John B. Judis

Paul Krugman vs. Joseph Stiglitz

How income inequality could be slowing our recovery from the Great Recession

Given today’s report of economic contraction, it’s worth tuning in to a recent debate between liberal economists Joseph Stiglitz and Paul Krugman.

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The phrase "We the People" has divided the country since the original debate over the Constitution.

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When Barack Obama nominated former Senator Chuck Hagel to be Secretary of Defense, I assume that he knew what he was getting into. The debate over Hagel’s nomination won’t be about whether he is qualified to run the Pentagon and to negotiate budgets with Congress, but about Hagel’s views on Israel and Iran. Initially, some of Hagel’s critics charged that he was an anti-Semite. But these charges rightfully met with derision.

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It is tempting, in view of Barack Obama’s re-election, to look back on his first term as a rousing success, but it was not. Obama got his initial stimulus and his healthcare bill, but he made political errors in the first two years that helped Republicans retake the House and a majority of governorships in a crucial redistricting year. And in 2011, he made back-room concessions on the budget that seriously imperiled the economic recovery. So I still don’t share Jon Chait’s halcyon view of the Obama presidency.  But Obama learned from the difficulties of his first term.

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If you look at the House Republican vote, you find regional divisions that mirror the Red-Blue divisions in the national electorate. All in all, 85 Republicans voted for the Senate resolution and 151 voted against it. The opposition was centered in the Old South. Southern Republicans opposed the measure by 83 to 10. The delegations from Alabama, Mississippi, Georgia, Virginia, Tennessee, and South Carolina were unanimously opposed.

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Republicans want to reduce the size of the federal government, and they won’t take no for an answer. “I just want to shrink it down to the size where we can drown it in the bathtub,” Grover Norquist famously declared. And in negotiations over the fiscal cliff, they have insisted on cutting spending rather than raising taxes. “The President wants to pretend that spending isn’t the problem,” House Speaker John Boehner has complained. Democrats, for their part, have responded defensively.

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The former Republican senator deserves a fair shot to become the next Secretary of Defense.

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As the negotiations over the fiscal cliff continue, President Barack Obama has insisted on retaining the Bush tax cuts for the middle class, while letting the cuts for the wealthy lapse. Republicans have insisted that raising taxes on the rich would cost jobs – as many as 700,000, according to House Speaker John Boehner. Obama, for his part, says that a tax increase would not cost jobs; that it would help the economy by reducing the deficit; and that it would be fairer than imposing new taxes on the middle class.

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Egyptian Foreign Minister Mohamed Amr has announced a ceasefire in the war between Israel and Hamas. It's good news that the fighting will stop. But aside from the immediate cessation of hostilities there's little to cheer about. Here are three reasons why in the absence of considerable outside intervention, it's only a matter of time until war breaks out again. A comprehensive peace agreement is not in sight: Peace in the former Palestine rests not only on a permanent ceasefire between Israel and Hamas, but on a comprehensive agreement between the Israelis and the Palestinians.

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