From my Tweetstream:
Answer A: CNN and Barack Obama
Obama: New levee system in NOLA to be finished in 2011
or Answer B: Mac Clelland from Mojo (on the ground here) and the Army Corps of engineers
Obama promises levees will be done next year. Army Corps engineer working on them told me the other day: no way.
I’m going with answer B frankly.
Good Morning from The Howling Wolf in New Orleans on this fifth anniversary of Hurricane Katrina. I’m live blogging from Rising Tide 5: A Conference on the Future of New Orleans. I’m sitting among the blogging community of New Orleans (and people who love New Orleans) who are readying themselves with coffees and good stuff for several panels today to discuss what’s going on and how we can make things better. The first panel is on public safety. The politics panel comes after lunch. We’re also going to have a panel to discuss the HBO series Treme. I’m sitting in front of an avid Treme Blogger (watchingtreme from Seattle) but have to admit I haven’t been able to face watching the series since I continue to live the entire ordeal IRL. Another panel will talk about environmental issues.
The key note speaker will be Mojo’s Mac McClelland. She’s been avidly blogging about BP recently and I’m assuming we’re going to hear her stories of being chased off the story by local officials. She also covered the direct aftermath of Hurricane Katrina.
I’m just going to be posting to this thread all day. I’ll let you know which panel is up and taking questions if you want me to ask any one anything. Since you know the topics, just lemme know if something’s on your mind.
update: you can listen to Mac McClelland’s speech here. (f bomb s bomb warnings) worth listening to her stories on BP.
Well, I’ve settled back into my spot here after having talked to a buncha people. Harry Shearer is here and you can undoubtedly read his take on HuffPo later. Mac is great. There’s also some one here from Bloomberg so there’s some media around the place with an actual audience.
I’m looking forward to the Political panel although so far it’s all been very informative. Activism isn’t dead here. I voted before I came. Keep your fingers crossed for Charlie Melancon and for Juan LaFonta. If I’m still standing, I’m heading to victory celebrations post conference.
Again, the consensus here is that Bobby Jindal is the worst thing to happen to New Orleans and Louisiana which is great to hear!!! I’m glad some folks know how he is devastating higher education here as well as all public health facilities. I just hope some of these folks can have some impact in their communities so we can get rid of him shortly. Unfortunately, he wants to run for president so his plans to re-establish plantations may go national.
So, I’ll be here for a bit. After the political panel there will be a discussion of the levee system. The last panel is over the HBO series Treme.
Laissez les activism roulez!!!
We often talk about being prematurely right here at TC because so many folks around us don’t seem to look at the facts on the ground, learn about a situation, and then ignore the majority when it blindly establishes a meme. I distinctly remember how it felt when I was one of a few people telling every one that Iraq was not responsible for 9-11 and we should not invade. Wow, did I get called a lot of unpatriotic names then.
I felt it when I refused to get caught up in Obamania, taking a position like little Huey Riley, “hope is irrational”, and trying to say let’s look at the facts on the ground. I know I’ve felt that way all this week, although thankfully, the regulars around here and all of the frontpagers are in the boat with me on the Park51 site. The angry words that get spewed at you when you don’t hush up and fit in with the crowed can feel like arrows sometimes. Still, there’s always been something in me that knows when something is right at the core and I’m like a mama bull. When some one waves a red flag at me, I charge.
This is another, less emotionally filled topic but one that I’ve been writing about for the better part of two years. This is NOT the recovery summer and we haven’t turned a corner. When unemployment stubbornly stays high and banks would rather play paper games than make loans with rates this low, you’re not out of the woods. Funny thing is that a lot of people around me have known this, but you hardly hear it from them because it seems the sensible people never make it to TV news or the Halls of Congress.
Here’s some of the voices joining me in the wilderness or coming to get me–I don’t know which–on our very fragile economy.
