Crossposted from The Stars Hollow Gazette

Washington is a one party town.

The party of the Aristocrats.  The Elite.  The Nepotists.

For the .1%, by the .01%–

“This beautiful capital,” President Clinton said in his first inaugural address, “is often a place of intrigue and calculation. Powerful people maneuver for position and worry endlessly about who is in and who is out, who is up and who is down, forgetting those people whose toil and sweat sends us here and pays our way.” With that, the new president sent a clear challenge to an already suspicious Washington Establishment.

And now, five years later, here was Clinton’s trusted adviser Rahm Emanuel, finishing up a speech at a fund-raiser to fight spina bifida before a gathering that could only be described as Establishment Washington.

“There are a lot of people in America who look at what we do here in Washington with nothing but cynicism,” said Emanuel. “Heck, there are a lot of people in Washington who look at us with nothing but cynicism.” But, he went on, “there are good people here. Decent people on both sides of the political aisle and on both sides of the reporter’s notebook.”

Emanuel, unlike the president, had become part of the Washington Establishment. “This is one of those extraordinary moments,” he said at the fund-raiser, “when we come together as a community here in Washington — setting aside personal, political and professional differences.”

Actually, it wasn’t extraordinary. When Establishment Washingtonians of all persuasions gather to support their own, they are not unlike any other small community in the country.

On this evening, the roster included Cabinet members Madeleine Albright and Donna Shalala, Republicans Sen. John McCain and Rep. Bob Livingston, Federal Reserve Board Chairman Alan Greenspan, PBS’s Jim Lehrer and New York Times columnist Maureen Dowd, all behaving like the pals that they are. On display was a side of Washington that most people in this country never see. For all their apparent public differences, the people in the room that night were coming together with genuine affection and emotion to support their friends — the Wall Street Journal’s Al Hunt and his wife, CNN’s Judy Woodruff, whose son Jeffrey has spina bifida.

But this particular community happens to be in the nation’s capital. And the people in it are the so-called Beltway Insiders — the high-level members of Congress, policymakers, lawyers, military brass, diplomats and journalists who have a proprietary interest in Washington and identify with it.

They call the capital city their “town.”

1. THIS IS THEIR HOME.
2. THE LYING OFFENDS THEM.
3. ESTABLISHMENT WASHINGTON REVERES THE OFFICE OF THE PRESIDENCY.
4. THEY UNDERSTAND THE CONSEQUENCES.

(h/t digby)

Too much unintentional truth for you?  I didn’t write it.

I do say this-

There is nothing more inflammatory or controversial you can do than point out that the essential structure of the elites is to perpetuate their own power through monopolies enforced by the power of the state.

I sense a disturbance…

The Confines of US Elections & the Scorn a Person Can Face for Challenging Them

By: Kevin Gosztola, Firedog Lake

Thursday January 5, 2012 8:43 pm

Various “progressive voices” that agree or sympathize with GOP presidential candidate Ron Paul’s positions on wars, foreign policy and civil liberties have spoken in favor of the possible impact Paul could have on debate in this country during the 2012 Election. Those individuals have been quickly met with fervent disapproval from liberals who have reflexively suggested that any comments that could be considered supportive of Paul essentially mean one is “endorsing” Paul, urging people to support someone who opposes reproductive rights for women, arguing there are only marginal differences between Paul and President Barack Obama and that Paul just might be their secret political hero.

…

First, let’s establish the following: (1) I am not a supporter of Ron Paul’s campaign and I have no intention of donating money to the campaign (2) I sympathize with many of the positions that have compelled “progressive voices” to value his presence in the 2012 Election (3) I respect Paul’s right to run in the election and do consider him to be a serious candidate and (4) I fully expect liberals to reflexively point to Paul’s ultra-conservative positions, which lead him to support policies that particularly hurt women, minorities and even gays and doing so will only reinforce the points that I am making here.

C’thulhu fhtagn

Reason magazine frames the dilemma progressives are confronted with best: “What to say about a presidential candidate who wants to end foreign and domestic wars and protect civil liberties against the imperial presidency?”

For many progressives, this was what they were dedicated to as activists when President George W. Bush was president. They engaged in activism against the Iraq and Afghanistan War. They were opposed to more wars in countries like Pakistan or Iran and fought hard especially in 2006 to show that the Bush Administration might be going to war with Iran. They protested Bush’s use of torture and called for Guantanamo Bay to be shut down. They opposed Bush’s use of warrantless wiretapping and the expansion of surveillance state in America. They were opposed to the imperial presidency of Bush and were even moved to call for the impeachment of Cheney and Bush for committing war crimes and crimes against humanity.

I am certain many progressives hoped Obama would clearly be on the other side of many of these issues. But, as his campaign for re-election kicks into high gear, this is the reality, a part of the “new normal” as ACLU referred to it. President Barack Obama has shielded officials who committed crimes during the Bush administration from accountability for engaging in warrantless wiretapping, torture, or rendition; invoked state secrets to prevent transparency; denied detainees habeas corpus and signed a National Defense Authorization Act that grants the military extraordinary powers to detain US citizens indefinitely without trial; continued to hold detainees at prisons like Guantanamo and Bagram in Afghanistan (in addition to black prison sites that likely still exist); employed navy ships to hold prisoners that can no longer be sent to Guantanamo because there will be public outrage; asserted an authority to target and kill US civilians and bypass due process; and forced detainees into military commissions or “kangaroo courts” that are essentially Kafkaesque proceedings where it is nearly impossible to not be found guilty.

