A bit of explanation on the Cyprus situation.
Why are Cypriot banks so big? Because the country is a tax haven where corporations and wealthy foreigners stash their money. Officially, 37 percent of the deposits in Cypriot banks come from nonresidents; the true number, once you take into account wealthy expatriates and people who are only nominally resident in Cyprus, is surely much higher. Basically, Cyprus is a place where people, especially but not only Russians, hide their wealth from both the taxmen and the regulators. Whatever gloss you put on it, it’s basically about money-laundering.
And the truth is that much of the wealth never moved at all; it just became invisible. On paper, for example, Cyprus became a huge investor in Russia — much bigger than Germany, whose economy is hundreds of times larger. In reality, of course, this was just “roundtripping” by Russians using the island as a tax shelter.
It’s similar, Krugman says, to what happened in Iceland during the financial crisis, and how Iceland handled the situation then may be a good model for Cyprus to follow too.
Great piece from the always excellent Dr. Krugman.
(A great book on the precipitation of the financial crisis in nations such as Iceland, Greece and Ireland is Boomerang, by Michael Lewis. Go read it if you’re interested in this topic, highly recommended.)
During a contentious panel on ABC’s This Week on Sunday, Sen. Ron Johnson (R-WI) found himself at odds with his fellow panelists — and with the facts — about Social Security’s solvency.
Nobel Prize-winning economist Paul Krugman jumped in to point out that Johnson was unwilling to accept even the most basic facts over the way Social Security is funded, all for the sake of a talking point:
KRUGMAN: You said ‘let’s start with the facts,’ but we’ve just run aground right there.
JOHNSON: Exactly my point, we have got to agree on the facts and figures.
KRUGMAN: But your facts are false…Social Security has a dedicated revenue base, it has a trust fund based on that dedicated revenue base. You can’t change the rules mid stream and say ‘oh, suddenly the trust fund doesn’t count.’ […] It’s important to realize that the facts that are being brought out here are in fact non-facts.
Paul Krugman = a man of honesty.
On Sunday, economist Paul Krugman hit back against GOP claims that public sector employment has increased under Obama, and that such jobs consist mainly of wasteful bureaucrats and somehow count less economically than private sector ones. Back in September it was tea party Senator Rand Paul (R-KY) toeing that line, and this morning it was former Republican gubernatorial candidate Carly Fiorina.
The exchange commenced immediately after Krugman made the point that, had government employment in the current recovery followed the same path it followed under previous recessions in the Bush and Reagan years, unemployment now would be slightly above 6 percent:
CARLY FIORINA: I think it’s important to remember, when we talk about the economy, that a private sector job and a public sector job are not the same things. They’re not equivalent. I’m not saying public sector jobs aren’t important. But a private sector job pays for itself. A private sector job creates other jobs. A public sector job is paid for by taxpayers. […]
PAUL KRUGMAN: But when we say public sector jobs, it is not a bureaucrat in Washington, D.C.
FIORINA: Oh, it is, actually.
KRUGMAN: When we talk about public sector jobs — when we look at the ones that have been lost in large numbers in this — it’s basically school teachers. Don’t think about bureaucrats. It’s school teachers. What we’ve laid off hundreds of thousands of school teachers.
And when we talk about the cuts in public spending that have happened, they are not, you know, some god awful who knows what. It’s actually public investment. It’s largely fixing potholes and repairing bridges.
So, you know, you have this image of these wasteful bureaucrats doing god knows what. What we’ve seen is an incredible drought of basic infrastructure, and laying off hundreds of thousands of school teachers.
FIORINA: It is a fact that virtually every department in every organization in Washington, D.C. has seen its budget increase for the last 40 years. That money is being paid to hire people. The number of people who are — of course there are some teachers…
KRUGMAN: The vast bulk of public sector employees are at the state and local level. They are largely school teachers plus police officers plus firefighters. And your notion that it’s all these bureaucrats — that’s a myth that’s used…
FIORINA: It’s not a myth, it’s a fact. It’s not a myth, it’s a fact. We don’t have enough private escort job creation.
