Larry Summers And Another Luddite Analogy

Posted: February 7, 2012 | Author: | Filed under: just because | Tags: , , , | 10 Comments

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.’

Oops.

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 Reviews “Confidence Men,” and Finds it Sorely Lacking

Posted: November 5, 2011 | Author: | Filed under: Domestic Policy, Economy, Team Obama, The Great Recession, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , | 44 Comments

Ezra Klein, AKA Beltway Bob

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.
Read the rest of this entry »

Sign me up for the Hippie Caucus

Posted: July 2, 2011 | Author: | Filed under: Economy | Tags: , , , , , , , , , | 17 Comments

melting magic mushrooms by spookychild

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.

Monday Reads

Posted: June 13, 2011 | Author: | Filed under: Barack Obama, Foreign Affairs, morning reads, Republican presidential politics, Syria | Tags: , , , , , , , , | 39 Comments

Good Morning!

I’ve been following a few stories recently.  Of course, one is about my favorite blood sport: politics.  One interesting recent announcement is that the two Mormons contending for the Republican Presidential slot are skipping Iowa.  Most of the speculation has to do with the role of religionists in the Iowa Republican party.  Law professor Ann Althouse has some interesting observations on what appears to be the unwillingness of evangelical Christians to vote for Mormons.

It’s distressing to see this conflation of conservatism and prejudice. It’s one thing if Iowan Republicans tend to go for someone with a stronger message of social conservatism, quite another if they are hostile to Mormons. Plenty of Mormons are social conservatives, and it just happens that the 2 Mormons in the race are not social conservatives. Can we get some serious research on this point? It’s a dangerous thing to allow insinuations of religious bigotry to seep into the public consciousness. I can’t tell if the Times is really against bigotry or not. If you portray Iowan religious conservatives as anti-Mormon, in one way, it seems anti-bigotry. But it’s also inviting us to feel hostility toward the Iowan evangelicals.

Althouses’ comments are based on this NYT article which states that Iowa may have an ‘ebbing influence’ on national elections.

But there are signs that its influence on the nominating process could be ebbing and that the nature of the voters who tend to turn out for the Republican caucuses — a heavy concentration of evangelical Christians and ideological conservatives overlaid with parochial interests — is discouraging some candidates from competing there.

Mitt Romney, the former governor of Massachusetts, announced Thursday that he would skip the state’s Republican straw poll this summer, saving his resources — and lowering expectations — for the state’s caucuses next year.

Earlier in the week, Jon M. Huntsman Jr., the former governor of Utah, conceded that he was likely to skip the Iowa caucuses altogether, noting that his opposition to ethanol subsidies makes him unpopular in a state where support for the corn-based fuel is all but demanded.

“I’m not competing in Iowa for a reason,” he told The Associated Press. In addition to his stand on ethanol, Mr. Huntsman, who served in the Obama administration as ambassador to China, says he believes in global warming and has not embraced the Tea Party movement like some of his rivals. And like Mr. Romney, Mr. Huntsman is a Mormon, a religion viewed with wariness by some conservative Christians.

Repercussions from the Arab Spring are continuing through Summer. Syria appears to be the latest country where members of the military are having second thoughts about cracking down on civil unrest in the general population.

The escalating military offensive in northwest Syria began after what corroborating accounts said was a shoot-out between members of the military secret police in Jisr al-Shughur, some of whom refused to open fire on unarmed protesters.

A growing number of first-hand testimonies from defected soldiers give a rare but dramatic insight into the cracks apparently emerging in Syria’s security forces as the unrelenting assault on unarmed protesters continues.

Speaking to Al Jazeera from Turkey, having crossed the border on Friday night, an activist based in Jisr al-Shughur and trusted by experienced local reporters described how a funeral on June 4 for a man shot dead by plain-clothes security a day earlier grew into a large anti-government protest.

“As the demonstration passed the headquarters of the military secret police they opened fire right away and killed eight people,” the activist, who was among the crowd, said. “But some of the secret police refused to open fire and there were clashes between them. It was complete chaos.”

There continues to be a mounting human crisis as Syrians fleeing violence pour into nearby Turkey.

As Syrian security forces move in to the besieged town of Jisr al-Shughour, thousands of refugees are fleeing across the Turkish border.  More camps are being set up to house the new arrivals.  Many of the refugees are in desperate need of medical help.