Obama has gone after whistleblowers and stalled efforts to make government more transparent. He has expanded the use of drone warfare and used it in a way that has had a destabilizing impact in Pakistan. He has gone along with President George W. Bush’s plans for the Iraq War and had there not been a cable released by WikiLeaks that upset the Iraqi government because it detailed a massacre of Iraqi civilians carried out by US soldiers, which the US government had refused to investigate, the US might not have said it would withdraw all its soldiers by the end of 2011.

…

Imagine having to debate Paul on wars, on possible war with Iran, on drone warfare, on the expansion of the surveillance state and the PATRIOT Act, on the war on drugs, on transparency, whistleblowing and WikiLeaks, etc. Then, imagine President Obama having to find a way to neutralize and marginalize Paul’s positions. In the general election, there would inevitably be a wide space opened up for debate on foreign policy and civil liberties that would not be unlike the space for debate that Occupy Wall Street has opened up on economic inequality and injustice in America.

Additionally, Paul’s progressive critics, who are righteous in their opposition to him, would be able to watch President Obama challenge Paul on the very issues that lead them to chastise progressives who say anything that could be construed as supportive of Paul. President Obama could challenge him on reproductive rights, government regulation, marriage equality, health care, taxes and the role of the federal government in providing welfare to citizens.

This may all sound like a fairy tale that will never happen, but the point is not whether it is realistic or not. The point is that if Obama’s had to run against Paul he would have to answer questions on some very important issues, which he has had a dismal record on in his first term as president.

Hmmm…  Imagine that.

Democratic Party priorities

Glenn Greenwald, Salon

Thursday, Jan 5, 2012 5:50 AM Eastern Standard Time

For those who are extremely dissatisfied with the status quo in American political life and are seeking ways to change it, supporting one of the two major-party candidates in the 2012 presidential campaign as the principal form of activism offers no solution. That’s not an endorsement for resignation, apathy, non-voting, voting for a third party, or anything else. It’s just a simple statement of fact: on many issues that progressives themselves have long claimed are of critical, overarching importance (not all, but many), there will be virtually no debate in the election because there are virtually no differences between the two candidates and the two parties on those questions. In the face of that fact, there are two choices: (1) simply accept it (and thus bolster it) on the basis that the only political priority that matters is keeping the Democratic Party and Barack Obama empowered; or (2) searching for ways to change the terms of the debate so that critical views that are now excluded by bipartisan consensus instead end up being heard.

…

(L)abeling people “crazy” as a means of dismissing their views – basically depicting political disagreement as a mental illness – is one of the oldest and stalest means of discrediting people who dissent; it’s basically the prime weapon used to enforce mainstream orthodoxy and punish dissidents. Taken to its most extreme and odious conclusion, the Soviet Union institutionalized anyone challenging Communist orthodoxy in mental hospitals, and China now does the same. Charles Krauthammer continuously abused his psychiatric license to diagnose Bush critics as suffering from mental illnesses and to delegitimize (progressive) criticisms of Bush as a form of insanity; to accomplish this, he even purported to identify a new disease, Bush Derangement Syndrome, which is the exact phrase (with “Obama” symbolically replacing “Bush”) that has now seamlessly been adopted and applied to critics of the current President by some of the most rabid Obama defenders.

…

If you don’t really care about these issues – war, empire, the denial of due process, suffocating secrecy, ongoing killing of foreign civilians, oligarchical manipulation of the Fed and other government policies, militarized foreign policy and police practices, etc. –  then it’s easy to blithely dismiss the need to find some way to challenge the bipartisan consensus on those issues.

…

(D)espite vocally feigning grave concern about these issues during the Bush years, they are not a priority for many progressives precisely because they no longer provide any means of obtaining partisan advantage. How can you pretend to vehemently oppose the slaughter of foreign civilians, the deprivation of due process, a posture of Endless War, radical secrecy, etc., when the President behind whom you’re faithfully marching is an aggressive advocate and implementer of those very policies? It’s certainly possible – based on lesser-of-two-evils rationale – to vote for a President who does these things while simultaneously opposing those policies. But for those who insist that all political salvation lies exclusively within the Democratic Party: the only course of action to reconcile these conflicts is to de-prioritize them, to decide they no longer really matter, and thus remain content with a President and a Party who does these things with such abandon.

I actually don’t believe that the progressive reaction to this discussion is about Ron Paul. The same anger would be provoked by favorably comparing any political figure outside of the Democratic Party to President Obama on important issues, especially in an election year (I can guarantee that the same reaction would be triggered by pointing to the benefits of, say, Gary Johnson, who just scored the highest on the ACLU’s Civil Liberties report card). That, as I suggested in my first article, is viewed as the supreme sin, the one that must trigger oceans of denunciation and attack in order to deter similar acts of heresy.

…

The point is not to delegitimize the viewing of at Ron Paul’s candidacy as providing an important antidote to some of President Obama’s grave moral and political failings. The real point is to delegitimze any effort to turn elsewhere away from President Obama or to do anything to point out that he suffers grave moral and political failings at all (here is the scorn Drum heaped on the Democratic presidential candidates in 2008 who challenged many of these same policies). The mission here is to enforce partisan loyalty: criticize all you want, but stay loyally in the fold. Even as a means to expand and improve the range of debate, suggesting that someone may be comparatively superior to President Obama on vital issues – especially when that someone is not a loyal member of the Democratic Party – is the real sin.

Purity.

Crossposted from The Stars Hollow Gazette

Bond Exotica Gains Favor in Era of Low Rates

By Sarah Mulholland, Bloomberg News

Jan 4, 2012 5:33 AM ET

So-called esoteric asset-backed securities issuance may soar 12.9 percent to $35 billion, compared with debt linked to more traditional collateral such as auto and credit-card loans, which will grow 8.75 percent to $87 billion, according to a forecast from Credit Suisse Group AG.

