Friday Reads: Late Edition
Posted: January 15, 2016 Filed under: Economic Develpment, Economy | Tags: Air BnB hell realms, gentrification, New Orleans 33 CommentsGood Afternoon!
I’m running really late today despite coffee and all the usual things I use to face the morning. I seem to be in need of hibernation. I’m not sure if it’s the ugly political situation or just the challenges of doing any little thing these days. Have you noticed how businesses are basically set up to take your money efficiently and create hell for you under any other circumstance? Calling them is to enter a hell realm. Even when you do reach a person, there seems to be little they can do but offer sympathy and customer service surveys. Why are businesses so damned rotten these days? Is it because they are coddled while the rest of us have been basically dropped from the master plan?
I’m going to do a little sharing of local stuff juxtaposed on some national news because I’ve been noticing how difficult life is becoming for regular people. Here in New Orleans, we’re chasing tourist dollars by destroying the culture that brings them here and basically driving off the workers that do the daily stuff of dealing with them. I’m beginning to think that the entire plan of the Aspen Institute is to turn every major city into a seamless, architecturally bland, sea of guys sporting manbuns. We seem to be selling our treasure to the highest out-of-town bidder who then remakes it into something totally new Portland or new Seattle or new Brooklyn. Then, we all have to indulge boorish burbies in all the places we used to use to escape them.
Here’s a great example. This nice old home used to be the equivalent of a hostel owned by a friend of mine. It was called the Mazant Guesthouse and was heavily used by Europeans because it had no A/C, a communal kitchen, and was extremely cheap. The first thing the new owners did was try to tear down the backhouse. Thankfully, the historic commission stopped them. Now the entire property is just another reminder of the folks city government is trying to attract to all parts of the city including our personal, private backyards. Asking price? $1.65 million. You could’ve bought entire blocks here for that just a few years ago. So, you can imagine what that’s done to the rental market and what that’s doing to property tax valuations.
This revitalization includes sanitizing the city’s really awful past as an outpost of the Confederacy and Lost Cause by removing statues that used to attract more pigeon shit than attention. We tear down a very historical Woolworth’s with an intact counter that was central to the Civil Rights Movement and no one mourns that at all. We had an opportunity to put a great Civil Rights museum downtown for a real tourist experience. But no, we spend time removing rather than preserving the sites to use them to elucidate the awful past. We’d rather have a Dave and Buster’s than a National Jazz Park.
Several items came to my attention today that show the master plan is to transform us into the destination of the manbun crowd and that is having all kinds of unintended consequences. The example sits right next door to me. Two guys from NJ charge $180 a night for one side of a double that’s been redone to look like a badly decorated boutique hotel inside and barely maintains a semblance of its historical past outside. It used to be home to two families. Some NJ guy bought the family home across the street and it’s the ugliest thing you’ve ever seen now. It was an arts and crafts double but now it looks like some weird, awkward Cape Code monstrosity and it’s selling for way over $.5 million. Both homes were stripped of their historic architecture during renovation. My guess is some out of town rich people will Air BNB the arts & crafts double too which is currently illegal and against zoning laws. It used to be a rental when I moved here but was a single family dwelling until it sold. A barber who worked down in the quarter lived there. Regular folks that are renters aren’t here any more. But, don’t take my word for it. New Orleans now ranks second as the worst market for renters in the nation.
New Orleans is gaining notoriety among America’s mid-sized cities as a place where renters must devote an increasing share of their income to housing expenses.
Make Room, a campaign by nonprofit affordable housing developer Enterprise Community Partners, extracted Census data to rank the top “10 worst metro areas for cash-strapped renters.” New Orleans was No. 2.
According to Harvard’s data, 35 percent of renters in the New Orleans-Metairie-Kenner statistical area devote 50 percent or more of their income to rent and utilities, only slightly less than top-ranked Miami where the rate was 35.7 percent.
