Looks like Goldman-Sachs nailed the GDP forecast. A couple of weeks ago the economists at Goldman-Sachs predicted 4Q GDP growth of 5.8%. And they said that most of it would be due to inventory gains. Maybe those analysts at Goldman-Sachs are worth those high salaries afterall. Just kidding.
From the same article: “China aims more than 1,000 ballistic missiles at Taiwan; the U.S. government is bound by law to ensure the island is able to respond to Chinese threats.”
Margery, the self-procalimed defense and international treaty expert, fails to point this out.
Bruce Wilder, owner of the Coming Perfect Storm blog, made the following statement in comments at another blog today:
Bruce Wilder said…
The U.S., in the 1920s, was excited by the possibilities of the new economy of telephones, electricity, automobiles, movies, radio and television. But, the old economy of agriculture and steam was played out, and fully half the population was stuck on the farm and sinking rapidly into deeper and deeper poverty and despair. The financial crisis, brought on by a hysteria expressed in runaway speculation in fraudulent schemes, marked the beginning of 20 years of crisis, as the world came apart and a new architecture was developed, to rebuild it.
The U.S. today has played out the economic and political architecture of the New Deal and WWII. Those structures, concepts, opportunities, imperatives, habits — they are all dead and broken and played out, exhausted.
It isn’t just our political system, but the whole basis of our economic and national life.
The country is like an old man, the powers and ideals of youth faded away, consumed, at the end, by the final triumph of bad habits and weaknesses of character. The smoking that was a daring rebellion at 20 is cancer at 60; the generosity and confidence of the prosperous 30-something is poverty and anxiety at 70.
Building out new suburbs, buying a second car and a television, going to the new shopping mall, bearing any burden in a fight against godless communism — these hopeful, idealistic and highly productive ideas have become caricatures and monstrosities: McMansions, SUVs, the Global War on Terrorism, 500 channels and nothing to watch. Kennedy’s taxcut and Johnson’s Great Society, that triggered the prosperity of the 1960s, reducing poverty, and encouraging the country to cast off the conventionalism imposed with WWII discipline, have become Bush’s taxcuts for the rich, and a dumb acceptance of the inexorable rise of poverty.
The indecision and irresponsibility of our politics is just a symptom of a political economy at the end of its natural life — an analogue to the senility and incapacity of a diseased old age.
Even if the political system, in its near-terminal corruption and paralysis, continues to refuse to answer, reality presses on, and necessity increases its demands.
The sense that the country is progressing toward becoming a banana republic of authoritarian politics, with a vicious corporate elite oppressing and exploiting a passive population is palpable. And, the evidence of the institutional decay to bring about this result is plentiful, as one after another institution of the New Deal has been destroyed or corrupted, and every ideal of liberal internationalism has been made into a bad joke, in a farcical parody called, “American Empire”. (America Triumphant is spending record defense budgets to tramp around the absolute poorest places on earth, blowing holes in the sand and knocking one rock off another, while using the Constitution as toilet paper in a camp for some pathetic group of alleged scary terrorists, many of whom aren’t scary or terrorists!)
“Change we can believe in” — We still desperately want the change, but no one believes we are going to get it.
Everything — every fundamental thing about how this country and the world is organized, economically and politically, has to change to adapt to the new reality of peak oil and global warming and globalized communication.
The most frustrating thing to me, about the way Krugman abstracts, say, the case for fiscal stimulus spending on a vast scale, is that he never connects it to reality. It is true that the Keynesian “technical insight” is that it doesn’t really matter what you spend the money on. But, it […]
Bruce Wilder, owner of the Coming Perfect Storm blog, made the following statement in comments at another blog today. This statement is worthy of a main post if not a full fledged effort at Angry Bear to rethink economic and social thought related to the U.S. political economy.
Bruce Wilder said…
“The U.S., in the 1920s, was excited by the possibilities of the new economy of telephones, electricity, automobiles, movies, radio and television. But, the old economy of agriculture and steam was played out, and fully half the population was stuck on the farm and sinking rapidly into deeper and deeper poverty and despair. The financial crisis, brought on by a hysteria expressed in runaway speculation in fraudulent schemes, marked the beginning of 20 years of crisis, as the world came apart and a new architecture was developed, to rebuild it.
The U.S. today has played out the economic and political architecture of the New Deal and WWII. Those structures, concepts, opportunities, imperatives, habits — they are all dead and broken and played out, exhausted.
It isn’t just our political system, but the whole basis of our economic and national life.
The country is like an old man, the powers and ideals of youth faded away, consumed, at the end, by the final triumph of bad habits and weaknesses of character. The smoking that was a daring rebellion at 20 is cancer at 60; the generosity and confidence of the prosperous 30-something is poverty and anxiety at 70.
Building out new suburbs, buying a second car and a television, going to the new shopping mall, bearing any burden in a fight against godless communism — these hopeful, idealistic and highly productive ideas have become caricatures and monstrosities: McMansions, SUVs, the Global War on Terrorism, 500 channels and nothing to watch. Kennedy’s taxcut and Johnson’s Great Society, that triggered the prosperity of the 1960s, reducing poverty, and encouraging the country to cast off the conventionalism imposed with WWII discipline, have become Bush’s taxcuts for the rich, and a dumb acceptance of the inexorable rise of poverty.
The indecision and irresponsibility of our politics is just a symptom of a political economy at the end of its natural life — an analogue to the senility and incapacity of a diseased old age.
Even if the political system, in its near-terminal corruption and paralysis, continues to refuse to answer, reality presses on, and necessity increases its demands.
The sense that the country is progressing toward becoming a banana republic of authoritarian politics, with a vicious corporate elite oppressing and exploiting a passive population is palpable. And, the evidence of the institutional decay to bring about this result is plentiful, as one after another institution of the New Deal has been destroyed or corrupted, and every ideal of liberal internationalism has been made into a bad joke, in a farcical parody called, “American Empire”. (America Triumphant is spending record defense budgets to tramp around the absolute poorest places on earth, blowing holes in the sand and knocking one rock off another, while using the Constitution as toilet paper in a camp for some pathetic group of alleged scary terrorists, many of whom aren’t scary or terrorists!)
“Change we can believe in” — We still desperately want the change, but no one believes we are going to get it.
Everything — every fundamental thing about how this country and the world is organized, economically and politically, has to change to adapt to the new reality of peak oil and global warming and globalized communication.
The most frustrating thing to me, about the way Krugman abstracts, say, the case for fiscal stimulus spending on […]
Bruce Wilder, owner of the Coming Perfect Storm blog, made the following statement in comments at another blog today. This statement is worthy of a main post if not a full fledged effort at Angry Bear to rethink economic and social thought related to the U.S. political economy.
Bruce Wilder said…
“The U.S., in the 1920s, was excited by the possibilities of the new economy of telephones, electricity, automobiles, movies, radio and television. But, the old economy of agriculture and steam was played out, and fully half the population was stuck on the farm and sinking rapidly into deeper and deeper poverty and despair. The financial crisis, brought on by a hysteria expressed in runaway speculation in fraudulent schemes, marked the beginning of 20 years of crisis, as the world came apart and a new architecture was developed, to rebuild it.
The U.S. today has played out the economic and political architecture of the New Deal and WWII. Those structures, concepts, opportunities, imperatives, habits — they are all dead and broken and played out, exhausted.
It isn’t just our political system, but the whole basis of our economic and national life.
The country is like an old man, the powers and ideals of youth faded away, consumed, at the end, by the final triumph of bad habits and weaknesses of character. The smoking that was a daring rebellion at 20 is cancer at 60; the generosity and confidence of the prosperous 30-something is poverty and anxiety at 70.
Building out new suburbs, buying a second car and a television, going to the new shopping mall, bearing any burden in a fight against godless communism — these hopeful, idealistic and highly productive ideas have become caricatures and monstrosities: McMansions, SUVs, the Global War on Terrorism, 500 channels and nothing to watch. Kennedy’s taxcut and Johnson’s Great Society, that triggered the prosperity of the 1960s, reducing poverty, and encouraging the country to cast off the conventionalism imposed with WWII discipline, have become Bush’s taxcuts for the rich, and a dumb acceptance of the inexorable rise of poverty.
The indecision and irresponsibility of our politics is just a symptom of a political economy at the end of its natural life — an analogue to the senility and incapacity of a diseased old age.
Even if the political system, in its near-terminal corruption and paralysis, continues to refuse to answer, reality presses on, and necessity increases its demands.
The sense that the country is progressing toward becoming a banana republic of authoritarian politics, with a vicious corporate elite oppressing and exploiting a passive population is palpable. And, the evidence of the institutional decay to bring about this result is plentiful, as one after another institution of the New Deal has been destroyed or corrupted, and every ideal of liberal internationalism has been made into a bad joke, in a farcical parody called, “American Empire”. (America Triumphant is spending record defense budgets to tramp around the absolute poorest places on earth, blowing holes in the sand and knocking one rock off another, while using the Constitution as toilet paper in a camp for some pathetic group of alleged scary terrorists, many of whom aren’t scary or terrorists!)
“Change we can believe in” — We still desperately want the change, but no one believes we are going to get it.
Everything — every fundamental thing about how this country and the world is organized, economically and politically, has to change to adapt to the new reality of peak oil and global warming and globalized communication.
The most frustrating thing to me, about the way Krugman abstracts, say, the case for fiscal stimulus spending on […]
Blog owners and participants should note this statement by the President.
“I was not elected by Democrats or Republicans but by the American people. That’s especially true because the fastest growing group of Americans are independents.” – President Obama, 29 January 2010
Bloggers who cling to the old, standard arguments pitched by both major political parties and base their “expert” thinking on such fail to recognize that their canned, boring messages fall far short of being effective with a growing block of voters – the Independents.
As an independent voter, I can share that much of the blog commentary is like listening to two or forty salesmen trying to sell two different brands of failed products. The result is no sale, and that is evidenced by the growth in the number of independent voters as acknowledged by President Obama on 29 January 2010.
The general failure of blogs and bloggers to recognize and understand the growing number of independent voters is, indeed, a significant failure of message not only in ideology but in almost every other regard. Such bloggers don’t understand one third of their potential customers or allies. Many bloggers continue to act as though one third of the American voters do not exist for discussion purposes. The situation couldn’t be more absurd.
So we don’t want to antagonize China right now, they say? So what do we do? We sell 9 billions of military equipment to Taiwan. Talk about a dysfuctional government where the right hand doesn’t know what the left is doing.
Oh I am perfectly aware of this, have no fear. Of course we could change our laws or are they written in stone? Our arms sales to Taiwan are what prompt China to aim its missles at it. They don’t like to have to do that. Taiwan is a relic of US imperialism which you evidently don’t know much about. It resulted from Mao defeating and driving our darling puppet Chiang Kai Shek out of China when he took refuge in Taiwan protected by the US fleet. Talk about interference in the affairs of another nation. Mao upset the US because he liberated it from our puppet (run to a large extent by his wife who was more American than Chinese and who died, as I recall, in a penthouse at the Waldorf Astoria).
The New York Times: As a fluent English speaker, as a Christian, as a model of what many Americans hoped China to become, Madame Chiang struck a chord with American audiences as she traveled across the country, starting in 1930s, raising money and lobbying for support of her husband’s government. She seemed to many Americans to be the very symbol of the modern, educated, pro-American China they yearned to see emerge — even as many Chinese dismissed her as a corrupt, power-hungry symbol of the past they wanted to escape.[6]She is buried in a New York State cemetery. And remains there to this day. Read the rest of the Wikipedia article; it might wise you up.
Mao did for China what Ho Chi Minh did for Vietnam—get the imperialists out. He did it sooner and so decisively that we didn’t even have a chance to try to stop him, although MacArthur in his insane moments evidently thought a nuke might be used to keep China under our control. And when MacArthur was so stupid as to ignore instructions and drive his army up to the border of China, theatenting it, the Chinese swarmed over the Yalu and beat our asses to a pulp, thus ensuring that S. Korea didn’t take over the whole peninsula. Wise up.
I may be in error that she died at the Waldorf Astoria. She often stayed there in a penthouse suite. She had a large estate in upper New York State. When she sold that she is said to have moved into an apartment of a relative in the Gracie Square area of the Upper East Side.
MG, ditto, what Sammy said. He doesn’t understand the reason for the tea parties, global warming, nor globalization. He comes across as a hard core progressive (not Dem nor lib, but the Glenn Beck historical description.)
***Now for the zinger: 5.8 percent growth and you still say we’re in a liquidity trap. Bahh humbug.***
Sigh. …Cantab, will you PLEASE goddamn it, either learn some basics or shut up? In particular, go look up what a liquidity trap and an inventory bounce are. Note that those who are worried about a liquidity trap and/or a U/L shaped recession anticipated thiis good number and another fair, but positive number next quarter. It’s Q2 2010 and beyond that they are worried about. Here are a few references to help you:
So, basically, a liquidity trap in modern usage has nothing to do with growth per se. It just means that interest rates are stuck close to zero and that the central bank or whatever can not stimulate the economy by lowering rates. Periods of positive growth are still possible and in the Japanese example, they occur. See http://en.wikipedia.org/wiki/File:Real_GDP_growth_rate_in_Japan_(1956-2008).png And note that the Japanese chart stops in 2006 just before the Great Recession started so it’d presumably look even more dismal if it were extended to the present.
An inventory bounce occurs when there is a change in the rate of growth of inventory. I’m pretty sure that it is analogous to transients that occur in physical systems (e.g. amplifiers) when levels are abruptly changed. Read the first Krugman article http://krugman.blogs.nytimes.com/2009/04/08/the-bounce-and-the-revision-thing/ . You don’t have to agree with Krugman’s conclusions to follow his very clear explanation of what an inventory bounce is. So far as I know, his description of an inventory bounce isn’t controversial.
I imagine that the eventual US/Taiwanese response will be to beef up Taiwan’s anti-ballistic missile capability because that looks good in the media. (It still probably won’t work worth a damn). And also, to beef up Taiwan’s land based anti-ship missile capability to a level that would make a Chinese invasion impossilble/impractical. Since the Chinese would hardly want to encourage the latter if they had, or might ever, want to invade Taiwan, I would conclude that China has no intention whatsoever of invading Taiwan.
So, I personally hope/think that this is all theater. Looks to me like China intends eventually to to achieve unification under some scheme that preserves Taiwan’s economic and political autonomy — “Two flags, one country” or some such thing. Reality is that over the past four decades or so, the two governments have gone from exchanging artillery rounds every morning to having scheduled air flights between Taipei and Beijing. (How long before we get scheduled flights between Miami and Habana?)
Thanks. Bruce is a very articulate & vivid writer as well as a frequent poster over at MT’s site. I did not know that he had his own site.
