Niall Ferguson is Nasty, Brutish and Tall

Niall Ferguson believes that Keynes didn't care about future generations because he was gay and didn't have children. That's the reporting from Tom Kostigan from the Altegris Conference in Carlsbad, California.

"[I]n front of a group of more than 500 investors, Ferguson responded to a question about Keynes' famous philosophy of self-interest versus the economic philosophy of Edmund Burke, who believed there was a social contract among the living, as well as the dead. Ferguson asked the audience how many children Keynes had. He explained that Keynes had none because he was a homosexual and was married to a ballerina, with whom he likely talked of "poetry" rather than procreated. The audience went quiet at the remark. Some attendees later said they found the remarks offensive. ...

"Ferguson, who is the Laurence A. Tisch Professor of History at Harvard University, and author of The Great Degeneration: How Institutions Decay and Economies Die, says it's only logical that Keynes would take this selfish worldview because he was an "effete" member of society. Apparently, in Ferguson's world, if you are gay or childless, you cannot care about future generations nor society."

Meanwhile Ferguson's heroes have spent the past 30 years stealing the livelihoods from working people and beggaring their children... Why are right wing pundits such nasty, selfish, self-serving, ill-informed bigots? And what does it say of their "moral" universe? That it ends at their property line, perhaps. That it's as large as the inside of their safe deposit box on Grand Cayman. Among today's investor class there is very little regard for Burke's social contract ideas, so why did Ferguson make the comparison?

Speaking of swinish right wing punditry... There is a useful summation of the bully boy world of the late Andrew Breitbart by James Wolcott in the new Vanity Fair. The title of the piece is apt. The right wing in this country has all the human kindness of a Roman emperor watching Lions vs. Christians at the Coliseum.

How Is A National Economy Not Like A Household Budget?

Krugman is especially good today. He makes some crucial points, one in particular, that most Americans don't understand, and that the conservative power structure, the banks, the 1%, are determined Americans never understand:

"Let’s start with what may be the most crucial thing to understand: the economy is not like an individual family. Families earn what they can, and spend as much as they think prudent; spending and earning opportunities are two different things. In the economy as a whole, however, income and spending are interdependent: my spending is your income, and your spending is my income. If both of us slash spending at the same time, both of our incomes will fall too."

The Austerity mantra tells us that nobody should spend more than they have in their pocket right now. No homeowners, no car owners, no college for you.

Unless you are a member of the 1% who have accumulated all of America's earning power over the past 30 years.

What income and savings ordinary working and formerly middle class consumers used to spend now belongs to the very rich and adds to the leverage that the 1% has to manipulate the economy.

The 1% also uses this leverage to manipulate Congress to ease their taxes and increase ours, to get our tax dollars to bail out the big banks but not help the homeowners who were wrongfully foreclosed, to get government to protect corporate earnings and CEO pay from taxes but cover any losses they might suffer through their own risky behavior.

The concentration of wealth also buys a lot of media, a lot of punditry, a lot of "expert opinion", a lot of public relations that can be used to persuade the mass of Americans that they don't deserve what they used to deserve, that austerity is good for them, that Americans should settle for less and quit grumbling.

Austerity policies take trillions out of the middle class consumer economy and put them into the well-stuffed mattresses of the 1%.

To what purpose? The rich can afford to play a long game. (Call it a long con if you like.) Their goal is to suppress working incomes to their lowest possible degree. They own for a living; they see working incomes as an evil. They have been suppressing working incomes for the past 30 years. What will eventually happen is the U.S. economy will begin to resemble a third world country, with large slums full of workers desperate enough to work for pennies and small gated enclaves of very wealthy people and their bodyguards.

Interestingly, the Austerity preachers give us Greece as an example of what happens if a country doesn't act according to the wishes of the very rich. But Greece is an example of the opposite. The Greek economy fell apart because its extremely wealthy stopped paying taxes and the consequences (unwise austerity policies) were forced upon the working population. But economies are made up of people who work and spend money, not just people who own for a living, who are rich for a living and do nothing productive. Why are the latter group made immune to taxes? What happens when trillions are taken out of a nation's economy and put tax-free in offshore banks? What happens is a Greek style collapse.

