Monday Reads
Posted: September 12, 2011 Filed under: morning reads, We are so F'd | Tags: one term presidents, repeating the 1937 recession, Social Security 11 Comments
Good Morning!
Well, it’s yet another Monday. I’ve been busy checking out the jobs listings for next academic year and one Hawaii posting is looking pretty interesting right now. Anyway, I’ve got a little more writing on stuff to do before I go full force on that in a few weeks. I spent all weekend with my nose in numbers and didn’t even turn on the TV once. Let’s start with an academic post at VOXEU on “What caused the recession of 1937- 1938?” for a good start. It’s on monetary policy and gold. It shows how worrying about inflation when a recovery hasn’t really taken hold yet can create further problems. It also is an area that was investigated by economist Christine Romer who showed how tight fiscal policy (i.e. less government spending) and a tightening of monetary policy led to a recession within the Depression. Sounds familiar!
The recession of 1937-38 is sometimes called “the recession within the Depression.” It came at a time when the recovery from the Great Depression was far from complete and the unemployment rate was still very high. In fact, it was a disastrous setback to the recovery. Real GDP fell 11% and industrial production fell 32%, making it the third-worst US recession in the 20th century (after 1929-32 and 1920-21).
The recession is often attributed to a tightening of fiscal and monetary policy. Christina Romer (2009) and others have argued that it is relevant to today’s situation because it illustrates the dangers of a premature withdrawal of stimulus when the economy is still weak.
But the recession remains somewhat of a mystery because the two most frequently mentioned causes – the reduction in the fiscal deficit and the Federal Reserve’s decision to double reserve requirements – do not appear to have been powerful enough to generate a recession of the magnitude seen. For example, Romer (1992) herself has argued that “it would be very difficult” to attribute much of the decline in output to changes in fiscal policy.1 And most studies of the Fed’s doubling of reserve requirements – most recently, Calomiris et al (2011) – have concluded that it had little impact on banks because they held abundant excess reserves, which they did not seek to rebuild after the new requirements took effect.
If fiscal retrenchment and higher reserve requirements cannot fully explain the recession, then what can? There is no doubt that there was a severe monetary shock. As Figure 1 shows, the money supply (M2) grew at a consistent rate of about 12% a year from 1934 to 1936, but then suddenly stopped growing in early 1937 and even fell later in the year. The monetary shock, however, was not the Federal Reserve’s decision to increase reserve requirements, but the often overlooked Treasury Department decision to sterilise all gold inflows starting in December 1936.
Historian Julian Zelizer is wondering about Obama becoming a one-term President. Minx sent me this link and I found it interesting. Zelizer seems to think that the midterm election created a timid Obama. It seems like every where I turn I read an article on Obama plus one term president these days.
With waning approval ratings and a stagnant economy, the possibility that Mr. Obama will not be re-elected has entered the political bloodstream. Suddenly, the opposition party envisions a scenario in which its presidential candidate could defeat Mr. Obama in a referendum on his job performance. Mr. Obama needs to think hard about his own statement and consider what it takes to be a successful one-term president, in the light of history.
One-term presidents usually leave office with their parties divided, the economy in crisis, wars unresolved, approval ratings in the tank and a sullen public rejecting them. Becoming a one-term president means joining a gallery of dashed hopes and crushed ambitions. Among those who were elected for just one term were men who, like Mr. Obama, came to the White House with enormous promise.
Interestingly enough, it may just be the Republicans that defend Social Security in an effort to stop the momentum of Governor Goodhair. First up, a bit of ass-kicking on the subject from Mittens. Romney knows where to play the Social Security card; FLORIDA!
Mitt Romney didn’t wait long to begin his attack on Rick Perry over Social Security—his campaign is doing door-to-door distribution of a flier attacking Perry on the issue.
The flier, which a campagn spokesman said is being left at the doors of Florida GOP primary voters, portrays the GOP primary as a two-candidate race—“Two candidates. Only one will protect what’s important to you,” is the headline.
Of those two, it says, Perry is “reckless and wrong on Social Security.” The bold-face tagline: “Rick Perry: How can we trust anyone who wants to kill Social Security?”
Romney, it says, favors “entitlement reform,” but “wants to save Social Security.”
Perry has not directly advocated abolishing Social Security, although he has called it a “Ponzi scheme” and questioned whether it’s constitutional. In last week’s candidates debate at the Reagan Library debate, the two clashed on the issue, and Romney accused Perry of being “committed to abolishing Social Security. But during the debate, Perry promised emphatically that he wouldn’t do anything to affect the benefits of current retirees or those nearing retirement.
