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Monday, February 28, 2011

Tea Party betting that Gays are good for at least one more election cycle

Putting the losers in Liberty, Tea Party boosted GOP will double-down on the gays is 2012, right at time of NH primaries.

Question of the Day


Why won't Gov Walker's posse balk?

We can gather why the Democrats hang together, facing unique opprobrium if they bust.

But, on the Tea Party side, what is the cost of agreeing with 60%+ of the populace that Walker's power consolidation ploy is ugly?

Sunday, February 27, 2011

Ahead of the curve

Polls like this suggest to me that gay groups should/could put their own ballot initiatives up, if possible, to pre-empt another Maine or California...

Can Congress Put Taxpayer Dollars into Private Lawfirms to "Defend DOMA"?


So far, my research is turning up that it has to be the two legal offices of the Congress who will become funded/responsible for being a party to any appeal(s) of DOMA actions.

However, I have to say, it does look like individual Congresscritters might have wiggle room to intervene and that could mean that they could hire ADF, PJI, or some other polarizing legal group. It's not clear, however, that they could use taxpayer dollars to do so, if they chose to intervene in this way; but there is no class of people more ingenious than the Congress when it comes to spending other people's money, so I'll bet they find a way and later that way is declared unethical after-the-fact.

More to come, no doubt, by those with far more resources to research this than I have ...

It does seem that both houses of Congress can intervene independently of another, too. Again, consider that speculative, but so far, that interpretation seems to fit. It's not clear whether any voting is required to commit the time/resources to becoming involved.

[No information whether any litigants are excluded, based on their representation in other lawsuits.]

Tea Party Crony Capitalism and Phony Capitalism

Told you that pulling a "Chris Christie" wasn't going to fly in Wisconsin.

See here (FLKR user has a bunch of really clever signs from yesterday's protests). They are wise to his brand of phony capitalism.

And the crony capitalism, exempting police, firemen, and, at the national level, exempting the military burgeoning benefits packages makes them at least as opportunistic as anything else, yes?

[Governor] Walker, 43, has finely honed people skills, according to those who know him. The son of a Baptist preacher, he still refers to himself as "PK''-- preacher's kid -- and grew up in the small town of Delavan, with life a little like a "fishbowl."

He was an Eagle Scout, played high school sports and was in the band. His career at Marquette University was abbreviated. He compiled a 2.5 GPA and left short of getting his undergraduate degree to take a job in marketing with the Red Cross.

Saturday, February 26, 2011

GOP's Farce on Family Values

Noted in passing, as the GOP lose sight of people, again, in craven pursuit of purity and the politics of power:

97% of Planned Parenthood’s services are NOT abortions, but rather cancer screening and prevention, STD testing and treatment, contraception and general women’s health care, ranging from high blood pressure to urinary tract infections.

Friday, February 25, 2011

Does Beck Deserve an FBI file?

I haven't read Rumsfeld's book, yet, but does he cover this infamous quote?:

“Gog and Magog are at work in the Middle East…. The biblical prophecies are being fulfilled…. This confrontation is willed by God, who wants to use this conflict to erase his people’s enemies before a New Age begins.”

- George W. Bush, allegedly to the French President Jacques Chirac

State Run Television in America

Reports that no labor leader booked for Sunday political shows. Not one.

While the guest list for the major Sunday talks shows on NBC, CBS, ABC, CNN, and Fox News have not been finalized, at this point there are zero labor spokespersons booked, but many representatives of the Republican Party.

Continue reading on Examiner.com: Major Sunday talk shows book Republican governors but no union spokesperson - National Political Buzz | Examiner.com

Never Letting a "Crisis" Go to Waste

In case anyone needed any more "proof" of the intent of Wisconsin's start-up Governor.

Growing niche for journalists?: publishing core dumps


That makes it look like someone was given room to just "leak" on the pages ofRollingstone.
I've looked at the RStone bit that "psyops" tactics were used on visiting Congresscritters. This lead national news reporters like Chris Matthews to use the word "Brainwashed" and allude to "Manchurian candidate".


So, far, it appears that they built dossiers on visitors. You know, like the kind of information that anyone would ask of their staff or even the people doing "opposition research".

There is a throw-away line that some General is more interested in his career than defeating the Taliban. That makes it look like someone was given room to just "leak" on the pages of Rollingstone.

Does Michael Hastings and/or Rollingstone really think the course of history is changed because someone knows that Sen Lieberman, say, likes flattery? And, even so, this is impermissible because ...

A Siege of Tripoli?

Will it come down to street fighting in Tripoli?

Andersen Cooper has amazing first-person coverage tonight, giving psychological and moral portrait of the conflict.

So, let me ask the question: do you authorize and take a drone strike on Gaddafi, IF it saves the suffering (and wealth) of a city as large as Tripoli?

Do you put in a call to the regrettable Elliot Abrahms, uh, er, "the specialist"?

The "everpresence" of Newt Gingrich

Just a very, very short while ago, he was calling for "doubling the State Department", which might cost a cool $20-30 billion.

Today, he's making the rounds, talking about Tea Party cuts of $100 billion, and "news anchors" don't ask him, "Say, Newt, do you remember when ...?"

Thursday, February 24, 2011

Pirates near Chesapeake Bay Can Get Married

Not photoshopped:

Apparently, there is a hero of sorts in MD, too:

"One Republican senator joined 24 Democrats to give the bill the 25 votes it needed to pass"

Update: Senator Allan Kittleman, Howard County

Are you overpaid?


In most contexts, the whole point of this question is to have people looking over each other's shoulder, to hold each other back. True?

  1. 1. Reihan thinks he's being bold, with this. But, did he stop to ask if the conclusion isn't that private workers are underpaid? I don't mean that to be flip.

  2. 2. Meagan has my eyes popping over this: "adjusting for worker quality, the median government worker is probably overpaid".

    What's she going to do/say when she gets around to justifying executive pay and those who do actually get obscene pension and post-retirement benefit packages? Also, I wonder how one rank-orders the "skills" required to hold together a classroom of 20+ of today's kids.

  3. 3. Even though being misleading, this potentially rises to the level of true insight: "When pensions are underfunded, compensation from pensions is underestimated."

    A pension can be underfunded in more than a few ways, but the insight here appears to be that authors of one study used what was paid into the fund instead of what should have been paid into the fund.

    It's possible, but I find that unlikely, because they are stating things in terms of rates (e.g. 8% of salary).

    Given that it is an AEI author, one has to ask for the actual figures, rather than a rule of thumb. It would be impermissible double-counting to include underfunding that was the result of States that "skipped" payments, for one reason or another, and that's what it appears the rule of thumb does.

If you really want to go see who is highly compensated public employee, look at the military and include training. Not to pick on them, but just sayin' that it is not okay for T-people to have their sacred cows. Politically, that's more important, perhaps, than trying to split 5% or even 10% compensation differential...

Anyway, the real action is in health care costs, including post-retirement health care costs. Of course, a single-payer system would immediately equalize all that, but you can't say that aloud, because that's not one of the solutions that is rhetorically/ideologically permissible.

Q: Did "Koch Brothers" send troublemakers to Town Halls on Healthcare?

