Paul Krugman: Romney Victory Could Mean 'Double-Dip Recession'

 By Bonnie Kavoussi/Huffington Post

If Mitt Romney is elected president, then the economy may experience another recession, according to Paul Krugman.
"I think there's a real chance that he'll manage to pursue a policy in the first couple of years that simultaneously blows up the deficit and depresses the economy," the Nobel Prize-winning economist said on HuffPost Live Wednesday. "Tax cuts for the rich, who won't spend them, and slash spending for the poor and the middle class, who will be forced to cut back. And so we end up managing to have a simultaneous deficit explosion and double-dip recession."
Tax cuts for the rich do not help economic growth, according to two recent studies, and some analyses have found that Romney's proposed tax cuts would help the wealthy the most. Romney also has promised to slash government spending by roughly one-fifth, which economists say would hurt consumer demand. But it is unclear whether Romney would be able to cut government spending so dramatically if Democrats maintain a majority in the Senate.
Krugman said that over the long term, Romney's economic policies could lead to a "depression," saying: "It's the Republican policies that are much more likely to make us end up like Greece."
Greece currently is experiencing a severe recession. One in four Greek workers are unemployed, including one in two young workers. Greece has been relying on bailouts to avoid completely defaulting on its debt.
At the final presidential debate Monday, Romney accused President Barack Obama of pursuing policies that would lead to a Greek-like debt crisis in the U.S. But that analysis failed to take into account that the U.S. budget deficit is shrinking, and that the Federal Reserve can weaken the U.S. dollar when necessary, while Greece does not have that same option for the euro.
"I'm not seeing a lot of evidence that he [Romney] really does understand it [economics]," Krugman said on HuffPost Live. "People say he's a smart guy, but it's not visible in his statements, and it's not visible in his off-the-cuff reactions either."

"I don't have a lot of hope that he actually would know what he's doing at all or that he would even know how to pick the right people," Krugman added.

Fox Forgets Its Role Downplaying Magnitude Of Recession

by Jeremy Holden/Media Matters

After years of downplaying the magnitude of the economic crisis President Obama inherited, Fox News is amplifying dishonest criticism that Obama forgot the recession, putting a sinister spin on recent comments the president made warning that "people forget the magnitude" of the financial crisis and recession and his acknowledgement that "[s]ometimes, I forget."

This criticism serves to deflect attention from Obama's actual economic record -- which includesrescuing the auto industry, pushing for a recovery plan that economists say added millions of jobs, and overseeing an economy that has added private sector jobs every month for more than 2 years.

The manufactured outrage is in response to a speech in Seattle during which Obama said:

OBAMA: It was a house of cards, and it collapsed in the most destructive worst crisis that we've seen since the Great Depression. And sometimes, people forget the magnitude of it, you know? And you saw some of that I think in the video that was shown. Sometimes, I forget.

In the last six months of 2008, while we were campaigning, nearly 3 million of our neighbors lost their jobs. Eight hundred thousand lost their jobs in the month that I took office. And it was tough. But the American people proved they were tougher.

To discuss those comments, Fox News turned to Karl Rove, a key Bush adviser with more than a passing interest in reassigning blame for the historic economic crisis brought about during the Bush administration.

Rove proceeded to accuse Obama of forgetting about the recession.

As Greg Sargent pointed out, what Obama actually said was "that sometimes he forgets about the magnitude of the crisis that hit before he took office and continued into the early months of his term."

The magnitude of that crisis was not fully understood at the time Obama took office. At that time, the Commerce Department estimated that the economy contracted by 3.8 percent. It was not until August 2011 that that figure was revised to show that the economy inherited by Obama was actually shrinking much more rapidly -- by a historic 8.9 percent.

Few entities have done more to obscure the magnitude of the economic crisis Obama inherited than Fox News. These efforts are perfectly captured by comments Fox host Gretchen Carlson made in June 2011 suggesting that it was somehow inaccurate for Obama to claim he inherited a recession:

CARLSON: How long can you continue to say that the hard hit recession of 2007 moving into 2008 is something that they inherited?

The Fox News campaign against the Obama administration is based on the false premise that the economy is not better today than it was four years ago. But the economy is objectively and quantifiably better than it was four years ago.

The only way Fox can wage its campaign against Obama is by distorting the record and make sure voters forget where we were four years ago.