Paul Krugman: Scholar or political hack?

[Skeptic Ginger]

Zig, I didn't avoid the question, you are reading past my answer. Try again:

The poor don't spend because they have no money.
The rich DO SPEND. You are claiming they have money and don't spend.
I am saying they have money and do spend but because there are too few of them, their spending, no matter how lavish, is not enough to stimulate the economy.

If the rich would shift more of their EXCESS money that is sitting idle back into circulation the economy would grow again.

 

[Kestrel]

Yes it is. And yet, you continue to fail to grasp it, because you refuse to even consider the question in any depth beyond your tired class warfare cliches.

Spoken like a true believer in the magic of utopian free markets. The solution is always to lower taxes, cut regulations and let the Wall Street boys party just like they did in 2008.

 

[Ziggurat]

Zig, I didn't avoid the question, you are reading past my answer. Try again:

The poor don't spend because they have no money.
The rich DO SPEND. You are claiming they have money and don't spend.

They are spending less. Their demand has dropped. You continue to refuse to address this.

I am saying they have money and do spend but because there are too few of them, their spending, no matter how lavish, is not enough to stimulate the economy.

That can only be true if they don't control much money. But that shoots your own class warfare rhetoric in the foot: if they don't control much money, they they don't matter.

If the rich would shift more of their EXCESS money that is sitting idle back into circulation the economy would grow again.

Quite so. But they aren't doing that. Why not? Again, you refuse to even think about why.

 

[Ziggurat]

Spoken like a true believer in the magic of utopian free markets. The solution is always to lower taxes, cut regulations and let the Wall Street boys party just like they did in 2008.

Straw man much? Funny how the only response you can offer is one which doesn't address anything I said, but only things I didn't say.

 

[Kestrel]

They are spending less. Their demand has dropped. You continue to refuse to address this.

She has addressed it, but you simply responded with insults. You can't seem to grasp the idea that the middle class have a key role to play in a modern economy.

Over the last few decades, the benefits of increased productivity have mostly gone to those at the top of the economic ladder. The rich have been waging class warfare during this time while pretending to be the victims. Asking us to take pity on the billionaires while ignoring the middle class and the poor.

 

[Skeptic Ginger]

They are spending less. Their demand has dropped. You continue to refuse to address this....

...Quite so. But they aren't doing that. Why not? Again, you refuse to even think about why.

We can't discuss the issues until you get past this false claim. I am addressing it, you just want me to accept your underlying premises and I don't.

Are you claiming the rich are buying fewer yachts? That's ludicrous.

Knowing your political positions in past discussions, I'm guessing your claim is, they are not buying more widget factories.

What is stopping them from building more widgets?

I'm guessing you believe it is any and everything the government has done that makes building widgets unprofitable.

I believe there is no demand for widgets because the 1% has squeezed the 99% so much the 99% no longer has enough cash to buy widgets.

That can only be true if they [the rich] don't control much money. But that shoots your own class warfare rhetoric in the foot: if they don't control much money, they they don't matter.

There are two things to address here.

You seem to be sticking to the false logic of:

If A is caused by B then A is ONLY caused by B.

The poor don't spend because they don't have cash.
The rich don't spend [on widget factories] because there is no demand for widgets.

There is more than one cause of B. The 1% and 99% have different reasons for not spending, not the same reason.



The second thing that needs to be addressed is you falling for the "class warfare" campaign slogan. Please, surely you can think about and discuss this issue without relying on discussion stopping slogans? The Progressive left does not "hate the rich" and we aren't aiming for any kind of communist egalitarian society.

There is too much wealth at the very top. If this were all 'created wealth' as your side claims, then people at the bottom should have incomes similar to past decades. Instead, the bottom has lost purchasing power, and, accrued wealth at the bottom is quickly disappearing.

If this top heavy wealth distribution were occurring in a healthy economy no one would care. But it isn't.

 

[Ziggurat]

We can't discuss the issues until you get past this false claim. I am addressing it, you just want me to accept your underlying premises and I don't.

But you have. You have conceded that the rich have lots of money, and they aren't spending it. The question is why, and you won't even touch that question. Instead we get nonsense like this:

Are you claiming the rich are buying fewer yachts? That's ludicrous.

