Me llamo Rico. ¿Qué quieres tomar?
Filed under: General | 118 Comments »
Marshall Auerback
I just came across a new (to me) blog this morning: New Deal 2.0: A Project of the Franklin and Eleanor Roosevelt Institute. The latest post is by Marshall Auerback, an investment manager and consultant. Auerback suggests that the administration’s current economic policies are going to lead to disaster.
State and local governments have been forced into draconian budget cuts, firing workers who are among the most reliable in making their mortgage payments–when they have jobs: firemen, policemen, teachers, civil servants.
Yet the Obama administration won’t spend even a small fraction of what it has wasted on the banks to cover state shortfalls. The guarantee of $5.5bn in short term notes for California was deemed to be fiscally irresponsible, yet hundreds of billions have already been allocated to the likes of Citigroup, AIG, and Goldman Sachs, all of whom have already beefed up salaries and bonuses as they emerge from the embrace of the federal government.
In addition, he points out that special government policies toward banks is doing nothing to force banks to start lending to consumers again.
Banks are also benefiting from lending programs that effectively allow them to borrow at zero and reinvest in Treasuries at around 3%. A bank doesn’t have to do anything to make money. The banks’ return on equity is going to be very good. They are going to be able to restore their finances.
While this is good for banks, is it good for anyone else? The problem is the government’s “free money” program means banks have little or no incentive to do any actual lending. Combined with rising unemployment and the ongoing housing crisis, this means any recovery is likely to be muted, at best, especially given the ongoing weakness in the real estate market. Growing income inequality will likely be perpetuated and exacerbated with all of the resultant social strains. And in the meantime, the siren songs will grow that we are a nation addicted to debt, deficit spending our way to economic disaster.
According to Auerback, what we need now is “robust stimulus.” The government must create money and spend it in order to increase demand. The only other choice he says it to allow “debt deflation rip,” meaning basically that whatever consumers are using to secure loans (e.g., their homes) will continue to decrease in value so that they own much more than the property is worth.
Statements by President Obama that “we are out of money” do not help, because they imply that there is an operational constraint on fiscal policy, beyond which the government dare not go. They feed the prevailing paradigm about “debt sustainability” and “national solvency” and thereby work at cross purposes. What President Obama, Fed Chairman Bernanke, and Treasury Secretary Geithner must say is that until the government deficit spending and the improvement in the trade balance exceeds desired net private sector saving, we can create all the money we want – it simply will not be enough to driver final product prices higher unless and until we succeed in restoring aggregate demand to sufficiently high credible levels where a self-sustaining economic recovery can take place….
I have to wonder why TARP, which is essentially a purchase of financial assets (and, hence, better left in the hands of the Fed, as Treasury is supposed to buy ‘real things’) was placed in the hands of Treasury. It’s almost as if this was planned deliberately so as to provide the anti-government folks with a cudgel with which to beat back supporters of activist government.
No kidding. That’s what we at The Confluence have been saying for quite awhile now. So what does Auerback think is coming if the Obama administration doesn’t shift course soon?
[T]he Obama administration[‘s]….actions…suggest that everything is ad hoc and that they are operating out of their depth, in effect continuing the same policies of the Bush/Paulson period, but on a much greater scale.
Ironically, this ultimately will also prove highly inimical to the interests of finance itself. When most of the home owning voters cannot pay their major debt or have no incentive to pay their mortgage debt, there will either be a debtors revolt that society will sanction or there will be a bailout of such a magnitude that mega moral hazard will affect private lending forever. Once these things happen, you will no longer have the social rules for private risk based lending. In other words, financial markets will be unlike anything ever seen before in private economies. Is this really what Wall Street wants, let alone American society as a whole?
This is a long article, but it’s well worth reading. And I’ve bookmarked New Deal 2.0 for future reference as well. Will the streets of U.S. cities start looking like Iran in coming years?
Add to: Facebook | Digg | Del.icio.us | Stumbleupon | Reddit | Blinklist | Twitter | Technorati | Furl | Newsvine
Filed under: General | 23 Comments »
Senator Max Baucus
The New York Times had this to say about Max Baucus:
He conceded that it was a mistake to rule out a fully government-run health system, or a “single-payer plan,” not because he supports it but because doing so alienated a large, vocal constituency and left Mr. Obama’s proposal of a public health plan to compete with private insurers as the most liberal position.
