I am grading essays and papers on currency crises (circa 1999-2002) and financial crises (the last one) and basically all those kinds of crises the tend to come from out of control speculation and the government encouraging the wrong kinds of things. This mostly happens because rich people donate to the campaigns of politicians and own newspapers and media outlets. Politicians want to get reelected and get more powerful and more rich. Rich businesses and investors want to get more powerful and rich. It’s kind of the perfect alignment of shared interests based on lust and greed and all the baser instincts. Isn’t it terrible when the facts get in the way? So, they just ignore them or consider them an alternative liberal opinion. It drives me nuts.
So, BB asked to me write something about what I research and teach and usually regurgitate to you. You know that the austerity narrative has theoretically fallen apart. Well, it’s also falling apart via the numbers, data, facts and reality So, let’s start out with some very bad, awful, terrible horrible Dubya Bush Policy 10 years ago and why tax cuts for the rich still don’t do good things for the economy or now, even the investment markets. This is written by economist Bruce Bartlett who was an adviser to the Reagan administration.
Ten years ago this month, Congress enacted the third major tax cut of the George W. Bush administration. Its centerpiece was a huge cut in the tax rate on dividends. Historically, they had been taxed as ordinary income, but the Bush plan, enacted by a Republican Congress, cut that rate to 15 percent. The tax rate on ordinary income went as high as 35 percent.
This initiative originated with the economist R. Glenn Hubbard, who had been chairman of the Council of Economic Advisers when the proposal was sent to Congress. Mr. Hubbard was a strong believer that the double taxation of corporate profits – first at the corporate level and again when paid out as dividends – was a major economic problem.
During the George H.W. Bush administration, Mr. Hubbard had been deputy assistant secretary of the Treasury for tax policy and wrote a Treasury report advocating full integration of the corporate and individual income taxes.
Mr. Hubbard had also spearheaded enactment of big tax cuts in 2001 and 2002 that he said would jump-start the American economy. In an op-ed article in The Washington Post on Nov. 16, 2001, he predicted that the soon-to-be-enacted 2002 tax cut, which President Bush signed on March 9, 2002, would “quickly deliver a boost to move the economy back toward its long-run growth path.”
Mr. Hubbard predicted that it would create 300,000 additional jobs in 2002 and add half a percentage point to the real gross domestic product growth rate.
There is no evidence that the tax cut had any such effect. The unemployment rate remained above 5.7 percent all year, rising to 5.9 percent in November and 6 percent in December. The real G.D.P. growth rate fell each quarter of 2002, and by the fourth quarter growth was at a standstill. Hence the need for yet another big tax cut.
The idea of the 2003 legislation was to raise dividend payouts, thereby bolstering personal income, and raise the prices of common stock, which would improve household balance sheets. As President Bush explained in his signing statement, “This will encourage more companies to pay dividends, which in itself will not only be good for investors but will be a corporate reform measure.” He also said the dividend tax cut would “increase the wealth effect around America and help our markets.”
The Treasury Department issued a fact sheet on July 30 asserting that the decline in dividends had been a cause of the weak stock market and noting that dividend payouts had risen since enactment of the tax cut on May 28.
Subsequent research, however, found that the increase in dividends was a short-term phenomenon and mainly at companies where stock options were a major form of executive compensation. A 2005 Federal Reserve Board study found that the United States stock market did not outperform European stock markets after the dividend cut. Nor did stocks qualifying for lower dividend taxes outperform those, such as real estate investment trusts, that did not qualify for lower dividend taxes. Non-dividend paying stocks slightly outperformed dividend-paying stocks, and many corporations that did pay higher dividends scaled back stock repurchases by a similar amount.
So, this is yet another example where Republican economic policy is totally out of step with outcomes, data, and reality. Yet, they keep repeating that it works the way it doesn’t work just because, remember, the agenda is greed, power, and more wealth to the already greedy, powerful and wealthy. The deal is they get it wrong, got it wrong, and continue to get it wrong but that doesn’t stop them from trying to weasel their way into a narrative that says, hey, this really isn’t wrong. There’s still some validity there and all economists must be liberals like Paul Krugman who are just talking up their philosophical line. Take austerity economics, please. I mean it. Take it and those idiots who push it to hell and leave them there. Still, the very serious people want to take this very seriously even when it is just plain seriously wrong. Take Michael Kinsley, please. He can report from Hell.
I’ve spent a rather alarming portion of this week wading into intellectual pissing matches, so I’m loath to respond to Michael Kinsley’s response to last week’s brouhaha over austerity policies. But one paragraph does merit some pushback. After noting the backlash to his last column, Kinsley writes the following:
There are two possible explanations. First, it might be that I am not just wrong (in saying that the national debt remains a serious problem and we’d be well advised to worry about it) but just so spectacularly and obviously wrong that there is no point in further discussion. Or second, to bring up the national debt at all in such discussions has become politically incorrect. To disagree is not just wrong but offensive. Such views do exist. Racism for example. I just didn’t realize that the national debt was one of them.