(See how that headline works? We're all "learning" from FOX... I know, I used quotation marks - I... I... just couldn't not.)

The Looming Federal Gov't Shutdown


Seems unlikely that the national Tea people would be keen on staging a shutdown while the showdown in WI continues.

Picture Boehner trying to pull off an act of justified outrage, non-cooperation, while condemning others for the same.

DOMA Section 3 - What it's all about

From GLAD, the true community pioneer-winners from yesterday's historic shift in Executive intent:

As always, special thanks to those who put it all on the line in these suits, which, no doubt, involve all manner of intrusion and patience.

The Flint Sit-Down Strikes of 1936

While Hitler was busy abolishing unions, they were getting started in the U.S.

On Labor Day, unlike other national holidays, you don't find the networks running retrospectives...

The Spit Shine is no labor history buff, but you gotta know what you don't know, so here is:

The Flint strike , though it was precipitated by local conditions—a fierce unrelenting speed up on the GM assembly line, the involvement of a Ku Klux Klan-like organization called the Black Legion in suppressing labor unrest in GM plants—was part of a national movement to win bargaining rights for industrial workers.

Palin to Embark on Delusional Trip to India


I ... I ... am almost speechless, that she honestly thinks she can singlehandedly run a "shadow Presidency".

What are her contacts in India?

Can you imagine the one-liners that are going to fly, if Hillary cuts loose on her?

Family Values


While everyone who needs to make some kind of "statement", for political reasons, about their moral rectitude concerning family values, on the heels of the decision to no longer defend DOMA section 3 in court, it pays to focus on how helping families is good for business and how 'budget priorities' are not inimical, except in the minds of some:

The federal Family and Medical Leave Act (FMLA) enables US workers with new children or family members with serious medical conditions to take unpaid job-protected leave, but it covers only about half the workforce. According to the Bureau of Labor Statistics, only 11 percent of civilian workers (and 3 percent of the lowest-income workers) have paid family leave benefits. Roughly two-thirds of civilian workers have some paid sick leave, but only about a fifth of low-income workers do. Several studies have found that the number of employers voluntarily offering paid family leave is declining.

California and New Jersey are the only two states with public paid family leave insurance programs. Both are financed exclusively through small employee payroll tax contributions. According to a newly released study of the California program conducted by researchers at the Center for Economic and Policy Research and the City University of New York, employers overwhelmingly reported that the program has had a positive or neutral effect on productivity, profitability, turnover, and employee morale. Small businesses were less likely than large ones to report any negative effect. Studies from other countries similarly have found that offering paid leave is good for business, increasing productivity and reducing employee turnover costs.

Read it all, from HRW (and blame the French, but at least there are numbers!).

Wednesday, February 23, 2011

These are real

Bombshell for history.

I've listened to thousands of conference calls. I have to say that my opinion is that these calls in which a blogger pretends to be David Koch to get Governor Walker to chat at length sound authentic.



Why high benefits but low salaries suit public sector employees

Face it, you don't join most elements of the public service if you are looking for "promotion opportunities", i.e. salary growth. What's more, the nature of the work is not often not described as "creative".

Therefore, the types of people attracted to these jobs are so-called "lifers", in personnel speak.

Thus, they will value benefits and stability, more than salary.

FOX is now "Al-jazeera of America"

When was the last time you saw a "news" organization protested in America?!

What is a "bloated" pension system?


What is the optimal amount that a company should contribute to rank-and-file "pensions"? The answer is zero, especially for the most competitive labor markets
As GOP-Tea ramp up their rhetoric, I'll try to keep the reply brief ('cause there is a lot to read, by a lot of people suddenly writing about it).

What is the optimal amount that a company should contribute to rank-and-file "pensions"?
  1. 1. The answer is zero, especially for the most competitive labor markets. (A special exception for start ups, for which you can promise the world.)
  2. 2. After that, the answer is 'as little as you can get away with', which may hardly be "enough" for anyone to "secure" their old age needs, right? One way to get away with "a little" is to churn the labor force, periodically while basing "benefits" on years-of-service or creating exclusionary periods (e.g., nothing until you've worked for two years).
Last, you get rid of defined-benefit obligations, because they are like having 30-year+ debts. If your company goes through a period of good times, you might pass out some pension obligations that you regret during slack times. Better to use defined-contribution, because then, the employee takes the whole risk, not the company's creditors.

So, when you read this, below, you know the yardstick is just arbitrary nonsense, a non-rationale, a non-critique, simply a statistic pulled out of the air for maximal rhetorical advantage:

benefits packages for the state’s employees are 41 percent more expensive than those offered by the average Fortune 500 company.

What's a better way to benchmark it?

Put it in these terms: At 15% forced savings, i.e. 'pension contribution', you can work 30 years and retire for 12 with 65% of current salary, say (you run the numbers). If the average life expectancy at retirement is 88, then the retirement age should be 76 (except that would imply starting work at age 46, so you have to jigger the calculations until they fit).

If life expectancy rises, does that mean the retirement age *must* go up, too? No. The standard of living could rise, so that 15% savings allows one to retire for a longer period.

Could a formula be devised so that we can get the politicians hands off it, mostly? Yes.

Gingrich advising Walker

You know that means it is going to the mattresses, right? (no pun intended)

Question of the Day

After all these years, now, since Iraq and our single focus on the region, do American journalists understand the religious reason why the chaos in the region must be blamed on "foreign elements"?

GOP-Tea Economic "Solutions" - Wage indexing (and back door wage cutting)


First, it's just stupid to ask employees to "contribute" to their healthcare premiums, apart from, say a co-pay. Why pay people, just to take it back in the form of a "contribution"?

What's really going on?

Well, the GOP-Tea appear to have thrown in the towel on any prospect of health cost containment, because, the effect of their proposal is to say that wages will fall as health costs rise, so that budgets don't get out of balance (and the richest won't be asked to pay new taxes to re-balance).

The current danger? Adding union-wage "brinkmanship" to the equation:

Milton Friedman's teacher Jacob Viner always argued that it was "unbalanced deflation" -- i.e., declines in asset prices and wages and incomes while debts remained the same -- that was the cause of the Great Depression. So did monetarist school founder Irving Fisher.

Ask yourself: if everybody's salary in America were to be cut right now by 25 percent -- but everyone's mortgage payment, everyone's credit card balance and interest payment, and every corporation's debt interest payments remained the same--would we see a recovery or another chain of financial bankruptcies that would push the economy down further?

Budget Myths

Current GOP Talking point: We must engage in some type of tax reform favorable to business, so that our cities and states can compete to keep companies here.

We can cut taxes to become competitive? Really?

No way that American labor costs are competitive with Southeast Asia or Mexico, right?

While total hourly compensation costs for manufacturing workers
increased more rapidly in China than in the United States
between 2002 and 2004, hourly compensation per employee in China 3 percent of the level in the United States

That's not a typo. (Yes, I know the situation is dynamic...).

On wage differentials that big, quibbling over the corporate tax rate is meaningless! It's a put-up. Unfortunately, I heard a liberal talking-point person parroting the myth.