The Foolishness of Austerity Economics

Paul Krugman has been writing about the stupidity of austerity economics. Here's his column from this morning.

Also, there's a new book by David Graeber that fills out the long history of debt, explaining the usefulness of debt on a societal level, shared public debt. The national debt so hated by Republicans and FoxNews fulminators was created by a founding father named Alexander Hamilton. You can see his picture on the ten dollar bill in your pocket. How did we get to where we are now? The recent past is more dramatic and foolish and catastrophic than the longer more rational, more prosperous period between FDR and Reagan. We may be emerging from the catastrophe, but there are powerful people who hold our economy hostage: call them the Austerity Economists. The debt haters who also (no coincidence) created the most damaging debts we're dealing with now.

In the mid nineties, after Clinton had raised some taxes on high earners, fostering a period of sustained growth, there was also an effort made to balance the federal budget, to pay our debts down. Good timing, really. It's good to do this when the economy is up and revenue streams are steady. Keynes said this. But there was a worry among large investors: what would happen when the safest investment of all, the US Treasury note, became less plentiful, became rarer because the government was borrowing less? There was serious concern. Nothing bad happened.

Then Bush Jr. was appointed president, and the prudent Democratic money policies were thrown out. Taxes were cut and spending exploded. Unnecessary wars were declared and pursued profligately. War was paid for outside the budget. More taxes were cut. New security bureaucracies were created. A huge unpaid benefit was given to seniors. Regulations were relaxed on speculators. Huge pools of cash were sloshing around in the pockets of corporations and hedge funds, which was wagered recklessly. We experienced an investment class bubble. It wasn't a housing bubble really, it was driven by rich people with too much money chasing too few plausible investments during a period when average households were feeling stretched and losing buying power.

Then the economy collapsed. The last catastrophic gift from the Bush years. Obama was elected. Responsible people came back to the helm. Why has the economic recovery been so sluggish? Financial sector collapses take longer to recover from. The financial sector itself recovers––look at the profits of the large banks and hedge funds––but the damage to the wider economy, collateral damage done by their crimes to innocent people and households takes a long time to repair. Millions of people will never recover. Their incomes will never recover. Their future will be significantly diminished because of the foolish greedy things done by cowboys in the financial sector, and the millions of households harmed will never be able to earn and spend like they could before, like they might have if President Gore had been able to continue the more responsible policies of the Clinton administration. (The man was elected, after all.)

The most frustrating thing is the foolish Bush policies still have a lot of influence. His advisors took well-paid and highly influential positions in the large financial institutions that Bush failed to regulate, where they continue to influence financial thinking and coerce policy. Bush people still have hands on the financial tiller because our economy is largely controlled by large private entities. Even the public institutions are influenced by large financial players.

The most damaging and weirdly contradictory policy Bush's Boys have pushed, and they've pushed it hard, is Austerity.

Imagine a person is admitted to the ER with massive bleeding. The Austerity policy would dictate the doctors not waste blood donors' blood on this person. BushThink says it's better to give this blood supply to people who already have enough blood, who aren't in danger. If those healthy people don't need it now, it's best to store it in case they'd like to have it in the future. Austerity policy preaches restricting help. Hungry children are helped best by withholding food. It is a do-nothing policy.

The rationale is that households restrain spending when revenue stops. A responsible thing for a household to do. But an economy is not a household. Alexander Hamilton created the national debt to help the economy grow. The debt was an engine for infrastructure investment. It turned the U.S. from a backward nation into the largest economy in the world. Deficit spending bought the western half of the country. It laid the railroads (Republican president) and built the interstates (Republican president.) Why have Republicans turned from prudent and productive growth policies to unproductive and stingy ones? Possibly because their large donors no longer feel invested in this country––they're not as invested because they bank in Switzerland and the Caymans and Bahamas and they don't pay the same percentage of taxes the rest of us do. Massive deficit spending for WWII hoisted us out of the last Great Depression, something FDR's more cautious deficit spending failed to do during the 30s.

