To those who think the public mourning for Michael Jackson is excessive, let me say two words:
Ronald Reagan.
.....
The money from the Obama stimulus package finally is finding its way into the economy, and some economists are saying that it won't be enough. It won't, but don't hold your breath while waiting for more. It seems that a substantial majority of Democrats in the Senate actually are Republicans, while a dozen or so actually are Whigs. As for those who nominally are Republicans, well... Does anybody remember a guy named Mussolini?
I'm too lazy to look up the specific posts, but I'm sure that when the stimulus was under discussion last year I was pushing direct aid to the states. The states, remember, tend to have balanced budget provisions in their constitutions, and when a whopping economic meltdown comes along and tax revenues are way down, the states have to enact whopping budget cuts.
Those who worry that the current stimulus spending is inflationary might bear in mind that cuts in state spending significantly outweigh the increase in federal spending. The overall impact of combined government spending right now is deflationary. Lost decade, anyone?
The chance for another stimulus bill right now is nil, but just in case somebody in Washington decides to act rationally, let me reiterate: give the goddamned money to the states, to restore the jobs and programs they're cutting even as we speak. Money used to restore cuts gets into the economy a lot more efficiently than money for new spending.
Tuesday, July 7, 2009
Friday, July 3, 2009
"Meek and Mild"
Yesterday, I suggested that Barack Obama's problem was that he came to power by not being a "scary black man." Today, I listened to the podcast of WNYC's "On The Media," and heard some relevant commentary. Here's a quotation from Duke historian Tim Tyson:
Come on, Barack! Nobody's saying you have to be an arrogant asshole like Bush, but a touch of "scary black man" might be just what we need right now.
There's a sense in which Mrs. Parks is very important to our post-civil rights racial narrative, because we really want a kind of sugar-coated civil rights movement that's about purity and interracial non-violence. And so we don't really want to meet the real Rosa Parks. We don't, for example, want to know that in the late 1960s, Rosa Parks became a black nationalist and a great admirer of Malcolm X. I met Rosa Parks at the funeral of Robert F. Williams, who had fought the Ku Klux Klan in North Carolina with a machine gun in the late 1950s and then fled to Cuba, and had been a kind of international revolutionary icon of black power. Ms. Parks delivered the eulogy at his funeral. She talks in her autobiography and says that she never believed in non-violence and that she was incapable of that herself, and that she kept guns in her home to protect her family. But we want a little old lady with tired feet. You may have noticed we don't have a lot of pacifist white heroes. We prefer our black people meek and mild, I think.Barack Obama is no Rosa Parks. He remains "meek and mild," despite the fact that he is now the President of the United States of America. I guess old habits die hard. Granted, his chance of winning that office would have been about as great as Jesse Jackson's if he hadn't played the "good nigger" so well, but now he's there, and he's there in a time of multiple crises. "Meek and mild" won't cut it.
Come on, Barack! Nobody's saying you have to be an arrogant asshole like Bush, but a touch of "scary black man" might be just what we need right now.
Thursday, July 2, 2009
Not our coup?
Like most of the rest of the world, I imagine, my initial assumption upon hearing about the coup d'etat in Honduras was that the United States, somehow or another, was involved. After all, how many Latin American military coups ever took place without our involvement?
Consider: the Honduran military and the US military work in what we like to call "close cooperation." Most of their officers were trained in the notorious School of the Americas, and their military budget is pretty much whatever we give them. Deposed president José Manuel Zelaya, originally elected from a party of the center-right, now is buddy-buddy with Hugo Chavez, and was exploring the very Chavezian notion of overturning Constitutional term limits.
It really sounded like a natural for US intervention, except for one thing -- Barack Obama says we didn't do it, and even is standing with the rest of the OAS in demanding that Zelaya be reinstated.
On the other hand, every country in the world that bothered to have an embassy in Honduras has withdrawn its ambassador save one. You guessed it. We're the one. It seems, as well, that the US State Department had some clear inkling that a coup was in the works -- and reportedly was working behind the scenes to "resolve the conflicts" between Zelaya, his opponents in the legislature, and the generals.
So, what actually happened? Was the coup truly cooked up entirely by Zelaya's Honduran opponents? Is it conceivable that there may have been US military and/or CIA involvement without anybody bothering to mention it to Obama? Word has it that Zelaya pissed off Hillary big time recently when she showed up in Teguchigalpa on a red eye flight, and Zelaya insisted that she go to a private room at the airport and shake hands with every member of his large, extended family before letting her get to the embassy to crash.
