How much sicker does the patient have to get before the doctors stop prescribing poison?

Here are some selected news stories out of Europe:

New York Times: "Unemployment in Euro Zone Reaches a Record High"
WSJ: "Sixth Quarter of Contraction Looms for Euro Zone"
Der Spiegel: "Shredded Social Safety Net: European Austerity Costing Lives"
WSJ: "Spain Says Budget Gap Is Wider Than Reported"
New York Times: "European Car Sales Point to Continuing Slump"
WSJ: "Italy Unable to Form Government"
New York Times: "Debt Rising in Europe"

Paul Krugman's right: This isn't a recession. It's Europe's Second Depression, and it's on track to last even longer than the first one. Austerity economics has been imposed across most of the Eurozone, to a greater or lesser degree, with devastating economic results:  This is Europe's sixth consecutive quarter of economic contraction.

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I really enjoyed watching Paul Krugman on Morning Joe today, responding to the paid deficit hawkery of Very Serious People Ed Rendell and Richard Haas. (Watch for the return of the invisible bond market vigilantes!) He talked about why there's no good reason to cut spending during a depression, and explained in detail why the deficit isn't an urgent problem.

Ed "Fix The Debt" Rendell said the best way to stimulate the economy was to get the debt under control.

"Have you been living in the same country I'm in these past five years?" Krugman retorted, saying the deficit is far down on his list of things to worry about.

In response, Mika gasped and said, "I feel like we're talking about climate change! My God!" (What a dope.) Krugman said that was a destructive comparison, and explained why. But I doubt she listened.*

I especially liked it when he responded to Joe Scarborough: "How many times do people like these have to be wrong and people like me have to be right?"

Remember, Paul: Ignorance can be fixed. Stupidity is forever. And speaking of, the guest following you was... Marsha Blackburn, the Republican mall publicist from Tennesse. Because in the corporate media, knowledge followed by insanity is ... "balance"!

*It is difficult to get a man to understand something, when his salary depends upon his not understanding it. - Upton Sinclair.

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Protests... some violent... have been raging for a full week now across Europe in response to new austerity measures being imposed on a half dozen nations in the Eurozone.

(I joined two news clips, one a short mention of the protests in Athens the day after the election, joined by Wednesday's more extensive report on a massive protest in Madrid, Spain yesterday.)

A week ago Tuesday, labor unions in Greece paralysed the nation following a 48-hour strike protesting new austerity measures imposed upon them by the Troika (the IMF, the EC and the European Central Bank).

By Wednesday (a week later), the protests had spread across Europe into Italy, Portugal and Madrid, Spain where "hundreds of thousands" took to the streets protesting further budget cuts and tax increases that have already created rampant unemployment, crippling the economies of six European nations.

Photo slideshow here.

"Austerity" is destroying the European economy (and bringing down world markets with it), but wealthier nations like Germany & the UK (which grew their way out of the Recession by investing in green technology and infrastructure [pdf]), which are loaning these countries money through the IMF (International Monetary Fund), are more concerned with being paid back than aiding the economic recovery of those nations, and like the GOP in this country, they are wedded to the idea that "budget cuts" and "reduced spending" are the path to prosperity despite all evidence to the contrary. As the video notes, unemployment continues to rise in Spain, now approaching a stomach-churning 26%, while Portugal's "debt" is now 107% of the nations' GDP. Greece has seen its economy contract by 23% in just the past five years. Not exactly a recipe for growth that would make any lender comfortable with ever being paid back.

You may have noticed that the Stock Market took a nasty dive (313 points) the day after President Obama's reelection on November 6th and has been tumbling ever since. So naturally, some Republicans were quick to blame President Obama's reelection and the looming "fiscal cliff" for the sudden plunge on Wall Street. It's nonsense of course, but it makes the Right feel better to think Wall Street is terrified of a second Obama term.

Because if there's one thing Wall Street hates, it's "uncertainty"... and who knows what this "Obama" guy will be like as President? Am I right?

