Political Economy category archive

John Cole on Paul Krugman.

Zandar summarizes the nay-sayers:

In other words, we can’t afford stimulus because it’ll hurt the bond traders.

My Daddy told me how, during the Depression, he and lots of other persons learned how to make tomato juice in restaurants by pouring catsup into a glass of water.

Fortunately, he grew up on Pine View Farm, so his family always had food.

Steven D at the Booman Tribune recalls some facts, leading up to some lessons from history. Here’s a excerpt from the “lessons” portion towards the end of his post:

Roosevelt created demand by creating jobs. He strengthened unions and labor. He gave us the first programs to provide a social safety net in this country so the elderly, the unemployed and the disabled didn’t die because they were too poor to afford food and shelter. Did everything he did turn out perfect? Of course not. But in the long run, the New Deal radically changed America for the better.

You can’t say that about the policies promoted by republicans and conservative Democrats over the last 30 years. Those polices led to corruption, fraud, and an economic implosion on a massive scale unknown since the Great Depression. They have also set Americans against fellow Americans and put a heavy anchor on our ability as a nation to compete and succeed in the world.

The entire post is worth the 10 minutes it takes to read.

Not just in San Jose (emphasis added):

The Great Recession continues to cast a deep shadow over Silicon Valley’s economy, with new figures released by the Santa Clara County assessor’s office today revealing the disturbing disappearance of thousands of businesses during the last year.

The report also confirmed a historic plunge in overall property values, with Santa Clara County’s assessment roll for 2010-11 dropping about 2.4 percent, from $303.8 billion to $296.47 billion. Not counting a massive decline after Proposition 13 went into effect in 1978, this year’s reduction is the largest since 1933 — in the early days of the Great Depression.

Creeping upwards once more:

Initial jobless claims increased by 13,000 to 472,000 in the week ended June 26, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance rose, while those getting emergency benefits dropped after Congress failed to act on extending the legislation.

Republicans and Blue Dogs appear to have a two-pronged strategy to remedy this:

• Cut back on unemployment benefits so fewer persons swell the number of recipients, and
• Throw more people out of work.

Bingo. Unemployment problem solved.

Naomi Klein explains it all:

At this weekend’s summit the Canadian prime minister, Stephen Harper, convinced his fellow leaders that it simply wouldn’t be fair to punish those banks that behaved well and did not create the crisis (despite the fact that Canada’s highly protected banks are consistently profitable and could easily absorb a tax). Yet, somehow, these leaders had no such concerns about fairness when they decided to punish blameless individuals for a crisis created by derivative traders and absentee regulators.

Deficit hawks: Wolves in sheep’s clothing.

The general assumption is that reducing the deficit should be a top national objective, and that Social Security should be considered a major source of deficit relief. That much is simple enough. But little else about the campaign against deficits is so simple.

Two issues must be sharply separated. The first is the fiscal policy question of how long increased deficits can be prudently tolerated in the interests of stimulating the economy. The second issue, Social Security, is different – though one wouldn’t know it from listening to most deficit hawks.

Government budget deficits are a serious problem, but Social Security is not a serious part of it. To say otherwise is to engage in mythmaking, and the deficit hawks are doing a lot of that. Those who warn that Social Security’s revenues will fall short of outlays in the 2040s are really pointing to a need for small adjustments, not a problem with the program’s solvency.

Addendum:

Via Michael Tomasky at the Guardian (whose article is worth a glance), try this out to see where real savings lie. Hint: Not in reducing old folks to penury.

Via Marc.

Be sure to start with episode one, linked in beginning of the post.

From the Guardian. Read the whole thing:

For decades, one of the main tools in the arsenal of those seeking to prevent actions to reduce emissions has been to declare the that the science is too uncertain to justify anything. To that end, folks like Fred Singer, Art Robinson, the Cato Institute and the ‘Friends’ of Science have periodically organised letters and petitions to indicate (or imply) that ‘very important scientists’ disagree with Kyoto, or the Earth Summit or Copenhagen or the IPCC (Intergovernmental Panel on Climate Change–ed.) etc. These are clearly attempts at ‘arguments from authority’, and like most such attempts, are fallacious and, indeed, misleading.

