iCount

Tom aka Rusty Rustbelt



Perfect Babies and C-Section Complaints



Some issues are like spring flowers, always returning.



The "too many C-Sections" debate is recurring again, raising issues of cost and clinical judgment (some women want sections for cosmetic reasons).



Problem is, Americans expect perfect babies, and if babies are not perfect it is time to call the lawyers.



(John "lover boy" Edwards became very rich filing junk science Cerebral Palsy cases against Ob-gyns.)



The last time I did a cost study on an Ob-gyn practice, all of the contribution margin from Ob was going to malpractice premiums, most of the expenses and all of the physician incomes were derived from gyn services (as I remember the premiums were about $140,000 per physician). So why deliver babies?



Certainly there is malpractice, and it is (in my opinion) malpractice not to do a quick section on a distressed baby (as one of my doc friends said, "we were all trained in the 2 minutes C-section drill). Proper compensation for legitimate cases is important.



Ob-gyns are becoming employees are a means of shifting risk and cost to hospitals and integrated networks. Difficult cases are referred up the specialist chain, often to academic centers (often many miles from home). Medical students are avoiding OB as a specialty.



This is no way to run a health care system, and the plans moving through Congress do not address these issues.



Tom aka Rusty Rustbelt

by Rdan (noreply@blogger.com) on March 12, 2010 10:00 AM

Put away the lamp: There is at least one honest person in Congress. His name is Dennis Kucinich.



Congressman Kucinich made a bit of news a couple of days ago when he said on "Countdown" that he would not change his mind about the healthcare deform bill: He voted "no" before because the bill lacked "a robust public option" and did nothing to control insurance companies - and as nothing was substantially different now, he would vote "no" again this time. In the face of all the pressure, Dennis Kucinich has chosen to do what lefties are not supposed to do, what we're often denounced by our own side for doing: He is standing on principle, thus opening himself to the condemnations of those "realists" who negotiate away a dollar in the hope of getting a nickel, all the while patting themselves on the back for their "pragmatism."



I think you can tell a lot about the atmosphere of a website by the reaction to the news. At Firedoglake the comments were generally although not exclusively supportive, as they were at Crooks & Liars. On the other hand, at TalkingPointsMemo the response was overwhelmingly negative - including calling him "a loser elf" at least twice. At DailyKos it wasn't much better and the entirely predictable "just like Nader" crap quickly emerged, a stance also embraced by Obamabot-in-Chief Markos Moulitsas. Moulitsas, who "Countdown" apparently regards as embodying the whole of the "left wing blogosphere," was brought on the show the next night seemingly for the specific purpose of denouncing Kucinich as "Nader-esque" (defined as "unrealistic" and "selfish," even though those two terms seem at odds with each other) and "reprehensible."



Well, I am with Kucinich 100% on the principle: The bill - among other criticisms - is a giveaway to the insurance companies, does not protect consumers, will not lower or even control costs, foolishly and wrongly equates health insurance with health care (which means the claims of expanded access to care are clearly and I believe seriously inflated), and locks in the dominance of the insurance companies, thereby inhibiting future hopes for actual change. Bottom line, it sucks.



That said, I am - based on my own political calculations - 50-50 about the actual act of voting no. I have said on more than one occasion and in more than one place that I think the best outcome would have been for the bill to fail because a significant number progressives in the House and the Senate stood up and said they would not support the bill because "it's just not good enough!" But despite Kucinich's stand, drawn from his own conscience and judgment, if the bill fails it will not be seen as having failed because it sucked, not because it just wasn't good enough, but because the right wing killed it. As a result, I am honestly not sure if the better outcome at this point would be for the bill to pass and even further entrench the power and control of the insurance companies or for the bill to fail and to further entrench the idea - already embraced by some even before a failure has occurred - that actual health care reform can't be passed over the resistance of the right so forget about it for another 15 or 20 years. That is, one option makes genuine reform more difficult; the other makes people think genuine reform is more difficult. A true Morton's Fork.



But thinking it through as I write this, it seems to me now that if standing on principle and abandoning principle merely lead to variations on the same unfortunate outcome, hell, you might as well stand on principle and damn the vituperation. So yeah, I'd vote no.



Important Footnote: Whenever Kucinich comes under the baleful glare of the lefty blogosphere, there are sneering references to his "failure" as mayor of Cleveland. As I strongly suspect those come mostly from people who are too young to remember the events (which took place more than 30 years ago) and therefore actually have no idea what the hell they are talking about, a quick history lesson:



In 1977, Dennis Kucinich became the nation's youngest big-city mayor. The big issue during his term was the effort by banks and businesses to force the city to sell its municipal electricity authority, Muny Light - because those banks and businesses were invested in Muny Light's commercial competitor. Kucinich, who had been elected on a pledge to stop the sale, resisted.



Ultimately, in 1978 the banks tried to force the city to sell by calling the city's loans and refusing to extend credit without the sale of the utility. Kucinich didn't blink and the city went into default.



It cost him the mayor's office and almost his entire political career. But he did prevent the sale. And 15 years later, he was rehabilitated when city officials of Cleveland, which today still owns Muny Light (now called Cleveland Public Power), said Kucinich's decision had saved the city and its residents hundreds of millions of dollars over that time.



We all should be such "failures."

by LarryE (noreply@blogger.com) on March 12, 2010 09:14 AM

The opening chapter of Jack Cashill’s Popes and Bankers relates his version of the tale of Melonie Griffith-Evans, a woman who in 2004 borrowed her way to losing her house.  Ms. Griffith-Evans accepted loans in order to buy a house priced at $470,000 that resulted in her having to pay “roughly $3,500 a month.”  Of course, she ends up not being able to pay those loans, and—since ex post is ex ante—the result must be All Her Fault.  Mr. Cashill allows as to how a “traditionalist” might “if feeling churlish, talk of  Griffith-Evans as a ‘predatory borrower.’ ”

Working solely from the information as provided by Mr. Cashill, let us test the validity of his hypothesis, assuming the “traditionalist” were sane.

Taking Mr. Cashill at his word on that “roughly $3,500 a month” and assuming that the ancillary loan is described correctly, Ms. Griffith-Evans would have to have taken out the following loans to buy the house for $470,000:

1. A $  94,000 (20% of the price of the house, an amount Ms. Griffith-Evans did not have in savings) loan.  This loan—which I’m guessing was for 30 years was offered at the rate of 12.5%.  (Mr. Cashill stipulates this.) Presumably, it was unsecured by the property itself.
   1. This would produce a payment due of approximately $1,000 per month.
2. A $376,000 (80% of the price of the house) 30-year fixed-rate mortgage, securitized by the property, at 7.00%
   1. This is the only way to total $3,500 per month if we assume Ms. Griffith-Evans borrowed the entire 20%, which seems to be Mr. Cashill’s contention.  Otherwise, she only borrowed around $57,000 and made a down payment of around $35,000—certainly not the actions of a “predatory borrower.”

All of this excludes the closing costs or title searches or inspections or any of the other minutiae that is required before such loans are approved. But the process is transparent in Mr. Cashill’s tale, so we should assume that is the way he wants it to be.

Strangely, the details Mr. Cashill offers do not jibe with that. He claims that Ms. Griffith-Evans “took out a fairly standard 8.5% loan on 80% of the purchase price.” And—in a case of poor writing that betraying poor thought—he collaterally notes that the $3,500 payment due was “increasing as the loan was adjusted.”  This would lead to an initial combined payment of approximately $3,900 a month—more than 10% higher than “about $3,500,” though still significantly below the rental costs of “about $5,000 to $6,000 per month” for apartments that, per Mr. Cashill, “suited her fancy.”

Mr. Cashill is determined to argue that the loan Ms. Griffith-Evans took out was not “predatory,” but was an 8.5% mortgage rate “fairly standard” in 2004?

 

 

It doesn’t seem to be. Even the highest rate for conventional mortgages in 2004—6.29%—is  more than 220 basis points (2.20%) below the rate of Ms. Griffith-Evans’s loan, and that is excluding whether her rate was itself adjustable.  (It is unclear from Mr. Cashill’s account whether the 8.50% mortgage, the 12.5% additional loan, or both were adjustable.)  Or, to put it simply, the lender was charging Ms. Griffith-Evans more than a 35% premium for her loan.  Quite a premium to accept if one wants to be a “predatory borrower,”

One might fairly wonder why she was not offered a loan for the entire amount at a fixed rate that would produce a loan payment due of about $3,500 a month, eliminate the risk to the second, unsecured lender, and leave the primary mortgage lender with a less encumbered “owner.” (That rate would be 8.10% for a $3,500 per month payment, or—given Mr. Cashill’s figures—a loan of 9.30% for the entire amount.) Certainly, if the primary lender honestly believed the property was worth $470,000, they would have been willing to offer a loan for such an amount, with the attendant Mortgage Insurance.

Mr. Cashill wonders about none of those actors, either, however. Tis Ms. Griffith-Evans who is wholly at fault, from the Very Christian perspective presented.  Somehow, it was venal of her to elect to pay $3,500 a month for a house for her family, instead of half again more for an apartment.

I raise the possibility that the primary lender didn’t believe the house was worth $470,000—or even anything beyond $375,000—solely because the evidence runs that way.  There is first the fact that the lender was not willing to loan Ms. Griffith-Evans the entire amount—or even within 20% of  it—against the value of the property. (We can safely conclude this because the alternative is to believe that she, given the choice between paying 8.5% and paying 12.5%, honestly preferred the latter.)  The second piece of evidence comes from Mr. Cashill, who declares that the lender was “embarrassed” into allowing Ms. Griffith-Evans and her children to stay in the house—“presumably free of charge” (quite the presumption, that)—“while she tried to find a buyer.”  (Those of us who do not understand this behavior from a “predatory borrower” probably don’t understand Christianity either.)

Do I need to note that she failed to find a buyer? And that the lender clearly didn’t have one either, for—as Mr. Cashill continues—“When she failed to find one, the lender gave her still more time to find an apartment.”  The benevolence of lenders is legendary, to be certain, but this one is clearly destined for sainthood.

The world in which I live—clearly one with a different color sun than that of Mr. Cashill in this chapter—is one in which businesses make decisions based on revenue and cash flows.  So when the seller of the house accepted Ms. Griffith-Evans’s original bid, even with its dodgy financing, during the peak of the housing market, we must presume that they did so because they expected to receive more net money, easier, from that sale than from any other bid.  And we must presume the lender was fully aware of what they were doing—and charged usurious interest rates (compared to the market) accordingly.

So we have a situation in which, ex ante, all parties got the best deal they could, given the information they had.  Ms. Griffith-Evans paid around $1,000 a month less than she would have paid in rent, even  before any tax benefits.  The seller received a price to which they agreed, and which they represented as fair market at the time—with a lawyer doing a title search, a home inspector, and a home appraiser all corroborating that the property and the structure were as represented, and that the price was reasonably on the market (even if it wasn’t, or soon thereafter was not), all of whom were paid for their expertise and conclusion.  The lender received a significantly higher interest rate than they would have from another buyer, which presumably compensated them for their additional risk—and they had the property in reserve.

In the world in which the sun is yellow and Ms. Griffith-Evans is a single mother—not General Zod—economic agreements were reached consensually among the parties and of whom except Ms. Griffith-Evans were compensated professionals. Strangely, in the “traditionalist” world of Mr. Cashill, the one person in the entire series of transactions who is most likely to have been deprived of information is the one who should be described as “predatory.”

After a start like this, I can’t wait to read the rest of the book.

by Ken Houghton (noreply@blogger.com) on March 12, 2010 03:45 AM

"Mr Geithner warns that US hedge funds, private equity groups and banks could be discriminated against if proposals to restrict the access of EU investors to funds based outside the 27-country bloc are included in the final law." Geithner Warns of Rift Over Regulation



as declared over this:



"Germany and France on Wednesday called on the European Union to consider banning speculative trading in credit default swaps and set up a compulsory register of derivatives trading." Call For Ban ON CDS Speculation



Once again Geithner has shown whose interests are more important. It certainly isn't Main Street when it comes to exports/imports. God forbid, some other country begin to regulate Wall Street though!

by Rdan (noreply@blogger.com) on March 12, 2010 02:55 AM

Okay, so it's not tomorrow. Moving on....



In a comment on a post from the beginning of the month, Tim said

I don't mean to sound like a 'Socialist' or worse, a dreaded 'Marxist', but I don't really know any other way to say this: Most of us are forced to sell and rent something called labor to those who 'own' the means of production in order to survive.

Well, sounding socialist or Marxist or whatever makes it no less true. (And what's wrong with sounding socialist, anyway?) As I noted in the post from this past weekend to which this is a follow-up, an article at DailyFinance.com by Charles Hugh Smith, who writes on economics and market analysis, described the economic problems as "structural." And indeed they are. They are part and parcel of the way our economy, our society, is structured. And whenever we let down our guard, whenever we relax, whenever we pause in presenting a constant, active opposition to that structure, a continuing counterweight to its tilt, the inherent bias in that structure - a bias toward wealth over working and owners over workers, a bias toward concentration of ownership and wealth and therefore power, a bias toward increasing inequality - reveals itself.



Last September, management consultant Peter Cohan, also writing at DailyFinance.com (it's interesting how the financial pages often contain the most damning information), noted that in 2008, income inequality "pierced its previous record high."

Fresh census figures reveal that the ratio of the incomes of the top 10 percent of Americans - over $138,000 a year - to those at the poverty level - $12,000 - was 11.4 times. (The previous record was 11.22 in 2003.)

After referring to how well the richest 1% had done, he went on to say:

Too bad things were so much worse for the other 99 percent of Americans. With median incomes unchanged since 1997 and prices rising, consumers made up the difference by borrowing on their homes and credit cards. Then, at the end of the year, the current recession kicked off, throwing millions out of work. This drove median income down from $52,163 in 2007 to $50,303 in 2008, wiping out a decade's worth of gains and bringing median income down to its lowest level since 1997.

For his part, Smith expressed that same idea another, broader, way, presenting how income levels had changed over the 25-year span from 1975 to 2001. (The figures are all in 2001, inflation-adjusted, i.e., "real," dollars.)



The bottom 20% saw household income increase by 10.7% over that time (to a whopping average of $14,000 a year). For the middle 20%, the increase was 29.4%; for the top 20% it was 73.8%. For the richest 5%, the increase was 108%: Their household income more than doubled to an average of over $280,000 a year - or from about 10 times that of the lowest 20% to 20 times as much.



Remember, these are real dollars. So to put it a different way, in 2001 the richest among us could buy twice as much stuff as they could in 1975. For every quart of milk the poorest 20% could buy in 1975, they could buy 11 quarts in 2001. For every 10 pounds of Beluga caviar the rich could buy in 1975, they could buy more than 20 pounds in 2001. The haves have ever more and the havier your were, the havier you are.



That is the very essence of class warfare: "Them that has, gets." Yes, of course the rich and their acolytes among the politicians and media just love to accuse the left of engaging in the supposedly self-evidently evil of "class warfare" whenever such truths are told, but as I am far from the first to say, the reverse is true. There has been an unrelenting war waged by the rich against the poor and the middle class - what little of the latter remains today. Over the past 30-plus years, that war has been waged with particular virulence and effect as the resistance to it has been alternatively undermined, misled, and simply beaten down to the point of exhaustion.



There was a period of time - truly not that long ago - when income inequality was actually declining and economic growth was benefitting more than the few, a period running essentially from the end of World War II to the start of the Reagan administration.



The two graphs on the left make that abundantly clear. The top one (from a post at Demos.org) is based on an analysis of Census Bureau data by the Economic Policy Institute. The bottom one, also via Demos.org, is from the Congressional Budget Office.



It's true that the measures are slightly different (changes in real income versus changes in after-tax income, with the latter lacking an indication it was adjusted for inflation), but even after allowing for that the difference is stark and undeniable: For more than three decades the many have gained little and the few have gained much.



Our current straits only emphasize the fact. Here is yet another item from DailyFinance.com, this one referring to a study done at the Center for Labor Market Studies at Northeastern University:

"A new report on the impact of unemployment and underemployment during the Great Recession suggests that higher-paid workers have enjoyed practically full employment during the worst economic conditions in 80 years, while the lowest-paid workers have suffered through an unemployment rate above 30%."

At this point it's necessary to be absolutely clear: This worsening inequality is not because workers have not been productive. In fact, productivity has soared of late:

The Labor Department revised upward its gauge of productivity growth for the fourth quarter of 2009 from an annual rate of 6.2 percent to 6.9 percent. Unit labor costs, it said, fell 5.9 percent, as compared to its original estimate of 4.4 percent....

For all of 2009, productivity rose 2.9%, the biggest increase since 2003.



Productivity, the measure whose increase was supposed to be the basis for improving wages and income for ordinary workers, has more become a measure of how the bosses use the crappy labor market to squeeze more work for no more (or less) pay out of those who still have jobs.



And let's also be clear that it is not because the rich, the highly-paid who have barely been touched by the recession, are "worth more." Quite the contrary, reported the Guardian (UK) a bit back:

Hospital cleaners are worth more to society than City bankers, according to a report that shows many low-paid workers increase the wellbeing of the nation more than the high-flying and much better-paid financial-sector staff.



The New Economics Foundation said today that a study of the social impacts of several jobs revealed that City workers, advertising executives and tax advisers destroyed value, while hospital cleaners, childcare workers and staff in the waste-recycling industry gave much more to the country than they took out.



The thinktank said it had found a way to calculate how much someone should be paid in relation to the value they create through a series of measures including conventional economic returns, environmental impacts, and knock-on effects for jobs and wellbeing in society.

No, worsening inequality is not because of slack workers - who are more productive than ever - and it is not because of the supposed greater contributions to society of the rich - who often destroy more value than they create. The inequality exists and persists because it is inherent in the structure of our economy. And it increases whenever we cease a relentless pushback against it - because such an increase is also inherent in that same structure.



That's why workers striving for better wages - or just to avoid seeing those wages shrink - are "selfish" or, at best, "unrealistic." That's why unions are "outmoded" if not "a threat to our way of life." That's why a company that undermines communities by shutting down facilities and demanding givebacks and throwing people out of work because they can get others somewhere else to work cheaper is simply engaging in "sound business practices" that it would be inane to ignore. That's why the unemployed poor are suspected of being "lazy" or preferring to "live off welfare" while the idle rich are venerated as deserving all they have. It is the nature of the beast, the beast of American capitalism - a beast that, as Michael Moore said in an interview with the Guardian,

"is an evil, and you cannot regulate evil. You have to eliminate it and replace it with something that is good for all people and that something is democracy."

Or, I would say more exactly, democratic socialism. I expressed some of my ideas of what that term means about a year ago but rather than going over that here I want to end with something I wrote in a post a few months before that one:

Look, the bottom line - a particularly apt reference here - is that what we have been through and are going through has proved that the "free market" is a failure. Without public oversight, without public regulation, without direct input and yes, direct aid from the public, the "free market" will regularly collapse into a greed-lined pit of its own making, dragging the dreams (as well as the homes, jobs, and savings) of many millions who bear none of the blame along with it.



We have two choices: We can accept that or we can turn away from it to an economy based on some version of democratic socialism. An economy, as again I said the other day, "built on need, not greed." ... I've long favored the idea of the I Ching that, as one form puts it, "the only ultimate answer is that there is no other ultimate answer." I don't believe in true utopias and no society, no social or economic system, is perfect. But dammit, some are better than others and democratic socialism is better than what we have.

And while I have been known to argue with myself from time to time, I can't argue with that.



Footnote: Earlier today, HousingWatch.com put up a piece on the "good news" that mortgages foreclosures were declining. Later on, the site had to put up a second article correcting the first as "misleading." The news was not as good as it seemed.



Indeed, the "good" news was that in February, the rate of foreclosure filings rose at the slowest rate since 2006. Foreclosures were still going up, there were still more and more properties under foreclosure, but that rate at which that number was climbing had dropped.



More bluntly, things are still getting worse, just more slowly. That is not good news. Any more than businesses dropping fewer jobs than expected was. Tell me about fewer people losing their homes, tell me about an increase in the number of jobs, and that will be good news. but don't tell me that things are getting worse but more slowly and expect me to cheer.



And another Footnote: Thanks to Avedon Carol for the link to the FDR footage; for a bit of background on how it came to light, check out the Guardian's interview with Michael Moore, linked above.

by LarryE (noreply@blogger.com) on March 12, 2010 12:32 AM

Via TPM, uhh, not so much. According to the CBPP, it’s the same old GOP tune: slashing social programs, raising taxes on 3/4 of American households while providing massive tax cuts to the very wealthy, punishing work, and, of course, ballooning the deficit rather than cutting it. Sounds like your typical “serious” GOP plan to me.

by tgirsch on March 11, 2010 11:05 PM

$238 billion to maintain very low capital gains and divdiends rates (mostly of value to wealthy who receive most of the capital income);

$359 billion for extension of the child tax credit, refundability and AMT rules

$359 billion for so-called "marriage penalty relief"

$18.4 billion for education incentives



The tax measures in the purported "temporary recovery measures" cost just less than $100 billion and include many provisions that are not going to do anything to stimulate the economy, in all likelihood, such as more expensing provisions for small businesses, more bonus depreciation for certain properties, and more tax credits for certain types of investments.



Additional "tax cuts" touted in the budget are similarly hard to justify since they increase the "consumption tax" features in the income tax--expanding the "saver's credit" is a too costly $27 billion over ten years; and expanding the "american opportunity tax credit" is another $58 billion.



The "tax cuts for businesses" include two items that should hit the trash heap--hopefully Sandy Levin is going to toss these out:



almost $8 billion for eliminating capital gains taxation on investment in small business stock (this will be just another tax break to equity funds and all those hugely wealthy investors, not a break for little businesses or little guys)

$70.5 billion for making the research & experimentation credit permanent- (this is another item that doesn't belong in an income tax--letting companies get a credit for R&D means that something that is just a normal cost of business is treated as reducing the tax owed on a dollar for dollar basis. That's a nutty policy to put in place, but it is something that the corporations have lobbied for year after year after year, and Congress keeps giving it to them)

The biggest revenue raiser is capping itemized deductions, which would garner almost $300 billion over 10 years, but the Dems in Congress have practically rolled over on that one already.



[hat tip to taxprof]



Rdan here: Final vote passed the bill.

by Rdan (noreply@blogger.com) on March 11, 2010 07:00 PM

by Linda Beale



The Chicago School--why does anybody still listen to it?

I have frequently written here about the problems of "freshwater" economics--the school personified by Milt Friedman and the extremist "free market" ideology that views government as the enemy, the "markets" as always right, and any public role in economic development as "socialism". As I've noted, this ideology misses many points about the role of government in creating a space where markets can function as they should and where individuals can have maximal personal liberty while pursuing better lives and respecting a societal decision that valuing each individual means allocating society's resources in ways that support, rather than brutalize, those at the bottom.