…

Esoteric bonds make up 16 percent of the $620 billion market for asset-backed securities outstanding, with debt tied to credit card, student and auto loans accounting for the rest, according to data from Wells Fargo.

…

Wells Fargo’s recommendations for 2012 include debt backed by timeshare payments and fleets of rental cars, according to a Dec. 6 report from analysts led by John McElravey in Charlotte, North Carolina.

A disadvantage of esoteric bonds for investors is that they can be hard to sell because they don’t trade frequently. As a result, investors require the additional yield, said Barclays Capital’s Wishengrad.

Double digit returns on investment are guaranteed neither by the Constitution nor the Bible and even Freshwater Shamen don’t contend they are risk free.

Crossposted from The Stars Hollow Gazette

Green Shoots.

And read the URL, not the Headline.

For 2012, Signs Point to Tepid Consumer Spending

By MOTOKO RICH and STEPHANIE CLIFFORD, The New York Times

Published: January 2, 2012

Even the seemingly robust holiday shopping season is raising concern. After a strong start on Thanksgiving weekend, a pronounced lull followed, causing retailers to mark down products heavily in the week before Christmas. While final numbers for the season are not in, analysts say they are worried that retailers had to eat into profits to generate high revenues.

…

Even some growth areas in the economy can be explained by tapped-out consumers. Take auto sales, which rose about 10 percent nationwide in 2011 from a year earlier.

“People can only hold onto their cars for so long,” said Romolo Debottis, new-car sales manager at Mike Bass Ford in Sheffield Village, a suburb of Cleveland. He said sales at the dealership should increase this year to 2007 levels, the prerecession peak. “A lot of them have done that above and beyond what they normally would, and they’re just ready to spend money and buy a new vehicle.”

Chrysler, Ford and General Motors report December vehicle sales

by CalculatedRisk

1/04/2012 10:25:00 AM

The key number for the economy is the seasonally adjusted annual sales rate (SAAR) compared to the last few months, not the year-over-year comparison provided by the automakers. Once all the reports are released, I’ll post a graph of the estimated total December light vehicle sales (SAAR) – usually around 4 PM ET.

…

The consensus is for sales to be unchanged from November at around 13.6 million SAAR.

Crossposted from The Stars Hollow Gazette

I don’t know about you but I’m plenty tired of horseshitrace politics for the moment.

Well, since you insist.

Paul did not do as well as I expected last night, but still about 150% better than last cycle.  Twitter rumors reported by desperate and stupid MSNBC Teleprompter Readers that Johnson was dropping his Libertarian Party candidacy (leaving it available for a Paul Third Party run) were a HOAX!

Way to go “professionals”.

Santorum “won” by a whole 8 votes which means it’s time to start Google bombing again.  Romney didn’t disqualify, picking up that all important “Crash” McCain endorsement.

Losers– Bachman, hard to see how she can stay with no money and no votes.  Perry, outspent Romney by 3:1, now returning to Houston to “re-evaluate” despite strong polling in South Carolina.  Gingrich, may stay in out of pure spite and meanness, but almost sure to lose his South Carolina standing.

Now, about entropy and the heat death of the Universe.

I TOLD YOU SO!

Ohio Earthquake Linked To Fracking Injection Wells

Think Progress Newsflash

1/4/12

On New Year’s Eve, a magnitude 4.0 earthquake struck northeastern Ohio, the second quake to strike the region in a week. Saturday’s earthquake, which occurred in an area not typically known for this type of natural disaster, is being traced back to fluid injection wells at a Youngstown fracking site. According to the Akron Beacon Journal, “the quake was the 11th over the last eight months in Mahoning County, all within two miles of the injection wells.” They also point out that injection wells have been linked to earthquakes in other states as well, including Arkansas, West Virginia, Colorado and Texas. Two of the Ohio injection wells in question are now being shut down.

Fracking Linked to Earthquakes in Ohio; Wells Indefinitely Shut Down

By: David Dayen, Firedog Lake

Monday January 2, 2012 9:00 am

This is not the first time that fracking has been linked to earthquakes. Earlier this year, unusual earthquakes in Oklahoma were seen by many as helped along by fracking. The scientific consensus on that incident was that fracking can cause small tremors, but nothing of the scale as seen in Oklahoma, which did follow a natural fault line.

But Ohio doesn’t have as much history with earthquakes, though there are faults in the region. The frequency of the quakes is definitely unusual; there have been 11 in the past eight months within two miles of the wells. And the correlation between increased oil and gas exploration and increased seismic activity is becoming more widespread. It’s not that fracking releases so much energy underground into the faults, it’s that they place just enough pressure to trigger stronger quakes than we would otherwise see. Plus, scientists and not just state officials in Ohio participated in the shutdown of the fracking wells, seeking more information.

Expert Believes Wastewater Fracking Wells Causing Earthquakes in Ohio

By: David Dayen, Firedog Lake

Tuesday January 3, 2012 9:35 am

(O)ne expert has narrowed down the cause of the earthquakes, and he points to a wastewater well.

…

Both are wells used in the fracking process. One gets used for drilling and the other for injecting wastewater, but they are at root fracking wells (they dispose of wastewater for oil wells as well, but fracking uses a much larger quantity of fluids). If there were no fracking, there would be no wastewater and thus no wastewater wells. And according to John Armbruster, no earthquakes.

