iCount

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



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



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



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



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

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



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



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



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





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



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



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



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



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



Kash

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

by cactus



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



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



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



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



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



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



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



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



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



A few minor steps I've taken...

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

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

____________________________________

by cactus

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

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

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

by tgirsch on March 09, 2010 04:34 AM

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



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



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



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







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

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

by Daniel Becker

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



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



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



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







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

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

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

by tgirsch on March 08, 2010 07:03 PM

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



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



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



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



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



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



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



This article is crossposted at News N Economics



Rebecca Wilder

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

by Tom aka Rusty Rustbelt



RANDOM ECONOMIC OBSERVATIONS WHILE TRAVELING THE RUSTBELT



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



* small businesses are closing at an alarming rate

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

* the hotel/motel business is in a depression

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

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

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

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

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

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

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

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



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



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

_____________________________

Tom aka Rusty Rustbelt

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

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



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

Serious discussion after the jump.









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

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



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



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



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

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

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



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



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



To quote Salmon, “What a mess.”



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



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



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



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



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

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

Calculated Risk



Steve Waldman



Dean Baker

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

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



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



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



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



It was more than skill, it was artistry.



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



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



"Rush Limbaugh lives. Jon Swift dies.



"There is no God."

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

Updated So this is what it's come to:

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

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



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



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

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



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

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



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

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

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



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



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



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

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



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

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



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



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



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



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

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



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

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



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



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

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



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

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



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



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



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



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



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

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

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



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

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

Robert Waldmann



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



Obamanation gerund of To obamanate.

Obamanation present participle of to obamanate.



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

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

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

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

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

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

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

Thanks, Obama! 

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

UPDATE: Fixed a grammatical error.

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

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

UPDATE: Fixed stupid typos.

by KTK on March 05, 2010 05:39 PM

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



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



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









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

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



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









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





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

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

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





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

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

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

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

by tgirsch on March 04, 2010 10:40 PM

by Bruce Webb



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



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

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



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



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



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



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

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

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

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



By Marshall Auerback



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



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

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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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

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

by Rebecca Wilder



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



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



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

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

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



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



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



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



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



Just some food for thought. Rebeca Wilder crossposted with Newsneconomics

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

Robert Waldmann



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



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



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







Razib Khan wrote

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

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



0.92% of "very conservative" individuals

5.48% of "very liberal" individuals

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



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



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



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

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

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



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



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

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

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

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



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

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

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

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



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

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

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

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

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

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

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

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

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



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



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

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

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

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

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

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

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

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



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



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



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

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

by Tom aka "Rusty Rustbelt"



Health Care Reform is Already Happening



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



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



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



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



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



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



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



HT: Columbus Dispatch

_________________________________

Tom aka "Rusty Rustbelt"

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

by Linda Beale

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



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



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

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

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



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

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



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

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

by Rebecca Wilder



This is expansionary monetary policy...



... this is expansionary monetary policy on drugs



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



Any questions?



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



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



Soon to come: Indonesia vs. Russia.



Rebecca Wildercrossposted with Newsneconomics

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

This one’s just for Mr. Judd:

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

by tgirsch on March 02, 2010 03:40 PM

by Linda Beale



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



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



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

____________________________________

crossposted with ataxingmatter

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

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



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



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



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

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

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



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



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

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



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

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



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

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

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



Finally, (4)savings.

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

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



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





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



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



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



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



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



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



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



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



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



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



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



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



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

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



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



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



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

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

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



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

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

From BusinessWeek, via Bloomberg, on February 19:

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

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

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

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



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



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



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



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



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

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

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



Rebecca Wilder

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

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



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



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



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



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



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



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



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



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



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

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

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

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

Oblique H/T to Uncle.

UPDATE: The “other one” that Uncle mentions:

by tgirsch on March 01, 2010 09:36 PM

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



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



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



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



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



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

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

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



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



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



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

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

by Linda Beale



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



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

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

crossposted with ataxingmatter

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

by cactus



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



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



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

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



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



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



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



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



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



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

____________________________________

by cactus

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

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

by tgirsch on March 01, 2010 12:36 AM

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



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



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



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



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



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

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

The Bell has an op-ed worth reading.

When Economic Stress Becomes Terrorism



Poverty, Rather Than Anti-Anything Ideology, Is the Common Thread



Joseph Stack is not a terrorist in the sense that we apply this word to operatives for al-Qaida and other groups and he certainly is not a Tea Party terrorist. The same is true for Terry Hoskins. However, both these men provide useful illustrations of the link between economic distress and terrorism.



Stack, of course, is the Austin Texas software engineer who last week set fire to his house and then flew his single-engine Piper Cherokee airplane into the Ecehelon building, housing government tax workers. Friends in Austin called him a straight-laced, quiet person who struck them as incapable of such carnage. However, those who knew him longer said Stack had great animosity for the IRS.



Back in the 1980s and 1900s, two entrepreneurial ventures started by Stack ultimately were put out of business by California’s Franchise Tax Board. The first was suspended for non-payment of back taxes totaling $1,153. The second was suspended for failure to file a tax return. Stack acknowledged his errors but was apparently driven over the edge by the federal government’s bailout last year of various troubled banks and auto companies.



Stack wrote that a little guy like him making little mistakes was ultimately hounded by the government in disputes that cost him his marriage, more than $40,000, and “ten years of my life.” Yet when the companies were deemed too big to fail, Stack wondered, “Why is it that a handful of thugs and plunderers can commit unthinkable atrocities . . . and when it's time for their gravy train to crash under the weight of their gluttony and overwhelming stupidity, the force of the full federal government has no difficulty coming to their aid within days if not hours?”



Terry Hoskins probably is not known to most but in my hometown of Cincinnati he was making headlines locally at about the same time as Stack was making them nationally. Hoskins is a successful businessman. Several years ago, he built himself a sprawling, luxurious $350,000 home, complete with swimming pool and tennis courts. Over the years, he got into several payment disputes with RiverHills Bank, which holds the mortgage on his property.



When his brother and former business partner sued Hoskins, the IRS placed liens on his commercial properties. The bank promptly claimed his home as collateral. Hoskins asserts he eventually found someone else to loan him the $160,000 he needed to pay off the mortgage but the bank refused, saying it could get more from selling the house in foreclosure.



“When I see I owe $160,000 on a home valued at $350,000, and someone decides they want to take it – no, I wasn't going to stand for that,” Hoskins said. So two weeks before he was due to turn the property over to the bank, Hoskins rented a bulldozer and turned his dream house into rubble. His business is scheduled to go up for auction on March 2 and Hoskins says he is considering leveling that building too.



Stack and Hoskins clearly committed acts of violence and wanton destruction but are they terrorists?



In response to Stack crashing his plane, Democratic Representative Lloyd Doggett of Texas released a statement calling it “a cowardly act of domestic terrorism.” Austin Police Chief Art Acevedo said he preferred to describe it as “a criminal act by a lone individual.” Jonathan Capehart of the Washington Post reports that caused an acquaintance of his to wryly observe, “If a white Texas guy flies into a government building, it is a contained criminal act.”



Democrats seem eager to depict Stack as a terrorist and none too coyly point out some striking similarities between his list of complaints and the sorts of things sometimes said/yelled at Tea Party gatherings. Republicans call this nonsense, insisting there is no equivalence – ideologically or in results – between Stack’s plane crash versus the men who crashed four commercial jet airliners into the Pentagon, World Trade Center, and a Pennsylvania field, killing thousands.



I have to agree that neither Stack nor Hoskins were likely inspired to their acts by Tea Party rhetoric, even if it turns out they attended or closely followed the events. While these gatherings attract their share of fringe individuals, they are far too loosely organized to be called an anti-government group. Nor is it fair to characterize Tea Partiers as exclusively Republicans, even if they generally trend toward conservatism.



Moreover, as Stack’s suicide note/manifesto, posted on the Internet hours before his death, reveals, the same individual can mix hatred toward big government, big business, and even big religion in equal measures.



However, I think it is a mistake not to consider the presence of distinctly terrorist elements in Stack’s and Hoskins’s mental states and actions. Robert Wright observes in today’s New York Times that, like other terrorists, Stack “saw himself as part of a cause, as one in a long line of fighters against tyranny.” More than a few Americans identify with that cause, even finding a heroic component in Stack’s desperation. Hoskins has received similar expressions of support.



Mark Potok, a Director at the Southern Poverty Law Center, which tracks hate groups, say that extreme and violent acts of rebellion, such as those committed by Stack and Hoskins, “[tap] into a very deep vein of rage against the government.”



Also like other terrorists, Stack had a message to get out and was willing to foster fear through violence until his grievances were addressed. “Sadly,” he wrote, “though I spent my entire life trying to believe it wasn’t so, violence not only is the answer, it is the only answer . . . Nothing changes unless there is a body count.”



Likewise, Hoskins hopes banks view his act of destruction as a kind of veiled threat, leading to a desired end. He told reporters he hoped to “make banks think twice before they try to take someone's home, and if they are going to take it wrongly, the end result will be them tearing their house down like I did mine.”



When a crazed olive-skinned Muslim Army psychiatrist goes on shooting rampage at Fort Hood and/or crazed black-skinned Muslim student attempts to blow up an airplane with an underwear bomb, conservatives accused the Obama Administration as being soft on terror and decried resistance to wide scale profiling of Muslim males as “political correctness.” Yet when the attackers are white, middle-class males, these same conservatives are quick to dismiss them as unconnected lone crazies. It seems a tad inconsistent.



Yet in one sense, they may have a point. Wright and others think the term “terrorist” has become overused and ought to be dropped. I sympathize with their frustration. Terrorists” have come to connote all-powerful super-villains, so evil and so impossible to contain that our ordinary system of laws is powerless against them and citizens should gladly sacrifice basic rights for safety.



However, assuming we keep the term, Stack and Hoskins nicely demonstrate how economic distress can turn to terrorism. Granted, they are/were not Third World impoverished peasants. Both are/were affluent, educated, middle-class men who took advantage of numerous opportunities afforded them and made some foolish choices along the way that came back to haunt them.



Yet if the sudden loss of affluence – and perhaps more important, a sudden sense of no longer being in control – could drive these educated, middle-class men to acts of violent desperation, consider how a life of abject poverty with no hope of advancement might affect Third World Muslims or create guilt in Muslims living in Western democracies.



Radical Muslim clerics do not create the violent hatred that fuels terrorism anymore than Tea Party organizers; they simply use it constructively or destructively toward their own ends. The roots of terrorism and violence lie in poverty and hopelessness.



That is something to think about as we consider the current economic distress sweeping across this country and debate the best ways to address it. We are faced with a situation where more and more middle class are quietly drifting in desperation into an underclass.



If we do not address how to create employment and stem the bleeding of jobs overseas, if we do not address how to reduce the spiraling costs resulting from continued reliance on non-renewable energy sources, if we do not address how to reduce the spiraling costs from out-of-control healthcare and health insurance industries, we are heading for a reckoning.



Failure to deviate from the status quo means that the anti-government and anti-business activists of the near future will not need to poke about the fringes of society to find a few extreme individuals driven to desperation, such as Stack and Hoskins. Instead, their potential converts will be legion.



The Bell http://blog-thebell.blogspot.com/

by Rdan (noreply@blogger.com) on February 28, 2010 08:08 PM

A few years ago—probably four, though maybe more—I was doing some research at SIBL when the National Sport of Canada came on the television screens.



It wasn't that I stopped to watch; that loyalty had been previously established. It was that everyone else who was walking between the floors stopped and watched for at least five minutes, and often longer.



So when the NYT declares that curling "has captivated the Type-A world of Wall Street almost by accident" as if this were news, I can safely state that it has been so for a while.



(h/t the blog of the London Review of Books)

by Ken Houghton (noreply@blogger.com) on February 28, 2010 07:40 PM

by Rdan (noreply@blogger.com) on February 26, 2010 10:48 PM

by Linda Beale



Duffie on speculative trading (Part one of a series)



In today's Wall St. Journal, Darrell Duffie, a finance professor at Stanford's business school, argues "In Defense of Financial Speculation" (Wall St. J., Feb. 24, 2010, at A15). (Rdan here...AB posting is Feb. 26)



According to Duffie, speculators are beneficial. Here's his argument.



1) speculators absorb risk that others don't want, permitting investors to hedge their positions



2) speculators provide information about invetments--if they buy, fundamentals appear favorable; if they sell, fundamentals are not. That information helps market prices be more accurate.



3) speculation--defined as "accurately forecasting an investment's fundamental strength or weakness"--is not the same as manipulation--defined as "when investors 'attack' a financial market in order to profit by changing the value of an investment.



Duffie admits that speculation "is not necessarily harmless. If a large speculator does not have enough capital to cover potential losses, he could destabilize financial markets if is position collapses."



