Paul Krugman: We're in "a Depression"
http://www.nytimes.com/2011/12/12/opinion/krugman-depression-and-democracy.html?src=me&ref=generalAnd that's the happy part! Later in the editorial, he writes of the situation in Europe:
Last month the European Bank for Reconstruction and Development documented a sharp drop in public support for democracy in the new E.U. countries, the nations that joined the European Union after the fall of the Berlin Wall. Not surprisingly, the loss of faith in democracy has been greatest in the countries that suffered the deepest economic slumps.
And in at least one nation, Hungary, democratic institutions are being undermined as we speak. One of Hungarys major parties, Jobbik, is a nightmare out of the 1930s: its anti-Roma (Gypsy), its anti-Semitic, and it even had a paramilitary arm. But the immediate threat comes from Fidesz, the governing center-right party.
Fidesz won an overwhelming Parliamentary majority last year, at least partly for economic reasons; Hungary isnt on the euro, but it suffered severely because of large-scale borrowing in foreign currencies and also, to be frank, thanks to mismanagement and corruption on the part of the then-governing left-liberal parties. Now Fidesz, which rammed through a new Constitution last spring on a party-line vote, seems bent on establishing a permanent hold on power.
Skittles
(160,705 posts)jannyk
(4,810 posts)TheWraith
(24,331 posts)The economy is picking up momentum.
On the bright side the economy will definitely be stimulated when we have to go to war against Hungary.
Ruby the Liberal
(26,338 posts)Remember Me
(1,532 posts)wrong damned evidence being used, then.
Some possible problems:
* The STOCK MARKET is not the ECONOMY.
* Corporate earnings, fluffed up by international sales, is NOT the ECONOMY (or not the whole picture).
Ruby the Liberal
(26,338 posts)its a sign of massive weakness if it isn't being circulated through the economy where the velocity factor can kick in.
DeathToTheOil
(1,124 posts)Stock markets are most definitely NOT economies.
Warpy
(113,131 posts)I have the advantage here. My grandmother kept a scrapbook all during the Depression and all during the Hoover years prosperity was just around the corner. I'm seeing the same thing here and now, any tiny positive sign in an otherwise dismal economic picture as proof we don't need to do anything but rein in spending and we'll all be rich again.
The movers and shakers are all claiming it's not Depression II because the stock market is still doing fine and the fact we're only losing a net 100,000 jobs a month is a lot rosier than losing 750,000 jobs a month when the Republicans were in charge.
The stock market is protected because it wasn't infected by the kind of debt that brought it down in 1929. They did that to housing, instead. It is infected by fraud that has spread out from the financial sector and it's not going to stay up forever. Maybe at that point it will get their attention.
Make no mistake, although we're not falling as fast as we were during Stupid's misadministration, we are still falling. Yes, it's a Depression. The only way out of it that has worked before is spending our way out of it. Austerity will only deepen it.
And don't kid yourself that the pablum in the press is proof that it's all over and prosperity is just around the corner. They're lying.
Ruby the Liberal
(26,338 posts)If only the Administration had chosen to fill the Econ seats with people like him and Dr Reich (or listened to Christina Romer once in a while) we might not be in this mess.
Larry Summers? Pffft. Might as well have put Bob Rubin at the helm.
Before I am accused of being an Obama basher - I said "Administration" for a reason. These leadership decisions were made by committee. No one human being would have the brain/mind capacity to vet and make that many personnel decisions in 10 years much less the space of a few short months.
Good read - recommended.
xchrom
(108,903 posts)dawg
(10,777 posts)The jury is definitely still out.
The austerity measures in Europe will be a disaster. At best, they will double-dip into another recession. The worst case is severe recession coupled with breakup of the euro and major political unrest.
If the US chooses to follow the path of austerity, we too will double-dip into recession. We might do so regardless, depending on the severity of the downturn in Europe.
For some reason, the Europeans (Germans), the Republicans, and Centrist Democrats have all concluded that FDR was full of shit in the 1930's and that Hoover had it right all along.
We do have a long-term budget problem that needs to be dealt with. But in the short-term, the economy still needs stimulus.
dixiegrrrrl
(60,011 posts)We may not be calling it that, but it appears to be happening:
All social services being starved, undermined.
Education system being destroyed.
Public services being privatized.
Unions being destroyed.
Sharp rise in attacks on children, unemployed, elderly.
A 2 tier health care system that is the leading cause of bankruptices.
Private wealth and housing being destroyed for the middle class and poor.
REAL unemployment at 20%, if not higher.
Trillions of dollars are being taken out of country in a myriad of ways.
Actually, the operative word is looting, massive full scale looting.
Which, from all I can read, is what the "austerity" is in European countries.
lovuian
(19,362 posts)hands of a few
a Depression occurs
until they allow the other 99% the ability to get assets
the Depression will keep going ...then usually a Revolution by the worker occurs
Marx is right
The Worker will rise up
It is economics pure and simple
Odin2005
(53,521 posts)Pachamama
(17,065 posts)While there have been some signs of the economy improving, they are fragile at best & being hindered from being better by the GOP blocking efforts by the Obama administration to provide economic stimulus. But what Krugman chillingly points out is the situation in Europe that is a grave danger not only to itself, but to the US economic & political situation.