Another medical analogy: imagine a patient comes into the ER. His heart has stopped. Austerity policies would say Do Nothing. Wait. Pray. The more Keynesian doctors would use a defibrillator to jolt the heart back to life. Austerity doctors would say that's a waste of electricity. We had an economy in 2008 and 2009 that needed a jolt. TARP gave that jolt but subsequent stimulus was blocked and watered down by Austerity believers, do-nothing purists. These foolish ideologues, BushThinkers, also steered most of the stimulus into the pockets of the perpetrators of the collapse rather than into the households that would have spent the money. The bankers who got it banked it. They sat on it. They didn't see enough opportunities for profitable investment so the money didn't enter the consumer economy where it would have created opportunities for productive investment.

We have a political reality that gives veto power to the big banks through their proxies in the Republican Party. So we do nothing. There is a tacit veto preventing help from getting to the households that most need it, who would quickly spend it and stimulate the economy, who would spend that money at stores down the street. What's happened instead is the Big Money people, the BushThinkers, have taken the American economy and buried it in their backyard, waiting for their private opportunity to exploit it profitably, but an economy dies when it's buried. The BushThinkers think there are only two ways to invest money: in their offshore accounts or on split second wagers on the movement of the markets. This oscillation between ancient economics and casino economics isn't good for us.

The other rationalization for the Republican Do Nothing Austerity Policy (and you've heard it recited over and over again by the hedge funders' Republican proxies in Congress) is that to deficit spend now would swell the national debt and place a burden on our children. Which sounds rational to households without any money... but it isn't. It's not what we do as a community. Republican policies begin and end with the individual and damn the community.

Scrooge has become the dominant philosopher of the moment. "Let them die then, and decrease the surplus population."

Don't deliver money where it's needed; deliver more where there is too much already.

Don't deliver help where it's needed; help the people whose houses are full of underpaid help already.

Don't feed the hungry; feed the well fed, feed the overfed.

Don't supply medical care to the unhealthy; insure the healthy, treat the healthy.

America needs to get its head around the basic and necessary logic of the public sector. The thinking that sends policemen and firemen and paramedics and soldiers and rescue personnel toward danger instead of away from it.

Our national wealth should help in an emergency rather than hiding under the bed.

The Republican mindset that is blocking our national recovery says "don't help" and "think only of yourself". This thinking is what is keeping us down right now. It is defunding every effort to lift us out of the ditch using community effort and community investment.

To say, as the Republicans say, and talk radio and FoxNews repeat endlessly, that using government spending to stimulate the economy would place an unbearable debt on our children, really is saying that the best way to protect our children's inheritance is to give our national wealth to the wealthy so they can put it safely in the Cayman Islands where it can lie safely idle the way the wealthy lie safely idle. They're saying that the best thing to do with our nation's wealth is to put it back in the hands of the people who wagered it foolishly prior to 2008.

What the Republicans are saying is "Austerity is a good thing for the poor." And we're all more poor than we were in the Clinton years.

Austerity, though, is like starving your children to protect their inheritance.

Whose inheritance is it? Are these Austerity economists really telling us to give that inheritance to them? Are America's grandparents deciding to spend their grandchildren's inheritance on themselves? Is there a feeling among seniors that the younger generations screwed things up and can't be trusted with spending money? The victims are not the perpetrators here.

Whose bad choices created this lousy economy? Do we really blame the very households the bad economy destroyed? Was it really the bad decisions of the wealthy bundlers and resellers of mortgages? Was it the predatory lenders? Was it the hedge funds who diverted investment away from productive categories into bizarre financial wagers? Was it the wealthy exporters of jobs, whose export of jobs is still subsidized by Bush era policies we haven't been able to end?