Are Duffie's arguments strong enough to think, as he suggests, that curbing speculation in the credit default market isn't necessary? Note that item 2 stems directly from the "efficient markets hypothesis"--that markets price items appropriately through sharing of information. But what we know suggests this isn't true. We have an entire vocabulary for talking about the fact that without stabilizing intervention and protective regulation, market pricing--and the kinds of speculation that Duffie praises--tends to lead to market bubbles. The housing markets are a good example. People thought that housing was a good investment. Speculators got into housing to "flip" houses to make a profit. Other speculators bet on the housing market through collateral debt obligations and other types of mortgage backed securities. These were often tied with credit default swaps, which the counterparty banks saw as a "safe" bet that meant steady premiums without any payback day. The speculation is what made the housing market into a bubble. And when the bubble burst, many of the speculators had to be backed by the government to keep the financial system going. Prices weren't an accurate reflection of value. They were only an accurate reflection of the casino mentality estimation of value. And the increased speculation in housing didn't mean there was more accurate evaluation of fundamental values. It meant, in fact, that there was less and less accurate information, as lenders eager for loans to securitize accepted shoddier products and pushed for shoddier lending standards and as the securitization market's key characteristic--the lack of a relationship between lender and debter--became the key variable that made speculative investment in housing too easy because the loss risk could, theoretically at least, be offloaded to the investors, guarantee counterparties and other third parties. Combine the speculative "casino" mentality with the lack of relationships between lending banks and buying families and you have a winner take all casino system where nobody but the winners are served. Here, that ended up being the big investment banks.



What about item 1--the hedging function that speculators serve by taking risks that others want to offload. Well, our system treats that as a plus. It is one of the factors that permits securitization and one of the factors that permits globalization of the risk--spreading it around in little pieces of losses. We tend to think that being able to hedge the potential future risks of a business is a definite priority. If we need energy a year out, we can buy futures. But is that really a plus? Would we be better off if the lender continued to bear the risk against the lender's equity capital? Odds are loans would be harder to get but surer to pay off. And, yes, we'd need some ability to lubricate the pipes during financial difficult times. But notice that all of that speculative hedging function hasn't done much to ensure that small businesses and working families are able to borrow now when they should be able to. So if it doesn't function well when there is a financial crisis, why think that it is really working well when there isn't?



And item 3--that speculation is ok, it's just market manipulation that we have to worry about? Duffie suggests that there is a bright,easily definable line separating the two. I'd argue that there is not. Speculation becomes manipulation when it is too big, when there is too much risk and not enough capital to absorb it, when it creates a deceptive appearance of rationality but represents irrational exuburence. Speculation is just manipulation writ smalll--since speculation is a bet against what appears to be a market trend and making the bet can shift the market. Casino gambling doesn't really look to fundamentals; it looks to perceptions of fundamentals. So long as the odds are breaking the gambler's way, the gambler doesn't care whether it's rotten at the core or not. And of course, one of the problems with financial derivatives generally, and their use as speculative instruments in particular, is that they make it possible to finely tune financial scams--shadow banking systems can exist for countries (and the globe), and shadow financial realities can exist, since derivatives can be used as subterfuge. Financial transparency is one of the keys to maintaining democratic institutions without permitting country and system to be captured by ruling oligarchies.



Maybe I'll wake up tomorrow and regret this post. Perhaps I'm a Luddite in tax prof clothing. But I can't shake the thought that globalization--the idea that corporate entities should be able to operate their business world-wide without any "barriers" from the nations themselves--is at the heart of our systemic economic problems. The rage at the base of the tea party movement is real--it has been misdirected at government, as though government were the source of the problems, when it should have been directed against the Big Business mentality that casts morality aside and considers profit the only god--community, workers, and product quality/service be damned. The tea partiers' rage itself is real, because people are so fed up with having no real choices, at being at the mercy of multinational corporations that set their own terms and, often, have near monopolies. This is especially true with health insurance, where the lightly regulated industry is made up of a few giants who often dominant their markets, leaving a typical person little ability to "shop" for a better deal. Even where you shop, once you create a business relationship you are in many ways at the mercy of the corporate giant. They change prices when they please, they charge ridiculous add-on fees for services that cost them only a small fraction of the fees they charge, they hide information and manipulate their clients--from cable providers to banks to mortgage lenders. They are no longer local, and they no longer care about your community or you as a client. It seems to me that if we want businesses that are more responsive to the typical person, we need businesses that are smaller, not businesses that are bigger. We need more Mom and Pop stores and less Wal-Martization of the country. Because in the long run, a company that is run like Walmart--to make the biggest profit possible for its owners, come hell or high water and without concern for the communities or people in them--may be able to offer goods at lower prices but it also offers jobs at lower pay. If we had those same goods sold by smaller stores that hired in the community and lived in the community, we might pay more but the employees would be paid more. In the long run, that is the secret of quality of life--having a population that has decent jobs so that they can afford to buy life's necessities and a little more.



I suspect that there will be many others who join Duffie in defending financial speculation. But I find that his arguments about risk absorbing and pricing information fall short of convincing. If speculators really absorbed risk, there would be no worry about the risks falling back to the taxpayers. But in the case of the financial crisis, it was the taxpayers, ultimately, who got hit with the risk. There were many times more credit default swaps on debt than there was debt outstanding, creating an illusion of a well-diversified financial system with supports all around. But AIG held a significant percentage of the counterparty risk, and all the banks were dealing with AIG or some other counterparty that held significant amounts of risk. All that speculation didn't do more than link us all together in one big Ponzi scheme. And while there was lots of information about what the speculators were buying, the result wasn't widespread increase in fundamental knowledge--instead, it was "he's getting rich with those mortgage-backed securities, I need to get in on that too" or "Bear Sterns is making lots of money with its securities packages; maybe I can get some of those subprime mortgage deals going for my bank" or "look at how much he made flipping that house in just two months; I gotta get some of that".



Linda Beale crossposted with ataxingmatter

by Rdan (noreply@blogger.com) on February 26, 2010 01:12 PM

by Rebecca Wilder



Today, North America saw the Q4 2009 GDP figures for Malaysia and Germany. In my view, the two releases accurately depict the developed vs. developing picture of economic recoveries: one is causing the other.



Malaysia's real GDP, population 29,992,577 in 2008 according to the World Bank, grew 4.5% compared to the same period one year ago. The impetus behind headline number was domestic demand (GDP minus net exports), +3.9% Y/Y and external demand (exports), +7,3%.



The recovery in Malaysia is healthy. Domestic private consumption improved 1.7% Y/Y, while investment surged 8.2% over the same period (up from -7.9% in Q3).



The pace of contraction in German real GDP, population 82,140,043 according to the World Bank, slowed to -1.7% Y/Y from -4.7% Y/Y in Q3. On the surface, the trend is sound: the annual economic deterioration is slowing markedly. But below the hood, the true nature of the beast is present: only external demand and government spending are stabilizing GDP.



The growth rate in domestic demand is essentially moving laterally; it fell to -2.8% Y/Y from -1.6% Y/Y in Q3, and is now essentially unchanged from Q2 (-2.7% Y/Y) . Pockets here and there are improving - the decline in imports and machinery slowed somewhat; spending on machinery jumped 3 points to -18% Y/Y in Q4 (this is not much of an improvement).



Is this a country-level illustration of the world growth schism? Are Emerging Markets providing the impetus growth for all? I think so.



Rebecca Wilder crossposted with Newsneconomics

by Rdan (noreply@blogger.com) on February 26, 2010 12:55 PM

by Rdan (noreply@blogger.com) on February 26, 2010 12:29 PM

This is what the Daily Show came up with before the summit:

The Daily Show With Jon Stewart	Mon – Thurs 11p / 10c
Summit’s Eve
www.thedailyshow.com
Daily Show Full Episodes Political Humor Vancouverage 2010

I can scarcely wait at what they’re going to do when they get their mitts on the actual footage

by tgirsch on February 25, 2010 09:31 PM

Liberal atheists tend to be a lot smarter than non-liberal, non-atheists, says a new report written by liberal atheists.

Actually, to be fair, what it actually says is closer to the other way around: people who are smarter are much more likely to be liberal and/or atheist than their not-as-smart counterparts. But it’s still fun to stir the pot.

by tgirsch on February 25, 2010 09:28 PM

by Bruce Webb



Well I doubt that will be the slogan on the signs at the next Teabag Rally but it is an accurate summation of Rep. Paul Ryan's Roadmap to America's Future tax reform plan. From the website (bolding mine):

This plan discards a needlessly complex and manipulative tax code, replacing it with a simplified mechanism that promotes work, saving, and investment.



Provides individual income tax payers a choice of how to pay their taxes – through existing law, or through a highly simplified code that fits on a postcard with just two rates and virtually no special tax deductions, credits, or exclusions (except the health care tax credit).

Simplifies tax rates to 10 percent on income up to $100,000 for joint filers, and $50,000 for single filers; and 25 percent on taxable income above these amounts. Also includes a generous standard deduction and personal exemption (totaling $39,000 for a family of four).

Eliminates the alternative minimum tax [AMT].

Promotes saving by eliminating taxes on interest, capital gains, and dividends; also eliminates the death tax.

Replaces the corporate income tax – currently the second highest in the industrialized world – with a border-adjustable business consumption tax of 8.5 percent. This new rate is roughly half that of the rest of the industrialized world.

Some attention has been paid to the Roadmap's plan to privatize Social Security and voucherize Medicare but little to this aspect. Under Ryan's Roadmap billionaires don't pay taxes. At all.



In our system there are multi-millionaires whose wealth came from a combination of wages and bonuses, film and sports stars come to mind, but the truly rich earned their billions from returns of capital, they own property and companies and make their money by selling them and pocketing the gains. Under the Ryan Roadmap every form of gain from capital is tax free.



They really do believe that Capitalists are Masters of the Universe, that they are so important they don't even have to contribute to pay for the weapons systems used to protect their interests around the world or from terrorism here at home. Some of us have recognized that the end point of Republican tax policy added up to 'No Tax for Billionaires', it is just that no Republican dared compile that entire agenda and put it down on paper. Well here it is, it is the Roadmap to Plutocracy, that is the Republican vision of America's Future, that 'wage slave' no longer be a metaphor, instead workers will pay for everything.



And you can bet that the Capitalists will still be claiming WORKERS are the Parasites.

by Bruce Webb (bruce.c.webb@gmail.com) on February 25, 2010 02:55 PM

If you haven’t seen the Daily Show’s take, by all means, watch it right now!

The Daily Show With Jon Stewart	Mon – Thurs 11p / 10c
Rage Within the Machine – Progressivism
www.thedailyshow.com
Daily Show Full Episodes Political Humor Health Care Crisis

The ridicule they heap onto Glenn Beck is worth it on its own, but then the Samantha Bee stuff is just icing on the cake. (And it should be noted that Sam Bee normally bugs the shit out of me.)

by tgirsch on February 24, 2010 10:16 PM

Lindsay Beyerstein at ObWi, on the GOP’s calls to “start over” on health care reform:

Boehner must realize the prospect of starting over is about as appealing as National Root Canal Week at the DMV.

Bonus quote, same piece:

The Republicans have no ideas beyond “tax cuts cure cancer.”

by tgirsch on February 24, 2010 10:03 PM

What the hell is with these Miss America dumbfucks? I mean, it was always a stupid and reactionary institution, but when did they go from mouthing mindless platitudes to spewing hateful right-wing bigotry from the stage?

Last year, Miss California Carrie Prejean endeared herself to the right wing when she answered a question about same-sex marriage by saying that she believes marriage “should be between a man and a woman.” Now, Miss Beverly Hills 2010 Lauren Ashley, who will compete in the Miss California pageant in November, has gone further. Ashley told Fox News that not only is she against same-sex marriage, but that she thinks it is divine law that gays should be put to death because “the Bible is pretty black and white”

The predictable Bible quotes were appended. Oddly, nothing about shrimp. But I am glad to note that she insists – wouldn’t you just know it? – that she “has a lot of friends that are gay”, and, of course, there’s “no hate between [her] and anyone”. Just that putting-to-death thing. But in a nice way.

The perfect comment:

Somewhere along the way, the evolution of looks and brains took extremely divergent paths.

(That explains what I see in my bathroom mirror. I hope.)

(Oh, yeah: and I notice they’re both from my home state of California. I hope and presume that that’s because the idiotic right-wing bigots from California are just hotter than the idiotic right-wing bigots from, say, Alabama or Mississippi, and not that they’re actually more idiotic and bigoted. But either way, isn’t it time to just scrap this whole Barbie-doll bullshit and create a real scholarship program for girls who weren’t processed in some Stepford factory?)

by KTK on February 24, 2010 05:16 PM

by Hal_10000

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

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

...