First, Paul Krugman–who along with a bunch of us old neoKeynesians called for a much stronger stimulus package about two years ago–headlined the shaky economy today. Unfortunately, he’s taking it out on Ben Bernanke who can’t do QE (Quantitative Easing) forever. The Fed’s balance sheet can’t be the ultimate repository of bad investment decisions. Some of the bad investors need to either be perp walked or sent to bankruptcy court. He needs to call his friends–if he has any–in the White House and explain why doing right by investment bankers isn’t the same as doing right by small banks who really lend money out in small communities. Also, Bernanke needs a full Board of Governors and the Obama appointments are languishing in the ether. (More signs of inability to govern.)
The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead. Will the economy actually enter a double dip, with G.D.P. shrinking? Who cares? If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative.
All of this is obvious. Yet policy makers are in denial.
Let me scream it from the wilderness yet again! If an economy depends on a 67% C, in an equation that reads C+I+G+(X-M)=GDP, then not giving the C people jobs is going to put a really damper on the the GDP. (That’s C=consumption, I=investment, G= Government spending, X= Exports and M= Imports). Also, I traditionally spooks easily, is subject to huge volatility, and goes outside of the country now in hunt of greener pastures. Also, the M (which you see is a negative) is HUGE these days. It’s a definition, so how can you argue with simple math?
Economic statistics released Friday offered the clearest sign yet that the recovery, already acknowledged to be sauntering, had slowed to a crawl.
The government lowered its estimate of economic growth in the second quarter to an annual rate of 1.6 percent, after originally reporting last month that growth in the three-month period was 2.4 percent.
The revision is a significant slowdown from the annual rate of 3.7 percent in the first quarter and 5 percent in the last three months of 2009.
The news came at the end of a week that showed the economic retrenchment that began in the second quarter has spilled over into the summer. Existing home sales in July were down to their lowest level in a decade, and sales of new homes last month were at their lowest level since the government began tracking such data in 1963. Orders for large factory goods, excluding the volatile transportation sector, dropped in July, indicating that recovery in the manufacturing sector was also stalling.
With such grim reports, economists are now concerned that the outlook for job creation, which has been spluttering all summer, could deteriorate further. Companies and consumers tend to be spooked by bad news, and market analysts and economists worry that faltering confidence could cause employers to hold back on hiring.
I have no idea what’s going to solve this problem because the Democrats appear to be in denial and have no back bone for fighting for the right thing. They also seem to be solidly sold out to the old Republican interests in big business because most of the Republicans elected these days are so bat shit crazy on social issues that no one wants to really touch them. (The new wedge issue appears to be purging the country of Muslims and Mexicans and probably Gay Americans if they could get away with it.) If I owned a business, I don’t think either a speaker of the house Nancy Pelosi or speaker of the house John Boehner would make me want to put my money into this country. I frankly think I’d head to India because their democracy seems more functional over there. Both India and China are certainly turning out better quality students these days in math, sciences like physics, engineering, computer sciences, and finance. India’s rule of law is based on the UK’s so it even has the benefits of extremely strong property rights. Watch for a continued flight of capital to the regions that aren’t experiencing social unrest, like Kerala.
But just as there is widespread agreement that the economy is faltering, there is also a sense that the federal government is running out of options to rebuild momentum.
“Housing is in the tank. Confidence is going down. The stock market is going down. It’s hard to imagine how consumers will spend,” said Sung Won Sohn, an economics professor at Cal State Channel Islands and former chief economist for Wells Fargo.
He put the probability that economic growth will slide back into negative territory — a double-dip recession — at “40% and going up.”
On Thursday, the Dow Jones industrial average closed below the 10,000 benchmark on the heels of worrisome new economic reports.
The government said that while initial unemployment claims last week dipped to to 473,000, from 504,000 the week before, the four-week average still reached its highest point since November. Unemployment was at 9.5% nationally in July and higher in many states, including 14.3% in Nevada, 13.1% in Michigan and 12.3% in California.
