Why Is Austerity The Preferred Response To Recession?

Paul Krugman applauds an article by an economist who blames right wing ideologues for placing deficit reduction above the need to reduce unemployment.  He takes that argument to the next level. Deficit reduction is not exclusive to the right wing.  The public believes that government deficits are bad and that they should be reduced by cuts in government spending.  That view is also held by mainstream journalists who are not enamored of right wing ideology.  President Obama made a similar mistake when he compared government spending to household spending.  The implication is that sensible households avoid debt and governments should follow suit.  He probably did not realize that the cuts in government spending to reduce budget deficits wiped out the impact of his stimulus program.

If the bread winner in a household loses a source of income from unemployment spending must be cut because it is difficult to borrow.  The household also pays lower taxes which deprives the government of tax revenue.  Governments collect less tax revenue in recessions.  Consequently, budget deficits would increase and governments would have to cut spending to balance their budgets.  When governments cut spending along with cuts in household spending the economy will shrink even further.

Trump Has Ignited A Civil War In The Right Wing Media

Trump has his supporters and his enemies in the right wing media.  Some of them love him and some believe that he has betrayed conservatism.  If you want to learn more about the right wing media stars, and how they relate to Donald Trump,  this article tell you all you need to know.  There is an incestuous relationship between the media stars and conservative politicians.  The politicians depend upon their support; Donald Trump has carefully cultivated them ever since he decided that he should be our president.  Most of them have jumped on the Trump bandwagon.  They have helped to create the alternative universe in which Trump has prospered.  Its not surprising that Trump's mistakes have done little to erode his support.  They are only perceived as mistakes in the other world in which I have lived most of my life.

Globalization, Automation and The Rise of Trumpism

This article describes the impacts of trade and automation on the labor market.  The results are predictable.  Domestic labor markets have become international labor markets; it is not surprising that jobs have moved from high wage countries to low wage countries and wages have fallen as the supply of labor has risen faster than the demand for labor.  Manufacturing has been the hardest hit by globalization because manufactured products account for the largest share of global trade.  One does not need to be an economist to see the results in the rust belt states.  In theory the process of deindustrialization would lead to a services economy that replaced low skilled manufacturing jobs with higher skilled, and higher paid, service sector jobs.  That would be the best of all possible worlds but it did not happen as it was imagined in theory.  The share of wages going to labor has dropped as profits have risen for many multinational firms.  We expect firms to do what they can to reduce costs and increase profits but we also expect governments to respond to problems that have arisen from globalization and automation.  Governments, especially in the US, have been happy to let market forces do their magic while they have largely ignored the economic and social consequences of rapid change.  We should not be surprised by the rise of populism in Europe and the US.  We have seen that before when governments have been unable or unwilling to respond to life changing events experienced by large segments of their population.  Populists like Donald Trump have been provided with an opportunity to seize control of governments which are believed to have created problems for which they have no solutions.  Trump does not understand the problems and he does not have any workable solutions.  That does not matter to many of his supporters.  He only has to amplify the problems that concern them and present himself as a change agent who understands their problems. 

Tom Friedman Can't Believe That We Could Choose A Clown For Our President

Tom Friedman watched the first presidential debate in horror.  Hillary Clinton got a passing grade but The Donald would have been better off if he had not shown up for the debate.  He has no idea about any of the topics under discussion, beyond the sound bites that uses on the campaign trail, and most of them are foolish lies. 

Friedman is not alone in assessment of The Donald.  The Arizona Republic has never endorsed a Democrat for president in its long history.  The Republic and major newspapers in other red states have also endorsed Clinton.  Many of their readers are not happy about this but the publishers have put the national interest ahead of their business interests.  Its a pity that the Republican Party leadership has failed to perform a similar civic duty.  They are too concerned about loosing the base that The Donald has won over to his side.  Most of the them are low information voters but there are also a large number of Republicans that should know better.  They must believe that The Donald can be controlled by a GOP Congress.  He will certainly recruit more traditional Republicans for advisers and for cabinet positions.  They will do little that will be of benefit to most of The Donald's base of supporters.
   

Video Of First Presidential Debate

There is a lot of interest in the US election and many do not have access to the first presidential debate.  I have been very critical of Donald Trump's candidacy.  You can view the debate by using this link.  Some of you will understand why some people like The Donald and some will understand why many believe that he is a terrible candidate.

Why The NY Times Ediitorial Board Does Not Support Donald Trump

The Editorial Board of the NY Times lists all of the reasons why Donald Trump should not become the President of the United States.  Its hard to imagine anyone less qualified to become the nation's president.  Its even harder to understand why so many citizens are going to vote for him.  Most of his supporters are sold on Trump as a celebrity personality who is different from the typical politicians who don't speak their language.  They don't get their information from the NY Times; they are informed by alternative media sources that extol Trump's virtues.  Many of them believe that the "mainstream media" have a liberal bias;  liberalism and progressivism are hateful to them.  Political polarization has never been as strong or as institutionalized as it is today in America.  Trump understands the polarization and he exploits it. The debates between Trump and Clinton won't change the outcome of the election very much.

Its one thing to be critical of the poorly informed segment of Trump's base but over 80% of registered Republicans intend to vote for Donald Trump.  Many of them are well informed but they believe that President Trump will behave like a traditional Republican after the election.  Trump's political campaign is primarily an advertising campaign designed to exploit a large market segment.  He will be totally compatible with the Republican Congress when he assumes the presidency and he will stack the Supreme Court with fellow conservatives.  Trump's improvement in the recent polls reflects the increase in his support from reluctant Republicans.

NY Times Endorses Hillary Clinton For President

The editorial board of the NYT explains why Hillary Clinton would be an excellent president.  The editorial board did not argue that we should vote for Clinton because her opponent would be a terrible choice.  They examined her strengths and weaknesses and concluded that her strengths overwhelmed the handful of mistakes that she made over a long and successful career in government.  Ordinarily, the editorial board would have compared the policies proposed by each candidate, and it would have endorsed the candidate who advanced the best approaches to the major problems that the nation faces.  The editorial board chose not to do so for a good reason.  Donald Trump is an empty suit; he has made extravagant claims about the problems that we face and he has not offered a detailed proposal on how the government would address any of them.  He claims that he should be our next president because he is Donald Trump.