The Nieman Foundation, connected with Harvard's journalism school, has an interesting watchdog website that includes a number of controversial articles raising questions about the way today's media tend to accept without questioning the "received wisdom" of the past (including the ideological views of the "free market" right). As part of a series on the economic collapse, the site includes an article by Henry Banta (a partner at Lobel, Novins & Lamont) noting the consensus developing among a small but diverse group of economists, professors, and those interested in how the economy works about the failure of efficient market theory. That's a post worth reading, since it focuses on this issue. (My posts, perhaps to readers' chagrin, tend to throw these criticisms in as asides in the course of analyzing one position or another being put forrward unthinkingly by proponents of that theory.). Enjoy. Henry Banta, Republicans are locked in a passionate embrace with a corpse and won't let go, Nieman Watchdog, Feb. 11, 2010.



crossposted with ataxingmatter

by Rdan (noreply@blogger.com) on March 11, 2010 12:42 PM

Today I was thinking about tightening cycles in emerging markets; and more specifically, about that in China. Because let’s face it, China matters. China matters to the rest of Asia via competition for export income. China matters to Europe via competition for jobs. China matters to Brazil via domestic production via imports. China matters.



The inflation pressures are building in key emerging economies, especially in the BIICs (Brazil, India, Indonesia, and China) – see this previous post regarding my new acronym, and this article at the Curious Capitalist (curiously posted just shortly after my post), which leaves my omitted “R” but relays the intuition behind the second “I”.



Although the inflation is not prevalent in any BIIC except India, really, I wanted to comment about why it will build…quickly.



First round, the construction of consumer prices is heavily weighted toward food and energy costs across the BIICs. Indonesia, India, and China are highly susceptible to food price shocks (either driven by shortages or demand growth). Expect this as a first-round driver of inflation as the global economy recovers further. It’s already happening.



Second round, the BIICs are growing quickly and nearing, or are already at, potential. Annual industrial production growth has recovered or surpassed its pre-crisis rate in China, Brazil, and India, 19%, 16%, and 17%, respectively. This is expected, given the drop-off in world trade (an illustration can be found from this May 2009 pos), but unsustainable as the output gap closes.



Third round, interest rate differentials. This year, the BIICs' central banks are expected to raise policy rates. In fact, Brazil, China, and India have already boosted reserve requirements. But with US rates expected to stay low for an “extended period”, international interest rate differentials will change and monetary flows will shift. Capital inflows can lead to inflation if not properly sterilized.



To date, inflows are not properly sterilized, as evidenced by the ongoing accumulation of reserves and rising money supply growth (again, I refer you to my previous post on M1 growth rates.



The chart above illustrates the one-year-ahead nominal interest-rate differential between the 2yr forward government rate for each respective BIIC country versus the 2 yr forward US Treasury rate. The forward differentials for China and India are on a steady upward trajectory, while those for Brazil and Indonesia are simply steady. I believe that this appropriately represents the sterilization efforts and monetary policy management on the part of the BIICs’ central banks: more managed in Brazil and Indonesia, not as much in China and India.



So where does this analysis leave us? With a very interesting policy mix in the emerging market space. In fact, in my view this is the riskiest part of the emerging market cycle: the recovery. If policymakers get this wrong, we could see a lot of price action, final goods and assets alike, on the horizon.

by Rebecca Wilder (nontruths@gmail.com) on March 11, 2010 03:40 AM

This is a guest contribution by Marshall Auerback, Braintruster at the New Deal 2.0



by Marshall Auerback



A new book by Kenneth Rogoff and Carmen Reinhart, "This Time It's Different: Eight Centuries of Financial Follies", has occasioned much comment in the press and blogosphere (see here and here)



The book purports to show that once the gross debt to GDP ratio crosses the threshold of 90%, economic growth slows dramatically.



But that's too simplistic: a ratio is just a number. Debt to GDP is a ratio and the ratio value is a function of both the numerator and denominator. The ratio can rise as a function of either an increase in debt or a decrease in GDP. So to blindly take a number, say, 90% debt to GDP as Rogoff and Reinhart have done in their recent work, is unduly simplistic. It appears that they looked at the ratio, assumed that its rise was due to an increase in debt, and then looked at GDP growth from that period forward assuming that weakness was caused by debt instead of that the rise in the ratio was caused by economic weakness. In other words, they have the causation backwards: Deficits go up as growth slows due to the automatic countercyclical stabilizers.They don't cause the slow down, etc.



After the Second World War, the debt ratio came down rather rapidly—mostly not due to budget surpluses and debt retirement but rather due to rapid growth that raised the denominator of the debt ratio. By contrast, slower economic growth post 1973, accompanied by budget deficits, led to slow growth of the debt ratio until the Clinton boom (that saw growth return nearly to golden age rates) and budget surpluses lowered the ratio.



From 1991 through 2001 the growth of government debt had been falling and since then rising most recently at a faster pace. The raw data comes courtesy of the St. Louis Fed (and attached spreadsheet).



The Ratio of the rates of change of Debt / GDP is rising faster than the change in Debt indicating that both the increase in Debt and the fall in GDP are contributing to a rising Debt / GDP ratio. For policy makers who obsess about a rising Debt / GDP ratio, they fail to understand that austerity measures that cut GDP growth will cause a rise in the Debt to GDP ratio. Basically, it boils down to this simple observation: it is foolish, dangerous, and thoroughly counterproductive to treat fiscal balances in isolation. In particular, setting a fiscal deficit to GDP target equal to expected long run real GDP growth in order to hold public debt/GDP ratios at a completely arbitrary (indeed, literally pulled out of thin air) public debt to GDP ratio without for a moment considering what the means for the feasible range of current account and domestic private sector financial balance is utterly nonsensensical.





It is crucial that investors and policy makers recognize and learn to think coherently about the connectedness of the financial balances before they demand what is being currently called fiscal sustainability. As it turns out, pursuing fiscal sustainability as it is currently defined will in all likelihood just lead many nations to further private sector debt destabilization. To put it bluntly, if the private sector continues to pursue a high net saving/financial surplus position while fiscal retrenchment is attempted, unless some other bloc of nations becomes large net importers (and the BRICs are surely not there yet), nominal GDP will fall in the fiscally "sound" nations, the designated fiscal deficit targets WILL NEVER BE ACHIEVED (there can also be a paradox of public thrift), and private debt distress will simply escalate.





In fact, if austerity measures are based on measures of debt relative to economic growth there is a very real risk of a downward spiral where economic growth declines at a faster pace than government debt and the rising Debt / GDP ratio leads to ever greater austerity measures. At a minimum, focusing only on the debt side of the equation risks increasing the Debt / GDP ratio that is the object of purported concern is likely to lead to policy incoherence and HIGHER levels of debt as GDP plunges. The solution is to recognize that the increase in the ratio is in some fair measure the result of declining economic growth and that only by increasing economic growth will the ratio be brought down. This may cause an initial rise in the ratio because of debt financing of fiscal stimulus but if positive economic growth is achieved the problem should be temporary. The alternative is to risk a debt deflationary spiral that will be much more difficult (and costly) to reverse.



This article is crossposted with News N Economics

by Rebecca Wilder (nontruths@gmail.com) on March 10, 2010 07:52 PM

by Rdan (noreply@blogger.com) on March 10, 2010 12:58 PM

by Linda Beale



Banking Matters--Bing's Views



The Bing Blog is one of those well-written something about everything we've all thought about blogs that everybody should read at least every once in a while. So let me suggest a proper post for your introduction, if you haven't looked there before. It's a list of suggestions for what every bank ought to do. I doubt if there's a soul amongst us who would disagree with any of them--except, perhaps, the bank personnel and especially managers who put the current rules into place. See The Bing Blog, New Banking Rules We'd Like to See, Mar. 2, 2010.



Here's a sample of the new rules suggested:



I’d like there to be a rule that the bonuses a bank pays to its top 10 executives cannot exceed its profits.



(Beale here again) I could add a bunch, but one of the obvious ones Bing leaves out is: "no bank can send out a statement changing its rules to provide even higher fees and service charges in which it touts the rules as though they are for the client's benefit while setting them to work in ways that will inevitably lead to more profits for the banks."

__________________________________

crossposted with ataxingmetter

by Rdan (noreply@blogger.com) on March 10, 2010 12:40 PM

(Rdan here...as we develop thought on economic issues facing us today, a nod to excellent writing in the past is important. Newcomers need to know past wisdom exists, and readers of five years ago can use this wisdom again as we visit today's trends in the knowledge of predictions 2003-2005. I also have been reviewing PGL's and Calculated Risk's posts here at Angry Bear.)



Are Earnings Rising or Stagnant? Published June, 2005 by Kash



This question is not as easy to answer as it may first appear. In working on various posts last week I came across an apparent contradiction in the official data on compensation: some series show it rising in real terms, while others show it barely able to keep up with inflation. This discrepancy was also noted by a few readers, who deserve credit for their sharp eyes.



So I thought I’d take a bit of time to sort out these conflicting data series for myself. Here’s what I found. (A warning and apology here: what follows is a relatively econ-geeky post about data details that many may find uninteresting... and I won't be offended if you stop reading here.)



There are three major sources for time series data on earnings: “Hourly Compensation,” from the BLS’s Productivity and Costs (P&C) dataset; the Employment Cost Index (ECI), which provides compensation series broken into the two sub-categories of wage/salary earnings and benefits; and the “Average Hourly Earnings” provided in the monthly employment report as part of the Current Employment Statistics (CES). The following two charts show the behavior of these different series since 1990. All series express hourly compensation rates in real terms.

Note: all series are expressed in real (inflation-adjusted) terms using the PCE deflator.



What explains the sometimes substantial differences between these series? There are several factors that contribute to the discrepancies, but let me point out the most important ones. (For a more complete description of their differences see this paper by Joseph Meisenheimer in the May 2005 issue of the Monthly Labor Review.)



First of all, two of the series – the CES series and the “ECI: wages and salaries only” series – do not include benefits that workers receive. In the charts, those are the pink and green series. Comparing the two ECI series shows that in the past three years or so, a significant gap has opened up between workers’ take-home pay and the amount of compensation that employers are paying, including benefits. I would argue that this is directly attributable to the soaring cost of health insurance since about 2000. Even if workers’ pay has been rising in real terms, nearly all of the increases have been going to pay higher health insurance premiums.



Secondly, the different series include and exclude different types of income and different types of workers. The table below summarizes the different types of workers and income that each series excludes.





Finally, it should be noted that the ECI differs from the other series in that it comes from a survey that is intended to compare the wage rate in a particular job over time, not the wage rate of a person. (The sample is 35,000 specific jobs across the country.) In other words, the survey compares what each job in the sample pays at one point in time to what it used to pay earlier. Furthermore, in constructing the average wage rate across the economy, the ECI holds the number and types of jobs constant at the proportions in the base year (which I believe was just changed from the year 1990 to the year 2000). What this means is that the ECI will not accurately reflect how a change in the composition of jobs in the economy might affect average wages.



Each of the series thus has its own strengths and weaknesses, and there’s no right answer as to which series is best. They each tell us slightly different things, and the differences between them tell us still more. For example, the surge in the P&C measure during the period 1998-2001 probably reflects the large-scale adoption of payments through stock options. The divergence between the wage/salary series and the total compensation series reflects the growing burden of health insurance. And the recent rise of the P&C measure compared to the ECI measure may reflect higher rates of compensation growth in for-profits firms compared to non-profit firms, or large increases in the compensation of self-employed business owners, or a change in the composition of jobs in the economy that the ECI hasn’t caught up with.



A note about income inequality: to the degree that some of the excluded groups (in the table above) may have different levels of income than others, the differences between the series may also suggest something about changes in income inequality. A word of caution about that, however: if you want to find evidence of income inequality, I think there are much better measures (such as the Census Bureau’s income data) than these compensation measures. There is too much else going on in these series to be able to safely attribute anything on the charts above to changes in income inequality.



So what’s my answer to the title question of this post? Personally, if I had to choose just one series to use it would be the P&C series. In addition to being arguably the most complete series, it seems to have done the best job of matching my sense about how the economy has done over the past 20 years. When asked, I think that most people would agree that income growth was indeed much lower during 2002 and 2003 than it had been during the late 1990s; the P&C series bears that out, while the ECI series doesn’t. Meanwhile, the CES series excludes benefits, which I think are a major part of the story today.



But let me reiterate the point that I have made several times now: just because real compensation is rising, that doesn’t mean that people are better off, particularly if nearly all of the gains are just going to paying higher health insurance premiums. This data persuasively illustrates that nearly all of our real compensation gains today (and I do think we're seeing them) are being eaten up by the monster that we call a health care system in the US. Until we address the profound inadequacies of our health care system, this trend will only get worse.



Kash

by Rdan (noreply@blogger.com) on March 09, 2010 05:18 PM

by cactus



A NonReview of Yves Smith's Econned, Plus Some Questions About Selling Books



I've been swamped - a lot of work at work, deadlines for my book (more on that below), and family issues to contend with so for the past few weeks I've been cooped up with zero downtime. Friday I managed to crawl out of my hole... at least for the time being. I remembered that Yves Smith's book, Econned, was due out. Yves' blog, Naked Capitalism is one of my daily reads and I've been looking forward to her take on the whole Great Recession.



Long story short, I visited two bookstores - both had sold out. I placed an order for the book at Barnes and Noble and was told it would be available this week.



All that is a good sign for Yves Smith, and I wish her well. But I was wondering... what can one do to make one's book more likely to do well? Obviously, with a book coming out later this year - in August - its something I have an interest in knowing. (The book is already for sale at some online locations. Here's the Amazon link to the book. As an FYI, given how little the bio of me is, there's a surprising amount that's incorrect.)



The book is - we think - a bit unique. We looked at a how a large number of issues - from abortion to crime to the economy - evolved over the length over each administration from Ike to GW. (In a few instances, where the data is reliable, we go back to Hoover.) And we let the data speak, as regular readers can imagine from the posts I've written. I'll give you an example - my own political views, as one can imagine from the fact that I occasionally post at Angry Bear, are generally slightly left of center. And when this project started some years ago, I hewed closely to what one might term a slightly left of center view on crime, namely that the way to reduce crime is to focus more on rehabilitation. But the data shows that the Presidents under whom crime fell by the most were the ones who, once you account for demographics, put cops on the street, locked people up, and threw away the key. And that is precisely what we show.



I'm not sure I'm happy that the results on crime are what they are. Philosophically, I'd be a lot more comfortable being able to state that we should spend more time and effort and resources on rehabilitation relative to punishment, but the data shows what it shows. And my comfort level, frankly, is irrelevant, when it comes to determining what reduces crime. And the one thing my co-author and I agreed on from the start was that we would post the data (in a nice graphical format thanks to Nigel Holmes, a brilliant artist the publishing company hired to make our graphs look nice), whatever it showed.



Now, that is going to cause a major problem. See, on some issues, there doesn't seem to be much of a relationship between a governing philosophy and outcomes. For instance, stock market performance seems to be unrelated to the president's party, or even to how well the economy did. But (its not exactly a surprise to readers of this blog) on a lot of issues, particularly the economic ones, Democrats tend to outperform Republicans. And we think we're able to nail the cause of this disparity. We also feel we're able to do a good job of showing that the cause is related specifically to the occupant of the White House, as opposed to, say, Congress, God's will, the public's voting patterns, or whatever else.



And as regular readers know, stating that politicians that followed a certain policy produced better economic outcomes than politicians who followed the opposite policies seems to leads to uncomfortable conclusions for some people. As uncomfortable, for instance, as my epiphany on looking at the data on crime. But some people simply refuse to give up cherished beliefs. Its easier to attack the messenger. So though we call it like it is, and we call it for Republicans when Republicans have the better argument, I have zero doubt whatsoever that our book is going to labeled "liberal." Which is a pity, because the book is not intended to cheerlead. In fact, its intended to poke and prod both sides into keeping what works from their side and giving up what doesn't.



OK. So there it is. That's what the book is about. How do we sell it? Anyone have concrete ideas? Bear in mind, this has to be something we can do. People always tell me to go on the Daily Show or some similar program. I don't exactly have any media exposure (my co-author does), but I'd love to do it. However, there are a lot of people trying to go on TV to peddle their wares or their opinion. Heck, even people who know they're going to get publicly humiliated by Jon Stewart show up with big smiles on their face. And my guess is that a lot of people think, like I do, that they have something unique that can change the world if word gets out. So what do I do from here?



A few minor steps I've taken...

1. I took out websites in my name and the book's name. What should go on them at this time?

2. I took out twitter accounts in my name the book's name. I've never used twitter before in my life. What do I do with these now?

____________________________________

by cactus

by Rdan (noreply@blogger.com) on March 09, 2010 02:24 PM

My sister got this stuck in my head, so now I must deal with the pain in the only way I know how: by sharing it.

Apparently it’s a Russian crooner whose name translates to Edward Gil or Hill or Khil. I was going to do some research and try to learn more about it, but then I found that someone with even less of a life than I have already did that.

by tgirsch on March 09, 2010 04:34 AM

The Fed of San Francisco just published a note on Okun's Law and the Unemployment Surprise of 2009.



In the paper they conclude that strong productivity was the main reason employment growth was weaker than the traditional relationship that Okun's law implied.



Of course, we at Angry Bear have long known this. I have published this chart that shows that roughly before 1974 that a one percentage point growth in real GDP generated a 0.3 percentage point growth in employment. This is what Okun's law is based on. But during the era of low productivity growth, 1974 to 1995 a percentage point growth in real GDP generated almost a 0.5 percentage growth in employment.



But since productivity growth rebounded in 1995, every percent increase in real GPD was accompanied by almost a 0.9% gain in productivity so that employment barely rose 0.1% -- a significantly lower rate than Okun thought.







The data in the chart is the long term trend and ignores the cyclical pattern in productivity where productivity growth peaks in a recession or early recovery period and slows as the expansion continues. That is why productivity growth has long been widely considered a leading indicator. It is also why you get patterns such as the San Francisco Fed found for 2009, and why we now seem to have jobless recoveries.

by spencer (noreply@blogger.com) on March 09, 2010 12:03 AM

by Daniel Becker

I came across a presentation called Make Markets be Markets sponsored by the Roosevelt Institute which is tied to New Deal 2.0.  Here is the full report here (pdf).



The following are two videos, first by Simon Johnson, second by Elizabeth Warren,  from the full presentation (see here).



I have not read the full report or watched all the event, but thought these would be of interest.



Simon Johnson on the Doom Cycle (MMBM) from Roosevelt Institute on Vimeo.







Elizabeth Warren on Consumer Protection (MMBM) from Roosevelt Institute on Vimeo.

by Divorced one like Bush (noreply@blogger.com) on March 08, 2010 09:00 PM

Especially warp speed. Kirk & Scotty wouldn’t have known what hit them. I love how the audience quibbled about whether or not the Enterprise’s deflector shields would have helped. We’re talking about fiction here, people.

by tgirsch on March 08, 2010 07:03 PM

Yesterday I argued that Latvia's cost-cutting efforts are evident compared to a cross-section of European Union countries. Latvia's efforts, while commendable, were very much a function of the emergency IMF loan in December 2008 and the ensuing recession in 2009.



After an email exchange with Marshall Auerback, and thinking more about the cross-section of Europe, I now see a very scary trend emerging across Europe: the fight for exports.



To be sure, Latvia's efforts are of note, as the acceleration in hourly labor costs dropped from a 22% pace spanning 2007-2008 to just 2.8% in the first three quarters of 2009 compared to the same period in 2008 (the Eurostat data are truncated at Q3 2009).



But look at the similar wage-cutting behavior occurring across the European Union, especially in the Eurozone hopefuls (Latvia, Lithuania, and Estonia are preparing to adopt the euro in coming years).



The battle for exports has begun. Compared to the same period in 2008, Q1-Q3 2009 annual hourly labor costs growth are down 4.9% in Lithuania, 0.8% in the U.K., and 0.5% in Estonia. In fact, every country across the 26 countries listed except Belgium, Germany, Greece, and Spain, saw the rate of hourly wage growth decrease since 2008. The currency is pegged, so the only mechanism to increase external competitiveness is through price (wages) declines. To be sure, this growth model cannot work for the Eurozone as a whole.



Latvia's model: drop wages to increase export income. Greece: drop wages to increase export income. France, Germany, Spain, Portugal, etc., etc. It's impossible that the whole of the Eurozone will drop wages to increase export income. It's especially bad for countries like Latvia or Hungary, where the lion's-share of trade occurs withing the boundaries of Europe.



And what happens when export income does not provide the impetus for aggregate demand growth? Well, there's not much left. Can't devalue the currency (via printing money), and tax revenues will fall faster than a ten-pound weight: rising deficits; rising debt; rising debt service (via surging credit spreads). Sovereign default seems like a near-certainty somewhere in the Eurozone!



This article is crossposted at News N Economics



Rebecca Wilder

by Rebecca Wilder (nontruths@gmail.com) on March 08, 2010 04:44 PM

by Tom aka Rusty Rustbelt



RANDOM ECONOMIC OBSERVATIONS WHILE TRAVELING THE RUSTBELT



Even while on vacation the CPA/consultant side of my brain is engaged sometimes (although my grandchildren engaged the Super Mario and Spongebob Squarepants side of my brain).



* small businesses are closing at an alarming rate

* cities thought recession-proof (e.g. Columbus Ohio) are suffering badly

* the hotel/motel business is in a depression

* the housing markets are very weak, with occasional signs of life

* commercial real estate, office and retail, is very weak

* the auto parts supplier network is very fragile, any cascade of closings could shut down the auto industry (domestic and foreign) for a period of time

* the cities of Detroit and Toledo, after 40 years of of mismanagement, corruption, globalization and auto industry deterioration, are near collapse, as are the respective school districts (more on these cities in a later post)

* infrastructure is crumbling, but only a few stimulus projects are visible

* we could put thousands of people to work cleaning up environmental problem sites and demolishing (sadly) former manufacturing plants

* state and local governments need tax increases, but tax increases drive businesses south and west and it is tough to raise taxes on the unemployed and underemployed (moving companies are doing well)

* however -- people are hanging in there, somehow, someway



The entire country is suffering to some extent, but these areas have now effectively been in a recession for ten years. Is this the face of the future for the entire country?



Did I mention my grandsons are smart and cute? There is hope for the future.

_____________________________

Tom aka Rusty Rustbelt

by Rdan (noreply@blogger.com) on March 07, 2010 10:36 PM

Felix Salmon is a very smart person who writes very well. Also he once invited me to an instant messenger debate that he posted on his high traffic blog. So I’d like to make only polite criticisms. However, I can’t write well so I will please translate the following to polite in your heads.



Salmon wrote “The CDS market is actually more transparent, with smaller bid-offer spreads”. That is, Salmon equates “the CDS market is actually more transparent”, and “CDSs are more liquid.” Liquid and transparent are not synonyms. Take the metaphors literally, and look at an old analog thermometer. You will find that mercury is liquid but not transparent and glass is transparent but not liquid.

