11/14/09
Abstract: Paul Krugman
juggles fruits from different cannery bins[1] in a classic circus
performance that rings of the Russian Circus in its halcyon days. He has an
impressive array of hoops and ropes and noise makers to entice the marginalized
into accepting his little story for today. He now, quite audaciously, compares
the current unemployment rates of Germany with the U.S. using some A, B, C
alphabetic soup analogy that would be received as an insult to even an imbecile
as he unashamedly ignores the trends of the last 25 years of both countries and
focuses only on 2009’s year’s difference between A and B to make his sorry
point. Tables that date back to 1980 are provided here to illustrate this
omission. He then muses and wanders upon the plethoric wonderlands of
socialistic mechanisms that attack capitalism for a general solution to his
problem but brushes dangerously close to
the concept of temporary tax cuts now
being conjured as new ideas by the
worried left who now see Obama’s ‘recovery’ as a sham and a joke. The
suggestion of a formal tax cut for business is forbidden fruit in krugmanical
séances and is properly omitted here by the Nobel Prize Laureatte. Lamenting
the fact that 787 billion dollars did not moderate the upcoming
depression-levels of unemployment Krugman searches for government subsidies in
various veiled and jaded forms to keep little fingers busy and happy and arrives
at Kurzarbeitergeld—the German worker subsidy system. The idea is
wonderful except it seems to produce a net loss in tax revenues which prompts
us to wander aimless in the ether for an explanation as who will pay for this. As usual, there is no discussion of costs and
only abuse for capitalism—the process that embarrassingly provides nearly all
the tax revenues for this planet. This
is a classic bit of anything-but-capitalism-goes form of ‘objective’ thinking
offered in the classic liberal manner and the facts smothered by the quest for
something ‘different.’ Apparently, the
stimulus was not ‘different’ enough and we need a bigger one. The collapse of
our currency in a swamp of inflation would be ‘different’ too.
The
New York Times
(that is known affectionately as the Walter Duranty Papers[2] in
honor of their most beloved Pulitzer Prize winner) may be likened to watching
and then expertly commenting on some new and sensational TV programs while the
set is disconnected. The intellectually myopic structure of their articles is a
curious blend of rote propaganda[3][4][5][6],
noisy and erratic pandering to special interest groups such as unions and certified
Ouija board prophecy whose original concept can be traced back to 1848. No
matter what happens in the world, the analysis of any event must be viewed
through the prismatic lens of progressive visualizations. Persuasion is always
more important than truth and failure is always more important than success if
that success includes any contribution from capitalism.
Today,
we venture into an exciting admixture of economic partial truths and associated
political nostrums guided with song and tinsel waving by our resident economist
Paul Krugman[7][8][9][10][11][12]
as his works provide guidance, and hopefully, a platform for aggressive government
action by those currently in power. We are treated to an analogy on comparative
government policies [sans details of course] and we are thrilled to learn how
many planes and surfaces and points of singularity can be geometrically warped
into an ostensibly coherent message in a single setting.
The premise:
“Consider, for a moment, a tale of two
countries. Both have suffered a severe recession and lost jobs as a result —
but not on the same scale. In Country A, employment has fallen more than 5
percent, and the unemployment rate has more than doubled. In Country B,
employment has fallen only half a percent, and unemployment is only slightly
higher than it was before the crisis.
Don’t you think Country
A might have something to learn from Country B?”[13]--
Free to Lose By Paul Krugman Op-Ed Columnist Published: November 12, 2009 [Emphasis is mine in all quotes.]
Here are the
unemployment data with the caveat that the GDR data are not included here
before 1990.