The earthquakes have been small and haven’t yet caused massive property damage. But according to Armbruster they will continue for at least a year. And causing pressure to a fault line gives the impression of needlessly stirring up a hornet’s nest. And of course, this is not nearly the only environmental problem associated with fracking. The quality of drinking water and air around well sites also draws much concern.

Ohio quakes could incite fracking policy shift

By JULIE CARR SMYTH, Associated Press

Tue Jan 3, 5:33 pm ET

(Ohio Governor John) Kasich told reporters over the weekend that he doesn’t believe the energy industry should be blamed for issues arising from disposal of their byproducts. That would be like blaming the auto industry for improper disposal of old tires, the first-term Republican said.

Scientists have known for decades that drilling or injecting water into areas where a fault exists can cause earthquakes, said Paul Hsieh, a research hydrologist with the U.S. Geological Survey in Menlo Park, Calif.

“That’s widely documented and accepted within the science community,” he said. “It’s seen all over the world.”

…

Oklahoma’s sharpest earthquake on record, of magnitude 5.8 on Nov. 5, was centered on a county that has 181 such wells, according to Matt Skinner, a spokesman for the Oklahoma Corporation Commission, which oversees oil and gas production in the state and intrastate transportation pipelines.

Crossposted from The Stars Hollow Gazette

The key problem in Academic Economics at the moment is that it’s been replaced by tortoise shell shaking Shamen muttering mystical protestations of faith in the cult worship of Mammon by fairy believing fools.

The Misinformation Around Debt

By: David Dayen, Firedog Lake

Monday January 2, 2012 10:15 am

(T)he key problem for US debt at the moment is that there won’t be enough of it to meet current demand. Choppy waters elsewhere have made US Treasuries, the same ones supposedly downgraded by Standard and Poor’s, perceived as the safest financial instrument in the world. Treasuries sold at a higher pace than anytime since 1995. Government could finance at a negative long-term interest rate. The markets want the government to borrow more so they can get their hands on more Treasuries. This will also likely increase economic performance, improving yields across the board.

Nobody Understands Debt

By PAUL KRUGMAN

Published: January 1, 2012

It’s true that foreigners now hold large claims on the United States, including a fair amount of government debt. But every dollar’s worth of foreign claims on America is matched by 89 cents’ worth of U.S. claims on foreigners. And because foreigners tend to put their U.S. investments into safe, low-yield assets, America actually earns more from its assets abroad than it pays to foreign investors. If your image is of a nation that’s already deep in hock to the Chinese, you’ve been misinformed. Nor are we heading rapidly in that direction.

…

Washington isn’t just confused about the short run; it’s also confused about the long run. For while debt can be a problem, the way our politicians and pundits think about debt is all wrong, and exaggerates the problem’s size.

…

(W)hen people in D.C. talk about deficits and debt, by and large they have no idea what they’re talking about – and the people who talk the most understand the least.

Perhaps most obviously, the economic “experts” on whom much of Congress relies have been repeatedly, utterly wrong about the short-run effects of budget deficits. People who get their economic analysis from the likes of the Heritage Foundation have been waiting ever since President Obama took office for budget deficits to send interest rates soaring. Any day now!

And while they’ve been waiting, those rates have dropped to historical lows. You might think that this would make politicians question their choice of experts – that is, you might think that if you didn’t know anything about our postmodern, fact-free politics.

Clap louder.  LOUDER!!!

What is it about loud that you don’t understand?

Now many may disagree with me (including TheMomCat and we have discussed this lots of times) but I think the Iowa Caucuses and New Hampshire Primary serve a valuable role by forcing the .01% political elite to slum amongst us 99.99% rabble and kiss ass for votes instead of simply holding an auction.

Each one tests a different aspect of a candidate’s campaign.  In Iowa the test is organization, getting your votes to the poll and keeping them yours.  In New Hampshire it’s a test of campaigning, developing a message of broad appeal and delivering it.  Not so easy in a State with no big cities, no dominant newspapers (the Union Leader is a mere pretender) and only 1 TV Station.  It’s also a test of finances since you have to shop in Massachusetts where the prices are much higher, not because of taxes but because the market is bigger.

That said I thought no one could care less about the results of the Republican Caucuses than me.  I am proven wrong by Rick Perlstein–

(Y)ou probably couldn’t find a political junky in America less interested to the supposedly hotly contested race for the Republican nomination. I called it for Willard “Mitt” Romney well over three years ago-the day he finished second to John McCain in 2008. That made him “next in line;” and our modern Republican Party pretty much always nominates the next in line, or at the very least The Logical Choice Of The Party Establishment. In 1968, it was Nixon, the former vice president. In ’76 it was the accidental president, Gerald Ford. The guy who came in second in ’76, Ronald Reagan, was nominated in 1980; Vice President Bush, the man who finished second in ’80, in ’88. Old Man Dole in ’96. Son of Bush in 2000. Mighty McCain in 2008.

Matt Taibbi’s critique is a bit more far reaching and less petty-

It takes an awful lot to rob the presidential race of this elemental appeal. But this year’s race has lost that buzz. In fact, this 2012 race may be the most meaningless national election campaign we’ve ever had. If the presidential race normally captivates the public as a dramatic and angry ideological battle pitting one impassioned half of society against the other, this year’s race feels like something else entirely.

In the wake of the Tea Party, the Occupy movement, and a dozen or more episodes of real rebellion on the streets, in the legislatures of cities and towns, and in state and federal courthouses, this presidential race now feels like a banal bureaucratic sideshow to the real event – the real event being a looming confrontation between huge masses of disaffected citizens on both sides of the aisle, and a corrupt and increasingly ideologically bankrupt political establishment, represented in large part by the two parties dominating this race.