The Make Room initiative was launched in May 2015 to push for policy changes and additional resources for cities where the lack of affordable housing is acute. Angela Boyd, the campaign’s managing director, said the effort seeks, in part, to debunk misconceptions that affordable housing is an issue only for coastal cities and targets renters in need of subsidies or government assistance.
“Some people think affordable housing is for the homeless or residents of public housing, but it also takes into account moderate income (renters),” Boyd said. “These are people who are probably already your neighbors.”
I wonder how all those restaurants are going to find help when there are no more places for their employees to rent in the city at the wages they can pay? While the city is hassling over statues and renting its lampposts to hang fetus fetish propaganda, there’s very little discussion of things that are really wrong here. We may be good at attracting celebrities to film stuff and buy houses, but we’re absolutely forgetting the majority of our population in the rush to be cool for pennies on the tax dollar.
On Wednesday night, Douglas Brown allegedly jumped over the counter of a New Orleans Subway after ordering a sandwich, according to the Times-Picayune, but was foiled in his attempt to nab the cash register drawer because it was tethered into place. Instead, he grabbed a bunch of cash and ran. He was detained 25 minutes later.
It’s unclear who will represent Brown. Yesterday, the Orleans Public Defenders refused to take his case. The underfunded office, which says it represents nearly 85-percent of all defendants in the parish but has a budget just half the size of the district attorney, simply can’t handle any more.“Our workload has now reached unmanageable levels resulting in a constitutional crisis,” Chief Defender Derwyn Bunton said in a December statement, giving one month’s notice that they would start refusing some clients charged with felonies carrying long sentences. “As Chief Defender, I can no longer ethically assign cases to attorneys with excessive caseloads or those that lack the requisite experience and training to represent the most serious offenses.”
This week, Bunton’s office made good on that pledge and began refusing clients. In response, the American Civil Liberties Union and the ACLU of Louisiana last night filed a class action lawsuit in federal court against Bunton and Louisiana State Public Defender James Dixon on behalf of plaintiffs who were assigned public defenders but then placed on a waiting list.
“So long as you’re on the public defender waiting list in New Orleans, you’re helpless. Your legal defense erodes along with your constitutional rights,” said Brandon Buskey, Staff Attorney with the ACLU’s Criminal Law Reform Project, in a statement. “With every hour without an attorney, you may forever lose invaluable opportunities to prove your innocence. You also may be forced into a crippling choice between waiting months for counsel or doing bail and plea negotiations yourself. The damage to your case can be irreparable.”
Mayor Mitch Landrieu maintains that while the city has increased its funding of the office that they have “barely kept pace with state funding cuts,” the Times-Picayune reports. The defenders contend that “the additional local funding is enough to stave off mandatory furloughs, but not enough to provide representation in serious felony cases that is constitutional or ethical.” Bunton and Dixon could not be reached for comment.
The total focus on re-imagining New Orleans appears to include putting street cars everywhere and making sure no road goes unfixed endlessly as long as it is uptown. I’m not sure it includes a vision of much else. We seem to be highly focused on accommodating a certain segment of American society to the exclusion of a nearly everything else. From what I can see, we’re really not “winning” in any sense but Charlie Sheen’s or whatever it is Mayor Landrieu has in mind. He did come to us as the LT. Governor whose sole job is to fixate on tourism. Maybe that’s the issue he just can’t move beyond. I really don’t know. But, as far as I can tell, the development we’ve been getting recently is really killing exactly what we’ve been good at doing for a very long time.
Does resilience mean dumping your core competencies and the things that make you unique for the latest trendiness?
What happens when a city because a laboratory for hair brained schemes like charter schools and whatever you call this urban development trend that seems to be making us some blander version of ourselves? One of our issues has been the lack of health care for so many people. I’m hoping that the state’s move to now accept the Medicaid Expansion will help these kinds of statistics. Meanwhile, we can only look at the skeleton of Big Charity Hospital which was once the hallmark of a civilized nation.
