April 14, 2011

Herzog the Blogger

One of my favorite books from high school years, and my favorite among all of Saul Bellow's novels, was Herzog, about a stressed-out, middle-aged, cuckolded academic who undergoes a nervous breakdown and begins compulsive letter writing. He writes to everyone he knows, then to politicians, then finally to the famous dead, in long, complicated, highly literate language, complaining about the state of the world and his place in it. It is an intellectual tour-de-force.

Gee, wonder why I liked that novel. It's pretty obvious Herzog was a proto-Blogger. I don't know if one of the ten million blogs out there is called "Herzog," but one ought to be (along with "Impotent Information Overload"). With their limited readership, at least half the point of an amateur blog is self-therapeutic, although things didn't work out that well for Herzog himself.

You can now post comments to columns and blogs, of course, so if in the course of gassing on in your own blog you don't quite pontificate enough, you can do that too. I did, today, on Paul Krugman's blog, which he calls "Conscience of a Liberal" (just the slightest touch sententious, do you think?). Prof. Krugman was writing recently about the august, esteemed title he has in German society because of his degrees and standing, to the effect that he is Herr Doktor Doktor Krugman (he's not actually, because he doesn't understand how those German honorifics work for foreigners). That's where "Dokrugman" comes from.

What's distressing to me, Dokrugman (portmanteau of Herr Doktor Doktor & Krugman) is that (a) you're over-using this "serious" trope (which I think, along with Very Serious Person or VSP, might be an unattributed borrow from Glenn Greenwald; is that possible?) and (b) you're getting involved in "budget-cutting" discussions at all. I don't read "The Conscience of a Liberal" to be reminded of the grim reality that the United States faces in its budget difficulties. I read this blog for its Keynesian hopefulness, where $150 billion in income against $330 billion in expenses (as in March's Treasury Statement) is okay and nothing much to worry about. Maybe the deficit will go to $2 trillion this year (or roughly total income), but it doesn't matter because, as you say, the Treasury is hardly "cash strapped." It can easily borrow as much money as it needs at rock bottom rates. For some strange reason. And only conspiracy theorists think that Treasury auctions are simply a rigged market, and if the PBOC calls the whole thing a "Ponzi scheme" (as they did recently), it only proves that they are not VSPs. Or proves that they are, I'm not sure which way the snark cuts.

So please, do not get bogged down in ways to "cut the deficit." That's for the others. You should be urging the government to spend more, to increase the deficit to $4 trillion per year, to $20 trillion. Whatever we need. Because the Treasury can simply borrow $20 trillion at 1% in perpetuity, with no problems once the Fed adds the bills and bonds to its mounting stash. And the 1% the Fed earns on its $20 trillion per year ($200 billion) can be remitted to the Treasury as income, reducing the deficit, thus...

What was the PBOC saying again? Anyway, please: no more belt tightening. Leave that to the uninformed.

Dokrugman does believe we'll be okay and that we should not be worried about cutting "now now now" (as he says over over over), but should keep spending and stimulating until the economy recovers to its mid-Bubble heights. Of course, I've never understood what economy we are aspiring to return to. The reason we went to Bubblenomics was because (a) Wall Street needed a cash cow, and housing was The Last Frontier, and (b) our so-called "Real Economy" is gone, shipped overseas along with all the middle class jobs it used to provide. So Americans can go "back to work," but it's all crap jobs and completely inadequate to provide a real tax base.

How do such obvious things remain hidden from view when they're lying in plain sight? If housing prices are once again correlated to income, and incomes are stagnant or even losing ground, how can housing prices do anything other than continue to go down? And if housing prices continue to go down (which they are, which they will, with 13 million houses empty in the U.S., with 20% of all real estate in Florida vacant), what is the economic driver of consumer spending, and thus jobs, and thus recovery, and thus federal fiscal solvency? Huh?

My inability to answer such questions explains why I do not have a Nobel Prize in Economics, I suppose. I'm just a lonely Herzog, crying in the wilderness.

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