iCount

Ken is here today. The conference will be webcast, and you can submit questions here.

by Rdan (noreply@blogger.com) on March 19, 2010 03:03 PM

I have been asked to repeat some of my past post on the stock market. In particular they wanted to see this long term chart of the S&P 500 price/earnings ratio. Until the 1990s bull market a PE of over 20 on trailing earnings was always a signal of an impending bear market as a PE of over 20 was never sustained. There is a long pattern of the market PE swinging from over 20 to under 10. Moreover, even though many Wall Street strategist talk about the long term average PE of about 15, there is no central tendency for the market to converge on the average of 15 and it really does not stay around 15 any longer than around any other value. Prior to 1926 the data is from Robert J. Shiller's Irrational Exuberance . From 1926 to 1989 it is from S&P and after 1989 I calculate it from S&P's estimated operating earnings data.







I use operating earnings because it is what most professional investors use and I believe that the estimate of on going operations is the most relevant measure to value future earnings. Of course, right now it does not make much difference as operating EPS and reported EPS are about the same. Last year's big difference between the two measures stems largely from the massive write-offs by financial firms . Moreover, much of the recent big snap back in earnings is the write-offs rolling out of the four quarter trailing earnings data.



But as these write-offs rolled out of the data is generated a big drop in the market PE based on trailing earnings to about 19. In my valuation model that makes the market fairly valued to cheap.

In a highly cyclical environment as we are now experiencing many people like to use an estimate of "normalized earnings" to eliminate cyclical earnings distortions. So if you use the 7% trend growth in the above chart of operating vs reported earnings to estimate the market PE you get very similar results. Shiller, and some commentators at this blog use the 10 year trailing earnings. When you are dealing with an individual company where the long term earnings growth trend can change, that rule is a very good practice and builds in a measure of safety. But the long term earnings growth for the entire market is unlikely to change rapidly, so I feel comfortable with this approach.

If the economy is in a Japaneses deflation trap of course the trend earnings would be lower.

So maybe we should look at the prospects for earnings. The recent productivity report received much attention. But I did not see anyone point out that the spread between nonfarm corporate prices and unit labor cost was 5.25%, the widest spread on record.

This spread is the single most important variable driving corporate profit margins and implies that you should expect major positive earnings surprises.





In addition, corporate profits are very much a function of deviations from trend in real GDP growth. So with margins extremely wide and reasonable prospects for above trend growth, profits should continue to rebound strongly.





With the big margins improvement profits in the national accounts have already rebounded to above trend.







The other thing investors worry about that could be a major threat to the market is inflation. I'm in the school that believes sufficient excess capacity in the economy, whether measured by the output gap, the unemployment rate or capacity utilization, to keep inflation under control for the time being.

However, there may not be as much excess capacity as many believe. Much of the unemployment is structural . Moreover, the Fed estimates that industrial capacity is actually contracting and the growth of potential real GDP is at record lows.

For this year, I do not expect this to impact many prices outside of basic commodities, but in the out-years it could become a significant problem.





Contrary to many claims, the reason capacity creates a potential problem is weak business fixed investment. Despite low marginal tax rates and record profits real

business fixed investment was extremely weak over the last cycle. I will not go into a whole litany of reasons for weak investments, but I will just point out that in the 1960s, 1980s, 1990s, and the 2000s that capital spending was inversely proportional to marginal tax rates.



So, I've given everyone a wide range of topics to discuss and debate. Have fun.

by spencer (noreply@blogger.com) on March 19, 2010 12:40 PM

This article is pretty much spot on:

But now the violence is at unprecedented heights and still the Commissioner is silent. Too bad, because someone should be out front here and at least giving theimpressionthat he’s attempting to lead!

Add the dangerous hit that Chicago’sBrent Sopellaid on Anaheim’sCorey Perryand the obvious retaliation byJames WisniewskionBrent Seabrook– a blow to the head that appeared to knock his former teammate unconscious even before he fell to the ice — to the growing pile of videos featuring the “reckless” (NHL’s word) hit onBrian Campbellby the now multi-time offenderAlex Ovechkin,Matt Cooke’sunpunished blindside head shot onBoston’sMarc Savard, theMike Richardshit on David Booth, andSteve Downie’sunconscionable and twisted takedownfrom behind ofSidney Crosby, and its clear that the NHL has a leadership problem that shouldn’t start and stop with Colin Campbell.

It is hard to argue with this.  And whats worse, it seems to be coming from the top:

Bettman, who fast became a student of the NHL’s inglorious history, should take note of that. His league has a crisis on its collective hands and he appears to be doing nothing about it.

Now, we use the word “appears” because something odd happened in the last 24 hours. First, Campbell gave an interview to Canada’s national newspaper,The Globe and Mail, confirming rumors that the league was about to “fast track” the recent rule cooked up by the GMs regarding blows to the head and the penalties that could or should be called or at least reviewed by Campbell and his office. Heeven went so far as to tellGlobe reporterEric Duhatschekthat the league was preparing a DVD to show the 30 team administrators and all the players what will and won’t be a penalty under the proposed rule change. Campbell also said that if rushing the rule through saved even one player from a concussion, then the fast-tracking effort “would be worth it.”

But almost before the ink was dry on that story, Campbell’s right hand man,Mike Murphy, was on a Toronto-based radio station saying he didn’t think that the “fast tracking” was likely. Later that same day, Campbell appeared on the league’s own radio station and “back tracked” down Route 180 so fast that he’s fortunate he wasn’t injured in a collision with himself. Whether that turn around was his own or imposed from above, well, we’ll leave it for you to decide.

“I don’t anticipate doing anything with a penalty call on the ice right now,” Campbell said with what we swear was the sound of screeching tires in the background. “I think that would be a difficult thing to consistently administer at this point in time.

“That’s not our issue,” he added. “Our issue probably is making sure that some of the hits we’ve experienced can be dealt with from the supplemental discipline aspect. That’s what we’re trying to accomplish at the moment.”

Moments don’t last very long in the NHL, and our guess is that Campbell’s order came from above. He has been reversed before, more than once, without anyone taking credit or blame. When you see words like “right now” and “at this point in time” and “not our issue” and “probably,” it’s fairly reasonable to assume that he’s been told to alter his stance and fast. That happened when he started handing out real punishment in the form of 15-, 20- and 25-game suspensions a few years back and quickly went back to two- to four-gamers and the now absurdly low fines like the one Downie, a repeat offender, got for nearly breaking Crosby’s leg in a takedown that Crosby never saw coming.

Hockey is an acquired taste in most of the country.  It is hard to find places where ice occurs naturally long enough for people to come to the game naturally.  It is even harder to afford the costs of rink hockey for most people.  Fortunately, hockey as a game has a lot to recommend it.  It is faster than basketball, more hard hitting than football and involves more strategy than baseball.  The success of the game in the late eighties and early nineties shows that it can be grown, that casual fans can learn to appreciate it.  The amazing ratings for the Olymic tournament show that fans today enjoy good hockey.

But the NHL has squandered that momentum and goodwill with a series of ugly incidents that have gone either unpunished our ludicrously lightly punished. And that is Bettman’s fault.  As pointed out above, the last time the league’s disciplinarian tried to reign in rough behavior, he himself was reeled back in by the league.  Bettman has given in to the tiny-dicked troglodytes who assuage their own feelings of sexual confusion and inadequacy by arguing that pushing a defenseless player into the boards, or ramming a man’s head into the glass with your elbow, or cracking someone’s skull with a blindside elbow is “tough” instead of cowardly.

There is no game more physical, more graceful, nor exciting than well played hockey.  Americans saw that during the Olympics.  But if Bettman continues to listen to those who thin that players who cannot skate, pass, shoot, or think should be allowed to make up for their deficiencies through mindless thuggery, the league will never be able to demonstrate that the the public at large.  Worse, if things continue to spiral out of control liek they have the last few months, someone is going to be crippled or killed on the ice.  And the NHL will look back at these last few weeks and wonder why they didn’t do something about this before it was too late.  And they will conveniently  forget that the answers is because they chose not to.

by Kevin on March 19, 2010 12:17 PM

Okay, Standard Mischief, knock yourself out.

UPDATE: TNR has a summary of the changes, if you want a “Cliff’s notes” version.

by tgirsch on March 18, 2010 06:50 PM

This is a very, very odd argument. In essence, the author argues that Google can do no good by leaving China over its censorship practices.  More, they argue that Google doesn’t have the right to attempt to alter China’s behavior in any way:

The thing is, Google sacrificed any moral stance they could possibly adopt, when they entered China and set up business in 2005. Don’t get me wrong, I’m not in favor of censorship and just can’t imagine living with such heavy restrictions. But how are you going to enter a country, comply with their censorship, then turn around and complain about it five years later? I wish there was an easy way for both sides. Yet barracking Google on isn’t the way to go about it. It’s not for us, for Google, or for anyone to really tell China how to manage itself, how to govern its people and tell them they should be able to access all the information they want. I mean, we can tell China to quit its censorship practices, and we can do it online, because it’s our right to do so in whatever country we live in, but how much use is it going to be, really?

Google knew what they were getting into when they made agreements with the Chinese government, they knew they couldn’t take the country’s censorship lightly, and just like how you and I respect countries’ customs when we visit—by handing a Korean a business card with two hands, or standing on the right-side of the escalators in England—they knew they couldn’t just waltz in and try and change the situation. True, when governments can see ill-goings in other countries they try and intervene, wars break out this way, but was it up to Google to break the Chinese people from their firewall manacles?

Thats right: the author argues that government censorship is just like standing on the right side of the elevator in England.  This almost reads like parody, but as far as I can tell it is serious.  I am almost at a loss for words.

Almost.

The author is correct in a very narrow sense.  Google leaving now would cause some economic hardship to some people in China and when you participate in a country’s economy, you will end up playing by their rules.  But pretty much everything else in the post is, at best, arguable and at worse complete bollocks.

First, keep in mind that companies lay off people, end alliances, and generally much about with the economic circumstances of people all over the world and they generally do so for something as inconsequential as a temporary eighth of a point jump in their stock price.  That is just how business functions.  Calling out Google for doing the same in the pursuit of an actually worthwhile goal is puzzling, to be kind.  Perhaps you can argue that becasue Google has an explicitly moral reason for leaving China that it should be held to a different standard in this case.  But then you would have to prove that the harm it does by leaving outweighs the harm it does by staying.  The author doesn;t come close to making that point.  They honestly don’t even try.

The author admits that Google leaving China would be a blow against Chinese censorship, calling it a “a great step forward in tackling censorship”.  The author even explicitly states that censorship is wrong, saying that ” …[I] just can’t imagine living with such heavy restrictions.”  But at no point does the author try to argue that the economic harm is greater than the good Google could do by threatening the Chinese censorship regime.  Instead, the author just argues that Google has already sold its soul by first going into China and agreeing to be part of the censorship regime.  The argument is basically that sine Google once agreed to go along with Chinese censorship, they are obligated to never change their minds.  Oh, there is some hand waving in the direction of the damage Google’s partners and employees might experience, but no real attempt to weigh that harm with the harm Google does and would continue to do by participating in the Chinese censorship regime.  e the author isn’t going to take that argument seriously, then I don’t feel I need to either.  No, the only real argument that the author makes is that Google doesn’t have the right to try and influence the Chinese government and that Google is not allowed to change its strategy based on a changed understanding of the situation.

That is insane.  Part of the justification for Google doing business with a regime like China is that capitalism will eventually open up the country politically.  Google has obviously come to the opposite conclusion, and is acting on their revelation.  To this author, that is a terrible decision, largely because Google doesn’t have the right to attempt to influence the Chinese government and because it once had a different opinion.  That is an almost childishly nihilistic argument: life sucks, but you don’t have the right to ever try to make things better.  Just sit back and don’t do anything to ever challenge the status quo or set your sights higher than the next quarterly earnings statement.  It is a defeatist, nihilistic, almost cowardly argument made all the worse because it pretends to concern itself with the well being of Chinese without actually bothering to address that alleged concern in an honest, forthright manner.  Pretty much the only reason not to think this article is a plant from the Chinese government is because it is not believable that the Chinese government would make such a laughably unpersuasive attempt.

by Kevin on March 18, 2010 12:19 PM

Updated So Dennis Kucinich has switched his vote on health care deform.



I can appreciate how intense the political pressure was and as I said myself just the other day, if I were in Congress I would be 50-50 about my vote: Given that it's this (plus, one assumes, the tweaking - and face facts, it is no more than that - through reconciliation) or nothing, the question is which course, defeat or passage, holds out a better chance for actual, honest-to-gosh reform and actual, honest-to-gosh universal access and actual, honest-to-gosh "healthcare is a right."



