Monday, February 20, 2012


Krugman is right again. Today's column is about the stupidity of austerity measures during a recession.

What is it about Big Men (and it's usually men)? When they screw up, they screw up Big, and after they screw up they spend the post screw-up period arranging ways to blame everyone else.

The big money people, the hedge funds, the investment banks, bet long on dubious items and they leveraged themselves to do so. When their bets failed, they couldn't pay up so they were bailed out by us.

But that wasn't enough. They couldn't bear taking any blame for what they'd done, so they blamed the people who were victimized by their greed and overreaching. They blamed the people whose jobs were axed because of the downturn they, the bankers and hedge fund gamblers, had caused. They blamed homeowners whose home values dropped because bankers had wagered those home values too high. They blamed the homeowners' children and the homeowners' dogs. Once they'd blamed everyone but themselves they arranged to punish them. The punishment is called Austerity.

But austerity doesn't work. Let me rephrase that: it works badly. It has a very powerful effect, but the effect is negative. It is like surgeons bleeding a patient who is suffering from loss of blood. It is like an airline pilot whose plane is in a stall deciding it's a good time to conserve fuel.

Austerity is like starving one's children to protect their inheritance. Who does it benefit? The bankers who manage the funds.

Austerity is a financial form of anorexia nervosa, and just as dangerous. It's been proven dangerous, ineffective, wrongheaded and stupid over long years of painful experience. The problem is most people don't have long memories or good understanding of these things and bankers have the money (provided by the taxpayer bailout) to buy advertising and network air time and political influence. They are able to sell anything they'd like, and austerity is what they'd like now––for us, not for them.

Austerity forces everyone to sacrifice to make sure the bankers don't need to. They caused a problem, and we are fixing it––but we are only fixing it for them. We are paying for the damage they did and this payment period is prolonging and deepening the harm done. Austerity causes broad harm to avoid inconveniencing a small group of bankers.

AUSTERITY IS HOW THE RICH TEACH WORKING PEOPLE TO BE POOR. This is a phrase that should be heard more, but without the kind of money bankers have it's not likely to be heard very much on radio or television.

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Monday, February 13, 2012

The Red States Get the Government Spending, Blue States Pay the Bill

Ever wondered why we need journalism? Read this piece from Eric Black. He provides a useful and intelligent analysis of a very important piece of reporting from yesterdays' New York Times.

"Even Critics of Safety Net Increasingly Depend on It" is an eye-opening feature article from the New York Times. It includes an intriguing interactive map showing region by region breakdown of government spending and taxes paid.

Here's Krugman's commentary on it, with a useful chart.

The point is this: the places and people in the U.S. that oppose government the most are often the places that need it the most and rely on it the most, who take the most from the federal government in subsidies and programs and contracts, in dollars, but pay in the least in taxes.

These Red areas and people oppose the taxes they aren't paying anyway, and oppose the government payments they are receiving more than other bluer, more Democratic areas and people. The areas that pay MORE in tax dollars than they receive in government payouts? Mostly Democratic areas populated by Democrats.

There is something seriously wrong with this picture. And there's something wrong that you don't hear this repeated every time a Republican stands up and hollers about gummint spendin'. All he needs to do is reject it. And if he doesn't it would be less hypocritical if he'd agree to pony up for the government millions he brings to his district. He won't though.

And it's not a new story. Simply underreported. Suppressed you could say. Don't believe the New York Times? Read on.

From Business Insider, reported in 2011.

A tax professor's commentary on the same bizarre red-state paradox, from 2004.

A 2002 paper from the ultra conservative Hoover Institution and Ohio State about The Red State Paradox.

The Washington Post's economist Ezra Klein posted a map of this bizarre but true correlation in 2010.

Data from the Tax Foundation

A 2010 article from SLATE.

You also hear Republicans shouting about the immorality of Democrats. But it's the Red States that have higher measures of the usual moral failures, divorce, teen pregnancy, murder and smut.

From Vox Nova, a Catholic blog, a chart of the correlation between Red States and high divorce, teen pregnancy and pornography rates.

From James Wolcott, a 2006 article on the higher "moral failure" rate in the "ultra-moral" Red States vs. the allegedly immoral Blue States.

It's factual and downright stunning. Especially because Americans in large numbers are angry about something that is not true. Which also shows the power of journalism...or "journalism" in the case of FoxNews, which is a player in the spreading of bad information and the shaping of ignorant opinion.