Serious discussion after the jump.









In the sentence which I mock above, Salmon is criticizing an incorrect claim in a New York Times editorial. The claim is “A big part of the problem is that derivatives are traded as private one-on-one contracts. That means big profits for banks since clients can’t compare offerings.”

As noted by Salmon this is not true. It could be true, but, in fact, people know the current price of CDS on something*.



On another topic, Salmon wrote “But it doesn’t necessarily mean lower trading costs for the buy side: just ask anybody who tries to buy and sell bonds listed on the Luxembourg exchange.” I think it is clear who Salmon means by “anyone who tries to buy and sell bonds”. This would not be any firm that ever issued a bond nor does it mean any investor who ever bought a bond. He is thinking of people who try to profit from active trading strategies. “Anyone” means “any trader.” This is Salmon’s point of view. He talks to professional traders. Often he criticizes them, but he thinks about their problems and challenges.



Here, however, he is commenting on an editorial discussing public policy. Obviously Salmon doesn’t think the final aim of public policy is to make the world convenient for traders, but he assumes that making the world convenient for traders will lead to good economic outcomes. He definitely thinks that smart people trying to beat the market make the market work better.



This would make sense if one accepting a strong by semi strong form efficient markets hypothesis where prices are optimal given public information, private information can be obtained at a price, and prices are what they would be if informed traders had rational expectations. This is exactly the dominant assumption in the finance literature. It is also clearly nonsense. Salmon assumes that traders were rational.

dangerous risk-taking is actually a good thing, in financial markets. When people engage in risky behavior on Wall Street, they stand to lose a lot of money, but they know that they stand to lose a lot of money, and government doesn’t end up having to step in and bail them out. The big systemic problems happen when leveraged actors think that they’re not engaging in risky, speculative behavior

So Salmon asserts that dangerous risk taking is a good thing, because when people take risks, they know they are taking risks, except for the people who don’t know they are taking risks. Does Salmon assert that the claim “people always know when they are taking risks” is plainly obviously true or plainly obviously false ? He asserts both, with equal confidence and absence of evidence.



I think I can guess what he thinks. The traders with whom he talks are smart, so they don’t take risks without knowing it. The former CEOs of Lehman and AIG are dumb. The problem is that one can be very smart without having rational expectations.



In the same passage, he also notes a cause of big systemic problems and confidently asserts that it is the only cause of big systemic problems. One could as well argue that all market crashes involve the text “.com.”



To quote Salmon, “What a mess.”



It is very easy to see that outcomes are not what they would be if informed traders were rational. Basically cut out the theoretical middle man. Salmon assumes that high trading volume leads to efficient pricing. High trading volume is what he means by “liquidity” and, here, “transparency.” Trading volumes have changed enormously. High trading volume always comes with high price volatility. Price volatility is vastly greater than it should be (google “Shiller” and “excess volatility”) . It is plainly obvious that, in the real world, markets with a high volume of trade are less efficient (in the sense of the efficient markets hypothesis) than markets with a low volume of trade.



History shows that making markets convenient for traders, including really smart traders, reduces the usefulness of the signals markets send to the real economy. That’s why titans of finance who become treasury secretary like Tobin taxes(note the absence of the word *all* those titans are Nicholas Brady who publicly supported one and Robert Rubin who inquired as to how one could be implemented). It is possible that Rubin is clueless about finance, but that is not the way to bet.



Now Salmon writes many smart things in his post. To paraphrase Salmon “the problem is that it gets to the right destination by using the kind of rhetoric which makes it seem as though the only people who are unhappy about [demanding] proposed [politicall unmentionable] derivatives regulation are the people who don’t understand the derivatives market.”



*I note in this footnote that the problem is that there is a current price of a CDS written on something. There shouldn’t be. Given counterparty risk, there should only be a price of a CDS written by someone on something. Comparing prices and buying the cheapest CDS is a great way to guarantee that if the underlying sercuirty defaults so will the CDS writer. I take that seriously. Sure traders had plenty of data and low bid ask spreads. However, IIUC the data were collected under the totally false assumption that counter party risk was negligible. That’s insane. It is like assuming that a mortgage is a mortgage and it doesn’t matter if the debtor documented income or just claimed income. In each case, totally incorrect assumptions of homogeneity were made so that one could make a big huge data set. Everyone did this so they guaranteed that their assumptions would be false – if someone assumes high or medium quality someone else can make a profit producing low quality.



The desire to play with computers caused people to forget that garbage in means garbage out. If all financiers had been math phobic and computer phobic, the world would be a better place today.

by Robert (noreply@blogger.com) on March 07, 2010 03:03 PM

Calculated Risk



Steve Waldman



Dean Baker

by Rdan (noreply@blogger.com) on March 07, 2010 02:58 PM

I learned yesterday afternoon that Al Weisel, better known to most of us as the blogger Jon Swift, died last week at the age of 46.



His mom brought the news via a comment on his last post, written nearly a year ago. Her comment appears about 50 down in the list, so you'll have to scan some to read it.



In a double tragedy, he died of ruptured aortic aneurysms complicated by a stroke - which hit him on his way to his father's funeral. In a darkly ironic touch, that last post, perhaps the one that made him lose his spirit for blogging, was to note that a friend of his had suffered "a terrible loss": His son had committed suicide.



I have come across any number of people on the web who do humor or attempt the far more difficult feat of satire - and while I find some amusing, I never came across anyone who did satire better. He did it so well that his comments were regularly filled with outraged liberals and applauding conservatives - and indeed on discovering him you weren't sure if he was serious or not and often you had to read a few posts (maybe more) before you really felt confident that yes, this was satire.



It was more than skill, it was artistry.



We have lost a voice for justice and an artist. The world is a bit darker today.



Footnote: My favorite comment at the site in response to the news:



"Rush Limbaugh lives. Jon Swift dies.



"There is no God."

by LarryE (noreply@blogger.com) on March 06, 2010 09:43 AM

Updated So this is what it's come to:

The Labor Department released its employment summary today[, Friday,] and found that payrolls shrunk by 36,000 people in February, with the overall unemployment rate holding steady at 9.7%. In addition, December was revised upwards to -109,000, and January revised slightly downward to -26,000. Experts predicted a larger decrease in payroll, so this figure outperformed those expectations.

That is, the good news is that job losses were smaller than expected. I feel oh so encouraged.



The chart, via the above link at Firedoglake, graphing job loss and recovery for post-World War II recessions, dramatically shows just how bad it is (click on it for a better look): We've experienced the longest, deepest shrinkage in jobs in at least 65 years, one so deep and so long that of the other ten post-WW2 recessions, seven had already fully recovered this long after their start and two more were just short of doing do.



The numbers are disturbing even when you already know what they express. Between March 2008 and April 2009, the economy lost 8.4 million jobs. February was the 25^th out of the last 26 months to show a decline in jobs. In 2009, the overall US economy shrank 2.4 percent - the worst year since the end of World War II. And those lost jobs aren't coming back any time soon:

Sizzling growth in the 5 percent range would be needed for an entire year to drive down the unemployment rate, now 9.7 percent, by just 1 percentage point.



For all of this year, the economy is expected to grow 3.1 percent....

Mark Zandi, chief economist at Moody’s Economy.com, estimates it will take five or six years to get back to prerecession job levels.



And that is based on accepting the official figures, which actually conceal some things: First, because of population and labor force growth, the steady unemployment rate means that more people are actually out of work: The total is just shy of 15 million now. Second, here's a different number:

When both unemployed and underemployed workers are counted, there still are 26.2 million people without full-time work - a 16.8 percent under-employment rate. In fact, the under-employment rate (which includes not just the officially unemployed, but also jobless workers who have given up looking for work and part-time workers who want full time jobs) worsened from 16.5 percent to 16.8 percent.

What's more, long-term unemployment - six months or longer - is the worst since the Great Depression: Some 40% of the unemployed have been without regular work for at least 27 weeks.



Numbers. One in eight Americans now receives food stamps, including one in four children. At the end of 2009, the US Conference of Mayors said cities reported a 26% rise over 2008 in the demand for food assistance, the largest such increase in nearly 20 years. The number of Americans ranked by the USDA as "food insecure," defined as having "limited or uncertain availability of nutritionally adequate and safe foods or limited or uncertain ability to acquire acceptable foods in socially acceptable ways" (i.e., without stealing it or getting the necessary cash illegally), hit 49 million in 2008, a huge 36% increase over 2007. (That from "Hunger in America 2010," a report by Feeding America, which has seen a 46% increase in its client base since 2006. The Executive Summary is here and the full report is here; both are .pdf files. I'm indebted to Richard at American Leftist for the links.)



Numbers. One in 20 households is evicted every year; in mostly black communities the rate is one in ten. Some poor people in more expensive cities are spending 80 or 90% of their income on rent, leaving the prospect of eviction just one unexpected expense away.



Homeowners are faring little better: 860,000 properties were repossessed in 2009. And it's unlikely to get better this year. Nationally,

[m]ore than 11.3 million homeowners - nearly one-fourth of all Americans with a mortgage - owe more on their loan than their home is now worth, according to ... FirstAmerican CoreLogic. ...



The number of underwater mortgages increased by about 620,000 from the third quarter, the firm said. Another 2.3 million mortgages had less than 5% equity in their home, which could be wiped out if home prices fall further.

The National Association of Realtors just reported that pending home sales dropped by 7.6% from December to January and the Commerce Department says that sales of new homes fell by 11.2% between December and January to the lowest total in almost 50 years - making such a further decline in prices quite likely.



In six states, more than 20% of mortgages are underwater; in six more, it's 25%. In California, more than one-third of mortgagees owe more than their house is worth; in Nevada, it's a jaw-dropping 70%. Homelessness, particularly among families and particularly in the suburbs, is increasing.



Numbers. Average weekly earnings fell 0.4% in February. They fell 0.8% (after adjusting for inflation) across 2009.



Numbers. In 2009, bankruptcy filings in 2009 were up 32% over 2008 and are predicted to go higher this year. Filings in February were up by 9% over January and 14% over February 2009.



Numbers. Numbers. The data, the statistics, keep coming. Now, I'm well aware that I said in the previous post that the numbers about the economy "can't express the day-to-day stress" people are experiencing. And that's true. As stunning as the numbers are, and as much as such figures, properly projected in the imagination, might hint at the totality of that stress, they don't really describe what it's like at ground level. But sometimes, just sometimes, there comes a number that says something so clearly that it is like a shout in a library. This, I think, is one such and even though it comes from two months ago, to me it still rings across the whole economic front:

About six million Americans receiving food stamps report they have no other income, according to an analysis of state data collected by The New York Times. In declarations that states verify and the federal government audits, they described themselves as unemployed and receiving no cash aid - no welfare, no unemployment insurance, and no pensions, child support or disability pay.



Their numbers ... have soared by about 50 percent over the past two years. About one in 50 Americans now lives in a household with a reported income that consists of nothing but a food-stamp card.

About a fifth of those people, 1.2 million, are children.



Six million people. Two percent. One in fifty. Statistically, in the neighborhood where I live at least one family, maybe two, are in a condition of having no income, nothing to live on - as in nothing, nil, zilch, nada, goose egg - other than food stamps. I simply can't think about that without getting a knot in my stomach. That's real, that's here and now, and a measure of desperation far deeper than the straightforward fact of unemployment or the statistics about income levels.



Officials are quick to note that for any given family, this may be a short-term condition - but all that means is that for every family that locates some sort of aid or income, another family loses it. I'm not sure how that's supposed to be a whole lot better, especially when, as the same article notes,

tougher welfare laws [have] made it harder for poor people to get cash aid....



The main cash welfare program, Temporary Assistance for Needy Families, has scarcely expanded during the recession; the rolls are still down about 75 percent from their 1990s peak.

Tougher and harder to the point where ColorLines magazine (the link coming here via Democracy Now! via Susie Madrak at Crooks & Liars) reported a couple of weeks ago how poor people are selling their food stamps on the black market in order to have the cash "to pay for the rent, phone bill, detergent and tampons." Bluntly put, and as many predicted at the time only to be dismissed and mocked as doom-sayers by triangulating Democrats, "ending welfare as we know it" has lead to, in the face of economic decline, "expanding poverty as we knew it."



In fact, according to a Brookings Institution analysis, between 2000 and 2008, poverty grew at twice the rate of the population as a whole. In 2008, some 39.1 million Americans lived below the poverty line. Add in the 52.5 million living in households with incomes between 100% and 200% of the federal poverty line, and you have a whopping 30% of Americans surviving on incomes no greater than two times the poverty line. (Thanks to Tim at Green Left Global News & Info for those links.)



And guess what, something else we always knew: The official numbers on poverty were designed to artificially reduce the reported poverty rate, which is actually higher. The government admitted as much on Tuesday, when by ditching a measure based on an emergency food budget in 1955 and adopting a more realistic measure of income and expenses in today's world, the "official" poverty rate jumped from 13.2% to 15.8% - from 39.8 million to 47.4 million people.



Enough numbers. I want to close with two thoughts: First is that the British-style crosswords that appear in The Nation have sometimes made use of a type of pun that is a play on sounds rather than words (I'm sure there's a term for it but I have no idea what it is), giving as a clue something like "quantities of anesthetics" with the answer "numbers" - the pun being that the word can be pronounced two different ways: the obvious one that refers to quantities and the less obvious one that refers to anesthetics, which can make you numb and therefore can be called "numbers" (with a silent b).



Numbers can overwhelm us, making it too easy to intellectualize, to separate ourselves from their meaning, such that they become mere statistics, figures to be parsed and played with but which have lost their connection to flesh-and-blood people. They become anesthetics and so the numbers become... numbers. We have to guard against that every day, every time. Numbers can tell stories, as all these here surely do, but only if we don't just gather, analyze, and recalculate them, only if we don't just read them with our eyes, only if we listen to them with our consciences.



The other thing is that in gathering data for this post, I was struck by a comment made by a columnist at DailyFinance.com. After noting that "it's no wonder" that many American households "are often living paycheck to paycheck," he said:

While many may be tempted to launch a partisan tirade to "explain" these statistics, trends that stretch back decades are structural in nature.

Yes, they are. And that is exactly the problem. But yet again, that is a discussion for another day. Perhaps tomorrow, in fact.



Updated to add more figures on jobs, home sales, earnings, and bankruptcies, obtained via another link at Green Left Global News & Info.

by LarryE (noreply@blogger.com) on March 06, 2010 04:16 AM

Robert Waldmann



To obamanate V. To open an argument absurdly excessive concessions to one's opponents.



Obamanation gerund of To obamanate.

Obamanation present participle of to obamanate.



I offer this definition in defense of Obama. The word will be defined, and he'd better hope my definition is adopted.

by Robert (noreply@blogger.com) on March 05, 2010 09:52 PM

by Rdan (noreply@blogger.com) on March 05, 2010 07:42 PM

Unemployment claims, and total employment, under Bush and Obama:

Total employment declined steadily for years under Bush; the unemployment rate rose from below the previously-accepted theoretical minimum of “natural unemployment”, under Clinton (below 5%), to  8 % under Bush. (Fun Fact: not a single net new job was added at any point during the entire Bush years.) Total employment began rising  Monthly job losses began declining immediately with Obama’s economic stimulus, and the unemployment trend began flattening within months after his inauguration. It reached a peak less than a year after Obama took office, and has declined now for four months. (Fun Fact: If the unemployment-rate trend is symmetical – that is, if Obama continues to create jobs as fast as Bush destroyed them - he will have reversed the Bush unemployment-rate disaster before the end of his first term in office.)

More fun facts: a crude, but revealing, estimate of jobs created by the Obama stimulus can be derived simply by extrapolating the Bush unemployment curve for the last year of his term in office through the present day, and noting how far above the actual current unemployment rate, or below the current payroll totals, that would be (i.e., if the Bush disaster had continued unchanged over the last year). A rough projection suggests a Bush-normal unemployment rate of about 12% and rising, and continued monthly job losses of as much as 1.6 million.

Luckily, that’s not the case. Under Obama, we have a falling unemployment rate, and current monthly employment change fluctuating around zero and rising.

Thanks, Obama! 

Hat Tip: White House (timeline divider and Bush/Obama labels added)

UPDATE: Fixed a grammatical error.

UPDATE: “Total employment” did not begin rising after Obama’s election; the number of jobs lost per month began declining, reaching a point at or just below neutral over the last few months. Thanks to Matt for the correction.

Note also that the Obama rescue trend remains even after “discouraged workers” – long-term unemployed no longer seeking jobs – are factored in. (See BLS “Labor Force Statistics“, category U-6.)

UPDATE: Fixed stupid typos.

by KTK on March 05, 2010 05:39 PM

Except for the drop in the workweek and aggregrate hours worked the February employment report was almost a duplicate of the January employment report. In both January and February the payroll survey reported a slight drop in employment and the household survey showed a modest increase in employment. Essentially both reports are showing changes so close to zero that they are well within one standard error of zero.



Generally, the payroll report is considered the better report. But at cyclical turning points the household survey tends to lead the payroll survey. I think that is because the household survey does a superior job of capturing trends changes among small firms and small business tends to respond more quickly to cyclical changes than large firms.



Both reports increase my confidence in last months analysis that the economy is in a transition mode. The period of wide scale lay-offs has ended but firms have yet to begin wide scale employment.









The pre-report apprehensions about the impact of the February snow storms were ill-founded.

The payroll survey reports how many people firms have on their payrolls. So even if people were not able to make it to work, they were still on firms payrolls. Consequently, the storms had no impact on firms payrolls. In the household survey the people who did not make it to work because of the storm would still think they had a job so they would report that they were employed.



Where the storms would have an impact is on the average work week and aggregate hours worked. Consequently the drop in aggregate hours worked and the weakness in weekly average hourly earnings probably was due to the storms. But we will have to wait until next month to really know.









However, the continued weakness in average hourly wages and weekly wages is a feature of this cycle and probably was not impacted by the storms.





Many look at weekly earnings as a leading indicator of consumer spending, and I know I am sometimes guilty of this. But the historic record is that real earnings is actually a lagging indicator of consumer spending at cyclical bottoms. Over the course of an expansion, and at cyclical peaks real income is very much a concurrent indicator of consumer spending. but at bottoms consumer spending is driven more by lower rates, better consumer confidence and lower inflation. Retail sales are highly skewed with the upper 40% of the income spectrum accounting for over 60% of retail sales. So the important factor is people who have stayed employed and those whose income stems from non-wage sources deciding to spend. Often this

is driven by greater wealth; especially from the stock market and rebounding home prices.

We are getting the higher stock market this cycle, but not the rise in home prices.





Historically, once the unemployment rate peaks, as it apparently has this cycle, it continues to fall for one to two years. Even in the last two cycles when the peak unemployment rate lagged the economic trough by months the unemployment rate continue to fall once it had peaked.

So the standard forecast, even by the administration and the CBO, that the unemployment rate will remain around 10% is a forecast of something that has never happened. I'm not saying that weak growth and high productivity can not keep the unemployment rate near the peak of 10%, but it is something that has never happened.

by spencer (noreply@blogger.com) on March 05, 2010 03:25 PM

On this count, I agree with Krugman. Go read.

by tgirsch on March 04, 2010 10:40 PM

by Bruce Webb



There has been a scattering of stories about how China has slowed or stopped buying U.S. Treasuries. This story offers a possible explanation



LA Times: China's investments in U.S. up sharply

Beijing is using its accumulation of billions of American dollars to step up its investments around the globe. In the last year, Chinese acquisitions in the U.S. have ranged from a relatively obscure theater in Branson, Mo., to stakes in such famous brands as Coca-Cola and Johnson & Johnson.



China's huge stockpile of dollars stems in part from Americans' enormous purchases of relatively inexpensive Chinese manufactured goods and the significantly smaller volume of U.S. exports to the Asian country.



By recycling much of its dollar trove over the years back to the United States with the purchase of U.S. government debt, China has in effect helped Washington finance its deficits.



Now, Beijing is branching out. The country's direct investments overseas rose 6.5% in 2009 to $43.3 billion -- despite a global slump in such investments -- and could jump to $60 billion this year, Chinese state media reported last week.



Formal estimates of Chinese investments in the U.S. last year, excluding bond purchases, range from $3.9 billion -- a figure put out by New York research firm Dealogic -- to $6.4 billion, a number that comes from Derek Scissors, a Heritage Foundation research fellow who tracks China's global transactions

I'll let the econoBears explain the significance here, my flip summary would be "Why rent when you can own". It certainly doesn't indicate that the Chinese are expecting some terrific crash in the medium term.

by Bruce Webb (bruce.c.webb@gmail.com) on March 04, 2010 06:25 PM

This is a guest contribution by Marshall Auerback, Braintruster at the New Deal 2.0 at Newsneconomics



By Marshall Auerback



My colleague, Rebecca Wilder, recently concluded a "Tale of Two Recoveries: Malaysia vs Germany" which brought back memories of my own time in the Far East and some of the advisory work I did for the government of Malaysia during the financial crisis of 1997/98.



Before the historical revisionists get hold of this period, it is important to note that Malaysia’s initial response to the crisis was a textbook illustration of how to exacerbate, not alleviate, a financial crisis. Of course, it was a consequence of taking stupid and economically ruinous advice from the International Monetary Fund, which is to economic development what John Meriwether is to asset management. If anybody had any doubts, those of us who observed the crisis first hand realized that the IMF and the so-called “Committee to Save the World” were more interested in saving the first-world banks who were exposed than caring about the local citizens who were scorched by harsh austerity programs. Same old, same old.

It was only when the Deputy PM/Finance Minister was ousted from the Cabinet and his pro-IMF policies completely repudiated, that Malaysia’s economy began its long road back to successful recovery.



There is little question that former PM Mahathir Mohammed was a political thug, but not an economic illiterate. But his sacking of Anwar from the Cabinet and decision to press ludicrous sodomy and abuse of power charges against his former heir apparent foolishly undermined his economic legacy. It is certainly wrong, however, to criticise his response to the Asian financial crisis of 1997/98. Vindicated now with the benefit of hindsight, at the time his embrace of exchange controls, and a 180-degree reversal away from the policies of austerity advocated by the Fund, were viewed as dangerously anti-free market, destined to render Malaysia an investment pariah.



Before the temporary triumph of the so-called “Washington consensus” school of economics in the late 1990s, the so-called “interventionist” East Asian alliance model of capitalism was highly lauded by institutions such as the World Bank and even the IMF itself. A common thread characterizing the economic development of countries such as Thailand, Korea, Singapore, and, yes, Malaysia, were policies which transferred resources away from “unproductive” toward “productive” uses—often in the form of transfers from unproductive groups to productive groups and sometimes in the form of policies to convert unproductive groups into productive ones. Creating “rents” (above normal market returns) by “distorting” markets through industrial policies was essential, first, to induce more-than-free-market investment in activities that the government deemed important for the economy’s transformation, and second, to sustain a political coalition in support of these policies. Disciplining rent-seeking so that it remained consistent with these two objectives was also essential.



