NYT tells the truth/state of the economy

[Roger Baker]

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Hey,
          when the New York Times tells the truth like this, as well as =
a=20
bunch of editorials I see
elsewhere, we got the basis for a broad progressive fight back against=20=

Bush and his attempt at a
corporate domination coup. -- Roger

           ********************************************************

http://www.nytimes.com/2001/11/25/opinion/25KRUG.html



November 25, 2001

RECKONINGS

An Alternate Reality

By PAUL KRUGMAN

Most Americans get their news from TV. And what they see is=20
heartwarming =97 a picture of a nation behaving well in a time of =
crisis.=20
Indeed, the vast majority of Americans have been both resolute and=20
generous.

But that's not the whole story, and the images TV doesn't show are=20
anything but heartwarming. A full picture would show politicians and=20
businessmen behaving badly, with this bad behavior made possible =97 and=20=

made worse =97 by the fact that these days selfishness comes tightly=20
wrapped in the flag. If you pay attention to the whole picture, you=20
start to feel that you are living in a different reality from the one on=20=

TV.

The alternate reality isn't deeply hidden. It's available to anyone with=20=

a modem, and some of it makes it into quality newspapers. Often you can=20=

find the best reporting on what's really going on in the business=20
section, because business reporters and commentators are not expected to=20=

view the world through rose-colored glasses.

 =46rom an economist's point of view, the most revealing indicator of=20
what's really happening is the post- Sept. 11 fondness of politicians=20
for "lump-sum transfers." That's economese for payments that aren't=20
contingent on the recipient's actions, and which therefore give no=20
incentive for changed behavior. That's good if the transfer is meant to=20=

help someone in need, without reducing his motivation to work. It's bad=20=

if the alleged purpose of the transfer is to get the recipient to do=20
something useful, like invest or hire more workers.

So it tells you something when Congress votes $15 billion in aid and=20
loan guarantees for airline companies but not a penny for laid-off=20
airline workers. It tells you even more when the House passes a=20
"stimulus" bill that contains almost nothing for the unemployed but=20
includes $25 billion in retroactive corporate tax cuts =97 that is, pure=20=

lump-sum transfers to corporations, most of them highly profitable.

Most political reporting about the stimulus debate describes it as a=20
conflict of ideologies. But ideology has nothing to do with it. No=20
economic doctrine I'm aware of, right or left, says that an $800 million=20=

lump-sum transfer to General Motors will lead to more investment when=20
the company is already sitting on $8 billion in cash.

As Jonathan Chait points out, there used to be some question about the=20=

true motives of people like Dick Armey and Tom DeLay. Did they really=20
believe in free markets, or did they just want to take from the poor and=20=

give to the rich? Now we know.

Of course, it's not all about lump- sum transfers. Since Sept. 11 there=20=

has also been a sustained effort, under cover of the national emergency,=20=

to open public lands to oil companies and logging interests.=20
Administration officials claim that it's all for the sake of national=20
security, but when you discover that they also intend to reverse rules=20=

excluding snowmobiles from Yellowstone, the truth becomes clear.

So what's the real state of the nation? On TV this looks like World War=20=

II. But though our cause is just, for 99.9 percent of Americans this=20
war, waged by a small cadre of highly trained professionals, is a=20
spectator event. And the home front looks not like wartime but like a=20
postwar aftermath, in which the normal instincts of a nation at war =97 =
to=20
rally round the flag and place trust in our leaders =97 are all too =
easily=20
exploited.

Indeed, current events bear an almost eerie resemblance to the period=20
just after World War I. John Ashcroft is re-enacting the Palmer raids,=20=

which swept up thousands of immigrants suspected of radicalism; the vast=20=

majority turned out to be innocent of any wrongdoing, and some turned=20
out to be U.S. citizens. Executives at Enron seem to have been=20
channeling the spirit of Charles Ponzi. And the push to open public=20
lands to private exploitation sounds like Teapot Dome, which also=20
involved oil drilling on public land. Presumably this time there have=20
been no outright bribes, but the giveaways to corporations are actually=20=

much larger.

What this country needs is a return to normalcy. And I don't mean the=20
selective normalcy the Bush administration wants, in which everyone goes=20=

shopping but the media continue to report only inspiring stories and war=20=

news. It's time to give the American people the whole picture.=A0



                  *****************************************************



Almost all the domestic economists are predicting a domestic recovery=20
next year, but how
much experience do they really have with modeling the global economy?=20
The last major
global contraction was way back in the 1930's and long forgotten.=20
Meanwhile economic
stimulus and monetary policy are only domestic in their influence.

And as the following piece points out, investments which are needed for=20=

the expansion of
capital really have an underlying psychological component. Economics can=20=

never be put
on a firm footing unless it somehow manages to model optimism and fear.

-- Roger



http://www.nytimes.com/2001/11/25/international/25RECE.html


"...Ultimately, economics can be a self-fulfilling prophecy. The world=20=

is unlikely to fall into a deflationary
spiral unless people believe that will happen. But even psychology can=20=

be borderless.

While the Bush administration is worried about how Americans and Arabs=20=

are getting divergent information
about the war in Afghanistan, economists are more focused on the fact=20
that the vast majority of people around
the world get roughly the same take on events. French, Spanish, Thai and=20=

Korean people have reacted in much
the same way to the attacks of Sept. 11. Air travel and tourism are down=20=

everywhere.

Mr. Rogoff said he saw a high correlation between business and consumer=20=

sentiment across the world that might
sway economic performance even more than other common links, like trade=20=

and finance.

"One reason we have become more synchronized," he said, "is because=20
we're all watching CNN."



