The Northeast Snowstorm

I am currently sitting in a Starbucks using their free wi-fi.  We have been without power for 48 hours and counting, and between struggling to keep warm and cleaning up the mess, this is my first contact with the outside world for some time.  Glad...sort of...to see that things have continued as usual in my absence....

Kids Vote?

Jonathan Bernstein has a fascinating post regarding whether or not kids should be allowed to vote.  Fascinating because it raises a question I had never before thought about and addresses it thoughtfully.

This post got me to thinking about something that, it seems to me, is related to this question - namely, that when we re-district and re-assign representatives among our citizens, we do so on the basis of total population, including those who are not allowed to vote.  Children and prison inmates are included in those population totals, even if they are not allowed to vote.  So in a sense, our elected representatives are apportioned on the basis of total population even if that populations includes a significant number of non-voters.

So the idea of allowing children to vote (and having parents exercise the vote on their behalf until they reach a certain age) has a certain ring of legitimacy to me.  But I would have to think about it more before I came to a definite conclusion.

Any thoughts?

More on Ryan and Right-Wing Whining

David Adkins is the latest to weigh in, but look at the Digby and Krugman posts as well.

And unfortunately this is so true -

After trying to take the bread off the tables of America's seniors while doling out big tax breaks to billionaires, Paul Ryan is whining about President Obama's harsh rhetoric. And sadly, his whine will register with a lot of comfortable "moderates" who value "civility of discourse" over actually telling the truth or getting anything done.

Digby said it well yesterday:

And Lord help the poor Democrat who even timidly attempts to speak to those grievances --- he or she is instantly attacked for "dividing the American people," (unlike that congressman who giggled and smirked about "driving the liberals crazy.") It's an extremely successful gambit that's deployed over and over again because liberals and establishment types invariably take the bait. For reasons best left to sociologists and psychologists, the mere hint from a right winger that a liberal might be divisive makes them run for cover.

Goodness knows I have more Democrats like that in my own local circles than I can shake a stick at. It's easy for progressives online to get sucked into an echo chamber in which Democrats are fleeing Obama by the millions because of his lack of progressivism. But the reality is that there are also millions of people in this country who would otherwise vote Democratic on policy, but happily vote for a "nice" Republican if the Democrat seemed too "mean."

It's not just that Republicans have a lot of moneyed interests on their side. It's also that the Republican base is simply much more politically belligerent than the Democratic base. In a perfect world, the entire Democratic voting bloc would laugh in Ryan's whining face. In this world, sadly, a great many of them will listen with a "sympathetic" ear and an "open mind."

Why Does the Media Love Paul Ryan?

The guy really lives in a fantasy land.  Jonathan Chait has a great takedown of his speech today at the Heritage Foundation.  Read it.

ht-Kevin Drum

Bacon's Rebellion

A very interesting post by Eric Loomis on the origins of Bacon's rebellion and how it impacted the development of slave labor in colonial Virginia.

Recently I read a book about the pre-civil years that spoke in terms of a conflict over the issue of whether the country would be a "slave labor" country or a "free labor" country.  I'll be honest, I never really thought in terms of abolition being an economic issue for working class whites, but clearly this was one of the motivations behind the abolition movement.

Even more interesting are some of the comments to the post, many of which deal with how little students learn about these kinds of events in contemporary American history classes.  Once again, I recommend "Lies My Teacher Told Me" to get a good basic re-learning of American History.

I especially liked this comment:

I have a friend whose theory is that right after Sputnik we put a lot of money into education. Then the sixties happened. Conservatives have vowed never to let that happen again.

As a Trustee on my local school board, all I can say is "Ain't it the truth...."

The Public Health Effects of the Recession

Bryce Covert discusses recent research on how foreclosures affect physical and mental health.

I am sure that the same people who scream about "moral hazard" will respond to this by saying, in effect, "too bad, losers."

Leona Helmsley Redux

Here is another attempt to close a loophole biting the dust.

Employees have payroll and income taxes withheld from their paychecks.  Customers have sales taxes charged on their bills.  But heaven forbid you withhold taxes on payments made to businesses and investors.