The emergency ward at Antakya hospital is about to receive its latest casualty from Syria.  It is a young girl who has fallen sick and was brought to the Turkish border by her desperate mother, who is also pregnant. The ambulance driver says the violence in Syria means hospitals there are either full with the injured, or the journey is too hazardous.

The clashes in and around the northern Syrian town of Jisr al-Shughour have forced thousands to flee.  Many of them have recorded the horrifying scenes on cellphones and cameras. In the border village of Harabjoz, people have set up tents as they wait to cross into Turkey.  One refugee, who did not give his name, described the conditions they are facing. “There is no milk for the children,” he says.  “We bought some but we have run out.  They are targeting homes and yesterday gunmen targeted us.  All these people will not survive because they burned all their crops,” he says. “Now it’s become sectarian for sure,” he said.

A spokesman for the United Nations’ refugee agency, Metin Corabatir, has warned of a growing crisis.  “The latest figures UNHCR received from the border is 5051 who fled from Syria because of violence and persecution in this country,” he said.

Witnesses believe the true figure could be double that number – including those who have crossed undetected.

The Economist believes Obama is beatable in 2012 but seems dismayed at the Republican field of candidates.  This was my Saturday night bath read and I found it interesting so I thought I’d pass it along.  They biggest question is that how does a candidate that ran as a change agent and outsider run as ‘Goliath’ this time?

In 2008 Mr Obama represented change. This time he will have to fend off charges that he is to blame for the achingly slow recovery by arguing that it would have been worse without his actions, such as his $800 billion stimulus package and the takeover of GM and Chrysler. That may be true but it is not easy to sell a counterfactual on the stump (as the first President Bush learned). And there are other holes in Mr Obama’s record. What happened to his promises to do something about the environment or immigration or Guantánamo? Why should any businessman support a chief executive who has let his friends in the labour movement run amok and who let his health-care bill be written by Democrats in Congress? Above all, why has he never produced a credible plan to tackle the budget deficit, currently close to 10% of GDP?

Asking these questions will surely give any Republican a perch in this race. But to beat the president, the Republicans need both a credible candidate and credible policies.

I may have to change my opinion of Larry Summers a little bit.  In this FT Op-Ed, Summers tries to fight the austerity agenda and a US “lost decade”.  Wow.

Beyond the lack of jobs and incomes, an economy producing below its potential for a prolonged interval sacrifices its future. To an extent once unimaginable, new college graduates are moving back in with their parents. Strapped school districts across the country are cutting out advanced courses in maths and science. Reduced income and tax collections are the most critical cause of unacceptable budget deficits now and in the future.

You cannot prescribe for a malady unless you diagnose it accurately and understand its causes. That the problem in a period of high unemployment, as now, is a lack of business demand for employees not any lack of desire to work is all but self-evident, as shown by three points: the propensity of workers to quit jobs and the level of job openings are at near-record low; rises in non-employment have taken place among all demographic groups; rising rates of profit and falling rates of wage growth suggest employers, not workers, have the power in almost every market.

A sick economy constrained by demand works very differently from a normal one. Measures that usually promote growth and job creation can have little effect, or backfire. When demand is constraining an economy, there is little to be gained from increasing potential supply. In a recession, if more people seek to borrow less or save more there is reduced demand, hence fewer jobs. Training programmes or measures to increase work incentives for those with high and low incomes may affect who gets the jobs, but in a demand-constrained economy will not affect the total number of jobs. Measures that increase productivity and efficiency, if they do not also translate into increased demand, may actually reduce the number of people working as the level of total output remains demand-constrained.

I’m beginning to feel like part of a chorus these days.  Nearly all economists are telling whatever news source they can that this is your basic demand problem.  Now if the TV media would hire some one other than lawyers and political consultants we might get some traction here on getting a conversation about policy solutions.

I’ve got one more interesting link given to me by our resident psychologist, Bostonboomer. TNR has an interesting article up on why poor people can’t escape poverty easily.

In a paper in April 2010, Harvard behavioral economist Sendhil Mullainathan (for whom, full disclosure, I once worked) and MIT’s Abhijit Banerjee applied this same notion to decisions requiring self-control. If a doughnut costs twenty-five cents, they wrote, then that “$0.25 will be far more costly to someone living on $2 a day than to someone living on $30 a day. In other words, the same self-control problem is more consequential for the poor.” And so, in addition to all the structural barriers that prevent even determined poor people from escaping poverty, there may be another, deeper, and considerably more disturbing barrier: Poverty may reduce free will, making it even harder for the poor to escape their circumstances.

