January 2014 archive

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A World Wide Bubble Economy

Transcript

Talking Troubled Turkey

Paul Krugman, The New York Times

JAN. 30, 2014

You may or may not have heard that there’s a big debate among economists about whether we face “secular stagnation.” What’s that? Well, one way to describe it is as a situation in which the amount people want to save exceeds the volume of investments worth making.

When that’s true, you have one of two outcomes. If investors are being cautious and prudent, we are collectively, in effect, trying to spend less than our income, and since my spending is your income and your spending is my income, the result is a persistent slump.

Alternatively, flailing investors – frustrated by low returns and desperate for yield – can delude themselves, pouring money into ill-conceived projects, be they subprime lending or capital flows to emerging markets. This can boost the economy for a while, but eventually investors face reality, the money dries up and pain follows.

If this is a good description of our situation, and I believe it is, we now have a world economy destined to seesaw between bubbles and depression. And that’s not an encouraging thought as we watch what looks like an emerging-markets bubble burst.

The larger point is that Turkey isn’t really the problem; neither are South Africa, Russia, Hungary, India, and whoever else is getting hit right now. The real problem is that the world’s wealthy economies – the United States, the euro area, and smaller players, too – have failed to deal with their own underlying weaknesses. Most obviously, faced with a private sector that wants to save too much and invest too little, we have pursued austerity policies that deepen the forces of depression. Worse yet, all indications are that, by allowing unemployment to fester, we’re depressing our long-run as well as short-run growth prospects, which will depress private investment even more.

So Turkey seems to be in serious trouble – and China, a vastly bigger player, is looking a bit shaky, too. But what makes these troubles scary is the underlying weakness of Western economies, a weakness made much worse by really, really bad policies.

(my emphasis- ek)

On This Day In History January 31

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.

January 31 is the 31st day of the year in the Gregorian calendar. There are 334 days remaining until the end of the year (335 in leap years).

On this day in 1865, The United States Congress passes the Thirteenth Amendment to the Constitution of the United States, abolishing slavery, submitting it to the states for ratification.

The Thirteenth Amendment to the United States Constitution officially abolished and continues to prohibit slavery and involuntary servitude, except as punishment for a crime. It was passed by the Senate on April 8, 1864, passed by the House on January 31, 1865, and adopted on December 6, 1865. On December 18, Secretary of State William H. Seward, in a proclamation, declared it to have been adopted. It was the first of the Reconstruction Amendments.

President Lincoln was concerned that the Emancipation Proclamation, which outlawed slavery in the ten Confederate states still in rebellion in 1863, would be seen as a temporary war measure, since it was based on his war powers and did not abolish slavery in the border states.

Text

Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Section 2. Congress shall have power to enforce this article by appropriate legislation

History

The first twelve amendments were adopted within fifteen years of the Constitution’s adoption. The first ten (the Bill of Rights) were adopted in 1791, the Eleventh Amendment in 1795 and the Twelfth Amendment in 1804. When the Thirteenth Amendment was proposed there had been no new amendments adopted in more than sixty years.

During the secession crisis, but prior to the outbreak of the Civil War, the majority of slavery-related bills had protected slavery. The United States had ceased slave importation and intervened militarily against the Atlantic slave trade, but had made few proposals to abolish domestic slavery, and only a small number to abolish the domestic slave trade. Representative John Quincy Adams had made a proposal in 1839, but there were no new proposals until December 14, 1863, when a bill to support an amendment to abolish slavery throughout the entire United States was introduced by Representative James Mitchell Ashley (Republican, Ohio). This was soon followed by a similar proposal made by Representative James F. Wilson(Republican, Iowa).

Eventually the Congress and the public began to take notice and a number of additional legislative proposals were brought forward. On January 11, 1864, Senator John B. Henderson of Missouri submitted a joint resolution for a constitutional amendment abolishing slavery. The abolition of slavery had historically been associated with Republicans, but Henderson was one of the War Democrats. The Senate Judiciary Committee, chaired by Lyman Trumbull (Republican, Illinois), became involved in merging different proposals for an amendment. On February 8 of that year, another Republican, Senator Charles Sumner (Radical Republican, Massachusetts), submitted a constitutional amendment to abolish slavery as well as guarantee equality. As the number of proposals and the extent of their scope began to grow, the Senate Judiciary Committee presented the Senate with an amendment proposal combining the drafts of Ashley, Wilson and Henderson.

Originally the amendment was co-authored and sponsored by Representatives James Mitchell Ashley (Republican, Ohio) and James F. Wilson (Republican, Iowa) and Senator John B. Henderson (Democrat, Missouri).