Yes, it's ridiculous. And it is precisely and explicitly NOT what I'm talking about. I've already told you.

Knowing your political positions in past discussions, I'm guessing your claim is, they are not buying more widget factories.

As an example, yes. Do you have an answer?

I'm guessing you believe it is any and everything the government has done that makes building widgets unprofitable.

And have you considered whether or not that might play a role? Because it sure doesn't seem like it.

I believe there is no demand for widgets because the 1% has squeezed the 99% so much the 99% no longer has enough cash to buy widgets.

But that's not actually true. Demand has decreased, but it hasn't vanished. And much of the investment that the rich could be doing isn't to increase capacity but to increase efficiency, which would help even with static demand.

There are two things to address here.

You seem to be sticking to the false logic of:

If A is caused by B then A is ONLY caused by B.

Not at all. In fact, that's your logic: because you think decreased consumer demand is decreasing capital investment, you have decided that government policy is irrelevant.

The poor don't spend because they don't have cash.
The rich don't spend [on widget factories] because there is no demand for widgets.

Case in point: you've got a single cause, and so you don't consider anything else.

There is more than one cause of B.

Really? And yet, you can only focus on one cause.

The 1% and 99% have different reasons for not spending, not the same reason.

But evidently, it's still only one reason for each. You are doing exactly what you accuse me of doing.

The second thing that needs to be addressed is you falling for the "class warfare" campaign slogan. Please, surely you can think about and discuss this issue without relying on discussion stopping slogans?

Slogans like the 1% and the 99%? Again, irony, mixed with hypocrisy. You do something, then turn around and accuse me of doing it.

The Progressive left does not "hate the rich" and we aren't aiming for any kind of communist egalitarian society.

Of course not. All you need is a scape goat.

There is too much wealth at the very top.

No. There is too little wealth at the bottom. The difference is important.

If this were all 'created wealth' as your side claims

ALL wealth is created. That's not a claim, that's a fact.

If this top heavy wealth distribution were occurring in a healthy economy no one would care. But it isn't.

Quite so: the wealth at the top isn't actually the problem, it's merely a target for resentment and envy in hard times.

 

[Ziggurat]

She has addressed it

Not really. Neither have you.

but you simply responded with insults.

It's an insult to say that someone won't address the issue? Your bar is set rather low. So low, in fact, that you've tripped over it yourself:

You can't seem to grasp the idea that the middle class have a key role to play in a modern economy.

Over the last few decades, the benefits of increased productivity have mostly gone to those at the top of the economic ladder. The rich have been waging class warfare during this time while pretending to be the victims. Asking us to take pity on the billionaires while ignoring the middle class and the poor.

I'm not asking anyone to take pity on the rich. That's not my point at all. But if you want the rich to start spending money, then asking why they aren't is a rather obvious place to start. And why would I even want the rich to start spending money? Do I want that for their sake? Well, no: they're doing fine holding onto that money. I want them to start spending money precisely because other people will benefit when they do. So this idea that I'm looking for pity for the rich and ignoring everyone else is complete bull ****. But you don't care: you're not looking for solutions, you're looking for blame.

 

[Kestrel]

The second thing that needs to be addressed is you falling for the "class warfare" campaign slogan. Please, surely you can think about and discuss this issue without relying on discussion stopping slogans? The Progressive left does not "hate the rich" and we aren't aiming for any kind of communist egalitarian society.

We are looking for sensible regulation to curb the behavior that created the 2008 financial meltdown. I don't hate rich people as a class but the Wall Street investment bankers deeply deserve our scorn and hatred. They did more damage to the economy of our nation and the world than the terrorists did in 2001.

 

[Skeptic Ginger]

But you have. You have conceded that the rich have lots of money, and they aren't spending it. The question is why, and you won't even touch that question.

What is wrong with you, Zig? Why do you keep saying I haven't touched on why the rich aren't spending after two posts addressing nothing but why the rich aren't spending?

(BTW, The nonsense you referred to was me clarifying your issue by saying the rich buying yachts WAS NOT YOUR ISSUE in case it was.)

