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  • Pity the Poor Keynesians

    The Obama administration and their Keynesian media allies are desperately pushing back against a growing consensus that President Barack Obama’s expansive and intrusive domestic agenda is to blame for high unemployment and the economy’s slow recovery. So in Paul Krugman’s Pity the Poor C.E.O.’s column today he asserts:

    So where’s the evidence that an antibusiness climate is depressing spending? The answer, supposedly, is that this is what you hear when you talk to entrepreneurs. But don’t believe it. Yes, when you talk to business people they complain about taxes, regulations and the deficit; they always do. But the Obama’s-socialist-policies-are-wrecking-the-economy chorus isn’t coming from businesses; it’s coming from business lobbyists, which isn’t at all the same thing.

    Krugman needs to start talking to more businesses. His own paper reported from a White House sponsored event last December:

    Mr. Obama told the chief executives that he wanted to know: “What’s holding back business investment and how we can increase confidence and spur hiring? And if there are things that we’re doing here in Washington that are inhibiting you, then we want to know about it.”

    He got a blunt answer from Fred P. Lampropoulos, founder and chief of Merit Medical Systems Inc., a medical device manufacturer in the Salt Lake City area. Mr. Lampropoulos said some in his discussion group agreed that businesses were uncertain about investment because “there’s such an aggressive legislative agenda that businesspeople don’t really know what they ought to do.” That uncertainty, he added, “is really what’s holding back the jobs.”

    Lampropoulos is not alone:

    • Dan DiMicco, CEO of steelmaker Nucor Corp, told the Wall Street Journal: “Companies large and small are saying, ‘I am not going to do anything until these things — health care, climate legislation — go away or are resolved.’”
    • Porta-King CEO Steve Schulte told USA Today his company is not investing because “proposals in Congress to tackle climate change and overhaul health care would raise costs.”
    • Stock analyst Peter Sidoti told  The New York Post: “‘There hasn’t been one bankruptcy,’ he tells me. How did they survive the recession? By cutting costs and hoarding cash, not expanding their business and hiring more people, even as the economy now is starting to recover. During other recoveries, Sidoti says, firms like these would be hiring workers in droves as demand picks up for goods and services. This time around, they’re not — because ‘they don’t know what their costs are going to be.’”
    Posted in Economics [slideshow_deploy]

    14 Responses to Pity the Poor Keynesians

    1. Harry Schell says:

      I understand exactly what Mr. Obama's attitude toward the private sector is by what he has done himself and with Reid and Pelosi. I don't care at all what their remora tell us, Krugman particularly. Words don't matter, what you are is what you do.

      Even worse than his actions, Obama et. al. don't think they need a vigorous private sector to pay for ever-exapnding government employment and largesse to favored voting blocs. In this they are signing onto a suicide pact. Even much of Europe has figured this out.

      More posturing will not change anything, and Obama's growing inability to talk his way out of embarassments is just a symptom of his failure to say what he means and mean what he says.

    2. Bart, California says:

      Keynesian policies were disproved many years ago, when FDR's New Deal extended the Great Depression by about seven years (see UCLA economic study).

      That doesn't stop liberals from coming right back around and insisting the only reason the policies failed was that we didn't spend enough money.

      Kind of like the reason liberals provide for the consistent failure of socialism and even flat-out Communism. It's not that Communism was proven a failed ideology in the Soviet Union, you see, it's that Stalin didn't do it right.

      Same old, same old.

    3. markross says:

      I totally agree, The Keynesians' are, at last, starting to see, these policies are ill-conceived; and from an economics standpoint, will not create the kind of economy that most of us in America have been use to since our founding. Many of us could have told them this would be the result, before they did all this "agenda-based" spending!

      The most frustrating part is, many of us, who would never have advocated these interventionist policies, also have to suffer as a result of their failing experiments! I think The American people are tired of being treated like lab experiments for Progressive agendas!

      We either need to get back to a much more Constitutionally-respecting government, or we need to have a complete and total separation from these far-left Progressives, once and for all!

      At this point, I wouldn't be opposed to a Constitutional Amendment that allows states to create their own currencies, going forward. The people are getting tired of being slaves to this Washington D.C./Federal Reserve monopoly!

    4. Billie says:

      whenever there is positive news or we are told it is positive, like "the economy is recovering" is another cover-up. If it really is, this administration is NOT CREDITED FOR IT!

      Because businesses continue to run is either by stimulus or the intelligence of the business owners. this man has all private sector hands TIED! and if a business is getting stimulus it shouldn't be considered a private business. lets hear obama say "the private sector is recovering."

      Thank you CEO'S, for standing on truth and telling it like it is!

    5. Bill Huber says:

      I work for a small business and our number one issue is that our sales are down from last year. The one strategy that has worked for us has been to reduce costs and become more efficient. Neither the latest stimulus or the previous stimulus during the Bush administration have shown a resemblance of increasing aggregate demand in other areas of the economy like our sales. The Keynesian trick of government spending during a recession depends on the psychology of the consumer. If the consumer goes along with the trick then each dollar spent by the government should have a multiplier effect on consumer spending. Unfortunately the consumer did not take the bait in 2008, 2009, or 2010. In this recession the Keynesian multiplier looks like it is less one. The trick did not work and there is not a lot of hope that it ever will with this group of consumers. Since the government plans are not working and they don't have a clue on how to fix the problem, businesses are left to deal with their problems in what ever way they can. Since businesses are facing a lot of operational, financial, and regulatory risks, I expect they will continue to focus on cost control and wait for the economic and government mess to eventually clear up before making any major commitments. What you saw in the first six months is what you will probably see in the next six months or even much longer. There will be no jobs recovery in 2010 and the year to year comparisons in 2011 will show a stalled recovery.

    6. mastura,singapore says:

      i hope with the form of a new administration and government,America will be saved from this tyranny.Obama needs to listen to his citizen first.good luck to America and i hope the country will prosper again.

    7. Pingback: Must Know Headlines 7.12.2010 — ExposeTheMedia.com

    8. Rich Stewart, Carlis says:

      The Obama administration has every intention of allowing the Bush tax cuts to expire which is in effect a tax increase and business people know that. This administration is cranking out more regulations than any other in recent history and business people know that. This administration has put the deficit on steroids and business people know that. One has to wonder how Krugman can continue to write such drivel… of course they are complaining about Obama and his economy destroying policies when they complain about those things.

      Krugman has become so enamored with himself and seeing his own name in print in the New York Times that he will continue to say what he thinks the New York Times wants to hear regardless of how absurd it might be. I was going to say I wonder how Krugman ever won a Nobel Prize but then I remembered Obama just won one (not that long after Al Gore won one).

    9. Billie says:

      Thank you, mastura, for your kind words. It is humbling when an outsider sees whats inside. God Bless you!

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    11. ERWIN IN OCALA FL says:

      Health care bill need to be repealed ASAP. They never read it and Nancy said they needed to pass it so they could see whats in it. Send her packing ASAP.

    12. ERWIN IN OCALA FL says:




    13. ERWIN IN OCALA FL says:

      Okay thanks! Now you all have a great day. Enjoy the Labor Day Weekend as it may be our last free holiday for working people.

    14. coolfriend says:


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