I’ve not been in a very good mood the last few days. I’m trying to get my manuscript camera ready and have found that the adjustments to the font size and smaller margins have just about done me in. It’s really messed up the pagination and my seemingly endless tables of statistics. I am about ready to chew off all my nails and pull out quit a bit of hair. It’s very nerve wracking.
Here’s a few links to get you start this morning. I’ve been trying to read some interesting things in the hopes of finding some inner calm.
The best news of the weekend came when Larry Summers withdrew his name from consideration for FED chair. The last thing we needed was yet another financial market sycophant in position that matters as much as that one. The Fed has been one of the few functional institutions and thankfully, it looks like even congress respected the need for its independence.
The decision marks a disappointing turn of events for the renowned economist, who had operated at the highest levels of academia and government. But he has been dogged by controversies. Summers has come under fire for his support for deregulating parts of the banking sector while he was Treasury secretary under President Bill Clinton. While president of Harvard University in 2005, he also sparked controversy for his comments on women’s aptitude in math and science.
People close to the White House said Summers faced not only a rebellion among liberal Democrats but also other challenges, including a debate over whether to launch a military strike against Syria that stretched out the Fed process and gave more time for opposition to build.
Summers was a top initial candidate for the Fed job among senior current and former White House officials. Obama was also inclined to appoint Summers to the post, people close to the White House said. But the longer time dragged on without a nomination, the more liberal groups and some Democratic senators were able to organize to oppose Summers, who many on the left viewed as too close to Wall Street and not strong enough on financial regulation.
Opposition to Summers among Senate Democrats has been obvious for weeks but it escalated on Friday when Sen. Jon Tester (D-Mont.) announced he would vote against Obama’s former economic adviser if he was nominated.
At least three other Democrats on the Senate Banking Committee were expected to oppose Summers — Sherrod Brown (D-Ohio), Jeff Merkley (D-Ore.) and Elizabeth Warren (D-Mass.) – raising the politically uncomfortably scenario of Obama needing to rely on Republican votes just to get his choice for a Fed chief out of committee.
Obama has said the other candidates for the job are Fed Vice Chair Janet Yellen and former Fed Vice Chair Donald Kohn. But Summers was said to be the president’s first choice and it’s unclear if he will fall back on one of these two candidates or look elsewhere.
There are some interesting studies on obesity and the way different people process food. I found this article while reading my copy of The Economist. Links to the studies are provided in the article. A lot of the differences may have to do with bacteria found in your digestive tract.
Even more intriguing is the notion that the same diet may be treated differently by different people. Four recent papers explored this theme. In one, published in Science in July, Joseph Majzoub, also of Boston Children’s Hospital, deleted in mice a gene called Mrap2. Dr Majzoub and his colleagues showed that this helps to control appetite. Surprisingly, however, even when the mutant critters ate the same as normal mice, they still gained more weight. Why that is remains unclear, but it may be through Mrap2’s effect on another gene, called Mc4r, which is known to be involved in weight gain.
The second and third papers, published as a pair in Nature in August, looked at another way that different bodies metabolise the same diet. Both studies were overseen by Dusko Ehrlich of the National Institute of Agricultural Research in France. One examined bacteria in nearly 300 Danish participants and found those with more diverse microbiota in their gut showed fewer signs of metabolic syndrome, including obesity and insulin resistance. The other study put 49 overweight participants on a high-fibre diet. Those who began with fewer bacterial species saw an increase in bacterial diversity and an improvement in metabolic indicators. This was not the case for those who already had a diverse microbiome, even when fed the same diet.
Jeffrey Gordon, of Washington University in St Louis, says these two studies point to the importance of what he calls “job vacancies” in the microbiota of the obese. Fed the proper diet, a person with more vacancies may see the jobs filled by helpful bacteria. In the fourth paper, by Dr Gordon and recently published in Science, he explores this in mice. To control for the effects of genetics, Dr Gordon found four pairs of human twins, with one twin obese and the other lean. He collected their stool, then transferred the twins’ bacteria to sets of mice. Fed an identical diet, the mice with bacteria from an obese twin became obese, whereas mice with bacteria from a thin twin remained lean.
Archaeologist Nicolaus Seefield found the gravesite in an “artificial cave,” which he explains to LiveScience had likely functioned as a water reservoir before the burial “since the cave’s floor was perfectly clean.”
The skeletons found there were not “in their original anatomical articulation,” he says. “The observed hatchet marks on the cervical vertebra are a clear indication of decapitation”; most had their lower jaw detached, and the “spatial pattern” of the bones is consistent with dismemberment.
The archaeologists believe the dead were either prisoners of war or Uxul nobles; they hope upcoming isotope analysis will reveal whether they were from Uxul — which is near what is now the Guatemala border — or elsewhere. Neat fact from LiveScience: “Uxul” means “at the end.”
It wasn’t the only Mayan discovery of the summer: A “lost” Maya city was discovered in June.
