Thursday, April 28, 2011

When God's work requires building walls, not bridges

A story in Mother Jones points us to the historian favored by the GOP elite (Gingrich, Bachmann, Huckabee), a man named David Barton. Here's how MoJo describes him - as a...

"...Republican activist and minister who founded WallBuilders, a for-profit evangelical outfit that works to inject religion into politics. Barton holds some pretty unconventional views, and in the past he has spoken alongside fringe figures like Holocaust deniers and white supremacists. Among other things, he claims that Jesus would oppose the capital gains tax and the minimum wage; that global warming is "self-correcting"; and that the nation's homeland security apparatus has been infiltrated by members of the Muslim Brotherhood. He also contends that the separation of church and state is a perversion of the Founding Fathers' intention to create a Christian nation."
Let's just say Barton and I are not likely to be invited to the same parties.

Here's what Mike Huckabee says about Barton:
"I just wish that every single young person in America would be able to be under his tutelage, and understand something about who we really are as a nation," Huckabee said. "I almost wish that there would be…a simultaneous telecast, and all Americans would be forced—forced at gunpoint, no less—to listen to every David Barton message, and I think our country would be better for it."
Leave it to a Republican to bring guns into a discussion of religion!

Wednesday, April 27, 2011

As WalMart is my witness, consumer budgets are stretched thin...

WalMart didn't reach the number one spot on the Fortune 500 list by being wishy-washy in its offerings. No, the company has seen incredible success because it lives up to its brand promise every day by offering consumers the opportunity to Save money. Live better. Since it first opened its doors in 1962, the world's biggest retailer has fueled company growth by consistently offering low prices to its customers.

Today, WalMart is struggling. The company has seen seven consecutive quarters of declining sales.

In an article in the Wall Street Journal, Mike Duke, WalMart's CEO, says that for the WalMart consumer, "there is more pressure today than a year ago," and notes that rising gas prices are impacting the consumer's ability to purchase other goods, like those sold at WalMart.

What does it say when a company known for its focus on cost-conscious consumers is struggling? That too many people are finding it very hard to make ends meet in America.

Here's the story:

On the failure of "the invisible hand" to influence our financial sector

In Alan Greenspan's book, The Age of Turbulence, one of the issues he explores is the failure of economic populism in Latin America. Here are his thoughts:
"The dictionary defines 'populism' as a political philosophy that supports the rights and power of the people, usually in opposition to a privileged elite. I see economic populism as a response by an impoverished populace to a failing society, one characterized by an economic elite who are perceived as oppressors. Under economic populism, the government accedes to the demands of the people, with little regard for either individual rights or the economic realities of how the wealth of a nation is increased or even sustained."
So in Greenspan's view as a self-described Libertarian Republican, economic populism comes to life in "failing societies" that have significant income inequality and are dominated by an economic elite. And in Greenspan's mind, it is not the government that can make the required changes to address the failures of the society; it is the markets that are the key to reducing failure.

Our own economy is a mixed economy, market-driven, but with government policy and regulation developed to counterbalance the very real excesses of the markets. Though it is mixed, the US economy is not driven by the visible hand of a government acting as an economic populist, but is instead an economy that predominantly looks to the invisible hand of the markets to address and resolve economic failure.

Or at least, so I thought. 

Tuesday, April 26, 2011

My questions for Ben's first press conference

Yves Smith at Naked Capitalism has issued a crowd-sourcing call for questions we'd like Ben Bernanke to answer at the first ever press conference by a Fed chairman. Here are somethings I'd like to know...

1) How much has the Federal Reserve spent on acquiring toxic assets from banks since their collapse?

2) How has absorbing the toxic assets of banks helped the residents of Main Street?

3) What benefit does the US gain from having investment banks considered "bank holding companies"?

4) How has becoming a "bank holding company" changed the behaviors of investment banks in ways that have created stability for the US economy? Or has it simply allowed them to continue to engage in risky business activities backed by the full faith of the US government?

5) Does the fear of inflation lead the Fed to develop policies that discourage wage increases?

6) Do you see a time in the near future when the banks in our financial sector will be force to deal with the consequences of their own losses - even if it means bankruptcy for the company - without federal support to prop up their operations?

7) What, for you, are the key lessons of the Lehman bankruptcy, and how can we use those lessons to help us wean the American financial sector from its dependence on the Fed?

8) Do you see the possibility of having a financial sector able to stand alone without Federal support when times get tough or are we permanently wedded to bailing the TBTF banks?

9) Does Dodd Frank go far enough to ensure we'll get a financial sector that can exist without federal bailouts and support when they take risks too big to succeed?

10) If you knew then in 2008 what you know now, would you allow bankers at banks requiring massive federal bailouts to used tax dollars to pay for bonuses? Do you feel that protecting bankers from the consequences of their failure is the correct approach to protecting the American economy?

Friday, April 15, 2011

Numbers lie - AKA Why Mike Konczal is wrong about housing lock

Mike Konczal of Rortybomb has a long post with many graphs that he feels prove housing lock is "not a major part of this crisis."

 He's wrong. Housing lock exists now; it is a problem; and it will continue to be a problem until people get their heads above water once again. Now how that will happen, I'm not sure at this point. But that millions of people are trapped in houses that cost less today than the value of their loan remains a big issue for many reasons. Though I am not an economist, nor do I have charts to display, I will explain some of the flaws of his argument.

Wednesday, April 6, 2011

The scariest sentence ever seen in the WSJ

Lots of hullabaloo over Paul Ryan's op-ed piece in the Wall Street Journal, you know, the one with the headline that reads: The GOP Path to Prosperity.

Given how devoted the GOP is to their very rich base, I shudder to think about how they define prosperity. And since their path prior to this has led to much of the nation being placed on rickety life boats in danger of being swamped by the wake of the big yacht sailing majestically away on rising tides, I don't have much hope this path will be built for the likes of me.

But the scariest sentence ever seen in the WSJ is not found in Ryan's op-ed piece. Doesn't mean his piece isn't scary - it's actually very scary to think we will get rid of this massive post-recession deficit by apparently gutting Medicare for those of us not old enough to need it right now.  

[Can we really say, as Ryan does, that Medicare has a flawed incentive structure that "rewards states for adding to the rolls?" Or are states adding to the rolls because demographically, the Boomers have reached the age needed to join the plan? And how do private insurers - the ones who refused to cover the elderly in the 1960s - feel about adding an influx of elderly patients to THEIR rolls?]

Scary stuff, yes. But that scariest sentence ever in the WSJ is in another story about the Ryan plan, bearing the headline: New Proposal Hits Old Hurdles of Budget Math. 

And that sentence I find so frightening is:
"The hope is that competition among private insurers will yield hitherto-unrealized efficiencies." 

Monday, April 4, 2011

Finding Walker at the intersection of ideology and corruption

With no managerial experience, no college diploma and two drunk driving convictions to his credit, there seems to be little that would recommend Brian Deschane for an $81,500 managerial job in the Wisconsin state government.

Especially in today's politically charged environment, what with Governor Scott Walker looking to shed kazillions from the government budget by slashing education and other social services and going to battle over the state's pension funds for government employees.

So it's a surprise to learn that the anti-big government, "let's trim the budget" governor of Wisconsin has hired Brian Deschane for that $81,500 managerial job.

What's Brian's key qualification? He's the son of a lobbyist who gave big to the Walker campaign.

Think he got this job on his own merits? If you do, I've got some CDOs for you that will without a doubt give you a big return on your investment...