Tough Love: Paul Krugman & Obama’s Economic Policy

by Terry Lamb

April 8, 2009

Large chart images: Paul Krugman, Barack Obama, Christina Romer, Larry Summers, Paul Volcker

The cover story in last week’s Newsweek was “Obama’s Nobel Headache”. In it, Evan Thomas lays out the facts to a mystery I’ve been pondering since Obama started putting together his economic team: Where’s Paul Krugman?

Right before Obama named his team, Paul Krugman became an even more glittering star in the living economic pantheon by being given the Nobel Memorial Prize in Economics “for his analysis of trade patterns and location of economic activity”. He is also a professor in Economics at Princeton and the London School of Economics, and a member of the Group of Thirty international economic body as well as the Council on Foreign Relations. He writes regular op-ed pieces for the New York Times in his column revealingly called “Conscience of a Liberal” (title perhaps inspired by a book by the late Paul Wellstone). He has shown special fascination for and understanding of macroeconomics, especially international trade and finance and “economic geography”. His economic ideology is of the “European social democrat” ilk. He decries the growing gap between rich and poor and feels greed needs to be held in check — hence is pro-regulation.

He is also outspoken and prefers being an outsider, according to Thomas. His op-ed pieces have carried more than a few draconian pronouncements, like the one on March 23, 2009 (when Treasury Secretary Tim Geithner spelled out the details of his bank-rescue plan). He called the plan “cash for trash” and said it “filled him with a sense of despair”. His preferred plan: The government must quickly act to nationalize the big, “zombie” banks (to stop the bleeding through bonuses and other self-interested actions) and guarantee the liabilities of all the nation’s banks. The lack of funding of the current plan will lead to a downturn like Japan’s “lost decade”, which started in the 1990s.

What Is It with Paul Krugman, and Why Is He Saying These Terrible Things about Us?
Well, now I know that Krugman disagrees with Obama’s guys (but is probably more aligned with Christina Romer), but why is he on the outside? What does he think is going on? What makes him tick?

To go a little deeper into the mystery, the wise astrologer uses the tools of her trade. We have an untimed birth chart for Mr. Krugman, shown above. Even without the birth time, which gives us the location of the planets around the wheel and the degree of the Moon, we can see a great deal about a person. The resulting solar chart shows that Krugman was born a Pisces with a Virgo Full Moon.

The Pisces is evident in descriptions of him. Evan Thomas describes Krugman as shy, sweet, not a prima donna, wears his fame lightly, gentle, a little absent-minded, and adaptive. These are all Pisces traits, when Pisces is not masked by a stronger energy. A mentor, Robert Solow, describes him as “very unassertive, mild mannered” as a grad student. His demeanor in public appearances is humble and unassuming. When he won his Nobel Prize, he was not out there blowing his horn. It was another day in the life, despite it being the accomplishment of a major goal for him.

The Virgo Moon comes out as “nervous[ness]” and nerdiness and contributes to his reputation for gentility, lack of hauteur, and adaptiveness. Being an academic is second nature to this Moon. What may go unnoticed with these placements, however, is the quality of the Full Moon: It has “crisis consciousness” in two forms. First, it can adapt to and deal with crisis when it actually arises. Second and less favorably, it can see crisis in everything that moves.

The Assertive Mr. Krugman
Pisces-Virgo does not describe the whole man. No description of Paul Krugman would be complete without noting his strong Aries streak, a part of him which is well known to colleagues, friends, and probably his wife. It certainly comes out in the more strident tones of his op-ed pieces and his sometimes need to dial back on the rhetoric.

Does it surprise you then that he has Mars in Aries? This powerful rulership placement overpowers nearby Venus in Aries (her detriment), while the two oppose his early-fifties trademark Saturn-Neptune conjunction. This is both complex and deep, speaking to what drives him and his sense of purpose in life. One thing for sure, whatever Saturn-Neptune represents, he is driven to express it, or express against it. He is likely to be “anti” about the things he's interested in. This is even more the case when the universe throws in Uranus in Cancer and Chiron in Capricorn. The resulting cardinal grand cross gives us a revolutionary, or as he describes himself, “anti-establishment”, made quiet by Pisces-Virgo.