Do you have an answer? ...

...Demand has decreased, but it hasn't vanished. And much of the investment that the rich could be doing isn't to increase capacity but to increase efficiency, which would help even with static demand.

Yes, THERE IS NO DEMAND FOR WIDGETS, or not enough demand if you prefer. As for improving efficiency, there is plenty of evidence they are indeed doing that. The country is actually still manufacturing the same amount as years past. But that production comes with less labor. The rich took all the profits from that increased production and the workers were not rewarded for their increased production.

And have you considered whether or not that might play a role? Because it sure doesn't seem like it.

So not agreeing with you is the same as not considering your position? Can we get past this tripe, please?

The government plays a role. The question is, how much and how much helps or hurts the market? No one has claimed the issues are black and white except maybe you insisting on the government is all black.

..you think decreased consumer demand is decreasing capital investment, you have decided that government policy is irrelevant.

The second half is untrue, stop imagining that a different view of the equation means I've left anything out altogether.

As for the first half, well d'uh. That is how it works, you know. Either you invest because you anticipate demand or because there is demand.

I've not claimed there is no investment or no demand.

..Case in point: you've got a single cause, and so you don't consider anything else.

I do believe that is called projection. It certainly isn't my position.

..ALL wealth is created. That's not a claim, that's a fact.

Notice the straw man?

Your straw version of my claim: ALL wealth is NOT created.
My actual claim: "If this were all 'created wealth' as your side claims..." THIS, as in THIS INCREASED wealth at the top.

Either existing wealth moved to the top or new wealth was added to the top. A number of right wingers in this forum, including you IIRC, claim the rich merely has added wealth, not redistributed existing wealth. But if that were true then the poor would have enough and the rich would have more. But the poor don't have enough while the rich do have more.

..Quite so: the wealth at the top isn't actually the problem, it's merely a target for resentment and envy in hard times.

So say the sloganeers. Look over here, don't look at the real problem. Yes, I refer to the 99% and the 1% as shortcut nouns in order to have a discussion. But "class warfare", "scape goat" and "resentment" are straw men, not causes or shortcut nouns in a discussion.

 

[ServiceSoon]

...I am saying they have money and do spend but because there are too few of them, their spending, no matter how lavish, is not enough to stimulate the economy.

If the rich would shift more of their EXCESS money that is sitting idle back into circulation the economy would grow again.

If the rich do in fact have excess money that they are not spending, which we all agree is negatively impacting society as a whole because they are not spending it, should they feel guilty and what role if any should the government intervene in our free constitutional democracy where we respect and balance the rights of all?

As a bonus question, if you would be so kind, how do you know that there are too few of the rich, in their spending, to stimulate the economy? I might disagree with that statement considering that they pay the majority of taxes; wouldn't this mean that they have more to spend?

I firmly believe that any increase in taxes should come from increasing the capital gains tax to more closely resemble the tax rates of those who earn their money in wages. The result of doing this is that they will take their money and invest it elsewhere where the rates are less. To combat this I'd simply take a look at emerging nations and choose a rate that is slightly less.

 

[Kestrel]

If the rich do in fact have excess money that they are not spending, which we all agree is negatively impacting society as a whole because they are not spending it, should they feel guilty and what role if any should the government intervene in our free constitutional democracy where we respect and balance the rights of all?

I think you missed the point. The rich have plenty of money, they have spent all they care to spend. When was the last time you forgot how many houses you own? Giving them yet another tax break will not help generate demand, it will only increase the debt. Large corporations are also swimming in cash. They are not investing right now because there isn't enough demand.

 

[Skeptic Ginger]

If the rich do in fact have excess money that they are not spending, which we all agree is negatively impacting society as a whole because they are not spending it, should they feel guilty and what role if any should the government intervene in our free constitutional democracy where we respect and balance the rights of all?

This is based on the narrative that somehow the rich are being asked to contribute more than their fair share to the community needs. I don't believe that is true.

That same narrative falsely depicts the poor as lazy and wanting a handout. In reality the vast majority of the poor are working poor. They can't make it on minimum wages. Unemployment is not 60+% which the narrative that the rich are being asked to support everyone else would suggest. Unemployment is in the range of 8%. The majority of the poor are working poor.