The big winner in all this, of course, is Hugo Chavez -- precisely because it boggles the mind to consider a military coup in the region without a fat US thumb on the scales. Our President, as usual, seems unwilling to risk offending anybody -- even in Honduras -- and hence is trying to steer his typical wimpy course between "extremes," even while the rest of the world is taking assertive action.
Personally, I'm sick of all the compromises, both at home and abroad. It's time to stop all the political pussyfooting and take a moral stance -- on military coups, on health care, on torture, on open government, and more. My suspicion is that Obama got where he is by studiously avoiding any action that might make him look like a "scary black man," but now he's the goddamned president! It's time for him to stop acting like a wimp and take a chance on doing what's right.
Consider: the Honduran military and the US military work in what we like to call "close cooperation." Most of their officers were trained in the notorious School of the Americas, and their military budget is pretty much whatever we give them. Deposed president José Manuel Zelaya, originally elected from a party of the center-right, now is buddy-buddy with Hugo Chavez, and was exploring the very Chavezian notion of overturning Constitutional term limits.
It really sounded like a natural for US intervention, except for one thing -- Barack Obama says we didn't do it, and even is standing with the rest of the OAS in demanding that Zelaya be reinstated.
On the other hand, every country in the world that bothered to have an embassy in Honduras has withdrawn its ambassador save one. You guessed it. We're the one. It seems, as well, that the US State Department had some clear inkling that a coup was in the works -- and reportedly was working behind the scenes to "resolve the conflicts" between Zelaya, his opponents in the legislature, and the generals.
So, what actually happened? Was the coup truly cooked up entirely by Zelaya's Honduran opponents? Is it conceivable that there may have been US military and/or CIA involvement without anybody bothering to mention it to Obama? Word has it that Zelaya pissed off Hillary big time recently when she showed up in Teguchigalpa on a red eye flight, and Zelaya insisted that she go to a private room at the airport and shake hands with every member of his large, extended family before letting her get to the embassy to crash.
The big winner in all this, of course, is Hugo Chavez -- precisely because it boggles the mind to consider a military coup in the region without a fat US thumb on the scales. Our President, as usual, seems unwilling to risk offending anybody -- even in Honduras -- and hence is trying to steer his typical wimpy course between "extremes," even while the rest of the world is taking assertive action.
Personally, I'm sick of all the compromises, both at home and abroad. It's time to stop all the political pussyfooting and take a moral stance -- on military coups, on health care, on torture, on open government, and more. My suspicion is that Obama got where he is by studiously avoiding any action that might make him look like a "scary black man," but now he's the goddamned president! It's time for him to stop acting like a wimp and take a chance on doing what's right.
Wednesday, June 24, 2009
RIP: Health care's public option
If you support the inclusion of a public option in the impending health care reform bill and you want to feel depressed, try this analysis, by Nate Silver, of the likely impact of PAC contributions on the votes of currently "undecided" Senators. Silver concludes that a bill that includes a public option has scarcely a chance of coming out of the Senate.
Of course, it doesn't help at all that Senate Majority Leader Harry Reid is second from the top on the list of those likely to be influenced by PAC money, and hence not likely at all to take any sort of leadership role on behalf of passing the bill the president seems to want.
I say "seems to want" because I'm not really clear on his level of commitment. He's been making the right noises in public, but is he twisting any arms behind the scenes? It's just that Obama's standard operating procedure seems to be making all the right noises in public, then backing off when public attention is diverted elsewhere. We've seen it with government transparency, Guantanamo, and other issues that nobody outside the civil liberties crowd is paying attention to anymore.
Yes, a substantial majority of the public wants a public option, and Obama is invariably responsive to public opinion -- in public. He's also aware that with or without the public option, he gets to be "the president who gave us (nearly) universal health insurance." Is it truly in his self-interest to push for a plan that actually could work -- by bringing down the cost of health care? Maybe. But probably not.
This is America, where substance always is secondary to appearance. So what if we get "health care reform" that consists entirely of forcing individuals and business owners, subsidized by taxpayers, to shovel even more money into the coffers of the HMOs and big pharma? Who cares? Obama?
We'll see. According to Silver, the public option needs eleven more votes in the Senate. How many senators will sign on? A lot of that depends on how hard the president is willing to work for those votes.
Of course, it doesn't help at all that Senate Majority Leader Harry Reid is second from the top on the list of those likely to be influenced by PAC money, and hence not likely at all to take any sort of leadership role on behalf of passing the bill the president seems to want.
I say "seems to want" because I'm not really clear on his level of commitment. He's been making the right noises in public, but is he twisting any arms behind the scenes? It's just that Obama's standard operating procedure seems to be making all the right noises in public, then backing off when public attention is diverted elsewhere. We've seen it with government transparency, Guantanamo, and other issues that nobody outside the civil liberties crowd is paying attention to anymore.