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

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

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

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

March 09, 2010 07:23 PM

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

March 09, 2010 02:15 PM

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

March 09, 2010 02:15 PM

By Richard Olivastro -- They're at it again. This time they are playing with fire. First, some background: Overwhelming numbers of Americans do not want terrorists tried in civilian courts. Rather, the people say military tribunals are appropriate. And, Guantanamo is the best site for them.

March 09, 2010 02:15 PM

By Debra Saunders -- The biggest problem with last week's March 4 Day of Action to Defend Education, which was organized to protest cuts in California's education spending: The event showed how little educators and students value education.

March 09, 2010 02:15 PM

By David Limbaugh -- President Barack Obama obviously has no qualms about slandering people or industries that interfere with his agenda. In the same creepy manner he defamed the Cambridge Police Department without benefit of the facts, he is scapegoating the insurance companies based on his distorted version of facts.

March 09, 2010 02:15 PM

WASHINGTON (AP) - Legislation extending unemployment insurance for the long-term jobless faces a key test vote in the Senate, its momentum helped by about 60 popular tax breaks for individuals and businesses that expired at the end of last year.

March 09, 2010 02:10 PM

TAWAS CITY, Mich. (AP) -- Prospects are good for resolving a dispute over abortion that has led some House Democrats to threaten to withhold support of President Barack Obama's health care overhaul, a key Michigan Democrat said Monday.

March 09, 2010 02:10 PM

WASHINGTON (AP) -- For a guy who professes to have no interest in running for president, Gen. David Petraeus can come off as surprisingly eager to talk about it -- sometimes without even being asked.

March 09, 2010 02:10 PM

WASHINGTON (AP) -- White House aides are increasingly convinced that accused 9/11 mastermind Khalid Sheikh Mohammed will never face trial in a civilian court and are trying to cut a deal that would still transfer Guantanamo Bay terrorism suspects to the U.S., where many would faces criminal charges, a senior administration official said Monday.

March 09, 2010 02:10 PM

WASHINGTON (AP) - Tuesday is the first day same-sex couples can pick up marriage licenses and tie the knot in the city. Some couples planned quick ceremonies at a church or gay rights group's office while others said they'll wait and have more elaborate celebrations.

March 09, 2010 02:10 PM

WASHINGTON (AP) -- Three Greenpeace activists were arrested Monday after their balloon-powered banner criticizing Sen. Lisa Murkowski, R-Alaska, was released in the Senate Hart Office Building.

March 09, 2010 02:10 PM

WASHINGTON (AP) - The Supreme Court is entering an emotionally charged dispute between the grieving father of a Marine who died in Iraq and the anti-gay protesters who picket military funerals with inflammatory messages like "Thank God for dead soldiers."

March 09, 2010 02:10 PM

WASHINGTON (AP) -- Democrats facing strong headwinds this election season have at least one reason for optimism, according to polling that found the party's large African-American voting bloc eager to stay involved even without Barack Obama on the ballot.

March 09, 2010 02:10 PM

JERUSALEM (AP) - The U.S. will back those willing to "take risks for peace," U.S. Vice President Joe Biden said Tuesday during the highest-level visit to Israel by an Obama administration official.

March 09, 2010 02:10 PM

The end of the road for Barack Obama?



Barack Obama seems unable to face up to America's problems, writes Simon Heffer in New York



It is a universal political truth that administrations do not begin to fragment when things are going well: it only happens when they go badly, and those who think they know better begin to attack those who manifestly do not. The descent of Barack Obama's regime, characterised now by factionalism in the Democratic Party and talk of his being set to emulate Jimmy Carter as a one-term president, has been swift and precipitate. It was just 16 months ago that weeping men and women celebrated his victory over John McCain in the American presidential election. If they weep now, a year and six weeks into his rule, it is for different reasons.



Despite the efforts of some sections of opinion to talk the place up, America is mired in unhappiness, all the worse for the height from which Obamania has fallen. The economy remains troublesome. There is growth – a good last quarter suggested an annual rate of as high as six per cent, but that figure is probably not reliable – and the latest unemployment figures, last Friday, showed a levelling off. Yet 15 million Americans, or 9.7 per cent of the workforce, have no job. Many millions more are reduced to working part-time. Whole areas of the country, notably in the north and on the eastern seaboard, are industrial wastelands. The once mighty motor city of Detroit appears slowly to be being abandoned, becoming a Jurassic Park of the mid-20th century; unemployment among black people in Mr Obama's own city of Chicago is estimated at between 20 and 25 per cent. One senior black politician – a Democrat and a supporter of the President – told me of the wrath in his community that a black president appeared to be unable to solve the economic problem among his own people. Cities in the east such as Newark and Baltimore now have drug-dealing as their principal commercial activity: The Wire is only just fictional.



Last Thursday the House of Representatives passed a jobs Bill, costing $15 billion, which would give tax breaks to firms hiring new staff and, through state sponsorship of construction projects, create thousands of jobs too. The Senate is trying to approve a Bill that would provide a further $150 billion of tax incentives to employers. Yet there is a sense of desperation in the Administration, a sense that nothing can be as efficacious at the moment as a sticking plaster. Edward B Montgomery, deputy labour secretary in the Clinton administration, now spends his time on day trips to decaying towns that used to have a car industry, not so much advising them on how to do something else as facilitating those communities' access to federal funds. For a land without a welfare state, America starts to do an effective impersonation of a country with one. This massive state spending gives rise to accusations by Republicans, and people too angry even to be Republicans, that America is now controlled by "Leftists" and being turned into a socialist state.



"Obama's big problem," a senior Democrat told me, "is that four times as many people watch Fox News as watch CNN." The Fox network is a remarkable cultural phenomenon which almost shocks those of us from a country where a technical rule of impartiality is applied in the broadcast media. With little rest, it pours out rage 24 hours a day: its message is of the construction of the socialist state, the hijacking of America by "progressives" who now dominate institutions, the indoctrination of children, the undermining of religion and the expropriation of public money for these nefarious projects. The public loves it, and it is manifestly stirring up political activism against Mr Obama, and also against those in the Republican Party who are not deemed conservatives. However, it is arguable whether the now-reorganising Right is half as effective in its assault on the President as some of Mr Obama's own party are.



Mr Obama benefited in his campaign from an idiotic level of idolatry, in which most of the media participated with an astonishing suspension of cynicism. The sound of the squealing of brakes is now audible all over the American press; but the attack is being directed not at the leader himself, but at those around him. There was much unconditional love a year or so ago of Rahm Emanuel, Mr Obama's Chief of Staff; oleaginous profiles of this Chicago political hack, a veteran of that unlovely team that polluted the Clinton White House, appeared in otherwise respectable journals, praising the combination of his religious devotion, his family-man image, his ruthless operating technique and his command of the vocabulary of profanity. Now, supporters of the President are blaming Mr Emanuel for the failure of the Obama project, not least for his inability to construct a deal on health care.



This went down badly with friends of Mr Emanuel, notably with Mr Emanuel himself. His partisans, apparently taking dictation from him, have filled newspaper columns and blogs with uplifting accounts of the Wonder of Rahm: as one of them put it, "Emanuel is the only person preventing Obama from becoming Jimmy Carter". They attack other Obama "sycophants", such as David Axelrod, his campaign guru, and Valerie Jarret, a long-time friend of Mrs Obama and a fixer from the office of Mayor Daley of Chicago who now manages – or tries to manage – the President's image. These "sycophants" have, they argue, tried to keep the President above politics, letting Congress run away with the agenda, and gainsaying Mr Emanuel's advice to Mr Obama to get tough with his internal opponents. This naïve act of manipulation has brought its own counter-counterattack, with an anti-Emanuel pundit drawing a comparison with our own Prime Minister and ridiculing the idea that Mr Obama should start bullying people too.



The root of the problem seems to be the management of expectations. The magnificent campaign created the notion that Mr Obama could walk on water. Oddly enough, he can't. That was more Mr Axelrod's fault than Mr Emanuel's. And, to be fair to Mr Emanuel, any advice he has been giving the President to impose his will on Congress is probably well founded. The $783 billion stimulus package of a year ago was used to further the re-election prospects of many congressmen, not to do good for the country. America's politics remain corrupt, populated by nonentities whose main concern once elected is to stay elected; it seems to be the same the whole world over. Even this self-interested use of the stimulus package appears to have failed, however. Every day, it seems, another Democrat congressman announces that he will not be fighting the mid-term elections scheduled for November 2. The health care Bill, apparently so humane in intent, is being "scrubbed" (to use the terminology of one Republican) by its opponents, to the joy of millions of middle Americans who see it as a means to waste more public money and entrench socialism. For the moment, this is a country vibrant with anger.



A thrashing of the Democrats in the mid-terms would not necessarily be the beginning of the end for Mr Obama: Bill Clinton was re-elected two years after the Republicans swept the House and the Senate in November 1994. But Mr Clinton was an operator in a way Mr Obama patently is not. His lack of experience, his dependence on rhetoric rather than action, his disconnection from the lives of many millions of Americans all handicap him heavily. It is not about whose advice he is taking: it is about him grasping what is wrong with America, and finding the will to put it right. That wasted first year, however, is another boulder hanging from his neck: what is wrong needs time to put right. The country's multi-trillion dollar debt is barely being addressed; and a country engaged in costly foreign wars has a President who seems obsessed with anything but foreign policy – as a disregarded Britain is beginning to realise.



There are lessons from the stumbling of Mr Obama for our own country as we approach a general election. Vacuous promises of change are hostages to fortune if they cannot be delivered upon to improve the living conditions of a people. The slickness of campaigning that comes from a combination of heavy funding and public relations expertise does not inevitably translate into an ability to govern. There is no point a nation's having the audacity of hope unless it also has the sophistication and the will to turn it into action. As things stand, Barack Obama and America under his leadership do not.



SOURCE



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



American Media, Blaming the ‘Right’: From Duranty and the KGB to Reuters



A recent article by Reuters is good reason to revisit the history of statist American media. A Reuters article last month titled “German protesters stop neo-Nazi march in Dresden” takes a hyper-partisan stab at what would otherwise have been a dull story. The article is short, 474 words, and describes a neo-Nazi funeral march in the German city to remember Nazi deaths by the Allied air raid in WWII. This event was thwarted by anti-Nazi protesters.



In this brief article about clear-cut good and evil, the political “right-wing” is awkwardly invoked six times, including under the caption. Such a ham-handed approach to finger-pointing can hardly go unnoticed. It is a sloppy attempt to paint the right-wing as sharing the ideology of one of the most evil men in history, Adolf Hitler.



As many people are beginning to understand, Nazism has nothing to do with modern conservatism or the clichéd “extreme right-wing” canard favored by the political left. In fact, all totalitarian regimes are on the extreme political left; nothing but anarchy exists on the extreme political right.



The modern left has its roots in the political phenomenon of the 1930s when progressivism, communism, fascism, socialism, and Nazism coalesced under the common flag of centralized governments and an ideology of collectivism. This worldwide movement went largely unchallenged ideologically until the reassertion of classical liberalism through the American conservative movement in the 1950s. The in-vogue politics of the 1930s spanned merely from the “right-wing” nationalistic fascism of Mussolini and Hitler to a “left-wing” muddle of socialism, Marxism, and communism.



To equate the George Washington-loving, Constitution-quoting, flag-carrying, tea partying conservatives of today with the Nazis or fascism is an exercise in fear mongering and a simple wordplay on the misconceptions of the historical context of “right-wing.” (For a simplistic explanation of this assertion, see this brief video.)



The “objectivity” of the modern press is often breached by such outbursts, as seen in the article referenced above. The political right-wing is excoriated through straw men and outright lies to be subliminal reminders of the purported righteousness of the ideological left. Nothing less can be expected of those with no defense based on their own history...



The most recent attempt on the alteration of history was perpetuated by Time magazine in its “The Year in Pictures” 2009 photo essay. One of the largest citizen marches on Washington, D.C., was conducted by the tea party movement on September 12, 2009. Estimates varied wildly from 60,000 to a whopping 2 million participants. A picture from this march was omitted from the essay. In fact, no reference at all was made to the massive grassroots phenomenon.



Instead, a photo of people simultaneously exhaling marijuana was included, as was a photo of a koala bear in a Melbourne animal rescue center. This tactic is from Soviet Russia. It was implemented under Stalin to purge political and military opposition from existence, both literally and historically. Aside from mass executions, prominent resisters and political competition had their faces sloppily airbrushed or blotted out in photographs. This was an intentional psychological blow by Stalin because it sent a message that his opposition would not only be defeated, but would ultimately be stricken from the record of history. It created a feeling for dissenters of utter futility.



