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Paul Krugman Explains How France Has 'Done Better' Ecnomically During Covid

Paul Krugman Explains How France Has 'Done Better' Ecnomically During Covid

Although former President Donald Trump and his MAGA ally Steve Bannon have been enthusiastic supporters of Marine Le Pen — the far-right National Rally leader and White nationalist who lost to President Emmanuel Macron in France’s 2017 presidential election — many on America’s right have been quick to bash France over the years, including the country’s economic policies. But liberal economist and New York Times opinion writer Paul Krugman, in his January 14 column, argues that France’s economic policies during the COVID-19 pandemic have been a succ

ess.

“For as long as I can remember,” Krugman writes. “U.S. media coverage of the French economy has been relentlessly negative…. The data never actually supported this negativism. What was really going on, I believe, was that business and economic discourse in the United States is strongly shaped by conservative ideology — and given that ideology, France, with its huge social expenditure, high taxes and extensive economic regulation, should have been a basket case. So, reporting about France seized on every negative development as a sign that the long-awaited disaster was finally arriving.”

Krugman adds, however, that the French government’s economic policies have worked well during the pandemic. France, he notes, has “not only managed to avoid a huge plunge in employment, but has also surpassed its pre-pandemic level.”

“My sense is that many Americans still imagine that France suffers from mass unemployment — a vision that had some truth to it 25 years ago but has long been out of date,” Krugman writes. “And prime-age employment is where France has done astonishingly well during the pandemic…. How did it do that?”

Krugman continues, “When the pandemic forced economies into a temporary lockdown, Europe, France included, and the United States took divergent routes toward supporting workers’ incomes. We offered enhanced unemployment benefits; France offered subsidies to employers to keep furloughed workers on the payroll. At this point, it seems clear that the European solution was better, because it kept workers connected to their employers and made it easier to bring them back once vaccines were available.”

The economist notes that although France has “its anti-vaxxers,” the country has a higher COVID-19 vaccination rate than the United States. Nonetheless, Krugman points out that American liberals and progressives shouldn’t think that France is idyllic.

“I don’t want to romanticize the French economy or French society, both of which have plenty of problems,” Krugman observes. “And liberals who like to imagine that we could neutralize the anger of the White working class by raising wages and strengthening the social safety net should know that France — whose policies are to the left of U.S. progressives’ wildest dreams — has its own ugly White nationalist movement, albeit not as powerful as ours.”

The economist adds, “Still, at a time when Republicans denounce as destructive ‘socialism’ any effort to make America less unequal, it’s worth knowing that the economy of France — which isn’t socialist but comes far closer to socialism than anything Democrats might propose — is doing pretty well.”

Republished with permission from Alternet

Trump’s Investment Boom — And Other Economic Myths

Trump’s Investment Boom — And Other Economic Myths

What sort of machine is the economy? The common conception is that it’s a fragile and sensitive device, highly responsive to both good and bad government policies. Pessimists worry that one or two wrong moves from Washington will cause it to seize up. Optimists think the right change in tax or regulatory policy can supercharge it.
The administration shares this general outlook.

Early in Donald Trump’s presidency, he and his economic advisers hailed what was coming. With Trump’s policies, declared Stephen Moore, “four percent growth can and should be the new normal in America.” After the president signed his big tax cut, Lawrence Kudlow said, “We’re on the front end of an investment boom.”

It was a nice fantasy. In 2017, real GDP grew by 2.2 percent; in 2018, it increased by 2.9 percent. In 2014 and 2015, under Barack Obama, the figures were 2.5 percent and 2.9 percent.

The investment boom hasn’t happened. “A slim five percent rise in 2019 capital spending is in store, down from last year’s six percent gain,” reported Kiplinger last month. “That is a small annual gain compared with past decades, when double-digit increases in capital spending were relatively common.”

The administration didn’t have any magic dust. Economic growth appears to be settling down around the level that Trump disparaged when Obama was president. The new normal is not much different from the old normal.
The latest Wall Street Journal survey of 60 economists found that they expect real GDP growth to total less than 2 percent in the second, third and fourth quarters of 2019. In 2016, the term Stephen Moore used for that rate of growth was “sluggish.”

