Friday, October 29, 2010

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.

Friday, October 22, 2010


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.

Thursday, October 21, 2010

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."

Saturday, October 16, 2010


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.

Wednesday, October 13, 2010

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.

Tuesday, October 12, 2010

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.

Saturday, October 9, 2010

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.