Tag: ek Politics

Crossposted from The Stars Hollow Gazette

In a cloud over ozone

By Eugene Robinson, The Washington Post

Published: September 2

Republicans are trying to sell the false premise that protecting the environment inevitably means sacrificing jobs. President Obama should denounce this snake oil for what it is – rather than appear to accept it.

…

On Friday, Obama appeared to cede the point. He blocked new EPA rules limiting ground-level ozone – otherwise known as smog – as part of a larger effort to reduce “regulatory burdens and regulatory uncertainty” for U.S. businesses. The move came hours after a disappointing labor report showing that the economy added no new jobs in August.

…

As for the predictions of massive job losses, they sound just like the warnings we heard when environmental regulations ended acid rain or ensured that the citizens of Cleveland no longer had to worry about the Cuyahoga River catching fire.

There is plenty of evidence that the net effect of smart environmental regulation is to create jobs, not destroy them. New, more efficient plants are built; older, dirtier facilities are retrofitted. Companies innovate by developing new technology – ultimately making U.S. industry more competitive. And everyone is a little healthier.

Broken Windows, Ozone, and Jobs

Paul Krugman, The New York Times

September 3, 2011, 10:07 am

I’ve actually been avoiding thinking about the latest Obama cave-in, on ozone regulation; these repeated retreats are getting painful to watch. For what it’s worth, I think it’s bad politics. The Obama political people seem to think that their route to victory is to avoid doing anything that the GOP might attack – but the GOP will call Obama a socialist job-killer no matter what they do. Meanwhile, they just keep reinforcing the perception of mush from the wimp, of a president who doesn’t stand for anything.

…

(T)ighter ozone regulation would actually have created jobs: it would have forced firms to spend on upgrading or replacing equipment, helping to boost demand. Yes, it would have cost money – but that’s the point! And with corporations sitting on lots of idle cash, the money spent would not, to any significant extent, come at the expense of other investment.

More broadly, if you’re going to do environmental investments – things that are worth doing even in flush times – it’s hard to think of a better time to do them than when the resources needed to make those investments would otherwise have been idle.

Crossposted from The Stars Hollow Gazette

Zero Job Growth Latest Bleak Sign for U.S. Economy

By SHAILA DEWAN, The New York Times

Published: September 2, 2011

August brought no increase in the number of jobs in the United States, a signal that the economy has stalled and that inaction by policy makers carries substantial risk.

…

Mr. Obama, who instructed the Environmental Protection Agency on Friday to pull back on more stringent standards on ozone emissions in response to complaints that they would hurt hiring, is expected to propose tax incentives to promote hiring and infrastructure spending. He also is expected to renew the payroll tax cut and extend unemployment benefits, both of which are set to expire.

…

Much of the movement that did appear in the jobs report went in the wrong direction. Revised numbers showed that job growth in June and July was smaller than previously indicated. In August, wages fell and the average number of hours worked inched down – a sign that businesses had less for employees to do.

Governments continued to cut jobs, the Labor Department reported. Small gains at the state level were attributed in part to the return of workers from the government shutdown in Minnesota. Local governments lost 20,000 jobs as they continued to struggle with budget shortfalls and the disappearance of federal stimulus money.

Black unemployment: Highest in 27 years

By Annalyn Censky @CNNMoney

September 2, 2011: 3:13 PM ET

Black unemployment surged to 16.7% in August, its highest level since 1984, while the unemployment rate for whites fell slightly to 8%, the Labor Department reported.

…

Overall, black men have it the worst, with joblessness at a staggeringly high 19.1%, compared to 14.5% for black women.

Black unemployment has now remained above 10% for four straight years, and the given current economic sluggishness, some experts say it’s safe to predict the rate will remain above 10% for four more years.

White House Expects Persistently High Unemployment

By JACKIE CALMES, The New York Times

Published: September 1, 2011

The White House budget office forecast on Thursday that unemployment would remain at 9 percent through the 2012 presidential election year, an outlook that it said calls for the sort of the job-creating tax cuts and spending President Obama will propose next week.

The unemployment outlook for the next 16 months reflects a 9.1 percent rate this year, down slightly from the 9.3 percent forecast when President Obama made his annual budget request in February. Next year, the projected jobless rate is 9 percent, up from 8.6 percent in the February forecast.