--Apple-Mail-2-488515737
Content-Transfer-Encoding: quoted-printable
Content-Type: text/enriched;
	charset=WINDOWS-1252

<fontfamily><param>Geneva</param>Hey,=20

         when the New York Times tells the truth like this, as well as
a bunch of editorials I see

elsewhere, we got the basis for a broad progressive fight back against
Bush and his attempt at a=20

corporate domination coup. -- Roger


          ********************************************************


=
<underline><color><param>1A1A,1A1A,FFFF</param>http://www.nytimes.com/2001=
/11/25/opinion/25KRUG.html</color></underline>




November 25, 2001


<color><param>6666,6666,6666</param>RECKONINGS


</color>An Alternate Reality


By PAUL KRUGMAN


Most Americans get their news from TV. And what they see is
heartwarming =97 a picture of a nation behaving well in a time of
crisis. Indeed, the vast majority of Americans have been both resolute
and generous.


But that's not the whole story, and the images TV doesn't show are
anything but heartwarming. A full picture would show politicians and
businessmen behaving badly, with this bad behavior made possible =97 and
made worse =97 by the fact that these days selfishness comes tightly
wrapped in the flag. If you pay attention to the whole picture, you
start to feel that you are living in a different reality from the one
on TV.


The alternate reality isn't deeply hidden. It's available to anyone
with a modem, and some of it makes it into quality newspapers. Often
you can find the best reporting on what's really going on in the
business section, because business reporters and commentators are not
expected to view the world through rose-colored glasses.=20


=46rom an economist's point of view, the most revealing indicator of
what's really happening is the post- Sept. 11 fondness of politicians
for "lump-sum transfers." That's economese for payments that aren't
contingent on the recipient's actions, and which therefore give no
incentive for changed behavior. That's good if the transfer is meant
to help someone in need, without reducing his motivation to work. It's
bad if the alleged purpose of the transfer is to get the recipient to
do something useful, like invest or hire more workers.=20


So it tells you something when Congress votes $15 billion in aid and
loan guarantees for airline companies but not a penny for laid-off
airline workers. It tells you even more when the House passes a
"stimulus" bill that contains almost nothing for the unemployed but
includes $25 billion in retroactive corporate tax cuts =97 that is, pure
lump-sum transfers to corporations, most of them highly profitable.=20


Most political reporting about the stimulus debate describes it as a
conflict of ideologies. But ideology has nothing to do with it. No
economic doctrine I'm aware of, right or left, says that an $800
million lump-sum transfer to General Motors will lead to more
investment when the company is already sitting on $8 billion in cash.


As Jonathan Chait points out, there used to be some question about the
true motives of people like Dick Armey and Tom DeLay. Did they really
believe in free markets, or did they just want to take from the poor
and give to the rich? Now we know.


Of course, it's not all about lump- sum transfers. Since Sept. 11
there has also been a sustained effort, under cover of the national
emergency, to open public lands to oil companies and logging
interests. Administration officials claim that it's all for the sake
of national security, but when you discover that they also intend to
reverse rules excluding snowmobiles from Yellowstone, the truth
becomes clear.


So what's the real state of the nation? On TV this looks like World
War II. But though our cause is just, for 99.9 percent of Americans
this war, waged by a small cadre of highly trained professionals, is a
spectator event. And the home front looks not like wartime but like a
postwar aftermath, in which the normal instincts of a nation at war =97
to rally round the flag and place trust in our leaders =97 are all too
easily exploited.=20


Indeed, current events bear an almost eerie resemblance to the period
just after World War I. John Ashcroft is re-enacting the Palmer raids,
which swept up thousands of immigrants suspected of radicalism; the
vast majority turned out to be innocent of any wrongdoing, and some
turned out to be U.S. citizens. Executives at Enron seem to have been
channeling the spirit of Charles Ponzi. And the push to open public
lands to private exploitation sounds like Teapot Dome, which also
involved oil drilling on public land. Presumably this time there have
been no outright bribes, but the giveaways to corporations are
actually much larger.=20


What this country needs is a return to normalcy. And I don't mean the
selective normalcy the Bush administration wants, in which everyone
goes shopping but the media continue to report only inspiring stories
and war news. It's time to give the American people the whole picture.=A0




                 *****************************************************



                  =20

Almost all the domestic economists are predicting a domestic recovery
next year, but how

much experience do they really have with modeling the global economy?
The last major=20

global contraction was way back in the 1930's and long forgotten.
Meanwhile economic=20

stimulus and monetary policy are only domestic in their influence.


And as the following piece points out, investments which are needed
for the expansion of=20

capital really have an underlying psychological component. Economics
can never be put=20

on a firm footing unless it somehow manages to model optimism and
fear.=20


-- Roger




=
<underline><color><param>1A1A,1A1A,FFFF</param>http://www.nytimes.com/2001=
/11/25/international/25RECE.html</color></underline>



"...Ultimately, economics can be a self-fulfilling prophecy. The world
is unlikely to fall into a deflationary=20

spiral unless people believe that will happen. But even psychology can
be borderless.


While the Bush administration is worried about how Americans and Arabs
are getting divergent information=20

about the war in Afghanistan, economists are more focused on the fact
that the vast majority of people around=20

the world get roughly the same take on events. French, Spanish, Thai
and Korean people have reacted in much=20

the same way to the attacks of Sept. 11. Air travel and tourism are
down everywhere.


Mr. Rogoff said he saw a high correlation between business and
consumer sentiment across the world that might=20

sway economic performance even more than other common links, like
trade and finance.


"One reason we have become more synchronized," he said, "is because
we're all watching CNN."


=20

</fontfamily>=

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