Was it the older generation of Reagan worshippers who decided the economy could be left unregulated? The same generation who voted themselves ample retirement but have decided to remove that prospect for their children and grandchildren? The same generation who now have free healthcare but seem happy to withhold healthcare from their children and grandchildren? We can understand their reasoning a little if we realize that once people retire they cease to be workers and become reliant on investments; their loyalties change. You could say they become different people, at once powerless and powerful. They exist in the pocket of their investment groups. They might not even be aware of the shift in their mindset. They're conflicted because they need government but they're owned by the bankers who manage their investments for them, and lobby Washington for them.

Meanwhile, because of the Republican veto of any sustained stimulus, the economy sits and waits. The generations who are still working, whose jobs are insecure, whose incomes have been flat since Reagan flattened workers' incomes, wait, and put off plans, and curb their spending, and worry. And the generation that has graduated and found its careers stalled since 2008, waits too. This last group may never recover because the generations who benefited from the long, sustained, secure and broad prosperity created by the policies of FDR, Truman, Eisenhower, JFK and LBJ, have spent their waning years supervising the dismantling of those policies and the degrading of the American economy. They decided to follow the wealthy speculators who sold the American economy and banked their gains offshore.

The NRA is arming kids to kill zombies

There was an interesting interview with Tim Dickinson on MSNBC this afternoon. Host Martin Bashir showed us that grade schoolers are the latest target market of the NRA's gun manufacturer clients. The interview included video of kids like Billy next door firing hundreds of rounds in seconds at targets that looked like people. Fun.

The targets weren't the usual paper silhouette of an intruder. They were life-sized human dummies. For the purposes of gun practice they were people. They were realistically made human dummies that began to bleed whenever a shot connected. Bubbling blood from bullet wounds is the new sales technique to the NRA crowd. And these techniques are being pitched at small children. Schoolkids the age of the innocents murdered at Newtown.

To the NRA, which condemned the game industry as despicable, shooting high powered weapons is a game. It's a game designed to tie into the zombie craze, the vampire craze. The NRA is carefully and cannily dehumanizing the humans killed by their products.

One of these target dummies is named The Ex.


It's made of lifelike plastic. It is a blood oozing figure of a woman. Not a man. A woman. The woman is dressed provocatively, the way the exes of angry ex husbands dress in their angriest fever-dreams. What is the message here?

They sell machine guns that come in pink. As far as I know there is no Barbie murder weapon, no Hello Kitty murder weapon. Not yet.

Inequality Is Bad For Us

In scientific tests animals reject inequality. So do children. Why do adults keep silent on it?

Maybe because the beneficiaries of inequality punish criticism. In grade school, teachers reward fairness. In the real world the controllers of income and markets reject fairness because they can get away with it, and they suppress dissent (as shown in this National Journal piece). They get away with it because they hold power. They hold us hostage because they have the money.

Joseph Stiglitz, one of our great Nobel Prize winning economists, says inequality is holding back our economic recovery. (Here's his piece in the NYTimes.)

Paul Krugman, our other Nobel economist, also liberal, doesn't disagree exactly but he doesn't see how Stiglitz's argument works out.

This is how liberal economists are different than conservative ones: they are skeptics. They demand you show them the math, which is not true of the economists who gave us the economic collapse.

Just ask Glenn Hubbard. (This Rolling Stone article does a good job dissecting his conflicts of interest.) He was one of the midwives of the economic crisis. He built the car that drove us over the cliff. He was a Bush economist while he was also earning money rationalizing what the large financial institutions were doing that caused the crisis. (Watch the documentary Inside Job if you want to see Hubbard talk himself into a corner.)

Closed systems that self-justify tend to make the same mistakes over and over again, and they do this because no matter what mistakes they make the people who run them find ways to keep their money and their power.

Krugman has a neat seven minute tutorial on inequality that's worth watching.