|
Year
|
German
Un. rate[14]
|
US
Un. rate[15]
|
|
1980
|
3.359
|
7.1
|
|
1982
|
6.734
|
9.7
|
|
1984
|
8.058
|
6.1
|
|
1986
|
7.834
|
7.0
|
|
1988
|
7.735
|
5.5
|
|
1990
|
6.155
|
5.6
|
|
1992
|
6.342
|
7.5
|
|
1994
|
8.208
|
6.1
|
|
1996
|
8.667
|
5.4
|
|
1998
|
9.05
|
4.5
|
|
2000
|
7.525
|
4.0
|
|
2002
|
8.358
|
5.8
|
|
2004
|
9.775
|
5.5
|
|
2006
|
9.833
|
4.6
|
|
2008
|
7.404
|
5.8
|
|
2009
|
8.015
|
10.2
|
The
chart is shown in this link: http://i235.photobucket.com/albums/ee208/ryckpb/GermanvsUSUnemployment.jpg
Moving right along with
reality:
Consider,
for a moment, the predictable intellectual shallowness of this unsophisticated
offering: We are offered the prospect of
comparing two singular and isolated data points plucked from the mass of
information circulating in our universe and instantly incorporated into some
economic theory as if they defined some eternal trends. What direction does a
point point to? Anywhere! What we might learn about from this riddle is the
starting point for an exciting expansion of government and a new form of progressive
socialism where the government subsidizes those who have had their work hours
reduced in lieu of being laid off. But, that is an old story—not a new one.
The German Kurzarbeitergeld scheme:
“One particular measure that deserves close
attention is the reduced-hours compensation scheme (Kurzarbeitergeld), which
has been very successful in Germany Thursday 17
September 2009
Is Krugman aware of this
interesting measure?
“This story isn’t hypothetical. Country A is
the United States, where stocks are up, G.D.P. is rising, but the terrible
employment situation just keeps getting worse. Country B is Germany U.S.
“The alternative would be policies that
address the job issue more directly. We could, for example, have New-Deal-style
employment programs.”-- Free to Lose
By Paul Krugman
Failed attempts:
Apparently
the promises of Obama celebrated and orchestrated by Romer and Summers with
song and dance were not the right thing to do. Notice that tax cuts for corporations and a reduction
in ‘fees’
and nasty rules
not to mention restraining unionism are
not mentioned. The unions already had a version of this pay-for-no-work swindle at GM and the shrunken remains of
Chrysler. It is customary to avoid any mention of tax cuts in the presence of
liberals owing to their tendency to fall ill and desecrate the rugs and wall
paper with certain aromatic effluviums. We hear nothing to the effect that the
stimulus was phony from the onset and destined to fail anyway as it only boated
government with metastatic disease and failed to halt the unemployment rates
even though the books were cooked to say so.
The Christine
Romer Prophecy:
“…, even
with the large prototypical package, the unemployment rate in 2010Q4 is predicted to be
approximately 7.0%, which is well below the approximately 8.8% that would result
in the absence of a plan.”[17][18]--CNSNews.com Monday, July 06, 2009
The Christine
Romer Un-Prophecy: Did Romer recant?
“Most
analysts predict that the fiscal stimulus will have its greatest impact on
growth in the second and third quarters of 2009,” Romer said. “By mid-2010, fiscal stimulus will likely be contributing
little to growth.”[19]— Christine Romer Oct. 22
I thought we were at 10.2% unemployment and rising with
no end to the misery. Is it possible the stimulus was only a seedy payback to loyal
voters, SEIU thugs and to bloat government? The frantic effort to tell us that
‘jobs were saved’ is also a sick joke. Oh! NO, we saved jobs at only an
expenditure of printed money to the tune of $92,000 per job![20]
And, we only spent $24,000 per car on the Clunker Follies and a mere $43,000
on the housing scam. [21]
Now, that is ‘government’ by liberal standards.
Success revealed:
“And that’s what the Germans have done. Germany Germany
Two
points for Krugman! He has found a solution by probing the lower reaches for more
socialism! Well, at least this does not involve the dreaded tax cuts and he
does not have to denigrate the evil Tax-cut Zombies[22]
ring for a while. We can just print money and subsidize lost work time! What an
idea!