Romney isn’t paying attention to the nuances, however. In the nation’s biggest swing state, which happens to have the second-largest population of 65-plus residents, he clearly hopes to put Perry’s views into question.
Bachmann is not about to be left out of the situation. She’s got plans in the work to attack Goodhair on Social Security too.
“Bernie Madoff deals with Ponzi schemes, not the grandparents of America,” says a Bachmann adviser. “Clearly she feels differently about the value of Social Security than Gov. Perry does. She believes Social Security needs to be saved, that it’s an important safety net for Americans who have paid into it all their lives.”
Bachmann is in Florida for private meetings and to prepare for Monday night’s GOP debate in Tampa. It’s no secret the Bachmann camp was unhappy with the moderators of last Wednesday’s Republican debate at the Reagan Library, a debate which began as a Perry-Romney showdown and gave less time to other candidates. This time, in Tampa, it seems safe to predict that moderators will ask at least some other candidates whether they agree with Perry’s characterization of Social Security.
“Certainly not,” the adviser says. “She strongly disagrees with his position on that, and it’s clearly not something that’s going to sit well with the people of Florida and Iowa and South Carolina and many of the early states, where there is a large population of seniors who rely heavily on Social Security. For [Perry] to scare them is wrong.”
This should get interesting. Oh, a friend and I were having a conversation on Michelle and Marcus last night. I really though they should be part of a Tennessee Williams like play with John Goodman cast as Marcus. I think Goodman could stretch his chops enough to do a Blanche Dubois like character, don’t you?
Steve Pearlstein at WAPO has come up with the newest Republican slogan and I like it. “Repeal the 20th century”. Actually, it’s more like repeal everything prior to the civil war but what’s a few decades between friends?
It’s not just the 21st century they want to turn the clock back on — health-care reform, global warming and the financial regulations passed in the wake of the recent financial crises and accounting scandals.
These folks are actually talking about repealing the Clean Air Act, the Clean Water Act and the Environmental Protection Agency, created in 1970s.
They’re talking about abolishing Medicare and Medicaid, which passed in the 1960s, and Social Security, created in the 1930s.
They reject as thoroughly discredited all of Keynesian economics, including the efficacy of fiscal stimulus, preferring the budget-balancing economic policies that turned the 1929 stock market crash into the Great Depression.
They also reject the efficacy of monetary stimulus to fight recession, and give the strong impression they wouldn’t mind abolishing the Federal Reserve and putting the country back on the gold standard.
They refuse to embrace Darwin’s theory of evolution, which has been widely accepted since the Scopes Trial of the 1920s.
One of them is even talking about repealing the 16th and 17th amendments to the Constitution, allowing for a federal income tax and the direct election of senators — landmarks of the Progressive Era.
What’s next — repeal of quantum physics?
Cannonfire has an excellent analysis up of a NYT piece on Obama and covert activities. Cannon talks about Obama’s entire background as being spookier than a gothic novel, with Halloween coming up, you could read all the links to his past posts and get in the mood or read his summary at that link.
In 1981, Obama was allegedly an ill-to-do student at Occidental University in L.A. Yet he chose to make a covert trip to Pakistan — his first trip out of the country — at a time when the place was under martial law; the State Department was advising Americans not to travel to that part of the world. Pakistan was, of course, a key part of the covert resupply effort for the anti-Soviet effort in Afghanistan.
There, a local “diplomat” at the U.S. embassy (obviously CIA) set up a meeting with one of the most powerful players in Pakistan — Ahmadmian Soomro. We are given no explanation as to why a poor student would meet with the nation’s most powerful banker and deputy speaker of the Assembly.
At Oxy, Obama took classes in politics, and one of his likely professors (whom I have never named) has a “former” CIA background. (With the CIA, you always have to put the “former” in quotes.) This man was also close to Zbigniew Brzezinski — who later became a key adviser to and influence on Barack Obama.
At the time, young Obama had an Indonesian passport. It’s known that the Agency likes to recruit young men with multiple passports, which can aid in plausible deniability. (For example: Obama’s passport would not have a Pakistan stamp.)
Obama never seemed to have any trouble paying for his expensive university career. After college, he went to work for a firm which was later exposed as offering cover for CIA personnel oversees.
His mother, Ann Dunham, had a remarkably spooky background, working for AID and the Ford Foundation, both well-known for offering cover for the CIA. Although an alleged leftist, she married a man who was the key liaison between Mobil oil and the CIA-installed Suharto regime, which came to power on the backs of some 500,000 corpses. I think it is fair to posit that no real leftist would even have lunch with a guy like that. (Ann made her own mystery trip to Pakistan in 1981 — and was even learning Urdu!)