Any shred of leftist intellectual honesty and journalistic curiosity was obliterated once Senator Obama threw his hat into the ring as a presidential candidate. The “mainstream” media whored out its last shred of credibility in a non-stop sycophantic obsession with this man of mystery. Having no desire to investigate clear connections to domestic terrorist William Ayers or Obama’s twenty-year relationship with black nationalist Reverend Jeremiah Wright, the media concentrated on defending the idea of “hope and change” personified.



Conservative commentator and rising media star Glenn Beck outs anti-capitalists in Washington, reports on economic news otherwise ignored by the American press, and teaches economic principles and American history to his audience. It’s not exactly the Jerry Springer styled chair-throwing brawl the left expects of Beck’s supposed neo-Nazi, gun-nut, ignorant, and religiously fanatical viewers. But then again, it’s possible the left could be wrong.



Most of his media critics even go so far as to enumerate Beck’s own weighty claims, but rather than demonstrate journalistic curiosity, they mock the messenger instead. Such antics smack of a desperation to retain control of information, especially as Beck’s recommended books and organizations rocket in sales and membership.



Activist and filmmaker James O’Keefe and friend Hanna Giles, featured on Glenn Beck’s show, single-handedly exposed the left-wing corruption ring of ACORN. Even an exasperated and self-proclaimed “fake journalist,” Jon Stewart, exclaimed: “Where were the real reporters on this story?”



After Climategate was plastered over European newspapers, the American “mainstream” media couldn’t even muster the will for corrections on previous alarmist climate articles, much less give equal exposure for the scandal. In fact, during snowstorms up and down the east coast, the New York Times published a defiant and lengthy op-ed by none other than Alliance for Climate Protection founder Al Gore.



Nary a peep came from a sleepy media while children were compelled by schools to sing songs of praise about Obama and celebrities pledged to be “a servant to the president.” These disturbing events send chills down the spines of anyone acquainted with even a passing knowledge of fascist propaganda tactics.



The left-wing media was unconcerned with phone conversations conducted at the behest the White House to plan propaganda for Obama’s agenda by the National Endowment for the Arts. At the very least MSNBC should have been outraged that they weren’t directed to step up their efforts before being replaced. The story broke on Andrew Breitbart’s Big Hollywood and later followed on Fox News.



This is by no means an exhaustive list of efforts ranging from unethical to egregious on the part of the media to promote a left-wing ideology. In fact, if the proxy war on conservatism through attacks on Republicans were included, this could easily be a book. But I’ll stop it here. In fairness, not all the wailing and gnashing of teeth from left-wing ideologues are unleashed on conservatives. Their Tourette-like outbursts of angry or childish musings can occasionally find even the most unlikely of targets: Maureen Dowd from the New York Times, in the midst of a slobbering entry about Barack Obama, did happen to criticize his ears for “sticking out.”



Of course, it wasn’t long before Dowd was “put on notice” that Obama had been “teased relentlessly as a kid” for his big ears. After that, she rejoined her journalistic cohorts in what they do best — polishing the boots of dictators.



More HERE



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ELSEWHERE



New Obama Appointment Has Castro Ties : "President Obama made a terrible mistake nominating Mari Del Carmen Aponte to be ambassador to El Salvador. Aside from the fact that Aponte has given tens of thousands of dollars to Democrats, why would Obama waste more political capital trying to get this controversial and incompetent nominee into government? Nearly a dozen years ago, President Clinton nominated Aponte to be ambassador to the Dominican Republic. Several months later, her nomination was withdrawn because Aponte did not wish to answer Senators' tough questions about her past".



WI: ACORN registration workers charged with felony voter fraud: "Five Wisconsin residents, including two who worked for community organizing group ACORN, were charged Monday with election fraud relating to the 2008 presidential election. State Attorney General J.B. Van Hollen announced felony charges against Maria Miles, Kevin Clancy, Michael Henderson, Herbert Gunka and Suzanne Gunka. Miles and Clancy worked for the Association of Community Organizations for Reform Now and are accused of submitting multiple voter registration applications for the same individuals, including each other, to meet voter registration quotas imposed by the community organizing group. Henderson is charged with one count of voting by a disqualified person and providing false information to election officials. The allegation claims he was on a felony probation and prohibited from voting at the time. Herbert and Suzanne Gunka are each charged with double voting -- a felony -- by allegedly absentee voting and then going to the polls to vote."



Obama, Congress wink at massive surveillance abuses: "Here's how it was supposed to be. Under his administration, candidate Barack Obama explained in 2007, America would abandon the "false choice between the liberties we cherish and the security we provide." There would be "no more National Security Letters to spy on citizens who are not suspected of a crime" because "that is not who we are, and it is not what is necessary to defeat the terrorists." The serial betrayal of that hope reached its culmination last week, when a Democratic-controlled Congress quietly voted to reauthorize three controversial provisions of the USA Patriot Act without implementing a single one of the additional safeguards that had been under consideration -- among them, more stringent limits on the national security letters (NSLs) Obama had once decried. Worse yet, the vote came on the heels of the revelation, in a blistering inspector general's report, that Obama's Office of Legal Counsel (OLC) had issued a secret opinion, once again granting retroactive immunity for systematic lawbreaking -- and opening the door for the FBI to ignore even the current feeble limits on its power to vacuum up sensitive telecommunications records."



CBS Radio Fails to Mention Muslims’ Role in Massacre of Hundreds of Christians in Nigeria: "The differences between news reports on the recent massacre of hundreds in Nigeria are stark. Listening to St. Louis’ KMOX-AM 1120 this morning, I heard the CBS Radio News report about about some 200 people being killed in “sectarian violence” during the past few days had left at least 200 dead in Nigeria. Conversely, Australia’s Sydney Morning Herald reported that the latest violence appeared unrelated to national sectarian political frictions. What else did the report from “the land down under” mention that CBS chose to omit? Two key facts: The vast majority of people killed were Christians; and Those doing the killing — primarily with machetes — were Muslims."



There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc.



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



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



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



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



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by JR (jonjayray@gmail.com) on March 09, 2010 07:55 AM

Quote of the dayWell, at least the Sunday morning talk shows. Here's George Will laying some serious pwnage on Robert Reich:There you have the premise of this legislation and the core of today’s liberalism: the American people are such dopes they can’t be counted upon to buy their own insurance.The insurance companies were the bete noire of Kathleen Sebelius yesterday and President Obama

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

The Senate pinky-swear makes the House sweat – Two articles from the WSJ: "Democrats voice health bill doubts." Why? Because there is absolutely no guarantee that the Senate will pass the changes the House wants once the House vote is cast. Cornhusker Kickback, forever!

by Eric (noreply@blogger.com) on March 09, 2010 02:13 AM

Cost control? What cost control?A year ago, when this whole health care debate started, we were told over and over that if we didn't do something about runaway health care costs – especially with regard to Medicare – they will swamp the ship of state. Today, Obama essentially said: "Forget all that jazz.""You had 10 years. What happened?" Obama asked at a Glenside, Pa., rally. "We've been talking

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

by Hal_10000

Bigelow upended the Big Dog last night, sneaking the Oscar away from Avatar for her Iraq War film The Hurt Locker. I have not seen the film yet, but let me know if you guys have with your spoiler-free thoughts.  It’s nice to see a small film get the award, for once.

I’m behind on my movie watching for 2009 and, of the nominees, have only seen Up, District 9, and Avatar.  I thought Up was good but not as good as Pixar’s other efforts.  I enjoyed Avatar immensely but wasn’t sure it was the best picture of the year.  And I thought District 9 just as good, if not better, than Avatar.

Avatar did run into some political issues of its own.  Many people—notably Gregg Easterbrook—took issue with its (apparent) positive portrayal of US marines getting slaughtered by natives.  Some lefties, like Evo Morales, praised its supposed criticism of capitalism and imperialism.

Meh.  I’m not one for reading Big Political Messages into movie about giant blue aliens.  Avatar is not a subtle movie and neither are most of its characters—especially the villains. The human soldiers are mercenaries, ex- a lot of different services and cut off from command and from home.  Their behavior wasn’t shocking to anyone vaguely familiar with the Heart of the Darkness.  And as for the Evil Corporation ... our past is littered with companies that had armies of their own and used them to destroy natives they would have been better off working with (the East India company leaps to mind).  That’s not anti-capitalism or anti-Americanism.  That’s history, unfortunately.

I’ll agree that the movie’s moral landscape is simplistic.  But I didn’t feel like it was a political film and I tire of anything and everything being seen through the lens of politics.  But maybe your mileage differed.

Update: Sandra Bullock won both an Oscar and a Razzie, collecting both in person. I do think she had a point in her Razzie speech: most of the Razzie voters are voting based on the movie’s reputation and/or the personality of the nominees.  I doubt many of them have actually watched the films.

March 08, 2010 04:15 PM

By Star Parker -- Citigroup, one the world's largest banks, was bailed out with about $45 billion of U.S. taxpayer funds, and we taxpayers -- you and I -- still own a little more than one-quarter of the company. Do you recall making this investment? I don't.

March 08, 2010 02:13 PM

By Lawrence Kudlow -- Rather than a post-partisan olive branch to congressional Republicans and the American public, President Obama's latest health care speech was a declaration of war. He's more than willing to use a 51-vote reconciliation majority to jam through a roughly $2 trillion health care plan that amounts to a government takeover of nearly one-fifth of the economy.

March 08, 2010 02:13 PM

By Henry Lamb -- A few years ago, the Democrats were in the minority in Washington. They took great delight in using the 60-vote filibuster rule to prevent President Bush's judicial nominations from ever coming to the floor for a vote. The Republicans threatened to change the rules so judicial nominations and Presidential appointees could get approved or rejected with a simple majority vote. Democrats went absolutely ballistic. The threat was dubbed "The nuclear option."

March 08, 2010 02:13 PM

By Debra Saunders -- In November, Sen. Chuck Grassley, R-Iowa, asked Attorney General Eric Holder to provide him with a list of Department of Justice political appointees who had represented enemy-combatant "detainees, or worked for organizations advocating on terrorism or detainee policy." The DOJ has not sent him the names.

March 08, 2010 02:13 PM

By Doug Patton -- Most Americans realize that our federal government's deliberate refusal to control the influx of illegal aliens, primarily from Mexico, has had a deleterious effect on our nation's economy. Scores of California hospitals have had to close their doors because of a tsunami of illegals seeking "free" health care -- and receiving it.

March 08, 2010 02:13 PM

WASHINGTON (AP) - An Obama administration official says the president plans to nominate a former top Army intelligence official to lead the Transportation Security Administration.

March 08, 2010 02:01 PM

WASHINGTON (AP) -- Health Secretary Kathleen Sebelius said Sunday that health care reform would have been "dead on arrival" if the White House had sent a finished proposal to Congress last year.

March 08, 2010 02:01 PM

ISLAMABAD (AP) - An American member of al-Qaida was picked up in a raid in Pakistan's southern city of Karachi, Pakistani officials said Monday, but reversed earlier assertions that the detained man was the terror network's U.S.-born spokesman.

March 08, 2010 02:01 PM

WASHINGTON (AP) - In private pitches to Democrats, President Barack Obama says he will persuade Congress to pass his health care overhaul even if it kills him and even if he has to ask deeply distrustful lawmakers to trust him on a promise the White House doesn't have the power to keep.

March 08, 2010 02:01 PM

WASHINGTON (AP) - With the fate of his signature legislative initiative far from certain, President Barack Obama is taking his last-ditch push for health care reform on the road.

March 08, 2010 02:01 PM

BAGHDAD (AP) - Iraqis defied insurgents who lobbed hand grenades at voters and bombed a polling station Sunday in an attempt to intimidate those taking part in elections that will determine whether their country can overcome deep sectarian divides as U.S. forces prepare to leave.

March 08, 2010 02:01 PM

WASHINGTON (AP) -- A Republican senator is offering the White House a deal on terror trials. Sen. Lindsey Graham says that if the president agrees to try alleged Sept. 11 mastermind Khalid Sheik Mohammed and four accused henchmen in military tribunals, he will press fellow Republicans to vote to close the Guantanamo Bay prison.

March 08, 2010 02:01 PM

KABUL (AP) - Preparations have begun for a crucial campaign to assert Afghan government control over Kandahar, spiritual home of the Taliban, the top U.S. and NATO commander in Afghanistan said Monday.

March 08, 2010 02:01 PM

By Cliff Kincaid -- The left says he was a right-winger; the conservatives say that he was a leftist. What is abundantly clear, from reading his Internet commentaries, is that Pentagon shooter John Patrick Bedell was a psychotic pothead. He hated a government that he believed was standing in the way of his desire to use, grow and glorify marijuana. He virtually worshipped the drug. "I'm a cannabis enthusiast," he proclaimed.