Indeed, Place Matters for Health in Orleans Parish, a report prepared by the Joint Center for Political and Economic Studies and the Orleans Parish Place Matters Team, in conjunction with the Center on Human Needs, Virginia Commonwealth University, and the Virginia Network for Geospatial Health Research, noted that “Life expectancy in the poorest zip code in the city is 54.5 years, or 25.5-years lower than life expectancy in the zip code with the least amount of poverty in the city, where it is 80.”
I’m beginning to think the entire “sharing” economy is basic piracy. I came across this at AJ and was appalled that folks would do this on both supply and demand side of AIR BnB. I swear this corporation is just an international crime syndicate that makes money off of illegal and destructive activities.
Airbnb may be the next high-profile target of the Boycott, Divestment and Sanctions (BDS) movement, following media reports this week that the online accommodation service includes listings from settlements in the occupied Palestinian territories that are advertised as being in Israel.
Anyone staying in an Airbnb-listed settlement property “facilitates the commission of the crime of establishing settlements and therefore aids and abets the crime,” said John Dugard, professor of international law, and a former Special Rapporteur to the UN on Palestine.
“The same applies to making money from property built on illegal settlements.” Airbnb takes a commission on property rentals, and so is profiting from Israel’s colonisation of Palestine.
Hosts who list properties via the company are required to provide accurate locations. As such, stating that settlements are located in Israel – when they are in fact illegal under international law because they are built on occupied territory – is a violation of the company’s terms.
I would like to think that just because you can make money off of something doesn’t mean that you should do it, the government should allow it, or there should be legal businesses encouraging it. But then, it seems state and local governments are also doing anything to quit providing services to citizens while heavily subsidizing private businesses for whatever reason. At what point do we decide that businesses and rich people should pony up their fair share of the bill of living in a civilized country,state and city of laws, institutions and regular people?
The city of Flint, Mich., is in the midst of a water crisis several years in the making. The city opted out of Detroit’s water supply and began drawing water from the Flint River in April 2014, part of a cost-saving move. Eighteen months later, in the fall of 2015, researchers discovered that the proportion of children with above-average lead levels in their blood had doubled.
The city reconnected to Detroit’s water system in October, but the damage was done. Water from the Flint River was found to be highly corrosive to the lead pipes still used in some parts of the city. Even though Flint River water no longer flows through the city’s pipes, it’s unclear how long those pipes will continue to leach unsafe levels of lead into the tap water supply. Experts currently say the water is safe for bathing, but not drinking.
A group of Virginia Tech researchers who sampled the water in 271 Flint homes last summer found some contained lead levels high enough to meet the EPA’s definition of “toxic waste.”
Economic theory states that we should tax nuisance activities heavily to both discourage them and to collect funds for the damages they inflict on the citizens around them. (Think any kind of pollution.) Subsidies are to be given to those activities that won’t occur–even though they are highly beneficial to society–because they won’t provide profits to private businesses. (Think public transportation and education.) It’s a really basic and simply theory that’s been proven useful time and time again. There are some things we really do want to tax the hell out of because we want less of it and we want to recover the damage it creates. Many rules and regulations exist to protect current property owners and stakeholders. Here’s a brief little lesson on Pigouvian Taxes and subsidies that’s worth a watch that gives you a good idea of the costs and benefits. I’m not sure why the entire concept has gone out of style. Perhaps it’s because the Aspen Institute doesn’t find it trendy enough. Although my gut says it’s likely because lobbyists and political donors prefer to be enabled rather than held accountable.
Anyway, what I think I can say is that we’re making it difficult (e.g. taxing) for the wrong people to exist in society and we’re subsidizing the folks that are just making things worse. I believe this is why there’s such disgruntlement at working, poor, and middle class income levels.
The question now, is how do we really change this? When are we going to stop selling our society to any bidder for any sleazoid reason in the name development?
What’s on your reading and blogging list today?
