August 14, 2013 archive

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Egypt: State of Emergency

Violent clashes broke out with Muslim Brotherhood supporters and government security forces in Egypt have left scores dead and wounded on both sides. A month long state of emergency and a curfew has been declared.

CAIRO – Egypt descended into a chaotic bloodbath – and another political crisis – Wednesday after security forces backed by bulldozers moved into opposition protest camps set up by supporters of ousted president Mohammed Morsi, sparking deadly violence.

At least 149 people were killed and 1,403 injured, the country’s health ministry said, but the toll looked certain to rise as unrest spread from Cairo to other parts of the country.

It is being reporting that interim Vice President Mohamed ElBaradei has resigned in protest over the crack down by the military and that at least two journalists have been killed.

Here is The Guardian‘s quick summary of events since last might:

Scores of people have been killed after the Egyptian security forces moved to clear two protest camps in Cairo. Egypt’s official news agency put the death toll at 149, although the chaotic nature of the crackdown made accurate reporting difficult. Violence began after security forces used bulldozers to dismantle camps established by supporters of the ousted Egyptian president Mohamed Morsi.

Troops fired teargas and live rounds, quickly evacuating the smaller camp near Cairo University. But Morsi supporters held strong at the larger encampment, at the Rabaa al-Adawiya mosque in east Cairo. The dawn raids came after two weeks of warnings to protesters to evacuate.

The Egyptian interim government has declared a month-long state of emergency across the country. It later announced a curfew, beginning this evening at 7pm local time and lasting until 6am. The curfew is in place in Cairo and ten other provinces including Alexandria and Suez, the government said. It will last for one month.

Egypt’s vice-president, Mohamed El-Baradei, resigned in protest against the crackdown. He said there were peaceful options for ending the political crisis. Witnesses at Rabaa al-Adawiya dozens of bodies, while photographs showed more than 40 dead laid out on the ground. There were reports of snipers firing on crowds of people. The interior ministry denied live rounds had been used despite the casualties. Two journalists, including a British cameraman for Sky News, were among the dead.

The international community has denounced the violence. The US said it “strongly condemns the use of violence against protesters” and criticised the imposition of a state of emergency. UK foreign secretary William Hague said he was “deeply concerned at the escalating violence”. “I condemn the use of force in clearing protests and call on the security forces to act with restraint,” he said.

You can follow the live up dates from The Guardian here

On this morning’s Democracy Now!, Amy Goodman and Cairo correspondent for The Independent Alastair Beach reported on the crisis.

Cartnoon

On This Day In History August 14

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

August 14 is the 226th day of the year (227th in leap years) in the Gregorian calendar. There are 139 days remaining until the end of the year.

On this day in 1935, President Franklin D. Roosevelt signed the Social Security Act into law.

On this day in 1935, President Franklin D. Roosevelt signs into law the Social Security Act. Press photographers snapped pictures as FDR, flanked by ranking members of Congress, signed into law the historic act, which guaranteed an income for the unemployed and retirees. FDR commended Congress for what he considered to be a “patriotic” act.

U.S. Social Security is a social insurance program that is funded through dedicated payroll taxes called Federal Insurance Contributions Act (FICA). Tax deposits are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund.

The main part of the program is sometimes abbreviated OASDI (Old Age, Survivors, and Disability Insurance) or RSDI (Retirement, Survivors, and Disability Insurance). When initially signed into law by President Franklin D. Roosevelt in 1935 as part of his New Deal, the term Social Security covered unemployment insurance as well. The term, in everyday speech, is used to refer only to the benefits for retirement, disability, survivorship, and death, which are the four main benefits provided by traditional private-sector pension plans. In 2004 the U.S. Social Security system paid out almost $500 billion in benefits.

By dollars paid, the U.S. Social Security program is the largest government program in the world and the single greatest expenditure in the federal budget, with 20.8% for social security, compared to 20.5% for discretionary defense and 20.1% for Medicare/Medicaid. Social Security is currently the largest social insurance program in the U.S., constituting 37% of government expenditure and 7% of the gross domestic product and is currently estimated to keep roughly 40% of all Americans age 65 or older out of poverty. The Social Security Administration is headquartered in Woodlawn, Maryland, just to the west of Baltimore.

Social Security privatization became a major political issue for more than three decades during the presidencies of Gerald Ford, Jimmy Carter, Ronald Reagan, George H. W. Bush, Bill Clinton, and George W. Bush.

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Late Night Karaoke

Despite the Promise, Still No Tranparency on Surveillance

Cross posted from The Stars Hollow Gazette

During his press conference on Friday, President Barack Obama admitted, without giving him credit, that the reason the conversation on the NSA is now taking place is thanks to Edward Snowden.

