The Centrist Falacy

Krugsandra:

The reality, of course, is that we already have a centrist president — actually a moderate conservative president. Once again, health reform — his only major change to government — was modeled on Republican plans, indeed plans coming from the Heritage Foundation. And everything else — including the wrongheaded emphasis on austerity in the face of high unemployment — is according to the conservative playbook.

What all this means is that there is no penalty for extremism; no way for most voters, who get their information on the fly rather than doing careful study of the issues, to understand what’s really going on.

Comparative Budget Plans

Guess which one saves the most money (hint: It's not Obama's and it's not the Tea Party's)?

Punching Through

The debt ceiling is a figment of our collective fiscal insanity.

The truth is that the United States doesn’t need, and shouldn’t have, a debt ceiling. Every other democratic country, with the exception of Denmark, does fine without one. There’s no debt limit in the Constitution. And, if Congress really wants to hold down government debt, it already has a way to do so that doesn’t risk economic chaos—namely, the annual budgeting process. The only reason we need to lift the debt ceiling, after all, is to pay for spending that Congress has already authorized. If the debt ceiling isn’t raised, we’ll face an absurd scenario in which Congress will have ordered the President to execute two laws that are flatly at odds with each other. If he obeys the debt ceiling, he cannot spend the money that Congress has told him to spend, which is why most government functions will be shut down. Yet if he spends the money as Congress has authorized him to he’ll end up violating the debt ceiling.

If Only it were True!

If you've ever played Settlers of Catan, you will laugh.  Hard.

YAPoHWGH! (Yet Another Post on How We Got Here)

Behold!

And Behold Again! The Quality of Republican Economists!  I love their projections of how tax cuts would grow GDP.  The most remarkable case of EPIC FAIL I've ever encountered.

Source: New York Times

Why News of the World (probably) Won't Happen Here

Columbia Journalism Review:

The Wall Street Journal’s special committee on editorial integrity (true, rather hapless as oversight bodies go ) felt compelled to assure readers this morning that hacking and bribery do not, repeat not, take place even at my old paper, perish the thought.

But, actually, the answer is no, you won’t see a NotW-style scandal unfurling here anytime soon.

The first thing to keep in mind is the sheer scale of NotW-gate—rampant criminal activity on an institutional scale, an entire newsroom running amok, with, as we’re learning, active participation of top editors, including Andy Coulson and Rebekah Brooks (who herself told Parliament of paying police for information, before saying she couldn’t remember actual instances). On top of this, NotW includes senior News Corp. figures playing key roles in keeping the crimes under wraps, including Les Hinton who told Parliament he had checked thoroughly and found it was only a single reporter, and James Murdoch, now deputy COO, who authorized payments to hacking victims and was well-briefed on what it was about, despite what he told Parliament. (For a nice summary of #hackgate sins, see Chittum.)

Let the Blame Storm Commence!

Right-wing knuckle-dragger Steve King (R-Neanderthal) is calling for Obama's impeachment if he doesn't capitulate immediately.

Perhaps, dear Brutus, the fault lies not in our stars but in ourselves (2nd time I've gotten to use that this week!).

Knock me Over with a Feather: Texas Approves Evolution

I'm shocked, in a good way!  The Texas School Board who approve textbooks for Texas and, indirectly, the rest of the nation approved biology texts firmly grounded in evolutionary theory.

Pop the champagne corks. The Texas Board of Education has unanimously come down on the side of evolution. In 14-0* vote, the board today approved scientifically accurate high school biology textbook supplements from established mainstream publishers--and did not approve the creationist-backed supplements from International Databases, LLC.

The Circling Sharks Close In!

News Corp's top executives are beginning to feed on each other.  James Murdoch is the latest to be caught red-handed with knowledge about the depth and breadth of the phone hacking at News of the World.

Whatever happens to News Corp. now, it will surely happen without James Murdoch. A single meeting the 38-year-old had in London one day in June 2008 now haunts him to the point where, having been the clever, dashing heir apparent to his buccaneer father, Rupert, he has become a liability with little hope of survival.

He is saying one thing—that in briefing him they gave an “incomplete picture”—and, remarkably, in a statement Thursday, they publicly denied that. It is a significant moment, because it is the first public breaking of ranks among Murdoch executives to have occurred in the five years this scandal has been running. From here, the whole edifice of James’ defense threatens to crumble away, and it could do so in days.

James is now in the front line of his own defense and, when he tries to blame any of these others they are likely to bite back, telling their own stories and defending their own interests. He attempted it, recklessly, with some of his company’s external lawyers, and they are now on his case. The same is happening with Crone and Myler.

The End of US Manned Spaceflight and the Failure of American Vision

Although I am saddened by the small-mindedness of our politicians in ending (for now) manned spaceflight and apparently ceding the future of it to the Chinese, it's important to remember that, in the final analysis, the Space Shuttle was a flop.

The most important thing to realize about the space shuttle program is that it is objectively a failure. The shuttle was billed as a reusable craft that could frequently, safely, and cheaply bring people and payloads to low Earth orbit. NASA originally said the shuttles could handle 65 launches per year; the most launches it actually did in a year was nine; over the life of the program, it averaged five per year. NASA predicted each shuttle launch would cost $50 million; they actually averaged $450 million. NASA administrators said the risk of catastrophic failure was around one in 100,000; NASA engineers put the number closer to one in a hundred; a more recent report from NASA said the risk on early flights was one in nine. The failure rate was two out of 135 in the tests that matter most.

