News of the Day - 01/14/11

Paul Krugman: Can Europe Be Saved?

THERE’S SOMETHING peculiarly apt about the fact that the current European crisis began in Greece. For Europe’s woes have all the aspects of a classical Greek tragedy, in which a man of noble character is undone by the fatal flaw of hubris.

Not long ago Europeans could, with considerable justification, say that the current economic crisis was actually demonstrating the advantages of their economic and social model. Like the United States, Europe suffered a severe slump in the wake of the global financial meltdown; but the human costs of that slump seemed far less in Europe than in America. In much of Europe, rules governing worker firing helped limit job loss, while strong social-welfare programs ensured that even the jobless retained their health care and received a basic income. Europe’s gross domestic product might have fallen as much as ours, but the Europeans weren’t suffering anything like the same amount of misery. And the truth is that they still aren’t.

Poll: Obama rebounding, would beat GOP rivals, crush Palin

Steven Thomma | McClatchy Newspapers
last updated: January 14, 2011 12:18:44 PM

WASHINGTON — President Barack Obama has bounced back from his low point after November's elections and enjoys stronger support heading into the 2012 election cycle, particularly against Sarah Palin, according to a McClatchy-Marist poll released Thursday.

Obama's fortunes appear to be rising along with the country's. The poll found a jump in the number of people who think the country's heading in the right direction. Also, the president probably benefited from the productive post-election session of Congress.

Paul Krugman: A Tale of Two Moralities

On Wednesday, President Obama called on Americans to “expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy, and remind ourselves of all the ways our hopes and dreams are bound together.” Those were beautiful words; they spoke to our desire for reconciliation.

But the truth is that we are a deeply divided nation and are likely to remain one for a long time. By all means, let’s listen to each other more carefully; but what we’ll discover, I fear, is how far apart we are. For the great divide in our politics isn’t really about pragmatic issues, about which policies work best; it’s about differences in those very moral imaginations Mr. Obama urges us to expand, about divergent beliefs over what constitutes justice.

The Fed Has Spoken: No Bailout for Main Street

Ellen Brown | Friday 14 January 2011

The Federal Reserve was set up by bankers, for bankers, and it has served them well. Out of the blue, the Fed came up with $12.3 trillion in nearly interest-free credit to bail the banks out of a credit crunch they created. That same credit crisis has plunged state and local governments into insolvency, but the Fed has now delivered its ultimatum: there will be no "quantitative easing" for municipal governments.

On January 7, according to The Wall Street Journal, Federal Reserve Chairman Ben Bernanke announced that the Fed had ruled out a central bank bailout of state and local governments. "We have no expectation or intention to get involved in state and local finance," he said in testimony before the Senate Budget Committee. The states "should not expect loans from the Fed."

So much for the proposal of President Barack Obama, reported in Reuters a year ago, to have the Fed buy municipal bonds to cut the heavy borrowing costs of cash-strapped cities and states.

News of the Day - 01/12/11

There Is a Global Aristocracy in the Making -- and the Greedy Super-Rich Think They've Earned It

By Lindsay Beyerstein, Media Consortium
Posted on January 11, 2011, Printed on January 12, 2011
http://www.alternet.org/story/149499/

Meet the new global elite. They’re pretty much the same as the old global elite, only richer and more smug.

Laura Flanders of GritTV interviews business reporter Chrystia Freeland about her cover story in the latest issue of the Atlantic Monthly on the new ruling class. She says that today’s ultra-rich are more likely to have earned their fortunes in Silicon Valley or on Wall Street than previous generations of plutocrats, who were more likely to have inherited money or established companies.

Perps in the White House

Posted on Jan 12, 2011
By Robert Scheer

While it is widely recognized that the banking meltdown has left enormous economic pain and political upheaval in its wake, it is amazing that the folks who created this mess are rewarded with ever more important positions in our government. Yet the recent appointments of Gene Sperling and William Daley, key Wall Street-connected perps of this crisis, to the most critical positions in the Obama White House have not generated much controversy.

The justification for the media’s indifference appears to be that the new appointees can hardly be worse than the hustlers they replaced. From its beginning, the Obama administration has been flooded with veterans of the Clinton White House who pushed through the radical deregulation that Wall Street had long sought and were rewarded with fat fees from the big banks when they left government.

