Thursday Reads

Einstein reading

Good Morning!

The New York Times has added more fodder for the Republicans’ Benghazi attacks. James Risen Mark Mazzetti and Michael S. Schmidt report that: U.S.-Approved Arms for Libya Rebels Fell Into Jihadis’ Hands.

The Obama administration secretly gave its blessing to arms shipments to Libyan rebels from Qatar last year, but American officials later grew alarmed as evidence grew that Qatar was turning some of the weapons over to Islamic militants, according to United States officials and foreign diplomats.

Of course there’s no evidence that this had anything to do with the Benghazi attacks, but I’m sure that won’t stop Senators McNasty, Huckleberry Closetcase, and their new pal Senator Kelley Ayotte from pretending otherwise.

No evidence has emerged linking the weapons provided by the Qataris during the uprising against Col. Muammar el-Qaddafi to the attack that killed four Americans at the United States diplomatic compound in Benghazi, Libya, in September.

But in the months before, the Obama administration clearly was worried about the consequences of its hidden hand in helping arm Libyan militants, concerns that have not previously been reported. The weapons and money from Qatar strengthened militant groups in Libya, allowing them to become a destabilizing force since the fall of the Qaddafi government.

Also at the NYT, Jared Bernstein once again explains why politicians (and the media) in the Village need to stop obsessing on taxes and start focusing in increasing employment and, along with it, consumer demand.

WITH the budget-and-tax showdown dominating headlines, most Americans probably missed an even more ominous story: according to a report by the Congressional Budget Office, America’s underlying growth rate — that is, the best the economy could do, under optimal conditions, without driving up inflation — has slowed from just under 4 percent a year in 2000 to just under 2 percent today.

Why does this matter? For one thing, the combination of a lower underlying growth rate, which you could think of as the economy’s speed limit, and a less equitable distribution of that growth was a reason middle-income households did so badly and poverty went up in the 2000s.

During the 1990s, in contrast, stronger demand for goods and services led to much faster job growth and the last real gains experienced by middle- and lower-income households. Faster growth in those years also spun off a lot more government revenues, which interacted with slightly higher tax rates to take the budget from deficit to surplus.

Read the whole thing and fantasize what we could be doing if we had smarter leadership in DC.

Back in Republican la-la land, Joel Kotkin at Forbes claims that blue states are committing suicide by supporting raising tax rates on the rich.

With their enthusiastic backing of President Obama and the Democratic Party on Election Day, the bluest parts of America may have embraced a program utterly at odds with their economic self-interest. The almost uniform support of blue states’ congressional representatives for the administration’s campaign for tax “fairness” represents a kind of bizarre economic suicide pact.

Any move to raise taxes on the rich — defined as households making over $250,000 annually — strikes directly at the economies of these states, which depend heavily on the earnings of high-income professionals, entrepreneurs and technical workers. In fact, when you examine which states, and metropolitan areas, have the highest concentrations of such people, it turns out they are overwhelmingly located in the bluest states and regions.

Really? Then how come we did so much better under the Clinton tax rates in the ’90s? After all, that’s all that is happening–except that the first $250,000 of these poor rich people’s money will still be taxed at the Bush rates. But that’s not how Kotkin sees it.

The people whose wallets will be drained in the new war on “the rich” are high-earning, but hardly plutocratic professionals like engineers, doctors, lawyers, small business owners and the like. Once seen as the bastion of the middle class, and exemplars of upward mobility, these people are emerging as the modern day “kulaks,” the affluent peasants ruthlessly targeted by Stalin in the early 1930s.

OMB!! “Wallets…drained!” “Stalin!” Let’s all freak out!