Unemployment will not return to the 5 percent range until 2017, the budget office said, reflecting the intensity of the hangover from the most severe recession since the Great Depression.

While the budget office’s unemployment forecast for 2012 is no surprise given similar private sector projections, it amounts to the White House’s official acknowledgement of the political hurdle in Mr. Obama’s path to re-election.

Labor unions adjust to new reality under Obama

By SAM HANANEL, Associated Press

3 hours ago

It’s a far cry from the early optimism unions had after Obama came into office. Back then, unions hoped a Democratic-controlled Congress would pass legislation to make it easier for unions to organize workers. But business groups fought that proposal hard, and it never came to a vote.

Union leaders grew more disappointed when the president’s health care overhaul didn’t include a government-run insurance option. Then Obama agreed to extend President George W. Bush’s tax cuts for the wealthy.

Obama came out in favor of trade agreements with South Korea, Colombia and Panama that most unions say will cost American jobs. Despite campaigning in favor of raising the minimum wage from $7.25 to $9.50 an hour, Obama hasn’t touched the issue since taking office.

…

(L)abor’s frustration with Obama reached new heights this summer as Trumka accused him of working with tea party Republicans on deficit reduction instead of “stepping up to the plate” on jobs.

Labor unions and other liberal groups want Obama to push a major stimulus bill with hundreds of billions of dollars in new spending on infrastructure projects like roads, bridges and transit systems. Even if it’s rejected in the GOP-controlled House, unions want to see Obama show more leadership and take a bold stand in favor of stimulus spending.

That’s not likely to happen.

…

(U)nions have begun shifting money and resources out of Democratic congressional campaigns and back to the states in a furious effort to reverse or limit GOP measures that could wipe out union rolls.

The AFL-CIO’s president, Richard Trumka, says it’s part of a new strategy for labor to build an independent voice separate from the Democratic Party.

Union donations to federal candidates at the beginning of this year were down about 40 percent compared with the same period in 2009, according to the Center for Responsive Politics. Last month, a dozen trade unions said they would boycott next year’s Democratic National Convention in Charlotte, N.C., over frustration on the economy and to protest the event’s location in a right-to-work state.

Good luck with that Labor vote Barack.  Thanks for nothing.

So I’m almost done with my ringleader gig at TDS/TCR.  I like those diaries (call me old school) because they are fast paced and interactive which is something I’ve never been able to duplicate in this platform, partly because I have so much work creating content and scheduling that I’m not often able to stick around.

In any event, Kyle the Mainer was unaware of the plight of the International Space Station and since the repeat Thursday included Stephen’s interview with the crew of STS-135 I made that the focus.

The plan was that going forward there would be a semi-permanent crew of 6 at the International Space Station supported by regular visits of Russian Progress unmanned supply capsules and the crew rotated 3 at a time by manned Soyuz capsules with 2 extra attached to the Station as ‘life boats’.

On August 24th, about 6 days after this interview was taped, a Russian Soyuz launch vehicle (as opposed to capsule) with a Progress supply payload crashed shortly after launch.

No big dead said people at the time, we’ll just stretch out supplies and launch another one soon.  They even made jokes about one of the Russians having to borrow flight suits from an American.

It turns out that it was much more serious.  You see, it was the second such failure in a row and the Soyuz launch program was suspended indefinitely a day later.

Not only that, the delay of the planned September crew rotation mission is a real problem which, as reported Monday the 29th could result in the complete evacuation of the ISS by November.

The problem you see is that the Hydrogen Peroxide component of the maneuevering thruster fuel on a Soyuz capsule degrades over time.  Quite quickly in fact, it only has a safe life of 210 days.  Both the ‘life boat’ re-entry vehicles are near their limit and must be replaced by units traveling with crew replacements.

So there is talk of evacuation and leaving the Station unmanned for the first time in over 10 years.  There are 2 problems with this- The first is component failure.  While the Station can be controlled from the ground, if there is a problem requiring maintenance the chances of having the entire platform de-orbit and burn up in the atmosphere start at 10% in the first 6 months and rise to 50% after a year.

The second problem is that there are already people questioning the utility of the ISS and the need for a crew at all.

So this is why the Space Station is screwed.

