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Rurik_A

(12 posts)
Tue Dec 13, 2011, 04:23 AM Dec 2011

Paul Krugman: We're in "a Depression"

http://www.nytimes.com/2011/12/12/opinion/krugman-depression-and-democracy.html?src=me&ref=general

And that's the happy part! Later in the editorial, he writes of the situation in Europe:

Right-wing populists are on the rise from Austria, where the Freedom Party (whose leader used to have neo-Nazi connections) runs neck-and-neck in the polls with established parties, to Finland, where the anti-immigrant True Finns party had a strong electoral showing last April. And these are rich countries whose economies have held up fairly well. Matters look even more ominous in the poorer nations of Central and Eastern Europe.

Last month the European Bank for Reconstruction and Development documented a sharp drop in public support for democracy in the “new E.U.” countries, the nations that joined the European Union after the fall of the Berlin Wall. Not surprisingly, the loss of faith in democracy has been greatest in the countries that suffered the deepest economic slumps.

And in at least one nation, Hungary, democratic institutions are being undermined as we speak. One of Hungary’s major parties, Jobbik, is a nightmare out of the 1930s: it’s anti-Roma (Gypsy), it’s anti-Semitic, and it even had a paramilitary arm. But the immediate threat comes from Fidesz, the governing center-right party.

Fidesz won an overwhelming Parliamentary majority last year, at least partly for economic reasons; Hungary isn’t on the euro, but it suffered severely because of large-scale borrowing in foreign currencies and also, to be frank, thanks to mismanagement and corruption on the part of the then-governing left-liberal parties. Now Fidesz, which rammed through a new Constitution last spring on a party-line vote, seems bent on establishing a permanent hold on power.
29 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Paul Krugman: We're in "a Depression" (Original Post) Rurik_A Dec 2011 OP
that is some scary stuff indeed Skittles Dec 2011 #1
Excellent Article jannyk Dec 2011 #2
Actually, all the evidence seems to be that we're crawling OUT of the recession at the moment. TheWraith Dec 2011 #3
Um, wut? Ruby the Liberal Dec 2011 #5
ditto -- Remember Me Dec 2011 #15
Yup. Corporations hording cash is not a sign of strength either Ruby the Liberal Dec 2011 #21
Right DeathToTheOil Dec 2011 #25
You're buying that? Warpy Dec 2011 #14
I have much respect for Dr K. Ruby the Liberal Dec 2011 #4
Du rec. Nt xchrom Dec 2011 #6
I can see why some might think the term "depression" is overblown, but ... dawg Dec 2011 #7
We seem to be following path of austerity, don't you think? dixiegrrrrl Dec 2011 #9
Economics 101 when 90% of a country's assets are in the lovuian Dec 2011 #8
K&R Odin2005 Dec 2011 #10
We have been in a Depression the last year & worst to be felt is coming in 2012. Pachamama Dec 2011 #11
Are you serious? Dan Dec 2011 #22
Yes, I am serious.... Pachamama Dec 2011 #26
Thank you,... Dan Dec 2011 #28
Good grief. Half a dozen post WWI Germany economies. bluerum Dec 2011 #12
Merry fucking Christmas! DeathToTheOil Dec 2011 #17
in fact, in the 20s Romania, Bulgaria, Yugoslavia, and the other new countries bankrupted themselves MisterP Dec 2011 #13
"there’s no Hitler in sight." ellisonz Dec 2011 #16
"ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight." Maven Dec 2011 #18
I got really tired of all the Hitler/Nazi references... ellisonz Dec 2011 #19
Hail the oligarchs! n/t Jefferson23 Dec 2011 #20
Not if you're a banker or other member of the 1%. Then you're doing better than ever. MannyGoldstein Dec 2011 #23
wrong spelling. it's a depWession. pansypoo53219 Dec 2011 #24
k&r Starry Messenger Dec 2011 #27
Excellent read. blackspade Dec 2011 #29

TheWraith

(24,331 posts)
3. Actually, all the evidence seems to be that we're crawling OUT of the recession at the moment.
Tue Dec 13, 2011, 05:13 AM
Dec 2011

The economy is picking up momentum.

On the bright side the economy will definitely be stimulated when we have to go to war against Hungary.

 

Remember Me

(1,532 posts)
15. ditto --
Tue Dec 13, 2011, 05:21 PM
Dec 2011

wrong damned evidence being used, then.

Some possible problems:

* The STOCK MARKET is not the ECONOMY.
* Corporate earnings, fluffed up by international sales, is NOT the ECONOMY (or not the whole picture).