“It’s no surprise,” Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center, told WBUR. “Nearly everyone who looked at this, other than the Trump administration itself, felt that this would have very little effect on the economy.”

Trump’s critics, however, have also exaggerated his importance to the economy. Immediately after the election, Princeton economist and New York Times columnist Paul Krugman predicted a global downturn — though he quickly retracted that forecast. A year ago, Bank of America Merrill Lynch economist Ethan Harris warned that Trump’s trade war could cause a recession.

So far, however, the U.S. economy has kept chugging on along. Some sectors, particularly agriculture and autos, have suffered, but their troubles haven’t spread too far. The looming prospect of a bigger trade war with China and Europe has yet to throw much sand in the gears.

If anyone has shown presidents don’t matter for the economy, it’s Trump,” George Mason University economist Tyler Cowen told me. “All the uncertainty simply has not stalled the recovery.”

Other economists think Trump has had some effect on the economy. Says John Cochrane of Stanford University and the Hoover Institution, “The recent boost in growth does have something to do with deregulation.” Northwestern’s Robert Gordon says the tax cut boosted GDP growth, but only temporarily. He also says, “The uncertainties around tariffs and trade have contributed to caution on the part of businesses.”

But Trump has made less difference, for good or ill, than most people expected. The evidence suggests that for the most part, the economy is not fragile and flighty but sturdy and resilient. It’s not a lightweight canoe that requires endless adjustments and can be knocked off course by every ripple or breeze. It’s an aircraft carrier, moving forward in fair weather or foul and not easily stopped.

The tax cut that Trump said would be “rocket fuel” for the economy looks more like regular unleaded. The administration, however, is not about to admit that its policies are mistaken or ineffectual; it has to be that some powerful, sinister force is impeding them.

That would be the Federal Reserve, which the president and his allies blame for not cutting interest rates. But if his policies were as potent as we’ve been told, they would not wilt because our low interest rates are not a quarter-point or a half-point lower.

Back in 2016, Moore wrote: “The lesson of the Fed under Ben Bernanke and now Yellen is that easy money is no economic solution to this decade-long malaise. As economist Larry Kudlow puts it: ‘The Fed can print money, but it can’t create jobs.'” Now, they see easy money as the only hope.

Everyone knows how to take care of the economy, and often they’re wrong. Fortunately, it can usually take care of itself.

Trump Launches ‘Unhinged’ Two-Hour Twitter Rant

Trump Launches ‘Unhinged’ Two-Hour Twitter Rant

Being leader of the free world is a big job, as you are responsible for the needs of nearly 330 million people, help oversee one of the most important economies in the world, and also deal with foreign threats and other world crises.

Yet, despite all of that, Trump found two hours Tuesday morning to air his grievances with the media, congressional Democrats, Twitter, and the European Union in a series of unhinged tweets that are sure to kick off yet another round of speculation about his mental state.

The tweets began at 5:59 a.m. Eastern with a hate tweet against New York Times columnist Paul Krugman. Trump appeared to be angry with Krugman’s Monday column in which he accuses Republicans of being a “party that no longer believes in American values.”

“Paul Krugman, of the Fake News New York Times, has lost all credibility, as has the Times itself, with his false and highly inaccurate writings on me,” Trump tweeted. “He is obsessed with hatred, just as others are obsessed with how stupid he is.”

Melania Trump’s “Be Best” anti-bullying campaign has clearly yet to have a positive impact on her husband.

The tweets only got more unhinged from there.

In a subsequent tweet, the president again falsely claimed that the New York Times apologized to him for its 2016 coverage (that didn’t happen), and wondered if the Times would apologize to him again.

“But this one will have to be a far bigger & better apology,” Trump tweeted. “On this one they will have to get down on their knees & beg for forgiveness-they are truly the Enemy of the People!”

Yes, Trump actually tweeted that.

Trump then announced a Saturday night campaign rally in Wisconsin, which he’ll use to counter-program the White House Correspondents’ Association dinner. Given Trump’s tweet-storm, that rally is sure to be as off the rails as ever.

And he then accused Democrats of being “totally insane” — which given this bonkers tweet storm is one serious example of projection.

But wait, there’s more!