March 08, 2010 01:58 PM

by Hal_10000

New Jersey is in a bad way, fiscally.  $2 billion in the fiscal hole.  Chris Christie is trying to dig them out by cutting spending.  But since there is no such as unpopular spending, he’s getting pilloried.

He’s not backing down. Here are some highlights of a speech he gave to the Jersey mayors:

You know, at some point there has to be parity. There has to be parity between what is happening in the real world, and what is happening in the public sector world. The money does not grow on trees outside this building or outside your municipal building. It comes from the hard working people of our communities who are suffering and are hurting right now.

I heard someone in the legislature say two days ago that they wanted no fare hike in New Jersey Transit, no cuts in service, and no cuts in subsidy. And I was thinking to myself, man I should have made this guy treasurer. [Laughter] Because if you can pull that one off, you’re obviously magic.

...

There’s no time left. We have no room left to borrow. We have no room left to tax. So we merely have room left now, to do this. We are all reaching the edge of a cliff. And it reminds me a bit of that part of Butch Cassidy and the Sundance Kid where the had a seminal decision to make. So what did they do? They held hands and they jumped off the cliff.

We have to hold hands at every level of government, state county, municipal, school board. We have to hold hands and jump off the cliff.

Read the whole thing.

This is a governor confronted by fiscal reality trying to do his best to get the house in order.  Eventually, something like this is going to have to happen on the federal level.  The question is: is there anyone out there who can take on Medicare, the elephant in the room?  Or will we get more Obama-style accounting gimmicks and vague promises?  Neither party is giving me hope.  The only man out there talking about the debt seriously is Paul Ryan and the GOP is backing away from him as fast as it can.

I’m actually slightly more optimistic after reading Christie’s remarks and the reaction to them.  The chattering class is appalled that he would have the temerity to cut government programs that consist of something other than “waste, fraud and abuse”.  But everyone with an IQ higher than their shorts size knows that this has to be done.  I see what’s going on in New Jersey (and to an extent, in other states) as the beginning of the fiscal revolt that has begun in this country.  At some point, that revolt will reach Washington.  We simply have no choice anymore.

March 08, 2010 11:54 AM

Nazi Music



This is a difficult subject to broach because musical tastes differ so much from person to person. While there is some music that has near-universal appeal (some of the arias from "Carmen", for instance), it also seems to be true that no two persons have exactly the same musical preferences. This is a matter of some personal significance to me as I seem to be unusually strongly moved by music. Fortunately, there have been and still are some women in my life who do have largely similar feelings to mine about music. One dear friend once said to me: "I could forgive you anything because of the way you feel about music"



So in a field that is so bound up with emotion it is both difficult and dangerous to attempt the sort of objective comments that should characterize any discussion of history. After many years of avoiding the issue, however, I think I am now at the stage where I should take a stab at it. It seems to me that everything about Nazism should be open to discussion. We gain nothing by any hobbling our understanding of what Nazism was and how it came about and wreaked such destruction.



And the first thing I want to say is that it is a grave omission to neglect music as an element in the historical appeal of Nazism to Germans. Wherever they marched, Nazi formations sang -- be they Hitler Youth, brownshirts or the armed forces. And being German, their music was very good. Germany is the home of good music. German-speaking people are responsible for something like two thirds of the classical repertoire -- from Bach and Handel to Haydn, Mozart, Beethoven, Schubert, Brahms, Wagner, Schumann etc.



As a libertariian, any form of Fascism is anathema to me but I think it was William Booth (founder of the Salvation Army) who noted that the Devil had all the good songs. And the Nazis, just because they were German DID have many good songs. There were many Fascist movements worldwide in the first half of the 20th century but none of them were remotely as musical as the Nazis.



So good music had great power to move a musical people and it seems clear to me that music was one of the things that made Germans march for Hitler. Music is however a form of communication that transcends time and space so it seems to me that there is one way that I can support my contention of the importance of music to the appeal of Nazism: I can actually play you some of the music and you can judge it for yourself. I start with the Badenweiler march. This is actually a First World War march but Hitler made it his own. It was normally played only in his presence. It announced his arrival at rallies etc. As an aside, note in the accompanying video that the German army was still using horses to some extent in WWII







The famous song of the S.A. (Brownshirts) was of course the Horst Wessel Lied. It refers to prewar street fighting with the "Reds". There is no rivalry like sibling rivalry, though after Hitler came to power, many of the Reds simply joined the Nazis. There are some interesting shots of WWII military equipment in the video.







The English translation is a poor thing but I give it below for those who understand no German.



The flag high! The ranks tightly closed!

SA march with calm, firm steps.

Comrades shot by the Red Front and reactionaries

March in spirit in our ranks.

Clear the streets for the brown battalions,

Clear the streets for the stormtroopers!

Already millions look with hope to the swastika

The day of freedom and bread is dawning!

Roll call has sounded for the last time

We are all already prepared for the fight!

Soon Hitler's flag will fly over all streets.

Our servitude will soon end!

The flag high! The ranks tightly closed!

SA marches with a calm, firm pace.

Comrades shot by the Red Front and reactionaries

March in spirit in our ranks.



The original is much more moving:



Die Fahne hoch! Die Reihen fest geschlossen!

SA marschiert mit ruhig, festem Schritt.

Kam'raden, die Rotfront und Reaktion erschossen,

Marschier'n im Geist in unser'n Reihen mit.

Die Straße frei den braunen Batallionen.

Die Straße frei dem Sturmabteilungsmann!

Es schau'n aufs Hakenkreuz voll Hoffnung schon Millionen.

Der Tag für Freiheit und für Brot bricht an!

Zum letzten Mal wird schon Appell geblasen!

Zum Kampfe steh'n wir alle schon bereit!

Bald flattern Hitlerfahnen über alle Straßen.

Die Knechtschaft dauert nur mehr kurze Zeit!

Die Fahne hoch! Die Reihen fest geschlossen!

SA marschiert mit ruhig-festem Schritt.

Kameraden, die Rotfront und Reaktion erschossen,

Marschieren im Geist in unseren Reihen mit.



Then there is Vorwärts, Vorwärts -- the quite wonderful song of the Hitler Youth. It absolutely EXUDES dedication and heroism. The power of it may perhaps be judged from the fact that it is still illegal to play or sing it in Germany today. The words are actually quite simple and that may be the reason why some commenters describe them as banal -- but those who sang it certainly did not see it that way. They lived it during the closing stages of the war -- displaying great heroism in defending their country. The idealism is probably one of the reasons why those survivors of the Hitler Youth who are still alive today often have warm memories of their time in the Hitler Youth.







I could not find a translation online so I have done a rough translation myself. I have been translating German poetry into English poetry since I was 15 but I don't have time for that at the moment. Refrain and first verse only in the video above.



Refrain:



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

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

Wir marschieren für Hitler We march for Hitler

Durch Nacht und durch Not Through night and need

Mit der Fahne der Jugend With the flag of youth

Für Freiheit und Brot. For freedom and bread

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

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

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

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



1).

Vorwärts! Vorwärts! Forwards, forwards

Schmettern die hellen Fanfaren, Blare the bright fanfares

Vorwärts! Vorwärts! Forwards, forwards

Jugend kennt keine Gefahren. Youth knows no danger

Deutschland, du wirst leuchtend stehn Germany, you will brightly stand

Mögen wir auch untergehn. We also wish to go down

Vorwärts! Vorwärts! Forwards, forwards

Schmettern die hellen Fanfaren, Blare the bright fanfares

Vorwärts! Vorwärts! Forwards, forwards

Jugend kennt keine Gefahren. Youth knows no danger

Ist das Ziel auch noch so hoch, No matter how high the goal

Jugend zwingt es doch. Youth will achieve it





2.)

Jugend! Jugend! Youth, Youth

Wir sind der Zukunft Soldaten. We are the soldiers of the future

Jugend! Jugend! Youth, Youth

Träger der kommenden Taten. Bearers of noble deeds

Ja, durch unsre Fäuste fällt Yes, through our fists fall

Wer sich uns entgegenstellt Anyone who opposes us

Jugend! Jugend! Youth, Youth

Wir sind der Zukunft Soldaten. We are the soldiers of the future

Jugend! Jugend! Youth, Youth

Träger der kommenden Taten. Bearers of noble deeds

Führer, wir gehören dir, Leader, we belong to you

Wir Kameraden, dir! We are your comrades



There is of course much more but the above will hopefully give you the idea. My apologies to any Jewish readers who may be offended by this post but Wagner is performed in Israel these days so I think the time has come when music can be judged as music, regardless of its appalling associations.



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Consider "IF"



George W. Bush had been the first President to need a teleprompter installed to be able to get through a press conference, would you have laughed and said this is more proof of how he inept he is on his own and is really controlled by smarter men behind the scenes?



If George W. Bush had spent hundreds of thousands of dollars to take Laura Bush to a play in NYC, would you have approved?



If George W. Bush had reduced your retirement plan's holdings of GM stock by 90% and given the unions a majority stake in GM, would you have approved?



If George W. Bush had made a joke at the expense of the Special Olympics, would you have approved?



If George W. Bush had given Gordon Brown a set of inexpensive and incorrectly formatted DVDs, when Gordon Brown had given him a thoughtful and historically significant gift, would you have approved?



If George W. Bush had given the Queen of England an iPod containing videos of his speeches, would you have thought this embarrassingly narcissistic and tacky?



If George W. Bush had bowed to the King of Saudi Arabia , would you have approved?



If George W. Bush had visited Austria and made reference to the non-existent "Austrian language," would you have brushed it off as a minor slip?



If George W. Bush had filled his cabinet and circle of advisers with people who cannot seem to keep current in their income taxes, would you have approved?



If George W. Bush had been so Spanish illiterate as to refer to "Cinco de Cuatro" in front of the Mexican ambassador when it was the 5th of May (Cinco de Mayo), and continued to flub it when he tried again, would you have winced in embarrassment?



If George W. Bush had mis-spelled the word "advice" would you have hammered him for it for years like Dan Quayle and potatoe as proof of what a dunce he is?



If George W. Bush had burned 9,000 gallons of jet fuel to go plant a single tree on Earth Day, would you have concluded he's a hypocrite?



If George W. Bush's administration had okayed Air Force One flying low over millions of people followed by a jet fighter in downtown Manhattan causing widespread panic, would you have wondered whether they actually get what happened on 9-11?



If George W. Bush had failed to send relief aid to flood victims throughout the Midwest with more people killed or made homeless than in New Orleans , would you want it made into a major ongoing political issue with claims of racism and incompetence?



If George W. Bush had created the position of 32 Czars who report directly to him, bypassing the House and Senate on much of what is happening in America , would you have approved.



If George W. Bush had ordered the firing of the CEO of a major corporation, even though he had no constitutional authority to do so, would you have approved?



If George W Bush had proposed to double the national debt, which had taken more than two centuries to accumulate, in one year, would you have approved?



If George W. Bush had then proposed to double the debt again within 10 years, would you have approved?



So, tell me again, what is it about Obama that makes him so brilliant and impressive? Can't think of anything? Don't worry. He's done all this in less than a year -- so you'll have three years to come up with an answer.



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



ELSEWHERE



Iceland: Voters reject plan to bail out British, Dutch bank customers: "After more than a year of watching helplessly as the Iceland financial crisis caused their government to collapse and their economy to crumble, many Icelanders woke up Sunday feeling that they finally had something to celebrate. With more than 98 percent of the ballots from Saturday’s nationwide referendum counted, more than 90 percent of voters have resoundingly rejected a $5.3 billion plan to pay off Britain and the Netherlands for debts spawned by the collapse of an Icelandic Internet bank.” [I can't for the life of me see why the ordinary citizens of a country should pay the debts of a failed commercial business]



Defiant Iraqis vote despite intimidation, killings: "The voting is done. Now comes time for counting. Officials at Baghdad’s Data Entry Center have begun counting the millions of votes that will decide which of the 6,200 candidates will fill Iraq’s 325 parliamentary seats and who will become Iraq’s next prime minister. The government imposed an 8 p.m. curfew for Baghdad.”



ACLU ad calls Obama “Bushlike”: "The possibility that President Obama could send the self-professed mastermind of the Sept. 11 attacks to a military tribunal has earned him the highest insult from the left — that he’s another George W. Bush. A full-page ad in Sunday’s New York Times left no doubt as to how the American Civil Liberties Union feels about the possibility of the president reversing the decision to send Khalid Sheikh Mohammed and his alleged co-conspirators to civilian court. ‘What will it be Mr. President?’ the ad asks in boldfaced type. ‘Change or more of the Same?’ In the middle of those words are four photos that show Obama’s face morphing into Bush’s.”