Kinsley assumes that it must be the second explanation, and then goes on from there.
I can’t speak for anyone else who pushed back against Kinsley’s column from last week. Speaking for myself, however, I blogged about it because Kinsley was “spectacularly and obviously wrong.” I say this because almost everything I wrote in my response to Kinsley I knew at age 18 after taking Economics 101 in college.
To explain, let me focus on Kinsley’s motivation for thinking that the austerians have a point:
Austerians believe, sincerely, that their path is the quicker one to prosperity in the longer run. This doesn’t mean that they have forgotten the lessons of Keynes and the Great Depression. It means that they remember the lessons of Paul Volcker and the Great Stagflation of the late 1970s. “Stimulus” is strong medicine—an addictive drug—and you don’t give the patient more than you absolutely have to.
This is wrong for three reasons, one pedantic and two substantive. First, to be pedantic, the austerity debate is about the wisdom of using expansionary fiscal policy — i.e., running a significant federal budget deficit — to alleviate downturns. Paul Volcker was the chairman of the Federal Reserve and thereby responsible for setting monetary policy. He had nothing to do with fiscal policy. This is a distinction that I learned in my first few lectures on macroeconomics. So either Kinsley phrased this badly or he’s confused about what this debate is about.
It just keeps coming down to the fact that most journalists and politicians simply do not know what they are talking about when it comes to economics. So, they assume an economist like Paul Krugman has a liberal bias on all things–including the color of the sky and the laws of gravity and demand–and they make the worse assumption that those arguing Republican policy these days must have a valid point when the only point is, yes, you know it … to deliver more wealth, power and influence to themselves and their friends that already have it. Some times a lie really is just a lie.
A wonderful example of the myopia of the deficit scolds…
The background is that Michael Kinsley wrote a particularly bad column last week about “austerity,” a key point of which was based on factually incorrect memories of what went wrong in the 1970s; as you can imagine, this earned him plenty of corrections and dismissals from people who used access to accurate economic and government policy statistics.
Kinsley was quite taken aback by this, apparently, and wrote a follow up to defend himself. Dan Drezner has already pointed out that Kinsley is still relying on the same inaccurate memories that got his first column into trouble, but I actually found a different part of Kinsley II more interesting, in which he thinks he’s caught Paul Krugman in a contradiction.
Paul Krugman takes credit for good economic news whenever it happens. On Krugman’s blog site (“The Conscience of a Liberal”) last week were two bits of prose side-by-side. One was an ad for his latest book, End This Depression Now! “How bad have things gotten?” the ad asks rhetorically.” How did we get stuck in what now can only be called a depression?” Right next door is Krugman’s gloat about the recent pretty-good economic news. “So where are the celebrations,” he asks, “now that the debt issue looks, if not solved, at least greatly mitigated?” Greatly mitigated? By what? Certainly not by anyone taking Paul Krugman’s advice. He has been, in his own self-estimate, a lone, ignored voice for reason crying out in an unreasoning universe.
What’s the problem? The linked post by Krugman isn’t a gloat about good economic news! It is, to be sure a gloat; it’s a gloat about deficits…Krugman goes so far as to call lower deficits “progress,” although as I read it he’s really just saying that lower deficits should be counted as progress from the point of view of the deficit scolds.
What’s happening here is that Kinsley is projecting onto Krugman a classic deficit scold mistake; Kinsley is conflating the federal budget deficit with the economy. Krugman isn’t doing that; it’s purely Kinsley’s invention.
It gets, however, to exactly why Kinsley was buried under a large pile of abuse after his first column. Well, in part; the other part, as Krugman notes elsewhere, is “the existence now of a policy blogosphere…which makes bluffing harder.” Say something factually inaccurate these days, and you’re going to get slammed; it seems that some pundits who preceded that development find it hard to get used to it.
I still have no idea why journalists feel they just know everything about economics compared to say, knowing everything about Brownian motion or performing brain surgery. It’s the same with politicians. They just seem to confuse a really complex subject that most people really struggle with in college and never take beyond that with something like a political science class or a journalism class. You don’t even get real economic stuff until you way up there in school. The introductory stuff is like the ABCs and they don’t even seem to grasp that. Anyway, stop confusing getting facts wrong with just another opinion …
Let’s take a look a a few newsy bits making the headlines, or causing all the tweeters a’twitter, this lovely spring late afternoon.
I know the Pope recently meet with some nuns and and told them not to act like old maids, but…
An 83-year-old nun who broke into a Tennessee depleted uranium storage facility in 2012 and splashed human blood on several surfaces, exposing a massive security hole at the nation’s only facility used to store radioactive conventional munitions, was convicted Wednesday and sentenced to a term of up to 20 years in prison.
The only regret Sister Megan Rice shared with members of her jury on Wednesday was that she wished 70 years hadn’t passed before she took direct action, according to the BBC. She and two other peace activists, 64-year-old Michael Walli and 56-year-old Greg Boertje-Obed, were convicted of “invasion of a nuclear facility” in Oak Ridge, Tennessee, even though investigators admitted they did not get close to any actual nuclear material.