…

The auctioned election process is designed to reduce the field to two candidates who will each receive hundreds of millions of dollars apiece from the same pool of donors. Just take a look at the lists of top donors for Obama and McCain from the last election in 2008.

…

Obama’s list included all the major banks and bailout recipients, plus a smattering of high-dollar defense lawyers from firms like WilmerHale and Skadden Arps who make their money representing those same banks. McCain’s list included exactly the same banks and a similar list of law firms, the minor difference being that it was Gibson Dunn instead of WilmerHale, etc.

…

Those numbers tell us that both parties rely upon the same core of major donors among the top law firms, the Wall Street companies, and business leaders – basically, the 1%. Those one-percenters always give generously to both parties and both presidential candidates, although they sometimes will hedge their bets significantly when they think one side or the other has a lopsided chance at victory. That’s clearly what happened in 2008, when Wall Street correctly called Obama as a 2-1 (or maybe a 7-3) favorite to beat McCain.

The 1% donors are remarkably tolerant. They’ll give to just about anyone who polls well, provided they fall within certain parameters. What they won’t do is give to anyone who is even a remote threat to make significant structural changes, i.e. a Dennis Kucinich, an Elizabeth Warren, or a Ron Paul (hell will freeze over before Wall Street gives heavily to a candidate in favor of abolishing their piggy bank, the Fed). So basically what that means is that voters are free to choose anyone they want, provided it isn’t Dennis Kucinich, or Ron Paul, or some other such unacceptable personage.

If the voters insist on supporting such a person in defiance of these donors – this might even happen tonight, with a Paul win in Iowa – what you inevitably end up seeing is a monstrous amount of money quickly dumped into the cause of derailing that candidate.

…

The reason 2012 feels so empty now is that voters on both sides of the aisle are not just tired of this state of affairs, they are disgusted by it. They want a chance to choose their own leaders and they want full control over policy, not just a partial say. There are a few challenges to this state of affairs within the electoral process – as much as I disagree with Paul about many things, I do think his campaign is a real outlet for these complaints – but everyone knows that in the end, once the primaries are finished, we’re going to be left with one 1%-approved stooge taking on another.

…

The only place we can be absolutely sure this battle will not be found is in any national presidential race between Barack Obama and someone like Mitt Romney.

The campaign is still a gigantic ritual and it will still be attended by all the usual pomp and spectacle, but it’s empty. In fact, because it’s really a contest between 1%-approved candidates, it’s worse than empty – it’s obnoxious.

It was always annoying when these two parties and the slavish media that follows their champions around for 18 months pretended that this was a colossal clash of opposites. But now, with the economy in the shape that it’s in thanks in large part to the people financing these elections, that pretense is more than annoying, it’s offensive.

And I imagine that the more they try to play up the drama of these familiar-but-empty campaign rituals, the more irritating to the public it will all become. In fact, I wouldn’t be surprised if, before the season is out, the campaign itself will become a hated symbol of the 1% — with the conventions and the networks’ broadcast tents outside the inevitable “free speech zones” attracting protests the same way the offices of Chase and Bank of America did this fall.

Speaking of Matt Taibbi, Rajiv Sethi has an interesting piece up over at Yves place speculating on a Goldman-style ‘Pump and Dump’ in the Intrade prediction market driving the Santorum Surge (minds out of the gutter folks) and Romney’s enhanced chances of victory.

Public Policy Polling which has proven remarkably accurate recently predicts a Photo Finish with Ron Paul at 20%, Mitt Romney at 19%, and Rick Santorum at 18%; and as if you haven’t had enough Horse Race metaphors, John Aravosis points out this interesting graphic at Slate.

Jon Walker likes gambling on Poker better-

The Wild Card Factors

Probably the two biggest wild cards are turnout and whether Michele Bachmann and Rick Perry are able to hold their support. It is possible some of their socially conservative supporters might at the last minute move strategically to Santorum, because they see his momentum making him the strongest anti-Romney.

Similarly it is possible the Paul campaign could bring in a significant number of new, unlikely caucus voters tipping the balance for him. It is possible a large number of anti-war and/or anti-drug war independents will choose to show up at the caucus, change their registration to GOP, and vote for Paul. With overall turnout likely to be about only 130,000, as little as a few hundred votes could make a difference.

Now you can find a live blog almost anywhere except here.  Not only am I uninterested in any of the above (call me Uncommitted though some think I should be), I am also still visiting my TVless friend and if I want to watch the results at all I’ll have to do it through CurrentTV’s livestream and sadly my laptop lacks to horsepower to stream and blog at the same time.

However if you have any observations you’d care to share please do so below.

It is, after all, an Open Thread.

Crossposted from The Stars Hollow Gazette

As we head into the Iowa Caucuses Ron Paul seems more popular than ever and there is at least an even chance he’ll pull off an upset victory.

I’ve drawn your attention to some of the deep philosophical problems with Libertarianism (C’thulhu fhtagn), but recognizing those leaves open the question- just what is so appealing about Ron Paul?

There are those who will argue that his appeal to the Tea Party crowd is based on his history of racism, but instead I would argue that it’s the result of his ‘principled’ stands in favor of individual rights and the populist perception that he is not beholden to the corporatist status quo (though reading the citations in my earlier piece should disabuse you of the notion that the Libertarian future is any less driven by mega corporations, greed and power).

It is indeed this perception of populism that gives him ‘crossover’ appeal to Independents and Liberals.  Remember, Independents are anything BUT ‘Swing Voters’.  An overwhelming majority are disaffected from one branch or the other of our two headed hydra duopoly.

