Krugmania: Zombie Economics

Feeling Weak in Denise and Somewhat Leary.

 In an article in the LRB, entitled The Gatekeeper, Adam Tooze describes the "radicalization" of Krugmanomix, citing Paula Krugman's Slate-published column, In Praise of Cheap Labor, an essay that surely bears all the Hallmarks of Krugmanesque intolerance of anyone not onboard with his rationalizations, couched in economic esoteric jargon, for handing over to the last major Communist country in the world the technological knowhow without which it could not have become the worldwide military and hegemonic threat it has grown into today. 

And that is just one example of the result of the adoption of Krugmaniacal econoNazism. His neoliberal response to any criticism of his badly flawed economic model is a mode of response which set the tone for the collegiate attitudes which prompted Limbaugh's coining of the term "femiNazis" from which he derived such baleful piles of political hay. And one that had as its descendant the Clintonian knee-jerk reaction  to the former failed ex-president's supporters as "Deplorables. That's pure Krugmania scold-speech there.

Krugman was the first to don the Guys of a Liberal in order to press his atavistic onslaught on the economic stability of the middle class, turning it into the muddled class, as the US populace was used as a pawn in an ivory-tower experiment to turn hard-working stiffs into a leisure class of tattooed, nail-saloned, spa-pampered ne'er do-wells with no future for their offspring and no retirement in their future, their jobs methodically transferred to a totalitarian Communist-ruled one-Party Regime. And should you raise any objection to the cynicism inherent in simultaneously collecting enormous premiums from the US taxpayers, the justification for which was the War on Communism, while promulgating a plan to bring "Bad jobs at bad wages" to prop up a failed political system via American transfer of taxpayer-funded technology to the technically backward business class of Communist Red China, you would become the target of a Krugmaniacal supercilious sardonic barrage of sarcasm and pseudoscientific diatribes.

The genesis of Trumpism lies at the heart of Krugmanomics and its insistence that the America working class was displaying how "muddled its thinking is" for not whole-heartedly supporting his Princeton  ivory-tower concocted vision of a Totalitarian Communist country becoming democratized by bringing "development", as though it were an innocuous roll of film you could later pickup at a Fotomat kiosk, at the cost of their own livelihoods and pensions, calling any opposition to his ideas "an intellectual and moral failure", what amounts to shutting down debate by calling those who objected deplorable, stupid, and well, basically evil. That's what intellectual and  moral failures are, after all.  Hillary Clinton's more succinct "basket of deplorables", is pure re-packaged Krugmania.

Tooze describes Krugman as someone who has stopped being the gatekeeper of the status quo and instead become its critic. Well how nice, that.

But of what good is it without a tour of the country, without a lecture series, perhaps in contretemps to his fellow Princetonian, Bernanke, who was collecting his $250,000/per for those lunchtime chats after he brought the world economy to its knees by letting Lehman's collapse (They both probably had accounts under fictitious names at Michael Burry's Scion Capital), to explain to the American public that you were instrumental in their being hoodwinked, and are responsible for the rapid industrialization of an agrarian economy, turning a backward undeveloped (it now boasts the world's #2 economy, yet is still, somehow, "undeveloped") nation into a Communist Superpower with an economy second only to the US, that has accelerated the pace of climate change, muscled up its military, which it now uses to threaten Taiwan, protect its fellow totalitarian Communist regime of North Korea, and bully the Philippines; created a class of Crazy-rich in both their country and our own, and sown the seeds for the corona virus to become a worldwide pandemic in the process, for it is China's US-enabled rise that turned it into the center of world trade and facilitated both its agricultural industrial-scale mono-cropping and human/wild interaction that ushered Covid into mainstream life, wherein Chinese tourists, an unheard-of class until Krugmanomics, being the main vector of transmission to the rest of the world. 

In other words, far from admitting there was "an intellectual and moral failure" at the heart of darkness beating in Krugmanomic's deliberate creation of a Zombieland from the nation's industrialized heartland, he retains his sinecure at the NYT from which he now acts as scold emeritus as though somehow destroying mid-America and turning it into a fly-over zone of economic despair bestows upon him some kind of igNoble prize in Zombie Economics. 

