Friday ReadsPosted: June 22, 2012
We made it through the Solstice on Wednesday so summer is officially here! The days get shorter and the nights get longer from here on out! What’s on your summer reading list?
My first read of the summer is going to be Kafka on the Shore by Haruki Murakami. I’m also planning on avoiding the heat by watching the entire first season of Treme.
More evidence shows that the economy is not improving because of the negative impacts of state and local spending. Layoffs of Public Workers are harming the recovery.
Government payrolls grew in the early part of the recovery, largely because of federal stimulus measures. But since its postrecession peak in April 2009 (not counting temporary Census hiring), the public sector has shrunk by 706,000 jobs. The losses appeared to be tapering off earlier this year, but have accelerated for the last three months, creating the single biggest drag on the recovery in many areas.
With the economy expanding, albeit slowly, state tax revenues have started to recover and are estimated to exceed prerecession levels next year. Yet governors and legislatures are keeping a tight rein on spending, whether to refill depleted rainy-day funds or because of political inclination.
At the same time, costs for health care, social services, pensions and education are still rising. Fourteen states plan to resolve their budget gaps by reducing aid to local governments, according to a report by the National Governors Association and the National Association of State Budget Officers.
So while the federal government has grown a little since the recession, and many states have recently begun to add a few jobs, local governments are making new cuts that outweigh those gains. More than a quarter of municipal governments are planning layoffs this year, according to a survey by the Center for State and Local Government Excellence. They are being squeezed not only by declining federal and state support, but by their devastated property tax base.
“The unfortunate reality is our revenue streams have not rebounded,” said Timothy R. Hacker, the city manager of North Las Vegas, which has cut its work force to 1,300 from 2,300 and is about to lay off 130 more. “Shaking this recession is becoming increasingly difficult.”
Some folks have been suggesting that the Fed should do something “out of the box” since it is politically impossible to stimulate the economy through good fiscal policy right now. Should the Fed start buying SLGS and monetize state debt?
The Fed can legally buy as many municipal bonds as it wants without congressional approval. Talk about burying a lead. This is a big story. Blanchflower is essentially saying that the U.S. government can bail out both the housing market via Fannie and Freddie paper purchases and the state governments via Muni purchases. And, of course, the banks get to dump these assets onto the Fed who will hold them to maturity. I guarantee you this will have a very nice kick since it is the state’s where the biggest employment cuts are. This is the Fed doing fiscal, friends
This is an interesting idea and one worth exploring.
The economic models are telling us that we need more stimulus. Lowering interest rates and more fiscal stimulus are out of the question. Quantitative easing remains the only economic show in town given that Congress and President Barack Obama have been cowed into inaction.
The major questions about quantitative easing aren’t so much if, but how much will the Fed buy and of what type? There is little point in moving slowly. So $100 billion a month for six months seems a reasonable amount.
What will they buy? They are limited to only federally insured paper, which includes Treasuries and mortgage-backed securities insured by Fannie Mae and Freddie Mac. But they are also allowed to buy short-term municipal bonds, and given the difficulties faced by state and local governments, this may well be the route they choose, at least for some of the quantitative easing. Even if the Fed wanted to, it couldn’t buy other securities, such as corporate bonds, as it would require Congress’s approval, which won’t happen anytime soon.
Republicans have been trying to change our lexicon for years now. George Lakoff and Elizabeth Wehling write on “Why Conservatives Sell their Wildly Destructive Ideology Better Than Democrats”.
Perhaps the most important omission from the Obama speech was any overt mention of The Public — everything that our citizenry as a whole provides to all, e.g., roads, bridges, infrastructure, education, protection, a health system, and systems for communication, energy development and supply, and so on. The Private — private life and private enterprise — depends on The Public. There is no economic freedom without all of this. So-called “free enterprise” is not free. A free market economy depends on a strong Public. This is a deep truth, easy to recognize. It undercuts Romney’s central pitch, that is it private enterprise alone that has made our country great, and that as much as possible of The Public should be eliminated.
Romney calls free enterprise “one of the greatest forces of good this world has ever known.” In reality, America free enterprise has always required The Public.
Romney attacks The Public, speaking of “the heavy hand of government” and “the invisible boot of government.” The contrast is with the putative “invisible hand” of the market — which leads to the good of all if everyone follows their self-interest and the market’s natural force is not interfered with. Romney’s “invisible boot” evokes the image of a storm trooper’s boot on your neck. The government is the storm trooper, your enemy. You are weak and in an impossible position. You can’t move — a metaphor for being held back and not being able to freely engage in the economy. Romney uses the frame consistently: “The federal establishment,” he says,” has never seemed so hostile.” The Public is an “establishment” — an undemocratic institution — which is the enemy of the people. It is implicit in this frame that the government is not the people.
According to MSNBC, a ruling by the Supreme Court Thursday waived fines and sanctions against ABC and Fox, saying the Federal Communications Commission did not give them fair notice before punishing them over brief instances of curse words and nudity.
The ruling (PDF), which does not affect the FCC’s overall policy toward profanity, centered on outbursts by Cher and Nicole Richie on live awards shows on FOX and a brief instance of partial nudity shown on ABC’s NYPD Blue.
“Because the Commission failed to give Fox or ABC fair notice prior to the broadcasts in question that fleeting expletives and momentary nudity could be found actionably indecent, the Commission’s standards as applied to these broadcasts were vague,” Justice Anthony Kennedy wrote in the unanimous decision, adding that the FCC was free to revise its current policy “in light of its determination of the public interest and applicable legal requirements.”
THIS week two Nobel-peace-prize laureates, both international figures of inspiration, find themselves visiting Britain: the leader of Myanmar’s (ie Burma’s) opposition, Aung San Suu Kyi; and also the Tibetans’ exiled spiritual leader, the Dalai Lama. On June 19th, in London, the two met.
The rendezvous, not publicised on either of their official schedules, was disclosed by the Dalai Lama’s office on Twitter only the next day, where it was described simply as “a private meeting”. The Dalai Lama, who had previously called for Miss Suu Kyi’s release from house arrest, is reported to have told her “I have real admiration for your courage.” He also gave her his blessing, as one Buddhist to another. The obvious backdrop to any such blessing would be the separate political struggles of Myanmar and Tibet. The two places have a certain neighbour in common.
China’s leaders will not be happy to learn of the meeting. The Dalai Lama’s ten-day visit to Britain has given fresh occasion for China to denounce him. In a further measure, the Chinese Olympic committee threatened to withdraw some of its athletes from training in England. The Dalai Lama shrugged off all this as “routine”. He is as accustomed to acting as a hate figure for the Chinese government as he is to being a symbol of hope to many people elsewhere.
So, that’s a little this and that to get us started this morning. What’s on your reading and blogging list today?