Monday, January 28, 2013

Krugman: The State Makes and Producers Take

Paul Krugman definitely is a class warfare sort of guy, but to him, the parasite classes are those that actually produce something, while people who simply consume are the real producers. There is no other way around his recent attacks.

Furthermore, Krugman at least has come into the open by insinuating strongly that the State owns everything, and anything that we keep is nothing more than a gift from the authorities. Now, even there, I will say that there is room for discussion, such as the question asking whether or not income taxes are more fair than sales taxes or value added taxes, but in the end, we still are at the same place: Krugman believes that the State is nothing less than an out-and-out god creator.

Krugman's latest column is more of the same. First, it has his normal partisan shilling, with an attempt to come up with an explanation as to why Republicans might disagree with The Great One. Second, he once again attacks entrepreneurs, assuming that those who actually create something in the economy are the real parasites, echoing Barack Obama's "You didn't build that" theme.

Before going further, however, let me say that the Republicans actually had a candidate who stood up for free markets, called for peace abroad, free trade, and sound money. The Republicans not only rejected him, but they also treated him about as badly as a party could do. While I registered a few years ago in Garrett County as a Republican, it was so I could vote for Ron Paul in the primaries, and sooner or later I will have to change my registration back to Independent.

My point is that the Republicans really have not done anything that warrants a coherent defense. If they ever decide to be a party that promotes liberty instead of a party promoting warfare abroad and police and prosecutorial abuse at home, then I might be interested in taking a look at them.

Nonetheless, the Republicans' slide into political oblivion is not my main concern. What does concern me, however, is that Progressives like Paul Krugman are winning in the government's all-out war against real-live entrepreneurs, people that Krugman simply attacks by calling them "rich."

We have to understand that there are three kinds of "rich" people in this country. The first group includes people who have inherited large sums of money, the "coupon clippers." For the most part, these people solidly vote Democrat. They sit on boards of foundations, arts councils and the like, and tend to be very liberal in their politics.

While they might not be happy about having to pay more taxes, they generally can afford the increases and by supporting tax hikes, they can receive free publicity for being "humanitarians" and "unselfish" citizens, people worthy of their great wealth. They became wealthy because they were born into wealth, but unlike their ancestors who had to save and invest, these noble people don't have to worry about getting their hands grubby in the marketplace.

The second group includes people like Warren Buffett, the "political entrepreneurs." These are people who tend to be politically-connected, and while they might actually have made large amounts of money through their own enterprise decisions, those decisions often are tied into decisions made by legislators or other government officials. A lot of former and current politicians such as Al Gore and John Kerry also are in this group.

Gore recently was listed at having a net worth of more than $100 million, and that was before he got the sweetheart deal to buy Apple stock at about $7 a share, about $493 below the price per share that mere mundanes have to pay. Although he was simply exercising a director's stock option, Gore became a director because of his political career, not because of any entrepreneurial talent. While he likes to tout himself as an entrepreneur, generally Gore has made money by being tied into government-protected "investments" in "green energy" firms, making speeches, and demanding that free speech be ended if it involves disagreeing with him on global warming.

For that matter, Paul Krugman tends to fall somewhat into this category, given the fact that his partisan writings have made him popular with certain groups of people. Like Gore, he has become a multimillionaire, although he has not had to take any risks in the process, unlike those real entrepreneurs Krugman loves to hate. Take away the partisan politics and Krugman is well-known in academic economic circles, but not elsewhere.

In his book, Throw Them All Out, Peter Schweizer documents how these politically-connected people make their money. One reviewer of Schweizer's book describes how Obama's "green energy" people distributed tax dollars:
Perhaps the most disturbing revelations come from Schweizer's investigation into the Obama Energy Department and its infamous "green energy" loan guarantee and grant programs, a program Schweizer calls "the greatest -- and most expensive -- example of crony capitalism in American history." The scandal surrounding Solyndra -- the now-bankrupt, Obama-connected solar power company that received a federally guaranteed loan of $573 million -- is well known. But Solyndra, Schweizer says, is only the tip of the iceberg.

According to his research, at least 10 members of President Obama's campaign finance committee and more than a dozen of his campaign bundlers were big winners in getting tax dollars from these programs. One chart in the book details how the 10 finance committee members collectively raised $457,834, and were in turn approved for grants or loans of nearly $11.4 billion -- quite a return on their investment.

