Obama Taps Krugman For Economic Policy Post

[prole]

Nah, better to STAY THE COURSE!!

 

The Fatal Distraction

By PAUL KRUGMAN

 

Friday brought two numbers that should have everyone in Washington saying, “My God, what have we done?”

 

One of these numbers was zero — the number of jobs created in August. The other was two — the interest rate on 10-year U.S. bonds, almost as low as this rate has ever gone. Taken together, these numbers almost scream that the inside-the-Beltway crowd has been worrying about the wrong things, and inflicting grievous harm as a result.

 

Ever since the acute phase of the financial crisis ended, policy discussion in Washington has been dominated not by unemployment, but by the alleged dangers posed by budget deficits. Pundits and media organizations insisted that the biggest risk facing America was the threat that investors would pull the plug on U.S. debt. For example, in May 2009 The Wall Street Journal declared that the “bond vigilantes” were “returning with a vengeance,” telling readers that the Obama administration’s “epic spending spree” would send interest rates soaring.

 

The interest rate when that editorial was published was 3.7 percent. As of Friday, as I’ve already mentioned, it was only 2 percent.

 

I don’t mean to dismiss concerns about the long-run U.S. budget picture. If you look at fiscal prospects over, say, the next 20 years, they are indeed deeply worrying, largely because of rising health-care costs. But the experience of the past two years has overwhelmingly confirmed what some of us tried to argue from the beginning: The deficits we’re running right now — deficits we should be running, because deficit spending helps support a depressed economy — are no threat at all.

 

And by obsessing over a nonexistent threat, Washington has been making the real problem — mass unemployment, which is eating away at the foundations of our nation — much worse.

 

Although you’d never know it listening to the ranters, the past year has actually been a pretty good test of the theory that slashing government spending actually creates jobs. The deficit obsession has blocked a much-needed second round of federal stimulus, and with stimulus spending, such as it was, fading out, we’re experiencing de facto fiscal austerity. State and local governments, in particular, faced with the loss of federal aid, have been sharply cutting many programs and have been laying off a lot of workers, mostly schoolteachers.

 

And somehow the private sector hasn’t responded to these layoffs by rejoicing at the sight of a shrinking government and embarking on a hiring spree.

 

O.K., I know what the usual suspects will say — namely, that fears of regulation and higher taxes are holding businesses back. But this is just a right-wing fantasy. Multiple surveys have shown that lack of demand — a lack that is being exacerbated by government cutbacks — is the overwhelming problem businesses face, with regulation and taxes barely even in the picture.

 

For example, when McClatchy Newspapers recently canvassed a random selection of small-business owners to find out what was hurting them, not a single one complained about regulation of his or her industry, and few complained much about taxes. And did I mention that profits after taxes, as a share of national income, are at record levels?

 

So short-run deficits aren’t a problem; lack of demand is, and spending cuts are making things much worse. Maybe it’s time to change course?

 

Which brings me to President Obama’s planned speech on the economy.

 

I find it useful to think in terms of three questions: What should we be doing to create jobs? What will Republicans in Congress agree to? And given that political reality, what should the president propose?

 

The answer to the first question is that we should have a lot of job-creating spending on the part of the federal government, largely in the form of much-needed spending to repair and upgrade the nation’s infrastructure. Oh, and we need more aid to state and local governments, so that they can stop laying off schoolteachers.

 

But what will Republicans agree to? That’s easy: nothing. They will oppose anything Mr. Obama proposes, even if it would clearly help the economy — or maybe I should say, especially if it would help the economy, since high unemployment helps them politically.

 

This reality makes the third question — what the president should propose — hard to answer, since nothing he proposes will actually happen anytime soon. So I’m personally prepared to cut Mr. Obama a lot of slack on the specifics of his proposal, as long as it’s big and bold. For what he mostly needs to do now is to change the conversation — to get Washington talking again about jobs and how the government can help create them.

 

For the sake of the nation, and especially for millions of unemployed Americans who see little prospect of finding another job, I hope he pulls it off.

[recess]

Be a good merican, Consume, consume, consume says paul krugman

[billcoe]

[prole]

Be a good merican, Consume, consume, consume says paul krugman

 

One way or another...

 

More restaurants are targeting customers who use food stamps

By Jonathan Ellis and Megan Luther, USA TODAY

 

The number of businesses approved to accept food stamps grew by a third from 2005 to 2010, U.S. Department of Agriculture records show, as vendors from convenience and dollar discount stores to gas stations and pharmacies increasingly joined the growing entitlement program.

 

Now, restaurants, which typically have not participated in the program, are lobbying for a piece of the action.

 

Louisville-based Yum! Brands, whose restaurants include Taco Bell, KFC, Long John Silver's and Pizza Hut, is trying to get restaurants more involved, federal lobbying records show.

 

That's a prospect that anti-hunger advocates welcome, but one that worries some current food stamp vendors and public health advocates.

 

Federal rules generally prohibit food stamp benefits, which are distributed under the USDA's Supplemental Nutrition Assistance Program (SNAP), from being exchanged for prepared foods. Yet a provision dating to the 1970s allows states to allow restaurants to serve disabled, elderly and homeless people, USDA spokeswoman Jean Daniel said.

 

Between 2005 and 2010, the number of businesses certified in the SNAP program went from about 156,000 to nearly 209,000, according to USDA data.

 

There is big money at stake. USDA records show food stamp benefits swelled from $28.5 billion to $64.7billion in that period.

 

Four states accept restaurants, with Florida the most recent to begin a program.

 

"It makes perfect sense to expand a program that's working well in California, Arizona and Michigan, enabling the homeless, elderly and disabled to purchase prepared meals with SNAP benefits in a restaurant environment," Yum! spokesman Jonathan Blum said.

 

The National Restaurant Association supports Yum!, said spokeswoman Katie Laning Niebaum, but the National Association of Convenience Stores does not.

 

"If the pie's only so big, nobody's going to want to see the pie sliced thinner," said Convenience Stores spokesman Jeff Lenard. "I'm not sure that's in the best interest of public health."

 

Kelly Brownell, director of Yale's Rudd Center for Food Policy and Obesity, says encouraging more fast-food consumption is not good for people's health. "It's preposterous that a company like Yum! Brands would even be considered for inclusion in a program meant for supplemental nutrition."

 

"They think going hungry is better?" counters Edward Cooney of the Congressional Hunger Center. "I'm solidly behind what Yum! is doing."

[Phil K]

Where the hell in the Constitution does it say anything about food stamps?

[Off_White]

You're just teasing me, aren't you prole? Obama didn't really name Krugman Sec of the Treasury? Krugman's columns have been bang on all year, I'm in danger of becoming a fan boi.

[ZimZam]

Had me going too. His confirmation would probably be held up in committee, cause as you can deduce he's a SOCIALIST.