Saturday Early Morning Long Reads
Posted: January 12, 2013 Filed under: Climate Change, crops, Democratic Politics, Domestic Policy, Economic Develpment, Economy, education, Environment, Environmental Protection, Farming, income inequality, legalizaton of drugs, Psychopaths in charge, public education, Republican politics, Republican Tax Fetishists, Second Amendment, the GOP, The Media SUCKS, The Right Wing | Tags: drought, hemp, No Child Left Behind 30 Comments
Good Morning
My eyes popped open at 5:30 this morning, and I could not go back to sleep. So while checking my RSS feeds I found a few articles from Alternet that you should take a look at. I will just post the link and a small part of the article to tease you…
First this look at a British documentary that spanned decades, The Brutal Truth About How Childhood Determines Your Economic Destiny
“Give me the child until he is seven,” the old Jesuit teachers say, “and I will give you the man.”
Back in 1964, filmmaker Paul Almond set out to test that theory by documenting the lives of a group of seven-year-old British children. Some were born to the manor; others grew up in charity homes. There were tykes from both the countryside and the city. Almond wanted to know if the destiny of the children had already been scripted by the circumstances of their birth — particularly those of class. His film Seven Up! has grown into a series spanning over five decades. Every seven years, like the cycle in some mythological saga, Michael Apted, the assistant on the original project, has returned to these children as they have morphed before our eyes into awkward adolescents, tentative adults, and now, the paunchy survivors of late middle-age.
As bright-eyed children, participants like Jackie Bassett, the product of a working-class neighborhood, or Andrew Brackfield, who attends a posh prep school, are already miles apart in attitude and habits. Tellingly, the children speak very differently about what they see in their future. Those from the higher ranks already know which universities they’ll attend, while Paul Kligarman, who lives at the charity home, asks plaintively, “What’s a university?”
This article is written by Lynn Parramore, and although I have disagreed with her position before…she does an excellent job on laying out the resulting class structures that conservative policies and austerity bring about…you know, the death of upward mobility.
On to another interesting long reads, this time written by Jennifer Holladay: Why Are 8 Year-Olds Reading Stories That Glorify Rape?
Last spring, my 2nd-grade daughter came home with an extra assignment—a worksheet she hadn’t completed in class for a story called “The Selkie Girl.” She brought the book home, too, and it was one I’d never seen before, a Junior Great Books anthology (Series 3, Book 1), published by the nonprofit Great Books Foundation.
As we settled in, I asked my daughter to tell me about “The Selkie Girl.” Her rendition gave me pause, so I asked her to do her other homework first. She turned to a worksheet, and I cracked the book open.
“The Selkie Girl” is essentially about a magical seal-woman who is kidnapped and raped repeatedly during her long captivity. The man who holds her hostage proclaims early on that “I am in love” and “I want her to be my wife.” When he kidnapped her, “She was crying bitterly, but she followed him.” Later, the narrative tells us, “Because he was gentle and loving, she no longer wept. When their first child was born, he saw her smile.” When her means of escape is discovered, however, she explains quite bluntly to the children she bore: “For I was brought here against my will, 20 years past.”
It’s like the modern-day reality of Jaycee Dugard (who was kidnapped at age 11 in California and held captive with her two children for 18 years), told in folklore for the consumption of young children.
It is disturbing, but as you will read in the article, it goes back to conservative policies…this time the target is in education. I guess you can imagine where the discovery of this story “The Selkie Girl” will lead Holladay as she researches the publisher of the textbook, it is no surprise. Just read it.
On to another alternet post, this time a review of sorts of the latest crap written by Ben Shapiro. Conservatives Are Always Triumphant and Also an Oppressed Minority, According to Notably Stupid New Book
Ben Shapiro makes his living harrumphing over the sins of liberalism, and his new book doesn’t disappoint.Being a doctrinaire conservative in this day and age requires you to do a lot of cognitive gymnastics. Luckily, the captain of the right’s gymnastic team is Ben Shapiro, who has been an exceptional contortionist since his YAF days, when he simultaneously boasted of his unfashionable virginity and scolded everyone else about their allegedly unconventional sex lives. Ben is married now, and presumably has engaged in heterosexual intercourse, but it hasn’t made him any happier or more relaxed, as he makes his living harrumphing over the sins of liberalism. Hey, just because it’s easy doesn’t mean someone should do it.
