2010

Yes, it was a pretty crappy year.

Our President spent the year sucking up to Wall Street again, except for a couple of days when he tried to sound like the populist he pretended to be pre-election. Bad couple of days, Barack — you got those Wall Street boys all mad at you and they started tossing all the taxpayer money you gave them at the Republicans. With a little help from the Supreme Court, they took the House, and all the ass kissing you've done since has been to no avail.

Now that long-term unemployment lasts longer than ever before — at least since it's been measured, which was roughly when the Great Depression ended — it's nice to have a new statistic that allows people to be unemployed longer than 99 weeks. It's also nice of you to remind us how the private sector keeps adding jobs, even if it's not fast enough to accommodate the young people entering the workforce, and even if the public sector is cutting jobs faster than the private sector is adding them.

Did Larry Summers and Tim Geithner remind you to cash in those municipal bonds before they default? Probably not. They don't work for you, Barack, they work for Wall Street.

Fuck bipartisanship — we really didn't need that tax cut legislation. As for "postpartisanship" — well, that best describes both major parties pole dancing for Wall Street, each hoping for a few more bucks tucked into its g-string than might be tucked into the g-string of the other.

***

By the way, I turn 65 in January, and I have decided to officially declare myself the very first Baby Boomer ever. It is a serious responsibility, and I intend to fulfill it by being a total pain in the ass.

Burning down health care — the "free rider" principle

By this time, everybody's heard about that incident a few months back when Tennessee firefighters stood by and watched a family's home burn down because the family had neglected to pay its $75 annual subscription fee for fire protection. As reported by the Times, this led to a bit of a dispute in the conservative wing of the Republican Party, and an interesting dispute it was!

Mr. Cranick, the owner of the home, offered to pay for his subscription — which he had paid in previous years — if only the firefighters would come over and save his house, but it was too late. The fee was due when it was due, and that was that. They came to protect a fee paying neighbor's house, but Mr. Cranick was on his own.

More recently, Fourth District Court Judge Henry Hudson ruled the Obamacare mandate that individuals purchase health insurance unconstitutional — an overbroad interpretation of the Commerce Clause. I am inclined to agree with Judge Hudson. I was unhappy with the mandate when it was first announced. I don't see why, for the sake of my health, I should be required to buy, for example, a gym membership; nor, for the sake of my moral health, a copy of Why Good People Do Bad Things.

The root of the problem, of course, was Obama's typical bargaining strategy — start out by giving the opposition half of what it wants, and then "compromise" by giving it most of the rest. What could be better for private health insurers than forcing young, healthy people to pay them? Since the only way to make private insurance affordable for sick people is to enroll healthy people, the mandate is the linchpin of the whole, complex, schizophrenic policy.

So let's get back to the Tennessee firefighters, who refused to "treat the uninsured." Unlike the vast majority of public hospital emergency rooms, they were allowed to do that. Because of the 1986 Emergency Medical Treatment and Active Labor Act (EMTALA), any hospital that accepts Medicare has to provide treatment to every patient, regardless of ability to pay. Offering free treatment to the uninsured guarantees free-ridership — people who take advantage of the "fares" paid by others to benefit themselves.

If the Supreme Court upholds the decision of Judge Hudson, it makes perfect sense to repeal EMTALA. Is your leg broken, otherwise healthy young man? Set it yourself, or pay the hospital, say, $17,000. Need a liver transplant, oh rugged, self-sufficient libertarian? That will be $329,ooo please.

I would hope that children whose parents failed to buy them a heavily subsidized CHIP insurance plan would receive treatment at public expense, but their parents should be charged with gross neglect, lose custody, and spend a little time in jail. I can't see why that would be unconstitutional.

Of course, the real answer is a single payer system funded through taxation. I can't see any court ruling that one need not pay taxes for goods or services one does not want. Hell, I don't want the taxes I pay to fund the war in Afghanistan, farm price supports, faith based initiatives, and scores of other things they pay for now — but I still have to pay.

The truth is, Obamacare won't put nearly as big a dent in our health care spending as is needed, even if the Supreme Court upholds the Administration's point of view. We have to start viewing health care as a public good — something government should provide for everybody — and strip the profit motive out of our health insurance.

Well, we lefties lose again

So what else is new?

Working people, to be sure, will average about a thousand bucks in reduced payroll taxes. It will be more than twice that for those up near the top of the income cap — or above — and it seems inevitable that the new Republican majority in the incoming House will try to extend the 2% discount next year. That will leave Democrats with a choice of stopping it in the Senate and looking like the Grinch who stole Christmas 2011, or helping the Republicans defund Social Security. Great compromise, Barack. Great politics. Brilliant.

Then there are the Bush tax cuts, which the Republicans will want to renew or, more likely, make permanent, just about when you come up for re-election. Why defund just Social Security when they can defund the entire "evil" government? Maybe you were too young to be paying attention in the days of "starve the beast," but I hope you have the guts to let all the cuts expire then, even if it means you won't be Our President anymore. If you honestly think you can redo the whole tax system, even if you have the full six years, you're crazy.

Anyway, the Reagan tax restructuring of 1985 — "simplification," we were told — just accelerated the transfer of wealth from the poor and middle classes to the rich. I don't think you'd do any better, even if you really want to do better.

Since there's so much underutilized productive capacity these days, there's only one sensible way for businesses to use the tax incentives they're getting for new capital equipment — buying automated tools to replace workers. Isn't that exactly what we need at the moment?

Frankly, I don't give a damn about the change in the inheritance tax, but it's likely to leave a sour taste in a lot of middle class mouths. Now, of course, you're sucking up to business interests even more than before. What happened? Did a smidgen of populist rhetoric hurt their feelings?

You make me sick.

Mark Madoff

Unless I've missed it, nobody's been to to Butner — the prison in North Carolina where Bernie Madoff is serving his 150 year term — to get his view on his son's suicide. I'm entirely sure that Mark Madoff's suicide was far more painful to Bernie than anything the legal system could do to him.

My heart goes out to Bernie and his wife. Yes, he was an extreme exploiter of deregulation and underregulation, but losing a son or daughter is the worst thing that ever can happen to a parent — especially if the parent knows it's his own fault.

Somebody send Bernie a dog leash. He can use it.

Afghanistan, again

Now that the US has been in Afghanistan longer than the Soviet Union was — which also makes our fumbling around there the longest war in our history — it seems like a good time for a review of what's going on over there. The Obama administration is planning to release a "December Review" shortly, but we already know what it's going to say. According to Petraeus and crew, we'll be "making good progress" — military leaders just hate losing wars, possibly more than even presidents do.

On the ground, though, all we're doing is propping up a corrupt government, lining the pockets of warlords and military contractors, and creating a great deal of misery at very great expense. We already know that whatever remains of the original Al Qaeda, Osama bin Laden included, is in Pakistan — probably guests of the Haqqani Network, under the protection of Pakistan's ISI. Yes, it's a shame that so many lives had to be lost so that a pack of rich, sleazy bastards could get even richer, but that's what happened, and throwing more lives and money at an impossible situation won't bring any of them back.

Some are concerned that the Iranians will go into Afghanistan if the US pulls out "too soon." If they do, it will be a damned shame for Iran. Afghanistan is not called "the graveyard of empires" for nothing.

Let's talk primary

It's only a few of us talking about a primary challenge to Obama in 2012, but maybe if a few more of us engaged in the discussion, Our President just might think a bit more about his base. He thinks it was the so called "independents" who put him in office in 2008, but, really, it was his Democratic base. Democrats were the ones who went out, house to house, to persuade the politically ignorant that the dark complected guy was the candidate of "hope and change."

A lot of Democrats actually believed that. At this time, a lot of those Democrats have figured out they were wrong. Except for a few who put in a lot of work, and, hence, are dealing with a lot of cognitive dissonance, they won't be hitting the streets again in 2012.

So, a primary challenge is a distinct possibility in 2012. Unless some miracle candidate emerges from the manure heaps of the Republican stable, the prospect of Obama's re-election remains a toss-up, and a primary challenge just might persuade the President it's time to firm up his base. As for a primary challenger , there are lots of us who truly admire Dennis Kucinich, but Dennis has just been too "symbolic" for too long. Me, I like Jan Schakowsky, but I'll go with any progressive who can put real pressure on the administration.

First, I suppose, we ought to wait and see if some of Obama's current anger at liberal Democrats might be transferred over to the incoming Republican majority in the House — although that doesn't seem too likely. All the Clintonistas around him will be reminding him about how Bill won a second term by moving right after his midterm setback.

