The U.S. Government is NOT a household or a business
Posted: January 14, 2011 Filed under: U.S. Economy, U.S. Politics, Voter Ignorance, We are so F'd | Tags: economic illiteracy, Federal Debt, Federal Deficit, gold buggery, Paul Krugman, Rand Paul, Ron Paul 11 CommentsI’ve noticed the high level of economic illiteracy in the country since the day I started seriously studying economics. I’ve also noticed that faith-based economics rules the thought processes of many politicians. It always reminds me of those folks that believe in a literal garden of eden and a 7 day creation story over the facts that science hands us day-in and day-out. Molecular Biology has pretty much trumped their views but they persist in sticking their fingers in their ears and going la la la la la.
A variety of misguided notions have taken up residence in the brains of the same people, so I suppose it’s not surprising that the same groups that scream war on christmas also think the US will go bankrupt if we don’t up the debt ceiling or some such nonsense. The problem is that anti-intellectual flat earthers control a political party in this country. That problem extends to people who now sit as chairs of congressional committees that deal with the real world and real people. Then, there’s the fact that the other political party doesn’t really fight for the truth. It’s just all very distressing to me.
There are two stories today that I’d like to use as evidence to point to the incredible amount of lunacy floating around today’s Republican Party. The first comes from Paul Krugman. The second from The Economist. Krugman talks about the persistence of gold buggery. (Yes, I’m using a double entendre.) The Economist about the persistence of federal deficit and debt myths. They write on the number of people that don’t seem to understand what it takes for the US to ‘default’. Both myths need airing.
Paul Krugman writes political op-ed as well as information on economics. Economists are trained to separate the two. We even have two names for the circumstances. It’s called discussing positive and normative economics. You teach principles of economics students how to distinguish between the two on the very first day of class. Some times I think Dr. Krugman forgets that most people and politicians are economic illiterates. You see and hear constant confusion on his writings. People don’t seem to distinguish between his op-ed with the liberal bent (normative) and when he’s actually talking economic theory (positive). His op-ed today talks about the fact that there are many issues in politics today that are so polarizing that there is no third way or middle ground. I don’t want to point to that, but his blog post ‘Monetary Morality’ that takes this notion of no compromising with idiots which points to the absurdity of gold buggery or something he called paleomonetarism in an early post.
In those two posts, he points out that there is a narrative out there–mostly preached by the Pauls–that the Fed is evil and we need to be hung on a cross of gold (with apologies to William Jennings Bryan). If you read the two posts you’ll see that this issues isn’t a conversation or liberal issue at all. Economists have a shared understanding of theory that doesn’t include the Paul money narrative. The Paul monetary narrative is not about economics, it’s about some idea that the government and a central bank is some how confiscating something from you. It’s a philosophy of paranoia more than an economic statement.
You see, if you’re the kind of person who views being taxed to pay for social insurance programs as tyranny, you’re also going to be the kind of person who sees the printing of fiat money by a government-sponsored central bank as confiscation. You may try to produce evidence about the terrible things that happen under fiat currencies; you may insist that hyperinflation is just around the corner; but ultimately the facts don’t matter, it’s the immorality of activist monetary policy that you hate.
And this is also why politically conservative economists arguing for something like nominal GDP targeting, and pleading with their perceived political allies to stop talking nonsense, are going to be disappointed. If you’re in the intellectual universe where monetary policy is to be evaluated by results, you’re already out of the true believers’ moral universe. At a fundamental level, Milton Friedman and John Maynard Keynes are on one side; Ron Paul is on the other. And it’s not a debate in which evidence really matters.
The Pauls–and others–dwell in the land (Kentucky, I think) where you can create a theme park and put Neanderthals and all sorts of Dinosaurs that lived millions of years apart with modern animals in the Garden of Eden. All that’s needed in these narratives is the idea that the sun revolves around the earth or the earth is flat. It’s not science, it’s not data based, it’s just you wanting to believe your little view of the world is the correct one for no other reason than it appeals to your outlook on life.
Potential Republican Presidential Contenders 101
Posted: January 13, 2011 Filed under: 2012 presidential campaign, Republican presidential politics | Tags: Mike Huckabee, Mitt Romney, Newt Ginrich, Sarah Palin, Tim Pawlenty 22 Comments
Just a few items came to light today on future presidential contenders from the Republican Party. (Be afraid. Be very afraid.) Three of them are in the news today for something other than discussion concerning ramped up rhetoric.
First up, Minnesota Governor Tim Pawlenty makes a pledge to repeal DADT. In this video, Pawlenty self identified as a ‘social conservative’ to right wing talk show host and spokesjerk for the American Family Association Bryan Fischer. Bryan Fischer is a well known for his hate speech and “openly hostile bigotry against gays, Muslims, and all those who do not share his radical worldview”. The video and article come via People For The American Way.
Pay attention closely or read the transcript because you’ll hear Pawlenty use all the code words like “strict constructionist” for a discussion of Roe v. Wade. If you are not familiar with the winks and nods that extreme right wing candidates use to signal how extreme they really are to their key constituencies, you really should take the time to learn.