Saturn-Neptune & the 50s Crowd
For those born in 1952-53, Saturn and Neptune were conjunct each other, and all those born in this age group share a common awareness and related purposes. At its core, on a social level Saturn-Neptune is about how wed we are to consensus reality, that dream that we all dream together. This dream plays a huge role in an economy. We learn that money has value, so it has value. If we were to lose our faith in money, that a particular currency (or even money in general) faithfully represents our goods or efforts, the currency stops working. If we lose our trust that a system will reward us fairly for our goods or efforts, or that it will protect us against harm to their value, the whole system falls apart. Krugman carries this seed forward with his attunement to the economy and humanity's macro trends and systems.

Dream a Little Dream of Our New Economic Future
One good thing about Krugman is that, with so many planets in cardinal signs, he can pioneer new concepts. He can create the future. He is uniquely equipped for this when we add the visionary qualities of Pisces and the pragmatism of Virgo.

You see, it takes courage, knowledge, wisdom, and vision to see the future, not the least because what we see is what we create. Although Paul Krugman may be glum about how Obama’s administration is handling the economic crisis, I keep asking myself, “And this is bad because . . .”. Krugman does suggest that substantive changes will take place in the world economy, changes that he still couches in terms of the old reality. However, he does have a vision of a better future, where the distance between rich and poor is flattened, greed is curbed through regulation, and where it is possible to do good and still succeed.

In a fascinating report on Monday, “Economic Downturn Signals a New Normal”, Robert Siegel ponders the question of what will become the new normal once the new economic reality becomes established, whatever that is. He asks, “How will the recession change our country in the long term?” “They change us in ways we can hardly imagine,” says historian David Kennedy. Some of the suggestions: less credit, more saving; less home-buying, more renting; less spent on possessions, more on experiences; changes in what is considered a luxury experience or item; a smaller role for the U.S. Krugman would surely sign up for some of these possibilities if he weren’t so busy still trying to give voice to a better path to them.

Why Doesn’t Obama Listen to Krugman?
President Obama, for all his strengths, is human. He has been known to defer to his advisors, especially in areas of great complexity or where he is less well-informed, such as the economy (the former) or military policy (the latter). Obama’s advisors may be telling him that Krugman’s position is too extreme; Krugman feels that Geithner is too close to the crisis, including the people who created it, and has adopted too much of the investment banker mindset. He feels that Larry Summers has more resiliency in seeing through their foibles, and he hasn’t yet given up on the administration to move closer to his idea of what will work.

Astrologically, there are many connections between Krugman’s and Obama’s charts, but the key points of annoyance appears to be first, one of personality, and second, one of ideology. The personality differences are many, but you get prickles when you put a Leo (Obama) and a Pisces in the same room. There’s something about the attention-seeking of Leo that really gets under a Pisces’s skin. (Perhaps it’s what Pisces secretly wants but spends so much time studiously avoiding.)

Mystery Solved, Partially
But with Obama’s Saturn directly square to Krugman’s, Obama is at once too pragmatic for Krugman; and with Obama’s Pluto on Krugman’s Moon, Obama is the wrong kind of pragmatic for Krugman. In fact, with Krugman’s Pisces-Virgo approach to life, he could be called the Idealistic Pragmatist. And if he didn’t have such romantic notions of being the nerd who saved civilization (born of reading Asimov’s Foundation series in his youth), he might be willing to compromise more on his viewpoints — but would it help us if we didn’t have the caped economic crusader speaking for the poor masses huddled at the door of the big banks?

Obama may end up listening to Krugman. He and Larry Summers stay in touch and share a mutual respect. However, it will go through the Summers filter. If Summers buys it, it will be transmitted and perhaps used. Summers is an idealistic Sagittarius who has more astrological connections with Obama, especially ones that give him that father-figure feel (Summers’s Saturn on Obama’s absent-father Neptune).

More troubling is the fact that Obama’s economic team is decidedly old school, with the exception of Christina Romer. While this is a cause for concern in my opinion, it doesn’t trouble me as deeply as it would if this were still the case at this time next year.