Few foreclosures, no bank failures: Canada offers lessons

By Kevin G. Hall | McClatchy Newspapers

TORONTO — Maybe Canada has something to teach the U.S. about housing finance.

One in 4 U.S. homes is thought to be worth less that the mortgage being paid on it. One in every 492 U.S. homes received a foreclosure notice in November. For the fourth year running, analysts are speculating on where the bottom is for U.S. real estate.

No such worries up here in Canada — yet its system of mortgage finance gets little attention in the U.S.

We can feed 9 billion people in 2050

01:00 12 January 2011 by Debora Mackenzie
Magazine issue 2795.

The 9 billion people projected to inhabit the Earth by 2050 need not starve in order to preserve the environment, says a major report on sustainability out this week.

Agrimonde describes the findings of a huge five-year modelling exercise by the French national agricultural and development research agencies, INRA and CIRAD. It is the second report on sustainability launched this week to provide a healthy dose of good news.

Pension Envy

By Dave Johnson
Created 01/11/2011 - 8:10am

Since the 80s many employers have stopped offering health care, pensions and other benefits to their employees. Many are also cutting pay and hours, while increasing the workload. So more and more people are hurting. As more and more of us fall further and further behind, corporate/conservative propagandists use resentment to drive anti-union feelings. They tell people to oppose unions, saying, "Why should they have it so good?" The real question you should ask is, "Why should we have it so bad?"

Paul Krugman: Economics and Morality

Mark Thoma directs me to Eric Schoeneberg, who argues that the right is winning economic debates because people believe, wrongly, that there’s something inherently moral about free-market outcomes. My guess is that this is only part of the story; there’s more than a bit of Ayn Randism on the right, but there’s also the appeal of simplicity: goldbuggism is intellectually easy, Keynesianism is intellectually hard, as evidenced by the inability of many trained economists to get it.

News of the Day - 01/10/11

How AT&T, Verizon and the Telecom Giants Have Captured the Regulator Supposed to Control Them

Our telecom industry's overseer doesn't seem to have any control to stop the greed. That's because it's a puppet of the industry giants.

In a recent AlterNet article, we detailed how the Federal Communications Commission (FCC) helped increase the “FCC Line Charge” (SLC), now capped at $6.50 per line, that is imposed on every residential and business phone line. It is a charge that is usually hidden among the “taxes and surcharges” section of the phone bill. It does not go to fund the FCC, but is a direct subsidy to phone companies.

However, the full story of the role AT&T, Verizon and others played in the FCC’s deliberations establishing the SLC has yet to be told. It is a model of what is known as “regulatory capture,” the process by which a federal or state regulatory or other government agency becomes too cozy with those it is charged to oversee.

Tom DeLay, former U.S. House leader, sentenced to 3 years in prison

By R. Jeffrey Smith
Washington Post Staff Writer
Monday, January 10, 2011; 5:15 PM

AUSTIN - Former House majority leader Tom DeLay, the brash Texan who helped build and tightly control a Republican majority in his chamber for three years, was sentenced by a state judge on Monday to three years in prison for illegally plotting to funnel corporate contributions to Texas legislative candidates in 2002.

CBO: Repealing Health Care Would Increase Deficit by $230 Billion

Sunday 09 January 2011

The new Republican-controlled House has laid out its first major target - the federal law aimed at overhauling the health-care system. But an analysis from the nonpartisan Congressional Budget Office (CBO) warns that the repealing health care legislation could increase the federal deficit by $230 billion in the next decade and leave 32 million more Americans uninsured.

Introduced by House Republicans on January 5, the "Repealing the Job-Killing Health Care Law Act," also known as H.R. 2, targets the Patient Protection and Affordable Care Act, as well as the provisions of the Health Care and Education Reconciliation Act of 2010 that are related to health care. Deliberations on the bill are expected to start immediately.

The Bill Daley Problem

By Simon Johnson

Bill Daley, President Obama’s newly appointed chief of staff, is an experienced business executive. By all accounts, he is decisive, well-organized, and a skilled negotiator. His appointment, combined with other elements of the White House reshuffle, provides insight into how the president understands our economy – and what is likely to happen over the next couple of years. This is a serious problem.

This is not a critique from the left or from the right. The Bill Daley Problem is completely bipartisan – it shows us the White House fails to understand that, at the heart of our economy, we have a huge time bomb.