All of this suggests that we need to rethink our approaches to poverty reduction. Many of our current anti-poverty efforts focus on access to health, educational, agricultural, and financial services. Now, it seems, we need to start treating willpower as a scarce and important resource as well.

Okay, so what’s on your reading and blogging list this morning?

Monday Reads

Posted: April 11, 2011 | Author: | Filed under: 2012 presidential campaign, Civil Liberties, Civil Rights, Federal Budget, Foreign Affairs, Libya, morning reads, Republican presidential politics, SCOTUS, Surreality, Team Obama, The Bonus Class, U.S. Economy, U.S. Politics, unemployment, Voter Ignorance, We are so F'd | Tags: , , , , , , , , , , , , , , | 25 Comments

Good Morning!

Well, today I’m starting with a quote from  Robert Kuttner for The American Prospect about Larry Summers’ appearance at the INET conference.  INET is the acronym for the Institute for New Economic Thinking. It was created with a $100 million grant from George Soros and no, I wasn’t invited and I didn’t attend.  Mark Thoma and Brad De Long did. You can read their blogs if you want other views.

Larry Summers, now back at Harvard, was the after-dinner entertainment, interviewed by the prodigious Martin Wolf of the Financial Times, the world’s most respected financial journalist.

Summers was terrific, acknowledging that the stimulus of February 2009 was too small, that the idea of deflating our way to recovery is insane, that de-regulation had been excessive, and that much of the economics profession missed the developing crisis because its infatuation with self-correcting markets.

If only this man had been Obama’s chief economic adviser!

He’s referring to this:

Also worth mentioning is this op-ed by former Obama economist Christina Romer on why we have abysmal unemployment. If you read and listen to both of them, it’s going to be obvious that Obama must not have listened to either of them.  No wonder they quit so early on.  That leaves Timothy-in-the-well Geithner holding the bag for this miserable recovery, imho.  Evidently, the two of them thought  what most economists were thinking for several years now but it just wasn’t evident from policy.  I guess if I heard this austerity crap was coming down the hopper during this miserable recovery, I’d have bailed before my professional credibility went to the crapper too.  Guess Timothy always has the shadow banking industry to keep him warm.  Meanwhile, Summers continues his apology tour and Romer clarifies the unemployment situation.

Strong evidence suggests that the natural rate of unemployment actually hasn’t risen very much. Instead, the elevated unemployment rate appears to reflect mainly cyclical factors, particularly a lingering shortfall in consumer spending and business investment.

Okay. The important phrase here is “lingering shortfall in consumer spending and business investment”.  That means none of these idiotic tax cuts worked.  It also means the stimulus was woefully small and ill-directed.  It also means that it’s absolutely no time to worry about austerity unless you want yet another recession.  Frankly, I think the Republicans are secretly trying to bring one on and Obama is just not that informed about economics and more concerned about chasing the mythical bi-partisan unicorn to wake the frick up.

Since BB knows that I’m a wannabe astrophysicist (or Egyptologist depending on the day of the week), she sent me another kewl science link about a star torn apart by a blackhole! NEATO!!!

On March 28, 2011, NASA’s Swift satellite caught a flash of high-energy X-rays pouring in from deep space. Swift is designed to do this, and since its launch in 2004 has seen hundreds of such things, usually caused by stars exploding at the ends of their lives.

But this time was hardly “usual”. It didn’t see a star exploding as a supernova, it saw a star literally getting torn apart as it fell too close to a black hole!

The African Union’s been chatting up their “Brother Leader”  Whacko Ghadafo and have announced the possibility of an end to the fighting in Libya. And, raise your hand if you’d like to buy the Crescent City connection because I’m entertaining offers since the Brooklyn bridge sold so well last week.

“We have completed our mission with the brother leader, and the brother leader’s delegation has accepted the road map as presented by us,” Jacob Zuma, the South African president, said.

The AU mission, headed by Mohamed Ould Abdel Aziz, the Mauritanian president, arrived in Tripoli on Sunday.

Besides Zuma and Abdel Aziz, the delegation includes Amadou Toumani Toure, Denis Sassou Nguessou and Yoweri Museveni – respectively the presidents of Mali, the Democratic Republic of Congo and Uganda.

Gaddafi made his first appearance in front of the foreign media in weeks when he joined the AU delegation at his Bab al-Aziziyah compound.