And a mortgage trade group said that, while foreclosures overall continued to ebb, more homeowners fell behind on their payments — the second straight quarter in which that has happened. With unemployment still stubbornly high, the data suggest that foreclosures could soon ramp up again.
Those reports followed news earlier in the week that home sales had fallen to their lowest level in more than a decade, despite mortgage interest rates that are at their lowest levels in nearly 40 years.
“All the indicators at the moment are pointing in the wrong direction,” said Bart van Ark, chief economist for the Conference Board, a business research group.
Of course, I finally fell to the Jindal Plan of ridding Louisiana of 10,000 four-year graduates a year, but I have to say, even if you graduate them from community colleges or trade schools, where are they going to go? Certainly, not to work in stable jobs. Plus, there’s this trend that’s undeniable of getting rid of folks in the mid 40s upward so you don’t have to pay for their more expensive benefit plans. These are things that the Federal Reserve cannot handle. They can’t force banks to lend without a law that makes them do so. When TARP and some of these laws were put into play, tougher requirements on asset and liability requirements should’ve been attached to the money. That’s the role of the Treasury to get a vital law written and the role of senior legislators to push it through.
Question: What do we have as leadership in the Treasury and the Senate?
Answer: Little Timmy-in-the-Wall Street Well again Geithner and Lobbyist-in-Training Chris Dodd.
The only thing getting through congress right now is legislation written by mega corporations in oligopolies that benefit from that horrid market structure. The legislation they push reduces the chances of them ever seeing legitimate competition. We also see legislation handing them tax payer money to screw over their customers. It’s shameful!!!
Meanwhile, there’s still problems with the potential of that damned BP well to spew oil. It’s not killed yet, folks. Then, there’s seriously unemployed people and nearly bankrupt state governments and localities. Meanwhile, all Fox new can do is gin up some Muslim conspiracy story and all the politicians are on vacation. I’m glad some of the journalists are down here pointing out the 5 years of slow progress towards Katrina recovery, but really, a two day attention span is not going to solve our problems down here. They might as well go home and talk about the country’s economic problems.
Why can’t we get some real political leadership and effective and smart Journalists? All I see on TV are a bunch of idiots like Rick Sanchez (who has me not watching CNN any more because he’s just plain dumb… I’d like to see him on that show pitting him against fifth graders… he’d lose to every one of them!) and Allan Simpson (whose voice is downright mainstream compared to most on Fox). The journalists are clueless on any topic of substance and driven by ratings. The current group of politicians seem to have us re-fighting the revolution and the first and fourth amendment and the civil war and the 14th amendment.
What’s next a movement to re-establish prohibition and remove the rights of women to vote?
There’s definitely a vacuum of leadership and a national voice of reason and I’d rather be right and out here in the wilderness than in the vat of corruption and stupidity that is the MSM and congress.
Have a nice day and a pleasant tomorrow!!!
I’ve always had a thing about people with shifty, beady eyes. I don’t trust ‘em. Two folks from Wyoming top my list in that category. The first is Dick Cheney. Close behind him is the Cat Food Commission’s Alan Simpson. Why any one would want to resurrect this man’s nasty career is beyond me. That a Democratic president was responsible for it, just makes me irritated. If his last comment isn’t a reason to send him back to BrokeIdeas Mountain, nothing will be.
Liberals and groups in favor of preserving Social Security are calling for the co-chair of President Obama’s deficit commission to resign after he said in an e-mail that Social Security is “a milk cow with 310 million tits.”
In a letter responding to criticisms against him from a group representing older women, former Wyoming Sen. Alan Simpson wrote that he has “spent many years in public life trying to stabilize” Social Security. However, he wrote, “Yes, I’ve made some plenty smart cracks about people on Social Security who milk it to the last degree. You know ‘em too. It’s the same with any system in America. We’ve reached a point now where it’s like a milk cow with 310 million tits!”
