Stop Me Before I Vote Again

... why the Democrats are the prison-house of constituencies. From the Huffington Post:

The Service Employees International Union (SEIU) is effectively shutting down its Wal-Mart watchdog group in order move its focus to... legislative priorities....

"We set up Wal-Mart Watch to highlight the issues facing American workers as seen through the largest employer... Then we win this election, and a bigger voice than ours says, 'We have an economy that doesn't work for Main Street, it works for Wall Street, and we are going to do something about it.'"

Indeed, the move by the SEIU underscores how much the labor community anticipates a new political landscape under the upcoming Obama administration -- one in which it can score legislative victories as opposed to fighting outside-government battles.

Posted by Michael J. Smith on Thursday November 20 09:07 AM | Permalink | Comments (1)

"The main thing to realize is that for the time being we really are in an alternative universe, in which nothing would be more dangerous than an attempt by policy makers to play it safe"

In the blog post from which this morbidly panicked line was culled, there is also this:

[Goldman Sachs] then turn to an estimate of likely changes in the “private sector balance” — the difference between private sector saving and private sector investment. And it’s stunning:

The GS house price forecast combined with current equity prices and credit spreads implies a rise in the private sector balance from +1% of GDP in the second quarter of 2008 to +10% in the fourth quarter of 2009 -- a rise of 9 percentage points, or 6 points at an annual rate.

Yes, Virginia, we're headed down a continent-wide rabbit hole -- unless, that is, our dear ole Uncle Sawbuck, the stricken cyclops of planet Earth, takes some super-bad, mighty bold and bodacious countermeasures, and takes 'em pronto.

Again St Krug:

"What’s the answer? Huge fiscal stimulus, to fill the hole. More aggressive GSE lending. Maybe a “pre-commitment” by the Fed to keep rates low for an extended period -- that’s a more genteel version of my “credibly promise to be irresponsible.” And maybe large-scale purchases of risky assets."

Note on the relative meaning of "huge fiscal stimulus": to Paul it's prolly on the order of 800 bills in increased fedral deficit. Which is piffle, a mere pigeon drop. It might-oughta take us, on highest estimate, and with a tail wind from Asia, if we're extra lucky, and all hits just right -- about halfway across the canyon.

Posted by Owen Paine on Monday November 17 06:42 PM | Permalink | Comments (3)

Sign of the times:

Sacked worker kills Indian-American CEO in US
Press Trust of India
Saturday, November 15, 2008 (Santa Clara)

An Indian-American CEO of a semiconductor company was shot dead along with two other persons by a laid-off employee of the firm in northern California, police said.

Sid Agrawal, the chief executive officer of SiPort Inc, the company's vice president of operations Brian Pugh and an unidentified woman was killed when several rounds were fired on the premises of the firm in Santa Clara on Friday.

Police said investigators are searching for Jing Hua Wu, 47, in connection with the shooting.

Jing ... had recently been laid off from the company....

Agrawal ... held a degree in Electrical Engineering from IIT-Kanpur, an MS degree from Southern Illinois University and an MBA from the University of Chicago.

Posted by Michael J. Smith on Saturday November 15 06:05 PM | Permalink | Comments (2)

Looks like the Hope-'N-Change Team may be turning into the Rope-'N-Chains Team. The New York Times reports:

[A]s Mr. Obama moves closer to assuming responsibility for Guantánamo, his pledge to close the detention center is bringing to the fore thorny questions [including] a matter that people with ties to the Obama transition team say is worrying them most: What if some detainees are acquitted or cannot be prosecuted at all?

[S]ome liberals are arguing that to deal realistically with terrorism, the new administration should seek Congressional authority for preventive detention of terrorism suspects ... even if they cannot be successfully prosecuted.

“You can’t be a purist and say there’s never any circumstance in which a democratic society can preventively detain someone,” said one civil liberties lawyer... who has been a critic of the Bush administration. ...Whether the Obama administration should push for a preventive detention law has inspired “a very hot and serious debate,” said Ken Gude, a national security scholar at the liberal Center for American Progress, adding, “I’ve had conversations with progressives who think it is a good idea and conservatives who think it’s a terrible idea.” ...[A] move by Mr. Obama to seek explicit authorization for indefinite detention without trial would be seen by some of his supporters as a betrayal.

Benjamin Wittes, a fellow at the Brookings Institution, [who has] argued... that Americans needed to cross a “psychological Rubicon” and accept the idea that preventive detention was a necessary tool for fighting terrorism.

“I’m afraid of people getting released in the name of human rights and doing terrible things,” Mr. Wittes said in an interview....

In the end, the Obama administration may conclude that it is simply not feasible to seek a new preventive detention measure. Doing so could portray the new administration as following in the footsteps of President Bush....

The change we can believe in, as expected, is merely a change of face, as an Obamaphile friend said with such enthusiasm on Election Day.