It was precisely this model that came under such sustained attack during the late 1990s. Then Secretary of the Treasury Robert Rubin, his Deputy, Lawrence Summers, and their lieutenants saw the crisis as the perfect opportunity to destroy this model once and for all, and to do this, they wanted the International Monetary Fund to impose conditions on the economies of emerging Asia that went far beyond the Fund’s traditional boundaries. Thus the U.S. Treasury kept steady pressure on Fund officials to extract more and more concessions from South Korea, Thailand, Indonesia, and Malaysia including instant resolution of all trade related issues in favor of the United States. The exasperated Asians were soon accusing the IMF of always raising new issues at the behest of the United States—something that the Fund officials readily acknowledged later.



Foremost in the minds of Treasury officials was also the interest of Wall Street, especially American financial services firms. These biases were manifested in the types of IMF conditions imposed on the emerging Asian economies during the height of the crisis, which clearly served the brokerage firms on Wall Street far better than the needs of emerging Asia.



In the early 1990s the economies at the core of the world economy (the U.S., “Euroland,” Japan), began to generate hugely excessive liquidity. In the early 1990s, mutual funds, pension funds, other institutional investors, hedge funds and—last but not least—banks became awash with deposits. They scoured the world for high returns. Investment houses like Goldman Sachs and Morgan Stanley sought the business of arranging the privatizations, securities placements, mergers, and acquisitions that surged on the wave of liquidity—business that became their main growth area. As a consequence, financial capital poured in to “emerging markets” (middle-income countries of recent interest to institutional investors).



Capital flows to developing nations in Asia and Latin America jumped from about $50bn a year before the end of the Cold War to about $300bn a year by the mid-1990s. From 1992-96, Indonesia, Malaysia, Thailand, and the Philippines were all experiencing money and credit growth rates of between 25-30 per cent a year. Emerging market stock markets boomed, nearly doubling their share of world capitalization between 1990 and 1993.



Proponents of capital liberalization justified these inflows on the grounds of (a) maximizing the efficiency of capital worldwide, (b) allowing a specific country to invest more than could be financed from its own savings, (c) bringing modern financial institutions into the country, and (d) deepening the liquidity of the country’s financial system and lengthening investor horizons, thereby making markets more efficient and more stable. In the end the case for free capital flows came down to the classic theory of comparative advantage, as though trade in dollars was essentially similar to trade in widgets.



In reality, however, the funds went into increasingly marginal and speculative developments and simply exacerbated an underlying credit bubble. Although they did not speak out at the time, a number of prominent economists and financiers have since pointed out the dangers of such “gypsy capital”. Joseph Stiglitz, for example, argued that the origins of the Asian financial crisis rested, in the first place, with the excessively rapid financial and capital market liberalization that the U.S. Treasury had pushed on these economies, on behalf of Wall Street, and over the protests of the Council of Economic Advisors, of which he was the chairman. “At the Council of Economic Advisors we weren’t convinced that South Korean liberalization was a matter of U.S. national interest, though obviously it would help the special interests of Wall Street” (Globalization and Its Discontents, New York: W. W. Norton, 2002, p. 102).



Similarly, Jagdish Bhagwati, one of free trade’s most passionate supporters for developing nations, argued that the idea of free trade had been “hijacked by the proponents of capital mobility”.



The end result of this drive to liberalise capital accounts in immature emerging economies was a series of booms and busts, culminating in financial crisis. Capital flows into emerging markets turn out to be less a diversification of assets, more another instance of “investment herding”, especially within regions, where market allocation was propelled less by differences between countries in their “fundamentals” (including “good” or “bad” policy) than by “push factors”—macro push factors like the amount of excess liquidity in different parts of the core zone of the world economy; and micro push factors like the incentives on institutional money managers and the corresponding drive to match the “benchmark weightings” devised by pension fund consultants, many of knew nothing of the various underlying markets. Money managers tend to be evaluated relative to the median performance of money managers in the same asset class. This encourages them to move in and out of markets together, producing “herding” or “trend chasing” or “positive feedback trading” and the crisis of 1997/98 was a textbook illustration of that phenomenon.



Malaysia was heading down this road in 1997. The currency, the ringgit, was collapsing, as the contagion effects from Thailand, Korea and Indonesia gradually extended into the country. Although Anwar had not placed the country under a formal imf program, he had been following the imf recipe: to forestall capital flight, fiscal policy was tightened and interest rates were hiked in order to protect the external value of the currency.



Based largely on their experience in Latin America, the Fund had already imposed directly these measures on Thailand, Indonesia, and Korea. The problem, however, is that whereas fiscal deficits have tended to be large and inflation chronic in Latin America, in the economies of emerging Asia, budgets had long been roughly in balance. In addition, as the Funds’ economists were unschooled in the links between macro conditions and corporate balance sheets, they failed to perceive the danger of high real interest rates in economies with high debt/equity ratios and low inflationary expectations. High real interest rates have deflationary and crisis-signalling consequences that prompt capital outflows regardless of the attractions of the high rates themselves.



Which is precisely what began to occur in Malaysia. The Malaysian economy experienced a contraction of credit growth from 30 percent in 1997 to minus 5 percent in 1998, reflecting a massive pullback of bank loans. The ringgit plunged, as capital outflows accelerated. A real estate collapse loomed.



Ultimately, seeing the failure in these policies, Prime Minister Mahathir sacked Anwar, and re-imposed capital controls to insulate his economy from the deleterious consequences of rapid hot money outflows. (The trumped-up political charges, which led to the latter’s imprisonment, only came later.) Monetary and fiscal policy became expansionary, the ringgit was pegged to the US dollar, and crisis credit conditions began to diminish as domestic rates were reduced drastically. Although Western finance ministries and institutional investors protested apocalyptically and predicted that Malaysia would remain beyond the pale of the investment world for the foreseeable future, six months later even The Economist, one of the IMF’s great apologists, was forced to acknowledge that the embrace of capital controls had done “short-term wonders” in assisting recovery.



This is all old history. But it is worthwhile recalling the actions of the Fund in the context of what it is advising countries like Iceland and Latvia to do today. Or when considering the hair shirt economics which seems to be championed by Germany’s economic elites.

by Rdan (noreply@blogger.com) on March 04, 2010 02:32 PM

by Rebecca Wilder



The Federal Open Market Committee (FOMC) is making tough decisions right now. Its mandate, “to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates”, is a seriously tall order given current economic conditions.



The unemployment rate sits at 9.7%, while prices have bounced back to 2.6% Y/Y in January. On the surface of it, inflation appears to be gaining some traction; but the big numbers are representative of base effects, and that is really all. The drag on prices remains very real.



But there is one little kink in the headline figures of unemployment that complicates an already complicated task: extended unemployment insurance. From the FOMC's Jan. 26-27 minutes:

Though participants agreed there was considerable slack in resource utilization, their judgments about the degree of slack varied. The several extensions of emergency unemployment insurance benefits appeared to have raised the measured unemployment rate, relative to levels recorded in past downturns, by encouraging some who have lost their jobs to remain in the labor force. If that effect were large--some estimates suggested it could account for 1 percentage point or more of the increase in the unemployment rate during this recession--then the reported unemployment rate might be overstating the amount of slack in resource utilization relative to past periods of high unemployment.

Why would extended unemployment benefits increase the unemployment rate? In order to claim unemployment benefits, one must be "in the labor force"; and that means looking for work. Therefore, some workers who would otherwise be classified as "not in the labor force" remain in the work force as "unemployed". Therefore, the current unemployment rate is elevated above the rate that would occur without the extended benefits. The Fed suggests this differential to be roughly 1% point.



I am in no way proposing that the extended benefits be rescinded; nor am I deluding myself into thinking that the labor market is anything short of awful. But Fed policy is calibrated to the non-inflation-generating level of the unemployment rate. And the current unemployment rate may be closer to the long-run level than the headline number suggests.



I have talked about this before (see this post) from another angle: the long-run level of unemployment may be a moving target right now, i.e., it's likely rising. Therefore, if the long-run level of unemployment is rising and subsidies are masking the true level of the current unemployment rate, then we may very well get some inflation while the economy is still weak.



Of course, I do not believe that we are even near such a threshold level; but it does complicate an already complicated situation. A modified Taylor rule demonstrates the implications for policy.



The chart above illustrates the estimated Taylor Rule using the current unemployment rate (in blue line) versus one in which 1% point is shaved off the unemployment rate for every month since January 2008 (green line). The modified rule does suggest that the Fed policy rate is currently at (or now below) the prescribed rate.



Just some food for thought. Rebeca Wilder crossposted with Newsneconomics

by Rdan (noreply@blogger.com) on March 04, 2010 09:47 AM

Robert Waldmann



So it turns out that extreme liberals have higher measured IQs than extreme conservatives and atheists have slightly higher IQs than biblical literalists.



What does this tell us ? Matthew Yglesias sent me to this and I learned that people will not accept the fact that not all stochastic variables are normally distributed.



I mean the extreme blind faith in the normal distribution is just not normal.







Razib Khan wrote

"Assume the "very conservative" and "very liberal" categories are normally distributed in intelligence. The mean is 95 and 106. What percentage of people within each category are going to have IQs of 130 and above?

Assume the "very conservative" and "very liberal" categories are normally distributed in intelligence. The mean is 95 and 106. What percentage of people within each category are going to have IQs of 130 and above?



0.92% of "very conservative" individuals

5.48% of "very liberal" individuals

That's like writing "Assume my grandmother has balls. Is she my grandfather? 100% of my grandmother is male."



Anyone who knows anything about IQ scores knows that they are not normally distributed. IQ scores have a fat upper tail. In other words the calculation is total nonsense and has nothing to do with any intelligent estimate of the fractions of very liberal and very conservative people with IQs over 130.



I mean if one is going to make assumptions which are demonstrably false, one might as well assume the conclusion (yes economics profession I am thinking of us too).



I am very liberal and atheist and *I* think this post (to which Yglesias linked) is clearly total nonsense.

by Robert (noreply@blogger.com) on March 04, 2010 12:26 AM

Correlation is not causation, more research and testing is required, etc.



I was working from the concept that home Internet service is a luxury item—or, at the very least, non-essential.*  In short, that you would tend to give up home Internet access if the choice is between that and staying current on your mortgage.



Looking at the State-level data, though, produced the following regression:

HomeINetAccess = 0.78736*(FICO>660) – 0.1934*(Pct with Current Payment) - -0.1662*(Lying Broker Loans) + 73.36

R-squared = 0.4311 Adj. R-squared = 0.3956**

Fortunately, only the FICO>600 (t=4.10) and the constant (t=7.77) were clearly significant at the 95% confidence level. (Current t = –1.38, Lying Broker t = -0.95). And it seems intuitively obvious that people with better credit scores are more likely to be able to afford (and demand) home-based Internet access.



Removing the “Lying Broker Loans,” strangely, didn’t change the sign, though it did reduce the perceived effect and lower the base constant.

HomeINetAccess = 0.65055*(FICO>660) – 0.1159*(Pct with Current Payment) + 67.42

R-squared = 0.4204  Adj. R-squared = 0.3967

Fortunately, Pct with Current Payment remains an insignificant variable (t = –1.02); indeed, it becomes even more unlikely.



Curiously, there is one random regression that does appear significant.

HomeINetAccess = 0.43854*(FICO>660) – 0.3099*(Mortgage Originated in 2005 or before) + 80.89

R-squared = 0.429; Adj. R-squared = 0.4057

Here, both variables and the constant appear significant (t=3.5, –3.81, and 14.16, respectively).  So we need a story to explain the negative sign, especially since running the same regression against  the“Originated in 2006” or “Originated in 2007” values produces a larger R-squared and results with the intuitively-correct sign:

HomeINetAccess = 0.40822*(FICO>660) + 0.5340*(Mortgage Originated in 2006) + 47.62

R-squared = 0.5217; Adj. R-squared = 0.5022; t(FICO>660) = 2.98  t(2006) = 3.41

HomeINetAccess = 0.53598*(FICO>660) + 0.5476*(Mortgage Originated in 2007) + 55.02397

R-squared = 0.5034; Adj. R-squared = 0.5112; t(FICO>660) = 4.63 t(2007) = 3.57

So people who bought at the peak of the bubble, or even when the bubble was beginning to break, are more likely to have Home Internet access than those who have been living in their house for a longer period of time.  Indeed, having lived in your house for a longer period of time correlates negatively, on a State level, with having Home Internet access.



Were we to speculate, we might guess that people who have been living in their homes longer did not have Internet access easily available and affordable when they bought their home, and have not decided to add it now.  (This would imply either that there are major transaction costs associated with gaining Internet access or that the people who bought in the pre-2006 environment are resource-constrained in other ways.)



As a reasonable speculation, people who bought in 2006 and 2007—arguably, the top of the market—have (or believed they have) less price sensitivity than those who bought while the bubble was inflating.  This might suggest that the people who were buying in 2006 were more likely to be “trading up” than buying for the first time. There is anecdotal evidence to that effect. Looking at the graphic of U.S. home ownership percentage:

it appears that by 2006, the market consisted more of homeowners and speculators than it did new buyers, but the data I’m using does not have the granularity either to accept or reject that hypothesis.***

In any event, further research appears to be needed—or, maybe, this is just the Spurious Correlation of the Day.

*Jim Henley—and any other parent whose daughter is a Club Penguin devotee (for instance, me)—might disagree.

**Those not in the social sciences will look at these R-squared values and wonder if there is anything being presented.  40% is, I am told, a very good result.  Indeed, since the entirety of Real Business Cycle theory is hung on an R-squared close to 0.50, certainly a finger exercise with a result that is only 80% of that would be, if not earth-shattering, then at least publishable.

***Suggestions for sources that might indicate whether buyers were speculators—e.g., state-level data that indicates if property was being purchased to be a primary residence or second (“vacation”) home—might be available are welcome in comments or via e-mail.

by Ken Houghton (noreply@blogger.com) on March 03, 2010 08:54 PM

A conference on financial reform has just begun at 8:00 AM today 3/3 with some major names in the lineup. It is hosted by the Roosevelt Institute and will be webcast in full from 8:00 AM to 11:00 AM at www.makemarketsbemarkets.org by CNN. Bloomberg will cover the 9:30-11:00 AM segment live.



Participants include George Soros, Elizabeth Warren, Joe Stiglitz, Jim Chanos, Lynn Turner, Simon Johnson, Judge Stanley Sporkin, Peter Solomon, Frank Partnoy, Larry White, Rick Carnell, Michael Greenberger.



For more information, please check the website, Make Markets Be Markets.



Due to last minute complications Angry Bear will not have a representative covering the conference.

by Rdan (noreply@blogger.com) on March 03, 2010 01:35 PM

by Tom aka "Rusty Rustbelt"



Health Care Reform is Already Happening



Ohio State University Medical Center has built an affiliated physician group of more than 600 physicians. Effective by January 1, 2011, the physicians will be merged into OSUMC (not as medical school faculty) and will be full employees of OSUMC.



OSUMC will do all billing under a consolidated provider number and create a system wide electronic medical record.



This is an "integrated delivery system" (IDS), the strongest trend in health care delivery reform these days.



This is not new, the health care reform discussion in the early 90s created the first major wave of integration. Many of these efforts were massive flops, some worked well and other just cripple along.



Hospitals are not always able to properly manage physician practices, like the skilled driver of an 18-wheeler cannot jump into NASCAR, same concept, much different execution.



An IDS will presumably have much great bargaining power with health insurers, and there is a school of thought that health care costs could actually be driven up.



Without or without action in Washington, health care reform is moving ahead.



HT: Columbus Dispatch

_________________________________

Tom aka "Rusty Rustbelt"

by Rdan (noreply@blogger.com) on March 03, 2010 10:04 AM

by Linda Beale

Speculation and Finance: Good for you? (part III)



In a couple of prior postings (Part 1 and Part 2), I considered (1) Darrell Duffie's op-ed in the Wall St. Journal asserting that financial institution speculation in the markets is "good" for us and (2) the question of financial institution speculation in credit default swaps on Greek debt as a possible factor in the worsening of Greece's financial situation.



Speculation seems to be on everybody's mind these days. The Economist, for example, is running a debate on the question of the value of financial innovation, here. Volcker famously has commented that about the only financial innovation of the last century that was really worth anything was the ATM, as the moderator noted inher opening remarks.

A few years ago America's sophisticated financial system was hailed as a pillar of its economic prowess. The geeks on Wall Street and their whizzy new products symbolised the success of American capitalism just as much as the geeks in Silicon Valley. Today things look very different. After the worst financial crisis and deepest recession since the 1930s, Wall Street has become synonymous with greed and irresponsibility in the public mind. And while no one doubts that financial innovation made a lot of financiers extremely rich, a growing number of people question whether it did much, if any, good for the broader economy. Paul Volcker, former chairman of the Federal Reserve and an advisor to President Obama, has famously claimed that he can find "very little evidence" that massive financial innovation in recent years has done anything to boost the economy. The most important recent innovation in finance, he argues, is the ATM. Id.

The debate is about cutting edge financial innovation as came into style in the 1980s--mortgage-backed securities, collateralized debt obligations, credit default swaps and other financially engineered derivative instruments and innovations like exchange-traded funds and inflation-protected bonds. So who are the voices for the Con and Pro side on "love that speculation and financial innovation" at The Economist? It's Joe Stiglitz, Nobel prizewinning neo-Keynesian (who should, in my opinion, have been appointed to the position that Larry Summers holds in the Obama administration) arguing against the value of most financial innovation--the "right kind" he says, could help financial institutions fulfill their core functions more efficiently, saving money and therefore contributing to economic growth. "But for the most part, that's not the kind of financial innovation we have had." Most of the recent financial innovations have been primarily accounting gimmicks and inventions designed to game the tax system--In my terms, those are not productive investments that move technological innovation, but shell games to fool regulators and pocket the windfall for the wealthy few. Een the inventions that had the potential to stablize the financial system actually ended up destabilizing it, because of their abuse in the furtherance of greed. And in the other corner, it's Ross Levine, Professor of Economics at Brown, who thinks financial innovation is "crucial, indeed indispensable" for economic growth.



Not surprisingly, I think Stiglitz has the winning argument here about the questionable value of most of the late 20th century financial innovation.

We should not be surprised that the so-called innovation did not yield the real growth benefits promised. The financial sector is rife with incentives (at both the organisational and individual levels) for excessive risk-taking and short-sighted behaviour. There are major misalignments between private rewards and social returns. There are pervasive externalities and agency problems. We have seen the consequences in the Great Recession which the financial sector brought upon the world's economy. But the consequences are also reflected in the nature of innovation, which, for the most part, was not directed at enhancing the ability of the financial sector to perform its social functions, even though the innovations may have enhanced the private rewards of finance executives. (Indeed, it is not even clear that shareholders and bondholders benefited; we do know that the rest of society—homeowners, taxpayers and workers—suffered.)



Some of the innovations, had they been appropriately used, might have enabled the better management of risk. But, as Warren Buffett has pointed out, the derivatives were financial weapons of mass destruction. They were easier to abuse than to use well. And there were incentives for abuse.

by Rdan (noreply@blogger.com) on March 03, 2010 09:55 AM

by Rebecca Wilder



This is expansionary monetary policy...



... this is expansionary monetary policy on drugs



Note: Japan's M1 growth is labeled on the RHS, with range -1.5% to 1.5%.



Any questions?



I know, kind of corny; and I did grapple over which set of economies should be labeled "on drugs", the BIICs or the Majors.



And BIICs is NOT a typo. I'm going with BIICs now - Brazil, Indonesia, India, and China. This is a modified version of Jim O'Neill's famous cohort, the BRICs (Brazil, Russia, India, and China), whose economies in $ terms are expected to jointly transcend the G6 by 2050. Russia's been ousted for reasons that I will discuss at a later time.



Soon to come: Indonesia vs. Russia.



Rebecca Wildercrossposted with Newsneconomics

by Rdan (noreply@blogger.com) on March 02, 2010 05:15 PM

This one’s just for Mr. Judd:

The Daily Show With Jon Stewart	Mon – Thurs 11p / 10c
The Uninformant
www.thedailyshow.com
Daily Show Full Episodes Political Humor Health Care Reform

by tgirsch on March 02, 2010 03:40 PM

by Linda Beale



More on speculation: Banks, Credit Default Swaps, and Greece's Debt (Part 2)



Yesterday, I commented on Darrell Duffie's defense of speculation in the Wall Street Journal, here. I noted that the idea that speculation is a positive because it absorbs risk others don't want and helps reveal the "true price" by providing more information about the speculated item seems more of a stretch in the midst of this crisis than we might have thought before. Absorption of risk only works if there is a more or less even playing field, with some long and some short, but that adds little to information or price. If there is an abundance of information on price--because traders are shorting the stock or rushing for credit default swaps, then that information will tend to swing the price and make it much more difficult for speculators to absorb the risk, as the market teeters offbalance on that item and pushes the item more and more to the cliff that the speculators have predicted.



Whatever the underlying problem in Greece, financial speculation has been a factor in tilting the balance towards disaster. The price of credit default swaps has gone up, and each time that Greece tries to borrow to pay its debt, it has to pay more and the CDS cost goes up and Greece looks riskier in a vicious cycle threatening illiquidity. Thus, one commentator notes that "credit default swaps give the illusion of safety, but actually increase systemic risk. See Banks Bet Greece Defaults on Debt They Helped Hide, NY Times, Feb 25, 2010.

____________________________________

crossposted with ataxingmatter

by Rdan (noreply@blogger.com) on March 02, 2010 10:10 AM

So there are several comments to my previous post. Ignoring the a good one from Dr. DeLong, several people are taking umbrage at my unsubtle suggestion that the effect on employment being suggested is, to be polite about it, rather creative.



kharris begins, "So let me see if I have this right. If anybody tries to figure out what the impact of snow on economic data might be, they are big fat liars? But those who know that the economy is in bad shape, without reference to actual events, is a stand-up kind of hack?"



Following is an expansion of my comment in that thread, with data:



To the second question, well, I may be a hack, but my stand-up days are in the past. But given the choice between believing that the recovery is in full swing and that long-term unemployment is getting worse and jobs are not and will not be created, well, I'll take the CBO projection as the baseline:

CBO expects the unemployment rate to average a little over 10 percent for the first half of 2010, and it will probably not dip below 9 percent until 2012.

and note that if we're calling that a recovery, our definitions have become Very Generous. So bold claims of recovery need to be tempered by the prospect of worse headline unemployment (U-3) for the next five months (including February) and no significant recovery for the eighteen after all.



Sorry I'm not doing handstands that GDP might be slightly positive for a few quarters of sub-replacement level employment increases, but I didn't cheer the "recovery" of 2002 either, so at least I'm a consistent hack.



