Political Economy category archive

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.

In the Roanoke Times, William Fizer laments the ignorance of the wastrel youth:

When Jay Leno asks people on the street simple, common-sense questions, to which they have no answer, we think it’s funny. When author and historian David McCullough speaks to college students across this land, the students make statements and ask questions that shock him. At a recent talk, one college student had no idea that the original 13 states were on the East Coast.

He proceeds to provide evidence of the ignorance of the credulous oldth in the next paragraph, with this farcical statement,

Many Americans don’t know why we celebrate the Fourth of July or that U.S. founding documents are religious in nature, based on Judeo-Christian principles . . . .

which ignores the stated beliefs and actual writings of the founders, who were deeply suspicious of the influence of religion on government, the Wars of the Reformation, the Inquisition, and witch trials being fresh in their memories.

One could stretch a case and claim that, to the extent principles of justice and fairness are in some theoretical fashion “Judeo-Christian,” they may in some way be embodied in the founding documents, but it is ludicrous to arrogate justice and fairness somehow exclusively to the “Judeo-Christian” tradition. (Justice and fairness don’t seem particularly prominent in the thinking of those, such as Pat Robertson, who so loudly proclaim themselves as Christ’s appointed spokespersons in our public debate; vengeance and earthly dominion seem to preoccupy them.)

As I said, it would be a stretch. The Declaration of Independence and the Constitution of the United States of America were much more the products of classical and Enlightenment philosophers than of any religious sect or creed.

Mr. Fizer’s distress at the ignorance of American history is, I think, well-taken.

He should start by learning some.

At Psychology Today, Michael Kay sees the alignment:

Wall Street, Washington and individuals have achieved alignment. Unfortunately, that alignment is stupid, careless and destructive. The alignment I am talking about is a severe case of “short-term-itis.” Our thoughts and actions have coalesced to settle in on this immediate gratification mentality. In Washington, it is driven by the next election. On Wall Street, it is all about quarterly earnings. The individual’s, driven by fear or greed, need to have the objects of their desires-now!

Building anything with a short-term destination in mind is an exercise in nothing less than stupidity.

Slight improvement.

Applications for jobless benefits decreased by 23,000 to 393,000 in the week ended Nov. 24, Labor Department figures showed today. Economists forecast 390,000 claims, according to the median estimate in a Bloomberg survey.

The drop in claims indicates the job market in the mid- Atlantic region, which employs about 14 percent of U.S. workers, may be stabilizing after Sandy put some area residents out of work at the start of the month.

(snip)

The four-week moving average of jobless claims, a less- volatile measure, climbed to 405,250 from 397,750.

The number of people continuing to collect jobless benefits dropped by 70,000 to 3.29 million in the week ended Nov. 17. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.

A perfect storm:

Jobless claims decreased by 41,000 to 410,000 in the week ended Nov. 17, the Labor Department reported today in Washington. The number of applications matched the median forecast of 48 economists surveyed by Bloomberg.

The level of claims reflects the economic drag associated with Sandy, which made landfall in the Northeast on Oct. 29, killing more than 100 in the U.S. and leaving about 8 million homes and businesses without power for days.

(snip)

The four-week average, a less volatile measure than the weekly figures, rose to 396,250 from 386,750.

Economists’ estimates for claims last week ranged from 365,000 to 500,000. Claims in the previous week were revised to 451,000 from a previously reported 439,000.

The Onion skewers the handwringing over the fiscal not-really-a-cliff by visualizing the effects. A nugget:

• Total breakdown of effective government will turn large parts of the country into an unimaginably hellish libertarian paradise
• Severe cuts to education spending, if you can fathom that

More visualizations at the link.

Alan Grayson discusses the sham of the “fiscal cliff”:

Via Suburban Guerilla.

Bloomberg:

More Americans than forecast submitted claims for unemployment insurance last week as superstorm Sandy also wreaked havoc on the job market.

Applications for jobless benefits surged by 78,000 to 439,000 in the week ended Nov. 10, the most since April 2011, the Labor Department said today in Washington. Several states said the increase was due to the storm that hit the Northeastern part of the U.S. in late October, a Labor Department spokesman said as the data were released to the press.

(snip)

Claims were projected to rise to 375,000 from the prior week, according to the median estimate of 49 economists surveyed by Bloomberg. Projections ranged from 340,000 to 475,000. The prior week’s reading was revised up to 361,000 from an originally reported 355,000.

(snip)

The number of people continuing to collect jobless benefits climbed by 171,000 to 3.33 million in the week ended Nov. 3, the most in more than four years. 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 33,300 to 2.12 million in the week ended Oct. 27.

Some persons are theorizing that a longer-term effect of the storm may be a boom in rebuilding supplies.

Thom explores “bankster-assisted” suicide; persons killing themselves because they have lost their homes.

Siman Caulkin explains that it’s the MBAs. A nugget:

The answer is that management in the 1980s was subject to an ideological hijack by Chicago economics that put at the heart of governance a reductive “economic man” view of human nature needing to be bribed or whipped to do their exclusive job of maximising shareholder returns. Embedded in the codes, these assumptions now have the status of unchallenged truths.

(snip)

But it’s not economics, it’s management, stupid. Unsurprisingly, downtrodden and outsourced workers, mis-sold-to customers, exploited suppliers and underpowered innovation cancelled out any gains from ever more ingenious financial engineering – leaving shareholders less well off in the shareholder-value-era since 1980 than in previous decades. The great crash of 2008 stripped away any remaining doubt: the economic progress of the last 30 years was a mirage. As Nassim Nicholas Taleb put it in The Black Swan, the profits were illusory, “simply borrowed against destiny with some random payment time.”

Read the rest.

Let Lawrence O’Donnell and his guests explain; the relevant portion starts about six minutes in:

Via Down with Tyranny.

Via C&L.

It’s media shorthand which the media favors because it’s s c a r y, nothing more.

PoliticalProf explains:

A cliff is a sheer faced embankment of considerable height.

A fiscal cliff is a man made metaphor to describe the after effects of failing to meet man made deadlines to solve a man made problem.

Maybe turning into a trend. Maybe not.

The number of people seeking unemployment benefits fell last week by 8,000 to a seasonally adjusted 355,000, a possible sign of a healing job market. But officials cautioned that the figures were distorted by Superstorm Sandy.

The Labor Department said Thursday that the four-week average of applications, a less volatile measure, rose by 3,250 to 370,500.