Sammy & CoRev: All great powers and great empires fade away…usually not with a bang, but with a whisper. In many ways the US today is not unlike Britain in the early 20th century; a great power past its peak but not yet aware of it. Sort of like a the 36 year old professional athletes who still thinks of himself as that 26 year old on the other side of his career. To get all Bruce Wilder-like on you, let me remind you of Hegel’s quote that the owl of Minerva spreads its wings only at dusk. http://en.wikipedia.org/wiki/Glaucus_(owl)
I do think we’re at a turning point, and so far our voters and politicians are not exactly covering themselves with glory. There is a very deep economic crisis right now. It is global. It is not just your garden variety recession. There has been a lot of new research on recessions caused by financial collapse versus other kinds of recessions. These kinds of recessions typically last the better part of a decade. In Japan’s case they are going into their third decade. And that’s not our only problem. The day when the US was the clear leader in hourly worker productivity are long gone. Hey…even the French enjoy higher hourly productivity than American workers. The long run deficit is unsustainable and will require some combination of crippling taxes, severe budget cuts, or drowning inflation. And the Republican answer seems to be that somehow these burdens will be easier with an economy in permanent recession. Sheesh. We have to balance a long run imperative to shrink the deficit against a short run imperative to expand the deficit. That’s an easy problem to solve on the blackboard, but a near hopeless task when politicians and the electorate don’t have a clue. Bruce is right about suburban sprawl, energy consumption, greenhouse emissions, transportation…my only beef with him is that he forgot to include impending water shortages in vast parts of the sunbelt. And our electorate is getting dumber. It’s a sad demographic fact that young people today are likely to be less well educated (in terms of years of formal education) than their parents. Even the top 50 American universities, which only a few years ago were far and away the best in the world, are slipping fast in world rankings. There was a recent NBER paper on this development. And with all this we’ve got a political landscape that is becoming totally regionalized. Democrats are cowards and Republicans are hell bent on trying to turn back the clock. But voters deserve blame as well. I think the central problem with today’s voter is that he or she no longer thinks beyond his or her lifespan. In econ-speak we have the problem of a finitely lived representative agent posing as an intergenerational representative agent. As a result we evaluate social projects using a private discount rate rather than a social discount rate.
***We’ll see. They blocked him on healthcare, why won’t they do so on banking reforms?***
Being a bunch of lowlife, obstructionist, corrupt, lying, scumbags, I imagine that they might. But it isn’t going to be easy for them to support bankers in an election year when most of the electorate favor killing all the bankers and letting God sort them out.
The 5.8% number was the Goldman-Sachs estimate from a couple of weeks ago. The BEA number was 5.7%. Not only that, but the G-S guys actually got the individual share projections right. So when the news media was reporting this as a “surprise”, what they meant was that it was a surprise to clueless reporters. And as the G-S advance forecast also made pretty clear, there are plenty of reasons to see this as a very bad number. To begin with, it’s an initial estimate and there are a lot of reasons to believe it will be revised downward quite a bit, as was the 2003 estimate. But delve into the details. The GDP growth in final demand was only 2.2%, which is way to weak of a number given where we are in the business cycle. That number needs to be closer to 5%. Way most of the growth was due to inventory gains and those were a direct result of the cash-for-clunkers program. A lot of confused posters here at Angry Bear kept arguing that the 3QTR GDP numbers were inflated because of cash-for-clunkers, but as I argued a few months ago, that’s not how NIPA accounting works. Cash-for-clunkers resulted in a lower GDP growth rate in 3QTR because it reduced inventory levels. The boost to GDP comes in the following quarter when (and if) businesses replenish inventories. GDP is not about gross sales, it’s about gross production. The problem is that businesses replenished inventories, but there is no reason to believe that those inventories will be consumed in 1QTR 2010. Also, the 4QTR numbers show that that govt spending did not contribute to the GDP growth rate…and please understand the algebra and the terms here. What this means is that govt fiscal stimulus has already peaked in terms of the GDP growth rate, but that does not mean govt spending isn’t contributing to GDP growth. If you’re confused, see this: http://krugman.blogs.nytimes.com/2009/12/27/stimulus-timing/
And the last time I checked the nominal interest rate was zero, the NAIRU clearing interest rate was around negative 5%, and the money multiplier was less than 1.00. So yes, we are still in a liqudity trap. A liqudity trap does not mean there can’t be economic growth; it means conventional monetary tools will no longer work to further stimulate the economy. Going back to the old IS-LM model, it means the LM curve is flat, so your only hope for growth is a vertical IS curve.
I think you are right on all counts. The missles as I recall worried US fleet commanders in the area because they effectively negated the power of the US navy to “defned” Taiwan from invasion. It would be useful all around if the US simply stopped arming its colonial relic in the Far East, born of our idea that China was ours (you might recall the rage about who “lost China” as if it had belonged to us). I see Israel and Taiwan as our two colonial irritants that serve us badly: one infuriating the Muslim world and the other China. And to little or no purpose.
The reason for the Tea Parties is a bunch of angry, frustrated people who haven’t a clue about why things aren’t going well for them and whose brains are not up to understanding the matter realistically. So they fall for plutocratic propaganda that is happy to keep them mis-understanding things because it works to their advantage. Glenn Beck describes his own deranged mind most of the time. He has little connection to the real world outside him.
A story from World Net Daily??? And you took it seriously ?
Cancelling flights is not unusual. Pelosi flies around in a military jet for the same reason that the President flies in a military jet, as does the Veep. Pelosi is third in the succession line. I’ve flown in those jets and frankly I’d much rather fly first class on a commercial plane. Even coach for that matter. I remember one military aircraft flight that I had to take. We were told that it was one of those Gulfstream private jets seized in a drug operation. I had visions of spacious accommodations, soft leather seats, hot looking flight attendents. The kind of thing you’d see in a James Bond movie. Let’s just say I was disappointed and thankful to going back to sitting in seat 23E of a commercial Airbus.
Also, as I understand it Pelosi reimbursed the govt for all of those liquor & hotel bills, so the taxpayer didn’t get stuck with any of those costs. Oh…and if she flew a military jet out of SF airport rather than Travis AFB, then this would snarl up air traffic into and out of a commercial airport. Ever been at an airport when Air Force One lands?
Wilder is probably a lot more correct than you are.
Look mate, here’s what we are up against:
1. Fusion power — which should be abundant and may be cheap is at least three decades away … probably more.
2. With roughly 5 billion people climbing out of third world poverty, the world is surely going to run out of production capacity for cheap petroleum long before we run out of people who want the stuff. Oil is no longer going to be cheap. And neither, as far as I can see, are other energy sources. With the possible exception of solar, none of them is going to yield that much energy cheaply. As things currently stand, solar is going to produce power in places no one wants to live (in Summer anyway) that will be very hard to store and transport in the volumes that will be needed. And that is if everything goes well
3 Think $10 a gallon for gas and diesel and a buck a kilowatt hour for electricity.
4. That’s not the end of the world. But it is largely the end of oversized, energy ineffiecient, housing a gazillion miles from jobs and shopping reached by massive, overpowered personal transportation.
5. The free market will solve all that? You bet it will. But you aren’t going to like its solution one little bit. In the worst case, i’s probably going to entail Joe Sixpack moving his family to a tiny, crowded, overpriced apartment downtown while still paying taxes on his unsalable, slowly deteriorating suburban house. Now there’s the American Dream for you.
The answer would have been to enact a slowly escalating carbon tax decades ago. But of course, we couldn’t do that. That apparently is too much like actually solving a problem for the average middle American blockhead to contemplate.
So Sammy, the fact is that you have acted stupidly and will soon be suffering the consequences. That’s no ones fault but your own.
The real sad thing is that you turned into a leftwing kook over the last 10 years. First you so desperately want like Krugman for the government to expand its reach that you falsely argue that we’re in a liquidity trap. And then after making this false claim you say therefore the only way out is for government spending programs to increase demand. So you need this false claim to rationalize a leftwing expansion of government that you wanted in the first place. Second, and I don’t want to go into this, is that you’ve adobted the global warming story, again as a back door way to get the increase in government control that you want.
Keynes with the great depression as a backdrop said he knew of no examples of a liquidity trap. Right now the natural rate of interest is not 0, rather the FED has driven short term rates to 0. The money machine created by the FED action allowing banks to borrow almost for free and then re-invest in longer term securities is more evidence that we’re not in a liquidity trap. Last quarter’s 5.8 percent growth is further evidence that we’re not in a liquidity trap.
I can see how moving hard to the left has turned into sort of a reality daytime anxiety dream for you and others in the Krugman camp. You can see it there, it feels like its within you’re grasp, but you just can’t reach it. I hear that the government is going to start forcing insurance companies to cover mental health services, maybe you can find a shrink with a comfy couch and work things out.
Try to get this through your head, the rate of intererst was not 0 until the FED drove short term rates down to 0, and this rate is not available to just about anyone except the banks themselves.
Maybe this will help you out. Think a a time with low interest rate but a time where we are not in a liquidty trap. Now the FED enters and and drives the rates down for banks to 0. Are you saying that now this is a liquidity trap?
And again, is Bernacke saying we’re in a liquidty trap? How about someone else on the Federal Reserve?
Go look up the definition of a liquidity trap. With a nominal interest rate of zero the NAIRU clearing rate is negative. That makes the real interest rate very hight. And if you don’t believe the NAIRU clearing rate is negative, then do the Taylor equation yourself. Menzie Chinn wrote on this a few days ago. We’re in a liqudity trap. Go look up some of the work that Mark Thoma’s colleague George Evans has written it:
As to the Keynes quote, I think you have misunderstood his point. Reread that paragraph. Keynes was being snarky. He was slamming current orthodoxy because “Treasury View” types didn’t have the courage to actually conduct the test to prove that we were in a liquidity trap. He never saw a liquidity trap because “Treasury View” proponents wanted to keep the interest rates high. He wasn’t arguing that England wasn’t in a liqudity trap, he was arguing that he never “saw” it because they kept rates high. Keynes was being sarcastic.
I don’t like paying high taxes anymore than you do. And the idea of big government…especially big Republican government is not something I look foward to seeing. But right now we’re facing some pretty serious problems and the private sector is not capable of getting us out of the recession. And as long as we need govt to soak up excess savings, we might as well kill two birds with one stone and start tackling some of those infrastructure problems that we’ve been neglecting for years. For example, the stimulus is providing funds to repair two major bridges that I use to get to work every day. The bridges were structurally unsound. It’s time to start thinking about a more rational power grid, a more rational mass transit, a more rational emission policy. Conservatives always want to stop the clock and reactionaries always want to go back in time to some imagined golden age. You need to get beyond that and accept that the world won’t hold still just because you feel comfortable just the way things are right now.
Bernanke is saying we’re in a liquidity trap. I gave you the link a few weeks ago. That’s why Bernanke is arguing for quantitative easing. Read his 1999 paper. Quantitative easing is what the central bank should do when the economy is in a liquidity trap. He was trying to find a way to make the central bank relevant in a liquidity trap.
No he’s not (you need a statement saying we’re in a liquidity trap). You can’t show something is true today by making a reference from 10 years ago. Lets face it, Bernacke is not saying we’re in a liquidity today, and this is why you can’t find a quote.
In the economy today monetary policy is what’s causing the interest rate to be zero, which is stimulating the economy. In a liquidity trap moneytary policy does not drive rates down and thus can’t stimulate the economy. The fact that rates were driven down and are being held down by monetary policy is further evidence that we’re not in a liquidity trap.
And Bernacke has not said we are in a liquidty trap. If he did you would have found it by now.
Inadvertently perhaps, Republicans reminded us why Obama, with majorities in both houses, can’t get anything done. Watching them sitting stone-faced in their seats, like the board of a country club sizing up an aspiring member, it all became perfectly clear.
—-Margaret Carlson in Bloomberg News on Obama’s SOTUS
Yeah, he’s black, he’s not one of us, what is he doing there?
So what are you trying to say, that the message would be better or more accurate if it were backwards. Progressive means to move forward, to think ahead, to make progress. Hiow is it that that has a negative connotation to you?
Cantab, You said: “In the economy today monetary policy is what’s causing the interest rate to be zero, which is stimulating the economy.”
The first line in the New Palgrave Dictionary of Economics under the definition of a liquidity trap is: “A liquidity trap is defined as a situation in which the short term nominal interest rate is zero.”
You told us that the short term nominal interest rate is zero, and the definition of a liquidity trap is when the short term nominal interest rates is zero.
OK Cantab. You don’t understand liquidity traps or economic stimulus any better than you understand any thing else about economics. And you aren’t interested in learning because actually knowing what you are talking about might constitute a disruption in the force or some such. That’s fine. I can live with doltishness. But how about as a favor to those of us that do understand the terms, you quit abusing them?
BTW, I should have said in my first post, that you are right that 5.8 percent is a good number. 2slugs is probably correct that it may not turn out to be all that great once revised and put into context with the data from the current quarter and next. But it’s hard to see how a much higher number could turn up at this time and it’s sure a hell of a lot better than another negative quarter would be. At the very least things seem to have stopped going to hell at Mach speed and that’s good.
(***Keynes with the great depression as a backdrop said he knew of no examples of a liquidity trap*** If I recall correctly Keynes said that in a letter to Roosevelt early in the depression and at that time, the whole concept of a liquidity trap was more theoretical than real. But today, we have a major economy — Japan — where deflation and zero interest rates have become institutionalized and no one can figure out how to change the situation. Do you seriously think that Keynes would still think that liquidity traps were only a theoretical possibility were he alive today?)
Applying the Lucas critique to welfare programs shows that welfare programs change behavior and actually draw people into welfare that might otherwise have worked. Maybe the ones drawn in would only have marginal jobs but their working moves them from the burden column to the asset column. And this is true regardless of their view on quality of life between working and not working.
“A liquidity trap is defined as a situation in which the short term nominal interest rate is zero.”
The short term interest rate is not zero, if it was then we would not need the FED to drive the rates paid by banks down to zero. They would be there without any help from the FED.
Do you have a quote from Benarke saying that we’re in a liquidity trap or that at some point in the past year we were in one? That’s all i’m asking for and if you come up with one you can settle this thing. Quotes from other FED members or top Acedemic experts on monetary policy would go a long way to prove the point.
Well, my definition of a liquidity trap is, purely and simply, a situation in which conventional monetary policy — open-market purchases of short-term government debt — has lost effectiveness. Period. End of story.——– From Krugman’s blog
This does not sound as if quantitative easing is the solution to a liquidity trap. I sounds as if when you are in a liquidity trap quantitative easing is of no use.
The term liquidity trap is used in Keynesian economics to refer to a situation where the demand for money becomes infinitely elastic, i.e. where the demand curve is horizontal, so that further injections of money into the economy will not serve to further lower interest rates. Under the narrow version of Keynesian theory in which this arises, it is specified that monetary policy affects the economy only through its effect on interest rates. Therefore, if the economy enters a liquidity trap area — and further increases in the money stock will fail to further lower interest rates — monetary policy will be unable to stimulate the economy.