An analysis of this
novelty:
So,
on a theoretical basis and or illustration, we can assume we have a nation with
a factory and in this widget factory we have some employees who are busy
assembling widgets and then the sales drop so the manager decreases full
employment to, say 50%, for 2 of his 10 employees and the government picks up
the tab. Now, “9” employees work fewer
company hours to match the lower widget sales and the employer pays 5% less for
labor. That works? We can thus assume that the good news must be that
productivity is maximized or sustained [no idle hands and fingers] and that the
general efficiency of widget production is maintained. But, since the
government is now subsidizing the missing salaries for 5% of the workforce we
wonder where this money comes from? If the entire state depended upon Widgets
GmbH to fuel the total tax receipts then they now short 5% in revenues—are they
not? Surely, the government cannot tax the employee at his full rate! Or can they? This is not quite double dipping
as one of the employees would have been laid off and those tax proceeds lost
anyway and some unemployment expenditures would have been necessary. There is something fundamentally out of step
with business reality here. The government is subsidizing excess capacity! This
is a farce. This is inefficient and must affect the tax rate or
widget prices and lower tax returns from the widget company.
The
empire either borrows money for this 5% subsidy
or prints more money or increases the taxes on the Widget company 5% higher to
make up for the loss in revenue. How does this all work out? Is there an
attempt to make this system tax neutral?
If
the company is taxed 5% more on only 90% of production then that will probably
tear away some profits due to economies of scale. If the government prints 5% more money and
uses that to pay the half idle employees
then the money supply increases by 5% and inflation comes along and the
Widgets must be price elevated by 5% or else more workers have to be laid off.
Notice
that everybody apparently loses by this scenario as there is no way to subsidize defunct or
inefficient elements of business with government-derived tax funds without
creating a greater problem.
Notice too that if one employee was laid off [instead of two cut back
50%] and received half his salary as an unemployment benefit then this would be
a 5% loss to the system.
I can only see a 5% loss [or more] here. Any
suggestions on how go get around this?
But, who pays for this
and how??
We
already have ‘different’ [read different
from socialistic] methods to encourage employment and growth and these two
nasty words are tax
cuts and fewer government rules and regulations.
The tax credit idea
revealed:
“One version of the approach, to be unveiled
next week by the Economic Policy Institute, a labor-oriented research
organization, would give employers a two-year tax credit if they increased the size of
their work force or added significant hours of work (for example, making a
part-time worker full time). Employers would receive a credit worth twice the first-year payroll tax
for each new hire, amounting to several thousand dollars, depending
on the new worker’s salary.”[23]--
Support Is
Building for a Tax Credit to Help Hiring By Catherine Rampell
Published:
October 6, 2009 [Emphasis is mine in all quotes.]
The
payroll tax is complicated and includes income tax withholding and Social
Security taxes. [24]
It is difficult to believe that ‘stringy strings’ would not be attached to any
such program and that such entanglements would differ greatly from the TARPie’s Pox.[25] [26]
CEOs taking this potentially poisoned pill might have their businesses
constrained by those who whoop and slobber and squawk at the stars along with
the mystical palm readers in our government and be subject to a mountain of
paperwork and extra tax forms. The ‘savings’ offered under this plan is minimal
as it costs many thousands to hire and train a new employee but when some
business reasons compels a CEO to lay off an employee the reasons may be
significantly other than just financial. What happens if the employer finds out
that the employee is on drugs or a thief or an idiot? Do we subsidize this
person? Probably so in the warped context of liberal thinking.
Okay,
let’s think about this tax credit in
Widget terms: If we really want to eliminate the federal tax proceeds of a new
hire for 2 years and that tax is X [as
above] then where does the money to replace this lost revenue come from? For a company with 10 employees we now
subsidize the new employee with the amount of their tax liability—some 40% or
so counting FICA and FICM taxes. Thus, we have a 4% problem like the one we had
at 5% under the Widget follies supra.
A
critical inspection of this table and associated chart seems to make anyone
wonder why we should choose the German system since the US unemployment rate is
considerably lower from 1984 to 2008 [with one exception], a mere quarter of a
century, but, then the lefties are not so excited when they survey the full
facts and tend to cherry pick out jewels that give bit of scintillation to
their notions. This is part of their
show-and-tell mentality where any bauble that sparkles or shines and could be
traded for a lollipop is an instant advance in their culture. Three such ‘discoveries’ of this galactic
magnitude qualifies you for entrance into the Ivy League and start off with an independent
study and a guaranteed PhD in any area
you wish or invent. This full data range
is not mentioned in the mumblings of Krugman in this little propaganda piece and
only the last entries in the table seems to act as the magic fulcrum that drives this approbation of the
German system. All that was necessary to trash the 1980 to 2008 levels and
elevate them to absurd heights would have been for the greens to have won
control in Germany
Maybe
we should be different and start reading other
economists other than Krugman or one of his tribe. Losing is not
free in capitalism.
rycK
Comments:
ryckki@gmail.com
[1] Always a bit rotten in a place or two in
the tree fruit business and to ugly to be packed so they are cooked into jams,
jellies and baby food. A personal observation.
