States of Depression

Reagan HopeHere’s an article from Paul Krugman in the New York Times about the state of the economy, and this quote pretty much sums up his verdict: “In fact, if it weren’t for this destructive fiscal austerity, our unemployment rate would almost certainly be lower now than it was at a comparable stage of the ‘Morning in America’ recovery during the Reagan era.”

Krugman, a Nobel Prize winner in economics, is about as “liberal” (whatever the hell that means in 2012) as the korporate media will allow at this point. He has often been highly critical of Barack Obama, especially during the 2008 Democratic Party race, when he was one of the few to note Obama’s economic policies were already in campaign mode decidedly to the right of both Hillary Clinton and John Edwards.

That said, Krugman provides the following evidence:

One way to dramatize just how severe our de facto austerity has been is to compare government employment and spending during the Obama-era economic expansion, which began in June 2009, with their tracks during the Reagan-era expansion, which began in November 1982.

Start with government employment (which is mainly at the state and local level, with about half the jobs in education). By this stage in the Reagan recovery, government employment had risen by 3.1 percent; this time around, it’s down by 2.7 percent.

Next, look at government purchases of goods and services (as distinct from transfers to individuals, like unemployment benefits). Adjusted for inflation, by this stage of the Reagan recovery, such purchases had risen by 11.6 percent; this time, they’re down by 2.6 percent.

And the gap persists even when you do include transfers, some of which have stayed high precisely because unemployment is still so high. Adjusted for inflation, Reagan-era spending rose 10.2 percent in the first 10 quarters of recovery, Obama-era spending only 2.6 percent.

Of course, there’s many reasons behind this (two obvious ones are cutbacks on the state level aided by a lack of support from Washington and the extreme right-wing economics embraced by the GOP) but there’s a more obvious elephant in the room: Obamanomics is a primary cause for our current economic malaise. Indeed, his already right-wing campaign prescriptions hidden behind inane, context-free mantras like “Change” and “Hope” have been followed by actual policies which are even more reactionary than supposed liberal demon Ronald Reagan.

Krugman, even with his history of criticism against Team Obama, avoids these implications that his stats reveal. He also avoids the even greater indictment: for all the failures of George W. Bush and his reign, to blame the unemployment and tepid economy of 2012 on him would be untruthful. Barack Obama may have inherited a really bad hand, but his policies now are the bigger cause for economic woes than eight years of Bush Jr. This is all the more appalling when one considers Obama came into office with sixty out of 100 Senators, a decided majority in the HOR, and a supposed vast popularity with the public that desired leadership to combat the economic crisis.

The punchline: as the positions of Mitt Romney are even more reactionary that Obama’s, it appears that we are headed for a lost decade of economic malaise at least until 2016, and probably even further as the economic status quo shifts decidedly to the right.

Read Krugman in the NY Times

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  • Liam_McGonagle

    While I like a lot of what Krugman says, it must be admitted that he pulls his punches from time to time.

    Hardly a novel position, though.  The guy would be reduced to writing screed-y commentary beneath Disinformation(tm) articles if he didn’t make a minimum effort to tow the mainstream media line.

    • Dusty Dusterson II

      Given that Disinfo takes advertising money from Bancorp, H&R Block, AARP (!) and innumerable other corporate multinational conglomorates, their radical leftist stance seems insincere…

      • Liam_McGonagle

        Well, at least they bother to use the same name consistently, CerebralCaustic.

        Just havin’ ya on, sport.  I loves yah, really.  Not.  Maybe.

        Okay, fer reals here.  No more kidding: 

        “Who has the bigger cajones in your opinion?  The guy who’s willing to bite the hand that feeds him or the guy who makes sure everything passes Koch Brothers’ legal department before publishing?”

      • LanceHardpound


      • Monkey See Monkey Do

        So what news or blog sites do you recommend then? Or are you just trolling?

  • Dusty Dusterson II

    Dude, wait, what?

    Krugman just said that Reagan’s economic policies were better than Obama’s?

    We’re through the looking glass, people. 

  • Wfzlsster

    Just great, another Keynesian economist who wants the Federal Government to continue reckless spending with money it does not have. The spending always accomplishes one thing: more debt and higher inflation. Why isn’t talking about scaling back the military to a defensive force or does he think more military spending is good too? 

  • Atom322

    I have a question that’s been bugging me for some time: 
    Why does everyone on the right love Reagan so much? He was the start of darkness for America. An actor put on the throne of America by corporate interests. America was about freedom, innovation, glory, and progress up until we became a Superpower but even then we were still doing alright. Then Reagan entered office and the national debt shot through the roof, he cut welfare to the bone which left the homeless and the mentally unsound in the streets, his tax cuts ruined the economy which he tried to mend by raising them every year of his term after but failed, he shifted the majority income tax burden from the wealthy to the middle class which evolved into the modern day income gap, he ignored the biggest health crisis of the century: AIDS, handed chemical weapons over to Saddam Hussein, he armed the Taliban to the teeth, and he still holds the record for most appointed officials indicted and convicted under any president thus far! If anyone is to blame for the current state of affairs, it’s Reagan!

    • Eric_D_Read

      He gave great soundbite and he knew who he worked for. That’s all that matters in American politics.

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