There are many things that depress me about how eager Republicans are to punish poor people for whatever their perverse reasons. What really gets me is how they continue to ensure that poor children will have no chance. Early childhood education has usually be the one program that every one agrees on because it’s efficacy is amazing. The sequestration has led to a large number of children being tossed out of Head Start. I find this beyond troubling. Early childhood education has been shown to be one very effective way to fight inequality. Here’s yet another article on how this country has started to do things all wrong.
In many ways, we do education backwards in this country. We skimp and shortchange the poor children who need education the most, while at the same we lavish public moneys on those who need it least. Take, for instance,this article about the outrageous practice of taxpayer subsidies for the legacy admits of rich alumni of elite colleges.
In this context, advocacy for educational programs that alleviate, rather than exacerbate, inequality is particularly welcome. That’s why I especially appreciated today’s New York Times’ Opinionator blog, in which economist James Heckman writes a great op-ed about the dramatic impact of early childhood education in the lives of poor children. Heckman, as you may know, is a Nobel Prize winning economist from the University of Chicago. He’s a typical University of Chicago economist in that yes, he’s a free market true believer type. But he’s been studying pre-K programs for poor kids for years, and he supports them for conservative reasons: because they are economically rational. Early childhood education for at-risk kids is one of those (relatively) rare government programs that the free market types like because it produces not just equity, but also efficiency.
Here’s an interesting piece on the connections between the Koch Brothers and the Tea Party. It seems the Kochs just have their nasty little fingers in every thing that is unraveling our democracy.
Politico.com, the Washington insider website, has the money-in-politics scoop of the year: It has unmasked a previously unknown political money laundering operation, set up by the energy billionaires and libertarian Koch brothers, that raised $256 million and secretly spent almost all of it last year against Democrats.
The “Koch brothers’ secret bank,” which is what the website calls the Virginia-based group, whose formal name is Freedom Partners, is the glue that has been holding together the right-wing pantheon of pro-corporate, anti-regulatory, anti-Obama, anti-labor front groups that are against everything from healthcare reform to labor unions to financial market reform to progressive taxation.
“The group has about 200 donors, each paying at least $100,000 in annual dues,” Politico reported, saying Freedom Partners would soon be filing papers with the IRS disclosing its existence. “It raised $256 million in the year after its creation in November 2011, the [IRS] document shows. And it made grants of $236 million—meaning a totally unknown group was the largest sugar daddy for conservative groups in the last election, second in total spending only to Karl Rove’s American Crossroads and Crossroads GPS, which together spent about $300 million.”
The fact that secretive right-wingers could amass and spend a quarter-billion dollars in a presidential election cycle and go undetected under federal campaign finance law is an astounding indictment of the American electoral system, revealing that all the laws intending to inform the public about who is slinging political mud are meaningless. The mockery goes even further when considering the section of the federal tax code the group is operating under: 501(c)6. That designation is for trade associations, which lets the group conceal its donors.
Trade asociations, like trade unions, were created to represent single industries or crafts. Freedom Partners’ “trade” is the business of political assassination. What follows is Politico’s list of the groups, causes and amounts received from the Kochs’ cartel. The group’s members are drawn from the energy barons’ semiannual political conferences, which feature speeches by Congress’ Republican leadership.
So, that’s a little this and that from me this morning. What’s on your reading and blogging list today?
Before becoming speaker in 2011, Boehner said, he’d watched leaders of both parties delay a long-term solution to a baby-boom-fueled benefit crisis.
“I made up my mind that we weren’t going to kick the can down the road any more,” Boehner, R-Ohio, told a Boise lunch crowd at a fundraiser for Idaho’s 2nd District Congressman Mike Simpson. “We’re not going to inflict all of this pain and suffering on our kids and our grandkids.”
The government will reach its $16.7 trillion borrowing limit this fall. Boehner rejected calls from some quarters to let the government shut down rather than agree to a compromise with President Obama and the Democratic Senate.
“There is no reason for the government to run out of money,” Boehner said. “Our goal here is to stop Obamacare. Our goal here is to cut spending.”
Boehner said GOP control of the House has forced Democrats to agree to three straight years of lower discretionary spending, which accounts for about one-third of the federal budget, savings that will reach $2.5 trillion over 10 years.
“Now, it’s time to deal with the mandatory side,” Boehner said, winning applause from a crowd of 430 at the Boise Centre on The Grove. “I’ve made it clear that we’re not going to increase the debt limit without cuts and reforms that are greater than the increase in the debt limit.
“The president doesn’t think this is fair, thinks I’m being difficult to deal with. But I’ll say this: It may be unfair but what I’m trying to do here is to leverage the political process to produce more change than what it would produce if left to its own devices. We’re going to have a whale of a fight.”
Recalling the 2011 battle over raising the federal debt ceiling, Boehner recalled negotiations that spooked financial markets, prompted Standard & Poor’s to downgrade the U.S. credit rating and angered ordinary Americans. He warned the audience to expect more of the same.