The ironic geography of the Democratic drive can be seen most clearly by examining the distribution of the classes now targeted by the coming purge. The top 10 states with the largest percentage of “rich” households under the Obama formula include true blue bastions Washington, D.C., which has the highest concentration of big earners, Connecticut, New Jersey, Maryland, Massachusetts, New York, California and Hawaii. The only historic “swing state” in the top six is Virginia, due largely to the presence of the affluent suburbs of the capital. These same states, according to the Tax Foundation, would benefit the most from an extension of the much-lambasted Bush tax cuts.

Hey Joel, maybe it’s not all about taxes, even though that’s all that seems to matter to you. Maybe some blue state folks think the whole economy would benefit if more people got back to work, earned some money and spent it–as suggested by Jared Bernstein in yesterday’s NYT (see above).

As Zandar notes, Kotkin then goes on to show how Republicans can use the home mortgage deduction and other methods to punish the blue state richies for voting for Obama.

– Keep the tax rate on capital gains the same.

– Raise income taxes on the top income bracket for 2013, those making $398,350 and up (single filers, married joint filers, or head of household).

– Means-test, or eliminate entirely, the mortgage interest deduction (which benefits taxpayers in areas with the highest real estate values and mortgages – i.e., Hawaii, D.C., New York, California and Connecticut).

– Means-test or eliminate entirely the federal deduction of state and local taxes, which is disproportionately utilized by those in high-tax blue states: “In 2005, taxpayers in California and New York together made up 20 percent of those claiming the deduction and accounted for 30 percent of its value. Itemizers in New York, New Jersey, Connecticut, and California claimed on average over $12,000 per household.”

Talk about a sore loser! Kotkin must be really bitter about Romney’s failure to get those blue state dopes to vote for him.

Meanwhile all those Romney voters in the red states are dreaming about seceding from the union. But if they did, asks The Nation, “Who’d Pay for Their Massive Government Handouts?”

In the wake of Obama’s victory, citizens in several states submitted petitions to secede from the United States. It is something of an irony that the very states seeking secession from “big government”—like Louisiana and Alabama—have been among the top beneficiaries of that selfsame government. Put bluntly, the government would be far smaller without them, and they would seriously struggle far more without it. Indeed, were they to become independent, most would be failed states in need of a bailout. Only this time their benefactor would be not the federal government but the International Monetary Fund, of which the United States is the principal donor. Louisiana and Alabama would go the way of Greece and Spain.

Oh, the irony of it all! And here’s another irony for Republicans to chew on. From TPM: Why Insurers Are Wary Of Raising The Medicare Age

House Republican leaders want to avoid the fiscal cliff with a proposal that would gradually raise the Medicare eligibility age to 67. Democrats are broadly reluctant to cut benefits, but President Obama was willing to accept the policy last year in failed deficit reduction talks with House Speaker John Boehner, and top Democrats have left the door open to including that measure in a grand budget bargain.

It may seem counter-intuitive: why would an industry threatened by government insurance not want it to shrink?

The reason: hiking the Medicare eligibility age would throw seniors aged 65 and 66 off Medicare and into the private market, forcing insurers, who will soon be required to cover all consumers regardless of health status, to care for a sicker, more expensive crop of patients.

“The risk pool issue is important,” the insurance industry source said. “[I]f you add more older and sicker people to the pool, that’s definitely going to have any impact on premiums.”

The policy would save the federal government $113 billion over a decade, according to the Congressional Budget Office. But it achieves that by raising the cost of private insurance: the Kaiser Family Foundation projected that a Medicare age of 67 would raise costs for under-65 patients by an average of $141 in 2014. (In practice it would be phased in.)

Duh!

And even more Republican stupidity: Right wing nutcases are all bent out of shape because their favorite crazy propaganda movie didn’t get any Oscar nominations.

Gerald Molan, the director of the extremely anti-Obama movie, 2016: Obama’s America , is mad that his and Dinesh D’Souza’s film [“2016”] wasn’t on the shortlist of documentaries nominated for an Academy Award.

“The action confirms my opinion that the bias against anything from a conservative point of view is dead on arrival in Hollywood circles,” he complained to the Hollywood Reporter.