The three activists are part of a group called “Transform Now Plowshares,” a reference to the book of Isaiah, which says, “They shall beat their swords into plowshares. They shall learn war no more.” All three face individual sentences of up to 20 years, along with a litany of fines.
“The shortcomings in security at one of the most dangerous places on the planet have embarrassed a lot of people,” the activists’ attorney, Francis Lloyd, told members of the jury according to the BBC. “You’re looking at three scapegoats behind me.”
Sister Rice has been arrested between 40 or 50 times committing acts of civil disobedience, according to The New York Times, including once in Nevada after she physically blocked a truck at a nuclear test site.
That is one highly active activist nun. They did get some attention in the media, although no real change came from their actions, except possibly new security procedures. I mean…I would have thought that security was beefed up at nuclear power plants around the US…maybe not?
From one form of “criminal activity” to another…Knife-wielding Florida man in $5 million home threatens TV reporter: ‘I’ll slit your throat’ When did knives become a popular choice among nutcases?
A Florida man is out of jail on Thursday after he was arrested for destroying a local television news crews’ equipment with a knife and then threatened the life of a reporter.
Local 10′s Ross Palombo and photographer Shane Walker setting up for a report about a $5/2-million estate in Fort Lauderdale which allegedly owed $100,000 in taxes on Tuesday when Louis Dominic Paolino III came out of the house with a knife and began slashing various pieces of broadcasting equipment, which were sitting on public property.
Paolino then came at Walker with the knife, and much of the confrontation was caught on camera.
According to a police report, Paolino ordered Walter to “stop filming me or I’ll slit your throat.”
Palombo called 911 and a SWAT team arrived, surrounding the house for over two hours before leaving. Paolino was allowed to negotiate a time to turn himself in to police at a later date.
Paolino surrender on Thursday and was charged with aggravated assault, criminal mischief and grand theft.
Cue the COPS music….Bad boy..bad boy….what you gonna do…
On the House floor yesterday afternoon, Rep. Mark Pocan (D-WI) unveiled what some are describing as the “worst” visual chart to ever grace the legislative body.
As flagged by Politico’s Seung Min Kim, Rep. Pocan was seen doodling on his favorite white flipchart about something or other:
Comedy Central had a better take on Pocan’s masterpiece: Comedy Central’s Indecision, Rep. Mark Pocan (D-WI) explains why this chart…
I will end this post with one hell of a beautiful picture…Shakesville: Photo of the Day
Gina DeJesus, one of three women held captive for about a decade at a run-down Cleveland house, gives a thumbs-up as she is escorted toward her home Wednesday, May 8, 2013, in Cleveland. (AP Photo/Tony Dejak) Via.
There’s a lot going on in the middle east as tensions mount between Syria and Israel. The situation continues to unravel.
Israeli jets devastated Syrian targets near Damascus on Sunday in a heavy overnight air raid that Western and Israeli officials called a new strike on Iranian missiles bound for Lebanon’s Hezbollah.
As Syria’s two-year-old civil war veered into the potentially atomic arena of Iran’s confrontation with Israel and the West over its nuclear program, people were woken in the Syrian capital by explosions that shook the ground like an earthquake and sent pillars of flame high into the night sky.
“Night turned into day,” one man told Reuters from his home at Hameh, near one of the targets, the Jamraya military base.
Former Arizona Congress Woman Gabby Giffords won a profile in courage award in Boston. Her new role is an outspoken and effective symbol for more gun safety laws.
“It takes real courage to overcome a disability that is so personal,” says Guy McKhann, a leading neurologist at Johns Hopkins University.
Although he hasn’t treated her, he says it was clear that, distinct from cognitive abilities, retrieving the right words is difficult for Giffords. “What she wants to say sometimes doesn’t come out,” McKhann says. (A personal disclaimer: I am chairman of the Profile in Courage Committee that honored her Sunday and have a son with a brain injury.)
On Jan. 8, the two-year anniversary of the shooting, Giffords and Kelly started Americans for Responsible Solutions. They’ve already raised more than $10 million, enlisted more than 300,000 supporters, aired national television ads advocating expanded background checks for gun purchases and campaigned for the measure in a dozen states.
They are perfect for this role. She is a courageous survivor of a gun attack, a former Western member of Congress, a longtime hunter and supporter of gun rights. He is a combat veteran, Navy pilot and space shuttle commander. The National Rifle Association can’t paint them as effete foes of the Second Amendment.
In January, Giffords delivered emotional testimony on the measure to the Senate Judiciary Committee. She and Kelly personally lobbied members. Before last month’s Senate vote on the proposal, she sought out Arizona Republican Jeff Flake, a friend from her House days, and blurted out, “Need,” as in we need you. Unlike his Arizona colleague John McCain, who backed the background checks compromise, Flake voted no. The measure failed; since then, polls show a drop in Flake’s home-state popularity.
If you have young children around, this should scare you. You should also check the list at the link in the article to see if any of this crap is in your home.