It seems likely, in retrospect, that the project was doomed for a variety of reasons, including the challenging reusable spaceplane design and the huge range of often conflicting demands on the craft. Tellingly, the U.S. space program is abandoning spaceplanes and going back to Apollo-style rockets. The Russians have always relied on cheaper and more reliable disposable rockets; China plans to do the same. But hindsight is 20/20, and there may well be no way NASA could have known that the shuttle would flop back in the ‘70s when it was being planned and built, or possibly even while it was flying in the early ‘80s, before its bubble of innocence was pricked by disaster. But it would soon become clear to anyone that the shuttle program was deeply troubled—at least, to anyone who bothered to look.

Americans have been flying in space since before I was born, but I never thought I'd see the day that that would draw to a close.  But with small-minded Conservatives like George Lightbourn dominating our political discourse saying things like

we are emerging from an era where political leaders believe no problem is too complex or too costly for government to address. Walker made it possible to understand the fiscal realities, and limitations, of government.

it's hardly surprising that America can't get big things done anymore.

Walker made it possible, along with the cadre of Tea Party know-nothings, to believe that America has run her course.  She can no longer do big things like fly to the moon or build the Hoover Dam.  We have reached our limits.  We can do no more.  No, America is not a place where big things get done anymore.  American Exceptionalism is not in their lexicon.

Of Neoclassical Economic Theology

Philip Pilkington laments the success of neoclassical economic theology in our modern financial discourse.

The neoclassical paradigm offers its adherents a very attractive theology. It allows them to look at the world through a remarkably powerful set of rose-tinted glasses. It assures them that everything is okay – provided regulators and Sinners don’t get into positions of power – and that order and harmony will be established by an over-arching, quasi-external power. It gives its adherents a being that they can, in a very real sense, worship. It gives them a moral code that they can follow and that they can use to justify their actions, even when these appear to an external observer as being disgusting, idiotic and objectionable.

Perhaps this last point is the key one. The most dangerous personality trait of dogmatic religious devotees is their ability to insist that their extreme views are pure truth and that any action they undertake, no matter how destructive and stupid, are always already sanctioned by a higher power.

We're Already Living In the Randian Utopia!

They're Not Like Us...

A financial manager who deals with the top of the top has penned a little expose on the political motivations of the super-duper-rich.

I think it’s important to emphasize one of the dangers of wealth concentration: irresponsibility about the wider economic consequences of their actions by those at the top. Wall Street created the investment products that produced gross economic imbalances and the 2008 credit crisis. It wasn’t the hard-working 99.5%. Average people could only destroy themselves financially, not the economic system. There’s plenty of blame to go around, but the collapse was primarily due to the failure of complex mortgage derivatives, CDS credit swaps, cheap Fed money, lax regulation, compromised ratings agencies, government involvement in the mortgage market, the end of the Glass-Steagall Act in 1999, and insufficient bank capital. Only Wall Street could put the economy at risk and it had an excellent reason to do so: profit. It made huge profits in the build-up to the credit crisis and huge profits when it sold itself as “too big to fail” and received massive government and Federal Reserve bailouts. Most of the serious economic damage the U.S. is struggling with today was done by the top 0.1% and they benefited greatly from it.

Not surprisingly, Wall Street and the top of corporate America are doing extremely well as of June 2011. For example, in Q1 of 2011, America’s top corporations reported 31% profit growth and a 31% reduction in taxes, the latter due to profit outsourcing to low tax rate countries. Somewhere around 40% of the profits in the S&P 500 come from overseas and stay overseas, with about half of these 500 top corporations having their headquarters in tax havens. If the corporations don’t repatriate their profits, they pay no U.S. taxes. The year 2010 was a record year for compensation on Wall Street, while corporate CEO compensation rose by over 30%, most Americans struggled. In 2010 a dozen major companies, including GE, Verizon, Boeing, Wells Fargo, and Fed Ex paid US tax rates between -0.7% and -9.2%. Production, employment, profits, and taxes have all been outsourced. Major U.S. corporations are currently lobbying to have another “tax-repatriation” window like that in 2004 where they can bring back corporate profits at a 5.25% tax rate versus the usual 35% US corporate tax rate. Ordinary working citizens with the lowest incomes are taxed at 10%.

I could go on and on, but the bottom line is this: A highly complex and largely discrete set of laws and exemptions from laws has been put in place by those in the uppermost reaches of the U.S. financial system. It allows them to protect and increase their wealth and significantly affect the U.S. political and legislative processes. They have real power and real wealth. Ordinary citizens in the bottom 99.9% are largely not aware of these systems, do not understand how they work, are unlikely to participate in them, and have little likelihood of entering the top 0.5%, much less the top 0.1%. Moreover, those at the very top have no incentive whatsoever for revealing or changing the rules. I am not optimistic.

I Just Threw-Up in my Mouth a Little Bit

I'm not even sure where to go with this.  My outrage tank is empty.  This is not my country anymore.

