He has a new hit piece on Hillary with-where else?-the Huffington Post.
"Well, Congress and the White House did indeed play the austerian card from mid-2011 onward. The federal budget deficit declined from 8.4% of GDP in 2011 to a predicted 2.9% of GDP for 2014. According to the International Monetary Fund, the structural deficit - sometimes called the “full-employment deficit”, and a measure of fiscal stimulus - fell from 7.8% of potential GDP to 4% from 2011 to 2014."
"Krugman has vigorously protested that deficit reduction has prolonged and even intensified what he repeatedly calls a “depression”, or sometimes a “low-grade depression”. Only fools like the UK’s leaders, who reminded him of the Three Stooges, could believe otherwise."
"Yet, rather than a new recession or an ongoing depression, the US unemployment rate fell from 8.6% in November 2011 to 5.8% in November 2014. Real economic growth in 2011 stood at 1.6%, and the IMF expects it to be 2.2% for 2014 as a whole. GDP in the third quarter of 2014 grew at a vigorous 5% annual rate, suggesting that aggregate growth for all of 2015 will be above 3%.."
"So much for Krugman’s predictions. Not one of his New York Times commentaries in the first half of 2013, when “austerian” deficit-cutting was taking effect, forecast a major reduction in unemployment or that economic growth would recover to brisk rates. On the contrary, “the disastrous turn toward austerity has destroyed millions of jobs and ruined many lives,” he argued, with the US Congress exposing citizens to “the imminent threat of severe economic damage from short-term spending cuts”.
http://www.theguardian.com/business/2015/jan/06/paul-krugman-got-it-wrong-austerity-jeffrey-sachs
I mean if I hadn't told you before reading this, you'd be forgiven to assuming it was written by Sumner.
My first reaction is the same as when Sumner says this-It has sure taken us a long time to get here. This has been the slowest recover on record. How then can austerians be crowing?
"I raise all this because Krugman took a victory lap in his end-of-2014 column on The Obama Recovery. For him, it has come not despite the austerity he railed against for years, but because we “seem to have stopped tightening the screws: public spending isn’t surging, but at least it has stopped falling. And the economy is doing much better as a result”.
"That is an incredible claim. The budget deficit has been brought down sharply, and unemployment has declined. Yet he now says that everything has turned out just as he predicted."
Sachs says he wants more government spending but that 'we have to pay for it.'
"To be clear, I believe that we do need more government spending as a share of GDP for education, infrastructure, low-carbon energy, research and development and benefits for low-income families. But we should pay for this through higher taxes on high incomes and high net worth, a carbon tax, and future tolls collected on new infrastructure. We need the liberal conscience, but without the chronic budget deficits."
Ok, time to sic Bill Mitchell on Sachs.
"Sachs v Krugman – No contest, Krugman wins"
There was an interesting article written by one Jeffrey Sachs, whose only notoriety, despite his own self-promotion, is that he was the principle promoter of the ridiculous doctrine of – Shock Therapy – which systematically ruined the nations it was applied to under the aegis of IMF structural reform. The latest article (January 6, 2015) – Paul Krugman has got it wrong on austerity – published by the UK Guardian, is a direct attack on Paul Krugman. I have no interest in defending Paul Krugman (nor would he be interested in such a defense). Rather, my interest is that Sach’s intervention is one of a growing number of articles that claim that austerity has worked! An extraordinary new historical revisionism is underway. The conservatives always try to rewrite history to suit themselves. This is the latest version of that long-standing exercise and deception."
http://bilbo.economicoutlook.net/blog/?p=29888
I'm glad Mitchell makes the point that Sachs' only notoriety is the Shock Therapy doctrine-that derives from Milton Friedman and the Chicago Boys-for the Monetarists it was 'Shock Policy.'
To be sure, Sachs tries to frame himself as a 'progressive' of some kind and a kind of JFK cultist.
"Jeffrey Sachs then coined the term “Shock Therapy” in the mid-1980s, when he was hired to turn these mad ideas loose on Bolivia (1985), who were unable to meet the harsh debt repayment schedules demanded by the IMF."
