The Fort Worth Zoo’s new baby elephant is already a big hit with children who visit the zoo.
Their youthful fascination was enhanced Tuesday when zoo officials added a child’s inflatable pool to the elephants’ enclosure for Belle’s enjoyment. Belle could be seen rolling in the pool.
Still a little bit left of summer vacation left and I am sure some of you are hitting the road. It’s still hot down here in New Orleans but this weekend is Satchmo Summer Fest. Every little festival weekend is like a ready made holiday for me! I will probably go listen to some music and taste some home cooking!
There’s the usual this and that sorta stuff out there. Here is one helluva depressing take on a man that kidnapped and brutalized women for years. “Most of the sex… was consensual.” Yeah. RIGHT. Three young women held captive for 11 years and of course, they asked for it.
Ariel Castro’s words at his sentencing hearing on Thursday are almost jaw-dropping. Given a chance to speak before he was sentenced to life in prison, plus a thousand years for aggravated murder and for holding three young women captive for 11 years, he repeatedly blamed his victims.
He denied he raped and beat Michelle Knight, Amanda Berry and Gina DeJesus, claiming instead that they asked him for sex and that his sexual addiction was to blame. He even said the abuse couldn’t have been that bad because DeJesus “looks normal.” While many onlookers were astonished, abuse experts said they hear that kind of language and justification every day.
NBC News asked them to weigh in on specific comments Castro made:
“Most of the sex that went on in that house, probably all of it, was consensual,” Castro said. “These allegations about being forceful on them — that is totally wrong. Because there was times where they’d even ask me for sex –many times. And I learned that these girls were not virgins. From their testimony to me, they had multiple partners before me, all three of them.”
The denial and rationalization comes as no shock to experts on rape and abuse. In fact, they say, it’s typical that men who rape or batter women will deny they did anything wrong, and even that the victim was “asking for it”.
“I think it’s actually very typical of an abuser,” says Barbara Paradiso, who directs the center on domestic violence at the University of Colorado-Denver.
“There is a widely held belief that women enjoy rape or that it is ‘just sex at the wrong time, in the wrong place’,” Rape Crisis of England and Wales says on its website. “Often when a woman is raped she is afraid that she will be killed – rapists often use the threat of killing a woman or her children to ensure her ‘submission’ and her silence after the attack. Women do not enjoy sexual violence. Victims of murder, robbery and other crimes are never portrayed as enjoying the experience.”
“I am not a violent person. I simply kept them there without being able to leave.”
“It is not uncommon for offenders to have justified their own behavior, oftentimes to see themselves as a victim,” Paradiso said in a telephone interview. “They often have a sense of righteousness around their behavior, that they had a right to do what they did or it was acceptable to do what they did that they were forced to do what they did because of the victim.”
“I never had a record until I met my children’s mother.My son was on there the other day saying how abusive I was but I was never abusive until I met her. And he failed to say that at the end before she passed away that them two weren’t even talking.
Castro’s son Anthony has said Castro beat him and his mother, Grimilda “Nilda” Figueroa, who died in 2012.
“What he’s saying, that I was a wife beater – that is, that is wrong. This happened because I couldn’t get her to quiet down. I would continuous tell her the children are right there, would you please? She would respond, I don’t care if the children are there and she would just keep going…the situation would escalate until the point where she would put her hands on me and that’s how I reacted, by putting my hands on her.”
It’s familiar thinking to Paradiso. “‘I had to hit her because she did x, y or z’,” she says. “(They are saying) ‘I had to bring her back into line’ … It doesn’t really surprise me at all that he said what he said. That behavior is completely based on power and control and domination, which our society supports. So I am not surprised that he said that.”
While his is an extreme case, experts say the pattern is anything but rare.
“I was taken aback [by Castro’s statements] but at the same time not shocked by it,” says Jennifer Marsh, vice president of victim services for RAINN, the Rape, Abuse and Incest National Network. “It’s somebody who was not willing to accept that what they did was wrong and who may have convinced themselves that what they are doing is not wrong or justified. It read like the way that a perpetrator thinks.”
According to RAINN, someone is sexually assaulted in the United States every two minutes, and only three out of every 100 rapists ever spends any time in jail.
So this is a real interesting story about a writer that basically googled two words and got a visit from the Counter Terrorism People. Those two words are “backpack” and “pressure cooker”.