From Wikipedia
The idea being that you cannot stimulate the economy more by “printing” more money since it will simply be hoarded. You have to have the government start spending to stimulate the economy. That is why Krugman and Stiglitz are for much more massive government spending at this time.
Therefore, if the economy enters a liquidity trap area — and further increases in the money stock will fail to further lower interest rates — monetary policy will be unable to stimulate the economy.
So since the FED actually did drive down the interest rate according to this definition we are not in a liquidity trap and therefore we don’t need a Keynesian federal stimulus.
The definition of the term is the very reason that it is applied to the ideology of the progressive movement. It is not a party. it is not even as well defined as the conservative movement, but its meaning is more precise. As noted, progressive ideology is one of forward thinking, of making profress in the improvement of our country, of klooking ahead rather than looking to the past, of thinking of ways to improve rather than methods to obstruct. The term progressive is applied to the ideology that fits its definition. You can make any suggestion that you care to. That doesn’t make your idea of what a progressive political and social ideology is all about. The word defines what the movement seeks to accomplish. You obviously have difficulty understanding alternative ideas.
***Even Brad DeLong said we could inflate out way out of depression but he said this was a bad idea for other reasons.*** Cantab
DeLong did say that or something like it. I remember that. But that was quite some time ago back when it was just becoming clear that some financial geniuses had been writing insurance policies (CDS’s) that they couldn’t honor, wasn’t it? It’s really not at all clear that is still true A non-technical definition of a liquidity trap might be a situation where the government CAN’T inflate the currency even when it wants to. That’s where Japan is. We may well be there also.
Not that I’m anxious to try inflation as a cure just yet.
The liquidity trap results from the discredited notion of “loanable funds”. The thinking is that improving liquidity makes loans more prevalent. The fact is loans are demand driven not supply driven. The banks dont need money to lend, they need credit worthy customers to lend to. The whole monetarist notion that these short term interest rates affect the flow of funds is flawed from the start. Lowering interest rates does not make more credit worthy customers. Whether a bank lends at 4.5 or 7.5 they want you to be able to pay it back and that is all that matters.
Some argue, I think quite persuasively, that the interest rates (set by the fed) should always be zero. http://bilbo.economicoutlook.net/blog/?p=1961
This would free fed governors from having to have these meetings to discuss rates and allow them to attend to more useful things. Government doesnt control money supply any way, we do with our loan demand.
Monetary policy as a whole has been a misguided failure. The attempt to control money supply through monetary policy has resulted in abandoning fiscal policy and using unemployment as an inflation control. The truth through the years has been that the normal range of interest rates do not affect much, only Volckers shock really affected things and many now think that was too harsh a tool to use.
The Fed sets the rates Cantab they are not market driven. All the fed operations are done to drain or add reserves to maintain that benchmark. They are there ONLY because of help from the Fed.
Slugs – “A story from World Net Daily??? And you took it seriously ?”
The story is based on information provided as a result of FOIA requests submitted by Judicial Watch. That point was explained early on in the article: “Documents obtained under the Freedom of Information Act by Judicial Watch, which investigates and prosecutes government corruption, show Pelosi incurred expenses of some $2.1 million for her use of Air Force jets for travel over that time.”
Are you attempting to discredit FOIA documents provided by the U.S. Government?
Have you ever reviewed the FOIA documents that detail the communications between the Speaker’s office/House and DoD regards flight requests and cancellations? It is an interesting read.
Slugs – “Pelosi flies around in a military jet for the same reason that the President flies in a military jet, as does the Veep. Pelosi is third in the succession line.”
U.S. Government flight support to and from the residence of a House speaker was only undertaken after 9/11 by presidential executive order. The news media issue in the case […]
Slugs – “A story from World Net Daily??? And you took it seriously ?”
The story is based on information provided as a result of FOIA requests submitted by Judicial Watch. That point was explained early on in the article: “Documents obtained under the Freedom of Information Act by Judicial Watch, which investigates and prosecutes government corruption, show Pelosi incurred expenses of some $2.1 million for her use of Air Force jets for travel over that time.”
Are you attempting to discredit FOIA documents provided by the U.S. Government?
Have you ever reviewed the FOIA documents that detail the communications between the Speaker’s office and DoD regards flight requests and cancellations? It is an interesting read.
Slugs – “Pelosi flies around in a military jet for the same reason that the President flies in a military jet, as does the Veep. Pelosi is third in the succession line.”
Routine U.S. Government flight support to and from the residence of a House speaker was only undertaken after 9/11 by presidential executive order. The news media issue in the case […]
US empire in the Far East showing cracks. Our main ally/base is beginning to tire of us being there. As China rises in importance Japan will begin to cozy up to it if it is smart and gradually tell Unkie Sam to “get lost”. This may be the beginning of the process: I am sure China would love to see us out of Japan and our naval bases there closed.
Margery, the self-procalimed defense and international treaty expert, doesn’t understand much of anything related to security issues in the Far East.
“Japan, Taiwan, South Korea, and China all share a strong interest in preserving the US role as guarantor of Japan’s security. The last thing China would want to see is a remilitarizing Japan that might develop a nuclear deterrent,” as explained in a Boston Globe editorial. The same can be said for Australia and New Zealand as well as other nations in the Far East and Asia.
Establishing nuclear deterrents is very likely if the United States pulls out of Japan, Okinawa, South Korea, and voids its agreement to provide defensive weapons to Taiwan.
Margery doesn’t take such issues into consideration as she continues her endless multiple front anti-U.S. rants. Margery demonstrates no working knowledge of the defense treaties, agreements, and acts in relation to any of the Far East nations and entities, and she simply lacks sufficient background and reasoning skills to understand the defense strategies in play.
Margery hasn’t taken her thinking far enough. She can continue to rant and mock the United States, but she is clueless on defense strategy throughout Asia and the Far East.
China does not want Japan to remilitarize and further arm itself with nuclear weapons. That is likely to occur if the United States removes Japan from its nuclear umbrella protection as established in an defense agreement 50 years ago.
Margery Meanwell, the self-procalimed defense and international treaty expert, doesn’t understand much of anything related to security issues in the Far East.
“Japan, Taiwan, South Korea, and China all share a strong interest in preserving the US role as guarantor of Japan’s security. The last thing China would want to see is a remilitarizing Japan that might develop a nuclear deterrent,” explained a Boston Globe editorial. The same can be said for Australia and New Zealand as well as other nations in the Far East and Asia.
Establishing nuclear deterrents is very likely if the United States pulls out of Japan, Okinawa, South Korea, and voids its agreement to provide defensive weapons to Taiwan.
Margery doesn’t take such issues into consideration as she continues her endless multiple front anti-U.S. rants. Margery demonstrates no working knowledge of the defense treaties, agreements, and acts in relation to any of the Far East nations and entities, and she simply lacks sufficient background and reasoning skills to understand the defense strategies in play. Margery hasn’t taken her thinking far enough. She can continue to rant and mock the United States, but she is clueless on defense strategy throughout Asia and the Far East. China does not want Japan to remilitarize and further arm itself with nuclear weapons. That is likely to occur if the United States removes Japan from its nuclear umbrella protection as established in an defense agreement 50 years ago.
Margery Meanwell, the self-procalimed defense and international treaty expert, doesn’t understand much of anything related to security issues in the Far East.
“Japan, Taiwan, South Korea, and China all share a strong interest in preserving the US role as guarantor of Japan’s security. The last thing China would want to see is a remilitarizing Japan that might develop a nuclear deterrent,” explained a Boston Globe editorial. The same can be said for Australia and New Zealand as well as other nations in the Far East and Asia.
Establishing nuclear deterrents is very likely if the United States pulls out of Japan, Okinawa, South Korea, and voids its agreement to provide defensive weapons to Taiwan.
Margery doesn’t take such issues into consideration as she continues her endless multiple front anti-U.S. rants. Margery demonstrates no working knowledge of the defense treaties, agreements, and acts in relation to any of the Far East nations and entities, and she simply lacks sufficient background and reasoning skills to understand the defense strategies in play.
Margery hasn’t taken her thinking far enough. She can continue to rant and mock the United States, pretending to have all the answers. The reality, though, is that Margery demonstrates no knowledge of defense strategy throughout Asia and the Far East.
China does not want Japan to remilitarize and further arm itself with nuclear weapons. That is likely to occur if the United States removes Japan from its nuclear umbrella protection as established in a defense agreement 50 years ago.
Margery Meanwell, the self-procalimed defense and international treaty expert, doesn’t understand much of anything related to security issues in the Far East.
“Japan, Taiwan, South Korea, and China all share a strong interest in preserving the US role as guarantor of Japan’s security. The last thing China would want to see is a remilitarizing Japan that might develop a nuclear deterrent,” explained a Boston Globe editorial. The same can be said for Australia and New Zealand as well as other nations in the Far East and Asia.
Establishing nuclear deterrents is very likely if the United States pulls out of Japan, Okinawa, South Korea, and voids its agreement to provide defensive weapons to Taiwan.
Margery doesn’t take such issues into consideration as she continues her endless multiple front anti-U.S. rants. Margery demonstrates no working knowledge of the defense treaties, agreements, and legislative acts in relation to any of the Far East nations and entities. She simply lacks sufficient background and reasoning skills to understand the defense strategies in play.
Margery hasn’t taken her thinking far enough. She can continue to rant and mock the United States, pretending to have all the answers. The reality, though, is that Margery demonstrates no knowledge of defense strategy throughout Asia and the Far East.
China does not want Japan to remilitarize and further arm itself with nuclear weapons. That is likely to occur if the United States removes Japan from its nuclear umbrella protection as established in a defense agreement 50 years ago.
Of course they won’t be punished. After all what could be more completely American these days than torture? The Nazis did it, other have done it, so it’s fine for us to do it too. After all, are we better than Nazis? What insufferable arrogance to think so.
So since the FED actually did drive down the interest rate according to this definition we are not in a liquidity trap
Ummmm….no. The Fed has not been able to lower interest rates for quite awhile despite their best efforts to do so. Nominal rates are stuck at zero. And this despite all of the quantitative easing. And go look at the St. Louis Fed’s FRED database. Check out the data on excess banking reserves. The went from virtually zero (where they had been for decades) to $1T almost overnight. Guess what? No effect on interest rates. No effect on lending. Banks are just sitting on the reserves. That my friend is what a liquidity trap looks like.
… and therefore we don’t need a Keynesian federal stimulus.
And this is the real reason you refuse to believe we’re in a liquidity trap despite all of the evidence to the contrary. This is why you’re going through these absurd intellectual gymnastics to avoid recognizing what’s as plain as the nose on your face. Once you admit that we’re in a liquidity trap, then all of your arguments against fiscal stimulus go down the flusher. The difference between you and our other resident conservatives (CoRev and sammy) is that you know the case against fiscal stimulus collapses if you dare admit that we’re in a liquidity trap. So you’re in perpetual denial mode.
Your WSJ article on booze spending did not say what you claimed. The article was about liquor bills of military personnel who accompanied congressional delegations. It was not about Pelosi running up big booze bills and passing them off to the taxpayer. In fact, it wasn’t much at all about Pelosi…it was mainly about military personnel on congressional junkets of other congress critters.
Your posts on others using military aircraft did not disprove my point that the govt was reimbursed. All of the documents showed that travel was on a reimburseable basis. None of the rates that I saw looked out of the ordinary. And the Joint Travel Reg says that travel by military aircraft is supposed to be the first option for official business. The idea is that most of these flights are operated by various Air National Guard pilots and shuttlig govt officials around on military aircraft is how they rack up their training flight hours. The cost that each agency reimburses the govt is only supposed to include marginal costs…i.e., the additional cost of flying one extra person. That’s the efficient economic cost to charge…and it’s also one reason why airlines have problems making an economic profit when there are competitive routes…because competitive routes tend toward marginal cost pricing which doesn’t cover fixed costs. And I don’t know if you’ve ever flown on military aircraft, but it’s not the fun filled experience that most people imagine. It sucks. The only advantage to flying MAC is that you can fly on demand and you don’t have layovers or missed connections. And you don’t go through all of the security hassles. But once you’re on the plane you usually find yourself wishing that you had flown coach on a commercial plane.
I agree that a Speaker flying into and out of commercial airports isn’t as big a deal as Air Force One, but it is still a mess. Runways get closed down just as they close down major highways in DC when the Speaker zooms by in one of those big convoys of govt SUVs. And military aircraft usually try to avoid major commercial airports. For instance, I used to fly MAC into and out of the Detroit area and MAC always flew into the smaller Detroit city airport rather than the Detroit Metro airport on the southwest end of town. So again, flying out of Travis makes more sense than flying out of SF airport.
slugs – “Your WSJ article on booze spending did not say what you claimed. The article was about liquor bills of military personnel who accompanied congressional delegations. It was not about Pelosi running up big booze bills and passing them off to the taxpayer. In fact, it wasn’t much at all about Pelosi…it was mainly about military personnel on congressional junkets of other congress critters.”
I only made these statements about the WSJ article: “I suppose you missed the Wall Street Journal piece which reviewed travel records and reported the following. If you have anything to refute the government travel records documents, share it. If you have any references to support your claim, share such as well.”
You provided no evidence to support your claim. Moreover, you don’t appear to understand what happens on these CODEL trips.
What part of the following statements do you not grasp?
“Military officials bought thousands of dollars worth of alcohol, food and other amenities for the U.S. lawmakers they accompanied on trips overseas, travel records viewed by The Wall Street Journal show.”
“The documents don’t show these outlays have secured any favors or favoritism from lawmakers. And the funds spent by military personnel—which ran about $4,300 per trip for the 43 trips examined by the Journal—usually account for only a small portion of the total lawmakers spend on overseas travel.”
“Overseas trips are initiated by lawmakers and must be approved by committee chairmen or other congressional leaders. The lawmaker leading the delegation selects a division of the armed forces to help coordinate the trip.”
“When lawmakers return, congressional rules require they file a form disclosing their costs in such broad categories as transportation, meals and accommodations. But they aren’t required to disclose all foreign-trip expenses. The documents obtained by the Journal show that lawmakers don’t disclose much of the costs of alcohol, food and other supplies purchased for them by military liaisons.”
“Drew Hammill, a spokesman for House Speaker Nancy Pelosi, said lawmakers aren’t required to include those costs because “the whole idea of member disclosure is to disclose what members themselves spend, not what is being spent for support services they don’t control.” “Reported spending on overseas travel was $13 million in 2008, a tenfold increase from 1995, according to an analysis by the Journal.”
“The travel data come from military-expense records the Journal obtained through a Freedom of Information Act Request. They include information on more than 100 congressional trips planned and implemented by the Air Force and Army from December 2007 to mid-2009. In 43 of the trip reports, documents include a breakdown of expenses paid by military liaisons.”
