Relevant and even prescient commentary on news, politics and the economy.

I Tend to Describe this as "Unwarranted Optimism"

The Shrill One (tm – Brad DeLong) as Optimist:

The result, then, will be high unemployment leading into the 2010 elections, and corresponding Democratic losses. These losses will be worse because Obama, by pursuing a uniformly pro-banker policy without even a gesture to popular anger over the bailouts, has ceded populist energy to the right and demoralized the movement that brought him to power.

Despite all this, the midterms probably won’t give Republicans the majority in the House. But the losses will be big enough to deny Obama a working majority for any major initiatives in the rest of his first term. (My guess is that he’ll be reelected thanks to the true awfulness of the Republican nominee). Since Republicans are dead set against any of the things I think could help pull the economy out of its rut, this means more economic stagnation.

Can anyone point to any evidence of either of the bolded statements being likely to be true? (I’ll pre-emptively conceed that the Republican nominee may well be awful—probably a 75% probability, since the current Best Case Scenario is Mittens. But adjust you expectations by what you would have expected the Democratic Party nominee to be in late 2005.

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Simple Answers to Simple Questions, Floyd Norris/GS Edition

Floyd Norris is Shocked! Shocked! to Find Goldman Sachs controls Congress as well as the Treasury. Where has he been for the past three years?

Imagine the reaction if, perhaps during the 1998 Asian financial crisis, a group of Republican legislators had threatened to block legislation unless a contributor to their campaigns received special treatment. Then imagine what would have happened if a powerful House committee chairman had called companies with a direct interest in legislation pending in his committee and asked them to help out that contributor.

Why is this any different?

It isn’t. But why is this any different that the pandering to Goldman that you have been applauding for the entire Paulson/Geithner/Summers maiming of Main Street?

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Obliviously Offending the World, Teabag Edition

by Noni Mausa

From the NEWS.com.au Australian :
news service

Tea Party Obama ‘witchdoctor’ slur offends PNG October 01, 2009 02:46pm

PAPUA New Guinea tribesmen have demanded an apology from American political satirists who used their traditional dress in a witchdoctor slur against US President Barack Obama.

In the offending image, a headshot of Mr Obama was superimposed on a photograph of a PNG Highlands region man in full traditional costume, supposedly to portray the black President as an African witchdoctor.

Damien Arabagali, Hela Gimbu Association chairman, said PNG’s Foreign Affairs Minister and Cultural Minister would have to take up their demand.

[...]

HGA lawyer Alfred Kaibe, who wore his traditional Hela costume when sitting as a member of Parliament in 2001, said his people did not see the funny side.

“It borders on racism, to us and the US President,” he said. “The connotation is this type of dress is for witchcraft…This is our traditional costume; we are proud of it.”

Another HGA member suggested that if no apology was forthcoming the $16 billion ExxonMobil liquefied natural gas project based in the region could be jeopardised…

Well, maybe not. But maybe.

Good prospects of reopening Bougainville copper mine.
There are ‘positive prospects’ for reopening the Panguna copper mine in Papua New Guinea’s Autonomous Bougainville province, with local landowners planning a major reconciliation. The mine was closed nearly 20 years ago during a secessionist conflict led by the late Francis Ona, which was sparked by landowner issues and environmental damage caused by the mine……The Bougainville conflict that broke out in 1989, when rebels under the leadership of the late secessionist, Francis Ona, attacked the mine workers and installations over environmental pollution they alleged the mine was causing.

The mine was abandoned, and thousands of Bougainvilleans died in the subsequent civil war before a peace accord was reached in 2001.

Words and images have power, and not just in the intended direction . It doesn’t seem likely that the offensive images fostered by the American tea partiers will have force enough to reach around the world and effect the business dealings of ExxonMobil…

But they might.

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Texas is Not in a Recession, but it’s Bottoming Out

Rick Perry famously declared that there was no recession in Texas, even though the only way they balanced the budget was through emergency funding.

Rick Perry and the Federal Reserve Bank of Dallas appear not to talk with each other:

Texas factory activity showed the first signs of bottoming out in September, according to the business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key indicator of current manufacturing activity, came in close to zero as the number of companies seeing increases and decreases was nearly equal….

