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Paul Krugman: Yeah, We're In A Depression

Friendly fire:

Krugman utterly despises conservatives, remember, so there's no way he's intentionally advancing this damning indictment to damage the president he'll support in the fall.  Perhaps he just assumed that because he was among friends at Netroots Nation (you know, the conference that cheered abortion), he had extra latitude to temporarily abandon his partisan hackery.  I'm not even sure if I'd characterize the current Obama malaise as a "depression," but the New York Times columnist seems to think the shoe fits.  Be sure to catch his full quip about the state of today's US economy:


"It's not as bad as the Great Depression.  There's a winning slogan...but it's incredibly awful." 

Krugman's subsequent cheap jab at Romney betrays his not-so-secret electoral preference, but the balance of the clip is a devastating assessment of President Obama's record to date.  Set aside the reality that Krugman's prescription to cure us of our economic ills involves much, much more government spending.  He's entitled to that opinion, but that dog won't hunt with most voters, especially with the debt clock spinning towards oblivion. Krugman's bottom line -- that Obama is presiding over an "incredibly awful" depression --  is what destroys the president's re-election rationale, calling to memory the standard by which Obama himself asked voters to judge him:

Team Obama is still reeling after its principal casually noted that the private sector is "doing fine" in a press conference last Friday.  David Axelrod won't answer direct questions about it, and Jay Carney is scolding reporters for puncturing the central premise of Obama's post-gaffe spin.  The Washington Post's Marc Thiessen writes that both Obama and Harry Reid have recently asserted that erosion of the government sector, not the "fine" private sector, is what is driving our persistent downturn.  One small problem:


Jared Bernstein, a former Obama economic adviser, said the president’s gaffe won’t do lasting damage “because that’s not the way he sees it.” But as Reid’s comment demonstrates, that is precisely how Obama and Democratic leaders on Capitol Hill see it. They’ve been saying for months that the private sector is doing fine and that the solution to our unemployment problems is to spend even more taxpayer money to hire more government workers. Obama and Reid have it precisely backward: It’s the public sector that’s doing fine. According to the Bureau of Labor Statistics, the unemployment rate for government workers last month was just 4.2 percent (up slightly from 3.9 percent a year ago). Compare that to private-sector industries such as construction (14.2 percent unemployment), leisure and hospitality services (9.7 percent), agriculture (9.5 percent), professional and business services (8.5 percent) and wholesale and retail trade (8.1 percent). As Andrew Biggs of the American Enterprise Institute points out, the public-sector unemployment rate “is the lowest of any industry or class of worker, even including the growing energy industry.” If the rest of Americans enjoyed the same unemployment rate as government workers, Obama would be cruising to reelection.

With that data point in mind, here's Carney snarking at Fox News' Ed Henry for asking inconvenient questions:


Step one: Accuse reporter of cherry-picking...official BLS stats that directly contradict your story.  Step two: Blame high private sector unemployment on Republicans.  This second point is particularly rich, considering that Democrats already had their bite at the "shovel ready jobs" apple, and failed spectacularly.  The president was even reduced to chuckling at his multibillion dollar miscalculation. Oops!  Democrats didn't need any Republican support to pass the stimulus.  They could have fashioned whatever bloated monstrosity they wanted, and they did.  When voters elected Republicans in a landslide in 2010 to rein in the spending carnival, the GOP slammed the breaks on Obama's unpaid-for son-of-stimulus known as the "American Jobs Act."  The White House would have us believe that this "obstructionism" is what has prevented a guns-blazing recovery.  Does Carney not recall that this legislative panacea was also repeatedly blocked and stalled by Senate Democrats?  And is he unaware that the GOP has passed a decent chunk of The One's jobs agenda?  Of course not, but he's got nothing else to say. It's that simple.  I'll leave you with this bulletin from our "fine" economy:

The net worth of the American family has fallen to its lowest level in two decades, according to government data released Monday, driven by a more than 40 percent drop in their stakes in their homes. The Federal Reserve’s detailed survey of consumer finances showed families’ median wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline. That put them on par with median wealth in 1992.


Obama promised that his $825 Billion boondoggle would increase household incomes by $3,000 on average.  Median income has since dropped to 15-year lows, and American families' net wealth has plunged even further.  But blame Bush.  Yes, the downward trend started under Bush (the cause of the 2008 meltdown is a subject for another day), but Obama promised to fix things.  He has not.

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