Saturn-Uranus Provide the Timing.
We are still in the first half of the Saturn-Uranus opposition period. Because they interact over two yearly planetary cycles, there is a two-step process in “getting it right”. This pair is heavily implicated in the economic crisis we are now experiencing (but are not the only culprits). By the fall, it will become apparent that the administration’s approach will need adjustments. Obama and Summers (with the help of past Fed Chair and elder economist Paul Volcker) may find their way to a more Krugman-like direction. What is now considered slightly lunatic fringe may become the new mainstream.

If you think Krugman is a lone voice in the wilderness, think again. There’s William Greider, Robert Kuttner, Dean Baker, Robert Reich, and Nouriel Roubini, to name a few of those who speak with a similar voice. Once we see what type of regulation policy the Obama Administration embraces, we’ll know how contented this bunch will be. Regulation is likely to be the strongest feature of Saturn-Uranus Phase II.

For now, patience, optimism, creativity, and informed activism are our best economic policies. I’m not sure that we can or should save the banks, myself. However, that’s the path we’re on, and if we’re going to do it, we should do it right.

© Terry Lamb

We’re All Secretaries Now: AIG and the Growing Challenge to Corporatism

March 17, 2009

Back in my 20s, I found myself from time to time in a job as a “secretary” (now dressed up as “administrative assistant”). I quickly learned how challenging such a position could be, then later as the concept of job stress emerged, I learned how secretarial positions rank pretty far up the stress scale, because they trap the hapless employee in a position of responsibility without authority. I suspect this is true of nearly all customer service positions as well.

So when AIG announced that it was issuing $165m in “retention awards” to the Financial Products Unit (the ones that brought the whole economy down through their approval of high-risk credit default swaps), I got that old familiar feeling of being a secretary again. This on top of the $440K party, the $86K executive fox-hunting trip to the UK (outrageous in itself), and who-knows-how-much to hire four PR firms to spin us into liking them.

Money Without Strings — Time to Par-tay!!!
Last September, the Federal Reserve Bank acted within its authority to loan $85bn to AIG. Without us propping them up, AIG would not exist. We should note that this is not a part of TARP nor of any bailout funds approved by Congress, but a 24-month loan arranged by the Fed.

When our naive Fed made the loan, they assumed that AIG would act responsibly and in the interests of the American people (HA!), a laughable extension of the “free-market fundamentalism” that has been nearly thoroughly discredited. The loan was granted with few strings attached, and certainly none regarding employee compensation. However, the purpose of the loan is stated in the letter announcing the loan as,

. . . to assist AIG in meeting its obligations as they come due. This loan will facilitate a process under which AIG will sell certain of its businesses in an orderly manner, with the least possible disruption to the overall economy.

However AIG got plenty of those too, though with more restrictions, to a total of $170bn. The result: Now the government owns 80% of AIG. That’s you and me — we own 80% of this donkey.

But still, the government (Treasury, Congress) has asked for no control and little oversight over the corporation. Evidently, the dreaded ghost of nationalization looms too large for us to consider it. This brings us to that old, bad feeling of responsibility without authority: We have to pay for it, but we have no control over how the money is used or what the outcome will be. We are all secretaries to AIG.

We May Not Be Secretaries for Long.
The money is clearly NOT meant to be used for employee bonuses. However, can anything be done to stop it? Tim Geithner (who incidentally was head of the NY Fed when it doled out the cash) has said that nothing can be done through legal channels. AIG says its hands are tied — it has to honor the contracts. What’s more, AIG refuses to produce a list of names of those receiving bonuses. The message from AIG to the government (that means us): “Get stuffed.”

However, other sources are not so sure. Senator Arlen Specter thinks the awards violate public policy and would not stand up in court. Congress isn’t waiting, however. There are two bills afoot to tax the bonuses at a high rate, one with a tax rate of 100%! We may not be beholding to AIG for long.

This is a classic David-vs.-Goliath struggle of the behemoth corporation against the people it has victimized. As Pluto, in the second year of its Capricorn transit, slows to a near stop before its retrograde (apparent backward motion) begins on April 4, let’s call this the opening salvo in the battle to take the government of the US people to be by and for the people once again, instead of bought and paid for by big business.


© Terry Lamb

When Will the Stimulus Package Be Passed? Once Again, Mercury Is Involved.

