Tuesday, November 24, 2009

Judith Miller on the Economics Beat

I will leave it to Dean Baker and Paul Krugman, who get paid to do this, to tear into the errors and absurdities of this latest bit of agitprop from the New York Times on the phantom menace of fiscal deficits. What I would like to raise is the issue of institutional responsibility. You would think that the Times might have learned from its earlier foray into phantom WMD’s that playing the lead public role in a campaign of deception can have devastating consequences, particularly if the end product is a policy that implodes on its own mythology. This is what happened in Iraq: blatant falsehoods published as fact in the news outlet that feeds stories to the rest of the media (now that they have downsized their own news-gathering forces) came back to haunt them when, instead of WMD’s, soldiers were met with IED’s.

Let’s hope this campaign to reproduce 1937 is the inspiration of a rump group in the financial elite with little influence on actual policy. If deficit-cutting becomes the new imperative in Washington, however, and the economy duly melts, we will have to suffer through more public contrition on the part of the Times’ editorial brass.


TheTrucker said...

If you don't like the deficits then why don't you raise taxes on the people that are receiving all the interest? HMMMMMMMMMMMMMMMMMMM?????????? Why would any rational person think a high tax rate on large amounts of unearned interest income is going to harm the real economy?

Martin Langeland said...

WMD! Get yer WMD rightcher! Oh look Sarh Palin! W is the kinda guy you'd like to have a beer with.
My gawd deficits as far as the eye can see! Cut taxes!!!
Now, friend, your part is simple. Jes keep your eye on thisyere little pea. It is worth a mort of money as it scurries and scuttles from this shell to that one. All you have to do is tell me which shell covers the pea to win!
Sorry bub, you loose.

Matt Sherman said...

A great way to raise revenue for job creation and/or deficit reduction is to impose a modest tax on financial transactions. The tax would mainly effect the massive volume of speculative trading and would not have a measurable impact on long-term investors or other productive trading.

Dean Baker's organization, the Center for Economic and Policy Research, is currently looking for economists to sign onto a letter in support of financial transaction taxes. Peter, will you and the EconoSpeak crew sign on?


Anonymous said...


Is it possible that your remarkable paper was ghost-written? In it you say:

"The export-led model, at least in its current incarnation, has exhausted itself. In a sense, it suffers from the same problem as import-substitution, only in reverse. ISI foundered on the need to procure foreign exchange with insufficient exports to exchange for it. The majority of ISI countries eventually choked on their external debt. EL industrialization founders on the inability of the importers to sustain sufficient levels of debt – to recycle the surpluses amassed by the exporters. The model was successful only when its scale was small relative to global output; when China entered in force its end was already in view."

Does it not occur to you that the flip-side of the EL model is the singular US capacity to absorb the surplus product of the export countries through an ever expanding accumulation of debt. If one is dead, so is the other.

MayorQuimby said...

I suppose $7.3 Trillion just isn't enough.


Why don't we just make it an even $10 Trillion. That's a nice round number. Then when we default on our debt in a couple of years, the hordes of economists that think throwing buckets of borrowed cash at a problem will solve it will get permanently run out of town and stripped of their useless educations.

Living beyond one's means is not solved by more living beyond one's means.

Read Rothbard. It's not difficult.