Clash of the Titans?

Krugman versus Ferguson: the Battle Royale.   My money is with the Nobel laureate, not just because he's more qualified as a proper economist, but because I feel obligated to him since I am the source of his inspiration, his muse, if you will.

Economists have sucked lately

 . . . a plausible explanation . . . 

What Matt says . . .

. . . so simple, so true:

You know, Newt Gingrich knows a lot about saying stupid things and being forced out of the job as Speaker. … But one way or the other — I mean, I wasn’t in the room, you weren’t in the room, Newt Gingrich wasn’t in the room. None of us know exactly what happened there. But whatever it is Nancy Pelosi knew about, George W. Bush, Dick Cheney, John Yoo, Jay Bybee, they knew more. And ultimately, when we have a thorough investigation of what happened, the bulk of the blame has to lie with the architects of the policy, not with a member of the opposition party.

The GOP playbook hasn't changed a bit: destract, deny, project.  And their demographic keeps on shrinking.

Getting silly now

I really wish Dick and daughter would just let us put this whole torture thing behind us . . . 

Really gotta wonder what they are on about . . . the more they jabber the more ridiculous they look.  And the more ridiculous they look, the idea we can keep looking away-nothing-to-see-here ever less and less tenable.  I want the lawyers' heads on pikes - for starters.  I don't care what Pres. Obama says.  It's a matter of professionalism and standards . . .   

And he, too, shall be judged . . .

. . . not sure why the rats are scurrying now - the ship sank a long time ago. 

Teabagging Michelle Malkin

Love this post - good on substance, too . . .

Here's a choice excerpt at the end - really puts the empty rhetoric and paint-by-numbers faux rage of the rudderless right in perspective:

yeah, government waste sucks, it’s rampant at every level, and taxes are a vicious racket, and everyone should be pissed off . What’s hilarious about the teabaggers, though, is how they never squawk about waste until the spending actually has a chance of benefiting them. You will never hear of a teabagger crying about OPIC giving $50 million in free insurance to some mining company so that they can dig for silver in rural Bolivia. You won’t hear of a teabagger protesting the $2.5 billion in Ex-Im loans we gave to GE through the early part of this decade, even as GE was moving nearly a hundred thousand jobs overseas over the course of ten years. And Michelle Malkin’s readers didn’t seem to mind giving IBM millions in Ex-IM and ATP loans at the same time it was giving its former CEO, Lou Gerstner, $260 million in stock options.

In other words teabaggers don’t mind paying taxes to fund the salaries of Bolivian miners, Lou Gerstner’s stock options, deliveries of “sailboat fuel,” the Hermes scarves on Sandy Weill’s jet pillows, or even the export of their own goddamn jobs. But they do hate it when someone tries to re-asphalt their roads, or help bail their slob neighbor out of foreclosure. And God forbid someone propose a health care program, or increased financial aid for college. Hell, that’s like offering to share your turkey with the other Pilgrims! That’s not what America is all about! America is every Pilgrim for himself, dammit! Raise your own motherfucking turkey!

Yeah - What about a "Bill of Obligations" . . . ?

It's an excellent point, if one can forgive a sitting Supreme Court Justice for apparently having not a clue about the entire basis for our form of goverment.  

Can you believe this guy hasn't asked a single question from the bench since early 2006?  Sorry, that can't be normal.

Obama won't look into Medvedev's Soul!!!

http://blogs.abcnews.com/politicalpunch/2009/04/breakthrough-on.html

Deleted Post

Took too much space

I wouldn't bet on the dollar . . .

. . . at least not in the long run.  I bid you welcome, my Chinese masters . . . (apologies for the free registration filter, but reading the FT is worth it, so just do it)

Never been a better trainwreck . . .

. . . back behind the woodshed.  

Gotta love how Stewart just eviscerates this guy . . . even if Stewart doesn't seem to understand the first thing about short-selling, hedge funds, CDS's or how any of them have anything to do with our pension plans . . . 