But there’s always money for war.
The U.S. could hit Syria with three days of missile strikes, perhaps beginning Thursday, in an attack meant more to send a message to Syrian President Bashar al-Assad than to topple him or cripple his military, senior U.S. officials told NBC News on Tuesday.
The State Department fed the growing drumbeat around the world for a military response to Syria’s suspected use of chemical weapons against rebels Aug. 21 near Damascus, saying that while the U.S. intelligence community would release a formal assessment within the week, it was already “crystal clear” that Assad’s government was responsible.
Vice President Joe Biden went even further, bluntly telling an American Legion audience in Houston: “Chemical weapons have been used.”
“No one doubts that innocent men, women and children have been the victims of chemical weapons attacks in Syria, and there’s no doubt who’s responsible for this heinous use of chemical weapons in Syria: the Syrian regime,” Biden said.
Fox Expert says that since women have breasts they should pay more for health care. Where do they get these guys?
A Fox News medical expert on Tuesday argued that President Barack Obama’s administration was wrong to force gender equality for health insurance rates because men “only have the prostate,” while women “have the breasts, they have the ovaries.”
“Look, it’s not bias, I’m not saying this as a man,” Fox News Medical A-Team contributor Dr. David Samadi told the hosts of Fox & Friends. “They go through a lot of preventive screenings, they give birth, they have the whole mammogram, the Pap smear. Guys, we don’t like to go to doctors, right? Seventy percent of health care decisions are made by women. In my own practice, I see it’s the women who bring the guys, who say, go get screened.”
“Yeah, but shouldn’t that earn us a discount?” Fox News host Gretchen Carlson interrupted. “Basic fact that we are responsible for getting our men to come to the doctor? And what about the fact that women, because they do all this preventative care, maybe their health issues end up costing less than men’s, who don’t go to the doctor until it’s a crisis and a big deal.”
“Yes, that’s a good point, except that, you know, women live longer,” Samadi asserted. “Women live until age 81 and men live only until 76. So, we’re using the health care system much less.”
“In this case, it’s not equal,” co-host Brian Kilmeade agreed. “You have a better time on Earth than we do, you’re here a lot more. You have six years of heaven, where you just have no men around.”
Carlson pointed out that women were blamed for maternity costs, “but men and women have babies together.”
“I agree with you that it’s a shared responsibility,” Samadi said. “But just the way the system are — in my field, we only have the prostate. Women have the breasts, they have the ovaries, they have the uterus. They get checked in every part.”
OH, Please say this isn’t so!!! Oh the Humanity!! Obama source predicts Summers will be named Fed chief soon. Looter Larry as Fed Chair!!!
A source from Team Obama told CNBC that Larry Summers will likely be named chairman of the Federal Reserve in a few weeks though he is “still being vetted” so it might take a little longer.
It’s largely come down to a two-horse race between Summers, a former Treasury secretary, and Fed Vice Chairman Janet Yellen for the next Fed chief.
It is widely expected that the current Fed Chairman Ben Bernanke will resign by the end of the year as his term ends in January. President Obama has already said that Bernanke has “already stayed a lot longer” in the role than he expected. Those remarks came in an interview with Charlie Rose on PBS in June.
Here’s a little bit of this and that to get your political juices flowing for the week.
The NYT profiles potential FED chair candidate La La Summers as some one that has many flaws but much power and personal wealth. He has the credentials and the connections but does he really have the gravitas for the job?
Mr. Summers’s wealth comes mainly from two periods of private sector work between government postings. After a lengthy tenure at the Treasury Department in the 1990s, he became the president of Harvard — a job that Robert E. Rubin, who preceded Mr. Summers as Treasury secretary, helped him obtain.
But in 2006, Mr. Summers was forced out of the university presidency for a variety of reasons, including remarks he made questioning why few women engage in advanced scientific and mathematical work. Soon after, a young Harvard alum brought him into the hedge fund world with a part-time posting at D. E. Shaw. That firm, one of the largest in the industry, paid Mr. Summers more than $5 million.
Mr. Summers’s wealth soared from around $400,000 in the mid-1990s to between $7 million and $31 million in 2009, when he joined the Obama administration, according to a financial disclosure he filed at the time. Before returning to government service, he earned $2.7 million from speeches in one year alone.
As for his current work, representatives for Citigroup, Nasdaq and D. E. Shaw declined to disclose his pay. His speaking rates today run into the six figures, according to an associate who spoke on the condition of anonymity, and Mr. Summers has spoken to Wall Street companies like Goldman Sachs, JPMorgan Chase and Citigroup.
The job that is likely to generate the most scrutiny for Mr. Summers is his work with Citigroup, which was rescued from the brink of bankruptcy by the federal government’s bailout. Though he does not have an office there, two people with direct knowledge of the matter said he was a regular consultant. In a statement, Citigroup said he provided “insight on a broad range of topics including the global and domestic economy” to prestigious clients, and attended internal meetings.
