Insights from the Anti-Krugman

[dgs49]

I have the great fortune to subscribe to a local newspaper that weekly carries a column by John Browne. Mr. Browne is a financial analyst and former member of Britain's Parliament. He is the anti-Krugman: an economist with integrity and insight. This column is astute, and is typical of what he has written over the past few years. Read it, you might learn something.

Evidence last week indicated the re-emergence of recession and confirmed the Fed's gloomy outlook.

For years, the United States government has used economic stimuli excessively. Meanwhile, it has been killing jobs and job creation. It has been like a bus driver with his feet to the floor on both the accelerator and the brake simultaneously.
The result is lots of noise and smoke but no progress. Soon the bus is off the road, leaving passengers to walk. In economic terms, the government has wasted trillions of dollars in stimulus and killed millions of jobs. Soon the economy likely will slip from recession into depression.

The U.S. government has been killing jobs in four major ways.

First, the vast debts of the U.S. Treasury and local government siphon capital resources away from the private wealth-producing business sector.

Second, the imposition of new taxes has, over time, decreased the capital resources and investable funds of the private sector.

Third, massive numbers of new and complex government regulations have created additional overhead costs, uncertainty and a disincentive to undertake new business risks.

Fourth, timid government trade negotiation has encouraged the export of American jobs, creating systemic unemployment.
Clearly, the U.S. government fears standing up to China over its debased currency and its failure to honor agreements over intellectual property and open markets. This enables China to accumulate vast U.S. dollar surpluses based on an uneven playing field.

As a result China continues to export cheap products to America. While this keeps down U.S. inflation, China accumulates vast surpluses, which it invests in U.S. Treasuries. Seeing short-term political gains, American politicians turn merely a blind eye, bargaining only for show.

Meanwhile, America accumulates vast deficits, uncorrected by currency adjustment. America's jobs are exported and its manufacturing base destroyed. Today, even prime American companies like Apple employ 80 percent of their workforce in China. The chronic loss of jobs is disguised somewhat by increased unemployment benefit payments and creatively reduced official unemployment figures.

Nevertheless, if unchecked, this hemorrhaging of jobs heralds depression.

As the world's largest customer, an American depression will spread worldwide. Already, Europe is heading for depression. Even China's economy is faltering, dragging down the economies of its suppliers, like Australia, Brazil and Canada.

American politicians appear frightened to stand up to China lest the Chinese dump more than $1 trillion of U.S. Treasuries, causing yields to explode and the U.S. dollar to plummet. But this would undercut American trade partners worldwide, including Europe.

Therefore, most U.S. trade partners are potential allies in confronting China over its lack of cooperation. American politicians should face this reality and exercise inspired leadership to galvanize her trade partners into a powerful negotiating team, able to force China to a reasonable settlement.

To benefit from international trade, China must free its markets and its currency in order to erode today's threatening trade imbalances. China should be allowed time to adjust. But it should be made aware that undue delays will trigger progressive trade tariffs.

Our politicians appear to have been afraid of China but quite willing to bully their own people with debased currencies, increased taxes and regulations. Now, they must exercise courage and leadership to undertake the negotiation of a level trade treaty with China.

Without it, American citizens face poverty and unrest.

[rubato]

I have the great fortune to subscribe to a local newspaper that weekly carries a column by John Browne. Mr. Browne is a financial analyst and former member of Britain's Parliament. He is the anti-Krugman: an economist with integrity and insight. ... " [/b]

The "anti-Krugman" does not have the Clark medal nor the Nobel prize.

Or even average sense.

But he appears to have the admiration of pure fools.

The real Krugman has accurately predicted the effects of government economic policies for over a decade.

And you still cannot grasp the implications of borrowing money for 30 years at 1% and spending on infrastructure. Can you?

yrs,
rubato

[Scooter]

Ah yes, the constant refrain of the right wing, let's enact policies that will impoverish and endanger the poor and middle classes to fill the pockets of the rich, and that will ensure prosperity. We tried that for a while, it was called the 1920s, it worked at first and then, as everyone will recall, the bottom fell out largely due to the lopsided income distribution which resulted. A state of affairs that has been replicated in the last decade, but of course it wouldn't occur to Mr. Browne to look in that direction to understand what the problem is.

