The New York Times Propaganda Piece” Credit for the Recovery” is Discredited
Abstract: Another piece of propagandistic fluff appears like a fresh venereal lesion in the
The political maneuverings of the Walter Duranty Papers[1][2]—aka [the near-bankrupt] New York Times –is daily refreshed and carefully injected with the appropriate level of tears, whining, concern for the ‘poor’ and other nostrums while demanding that the government take away more and more of the citizen’s money by theft or, the more esoteric term cleptocracy, and spend it wisely. Today we are entertained by one Daniel Gross.[3] His book is apparently [I don’t have time to waste on such recycled fluff] a short laundry list of the evil doers who trashed our banking system and the text differs little from the canned songs from other contributors to the
[I present extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments or terms that run counter to the left. Comments on my comments are always welcome: ryckki@gmail.com.]
We begin with some financial fluff that is skillfully written so as to carefully avoid prudence in personal finance and offers us a veiled cliché about repeating history again [de ja vu all over again].
“EVERY time the
This lead-in is very typical of propaganda pieces where the conclusion is tightly wrapped in emotion, paraded in up front, is gratuitously sprinkled with the vaguest but most opportunistic rakings of the latrines of history and hauls out the solemn threats against this deadly practice. The theme is blazing with liberal iridescences from the first word in the first paragraph. Now, we must limit our amusement to watch our hero searching fruitlessly for the mechanism by which we can get the middle class to spend more money and finance the government’s far left social programs. Every element of propaganda appears in this piece. Debt is good.
The Evil Deeds are explained:
“Since the comprehensive, economy-wide debt bubble of the aughts burst spectacularly in September 2008, Americans, we are told, have rediscovered their inner skinflint. Indeed, the savings rate, which fell into negative territory in 2005 at the height of the boom, bounced back strongly. Through 2009 and thus far in 2010, Americans have been setting aside 5 percent to 7 percent of disposable income as savings.” --Credit for the Recovery By Daniel Gross
In the careful fabrication of effective propaganda pieces[5][6][7][8][9] and other blends of disinformation, we must be careful to set up some iconic cartoon characters that wander about in the social arenas entertaining the suckers while holding back their real intent. In today’s pedestrian whine this message is to advise all that your government can buy prosperity with higher taxes and more spending by Congress and the middle class. But, you must spend [without regard for financial prudence] like your government does.
He them amplifies his point with data cherry-picking and associated cliché mongering by citing the Federal Reserve, who apparently monitors things like this although they might trim a number here and there and have abandoned publishing their version of M3[10] money supply to show us their veracity. To wit:
The official line goes:
““Household debt contracted at an annual rate of 2 1/4 percent in the second quarter, the ninth consecutive quarterly decline,” the central bank reported last month. The outstanding balances of revolving credit accounts — i.e. credit cards — peaked in 2008 at a little less than $1 trillion, and have fallen for 22 straight months, to $827 billion in July 2010.” --Credit for the Recovery By Daniel Gross
The rebuttal then takes a mighty form:
This sounds very good to me. Our savings rate was probably negative for a decade or two so now we are saving for the future. This is a good idea. If we were to broach the idea that this mess has derived from a debt-deflationary spiral caused by too many people buying houses with zero down and with no credit, job history or proof of citizenship, then the notion of savings instead of debt might be indicated and received as praiseworthy.
Mechanical debunking exercises commence:
“It’s a great story — if you believe it.
In fact, though, since the Lehman Brothers debacle in September 2008, the nations’ total indebtedness has continued its inexorable rise, some measures of consumer debt are starting to rise again and the easy-money, no-money-down culture still prevails in crucial sectors.” --Credit for the Recovery By Daniel Gross
“Oh, and a look at the data suggests that the decline in personal debt is driven less by Americans giving up on credit cards than on credit card issuers giving up on Americans.”--Credit for the Recovery By Daniel Gross
I don’t buy this. There are too many static accounting methods lurking in the shadows of liberal think tanks that can excuse the debt or crime or anything else if there are potential votes on the drum to be had. He then rambles on about credit card usage, and the reemergence of credit card mail box stuffings and all that. His numbers are probably correct, or as correct as they can be after tempered with the political hammers, so what is he saying? I follow Dave Ramsey[11] on this point.
Here is part of it:
“And, believe it or not, that’s a good thing. The economic expansion that has been going along in fits and starts since June 2009 was initially powered by government stimulus and business investment. But for this recovery to mature, broaden and persist, the greatest economic force known to mankind — the American consumer — has to get back in the game.
