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The Washington Post's Ruth Marcus, who has already shown she'd rather bash unions than get her facts straight was at it again on during the panel segment on ABC's This Week. Marcus described anyone who is opposed to the report issued by the Catfood Commission's co-chairs as "behaving incredibly childishly" and thinks we should be listening to the adult in the room, Mr.-We-Need-Some-Shock-Therapy Kent Conrad.

Thankfully Paul Krugman was there for some push back but he was outnumbered by the wingnuts on the panel three to one.

AMANPOUR: The deficit commission, we had two members just -- just -- just earlier. You've written very, very strongly about a lot of the proposals, among other things, saying this proposal clearly represents a major transfer of income upward from the middle class to a small minority of wealthy Americans.

KRUGMAN: Yes. I think the most important thing to understand is that the commission did not do its job. It has a bunch of ideas for reducing the deficit, some good, some really bad, some of them not ideas about reducing the deficit at all.

But, you know, anybody, it's easy to come up with ideas. I can come up with ideas for reducing the deficit while padding my tummy and rubbing my head, you know?

AMANPOUR: What should they have done?

KRUGMAN: What they -- what they were supposed to do was produce something that was good enough to have an up-and-down vote, something that a lot of people could sign on to, and they did not do that.

In particular, now, leaving aside the distributional stuff -- which is awful -- the core of the deficit problem, everybody who's serious knows the core is health care costs, and you have to reduce health care costs, not reduce them, but reduce the rate of growth. The way you have to do that is by deciding what you're going to be willing to pay for.

They completely wimped out on that. They simply assumed they were going to reduce the rate of health care cost growth. And they said, how are we going to do that? By monitoring and taking additional measures as necessary.

So the report was completely empty on the only thing that really matters and then had a whole bunch of things which involved large tax cuts for the top bracket. What on Earth is that doing in there?

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This had to be one of the more irritating segments I've had the unfortunate circumstance of watching on Morning Joe in a while. First they went about trashing the students protesting tuition fee hikes in London and those silly Socialists in Europe who are all just used to sucking off of the government teet. Then they proceeded to trashing anyone who's dared to speak out against the early report released by the president's Catfood Commission co-chairs Bowles and Simpson.

How dare those reactionaries Nancy Pelosi, Paul Krugman and Richard Trumka speak out against those good reasonable adults who want to raise the retirement age and balance the budget off of the backs of the elderly, the middle class and the poor. The nerve of them!

Update: And just one last word on this panel discussion as an afterthought. Did anyone else feel like they were watching a bunch of high school kids debate policy when it came to their reaction on the protests in London? Yeah Mika, destroying the social safety net and the government's former position that education matters beyond high school if you want to retain a middle class and those students being angry that the government has decided that doesn't matter any more and protesting is just like your brother pulling a stunt where he imitated a cop and got in trouble for it. That's exactly the same thing and just kids being kids who need to be disciplined for their bad behavior. Jebus these people make my head hurt.

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CNN's Fareed Zakaria sat down with economists Paul Krugman and Raghuram Rajan, and both men painted a very gloomy picture (to say the least) for what kind of shape the United States economy is going to be in if all we have is gridlock for the next two years, which Krugman believes is inevitable.

Krugman also thinks that we'll be facing at least one government shutdown in the next two years. And of course as Eric Cantor already said today, if that happens the Republicans will try to make political hay out of it and put the blame on President Obama.

Anyone who didn't realize what they were voting for when they put these TeaPublicans back into office are going to be finding out the hard way very soon. And if the Democrats don't start acting like they care about the working class in this country instead of catering to corporate "centrists" and Blue Dogs, they're not going to fare much better. It would be nice to see some Democrats who aren't Republicans with a "D" behind their name trying to get some of these House seats back we lost this time around. I know this blog and Blue America will be doing their part to see that it happens.

Transcript via CNN.

ZAKARIA: Paul Krugman wrote before the election that if Republicans took control of even one House of Congress it would be, quote, "terrible," unquote. Well, of course, that's what happened on Tuesday, so how terrible will it be?

"New York Times" columnist, Nobel Prize winner, Princeton professor Paul Krugman joins me now, along with Raghuram Rajan.

Rajan was the chief economist of the IMF, is now a professor at the University of Chicago Booth School of Business, and his last book, "Fault Lines" won the "Financial Times'" Business Book of the Year Award. He and Paul Krugman have sparred in blogs and essays, but I believe this is the first time they will do so in person, if they do indeed spar. Paul Krugman, what is going to be so terrible about the Republicans coming to power?