“Examples of the military’s spending include $20,000 for baggage-handling tips, alcohol, snacks, refreshments and other “trip supplies” during a 13-day trip in January 2008 led by House Majority Leader Steny Hoyer, a Maryland Democrat, to Australia, New Zealand and Vietnam. That expense was in addition to the nearly $70,000 the lawmakers made public on travel-disclosure forms they filed with Congress.”
“Before Ms. Pelosi, a California Democrat, and nine other lawmakers left for England, India and Spain in March 2008, officials from the Air Force stocked the government plane with $438.75 worth of alcohol, including three cases of beer, 15 bottles of wine, three bottles of vodka, Crown Royal, Dewar’s and other liquor, records show. Air Force officials spent another $750 on chips, cakes and other snacks.”
“Military liaisons “are left the discretion of making these decisions and we made no requests […]
The Nigerian kid tried to kill everyone else on the plane for some BS reason. I don’t see why we should not dunk him in water, keep him up all night with loud music, and do some further harrasment to get everything he knows. He’ll probably survive. I certainly would not want to be treated this way but they I’m not going to put explosives in my underware to kill innocent people. So if you can’t deal with the interogation then don’t be a Jihadist.
The Nigerian kid tried to kill everyone else on the plane for some BS reason. I don’t see why we should not dunk him in water, keep him up all night with loud music, and do some further harrasment to get everything he knows. He’ll probably survive. I certainly would not want to be treated this way but then I’m not going to put explosives in my underware to kill innocent people. If you can’t do the interogation then don’t do the crime.
It says military officials bought those things; it does not say Pelosi bought those things and charged them to the govt. If there’s a problem, it’s with the Air Force trying to influence congress critters with booze and such.
It would be interesting to know which way the reimbursements went. Normally if someone is traveling on government business, the government reimburses the traveler according to some set rate. For example, if I fly on commercial aircraft I pay for the flight using my credit card and I am personally responsible for paying the credit card company. I then submit a voucher to the government for reimbursement…and then hope that the govt processes the claim quickly, because it’s my responsibility to pay the credit card bill regardless of whether or not I get reimbursed. Now I can fly first class and run up huge bills…that’s my call; but the govt will only reimburse me up to whatever coach fair was negotiated under the GSA contract with the airlines. And that same rule applies to non-govt employees traveling on govt business…e.g., contractors traveling to a govt sponsored conference to present a briefing. And sometimes reimbursement works the other way around where the traveler is not on govt business, but is accompanying someone who is. For example, a general officer might want to fly to Camp Swampy using his command plane or some other military aircraft, but he wants to bring his wife along too because her mother lives near Camp Swampy. That’s perfectly okay as long as she does not bump someone else off the flight who needed to be on that flight; however, the general would have to reimburse the govt for the marginal cost of adding her to the flight. This happens a lot. The notes on those Judicial Watch documents were confusing because they indicated this was travel on official business, in which case it’s not at all clear why Pelosi’s party should have been had to have paid anything. You can argue whether or not their travel constituted official business, but that’s a completely different issue. The Judicial Watch documents don’t help us understand that issue any better one way or the other.
Look, this whole business about Pelosi’s aircraft was something that first came up right after the Democrats took control after the 2006 election. It was never an issue while Hastert was Speaker despite the fact that Hastert was also provided with military aircraft. The decision to increase security around the Speaker was indeed a post-9/11 decision. Do you disagree with that decision? The Speaker is right behind the Veep in succession, so I’m okay with increasing her security detachment. Afterall, the John Wilkes Booth conspiracy came very close to decapitating the top three in succession, so I suppose if a frustrated actor can come that close we should at least concede the possibility that A-Q might have a decent shot at it. The Bush Administration left it up to the Air Force and security experts to decide the right type of aircraft. The Air Force recommended a larger plane than Hastert had for the simple reason that the flight was longer. If Judicial Watch has a problem with Pelosi’s aircraft and the folks she brings on the plane, then Judicial Watch really needs to bring it up with the Air Force.
Looks like Goldman-Sachs nailed the GDP forecast. A couple of weeks ago the economists at Goldman-Sachs predicted 4Q GDP growth of 5.8%. And they said that most of it would be due to inventory gains. Maybe those analysts at Goldman-Sachs are worth those high salaries afterall. Just kidding.
I am forming a corporation:
Anonymous Shareholders with a Political Ax to Grind. Anyone want to invest?
slugs,
I’ll take the economic growth, we need it.
Now for the zinger: 5.8 percent growth and you still say we’re in a liquidity trap. Bahh humbug.
Another stupid move by the Obama administration. It has some brains unlike the prior administation. It ought to know better:
http://news.yahoo.com/s/ap/20100129/ap_on_bi_ge/us_us_taiwan_arms_sales
warprofiteers=warmongers
http://news.yahoo.com/s/ap/20100129/ap_on_bi_ge/davos_forum
We’ll see. They blocked him on healthcare, why won’t they do so on banking reforms? The python doesn’t losen its grip.
From the same article: “China aims more than 1,000 ballistic missiles at Taiwan; the U.S. government is bound by law to ensure the island is able to respond to Chinese threats.”
Margery, the self-procalimed defense and international treaty expert, fails to point this out.
Bruce Wilder, owner of the Coming Perfect Storm blog, made the following statement in comments at another blog today:
Bruce Wilder said…
The U.S., in the 1920s, was excited by the possibilities of the new economy of telephones, electricity, automobiles, movies, radio and television. But, the old economy of agriculture and steam was played out, and fully half the population was stuck on the farm and sinking rapidly into deeper and deeper poverty and despair. The financial crisis, brought on by a hysteria expressed in runaway speculation in fraudulent schemes, marked the beginning of 20 years of crisis, as the world came apart and a new architecture was developed, to rebuild it.
The U.S. today has played out the economic and political architecture of the New Deal and WWII. Those structures, concepts, opportunities, imperatives, habits — they are all dead and broken and played out, exhausted.
It isn’t just our political system, but the whole basis of our economic and national life.
The country is like an old man, the powers and ideals of youth faded away, consumed, at the end, by the final triumph of bad habits and weaknesses of character. The smoking that was a daring rebellion at 20 is cancer at 60; the generosity and confidence of the prosperous 30-something is poverty and anxiety at 70.
Building out new suburbs, buying a second car and a television, going to the new shopping mall, bearing any burden in a fight against godless communism — these hopeful, idealistic and highly productive ideas have become caricatures and monstrosities: McMansions, SUVs, the Global War on Terrorism, 500 channels and nothing to watch. Kennedy’s taxcut and Johnson’s Great Society, that triggered the prosperity of the 1960s, reducing poverty, and encouraging the country to cast off the conventionalism imposed with WWII discipline, have become Bush’s taxcuts for the rich, and a dumb acceptance of the inexorable rise of poverty.
The indecision and irresponsibility of our politics is just a symptom of a political economy at the end of its natural life — an analogue to the senility and incapacity of a diseased old age.
Even if the political system, in its near-terminal corruption and paralysis, continues to refuse to answer, reality presses on, and necessity increases its demands.
The sense that the country is progressing toward becoming a banana republic of authoritarian politics, with a vicious corporate elite oppressing and exploiting a passive population is palpable. And, the evidence of the institutional decay to bring about this result is plentiful, as one after another institution of the New Deal has been destroyed or corrupted, and every ideal of liberal internationalism has been made into a bad joke, in a farcical parody called, “American Empire”. (America Triumphant is spending record defense budgets to tramp around the absolute poorest places on earth, blowing holes in the sand and knocking one rock off another, while using the Constitution as toilet paper in a camp for some pathetic group of alleged scary terrorists, many of whom aren’t scary or terrorists!)
“Change we can believe in” — We still desperately want the change, but no one believes we are going to get it.
Everything — every fundamental thing about how this country and the world is organized, economically and politically, has to change to adapt to the new reality of peak oil and global warming and globalized communication.
The most frustrating thing to me, about the way Krugman abstracts, say, the case for fiscal stimulus spending on a vast scale, is that he never connects it to reality. It is true that the Keynesian “technical insight” is that it doesn’t really matter what you spend the money on. But, it […]
Bruce Wilder, owner of the Coming Perfect Storm blog, made the following statement in comments at another blog today. This statement is worthy of a main post if not a full fledged effort at Angry Bear to rethink economic and social thought related to the U.S. political economy.
Bruce Wilder said…
“The U.S., in the 1920s, was excited by the possibilities of the new economy of telephones, electricity, automobiles, movies, radio and television. But, the old economy of agriculture and steam was played out, and fully half the population was stuck on the farm and sinking rapidly into deeper and deeper poverty and despair. The financial crisis, brought on by a hysteria expressed in runaway speculation in fraudulent schemes, marked the beginning of 20 years of crisis, as the world came apart and a new architecture was developed, to rebuild it.
The U.S. today has played out the economic and political architecture of the New Deal and WWII. Those structures, concepts, opportunities, imperatives, habits — they are all dead and broken and played out, exhausted.
It isn’t just our political system, but the whole basis of our economic and national life.
The country is like an old man, the powers and ideals of youth faded away, consumed, at the end, by the final triumph of bad habits and weaknesses of character. The smoking that was a daring rebellion at 20 is cancer at 60; the generosity and confidence of the prosperous 30-something is poverty and anxiety at 70.
Building out new suburbs, buying a second car and a television, going to the new shopping mall, bearing any burden in a fight against godless communism — these hopeful, idealistic and highly productive ideas have become caricatures and monstrosities: McMansions, SUVs, the Global War on Terrorism, 500 channels and nothing to watch. Kennedy’s taxcut and Johnson’s Great Society, that triggered the prosperity of the 1960s, reducing poverty, and encouraging the country to cast off the conventionalism imposed with WWII discipline, have become Bush’s taxcuts for the rich, and a dumb acceptance of the inexorable rise of poverty.
The indecision and irresponsibility of our politics is just a symptom of a political economy at the end of its natural life — an analogue to the senility and incapacity of a diseased old age.
Even if the political system, in its near-terminal corruption and paralysis, continues to refuse to answer, reality presses on, and necessity increases its demands.
The sense that the country is progressing toward becoming a banana republic of authoritarian politics, with a vicious corporate elite oppressing and exploiting a passive population is palpable. And, the evidence of the institutional decay to bring about this result is plentiful, as one after another institution of the New Deal has been destroyed or corrupted, and every ideal of liberal internationalism has been made into a bad joke, in a farcical parody called, “American Empire”. (America Triumphant is spending record defense budgets to tramp around the absolute poorest places on earth, blowing holes in the sand and knocking one rock off another, while using the Constitution as toilet paper in a camp for some pathetic group of alleged scary terrorists, many of whom aren’t scary or terrorists!)
“Change we can believe in” — We still desperately want the change, but no one believes we are going to get it.
Everything — every fundamental thing about how this country and the world is organized, economically and politically, has to change to adapt to the new reality of peak oil and global warming and globalized communication.
The most frustrating thing to me, about the way Krugman abstracts, say, the case for fiscal stimulus spending on […]
Bruce Wilder, owner of the Coming Perfect Storm blog, made the following statement in comments at another blog today. This statement is worthy of a main post if not a full fledged effort at Angry Bear to rethink economic and social thought related to the U.S. political economy.
Bruce Wilder said…
“The U.S., in the 1920s, was excited by the possibilities of the new economy of telephones, electricity, automobiles, movies, radio and television. But, the old economy of agriculture and steam was played out, and fully half the population was stuck on the farm and sinking rapidly into deeper and deeper poverty and despair. The financial crisis, brought on by a hysteria expressed in runaway speculation in fraudulent schemes, marked the beginning of 20 years of crisis, as the world came apart and a new architecture was developed, to rebuild it.
The U.S. today has played out the economic and political architecture of the New Deal and WWII. Those structures, concepts, opportunities, imperatives, habits — they are all dead and broken and played out, exhausted.
It isn’t just our political system, but the whole basis of our economic and national life.
The country is like an old man, the powers and ideals of youth faded away, consumed, at the end, by the final triumph of bad habits and weaknesses of character. The smoking that was a daring rebellion at 20 is cancer at 60; the generosity and confidence of the prosperous 30-something is poverty and anxiety at 70.
Building out new suburbs, buying a second car and a television, going to the new shopping mall, bearing any burden in a fight against godless communism — these hopeful, idealistic and highly productive ideas have become caricatures and monstrosities: McMansions, SUVs, the Global War on Terrorism, 500 channels and nothing to watch. Kennedy’s taxcut and Johnson’s Great Society, that triggered the prosperity of the 1960s, reducing poverty, and encouraging the country to cast off the conventionalism imposed with WWII discipline, have become Bush’s taxcuts for the rich, and a dumb acceptance of the inexorable rise of poverty.
The indecision and irresponsibility of our politics is just a symptom of a political economy at the end of its natural life — an analogue to the senility and incapacity of a diseased old age.
Even if the political system, in its near-terminal corruption and paralysis, continues to refuse to answer, reality presses on, and necessity increases its demands.
The sense that the country is progressing toward becoming a banana republic of authoritarian politics, with a vicious corporate elite oppressing and exploiting a passive population is palpable. And, the evidence of the institutional decay to bring about this result is plentiful, as one after another institution of the New Deal has been destroyed or corrupted, and every ideal of liberal internationalism has been made into a bad joke, in a farcical parody called, “American Empire”. (America Triumphant is spending record defense budgets to tramp around the absolute poorest places on earth, blowing holes in the sand and knocking one rock off another, while using the Constitution as toilet paper in a camp for some pathetic group of alleged scary terrorists, many of whom aren’t scary or terrorists!)
“Change we can believe in” — We still desperately want the change, but no one believes we are going to get it.
Everything — every fundamental thing about how this country and the world is organized, economically and politically, has to change to adapt to the new reality of peak oil and global warming and globalized communication.
The most frustrating thing to me, about the way Krugman abstracts, say, the case for fiscal stimulus spending on […]
Blog owners and participants should note this statement by the President.
“I was not elected by Democrats or Republicans but by the American people. That’s especially true because the fastest growing group of Americans are independents.” – President Obama, 29 January 2010
Bloggers who cling to the old, standard arguments pitched by both major political parties and base their “expert” thinking on such fail to recognize that their canned, boring messages fall far short of being effective with a growing block of voters – the Independents.
As an independent voter, I can share that much of the blog commentary is like listening to two or forty salesmen trying to sell two different brands of failed products. The result is no sale, and that is evidenced by the growth in the number of independent voters as acknowledged by President Obama on 29 January 2010.
The general failure of blogs and bloggers to recognize and understand the growing number of independent voters is, indeed, a significant failure of message not only in ideology but in almost every other regard. Such bloggers don’t understand one third of their potential customers or allies. Many bloggers continue to act as though one third of the American voters do not exist for discussion purposes. The situation couldn’t be more absurd.
Independent voters matter.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aOHMjZb9y0Qk&pos=10
So we don’t want to antagonize China right now, they say? So what do we do? We sell 9 billions of military equipment to Taiwan. Talk about a dysfuctional government where the right hand doesn’t know what the left is doing.