Now, even as the economy limps along, more of the nation’s wealthier families are cutting out the car ride and chartering planes to fly to summer camps. One private jet broker, Todd Rome of Blue Star Jets, said his summer-camp business had jumped 30 percent over the last year.

The Defeated!

Palin's movie, like Palin herself, is a national flop.  For the weekend of July 22nd - 24th, the bottom dropped out of her awful movie.

So in two weeks, Palin's flick managed to drop by 63.2% and has only made $101,000.  By contrast, Michael Moore's film, Fahrenheit 9/11 managed to break box office records for a documentary.

What's really amazing is the difference in the revenue-per-screen numbers.

Oh, and the icing on the cake? The movie is universally loathed by the critics as a worthless, throwaway piece of ham-handed hagiography.

Reality demonstrates, once again, a determined liberal bias.

On the Death of Quicken and the Personal Financial Software market

R.I.P.

Interesting.

Quicken is not an interesting product for people with millions of dollars to manage. They will largely use professional money managers. Quicken is not an interesting product for people with very limited savings and investments, particularly if the investments are largely concentrated in 401K accounts. The natural market for Quicken was individuals and families with significant financial complexity but not wealth.

Over the past fifteen years that market went away. The saving grace for niche Mac vendors is that, insofar as some remnant of that market still lives, it's now largely using Apple products.

In the end, I think the collapse of the American middle class killed Quicken.

The Two Superpowers!

Boom!

Of Bombs and Bonds, both can be explosive!

From an interview in 1996...

DAVID GERGEN: So you have to be--there are two superpowers, I think, you say.

THOMAS FRIEDMAN: That's right. There are two superpowers in the world today in my opinion. There's the United States and there's Moody's Bond Rating Service. The United States can destroy you by dropping bombs, and Moody's can destroy you by downgrading your bonds. And believe me, it's not clear sometimes who's more powerful.

The Supernova Sonet

What happens when astronomer's get creative...

Supernova Sonata from Alex Parker on Vimeo.

This video is a compilation of the 241 Type Ia supernovae seen in these fields during the CFHT Legacy Survey. The four Deep Fields are shown in color, and the positions of all the supernova are illustrated as time progresses. The animation is rendered at 15 frames per second, and each frame corresponds to just under a single day (one second in the animation corresponds to roughly two weeks of real time).

Each supernova is assigned a note to be played:

Volume = Distance: The volume of the note is determined by the distance to the supernova, with more distant supernova being quieter and fainter.

Pitch = "Stretch:" The pitch of the note was determined by the supernova's "stretch," a property of how the supernova brightens and fades. Higher stretch values played higher notes. The pitches were drawn from a Phrygian dominant scale.

Instrument = Mass of Host Galaxy: The instrument the note was played on was determined by the properties of the galaxy which hosted each supernova. Supernovae hosted by massive galaxies are played with a stand-up bass, while supernovae hosted by less massive galaxies are played with a grand piano.

Note that the brightness of the supernovae as shown in the animation are not to scale. Because they are so distant, even these extremely powerful explosions appear very faint upon reaching us here on Earth.

Created by Alex H. Parker (University of Victoria) and Melissa L. Graham (University of California Santa Barbara / LCOGT).

All Hail Viking Women!

Apparently Helga made the trip too!

It seems that the Viking invasions of England in the 900s were much more a mixed group of men and women than previously thought.  From DNA testing of Viking burials it seems that as many as half of the Viking invaders may have been women.

However, McLeod notes that recently, burials of female Norse immigrants have started to turn up in Eastern England. "An increase in the number of finds of Norse-style jewellery in the last two decades has led some scholars to suggest a larger number of female settlers. Indeed, it has been noted that there are more Norse female dress items than those worn by men," says the study.

So, the study looked at 14 Viking burials from the era, definable by the Norse grave goods found with them and isotopes found in their bones that reveal their birthplace. The bones were sorted for telltale osteological signs of which gender they belonged to, rather than assuming that burial with a sword or knife denoted a male burial.

Overall, McLeod reports that six of the 14 burials were of women, seven were men, and one was indeterminable. Warlike grave goods may have misled earlier researchers about the gender of Viking invaders, the study suggests. At a mass burial site called Repton Woods, "(d)espite the remains of three swords being recovered from the site, all three burials that could be sexed osteologically were thought to be female, including one with a sword and shield," says the study.

Never assume that women can't handle a sword.  Never...

Another study that warns against the equation of swords with Norse males, and the problems of gender was done by Anne Graslund. She assessed a similar bias of interpreting swords as male and jewellery as female. She argued instead that osteological sex was just as important, as females with warrior style burials had been discovered. She concluded that women were equal to men, but served a different role as caretaker of the house, and had the agency to become extremely powerful. With the Norse intending to settle England, it would have been important to bring the women with them. Further, textual evidence from the Vikings themselves discusses the roles of powerful female queens such as Thyra who ruled in her husband’s absence, and Saxon text from 1200 states that “there were once women in Denmark who dressed themselves to look like men and spent almost every minute cultivating soldiers’ skills”.