PAUL KRUGMAN, THE NEW YORK TIMES: Mostly - well, first of all, there's almost likely, almost certain to be extreme clashes. I would put pretty heavy odds on - on at least one government shutdown during the next two years. This is going to be - you know, we're looking back fondly on the statesmanship of Newt Gingrich.

But, beyond that, it means no action. It means that we're probably going to see unemployment benefits, extended unemployment benefits, expire at exactly the moment when that would do the most harm. It means no chance of doing anything, really, to tackle the economy's problems.

So we're basically going to be uber -- Herbert Hoover-ing our economic policies at exactly the worst moment for - for the American public.

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George Will can never resist taking a shot at unions at every opportunity and this weekend's panel segment on This Week was no exception. While defending the Chamber of Commerce and their donations from foreign companies, Will compares that to international unions collecting membership fees from workers overseas.

Yeah, that's exactly the same George. Those unions that are representing workers in other countries like Canada aren't pushing to outsource American jobs. And as Greg Sargent at The Plum Line pointed out, "unions disclose far more about their funding than other political groups do."

Sadly ABC has kept Will as part of their regular Sunday lineup. I was hoping once Christiane Armanpour took over as host we'd see a little less of him.

AMANPOUR: Well, that's interesting, because we're reading and we're seeing that, in fact, a lot of these new candidates who are unknown -- I mean, we don't really know about them, they haven't been part of the political system -- and they're not doing a whole lot of traditional retail politics. People like Christine O'Donnell, it's said, is not seen much on the campaign trail. But the question really is, they apparently don't really need it, because the modern way of money and campaign finances and things coming in by Internet are -- seems to be replacing that need.

KRUGMAN: Well, we have to be a little bit careful here. There is money coming in through the Internet. That certainly played a role in some of these primary upsets. But if we're looking about the general election, we're looking at huge amounts of money being poured in from the usual suspects, from the Koch brothers, from the -- you know, there's probably going to be more corporate money -- I'm sure there'll be much more corporate money in this election than in any midterm election before in U.S. history. So we can talk about all the grassroots stuff, but when it comes to the actual election that's being held in November, this is not going to be the little guy getting into politics. This is going to be the big guys, the billionaires.

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From CNN's new series Parker Spitzer, Paul Krugman says it's time to borrow and spend and worry about the deficit after the economy recovers. You can read more from Krugman on what's behind the unemployment numbers here as well.

Unemployment Dilemma Goes Beyond Supply and Demand:

Mike Konczal, a fellow at the Roosevelt Institute, recently posted an excellent piece on his blog in which he examined why unemployment remains so high. He points out: “There are two theories at work. The first is a story of aggregate demand. The second theory is one of a mismatch in skills.”

What he doesn’t say explicitly — although it’s clearly implied — is that these two theories have very different policy implications. [...]

The answer is to look at the evidence — specifically, to ask whether what we see bears the signature of one story or the other. The aggregate demand story suggests that we should see depressed employment in all industries as workers of every skill type face a poor job market. The mismatch story says that we should see surpluses of labor in some places and shortages in others.

And Mr. Konczal shows that the data overwhelmingly fits the demand story, not the mismatch story. Every major industry in the United States has seen a rise in involuntary part-time work; so has every key occupation. There is no hint that labor in any sector is in short supply. Read on...

Full transcript via CNN below the fold.

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Paul Krugman and Douglas Holtz Eakin squared off on the PBS Newshour on whether Ben Bernake and the Fed have been doing enough to keep our economy from running off into a ditch. As of now it looks like all Bernanke is worried about is keeping interest rates down and as Paul said "Do we have to have a whole Great Depression to get the Fed moving?" I hope not but Bernanke's lack of action is making me wonder as well.

Paul has more in his column at the NYT's here -- Invisible Cavalry To The Rescue!. Right now I share his lack of optimism. The ones who could actually do something to get the United States economy back on track all look like they couldn't care less if they turn us into a third world country whether it be the Fed or the Congress.

JEFFREY BROWN: Paul Krugman, I will start with you. You wrote in your column today, this isn't a recovery in any way that matters. So, did you sense today that Ben Bernanke agrees and is taking the right steps?