Pardon me while I get my shoe phone …
Okay, well, that’s a start to the morning for me. So, what’s on your reading and blogging list today?
Rick Perry’s Slip is Showing
Posted: September 10, 2011 Filed under: Social Security | Tags: Insurance, Ponzi Schemes, Risk Management, Risk mitigation, Social Security 9 Comments
I’m getting more than a little tired of right wingers who think they can redefine words, rewrite history, and basically lie through their teeth free from accountability. I agree with Paul Krugman who once said that if reactionaries–not conservatives because conservatives conserve institutions not destroy them–wanted to say the earth wasn’t round that the press would merely print up the headline saying there are differing opinions on the shape of the earth. The Republican Party is continuing to produce flat earthers. Rick Perry and Michelle Bachmann both appear to live in a world where they feel free to create their own facts and know that very few people will actually call them out on it. Today, I’m going to correct one of Governor Goodhair’s egregious and pejorative lies.
Perry stuck to a metaphor outlined in his “book” that couldn’t be more wrong during what Republicans called a debate on Monday. I rather thought it more like the Mad Hatter’s Tea Party but we won’t revisit that. I’ve done series of articles explaining Social Security in the past–link to first in series here— so I don’t want to revisit the entire system. The legacy debt, the growing number of retirees, increased life spans, and the shrinking US workforce are all issues but not issues that are insurmountable compared to the benefits derived from the program. What I want to do is tell you why the social security system is not a “Ponzi Scheme” with out reverting to the magical thinking typical of libertarians used in this article printed earlier this week by a rag called Reason that doesn’t seem to know what that word means.
It’s amazing to me that such a popular and successful program is still victim to right wing muddled and nonfactual information. Social Security is basically longevity insurance and was never designed to replace pensions or even private retirement savings. All three–albeit pensions are hard to come by these days–are an important part of being able to get through old age. Social Security works because the majority of people are placed into the system. This is important for two big economic reasons. The first is that any risk management (e.g. insurance) program is most cost effective with a huge risk pool. That’s basic insurance theory 101 or spread the risk around common sense theory.
The reason private insurance is so expensive is that unless the company is able to sort out all the ” bad” risks or charge exorbitantly for it, they will leave the social costs of the event of that “bad” risk to society (e.g. taxpayers). This is generally what corporations try to do these days. They won’t cover the overall risk. They cherry pick the low probably events or low probability people. Corporations are interested only in profits. They like to privatize profits and force risks and costs onto other folks if they can get away with it.
The second thing is that you get economies of scale (i.e. the process becomes cheapest) when you have a standard contract that’s applied in a standard way to the risk pool. Having a public insurance program–this would work for a health insurance or flood/hazard insurance–basically lets a country handle its risk in the most cost effective and efficient way. It takes care of the basic risk problem that would create social costs should the risk not be covered and the event occurs. A for profit scheme usually covers only people and things with minimal risk. A basic public offering lets the private sector create specialized programs to fill in gaps without leaving lots of people exposed to the worst risk.
I realize that not a lot of people know a lot about risk and insurance theory because it takes lots of math skills. Economic decisions under risk, information asymmetry, and moral hazard are probably the toughest areas to study other than derivatives which are another form of risk and return management in an advanced degree program. Hence, most people without advanced degrees don’t even get a whiff of the real stuff. I’m just hoping to give enough of the intuitive stuff here without going into all the models and theorems.
So, any insurance or risk management contract is very different from a Ponzi Scheme. Their pricing is generally based on the level of risk, the chance it will happen to the entity in question, and the potential amount of the loss. Also, once the event happens, everyone gets paid that experiences the event. How you pay for the plan doesn’t make something a Ponzi Scheme. Ponzi Schemes are fraudulent by definition and aren’t designed to pay anyone but the originator. They are also not anything resembling a risk management tool. They are an investment scheme set up to benefit the originators at the cost of new suckers. They are also voluntary. They prey on people who tend to not know or care to know about the details of a financial scheme and sucker them in by offering them high profits on small initial payments.
Here’s some information on Ponzi Schemes from the FBI. You can read about Bernie Madoff at the site as well as read up on typical red flags for Ponzi schemes. It’s not rocket science, really.
A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.
