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For some definition of "work"

[Welcome, Izvestia readers! --lambert]

Paul Krugman:

Unserious Central Bankers
[T]he rise of the pain caucus is truly amazing – I’m a hardened cynic, yet even I didn’t see that one coming. As Posen points out, mainstream macroeconomics – which suggests that we need a lot more stimulus, monetary and fiscal – has actually held up very well in this crisis; it has, above all, made the right predictions about inflation and interest rates, while the doctrines underlying the pain caucus have gotten it all wrong. Yet “serious” policy makers are rejecting the theory that works in favor of theories that don’t.

Oh, come on. Let's look at the numbers:

Top 1% Increased Their Share of Wealth in Financial Crisis

New calculations by Edward Wolff, the New York University economist and an expert on U.S. wealth statistics, show that the top 1% actually held onto its share of national wealth in the crisis, and may have even gained a bit.

According to his analysis, the top 1% held 34.6% of all national wealth in 2007. By Dec. 31, 2009, they held 35.6%.

Meanwhile, share of national wealth held by the bottom 90% fell to 25% from 27%.

The reason is that the wealthy benefited disproportionately from the rebound in financial markets [which are backed by us, the taxpayers, through the largest upward transfer of wealth in world history through the bailouts, and from which we got precisely nothing]. Their wealth generally is mostly in stocks and businesses, the values of which have surged since the depths of the crisis [as Geither and his Merry Men started reinflating the bubble].

I'd say the policies of the Central Bankers "work" quite well. For some definition of "work." Krugman's problem is that he thinks the administration still serves some sort of public purpose, as opposed to being an out and out banana republic and kleptocracy.

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jumpjet's picture
Submitted by jumpjet on

like this. I've also seen it in the "it's not a bug, it's a feature" discussions.

I never want us to lose sight of the fact that what these wealthy corporatist types do is not normal. Such insatiable greed may be a 'feature' for them, but it is strange and twisted for most real human beings.

They are the warped ones, the twisted ones. They are the ones who are strange and alien. And their systematized greed is not, in fact, a feature- it's a bug. A psychological one, a spiritual one, a holistic one.

Submitted by Hugh on

It is a reprise of Upton Sinclair's old quote:

It is difficult to get a man to understand something when his salary depends upon his not understanding it

They are paid to make wrong choices. Their careers have been made out of and depend on them making wrong choices and then rationalizing them with a patina of neo-classical jibber jabber. I can't help but think that Krugman "hardened cynic" though he claims to be is providing cover for them by casting these as mistakes rather than, as you point out, the deliberate goals of kleptocrats.

Submitted by jawbone on

meet to achieve their personal success. The Upton Sinclair quote nails it.

Krugman propbably has to pull his punches in order to keep his postion at the NYTimes. Shrill to a certain extent has been allowed, but he probably knows he can't go too far and keep his access to the public. Telling the absolute truth would not be permitted, imho.

Plus, he knows most of these kleptocrats, their enablers, their academic supporters, and, while he may not live in Versailles or the MCM (Mainstream Corporate Media) capital, he still interacts with them as human beings, not as the pullers of the levers of power we experience them as.

I hope he can maintain his "bully pupit"; without it he would not have the same influence.

And the NYTimes is not likely to hire a Bill Black or Dean Baker to take his place, fer sure.