And it's not just labor rate differentials. We're competing with "special financing" available to make capital costs less, even if the risks are higher:

El-Hillow [CEO Evergreen Solar] says manufacturers in China have received massive government grants and loans to inexpensively ramp up production while keeping costs down.

Tuesday, February 22, 2011

Shorthand: Tea-Party Logic

Fraud on Wall Street => we have to bust the unions ("they're broken")

This is what passes for leadership on the Right in America? (I feel like Israel: "There is no partner for sanity").

But it goes further.

What is the "correct" response to fraud and 'too big to fail' in the financial system?

GOP Ans:
  1. 1. defund the consumer financial protection bureau, CFPB
  2. 2. insist that the largest insitutions get even more humongous, by terminating FannieMae and FreddieMac (remember, with the collapse and acqusition of Bear, Lehman, Merrill, Wachovia, WAMU, the largest already got something like 20% larger than before).

Considering the History of Labor Suppression

Question of the Day:

Obama should make a move, soon, before the stakes go up.

'Cause soon enough, the "Pinkertons" are going to get involved and/or everyone is going to get hauled into court, 'pretextually' or otherwise.

Update1: Yup. Watchers say 500 police reportedly en route.

Before you shut down the government, Mr. Boehner

How much does TRICARE cost public employees in the military?

A Tale of Two Cities

Nothing shows the greater contrast in American politics than, say, Jennifer Granholm and the freakish leadership of Wisconsin start-up Governor Walker.


Visit msnbc.com for breaking news, world news, and news about the economy


Visit msnbc.com for breaking news, world news, and news about the economy

I'm sure Walker isn't 100% bad. But, this is not media-bias. There is clearly a 100% difference in leadership, in capability, in vision.

Add this in, too:

There have been times when the Dems strongarmed; but, seriously, for all his faults, this is not the tone that Obama or the Democrats have set, nor does the situation demand it. It really does seem to be a path set for its own sake.

We can say it now

Libya will be the ugly one, from the get-go.

(Irresponsible to say it in advance. Plus, I got thrown off by Bahrain, which surprised me.)

I think the house of Saud will be okay, almost completely, apart from the ever present Yemeni unrest.

Tweet of the Day From Richard Nixon

@TeaPartyExpress and the rest of you sonsofbitches I tried wage controls too! - Richard M. Nixon

Tea Party to America: "Everybody take a wage cut"


Trapped by their incoherent political posturing on taxes, the Tea Party in Wisconsin and soon elsewhere will turn to wage cuts.

In terms of your own personal wealth, can I ask, "What is the difference between taking a wage cut that you won't recoup for a long time and, say, paying a one-time tax for an economic stimulus?"

[This is why some commentators don't get it. It IS rational for individuals to want the risk of a stimulus versus the risk of wage cuts that only induce more rounds of wage cuts.]

GOP to America: "We have to fire people to create jobs"

Ranks up there with "we had to destroy the village in order to save it."

Monday, February 21, 2011

Worst Budget Chart Ever Competition

I'm investigating Paul Krugman's chart (above).

I can tell you right now that he did not include VA costs, which are important not because veterans are the first place to go looking for savings, but to capture the 'long-tail' cost of military obligations.

Also, it is best to use the on-budget figure for total outlays. (It's the only way to get to a consistent application of trust fund accounting inside the budget concepts - although it is never clear to me how "off budget" receipts and interest are presented).

Can strange benefits logic justify wage cuts?

Here are Governor Walker's (TP, Wisconsin) magic numbers:

...require state employees to pay about 5.8% toward their pension (about the private sector national average) and about 12% of their healthcare benefits (about half the private sector national average).

Why does one pay workers and then turn around and collect what you just paid them?

Usually such weirdness is explained by tax distortions, but I don't see one operating, off-hand.

People might look at those numbers and conclude that public employees are getting a good deal versus everyone else. But, if you compare total benefits (salary plus wages), it appears that is not the case.

Put another way, "national average contribution rates" are just arbitrary nonsense, right?

The only thing one can surmise, off hand, is that it is a way to mask wage cuts.

Budget Leadership: Why it is not cynical to demand GOP-Tea pony up

Shorthand: You bring the rhetoric, you bring the results.

The GOP-Tea re-interpreted their election win as a mandate, not just to continue saying "no", but on the proposition that no tax increases were required, either long or short term. (To be fair, Obama did some of this too, but he and his party didn't win the election and no longer have control of the purse).

So, they immediately passed hundreds of billions in tax cuts (again), in a potential repeat of Bush-43's year-after-year of budget disasters.

Compare what is going on at the State level under GOP-Tea leadership. Although I do not know what was paid for in the special session (word is that it was tax relief for corporations), the picture repeats itself in broad terms, i.e. debt-spend and then shout, "debt-crisis":

via Ezra Klein:

Update: I've been persuaded that the surplus-to-deficit picture is more complicated that I initially understood.

The budget report is working with two time periods simultaneously: 2010-2011, and then 2011-13. The $130 million deficit now projected for 2011 isn't the fault of the tax breaks passed during Walker's special session, though his special session created about $120 million in deficit spending between 2011 and 2013 -- and perhaps more than that, if his policies are extended.

That is to say, the deficit spending he created in his special session is about equal to the deficit Wisconsin faces this year, but it's not technically correct to say that Walker created 2011's deficit. Rather, he added $120 million to the 2011-2013 deficits, and perhaps more in the years after that.

Sunday, February 20, 2011

Social Security "On the Table"

Do the Democrats caucus at all? Do they ever even try to "get their story straight", even if that is as simple as a talking points memo?

Polls do not support putting Social Security "on the table", do they?

The program is a success, no? We do not have people living in grueling poverty in their old age, right?

Last, I'm afraid that Obama already "put it on the table". We are in the middle of a first ever "holiday" (ugh!) in contributions, the first step in so many, many cases to a welsh on benefits.

NJ skipped contributions to its public sector pension funds. Now, the new GOP Governor immediately used that to declare that there was a pension crisis ... and, frankly, there is.

Thought for the Day


The 1983 Amendments to the Social Security Act, the ones that enacted the so-called Greenspan Commission recommendations, raising the payroll contribution to SS, so that the system would remain in actuarial balance?

Well, it wasn't "included" in the Feb 1983 budget and the recs were carried as a stand alone bill.

Check it out. Many Republicans opposed the measure or didn't bother to vote!

So, the idea that the Obama administration had to include something in his budget is bogus, at least by historical standards, even allowing that the commission reported out in Jan of 1983.

And the other entitlement programs are a matter primarily of (a) aging and (b) health cost inflation. Obama has moved already to try to tamp down the cost inflation.

Where's the GOP for any of that?

This Sunday/Sabboth Day: Family Values Review


Remember "compassionate conservatism", the ball of wax that was sold and bought in 2000 election?

Well, a long ten years later, that's outlived its usefulness, even as it died a hard death in practice long before that.

This week, the GOP-Tea House Speaker said, "So be it", to a question about destroying the livelihoods of families, even as they passed out tax cuts the month before to the wealthiest "families".

Everyone without a job is on a ticking timeline, because the GOP bargained for and got limits on how long the current downturn will "officially" last, apparently.

Last month, the democratic party went along with an ill-conceived "holiday" in social security taxes, a step that raises the probability that families will work harder, longer.