(No, Clinton did not move to the "center." He started out in what passes for the center these days and ended up working with Phil Gramm to overturn Glass-Steagle, thereby creating the financial monsters that rampaged through our economy and have been sucking us dry ever since.)

It seems to me that when unemployment is at 9.8% and the people who have jobs (outside of Wall Street) are earning less than they were two years ago, a little left-wing populism is in order. Actually, it was in order two years ago, but "Obambi," as Maureen Dowd calls him, was still trying to frolic with the predators. We can only hope, now that he's had their claws really rake across his ass, he might start listening to his fellow Democrats.

No Deal!

The following is a copy of the letter I faxed to each of my Senators this morning:

NO DEAL!

Barack Obama has to be the most inept negotiator in the history of the Democratic Party. Would somebody please remind him that he is the PRESIDENT OF THE UNITED STATES, and that he finally can stop Uncle Tomming his way to the top?

On payroll taxes: If payroll taxes are cut for a year, would anybody in his or her right mind expect Congress not to continue extending those cuts indefinitely, making Social Security less and less viable? How about permanently eliminating the tax on the first $20,000 of income, and entirely removing the upper cap on taxable income?

On the Bush tax cuts: Let them lapse! The higher tax on working and middle class people will not significantly slow the economy, and the rich will have less money to speculate on commodities, thereby holding down gasoline and food prices.

On the Estate Tax: Take no action at all, and let it revert.

On the Alternative Minimum Tax: Permanently key it to inflation, so the charade of “adjusting” it every year no longer is necessary.

On the Tax Code: It really is time to rewrite the tax code, eliminating most deductions (including mortgage interest and charitable bequests to religious institutions) and increasing the number of tax brackets to make income tax more progressive.

On extending Unemployment Insurance: Perhaps the President might try reminding the American people that it is the Republicans who are holding the poorest among us hostage to benefit their fat cat patrons.

Americans admire strength, but we haven’t seen much of that from Barack Obama. If we can’t find any strength in the administration, perhaps we can find some in the Senate. From you, perhaps?

Uncle Tom's White House

Years ago, my ex had a little black girl in her art class who wouldn't share her crayons. When asked why, she said, "Mama says don't share your crayons because they'll just take 'em and they'll still call you nigger." Mama, of course, was right.

So, our President proposed freezing all non-military (and non-legislative, of course) federal workers' salaries for two years. In exchange for what?

As far as anybody can tell, in exchange for nothing. He just pissed off some of the few people left who don't hold him in total contempt on the off chance that he might Tom his way into the good graces of a teabagger or two. Good luck, asshole, but you ought to know they'll just take your crayons and call you nigger anyway. It's a shame your Mama was a white anthropologist instead of a black factory worker. Maybe you'd know better.

In the meanwhile, it seems pretty clear that the Republicans are determined that nothing shall be allowed to improve the employment picture over the next two years. Bernanke's quantitative easing won't do anything but make it cheaper for business to buy the hardware and software that will replace human workers. Mind you, I don't think that's what he's had in mind — I think he just felt he had to do something, and since a Republican House means that fiscal stimulus no longer is remotely possible, he figured that QE2 was worth a shot. Personally, I think it could do more harm than good, but I can't fault him for making the attempt. He strongly suggested that a fiscal rather than a monetary approach was needed, but nobody was listening — including a few turncoat Democrats, among whom is a pathetic wimp who just keeps giving away his crayons.

Some people are starting to talk about a Democratic primary in 2012. Me, I'd be happy to support Jan Schakowsky, figuring that Dennis Kucinich is just a little too well known. If all it did was remind Obama that he'd better suck up to a few progressives — not just conservatives — it might be worth the trouble. Losing the presidency in 2012 would not be too big a deal if all we lost was Obama.

Somebody get that king some clothes!

While Hillary Clinton runs around the world kissing ass, I've been entertained by the latest wikileaks. It's always amusing when people get caught talking behind other people's backs — provided, of course, that the tongue wagger is not oneself — but so far I haven't seen any startling revelations.

Sarkozy's, Merkel's, and (especially) Berlusconi's "character flaws" have never been especially well hidden, and the State Department employees who decided to enshrine them in diplomatic cables should be reprimanded for wasting time belaboring the obvious. Russia under Putin is a mafia state, as any Westerner who has done business there can tell you, and it doesn't require much imagination to infer that the Sunni leaders of Saudi Arabia and the Emirates are not at all happy about the prospect of Shi'a Iran having nuclear weapons. And, yes, both Maliki and Karzai are corrupt. Big news.

It also wasn't much of a secret that the Obama administration has been bribing foreign governments to accept internees from Guantanamo. (Kuwait's interior minister, by the way, came up with what I think is a pretty good idea for getting rid of the ones who are dangerous, but can't be prosecuted because of fuck-ups by the Bush administration: drop them off in an Afghan war zone where they are likely to be expeditiously killed.)

We await further revelations — although the New York Times, which received the documents in advance and is participating in their recission, let it drop in an editorial today that this time, at least, there's nothing about torture or rendition. If the Times isn't lying, that's good news.

Correction to the previous post

In yesterday's post, I said that liberals "don't believe in violence." What I should have said is that they "don't believe in violence at home." History shows us that they don't especially mind exporting violence to other countries, especially in the developing world, and especially if they can dream up some "moral imperative" for doing so — or can sign on with some conservative think tank's "moral imperative" so as to avoid appearing weak or unpatriotic.

If some of the yahoos who think they are "conservative" (because there's nobody to tell them they're just working class heroes co-opted by the corporate cabal) decide to go out shooting liberals, there would be little of value to mourn. If the liberals shot back with guns instead of columns in the Washington Post and interviews on MSNBC, I might hold them in slightly higher regard — not much higher, but slightly higher.

Maybe I've said this before, but here it is again, perhaps in a slightly different format:

• If you support the Republicans and you are not rich, you are an idiot. They've been promising you those socially conservative "reforms" for decades, but they never come through.
  
• If you support the Democrats and you're not on Chuck Schumer's speed-dial, you're wasting your time. They've been promising you those liberal "reforms" for decades, and they haven't come through since the Johnson administration.
• If you move your vote back and forth between the corporatist parties based on their policy pronouncements, I feel sorry for you. Policy pronouncements, even in the short run, mean nothing.
• If you move your vote back and forth based on your perception of the personality characteristics of the candidates, you're an idiot. They're all lying to you — not just words, but faces and body language as well. Haven't you figured that out yet?
  

I don't own a gun, mostly because I don't want to be tempted to blow out my own brains (and I haven't been a happy camper for quite a while, if ever.) Comes the revolution, though — if it ever comes — I guess I'll head out to a gun show in some NRA compliant state and buy myself some unregulated firearms. Probably I never could get anywhere near anybody I'd really like to shoot, but without the appropriate armaments there's no chance at all.

Where is the Class War?

We hear people on the right yelling "class war" with a boring regularity. Those of us who have been paying attention are inclined to believe the class war is over, and that the working and middle classes have lost.

There still are plenty of warriors out there, though, often quite well armed. There are hunters, rifle clubs, militias, street gangs, and no shortage of individual angry paranoids — many with combat experience. They could stir up some extremely severe civil unrest if they got it into their heads to just start shooting in a concerted way, but except for the drug gangs shooting each other and some of the paranoids shooting their families, co-workers, and the occasional abortion provider, things are unnaturally quiet.

To a large extent, the liberals have to take the blame. They have perpetuated the ridiculous belief that we can get what we want and need by voting, and that shooting our corporatist oppressors and their toadies is just not done. The ones most likely to shoot anyone for political and economic reasons don't even have a clue whom they should be shooting, and dream about taking potshots at immigrants and Democrats.

Okay, some Democrats might deserve it, but not for the reasons their assassins would have in mind.

The main thing that keeps a perfectly justifiable class war from happening is that there's nobody left to tell the people with the guns who they ought to be shooting. They won't get it from their corporatist media, their corporatist drug cartels, nor their supremely corporatist NRA. Organized labor — what remains of it — has been co-opted. "Progressive" campus groups were suckered into working for corporatist Obama, and now they've gone back to their keggers.

The so-called "left" has fragmented into feminists, environmentalists, "free speech" advocates, gay rights activists, anti-war activists, immigration reformers, and scores of other single-issue ax-grinders, incapable of recognizing that their common enemy is world corporatism — and that fascism, over six decades after World War II, has triumphed. The other problem with the "left" is that they're liberals, and "don't believe in violence." Where are the goddamned Communists when you need them? Is everybody who owns a gun and understands that "the man" is not his friend in prison on drug charges?