[2] In honor of that celebrated Communist
stooge and liar and winner of the Pulitzer Prize for the NYT . The color RED is used in my essays in honor of Walter Duranty,
a saint, if there could be one, in the Marxist Archives of Honor.
“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 Soviet Union which
only history could judge.”
http://en.wikipedia.org/wiki/Walter_Duranty
[3] Propaganda Gem: Krugman Distorts History as He Grubs for More Taxes.
[4] Propaganda Alert: The
New York Times Axes the Right Questions and then Answers Them with the Left
Answers.
[5] Political Lessons from the Fairy Tales by the New York Times: Propaganda
at Work.
[6] Propaganda
Lesson: Economics and Recessions from The NYT: A Long [Sad] Story and Stern
Tutorial on Tax Cuts.
[7] Paul Krugman Clarifies
the Outcome of the NJ Gubernatorial Race for Us: Spend More! Spend More! Spend
More!
[8] Paul Krugman Mumbles
about Misguided Monetary Mentalities and Offers Other Hokums about our Currency
[9] Krugman Confuses Bacchus, Baucus and Baloney with the Threshold for
Healthcare. Not Enough Big Government in
the Latest Episode
[10] Averting the Worst in
Liberalism as Contrasted by Paul Krugman. Tax and Spend our way to Prosperity.
[11] Rewarding Bad Actors by
More Bad Actors and Higher Taxes: A Krugman Gem
[12] Krugman Applies
Protosimian Logic to Health Care. Big Government and Higher Taxes! Of Course!
Krugman
Boils a Pot Boiler about Boiling Frogs. Another Propaganda Exercise Example.
Tax Alert!
[13] Free to Lose By Paul Krugman Op-Ed Columnist Published: November 12, 2009 http://www.nytimes.com/2009/11/13/opinion/13krugman.html?_r=1&hp
[20] 650,000
Strawdogs Bark at the Moon. The Obama ‘Recovery’ is a Numerical Monkey Circus
[21] Belligerent
Ignorance, Phony Economics and the Clunker Crusaders: Washington
[22] The
Tax-Cut Zombies By PAUL KRUGMAN
Op-Ed Columnist Published: December
23, 2005 . http://select.nytimes.com/2005/12/23/opinion/23krugman.html?hp
[23] Support Is Building for
a Tax Credit to Help Hiring By Catherine Rampell
Published:
October 6, 2009 http://www.nytimes.com/2009/10/07/business/07tax.html
2009
[25] Mental illness of the far leftist sort.
[26] A financial image of a harpy but uglier.
http://en.wikipedia.org/wiki/Harpie
[27] More Americans Doubt
Global Warming and Other Forms of EcoNazism
Krugman
Explains EcoNazism in the Warmest Terms. Tax Tax Tax
Friedman
Bawls about Balls and Can Show Nothing. EcoNazism and Propaganda at Work.
The
EcoNazis are Frantic for your Money!
A
Translation of the Bailout Plan for Detroit
Crime is Not a Crime Now if You are an EcoNazi
or Leftist Parasite and Act out of Fear.
Flop Ears the EcoNazi
Prophet of Doom Raises the Spectre of Disaster from GM Food Production
The
EcoNazis and Reality: Klaus Offers to Debate Al Gore.
300
Years of British Inbreeding Brings us Flop Ears the EcoNazi
Prophet of Doom
Reason
and Faith Assault the Phony EcoNazis and Their Lackeys. Wednesday, December 12, 2007 1:52 PM
[28] Flop Ears the EcoNazi Prophet
of Doom Raises the Spectre of Disaster from GM Food Production
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