Myths de Jour, Krugman and Me

 Krugman has a piece which resonates.  My comments precede his oped below.

The mythology of the "invisible hand" of "free market competition" working in "an efficient market" was pushed when it was profitable for American corporations and banks.

Krugman -- "...It's all downhill from here"

NYT Sept 6th 
Krugman -- Delusions of Recovery

"  I’ve had a couple of conversations lately with people who follow politics and public affairs, but aren’t that close to the economic discussion — and I’ve discovered that there are two comforting delusions still out there.

Delusion #1 is that we’re on the road to recovery, just more slowly than we’d like; to be fair, the White House keeps saying this.
But it’s not at all true. GDP is growing below potential; employment, even if you focus just on private employment, is growing more slowly than the working-age population. If you ask how long it will take us to return to, say, 5 percent unemployment on the current track, the answer is forever.

Delusion #2 is the belief that the stimulus may yet do the trick, because there are still substantial funds unspent. I tried to deal with this last year. The level of GDP depends not on total funds spent, but on the rate at which funds are being spent, which has already peaked; GDP growth on the rate of change in the rate at which funds are being spent, which peaked last year. It’s all downhill from here. "

Emphasis mine

The Economist on Democratic Woes and Unemployment

From the Economist ... emphasis mine

The Democrats may not merely lose the House in November, but the Senate too. How did it go so wrong?

Jul 22nd 2010

....

Its Democratic masters say that the 111th Congress has been bold, busy
and effective. Since starting work in the middle of an economic crisis
it has authorised $1 trillion or so of stimulus spending, steered GM and
Chrysler out of bankruptcy, pushed through health-care reform and
overhauled financial regulation
....

The Mosque

Job Cuts and Profits

Companies Wringing Huge Profits From Job Cuts - NYTimes.com

July 25, 2010
Industries Find Surging Profits in Deeper Cuts
By NELSON D. SCHWARTZ

By most measures, Harley-Davidson has been having a rough ride.

Motorcycle sales are falling in 2010, as they have for each of the last three years. The company does not expect a turnaround anytime soon.

Greenwald: What Collapsing Empire Looks Like

From Salon
Friday, Aug 6, 2010 12:07 ET

What collapsing empire looks like

By Glenn Greenwald

(updated below)

As we enter our ninth year of the War in Afghanistan with an escalated force, and continue to occupy Iraq indefinitely, and feed an endlessly growing Surveillance State, reports are emerging of the Deficit Commission hard at work planning how to cut Social Security, Medicare, and now even to freeze military pay.  But a new New York Times article today illustrates as vividly as anything else what a collapsing empire looks like, as it profiles just a few of the budget cuts which cities around the country are being forced to make.  This is a sampling of what one finds:

GDP Growth Rates, Debt and Tooth Fairies

Last Friday the Bureau of Economic Anaysis (a federal government bureau) issued their corrected GDP numbers for the last several years.  This post uses this updated data to begin the first of a few posts on Growth in a time of Debt.

Chart 1: BEA Quarterly Annualized Seasonally adjusted US GDP growth, 2005q1 thru 2010q2
_____________

Drones and Deficit Spending..

Let's see now, what were we saying about increased increased US federal government expenditures and deficit spending under the Obama Administration?



From the BBC Urdu service

Since January 2009 nearly 2,500 people have been killed in Pakistan as a result of US drones and Islamic militant attacks. The graphics above show how Islamic militant strongholds in the border area close to Afghanistan have been targeted by US drone aircraft, while, at the same time, Islamic militants have carried out attacks across Pakistan.

Missile attacks by US drones in Pakistan's tribal areas have more than trebled under the Obama administration, research by the BBC Urdu service shows.