It couldn’t possibly have anything to do with the fact that the movie is based on a pack of lies and right wing conspiracy theories, could it?

To cleanse your palate of right wing and DC craziness, try watching this video from NASA that show views of the Earth from space. Here’s a still shot:

new-view-earth-at-night-usa_62009_600x450

So what are you reading and blogging about today? I’ve been a little out of the loop for the past couple of days, so I look forward to clicking on your links!


Monday Reads

Good Morning!

We’ve had some cold gloomy weather down here in New Orleans.  I hope all those bowl game tourists brought their coats. It’s made for a depressing weekend.  It seems like most of the news I’ve been finding matches the weather too.  Another presidential election year is upon us and we’re looking at the Grinch getting the Republican nomination. Soon, all poor children will be required to mine the coal so the Grinch can place them in every one’s stockings. Well, that’s the east coast poor children.  Those poor children in the middle of the country will be fattening up turkeys for the 1 percent to eat.  I’ll bet Mitch can make a $10,000 bet on which of the kids will have it worse!

First up is an interesting read from the Business Insider that once again shoots down the meme that the rich create jobs.  There are so many economic fairy tales around these days it’s hard to know which one to shoot down next. The bottom line is pretty much something we’ve talked about for some time.  If you build it and no one comes, you don’t create anything but one more bankruptcy.  It’s the consumer demand that creates economic growth.

The most important reason the theory that “rich people create the jobs” is absurd, argues Nick Hanauer, the founder of online advertising company aQuantive, which Microsoft bought for $6.4 billion, is that rich people do not create jobs, even if they found and build companies that eventually employ thousands of people.

What creates the jobs, Hanauer astutely observes, is the company’s customers.

The company’s customers create demand for the company’s products, which, in turn, creates the need for the employees to produce, sell, and service those products. If those customers go broke, the demand for the company’s products will collapse. And the jobs will disappear, regardless of what the entrepreneur does.

That’s actually some good common sense but it’s backed up by economic theory.  Supply without demand just rots in the fields and molds in the warehouse.  Which brings me to Paul Krugman who says it’s time to call this economic situation a depression.  That’s also something we’ve bandied about here.  I’d say skydancers are pretty prescient, wouldn’t you?

It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.

On that last point, I am not being alarmist. On the political as on the economic front it’s important not to fall into the “not as bad as” trap. High unemployment isn’t O.K. just because it hasn’t hit 1933 levels; ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.

Krugman takes the rest of the column outlining some of the abysmal politics and economics in Europe.  I just keep checking the calendar to see if we some how time tripped back to the 1930s and some how forget what we learned the last time out.  Looking at things from a war build-up point a view, there’s this link to “Obama Raises the Military Stakes: Confrontation on the Borders with China and Russia” from Global Research. This is how some leftwing thinkers see the latest in US outreach in Asia.

November 2011 is a moment of great historical import: Obama declared two major policy positions, both having tremendous strategic consequences affecting competing world powers.

Obama pronounced a policy of military encirclement of China based on stationing a maritime and aerial armada facing the Chinese coast – an overt policy designed to weaken and disrupt China ’s access to raw materials and commercial and financial ties in Asia . Obama’s declaration that Asia is the priority region for US military expansion, base-building and economic alliances was directed against China , challenging Beijing in its own backyard. Obama’s iron fist policy statement, addressed to the Australian Parliament, was crystal clear in defining US imperial goals.

“Our enduring interests in the region [Asia Pacific] demands our enduring presence in this region … The United States is a Pacific power and we are here to stay … As we end today’s wars [i.e. the defeats and retreats from Iraq and Afghanistan]… I have directed my national security team to make our presence and missions in the Asia Pacific a top priority … As a result, reduction in US defense spending will not … come at the expense of the Asia Pacific” (CNN.com, Nov. 16, 2011).

