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The awful aughts

dow10year.jpg

Paul Krugman pens the first interesting decade retrospective I've read:

[F]rom an economic point of view, I’d suggest that we call the decade past the Big Zero. It was a decade in which nothing good happened, and none of the optimistic things we were supposed to believe turned out to be true.

It was a decade with basically zero job creation. O.K., the headline employment number for December 2009 will be slightly higher than that for December 1999, but only slightly. And private-sector employment has actually declined — the first decade on record in which that happened.

It was a decade with zero economic gains for the typical family. Actually, even at the height of the alleged “Bush boom,” in 2007, median household income adjusted for inflation was lower than it had been in 1999. And you know what happened next.

It was a decade of zero gains for homeowners, even if they bought early: right now housing prices, adjusted for inflation, are roughly back to where they were at the beginning of the decade. And for those who bought in the decade’s middle years — when all the serious people ridiculed warnings that housing prices made no sense, that we were in the middle of a gigantic bubble — well, I feel your pain. Almost a quarter of all mortgages in America, and 45 percent of mortgages in Florida, are underwater, with owners owing more than their houses are worth.

Last and least for most Americans — but a big deal for retirement accounts, not to mention the talking heads on financial TV — it was a decade of zero gains for stocks, even without taking inflation into account. Remember the excitement when the Dow first topped 10,000, and best-selling books like “Dow 36,000” predicted that the good times would just keep rolling? Well, that was back in 1999. Last week the market closed at 10,520.

So there was a whole lot of nothing going on in measures of economic progress or success.


Graph: Google Finance's 10-year chart of the Dow.

By Ezra Klein  |  December 28, 2009; 9:26 AM ET
Categories:  Economy  
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Comments

I wonder with this level of performance from a Republican administration and a Republican congress why any wealthy person (or working person) in their right mind would vote for any "Republican".

Posted by: MurphyMaloney | December 28, 2009 10:17 AM | Report abuse

the contrast with the '90s is, of course, breathtaking, but the question is whether the '00s were so bad merely because republican policies dominated or whether something more fundamental was in play.

i, for one, don't know the answer.

Posted by: howard16 | December 28, 2009 10:56 AM | Report abuse

My favorite line: "And as for the Republicans: now that their policies of tax cuts and deregulation have led us into an economic quagmire, their prescription for recovery is — tax cuts and deregulation."

Krugman really knows how to speak to his readership. Maybe the free market fairy will bring us good stuff in the 2010s. Let's all pray harder!

Posted by: slag | December 28, 2009 11:05 AM | Report abuse

I know Klein is merely a blogger, and Krugman something of a charlatan, but shouldn't a decade retrospective take place at the end of the decade, i.e., after one more year?

Posted by: msoja | December 28, 2009 11:19 AM | Report abuse

fabulous, msoja! right up there with your usual distinguished insights! do you have an actual comment to offer? i mean, being the big, tough, brave keyboard commando that you are?

Posted by: howard16 | December 28, 2009 11:22 AM | Report abuse

msoja: Although there's been no real consensus on what this decade should be called, nobody has ever called it the 201st decade. A decade is simply a period of ten consecutive years, and therefore in principle ANY ten years is technically a decade. And by convention, a decade refers to ten years which share the same first three digits, rather than by trying to break the years from the year 1 into ten year periods. You can rightly be pedantic about the 20st century ending in 2001, but saying that the 1990s ended in 2000 is just wrong.

Posted by: usergoogol | December 28, 2009 11:31 AM | Report abuse

It's about precision and accuracy. At some point, the abuse of those two essentials descends into dishonesty, a line Klein and Krugman routinely cross, sloppiness and vagueness the little hobby horses that get them there.

Posted by: msoja | December 28, 2009 11:58 AM | Report abuse

For instance, just today, Donald Luskin's details yet another instance of Krugman's sloppiness/imprecision descending into ignorance/dishonesty.

http://www.poorandstupid.com/2009_12_27_chronArchive.asp#2317176819072966497

Krugman is a running gag over there, and for very good reason.

Klein is cut from the same crooked cloth.

Posted by: msoja | December 28, 2009 1:04 PM | Report abuse

ohmigosh, msoja, you're even more of a buffoon than i realized.

