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Krugman, take a victory lap: University Grad Student Debunks Major Austerity Theory by Exposing Flawed Stats


krugman victory lap

Speaking of how austerity is “having a devastating effect on health in Europe and North America, driving suicide,” here is your Daily Dose of BuzzFlash at Truthout, via my pal Mark Karlin:

It's about time Paul Krugman took a victory lap – and he does in his Monday New York Times column:

...People like me predicted right from the start that large budget deficits would have little effect on interest rates, that large-scale “money printing” by the Fed (not a good description of actual Fed policy, but never mind) wouldn’t be inflationary, that austerity policies would lead to terrible economic downturns. The other side jeered, insisting that interest rates would skyrocket and that austerity would actually lead to economic expansion. Ask bond traders, or the suffering populations of Spain, Portugal and so on, how it actually turned out. [...]

Some... see the crisis as an opportunity to dismantle the social safety net. And just about everyone in the policy elite takes cues from a wealthy minority that isn’t actually feeling much pain. [...]

[A] Univeristy of Massachusetts graduate economic student... discovered major statistical errors in the primary research paper (authored by Carmen Reinhart and Kenneth Rogoff) used by advocates to justify austerity measures. [...]

Herndon proved that their database and coding was so statistically flawed as to offer little basis for justifying national austerity measures as a viable economic option.

In an April 19 column, Krugman discusses the torpedoing of the academic austerity touchstone:

... Reinhart-Rogoff ... tipping-point claim was treated not as a disputed hypothesis but as unquestioned fact. [...]

[S]ome correlation between high debt and slow growth, with no indication of which is causing which, but no sign at all of that 90 percent “threshold.” [...]

What the Reinhart-Rogoff affair shows is the extent to which austerity has been sold on false pretenses. For three years, the turn to austerity has been presented not as a choice but as a necessity. ... But “economic research” showed no such thing... Policy makers abandoned the unemployed and turned to austerity because they wanted to, not because they had to.

It took a university grad student to reveal research that powered the likes of Americans for Prosperity, ALEC, the Club for Economic Growth and most of the politicians in DC – when it comes to being cheerleaders for austerity – as highly flawed.

(You can read the University of Massachusetts study that finds the "austerity bible" coding errors here. It was co-authored by Mass U Professors Michael Ash and Robert Pollin.)

Please read the entire post here.


VIDEO-- Paul Krugman: "There's a little bit of pig in all of us. I speak from personal experience."


that's all folks

As I mentioned here, enough about President Obama’s “controversial comments” on Kamala Harris. He and she are friends, he made a quip in that context, and started out by saying how brilliant, dedicated and tough she is. Yes, it was bound to raise many an eyebrow, but it also didn’t deserve all the attention and air time it's been getting.

Here is Paul Krugman on "This Week with George Stephanopoulos." There's a 4-second lag at the beginning of the video due to my continued ineptitude at grabbing segments.

George Will:

We've always from time immemorial had that guy at the end of the bar nursing his third beer and venting his opinions. Now they do it, thanks to progress, on the Internet. And it creates this echo chamber.

George Stephanopoulos:

You were the victim of a lot of free speech on the internet.

Paul Krugman:

... It was dumb. And it's right to slap him for it. But you know, there's a little bit of pig in all of us. I speak from personal experience. So there we are.

So there we are. Oink.

Did I mention how glad I was that Paul Krugman appears on these shows?

Here is the entire Roundtable segment:


BREAKING NEWS: U.S. Budget Deficit Falls in February from Year Prior


shrinkage smaller

Guess who this breaking news alert is from? Fox Business. But do you think that will stop conservatives and the trolls on Twitter, Facebook, the Internets, the Tee Vee and Radio Machines, and this blog from denying that this news is true?

Times up. The answer is no. They'll read the following sentence and claim it's all a lie, even though it comes straight from Fox:

The U.S. federal budget deficit came in at $203.5 billion in February, slimmer than the $231.7 billion in the same month the year before.

Yes, the budget deficit is continuing to shrink under the evil black Kenyan Muslim commie Marxist president .

chart budget deficit shrinks 4 year low Steve Benen Maddow Blog Oct 2012

We have Dwindling Deficit Disorder. And as Paul Krugman also points out, Yes, We Have To Fix The Deficit Eventually–But Not Now.

The Maddow Blog's Steve Benen:

For the record, last year, over President Obama's first four years, the deficit shrunk by about $300 billion. This year, the deficit is projected to be about $600 billion smaller than when the president took office. We are, in reality, currently seeing the fastest deficit reduction in several generations.


VIDEO-- Paul Krugman: Jeb Bush is "one of those people who says 'frankly' just before he delivers a big whopper."


whopper home of the whopper

The roundtable on This Week with George Stephanapolous included (thankfully) Paul Krugman who was in good form, as Paddy pointed out in her post Video- Ron Johnson (R-WI) Gets the Facts Wrong on Social Security.

In the clip above, Krugman zinged the easily-zinged Jeb Bush, who said this:

"I haven't seen the seriousness of the president's-- efforts. I'd love to see a specific plan that really did reform-- bend the cost curve for Medicare and the entitlement system. I haven't seen it, so-- if there is-- through these talks, some kind of consensus that emerged, I don't think you should say, "No, no, no--" about anything.

"Frankly, there was already been one of the largest tax increases in American history a month ago. And frankly, we ought to be focused on sustained economic growth, which grows more revenue for people and for government than any tax increase-- that's been suggested, so there are a lot of things that could be done to create a real grand bargain. And-- let the process work. I'm hopeful that the president's sincere about this."

Paul Krugman didn't waste an opportunity:

"So, I just learned something really important from this interview about Jeb Bush which is he's one of those people who says 'frankly' just before he delivers a big whopper. So that 'frankly' we're going to deal with the deficit by economic growth. Come on. He has no plan. Anyway, that was impressive. It's an object lesson. I mean, he's just shown us the perils of political pandering. He wrote a book for the immigration debate the way it was a few months ago and got caught flat-footed by the way it shifted."


Here is the entire segment:


Video- Ron Johnson (R-WI) Gets the Facts Wrong on Social Security


I like Krugman's "non facts". I think he means lies. Via.


VIDEO-- Paul Krugman reacts to sequester madness: "This is not the time to be cutting at all." Oh, and spending has FALLEN.


chart graph government spending down under obama

Visit for breaking news, world news, and news about the economy

Ed Schultz:

"Government spending actually fell rapidly after the stimulus ended."

"The last time we saw spending cuts this deep was after the Korean War."

"Progressives, they don't want chained CPI. There's no indication it would ever help the economy." (Here’s what “chained CPI” would do.)

chart deficit cuts not taxes

Paul Krugman:

"These are especially dumb cuts."

"Austerity hurts even more than the standard estimates say."

"...We are demonstrating that we can't govern ourselves..."

"This was designed to be stupid."

"This is exactly what the doctor did not order."

"The fix-it is just repeal the whole thing. We shouldn't be doing any of this."

"This is not the time to be cutting at all."

"The budget deficit is an issue for the next decade, it's not an issue for now."

"We have capital with no place to go... The government should be taking advantage of that ... to be fixing stuff."

"It's insane, top to bottom."

"Not that [deficits] never matter, but they really don't matter right now."

"The budget deficit is a result of the crisis, not the cause of it."

"The main thing right now is... mass unemployment. Create jobs... Get those school teachers rehired. Fix those bridges."