Matt Yglesias doesn’t get it:
I thin that’s right. Framing effects are important in politics. The public-private competition is supposed to be a compromise between the pristine vision of single-payer and the desire of private insurers not to be put out of business. It creates a situation in which insurers are challenged to prove that single-payer advocates are wrong, rather than simply assert it. But with no single-payer plan in the mix, this gets lost, and the compromise becomes the leftmost anchor of the debate. A single-payer plan couldn’t possibly have passed, but I think having hearings on single-payer and having one committee draft a serious single-payer bill that gets a serious CBO score would have been a useful exercise. In particular, it would have focused the mind on the costs involved in rejecting this option.
Neither does Duncan Black:
I don’t know why the Dems never learn this lesson. If you start with the compromise position, you will and up compromising on that. They prefer a strategy of pulling together a coalition and getting them all to buy in on something they can agree with, but than that of course gets watered down into crap no one actually supports.
Nor does Paradox:
The entire premise of the Yglesias post is bullshit—give me a break, that Republican-wannabe Baucus didn’t somehow have the magical ability to give up on single payer from the git-go, hell, single payer was given up on in stupid weakness because of this moron Baucus—but the point still vividly stands that giving up on single payer before we ever started was a terrible, terrible mistake.
I do think the precise mechanics of this flaming fuckup would good to know for the liberal community, accountability is a good thing. The first I ever heard of it was last year in Texas at Netroots Nation from Ezra Klein, who actually had the youthfully obnoxious arrogance to state having single payer as a goal “was a naïve pursuit of perfection.” Well, Ezra, just where did you learn that? Who gave you that strategy to push that was and is so stupid? It’s not just me, your old companeros Atrios and Yglesias say it too. Well? I suppose graduation to the establishment big time means the badass Ezra can ignore the lowly blogger question, but we’ll see.
The obnoxious sneering from a hopelessly wrong fool isn’t the point, it’s that even a nobody from nowhere like me knows never to give up crucial goals in negotiation before you even start, so how come professional politicians like Democrats don’t know?
Bob Somerby gets it:
Are we all Professor Rosen now? Having asked, let us offer a fairly obvious speculation:
In all likelihood, Baucus took single-payer off the table for a very good reason—because he isn’t trying to create a progressive health reform package. His statement to the Times was pure BS. After all, Baucus is a corporate man (data below). He wants health reform near the “center.”
After the fact, he was covering his keister for those on the left. Our other professor bought it.
Yglesias penned a thoughtful piece about the meaning of Baucus’ move. He too failed to note an obvious possibility: When Baucus voiced his regrets to the Times, it was a big silly con! (emphasis added)
From Physicians for a National Health Program:
Here’s why Baucus is not doing the peoples business:
According to OpenSecrets.org over his career he has taken donations from:
The Insurance Industry: $1,170,313
Health Professionals $1,016,276
Pharmaceuticals/Health Products Industry $734,605
Hospitals/Nursing Homes $541,891
Health Services/HMOs $439,700
That is a grand total of $3,902,785. Can we trust Baucus to put aside the profits of the industries that have kept him in the senate? Will he put the people’s necessities ahead of the profits of his contributors? Baucus has shown his bias and should be removed from leading the health care reform effort by the Democratic Party leadership.
In 2008 Baucus had virtually no challenger in Montana. A little-known Republican was on the ballot, Baucus won with 73% of the vote. But, Baucus sought big donations from big business anyway. He used his connections to corporations with business before his committee to raise an immense campaign fund of more than $11 million. In 2008, 91% of his donations come from individuals living outside of Montana, which is why he is more the “Senator for K Street” then the Senator for Montana. Corporate health profiteers who invested in Baucus will now benefit from his stewardship over health care reform. His 2008 donations from health care profiteers included:
Insurance $592,185
Health Professionals $537,141
Pharmaceuticals/Health Products $524,813
Health Services/HMOs $364,500
Hospitals/Nursing Homes $332,826
That is $1,826,652 Baucus took from industries who he can now make wealthier by deforming health care reform.