Rather than looking for people-friendly ways to make shared sacrifice, the GOP-Tea in Wisconsin took an in-your-face, five-day, ram-it-through approach, blaming families who are a part of unions and demanding that they give up benefits and pay as a first-line of cuts, even while the same people privilege the politically-friendly families of the firefighters and police and demand that these families give up their collective bargaining rights.

This week, GOP Gov Chris Christie took Washington by storm, swaggering with his prowess at tossing various New Jersey families to the wind, while capping property taxes. Not a single word about whether these cuts might be counter-productive in the current environment, whether their might be smart ways to prioritize cuts so that it minimizes economic drag, or even a upfront concern or lessons-learned about the families that might face the brunt of it.

Tea Party airheads and John Stossel want to eliminate the Department of Education. Something like 50% of its funding goes to help families who have kids with disabilities.

Last weekend and this, the GOP-Tea boosters are out in force making the case that we have to sacrifice some families, so that we can balance the budget during the worst economic downturn in 50 years. Some of them are the same people who, in the 1980s said "deficits don't matter", in the 2000s never balanced a single budget.

Openly Genocidal Intent in America: Kill the gays

On full display in Montana, this week, in this clip about a bill spearheaded by the GOP-Tea "purification" politics:

Special note to Tim Geithner, HUD Secretary, President Obama, and Senator Baucus: is it easier to just offer mortgage backstop credit in fairness (via Freddie and Fannie) in a way so broad that it "rationalizes" the whole market, or is it really more efficient to have x number of regulators trying to (a) find and then (b) redress grievances of unfair lending practices?

The question kinda answers itself...

Saturday, February 19, 2011

The Mastery of Glen Beck

There are a lot of ways you can analyze this clip, below.

First, people on the Left and the Right seem to not understand how brilliant this propaganda is.

Rather than the normal, empirical-based reaction that the breakdown of the financial system, or the political system, or 'the economy' brings up serious questions about abject laissez-faire ("greed is good"), regulation/oversight, our constitutional structure, leadership, or demands fundamental reform of the system, they've turned it on its head, so that 'hard-to-understand' events are to be interpreted as having been precipitated by people (Soros) seeking to discredit the system.

Why would Soros do this? *chuckle* Why would you ask 'why'? The reason doesn't matter, if you can talk passionately about "destroying the country and the constitution":

All you have to do is tell them they are being attacked, and denounce the peacemakers for lack of patriotism and exposing the country to danger. It works the same in any country. -Joseph Geobbels

The "antichrist" meme is a radical attack on credibility, a way to cause people to suspend disbelief, to re-interpret what is going on before them. It's an Orwellian misuse of language. Soon enough, the people listening are inclined by emotion and uncertainty to "follow" those who they "feel" are close to their 'ideological protectors', rather than think critically.

That is partly why Beck has no problem telling his audience, "Don't take my word for it." It's because he is not attempting to access the rational part of their brain. All he's trying to do is raise enough radical doubt that people are confused and seeking leadership, which he offers in the form of his own personality and ideological tribalism.

I can use this approach for any grievance:

The problem in Germany today is not your fault, including that you are out of work or cannot feed your family. If you believe that it is, you are part of the people who have sold out our Fatherland and are ruining our Great Nation, for which I weep openly and passionately. The problem today in Germany is the antichrist the Jews. It's true and, when I've told you the truth of it, which has been hidden from you by elites, it will blow your mind, which is further proof that it is true. If we can commit to getting rid of the antichrist's labor unions the Jews, we will have started on the path to restoring our country's honor and greatness.

The fact that you cannot prove me wrong in that, is evidence of the insidious brilliance of it. How is that different than the normal metaphor and hyperbole that we might expect in run-of-the-mill political banter? I'll leave that to you, dear reader. Do you know what the differences are?

Perhaps this will help. Here's another way to look at Beck:

God is perfect and not corrupt. America is great when she is like God. If you see corruption or failure in America, it must be the work of the antichrist or our failure to seek to be pure enough, i.e. "restore honor", "stop the antichrist unions", "vote for God's political candidates", {insert political-religious theme of the day}.

Although others have trod that path, Beck is superb at it in a new way, right?

Second, they fail to appreciate the insidious consequences of it. For one thing, if you start out small and find that you can put over the "Big Lie" on people, then suddenly you get emboldened. The dynamic is such that, over some period of time, so many lies have been told that the people propagating them no longer know or care the difference. In the end, there is no truth, just a "narrative".

Third, it is very hard to fashion a reply to this kind of stuff. If you elevate it by responding somehow, you "feed" it, in a way. So far, John Stewart seems to have the right tenor, with his "Senior Beckologist", but the epistemic closure on the Right pretty much shuts him out, so this problem is like an open sore on the body politic:

Friday, February 18, 2011

Question of the Day

Regarding the "liberal media", are there any major newsprint organizations for which The President's visit to Oregon yesterday is front-page news today?

I found one.

How 'bout online news outlets?

What does this say about the ability to set the agenda? Was it an effective use of time?


The President flew over Wisconsin today.

All 10 electoral votes.

I hope they know what they are doing.


Politico reports that this has been on the radar screen for a long while, even:

"Democratic National Committee Chairman Tim Kaine and new DNC executive director Patrick Gaspard, a former union official and onetime White House political director, have been talking with Wisconsin labor leaders for several days, according to two labor officials."

Thursday, February 17, 2011

GOP to Defund Small Agency Set Up to Thwart Repeat of Financial Crisis

You knew this was coming, right?

Why do they want to end the new CFPB?

Well, hell, the organization has subpeona power...

And giving the government the means to know what is going on is like ... well, it's like letting the adults into the henhouse.

Daily Grumble


Where were these two, when "fiscal sanity" required demanding that "fund the troops" was no reason to give the GOP a pass on shared sacrifice?

You know, the long-term picture of imbalances hasn't changed in the 24 months that Obama has been in office.

Except, that he improved it with at least some attempts to curb health cost inflation, right? Against lock-step opposition.

Meagan McArdle:

We can eliminate the mortgage deduction on non-primary residences or any combined amount of interest on mortgage debt on non-investment properties over $500,000, say (pick a number). Do it now. Why one has to "phase in" so you can soak the lower and middle class is inscrutable. I'd put in an exclusion for people who refinance, who had planned to be able to do so at a tax-advantaged rate, that's all.

Raise the social security tax to 90% of income. Do it now or over five years.

The fact that these are not on the table, shows that you're not fiscally "serious", maybe, right?

End agricultural subsidies to large-scale farmers, excluding some programs. Do it now.

Embracing the Suck

Leadership is not telling people the truth, apparently, because that is 'telling people what to think'. The truth is not my job, says new American Speaker of the House, John Boehner, representing Ohio's 8th.

Why is it not surprising, in current memory even, to have GOP leadership that is only casually bound to the truth, even on critical matters at law? (even revisionists, see here)

Anyway, this post inspired this idea (I was thinking of changing "Kaboom" to "Kachoo", what do you think?):

House Speaker John Boehner (R-Ohio) said Sunday on "Meet the Press" that while he believes President Obama is an American citizen and a Christian, Americans have a right to think otherwise if they so choose. "It's not my job to tell the American people what to think,"

Projected Sea Levels Under Obama's Budget

Greg Mankiw qualifies! ... for our "Worst Budget Chart Evah" competition, first annual.