To the first: Not at all; trying to figure out the effect is fair game and perfectly reasonable. But the declarations so far are all running in one direction: we believe the economy is better than the data will be, so we need to wait if it looks bad. (See Ms. Caldwell as quoted by CR or Catherine Rampell, for example.) Rampell:

That report will probably be very, very ugly. I have seen some forecasters project job losses as high as 100,000.



The main culprit behind the expected jobs plunge is the blizzard, which closed businesses and kept people from going to work or even seeking work for days and sometimes weeks. These work stoppages probably occurred precisely when the government was collecting data for its February jobs report.

So the current estimates are all that (1) demand was down and (2) employment was down.



And (3) deliveries were down: see the ISM data.

Put it all together, and you can tell a story of heavy snow snarling shipments to and from manufacturers, slowing down production growth.

But at least in this case, we have a clear indicator: the increase in backlogged orders.



Finally, (4)savings.

The reasons for the stall are twofold: For one, rebounding wealth since the recession’s depths has helped provide some support for consumer spending. Secondly, weak income growth has left other consumers with little choice but to spend proportionally more of their incomes, particularly in light of [5] still-tight credit conditions.

So demand, supply, savings, credit, and employment are all down. The first and second are aberrations of snow (and equilibrium), the second and third abide.



Which leaves employment, which is discussed in more detail than most sane people would want below the fold.





Now, it is clear that people who are employed did not work in the week. But they are not likely to have reported themselves as "unemployed" or (except in a very literal sense) "out of work." True, they did not produce—but what they would have produced was not bought, and hence there is a backlog of orders.



But companies that now have backlogs of orders know that this was because they did not have their current workforce. Accept an order to produce, say, 200 units (which takes a month to produce) and lose five to eight business days and you'll be 50-80 units behind.



But you're not going to go out and hire a new person to fill the backlog.



Yes, there was an effect on production and sales. But the idea that 100-200K jobs went unfulfilled solely because of weather conditions that were aberrant primarily in the mid-Continent is either (1) rather optimistic or (2) ignoring that the excess snow effect was mostly in the areas that are least underemployed. (See this nice map from Catherine Rampell)



So in the best case scenario, the recovery was muted because things were not delivered or sold—though money (savings) was (were) spent. And the only reason firms didn't hire was the snowstorm that closed D.C. and delayed Philadelphia. (Though there was no snow in NYC and, as noted, nothing unusual about the fallings in the Midwest.)



The worst case scenario is that demand wasn't filled solely because supply wasn't available because existing workers could not produce. Working on the "nine women pregnant for a month don't produce a baby and you have a real problem eight months thereafter" rule, employers will (generally correctly) view their February backlog as a result of existing labor not working, not as a need to hire new workers.



If you're balancing the effects of those two—standard Slutsky analysis, as it were—there is a high likelihood that hiring will be dampened going forward by the snowstorm as firms underestimate actual demand. It is less likely that actual hiring was significantly reduced by it.



But that's not the way the discussion is going. So a bad (negative) number has excuses, a poor number (positive, but less than replacement rate) has excuses and should be seen as "good," and a good number (replacement rate or better) will mean "all ahead full."



So I tried looking at ancillary data. Looking at power usage, for instance, indicates a major decline that would correspond to less activity(Table 1.6.b; Commercial usage YOY down 3.6%; Industrial usage YOY down 5.6% with declines in all areas; total usage down 4.3% YOY [Table 1.1])—but that's only through November.



Maybe the past three months have been part of a miraculous recovery. But it's not in employment, its not in the available energy usage data, and it doesn't follow from the ISM data, which indicates slow growth at best.



Those who want to claim the economy is recovered have been, as noted, "working the refs." So a bad number (by Rampell's apparent reasoning) will kill health care reform, but not mean that we need a second stimulus—even though the states are hemorrhaging money and, soon, jobs. (Teachers, police and fire--you know, all the nonessential personnel.)



It's a heads-we-win-tails-we-win-more situation being set up.



If we pretend that all of the argument are true: that the snowstorm was a once-in-a-lifetime event and that it really did produce a major skew though, we might want to look at what happened the last time a "once-in-a-lifetime event" occurred near the end of a recession.

The vertical lines are at September and December of 2001. For a week in September, everyone—and this time I mean everyone, not just the bottom third of the Bos-Wash corridor—stopped shopping for a week. As predicted above, the employment effects abided for at least the next few months. (Recall, after all, that that recession officially ended in November.)



Given the choice between (1) assuming that there will be a one-off decline in employment due to the snow and that everything will return to recovery next month or (2) that there will be a lingering, negative employment effect from the snowstorm and attendant business slowdowns, there appears to be only one way to bet, given the data and the history.



Yet the calls right now—absent evidence—are going the other way.



If we're working from anecdotal evidence, then certainly there is a recovery. It's the extant data that doesn't support any recovery that is not also described as "jobless and uncertain." That may change on Friday. But it's not the way to bet, no matter how much the refs are worked.

by Ken Houghton (noreply@blogger.com) on March 02, 2010 03:09 AM

Turkey's on my mind. Let me sum up my point – that the outlook for the Turkish economy hangs very much in the balance – from the following news excerpts.



From the Hürriyet Daily News and Economic Review on February 8 :

the Legislation for the [fiscal] rule, which will limit the size of the budget deficit as a proportion of gross domestic product, will be submitted to Parliament in the next few months, Babacan said. The government has announced a formula setting the framework for annual budget preparations. Elements in the formula, such as the target level of the deficit and variables that define the speed at which the country will reach its target for the debt stock, have not been set.

From BusinessWeek, via Bloomberg, on February 19:

S&P lifted the country’s sovereign credit rating to BB with a positive outlook, two levels below investment grade, from BB-, according to an e-mailed statement today. Reductions in government debt and a “solid” banking system were cited as two of the reasons for lifting the rating. “The upgrade reflects our view of the Turkish government’s improving economic policy flexibility as a result of its strong track record in steadily reducing the debt burden,” said S&P analysts including Frank Gill in London.

And then from the Hürriyet Daily News and Economic Review on March 1:

A constitutional reform package is at the center of Turkey’s ruling party’s attention after the recent crisis between the judiciary and the government. With a long list of to-do items, the ruling party is likely to seek consensus from opposition parties first before presenting its suggestions to Parliament and may have to barter for progress

The AKP (majority party) made a 180-degree turn from tackling economic reform in a country with twin deficits to potentially very contentious constitutional reform. (IHS Global Insight, subscription required, forecasts Turkey’s current account deficit to be 3.3% of GDP in 2010 and the fiscal deficit to be 5.1% of GDP). Constitutional reform is difficult and necessary, given that the current version was imposed after the 1980 military coup. However, it does put the economic recovery at risk.



Confidence, and thus the recovery, is on the line. Currently, Turkey has the highest misery index across 16 O.E.C.D. countries selected by yours truly.



Turkey’s misery index was 18.6% in November 2009: 13.1% unemployment plus 5.5% inflation. Inflation has since risen to 8.2% in January, so the misery index likely worsened. (It wouldn’t be too crazy to claim that Turkey’s misery index is setting world records, but I did not construct indexes for the world.)



Rising misery drags consumer confidence, and thus demand, with near-certainty. I don't think that it's a stretch to expect recent political volatility to drag the consumer confidence even further.



Misery and waning consumer confidence has already driven a wedge between demand and supply (industrial productions), suggesting that recent gains in the production sector are most likely unsustainable.



But business confidence is also on the line. Emre Deliveli (please see his blog for updates on Turkey) points me to the survey results of the American Business Forum in Turkey. An excerpt from the 2009 report:

65% of US company executives are concerned about receiving fair treatment when bidding on government contracts and find commercial courts to be unresponsive to the needs of business. The transparency and efficiency of decision-making in the public sector remains a key concern as in previous years. High electricity costs are a negative factor, and personal and corporate income taxes are considered to be complicated and not competitive with other countries. There are also concerns regarding credit costs and financing opportunities. Only 30% of executives find that there is adequate protection of intellectual property rights, including patents, trademarks and copyrights.

It’s obvious that reform is necessary. But whether or not constitutional reform leads to productive microeconomic reform is a serious question, in my view. One thing is for certain: if constitutional reform supplants economic reform over the near-term, the economic prospects are less sanguine. In fact, the medium-term fiscal metrics are at risk as well.



Rebecca Wilder

by Rebecca Wilder (nontruths@gmail.com) on March 02, 2010 02:34 AM

This is going to be one of those personal sidebars which you should treasure because they occur here pretty rarely. (Yes, that is sarcasm. Jeez.) Unlike some political bloggers, I do not post completely anonymously, but unlike some others, I reveal little of my personal life because I think it's not particularly relevant to what I'm writing about. On the other hand, this does sort of lead into something I have been planning to write about, so perhaps it can be justified on those grounds.



The thing is, and this is the footnote part, I know, obviously, I've been AWOL for a week now. I apologize for that. I simply have felt disconnected from the world at large, uninterested in events, and so tended to hear about them a couple of days after the fact, if at all. (Interestingly, I did continue to watch Countdown, Rachel Maddow, and "the guys" - Jon Stewart and Stephen Colbert - pretty much every night, which only served to emphasize how much you do not learn from TV.) Perhaps it was just a bit of cocooning, but more likely it was just my emotional emphasis being placed elsewhere.



Start with the fact that I have been without full-time work for two years now. My particular field - in which I had worked pretty steadily for the preceding 20 years - is, oddly, rather specialized but also crowded. I am (and I say this with the ability to back it up) quite good at what I do but the simple truth is there are for all practical purposes no full-time openings here - and few enough anywhere else. Plus, we really really really do not want to move again.



So when my wife had to stop working because of her heart condition, our income took a really big hit as well as costing us our health insurance. The combination of her disability benefits and my seasonal work leaves us with an income about 160% of the federal poverty line. That qualifies us for some benefits.



We didn't apply for any right away, at least partly because, well, I admit to feeling this way more than my wife does, but the truth is, I don't feel poor. I have a roof over my head, enough food and clothing (perhaps too much of the former), a little money in the bank - I mean, I have high-speed internet and cable TV, f'r goo'ness sake. I am deeply aware, sometimes literally physically painfully aware, of how many are far worse off. Still, we are both aware of how much that we have, we have because it was secured before things went south for us and looking down the road we could see the bank account draining away so we decided to investigate and discovered that we do legitimately qualify for some programs of assistance.



So we went to one agency with all the documents they needed and after a brief interview - a relaxed and friendly one lacking any of the sense of condescension too often experienced by those in need - we were told how much aid we qualified for.



Quite literally, my jaw dropped and I said "You're kidding." It was far more than we expected, more even than we'd hoped. Which in a roundabout way is how this serves as a header to the following post. On the way home and for most of the evening, we were almost giddy. It was such good news that we had a "celebration." (Dinner out at a Chinese buffet. Big spenders.) The point here is, we, perhaps especially I, hadn't realized just how great the stress, how deep the worry, was until some of it was relieved.



We've all heard it said, I believe accurately, that the stress of financial worries drives more divorces than any other single cause. (Parenthetical note in case you're wondering, as I would be, we were in no danger of that.) It's also a truism that much of our sense of self-worth is tied up in our jobs, I personally think because they become the means by which we measure both how much we matter and how much we contribute. (I also think self-worth and jobs are too closely tied since, as should be clear, the jobs part is not always under one's control, but that's a discussion for another time.) The struggles that people are going through right now are more than financial, they are also physical, emotional, and in the broadest sense of the term, spiritual. But we have no easy way to express that on more than an individual level, no way to directly express the sum total of that struggle. So we resort to what we hope are illustrative examples, to anecdotes - which are then used as sources of mockery by rightwing dipwads who not only do not feel for others, they want to not feel for others.



Yes, we have the numbers expressing the economy, numbers depressing in and of themselves but which can't express the day-to-day stress of worrying about your next rent or electric or heat or phone bill, your next doctor's appointment, your next car repair, even your next (or your children's next) meal. It is when those numbers are taken in their deeper sense, as expressing the lives of those who are feeling distressed, disturbed, even defeated, who are frustrated by the present and fearful of the future, when they are no longer the calculations of economists but are felt as the pain of millions, that they achieve their true importance. The numbers are not only a measurement, they are a moral judgment about our society.



That is a cue for me to go off on the roots of the tea baggers, a movement populated largely by frustrated, frightened people looking for someone to blame for their feelings of loss and confusion who are being manipulated into directing that anger away from its rightful targets and toward convenient, traditional ones - but that, too, is a story for another day. As is something related which Glenn Beck said in his rant at CPAC. But I will get to it.

by LarryE (noreply@blogger.com) on March 01, 2010 11:40 PM

It more and more seems to me that having some political or social commentary or opinion punctuated with the line "Think about it" is evidence that the author didn't.

by LarryE (noreply@blogger.com) on March 01, 2010 10:55 PM

Oblique H/T to Uncle.

UPDATE: The “other one” that Uncle mentions:

by tgirsch on March 01, 2010 09:36 PM

So there was this big snowstorm that hit the East Coast a couple of weeks ago. (Not the one this weekend, that dumped about 2' of snow on Upstate New York and a little more than a foot here in suburban New Jersey; the one that wiped out D.C. and gave the Party of No an excuse to do nothing.)



Snow in February. What a surprise! Clearly, not something that happens every year.



My high school classmates and others in the Midwest see the notice and say, "Yeah, gosh, sounds like January and February here."



But This One is Different. Maybe because it gave the U.S. press an excuse to pay no attention to Haiti. Maybe because closing down D.C. meant that all the pundits got to whine and reveal their suffering.



And, just maybe, because it has become the all-purpose excuse for the February Employment Report. Or any other hint that the world is not perfect, and those "green shoots" haven't been eaten by starving deer who were then shot by Big Bank Hunters.



The Usual Suspects are already out in force.* And the hedging (not in the risk management sense) has begun:

"We will have to wait until March to see if February is an aberration or a fundamental sign that the recovery in sales will be more subdued than hoped," [Jessica Caldwell, Edmunds' director of industry analysis said].

So anything that can be marginally interpreted as positive will be The Crest of a Wave, while anything that makes those legendary shoots look as if they were artificial flowers will get the rousing "Wait Until March!" cry.



All we really know is that—thanks to Senator Bunning and a pliant Democratic "leadership"—March, not April, is the Cruelest Month for about 1.2 million normally-working Americans.



But, gosh, the job gains for February might be understated by 5-8% of that total. So let's not do anything hasty.



*Yes, it's "pick on Brad DeLong day." Didn't you get the memo? (Also, I can't find discussion of the topic at any of the Other Usual Suspects, though I haven't checked The Big Picture.)

by Ken Houghton (noreply@blogger.com) on March 01, 2010 03:08 AM

by Linda Beale



Bankers Bonuses and Bank Reforms: why they are needed, what they might include, and are you angry yet?



A big title for a tiny little sketch of a post, I know. Not much time today folks, but if you can read only one blog posting, read the one at Naked Capitalism at the link provided at the end of this paragraph. Yves comments on the Independent's article on bankers' bonuses and the Wall Street firms' incredible egos and greed. See US Banks Reject Effort by UK Bank Execs to Reign In Pay, Naked Capitalism, 022

• break up the investment banks;
• regulate their leverage and their bonuses,
• ban their flash trading
• heavily regulate their involvement in speculative gambling with derivatives (i.e., betting on positions that they don't own). And given that their resurging profits are due to two things--(1) resuming the same casino gambling that caused the 2008 crisis and Great Recession and cost millions their jobs and (2) feeding off the public trough for TARP direct funding (the AIG bailout, etc going directly into Goldman and JPMorgan Chase's pockets) and implicit guarantees resulting in very cheap cost-of-funds permitting Goldman et al to make profits with federal loans--we need to add a new tax for the big banks as a charge for the government guarantee that they are getting rich off of (again). The tax should be a substantial enough bite that it will force the banks to both significantly reduce their leverage and significantly reduce their bonus payment system. It can be either in the form of an excise tax based on their leverage (since their borrowed funding is what costs the government in terms of bailout potential) or in the form of an income tax surcharge that is progressively structured so that the highest rate applies to banks with the greatest amount of leverage. It could even be a tax structured as a tax on each derivative position like credit default swaps entered into that isn't backed by a long position (so not a true hedge but a speculative bet). I don't knw for sure which form is best (comments welcome) but I sure as heck think some version or another should be passed, and soon, else we are in for a repeat that is more disastrous than the GOP-gifted Great Recession we are already experiencing. _________________________________

crossposted with ataxingmatter

by Rdan (noreply@blogger.com) on March 01, 2010 02:26 AM

by cactus



Yeah, I Felt the Big One: Memories of the Chilean Earthquake



My father had something of a Forrest Gump college experience, being "there" at a couple of unfortunate historical events. One example - in 1960, he was studying Physics at the institute in Bariloche, a town in the Andes in Argentina. That's about 220 miles from Valdivia, Chile, more or less the epicenter of the 1960 earthquake that measured 9.5 on the Richter scale. That earthquake remains the largest one ever measured. (For comparison, last week's earthquake in Chile was an 8.8.) It is worth noting - a tsunami resulting from the quake killed 61 people in Hawaii and 35 foot waves hit as far away as Japan and the Philippines.



Here are a couple excerpts of an e-mail my dad sent me:

YEAH, I FELT THE BIG ONE!!! The Mother Of All Earthquakes (MOAE)



That 1960 earthquake(s) was a different kind of animal. Usually there is a big quake and then several aftershocks follow. In MOAE there were at least 4 pre-cursors of magnitude around 8 and then the 9.5 hit.



In the early morning of May 21 I was with some other guys studying at the Chemistry lab. I noticed that liquid in a glass container was sloshing. I mentioned it to the others but they didn't pay much attention.



At that time we were studying rather hard and didn't know what was going in the outside world. We didn't know that seismic activity had started at the other side of the Andes. There were 2 big quakes on the 21st and 2 more on the 22nd just on the other side of the Andes and we didn't notice much.



Then around 5 in the afternoon of the 22nd, we were having tea or coffee at a cafeteria when a couple of big chandeliers started oscillating like a pendulum. We felt the ground moving and ran outside. We couldn't stand so we sat at the curb which also was moving like crazy. There was also a very funny sound.



That was the huge 9.5 MOAE that had hit Valdivia a few hours earlier. There were many aftershocks - several with magnitude larger than 7.0 through June 4.



2 dormant volcanos awoke and 3 new ones emerged. All that time there was a thick rain of ashes coming down. We had to walk outside covering our faces with scarves.

____________________________________

by cactus

by Rdan (noreply@blogger.com) on March 01, 2010 01:27 AM

I would have liked the US to get that gold medal, and they almost pulled it off, but no matter who won, it was a fantastic game. A fine example of why I love hockey. And if they US can’t have the gold, I can’t think of a better country to get it than Canada, especially in front of the home fans in Vancouver, one of my favorite cities.

by tgirsch on March 01, 2010 12:36 AM

I have been a Bad Blogger this week. (As opposed to my usual practice, which seems to be described as Blogging Badly.)



While I intend to continue the New Tradition (think of me as Waylon, without the speed), following are Snow Day Links:



D-Squared was on fire on Wednesday: both Bank Lending Channel and The Foundations of Mathematics and the Roots of Finance are essential.



For all those of you—looking straight at you, o six-footed one—who believe TARP was the right idea to save the economy, here's another data point: "Overall bank lending in the US economy shrank 7.4% in 2009 — the sharpest drop since 1942."



James Hamilton looks at Those Other Programs that support the banks without providing any funds to the rest of the economy (though I don't think he put it that way).



With all the talk of Liquidity needs and Greek bonds, jck at Alea posts an essential chart.

by Ken Houghton (noreply@blogger.com) on February 28, 2010 11:04 PM

REDIRECT for "POLITICAL CORRECTNESS WATCH"



Response times on the site hosting "POLITICAL CORRECTNESS WATCH" have become so slow as to render the blog almost inaccessible.



I have therefore moved the blog back to its original home on blogspot. Go HERE to access all the recent postings.



I moved it off blogspot at a time when Google (the owner of blogspot) was having a severe bout of irrationality but they seem to have settled down since then so I am hoping that the move back can be permanent.



*******************



Why Democrats Don't Care about $9.7 Trillion Debt



As reported by The Washington Post, "President Obama's proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday." CNN adds, "Of that amount, an estimated $5.6 trillion will be in interest alone."



The Post continues: "The CBO (Congressional Budget Office) and the White House (are) ... both predicting a deficit of about $1.5 trillion this year -- a post-World War II record at 10.3 percent of the overall economy. But the CBO is considerably less optimistic about future years, predicting that deficits would never fall below 4 percent of the economy under Obama's policies and would begin to grow rapidly after 2015. "Deficits of that magnitude would force the Treasury to continue borrowing at prodigious rates, sending the national debt soaring to 90 percent of the economy by 2020, the CBO said."



CNN adds that "By 2020 the (CBO) estimates debt held by the public would reach $20.3 trillion, or 90 percent of GDP. That's up from 53 percent of GDP in 2009."



I suspect that most Americans, if asked whether these numbers trouble the Democratic leadership and President Obama, would answer in the affirmative. They would be wrong.



They would be wrong not because the Democratic Party or the president are economically illiterate or bad individuals, but because the Democratic Party and the president are leftists. And most Americans, including most Democrats, do not understand the left. They may understand liberalism; but President Obama, Nancy Pelosi, Harry Reid, and most Democratic representatives and senators are not liberals; they are leftists. And most Americans do not understand the difference between liberal and left. They do not realize, for example, that there is no major difference between the American Democratic Party and the leftist social democratic parties of Western Europe. They do not know that from Karl Marx to Obama, the left (as opposed to liberals) has never created wealth because it has never been interested in creating wealth; it is interested in redistributing wealth.



Therefore, unprecedented and unsustainable debt, a debt that will negatively affect most Americans' quality of life, renders the dollar increasingly undesirable, and undermines America's prestige and power in the world -- these developments do not particularly disturb the left. They may trouble the president, the Democratic Party, and others on the left on some political level, but that pales in comparison to what the left really wants: a huge government overseeing a giant welfare state and a country with far fewer rich Americans.



Achieving those goals is far more important than preventing a decline in the American quality of life. The further left one goes, the more contempt one has for the present quality of American life in any event. The left regularly mocks many of the symbols of that life -- from the three-bedroom suburban house surrounded by a white picket fence to owning an SUV (or almost any car) because Americans should be traveling on public buses, trains and bicycles.



As for the dollar, I can bear personal testimony to the decline of the dollar's prestige. I am writing this column in Morocco. In Casablanca, my wife and I and another couple hired a Moroccan driver for the day. And when it came time to pay, the man refused to accept dollars; he wanted to be paid in either Euros or Moroccan dirhams. Yes, dirhams rather than dollars. But the demise of the dollar as the world's currency disturbs the left as much as does America's not getting a gold medal in curling at the Winter Olympics.



And as for America wielding less power in the world, that is a positive development for the American left. It is the world community as embodied in the United Nations that should wield power throughout the world, not an "overstretched," "imperialist" and "militarist" United States.