Employment indicators suggest manufacturers are still trimming payrolls, but the key indexes are becoming less negative. The average work week index rose for the second consecutive month, and about 17 percent of manufacturers noted increases in work hours. The employment index also improved as

the share of firms reporting job cuts fell

, while those reporting new hires rose from last month. Wage pressures remained minimal, with 92 percent of producers noting no change in compensation.

Yep. Just what we expect to see in a “normal” economy.

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It’s Not Just the Foreign Conservatives

Once of the things that was clear at CGI this week is that the power companies that have looked into alternative energy sources have quickly realised they are not only good publicity but profitable (i.e., lower cost when used to scale). Florida Power & Light (discussed here) expanded an already major commitment, mostly in FL and CA. Jim Rogers of Duke Energy—a man who, since at least 2001 at Cinergy, has been going around saying things like “I cause 1% of the carbon put into the atmosphere. What are we going to do about that?” (It’s much more since Duke Energy acquired Cinergy) and therefore is described in the business press as eco-friendly. (See here or here, for example.)&mash;was all over the place, announcing commitments and partnerships. And those are just the CEOs who were most visible at CGI this week, even ignoring the ExxonMobil people. (I looked for BP, but didn’t see anyone. Probably next year.)

It should come as little surprise that the energy and power companies want to do something about Anthropogenic Global Warming: they went through the spike in oil prices a couple of years ago as well, and saw the customer reaction. If there was any doubt that it’s not just a good idea but good business as well, $150/barrel and home heating oil spikes that flood the complaint lines and see the orders decline only solidified the idea. (Not to mention that they employ many of the people who will be leading the R&D of those alternative sources, from OTEC to solar to the newer, safer generation of nuclear plants.)

And now, we have utility companies making a sane decision: don’t work with people who actively work against you. As Buphonia notes, Pacific Gas & Electric and PNM Resources of New Mexico have both decided to pull out of the U.S. Chamber of Commerce.

PG&E:

We find it dismaying that the Chamber neglects the indisputable fact that a decisive majority of experts have said the data on global warming are compelling and point to a threat that cannot be ignored. In our opinion, an intellectually honest argument over the best policy response to the challenges of climate change is one thing; disingenuous attempts to diminish or distort the reality of these challenges are quite another.

PNM Resources:

“At PNM Resources, we see climate change as the most pressing environmental and economic issue of our time. Given that view, and a natural limit on both company time and resources, we have decided that we can be most productive by working with organizations that share our view on the need for thoughtful, reasonable climate change legislation and want to push that agenda forward in Congress.

As a result, we have decided to let our membership in the U.S. Chamber lapse when it expires at the end of this year.”

Somebody tell Joe Conanson. For an Aussie Conservative perspective, see here.

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CGI 2: Opening Ceremony / Initial Plenary Session (1 of 2)

This one’s going to be long because a lot of general themes get presented. Those looking for the shorter version may want to just go to the website and watch the videos.*

William Jefferson Clinton (WJC) introduces the proceedings by giving a background on the Clinton Global Initiative (CGI). CGI began in 2005, and required each participant to make a specific, measurable commitment. (This statement is followed by shot of Jessica Alba and Cash Warren, possibly because they started dating that year, but probably just because the director liked the shot.) Almost all commitments that were made then were multi-year (generally 3- to 5-year commitments). Five years into the CGI, about one-fourth of the commitments made have been fully completed. The CGI has, for instance, given 48 million people better access to health care. (Isn’t that just about what National Health Insurance would do for the US alone? Still, it’s 48 million people who are often ignored.)

There have also been “unvaluable but invaluable” effort at reconciliations. (I checked this; “unvaluable” is indeed a word.) Unlike other conferences, attendees will receive only a gift bag—the gift to participants is “only a bag.”** Each attendee (not certain if this includes the press, but I assume not) has been allocated 200 “points” that can be used at the “Giving Back Center.” For instance, one can donate “a P&G water filtration system” for 10 points.

I should mention that the organizers and donors to the conference are the clearest indication of the payoff from WJC’s “third way” efforts: Tom Golisano, for instance, is cited as a founding and continuing sponsor. Other major sponsors and donors to the conference include P&G, ExxonMobil, and APCO Worldwide (who are providing Wi-Fi access). I half expected to see ADM listed. (Matt Damon’s appearance sponsored by?)