Back in 1982, the law enacting the first Reagan tax hike (to offset the cuts made in 1981) included a provision for withholding taxes on interest and dividends (there is a inside great story that goes along with this if anyone is interested) - a provision that never went into effect and that was repealed six months later.  Seems that wealthy investors don't like having taxes withheld from them.

Apparently, neither do wealthy defense contractors.

Leona Helmsley:  "Only little people pay taxes."

Ain't it the truth....

The Vatican and the Economy

The Vatican's Report: "Toward's Reforming the International Financial and Monetary Systems."

I could never understand how any good Christian - be him or her Catholic or otherwise - could believe in an unfettered free market system based on the corporate model.

The press is playing this up as Vatican support for the protests sprouting all over the world.  Here is the New York Times and Guardian stories about the report.

Economic justice has been central to Christian doctrine since the Sermon on the Mount, yet something that has not really been focused upon in recent decades.  Remember Liberation Theology, which was denounced as godless Marxism by the right wing in the 1980s?

In my mind, the big question is whether this is a torch that will be picked up by rank and file bishops and priests.  If the Catholic clergy spent half the energy on this issue as they do on human reproduction, it would be a great boost toward freeing up our economy.

Michelle Malkin's Vibrator

Please, isn't there anything more important to get angry about?

They do have a thing about female sexuality tho....

A Good Sign [Updated]

We need more and more of these kinds of people to recognize that protecting the country and protecting the 1% can be two very different things - especially when it comes to "protecting" the 1% from the remaining 99%.  Now if only some NYPD cops would join in as well....

UPDATE:  Well, it's not the NYPD, but it's a start....

Global Warming Skeptic Changes His Mind

Or, as Atrios says, "So sorry for wasting everybody's time and helping to destroy the world."

This issue has been with us for over thirty years and so far next to nothing has been done about it.  And at the same time, I'm still seeing commercials on a regular basis touting the benefits of "clean coal."

Idiots.

Big Money Politics

The juxtaposition of these two stories in Salon this morning was more than I could stand.

The first relates the story of a young mother running for school board in Colorado.  Her opponent is an investment banker who is receiving large donations from corporate donors as well as an appearance by former President George W. Bush.  For a school board election!

The second relates how members of the "supercommittee" - the committee of six democrats and six republicans charged with coming up with a deficit reduction plan - are raking in donations from big corporate donors.

That's all you need to know about what's wrong with politics in this country.

Our Screwed-up Tax System

From Angry Bear, a great illustration of all that is wrong with our tax system.

I actually think that companies should be able to deduct dividends.  It would eliminate the double tax issue, as well as the perverse incentive for companies to borrow instead of raising equity capital.  Of course, it would be a great incentive for companies to distribute more to their shareholders as well.  Right now they are hoarding literally trillions in cash, and it would probably help to get this money back into the economy.

BofA's Derivatives

This story is all over the business news services and blogs, but as far as I can see hasn't been picked up by the mainstream press.  From Bloomberg News:

Bank of America Corp., hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation.

The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren't authorized to speak publicly.  The Fed has signaled that it favors moving the derivatives to give relief to the bank holder company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people.  The bank doesn't believe regulatory approval is needed, said people with knowledge of its position.

This is being viewed, rightly so, as a shift of the risk of loss on these derivatives from the counterparties and the stockholders of BofA to the government.  It should be noted that, because of a change in the law that took place in 2005, if the bank and its assets are used to pay its creditors, the derivatives counterparties get paid ahead of the banks depositors.  Thus, this greatly increases the exposure of the FDIC - and thus of taxpayers - should BofA fail.

The fact that this is being permitted is just horrendous.  But par for the course - heads the bank and its shareholders win, tails the taxpayers lose....

More from Nakedcapitalism and The Big Picture.

Why Does the Business Community Hate Obama?

Ezra Klein has an interesting post up about the report of the Immelt Committee, which was released yesterday:

Recently, I wrote about attending a conference of medical-industry types in which Jeffrey Immelt, CEO of General Electric and chairman of the President’s Council on Jobs and Competitiveness, spoke to an audience made up of his Obama-skeptic colleagues. Immelt, somewhat surprisingly, made no move to defend the president who appointed him. “Our job,” he told the assembled crowd, “is to make our ideas his ideas.”

