Krugman- He's Just Not that Into You

[n2doc]

Where by “he” I mean Obama, and by “you” I mean Democrats, and everything they stand for:

Obama Offered To Raise Medicare Eligibility Age As Part Of Grand Debt Deal

Terrible policy, disastrous politics. Perfect!

http://krugman.blogs.nytimes.com/2011/07/11/hes-just-not-that-into-you/

July 11, 2011, 7:12 PM
Obama and the Capital Flow Fallacy

Obama’s press conference wasn’t as bad as it could have been; he actually more or less said that stimulus should be sustained, except it isn’t politically possible. But he also invoked the confidence fairy – and introduced another fallacy, showing that he and his advisers still don’t get the essence of macroeconomics in a liquidity trap:

I do think that if the country as a whole sees Washington act responsibly, compromises being made, the deficit and debt being dealt with for 10, 15, 20 years, that that will help with businesses feeling more confident about aggressively investing in this country, foreign investors saying America has got its act together and are willing to invest. And so it can have a positive impact in overall growth and employment.

OK, so that’s the confidence fairy at the beginning. But the “foreign investors” thing is actually worse.

Think about it: U.S. interest rates are low; there’s no crowding out going on; we are NOT suffering from a shortage of saving.

So if foreign investors decide they love us, what does it do? It drives up the value of the dollar, which reduces exports, which leads to fewer jobs.

more
http://krugman.blogs.nytimes.com/2011/07/11/obama-and-the-capital-flow-fallacy/

[WillyT]

1. K & R !!!

:kick:

[MNBrewer]

2. his advisors are the best he could find? ORLY?

[myrna minx]

3. I am both baffled and astonished by his dangerous tone deafness.

[Autumn]

4. Some Democrats are just not into him any more

That could change if he tried doing what Democrats have always, up till now, stood for.

[SolutionisSolidarity]

8. It's getting awful late for that.

I hoped there would be some 2012 push for infrastructure spending, to give him a something to campaign on if nothing else. Unfortunately, he's putting all of his remaining political capital into cutting social security/medicare, and that is a big hint as to the kind of campaign he intends to run. Pity.

[sabrina 1]

5. That's okay, the feeling is becoming more and more mutual.

[dawg]

6. kick

We really need a primary challenger.

[MichiganVote]

7. Yeah well, there's more than one dog that left the ranch when the meals were sparse.

I'm not much into Obama either. Becoming too hungry.

[snagglepuss]

9. K & R nt

[LooseWilly]

10. So, who benefits from an increase in the value of a dollar? Employers of foreign workers...

"... It drives up the value of the dollar, which reduces exports, which leads to fewer jobs. ..."

Think about it... if I'm exchanging $50 for a foreign currency, then the $50 will buy more {pesos/rupees/yen/etc.}... and if I'm paying someone 5K rupees a month to do software work... it takes less $USD to amount to 5K rupees.

Maybe Obama & his crew understand all too well the effects of foreign investment—and that sound bite was very purposefully included in the speech...

:+

[neverforget]

11. I'm baffled too. It's terrible politics for a Democrat to offer up cuts in SS and Medicare.

Isn't that something that should come from Republicans?

And why on Earth are we talking about cuts? Shouldn't we be talking about creating jobs? Cuts don't create jobs.

[donheld]

12. He's Just Not that Into You -- until he needs donations.

[somone]

13. It's becoming clearer by the day that Obama is the antithesis of everything Democrats have stood for