[Gob]

John Ernest Douglas Delavalette Browne (born 17 October 1938) is a former British politician who is currently acting as a political and financial consultant in West Palm Beach, Florida, USA.

Browne was Conservative Party Member of Parliament for Winchester from 1979 to 1992. He was educated at Malvern College and Sandhurst, subsequently serving as a Captain in the Grenadier Guards from 1959 to 1967.

In the 1992 general election, he decided to stand as an Independent Conservative candidate in Winchester after he was deselected by the Conservative Party after being suspended from the House of Commons for failing to declare his business interests.

He finished fourth behind the new official Conservative candidate, receiving less than 5% of the vote.

Browne subsequently stood as a "Conservative Rebel" in the 1993 Newbury by-election, then later joined the UK Independence Party and has stood unsuccessfully as a parliamentary candidate in Falmouth and Camborne and North Devon.

He was divorced from his first wife Elizabeth Jowett in 1985 and was awarded £270,000 settlement. He is currently divorced from his second wife, American-born heiress Elaine Boylen

Ah yes, one of those Tory crooks, the UK seems to produce and export so many of.

[Scooter]

What was it that Dave called him, "an economist of integrity"?

[Andrew D]

First, the vast debts of the U.S. Treasury and local government siphon capital resources away from the private wealth-producing business sector.

So let's pay off the national debt.

Oh, wait.

We were paying off the national debt -- pursuant to a bipartisan, conservative economic policy -- until the radical right decided that we should stop paying off the national debt and instead implement a tax cut that overwhelmingly benefitted the richest among us.

How about we go back to the bipartisan, conservative policy we had in place before the radical right got their hands on the levers of power?

Oh, wait.

That would mean going back to a bipartisan, conservative economic policy pursuant to which the social safety net which Americans, including even Tea-Party Americans, overwhelmingly want remained solvent.

We can't have that.

The radical right has totally failed in its original mission to persuade Americans that Social Security, etc., are things which Americans should not want. So the radical right has fallen back to the claim that Social Security, etc., are things which Americans cannot have, even though Americans want them.

And to support that claim, the radical right has done its best to make it true.

The radical right has done, and continues to do, everything in its power to ensure that America does not experience an economic recovery. The right-wing extremists who have taken over the House of Representatives do not want the unemployment rate to go down. Ideally, for them, the unemployment rate should go up.

Good politics for the loony-fringers who have taken over the once-conservative Republican Party.

Bad for millions of Americans. But the radical right doesn't give a rat's ass about millions of Americans.

Second, the imposition of new taxes has, over time, decreased the capital resources and investable funds of the private sector.

Has anyone told this guy that taxes now -- taking into account all taxes, including the taxes which the radical right loves to ignore -- are lower than they were when Saint Ronaldus Maximus was President?

Evidently not.

Third, massive numbers of new and complex government regulations have created additional overhead costs, uncertainty and a disincentive to undertake new business risks.

So nobody should be checking to ensure -- or at least to try to ensure; no regulatory program has ever been perfect -- that the chicken which you buy at the local market is not going to kill your children?

Fourth, timid government trade negotiation has encouraged the export of American jobs, creating systemic unemployment.

True enough.

And who has been spearheading the drive to export American jobs overseas?

The radical right.

[quaddriver]

Id like to believe that, but for 2 years, no one in the 'radical right' was in any position to do anything other than congressional pages.

The 'others' had opportunity to change, pass and legislate ANYTHING they so desired. They took the debt to levels unimaginable, wiped out the private equity of the lower and middle classes and tossed the poor and working poor out of jobs, and often out of their homes.

Nah, at this point I would PREFER the radical right.

[Grim Reaper]

The lunatic right would do an unimaginably worse job than the left is doing. They don't give two shits about you if you're poor, or even slightly well off. They only care about their big money contributions from the wealthy.