(That ExxonMobil is a major sponsor of a conference that is placing Climate Change front and center in its discussions [see below] is a sign of either encouragement or a coming paradigm shift. Perhaps both.

WJC noted that Participants not invited back unless they do something toward their commitment during the year. However, due to the Global Financial Crisis, several previously-made commitments have had to be extended. (Three-year goals have become five-year goals, fives have become seven. This mirrors the year in which I expect to be solvent again.)

And then WJC talks about what WJC is best at talking about: po9litics. He notes that there are two questions that are asked in any political discussion: 1) What are you going to do? 2) How much money are you going to spend on it? Politicians almost never discuss how to do it to maximize positive impact in other people’s life. And it is that discussion that the CGI is all about.

He proceeds then to introduce a pairing that was made possible by last year’s CGI: Gary White and Matt Damon of water.org. The statistics flow from his (WJC’s) tongue: one billion people lack water, and 2.5 billion lack sanitation facilities. He loves this, and it’s somewhat infectious.

Water.org is an outgrowth, I gather, work that Gary White has been doing since 1990. Mr.White describes the economy before Watercredit was founded, where people paid 25% of their gross income for clean water, or had to borrow money from loan sharks at 125% interest rates to install toilets. By combining microfinance with technology transfer, water credit was able to ameliorate this situation in many areas—and its loans are repaid 97% of the time. I can think of several mortgage lenders who would like that repayment ratio.

Matt Damon then announced a new commitment for water.org, in that they are extending their efforts into Haiti, where 51% of the rural population lacks clean drinking water and 29% of the urban population lacks proper sanitation facilities. They are able to do this in part due to a generous commitment from the Ex;it Foundation. Many organizations are getting some good, useful publicity here.

The next presenter is Linda Lockhart of Global Give Back Circle, whose group is devoted to Educational Progress in Kenya for girls. Again, the source for this group was through CGI Connect. (Ms. Lockhart claims to have been surprised when she entered the keywords for her group’s goal [education, women] and immediately received multiple responses from organizations. (We clearly do not travel in the same circles.) The group’s efforts were rewarded when they discovered one of the root causes of women dropping out: lack of shoes. Teaming up with, among others, Microsoft, they presented the feel-good moment of the Opening Ceremonies with three Kenyan girls speaking–often in unison, sometimes sotto voce—about the good that Global Giveback Circle did for them.

At this point, the Plenary Session begins. WJC introduces Muhtar Kent, President and CEO of Coke. Mr. Kent speaks how Equal allocation of resources in Sub-Saharan Africa would, in and of itself, increase production 10-20%. In the current situation, women’s mobility is severely more restricted than men’s, of course. Kent, too, seems amazed to have learned this.

Kent is followed by Michelle Bachelet, current President of Chile and also, the first female defense minister in Latin America. Being a female politician, she not only has noticed but also has a strong interest in “soft” issues.

Mike Duke, the current CEO of Wal-Mart (WMT), ran the International Division before ascending to the chairmanship. WJC notes that WMT now offers health insurance to its employees, as well as having made a major effort to reduce its greenhouse gas emissions. (WJC stated, I believe, that WMT’s stock began rallying only when they announced their “global warming initiative.” I cannot find the evidence of this, though I didn’t do a thorough search.) Duke notes that a 5% reduction in their packaging alone was the equivalent of taking 210,000 diesel trucks off road. (And it saved them money. This theme will recur throughout from the CEOs.)

After this, WJC introduces Australian Prime Minister Kevin Rudd, describing him as having spoken about climate change in “excruciating detail,” which may well be the first time someone has done that to WJC instead of the reverse. Rudd notes that Australia is the country that has been the hardest hit by Anthropogenic Global Warming, and is the leading proponent of the other first-day theme: the G-8 giving way to G-20.

The particpants’s discussion on a Rock Following.

*If they post them; let me know in comments if you can find the video on the site and I’ll add a direct link.

**Compare with most conferences, where you get a bag and almost enough “swag” to cover the retail cost of the membership (which, for attendees, was $1,000 minimum).