“The leaks triggered a much more rapid and passionate response than would have been the case if I had simply appointed this review board,” Obama said, while adding, “I actually think we would have gotten to the same place-and we would have done so without putting at risk our national security.”

With public opinion rapidly eroding over the surveillance, the president still refused to concede that the program was abused:

“America is not interested in spying on ordinary people,” Obama said. The surveillance programs, he said, were valuable and “should be preserved.” The flaw, if there was one, he said, lay in his assumption that the public would trust that the “checks and balances” in place between the administration, Congress, and the courts was enough to secure personal freedom. Instead, he said, after Snowden’s revelations, “I think people have questions about this program.”

While Obama promised a to create an an independent advisory group made up of “outside experts” who will review controversial surveillance programs, it’s pretty clear that [the group won’t exactly be completely independent of the NSA, as Marcy Wheeler reports:

In the memo Obama just released (pdf) ordering James Clapper to form such a committee, those words “outside” and “independent” disappear entirely.

   I believe it is important to take stock of how these technological advances alter the environment in which we conduct our intelligence mission. To this end, by the authority vested in me as President by the Constitution and the laws of the United States of America, I am directing you to establish a Review Group on Intelligence and Communications Technologies (Review Group).

   The Review Group will assess whether, in light of advancements in communications technologies, the United States employs its technical collection capabilities in a manner that optimally protects our national security and advances our foreign policy while appropriately accounting for other policy considerations, such as the risk of unauthorized disclosure and our need to maintain the public trust. Within 60 days of its establishment, the Review Group will brief their interim findings to me through the Director of National Intelligence (DNI), and the Review Group will provide a final report and recommendations to me through the DNI no later than December 15, 2013. [my emphasis]

And neither Obama nor the Intelligence Committees get to hear from this Group themselves. It all goes through James Clapper.

And the other group members

President Obama and Director Clapper may solicit advice from notable figures in the technology industry; the president reportedly met with several leaders last Thursday, including Apple CEO Tim Cook and Google VP Vint Cerf. But with both Apple and Google implicated in some level of cooperation with the government under PRISM, the government may need to solicit input from a broader coalition of stakeholders.

So, Obama is putting the liar in charge, asking advice from those who willingly aided and abetted the spying and isn’t going to make the report public but expects this will win over public opinion. Yeah, right. If the public falls for this malarkey, I have a bridge to sell, too.

Federal Judge Orders Outside Oversight of NYPD

Cross posted from The Stars Hollow Gazette

U.S. District Court Judge Shira Scheindlin handed down her ruling on the New York City Police Department’s Stop and Frisk Policy. In her official summary, Judge Sheindlin found the policy unconstitutional calling it a “form of racial profiling’ and a violation of the Fourth and the Equal Protection Clause of the Fourteenth Amendments rights of minorities in New York City. From the official transcript:

In conclusion, I find that the City is liable for violating plaintiffs’ Fourth and Fourteenth Amendment rights. The City acted with deliberate indifference toward the NYPD’s practice of making unconstitutional stops and conducting unconstitutional frisks. Even if the City had not been deliberately indifferent, the NYPD’s unconstitutional practices were sufficiently widespread as to have the force of law. In addition, the City adopted a policy of indirect racial profiling by targeting racially defined groups for stops based on local crime suspect data. This has resulted in the disproportionate and discriminatory stopping of blacks and Hispanics in violation of the Equal Protection Clause. Both statistical and anecdotal evidence showed that minorities are indeed treated differently than whites. For example, once a stop is made, blacks and Hispanics are more likely to be subjected to the use of force than whites, despite the fact that whites are more likely to be found with weapons or contraband. I also conclude that the City’s highest officials have turned a blind eye to the evidence that officers are conducting stops in a racially discriminatory manner. In their zeal to defend a policy that they believe to be effective, they have willfully ignored overwhelming proof that the policy of targeting “the right people” is racially discriminatory and therefore violates the United States Constitution.

The ruling does not end the program. In a separate opinion, the judge ordered federal monitoring and, among other remedies, a pilot program in which officers in at least five precincts across the city will wear cameras on their bodies to record street encounters.

Naturally, Mayor Michael Bloomberg and Police Commissioner Ray Kelley reacted angrily claiming that the city did not get a fair trail:

“The judge conveyed a disturbing disregard for the good intentions of our officers, who form the most diverse police department in the US,” he said during a press conference Monday. It was a “dangerous” decision by the judge, Bloomberg added, while claiming that the policy had helped bring down crime in New York.

Kelly was likewise forthright in his condemnation of the judge’s ruling, describing it as “disturbing” and “highly offensive”. He rejected the claim that his officers had engaged in racial profiling. “This is simply, recklessly untrue,” he said, though he added that he had not yet read the ruling because he had spent the morning having dental work done.