Winner-take-all American elections produce stark choices for voters and activists. You can have plenty of disagreements with a candidate on policies and still support them passionately because the alternative is so stunningly bad. The closer the election gets, the more the differences with your favorite candidate tend to get muted, because election choices are not about nuance.

Once the election is over, though, the policy debates within a political party come back to center stage. The debates we are beginning to engage in within the Democratic party right now will be partly around ideology, of course, as populist progressives and more Wall Street oriented Third Way Democrats duke it out. But the debates will also play out on another level as our party's optimists and pessimists begin engaging each other in earnest. Being optimistic or pessimistic isn't just about people's respective moods, or about making predictions. It has serious policy implications as well.

The optimists are the official party line. The Obama campaign message, Bill Clinton in his famous Democratic convention speech, and party spokespeople have been sending the message that in spite of the tough times we've had, things are going to get steadily better, that the foundation has been set for real prosperity. And I know from my conversations with administration economic policy people that they really believe it. One senior White House NEC official told me in the weeks before the election that his biggest political nightmare was Romney getting elected and then getting credit for the recovery that is soon arriving.

I sure do hope these optimists are right, it would be such a great thing to see. But there is another group of economic policy people that I know who are a lot less sanguine. They believe that the housing bubble that led to the financial collapse of 2008, the enormous and still mostly unchecked power of the biggest banks to distort and manipulate markets, and the complete mismanagement of economic policy in the Bush years have created long term structural damage different and far deeper than in past recessions. They fear that Europe is still a ticking time bomb, and that the problem of housing debt caused by the bubble's collapse is still a major drag on our economy. They believe that we have just gone through the first five years of a lost decade comparable to the Japan lost decade of the '90s (which Japan's economy still hasn't recovered from). And they worry that the austerity economics slowing Europe's economy to a crawl, the same policies the politicians here seem determined to head toward, will only make things worst.

The policy implications of this are huge. If you are an optimist, your tendency is to believe that no big new initiatives are needed, that we are on the right course and mostly need to avoid doing anything to screw things up. That doesn't mean there still aren't some tweaks needed here or there, some modest new policy innovations you want to tinker with, but it makes you far more reluctant to be bold or invest a lot of political capital in big new ideas. On the other hand, if you fear that we are smack in the middle of a lost decade, that the structural damage from the bubble and collapse are too deep for this to be just a little bit deeper recession than usual, you are more likely to push for major new ideas.

I am normally a more optimistic person, but in this case I tend to be more in the pessimists' camp. Partly that's because I view the world through the lens of the working class neighborhood I grew up in, and the lower income folks I cut my teeth organizing for when I was getting started in politics. The working middle class has been through hell the last 5 years, and outside of my friends in the auto industry, they have yet to see a lot of the benefits of what recovery we have been seeing. I firmly believe in bottom-up economics, that the engine of a strong economy is a growing and prosperous middle class, and I have yet to see that middle class make great gains. A side note here from the exit polls that I think is telling: 37% of Americans, overwhelmingly from the middle class, think inflation is the number one economic problem today. This is in spite of the fact that the overall inflation numbers have stayed low the last 4 years. The reason? Working and middle class folks have had wages that are flat or worse in recent years, while the prices that matter the most for them- gasoline, groceries, health care, college tuition- have continued to skyrocket. That's what they call middle class squeeze, and it's why Mitt Romney came close in this election despite having an economic platform and a you're-on-your-own values system that middle class voters thought was awful.

If the middle class engine isn't purring, the economic road to recovery will be bumpy at best. We need to do some big things to rebuild this economy for the long term. Policy makers need to take a look at bigger, bolder ideas like this Shared Prosperity plan. And knowing that the Republican house won't be likely to go along with things like that, the President needs to (a) not agree to job-killing Republican austerity demands, and; (b) be prepared to take bigger and bolder executive action. Example include signing executive orders on procurement and purchasing that force employers doing business with the federal government to pay better wages and benefits, and aggressively pushing bankers and Fannie/Freddie on mortgage writedowns.