Simpson and former White House Chief of Staff Erskine Bowles, the co-chairs of Mr. Obama’s bipartisan National Commission on Fiscal Responsibility and Reform, have raised the ire of liberals with remarks suggesting they intend to recommend scaling back Social Security as a means of reducing the deficit.
However, groups are saying today that Simpson’s latest remarks prove he is unfit to lead the commission and should resign.
How many times must we repeat that Social Security is an insurance program that people pay for with their hard earned cash and their boss’s profits? It’s not some mean-based social program. The very rich get topped out of it because there’s even a maximum benefit and maximum premium. You don’t collect if you don’t pay into it. That’s not a welfare program!
A copy of Simpson’s email can be found on The Atlantic along with an excerpt from folks calling on him to resign his position.
“Alan Simpson’s comments are offensive and sexist and clearly demonstrate that he is unfit to continue to lead the President’s Fiscal Commission. His comments not only show his true view of women and older Americans but also his disdain for the very program he claims he is trying to protect – Social Security. Social Security Works is demanding that he resign immediately. If he will not, the President must fire him. Alan Simpson has no business deciding the fate of hundreds of millions of Americans’ retirement future. He should have no power over Social Security, which provides vital economic support to millions of children and people with disabilities, as well as seniors and their families.”
Simpson continues to be a menace to the middle class. Why on earth would Obama bring him back from the dead unless he’s serious about ransacking Social Security along with the rest of the Republicans?
Here’s the worst part of Simpson’s letter.
If you have some better suggestions about how to stabilize Social Security instead of just babbling into the vapors, let me know. And yes, I’ve made some plenty smart cracks about people on Social Security who milk it to the last degree. You know ‘em too. It’s the same with any system in America. We’ve reached a point now where it’s like a milk cow with 310 million tits! Call when you get honest work!
It’s not often you see a professor of economics use a Broadway and Hollywood metaphor for what’s going on in the financial markets, but Thorvaldur Gylfason did and it’s a blast to read. Basically, Gylfason casts the Wall Street Banksters in the same light as huckster Max Bialystock.
Not all the CEOs running the fraudulent savings and loans (S&Ls) in California and Texas in the 1980s and 1990s saw The Producers, but all of them could have played Max’s role convincingly. They shared Mr. Brooks’ insight into why the massive frauds use accounting as their “weapon of choice”, structure their efforts to fail, and recruit an accountant as their most valuable fraud ally. The fraudulent CEOs and their accounting allies were the real-life Bialystocks and Blooms. They bankrupted the S&Ls, enriching themselves and their friends along the way, at the expense of stockholders, creditors, and taxpayers.
Fraudulent lenders maximise their (fictional) income by making exceptionally bad loans and growing very rapidly. Borrowers that will frequently be unable to repay their loans are numerous (allowing the lender to grow rapidly) and will pay a higher interest rate (yield). The combination of rapid growth and high interest rates produced guaranteed, record income in the near term during the S&L debacle and the current subprime lending crisis.
During the ongoing subprime mortgage loan crisis, the rating agencies and the top tier audit firms played the real life role equivalent to the critic that Max pretended to try to bribe to make sure that Springtime for Hitler received a terrible review. Unlike the critics, who Max realised he could not succeed in bribing, the rating agencies and the top tier audit firms gave rave reviews to toxic subprime mortgage paper. The rating agencies claimed the toxic waste was pristine “AAA” – the safest of the safe. The elites that we count on to advise us on quality in the real world are more corruptible than the elites in the fictional world that Max and Leo inhabited.
I worked for one big S&L in the 80s and I can tell you, the senior management there was just a clueless bunch of entrenched nitwits from a Jesuit boys Prep School and later, the college of the same name (Creighton). They had no idea they were losing so much money with their gobble up every little guy in sight behavior until I–a little girl in a banker blue suit–actually put their income and balance sheet in a way where they couldn’t ignore it. First thing they did? Run to the market with an IPO for fresh suckers to fund their ‘failure’. In that much, I see Max all over the place. Only, thing was that I didn’t play. I wouldn’t take any of their stock for love or money.