It’s unknown of this ruling will effect President Barack Obama’s high opinion of Comm. Kelley and take e him out of contention for the head of Homeland Security.

The mayor vowed to appeal but he will be out of office at midnight on December 31 of this year. Hopefully the new mayor will have drop the appeal and work harder to protect the rights of NYC’s minority residents and their safety.

The best line of Judge Scheindlin’s ruling is her last one:

” I conclude with a particularly apt quote: “The idea of universal suspicion without individual evidence is what Americans find abhorrent and what black men in America must constantly fight. It is pervasive in policing policies – like stop-and-frisk, and . . . neighborhood watch regardless of the collateral damage done to the majority of innocents. It’s like burning down a house to rid it of mice.”

The past is never dead. It’s not even past.

Rajan Calls Krugman "Paranoid" for Criticizing Reinhart and Rogoff’s Research

By William K. Black, New Economic Perspectives

Posted on August 13, 2013

The original feud was most famously between Stiglitz and Rogoff.  Stiglitz, who led the movement at the World Bank to throw off its support for austerity, memorably claimed that IMF was staffed with “third rate” economists.  Rogoff famously blasted Stiglitz in a July 2, 2002, “open letter” (only months after Stiglitz was made a Laureate) that, inter alia, referred to him as a “loose cannon” who had “slandered” the IMF staff, slammed him for refusing to “admit to having been even slightly wrong about a major real world problem,” suggested he was so arrogant that he doubted that Paul Volcker was “really smart,” admitted that Stiglitz had a few ideas with which the IMF would “generally agree” because most of them were “old hat,” described Stiglitz’s most recent book as “long on innuendo and short on footnotes,” derided him as pretending to see himself “as a heroic whistleblower” when he was actually peddling “snake oil,” described Stiglitz views as being most analogous to Arthur Laffer’s “voodoo economics” (cleverly and deeply insulting on multiple levels), accused Stiglitz of lacking faith in markets and having faith in increasingly democratic governments (“you betray an unrelenting belief in the pervasiveness of market failures, and a staunch conviction that governments can and will make things better”), and ended with a wonderfully nasty “compliment” that compared Stiglitz to a famous scholar who suffers from often disabling mental illness (“Like your fellow Nobel Prize winner, John Nash, you have a ‘beautiful mind.’ As a policymaker, however, you were just a bit less impressive.”)  To top off this list, Rogoff told Stiglitz that he should pull his book from publication because it “slandered” a senior IMF official.

But those are only the gratuitous insults that Rogoff launched at Stiglitz.  His real attack was that Stiglitz had done incalculable damage to the developing world by criticizing the IMF and by opposing austerity as “battlefield medicine” for nations thrown into severe recessions.



Rogoff’s claim is that the “impulsive” Stiglitz’s criticism of the IMF during the Asian crisis endangered the economic recovery essential to “indigent people in Asia” because it could have reduced “confidence” in the IMF’s policy of imposing austerity as “battlefield medicine” for Nations that were in sharp recessions.



Having analogized Stiglitz to a murderous war criminal, Rogoff returns to his subthemes that Stiglitz is arrogant, a terrible economist, and personally responsible for the IMF’s failed austerity programs because Stiglitz “ignominiously sabotaged” those programs by criticizing them.  Rogoff asserts that the key to economic recovery from a recession is the appearance of what many economists now refer to as the “confidence fairy” and that austerity is the sole elixir that can summon the confidence fairy.  The confidence fairy only appears if one believes, really believes, in fairies so Stiglitz’s criticism of austerity was an act of sabotage that prevented the IMF from summoning the fairy.



Rogoff’s criticisms of Stiglitz and his (and the IMF’s) embrace of Greenspan, Rubin, and Summers’ assaults on financial regulation produced the criminogenic environments that led to the epidemics of control fraud that drove the global financial crisis and the Great Recession.  Reinhart and Rogoff (R&R) published a book claiming that government stimulus programs were counterproductive and that austerity should be the response.  They asserted in policy recommendations that there was a cliff when a nation’s debt reached 90% of its GDP that led to untenable interest expense burdens that served as a long-term brake on economic growth.  Their book was widely and favorably cited by proponents of austerity.  The proponents were able to restrict the size of the U.S. stimulus program, remove its vital “revenue sharing” component that could have prevented so much harm to states and communities and speeded the recovery, and force much of the stimulus to be in the form of relatively ineffective tax cuts for the wealthy.  The impact of R&R in the Eurozone was far worse.  It led to austerity programs that forced the Eurozone into a gratuitous recession and much of the periphery into a second Great Depression that continues.