In an economy in which consumers account for 70 percent of activity, credit is both a vital lubricant and the indispensable fuel. Money may make the world go ’round, but credit makes the gears of commerce run smoothly.” --Credit for the Recovery By Daniel Gross
Here are the missing essential parts of this stew:
[1] This article advocates spending and says nothing about the financial stability of the spender. There is the bold assumption that some initial government stimulus will launch off a cascade of spending and a recovery.
We are looking at some 15 million new mortgage foreclosures this coming year and we might want to inquire how this destructive debt fits in with the current political themes and where that debt might end up? Note that Fannie Mae and her idiot brother Freddie [or Fredo for a better comparison if vacationing on the lake] hold unknown trillions of dollars in toxic mortgage bundles and there is no discussion of caution or a remedy for debts and its destructive effects on society. This is a crude attack on the austerians[12] by one of the krugmanical lackeys. I think he was prompted.
[2] Business leaders have essentially stalled hiring and are very cautions about borrowing. The reason here is the uncertainty of business operation in this acutely anti-business atmosphere where fees and taxes on everything in sight has been either touted or incorporated into massive bills like the phony Obama Health Care. Unlike our phony government, they cannot print money to bail themselves out of bankruptcy if they err. Our government can spend wildly with the comfortable notion that all their mistakes can be publicly smoothed over by soothy seers and other frauds like our author today and the tax payer can happily pick up the bills in the name of progress.
[3] The unemployment level is about 9.6% using the phony government accounting system that ignores those who have given up trying to find a job or have run out of their 99 month unemployment gifts. The real level, now counting those who double dip on the unemployment and work under the radar is about 18%. Illegal aliens are never counted nor are their failure to file state and federal tax returns. We are cast adrift as to how spending will increase when so many are unemployed.
Interrupting this sequence momentarily for his conclusion we read that:
“Many of our largest and most significant industries still have business models that rely on the use of debt to purchase goods and services. Unless you’re a multimillionaire, it’s difficult to make significant purchases — college tuition, a Viking stove, a Toyota Prius, computers, jewelry, a house — out of savings or cash flow from wages. The renewed willingness and confidence to spend money we don’t have is vital to the continuing recovery.
John Maynard Keynes wrote of the paradox of thrift — if everyone saves, everyone becomes poorer, because demand for goods and services will fall. Here’s another paradox: Running up consumer debt may be a moral failure and a recipe for long-term damnation, but it also contains the roots of our short-term salvation.” --Credit for the Recovery By Daniel Gross [Emphasis is mine in all quotes.]
Referring back to a previous blog we note that the stimulus or QE1 was not successful in sustaining growth because as soon as these expensive perks were spent the borrowing and spending by consumers just halted:
“It is of interest here to wonder how massive deficit spending on foolish stuff is effective in any way. The consequences of debt are always ignored. The Obama stimulus #1 has not worked and neither did cash for clunkers or the housing subsidies. The recent ‘jobs’ program spent $92,000 per job[13] and, then, we spent $24,000 per car on the Clunker Follies and a mere $43,000 per house on the housing scam.[14] And, none of these had a lasting effect. All of the money to propel this was either borrowed or printed up quickie fashion by our government. I wonder why Krugman cannot seem to defend or explain why these failed as he seems to cover up this offal with some nostrums about caution or insufficiency. In the lexicon of the left the word failure is always used as the limiting case. We failed to spend enough…or we failed to tax the rich some more or… When confronted with a stupid program like busing, War on Poverty, HUD, Welfare etc. there is silence. There is always a reason why such programs didn’t work out that well and they will recite the 1,2,3s above as the reason why the project was not exceptional.[15]
I homed in on the nauseating quotes of John Maynard Keynes that continue to promise us some recovery if the government would only spend and spend and spend. We find here a conundrum: although debt is described as a moral failure and a recipe for long-term damnation, we also read that this contains the roots of our short-term salvation.”
Here, the quirky and enigmatic interplay between opposing outcomes for debt is boldly factored into handy time elements. We can have fun now and pay later. A peek at our 13.4 trillion dollar national debt, hopelessly too high to ever be repaid and the servicing of this monster could be a economy killer if the rates rose to, say , 12%, shows us that the long-term damnation is with us now and will be for generations unless the inflation rate soars up to the stars and then it will conveniently vanish. This is not the time to repeat a horrible mistake.
This current fluff appears to be little more than a septic echo from the convoluted writings of Paul Krugman:
“And just as some of us feared, the inadequacy of the administration’s initial economic plan has landed it — and the nation — in a political trap. More stimulus is desperately needed, but in the public’s eyes the failure of the initial program to deliver a convincing recovery has discredited government action to create jobs.