The Council on Jobs and Competitiveness is the Obama administration’s answer to the charge that it doesn’t listen to the business community. It includes not just Immelt but executives from Xerox, DuPont, American Express, Kleiner Perkins Caufield & Byers, TIAA-CREF, Southwest Airlines, Procter & Gamble, Boeing, Intel, Citigroup, Eastman Kodak, Facebook, Comcast, BNSF Railway and UBS Investment Bank. And today it released its interim report (PDF).

This is, in other words, the big moment: This is the business community trying to make its ideas President Obama’s ideas. But here’s the thing: Its ideas don’t seem to differ much from Obama’s ideas.

Which leads to an interesting questions - if in fact they see eye to eye on so much, why is the relationship so antagonistic?  Klein cites Matthew Yglesias:

Another possibility is that the gulf between the business community and the White House is more cultural and personal than it is substantive. Matt Yglesias had an interesting take on this last week. “A lot of what you have is . . . a kind of bitter feud between businessmen and the kids they went to college with who didn’t go on to become businessmen. What did they do instead? They became teachers or doctors or nurses or professors or lawyers or scientists or nonprofit workers. . . . The business coalition sees the service coalition as composed of useless moochers, and the service coalition sees the business coalition as greedy bastards.”

“If it were merely a clash of objective interests, it really wouldn’t be much of a clash,” Yglesias wrote. “A healthy business environment needs schools and hospitals and public infrastructure to backstop it, and nobody is made happy by a business cycle downturn. There’s tension at the margin, but it’s not a zero-sum world. Layered on top is, I think, a raw level of gut-level dislike — both kinds of people think the other kind of people are clueless about what really matters in life.”

Increasingly, I’m coming to agree with that analysis.

So am I.

Why Economists?

You may have noticed that a disproportionate number of my posts refer to blogs and columns by economists or about the economy.  I thought it might be useful to explain why that is.

I like to think that I can distill my political philosophy into several key principles.  One of them is that money and freedom are interdependent - that is to so, the amount of "freedom" an individual has is a direct function his or her wealth.  There are probably a lot of people that dispute this, but I think that anyone who seriously studies the history of societies will ultimately reach this conclusion.  [I should also point out that as populations grows and technology modernizes, the relationship between money and freedom becomes stronger.  For example, two centuries ago an individual in America could migrate West and stake a claim to a homestead and, even if making a subsistence living, could exercise a great deal of freedom over his life.  It is impossible to imagine anyone having that ability today.]

Thus, as a person who strongly believes in the dignity of the individual and the "inalienable rights" of life, liberty and the pursuit of happiness, how society's wealth is distributed among its citizens is key, because wealth determines the extent to which individuals will be able to exercise these inalienable rights.

By the time I graduated from college in 1981, I perceived the 20th century as a time of the greatest expansion of freedom in history - with great gains in the rights of women and minorities accompanied by a great expansion of the "middle class," providing large numbers of working class Americans with the ability to exercise their freedoms and make a better future for their children in ways that were really unprecedented in human history.

And when I see stories like this one, showing how wealth inequality has grown substantially over the last three decades, I see the ability of ordinary citizens to exercise their rights to liberty and the pursuit of happiness declining.  Something happened beginning three decades ago to reverse the trend of the prior century of American history towards the expansion of the liberties of our citizens, and the consequence of this has been devastating to millions of them.

We need to reverse this trend, and set us back on the course of expanding freedoms for all of our citizens.

Best Steve Jobs Obituary

I love the Onion.  I don't read it nearly often enough....

Just Wow

Susie Madrak on the NYPD's "Paid Detail Unit."

You know, up until now I had no idea this program actually existed.  Now that I know that it does, I'm appalled.

On second thought, I shouldn't be.  It's been apparent to me that in the last 30 years almost all of our military actions have been taken in the name of some vague notion of "national interest," which generally means the interests of our business elite in exploiting the resources of weaker countries.  Why should our domestic security apparatus be any different?