Addendum:

I may be unduly pessimistic, it’s entirely possible that the launch failures are due to procedural errors as the Russians insist and that they will be corrected in time for the next scheduled launch in late September.  On the other hand it’s not at all encouraging that one of the most prominent voices in favor of shutting down the ISS is the Director of the entire Russian program.

Crossposted from The Stars Hollow Gazette

thereisnospoon says never ascribe to malice what can be explained by ignorance and pride.  Me, I’m not so charitable.

But Markos’ key critique of the Administration is well-taken. First, everything they do is almost designed to make them look craven and weak. Being accommodating is one thing; being constantly humiliated like Charlie Brown kicking a football is quite another.

And it’s not even working to attract independents. It’s terrible politics, in addition to being terrible policy.

Keep in mind that these are some of the top political professionals in the entire United States advising the Administration on these maneuvers. Which means that either they’re utterly incompetent idiots as Digby and I have repeatedly argued, or they’re paid-off corrupted tools of a grand global elitist conspiracy. Personally, I find the latter idea preposterous hogwash, a comforting opium for the sorts of people who want to believe that there are no solutions, or that the solutions are as as easy as grabbing pitchforks and guillotines and letting blood run in the streets. Yes, there’s rampant criminality–in Wall Street’s case, even an entire culture of criminality. And those criminals should be held to account. But that doesn’t mean that the entire governmental and financial apparatus–or even most of it–is run either by elite criminals or their paid-off lackeys. It just doesn’t work that way, as anyone who has actually dealt with the individual policy makers in question knows.

…

It’s just really hard–and frankly terrifying–for a lot of people to believe that we’re really governed by selfish, short-sighted, incompetent morons. That our lives are really and truly dominated by idiots who set their eyes on a shiny object like next quarter’s profit statements, or moving the polling dial with white female independents aged 35-65 by five points, or some other stupidity, so much that they miss the big picture, and then grab as much of the loot as possible and make the best of the situation after everything smashes to bits. That’s understandable. But if policy makers want to limit the growing number of conspiracy mavens out there, it might be advisable for them to try putting competent people in charge for a change. Otherwise, they’ll get the paranoid public attitudes toward them that they deserve.

More–

Seems like no matter which door you peek behind, a neoliberal is behind it with a wrong answer. And when they’re called on being wrong, there’s another neoliberal waiting behind the next door with another wrong answer. In fact, there’s an endless string of stupid and/or corrupt business school graduates waiting to tell us that the banking sector crisis is the fault of social security, labor unions, universal healthcare, strange swarthy Greeks, individual deadbeat homeowners, welfare queens driving Cadillacs, the Environmental Protection Agency, and anyone and anything else they care to dream up. Anyone, of course, but the banks, business school grads and Milton Friedman acolytes who drove this car straight in the ditch and refuse to take any responsibility for having been right behind the wheel the whole time.

Herr Doktor Professor–

Zero job growth, with unemployment still at nosebleed levels. Meanwhile, the interest rate on 10-year US bonds is down to 2.04%, and it’s negative on inflation-protected securities.

…

Too bad there weren’t any prominent economists warning that the obsession with short-term deficits was a terrible mistake, that austerity would undermine hopes of recovery. Oh, wait.

The awful thing is that those of us who warned about all this – based not on some unorthodox doctrine, but on basic textbook macroeconomics – weren’t so much argued down as just ignored. Somehow, those with actual power were convinced that fiscal austerity wasn’t just an option but the only option, and that anyone arguing with that – even people like me and Joe Stiglitz, who had a few easy-to-understand credentials – were just not part of the serious discussion.

Nobel Prizes?  They mean nothing.  Look at Obama’s.

Is austerity killing Europe’s recovery?

By Howard Schneider, The Washington Post

Published: September 1

(T)he budget cutting has been coupled with a reluctance by the the European Central Bank to stimulate economic growth like the Federal Reserve has in the United States; the ECB has instead raised interest rates twice this year to contain inflation.

Those steps have sucked hundreds of billions of dollars out of a European economy that may be edging towards recession.

Such a downturn, by choking off government revenues and increasing the demand for public services, could put struggling countries such as Spain and Italy at risk of missing the very deficit-reduction targets that budget cuts and other austerity measures were meant to achieve.

…

In Spain, for instance, where the parliament this week is voting to place constitutional limits on government deficits in a bid to reassure global investors, some analysts say the country is taking the wrong medicine. Spain’s debt level remains lower than even that of Germany, the continent’s strongest economy and one of the world’s benchmark credit risks. But Spain’s unemployment rate is more than double that of the United States, and some economists say the country needs a healthy dose of policies to restore growth, not constrain it.