It was a confluence of magnificent proportions that led six agents from the joint terrorism task force to knock on my door Wednesday morning. Little did we know our seemingly innocent, if curious to a fault, Googling of certain things was creating a perfect storm of terrorism profiling. Because somewhere out there, someone was watching. Someone whose job it is to piece together the things people do on the internet raised the red flag when they saw our search history.
Most of it was innocent enough. I had researched pressure cookers. My husband was looking for a backpack. And maybe in another time those two things together would have seemed innocuous, but we are in “these times” now. And in these times, when things like the Boston bombing happen, you spend a lot of time on the internet reading about it and, if you are my exceedingly curious news junkie of a twenty-year-old son, you click a lot of links when you read the myriad of stories. You might just read a CNN piece about how bomb making instructions are readily available on the internet and you will in all probability, if you are that kid, click the link provided.
Which might not raise any red flags. Because who wasn’t reading those stories? Who wasn’t clicking those links? But my son’s reading habits combined with my search for a pressure cooker and my husband’s search for a backpack set off an alarm of sorts at the joint terrorism task force headquarters.
That’s how I imagine it played out, anyhow. Lots of bells and whistles and a crowd of task force workers huddled around a computer screen looking at our Google history.
This was weeks ago. I don’t know what took them so long to get here. Maybe they were waiting for some other devious Google search to show up but “what the hell do I do with quinoa” and “Is A-Rod suspended yet” didn’t fit into the equation so they just moved in based on those older searches.
I was at work when it happened. My husband called me as soon as it was over, almost laughing about it but I wasn’t joining in the laughter. His call left me shaken and anxious.
What happened was this: At about 9:00 am, my husband, who happened to be home yesterday, was sitting in the living room with our two dogs when he heard a couple of cars pull up outside. He looked out the window and saw three black SUVs in front of our house; two at the curb in front and one pulled up behind my husband’s Jeep in the driveway, as if to block him from leaving.
Six gentleman in casual clothes emerged from the vehicles and spread out as they walked toward the house, two toward the backyard on one side, two on the other side, two toward the front door.
A million things went through my husband’s head. None of which were right. He walked outside and the men greeted him by flashing badges. He could see they all had guns holstered in their waistbands.
“Are you [name redacted]?” one asked while glancing at a clipboard. He affirmed that was indeed him, and was asked if they could come in. Sure, he said.
They asked if they could search the house, though it turned out to be just a cursory search. They walked around the living room, studied the books on the shelf (nope, no bomb making books, no Anarchist Cookbook), looked at all our pictures, glanced into our bedroom, pet our dogs. They asked if they could go in my son’s bedroom but when my husband said my son was sleeping in there, they let it be.
Meanwhile, they were peppering my husband with questions. Where is he from? Where are his parents from? They asked about me, where was I, where do I work, where do my parents live. Do you have any bombs, they asked. Do you own a pressure cooker? My husband said no, but we have a rice cooker. Can you make a bomb with that? My husband said no, my wife uses it to make quinoa. What the hell is quinoa, they asked.
They searched the backyard. They walked around the garage, as much as one could walk around a garage strewn with yardworking equipment and various junk. They went back in the house and asked more questions.
New poll numbers released Thursday suggested that Senate Minority Leader Mitch McConnell (R-KY) is entering his reelection campaign next year facing two perilous obstacles: an electorate that wants him out of office and a viable Democratic challenger.
The latest survey from Democratic-leaning Public Policy Polling — conducted on behalf of the Progressive Change Campaign Committee (PCCC) and Democracy For America and provided in advance to TPM — found Kentucky Secretary of State Alison Lundergan Grimes, who launched her Senate campaign on Tuesday, drawing the support of 45 percent of Bluegrass State voters and narrowly edging McConnell by a single point. Eleven percent of voters said they are undecided. The two liberal groups to commission the poll are both opposed to McConnell.
A slight majority of Kentucky voters — 51 percent — disapprove of the job McConnell is doing, giving the GOP leader an approval rating of 40 percent. PPP has previously identified McConnell as the least popular senator in the country, but the latest poll marks a marginal improvement It marks for a marginal bump since April, when McConnell nursed a 36 percent approval rating. PPP polled 1,210 Kentucky voters on those two questions, and the margin of error is 2.8 percent.