The world economy & stability politically is teetering on the edge & dangerously close to authoritarian leanings and yes, revolution. Global revolution.
My family comes from Europe and I spend time there every summer. This last summer was very telling. Discussions in the Biergartens with my German family & friends were of wanting to go back to the Deutsch Mark & closing borders. Some feel very much pangs of Nationalism and others fear of memories from Germanys past. No one I spoke to either in Germany or from Spain, Italy, France or UK felt ok with the austerity measures being proposed & in fact the outrage expressed towards the banks, the EU and their own governments were filled with discussion of revolution & protest should things go that direction.
I fear that in the next 12 months that there could be a breakout of not only mass protests and revolt, but all out revolution both across Europe but also the US. I believe that groups with right-wing authoritarian leanings like the ones growing with power in Sweden, Finland, Norway, Austria, Italy, Spain etc have plans to take things in the direction similar to what Krugman described happening in Hungary. And if any one questions if it could happen here or that the US could become a police state or authoritarian establishment, I suggest looking at where we currently are and the response to the OWS protests around the country.
And dont kid yourself - the various Governments including our own know this is what we are teetering on.
Dan
(4,181 posts)That is a very serious statement "..next 12 months...", are you serious, revolution? Do you believe that they will internal (within their respective nation-states) or potentially across national boundaries?
Do you believe from what you discovered that we might be in for another 'at some future point' renewal of the world world events that we experienced in the past?
Is it possible that calmer heads might prevail?
You indicated that there are some with memories of the Germany's past - and the disaster contained within that past, do you think that there is such a loss of collective memory that we could see a return to the rise of a new strongman and all it entails?
Just curious... do you think that we are looking at a merging of governments or sharing of views between the governments with the view of keeping the common man in his place?
YOur thoughts that you care to share, would be appreciated.
Pachamama
(17,065 posts)Serious about everything I said about the world economy, political stability, even the possibility of revolution.
Revolution can come in many forms, the major shifting of views for example, not just in the physical war sense. But I dont discount that as a possibililty.
I believe history always repeats itself unless we learn from past mistakes & history itself. Unfortunately, most people dont read, study history, remember the lessons or have the intellectual curiousity to ask the important questions.
It is always possible that calmer heads prevail...hopefully...but I think globally people are getting fed up. Things are reaching a boiling point. People are hurting and getting angry and tired of the status quo or being told they are the ones having to take the austerity measures for the sake of the "establishment".
While there are those with the collective memory of the past, there are many who do not nor care to know....So yes, I do think that the same mistakes and possibilities exist for there to be a rise of a central figure, a "strongman" or movement, like we have seen before and of which Krugman referred to and I seconded similar to Hungary and frankly happening in many countries in Europe like I referenced. My grandparents who saw what happened in the lead up and aftermath of the 3rd Reich used to tell me it could happen anywhere and again. The danger they said is when people think it cant happen again or that they are exempt.
In terms of a merging of governments or sharing of views, I would make the argument that is already happening, in particular in the example of the EU which is why there is actually the backlash that has been growing against it and a rise in the more nationalistic and right-wing movements in many of these countries. The mass murder in Norway last summer at the youth camp and the rising number of neo-nazi/xenophobic/nationalistic members in various parliaments in various countries like Sweden, Italy, Austria etc is a reflection of that growing movement and is very real.
I very much believe that every government is very aware of the unrest and watching events ranging from the Arab Spring to Wikileaks to the Occupy Movement etc very carefully. Yes, they would like to make sure they keep the "common man" in their place. The status quo benefits them and what they fear most is the population getting fed up and yes, revolting.
Dear Dan, you & I have been posting on DU for many years, and I dont believe either one of us has ever been someone who says something that isnt serious or said without some serious thought...you in particular have always been someone I have recalled over the years who was infrequent, but quick to the point, short & no long rants.
I appreciate that you responded and asked me if I was serious and I hope I answered your question...
Dan
(4,181 posts)and I do appreciate your response... very thoughtful.
D
bluerum
(6,109 posts)DeathToTheOil
(1,124 posts)MisterP
(23,730 posts)in order to stay on the gold standard, because of how the system was set up
when 1989 came about, the EU insisted that, while the old, Western members could keep their welfare states, the East had to undo all laws passed before the Berlin Wall and start over with neoliberalism--so, in fact, Hungary's pollution got even worse, and only profitable free-market solutions like dumps and incinerators were considered
ellisonz
(27,764 posts)Flame away.
Maven
(10,533 posts)Why wouldn't you post the entire sentence?
ellisonz
(27,764 posts)Jefferson23
(30,099 posts)MannyGoldstein
(34,589 posts)Obama and Republicans just gave you a cherry on top - three new "free" trade agreements, with more in the works. I guess it just sucks to be the 99%.
pansypoo53219
(21,834 posts)nt
Starry Messenger
(32,375 posts)blackspade
(10,056 posts)People forget, which is why history is cyclical.
Damn depressing actually.