Pundits are childish and see themselves as Noble and Superior - Sarcasm - Liquidity Trap - Gold

Krugman explains that the pundits (he calls them Serious people with sarcasm) are childish because while they offer mild support for Obama’s recently released budget (which cuts a bit of SS) they will backtrack in no time and denounce Obama for not showing more leadership when the Republicans won’t come to an agreement.  Krugman’s main point is that these pundits will do and say anything to be seen as centrist (he calls them noble and superior) even though he believes the center has now moved right and Obama’s current policies are now center compared to where the political spectrum was in the past.

Krugman also has a sarcastic post highlighting how a Republican has criticized Obama for his proposed to cut Social Security.  Krugman has warned something like would happen if Obama cut social security even though Republicans are the ones to say entitlement spending needs to have an adjustment.  He just can’t believe the hypocrisy.

There is an in-depth discussion of the liquidity trap (see my ‘about’ section for a synopsis of a liquid trap) and what is transpiring in Japan. Basically the western world is in one, but Japan has promised to keep printing money into the foreseeable future (credibly irresponsible in Krugspeak) – Krugman believes this is the only way to get out from the liquidity trap and to get the economy to recover. He is quite excited about this development.

In Krugman’s regular column he glories in the fact that gold has lost double digits percentage points since its most recent peak.  This plays right into his model that inflation is not a danger – since if it was then gold would be up recently not down.  He also uses gold as an example of why people still listen to Fox and right wing ‘goldbugs’ and wonders if they will lose their credibility? He believes they won’t since the gold mania plays right into people’s political viewpoints even if it causes them financial loss.