There were strong, immediate criticisms of R&R’s claims about austerity and the asserted debt cliff, including those of my colleague Randy Wray that proved correct.  R&R failed to distinguish between nations with fully sovereign currencies and other nations and engaged in selective data that excluded nations and years that ran counter to their claimed findings.  Graduate students from two of the Nation’s few remaining heterodox economics departments (University of Massachusetts, Amherst and the University of Missouri-Kansas City) devastated the R&R book by examining its data – and the data R&R excluded.  The U. Mass graduate student won deserved fame for finding that R&R had made serious data entry errors that when corrected revealed that the purported 90% cliff was fictional and greatly reduced the relationship that R&R reported between increased debt and reduced growth.  Our graduate students demonstrated that if one were to infer causality from the data the direction of causality ran the opposite of what R&R claimed in their policy arguments.  Recessions led to high levels of debt, not the other way around.



For reasons that pass all understanding, Reinhart and Rogoff decided to claim that the U. Mass study had confirmed the R&R study that higher debt was associated with lower growth and to claim that they had never argued that there was a cliff or that high debt led to lower growth.  This was a strategy that had to fail in the modern era, which retained records of their statements and statements of policy makers about the cliff and about their claim that high debt led to low growth.  (Note that Rogoff’s 2002 letter lambasting Stiglitz made that same claim.)



Reinhart and Rogoff’s disingenuous response to the revelation of their many errors prompted Krugman to call them out on their claims.  Note that Reinhart and Rogoff’s response (immediately above) did not complain of Krugman’s (quite mild) comments one week before they wrote their April 26, 2013 response.



Reinhart and Rogoff reprised some of the tactics of Rogoff’s 2002 open letter attacking Stiglitz with an open letter (May 25, 2013) attacking Krugman for criticizing R&R.  The famous line in this iteration was: “it has been with deep disappointment that we have experienced your spectacularly uncivil behavior the past few weeks. You have attacked us in very personal terms, virtually non-stop….”



Just when one might have hoped that R&R’s flawed study, their disastrous support for austerity, and the feud would become a bit of arcane economic history, Rajan, on the way to India to lead its central bank, decided to rally around his IMF colleagues and to (by innuendo) accuse Krugman of being “paranoid.”



There are three obvious things to say in response to Rajan’s title and claim.  First, having read Rogoff’s open letter to Stiglitz, if Rajan wants to criticize a “paranoid,” “spectacularly uncivil” style of discourse containing myriad ad hominem attacks he has aimed his pen at the wrong economist.

Second, Krugman did not make ad hominem attacks on Rajan’s IMF colleagues.  Krugman made substantive criticisms of Reinhart and Rogoff’s arguments and practices.  One can debate the accuracy of his criticisms, but they were addressed to the merits of their research.

Third, Rajan makes an ad hominem attack on Krugman in this article.  Worse, he does it by innuendo, implying that Krugman is “paranoid.”  Rajan and Rogoff have reason to be personally upset with Krugman.  Krugman wrote a June 9, 2011 (2010) column that explained that Rajan and Rogoff gave spectacularly bad advice not only in favor of fiscal austerity, but raising interest rates, at a time when doing so would have been disastrous and was unsupported by any economic model.  Krugman quoted Keynes’ famous passage in which he noted that many economists viewed the willingness to inflict misery on others as the hallmark of a real economist.



Readers will likely ignore Rajan’s column because they will consider his attack on Krugman as an understandable, but disingenuous, payback for Krugman criticisms of the three former IMF economists.  That would be a shame, for Rajan’s article contains two enormously important admissions that my colleagues who specialize in macroeconomics have long emphasized.



Theoclassical economists did not simply assume away finance and money.  By assuming finance and money away they implicitly assumed away fraud and the essential regulatory cops on the beat.  Theoclassical economists pushed to eviscerate the institutional protections such as effective financial regulation and regulators that had helped ensure “that the financial plumbing worked in the background” and created the criminogenic environments that led to the epidemics of control fraud that drive our recurrent, intensifying crises.  Economists ignored the warnings and the policies recommended by another Laureate, George Akerlof.  Akerlof and Paul Romer wrote a classic article in 1993 entitled “Looting: The Economic Underworld of Bankruptcy for Profit.”



Neoclassical economists overwhelmingly continue to ignore Akerlof, Romer, and their former colleague Jim Pierce’s findings about control fraud and the findings of criminologists.  Rajan’s book about the crisis, for example, asserts that fraud played no material role in the crisis and describes a hypothetical scam that he says illustrates the (lawful) causes of the crisis.  The scam, however, requires two felonies and would fail as a scam.  Rajan does not understand the law or fraud.  The accounting control fraud “recipe,” by contrast, works and has great explanatory power.

Today on The Stars Hollow Gazette

Photobucket Pictures, Images and Photos

Our regular featured content-

These featured articles-

Follow us on Twitter @StarsHollowGzt

Write more and often.  This is an Open Thread.

The Stars Hollow Gazette