Kentucky voters may also be experiencing McConnell fatigue, according to PPP’s latest. When the pollsters asked if McConnell deserved reelection “[a]fter 30 years in the U.S. Senate,” 54 percent said he does not, compared with just 38 percent who said he does deserve another term. The pollster asked 625 voters that question, and it has a margin of error of 3.9 percent.
Nonstop cute at the Forth Worth Zoo where I might be spending a bit of time this month relearning the joys of teenagers. Don’t ask yet … I’ll share in good time. Just promise me you won’t faint when I do. Long time relationship curmudgeon–me–is in one and I am trying to relearn the joys of monogamy coupled with the agony of distance. There are pictures but I am trying not to jinx things quite yet. So, anyway, humor and pity me until I figure out wtf I am doing. Okay?
Bell was born July 7 and is just the second Asian elephant to be born at the Fort Worth Zoo in its 104-year history.
Zoo spokeswoman Katie Giangreco says Belle weighed 330 pounds at birth is gaining two pounds per day. She says Belle “is curious and full of personality, learning new things every day, learning what her trunk is for, learning to use her legs.”
Belle’s mother, Rasha, is helping in that instruction.
Asian elephants have been listed as endangered since 1976.
I am gonna close with Krugman on an Op Ed by Brad Delong on Larry Summers. I have no idea why any one thinks Larry Summers has the temperament for the job of Fed Chair despite his credentials, but oh well. Let’s let the shrill one say it better than me.
Brad DeLong asks why the left views Larry Summers as a right-wing hyena. I think that’s a straw man, or maybe a straw hyena. What is true is that a lot of people even on the moderate left don’t trust Summers, even though much of his commentary over the years has been very much center-left — and since leaving office he has become one of our most prominent fiscal doves.
Where does this mistrust come from? Well, let me give you an example: Jackson Hole, 2005, a conference dedicated to celebrating the record of, ahem, Alan Greenspan. Raghuram Rajan had presented a paper warning that the risks of financial instability were much higher than most people were acknowledging. (I think Rajan has been wrong on many issues since then, but that was certainly a prophetic paper). And the response, in general, took the form of ridicule.
The principal discussant was Don Kohn (pdf), who was (barely) polite but completely wrong-headed, celebrating financial innovations such as “the growing ease of housing equity extraction”:
Leading off on the rest of the discussion (pdf) was Larry Summers, who wasn’t polite, dismissing Rajan for being “slightly Luddite” in questioning the value of financial innovation, which he compared (in a really bad analogy) to technological progress in transportation.
Let’s face it. Summers is an asshole. I don’t care about his degrees or whatever. Assholes should not be in places where they have to influence people into doing the right thing on policy that effects the entire globe. Even, if it is a well-educated asshole, it is still just an asshole.
That is all.
What is on your reading and blogging list today?
If you’re like me, you’ll get a big laugh out of Brad DeLong’s on-going tongue and cheek label of pretty much every economist as being a member of the “hippie caucus” simply for giving the MSM a lesson on economic theory. It’s not exactly the most complex model or theory that drives the idea that you deficit spend during a tough economy to create jobs and stimulate business. Every first year macroeconomic principles students learns that. My guess is that most of congress and the President never got that far.
So, here’s a list of Brad’s Hippie Caucus and the statements based on simple economic theory that puts them into membership. These are some big name economists basically saying what I’ve been saying for a few years now. The deficit is a long term problem. The immediate problem is business’ lack of customers. It’s an aggregate demand thing and increased government spending is the obvious policy remedy.
The first member is Laura Tyson who I’d really like to see as Treasury Secretary or head of the CEA again. She served under Bill Clinton. You remember Bill Clinton? He’s the one that had the best job creation record of any modern president.
But the overwhelming evidence suggests the opposite: when the economy has excess capacity, high unemployment and weak private demand, cuts in government spending reduce growth and eliminate jobs.
On this point, there is widespread agreement among experts. Ben Bernanke, chairman of the Federal Reserve, recently warned that sudden fiscal contraction might put the still fragile recovery at risk. The June report from the C.B.O. contains a similar warning. Even William Gross of Pimco, a vocal critic of the long-term fiscal position of the government, cautions that a move toward fiscal balance, if implemented too quickly, could “stultify economic growth.”
As Simon Johnson noted in his recent Economix post, fiscal contractions are expansionary only under special conditions. None of these apply to the United States today.