Here's the other thing the President needs to think about: counting, as he has in the past, on the rosier economic scenario to come true has dangerous political implications. An economic slowdown and low growth rate over the next couple of years, whether because of Europe or anything else, is political danger at it's highest level after a campaign of emphasizing that everything was on the right track and moving forward. If you don't take any big steps and/or agree to the austerity the Republicans are pushing, you are making a very dangerous bet: the 2010 election might look good in comparison.

I sincerely hope my friends in the White House are right about the economy finally being on the right track. It would be a joy to see the country getting moving again. But the President needs to not assume the best, not be complacent in case that scenario turns bad. Revving up our middle class engine is long overdue.

Paul Krugman is doing the rounds on his book tour (I saw him here in Philadelphia Tuesday night—yeah, I'm a dork, I got him to autograph my copy) and here he is on Democracy Now! to pound the drum for government spending. Oddly enough, Krugman's been accused of supporting austerity cuts, which just isn't true. For an hour, all he did was talk about how the government needed to spend our way out of this.

AMY GOODMAN: Well, for the remainder of the hour, we’re joined now by one of the world’s leading economists, Paul Krugman. He is a Nobel Prize-winning economist, an op-ed columnist for the New York Times, also professor of economics at Princeton University and centenary professor at the London School of Economics. His latest book is End This Depression Now!

Paul Krugman, welcome back to Democracy Now!

PAUL KRUGMAN: Good morning.

AMY GOODMAN: How do we end this depression now?

PAUL KRUGMAN: Spend. I mean, it’s really—it’s actually—the economics is really easy. If we were to spend more money at the government level, and actually, at this point, largely, just rehire the schoolteachers, firefighters, police officers who have been laid off in the last several years because of cutbacks at the state and local level, we would be a long way back towards full employment. Other things to do, we could talk about monetary policy, debt relief for homeowners and students. But the core of it is, right now, there just is not enough spending, and we need the government, which can do it, to step in and provide the demand we need.

AMY GOODMAN: To say the least, you’re going against the accepted dogma on all television among the so-called leaders of our country. Spend? In a time when the government has the debt the size it has?

PAUL KRUGMAN: Right. So you can always say, "Oh, you know, $14 trillion." Everything about the U.S. economy is huge. Investors don’t think it’s a problem. Investors are willing to lend the U.S. government money at 1.8 percent interest. This is not the time. I’ll be all for worrying about the budget deficit once the—once the economy is off the bottom. But it is not off the bottom. We are in a depression. This is the time to spend.

AMY GOODMAN: Where do you get the money?

PAUL KRUGMAN: Borrow it, and then repay it later in better times, which is not at all—that may sound funny, but that’s exactly what we’ve done in the past. That’s exactly—how did we get out of the Great Depression? We got out of it by—actually, we got out of it before World War II, but thanks to the spending that preceded World War II, thanks to the military buildup. A little factoid people may not know, just this morning: Which of the major economies in the advanced world grew fastest in the first quarter of 2012? The surprise answer is Japan. Why is that happening? It’s because Japan is now spending a lot of money reconstructing after the tsunami. And that spending is driving rapid growth in Japan right now. We could all be doing that.

AMY GOODMAN: Let’s go to Mitt Romney for a moment, the presidential candidate’s economic plans and his critique of the Obama White House. This is what he said Wednesday at a campaign stop in Iowa.

MITT ROMNEY: President Obama is an old-school liberal whose first instinct is to see free enterprise as the villain and government as the hero. America counted on President Obama to rescue the economy, to tame the deficit and help create jobs. Instead, he bailed out the public sector, gave billions of your dollars to companies of his friends, and added almost as much debt to this country as all the prior presidents combined. The consequence is that we are now enduring the most tepid recovery in modern history.