While the Senate did pass the amendment on April 8, 1864, by a vote of 38 to 6, the House declined to do so. After it was reintroduced by Representative James Mitchell Ashley, President Lincoln took an active role in working for its passage through the House by ensuring the amendment was added to the Republican Party platform for the upcoming Presidential elections. His efforts came to fruition when the House passed the bill on January 31, 1865, by a vote of 119 to 56. The Thirteenth Amendment’s archival copy bears an apparent Presidential signature, under the usual ones of the Speaker of the House and the President of the Senate, after the words “Approved February 1, 1865”.

The Thirteenth Amendment completed the abolition of slavery, which had begun with the Emancipation Proclamation issued by President Abraham Lincoln in 1863.

Shortly after the amendment’s adoption, selective enforcement of certain laws, such as laws against vagrancy, allowed blacks to continue to be subjected to involuntary servitude in some cases. See also Black Codes.

The Thirteenth Amendment was followed by the Fourteenth Amendment (civil rights in the states), in 1868, and the Fifteenth Amendment (which bans racial voting restrictions), in 1870.

Cartnoon

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Segmented

Late Night Karaoke

Awards Season

Who will win the coveted “Wrecking Ball”?

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

SotU: Notably Absent

“A Silent Coup”: Jeremy Scahill & Bob Herbert on Corporate, Military Interests Shaping Obama’s SOTU

“Dirty Wars” Filmmaker Jeremy Scahill on the “Drone President” & Obama’s Whitewashing of NSA Spying

Also notably ineffective.

Transcript

SotU: Inequality & Minimum Wage

Transcript

Transcript

Transcript

Cartnoon

TPP Kaput?

Reid Announces Opposition to ‘Fast Track’ on Trade

By Siobhan Hughes, Wall Street Journal

January 29, 2014, 2:47 p.m. ET

“I’m against fast track,” Mr. Reid told reporters one day after President Barack Obama renewed his call for Congress to pass fast-track legislation, which means Congress must consider trade bills on an expedited basis in an up-or-down vote with no amendments. “I think everyone would be well-advised just not to push this right now.”



Fast-track authority is seen as crucial to cementing the trade deals because of the reassurance it would provide negotiating partners in the final, politically-sensitive rounds of talks. Other nations are typically reluctant to make trading concessions unless the U.S. can offer assurances trading pacts won’t be amended or rejected by Congress at the last minute.

“You can kiss any new trade deals goodbye,” said Sen. John Cornyn (R., Texas.) “I think the majority leader’s focus is on the November elections and he doesn’t want to expose his vulnerable members to controversial votes.”



On Wednesday Mr. Reid made clear that he has expressed the depth of his opposition plainly, including to Senate Finance Chairman Max Baucus (D., Mont.), who recently unveiled the fast-track bill, and Sen. Ron Wyden (D., Ore.), who is presumed to become chairman of the committee when Mr. Baucus steps down to serve as U.S. ambassador to China.

“Everyone knows how I feel about this-Senator Baucus knows; Senator Wyden knows; the White House knows,” Mr. Reid said, declining to say whether he would stop fast-track legislation from coming up for a Senate floor vote. “We’ll see,” he said.

Mr. Wyden has expressed concerns about the existing fast-track bill and thinks it needs to be rewritten, an aide said.

An aide to Ways and Means Chairman Dave Camp said the Michigan Republican would like to have bipartisan support before moving fast-track legislation forward in the House.



Many Democrats are skeptical of recent free-trade agreements, saying they don’t do enough to stem the flow of jobs overseas and don’t require trading partners to observe strict labor and environmental rules similar to those in the U.S. Some are concerned the Asia-Pacific pact under negotiation will siphon U.S. jobs to low-income countries such as Vietnam.

“It seems there’s a great opportunity to get off the fast track to bad trade deals and open the policy window to a better deal for workers,” Celeste Drake, a trade expert with the AFL-CIO, said.



A poll released on Wednesday showed that 62% of voters oppose fast-track negotiating authority for Mr. Obama. The poll, conducted by Hart Research Associates and Chesapeake Beach Consulting, shows that Republican voters are more concerned about giving fast-track authority to Mr. Obama than Democrats.

Mirabile Dictu! Reid Tells Off Obama on Fast Track, Killing Toxic Trade Deals for 2014

by Yves Smith, Naked Capitalism

Posted on January 30, 2014

(M)y Congressional correspondents think another gambit is more likely: to make some cosmetic changes and try to get the bill passed during the lame duck session, on the assumption that some Democrats (particularly those who are leaving office) will use the cover and change positions.

However, that cheery view assumes that the situation is static, when opposition to these bills is becoming even more pronounced.



And the repudiation by Reid and the stiffening resistance to these bills won’t go unnoticed overseas. The Wikileaks publication of drafts of two critical chapters showed a wide gap between the US positions and that of many of its supposed partners. Our reader Clive has also described how the Japanese media (and Japan is essential to the TPP being consummated) is being uncharacteristically direct in saying the US was not negotiating, and it would need to make significant concessions to reach an agreement. The TPP was already going pear shaped, and whatever sense of momentum the US had been able to create is now kaput.

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