What a REAL Democratic President Sounds Like

FDR, 1936

Here is an amazing paradox! The very employers and politicians and publishers who talk most loudly of class antagonism and the destruction of the American system now undermine that system by this attempt to coerce the votes of the wage earners of this country. It is the 1936 version of the old threat to close down the factory or the office if a particular candidate does not win. It is an old strategy of tyrants to delude their victims into fighting their battles for them.

Every message in a pay envelope, even if it is the truth, is a command to vote according to the will of the employer. But this propaganda is worse—it is deceit.

They tell the worker his wage will be reduced by a contribution to some vague form of old-age insurance. They carefully conceal from him the fact that for every dollar of premium he pays for that insurance, the employer pays another dollar. That omission is deceit.

They carefully conceal from him the fact that under the federal law, he receives another insurance policy to help him if he loses his job, and that the premium of that policy is paid 100 percent by the employer and not one cent by the worker. They do not tell him that the insurance policy that is bought for him is far more favorable to him than any policy that any private insurance company could afford to issue. That omission is deceit.

They imply to him that he pays all the cost of both forms of insurance. They carefully conceal from him the fact that for every dollar put up by him his employer puts up three dollars three for one. And that omission is deceit.

But they are guilty of more than deceit. When they imply that the reserves thus created against both these policies will be stolen by some future Congress, diverted to some wholly foreign purpose, they attack the integrity and honor of American Government itself. Those who suggest that, are already aliens to the spirit of American democracy. Let them emigrate and try their lot under some foreign flag in which they have more confidence.

Voter ID Intimidation

Amazing... Welcome to Fitzwalkerstan.

What's a Few More Dead Poor People?

No big deal, right? A few more dead poor people is no big thing.  Hell, they were probably sucking off public assistance anyway.  Food stamps, unemployment insurance.  It's really better that they're dead.  Especially dead old people.  I mean, who really gives a flying fuck.  No more sponging off Medicare and Social Security.  As long as my taxes don't go up, right?

Many states hit hardest by this week’s searing heat wave have drastically cut or entirely eliminated programs that help poor people pay their electric bills, forcing thousands to go without air conditioning when they need it most.

“I’ve never seen it this bad,” said Timothy Bruer, executive of Energy Services Inc., which administers the federal Low Income Home Energy Assistance Program in 14 Wisconsin counties. The group has turned away about 80 percent of applicants seeking cooling assistance.

The sizzling summer heat comes after a bitterly cold, snowy winter in many places and at a time when unemployment remains stubbornly high.

The cuts began after Congress eliminated millions of dollars in potential aid, forcing state lawmakers to scale back energy assistance programs. The agencies that distribute the money are worried that the situation could get even worse next year because the White House is considering cutting the program in half.

Fuck 'em. It's their fault they're poor, after all.

America, Fuck Yeah!

Marxist-Socialist Jokes

I love McSweeney's humor...  A couple of my favorites from this list of Marxist-Socialist jokes:

What’s the difference between a Marxist-Socialist and a Keynesian economist?

Several things, including but not limited to the following: The Marxist-Socialist believes that workers should own the means of production, whereas Keynesians support the private ownership over the means of production. Marxist-Socialists believe that centralized government would ultimately wither away after a revolution, whereas Keynesians advocate greater government action to ensure full societal employment. Finally, a Marxist-Socialist would not be invited to a party that a Keynesian was throwing at work because the Keynesian knows that the Marxist-Socialist would throw a stink about the way the cubicles in the Keynesian’s office were arranged.

One more

A Priest, a Rabbi and a Marxist-Socialist are in an airplane that is going to crash and there are only two parachutes. The Priest says, “I have always followed the word of Jesus, so I should have one of the parachutes.” The Rabbi says, “I paid for the plane rental, so I should also have one of the parachutes.” The Marxist-Socialist says, “I would normally advocate allocating these out according to one’s means, but I’m afraid of dying and would like one of the chutes, please.”

Quotes That Make me Smile

John Stuart Mill:

I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative. I believe that is so obviously and universally admitted a principle that I hardly think any gentleman will deny it.

Also Sprach Macroadvisors

Fools

Debt Ceiling Chicken is a game for fools:

Compared to our baseline forecast, this fiscally induced “shock” creates a growth recession. Its later effects could be partially offset by an expected monetary easing but it would almost certainly be too late now for the Fed to prevent an initial slowing of growth and rise in the unemployment rate. It seems the height of policy folly for elected officials, intent on a game of budgetary chicken, to chance this downside risk during an economic recovery that was sub-par to begin with and lately seems to have faltered further. Sometimes in a game of chicken, people get injured—seriously.

A plague on both their Parties.

Obama Waves the White Flag

Hilarious (or not), Obama's Shorter Press Conference:

“I tried repeatedly to surrender to the House GOP, but they wouldn’t take even my most abject surrender. I have summoned them back to the White House tomorrow morning in another attempt to force them to accept it. If worst comes to worst, and they will not accept my surrender, I am prepared to accept theirs, but I really don’t like it, and will use the opportunity to campaign against Democratic values in the next election.”

Ha.ha.ha.... or not.

Wisconsin's Workers: Not lazy, Just Drug Addled and Tardy!

Wisconsin: Open for Business, Closed for Thinking!