The committee said in a statement that it had decided to go along with a road map adopted in March, which calls for an end to hostilities, “diligent conveying of humanitarian aid” and “dialogue between the Libyan parties”.

Speaking in Tripoli, Ramtane Lamamra, the AU Commissioner for Peace and Security, said the issue of Gaddafi’s departure had come up in the talks but declined to give details.

Why is it I want to sing I wanna zooma zooma zooma zooma zoom every time I read something about South Africa these days?  Well, as long as it’s not one of those horn thingies that ruined the world cup this last time out.

More crap from Crazy Republicans via Think Progress: Cantor Sees Current Medicare and Medicaid Programs As A ‘Safety Net’ For ‘People Who Frankly Don’t Need One’

Today on Fox News Sunday, host Chris Wallace questioned House Majority Leader Eric Cantor’s (R-VA) support for a plan in which Americans “pay more out of pocket.” Defending the proposal, Cantor argued that these programs sometimes provide a “safety net” for “people who frankly don’t need one” and that the shift of the burden from the government to the beneficiary will teach government “to do more with less”:

CANTOR: We are in a situation where we have a safety net in place in this country for people who frankly don’t need one. We have to focus on making sure we have a safety net for those who need it.

WALLACE: The Medicaid people — you’re going to cut that by $750 billion.

CANTOR: The medicaid reductions are off the baseline. so what we’re saying is allow states to have the flexibility to deal with their populations, their indigent populations and the healthcare needs the way they know how to deal with them. Not to impose some mandate from a bureaucrat in washington.

WALLACE: But you are giving them less money to do it.

CANTOR: In terms of the baseline, that is correct…What we’re saying is there is so much imposition of a mandate that doesn’t relate to the actual quality of care. We believe if you put in place the mechanism that allow for personal choice as far as Medicare is concerned, as well as the programs in Medicaid, that we can actually get to a better resolve and do what most Americans are learning how to do, which is to do more with less.

Actually, 99% of Americans are doing less with less.  One percent of Americans are doing more with the corporate and rich people’s welfare that folks like Cantor have handed them on a golden platter for the last ten years.  If you have the stomach for it, the link to the TV interview is over at TP too. Frankly, I’ve been sick enough recently and don’t need to see anything that just makes me sicker.

I don’t know about you, but watching Donald Trump–the man who lost his father’s billions and then ran through government subsidies and finally made some money as a really bad reality TV star–as a potential presidential candidate has been sort’ve a surreal trip. James Polis at Richochet says that Trump is Final Proof that the Political Class Has Failed.  Trump’s potential candidacy is like an extension of his reality show with gobs of opportunism, self-promotion and narcissism. It’s bad hair gone wild.

There are two main theories cooperating to explain the Trump phenomenon:

  1. Donald Trump is today’s best self-promoter and professional opportunist.
  2. The Republican field of presumptive candidates for president is lame.

But neither of these, nor even both together, can adequately explain what’s going on. We can’t even turn for supplemental help to subtheories that emphasize the rise of celebreality culture, the fall of Sarah Palin, or The Continuing Story of Bungling Barry. These variables all appear somewhere in the equation that has produced the Trump phenomenon. But none of them explain it.

Trump is suddenly “winning” as a political figure because the political class has failed. The authority of our political institutions is weak and getting weaker; it’s not that Americans ‘lack trust’ in them, as blue ribbon pundits and sociologists often lament, so much as they lack respect for the people inside them.

My theory is that he’s just a summer replacement, along with Michelle Bachmann, that will set the stage for fall when the blue suited, pompadour-sporting  set take over to bore us to death with talks of tax cuts and subsidies ala President Dementia.  Other Republican Presidential wannabes must be thinking we’ll be tired of self-promoting, idea-less hacks by then and that they’ll look refreshing by comparison in a few months.   Oddly enough, the P woman is keeping a low profile in all of this.  Maybe she’s finally figured out that discretion is the better part of valor for a change or it could be she just has enough money  for an excellent summer vacation and has decided to exercise her options.

Okay, so I’m going to move on to something light (weirdly, spinning light, emanating from the patterned Chinese lantern covering the naked bulb in my dorm room while a John Lennon album plays Power to the People on my old turntable … oops, wrong flashback) from New Scientist. Thought mushrooms were just for old hippies and Native American Shaman?  Think again.  Here’s the headline:  Earliest evidence for magic mushroom use in Europe.

EUROPEANS may have used magic mushrooms to liven up religious rituals 6000 years ago. So suggests a cave mural in Spain, which may depict fungi with hallucinogenic properties – the oldest evidence of their use in Europe.

