Unfortunately for Eric Ferhnstrom, a senior campaign advisor to the Romney campaign, Paul Krugman (who's been on a tear lately) was on "This Week" Sunday morning to dismantle all of his vapid talking points.
First, he pointed out that government spending has been cratering since 2010 -- and openly mocked the idea that Mitt Romney has an answer to unemployment.
KRUGMAN: Well, the economy is weak. It's not terrible, but it's weak. The bitter irony here has to be for Obama, certainly for people like me, is that if the Republican answer is "let's slash spending, let's have low taxes," that's actually the policy we've been following. It's amazing, actually. Especially if you look at the last couple of years, what we've actually seen is sharply...Brutal.
(CROSSTALK)
STEPHANOPOULOS: Let me show you -- we have a chart in your blog this morning.
KRUGMAN: Yeah, this is...
STEPHANOPOULOS: We created it. It shows the point you're making.
KRUGMAN: Yeah, this is real government spending, so it's federal, state and local combined, deflated, you know, adjusted for population growth and inflation, and it is plunging. It's plunging mostly because of cutbacks at the state and local level, because the aid that they were receiving in the stimulus has run out, but also because unemployment benefits have been expiring because Congress won't -- you know, Republicans in Congress won't extend them.
So in effect - and, by the way, if you extend that chart backwards, there's been nothing like this since the demobilization after the Korean War. We're actually practicing government austerity on a scale that we haven't seen in 60 years. It's not the president's policy. In effect, we've already got the policies that Republicans say they will impose if they take the election, and yet, of course, it may lead to the defeat of this president.
STEPHANOPOULOS: And that's the point Stephanie was making, so bringing it back to you, what would Governor Romney do right now -- not in the future -- right now, to get the economy moving again?
FEHRNSTROM: Well, it's not just, as Paul says, tax policy. That's part of it, of course, but it's also spending policy, it's regulatory policy. It's confronting China on their unfair trade practices. It's -- it's a whole -- it's labor policy, George.
The governor has laid out very detailed plans. People can go to mittromney.com and learn about them for themselves. But I think what we really have here...
(CROSSTALK)
KRUGMAN: ... ...I know from detailed plans and there is nothing there. There is not...
Then, Krugman throws cold water on Willard's big "get tough with China and that will create jobs" plan.
CUTTER: ... he's going to deregulate Wall Street, which we know how that turns out. We're going to go back to risky financial deals that crashed our economy. And on China, you know, we've been hearing this blustering on China for quite a while now. What exactly is the governor going to do? There's...Last but not least, he exposes the flimflammery of the Ryan plan -- after George Will got Ferhnstrom to commit to it.
(CROSSTALK)
STEPHANOPOULOS: ... I want to bring in George Will.
FEHRNSTROM: He'll do what this president has failed to do in China, which is to declare that China is a currency manipulator. Look, we're all in favor of free trade. In fact, we don't think this president has done enough to reinvigorate trade talks -- trade talks with our friends, but China is -- is robbing us blind. They're stealing...
(CROSSTALK)
KRUGMAN: I was very much for that. I've been demanding that we declare -- but the window for that has passed. Right now, the Chinese economy is tanking. So if you were thinking you were going to get a big boost out of beating up on the Chinese now, two years ago I thought was really a good time to do that. But my god, now that is totally out of date.
WILL: On another matter, I didn't hear a robust answer to George's question. Where does the governor stand, Governor Romney, on the Ryan plan? Does he endorse it?Wonderful.
FEHRNSTROM: Oh, he's for -- he's for -- he's for the Ryan plan. He believes it goes in the right direction. The governor has also put forward a plan to reduce spending by $500 billion by the year 2016. In fact, he's put details on the table about how exactly he would achieve that. So to say he doesn't have a plan to -- a plan to restrain government spending is just not true.
KRUGMAN: Can I say, the Ryan plan -- and I guess this is what counts as a personal attack -- but it isn't. It's not an attack on the person; it's an attack on the plan. The plan's a fraud. The plan is a big bunch of tax cuts, some specified spending cuts, basically for poor people, and then a huge magic asterisk which is supposed to turn into a deficit reduction plan, but, in fact, if you look what's actually in it, it's a deficit-increasing plan.
And so to say that -- just tell the truth that there is really no plan there, neither from Ryan, nor from Governor Romney, is just the truth. That's not -- if that's -- if that's being harsh and partisan, gosh, then I guess the truth is anti-bipartisanship.
FEHRNSTROM: So may I ask you, Paul, do you prefer the president's plan?
KRUGMAN: Oh, yeah. I mean, the president -- at least it's -- you know, I don't approve of everything, but there are no gigantic mystery numbers in his stuff. We do know what he's talking about. His numbers are -- you know, all economic forecasts are wrong, but his are not -- are not insane. These are -- these are just imaginary.
Whenever Krugman is on one of these shows, putting some hapless Republican blowhard in his place, I'm reminded of the Marshall McLuhan scene from "Annie Hall."
