"Far from being ready to spend more on job creation, both parties agree that it’s time to slash spending — destroying jobs in the process — with the only difference being one of degree."
This must be Krugman's umpteenth op-ed calling for increased deficit spending, but this time there is a twist, or a villain behind the plot, i.e. the "rentiers":
"What lies behind this trans-Atlantic policy paralysis? I’m increasingly convinced that it’s a response to interest-group pressure. Consciously or not, policy makers are catering almost exclusively to the interests of rentiers — those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else’s expense.
. . . .
Who are these creditors I’m talking about? Not hard-working, thrifty small business owners and workers, although it serves the interests of the big players to pretend that it’s all about protecting little guys who play by the rules. The reality is that both small businesses and workers are hurt far more by the weak economy than they would be by, say, modest inflation that helps promote recovery.
No, the only real beneficiaries of Pain Caucus policies (aside from the Chinese government) are the rentiers: bankers and wealthy individuals with lots of bonds in their portfolios."
Forgive me, Paul, but I'm a little confused here. I'm no fan of banks (I wasted too many years of my life working for one), but I always thought that healthy economies meant lower credit risk, less doubtful debt, and better opportunities for financial institutions to lend money and improve their balance sheets.
"Wealthy individuals with lots of bonds in their portfolios"? I would think that they would also be happier if economies would expand with a corresponding increase in bond yields.
But someone must be blamed for America's economic woes, and rather than point a finger at Obama, whose name never once appears in Krugman's op-ed, let's impugn those elusive "rentiers."
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