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If you are a conservative, you have no memory. Jonathan Turley

I learned a long time ago at much personal expense, that there is a personality type which function within reality, but only in the present moment of reality.  That is, what ever I say now has no bearing or relationship to what I just said or what I am about to say.  I will deny what you thought you heard.  If that is not enough, I will qualify it but…it has no bearing on what you believe I am saying.  You can just never know and ultimately have no conversation that resolves.

It’s as if they can time shift.  You can just never know and ultimately have no conversation that resolves.

That is what I believe we are witnessing today with the republican party.  They are not protecting Trump.  They are protecting an image they believe in at the moment fully dependent on what they believe is the reality which as I noted is only for the fleeting moment.

Being today was the day for debate club at the House Judiciary committee, and one Jonathan Turley is the republican witness as to what is or is not impeachment, I thought it is only proper preparation to have gone back and see what he has stated in the past.  Sadly, it is apparent that none of the Democratic members did this simple activity in preparation.

I give you Mr. Turley on with Keith Olbermann during the Bush years regarding torture and surveillance the constitution and presidential power.

This clip is most telling as to his sincerity testifying today.

 

But, here he is regarding the president’s ability to continue a war even if congress cuts off funds.  It’s a constitutional question in which he defends congress.  When asked, he responded: No.  It’s as simple as that.

Last and more relevant for today’s presentation, here is Mr Turley regarding Bush regarding the Constitution as just a piece of paper.  That is, Bush thumbing his nose at the law.   And note how Mr. Turley lists those in the administration that have run into legal conflicts.

“First of all, this president and his theory of power, is now I think so extreme, that its unprecedented.  He believes that he has the inherent authority to violate federal law.  He has said that…that he could in some circumstances order federal officials to violate federal law…Frankly I’m not to sure what he thought he was swearing to when he took the oath to uphold the constitution and our laws.  I’ve never seen a president who is so uncomfortable in his constitutional skin. ”

“Unfortunately, civil liberties don’t swing back like other issues.  Civil liberties is a very precious commodity.  When you lose them, it tends to run out of your hand like sand. Its hard to get it back, and that’s one of the dangers here.  That presidents, when they acquire power rarely return it to the people.   And so, we have to be very concerned.  This country is changing in a very significant way…We’re really at a point where the president is arguing about his own presidential power in ways that are the antithesis of that constitution and the values that it contains.”

Today he’s defending all that he protested against while on with Keith Olbermann.  No memory.  Only in the moment.  What I say now has no relation to what I said or what I’m about to say.

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What’s behind the subprime consumer loan implosion

Via Naked Capitalism  comes an explanation of what income inequality looks like in the US.  It stands in contrast to the Bloomberg article pointed to by Yves in her introduction.  I pulled the quotes with a non-economic person in mind.

THE WOLF STREET REPORT    transcript of podcast by Wolf Richter.

Subprime doesn’t mean poor or uneducated. Subprime means having a credit score below 620…
(Dan here) For example:
Aggressive subprime lending went into overdrive starting in 2014, and private equity firms piled into it, and smaller banks went after it, and it’s now coming home to roost  . . .
This includes healthcare costs, and it includes food costs, and apartment rentals, and cars have gotten a lot more expensive, and the like. But cars and apartments and cellphones have gotten a lot better too, and these quality improvements are added to the price. Think of the move over the years from a four-speed automatic transmission to an eight-speed automatic, or from two airbags to 10 airbags, or from a basic cellphone to a smartphone . . .
But for figuring the inflation measure of the Consumer Price Index, the costs of these quality improvements are removed from the index. This is the principle of hedonic quality adjustments . . .