Posted by Michael J. Smith on Saturday November 15 11:31 AM | Permalink | Comments (2)

It's starting to look like loathesome, porcine Larry Summers is out of the running for Obama's treasury secretary. Wage-earners everywhere can breathe a sigh of relief -- but breathe it quick, before you find out who Obie will pick.

Summers is out, it appears, not because he's a fanatical advocate of the unfettered dictatorship of finance capital, but because he's fallen foul of the Free Alterations Feminist (FAF) movement:

Intense backlash from women’s groups may have pushed former Clinton Treasury Secretary Larry Summers off the short-list to lead Treasury for President-elect Barack Obama....

The Summers backlash rises out of a controversial 2005 comment he made as president of Harvard University that innate differences between men and women might be one reason fewer women succeed in science and math careers.

One one of my lefty mailing lists, a comrade sourly noted:

For what it's worth...here's my favorite paragraph:

"Kim Gandy, president of the National Organization for Women, said there are other reasons to oppose Summers, citing his involvement in Clinton-era policies that many say contributed to the current economic woes."

Three cheers for Kim Gandy. I really appreciate the fact that NOW takes an expansive view of its mandate.

Posted by Michael J. Smith on Friday November 14 04:49 PM | Permalink | Comments (1)

I happened to run into my old friend Annie today -- Annie, the old Lefty I've written about before, who can't get away from the Democratic Party even though she knows better. I couldn't resist teasing Annie about the number of raddled old Clintonites with whom Mr Hope And Change is surrounding himself. (Annie loathed Bill Clinton -- loathed him so much that she actually voted for Nader in 2000, though she has since repented, in sackcloth and ashes, for her sin.)

"Hey Annie. Looks like what's old is new again. Clinton's third term!"

She looked at me sourly. But she's game. "After eight years of Bush," she observed, "Clinton doesn't seem so bad."

Now there, if you like, is as beautiful an illustration of the ratchet effect as you could hope to find. The two parties' well-practiced collusive pas de deux has got her giving thanks now for things she despised eight years ago -- things that she correctly saw as deeply reactionary and detestable.

So it goes. By conceding the legitimacy of Reagan and Bush I's revanche, Clinton prepared the ground for a further revanche under Bush II, who took the ball and ran with it it so far that he makes Clintonism in retrospect -- well, in blurry, amnesiac retrospect, anyway -- look comparatively benign.

This phenomenon is at the heart of the American two-party system. The only thing that ever interrupts or arrests it -- much less reverses it -- is those blessed outbreaks of near-insurrection: the Populist upsurge, the Thirties, the Sixties.

Man, are we ever overdue for another one.

Posted by Michael J. Smith on Friday November 14 03:22 PM | Permalink | Comments (0)

The Note says it all:

Thirty-one of the 47 people so far named [by Obama] to transition or staff posts have ties to the Clinton administration, including all but one of the members of his 12-person Transition Advisory Board and both of his White House staff choices.

Posted by Michael J. Smith on Friday November 14 11:02 AM | Permalink | Comments (1)

Here's a fact: the ratio of national debt to gross domestic product was 1.2 to 1 in 1946. Today its 0.5 to one.

Citizen suckers, hear this: we could run up cumulative federal deficits in excess of 10 trillion dollars over the next four years, and be fiscally poised for the future, just like we were at the dawn of the cold war.

$10 trillion... that's what Obama could borrow in his first term, and end up making us all better off than we were when he arrived at the White House.

So... what to spend it on?

As some Chinese red mandarin was quoted in the press recently -- we gotta spend it "fast" and with "a heavy hand".

But here's the real point: the best and fastest first shot would be not to spend it at all, but to rebate it: send a check for last years SSI taxes to every payrolled geef and geeffette in this country, and then declare a holiday from the SSI tax till further notice.

It's ours, we earned it, so let us spend it -- or pay down debt, or whatever. Just plain dispose of it any way we want.

Then next we might think of nationalizing the HMO's, like Uncle is already doing with all our big-boy high-finance outfits. Replicate the Paulson/Bernanke/Ribbentrop bailout pact -- but not to the benefit of the silk pajama crowd. Nope. For us -- by socializing the private health insurance industry. Call it single payer by other means.

Once it's partly ours -- get every American signed up to a private plan, and have Uncle pay the first $2000k per head, as social coverage of... well... personal coverage. That oughta get the ball rolling.

Note: This rebate plan is unlike the balance-sheet plugs approach, AKA "bail the big bums out" -- or as Obama all too benignly calls it, "fixing the financial plumbing." Don't matter if it's for the banks, or the insurance companies -- balance sheet injections only benefit us jobblers directly if the pipes leak. Otherwise we gotta pray for lots of so-called wealth effects to lift aggregate domestic expenditures.

Note: anticipating that 5% of upper-crust wealth increase will get spent -- not lent-- is prolly high ...that's as far as wealth effects go.

So if the rich guys behind these faltering hi-fi firms feel restored to former wealth levels, by a trillion or two in bail bonds, then they'll spend maybe ...maybe... maybe... 100 billion more than otherwise.