Here are some characteristics of fraudulent banks cited in a book called “The Best Way to Rob a Bank is to Own One” by lawyer William Black. Something to keep in mind in the happy days are here again momentum blazing up there near the NYSE building.
- They grow very rapidly;
- They make really bad loans at high yields (because only borrowers who have no intention of paying back will borrow at exorbitant interest);
- They pile up huge debts; and
- They set aside pitifully small loss reserves.
That was the same as it ever was from the crashes of the 1920s, 1980s, and those in the 2000s.
What I’d like to know is when are these versions of Bialystock and Bloom headed for jail? Or at least some form of Club Fed?
(you can treat this is an open thread … it’s a slow day other than the visiting drive by hate hits!)
I worry about the future of this country and its children.
Part of my parent’s retirement and old age security comes from Social Security; an insurance program now being threatened with cuts and privatization. As you know, I’m vehemently against both and believe much of the problems with Social Security are in the minds of the people that want to reap the benefits of a large pool of money in their hands instead of the trust funds’ care. The future aged will have even more challenges when they find their homes no longer are the nest eggs they assumed they would be.
The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming.
More than likely, that era is gone for good.
“There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”
Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment.
We must prepare for that reality and this one. Credit cards are the worse use of credit possible and are getting worse by the minute. Cut them up and get rid of them now! They are at levels that would make a loan shark blush given the rate of inflation. Banks are milking them for all they are worth because one established, balances are hard to get rid of. Never pay minimum payments and try to keep them only for true emergency purposes. They are the yoke of oppression.
Interest rates continue to tumble for the U.S. Treasury, companies and home buyers alike. But for a large portion of 381 million U.S. credit-card accounts, borrowing rates have been moving only one way: up.
And average rates are likely to climb further in the near future.
New credit-card rules that took effect Sunday limit banks’ ability to charge penalty fees. They come on top of rule changes earlier this year restricting issuers’ ability to adjust rates on the fly. Issuers responded by pushing card rates to their highest level in nine years.
In the second quarter, the average interest rate on existing cards reached 14.7%, up from 13.1% a year earlier, according to research firm Synovate, a unit of Aegis Group PLC. That was the highest level since 2001.
Those figures look especially stark when measuring the gap between the prime rate—the benchmark against which card rates are set—and average credit-card rates. The current difference of 11.45 percentage points is the largest in at least 22 years, Synovate estimates.
The continued recession environment is cutting into our living standards, our chances for employment, and the necessary services that the government provides. Education is especially hard hit. There has been a lot of effort to privatize public services and this has led to some astounding changes in the effectiveness of the public arena to deliver benefits instead of profits to private individuals.
It has come to this: Parents are now being asked to send their children to school with their own toilet paper. And not just toilet paper, but all sorts of basic items that schools themselves used to provide for kids. It’s all part of a disturbing trend, highlighted by the New York Times last week, of cash-strapped public schools — their budgets eviscerated by state cutbacks — shifting more and more financial responsibility onto parents.
Privatization meant transferring responsibility for entire programs or functions to the private sector. But with the drastic budget cuts that states have been forced to make, responsibility for public services and programs is literally being forced into private hands one roll of toilet paper at a time. We’ve entered the era of backdoor privatization.
On the surface, these stop-gap measures don’t seem unreasonable. After all, it’s hardly new for parents in well-off school districts to chip in for supplies, music classes and even teacher’s salaries in an effort to minimize the effect of school budget cuts on their children. What is new, though, is the extent to which families are being asked to contribute basic items. This may be too much to ask of parents who are struggling to pay their own bills — especially since they’ve already paid taxes that are supposed to support the public school system.