…

Recent statistics showed that the combined economy of euro-zone countries nearly stalled from April through July, with growth of just 0.2 percent. Germany’s economy, one of the main props of the region, grew just 0.1 percent. Analysts project Spain’s annual growth at about 0.7 percent for the year, far below prior government estimates of 2.3 percent.

…

With the euro-zone economy slowing and governments aggressively cutting, the ECB may need to concede its rate increases and tight money were a mistake…

Like that will ever happen.

Crossposted from The Stars Hollow Gazette

WikiLeaks: Iraqi children in U.S. raid shot in head, U.N. says

By Matthew Schofield, McClatchy Newspapers

Posted on Wednesday, August 31, 2011

A U.S. diplomatic cable made public by WikiLeaks provides evidence that U.S. troops executed at least 10 Iraqi civilians, including a woman in her 70s and a 5-month-old infant, then called in an airstrike to destroy the evidence, during a controversial 2006 incident in the central Iraqi town of Ishaqi.

The unclassified cable, which was posted on WikiLeaks’ website last week, contained questions from a United Nations investigator about the incident, which had angered local Iraqi officials, who demanded some kind of action from their government. U.S. officials denied at the time that anything inappropriate had occurred.

But Philip Alston, the U.N.’s special rapporteur on extrajudicial, summary or arbitrary executions, said in a communication to American officials dated 12 days after the March 15, 2006, incident that autopsies performed in the Iraqi city of Tikrit showed that all the dead had been handcuffed and shot in the head. Among the dead were four women and five children. The children were all 5 years old or younger.

(h/t Think Progress)

Tip o’ the Hat to Art Pronin @ Taylor Marsh who introduces it thusly-

PPP polls have been dead on accurate for several years now. And boy does their latest show trouble for Obama 2012. Their latest has 54 percent disapproving of the president. I sure wish the folks in the WH would read real polls sometime.

Obama keeps hitting record lows

Tom Jensen, Public Policy Polling

Tuesday, August 30, 2011

In our national polling for Daily Kos Barack Obama has hit a record low approval rating 3 weeks in a row now. He’s gone from 43/53 to 42/53 to now 42/54 in our poll this week.

What might be most noteworthy is this week’s poll is how bad Obama’s numbers are with a few key and usually dependable Democratic constituencies. He’s under water in union households at 44/47. He’s also under water with voters under 30 at 45/48. The Northeast tends to a pretty dependable region for Democrats but Obama’s under water there at 47/49. Obama’s usually been able to hold his ground with female voters but he’s under water with them too at 45/49. And even with African Americans his approval rating’s down to 76%, about as low as we’ve ever found it.

…

(L)ast week … Democratic enthusiasm was at a year long low. Now it’s at a lower year long low with only 47% of the party’s voters ‘very excited’ about voting this year compared to 58% of Republicans.

…

Obama trails a generic opponent 48-44 on our national poll this week, including 51-37 with independents.

Public Policy Polling August 25 – 28

For readers who are allergic to orange I’ve done the best I could.  There are no comments at either link.

I’m sure those Independents and base voters are just champing at the bit to flock back to him after the spectacular cave on the timing of his clueless “Jobs” agenda speech, putting licking John Boehner’s boots before every Red Blooded ‘murkan’s love of the NFL.

You guys are so much smarter than all us serfs and peons.

“When people feel uncertain, they’d rather have somebody that’s strong and wrong than somebody who’s weak and right.” – Bill Clinton

Weak AND Wrong ain’t even in the game.  I’m afraid Archangel M is correct- Obama Concedes Election More Than a Year Before It Happens.

Electoral victory my ass.

Crossposted from The Stars Hollow Gazette

Barry Ritholtz is a contributor to Seeking Alpha and is notable for his insights on the housing market and his book Bailout Nation.

Now this video is quite long, 24 minutes, but it has a lot of insight and if (like me) your cable is still out and you’re desperate for anything slightly resembling TV you might find it interesting.

lambert at Corrente (the blog that everybody hates and nobody reads) was taken by the fashion statement.  I only hope orange becomes the ‘in color’.

