Once again, Krugman is proven correct

He was absolutely on the money when he warned in this January 2009 NYT commentary that Obama's initial fiscal stimulus package didn't go nearly far enough. One aspect of the damage of the Bush years can be measured in terms of its unpardonable fiscal profligacy, mostly thanks to stupid, misdirected tax cuts coinciding with stupid, expensive wars, which the White House tried to keep off the books at the time. From the Center on Budget and Priorities:

Just two policies dating from the Bush Administration — tax cuts and the wars in Iraq and Afghanistan — accounted for over $500 billion of the deficit in 2009 and will account for almost $7 trillion in deficits in 2009 through 2019, including the associated debt-service costs. (The prescription drug benefit enacted in 2003 accounts for further substantial increases in deficits and debt, which we are unable to quantify due to data limitations.) These impacts easily dwarf the stimulus and financial rescues. Furthermore, unlike those temporary costs, these inherited policies (especially the tax cuts and the drug benefit) do not fade away as the economy recovers.

The fiscal disaster that was Bush can also be assessed in terms of the budgetary things that went criminally unattended - and which were exacerbated by the tax cuts and wars. This was not nearly sufficiently appreciated by Team Obama. When the incoming Obama administration announced its budget plan at the beginning of 2009, Krugman warned:

Bear in mind just how big the U.S. economy is. Given sufficient demand for its output, America would produce more than $30 trillion worth of goods and services over the next two years. But with both consumer spending and business investment plunging, a huge gap is opening up between what the American economy can produce and what it’s able to sell.

And the Obama plan is nowhere near big enough to fill this “output gap.”

Earlier this week, the Congressional Budget Office came out with its latest analysis of the budget and economic outlook. The budget office says that in the absence of a stimulus plan, the unemployment rate would rise above 9 percent by early 2010, and stay high for years to come.

Grim as this projection is, by the way, it’s actually optimistic compared with some independent forecasts. Mr. Obama himself has been saying that without a stimulus plan, the unemployment rate could go into double digits.

Even the C.B.O. says, however, that “economic output over the next two years will average 6.8 percent below its potential.” This translates into $2.1 trillion of lost production. “Our economy could fall $1 trillion short of its full capacity,” declared Mr. Obama on Thursday. Well, he was actually understating things.

To close a gap of more than $2 trillion — possibly a lot more, if the budget office projections turn out to be too optimistic — Mr. Obama offers a $775 billion plan. And that’s not enough.

To repeat: this was written in January '09. Obama explicitly acknowledged Krugman's warnings, and greeted them with extraordinary condescension:

"If Paul Krugman has a good idea, in terms of how to spend money efficiently and effectively to jump-start the economy, then we’re going to do it. If somebody has an idea for a tax cut that is better than a tax cut we’ve proposed, we will embrace it . . . Just show me. If you can show me that something is going to work, I will welcome it."

In other words, no matter what you've shown me, you haven't shown me.

Two years on, with the benefit of hindsight, it appears Krugman was dead-on.

Naturally, the pundits completely misinterpreted the implications of the Dems' 2010 mid-term election rout. About the election, as Krugman has more recently pointed out:

The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task.

And here we are - with the tax-cut deal, Obama is doing little more than throwing a hail-Mary pass. In the mean time, we have the execrable Caldwell once again revelling in unreality in the FT with a bizarre interpretation of the facts on the ground but somehow coming up with the correct political diagnosis: the era of collusion between the main political parties in the United States is indeed probably coming to an end.

It is, however, too late. America is destined to move quickly from the world's only superpower to a highly influential member of the G-20. The new paradigm is upon us.

I come across the French quite a lot

Officially, I usually take issue with their views. On a different level - the one that perhaps is more important - I concede that they are right on very much. How I admire this annoying country.

Twilight and the tyranny of numbers

Three books out writing the epitaph for America's leading role on the world stage. One of them - the last of the three reviewed, The Frugal Superpower, by Michael Mandelbaum - strikes me as getting it right:

The Frugal Superpower argues that the Afghan War is no aberration. It marks the beginning of a new era of constraint in US foreign policy. After the crash, it is increasingly apparent that “mounting domestic economic obligations will narrow the scope of American foreign policy”. In a brief but remorseless work, Mandelbaum first sets out “the tyranny of numbers” and the growing claims on America’s budget. In his view this will make America less able to play the central role in the international system that the US, and the rest of the world, has come to take for granted. America will “no longer provide as large a market for other countries’ exports”. And there will be no further Iraq or Afghan wars, since the US will lack the resources to embark on expensive exercises in state-building.