Social Security Trust funds are invested in Treasury Bills. Information on the funds holding is readily available and audited continually by all kinds of interested parties. Our FICA taxes do not disappear into a rabbit hole. Also, Social Security has a history of paying benefits to whoever has paid into it, so it has no features at all qualifying it as a Ponzi Scheme. The deal is that Wall Street wants its hands on that money and the fees resulting from investing it. Also, libertarians just think that people should be left to the wolves if they’re not clever enough to cover their asses. Unfortunately, they forget that social costs that implies. We have a right to protect our country from acts of reckless individuals. That includes corporations that ruin our public resources and individuals whose actions eventually cause costly problems. Damage done to society is sourced in more things than wars and bar fights. There are many ways to rob a bank.
So, here’s a Bloomberg article that’s a little more germane to the conversation at hand.
“Ponzi schemes are, by definition, fraud,” said Mitchell Zuckoff, author of “Ponzi’s Scheme: The True Story of a Financial Legend.”
“Social Security is above board,” he added. “We can argue about whether it’s a good system. But you can’t call it a fraud.”
…
Zuckoff says there’s a big difference between tricking innocents into making doomed investments and a social insurance program that has benefitted millions of Americans. In December 2010, 54 million Americans received either retirement or disability payments under the Social Security program.
The Wall Street Journal does a pretty good job of disabusing Governor Goodhair of his absurd notions of Ponzi schemes if he’d every bother to read it. I was glad to see that Mittens went after him. Even Ronald Reagan understood the importance of this form of public insurance.
Strictly speaking, the metaphor is misleading. A Ponzi scheme, named after Boston conman Charles Ponzi, is a fraudulent investment operation. In its essential design it’s a con. Investors don’t earn interest and instead are paid off by other dupes. Because these schemes require an ever-increasing number of new participants to pay off earlier investors, they inevitably collapse.
Social Security isn’t an individual investment plan. It’s a government insurance plan that offers seniors a predictable income. Retirees do indeed depend on future workers to pay their Social Security benefits, though unlike a Ponzi scheme, nobody pretends otherwise. The notion of this kind of inter-generational transfer is baked into the policy.
And unlike regular investments, participants in Social Security don’t own their accounts (although many conservatives would like to see such a change). If you die before you become eligible, your estate doesn’t get the money. If you live longer than average, you get more.
The deal is that fixing the program wouldn’t be difficult. The idea that people should have a minimum amount of insurance against events in their life isn’t radical at all. None of this is much different from telling people that drive that they have to have a minimum amount of coverage so that if they hurt some one in an accident they cause, they need to be able to cover the potential damage to the other parties. Again, when you spread the risk among a huge number of people and make the coverage and the claim procedures standard, the costs and the management become efficient. Also, it’s not really any kind of ‘socialism’ because these are financial contracts. It’s not like the government is usurping any kind of private property or factor of production. There’s actually state offered housing liability insurance in Louisiana for people that can’t get coverage from private companies. There’s lots of examples–like FEMA flood insurance–besides social security or medicare. Like all insurance programs and policies, they just need to be updated ever so often and people need to be reminded that this is basic, vanilla, minimal coverage and its unlikely to be the be-all and end-all to most people’s overall needs. It just exists to cover society from the worst risks that could eventually create extremely high social costs and havoc when the event occurs and the people impacted aren’t adequately covered.
Saturday Reads: Obama’s War on Old People, Solyndra-gate, and Violent Protest in Cairo
Posted: September 10, 2011 Filed under: Egypt, FBI raids, Federal Budget and Budget deficit, Foreign Affairs, MENA, morning reads, U.S. Economy, U.S. Politics | Tags: Egypt, green energy, Medicaid, medicare, Social Security, solar energy, Solyndra 13 Comments
Good Morning!!
Things are getting so bad for President Obama that I almost feel sorry for him. The reactions to his speech last night are still coming in, and they aren’t all that great. Sure Krugman tried to sound a little enthusiastic, but he ended up damning Obama’s jobs plan with faint praise.
O.K., about the Obama plan: It calls for about $200 billion in new spending — much of it on things we need in any case, like school repair, transportation networks, and avoiding teacher layoffs — and $240 billion in tax cuts. That may sound like a lot, but it actually isn’t. The lingering effects of the housing bust and the overhang of household debt from the bubble years are creating a roughly $1 trillion per year hole in the U.S. economy, and this plan — which wouldn’t deliver all its benefits in the first year — would fill only part of that hole. And it’s unclear, in particular, how effective the tax cuts would be at boosting spending.