Tooze continues:

"the fact that a comprehensive financial crisis could hit the US itself shook his confidence deeply – and all the more so because he hadn’t seen it coming. ‘What I sometimes berate myself for,’ he wrote, is that like other mainstream economists he had failed to see that a crisis of the 2008 type was a ‘fairly likely event’. The rise of shadow banking and unstable funding like repurchasing agreements or ‘repo’ (short-term financing for dealers in mortgage backed securities and other bonds), should have set off alarm bells."

What Tooze doesn't care to mention is that, "The rise of shadow banking and unstable funding like ‘repo's’" did set off alarm bells, only not with that cabal of self-satisfied, sanctimonious navel-gazing men's club of gatekeepers called MSM, which including his employer the NYT, preferred to publish his narrative, along with that of the Killer Clown from Outer Space of the economic profession, Ben Stein's. But the online community at the time was rife with prognostications of spine-tingling accuracy that deftly illustrated the mechanism of the collapse as though they had pro-actively written the Jenga scene from The Big Short. Mike Shedlock, aka Mish, Susan Weber, aka Yves Smith, Doug Noland, Peter Schiff, Agora Financial's staff of rogue traders, Zerohedge, Nouriel Roubini, Nassim Taleb,and a whole raft of other analysts ringing the alarm bells of incipient collapse, and outlining the strategies needed to be taken to escape the liquidity trap being set up by complacent know-it-alls. The know-it-alls like Krugman who have the nerve to call others "zombies" after he's eaten their brains; the elites who turned the country against elites are ensconced in the economics profession and sitting on the board of the FOMC collecting millions of dollars in taxpayer-funded salaries, yet who couldn't see what, I, a home-bound miscreant could, and who to this day collect those millions from the American taxpayer while working for a private institution that sets monetary policy for the commodity in which all other commodities are valued: money. And yet call it a free market, when everything that is valued in that market is dependent for its assessed worth on a commodity whose price is, by virtue of the manipulation of the very asset used to quantify it, shamelessly rigged to create what they still bald-facedly refer to as the "Wealth Effect": the deliberately manipulated illusion that your assets are worth far more than what they actually are so that you will be blind to Risk.

Taking Kurt Eichenwald's Conspiracy of Fools, the true story of  how Enron cooked its books, as a Dummy's Guide to Financial Fraud on a Global Scale, the financial sector was allowed, nay, encouraged, to run rampant over the real economy so as to squeeze out of an economy benighted by the eviscerations of Krugmanomics the semblance of growth by using the exact same mechanisms employed by the crook Kenneth Lay and his coterie of rehypothecating wizards, having pored over their Grimoire of Defalcations to concoct quant-like formulae and off-book entities with which to hoodwink investors and deceive the public. If that sounds familiar, it's because it had in its black heart the same legerdemain that the Fed's member institutions used to make investors believe the Banks were worth more than they in actuality were, having, as they did, trillions in undisclosed liabilities hidden in sham companies created so as to move them off their books and out of the purview of the public. The exact same strategy Enron employed, the Maestro of which was still languishing in jail. 

All while highly-paid federal officials collected their salaries and sat on their hands knowing that their jobs were safe no matter what should ensue from their negligence; that is, after all, what laissez-faire means: do-nothing and get paid handsomely for it, replete with benefits that no actual job in the private sector can ever hope to receive. You know, the jobs for those that the Krugmaniac calls zombies, jobs where there are metrics, and you have to actually perform or you lose them.

A fact not lost on Tooze ... here he is on Summers' talk role in our Long Dazed Journey into Blight:

While Summers, clinging to his generation’s assumptions about the proper balance between politics and technocratic judgment, wants to drag the conversation back to inflation and ‘output gaps’, what is actually at stake is the future of the republic. In 2020 America came through something close to an existential social and political crisis. That crisis is now understood by large parts of the Democratic Party not as an unforeseeable shock, but as enabled by the forty years of ‘responsibility’ that Summers invokes as the gold standard: successive Democratic administrations failing to address inequality and handing the game to the utterly unscrupulous Republicans. 