The precise nature of what Obama called our “presence and mission” was underlined by the new military agreement with Australia to dispatch warships, warplanes and 2500 marines to the northern most city of Australia ( Darwin ) directed at China . Secretary of State Clinton has spent the better part of 2011 making highly provocative overtures to Asian countries that have maritime border conflicts with China . Clinton has forcibly injected the US into these disputes, encouraging and exacerbating the demands of Vietnam , Philippines , and Brunei in the South China Sea . Even more seriously, Washington is bolstering its military ties and sales with Japan , Taiwan , Singapore and South Korea , as well as increasing the presence of battleships, nuclear submarines and over flights of war planes along China ’s coastal waters. In line with the policy of military encirclement and provocation, the Obama-Clinton regime is promoting Asian multi-lateral trade agreements that exclude China and privilege US multi-national corporations, bankers and exporters, dubbed the “Trans-Pacific Partnership”. It currently includes mostly smaller countries, but Obama has hopes of enticing Japan and Canada to join …

Obama’s presence at the APEC meeting of East Asian leader and his visit to Indonesia in November 2011 all revolve around efforts to secure US hegemony. Obama-Clinton hope to counter the relative decline of US economic links in the face of the geometrical growth of trade and investment ties between East Asia and China .

Pakistan is threatening to shoot down all US drones. Tis the season to be jolly!!!

According to the new Pakistani defense policy, “Any object entering into our air space, including U.S. drones, will be treated as hostile and be shot down,” a senior Pakistani military official told NBC News.

The policy change comes just weeks after a deadly NATO attack on Pakistani military checkpoints accidentally killed 24 Pakistani soldiers, prompting Pakistani officials to order all U.S. personnel out of a remote airfield in Pakistan

I wonder if people in North Dakota have the same option?  Here’s the Daily Mail headline on your Daily Moment of Orwell: Local cops using Predator drones to spy on Americans in their own backyards.

One of the only confirmed uses of predator drones by local law enforcement came in June when a sheriff near Grand Forks, North Dakota, went looking for six stolen cattle.

When he arrived at the farm of Rodney Brossart, he was threatened by three men with guns and forced to retreat.

The Brossarts were known for being armed, anti-government separatists. So Sheriff Kelly Janke, who patrols a county of just 3,000 people, called in a Predator drone to look out over the 3,000-acre farm where the family was armed with rifles and shotguns.

With the help of a drone, summoned from nearby Grand Forks Air Force Base where it was patrolling the US-Candida border, the sheriff was able to watch the movements of everyone on the farm from a handheld device that picked up the aircraft’s video footage.

He and his deputies waited until they could see the Brossarts put down their weapons. Then they stormed the compound and arrested Rodney Brossart, his daughter and his three sons on a total of 11 felony charges. No shots were fired.

And he recovered the cattle, valued at $6,000.

The sheriff says that might not have been possible without the intelligence from the Predators.

‘We don’t have to go in guns blazing. We can take our time and methodically plan out what our approach should be,’ Sheriff Janke told the Times.

All of the surveillance occurred without a search warrant because the Supreme Court has long ruled that anything visible from the air, even if it’s on private property, can be subject to police spying.

Back to the Grinch that’s stealing Willard’s inevitability.

The NBC News-Marist polls showed Gingrich leading Romney in South Carolina by 42 percent to 23 percent. An October poll by the same organizations showed Gingrich at 7 percent in the Palmetto State. In Florida, Gingrich leads Romney 44 percent to 29 percent. There Gingrich has gained 38 percentage points since October.

The rapid movement highlights the remarkable rise of Gingrich as the caucuses and primaries near. Republican voters have shifted allegiances repeatedly this year and a number of state polls have shown that they are not firmly locked in behind any candidate at this point.

In New Hampshire on Sunday, Romney picked up the endorsement of Manchester Mayor Ted Gastas. But he was the target of a scathing editorial in the Union Leader, which earlier endorsed Gingrich. The headline read “Romney’s desperate hours.”