Ruby the Liberal

(26,219 posts)
21. Yup. Corporations hording cash is not a sign of strength either
Wed Dec 14, 2011, 12:02 AM
Dec 2011

its a sign of massive weakness if it isn't being circulated through the economy where the velocity factor can kick in.

Warpy

(111,255 posts)
14. You're buying that?
Tue Dec 13, 2011, 04:40 PM
Dec 2011

I have the advantage here. My grandmother kept a scrapbook all during the Depression and all during the Hoover years prosperity was just around the corner. I'm seeing the same thing here and now, any tiny positive sign in an otherwise dismal economic picture as proof we don't need to do anything but rein in spending and we'll all be rich again.

The movers and shakers are all claiming it's not Depression II because the stock market is still doing fine and the fact we're only losing a net 100,000 jobs a month is a lot rosier than losing 750,000 jobs a month when the Republicans were in charge.

The stock market is protected because it wasn't infected by the kind of debt that brought it down in 1929. They did that to housing, instead. It is infected by fraud that has spread out from the financial sector and it's not going to stay up forever. Maybe at that point it will get their attention.

Make no mistake, although we're not falling as fast as we were during Stupid's misadministration, we are still falling. Yes, it's a Depression. The only way out of it that has worked before is spending our way out of it. Austerity will only deepen it.

And don't kid yourself that the pablum in the press is proof that it's all over and prosperity is just around the corner. They're lying.

Ruby the Liberal

(26,219 posts)
4. I have much respect for Dr K.
Tue Dec 13, 2011, 05:33 AM
Dec 2011

If only the Administration had chosen to fill the Econ seats with people like him and Dr Reich (or listened to Christina Romer once in a while) we might not be in this mess.

Larry Summers? Pffft. Might as well have put Bob Rubin at the helm.

Before I am accused of being an Obama basher - I said "Administration" for a reason. These leadership decisions were made by committee. No one human being would have the brain/mind capacity to vet and make that many personnel decisions in 10 years much less the space of a few short months.

Good read - recommended.

dawg

(10,624 posts)
7. I can see why some might think the term "depression" is overblown, but ...
Tue Dec 13, 2011, 09:43 AM
Dec 2011

The jury is definitely still out.

The austerity measures in Europe will be a disaster. At best, they will double-dip into another recession. The worst case is severe recession coupled with breakup of the euro and major political unrest.

If the US chooses to follow the path of austerity, we too will double-dip into recession. We might do so regardless, depending on the severity of the downturn in Europe.

For some reason, the Europeans (Germans), the Republicans, and Centrist Democrats have all concluded that FDR was full of shit in the 1930's and that Hoover had it right all along.

We do have a long-term budget problem that needs to be dealt with. But in the short-term, the economy still needs stimulus.

dixiegrrrrl

(60,010 posts)
9. We seem to be following path of austerity, don't you think?
Tue Dec 13, 2011, 12:29 PM
Dec 2011

We may not be calling it that, but it appears to be happening:

All social services being starved, undermined.
Education system being destroyed.
Public services being privatized.
Unions being destroyed.
Sharp rise in attacks on children, unemployed, elderly.
A 2 tier health care system that is the leading cause of bankruptices.
Private wealth and housing being destroyed for the middle class and poor.
REAL unemployment at 20%, if not higher.
Trillions of dollars are being taken out of country in a myriad of ways.

Actually, the operative word is looting, massive full scale looting.
Which, from all I can read, is what the "austerity" is in European countries.

lovuian

(19,362 posts)
8. Economics 101 when 90% of a country's assets are in the
Tue Dec 13, 2011, 11:39 AM
Dec 2011

hands of a few

a Depression occurs

until they allow the other 99% the ability to get assets

the Depression will keep going ...then usually a Revolution by the worker occurs

Marx is right
The Worker will rise up

It is economics pure and simple

Pachamama

(16,887 posts)
11. We have been in a Depression the last year & worst to be felt is coming in 2012.
Tue Dec 13, 2011, 03:57 PM
Dec 2011

While there have been some signs of the economy improving, they are fragile at best & being hindered from being better by the GOP blocking efforts by the Obama administration to provide economic stimulus. But what Krugman chillingly points out is the situation in Europe that is a grave danger not only to itself, but to the US economic & political situation.

The world economy & stability politically is teetering on the edge & dangerously close to authoritarian leanings and yes, revolution. Global revolution.

My family comes from Europe and I spend time there every summer. This last summer was very telling. Discussions in the Biergartens with my German family & friends were of wanting to go back to the Deutsch Mark & closing borders. Some feel very much pangs of Nationalism and others fear of memories from Germanys past. No one I spoke to either in Germany or from Spain, Italy, France or UK felt ok with the austerity measures being proposed & in fact the outrage expressed towards the banks, the EU and their own governments were filled with discussion of revolution & protest should things go that direction.