Though not himself large, Ben has wrangled, by virtue of being a nuance-impervious loudmouth, the position of editor-at-large at Breitbart.com. (You may recall that this position was once held by Andrew Breitbart himself, until his heart self-detonated rather than listen to him bellow for one more second.) This job entails being a sort of all-purpose complainer, a queen bee fat on the jelly of foundation grants, forever sending out drones to gather the sweet nectar of gripe. Just like that one guy on your Facebook who can’t relate to anything unless it has a Star Wars reference in it, Ben has cranked out book after book of impotent whining about how liberals are ruining everything with their education and their pornography and their crazy rock and roll and their hair. A 79-year-old man in the body of a failed attorney, his books (which I only hesitate to call unreadable because even I have better things to do than read them) attract praise from the kind of people who write books exactly like them — that is to say, endless litanies of alleged liberal treachery and evildoing.
When I read this post, it made me laugh…but the thought that more and more dudes (and dudettes) like Shapiro are getting airtime on major news channels made me cringe.
And I will end with this post: Is The American Hemp Renaissance About to Begin?
Kentucky was America’s leading hemp producer in the early 19th century. Now, two hundreds year later, after a historic election for drug policy has led to a shift for marijuana policy reform in America, Kentucky lawmakers are taking steps to revive the crop. While advocates for hemplegalization say the plant could bring a wealth of green jobs to Kentucky, deep-rooted drug stigma and conflict with federal law have made t he legislation’s passing unlikely. Nonetheless, two state bills are in the works, while a federal proposal aims to clear the way for state legalization. Lawmakers suggest the bills could at least open up the conversation about hemp, and clear misconceptions about its use.
Because hemp is increasingly imported from Canada, growing and making it in the US could save the US money and create green jobs at home. Aside from soy, no other plant has shown the potential to create so many different products — from hemp soap to paper and oil. Moreover, hemp rarely requires pesticides, can be grown in the same fields over several consecutive years, and produces biodegradable plastics and biofuels. Lightweight and dense, hemp-limeis a building material that known to be an efficient insulator leaving behind a minimal carbon footprint.
Which, in light of the current Midwestern drought that is bringing about comparisons to the great Dust Bowl, this long read about a historic plant like hemp was actually hopeful. However, like most of the articles I’ve shared today…seeing the problem and actually fixing it are two different things. I don’t know, maybe the real issue is staring us right in the face? Conservative policies don’t work, and it is painfully obvious to me that until we move away from these right-wing ideals…none of the solutions to many of our problems will ever get put into action.
Damn…now that is depressing.
Catch y’all later in the comment section, for now my eyelids are getting heavy and maybe I can get a few more hours sleep in before the kids way up.
Of Brass Tacks and Phony Crises
Posted: January 3, 2013 Filed under: Catfood Commission, Economic Develpment, Economy, Voter Ignorance, We are so F'd 27 CommentsYes, yes … the fiscal bunny slope has been somewhat solved and the press has moved on to discussing the next big self-inflicted fiscal crisis coming up in February. ( I guess we’re adopting the term “March Madness” just to make it all exciting and discussable.) We’re still in the land of economic surreality instead of theory. It worries me. The basic problem is that this country has forgotten its economic history, lessons and theory. Fiscal policy should not be based on political memes and lurching from one crisis to the next. Here’s some things to think on from economists.
