----- Forwarded Message ----- From: Steve Kurtz <kur...@ncf.ca> To: ottawadissent...@yahoogroups.com Cc: Keith Hudson <keithhudso...@googlemail.com> Sent: Saturday, August 17, 2013 12:07:28 PM Subject: Re: [Ottawadissenters] Re: [Futurework] Moment of Truthiness and the US debt Ed, Curious how my post of yesterday brought zero comments or attempted rebuttal. Note that Krugman and the economy under discussion are American. I am a dual citizen who has lived 61 of my 68 years in the US. Is it easy to cheer for more debt p/capita if it isn't your country? Steve ( pls post to Futurework as I'm not subscribed) On Aug 17, 2013, at 11:35 AM, Ed Weick wrote: > > > > >Keith, > > >I'm sure that you and Krugman would get on very well over coffee. > > >On when the gold standard slipped out of economic teachings and thought, I >have a few old economics texts on my shelves. In the oldest one, "A Social >Approach to Economics" by H.A. Logan and M.K. Inman, published in 1939, the >gold standard gets several pages of discussion. In a more recent one, "A >Textbook of Economic Theory" by A.W. Stonier and D.C. Hague, published in >1953, gold is given some attention though not really very much. In the most >recent one, "Macroeconomic Theory" by Garner Ackley, published in 1961, the >gold standard is not listed in the index, so I'd expect that there's very >little attention given to it. The book is mostly about Keynes' General Theory. > > >It does seem that the gold standard slipped out of what kids were being taught >at university somewhere between 1939 and 1961. I did my undergrad work between >1952 and 1957 and I don't recall any emphasis on the gold standard at the >time. But memory fades. It was a long time ago. > > >I thought I still had a copy of Samuelson on my shelves, but like a lot of >things I have there, it's hiding on me. > > >Ed > > > > > >________________________________ > From: Keith Hudson <keithhudso...@googlemail.com> >To: "RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION" ><futurework@lists.uwaterloo.ca>; Ed Weick <ewe...@rogers.com> >Sent: Friday, August 16, 2013 4:29:53 PM >Subject: Re: [Futurework] Moment of Truthiness and the US debt > > > >Ed, > >I am not attacking Paul Krugman personally. If he and I were to sit down together, I'm in little doubt that we would share a great many social values and objectives. As far as orthodox economic beliefs are concerned, I would be surprised if they were not identical up right up to mid-life Keynesianism. > > (Note that this has to be "mid-life" Keynes. The young Keynes pressed hard for the gold standard immediately after WWI; in 1944, the older Keynes agreed to a gold standard dollar and a gold-standard SDR [Special Drawing Right]. But, as to Keynes' mid-life views, Krugman and I are on opposite sides of the fence. As to Keynes' mid-life views, they happened to catch a new wave of economic textbooks, particularly Paul Samuelson's, where the gold standard was barely mentioned. The whole body of economics shifted from the supply-siders to the demand-siders. > >Keith > >At 20:03 16/08/2013, you wrote: > >The following is from an article on the US government deficit by Jeffrey Sparshott. It was in the August 12 Wall Street Journal: >> >> >>"WASHINGTON—The U.S. goovernment is posting the strongest revenue since before the recession, buoyed by higher tax rates and a slowly improving economy, leaving the federal budget on track for its narrowest deficit in five years. >> >> >>Revenue from October to July, the first 10 months of the government's fiscal year, totaled $2.287 trillion, the Treasury Department said Monday. That is up about 14% from a year earlier and about 8.1% from the first 10 months of 2007, the next highest year for revenue. Meanwhile, government spending is down slightly, largely due to across-the-board cuts called the sequester that went into effect March 1. >> >> >>Overall, the government is still spending well more than it collects, albeit at a slower pace. The budget deficit for the 10 months reached $607.42 billion, 38% narrower than a year earlier. >> >> >>For the fiscal year ending Sept. 30, the Congressional Budget Office estimates a deficit of $642 billion, compared with $1.087 trillion a year earlier and the smallest gap since 2008's $458.55 billion shortfall." >> >> >>What is at issue in the above is the revenue the government currently takes in versus the money it currently spends. If spending exceeds revenue, it must of borrow. And, of course, if spending continues to rise faster than revenue, the government debt keeps growing. Much of this debt is held by foreigners. According to Wikipedia: >> >> >>"As of January 2011, foreigners owned $4.45 trillion of U.S. debt, or approximately 47% of the debt held by the public of $9.49 trillion and 32% of the total debt of $14.1 trillion.