Over 5000 children’s products contain toxic chemicals linked to cancer, hormone disruption and reproductive problems, including the toxic metals, cadmium, mercury and antimony, as well as phthalates and solvents. A new report by the Washington Toxics Coalition and Safer States reveals the results of manufacturer reporting to the Washington State Department of Ecology.
Makers of kids’ products reported using 41 of the 66 chemicals identified by WA Ecology as a concern for children’s health. Major manufacturers who reported using the chemicals in their products include Walmart, Gap, Gymboree, Hallmark, H & M and others. They use these chemicals in an array of kids’ products, including clothing, footwear, toys, games, jewelry, accessories, baby products, furniture, bedding, arts and crafts supplies and personal care products. Besides exposing kids in the products themselves, some of these chemicals, for example toxic flame retardants, build up in the environment and in the food we eat.
Examples of product categories reported to contain toxic chemicals include:
- Hallmark party hats containing cancer-causing arsenic
- Graco car seats containing the toxic flame retardant TBBPA (tetrabromobisphenol A)
- Claire’s cosmetics containing cancer-causing formaldehyde
- Walmart dolls containing hormone-disrupting bisphenol A
Kinda terrible isn’t it?
The basic idea behind Keynesian support for stimulus/opposition to austerity under current conditions is that when private demand is weak and monetary policy is up against the zero lower bound, there is no offset to changes in government spending. This shouldn’t be a hard concept to grasp — in particular, you would think that anyone posing as an economist could grasp the conditional nature of the statement.
Meanwhile, the proof is in the results. Look at the record highs in the Eurozone unemployment numbers.
European unemployment has hit a new record and Moody’s cut Slovenia’s debt rating to junk status as German Chancellor Angela Merkel defended her crisis strategy, pushing for twin goals of fiscal rigour and growth.
Grim new data showed on Tuesday that European unemployment set a fresh record in March with more than 19 million jobless people — including one out of four under-25-year-olds.
The Eurostat data agency reported an extra 62,000 people joining unemployment queues in just four weeks in the eurozone as the jobless rate climbed for the 23rd consecutive month — hitting 12.1 percent in March.
The frightening new figures — which showed almost two in three under-25s in Greece and Spain unemployed — come amid vocal criticism over the effects on jobs of the cost-cutting measures pushed by austerity advocates.
Anger against austerity is rising across Europe as hard economic data fails to show a turn-around.
Greece saw joblessness climb relentlessly to 27.2 percent in January, the latest available figures, from 26.3 percent in December.
Meanwhile Portugal, with unemployment at 17.5 percent in March, was seeking to agree new austerity measures after its Constitutional Court rejected as discriminatory cuts to civil servant salaries and pensions decided in response to demands by EU-IMF lenders.
In Cyprus, which saw a huge month-to-month rise in unemployment to 14.2 percent against 10.7 percent the previous month, the parliament was to debate the terms of a tough 10-billion-euro EU-IMF bailout.
The EU’s employment and social affairs commissioner Laszlo Andor warned that “EU institutions and governments, business and social partners at all levels need to do all they can to avoid a ‘lost generation’”
There is absolutely no reason for us to relive the Great Depression years and the complete political upheaval that resulted. I just do not get the obsession with debt. This is especially true because there is so little evidence for it and what evidence was provided was shown to be falsified, error-riddled, and just plain wrong by these kinds of numbers.
I wanted to end with a story that should be on every one’s radar but probably isn’t. Homelessness has been an increasing problem in this country for some time. So has the lack of treatment for the mentally ill. It’s been a Reagan pogrome that we can’t seem to rid ourselves of. Here’s the connection between the two.
Most homeless shelters in the US only take in people who are deemed mentally stable. Most don’t offer anything beyond basic shelter.
Housing programs that also provide psychological services are in the minority, homeless advocates told me. The harsh reality is that most homeless people living in the US who also suffer from serious illnesses like bi-polar disorder, schizophrenia and a host of other mental health disorders, are typically turned away from shelters on a nightly basis.
It’s a disturbing statistic when you discover, as I did, that more than 50 percent of the people living on the streets in the US are mentally ill. Of that number, I was told, less than half are receiving any mental health treatment.
For years, Candace Wood was one of them. I met with Wood in the dining room of Knoxville’s Volunteer Ministry Center (VMC).
For years the mission has dedicated itself to ending homelessness by providing not just housing, but the mental health services that ensures its residents don’t just get off the street, but also have the ability to stay off the street.
Wood told me that before she was connected with the VMC, she was, “wandering around aimlessly.”
“But, I was sick. I was sick because I didn’t take the medicine,” she said.
Wood said she is bi-polar. Since she was previously not on medication and was unable to manage her symptoms. She used to break into buildings to stay warm, hoping it would also get her arrested. Wood said that in jail she knew she’d get the meals and medication she needed.
Ginny Weatherstone is a passionate advocate for Knoxville’s homeless, she’s also the CEO of Volunteer Ministry Center. She says Wood’s story is a common one among the homeless who are also mentally ill.