Glenn Greenwald and Matt Stoller have recently published some pieces examining this phenomena.

Progressives and the Ron Paul fallacies

Glenn Greenwald, Salon

Saturday, Dec 31, 2011 11:15 AM

The worst attributes of our political culture – obsession with trivialities, the dominance of horserace “reporting,” and mindless partisan loyalties – become more pronounced than ever. Meanwhile, the actually consequential acts of the U.S. Government and the permanent power factions that control it – covert endless wars, consolidation of unchecked power, the rapid growth of the Surveillance State and the secrecy regime, massive inequalities in the legal system, continuous transfers of wealth from the disappearing middle class to large corporate conglomerates – drone on with even less attention paid than usual.

Because most of those policies are fully bipartisan in nature, the election season – in which only issues that bestow partisan advantage receive attention – places them even further outside the realm of mainstream debate and scrutiny.

…

(T)here’s the inability and/or refusal to recognize that a political discussion might exist independent of the Red v. Blue Cage Match. Thus, any critique of the President’s exercise of vast power (an adversarial check on which our political system depends) immediately prompts bafflement (I don’t understand the point: would Rick Perry be any better?) or grievance (you’re helping Mitt Romney by talking about this!!). The premise takes hold for a full 18 months – increasing each day in intensity until Election Day – that every discussion of the President’s actions must be driven solely by one’s preference for election outcomes (if you support the President’s re-election, then why criticize him?).

…

(H)ere’s the Publisher of The Nation praising Ron Paul not on ancillary political topics but central ones (“ending preemptive wars & challenging bipartisan elite consensus” on foreign policy), and going even further and expressing general happiness that he’s in the presidential race. Despite this observation, Katrina vanden Heuvel – needless to say – does not support and will never vote for Ron Paul (indeed, in subsequent tweets, she condemned his newsletters as “despicable”). But the point that she’s making is important, if not too subtle for the with-us-or-against-us ethos that dominates the protracted presidential campaign: even though I don’t support him for President, Ron Paul is the only major candidate from either party advocating crucial views on vital issues that need to be heard, and so his candidacy generates important benefits.

Whatever else one wants to say, it is indisputably true that Ron Paul is the only political figure with any sort of a national platform – certainly the only major presidential candidate in either party – who advocates policy views on issues that liberals and progressives have long flamboyantly claimed are both compelling and crucial. The converse is equally true: the candidate supported by liberals and progressives and for whom most will vote – Barack Obama – advocates views on these issues (indeed, has taken action on these issues) that liberals and progressives have long claimed to find repellent, even evil.

…

The simple fact is that progressives are supporting a candidate for President who has done all of that – things liberalism has long held to be pernicious. I know it’s annoying and miserable to hear. Progressives like to think of themselves as the faction that stands for peace, opposes wars, believes in due process and civil liberties, distrusts the military-industrial complex, supports candidates who are devoted to individual rights, transparency and economic equality. All of these facts – like the history laid out by Stoller in that essay – negate that desired self-perception. These facts demonstrate that the leader progressives have empowered and will empower again has worked in direct opposition to those values and engaged in conduct that is nothing short of horrific. So there is an eagerness to avoid hearing about them, to pretend they don’t exist. And there’s a corresponding hostility toward those who point them out, who insist that they not be ignored.

The parallel reality – the undeniable fact – is that all of these listed heinous views and actions from Barack Obama have been vehemently opposed and condemned by Ron Paul: and among the major GOP candidates, only by Ron Paul. For that reason, Paul’s candidacy forces progressives to face the hideous positions and actions of their candidate, of the person they want to empower for another four years. If Paul were not in the race or were not receiving attention, none of these issues would receive any attention because all the other major GOP candidates either agree with Obama on these matters or hold even worse views.

Progressives would feel much better about themselves, their Party and their candidate if they only had to oppose, say, Rick Perry or Michele Bachmann. That’s because the standard GOP candidate agrees with Obama on many of these issues and is even worse on these others, so progressives can feel good about themselves for supporting Obama: his right-wing opponent is a warmonger, a servant to Wall Street, a neocon, a devotee of harsh and racist criminal justice policies, etc. etc. Paul scrambles the comfortable ideological and partisan categories and forces progressives to confront and account for the policies they are working to protect. His nomination would mean that it is the Republican candidate – not the Democrat – who would be the anti-war, pro-due-process, pro-transparency, anti-Fed, anti-Wall-Street-bailout, anti-Drug-War advocate (which is why some neocons are expressly arguing they’d vote for Obama over Paul). Is it really hard to see why Democrats hate his candidacy and anyone who touts its benefits?

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Paul’s candidacy forces those truths about the Democratic Party to be confronted. More important – way more important – is that, as vanden Heuvel pointed out, he forces into the mainstream political discourse vital ideas that are otherwise completely excluded given that they are at odds with the bipartisan consensus.

There are very few political priorities, if there are any, more imperative than having an actual debate on issues of America’s imperialism; the suffocating secrecy of its government; the destruction of civil liberties which uniquely targets Muslims, including American Muslims; the corrupt role of the Fed; corporate control of government institutions by the nation’s oligarchs; its destructive blind support for Israel, and its failed and sadistic Drug War. More than anything, it’s crucial that choice be given to the electorate by subverting the two parties’ full-scale embrace of these hideous programs.