January’s coming and sooner or later, some of these folks are going to run out of money.  There seems to be quite a few irrelevant candidates in the race right now.  Maybe super Jeb is waiting in the wings? So here’s a good way we now MIttens is tres desperate.  Here’s the TPM headline: Romney Presses Ann Coulter Into Surrogate Duty.

Turn on the radio here and you’re going to get a taste of how hard Mitt Romney is working to stamp out Newt Gingrich’s support with conservatives.

In a new radio ad launched by the Romney campaign in Iowa last week, Romney turns to conservative fire-breather Ann Coulter to make the case that he’s the most electable candidate in the Republican race. Having made a living off saying things that no politician would likely wish to be closely associated with, it’s an interesting choice — and a sign that Romney is going all out to cast himself as the more pure conservative choice to Gingrich.

Coulter endorsed Romney a month ago (after dissing him before that) and the Romney ad grabs a clip of her talking up her candidate on Fox and Friends in November.

Here’s a ghost of nightmares past.  Noriega has been extradited to Panama for trial. The link goes to a BBC TV report.

The former leader of Panama, General Manuel Noriega, has returned to his home country 22 years after being forcibly removed from power by the US.

The 77-year-old was extradited from France, where he had been in prison on money laundering charges.

He is likely to spend the rest of his life in jail after being convicted in absentia for murder, corruption and embezzlement while he was in power.

OOOH, baby it’s cold outside.


What’s on your reading and blogging list today?


Breaking … WSJ Discovers Lack of Demand is behind Weak U.S. Economy

Via Andrew Leonard at Salon, the Wall Street Journal today reported the results of a survey they conducted with 53 economists:

In the survey, conducted July 8-13 and released Monday, 53 economists—not all of whom answer every question—were asked the main reason employers aren’t hiring more readily. Of the 51 who responded to the question, 31 cited lack of demand (65%) and 14 (27%) cited uncertainty about government policy. The others said hiring overseas was more appealing.

Only the conservative WSJ, the President, and Congresss could be surprised by these results. I’m not sure who these 53 economists were, but I think they must have been rather conservative, because the survey found that most did not think the government should do anything more to stimulate the economy.

Despite their forecasts for slow growth and an elevated unemployment rate, the economists aren’t in favor of further action either by the Fed or the federal government. Forty-one economists in the WSJ survey said the central bank shouldn’t pursue another round of bond-buying aimed at reducing interest rates, and thirty-eight said another round of fiscal stimulus shouldn’t be a part of any deficit-reduction package.

Economists added that they hope that as conditions begin to improve, albeit slowly, consumers will become more optimistic. “For whatever reasons, in addition to discrete headwinds, I think we’ve taken a hit to animal spirits and as those headwinds fade sentiment will revive,” said Stephen Stanley of Pierpont Securities. “Optimism can be self-sustaining, but pessimism can also provide a persistent drag.”

If any of the economists the WSJ talked to mentioned the possibility that the government itself could create jobs and thus stimulate demand–as FDR did the last time things were this bad, the WSJ did not report it.

Andrew Leonard crows:

what could be more obvious, even in the absence of rigorous training in economics? In the absence of demand, businesses will refrain from ramping up production and adding staff — no matter what employers think about the future regulatory climate. To prime this pump, to rev up this engine, to get the “delicate machine” working properly, the first focus for economic policymakers should be figuring out ways to boost demand.

Wouldn’t the best way to do that be to create jobs? Even Andrew Leonard doesn’t mention that. It seems ass-backwards to me to talk about getting consumers to spend more in order to get companies to start hiring. How can consumers spend more when many of them are unemployed? Maybe Dakinikat can explain this to me.

Anyway, it’s pretty amazing that the WSJ is admitting we have a demand problem. Now if only they could convince President Obama…