"precision and accuracy" are not at stake here: whether you realize it or not, standard usage is to call each named decade period the years of xx00 - xx09. throughout this great land of ours, newspapers and magazines and websites have been running surveys of the best this or that of the decade precisely because this is standard usage. so your core complaint is nonsensical.

but then, then you bring up donald luskin as your fact witness! a more moronic choice could not possibly be imagined.

donald luskin, after all, is the guy who insisted there was no housing bubble.

donald luskin, after all, is the guy who insisted that it was a great time to buy stocks right through the epic decline from dow 14,000 to dow 6500.

donald luskin, after all, is the guy who having incorrectly insisted that it was a great time to buy stocks right through the epic decline from dow 14,000 to dow 6500, then pivoted and insisted the actual great time to buy stocks (dow 6500) was a terrible time to buy stocks!

donald luskin, after all, is the guy who in his incredibly lunk-headed quest to prove that he is smarter than paul krugman, consistently makes fundamental factual errors (like confusing monthly and annual rates, things like that).

anyone who cites donald luskin as a fact witness is, by extension, unworthy of being listened to.

Posted by: howard16 | December 28, 2009 1:23 PM | Report abuse

I guess howard16 couldn't refute the points made at the link provided, so launched into a dither of ad hominem.

Undoubtedly, Luskin has made mistakes. We all do. What we're talking about with the likes of Krugman and Klein, however, is a consistent pattern of being sloppy with or utterly disdainfull of the truth. The link I gave above is a case in point (not that that particular one involved Klein, but one needs only go back a week or so to the minimum wage discussion for similar "stupidity" involving our Val).

Ta.

Posted by: msoja | December 28, 2009 9:40 PM | Report abuse

msoja, nice cheap try, but it doesn't work! i don't waste my time "refuting" donald luskin because he's a proven imbecile, a mendacious hack. citing him as a fact reference is telling.

when you have a real fact witness or a real case, bring it on, msoja, but donald luskin is never going to provide one: monkeys banging away at typewriters have a better shot at being correct.

Posted by: howard16 | December 28, 2009 10:54 PM | Report abuse

In the link I gave, Luskin cited someone else. How about 'aving a go at that other person? Or is ad hom all you do?

Posted by: msoja | December 28, 2009 11:46 PM | Report abuse

A post at von Mises, today, rips Krugman for other sloppinesses and dishonesties.

http://mises.org/daily/3942

Perhaps howard16 can tell us what a rake von Mises was.

Posted by: msoja | December 29, 2009 10:52 AM | Report abuse

Oops. Wrong link.

http://mises.org/daily/3981

Better.

Posted by: msoja | December 29, 2009 10:53 AM | Report abuse

msoja, i wasted 5 minutes of my life looking at the moronic luskin link you posted: you call this useful? the clown that luskin quotes can't even write a coherent english sentence; he's so caught up with his hysterical accusations of "socialism" that you can literally see the spittle drooling from his lips to the keyboard.

and that was before i got to where this raconteur wanted to count out-of-pocket as an insurance company payment, at which point i said that my original assumption was correct: luskin is a moron. anyone he quotes is a moron. and anyone who cites luskin is a moron as well. what a stupid piece of crap that was.

so now you want me to waste even more time? ok, just to be a sport, i read your second link, which at least is written in the english language by someone who isn't foaming at the mouth.

on the other hand, he is someone who believes that michael milken wasn't a criminal, so we do have to wonder about his judgement!

so let me say that what you've linked us to here isn't a takedown of paul krugman, despite what the writer thinks: it's an alternate, incomplete view, as sketchy and schematic in its own way as krugman's, but with less behind it. his essential argument appears to be how can deregulation have caused any problems? democrats favored it! the real problem was moral hazard!

which isn't exactly accurate (the current unpleasantness is a direct and total outcome of excessive leverage in the unregulated shadow finance sector), but at least it's not idiotic drivel the way the luskin naterial is.

and it certainly doesn't prove that the person who has been citing luskin in this little back-and-forth (that would be you!) is, in fact, correct in his critique of ezra and krugman.

Posted by: howard16 | December 29, 2009 11:04 AM | Report abuse

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