In short, welcome to 1938.”-- 1938 in 2010 By Paul Krugman[16]
Or:
“Austerity is self-defeating: when everyone tries to pay down debt at the same time, the result is depression and deflation, and debt problems grow even worse. And conversely, it is possible — indeed, necessary — for the nation as a whole to spend its way out of debt: a temporary surge of deficit spending, on a sufficient scale, can cure problems brought on by past excesses.”-- 1938 in 2010 By Paul Krugman
Notice that these comments by both authors cited here mesh the spending mantas into a marvelous confluence of unified political thought.
Returning to my list:
[4] The source of this ‘credit’ is unknown or deliberately unspecified here. Apparently, since the government has already bankrupted us, the good citizens who have saved up their money and are frugal with letting it get that way are the target for this theme. Such greed! Such shame. Credit = money = equity is the eternal equation that specifies which flavor of money is to be spent. They want whatever we have—and, obviously, that is not enough.
We can only presume that the quest for ‘affordable housing’ [read a public bribe intended to pay back the low classes, who lack sense or the ability to handle finances as complicated as a mortgage] will be pursued. Note that QE, alone, could provide the means for this return to credit and spending, but since the country is sick of QE and the phony-baloney stimulus programs that have a fleeting effect on the economy are unwelcome. The Republicans threaten to turn off the money pumps. Thus, the casting of money from the roofs of the projects that could put all this cash in the hands of the good citizens is a closed option. But, that is not good politics when the liberals face a maelstrom of concern from their constituents and abandonment in the very near election. So, they troll from the stern of their little pontoon and hope.
This piece is but a crass plea to enlist the political help of those citizens who did manage to keep their financial house in order and have money socked away in fear of our government and its socialist policies. They know the government has lost control of all ethics and is now merely a zombie in search of cash. The financially able and conservative need some moral urgings or a promise that this will help the economy and they will be rewarded in some way. Prison is the usual option in the Marxist societies. The awkward piece addresses the hated bourgeois and gropes for their ill-gotten riches but the text cannot drift in that direction for political reasons. This current, preposterously sophomoric propaganda piece is set to ensure those who might spend too much that this debt would be a splendorous thing and egalitarianist to the highest degree. Go ahead and take a chance for us and spend.
Panhandlers and hookers have better intermezzos and sometimes offer some truth in their songs.
Let them eat cake in
rycK
Comments: ryckki@gmail.com
[1] The Babbling Brooks of the
[2] In honor of that celebrated Communist stooge and liar and winner of the Pulitzer Prize for the
“He said that these people had to be "liquidated or melted in the hot fire of exile and labor into the proletarian mass". Duranty claimed that the Siberian labor camps were a means of giving individuals a chance to rejoin Soviet society but also said that for those who could not accept the system, "the final fate of such enemies is death." Duranty, though describing the system as cruel, says he has "no brief for or against it, nor any purpose save to try to tell the truth". He ends the article with the claim that the brutal collectivization campaign which led to the famine was motivated by the "hope or promise of a subsequent raising up" of Asian-minded masses in the
[3] Daniel Gross, author of “Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation,” is the economics editor and columnist at Yahoo! Finance. http://www.amazon.com/Dumb-Money-Greatest-Financial-Bankrupted/dp/1439159874
[5] Krugman Applies Protosimian Logic to Health Care. Big Government and Higher Taxes! Of Course!
[6] Propaganda Gem: Krugman Distorts History as He Grubs for More Taxes.
[7] Propaganda Alert: The New York Times Axes the Right Questions and then Answers Them with the Left Answers.
[8] Political Lessons from the Fairy Tales by the New York Times: Propaganda at Work.
[9] Propaganda Lesson: Economics and Recessions from The NYT: A Long [Sad] Story and Stern Tutorial on Tax Cuts.
http://rycksrationalizations.townhall.com/g/2bea69e5-bb30-4923-9ed4-192199970c1a
[12] Another Leftist Bondage Scheme for the Bond Gods. Krugman Speaks of the Evils of the Austerians
http://ryckki.blogspot.com/2010/08/another-leftist-bondage-scheme-for-bond.html
[13] 650,000 Strawdogs Bark at the Moon. The Obama ‘Recovery’ is a Numerical Monkey Circus
[14] Belligerent Ignorance, Phony Economics and the Clunker Crusaders:
[15] Krugman Offers Us Canned Circular Revisionism: We Can Repeat the War Time Successes of FDR.
http://ryckki.blogspot.com/2010/09/krugman-offers-us-canned-circular.html
[16] Krugman Offers Us Canned Circular Revisionism: We Can Repeat the War Time Successes of FDR.
http://ryckki.blogspot.com/2010/09/krugman-offers-us-canned-circular.html
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