The Triumph of Fiscal Hypocrisy - Trump

Paul Krugman,
Donald Trump’s re-election campaign will be centered around claims that he has done great things for the economy. And let’s be honest: The U.S. economy is running pretty hot these days. Growth in G.D.P. and employment has been good, though not spectacular; the unemployment rate is near a historic low.

There are some shadows in the picture. Economic gains have been lopsided, with a large increase in corporate profits that mainly reflects giant tax breaks, while workers haven’t seen comparable gains (and gains for lower-wage workers have been driven in part by minimum-wage increases in blue states). The huge gains in health insurance coverage under President Barack Obama have stalled or gone into reverse, and there has been a sharp increase in the number of Americans who report delaying medical treatment because of costs.

Still, it is indeed a strong economy. But if we ask what lies behind that strength, the main answer is an explosion in the federal budget deficit, which exceeded $1 trillion last year. And the story of how that happened has deeply disturbing implications for the future of U.S. politics.

Let’s go back for a minute to early 2009, when the economy was imploding and desperately needed help in the form of deficit spending. The Obama administration did indeed propose a significant stimulus plan — but it was much too small relative to the size of the problem, largely because the administration wanted to win bipartisan support and wasn’t willing to use reconciliation to bypass the filibuster.



This isn’t hindsight. In January 2009 I was practically tearing my hair out over the inadequacy of the stimulus, and warned of a scenario in which “the plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says, ‘See, government spending doesn’t work.’” That is, of course, exactly what happened.

Then, in 2010, Republicans took control of the House and were in a position to force Obama into years of spending cuts that exerted a significant drag on economic growth. This drag wasn’t enough to prevent a sustained economic recovery, but the recovery could and should have been much faster. There was no economic reason we shouldn’t have returned to full employment by, say, 2013; instead, largely thanks to fiscal austerity, the average unemployment rate that year was still above 7 percent.

Krugman, Secret Deficit Lovers

What if they balanced the budget and nobody knew or cared? Oct.10,2014.

O.K., the federal budget hasn’t actually been balanced. But the Congressional Budget Office has tallied up the totals for fiscal 2014, which ran through the end of September, and reports that the deficit plunge of the past several years continues. You still hear politicians ranting about “trillion dollar deficits,” but last year’s deficit was less than half-a-trillion dollars — or, a more meaningful number, just 2.8 percent of G.D.P. — and it’s still falling.

So where are the ticker-tape parades? For that matter, where are the front-page news reports? After all, talk about the evils of deficits and the grave fiscal danger facing America dominated Washington for years. Shouldn’t we be making a big deal of the fact that the alleged crisis is over?

Austerity is the Problem- Paul Krugman

Fiscal Fever Breaks

By PAUL KRUGMAN

In 2012 President Obama, ever hopeful that reason would prevail, predicted that his re-election would finally break the G.O.P.’s “fever.” It didn’t.

But the intransigence of the right wasn’t the only disease troubling America’s body politic in 2012. We were also suffering from fiscal fever: the insistence by virtually the entire political and media establishment that budget deficits were our most important and urgent economic problem, even though the federal government could borrow at incredibly low interest rates. Instead of talking about mass unemployment and soaring inequality, Washington was almost exclusively focused on the alleged need to slash spending (which would worsen the jobs crisis) and hack away at the social safety net (which would worsen inequality).

So the good news is that this fever, unlike the fever of the Tea Party, has finally broken.

True, the fiscal scolds are still out there, and still getting worshipful treatment from some news organizations. As the Columbia Journalism Review recently noted, many reporters retain the habit of “treating deficit-cutting as a non-ideological objective while portraying other points of view as partisan or political.” But the scolds are no longer able to define the bounds of respectable opinion. For example, when the usual suspects recently piled on Senator Elizabeth Warren over her call for an expansion of Social Security, they clearly ended up enhancing her stature.

Corporate Lobbyists and the Trans Pacific Partnership

Bill Moyers: The Corporate Plot That Obama and Corporate Lobbyists Don't Want You to Know About

The Trans Pacific Partnership is a threat to up-end the economy as we know it.

Photo Credit: Shutterstock.com/EDHAR  November 1, 2013  |  Alternet.

 A US-led trade deal is currently being negotiated that could increase the price of prescription drugs, weaken financial regulations and even allow partner countries to challenge American laws. But few know its substance.

The pact, the Trans-Pacific Partnership (TPP), is deliberately shrouded in secrecy, a trade deal powerful people, including President Obama, don’t want you to know about. More than 130 members of Congress have asked the White House for greater transparency about the negotiations and were essentially told to go fly a kite. While most of us are in the dark about the contents of the deal, which Obama aims to seal by year end, corporate lobbyists are in the know about what it contains.

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And some vigilant independent watchdogs are tracking the negotiations with sources they trust, including Dean Baker and Yves Smith, who join Moyers & Company this week. Both have written extensively about the TPP and tell Bill the pact actually has very little to do with free trade.

Instead, says Dean Baker, co-director of the  Center for Economic and Policy Research, “This really is a deal that’s being negotiated by corporations for corporations and any benefit it provides to the bulk of the population of this country will be purely incidental.” Yves Smith, an investment banking expert who runs the  Naked Capitalism blog adds: “There would be no reason to keep it so secret if it was in the interest of the public.”

The following is a transcript of the video: 

Let's turn now to another big story ... TPP -- the Trans-Pacific Partnership. It’s a trade agreement the United States is negotiating with Australia, Canada, Japan and eight other countries in the Pacific region. If you don't know about the TPP, and few do, it's because the powerful people behind it -- including President Obama -- don't want you to know.

The negotiations are shrouded in secrecy, and once they are completed, Obama wants to rush the agreement through Congress -- fast-tracking, they call it -- with our elected representatives given the choice only of voting it up or down. Last year, over 130 members of Congress asked the White House for more transparency about what's being negotiated, and were essentially told to go fly a kite. You can be sure of this, however: a select group of corporate partners -- companies like General Electric, Goldman Sachs, and Pfizer, the pharmaceutical giant -- are not likely to be in the dark. Players like these stand to be the real beneficiaries of the agreement, because like other so-called "free trade" agreements, TPP actually will reward those at the top, even as it creates rules to override domestic laws on the environment, workplace safety, and investment. Corporate lobbyists already are lining up in Washington to ram the agreement through once the White House hurries it out of the delivery room. How do we know this? Because some vigilant independent watchdogs are tracking the negotiations, with sources they trust, and two are with me now.

YVES SMITH is an expert on investment banking and the founder of Aurora Advisors, a New York based management consulting firm. She runs the “Naked Capitalism” blog, a go-to site for information and insight on the business and ethics of finance.

DEAN BAKER is co-director of the progressive Center for Economic and Policy Research in Washington, DC. He's been a senior economist at the Economic Policy Institute and a consultant to Congress and the World Bank. I rarely miss his blog, “Beat the Press,” and I’m a regular reader of his column in the “Guardian” newspaper.