Our war dollars do not go to paying soldiers decent salaries and to supporting veterans in their hours of need. They are increasingly going to line the profiteer’s pockets. Blackwater, Halliburton, General Electric, Boeing, are major recipients of government largess. In this day of tight wallets, corporations that step in to profit from government services are experiencing record profits. Meanwhile, the American middle and working class is left to fend for itself. None of this has changed under the current administration and will get no better in the future.
Be aware of this new and growing reality and do not play into the schemes. We have HAMP which is supposed to help with mortgage modification that has failed. There are early signs that the new federal health care reform is on the same path. The failure of these programs was in the design. The links I’ve given you in this paragraph are to right wing sites. This is to show you that their failure will be used by the right wing to force further privatization and ‘profitization’ of public suffering and need which will be a booming market in the future. The greedy will step in to take advantage of the opportunities and there will be politicians that will let them.
Don’t be caught off guard.
Okay, I’m going to mince and play with words. I’m probably taking all this talk about being “professorial” too personally but look at different takes on the word. One as applied to Elizabeth Warren and the other applied to President Obama. Notice the differences?
She’s either the plain-spoken, supremely smart crusader for middle-class families that her supporters adore, or she’s the power-hungry headline seeker her critics loathe, a fiery zealot disguised in professorial glasses and pastel cardigans.
O’Neill has a particular bone to pick with Geithner because he hasn’t been forceful about endorsing Warren. He has reportedly expressed some behind-the-scenes opposition to her because the brainy Harvard professor’s hard-charging style isn’t suited for the finesse Washington politics requires.
He singled out this sentence from Obama as unfortunate: “That is why just after the rig sank, I assembled a team of our nation’s best scientists and engineers to tackle this challenge — a team led by Dr. Steven Chu, a Nobel Prize-winning physicist and our nation’s secretary of energy.”
“A little less professorial, less academic and more ordinary,” Payack recommended. “That’s the type of phraseology that makes you [appear] aloof and out of touch.”
Since Obama’s election, a parade of critics has opined that as president he seems to be more of a professor and less of a poet when addressing the public. And they say that though he may be trying to explain the complicated issues of the day in a simple manner, the way he talks to his constituents may be creating more problems than solutions. After all, desperate times call for inspirational oratory.
Only a bad law professor operates that way. A good law professor speaks as clearly as possible and draws attention to anything the courts have glossed over or left ambiguous. We lawprofs try to extract the doctrinal rules and point up any place where courts have left the rule mushy. Then we apply those rules to particular factual settings. We hypothesize the most difficult applications of law to fact and help the students work through these hard problems. Obama’s lolling at high levels of abstract principle and avoiding the specifics of applying principle to real problems is not the way of the law professor.
See Elizabeth. See Elizabeth speak. See Elizabeth coherently fry Geithner’s ass in a very large pan on TV.
So which is it? Is being professorial being “aloof” or “fiery”? Is it a genitalia thing or a melatonin thing or just a bunch of confused journalists thing?
NOW’s Terry O’Neil thinks the old boys club at the White House are pushing Warren to the sidelines because she won’t fit in with the Washington Crowd. So, how come Obama was touted for his ‘professorial’ outsider status and Warren gets a dead fish?
A spokesman for Treasury said that selecting Warren isn’t up to Geithner. “It’s the White House’s decision,” the spokesman said.
Still, O’Neill believes that Geithner’s lack of endorsement for Warren is indicative of the nature of Washington politics and President Obama’s administration of late.
“Treasury is a notoriously sexist and misogynist industry and the good old boys don’t like her,” the NOW president said. “It’s the testosterone-fueled attitude that drove our economy off a cliff, and yet the president has advisers that are from that industry.”
It’s a combination of [Warren's] attitude and her anatomy,” she added.
For Geithner, this isn’t his first estrogen-charged run-in. The Treasury Secretary locked horns several times with Federal Deposit Insurance Co. Chair Sheila Bair during the height of the credit crisis.
Well, that’s understandable. But still, I have to ask, where do these two completely different pictures of what it means to be professorial come from?