Movie Guy,
Bruce Wilder seems full of crap.
Oh I am perfectly aware of this, have no fear. Of course we could change our laws or are they written in stone? Our arms sales to Taiwan are what prompt China to aim its missles at it. They don’t like to have to do that. Taiwan is a relic of US imperialism which you evidently don’t know much about. It resulted from Mao defeating and driving our darling puppet Chiang Kai Shek out of China when he took refuge in Taiwan protected by the US fleet. Talk about interference in the affairs of another nation. Mao upset the US because he liberated it from our puppet (run to a large extent by his wife who was more American than Chinese and who died, as I recall, in a penthouse at the Waldorf Astoria).
“
Taxpayers pay $101,000 for Pelosi’s in-flight ‘food, booze’
Speaker’s trips ‘are more about partying than anything else’
Yes, your tax dollars at work. The Libs sure are for the little guy. http://www.wnd.com/index.php?fa=PAGE.view&pageId=123472
“Taxpayers pay $101,000 for Pelosi’s in-flight ‘food, booze’
Speaker’s trips ‘are more about partying than anything else”
Yes, your tax dollars at work. The Libs sure are for the little guy. http://www.wnd.com/index.php?fa=PAGE.view&pageId=123472
The New York Times:
As a fluent English speaker, as a Christian, as a model of what many Americans hoped China to become, Madame Chiang struck a chord with American audiences as she traveled across the country, starting in 1930s, raising money and lobbying for support of her husband’s government. She seemed to many Americans to be the very symbol of the modern, educated, pro-American China they yearned to see emerge — even as many Chinese dismissed her as a corrupt, power-hungry symbol of the past they wanted to escape.[6]She is buried in a New York State cemetery. And remains there to this day. Read the rest of the Wikipedia article; it might wise you up.
Mao did for China what Ho Chi Minh did for Vietnam—get the imperialists out. He did it sooner and so decisively that we didn’t even have a chance to try to stop him, although MacArthur in his insane moments evidently thought a nuke might be used to keep China under our control. And when MacArthur was so stupid as to ignore instructions and drive his army up to the border of China, theatenting it, the Chinese swarmed over the Yalu and beat our asses to a pulp, thus ensuring that S. Korea didn’t take over the whole peninsula. Wise up.
I may be in error that she died at the Waldorf Astoria. She often stayed there in a penthouse suite. She had a large estate in upper New York State. When she sold that she is said to have moved into an apartment of a relative in the Gracie Square area of the Upper East Side.
MG, ditto, what Sammy said. He doesn’t understand the reason for the tea parties, global warming, nor globalization. He comes across as a hard core progressive (not Dem nor lib, but the Glenn Beck historical description.)
***Now for the zinger: 5.8 percent growth and you still say we’re in a liquidity trap. Bahh humbug.***
Sigh. …Cantab, will you PLEASE goddamn it, either learn some basics or shut up? In particular, go look up what a liquidity trap and an inventory bounce are. Note that those who are worried about a liquidity trap and/or a U/L shaped recession anticipated thiis good number and another fair, but positive number next quarter. It’s Q2 2010 and beyond that they are worried about. Here are a few references to help you:
liquidity trap: http://en.wikipedia.org/wiki/Liquidity_trap
inventory bounce: http://en.wikipedia.org/wiki/Liquidity_trap , http://krugman.blogs.nytimes.com/2009/04/08/the-bounce-and-the-revision-thing/
skepticism about recovery (posted weeks ago, not after the growth number was posted): http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aluoqvsvAwO8 , http://krugman.blogs.nytimes.com/2010/01/16/blip/ , http://www.calculatedriskblog.com/2010/01/q4-gdp-beware-blip.html
So, basically, a liquidity trap in modern usage has nothing to do with growth per se. It just means that interest rates are stuck close to zero and that the central bank or whatever can not stimulate the economy by lowering rates. Periods of positive growth are still possible and in the Japanese example, they occur. See http://en.wikipedia.org/wiki/File:Real_GDP_growth_rate_in_Japan_(1956-2008).png And note that the Japanese chart stops in 2006 just before the Great Recession started so it’d presumably look even more dismal if it were extended to the present.
An inventory bounce occurs when there is a change in the rate of growth of inventory. I’m pretty sure that it is analogous to transients that occur in physical systems (e.g. amplifiers) when levels are abruptly changed. Read the first Krugman article http://krugman.blogs.nytimes.com/2009/04/08/the-bounce-and-the-revision-thing/ . You don’t have to agree with Krugman’s conclusions to follow his very clear explanation of what an inventory bounce is. So far as I know, his description of an inventory bounce isn’t controversial.
***China aims more than 1,000 ballistic missiles at Taiwan*** mg
Actually, I believe those missiles are not aimed a Taiwan per se. They are aimed at the US 7th fleet operating in Taiwanese waters. http://thetaiwanlink.blogspot.com/2009/06/chinas-anti-ship-ballistic-missile_17.html Or is that another bunch of missiles?
I imagine that the eventual US/Taiwanese response will be to beef up Taiwan’s anti-ballistic missile capability because that looks good in the media. (It still probably won’t work worth a damn). And also, to beef up Taiwan’s land based anti-ship missile capability to a level that would make a Chinese invasion impossilble/impractical. Since the Chinese would hardly want to encourage the latter if they had, or might ever, want to invade Taiwan, I would conclude that China has no intention whatsoever of invading Taiwan.
So, I personally hope/think that this is all theater. Looks to me like China intends eventually to to achieve unification under some scheme that preserves Taiwan’s economic and political autonomy — “Two flags, one country” or some such thing. Reality is that over the past four decades or so, the two governments have gone from exchanging artillery rounds every morning to having scheduled air flights between Taipei and Beijing. (How long before we get scheduled flights between Miami and Habana?)
MG,
Thanks. Bruce is a very articulate & vivid writer as well as a frequent poster over at MT’s site. I did not know that he had his own site.
Sammy & CoRev: All great powers and great empires fade away…usually not with a bang, but with a whisper. In many ways the US today is not unlike Britain in the early 20th century; a great power past its peak but not yet aware of it. Sort of like a the 36 year old professional athletes who still thinks of himself as that 26 year old on the other side of his career. To get all Bruce Wilder-like on you, let me remind you of Hegel’s quote that the owl of Minerva spreads its wings only at dusk. http://en.wikipedia.org/wiki/Glaucus_(owl)
I do think we’re at a turning point, and so far our voters and politicians are not exactly covering themselves with glory. There is a very deep economic crisis right now. It is global. It is not just your garden variety recession. There has been a lot of new research on recessions caused by financial collapse versus other kinds of recessions. These kinds of recessions typically last the better part of a decade. In Japan’s case they are going into their third decade. And that’s not our only problem. The day when the US was the clear leader in hourly worker productivity are long gone. Hey…even the French enjoy higher hourly productivity than American workers. The long run deficit is unsustainable and will require some combination of crippling taxes, severe budget cuts, or drowning inflation. And the Republican answer seems to be that somehow these burdens will be easier with an economy in permanent recession. Sheesh. We have to balance a long run imperative to shrink the deficit against a short run imperative to expand the deficit. That’s an easy problem to solve on the blackboard, but a near hopeless task when politicians and the electorate don’t have a clue. Bruce is right about suburban sprawl, energy consumption, greenhouse emissions, transportation…my only beef with him is that he forgot to include impending water shortages in vast parts of the sunbelt. And our electorate is getting dumber. It’s a sad demographic fact that young people today are likely to be less well educated (in terms of years of formal education) than their parents. Even the top 50 American universities, which only a few years ago were far and away the best in the world, are slipping fast in world rankings. There was a recent NBER paper on this development. And with all this we’ve got a political landscape that is becoming totally regionalized. Democrats are cowards and Republicans are hell bent on trying to turn back the clock. But voters deserve blame as well. I think the central problem with today’s voter is that he or she no longer thinks beyond his or her lifespan. In econ-speak we have the problem of a finitely lived representative agent posing as an intergenerational representative agent. As a result we evaluate social projects using a private discount rate rather than a social discount rate.
***We’ll see. They blocked him on healthcare, why won’t they do so on banking reforms?***
Being a bunch of lowlife, obstructionist, corrupt, lying, scumbags, I imagine that they might. But it isn’t going to be easy for them to support bankers in an election year when most of the electorate favor killing all the bankers and letting God sort them out.
See http://online.wsj.com/article/SB10001424052748704343104575033373335750804.html?mod=WSJ_latestheadlines for suggestions that in a popularity competition between Al Qaedda, Hugo Chavez, Mahmoud Ahmadinejad, and bankers, the bankers would come in last.
Cantab,
The 5.8% number was the Goldman-Sachs estimate from a couple of weeks ago. The BEA number was 5.7%. Not only that, but the G-S guys actually got the individual share projections right. So when the news media was reporting this as a “surprise”, what they meant was that it was a surprise to clueless reporters. And as the G-S advance forecast also made pretty clear, there are plenty of reasons to see this as a very bad number. To begin with, it’s an initial estimate and there are a lot of reasons to believe it will be revised downward quite a bit, as was the 2003 estimate. But delve into the details. The GDP growth in final demand was only 2.2%, which is way to weak of a number given where we are in the business cycle. That number needs to be closer to 5%. Way most of the growth was due to inventory gains and those were a direct result of the cash-for-clunkers program. A lot of confused posters here at Angry Bear kept arguing that the 3QTR GDP numbers were inflated because of cash-for-clunkers, but as I argued a few months ago, that’s not how NIPA accounting works. Cash-for-clunkers resulted in a lower GDP growth rate in 3QTR because it reduced inventory levels. The boost to GDP comes in the following quarter when (and if) businesses replenish inventories. GDP is not about gross sales, it’s about gross production. The problem is that businesses replenished inventories, but there is no reason to believe that those inventories will be consumed in 1QTR 2010. Also, the 4QTR numbers show that that govt spending did not contribute to the GDP growth rate…and please understand the algebra and the terms here. What this means is that govt fiscal stimulus has already peaked in terms of the GDP growth rate, but that does not mean govt spending isn’t contributing to GDP growth. If you’re confused, see this: http://krugman.blogs.nytimes.com/2009/12/27/stimulus-timing/
And the last time I checked the nominal interest rate was zero, the NAIRU clearing interest rate was around negative 5%, and the money multiplier was less than 1.00. So yes, we are still in a liqudity trap. A liqudity trap does not mean there can’t be economic growth; it means conventional monetary tools will no longer work to further stimulate the economy. Going back to the old IS-LM model, it means the LM curve is flat, so your only hope for growth is a vertical IS curve.
I think you are right on all counts. The missles as I recall worried US fleet commanders in the area because they effectively negated the power of the US navy to “defned” Taiwan from invasion. It would be useful all around if the US simply stopped arming its colonial relic in the Far East, born of our idea that China was ours (you might recall the rage about who “lost China” as if it had belonged to us). I see Israel and Taiwan as our two colonial irritants that serve us badly: one infuriating the Muslim world and the other China. And to little or no purpose.
The reason for the Tea Parties is a bunch of angry, frustrated people who haven’t a clue about why things aren’t going well for them and whose brains are not up to understanding the matter realistically. So they fall for plutocratic propaganda that is happy to keep them mis-understanding things because it works to their advantage. Glenn Beck describes his own deranged mind most of the time. He has little connection to the real world outside him.
A story from World Net Daily??? And you took it seriously ?
Cancelling flights is not unusual. Pelosi flies around in a military jet for the same reason that the President flies in a military jet, as does the Veep. Pelosi is third in the succession line. I’ve flown in those jets and frankly I’d much rather fly first class on a commercial plane. Even coach for that matter. I remember one military aircraft flight that I had to take. We were told that it was one of those Gulfstream private jets seized in a drug operation. I had visions of spacious accommodations, soft leather seats, hot looking flight attendents. The kind of thing you’d see in a James Bond movie. Let’s just say I was disappointed and thankful to going back to sitting in seat 23E of a commercial Airbus.
Also, as I understand it Pelosi reimbursed the govt for all of those liquor & hotel bills, so the taxpayer didn’t get stuck with any of those costs. Oh…and if she flew a military jet out of SF airport rather than Travis AFB, then this would snarl up air traffic into and out of a commercial airport. Ever been at an airport when Air Force One lands?
VtCodger,
The sad thing is that 10 years ago Cantab actually used to know this stuff. Maybe he needs to go back to the red wine.
***Bruce Wilder seems full of crap.***
Wilder is probably a lot more correct than you are.
Look mate, here’s what we are up against:
1. Fusion power — which should be abundant and may be cheap is at least three decades away … probably more.
2. With roughly 5 billion people climbing out of third world poverty, the world is surely going to run out of production capacity for cheap petroleum long before we run out of people who want the stuff. Oil is no longer going to be cheap. And neither, as far as I can see, are other energy sources. With the possible exception of solar, none of them is going to yield that much energy cheaply. As things currently stand, solar is going to produce power in places no one wants to live (in Summer anyway) that will be very hard to store and transport in the volumes that will be needed. And that is if everything goes well
3 Think $10 a gallon for gas and diesel and a buck a kilowatt hour for electricity.
4. That’s not the end of the world. But it is largely the end of oversized, energy ineffiecient, housing a gazillion miles from jobs and shopping reached by massive, overpowered personal transportation.
5. The free market will solve all that? You bet it will. But you aren’t going to like its solution one little bit. In the worst case, i’s probably going to entail Joe Sixpack moving his family to a tiny, crowded, overpriced apartment downtown while still paying taxes on his unsalable, slowly deteriorating suburban house. Now there’s the American Dream for you.
The answer would have been to enact a slowly escalating carbon tax decades ago. But of course, we couldn’t do that. That apparently is too much like actually solving a problem for the average middle American blockhead to contemplate.
So Sammy, the fact is that you have acted stupidly and will soon be suffering the consequences. That’s no ones fault but your own.
Slugs,
The real sad thing is that you turned into a leftwing kook over the last 10 years. First you so desperately want like Krugman for the government to expand its reach that you falsely argue that we’re in a liquidity trap. And then after making this false claim you say therefore the only way out is for government spending programs to increase demand. So you need this false claim to rationalize a leftwing expansion of government that you wanted in the first place. Second, and I don’t want to go into this, is that you’ve adobted the global warming story, again as a back door way to get the increase in government control that you want.
Keynes with the great depression as a backdrop said he knew of no examples of a liquidity trap. Right now the natural rate of interest is not 0, rather the FED has driven short term rates to 0. The money machine created by the FED action allowing banks to borrow almost for free and then re-invest in longer term securities is more evidence that we’re not in a liquidity trap. Last quarter’s 5.8 percent growth is further evidence that we’re not in a liquidity trap.