So what should policy makers do? They should pair fiscal measures aimed at job creation now with a credible plan to reduce the deficit gradually –- and pass both at once, as a package. Approving a deficit-reduction plan but deferring its starting date until the economy is near full employment will cut the odds that immediate contraction will tip the faltering economy back into recession.
Indeed, passage of such a package could bolster growth by easing investor concerns about future deficits, reducing long-term interest rates and strengthening consumer and business confidence.
The next member is Larry Summers. You remember him, he’s the one we thought the President may have actually listened to when doing his economic policy thing? Well, I’ve apologized for thinking Summers turned his back on his credentials and I’m having to eat my words again.
SUMMERS: I worry about a number of things with respect to growth. Most profoundly I worry about lack of demand in the United States. That means that factory capacity is unused, it means that buildings sit empty, it means that too many people are unemployed. And I look for measure that will serve to promote the level of demand in the United States. That’s why using this moment to repair our infrastructure is so important. That’s why I believe that the payroll tax cuts that put money in people’s pockets and increased employers incentives to hire are so important. And that’s why I believe that opening foreign markets and promoting U.S. exports which creates more demand is so important. And China is obviously an important part of that story.
So we already know that Paul Krugman is in the Hippie Caucus, but here’s an addition via Krugman. Traxis Partners Hedge Fund multimillionaire Barton Biggs is saying the same thing. Surprisingly enough, this comes from the WSJ whose editors have drunk enough Grover Norquist koolaid to be dead heads.
The U.S. and Europe are set to grow at an anemic pace for the foreseeable future unless the government can step in with an enormous fiscal stimulus, according to a veteran investor.
Speaking exclusively with The Wall Street Journal, Barton Biggs, managing partner at multibillion dollar hedge fund Traxis Partners, painted a bleak outlook for the developed world with only huge government intervention likely to improve things.
Mr. Biggs, former chief global strategist for U.S. investment banking powerhouse Morgan Stanley, demanded the U.S. government temporarily return to ideas used in the Great Depression as a way to get the country back to higher growth.
“What the U.S. really needs is a massive infrastructure program … similar to the WPA back in the 1930s,” he says.
The plan would be to employ some of the many unemployed people, jump start the economy, as well as help catch up with Asia, which is building state-of-the-art infrastructure from new mechanized port facilities to high-speed trains.
He suggested financing such building through the sale of U.S. Treasuries.
Okay, so Mark Thoma’s on the list too. No surprise there either. However, this comment is not on his blog Economist’s View, it’s at the FT.
I disagree with them that immediate austerity is needed. The long-term budget problem in the US is driven mainly by rising health costs, and we have many years to go before this begins to create big budget problems. Thus waiting, say, two years to begin reducing the deficit will not substantially change the probability of big problems down the road. But delaying austerity measures avoids placing a further drag on an already struggling economy, so the likely benefits are relatively large.
One of the arguments for austerity is that it would give the Federal Reserve “increased room for manoeuvre to adopt further quantitative easing if the economy weakens further”. I agree that the Fed fears being placed in the position of appearing to monetise the debt, but again I do not think immediate action is needed. A budget plan that both political parties can agree to, which is implimented only when the economy is stronger, would do a lot to give the Fed the confidence it needs to act.
Here’s a member of the Hippie Caucus from across the Pond. That would be no other than the FT’s Martin Wolfe. He sums it up nicely by saying “enjoy the coming slump” but if you want to read the wonky way of saying it, here it is.
Few doubt there is excessive private sector debt in a number of high-income countries. But how is it to be reduced? The BIS notes four answers: repayment; default; higher real incomes; and inflation. Let us rule out the last and focus on the first. Repayment means spending less than one’s income. That is what is happening in the US private sector (see chart). Households ran a financial deficit (an excess of spending over income) of 3.5 per cent of gross domestic product in the third quarter of 2005. This had shifted to a surplus of 3.3 per cent in the first quarter of 2011. The business sector is also running a modest surplus. Since the US has a current account deficit, the rest of the world is also, by definition, spending less than its income. Who is taking the opposite side? The answer is: the government. This is what a controlled depression means: every sector, other than the government, is seeking to strengthen its balance sheet at the same time.
Another former Obama adviser that’s in the Hippie Caucus and may join my list of people that most likely quit Obama because he wasn’t listening to any economists. That would be none other than former budget director Peter Orzag. You know I thought Christie Romer was a good one and was confused when she was supporting that weak ass stimulus. I’m now even wondering about Austin Goolsbee.