Economist Nouriel Roubini points out that we’ve been let down by our political leaders who just don’t get that our basic problem is really one of development. We’ve had substantial growth in upper incomes and corporate profits, yet we’re going nowhere in all the quality of life and economy numbers. We have a tax policy that encourages folks like Romney to strip money out of functional businesses, shut them down, and move the proceeds to offshore bank accounts to avoid paying taxes that support basic features of a civilized country. How is this kind of wealth creation helping our economy? How is treating speculative gambling to tax favors instead encouraging actual business building creating a future upon which we can sustain our civilization? Why isn’t the press looking at the fiscal drag this cliff solution creates a well as the bigger issue of austerity facing us in March? Austerity has done the UK no favors and is crushing parts of the Eurozone. Why are the media and the political elite focusing on policies that look like Herbert Hoover’s revenge? Why feed the drone economy while starving granny?
President Barack Obama and his allies will argue that the deal concluded on Tuesday raises only $600bn of revenues over 10 years rather than their initial target of $1.4tn – and therefore there is further room for tax rises, at least for the wealthy. Republicans will argue that spending should now be radically cut, since this week’s deal did not address that side of the national balance sheet. (Even the 2011 debt ceiling deal reduced prospective spending by $1tn).
In the meantime, the likely fiscal adjustment in 2013 will be about 1.4 per cent of gross domestic product. (Spread between the expiry of the payroll tax cut, the increase in the tax rates of the rich, and some eventual cuts to spending.)
This translates into a 1.2 per cent of GDP drag on the economy during the year. If the economy was happily growing above trend – at say 3.5 per cent – that would not be such a big deal, as growth would still be above 2 per cent. In the past few quarters growth already averaged about 2 per cent. So the US could quite easily come perilously close to stall speed this year – or worse, if the eurozone crisis worsens.
The longer-term picture is bleaker still. The reality is that America is yet to wake up to the full extent of its fiscal nightmare. Even the typical Republican voter is not – being on average older and poorer than a Democrat voter – in favour of gutting the welfare state. Tea Party extremists are more noise than signal. That is why the plans of Mitt Romney and Paul Ryan, the Republicans’ losing presidential ticket, postponed all the tough spending cuts on Social Security and Medicare by a decade.
Neither Democrats nor Republicans recognise that maintaining a basic welfare state, which is right and necessary in our age of globalisation, rapid technological change and demographic pressure, implies higher taxes for the middle class as well as for the rich. A deal that extends unsustainable tax cuts for 98 per cent of Americans is therefore a pyrrhic victory for Mr Obama.
Yes, they continue to eye cuts in social security under the guise of tackling the deficit. Economist Dean Baker reminds us that Social Security has nothing to do with the Federal Deficit. Yet, there’s Simpson and Bowles yacking up that granny starving canard again! Let’s chain link our grandparents in the name of a lie, please!! Baker is right. Budget hysteria is a growth industry driven by lies and has nothing to do with what’s really happening in our real economy.
While the promotion of budget hysteria is one of the largest industries in Washington, the most important and widely ignored fact about the budget situation is that we have large deficits today because the collapse of the housing bubble sank the economy. This is not a debatable point.
The budget deficit was just 1.2 percent of gross domestic product in 2007. Before the collapse of the housing bubble the deficit was projected to remain low for the next decade and the debt-to-G.D.P. ratio was actually falling. This would have been the case even if the Bush tax cuts were allowed to continue.
When the bubble burst and the economy plummeted, tax collections fell. We also spent more on unemployment insurance and other benefits for unemployed workers. And we had further tax cuts and stimulus spending to try to boost the economy. The automatic and deliberate steps taken to counter the downturn fully explain the large deficits we have seen the last five years.
Record low interest rates on government bonds demonstrate that the current deficits are not a real problem. But even if they were, it is difficult to see how cutting Social Security could to be part of the solution. Under the law Social Security is not supposed to be part of the budget. It is an entirely separate program financed on its own.
This is not just a rhetorical point. We can talk about Social Security facing a financing shortfall in the future precisely because it is solely financed by its own revenue stream.