I can see how moving hard to the left has turned into sort of a reality daytime anxiety dream for you and others in the Krugman camp. You can see it there, it feels like its within you’re grasp, but you just can’t reach it. I hear that the government is going to start forcing insurance companies to cover mental health services, maybe you can find a shrink with a comfy couch and work things out.
VtCodger,
Try to get this through your head, the rate of intererst was not 0 until the FED drove short term rates down to 0, and this rate is not available to just about anyone except the banks themselves.
Maybe this will help you out. Think a a time with low interest rate but a time where we are not in a liquidty trap. Now the FED enters and and drives the rates down for banks to 0. Are you saying that now this is a liquidity trap?
And again, is Bernacke saying we’re in a liquidty trap? How about someone else on the Federal Reserve?
VtCodger
Cantab,
Go look up the definition of a liquidity trap. With a nominal interest rate of zero the NAIRU clearing rate is negative. That makes the real interest rate very hight. And if you don’t believe the NAIRU clearing rate is negative, then do the Taylor equation yourself. Menzie Chinn wrote on this a few days ago. We’re in a liqudity trap. Go look up some of the work that Mark Thoma’s colleague George Evans has written it:
http://www.uoregon.edu/~gevans/
As to the Keynes quote, I think you have misunderstood his point. Reread that paragraph. Keynes was being snarky. He was slamming current orthodoxy because “Treasury View” types didn’t have the courage to actually conduct the test to prove that we were in a liquidity trap. He never saw a liquidity trap because “Treasury View” proponents wanted to keep the interest rates high. He wasn’t arguing that England wasn’t in a liqudity trap, he was arguing that he never “saw” it because they kept rates high. Keynes was being sarcastic.
I don’t like paying high taxes anymore than you do. And the idea of big government…especially big Republican government is not something I look foward to seeing. But right now we’re facing some pretty serious problems and the private sector is not capable of getting us out of the recession. And as long as we need govt to soak up excess savings, we might as well kill two birds with one stone and start tackling some of those infrastructure problems that we’ve been neglecting for years. For example, the stimulus is providing funds to repair two major bridges that I use to get to work every day. The bridges were structurally unsound. It’s time to start thinking about a more rational power grid, a more rational mass transit, a more rational emission policy. Conservatives always want to stop the clock and reactionaries always want to go back in time to some imagined golden age. You need to get beyond that and accept that the world won’t hold still just because you feel comfortable just the way things are right now.
Cantab,
Bernanke is saying we’re in a liquidity trap. I gave you the link a few weeks ago. That’s why Bernanke is arguing for quantitative easing. Read his 1999 paper. Quantitative easing is what the central bank should do when the economy is in a liquidity trap. He was trying to find a way to make the central bank relevant in a liquidity trap.
MG, Codger’s and 2slug’s comments/affirmations are confirmations thatf Wilder’s message is progressive.
http://news.yahoo.com/s/ap/20100130/ap_on_re_as/as_china_us_taiwan_arms_sales
It would be nice if China could sell the Taliban sophisticated weaponry too to use against NATO. That might give Washington a few nightmares.
Slugs,
Bernanke is saying we’re in a liquidity trap.
No he’s not (you need a statement saying we’re in a liquidity trap). You can’t show something is true today by making a reference from 10 years ago. Lets face it, Bernacke is not saying we’re in a liquidity today, and this is why you can’t find a quote.
In the economy today monetary policy is what’s causing the interest rate to be zero, which is stimulating the economy. In a liquidity trap moneytary policy does not drive rates down and thus can’t stimulate the economy. The fact that rates were driven down and are being held down by monetary policy is further evidence that we’re not in a liquidity trap.
And Bernacke has not said we are in a liquidty trap. If he did you would have found it by now.
Inadvertently perhaps, Republicans reminded us why Obama, with majorities in both houses, can’t get anything done. Watching them sitting stone-faced in their seats, like the board of a country club sizing up an aspiring member, it all became perfectly clear.
—-Margaret Carlson in Bloomberg News on Obama’s SOTUS
Yeah, he’s black, he’s not one of us, what is he doing there?
So what are you trying to say, that the message would be better or more accurate if it were backwards. Progressive means to move forward, to think ahead, to make progress. Hiow is it that that has a negative connotation to you?
Cantab,
You said:
“In the economy today monetary policy is what’s causing the interest rate to be zero, which is stimulating the economy.”
The first line in the New Palgrave Dictionary of Economics under the definition of a liquidity trap is:
“A liquidity trap is defined as a situation in which the short term nominal interest rate is zero.”
You told us that the short term nominal interest rate is zero, and the definition of a liquidity trap is when the short term nominal interest rates is zero.
OK Cantab. You don’t understand liquidity traps or economic stimulus any better than you understand any thing else about economics. And you aren’t interested in learning because actually knowing what you are talking about might constitute a disruption in the force or some such. That’s fine. I can live with doltishness. But how about as a favor to those of us that do understand the terms, you quit abusing them?
BTW, I should have said in my first post, that you are right that 5.8 percent is a good number. 2slugs is probably correct that it may not turn out to be all that great once revised and put into context with the data from the current quarter and next. But it’s hard to see how a much higher number could turn up at this time and it’s sure a hell of a lot better than another negative quarter would be. At the very least things seem to have stopped going to hell at Mach speed and that’s good.
(***Keynes with the great depression as a backdrop said he knew of no examples of a liquidity trap*** If I recall correctly Keynes said that in a letter to Roosevelt early in the depression and at that time, the whole concept of a liquidity trap was more theoretical than real. But today, we have a major economy — Japan — where deflation and zero interest rates have become institutionalized and no one can figure out how to change the situation. Do you seriously think that Keynes would still think that liquidity traps were only a theoretical possibility were he alive today?)
Applying the Lucas critique to welfare programs shows that welfare programs change behavior and actually draw people into welfare that might otherwise have worked. Maybe the ones drawn in would only have marginal jobs but their working moves them from the burden column to the asset column. And this is true regardless of their view on quality of life between working and not working.
“A liquidity trap is defined as a situation in which the short term nominal interest rate is zero.”
The short term interest rate is not zero, if it was then we would not need the FED to drive the rates paid by banks down to zero. They would be there without any help from the FED.
Four eyes,
Do you have a quote from Benarke saying that we’re in a liquidity trap or that at some point in the past year we were in one? That’s all i’m asking for and if you come up with one you can settle this thing. Quotes from other FED members or top Acedemic experts on monetary policy would go a long way to prove the point.
Jack, it doesn’t reflect the definition for the political movement.
Even Brad DeLong said we could inflate out way out of depression but he said this was a bad idea for other reasons.
Well, my definition of a liquidity trap is, purely and simply, a situation in which conventional monetary policy — open-market purchases of short-term government debt — has lost effectiveness. Period. End of story.——–
From Krugman’s blog
This does not sound as if quantitative easing is the solution to a liquidity trap. I sounds as if when you are in a liquidity trap quantitative easing is of no use.
The term liquidity trap is used in Keynesian economics to refer to a situation where the demand for money becomes infinitely elastic, i.e. where the demand curve is horizontal, so that further injections of money into the economy will not serve to further lower interest rates. Under the narrow version of Keynesian theory in which this arises, it is specified that monetary policy affects the economy only through its effect on interest rates. Therefore, if the economy enters a liquidity trap area — and further increases in the money stock will fail to further lower interest rates — monetary policy will be unable to stimulate the economy.
From Wikipedia
The idea being that you cannot stimulate the economy more by “printing” more money since it will simply be hoarded. You have to have the government start spending to stimulate the economy. That is why Krugman and Stiglitz are for much more massive government spending at this time.
Margery,
Therefore, if the economy enters a liquidity trap area — and further increases in the money stock will fail to further lower interest rates — monetary policy will be unable to stimulate the economy.
So since the FED actually did drive down the interest rate according to this definition we are not in a liquidity trap and therefore we don’t need a Keynesian federal stimulus.
Wrong place
The definition of the term is the very reason that it is applied to the ideology of the progressive movement. It is not a party. it is not even as well defined as the conservative movement, but its meaning is more precise. As noted, progressive ideology is one of forward thinking, of making profress in the improvement of our country, of klooking ahead rather than looking to the past, of thinking of ways to improve rather than methods to obstruct. The term progressive is applied to the ideology that fits its definition. You can make any suggestion that you care to. That doesn’t make your idea of what a progressive political and social ideology is all about. The word defines what the movement seeks to accomplish. You obviously have difficulty understanding alternative ideas.
http://news.yahoo.com/s/ap/20100130/ap_on_re_as/as_afghanistan;_ylt=AtaPTqsx0OqPtZywhiBVTBKs0NUE;_ylu=X3oDMTNlZXQ1anY1BGFzc2V0A2FwLzIwMTAwMTMwL2FzX2FmZ2hhbmlzdGFuBGNjb2RlA21vc3Rwb3B1bGFyBGNwb3MDMgRwb3MDNQRwdANob21lX2Nva2UEc2VjA3luX3RvcF9zdG9yeQRzbGsDYW5nZXJhc25hdG9h
Just one blunder after another. Unkie Sam, the imperialist who can’t shoot straight.
***Even Brad DeLong said we could inflate out way out of depression but he said this was a bad idea for other reasons.*** Cantab
DeLong did say that or something like it. I remember that. But that was quite some time ago back when it was just becoming clear that some financial geniuses had been writing insurance policies (CDS’s) that they couldn’t honor, wasn’t it? It’s really not at all clear that is still true A non-technical definition of a liquidity trap might be a situation where the government CAN’T inflate the currency even when it wants to. That’s where Japan is. We may well be there also.
Not that I’m anxious to try inflation as a cure just yet.
http://krugman.blogs.nytimes.com/2010/01/30/cossack-rahm-works-for-the-czar/
He can’t lead because he gets the respect that a black gets in the USA…i.e., next to none.
The liquidity trap results from the discredited notion of “loanable funds”. The thinking is that improving liquidity makes loans more prevalent. The fact is loans are demand driven not supply driven. The banks dont need money to lend, they need credit worthy customers to lend to. The whole monetarist notion that these short term interest rates affect the flow of funds is flawed from the start. Lowering interest rates does not make more credit worthy customers. Whether a bank lends at 4.5 or 7.5 they want you to be able to pay it back and that is all that matters.
Some argue, I think quite persuasively, that the interest rates (set by the fed) should always be zero. http://bilbo.economicoutlook.net/blog/?p=1961
This would free fed governors from having to have these meetings to discuss rates and allow them to attend to more useful things.
Government doesnt control money supply any way, we do with our loan demand.
Monetary policy as a whole has been a misguided failure. The attempt to control money supply through monetary policy has resulted in abandoning fiscal policy and using unemployment as an inflation control. The truth through the years has been that the normal range of interest rates do not affect much, only Volckers shock really affected things and many now think that was too harsh a tool to use.
The Fed sets the rates Cantab they are not market driven. All the fed operations are done to drain or add reserves to maintain that benchmark. They are there ONLY because of help from the Fed.
You are really talking out your ass
Slugs – “A story from World Net Daily??? And you took it seriously ?”
The story is based on information provided as a result of FOIA requests submitted by Judicial Watch. That point was explained early on in the article: “Documents obtained under the Freedom of Information Act by Judicial Watch, which investigates and prosecutes government corruption, show Pelosi incurred expenses of some $2.1 million for her use of Air Force jets for travel over that time.”
Are you attempting to discredit FOIA documents provided by the U.S. Government?
Nancy Pelosi–Air Force Documents
These documents were produced by the U.S. Air Force in response to a FOIA request for documents regarding House Speaker Nancy Pelosi’s use of Air Force transportation for Congressional Delegation (CODEL) travel.
http://www.judicialwatch.org/news/2010/jan/judicial-watch-uncovers-new-documents-detailing-pelosis-use-air-force-aircraft
and
http://www.judicialwatch.org/story/2010/jan/nancy-pelosi-air-force-documents
Associated Press among other sources carried the story:
Judicial Watch Uncovers New Documents Detailing Pelosi’s Use of Air Force
Associated Press, 1/28/2010
http://www.syracuse.com/newsflash/business/index.ssf?/base/business-57/1264704485191950.xml&storylist=business
Military Pays for Booze for Congressional Trips Abroad
Jan 22, 2010
http://www.allgov.com/ViewNews/Military_Pays_for_Booze_for_Congressional_Trips_Abroad_100122
Millionaire Pelosi Uses US Military Jets To Shuttle Her Children & Grandchildren; $18,000/hr Of Taxpayers Dollars
The Raw Deal, January 30, 2010
http://the-raw-deal.com/2010/01/30/millionaire-pelosi-uses-us-military-jets-to-shuttle-her-children-grandchildren-18000hr-of-taxpayers-dollars/
Unfrickin-believable: U.S. Military Serving as Chauffeurs, Babysitters for the Pelosi Kids: Receipts That Will Blow Your Mind
January 30, 2010
http://directorblue.blogspot.com/2010/01/us-military-serving-as-chauffeurs.html
Previous Judicial Watch FOIA discovery efforts:
Judicial Watch Uncovers Documents Detailing Pelosi’s Repeated Requests for Military Travel
March 10, 2009
http://www.judicialwatch.org/news/2009/mar/judicial-watch-uncovers-documents-detailing-pelosis-repeated-requests-military-travel
Slugs – “Cancelling flights is not unusual.”
Have you ever reviewed the FOIA documents that detail the communications between the Speaker’s office/House and DoD regards flight requests and cancellations? It is an interesting read.
Slugs – “Pelosi flies around in a military jet for the same reason that the President flies in a military jet, as does the Veep. Pelosi is third in the succession line.”
U.S. Government flight support to and from the residence of a House speaker was only undertaken after 9/11 by presidential executive order. The news media issue in the case […]
Slugs – “A story from World Net Daily??? And you took it seriously ?”
The story is based on information provided as a result of FOIA requests submitted by Judicial Watch. That point was explained early on in the article: “Documents obtained under the Freedom of Information Act by Judicial Watch, which investigates and prosecutes government corruption, show Pelosi incurred expenses of some $2.1 million for her use of Air Force jets for travel over that time.”
Are you attempting to discredit FOIA documents provided by the U.S. Government?