Do you get it?
Not only are we not gonna get single-payer out of this motley crew, we’re not even gonna get a true “public option.” All we’re gonna get is a Rube Goldbergesque clusterfuck that guarantees the health care leeches will continue to grow fat on our blood.
Meanwhile some of the allegedly brightest minds in Left Blogistan will be bleating about the Democrats’ “bad strategy.” The problem is that it isn’t a bad strategy – it is a very effective strategy. The Democratic leadership (Obama, Pelosi, Reid and Baucus et. al) are accomplishing their goal – to avoid real health care reform at all cost.
We know the Republicans aren’t on our side, but the Democrats pretend to be our friends while selling us down the river. They are the political equivalent of the Washington Generals. They get paid to put on a show and lose.
Nothing will change until the lefty blogosphere quits making excuses for them
UPDATE:
The point is that if you’re making big policy changes, the final form of the policy has to be good enough to do the job. You might think that half a loaf is always better than none — but it isn’t if the failure of half-measures ends up discrediting your whole policy approach.
Which brings us back to health care. It would be a crushing blow to progressive hopes if Mr. Obama doesn’t succeed in getting some form of universal care through Congress. But even so, reform isn’t worth having if you can only get it on terms so compromised that it’s doomed to fail.
Add to: Facebook | Digg | Del.icio.us | Stumbleupon | Reddit | Blinklist | Twitter | Technorati | Furl | Newsvine
Filed under: Democratic Party, General, Health Care Reform | Tagged: Health Care Reform, Max Baucus | 91 Comments »
UPDATE: Michael Jackson died after a Demerol Injection (via Gawker).
I know I’ve been out of the loop here at the Confluence, but I came here because this is home to me on the intertubez.
I was 5 years old when Elvis Presley died. I knew him very little. My mom had a couple of his records and in her broken English she’d sing to his “Suspicious Ways.” When Elvis died, I lived on Broomfield St. in Lawrence, Massachusetts and I remember it like yesterday: I was playing with the neighborhood kids outside in the street. It was a hot day and my dad had just come home from doing a double shift, and had to go back to work at 11pm – so like every 70s kid, we left the house to go play outside.
Then a huge scream came from one of our neighbor’s house. “Elvis is dead!”
Now in my 30s, I realize the great impact Elvis Presley had to the Baby Boomer generation. He was the KING. Who can forget Elvis in his famous performances gyrating and killing it onstage, to then softly coo into a microphone if you “were lonsesome tonight” – the man was an ARTIST.
Technically speaking, Michael Jackson (like Madonna and Prince) are Baby Boomers, but they were adults in the 1980s and through their brilliance, became symbols of the 80s, the Generation X decade.
And Michael died.
We lost Farrah Fawcett too. I can remember my Charlie’s Angels lunchbox, bubblegum cards and playing with my cousin. I was Kelly, she was Jill Monroe. And a few days from now, we will commemorate the deaths of Janis Joplin, Jimi Hendrix and Jim Morrison – symbols of the 60s – and who died sudden deaths.
Regardless of his personal life, Michael Jackson made SUCH an impact in mine, like in millions of people across the globe. He was an ambassador of peace and American ingenuity, creativity and brilliance.
I remember when I was about 6-7 yrs old, my older cousin who was the disco dancer of the family, taught me to dance the hustle & we danced in front of the family to “Dancing Machine” from the Jackson 5. Then when my parents divorced, Michael’s “Off the Wall” song saved me from sadness. We do have to live life Off the Wall at times to get by the hard times.
So here’s my video montage – there are many songs that I love that I can’t find good enough Youtubing-ness to post here. But Michael, despite it all, THANK YOU for the music and for the moments you created. Thank you for inspiring millions around the world. As much as you suffered in health and in your personal life, just know that you were loved by me.
THANK YOU.
Got to Be There – please listen to this child’s voice!
Can You Feel It – YES!
Off the Wall
I HAD TO- from Thriller “Wanna Be Starting Something”
UPDATE: Other Thriller songs like Beat It & Billie Jean are disabled.
Remember the Time (FOR REGENCY!!!)
Embedding disabled – CLICK HERE.
Filed under: General | 73 Comments »