The small amount of government spending that goes toward food stamps and welfare is insignificant. The real government redistribution problem is all the spending that does not benefit the majority. There were billions, maybe even a trillion dollars wasted in Iraq. And I mean seriously wasted, not just spent on bombs that accomplished nothing. Private contractors a la Cheney/Rumsfeld/Wolfowitz New Deal took the money and ran leaving half finished projects and shoddy work in their wake. Subsidizing oil companies, and much of the farm subsidies are insane.

Then there is Social Security and Medicare. The idea was to provide income and medical care for the elderly so we didn't have people dying in the street because they could no longer work. Rich people don't need these benefits. It's a simple fix to raise the amount of income that is taxed or decrease benefits for the wealthy.

When the right wing complains that the poor aren't paying any taxes because they don't earn enough to pay income tax, the narrative ignores the fact the working poor are all still paying FICA taxes. They are paying their share.

To be honest in this debate, one needs to first properly define the issues. This is all about what everyone's share of the community expenses should be and what should the community expenses cover. Trying to re-frame the discussion as communist style redistribution of the wealth is an emotional gimmick meant to make people think that somehow lazy poor people just want handouts from those hard working rich who don't really owe a bigger share of the community expenses than they are paying.


People in higher income brackets are not paying their fare share, people in lower income brackets are paying more than their fair share. The rich benefit proportionately more from corporate welfare than the poor benefit from welfare for the poor.

As a bonus question, if you would be so kind, how do you know that there are too few of the rich, in their spending, to stimulate the economy? I might disagree with that statement considering that they pay the majority of taxes; wouldn't this mean that they have more to spend?

If you want to disagree that the 1% could simply stimulate the economy by their personal consumption you need to cite some evidence. If you want to claim there is somehow a demand for goods but the rich are holding back investing, you need more evidence than just ideology.

There is evidence the rich are holding wealth and not investing it in production of goods or services.
There is evidence demand for goods and services are low.

I firmly believe that any increase in taxes should come from increasing the capital gains tax to more closely resemble the tax rates of those who earn their money in wages. The result of doing this is that they will take their money and invest it elsewhere where the rates are less. To combat this I'd simply take a look at emerging nations and choose a rate that is slightly less.

I wouldn't argue with increasing capital gains tax. I see no reason why that should be the only taxes increased.

 

[daenku32]

If the rich do in fact have excess money that they are not spending, which we all agree is negatively impacting society as a whole because they are not spending it, should they feel guilty and what role if any should the government intervene in our free constitutional democracy where we respect and balance the rights of all?

As a bonus question, if you would be so kind, how do you know that there are too few of the rich, in their spending, to stimulate the economy? I might disagree with that statement considering that they pay the majority of taxes; wouldn't this mean that they have more to spend?

I firmly believe that any increase in taxes should come from increasing the capital gains tax to more closely resemble the tax rates of those who earn their money in wages. The result of doing this is that they will take their money and invest it elsewhere where the rates are less. To combat this I'd simply take a look at emerging nations and choose a rate that is slightly less.

Keynesian Economics aren't unconstitutional, if that's what you are suggesting.

 

[Skeptic Ginger]

I think you missed the point. The rich have plenty of money, they have spent all they care to spend. When was the last time you forgot how many houses you own? Giving them yet another tax break will not help generate demand, it will only increase the debt. Large corporations are also swimming in cash. They are not investing right now because there isn't enough demand.

Exactly.

 

[balrog666]

She has addressed it, but you simply responded with insults. You can't seem to grasp the idea that the middle class have a key role to play in a modern economy.

Oooooh, please define "middle class" for us ignorant rubes.

Over the last few decades, the benefits of increased productivity have mostly gone to those at the top of the economic ladder.

You mean those who paid for it?

The rich have been waging class warfare during this time while pretending to be the victims. Asking us to take pity on the billionaires while ignoring the middle class and the poor.

Screw the poor, they already make more from the welfare state than any "middle class" bumpkins would ever want to devote their lives to ...