They are misleading because as anyone with any familiarity with the field knows, the basic consensus is almost universally accepted. That is, the planet is warming, that human activities are contributing to the greenhouse gases in the atmosphere (chiefly, but not exclusively CO2), that these changes are playing a big role in the current warming, and thus, further increases in the levels of GHGs (green-house gases–ed.) in the atmosphere are very likely to cause further warming which could have serious impacts.

Still over 450k:

Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 457,000 in the week ended June 19, the Labor Department said on Thursday.

The decline in claims was the largest since the week ended April 17. Analysts polled by Reuters had expected claims to fall to 460,000.

Separately, durable good orders excluding transportation rose 0.9 percent last month, the Commerce Department said. However, overall durable goods orders fell 1.1 percent, the first decline in six months, dragged down by the volatile aircraft component.

LCD signs seem to have made much greater inroads here than in the Greater Philadelphia Co-Prosperity Sphere. Up there, I remember some LCD billboards along I-95 south of the Philadelphia Airport, but I did not see them at schools and churches. Furthermore, the billboards would rotate among several advertisements, but each ad would be a static display, except possibly for a temperature display.

These sign down here are more animated than a Pixar movie, with dancing text, fade-in-fade-out, graphics, and pictures. (Probably look good on the computer screen when they are composed and allow the persons who program the signs to think they have l33t hax0rz sk1lz, but from the road they are really uglificated.)

Schools and churches and some businesses have them and more businesses want them. More to the point, the people who sell them want to sell more of them, until Atlantic Avenue looks like the Lost Wages strip.

Personally, I find them obnoxious, ugly, and distracting from my driving. (A church with an LCD sign is a church whose door I shan’t darken.)

So, when Virginia Beach restricted them, I did not regret it, though I didn’t feel strongly enough to, say, write a letter about it to a council critter.

I would still prefer that they went away, but, on reflection, I think Joel has a fairer idea.

If a business can afford an LCD sign, let them get an LCD sign. A less invasive ordinance would have been to regulate the size, height, brightness, etc. of the signs. Let’s keep the signs from being too big and too bright, but let’s allow businesses to take advantage of new technology in advertising.

Especially the brightness.

(The local rag says garden clubs were responsible for the ban.)

Ask and ye shall receive:

The City Council has agreed to lease developer Bruce Thompson more parking spaces in the 31st Street garage so he can build a hotel on the site of a BP gas station.

The City Council on Tuesday didn’t debate the issue and the discussion lasted less than 15 minutes, but the 6-5 vote indicated how controversial leasing these public spaces has been behind-the-scenes.

(snip)

The city built the garage for the Hilton in a public-private partnership with Thompson.

The rate the Beach will charge Thompson is less than the $1,080 a year that the city markets for a reserved space and lower than the $1,275 annual fee the Beach’s parking staff initially recommended.

As I mentioned last week, the speed of this sort of gives me the creeps.

MarketWatch:

“If history is a guide, what happens with jobs will matter the most to the strength of the housing rebound,” said Eric S. Belsky, executive director of Harvard’s Joint Center for Housing Studies, in a news release. Jobs keep homeowners out of foreclosure and help others feel confident enough to form households.

Another problem: Affordability issues are still lingering, said Nicolas P. Retsinas, the center’s director. According to the report, 40.3 million households spent more than 30% of their income on housing in 2008, and 18.6 million spent more than half of their income, up from 13.8 million in 2001.

“Notwithstanding the fall of prices and tempering of rents, there are serious affordability challenges,” Retsinas said.

Real median household incomes are poised to end 2010 lower than they were in 2000, according to the report. The household median income was $49,800 in 2008, down from $52,400 in 2000, the report said, citing the most recent data available.

Also, deficits.

From the Chicago Trib:

The good news for bank customers this summer is that new federal rules should cut down on unexpected overdraft fees.

The bad news is that banks are starting to design new fees to help make up for the surcharges they might lose.

I have no problem with banks charging fees as long as the fees are open and above board.

In recent years, though, they have not been. In too many cases, we have been dealing with the National Bank of by Hook or by Crook.

