Political Economy category archive

Via PoliticalProf.

Emphasis added:

Almost 4 million homeowners might receive cash compensation and mortgage relief in a multibillion-dollar settlement with 10 major banks, government regulators announced Monday.

Bank of America, JPMorgan Chase, Wells Fargo and seven other mortgage-servicing firms have agreed to give borrowers $3.3 billion in direct payments and $5.2 billion in loan modifications and other assistance to settle allegations that they wrongly foreclosed on homeowners in 2009 and 2010. The other lenders are Citibank, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank and Aurora.

I like that “might.”

Past experience (as opposed to future experience, I guess) indicates that it is more likely to be “might not.”

Der Spiegel examines what happens when citizens aren’t willing to pay the price for living in a civilized society.

San Bernardino, California, has gone from being the birthplace of McDonald’s, one of the world’s most successful companies, to a mound of unpaid debts. It’s a sad example of what a lack of infrastructure investment and an almost religious aversion to higher taxes have done to cities across the United States.

Read the whole thing.

For all practical purposes, no change:

Applications for jobless benefits increased 10,000 to 372,000 in the week ended Dec. 29, the Labor Department reported today in Washington. Economists forecast 360,000 claims, according to the median estimate in a Bloomberg survey. A report from the ADP Research Institute showed companies added more workers than projected in December.

(snip)

Payrolls rose by 150,000 workers after a 146,000 gain in November, according to the median forecast of economists surveyed by Bloomberg ahead of the figures due tomorrow. The unemployment rate may have held at 7.7 percent, the lowest since December 2008.

The number of people continuing to collect jobless benefits climbed by 44,000 to 3.25 million in the week ended Dec. 22, today’s report showed. Continuing claims don’t include workers receiving extended benefits under federal programs.

Only one thing is certain.

If you want to make money at the track, don’t have Bloomberg’s experts pick the exacta for you.

I haven’t had the time to look into the deal on not cliff jumping, but Bob Cesca, who functions in the not insane world, already has published his take.

I’m more interested in process than product (not that product isn’t important, mind, it’s a matter of analytical taste; perhaps that’s what attracted me to history and sociology when I was in school–if my school had given double majors, I would have had one, er, two, er, whatever).

And the process was clearly a win for sanity–Democrats by and large held together and Republicans did not.

Do not expect the incidence of Republican political vandalism, of mean for the sake of mean to diminish.

Addendum, Later That Same Morning:

Read Der Spiegel’s take on it. A nugget:

It’s not America itself that is ill, but rather a party. When one party in a two-party system begins to block everything, the outcome is predictable: the system falters and paralyzes itself.

Remember chicken–driving at night without headlights waiting for the other guy to see you and swerve?

It’s a stupid silly pastime that causes the brainless to feel macho right up until they shoot over the edge of the cliff to their deaths.

Michael Cohen explains the Republican game of chicken:

Since Republicans won the House of Representatives in 2010, the country has staggered from one pointless fiscal showdown after another. In every case, Congress and the president have repeatedly kicked the can down the road rather than pass legislation that either made serious efforts to right the country’s fiscal imbalances, or would stimulate economic growth.

(snip)

And virtually this entire situation is the result of Republican intransigence. If you’ve come looking for false equivalence or a pox on both houses-style argument, you’ve come to the wrong place. This one is all on the GOP. They’ve created this crisis; the perpetuated it and then refused to resolve it until the country had basically gone over the fiscal cliff they manufactured.

At Asia Times, Ellen Brown comments on coverage of the phony phiscal cliff (emhasis added):

The “fiscal cliff” has all the earmarks of a false-flag operation, full of sound and fury, intended to extort concessions from opponents. Neil Irwin of the Washington Post calls it “a self-induced austerity crisis”. David Weidner in the Wall Street Journal calls it simply theater, designed to pressure politicians into a budget deal:

The cliff is really just a trumped-up annual budget discussion. … The most likely outcome is a combination of tax increases, spending cuts and kicking the can down the road.

Yet the media coverage has been “panic-inducing, falling somewhere between that given to an approaching hurricane and an alien invasion. In the summer of 2011, this sort of media hype succeeded in causing the Dow Jones Industrial Average to plunge nearly 2,000 points. But this time the market is generally ignoring the cliff, either confident a deal will be reached or not caring.

The goal of the exercise seems to be to dismantle Social Security and Medicare, something a radical group of conservatives has worked for decades to achieve.

It’s kabuki choreographed by Republicans to hide their radical goals under fantastickal costumes, a man-made crisis constructed to cause panicky concessions because panic!

Your assigned reading for the weekend:

MarketWatch on who’s to blame.

Dick Polman on Republican unfitness to govern.

Daniel Ruth on longing for the good old days.

The number of Americans filing new claims for unemployment aid fell last week to nearly its lowest level in 4 1/2 years, a sign that the labor market is healing.

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 350,000, the Labor Department said on Thursday. The prior week’s figure was revised to show 1,000 more applications than previously reported.

(snip)

The four-week moving average fell 11,250 last week to 356,750, the lowest since March 2008.

Is it that Republican unwillingness to budge on the phony phiscal cliff is in some way related to reversing this?

