(cross-posted at boomantribune)I think booman is correct in suggesting that in the struggle between Obama and House Republicans, Reagan will beat Glen Beck on relative merits. That's good enough for booman to continue supporting the president.[...]
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This week the sun released its largest solar flare in four years:[...]
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Our Ryan Reilly headed over to today's meeting of the DC chapter of the Federalist Society, where Sen. Jim DeMint (R-SC) was the featured speaker. This line from Ryan's dispatch caught my eye: "Americans are 'on our knees in front of China for credit,'[...]
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Eric Kleefeld tracks down a Wisconsin Democratic state senator who partly explains the caucus' out-of-state odyssey today, which included a short-lived rendezvous at the Clock Tower Resort and Conference Center in Rockford, Ill., before a reporter[...]
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Not that these studies actually matter, because the people who don't believe in global climate change have motivators that don't include actual "facts." But who knows? Maybe somewhere in the bowels of some government building is someone paying attention who will one day do something to keep this from getting worse.
Maybe it won't be too late.
Extreme rainstorms and snowfalls have grown substantially stronger, two studies suggest, with scientists for the first time finding the telltale fingerprints of man-made global warming on downpours that often cause deadly flooding.
Two studies in Wednesday's issue of the journal Nature link heavy rains to increases in greenhouse gases more than ever before.
One group of researchers looked at the strongest rain and snow events of each year from 1951 to 1999 in the Northern Hemisphere and found that the more recent storms were 7 per cent wetter. That may not sound like much, but it adds up to be a substantial increase, said the report from a team of researchers from Canada and Scotland.
The study did not single out specific storms but examined worst-of-each-year events all over the Northern Hemisphere. While the study ended in 1999, the close of the decade when scientists say climate change kicked into a higher gear, the events examined were similar to more recent disasters: deluges that triggered last year's deadly floods in Pakistan and in Nashville, Tenn., and this winter's paralyzing blizzards in parts of the United States.
The change in severity was most apparent in North America, but that could be because that is where the most rain gauges are, scientists said.
Both studies should weaken the argument that climate change is a ?victimless crime,? said Myles Allen of the University of Oxford. He co-authored the second study, which connected flooding and climate change in Britain. ?Extreme weather is what actually hurts people.?
Jonathan Overpeck, a University of Arizona climate scientist, who did not take part in either study, praised them as sensible and ?particularly relevant given the array of extreme weather that we've seen this winter and stretching back over the last few years.?
Peter Orszag, now a new vice-chairman of global banking at Citigroup and former US Office of Management and Budget under Barack Obama, has written a provocative and (with all due respect Peter) wrong-headed Financial Times oped proposing that the way to promote savings among America's low-income workers is to attach the prospect of winning millions to them scurrying away a few dollars here and there -- sort of a lottery ticket that goes into their savings rather than into state coffers to help subsidize education or to the profits of the local milk and cigarette stand.
At the New America Foundation, I have colleagues who are most likely the world's leading experts on generating savings among the underclass, or "banking the unbanked" as New America's Reid Cramer or Ray Boshara would say. But suggesting that America's savings problem be solved by establishing an Eva Peron style lottery incentivizing those with little to save doesn't understand the dynamics at play in the American economy today.
American growth, indeed global growth, this past decade was moving upward at a fast clip in part because household consumption was surging well beyond normal patterns. Whether it was inflated 401k values or bubble-driven home prices, working families had confidence that they lived safely in a "just-in-time money, just-in-time jobs world."
In other words, credit was easy, trust in America's financial health was high, a job lost could easily be filled by a job or two gained. Just-in-time income is a sign of hyper-confidence that the inflow and outflow of funds will be manageable -- sort of like Toyota's just-in-time production system in which it doesn't warehouse materials and supplies but brings together all of its componentry in a just-in-time assembly process.
The trust is gone. The US government and Wall Street managed to not only inject fear and uncertainty deep into the American market and household sector -- but also managed to export toxic financial products to the rest of the world, undermining global trust in US economic leadership.
When households are stressed out about the future, fear losing jobs or unemployment insurance, or see an economy that is not producing enough jobs to keep pace with those coming into the workforce, people save -- and that is what is happening today. People are saving as Orszag notes in his article, writing that savings has risen from 1.4% of income in 2005 to 5.8% in 2010. While he properly notes that a further dramatic rise in savings would hurt the economy and constrain a return to badly needed consumption in the short term, he argues that America needs more savings in the long run -- and then says that a lottery for poor folks is the way to get there.
First of all, in many states, working class and lower class/non-working Americans are already the bulk of lottery ticket buyers -- which is essentially a tax on them to support parts of the state education infrastructure. I suppose to draw them away from one lottery-incentivized behavior to support their own savings interests, it could make sense to generate yet another lottery-incentivized behavior. But then who would pick up the newly neglected education tab?
But more importantly, the savings and investment ratios in the United States are a function of another kind of faulty logic -- one that says that America as a whole should "trust" the international system to provide unlimited financing for unlimited gluttony (i.e. consumption from China and elsewhere) and that the working middle class need not fear off-shoring of jobs to China and Southeast and South Asia because this is moving America up the value chain and that new, high wage jobs and opportunities will be created out of the churn. The selling point from firms like Citibank is "trust" the international economic order to provide alternatives for what is taken away -- just in time manufacturing jobs, just in time financing, just in time opportunity.