So says Scott Walker's buddy Wisconsin Manufacturers & Commerce president Kurt Bauer. He originally just called them lazy:

[Bauer] suggested that manufacturing companies are hurting because of the work habits of Wisconsin employees.

Says Bauer in a recent press release, "Factories in many parts of the state have jobs available for qualified workers, but many employers complain applicants... [among other things] don't have the old-fashioned Midwestern work ethic our state is known for."

He later clarified this position. They're not lazy. Oh no, perish the thought! They're not lazy, they're just drug addicted and unable to tell time.

WMC spokesman Jim Pugh says Bauer isn't calling workers lazy, clarifying that what employers are having trouble with is finding applicants who can pass drug tests and show up to work on time.

"The challenges employers face are dramatic," he says. "In no way are we calling people lazy."

The WMC's practice of blaming workers for the failure to improve the unemployment situation when their member have received millions in tax breaks to "create jobs" (in yet another example of how tax cuts and breaks don't create jobs) is the height of hypocrisy.  Perhaps, dear Brutus, the fault lies not in our stars, but in ourselves.

Look, Ma! No Brains!!!

The Founder of Zombinomics

Krugsandra helpfully points out that the zombies are in charge of economic policy.  Again.

So we have depressed economies. What are policy makers proposing to do about it? Less than nothing.

The disappearance of unemployment from elite policy discourse and its replacement by deficit panic has been truly remarkable. It’s not a response to public opinion. In a recent CBS News/New York Times poll, 53 percent of the public named the economy and jobs as the most important problem we face, while only 7 percent named the deficit. Nor is it a response to market pressure. Interest rates on U.S. debt remain near historic lows.

Yet the conversations in Washington and Brussels are all about spending cuts (and maybe tax increases, I mean revisions). That’s obviously true about the various proposals being floated to resolve the debt-ceiling crisis here. But it’s equally true in Europe.

Famine in East Africa

It seems that millions must die because the carbon industry continues to spend money to deny global climate change.  So when does climate change denial become a crime against humanity?

Inspirational!

Yes, the beatings will continue until the economy improves...

9. All euro area Member States will adhere strictly to the agreed fiscal targets, improve competitiveness and address macro-economic imbalances. Deficits in all countries except those under a programme will be brought below 3% by 2013 at the latest.

Because expansionary austerity is such a good idea!

Jon Stewart takes on News of the World

Awesome...  Best snarky take-down of the whole mess...

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Welcome Back to Morass - News of the World Schadenfreudegasm
www.thedailyshow.com
Daily Show Full Episodes Political Humor & Satire Blog The Daily Show on Facebook

Here we go!

"WHEEEEEEEEEEEEE!!!!"

Let the US sovereign debt downgrades begin!

Egan-Jones has become the first US rating agency to downgrade the country’s sovereign credit rating from triple A to double A plus as it focuses on the rapid rise in outstanding debt over the past five years.

Egan-Jones was officially recognised in 2008 by the Securities and Exchange Commission and, unlike its larger rivals, generates revenue from institutional investors and not from issuers of debt. During the past decade it downgraded US carmakers and structured credit products before similar decisions by the big rating agencies.

Belief in Evolution by National Income

From my favorite webcomic, Calamities of Nature:

Herman Cain Demonstrates...

...that African-Americans can be racist, bigoted, hating mother fuckers just as well as white people.  Equal-opportunity hate is not a quality I want in a President...

Which Candidate would be a Great Republican President?

Color me unsurprised.  Three cop-outs and an obvious answer.

Stupid is as... Oh screw it. These people are morons!

Remember these Tea Party GOP idiots?

Turns out, they really are that stupid.  In an academic paper Reconstituting the Submerged State:The Challenges of Social Policy Reform in the Obama Era by Suzanne Mettler, the research finds that people who are the beneficiaries of government programs are completely unaware that they benefit.  Behold the Table of Ignorance!

Unbelievable.  Simply unbelievable.  Then again, maybe not.

Brad DeLong on Barack "Unraed" Obama

Cited in full:

Fiscal Policy and Governance: "No, No, No! First Loot, Then Burn..." Revisited
Greg Sargent sends us to Barack "Unraed" Obama, who is off message:

Obama makes his case to the left: If you are a progressive, you should be concerned about debt and deficit just as much as if you’re a conservative. And the reason is because if the only thing we’re talking about over the next year, two years, five years is debt and deficits, then it’s very hard to start talking about how do we make investments in community colleges so that our kids are trained. How do we actually rebuild $2 trillion worth of crumbling infrastructure.

If you care about making investments in our kids, and making investments in our infrastructure, and making investments in basic research, then you should want our fiscal house in order so that every time we propose a new initiative, somebody doesn’t just throw up their hands and say “more big spending, more government.”

It would be very helpful for us to be able to say to the American people: “Our fiscal house is in order. So, now the question is, what should we be doing to win the future, and make ourselves more competitive, and create more jobs, and what aspects of what government’s doing are a waste, and we should eliminate.” And that’s the kind of debate that I’d like to have.

This is backward, and wrong.