The Iraq and Afghan wars have hardly been advertisements for the beneficial use of American power. So many people, both in the US and around the world, might greet the prospect of a new era of American foreign policy restraint with applause and relief. Mandelbaum believes, however, that a diminished American global role will destabilise international relations and will open the way for Russia and China, in particular, to challenge the global order established by the US in the aftermath of the cold war.

In the mean time, the hope that China is just another Japan-style bubble strikes me as ephemeral at best.

The right take . . .

. . . my bet is people will look back upon the American imperium as relatively benign, Bush/Cheney excepted (who not-so-coincidentally will have marked the turning point in Amreica's fortunes).

Ooo! Ooo! Ooo! . . . I can't believe I missed this!

Thank you, Salon:

We're listing the worst columnists and cable news commentators America has to offer. Think of this as our all-star team -- of the most predictable, dishonest and just plain stupid pundits in the media.

Late update: that Charles Krauthammer didn't even get a mention is criminal . . . he waz robbed!

Ya think?

Froomkin:

History is likely to judge Bush most harshly for two things in particular: Launching a war against a country that had not attacked us, and approving the use of cruel and inhumane interrogation techniques.

And that's why the two most essential lies -- among the many -- in his new memoir are that he had a legitimate reason to invade Iraq, and that he had a legitimate reason to torture detainees.

Neither is remotely true. But Bush must figure that if he keeps making the case for himself -- particularly if it goes largely unrebutted by the traditional media, as it has thus far -- then perhaps he can blunt history's verdict.

Read the rest - nothing new we didn't already know, but it's a bit jarring to be reminded how easy it is to forget just how bad that horrid little man really was.

Late update: Lionel Barber was one of four experts who briefed Dubbya before his first trip to Europe, when Boy Wonder announced his plan to "look into Putin's soul." His own review of Dubbya's ghost-written book is sober, measured, respectful - but he cannot help but conclude:

The more likely judgment is that Bush's two terms marked the moment when US power peaked and over-reached, with execrable consequences.

More Reasons Not to be Thankful

Yes, I'm glad just not to have Bush or McCaine or Palin in the White House. I guess that's what Obama is counting on, because on the things that matter, I remain pretty disappointed: Krugman again.

Another Epic Media Fail

. . . they are hopeless.

And Tony and Dubbya will still say it was all worth it

Yes, Saddam was very bad man . . . shall we ask the dead if they agree?

Late update: sorry - 79,000 dead is laughably low. Just hilarious.

Could not agree more . . .

I am so glad Karl Rove doesn't want the Iraq war to be left down deep in the memory hole: like Josh, I welcome Karl's urge for re-examination. I suspect my motivations are somewhat different from Karl's, however.

Once again, Paul nails it:

The truth, however, is that the only problem Republicans ever had with George W. Bush was his low approval rating. They always loved his policies and his governing style — and they want them back. In recent weeks, G.O.P. leaders have come out for a complete return to the Bush agenda . . .

This includes - obviously - rehabilitating Bush's legacy on the Iraq war:

Finally, on the war: For most Americans, the whole debate about the war is old if painful news — but not for those obsessed with refurbishing the Bush image. Karl Rove now claims that his biggest mistake was letting Democrats get away with the “shameful” claim that the Bush administration hyped the case for invading Iraq. Let the whitewashing begin!

Meanwhile, here in the UK, the subject just won't die the death Tony Blair and Alistair Campbell (and probably the co-conspiring Conservatives) wish it would. From today's Observer:

. . . Carne Ross, the UK's Iraq expert at the UN between 1997 and 2002, writes that the inquiry is being prevented by "deep state" forces from establishing the government's true motivation for invading Iraq.

Ross, who appeared before the inquiry this month, says he was not provided with key documents relevant to his testimony and was warned by officials not to refer to an internal Foreign Office memo that contradicted the government's public case for war.

Will the truth ever out? The drum beats on:

Despite the official's concern, the paper was used to brief the cabinet. Ross writes: "This paper was pure overstated propaganda, filled with almost ludicrous statements like 'one teaspoon of anthrax can kill a million people'."

He [Carne Ross] expressed incredulity that the Foreign Office wanted references to the briefing removed from his testimony, as it related to a public document. "It is very worrying that the government machine is still trying to withhold key documents, and silence those of us with detailed knowledge of the policy history. I have been told too... that members of the [inquiry] panel have been refused documents they have specifically requested."

Simon Hughes, the Liberal Democrat deputy leader, said: "The Chilcot inquiry will not be credible if relevant documents that do not now threaten national security are kept from the inquiry and the public."

Ross said he had wanted to use his appearance to highlight how ministers failed to consider alternatives to military action. "I had asked for specific records relating to the UK's failure to deal with the so-called Syrian pipeline, through which Iraq illegally exported oil, sustaining the Saddam [Hussein] regime. I was told that specific documents, such as the records of prime minister [Tony] Blair's visit to Syria, could not be found. This is simply not plausible." He also asked for joint intelligence committee assessments on Iraq, some of which he helped prepare and all of which he had seen. "Only three were provided – 40 minutes before I was due before the Chilcot panel."