How Can Republicans Hate the Individual Mandate?

The individual health care mandate is a conservative concept that conservatives now say they despise. What gives?

By Eliot Spitzer
Posted Monday, Jan. 10, 2011, at 12:26 PM ET

When Congress returns to work after pausing to reflect on the horror of the Arizona shootings, health care repeal will top the agenda for Speaker John Boehner and the Republican Party. "Obamacare" galvanized opposition to the Obama presidency within Republican and independent ranks. And few issues within health care generate such a visceral and often hysterical response as the "individual mandate"—the obligation that all people participate either by purchasing insurance or paying a tax whose proceeds would be used to defray the costs of uninsured health care and reduce premiums.

Zero Hour for Social Security

As I have previously warned--and I hope I'm wrong--President Obama seems on the verge of needlessly cutting America's most valued social program and the one that best differentiates Republicans from Democrats. This is part of a vain effort to appease deficit hawks in his own party and on Wall Street, as well as Republicans who are utter hypocrites when it comes to deficits--increasing them as long as the purpose is tax cuts but then turning around and demanding program cuts in order to reduce the deficits they created.

All the choreography is in place for the president to embrace Social Security cuts in his upcoming State of the Union address.

Being poor can suppress children's genetic potentials

AUSTIN, Texas — Growing up poor can suppress a child's genetic potential to excel cognitively even before the age of 2, according to research from psychologists at The University of Texas at Austin.

Half of the gains that wealthier children show on tests of mental ability between 10 months and 2 years of age can be attributed to their genes, the study finds. But children from poorer families, who already lag behind their peers by that age, show almost no improvements that are driven by their genetic makeup.

News of the Day - 01/09/11

Obama Created More Jobs In One Year Than Bush Created In Eight

This morning, the Labor Department released its employment data for December, showing that the U.S. economy ended the year by adding 113,000 private sector jobs, knocking the unemployment rate down sharply from 9.8 percent to 9.4 percent — its lowest rate since July 2009. The “surprising drop — which was far better than the modest step-down economists had forecast — was the steepest one-month fall since 1998.” October and November’s jobs numbers were also revised upward by almost 80,000 each. Still, 14.5 million Americans remain unemployed, and jobs will have to be created much faster in coming months for the country to pull itself out of the economic doldrums.

Will Our Economy Ever Recover From the "Greatest Recovery"?

Mark Provost | Saturday 08 January 2011

In a January 2009 ABC interview with George Stephanopoulos, then President-elect Barack Obama said fixing the economy required shared sacrifice: "Everybody's going to have to give. Everybody's going to have to have some skin in the game." [1]

For the past two years, American workers submitted to the president's appeal - taking steep paycuts despite hectic productivity growth. By contrast, corporate executives have extracted record profits by sabotaging the recovery on every front - eliminating employees, repressing wages, withholding investment and shirking federal taxes.

Let Obama’s Reagan Revolution Begin

By FRANK RICH

BARACK OBAMA’S Christmas resurrection was so miraculous that even a birther or two may start believing the guy is a Christian.

Nothing captured the president’s sudden reversal of fortune more vividly than the Linda Blair-like head spin of the conservative pundit Charles Krauthammer, who pronounced the Obama agenda “dead” on Fox News on Nov. 3 only to lead the bipartisan media hordes anointing him “the new comeback kid” six weeks later. Last week Obama’s Gallup job approval rating fleetingly hit 50 percent for the first time in eight months. Even in post-shellacking mid-December, polls found that Americans still trusted him more than Washington’s Republican leaders to fix the nation’s ills — health care included, according to the ABC News-Washington Post survey on that question.

America's housing bubble still deflating

As they failed to spot the bubble, most economists seem oblivious of the threat of further market falls to come

Dean Baker | Wednesday 5 January 2011 14.00 GMT

If house prices fall by 15% in 2011, the likely cut in consumer spending could cost 1% in GDP.

How many economists does it take to see an $8tn housing bubble?

The answer to that question has to be many more economists than we have in the United States. Very few economists saw or understood the growth of the $8tn housing bubble, whose collapse wrecked the economy. This involved a degree of inexcusable incompetence from the economists at the Treasury, the Fed and other regulatory institutions who had the responsibility for managing the economy and the financial system.