March 2012 archive

You’ve been slimed.

I’m not a vegetarian, though I don’t eat much meat because I don’t see the point of it.  Some hummus and a nice ciabatta (that’s a Silence of the Lambs reference, but the important thing about my jokes is that they amuse me).

Still, if you are a vegetarian you don’t have to worry about things like this-

The other day my email got hijacked and I had to send a warning to all the people in my contact list.  I was pleasantly surprised that my address for CSI Bentonville (a vegetarian of my online acquaintance) is still good and she seems to be well and happy.

She sent me this link to a documentary which is available today and tomorrow.

And also there is this-

USDA Undersecretary for Pink Slime Hagen refusing to talk to media while defending beef additive

By John Aravosis, Americablog

3/30/2012 11:04:00 AM

Since these GOP governors and the USDA “safety” director are in theory so supportive of the free market, what’s to fear about clearly labeling products that include Pink Slime and letting consumers decide. Surely there’s nothing to fear since it’s such a wonderful product. Right? And why stop at school lunches — the entire administration should be serve 100% pink slime in its cafeterias and lead by example.

Someone please remind me why Dr. Elisabeth Hagen still has a job with this administration? Obama needs to do a lot better than this for a job as important as food safety. But maybe he likes Pink Slime and thinks it’s OK to feed to his family?

Governing By Crisis

While everyone has been focused on the Supreme Court hearings over the constitutionality of the individual mandate of the Patient Protection Affordable Care Act and the tragic murder of a black teenage boy in Florida by a “gun toting vigilante”, the Republican held House of Representatives has been up to its usual shenanigans threatening not only to shut down any infrastructure construction but now planning to shut down the government entirely. Even though they have vowed to defeat the current resident of the Oval Office, knowing they have a “friend”, the Republicans continue to make themselves more unpopular with the majority of their own constituents. This is what they have been up to while the traditional media focused on SCOTUS and a possible racially motivated murder:

The House voted down the proposed White House budget by a vote of 0 – 414. I suppose one could call that “bipartisan.” Nust up was the annual ritual of the Black Caucus Budget which failed but at least managed to garner 107 votes. Then they rejected the “Bowles-Simpson” Budget proposal, which really wasn’t, giving it only 38 votes.

Thus they finally came to Rep. Paul Ryan’s budget, which is a revision of his budget that was passed last year and soundly rejected by both sides of the aisle in the Senate. The current bill passed with a partisan vote of 228-191. All but 10 Republicans voted against the bill mostly because it didn’t cut enough. The bill has no chance of passing the Senate but its passage reignites the same issues of cutting taxes for the rich on the backs of those who can least afford it:

He again proposes tax cuts for the rich at the expense of seniors, the disabled, and children. He would cut taxes by roughly $3 trillion $4.6 trillion (according to a Tax Policy Center analysis just put out), with most of the tax cuts going to people earning more than $200,000. His proposed cuts to Medicare, Medicaid, and food assistance would all fall heavily on seniors, the disabled, and children. Ryan’s budget is doubly bad for children because his proposed cuts to public investments (mostly infrastructure and education) would cause children to inherit a country with crumbling roads and bridges and to enter the labor market with fewer skills.

It would also cut non-defense discretionary spending to lows not seen in the 50’s but raise the defense budget that the Pentagon says it doesn’t need:

Because it doles out trillions of dollars in tax cuts to the rich and corporations, the budget approved by House Republicans today – authored by Budget Committee Chairman Paul Ryan (R-WI) – would increase deficits and drive up the national debt. In fact, under the plan, “deficits would never drop below 4.4 percent of GDP, and would rise to more than 5 percent of GDP by 2022.”

Those increases would come despite the gigantic spending cuts that Ryan has in mind, which would eviscerate the social safety net and non-defense discretionary spending (even while the budget increases defense spending). As the Economic Policy Institute noted today, the plan Republicans adopted would drive discretionary spending down to its lowest level in more than 50 years.

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The House also refused to pass the very bipartisan Senate Transportation bill managing only to pass a stop gap 90 day bill to fund current transportation and construction projects:

Despite several efforts to advance a bipartisan Senate bill championed by (Sen. Barbara) Boxer, House leaders opted for a three-month extension while they try to break a deadlock that has stalled their own proposal to fund transportation by expanding offshore oil drilling.

The extension leaves transportation financing in an increasingly precarious position.

This won’t win them any votes in the Fall

On This Day In History March 30

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

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

March 30 is the 89th day of the year (90th in leap years) in the Gregorian calendar. There are 276 days remaining until the end of the year.

On this day in 1867, U.S. Secretary of State William H. Seward signs a treaty with Russia for the purchase of Alaska for $7 million. Despite the bargain price of roughly two cents an acre, the Alaskan purchase was ridiculed in Congress and in the press as “Seward’s folly,” “Seward’s icebox,” and President Andrew Johnson’s “polar bear garden.”