Citigroup hired Mr. Summers in part to advise Vikram S. Pandit, who resigned as chief executive last year. With his work there, Mr. Summers followed in the footsteps of his friend, Mr. Rubin, who joined Citigroup after he left the government and earned more than $100 million.
Another political analyst–this one writing for Bloomberg–thinks that the Republicans are inching towards civil war and that the next election may look like 1964. The focus has been on the Paul-Christie rift.
As Republicans continue to sort through their future, having lost the popular vote for president in five of the last six elections, they are having intramural battles with echoes of 1964, when Barry Goldwater won the nomination at a convention rife with division over the role of the U.S. in the world and civil rights at home. Derided as an extremist, he went on to lose to President Lyndon Johnson in a landslide.
Now, Republicans are squabbling over the National Security Agency surveillance program, immigration and gay marriage. The Christie-Paul rift last week highlighted the divide, with the governor calling the senator’s criticism of the NSA program “dangerous” and the Kentuckian responding that his critic must have forgotten the Bill of Rights.
“It’s always healthy to have discussions from different wings of the party as the party works on its identity going into the midterms,” said LaTourette, who chose not to seek re-election to Congress in 2012 citing the extreme positions among some of his Republican colleagues. “It wouldn’t be so healthy if this was next year or 2015 and the focus is on who the presidential nominee will be.
Martin Luther King III has a written a book on what it meant to grow up the footsteps of his father. Even better, you can get it to read with your child or grandchildren because it is written for children!! You can read about or listen to an NPR interview with King here.
Martin Luther King III recounts this and other stories from his childhood in his new children’s book, My Daddy, Dr. Martin Luther King, Jr. Martin Luther King III had been thinking about writing about his child’s-eye view of his father for almost a decade, but the 50th anniversary of the March on Washington became a personal deadline. The book, written for young children, has just been published, three weeks ahead of the anniversary.
Now Martin Luther King III and his wife, Andrea, have a 5-year-old daughter, Yolanda Renée. She was named for Martin Luther King III’s oldest sister, who died suddenly in 2006. In the book, young Martin Luther King III tells readers about the games he played with his father.
Martin Luther King III also retells stories of accompanying his father on marches from time to time. On one, they were confronted by a police officer “with a huge dog that growled at me. I was terrified.” That is, he was scared until his dad took his hand and told him they would be fine.
“I felt safe. My dad was not a tall man, but he always made me feel like he was a giant. I was never afraid when I was with him,” Martin Luther King III writes.
Long after his father’s death, Martin Luther King III has had to deal with others’ expectations that he would take up the cause. King is deeply grateful that decades ago, his mother relieved him of some of that pressure.
“You don’t have to be your father,” Coretta Scott King told him. “Just be your best self, whatever that is. We are going to support you.”
This has to be the worst use of tax dollars that I’ve seen in years. A report shows State-Funded Crisis Pregnancy Centers Talk Women Out Of Birth Control and Condoms. Is this really the way to prevent unwanted pregnancies and abortions?
When a woman walked into a state-funded “crisis pregnancy center” in Manassas, Va., this summer and told the counselor she might be pregnant, she was told that condoms don’t actually prevent STDs and that birth control frequently causes hair loss, memory loss, headaches, weight gain, fatal blood clots and breast cancer.
“The first three ingredients in the birth control pill are carcinogens,” the CPC counselor said, adding that she always tries to talk women out of taking it.
The counselor also told the woman that condoms are not effective at preventing pregnancy or sexually transmitted diseases because they are “naturally porous.”
“Safe sex is a joke,” she said. “There’s no such thing.”
NARAL Pro-Choice Virginia recorded the exchange, released Wednesday, as part of its undercover investigation into the 58 state-funded “crisis pregnancy centers” in Virginia. The organizations are part of a national network of about 2,500 Christian centers that advertise health and pregnancy services, but do not offer abortions, contraception or prenatal care. Instead, they are intended to talk women out of having abortions and to advocate abstinence until marriage.
These organizations receive state money through the sale of “Choose Life” license plates at the Virginia Department of Motor Vehicles. Ken Cuccinelli, Virginia’s Republican gubernatorial candidate, sponsored the legislation that established that fundraising system during his time in the state senate.
NARAL sent undercover women into several crisis pregnancy centers throughout Virginia and recorded their interactions. The investigation revealed that 71 percent of the CPCs in Virginia give out medically inaccurate information about the health consequences and effectiveness of birth control, condoms and abortion.
According to the report, in addition to criticizing the use of birth control and condoms, 40 of the CPCs told women that abortion causes long-term psychological damage and leads women to develop eating disorders and drug addictions. One counselor allegedly told NARAL’s undercover investigator that if she was a certain blood type, the abortion could cause her body to create antibodies that would attack her fetus the next time she tried to get pregnant.
Paul W. Tibbets, pilot of the plane, the “Enola Gay” (named for his mother), which dropped the atomic bomb over Hiroshima on August 6, 1945. died at 92 in 2007, defending the bombing to the end of his life. Some of the obits noted that he had requested no funeral or headstone for his grave, not wishing to create an opportunity for protestors to gather.