While, as I've said to the point of boring people, I think the best outcome would be if the bill were defeated as the result of a loud, significant, progressive shout that it's just not good enough, I strongly suspect that rejecting the bill will be seen as the right wing having killed it. I sense that Kucinich was making some of the same calculations I did, as his references to attempts to "de-legitimize [Obama's] presidency" suggest he was thinking in terms of the bill's defeat being read as a right-wing victory even if it was progressives' votes that made the difference.



So I still think I would have voted "no" but I understand Kucinich's decision and can't really fault him for it. I admit to being a little disappointed but I can't be too disappointed because of the reasons I already stated.



(Parenthetically, I can't help but notice that despite the almost routine attempts by the media and much of what passes for the left in this country to dismiss him as irrelevant, the effort the White House put into lobbying him - including four one-on-ones with Obama who also staged a rally in Kucinich's district - shows how significant his vote is: As Kucinich himself said, if he can vote for this there's no reason anyone else can't. His "yes" becomes good political cover for other progressives who voted no the first time around to switch.)



What I'm more disappointed by is the fact that this is just another case where true progressives - Let me make a detour here to make it clear here that I emphatically reject the attempt by flaccid liberals to hijack "progressive" as their new self-description as they run away from their own label because they're too fucking wimpy to fight for it. I hold "progressive" to mean what it traditionally did, referring to that space that was to the left of "liberal" but short of "radical." Anyway, this was just another case where true progressives (and there are some in Congress, a couple of dozen, anyway) are not allowed even by those who should be their allies to vote their conscience, to stand on principle. Oh no, you must be, you must be, "pragmatic," you must bend, compromise and compromise again, you must settle, you must seek only what conventional wisdom says is doable right now, never more than that, and then you must negotiate back from there to even less, you must bend until you break - because to do otherwise is to be condemned as "irresponsible" or even "reprehensible," to be mocked as living in a fantasy world and believing in "magical ponies."



But as has been said many times, progress is not won by "reasonable" people pursuing "realistic" goals but by very unreasonable people who refuse to settle for what is attained conveniently or without undue fuss - and despite all the bluster and fluster over the last year, a health care "reform" bill that not only does not challenge but in fact cements the dominance of the health insurance industry and profit-driven medicine, that makes some adjustments in how we finance health care but does not challenge how we deliver it, is, yes, "without undue fuss." It is the "reasonable" people who make the incremental improvements - but only because, only because, the unreasonable people have carved out the space in which they can operate.



I intend to continue to be an unreasonable person.



Footnote: The quote about "de-legitimizing" Obama's presidency comes from a scuzzy piece by Dana Milbank, which link I used largely for the purpose of having this Footnote.



What a pathetic piece of pap Milbank regurgitated. Writing about Kucinich's press conference, he started with a reference to "leprechauns" and "lucky charms," moved on to "diminutive" and "little man," referred to a "six-inch box" on which Kucinich stood "so that his face would be above the microphone," then reprised "leprechauns" before closing with "the little guy."



His undisguised sneering didn't stop with physical references: There was the obligatory adjective "quixotic" when referring to Kucinich's presidential runs and, Milbank scornfully insisted, now as it was then, "It was all about him." And, "keeping the spotlight on himself," Kucinich "viewed the crowd with a satisfied smile," having "luxuriated in all the attention Obama had given him."



All that in little more than 800 words, even when the word count includes the quotes from Kucinich's statement that Milbank included because he thought they make Kucinich look foolish and self-absorbed.



He also included the obligatory reference to Kucinich having "lead [Cleveland] into default" when he was mayor while of course not mentioning how and why it happened or the personal price Kucinich paid or that his actions ultimately saved the city and its residents hundreds of millions of dollars over the following years.



Dana Milbank has become much better known for his smirk than his journalism - and, as this exercise in unjustified condescension shows, deservedly so.



Updated with Two More Footnotes: First is that Glenn Greenwald discussed - and largely agreed with - a piece by

Politico's Ben Smith [which] suggested that one important aspect of Rahm Emanuel's health care strategy -- to ignore the demands of progressives on the ground that they would fall into line at the end no matter what -- has been vindicated.

Despite some huffing and puffing from some quarters that "that's not fair!" I'd say it's not only fair, it's correct. My only criticism of Greenwald's piece is that it doesn't go far enough in exploring the price progressives pay - one extracted by liberals - when they try to stick to their principles and promises, a price that can go well beyond denunciations and name-calling. For example, as Jane Hamsher noted at Firedoglake,

[t]he alternative [to capitulating], as Dennis Kucinich found out, was to be hounded from office by liberal interest groups whose job is now apparently to play enforcer on the left so the President can follow through with his PhRMA and AHIP deals.

I'll also note that among the huffers and puffers was Markos Moulitsas, despite the fact that he was just on Countdown opining grandly about the progressive failure to gain anything in the bill - which he did just a couple of days after going on the same show to denounce Dennia Kucinich as "reprehensible" for not supporting the Senate bill. A case study in being irony-challenged.



The other footnote comes from the same Jane Hamsher piece and is another entry for your Diogenes file:

Last July, in response to a campaign we launched the month before, 65 members of Congress pledged to vote against any bill that does not have a public option. At the suggestion of Rep. Donna Edwards, online supporters raised $430,000 to thank them. Dennis Kucinich was one of those members of Congress. ...



I spoke with Dennis following his speech [about changing his vote], and his campaign will return the money to those who have donated in support of his pledge to vote against any health care bill that does not have a public option.

Hamsher calls it "the honorable thing to do," which it surely is, and suggests the other recipients should follow suit. Let's see if any do.

by LarryE (noreply@blogger.com) on March 18, 2010 04:28 AM

TPM:

Signs point to a done deal, and the White House says health care reform will soon be the law of the land. But the Democrats are, well, Democrats.

Truer words have rarely been spoken.

Other than that, Happy St. Patrick’s day. Open thread.

by tgirsch on March 18, 2010 12:55 AM

So the move is complete.  If you see something wrong, besides the lack of a blogroll, let me know and I will see what I can do to correct it.  This is now being hosted at WordPress.com, though, so I am somewhat limited in what I can change.

by Kevin on March 17, 2010 08:52 PM

Recently the Wall Street Journal editorial page and numerous conservative/libertarian bloggers have shown charts comparing the last few years spike in the teen age ( 16-19 year olds) unemployment rate with the rise in the minimum wage in an attempt to blame rising teen unemployment in 2008 and 2009 to the minimum wage hike. But more detailed data from the BLS shows that teen employment at the minimum wage rose 46.1% in 2008 and 50.1% in 2009. This detailed data implies that the rise in the teen unemployment rate from around 15% in 2007 to over 25% in late 2009 was entirely due to the great recession, not the rising minimum wage. This data is so compelling that I think at a minimum these conservative/libertarian at least owe us an explanation as to why it does not disprove their argument.





On 9 February--Minimum wage disinformation --I published a chart that showed since 1960 there have been 18 increases in the minimum wage. Nine of those increases were accompanied by a falling teen unemployment rate and nine were accompanied by a rising teen unemployment rate. The difference was that the nine times teen unemployment rose were also associated with a recession while the other nine occurred in an economic expansion. This chart and regression analysis clearly implied that the bulk of the increases in teen unemployment since 1960 was due to recessions, not rising minimum wage.



Now the BLS has published more detailed data on teen employment at and above the minimum wage in recent years. This data contains several surprises that tend to strongly contradict the standard theory of teen employment and the minimum wage taught in most economic textbooks.



First it shows that during the years 2002 to 2007 when the nominal minimum wage was unchanged, teen employment at the minimum wage was less than 10% of teen employment. Over 90% of teens were paid more than the minimum wage.



Second, over this period of a flat nominal minimum wage the real minimum wage was falling and each drop in the real minimum wage was associated with a drop in the number of teens employed at the minimum wage. Teens clearly though that school work, public service -- so important in college applications -- sports or leisure activity like video games was a more valuable use of their time than working at a minimum wage job. Consequently, firms had to offer a higher wage than the minimum wage to induce teens to work for them. This is why the share of teens paid more than the minimum wage rose from 2002 to 2007. This should not be any great surprise to an economist. It is standard economics 101 that if you want more of something you offer a higher price. I have never really understood why most economics instructors spend much of an economics course teaching that if you want more of something -- raise prices. Than they turn around and teach that you will get more teen minimum wage employment if you offer a lower price. YEAH RIGHT -- and they wonder why the students have trouble getting it.





Third, the data shows that from 2007 to 2009 while the minimum wage rose from $5.15 to $7.25 -- a 50% increase -- teen employment at the minimum wage rose from 373,000 to 818,000 -- a 119 % increase. Moreover, teen employment at more than the minimum wage fell from 5,061,000 to 3,579,000, almost a 30% drop. The drop in teen employment at more than the minimum wage accounted for 130% of the 1,037,000 fall in teen employment from 2007 to 2009. Again, this should not be a big surprise to economist. A large increase in the real minimum wage generated a large increase in teen employment at the minimum wage. It is standard economics 101. This data also implies that essentially all of the drop in teen employment from 2007 to 2009 was due to the Great Recession, not higher minimum wages. I suspect that if we had this detailed data for other periods of a rising minimum wage it would show a similar pattern.



In my blogging about the minimum wage I have never taken the position that raising the minimum wage does not lead to weaker employment. All I have done is point out that the available data completely contradicts the theory that the minimum wage causes weaker employment. Moreover, the more data that becomes avilable, the more it condraticts standard textbook theory.



I have noticed bloggers such as Mark Perry at Carpe Diem, Don Boudreaux at Cafe Hayek, Alex Tabarrok at Marginal Revolution, Megan McArdle at the Atlantic, Ironman at Political Calculations, or Greg Mankiw have advanced the thesis that the recent rise in teen unemployment is due to higher minimum wage, but they need to explain why a doubling of teen minimum wage employment does not contradict their analysis.



This data can be found at

Characteristics of minimum wage workers



Because the BLS reports each years data in a single file, if you want to look at data for multiple years it is easier to go to the top left of the BLS home page and search for "characteristics of minimum wage".

The search will show a Google search of each of the different years files and moving back and forth from Google to BLS is the best way to switch from the file for one year to another. Also, since the data for 2009 has just been reported it has not had time to collect many hits, so it will be on page 2 or 3 or the Google search.

by spencer (noreply@blogger.com) on March 17, 2010 12:29 PM

More information in response to Standard Mischief’s questions. The American Enterprise Institute’s Norm Ornstein:

Any veteran observer of Congress is used to the rampant hypocrisy over the use of parliamentary procedures that shifts totally from one side to the other as a majority moves to minority status, and vice versa. But I can’t recall a level of feigned indignation nearly as great as what we are seeing now from congressional Republicans and their acolytes at the Wall Street Journal, and on blogs, talk radio, and cable news. It reached a ridiculous level of misinformation and disinformation over the use of reconciliation, and now threatens to top that level over the projected use of a self-executing rule by House Speaker Nancy Pelosi. In the last Congress that Republicans controlled, from 2005 to 2006, Rules Committee Chairman David Dreier used the self-executing rule more than 35 times, and was no stranger to the concept of “deem and pass.” That strategy, then decried by the House Democrats who are now using it, and now being called unconstitutional by WSJ editorialists, was defended by House Republicans in court (and upheld). Dreier used it for a $40 billion deficit reduction package so that his fellow GOPers could avoid an embarrassing vote on immigration. I don’t like self-executing rules by either party—I prefer the “regular order”—so I am not going to say this is a great idea by the Democrats. But even so—is there no shame anymore?

Note that it apparently survived a court challenge, when the GOP successfully defended it.

by tgirsch on March 17, 2010 03:04 AM

That’s a question that’s been posed by commenter Standard Mischief, among others. The answer? Maybe, depending on just how it’s done, but it’s not entirely clear. And the only constitutional way to do it would be a way that doesn’t give the House the political cover it’s looking for. Jack Balkin has the skinny.

by tgirsch on March 16, 2010 08:57 PM

Robert Waldmann



Let me join Brad DeLong in Saying

Let Me Join Pete Davis in Saying: "Thank You Marjorie Margolies-Mezvinsky"

Pete Davis expresses the sentiment very well:

Thank You Marjorie Margolies-Mezvinsky: I've always wanted to thank Marjorie Margolies-Mezvinsky (D-PA) for her courageous deciding vote for President Clinton's 1993 deficit reduction bill. Her Republican colleagues jeered her as she walked down the aisle to cast her vote with shouts of "Bye, Bye Marjorie!" Her crime -- voting for the Omnibus Budget Reconciliation Act of 1993 that reduced the FY94-FY98 deficits by an estimated $496 b., with $241 b. of tax increases and $255 b. of spending cuts. The bill capped a 12-year deficit reduction effort, leading to the budget surpluses of FY98-FY01. She paid the political price, losing her seat in suburban Philadelphia after her first term in office, but she set the U.S. economy on course for its strongest decade since the 1960s.

