Bring on the Real Economists
Posted: September 7, 2012 Filed under: 2012 elections, U.S. Economy | Tags: Democratic economic record, income equality, jobs, joseph stiglitz, Paul Krugman, Romney/Ryan Soak the Middle Class Plan 18 Comments
I really loved the line in Obama’s acceptance speech on the Republican’s apple vinegar cure-all for everything that ails you. Take two tax cuts, throw out a few regulations, and call us in the morning! Here’s a great read. The NYT book review looks at the new books of Nobel prize winning economists Paul Krugman and Joseph Stiglitz. These out spoken economists speak truth to power. I just wish the current powers-that-be would listen.
…Washington is stuck in neutral. Worse than neutral; it is in reverse. As the last elements of the 2009 stimulus phase out, the initial flood of federal aid has slowed to a trickle. If no agreement is reached before early next year, the trickle will become a huge backward flow, as President Obama’s payroll tax cut and all the Bush tax cuts expire while automatic spending cuts agreed to in previous legislative sessions kick in. Already, Republican leaders are threatening to replay last year’s standoff over the debt ceiling. Meanwhile, state and local governments—prohibited from running sustained deficits, increasingly dominated by anti-spending forces—continue to cut aid to those out of work and slash programs that invest in the nation’s future while laying off teachers and other public workers. Without those layoffs, the current unemployment rate would probably be around 7 percent.
Against this backdrop, no book could be more timely than Paul Krugman’s End This Depression Now! Since the crisis began, Krugman has argued with consistency and increasing frustration that the United States has become caught not in a normal recession, but in a “liquidity trap.” Since interest rates are already at rock bottom, normal measures, such as easy credit, won’t work, and expanded government expenditures must play a central part in boosting anemic demand. Otherwise, the efforts of private citizens to pay down debts laid bare by the financial crisis will continue to hold the economy back.
We continue to see Republicans blame the current Democratic administration for an economy they wrecked and a lackluster recovery that they actively work to prevent from becoming better. Today’s job report is not what it should or could be. But, it’s not what the Republicans make it out to be either. History shows us that the Democrats have been the job creators.
In the eighteen months from the beginning of 2008 through the middle of 2009, a period fully shaped by the Bush economic program to which Republicans now want to return, (but before the Obama stimulus had a chance to take effect), approximately 7.5 million jobs were lost.
Over the most recent 18 months of the Obama administration, approximately 2.8 million jobs have been added.
That means that the average monthly job loss during the “difficult situation” before Obama’s policies took effect was 417,000. Over the last year-and-a-half, the average monthly job gain has been 155,000.
If Rep. Ryan and Gov. Romney see that as making a bad situation worse, it should tell us something about their “vision.”
Joseph Stiglitz has been focused on the huge income gap created by policies that funnel money to the highest income earners. His concern is of the US as a Banana Republic.
We may be the richest nation in the world, but poverty is higher and social mobility between generations lower than in other rich nations. In other respects, our model is bloated: we release far more carbon dioxide and use far more water on a per capita basis; and we spend far more on health care, while leaving tens of millions uninsured and achieving health outcomes that are mediocre at best.
The reason, according to Stiglitz, is that the vaunted American market is broken. And the reason for that, he argues, is that our economy is being overwhelmed by politically engineered market advantages—special deals that Stiglitz labels with a term familiar to economists: “rent-seeking.” By this, he means economic returns above normal market levels that are derived from favorable political treatment. In the most powerful parts of The Price of Inequality, Stiglitz chronicles the blatant tax and spending giveaways to big agriculture, big energy, and countless other sectors. Yet he also pointedly argues that much of the rent-seeking that plagues our economy takes a more subtle form, also familiar to economists: “negative externalities,” or costs that economic producers impose on society for which they don’t pay.
The spectacular profits of the energy industry, for example, rely heavily on the failure of regulation to incorporate fully the social and economic costs associated with environmental degradation, including climate change. Similarly, the increasingly aggressive activities of Wall Street—whether in the marketing of unsound mortgages, the use of excessive leverage, or the irresponsible use of derivatives—create huge risks for the economy as a whole. Yet these risks are largely not taken into account in the prices paid in financial markets. Without effective regulation, the costs are borne by all of us—most acutely by the struggling millions who have been pushed out of jobs.