Still, the plan would be a lot better than nothing, and some of its measures, which are specifically aimed at providing incentives for hiring, might produce relatively a large employment bang for the buck. As I said, it’s much bolder and better than I expected. President Obama’s hair may not be on fire, but it’s definitely smoking; clearly and gratifyingly, he does grasp how desperate the jobs situation is.
But his plan isn’t likely to become law, thanks to Republican opposition.
Robert Reich applauded the President’s “passion,” but not the plan itself. Reich’s reaction to the Jobs plan:
$450 billion sounds like a lot – and is more than I expected — but some of this merely extends current spending (unemployment benefits) and tax cuts (in Social Security taxes), so it doesn’t add to aggregate demand.
The net new boost to the economy is closer to $300 billion. That doesn’t approach even half the gap between what the economy is now producing and what it could produce at or near full employment.
And much that $300 billion is in the form of temporary tax cuts to individuals and companies. Some of these make sense — enlarging the Social Security tax cut, extending it to employers, and giving small businesses a tax holiday for new hires.
But temporary tax cuts haven’t proven to be particularly effective in stimulating new spending in times of economic stress. People tend to use them to pay off debts or increase savings. Companies use them to reduce costs, but they won’t make additional hires unless they expect additional sales – which won’t occur unless consumers increase their spending.
That leaves some $140 billion for infrastructure – improving outworn school buildings, roads, bridges, ports, and so on. And $35 billion to help cash-starved states avoid more layoffs teachers. Both good and important but still small relative to the overall need.
Just exactly what Dakinikat has been telling us forever. And when The New York Times talked to employers about the plan, most said the tax cuts and credits would be welcome but would not stimulate new hiring until there is consumer demand for their goods and services. Again, exactly what we’ve been hearing from Dakinikat all along.
The saddest article I have seen about Obama’s jobs speech is Dana Millbank’s column from yesterday: The irrelevancy of the Obama presidency. According to Millbank, Congressional Republicans treated the speech as “a big, fat joke.”
“You should pass this jobs plan right away!” Obama exhorted. Sens. Bob Corker (R-Tenn.) and Lindsey Graham (R-S.C.) chuckled.
“Warren Buffett pays a lower tax rate than his secretary — an outrage he has asked us to fix,” Obama went on. Widespread laughter broke out on the GOP side of the aisle.
“This isn’t political grandstanding,” Obama said. Rep. Paul Ryan (R-Wis.) guffawed.
“This isn’t class warfare,” Obama said. More hysterics on the right.
“We’ve identified over 500 [regulatory] reforms, which will save billions of dollars,” the president claimed. House Majority Leader Eric Cantor (R-Va.) and Whip Kevin McCarthy (R-Calif.) giggled.
And according to Millbank, Democrats weren’t all that thrilled either.
In fact, the empty seats were on the Democratic side. Democrats lumbered to their feet to give the president several standing ovations, but they struggled at times to demonstrate enthusiasm. When Obama proposed payroll tax cuts for small businesses, three Democrats stood to applaud. Summer jobs for disadvantaged youth brought six Democrats to their feet, and a tax credit for hiring the long-term unemployed produced 11 standees….Rep. Jesse Jackson (D-Ill.) stared at the ceiling. Rep. Peter Welch (D-Vt.) scanned the gallery. Rep. Jim Moran (D-Va.) was seen reading a newspaper.
Before the speech, Joe Biden actually discussed golf with John Boehner! I really think this President is done. I suppose a miracle could happen and something could stop the train wreck, but I can’t imagine what it would be.
Maybe Obama should read Joe Conason’s article about how Rick Perry tried to privatize Medicaid in Texas and ended up “wasting millions and enriching lobbyists and hedge funds. Oh wait — maybe not. I think that’s probably what Obama wants to do with Social Security and Medicare.
Another problem facing Obama is the Solyndra Energy bankruptcy and investigation. As I wrote a few days ago, Solyndra is a solar energy company which received $535 million in federal loans from Obama’s stimulus plan. Many observers, including the CBO, questioned whether the loan was too risky, but the White House may have intervened to make sure it happened. One of Obama’s biggest donors, George Kaiser owns more than 30% of Solyndra. For some time, Republicans in the House have been asking for an investigation of the circumstances surrounding the loan, especially since the company went bankrupt last week. Now, in a new development the FBI raided Solyndra’s headquarters and today visited the homes of its corporate officers.
An FBI raid on Solyndra Inc., a solar-panel maker that failed after receiving a $535 million loan guarantee from the U.S. Energy Department, may signal the escalation of a probe into the Obama administration’s clean- energy program.
