CEPR - Center for Economic and Policy Research

Multimedia

En Español

Em Português

Other Languages

Home Publications Blogs Beat the Press Robert Samuelson Wants Ordinary People to Pay for the Mess-ups of the Bankers

Robert Samuelson Wants Ordinary People to Pay for the Mess-ups of the Bankers

Print
Monday, 29 November 2010 05:47

This is the general policy being pushed by the Washington Post, various Peter Peterson funded deficit commissions, and of course Erskine Bowles and former Senator Alan Simpson, the co-chairs of President Obama's deficit commission. What is great about Robert Samuelson is that he is comes right and tells readers that he wants ordinary people to suffer for the greed and incompetence of the bankers and the people who design economic policy.

Samuelson says that bailouts in Ireland, Greece, Spain and elsewhere are about:

"persuading ordinary citizens to tolerate austerity (higher unemployment, lower social benefits, heavier taxes) without resorting to paralyzing street protests or ineffectual parliamentary coalitions."

Of course there is no economic reason whatsoever that ordinary people should be accepting lower pay, higher taxes, and reduced Social Security and pensions. The economies of Europe and the United States are no less productive than they were before the collapse of the housing bubble that the economic policymakers (almost none of whom have been fired) failed to see. In fact, in the United States productivity has risen substantially in the last 3 years.

The reduced output and unemployment stems from lack of demand. This in turn stems from the failure of the same group of economic policymakers to find ways to increase demand sufficiently to make up for the demand lost by the collapse of the bubble. Rather than trying to generate demand, policymakers are doing exactly what Mr. Samuelson said they are doing. They are trying to force ordinary people to endure high unemployment and accept cuts in pay, benefits, and public welfare programs.

And, as Mr. Samuelson says, he hopes that austerity can be accomplished "without [the public] resorting to paralyzing street protests or ineffectual parliamentary coalitions."

 

 

Comments (7)Add Comment
...
written by Ron Alley, November 29, 2010 6:23
Well, at long last Samuelson has jumped on the Obama administration bandwagon.
...
written by Sam, November 29, 2010 7:24
Isn't the Tea Party and the results of the mid year elections an example of "ineffectual parliamentary coalitions"?
hes only off by a few words
written by frankenduf, November 29, 2010 8:09
i wish we could persuade ordinary coporations to tolerate austerity (higher wages, lower subsidies, heavier taxes) without resorting to paralyzing manufacturing or effectual parliamentary bribery
Productivity Was Killed By Stupid Liberal Policies
written by izzatzo, November 29, 2010 8:33
The economies of Europe and the United States are no less productive than they were before the collapse of the housing bubble that the economic policymakers (almost none of whom have been fired) failed to see. In fact, in the United States productivity has risen substantially in the last 3 years.


Another lie by stupid liberals. Productivity has actually declined due to regulation and uncertainty. Unlike Baker, real economists know that the correct measure of productivity is inputs per unit of output, such as the ratio of employed labor to corporate profit.

Since corporations are persons, they are included on both sides of the calculation, known in economics as Joint Factor Productivity From the Supply Side.

Despite the valiant efforts of the most productive members of the labor force - those who earn the most because they produce the most - their added value has been dragged down so far by stupid liberal policies, it has caused total productivity to go negative at the margin and choke off the downward trickle entirely.

Until stupid liberals understand that productivity has nothing to do with aggregate demand, much less how to calculate it, the recession will get worse. Lead, follow or get out of the way, but don't stand in way of the best and brightest willing to take the necessary risks to produce more productive units of inputs for a given unit of output. Read Econ 101.
...
written by jamzo, November 29, 2010 10:27
"without resorting to paralyzing street protests or ineffectual parliamentary coalitions."

he also wants to take away the right to protest or fight against "(higher unemployment, lower social benefits, heavier taxes)"

what a creep!

what is it about "paralyzing street protests or ineffectual parliamentary coalitions." that makes them so threatening to him

...
written by Lumpy Rutherfurd, November 29, 2010 1:58
I love that the new "moderate" Republican US Senator from Illinois, Mark Kirk, has already declared that rather than extending unemployment benefits, which would turn the US into "Ireland" and "Greece" (a non-sequitur, I know, but hey, he's a Republican), we should cut taxes, because nothing succeeds like failure, right?

The GOP's answer to everything, cut taxes for the rich, create wars, demonize minorities (racial, ethnic, religious, sexual, etc.), and then cut more taxes--for the rich! It's a vision, but neither Adam Smith nor Milton Friedman would be willing to claim it.
izzatzo - productivity is up
written by dollared, November 29, 2010 7:27
Your ignorance is showing. US Productivity is up 2.5% in 2009. So everything you wrote is wrong. Please apologize to us. http://rockproducts.com/news/us_productivity_0110/

Write comment

(Only one link allowed per comment)

This content has been locked. You can no longer post any comments.

busy
 

CEPR.net
Support this blog, donate
Combined Federal Campaign #79613

About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

Archives