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Can anyone deny that (a) those views desperately need to be heard and (b) they are not advocated or even supported by the Democratic Party and President Obama? There are, as I indicated, all sorts of legitimate reasons for progressives to oppose Ron Paul’s candidacy on the whole. But if your only posture in the 2012 election is to demand lockstep marching behind Barack Obama and unqualified scorn for every other single candidate, then you are contributing to the continuation of these policies that liberalism has long claimed to detest, and bolstering the exclusion of these questions from mainstream debate.

If you’re someone who is content with the Obama presidency and the numerous actions listed above; if you’re someone who believes that things like Endless War, the Surveillance State, the Drug War, the sprawling secrecy regime, and the vast power of the Fed are merely minor, side issues that don’t merit much concern (sure, like a stopped clock, Paul is right about a couple things); if you’re someone who believes that the primary need for American politics is just to have some more Democrats in power, then lock-step marching behind Barack Obama for the next full year makes sense.

But if you don’t believe those things, then you’re going to be searching for ways to change mainstream political discourse and to disrupt the bipartisan consensus which shields these policies from all debate, let alone challenge. As imperfect a vehicle as it is, Ron Paul’s candidacy – his success within a Republican primary even as he unapologetically challenges these orthodoxies – is one of the few games in town for achieving any of that (now that Johnson has left the GOP and will [likely] run as the Libertarian Party candidate, perhaps he can accomplish that as well).

Matt Stoller: Why Ron Paul Challenges Liberals

Matt Stoller, Naked Capitalism

Thursday, December 29, 2011

Modern liberalism is a mixture of two elements. One is a support of Federal power – what came out of the late 1930s, World War II, and the civil rights era where a social safety net and warfare were financed by Wall Street, the Federal Reserve and the RFC, and human rights were enforced by a Federal government, unions, and a cadre of corporate, journalistic and technocratic experts (and cheap oil made the whole system run.) America mobilized militarily for national priorities, be they war-like or social in nature. And two, it originates from the anti-war sentiment of the Vietnam era, with its distrust of centralized authority mobilizing national resources for what were perceived to be immoral priorities. When you throw in the recent financial crisis, the corruption of big finance, the increasing militarization of society, Iraq and Afghanistan, and the collapse of the moral authority of the technocrats, you have a big problem. Liberalism doesn’t really exist much within the Democratic Party so much anymore, but it also has a profound challenge insofar as the rudiments of liberalism going back to the 1930s don’t work.

This is why Ron Paul can critique the Federal Reserve and American empire, and why liberals have essentially no answer to his ideas, arguing instead over Paul having character defects. Ron Paul’s stance should be seen as a challenge to better create a coherent structural critique of the American political order. It’s quite obvious that there isn’t one coming from the left, otherwise the figure challenging the war on drugs and American empire wouldn’t be in the Republican primary as the libertarian candidate. To get there, liberals must grapple with big finance and war, two topics that are difficult to handle in any but a glib manner that separates us from our actual traditional and problematic affinity for both. War financing has a specific tradition in American culture, but there is no guarantee war financing must continue the way it has. And there’s no reason to assume that centralized power will act in a more just manner these days, that we will see continuity with the historical experience of the New Deal and Civil Rights Era. The liberal alliance with the mechanics of mass mobilizing warfare, which should be pretty obvious when seen in this light, is deep-rooted.

What we’re seeing on the left is this conflict played out, whether it is big slow centralized unions supporting problematic policies, protest movements that cannot be institutionalized in any useful structure, or a completely hollow liberal intellectual apparatus arguing for increasing the power of corporations through the Federal government to enact their agenda. Now of course, Ron Paul pandered to racists, and there is no doubt that this is a legitimate political issue in the Presidential race. But the intellectual challenge that Ron Paul presents ultimately has nothing to do with him, and everything to do with contradictions within modern liberalism.

I would argue with Glenn about the deprivation of essential liberty being limited to Muslims-

First they came for the communists,

and I didn’t speak out because I wasn’t a communist.

Crossposted from The Stars Hollow Gazette

The Economist has recently published an article describing 3 schools of Economic thought that have gained prominence recently because of their advocacy on blogs.  Indeed, being a political blog reader you may not be aware that there are more Economic blogs and they are more active and have better traffic than political ones like this.

Two of my favorites are Naked Capitalism (Yves Smith) and EconoMonitor (Nouriel Roubini) but I also frequent Krugman and Felix Salmon as well as a few others.

To summarize briefly before I excerpt some of The Economist’s descriptions of each school, the 3 Schools are Modern Monetary Theory (neo-Chartalism), Austrian (Austerian), and Market Monetarism.  I would say the article is more sympathetic to the 3rd school than the others though you may disagree.

Also I’m not quite sure what they consider “mainstream”, but in fact the Friedmanite Freshwater School has been thoroughly discredited by the abject failure of their models to predict events.  It is not science of any sort, but the faith based mystical mutterings of rattle shaking Shamen.

Heterodox economics, Marginal revolutionaries

The crisis and the blogosphere have opened mainstream economics up to new attack

The Economist

Dec 31st 2011

This invisible college of bloggers focuses first on the level of spending on American products: America’s domestic output, valued at the prices people pay for it. This is what economists call “nominal” GDP (NGDP), as opposed to “real” GDP, which strips out the effects of inflation. They think the central bank should promise to keep NGDP on a steady upward path, rising at, say, 5% a year. Such growth might come about because more stuff is bought (“real” growth) or because prices are higher (inflation). Mr Sumner’s disinhibition is to encourage the Fed not to care which of the two is doing more of the work.

Central banks set targets to make their currencies credible and their policies predictable. The target for many is to keep consumer prices growing at 2% a year or thereabouts. For the past few decades that has largely succeeded in stabilising inflation; but in the current crisis it has singularly failed to stabilise the economy. In America NGDP plunged over 11% below its pre-crisis path and remains there; what people buy at the prices they pay for it is much less than most would want.