It’s a myth. Public sector jobs at the federal level have actually remained pretty stable over the last forty years. They began and ended the period around approximately 2.8 million, with a bounce to about 3.1 million circa-1990. Public sector jobs at the state and local levels increased significantly over those forty years, peaking at a bit over 19 million total when President Obama entered office. (They’ve fallen since, accounting for the decline in overall public employment.) But nearly all of that growth was in teachers and support staff for the education system, who now total nearly 7 million of those state and local workers.
The other major categories of jobs in state and local public employment are, as Krugman noted, police, firefighters, health care workers, and maintenance workers and drivers for the country’s transportation infrastructure. And the overall population of the country has also been growing, so even though the raw number of state and local workers increased significantly, the ratio of those workers to the overall population did not — 59 per 1000 in 1980 versus 65 per 1000 today.
Earlier this week, GQ magazine published an interview with Senator Marco Rubio, whom many consider a contender for the 2016 Republican presidential nomination, in which Mr. Rubio was asked how old the earth is. After declaring “I’m not a scientist, man,” the senator went into desperate evasive action, ending with the declaration that “it’s one of the great mysteries.”
It’s funny stuff, and conservatives would like us to forget about it as soon as possible. Hey, they say, he was just pandering to likely voters in the 2016 Republican primaries — a claim that for some reason is supposed to comfort us.
But we shouldn’t let go that easily. Reading Mr. Rubio’s interview is like driving through a deeply eroded canyon; all at once, you can clearly see what lies below the superficial landscape. Like striated rock beds that speak of deep time, his inability to acknowledge scientific evidence speaks of the anti-rational mind-set that has taken over his political party.
By the way, that question didn’t come out of the blue. As speaker of the Florida House of Representatives, Mr. Rubio provided powerful aid to creationists trying to water down science education. In one interview, he compared the teaching of evolution to Communist indoctrination tactics — although he graciously added that “I’m not equating the evolution people with Fidel Castro.” Gee, thanks.
The most obvious example other than evolution is man-made climate change. As the evidence for a warming planet becomes ever stronger — and ever scarier — the G.O.P. has buried deeper into denial, into assertions that the whole thing is a hoax concocted by a vast conspiracy of scientists. And this denial has been accompanied by frantic efforts to silence and punish anyone reporting the inconvenient facts.
But the same phenomenon is visible in many other fields. The most recent demonstration came in the matter of election polls. Coming into the recent election, state-level polling clearly pointed to an Obama victory — yet more or less the whole Republican Party refused to acknowledge this reality. Instead, pundits and politicians alike fiercely denied the numbers and personally attacked anyone pointing out the obvious; the demonizing of The Times’s Nate Silver, in particular, was remarkable to behold.
What accounts for this pattern of denial? Earlier this year, the science writer Chris Mooney published “The Republican Brain,” which was not, as you might think, a partisan screed. It was, instead, a survey of the now-extensive research linking political views to personality types. As Mr. Mooney showed, modern American conservatism is highly correlated with authoritarian inclinations — and authoritarians are strongly inclined to reject any evidence contradicting their prior beliefs. Today’s Republicans cocoon themselves in an alternate reality defined by Fox News, Rush Limbaugh and The Wall Street Journal’s editorial page, and only on rare occasions — like on election night — encounter any hint that what they believe might not be true.
And, no, it’s not symmetric. Liberals, being human, often give in to wishful thinking — but not in the same systematic, all-encompassing way.
Coming back to the age of the earth: Does it matter? No, says Mr. Rubio, pronouncing it “a dispute amongst theologians” — what about the geologists? — that has “has nothing to do with the gross domestic product or economic growth of the United States.” But he couldn’t be more wrong.
We are, after all, living in an era when science plays a crucial economic role. How are we going to search effectively for natural resources if schools trying to teach modern geology must give equal time to claims that the world is only 6.000 years old? How are we going to stay competitive in biotechnology if biology classes avoid any material that might offend creationists?
