Paul Krugman: What the Centrists Have Wrought

[G_j]

http://www.commondreams.org/view/2009/02/08-8


Published on Sunday, February 8, 2009 by the New York Times

What the Centrists Have Wrought
by Paul Krugman

I’m still working on the numbers, but I’ve gotten a fair number of requests for comment on the Senate version of the stimulus.

The short answer: to appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts.

According to the CBO’s estimates, we’re facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion. Others, such as Goldman Sachs, are even more pessimistic. So the original $800 billion plan was too small, especially because a substantial share consisted of tax cuts that probably would have added little to demand. The plan should have been at least 50% larger.

Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. In particular, aid to state governments, which are in desperate straits, is both fast — because it prevents spending cuts rather than having to start up new projects — and effective, because it would in fact be spent; plus state and local governments are cutting back on essentials, so the social value of this spending would be high. But in the name of mighty centrism, $40 billion of that aid has been cut out.

My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years.

The real question now is whether Obama will be able to come back for more once it’s clear that the plan is way inadequate. My guess is no. This is really, really bad.

© 2009 New York Times

[Vanje]

1. Nobel Prize winning K&R

[OwnedByFerrets]

2. K and R

[DaLittle Kitty]

63. The "Idiots" ARE ... Still In Charge! God Help Us All! K&R!

Praise Paul Krugman! Fuck The CORPORATISTS!:puke: :nuke:

[Owl]

3. K&R

[proud2BlibKansan]

4. As usual, Krugman is smarter than most of our elected reps.

[Zhade]

29. Err, he's not an elected rep...

NT!

[truedelphi]

34. Who says that Krugman is an elected rep?

If I say you or I are smarter than George Bush, do I have to point out neither of us is President?

[rpannier]

41. He never said he was

He said he was smarter than most of our elected reps.

Which means some of our elected reps are close to being as smart or smarter

[Zhade]

45. Aw, fuck. I read it as "he's one of our smartest elected reps".

Man, I feel dumb!

Sorry guys.

[Zhade]

46. Sorry, I misread your post. D'oh!

NT!

[anonymous171]

5. I hope Krugman regrets blasting the original stimulus.

He's a good economist but has no political sense.

[ooglymoogly]

22. Maybe you should work on your own sense of timing

Krugman has his down well enough. The original burning Bush "stimulus" was a freak; Money delivered in unmarked bills in brown paper bags to pug cronies and crooks who will remain anonymous. This Stimulus is, except for the tax cuts, really meant to help folks and this country; The first was just plain theft.

[jwirr]

6. K & R

[DemReadingDU]

7. This is really, really bad.

The article in OP came from Krugman's blog on Saturday
http://krugman.blogs.nytimes.com/2009/02/07/what-the-centrists-have-wrought/


More, From Friday's blog
2/6/09 What all but 5 Republicans support

Paul Krugman: Thirty-six out of 41 Republican Senators voted for the proposed DeMint amendment to the stimulus bill — a massive package of permanent tax cuts that would create a huge hole in the budget, while doing very little to help the economy.
There isn’t much room for bipartisanship when 87.8% of the other party is totally irresponsible.
http://krugman.blogs.nytimes.com/2009/02/06/what-all-but-5-republicans-support/


Another Friday entry from Krugman
2/6/09 Appeasing the centrists

Atrios is right, though I’d put it a bit differently: centrism is a pose rather than a philosophy. And to support that pose, the centrists are demanding $100 billion in cuts in the economic stimulus plan — not because they have any coherent argument saying that the plan is $100 billion too big, not because they can identify $100 billion of stuff that should not be done, but in order to be able to say that they forced Obama to move to the center.

Which raises the obvious question: shouldn’t Obama have made a much bigger plan, say $1.3 trillion, his opening gambit? If he had, he could have conceded to the centrists by cutting it to $1.2 trillion, and still have had a plan with a good chance of really controlling this slump. Instead he made preemptive concessions, only to find the centrists demanding another pound of flesh as proof of their centrist power.
http://krugman.blogs.nytimes.com/2009/02/06/appeasing-the-centrists/

[TacticalPeek]

13. "preemptive concessions"

That's what has bugged me about Obama all the way back to his 04 convention speech.