In his most recent "cover" piece, they are smoothing 50 years (!!!) of deficits (presumably to avoid having to locate the source of those averages with Reagan and the Bushes...or to include Vietnam to make it look better or who knows, exactly).

Mankiw chooses a chart that doesn't show the massive hole blown into the real economy, with the worst unemployment in the post-war era, which of course makes the Obama administration look horrible.

The truth on unemployment:

And somewhere between a quarter and a half a century down the road, there is a big, menacing yellow arrow, showing deficits!

We can't even get forecasts of the budget that are accurate, let alone precise, for two years out.

Now, I'm all for taking warnings seriously, but, Greg, won't we all be dead or drown by then?:

Projected Sea Levels Under Obama's Budget:

src: epa.gov

Anyway, dear reader, this chart is now in the 'top five', shall we say.

Note to America: Bush didn't balance a single budget


Why should Americans pay for the failed Bush years, with massive cuts to rank-and-file programs like medicare, rather than a tax on those who supported Bush to get elected, "the haves and the have mores" as he once put it?


Here are the on-budget deficits from Bush-43:

in billions.
2001 -32
2002 -317
2003 -538
2004 -568
2005 -494
2006 -434
2007 -342
2008 -642
Total -3,368 [That's three trillion dollars - years of total GOP control in bold.]

Here are the on-budget deficits from Clinton:

1993 -300.4
1994 -258.8
1995 -226.4
1996 -174.0
1997 -103.2
1998 -29.9
1999 1.9
2000 86.4
Total -1,004 [That's one trillion dollars]

And that evil fiend (!!!), Jimmy Carter?

1977 -49.9
1978 -55.4
1979 -39.6
1980 -73.1
That might be about $400+/- in today's dollars...

Adjusting these for recessions, which can be done, doesn't change the general picture.

What the Weak Economy Needs: More People Fired


GOP-Tea are making like busy, busy bees to lay people off.

Orange Julius actually said, "So be it", yesterday.

Just a reminder: basic economic "theory" says that you repay the costs of a recession at the top of the cycle, when things are going well, not here, with 9% unemployment and policy rates at zero and a Fed doing backflips to boost growth.


Have the democrats won a single ideological or quasi-ideological fight in the past 20 years?

Think it over.

Their internals are that the budget battle is lost, as it stands today.

The Impossible Aphorisms of Chris Christie, Ronald Reagan and All the Rest

Some voters will thrall to his tough language and Reagan-like, pithy non-complexity.

But, the truth, if you care to seek it, looks more like this.

Wisconsin Protests - Ready for Prime Time

Is the public sector really causing states to be "broke"? Is deliberately churning the public labor force really a good idea?

It looks like Governor Chris "In your face" Christie's style of myth making is going to backfire in places where people are actually educated and paying attention. Like Wisconsin.

It's a tough call, but I think that it would be good for President Obama to go to Wisconsin. He's got to get right into the thick of it, whatever he thinks is "political point scoring".

He's getting deep into the pocket. He's got to get out and bleed with The People.

Democrats would do well to find an alternative, success-story, too. Unions don't like the kind of f-u confrontation offered by the new GOP class of Governors. If Cuomo can pull off a "deal", he'd be a rival model for 'how to get business done' fairly.

Wednesday, February 16, 2011

"Tackling Entitlements"


I'm so encouraged that there is a lot of good stuff going on!

Krugman, Ezra, Yglesias, just to name a few and probably to miss many others.

I'm ready for the next evolution. (In which Paul Ryan does a face plant...).

Is there any amount of budget variance analysis that would convince a sober, sane mind that we really do have a revenue problem, not a "spending problem"?

Let me try.

We hear often that "entitlements", "SOCIALSECURITYMEDICAREANDMEDICAID", are the "big government" that is driving us to Obama deficits or whatever.

So, let's go have a look at what percentage of the yearly budget variance is being driven by "SOCIALSECURITYMEDICAREANDMEDICAID", right?

How? Take how much outlays for "SOCIALSECURITYMEDICAREANDMEDICAID" change each year and compare it to the overall budget surplus or deficit.

Remember, Social Security is a net _positive_ in the unified budget, because receipts are greater than outlays (by a lot, because of the boomers). So, if MEDICAREANDMEDICAID add 16 billion to the deficit and SOCIALSECURITY subtracts 26 billion, the net is -10 Billion expected variance. [See year 2000, in the table below.]

Here's a table for what happened during the Bush years.

YEAR Expected Total budget variance (+surplus/-deficit)
2000 10 236
2001 -22 128
2002 -38 -158
2003 -37 -378
2004 -43 -413
2005 -18 -318
2006 -28 -248
2007 -71 -161
2008 -32 -459

So, you can see what so many call "the problem" is just "one problem", because, on these figures, mandatory spending is only driving about 11% of the annual budget variance.

I'm not saying that in the long run, these small and rising variances aren't key.

What I am saying is, "Yes, Virginia, there is a revenue problem."

So, in the medium term, the #1 thing we can do is get rid of Grover Norquist, et. al., right?

Mubarak, Cause or Effect?

Sadam, cause or effect?

You get the picture. (via The Dish)

Time is short. The race is on to seize the day. Make no mistake about it.

Twitter/Facebook Solved the Collective Action Problem


Ah, I'm watching pundits ask, "What meaning of this?" (cf. Murder by Death)

Well, you know about network effects, right, as a "thing" in economics? If you don't, dude...!

But, it appears that there is another network effect. It's meta: 'now we know what we know'. It's powerful. It needs a name: "Revealed unknowns effect" or some such, like "Marginal uncertainty calibration theorem".

Facebook and Twitter, in Egypt and possibly Tunisia (I'm less versed), apparently "solved" the collective action problem, by reducing psychological-fear (real and perceived) through risk-sharing.

It's true. You heard it here first, but it won't be the last.

Tuesday, February 15, 2011

Pundit Failure to Mount

Andrew Sullivan is hyperventilating over the budget. (He has lotsa company, via Reuters.)

...the reason we are in perceived 'fiscal calamityville' now is because of the GOP's fiscal failure for years and years and their current rhetorical need to regain their brand. It's far less to do with Obama.
I'm surprised he thought that "The Moment" for Obama to capture the momentum on long-term fiscal imbalances was during the annual budget week for 2011, just seconds after employment is barely stabilizing at horribly low levels, measured in economic time.

Everyone shares the sentiment that our house should be in order more often than not, but the time to have put his marker in the sand was last year, during the fight over tax-cut extensions for the wealthiest among us. (For those of us who thought so, it appears the political calculation is that it was decided it would be an election year issue, i.e. 'not today'. And the short-term dynamic would, of course, be some complex Washington political match - how else could it be?)

As for the rest, why not focus on the Senate Democrats? Obama did push for fiscal sanity. He was rebuffed by eight or nine bought-and-paid Senators, right? I mean, he even got the vote, which means he and the Senate leadership was willing to put them up to public scrutiny on the issue. That's hardly, "screw you, suckers", is it?

