Well friends have fought with me on this, but there can no longer be any serious doubt about Paul Krugman and whose side he's on. The fact that he supports a bailout of Wall Street screams it undeniably. Don't be distracted by the " bad names" he calls the Bush administration by, or criticisms are of the bailout plan so far: he is comfortably ensconced deep in their well-worn pockets. Krugman's says it's okay to disagree over the details of the bailout, but there must be a bailout. BULL SH!T!
Before you suspend your disbelief let's recall some history. In 1913, J.P. Morgan and John D. Rockefeller publicly denounced the creation of the Federal Reserve while
privately, they spent millions pushing the bill through with Rockefeller's son-in-law, Rhode Island Senator Nelson Aldrich as their inside front man. It's a very popular and identifiable scam, argue about the wrong thing, just like the ban on short selling. Now, we argue over the details of the bailout plan, but not whether or not there should be a bailout at all. There should not be, no argument here, but that's not what Krugman and his pals want to hear.
Krugman gained a lot of the street credited with the main street crowd by criticizing the Bush administration and its economic policies harshly and often. Now he cashes in on that credibility to con you into supporting the very policies. He has been making the rounds scaring the hell out of people with the half of the truth that we are on the verge of meltdown to further the lie that the Wall Street bail out is the only thing that will avert it.
Look, Paul, even an out of work construction worker gets it, you can't keep giving your money away. Let's say I'm going along okay, then some CEO in a $50,000 suit comes up to me with a cup in his hand and I give him five bucks. Okay fine, I can deal with it. But then another one comes up wanting more, then another one. Before you know it all the bankers are chasing me down Wall Street, and they won't leave me alone until I am stone cold penniless. I get it Paul; why don't you?
Don't stop there Paul
There is a bipartisan agreement, except for a" rump of true Republican believers" that we need a gigantic rescue plan.Well that's a rump of the statement, Paul, there is always bipartisan agreement these days, but presumably included in that rump is Ron Paul and his economic policies. If those policies had been practiced since you got out of grad school we wouldn't be in this rump of mess now you @#$%! But he's good, this Krugman, sounding very responsible when he tells you unless something is done businesses will no longer be able to finance as they have to.
Nobody can get a loan, businesses can't get a loan so business sort of grinds two a halt.Nobody can get a loan because Wall Street burned up the credit market like a junkie on parole. That's what they're trying to do and get used to pay for it. That's what you're bailout will encourage them to do until we are in this mess again you rump of a rump, Paul. See what Paul's not telling you is that Wall Street borrows differently than Main Street. On Wall Street to issue bonds, commercial paper, debt.
Say a company needs one dollar to build something. Now whether or not, the company needs to borrow the dollar, it does anyway. It borrows in the form of a bond. So the company issues a bond, and sooner or later it must re pay that bond, along with the interest. So it issues two more bonds, with which it repays the first one, then issues four more bonds, to repay the last two, then issues 16 more bonds and so on and on forever they hope. All of this is done as electronic accounting, no money actually is repaid. As long as the paper keeps flowing and the river of credit continues to rage, companies will stay afloat on debt alone; who needs earnings?
Well that is called Ponzi finance and an old (dead) party pooping guy name Hyman Minsky proved that it can't go on forever. Specifically, that the revenue gained from a unit of Ponzi finance will be overwhelmed by the financing costs, the moment that the revenue gain equals the financing costs is called the Minsky moment. It's a wall and we hit it when the commercial paper market dried up.
So you see Paul all that borrowing is credit crack and your solution to the credit crack addiction is more credit crack; great doctor your. Krugman just wants to drag Main Street down into Wall Street's morass thereby making those not responsible for the problem pay those responsible for it.
Ron Paul points out that there are a number of things, government can do, silly things such as reduced spending, balanced budget, ect., but he's a rump of a Republican right Paul? Krugman is just playing his part in an old theater. The Wall Street insiders create a problem, and then give us the fix, keeping all the debate restrained to their fix.
The talking point here seems to be money market accounts. Watch Rachel Meadows, lead Krugman into the money market accounts. Despite her protestations of safe, more safe super safe and all other types of safe, money market accounts are investments, and pose risk. It is easy to see why they target money market accounts. It's mostly regular people, Main St. guys who have money market accounts, and of those accounts are unquestionably at risk, to a big market sell off. Krugman would have you believe along with the rest of them that it's necessary to bail out Wall Street to save Main Street's money market accounts. Well, I have news for you Krugman doesn't give a rat's rump about you or your money market account. He just says he does to get you to bail out his banker pals, he pretends not to like.
I have a better idea. Let's let the Ponzi finance units on Wall Street crash and burn as they're going to anyway and have the tax payer bailout the Main Street money market account holder. You think Krugman will be happy with that idea?
5 comments:
The Times is as deeply connected to Wall Street as the Journal, they just go about it differently. Think of it as the flagship paper version of the Republican/Democrat dog and pony show. The Politics of Distraction in full flood, from the poli pages to the eco.