Weeding out these and other forms of rent-seeking would thus promote both efficiency and equity, and Stiglitz provides a broad list of reform ideas, ranging from strict regulation of financial markets to more effective anti-trust laws. Yet he is most passionate about the need for political reform. Either those at the top will realize that things must change, or, he suggests, the kinds of popular revolts sweeping Middle Eastern nations will come to the United States.
Clinton has some intriguing facts on his side. Aside from a rounding error, his historical numbers are accurate (figures from the Bureau of Labor Statistics show that the tally under Democrats since 1961 rounds to 41 million, not 42 million). I crunched the numbers a few different ways to see if Clinton was cherry-picking the best numbers. His figures measure job gains from the month a president took office until the month he left. Since it takes a year or so for any president’s policies to go into effect, I also measured job gains from one year after each president took office till one year after he left. Here’s the score by that measure: Democrats: 38 million new jobs, Republicans, 27 million.
Clinton only mentioned private-sector jobs, so I pulled the data for all jobs, including government. Again, the Dems have a big edge, accounting for 48 million new jobs, compared with 31 million for Republicans. If you push the boundaries out one year for each president, the gap narrows to 44 million new jobs under Democrats, and 34 million under Republicans.
Other measures also show that the economy performs better under Democratic presidents. Sam Stovall, chief equity strategist for S&P Capital IQ, conducted an analysis recently showing that GDP, stock prices, and corporate earnings have all increased more under Democratic presidents than under Republicans.
The S&P 500 stock index, for example, has risen 12.1 percent per year under Democratic presidents since 1900, and just 5.1 percent under Republicans. Since 1949, GDP has grown 4.2 percent per year under Democrats and 2.6 percent per year under Republicans. The same trend extends to corporate profits, which have grown 10.5 percent under Dems and 8.9 percent under Republicans.
The irony is obvious, since Republicans are considered the business-friendly party, while “tax and spend” Democrats are regarded as redistributionists eager to transfer wealth from those who have it to those who don’t.
We need to hold the Republicans responsible for all the evil they have done recently. I’m rejecting them all up and down the ticket this fall because I want a healthy economy and they never really deliver that.
Major New Boston Globe Article Recounts Circumstances of Romney’s Bain Departure
Posted: July 20, 2012 Filed under: 2012 presidential campaign, Mitt Romney, Team Obama, The Bonus Class, U.S. Economy, U.S. Politics | Tags: "pathos of the plutocrat", 13D filings, Bain Capital, Beth Healy, golden parachute, Michael Kranish, Paul Krugman, Roberta Karmel, Romney's tax returns, SEC, The Boston Globe 9 CommentsI know everyone is focused on the Colorado shooting, but I feel as if I need to post this new information about Mitt Romney’s tenure at Bain Capital.
New interviews and public records research by Boston Globe reporters Beth Healy and Michael Kranish make it clearer than ever that Romney was still in control of the company during his “leave of absence” to manage the 1999 Winter Olympics in Salt Lake City.
Interviews with a half-dozen of Romney’s former partners and associates, as well as public records, show that he was not merely an absentee owner during this period. He signed dozens of company documents, including filings with regulators on a vast array of Bain’s investment entities. And he drove the complex negotiations over his own large severance package, a deal that was critical to the firm’s future without him, according to his former associates.
Indeed, by remaining CEO and sole shareholder, Romney held on to his leverage in the talks that resulted in his generous 10-year retirement package, according to former associates.
“The elephant in the room was not whether Mitt was involved in investment decisions but Mitt’s retention of control of the firm and therefore his ability to extract a huge economic benefit by delaying his giving up of that control,” said one former associate, who, like some other Romney associates, spoke only on condition of anonymity because they were not authorized to speak for the company.
Romney originally planned to take a leave of absence, while contributing part-time to Bain. It was agreed that “five managing directors” would be in charge while he was away. Romney was technically no longer involved in investment decisions, but he had legal control of the firm.
Basically, Romney wanted a huge golden parachute, and retaining control of Bain gave him leverage. He was still the boss, even if he had let go of micromanaging every new project and decision. The reporters talked to
James Cox, a professor of corporate and securities law at Duke University, [who] said Bain’s continued reference to Romney as CEO and sole shareholder indicated that Romney was still the final authority. Moreover, Cox said, Romney would likely have been updated regularly about Bain Capital’s profits while he was negotiating his severance package. As a result, Cox said, Romney’s statement that he had no involvement with “any Bain Capital entity” appears “inconsistent” with his actions.