The Grand Forks Herald announces the governor is undecided but is just touring around promoting his book. Does any one else see a theme here? Louisiana Governor Bobby Jindal and former Alaska Governor Sarah Palin have also been touring around the country fund raising and getting some face time using book tours. I am definitely sensing a theme here. Pawlenty says his book highlight his ‘faith’. He has a blue collar upbringing and has republican populists roots like Palin and would have to fight Huckabee and Palin for the religious right/’Reagan Democrat’ crowd.
Little known compared to rivals Mitt Romney, Sarah Palin, Newt Gingrich and others, Pawlenty uses the book to trace a path from a boyhood handling rotten meat in a stockyards town to a political career that made him a vice presidential contender in 2008.
And Pawlenty, who was raised Catholic and later converted to an evangelical church with Baptist roots, heavily emphasizes religion. It’s befitting a book from Christian publisher Tyndale House Publishers and a possible political calculation for someone sizing up a White House bid since ruling out a third term as governor.
Social conservatives have an outsized voice in the GOP nominating process, especially in Iowa, where Pawlenty has focused much of his campaign-building work.
An entrance poll done during the 2008 Iowa caucuses found that more than half of the Republicans who turned out described themselves as evangelical Christians, and more than eight in 10 of caucus winner Mike Huckabee‘s supporters described themselves as born again or evangelical.
I’m sensing we’re going to get heavily doused with that old time religion as we get closer to the Iowa primaries. Can some one hand these people a copy of the constitution and tell them to stop skipping number 1 in favor of number 2?
Another possible Republican candidate is the corporate ex-CEO of the pizza chain Godfather’s. I used to hang out on Fridays afternoons with the University of Nebraska’s University Women’s Action Group at Godfather’s when it was the second location of two pizza parlors run by one man. Herman Caine now lives in Georgia and is a popular talk show host. (Do all of these right wingers eventually do a stint as talk show hosts?)
The announcement came on his website, where Cain wrote:
“The American Dream is under attack. In fact, a recent survey found 67% of the American People believe America is headed in the wrong direction. Sadly, this comes as no surprise to those of us who have watched an out-of-control federal government that spends recklessly, taxes too much and oversteps its Constitutional limits far too often.”
Cain, an African-American Republican, holds a master’s degree in computer science from Purdue University and was a corporate vice president for Burger King before running Godfather’s Pizza. Previously, he served as chairman of the board of directors for the Federal Reserve Bank of Kansas City — and was chairman of the board for the National Restaurant Association.
Caine has been omnipresent in Republican Fund raising. Does he have an appeal outside the business base? That will be a big question. He’s got far more gravitas than most of the other Republicans that are running since he’s always held a job outside of politics. Folk are implying that he may have a solid base in the conservative blogosphere. Frankly, I think he’d be a formidable candidate. I’ve heard him talk back when he took over Godfather’s and back in his Fed Days too. Those were business talks but he knows his stuff.
But though Cain has himself admitted that he would be a “dark horse” candidate, he will be greatly aided by the fact that he is a full-spectrum conservative with solid fiscal and social credentials. Christian conservatives love him, and The Club for Growth endorsed him for Senate in 2004. Cain is also close with fiscal conservative and two-time presidential candidate Steve Forbes. Depending on the field, there is great potential for him to rally conservative activists and bloggers to his cause.
For months now, Cain has been rumored to be seriously considering a presidential run. Perhaps not coincidentally, RedState’s Erick Erickson recently announced the launch of a new radio show, “The Erick Erickson Show” on Atlanta’s WBS radio — a station which also broadcasts Cain’s popular radio show.
Finally, we’re seeing Romney solidifying his campaign to move the helmet hair tradition of the Richie Rich side of Republican party forward in this RCP piece. He’s hiring staff.
Former Massachusetts Gov. Mitt Romney has secured both a pollster and a political director for his near-certain presidential bid this coming cycle, according to sources connected to Romney’s 2008 presidential effort.
Rich Beeson, a Republican operative who has worked as a political director at the Republican National Committee and was most recently a partner at the voter contact firm FLS Connect, will be Romney’s political director. Beeson has already moved his family to Massachusetts for his new role.
A GOP source who worked against Romney in the last campaign said Beeson was a savvy hire for Romney’s team, as he brings an outsider perspective to Romney’s Boston inner circle.
Romney’s political director for his last bid was Carl Forti, who now has a high-profile job at the Karl Rove and Ed Gillespie GOP group, American Crossroads.
There’s no news up today on Gingrich but you can be assured that ol’ Georgia Bull Dog is up to something. It’s going to be an interesting few years.
