Could We Be Wrong About Economics?


There comes a time in every person’s live when one must face some very nasty facts.  It happens when you pull the plug on Rush,  Hannity, O’Reilly, and their associates.  The Pink Flamingo has not watched FOX since Thanksgiving. (I can no longer tolerate Roger Ailes and the way he is destroying the GOP) Once in awhile I will watch Wolf Blitzer.  I’ll watch CNN for “real news”, and then watch Bloomberg for the rest of the news.  When you watch it, streaming, on a business basis, cold hard numbers, it is eye-opening and politically shattering.

Right now the GOP has been so hijacked by Randian economics, that they are in danger of destroying our country’s economy.  They are so fixated on Randian austerity, which DOES NOT work, and destroying Obama, that they no longer give a damn about what is best for America.

What is more important, doing what is right for the country, or destroying Barack Obama?  I started thinking about how angry I was over the irrational way liberals treated George W. Bush

I hate agreeing with liberals, especially a blog like Crooks & Liars, but this week, after watching Bloomberg, reading deeper into the economic figures, and dealing with the duplicity of Eric Cantor and the GOP when it comes to the transportation bill (which we disparately need passed), well, damn if they aren’t right about this one.

“...Gee, if the Republicans weren’t so fixated on crashing the economy to keep Obama from getting reelected (and if Obama would only stop agreeing with them and validating their “starve the government” philosophy), maybe we could fix some of these problems. (Here’s how I’d like to hear Democrats talk about the economy.) But oh well!…”

I’ve come to the conclusion that the House GOP is more interested in tanking Obama than in doing what is right, Constitutional, and ethical.  I find their behavior disgusting.

Democrats for Sale

We are looking at what could be a catastrophic financial melt-down, based on conservative economic theories – or so it seems.  The problem here is that we’re not really dealing with “conservative” economic theories, but Randian theory.


There is much more going on here.  Dave Johnson, a liberal, wrote something with which The Pink Flamingo agrees, very much.

“…Have you noticed that people who are screaming up the terror over deficits are the very same people demanding tax cuts for the rich, no cuts in military, cuts in the minimum wage, selling off public assets, etc?…”

In Spain, austerity, and tax increases have been a disaster that is threatening to bring down all of Europe.  It proves that Krugman is right.  The irony here is that even the Cato Institute is starting to see that Krugman is right, and the far right is very very wrong.  This is a major denouncement of Randian economics.

“…If we look at government spending as a share of the economy, Spain appears as fiscally prudent: Spending was 39.2% of GDP in 2000 and exactly the same figure in 2007. However, as has been noted by Juan Ramón Rallo, Ángel Martín Oro and Adrià Pérez Martí of the Juan de Mariana Institute in a recent Cato study, “the data should be interpreted with caution, given that the GDP was growing at an artificially high rate.” The point is proven by the fact that when the economy came to a halt in 2008 (it grew by just 0.9%), government spending as a share of GDP leapt 2.3 percentage points to 41.5% in just one year. Government spending as a share of the economy remained constant during much of the 2000’s not because the government was spending too little but because GDP was growing too fast.

Moreover, once the crisis kicked in, government spending as a share of GDP reached a peak at 46.3% in 2009 (due to a combination of still more stimulus spending and a contracting economy). It later fell to 43% in 2011, still a higher share than in 2008. Government spending in Spain has indeed come down in the last two years, but not in a dramatic fashion as some people would have us to believe.

What about taxes? As has been the case in Britain, France, Italy and Greece, in the last two years the Spanish government increased taxes to tackle the soaring deficit: personal income tax rates went up in 2010 and two new brackets of 44% and 45% were introduced for higher incomes. Tax credits to self-employed workers were revoked. The VAT rate went up from 16% to 18% and excise duties on tobacco and gasoline were also raised. All these tax increases took place before the large tax hike introduced this year by the conservative government of Mariano Rajoy, which turned Spain into one of the highest taxed countries in Europe (and explained at length in this Economic Development Bulletin).

In short, austerity in Spain, described by Paul Krugman as “insane,” consists mostly of significant tax increases and timid spending cuts….”

This is terribly important, because even libertarian economic wonks are starting to turn away from “conservative” economics and the disaster of Alan Greenspan. Nothing is more revealing than this interview with conservative darling, Joe Weisenthal, at Hot Air, of all places.

Hot Air

“…“It makes me happy when gold falls,” he wrote in a recent Twitter post, “since it means many of my ideological opponents are poorer than they were the day before.”

Weisenthal says his own political thinking has shifted from something like libertarianism to the Keynesian view that the government should borrow and spend massively during a recession. Weisenthal regularly seizes on lackluster economic data to remind readers that the government is not doing enough to boost the economy, and he defends the Federal Reserve’s efforts to accelerate growth.

“I used to be criticized as too conservative,” he said. “Now I’m criticized as too liberal. But as long as I feel that I’m not just making a partisan argument, I don’t think it harms your credibility to take a strong stand.”…”

All of this boils down to one salient point.  Are we so interested in hating Barack Obama, and wanting him out of office, that we will do, believe, and think anything, even when it is not true?  Do you want to get rid of him so badly that you will ignore factual accuracy and hurt the country rather than doing what is right for the country?  Is doing what is right for the country contrary to the Rush Limbaugh – Fox News – Ayn Rand agenda?

