Paul Krugman: Romney's Economic Closet

According to Michael Kinsley, a gaffe is when a politician accidently tells the truth. That’s certainly what happened to Mitt Romney on Tuesday, when in a rare moment of candor — and, in his case, such moments are really, really rare — he gave away the game.

Speaking in Michigan, Mr. Romney was asked about deficit reduction, and he absent-mindedly said something completely reasonable: “If you just cut, if all you’re thinking about doing is cutting spending, as you cut spending you’ll slow down the economy.” A-ha. So he believes that cutting government spending hurts growth, other things equal. 

Iceland Solves Banking Crisis by Indicting Bankers, Forcing Mortgage Relief

by Kenneth Thomas

Via Mark Thoma's Economist View, I came across an interesting blog on financial regulation called Trust Your Instincts. Lately, the author, "Richard," has written a set of posts comparing two models of dealing with the financial crisis, which he calls the Swedish model (used by Sweden and Iceland) and the Japanese model (used by Japan, the U.S., and the U.K.).

Here is his description of the two models:

Regular readers know that under the Japanese model losses on the excesses in the financial system are only recognized as banks generate the capital to absorb them.  This is good for banks because the model involves hiding their true condition and pursuing policies designed to boost bank earnings.  It is bad for the economy because it distorts asset prices and access to capital (for proof, look at the performance of Japan's economy). The alternative is a Swedish model that is bad for banks and good for the economy.  It is bad for banks because they are required to recognize the losses on the excesses in the financial system today.  It is good for the economy because it avoids the distortion in asset prices and access to funding associated with hiding the losses under the Japanese model (for proof, look at the performance of Sweden's economy).

The Right-Wing Plot to Undermine Science in Public Schools

By Katherine Stewart, AlterNet
Posted on February 24, 2012, Printed on February 25, 2012

Leaked documents reveal a right-wing think-tank's plans to undermine the teaching of climate science -- and defund public education in the process.


Last week, climate science watchers confirmed what they already knew about the climate science “skepticism” of the Heartland Institute – a “free-market” think-tank previously known for taking money from tobacco companies to question the health risks of second-hand smoke.

As leaked documents now make clear, some of the Institute’s most prominent donors have a strong financial interest in sowing doubts about climate science. These documents also show that providing critical insight on humanity’s scientific knowledge matters far less to the group than running a lobbying and communications business aimed at undermining public confidence in science. (Although the details concerning the circumstances of the leak are the subject of much ongoing debate, the substance of the information revealed is not in dispute.)

Feingold: Voting against the PATRIOT Act ‘one of the best things I’ve done’

By Eric W. Dolan
Wednesday, February 22, 2012 22:12 EST

During an appearance Wednesday on CNN, former Sen. Russ Feingold (D-WI) said he “absolutely” did not regret being the only Senator to vote against the PATRIOT Act following the September 11 terrorist attacks.

“That was probably one of the best things I’ve ever done,” he said.

Revelations on NYPD Surveillance of Muslims Contradict Bloomberg Claims

by Justin Elliott
ProPublica, Feb. 22, 2012, 6:24 p.m.

The Associated Press published a story today detailing how, in 2007, undercover New York Police Department officers investigated the Muslim community in Newark, N.J., producing a secret report profiling mosques, Islamic schools and Muslim-owned businesses and restaurants.

The story, based on a copy of the 60-page report obtained by AP, concludes that the surveillance project was undertaken despite "no evidence of terrorism or criminal behavior. It was a guide to Newark's Muslims."

To Big to Jail

Simon Johnson

2012-02-22

WASHINGTON, DC – Among the fundamental principles of any functioning justice system is the following: Don’t lie to a judge or falsify documents submitted to a court, or you will go to jail. Breaking an oath to tell the truth is perjury, and lying in official documents is both perjury and fraud. These are serious criminal offenses, but apparently not if you are at the heart of America’s financial system. On the contrary, key individuals there appear to be well compensated for their crimes.

As Dennis Kelleher of Better Markets has argued, the recent so-called “robo-signing” settlement – in which five large banks “settled” their legal liability for carrying out fraudulent foreclosures on mortgages – is a complete sell-out to the financial industry.