“If he is 100 percent owner, I just find it incredible that what I would call ‘big decisions’ — acquisitions, restructuring, changes in business policy — that they would not have passed on to him on an informational basis, not asking for formal approval but just keeping him in the loop,” Cox said.
Romney’s departure left Bain in a somewhat chaotic state. The remaining partners were worried about their ability to raise funds for takeovers without their former boss. Some of the partners chose to leave Bain and begin their own firms “rather than go through the limbo transition.”
I seems quite clear that Romney has lied on disclosure forms on which he has stated that after February 11, 1999 he “was not involved in the operations of any Bain Capital entity in any way.”
What I can’t understand is why he didn’t just lay out all these facts and simply deal with any criticisms about investments that Bain made between 1999 and 2002. He benefited financially from those decisions anyway–and is still benefiting from Bain investments. But now he looks dishonest as well as ruthless toward workers who suffered when Bain outsourced their jobs or drove their employers into bankruptcy.
CNN also published an important article about Romney and Bain today. The author is Roberta Karmel, a former SEC commissioner who is now Centennial Professor of Law at Brooklyn Law School. Karmel has been quoted in the Boston Globe’s previous articles on Romney’s separation from Bain. Karmel explains in detail why Romney can’t avoid responsibility for Bain between February 11, 1999 and early 2002 when he officially resigned as CEO and presumably transferred some of his shares to the new managing partners.
The contradictory representations in the Government Ethics Office and SEC filings are at best evasive and at worst a violation of federal law. A federal statute — 18 U.S.C. § 1001 — provides that anyone who “in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully — (1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact; (2) makes any materially false, fictitious, or fraudulent statement or representation” shall be fined or imprisoned. Violations of federal securities laws, including the making of false statements in a 13D filing, are independently punishable under the securities laws….
Romney is not now claiming his 13D filings were inaccurate or false, but he is claiming that although he was chief executive officer, managing director, chairman and president of Bain Capital, he was not really there, but in Utah managing the Winter Olympics. Nevertheless, he was earning more than $100,000 in salary from Bain. Since he will not release his income tax returns for 1999-2002, we have no idea how high this salary really was.
If Romney was not “involved” in the operations of Bain Capital, why was he being paid? As sole shareholder, why did he keep himself on as CEO? Also, at least with respect to the Stericycle deal, he invested as an individual along with the Bain entities. Why is Romney’s story about his relationship to Bain and its investment activities at odds with the documents his firm filed?
There’s much more, so if you’re interested, be sure to check out the entire article. I assume the Obama campaign will quickly latch onto this new information. Will Romney try to explain, or will he continue to resort to the “pathos of the plutocrat” as described in Paul Krugman’s latest column–whining because he isn’t getting the deference that he feels is his due as one of the super-rich? Krugman:
Like everyone else following the news, I’ve been awe-struck by the way questions about Mr. Romney’s career at Bain Capital, the private-equity firm he founded, and his refusal to release tax returns have so obviously caught the Romney campaign off guard. Shouldn’t a very wealthy man running for president — and running specifically on the premise that his business success makes him qualified for office — have expected the nature of that success to become an issue? Shouldn’t it have been obvious that refusing to release tax returns from before 2010 would raise all kinds of suspicions?
By the way, while we don’t know what Mr. Romney is hiding in earlier returns, the fact that he is still stonewalling despite calls by Republicans as well as Democrats to come clean suggests that it could be something seriously damaging.
Anyway, what’s now apparent is that the campaign was completely unprepared for the obvious questions, and it has reacted to the Obama campaign’s decision to ask those questions with a hysteria that surely must be coming from the top. Clearly, Mr. Romney believed that he could run for president while remaining safe inside the plutocratic bubble and is both shocked and angry at the discovery that the rules that apply to others also apply to people like him. Fitzgerald again, about the very rich: “They think, deep down, that they are better than we are.”
Stay tuned….
Friday Reads
Posted: July 13, 2012 Filed under: morning reads | Tags: Dinosaur Sex, George Zimmerman, Jerry Sandusky, Native American migrations, Paul Krugman, pedophile, race baiting, Rush Limbaugh 28 Comments
Good Morning!