“Three ‘hots’ and a cot. You get that in jail. For them, jail is their mental health hospital. Jail is their housing,” Weatherstone told me.
I’ve always felt that the Reagan and Bush years were all about punishing the poor, the ill, the elderly, the weak, the young, and the feeble. Statistics show that the wealthy have been doing fabulously since these three presidents reigned. It really is such a horrible statement on our countries’ priorities. How can so many folks be so rich and not give a damn about any one else.
The Rich Have Gained $5.6 Trillion in the ‘Recovery,’ While the Rest of Us Have Lost $669 Billion
It’s no accident.Oh, are we getting ripped off. And now we’ve got the data to prove it. From 2009 to 2011, the richest 8 million families (the top 7%) on average saw their wealth rise from $1.7 million to $2.5 million each. Meanwhile the rest of us – the bottom 93% (that’s 111 million families) — suffered on average a decline of $6,000 each.
Do the math and you’ll discover that the top 7% gained a whopping $5.6 trillion in net worth (assets minus liabilities) while the rest of lost $669 billion. Their wealth went up by 28% while ours went down by 4 percent.
It’s as if the entire economic recovery is going into the pockets of the rich. And that’s no accident.
Last week, I wrote about the debacle behind the study that was used to promote fiscal austerity in a time when just the opposite policy is prescribed by economic theory. One of the big questions I had was if the results of study’s hypothesis was now insignificant–which in scientific method means the conclusions were not proven–would we see a stop to these crazy austerity policy pushers. We’ve learned the answer is no. Dumber and Dumber–heads of the so-called cat food commission–who couldn’t lead their committee to a written conclusion are on the road touting their call to deficit hysteria based on the always controversial and now highly flawed study.
On April 19, just after I had written about how the key academic research used to bolster austerity policies was exposed by a 28-year-old grad student at U Mass-Amherst, I got a surprise in my email inbox: Erskine Bowles and Alan Simpson giddily announced their new deficit-reduction plan, which includes, among other things, a recommendation to increase the eligibility age for Medicare. Their plan would reduce debt as a share of GDP below 70 percent by 2023, and as the Washington Post reports, “seeks far less in new taxes than the original, and it seeks far more in savings from federal health programs for the elderly.”
What’s incredible is that over the last week, the study by Harvard economists Carmen Reinhart and Ken Rogoff that famously warned of the dangers of government debt has been proven to be riddled with errors and questionable methodology. To recap: R&R’s paper purported to show that countries with public debt in excess of 90 percent of gross domestic product suffered negative economic growth. Austerity hawks everywhere used it to justify cuts that have cost people jobs and vital services. The original spreadsheet used by R&R was obtained by a U Mass grad student, who found that in addition to the mistakes already noted by several economists, there was a coding error in their Excel spreadsheet that significantly changed the results of their study.
As New York magazine’s Jon Chait has pointed out, that same discredited research has been used by Bowles and Simpson to formulate their deficit-reducing austerity plans.
You simply cannot get these tools of the plutocracy to come clean. They’re going to go down with the stupidity and are trying to bring the rest of the country with them.
I promised myself to make sure we pointed to injustice and suffering around the world as well as our own home towns. Today I want to provide information about Myanmar–a country I’ve spent time studying and a country trying to change–with a history of brutal ethnic cleansing of its Muslim minority population.
Ethnic cleansing and crimes against humanity have been committed against Myanmar’s ethnic Rohingya people, according to a new report by Human Rights Watch (HRW), a New York-based nongovernmental organisation.
According to the report released on Monday, entitled All You Can Do is Pray, more than 125,000 ethnic Rohingya have been forcibly displaced since two waves of violence in May and October 2012.
Satellite images show almost 5,000 structures on land mostly owned by Muslim Rohingya have been destroyed, says the report.
The October attacks, the report states, were coordinated by Myanmar government officials, an ethnic Rakhine nationalist party and Buddhist monks. The deadliest attack took place on October 23, in which witnesses say at least 70 Rohingya – including 28 children – were massacred in Mrauk-U township.
The UN has described the Rohingya as one of the most persecuted minorities in the world.
Most Rohingya who live in Myanmar’s western Rakhine state are denied citizenship by the Myanmar government, which claims they are illegal immigrants from neighbouring Bangladesh and often refers to them as “Bengali”.
The Myanmar government has done nothing to prevent the violence, alleges the report, and at times government forces have joined in the attacks on the Rohingya.
“The Burmese government engaged in a campaign of ethnic cleansing against the Rohingya that continues today through the denial of aid and restrictions on movement,” Phil Robertson, HRW’s deputy Asia director, said.
“The government needs to put an immediate stop to the abuses and hold the perpetrators accountable or it will be responsible for further violence against ethnic and religious minorities in the country.”
I am so ashamed to read that Buddhist monks may have been participants. They have been targets themselves and this behavior violates the most important teaching of the Buddha which is the vow of non harming. No real Buddhist would participate in such horrors.