Today’s fiscal policy debate straddles two divides: one between those who support jobs and those who favor austerity, and one between those who think additional revenue is needed and those who don’t.
On the first divide, both sides are right, because the truth is that the U.S. needs both jobs and austerity — and a combination would be more powerful than either piece by itself. We face a very weak labor market now and, over the medium- and long-term, an unsustainable fiscal path. It would make sense to combine an additional round of temporary job creation measures with a substantial amount of permanent deficit reduction that would be enacted now but take effect later.
So, I’ve been blogging around here like my hair’s on fire pretty much since this financial crisis set in. I wrote the Obama stimulus was too little and too focused on tax cuts to appease the few Republicans resident in a then overwhelmingly Democratic Congress with a president with a mandate and political capital. I blogged that we didn’t need to extend the Bush tax cuts to millionaires and billionaires because they were the only ones that were recovering nicely. I blogged that the President should forget about health care reform and focus like a laser on the sour economic recovery. I also said that all that would do would give the Republicans more hot air come the negotiations for the debt ceiling increase. I’ve blogged repeatedly that businesses–no matter what the tax rates or the rate of interests–are not going to spend their money on capital or labor here in the US because they need customers first and foremost. I’ve also written extensively that all this cheap Fed money at the discount window and tax breaks for industry was likely to be used in places like Asia instead of here in the U.S. Brad DeLong has done an excellent job showing you that many, many top economists believe the same things. So, next time any one tells you that all economists are always caught off-guard, please remember all of this.
I truly believe that Republicans are trying to tank the economy and that Barack Obama is either tacitly or complicity or ignorantly going right down the garden path with them. Again, if you’ve got terminal cancer and need surgery to save your life do you call some one who has never gone to med school to operate on you? If you’re wrongly accused of murder and you need some one to argue that you’re innocent, do you want some one that’s never been to law school to represent you? Why or why do so many idiots in the press, in the congress, and in the White House think they know more about the economy and the financial markets than those of us that have spent our lives researching, studying, and doing it?
We should be rioting in the streets like the English and the Greeks. Instead,we’re acting like sheep to the slaughter. What our government is doing right now is actively working against the interests of its people. There are laws in place that require it to responsibly handle the economy and create jobs. They are doing the exact opposite of this. We need to get mad. Voting for idiots is not working.
Hopefully, by the time you read this, I’ll be off to my doctor’s office as the damned MRSA thing on my lip showed back up this weekend. I look like some one botoxed me on one side. This stuff is no fun. I think it has something to do with this endless runny nose and weepy eyes I appear to have with this year’s horrible allergies.
New York Magazine‘s Gabriel Sherman has a potboiler article up called The Elephant in the Green Room: The circus Roger Ailes created at Fox News made his network $900 million last year. But it may have lost him something more important: the next election. There’s some really, really juicy bits. Here’s just one example.
All the 2012 candidates know that Ailes is a crucial constituency. “You can’t run for the Republican nomination without talking to Roger,” one GOPer told me. “Every single candidate has consulted with Roger.” But he hasn’t found any of them, including the adults in the room—Jon Huntsman, Mitch Daniels, Mitt Romney—compelling. “He finds flaws in every one,” says a person familiar with his thinking.
“He thinks things are going in a bad direction,” another Republican close to Ailes told me. “Roger is worried about the future of the country. He thinks the election of Obama is a disaster. He thinks Palin is an idiot. He thinks she’s stupid. He helped boost her up. People like Sarah Palin haven’t elevated the conservative movement.”
In the aftermath of the Tucson rampage, the national mood seemed to pivot. Ailes recognized that a Fox brand defined by Palin could be politically vulnerable. Two days after the shooting, he gave an interview to Russell Simmons and told him both sides needed to lower the temperature. “I told all of our guys, ‘Shut up, tone it down, make your argument intellectually.’ ”
It’ll take time to wade through it and you’ll learn more about Beck’s departure even if you just don’t want to, but it’s worth it. It’s sort’ve one of those karmic car wreck articles.
Economist and blogger Brad Delong delivered the harsh news with nifty graphs in Phoenix, Arizona. He calls his speech: The Economic Outlook as of May 2011: Yes, This Is Called the Dismal Science. Why Do You Ask?
