Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Krugman’

How Bad Will It Be If We Hit The Debt Ceiling?

Posted by hkarner - 7. August 2017

The odds of a self-inflicted US debt crisis now look pretty good: hard-line Republicans are eager to hold the economy hostage, Democrats are in no mood to make concessions, and Trump is both spiteful and ignorant. So it looks fairly likely that by October or so there will come a day when the U.S. government stops paying some of its bills, including interest on debt.

How bad will that be? The truth is that we don’t know; but it may be helpful to talk about *why* we don’t know.

Until now, US debt has played a special role in the world economy, because it is — or was — the ultimate safe asset, the thing people can use to secure transactions with no questions about it retaining its value. In a way, the dollar is to other moneys as money is to other assets, and US dollar debt is the form in which dollars are held with ultimate safety.

Taking away that role could be very nasty. One prominent interpretation of the 2008 financial crisis is that it was a “safe asset shortage“: when people realized that those AAA securities engineered from subprime loans weren’t the real thing, they scrambled into an inadequate supply of trill safe stuff. Deprive them of dollar debts as safe assets, and terrible things could happen. Den Rest des Beitrags lesen »

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The Great Health Care Coverup

Posted by hkarner - 30. Juli 2017

July 25, 2017 5:22 pm July 25, 2017 Paul Krugman, NYT

Like many people, I have a sick sense of anger over what just happened in the Senate, which just voted to proceed on a health care bill without any information on what will be in the bill. There’s still hope that in the next few hours, moderates who just caved in will balk at the horrible things they’re being asked to vote for. And I do mean hours: there will be no time for reflection or serious debate.

But nobody should have any confidence that they will. And I think we can almost take it for granted that John McCain will first vote for something terrible, then give a grandstanding speech about making our politics better.

The important thing to realize is WHY the Senate is doing this — rushing to pass legislation that will have a vast impact on American lives, the economy, and more without a single hearing, without time for a proper analysis of the bill, and with crucial votes taken on behalf of legislation yet to be determined. It’s not some arbitrary failure of procedure: it’s a coverup.

The fact is that Republicans have no good ideas on health; everything they want to do will make huge numbers of people worse off, to the benefit of a wealthy few. And they know this. They know that the campaign against Obamacare was based on lies from the beginning, that all their complaints about things like high deductibles were hypocritical. They know that what they’re about to do is terrible. But they’re trying to do it anyway — and the only way they have a chance is by breaking every rule of good governance, by making the process so rushed and secretive that nobody has a chance to say “Wait a minute– what are we doing?” Den Rest des Beitrags lesen »

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Shaking Russia’s Weak Economic Hand

Posted by hkarner - 6. Juli 2017

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Pure Class Warfare, With Extra Contempt

Posted by hkarner - 26. Juni 2017

In this sense – and in only this sense – what we’re seeing now is a departure from previous Republican practice.

In the past, laws that would take from the poor and working class while giving to the rich came with excuses. Tax cuts, their sponsors declared, would unleash market dynamism and make everyone more prosperous. Deregulation would increase efficiency and lower prices. It was all voodoo; the promises never came true. But at least there was some pretense of working for the common good.

Now we have none of this. This bill does nothing to reduce health care costs. It does nothing to improve the functioning of health insurance markets – in fact, it will send them into death spirals by reducing subsidies and eliminating the individual mandate. There is nothing at all in the bill that will make health care more affordable for those currently having trouble paying for it. And it will gradually squeeze Medicaid, eventually destroying any possibility of insurance for millions. Den Rest des Beitrags lesen »

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Making Ignorance Great Again

Posted by hkarner - 6. Juni 2017

Date: 05-06-2017
Source: The New York Times: Paul Krugman

Donald Trump just took us out of the Paris climate accord for no good reason. I don’t mean that his decision was wrong. I mean, literally, that he didn’t offer any substantive justification for that decision. Oh, he threw around a few numbers about supposed job losses, but nobody believes that he knows or cares where those numbers came from. It was just what he felt like doing.

And here’s the thing: What just happened on climate isn’t an unusual case — and Trump isn’t especially unusual for a modern Republican. For today’s G.O.P. doesn’t do substance; it doesn’t assemble evidence, or do analysis to formulate or even to justify its policy positions. Facts and hard thinking aren’t wanted, and anyone who tries to bring such things into the discussion is the enemy.