I had a chance to interview Tibbets nearly 30 years ago, and wrote about it for several newspapers and magazines and in the book I wrote with Robert Jay Lifton, Hiroshima in America.
The hook for the interview was this: While spending a month in Japan on a grant in 1984, I met a man named Akihiro Takahashi. He was one of the many child victims of the atomic attack, but unlike most of them, he survived (though with horrific burns and other injuries), and grew up to become a director of the memorial museum in Hiroshima. The August 6 bombing led to the deaths of at least 75,000 people in a flash and at least that many more in the days and years that followed. At least 90% of them were civilians, mainly women and children.
Takahashi showed me personal letters to and from Tibbets, which had led to a remarkable meeting between the two elderly men in Washington, D.C. At that recent meeting, Takahashi expressed forgiveness, admitted Japan?s aggression and cruelty in the war, and then pressed Tibbets to acknowledge that the indiscriminate bombing of civilians was always wrong.
But the pilot (who had not met one of the Japanese survivors previously) was non-committal in his response, while volunteering that wars were a very bad idea in the nuclear age. Takahashi swore he saw a tear in the corner of one of Tibbets’ eyes.
So, on May 6, 1985, I called Tibbets at his office at Executive Jet Aviation in Columbus, Ohio, and in surprisingly short order, he got on the horn. He confirmed the meeting with Takahashi (he agreed to do that only out of “courtesy”) and most of the details, but scoffed at the notion of shedding any tears over the bombing. That was, in fact, “bullshit.”
“I’ve got a standard answer on that,” he informed me, referring to guilt. “I felt nothing about i.” .I’m sorry for Takahashi and the others who got burned up down there, but I felt sorry for those who died at Pearl Harbor, too….People get mad when I say this but — it was as impersonal as could be. There wasn’t anything personal as far as I?m concerned, so I had no personal part in it.
“It wasn’t my decision to make morally, one way or another. I did what I was told — I didn’t invent the bomb, I just dropped the damn thing. It was a success, and that’s where I?ve left it. I can assure you that I sleep just as peacefully as anybody can sleep.” When August 6 rolled around each year “sometimes people have to tell me. To me it’s just another day.”
So, we have a few Texas Sky Dancers here. This Guardian article on Texas being all Oil and no Water is kind’ve frightening.
Beverly McGuire saw the warning signs before the town well went dry: sand in the toilet bowl, the sputter of air in the tap, a pump working overtime to no effect. But it still did not prepare her for the night last month when she turned on the tap and discovered the tiny town where she had made her home for 35 years was out of water.
“The day that we ran out of water I turned on my faucet and nothing was there and at that moment I knew the whole of Barnhart was down the tubes,” she said, blinking back tears. “I went: ‘dear God help us. That was the first thought that came to mind.”
Across the south-west, residents of small communities like Barnhart are confronting the reality that something as basic as running water, as unthinking as turning on a tap, can no longer be taken for granted.
Three years of drought, decades of overuse and now the oil industry’s outsize demands on water for fracking are running down reservoirs and underground aquifers. And climate change is making things worse.
Nearly 15 million people are living under some form of water rationing, barred from freely sprinkling their lawns or refilling their swimming pools. In Barnhart’s case, the well appears to have run dry because the water was being extracted for shale gas fracking.
The town — a gas station, a community hall and a taco truck – sits in the midst of the great Texan oil rush, on the eastern edge of the Permian basin.
A few years ago, it seemed like a place on the way out. Now McGuire said she can see nine oil wells from her back porch, and there are dozens of RVs parked outside town, full of oil workers.
But soon after the first frack trucks pulled up two years ago, the well on McGuire’s property ran dry.
No-one in Barnhart paid much attention at the time, and McGuire hooked up to the town’s central water supply. “Everyone just said: ‘too bad’. Well now it’s all going dry,” McGuire said.
Ranchers dumped most of their herds. Cotton farmers lost up to half their crops. The extra draw down, coupled with drought, made it impossible for local ranchers to feed and water their herds, said Buck Owens. In a good year, Owens used to run 500 cattle and up to 8,000 goats on his 7,689 leased hectares (19,000 acres). Now he’s down to a few hundred goats.
The drought undoubtedly took its toll but Owens reserved his anger for the contractors who drilled 104 water wells on his leased land, to supply the oil companies.
So, what is on your reading and blogging list today?
Go to bed crying…
…and wake up screaming?
Well, it isn’t that bad…yet.
However there are times that I do go to bed so angry and frustrated lately at the state of “things” these days you could almost say I go to bed screaming.
North Carolina’s Gov. Pat McCrory has giving the final fuck you to the women of his state…let’s see if this next Moral Monday will have the power of orange behind it.
Alrighty then, here are your cartoons for this first Friday of August…in no particular order by the way…let’s be carefree tonight.