Unhappy is the country which needs heroines.



So she lost her seat, but who else's service in Congress do I remember with such gratitude ? Answer, Senator George [ed] Mitchell*.



It is important that Marjorie Margolies-Mexvinsky's political heroism is not forgotten. The fact that it is remembered might help some current Representatives find some courage.



* He turned down a seat on The Supreme Court and didn't run for re-election so that he could concentrate on passing Clintoncare. No good deed goes unpunished. For his virtue he was sent to try to solve the damnable question of Northern Ireland. He succeeded. No great deed goes unpunished either and he is now in charge of mideast negotiations. In a just world, Newt Gingrich would be trying to get Israel and Hamas to make peace, and Mitchell would be cashing in** and appearing on TV to pontificate. But, in a just world we wouldn't need Marjorie Margolies-Mezvinsky or George Mitchell.



** Of course he has cashed in, but that was long ago, and in another country (the USA).

by Robert (noreply@blogger.com) on March 16, 2010 03:09 PM

T.R. Reid hosts a Presentation of Money-Driven Medicine on Link TV (see reception information) As taken from Maggie Mahar’s Health Beat Blog. A special investigative TV program is being aired detailing healthcare costs and the healthcare system. The topic is timely and well worth the time watching in order to gain a greater understanding on what is wrong with healthcare in the US.

by Rdan (noreply@blogger.com) on March 16, 2010 12:39 PM

A couple of science stories that have ranked high on my Kewl! meter lately:



- A report published a few issues back in "Current Biology"

argues that a population of birds [in central Europe] known as black­caps has split into two “reproductively isolated” groups in under 30 generations, despite continuing to breed in the same forests. In other words, the groups aren’t breeding with each other, setting the stage for them to evolve differently in the future.

What's more, the split was caused by humans. People began providing food in winter for the migrating birds, with the result that there's now a migratory divide, with some birds following one route and others another, influenced by the food. There are already visibile differences between the two groups:

“The new northwest migratory route is shorter, and those birds feed on food provided by humans instead of fruits as the birds that migrate southwest do,” [Martin] Schaefer [of the University of Freiburg] said. “As a consequence, birds migrating northwest have rounder wings, which provide better maneuverability but make them less suited for long-distance migration. They also have longer, narrower bills that are less equipped for eating large fruits like olives during the winter."

What is the importance of this?

“Our results now show that the initial steps of speciation can occur very quickly in a highly mobile, migratory bird,” and “it doesn’t have to take millions of years.”

And humans can directly influence that process. Eat it, creationists.



- The Fibonacci sequence is a well-known number progression where each number is the sum of the two preceding numbers: 0, 1, 1, 2, 3, 5, 8, 13, and so on. It's a progression widely found in nature and as it proceeds, the ratio between successive numbers in the sequence draws ever closer to the so-called "golden section" or "golden ratio," used since the Renaissance to compose paintings and in architecture to design visually-pleasing buildings. That ratio is 1:1.618.., the ellipsis at the end indicating that, like pi, the ratio does not have an exact value but continues indefinitely. An interesting aspect to this is that if two numbers are related by that ratio - that is, if a/b = 1.618 - then they are also related by their sums divided by the larger of the two - that is, (a+b)/a = 1.618.



Now, it develops that the same sort of symmetry can be found at the quantum level.

The researchers in the new study focused on the magnetic material cobalt niobate. It consists of linked magnetic atoms, which form chains like a very thin bar magnet, but only one atom wide. They are considered a useful model for describing magnetism at tiny scales in solid state matter.



When a magnetic field is applied to the chain at right angles to an aligned “spin” of its particles, the magnetic chain transforms into a new state called quantum critical, according to the physicists. This can be thought of as a quantum version of a fractal pattern, a pattern that looks the same at any scale.

Without getting further into quantum physics, suffice it to say that the researchers discovered that they could "tune" the string of atoms to act like a guitar string - or more precisely, a series of guitar strings - with the resonant frequencies (or "notes") related by the tension between adjacent atoms.

“The first two notes show a perfect relationship with each other,” [said Radu Coldea of Oxford University,] principle author of a paper on the findings [that appeared] in the Jan. 8 issue of the research journal Science.

That ratio is 1:1.618 - which is to three decimal places precisely the same as the golden ratio. It appears that the quantum state has a hidden symmetry, it's own underlying order - and it's a pleasing one.



- Okay, if this doesn't rank high on your Kewl! meter, I don't know what would.

The colour of some feathers on dinosaurs and early birds has been identified for the first time, reports a paper published in the research journal Nature....



An analysis concluded that Sinosauropteryx, a much smaller relative of Tyrannosaurus rex, sported bristles that were precursors of feathers in alternate orange and white rings down its tail. And the early bird Confuciusornis had patches of white, black and orange-brown colouring, scientists said. Future work is expected to allow precise mapping of colours and patterns across the whole bird. ...



The researchers from the U.K., China and Ireland reported identifying two kinds of melanosomes, or cellular structures, in the feathers of many birds and dinosaurs from northeastern China’s famous Jehol fossil beds.



Melanosomes are colour-bearing compartments within the cells of feathers and hair in modern birds and mammals, giving black, grey, and tones such as orange and brown. Because melanosomes are part of the tough protein structure of the feather, they can survive for hundreds of millions of years.

This also has a connection to evolution: The research clearly shows that feathers preceded birds, making it a clear case where something that already existed (feathers for display or heat regulation or perhaps another purpose) was adapted to an entirely different purpose (flight). It's another example of being able to answer the creationists' "How could that have just happened all at once," in this case related to birds, feathers, and flying, with "It didn't."



- Finally, there's this for all the exobiology fans out there.



The more we learn about how life can survive and even flourish in extreme environments and in places we thought it couldn't or wouldn't exist, the more we realize just how adaptable and tenacious life is - and therefore how the chances for life other than on Earth increase. And it seems we've done it again.



A NASA team drilled an eight-inch wide hole some 600 feet through the ice of western Antarctica and lowered a video camera and light down through it to get a first look at the underside of an ice sheet.



The temperature below freezing and no light reaches it. Scientists had figured nothing much more than a few microbes could live there.



Instead, to their surprise they saw a shrimp-like creature come swimming along and settle on the camera's cable. When the cable was pulled up they found a tentacle from what they think was a foot-long jellyfish.

"We were just gaga over it," [NASA ice scientist Robert Bindschadler] said of the 3-inch-long, orange critter starring in their two-minute video. ...



The video is likely to inspire experts to rethink what they know about life in harsh environments. And it has scientists musing that if shrimp-like creatures can frolic below 600 feet of Antarctic ice in subfreezing dark water, what about other hostile places? What about Europa, a frozen moon of Jupiter?



"They are looking at the equivalent of a drop of water in a swimming pool that you would expect nothing to be living in and they found not one animal but two," said biologist Stacy Kim of the Moss Landing Marine Laboratories in California....

Microbiologist Cynan Ellis-Evans of the British Antarctic Survey suggested the creatures might have swum in from far away and don't live there permanently, but Kim doubts it, noting the nearest open water is 12 miles away and the chances of two creatures just happening to be in the tiny amount of water examined seem quite small.

Yet scientists were puzzled at what the food source would be for these critters. While some microbes can make their own food out of chemicals in the ocean, complex life like the amphipod can't, Kim said.



So how do they survive? That's the key question, Kim said.



"It's pretty amazing when you find a huge puzzle like that on a planet where we thought we know everything," Kim said.

Damn effing straight. Science is Kewl!

by LarryE (noreply@blogger.com) on March 15, 2010 09:36 PM

Angry Bear Ken Houghton will be a panelist, and other participants in the conference include Mike Shedlock, Mark Thoma, Paul Romer, Alex Tabborak.



Economics Bloggers Forum

8:30 a.m. - 4:00 p.m. CDT

Friday, March 19, 2010



Watch leading economics, technology, and finance bloggers discuss key policy issues and cutting-edge research on topics related to entrepreneurship, innovation, and growth.



View Webcast



Agenda (all Central Times) includees:



9 a.m. Keynote Speaker

David Warsh, author of the online economics column www.economicprincipals.com, will discuss his experiences in and assessment of the nascent business of blogging in the context of the evolving print journalism industry. Warsh was a long-time economics columnist for the Boston Globe where he wrote online weekly for seven years. He is the author of three books, most recently Knowledge and the Wealth of Nations: a story of economic discovery.



9:30 a.m. Panel 1-Great Recession: Impact on America's Future?

Moderator: Paul Kedrosky

Panelists: Bob McTeer, Megan McArdle, Mark Thoma



1:00 p.m. Persuasion and Norms

Paul Romer



1:30 p.m. Panel 2-Is Growth a Mystery? Haiti, Afghanistan, Africa...

Moderator: Tim Kane

Panelists: Alex Tabarrok, Allison Schrager



2:30 p.m. Panel 3-U.S. Fiscal Mess: How Does It End?

Moderator: Robert Litan

Panelists: Donald Marron, Ryan Avent, Ken Houghton, Mike Shedlock



3:45 p.m. Closing Remarks

Carl Schramm, president and CEO, Kauffman Foundation

by Rdan (noreply@blogger.com) on March 15, 2010 06:49 PM

Robert Waldmann



I am very glad that John Quiggin has found a group even less worthy or respect than us macroeconomists. He writes

It seemed for a little while as if the delusionists had scored another win, when Phil Jones, the scientist who has been most viciously target by the hackers/harassers gave an honest answer to a deliberately loaded question prepared by them and put to him in a BBC interview

BBC: Do you agree that from 1995 to the present there has been no statistically-significant global warming?

[kip]



Looking at the responses of ’sceptics’ to this episode we can distinguish four or five sets (depending on your views about set theory)



[skip]



5. Those genuine sceptics who pointed out the dishonesty of the claim, and called out those on their own side of the debate who promoted it. Obviously, members of this set deserve some serious respect and attention in the future. Unfortunately, the intersection between this set and the set of “sceptics” in the currently prevailing sense appears to be the empty set[2]

That's 5 sets Professor Quiggin. It's also statistically significant evidence that global warming skeptics are, on average, either more clueless, more dishonest or both than the general population. Also the data set does not contain statistically significant evidence against the hypothesis that all global warming skeptics are incapable of understanding basic statistics, recklessly irresponsible and total liars.



Quiggin assumes that most are only one or two of these things, but there is no evidence for his belief in the data set he analyses.



Thin comfort for macroeconomics. What Quiggin has shown is that climate science is science, just as he has shown that macroeconomic science is not science in "Zombie Economics."

by Robert (noreply@blogger.com) on March 15, 2010 05:20 PM

by cactus



A Tale of Two Clients - And Lessons Lehman Learned Late or Not at All



My first "real" job (i.e., after grad school) was at what was then a Big 6 accounting firm (and is now a Big 4 accounting firm) doing "transfer pricing." I wasn't right for the job (or the environment), nor was the job (or the environment) right for me. But I did learn a lot about how the world works.



One of the big clients serviced by the transfer pricing group from the office I was working is a household name. Other than North Koreans and people with some form of mental impairment, I doubt there's anyone anywhere in the world over age eight who would fail to recognize the company name or its logo. And to be honest, I'm not sure about the North Koreans. Another big client has a name that is only slightly less recognizable. I'll call them Co. 1 and Co. 2.



Now, when I was there, Co. 1 was very aggressive on tax issues - which means it was willing to push the envelope and see how far it could push the IRS. The odd fine or two for going too far was just a cost of doing business, and it expected its highly priced Big 6 accounting firm to produce, ahem, tax plans that fit the bill. Essentially that meant coming with, ahem, tax plans that were cutting edge enough that the IRS hadn't seen them yet but that on the face of it resembled something that had in the past gotten an official OK, either through a regulation or some court decision. That would be enough to get a law firm to write a letter saying it was their opinion this was OK, no matter how much what was being done might sound, to the uninitiated, to be questionable or even illegal. Incidentally - on the rare occasions when the firm came up with a scheme on its own, it was the job of its advisers (i.e., accounting firms and law firms) to get the client to make sure that whatever changes were necessary to keep things on the right side of the blurry line were made.



