I'm not an economist either but I'll bet Summer's objection to giving $2,000 checks is more about cruelty than economics. Look at his face -- hardened, dissipated and with eyes that would freeze a rattlesnake in its path. He didn't object to the billions handed out in the 5,000+ pages of this bill. There's a clue.
(Macro)Economist here. The blunt truth is that non-economists's opinions about macroeconomic consequences of policy actions are just as good as those of economists. Macroeconomic models people like Summers etc spent careers building have next-to-zero predictive power a year out. We have no fucking clue what will happen. Inflation may accelerate this summer regardless of $0.6-$2-$5-$10k we throw at people (and if it does, it will likely be due to rapid monopolization due to Covid response), or it may slow down.
Well done Matt. I know eco pretty good and there are two rules. It's all about structure and nobody knows anything. Structure goes like this: if you build it they will come. (Kinda like the movie.) That's why tax plans are important and so are trade agreements and unnecessary regulations. We measure these sorts of things over the long haul, not next quarter's GDP.
As for nobody knowing anything, it's important to recognize that eco is still a relatively new field. These guys aren't like doctors talking about the heart. That's why arrogance is never fitting. You can pull economists to say anything and, unfortunately, they always present personal theory as undoubtable fact. The field is still changing, nothing like the heart.
Sorry Matt, it's dangerous (if you're admittedly "no economist") to pretend you know what you're talking about with respect to the $2,000 check. Would you favor $5,000 or $10,000 instead of $2,000 or $600? Do you have any inkling of what the ramifications of your choice might be? I'm with you on the Goldman Sachs - AIG scam (which is more financial trickery than economics), but when more and more of the "free" money is being shoved into savings accounts, ya gotta ask what's going on here . . . oh yes, your other favorite - inflating financial asset values for the rich while everyone else collects squat on their savings.
I hate to comment on someone's physical appearance and anyone can look unattractive at any moment, but I love the headline photo. The hanging gut and neck fat spilling out of the collar as he lazily leans back, almost as if he's waiting for a tray of Hors d'oeuvres in the court of Versailles, really says it all. Somehow makes it challenging to call him an "Empty Suit".
The point that Matt Taibbi is making is not that what Summers says is wrong or right, it is that when it comes to bailing out big business or especially Wall Street the likes of Summers scream MORE! MORE! FOR ALL OF THEM! MORE! MORE! but only when it comes to "losers" they start making distinctions between this and that category, whether those distinctions are pointless or not.
Matt, I'm not a fan of Summers, but he does ask a good question - what is the limiting principle?
We were, before all the money spent this year, paying about $500 billion per year in interest on money already borrowed. That isn't quite the defense budget, but it is inching toward it. We have added to that greatly this year. In the case of this year, it was necessary. But all of this money will be paid back with interest. I'm 57, it won't mostly be paid back by me. You mentioned "many times that" was paid to prop up financial institutions - and I think you were referencing the $2 trillion that would have paid off home loans. I don't think that is correct. The TARP money approved was $700 billion and all the funds loaned to those institutions was paid back. That doesn't make it a good idea, but it didn't cost the taxpayer in the long run. This will - again, necessarily so. But I don't know that indiscriminately giving $2000 per person is a good idea.
I live in the middle of the country. Most people I know who did not have their employment interrupted are doing at least as well as 2019. We are doing better. We are making the same amount and there is less to spend money on. My wife is a nurse, and was furloughed for three weeks when elective procedures were postponed - and she got, after the additional unemployment benefits, a little less than she would have had she been working. I think people who have lost their jobs or can't work should get $5000 and people who have had their business closed should get a relief loan of up to $100,000 that would be forgiven if the business reopened and people like me should get nothing.
I think we often do things mostly to make ourselves feel better that we are doing something and we don't think too hard about what will really help people.
Your last line nailed it, guys like this is how a guy like Trump got in the Oval Office. The MSM and the Left leaning folks can blame Trump for Trump, and all those mouth-breathing idiots in the dirty fly-over states, but the reality is our “intellectual betters” are why an Orange haired maniac has had the reins the last four years.
The Federal Reserves balance sheet increased by 2 trillion in 2008 and 4 trillion during the covid crisis. The wars America has engaged in during the last 20 years have also cost trillions of dollars.
All of this is 'business as usual', but giving crumbs to the American populace is economically dangerous.