AMY GOODMAN: Your response to Mitt Romney, Paul Krugman?

PAUL KRUGMAN: Boy, you know, don’t even know where to start. I mean, Romney’s technique is that—since basically every word he says is a lie, including "a," "and" and "the," you never know where to start. But this is—the idea that the—first of all, that Obama is responsible for the large deficits is just not true. It’s overwhelmingly the result of the Bush tax cuts, unfunded wars and a terrible economic crisis that began, of course, under Bush. The idea that the deficits are what’s holding us back is all wrong. The deficits are in fact what’s keeping us afloat. If we had tried to balance the budget, we would now be in a full, full-on replay of the Great Depression. So it’s all nonsense. It’s—and, by the way, the idea of Obama as somebody who governs from the left, I mean, Obama is—Obama’s positions are those of a moderate Republican circa 1992. It’s not—he’s not a leftist. What’s happening now is you have a radical-right Republic Party.

AMY GOODMAN: Well, let’s talk about the Republicans, to House Speaker John Boehner, recently addressed the Peter G. Peterson Foundation’s 2012 Fiscal Summit.

SPEAKER JOHN BOEHNER: The failure of stimulus, a word people in Washington refuse to say anymore, has sparked a rebellion against overspending, overtaxation and overregulation. Americans who take pride in living on a budget recognize that we can’t go on spending money that we don’t have. And our economy is stuck in large part because it is stuck with debt.

AMY GOODMAN: House Speaker Boehner also advocated making long-term changes to programs such as Social Security.

SPEAKER JOHN BOEHNER: We can eliminate all the unfunded liabilities in Social Security, Medicare and Medicaid tomorrow, and the effect on the congressional budget 10-year window could be minimal. That’s because changes to these programs take time and need to be phased in slowly.

AMY GOODMAN: That’s House Speaker Boehner, who has also just revived the debt ceiling—the debt ceiling threat.

PAUL KRUGMAN: Yeah, so—boy, again, let’s leave aside the long-run budget stuff for the moment, and let’s just talk about—the idea that stimulus failed, it was never tried. Take a look at the actual track of government spending in the United States, and take into account the state and local governments as well as the federal, and what you see is, far from actually having a big increase in spending, we’ve actually had much lower. We’ve had austerity in the face of a recession, in a way that we have never had before since the 1930s. So it’s actually been the reverse.

And look, we’ve just done an experiment with what happens if you cut government spending sharply in the face of a depressed economy. That’s what’s been going on in Europe. It’s been going on in an extreme form. I’ve been saying, actually, we’ve basically had a large-scale human experiment, the kind that is banned under Princeton University rules, going on on the people of Greece, Spain, Portugal and Ireland. And the results are clear: it’s disastrous. It leads to very, very sharp economic contractions. Here, we’re having a minor version, though still terrible, of the Great Depression; there, they’re having a full-on replay of the Great Depression.

AMY GOODMAN: Contrast it with Argentina.

PAUL KRUGMAN: Ah, Argentina is an interesting story, because they broke all the rules. There are two countries that we talk about now, actually, people like me. One is Argentina. Argentina had something that was a little bit like the euro. They had a supposedly permanent commitment: one peso, one dollar. Became impossible, fell apart. There was a period of about six months of economic chaos, following, to be honest, then a rapid recovery. Argentina bounced back strongly because they were competitive again. The weaker peso made them able to export. You know, and they defied all the predictions of ruin.

The other story, which is more contemporary, is Iceland, which, in effect, did the same thing. Iceland, because of—the funny thing is, Iceland, the sheer scale of the financial disaster meant that they could not be orthodox. It was not possible. So they were forced to allow a devaluation, have some temporary controls on capital, repudiate some of the debt their bankers ran up. Iceland has a lower unemployment rate than we do right now. So, those are the stories that we should be looking to as examples that say this does not have to be happening.