Co. 2 took more the pussycat approach with the IRS. They seemed to feel that if they didn't push too hard, they'd avoid a lot of hassle from disputes with the IRS. They were, of course, right, and it cost the Big 6 accounting firm, but then the Big 6 accounting firm wasn't exactly losing money on this client so it was happy to oblige.



In other words, accounting firms are like criminal attorneys - they represent the client and try to do what their client believes is in their best interest. They advise their client when they think their client has taken a suboptimal turn, but when the client wants to do X, if its not explicitly illegal, the firm finds a way to make it happen.



All of which is to say, if the allegations that came out last week about Lehman's accounting schemes are true, and if as those stories indicate, Lehman was forced to find a non-American law firm to sign off on what they were doing, one of the following must be true:

a. Ernst & Young personnel working on the account had no idea what Lehman was doing.

b. E & Y personnel working on the account knew what Lehman was doing (perhaps having peddled the scheme to Lehman themselves) but had no idea it was an obvious no-no to the IRS.



Either way, it looks to a casual outsider like me that E & Y had a B-team made up of PONIs (partner of no importance) on the job, and that should have been obvious to Lehman. Now Lehman should have been a big enough client to warrant a few POGIs (partner of great importance). If Lehman did not seek out out or deliberately avoided the best possible representation, they were guaranteeing an eventual disaster. Deliberate ignorance or deliberate evasion (the allegations would imply one of these two to be true) of the law doesn't go over well when the doo-doo hits the fan.



But it goes the other way too. E & Y's POGIs should have realized that Lehman's business model involved taking big risks. Why would they have assumed that Lehman was going to be satisfied with orthodox accounting practices? And as the old saying goes, you don't send a boy to do a man's job. The Anderson/Enron debacle is a clear demonstration that if some partners certify a client's shenanigans, and those shenanigans come to light, the entire firm will take a hit. (And that, of course is the flip side of everyone benefits from the shenanigans as long as they haven't been forced to a complete halt.)



So, what do you think about the situation?



Cactus

by Rdan (noreply@blogger.com) on March 15, 2010 12:31 PM

American Conservative Magazine considers who is feeling the the new anger against 'liberals' from the Feb.17 Mt. Vernon statement of the Conservative statement of principles:

One of the things that many people have noticed since the release of Mount Vernon statement on Wednesday is the sharp contrast between the youth of the creators (my link) of the Sharon statement and the notable absence of students and young people from the latest gathering. Christopher Buckley quotes Sam Tanenhaus on this point, “The new/old submission seems more like Geriatrics Against Obama.” Fifty years ago, one could have written, as Nile Gardiner does today, that “conservatism is the future” with some reason for believing the claim to be true, and in the decades that followed there was a significant conservative political coalition that seemed to be growing in strength over time. Today it is increasingly difficult to believe anything of the kind.

....

On average, Millennials’ underlying social and political views put them well to the left of their elders. If you dig into the full report, you will see that the recent Republican resurgence owes almost everything to the dramatic shift among members of the so-called “Silent Generation,” whose voting preferences on the generic ballot have gone from being 49-41 Democrat in 2006 to 48-39 Republican for 2010. There have been small shifts in other age groups toward the Republicans, but by far it is the alienation of voters aged 65-82 that has been most damaging to the Democrats’ political strength*. As we all know, these are the voters who are far more likely to turn out than Millennials, which is why Democratic prospects for this election seem as bad as they do even though the Pew survey says that Democrats lead on the generic ballot in every other age group. Among Boomers, Democrats lead 46-42, and among Gen Xers they barely lead 45-44. In other words, the main reason why the GOP is enjoying any sort of political recovery is that many elderly voters have changed their partisan preferences since the last midterm. Republicans remain behind among all voters younger than 65. That does not seem to herald the future revival of movement conservatism of the sort Gardiner is so embarrassingly praising.

by Rdan (noreply@blogger.com) on March 14, 2010 10:15 AM

The loss of everything after 2004 is temporary — things are still being imported into wordpress.com. It should be complete before tomorrow afternoon.

by Kevin on March 13, 2010 10:03 PM

To be sure, the U.S. government deficit is shocking; but it's not anymore shocking than the recession through which we have all lived. Tax receipts plummeted (see the second chart from this post) and spending on cyclical social programs (like unemployment benefits) is surging. This adds up to an exponentially rising budget deficit, and thus an increasing debt burden.



The resulting hysteria leads to headlines like that from Reuters on March 11, 2010: "Fed's Dudley: Waiting to fix fiscal problems risky".



Be very careful when reading these articles, as the title implies that William Dudley, president of the New York Federal Reserve Bank, is advocating "fixing fiscal problems" right now - cutting spending and/or raising taxes now - while that is not the case at all. According to Reuters, Dudley says:

The issue, Dudley said, is not fiscal stimulus, which he noted had been necessary in the United States to stabilize the economy, even though it drove up the deficit. That spending is temporary, he added. The bigger long-term problem for the United States and other advanced economies is structural deficits -- those likely to persist absent changes in tax and spending policies.

A link to Dudley's speech. He does refer to structural deficits that may result from recent countercyclical policy. However, these long-term structural deficits have essentially nothing to do with the current downturn, in my view. In fact the effects of the current deficits are simply a speed bump on the road to structural indebtedness.



Just look at the CBO's extended-baseline projection for the long-term budget published in June 2009.



This above scenario projects the spending share on social security, Medicare and Medicaid, and Other Federal Noninterest Spending through the medium and long term under current law. Notice the blip that is 2009 and 2010?



What is key to this outlook is the assumption on economic growth and productivity trends (among others, of course!). GDP is assumed to grow an average 2.2% per year. I didn't delve into this full report and conduct a full alternative scenario test. But it is pretty clear that GDP growth of anything less than 2.2% (on average) - holding all else equal, of course - would have a deleterious impact on the outlook for government financing.



Japan provides a perfect case study of what not to do when the economy is recovering from a financial crisis: raise taxes too soon. You do that, and the probability of a "lost decade" rises quickly. You suffer a lost decade, and the outlook on the structural budget looks a lot worse than that illustrated above.



Marshall Auerback has argued time and time again that the government should run deficits until private saving adjusts so that the economy can stand on its own two feet, i.e., grow. As long as the currency floats and is fully convertible, the government's debt burden will not become a solvency issue. Hence, his interview titled fighting deficit hysteria.



I would say, rather, that the deficit hysteria is appropriate, but very much misallocated intertemporally toward the short-term outlook.



Part II coming to a post near you!



This article is crossposted with News N Economics

by Rebecca Wilder (nontruths@gmail.com) on March 13, 2010 09:12 PM

We are moving hosts. In a day or two, you should see the same blog with a slightly different look.

by Kevin on March 13, 2010 08:03 PM

Since we are on the topic of men, business, and regulations, Yves Smith points us to a relevent avenue for thought:



Indefensible Men.

by Rdan (noreply@blogger.com) on March 13, 2010 04:09 PM

On the right is a poll put up by the San Francisco FED that I translated to here. I personally use cash and checks to monitor my emotional response to spending, which can become numb using all credit card purchases. Online payments work if not automatic. Then again, I don't use a lot of checks.



Business accounts (sole proprietorships) I treat differently. Quirky behavior which works for me.

by Rdan (noreply@blogger.com) on March 13, 2010 01:58 PM

Rdan here...Our loyal opposition Reader Sammy sends along this in your face question:



Regulators could have prevented AIG collapse. Really?



Say what you want about AIG, and it is pretty much open season on them, but just prior to their collapse, AIG was:



1) The largest insurance company in the US, in the business of assessing risk.

2) One of less than 10 companies rated AAA

3) A member of the Dow 30 Industrial Average.



So you think some Insurance Examiner could have foreseen the risk that eluded all the rating agencies, and all the counterparties (including Goldman) and prevented it? As Seth and Amy would say on Saturday Night Live: "Really?"



Even though SEC regulators allowed Bernie Madoff's ponzi scheme to continue for 20 years, even after they were tipped off?



Not even to mention that what brought AIG down was not underwriting risk, but collatoral posting covenants buried deep in the documents.



I can imagine the conversation:



Brilliant Civil Service Examiner (circa 2003): "Mr. Greenburg it looks like you have a dangerous amount of exposure in CDS, if housing prices decline, or you get downgraded, you will have to post immense amounts of collatoral. I'm going to recommend to my superiors that you to cease and desist"



Greenburg: "Hey Frank (Catalano), fire up the Cray and show the Examiner your simulations. I am sure he will be more than satisfied. If not he should direct further questions through the offices of Sens. Dodd and Schumer, or maybe Bush and Obama."



Some bureaucrat could have sounded the alarm? "Really?!"



Reader Sammy asks.

by Rdan (noreply@blogger.com) on March 13, 2010 01:50 PM

Robert Waldmann



Jonathan Chait has a very good article on Paul Ryan in The New Republic. In it he displays striking confusion on simple arithmetic.





It's worth keeping in mind that the current tax system in this country is only very slightly progressive. State and local taxes are regressive, federal taxes are somewhat progressive, and the net effect redistributes income, very slightly, from the rich to the not-rich:



It is true that the tax system is only very slightly progressive. It makes no sense to talk about whether the tax system redistributes income from the rich to the non-rich. The tax system redistributes income from the rich and the non-rich to the public sector. To assess redistribution from the rich to the non-rich one has to look at what the public sector does with the money. Even if one assumes that the public sector provides no valuable services (not I think Chait's view or even, for that matter, Ryan's) much of the money is sent right back as old age pensions, disability pensions and some more as unemployment insurance, housing vouchers, and even a tiny bit of TANF,







The standard model of redistribution used by lazy economists is a flat tax which finances an equal grant to all citizens. According to Chait, there is no redistribution since the tax code is not progressive at all. It is not very hard to calculate what the effect of the public sector on income inequality would be if pre-tax and transfer income were unaffected by taxes and transfers (this is not an interesting calculation but it isn't very hard). Here one finds a much larger effect of the central government tax and transfer system in Europe than in the USA even though the US federal tax system is more progressive. The amount of redistribution has a lot to do with the scale of taxes and transfers and, across developed countries, very little to do with progressiveness.



Chait should check with his fan Matt Yglesias who vastly overstates the importance of this simple fact.



Speaking of whom, a commenter recently wrote that Yglesias was “mathematically illiterate.” I was puzzled and replied that I thought he was very good with numbers. I'm not going to search through threads to find the exchange and so just let me apologize here. After reading this



"three countries in Western Europe (Sweden, France, Denmark, and Austria)"



I must admit that I was wrong.



By the way, I remain wildly enthusiastic about increasing the progressivity of the US tax code. This is partly because I am partisan and increased progressivity is very popular. It is also partly because, other things equal, increased progressivity implies increased transfers from the rich to the poor. It's just other things aren't zero.

by Robert (noreply@blogger.com) on March 12, 2010 11:56 PM

by Rdan (noreply@blogger.com) on March 12, 2010 09:18 PM

But I’m more hopeful now that health care reform will pass than I’ve been at any time since December. Intrade was trending steeply upward last I checked. I’m still trying to figure out how the Democrats will snatch defeat from the jaws of victory.

by tgirsch on March 12, 2010 08:35 PM

From here:

Ted Says:

March 12th, 2010 at 10:02 am

@34: Clearly, Shooter is a Randian.

The Lord of the Rings, and Atlas Shrugged, are two books you can give a 15-year-old kid that’ll change his life forever. One will draw him into a fantasy world where people who are losers in real life can become heroic captains engaged in a timeless, righteous struggle against evil. The other is about orcs.

by Kevin on March 12, 2010 04:21 PM

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" - and to persistently mispronounce his name, putting the accent heavily on the first syllable.



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.

UPDATE: Via commenter Judd, they’ve actually interviewed the artist now.

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

By Michael Reagan -- Anyone that knows my politics understands that I consider myself pro-life; however, as I have written often, I also recognize that millions of Americans feel differently than I do and that we must continue to respect each other as Americans even though we share this fundamental difference of opinion.

March 19, 2010 01:12 PM

By Michelle Malkin -- If you cannot trust government's numbers, you cannot trust government's words. This is the lesson of the House Democrats' desperate promotion of a phony-baloney Congressional Budget Office analysis of their latest health care takeover package.

March 19, 2010 01:12 PM

By Frank Salvato -- As the American people stare down the barrel of a Progressive ideological coup in the form of the institution of so-called "healthcare reform," it is tremendously important that we take heed of how Progressive Democrats are going about achieving their long sought-after goal. To be succinct, it has been an ugly and often times unconstitutional process.