What Obama should have said if he wanted to stay on message:

If you are a conservative, you should be even more concerned about reducing unemployment and speeding growth right now than if you are a progressive. And the reason is that rapid economic recovery is the only thing that could materially reduce the burden of the debt over the next one, two, or three years. Policies adopted to reduce the deficit will largely fail without a strong recovery.

So if you care about reducing the burden of the debt in the future, you should care very much today about making investments in our kids, making investments in our infrastructure, and making investments in basic research to boost the long-run growth rate of the American economy--and you should care most of all about using active expansionary fiscal, monetary, and banking policies to boost aggregate demand, because without strong demand growth we will not get the strong revenue growth needed to reduce the deficit.

It would be very helpful for us to be able to say to the American people: "We in Washington care most that you have jobs and have secure jobs. You have seen that we do so by our success in rolling up our sleeves and getting down to work and dealing with the unemployment and demand crisis in a bipartisan manner. Now that we have solved our short-run unemployment crisis, we can turn to dealing with the longer run problem of putting our fiscal house is in order.

It is true that right now Washington is talking about dealing with the deficit and not about boosting the recovery. In large part that is my fault: I made a premature pivot from fighting unemployment to fighting the deficit in early 2010 because I did not listen attentively enough to my economic forecasters and to the risks that they outlined. Those risks have come home to roost.

I am sorry.

I hereby pivot back. The state of the bond market and the extraordinary confidence that global investors have in the U.S. Treasury tells me that the major step we took in the Affordable Care Act to reduce our long-run health-spending government deficit problem was worthwhile, and that dealing with the rest of our long-run fiscal dilemma can wait until 2013. What cannot wait until 2013 is an unemployment rate stuck at 9%.

I hereby pivot back from dealing with the deficit to dealing with jobs.

The REAL Confidence Fairy

Confidence that the Tea Party GOP won't drive the economy off the financial cliff is what's keeping the markets solvent these days.  The belief that the politicians in Washington on both sides of the aisle will recognize the danger of a default in time for them to come to an agreement is serving to keep things moving in the system.

But any failure to raise the debt ceiling that ultimately results in a Treasury default could spark severe consequences in the crucial plumbing system that underpins global finance, given the central role played by US government bonds.

Treasuries are widely used as collateral for cash loans in the repurchase, or repo, market. On Friday, the Securities Industry and Financial Markets Association held a meeting with staff from the big banks to discuss operational issues that could arise in the event of a default.

Analysts at Bank of America Merrill Lynch estimate 74 per cent of primary dealer repo financing, about $2,100bn, involves Treasury collateral. Money market funds also place significant amounts of cash in the repo market, and a default scenario would create strains for this sector if investors start to pull out their cash.

A downgrade of Treasuries from their triple A or haven status could well ripple through the financial system. “I think people view that as a risk, I know for a fact that we do consider it a risk in terms of all financial assets”, said Rick Rieder, chief investment officer for fixed income at BlackRock.

Modern financial theory starts from the premise that there is a risk-free rate of return available, backed by the “full faith and credit” of the world’s superpower. It is the reference point for pricing other assets.

“In short, we would be back to 2008, but without the US able to bail out the system.”

But the Tea Party GOP doesn't care.

(not quite so) Fair and Balanced

Murdoch refuses to talk about the News of the World scandal on Fox Noise and the anchor lets him off the hook.  Nice...

"Tell me what you make..."

The best defense of the teaching profession ever!!!!

"Meat... They're made entirely of Meat..."

I love this story...

Living that Outlier Lifestyle!

Welcome to the healthcare spending outlier!

Source

On Ron Paul's Gold Fever

"Ron Paul on line two for you, Mr. Beck!"

The Economist schools the Paultards on basic market economics (again):

Gold is a store of value. It's an asset that can be and often is held as a store of wealth. But while gold is not money, it shares a very important characteristic with money: its value (apart from limited industrial uses) is derived from the market's perception that it has value. This is the nugget of truth in Mr Paul's comments. There's nothing all that special about gold except for the fact that over much of human history people have behaved as though there is something special about gold. That belief (and the fact that it's on earth in sufficiently limited quantities) is what makes gold a useful store of value. People think it's valuable because people think it's valuable.

But that's precisely the way that fiat money works. People believe the flimsy pieces of paper we call dollar bills are worth some basket of real goods only because everyone else believes the same thing. The crucial difference in the perception of value is that new gold can only be obtained at great difficulty while new bills can be produced by the truckload at virtually no marginal cost. Gold's inherent supply limitations supported the popular confidence in its value. And when economies began switching to paper money, the link between the new confidence-based currency and the old confidence-based currency was a very useful way to build public faith in the new confidence-based currency.

The God Complex

Tea Party economics explained.

Ireland is the New Greece

Erin go bragh indeed...

IRISH DEBT was cut to “junk” status by credit rating agency Moody’s, last night, hours after the Minister for Finance said that measures to aid Greece proposed by euro zone finance ministers on Monday night would benefit Ireland.

The resulting downgrade is expected to lead to a sell-off in Irish bonds when markets open today as many lenders will only hold bonds considered to be investment grade by privately owned rating agencies such as Moody’s.

On the Shame of Being a Freshwater Economist

Oh the shame...