Agents for Energy Department Inspector General Gregory Friedman, who has called the department’s clean-energy loan program lacking in “transparency and accountability,” joined in the search yesterday at the Fremont, California, headquarters of Solyndra, which filed for bankruptcy protection on Sept. 6.
Republicans critical of the program stepped up their attacks following the raid, and two House Democrats questioned the integrity of the company, indicating a potential political crisis for the president. A foundation headed by an Obama campaign contributor was a principal investor in Solyndra….
Friedman, a watchdog within the Energy Department, said in a March report that a lack of adequate documentation for loans “leaves the department open to criticism that it may have exposed the taxpayers to unacceptable risks associated with these borrowers.”
The Federal Bureau of Investigation continued its probe into solar-panel maker Solyndra LLC on Friday by visiting the homes of President and Chief Executive Brian Harrison, as well as former executives and co-founders Chris Gronet and J. Kelly Truman, according to two people familiar with the situation.
Solyndra, which filed for bankruptcy earlier this week, is the target of an investigation into whether executives knowingly misled the Department of Energy to secure a $527 million loan guarantee, The Wall Street Journal reported. On Thursday, the FBI seized documents and computers from Solyndra’s headquarters in Fremont, Calif.
Harrison’s home wasn’t searched on Friday, but he was questioned, according to one person with knowledge of the matter. Harrison, who joined the company in 2010, after the loan was awarded, didn’t respond to a request for comment.
Gronet, Solyndra’s former CEO, didn’t respond to requests for comment. Truman, a former senior vice president at Solyndra, is currently president and chief executive of energy storage developer Deeya Energy. A person answering the phone at Deeya said, “He is not taking phone calls.”
I guess it’s a good thing for Obama that we suddenly heard about a terror threat yesterday, huh?
In other, completely unrelated news, a protest by thousands of people in Cairo “turned violent” yesterday.
A demonstration that brought tens of thousands to this city’s central Tahrir Square turned violent on Friday, when thousands of people — led by a heavy contingent of soccer fans — tore down a protective wall around the Israeli Embassy, while others defaced the headquarters of the Egyptian Interior Ministry.
About 200 people were injured in clashes with the police at the Israeli Embassy and 31 were injured near the Interior Ministry, the Ministry of Health said late Friday night. Protesters apparently had scaled the walls of the Israeli Embassy to tear down its flag.
Mustafa el Sayed, 28, said he had been among about 20 protesters who broke into the embassy. He showed a reporter video from a cellphone, of protesters rummaging through papers and ransacking an office, and he said they had briefly beaten up an Israeli employee they found inside, before Egyptian soldiers stopped them. He said the soldiers removed the protesters from the building, but let them go free.
By 11:30 p.m., about 50 trucks had arrived with Egyptian riot police officers, who filled the surrounding streets with tear gas. Witnesses said that protesters had set a kiosk on fire in front of a security building near the embassy, and that the police had fired rubber bullets to disperse the crowd from both buildings. In addition, a fire broke out in the basement of the Interior Ministry, but it appeared to have been started from the inside and not by the protesters surrounding the building. The fire was in a room believed to store criminal records.
Tuesday Reads
Posted: August 2, 2011 Filed under: Barack Obama, children, Crime, Federal Budget and Budget deficit, Foreign Affairs, morning reads, Psychopaths in charge, Syria, the villagers, U.S. Economy, U.S. Politics, Violence against women, voodoo economics, We are so F'd | Tags: Amy Ahonen, Barack Obama, Bloomington, Celina Cass, Climate change, D.B. Cooper, FBI, Federal debt ceiling, Indiana, Indiana University, investors, jobs, Lauren Spierer, Leon Trotsky, Louie Gohmert, Mark Warner, Missing people, Social Security, Syria, Travis Forbes, U.S. Stocks, UN Security Council 33 Comments
Good Morning!! I have a few interesting reads for you today, and they aren’t all about the idiotic debt ceiling debate. I’m going to lead off with a few excellent blog posts about that idiocy, and then I’ll move on to something else.
First up, Scarecrow compares the movie Cowboys and Aliens to the events in DC: In Cowboys and Aliens, Humans Win; In Washington’s Zombies Vs. Pods, They Lose. In the movie, Scarecrow writes:
humans of all types realize they have to join together to defeat the rapacious creatures who are looting the planet and turning humans into zombies and pod people. There’s hope for our species!
Back in Washington, D.C. there are no heroes and no upbeat ending. Instead, the looting, muggings and beatings will continue until morale improves.