"Buoyed by his ‘success’ in elevating unemployment rates to astronomical levels, Sachs then paraded as a paid consultant in Eastern Europe and Russia."
"Hillary Clinton's speech on ISIS to the Council on Foreign Relations (CFR) showed clearly what to expect in a Clinton presidency: more of the same. In her speech, Clinton doubled down on the existing, failed U.S. approach in the Middle East, the one she pursued as Secretary of State."
"The CIA-led policy in the Middle East works like this. If a regime is deemed to be unfriendly to the U.S., topple it. If a competitor like the Soviet Union or Russia has a foothold in the region, try to push it out. If this means arming violent insurgencies, including Sunni jihadists, and thereby creating mayhem: so be it. And if the result is terrorist blowback around the world by the forces created by the US, then double down on bombing and regime change."
"In rare cases, great presidents learn to stand up to the CIA and the rest of the military-industrial-intelligence complex. JFK became one of the greatest presidents in American history when he came to realize the awful truth that his own military and CIA advisors had contributed to the onset of the Cuban Missile Crisis. The CIA-led Bay of Pigs fiasco and other CIA blunders had provoked a terrifying response from the Soviet Union. Recognizing that the U.S. approach had contributed to bringing the world to the brink, Kennedy bravely and successfully stood up to the warmongering pushed by so many of his advisors and pursued peace, both during and after the Cuban Missile Crisis. He thereby saved the world from nuclear annihilation and halted the unchecked proliferation of nuclear arms."
"Clinton's speech shows that she and her advisors are good loyalists of the military-industrial-intelligence complex. Her speech included an impressive number of tactical elements: who should do the bombing and who should be the foot soldiers. Yet all of this tactical precision is nothing more than business as usual. Would Clinton ever have the courage and vision to push back against the U.S. security establishment, as did JFK, and thereby restore global diplomacy and reverse the upward spiral of war and terror?"
http://www.huffingtonpost.com/jeffrey-sachs/hilary-clinton-and-the-is_b_8627042.html
This is a pure red herring in comparing Hillary to some idealized notion of JFK standing up against the CIA that is probably more fiction than fact.
What I see him doing is what he always does-trying to undermine and divide the Democratic party. He claims to be this concerned citizen about stuff like global poverty.
http://www.earthinstitute.columbia.edu/articles/view/1804
Yet the main thing he's been talking about during the Obama years is how Obama isn't doing enough austerity-he's one of these people obsessed with cutting the deficit and 'fixing Social Security.'
Here was Sachs in January-lambasting Krugman in terms that make him sound like Scott Sumner's twin-indeed, I seem to remember Sumner linking to him at the time.
"For several years, and often several times a month, the Nobel laureate economist and New York Times columnist and blogger Paul Krugman has delivered one main message to his loyal readers: deficit-cutting “austerians”, as he calls advocates of fiscal austerity, are deluded. Fiscal retrenchment amid weak private demand would lead to chronically high unemployment. Indeed, deficit cuts would court a reprise of 1937, when Franklin D Roosevelt prematurely reduced the New Deal stimulus and thereby threw the US back into recession.""Well, Congress and the White House did indeed play the austerian card from mid-2011 onward. The federal budget deficit declined from 8.4% of GDP in 2011 to a predicted 2.9% of GDP for 2014. According to the International Monetary Fund, the structural deficit - sometimes called the “full-employment deficit”, and a measure of fiscal stimulus - fell from 7.8% of potential GDP to 4% from 2011 to 2014."
"Krugman has vigorously protested that deficit reduction has prolonged and even intensified what he repeatedly calls a “depression”, or sometimes a “low-grade depression”. Only fools like the UK’s leaders, who reminded him of the Three Stooges, could believe otherwise."
"Yet, rather than a new recession or an ongoing depression, the US unemployment rate fell from 8.6% in November 2011 to 5.8% in November 2014. Real economic growth in 2011 stood at 1.6%, and the IMF expects it to be 2.2% for 2014 as a whole. GDP in the third quarter of 2014 grew at a vigorous 5% annual rate, suggesting that aggregate growth for all of 2015 will be above 3%.."