Nancy Pelosi–Air Force Documents
These documents were produced by the U.S. Air Force in response to a FOIA request for documents regarding House Speaker Nancy Pelosi’s use of Air Force transportation for Congressional Delegation (CODEL) travel.
http://www.judicialwatch.org/news/2010/jan/judicial-watch-uncovers-new-documents-detailing-pelosis-use-air-force-aircraft
and
http://www.judicialwatch.org/story/2010/jan/nancy-pelosi-air-force-documents
Associated Press among other sources carried the story:
Judicial Watch Uncovers New Documents Detailing Pelosi’s Use of Air Force
Associated Press, 1/28/2010
http://www.syracuse.com/newsflash/business/index.ssf?/base/business-57/1264704485191950.xml&storylist=business
Military Pays for Booze for Congressional Trips Abroad
Jan 22, 2010
http://www.allgov.com/ViewNews/Military_Pays_for_Booze_for_Congressional_Trips_Abroad_100122
Millionaire Pelosi Uses US Military Jets To Shuttle Her Children & Grandchildren; $18,000/hr Of Taxpayers Dollars
The Raw Deal, January 30, 2010
http://the-raw-deal.com/2010/01/30/millionaire-pelosi-uses-us-military-jets-to-shuttle-her-children-grandchildren-18000hr-of-taxpayers-dollars/
Unfrickin-believable: U.S. Military Serving as Chauffeurs, Babysitters for the Pelosi Kids: Receipts That Will Blow Your Mind
January 30, 2010
http://directorblue.blogspot.com/2010/01/us-military-serving-as-chauffeurs.html
Previous Judicial Watch FOIA discovery efforts:
Judicial Watch Uncovers Documents Detailing Pelosi’s Repeated Requests for Military Travel
March 10, 2009
http://www.judicialwatch.org/news/2009/mar/judicial-watch-uncovers-documents-detailing-pelosis-repeated-requests-military-travel
Slugs – “Cancelling flights is not unusual.”
Have you ever reviewed the FOIA documents that detail the communications between the Speaker’s office and DoD regards flight requests and cancellations? It is an interesting read.
Slugs – “Pelosi flies around in a military jet for the same reason that the President flies in a military jet, as does the Veep. Pelosi is third in the succession line.”
Routine U.S. Government flight support to and from the residence of a House speaker was only undertaken after 9/11 by presidential executive order. The news media issue in the case […]
US empire in the Far East showing cracks. Our main ally/base is beginning to tire of us being there. As China rises in importance Japan will begin to cozy up to it if it is smart and gradually tell Unkie Sam to “get lost”. This may be the beginning of the process: I am sure China would love to see us out of Japan and our naval bases there closed.
http://www.dailymail.co.uk/news/worldnews/article-1247281/Thousands-protest-Tokyo-U-S-military-presence-Japan.html
Margery, the self-procalimed defense and international treaty expert, doesn’t understand much of anything related to security issues in the Far East.
“Japan, Taiwan, South Korea, and China all share a strong interest in preserving the US role as guarantor of Japan’s security. The last thing China would want to see is a remilitarizing Japan that might develop a nuclear deterrent,” as explained in a Boston Globe editorial. The same can be said for Australia and New Zealand as well as other nations in the Far East and Asia.
Establishing nuclear deterrents is very likely if the United States pulls out of Japan, Okinawa, South Korea, and voids its agreement to provide defensive weapons to Taiwan.
Margery doesn’t take such issues into consideration as she continues her endless multiple front anti-U.S. rants. Margery demonstrates no working knowledge of the defense treaties, agreements, and acts in relation to any of the Far East nations and entities, and she simply lacks sufficient background and reasoning skills to understand the defense strategies in play.
Margery hasn’t taken her thinking far enough. She can continue to rant and mock the United States, but she is clueless on defense strategy throughout Asia and the Far East.
China does not want Japan to remilitarize and further arm itself with nuclear weapons. That is likely to occur if the United States removes Japan from its nuclear umbrella protection as established in an defense agreement 50 years ago.
Margery Meanwell, the self-procalimed defense and international treaty expert, doesn’t understand much of anything related to security issues in the Far East.
“Japan, Taiwan, South Korea, and China all share a strong interest in preserving the US role as guarantor of Japan’s security. The last thing China would want to see is a remilitarizing Japan that might develop a nuclear deterrent,” explained a Boston Globe editorial. The same can be said for Australia and New Zealand as well as other nations in the Far East and Asia.
Establishing nuclear deterrents is very likely if the United States pulls out of Japan, Okinawa, South Korea, and voids its agreement to provide defensive weapons to Taiwan.
Margery doesn’t take such issues into consideration as she continues her endless multiple front anti-U.S. rants. Margery demonstrates no working knowledge of the defense treaties, agreements, and acts in relation to any of the Far East nations and entities, and she simply lacks sufficient background and reasoning skills to understand the defense strategies in play.
Margery hasn’t taken her thinking far enough. She can continue to rant and mock the United States, but she is clueless on defense strategy throughout Asia and the Far East.
China does not want Japan to remilitarize and further arm itself with nuclear weapons. That is likely to occur if the United States removes Japan from its nuclear umbrella protection as established in an defense agreement 50 years ago.
Margery Meanwell, the self-procalimed defense and international treaty expert, doesn’t understand much of anything related to security issues in the Far East.
“Japan, Taiwan, South Korea, and China all share a strong interest in preserving the US role as guarantor of Japan’s security. The last thing China would want to see is a remilitarizing Japan that might develop a nuclear deterrent,” explained a Boston Globe editorial. The same can be said for Australia and New Zealand as well as other nations in the Far East and Asia.
Establishing nuclear deterrents is very likely if the United States pulls out of Japan, Okinawa, South Korea, and voids its agreement to provide defensive weapons to Taiwan.
Margery doesn’t take such issues into consideration as she continues her endless multiple front anti-U.S. rants. Margery demonstrates no working knowledge of the defense treaties, agreements, and acts in relation to any of the Far East nations and entities, and she simply lacks sufficient background and reasoning skills to understand the defense strategies in play.
Margery hasn’t taken her thinking far enough. She can continue to rant and mock the United States, pretending to have all the answers. The reality, though, is that Margery demonstrates no knowledge of defense strategy throughout Asia and the Far East.
China does not want Japan to remilitarize and further arm itself with nuclear weapons. That is likely to occur if the United States removes Japan from its nuclear umbrella protection as established in a defense agreement 50 years ago.
Margery Meanwell, the self-procalimed defense and international treaty expert, doesn’t understand much of anything related to security issues in the Far East.
“Japan, Taiwan, South Korea, and China all share a strong interest in preserving the US role as guarantor of Japan’s security. The last thing China would want to see is a remilitarizing Japan that might develop a nuclear deterrent,” explained a Boston Globe editorial. The same can be said for Australia and New Zealand as well as other nations in the Far East and Asia.
Establishing nuclear deterrents is very likely if the United States pulls out of Japan, Okinawa, South Korea, and voids its agreement to provide defensive weapons to Taiwan.
Margery doesn’t take such issues into consideration as she continues her endless multiple front anti-U.S. rants. Margery demonstrates no working knowledge of the defense treaties, agreements, and legislative acts in relation to any of the Far East nations and entities. She simply lacks sufficient background and reasoning skills to understand the defense strategies in play.
Margery hasn’t taken her thinking far enough. She can continue to rant and mock the United States, pretending to have all the answers. The reality, though, is that Margery demonstrates no knowledge of defense strategy throughout Asia and the Far East.
China does not want Japan to remilitarize and further arm itself with nuclear weapons. That is likely to occur if the United States removes Japan from its nuclear umbrella protection as established in a defense agreement 50 years ago.
http://news.yahoo.com/s/ap/20100131/ap_on_go_ca_st_pe/us_torture_memos;_ylt=As0IGnUIV8tNZOxQjbABkQis0NUE;_ylu=X3oDMTNrNXZ0MGcxBGFzc2V0A2FwLzIwMTAwMTMxL3VzX3RvcnR1cmVfbWVtb3MEY2NvZGUDbW9zdHBvcHVsYXIEY3BvcwM2BHBvcwMzBHB0A2hvbWVfY29rZQRzZWMDeW5faGVhZGxpbmVfbGlzdARzbGsDcmVwb3J0bm9zYW5j
Of course they won’t be punished. After all what could be more completely American these days than torture? The Nazis did it, other have done it, so it’s fine for us to do it too. After all, are we better than Nazis? What insufferable arrogance to think so.
Cantab,
So since the FED actually did drive down the interest rate according to this definition we are not in a liquidity trap
Ummmm….no. The Fed has not been able to lower interest rates for quite awhile despite their best efforts to do so. Nominal rates are stuck at zero. And this despite all of the quantitative easing. And go look at the St. Louis Fed’s FRED database. Check out the data on excess banking reserves. The went from virtually zero (where they had been for decades) to $1T almost overnight. Guess what? No effect on interest rates. No effect on lending. Banks are just sitting on the reserves. That my friend is what a liquidity trap looks like.
… and therefore we don’t need a Keynesian federal stimulus.
And this is the real reason you refuse to believe we’re in a liquidity trap despite all of the evidence to the contrary. This is why you’re going through these absurd intellectual gymnastics to avoid recognizing what’s as plain as the nose on your face. Once you admit that we’re in a liquidity trap, then all of your arguments against fiscal stimulus go down the flusher. The difference between you and our other resident conservatives (CoRev and sammy) is that you know the case against fiscal stimulus collapses if you dare admit that we’re in a liquidity trap. So you’re in perpetual denial mode.
MG,
Your WSJ article on booze spending did not say what you claimed. The article was about liquor bills of military personnel who accompanied congressional delegations. It was not about Pelosi running up big booze bills and passing them off to the taxpayer. In fact, it wasn’t much at all about Pelosi…it was mainly about military personnel on congressional junkets of other congress critters.
Your posts on others using military aircraft did not disprove my point that the govt was reimbursed. All of the documents showed that travel was on a reimburseable basis. None of the rates that I saw looked out of the ordinary. And the Joint Travel Reg says that travel by military aircraft is supposed to be the first option for official business. The idea is that most of these flights are operated by various Air National Guard pilots and shuttlig govt officials around on military aircraft is how they rack up their training flight hours. The cost that each agency reimburses the govt is only supposed to include marginal costs…i.e., the additional cost of flying one extra person. That’s the efficient economic cost to charge…and it’s also one reason why airlines have problems making an economic profit when there are competitive routes…because competitive routes tend toward marginal cost pricing which doesn’t cover fixed costs. And I don’t know if you’ve ever flown on military aircraft, but it’s not the fun filled experience that most people imagine. It sucks. The only advantage to flying MAC is that you can fly on demand and you don’t have layovers or missed connections. And you don’t go through all of the security hassles. But once you’re on the plane you usually find yourself wishing that you had flown coach on a commercial plane.
I agree that a Speaker flying into and out of commercial airports isn’t as big a deal as Air Force One, but it is still a mess. Runways get closed down just as they close down major highways in DC when the Speaker zooms by in one of those big convoys of govt SUVs. And military aircraft usually try to avoid major commercial airports. For instance, I used to fly MAC into and out of the Detroit area and MAC always flew into the smaller Detroit city airport rather than the Detroit Metro airport on the southwest end of town. So again, flying out of Travis makes more sense than flying out of SF airport.
slugs – “Your WSJ article on booze spending did not say what you claimed. The article was about liquor bills of military personnel who accompanied congressional delegations. It was not about Pelosi running up big booze bills and passing them off to the taxpayer. In fact, it wasn’t much at all about Pelosi…it was mainly about military personnel on congressional junkets of other congress critters.”
I only made these statements about the WSJ article: “I suppose you missed the Wall Street Journal piece which reviewed travel records and reported the following. If you have anything to refute the government travel records documents, share it. If you have any references to support your claim, share such as well.”
You provided no evidence to support your claim. Moreover, you don’t appear to understand what happens on these CODEL trips.
What part of the following statements do you not grasp?
“Military officials bought thousands of dollars worth of alcohol, food and other amenities for the U.S. lawmakers they accompanied on trips overseas, travel records viewed by The Wall Street Journal show.”
“The documents don’t show these outlays have secured any favors or favoritism from lawmakers. And the funds spent by military personnel—which ran about $4,300 per trip for the 43 trips examined by the Journal—usually account for only a small portion of the total lawmakers spend on overseas travel.”
“Overseas trips are initiated by lawmakers and must be approved by committee chairmen or other congressional leaders. The lawmaker leading the delegation selects a division of the armed forces to help coordinate the trip.”
“When lawmakers return, congressional rules require they file a form disclosing their costs in such broad categories as transportation, meals and accommodations. But they aren’t required to disclose all foreign-trip expenses. The documents obtained by the Journal show that lawmakers don’t disclose much of the costs of alcohol, food and other supplies purchased for them by military liaisons.”
“Drew Hammill, a spokesman for House Speaker Nancy Pelosi, said lawmakers aren’t required to include those costs because “the whole idea of member disclosure is to disclose what members themselves spend, not what is being spent for support services they don’t control.”
“Reported spending on overseas travel was $13 million in 2008, a tenfold increase from 1995, according to an analysis by the Journal.”
“The travel data come from military-expense records the Journal obtained through a Freedom of Information Act Request. They include information on more than 100 congressional trips planned and implemented by the Air Force and Army from December 2007 to mid-2009. In 43 of the trip reports, documents include a breakdown of expenses paid by military liaisons.”
“Examples of the military’s spending include $20,000 for baggage-handling tips, alcohol, snacks, refreshments and other “trip supplies” during a 13-day trip in January 2008 led by House Majority Leader Steny Hoyer, a Maryland Democrat, to Australia, New Zealand and Vietnam. That expense was in addition to the nearly $70,000 the lawmakers made public on travel-disclosure forms they filed with Congress.”
“Before Ms. Pelosi, a California Democrat, and nine other lawmakers left for England, India and Spain in March 2008, officials from the Air Force stocked the government plane with $438.75 worth of alcohol, including three cases of beer, 15 bottles of wine, three bottles of vodka, Crown Royal, Dewar’s and other liquor, records show. Air Force officials spent another $750 on chips, cakes and other snacks.”
“Military liaisons “are left the discretion of making these decisions and we made no requests […]
Margery,
The Nigerian kid tried to kill everyone else on the plane for some BS reason. I don’t see why we should not dunk him in water, keep him up all night with loud music, and do some further harrasment to get everything he knows. He’ll probably survive. I certainly would not want to be treated this way but they I’m not going to put explosives in my underware to kill innocent people. So if you can’t deal with the interogation then don’t be a Jihadist.
Margery,
The Nigerian kid tried to kill everyone else on the plane for some BS reason. I don’t see why we should not dunk him in water, keep him up all night with loud music, and do some further harrasment to get everything he knows. He’ll probably survive. I certainly would not want to be treated this way but then I’m not going to put explosives in my underware to kill innocent people. If you can’t do the interogation then don’t do the crime.
MG,
It says military officials bought those things; it does not say Pelosi bought those things and charged them to the govt. If there’s a problem, it’s with the Air Force trying to influence congress critters with booze and such.