March 19, 2010 01:12 PM

By David Limbaugh -- I pray that President Barack Obama's interview with Fox News' Bret Baier is replayed repeatedly on Fox News Channel and circulated widely on the Internet for all to see. The more who watch it the more people will realize just how drastically the unscripted Obama varies from his projected image as God's gift to bipartisanship, compromise, congeniality and democracy.

March 19, 2010 01:12 PM

By Christopher G. Adamo -- As the nationalized "Healthcare" debacle nears its end game, the people of America are increasingly shocked and disgusted by the raw ugliness of the Obama "governing" philosophy. Those platitudes of "hope and change" are gone, and in their place a thoroughly regretful American populace now witnesses, to its horror, the total desecration of this once triumphal constitutional republic.

March 19, 2010 01:12 PM

WASHINGTON (AP) - Historic health care change in the balance, Democrats plowed fresh billions into insurance subsidies for consumers on Thursday and added a $250 rebate for seniors facing high prescription drugs, last-minute sweeteners to sweeping $940 billion legislation headed for a climactic weekend vote.

March 19, 2010 01:08 PM

CARSON CITY, Nev. (AP) -- U.S. Sen. Harry Reid said Thursday he's proud of what he's accomplished during four terms in the Senate, and he challenged critics and opponents who say he's lost touch with Nevada.

March 19, 2010 01:08 PM

WASHINGTON (AP) - President Barack Obama promised to make overhauling the immigration system a top priority in his first year as president. He's now in Year Two, and the odds that he'll get to sign a bill before the November midterm elections appear long.

March 19, 2010 01:08 PM

WASHINGTON (AP) -- In seeking enough votes to overhaul the nation's health care system, President Barack Obama is telling nervous Democratic lawmakers that their political fates are linked to the bill's passage, discouraging the notion that they can save themselves by opposing it, House members say.

March 19, 2010 01:08 PM

WASHINGTON (AP) -- President Barack Obama has postponed his trip to Asia until June so he can stay in Washington for a possible vote Sunday on his health care overhaul.

March 19, 2010 01:08 PM

MOSCOW (AP) - Top international diplomats on Friday called on Israel and the Palestinians to return to peace negotiations with a goal of reaching a final settlement that would create an independent Palestinian state within 24 months. They reiterated their condemnation of Israel's latest move to add Jewish housing in disputed east Jerusalem but did not escalate criticism of the Jewish state.

March 19, 2010 01:08 PM

WASHINGTON (AP) - High-income families would be hit with a tax increase on wages and a new levy on investments under President Barack Obama's health care overhaul bill.

March 19, 2010 01:08 PM

WASHINGTON (AP) - President Barack Obama, facing criticism from advocates of immigration reform, pledged Thursday "to do everything in my power" to get immigration legislation moving in Congress this year.

March 19, 2010 01:08 PM

DENVER (AP) -- Colorado abortion opponents say they have enough signatures to put an abortion-ending proposal on the ballot this fall -- potentially the first state this election year to see the question.

March 19, 2010 01:08 PM

Moody's Warns U.S. Sinking into Financial Abyss



“A national debt, if it is not excessive, will be to us a national blessing.” —Alexander Hamilton.



Not even Alexander Hamilton would support today’s national debt. When the nation’s system of perpetual, permanent debt was enacted, it provided, according to American Public University’s History Central, “that the debt be funded by reissuing bonds to be paid back in full after 15 or 20 years. Thus, rather than eliminating the debt, Hamilton's plan created a large, permanent public debt, issuing new bonds as old ones were paid off. Congress approved this proposal.”



More or less, that’s the system that still exists today. Paying off the principal on the national debt is done almost entirely by the issuance of new Treasury bonds. And, per Hamilton, “if it is not excessive,” can be indispensable — in times of war, for example.



For now, the nation is able to sell new bonds to pay off the old. Since the national debt has grown every single year since 1958, however, that means annually, for more than 50 years, more bonds have been sold than have been paid back. This has thus resulted in a net increase of the debt every year, even when Congress supposedly “balanced” the budgets in 1969 in and in 1998.



Interest servicing the debt, on the other hand, comes out of revenue. This is where it gets interesting — and downright scary. The U.S. is about to max out its credit card while barely keeping up with its minimum payments servicing the nation’s gargantuan $12.4 trillion mountain of debt. Yesterday, Moody’s Investors Service again warned the U.S. that it is “substantially” closer to having its credit downgraded.



As reported by Fortune’s Chris Barr, “interest payments on general government debt -- combining the federal government with the states -- could rise above 10% of revenue by 2013... That's the level at which the rating agency typically considers a downgrade. Moody's said debt affordability is the key factor to consider in ratings decisions, because debt costs are apt to constrain policymakers…”



This is a critical point. Why? As reported by Bloomberg’s Matthew Brown, “Financing costs above 10 percent put countries outside of the AAA category into a so-called debt reversibility band, the size of which depends on the ability and willingness of nations to reduce their debt burden by raising taxes or reducing spending. The U.S. has a 4 percentage-point band…”



That does not leave that much wiggle room — at all. Barack Obama and Congress are pushing the maximum limits of the full faith and credit of the nation, violating Hamilton’s admonition of an excessive national debt burden. By 2013, according to the White House, the debt will top 100 percent of the Gross Domestic Product.



Just how bad is this scenario? Per Brown, just 0.5 percent less economic growth, higher-than-expected interest rates, and “less fiscal adjustment” each year below Moody’s projected baseline assumptions would result in the U.S. “paying about 15 percent of revenue in interest payments, more than the 14 percent limit that would lead to a downgrade to AA, Moody’s said.”



Making matters even worse, the Congressional Budget Office (CBO) estimates that interest as a percent of revenue will top 14.8 percent as soon as 2015. That year, $520 billion interest will be owed with a projected $3.504 trillion in revenue, according to the CBO. By 2020, that number rises to 20.7 percent: $916 billion owed with projected revenue equally $4.417.



For our uninitiated readers, that’s bad. Really, really bad. Within five short years, the nation will rocket past the 14 percent interest-owed-to-revenue credit limit imposed by Moody’s. And that’s assuming that U.S. treasuries sell splendidly. That there is no run on the dollar.



But, by the government’s own data and Moody’s stated warning, a debt downgrade now appears all but certain. This is an emergency, but it is not being treated as such. Treasury Secretary Timothy Geithner promised to the American people that this would not happen. He said a debt downgrade “will never happen to this country.” Really? Was that an accurate assessment of the increasing risk of sovereign debt default in the U.S.? Surely he must have known what the criteria for keeping the nation’s Triple-A credit rating was. If he didn’t, he should be fired. If he did know, he lied, and should be subpoenaed. And fired.



All this time, the nation has been sold a bill of goods that deficit-spending and monetary easing were absolutely necessary to “save” the economy. But now that Congress, the Treasury, and the Federal Reserve have done so, the risk of sovereign default looms ever-closer. What has been gained exactly?



A debt downgrade would almost certainly mean higher interest rates, higher tax rates, and an overall weaker economy. In turn, there would be less jobs and, since the nation depends on both individual and corporate income taxes, that will mean less revenue. All of which will further deteriorate the American people’s ability to keep up with servicing the debt.



In other words, the slightest economic hiccup — in commercial real estate, basic housing, education, energy, or elsewhere — could result in the nation’s finances being devastated almost immediately. Even worse, if the Obama budgets are enacted as proposed, within five years, the nation’s finances will be devastated, per the CBO’s data and Moody's warning.



Think the CBO is exaggerating? By the White House’s own projections, the percentage of interest-owed-to-debt will top 14.7 percent, not in 2015, as the CBO projects. But in 2014, a full year sooner. That year, according to the Office of Management and Budget, interest owed will total $510 billion versus $3.455 trillion.



Juxtapose Moody’s warning yesterday with reports that the Social Security Administration (SSA) has now begun cashing in its $2.5 trillion in treasuries. As reported by the AP’s Stephen Ohlemacher, “For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year. Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.” Making matters worse, as Social Security cashes in its treasuries, the only way for the government to pay for them will be to… issue more treasuries! That would mean that another $2.5 trillion would be piled atop the national debt.



These IOU’s have been piling up for years, and now that the Social Security is finally in the red, the SSA is cashing them in to keep the payments moving. However, by 2037, if not sooner, it is projected that the Social Security will run out of those IOU’s. It will be completely bankrupt.



For now, the nation is able to pay off the principal owed on the debt through the sale of more treasuries. But because that debt is now so excessive, government entitlement programs are now in the red, and credit rating agencies are already firing warning shots across the nation’s bow, it is now much riskier. Markets will now begin demanding higher yields on that debt.



Hamilton may have supported the creation of a perpetual debt, but nowhere did he ever propose, as a matter of policy, that the nation contract debt far beyond the nation’s ability to pay for it. This is beyond excessive. This is suicidal. That sinking sound you hear is the Ship of State being fully plunged into the bottomless Abyss.



SOURCE



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



The Human Costs of Big Government



President Obama recently informed a crowd of young people — to thunderous applause — that under his health care plan, they could stay on their parents’ coverage till age 26. Voters 18-21, of course, went for Obama by a 2-1 margin, but given that he is a ‘post-partisan’ president, we can’t chalk that up to politics, now can we?



Obama-care proponents contend that his proposal is only an option and not a mandate (though a handful of states have enacted mandates). But then so are junk food and cigarettes, and no one hesitates to address their dangers. Under our Constitution, whether or not parents choose to provide coverage for their grown children is not the concern of President Obama. As columnist Mark Steyn has noted, however, the details of Obama-care pale in importance next to the overall concept of nationalizing yet more of our private lives. Forget the minutiae for a moment and consider our culture.



Public debate almost always concerns the practicalities and economics of Nanny-state activism. Seldom considered is that the human toll of engendering dependency can be measured in fatherless households, lack of initiative and prolonged adolescence.



Numerous sociological factors can probably explain why fifty years ago a 26 year-old was an adult, long independent, with a stable job and an intact family, whereas today, 26 is practically late childhood. Still, policies that keep young people dependent on their parents (via the government) do not instill self-discipline or allow the confidence and self-satisfaction derived from taking care of yourself for the first time. The Great Society and the welfare-state must bear some of the blame. Diana West, in The Death of the Grown-up (2007) details how Italy’s highest court ordered the estranged father of a thirty year-old to pay his son roughly $1000 a month until he found a job that “fit his aspirations.” The son had a law degree, but the court ruled that a parent’s duty of maintenance did not end with adulthood. According to West, to no great surprise, more than a third of Italians over thirty still live at home with their parents. Still, such an outrage could never happen here.



Or could it? The drip-drip accumulation of big-government policies nullifies our better natures. And political correctness and radical feminism have wussified many American males. Teenage girls in Seattle recently beat one of their own senseless while a group of security guards watched. Where was law enforcement, everyone asked, when the pertinent question was where were the MEN? Iowa, responding to public outrage, recently passed legislation to keep underage girls from performing in strip clubs, reversing a controversial court decision (which deemed stripping an ‘art’). Why, in 2010, was this even an issue? Men used to protect the safety and chastity not only of their own daughters but of all girls. Today, young women depend on the fickle nature of court rulings, not as a last line line of defense, but often as their only option.



Each tier of Nanny-state activism is easier to write off than the one before it. Patriots tend to save their big guns (figuratively speaking, of course) for the most outrageous abuses of federal encroachment. By then, we have accepted most of their premises and are just arguing the practicalities. In public debate, compassion and emotion tend to trump reason and tough love, but if the left wants to advance their agenda on grounds of compassion, perhaps they can show us their humanitarian reasons for Euro-fying American and denying citizens their sense of freedom and self-sufficiency. The hard facts of Obama-care are public record, but only by speaking to the unlimited potentials of our citizens will they really grasp what is on the line.



SOURCE



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



ELSEWHERE



Will the jobs bill create any jobs?: "On Wednesday, the Senate passed a $17.6 billion spending bill. It needs only President Obama’s signature to become law. The hope is that the new spending will create jobs. But hope is not the same as reality. Remember: anything that Washington giveth, it must first taketh away from somewhere else. This jobs bill is a zero-sum game. All those new jobs that politicians will be showing off for the cameras will have come at the expense of other jobs elsewhere. On net, they’re not creating a thing.”