The Selva Pascuala mural, in a cave near the town of Villar del Humo, is dominated by a bull. But it is a row of 13 small mushroom-like objects that interests Brian Akers at Pasco-Hernando Community College in New Port Richey, Florida, and Gaston Guzman at the Ecological Institute of Xalapa in Mexico. They believe that the objects are the fungi Psilocybe hispanica, a local species with hallucinogenic properties.

Like the objects depicted in the mural, P. hispanica has a bell-shaped cap topped with a dome, and lacks an annulus – a ring around the stalk. “Its stalks also vary from straight to sinuous, as they do in the mural,” says Akers (Economic Botany, DOI: 10.1007/s12231-011-9152-5).

This isn’t the oldest prehistoric painting thought to depict magic mushrooms, though. An Algerian mural that may show the species Psilocybe mairei is 7000 to 9000 years old.

What a long strange ride it’s been ever since.

More on Obama-style Justice for Guantanamo detainees as the Supremes decline to clarify their rights.

The Obama administration has fought all attempts by lawyers for detainees to have the Supreme Court review those rulings. And while the news was overshadowed by the administration’s concession that alleged Sept. 11 mastermind Khalid Sheik Mohammed and his co-defendants will be tried by a military commission rather than federal jury — a separate issue — the court last week turned away three detainee challenges arising from Boumediene.

One group active in representing the detainees, the Center for Constitutional Rights, decried what it called the court’s refusal “to defend its Boumediene decision and other precedents from the open defiance of the D.C. Circuit.”

The government told justices that there is no reason for them to believe anything other than “lower courts have properly performed the task that this court assigned them in Boumediene v. Bush.”

“Open defiance” may go a bit far in describing the D.C. Circuit’s rulings, but there is no doubt that the court’s action in Boumediene — and its inaction since — has left few happy.

While detainee advocates complain about the court’s timidity, D.C. Senior Circuit Judge A. Raymond Randolph has received wide attention for a speech he gave last year in which he compared the justices to characters in “The Great Gatsby,” who have created a mess they expect others to clean up.

You don’t need me to start in on the Supremes this morning since BB did such a great job last night.  Please go read her thread on just exactly how bankrupt our government has become.  Believe me, it’s not an article on the deficit either.

Here’s an important information on the Koch Brothers, grand wizards of the kleptocracy.  Alternet says they’re worse than you thought and they’re the astroturf beneathe the Tea Party’s wings.

Then look at a recent position pushed by Americans for Prosperity, the Tea Party-allied astroturf group founded and funded by David Koch (and whose sibling organization, the Americans for Prosperity Foundation, he chairs):

Similarly, Americans for Prosperity supports the House continuing resolution that cuts spending by $61 billion. Those cuts would reduce the budget for the CFTC by one-third. Make no mistake: Gutting the CFTC or limiting its authority would be a boon to Wall Street businesses that use complex financial instruments. But while the result is more profits for oil companies, it means everyone else pays more at the pump.

Okay, now have a look at the Kochs’ recent direct contributions to political candidates:

The Kochs donated directly to 62 of the 87 members of the House GOP freshman class…and to 12 of the new members of the U.S. Senate.

Don’t look now. It’s Atlas Shrugged, the Movie.  Bad fiction just refuses to die when it gives erections to obsessive white men. I’m just waiting for next year’s Razzies. It’s the tale of a businessman obsessed. No, not the movie …the making of the movie …

It has taken businessman John Aglialoro nearly 20 years to realize his ambition of making a movie out of “Atlas Shrugged,” the 1957 novel by Ayn Rand that has sold more than 7 million copies and has as passionate a following among many political conservatives and libertarians as “Twilight” has among teen girls.

But the version of the book coming to theaters Friday is decidedly independent, low-cost and even makeshift. Shot for a modest $10 million by a first-time director with a cast of little-known actors, “Atlas Shrugged: Part I,” the first in an expected trilogy, will play on about 300 screens in 80 markets. It’s being marketed with the help of conservative media and “tea party” organizing groups and put into theaters by a small, Salt Lake City-based booking service.

I think I’ll pass.  I prefer those nice little British films.  I’m anxiously awaiting the redo of Upstairs, Downstairs.  I never could make it through that silly John Galt speech even when I was young and my mind was an open book.  Now, where are those lights on the ceiling when you need them?

What’s on your blogging and reading list today?

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