But now we have a stubbornly persistent slump in the economy. Now we have economic growth at about our normal long-run pace, with very little signs of closing the gap between the productive capacity of the American economy and its current level of production. We have a Washington DC that is dysfunctional–out of ammunition to take any effective additional steps to boost the economy. There is now substantial fear of inflation–even though there are no signs of inflation gathering anywhere rather than energy and food prices, and we understand that those reflect China’s growing demand and not any domestic price spiral. There is now substantial fear of crowding out–that boosting US government spending or cutting taxes to get more money into the hands of the consumers would discourage private investment even though there are no signs of crowding out even at our rapidly-growing level of the national debt. It is a fact that a bunch of us–including me–think that there really should be signs of crowding out right now–that financial markets should be scared of the fiscal future of America–but they are not. And there is the problem that Washington DC has degenerated into pure Dingbat Kabuki theater on lots of levels.
It is a fact that if congress simply goes home–doesn’t do anything for the next 10 years except keep the federal government on autopilot, or if it does do things if it pays for whatever increases in spending it enacts by raising taxes and pays for whatever tax cuts it enacts by cutting spending–that we do not have a long run deficit problem. If congress goes home for ten years our program spending is matched to our tax revenues, which means a declining debt burden because the growth rate of the economy is larger than the interest rate on our debt.
Our belief that we have a long-run deficit problem is based upon the belief that congress will pass laws that increase spending and that cut taxes–that it will repeal the Independent Payment Authorization Board’s authority to try to make Medicare more efficient, that it will repeal the Affordable Care Act’s tax on high-cost health plans. Given that the fear is based on a belief that some future congress will bust the budget, it is hard to see how we can address this fear through any possible piece of legislation today–for no congress can bind its successors.
This is a problem.
Wow. What a downer. I bet he doesn’t get invited to any of the kewl kids’ cocktail parties there!
Spain continues to experience political unrest. Spanish Youth are demanding “real democracy now”.
Thousands of people have taken to the streets of Spain protesting a round of austerity measures and calling for a boycott of major political parties in Sunday’s regional elections. The protests began last week with a march denouncing high levels of youth unemployment. A large crowd established a tent camp in Madrid’s Puerta del Sol Square, defying an ordinance barring protests.
Protester: “I’ll attempt to stay here tonight, because I think it is very important to retake the streets that politicians have taken away from us to do their campaigning, preventing us from protesting. That is what we feel every day with lack of resources and a huge limitation of democracy. We cannot continue to tolerate this situation.”
The NYT has an interesting bible quiz up on sex and religion. A lot of it on the so-called social issues that cause all those right wing screeds. I found this question and answer particularly interesting.
The people of Sodom were condemned principally for [what]
“Sodomy” as a term for gay male sex began to be commonly used only in the 11th century and would have surprised early religious commentators. They attributed Sodom’s problems with God to many different causes, including idolatry, threats toward strangers and general lack of compassion for the downtrodden. Ezekiel 16:49 suggests that Sodomites “had pride, excess of food, and prosperous ease, but did not aid the poor and needy.”
So, it wasn’t for being a haven for sex practices that offended puritans, it was for lack of compassion and generosity towards the poor. Some one should phone Pat Robertson STAT!
There was a horrible tornado in Joplin Missouri last night. It took out a hospital as well as many, many homes. Here’s some footage of the aftermath.
A tornado also hit Minneapolis. Both tornadoes have caused fatalities. As always, the Red Cross and other responders are in need of more funds and you can give easily via your cellphone these days. They are also responding to flood victims up and down the Mississippi. I wonder what Pat Robertson will say since all of this appears to be hitting the bible belt? Well, anyway, here’s a list of places accepting cash donations if you feel like taking up a collection. We’re supposed to get our share of the weather by Thursday. Hopefully it won’t add flash floods to the rising rivers and spillways.
Okay, well I have to go see a lady about some good drugs! What’s on your reading and blogging list today?
The Fed’s been doing some pretty nontraditional things recently under Ben Bernanke. A lot of this was not unexpected given his record of academic research on the subject of the Fed trying to be more public about its actions and the role of Quantitative Easing in Japan’s lost decade recovery. I thought I’d put a few things up about both. I’m going to have to use some monetarist jibber jabber so please ask questions if the jargon is overwhelming! It’s easier to explain the jargon downthread than write a long run on post with explanations included.