AMY GOODMAN: So, right now, President Krugman—and that’s not making a mistake—what do you do starting today?

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"I feel stupid," someone said the other day. "I consider myself well-informed, but I have no idea what the term 'austerity economics' really means."

Actually it's not that complicated, and most of the lesson plan can be found in today's headlines.

We'll explain austerity to you in six steps, and we promise it it won't take more than 900 words. Since adults read an average of 250-300 words per minute - and we know all of you are above average - our little course shouldn't take more than three minutes.

It's certainly worth knowing. Despite its many failures, "austerity economics" keeps remaking - and unmaking - the global economy. The only disagreement at this weekend's Republican debate was over which candidate would push austerity more aggressively. And austerity dominated the political agenda last year - "Deficit Commission," anyone? - until Occupy came along.

Merriam-Webster named "austerity" the "Word of the Year" for 2010. But like the monster from a 1950's science-fiction movie, it just keeps on growing. This week alone the name was invoked in government houses from Athens to Lagos.

What is this creature called "austerity," and why does it still hold so much power? If you've got three minutes, let's get started.

1. What is it?

The Longman Dictionary of Contemporary English defines "austerity" as "when a government has a deliberate policy of trying to reduce the amount of money it spends."

Wikipedia calls it "a policy of deficit-cutting, lower spending, and a reduction in the amount of benefits and public services provided," adding that it's "sometimes coupled with increases in taxes to pay back creditors to reduce debt."

Got that? Austerity backers want government to spend less on benefits and public services, and to pay back its creditors more quickly. Higher taxes aren't part of the plan and they're strictly optional.

2. What's austerity supposed to accomplish?

Austerity advocates don't just see lower deficits and reduced debt as tools to promote long-term economic health. They consider them ends in themselves - sometimes even as moral values.

Many austerity advocates see government spending as inherently evil. That goes for all government spending, including police, teachers, nurses, and firefighters.

Sure, some of them will admit there can be necessary evils or useful evils - usually weapons procurement or law enforcement. But spending is always evil.

Other people aren't philosophically opposed to government spending, but have been convinced that it has become unaffordable today.

3. What's the theory behind austerity economics?

To answer that, it's important to understand that the economics profession has been systematically taken over by well-funded conservative academics. They've created elaborate theoretical constructs to prove that government spending is economically destructive.

These include theories like 'Barro-Ricardo equivalence,' which says people won't spend money when they know their government's incurring debts they'll have to pay someday. Conservative economists like Robert Barro insist this is true even in times of widespread unemployement, like now, and argue against stimulus spending to create jobs.

Oddly, they find this theory more compelling than the idea that people aren't spending money because they don't have jobs.

Then there's supply-side economics, which argues that the best way to grow the economy is by cutting taxes. That means smaller government. Supply-siders also rely on the "Laffer curve," which says people will stop investing, producing, and creating jobs if taxes are too high.

Austerity advocates also argue that international markets will lose confidence in governments if they don't curb spending and will charge them higher interest. So they even push cuts in Social Security, which doesn't even add to the deficit, because macroeconomists consider it 'government spending.'

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Many thanks and much love to the bloggers who guested here while I was running around Europe for the past ten weeks. And...HERE THEY ARE!

Vagabond Scholar: The Rich and Wealthy (Now in Video!)

The Reaction: Yes, Nixon was a bigot. What else is new?

Mock, Paper, Scissors: Happy Zappadan, um, like what day is it?

The Satirical Political Report: John Boehner Breaks 'Breakdown Record' on 60 Minutes

PERRspectives: Palin Endorses Medicare Rationing: More than a little ironic: Palin Endorses Medicare Rationing

My friend Swimgirl also chipped in with two weeks of stellar service, and the multitalented Blue Gal was, as always, indispensable.

When Ireland made the decision to protect all of its banks from losses and cover those losses by imposing austerity measures in 2008, Paul Krugman made hash of the conservatives' argument for adopting that policy. As it turns out, he was right.