That is a total dead-end politically. You wind up in a corner where only Repukes can help you.

Enough of the goddam preemptive concessions.

:grr:

[G_j]

15. thanks! n/t

[inna]

18. thanks for the links; Krugman rocks. nt

[BrklynLiberal]

53. Scary...Very scary

[Bjorn Against]

8. There is nothing "moderate" about centrists, these people have gotten a free ride for too long.

[Individualist]

9. K&R

[leftofthedial]

10. Mission Accomplished!

DLC and repukes!

Make sure that nasty middle class will never come back!

Slave labor marches on!

Freedom Is Slavery! War Is Peace! Ignorance Is Strength!

[mdmc]

27. kick

[4dsc]

11. When will the DEBT kill our economy

While I support the job recovery bill, I am wondering when congress and the president are going to turn their attention to the situation involving the run up of government debt of the past year.. That alone will make sure we don't witness any economic stimulus for many years to come..

[Greyhound]

59. Never. The global economy is based on debt and as long as we

are rich, and the world therefore believes we will pay, debt will not kill our economy.

Once we have no market, we will be poor and nobody will believe we can pay, then our economy can be killed. The the corporations can step in with the assets looted over the last century as the only game in town, but that comes later.

[barb162]

12. Krugman is right, unfortunately, he's terribly right on this.

We're screwed.

[peacetalksforall]

14. If only - if only those who lose their jobs were all the centrists.

If only - if only Obama recruited Krugman rather than Summers Rahm Rubin

[SammyWinstonJack]

66. !

:thumbsup:

[applegrove]

16. Like the GOP wants this depression/recession to go on as long as possible. That is psychopathic.

[glitch]

73. What do you bet the credit freeze lasts just long enough for Jeb to promise a thaw? nt

[applegrove]

75. That would be my worst fear at this point.

[B o d i]

17. K&R&U&G&M&A&N

Please, President Obama, listen to Paul Krugman, not the idiots who got us into this mess in the first place.

[cascadiance]

19. The new Republicans are no longer for "states rights". They're for "state PLIGHTS"!

or "state BLIGHTS". Take your pick!

Break em all in the name to get the money into the wealthy's pockets!

They'll figure out a new marketing plan to sell "trickle down" economics later...

[Postman]

20. So if this particular plan doesn't work Obama will just shrug and say "I tried"???

He'll have to come back for more.

[Greyhound]

60. They won't give it to him, they will point to this failure as the excuse to stop him.

He exerts great power now due to his phenomenal election success and that threatens others that hold power. If/Once he fails, that power is lost and the old structures remain. He will be in a position of asking them if they will allow the next one and what and how much it can be, and most importantly, who they will help.

[ooglymoogly]

21. The pugs and their soapbox the media can't stand the truth

and will use every tool they've got to keep it suppressed and covered over with the concrete of massive propaganda....that includes the DLC who are just Pukes with a D after their names because they can't get elected as pukes.

[johan helge]

23. 600,000 reasons for the centrists to be proud of how moderate they are (nt)

[Mithreal]

25. 10,000 people/day being foreclosed? - Senator Kerry

I am using the number Senator Kerry used, but that's another mark of pride.

Compare that 600,000 jobs number to the number of people losing homes. What is that, 60 days worth of foreclosures.

This is a mess that even the Dems are slow to face the epic proportions.

600,000 jobs is huge but the old middle class is no longer represented in this country.

[johan helge]

31. "The hottest places in hell

are reserved for those, who in the time of greatest moral conflict, remain neutral." John F. Kennedy

[Number23]

24. Interesting that he blames "centrists" or his interpretation of "centrists"

and not the Republicans who are the ones to blame. This is conservative philosophy that the nation is up against, not centrist.

[RaleighNCDUer]

74. But the republicans are NOT to blame. They are in the vast minority

right now, and would have NO power at all if not for the centrists.

The right is not afraid to be partisan - why should we be?

[MisterP]

78. well, there's really no such THING as centrist ideology:

it's just picking and choosing a few issues from each side--mostly on the conservative side
it's like trying to set an oven at "median temperature": it's entirely dependent on other variables

[aggiesal]

26. Why is Krugman not in the administration? n/t

[Zhade]

28. "Centrists" (aka rightwingers in the rest of the world) are cowardly quislings.