The Roosevelt Institute held a Future of the Federal Reserve Event. Here’s video via RortyBomb of Joseph Stiglitz discussing QE2 among other Fed issues. I mentioned something yesterday down thread about the effectiveness of transmission of monetary policy through the traditional interest rate channel into the real economy and Stiglitz has a fairly succinct comment on that. There is some debate on how much the Fed can actually do much at this point–with zero bound interest rates–to get at unemployment and even the inflation coming from higher oil and food prices. We know it can happen, it’s just we don’t have empirical evidence under similar situations–other than from Japan–to know the degree to which stuff can happen right now. So it could be an infinitesimally positive effect even thought it’s a positive effect.
There’s been some discussion of this on economists’ blogs since the Bernanke Presser a few days ago. Mark Thoma tweeted this critique of both him and Brad Delong on the Bernanke Presser from a monetarist’s site from blogger economist Stephen Williamson. My first masters was in Monetary Economics so I’m well-steeped in monetarist theory.
In standard form, Mark Thoma’s heartgoes out to the unemployed, as mine does. However, Mark is much more certain than I am that the Fed can actually help these people out. Here is what Mark would have asked Ben about, if he could:
The main question I wanted to hear Bernanke answer is, given that inflation is expected to remain low, why isn’t the Fed doing more to help with the employment problem? Why not a third round of quantitative easing?
In retrospect, more aggressive action by the Fed was warranted in every instance. Perhaps this time is different — I sure hope so — but the recovery has been far too slow to be tolerable. Green shoots require more than hope, they require the nourishment, and with fiscal policy out of the picture it’s up to the Fed to provide it.
Well, the answer to the question: “Why not a third round of quantitative easing?” should be: “Because it does not do anything.” (see here). In retrospect, the Fed could not have done any more than it did, even if you think that sticky wages and prices matter in a big way. Mark may think that the level of employment is intolerable, but the Fed has to tolerate it in the same way I have to tolerate the soggy weather outside.
I wanted to put this up before I linked to Krugman’s Op-Ed today which argues that Bernanke may be unduly influenced by inflationistas and Ron Paul, of all people called “The Intimidated Fed” and that he can do more. Because, I’m not so sure the FED can do much more or if it’s Ron Paul that’s the dragon needing slaying. First, I think it more like that Bernanke is being influenced by two Fed Presidents sitting on the Board of Governors right now than by Ron Paul. But, I’m not a DC or FED insider so it’s pure speculation on my part.
Some background: The Fed normally takes primary responsibility for short-term economic management, using its influence over interest rates to cool the economy when it’s running too hot, which raises the threat of inflation, and to heat it up when it’s running too cold, leading to high unemployment. And the Fed has more or less explicitly indicated what it considers a Goldilocks outcome, neither too hot nor too cold: inflation at 2 percent or a bit lower, unemployment at 5 percent or a bit higher.
But Goldilocks has left the building, and shows no sign of returning soon. The Fed’s latest forecasts, unveiled at that press conference, show low inflation and high unemployment for the foreseeable future.
True, the Fed expects inflation this year to run a bit above target, but Mr. Bernanke declared (and I agree) that we’re looking at a temporary bulge from higher raw material prices; measures of underlying inflation remain well below target, and the forecast sees inflation falling sharply next year and remaining low at least through 2013.
Meanwhile, as I’ve already pointed out, unemployment — although down from its 2009 peak — remains devastatingly high. And the Fed expects only slow improvement, with unemployment at the end of 2013 expected to still be around 7 percent.
It all adds up to a clear case for more action. Yet Mr. Bernanke indicated that he has done all he’s likely to do. Why?
Second, I’m not sure Bernanke (i.e. The FED) is in a very strong position to do much that can influence the real economy right now. The QE stuff really only shifts the FED portfolio around between long and short term debt which can influence yield curves, but, at the zero bound, there’s still a limited impact on real interest rates. You really can’t go lower than zero in nominal terms. Also, the FED’s bought all this crap from every one from Belgian cities to AIG to give them more liquidity and for the most part, that money’s not channeling back into the US economy in the forms of loans. Monetary policy is never very effective when an economy is in a liquidity trap (extremely low interest rates) and its transmission channel–the way the policy gets to the real economy where GDP lurks–morphs during various economic conditions. We’re not seeing anything resembling 20th century economic conditions.
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.