TN: Tea party gets GOP candidates’ attention: "Tea party activists have helped a Republican win Ted Kennedy’s Massachusetts Senate seat. They have propelled the Texas governor to a third nomination. And they have shaken up races in New York, New Jersey and Virginia. Can they do it this summer in Tennessee? With more than one in four Tennesseans expressing sympathy for the goals of the movement, the Republican primary for governor — and possibly also the general election — could turn on who tea party voters support in August. … Meanwhile, the movement has given hope to at least one dark horse candidate."



Busting the well-endowed: "In the face of crushing deficits, is Washington finally serious about curbing its profligate ways? The clearest indication that the answer is ‘no’ is the continued existence of the three national endowments and the Corporation for Public Broadcasting. Together, they constitute no-brainer cuts — not only because the original rationale of these programs was daft but because their impact is so negligible that nixing them requires no forethought.”



Your congressman, shaper of souls: "Aristotle’s remarks in his Politics struck me as quaint and almost silly when I first read them in college: The statesman or legislator must mold his subjects like a potter molding a vase (book 7, part 4), and must shape future citizens by prescribing their education, even down to what kind of music they should be taught (book 8, part 3). The goal of politics is to perfect virtue (book 7, part 1) according to the constitution (monarchy, aristocracy, democracy) that is best suited to the basic temperament of the citizens (book 3, part 7). At the time I laughed, thinking that the state was just an impartial referee. It caught criminals and fought our enemies. Boy, was I wrong, on both counts: The legislator of course is not an impartial referee, and the laws do shape citizens, down to their very character.”



Road to ruin: "We invented the federal Highway Trust Fund in 1956, promising motorists and truckers that all proceeds from a new federal gas tax would be spent on building the interstate system. They aren’t. Congress has expanded federal highway spending beyond interstates to all types of roadways. And ever since 1982, a portion of those ‘highway user taxes’ have been diverted to urban transit. Today, the federal role in transportation includes mandating sidewalks, funding bike paths, and creating scenic trails. As a result, spending exceeds gas-tax revenues and the Highway Trust Fund is broke. Some claim this is because the 18.3-cents-per-gallon federal gas tax needs to be raised. But drivers can fairly put the blame on the fact that 25 percent of gas-tax funds are diverted to non-highway uses.”



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



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



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



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



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

by JR (jonjayray@gmail.com) on March 08, 2010 09:35 AM

Prof. Reynolds discusses Schlitz beer and our watered-down freedom - Washington Examiner: "Consent of the governed - and the lack thereof."The main theme of the Instapundit's article is that government has become so unresponsive to the interests of the citizens, that it's brewing a deep distrust of political leaders. Although he doesn't specially note this in the article, it can be found in a

by Eric (noreply@blogger.com) on March 08, 2010 12:41 AM

More of this, please - I may hate his health care bill but whatever Obama's doing in Pakistan, keep on doing it: "Pakistan arrests American born Al-Qaeda." On to Waziristan!

by Eric (noreply@blogger.com) on March 07, 2010 10:44 PM

Brainy workers earn much more over life course



More validation for intelligence tests



Brains translate into big bucks in the workplace, according to a University of Florida study, which finds that bright people have earned at least half a million dollars more by middle age than those who are less intellectually inclined. Smart people start out with modestly higher paychecks, but their income and job status greatly accelerate over time, said Ryan Klinger, a UF graduate student in management and one of the study’s researchers. “Although we expected mental ability to influence whether someone had a more prestigious job and earned more money, we were surprised by the magnitude of the difference,” he said. “Over the course of the study individuals with high intelligence outgained those with low intelligence by more than $580,000.”



Smart people set themselves apart as they make known their quickness of mind, problem-solving skills and workplace adaptability, Klinger said. “Because of the ease and flexibility with which people with greater mental ability learn and apply knowledge to complex situations, they enjoy much steeper growth in their occupational success over time,” he said.



Klinger worked with UF management professor Timothy Judge and graduate student Lauren Simon on the national study published in the January issue of the Journal of Applied Psychology. The researchers analyzed Department of Labor data from a nationally representative set of more than 12,500 people who have been tracked since 1979 when they were between 14 and 22 years old and just entering the work force. In addition, each of these participants took an aptitude test to assess their general intelligence.



When the study began, intelligent people earned an average of $1,575 more a year than less intelligent ones, with the gap widening to $16,474 a decade later, Klinger said. The change was dramatic by 2006 with smarter employees making an average of $38,819 more per year, a difference at least 20 times that of when they started, he said.



Huge variations in occupational prestige kept pace with rises in income, Klinger said. At the end of 28 years, a person of low intelligence moved up from a job at the level of apprentice plumber to that of plumber, while a highly intelligent person rose from a position comparable in status to vehicle dispatcher to one of the same standing as a civil engineer, he said.



Not only were intelligent individuals likely to acquire more knowledge and skills through education, on-the-job training and other means, but they were better at capitalizing on their assets, Klinger said. They used additional experience along with their superior mental skills to increase on-the-job knowledge, which boosted their careers, he said. “If two people had the same level of education, the person of higher intelligence was likely to do more with that education in applying that education or training to a job,” he said.



“Put simply, it is not only the amount one learns that matters, but also the flexibility and ease with which what is learned can be applied and manipulated,” he said. “With these capabilities, the intelligent have an advantage and one that is likely to translate into higher pay and greater occupational prestige.”



The gap could widen as the increasingly specialized workplace demands intelligent workers, Klinger said. “As jobs become more complex, we can expect these advantages to increase even more,” he said.



Klinger cautions against assumptions that brains alone could seal one’s fate for life. Hard work, more education and good social skills can make great differences, he said. “It might be disheartening to think that intelligence is predetermined to a certain extent by your genes, but I wouldn’t want people to interpret our findings to mean they can be born into an unsuccessful life,” he said. “There certainly were individuals in our study who were able to compensate for their low intelligence and achieve tremendous levels of career success and likewise individuals who because of their intelligence may have seemed destined for greatness but never met those expectations.”



Even people with little intelligence who acquired additional education and training advanced farther in their careers than those who never sought those opportunities, he said. And other factors besides brains can explain much of a person’s success, such as the ability to get along well with other people, Klinger said. “Research shows that in some cases people are able to compensate for low cognitive abilities with emotional intelligence,” he said.



The study examined only how intelligence relates to measures of achievement society uses and not those of individuals, Klinger said. “People often evaluate their own success based on more internal judgments, such as whether or not they enjoy going to work every day or whether or not they have the power to make a difference at their job,” he said.



SOURCE



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Congressional estimates show grim deficit picture



A new congressional report released Friday says the United States' long-term fiscal woes are even worse than predicted by President Barack Obama's grim budget submission last month. The nonpartisan Congressional Budget Office predicts that Obama's budget plans would generate deficits over the upcoming decade that would total $9.8 trillion. That's $1.2 trillion more than predicted by the administration. The agency says its future-year predictions of tax revenues are more pessimistic than the administration's. That's because CBO projects slightly slower economic growth than the White House.



The deficit picture has turned alarmingly worse since the recession that started at the end of 2007, never dipping below 4 percent of the size of the economy over the next decade. Economists say that deficits of that size are unsustainable and could put upward pressure on interest rates, crowd out private investment in the economy and ultimately erode the nation's standard of living.



Still, the Feb. 1 White House budget plan was a largely stand-pat document that avoided difficult decisions on curbing the unsustainable growth of federal benefit programs like the Medicare health care program for the elderly and Medicaid, which provides health care to the poor and disabled.



The report says that extending tax cuts enacted in 2001 and 2003 under GOP President George W. Bush and continuing to update the alternative minimum tax so that it won't hit millions of middle-class taxpayers would cost $3 trillion over 2011-2020. The tax cuts expire at the end of this year and Obama wants to extend them _ except for individuals making more than $200,000 a year and couples making $250,000.



For the ongoing budget year, CBO predicts a record $1.5 trillion deficit. That's actually a little better than predicted by the White House, but at 10 percent of gross domestic product, it's bigger than any deficit in history other than those experienced during World War II.



The new report predicts that debt held by investors, including China, would spike from $7.5 trillion at the end of last year to $20.3 trillion in 2020. That means interest payments would more than quadruple _ from $209 billion this year, to $916 billion by the end of the decade.



SOURCE



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Tragedy Occurs. Media Rush to Blame Right-Wing



As friend of TH Allahpundit commented on Twitter, it begins:

John Patrick Bedell, whom authorities identified as the gunman in the Pentagon shooting on Thursday, appears to have been a right-wing extremist with virulent antigovernment feelings. If so, that would make the Pentagon shooting the second violent extremist attack on a federal building within the past month.

Many in the media have been quick to jump on homegrown attacks on federal buildings as evidence of "right-wing extremism," insinuating that anxiety and anger on the Right has led to these violent attacks. Apparently, anger at the prohibition of marijuana, conspiracy theories about the U.S. military's secret drug operation and quoting Marx are all symptoms of being a right-winger in the United States these days.



The media needs to be responsible in its reporting of these tragedies. And they need to own up to dishonest allegations about an entire political movement's culpability.



UPDATE via Michelle Malkin: Apparently another key indicator that you're a right-wing domestic terrorist is registering with the Democratic party.



SOURCE (See the original for links)



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Iraq intervention now cautiously applauded by the Left!



Some excerpts from an article by Marty Peretz in TNR



There are three especially compelling personal testimonies arguing that Iraq is on its way to making its own inter-ethnic and inter-sectarian history, and it will be a relatively democratic history.



The last of these judgments came today, and it came from Gordon Brown, the British prime minister who is under Tory siege in the May elections. Iraq was always an unpopular war into which Brown’s predecessor, Tony Blair, also a Laborite inhabiting 10 Downing Street, led the Brits under the command of America. Brown’s last statement in this regard, including some politic dissents from George Bush’s early Iraq policy, appears in Friday’s New York Times.



The second of these pronunciamientos comes from Tom Ricks, authoritative or especially believable because of his authorship of two critical books on the American venture in Iraq, Fiasco and The Gamble.



In “Extending Our Stay in Iraq,” an op-ed in last Wednesday’s Times, Ricks focuses on President Obama’s coming predicament. Having pledged to start removing American troops early on, Obama may find that his withdrawal will come just at a time when U.S. personnel are needed most. The president put himself long ago --during the campaign, when he played to the crowds-- in this Iraqi conundrum. In his West Point address, he repeated the promise of withdrawal from Afghanistan when our presence there could be most important. This is a tic of the president’s, as a recent TNR editorial pointed out and as Dexter Filkins argued in the same issue.



Ricks concludes that American and Iraqi leaders “may come to recognize that the best way deter a return to civil war is to find a way to keep 30,000 to 50,000 United States service members in Iraq for many years to come. ... As a longtime critic of the American invasion of Iraq, I am not happy about advocating a continued military presence there. Yet... just because you invade a country stupidly doesn’t mean you should leave it stupidly.”



In one way or another, the logic of this last sentence will be taken up by the Obami in their irresistible volte face on Iraq. It will be an embarrassment, an enormous one. But there is no alternative save shame and defeat.



Unlike Ricks, Fouad Ajami has no reason to be unhappy about the consequences of his historic arguments about Iraq. (By the way, if you haven’t already, you should read Ajami’s review in TNR of the searing Algerian novel, The German Mujahid, by Boualem Sansal.) “Another Step Forward for Iraq” is his title and his argument in Wednesday’s Wall Street Journal.



He begins with a gentle slap at Vice President Joe Biden for having “the audacity of claiming on CNN’s ‘Larry King Live’ that Iraq is destined to be ‘one of the great achievements of this administration.’” I would call it chutzpah, especially for Joe, who, despairing all through the Iraq venture, recommended a break-up of the country into three sectarian and tribal states.



In the received wisdom of those who never took to the justice or the wisdom of the Iraq war, the balance of power in the region was upended by the destruction of the Saddam Hussein regime that had presumably served as a buffer against the Iranian theocracy.



There is a better way of "balancing" Iran: a regime in Baghdad endowed with the legitimacy of democratic norms. Of all that has been said about Iraq since the time that country became an American burden, nothing equals the stark formulation once offered by a diplomat not given to grandstanding and rhetorical flourishes. Said former U.S. Ambassador Ryan Crocker: "In the end, what we leave behind and how we leave will be more important than how we came."



We can already see the outline of what our labor has created: a representative government, a binational state of Arabs and Kurds, and a country that does not bend to the will of one man or one ruling clan.



SOURCE



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



ELSEWHERE



Voters Trust GOP More than Democrats on Eight of 10 Key Issues: "Voters now trust Republicans more than Democrats on eight out of 10 key issues regularly tracked by Rasmussen Reports, but the gap between the two parties has grown narrower on several of them. Although the issue of health care continues to be at the forefront of the national political debate, voters rate health care as number five on the list of 10 important issues. The economy remains the top issue of voter concern as it has been for over two years. The only exception being last September when voters put government ethics and corruption at the top of the list. Republicans lead Democrats 46% to 41% in terms of voter trust on the economy. In early January 2009, just before President Obama took office, Democrats held a nine-point lead on this issue. More voters who make under $20,000 annually trust Democrats on this issue, but voters in higher income ranges favor Republicans."