In our “real” world, there is a radical extremist group driven by zombies and zombie beliefs who successfully blackmail the nation into strangling its own economy. The supposedly “sane” group that is supposed to stop this madness has become cowardly and turned into mindless pod people, who assure the nation that the gutting of American government and essential services and safety nets won’t occur in one step but in several, whose outcome is locked in by an undemocratic Super Congress and the next debt limit blackmail in 2013.
It’s a terrific post.
On a more serious note, Emptywheel asks, Is Mark Warner the Designated Social Security Killer? It’s all about what may happen if the so-called “Super Congress” comes to be. Read it and weep.
At the New Yorker, John Cassidy argues that the debt ceiling bill is all smoke and mirrors.
In removing the immediate threat of a debt default, the agreement…signals that the U.S. government still satisfies the minimum standard of financial functionality: it pays its bills on time. That should be enough to head off an immediate downgrade in the nation’s credit rating, and it explains why Wall Street bounced at Monday’s opening bell.
Beyond that it is hard to see anything very positive about a deal in which President Obama finally persuaded the Republicans to accept a Republican plan. Putting on my ethicist cap, I agree with Bernie Sanders that the deal is wrongheaded and immoral. To be sure, America has a long-term fiscal challenge that needs to be confronted. But at a time when fourteen million Americans are unemployed, and many millions more have been forced to work just part-time, the government should be focussing on job growth rather than cutting the budget….
As I’ve said before, headlines such as “Democrats and Republicans agree on $2.4 trillion in spending cuts over 10 years” are virtually meaningless. The United States, like every other country, budgets on an annual basis. What really matters for the economy, and for the unemployed, is how much cash the federal government will spend in the remaining months of the 2011 fiscal year and in fiscal 2012, which begins October 1st. A pledge to cut spending in 2016, say, is just that: a pledge. Between now and then, we will have another bipartisan spending review (that’s also part of the deal), a Presidential election, and who knows how many budget battles. The actual 2016 spending outcome will almost certainly bear little relation to the figures in this agreement.
Also at the New Yorker, Hendrick Hertzberg has a funny piece about Louie Gohmert, looney Texas Republican Congressman quoting Communist Leon Trotsky. I don’t want to ruin it for you by pulling out a quote. It’s not long, so go read the whole thing.
Susie Madrak has a great post at Crooks and Liars: This Year We’ve Broken Or Tied 2,676 Heat Records – So Far. Think We Could Talk About Climate Change Yet? Be sure to check it out.
Do you realize how many people go missing in the U.S.? A lot. And most of them seem to be women and children. Here is a slide show of 64 people from the FBI’s kidnapped and missing persons list.
The little girl whose photo comes first is 11-year-old Celina Cass, from West Stewartstown, NH. Her body was found today in a river near her family home. Sadly, when a child disappears, a family is often responsible. In this case, I have a feeling her stepfather had something to do with Celina’s death. I hope I’m wrong. At least she was found fairly quickly.
Many missing people aren’t found for years, if at all. Indiana University student Lauren Spierer disappeared from Bloomington, Indiana on June 3. Despite intense searches by hundreds of volunteers and a large reward offered by her parents and IU, she has not been found. It looks like people whom Lauren thought were “friends” may have had something to do with her disappearance, because just about everyone who was with her before she went missing has lawyered up and isn’t talking to police.
A Denver woman, Amy Ahonen, disappeared without a trace a few weeks ago. Her car was found parked unlocked along the highway with her purse, ids, cell phone, and keys inside. What happened to her? No one knows and the police have stopped looking. It so happens that a budding serial killer was on the loose in the area at the time of her disappearance, but the police don’t seem to be making that connection.
There are many more stories like this breaking every day in this country. Why do we accept that women and children will disappear daily and in most cases, they will be found murdered and often raped?
Speaking of missing people, a legendary missing person has resurfaced in the news. From the LA Times: D.B. Cooper hijacking mystery is revived with ‘promising lead’
D.B. Cooper, the infamous airplane hijacker who vaulted into urban mythology by parachuting out of a jetliner over the Pacific Northwest with a $200,000 ransom, is back on the FBI’s radar screen.
Cooper, whose case remains the only unsolved airline hijacking in U.S. history, became the stuff of legend on the night of Nov. 24, 1971, when he jumped from a Boeing 727 into the skies between Portland, Ore., and Seattle. He disappeared with the ransom he extorted — 10,000 $20 bills.
The case has remained open, but the trail has been cold despite hundreds of tips, thousands of theories and dozens of breakthroughs in scientific investigation. Now the FBI, which has previously said that Cooper is likely dead, is looking at fresh evidence, according to weekend reports in the media in Seattle, the epicenter of the story that seemingly can never die.