"So much for Krugman’s predictions. Not one of his New York Times commentaries in the first half of 2013, when “austerian” deficit-cutting was taking effect, forecast a major reduction in unemployment or that economic growth would recover to brisk rates. On the contrary, “the disastrous turn toward austerity has destroyed millions of jobs and ruined many lives,” he argued, with the US Congress exposing citizens to “the imminent threat of severe economic damage from short-term spending cuts”.
http://www.theguardian.com/business/2015/jan/06/paul-krugman-got-it-wrong-austerity-jeffrey-sachs
I mean if I hadn't told you before reading this, you'd be forgiven to assuming it was written by Sumner.
My first reaction is the same as when Sumner says this-It has sure taken us a long time to get here. This has been the slowest recover on record. How then can austerians be crowing?
"I raise all this because Krugman took a victory lap in his end-of-2014 column on The Obama Recovery. For him, it has come not despite the austerity he railed against for years, but because we “seem to have stopped tightening the screws: public spending isn’t surging, but at least it has stopped falling. And the economy is doing much better as a result”.
"That is an incredible claim. The budget deficit has been brought down sharply, and unemployment has declined. Yet he now says that everything has turned out just as he predicted."
Sachs says he wants more government spending but that 'we have to pay for it.'
"To be clear, I believe that we do need more government spending as a share of GDP for education, infrastructure, low-carbon energy, research and development and benefits for low-income families. But we should pay for this through higher taxes on high incomes and high net worth, a carbon tax, and future tolls collected on new infrastructure. We need the liberal conscience, but without the chronic budget deficits."
Ok, time to sic Bill Mitchell on Sachs.
"Sachs v Krugman – No contest, Krugman wins"
There was an interesting article written by one Jeffrey Sachs, whose only notoriety, despite his own self-promotion, is that he was the principle promoter of the ridiculous doctrine of – Shock Therapy – which systematically ruined the nations it was applied to under the aegis of IMF structural reform. The latest article (January 6, 2015) – Paul Krugman has got it wrong on austerity – published by the UK Guardian, is a direct attack on Paul Krugman. I have no interest in defending Paul Krugman (nor would he be interested in such a defense). Rather, my interest is that Sach’s intervention is one of a growing number of articles that claim that austerity has worked! An extraordinary new historical revisionism is underway. The conservatives always try to rewrite history to suit themselves. This is the latest version of that long-standing exercise and deception."
http://bilbo.economicoutlook.net/blog/?p=29888
I'm glad Mitchell makes the point that Sachs' only notoriety is the Shock Therapy doctrine-that derives from Milton Friedman and the Chicago Boys-for the Monetarists it was 'Shock Policy.'
To be sure, Sachs tries to frame himself as a 'progressive' of some kind and a kind of JFK cultist.
"Jeffrey Sachs then coined the term “Shock Therapy” in the mid-1980s, when he was hired to turn these mad ideas loose on Bolivia (1985), who were unable to meet the harsh debt repayment schedules demanded by the IMF."
"Buoyed by his ‘success’ in elevating unemployment rates to astronomical levels, Sachs then paraded as a paid consultant in Eastern Europe and Russia."
"He applied Shock Therapy to Poland in 1989 and later Russia."
"His shock therapy for Russia was a disaster and led to government price controls being abandoned and state enterprises being privatised. Not only did inflation rise quickly, but unemployment soared and individuals and households lost the savings that they had worked hard the years to build up."
"During the period he was consulting for the Russian government the health care and social services system collapsed, life expectancy went backwards (which was unprecedented for an advanced nation), real GDP fell by around 50 per cent and poverty rates increased by a factor of 10."
"In relative terms, the economic losses alone in the post-Soviet economies that embraced the Shock Therapy path were more than twice as large as the losses in America and Western Europe during the Great Depression."