I also wanted to mention the return of CISPA and its impact on internet users in this country. This was slipped back into Congress while we were all watching Boston.
Described as “misguided” and “fatally flawed” by the two largest US privacy groups, the Cyber Intelligence Sharing and Protection Act (CISPA) threatens the online privacy of ordinary US residents more so than any other Bill since Congress amended the Foreign Intelligence Surveillance Act in 2008.
Its sole purpose is to allow private sector firms to search personal and sensitive user data of ordinary US residents to identify this so-called “threat information”, and to then share that information with each other and the US government — without the need for a warrant.
By citing “cybersecurity”, it allows private firms to hand over private user data while circumventing existing privacy laws, such as the Wiretap Act and the Stored Communications Act. This means that CISPA can permit private firms to share your data, such as emails, text messages, and cloud-stored documents and files, with the US government.
It also gives these firms legal protection to hand over such data. There is no judicial oversight.
To make matters worse, because there is little transparency and individual accountability, those who have had their data handed to the US government may not even know about it or be given a chance to challenge it.
Norway’s ruling party is pushing for drilling around environmentally sensitive areas in the Arctic Circle. Could this impact a return to attempts to drill the area by US Oil companies? I hope this doesn’t lead to a race to destroy ANWR
Exploration in the waters around the Lofoten islands just above the Arctic circle is becoming one of the most contentious issues for parliamentary elections in September.
The picturesque area had been off limits because it is home to the world’s richest cod stocks, with environmental groups and the tourism industry opposed to any development.
The Labour party voted for the study, a precursor to any exploration, but also said it would take another vote in 2015, before actual drilling could begin.
Oil is the Norwegian economy’s lifeblood – the nation is the world’s seventh-biggest oil exporter and western Europe’s biggest gas supplier.
Its sprawling offshore energy sector continuously needs new areas to explore to halt the decline in production and energy firms have argued that they should be allowed to investigate the Lofoten islands.
Norway’s oil production will fall to a 25-year low this year as North Sea fields mature. Even a series of recent big finds, like the giant Johan Sverdrup field, which could hold over 3 billion barrels of oil, will only arrest the decline.
Waters off Lofoten are estimated to hold 8 percent of Norway’s undiscovered oil and gas resources with seismic tests identifying 50 prospects that could hold recoverable reserves or around 1.27 billion barrels of oil equivalent, the petroleum directorate said earlier.
With Labour’s support, Norway’s top three parties now favor exploration in the area, raising the chance that the next government would begin the process.
So, here’s what Boston’s “union thugs” will be doing this morning: Boston Teamsters vs. Westboro Baptist Church: Teamsters to form a human shield at Bombing victim’s funeral, Look out BB and our Boston friends! These Westboro folks have come to disrupt funerals there. Down here, our Bikers block them.
Teamsters from Local 25 in Boston will protect the family of bombing victim Krystle Campbell during her funeral tomorrow morning. Members of the Westboro Baptist Church are expected to protest.
The Associated Press reports,
Family and friends are saying final good-byes to Krystle Campbell, one of the three people who lost their lives in the bombing at the Boston Marathon finish line.
A wake for Campbell is being held Sunday at a funeral home in Medford, where the 29-year-old restaurant manager was raised and graduated from high school in 2001. A private funeral is scheduled for Monday at St. Joseph Church.Local 25 was contacted by some concerned citizens of Medford asking for help to keep members of the Westboro Baptist Church from protesting the funeral of Krystle Campbell, scheduled for tomorrow morning at 10 AM in Medford.
Local 25 President Sean O’Brien asked all off-duty Teamsters to participate:
Teamsters Local 25 will be out in full force tomorrow morning at St. Joseph’s Church in Medford to form a human shield and block the Westboro Baptist Church from protesting the funeral of Krystle Campbell. The Campbell family and friends have already endured immeasurable amounts of heartache and tragedy this week, and deserve a peaceful funeral with time to grieve privately.
Westboro Baptist Church should understand that we will go to great lengths to make sure they don’t protest any funerals of the victims of the past week’s tragedies, and that those we lost receive a proper burial.
Teamsters Local 25 represents 11,000 hardworking men and women from the Boston area.
There are three dead from the bombing. Westboro is also connected to a law firm that makes money from the antics of these folks. They usually claim their first amendment rights were violated and then collect government money defending their case.
And just because I’ve quit watching CNN around a year ago after watching the station for years, I thought I’d end with this: “Last Week, CNN Itself Became the Poop Cruise”. Frankly, I’ve thought they were full of it and lacking substance for some time.
As reactions to the media’s handling (or rather, mishandling) of breaking news during a busy week continue to flow in, perhaps none is more condemning than David Carr’s latest column in The New York Times. The media critic came down hard on correspondent John King, newly appointed chief Jeff Zucker and the rest of the CNN news team that famously fumbled during the aftermath of the Boston bombing and hunt for the suspects. Most notably, the network erroneously reported the arrest of a suspect on Wednesday, when everybody now knows that a suspect wasn’t arrested until Friday when police found Dzokhar Tsarnaev hiding in the back of a boat.