Consider another huge policy area, health care. How was Trumpcare put together? Did the administration and its allies consult with experts, study previous experience with health reform, and try to devise a plan that made sense? Of course not. In fact, House leaders made a point of ramming a bill through before the Congressional Budget Office, or for that matter anyone else, could assess its likely impact. Den Rest des Beitrags lesen »

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Trump Gratuitously Rejects the Paris Climate Accord

Posted by hkarner - 2. Juni 2017

Date: 02-06-2017
Source: The New York Times By Paul Krugman

President Trump on Thursday announcing the United States’ withdraw from the Paris climate change accord.

As Donald Trump does his best to destroy the world’s hopes of reining in climate change, let’s be clear about one thing: This has nothing to do with serving America’s national interest. The U.S. economy, in particular, would do just fine under the Paris accord. This isn’t about nationalism; mainly, it’s about sheer spite.

About the economics: At this point, I think, we have a pretty good idea of what a low-emissions economy would look like. I’m sure that energy experts will disagree on the details, but the broad outline isn’t hard to describe.

Clearly, it would be an economy running on electricity — electric cars, electric heat, with internal combustion engines rare. The bulk of that electricity would, in turn, come from nonpolluting sources: wind, solar and, yes, probably nuclear.

Of course, sometimes the wind doesn’t blow or the sun shine when people want power. But there are multiple ways to deal with that issue: a robust grid that can ship electricity to where it’s needed; storage of various forms (batteries, but also maybe things like pumped hydro); dynamic pricing that encourages customers to use less power when it’s scarce and more when it isn’t; and some surge capacity — probably from relatively low-emission natural-gas-fired generators — to cope with whatever mismatch remains. Den Rest des Beitrags lesen »

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Understanding Today’s Stagnation

Posted by hkarner - 24. Mai 2017

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What’s the Matter With Europe?

Posted by hkarner - 5. Mai 2017

Date: 05-05-2017
Source: The New York Times By Paul Krugman

On Sunday France will hold its presidential runoff. Most observers expect Emmanuel Macron, a centrist, to defeat Marine Le Pen, the white nationalist — please, let’s stop dignifying this stuff by calling it “populism.” And I’m pretty sure that Times rules allow me to state directly that I very much hope the conventional wisdom is right. A Le Pen victory would be a disaster for Europe and the world.

Yet I also think it’s fair to ask a couple of questions about what’s going on. First, how did things get to this point? Second, would a Le Pen defeat be anything more than a temporary reprieve from the ongoing European crisis?

Some background: Like everyone on this side of the Atlantic, I can’t help seeing France in part through Trump-colored glasses. But it’s important to realize that the parallels between French and American politics exist despite big differences in underlying economic and social trends. Den Rest des Beitrags lesen »

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Why Don’t All Jobs Matter?

Posted by hkarner - 18. April 2017

Date: 17-04-2017
Source: The New York Times Paul Krugman

President Trump is still promising to bring back coal jobs. But the underlying reasons for coal employment’s decline — automation, falling electricity demand, cheap natural gas, technological progress in wind and solar — won’t go away.

Meanwhile, last week the Treasury Department officially (and correctly) declined to name China as a currency manipulator, making nonsense of everything Mr. Trump has said about reviving manufacturing.

So will the Trump administration ever do anything substantive to bring back mining and manufacturing jobs? Probably not.

But let me ask a different question: Why does public discussion of job loss focus so intensely on mining and manufacturing, while virtually ignoring the big declines in some service sectors? Den Rest des Beitrags lesen »

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Populism and the Politics of Health

Posted by hkarner - 15. März 2017

March 14, 2017 1:43 pm Krugman Blog

What’s next on health care? Truly, I have no idea. The AHCA is a real stinker, and now everyone knows it; ordinarily, that should doom the legislation. But everyone also knows that starting off the Trump legislative era with the crashing and burning of Obamacare repeal would deeply damage Trump; nobody believes what he says, but if he can’t even ram bills through, people will stop being afraid. So they will pull out all the stops.

But why are Republicans having so much trouble? Health reform is hard; but why were the Dems able to pass the ACA in the first place? I’m seeing a lot of talk about Paul Ryan’s inadequacy and Republican lack of preparation as compared with Pelosi and the Dems in 2009, all of which is true. But there’s a more fundamental issue: who is being served?

Obamacare helped a large number of people at the expense of a small, affluent minority: basically, taxes on 2% of the population to cover a lot of people and assure coverage to many more. Trumpcare would reverse that, hurting a lot of people (many of whom voted Trump) so as to cut taxes for a handful of wealthy people. That’s a difference that goes beyond political strategy. Den Rest des Beitrags lesen »

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