I used to believe that left and right have similar goals for America, that they just differed in the means they wanted used to get there. I was mistaken. The left has a very different vision of America than those who hold the founding values of America, most especially individualism and small government. And if the price of a once in a lifetime possibility of getting to a giant welfare state dominated by the left is America's steep financial decline, that is a price fully worth paying.



SOURCE



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The Roadmap Warrior



Paul Ryan's Roadmap for America's Future would drastically overhaul the American welfare state in a free-market direction. The Congressional Budget Office says it would solve the entitlements crisis through a series of changes to Social Security and Medicare and Medicaid. The Roadmap also includes a fundamental tax reform -- one that Ryan says, and the CBO assumes, would bring in revenues equivalent to the long-term historical average of 19-percent of GDP. Two new studies dispute that figure, however. I talked to Ryan this evening to get his response.



"We feel good about our numbers," Ryan told me. "You can tweak a plan to get it toward a historic trend." He's referring to a Brookings Institution's Tax Policy Center study that says the Roadmap would fall short of its 19-percent goal over the next 10 years, bringing in revenues of somewhere between 16.6 percent and 16.8 percent of GDP. In a statement last night, Ryan said that "the purpose of the Roadmap is to get spending in line with revenue -- not the other way around." He reiterated that argument in his conversation with me today. "The point is the spending."



Philip Klein made some salient observations in a post earlier today:

There's good reason to believe, based on economic theory and empirical experience, that at least some portion of that "lost" revenue would be recouped by higher GDP. But the overaching point is that the Ryan plan, as scored by the CBO, shows that there's a way to balance the long-term budget by keeping taxes at historical levels rather than raising them to levels that would cripple the economy. If critics acknowledge that Ryan's reforms to Social Security, Medicare, Medicaid, and the health care system can make our nation solvent as long as we maintain historical levels of tax revenue, and the only argument left is over how to maintain historical levels of taxation, then I'd say that's a major victory for Ryan.

The other charge critics make is that Ryan's tax changes would hurt the poor. That's the theme of a second report by the liberal Citizens for Tax Justice (CTJ), which concludes with this: "It's difficult to design a tax plan that will lose $2 trillion over a decade even while requiring 90 percent of taxpayers to pay more. But Congressman Ryan has met that daunting challenge." It's impossible not to notice the snide tone. But sarcasm isn't always persuasive.



The $2 trillion figure is a reference to the Bush tax cuts, which Ryan's plan would make permanent for everyone. (One should note that by this measure, the Obama tax plan will also "lose" some revenue, since the president only wants the tax cuts to expire for upper-brackets.) But Ryan also cuts spending over time. Obama does not.



As for "requiring 90 percent of taxpayers to pay more," that's a swipe at Ryan's zeroing out the stimulus and replacing the corporate income tax with a business consumption tax. You see, Ryan says the expansion of the Earned Income Tax Credit and Child Tax Credit in Obama's stimulus bill is spending, not tax cutting. He'd eliminate it. And CTJ counts a reduction in that spending as a tax hike.



The business consumption tax would be passed on to the consumer, making it regressive. But Ryan notes that Americans indirectly feel the consequences of the above-average U.S. corporate tax rate today, through lost wages and higher prices. And these effects are regressive, too. Unlike the current situation, Ryan goes on, the business consumption tax "is cleaner, simpler, and it's on paper." It would also make American exports more competitive than they are today. "I believe it's a better deal," he says. Most important: "It's more uniform. You can't play social engineering."



The dynamic effects of Ryan's reforms are impossible to predict. Over time, government would shrink, investment would expand, and America's credit rating would improve. America would become a haven for foreign capital. Her citizens would have more individual choice and, yes, more individual responsibility. "Policies such as these," Irving Kristol wrote decades ago in his essay "The Republican Future," "have the obvious advantage of reconciling the purposes of the welfare state with the maximum degree of individual independence and the least bureaucratic coercion." No wonder Paul Ryan is smack in the middle of liberal sights.



SOURCE



***********************



Low-tax Texas beats big-government California



"Stop messing with Texas!" That was the message Gov. Rick Perry bellowed on election night as he celebrated his victory over Sen. Kay Bailey Hutchison in the Republican primary for governor. In his reference to Texas' anti-littering slogan, Perry was making a point applicable to national as well as Texas politics and addressed to Democratic politicians as well as Republicans.



His point was that the big-government policies of the Obama administration and Democratic congressional leaders are resented and fiercely opposed not just because of their dire fiscal effects but also as an intrusion on voters' independence and ability to make decisions for themselves.



No one would include Perry on a list of serious presidential candidates, including himself, even in the flush of victory. But in his 10 years as governor, the longest in the state's history, Texas has been teaching some lessons to which the rest of the nation should pay heed.



They are lessons that are particularly vivid when you contrast Texas, the nation's second most populous state, with the most populous, California. Both were once Mexican territory, secured for the United States in the 1840s. Both have grown prodigiously over the past half-century. Both have populations that today are about one-third Hispanic.



But they differ vividly in public policy and in their economic progress -- or lack of it -- over the last decade. California has gone in for big government in a big way. Democrats hold big margins in the legislature largely because affluent voters in Los Angeles and the San Francisco Bay area favor their liberal positions on cultural issues.



Those Democratic majorities have obediently done the bidding of public employee unions to the point that state government faces huge budget deficits. Gov. Arnold Schwarzenegger's attempt to reduce the power of the Democratic-union combine with referenda was defeated in 2005 when public employee unions poured $100 million -- all originally extracted from taxpayers -- into effective TV ads.



Californians have responded by leaving the state. From 2000 to 2009, the Census Bureau estimates, there has been a domestic outflow of 1,509,000 people from California -- almost as many as the number of immigrants coming in. Population growth has not been above the national average and, for the first time in history, it appears that California will gain no House seats or electoral votes from the reapportionment following the 2010 census.



Texas is a different story. Texas has low taxes -- and no state income taxes -- and a much smaller government. Its legislature meets for only 90 days every two years, compared with California's year-round legislature. Its fiscal condition is sound. Public employee unions are weak or nonexistent.



But Texas seems to be delivering superior services. Its teachers are paid less than California's. But its test scores -- and with a demographically similar school population -- are higher. California's once fabled freeways are crumbling and crowded. Texas has built gleaming new highways in metro Houston and Dallas-Fort Worth.



In the meantime, Texas' economy has been booming. Unemployment rates have been below the national average for more than a decade, as companies small and large generate new jobs.



And Americans have been voting for Texas with their feet. From 2000 to 2009, some 848,000 people moved from other parts of the United States to Texas, about the same number as moved in from abroad. That inflow has continued in 2008-09, in which 143,000 Americans moved into Texas, more than double the number in any other state, at the same time as 98,000 were moving out of California. Texas is on the way to gain four additional House seats and electoral votes in the 2010 reapportionment.



This was not always so. In the two decades after World War II California, with its pleasant weather, was the Golden State, a promised land, for most Americans, while Texas seemed a provincial rural backwater. Many saw postwar California's expansion of universities, freeways and water systems a model for the nation. Few experts praised Texas' low-tax, low-services government.



Now it is California's ruinously expensive and increasingly incompetent government that seems dysfunctional, while Texas' approach has generated more creativity and opportunity. So it's not surprising that Texas voters preferred Perry over an opponent who has spent 16 years in Washington. What's surprising is that Democrats in Washington are still trying to impose policies like those that have ravaged California rather than those that have proved so successful in Texas.



Michael Barone, The Examiner's senior political analyst, can be contacted at mbarone@washingtonexaminer.com. His columns appear Wednesday and Sunday, and his stories and blog posts appear on ExaminerPolitics.co



SOURCE



***********************



ELSEWHERE



Traders cut supplies of petrol to Iran: "The world’s largest oil traders have quietly stopped supplying petrol to Iran in a clear sign that the threat of sanctions and Washington’s behind-the-scenes efforts to convince companies not to sell to Tehran are paying off. However, the decision by Vitol, Glencore and Trafigura is unlikely to cut Tehran off completely from the global petrol market as traders said Iran’s long-standing suppliers were being replaced by small Dubai-based and Chinese companies. Although Iran is one of the world’s biggest oil producers, its refineries are dilapidated and it suffers from runaway petrol demand because of generous subsidies. Energy executives said Vitol, Glencore and Trafigura, which have hitherto sold Iran half of its petrol imports of 130,000 barrels a day, stopped supplying Tehran because of mounting political risk. “The political and public relations problems more than outweigh the business rewards,” said one executive."



Five lies about the American economy: "The ongoing recession has raised a troubling question for otherwise resurgent Keynesian economists: How can the American economy keep getting worse under the intensive care of an interventionist economic team almost universally praised for its brilliance? The answer may be that the Obama administration is dealing with a fictional economy, one that bears little resemblance to the economy the rest of us inhabit. And when the difference between fact and fiction becomes too apparent, they just make stuff up. Herewith, five big lies the administration loves to tell and the mainstream media (with some notable exceptions) love to repeat …”



Chris Matthews claims Israel hates Obama because he is black‏: "Perhaps the first sign was when the administration agreed to bring along MSNBC's "Hardball" host Chris Matthews, whose penchant for gaffery rivals Biden's. The media guest of honor used his Monday programming to suggest, along with another reporter, that Israelis dislike President Obama because they're racist. "Who's more popular over here? Hillary Clinton, Bill Clinton, Barack Obama, Joe Biden. Put them in order," Matthews asked New York Times reporter Ethan Bronner Monday on air. When Bronner put Obama at the bottom, Matthews inquired: "Okay, that tells you a lot. So tell me why the president of the United States is so far at the bottom? Is it his middle name? Hussein?" Bronner said "prejudice" about Obama's Islamic background was a factor, and then Matthews took it a step further, saying, "Yeah, because they see him as a black man."



My Twitter.com identity: jonjayray. My Facebook page is also accessible as jonjayray (In full: http://www.facebook.com/jonjayray). For more blog postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)



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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)



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by JR (jonjayray@gmail.com) on March 12, 2010 11:30 AM

by cjmac53@aol.com

Man, are they getting desperate, or what?  via Mish:

A federally funded ticketing blitz in the state of Virginia landed a total of 6996 traffic tickets this weekend. The blitz, dubbed “Operation Air, Land & Speed” coincided with frantic efforts by state officials to close a $2.2 billion budget deficit. Supervisors ordered state troopers to saturate Interstates 81 and 95 to issue as many tickets as humanly possible over the space of two days.

Jesus--the state police actually treated this like a got-damn military operation, and all because the state government has a hole in their budget the size of Obama’s ears. 

This is sheer desperation, plain and simple.  When you have to resort to traffic tickets to shore up your budget, it’s game-fucking-over.  And the most grotesque aspect of this whole mafia-style skim is that it was federally funded.  In other words, our tax dollars went to pay for this. 

Why are they resorting to measures like these?  A quick reminder:

Watching these states try to grapple with their underwater budgets is like watching a car wreck in real time.  You know it’s not going to turn out well, but you can’t look away.  Ponzi government is coming home to roost, kids.

March 12, 2010 07:41 AM

REDIRECT for "POLITICAL CORRECTNESS WATCH"



Response times on the site hosting "POLITICAL CORRECTNESS WATCH" have become so slow as to render the blog almost inaccessible.



I have therefore moved the blog back to its original home on blogspot. Go HERE to access all the recent postings.



I moved it off blogspot at a time when Google (the owner of blogspot) was having a severe bout of irrationality but they seem to have settled down since then so I am hoping that the move back can be permanent.

by JR (jonjayray@gmail.com) on March 12, 2010 07:19 AM

by Hal_10000

Yesterday, while the AE-35 was on the fritz, I went out to check my snail mail and found something most curious—a letter from the Census Bureau.  I figured I’d take it in, write down “we got three here” with one of my daughter’s crayons and send it back.  But it was not my census form.  It was, instead, a stupid letter telling me to expect my census form soon.

Dear Resident,

About one week from now, you will receive a 2010 Census form in the mail.  When you receive your form, please fill it out and mail it in promptly.

Your response is important.  Results from the 2010 Census will be used to help each community get its fair share of government funds for highways, schools, health facilities, and many other programs you and your neighbors need.  Without a complete, accurate census, your community may not receive its fair share.

Thank you in advance for your help.

Sincerely,

Robert M. Groves

Director, U.S. Census Bureau

Emphasis mine.

This little letter probably cost the Feds about $42 million.  That estimate is based on just postage, paper and labor.  But the government can’t wipe it’s ass for less than six grand, so I’ll assume that’s a lower limit.

To be honest, the cost doesn’t me.  $42 million is about what the government spends every five minutes.  Obamacare will probably spend ten times that much designing their logo.  The Census is already budgeted at ... holy shit ... $14 billion (three times the cost of the 2000 census) so complaining about the cost of this letter is like complaining about the font on the Stimulus Bill.

Moreover, the Bureau claims that these letters could save up to $500 million. The reason is that even a small increase in response rates will erase the need to send actual people out to chase up respondees, a process that is very expensive at government labor rates (they’re already hiring 750,000 people for it).  We all know how reliable the estimates are for government money-saving efforts, but this actually doesn’t seem too unreasonable to me.

So, no, I’m not bothered by the cost.  What got my boxers in a bunch was the phrase I’ve highlighted in bold.  I’m not happy with the Census Bureau telling us to fill out the form because it’s the only way to get out “fair share” of government lucre.  That is classic liberal redistributionist trope.

It’s also bullshit.  As we have seen with the stimulus and with the buying of healthcare reform, government money gets out doled based on politics, not need and certainly not the damned Census.  Did Louisiana get a $100 million payout in the healthcare bill because the filled out their Census forms?  No, they got it because Mary Landrieu sold her healthcare vote.  Are two-thirds of the stimulus jobs going to public education because of the census? No, they’re going there because education is the province of the nation’s most powerful unions.

Now this is my first time filling out a census form.  I was living with my parents in 1990 and was a vagabond grad student in 2000.  Perhaps the letter has always said this.  But even if this is standard Census boilerplate, I don’t like it.  We should not be encouraging people to think of government as giant bag of money from which you get your “fair share”.

March 12, 2010 03:48 AM

Let's go crazy, Senate-style - Roll Call "Senate liberals dissed on health bill": "Senate Democratic leaders are concerned about the amount of mischief their own Members could create if or when a health care reconciliation bill comes up for debate." Public option, Medicare cuts, donut holes - it could be nuts!

by Eric (noreply@blogger.com) on March 12, 2010 01:58 AM

Virginia pushes back against HCR - It's largely symbolic move but a lopsided vote in the Virginia House of Delegates today stipulated that the federal government can't force Virginians to purchase health insurance. Thirty-four other states are planning similar legislation.Extra - Some interesting additional from Slate.

by Eric (noreply@blogger.com) on March 12, 2010 01:21 AM

by AlexinCT

Democrats ran and won in 2006, and then again in 2008, on the bad behavior of republicans. Republicans were successfully and correctly painted as having lost their fiscal sanity for the deficit spending prior to 2006, only to have democrats gain control of congress and the spending purse after the 2006 elections, and set new spending records they then blamed Bush for. The leftwing machine’s manipulations of the facts, with big-time help from a complicit media that didn’t point out democrats were always worse at that stuff anyway when in charge, allowed them to run on the lack of fiscal responsibility of the republicans in 2008 again, using the crisis of their own making that they then blamed on Bush yet again, to win big, only to then proceed to set new deficit spending records. Here is the graph for those of you that want to dispute the deficit spending facts, so spare us the bull:

As this projection showed Obama’s deficit spending in his first year ended up being more than all 8 years of Bush. Oh sure, as I already pointed out Obama is blaming Bush for having to do so. Democrats have successfully convinced so many that the financial crisis we are in isn’t tied to those idiotic collectivist economic lending practices they forced upon the market in the last 3 decades. Even worse, they successfully have covered up the rigged games Franks and Dodd set up with Fannie and Freddie to keep those faulty economic policies afloat, and how those trading scams then led to the implosion of the housing market and then the financial sector. But that “It’s Bush’s fault” excuse is wearing thin as people are slowly seeing the truth. Almost $2 trillion of the tax payer’s dollars has been funneled to democrats and their friends, through one collectivist economic scam or another promising salvation, but delivering nothing but a drastically growing government bureaucracy, while the private sector continues to bleed jobs and contract. And the WH remains focused on tacking on trillions more in new taxes and debt so they can give government control of healthcare moneys and decisions, with a scam which purports to reign in costs and be fiscally responsible by of all things taxing us for 10 years to provide 5 or 6 years of coverage, while ignoring the economic disaster they are leaving in their wake. And the one thing they should be addressing, the lack of jobs, gets nothing but some meaningless political play. In the mean time the hole is growing deeper and the spending of money we simply don’t have continues to rise. This year is looking like it will set even higher and wasteful deficit spending records as this February’s $220.9 billion single month record is showing. This seems to be our economic future thanks to the democrats and their economics. But the fact that democrats are destroying our economy, and are trying hard to destroy healthcare, is not the thing I want to address here. I want to talk a bit about one of the other lies they told to get themselves elected.

If you have been following the whole Eric Massa fiasco, you know this stuff has turned into a soap opera writ large. Frankly I do not know if Massa is telling the truth. He is a democrat after all, and lying is second nature for them. However, I do not put it past this WH to do what Massa has accused them of doing either. Based on what I have seen them do in just this first year, I have no doubt that this bunch is probably the most corrupt crew I have ever seen. We are dealing with Chicago politics here, and this – hope & change! - is SOP for these people. My bet is that since Obama wants this monster passed, his team is going to make it happen. Even if they have to do what Massa has accused them of. In fact I do not put it past them to resort to openly committing felonies to do so considering the vested interest they have in making this the law of the lad. After all, they control the levers of power and the press, so whose gonna be able to do anything about anything bad they do? If the stuff that has been going on so far hasn’t made the case yet, I doubt anything they do will.

And that brings me to my point about this whole Massa thing. If you don’t remember Nancy promising to drain the republican swamp and end the culture of corruption back in 2006, here is just one of the instances the sympathetic press gave her words play. Unfortunately, as case after case proves – Chris Dodd, Barney Franks, Charley Rangel, and a plethora of others – Nancy lied, and the corruption and criminal behavior, like the deficit spending and the fiscal irresponsibility I talked about before, is also setting new records. Don’t take my word for it. The case with Massa is more of the same. Even more important is the fact that while Pelosi is now claiming ignorance that’s a blatant lie because Nancy knew months ago about Massa’s behavior. And while Nancy is playing dumb, just a little research would have made it all obvious from records going back to Massa’s NAVY days showing that Massa was a time bomb waiting to explode.

As is the case in all these other stories of corruption that the MSM is ignoring or down playing, we are being lied to by these democrats that want to pretend real criminal activity and serious ethics violations, stuff that makes what happens when the republicans were in charge look tame, isn’t their modus operandi. And keep in mind that it is this scandal driven congress which is ignoring the will of the people and pushing forward with an unpopular government takeover of healthcare. Why isn’t the MSM up in arms about all this corruption and the will of the people being ignored? I guess that’s more of that hope and change for you.

March 12, 2010 12:59 AM

by Hal_10000

I’ve not posted much of the reconciliation issue and whether Congress will use reconciliation to bypass the filibuster on healthcare reform.  I’m not overly fond of fillibusters, but this seems like a sneaky way to get an unpopular bill through.  I’m fully aware of the political games going on.  The GOP wants a victory over the Democrats.  The Democrats want a bill passed, no matter what’s in it.  And if the roles were reversed, I’m sure the Republicans would be screaming about the minority “thwarting the will of the people” and the Democrats would be sobbing about our “sacred Senate traditions”.  To me, the most important fight right now is in the House.  If Pelosi can’t even muster a majority—and it’s iffy—this thing is deader than Michael Jackson.

Still, it’s nice to have some facts on the subject. And for all the Democrat screeching about how Republicans have used reconciliation “all the time”, the facts belie this claim:

Almost every act passed under reconciliation (8/15) has in fact been a budget bill.  And most of those that weren’t (5/7) were tax bills.  The two outliers:  The 1996 welfare reform act and the 2007 student aid package.  Why those were passed under reconciliation isn’t made clear.

What’s also interesting is that the vast majority of these bills were absolute slam dunks.  Most (8/15) were passed by filibuster-proof supermajorities, meaning that reconciliation wasn’t used as an end-around to avoid a cloture vote.

There are only seven times in the last thirty years that reconciliation has been used to bypass the supermajority requirement and all seven were budget bills.  Those bills were:

(1) Ronald Reagan’s 1982 budget, which raised taxes and cut Medicare spending.

(2) George Bush’s 1990 budget, which raised taxes and cut spending.

(3) Bill Clinton’s 1993 budget, which raised taxes and cut spending (passed on Gore’s tie-breaker).

(4) George Bush’s 2001 tax cut (which was supported 58-33).

(5) George Bush’s 2003 tax cut.

(6) George Bush’s 2005 spending cut bill.

(7) George Bush’s 2005 tax cut.

The Lefties are mad because reconciliation was used to pass tax cuts they didn’t like.  And maybe ... perhaps ... they have a point on that.  But Bush did not use reconciliation to pass Medicare Part D or to start the Iraq War or to reform Social Security or pass the Patriot Act or anything else.  They have been crowing that welfare reform was passed by reconciliation.  But welfare reform was supported 78-21 in the Senate and 328-101 in the House.  It could easily have gotten cloture.  The most likely reason reconciliation was used was to fix the Medicaid budget adjustments and get a bill through that Clinton wouldn’t veto.

March 11, 2010 09:54 PM

The Senate Parliamentarian just nixed Obamacare. Ruled that law must exist before it can be fixed in reconciliation. The 'Slaughter solution is a no-go.

by Eric (noreply@blogger.com) on March 11, 2010 09:14 PM

By Michael Reagan -- Today, Washington is so focused on expanding the size and influence of our federal government at the expense of taxpayers that they are overlooking one of the greatest security risks facing our nation -- our failing education system.

March 11, 2010 02:17 PM

By Michelle Malkin -- Have you noticed something about the audiences that President Obama has cherry-picked to cheer his government health care takeover roadshow? They're getting younger and younger. On Wednesday, Obama brings the traveling campaign to St. Charles High School in St. Louis, Mo., for a closed-door, invitation-only speech. If he doesn't end the endless "No More Time For Talk" talks soon, he'll be peddling Democratic reconciliation tactics on "Dora the Explorer" and "SpongeBob SquarePants."

March 11, 2010 02:17 PM

By Michael Barone -- There's a lively debate going on in the blogosphere and the press about whether Democrats would be better off passing or not passing a health care bill. Some liberals claim that Democrats would be better off passing a bill, any bill, even if it's unpopular with the general electorate. The idea is to energize the Democratic base, currently demoralized by the prospects of failure. Current polls show Democrats far less enthusiastic and far less likely to vote -- passing a law might change that.