Meanwhile, I suggest that Andrew (or Patrick, because I like Patrick) go to the CBO website, get the budget outlook and look very, very, very carefully at tables C-1 and C-2.

Why? Because they show a different picture. It is accurate? Yes-ish.

But, what is more important to understand, in terms of political analysis, is that the reason we are in perceived 'fiscal calamityville' now is because of the GOP's fiscal failure for years and years and their current rhetorical need to regain their brand. It's far less to do with Obama. Or this budget, which is pure theater, albeit necessary theater, because the GOP have little or no intension of working with the President and control the power of the purse. Think of it more like a gambit, than anything else.

Oh, Snap!


The politicians (including the Democrats) have told everyone what they want to hear, but here's someone who has, in plain language, said what you need to know.

I can't imagine what it is like to be young in America and looking at all this.

Budget Tuesday, Part II - The Competition


This year, I've decided, time permitting, to run a competition for the "worst budget chart evah".

Anything that shows "social security spending" (a dedicated-tax transfer payment) on par with "defense spending" is eligible, but it is not limited to that.

Apparently the WH OMB qualifies, with their java "explore the budget" block chart.

So, no special "spin" on the budget. Just go read it yourself (probably already have, if you are reading this blog, but ..).

What now?

Yes, you guessed right, from the post title, it's about the mid-east.

It seems a bit unreported, that the Palestinian's chief negotiator has resigned, after years and years of being in the role.

Why all negotiations have to occur 'in secret' still eludes me. It's as if both sides were perpetually embarrassed to be talking to each other, because of a fictitious need to be blaming each for non-progress or to show the 'all appropriate outrage' at the outrage-of-the-day.

And, so, the months go by, and the costs of non-agreement conflict mount. For everyone.

It's Budget Tuesday

The White House Budget is released, today, just as it is every year at this time, a fact few Americans know, actually.

To avoid appearing like "tax and spend liberals" and to co-opt GOP-Tea lies that Dems are fiscally irresponsible, the WH has pivoted early to deficit reduction by making budget cuts.

This assumes that the U.S. economic recovery is on sure footing and can handle throwing more people out of work and concedes the rest of the ground on which the GOP-Tea fails its burden of proof.

Nevertheless, with both parties now glad-handing non-truths, we live in dangerous times.

[And, yes, it's Clinton all over again, in some respects. No one dares say what needs to be said: our economic failure & dip has an impact on our wherewithal to project military power. ]

Monday, February 14, 2011

A "Partner", The Only One

For me, the most telling part is that of the $315 million, Arianna and her investors only took $15 million in AOL stock.

-Andrew Sullivan

We'll know in a year or so, probably. Maybe just before election season.

People outside Wall Street seldom know when they are being bought, not sold. (If you don't understand that, you wouldn't be the first).

Now, given this calculus, remind me why NBC dropped its "eyeballs-on" called Keith Olberman? It wasn't the vast rightwing conspiracy? Okay. [you'd never know know until it was too late, maybe, anyway..]

Facebook, Egypt and Riding the Wave


Facebook might have been an instrument. Probably even critical in courage/impetus and even tactical.

But the fact remains that the authorities could have put down the uprising in Egypt. Is there any doubt about that? The Iranians have learned how to combat the social media, by means other than just shutting it off.

... haste in imposing a constitutionally (secular) order is required, as a prolonged period of waiting is not conducive, risky
One could surmise that the Egyptian regime leaders made a conscious choice to not attack their own people, to distinguish themselves from Iran, to avoid a "crackdown" as a matter of calculus.

Until we know what happened behind the scenes, we'll continue to have this Facebook-incompleteness theorem.

As for the trajectory of the upcoming struggles, we have a tendency to analyze things giving favor in history to the acts of great men, rather than "systemic forces" empowering them. But at this time, positive assessments of both seem lacking from the Egyptian equation, which makes the odds look long. The parallels to Romania, say, and Condi's Eastern Europe analogies, seem stark.

I would argue that haste in imposing a constitutionally (secular) order is required, as a prolonged period of waiting is not conducive, risky, even if it might take political parties longer than that to form and organize properly.

The U.S. arguably wasted the critical time period after the immediate fall of the Iraqi regime. Now, Egypt have leaders who are, like John Boehner, used to being Orange Julius. Put more succinctly, they aren't used to rapid, accountable, comprehensive decision making and quick implementation.

Sunday, February 13, 2011

Manufacturing politics

In some places, they 'turn off' the internet.

In some others (many others, actually), they try to 'turn off' journalists.

Disinformation campaigns. Next time you hear a set of allegations, pause, right?

Tabatha Salon Takeover

Filed under guilty pleasures.

There is nothing more common than poorly run business.

There is nothing quite like being in a well run business, for all kinds of good reasons.

Why the disconnect continues is perhaps understudied and considered.

Treasury puts its proposals in the Friday trash


Something is due on this page, shortly, about the Treasury's proposal to eliminate the critical mortgage lending giants, ones that so many Americans depend upon for fair and full access to housing finance.

But right now, all I can ask is, "Is there anyone - anyone? - in the Obama economic/finance team who is an A-string progressive/liberal?"

Seriously. I find this proposal so second-class that it is hard to write about it, without counting to ten first.

Perhaps, it is telling that they put it out in the Friday night trash, weeks after it was due. I can't judge the inside politics of it, too much, but one can reject its conclusions on face, without much effort.


Dear "Liberal Deficit Hawk":

Dude, check it out:

Medicare and Medicaid scams cost taxpayers more than $60 billion a year, but bank holdups are more likely to get greater attention.

The government wants the public's help in trying to catch more than 170 fugitives wanted for fraud, so it's developed a new health care most-wanted list, with its own website — http://www.oig.hhs.gov. Most are dour; some sport smiles.


Add that to the Pentagon's waste and you're talking real money.

Forget John Galt

Grand Irony

One has to savor the irony of the Obama administration's proposals for high speed rail with the release of the movie version of Atlas Shrugged.

Just slip the pages of SEC lawsuits to figure out that "private business" is so much better and less corrupt at allocative efficiency:

Since it went public four years ago, the SEC says, AEHI [aka Alternative Energy] has raised millions of dollars by promising to build a nuclear power plant even though the company has “no realistic possibility” of ever achieving that goal [alleges the SEC]

Friday, February 11, 2011

Cuba! Cuba! Cuba!

Oh, I mean Egypt! Egypt! Egypt!

Thursday, February 10, 2011

Chrysovalantis Kefalas

Bringing it down in Maryland, a la Grecque ...

[Republican] Governor Ehrlich stated clearly his opposition to civil marriage freedom during his campaign for governor, and I do not purport to speak for him here. While I respect and agree with him on so many issues and respect the religious convictions of those opposed to same-sex marriage, as a conservative Republican, I believe history, law, reason, and experience will discredit opposition to civil marriage freedom. The United States Supreme Court has repeatedly held that marriage is one of the most fundamental civil rights that we have as Americans under our Constitution.