The Telegraph is not to be trusted. They do publish.
http://www.telegraph.co.uk/finance/financialcrisis/
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I do not see a change in attitude in government.
http://delong.typepad.com/sdj/2012/06/the-three-issues-of-the-greek-crisis.html
"UPDATE: And Paul Krugman drops the hammer: It ain't happening! Run for your lives!"
http://www.zerohedge.com/news/complete-eurocrisis-summary
Confused by the latest developments, headlines, stories, counterstories, denials, counterdenials and rumors, but mostly prayers out of Europe? Here is your one stop shop of everything that has transpired in the Eurocrisis most recently.
Mostly via Citi:
- According to Bloomberg, Merkel hardened her opposition to joint debt sharing in the euro region as President Barack Obama singled out Europe’s leaders for not doing enough to arrest the financial crisis: “under no circumstances” would she agree to Germany-backed euro bonds. Some “come along and ask for euro bonds, saying all we need are equal interest rates and everything will turn out all right,” Merkel said in a speech to members of her Christian Democratic Union in Berlin yesterday. Instead, what’s needed is an economic overhaul to tackle the lack of competitiveness in Europe, she said.
- Dow Jones reports Spanish PM Mariano Rajoy saying that solutions for the Eurozone crisis will start to be found soon. “Spain is a factor in this situation, but one of many... I have good reasons to say that these problems of the monetary union are going to start to be solved in not very much time,” he said in a televised speech.
- Perhaps Rajoy’s confidence is the result of a report in German newspaper Die Welt picked up by Dow Jones that, “the chiefs of four European institutions are in the process of creating a master plan for the Eurozone, the daily Die Welt reports Saturday, in an advance release of an article to be published Sunday.” It adds: “Suggestions targeting a fiscal, banking, and political union, as well as structural reforms, are being worked out by EU Council President Herman van Rompuy, EU Commission chief Jose Manuel Barroso, Eurogroup Chairman Jean-Claude Juncker and European Central Bank President Mario Draghi, according to the article.”
- Reuters is among the news services reporting that the "Big Four" accounting firms KPMG, PwC, Deloitte and Ernst & Young will carry a full, individual audit of Spanish banks. First results are expected around mid-June.
- Spain announced it will auction some 2- 4- and 10y Bonds on June 7. The FT describes the move as ‘defiant’.
- The FT reports that Syriza aims to renegotiate the Greek bailout should it be in a position to form a government on June 17. “The left-wing party that came a surprising second in last month’s Greek elections has pledged to halt interest payments due on the country’s debt and revoke the terms of its bailout agreement if it comes to power in a re-run vote on June 17. Alexis Tsipras, leader of the far-left Syriza party, said he would also cancel EUR11bn of cuts due to be implemented this month, reverse promised labor reforms and raise taxes on the wealthy.” The article is here.
- German tabloid Bild says in an editorial that Greece is fast reaching the end game. “Greeks are plundering their bank accounts, imports to the country are no longer guaranteed, rumors abound of drachma being printed and energy suppliers are no longer paid, Nikolaus Blome, Bild’s chief political columnist, said in an editorial in Saturday’s edition,” is how Bloomberg reports it.
- The UK’s Telegraph has been a critic of the EUR since before its inception and it now smells blood. “Spain is in 'total emergency’, the EU in total denial,” is the title of an article published this weekend. “I’ve never actually heard the term ‘total emergency’ before, at least not in the context of global economics. It sounds like the title of a disaster movie. When it is uttered in sober tones by the elder statesman of an advanced democracy to describe his country’s financial condition, the effect is rather startling,” the piece begins. It says if Spain did leave the EUR, there would be nothing left for any other country to exit. The article is here.
- Speculation of an ECB rate cut is starting to build. “The European Central Bank may cut interest rates again soon as the Eurozone debt crisis deepens, but it will continue to insist that it is up to governments to find a lasting solution, analysts say,” reports AFP. It adds though: “ECB watchers predict the central bank -- which will hold its regular policy-setting meeting next week on Wednesday instead of Thursday owing to a public holiday -- will not alter borrowing costs just yet this month. But it could act in July as deepening fears about Greece and possible contagion to other countries push the 17 countries that share the euro back into recession, the analysts predicted.”
- France: French yield levels have gone mental, at some stage the 10y yield rallied by 22bps. And it looked like around 100bps stops got triggered. As we write the colour the spread is back up to 105bps vs. Germany. Apart from the wage cut action for himself and for the CEO’s for state owned companies (a bike ride away from communism,) I could not notice any substantial reform so far for France. Most likely we will not see any until the June election is out of its way. Surely France needs to do its homework, and if Mr. Hollande does not want to listen to the markets, at least he should go through the European Commission report, where France is asked to address risky imbalances in its economy.
- Italy: Berlusconi comments that Italy should say “Ciao, EURO” even if it was a “crazy idea”. How colourful… either way some positive, yes we mean positive development. The GC short dates have re-traced from its 40bps lvls to now average 37bps in T/N, ending the day 36-35 on a good 5bn volume. One week term traded at 35bps and 1-3M quoted around 38-33bps. Specials space we are not seeing exceptionally expensive bonds. The most in demand is the March 22s, trading close to 1bn in volume on S/N day to day and followed closely by Aug 23s, both averaging around 8bps. Sept 22s that use to hold value is now a jump GC since the tap, but if you are to look for term trades especially for futures trade then you won’t get much liquidity.
- Last but not least, the usual dose of fire and brimstone from Ambrose Evans-Pritchard
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