The claims come at the end of a week in which the former head of MI5, Dame Eliza Manningham-Buller, cast grave doubts on the case for invading Iraq and the deputy prime minister, Nick Clegg, described the invasion as "illegal".

The government may have withheld key documents whose release would pose no national security risk? Quel surprise!

The more I read . . .

. . . the more I like. Even as a Supreme Court newbie, Kagan showed remarkable sophistication and prescience . . .

Drill, baby, drill!

It's all about progress . . .

Fair-reading

Souter speaks . . . finally.

"Time to exchange the winter dirt for some fresh summer dirt in that sandbag she calls a mind"

- taken from a comment on another blog. Pretty infantile, I know, but not as infantile as when the rock star of the Right blames the "greenies" for the BP disaster.

I'm afraid Frank has missed the point

I like Frank Rich - the way he steps back to afford a view of the bigger picture - but this article, as good as it is, fails to call the Obama administration on its more fundamental failure: it's manifest betrayal of the principles it was put in power to advance. For moderates and progressives, Obama's policy initiatives (or lack thereof) have been extremely disappointing - far more a continuation of the previous administration's ruinous course. Instead of throwing down a clear marker signalling a break with the egregious past, Obama only nibbled at the edges of such things as civil rights and torture, especially in his wilful failure to hold perpetrators accountable, and outright embraced certain other Bush-era policies, like offshore drilling - despite the manifest corruption of the Minerals Dept.

In introductory courses on administrative law, budding young lawyer-wannabes learn all about "capture theory", which posits that for a variety of obvious reasons regulatory agencies quickly become "captured" by the industries they regulate. Lack of effective oversight of such agencies becomes, axiomatically, fatal. Obama went to a pretty good law school, and yet we seem to need to experience - catastrophically - this axiom put into practice.

This - thus far - is the signal failure of the Obama presidency and, unlike Bush, he knew better.

Ted Hearts Bison

On balance I think people should lighten up and let Ted continue with this - I think it's pretty cool and should be encouraged. The idea that bison should be confined to the Park and kept entirely off limits as if they are museum relics once they cross the park boundary is ridiculous. Ted is paving the way to acceptance by a paranoid ranching community that just needs to get over the fact that their industry is contracting.

Me like what me see . . .

While some aspects of her oeuvre are not great (e.g., I worry that her rejection of judicial activism won't extend to the masturbatory rantings by nutcases like Scalia since it's become conventional wisdom that conservatives by definition can't be judicial activists, which is completely ridiculous), this is pretty good stuff:

During Ms. Kagan’s confirmation for solicitor general, she was asked whether the president has the authority to order wiretaps without a warrant from a court.

She cited a three-part analysis established by the Supreme Court in a 1952 case, Youngstown Sheet and Tube Company v. Sawyer, which struck down president Harry S. Truman’s authority to seize the nation’s steel mills in the name of national security. (The Justice Department cited the same analysis in 2006 in justifying President George W. Bush’s power to order the National Security Agency surveillance program, as did Judge Samuel A. Alito Jr. during his Supreme Court confirmation hearings.) The analysis notes that “when the President takes measures incompatible with the expressed or implied will of Congress,” presidential “power is at its lowest ebb” and these circumstances should be rare.

Obama picks a uniter, not a divider

Interesting track record at Harvard - Obama's tacking to the middle. Not sure she'll be able to do much to forge a consensus among the Supremes when one is a raving lunatic and another may as well be in a coma.

What in the world is the Guardian smoking?

It's so over for Gordon, I don't care what drugs are making the Guardian suggest it isn't.

I, too, recently believed that the Lib-Dems HAD to find a way to make a coalition work with Labour if they wanted any prayer of electoral reform that approximates proportional representation (and basic notions of fairness), but the gap is too wide, and they are going to be screwed by the Tories, plain and simple. The Lib-Dems just don't have the numbers to make it work the way they want. It's going to be a mess here in the UK for the foreseeable future.

This parliament will not "hang" well (cue the porn jokes), anyway you look at it.

True to my investment prowess, the prospect of continued aimless dithering in the UK while Greece burns compelled me to cash out of my money market fund in the U.S. and invest in the markets. Timing is everything! Oh well: Warren Buffet I ain't.

These are starting to resurface

It was the taxi-driver's story that made me sick . . . let's see if Obama's Justice Department continues its campaign to keep justice out of the play-book.

Late update:

Here's a film worth seeing about what happened to that poor taxi-driver, and the inevitable cover-up which followed.