The Volcker Rule, Made Bloated and Weak

February 22, 2012, 12:04 pm
By JESSE EISINGER

Last week, it finally became clear that the Volcker Rule was as good as dead.

The Volcker Rule, named after Paul A. Volcker, former chairman of the Federal Reserve, is meant to bar financial institutions that are protected and subsidized by the federal government from trading for their own accounts. That is, it’s pretty simple: Traders shouldn’t speculate for their own personal gain using the money you and I pay in taxes.

Yet bank lobbyists with complicit regulators and legislators took a simple concept and bloated it into a 530-page monstrosity of hopeless complexity and vagueness.

They couldn’t kill the rule. Instead, they are getting Congress and regulators to render it morbidly obese and bedridden.

Reducing Abortions: It's the Economy, Stupid

Thursday, 02/23/2012 - 9:36 am by Bryce Covert
 
If we put women back to work, lifted them out of poverty, and funded social services they rely on, fewer women would turn to abortion.

It seems the cat’s finally out of the bag these days: conservatives aren’t just concerned with saving the babies from abortions when it comes to reproductive rights. They are now outspoken about being against access to contraception — and some of them have even come out against non-procreative sex. Women’s rights activists have long warned that they were coming for our birth control; now it’s hard to deny they were right all along.

One big clue this whole time has been a simple fact: if conservatives are so hell-bent on preventing abortions, one of the best things they can do is support family planning services and access to contraception. Yet the last time we saw an openly pro-family planning Republican was the ’80s, when George H.W. Bush was in office. Meanwhile, all Republican 2012 candidates have signed personhood pledges that endanger many forms of contraception, Santorum himself has said birth control is bad, and I’ve lost track of how many times Republicans have tried to defund Planned Parenthood, which supplies contraception to low-income women. But as Irin Carmon laid out, the connection between increasing access to contraception and lowering abortion rates is very clear.

Growth does not equal progress: Why GDP is (increasingly) obsolete

COMMENTARY | February 21, 2012

Gross Domestic Product badly overstates the benefits of unequal growth and understates the value of intangibles, writes an advocate of alternative measurements. As a result, journalists should stop granting it talismanic significance in defining the nation's progress.

By Lew Daly
ldaly@demos.org

A pervasive narrative linking growth in the Gross Domestic Product (GDP) to social progress has shielded our leaders from accountability for a reality in which market growth and real social progress have actually diverged -- even sharply diverged -- in some ways. It's past time we found another way to measure our nation’s progress.

The idea of GDP, or "national income accounting," was introduced in the 1930s, in response to the Great Depression. With a 30 percent contraction of the economy unfolding, it certainly made sense to devise a common national standard for measuring economic output within our borders.

Low-wage Facebook contractor leaks secret censorship list

By Stephen C. Webster
Wednesday, February 22, 2012 14:40 EST

A secret list curated by social network giant Facebook was published online recently after an employee for one of the company’s third-world contractors, upset at his poor working conditions and meager wage, decided to fight back.

The document reveals exactly what Facebook’s censorship brigade looks for on the social network, which boasts over 850 million users spanning the globe.

Just read the headline

by Steven D
Wed Feb 22nd, 2012 at 06:01:00 PM EST

It tells you all you need to know.

With gasoline consumption trending down, motorists wonder why price keeps rising

Yeah, why are gas prices rising at a time of year that they are traditionally lower than normal?

Well, if you give it some thought, I believe you will come to the same conclusion I have: that this is a rhetorical question.

Climate scientist Peter Gleick admits he leaked Heartland Institute documents

Peter Gleick, a water and climate analyst, says he was blinded by his frustrations with ongoing attacks on climate science


Suzanne Goldenberg US environment correspondent
guardian.co.uk, Monday 20 February 2012 23.06 EST

A leading defender of climate change admitted tricking the libertarian Heartland Institute into turning over confidential documents detailing its plans to discredit the teaching of science to school children in last week's sensational expose.