This is the closest thing I  have seen to an admission by any Democrat that a Trumpelstiltskin-style shake-up wasn't only a foreseeable shock, but that it had as its impetus successive Democratic administrations, and by proxy, their "conscience of a Liberal" mentality that you can continue to expect the middle class, whose standard of living was intentionally knee-capped specifically to create jobs in a single-party Communist-ruled economy, should be expected to carry on paying for a liberal agenda with their now conservative valued paychecks with which they can barely stay housed and fed, let alone worry about their trans-gendered, drug-addled, tattooed and ballyhooed neighbors.

It is for this reason that, although I agree with the impetus and sentiments behind the Green New Deal, I don't for a second believe in any of the actions it has proposed to "Save the Planet". Like Globalization, there lies at its heart their lies. In the exact same vein as Food for Fuel, Fuel for Fools employs similar dynamics of demanding an immense increase  in the creation of CO2 in order to reap the unfounded claims of a net-zero energy economy, by playing on the same desire: that there be no change to my "lifestyle".  Food for Fuel made no demands on drivers to obtain high mpg vehicles, and in fact, judging by the surge in SUV sales since, has had the exact opposite effect. The same is true for Fuel for Fools. It not only discourages conservation of energy resources and energy use in our everyday lives, but by promulgating the fantasy that our increased mobilization of electrons to do the most effortless of tasks will cost us nothing, actually encourages the reckless and wasteful use of energy by promising that it will be "offset" by CSS, carbon taxes, and "green" technology.   

As the hapless, ridiculous, and unscrupulous GW once tried to say, "Fool me once, shame on you; fool me twice, shame on me" ... but when you try to fool me three times, it is a bridge too far. Rather than deflect my objections by calling me names and claiming that my "thinking is muddled", or characterizing my insistence that you explain exactly how stoking the economic growth of the most energy-intensive economy in the world to a red-hot intensity in an atmosphere already bearing a load of CO2 of 420ppm as "misplaced fastidiousness", it is incumbent upon you to detail the mechanism by which you intend to cope with the resultant catastrophe of atmospheric CO2 of at least 460ppm by the end of the decade that will result should your "road forward" actually get laid.   

For those of us who saw neither the financial debacle of 2008, nor the disastrous result that would ensue by shoving a Clinton candidacy down the throats of stalwart Democrats in 2016, as unforeseeable shocks, but instead saw them as the inevitable result of Liberal hubris every bit as arrogant as GW's, you need to actually make a case for the anti-science, pi-in-the-sky claims you are asking us to believe when it comes to these disastrous steps you have outlined to mitigate climate change, none of which - not a single one - have the slightest possibility of doing anything other than add billions more tons of additional CO2 into the atmosphere at an even more accelerated rate. They are corporate boondoggles every one, providing megaBillions for the manufacture of the very entities at the heart of industrialized civilization's dilemma: the personalized automobile. But in exact parallel to Trump's cowardice in not insisting his faithful don a mask for their own and their fellow citizens' protection, neither will any Party that wishes to remain in power in the USA dare point out the all-too-obvious fact that a world run over by cars is one marred by scars, a nation  of cabs leaves a workforce of scabs, an economy of commuters means a country of polluters; try as one might, the physics is compellingly against the atomization from auto-mobilization. Not to split hairs, but splitting molecules has turned out to be more deadly than splitting atoms. The pollution it causes killing annually more people than the corona virus; millions every year, like a ‘pandemic in slow motion’, dirty air is a plague on our health, causing 7 million deaths and many more preventable illnesses worldwide each year, and it occurs whenever and howsoever electricity is produced, so as the blanket of CO2 and methane gets thicker with each passing year, the waste heat produced by splitting molecules to marshal their electrons to do our bidding, has an increasingly difficult time radiating into space through a thickening layer of CO2 keeping it earth-bound.

You have lost the benefit of the doubt, yet still wish us to blindly put our faith in you, just as the Trumpettes place their faith in him. But you have thus far proven to be as much of a charlatan as ever he was, and that is the reason, although you will never see it, never  mind admit it, that trumpery is still the underlying force driving both US political parties in this ramshackle jalopy that putting faith in an ersatz Krugmanomics has turned our Democracy into.