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The Current State of the U.S. Dairy Industry

The Current State of the U.S. Dairy Industry

 I had to endure a discussion of the plight of American dairy farmers where Trump’s trade policies were somehow to blame. Stephanie Mercier confirmed some of the facts:

According to data reported by the National Farmers Union (NFU), the average dairy farm has shown a positive net income only once in the last decade, in 2014. In 2018, the average value of production exceeded the total cost of producing each hundredweight of milk in only one state, California, and nationwide, dairy farmers lost an average of $3.21 per hundredweight of milk produced. For 2019, total dairy production is expected to increase modestly over 2018, by less than 0.3 percent, and the average all-milk price is expected to increase as well, from $16.26/cwt in 2018 to $18.40/cwt. While the projected 13 percent increase in price for this year is welcome news for U.S. dairy farmers, that level still falls below the average total cost of production for farmers in most of the country.

But she had a very different take on the international issues involved:

This situation is largely a result of a persistent mismatch between the supply of dairy products and the demand for them, and is not isolated to the U.S. domestic market. Within the European Union, low dairy prices prompted some Italian, German, and Belgian producers to dump their product in protest during the summer of 2019. The combination of low prices and a severe drought in 2018 has pushed many Australian dairy operations to the brink of collapse. The farmer-owned Fonterra dairy cooperative, serving both Australia and New Zealand farmers, has seen its share values decline by about 50 percent since the beginning of 2018.

Look – we can criticize Trump’s stupid trade war for a lot of things but low milk prices are being driven by other factors:

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The Case for Carbon Taxes, Part I:  Political Subversion

 

by Eric Kramer

The Case for Carbon Taxes, Part I:  Political Subversion

Economists support carbon taxes on efficiency grounds.  By putting a price on carbon dioxide emissions, a carbon tax creates a strong incentive for people reduce their carbon footprint.  They can do this by switching to clean technologies or simply by reducing their use of fossil fuels – by driving less or turning down the air conditioning, for example.  Other policies can also be used to get people to reduce their use of fossil fuels, but carbon taxes allow people to reduce their carbon footprint in the least costly way.  Given that decarbonizing the economy will be a large and expensive undertaking, keeping costs as low as possible is clearly important.

Economists have made some headway persuading policymakers that carbon taxes should be a central part of any plan to limit global warming, but many people remain quite skeptical.  The most important doubts revolve around the political sustainability of carbon taxes.  Carbon taxes appear to be politically vulnerable because they directly and visibly lead to higher energy prices, and spending on energy is a major item in the budgets of most families.

I will discuss the politics of carbon taxes in two posts.  In this post I make a simple political argument for carbon taxes:  carbon taxes are clearly constitutional and can function effectively even if most Republicans remain opposed to action on climate change and gain control of the executive branch.  In contrast, the main alternatives to carbon taxes, mandates and subsidies, are highly vulnerable to political subversion by Congress and conservative courts and regulators.  This point alone is sufficient to justify including a carbon tax in any plan to avoid the worst effects of climate change.  In the next post I will argue that carbon taxes with per capita rebates will tend to generate their own support over time as people make investments that only pay off if the tax remains in place.  This does not ensure that a carbon tax will be politically sustainable – any ambitious climate policy will remain controversial for years – but it gives policymakers and activists another reason to support carbon taxation.

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Bicycles and Wine Tariffs

Bicycles and Wine Tariffs

Jeffrey Frankel has a must read blog over at Econbrowser:

The “bicycle theory” used to be a metaphor for international trade policy. Just as standing still on a bicycle is not an option — one has to keep moving forward or else the bike will fall over – so it was said that international trade negotiators must continue to engage in successive rounds of liberalization, or else the open global trading system would be pulled down by protectionist interests. I don’t know if the theory was ever right. (And, to be honest, I don’t entirely understand why forward movement keeps a bicycle from falling over.) But if we had stood still on trade policy over the last three years we would be a lot better off than where we are now.

It may be cold in New York City but after all that Thanksgiving wine, maybe a bicycle ride is in order. Just after that infamous phone call with the President of Ukraine, Trump opined on trade policy regarding wine:

Mr Trump, who is teetotal, said: “I’ve always liked American wines better than French wines. Even though I don’t drink wine. I just like the way they look.” The US is the world’s largest consumer of wine and the largest import market, with France consistently among the top origin countries for imported wine.