Not a very high yield, eh? And so far as the "plumbing" goes -- as far as lending goes -- hey, the state of defaults makes lending increases very problematic. The bastards are unlikely to turn the taps enough, any time soon.

Whatever voodoo hoodoo might occur as a result of the series of pain-relieving Paulson corporate injections, a direct rebate to wageling households, of taxes extracted to begin with right out of their own work earnings, will hit the real economy -- the one that makes real products -- much harder. And more importantly, resurrect the job force levels much much faster. It's a virtual WPA, folks -- bootstrap macro at its finest. In fact, if the household expenditure wave is big enough, in about two or three years, when we finally have the plans for our green lean and clean sustainable production machine, we oughta see such hyper-employment conditions, and such a real wage spiral under way, and such a production capacity squeeze that... it'll knock the pips off the dice in Las Vegas.

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Next post:

General product inflation is ripe for a harness. Enter the markup cap-and-trade system -- to end price pollution in our time.

Posted by Owen Paine on Thursday November 13 10:02 PM | Permalink | Comments (2)

Small-boat sailors know that they should always stay well clear of large vessels. There's a very dangerous suction that a container ship, or a tanker, creates, as its enormous hull shoves through the water -- a suction that can draw a small craft right up against the behemoth's hull, with predictably unpleasant consequences.

There is a similar phenomenon in politics. It's one of the reasons I disapprove of voting -- much less working -- for Democrats. The well-meaning pwog, in his or her little coracle or catboat, ventures out into the harbor. He falls into the suction of a mighty steel-hulled commercial ship, like the SS Obama. He is drawn closer, and closer. He collides with its cold, unyielding adamantine sides. His fragile craft is smashed, and he is pulled under, and drowned -- drowned intellectually, and politically. Things that would have had him baying at the moon, if Bush had done them, he now finds excuses for -- when a Democrat does them.

I call it Fanship Undertow.

I've seen it time and time again. There's a lot of it going around just now. An occasional correspondent of mine -- let's call her Sadie -- recently wrote:

Rahm's an interesting choice- I know that there's some concern about him being a partisan figure but he's (in my view) not facilitating a partisan role. His main objective is to keep the ship in order and his experience in the Clinton administration would indicate that he knows how to navigate the waters (so to speak). Even more importantly he's ultimately pushing Obama's agenda....

But she has given her heart to Obama. And a heart once given is not easily taken back. So the Fanship Undertow has gripped her. Her good, well-meaning heart has been drawn under. Will she survive? I hope so. How long can she hold her breath?

Two things strike me about her ingenious, hopeful email:

1) She has become a Crackpot Realist. All of a sudden this youthful insurgent has come to value order -- experience -- knowing how to "navigate the waters."

2) She is still delirious with giddy, utterly unfounded hope. Rahm will "push Obama's agenda." From what we know about Rahm -- and we know a lot -- does he seem like the sort of guy who would push anybody's agenda but his own?

Posted by Michael J. Smith on Thursday November 13 07:36 PM | Permalink | Comments (1)

Time to build ten thousand digital shrines to this new world sage, Bill Vickrey. In spite of the disreputable distinction of winning the economics pseudo-Nobel, on the three big battle fronts of the global klass krieg -- jobs, inflation, and deficits -- Doctor Bill was peerlessly fierce and fearless.

In particular, he was a good deal bolder than, for example, that impish Mephisto, Harvard Yard's own Mitt Romney advisor, Greg Mankiw. Greg tut-tuttingly quotes Vickrey:

Deficits are considered to represent sinful profligate spending at the expense of future generations who will be left with a smaller endowment of invested capital. This fallacy seems to stem from a false analogy to borrowing by individuals. Current reality is almost the exact opposite. Deficits add to the net disposable income of individuals, to the extent that government disbursements that constitute income to recipients exceed that abstracted from disposable income in taxes, fees, and other charges. This added purchasing power, when spent, provides markets for private production, inducing producers to invest in additional plant capacity, which will form part of the real heritage left to the future. This is in addition to whatever public investment takes place in infrastructure, education, research, and the like. Larger deficits, sufficient to recycle savings out of a growing gross domestic product (GDP) in excess of what can be recycled by profit-seeking private investment, are not an economic sin but an economic necessity....

[W]hat I would like to see is a budget deficit of about $500 billion averaging for the next five years, until we get from 5 percent unemployment down to 1 percent unemployment.

Was Vickrey a kook? Advocating $500 billion deficits in 1996 certainly sounds kooky. Correcting for inflation and real growth, that would be about $800 billion today.But no, he was not a kook: He was one of the last hard-core Keynesians, far more Keynesian than so-called new Keynesians like me....

Now Wild Bill's schemes might not pass a thorough audit, at least as laid out in pop lingo here; but as cautiously glossed here, the full force of his vision brought down to us from the mountaintop is vastly understated.

Posted by Owen Paine on Thursday November 13 08:47 AM | Permalink | Comments (5)