[70] The largest holders were the central banks of China, Japan, Brazil, Taiwan, United Kingdom, Switzerland and Russia.[72] The share held by foreign governments has grown over time, rising from 13% of the public debt in 1988[73] to 25% in 2007." >> >>Much has been written about the potential problems arising out of American indebtedness to major foreign powers, especially China. But perhaps the problems are exaggerated. Wikipedia again: >> >> >>"According to Paul Krugman, "It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction." >> >>Which gets me to a point I wanted to make in the first place. Keith refers to Krugman as "the master of rhetorical tricks". Others on lists I access have occasionally referred to him in disparaging terms. Why? In my opinion he is a valid social thinker. I've got a couple of his books on my shelves, which means they may be lost forever. But I was impressed with "Conscience of a Liberal" and "Return to Depression Economics" and continue to be impressed with his thoughtful columns. I would suggest that we give him a little more chance than we've tended to. >> >>Ed >> >>________________________________ >>From: Keith Hudson <keithhudso...@googlemail.com> >>To: "RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION" <futurework@lists.uwaterloo.ca> >>Sent: Friday, August 16, 2013 11:36:16 AM >>Subject: [Futurework] Moment of Truthiness >> >> >> >>As I've remarked several times before, Paul Krugman is a master of >>rhetorical tricks. In today's NYT offering he takes disingenuousness deep >>into deceit territory. One example is where he writes: "Thus Eric >>Cantor, the third-ranking Republican in the House, declared on Fox News >>that we have a “growing deficit,†while Senator Rand Paul told Bloomberg >>Businessweek that we’re running “a trillion-dollar deficit every year.†>>" >> >>Strictly speaking, a "deficit" refers to a negative balance in >>a country's annual budget. In that sense, Krugman is correct because, in >>January of this year (at the time of the 'fiscal cliff'), the foundations >>of a typical Bush budget had been automatically re-imposed on Obama >>(previously largely inherited from Clinton's budgets) and that had been >>in surplus. Bush's budgets were actually not ever in surplus but would >>have been if he and Cheney had not decided to invade Iraq and spending at >>least a trillion dollars on that. >> >>In reality, the deficit refers to a mammoth shortage of those funds that >>will be needed for state health, welfare and pensions benefits that will >>be needed in a few years' time. This is what Obama will have in his mind >>(together with most of the American population) in contrast to Krugman's >>use of "deficit". The essay below should have been entitled >>"Moment of Relative Truthiness" >> >>Keith >> >> >>Moment of Truthiness >>Paul KrugmanWe all know how democracy is >>supposed to work. Politicians are supposed to campaign on the issues, and >>an informed public is supposed to cast its votes based on those issues, >>with some allowance for the politicians’ perceived character and >>competence. >> >>We also all know that the reality falls far short of the ideal. Voters >>are often misinformed, and politicians aren’t reliably truthful. Still, >>we like to imagine that voters generally get it right in the end, and >>that politicians are eventually held accountable for what they do. >> >>But is even this modified, more realistic vision of democracy in action >>still relevant? Or has our political system been so degraded by >>misinformation and disinformation that it can no longer function? >> >>Well, consider the case of the budget deficit - an issue that dominated >>Washington discussion for almost three years, although it has recently >>receded. >> >>You probably won’t be surprised to hear that voters are poorly informed >>about the deficit. But you may be surprised by just how misinformed. >> >>In a well-known paper with the discouraging title, “It Feels Like We’re >>Thinking,†the political scientists