I must admit on my system it’s pretty cranky and I had to goose it past the second break.  Try moving the slider forward if you get lost in buffer land, don’t forget to restart the video.

Title quote @ aboot 4:09.  lambert’s fave @ 4:46ish.  Folsom Prison Blues below.

Crossposted from The Stars Hollow Gazette

It’s a topic I’ve addressed before-

How to feel poor on $500,000 a year

Mon Sep 20, 2010 at 06:46:14 AM EDT

In Which Mr. Deling Responds to Someone Who Might Be Professor Todd Henderson

J. Bradford DeLong, Department of Economics, U.C. Berkeley

September 18, 2010

Professor Henderson’s problem is that he thinks that he ought to be able to pay off student loans, contribute to retirement savings vehicles, build equity, drive new cars, live in a big expensive house, send his children to private school, and still have plenty of cash at the end of the month for the $200 restaurant meals, the $1000 a night resort hotel rooms, and the $75,000 automobiles. And even half a million dollars a year cannot (get) you all of that. … (W)hy does he think that that is the way things should be? … (H)ere is the dirty secret: Professor Henderson thinks that that is the way things should be because he knows people for whom that is the way it is. … Of the 100 people richer than he is, fully ten have more than four times his income. And he knows of one person with 20 times his income. He knows who the really rich are, and they have ten times his income: They have not $450,000 a year. They have $4.5 million a year. And, to him, they are in a different world. And so he is sad. He and his wife deserve to be successful. And he knows people who are successful. But he is not one of them–widening income inequality over the past generation has excluded him from the rich who truly have money.

I’ll note that Mr. Deling has respectfully redacted the name of the offending asshole, but I’m free to shout it from the roof tops.

So what has changed?  Things have gotten worse of course!

"Who rules America? Breaking down the top 1%"

by Gaius Publius, Americablog

on 8/29/2011 10:55:00 AM

(T)his article breaks down the top 1% of American wealth into strata, and talks about the differences. It’s a really instructive piece, and an easy read.

The Lower Half of the Top 1% The 99th to 99.5th percentiles largely include physicians, attorneys, upper middle management, and small business people who have done well. Everyone’s tax situation is, of course, a little different. On earned income in this group, we can figure somewhere around 25% to 30% of total pre-tax income will go to Federal, State, and Social Security taxes, leaving them with around $250k to $300k post tax. This group makes extensive use of 401-k’s, SEP-IRA’s, Defined Benefit Plans, and other retirement vehicles, which defer taxes until distribution during retirement. Typical would be yearly contributions in the $50k to $100k range, leaving our elite working group with yearly cash flows of $175k to $250k after taxes, or about $15k to $20k per month. Until recently, most studies just broke out the top 1% as a group. Data on net worth distributions within the top 1% indicate that one enters the top 0.5% with about $1.8M, the top 0.25% with $3.1M, the top 0.10% with $5.5M and the top 0.01% with $24.4M. Wealth distribution is highly skewed towards the top 0.01%, increasing the overall average for this group. The net worth for those in the lower half of the top 1% is usually achieved after decades of education, hard work, saving and investing as a professional or small business person. While an after-tax income of $175k to $250k and net worth in the $1.2M to $1.8M range may seem like a lot of money to most Americans, it doesn’t really buy freedom from financial worry or access to the true corridors of power and money. That doesn’t become frequent until we reach the top 0.1%.

…

(T)he people above, the “lower half of the top 1%”, still work for a living. I would put them at the top level of the “retainer class” – wealthy, but still servants.

In Roman times, these would be the very-well-off top-level administrators and professionals, many of them ex-Greek slaves, who service the real Masters (the emperor and wealthier senatorial families) and oversee the constant flow of peasant wealth upwards, from which they get a hand-me-down share.

For the author, the key American economic super-strata are:

• 99.0%-99.5%  –  The lower half of the top 1%
• 99.5%-99.9%  –  Most of the upper half of the top 1%
• The top 0.1%  –  The Big Boyz (and Girlz, but very few of those)
• The top 0.01%  –  Where most of the real wealth is concentrated

The first sub-group has a lot of retirement anxiety, as the article makes clear; and the second has some guilt. Guess where the power lies.