George Monbiot reviewed a book recently, pointing out that the central thesis of the author was completely false, his evidence questionable, and his reasoning circular (in fact, I think I might have linked the review, but I’m too lazy on a Saturday afternoon to check).

The author begged to differ.

In responding to the author’s dissent, Monbiot explains how the circular reasoning of right wing economics works and why it is successful:

His book has now been reviewed dozens of times, and almost all the reviewers have either been unaware of his demonstration of what happens when his philosophy is applied or too polite to mention it. The reason, as far as I can see, is that Ridley is telling people – especially rich, powerful people – what they want to hear.

(snip)

When, as I have found many times before, you explain an inconvenient truth about neoliberal or anti-environmental ideas, it is met with silence. The media simply looks the other way. There is a massive rightwing echo chamber. Nothing comparable exists on the left.

Rapacious credit card fees to be limited:

Consumers, particularly those who are consistently late in paying their credit-card bills, now can breathe a sigh of relief: The Federal Reserve said Tuesday it is limiting penalty fees to no more than $25 in most cases as well as banning so-called “inactivity” fees.

In its third stage of implementing the sweeping Credit Card Accountability Responsibility and Disclosure Act of 2009, the Fed also said it’s putting the squeeze on late fees that are higher than the consumer’s violation. For example, a consumer who was late paying a $20 minimum payment could be charged a $39 penalty fee. The Fed on Tuesday said penalty fees cannot exceed the dollar amount of the consumer’s violation.

New unemployment claims still in the high 400,000s. Bloomberg:

Initial jobless claims increased by 12,000 to 472,000 in the week ended June 12, Labor Department figures showed. Economists surveyed by Bloomberg News projected the number of applications would drop to 450,000, according to the median forecast.

The figures indicated firings are staying elevated even as the economy grows. Some companies are trimming payrolls to boost or maintain profits at the same time overall employment has grown each month this year.

Other trends are more positive. Follow the link for more.

MarketWatch’s prognosis is less positive.

Locally, foreclosures are still up.

MarketWatch explores four myths about the housing market and explains why the bubble won’t rebubble all over again.

“Bubble” means the prices were far higher than they should have been. They shouldn’t go back to those levels. If they do, run and hide.

The myths (follow the link for the full discussion):

1. The housing recession is over.

2. After markets hit bottom, prices will rebound to boom levels.

3. The worst of the foreclosure mess is behind us.

4. The tax credits saved the housing market.

United States military spending is almost half the federal budget. It should be scrutinized as carefully as any other portion of the budget.

The Boston Globe:

THE NEED to pare down wasteful Defense Department spending has been obvious for some time, yet too many politicians have kept a discreet silence on the issue. So kudos are due to a bipartisan quartet of legislators for making the case that meaningful cuts in the Pentagon’s budget must be part of any serious effort to reduce future deficits. The national interest is plain to see: America must stop borrowing money from other countries to fund weapons systems and foreign military bases for which there is no need.

Kenny Golden, who is running as an independent against Democratic Congressman Glenn Nye and Republican Scott Rigell, is not a responsible fiscal. According to The Slant, his budget plan exempts defense spending completely (it also is arbitrary and capricious, mandating cuts without reference to usefulness or efficiency, but that’s another issue).

From his press release (emphasis added):

Kenny’s Top Three Issues

1. Cutting the budget deficit

• 2% annual budget cuts on each cabinet level department except the Department of Defense

• Consolidate or eliminate redundant federal agencies and functions

Then, again, Mr. Golden was a Republican until he jumped ship to run in this election. The public record of Republicans as responsible fiscals is clear. They talk a lot.

Still above 450k:

Initial jobless claims dropped by 3,000 to 456,000 in the week ended June 5, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected 450,000 claims, according to the median forecast. The number of people receiving unemployment insurance fell to the lowest level since 2008, while those getting extended payments climbed.

While payrolls rose for a fifth month in May, hiring by companies was less than forecast, underscoring Federal Reserve Chairman Ben S. Bernanke’s comments yesterday that there will be “only a slow reduction” in the unemployment rate. Job gains are needed to spur consumer spending, which accounts for 70 percent of the economy, and ensure a sustained expansion.