In the loan-guarantee program alone, Schweizer writes, "$16.4 billion of the $20.5 billion in loans granted went to companies either run by or primarily owned by Obama financial backers -- individuals who were bundlers, members of Obama's National Finance Committee, or large donors to the Democratic Party." That is a staggering 71 percent of the loan money.

Schweizer cites example after example of companies that received grants or loans and documents their financial connections to the Obama campaign and the Democratic Party. And he shows how "the [Energy] department's loan and grant programs are run by partisans who were responsible for raising money during the Obama campaign from the same people who later came to seek government loans and grants."

These, of course, are the very kind of "rich" that Krugman praises. Their wealth heavily depends upon schmoozing politicians and is tied into governmental policies, and they tend to be politically liberal. That most of their "investment" actually weakens the economy is irrelevant. They have the correct political views and the correct political ties, so they are sacrosanct.

You won't see Al Gore or John Kerry arguing against higher tax rates, and why should they? For the most part, they either can shelter their income or pay the extra bit, knowing that they will receive huge amounts of free publicity for their "selfless" actions. Furthermore, their own investments will not be placed at risk by the new confiscatory tax policies.

Then there are the people Krugman hates, the real entrepreneurs, the people who have taken real risks and made their money in the markets without the political favors. Moreover, many are in the "millionaire next door" category, business owners who have saved (Oh, the HORROR! Predatory Savers in our midst!), invested, put off present consumption, and maybe don't have the proper educational "credentials."

Many of them tend to be conservative in their politics, many go to church (more "proof" that they are wicked parasites who don't even subscribe to correct thinking), and they are people whose investments are put at risk by government policies. In short, these are the people who have built the economy, people who have had vision and have worked hard.

Krugman considers people in this group to be utterly devoid of any decency at all. They don't think like him (some even believe in "Intelligent Design") and the way they handle their economic affairs truly gets on his nerves. Worst of all, they don't "consume" or "spend" enough of their incomes for Krugman's liking, and many of them don't even read the New York Times!

Perhaps the most telling quote is his claim that only Republicans live in intellectual bubbles:
Well, I don’t have a full answer, but I think it’s important to understand the extent to which leading Republicans live in an intellectual bubble. They get their news from Fox and other captive media, they get their policy analysis from billionaire-financed right-wing think tanks, and they’re often blissfully unaware both of contrary evidence and of how their positions sound to outsiders.

So when Mr. Romney made his infamous “47 percent” remarks, he wasn’t, in his own mind, saying anything outrageous or even controversial. He was just repeating a view that has become increasingly dominant inside the right-wing bubble, namely that a large and ever-growing proportion of Americans won’t take responsibility for their own lives and are mooching off the hard-working wealthy. Rising unemployment claims demonstrate laziness, not lack of jobs; rising disability claims represent malingering, not the real health problems of an aging work force.

This is rich coming from an Ivy League professor who is tied in with the NYT and Beltway Democrats. These are the people who believe that MSNBC is mainstream and "moderate," and anyone who does not hold their secular, urbanite views of the world really has no right even to exist.

I went to high school with a couple of people in the Sulzberger family (publisher of the NYT), and talk about people with limited viewpoints. They literally could not see anything outside of their circles and expressed utter contempt for anyone who did not share their views.

In a politicized world, people do tend to live in bubbles and their ability to think becomes limited. I remember a conversation with a Democratic Party activist in which I asked him (during the mid-1980s) why the economy of the U.S.S.R. was so backward compared to ours. He replied, "It is because the U.S.S.R. has not been a country as long as the United States." Yes, he really believed that.

Thus, I doubt seriously that Paul Krugman ever has ventured outside of his own cloistered surroundings to speak to real-live business owners who must make hard decisions when governments impose new minimum wages or jack up taxes. To Krugman, they are nothing more than parasitic whiners and he is not interested in even trying to understand another point of view. To him, these people are ignorant rubes and the sooner they are replaced with people on government payrolls or people receiving transfer payments, the better. After all, these people will spend their incomes which makes them the true economic benefactors.


Tom E. Snyder said...

In the movie Runaway Bride newspaper columnist Ike Graham is only an hour away from his deadline with no column. He is walking the streets of New York looking for an idea. He sees a woman getting out of a limo and asks her, "What do you think of people who don't ride in limos?" She responds, "I don't know anyone like that."

That about says it all.

William L. Anderson said...