Get ready for increased taxes: "I’ve noted any number of times that government taxes comprise 14% of the national income and government spending is at 25% of the national income. That’s as high as its been since WWII I believe. The point, of course is there are three obvious choices here — cut spending to the income level (and beyond, really, if you plan on paying off debt) or increase taxes to the spending level (and beyond, again, if you plan on paying off the debt) or a combination of both. Watching this current administration, it appears option two is in the works. Lots of lip service about ‘unsustainable’ spending, etc., but the only movement I’ve seen is legislation that increases that. And, also, plans to increase taxes.”



WA: Walgreens says no more new Medicaid patients: "Effective April 16, Walgreens drugstores across the state won’t take any new Medicaid patients, saying that filling their prescriptions is a money-losing proposition — the latest development in an ongoing dispute over Medicaid reimbursement. The company, which operates 121 stores in the state, will continue filling Medicaid prescriptions for current patients. In a news release, Walgreens said its decision to not take new Medicaid patients stemmed from a ‘continued reduction in reimbursement’ under the state’s Medicaid program, which reimburses it at less than the break-even point for 95 percent of brand-name medications dispensed to Medicaid patents.”



Israeli aircraft strike Gaza: "Israeli aircraft attacked at least six targets in the Gaza Strip early today, the day after a rocket fired from the Palestinian enclave killed a Thai worker in Israel as Baroness Ashton of Upholland, the EU’s deputy foreign policy chief, was visiting the blockaded territory. Two civilians were wounded in one of three attacks on smuggling tunnels along the border with Egypt. The other targets included two open areas in Khan Younis and a metal foundry near Gaza City. An Israeli military spokesman confirmed six sites had been targeted, including two tunnels dug near the Israeli border fence and a weapons manufacturing site, and added "direct hits were identified." The rocket attack, from a radical Palestinian group with suspected ties to al-Qaeda, was the third in 24 hours, but the first deadly attack from Gaza at Israel in more than a year."



Scott Brown effect: Is Boxer’s seat next?: "The dramatic shift in poll numbers in the California Senate race — a surge for former US Rep. Tom Campbell for the GOP nomination and a double-digit drop for Senator Barbara Boxer (D) since January — has serious national implications, according to political analysts. A California Field Poll released Thursday shows Mr. Campbell running ahead of businesswoman Carly Fiorina by six points and Assemblyman Chuck DeVore by 19 points among likely GOP primary election voters. Perhaps more important, say analysts, is that more voters now have an unfavorable than favorable view of the incumbent Ms. Boxer, and she is essentially tied when matched against Campbell (44 to 43 percent) or Ms. Fiorina (44 to 45 percent). Poll director Mark DiCamillo told the Sacramento Bee that ‘the tenor of political discourse’ has clearly changed in California since Republican Scott Brown registered an upset victory in the Massachusetts Senate race in January. Others agree.”



Warships blasting Somali pirates out of water: "An international fleet of warships is attacking and destroying Somali pirate vessels closer to the shores of East Africa and the new strategy, combined with more aggressive confrontations further out to sea, has dealt the brigands a setback, officials and experts said Thursday. The new tactics by the European Union naval force comes after Spain— which currently holds the EU’s rotating presidency, and whose fishing vessels are frequent pirate targets — encouraged more aggressive pursuit of pirates and the coalition obtained more aircraft and other military assets, said Rear Adm. Peter Hudson, the force commander.”



Chaffetz wants to “ferret out” federal workers with unpaid taxes: "Working for Uncle Sam comes with some great perks, like job stability, posh benefits packages, and in many cases, average salaries that are higher than what the same job pays in the private sector. That’s why Republican Rep. Jason Chaffetz, R-Utah, is irked that nearly 100,000 civilian federal employees owe the IRS $962 million in back taxes. He thinks they should pay up or be fired.”



IKEA, Sweden & the inheritance tax: Lessons for the US: "America sits at the same economic crossroads today that Sweden faced five years ago. Sweden’s experience in eliminating the death tax could help the United States save businesses and add jobs at a critical time. Once known as Europe’s socialist paradise, Sweden still has one of the world’s highest top income tax rates (57 percent). But like the US, it no longer has an inheritance tax, or what Americans commonly refer to as the estate or ‘death’ tax. The Swedish Parliament abolished its inheritance tax in late 2004. … The country’s entrepreneurs were moving offshore — and taking their companies with them. The death tax was only making a bad situation worse.”



Corruption on the British Left: "The union behind the British Airways strike has received £18million from taxpayers under Labour, The Daily Telegraph can disclose. Unite, and the two unions that formed it, received the public money under two little-known funds to improve management and training for its members. It has been the biggest beneficiary of one of the schemes, the Union Modernisation Fund, and received a sixth of all the money given out under the Union Learning Fund. The figures have led to fresh claims that Britain’s biggest union has taken over the Labour Party after donating almost £30million over the past decade and employing a key adviser to Gordon Brown as its political director. It comes ahead of a planned three-day walkout by Unite members of BA’s cabin crew this weekend, which is set to cause travel chaos for thousands of passengers. Francis Maude, the Shadow Cabinet Office Minister, said: “This really looks like money laundering - taxpayers' money is being funnelled into Unite then put straight back into Labour's coffers. “It's a real racket, with taxpayers' money being round-tripped into Gordon Brown's re-election fund. We must have much greater transparency on what unions are receiving from the Labour Government in return for their backhanders.”



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 19, 2010 11:51 AM

NutsI don't know what it will take to turn the Democrats away from the abyss. After a year of non-stop debate, Americans hate health care reform more than ever with the latest Fox News poll showing a 20% gap (!). The approval rating for Congress couldn't buy a six-pack of beer. And Obama's approval rating has now tipped into the red.James Taranto sees it too: "Dems pushing ObamaCare look

by Eric (noreply@blogger.com) on March 19, 2010 02:36 AM

by Hal_10000

The CBO has scored the new Healthcare bill and concludes:

According to a Democratic source, CBO has finished its work and will release the official preliminary score later today. But here are the basic numbers: The bill will cost $940 billion over the first 10 years and reduce the deficit by $130 billion during that period. In the second 10 years—so, 2020 to 2029—it will reduce the deficit by $1.2 trillion. The legislation will cover 32 million Americans, or 95 percent of the legal population.

It bears repeating, because the thick-headed Left can’t get this, that the CBO scores the bill they are given.  So the CBO has to take vague promises to reduce spending and cut waste as though they were actually going to happen.  In past analyses (and I’m sure in this one), the CBO has very sharply warned that spending control is fantastically unlikely.  But the new numbers may be enough to persuade Democrats who are on the fence.

(I have also been reading that the Democrats are putting their overhaul of the student loan system in the HCR bill, which is supposed to save billions, in order to increase the “savings”.  Given that I’m dubious the student loan bill will save money, I am unimpressed.)

In another interesting development, we have yet more evidence of the existence of the Religious Left.  The Catholic Nuns have endorsed healthcare.  I am not surprised at all.  One of the great untold stories of religion and politics is heavy leftward tilt of many religious people, especially those in official positions.  A colleague who was taught in catholic schools told me, “The nuns were all socialists”.  So this endorsement doesn’t surprise me.  I expect will see more of the Religious Left try to plug God into the HCR equation.  And I expect the same people who scream bloody murder every time the Catholic Church speaks out about abortion to stay utterly silent on this one.

On the flip side, the Massachusetts state treasurer has warned that Romneycare, the predecessor of Obamacare, is bankrupting the state.

The Massachusetts treasurer said Tuesday that Congress will “threaten to wipe out the American economy within four years” if it adopts a health-care overhaul modeled after the Bay State’s.

Treasurer Timothy P. Cahill – a former Democrat running as an independent for governor – said the local plan enacted in 2006 has succeeded only because of huge subsidies and favorable regulatory changes from the federal government.

...

He also gave reporters a copy of a recent state ledger sheet, showing the state’s Medicaid program ballooning from $7.5 billion to a projected $9.2 billion since the plan was adopted. Meanwhile, of the 407,000 newly insured, only 32 percent paid for private insurance wholly by themselves.

The remainder have received partial or total taxpayer subsidies to buy the insurance coverage required by the plan.

...

Cahill’s comments came as the administration launched three days of hearings on rising health care costs in Massachusetts that threaten the 2006 law.

Patrick said the state has to come up with ways to ease the burden of soaring premiums on struggling businesses, individuals and families. Insurance premiums in Massachusetts rose more than 12 percent over a two-year period.

But doesn’t he care about the poor uninsured?

So what do we do if this passes?  Unelecting the Democratic Congress is a first step.  But the bill will not be repealed while Obama is in office.  And, even if the GOP manages to retake the White House in 2012 (a prospect I deem very unlikely), it is very unlikely they will have the numbers to get it repealed, especially once it’s been entrenched for 2-6 years.

The best step to take would be to massively overhaul the insurance mandates to make it easier for people to buy high-deductible insurance and to break the employer-insurance connection, as the Wyden-Bennet bill proposes.  I have my issues with Wyden-Bennet, but it’s far superior to Obamacare.

My worst fear is this will pass, the Republicans will get elected and then proceed to make it far far worse.  As we’ve seen with Charlie Crist, the GOP likes the new spending and is fine with the pre-existing condition ban.  What they oppose is the coverage mandate, which is the only think that keeps the pre-exisiting condition ban from bankrupting the insurance companies.  The also oppose the taxes, which is the only way to pay for the subsidies. That’s a recipe for an even bigger fiscal and regulatory catastrophe.

Update: On a related note, we have yet more evidence of the idiocy of Nancy Pelosi.  She’s been claiming that HCR is really a “jobs bill” because it will create four million jobs.  Because we all know how less money flowing into a sector of the economy creates jobs.  An analysis from Americans for Tax Reform says its more likely to cost a million jobs.  Given our experience with taxes, regulation and the economy, ATR’s analysis sounds much better than the left-wing CAP’s analysis.

Update: I just found out that the CAP study on jobs was authored by David Cutler, who has been employed by the Obama Administration as a healthcare consultant.  Nice objectivity there.

March 19, 2010 12:54 AM

by AlexinCT

Obama has finally been given something other than the usual fluff stuff interview he has been getting away from the MSM for the past 2 years, and it is no surprise it happened to be done by Fox News (video1, video2). He finally sat down with a reporter that was interested in the facts, and Bret Baier grilled his ass. We finally got to see the great orator at work when he wasn’t being handed some softballs by people that get tingles in their legs about him, and Obama, in addition to getting pissed he was not being allowed to just skirt questions with stupid and meaningless talking points, scored, as I expected, a clear F- with his idiotic answers.

President Obama is not worried—and doesn’t think Americans should worry—about the “procedural” debate over whether House Democratic leaders should go ahead with a plan to approve health care reform without a traditional vote, he told Fox News on Wednesday.

After all, he is not worried that the stupid American people are worried that this government healthcare takeover bill is a disastrous thing that will not only bankrupt the country, but also drastically alter healthcare coverage quality and access downward, and costs, directly or indirectly, upwards, for most people that already have healthcare. His concern seems to be with scoring the historical legacy for being the guy that fundamentally changed America from an exceptional nation to a has-been. After all, the American people are too stupid to know what’s best for them according to democrats. Technicalities, and especially rules, should stop the left’s agenda. The rules are not for them.

The president, in an interview with Fox News’ Bret Baier, responded for the first time to the controversy over a plan to use a parliamentary maneuver to allow the House to pass the Senate’s health care bill without forcing members to vote for it directly.

The issue isn’t the maneuver, Mr. President: the issue is that the maneuver is being used to clearly obviate a vote on an incredibly unpopular, costly, and destructive bill that would then stand no chance of passing if the vote was held on its own. And that’s because the American people have made it clear to democrats – whom hold clear majorities in both houses, have the executive pen on their side, and if they were so inclined to, could have passed this thing by party line without a glitch at any time if it was popular – that they don’t want this bill. Something, and I am not going to even bother arguing that I find this rule to be constitutionally questionable and that I feel it shouldn’t be used by either party, even when the votes for both bills lumped together is a given, that wasn’t ever done previously when this stupid parliamentarian maneuver was to lump two votes into one.

The esoteric procedure has drawn fierce protest from Republicans, who say Democrats are trying to avoid accountability. But the president said there will be no doubt about where lawmakers stand on health care reform.

The only reason they are doing this is because they know they can’t get the first vote to work, not because the first vote is a given, as was the case when this questionable maneuver was used before.

“I don’t spend a lot of time worrying about what the procedural rules are in the House or Senate,” Obama said. “What I can tell you is that the vote that’s taken in the House will be a vote for health care reform. And if people vote yes, whatever form that takes, that is going to be a vote for health care reform. And I don’t think we should pretend otherwise. And if they don’t, if they vote against it, then they’re going to be voting against health care reform and they’re going to be voting in favor of the status quo.