 

[ServiceSoon]

I think you missed the point. The rich have plenty of money, they have spent all they care to spend. When was the last time you forgot how many houses you own? Giving them yet another tax break will not help generate demand, it will only increase the debt. Large corporations are also swimming in cash. They are not investing right now because there isn't enough demand.

Nowhere in my paragraphs did I advocate to giving the rich a tax decrease.

Doesn't the supply/demand model suffer from the chicken or egg dilemma? Specifically, the conundrum is that the unemployed don't have a job so they have no money, which means they can't trigger demand, but nobody is going to hire somebody to sell a product that nobody can afford to buy. So when somebody says there is a demand issue, why couldn’t I just as easily say the opposite?

 

[Skeptic Ginger]

.... Doesn't the supply/demand model suffer from the chicken or egg dilemma? Specifically, the conundrum is that the unemployed don't have a job so they have no money, which means they can't trigger demand, but nobody is going to hire somebody to sell a product that nobody can afford to buy. So when somebody says there is a demand issue, why couldn’t I just as easily say the opposite?

I think the chicken and egg you are referring to is, now what? That is where the case for government spending to stimulate the economy comes in. Only the government has the resources to get the stalled supply and demand cycle started back up again which is Krugman's position.

 

[Skeptic Ginger]

... Screw the poor, they already make more from the welfare state than any "middle class" bumpkins would ever want to devote their lives to ...

What is your evidence for this belief about the poor and/or the welfare state?

 

[ServiceSoon]

Thank you for the reply.

That same narrative falsely depicts the poor as lazy and wanting a handout. In reality the vast majority of the poor are working poor. They can't make it on minimum wages. Unemployment is not 60+% which the narrative that the rich are being asked to support everyone else would suggest. Unemployment is in the range of 8%. The majority of the poor are working poor.

I've never seen nor heard it discussed that unemployment is 60% in this narrative. Furthermore, I engaged in this discussion to determine how to lower the unemployment rate and get the economy moving, not to chastise anybody based on their class.

When the right wing complains that the poor aren't paying any taxes because they don't earn enough to pay income tax, the narrative ignores the fact the working poor are all still paying FICA taxes. They are paying their share.

This is based on the narrative that somehow the rich are being asked to contribute more than their fair share to the community needs. I don't believe that is true.

To be honest in this debate, one needs to first properly define the issues. This is all about what everyone's share of the community expenses should be and what should the community expenses cover. Trying to re-frame the discussion as communist style redistribution of the wealth is an emotional gimmick meant to make people think that somehow lazy poor people just want handouts from those hard working rich who don't really owe a bigger share of the community expenses than they are paying.

People in higher income brackets are not paying their fare share, people in lower income brackets are paying more than their fair share. The rich benefit proportionately more from corporate welfare than the poor benefit from welfare for the poor.

I can't resist, how do you determine what fair share is?

If you want to disagree that the 1% could simply stimulate the economy by their personal consumption you need to cite some evidence. If you want to claim there is somehow a demand for goods but the rich are holding back investing, you need more evidence than just ideology.

I don't think that the top 1% could do it, but maybe the top 5% could. Here is some math. The GDP was 15 trillion last year of which 70% was from consumption. Let's assume that everybody consumes the same amount as last year, but we want a 5% increase in GDP. Let's see if it's feasible for those top 5%'ers to do it on their own. I want to know how much each one of would have to spend to increase the amount of consumption by 5%. There are around 140 million people who filed federal tax forms last year. 5% of that is 7 million. Each one of those people would have to spend $75,000. That's half of what they make per year!

Of course I have to run the same scenario for the top 50% excluding the help of the top 5%. I choose the top 50% because the bottom 50% don't pay federal income taxes so it is logical that they don't have any additional disposable income. Each one of those people would have to spend $8,333. That's one quarter of what they make per year.

My conclusion, it's gonna take the help of everybody to increase our consumption by 5% next year.

There is evidence the rich are holding wealth and not investing it in production of goods or services.
There is evidence demand for goods and services are low.

Do you agree that if the rich had the ability to increase their wealth they would do so? The reason the wealthy are not spending their money is because demand is low. Again, this appears to be a chicken or egg riddle to me.