(In other words, I’m being a bit of a lazy ass and don’t feel like going the extra effort to organize the funnies for you.)
Perhaps this little Peanuts cartoon fits my mood best:
(And considering the fact that I am writing this post at 8 am this morning…that sure as hell is a damn perfect cartoon for me, don’t you agree?)
Okay, on with the funnies:
This next one by Slowpoke is a good one: Blind by Political Cartoonist Jen Sorensen
(Love the sheep in that poster!)
Ya, Grease is the Word!
This is an open thread.
There are so many elegant things about my chosen field that I do, in fact, still get excited when I introduce huge numbers of undergraduates to Economics. I don’t do much of that anymore given that I am better paid and easier employed as a graduate finance teacher churning out hapless MBAs. But, part of me still knows that we have lots of answers to the big policy questions. The problem is that Republican Revisionism and Big Money from Big Finance has totally overwhelmed the main stories and theories that we all know well. The worst situation is that the cult of the Austrian School is being taken seriously by a select group of young, white male journalists and getting more virtual ink than it truly deserves. Then, there is the absolute fail of the urgency of fiscal policy when unemployment is this high and this pervasive. The one bright light–despite the howling of goldbugs and Birchers–has been the FED. There are still economists over there in that outfit. If you’re used to deconstructing markets like I am, you can see that the markets trust the FED’s policy. It’s not that the FED directly benefits them any more. Those days of buying up nasty assets are behind us. It’s that the Fed understands its priorities are stable financial markets and banking systems and tackling either inflation or unemployment depending on the priority.
Inflation is the thing that is most directly impacted by FED policy. It hasn’t been an issue since Paul Volcker got rid of it and the FED announced its Taylor Rule boundaries. It’s the legacy of Milton Friedman and the monetarists which is actually the school that I most fit as a financial economist of a certain age. That legacy and the legacy of fiscal policy as established by the models and hypotheses first provided by J.M. Keyenes and later proved and improved by a slew of brainy economists with computers and databases–like Paul Samuelson–has been under attack with no theoretical or empirical basis. It is all political and screed journalist based. The nonsense has been amplified by a President who seems completely unwilling to trust real economists and relies on lawyers with emphasis on economic policy. That’s like having a biologist that watches bears in the woods go over your blood work imho. I don’t care how much freaking experience you have writing policy law, it’s not the same as being grounded in the theory and totally aware of the empirical proofs and disproofs.
So, as the speculation about a possible new fed chair pops up, we get stuff like this. Obama is defending Larry Summers. The man is an economist but the man is also not what you would call a particularly skillful leader as witnessed by his tenure at Harvard. He also has said some things about women and science and math that are not very artful and certainly not very helpful to those of us that struggle to be credible despite our obvious genitalia.
Barack Obama has strongly defended Larry Summers against opposition from the left to the possible appointment of the president’s former economic adviser as the next chair of the Federal Reserve.
Mr Obama, speaking at a closed meeting of the Democratic caucus of the House of Representatives, reacted strongly at an otherwise friendly meeting when Ed Perlmutter, a congressman from Colorado, urged him not to appoint Mr Summers.
According to members of Congress present at the meeting on Capitol Hill, Mr Obama urged Democrats to give Mr Summers a “fair shake” and said he had been a loyal and important adviser when the president took office in the midst of a deep recession in 2008.
Mr Summers, a former Treasury Secretary and president of Harvard University, and Janet Yellen, the vice-chair of the Fed, are the leading contenders for the job.
Mr Obama also mentioned by name a third person, Don Kohn, as a possible candidate. He said he had yet to make up his mind on whom he would nominate for the job.
The president said there was little in the nature of policy differences between them, saying you “would have to slice the salami very thin” to find areas in which they diverged.
Don Kohn is a Fed insider and pretty well known as a monetary policy dove just as Obama appears to be a fiscal policy dove. Let me qualify that description. They both come from the let people suffer unnecessarily and let the markets work things out school of thought. In good economic times, that’s an okay stand. In the face of persistent unemployment that is basically looking at a huge number of people and saying let them eat cake. That last option is unnecessary because the bottom line is that we know better and can do better by these folks. It kills me to know what I know and watch the passivity of Obama and the retch-inducing ignorance of Republicans in the face of great suffering. If, in the long run we are all dead, in the short run we all suffer and face economic and personal devastation in the face of incremental steps and not whole-hearted policy wars on dire economic situations. Frankly, I think Obama has a problem with the Janet Yellen because she’s likely to tell him to off if she doesn’t like what he has to say. I really do. She’s a hard boiled economist with a no nonsense approach.
It’s not that we’re doing badly. It’s that we’re creeping along and not growing fast enough in the face of all this deep, long, persistent unemployment and no one’s hair is on fire that can do anything about it.
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.7 percent in the second quarter of 2013 (that is, from the first quarter to the second quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.1 percent (revised).