Governor Ehrlich stated clearly his opposition to civil marriage freedom during his campaign for governor, and I do not purport to speak for him here. While I respect and agree with him on so many issues and respect the religious convictions of those opposed to same-sex marriage, as a conservative Republican, I believe history, law, reason, and experience will discredit opposition to civil marriage freedom. The United States Supreme Court has repeatedly held that marriage is one of the most fundamental civil rights that we have as Americans under our Constitution.


It is very difficult to express to you how hard it was coming to terms with who I am. Striving to succeed in business and professionally and be the best son, brother, grandson, godchild, nephew, cousin, and friend for so long enabled me to shield a side of me I wanted to ignore, to fight off, and to deny. Working endlessly on entrepreneurial activities in high school and college (for example, founding a weekly sports magazine once featured alongside ESPN.com in USA Today’s Baseball Weekly as one of the premier fantasy baseball websites in America), total commitment to my educational and professional pursuits, and filling my schedule entirely with family or work moments allowed me to go longer than many in denying this part of me. I did not need to date because I had work. I did not need to date because I had family commitments I wanted to keep. And, putting self-realization aside was necessary to protect my family and me from the stigma, stereotypes, and consequences of giving in to something triggered within me.


For me, not being able to experience the traditional Greek-American dream, or my take on it, felt for so long like a life lost.

As a result of all these concerns, I thought of and seriously came close to ending my life, with the medications to overdose with and die.


First, it is anti-conservative and antithetical to the principles of individual liberty and personal freedom to force government to stop me from partaking in a civil right essential to my place in the community. Second, this is decidedly a state issue, not a religious one. Marriage, under state law, is after all a civil bond, to provide a privilege and respected status, entitled to the state’s support and benefits. Moreover, under this proposed bill, religious institutions and groups can choose to endorse same-sex marriage or not as they see fit. Third, there is nothing more conservative than supporting freedom and there is nothing less conservative than forbidding the creation of families.


Despite fierce Democratic opposition, Republicans passed constitutional amendments banning slavery, extending the Bill of Rights to the states, guaranteeing equal protection of the laws and due process to all citizens, and extending the right to vote to persons of all races and backgrounds. Republicans in Congress enacted the first-ever Civil Rights Act, which extended citizenship and equal rights to people of all races, all colors, and all creeds. In 1875, Republicans led the expansion of these protections to give all citizens the right to access public accommodations. Republicans initially led the fight for women’s rights. And, it was a Republican justice, John Marshall Harlan, who in 1896 declared that our Constitution recognizes “no superior, dominant class of citizens . . . In respect of civil rights all citizens are equal before the law.”


I'm shocked at the number of people who are shocked that he's not going.

What do you think it takes to be a "strongman"?

What's more, to leave extra-legally is anathema (even if that equates simply to "involuntarily" in the current state of law).

Given they are one of the prime beneficiaries of it, do you really think that the military are anxious for 30 years of corruption to unwind, to be made visible?

Wednesday, February 9, 2011

Flanked and outgunned?

Dear Center For American Progress:

How do you feel about the AEI getting just under 100 pages of inference-filled material attached to the taxpayer funded, massive report on the causes and consequences of the financial crisis?

Just Curious

Liberalism is weak in America.

For those who don't know, the Financial Crisis Inquiry report itself is about 400 pages. So, an additional 100 pages is about a quarter of the length of the main event.

Tweet de Yesterjour

Time for pro-#LGBT testimony again! First witness has a purse made of seatbelts. Buckle up! #Marryland

-Patrick Metz

Rest of the story, from The Baltimore Sun.

Tuesday, February 8, 2011

"Shovel Ready" was never an appropriate assessment was it?

Support programs for low income households and infrastructure spending are found to be highly expansionary.-NBER Working Paper No. 16759

The path that might have been.


They, the economists who have now left town, were worried that the lags on the spending would take too long. I wonder how they feel now?

Of course, I could be wrong. We might have "escape velocity" any month, now.

Dear Hamilton Project

Dear Hamilton Project:

The Fed can goose employment a lot more than it is now.

They should buy risky assets. Which ones? How about a "bailout" for the "middle class", from the lender of last resort?

Why don't they buy credit card debt and slash the rate required on it to zero (until such time as it looks like the rates might go back up)?

This could be instantly hundreds of dollars a month, directly into household/consumers' hands.

It's unfair, at least as unfair as giving zero short-term rates and bailouts to the very bank managements culpable for failure, but it will work.

Change the bankruptcy law temporarily, to make it easier for consumers to clean their balance sheets, including the debts that were put 100% off limits during the Bush-43 era.

The Fed has over a trillion dollars in Treasury securities. The interest on that will pay for the credit losses and infuriate the Rightwing, but at least they won't have to pay more taxes.

Banks will be able to shrink their balance sheets even more and build their capital position. They will need it. Why? Because they have to clear the market on the foreclosed homes. One used to hope for home loan modifications and the like (i.e. temporarily less security for lenders in the bankruptcy courts), but we might be passed the time for that).

Citizens who don't think the GOP will do anything

The Rightwing : Still swimming in opposite directions

Every now and then, contradictions just fall into your lap. [Just read the bold, if you are in a hurry...]

Greg Mankiw, trumpeting Jacoby, who writes:

Americans make more “stuff’’ than any other nation on earth, and by a wide margin. According to the United Nations’ comprehensive database of international economic data, America’s manufacturing output in 2009 (expressed in constant 2005 dollars) was $2.15 trillion. That surpassed China’s output of $1.48 trillion by nearly 46 percent. China’s industries may be booming, but the United States still accounted for 20 percent of the world’s manufacturing output in 2009 — only a hair below its 1990 share of 21 percent.

In condemning Obama's initiatives, someone called Debra Saunders writes this as the backwater Townhall.com:

After receiving at least $43 million in aid from the state of Massachusetts, Evergreen Solar announced last month that it would be closing its manufacturing plant in Devens, Mass., laying off its 800 workers and moving its manufacturing operations to China.

Warning: These are the "green jobs" that President Obama has touted as part of his "winning the future" agenda

Michael El-Hillow, Evergreen Solar's chief executive, explained in a statement the reason for his company's move: "While the United States and other western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint."

So, which is it? Leftists are wrong for decrying the decline in manufacturing or wrong for hoping for more of it or both, somehow?

And, if you don't know your stuff, how can the average reader sort out these contradictions?:

Jacoby, again:

But factory employment has declined because factory productivity has so dramatically skyrocketed

The Hamilton Project, however, is looking for ideas of this sort:

an economic policy initiative at the Brookings Institution, has launched a prize competition to identify new and innovative thinking about policies to create jobs in the United States and enhance productivity

And you thought the inconsistencies in legal opinions were hard...

They aren't calling it reparations

...and "today" is not called the "inter-war period" or whatever.

Anyway, Ireland has been debt-bombed back to the stone age.

There is little point trying to cherry pick quotes from Michael Lewis's latest.

So, I'll just pick two favorites, like everyone else:

A political investigative blog called Guido Fawkes somehow obtained a list of the Anglo Irish foreign bondholders: German banks, French banks, German investment funds, Goldman Sachs. (Yes! Even the Irish did their bit for Goldman.)

“I do some personal security, and things of that nature,” he says, when I ask him what else he does other than drive financial-disaster tourists back and forth across Ireland, ...

