Thursday, June 24, 2010

Mish slashes Krugman

I need to say (again) that our current problem is not fundamentally one of insufficient aggregate demand or aggregate output, but of its distribution.  Our social contract is broken, our income and wealth distributions are obscene.  There is enough to go around, we are richer than we were twenty years ago, it just isn’t going around.

The Germans and the EU states in general have (1) state subsidized health care for all (2) a livable dole for the unemployed, and (3) a memory only a few generations old of hyperinflation.

Once they decide to discipline their unions, the EU countries will be able to weather a fiscal tightening without catastrophe.  They will hunker down together and drink wine.

The reason the Feds have been paying for the states’ unemployment insurance claims in the US (to the tune of a reported $10 billion a month) is because we don’t have a livable dole, or health care for all, and millions of families, many with children, are entering a humanitarian catastrophe right under the noses of the “sovereign individuals,” Tea Partiers, and members of the Party of “No,” the Republicans.

Krugman, a New Yorker unable to separate himself from the local zeitgeist, is effectively a mouthpiece for a Wall Street that is salivating over the opportunity to lever up with free money from the Fed for a hyperinflation and make a really big killing.  Perhaps this time they can evict the entire bottom 99 percent of the income distribution from their houses, or at least reduce them to penury and an appropriate attitude of servitude.

“Let them live on the streets, it’s a free country.”  The Peter Schiff platform.

.     .     .

Post script:

But I'd also like to point out that large financial centers in certain cities around the planet are certainly going to kill millions of us by destroying our social safety networks in the name of their imaginary financial efficiency. You're a thousand times more likely to die because of what some urban banker did in 2008 than from what some Afghan-based terrorist did in 2001. *Financiers live in small, panicky urban cloisters, severely detached from the rest of mankind. They are living today in rich-guy ghetto cults. They are truly dangerous to our well-being, and they are getting worse and more extremist, not better and more reasonable. You're not gonna realize this havoc till you see your elderly Mom coughing in an emergency ward, but she's going there for a reason.

--Bruce Sterling, in


The Global Political Awakening and the New World Order


  1. Pity mish is such a loon. He's really gone off the deep end lately. According to him the entirety of usa's problems is that they pay policemen too much and the service should be provided by the lowest bidder ...

    His attitude embodies all that is wrong and none of what is right with your screwed up nation.

  2. Mish is a money manager, and hence sides with the "free marketeers," really upholders of the reigning plutocracy. He knows which side his bread is buttered on.

    Absent that, he makes some good points on macro and the stupidity of "Keynesian" solutions to our problems. Would he support Euro-style a social safety net? Doubt it. He represents a strain of hard-nosed Americanism that says that it will take a good depression to bring people back to moral and fiscal probity, in a state in which (almost Hong Kong style) the only safety net is provided by close genetic relatives.

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