January 6, 2009
We have much to cheer about as the new year opens. A new president is about to be sworn in, after an unimaginably disastrous eight years of GW Bush destroying the concept of government, the freedoms upon which the nation is based, and the Constitution that codifies both. It is with relief that we see our republic spring miraculously back to life.

However, we know, as much as we may hope otherwise, that life does not proceed in a straight line. It follows a zig-zag path, something that both astrologers and practitioners of the I Ching can agree on. We are about to encounter a zig-zag in the path to a better economy in January.

It’s (Not) All About Mercury.
Yes, it’s time for a Mercury retrograde again. It’s the time when Mercury appears to travel backward in the heavens when measured against the backdrop of the degrees of the zodiac (called the ecliptic). While I hasten to add that this is an apparent motion related to our position on an orbiting planet, the results in the world around us look very real.

Mercury in mythology was the messenger of the gods, and this is his role in astrology as well. Although a “minor” planet, he has the power to unleash the furies of the heavens during his retrograde period, which occurs every 3½ months for about three weeks. Mercury naturally has to do with communication, and this is a cornerstone of all human activity. But when Mercury makes contact with some of the planetary heavies during its retrograde, we get that extra dose of drama that, while blamed on Mercury, is not of his making.

The Mercury retrograde last fall (September 24 – October 15) was one of these furious retrogrades. As it made challenging contacts to expansive Jupiter and Great-Wound combination Chiron-Neptune, the markets lost confidence and the investment world fell apart, taking the economy with it. It was testimony to the power of these heavy planets, and only to Mercury as their messenger.

Up to His Old Tricks Again
If you count the days, you’ll figure out on your own that it’s almost time for another Mercury retrograde. Indeed, if you’ve had the clear skies and high visibility that southern California has enjoyed on the evenings of the past week, you’ll have been treated to the pleasure of seeing four planetary bodies in the western sky at sunset. Bright and easily visible were the crescent moon and Venus; not so visible but just as stunning were the two lights hugging the horizon but dimmed by the Sun’s afterglow: Mercury and Jupiter. Over the past week, we could watch Mercury move slowly past Jupiter.

When Mercury is even visible to us, it’s a sign that it is near its retrograde. So it is now. On January 11, it will make its standstill before moving backward across early Aquarius and late Capricorn. It returns to forward motion on January 31. This, as you might expect, establishes the potential for drama in the world around us.

Now, think about it. If Mercury goes backward over a segment of the zodiac, it covers some of this celestial turf three times, right? Ah, therein lies the rub! This segment of the heavens gets overstimulated, along with all the bodies that resonate at those degrees. The time when Mercury crosses this zone before and after its retrograde are called its “retrograde shadow”.

The themes of the retrograde emerge when Mercury first enters its shadow. They are confronted as problems or issues during the retrograde. Finally, they are resolved when Mercury makes its final pass through the shadow after the retrograde.

So, what snags in the fabric of life will Mercury’s energy get caught on this time? What issues is receiving obsessive interest by the media right now? It’s the economy, stupid. Everything is about the economy. And now, as Mercury slows down, the stimulus package offered up by soon-to-be-inaugurated Barack Obama is the source of much Pavlovian salivation.

The Good News
Mercury makes only two contacts (and one near miss) during this retrograde. These contacts are conjunctions (a neutral contact) to Jupiter and Mars. These are fairly benign as contacts go. They bring stimulation without the easy potential for major cock-ups. What’s more, Mercury and Jupiter as the two mental planets are a natural pair. Even more than that, Mars is in Capricorn, the sign that it performs best in (its exaltation). This is good news! It means that some combination of objectivity and pragmatism may reign.

The Big Question: When Will the Stimulus Package Pass?
Everyone is speculating on when it will pass as much as on what form it will take. With Congress’s swearing-in ceremony tomorrow (January 6), they cannot help but consider the stimulus package during Mercury’s retrograde. Since this is the case, Mercury establishes some nearly certain timing constraints on the situation. Here’s a time line for how it will affect the passage of the stimulus package:

December 25 - January 10 (Mercury Shadow 1): Anxiety and anticipation build as the reality of the weak economy hits home. The shortcomings of the bail-out devised during the last Mercury retrograde are fully revealed. The hue and cry rises for stimulus in the real economy to rescue “Main Street”, as it becomes apparent that the first ($700bn) stimulus package has been squandered. December 31 (Mercury conjoins Jupiter): More bad news from the economy and American manufacturers, especially automakers.