Carr has an analogy for that. In discussing the mistake, one that more than one person described as “devastating,” Carr reminded us of the most recent moment that CNN’s stolen the limelight — perhaps not in a good way:
It was not the worst mistake of the week — The New York Post all but fingered two innocent men in a front-page picture — but it was a signature error for a live news channel. … Until now, the defining story in the Zucker era had been a doomed cruise ship that lost power and was towed to port, where its beleaguered passengers dispersed. This week, CNN seemed a lot like that ship.
Zing. Inevitably, Carr’s piece comes off almost as apologetic. In his parting words, the veteran journalist points out how even the president “wants CNN to be good.” So when it’s bad, it’s hard to watch.
I’m just praying for a better week and that we can get some attention on the small town of West Texas that really needs our help.
What’s you your reading and blogging list today?
Rarely has any one study had such an immediate impact on global policy. Usually, folks wait until a study is replicated and put through robust follow-up before any one takes research to heart. Reinhart & Rogoff (2010) basically played into the narrative of the plutocracy and what the ‘very serious people’ around the world wanted. So, its significant findings were taken very seriously before all those secondary tests of robustness and such were undertaken. Well, now we find out the wunderkind study that justified a lot of unnecessary austerity has some serious math mistakes. I’m still reading through all the criticisms but, as Krugman puts it “Holy Coding Error, Batman”! Let’s just call this some serious MATH FAIL!
The intellectual edifice of austerity economics rests largely on two academic papers that were seized on by policy makers, without ever having been properly vetted, because they said what the Very Serious People wanted to hear. One was Alesina/Ardagna on the macroeconomic effects of austerity, which immediately became exhibit A for those who wanted to believe in expansionary austerity. Unfortunately, even aside from the paper’s failure to distinguish between episodes in which monetary policy was available and those in which it wasn’t, it turned out that their approach to measuring austerity was all wrong; when the IMF used a measure that tracked actual policy, it turned out that contractionary policy was contractionary.
The other paper, which has had immense influence — largely because in the VSP world it is taken to have established a definitive result — was Reinhart/Rogoff on the negative effects of debt on growth. Very quickly, everyone “knew” that terrible things happen when debt passes 90 percent of GDP.
Some of us never bought it, arguing that the observed correlation between debt and growth probably reflected reverse causation. But even I never dreamed that a large part of the alleged result might reflect nothing more profound than bad arithmetic.
The best explanation of the problem that I’ve seen comes from Mike Konczal at RortyBomb.
In 2010, economists Carmen Reinhart and Kenneth Rogoff released a paper, “Growth in a Time of Debt.” Their “main result is that…median growth rates for countries with public debt over 90 percent of GDP are roughly one percent lower than otherwise; average (mean) growth rates are several percent lower.” Countries with debt-to-GDP ratios above 90 percent have a slightly negative average growth rate, in fact.
This has been one of the most cited stats in the public debate during the Great Recession. Paul Ryan’s Path to Prosperity budget states their study “found conclusive empirical evidence that [debt] exceeding 90 percent of the economy has a significant negative effect on economic growth.” The Washington Post editorial board takes it as an economic consensus view, stating that “debt-to-GDP could keep rising — and stick dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth.”
Is it conclusive? One response has been to argue that the causation is backwards, or that slower growth leads to higher debt-to-GDP ratios. Josh Bivens and John Irons made this case at the Economic Policy Institute. But this assumes that the data is correct. From the beginning there have been complaints that Reinhart and Rogoff weren’t releasing the data for their results (e.g. Dean Baker). I knew of several people trying to replicate the results who were bumping into walls left and right – it couldn’t be done.
In a new paper, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst successfully replicate the results. After trying to replicate the Reinhart-Rogoff results and failing, they reached out to Reinhart and Rogoff and they were willing to share their data spreadhseet. This allowed Herndon et al. to see how how Reinhart and Rogoff’s data was constructed.
They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second, they use a debatable method to weight the countries. Third, there also appears to be a coding error that excludes high-debt and average-growth countries. All three bias in favor of their result, and without them you don’t get their controversial result.
Whenever you model a system, you have to make some assumptions going in. These assumptions–coupled with the coding error–basically show the statistician’s slight of hand. You can prove just about everything and anything with numbers if you manipulate the data enough. The UMAss-Amherst professor et al has really pulled the curtain away from the big green talking head this time. Here’s the abstract.
Herndon, Ash and Pollin replicate Reinhart and Rogoff and find that coding errors, selective exclusion of available data, and unconventional weighting of summary statistics lead to serious errors that inaccurately represent the relationship between public debt and GDP growth among 20 advanced economies in the post-war period. They find that when properly calculated, the average real GDP growth rate for countries carrying a public-debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0:1 percent as published in Reinhart and Rogoff. That is, contrary to RR, average GDP growth at public debt/GDP ratios over 90 percent is not dramatically different than when debt/GDP ratios are lower.