I think what Larry Summers and people like him overlook is that American workers are cash starved. We make too little money. So stimulus checks are just a way to get a tiny piece of what we’re owed by the system back into our pockets. Even if 60 % of that cash misses the “target” of the most needy, it still helps the overall economy by circulating cash into the normal economy of everyday people. That’s probably why retail Christmas spending was up this year despite the pandemic. Cash hoarding by the one percent is no way to have a healthy economy. Certainly not a democratic one. Trump does not know or understand the bloodless corporate mentality and therefore is despised by the 1 % even as they enjoy the tax breaks he gave them. This is why he will say things that resonate with average people and make them think he’s on their side - such as the $600 was a disgrace and that is should be $2000. And why not $10,000, Larry? American workers have been robbed to the tune of trillions of dollars by the rapacious corporations since Reagan declared war on them in the 1980s. Larry Summers is a shill for these thieves. However, I don’t think he is aware of being one.
This was by far your worst take since I started subscribing. He's not saying screw the poor, he's saying the money would be much more effective if targeted at people who are most adversely affected by the virus shutdown. Programs in Europe generally targeted programs to businesses to keep them afloat on the condition that they maintain their employees. That seems to me to be a vastly better program, since the money keeps flowing to people but it also keeps them connected to their workplace and eases the transition back to work post covid. Summers thinks other programs are better than the one I favor. These are all different opinions but I think also part of a healthy helpful discussion. If he said something like people who lose their jobs should starve to death, he'd deserve your reaction and the storm on twitter. But he didn't and he doesn't. Just seems like you hate rich people and you'll launch an attack based on that rather than what they're saying.
To be honest, I think Summer's idea of the economy overheating might be the peasants aren't cold enough this winter.
And that's not a joke. Hunger and Cold are great motivators for compliance.
We for instance kept the Germans hungry and Cold in 1945-1946 winter by policy.
You see: in their minds they didn't just win an election, they have just conquered Nazi America and it's 1945 again. Now it has to be controlled and De-Nazified, pacified. The entire Nazi racist inbred hicks theme was never hyperbole but the truth hissing out.
The actual truth is they haven't conquered the non-existent Nazi America, they've conquered tens of thousands of Bedford Falls, who's inhabitants are stunned and confused by the bizarre behavior they've just noticed. Sure it's been there awhile but it took an purloined election for Bedford Falls to notice. We shall see if it works.
I'm not an economist either but I'll bet Summer's objection to giving $2,000 checks is more about cruelty than economics. Look at his face -- hardened, dissipated and with eyes that would freeze a rattlesnake in its path. He didn't object to the billions handed out in the 5,000+ pages of this bill. There's a clue.
Economists have no special intellect or knowledge; the entire field is filled with fallacious garbage.
You are more qualified to speak on fiscal and monetary policy than any moronic economist.
(Macro)Economist here. The blunt truth is that non-economists's opinions about macroeconomic consequences of policy actions are just as good as those of economists. Macroeconomic models people like Summers etc spent careers building have next-to-zero predictive power a year out. We have no fucking clue what will happen. Inflation may accelerate this summer regardless of $0.6-$2-$5-$10k we throw at people (and if it does, it will likely be due to rapid monopolization due to Covid response), or it may slow down.
Well done Matt. I know eco pretty good and there are two rules. It's all about structure and nobody knows anything. Structure goes like this: if you build it they will come. (Kinda like the movie.) That's why tax plans are important and so are trade agreements and unnecessary regulations. We measure these sorts of things over the long haul, not next quarter's GDP.
As for nobody knowing anything, it's important to recognize that eco is still a relatively new field. These guys aren't like doctors talking about the heart. That's why arrogance is never fitting. You can pull economists to say anything and, unfortunately, they always present personal theory as undoubtable fact. The field is still changing, nothing like the heart.
Anyway, you did a good job.
Sorry Matt, it's dangerous (if you're admittedly "no economist") to pretend you know what you're talking about with respect to the $2,000 check. Would you favor $5,000 or $10,000 instead of $2,000 or $600? Do you have any inkling of what the ramifications of your choice might be? I'm with you on the Goldman Sachs - AIG scam (which is more financial trickery than economics), but when more and more of the "free" money is being shoved into savings accounts, ya gotta ask what's going on here . . . oh yes, your other favorite - inflating financial asset values for the rich while everyone else collects squat on their savings.
I hate to comment on someone's physical appearance and anyone can look unattractive at any moment, but I love the headline photo. The hanging gut and neck fat spilling out of the collar as he lazily leans back, almost as if he's waiting for a tray of Hors d'oeuvres in the court of Versailles, really says it all. Somehow makes it challenging to call him an "Empty Suit".
The point that Matt Taibbi is making is not that what Summers says is wrong or right, it is that when it comes to bailing out big business or especially Wall Street the likes of Summers scream MORE! MORE! FOR ALL OF THEM! MORE! MORE! but only when it comes to "losers" they start making distinctions between this and that category, whether those distinctions are pointless or not.
