Paul Krugman: Troubles in Turkey

"There cannot be a crisis next week. My schedule is already full." - Henry Kissinger
O.K., did we need this? Turkey? Who was paying attention to Turkey? Some people were, of course, because that was their job.

The International Monetary Fund released the results of its latest Article IV consultation - regular reports that are supposed to provide a sort of early warning system - just over a month ago. It mentioned some worries. For example, according to the I.M.F.: "The most concerning aspect is the widening short FX position of the nonfinancial corporates.

Rick Perlstein: From & Friends

Al From makes two assertions in his new memoir. The first is announced in its title. The New Democrats and the Return to Power argues that the Democratic Leadership Council (DLC), the group he founded in 1985 to push the Democratic Party to the right, has won: the party has been reformed, and there is no going back to the dark days when, according to From, Democratic presidential candidates suffered humiliation after humiliation at the ballot box for the party’s thralldom to protectionism, isolationism, “constituency groups” and the dread leviathan Jesse Leo Jackson.

The second point is that From and friends deserve all of the credit for the Democratic Party’s transformation. Again and again, our hero narrates his arrival, just in the nick of time, to save the day: “My interjection had stopped the headlong dash into social democracy…. Hillary came over to me and said she and Bill had discussed what I had said and had agreed I was right.” And again: “In a cab crossing the Triborough Bridge in New York, I flipped open my cell phone and called the President of the United States…. [W]hen Clinton and I finished our discussion, I was confident that he would sign the bill.” According to Al From, if you favor NAFTA, tougher laws on crime, welfare reform and, above all, an economic policy focused exclusively on “growth” instead of distributional fairness, you can thank Al From.

Time to End the Cheney/Halliburton Loophole

Wednesday, 12 February 2014 14:38
By The Daily Take, The Thom Hartmann Program | Op-Ed

We live in a fracked up country, but thanks to Dick Cheney, there’s pretty much nothing we can do about it.

Over the past decade, the extraction of natural gas through a technique known s hydraulic fracturing, or fracking, has emerged as one of the fossil fuel industry’s biggest money makers.

In fact, according to Bloomberg, fracking was the biggest reason American oil output hit a 25-year high in 2013.

The boom in fracking is, quite literally, hitting close to home.

Even fact will not change first impressions

February 14, 2014 - Knowledge is power, yet new research suggests that a person's appearance alone can trump knowledge. First impressions are so powerful that they can override what we are told about people. A new study found that even when told whether a person was gay or straight, participants generally identified the person's sexual orientation based on how they looked – even if it contradicted the facts presented to them.

"We judge books by their covers, and we can't help but do it," says Nicholas Rule of the University of Toronto. "With effort, we can overcome this to some extent, but we are continually tasked with needing to correct ourselves." The less time we have to make our judgments, the more likely we are to go with our gut, even over fact, he says.

Paul Krugman: Inequality, Dignity and Freedom

Now that the Congressional Budget Office has explicitly denied saying that Obamacare destroys jobs, some (though by no means all) Republicans have stopped lying about that issue and turned to a different argument. O.K., they concede, any reduction in working hours because of health reform will be a voluntary choice by the workers themselves — but it’s still a bad thing because, as Representative Paul Ryan puts it, they’ll lose “the dignity of work.”

So let’s talk about what that means in 21st-century America.

Plastic shopping bags make a fine diesel fuel, researchers report

CHAMPAIGN, Ill. — Plastic shopping bags, an abundant source of litter on land and at sea, can be converted into diesel, natural gas and other useful petroleum products, researchers report.

The conversion produces significantly more energy than it requires and results in transportation fuels – diesel, for example – that can be blended with existing ultra-low-sulfur diesels and biodiesels. Other products, such as natural gas, naphtha (a solvent), gasoline, waxes and lubricating oils such as engine oil and hydraulic oil also can be obtained from shopping bags.

The Vampire Squid Strikes Again: The Mega Banks' Most Devious Scam

By Matt Taibbi
February 12, 2014 11:00 AM ET

Call it the loophole that destroyed the world. It's 1999, the tail end of the Clinton years. While the rest of America obsesses over Monica Lewinsky, Columbine and Mark McGwire's biceps, Congress is feverishly crafting what could yet prove to be one of the most transformative laws in the history of our economy – a law that would make possible a broader concentration of financial and industrial power than we've seen in more than a century.

But the crazy thing is, nobody at the time quite knew it. Most observers on the Hill thought the Financial Services Modernization Act of 1999 – also known as the Gramm-Leach-Bliley Act – was just the latest and boldest in a long line of deregulatory handouts to Wall Street that had begun in the Reagan years.

The Wolf of Sesame Street: Revealing the secret corruption inside PBS’s news division

By David Sirota
On February 12, 2014

[Update 14th Feb 2014: Following Pando's exposé, PBS has announced it will return John Arnold's $3.5m donation.]

On December 18th, the Public Broadcasting Service’s flagship station WNET issued a press release announcing the launch of a new two-year news series entitled “The Pension Peril.” The series, promoting cuts to public employee pensions, is airing on hundreds of PBS outlets all over the nation. It has been presented as objective news on  major PBS programs including the PBS News Hour.