March 11, 2010 02:17 PM

By Harris R. Sherline -- Watching the latest T.V. promotions about some of the programs that seem to be among the most popular fare, I find myself wondering just how inane and shallow our society has become. For example, "The Bachelor" has been celebrating the final choice of this season's hero and his courtship of some 25 women, all salivating to become his bride.

March 11, 2010 02:17 PM

By Debra Saunders -- It took me five months to get my first interview with former eBay CEO and California GOP gubernatorial hopeful Meg Whitman, and when I did, it was after a press event where the news reporters were not allowed to ask questions. Swell.

March 11, 2010 02:17 PM

WASHINGTON (AP) - A year ago, President Barack Obama boldly, unequivocally demanded that Israel stop building settlements on the West Bank and east Jerusalem. Today he's left with little choice but to swallow a stinging and very public rebuke from America's closest Mideast ally.

March 11, 2010 02:13 PM

A U.S. MILITARY BASE IN SOUTHWEST ASIA (AP) - U.S. Defense Secretary Robert Gates said Thursday he regrets that a major defense contractor has pulled out of the contest to build a badly needed new Air Force plane.

March 11, 2010 02:13 PM

ST. CHARLES, Mo. (AP) - Democrats claimed momentum Wednesday in their drive to enact the sweeping health care legislation sought by President Barack Obama, citing near agreement on crucial issues despite persistent Republican efforts to knock them off stride.

March 11, 2010 02:13 PM

WASHINGTON (AP) - On Christmas Day, a passenger on a Northwest Airlines flight bound for Detroit tried to blow up the plane with plastic explosives in his underwear. He failed, yet the very attempt shook the U.S. government, set federal agencies against each other and triggered months of political second-guessing.

March 11, 2010 02:13 PM

KANSAS CITY, Mo. (AP) - The Kansas City school board narrowly approved a plan Wednesday night to close nearly half the district's schools in a desperate bid to avoid a potential bankruptcy.

March 11, 2010 02:13 PM

WASHINGTON (AP) - The Federal Reserve, still dusting itself off from a fight that threatened to trim its powers, could emerge from a congressional overhaul of banking rules as the top cop over the nation's largest financial institutions.

March 11, 2010 02:13 PM

WASHINGTON (AP) -- The House Democratic campaign chief said Wednesday the ethics committee has ended an investigation of former Rep. Eric Massa, but the freshman's alleged harassment of his staff members -- with possible sexual overtones -- could spell continuing trouble for the party.

March 11, 2010 02:13 PM

WASHINGTON (AP) - House GOP leaders are pushing rank-and-file Republicans to break their addiction to pet projects by going cold turkey and giving up the long-cherished practice of directing federal dollars to their home districts.

March 11, 2010 02:13 PM

DETROIT (AP) -- A former Detroit city councilwoman was sentenced to more than three years in prison Wednesday for bribery after a federal judge refused to set aside her guilty plea during a stormy court hearing dominated by a dispute over evidence of other payoffs.

March 11, 2010 02:13 PM

By Tony Blankley -- The publishing of the Declaration of Independence 233 years ago by our Founders was responded to in London by two of the 18th century's greatest minds: Dr. Samuel Johnson (after whom a literary age was named) and Edmund Burke (the intellectual father of modern Anglo-American conservatism).

March 11, 2010 02:05 PM

by HARLEY

Remember my little spastic post about the IRS getting new shotguns?

Well now it seems that the Department of Education has decided it needs 27 more Remington 870s’.

And before y ou ask what does the Depeatment of Fucking education needs with combat shotguns, read the requirements part of the solicitation.

LOP are designated as the only shotguns authorized for ED based on compatibility with ED existing shotgun inventory, certified armor and combat training and protocol, maintenance, and parts.

The required date of delivery is March 22, 2010.

Existing Shotgun inventory.

Certified armor

Combat training

WTF, i know some of the inner city schools are bad, but just WTF, do they need their own SWAT teams for?

I thought the purpose of the department of Education was to, you know educate?

March 11, 2010 10:44 AM

Some stray thoughts on Vorwärts! Vorwärts! (The song of the Hitler Youth)



While I have the work I did on the subject a couple of days ago still in mind: I see that British critics of the HJ (Hitler Jugend; Hitler Youth) during the war described it as "education for death". And there have been academic articles that identify Fascism/Nazism as a death cult too. And if you look at the last line of the first verse of Vorwärts! Vorwärts! (below) you can see why. HJ members were encouraged to give up their lives for Hitler if need be.



But is it really fair to condemn that? Consider two other well-known statements: "Greater love hath no man than this, that a man lay down his life for his friends" (John 15:13). Is Christianity a death cult? Early Christians certain did often lay down their lives for their faith.



And what about: "Ask not what your country can do for you - ask what you can do for your country"? (Originally said by Pericles and recycled by JFK in his first inaugural). Was JFK inaugurating a death cult?



Neither quote is an exact analogue of what the HJ asked of its members but throughout history it has normally been seen as heroism to give up one's life for others and I personally see the sadly misled young members of the HJ as walking in that tradition. The only pity is that their dedication was so badly abused.



They in fact thought that they were fighting for Freiheit und Brot (freedom and bread). We forget in our age of affluence that an abundance of food for all is a quite recent achievement. Hunger was just around the corner for most people throughout history. And Hitler did promise to banish that danger via his policy of Lebensraum. And hunger is an urgent need so fighting for "bread" was a much more important goal in the time of the HJ than it is today. Hence its prominence in their song.



But perhaps the most interesting bit in Vorwärts! Vorwärts! is that the HJ also thought they were fighting for "freedom". Freedom from what? Basically, freedom from Jewish oppressors, I think. It was a fantasy of course but one that was widely believed at the time. The prominence of Jews in all walks of life in prewar Germany certainly helped foster that illusion.



And the flag of the HJ heralded "the new time". I can remember the days in the 50's, 60s and even 70s when "new" was a Leftist catchword. The "new" theatre or the "new" school would be understood by politically aware people as being on the far Left. So, as far Leftists, the Nazis presented themselves that way too. That tyranny and collectivism are as old as the hills was somehow ignored. But for a long time people did think -- or hope -- that Fascism and Communism were something new, improved and positive. I think it was the obviously sclerotic state of the old Soviet union that eventually caused the Left to abandon their propaganda about being "new". Though I suppose that "hopey change" is just a variation on it.

Uns're Fahne flattert uns voran. Our flag flutters before us

In die Zukunft ziehen wir Mann für Mann We trek into the future as man for man

Wir marschieren für Hitler We march for Hitler

Durch Nacht und durch Not Through night and hardship

Mit der Fahne der Jugend With the flag of youth

Für Freiheit und Brot. For freedom and bread

Uns're Fahne flattert uns voran, Our flag flutters before us

Uns're Fahne ist die neue Zeit. Our flag is the new time

Und die Fahne führt uns in die Ewigkeit! And the flag leads us into eternity

Ja die Fahne ist mehr als der Tod! Yes the flag is more to us than death

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Systems of government







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Iraq's new birth of freedom



RONALD REAGAN liked to say that there was no limit to what a man could accomplish if he didn't mind who gets the credit. The transformation of Iraq from a hellish tyranny into a functioning democracy will be recorded as a signal accomplishment of George W. Bush's presidency, and he probably doesn't mind in the least that the Obama administration would like to take the credit.



This week's parliamentary elections in Iraq brought 12 million voters to the polls -- a remarkable 62 percent turnout, notwithstanding a vicious wave of Election Day bombings that killed 38 people and destroyed several buildings in Baghdad.



"Iraqis are not afraid of bombs anymore," a middle-aged voter named Maliq Bedawi told a New York Times reporter as they stood amid the rubble of a Baghdad apartment building destroyed by a Katyusha rocket. If anything, the jihadists' violence succeeded only in intensifying the refusal of ordinary Iraqis to be intimidated. "Everyone went" to vote, Bedawi said. "Even people who didn't want to vote before, they went after this rocket."



Iraqis have paid a steep price for their burgeoning young democracy: Tens of thousands of lives were wiped out in the horrific insurgency that followed the ouster of Saddam Hussein. Perhaps that awful butcher's bill explains the fervor with which Iraqis have embraced democratic self-governance. In Sunday's elections, 6,200 candidates representing 86 political parties contended to fill 325 seats in parliament. (Would that our own congressional elections were so competitive.) Such democratic passion would be impressive anywhere. To see it flourish in one of the world's most dangerous and undemocratic neighborhood is downright heroic.



Of such heroism, a new Iraq is being fashioned -- the Iraq Bush foretold in an address to the National Endowment for Democracy in November 2003, when he declared that "Iraqi democracy will succeed" and predicted that "the establishment of a free Iraq at the heart of the Middle East will be a watershed event in the global democratic revolution." Six years later -- six years in which Iraq was convulsed by the bloody agony of sectarian terror, and in which 4,000 US military personnel were killed -- that prophecy is coming to pass.



"Something that looks mighty like democracy is emerging in Iraq," acknowledges Newsweek in a recent issue. "And . . . it most certainly is a watershed event that could come to represent a whole new era in the history of the massively undemocratic Middle East." On the magazine's cover are the words "Victory At Last," and a photograph of Bush aboard the USS Abraham Lincoln, where in May 2003 he appeared before a backdrop reading "Mission Accomplished" to proclaim that "major combat operations in Iraq have ended."



In 2006 and 2007, few Americans expected to ever see such a magazine cover. Over and over they were told that the war in Iraq was lost, that there was no military solution to the carnage there, and that invading Iraq had been the biggest mistake in US history. Bush's decision in January 2007 to change strategy and "surge" an additional 20,000 additional troops into Iraq was scathingly denounced. Such a "fantasy-based escalation of the war," wrote The Washington Post's Eugene Robinson, "could only make sense in some parallel universe where pigs fly and fish commute on bicycles." Senator John Kerry called the surge "a senseless decision." Barack Obama, gearing up to run for president, warned that doubling down in Iraq was not "going to solve the sectarian violence there. In fact, I think it will do the reverse."



But the critics were wrong. The surge turned the war around, giving Iraq a new lease on life. Where Saddam once ruled a ghastly "republic of fear," Iraqis live today in democratic freedom and relative peace, dispelling daily the canard that democracy and Arab culture cannot co-exist.



Of course there are no permanent guarantees, and it remains to be seen whether Iraq's nascent democracy can sustain itself. For now, though, the news is very good. So good that even Vice President Joe Biden -- who a few years ago was calling for Iraq to be partitioned, and who blasted Bush's surge as "a tragic mistake" and "not a solution" -- now takes credit for Iraq's rebirth. "I am very optimistic about Iraq," Biden recently told CNN's Larry King. "I mean, this could be one of the great achievements of this administration."



Somewhere, Ronald Reagan must be chuckling.



SOURCE



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Obama's corrupt Justice Dept. not getting a free ride



Give credit for honorable persistence to Northern Virginia's veteran Republican congressman, Frank Wolf, and to Texas Republican Rep. Lamar Smith. For good reason, they refuse to let the Justice Department bury questions about a voter-intimidation case against the New Black Panther Party.



The case involves two Black Panthers who stood outside a Philadelphia polling place in November 2008 while wearing paramilitary garb and using racial epithets, while one of them brandished a nightstick. The Obama Justice Department dropped three out of four charges in the case last May after the cases, in effect, had already been won.



At every turn, the Justice Department has stonewalled the two lawmakers and others wanting an explanation for the dismissal. Since September, the department's Office of Professional Responsibility (OPR) supposedly has been conducting an investigation into why the charges were dropped. To outside observers, that "investigation" has seemed lethargic at best. Meanwhile, OPR chief Mary Patrice Brown reportedly is on the verge of an Obama nomination for a federal judgeship, for which she is being vetted by some of the same people who presumably would be questioned in the Black Panther probe.



OPR also came under fire two weeks ago when the department's senior career officer, David Margolis, overruled the office and criticized its shoddy work on its review of the conduct of two George W. Bush-era lawyers who wrote memos on enhanced interrogation of suspected terrorists.



In light of OPR's own apparent or potential politicization, Mr. Wolf asked the Justice Department's inspector general, Glenn A. Fine, to conduct his own inquiry into the mishandling of the Black Panther case. In early February, Mr. Fine declined, saying such an investigation is out of the scope of his responsibilities - although, he added, he had long told Congress that such questions should indeed be within his purview.



Enter Mr. Wolf again, this time joined by Mr. Smith. On March 2, they sent another letter to Mr. Fine, urging the IG to reconsider because of "the host of troubling questions about whether the Department's political appointees abused their power in this case for political purposes." They listed at least five major questions they think the IG, not OPR, can best answer, including "whether White House officials attempted for partisan political purposes to influence the [Black Panther] case [and] whether senior Department management officials and political appointees actually colluded for these purposes with White House officials to derail the [Black Panther] case or cases against minority defendants in general." They wrote that those "larger issues in this affair, whether for the pursuit of impartial justice, the pursuit of criminal justice for government officials or the credibility of the Department, lie within your jurisdiction, not OPR's."



This point is important. At some level, there needs to be some independent authority, untainted by political entanglements, who can investigate allegations of improper political entanglements. The congressmen note that Mr. Fine and OPR conducted simultaneous and complementary investigations into the firing of eight U.S. attorneys by the Bush administration when some of the same considerations applied.



One way or another, the truth will get out. It doesn't take Inspector Clouseau to figure out that if the Justice Department has the image of springing Panthers from the penalty box, it looks mighty suspicious.



SOURCE



***********************



ELSEWHERE



Stimulus Dollars Buy Buses for Greyhound in Missouri: "I’m thinking about taking a ride on the commercial bus line soon. Why? Because, as a taxpayer, I’m paying for it. I came across this news after reading a release on the White House web site that listed the Missouri Department of Transportation as the recipient of $4.9 million in American Recovery and Reinvestment Act (a.k.a., “stimulus”) funds for use in “construction of two facilities and purchase of two intercity vehicles.”... The MoDOT spokesperson confirmed that, in order to meet the federal mandate that 15 percent of ARRA funds provided to states be spent on intercity bus transportation, the State of Missouri will use $945,210 of federal taxpayer monies to reimburse Greyhound Bus Lines for the addition of two new buses to the company’s fleet. In other words, Greyhound is getting a federal subsidy and the Show-Me State is acting as a laundromat of sorts."



Tolerating the intolerable: "What is a democracy without fair elections? Not a democracy, wouldn't you say? So why does America, the granddaddy of democracies, tolerate election systems that aren't free of fraud? OK, how rare is it? Can anyone put a number on it and tell us how much voter fraud is happening? Is voter fraud so rare in America that it can't affect an election? In a contest not finalized until nearly 8 months after Election Day, Democrat Al Franken won Minnesota's 2008 race for U.S. Senate by 312 votes. Out of the 2.9 million votes cast, that's a winning margin of just over .01%, or .0001075 of the total. Those 312 "votes" gave Democrats a filibuster-proof 60-seat Senate majority, allowing them to enact legislation that could forever change America. With so much being decided by such a small margin, shouldn't we be more concerned about fraud, regardless of whether it's committed by voters or vote counters? Vote counters weighed heavily in the Coleman-Franken election. Matthew Vadum alleges: "The election was stolen at the precinct level, during the recount, and during the post-election litigation."



Poll: U.S. has lost global standing under Obama: "A majority of Americans say the United States is less respected in the world than two years ago and believe President Obama and other Democrats fall short of Republicans on the issue of national security, according to a poll by two left-leaning groups. The Democracy Corps-Third Way survey released Monday finds that by a 10-point margin — 51 percent to 41 percent — Americans think the standing of the United States has dropped during the first 13 months of Mr. Obama's presidency. The Democratic Party also plummeted on national security. A May survey by the pollsters found that the public saw the Democratic and Republican parties as equally able to handle national security (41 percent trusted Democrats more and 43 percent trusted Republicans more). On conducting the war on terrorism, the two parties were tied at 41 percent. But the latest poll shows a massive gap, with Democrats trailing by 17 points, 33 percent to 50 percent, on which party likely voters think would do a better job on national security."



Obama and the l-word: "Here’s how predictable the president’s slippery relationship with the truth has become: Hours before the State of the Union address, Washington Examiner reporter Timothy P. Carney posted a ‘pre-emptive fact check’ that, among other things, prebutted any presidential claim to have ’stopped the revolving door between government and corporate lobbying.’ As it happened, that night Barack Obama made an even bolder (read: less truthful) claim: that ‘we’ve excluded lobbyists from policymaking jobs.’ In fact, more than 40 former lobbyists work in the administration, including such policy makers as Deputy Defense Secretary William J. Lynn (who was lobbying for Raytheon as recently as 2008), Office of the First Lady Director of Policy and Projects Jocelyn Frye (National Partnership for Women and Families), White House Director of Intergovernmental Affairs Cecilia Munoz (National Council of La Raza), and Treasury Secretary Chief of Staff Mark Patterson (Goldman Sachs).”



The taxing-the-rich delusion: "Those who like to propose novel taxes usually propose that they should be levied on rich people and corporations, and one of their standard assumptions is that rich people and corporations will actually pay them. In their hypothetical world the banker or businessman says, ‘Oh dear. There’s a new tax. Darn it, I’m just going to have to be poorer.’ The same banker or businessman then hands over the cash to government and accepts the loss stoically. In the real world, of course, they work out ways of avoiding the tax if possible, or of making sure that someone else pays it if not.”



My Twitter.com identity: jonjayray. My Facebook page is also accessible as jonjayray (In full: http://www.facebook.com/jonjayray). For more blog postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)



****************************



The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)



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by JR (jonjayray@gmail.com) on March 11, 2010 08:34 AM

An interesting email from Jay Watts (lots_a_watts@yahoo.com) about some strange documents



Please read the following disclaimer: "This book is a product of it's time and does not reflect the same values as it would if it were written today. Parents might wish to discuss with their children how views on race, gender, sexuality, ethnicity, and interpersonal relations have changed since this book was written before allowing them to read this classic work."



Now this sounds like you are getting ready to read something fairly bad, and pretty racy - does it not? This is printed on the copyright page of a pamphlet I just received from Amazon.com.



The Title - Are You Ready!



"The Constitution, The Declaration of Independence, and The Articles of Confederacy"



I Kid You Not!



This is a link to the pamphlet at Amazon.com so you may see the actual pamphlet and look inside to see the copyright page for yourself. (Click "copyright" at the side)



You should know that there is not one line of commentary, definitions of meaning or anything thing else in this pamphlet. Just the full text of the Documents responsible for the creation of the Greatest Country on this Planet. Now what in these documents could possibly warrant a disclaimer like what I included above, and how in the world does it not fit the values of today? I have read these documents many times in my life and I can tell you there is not one item or statement that comes remotely close. This is purely "Political Correctness" run-amok.



People we must stand up against this stuff. Please People: Other than the Bible, these are the most Sacred Documents of our lands. Treatment of this kind, of these documents Must Not be Allowed.



************************



The Clarity of False Choices



"There are those who claim we have to choose between paying down our deficits…and investing in job creation and economic growth," President Obama said in December. "This is a false choice." During the same speech, he asked his audience to "let me just be clear" that, having racked up the biggest budget deficits ever, he is embracing fiscal responsibility, as reflected in his vow that "health insurance reform" will not increase the deficit "by one dime."



For connoisseurs of Obama-speak, the address featured a trifecta, combining three of his favorite rhetorical tropes: the vague reference to "those who" question his agenda, the "false choice" they use to deceive the public, and the determination to "be clear" and forthright, in contrast with those dishonest naysayers. These devices are useful as signals that the president is about to mislead us.



Obama says his opponents wrongly insist that we choose between "paying down our deficits" and "investing in job creation and economic growth." But that is not the way his real critics, as opposed to the imaginary, nameless ones who appear in his speeches, would frame the issue.



The real critics question the premise that the spending Obama supports, which he says ultimately will boost tax revenues and curtail outlays for public assistance programs, should be considered an investment at all—and, if so, whether it is a better use of this money than the market would have found. Copying his predecessor by throwing more money at schools, for example, is a dubious strategy for spurring economic growth, or even educational growth, since there is no clear relationship between spending and student achievement.



Likewise, Obama's promise that health insurance subsidies will not expand the deficit may be "clear," but it's not realistic, since it's based on accounting tricks and wishful thinking. Legislators avoided counting a $240 billion Medicare "fix" by putting it in a separate bill and assumed reimbursement cuts that probably will never materialize.



Here are some other things Obama has asked us to let him be clear about: "Earmarks have given legislators the opportunity to direct federal money to worthy projects"; the U.S. government "has no interest in running GM"; Medicare cuts will be made "in a way that protects our senior citizens" from changes in benefits or costs; and a "public option" for health care, which would invite businesses to offload their medical costs onto taxpayers and could drive private insurers from the market, "would not impact those of you who already have insurance." From now on, when you hear Obama speak, replace "let me be clear" with "let me lie to you" and see if it makes more sense.



Speaking of making sense, some of the "false choices" Obama has identified in the last year are more puzzling than misleading. "I reject the false choice between securing this nation and wasting billions of taxpayer dollars," he declared in March. So according to Obama, we can secure this nation and waste billions of taxpayer dollars. Actually, that sounds about right.



Obama's depiction of his critics is further removed from reality. In the health care debate, he says, "there are those who simply don't believe Washington can bring about this change"; "there are those who will say that we do not go far enough"; "there are those who would have us try what has already failed, who would defend the status quo"; "there are those who will oppose reform no matter what"; and "there are those who want to seek political advantage."



What about those who do not like the status quo but have a different vision of reform, not because they want to go farther than Obama does but because they want to go in a different direction, toward more choice and less government involvement? In Obama's world they do not exist. Instead we have his bold yet achievable plan, pitted against socialist utopianism and blind partisan intransigence. Let me be clear: This is a false choice.



SOURCE



************************



Radicalizing Civil Rights



In his State of the Union address, President Obama mentioned the protections enshrined in the Constitution and said, “No matter who you are or what you look like, if you abide by the law, you should be protected by it.” Obama followed this lofty rhetoric with a claim that his Justice Department “has a Civil Rights Division that is once again prosecuting civil-rights violations and employment discrimination.”



As anyone familiar with the Division’s workings can tell you, this assertion is patently false. Obama’s Civil Rights Division will prosecute cases only depending on “what you look like.” If you are white and you are discriminated against in your job, at the polls, or in seeking equal access to federally funded institutions, the Division won’t lift a finger to make sure you’re “protected.”



Over the last year, I have written many articles about the politicization and outright misconduct of the Civil Rights Division under the Obama administration. I have pointed out the Division’s politically motivated dismissal of a voter-intimidation case against the New Black Panther Party, its highly dubious objection to the state of Georgia’s verifying the citizenship of newly registered voters, and its almost comedic effort to prevent the small town of Kinston, N.C., from changing its partisan town-council elections to nonpartisan because it might hurt Democratic candidates.



If you want to understand how the Civil Rights Division is being run in the Obama administration, imagine for just a moment what would happen if the most radical, ideologically left-wing advocacy organizations in Washington took control of it. Because that’s exactly what happened.