In the latest revelation, Peter Gleick, a water scientist and president of the Pacific Institute who has been active in the climate wars, apologised on Monday for using a false name to obtain materials from Heartland, a Chicago-based think tank with a core mission of dismissing climate change.

Paul Krugman: Conservatives Twist Economic Debate

Thursday 16 February 2012

Recent facts have not been kind to the political right in the United States: a better-than-expected jobs report; a renewed focus on inequality, driven both by research from the Congressional Budget Office and by the gift of Mitt Romney’s candidacy. What to do?

The answer is to throw a bunch of bogus numbers at the issues, in the hope that something sticks, or at least that the discussion becomes confused.

The Challenge to Status Quo Economics Everybody isTalking About

By Lynn Parramore, AlterNet
Posted on February 22, 2012, Printed on February 25, 2012

Over the last week, an important approach to economics that has spent years on the sidelines went mainstream: Modern Monetary Theory. This is good news for anyone who wants to see the neoliberal paradigm challenged, and a positive sign to heterodox economists who have difficulty getting a hearing in a field still gripped by outmoded models.

The theory, which provides unusual perspectives on issues including currency, debt, and government spending, kicked off in the mid-90s and has since grown into a movement. Its roster of proponents includes James K. Galbraith; Australian economist Bill Mitchel; Randall Wray and Stephanie Kelton of the University of Missouri-Kansas City; Rob Parenteau; Pavlina Tcherneva; Scott Fullwilier; Warren Mosler; and blogger Marshall Auerback. Their insights have been particularly valuable in countering the deficit hysteria which reached a fever pitch in the U.S. during the summer of 2011, and still darkens policy debates worldwide. (Visit the New Economic Perspectives blog for a primer on MMT).

Leaked Memo Spells Out Extent of Greek Doom

By Matthew Yglesias  |  Posted Tuesday, Feb. 21, 2012, at 8:50 AM ET

Greece can't pay its bills. But even if Greece was relieved from the obligation to service its outstanding stock of debt, it still couldn't pay its remaining expenses. It can't devalue to try to boost its tourist sector. Instead, the rest of the Eurozone is heading into recession which hurts Greece's main shot at export earnings. Draconian as the austerity that Germany, the Netherlands, and Finland are insisting on as a condition of their charity accepting the charity is the only way to avoid an even more draconian round of austerity

Paul Krugman: Pain Without Gain

Last week the European Commission confirmed what everyone suspected: the economies it surveys are shrinking, not growing. It’s not an official recession yet, but the only real question is how deep the downturn will be. 

And this downturn is hitting nations that have never recovered from the last recession. For all America’s troubles, its gross domestic product has finally surpassed its pre-crisis peak; Europe’s has not. And some nations are suffering Great Depression-level pain: Greece and Ireland have had double-digit declines in output, Spain has 23 percent unemployment, Britain’s slump has now gone on longer than its slump in the 1930s. 

Worse yet, European leaders — and quite a few influential players here — are still wedded to the economic doctrine responsible for this disaster.

Mortgage Settlement 'Whitewash': US Taxpayers Will Pay for Big Bank Settlement

Mortgage Deal or Not, Abusive Foreclosures Continue

- Common Dreams staff 

 

UPDATE: Reports in the Financial Times and elsewhere say that US taxpayers may be on the hook to bail out big banks -- again.

Neil Barofsky, the former special inspector-general of the TARP, said this morning that the recently approved mortgage deal between the nation's largest banks was "supposed to be a settlement for this remarkable fraud that the banks and the servicers have created across the country" is, in fact, a "political whitewash" because instead of the banks facing punitive action it "is actually going to involve money flowing from the taxpayer into the banks." And, straight to the point, he said, "We're bailing them out again!"

Responding to Taking Welfare and Hating It

Posted on February 17, 2012

 

Will Wilkinson has a post at the Economist Democracy in America blog - Taking welfare and hating it - responding to the big New York Times story about people’s conflicts with the welfare state, a story that we covered here.  It’s worth reading it all, but here’s part of it blockquoted.  Wilkinson:

Mostly I find a faithful depiction of a common and interesting conflict within many Americans between their de facto dependence on government transfers and their closely-held ideals of independence and self-reliance.