What we really need is a recovery. That will not happen with all the fiscal policies being placed on the table right now. Let’s review one simple thing. As long as you have a good currency, federal debt instruments in demand, and a vast array of taxable assets in your country, there is no such thing as a ‘bankrupt’ government or excessive debt. But, don’t take my word for it. Let’s again, look at the economic studies and look at the demand for treasury bonds and bills. Markets see no problem with debt levels in most industrialized nations because they know that with development and growth there comes decreased deficits and pay down of debt.
The sovereign bond markets in America, Japan, Britain, and the euro area’s “core” do not seem to think so. These governments can borrow cheaply for decades at a time. While it is certainly possible that the markets are wrong, policymakers should probably pay more attention to investors and less to the fear-mongers, especially since economists do not know how much government debt is too much. In fact, there is good reason to think that many countries with their own currencies could become far more indebted without risking trouble. One reason is that many private investors do not own enough sovereign bonds.
It is important to remember that there is an absence of evidence that governments with their own currencies are too indebted. Those who argue otherwise point to the work of Carmen Reinhart and Kenneth Rogoff, the celebrated authors of This Time is Different. Their paper “Growth in a Time of Debt” claimed that sovereign debt creates a burden on the rest of the economy. (They summarise their points here.) But, as Robert Shiller and Paul Krugman have pointed out, Ms Reinhart and Mr Rogoff never explain how public indebtedness restrains growth. There may be other forces at work, especially since sovereign debt ratios are usually at their highest after wars and financial crises. In countries with their own currencies, private interest rates are now so low that many investors have been grasping for yield wherever they can find it, such as in the revived CLO market. When he evaluated the evidence, my colleague concluded that “debt matters, but the precise way that it matters isn’t as clear-cut as Reinhart-Rogoff seem to indicate”.
Why would private investors want to buy more sovereign debt? A previous post on the shortage of safe financial assets mentioned how pension plans in many countries need to buy more government bonds to avoid mismatches between their assets and liabilities …
Nearly all the red states in our country may be Greece and Portugal–with the exceptions of Texas and Florida–but the blue states are overwhelmingly Germany and they continually bail out those loser states. That’s why we are not the Eurozone. However, those red states sure are trying to blow up the very arrangement that keeps them in roads, schools, and police forces. Economist Clive Crook points out how these idiots have now created a situation where governing means we lurch between crisis because none of them appear to be able to accept the lessons learned from the civil war, the Great Depression, or about 60 year of economic and finance theory.
The latest fiscal deal does little to resolve those uncertainties. The spending-cut part has merely been delayed by two months. The tax increase for couples making more than $450,000, together with other changes and estimated savings in debt interest, shaves about $700 billion from the 10-year deficit. Savings of about $2 trillion will be needed to stabilize the ratio of public debt to national income. Bringing that ratio down to a safer level requires spending cuts and tax increases worth $4 trillion — the original “grand bargain” ambition.
Instead of dealing calmly with the problem, fiscal policy has settled into a mode of perpetual phony crisis. Phony doesn’t mean harmless, however. The risk of a real fiscal crisis gradually builds. Meanwhile, the cumulative effects of simulated crisis might be almost as bad. It’s the difference between an acute illness and a chronic wasting disease — one that’s beginning to look incurable.
Don’t tell me the economy just had a lucky escape. Whatever happens next, it has been paying for the fiscal standoff for months. It’s paying for what Congress might do with the next debt ceiling, and the one after that. The “significant uncertainty” that Geithner referred to has already held back the U.S. recovery. Another temporary fiscal patch isn’t a remedy. It’s just more of the same.
The economy needs a lasting fiscal compact that commands broad, bipartisan support. I can hear the groans. Not another call for compromise. Many Democrats and almost all Republicans find the idea disgusting. On Capitol Hill, it’s no longer enough for one side to win; the other has to be seen to lose. That attitude is the growing burden the economy has to carry.
