugman outlines a serious warning in his NYT Op-Ed Sunday :

Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline – on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost – to the world economy and, above all, to the millions of lives blighted by the absence of jobs – will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world – most recently at last weekend’s deeply discouraging G-20 meeting – governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.

In the face of this grim picture, you might have expected policy makers to realize that they haven’t yet done enough to promote recovery. But no: over the last few months there has been a stunning resurgence of hard-money and balanced-budget orthodoxy.

It is [the] the victory of an orthodoxy that has little to do with rational analysis, whose main tenet is that imposing suffering on other people is how you show leadership in tough times. And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.

Socialism for the rich; austerity for the poor

  The Republican’s filibuster of the “tax extenders” bill will have severe economic consequences.

  Moody’s is predicting the loss of 200,000 jobs. Nomura Securities says it will knock 0.4% off of the GDP.

  A good 2 million unemployed families will have their last financial lifeline cut by the second week of July. The suffering of these families is about to increase many fold.

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 In midst of the outcry from the struggling working class, came this statement from Sen. Debbie Stabenow (D-Mich.):

 “It is very clear that the Republicans in the Senate want this economy to fail. They see that things are beginning to turn around…. In cynical political terms, it doesn’t serve them in terms of their election interests if things are beginning to turn around.”

 Now I like conspiracy theories more than most, maybe even too much, but I also recognize that describing a political opponent in 2-dimensional terms with evil intent is usually an indication of something missing from your theory.

  What is missing here is the concept of class interests.

The Week in Editorial Cartoons – Afghanistan’s Future Through the McChrystal Ball

Crossposted at Daily Kos



McChrystal in Rolling Stone by John Cole, Scranton Times-Tribune, Buy this cartoon

(what do Shel Silverstein and Dr. Hook have to do with this?  Read this)

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