It would be interesting to know which way the reimbursements went. Normally if someone is traveling on government business, the government reimburses the traveler according to some set rate. For example, if I fly on commercial aircraft I pay for the flight using my credit card and I am personally responsible for paying the credit card company. I then submit a voucher to the government for reimbursement…and then hope that the govt processes the claim quickly, because it’s my responsibility to pay the credit card bill regardless of whether or not I get reimbursed. Now I can fly first class and run up huge bills…that’s my call; but the govt will only reimburse me up to whatever coach fair was negotiated under the GSA contract with the airlines. And that same rule applies to non-govt employees traveling on govt business…e.g., contractors traveling to a govt sponsored conference to present a briefing. And sometimes reimbursement works the other way around where the traveler is not on govt business, but is accompanying someone who is. For example, a general officer might want to fly to Camp Swampy using his command plane or some other military aircraft, but he wants to bring his wife along too because her mother lives near Camp Swampy. That’s perfectly okay as long as she does not bump someone else off the flight who needed to be on that flight; however, the general would have to reimburse the govt for the marginal cost of adding her to the flight. This happens a lot. The notes on those Judicial Watch documents were confusing because they indicated this was travel on official business, in which case it’s not at all clear why Pelosi’s party should have been had to have paid anything. You can argue whether or not their travel constituted official business, but that’s a completely different issue. The Judicial Watch documents don’t help us understand that issue any better one way or the other.
Look, this whole business about Pelosi’s aircraft was something that first came up right after the Democrats took control after the 2006 election. It was never an issue while Hastert was Speaker despite the fact that Hastert was also provided with military aircraft. The decision to increase security around the Speaker was indeed a post-9/11 decision. Do you disagree with that decision? The Speaker is right behind the Veep in succession, so I’m okay with increasing her security detachment. Afterall, the John Wilkes Booth conspiracy came very close to decapitating the top three in succession, so I suppose if a frustrated actor can come that close we should at least concede the possibility that A-Q might have a decent shot at it. The Bush Administration left it up to the Air Force and security experts to decide the right type of aircraft. The Air Force recommended a larger plane than Hastert had for the simple reason that the flight was longer. If Judicial Watch has a problem with Pelosi’s aircraft and the folks she brings on the plane, then Judicial Watch really needs to bring it up with the Air Force.
SSA Combined Trust Funds (OASIDI) Cash Flow Projections
THEN:
Latest SSA annual report
May 2009
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
—-
CBO Summer 2009 Baseline
August 2009
FY 2010 -$10 billion
FY 2011 -$9 billion
FY 2012 +$8 billion
FY 2013 +$18 billion
FY 2014 +$17 billion
FY 2015 +$9 billion
FY 2016 -$6 billion
FY 2017 -$23 billion
FY 2018 -$41 billion
FY 2019 -$63 billion
—-
NOW:
CBO – Budget and Economic Outlook: Fiscal Years 2010 to 2020
January 2010
FY 2010 -$28 billion
FY 2011 -$20 billion
FY 2012 -$11 billion
FY 2013 -$2 billion
FY 2014 +$7 billion
FY 2015 +$6 billion
FY 2016 -$3 billion
FY 2017 -$17 billion
FY 2018 -$34 billion
FY 2019 -$55 billion
FY 2020 -$73 billion
FY 2010-2020 Total -$230 billion
—-
Obama Administration FY2011 budget projection
February 2010
FY 2010 -$33.9 billion
FY 2011 -$19.1 billion
FY 2012 -$2.0 billion
FY 2013 +$7.6 billion
FY 2014 +10.7 billion
FY 2015 +$13.8 billion
—-
Projected SSA Combined Trust Funds Cash Flow
differences between SSA May 2009 report
and latest CBO and OMB projections
…………..CBO………….OMB……
FY 2010 -$44.4 billion -$50.3 billion
FY 2011 -$50.4 billion -$49.5 billion
FY 2012 -$48.4 billion -$33.4 billion
FY 2013 -$37.7 billion -$28.1 billion
FY 2014 -$15.7 billion -$11.4 billion
FY 2015 +$0.7 billion +$8.5 billion
FY 2016 +4.8 billion
FY 2017 +18.0 billion
FY 2018 +28.2 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2009c/oasdiTrustfund.pdf
http://www.cbo.gov/ftpdocs/108xx/doc10871/AppendixD.shtml#1098293
http://www.cbo.gov/ftpdocs/108xx/doc10871/Chapter3.shtml#1096746
http://www.whitehouse.gov/omb/budget/fy2011/assets/technical_analyses.pdf
SSA Combined Trust Funds (OASIDI) Cash Flow Projections
THEN:
Latest SSA annual report
May 2009
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
—-
CBO Summer 2009 Baseline
August 2009
FY 2010 -$10 billion
FY 2011 -$9 billion
FY 2012 +$8 billion
FY 2013 +$18 billion
FY 2014 +$17 billion
FY 2015 +$9 billion
FY 2016 -$6 billion
FY 2017 -$23 billion
FY 2018 -$41 billion
FY 2019 -$63 billion
—-
NOW:
CBO – Budget and Economic Outlook: Fiscal Years 2010 to 2020
January 2010
FY 2010 -$28 billion
FY 2011 -$20 billion
FY 2012 -$11 billion
FY 2013 -$2 billion
FY 2014 +$7 billion
FY 2015 +$6 billion
FY 2016 -$3 billion
FY 2017 -$17 billion
FY 2018 -$34 billion
FY 2019 -$55 billion
FY 2020 -$73 billion
FY 2010-2020 Total -$230 billion
—-
Obama Administration FY2011 budget projection
February 2010
FY 2010 -$33.9 billion
FY 2011 -$19.1 billion
FY 2012 -$2.0 billion
FY 2013 +$7.6 billion
FY 2014 +10.7 billion
FY 2015 +$13.8 billion
—-
Projected SSA Combined Trust Funds Cash Flow
differences between SSA May 2009 report
and latest CBO and OMB projections
……………..CBO…………..OMB……
FY 2010 -$44.4 billion -$50.3 billion
FY 2011 -$50.4 billion -$49.5 billion
FY 2012 -$48.4 billion -$33.4 billion
FY 2013 -$37.7 billion -$28.1 billion
FY 2014 -$15.7 billion -$11.4 billion
FY 2015 +$0.7 billion +$8.5 billion
FY 2016 +4.8 billion
FY 2017 +18.0 billion
FY 2018 +28.2 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2009c/oasdiTrustfund.pdf
http://www.cbo.gov/ftpdocs/108xx/doc10871/AppendixD.shtml#1098293
http://www.cbo.gov/ftpdocs/108xx/doc10871/Chapter3.shtml#1096746
http://www.whitehouse.gov/omb/budget/fy2011/assets/technical_analyses.pdf
.
SSA Combined Trust Funds (OASIDI) Cash Flow Projections
THEN:
Latest SSA annual report
May 2009
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
—-
CBO Summer 2009 Baseline
August 2009
FY 2010 -$10 billion
FY 2011 -$9 billion
FY 2012 +$8 billion
FY 2013 +$18 billion
FY 2014 +$17 billion
FY 2015 +$9 billion
FY 2016 -$6 billion
FY 2017 -$23 billion
FY 2018 -$41 billion
FY 2019 -$63 billion
—-
NOW:
CBO – Budget and Economic Outlook: Fiscal Years 2010 to 2020
January 2010
FY 2010 -$28 billion
FY 2011 -$20 billion
FY 2012 -$11 billion
FY 2013 -$2 billion
FY 2014 +$7 billion
FY 2015 +$6 billion
FY 2016 -$3 billion
FY 2017 -$17 billion
FY 2018 -$34 billion
FY 2019 -$55 billion
FY 2020 -$73 billion
FY 2010-2020 Total -$230 billion
—-
Obama Administration FY 2011 Budget
February 2010
FY 2010 -$33.9 billion
FY 2011 -$19.1 billion
FY 2012 -$2.0 billion
FY 2013 +$7.6 billion
FY 2014 +10.7 billion
FY 2015 +$13.8 billion
—-
Projected SSA Combined Trust Funds Cash Flow
differences between SSA May 2009 report
and latest CBO and OMB projections
………………CBO…………..OMB……
FY 2010 -$44.4 billion -$50.3 billion
FY 2011 -$50.4 billion -$49.5 billion
FY 2012 -$48.4 billion -$33.4 billion
FY 2013 -$37.7 billion -$28.1 billion
FY 2014 -$15.7 billion -$11.4 billion
FY 2015 +$0.7 billion +$8.5 billion
FY 2016 +4.8 billion
FY 2017 +18.0 billion
FY 2018 +28.2 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2009c/oasdiTrustfund.pdf
http://www.cbo.gov/ftpdocs/108xx/doc10871/AppendixD.shtml#1098293
http://www.cbo.gov/ftpdocs/108xx/doc10871/Chapter3.shtml#1096746
http://www.whitehouse.gov/omb/budget/fy2011/assets/technical_analyses.pdf
.
SSA Combined Trust Funds (OASIDI) Cash Flow Projections
THEN:
Latest SSA annual report
May 2009
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
—-
CBO Summer 2009 Baseline
August 2009
FY 2010 -$10 billion
FY 2011 -$9 billion
FY 2012 +$8 billion
FY 2013 +$18 billion
FY 2014 +$17 billion
FY 2015 +$9 billion
FY 2016 -$6 billion
FY 2017 -$23 billion
FY 2018 -$41 billion
FY 2019 -$63 billion
—-
NOW:
CBO – Budget and Economic Outlook: Fiscal Years 2010 to 2020
January 2010
FY 2010 -$28 billion
FY 2011 -$20 billion
FY 2012 -$11 billion
FY 2013 -$2 billion
FY 2014 +$7 billion
FY 2015 +$6 billion
FY 2016 -$3 billion
FY 2017 -$17 billion
FY 2018 -$34 billion
FY 2019 -$55 billion
FY 2020 -$73 billion
FY 2010-2020 Total -$230 billion
—-
Obama Administration FY 2011 Budget
February 2010
FY 2010 -$33.9 billion
FY 2011 -$19.1 billion
FY 2012 -$2.0 billion
FY 2013 +$7.6 billion
FY 2014 +10.7 billion
FY 2015 +$13.8 billion
—-
SSA Combined Trust Funds Cash Flow
comparison between SSA May 2009 report
and latest CBO and OMB projections
………………CBO…………..OMB……
FY 2010 -$44.4 billion -$50.3 billion
FY 2011 -$50.4 billion -$49.5 billion
FY 2012 -$48.4 billion -$33.4 billion
FY 2013 -$37.7 billion -$28.1 billion
FY 2014 -$15.7 billion -$11.4 billion
FY 2015 +$0.7 billion +$8.5 billion
FY 2016 +$4.8 billion
FY 2017 +$18.0 billion
FY 2018 +$28.2 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2009c/oasdiTrustfund.pdf
http://www.cbo.gov/ftpdocs/108xx/doc10871/AppendixD.shtml#1098293
http://www.cbo.gov/ftpdocs/108xx/doc10871/Chapter3.shtml#1096746
http://www.whitehouse.gov/omb/budget/fy2011/assets/technical_analyses.pdf
.
SSA Combined Trust Funds (OASIDI) Cash Flow Projections
THEN:
Latest SSA annual report
May 2009
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
—-
CBO Summer 2009 Baseline
August 2009
FY 2010 -$10 billion
FY 2011 -$9 billion
FY 2012 +$8 billion
FY 2013 +$18 billion
FY 2014 +$17 billion
FY 2015 +$9 billion
FY 2016 -$6 billion
FY 2017 -$23 billion
FY 2018 -$41 billion
FY 2019 -$63 billion
—-
NOW:
CBO – Budget and Economic Outlook: Fiscal Years 2010 to 2020
January 2010
FY 2010 -$28 billion
FY 2011 -$20 billion
FY 2012 -$11 billion
FY 2013 -$2 billion
FY 2014 +$7 billion
FY 2015 +$6 billion
FY 2016 -$3 billion
FY 2017 -$17 billion
FY 2018 -$34 billion
FY 2019 -$55 billion
FY 2020 -$73 billion
FY 2010-2020 Total -$230 billion
—-
Obama Administration FY 2011 Budget
February 2010
FY 2010 -$33.9 billion
FY 2011 -$19.1 billion
FY 2012 -$2.0 billion
FY 2013 +$7.6 billion
FY 2014 +10.7 billion
FY 2015 +$13.8 billion
—-
SSA Combined Trust Funds Cash Flow
comparison between SSA May 2009 report
and latest CBO and OMB projections
………………CBO…………..OMB……
FY 2010 -$44.4 billion -$50.3 billion
FY 2011 -$50.4 billion -$49.5 billion
FY 2012 -$48.4 billion -$33.4 billion
FY 2013 -$37.7 billion -$28.1 billion
FY 2014 -$15.7 billion -$11.4 billion
FY 2015 +$0.7 billion +$8.5 billion
FY 2016 +$4.8 billion
FY 2017 +$18.0 billion
FY 2018 +$28.2 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2009c/oasdiTrustfund.pdf
http://www.cbo.gov/ftpdocs/108xx/doc10871/AppendixD.shtml#1098293
http://www.cbo.gov/ftpdocs/108xx/doc10871/Chapter3.shtml#1096746
http://www.whitehouse.gov/omb/budget/fy2011/assets/technical_analyses.pdf
.
SSA Combined Trust Funds (OASIDI) Cash Flow Projections
OLD DATA:
Latest SSA annual report
May 2009
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
—-
CBO Summer 2009 Baseline
August 2009
FY 2010 -$10 billion
FY 2011 -$9 billion
FY 2012 +$8 billion
FY 2013 +$18 billion
FY 2014 +$17 billion
FY 2015 +$9 billion
FY 2016 -$6 billion
FY 2017 -$23 billion
FY 2018 -$41 billion
FY 2019 -$63 billion
—-
NEW DATA:
CBO – Budget and Economic Outlook: Fiscal Years 2010 to 2020
January 2010
FY 2010 -$28 billion
FY 2011 -$20 billion
FY 2012 -$11 billion
FY 2013 -$2 billion
FY 2014 +$7 billion
FY 2015 +$6 billion
FY 2016 -$3 billion
FY 2017 -$17 billion
FY 2018 -$34 billion
FY 2019 -$55 billion
FY 2020 -$73 billion
FY 2010-2020 Total -$230 billion
—-
Obama Administration FY 2011 Budget
February 2010
FY 2010 -$33.9 billion
FY 2011 -$19.1 billion
FY 2012 -$2.0 billion
FY 2013 +$7.6 billion
FY 2014 +10.7 billion
FY 2015 +$13.8 billion
—-
SSA Combined Trust Funds Cash Flow
comparison between SSA May 2009 report
and latest CBO and OMB projections
………………CBO…………..OMB……
FY 2010 -$44.4 billion -$50.3 billion
FY 2011 -$50.4 billion -$49.5 billion
FY 2012 -$48.4 billion -$33.4 billion
FY 2013 -$37.7 billion -$28.1 billion
FY 2014 -$15.7 billion -$11.4 billion
FY 2015 +$0.7 billion +$8.5 billion
FY 2016 +$4.8 billion
FY 2017 +$18.0 billion
FY 2018 +$28.2 billion
—-
I found Bruce Wilder’s blog is now at
http://thecomingperfectstorm.blogspot.com/
The old address given above (w/o “the”) used to be his blog, found it in the list of blogs I follow.