But I don’t think it’s just political bias: part of what’s happening, I’m sure, is intellectual embarrassment. These people come from a movement that declared, with great arrogance, that Keynesian economics was dead – then failed to produce a workable alternative, and now finds itself in what is very recognizably a Keynesian world. Recognizably, that is, to everyone but them, because admitting that Keynesian-type thinking is useful now would just be too humiliating.

The Other Kind of Prison

Upton Sinclair:

There is one kind of prison where the man is behind bars, and everything that he desires is outside; and there is another kind where the things are behind the bars, and the man is outside.

On the Absurdity of the Golden Ratio

The House Tea Party GOP are insisting on a split between spending cuts and tax changes of 85% - 15%.  That's 85% from cuts and 15% from non-margin-changing closure of loopholes.  Where, you might ask did they get this magic ratio?  Was there a team of economists pouring over data for weeks on end to arrive at the optimal plan?  Funny...  This is the Tea Party GOP we're talking about here.  Research is for the weak.  We rely on common sense.  You know, common sense that the sun revolves around a flat earth where people rode dinosaurs to work 5,000 years ago.

No, don't be confused by facts Tea Party GOP members, this supposed magic ratio comes from one paper, not peer reviewed mind you, but a working paper "published" by the discredited economists at The American Enterprise Institute (no agenda there!).  The "study" was based on data that the IMF rejected for "[failing] to identify consolidations when governments took substantial actions to reduce the deficit, but the actions were associated with severe economic downturns”.  So the entire Tea Party GOP plan is built on a lie.  Who's surprised?  Anyone?  Anyone?  Bueller?  Bueller?

But wait, it gets better (you knew it would, didn't you!).  If you look at the historical data for tax increases versus spending cuts, Tea Party GOP Presidents presided over far larger tax increase to spending cut plans than did Democrats.

From Ezra Klein and The WaPo

It's an amazing fantasy world we're all being forced to live in, isn't it?  Just amazing.

(Updated with AEI funding link from Dave, Thanks Dave!)

A Morning Tonic of Adam Smith

Adam Smith, more than just an Invisible Hand

Yes.. That Adam Smith... From Chapter III of The Theory of Moral Sentiments entitled Of the corruption of our moral sentiments, which is occasioned by this disposition to admire the rich and the great, and to despise or neglect persons of poor and mean condition

To attain to this envied situation, the candidates for fortune too frequently abandon the paths of virtue; for unhappily, the road which leads to the one, and that which leads to the other, lie sometimes in very opposite directions. But the ambitious man flatters himself that, in the splendid situation to which he advances, he will have so many means of commanding the respect and admiration of mankind, and will be enabled to act with such superior propriety and grace, that the lustre of his future conduct will entirely cover, or efface, the foulness of the steps by which he arrived at that elevation. In many governments the candidates for the highest stations are above the law; and, if they can attain the object of their ambition, they have no fear of being called to account for the means by which they acquired it. They often endeavour, therefore, not only by fraud and falsehood, the ordinary and vulgar arts of intrigue and cabal; but sometimes by the perpetration of the most enormous crimes, by murder and assassination, by rebellion and civil war, to supplant and destroy those who oppose or stand in the way of their greatness.

Pardon me, but you can take your Structural Unemployment Theory and SHOVE IT!

Attack of the Obama Tea Party GOP Economic Zombies!

It's not fucking structural. Krugsandra explains:

Why is unemployment remaining high? Because growth is weak — period, full stop, end of story. Historically, low or negative growth has meant rising unemployment, fast growth falling unemployment (Okun’s Law).

And if we had a structural unemployment problem, we’d be seeing labor shortages and rising wages. We aren’t: wages actually fell last month.

But since our Galtian Overlords have convinced America that we're going to grow our way out of recession and unemployment through budget cuts (expansionary austerity, aka GOP Economics Zombie Lie #28) we're stuck trying to solve a very solvable problem with the wrong fucking tools.

But I’d add a second factor: the truth about our slump — that we know how to fix it, that we could fix it in a year if we had the political will, but that bad ideas and worse politicians are standing in the way — makes people uncomfortable. They want to believe that we have a deep problem, and that’s why we’re in such a mess.

Did you Read it before you Signed it, Michelle?

Michelle Bachmann (R-Toontown) recently announced that she had signed “The Marriage Vow – A Declaration of Dependence upon Marriage and Family” but I have to wonder if she read it before she signed it.  In it, the "vow" declares as fact:

Slavery had a disastrous impact on African-American families, yet sadly a child born into slavery in 1860 was more likely to be raised by his mother and father in a two-parent household than was an African-American baby born after the election of the USA's first African-American President.

The statement references a non-peer-reviewed paper "published" by The Institute for American Values, a right-wing, anti-family organization.  What the paper fails to note is the countless examples of African-American families destroyed by the institution of slavery.  It was common practice to split family units up to ensure greater docility among the slave population.

Bachmann stands with the slave owners.  Well done, Michelle!

