The middle class (what's left of them) and the poor aren't going to be saving their money like the rich are; they're going to take that money and pay off their credit cards and other debts they've piled up because the cost of living has gone up. And that will make the banks unhappy, because they won't be able to collect billions in interest charges.

"Recall that Krugman’s “models” compelled him to recommend that interest rates be slashed after the dotcom bubble burst, in order to inflate a housing bubble. That is exactly what happened, and despite the devastating consequences, Krugman refuses to question the validity of his models."

Really, Mr. von Freemason, that is the best you can do?

I know people like this. They grew up poor, or at least relatively poor, and now, after a college education, and becoming "yes-men" in their corporations, they consider themselves as "middle class."

Here's why:

They have Bosses that are FAR GREATER COMPENSATED THAN THEM, and know that their bosses are able to "off-shore" and "hide" their compensations from the taxman, while they, and their compensations, cannot be so. So, to them, their bosses are rich, whereas they are middle class.

Low interest rates, huh? What's wrong with low interest rates? It seems perhaps predatory lending practices and fraudulent packaging and selling of securitized subprime mortgages are closer to the mark. But that doesn't fit so well with the self-regulated, "free market" story.

Anyway, everyone wants low taxes, don't they? We need a much leaner military, less government subsidies, less corporate welfare, a simpler tax system, universal healthcare privately delivered, a clean energy economy, a strong environmental ethic, less infrastructure aka a sustainable nation. This would go a long way to reducing gov't. expenses, and perhaps taxes could be reduced for everyone. Until that happens, the rich can afford to pay more tax for more waste. Simple.

We need to go back to Alexander Hamilton's theory of mercantilism. Put a 40% tariff on all goods coming into this country and raise the top tax bracket back to 70% (before Ronny Reagan) on all income over 5 million. That will replenish our manufacturing base that we have been off shoring for the past 30 years. Put the country back to work plus we will be able to manufacture our own military supplies. Do you think China will supply us with bullets if we get into a shooting war over Taiwan?

I do not understand why the rich have become so callous to the plight of the unemployed and why profit at any cost has become such an obsession that the rich would sacrifice the long term stability of the society for a few more dollars (remember the movie)? I much rather pay higher taxes and find ways to give the unemployed a job than to keep hoarding (I guess I have not caught the disease of the super rich). On the other end, we have a few who have gamed the system and made it a career to live off the working poor as well. We need to find a way to bring some comprehension to the rich about the consequences of too many people on the street (they are the kids, mothers, sisters, fathers, etc.) of those who would be asked to show the iron fist for protecting the rich. I would not feel secure in such a condition. So Mr. & Ms. RICH, understand what is at stake and play your role as a social stabilizer instead of social wrecker!!! And we need to find a way to goad the army of welfare buffs to get off their duff and start supporting themselves. We need to shut down the disability gate and get the attorneys out of this business.

Andrew Breitbart carefully edited Shirley Sherrod's video to create a false impression. Selecting a few columns, while omitting the ones where Krugman specifically warns or a housing bubble, is similar in its deceptiveness.

What an uninformed readership !!

Who created all of the national debt? Where did all the money go?

http://zfacts.com/p/318.html

Now another question - Why aren't the Republicans running on the record established during three
R administrations Reagan, Bush, W. Bush
Twenty and a grand total of $9.2 trillion added to the national debt. All documented in the link above.

People, start here and plan ways to do things differently. [ http://www.dgswilson.com/player/PiercingTheIllusion.html ]You really don't have to accept things as they are. Remember they weren't always that way. People can make things different. We can decide to be and do things differently

Any thots about re-structuring the work week? Howz about a 20 hour work week? Solidarity forever!

@Anonymous - 23:18 - "Get real, Mr. DeLong and the rest of you privileged folks--quit complaining and be thankful for what you have."

Read the article again and then go and then google "delong + henderson."

Idiot.

Mr Truth,

Could you or someone else give us some citations where Prof Krugman warned about the housing bubble—preferably before it started to collapse in 2006? I thought he himself claimed that, like most other economists, he didn't see the financial crash coming. Perhaps he saw the housing bubble but didn't connect it with the overall financial bubble?

I suspect that the heart of the matter with all of us, not just economists, is the addiction to "economic growth." We're supposed to grow out of all our problems including social equity. The "voices of sanity" all want to "get the economy growing again." Since the FIRE sector (Finance, Insurance, Real Estate) is now the dominant economic interest, when you want growth you want the banks to grow.

I don't understand Prof Krugman's reasoning about rich people saving rather than spending their tax bonanzas. Rich people don't save by stuffing cash under their mattresses, they put it into the financial sector, where they can protect and increase their wealth. In reality the rest of us are forced to subsidize this strategy—their wealth is made possible by our lower incomes and our higher taxes!

Anyone who wants to apologize for Mr. De long's living beyond his means is the idiot! thought nobility ended a long time ago. Raise taxes through the roof on these overpaid people. Back in 1954, by the way, the highest paid player in the NFL was Y.A. Tittle of the 49ers, at $20k a year and corporate presidents made a few hundred thousand! The income gap that developed through mostly 30 years of having a Rethuglican president should be obvious to everyone, but unfortunately not to the greedy!