PAUL KRUGMAN, columnist, The New York Times: Well, he may agree, but he's not taking the right steps. I mean, there was no sense of urgency in his talk. Yes, he said we will do something if the situation warrants. But here we are. You know, this is -- we're now 32 months into this slump. Unemployment is disastrously high. Growth, we -- the economy needs to grow about 2.5 percent annual rate just to keep unemployment from rising. It's not doing that.

What would it take to justify action? So, you know, it was a good signal that he is saying, you know, the Fed is kind of, sort of willing to do something, maybe, which is better than previous statements. But, if this isn't a situation that warrants action now, what would be that kind of situation? Do we have to have a whole Great Depression to get the Fed moving?

JEFFREY BROWN: Douglas Holtz-Eakin, what did you hear from the Fed today?

DOUGLAS HOLTZ-EAKIN, former Congressional Budget Office director: Well, there was a little bit in there for everybody. He said, we recognize the economy's struggling, and thus tried to make sure people didn't think the Fed was out of touch. He told those who were worried about the economy going down into double dip that they had things they could do, and he outlined them.

And then, at the end, he told the people worried about inflation, believe it or not, look, we're not promising higher inflation in the United States. We're not going on record for that. So, I thought it was a talk carefully designed to appeal to lots of audiences.

JEFFREY BROWN: All right, carefully designed, but what about the state of the economy that Paul Krugman sees as in dire straits, needing more?

DOUGLAS HOLTZ-EAKIN: The economy is not in good shape. And I think, about that, there ought to be great agreement. But the key is that the Fed has done all it can do. It did a tremendous job in propping up the economy during the crisis. It is now badly extended. The keys now are that we have an economy that is growing. It's been growing for about a year, but it is growing too slowly. We ought to rethink this, not as a crisis, sort of stimulus issue, but one where we have got to concentrate on long-term growth and do all the things to make the economy grow faster.

JEFFREY BROWN: All right, well, that gets to the nub of the argument here, Paul Krugman. What should the Fed do now? What do you want to see it do?

PAUL KRUGMAN: I think it should be throwing everything, including the kitchen sink, at the problem. I mean, Doug is saying that there's -- the Fed has done all it can do. That's not what the Fed says. The Fed says it has ammunition; it continues to have the ability to act. So, we should take them at their word and see them actually act. They can do purchases of long-term bonds. They can raise their inflation target, which, you know, Ben Bernanke, when he was a Princeton economics professor, advocated for Japan when it was in a similar situation.

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George Will apparently took the holiday weekend off from his regular appearances on the roundtable on This Week, but GOP flack Dan Senor did his best to make up for his absence. After what was otherwise a fairly rational discussion on the jobless recovery, the fact that the stimulus wasn't large enough to get the economy back on track and whether doing anything more is possible politically given the Republicans don't even want to allow for unemployment benefits to be extended, Senor claims that the debt burden and fear of taxes being raised is the reason the unemployment numbers are terrible. Thankfully, Paul Krugman was there to beat back Senor's nonsense.

SENOR: He didn't send a mixed message. He actually was very clear. If the Congress didn't pass the stimulus, unemployment would rise about 8 percent. If they passed the stimulus, it would stay below 8 percent. His problem is being held accountable to what he said would occur if his bill -- if his stimulus package was passed.

And now he's saying, well, it could have been this -- unemployment could have been 13 percent, 14 percent or 15 percent, what he said in Wisconsin last week. The reality is, you may be right that the crushing effects of the debt burden won't be felt for some time, but it is having an effect on investors and lenders and employers today.

People know this -- this debt and deficit burden is unsustainable without major tax increases in the future. Major tax increases and the uncertainty that's associated with them makes it very hard for the private-sector economy to engage. And that's who's on the sidelines right now.

KRUGMAN: I just want to say, that's a -- there is not a hint of what you're saying in the data, not a hint that the debt burden is what's discouraging -- businesses aren't investing because they have massive excess capacity.

I trust Senor's advice on economic policy about as much as I'd trust him to tell the truth about why we invaded Iraq. Krugman had a much longer spot on GPS this Sunday as well. I wish to hell the administration would start listening to him and quit with the deficit fear mongering by expecting anyone to take this "bipartisan" commission seriously as anything other than an excuse to trash our social safety nets. They do nothing but give hacks like Senor and the rest of the deficit hawks credibility.