Source: The New York Times
So now that the Unperson/Ryan ticket has lost, Republicans are clearly expecting Paul Ryan to move right back into his previous role as Washington’s favorite Serious, Honest Conservative.
He might get away with it; but I hope not.
The fact is that Ryan is and always was a fraud. His plan never added up; it was never, contrary to what people who should know better asserted, “scored” by the CBO. What he actually offered was a plan to hurt the poor and reward the rich, actually increasing the deficit along the way, plus magic asterisks that supposedly reduced the debt by means unspecified.
Ryan can’t be ignored, since his party does retain blocking power, and he chairs an important committee. But if he must be dealt with, it should be with no illusions. Fool me once …
Source: The New York Times
During a roundtable discussion on George Stephanoupolos’ This Week Sunday morning, GOP political consultant Mary Matalin got into a heated exchange with Nobel Prize-winning economist Paul Krugman, calling him a “liar” for previously referring to Paul Ryan’s Medicare reform plan as a “voucher” program:
MATALIN: You have mischaracterized and you have lied about every position and every particular of the Ryan plan on Medicare, from the efficiency of Medicare administration, to calling it a voucher plan, so you’re hardly credible on calling somebody else a liar.
Yesterday, a post appeared on a Google+ account representing itself as belonging to Nobel Prize-winning economist and New York Times columnist Paul Krugman:
The trouble is, Krugman doesn’t have a Google+ account and did not make this statement. This morning, a post from Krugman on his actual New York Times blog explained:
Well, this is interesting. I hear that the not-so-good people at National Review are attacking me over something I said on my Google+ page. Except, I don’t have a Google+ page.
Apparently some people can’t find enough things to attack in what I actually say, so they’re busy creating fake quotes. And I have enough on my plate without trying to chase all this stuff down.
So if you see me quoted as saying something really stupid or outrageous, and it didn’t come from the Times or some other verifiable site, you should probably assume it was a fake.
A number of right-wing outlets jumped on this statement without bothering to check whether the Google+ account actually belonged to Krugman.
The Washington Examiner's Tim Carney tweeted:
Hot Air, following the link from Carney, put up a post attacking Krugman, which it later updated to acknowledge that Krugman never made the statement.
The Washington Examiner's Conn Carroll wrote a piece with the headline “Quake exposes Keynesian fraud,” which has since been updated to acknowledge that the Krugman statement was a hoax. However, Carroll apparently stands by his attacks on Krugman:
Some thought Krugman’s pining for more damage was so outrageous that the Google+ post was a hoax. Maybe it is. [UPDATE: It is a hoax!] But Krugman’s quake statement is perfectly in line with everything else he has ever said on the subject. After 9/11, Krugman wrote: “Ghastly as it may seem to say this, the terror attack — like the original day of infamy, which brought an end to the Great Depression — could even do some economic good.” In 2008 he said on This Week: “it took an enormous public works program known as World War II to bring the economy out of a Depression.” And just recently Krugman suggested that massive government defense spending to prevent a fictional alien invasion could also spur economic growth.
But what happens when the aliens don’t attack? Wouldn’t all that spending on anti-alien rays be wasted? Yes. But the Church of Keynsianism doesn’t care. As long as government policy is driving up spending, it doesn’t matter what the government spends the money on or what else gets destroyed in the process.
Reason magazine also put up a post without bothering to investigate whether the account was legitimate:
The post has now been updated with an apology.
National Review Online’s Kevin Williamson indicated that he hoped he was “being had” but, like many of his conservative colleagues, did not bother to investigate further before putting up his post:
First the stimulus wasn’t big enough. Now the earthquake isn’t big enough. Paul Krugman:
People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage.
I honestly cannot tell if I am being had here. I hope I am.
Where’s the Nikkei opening today?
However, the winner in this contest of irresponsible reporting may be National Review Online’s Jonah Goldberg. He sent out numerous sarcastic tweets attacking Krugman for his supposed statement, and has thus far not retracted:
h/t: Media Matters For America