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(P)ut into the context of a pathetic response to the current crisis, the ideas offered by these very different schools all take on a similar form: that policymakers are overly worried about something that should concern them less. The Austrians see the bogeyman as deflation, the fear of which inflates bubbles. The market monetarists, diametrically opposed, see exaggerated fear of inflation. And the economy is getting too little help from fiscal stimulus, according to neo-chartalists, because of the government’s superstitious fear of insolvency.

Modern Monetary Theory

The neo-chartalists believe that because paper currency is a creature of the state, governments enjoy more financial freedom than they recognise. The fiscal authorities are free to spend whatever is required to revive their economies and restore employment. They can spend without first collecting taxes; they can borrow without fear of default. Budget-makers need not cower before the bond-market vigilantes. In fact, they need not bother with bond markets at all.

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The policy conclusions neo-chartalism draws from this owe a lot to Abba Lerner, John Maynard Keynes’s “militant prophet”. Lerner believed governments should judge their fiscal policy by its economic results-its impact on jobs and inflation-and ignore any red ink it might spill. Governments should seek high employment and stable prices, much as the Fed does today. But instead of relying on monetary policy to meet these objectives, they should use fiscal policy instead. If private spending is too strong, pushing up prices and threatening inflation, the government should raise taxes or cut its own spending. If, on the other hand, private spending is too weak, jeopardising jobs, the government should cut taxes or increase its own spending.

So far, so Keynesian. But most Keynesians, anxious to appear fiscally responsible, say that budget deficits in bad times should be offset by surpluses in good times, keeping the level of debt seemly. Lerner admitted this might not be possible. Private spending might be chronically weak. If so, the government should run chronic deficits, adding continuously to the national debt. Lerner did not see that as much of a problem, though he recognised that many others were “easily frightened by fairy tales of terrible consequences”.

Austrian Economics

The “Austrian” school of economics, which traces its roots to 19th-century Vienna, is more sternly pre-Freudian: more inhibition, not less, is its prescription. Its adherents believe that part of the economy’s suffering is necessary, an inevitable consequence of past excesses. They do not think the Federal Reserve can rescue the economy. They seek instead to rescue the economy from the Fed.

(A)dvocate(s) of Austrian economics-a resurgent school of thought that, unlike market monetarism, has not been doing much to change the minds of most mainstream economists but, unlike neo-chartalism, has built up a broad constituency on and through the web… agree that interest rates should reflect the fundamental forces of thrift rather than the whims of central bankers.

The Austrian school’s thinking centres on the way “malinvestment” orchestrated by central banks distorts the business cycle. By keeping interest rates artificially low, central banks trick entrepreneurs into believing that society is more abstemious than it really is. The entrepreneurs then embark on ambitious, long-gestation investment projects, only to discover that the men and materials they require are otherwise engaged in the production of more immediate gratifications. Once this realisation dawns, the entrepreneurs abandon their follies, firing their workers. If wages are flexible and workers mobile, this bust need not be too bad. But misguided attempts by the government or the Fed to prevent unemployment will delay the necessary reshuffling of labour from industries too tied up in the future to those catering to the needs of the present.

…

Most economists do not share their admiration for the gold standard, which did not prevent severe booms and busts even in its heyday. And their theory of the business cycle has won few mainstream converts. … While it provides insights into booms and their ending, it fails to explain why things must end quite so badly, or how to escape when they do. Low interest rates no doubt helped to inflate America’s housing bubble. But this malinvestment cannot explain why 21.8m Americans remain unemployed or underemployed five years after the housing boom peaked.

Market Monetarism

The market monetarists point out that their 5% (NGDP) target is consistent with inflation of about 2%, provided the economy grows at about 3% a year, its rough average for the pre-crisis years. If growth slowed to 1%, inflation would have to be permanently higher, ie 4%. If output suffered a one-time drop, inflation might have to surge temporarily above 5%. But as growth returned to normal, inflation would recede.

In pursuing this target, the central bank would use many of the same tools as today: tweaking the short-term interest rate and, when that reaches zero, increasing NGDP by printing new money to buy more assets (ie, quantitative easing). And the very creation of the NGDP target would make such intervention more effective, Mr Sumner says. If people expect the central bank to return spending to a 5% growth path, their beliefs will help get it there. Firms will hire, confident that their revenues will expand; people will open their wallets, confident of keeping their jobs. Those hoarding cash will spend it or invest it, because they know that either output or prices will be higher in the future.

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The market monetarists argue that fiscal stimulus should be redundant, because a central bank can always revive spending-if it sets its mind to it. If the Fed’s efforts have disappointed, it is not because market monetarism is wrong, but because the Fed is not sufficiently committed to the cause.

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The market monetarists do not fret about the side effects of the activism they seek, which can misdirect capital, inflate bubbles and seduce people into over-borrowing.

So, if I may be permitted to summarize, Austrians believe that over-supply of money is what causes busts and depressions, Market Monetarists think that vigorous application of monetary stimulus can solve them, and Modern Monetary Theorists think that the amount of money available to the economy is mostly irrelevant and that aggregate demand should be managed to provide predictable levels of employment and growth.

As always the specters of Weimar and Zimbabwe are raised, but those are special cases where money was manufactured for the sole purpose of speculating in external currencies, NOT the internal economy.  In Germany’s case it was the necessity of purchasing gold (external currency) to fulfill their Versailles reparations obligations.  In Zimbabwe it was so the corrupt political elite could ex-patriate their stolen wealth.