True or false: without a thriving periphery, the economic growth prospects for the Eurozone look bleak, in the long run. After all, weren't Spain, Portugal, and Ireland the "California" of Europe? No? Okay.

no, there is nothing here. What else can one do, but weep?

Remember "DOW 36,000", the aspirational book for serious people by serious people? That's kinda what happened with respect to property in Ireland, except, before the bust, they obligated the taxpayers to payoff the "36,000" figure.

Irish home prices implied an economic growth rate that would leave Ireland, in 25 years, three times as rich as the United States.

Monday, February 7, 2011

Liberal Ideas to Cut Spending

Don't vote Republican.

Don't vote Tea Party.

Can it really be that simple?

Yes, we can.

In Washington, the White House political affairs office, then directed by Ken Mehlman, recognized the importance of the drought-relief issue to the Thune race. That spurred an effort in the administration to come up with a way to help the embattled Republican candidate, according to a former senior official at the Department of Agriculture.

In his speech in South Dakota, the president said he opposed drought relief that would add to the federal budget deficit. So White House and USDA officials came up with the idea of tapping a special fund derived from annual customs receipts, the former official said.


More, later, perhaps.

Saturday, February 5, 2011

How Journalists Are Lazy Like Everyone Else

My 2-cents on this bit about how the press might have been complicit in the financial crisis?

This is a high-level analysis and it is fine. Following the path of least resistance makes it easy to hit your deadline by just parroting information from professional, "PR" sources.

It's hard to "make it" professionally (or economically?) if you focus on risks and worries and generally play skeptical/investigative and contrarian, unless you are in an organization that prizes those things.

But this approach to the general issue might be more illustrative: what do we know now that we should have known before?

On deck (off the top of the head):
  • -The details of the wheeling-and-dealing of Daniel Mudd, CEO of Fannie, and his firm's dealings with Countrywide's Mozillo
  • -A lot more on the originate-to-sell model, investigative reports of "liar-loans" in the system, investigative reports of predatory lending
  • -Government regulatory reports, compelled by subpeona power if necessary, on the rapid growth of the sub-prime/alt-a market
  • -Details on the risk-management practices -NOT theory- for credit derivatives (these would have easily exposed the over-reliance on the ratings agencies in reaching conclusions).
  • -Simple language disclosure of deals that ended up having systemic impact (CDOs)
  • -Reporting on the ignorance of regulators who estimated the size of the sub-prime problem at $200 billion, rather than the much larger multiples that were achieved through swapping credit
  • -Details on the size and scope and systematic risks of off-balance sheet vehicles, funded with short-term money
  • -Accounting practices that allowed Lehman to "look good" each quarter
  • -Headline reporting of SEC waivers of capital requirements during good times
  • -Notice how large banks had become horribly under-reserved in their retail business

Once you start breaking it down, you can see what information was shaded; what information was deliberately "privatized" in the pursuit of illicit profit; what information was simply ignored because it didn't go "with the dominant narrative"; and, yes, what information investigative journalists should have ferreted out and didn't.

In Praise of Dick Fuld

More on mis-management at the core of the crisis:

Nell Minow, editor and co-founder of the Corporate Library, which researches and rates firms on corporate governance, raised other reasons that observers might have been skeptical of management at Lehman. “On Lehman Brothers’ [board], . . . they had an actress, a theatrical producer, and an admiral, and not one person who understood financial derivatives.” The Corporate Library gave Lehman a D rating in June 2004, a grade it downgraded to F in September 2008.

FCIC report, pg 327

Not new, but still...

Did you get your money's worth from the FCIC?

Here is their conclusion on critical and important mortgage giant, FNMA:

The Commission concludes that the business model of Fannie Mae and Freddie Mac (the GSEs), as private-sector, publicly traded, profit-making companies with implicit government backing and a public mission, was fundamentally flawed.

But there is nothing in the report that supports that conclusion!

The only thing that they report is that Daniel Mudd, the guy in charge "particularly from 2005 on", said this. The jokes write themselves, right?

When interviewed by the FCIC, FHFA officials were very critical of Fannie’s management. John Kerr, the FHFA examiner (and an OCC veteran) in charge of Fannie examinations, minced no words. He labeled Fannie “the worst-run financial institution” he had seen in his 30 years as a bank regulator.

Even allow for significant overstatement, that has to be in the right direction, given the breakdown in underwriting discipline. (Of course, everyone may still be fighting lawsuits, so the truth may be hard to write, yet.)

Mr. Mudd is the guy who is disparaging, in the report, of the regulatory bodies, when questioned about them. But, seriously, you don't *need* a regulator to be a responsible business leader.

Let me illustrate:

"Dear Senator Hope-a-Lot:

Blah-blah-blah we love to work with you and make a great America. Please contact our lobby firm for a fishing trip for your family.

However, we have run risk analysis and we cannot add riskier loans to our portfolio, without significantly increasing our capital cushion, risk-based fees, or portfolio composition. (Changing portfolio composition involves less of other types of loan risks, a trade-off in goals).

Safety and soundness has to be the number one consideration for organizations with our level of risk exposure and responsibility. While we are eager to try several programs to expand lending, experience and prudence indicate that these new businesses must be developed slowly, until risk estimates are well seasoned.

As I write this, I understand that I won't get a $5 million dollar bonus or whatever for exercising sound financial and business judgement, but I believe that we must manage the guarantees with which we are entrusted with the highest care.

Daniel Mudd, Republican CEO of FNMA"

What did "we" get instead? A dash for the cash? Who knows.

I would go further and submit that ANY professional who knows and understands the business of banking could write that letter without thinking twice.

Friday, February 4, 2011

Bracing for "Tinkering" with the Massive Mortgage Market


Who can support wholesale tinkering with FNMA and Freddie, as a priority?

These organizations have operated for years. Fannie Mae since 1938! If there were some sort of systematic "problem" with them, it might have shown up a lot earlier, no? Which means, on face, we're dealing with an episode.

Has Geithner or any economist associated with the Administration given a clear - and I mean crystal clear - explanation of the failures and their causes at FNMA? (It may have been done. Let me know.)

Ironically the most hapless part of the commissions report is probably the most important. What really went wrong with Fannie and Freddie and how do we fix them?*-link

I submit they have not and they are, therefore, the bunch of them, "a solution in search of a problem". (The lion's share of the problem at FNMA can be summed up in five words, 'the leadership of Daniel Mudd', right? But, I'm still in the process of getting through the massive "dissenting opinions" in the FCIC report, which cover Fannie and Freddie with some elan.)

To start restricting the flow of credit to the housing market, at this time, is tomfoolery.

We have low short-term rates. People should be aggressively refinancing, even into ARMs, so that accommodative monetary policy has its salutary effect.

What's going on instead? They keep changing their underwriting guidelines and making loans more expensive and transitions to new levels of demanded equity instant. How can you take rollover risk, when stuff like that is going on?

In the latest iteration, it appears that the elites there think it is okay to tack a fee onto the highest credit borrowers. Why would you want to risk pricing yourself out of the market for the best credits?

*If that's not a quintessential sign of American decline, that you can't even get an honest appraisal of error and lessons learned, what is?