This Is Going To Hurt Me More Than It Hurts You
by digby
... and other stupid sayings.
Krugman thinks that it's looking like one of those prolonged period of economic stagnation, like Japan in the 1990s, (which is really bad news for people my age.) And he thinks that people in charge know it, but that they've been successfully cornered by the deficit hawks, which will only make things worse:
I strongly suspect that some officials at the Fed see the Japan parallels all too clearly and wish they could do more to support the economy. But in practice it’s all they can do to contain the tightening impulses of their colleagues, who (like central bankers in the 1930s) remain desperately afraid of inflation despite the absence of any evidence of rising prices. I also suspect that Obama administration economists would very much like to see another stimulus plan. But they know that such a plan would have no chance of getting through a Congress that has been spooked by the deficit hawks.
In short, fear of imaginary threats has prevented any effective response to the real danger facing our economy.
Yeah, well, the political situation is likely to get even worse, in my opinion, particularly with the Obama administration pretty much throwing in their lot with the worst of the deficit hawks by appointing a commission made up of nothing but safety net slashers:
[M]embers of President Obama’s newly-formed National Commission on Fiscal Responsibility and Reform ...lack racial and gender diversity, and more importantly, they lack diversity of opinion. Their mantra is that “everything is on the table,” but their one member who has any expertise with respect to defense spending, for instance, is the CEO of a major defense contractor that devotes millions of dollars each year to lobby Congress for more defense spending.
“Everything is on the table,” they say, but the members appointed by the minority leaders in the House and Senate have made clear that they do not believe that the problems in this country stem from under-taxing, rather from overspending. The one area that they seem to be in agreement on -- and which they are in fact, focusing on like a laser -- involves programs that help the middle class and those Americans who are the most vulnerable. Even liberal Senator Richard Durbin has stated, “the bleeding-heart liberals… have to…make real sacrifices to strengthen our nation.”
The co-chairs, in particular, seem to have a clear agenda. Even before the commission held its first meeting, Erskine Bowles went on record before the North Carolina Bankers' Association saying that if the Commission doesn't "mess with Medicare, Medicaid and Social Security ... America is going to be a second-rate power" in his lifetime. (And he is already 64!) Alan Simpson, known for giving ugly voice to harsh, ageist stereotypes, described the future of the fiscal commission: "It'll be a bloodbath. Let me tell you, everything that Bush and Clinton or Obama have suggested with regard to Social Security doesn't affect anyone over 60, and who are the people howling and bitching the most? The people over 60. This makes no sense. You've got to scrub out [of] the equation the AARP, the Committee for the Preservation of Social Security and Medicare, the Gray Panthers, the Pink Panther, the whatever. Those people are lying... [They] don't care a whit about their grandchildren...not a whit."
If only Simpson could muster that kind of rhetoric for climate change. That really is going to kill his grandkids.
The deficit hawks are on a roll and they aren't going to stop just because we're looking at a lost decade or two. They have the opportunity, with a president who shares their goals and a congress that is desperate to hurt the American people, thus proving how responsible they are. There will be no more stimulus. The safety net will be much less generous. Retirement will be harsh for large numbers of citizens. There will only be pain (for the little people.) That's how our wealthy Daddies teach us our lessons.
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