No Mr. President, if they vote against it, they are doing what their constituents want them to do. Last I remember these bastards were supposed to represent their constituents, not the will of the democratic party and its hard core collectivists block. And that’s what is behind this maneuver in the first place. If there wasn’t such massive opposition to this bill there would be no argument. Your clear majority in both houses would have made this a done deal, no matter what the republicans wanted.

The tactic would allow members to temporarily accept the Senate version while keeping it at arm’s length.

Here is the gist of the problem. The democrats in the House don’t want anything to do with the Senate bill, for whatever reason, and any attempt to vote for it would fail, however, because they then don’t trust their leadership, said leadership is forced to use a trick to give the bill a chance in hell. Nancy Pelosi lives in fantasyland where collectivist idiots are the majority, and her seat is safe, but most of the rank and file democrats don’t, and they are all seeing the writing on the wall come the next election. Their choice is to vote for this and please the radicals and leadership, in the process angering and going against the wishes of their constituents with all that entails, or hope that they can hide behind this maneuver and claim they didn’t really vote for this monstrosity in the end. I have a feeling that this excuse will not hold much water either. Of course, they are damned if they do, and damned if they don’t, anyway. Their choice is to please their constituents and risk losing campaign funding – have no doubt queen Nancy will cut campaign funding for anyone that opposes her, and I guess that’s her prerogative – or go for the campaign funding and hope they get enough cash to buy off the angry mob. Cosmic justice, if you ask me for the way these democrats have behaved for so long.

Asked to respond to a viewer’s e-mail question about why he has to “bribe Congress to pass it,” Obama said, “I’ve got the same exact e-mails that I could show you that talk about why haven’t we done something to make sure that I, a small business person, am getting as good a deal as members of Congress are getting, and don’t have my insurance rates jacked up 40 percent?”

WTF was this? Doesn’t he see how he is undermining his own argument? Congress excluded itself from the effects of this moronic government takeover by exempting themselves from anything in this bill! Then various democrat congress men and women had to be bribed with massive lard to get them on board – wonder if these costs are also factored into the cost of this bill by the CBO – for this disaster, because they understood how damaging this thing was going to be to the country, their states, and to them personally.

People see this and complain about it, as this person asking why he didn’t get a sweet deal like congress, did. And Obama’s defense of the indefensible is that small business people that know they are going to get raped by the taxes government has to institute to help pay for their takeover plans, are asking him why he is allowing this disaster of a bill to go ahead? Why is it so hard for him to figure out that everybody except for democrat politicians and the freeloaders that are hoping to have others pay for their healthcare are against this bill? Or does he know that and simply not care?

Obama later added, “I’ve got to say to you, there are a lot more people who are concerned about the fact that they may be losing their house or going bankrupt because of health care.”

I am sure those people losing their houses because they don’t have a job, and much worse, can’t get one in this age of private sector hostile government, far outnumber those that lose their houses due to healthcare costs. But I don’t see Obama worrying about those people at all. Other than to give them lip service, that is. And I suspect that’s because the economics of creating non-government jobs doesn’t mesh well with his idea of fundamentally changing America into a third world collectivist shithole, which taking over healthcare at such an exorbitant cost that it will bankrupt the nation, does facilitate.

“And yes, I have said that this is an ugly process,” he said. “It was ugly when Republicans were in charge. It was ugly when Democrats were in charge.”

Except I still can’t find republicans pushing for this massive a government expansion that guarantees an economic collapse sooner than later, ever. At least Obama didn’t blame Bush for this too.

March 18, 2010 10:28 PM

By Thomas D. Segel -- When we wrote about the liberal political control of higher education there was not a single denial from any teacher organization or faculty group. The reason they remained silent is clear. The left to far left not only control the vast majority of the more than 4,000 degree granting institutions in America, they dominate the ranks of staff and faculty on those campuses. In some cases those of liberal political views are holding down more than 80% of the teaching positions.

March 18, 2010 01:10 PM

By Michael Barone -- The Democratic leadership's struggle to pass the Senate health care bill in the House looks like a great case study for political scientists. They have many examples of the leaders of a party majority trying to push controversial legislation through a balky chamber. But seldom have the political incentives of the party leadership and the party's members been so differently aligned.

March 18, 2010 01:10 PM

By LIsa Fabrizio -- And so it comes down to this: President Obama wants his signature healthcare reform bill passed this week, no matter what; whether or not the American people want it and whether or not his own party has the votes to pass it.

March 18, 2010 01:10 PM

By Miguel A. Faria, Jr., M.D. -- The final word from medical moguls and other pundits is coming out in full force on health care and medical journalism: Americans must be prepared, from the top down, to accept drastic medical and health care rationing. Why? Because "the establishment of the rational allocation of finite resources" (translate: the extensive rationing of medical services) will be desperately needed, if universal coverage, socialized ObamaCare medicine is to have a chance to work in this country.

March 18, 2010 01:10 PM

By Debra Saunders -- Another funny thing happened in what House Speaker Nancy Pelosi promised would be "the most ethical Congress in history." Monica Conyers, the wife of House Judiciary Committee Chairman John Conyers, pleaded guilty last year to a federal charge of conspiracy to commit bribery that prompted her to resign from the Detroit City Council last year. This month, she was sentenced to 37 months in prison.

March 18, 2010 01:10 PM

WASHINGTON (AP) - After a rousing campaign rally for New Jersey Gov. Jon Corzine last summer, President Barack Obama flashed a broad smile to an aide as he boarded his helicopter back to the White House.

March 18, 2010 01:05 PM

WASHINGTON (AP) - With the Mideast peace process stalled and U.S.-Israeli relations in crisis, Secretary of State Hillary Rodham Clinton headed Wednesday to a Mideast strategy meeting of top international diplomats.

March 18, 2010 01:05 PM

CIUDAD JUAREZ, Mexico (AP) - Elodia Ortiz drops her children at school in the morning, picks them up in the afternoon and makes an occasional trip to the supermarket. Anything else, she says, is too dangerous.

March 18, 2010 01:05 PM

WASHINGTON (AP) - Pushing toward a history-making vote, Democrats struggled to eliminate lingering complications standing in the way of House action this weekend on President Barack Obama's landmark health care overhaul.

March 18, 2010 01:05 PM

BOISE, Idaho (AP) -- Idaho took the lead in a growing, nationwide fight against health care overhaul Wednesday when its governor became the first to sign a measure requiring the state attorney general to sue the federal government if residents are forced to buy health insurance.

March 18, 2010 01:05 PM

COLUMBUS, Miss. (AP) - It may not bode well for Rep. Travis Childers that many voters in his rural Mississippi district have stronger opinions about President Barack Obama's health care plan than they do about the Democratic congressman.

March 18, 2010 01:05 PM

WASHINGTON (AP) -- Legislation approved by the Senate on Wednesday would significantly reduce the disparity in sentences handed out to those convicted of crack and powder cocaine charges.

March 18, 2010 01:05 PM

WASHINGTON (AP) -- The top U.S. commander in Afghanistan said Wednesday that it remains the goal of U.S. troops to capture Osama bin Laden alive and "bring him to justice."

March 18, 2010 01:05 PM

Leftist argumentation



I noted on Greenie Watch recently the low quality of Green/Left argumentation. Almost all of it is ad hominem abuse or appeals to authority. Any interest in the facts of a matter is conspicuously absent. I am sure that most conservative bloggers find the same in emails that they get from Leftists.



Just for fun, however, I thought I might put up here the latest such email that I have received from a Leftist. As per usual it is pure abuse and full of hate. It comes from an Allan Blackburn [tnewt@freeway.net].

I was reading your anti health care blog in America, when I came upon the fact that you are from Australia, have been married four times, and are about as redneck as they come. Please stay in Australia. If you are an example of someone who is professing to tell Americans how to live, with your value system as it is, where marriage is an institute of; "Love for the moment," please stay in Australia and focus your attentions on your own issues as well as your countries.



You remind me of Rush Limbaugh who has spread conservative hate mongering, against drug addiction, until he was caught engaging in illegal doctor shopping and then screamed; "I have a disease," and demanded the need to go to treatment which he denied to others for years.



They must have a mold that turns out people like you. Every fifth person, popping out of the womb, instant A-hole. Thanks for the laughs.

If that is an example of Leftist brains, no wonder America is in such a mess at the moment. I also note that even a Ph.D. who disagrees with him is a "redneck" apparently: A typical example of how Leftists use words for their abusive impact rather than their meaning.



Mr Blackburn is apparently in the business of "detoxing" druggies and alcoholics. One wonders if such a hate-filled and angry person is really appropriate in that role.



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Why Obama Is Unhappy



He's omniscient and benevolent. Doesn't he deserve to be omnipotent too?



Excerpt from JAMES TARANTO:



The latest effort to psychoanalyze President Obama comes from Fred Hiatt, editorial page editor of the Washington Post. Hiatt offers "a theory about why President Obama is having a tough political time right now: He doesn't seem all that happy being president."



But Hiatt gets it backward. Obama isn't having political difficulty because he's unhappy; he's unhappy because he's having political difficulty. Or, as the president himself put it in an Ohio ObamaCare speech yesterday: " The American people want to know if it's still possible for Washington to look out for their interests and their future. They are waiting for us to act. They are waiting for us to lead. And as long as I hold this office, I intend to provide that leadership. I don't know about the politics. But I know what's right."



He knows what's right. And he cares so much about the American people that he is determined to do what is right, whether we want it done to us or not. Yet he keeps coming up against delays and obstructions. Where's the fairness in that? If he's omniscient and benevolent, doesn't he deserve to be omnipotent too?



You can see why this is frustrating for the president. No one doubts what needs to be done for the people --no one, that is, except the people. They tell anyone who'll listen that ObamaCare scares them to death. They even voted a Republican into the U.S. Senate from Massachusetts!



An Independent Women's Voice poll of voters in 35 "key swing districts," all represented by Democrats, finds that 60% think Congress should scrap ObamaCare and either start over or give up entirely. A plurality say they'd be more likely to support their congressman if he voted for ObamaCare in November and against it now.



Obama knows what's right, and he keeps telling us, but we refuse to get the message. As a result, Jim Clyburn, the House majority whip, tells McClatchy Newspapers he's not sure ObamaCare will come to the floor before Easter. That suggests that he and other Democratic leaders are having trouble rounding up the 216 votes they need to pass the legislation. You can see why they would be, if they listen to their poor deluded constituents.



That's why President Obama is unhappy. The American people voted for change. Dammit, why won't we change?



SOURCE



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



The Worst Crisis in 35 Years?



by Daniel Pipes



On the surface, that the Obama administration decided one fine day to pick a fight with the government of Israel looks like an unmitigated disaster for the Jewish state. What could be worse than its most important ally provoking the worst crisis (according to the Israeli ambassador to Washington) since 1975?



A closer look, however, suggests that this gratuitous little spat might turn out better for Jerusalem than for the White House.



(1) It concerns not a life-and-death issue, such as the menace of Iran's nuclear buildup or Israel's right to defend itself from Hamas predations, but the triviality of the timing of a decision to build new housing units in Israel's capital city. Wiser heads will insist that White House amateurs end this tempest in a teapot and revert to normal relations.



(2) If Obama et al. hope to bring down Prime Minister Binyamin Netanyahu's government, they can't count Knesset seats. Peeling away Labor will lead to its replacement by rightist parties.



(3) An Israeli consensus exists to maintain sovereignty over eastern Jerusalem, so provoking a crisis on this issue strengthens Netanyahu.



(4) Conversely, U.S. histrionics make the Palestinian Authority's Mahmoud Abbas more reluctant to enter into Washington's counterproductive negotiations.



(5) A recent poll of American voters shows an astonishing 8-to-1 sympathy for Israel over the Palestinians, so picking a fight with Israel harms Obama politically - precisely what a president sinking in the polls and attempting to transform one-sixth of the economy does not need.



SOURCE



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Neo-Soviet Russia and America



A revolution is brewing in Vladimir Putin's Russia. The chickens of his incompetence and shameless artifice are finally coming home to roost. Now, he has only neo-Soviet brutality to fall back upon. How long that will maintain him, only the likes of Barack Obama can say.



The Bruce Springsteen of Russia, Yuri Shevchuk of the seminal rock band DDT, recently launched into an unprecedented, lengthy, and biting critique of the Putin regime from the stage of one of Russia's most prestigious arenas. A video of the speech went viral and has already been viewed nearly 200,000 times and received over 500 comments. Then an online petition surfaced, attracting the support of virtually every significant opposition leader, and it too went viral. The call: Putin must go, now and permanently. The websites hosting the petitions were soon under furious attack from Putin's army of hackers.