Maddow Blog

What really ticks me is that Rachel Maddow, whom I cannot stand, is 100% right here.  Moody’s Analytics is NOT a liberal think tank.  It is non-political and highly reputable.  But – if anyone says anything good about Obama’s policies they are evil and must be destroyed.  There simply must be a George Soros connection and he’s evil, right.  (Soros is worth a hell of a lot more than Romney and the Koch Brothers, so…)

“…Despite public clamoring for action on jobs, congressional Republicans reflexively killed the American Jobs Act, saying it was unnecessary. The House wouldn’t bring it up for a vote, and a Republican filibuster killed it in the Senate. For GOP policymakers, this was a time when Washington should stop investing in job creation and start focusing on austerity — lower the deficit, take capital out of the economy, and everything would work out fine.

As panic sets in after this morning’s brutal jobs report, take a moment to consider a hypothetical: what would the economy look like today if Congress had followed Obama’s lead, responded to public-opinion polls, and passed the American Jobs Act? In 2012, do you think the nation could use those 1.3 million jobs or not?

Are we better off now as a result of Republican obstructionism and intransigence, or would we have been better off if popular and effective job-creation measures had been approved?…”

What ever happened to Country First?

The more I learn about this, the more I realize that Krugman is right, Limbaugh is a fool, FOX is destroying the GOP, and Rand’s economic theories are the stuff of nightmares.   I’ve reached the point where I’m more interested in what works, what fails, and not repeating those mistakes.  Wise people learn from mistakes.  Fools do not.  Right now, the GOP in the House and conservatives in general, pushed by FOX, Randians, Paul Ryan, Rush Limbaugh, the tea parties, and Greenspan’s economics, are abject fools.

Krugman is right and Greenspan is wrong.  Rush is wrong.  Paul Ryan is dead wrong.  As a party, the GOP has allowed Rand’s insane economic theories to destroy us.

“...The bad metaphor — which you’ve surely heard many times — equates the debt problems of a national economy with the debt problems of an individual family. A family that has run up too much debt, the story goes, must tighten its belt. So if Britain, as a whole, has run up too much debt — which it has, although it’s mostly private rather than public debt — shouldn’t it do the same? What’s wrong with this comparison?

The answer is that an economy is not like an indebted family. Our debt is mostly money we owe to each other; even more important, our income mostly comes from selling things to each other. Your spending is my income, and my spending is your income.

So what happens if everyone simultaneously slashes spending in an attempt to pay down debt? The answer is that everyone’s income falls — my income falls because you’re spending less, and your income falls because I’m spending less. And, as our incomes plunge, our debt problem gets worse, not better.

This isn’t a new insight. The great American economist Irving Fisher explained it all the way back in 1933, summarizing what he called “debt deflation” with the pithy slogan “the more the debtors pay, the more they owe.” Recent events, above all the austerity death spiral in Europe, have dramatically illustrated the truth of Fisher’s insight.

And there’s a clear moral to this story: When the private sector is frantically trying to pay down debt, the public sector should do the opposite, spending when the private sector can’t or won’t. By all means, let’s balance our budget once the economy has recovered — but not now. The boom, not the slump, is the right time for austerity.

As I said, this isn’t a new insight. So why have so many politicians insisted on pursuing austerity in slump? And why won’t they change course even as experience confirms the lessons of theory and history?

Well, that’s where it gets interesting. For when you push “austerians” on the badness of their metaphor, they almost always retreat to assertions along the lines of: “But it’s essential that we shrink the size of the state.”

Now, these assertions often go along with claims that the economic crisis itself demonstrates the need to shrink government. But that’s manifestly not true. Look at the countries in Europe that have weathered the storm best, and near the top of the list you’ll find big-government nations like Sweden and Austria….”

It all boils down to what is right and what is wrong, ideology be damned.  If you look at it this way,  Mitt Romney will be a fiscal disaster for the US, just the way he was for Massachusetts when he was governor.

We are so screwed.

There comes a time in every person’s live when one must face some very nasty facts.  It happens when you pull the plug on Rush, Medved, Hannity, O’Reilly, and their associates.  The Pink Flamingo has not watched FOX since Thanksgiving.  Once you open your eyes and start using your brain instead of allowing the political panderings of those who spew forth hot air for a living, it is alarming.

The GOP has been manipulated into pursuing an agenda that is disastrous for the country. I changed, philosophically, on Thursday when I watched the obvious friendship between George W. Bush and Barack Obama.  We can either play Spy v. Spy and use MAD to bring down the nation, or we can grow up and act like rational and reasonable adults.

I’ve learned that, once you open your eyes and stop hating Barack Obama, that maybe a whole bunch of things the pandering Rand worshipers of the Right have told us is just plain wrong.  I do know that this perfect candidate forced upon us by those who are promoting fear and hatred of Obama is even worse than Obama.  BUT – we must fear and loath Obama because we have been told to do so.

I don’t care about Mitt Romney.  I don’t care about Barack Obama.  Right now I don’t really care for the GOP in the House.  I care about this nation, my life, and the lives of my nieces and nephew.  If we continue down the current path paved by Alan Greenspan, Paul Ryan, Ayn Rand, Rush Limbaugh, FOX News, and Mitt Romney, we’re totally screwed.

I am a Republican.  I will always be a Republican, but I refuse to be with Stupid, over there.  It is time for reason to rear it’s beautiful head and kick these brain dead devotees of a failed philosophy out the door!  If not, we’re going to lose not only our futures, our financial well-being, but our country.  I don’t know about you, but I don’t want my country based on the perverted theories of a woman who inspired the Book of Satan.

Might I dare use the word “evil”?