There are so many headlines flying about at the moment of interest that it’s hard to pick just a few this morning. Let’s start with some big ones that won’t go away.
A 267 page internal investigation of pedophile Jerry Sandusky shows that every knew and they all concealed the horrible crimes. Gawker sums up the shameful findings.
If you don’t have time to review the full 267-page internal investigationof the Penn State scandal, here’s the gist: Everyone knew. Former Penn State head football coach Joe Paterno knew. Former Penn State University president Graham Spanier knew. Former Penn State University vice president Gary Schultz knew. Penn State Athletic Director (currently on leave) Tim Curley knew. Everyone knew. As far back as 1998, when they learned of a criminal investigation of Sandusky related to an instance of suspected sexual misconduct with a boy in a PSU football locker room shower.
Here’s a paragraph from investigator Louis Freeh’s remarks sent out alongside his report that damns “the most powerful leaders at Penn State University” quite succinctly:
“Taking into account the available witness statements and evidence, it is more reasonable to conclude that, in order to avoid the consequences of bad publicity, the most powerful leaders at Penn State University – Messrs. Spanier, Schultz, Paterno and Curley – repeatedly concealed critical facts relating to Sandusky’s child abuse from the authorities, the Board of Trustees, Penn State community, and the public at large. Although concern to treat the child abuser humanely was expressly stated, no such sentiments were ever expressed by them for Sandusky’s victims.”
It’s really hard to put together the words that describe exactly how disgusted I am by this statement. That last sentence just is shameful. This sums up just about everything there is to say about how people in power with an agenda will behave when their interests are placed above everything else.
You wouldn’t know about the complete meltdown over Mitt Shady in the MSM and everyplace else if you hang out in right blogosphere or listen to Rush Limbaugh. It’s a wonderful day for race-baiting! They’re stuck on the NAACP Romney appearance and appear oblivious to the continued uncovering of Romney’s lies to every one including two federal agencies. Nope. Rush just turns up the volume and hate. Here’s more on that from MoJo.
“Obama’s the Preezy,” Limbaugh told his listeners Wednesday, (get it? Cuz that’s how black people talk). “He’s confident they’ll boo Romney, simply ’cause Romney’s white. He’s confident of that.” I’m sure Limbaugh will have an impressive rationalization for why Vice President Joe Biden was so well received by the NAACP convention Thursday. This is, put simply, the dumbest thing Limbaugh has said since the time the 61-year old radio host revealed he didn’t know how birth control works.
Romney has now said he “expected” to get booed, and House Minority Leader Nancy Pelosi accused Romney of wanting to get booed in order to make himself look politically brave. Like Limbaugh’s ridiculous comment, Romney and Pelosi’s statements are unfair to the NAACP. There has only been one black president of the United States in history, and Mitt Romney is not the first white presidential candidate to address the NAACP. When Ross Perot (!) adressed the convention in 1992, press accounts don’t describe any boos despite Perot referring to the audience as “you people.” Then-Arkansas Governor Bill Clinton was well received. Former Republican Senator Bob Dole (R-Kan.) declined to speak, saying he wanted to talk to audiences he “could relate to.”Both Al Gore and George W. Bush addressed the convention in 2000, and neither were booed.
There are only two instances in the past thirty years or so in which a “white guy” of comparable status to Romney getting booed at an NAACP convention. Following his appearance in 2000, George W. Bush snubbed the NAACP for years as president, but when he finally did speak in 2006, he was booed when he brought up charter schools and the war in Iraq. Prior to that, you have to go back about twenty years of white guys not getting booed to 1983, when then-Vice President George H.W. Bush was booed because of his defense of the Reagan administration’s civil rights record. Even then, ABC News describes him as being “well received” when he returned as a presidential candidate in 1988.
Here’s something interesting from Paul Krugman quoted at Politico: “I miss Bush’s ‘honesty’.”
The “radicalized” GOP has gone so far off the deep end, according to Paul Krugman, that it has the New York Times columnist wishing for the days of George W. Bush.
Only one side’s to blame for our “nightmarishly dysfunctional political situation,” he tells Business Insider.
