The Great Recession for Thee vs. the Great Recession for Me…

In this Krugman editorial he examines the pluses and minuses of retaining Ben Bernanke as the Fed Reserve Chairman.  Mr. Bernanke has become an important  symbol of the bailing out of big banks, but also the lack of progress on job creation.

Bernake was complacent as the danger clouds came in.  But Krugman supports him because his replacements could be worse?  Bernanke has not supported job growth alternatives and in fact just the opposite. He has done nothing to offer suggestions on how to bring down unemployment faster.

I’ll let Krugman defend himself here: 

“But — and here comes my defense of a Bernanke reappointment — any good alternative for the position would face a bruising fight in the Senate. And choosing a bad alternative would have truly dire consequences for the economy.

“Furthermore, policy decisions at the Fed are made by committee vote. And while Mr. Bernanke seems insufficiently concerned about unemployment and too concerned about inflation, many of his colleagues are worse. Replacing him with someone less established, with less ability to sway the internal discussion, could end up strengthening the hands of the inflation hawks and doing even more damage to job creation.”

The Paulster continues: 

“That’s not a ringing endorsement, but it’s the best I can do.

“If Mr. Bernanke is reappointed, he and his colleagues need to realize that what they consider a policy success is actually a policy failure. We have avoided a second Great Depression, but we are facing mass unemployment — unemployment that will blight the lives of millions of Americans — for years to come. And it’s the Fed’s responsibility to do all it can to end that blight.”

Am I being too critical when I say this analysis sounds like “the poor folk can have their recession, we’ll just have to get by with ours”?


Filed under Economics

8 responses to “The Great Recession for Thee vs. the Great Recession for Me…

  1. It is waaaayyyyy past time for Obama to do something dramatic like kicking the money changers out of the temple. Wake up, Mr. President…

    • Zippy

      To the unemployed and out-of-options, the main differences between this Recession and a Depression is the things that government did in the 30s, the 60s, and early last year to keep that from happening. Krugman knows well that “unemployment years into the future” will be unsustainable. That is no recovery.

      A recovery that includes “uemployment years into the future” is stating, pretty bluntly, that prosperity on paper is acceptable and, for what’s left of the investor class, maybe it is. One doesn’t have to be a Nobel-prize winning economist to realize that paper wealth cannot be sustained with increased productivity. So the multinational slave economy will need to be ramped up (like anyone in touch with reality, I’m including what’s left of US jobs in that).

      And it sounds to me like Krugman has just plain given up hope.

  2. Zippy

    There’s a word for it: it’s call feudalism.

  3. Zippy

    This is what has to stop:
    Wal-Mart’s Sam’s Club Farms Out 10,000 Jobs


    Sam’s Club, engaged in a tough struggle to stand apart from competitors, is cutting about 11,000 jobs and is turning to an independent marketing firm to handle in-store product demonstrations at its warehouses nationwide.

    About 10,000 of those jobs, or 9% of the Sam’s Club work force, will come from outsourcing product demos at the company, a division of Wal-Mart Stores Inc. Most of those jobs are part-time, the company said Sunday.

    Brian Cornell, president and chief executive of Sam’s Club, said the move was aimed at boosting sales and customer loyalty, not cutting costs. “Operationally, we see this as a net neutral,” he said. Mr. Cornell added that he expects many of his laid-off workers to be hired by the marketing firm, Shopper Events LLC of Rogers, Ark.

    Riiight, people with already crappy jobs get to fight for even crappier ones with a different firm, insulated from any accountability from Bentonville.

  4. tosmarttobegop

    Ahh this morning I came across another example of “Washington math”.

    How a “tax cut/ tax credit” works, both are seen as a lost of tax revenue for the Government.

    Plainly it is taking in less taxes, if you owe a thousand dollars and get a credit that is worth four hundred.

    That should mean that the Government is taking in six hundred in taxes instead of a thousand right?

    Simply common sense math huh?

    Not in Washington math, rather then willingly accepting the loss of that tax revenue.

    They pay themselves with money already in place. SO there is no loss of revenue!

    Another way of explain it, I am the federal government and Fnord owes me $100.00.

    I tell Fnord I am giving her a tax credit/tax cut of $25.00 on the $100.00.

    So I am accepting $75.00 instead of $100.000 correct?

    Ahh, no!

    I will take $25.00 out of my own pocket to make up the difference between $100.00 and $75.00.

    SO I am getting that $100.00 of tax revenue!


    FYI this was not a creation of the Obama administration it is how Washington has operated and is an example of the Bush tax cuts.

    Also it is not limited to only the federal Government’s thinking.

    Now you might understand why the economy crashed and make you wonder why it took so long to happen?

  5. lillacluvr

    But those tax cuts take on different meanings dependent on who exactly is receiving those tax cuts.

    Remember, the Bush tax cuts went to the wealthy because they are the ones that provided jobs – that is a good tax cut.

    So, after all these tax cuts – then why is the unemployment rate so fricking high?

    Seems to be alot of somebodies took their tax cuts to their foreign bank accounts and stashed the money.

  6. tosmarttobegop

    Yes the other side of that coin is just that, when Tiahrt explain the “tax cuts” to me he stated it was to simulate the economy. By only withholding 15 cent of tax when there was 25 cents due that left 10 cents in the taxpayers pocket. And they could spend that 10 cents until they had to pay it at the end of the year for the taxes they owed!

    BTW, I am not a math wiz but even I know that is not a tax cut!

    But the money that the person does not have to spend on taxes can be spent elsewhere.

    But unlike what Tiahrt said, they are also double using federal money and pretending it is two single uses.
    Taking money the government already has from tax revenue and using it to pay for future tax revenue.

    To them that makes sense, but it ends up like if you took the paycheck you received two weeks ago and used it to pay you this week…. How much money will you end up with?

  7. The unemployment rate is so fricking high because the recession allowed the deletion of jobs in the economy that should have been eliminated prior to the same. Going forward, these jobs will not magically reappear; nor should they, to be blunt.

    I don’t think Dr. Krugman is as cavalier as iggy wondered in his rhetorical question, nor do I think he’s given up hope as it sounds to Zippy. I believe he recognizes the need for governmental intervention in the economy at a higher rate than what has been shown to date, and that (swallowing hard) Chairman Bernanke being reappointed is the political best that can be done to work any changes to that end through the Congress.

    I believe it is necessary to take a hard look at the global situation and devote efforts on job creation to those areas not already best served by our overseas competitors, and in new industries some of which, at best, are just a small step above nascent. Trying, through protectionism, to ‘bring back outsourced’ jobs won’t work. It is far too late in the game for that. I’m all for changes in the IRC to reduce or eliminate the tax benefits which accrue to those who do send the jobs out, while recognizing that the concepts underlying many of these provisions when first adopted were part of this country’s over all foreign policy goals. There was always the potential for abuse of these provisions, abuse that was facilitated by prior administrations and Congress, which increased within the past administration and the GOP controlled Congress.

    However, we are where we are today. Serious attention needs be given to what jobs in what industries need to be the subject of government intervention, and not worry about those that are irretrievably lost. Anticipating a question or comment, I understand this will undoubtedly result in there being at least a generation ‘that doesn’t do as well or better than the parents’ generation’; I just don’t want to see this becoming the norm for succeeding generations, which I believe will happen as surely as the night follows the day if the attention is directed to trying to rebuild the traditional industries and the jobs therein contained, jobs which are of no utility to the economy as a whole, as they are unnecessary, and will effectively prevent the creation of new industries and jobs to be contained therein.