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Forget guns, the rightwing is coming for your paycheck

June 11, 2013 - Harry Eagar
RtO has had a little fun with Kenneth Rogoff, the spreadsheet-challenged rightwing Harvard economist, but that doesn't mean he is not worth reading. Not worth trusting, yes.

From the New Straits Times, a think piece about deflation actually comes to the same mantra that RtO has preached since its start in 2008 -- deflation is the baddest of the bad, because nobody knows how to counteract it, while inflation can be dealt with by using methods that are by now fairly well developed.

However, RtO is not interested in having Rogoff making like-minded statements. Just the opposite, if anything.

No, the reason his screed is worth a few moments of your time is the (unintentional I'm sure) revelation of what rightwing Teaconomists are really all about: This:

" Back then, against a backdrop of government reluctance to force debt write-downs, along with massively over-valued real housing prices and excessive real wages in some sectors, moderate inflation would have been extremely helpful."

Wages are too high. Got it.

Later he returns to the scene of the crime:

"There is still a need for huge relative wage adjustments between Europe's periphery and its core."

He means the poor are not yet poor enough. Still later, he waves the magic wand in the invisible hand:

"But higher inflation would help to accelerate desperately needed adjustment in Europe’s commercial banks, where many loans remain on the books at far above market value. It would also provide a backdrop against which wages in Germany could rise without necessarily having to fall in the periphery."

Apparently, we are to worry more about paying well-paid, socialist Germans more than about paying Romanians enough to eat.

If you excised the quoted lines from Rogoff, a reader could be led to think that the piece had been written by Professor Krugman.

There is yet one more line from Rogoff that RtO rolls over on the tongue and savors:

"Weighed against the political, social and economic risks of continued slow growth after a once-in-a-century financial crisis, a sustained burst of moderate inflation is not something to worry about."

Well, it wasn't "once-in-a-century." It was twice in a century. The big gap between 1929 and 2008 was occupied by the New Deal.


Article Comments



Jun-14-13 5:07 PM

One, you say you don't debate online. Please explain how you ad to the discussion, other than demeaning people you don't agree with.


Jun-13-13 11:52 PM

johngault, I am getting tired of your fact-free statements.

In fact, if you look at the graphs you'll see a steady rise after the New Deal took hold.

So far, you have not done anything to show us that you have any detailed knowledge about economic history. I've suggested you let us know. Please do.


Jun-13-13 7:49 PM

Hey doppess dude, keeping on tsking because you still do not have capacity for original thought or problem solving-maybe it is because your thoughts are the problem.


Jun-13-13 4:21 PM

Hey dude, why are you so fixated on the New Deal.The country did not make ANY meaningful gain until we were unfortunately thrown into a war. By the way its was FDR's at bat that he struck out not your evil right. You just can't help yourself, can you? Keep on clucking the world laughs at a doppess.


Jun-13-13 3:49 PM

I have given an answer, right from the beginning of RtO on 2008 -- return to the proven methods of the New Deal, reject Reaganism.


Jun-13-13 3:32 PM

Hey dude and dude: There's an old word that came out of the garment trade-DOPPESS. At the plant there is an old ironer who is always dropping the hot iron off the ironing board on the foot of a lazy bystander. At this goof there is always the DOPPESS who then clucks with a tsk,tsk,tsk. and who is not capable of any productive or fruitful work. Show some originality, show some answers to the problems that you cry about, give real discussion and not political sparring. Merely shouting TeaParty, Conservative, and so one does not win an argument much less build any foundation for solving the economic sins that could only have be created by evil people on the right. Cluck on dude and dude.


Jun-12-13 7:26 PM

C'mon, john, explain to us why there was a financial crash every 7 years or less up to 1929, then none till 2008. What was going on during those 60-odd years>

For fans of unregulated markets, add 7 to 2008 and see what you get -- crash by 2015?


Jun-12-13 7:12 PM

One, try debating and instead of tearing down the other side of the debate, it is getting old. You could also stand on the sidelines and maybe learn.


Jun-12-13 2:50 PM

Hey dude & OneAika put your bongs down for a minute and hold back on your brownies. You two are too angry and it over shadows common sense. As to One you do not have an original thought much any command of facts. Go ahead, fact check me and prove what is incorrect. As to "assumptions" you only prove that you are void of any originality that is not standard party line. As to Harry, you are a wonderful writer and I mean it. However as a writer I do not think that your facts would stand if they were checked. Yet you like One only represent the opinions of the left and likely would never admit that there is be a middle ground that could be reached. Any failure to say that there is some common thread among all of this would only confirm how really small anyone is in our polarized world. There has to be change but where are the adults to control the this craziness.

That said party on gentlemen.


Jun-12-13 2:01 AM

That was Rogoff citing writedowns, not me.

The real estate writedowns took a while to work out -- about 2 years in the case of Makena resort, as I recall.

I do not think marking to market was the right thing to do in 2008-9, since almost all the banks were insolvent. Still are, many of them. Admitting it in early 2009 would have been disastrous.


Jun-11-13 9:25 PM

It was your comment of write downs dude! You still do not get it because of your political leanings have you blinded most of the time. Nothing wrong because the diversity of opinions are what allows the country somehow to work, and better yet it is all the opinions on a stock that when it hits the market floor price discovery takes only nano seconds to clear as a trade. This is a problem for the re assets you say we're not written down because price discovery is very hard to accomplish unless one is willing to take an offer from possibly only one bidder - would you value or sell your property in such a vacuum? Thus how do Banks know how much of a write down to mark? Finally, remember that there are opinions and theories that are from far left to far right and those to the moon, but no matter how well your rhetoric is crafted does not make it consistently correct.


Jun-11-13 8:08 PM

johngault, I wish you would tell us what happened.

Anyhoe, marking to market has nothing whatever to do with Rogoff's statemwent.

And my point is that Reaganism was designed to beggar the middle class for the benefit of the 1%. It did, too.


Jun-11-13 6:40 PM

Hey dude, why was there so much reluctance to force write downs of real estate values. Maybe it was easier said than done. How are marks to the market of assets that do not trade like liquid assets done in real time with uniformity across the financial system. One can not quote a value on a property like quoting the price on a stock.Again you continue to harp on issues that you pin on the right, but in fact show that you still do not understand the enormity and variety of factors that brought our financial markets to the edge of the abyss. Trade away dude.


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