For that matter, we have the famous alleged quote from New Yorker film critic Pauline Kael after Nixon beat McGovern in a landslide:

Here is a larger version of that story:

Kael has often been quoted as having said, in the wake of Richard Nixon's landslide victory in the 1972 presidential election that she "couldn't believe Nixon had won", since no one she knew had voted for him.[45] The quote is sometimes cited by conservatives (such as Bernard Goldberg, in his book Bias), as an example of cluelessness and insularity among the liberal elite. There are variations as to the exact wording, the speaker (it has variously been attributed to other liberal female writers, including Katharine Graham, Susan Sontag, and Joan Didion), and the timing (in addition to Nixon's victory, it has been claimed to have been uttered after Ronald Reagan's re-election in 1984.)

The story most likely originated in a December 28, 1972 New York Times article on a lecture Kael gave at the Modern Language Association, in which the newspaper quoted her as saying, "I live in a rather special world. I only know one person who voted for Nixon. Where they are I don't know. They're outside my ken. But sometimes when I'm in a theater I can feel them."

William L. Anderson said...

Because our society now is so hopelessly politicized, we will see even more of this kind of stuff. Much of the separation is not class or race but political.

Bruce said...

I have become convinced this is a new era in political separation, or call it what you will. The fact that so much of communication today is electronic and faceless is not good. Not much good is coming of it. Not much thought is going into it.

GOP State Income Tax Proposal Is “Reverse Robin Hoodism”: Paul Krugman | Daily Ticker - Yahoo! Finance

"According to Krugman, middle and lower income people, not the rich, are already paying the highest marginal tax rates in the country. Furthermore, the higher sales tax would not beget benefits such as stronger safety nets or universal health care, programs that would be used by the majority of those states' residents.

In Kansas for example, popular social programs have already been slashed. Kansas Governor Sam Brownback has allowed private insurers to take over the state’s Medicaid system; he cut back the state’s welfare rolls and wants to reform state employees’ pensions in addition to merging government agencies. Brownback's office is reportedly eying more areas for consolidation.

Krugman says the Republican plan to hike state sales tax could be modeled after the European nation Scandinavia, a country with very high sales tax rates and a “less progressive tax system” than the U.S. The revenue generated by the high taxes are used to provide Scandinavian citizens with a “very good social safety net” and more financial security, according to Krugman."

..a supposedly serious journalist writes in an interview with Krugman about a nation of Scandinavia. Krugman mentions Scandinavia, but the journalist is so ill-prepared that the mention becomes an actual nation. And Krugman is not called on the lack of truth in the marginal tax rate comment I also included..not important, I suppose.

Dennis said...

Many popular musicians and Hollywood actors/actresses would fall into the same category of the politically connected entrepreneur. I read a recent article in Rolling Stone in which Bruce Springsteen groused about income inequality in the United States. I have a suggestion for him and his ilk: practice what your preach. Give away all of your money until you are left with something approaching a lower middle class salary, and then live accordingly. There's a lot to be gained with leading by example, but these limousine Liberals expect others to do as they say, not as they do.

ekeyra said...


Springsteen actually does practice what he preaches. He artificially lowers the prices of his shows way below the actual demand to see him, though, this only has the effect of enriching scalpers who haul in tons of preordered tickets with online bots and then resell them aftermarket at incredible markups. in the ballpark of paying 90 dollars for the original ticket and flipping it for around 600 dollars in a matter of minutes. So in the end he actually does give up some profit to stand by his convictions, however the end result of his posturing is that his fans still end up paying exorbitant prices to see him, only the profits flow elsewhere because ignorance can never overturn economic law.

Also, krugman talking about intellectual bubbles?! hahahahahahahahaha. that made my day.

Mike said...

Reading the comments section of Krugman’s columns provides insight into the political mind of the masses. They can only see a two dimensional linear political spectrum. Republicans and Democrats. My side good, your side bad, no matter the issue. It’s a modern political equivalent of the Crips and Bloods gang mentality. No intellectual honesty on either side. No original thought. They react like Pavlov’s dogs to the treats each side throws out to them keeping them distracted from the main issue.

Until there is an evolution of thought, the divide will become greater and eventually unsustainable. The question is whether the evolution of thought is voluntary and constructive or involuntary due to the laws of economics and unconstructive. The current state of affairs would indicate the latter.

Larry said...

Bernanke on Oprah, "I've been Doping for Years."

Pulverized Concepts said...