Oddly enough, I think the best chance for class warfare might be in China. New to capitalism, their elites haven't learned to hide their corruption as well as ours do.

The Bowles-Simpson Proposal

Maybe I haven't tried hard enough, but I can't seem to find a complete copy of the deficit reduction proposals of the co-chairs of the President's committee. There are some proposals here, some there, depending on who happens to be ranting, but the document itself is very hard to find.

Based on what I've read in various places, Bowles and Simpson have some ideas that are worthy of discussion. They recognize that a balanced budget is impossible without cuts to defense, Social Security, and Medicare. They recognize that taxes, overall, have to go up — no matter how many unlikely spending cuts are enacted. The responses from both liberals and conservatives were entirely predictable and, needless to say, entirely incompatible.

It's safe to say, though, that nothing much is going to emerge from this particular committee beyond the recommendations of the co-chairs. There is no way in hell that fourteen out of eighteen members will agree on a single program. Just the same, we can try to evaluate the proposals center-right Bowles and further-right Simpson propose.

Cutting tax rates and eliminating many deductions sound fair until one notices that the deductions proposed for elimination are those that most benefit the middle class. To my eyes, it looks mostly like a continuation of the transfer of wealth from the lower 99% to the top 1%.

Pers0nally, I've never thought the deduction for mortgage interest was fair to renters, but rather than drop the whole thing immediately I'd be more inclined to cap it, so that the major benefits are confined to mortgages on more modest homes. Eliminating it entirely right now would make the problems in the housing market even worse.

Predictably, I have no problem with cutting spending on so-called "defense," and would like to see even larger cuts, including the complete shutdown of the military base on Okinawa. Let Sarah Palin keep an eye on the North Koreans from her front porch. As I've argued before, I'm also in favor of lifting (actually, eliminating entirely) the cap on income subject to payroll taxes.

Gradually raising the age at which one could collect full Social Security benefits over the next sixty-five years doesn't even deserve a comment, but the justification offered for the proposal does — the idea of longer life expectancy. Look at the data and you will discover that it's not poor people living longer, it's rich people — people for whom Social Security payments are not nearly so important.

Finally, counting on the provisions of "Obamacare" to put a noticeable dent in Medicare spending is ridiculously optimistic. The only way to take a real bite out of health care expenditures is by adopting single payer.

Since Congress is not likely even to adopt even the Bowles-Simpson ideas — nor whatever the full commission finally agrees to, if it ever agrees at all — it's a dead cinch that my ideas are going nowhere.

Divided Government

First, let's get past the idea that we've had anything other than divided government over the past two years. Even when the Democrats had sixty members in their Senate caucus, getting all sixty to cooperate was nearly impossible. Getting any significant legislation enacted — the foremost being the health care and financial reform bills — required watering that legislation down to an extremely thin gruel.

Now that the Republicans have taken the House, I suppose we can expect a string of ideologically pure bills to emerge, designed primarily to embarrass the President and make him look weak. Making Obama look weak has not been terribly difficult to date, and unless he stops trying to "compromise" with people who refuse to compromise, he will go on looking weak in the future.

In the new Senate, it is not hard to imagine the Republican minority scraping up four Democratic votes to pass bills that come from the House, especially if they dealt with social issues (or weakening financial reform.) Could Senate Democrats scrape up forty-one votes to filibuster a bill supported by some of their own number? It would be very embarrassing to have Democrats accusing Democrats of causing gridlock.

Wouldn't it be easier just to let the bill go to the President for a veto? Actually, using his veto power is something that could help Barack Obama look stronger.

A bigger problem Obama will have to face will be attempts to defund his programs — the Consumer Financial Protection Bureau comes to mind, along with aspects of the health care bill. When that happens — and it will — Obama will have to find ways to fight back. He will have to show some real passion, and be willing to go on the attack in the public arena.

It will be interesting to see an enlivened, energized, angry Obama. If we don't get to see that, it just will be pathetic.

"Independent" Voters

I've been trying to figure out how Democrats crashed and burned so badly this week, and I'm afraid the answers are unpleasant and disheartening.

Barack Obama provided precious little leadership. Americans like strength in their leaders — or at least the appearance of strength — and we didn't see much of that from Obama. (W, you will recall, always acted strong even when he was acting like a total asshole.) Strength is what attracts the so-called "independent" voters. If they had any concept of policy differences, they couldn't possibly swing back and forth between increasingly polarized political parties — they'd be able to figure out which party had their best interests at heart, and stick with it.

Some people vote Republican for good reasons. The best reason is that they are rich. Republicans have been good friends to the rich for decades now, which is not to say that the Democrats have not been good friends to the rich as well — just not quite so good.

Another reason people vote Republican is because they are religious. Granted, the GOP has been promising to overturn Roe v. Wade for roughly a generation of aborted babies now, and never actually come through, but hope does spring eternal. Oh, yeah, and then there's the matter of the faggots. Well, I suppose if you think voting for a Democrat consigns you to hell for all eternity, voting Republican makes a certain sort of sense.

Anybody who does not fit into the aforementioned categories must automatically be consigned to the third "r" of Republicanism: they're retarded. (Note to the politically correct: I am not using this term with reference to persons with severe intellectual disabilities, persons who, hopefully, are not voting at all. Rather, I use it to describe people who fall into the normal range of cognitive functioning but still don't know shit from Shinola. In this sense, "retarded" describes so called "independent" voters.)

Add to that the absence of the youth vote from the midterm election (no good parties or concerts), the absence of the black vote (perhaps they figured out Obama's not really black), and a shift in the female vote (like, what have the Democrats done for them lately), and the tale is told.

A Japanese style "lost decade" of deflation won't do us fixed-income retirees any harm at all, and quantitative easing might boost stock prices enough to maintain the values of our TSAs. Hell, quite a few of us are likely to be dead before it's all over. On the other hand, those of us who have kids still in the labor market will continue to chew our knuckles.

Aftermath

Let us assume, as Ben Bernanke apparently has, that the new Republican majority in the house is sincere in its desire to reduce the deficit by cutting government spending without raising any taxes. What will that mean?

Primarily, it will mean continued economic stagnation. Bernanke has suggested for months that monetary policy alone is incapable of getting business to start spending and hiring again. The $600 billion of quantitative easing announced yesterday — $900 billion, if you include the reinvestment of returns from mortgage-backed securities — is best compared to a "hail Mary" pass in the final seconds of a football game. It probably won't work, and it may turn out that the negatives outweigh the positives, but the Fed had to try something.

Both short-term and long-term interest rates already are super low. Big businesses are sitting on piles of cash, and really don't need more. There's no reason to expand if the demand for your product isn't there. Smaller businesses, which need loans primarily to tide them over until the economy improves, can't get them from the banks. Banks don't lend money to businesses that aren't making money, and they won't be making money until demand picks up.

The greatest benefits from this new round of quantitative easing will accrue to the financial industry. Since the Fed is not allowed to lend money directly to Treasury, it has to go through intermediaries like Goldman-Sachs and Morgan Stanley. Those intermediaries, of course, collect substantial fees for their "services," fees which help to swell executive bonuses. In the meanwhile, our trading partners will be understandably miffed at us for devaluing our currency again, and will find ways to retaliate.

The greatest risk is that the Fed inadvertently will create more inflation than it means to, without boosting business activity. Some of us are old enough to remember the stagflation of the seventies. It wasn't fun.

In the meanwhile, it's clear there won't be any meaningful fiscal policy coming out of a divided Congress — if we manage to avert total gridlock, it will be a minor miracle.

Midterm Elections and Polling

As announced previously, I don't make predictions anymore. I've certainly heard a lot, though.

Most are based on polling. I live in a "contested" Congressional district, and I've been called at least a dozen times by alleged "pollsters" over the past month. Most, of course, were trying variations on "push polling," using questions in attempts to influence my positive and negative attitudes towards the candidates, but a few seemed unbiased and legitimate. Since I'm retired and have a lot of free time, I participated, mercilessly teasing the push pollsters, and sharing my opinions with the legitimate ones.

Yes, we geezers are far more likely to participate in polling. Part of it is that pollsters, unlike many others, are still willing to listen to what we have to say. Also, every one of the calls I received came on my land line — and a substantial majority of the young people I know don't even have land lines (unless they've been forced to move back in with their parents), and only can be counted on to answer their phones one time out of five. Are they being polled by IM? I don't think so.