A Big Snow Job: "As the economy continues to destroy jobs, we hear a new excuse. Frigid weather, the White House says, made the jobs report look worse than it is. Actually, even without snow, it's worse than you think. Businesses shed another 36,000 jobs during February, the latest jobs report shows, but the unemployment rate remained flat at 9.7%. This, say Democrats in Washington, is a positive sign. "Only 36,000 lost their jobs today," crowed Senate Majority Leader Harry Reid, as if losing thousands of jobs was an achievement. We're sad to say, the picture is even worse than it appears. Take that "only 36,000" figure. The real number is actually 51,000 jobs lost, because the government counts 15,000 temporary workers hired by the Census as new jobs. But these jobs aren't, in any meaningful sense, real full-time jobs. Would things have been better without all the snow? Undoubtedly. But we still would have lost jobs."



Stalin being "rehabilitated" in Russia: "Communist Party chiefs led a procession of largely elderly people across Red Square on the 57th anniversary of Stalin's death, laying flowers at his grave by the Kremlin wall. The solemn visit is an annual tradition for communists steeped in nostalgia for the Soviet era. But this year, it comes as Russia's bitter debate over Stalin's legacy sharpens ahead of May 9 celebrations marking 65 years since the Nazi defeat. For the first time in decades, Stalin's image may appear among the banners and posters that Moscow authorities put up for Victory Day, which will draw foreign leaders to Moscow as guests of the government. City plans to set up 10 information stands describing Stalin's role in the war have deepened animus between Russians who loathe him and their compatriots who love him."



Walpin scandal still alive: "An updated investigation report on the scandal known as "Walpingate" adds fuel to the suspicion that President Obama may have fired Gerald Walpin, an independent inspector general, as an illegal act of political cronyism and revenge. "Throughout our investigation of Mr. Walpin's removal, the White House has repeatedly communicated that the president was not motivated by inappropriate political reasons," said Rep. Darrell Issa, R-Calif., one of the authors of the updated report. "The fact is Gerald Walpin led an aggressive investigation of a political ally of President Obama that successfully recovered taxpayer dollars. While firing an investigator who uncovered the abuse of funds by a political ally might be considered an act of 'political courage' in Chicago politics, for most Americans it raises troubling questions." As WND reported, the White House fired Walpin shortly after the inspector general exposed sexual misconduct and gross misappropriation of federal funds by Sacramento Mayor Kevin Johnson, a prominent Barack Obama supporter."



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



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



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



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



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

by JR (jonjayray@gmail.com) on March 07, 2010 09:33 AM

Too late, I got mine! - CNBC: "Cash-strapped states delay paying income tax refunds." By the way, this is the first year I filed all my taxes electronically and I got all my refunds within two weeks. Snail mail is so 20th century.

by Eric (noreply@blogger.com) on March 07, 2010 02:55 AM

Rock 'n roll - It's a slow news night so maybe it's time for a stream of consciousness post. So tonight I've come to praise one of my all-time favorite artists: Graham Parker.I've seen Graham Parker the three times he's come to the Northampton area for a concert. Once with the Figgs, another time with a mix of backup artists, and the last time was a solo acoustic performance at the Iron Horse.

by Eric (noreply@blogger.com) on March 07, 2010 02:31 AM

by HARLEY

Locally, we have had a disturbing story, a so called man, 22 , was arrested for assault to a child. In addition to the broken arm the Doctors determined that there were 20 other bones that were broke and in various stages of healing. This is appalling i cant not fathom how anyone could do this to a 6 week old child. Words do not describe my disgust for this person., but sadly this happens all to often in our society.

IF i there was any justice in this world, this scum, after he been found guilty would be beat in a similar manner, and left to suffer, you know all old testament style.

Our legal system forbade this, and so when upon entering prison, i’m sure that word of his deeds will precede him. Prisons full of the worst scum of humanity, have their own code, and the irony is that even the worst, take a dim view to child abuse.

His prison stay will not be pleasant.

March 07, 2010 12:45 AM

by Hal_10000

In the last few years, numerous people have noted not only the huge difference between federal and private pay scales, but the huge rise in federal pay scales over the last decade.  The standard response of the federal employees is that they’re doing sophisticated high-level work while the rest of us—apparently—make a living breaking rocks into gravel.  So of course, we make less.

Bullshit says USA today:

Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds.

Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector.

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.

These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.

They have a chart showing the breakdown.  The NTEU union head continues to claim that this is unfair.  She’s now found a fallback position of claiming that while the job titles are the same, the federal jobs are harder.  To some extent, this may be true.  The federal public relations manager making $132,000 certainly has a tougher job defending useless government programs than a private sector PR flack making $88,000 for the same job.

However, as Chris Edwards, the Cato scholar who has been pilloried by fed pay apologists, notes:

One reason I’ve been suspicious of the official gap claim is that while Bureau of Economic Analysis data show that average federal wages have grown far faster than private wages in recent years, the official “pay gap” has remained very high. In 2001, the pay gap was said to be 22 percent. By 2008, the gap was said to have increased to 25 percent.

Yet BEA data show that average federal salaries rose 46 percent between 2001 and 2008, much more than the 26-percent average increase in the private sector. Since the BEA data are extremely solid, there must be something wrong with the official pay gap methodology.

In other words, the more we increase federal salaries, the more the federal employees claim they’re getting shafted.

It should be noted that these disparities are not as strong at the state and local level (except, I would suspect, in California).  This is because it’s harder to throw money at government employees when the taxpayers are within protest marching distance.

The most ominous part may be the disparity between government and private sector benefits.  Those benefits include pensions, a massive unfunded liability that is set, as I noted in an earlier post, to bankrupt the country.

March 06, 2010 01:25 PM

by Hal_10000

Yesterday was a “Day of Action to Defend Education” in California.  Students and faculty marched in protest of budget cuts to the California University system.  But, as Megan McArdle quipped, they are really protesting reality.  Here’s the WSJ:

If you went searching for the proximate cause of the “Strike and Day of Action to Defend Education,” you wouldn’t find it in any pattern of oppression. You’d find it in a couple of acts of desperation last year. First, Gov. Arnold Schwarzenegger, facing the worst budget crisis in state history, cut about $600 million in overall funding for 10-campus University of California and the 23-campus California State University. Then the U.C. regents and C.S.U. trustees, facing budget crises of their own, reduced programs, furloughed workers, and raised tuition.

...

Despite the budget cuts, California will this year devote $3 billion to the U.C. system. That’s about $13,000 per student—more than the $10,000 per student that Illinois devotes to the University of Illinois and better than double the $6,000 per student that New York devotes to the SUNY system. Yet Mr. Schwarzenegger did not denounce the agitation at Berkeley. He gave in to it.

Robinson takes apart the glib comparisons to the Vietnam protests:

We have here the vocabulary of the peace movement, of the struggle for decent conditions for migrants and other exploited workers, and of the civil-rights movement. Yet what did the protesters demand? Peace? Human rights? No. Money. And for whom? For the downtrodden and oppressed? No. For themselves. At a time when one American in 10 is unemployed and historic deficits burden both the federal government and many of the states, the protesters attempted to game the political system. They engaged in a resource grab.

Even Stephen Bainbridge, who, like many faculty, is taking a pay cut, is having none of this.  He particularly takes issue with the desperate attempts by the protesters to inject race into it (come on, you saw this coming).

The UC system was one of the first in the country to adopt affirmative action programs. Granted, Proposition 209 resulted in a decline in black and hispanic enrollment at the UC schools. Yet, the regents and virtually all administrators have consistently opposed 209. Indeed, many suspect that policies like comprehensive admission review were intended to end-run (some would say cheat) Prop 209.

Look. I’m as frustrated as an UC stakeholder with the state of affairs. It would be nice, however, if our students could put their energy to something more useful than unconstructive whining.

Now, I’ll pause while you re-read the links HL and I posted on the Greek situation, where protests over exploding over cuts in bonuses for government employees.

California education is supposed to be free, but that hasn’t been the case for a while.  The students are screaming about fees going up 32%, but that’s only because they were so low to begin with.  As noted above, they are getting ten grand a piece from the State.  Maybe numbers are different in California.  But where I come from, ten grand can buy one hell of an education (to say nothing of grants, scholarships and the Federal government’s open-ended commitment to cheap subsidized loans).

We’re again seeing the entitlement mentality at its worst.  Maybe it’s not fair that the State is failing to fulfill its supposed commitment to free higher ed.  But that’s the way things are, fair or unfair.  If the students want to really vent their frustration, why don’t they go the state employee’s unions who are sucking the state coffers dry?

March 06, 2010 09:49 AM

Obama wants to give America its own chairman Mao



An arbitrary and authoritarian Left-wing extremist with no respect for the law has no place as a judge



Paul has written here and here about Goodwin Liu, a left-wing law professor whom President Obama has nominated to the 9th Circuit Court of Appeals. To say that Liu is thinly qualified would give him too much credit, as he has scarcely ever practiced law at all. Now, an attack Liu launched against John Roberts in 2005 has surfaced and has raised new questions about his nomination.



When President Bush first nominated Roberts to succeed Sandra O'Connor, Liu responded with an attack that tells us nothing about Roberts but a great deal about Liu. First, Liu criticized Roberts' associations:

Before becoming a judge, he belonged to the Republican National Lawyers' Association and the National Legal Center for the Public Interest, whose mission is to promote (among other things) ``free enterprise,'' ``private ownership of property,'' and ``limited government.'' These are code words for an ideological agenda hostile to environmental, workplace, and consumer protections.

Private property, free enterprise and limited government are "code words"? No one holding such a bizarre, anti-Constitutional view should hold public office in any capacity, certainly not as a judge.



Liu went on to attack an opinion that Roberts authored as a judge on the D.C. Circuit Court of Appeals, the famous "french fry" case, Hedgepeth v. Washington Metropolitan Area Transit Authority. You might have to be a lawyer to fully appreciate the dishonesty of Liu's description of the case and of Roberts' opinion:

Last year, for example, he wrote an opinion rejecting the civil rights claims of 12-year-old Ansche Hedgepeth, who was arrested, searched, handcuffed, booked, and detained by police for eating a single french fry in a subway station in violation of D.C. law. Although an adult committing the same infraction would have received only a citation under D.C. law, Roberts said the police's treatment of Hedgepeth served the "goal of promoting parental awareness and involvement with children who commit delinquent acts."

From Liu's account you might think that Roberts was the D.C. official who wrote the law, not a judge called upon to rule on its constitutionality. Here is how Roberts began his opinion on the case:

No one is very happy about the events that led to this litigation. A twelve-year-old girl was arrested, searched, and handcuffed. Her shoelaces were removed, and she was transported in the windowless rear compartment of a police vehicle to a juvenile processing center, where she was booked, fingerprinted, and detained until released to her mother some three hours later -- all for eating a single french fry in a Metrorail station. The child was frightened, embarrassed, and crying throughout the ordeal. The district court described the policies that led to her arrest as "foolish," and indeed the policies were changed after those responsible endured the sort of publicity reserved for adults who make young girls cry. The question before us, however, is not whether these policies were a bad idea, but whether they violated the Fourth and Fifth Amendments to the Constitution. Like the district court, we conclude that they did not, and accordingly we affirm.

Roberts did, here, exactly what a judge is supposed to do--not impose his own opinion as to whether a law or ordinance is foolish, but evaluate its constitutionality according to established principles and precedents. It is worth noting, too, that Liu described Roberts' opinion in this case as though it were outside the mainstream, while in fact Roberts wrote for a unanimous court, and every judge who looked at the case ruled the same way. Liu here betrays the arrogance of the left-wing academic: anyone who disagrees with me is an extremist, even if his disagreement represents a consensus among competent jurists.



This is the section of his opinion in which Roberts evaluated the constitutionality of the D.C. no-food-in-the-Metro ordinance:

On cross-motions for summary judgment, the district court ruled in favor of the defendants. Hedgepeth v. Washington Metro. Area Transit, 284 F.Supp.2d 145, 149 (D.D.C.2003). Addressing the equal protection claim, the court applied "the highly deferential rational basis test," id. at 156, because it found that age is not a suspect class, id. at 152-53, and that there is no fundamental right to be free from physical restraint when there is probable cause for arrest. Id. at 155. The court then ruled that both the District's no-citation policy for minors and WMATA's zero-tolerance policy survived rational basis review.