NT!

[ShortnFiery]

39. Yes, and there are "right-wingers" = "Corporate-lovers" on both sides of the aisle. n/t

[Myrina]

30. Jeez oh Pizza this is getting ugly. Why isn't Obama listening to him?

:shrug: The only 2 people I'd trust to work on this bailout, if I were the Prez, would be Dave Obey and Paul Krugman.

Ok, and maybe Robert Reich.

Why is Obama letting the asswads in the House and Senate fuck the American people over again? :spank:

[truedelphi]

35. I approve of your choices

I'd add Clemmons, Kucinich, Issa, and Maxine Waters to the mix. They have had to examine the overall structure of the Ponzi scheme that is our economy since October 1st or so, and they really have learned a lot very quickly.

[Joe Fields]

48. AND, if I may add, this is the giantest of giant fuck-overs of the American people.

This is doomed to fail, and it is doomed to pass. It will pass, that is my fear. Goddammit, they need to scrap the entire son of a bitch and start over again. Of course that isn't going to happen. And once again the reich wing mouthpieces on cable news and talk radio out bullied us, and the out bullied everyone in D.C. They should be very fucking proud of themselves, may they all somehow choke on their diamond and ruby encrusted flag lapel pins, the fascist assholes!

[Myrina]

77. I agree - this turd needs to be flushed.

Prez. Obama needs to veto it over and over and over until they send him the bill he and his economists originally wanted.

[BrklynLiberal]

54. Good question...and excellent personnel.

[Township75]

32. Centrists? What about blaming a party that has a nice majority?

Seriously, why should the Dems have to negotiate with any Repub? We have a majority and a bunch of balls-less people that can't run a party and pass legislation without the repubs taking charge.

One thing is for sure...when the repubs had a smaller majority, they still pushed through there legislation with no compromise.

[BrklynLiberal]

55. Sure makes me wonder....

Why can't the Dems steamroll right over them like they did to the Dems for 8 years?

[unkachuck]

33. K&R....n/t

[BREMPRO]

36. i'm convinced now that the republicans want this stimulus to FAIL

I believe they know its too small, they know, but they want to make it seem like they are fiscally conservative (ironic and stunningly hypocritical at the same time) and want it to fail so they can say, look, if you just listened to us and gave more tax cuts, we wouldn't be in this mess that obama and the democrats created. They don't give a fuk what works, just their electorial ideology. they will sell it. bUT THEY HAVEN'T REALIZED YET, we aren't buying their stale petrified crap ANYMORE!

[JDPriestly]

57. They want democracy to fail.

Read the history of the Third Reich -- from the time of the Weimar Republic. Then read Naomi Klein's book, Shock Doctrine. The extreme right-wing hopes to cause the American people to reject democracy out of disillusion with the failure of Obama's promise of "hope" and his inability to get economic recovery. Frankly, I don't think the extreme right-wing knows the American people very well. Yes, we will be unhappy, but they will be the target of our unhappiness. Not Obama. If the plan doesn't work, Obama will be able to blame the failures on them.

[bbgrunt]

65. you've got their agenda right; I hope you got the response to it right too.

[Stinky The Clown]

37. Centrists

"I don't want to take an actual stand"

[MajorChode]

38. Why is Krugman the sole voice of reason in this truly messed up world?

[jimlup]

40. We're screwed!

[D23MIURG23]

42. K&R

[Journeyman]

43. But all Obama has to do is issue one of those --what do they call 'em? -- Signing Statements. . .

and no matter what the legislature approves, the President gets what he wants, what he feels is best for the country.

That's how it works, isn't it? That's 'democracy in action,' isn't it? A sham of democratic action followed by a tin-horn dictator's decision?

(Pass that to conservative critics of the plan, see what their opinion of such a scenario would be. Tell 'em Georgie-boy issued over 125 such 'decisions.'

[Better Believe It]

44. K & R

[Solly Mack]

47. K&R

[G_j]

49. Supporters Of $1.3 Trillion Tax Cuts In 2001 Now Call $900 Billion Recovery Plan Billion ‘Too Much"

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=5007864&mesg_id=5007864

[Marr]

50. What are the odds of Obama vetoing his own stimulus bill and telling them to

start over, minus all the "bipartisan" hamstringing?