Parents with young children in the house don't have time for pollsters. People engaged by favorite television shows or sporting events can't be bothered. Those most likely to respond among those of working age are the unemployed and the ax grinders. I honestly can't see how telephone pollsters can possibly assemble an unbiased sample these days.

I also suspect a sort of Heisenbergian effect of polling in that the act of trying to measure public opinion changes it. Are Democrats going to be dismayed and discouraged from voting by poll results showing Republican strength, or so terrified by the thought of Tea Party victories that they will be certain to get to the polls? I don't think anybody can say for sure.

One thing is certain, though. If the punditry is correct, and Republicans score massive victories on Tuesday, we'd all better hope the GOP has been lying about what it intends to do if it comes to power. Spending cuts never have reduced unemployment, and tax cuts never have reduced a deficit.

therentis2damnhigh

If you missed the New York gubernatorial "debate," you missed one of the funniest shows on TV this season. Thanks to the insistence of Republican/Tea Party candidate Carl Paladino, five minor party candidates got to join the two leaders. I suppose the plan was intended to allow Paladino to keep his mouth shut as much as possible, to minimize the likelihood of his foot going in, but it didn't quite work out that way. Paladino came over considerably more inept than the candidates from the Libertarian Party, the Green Party, and the former Black Panther running on the Freedom Party line. For a while he seemed a little brighter than Kristin Davis of the Anti-Prohibition Party (the woman best known for being Eliot Spitzer's procuress), but then he wandered off the platform in search of a rest room during the final arguments. Exit, stage right, Carl Paladino.

Andrew Cuomo used his total time of twelve minutes to spin generalities, doing his best to look dull and responsible. (Well, maybe he is dull and responsible.) The candidate who stole the show, however, was Jimmy McMillan of the Rent is 2 Damn High Party. Follow the link to his website and have a good time. I have a feeling Jimmy will be winning quite a few protest votes on November 2 — maybe even my own.

NewsCorp v. Cablevision

I haven't been watching much TV lately. I go through the channel listings a couple of times a night, and see nothing I particularly want to watch except for the PBS NewsHour and John Stewart — and I know when those are on.

Still, I know about the "conflict" between Fox and Cablevision. When I turn on the cable box, I am automatically directed to a looping announcement telling me that Fox wants Cablevision to pay exorbitant fees to carry Fox entertainment programming.

Okay, I enjoy the musical numbers on "Glee," but I certainly can live without it. Today, though, I noticed something I hadn't noticed before. Even though Fox entertainment is absent from Cablevision, Fox NEWS remains.

If Cablevision really wanted to put Rupert Murdoch's balls in a vise, it would refuse to carry Fox News until an agreement was reached. Two scant weeks before election day, and given the market penetration of Cablevision, Murdoch would cave instantly. So why are we still able to see Beck and Hannity and the rest of the crazy crew on Cablevision?

Could it be because Cablevision's politics and Fox's politics are identical, despite their relatively minor financial quarrels? (All together, now: "Duh!")

So, when Cablevision splits the difference with Fox and raises your monthly access fee, don't be surprised. Personally, I wouldn't mind canceling cable altogether and putting a big antenna on my roof if only I had an alternative high speed internet provider. Unfortunately, where I live, I don't.

Why is nobody bothering to enforce the Sherman and Clayton anti-trust statutes? Oh, I forgot!

That would make them "socialists."

QE2

So, Ben Bernanke has all but formally announced another round of quantitative easing. I know I promised to stop making predictions, but this one is a no-brainer.

Quantitative easing will not decrease the unemployment rate. If done exactly the wrong way, it might help the banks survive their latest round of self-inflicted trauma. Ignore the Fed's history of putting the interests of banks before the interests of human beings, and we might be able to convince ourselves that another round of quantitative easing might be another desperate stab at reviving the economy (albeit the equivalent of drawing to an inside straight.) Well, maybe the Fed governors are well-intentioned — but before we evaluate their intentions, we'll have to wait and see just how badly QE2 is done. Then we'll have a better idea.

In its first round of quantitative easing, the Fed spent about $1.5 trillion on longer term T-bills from Treasury and a big batch of toxic assets from the largest banks. Buying the T-bills probably held down long-term interest rates, like mortgages — not that anybody's buying houses at the moment. Buying the toxic assets — mortgage backed securities — was just another bailout to the banks. The money used to pay for it all, of course, was created by the Fed out of thin air. It wasn't all bad — the value of the dollar dropped against most other currencies (but not the renmimbi), and whatever growth we've seen since then has come from exports.

Girls and boys, we are not going to export our way out of disaster — certainly not when every other developed or developing country in the world is simultaneously trying to do the same thing. What's needed is a genuine and concerted redistribution of wealth, so that our working and middle classes can afford to buy the products we produce. More demand equals more products equals more employment equals more demand. It's a virtuous circle, and one we sorely need.

But, getting back to quantitative easing, we'd best have a look at how it might be done.

If the Fed bought all T-bills with the new money it creates, the banks would not be especially happy. On all their outstanding loans, the money they collected would be worth less than the money they loaned to debtors. It would be kind of like going back to William Jennings Bryant and free coinage of silver. Other losers would include people living on fixed incomes, whose money would buy less than before.

More likely, of course, would be another round of Fed purchases of mortgage-backed securities — inevitably for considerably more than they're worth, since their value is approximately zilch. Yes, America, another bank bailout.

Okay, I'm making my usual pessimistic predictions. Sorry. I sincerely hope I'm wrong this time.

Just the same, I actually was paying attention during the Japanese "lost decade," and noticed just how well quantitative easing worked for them. Yes, I know, some economists today say they just didn't do enough of it, and that's why it accomplished nothing — but nobody seems to know how much is enough.

Right now, banks are awash in cash, but still not lending to small businesses. Heavens! It's just too risky! At the same time, they're borrowing money at near-zero interest and charging 18% and more on credit cards. Other corporations are also hoarding cash, hoping to survive if everything nose-dives again. Any new money the Fed pumps into the economy is likely to go straight into speculation in the commodities markets, not into job creation.

Yes, the threat of deflation is scary — but creating new money and tossing it at the banks by buying their worthless CDOs will not do a damned bit of good. Unfortunately, the Fed has no means —even if it had the will — to direct its newly created bucks to the people who actually would spend it on goods and services, thereby lifting the economy. The only institution capable of shifting wealth from the elite groups to those of us in the lower classes is Congress — and you know what that means.

We're fucked.

Chilean Miners

I generally avoid cable news, but I turned it on a few minutes ago to watch the 33rd Chilean miner reach the surface. Good news? The best! But what did cable news — even MSNBC — miss?

I was struck by the contrast between the Chilean mining accident and the Deepwater Horizon disaster. The owners of the San Jose mine were conspicuously absent from the scene. The Chilean government moved right in, took over, and simultaneously initiated three separate rescue plans. Plan "B" turned out to be most efficient.

When the Deepwater Horizon blew, the government of the United States turned to BP and said, "Uh, well, do something about it." BP, of course, tried just one plan at a time, beginning with the cheapest. It's a damned good thing for those Chilean miners that they were at the bottom of a hole in Chile rather than in the United States.

Now that the miners are free, Chile is ready to charge the mine owners with safety violations. Nobody is talking about a cap on liability.

Sometimes government is the right answer.

Currency Wars

To hear the Washington crowd talk about it, you'd think the only reason for our trade deficit with China is the undervaluation of the renmimbi; and that if China would just let it "float," the Chinese would suddenly start buying loads of American products, Americans would buy fewer products produced in China, and all would be right with the world.

I will take the word of the experts that the renmimbi is undervalued, but, somehow, I suspect letting it float would do very little to end the trade imbalance. For starters, even with a significantly stronger renmimbi, the allegedly gigantic Chinese "market" does not exist because only a small portion of the Chinese population would be able to afford American-made consumer goods — and those who could afford them after a change in exchange rates already can afford them now. (Why buy momentarily fashionable "originals" when perfectly acceptable knock-offs are available for one-tenth the price?) China's politico-economic structure is riddled with corruption, and its alleged "growing middle class" is a myth. The rich (that is, the connected) can have whatever they want, while the poor get by on promises and an occasional favor from some Party functionary.

On this side of the world, a stronger renmimbi would just mean higher prices paid by the lower income folks who patronize Wal-Mart and Family Dollar. The substandard crap would be just as substandard, but it still would be cheaper than locally produced crap — barring drastic increases in fuel prices that would sharply increase the rates for containerized shipping.