Which brings me back to journalistic, political hacks that write columns like this one at Politico. (Glen Thrush and Reid J Epstein are the guilty wielders of the keyboards of ignorance here.) They just opine that Obama has a debt problem. Gee, guys, where did you get your doctorates in economics or finance? The place is aptly called Tiger Beat on the Potomac by Charles Pierce. They are all about being groupies to their DC stars. No Republican meme is too outrageously wrong for this e-dishrag.
The staggering national debt — up about 60 percent from the $10 trillion Obama inherited when he took office in January 2009 — is the single biggest blemish on Obama’s record, even if the rapid descent into red began under President George W. Bush.
Glenn Thrush and Reid Epstein’s Politico piece on President Obama’s “debt problem” helps capture a lot of what’s wrong with the larger debate and the political establishment’s confusion about fiscal matters.
It’s the same damn problem that happens when you watch MTP and Dancing Dave and Tom Brokaw discuss anything about economics. They don’t know a damn thing. They just repeat what they’ve heard from their local lying republican friends. Here’s more from Benen.
First, when there’s a global economic crash, and the government needs to invest to rescue the economy, large deficits are good, not bad, especially when borrowing is cheap and easy. Had the president focused on reducing the $1.3 trillion deficit he inherited from Bush/Cheney, instead of job creation and economic growth, the recession would have intensified, and yet, too many reports simply accept it as a given that higher deficits are worthy of condemnation.
Second, under Obama, as the economy started to improve, the deficit started to shrink anyway. Though the political establishment usually ignores these details, the deficit is $300 billion smaller now than when the president took office — marking the fastest deficit reduction since the end of World War II.
Third, Obama keeps pushing massive debt-reduction proposals on the table, as well as all kinds of policies that shrink the deficit (health care reform, cap and trade, Dream Act), but Republicans have opposed all of them.
And then finally, there’s the simple matter of what, exactly, is driving the nation’s budget shortfall.
For Politico, the fact that the national debt is nearly 60% larger necessarily makes this a major “blemish” on the president’s record. This only makes sense, of course, if one assumes that a larger debt is a bad thing — and given the circumstances, it’s not — and that it’s Obama’s policies that are responsible for the increase.
But as we’ve discussed before, that’s simply not the case. The facts are incontrovertible: towards the end of President Clinton’s second term, debt clocks that had been established in various U.S. locations had to be shut down — the deficit had been eliminated and the clocks had never been set to run backwards. By the time Clinton left office in 2001, the nation not only had a large surplus, it was also on track to pay off the entirety of its debt — roughly $5 trillion at the time — by the end of the decade.
Then the Bush/Cheney era happened. Republicans took a massive surplus and turned it into an even more massive deficit, adding the costs of two wars, two tax cuts, Medicare expansion, and a Wall Street bailout to the national charge card.
Sen. Orrin Hatch (R-Utah) later referred to the Bush/Cheney era as a time in which Republicans decided “it was standard practice not to pay for things.” In just eight years, GOP policymakers added $5 trillion to the debt in eight years.
But then Obama was just as reckless, right? Wrong. The key takeaway here is that it’s Republican policies, not the president’s agenda, that’s driving the national debt now and into the future.
Okay, so I’ve made this an extremely long, wonky post and your eyes are probably glazing over by now. The deal is this. We have a huge number of issues facing our country and we have press and a political party that just plain lies and spreads lies on the big ones. We can’t have a discussion on climate change science, or women’s health and reproduction and rape, or economics or a number of things because very few people bring data, science, statistics, and theory to the table. They bring hype and religious and ideological dogma. We continually see Republicans and press folks like Tom Brokaw say the economic equivalent of ‘women who get raped don’t get pregnant because their bodies shut down’ . They don’t even realize they are doing it and no one calls them on it because they get all the air time they want and economists get very little.
So, we’re on the verge of starving children and the elderly based on that level of discussion. How can we possibly get to a more fact-based reality and a healthier economy and democracy with this level of ignorance?
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