Much more HERE



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ACLU Prints Lies in the Times



The ACLU is trying to push President Obama to maintain the decision that he (not Attorney General Holder) made to try the 9/11 defendants in ordinary criminal court in New York City. Its method is a full-page ad printed in the New York Times. The ad contains several major statements which can best be described as deliberate lies.



Some of the facts for this article, but none of the legal conclusions, come from an ad that the ACLU published in the New York Times on 7 March, 2010. The point of the ad is that President Obama is morphing into President Bush because he is reconsidering Attorney General Holder's alleged decision to try the KSM 9/11 planners, in an ordinary criminal court, in New York City.



The ad says that Obama is "considering reversing his attorney general's decision." The ACLU does not explain what authority any Attorney General has over the American military. He has none. This is Obama's decision which he is now thinking of reversing.



The ad says that Obama can "keep us safe without violating the Constitution." The ACLU has apparently not read the leading Supreme Court decision on trials for terrorists seeking to blow up buildings and kill Americans. The case was Ex Parte Quirin, 1942, concerning eight German saboteurs who sneaked into the US from two German submarines. All eight were convicted in a military tribunal including the one who said he was American since he was born in Chicago. The Court held, unanimously, that this process was constitutional.



The ACLU is chock full of lawyers. Presumably, most of them can read. One must conclude therefore that the ACLU is deliberately lying to the American people by publishing this ad which ignores the operative law.



The ad continues that Obama should "keep his promise to restore our Constitution and due process." This statement contains another lie. As the Supreme Court clearly explains in the Quirin case, due process concerning the Law of War is met by a military tribunals which convicted and executed Colonel Nathan Hale (the American spy) and Major John Andre (the British spy). This article has labeled those two men who were convicted and executed as illegal combatants, for the benefit of the ACLU whose ignorance apparently extends to the history of the American Revolution.



SOURCE



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Who Poses the Greater Threat?



Bill Gates is the world’s richest person, but what kind of power does he have over you? Can he force your kid to go to a school you do not want him to attend? Can he deny you the right to braid hair in your home for a living? It turns out that a local politician, who might deny us the right to earn a living and dictates which school our kid attends, has far greater power over our lives than any rich person. Rich people can gain power over us, but to do so, they must get permission from our elected representatives at the federal, state or local levels. For example, I might wish to purchase sugar from a Caribbean producer, but America’s sugar lobby pays congressmen hundreds of thousands of dollars in campaign contributions to impose sugar import tariffs and quotas, forcing me and every other American to purchase their more expensive sugar.



Politicians love pitting us against the rich. All by themselves, the rich have absolutely no power over us. To rip us off, they need the might of Congress to rig the economic game. It’s a slick political sleight-of-hand where politicians and their allies amongst the intellectuals, talking heads and the news media get us caught up in the politics of envy as part of their agenda for greater control over our lives.



The sugar lobby is just one example among thousands. Just ask yourself: Who were the major recipients of the billions of taxpayer bailout dollars, the so-called Troubled Asset Relief Program (TARP)? The top recipients of TARP handouts included companies such as Citibank, AIG, Goldman Sachs and General Motors. Their top management are paid tens of millions dollars to run companies that were on the verge of bankruptcy, were it not for billions of dollars in taxpayer money. Politicians preach the politics of envy whilst reaching into the ordinary man’s pockets, through the IRS, and handing it over to their favorite rich people and others who make large contributions to their election efforts.



The bottom line is that it is politicians first and their supporters amongst intellectuals who pose the greatest threat to liberty.



Dr. Thomas Sowell amply demonstrates this in his brand-new book, “Intellectuals and Society,” in which he points out that: “Scarcely a mass-murdering dictator of the twentieth century was without his intellectual supporters, not simply in his own country, but also in foreign democracies … Lenin, Stalin, Mao and Hitler all had their admirers, defenders and apologists among the intelligentsia in Western democratic nations, despite the fact that these dictators each ended up killing people of their own country on a scale unprecedented even by despotic regimes that preceded them.”



While American politicians and intellectuals have not reached the depths of tyrants such as Lenin, Stalin, Mao and Hitler, they share a common vision. Tyrants denounce free markets and voluntary exchange. They are the chief supporters of reduced private property rights, reduced rights to profits, and they are anti-competition and pro-monopoly. They are pro-control and coercion, by the state. These Americans who run Washington, and their intellectual supporters, believe they have superior wisdom and greater intelligence than the masses. They believe they have been ordained to forcibly impose that wisdom on the rest of us. Like any other tyrant, they have what they consider good reasons for restricting the freedom of others. A tyrant’s primary agenda calls for the elimination or attenuation of the market. Why? Markets imply voluntary exchange and tyrants do not trust that people behaving voluntarily will do what the tyrant thinks they should do. Therefore, they seek to replace the market with economic planning and regulation, which is little more than the forcible superseding of other people’s plans by the powerful elite.



We Americans have forgotten founder Thomas Paine’s warning that “Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.”



SOURCE



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BrookesNews Update



The state of the US economy is worse than it looks : Many are looking to the expansion of factory production and the rise in GDP as evidence of economic recovery, proving once again how ignorant of economic history the great majority of pundits and journalists really are.

Why capital gains taxes undermine economic growth : The Democrats are going to raise capital gains taxes significantly because Obama says that would be only fair. But what is fair about attacking economic growth, which amounts to an attack on future living standards?

Why 'saving' energy raises the demand for more energy : We have seemingly reached the absurd situation that someone who has spent four years at university studying economics can leave with a first class honours without a grasp of sound economic reasoning

There is no business cycle : The current economic situation has got members of the commentariat nattering about Australia's business cycle, Reserve policies, government borrowing, consumer spending, etc. Far be it from me to contradict our economic Solons but there is no business cycle

Cuban dissident murdered by Castro's thugs: On February 23 black human rights activist Orlando Zapata-Tamayo died after an 83-day hunger strike and a series of savage beatings by Castro's thugs. There were no headlines in the Western press nor were there any protests. Hollywood's Castro lovers like Oliver Stone and Chevy Chase and Sean Penn remained silent. As is always the case with the left, it is never the crime that matters but who commits it

Is Obama trying to bankrupt America? : Is Obama trying to bankrupt America? One short year ago, asking this this question would have guaranteed my inclusion among the ranks of right-wing nuts and/or conspiracy theorists. Today, it is a serious question being asked by a number of commentators

Scolding and the Biblical Law : Even committed Zionists have become indifferent and cynical due to the self-destructive policies and inaction of successive Israel governments. There is an atmosphere of despair among many staunch Zionists and supporters of the state of Israel



My Twitter.com identity: jonjayray. My Facebook page is also accessible as jonjayray (In full: http://www.facebook.com/jonjayray). For more blog postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena



List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here (Academic) or here (Pictorial) or here (Personal)



****************************



The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)



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by JR (jonjayray@gmail.com) on March 11, 2010 08:32 AM

Political Correctness Watch



My "Political Correctness Watch" site has been a bit slow in coming up for a couple of days but the mirror sites have all the latest and should come up promptly. See here or here

by JR (jonjayray@gmail.com) on March 11, 2010 04:26 AM

by Hal_10000

I hate to chat about celebrity stupidity in this space.  But God-damn it do they make it easy sometimes.  Here is Sean Penn, on Bill Maher’s show, defending Hugo Chavez.

PENN: The collaborative opportunity in Haiti, when you talk about Hugo Chavez, and some of the other people who are demonized [think Castro], and you know, when some of these countries accuse us of an occupation—where I believe this was strictly a humanitarian action by the United States military, and an incredible one – I’m a little sympathetic. Because every day, this elected leader [Chavez] is called a dictator here, and we just accept it! And accept it. And this is mainstream media, who should – truly, there should be a bar by which one goes to prison for these kinds of lies.

There’s Sean, calling for journalists to be imprisoned for calling Chavez what he is.  I can see the logic.  Chavez is already well on the way to doing that in his own country.  But we have that pesky First Amendment here and all that.

(And to address this election business: It’s true that the OAS and Jimmy Carter’s group have claimed that the Venezuelan elections were on the level.  On the other hand, Chavez has complete control of the economy and the media and has shut down TV stations and newspapers that criticize him, as I linked above.  Chavez’s loathsome rule is a perfect example of why “democracy” is not a synonym for “freedom” and why the latter is more important the former.)

Now to be perfectly fair, I think Penn is using hyperbole here.  He’s not actually suggesting that journalists be jailed.  And if that were all there was to this interview, I’d shrug it off.  But that’s just the tip of the stupid iceberg.  He also defends Chavez’s rule, claiming that Venezuelans now have access to dreams that only one in five Americans does.  Apparently, George W. Bush was controlling our dreams!  God damn it, why did he want me to keep having that dream where I have to take an exam in high school and haven’t shown up all quarter?  Bastard!

Anyway, I’ll let the Best Magazine on the Planet have its say on this:

As Penn says, the population of Venezuela now has “access to dreams” they never had in the past (could Penn even name the previous president of Venezuela?); a funny little formulation that unconsciously acknowledges that after 10 years of chavismo, the poor are still amazingly poor, the rich are now in Miami, having been replaced by members of the Bolibourgeoise, and the economy is a mess. The poor may have aspirations, but, as Venezuelan economist Francisco Rodriguez discovered, they have seen no real material gains.

In short, Venezuelans can dream all they want about prosperity.  But, under Chavez, those dreams are no more likely to come true than my dreams about Lucy Pinder.  Equality is useless when it just means equal oppression.

And, of course, Penn’s latest outgassing gives me a chance to link to one of Lee’s best jabs at Penn watching an anti-American rally in Iran:

Check out the picture of this wormy fuck.  He’s crouching in that position so you can’t see the erection he got when he heard thousands of Muslims chanting “Death to America.”

Nothing changes, does it?  Penn was a wormy fuck five years ago when Lee wrote those words.  And he’s still a wormy fuck.  And long after we’ve all joined Lee in that Great Jack Daniels Distillery in the Sky (and Penn has gone to that Red Carpet Show Down Below), future generations will still think of him as a wormy fuck.

March 11, 2010 04:16 AM

Piling on deficits - Megan McArdle (and Greg Mankiw) makes an important point here: the unfunded liabilities of Medicare require less government health care spending over time, not more. "If the cost controls fail, we aren't just right back where we started: we're much, much worse off." In other words, deficit neutrality just keeps us running in place.

by Eric (noreply@blogger.com) on March 11, 2010 02:26 AM

Democracy, Democrat-styleVoting for stuff? That's sooooo old-school.Having determined that they lack the votes in the House to pass the Senate bills as-is, House Democrats are attempting one of the most breathtakingly unconstitutional power grabs ever witnessed - a maneuver to deem the Senate bill ALREADY PASSED by the House by rule, despite the fact that it clearly has not.Anything goes!

by Eric (noreply@blogger.com) on March 10, 2010 11:58 PM

by AlexinCT

As the left actively but falsely tries to discredit O’Keefe’s work in exposing ACORN’s criminal activities, of all things by attacking his choice of clothing or by creating the false illusion that his video editing distorted the facts, it bears to point out that ACORN has a long history of other criminal activity. Oh sure, the left will say that it’s always about voter registration and unimportant because nobody can “definitely prove” there was any actual voter fraud, or some such, but the latest case says otherwise:

Milwaukee police officers sat on their hands for months last year instead of investigating possible voter fraud cases from the 2008 general election. It’s an incredible claim, but it’s coming from a credible source: Assistant District Attorney Bruce Landgraf, the Milwaukee County prosecutor responsible for overseeing campaign and election issues. “Honestly, the Milwaukee Police Department largely ignored your double voter (and other) referrals received in January 2009 for the first six months of 2009,” Landgraf wrote in an e-mail to a city elections official on Jan. 26.

Speaking with unguarded candor, the veteran prosecutor said in his note that MPD’s tardy response had a major impact. The cases involve voters who may have cast more than one ballot, felons who may have voted illegally and other cases of possible election fraud. “Sadly, several probable cases of genuine voter fraud were harmed by that delay,” Landgraf wrote in an e-mail obtained through an open records request. The assistant district attorney was even more pessimistic about the investigation of more than 500 individuals who registered to vote on election day but whose addresses could not be confirmed later by postcard. “I do not expect them to ever get to the Address Cards,” he said of the Milwaukee cops.

On Friday, Landgraf declined to provide specifics, referring questions to his boss, District Attorney John Chisholm. Interestingly, Chisholm wouldn’t elaborate on his assistant’s concerns. “I’ll let the e-mail speak for itself,” he said while praising Landgraf’s experience and knowledge.

That emphasis is mine. We are dealing with accusations of voter fraud here, not voter registration fraud. I use “accusations”, because obviously there never was a real investigation despite the obvious. We all know better though. This is SOP from ACORN. It’s what they exist for. And it is clear that there was a delay, on purpose, to make sure any investigation in this case didn’t pan out. You have to wonder how many of these other instances are out there.

Oh yeah, for you clever lefties that will immediately point out that the Milwaukee Journal article never mentions ACORN, that’s likely on purpose. However, you can have a look at this AG indictment which clearly shows that 2 of those co-conspirators being looked at in this case were ACORN employees.

MILWAUKEE – Attorney General J.B. Van Hollen announced today that the Milwaukee Election Fraud Task Force has brought additional electoral fraud cases against five Wisconsin residents.  The Department of Justice, acting as Special Prosecutor for Milwaukee County, has filed felony charges against Maria Miles, Kevin Clancy, Michael Henderson, Herbert Gunka, and Suzanne Gunka, all alleging election fraud arising out of the November 4, 2008, Presidential Election.

“The integrity of elections is dependent upon citizens and officials insisting they be conducted lawfully. Wisconsin’s citizens should not have to wonder whether their vote has been negated or diminished by illegally cast ballots,” Attorney General J.B. Van Hollen said.

According to the criminal complaints, Miles and Clancy served as Special Registration Deputies (“SRD”) for the City of Milwaukee in advance of the 2008 Presidential Election.  Each worked for the Association of Community Organizations for Reform Now (“ACORN”).  Miles and Clancy are each charged with the felony offense of Falsely Procuring Voter Registration as Party to a Crime.  The complaint alleges that Miles and Clancy submitted multiple voter registration applications for the same individuals, and also were part of a scheme in which they and other SRDs registered each other to vote multiple times in order to meet voter registration quotas imposed by ACORN.

If you want the reference for that, it is here.

Clearly ACORN employees helped commit voter fraud. Sadly, the Milwaukee police dept dropped the ball, and the usual suspects are doing their best to not point out that connection. But we can continue to pretend the crook is the guy that dressed up as a pimp or not and got ACORN employees giving him advice on how to pimp children and/or foreigners that also might be under age, hide the income to avoid taxes, and then run for office as a democrat.

March 10, 2010 11:30 PM

By Thomas Sowell -- Abraham Lincoln once asked an audience how many legs a dog has, if you called the tail a leg? When the audience said "five," Lincoln corrected them, saying that the answer was four. "The fact that you call a tail a leg does not make it a leg." That same principle applies today. The fact that politicians call something a "stimulus" does not make it a stimulus. The fact that they call something a "jobs bill" does not mean there will be more jobs.

March 10, 2010 02:10 PM

By Michael Barone -- "Stop messing with Texas!" That was the message Gov. Rick Perry bellowed on election night as he celebrated his victory over Sen. Kay Bailey Hutchison in the Republican primary for governor. In his reference to Texas' anti-littering slogan, Perry was making a point applicable to national as well as Texas politics and addressed to Democratic politicians as well as Republicans.

March 10, 2010 02:10 PM

By Brent Bozell -- If anyone was looking for a self-righteous extreme feminist, they found one in Angie Jackson. This is a woman who was so proud she was aborting her baby that she announced she would "tweet" her chemical-cocktail abortion live, as it happened, on Twitter. The liberal media found this made-for-TV slaughter fascinating, and not at all a controversy worthy of discussing with two sides.

March 10, 2010 02:10 PM

WASHINGTON (AP) - Legislation blending help for the jobless with popular tax breaks for businesses and individuals is slated to pass the Senate Wednesday over protests from conservatives who say it adds too much to the $12.5 trillion national debt.

March 10, 2010 02:07 PM

WASHINGTON (AP) - President Barack Obama has chosen a suburban St. Louis high school to make his closing argument for a health care overhaul, pushing a new anti-fraud plan as he cranks up the pressure on skittish Democratic lawmakers to act fast.

March 10, 2010 02:07 PM

WASHINGTON (AP) -- It starts with a tip, a scrap of intelligence, a fingerprint lifted from a suspected terrorist's home. It ends when a person is forbidden to board an airplane -- a decision that's in the hands of about six experts from the Transportation Security Administration.

March 10, 2010 02:07 PM

WASHINGTON (AP) -- New York congressman Eric Massa resigned his House seat this week under a sexual harassment cloud, claiming fellow Democrats forced his ouster to keep him from voting against their health care bill.

March 10, 2010 02:07 PM

RAMALLAH, West Bank (AP) - Israel apologized Wednesday for disrupting the visit of Vice President Joe Biden with its announcement of 1,600 new homes in disputed east Jerusalem, but made clear it had no intention of reversing the order that has cast a shadow over the latest U.S. push for Mideast peace.

March 10, 2010 02:07 PM

CHICAGO (AP) -- With the public still furious over bank bailouts, Democrats desperate to keep President Barack Obama's old Senate seat are scrambling to counter revelations that a bank owned by their candidate's family may be nearing collapse.

March 10, 2010 02:07 PM

WASHINGTON (AP) -- A senior State Department official said Tuesday he's sorry for a joking remark he made about Libyan leader Moammar Gadhafi that prompted Libya to threaten diplomatic retaliation unless he apologized.

March 10, 2010 02:07 PM

WASHINGTON (AP) -- President Barack Obama said Tuesday he'll bring in high-tech bounty hunters to help root out health care fraud, grabbing a populist idea with bipartisan backing in his final push to overhaul the system.

March 10, 2010 02:07 PM

WASHINGTON (AP) -- Minorities make up nearly half the children born in the U.S., part of a historic trend in which minorities are expected to become the U.S. majority over the next 40 years.

March 10, 2010 02:07 PM

WASHINGTON (AP) -- Governors and state education leaders are proposing a new set of standards to define what should be taught in the nation's public schools, The Washington Post reported Wednesday.

March 10, 2010 02:07 PM

by Hal_10000

I’m not exactly a fan of Sarah Palin, as you may have noticed.  But the latest ”gotchya!” is a bit of a reach.

Former Alaska governor Sarah Palin, a fierce opponent of Democratic health-care reform efforts who has said America under President Obama is headed toward socialism, told a Canadian audience her family used to go to Canada to get medical care when she was growing up.

“My first five years of life we spent in Skagway, Alaska, right there by Whitehorse. Believe it or not—this was in the ‘60s—we used to hustle on over the border for health care that we would receive in Whitehorse. I remember my brother, he burned his ankle in some little kid accident thing and my parents had to put him on a train and rush him over to Whitehorse and I think, isn’t that kind of ironic now. Zooming over the border, getting health care from Canada,” Palin said a speech Saturday night, according to the Calgary Herald.

The healthcare reform cultists are jumped up and down about this.  But as Nick Gillepsie points out:

Canada was not born with the single-payer system it currently has. In fact, the full-blown socialization of its medical sector was a long time coming and was not in anything like its current state in the 1960s. In the early ‘60s, Canada had passed laws pushing universal access to hospitals; in 1966, the Medical Care Act allowed each province to create universal coverage systems, which took years to fully implement. It was only in 1984 that the current system really came online in the Canada Health Act, which banned patient fees and billing by doctors in excess of what the government paid.

There’s yet more irony. As we’ve noted many times on this blog: when you’re talking about the healthcare system we have now, there is no question which way the traffic is going.  Canadians who can afford to do so are streaming across our borders to pay for healthcare.  Need I bring up my uncle who would get cash in exchange for his services from Canadians?  Yes, I think I do.

But I’d like to trowel on another layer of irony that Gillespie dances around.  Sarah Palin’s story perfectly illustrates why we need to oppose Obamacare.  Canada’s system was not created as the rationed controlled system it is today.  It was moved there gradually, step by step, over the course of a couple of decades.  In Canada, we see the fully played-out incrementalism that went from a system that Sarah Palin happily used in the 1960’s to a system that few Americans would use now.  So, as usual, the debate proves the precise opposite point of the one the Left is trying to make.

Point, Palin.  For once.

Update: Speaking of Canadian healthcare…

March 10, 2010 11:21 AM

Stupak holds firm - Weekly Standard: "I won't agree to a promise to fix the bill in the future": "That's not acceptable because 'later' never comes."And there's this: "Steny Hoyer says Dems not on board with White House deadline."And this: "For every voters who strongly favors the plan, two are strongly opposed." Message to Congress: elections are a'comin'.

by Eric (noreply@blogger.com) on March 10, 2010 03:21 AM

Prepare for a future of cardboard and cat food - I find this headline from CNN/Money to be shocking: "43% have less than $10K for retirement." Holy cow. I really hope these people aren't depending on Social Security.

by Eric (noreply@blogger.com) on March 10, 2010 01:45 AM

Nancy in Wonderland health care accountingI'm not going to lie to you dear reader: this David Brooks column – in the New York Times (!) – gave me a Chris Matthews-style tingle up my leg.They’re going through the motions. They’ve stuffed the legislation with gimmicks and dodges designed to get a good score from the Congressional Budget Office but don’t genuinely control runaway spending.Then, in

by Eric (noreply@blogger.com) on March 10, 2010 01:23 AM

by Hal_10000

That’s the title of this post, which argue that GM’s recent decision to spare six hundred dealerships from the axe makes them the USPS of cars.

The main reason that the USPS will never make any money is that it can’t get rid of its infrastructure.  It must have a post office in every district and letter carriers visiting every house six (soon to be five?) days a week.  They can’t get rid of their post offices because Congress pays the bills, and no congressman is willing to let their post office get shut down.  They won’t give up universal delivery because their unions, who help elect those congressmen, don’t want to give up those jobs with, say, requiring rural people to come into town to pick up their mail, like they do their groceries and sundries.

...

Now that Congress has similar control over Government Motors, are we seeing the same political pressure take hold in that firm?

GM is claiming they are acting in good faith, that the restored dealers were found to be necessary.  Maybe they’re telling the truth but the problem with a government-owned car company is that no one believes it.  There has certainly been political pressure brought on Congress and the White House to stop some of these closures.  And you have to wonder if those 661 reprieves are more connected with politics than economic reality.

Are we going to see the day when GM and Chrysler will tell the government that, like the Post Office, they plan to lose $200 billion over the next decade?  We can’t be very far from it. And is this the way healthcare is going to play out down the road?  That hospitals will issue special dispensations for those who complain enough to Congress?

This is why I hate getting the government involved in things.  It contaminates everything, it muddies the waters, it makes motives unclear.  Enough already.

March 09, 2010 07:23 PM