I fear that in the next 12 months that there could be a breakout of not only mass protests and revolt, but all out revolution both across Europe but also the US. I believe that groups with right-wing authoritarian leanings like the ones growing with power in Sweden, Finland, Norway, Austria, Italy, Spain etc have plans to take things in the direction similar to what Krugman described happening in Hungary. And if any one questions if it could happen here or that the US could become a police state or authoritarian establishment, I suggest looking at where we currently are and the response to the OWS protests around the country.

And dont kid yourself - the various Governments including our own know this is what we are teetering on.


Dan

(3,559 posts)
22. Are you serious?
Wed Dec 14, 2011, 12:44 AM
Dec 2011

That is a very serious statement "..next 12 months...", are you serious, revolution? Do you believe that they will internal (within their respective nation-states) or potentially across national boundaries?

Do you believe from what you discovered that we might be in for another 'at some future point' renewal of the world world events that we experienced in the past?

Is it possible that calmer heads might prevail?

You indicated that there are some with memories of the Germany's past - and the disaster contained within that past, do you think that there is such a loss of collective memory that we could see a return to the rise of a new strongman and all it entails?

Just curious... do you think that we are looking at a merging of governments or sharing of views between the governments with the view of keeping the common man in his place?

YOur thoughts that you care to share, would be appreciated.

Pachamama

(16,887 posts)
26. Yes, I am serious....
Wed Dec 14, 2011, 09:18 AM
Dec 2011

Serious about everything I said about the world economy, political stability, even the possibility of revolution.

Revolution can come in many forms, the major shifting of views for example, not just in the physical war sense. But I dont discount that as a possibililty.

I believe history always repeats itself unless we learn from past mistakes & history itself. Unfortunately, most people dont read, study history, remember the lessons or have the intellectual curiousity to ask the important questions.

It is always possible that calmer heads prevail...hopefully...but I think globally people are getting fed up. Things are reaching a boiling point. People are hurting and getting angry and tired of the status quo or being told they are the ones having to take the austerity measures for the sake of the "establishment".

While there are those with the collective memory of the past, there are many who do not nor care to know....So yes, I do think that the same mistakes and possibilities exist for there to be a rise of a central figure, a "strongman" or movement, like we have seen before and of which Krugman referred to and I seconded similar to Hungary and frankly happening in many countries in Europe like I referenced. My grandparents who saw what happened in the lead up and aftermath of the 3rd Reich used to tell me it could happen anywhere and again. The danger they said is when people think it cant happen again or that they are exempt.

In terms of a merging of governments or sharing of views, I would make the argument that is already happening, in particular in the example of the EU which is why there is actually the backlash that has been growing against it and a rise in the more nationalistic and right-wing movements in many of these countries. The mass murder in Norway last summer at the youth camp and the rising number of neo-nazi/xenophobic/nationalistic members in various parliaments in various countries like Sweden, Italy, Austria etc is a reflection of that growing movement and is very real.

I very much believe that every government is very aware of the unrest and watching events ranging from the Arab Spring to Wikileaks to the Occupy Movement etc very carefully. Yes, they would like to make sure they keep the "common man" in their place. The status quo benefits them and what they fear most is the population getting fed up and yes, revolting.

Dear Dan, you & I have been posting on DU for many years, and I dont believe either one of us has ever been someone who says something that isnt serious or said without some serious thought...you in particular have always been someone I have recalled over the years who was infrequent, but quick to the point, short & no long rants.

I appreciate that you responded and asked me if I was serious and I hope I answered your question...

MisterP

(23,730 posts)
13. in fact, in the 20s Romania, Bulgaria, Yugoslavia, and the other new countries bankrupted themselves
Tue Dec 13, 2011, 04:28 PM
Dec 2011

in order to stay on the gold standard, because of how the system was set up

when 1989 came about, the EU insisted that, while the old, Western members could keep their welfare states, the East had to undo all laws passed before the Berlin Wall and start over with neoliberalism--so, in fact, Hungary's pollution got even worse, and only profitable free-market solutions like dumps and incinerators were considered

Maven

(10,533 posts)
18. "ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight."
Tue Dec 13, 2011, 08:57 PM
Dec 2011

Why wouldn't you post the entire sentence?

 

MannyGoldstein

(34,589 posts)
23. Not if you're a banker or other member of the 1%. Then you're doing better than ever.
Wed Dec 14, 2011, 01:26 AM
Dec 2011

Obama and Republicans just gave you a cherry on top - three new "free" trade agreements, with more in the works. I guess it just sucks to be the 99%.

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