The authors also show how the relationship between public debt and GDP growth varies significantly by time period and country. Overall, the evidence we review contradicts Reinhart and Rogoff’s claim to have identified an important stylized fact, that public debt loads greater than 90 percent of GDP consistently reduce GDP growth.
Shorter Abstract: They REALLY screwed the pooch.
So, there’s now this bigger problem out there which is the very serious people that are crashing economies based on a set of very biased assumptions and a very serious coding error. To put that in a more politically correct way: How Much Unemployment Was Caused by Reinhart and Rogoff’s Arithmetic Mistake? Followed by, will the very serious people correct their very serious policy errors now?
This is a big deal because politicians around the world have used this finding from R&R to justify austerity measures that have slowed growth and raised unemployment. In the United States many politicians have pointed to R&R’s work as justification for deficit reduction even though the economy is far below full employment by any reasonable measure. In Europe, R&R’s work and its derivatives have been used to justify austerity policies that have pushed the unemployment rate over 10 percent for the euro zone as a whole and above 20 percent in Greece and Spain. In other words, this is a mistake that has had enormous consequences.
In fairness, there has been other research that makes similar claims, including more recent work by Reinhardt and Rogoff. But it was the initial R&R papers that created the framework for most of the subsequent policy debate. And HAP has shown that the key finding that debt slows growth was driven overwhelmingly by the exclusion of 4 years of data from New Zealand.
If facts mattered in economic policy debates, this should be the cause for a major reassessment of the deficit reduction policies being pursued in the United States and elsewhere. It should also cause reporters to be a bit slower to accept such sweeping claims at face value.
I spent most of Monday’s Morning Reads showing the current US economic data that shows that the deficit and debt of the US are melting like the wicked witch under that bucket of water. I worry any more deficit reduction will throw our economy into recession and pave the way for Republican take over of the Senate. However, the big green talking heads have been ignoring the data and just about everything else that a legion of economists have said citing this one–now clearly known to be flawed–study. As Krugman mentioned in his blogs, their results was counter-intuitive and controversial among economists from day one of publication. Policymakers through out Europe and the US gratuitously ignored all that because the questions did not fit their plan to push the mistakes of banks on a lot of hapless citizenry.
This is literally the most influential article cited in public and policy debates about the importance of debt stabilization, so naturally this is going to change everything.
Or, rather, it will change nothing. As I’ve said many times, citations of the Reinhart/Rogoff result in a policy context obviously appealing to a fallacious form of causal inference. There is an overwhelming theoretical argument that slow real growth will lead to a high debt:GDP ratio and thus whether or not you can construct a dataset showing a correlation between the two tells us absolutely nothing about whether high debt loads lead to small growth. The correct causal inference doesn’t rule out causation in the direction Reinhart and Rogoff believe in, but the kind of empirical study they’ve conducted couldn’t possibly establish it. To give an example from another domain, you might genuinely wonder if short kids are more likely to end up malnourished because they’re not good at fighting for food or something. A study where you conclude that short stature and malnourishment are correlated would give us zero information about this hypothesis, since everyone already knows that malnourishment leads to stunted growth. There might be causation in the other direction as well, but a correlation study woudn’t tell you.
The fact that Reinhart/Rogoff was widely cited despite its huge obvious theoretical problems leads me to confidently predict that the existence of equally huge, albeit more subtle, empirical problems won’t change anything either. As of 2007 there was a widespread belief among elites in the United States and Europe that reductions in retirement benefits were desirable, and subsequent events regarding economic crisis and debt have simply been subsumed into that longstanding view.
The very serious policymakers were looking for any justification for their austerity pogrom. This is mainly because German taxpayers and pols don’t want to be on the hook for what German and US bankers did around the Eurozone. It is also because Republican law makers and their plutocratic overlords–like the Dr. Strangelove of Wall Street Pete Peterson–don’t want any funds floating around anywhere that could possibly find residency in their fee-churning ponzi schemes of investment funds.
It is not unusual, unfortunately, for some academics to neatly choose assumptions to drive results towards their hypothesis. That is why peer review is extremely important. Nearly every major study done using empirical data should be easily replicated. It is usual for the authors to share their database and R&R obliged on this matter. But, this emphasizes why major studies with major findings that don’t fit snugly with the current body of theory should undergo robust challenge. Many economists had challenged the findings back in 2010 and the fact that some felt compelled to repeat their research indicated a healthy level of skepticism which is the hallmark of good research and researchers.
What is most disturbing about this is that agendas that drive the interests of a few start to reflect these theories-in-process. R&R 2010 fit the gross ambitions of people that were less concerned about truth than philosophy and ability to drive policy that basically is at odds with everything we’ve known about fiscal policy. So, this takes us back to Matt’s question. There is incredible discussion on this in nearly all economics and finance blogs and circles. Will these findings engender the same discussion and any course correction of the very serious people that used this very serious paper to do some very serious damage around the world.
I know it’s too much to hear those wonderful words ” We were wrong” on top of some course corrections. But, hey it’s not too late for our President to give up the debt and deficit hysteria or is it?