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PSA

It’s true that I have been a bit nastier than usual with some posts (especially this one and this one—though the latter was rather justified by preceding events, as Tom detailed.) The sight of economists who should know better saying “Ewww, tariffs” in the manner of second grade boys who think girls have “cooties” is rather tiring. It’s almost as if they note that a strong rule of law is necessary to ensure that problems of asymmetric information are remedied and then complaining when those laws are actually used. Oh, wait…

Part of this is that people who should know better—maybe not Max B., but certainly Barry O.—keep pretending that Democrats have no obligation to be better than Republicans at addressing issues of inequality and opportunity. In which case one might as well vote for Republicans, if one can find those small-government, fiscally-conservative candidates that only Andrew Samwick seems to believe still exists.

But I am cautiously optimistic today. Thanks to Lance Mannion, I’ll be spending most of this week blogging/reporting the Clinton Global Initiative in New York City. While many of the participants are The Usual Suspects, there is at least some hope that they will approach the world better than they appear to approach their electorate.

If there is anything, especially on Thursday, that someone especially wants to cover, feel free to note it in comments. (Or, if you’re going to be there, say hello.)

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He’s from Georgia, but He Speaks the Language Very Well

WalterJon finds a brilliant judge’s response to a “birther” case:

The Court observes that the President defeated seven opponents in a grueling campaign for his party’s nomination that lasted more than eighteen months and cost those opponents well over $300 million. Then the President faced a formidable opponent in the general election who received $84 million to conduct his general election campaign against the President.

It would appear that ample opportunity existed for discovery of evidence that would support any contention that the President was not eligible for the office he sought. To press her “birther agenda,” Plaintiff’s counsel has filed the present action on behalf of Captain Rhodes….

The American taxpayers paid for her third and fourth years of medical school and financially supported her during her subsequent medical internship and residency program. In exchange for this valuable free medical education, Captain Rhodes agreed to serve two years in active service in the Army. She began that term of active service in July of 2008 and had no concerns about fulfilling her military obligation until she received orders notifying her that she would be deployed to Iraq in September of 2009.

Captain Rhodes does not seek a discharge from the Army; nor does she wish to be relieved entirely from her two year active service obligation. She has not previously made any official complaints regarding any orders or assignments that she has received, including orders that have been issued since President Obama became Commander in Chief. But she does not want to go to Iraq (or to any other destination where she may be in harm’s way, for that matter). Her “conscientious objections” to serving under the current Commander in Chief apparently can be accommodated as long as she is permitted to remain on American soil.

Read the whole post. And enjoy the whole decision [PDF].

Title ref:

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Compare and Contrast

Andrew Samwick:

Government bureaucrats don’t reduce costs. Market competition reduces costs. The challenge for health care reform is to get the market competition into the places where we want it — providers and insurers competing to deliver better services at lower prices — and out of the places where we don’t want it — insurers competing to insure only the lowest risks and providers gaming the government reimbursement systems to earn the highest profits.

Susan of Texas:

Government might possibly keep [one] safe and therefore the billions wasted are money well-spent. [One] graciously permits the government to police [one's] bar-hopping, repair the roads [one] drives on, clean [one's] water and deliver it to [one's] door, remove [one's] bodily waste, treat it, and release it far from [one's] view.

The government hauls away [one's] garbage, keeps [one's] lights on, pumps natural gas into [one's] water heater, for far less money than it would cost if [one] had to do it on [one's] own. It keeps food manufacturers from poisoning [one], and inspects the restaurants [one] visits, the buildings [one] lives and works in, the cars that whizz by [one] on the freeway. It created the internet [one] works on, and much of the medication and vaccines [from which one] has benefited. It educated most of the people who fix [one's] dishwasher, [one's] car, [one's] hair, [one's] dog. All of that is perfectly okay. But health care for people drowning in rising premiums?…[T]here the benefits must stop, there the line must be drawn.[emphasis mine]

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Amanda Explains It All to You

Or at least why the best case for BarryO and Co. is that I’m just not going to bother to vote for the next several years:

Apparently, the American swing voter tends to think, “If I’m going to get screwed over, I want it to be by someone who is aggressive as possible about it.”

That’s pretty much the summary of it.

Hint to Rahm Emmanuel: when you run a candidate with “I’m going to fix Health Insurance by adding a Public Option” at the center of his platform and then make it worse, do not be surprised when the voters decide that your candidate and His Party are not worth the trouble of voting.

UPDATE: Dr. Black disagrees. This is the sad part of being trained to believe Rational Expectations theory. As with other forms of Early Indoctrination, leaving the Alliance doesn’t mean you leave the no-longer-explored assumptions.

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