From the Seattle Post-Intelligencer:
The man investigated as a suspect in the D.B. Cooper case – the nation’s only unsolved commercial airplane hijacking – has been dead for about 10 years, and a forensic check didn’t find fingerprints on an item that belonged him, an FBI spokesman told seattlepi.com Monday.
“There are also other leads we’re pursuing,” agent Fred Gutt said. “Some of the other names have been out in the public, some of the names have not come out.”
The name of a man not previously investigated was given to the FBI nearly a year ago by a law enforcement colleague, and an item that belongs to him was sent for fingerprint work at the agency’s Quantico, Va., forensic lab, agents told seattlepi.com.
“The nature of the material was not good for prints,” Gutt said.
He added agents are obtaining other items that may have the suspect’s fingerprints in hopes of matching them with prints taken from the Northwest Orient plane after Cooper jumped the night of Nov. 24, 1971.
The situation in Syria is escalating. There has been a great deal of violence there for some time, and it is not getting the same attention that Egypt, Iran, and Libya have gotten. But now the UN Security Council plans to take up the issue.
Reacting to new bloodshed in Syria, European powers relaunched a dormant draft U.N. resolution to condemn Damascus for its crackdown on protesters, circulating a revised text to the Security Council at a meeting on Monday.
Following the hour-long closed-door meeting, several diplomats said that after months of deadlock over Syria in the council, the fresh violence appeared to be pushing the divided members towards some form of reaction.
But envoys disagreed over whether the 15-nation body should adopt the Western-backed draft resolution or negotiate a less binding statement.
Germany requested the meeting after human rights groups said Syrian troops killed 80 people on Sunday when they stormed the city of Hama to crush protests amid a five-month-old uprising against President Bashar al-Assad.
More than 1600 people have been killed during the Syrian uprising.
You have to wonder if President Barack Obama ever rereads his speeches.
At the State Department last May, the president spoke at length of democratization in the Middle East. He chose his words carefully, dropping caveats and provisos. But Obama also bluntly declared that, “it will be the policy of the United States to promote reform across the region, and to support transitions to democracy.” He justified the intervention in Libya by recalling that “we saw the prospect of imminent massacre … Had we not acted along with our NATO allies and regional coalition partners, thousands would have been killed.”
Yet precisely such sordid outcomes have come to pass, not in Libya but during the four-month uprising against the regime of President Bashar al-Assad in Syria. Around 1,600 people are believed to have been killed, not mentioning some 3,000 disappeared, many of them presumed dead. Massacres have proliferated, and on Sunday, the eve of the holy month of Ramadan, the Syrian army entered the city of Hama, which had effectively escaped from government writ weeks ago.
Throughout, the White House has painstakingly avoided demanding that Assad step down, saying only that he must lead a transition to democracy or get out of the way. The Syrian dictator has, of course, done neither.
I’ll end with just one more link on the debt deal that Dakinikat sent me.
Reuters analysis – Debt deal unlikely to boost investor confidence
Rather than a relief rally, U.S. stocks ended modestly lower on Monday as ugly economic data and some lingering concerns about whether the deal would get through Congress dominated trading. But even when the House of Representatives voted to pass the plan late in the day there was little reaction from U.S. stock index futures.
The deal agreed to by Republican and Democratic leaders will raise the government’s borrowing ceiling while cutting spending by at least $2.1 trillion over 10 years. All of the burden could fall on spending cuts with no guarantee of steps to lift tax revenues.
Rather than perceiving it as a meaningful effort at tackling the United States’ huge debt problem, investors worried about the impact of austerity on an economy already hit by souring business and consumer confidence.
Plans for such a significant fiscal retrenchment, even though most of the impact will be in the latter years of the program, come at a vulnerable time for the world economy. Recession risks are rising in the United States, the European economy remains entwined in its own debt crisis, and China’s supercharged economy could slow.
“Risk markets may rally temporarily, but until economic growth and job creation is addressed, there can be no sustained rally,” Bill Gross, the co-chief investment officer of PIMCO, which manages more than $1.2 trillion, said in an interview.
Will Washington ever wake up to reality? I’m afraid they (and we) will have to hit bottom first. They are like alcoholics, except they are drunk on greed and power. So on that note, what are you reading and blogging about today?
peej
Carissa
bostonboomer
dakinikat
ecocatwoman
mablue2
Mama Lopez
peggysue22
quixote
skydancingguestblogger
Mona (aka Wonk the Vote)
Sky Dancing 
Recent Comments