Ireland relented on Sunday and formally applied for a rescue package worth tens of billions of dollars, after months of trying to survive its financial crisis with austerity measures and strict budgetary planning.

European Union officials, who had been pushing Ireland to accept help, quickly agreed to the request, committing a staggering amount of funds to an ailing member for the second time in six months.

Ireland's fiscal crisis, like ours, has a mortgage meltdown as its root cause. However, the decision to impose severe austerity measures, including a big tax hike on Irish workers while insisting that the corporate tax rate remain one of the lowest in the world has not proven itself to be effective.

An Irish bailout would mean humiliation for the government ahead of possible national elections early next year. Ireland would lose some control over its finances in return for loans, which could mean being forced to give up the country's rock-bottom corporate tax rate – a key attraction to businesses that annoys other EU countries that have much higher rates.

Because of the concern over panic and contagion, Ireland will request the bailout, and receive it. They should also raise those corporate tax rates sooner rather than later. Enough is enough. It's proven time and again that low corporate tax rates will not sustain economic growth. Ireland's austerity failure stands as a solid argument against conservative austerity nonsense here, there, and elsewhere.

darkblack: 5 Is The Magic Number

Faithful Progressive : George Lakoff on Obama, Tea Parties, and the battle for our brains

The Rude Pundit: What is enhanced interrogation tecnique number 12?

MAL Contends: Gates calls Europe's anti-war mood a danger to peace

James Wolcott: The lunatics have taken over the salon

Newshoggers: Joseph Stack, frustrated American

From NOW on PBS--Power Struggle. More available here.

This is what I hate having to explain to my relatives and friends abroad in Europe about politics in the US. We know that global warming is a fact. We know that our actions, if they didn't cause global warming, definitely exacerbate it. We know that we must reduce our dependency on oil, for both ecological and political/strategic reasons. And yet, what we are able to do is hampered so predictably by the Republican party:

Here we go again. James Inhofe, the most prominent climate change denier in the United States Senate, has concocted a new and innovative strategy to thwart the Clean Energy Jobs and American Power Act. To wit, he and his Republican colleagues on the Environment and Public Works Committee have worked up a plan to simply not show up for next week’s markup:

But Boxer cannot hold the markup unless at least two Republicans show up, and EPW ranking member James Inhofe (R-Okla.) signaled that he has unanimous support among the panel’s minority members to boycott the session until they get more data on the legislation from U.S. EPA and the Congressional Budget Office.

Inhofe said he will wait for Boxer to file an official notice of the markup — expected today — before responding with his own declaration of the GOP’s markup strategy.

“As soon as we find out what her announcement is and what she wants to do, we’ll have our response,” Inhofe told E&E last night. “We’ll have our unanimous expression ready.”

Sadly, this is a continuation of the GOP’s longstanding strategy of delaying clean energy legislation:

• As Chairman Markey shepherded his American Clean Energy and Security Act through the House Energy and Commerce Committee, Republicans employed multiple parliamentary tricks to — as Politico put it — “nitpick the bill into legislative oblivion.” Brian Beutler called these nefarious stall tactics, and noted that Democrats responded by hiring a speed reader.
• Last year during the debate over the Climate Security Act, Minority Leader Mitch McConnell demanded that the entire 491 page bill be read on the floor of the United States Senate. A strategy memo was leaked at the time detailing the Republican strategy for delaying the bill as much as humanly possible.

While this Republican obstructionism is not necessarily surprising, it is especially egregious this time. Here are a few things about this episode that struck me:

1. Despite the fact that Senator Inhofe has been working to orchestrate this obstruction for a week now, Republicans are pretending the effort is being led by the two moderate Republicans on the committee. Politico handled the stenography.

The Politco, acting as a mouthpiece for the Republican Party? Say it isn't so!

Can you imagine how much further we'd get in this country if we didn't have so many idiots in office?