It would be a windfall for the multinationals — and, so what else is new?

Now, let's look at the rest of the world. Just about everybody is trying to export its way out of the Great Recession — to wit, decreasing the value of its currency in order to increase exports. The problem is that it's impossible for everybody to do that at the same time. Somebody has to be importing.

The Germans are doing pretty well because they produce the kinds of efficient industrial equipment developing nations need to keep their own exports flowing to the "first" world, and their own labor costs low — China and India being prime examples. Just about everybody else is fucked. Needless to say, it won't be long before the Chinese deconstruct the German machinery and pirate it. Once Mao died, and they discovered capitalism, there was no stopping them.

Bottom line: as long as ordinary people, wherever in the world they may be, cannot afford to win better lives for themselves and their children; and as long as the rich and powerful continue to gobble up every last trickle of gross global product, nothing will change. "Comes the revolution," my mother used to say, quoting her great-grandfather, "we'll all eat peaches and cream."

Well, actually, he said "pitches und crim."

I don't expect to be around for the revolution, but I hope my kids and grandkids will be tossing the torches at the castles and lifting the plutocrats on the tines of their pitchforks. (Probably, I should buy some pitchforks and leave them to my grandkids in my will. Pitchforks probably will no longer be readily available by then.)

Advice: buy your pitchforks now.

House Call

I had a somewhat surreal experience this morning — a visit from a Republican canvasser. She seemed to think she was talking to a loyal supporter, presumably not recognizing the yard sign for our local Democratic Congressional candidate on my lawn. She wanted to know if she could count on me to vote a straight Republican line next month.

It was a bit early in the morning for me. I was awake, but my hair still was a rat's nest, and I was wearing the previous day's t-shirt and boxer shorts. For the first couple of hours after I wake up, I would appear perfectly at home at the front door of a singlewide trailer up the hill from the Wal-Mart in Slagheap, West Virginia. Disregarding appearances, though, I'd had my coffee. I said, "What?"

It seems my address was on her list, or so she maintained. Mind you, my address is single-digit, so she could have counted up to it on her fingers.

"Why," I asked, "would I vote Republican? I'm not rich. I'm not born again. And I'm not an idiot. It's not like I'm all that fond of the Democrats, but, honestly, why would I vote against my own interests? If you're not very rich or very socially conservative, the Republicans have nothing to offer. I know the Democrats are not a hell of a lot better, but for anybody with a few brain cells still working, the choice is pretty obvious."

"Obama," she replied, "is a socialist.

"Obama? A socialist? He's not even a liberal. I'm a socialist. Obama is just Bill Clinton in blackface!"

(I can't resist the "Bill Clinton in blackface" line, even though it can be construed as racist. Does that make me a racist? I don't think so. I supported Jesse Jackson back in the day.

"In the meanwhile," I told my canvasser, "just go away."

"Well, then," she replied, "I hope I can count on you on November 8th."

She turned to go. Arcing across the seat of her stretch pants, in a fairly large font with no abbreviations, it said ABERCROMBIE. It takes quite an ass to accommodate that much print

I have no idea how the Great American Electorate will behave on Election Day, but I hope enough of them will behave well enough to keep the asses from gaining control. Mind you, I don't have a hell of a lot of hope.

Aaagghh!

Book Review: "Aftershock" by Robert Reich

My review can be found here, at Amazon.

The "Pledge to America"

I wonder how many people actually have read all twenty-one pages of the 'Publican party's new "Pledge to America." It's an extraordinary document — not in its ideas, which are just the same old shit, but in its rhetoric. Read just the introduction, and you will hear the 'Publicans yelling, "Hey! Tea Party crazies! Lookie here! The Republican Establishment is on your side!"

"America is an idea – an idea that free people can govern themselves, that government’s powers are derived from the consent of the governed, that each of us is endowed by their [sic] Creator with the unalienable rights to life, liberty, and the pursuit of happiness. America is the belief that any man or woman can – given economic, political, and religious liberty – advance themselves [sic], their [sic] families, and the common good."

Apart from the grammatical errors, it sounds rather like the Declaration of Independence. Hmmm... Did the Declaration of Independence mention "economic liberty?" Well, yes, in a way. There is a strong inference that only an elected government should have the power to tax. Was the current government elected? Uhhh... Hey, can anybody remember back as far as 2008?

"An unchecked executive, a compliant legislature, and an overreaching judiciary have combined to thwart the will of the people and overturn their votes and their values, striking down longstanding laws and institutions and scorning the deepest beliefs of the American people."

The last "unchecked executive" I can recall was the Bush/Cheney administration, which rammed through the totally unnecessary Iraq war by telling not-especially-believable lies to asshole Democratic senators afraid to appear "soft on terrorism." The legislature Obama has had to work with has not been especially compliant, thanks to the "Party of No." As for an overreaching judiciary, well... think "Citizens United."

"Like free peoples of the past, our citizens refuse to accommodate a government that believes it can replace the will of the people with its own. The American people are speaking out, demanding that we realign our country’s compass with its founding principles and apply those principles to solve our common problems for the common good."

Sadly, that's not happening. Democrat or 'Publican, the plutocracy remains firmly in control. As Lefty Frizzel advised us in 1950, "If you've got the money, honey, I've got the time." Well, if I have the time, honey, I'll get on with the money aspects of the "Pledge to America" in a future post.

Summers's gone!

Larry Summers, Robert Rubin protégé and unrepentant free-marketeer, has announced his resignation from the Obama Administration, effective shortly after the midterm elections.

“I will always be grateful that at a time of great peril for our country, a man of Larry’s brilliance, experience and judgment was willing to answer the call and lead our economic team. Over the past two years, he has helped guide us from the depths of the worst recession since the 1930s to renewed growth. And while we have much work ahead to repair the damage done by the recession, we are on a better path thanks in no small measure to Larry’s wise counsel," said Our President, fingers crossed behind his back.

According to the Wall Street Journal, Summers is leaving because he is approaching the end of a two-year leave of absence from Harvard, and if he doesn't go back by January he loses his tenure. Maybe they have it right. Given the attitudes of Harvard women, without tenure he just might be be joining the other 14.9 million unemployed Americans.

Also according to WSJ, his most likely replacement will be Anne Mulcahy, the recently retired CEO of Xerox. She is credited with "saving" the corporation by, among other things, cutting 30% of its workforce — but perhaps, as a more "hands on" executive type, she will turn out to be less ideological than her predecessor.

Needless to say, I'm not at all sorry to see Summers go. That leaves Timmy Geithner as the sole survivor of the original Obama economic team, so maybe he'll be "resigning" soon too. How much difference will the changes make? It's hard to say. Elizabeth Warren's appointment offers some room for hope, but I still can't imagine our next Treasury Secretary being Robert (the right Bob) Reich or Joseph Stiglitz. Too bad.

Obama gets it right

I couldn't be more happy. Our President finally has made a concession to the Democratic Party's liberal base, and appointed the woman on whom I have had a long-term crush, Elizabeth Warren, to head the Consumer Financial Protection Bureau.

Obviously, she never could be confirmed in the official position by the Senate — every Republican and, quite probably, a few asshole DINOs would vote NO — but as a "special adviser" to the President, she can do the job for the time it takes to write the regulations that make the Consumer Financial Protection Bureau significant.

In the meanwhile, the Tea Party seems to be making life difficult for the Republicans. Sarah Palin lookalike Christine O'Donnell just might make it easier for the Democrats to hang onto Delaware's Senate seat in November. As for Carl Paladino, who will be running against Andrew Cuomo for governor of New York — well, he probably will do better than Rick Lazio would have, given how much money he has to blow on television ads — but, hell, he's no less an asshole than Lazio. New York, I believe, is ready for another Cuomo. While I'm not at all sure that Andy can live up to Mario's legacy — including, of course, the "Tale of Two Cities" speech at the 1984 Democratic Convention — I'm still convinced that Paladino is an asshole.

One way or the other, it's nice to see Obama paying some attention to the Democratic Base. It's about time.

A little income redistribution

I've been thinking about Robert Reich's ideas for pulling out of our economic malaise, and one of them strikes me as especially direct and sensible. At the moment, workers pay 6.2% payroll tax on their first $106,800 of gross income. One of the ideas floating around Washington lately has been a "payroll tax holiday," during which time that payroll tax would not be deducted from workers' paychecks.