I'm also sick to death about this conversation never including our tax policies which actually encourage businesses to take jobs overseas and our trade laws. It's time for our government to start representing the interests of the workers of this country and not just multi-national corporations that would be happy if all of us were working for slave wages while CEO's and Wall Street investors maximize their profits. As I've said before, this is class warfare and the workers and what's left of the middle class are losing it. I'm happy that we've at least got the Paul Krugman's of the world talking about how wrong-headed those policies are that manages to get some air time on our corporate media. Sadly voices like his are too few and too far between.

Full transcript via ABC News below the fold.

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Paul Krugman discussed his recent article in the New York Times with GPS's Fareed Zakaria about why the deficit hawks are dead wrong on the path our country needs to take to get the economy back on track. It's too bad Krugman isn't a member of that deficit commission instead of wingnuts like Alan Simpson. I'd feel like they were sincere in trying to get our economy out of the ditch instead of using the problems we're having as an excuse to destroy Social Security and Medicaid and what's left of our middle class.

For "balance" Zakaria followed this interview with deficit hawk Niall Ferguson. In the end even Zakaria admitted that there is a strong case for short term government spending, not that the Republicans and the Ben Nelsons of the world are going to allow it.

Myths of Austerity:

When I was young and naïve, I believed that important people took positions based on careful consideration of the options. Now I know better. Much of what Serious People believe rests on prejudices, not analysis. And these prejudices are subject to fads and fashions.

Which brings me to the subject of today’s column. For the last few months, I and others have watched, with amazement and horror, the emergence of a consensus in policy circles in favor of immediate fiscal austerity. That is, somehow it has become conventional wisdom that now is the time to slash spending, despite the fact that the world’s major economies remain deeply depressed.

This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination — specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy. Read on...

Transcript via CNN below the fold.

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From The Cafferty File Is U.S. entering a depression?:

Forget all the talk about an economic recovery - the U.S. just might be headed in the opposite direction.

Paul Krugman - who has a Nobel Prize in economics - writes in the New York Times that he fears we are in the early stages of a depression.

Krugman says a failure of policy is to blame - that it's a mistake for governments around the world to raise taxes and cut spending at this time. Krugman says nations should be spending more to stimulate the economy.

And, at the end of the day - it is the unemployed and their families who will pay the high cost of this depression. Krugman writes about the "tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again."

Speaking of the unemployed - almost one million Americans are losing their unemployment benefits because the Senate failed to extend the deadline.

The bill didn't get the 60 votes needed to pass because lawmakers are looking for ways to put the brakes on skyrocketing deficits.

The same bill also contained another $24 billion for Medicaid funding for various states. And since they won't be getting that money right now, they will be forced to cut hundreds of millions of dollars, on top of what they've already cut.

It's getting very ugly out there.

Despite the Obama administration crowing about the so-called recovery summer - 78% of Americans say the economy is still in a recession according to a new CNN/Opinion Research Corporation Poll. Some recovery.

Here’s my question to you: Is the U.S. entering a depression?

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(h/t David)

Paul Krugman repeated his criticisms of Republicans he made last week and hit Mitch McConnell for his lie that resolution authority is setting the banks up for future bailouts.

Krugman: Anyone who says we need to be bipartisan should bear in mind that for the last several weeks Mitch McConnell, the Senate Minority Leader had been trying to stop reform with possibly the most dishonest argument ever made in the history of politics, which is the claim that having regulation of the banks actually bailing out the banks and that basically the argument boiled down to saying what we really need to do to deal with fires is abolish the fire department, because then people will know that they can't let their buildings burn in the first place, right. It's an incredible... so anyone who says bipartisan doesn't include the Senate Minority Leader.

Here's more from Krugman's column on the topic The Fire Next Time:

On Tuesday, Mitch McConnell, the Senate minority leader, called for the abolition of municipal fire departments.

Firefighters, he declared, “won’t solve the problems that led to recent fires. They will make them worse.” The existence of fire departments, he went on, “not only allows for taxpayer-funded bailouts of burning buildings; it institutionalizes them.” He concluded, “The way to solve this problem is to let the people who make the mistakes that lead to fires pay for them. We won’t solve this problem until the biggest buildings are allowed to burn.”

O.K., I fibbed a bit. Mr. McConnell said almost everything I attributed to him, but he was talking about financial reform, not fire reform. In particular, he was objecting not to the existence of fire departments, but to legislation that would give the government the power to seize and restructure failing financial institutions.

But it amounts to the same thing.

Now, Mr. McConnell surely isn’t sincere; while pretending to oppose bank bailouts, he’s actually doing the bankers’ bidding. But before I get to that, let’s talk about why he’s wrong on substance. Read on...