"So Jeffrey Sachs does not have a great record for sound judgement when it comes to appraising the plight of a nation or the appropriateness of macroeconomic policies."
"During his Shock Therapy days, he claimed that his approach was providing a long-run solution and that poor short-term outcomes were to be expected."
As Mitchell points out, this commits the classic anti Keynesian fallacy of net seeing that the 'long run' is just a series of short runs.
Mitchell also notes that Sachs now preens himself as some sort of progressive.
Regarding specifically the Krugman post where Sachs crows that the US had austerity in 2013 and yet growth increased:
"Sachs then concludes that the coincidence of fiscal deficit falling and growth continuing proves that austerity works and economists such as Krugman were completely wrong."
"The conclusion then is that progressives should get over their opposition to austerity – Sachs now being a self-proclaimed progressive!"
Mitchell points out that a major error of Sachs-Sumner does this too-is to-and we can paraphrase Sumner here-reasoning from a change in the fiscal balance.
"So trying to work out whether it is the strength of the cycle that is driving the fiscal outcome or the fiscal decisions of government that is driving the cycle at any point in time is difficult."
"Further, we also have to measure the automatic stabiliser impact against some benchmark or ‘full capacity’ or potential level of output, so that we can decompose the fiscal balance into that component which is due to specific discretionary fiscal policy choices made by the government and that which arises because the cycle takes the economy away from the potential level of output."
"The deficit has shrunk in recent years also due to the increase in employment and income-not solely due to cuts in government spending. We did have austerity in 2013 but less in 2014. With the recent budget deal that increases spending above sequester levels till early 2017 this will be even less the case."
So overall, Sachs is a rather dubious source For Democrats to take at face value. His main goal is to divide and confuse Democrats.
"His shock therapy for Russia was a disaster and led to government price controls being abandoned and state enterprises being privatised. Not only did inflation rise quickly, but unemployment soared and individuals and households lost the savings that they had worked hard the years to build up."
"During the period he was consulting for the Russian government the health care and social services system collapsed, life expectancy went backwards (which was unprecedented for an advanced nation), real GDP fell by around 50 per cent and poverty rates increased by a factor of 10."
"In relative terms, the economic losses alone in the post-Soviet economies that embraced the Shock Therapy path were more than twice as large as the losses in America and Western Europe during the Great Depression."
"So Jeffrey Sachs does not have a great record for sound judgement when it comes to appraising the plight of a nation or the appropriateness of macroeconomic policies."
"During his Shock Therapy days, he claimed that his approach was providing a long-run solution and that poor short-term outcomes were to be expected."
As Mitchell points out, this commits the classic anti Keynesian fallacy of net seeing that the 'long run' is just a series of short runs.
Mitchell also notes that Sachs now preens himself as some sort of progressive.
Regarding specifically the Krugman post where Sachs crows that the US had austerity in 2013 and yet growth increased:
"Sachs then concludes that the coincidence of fiscal deficit falling and growth continuing proves that austerity works and economists such as Krugman were completely wrong."
"The conclusion then is that progressives should get over their opposition to austerity – Sachs now being a self-proclaimed progressive!"
Mitchell points out that a major error of Sachs-Sumner does this too-is to-and we can paraphrase Sumner here-reasoning from a change in the fiscal balance.
"So trying to work out whether it is the strength of the cycle that is driving the fiscal outcome or the fiscal decisions of government that is driving the cycle at any point in time is difficult."
"Further, we also have to measure the automatic stabiliser impact against some benchmark or ‘full capacity’ or potential level of output, so that we can decompose the fiscal balance into that component which is due to specific discretionary fiscal policy choices made by the government and that which arises because the cycle takes the economy away from the potential level of output."
"The deficit has shrunk in recent years also due to the increase in employment and income-not solely due to cuts in government spending. We did have austerity in 2013 but less in 2014. With the recent budget deal that increases spending above sequester levels till early 2017 this will be even less the case."
So overall, Sachs is a rather dubious source For Democrats to take at face value. His main goal is to divide and confuse Democrats.
No comments:
Post a Comment