However, neither the WNET press release nor the broadcasted segments explicitly disclosed who is financing the series. Pando has exclusively confirmed that “The Pension Peril” is secretly funded by former Enron trader John Arnold, a billionaire political powerbroker who is actively trying to shape the very pension policy that the series claims to be dispassionately covering.

The Troika and the New York Times Bury the Issues, not just the Lead

Posted on February 7, 2014 by Devin Smith

By William K. Black

On February 6, 2014, Mario Draghi, the head of the ECB said a series of contradictory things each of which indicated a failure to understand economics – and the BBC article about his policies failed to point out or analyze this failure.  Draghi’s primary message, in response to news that “Eurozone inflation slowed to 0.7% in January from 0.8% in December” was:

“We have to dispense with this idea of deflation. The question is – is there deflation? The answer is no.
We have to treat the recovery with extreme caution. It is very fragile. It is starting from very low levels but it is proceeding.”

As I explained in my January 25, 2014 column, the troika consists of the ECB, the EU Commission, and the IMF.  The troika’s definition of the “recovery” it hopes for in Spain is grim.  The troika made Spain its poster child for the success of austerity in late 2013.  In early 2014 Spain admitted that unemployment had risen to 26 percent and the troika’s most over-the-top propagandist for austerity, Ollie Rehn, was the only one willing to comment on that news.

James Surowiecki Promotes Myth of Consumer Empowerment in the Face of the Crapification of Almost Everything

Posted on February 10, 2014 by Yves Smith

There’s nothing like getting a missive from the alternative reality where neoliberalism works and all consumer problems can be solved by more diligent shopping (and remember, since we are all consumers first and citizens second, the corollary is that pretty much any problem can be solved by better shopping).

The current sighting is a story in the New Yorker by James Surowiecki, The Twilight of Brands, that tries to tell us, in all seriousness, that companies now have to be on their toes because consumers are more vigilant and less loyal. He starts with the backlash against yoga clothes maker Lululemon when quality fell sharply, and states his thesis:

It’s a truism of business-book thinking that a company’s brand is its “most important asset,” more valuable than technology or patents or manufacturing prowess. But brands have never been more fragile. The reason is simple: consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos. “Absolute Value,” a new book by Itamar Simonson, a marketing professor at Stanford, and Emanuel Rosen, a former software executive, shows that, historically, the rise of brands was a response to an information-poor environment. When consumers had to rely on advertisements and their past experience with a company, brands served as proxies for quality; if a car was made by G.M., or a ketchup by Heinz, you assumed that it was pretty good. It was hard to figure out if a new product from an unfamiliar company was reliable or not, so brand loyalty was a way of reducing risk. As recently as the nineteen-eighties, nearly four-fifths of American car buyers stayed loyal to a brand.

This is utterly backwards. The reason “brands have become more fragile” does not not reside in demanding, disloyal customers, but in short-sighted corporate behavior.

Paul Krugman: Writing Off the Unemployed

Back in 1987 my Princeton colleague Alan Blinder published a very good book titled “Hard Heads, Soft Hearts.” It was, as you might guess, a call for toughminded but compassionate economic policy. Unfortunately, what we actually got — especially, although not only, from Republicans — was the opposite. And it’s difficult to find a better example of the hardhearted, softheaded nature of today’s G.O.P. than what happened last week, as Senate Republicans once again used the filibuster to block aid to the long-term unemployed.

What do we know about long-term unemployment in America?

First, it’s still at near-record levels. Historically, the long-term unemployed—those out of work for 27 weeks or more — have usually been between 10 and 20 percent of total unemployment. Today the number is 35.8 percent. Yet extended unemployment benefits, which went into effect in 2008, have now been allowed to lapse. As a result, few of the long-term unemployed are receiving any kind of support.

Gaius Publius: Rising Inequality: Economic Recovery Driven Almost Entirely by the Rich

I’m going to call this a news item and let you draw the obvious conclusions.

First, the money quote, then the article that contains it. The quote:

In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995, the researchers found.

Even more striking, the current recovery has been driven almost entirely by the upper crust, according to Mr. Fazzari and Mr. Cynamon. Since 2009, the year the recession ended, inflation-adjusted spending by this top echelon has risen 17 percent, compared with just 1 percent among the bottom 95 percent.

Chris Hedges: Legalizing Oppression

The lynching and disbarring of civil rights lawyer Lynne Stewart, who because she has terminal cancer was recently released from prison after serving four years of a 10-year sentence, is a window into the collapse of the American legal system. Stewart—who has stood up to state power for more than three decades in order to give a voice to those whom authorities seek to crush, who has spent her life defending the poor and the marginalized, who wept in court when one of her clients was barred from presenting a credible defense—is everything a lawyer should be in an open society. But we no longer live in an open society. The persecution of Stewart is the persecution of us all. 

Stewart, 74, is living with her husband in her son’s house in New York City after being released from a Texas prison a month ago. Because she is disbarred she cannot perform any legal work. “Can’t even work in a law office,” she said softly last week when I interviewed her at the Brooklyn home. “I miss it so terribly. I liked it. I liked the work.”