The Parable of the poor little rich people
Posted: January 13, 2011 Filed under: income inequality | Tags: bonus class, Brad Delong, Catherin Rampell, Emmanuel Saez, fractured parables, Income Inequality, Mega rich, Paul Krugman, Robert Reich 16 Comments
Last September, Chicago Law Professor and neighbor of the Obama family Todd Henderson complained that he just couldn’t make ends meet on a combined family income estimated to be about $400,000 a year. In February, CNN Morning News Anchor Kiran Chetry interviewed then-White House budget director Peter Orszag. She seemed flummoxed that 1/4 of a million dollars wasn’t a modest family income for civilized parts of the country.
“You also talk about letting taxes expire for families that make over $250,000. Some would argue that in some parts of the country that is middle class.” Back in reality, more than 98 percent of U.S. households make less than $250,000.
What is it with all these rich people who continue to whine about not having enough money to exist when they clearly are very wealthy when compared to the vast majority (98%) of Americans? What kind of warped perspective on life leads them to shed incessant tears during this kind of economy? Why-oh-why do we have such a candy ass batch of plutocrats? Don’t we at least deserve a few that are sincerely rugged?
This is wonky, but there’s a very simple narrative underlying the numbers and analysis.
Catherine Rampell–writing for Economix–offered up an answer in an article called ‘Why So Many Rich People Don’t Feel Very Rich’. It involves a nifty graph. (You know me and nifty graphs.) I actually got a better nifty graph from Brad Delong’s page in a thread called On the Richness of the Rich Once Again. But, I would have never found either nifty graph without the help of ‘Why Does Inequality Make the Rich Feel Poorer?‘ over at Paul Krugman’s blog. I’m going to discuss all of that and harken back to Robert Reich’s thing at Alternet called The Problem Is That America’s Richest 1% Are Raking It in
. You should be able to grok the theme of the parable of the poor little rich people by now.
Now what I have to do is explain why the rate of change along the slope of a curve using log income levels by percentile translates into pearl clutching in mamby pamby plutocracts. I know you hate math and it makes your stomach turn. I promise not to use the numbers. We’re going to just talk about the picture and the lines. Over on your right is Brad’s nifty graph. You can see that the curve is upward sloping but the slope varies depending on where you are on the curve.
You can see, however, it is positive at all points. This indicates a direct or positive relationship between two things. If one goes up, the other does too. Because the curve isn’t a straight line, the rate at which the curve goes up is different depending on where you are. This is reflected by the steepness or the flatness of the curve. Think of it as a hill. You have to slog up a steep hill, but a flat hill makes it easier to go forward.
One of the things of interests shown by this graph is the Log of Annual Income and the other is the percentile of tax units. The difference between Rampell’s graph and Delong’s graph is the log calculation. Brad explains why she needs to use the log of annual income compared to the level. Basically, the log turns the comparison in to a growth rate of annual income. A level is simply a level. The log means that we’re using the rate of change happening in incomes as we go up and down the curve. That rate of change is radically different at the richest levels. You can see that the slope almost goes vertical there compared to the middle levels where the curve is less steep and somewhat more horizontal. There’s a story that explains that. Krugman explains it well so I’m going to start with his explanation.
Live Blog: Tucson Memorial
Posted: January 12, 2011 Filed under: just because, Live | Tags: live blog, Tuscon Memorial 138 CommentsCNN is live streaming here.
NPR’S News Line will host live coverage of the Memorial here.
Several memorials are planned Wednesday for the victims of the shooting rampage in Tucson that killed six people and wounded 13 others, including Rep. Gabrielle Giffords.
On Wednesday evening, President Obama and first lady Michelle Obama will attend a public memorial service in Tucson entitled “Together We Thrive: Tucson and America.” The president will address the gathering and the nation in the live televised event at the University of Arizona. Preliminary details on the event are available here.
The White House said President Obama would meet privately with the victims’ families before the service
The NewsHour will have live streaming online coverage of the service in a special report starting at 8 p.m ET.
Pictured on the left is Christina Taylor Green. She is the youngest victim of the shooter. We encourage donations to the memorial fund established in her name by her family.
Here are the ways to make a donation in memory of Christina:
- Online at www.cfsoaz.org – click on the link to the Christina Taylor Green Memorial Fund.
- E-mail christinataylorgreenmemorial@cfsoaz.org
- Call (520) 545-0313.
- Send a check to: The Community Foundation for Southern Arizona, In Memory of Christina Taylor Green, 2250 E. Broadway Blvd., Tucson, AZ 85719
In a moment of sanity, members of the hate group Westboro Baptist church agreed not to picket her funeral. They will be showing up at the funerals of the adult victims including Judge Roll. Here are some interesting details.
The Steve Sanchez Radio Show on KXXT AM in Phoenix offered the group 30 minutes on his show on Saturday in exchange for not protesting at Green’s funeral. The deal was established through an e-mail exchange, which was forwarded to CNN.
Other members of congress attending include House Minority Leader Nancy Pelosi. The First Lady will be accompanying the president. There are representatives from the Judiciary. Senator John McCain is there. Former SCOTUS judge Sandra Day O’Connor is to the right of the President.
We will post updates and links here as they become available.








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