I like Gaius.  I like what he writes and I understand from TheMomCat who has met him that he’s a very nice guy.  He has another piece earlier that touches on the same subject-

$2 of every $3 in income growth from 2002-2007 went to the upper 1%

by Gaius Publius, Americablog

on 8/25/2011 08:21:00 PM

Not the upper 10%; the upper 1%. (2002 is the bottom of the tech crash; 2007 is just pre-the bank crash.)

Another bad stat – In 1967, 97% of prime age men with only HS diplomas were working. Today, the number is 76%. Stunning; the middle class (the real one, not the faux-middle class we see on TV) is collapsing hard from within.

All of this comes via Don Peck and his new Atlantic article, “Can the Middle Class Be Saved?“.

…

Peck makes several points that regular readers will be familiar with – in particular, the notion that the super-rich (Our Betters) have not only delinked their expenses from the U.S. economy – they’re started to delink their incomes from it as well.

…

The run-up in wealth inequality is the big story of this generation; in my view, a world-historical event that will have a world-historical outcome if we’re not careful. This wealth will be redistributed, one way or another, in this generation or a later one.

Fascinating stuff.  I encourage you to click the links.

Crossposted from The Stars Hollow Gazette

I imagine that today one can hardly get away from reports about the aftermath of Irene.  I say I magine it because the most serious effects here in Stars Hollow were losing a chunk of shingles (pretty expensive but not devastating) and cable TV (an annoyance) so I cannot report from first hand knowledge.

It’s easy to forget what happened a mere 6 years ago.

Hurricane Katrina makes landfall

The New York Times

Published: Monday, August 29, 2005

NEW ORLEANS, Louisiana – Hurricane Katrina slammed ashore early Monday and charged toward low-lying New Orleans with 150-mph (240-kph) winds and the threat of an extremely dangerous storm surge.

Katrina turned slightly to the east before slamming ashore early Monday with 145-mph (233-kph) winds, providing some hope that the worst of the storm’s wrath might not be directed at this vulnerable, below-sea-level city.

But National Hurricane Center Director Max Mayfield warned that New Orleans would be pounded throughout the day Monday and that Katrina’s potential 20-foot ( 6-meter) storm surge was still more than capable of swamping the city.

Has New Orleans recovered?  Not as much as you might hope.  As noted in last night’s Evening Edition–

42 6 years later, Lower 9th Ward still bleak

By CAIN BURDEAU, Associated Press

5 hrs ago

And let’s not forget this-

Officers Guilty of Shooting Six in New Orleans

By CAMPBELL ROBERTSON, The New York Times

Published: August 5, 2011

NEW ORLEANS – In a verdict that brought a decisive close to a case that has haunted this city since most of it lay underwater nearly six years ago, five current and former New Orleans police officers were found guilty on all counts by a federal jury on Friday for shooting six citizens, two of whom died, and orchestrating a wide-ranging cover-up in the hours, weeks and years that followed.

The defendants were convicted on 25 counts, including federal civil rights violations in connection with the two deaths, for the violence and deception that began on the Danziger Bridge in eastern New Orleans on Sept. 4, 2005, just days after Hurricane Katrina hit and the levees failed.

“The officers convicted today abused their power and violated the public’s trust during the aftermath of Hurricane Katrina, exacerbating one of the most devastating times for the people of New Orleans,” Attorney General Eric H. Holder Jr. said.  “I am hopeful today’s verdict brings justice for the victims and their family members, helps to heal the community and contributes to the restoration of public trust in the New Orleans Police Department.”

Crossposted from The Stars Hollow Gazette

“Barack Obama’s a friend,” he said, “and when you place him in the context of those who are running against him right now, he is a giant.”

(h/t Art Pronin @ Taylor Marsh)

In context, the lesser of two evils is still evil.  Without making politicians and other elites pay for their failures there is no incentive for them to change behavior.

Economics calls this Moral Hazard.

Crossposted from The Stars Hollow Gazette

Cassandra Herr Doktor Professor–

It’s kind of annoying when people claim that I said the stimulus would work; how much noisier could I have been in warning both that it was grossly inadequate, and that by claiming that a far-too-small stimulus was just right, Obama would discredit the whole idea?

Of course, the WSJ also said that the stimulus wouldn’t work. The difference was in how it was supposed to fail.

The WSJ view was that federal borrowing would crowd out private spending by driving interest rates sky-high, that the bond vigilantes would destroy the economy. Note that when the linked editorial was published, the 10-year rate was at 3.7%, with the Journal in effect predicting that it would go much higher.