Dean Baker: The disastrous idea for privatizing Fannie and Freddie

A new bill proposes that government guarantee mortgage-backed securities

In his State of the Union Address on Jan. 28, President Barack Obama briefly referred to his hopes for reforming Fannie Mae and Freddie Mac, the two government-sponsored and publicly traded entities that support the mortgage market by buying and securitizing mortgages. Both companies failed during the 2008 financial crisis and had to be taken over by the government.

By “reforming,” the president unfortunately doesn’t mean “improving.” Rather, he likely means “privatizing.” In fact the most likely form of privatization at this point would feature the sort mix of private incentives and government guarantees that makes another financial disaster virtually certain.

The smart money in Washington is betting on the Housing Finance Reform and Taxpayer Protection Act, sponsored by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va. The Corker-Warner bill, put together by two of the more centrist senators in both parties, does not simply get the government out of the mortgage guarantee business — an idea that actually has a plausible argument in its favor.

Behold how badly our political journalists have lost the freakin’ plot

I read hundreds of bylined works of journalism a week. Every so often one of them forces me to go back and read it over and over…

This is usually because the writing contains within it a density of pressthink — my subject here — that cannot be gotten through in one or two tries. It happened this week with a post by Chris Cillizza, one of the Washington Post’s franchise players on the national politics beat: Why the CBO report is (still) bad news for Democrats.

Ordinarily I would summarize what Cillizza was writing about, quote from his piece, and try to isolate what’s screwy or revealing about it. But Dave Wiegel did that at Slate already. And I did it for a very similar piece published on Cillizza’s site in 2012. See my post: Everything That’s Wrong with Political Journalism in One Washington Post Item.

An Elegantly Simple Way to Revolutionize Government

Saturday, 08 February 2014 10:07
By Carmen Yarrusso, Truthout | Op-Ed

What started as a somewhat complex mathematical analysis of the game of politics using game theory (the mathematical study of strategic decision making) has evolved years later into an extraordinarily simple idea that would revolutionize government at all levels.

Deception is the lifeblood of our political system. A system claiming to work for the best interests of the people, while in fact largely working for corporate special interests, must necessarily be riddled with elaborate lies and deception. Our political system, with great help from mainstream media, is designed to foster mass deception rather than expose it. But a simple rule change to our game of politics would instantly and reliably expose deception. This would destroy the status quo and revolutionize government.

Richard Eskow: Reagan Remembered: The Failed Legacy of Our First Corporate Politician

January 20 marked the 25th anniversary of Ronald Reagan’s inauguration as President. And February 6 marked the 103rd birthday of the former sports announcer, actor, governor of California and 40th President of the United States of America. Reagan’s economic legacy is one of failure, but in another way it could be argued that he was genuinely transformative: as the first celebrity politician for the modern corporate state.

Every president is ultimately judged on great ideas, visions, and responses to historical forces. Some of the forces that shaped the Reagan presidency could be seen with the unaided eye, like the fall of Communism (a long-developing trend that came to a head during the Reagan administration). Others were less visible but nevertheless shaped his Presidency.

US lead in science and technology shrinking

The United States' (U.S.) predominance in science and technology (S&T) eroded further during the last decade, as several Asian nations--particularly China and South Korea--rapidly increased their innovation capacities. According to a report released today by the National Science Board (NSB), the policy making body of the National Science Foundation (NSF) and an advisor to the President and Congress, the major Asian economies, taken together, now perform a larger share of global R&D than the U.S., and China performs nearly as much of the world's high-tech manufacturing as the U.S.

Evidence in NSB's biennial report, Science and Engineering Indicators, which provides the most comprehensive federal information and analysis on the nation's position in S&T, makes it increasingly clear that the U.S., Japan, and Europe no longer monopolize the global R&D arena. Since 2001, the share of the world's R&D performed in the U.S. and Europe has decreased, respectively, from 37 percent to 30 percent and from 26 percent to 22 percent. In this same time period, the share of worldwide R&D performed by Asian countries grew from 25 percent to 34 percent. China led the Asian expansion, with its global share growing from just 4 percent to 15 percent during this period.

Paul Krugman: Health, Work, Lies

On Wednesday, Douglas Elmendorf, the director of the nonpartisan Congressional Budget Office, said the obvious: losing your job and choosing to work less aren’t the same thing. If you lose your job, you suffer immense personal and financial hardship. If, on the other hand, you choose to work less and spend more time with your family, “we don’t sympathize. We say congratulations.”

And now you know everything you need to know about the latest falsehood in the ever-mendacious campaign against health reform.

Let’s back up. On Tuesday, the budget office released a report on the fiscal and economic outlook that included two appendices devoted to effects of the Affordable Care Act.

Paul Krugman: Economic Exaggerations in Europe

Hmm. Allies of British Prime Minister David Cameron's government are now taunting French President François Hollande for having run the French economy "into the sand," according to The Financial Times - presumably in contrast with Britain's triumph.

How does that look in terms of, you know, the actual numbers?