I was arguing more than a year ago against the round of Fed injections in 2007 - that it was like supplying a junkie with more heroin.
Krugman lost me when he insisted that the run-up in oil was due strictly to demand in China. The same week that the report about Vitol having 11% of all contracts, etc.
Your entire screed against Krugman is not based on any kind of logical argument, and simply boils down to this: because Paul Krugman supports an amended version of the bill he must be a sellout and a traitor.
As economists go, very few have thought longer, or been more influential on the economics of speculative attacks, financial meltdowns and resolving debt crises than Paul Krugman. Part of his early fame came from proposing solutions to the Latin American Debt crises of the 1980s that involved debt forgiveness.
If you had been paying any attention to what he has been writing you would understand that his favored plan is the Swedish model (which in so many words involves temporarily nationalizing the illiquid institutions, in order to fire management and re-capitalize and eventually sell them back, hopefully at a profit.
Since he understands that can't be sold he's willing to bite his tongue and join the modified Paulson plan because it does at least give taxpayers some equity ownership and because it buys up a large part of the mortgage backed securities and gives authority to allow for the rewriting of mortgage contracts, which is essential in order to provide debt forgiveness to home-owners.
As an economist Krugman is known for a few other things as well, one of which is for being one of the most serious students of the 15 year slump in activity that Japan experienced after the bursting of its housing bubble, when Japanese authorities failed to build any type of adequate financial relief program.
Krugman is as angry as the next guy at what happened, it's just that he doesn't think the whole country and much of the world should be punished by ideologues like yourself who have no viable alternative and believe that somehow a good painful contraction will have positive 'cleansing' effects for the economy.
That was exactly the Hoover view, or as Krugman has often pointed out the International Monetary Fund's 'hangover' theory, which essentially says that countries that get into financial mess should endure punishing recessions and high interest rates to 'punish' them for living beyond their means. Sounds good to the puritans amongst us, but ultimately means longer unemployment lines and longer lasting poverty and destitution.
It's sad that you should essentially embrace these views.
Krugman replies to your argument:
http://krugman.blogs.nytimes.com/2008/10/01/bailout-narratives/#
pause and think harder
because Paul Krugman supports an amended version of the bill he must be a sellout and a traitor.
It is an old and tired ploy. It was used by J.P. Morgan and John D. Rockefeller who publicly criticized the Federal Reserve Act of 1913, but privately supported and funded it.
Part of his early fame came from proposing solutions to the Latin American Debt crises of the 1980s that involved debt forgiveness.
It appears that he now favors payoffs to corporate raiders in place of debt forgiveness.
temporarily nationalizing the illiquid institutions, in order to fire management and re-capitalize and eventually sell them back, hopefully at a profit.
No nationalization is necessary since the failing of a banks is a de facto firing of the CEO anyway.
..., Paulson plan because it does at least give taxpayers some equity ownership and because it buys up a large part of the mortgage backed securities and gives authority to allow for the rewriting of mortgage contracts
Why dou assume taxpayers want equity in crappy mortgages that have such a small chance of being repaid that only the government is willing to buy and rewrite them? We don't!
, which is essential in order to provide debt forgiveness to home-owners.
It may indeed be essential in order to provide debt forgiveness to homeowners, but I am not in favor of debt forgiveness to homeowners anymore than I am in favor of debt forgiveness to CEOs.
when Japanese authorities failed to build any type of adequate financial relief program.
Oh but $2 trillion payout to the likes of Flud, Diamond and in Killinger is an adequate relief program.
Krugman is as angry as the next guy at what happened
Oh is he now, you spoke to him?
it's just that he doesn't think the whole country and much of the world should be punished by ideologues like yourself
You know less about me than you do Krugman.
The country has already been punished by 80 years of Ponzi finance, is being crushed by debt ($10 trillion today in fact (http://calculatedrisk.blogspot.com/2008/09/national-debt-to-exceed-10-trillion.html))and the bailout bill is simply the coup de grace.
and believe that somehow a good painful contraction will have positive 'cleansing' effects for the economy.
Bailout bill or no there will be a painful contraction, brought to us by Wall Street whiz kids who attempted to securitize mortgages from deadbeat borrowers and offload them onto someone else is balance sheet via a SIV. Since it was all a scam to begin with there will be nothing positive about it,
The Viable alternative is to let the scammers go down screaming and save the taxpayer $2 trillion.
the International Monetary Fund's 'hangover' theory, which essentially says that countries that get into financial mess should endure punishing recessions and high interest rates to 'punish' them for living beyond their means.
The international monetary fund hides behind its hangover theory, like the bartender who blames you for leaving his bar drunk, or even like Alan Greenspan who warns about irrational exuberance over the bubble that he just blew up. You missed that scam too.
and that's the problem with trying to believe Krugman. He knows better!
He surely knows what an out of work construction worker does which is, you will go broke lending to billionaires who use every dime you lend them to bleed you to your last red cent.
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