As a temporary stimulus, such a tax holiday might do some good — provided workers used the extra money for new consumption rather than paying down debt. Concerns over the financial health of Social Security and Medicare, however, make the idea a political non-starter. A far better stimulus would be direct aid to the states, so they can save state jobs and, perhaps, provide additional help to citizens in severe need.

Reich suggests a permanent exclusion of the payroll tax on the first $20,000 of a worker's income, and an imposition of payroll tax on further earnings beyond $250,000. I'll go him one better — exclude the first $20,000, and remove the upper cap entirely. If that rule were in place for this year, earners of up to $126,799 of gross income would see a reduction in their tax liability. Those who earn more would end up paying more, but still no more than the 6.2% paid by the lowest income earners today. Let's look at some figures:

What currently is a regressive tax becomes a progressive tax. The poor, who spend more than they save, have more to spend. The rich, who save more than they spend, have no significant change in lifestyle — just a bit less wealth. Those in the middle — even those in the well-above-median $125,000 to $150,000 earnings bracket — see little or no change in their family finances.

Would the change bring in enough new revenues to "save" Social Security and Medicare? I'll let the actuaries work that out. One thing is sure, though: anybody earning over a million dollars a year can afford to pay $61,000 in payroll taxes!

Terminology: the "Democrat Party"

One of the simplest ways to distinguish a rational conservative from a doctrinaire, rabidly politicized right winger is by the way they refer to the "enemy." Reasonable and respectful conservatives (who value good manners) refer to their adversaries as the "Democratic Party." For the others, the locution, inevitably, is the "Democrat Party." Since the 1940s, the noun to adjective transformation has been regarded as less-than-subtle-but-still-deniable slur by most observers — although when used by George W. Bush, it was widely regarded as an indication of semi-literacy. Much the same can be said for its use by Sarah Palin — but when used by John Boehner and Charles Grassley, idiocy is not a sufficiently viable excuse.

Far be it from me to maintain that the Democratic Party — much less the Republican Party — might in any way be truly small-d "democratic." They both could change their names to "the Plutocrat Party," thereby clearing up any remaining confusion and better satisfying truth-in-advertising regulations. Nevertheless, I have a suggestion for such Democrats who have adopted the term "Teabaggers," as well as others who still refrain from references to gay sexual tomfoolery in their policy statements.

I suggest the term, 'Publicans. I doubt that most rank-and-file right-wingers will associate the word with the owners and hosts of British taverns, since few are familiar with British English (and even some of their leaders continue to struggle with American English.) On the other hand, a great many social conservatives, at least, will know the word from their Bibles — where "publicans" refers to private contractors employed by the Roman Empire "who erected or maintained public buildings, supplied armies overseas, or collected certain taxes, particularly those supplying fluctuating amounts of revenue to the state." (Encyclopedia Britannica Online, 2008)

It fits. Dick Cheney and his sock puppet W went a long way towards the further privatization of war, not content with the vast size of the military-industrial complex they inherited from earlier administrations. Think of Xe (Blackwater). Think of Halliburton. Think of the privatized toll roads in states like Texas and Indiana. Think of the proposals to privatize Social Security.

Rome, you may recall, came to depend on an outsourced military — while entertaining the plebeian population with gladiatorial combat and FOX news — only to fall into chaos.

Okay, they didn't have FOX news, but I think you get the idea. Rome — replete with corruption, greed, and extreme sports — inevitably fell.

(Well, at least Rome provided bread along with the circuses. The 'Publicans think that's just a waste of good privatized wealth.)

I Like Reich

In his op-ed piece in today's New York Times, Robert Reich did something that always makes me happy — he agreed with me. Look back one posting to this blog and you will observe that I attributed our current economic woes to "the gap between the rich and the rest of us." Reich goes into the subject in depth, tracks the history of the gap, and offers some very constructive ideas for reducing its size. I consider Reich's article required reading for anybody who really wants to understand what happened to our economy and what should be done to repair it.

As I have observed in the past, Obama picked the "wrong Bob" to form his economic policy team — Rubin rather than Reich. Both served in the Clinton administration, although Rubin was far more influential even back then. Back in April, I referred to Rubin acolytes Geithner and Summers as "zombie slaves of the financial industry." Both seem to have been gnawing a very little bit at their marionette strings (please excuse my mixed metaphors) but, sadly, cognitive dissonance makes it impossible for either one to abandon faith in the infallibility of markets and embrace genuine change.

Minority leader John Boehner says Obama should fire Geithner and Summers. I agree, but feel quite confident we would disagree on the matter of potential replacements. I like Reich.

Our President, adhering to the Bill Clinton school of politics (possibly including loss of Congress at the midterm), persists in striving for "moderation," and continues to make me feel ill. He seems to have made Peter Orszag and Christina Romer feel ill as well, by ignoring their advice and sticking with Summers (read Rubin.) While I would love to have Elizabeth Warren as head of the new consumer protection agency, if she even is nominated to the position by Obama, I promise to risk lower back injury by posting a picture of myself with my foot in my mouth. Our President is far too cowardly to endorse any policy radical enough to make a real difference, so nothing much is likely to happen until 2012.

Anyway, read Reich's analysis, and think about his proposals. The man makes a hell of a lot of sense.

Bernanke at Jackson Hole

While describing the four "possible actions" the Fed could use to bolster the economy at Jackson Hole yesterday, Ben Bernanke, in essence, said that monetary policy has taken us as far as it can. Even if there was agreement on the Fed's Board — and there isn't — there's really nothing left for the Fed to do.

That leaves Congress — and that means nothing will be done. Political gridlock, which probably will become even worse after the November elections, means there will be no meaningful fiscal policy either. I find it hard to believe the Republicans will be able to take control of both the House and the Senate, so that will let them off the hook for accomplishing anything at all — and I suspect they'll be content to let unemployment remain high for another two years so they can take the White House in 2012.

In the meanwhile, the rest of us can sit around and listen to Obama and Geithner tell us our economy is in "recovery." Well, it doesn't look like a recovery, and it doesn't feel like a recovery, no matter that GDP may be expanding at a glacially slow rate. In the meanwhile, the gap between the rich and the rest of us just continues to grow — the same gap that encouraged workers with stagnant incomes to create the staggering levels of debt that set off the crisis in the first place.

A word of optimism? From me? Surely you jest.

The Islamic Center

I have a problem with the Islamic Center near "Ground Zero." It's the same problem I have with St. Patrick's Cathedral, Temple Emanu-El, and even the perpetually liberal Riverside Church: none of them pay taxes.

Burlington Coat Factory, the putative but discredited "historic monument" that currently occupies the spot of the new Islamic Center, paid both corporate income taxes and property taxes. The new center, being "religious," will pay neither.

Fully half the tax-deductible "charitable contributions" declared on United States income tax forms are to religious organizations. Some of that money goes to people — people who really need help — but much of it goes to maintaining the institutions, their propaganda, and their denigration of competing religious traditions. (How much of the opposition to the Lower Manhattan Islamic Center, one wonders, is funded by tax-deductible contributions? How much is funded by the tax-deductible ADL, for example?)

Like other religious institutions, the Islamic Center probably will deserve part of its tax-free status. If it provides a food bank, relocation of the homeless, day care, dental clinics, or other non-denominational services, support for those projects ought to be tax-deductible. It is entirely reasonable to give tax preference to organizations that benefit the public at large — but not to those which aggrandize their own agendas at the expense of others.

By the way, as I understand it, the Muslims who are sponsoring the Islamic Center are Sufi — ecstatic, non-political, non-violent Muslims who are pretty much the exact opposite of the Salafists of Al Qaeda. That means nothing to Republican opportunists, Fox News, or Harry Reid (who is in a tough re-election campaign.) For the Great American Public, of course, it's all black and white. Muslims are black. So is Obama.

Too bad.

Quantitative Easing

The figures keep coming in — and lately, as you may have noticed, they have not been looking too good. The chief problem seems to be that both consumers and producers are more interested in paying down debt than in expanding consumption or production. Some talk about double-dip recession. Some talk about deflation.

Ben Bernanke says the Fed has not exhausted its supply of tools for fighting such threats, but he has not been especially specific. Presumably he is referring to quantitative easing, a central bank policy that, essentially, creates a bit (hopefully only a bit) of inflation and makes the "security" of Treasury bonds less attractive by further lowering the already low rates of interest they currently pay.

The recent Fed announcement that proceeds from mortgage backed securities now beginning to bring in some earnings would be reinvested in Treasuries does not really count as quantitative easing, since it does not really increase the money supply. It suggested, though, that the Fed might be willing to purchase securities with newly created money — how much, or how soon, is anybody's guess.