To understand all this, I think it’s important to acknowledge that our so-called “social insurance” programmes, such as Social Security and Medicare, produce a sense of dependency by design…But, like it or not, many Americans do find this dependency humiliating…

A "Capitalist Tool's" Defense of Apple Morphs into an Anti-Obama Screed

William K. Black

Forbes' (which bills itself as the "Capitalist Tool") publisher, Rich Karlgaard, writing in the Wall Street Journal, defends Apple's creation of a criminogenic environment that produces endemic anti-employee control fraud by its suppliers and unlawful and brutal working conditions that Apple refuses to stop.

How does a defense of Apple's suppliers driving their workers to suicide end up attacking Obama? Here's Karlgaard's clumsy but brazen effort. He relies on the January 21, 2012 New York Times article, which recounts Obama's February 2011 dinner meeting with Steve Jobs and other executives. This is Karlgaard's version of the conversation between Obama and Jobs as reported by the New York Times.

Eastern Europe’s Conservative Crackdown on Reproductive Freedom

Saturday 18 February 2012

by: Jake Blumgart, Toward Freedom | Report 

 

Across Eastern and Central Europe, as unemployment surges and the European Union dithers, nationalist conservative and far right parties are on the march. Emboldened right-wing leaders are resurrecting debates around abortion and other reproductive services, even in countries like Hungary, one of the first European countries to explicitly legalize abortion.

“There is a very strong pronatalist [anti-choice] current in Central and Eastern Europe and that goes along with nationalist tendencies in many of these countries,” says Johanna Westeson, the European regional director for the Center for Reproductive Rights. “One of the things that is very visible is the so-called demography argument. Birthrates are very low in Central and Eastern Europe and in an attempt to increase birthrates women’s reproductive rights are being [restricted].”

Rick Santorum’s mysterious, paradoxical manifesto, ‘It Takes a Family’

By Walter Shapiro | The Ticket – Fri, Feb 17, 2012

Every presidential race has its mysteries. Who really won the recent low-turnout Maine caucuses--and why are the Republicans having so much trouble counting caucus votes? Did Mitt Romney's dog-on-the-roof Irish setter Seamus actually try to defect to Canada? But the biggest campaign riddle wrapped in an enigma remains, Why does any politician fantasizing about the White House ever put his name on the cover of a book?

Rick Santorum, who should be basking in his sudden star turn as the poll-vaulting anti-Romney, is the latest author to pay a political price for his literary ambitions. Making the rounds of last Sunday morning's talk shows, the former Pennsylvania senator came under fire for his unflattering comments about "radical feminists" in his half-forgotten 2005 book, It Takes a Family: Conservatism and the Common Good. On "Meet the Press," host David Gregory challenged Santorum to defend his book's claim, "The radical feminists succeeded in undermining the traditional family and convincing women that professional accomplishments are the key to happiness." Rather than try to justify his implicit critique of women of childbearing years finding fulfillment in the workplace, Santorum vaguely affirmed a woman's right to choose her career and gallantly insisted that "the section was written in large part in cooperation" with his (non-working) wife, Karen.

Obama DOJ Tries to Insulate Warrantless Wiretapping Law

ACLU Argues Dragnet Surveillance of Americans Is Unconstitutional

- Common Dreams staff 

 

The government today asked the Supreme Court to overturn an appeals court ruling that allowed the American Civil Liberties Union to challenge the constitutionality of a law that gives the government unprecedented authority to monitor international emails and phone calls by Americans, according to the American Civil Liberties Union (ACLU).

At issue is an appeals court ruling that allowed the ACLU’s case to move forward. It rebuffed Obama administration arguments that the case should be dismissed because the ACLU’s clients cannot prove their communications will be collected under the law, known as the FISA Amendments Act. The ACLU said it was disappointed by today’s request.