"He was just repeating a view that has become increasingly dominant inside the right-wing bubble, namely that a large and ever-growing proportion of Americans won’t take responsibility for their own lives and are mooching off the hard-working wealthy. Rising unemployment claims demonstrate laziness, not lack of jobs; rising disability claims represent malingering, not the real health problems of an aging work force."

Yeah, that's right.

Anonymous said...

Paul Krugman does Morning Joe


Dan said...

While I don't agree with Krugman's comment about Republicans, at large, being "closed off" in their media viewing and intellectual info, I find your comment about Krugman to be beyond ad hominem and just farcical.

Even if it were accurate that Krugman and his ilk think MSNBC is "moderate or mainstream" (which I doubt he does), the addition that they believe "anyone who does not hold their ... views ... has no right even to exist" is just ridiculous. Krugman may not be the most polite guy in his writing, but I never see him reject other economists on such grounds. He attempts to debate them - he disagrees and says why.

Jumping back to Republicans momentarily - I would say that Krugman is pointing this out: to many Republicans today, anything that is not Fox News is "liberal trash," not just MSNBC but CNN, BBC, etc. And while there are certainly many liberals who enjoy MSNBC, I don't find many trashing every other media source that disagrees. Perhaps, you could argue, that's because many of the others are simply too closely aligned with MSNBC for there to be controversy. But I wouldn't see it that way. I hate MSNBC (and Fox), but thoroughly enjoy CNN most times. So, I think there is some argument to be made about the difference in acceptance of "intellectual bubbles." While liberals seem to reject Fox, conservatives seem to reject anything BUT Fox.

William L. Anderson said...

Dan, you have not read Krugman's columns and blog posts about people who might disagree with Darwinism or, say the Obama administration's line on global warming. His attacks are well beyond simple disagreement: he wants anyone with a different opinion to be utterly removed from society. Read the comments and their tone.

Krugman no longer has a reputation as a guy who simply likes to debate. First, he doesn't debate, and when he does, as he did Ron Paul, his comments are laced with ad hominem. His post-debate comment, attributing "Ga, ga, goo, goo, inflation theft" to Ron Paul certainly was not something that I would consider to be within any bounds of decency.

Krugman openly shows no respect to anyone who disagrees, and when he teams with Brad DeLong, then it gets even worse. Krugman has become a very nasty person, and I see no reason why I should bow down and scrape to him and DeLong. If you disagree, that is your prerogative.

As for TV, we don't have TV in the house and I don't watch Fox or any of the other networks. Why bother? The networks are openly in the tank for one political party or the other. Believe me, the times when I watch Fox, it grates on me. I really don't like that network, but when I see MSNBC, it is the same thing.

The real issue to me is the worship of State power. Fox loves the armed forces, while the others love everything else -- including the armed forces. When have you seen any negative commentary on police-state tactics on any network? For that matter, when have you seen Krugman ever disagree with police-state tactics by government agencies? I think the guy is perfectly fine with the level of brutality we are seeing from state agents. And I think it is going to get a lot worse.

Anonymous said...

"The real issue to me is the worship of State power. Fox loves the armed forces, while the others love everything else -- including the armed forces. When have you seen any negative commentary on police-state tactics on any network? For that matter, when have you seen Krugman ever disagree with police-state tactics by government agencies? I think the guy is perfectly fine with the level of brutality we are seeing from state agents. And I think it is going to get a lot worse."

What's galling to me is the conspicuous silence from Krugman and much of the rest of the Left regarding Obama's interventionist foreign policy now that a Democrat occupies the White House. Just the other day, outgoing SoS Hillary Clinton stated openly how it was a necessity for us to meddle in the affairs of foreign nations. And nary a peep of concern from the Left in response to it. I suppose meddling, intervening, occupying, imperializing, etc. are all okay so long as you've got an articulate Commander-in-Chief with a gift-wrapped Nobel Peace Prize who can spin anything to make it sound like he's spreading goodwill and defending liberty abroad, but pissing away the lives of our precious men and women in the military and killing innocents abroad is absolutely NOT okay when it's an inarticulate knucklehead gunslinger-wannabe from Texax whose approach to foreign policy amounts to chanting "USA USA USA!!!"

Anonymous said...

Now that Netflix has released a remake of House of Cards (thus the original will be seen more widely) we can just refer to Krugman as 'Daddy'.

Larry said...
This comment has been removed by the author.
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