The state of our media

Not sure whether to laugh or cry . . . 

Being treated like grown-ups

Obama explicitly rejected some of the more egregious budgeting practices of his immediate predecessor. President Bush never included the cost of the wars in Iraq and Afghanistan in his budgets, for instance, opting instead to treat those military campaigns as emergencies and fund them off the books. He took a similar approach with the entirely predictable $60 billion it cost the Treasury for each year that Congress spared 20 million taxpayers the expensive bite of the alternative minimum tax. Bush also budgeted nothing for federal disaster response, though natural disasters invariably occur. Obama included all three things in his 10-year budget.

Read the remainder -- a new era.

Report from the bunker

Some disclosure: my real-world avatar is a boring banking lawyer deeply embedded in the belly of the beast.  I can therefore confidently explain what has happened to make all the major financial institutions of the world look like a fleet of Titantics ploughing dead ahead into various icebergs. 

While it may be true, as everyone seems to have concluded, that most bankers are indeed minions of beelzebub, Satan alone should not be blamed for the current mess. Unless we want to make greed a capital offence it's pretty pointless to get all uppity about avaricious bankers. After all, we were the ones who gave them the rope to hang us all with. 

It is important to keep in mind that in the parlance of our times, thanks to Reagan revolution, it has been long accepted conventional wisdom that all government is bad, and regulators are particularly bad, which I think often explained the quality of regulators I myself have come into contact with. This is not always true: some have been astute and very good – but for a long time they have been radically underpaid and maligned to the point of irrelevance. 

So why should anyone be surprised when the end result is massive and comprehensive regulatory failure? 

The financial system, though complex, can work if risks are correctly assessed. The problem is that under conditions of large liquidity, which we had when credit was cheap, the quest for “returns” encourages excessive risk taking and exposes the system’s vulnerabilities: 

Market participants that work for fees (mortgage brokers, payments receivers) don’t have incentives to monitor the quality of loans, only to increase the quantity of loans. 


The same thing happens with the credit rating agencies which supply “ratings” for the structured products and do not face any financial responsibility to cover losses from their mistakes. 


Regulatory Arbitrage: different financial institutions undertaking similar activities face different regulations (especially capital requirements). 


Principal-Agent Problem: huge disparity in traders’ maximum loss (zero bonus) vs. investors’ losses (the full capital invested). 

The job of regulators is to ensure these risks are correctly assessed and, where they aren't, the financial system is protected. 

Guess that hasn't happened.

Stick to baseball, George

So, the global restructuring and geo-strategic recalibration is well under way.  

America's, and Europe's, historic economic predominance can be expected to slip away - with inevitable consequences for the west's ability to lead and shape events on the world stage. In other words, all of this is about something much bigger than a few poorly-managed megabanks: we've seen this movie before. The British Empire effectively spent itself into oblivion as its economic might imploded.  

In recent years foreign central banks and sovereign funds have increasingly propped up the dollar and bought U.S. Treasuries. We can't expect this to continue indefinitely: China now is diversifying aggressively to hedge away from its exposure to a country with such dire long-term fiscal imbalances as the United States. Joseph Stiglitz (Nobel Prize, Economics) calculates the Iraq war will cost the US three trillion alone (all in), which puts Obama's fiscual stimulus package (roughly $800 billion) into perspective.  

In short, as a nation, we've been profligate idiots. This is more true in the U.S. than the UK (as Stiglitz himself has observed) but the UK has been far from prudent itself (as Warren Buffet has repeatedly observed since the 90s).  

Things didn't have to be this way, but, of course, rational discourse hasn't been permitted for a long time, and there certainly was no interest on the Sunday talk shows. Even today we have George Will still blathering about how the New Deal didn't work: it amazes me how many apologists for Hoover are still out there. World War II got us out of the Great Depression? Even if you concede that might be true (and I don't), it doesn't change the fact that massive public spending did the trick. Is George advocating another big war? Iraq wasn't enough?  