Yes, a substantial majority of the public wants a public option, and Obama is invariably responsive to public opinion -- in public. He's also aware that with or without the public option, he gets to be "the president who gave us (nearly) universal health insurance." Is it truly in his self-interest to push for a plan that actually could work -- by bringing down the cost of health care? Maybe. But probably not.
This is America, where substance always is secondary to appearance. So what if we get "health care reform" that consists entirely of forcing individuals and business owners, subsidized by taxpayers, to shovel even more money into the coffers of the HMOs and big pharma? Who cares? Obama?
We'll see. According to Silver, the public option needs eleven more votes in the Senate. How many senators will sign on? A lot of that depends on how hard the president is willing to work for those votes.
Friday, June 19, 2009
Regulatory reform?
I've been reading as much as I can about the Obama plan for regulatory reform. I'm not happy.
As usual with this administration, there is a good deal less on the table than one might hope to find. The initial approach, which was to bring all the relevant lobbyists together and let them slug it out, seemed like it might have been a good idea. There were many competing interests, and reason to hope they might neutralize one another. The administration could claim it had "listened," and then go on to do what really was needed.
Ooops, pardon me! For a second there, I forgot it was the Obama administration, which works from the first principle, "It is a far, far better thing to look like you're doing something than actually to do something. Getting things done just gets people pissed off."
Making the Fed regulator in chief is Obamanomics 101:
Meanwhile, in Switzerland...
According to Carter Dougherty, in the New York Times, "Swiss financial regulators said Thursday that they were considering assuming new emergency powers that would allow them to break up large banks to wind down troubled business units that are not essential to the economy." After their UBS and Credit Suisse problems, the Swiss have decided that they've had enough of banks that are 'too big to fail.'"
They'll start by "working with" the banks -- but it sounds like, in the absence of real cooperation, they'll just go ahead and do it. Yay, Switzerland!
As usual with this administration, there is a good deal less on the table than one might hope to find. The initial approach, which was to bring all the relevant lobbyists together and let them slug it out, seemed like it might have been a good idea. There were many competing interests, and reason to hope they might neutralize one another. The administration could claim it had "listened," and then go on to do what really was needed.
Ooops, pardon me! For a second there, I forgot it was the Obama administration, which works from the first principle, "It is a far, far better thing to look like you're doing something than actually to do something. Getting things done just gets people pissed off."
Making the Fed regulator in chief is Obamanomics 101:
- The Fed is an "independent" agency. Hence, if it screws up, the administration can duck all blame -- especially while Bush appointee Ben Bernanke is in charge.
- The Fed is a creature of Wall Street, so no matter how much the financial industry may whine about oppressive regulation, you can bet they're not especially upset.
- Larry Summers would love to be the next Fed chairman, and he'd love it even more if the job included additional autocratic powers.
Meanwhile, in Switzerland...
According to Carter Dougherty, in the New York Times, "Swiss financial regulators said Thursday that they were considering assuming new emergency powers that would allow them to break up large banks to wind down troubled business units that are not essential to the economy." After their UBS and Credit Suisse problems, the Swiss have decided that they've had enough of banks that are 'too big to fail.'"
They'll start by "working with" the banks -- but it sounds like, in the absence of real cooperation, they'll just go ahead and do it. Yay, Switzerland!
Saturday, June 13, 2009
Regulation, again...
Well, I'm still waiting to find out just how "customized" a derivative has to be to escape regulation. So far, it sounds like the bankers will be a lot happier with the outcome than I will.
So far, a substantial majority of the derivatives that have been created have been "customized" to one extent or another -- and the bankers insist that such customization is vital to "serving the interests" of both buyers and sellers. Okay. It makes sense that different CDOs requires different terms and due dates. It makes sense that different credit default swaps will insure different levels of risk to different degrees. Swell. Go ahead and customize them.
I also understand why it might be hard to write regulations for customized derivatives -- especially since we can expect that their creators are sure to "customize" them in ways that would help them avoid any regulations Treasury might write. On the other hand, I don't understand why they can't be sold like other securities -- in an open market, with full disclosure.
The pivotal word in that last sentence, in case you didn't notice the double emphasis, is "can't." Clearly, they can be sold like other securities -- the only problem being that the profit margins of the originating banks would be sharply reduced. Well, we "can't" let that happen, now -- can we?
Hey! Obama! Yes we can!
So far, a substantial majority of the derivatives that have been created have been "customized" to one extent or another -- and the bankers insist that such customization is vital to "serving the interests" of both buyers and sellers. Okay. It makes sense that different CDOs requires different terms and due dates. It makes sense that different credit default swaps will insure different levels of risk to different degrees. Swell. Go ahead and customize them.