But the rest of the world doesn't operate it. Martin Wolf of the Financial Times once told me that the self-interested, strategic economic behaviors of other major economic stakeholders in the international system required a "patsy" -- someone who would believe in the "just in time" security of give and take trade and give and take finance and jobs even when its competitors didn't. That is the United States. (To be fair, when I told Martin Wolf that he had said that to me, he said it was impossible because the word "patsy" was not one that fell easily from his lexicon -- but he said that the concept was basically right, and I suggested that "sucker" or "chump" might be just as good, to which he nodded.)
My recommendation to leading economic officials is to get back to the real issue here -- not whether one can create gimmicks to nudge poor people to become the savings backbone of a newly re-energized American economy, but rather to realize that the nation itself can only re-earn real trust from its citizens and respect in the international system if it reinvests in itself, in its innovative sectors, in infrastructure, and creates incentives for surplus nations in the world like China, Germany, and Japan to invest in high value added manufacturing operations inside the United States.
A non-defense discretionary spending freeze for 5 years, which Barack Obama has proposed, is not a trust-building budget that conveys that America will be more innovative in the future and on a higher growth path. It is a flounder-in-place budget while China and India leapfrog forward.
A major national infrastructure investment push could be a serious event in US history at this point -- and would keep working, low-income Americans on track, investing in themselves when they need to, saving when they need to, borrowing when they need to -- in order to try and secure a better set of opportunities for themselves and their children in the long term.
Eva Peron style lotteries are just another gimmick of social engineering -- that just builds on the short term sorts of thinking that we have seen coming for years from the big financial houses in Wall Street and from their agents and proteges in Republican and Democratic administrations.
-- Steve Clemons
How can Wall Street destroy a global economy and walk away unscathed by it? Easy. The revolving door between government and Wall Street. There are plenty of high profile cases such as Orszag to Citi and William Daley from JP Morgan to the White House or even the more recent departure of a senior FDIC official to Goldman, but it happens throughout Washington in Congress as well as the agencies. It's rotting the system to the core and nobody in Washington cares. There are future job prospects to consider after all. Country? How much can it really pay compared to business?
It's a long article but as always with Matt Taibbi, it's worth the investment of your time. Here he's talking with a former SEC official who was sacked when he asked questions about former Morgan Stanley CEO John Mack. (He won a lawsuit for his dismissal.) Why isn't Wall Street in jail?
Last year, Aguirre noticed that a conference on financial law enforcement was scheduled to be held at the Hilton in New York on November 12th. The list of attendees included 1,500 or so of the country's leading lawyers who represent Wall Street, as well as some of the government's top cops from both the SEC and the Justice Department.Really. Keep reading because it only gets worse. Taibbi next compares SEC officials to young high school basketball stars who are trying to get their chance at the big time in the NBA where they can rake in the bucks. That's who is policing Wall Street. And this is what Washington supports. The problem is a systemic problem and not a matter of Democrats or Republicans. They both are guilty and we're the happy idiots paying the price.
Criminal justice, as it pertains to the Goldmans and Morgan Stanleys of the world, is not adversarial combat, with cops and crooks duking it out in interrogation rooms and courthouses. Instead, it's a cocktail party between friends and colleagues who from month to month and year to year are constantly switching sides and trading hats. At the Hilton conference, regulators and banker-lawyers rubbed elbows during a series of speeches and panel discussions, away from the rabble. "They were chummier in that environment," says Aguirre, who plunked down $2,200 to attend the conference.
Aguirre saw a lot of familiar faces at the conference, for a simple reason: Many of the SEC regulators he had worked with during his failed attempt to investigate John Mack had made a million-dollar pass through the Revolving Door, going to work for the very same firms they used to police. Aguirre didn't see Paul Berger, an associate director of enforcement who had rebuffed his attempts to interview Mack ? maybe because Berger was tied up at his lucrative new job at Debevoise & Plimpton, the same law firm that Morgan Stanley employed to intervene in the Mack case. But he did see Mary Jo White, the former U.S. attorney, who was still at Debevoise & Plimpton. He also saw Linda Thomsen, the former SEC director of enforcement who had been so helpful to White. Thomsen had gone on to represent Wall Street as a partner at the prestigious firm of Davis Polk & Wardwell.
Decades ago, when we understood we were at war, the ratio of government debt to the economy was vastly larger than it is today. We used deficit spending to win the war and save the economy. Yet we defeated the world's most evil regimes and emerged as the[...]
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It's worth noting John Boehner's choice of words in his newly issued threat to shut down the federal government: "read my lips."
Gee...who does that remind you of? If you don't remember, this video will refresh your memory:Yep, Boehner's was echoing George H. W. Bush and his famous "read my lips, no new taxes" pledge. And we all know how well that worked out.
A great post by my colleague Rob Perks:
Today the U.S. House of Representatives is expected to pass the Republicans? reckless plan to cut $100 billion in government spending. This includes a 30% budget reduction for the Environmental Protection[...]
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