Matt, I'm not a fan of Summers, but he does ask a good question - what is the limiting principle?
We were, before all the money spent this year, paying about $500 billion per year in interest on money already borrowed. That isn't quite the defense budget, but it is inching toward it. We have added to that greatly this year. In the case of this year, it was necessary. But all of this money will be paid back with interest. I'm 57, it won't mostly be paid back by me. You mentioned "many times that" was paid to prop up financial institutions - and I think you were referencing the $2 trillion that would have paid off home loans. I don't think that is correct. The TARP money approved was $700 billion and all the funds loaned to those institutions was paid back. That doesn't make it a good idea, but it didn't cost the taxpayer in the long run. This will - again, necessarily so. But I don't know that indiscriminately giving $2000 per person is a good idea.
I live in the middle of the country. Most people I know who did not have their employment interrupted are doing at least as well as 2019. We are doing better. We are making the same amount and there is less to spend money on. My wife is a nurse, and was furloughed for three weeks when elective procedures were postponed - and she got, after the additional unemployment benefits, a little less than she would have had she been working. I think people who have lost their jobs or can't work should get $5000 and people who have had their business closed should get a relief loan of up to $100,000 that would be forgiven if the business reopened and people like me should get nothing.
I think we often do things mostly to make ourselves feel better that we are doing something and we don't think too hard about what will really help people.
Your last line nailed it, guys like this is how a guy like Trump got in the Oval Office. The MSM and the Left leaning folks can blame Trump for Trump, and all those mouth-breathing idiots in the dirty fly-over states, but the reality is our “intellectual betters” are why an Orange haired maniac has had the reins the last four years.
I suggest that most people who voted for DJT in 2016 were thinking about his opponent, not about Larry Summers.
The Federal Reserves balance sheet increased by 2 trillion in 2008 and 4 trillion during the covid crisis. The wars America has engaged in during the last 20 years have also cost trillions of dollars.
All of this is 'business as usual', but giving crumbs to the American populace is economically dangerous.
I think what Larry Summers and people like him overlook is that American workers are cash starved. We make too little money. So stimulus checks are just a way to get a tiny piece of what we’re owed by the system back into our pockets. Even if 60 % of that cash misses the “target” of the most needy, it still helps the overall economy by circulating cash into the normal economy of everyday people. That’s probably why retail Christmas spending was up this year despite the pandemic. Cash hoarding by the one percent is no way to have a healthy economy. Certainly not a democratic one. Trump does not know or understand the bloodless corporate mentality and therefore is despised by the 1 % even as they enjoy the tax breaks he gave them. This is why he will say things that resonate with average people and make them think he’s on their side - such as the $600 was a disgrace and that is should be $2000. And why not $10,000, Larry? American workers have been robbed to the tune of trillions of dollars by the rapacious corporations since Reagan declared war on them in the 1980s. Larry Summers is a shill for these thieves. However, I don’t think he is aware of being one.
I have four suggestions and I'm not an economist:
1. Stop the lockdowns.
2. Quit sending money to foreign countries.
3. End pork spending.
4. Term limits.
I'm sure Harvard will be calling to offer me a job any minute.
"Dead on" Matt. Summers is just like every other East Coast and Hollywood liberal I have ever met.
This was by far your worst take since I started subscribing. He's not saying screw the poor, he's saying the money would be much more effective if targeted at people who are most adversely affected by the virus shutdown. Programs in Europe generally targeted programs to businesses to keep them afloat on the condition that they maintain their employees. That seems to me to be a vastly better program, since the money keeps flowing to people but it also keeps them connected to their workplace and eases the transition back to work post covid. Summers thinks other programs are better than the one I favor. These are all different opinions but I think also part of a healthy helpful discussion. If he said something like people who lose their jobs should starve to death, he'd deserve your reaction and the storm on twitter. But he didn't and he doesn't. Just seems like you hate rich people and you'll launch an attack based on that rather than what they're saying.
To be honest, I think Summer's idea of the economy overheating might be the peasants aren't cold enough this winter.
And that's not a joke. Hunger and Cold are great motivators for compliance.
We for instance kept the Germans hungry and Cold in 1945-1946 winter by policy.
You see: in their minds they didn't just win an election, they have just conquered Nazi America and it's 1945 again. Now it has to be controlled and De-Nazified, pacified. The entire Nazi racist inbred hicks theme was never hyperbole but the truth hissing out.
The actual truth is they haven't conquered the non-existent Nazi America, they've conquered tens of thousands of Bedford Falls, who's inhabitants are stunned and confused by the bizarre behavior they've just noticed. Sure it's been there awhile but it took an purloined election for Bedford Falls to notice. We shall see if it works.