Trump went on to claim that because the economy is doing well, that means he should be “immune from criticism.”

“In the ‘old days’ if you were President and you had a good economy, you were basically immune from criticism,” Trump tweeted. “Remember, ‘It’s the economy stupid.’ Today I have, as President, perhaps the greatest economy in history…and to the Mainstream Media, it means NOTHING. But it will!”

Maybe Trump should have a conversation with Bill Clinton, whom Republicans relentlessly targeted and even impeached for an affair. Of course, not only has this president had an affair, which got him implicated in an illegal campaign finance scheme, but special counsel Robert Mueller detailed multiple instances in which Trump tried to obstruct justice in the Russia probe.

Trump the media critic then returned, as he praisedFox & Friends for being the best morning show and attacked MSNBC’s Morning Joe for being “Dumb and Sick” — his capitalization. The difference between the two shows? The latter criticizes Trump’s out of control conduct, while the former has guests who heap praise on Trump when no praise is warranted.

Trump also took Twitter to task, criticizing it for being “hard for people to sign on” to and “constantly taking people off list.” It appears someone needs to help teach the president how to remember his username and password.

Trump’s insane thread then ended on a positive note.

“KEEP AMERICA GREAT!” he shouted in all caps.

What a wild ride.

Published with permission of The American Independent.

Trump Will Name Heritage Foundation ‘Hack’ To Federal Reserve Board

Trump Will Name Heritage Foundation ‘Hack’ To Federal Reserve Board

Reprinted with permission from Alternet.

President Donald Trump plans to appoint right-wing “economist” Stephen Moore to the Federal Reserve Board, and people who know anything about actual economics (and basic factual reporting) are livid.

Moore, a fellow with the conservative Heritage Foundation, is best known for appearing on TV, talking about the economy, and completely botching his facts.

Paul Krugman, a Nobel Prize-winning economist and columnist for the New York Times, lambasted the nomination of Moore, whom he has sparred with many times in the past.

“Moore isn’t just a hack, with terrible judgment,” Krugman said on Twitter. “He’s a hack who has repeatedly shown himself unable even to get basic facts right.”

Binyamin Applebaum, another Times columnist, noted that Moore once “got so many facts wrong that the Kansas City Star’s editorial page editor vowed never to publish his work again.”

Indeed, he wrote a column trying to argue that low-tax states do better than high tax states, and he included this error-ridden passage:

No-income-tax Texas gained 1 million jobs over the last five years; California, with its 13 percent tax rate, managed to lose jobs. Oops. Florida gained hundreds of thousands of jobs while New York lost jobs. Oops.

In fact, as Kansas City Star columnist Yael Abouhalkah pointed out, in addition to choosing a particularly problematic time period to make this judgment, his numbers were just wrong:

Texas did not gain 1 million jobs in the 2007-2012 period Moore measured. The correct figure was a gain of 497,400 jobs.

Florida did not add hundreds of thousands of jobs in that span. It actually lost 461,500 jobs.

New York, with [its] very high income tax rates, did not lose jobs during that time. It gained 75,900 jobs.

Miriam Pepper, an editor of the Kansas City Star, told the Columbia Journalism Review after the incident that his errors were so egregious that she “won’t be running anything else from Stephen Moore.”

Krugman noted that, in addition to this spectacular mistake, Moore was completely unrepentant when his predictions about Kansas’ tax cuts were refuted.

“He made a bad prediction, which happens — but refused to learn from the error, falsified facts, and doubled down on his doctrine,” said Krugman.

Need more convincing? Here he is getting the budget deficit — a simple government accounting measure — completely wrong. Here he is completely botching the facts about the Reagan tax cuts. Here he is making up facts on CNN.

After spending much of his career shilling for the GOP, Moore has since become completely bought-in to Trump’s takeover of the party. Proving he’ll do anything to stay in the good graces of the Republican Party, the Heritage Foundation fellow wrote a book called Trumponomics: Inside the America First Plan to Revive Our Economy lavishly praising the president’s policies, despite increasing evidence that the White House’s boasting is baseless.

Which is just to say, given his record of repeating disgrace, he seems to have the perfect resume to appeal to a president who lives in the world of “alternative facts.”