The economic consequences of the putsch: very far from the most important thing, but the markets seem remarkably sanguine given what just went down. Bonds, in particular, are signaling new optimism about recovery 1/
Is this crazy? Not really. For one thing, last week also included the D upset in GA, which greatly increased the odds for adequate economic relief. Predictit on Senate control 2/
Also, political turmoil, even violent, doesn't have much economic impact unless it turns into actual civil war. Race riots and Vietnam coincided with a middle-class boom 3/
Noah Smith makes illuminating and disturbing parallels with Japan in the 1930s, rife with right-wing violence and assassinations 4/…
What he doesn't note is that as a result of expansionary monetary and fiscal policy the Japanese economy actually did well through that period 5/
So this is a nightmare, but it's a political nightmare. The economy will probably do just fine 6/

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More from @paulkrugman

13 Jan
Exactly. The most important reason Ds got shellacked in 2010 was that the Obama stimulus was underpowered given the severity of the crisis, largely because of the desire to be bipartisan and not use reconciliation 1/
Not hindsight. What I wrote in January 2009… Image
Voters don't care, or by and large even know about, process. They won't be outraged if Biden uses aggressive tactics to enact stimulus. They will, however, punish his party if they don't see concrete economic gains 3/
Read 4 tweets
13 Jan
Scott Sumner has an interesting (to me at least) podcast with David Beckworth on the "Princeton School of macroeconomics," which included yours truly and a guy name Ben Bernanke (whatever happened to him?) 1/…
I am still proud of the 1998 paper that sort of started this. It holds up pretty well — and it was also an illustration of the case for economic modeling 2/…
I began working on this issue because I was disturbed by Japan's apparent inability to break out of deflation. I started with a strong intuition that the Bank of Japan just wasn't trying hard enough — that if it just printed enough money that would work 3/
Read 5 tweets
11 Jan
A really good question. Someone should do a careful archival study of when pedophilia became the go-to accusation; did it start with Q or was it already there? But in a way it fits a pattern 1/
Hofstadter's "The paranoid style" noted the preoccupation of conspiracy theorists with sex 2/…
Relevant passage 3/
Read 5 tweets
10 Jan
What's so astonishing about this is that it's not responding to any real grievances. No, the election wasn't stolen. No, Dems aren't Marxists — or pedophiles. No, BLM didn't go on a deadly rampage (but rightists did). And many of these people have fairly comfortable lives 1/
And we're not like Mussolini's Italy or Weimar Germany, bitter over a catastrophic war and, in Germany, a catastrophic depression (no, it wasn't the hyperinflation that did it — it was the gold standard) 2/
The best guess is that it's about race — about white people infuriated by growing diversity. And maybe the GOP's cynical cultivation of racial hostility in the service of plutocracy encouraged it 3/
Read 7 tweets
10 Jan
So all the Trumpists seem far more upset about losing Twitter followers than they are over a violent assault on the US Congress. This isn't just digusting; it's terrifying 1/
We're still learning about how the Capitol got stormed, but it seems obvious that responsible officials more or less deliberately avoided providing adequate security 2/…
Given that, the absence of any sign of remorse or regret is frightening. Many bad things can happen over the next 10 days, up to and including violent disruption of the inauguration itself. 3/
Read 4 tweets
9 Jan
For all the horror of this past week, this may matter more for America's future. Aggressive fiscal policy will be crucial not just for American families but for the future of American politics 1/
Republicans did better in November in part because some people — including nonwhite voters — paid more attention to the tight pre-pandemic job market than they did to Trump's fanning of hatred 2/
Democrats should do all they can to boost the economy and deliver tangible gains to American families looking forward — mainly because it's good policy, but also because it's good politics. And when the usual suspects bray about deficits, tune them out 3/
Read 4 tweets

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