MarketWatch’s John Shinal thinks it’s not a big deal:

I remember, and that’s why I think the looming fiscal cliff has become the new Y2K, with its predictions of gloom and doom in the economic world once the calendar turns to Jan. 1, 2013.

Yet a funny thing happened to Y2K on its way to making mayhem: Companies and governments prepared for it. When the feared date finally arrived, it was close to a nonevent.

The villain known as the fiscal cliff now has less than a month left as a media star. The fear of it will have been worse, I believe, than the passing of the thing itself.

The scariest thing about the fiscal cliff is its name. Aside from that, it’s Congress-made problem that can be solved by Congress, if Congress has the guts to stand up to the wingnut right.

Via Philly dot com.

About the same:

Applications for jobless benefits increased by 17,000 to 361,000 in the week ended Dec. 15, Labor Department figures showed today. Economists forecast 360,000 claims, according to the Bloomberg survey median.

(snip)

The four-week moving average of claims, a less-volatile measure, declined to 367,750, the lowest since the end of October, from 381,500.

The number of people continuing to collect jobless benefits rose by 12,000 to 3.23 million in the week ended Dec. 8. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 94,000 to 2.14 million in the week ended Dec. 1.

Jonathan Chait exposes why the “both sides need to give” is a myth and explains why the Republican demands for spending cuts are rooted in ideology, not in any practical problem-solving or analysis.

A nugget:

Reporters are presenting this as a kind of negotiating problem, based on each side’s desire for the other to stick its neck out first. But it actually reflects a much more fundamental problem than that. Republicans think government spending is huge, but they can’t really identify ways they want to solve that problem, because government spending is not really huge. That is to say, on top of an ideological gulf between the two parties, we have an epistemological gulf. The Republican understanding of government spending is based on hazy, abstract notions that don’t match reality and can’t be translated into a workable program.

(snip)

There really isn’t money to be cut everywhere. The United States spends way less money on social services than do other advanced countries, and even that low figure is inflated by our sky-high health-care prices. The retirement benefits to programs like Social Security are quite meager. Public infrastructure is grossly underfunded.

Slightly better.

Jobless claims decreased by 25,000 to 370,000 in the week ended Dec. 1, Labor Department figures showed today in Washington.

The mid-Atlantic region, which employs about 14 percent of U.S. workers, is recovering after Sandy.

(snip)

The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 111,000 to 2.05 million in the week ended Nov. 17.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 2.5 percent in the week ended Nov. 24 from 2.6 percent in the prior week.

Financial enlightenment in two and a half minutes:

Via The Richmonder.

The Richmonder has an excellent post about the phony phiscal cliff and why you shouldn’t worry about it. The whole thing is worth the two minutes it takes to read.

Buried in it is this neat little tidbit about why we haven’t heard much of Cantor’s Cant (TM) during all this:

Eric Cantor is laying low right now. He’s hoping Boehner either compromises, in which case he can lead a Tea Party insurrection, or that Boehner takes the blame for going over the fiscal cliff, in which case he can lead a Tea Party insurrection. All of this is ironic because Cantor is more responsible than any other member of Congress for scuttling the grand bargain Obama and Boehner were close to making in the summer 2011. In effect, sequestration was Cantor’s solution: a gamble on the outcome of the 2012 elections–a gamble Cantor and the GOP lost.

Meanwhile, Dick Polman explains Republican confusion at being stood up to.

At Philly dot com, Thomas Fitzgerald, a normally level-headed sort of guy, has put forth a staggering exercise of High Broderism.

In a cartoon ricocheting around the Web, the conservative antitax crusader Grover Norquist is depicted as the disembodied head of the Wizard of Oz – a green, glowering face floating above Republican politicians bowing in reverence, the entire scene lit by votive torches.

It’s a mad, maniacal image of the man the left, some Democratic members of Congress, and even former Republican Sen. Alan Simpson blame for bringing the United States to the brink of fiscal disaster.

They say Norquist’s power – stemming from an ironclad “no tax” pledge most GOP lawmakers have signed – has all but ruled out rational discussion and compromise.

But intransigence cuts both ways, and Democrats have their own Grovers.

Who are the Grovers of the Democrats? Fitzgerald nominates the AARP and several unions. (You remember unions? They represent persons who get by on wages, not on capital gains and consulting fees.)

And what are these sacred cows protecting?

Why, social security and medicare.

On the one hand, we have those who think that the richest of the rich should pay a little more of the expense of maintaining a civilized and civil society.

On the other hand, we have those who wish to take even more support and services away from those who have the least so the richest of the rich can buy more yachts, private jets and bank accounts in the Caymans.

Concepts of fairness, justice, and wise social policy are absent from the discussion.

The two positions are equivalent because, well, compromise.

It’s not finished yet.

How do you want it to end?

Via Seeing the Forest.

Chuck for skewers it:

I do not and no one I know hires a fourth person to do three people’s work, that is just stupid. Everyone I know of that hires people hires someone because three people can’t do four people’s work, which means that there is that much demand for the product. If you’re going to follow along on this “job creators” theme you’re either telling people that rich people having some more money means they will gratuitously hire or that they spend enough money in the market place to drive that kind of demand. I think we’ve dealt with the gratuitous hiring part but the demand part . . . ought to be as easy, 2% of the taxpayers do not buy all that much of anything (well, most yachts).

Read the rest, in which he gets serious and talks some actual economics.