The left is at least trying to help the poor, even if they're not able to do as good a job as they want, mainly due to the right doing their best to strangle anything they don't agree with.

[Grim Reaper]

First, the vast debts of the U.S. Treasury and local government siphon capital resources away from the private wealth-producing business sector.

Second, the imposition of new taxes has, over time, decreased the capital resources and investable funds of the private sector.

Third, massive numbers of new and complex government regulations have created additional overhead costs, uncertainty and a disincentive to undertake new business risks.

Care to explain how we entered a recession before we started any of this?

It's almost like the "job producers" (which is a very pretty euphemism for rich) don't give a shit about hiring people if they can make more profits in the short term. They certainly weren't very interested in creating new jobs before they were being so unfairly burdened by the US government.

[Andrew D]

Id like to believe that, but for 2 years, no one in the 'radical right' was in any position to do anything other than congressional pages.

Actually, for those two years, the radical right was in a position to do exactly what it did -- block every attempt to make things better.

Why? Because a better economy for most Americans is political bad news for the leaders of the Republican Party.

[Liberty1]

Actually, for those two years, the radical right was in a position to do exactly what it did -- block every attempt to make things better

What planet were you living on until last November. Reps had no power to do anything, dems could have passed whatever they wanted. And might I remind you that just last december during the lame duck session, the extended the Bush tax cuts.


This requires no comment.

[Scooter]

Rather hard to comment if it's too small to be legible even setting one's browser at 400%.

Small type for small minds?

[Andrew D]

Actually, for those two years, the radical right was in a position to do exactly what it did -- block every attempt to make things better

What planet were you living on until last November. Reps had no power to do anything, dems could have passed whatever they wanted.

What planet were you living on?

There's a thing called a filibuster. Have you heard of it?

The Republicans, despite being in the minority in both Houses of Congress, used it relentlessly and in record numbers to block everything of any significance that the Democrats -- the party that the majority of Americans had voted for -- tried to do.

[Liberty1]

Rather hard to comment if it's too small to be legible even setting one's browser at 400%.

Works for me, it's even huge by large. Must be your narrow view.

There's a thing called a filibuster. Have you heard of it?

Oh so you're saying the party that is now spouting of comprimise, the one that ran obamacare down the countries throat, was so unwilling to comprimise on some pet bill of yours to even get it to a vote.

[Grim Reaper]

That's some interesting twisted logic in your graphic. And a lot of cherrypicking of data and quotes to make it appear as if everything is worse under President Obama, and that it's somehow all his fault.

It's basically nonsensical garbage that doesn't prove anything.

[Scooter]

Can anyone point to anywhere in the world where the economy is doing fantastically better now than it was in 2008?

Anywhere? No?

Then any claim that the economy should be doing better than it is is nothing but hot air.

[BoSoxGal]

The robber barons nearly bankrupted the nation - and the world, in fact.

Now their legion of blind supporters blame Obama for not fixing it overnight.

[rubato]

BushCo and the Republicans fucked the country into the worst collapse since the great depression.

And now they're trying to pass it off on someone else? Weak. But they have locked up the stupid vote for the next 50 years.

yrs,
rubato

[Liberty1]

Now their legion of blind supporters blame Obama for not fixing it overnight

BO has absolutely no chance of fixing it. He is as clueless as clueless can get (not that many pols are much different). You can't understand an economy when you've never held a job.

You can't "stimulate" an economy by merely stealing from the private sector and giving it to the public sector, it creates nothing but a temporary job.

Real jobs are created when there is a demand, not when it is mandated.

[BoSoxGal]

IMHO this is plentiful evidence of 'demand' - it falls under 'promote the general welfare':

http://t4america.org/resources/bridges/

Despite billions of dollars in federal, state and local funds directed toward the maintenance of existing bridges, 69,223 bridges — 11.5 percent of total highway bridges in the U.S. — are classified as "structurally deficient," requiring significant maintenance, rehabilitation or replacement.