Russians have good reasons to despise the increasingly neo-Soviet regime that Putin, a proud KGB spy, has created. And despite the shameful lack of support from Barack Obama and other craven Western leaders, they have good reason to be brave enough to challenge him.



When he came to power two years ago, Russia's so-called "president" Dmitri Medvedev (in reality nothing more than Putin's puppet) promised that he would bring a new level of fairness to Russia's infamously corrupt electoral process. But exactly the opposite has happened. A Russian court has totally banned Russia's most salient opposition party, Yabloko, from taking part in the next round of elections in the Russian regions. The court upheld the actions of local political leaders who rejected electoral petitions simply because they "just looked false." Grigori Melkonyants, deputy director of Russia's only independent election monitoring-organization, puts it bluntly: "The most important thing for officials is to get the necessary results."



Fairer elections are not the only campaign promise on which Medvedev has failed to deliver. According to the international accounting firm PricewaterhouseCoopers, in 2007, when Medvedev took power, 59% of Russian companies experienced economic crime. In response, Medvedev announced a major new initiative cracking down on corruption. Yet two years later, PWC reported that 71% of Russian companies were now being victimized by economic crime. In other words, as a result of Mededev's initiative to reduce economic crime, it increased by a shocking 20%.



Transparency International also releases a global survey of corruption, a broader index that surveys more countries across a wider spectrum of economic and political ills. In 2007, Russia ranked a shocking #143 out of 180 countries surveyed. One would not have thought that the country could get any worse. But two years later, Medvedev's Russia ranked #146.



Don't take my word for it; listen instead to former Russian parliamentarian Vladimir Ryzhkov, who calls Medvedev's performance dismal." Ryzhkov points to a survey by the World Economic Forum which shows that Russia significantly deteriorated in global competitiveness during Medvedev's first two years in office, ranking a woeful 63rd out of 133 nations surveyed, including a massive drop in the quality of the justice system (another pet project of Medvedev's). A study by the World Bank, Ryzhkov says, confirmed that domestic business conditions have significantly worsened, with Russia ranking 120 out of 180 countries surveyed.



In a brutal and lengthy article, veteran Russia correspondents Owen Matthews and Anna Nemtsova of Newsweek concluded that Medvedev is a "phony liberal" both because his promised reforms were only skin-deep fa‡ades and because he continues to serve not as the genuine ruler of Russia, but as a front for KGB strongman Vladimir Putin. Putin refers to Medvedev, the reporters say, with the pronoun "ty" that is used for children and underlings, while Medvedev refers to Putin with the respectful pronoun "vy."



Last week, the Russian newspaper Trud reported that Medvedev planned to create his own political party, to "rival" the United Russia party created by Putin, who now serves as "prime minister" after term limits forced him out. Given that it's Medvedev who supposedly rules the nation after being elected on the United Russia ticket as Putin's handpicked successor, it seems odd that it is Medvedev, not Putin, who is forming the new party. If the two run against each other in 2012, when Putin is allowed back into office, Medvedev will be at a clear disadvantage.



But it's not the least bit odd if you understand that Medvedev's "presidency" is a sham. As the head of a new "party" that represents freedom and democracy, Medvedev can be presented as an entirely viable candidate to the West. Then, when Putin crushes him, he not only proves that Russia has a real democracy, but that Russians don't want democracy. Instead, they'll appear to want the Soviet-style dictatorship that Putin has long been forming.



It's actually quite a brilliant scheme on Putin's part. Putin is likely delighted to see that Russia's performance has become even worse under Medvedev because it gives him the chance to further justify a return to power. Never mind that under Putin's two terms, Russia's scores dropped enough to lag behind some of the most lawless African states. Putin can claim that he is once again riding to Russia's rescue.



The scheme can work only because of the poor excuse for leadership being provided by the Obama administration, which has driven France into Putin's waiting arms and which has remained silent despite the opportunity to speak out for freedom that the Kremlin's ongoing failure has presented.



Obama's State Department recently released a human rights report that scathingly condemned Russia for state-sponsored kidnapping, torture, and murder in the Caucasus region, and of liquidating reporters who try to tell the tale. Yet Obama himself has remained silent and chosen to ignore the fraudulent nature of Russia's government. Instead of seeking to reset Russia's neo-Soviet decline, Obama has suggested resetting only U.S. attitudes towards Russia, in other words appeasement.



That means it's up to others, especially the leaders of the Republican Party, to show solidarity with the brave Russians who now seek to stop their country's slide into neo-Soviet oblivion.



SOURCE



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ELSEWHERE



VT: State sued over phone tracking: "The ACLU of Vermont is suing the state after unsuccessfully seeking to find out whether police agencies are using cellphone tracking technology to keep tabs on people's whereabouts. The state attorney general's office refused public records requests by the ACLU seeking information about the practice, saying that information is exempt from public records statutes. So the ACLU filed suit Monday in Washington Superior Court, asking a judge to force the state to produce documents under the Public Records Act. `The attorney general's behavior here is a real breach of trust,' said Allen Gilbert, executive director. `The Public Records Act specifically requires public agencies to explain the factual basis for denying a request.'"



Senate passes "jobs" bill for Obama's signature: "Companies that hire unemployed workers will get a temporary payroll tax holiday under a bill that easily won congressional approval Wednesday in what Democrats hope is just the first of several election-year measures aimed at boosting hiring. The 68-29 bipartisan vote in the Senate sent the legislation to the White House, where President Barack Obama was expected to sign it into law Thursday."



Recent cases show challenge of US terrorists : "The growing front in the war on terrorism may be no farther than Main Street. The terror cases that have emerged in the past week have one common characteristic: The suspects are all Americans. One is a woman who looked after the elderly in suburban Pennsylvania. Another a security guard from New Jersey. Altogether more than a dozen Americans have been captured or pursued for allegedly supporting jihad, or holy war, over the past two years."



Medicare fraud costs taxpayers more than $60 billion each year : "A four month `Nightline' investigation into Medicare fraud makes one thing perfectly clear: this is a crime that pays and pays and pays. The federal government admits that a staggering $60 billion is stolen from tax payers through Medicare scams every year. Some experts believe the number is more than twice that."



Judge refuses to delay Blagojevich corruption trial: "A federal judge denied a request by former Illinois Gov. Rod Blagojevich to push back his trial date, saying he has had plenty of time to prepare. . Mr. Blagojevich was arrested Dec. 9, 2008, on charges that he tried to sell the U.S. Senate seat vacated by President Barack Obama. He has pleaded not guilty to racketeering conspiracy and other charges."



National broadband plan creates FCC central planning: "The long-awaited National Broadband Plan, hot off the presses of the Federal Communications Commission Tuesday, is an impressive document-if one is impressed by a federal agency grossly inflating its competence and proposing a vast expansion of its power. It's important to remember that Congress last year asked the FCC to do something relatively simple and straightforward after passing the 'stimulus' bill: Propose ways the government might increase access to broadband and make it more affordable."



Is the current recovery a pinata with no candy inside? : "In sum, when we disaggregate the recent increase in personal income, we find signs that the recovery has been weaker and less sustainable than many observers have taken it to be. Not all sources of personal income are created equal, and in the present circumstances, not even the rise in personal rental income counts as grounds for optimism. Because the recovery, such as it is, has begun only recently, it may acquire a healthier tone as it proceeds, if indeed it does. For the moment, however, we must recognize that recent changes give little warrant to the expectation of a full, sustainable recovery in the near term."



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 18, 2010 12:01 PM

by Hal_10000

I just had a fun time fisking Michael Moore’s latest letter at Moorewatch. This one has to be read to be believed.

March 18, 2010 07:51 AM

And now for something completely different: a "Lost" interpretationI’m a fan of the ABC series "Lost" but – to be honest – I can't wait for the series to be over. I think they've run out of good ideas and they're just shining us on with side-stories and back-stories and good vs. evil narratives. But after last night's episode, I had a revelation and it relates back to an old Twilight Zone episode

by Eric (noreply@blogger.com) on March 18, 2010 02:46 AM

Demon Pass rules - This is some serious inside legal baseball but over at Volokh, former federal judge Jonathan Adler explains the pending "Slaughter rule" to vote, but not vote, on HCR: "It may be clever but it is not Constitutional."

by Eric (noreply@blogger.com) on March 17, 2010 11:28 PM

In the land of "Napoleon Dynamite" - AP: "Idaho first to sign law against health care reform." As in Virginia, the sticking point is the controversial mandate that people must purchase insurance.

by Eric (noreply@blogger.com) on March 17, 2010 10:30 PM

by AlexinCT

Congress is about to use some chicanery they term “Deem and pass” to pretend they voted for a bill, when they did not, so they can push this massively unpopular government healthcare takeover on us stupid peasants that don’t know what’s better for us. Maybe people like me that end up owing the IRS taxes every April should also come up with such a nifty rule where we pretend we send in a check to them, but don’t really do it…

March 17, 2010 06:02 PM

Dennis Kucinich is a cheap date.

by Eric (noreply@blogger.com) on March 17, 2010 03:09 PM

WASHINGTON (AP) -- The United States and Israel stepped back Tuesday from their deepest rift in decades, a dispute over new Jewish homes in a traditionally Arab part of Jerusalem that quickly became a test of U.S. and Israeli commitment to peace talks and one another.

March 17, 2010 01:24 PM

WASHINGTON (AP) - The Senate on Tuesday easily killed a move by conservative Republicans to temporarily ban senators from earmarking spending bills with back-home projects like roads, water projects and grants to local governments.

March 17, 2010 01:24 PM

WASHINGTON (AP) - Buyers, beware: President Barack Obama says his health care overhaul will lower premiums by double digits, but check the fine print. Premiums are likely to keep going up even if the health care bill passes, experts say. If cost controls work as advertised, annual increases would level off with time. But don't look for a rollback. Instead, the main reason premiums would be more affordable is that new government tax credits would help cover the cost for millions of people.

March 17, 2010 01:24 PM

WASHINGTON (AP) -- President Barack Obama is taking his health care pitch directly to Fox News viewers.

March 17, 2010 01:24 PM

CLEVELAND (AP) - A woman championed as the Obama administration's emblem for health care reform does not have to choose between her home and her health, according to officials at the Ohio hospital where she is being treated.

March 17, 2010 01:24 PM

WASHINGTON (AP) - Companies that hire unemployed workers get a temporary payroll tax holiday under a bill headed for likely Senate passage Wednesday.

March 17, 2010 01:24 PM

WASHINGTON (AP) -- Attorney General Eric Holder told Congress on Tuesday that Osama bin Laden will never face trial in the United States because he will not be captured alive. In testy exchanges with House Republicans, the attorney general compared bin Laden to mass murderer Charles Manson and predicted that events would ensure "we will be reading Miranda rights to the corpse of Osama bin Laden" not to the al-Qaida leader as a captive.

March 17, 2010 01:24 PM

WASHINGTON (AP) -- Secretary of State Hillary Rodham Clinton on Tuesday said Israel must prove it is committed to the Mideast peace process with actions. But she brushed aside suggestions that relations with the main U.S. ally in the Mideast are in crisis over Israeli plans to build new Jewish housing in east Jerusalem.

March 17, 2010 01:24 PM

By Walter E. Williams -- Stephen Dinan's Washington Times article "Climate Scientist to Fight Back at Skeptics," (March 5, 2010) tells of a forthcoming campaign that one global warmer said needs to be "an outlandishly aggressively partisan approach" to gut the credibility of skeptics.

March 17, 2010 12:57 PM

By Tony Blankley -- The president and the Democratic congressional leadership are fighting furiously to pass, with no Republican votes, the ever-less-popular health bill. An Associated Press poll last week shows that four in five Americans don't want the Democrats to pass a health care bill without bipartisan support, while almost all polls are showing support for the current bill to be at only 25 percent to 35 percent.

March 17, 2010 12:57 PM

By Michelle Malkin -- At a joint press conference with Mexican President Felipe Calderon last year, President Obama vowed to make ending border violence a "top priority." How's that hope and change working out? Drug-related crime is out of control, the State Department is warning spring-break vacationers to avoid the Mexican states of Durango, Coahuila and Chihuahua, and the bloodshed has now reached the U.S. consulate's office.

March 17, 2010 12:57 PM

By Dick Morris and Eileen McGann -- To date, the only area in which we have found ourselves in agreement with President Obama was over his announced intention to enforce strict and elevated education standards and move toward paying teachers based on merit.

March 17, 2010 12:57 PM