Prof. Krugman,

Please help me out with something. I believe the following are simply Orwellian slogans/propaganda tools --

a) trickle-down economics, and
b) free market theory

Personally, I don't believe that money or economic benefit "trickles down". Nor do I believe that this market is "free".

Actually, I believe all that we've seen in the past decade supports the view that the market is continuously manipulated and that the money is actually trickling up, and staying there.

Please help provide a factual frame for this view.

Whose palatial estate is pictured? What are the names and addresses and phone numbers? We'd love to be able to write and congratulate them on their good (or evil?) forturne.

Isn't it time to abandon the tinkle down theory of wealth distribution? More is more. Those with more may or may not choose to spend it, increasingly choosing may not and increasingly doing their savings globally. All of little benefit to the good old USA where they are prime beneficiaries of public sector services, for example, an oversized military making the world safe for multinational corporations. A recent article about the Koch brothers noted both their philanthropic and political expenditures and views. It is all very much gilded age retread. These billionaires seem to view themselves as the present day aristocracy (even if they flatter themselves that is a pure meritocracy, or worse, divine ordinance) that is entitled to have it all and on terms of their choosing (no regulation whatsoever, no constraints regarding environmental impact or working conditions harmful to employees or contractors, etc) then place their largess where they choose and when they choose.

It's just capitalism.
The money flows to the place where it'll gather the most profits.
Why should the corporatists and capitalists pay TAXES on their profits, when they don't INVEST in the USA?
Silly us.
Thinking that capitalists ride on the same roads we do, use the bridges that we do, and eat the same food that we do. They take helicopters. They have organic food prepared from scratch.
They don't need us anymore. All the money can be outsourced and off-shored. Now do you understand why they're so upset about "socialism"? Makes sense, eh?

It seems class warfare is in the future. I wish I hadn't had the lobotomy and realized investing in war manufacturing companies would put me in the upper realms of " middle class wealth. " D. Cheney and his "Other Priorities" war hero legacy, which gave us "Freedom Fries " and Oh Blah Blah's submissive butt kissing to Wall Street and the monarchs that run this country would truly be my friends.

Someone once said: " I can hire half the working class to kill off the other half. " Having worked as a working class people organizer. I can testify that they will cut off their noses to spite their faces and even do more to self destruct. Seems like give them ' 'bread and circuses' along with professional wrestling . There are some very good rich people but the vast majority are smart and only think about themselves and will suck the stupid working class dry. Worked for the very wealthy for many years as a gardener and when every money came into the discussion, I would get the second act of KING LEAR or a version of one of the tragic operas we have. I could only hope for the fat lady to sing!

I'm going to go and eat some "Freedom Fries and go look for Weapons of Mass Destruction." I know they are out there because ........." The one thing history teaches us is that we don't learn from history!" My 15 minute attention span is up.

To the person saying the obvious, that things were better in the 50's (except for certain people still living under Jim Crow) money was worth more than it is now. The rich hated to see the lower middle class start living kinda like they did: maybe a vacation home or a boat because of good union wages. Then came Reagan, and you know that formerly poor person really hated his roots!
He did the bidding for the multi-millionaires then, making them into billionaires with tinkle-on-the middle class and working poor economic policies. By the way, these are facts, not opinions!

How about PEOPLE in their fifties who will never work again?

"The only way the money is going to 'trickle down' from the top 5% is if we tax them."

Spot on!

Millions of ordinary Americans, middle, upper-middle, lower class, and a smattering of the formerly affluent are now facing homelessness and destitution in the wake of unprecedented consumer goods, services, and utilities costs versus cost cutting for the producers achieved to the detriment of the common working person and taxpayer. their overhead and cost of goods produced is down--way down-- but they are passing along increases to consumers! Also in the wake of an unprecedented confiscation of wealth unseen since Cromwell ravaged Ireland. It is very difficult to feel sorry for a person who is whining about paying some income tax while alive, let alone some estate tax-- post mortem in lieu of income tax when so many millions are wondering where the next meal will come from and what roof if any will cover their heads. What namby pambie self-serving narcisists have we entrusted our national wealth and treasure to> Perhaps it is high time to thin the herd of parasites?

"The only way the money is going to 'trickle down' from the top 5% is if we tax them."

Not if We the People abrogate our responsibility, as We have been doing, to examine how that tax money gets spent and insist that such money is spent for the benefit the country as a whole.

All they do now is back aspirants to elective office (from among *us*) who will betray the interests of the nation, and so get their money back in the form of favorable government action which provides legal cover for their larceny.

Dear Hawkey: You seem to cast aspersions at the idea that 50s tax rates would be relevant today. In the 50s we were fighting wars (we wouldn't formally declare them but we were), in Korea, then in Vietnam. No one would've thought of cutting taxes - not even a Republican (like Eisenhower, who was President) - while fighting a war.