China Is Very "Business-Friendly"

By Dave Johnson

February 15, 2012 - 2:52pm ET 

China is very, very "business-friendly." Corporate conservatives lecture us that we should be more "business-friendly," in order to "compete" with China. They say we need to cut wages and benefits, work longer hours, get rid of overtime and sick pay -- even lunch breaks. They say we should shed unions, get rid of environmental and safety regulations, gut government services, and especially, especially, especially we should cut taxes. But America can never be "business-friendly" enough to compete with China, and here is why.

Workers In Dormatories, 12 To A Room, Rousted At Midnight

China is very, very "business friendly." Recent stories about Apple's manufacturing contractors have started to reveal just how "business-friendly" China is. Recently the NY Times' Charles Duhigg and Keith Bradsher exposed the conditions of workers at Apple's Chinese suppliers, in How the U.S. Lost Out on iPhone Work. They describe how China's massive government subsidies and exploitation of workers mean, as Steve Jobs told President Obama, “Those jobs aren’t coming back.”

Burr/Coburn Medicare Plan: 10 Deceptions - and a Free-Market "Death Panel"

By Richard (RJ) Eskow

February 16, 2012 - 11:45pm ET 

There's a new "Medicare" proposal - sorta. It's really the same old bait-and-switch we've seen a dozen times. Still, you gotta hand it to 'em: Republican Sens. Tom Coburn and Richard Burr have taken the usual right-wing think-tank-designed buzzwords, deceptive packaging, and sleights of hand, and have taken them to new heights.

These foundation-forged assaults on the middle class may be old, battered ideas that have been debunked a dozen times, but still they just won't die. Like the old Terminators, they keep coming back with the same mission: Must. Kill. Medicare.

This Week in the War on the Safety Net

By Jon Perr

The American social safety net is back in the news, and not just because Mitt Romney acknowledged, "I'm not concerned about the very poor." This week, the libertarian Mercatus Center at George Mason University revealed that a third of Americans now receive Medicaid, food stamps or other means-based government assistance, a number that climbs to 148 million when Social Security, Medicare and unemployment benefits are factored in. The next day, the conservative Heritage Foundation fretted that its "Index of Dependence on Government" rose 8.1 percent last year. Then on Sunday, the New York Times detailed that the so-called safety net now delivers most its benefits to middle class Americans, including many who denounce the very government programs which now sustain them.

Spotlight on Goldman as commodities hearings begin

By Moming Zhou, MarketWatch

NEW YORK (MarketWatch) -- Goldman Sachs Group, already under fire for reaping record trading profits in the aftermath of the financial crisis, is now fighting to defend one of its biggest sources of revenue -- commodities trading -- with regulators considering setting limits on Wall Street speculators. 

Representatives of the firm, along with those of other big investment banks, are scheduled to appear at a series of hearings held by the Commodity Futures Trading Commission starting Tuesday -- part of the Obama administration's biggest move yet to clamp down on commodities speculation, which has roiled the prices of everything from oil to corn and wheat in recent years. 

At issue for Goldman Sachs is a major exemption it enjoys from limits on trading in certain types of agricultural commodities. Such an exemption is usually reserved for traders classified as "hedgers," such as farmers or food producers who depend on stable prices for their businesses.

Thomas Frank Talks With Truthout on How Wall Street Doubled Down on Trashing America's Economy

Friday 17 February 2012

by: Mark Karlin, Truthout | Interview 

 

Mark Karlin: In "Pity the Billionaire," on page 71, you note that "market populism" shifted over the years from being "almost exclusively a faith of the wealthy" to being "the fighting faith of the millions." You definitely single out Glenn Beck as being a shill for this "faith" among the "disgruntled" masses. Was his role that important?

 

Thomas Frank: Glenn Beck had a huge role in the rise of the Tea Party and the broader shift of the nation to the right. Remember, during the period we're talking about, Beck was on the cover of Time as well as the New York Times Magazine; he was the subject of two separate biographies. Whether we like it or not, he was the face of that political moment, the voice that caught the public imagination. In fact, it is hard to make any sense at all of the Tea Party movement absent Glenn Beck's strange views of history and his dread of the Obama Administration. Go back and look at footage of Tea Party events or interviews with Tea Party participants, and you will find that they often echo, sometimes word for word, the idiosyncratic lessons taught by Professor Beck.