“It’s entirely one-sided,” Krugman said. “That’s one of those things, you know, the centrists — you want to be a centrist, and you want to blame both sides, and it’s one of those almost hilarious things because you see it again and again, the pundits who say, ‘Here’s what President Obama should do, he should reach out across the divide and propose some short-term stimulus but long-term spending cuts to balance the budget, and you say, ‘He’s actually proposed that.’”
“We have a radicalized, off-the-deep end Republican Party,” the Nobel Prize–winning economist added.
Krugman puts the GOP’s latest presidential candidate in that category.
“I find myself now, watching Mitt Romney campaign, I find myself wishing for the honesty of George W. Bush,” he said.
The FBI has released its report on George Zimmerman–shooter of unarmed teenager Trayvon Martin–and has determined there is no evidence of racism present. CSM reports on the findings.
After interviewing 30 people familiar with George Zimmerman, the neighborhood watch captain charged with killing African-American teenager Trayvon Martin, FBI agents found no evidence that the shooting was driven by racial bias or animus.
Before Thursday’s release of a Department of Justice report, both sides have argued over whether smatterings of racially charged testimony should be released to the public before the trial – in particular, the testimony of “Witness 9,” whom state prosecutors say has described an “act” by Mr. Zimmerman that suggests “he had a bias toward black people.”
The report released Thursday made clear that the FBI found no one willing to go on the record as saying Zimmerman is racist. Even one of the most skeptical local investigators with the Sanford, Fla., police department, Chris Serino, suggested to the FBI that Zimmerman followed Trayvon “based on his attire,” not “skin color,” and added that he thought Zimmerman had a “little hero complex,” but is not racist, according to the Orlando Sentinel, which obtained copies of the document.
Prosecutors say Zimmerman profiled Trayvon as a criminal (though the teen was doing nothing wrong), followed him, confronted him, and then killed him after a brief scuffle. Zimmerman says he shot Trayvon in self-defense after the teen jumped him, knocked him down, and bashed his head against a sidewalk. The case caused a national uproar over racial profiling and gun laws after local police originally declined to charge Zimmerman. Forty-four days after the shooting, a special state prosecutor charged Zimmerman with second-degree murder.
The report outlines how FBI agents asked each person interviewed whether Zimmerman “displayed any bias, prejudice or irrational attitude against any class of citizen, religious, racial, gender or ethnic groups.” No one said he had.
More information is available at the paper’s website.
I want to add a few interesting links since this is Friday! First, the CSM reviews DNA evidence that shows that indigenous Americans came to this side of the world in at least three waves.
Supporting a controversial view of how humans might have populated the Western Hemisphere, geneticists have found that groups from Asia traveled over the Bering Strait into North America in at least three separate migrations beginning more than 15,000 years ago — not in a single wave, as has been widely thought.
“We have various lines of evidence that there was more than one migration,” said Dr. Andres Ruiz-Linares, a professor of human genetics at University College London and senior author of a report on the findings that was published Wednesday by the journal Nature.The discovery was made possible by the sheer volume of genetic material the team was able to assemble and analyze, he said.
Ruiz-Linares and colleagues around the world analyzed DNA samples, primarily from blood, taken from hundreds of modern-day Native Americans and other indigenous people representing 52 distinct populations. These included Inuits of east and west Greenland, Canadian groups including the Algonquin and the Ojibwa, and a larger variety of people spanning the southern regions of the Americas from Mexico to Peru.
Investigating patterns in more than 350,000 gene variants, the scientists determined that most of the groups they studied did indeed descend from an original “First American” population.
One last link! Ever wonder how dinosaurs had sex? Here’s some information on T-Rex’s Sex Life from the Daily Mail. There’s even some paintings that depict the act. Consider this!
Scientific illustrators have also attempted to capture the intriguing rituals of the huge beasts – including an illustrator who worked with Dr Halstead on a magazine article in 1988.
The physical challenges involved must have been formidable.
The penis of a tyrannosaur is estimated to be around 12 feet long.
Kristi Curry Rogers, Assistant Professor of Biology and Geology at Macalester College in Minnesota, told the Discovery Channel.
‘The most likely position to have intercourse is for the male behind the female, and on top of her, and from behind, any other position is unfathomable.’
So, that’s my offerings today! That should get us started! What’s on your reading and blogging list today?
















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