Just a quick thought, but what happens if Greece leaves the Euro and then a year or two after, things start improving rapidly. What would be the reactions of the other Euro peripheral countries like Spain and Italy.
Would the electorates there go further to the non-austerity parties if things have not improved?
Brad Delong has a great post:
More Jobs and Higher Middle Class Incomes as Economic Policy Job #1: Housing Policy Edition
Years late and terabucks short blogging…
Four years ago, Obama pivoted to the Axelrod-Geithner line that the decline had stopped, economic recovery was on the way and could handle itself, and that economic policy job #1 was stabilizing the long-term finances of the federal government.
Now, after four largely wasted years spent mostly talking about the deficit, he may be pivoting back:
“I want to make sure that all of us in Washington are investing as much time, as much energy, as much debate on how we grow the economy and grow the middle class as we’ve spent over the last two to three years arguing about how we reduce the deficits”, Mr. Obama said. He called for a shift “away from what I think has been a damaging framework in Washington.”
This is most welcome. Let us hope that it is indeed permanent.
Now the first step is to strike a deal to get the Republicans in the Senate to confirm Mel Watt as head of FHFA, and then for FHFA and the GSEs to offer a conforming loan-rate refi (with equity kickers attached for those underwater) to every mortgage holder in America. That policy to clean out the credit-channel mess created by the housing finance disaster and housing bubble crash of 2004-2008 would have been good policy in 2009. It would have been good policy in 2010. It would have been good policy in 2011. It would have been good policy in 2012. And it would be good policy today.
I like Paul Krugman, I think he is very good, but i think he has set himself up here as regards to China. Ok, he says its (China) is riding a bicycle into a brick wall, but when does this implosion happen?
And by reading his articles I feel like he’s saying “ok next month China is Dooomed!”, when I think he means to say that over the next 4 years we could see a decline of China growth by 3 percentage points from where it is now (Its 7.5% now).
Having worked China deals since the mid 2000’s, knowing how China works (as Krugman states in his article) is incredibly complex. When he says China’s econ stats are a little science fictiony, he ain’t lying.
But the ability of a populace to take extreme hardships before doing something about it (see Europe) is pretty vast.
So no matter how much “rebalancing” takes place, I don’t see a hard landing for China.
The jobs report yesterday is the talk of the punditverse. The basic take away was “the job growth was poor and there was a large amount of people who dropped out of the labor force. This is bad for Obama.”
While the news media was making a lot of noise about it, I think its not so bad for Obama. The general populace seems to accept that its not his fault. They keep putting out that no president, except FDR, has been re-elected with this level of unemployment. Yes, that’s right, but which president’s situation was similar? Well that would be FDR.
My problem is that the news media is not picking up on the concerted effort by repulicans to hobble the economy. They are blocking the JOBS PLAN that President Obama has put forward. They are primarily responsible for the majority of GOVERNMENT JOB LOSSES. And despite the effort the JOBS GROWTH has been better than the previous republican administration.
The jobs report was a perfect example. Positive 103k jobs added in the private economy and 7k LOST from government jobs.
Where is the news media pushing these points? I simply cannot believe that this deceitful republican strategy is succeeding to a certain degree. If it does suceed, what does that say for the future of America?
Posted in Economics & Politics
Tagged austerity, austrian, austrians, congress, democrat, democratic, economics, economy, election, government, jobs, jobs act, krugman, obama, president, republican, romney, ryan
I first read Paul Krugman as a grad student at Temple University. I was working on international monetary economcis and I read a lot of his work. Not only was it some of the most precient and superior analysis I had come across, but also some of the most well written. This was 7 years before he was hired by the New York Times to write a column.
Without a doubt, he is one of the best economists on the planet and one of the very, very few people I often read.
Here’s a recent post on taxes:
I’ve never understood what the Ron Paul/Austrians/Goldbugs were talking bout. Maybe because I really didn’t dig that deep, but Noah Smith has come across them and is actually looking at their arguments. That’s good cause he’s smart and does his homework.
Here’s his first take on them from the view of inflation:
Posted in Uncategorized
Tagged austrians, currency, debt, democrat, economics, gold, gold standard, inflation, investment, libertarian, republican, ron paul
Busy night reading blogs. Here’s a good one on bullies and libertarians. Most people don’t think through the consequenses of completely doing anything.