I also understand why it might be hard to write regulations for customized derivatives -- especially since we can expect that their creators are sure to "customize" them in ways that would help them avoid any regulations Treasury might write. On the other hand, I don't understand why they can't be sold like other securities -- in an open market, with full disclosure.
The pivotal word in that last sentence, in case you didn't notice the double emphasis, is "can't." Clearly, they can be sold like other securities -- the only problem being that the profit margins of the originating banks would be sharply reduced. Well, we "can't" let that happen, now -- can we?
Hey! Obama! Yes we can!
Thursday, June 4, 2009
Regulation and the Free Market
Just in case you haven't noticed yet, Friedman and Greenspan were wrong. Free markets are extremely fragile. Left untended and unregulated, they can't survive -- they succumb to what economists call "market failure." The only institutions powerful enough to prevent market failure are governments, and the only way they have to do that is through economic regulation.
The chief component of the market failure that created our current economic crisis was lack of information. For markets to operate properly, buyers and sellers must be aware of the real value of what they buy and sell. In the case of derivatives, as we now know, that information just wasn't available. Not only were buyers misled by the ratings agencies -- who were paid by the sellers -- but derivative sales were private. Buyers had no means of knowing what other buyers were paying for very similar instruments. The derivatives market was totally obscure, and totally unregulated.
"Then, let there be regulation," intones Obama. "Right on it, boss," cries His Boy In Treasury, Timmy G. And there shall be regulation. Effective regulation? Um, well...
Some Democrats in Congress, like Senator Tom Harkin (whom I recall supporting in a presidential primary a great many years ago), want all derivatives to be traded in an open exchange -- like stocks or commodities. That would provide full transparency, and make a repeat performance of the current mess just about impossible.
Timmy G. has another idea, though -- derivatives would be traded through privately managed "clearinghouses," which would make the trades, well, sort of semi-transparent. More complicated, "customized" securities, however -- like the credit default swaps that brought down AIG -- would remain outside the system, and totally opaque.
You get one guess: which plan does the industry prefer? Here's a hint: if buyers get to know what the securities really are worth, they won't pay as much for them.
Maybe Obama will surprise me, and get behind the idea of an open exchange. Somehow, though, I doubt it. Bill Clinton signed the December 2000 bill exempting most derivatives from regulatory oversight, and so can claim a fat share of the responsibility for our current problems. Barack Obama, who took even more in campaign contributions from the financial industry than Clinton did, is not likely to be a major improvement.
As Dick Durbin pointed out recently, "the banks ... are still the most powerful lobby on Capitol Hill. And they frankly own the place." I'm afraid that probably is true of the White House as well.
Well, so much for free markets. How can markets be free when the government that's supposed to protect them is bought and paid for?
The chief component of the market failure that created our current economic crisis was lack of information. For markets to operate properly, buyers and sellers must be aware of the real value of what they buy and sell. In the case of derivatives, as we now know, that information just wasn't available. Not only were buyers misled by the ratings agencies -- who were paid by the sellers -- but derivative sales were private. Buyers had no means of knowing what other buyers were paying for very similar instruments. The derivatives market was totally obscure, and totally unregulated.
"Then, let there be regulation," intones Obama. "Right on it, boss," cries His Boy In Treasury, Timmy G. And there shall be regulation. Effective regulation? Um, well...
Some Democrats in Congress, like Senator Tom Harkin (whom I recall supporting in a presidential primary a great many years ago), want all derivatives to be traded in an open exchange -- like stocks or commodities. That would provide full transparency, and make a repeat performance of the current mess just about impossible.
Timmy G. has another idea, though -- derivatives would be traded through privately managed "clearinghouses," which would make the trades, well, sort of semi-transparent. More complicated, "customized" securities, however -- like the credit default swaps that brought down AIG -- would remain outside the system, and totally opaque.
You get one guess: which plan does the industry prefer? Here's a hint: if buyers get to know what the securities really are worth, they won't pay as much for them.
Maybe Obama will surprise me, and get behind the idea of an open exchange. Somehow, though, I doubt it. Bill Clinton signed the December 2000 bill exempting most derivatives from regulatory oversight, and so can claim a fat share of the responsibility for our current problems. Barack Obama, who took even more in campaign contributions from the financial industry than Clinton did, is not likely to be a major improvement.
As Dick Durbin pointed out recently, "the banks ... are still the most powerful lobby on Capitol Hill. And they frankly own the place." I'm afraid that probably is true of the White House as well.
Well, so much for free markets. How can markets be free when the government that's supposed to protect them is bought and paid for?
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