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Saturday, February 11, 2012

The Fairy Tales of the Business Press

Brad Delong does a pretty thorough job of dissecting the inconsistencies in the so-called "conservative" economic line, the anti-Keynesian, austerity, drown-it-in-the-bathtub anti-government side of the economic argument we've been stuck in for three years. Why isn't the conservative side subjected to any logical analysis by the business press?

Is it just too complicated for business readers? Even for those "superheroes" who are supposed to know more than ordinary workers and citizens? Come on. Superheroes are capable of digesting this, even if they are busy. They ought to find time to think.

Or is it just too embarrassing for business readers? Businesspeople are worshipped as "job creators." Is it wrong to question their beliefs? Is it heresy to doubt the prevailing business thinking––which says that only private sector spending is holy?

Is it only heresy to doubt business orthodoxy if it endangers ad pages and TV air those businesspeople tend to buy as business owners?

How is it that conservatives, who seem to believe in an invisible hand of the market, who believe our economy is magically protected by fairies and elves (no government regulation required), are allowed to call Keynesian economics "a fairy tale" without being challenged about their own magical thinking?

Keynes, who was no liberal, had a fully rounded theory that was borne out by sustained prosperity and growth (and the absence of panics) during the best forty year period in the history of our country––and the planet.

The problem believers in unfettered capitalism had with Keynes was that he advised behaving more like ants than grasshoppers (to borrow from a cautionary fable. Keynesians prefer fables to fairy tales.) That we be prudent and save for rainy days, that we rein in our appetites during up times (with regulation and fair taxation) and support a flagging economy by spending and building during down times. Which is pretty middle-of-the-road stuff, economicswise. Or was Eisenhower a Communist?

The nagging suspicion that I keep having is that these so-called business conservatives, in order to help their Republican operatives, have been sitting on their capital for three years, not spending it, not hiring, not lending, blocking stimulus packages through their elected proxies, keeping the economy down, hoping to hang a bad economy around President Obama's neck like a burning tire. They hoped it might put a Republican regime back in the White House.

(It would be interesting to read the Republican emails with their corporate and banking clients, hoping and planning to foil Obama's recovery efforts. I don't doubt they exist. Airing them would be a good thing. It'd only be fair, considering the Republicans in Congress surreptitiously read the Democrats' emails for over a year in '03 and '04.)

The business sector wants Republicans back in full control. Oh how they want it. But we all know how clever the last Republican regime was. Taking a record surplus and making into a record deficit. Their energy policy resulted soaring fuel prices. Their laissez faire economic policy set up economic collapse. But that Republican president was a businessman. A failed businessman several times over, but a member of the club.

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Monday, February 06, 2012

Republicans Don't Know Fact From Satire

Is it more honest and representative to be stupid if your voters are stupid? Is stupid the new preferred profile? Is it smart to pretend to be stupid if you're representing a Republican district?

John Fleming, R-Louisiana posted a outrageous piece of nonsense from The Onion as if it were true. Luckily for him the nonsense he posted to Facebook fit in perfectly with the nonsense "facts" that other Republicans say about Planned Parenthood. Was he being stupid or is he smart enough to know his constituents don't know the difference between truth and fiction?

On a recent Colbert Report we hear Republican John Kyl stating a falsehood about Planned Parenthood and then defending it by saying he didn't mean for it to be taken factually... Colbert cracks up several times trying to tell this story, but it's more pathetic than funny. Kyl expected to be believed.

The thing is John Kyl isn't a satirist the way the Onion or Stephen Colbert are satirists. People expect him to know fact from nonsense. When he doesn't know truth from satiric exaggeration or fiction or lies his constituents don't either, which is exactly what the Republicans want. Satirists make fun of stupidity, Republicans exploit it.

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Wednesday, February 01, 2012

The Oldest Con in the World

This talk from every Republican out there––this push to privatize everything. Privatize Social Security, Medicare, schools, roads, prisons, the military––it's all about taking the public's money and putting it into fewer pockets. Never mind whether the thing being privatized continues to function.


It's about taking the money out. Profit rather than public service. If something is working it has funding; this privatization scheme, and it is a scheme, is all about taking that funding and putting it into fewer pockets, letting the machinery run without oil, without maintenance till it stops. Privatizing profit and socializing risk. Leaving the taxpayers and the beneficiaries high and dry. It's the oldest con in the world. Sucking value out and selling off the garbage that is left. Like in the film Glengarry Glen Ross.

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