There are a couple of problems, though, with quantitative easing. One is the possibility that it could stimulate inflation without prompting any increase in productive business activity. If that happened, prices would go up while unemployment stayed high — stagflation, seventies style — and people certainly would feel poorer. Those on fixed or limited incomes would be poorer.

More likely, though, it would accomplish nothing at all — the experience of the Bank of Japan when it used quantitative easing in an attempt to get Japan out of its "Lost Decade" of the nineties and the recession of 2000-2001. While a cheaper dollar ought to stimulate exports, it's just as likely to spark a trade war. Every country in the developed world is trying to export its way out of the current mess, and it's illogical to think they all could succeed.

I'm inclined to think the Fed really is out of ammo, so we're going to have to depend on Congress making intelligent fiscal policy. Since I'm not making predictions anymore, I'll let you decide for yourself how likely it is that that will happen.

College Graduation Rates?

According to recent news reports, the per capita college graduation rate in the United States has slipped from first in the world to number twelve. The President says that's a cryin' shame, and that we ought to do something about it. Okay. I agree. But, what should we do?

Since I am an old fart, I am entitled to talk about "the good old days," and you young folks are entitled to ignore me, so I'd better grab your interest pretty fast.

I went to college for free. It wasn't because I was valedictorian of my high school graduating class (not even close), or because my family was particularly disadvantaged (it wasn't). It was because the colleges of the City University of New York did not charge tuition.

Back in the sixties, there was real interest in helping qualified students complete college. Presumably, it had something to do with the Cold War — competing with the Soviet Union — but more than that, it was the FDR-inspired attitudes that emerged from the Great Depression and World War II.

Granted, not everybody was admitted to CUNY, but if you were in New York City's top 25%, it was pretty much automatic. Since the children of the more affluent usually went to private colleges, there usually was a place for you if your grades and SAT scores put you in the top 35%. Most of us couldn't have afforded college if the tuition were much higher than free — credit was a lot harder to get in those days.

We lived with our parents. We traveled by bus and subway. We got part-time and summer jobs to earn some spending money. We graduated with Bachelor's degrees and no debt.

Was it a perfect system? Of course not. Truly poor and minority students, from the city's crappier ghetto high schools, found it hard to make the cut — but for sons and daughters of the lower middle class who had some talent and ambition, it was an amazing opportunity. Our parents looked on with pride as we pulled ourselves up onto the next step of the socio-economic ladder.

So, how did government afford it? America was flushing money down the Vietnam toilet then just as fast as it's flushing money down the Afghanistan toilet today — but our values, in those days, were different. The tax code had not been Reaganized. Middle class incomes and standards of living were still moving upwards, and taxation was not a dirty word. People were willing to share the burdens, and they did. The United States was a lot more egalitarian in those days, despite the discrimination, segregation, and many other problems.

And so, Mr. President, how shall we solve our college graduate deficit? Well, we can't go back to the sixties.

Maybe we can go forward, though. If college really is that important, let's find a way to make it free again.

Elizabeth Warren and the Consumer Financial Protection Bureau

Regular readers of this blog probably recall that I have a bit of a crush on Elizabeth Warren. I would have happily supported her for the Supreme Court seat that went to Elena Kagan, and she'd have my full support if she decided to mount a primary contest against Barack Obama in 2012.

If Obama fails to nominate her to lead the new Consumer Financial Protection Bureau — the very same bureau she conceived and fought for — I will be even more pissed at him than I am now. We need Elizabeth Warren in a position of real power.

Some say she doesn't have the "experience" to be an effective bureaucrat. Perhaps that's true, but the experience to become an effective bureaucrat is experience at licking assholes. There are a great many assholes in government, banking, and financial services — and they already are being thoroughly licked. We need someone to come along and shove something very hard, large, and bumpy up those assholes. It's time for them to feel some pain.

Stop being a pussy, Barack. All it's done is reduce your approval ratings. If you turn out to be a one-term president, which looks increasingly likely, at least you should be able to leave saying you'd done something (and I'm not talking about that giveaway to the insurance industry commonly called "Obamacare.")

Elizabeth Warren for President! Hooray!

More structural unemployment on the way

Based on the figures released yesterday for the second quarter, it looks like businesses continue to replace human beings with machines. According to the Times, "[t]he crucial driver of growth in the second quarter was business investment in such things as office buildings, equipment, and software." Such investment roughly doubled over that of the first quarter.

From the perspective of an individual business, it makes sense to replace a human being with a machine. Machines don't call in sick. They don't get time-and-a-half when you need them to work overtime. Once they're programmed, they just keep doing their jobs the same, dependable way, without getting bored and letting their attention wander. They don't go out for lunch and come back with a couple of beers in them.

The drawback of machines, though, is that they don't buy anything. They may create a little demand for energy, spare parts and updated software, but they don't drink Pepsi or eat Froot Loops or wear Levis or talk on cell phones. As consumers go, machines are very limited.

The more of our production done by machines, the less consumption done by our human beings. No wonder the money men are so concerned about our trade imbalance. They're going to have to sell a whole lot of their shit to foreigners because fewer and fewer Americans will have the jobs they need to earn the money they need to buy it.

Shorting Obama

In yesterday's Times, London hedge fund manager Hugh Hendry was quoted as follows: “If there was a way to short Obama, I would."

That got me to thinking — what if there were a way to short sell Obama? The first thing that comes to mind, of course, is a synthetic CDO of sorts. Since you don't actually have own what you're betting on, I'm sure the bright young people at Goldman could come up with something.

An easier way, of course, would be to short any enterprise that might profit from Obama initiatives — wind power facilities come to mind, for example — or just go long on big oil and big banking, since any kind of meaningful energy bill (read carbon tax) is impossible, and the banks will have figured their way around the new financial regulations well before the regulators even are in place.

Hendry, by the way, also predicts that China is "headed for a fall," which presumably would mean the Chinese would pull way back on buying our debt and transfer resources to calming the inevitable social unrest. As regular readers know, I'm not making predictions anymore — except, when I can't help myself, in the most general sense.

Right now, my gut feeling, for both Obama and the United States, is that hard times will be sticking around for quite a while.

Does Scott Brown want to be President?

Does the bear shit in the woods, and is the Pope both Catholic and hoping to protect his brother (Georg Ratzinger, former director of the scandal plagued Regensburger Boys Choir) from accusations of facilitating child abuse?

Okay, forget Georg and the boy buggering — you can research that on your own, and form your own unsubstantiated conclusions based on the wonderful "free information" of the internet. For reasons not too hard to imagine, I have plenty of doubt about anything I read on the internet. One definition of "free" is "devoid of value."

As for Scott Brown, though, all you have to do is look at him to see what an attractive candidate he can be. Hell, he's cute, winsome, and winning — and why anybody ever thought the unappealing Martha Coakley had a chance against him is beyond me. He's taking a chance, though — betting that intrinsic politico-sexual charisma can triumph over ideological (read Tea Party) nuttiness. Personally, I think it's a pretty good bet.

Brown took a big chance when he voted for the "finance reform" bill — but coming from Massachusetts, it doesn't seem like that much of a bad move. He's betting that, by 2012 or 2016, all the Tea Party bullshit will be revealed for the bullshit it is. Hopefully, he's got that right.

Frankly, though, I suspect he's more cute than smart. Listening t0 him talk on TV left me less than overly impressed regarding his general intelligence. On the other hand, this is the country that elected George W. Bush — but at least Brown will be surrounded by people from Massachusetts rather than Texas.

By the time we get some actual regulations out of the new financial reform bill, there's no telling who will be appointing the regulators. The most important question is just how toadying the toadies will be. Franklin D. Roosevelt, you may have noticed, has been dead for a long, long time.

Ron Paul, Ron Wyden, Barney Frank, and me

It's really nice to hear of somebody willing to seriously consider cutting the military budget. The fact that a liberal like Ron Wyden, a conservative like Ron Paul, and a pragmatist like Barney Frank all can support the idea is good news. It would be better, of course, if some of the more conservative (rather than libertarian) conservatives would join in. Attention, Tea Party: please, at least, think about this idea.

Back during the Cold War, it was considered prudent to have at least three separate systems for retaliating against the Soviets in the event of a nuclear attack: land based missiles, submarine based missiles, and the Strategic Air Command. Now, Paul, Wyden, and Frank are suggesting that perhaps just two might be enough, and that getting rid of the third could put a real dent in the budget deficit. Bravo!

