14 Jun 2012

Paul Krugman : End this Depression Now!

And here's another book that I've just read - it's Paul Krugman's book that just came out called "End this Depression Now!" The Nobel prize-winning author argues strongly for the idea that governments can end the current depression by a massive increase in public spending. Some of the most amazing parts of the book are where he shows that the current "Austerian" view, in which cutting back on budgets is supposed to stimulate the economy is simply illogical. It's as if there are armies of economists arguing for something that they must know can't be true. And the result is that they give support to people like David Cameron and George Osborne who have an almost religious belief that cutting back on government expenditure is going to magically kick-start the economy.

So, I found his argumentation very convincing. But, there was one thing completely lacking from the entire book. Why is he not arguing that an increase in government spending doesn't have to involve an increase in government borrowing and hence debt? Anyone who has read books like "The Web of Debt" or "No more National Debt", or watched "The Money Masters" or "The Secret of Oz" will know that governments do not have to borrow money from the commercial banks and end up paying trillions in interest charges. Why on earth isn't he pushing for the ideas promoted by Ellen Brown, Bill Stills, James Robertson and the Positive Money movement? 

Could it be that the establishment economists (those who, like Paul Krugman, are established professors at Princeton University and elsewhere) know something that we don't? Is there something wrong with the argument that we should be taking the right to create money with interest from commercial banks and making all money creation interest free and under the control of elected governments? If so, would they please tell us what the problem is?

Or could it be that the establishment economists dare not expose the scandal because they are, to some extent, part of the system? I hope not.

But the other thing that was lacking from Paul Krugman's book is a discussion of the possibility that the current Euro crisis and other worrying developments could actually be part of a deliberate policy by the money masters. With the things I've been reading recently, which argue quite strongly that many of the depressions that have occured over the last two centuries were probably deliberately manufactured, it seems to me that the reason why no economists can provide a convincing explanation of why they believe that massive austerity can boost the economy, is that they are involved in producing a smoke screen to hide something altogether more sinister.

Whatever the explanation, I find it very strange that someone like Paul Krugman who is so clearly arguing for the right sort of solution seems to have missed the vital fact that makes the "austerian" view totally untenable. The public can have both - they can get their governments out of debt AND give the massive boost to the economy needed to end the depression. But it involves taking on the banking cartel that has rigged the system.


  1. "Or could it be that the establishment economists dare not expose the scandal because they are, to some extent, part of the system?".

    Follow the Yellow Brick road ...

  2. "Follow the Yellow Brick road..."

    Indeed, that's what I'm doing. And I'm getting increasingly convinced that there is an absolutely massive cover up going on here. Why is no-one talking about this obvious option? Any politician who offered to save taxpayers  $450 million a year in interest payments (in the US) and $370.8 billion a year in the EU would surely get everyone's vote. Why aren't there political parties putting that forward as an option?

    Have they really all been bought?

  3. Rather than having been bought, I think it's more a case of them selling themselves to the banking institutions; who in turn use the situation to their own advantage.
    I wrote this before but with your permission I'd like to state it again:As to the answer why don't politicians implement these measures or why haven't they up to now - it's because they're at the same time private citizens with quite a lot of money to spend. This money, which they've made sure they get by passing the corresponding pay and pension rises, is then invested on 'the markets' - those nasty things everybody hates at the moment as it's what has the economy by the short and curlies. So, as you rightly mention, here is another golden goose but at the individual level. It is by now perfectly clear why certain individuals become politicians and if they can themselves benefit from buying up national debt on top of the perks they get from the job, why on earth should they rush to 'solve' the situation? 
    Je propose:
    That no one in public office should be allowed to trade on the markets, in the same way as it is illegal for persons with inside knowledge to benefit from said information.

  4.  Well, I'm still seriously puzzled. I would have thought that if you were a politician, then you would put being elected in front of keeping your nest egg intact.

    As I say, any politician who decided to campaign on this would surely be guaranteed to win - if their campaign wasn't blocked by the media (which is admittedly a problem).

    Mind you, Bill Still mentioned how the main news channels in the USA are all so in debt to the banks, that they are obliged to avoid controversial topics. Very sad.

    But, we do have the internet. And a real citizens movement should be possible.

  5. " I would have thought that if you were a politician, then you would put being elected in front of keeping your nest egg intact."
    That is the theory. The practice is that these individuals stay in place for long enough for it to be more than worthwhile - being re-elected is a 'chance' they take and no real loss if they aren't; by this time the 'nest-egg' is well lined.

    Ah, the internet. John Logie Baird had great hopes for television ...