My view was that government borrowing in a liquidity trap does not drive up rates, and indeed that rates would stay low as long as the economy stayed depressed.

How it turned out.

That’s a pretty clear test; among other things, you would have lost a lot of money if you believed the WSJ view.

Inflation is another issue; the WSJ kept telling readers that a big inflationary surge was coming. Commodity prices have muddied this issue to some extent, but even so actual developments on the inflation front have been a lot closer to what Keynesians were predicting than to the right-wing line.

Of course, I would much rather have actually had adequate policy than be vindicated by the form of our economic failure.

If you pay attention to economics it’s hard not to predict a Democratic defeat in 2012 of epic proportions starting at the top with Barack Obama.

Fact:  The US economy has just entered or is about to enter the second leg of at least a Double Dip Recession.

Second-quarter growth cut on inventories, trade

By Lucia Mutikani, Reuters

WASHINGTON | Fri Aug 26, 2011 12:43pm EDT

(Reuters) – U.S. economic growth in the second quarter was slower than previously thought and consumer confidence sank in August, further reducing prospects of a strong pick-up in output in the second half of the year.

Gross domestic product expanded at an annual rate of 1 percent, the Commerce Department said on Friday, as business inventories and exports were less robust. That was a downward revision of the government’s prior 1.3 percent growth estimate.

Separately, the Thomson Reuters/University of Michigan consumer sentiment index fell to 55.7 this month from 63.7 in July.

…

The economy advanced just 0.4 percent in the first quarter. Economists had expected second-quarter GDP to be marked down to a 1.0 percent rate.

The second GDP estimate for the quarter confirmed growth almost stalled in the first six months of this year.

Chance of Recession Is as High as 80%: Study

By: John Melloy, Executive Producer, Fast Money & Strategy Session, CNBC

Published: Thursday, 25 Aug 2011 | 6:55 PM ET

The Philly Fed puts a recession probability at 85.7 percent, while the consumer survey puts contraction chances at 80 percent, according to Bank of America’s probability model, which uses a so-called Bayesian technique that “tests if the economy is in a recession based on the interaction of variables that are associated with turns in the business cycle.”

…

According to their data, the Philly Fed has accurately forecast four of the last seven recessions. The older Michigan survey has accurately signaled three of the last eight recessions.

“It’s a 100 percent chance,” said Peter Schiff, CEO & Chief Global Strategist of Euro Pacific Capital. “In fact the recession might have already started.”

World Facing 50% Danger of Another Recession, Nobel Laureate Spence Says

By Robyn Meredith, Bloomberg News

Aug 25, 2011 7:00 PM ET

“I’m quite worried,” Spence said in a Bloomberg Television interview in Hong Kong yesterday. “A combined downward dip in Europe and America, which is a good chunk of the industrialized economies, I’m quite sure will take down growth in China particularly, and that will then immediately spread to the rest of the emerging economies.” He put the likelihood of such a scenario “at about 50 percent.”

…

China “cannot make up for the kind of loss of demand that would go with a downturn in the advanced economies,” Spence said. Because Chinese inflation is running at an official rate of 6.5 percent, a figure many economists say is understated, Beijing would be “pretty close to nuts” to fuel further credit growth, he said.

QE3 Is Coming by Year End: Roubini

By: Margo D. Beller, CNBC

Published: Thursday, 25 Aug 2011 | 5:49 PM ET

Roubini, also known as “Dr. Doom,” puts the chance of a double-dip recession at 50 percent.

…

While bad economic data on housing, jobs and home sales suggests a double-dip in the U.S., Ireland, Portugal, Italy and Spain “are already back in recession or never got out of the first one.” Data also suggest France and Germany are in “borderline contraction” while the U.K. “has not had any economic growth for three quarters.”

With Economic Pessimism Rising, Americans Move Towards Keynesianism

By: Jon Walker, Firedog Lake

Friday August 26, 2011 9:30 am

(T)here is now a slim plurality of the country ready to embrace real spending on jobs programs. A five point increase over two months is a rather impressive amount of movement on what could be considered a fairly fundamental question of government ideology.