Rational basis review applies and we accord the challenged policies a strong presumption of validity. We will uphold them "if there is any reasonably conceivable state of facts that could provide a rational basis for the classification." ... We conclude that the no-citation policy for minors is rationally related to the legitimate goal of promoting parental awareness and involvement with children who commit delinquent acts.



Issuing a citation to a child is complicated by the fact that there is often no ready way to ensure that the child is providing truthful or accurate identifying information. A child often will not be carrying a form of identification, and there is nothing to stop one from giving an officer a false name -- an entirely fanciful one or, better yet, the name of the miscreant who pushed them on the playground that morning. In this situation parents would be none the wiser concerning the behavior of their children. The correction of straying youth is an undisputed state interest and one different from enforcing the law against adults. Because parents and guardians play an essential role in that rehabilitative process, it is reasonable for the District to seek to ensure their participation, and the method chosen -- detention until the parent is notified and retrieves the child -- certainly does that, in a way issuing a citation might not. The district court had and we too may have thoughts on the wisdom of this policy choice -- it is far from clear that the gains in certainty of notification are worth the youthful trauma and tears -- but it is not our place to second-guess such legislative judgments. See City of New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2516-17, 49 L.Ed.2d 511 (1976) (per curiam) (rational basis review does not authorize the judiciary to sit as a "superlegislature").

Far-left professors like Goodwin Liu don't seem to understand that a judge's role is not to serve as a dictator, imposing left-wing policy preferences on an unwilling public and an "unenlightened" legislature.



One last quote from Liu's self-revelatory attack on Roberts:

In addition to weakening key environmental laws, Roberts's theory of limited federal power would potentially undermine bedrock civil rights laws, including the Civil Rights Act of 1964.

"Roberts's theory of limited federal power"? Has Liu ever read the Constitution? Did he actually attend law school? If so, was he not taught that ours is a government of limited powers? It is shocking that President Obama would nominate an extremist like Goodwin Liu, who expresses outright hostility to the most fundamental principles of our democracy, to the federal bench. Republicans, as well as Democrats who understand that we do, indeed, have a government of limited powers, should do everything possible to defeat his nomination.



SOURCE



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Intellectuals Step 'Off The Cliff,' Drag Rest Of Us Down



Smart people should make smart decisions. So why do the best and the brightest always seem to create more problems than they solve? This is not just an academic question, precisely because academics dominate the Obama administration and its approach to such key issues as health care and Iran's pursuit of nuclear weapons. Renowned economist Thomas Sowell argues that intellectuals have strong incentives to step out of their area of expertise and "off a cliff." Ultimately, everyday people pay the price when intellectuals and abstract concepts trump real-world specifics. Sowell explores these topics and more in a wide-ranging IBD interview regarding his latest book, "Intellectuals and Society."



IBD: How do you define intellectuals?



Sowell: I define intellectuals as persons whose occupations begin and end with ideas. I distinguish between intellectuals and other people who may have ideas but whose ideas end up producing some good or service, something that whether it's working or not working can be determined by third parties. With intellectuals, one of the crucial factors is their work is largely judged by peer consensus, so it doesn't matter if their ideas work in the real world.



IBD: What incentives and constraints do intellectuals face?



Sowell: One of the incentives is that, to the extent that intellectuals stay in their specialty, they have little to gain in terms of either prestige or influence on events. Say, an authority in ancient Mayan civilization just writes about ancient Mayan civilization, then only other specialists in ancient Mayan civilization will know what he is talking about or even be aware of him. So intellectuals have every incentive to go beyond their area of expertise and competence. But stepping beyond your area of competence is like stepping off a cliff - you may be a genius within that area, but an idiot outside it.



As far as the constraints, since their main constraint is peer consensus - that's a very weak constraint on the profession as a whole. Because what the peers believe as a group becomes the test of any new idea that comes along as to whether it's plausible or not.



IBD: You say that most intellectuals believe in the "Vision of the Anointed." What does that mean?



Sowell: It's the theory that there is an elite group of people who are very knowledgeable and their knowledge should be used to guide the decisions of society. So they are not simply an elite in the sense that sinecurists might be an elite, but they are elite with an anointed role in the world. To put it uncharitably, as someone once said, "Born booted and spurred to ride mankind." Examples of that would not be hard to find in Washington, D.C.



IBD: Why shouldn't intellectuals make decisions for the rest of us?



Sowell: Because they don't know as much as the rest of us. It's one of those non sequiturs. They have more average knowledge than the average person in the limited sense in which knowledge is usually spoken of by intellectuals. But the knowledge that has consequences in the world includes vast amounts of knowledge that I call mundane knowledge and probably no one on earth has 1% of that knowledge. Yet that knowledge is consequential, and it includes knowledge that is in no way intellectually challenging but is nevertheless crucial.



Much more HERE



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Obama's foreign policy: Mostly Hope



After more than a year in office, the Obama foreign policy based on hope has run its course. Time after time, the administration has pursued a policy of pre-emptive concession rather than hard bargaining, with predictable results. In Europe, the U.S. simply walked away from a defensive missile shield in an effort to hit the "restart" button with Russia. Our allies, Poland and the Czech Republic, who had counted on our commitment, were hung out to dry.



In the Middle East, the U.S. has hectored our best ally in the region, Israel, while assiduously courting Syria. The "open hand" that was so flamboyantly extended to Iran was also offered to Syria. Bashar al-Assad didn't get a videotaped New Year's message from the president, as the mullahs did, but a procession of high-ranking diplomats has trooped to Damascus to offer better relations, trade agreements, and diplomatic recognition. Without preconditions, the administration decided to name a U.S. ambassador to Syria for the first time since 2005, when the U.S. withdrew its ambassador to protest Syria's role in the assassination of Lebanese Prime Minister Rafik Hariri. The administration might have asked for any number of commitments in exchange -- an end to support for insurgents in Iraq or cutting off aid to Hezbollah and Hamas -- but it chose hope instead.



Secretary of State Hillary Clinton did make one request, though -- that Syria reciprocate for these gestures by distancing itself from Iran. Last week, al-Assad responded. Hosting Iran's president, Mahmoud Ahmadinejad, in Damascus, al-Assad ostentatiously signed a treaty of friendship with Iran and said of the secretary of state's request, "I find it strange how they talk about Middle East stability and at the same time talk about dividing two countries." Further mocking her, al-Assad joked, "We must have understood Clinton wrong because of bad translation or our limited understanding, so we signed the agreement."



The administration has been similarly accommodating toward China, starting with Secretary Clinton's February 2009 declaration that human rights issues in China "can't interfere with the global economic crisis, the global climate change crisis, and the security crisis." The president followed up by declining to see the Dalai Lama before his November trip to China (though, he did finally host him last month). While there, Obama tamely agreed to speak before an audience of carefully chosen communist party students, without any assurance that his comments would be broadcast live.



The president's defenders argued that the soft approach to China would yield dividends in other areas -- such as Chinese support for tough sanctions against Iran. That fond expectation is now being tested.



Late, very late, the Obama administration has gotten around to the arduous process of pursuing sanctions on Iran. In May 2009, the president said "we're not going to have talks forever" and estimated that "by the end of the year," he'd re-evaluate. In July, watching the regime's thugs shoot down protesters in the streets, he accelerated the timetable slightly, saying that the Iranians would need to prove their bona fides by September.



Something did happen in September: Word reached Obama and other world leaders that Iran had built a secret nuclear enrichment facility outside the city of Qom. The president was scheduled to address the United Nations on Sept. 24 and preside over the Security Council the next day. It would have been a perfect moment to confront Iran about its duplicity, abandon the policy of "engagement," and rally international support, as French president Nicolas Sarkozy urged. But the president said nothing. He didn't want the "diversion" of Iran to detract attention from his nuclear disarmament message. This prompted Charles Krauthammer to note the president's achievement in getting to France's left on foreign policy.



Now the administration is hoping to get United Nations backing for a series of sanctions reportedly including choking off access to international credit and limiting oil exports. Are the Russians and Chinese on board? Spokesman Robert Gibbs has been long on hope, touting "the resolve and unity of the international community with regard to Iran's nuclear program."



But this week, the Chinese told the Security Council that there is still room for diplomacy, and the Russians advised that there is "still a horizon" for negotiations. This is what comes of using a smile for your umbrella.



SOURCE



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"Coffee Party" Leftism covered up



John Roberts and Kiran Chetry omitted mentioning that Annabel Park, the founder of the so-called Coffee Party, worked as a volunteer for President Barack Obama's presidential campaign, during an interview on Wednesday's American Morning. The anchors also didn't mention Park's past work for the liberal New York Times.



Roberts and Chetry interviewed the Coffee Party USA founder at the bottom of the 8 am Eastern hour. After an initial question about the origin of the name, the two asked about the principles of the nascent movement and if health care "reform" was going to be a major issue for it. In her last question to Park, Chetry did ask if the Coffee Party had any ties to a political party: "[T]he tea party movement really, in some ways, has been a challenge to Republicans to move more toward fiscal conservative ideals. Are you aligned with a party? I mean, as we know, passing health care reform has been a huge goal of liberal Democrats for decades. Are you aligned with the Democrats, trying to get them more to move to the left when it comes to health care?"



The founder denied that her movement was aligned to any party, and actually criticized the longstanding two-party system in the United States as being "incredibly outdated." In reality, as William A. Jacobson of Legal Insurrection blog exposed, Park worked for one of the two parties, as an organizer and operator of the United for Obama video channel on YouTube (NewsBuster P. J. Gladnick blogged about Jacobson's expose on Tuesday evening). As the United for Obama page admits, "We are a network of Obama volunteers from all across the country and from all backgrounds working together to support Obama's message of unity and change....Some of us are filmmakers and we created this page to amplify Obama's message on YouTube...The filmmakers include...Annabel Park..."



More HERE



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Bizarre Bachmann Obsession Strikes Again: Lefty Group Introduces Derogatory Comic Book



Latest liberal attack on congresswoman already in its third issue



You got to wonder, what is it with this relative congressional backbencher that drives lefties so crazy? Throughout Rep. Michele Bachmann's, R-Minn., two terms in the U.S. House of Representatives, she has been target of liberal scorn - from the great mind of MSNBC's Ed Schultz to the bomb-throwing commentator parading as a pseudo-investigative journalist known as Matt Taibbi. But this latest round of Michele Bachmann derangement syndrome actually required time and effort - a comic book dedicated to denigrating the representative from Minnesota's 6th Congressional district.



The comic book series is called "False Witness! The Michele Bachmann Story" and is up to its third issue. The first issue laid a foundation for future misogynistic exploits by the creators and the second issue took direct quotes from Bachmann to prove anecdotally she's a "right-wing lunatic." And in the latest installment, the creators wear their feelings on their sleeves about Bachmann's stand for traditional marriage instead of supporting a pro-homosexual agenda.



Eric Kleefeld of the left-wing news site Talking Points Memo reviewed the third issue and concluded this "art" made a "serious point" about Bachmann - not that she actually believes what she says, but instead she is just operating to advance her own political career.



"As for the treatment of the subject matter, the creators set out to make a serious point: That Bachmann has advanced her career on a platform of singling out a group within society for hatred and ostracism, and that this is a highly dangerous thing to do," Kleefeld wrote.



For those that think this type of political art is something that would fit into their collection - a misogynistic angry screed about a relative newcomer to the U.S. House of Representatives, the each of the issues are available for $4.95 through PayPal on the creators' Web site.



SOURCE



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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 06, 2010 06:54 AM

Twenty trillion dollars of debt. That's with a "T" - The CBO has scored the Obama administration's budgets and there's nothing but red ink, deep and wide: "Under the President's budget, debt held by the public would grow from $7.5 trillion at the end of 2009 to $20.3 trillion at the end of 2020." That would be 90% of GDP, well into the debt danger zone, not even counting the budgetary disaster

by Eric (noreply@blogger.com) on March 06, 2010 03:14 AM

You showed him! - Paul Krugman mounts his moral high horse and slaps down the views of...Paul Krugman.

by Eric (noreply@blogger.com) on March 06, 2010 01:01 AM

I'm in Boston - I don't know how anybody commutes into or out of Boston. The traffic was insanity.

by Eric (noreply@blogger.com) on March 05, 2010 11:17 PM

WASHINGTON (AP) - The gunman who shot two Pentagon police officers was heavily armed and spent weeks driving to the Capital area from the West Coast, authorities said Friday. Resentment of the U.S. government and suspicions over the 9/11 attacks have surfaced in writings by the Californian identified as the man fatally wounded in a hail of return fire.

March 05, 2010 02:04 PM

WASHINGTON (AP) -- President Barack Obama is trying to achieve a health care overhaul the way he once said it couldn't, and shouldn't, be done.

March 05, 2010 02:04 PM