The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3 and “Comparisons of Revisions to GDP” on page 18). The “second” estimate for the second quarter, based on more complete data, will be released on August 29, 2013.
The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, private inventory investment, and residential investment that were partly offset by a negative contribution from federalgovernment spending. Imports, which are a subtraction in the calculation of GDP, increased.
The acceleration in real GDP in the second quarter primarily reflected upturns in nonresidential fixed investment and in exports, a smaller decrease in federal government spending, and an upturn in state and local government spending that were partly offset by an acceleration in imports and decelerations in private inventory investment and in PCE.
We cannot creep our way back to prosperity.
The fact that the donor class and corporate profits are doing well is what’s driving this anemic policy response. The people most effected by the inactivity are either fighting it out with racial resentment or feeling the usual helplessness that goes with being a picked-on out class. That infighting is helping those at the top ignore the plight of the folks that find they are quickly losing ground. That is why any of these FED appointments is basically a win for the status quo. It is also why the though of Larry Summers as FED chair gives me the heebiejeebies.
Like I said, real economists reacted to this news today like this: Economists React: Better GDP, but Trend Still Sluggish. Here’s some examples.
While this is a better than expected report, it isn’t very strong. If you look at the past three quarters, the economy has not done very much. That is the economic environment facing the Fed as it meets today. –Joel Naroff, Naroff Economic Advisors
The fact that declining federal spending continues to be a drag on economic growth is another reminder that now is not the time for Washington to impose self-inflicted wounds on the economy. The Administration continues to urge Congress to replace the sequester with balanced deficit reduction, and promote the investments our economy needs to put more Americans back to work, such as by rebuilding our roads and bridges. –Alan Krueger, White House Council of Economic Advisers
–The U.S. economy grew modestly in the second quarter because of hefty fiscal restraint, but growth exceeded expectations and looks to turn convincingly higher in the second half of the year. Sequestration chopped federal nondefense spending 3.2% annualized in the quarter, and civic worker furloughs slowed consumer spending to 1.8%, despite motor vehicle sales hitting five-year highs. On the plus side, residential construction clocked in with a fourth consecutive double-digit gain, exports bounced back strongly, and state and local government expenditure rose for the first time in a year. Most importantly, businesses appeared less concerned about the knock-on effects of sequestration. –Sal Guatieri, BMO Capital Markets Economics
All during this economic bust up we’ve had government as a drag on the economy. This has been at every level of government. It is a massive fail on the part of our modern democracy.
Again, we cannot creep our way back to prosperity. This is especially true if all levels of government are holding back everything but the profits of a few large corporations and the taxes of the people who have gained so much over the last three decades. It just ain’t right and it just isn’t good economic policy.
A hattip to United Republic, their new site Republic Report and for this ‘most’ enlightening tidbit on Larry Summers.
This Larry Summers.
The Larry Summers that President Obama chose to head the White House National Economic Council, even after the blowback from Summers receiving beaucoup speaking fees in 2008 at banking meetings, as in JP Morgan dishing out $67, 500 for a February engagement. This, after JP Morgan reaped $25 billion in Government bailouts. Or Citigroup, another happy camper after receiving $50 billion in taxpayer monies, found enough spare change to pay Summers on two occasions, once for $45,000 and two months later for $54,000. Or everyone’s favorite, Goldman Sachs. Sachs was really generous after receiving $10 million in bailout funds but managed a double decker of $135,000 for one appearance and another for $67,500 eight weeks later.
Oh, and Summers also had managed another $5.2 million, an easy-peasy salary from D.E. Shaw, which just happens to be a major hedge fund.
Who says government doesn’t work?
When Summers exited his WH duties, he hit the lecture circuit once again. His love of giving speeches seems to have slipped under the radar. Until it didn’t. Interest appears to have shredded the text of his presentation at a particular business forum. Mysteriously, the stirring words disappeared and no one could retrieve then. Poof! But here’s what we know: this time Summer’s concluding keynote speech celebrated the wonders of outsourcing and off-shoring jobs. Here’s a brief statement from the catalog introduction of the 2011 World BPO/ITO Forum:
Resisting the prospect of offshoring withholds a major totem of competitive parity from the most profitable producers of economic progress, Dr. Summers said. “It is to deny the US and American businesses an opportunity to participate in this revolution in emerging markets, which is the most important economic story of our time.” He added that increasing trade in tasks makes businesses more efficient and competitive, and allows them to exploit different skills, capacities and labor costs anywhere in the world. Critics who automatically label outsourcing or offshoring a threat to prosperity “resemble luddites who took axes to machinery early in England’s industrial revolution,” he said. Instead of killing jobs, as luddites feared, machines spawned millions of jobs and better standards of living.
Oh yes, I’m sure the majority of Americans now collecting unemployment or those working two, three jobs to pay the electric bill, buy the Kraft mac and cheese dinners in bulk, while hoping to God no one in the family gets sick could appreciate this finely-tuned statement. But this statement [though applicable to many workers] was specifically directed to business process [as in payroll, tax and benefits] and IT workers—you know, all those geeky kids that were told ‘Go for the computer degree. You can’t go wrong.’