Not (yet) the Worst President Ever

Eli at Firedoglake:

No, I’m not ready to crown Barack Obama the Worst President Ever just yet, but consider this:

Yes, George W. Bush wrecked our economy, destroyed New Orleans, turned a budget surplus into massive deficits, ignored warnings of a major terrorist attack and used that mistake to lead us into two disastrous military quagmires…

But he also pushed relentlessly for conservative policies and delivered for his base with war, deregulation, tax cuts, environmental rollbacks, and an army of right-wing ideologues embedded in the federal government and judiciary. He failed to privatize Social Security, but not for lack of trying.

Barack Obama, on the other hand, inherited a mess rather than creating one. But not only has he failed to create jobs or restart the economy, he has paid only lip service to progressive policies and betrayed his base at almost every turn.

Instead of using the financial crisis or the current debt hysteria to push through a progressive agenda like Bush used 9/11 to push through a conservative one, he’s using them as an excuse to capitulate to Republican budget chickenhawks, and even to cut Social Security and Medicare.

FDR told his base, “I agree with you, I want to do it, now make me do it,” while saying of the corporate right, “I welcome their hatred.” Obama has done the exact reverse.

So which is worse? The president who serves his base and sets the country on fire, or the president who stiffs his base and fights fire with gasoline?

Krugsandra: Living in Austerityville Already!

Federal Government Employment (the big spike is census workers)

Government Expenditures

Krugsandra:

Basically, government has been shrinking for the past year — in practice, fiscal policy has been doing exactly what Republicans say it should be doing. Where’s my confidence fairy?

And where, oh where, oh where are the jobs????

It's the Revenue and the Pentagon, Stupid!

Did you Ever Wonder...

...what it costs to own 150,000 foreclosed homes?  I mean, think about it.  That's a lot of upkeep.  The mowing alone...

Say only half of the homes have lawns, a conservative estimate, that's still more than 75,000 lawns.

• 153,000/2
• X 6 (a six-month grass-clipping season)
• X 2 (mowing twice a month)
• X $40 (a reasonable guess at how much it costs to mow a lawn)
• = $36.7 million

Again, this is very rough estimate, but that's a whole lot of money to spend on lawn care.

Expansionary Austerity: Still Dead!

From a new IMF working paper, the idea of expansionary austerity is still dead, contrary to what the Tea Party GOP zombies (including Zombie President Obama) assert:

[E]stimation results based on fiscal actions identified directly from contemporaneous policy documents provide little support for the expansionary austerity hypothesis. In particular, we compile an international dataset of fiscal policy adjustments motivated by a desire to reduce the budget deficit and not in response to current and prospective economic conditions using the Romer and Romer (2010) historical approach. Based on the fiscal actions thus identified, our baseline specification implies that a 1 percent of GDP fiscal consolidation reduces real private consumption by 0.75 percent within two years, while real GDP declines by 0.62 percent. The baseline results survive a battery of robustness tests. Our main finding that fiscal consolidation is contractionary holds up in cases where one would most expect fiscal consolidation to raise private domestic demand. In particular, even large spending-based fiscal retrenchments are contractionary, as are fiscal consolidations occurring in economies with a high perceived sovereign default risk.

Yes, kids, cutting spending during times of economic retrenchment causes more harm than good and, in the long run, increases the debt.  But since that deviates from "common sense*," it must not be true.

Our collective national denial of reality will continue until expansionary austerity works.

*“Common sense is merely the deposit of prejudice laid down in the human mind before the age of 18” --Albert Einstein, Nobel Prize Winning Scientist & Socialist

Amazon Hands me $80

Happy Happy Joy Joy!!!!!

I've been using Amazon for a long time.  A very long time.  My first order with Amazon was in 1997.

I've been an Amazon Prime member for many years.

So when Amazon announced their cloud drive service, I was all over it.  I'm a long-time Amazon junkie (my motto is if you can't buy it from Amazon then it's not worth having...) so I was delighted to see Amazon leverage their awesome cloud infrastructure to deliver storage for all my MP3s and AACs.  I figured that 100GB for $100/year was a reasonable deal.

So I uploaded all my music to the cloud (it took about a week) and was happy to have it there.  I can access it from any web browser or my Android phone.  I use it at work, on the road, at home.  It's nice.  Bare-bones, but nice.

A nice feature that also tempted me was the fact that all new Amazon MP3 purchases would be stored for free.  The old stuff, you'd have to pay to store that, but any new files would be stored at no charge.

Well imagine my surprise when I got an e-mail this morning with a change in policy:

Hello,


Thanks for your prior purchase of the 100 GB Amazon Cloud Drive storage plan. Beginning today, all paid Cloud Drive storage plans include unlimited space for MP3 and AAC (.m4a) music files at no extra charge for a limited time. Learn more here:


http://www.amazon.com/mp3gettingstarted


Because your current plan now includes unlimited space for music, we're refunding the difference between the cost of your original Cloud Drive plan of 100 GB and the cost of a current 20 GB plan ($20), which is the least-expensive Cloud Drive plan that includes unlimited space for music. A refund of $80 will be issued to the card originally used for your Amazon Cloud Drive storage plan. Refunds are typically completed within 10 business days and will appear as a credit on your credit card statement.


We hope to see you again soon!


Sincerely,


The Amazon MP3 Team
http://www.amazon.com/mp3

I didn't have to do a thing.  They just grandfathered me into the plan.  I do love me some Amazon!!!!