He was angry over something called the digital sales tax but here is a more related reason for this weird tweet:

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Live-blogging the End of the Republic

Live-blogging the End of the Republic

The title of this piece is increasingly my feeling about the times we are living in. Almost everywhere it has been implemented, the Madisonian system has ultimately failed, ending in presidential autocracy. All of the tools are now in place for the US to fail as well. If Trump doesn’t succeed in a second term, then the Sulla or Caesar who ends our republican experiment is alive now and has learned the necessary lessons. All that is missing is their competent and strategic implementation.

The bottom line is: provided a President has 34 Senators and a majority of the Supreme Court who will back him, he can do anything he wants. And I’m not even sure the Supreme Court majority is necessary. If Trump were to defy the Supreme Court about, e.g., his tax returns, who exactly is going to force him to obey?

I’ve made this point before, and Matt Yglesias immediately picked up on it. A couple of days ago, Chris Hayes came around to the same conclusion:

One way to understand the constitutional grant of powers to the president is that the president can do *literally* whatever he wants as long as he can hold onto the votes of 35 [sic*] senators in his party.

* Greater than 1/3rd = 34. Math, bitches!

Meanwhile conservative columnist Rich Lowry has flat-out stated, in essence, that he would prefer a Trump who tramples on the Constitution but appoints judges who will outlaw abortion to a presidential candidate who believes in the rule of law.  Which proves, as my Sibling Unit pointed out to me, David Frum‘s point that “If conservatives become convinced that they can not win democratically, they will not abandon conservatism. The will reject democracy.”

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A few thoughts while you are digesting Thanksgiving dinner

A few thoughts while you are digesting Thanksgiving dinner

There was a bunch of data released Wednesday, while yours truly was on the road along with everybody else. So here are a couple of thoughts for you as you sit there with your loosened belt figuring out what leftovers you’re going to be eating for the next few days . . .

Initial jobless claims declined back to their recent baseline last week, so the four week average declined slightly, further back into its normal range. The YoY% change averaged monthly also is lower:

And the four week average of continuing claims, while slightly higher YoY, is also well below the point where it would be a serious concern:

Bottom line: the economy is simply not going to be in recession this quarter.

Corporate profits for the third quarter were also released as part of the second estimate of Q3 GDP. Depending on whether you include inventories and capital consumption or not, they either slightly increased or decreased:

Adjusted by unit labor costs, they are either slightly (-3.3%) or significantly (-13.8%) below their peak for this expansion:

Before the last producer-led recession in 2001, both were off more than -15%:

This is a mixed signal for the economy in the second half of next year.

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Why Did Oil Prices Plunge This Black Friday?

Why Did Oil Prices Plunge This Black Friday?

Nothing to do with the American super big shopping day after Thanksgiving, but several items, some of which may reverse themselves.  As it is, it was a pretty big drop, nearly 5 percent for the day for both West Texas and Brent crude, with the latter now just above $60 per barrel.

The big headline is the resignation of Iraqi prime minister Adil Abdul Mahdi. The immediate trigger of that was that it was demanded by Iraq’s most influential cleric, Ali Sistani.  This came after weeks of mounting protests in Iraq against the government, both in Baghdad, but also among Shia in the South, with Sistani a Shia cleric. He is based in Najaf, the Shia holy city where Imam Ali is buried, the son-in-law of the Prrophet Muhammed.  Protestors had just torched an Iranian consulate there. The supposed reason this might justify a fall in oil prices is that it is thought that the protests have reduced exports from Iraq, which is currently the second largest oil exporter in OPEC. I do  not know if that will result, but if indeed this leads to Iraqi oil exports rising, then indeed a price drop is justified.

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The consumer is still alright, November 2019 edition

by New Deal democrat

The consumer is still alright, November 2019 edition

I have a new post up at Seeking Alpha.

A few months ago I took a look at the order in which I would expect the dominoes to fall if there were to be a consumer-led recession. One more domino has fallen, but several important ones are still upright.

As usual, clicking over and reading puts a couple of pennies in my pocket, and should be educational for you.

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