Inequality is not natural, it is not common sense, it is not good for us. It is, however, good for the people who keep telling us it's natural, sensible and good. Ask yourself this, what kind of a businessman works to impoverish his customers? That is what Reaganomics has done over the past three decades. The engine of any strong economy turns out to be workers who earn a good living. See Krugman's video above.

But now even conservative economic journals like the Economist are beginning to see the damage inequality does. For one thing it insulates the rich from negative consequences and healthy skepticism. It also is just bad economics on a fundamental level, never mind what economic yes-men say to their wealthy clients.

Inequality, I'm speaking of vast inequality like we have today, isn't fair, isn't inevitable, isn't natural, isn't sensible, and isn't a good thing. It's holding us back. It's even holding back the rich who think it benefits them. What would happen if our politicians understood this?

Republicans and The Greater Fool

I didn't realize that pretending to be charitable could save a person millions of dollars in taxes every year. But it's worked for Romney. He can promise to give to charity and take the deduction and then not give as much or at all, as this article in Bloomberg News explains.

Fuzzy Math? Voodoo Economics? Flim-Flam? Senate Republicans prove that math that you refuse to look at doesn't actually exist. At what point can you prosecute a political party for covering up the truth? Or for lying? There's a non-partisan report that shows clearly that cutting tax on the very rich doesn't help the economy at all. No wonder they're hiding it.

Information is power. Hiding it gives power to the powerful, who tend to be Republicans and their clients. Republicans prefer the public didn't listen to Nobel Prize economists like Joseph Stiglitz and Paul Krugman. Listen anyway. Make them mad. And vote accordingly.

There is a weird consistency to Republican thought (if I can call it that.) They prefer Americans believe bad science and non-science rather than the best science. They want Americans to ignore what NASA and our top atmospheric scientists have been saying about climate change. They want us to ignore the evidence of Hurricane Sandy. Republicans persist in trusting numbers that don't add up, plans that their candidate won't show, voodoo economic policies that failed disastrously during the Bush years.

There is, in economics, something called the "Greater Fool Theory", which says that you can always sell a product, no matter how bogus, no matter how foul and dangerous, simply by finding someone more foolish than you are, or more ill-informed or gullible, to buy it. To increase the number of greater fools you can also lie.

(As Romney is doing in Ohio and Michigan right now with his ads falsely claiming Obama somehow forced Jeep to send American jobs to China. Obama saved Jeep and Jeep is increasing its hiring in Ohio and Michigan.)

Hey Romney––Disaster Isn't a Business Opportunity

Even Republican governors are praising Obama's handling of Hurricane Sandy. Such a contrast with the guitar strumming response we got from a recent Republican president. Romney has urged shutting FEMA down altogether. There's a difference between the two parties. Mega-disasters like this remind us of the importance of good government that works for everyone. Sometimes we really need it.

At Raw Story.

The Washington Post.

Under a President Romney this hurricane's aftermath would look a lot different. Instead of FEMA being ready, fully equipped and on the ground, Romney would open the devastated areas up to the "magic of capitalism". Disasters are a business opportunity in Romney's eyes. An opportunity for profit, and you can imagine how prices could be affected by sudden mass shortages. Don't worry, his friends on Park Avenue would win a bidding war for bottled water, and would probably do well selling their excess. If you think about it, Mr. Romney, looting is a business opportunity, we just don't condone it.

Worth reading and sharing with your fence-sitting friends.

A very good post on the New York Times blog.

At The New Republic.

Also this, also at TNR.

Want irony? Remember "Heckuva Job" Brownie? The man who ran FEMA for Bush, who fumbled the Katrina response, whose previous experience before his government job was running a horse show association? (Maybe he knows Rufalka...) Brownie has criticized Obama's handling of Hurricane Sandy, saying he responded too quickly... Story reported by The Hill newspaper.

I think it comes down to something I saw on a wall last week:

"ObamaCare. RomneyDon't"