I laugh when I think about all those fiscal conservatives who demanded a balanced budget amendment in the late 90s, and who then promptly forgot about it with dubbya in the White House: they discovered John Maynard Keynes and suddenly deficit spending was, like, so cool! Except deficit spending as Kenyes conceived it had nothing to do with tax cuts for the rich. In contrast, fighting stupid wars that make no sense can work as a form of fiscal stimulus (as sort of a large public works project), but dubbya didn’t get the timing quite right. Yes, he’s probably the worst president we’ve ever had.  

But we, the People, put him in office, so who really is to blame?

Let me get this straight . . .

COST OF IRAQ WAR : 

• $3 TRILLION (all in) ***

RETURN ON INVESTMENT: 

• resurgent Al Qaeda 
  
• undermined multilateral nuclear anti-proliferation efforts  
• massive loss of American foreign policy and intelligence agencies credibility
• depletion of armed forces capabilities 
  
• distraction from Afghanistan 
  
• maybe someday "democracy will flower in the middle east" (like it did in Palestine, except they elected Hamas to power - oops)

REPUBLICANS OPPOSED: 

• Zero
  

-- compare and contrast with -- 

COST OF PROPOSED STIMULUS PACKAGE (Senate Version): 

• $780 billion

RETURN ON INVESTMENT: 

• Only hope for avoiding crippling global depression (tax cuts for the rich repeatedly proven ineffective as stimulus)

REPUBLICANS OPPOSED:

• All but three Senators.
  

*** see, Joseph Stiglitz, Columbia University, former chief economist at the World Bank, winner, Nobel Prize for Economics, 2001: monetary estimates may be considered in addition to 100,000 to 655,000 dead, not that many seem to care very much

Our Greatest Jurist

Why is our ever-somnolent media waking up to pay attention to what a boor this guy is all of a sudden now?

Hoover Lives!

Change most definitely has not come to the Beltway Grandees, least of all Wolfie  . . . 

Can we please, please, please have a press corps that is not entirely somnolent?  

Sigh.

Bring out your Dead!

Remember early on during the Bush years all those Republicans who suddenly threw down the mantle of "fiscal responsibility" and donned proudly the one labelled "John Maynard Keynes" as they happily pushed through Bush's tax cuts for the rich?  Yes, deficit spending was suddenly in vogue with a Republican in the White House . . . it mattered not what kind of deficit spending Keynes actually prescribed to combat a recession (needless to say, tax cuts for the wealthy were not what Keynes had in mind).  And . . . don't forget that laugher of a Laffer curve: like that unfortunate old gaffer in the "Bring out your Dead!" bit in Monty Python and the Holy Grail, that little gem of Reagonomics still is not "dead yet", despite being thoroughly discredited many times over.

I really wonder what is going on the heads of Republican lawmakers as we teeter on the precipice of Great Depression 2.0.  Marshall is losing it:

I cannot say my expectations were high. But Sen. DeMint (R) of South Carolina does seem to be an even bigger ignoramus than I'd realized. On This Week this morning he actually said: "Let's don't say it's a stimulus when it's a government spending plan." A 'Stimulus plan' is pretty much by definition a spending plan, though of course it can include tax reductions as well.

As noted, my expectations are not high. But I'm wowed by the amount of nonsense and lies that are being injected into this debate.

Also, high on the list, of course, is the fact that basically all the 'wasteful' spending that's being discussed amounts to a total of what ... maybe 2 or 3 billion out of $819 billion total? Why is this point not being made more clearly?

It's enough to make one want to swing a cat around in the middle of a medieval plague!

Conspiracy Alert

Did you ever notice that the Homeland Security Dept's terror alert color-coding system . . .

. . . corresponds PRECISELY with the colors of the characters in Teletubbies?

. . . think about it.

Homeland Security Live Alert