More government spending to create jobs is exactly what Keynesian economics prescribes. The fact that, without realizing it, more Americans are open to the idea of Keynesian spending to help the economy is remarkable given how the top leadership in both political parties have trumpeted the importance of deficit reduction over all else for so long. And Republicans have been openly disparaging Keynes, just as they did in the Great Depression.

This change in attitudes is a reflection of just how seriously worried regular people are right now about what they perceive as the worsening state of the economy. Since the last time Pew asked this (my link- ek) question the number of people who think the economy is getting worse has increase by over 10 points according to Gallup’s tracking poll.

AP-GfK poll: Views on economy, Obama role sour

By TOM RAUM, Associated Press

22 hrs ago

The survey found that 86 percent of adults see the economy as “poor,” up from 80 percent in June. About half – 49 percent – said it worsened just in the past month. Only 27 percent responded that way in the June survey.

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As the public’s outlook on the economy dips, so has approval for the president’s economic stewardship.

More than 6 in 10 – 63 percent – disapprove of Obama’s handling of the economy. Nearly half, or 48 percent, “strongly” disapproved. Approval of his economic performance now stands at just 36 percent, his worst approval rating on the issue in AP-GfK polling.

Among Democrats, 58 percent approve of the president’s handling of the economy, down from 65 percent in June. Among Republicans, approval dipped to 9 percent from 15 percent.

Just 51 percent consider Obama a strong leader, down from 60 percent in June and 65 percent following the capture and death of Osama bin Laden in May. In June, 85 percent of Democrats in the poll called him a strong leader. Now, the number is down to 76 percent.

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Some 75 percent in the poll said the country is heading in the wrong direction, up from 63 percent in June. Among Democrats, 61 percent chose “wrong direction” – up from 46 percent in June.

In a new high, 52 percent of all adults said they disapprove of his overall performance – 52 percent, up from 47 percent in June. Among Democrats, approval fell 8 points, to 74 percent from 82 percent in June. Among Republicans, it fell to 11 percent from 22 percent.

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Unemployment increased to 9.2 percent in July, up from 9.1 percent in June. And most economists don’t expect it to decline much below 8.5 percent by the November 2012 presidential election. No president has won re-election with a jobless rate that high since Franklin D. Roosevelt in 1936.

Stock Tip: Be Worried. Workers are Consumers.

Robert Reich

Friday, August 19, 2011

We’re slouching toward a double dip, and the stock market is imploding, because consumers – whose spending is 70 percent of the economy – have reached their limit.

It’s not just the jobless who can’t spend. It’s mainly people with jobs. Median wages continue to fall. Weekly wages in July for Americans with jobs were 1.3 percent lower than eight months before.

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Many on Wall Street are scratching their heads, trying to understand why the stock market is plummeting. After all, they tell themselves, corporate earnings are still near record highs.

But it’s becoming clear those earnings can’t be sustained. Corporate earnings are the highest they’ve been relative to worker wages and benefits since just before the Great Depression. And the richest 1 percent of Americans are getting a higher percent of total income since just before the Great Depression.

Get it? It was only a matter of time before the boom on Wall Street turned into a bust. Economic booms cannot continue without American workers participating in them.

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What will happen to the Dow Jones Industrial Average when corporate earnings revert to their historic average relative to American wages? I’ve seen various estimates. They’re not pretty.

Bernanke “optimistic.” Philly Fed says another recession 85% sure; Roubini says it’s coming

by John Aravosis, Americablog

on 8/26/2011 10:40:00 AM

Anyone who votes to cut any spending this year or next, or signs such legislation, shouldn’t be re-elected.  Period.  This is criminal that Congress and the President just cut spending, and now plan on doing it again in the super committee.  It’s equally criminal that the President refused to adequately defend the stimulus (and refused to push for a big enough stimulus the first time), then embraced deficit reduction over a year ago, when the economy was still teetering on the brink.

Every single one of them, the Democrats in Congress, the Republicans in Congress, and the President own this double dip recession if it comes, as they do the already crappy economy we have.  And I don’t know how you vote for anyone who is supporting legislation that will literally depress the economy further.

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We need another massive stimulus now. Or a lot of people are going to lose their jobs and their homes, and it will be the fault of every single politician in Washington, from the White House to the Congress.  The President’s constant pandering to conservative Dems and Republicans is no longer academic.  It’s  having real world consequences.

A lot of Politicians are going to lose their jobs too, including Barack Obama.

Electoral victory my ass.