[G_j]

51. I would prefer he did, nt

[Greyhound]

61. That's exactly the kind of thing he needs to do, and maybe that's the plan.

Push this turd through the system and then, with much fanfare and media coverage, throw it back in their faces with the real plan as virtually a fait accompli using the outrage of the constituents.

One can dream...

[Gorobei]

69. That idea has my vote too. n/t

[BrklynLiberal]

52. The repukes will say that since the first one didn't work, why should they ok more???

But why does he even need the repukes??? DAMMIT!!!
Compromise and appeasement are seen as capitulation by the repukes. It always has been seen that way and this is how they will always see it.

Just roll over them, like they did to the Dems for the past 8 years...

[Outlier]

71. Any plan is doomed to failure

and both parties know it. The economic recession will be deep and long and there is very little they can do about it. 30 years of easy monetary policy, where the Fed bailed out every previous recession or stock market hiccup, a 0 savings rate, and $2 trillion dollars in deficit spending in the last 8 years has created a tremendous amount of excess capacity in the US and World economy. Supply needs to contract faster than demand is, and that ain't easy but it will be painful. There is no way around taking this medicine. That is why the republicans are playing hardball and the democrats are willing to give concessions, because no party wants to own this bill and have to anser for it's failure.

There was no hyperbole when the pres. used words like catastrophe last week.

[jonestonesusa]

56. Succinct article by Krugman, and very sobering

The aid to the states was a very cost effective part of this plan. We can only hope that Republican governors as well as Democrats in those offices buy a clue and lobby their own Congressional delegations to restore those cuts in the package. And we all have a role to play in this as voters and citizens if the outcome is going to change.

Very disappointing!

[Voltaire99]

58. "Centrist": when calling yourself a Republican just won't do.

If you want to shake your soulless Boomer ass to Fleetwood Mac with Nancy, Hill and co., be sure to position yourself as a centrist.

All the cool kids over 50 are doing it.

[olegramps]

62. Republicans gutted the bill to assure its failure

Once again the Republicans have been able to assert their will on the limp-wristed Dems in congress. Rather than attacking these thugs and going directly to the people and tell the working class that the Republicans are their worst nightmare, the Dems quietly did the Repubs bidding. The Repubs have gutted the bill of its most effective measures to insure that it will fail. I am damn sick of what is taking place. The tax cuts will do little or nothing to stimulate the economy and now they are a major portion of the bill. I am very disappointed. The ones we have counted on rolled over again.

[MannyGoldstein]

64. War Or Dishonour?

I am reminded by Churchill's comment on Chamberlain's appeasement of the Nazis:

"You were given the choice between war and dishonour. You chose dishonour and you will have war."

The present plan gives the new administration both war and dishonor. Let's hope that this state of affairs can be improved upon in the near future.

[dccrossman]

67. Democrats continue pattern of whine, then buckle

Why is this?

Why do Democrats have no ability to stand tough or even vaguely united?

Put up a minor show of force and then fold.

The hell with bipartisan. Bipartisan means to work together to find the best ideas, not caving to your, supposedly, weaker opponent. The Republican ideas helped drive up an unsustainable build, where the middle class shrank and workers lost out, while Wall Street made out with risk-free money.

When your opponent only offers ideas that either failed in the past or only succeeded in benefiting the few while punishing the weak, reject those ideas. Strongly.


K & f*ckin' R

[Jefferson23]

68. K&R, VERY frustrating, we win but still we don't.

[cbc5g]

70. Fuck it , it's not centrism it's republican-lite

And I THOUGHT we were getting rid of the DLC with this election.

[RaleighNCDUer]

72. If the right was really sure they are right, they'd have let the stimulus plan

go through with NO changes - NO tax cuts - and when it failed they'd be vindicated.

But of course, it wouldn't fail.

OTOH, a plan that could work has now been possibly fatally compromised to appease the right - which really needs no appeasing - and now when it fails the right will say "We told you it wouldn't work!" even though it failed specifically by conceding to THEIR positions.

[GinaMaria]

76. It's not a done deal.... yet

Is there still time to correct what's wrong with this plan? What can we do to help that correction along?