Needless to say, we could save even more if the United States gave up its role as the official military force of the world's multinational corporations — but I suppose that just may be a bit too much to ask.

Deflation?

Now that I'm not making predictions anymore (thank you, Nassim Taleb), what is there to do but indulge my predilection for pessimistic expectations in idle conjecture? I will ignore all the negative economic news timed to help us celebrate the Independence Day holiday (for the moment), and refer you to an editorial in today's New York Times by Yves Smith and Rob Parenteau.

Now, those guys were not exactly making predictions, but the data they cite is kind of interesting. From my negative perspective, it sounds a lot like continuing drop in demand. Drop in demand, of course, leads to deflation. (Smith and Parenteau, by the way, seem more concerned that deflation could lead to Depression than to a US take on Japan's "Lost Decade.")

Well, as an old fart on a fixed income, deflation doesn't sound that bad to me, personally — but I do have kids, and I still care about the rest of you. It follows that I kind of like Smith and Parenteau's idea for "an aggressive tax on retained earnings that are not invested within two years."

What's good for a tiny minority is very unlikely to be good for the rest of us.

Humility?

I've been reading Nassim Taleb's Black Swan, and recognizing myself over and over in his descriptions of arrogant "experts" who prognosticate freely based on (internal or external) "narratives" drawn from unsubstantiated ideas about causality. I will attempt to subdue myself in the future, but after a long lifetime of enjoying the notion of my "superior intellect," it's likely to be difficult.

One of the good things about keeping a blog is that you can go back and quantify how often your predictions were correct and how often they were wrong. (Don't think I've forgotten my dire warnings of stagflation from early 2008 — I couldn't have been much more wrong about that.) A bad thing about a blog, of course, is that you can go back and edit yourself, but I don't do that. What's the point?

Well, two days ago, I predicted double-dip recession. Today, I asked myself why. Here's what I believe to be the answer.

It's that internal narrative, tainted by persistent depressive thoughts and general pessimism. I think of the worst possible outcome, and assume it will ensue. The good thing about this is that when worst possible outcome doesn't come to be, I can be pleasantly surprised; and when the worst does happen, I can have the satisfaction of having been right.

Of course, there's no reason for me to impose my negativity on others. In the future, I will cut back on the predictions. I will begin doing that when the government of the United States starts implementing its reforms of the financial system; and I will proceed at the same glacial speed. There are some things you just can't do all at once.

Crank up the deficit please

I won't even bother to comment on the financial "reform" bill that came out of conference — except to say that the banks that were too big to fail in 2008 are even bigger now, and that everything in the bill depends on the zeal of the regulators, who never were especially zealous in the past.

What really has me steamed at the moment is the Senate's refusal to continue Medicaid assistance to the states, and to extend unemployment benefits. This is not the time to force state and local governments to lay off large chunks of their workforces, nor to deprive an unemployed worker of the ability to feed the kids. Being "deficit hawks" makes sense for Republicans, of course. If they can prolong the national misery, they can pick up more seats in the midterm election. A double-dip recession probably could win them the presidency next time around. As for Ben Nelson, I suspect he's just an idiot.

Deficit cutting is getting quite fashionable, though, and even if the United States manages to continue some level of stimulus, Europeans are determined to move the other way. Aggressive budget balancing by the UK, Germany, and France almost certainly will push Europe back into recession. Given that it's a world economy now, they'll drag the rest of us down with them.

Lesson for Today

Military leaders in the field should not go drinking with reporters from Rolling Stone, much less bring their asshole aides along to the party.

In the meanwhile, on the ground, the casualties keep mounting, the Karzai family continues to enrich itself at the expense of the American taxpayer, and Al Qaeda is blithely training its operatives in Yemen, Somalia, and probably other places around the world that most Americans never knew existed.

We can't police the world anymore — we can't afford it, and it just doesn't work.

The Spill Speech

"God Bless Us, Every One!"
Tiny Tim

"Uh, yeah! Right!"
Barack Obama

Okay, I was not impressed. I was hoping for a little detail. No, I certainly didn't expect a proposal for a carbon tax, although that is exactly what we need to reduce our dependence on imported oil. An extra dollar or two a gallon certainly would do the trick, but politically, that won't work. You don't win elections by preaching abstinence to addicts.

What we got was just more of the increasingly boring Obama blather. (I thought of calling it "jive" rather than "blather," but it didn't rise to the level of jive — and jive really is best accomplished by black men.) Then there was all that "god" talk tossed in at the end. Is he still trying to win over states like Alabama and Mississippi? What an asshole!

What is needed is not talk — nothing will matter but action. Granted, the Brits will not be too happy if we bankrupt BP, but what the hell — they'll be pulling out of Afghanistan any day now anyway, and even though they steered clear of the euro, they'll still be stuck in the European debt crisis. "Bah, humbug," as Tiny Tim didn't say — nor did Obama.

Maybe he should run that quote by Rahm. Maybe that's what America is waiting to hear.

Meanwhile, back in Marja...

Last February, I grudgingly allowed that General McChrystal should get his chance at pacifying Marja. Well, he's had his chance. Before we escalate even further and move on to Kandahar, maybe it would be a good idea to see how Marja turned out.

The Taliban actually left for a while, but now they're back. The Afghan national police push the locals around during the day, and the Taliban do it by night. Oh, and remember that "government in a box" that was all ready to move in as soon as Marja was reclaimed? It seems the box must have leaked, because a good many of the officials never made it to Marja — they're still back in Kabul, although they are collecting their government salaries for doing such good work down south.

So the schedule for Kandahar has been pushed back a bit. I suppose there's no need for a "government in a box" there, because Ahmed Wali Karzai will continue to run the place just as he always has.

Making things even more interesting, U.S. geologists estimate close to a trillion dollars in mineral wealth is just waiting to be dug up in Afghanistan. Just think of all the splendid corruption that will bring. Hell, we couldn't even keep rampant corruption out of our own Minerals Management Service — and I really don't see a pack of Karzai cousins taking too much trouble to preserve the environment when the mining begins.

Well, at least they don't have an ocean to pollute.

Helen Thomas

Yup. Dementia.

Re: Bibi Netanyahu and the blockade

The world (excluding FOX news, of course) seems to agree that Israel kind of screwed itself by intercepting those blockade runners in a manner that might be considered a bit too aggressive. Whatever the facts are, however, Netanyahu comes out ahead.

Likud does best when Israelis feel most threatened. Whip up a batch of anti-Israeli rhetoric in the world media, and Israelis cling to their political party of war and antagonistic attitude like nettles to a wool sock. Bibi wins again.

In today's Times, Amos Oz lays out a road to peace — but it is not a road compatible with Likud domination of the Knesset. The right, in Israel every bit as much as in the United States, depends on fear to stay in power.

In the meanwhile, fear leaves the Obama administration virtually helpless. Can we afford to antagonize the Turks? The Jews? The Europeans? The fucking Republicans?

Maybe Barack needs to take a lesson or two from Bibi. Politics is not for the faint of heart, and "love of country" is just a way to hang onto the reins of power.

Memorial Day

My grandmother was born in the 19th century, so she called it "Decoration Day." It was a holiday created after the Civil War, when Americans were expected to go to the burial places of the war dead with flowers and flags — to remember their sacrifices.

Of course, even during the Civil War, the poor and working class did most of the fighting. A rich man could pay some immigrant or field hand to fight in his stead when called. The World Wars, it seems, were somewhat more democratic — although the rich fell naturally into the officer corps, while the poor crawled on their bellies through the mud. In the Vietnam era, the better educated found ways to stay out of the fight, if not the war.

Bill Clinton, Dick Cheney and I found ways to avoid the draft. George W. Bush, Richard Blumenthal, and quite a few of my friends and relatives managed to snag non-combatant reservist positions which allowed them to claim they "served their country."

Today, post-draft, the separation between civilian and military cultures dwarfs the Grand Canyon. How are we supposed to successfully oppose neo-imperialist military involvements when there isn't even a threat of our own (educated, middle class) children being drawn into personal danger?

Maybe we need to reinstate the draft — even though military leaders seem to prefer their self-motivated, FOX indoctrinated, all-volunteer army. Maybe. Given the history of draft evasion, though, it's not likely to bring any significant change.

So what's the answer? Beats me. Given the state of the economy, it might be possible to raise the standards required for enlistment. Maybe we could find a way to connect military service to the forgiveness of student debt.

One thing, though, is certain: separating the vast majority of our citizens from our soldiers can only serve to perpetuate war. If the vast majority never feels the war, the war never has to end.