It Was a Stupid Idea to Begin With

From Steve Benen, Washington is apparently starting to get worried that the "super-committee" won't reach an agreement.  You remember, the committee that was born out of the compromise over raising the debt ceiling?  The one that if they fail to reach agreement all kinds of dire spending cuts will take effect?

Remember all those predictions that said the super-committee would fail because Republicans would never go for a compromise that included tax increases on the wealthy?  Well, as it turns out, the super-committee is failing because Republicans refuse to consider a compromise that includes tax increases on the wealthy.  Try not to be surprised.

Not to worry though - whether the dire consequences will actually kick in remains to be seen:

The supposed across-the-coard cuts aren't slated to go into effect until January 1, 2013.  Put more simply: They might not ever go into effect.

The automatic cuts - known as sequestration - are often discussed in Washington as if they're certain, an inevitability that Congress won't be able to prevent.  But on the same day those cuts would go into effect, the Bush tax rates, which President Obama extended for two years, are set to expire, leading to an "automatic" tax hike that is treated in Washinton as anything but inevitable.... A lame duck Congress would have two months after the 2012 election to stave off the expiration of both that tax policy and the super committee's "automatic" cuts.

Sounds like so much political posturing designed mostly to kick the can until after the next presidential election.  Anyone surprised by this?

Our Democratic Leaders

This is the sort of thing that drives me insane.

Oh, my.  Jeff Immelt, who President Obama for some reason appointed to head his job creation panel, insists that what's good for GE is good for America:

I want you to root for me. Look, every one in Germany roots for Siemens, everyone in Japan roots for Toshiba, everyone in China roots for China South Rail, I want you to say, win GE.

I think this notion that it’s the population of the US against big companies is just wrong.

Wow.  First, the macro picture.  Here are corporate profits versus employee compensation, both measured as index numbers with the 2001 business cycle peak = 100: 

We've all grown together!  Or, actually, not. 

Also, GE isn't in any important sense an "American" company.  More than half its employees are overseas.  I'm sure Immelt would claim that this is just what he needs to do to compete; but in that case, he can't have it both ways and also demand that we cheer for GE as an American champion. 

Awesome cluelessness.  And this is the head of a job-creation task force in a Democratic administration?  

 I remember when Immelt was appointed, wondering what Obama was thinking.  Immelt isn't the only one who's clueless.

Here we go again....

When the banks start hurting, governments start bailing them out:

The governments rushed to support Dexia after it became the first bank to gall victim to the two-year-old eurozone debt crisis, as a credit crunch denied it access to wholesale funds and sent its shares down 42pc last week.

 And the markets rebounded today on this announcement as well:

 "We are determined to do everything necessary to ensure the recapitalization of Europe's banks," Chancellor Angela Merkel said in Berlin after meeting with President Nicolas Sarkozy of France.

As usual, the solution to financial crises is to have taxpayers give rich bankers more free money. 

I’m fairly certain that, should we find a repeat of the financial crisis we had three years ago, American taxpayers would not stand for another round of bank bailouts like we had back then.  That is probably why our Treasury Secretary has practically been begging European leaders to do something to prevent an impending crisis:

Speaking at the Washington Ideas Forum in the downtown Newseum, Geithner mixed praise and criticism of Europe as he continued an ongoing effort to push its policymakers toward a more forceful approach toward dealing with debt woes. 

"Europe matters a lot to us.  We don't want to see Europe weakened by a protracted crisis.  Europe understands that." he said but left no doubt at his impatience with progress so far.

"They are moving too slowly," Geithner said.  "Europe is a large part of the global economy, and a severe crisis in Europe would be damaging" around the world. 

 If you wonder whether  “Occupy Wall Street” is spreading to Europe as well, here is your answer:

            

 Stay tuned – this could get very interesting.

Elizabeth Warren for President

Here is the video everyone is talking about:

Look, what she says here about the social contract is so basic it shouldn't need to be said.  But it does, over and over and over again, especially because our leaders have so obviously forgotten this.

Especially, unfortunately, our President, who jettisoned her....