January 11 - 31 (Mercury retrograde): First, nothing will pass while Mercury is retrograde. There will be the predictable sense of urgency, but nothing will gel. It will be a time of fruitful and clarifying discussion. New facts about the economy will emerge. Under-represented viewpoints will be heard (perhaps progressives Paul Krugman, Robert Kuttner, David Cay Johnston, and James K. Galbraith). Partisan politics will threaten to take over the process. January 18 (Mercury-Jupiter): More bad economic news pushes the debate in a more progressive, Keynesian direction. January 26 (Mercury-Mars): The real economy, manufacturing sector, and blue-collar workers rise in prominence.

February 1 - 20 (Mercury Shadow 2): Stimulus legislation will begin to move forward. Although it is possible for it to occur sooner, a bill will probably not be ready for signature or signed until on or after February 20.

Caveats: Although the masses most frequently follow the norm of planetary timing, it is always possible to respond above expectation. This makes it possible for Congress to pass legislation before February 20, but it is relatively unlikely, especially before February 1.

One thing that will certainly spur action is whatever happens at the time of the Solar Eclipse on January 25, coinciding with a major stellium (cluster) of planets in Aquarius and the Mercury-Mars contact. This could be a game-changer.

Impact on the US
This is “Mercury retrograde lite” for the US chart, since Mercury only contacts the US’s destiny line, the nodal axis. This suggests a major shift in direction for the country but does not imply any complications more than are inherent in the issue (and they are huge).

There is no doubt that there are more facets to the situation than I can anticipate or that lie beyond the depth of this inquiry. However, there is no doubt that Mercury and its compadres will play a role in the unfolding of events.

The New Economic Team: Will It Succeed?

At 12:06 today (Monday, November 24, 2008), Barack Obama announced his economic team. They are: Timothy Geithner as Treasury Secretary, Lawrence Summers as Director of the National Economic Council, Christina Romer as Chair of the Council of Economic Advisors, and Melody Barnes as Chair of the Council on Domestic Policy.

The Event's the Thing.
Without looking at the members of the team itself but at the astrological chart of the moment for the announcement, we can see what might lie in store for this group. Opinion varies as to what house or houses of the chart to use for advisors. It is acceptable practice, however, to consider the advisors for a particular area to be “housed” where the matter they are concerned with is found. Since this team is concerned with the economy at large, they can be associated with the 8th house. The 8th house has to do with (among other things) the national treasury, the national debt, interest rates, and financial relations with other countries.

The House of the Treasury
The 8th house has pragmatic Virgo on the cusp with Saturn in Virgo close to hand. This speaks of a practical group that is ready to dig in and get the work done without posturing or prevaricating. They will humbly take their positions and work efficiently and for the good of the community. These are all Virgo qualities. This perspective is supported by common knowledge about this team: They have worked together in the past and share many perspectives. They are more likely to agree very quickly on a plan and move forward.

This is one place where a “team of rivals” is not desirable but rather a team of colleagues. This might create discomfort among some, except that experts on both left and right are coming to a consensus that what the nation needs is a stimulus package that is targeted in specific areas to shore up the Main-Street economy as well as the financial markets on Wall Street.

The Dream Team: Saturn’s Contacts
To see what impact this group will have on the world around them, we can look at the contacts Saturn has with other planets and points. The news is good: Saturn receives harmonious trines from Venus, the Lot of Fortune, and Jupiter, which are lined up in Capricorn. If I could imagine a set of dream contacts, I couldn’t come up with a better one! The two benefics of fortune and the Arabic Lot of fortune are in the most fortunate of contacts!

Because they are located in the 11th mundane (not whole-sign) house, this tells me that this team will be allied with and supported by Congress and will attract many allies for their policies. This house itself rules policies and the goals of the nation. This suggests that they will have a clear vision of what needs to be done and how to do it, a virtual mandate for action. Since these planets are in Capricorn, their policies will take the deepest and broadest view, with a mindful eye toward history. Christina Romer in particular supplies that strength, developed through her research and writings on the recovery from the Great Depression.