Because those innocent initials in the forum’s title? That would stand for ‘business process outsourcing/information technology outsourcing.’
And people wonder why there are so many college grads with gargantuan school loans associated with the Occupy Wall St. Movement. These grads are mad as hell and not getting over it.
But notice the analogy that Summers uses for describing critics of massive outsourcing of jobs, jobs, jobs. Critics are Luddites, Summers says, no better than the extremists who smashed machinery during the early days of the Industrial Revolution. I suspect there are ‘things’ citizens would enjoy smashing right now. And it’s not the machines.
But here’s the word that flew out at me: exploit, as in exploitation:
an act or instance of exploiting<exploitation of natural resources> <exploitation of immigrant laborers> <clever exploitation of the system>
Ding, ding, ding! We exploit our natural resources, our fellow citizens. We exploit immigrant workers, every chance we get. And we exploit the system by having people like Larry Summers, whirling through the revolving door of government/business, and then pretending the damage left behind is a good thing, the most important economic story of our time.
How about the biggest heist of all time!
But it gets better. We get to exploit workers in other countries, too, making their lives so miserable they threaten to commit suicide en masse.
What’s not to love?
If this sort of thing wasn’t so sickening, it would be laughable.
I am not laughing.
Btw, the Republic Report site will be tapping none other than Jack Abramoff for an insider’s view of DC corruption and influence peddling. Super-lobbyist Abramoff, released from jail last year, will be a regular contributor to RR because if you want to catch a bunch of rats what better strategy than employ a King Rat?
Could get very interesting!
Ezra Klein (AKA Beltway Bob) is really coming up in the world. He somehow managed to get a gig writing a review of Ron Suskind’s book Confidence Men for the New York Review of Books. I’m impressed, I must admit.
As you probably guessed already, Klein is quite critical of the book. In fact he thinks Suskind should have written a completely different kind book instead–maybe even a couple of different kinds of books.
As I see it, Suskind set out to write an interesting and entertaining political book about Obama’s economic advisers, how they interacted with each other and the President, and how administration economic policy took shape over the first couple of years. The book is gossipy and very much focused on the people involved and their relationships with each other. As a psychologist, I found it fascinating to read Suskind’s insights.
Klein admits that
The work that went into Confidence Men cannot be denied. Suskind conducted hundreds of interviews. He spoke to almost every member of the Obama administration, including the President…He takes you inside…the Oval Office. He heads to Wall Street and back. He quotes memos no one else has published. He gives you scenes that no one else has managed to capture.
But that isn’t good enough. Klein disapproves of the gossipy, personality-centered tone of Confidence Men. He wants Suskind to provide evidence for his personal assessments of people. For example, Klein objects to Suskind’s description of Treasury Secretary Tim Geithner’s appearance at Obama’s announcement that Elizabeth Warren would be working with Geithner to set up a consumer agency that she had first conceived of and then fought for. Although Warren didn’t know it yet, she would never head the agency, because Geithner had already made a deal with the bankers: they would accept a consumer agency as long as Warren wasn’t put in charge.
Here’s the passage that Klein found offensive:
This has caused discomfort not only for the president, but also for his top lieutenants, including the boyish man in the too-long jacket at Obama’s right hip, bunched cuffs around his shoes, looking more than anything like a teenager who just grabbed a suit out of dad’s closet. That’s Treasury Secretary Tim Geithner, looking sheepish.
Klein so objected to this paragraph that he felt he had to go watch the announcement again himself, to see if Suskind’s description was accurate.
I prefer to verify. So I went back to the tape. I rewatched the September 2010 press conference where Obama introduced Warren to the country. I paid special attention to Geithner. Suskind’s right: his suit is too big. But he doesn’t look sheepish or ashamed. He looks, by turns, bored and interested. He clasps his hands behind his back. He nods attentively. He tries not to fidget. He looks like every experienced bureaucrat looks when they’re asked to stand like a prop near the president. Blank, and trying not to make any news. He failed.
But Klein doesn’t offer any evidence for his observations either. How can he know what Geithner was thinking–that he tried “not to fidget” and tried “not to make any news?” He can’t. Klein has shared his own observations and interpretations, just as Suskind did. But Klein finds it annoying. He didn’t want to read a book about people, based on the close observations and opinions of its author. No, Klein wanted a book about policy, and he felt that
…any account of what he [Obama] has done wrong, or what he could do right, needs to provide, first and foremost, a persuasive case of how the White House could have done more to promote an economic recovery over the last three years, or could do more to accelerate one now.
Klein wanted a wonky book, heavy on policy and light on human interest, and he can’t understand why Suskind wrote something different. Quite honestly, I think Klein should go right ahead and write a book like that if he wants to. It wouldn’t be as much fun to read as Suskind’s book, but it might make people like Matt Yglesias and Brad DeLong happy.
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