Christopher Achen and Larry Bartels >>reported on a 1996 survey that asked voters whether the budget deficit >>had increased or decreased under President Clinton. In fact, the deficit >>was down sharply, but a plurality of voters Â- and a majority of >>Republicans - believed that it had gone up. >> >>I was wondering on my blog what a similar survey would show today, with >>the deficit falling even faster than it did in the 1990s. Ask and ye >>shall receive: Hal Varian, the chief economist of Google, offered to run >>a Google Consumer Survey - a service the company normally sells to >>market researchers - on the question. So we asked whether the deficit >>has gone up or down since January 2010. And the results were even worse >>than in 1996: A majority of those who replied said the deficit has gone >>up, with more than 40 percent saying that it has gone up a lot. Only 12 >>percent answered correctly that it has gone down a lot. >> >>Am I saying that voters are stupid? Not at all. People have lives, jobs, >>children to raise. They’re not going to sit down with Congressional >>Budget Office reports. Instead, they rely on what they hear from >>authority figures. The problem is that much of what they hear is >>misleading if not outright false. >> >>The outright falsehoods, you won’t be surprised to learn, tend to be >>politically motivated. In those 1996 data, Republicans were much more >>likely than Democrats to hold false views about the deficit, and the same >>must surely be true today. After all, Republicans made a lot of political >>hay over a supposedly runaway deficit early in the Obama administration, >>and they have maintained the same rhetoric even as the deficit has >>plunged. Thus Eric Cantor, the third-ranking Republican in the House, >>declared on Fox News that we have a “growing deficit,†while Senator Rand >>Paul told Bloomberg Businessweek that we’re running “a trillion-dollar >>deficit every year.†>> >>Do people like Mr. Cantor or Mr. Paul know that what they’re saying isn’t >>true? Do they care? Probably not. In Stephen Colbert’s famous >>formulation, claims about runaway deficits may not be true, but they have >>truthiness, and that’s all that matters. >> >>Still, aren’t there umpires for this sort of thing  trusted, nonpartisan >>authorities who can and will call out purveyors of falsehood? Once upon a >>time, I think, there were. But these days the partisan divide runs very >>deep, and even those who try to play umpire seem afraid to call out >>falsehood. Incredibly, the fact-checking site PolitiFact rated Mr. >>Cantor's flatly false statement as “half true.†>> >>Now, Washington still does have some “wise men,†people who are treated >>with special deference by the news media. But when it comes to the issue >>of the deficit, the supposed wise men turn out to be part of the problem. >>People like Alan Simpson and Erskine Bowles, the co-chairmen of President >>Obama’s deficit commission, did a lot to feed public anxiety about the >>deficit when it was high. Their report was ominously titled “The >>Moment of Truth.†So have they changed their tune as the deficit has come >>down? No  so it’s no surprise that the narrative of runaway deficits >>remains even though the budget reality has completely changed. >> >>Put it all together, and it’s a discouraging picture. We have an >>ill-informed or misinformed electorate, politicians who gleefully add to >>the misinformation and watchdogs who are afraid to bark. And to the >>extent that there are widely respected, not-too-partisan players, they >>seem to be fostering, not fixing, the public’s false impressions. >> >>So what should we be doing? Keep pounding away at the truth, I guess, and >>hope it breaks through. But it’s hard not to wonder how this system is >>supposed to work. >> >>_______________________________________________ >>Futurework mailing list >>Futurework@lists.uwaterloo.ca >>https://lists.uwaterloo.ca/mailman/listinfo/futurework >>_______________________________________________ >>Futurework mailing list >>Futurework@lists.uwaterloo.ca >>https://lists.uwaterloo.ca/mailman/listinfo/futurework > > > > __._,_.___ Reply via web post Reply to sender Reply to group Start a New Topic Messages in this topic (6) Recent Activity: Visit Your Group Switch to: Text-Only, Daily Digest • Unsubscribe • Terms of Use • Send us Feedback . __,_._,___
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