Saturn’s Teammate: Moon in Libra
The Moon is always significant in any event chart, as the timer and motivator of activity. The Moon is at 29̊35' Libra, minutes away from a change in sign. The astrological cognoscenti might be alarmed at this, because this could be a void-of-course Moon and in most instances would be. The Moon is void of course when it will make no more contacts before it leaves a sign. This signifies that no further action will be taken before the nature of the matter fundamentally changes.

But we’re in luck! Because Pluto is so late in Sagittarius, getting ready to move into Capricorn next week, the Moon is still moving into its sextile with Pluto! This is a contact of opportunity, and about the best possible situation for the Moon to be in. Why? Well, if I wanted to make sweeping and dramatic changes that would affect the entire world, I would want Pluto on my side. If I wanted to move quickly and have an immediate lasting affect, I would want to take action at a time when a harmonious contact to Pluto was going to occur very shortly, with no further contacts after it which could muddy the waters or push back on my actions.

This is precisely the effect that the Moon in its current location will have! What’s more, the Moon has only harmonious contacts before it leaves the sign: The moving Ascendant and Midheaven, which will change signs before the Moon does, will trine and sextile the Moon to add the joyous support of the people and the perhaps begrudging support in principle of the outgoing Bush administration.

So, What’s Not to Like?
Well, we do live in the real world, where we haven’t yet figured out how to make harsh conditions disappear with the wave of a magic wand. The planets also reflect this reality. After all, we are dealing with an economic crisis that is one of the worst in history.

Saturn has not escaped the grasp of Uranus, but as I’ve said before, I think this is a good thing. In a world where we need to fundamentally question the economic theories of Adam Smith, the invisible hand, and the value of uncontrolled growth in order to save the planet, we need Uranus now more than ever. Their opposition continues through July 2010, and during this time we will figure out (with the help of this team and the cadre of people who will feed their greatest wisdom to them) how to go back to being citizens instead of consumers, but this time on a global scale. Before the Depression, being called a consumer was an insult, a sign of gluttony and waste. This connotation may be revived as we green our economy and our lives.

As Saturn and Uranus circle the ring opposite each other, they will exchange illuminating points, resulting in a reconciling of extreme positions. This is the value of the opposition.

The other substantial challenge of note in this chart comes from the Mercury-Sun-Mars stellium in Sagittarius on the Midheaven. This could be called “the perfect storm in the perfect chart”, a conundrum that we will have to deal with as we make our way through the remainder of the year. If we could only take a month off from the economy, we could avoid this issue, but they haven’t told us we could, so we’ll have to deal with these planets!

The static that these planets represent is considerable, but it is short-lived. And it comes from — you guessed it — the current administration. They are still very much in power, and already Bush has reminded us that his administration is still in control, even before Obama’s statement was made! They are not willing to hand over the reins of power yet. These planets, placed in idealistic and (for these folks) stubbornly ideological Sagittarius, are found at the MC (Midheaven), signifying the nation’s leader, administration, and the party in power.

They are not likely to let go. They are likely to sit on their ideological high horse and make the Obama team (and the rest of us) wait, some in suffering, until January 20 before they will be able to effect even the mildest change. As I said earlier, yes, they will “support” the new team, but they will not support the new team. They have shown themselves to be good at giving lip service. We should always make room in our consciousness for people to do something better, though, and it is possible that they will work out their natural resistance internally as they lend real support to the new administration. (What do you think they’ll do?) No matter what, this is of a short duration, from December 5-15. Watch for their approach to an auto industry loan (not a bail-out - a bail-out was never on offer).

Two More Things Worth Noting
One more thing to note is that Chiron and Neptune straddle the Ascendant in this chart. This represents the people, wounded and hopeful. Another is Uranus in the 2nd house. This suggests a jump-start to the economy with come from the efforts of this team. President-Elect Obama spoke of the need for this, as has one expert after another.

There is reason to believe that this will work. One thing is for sure, the chart gives maximum support to a positive result in the long run, even if we have to wait longer than we think is possible. But I’ve learned that the impossible can be achieved, and together we can make it happen.