Alaska Purchase

Russia was in a difficult financial position and feared losing Russian America without compensation in some future conflict, especially to the British, whom they had fought in the Crimean War (1853-1856). While Alaska attracted little interest at the time, the population of nearby British Columbia started to increase rapidly a few years after hostilities ended, with a large gold rush there prompting the creation of a crown colony on the mainland. The Russians therefore started to believe that in any future conflict with Britain, their hard-to-defend region might become a prime target, and would be easily captured. Therefore the Tsar decided to sell the territory. Perhaps in hopes of starting a bidding war, both the British and the Americans were approached, however the British expressed little interest in buying Alaska. The Russians in 1859 offered to sell the territory to the United States, hoping that its presence in the region would offset the plans of Russia’s greatest regional rival, Great Britain. However, no deal was brokered due to the American Civil War.

Following the Union victory in the Civil War, the Tsar then instructed the Russian minister to the United States, Eduard de Stoeckl, to re-enter into negotiations with Seward in the beginning of March 1867. The negotiations concluded after an all-night session with the signing of the treaty at 4 a.m. on March 30, 1867, with the purchase price set at $7.2 million, or about 2 cents per acre ($4.74/km2).

American public opinion was generally positive, as most editors argued that the U.S. would probably derive great economic benefits from the purchase; friendship of Russia was important; and it would facilitate the acquisition of British Columbia.

Historian Ellis Paxson Oberholtzer summarized the minority opinion of some newspaper editors who opposed the purchase:

   “Already, so it was said, we were burdened with territory we had no population to fill. The Indians within the present boundaries of the republic strained our power to govern aboriginal peoples. Could it be that we would now, with open eyes, seek to add to our difficulties by increasing the number of such peoples under our national care? The purchase price was small; the annual charges for administration, civil and military, would be yet greater, and continuing. The territory included in the proposed cession was not contiguous to the national domain. It lay away at an inconvenient and a dangerous distance. The treaty had been secretly prepared, and signed and foisted upon the country at one o’clock in the morning. It was a dark deed done in the night…. The New York World said that it was a “sucked orange.” It contained nothing of value but furbearing animals, and these had been hunted until they were nearly extinct. Except for the Aleutian Islands and a narrow strip of land extending along the southern coast the country would be not worth taking as a gift…. Unless gold were found in the country much time would elapse before it would be blessed with Hoe printing presses, Methodist chapels and a metropolitan police. It was “a frozen wilderness.

While criticized by some at the time, the financial value of the Alaska Purchase turned out to be many times greater than what the United States had paid for it. The land turned out to be rich in resources (including gold, copper, and oil).

Senate debate

When it became clear that the Senate would not debate the treaty before its adjournment on March 30, Seward persuaded President Andrew Johnson to call the Senate back into special session the next day. Many Republicans scoffed at “Seward’s folly,” although their criticism appears to have been based less on the merits of the purchase than on their hostility to President Johnson and to Seward as Johnson’s political ally. Seward mounted a vigorous campaign, however, and with support from Charles Sumner, chairman of the Senate Foreign Relations Committee, won approval of the treaty on April 9 by a vote of 37-2.

For more than a year, as congressional relations with President Johnson worsened, the House refused to appropriate the necessary funds. But in June 1868, after Johnson’s impeachment trial was over, Stoeckl and Seward revived the campaign for the Alaska purchase. The House finally approved the appropriation in July 1868, by a vote of 113-48.

If we ever stop talking about Hoodies…

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

The New York Times Editorial: Activism and the Roberts Court

The ideological nature of the health care case was obvious on the last day of oral argument. By the time the proceedings were over, much of what the conservative justices said in court seemed like part of a politically driven exercise – especially because the issues addressed on Wednesday were not largely constitutional in nature. In fact, they were the kinds of policy questions that are properly left to Congress and state governments to answer, not the Supreme Court.

On Wednesday morning, the court heard arguments on the issue of “severability” – the question of what should happen with the rest of the 2,700-page statute if the requirement that most Americans obtain health insurance is struck down. The insurance mandate was effectively reduced to a bumper sticker by the opponents in their constitutional challenge, and the entire law reduced to little more than an appendage to the mandate.

Robert Sheer: Five Hypocrites and One Bad Plan

The Supreme Court is so full of it. The entire institution, as well as its sanctimonious judges themselves, reeks of a time-honored hypocrisy steeped in the arrogance that justice is served by unaccountable elitism.

My problem is not with the Republicans who dominate the court questioning the obviously flawed individual mandate for the purchasing of private-sector health insurance but rather with their zeal to limit federal power only when it threatens to help the most vulnerable. The laughter noted in the court transcription that greeted the prospect of millions of the uninsured suddenly being deprived of already extended protection under the now threatened law was unconscionable. The Republican justices seem determined to strike down not only the mandate but also the entire package of accompanying health care rights because of the likelihood that, without an individual mandate, tax revenue will be needed to extend insurance coverage to those who cannot afford it.

George Zornick: At Capitol Hill Hearing on Trayvon, Strong Words on Gun Control

The parents of Trayvon Martin attended a somber, angry forum on Capitol Hill yesterday about racial profiling and discriminatory stand-your-ground laws. Much of that terrain has been well-covered in recent weeks, but an interesting portion of the hearing focused directly on gun control-and how Florida’s loose gun restrictions helped facilitate George Zimmerman’s vigilantism.

Despite having an arrest record and a history of violence, Zimmerman was allowed to purchase a gun and obtain a concealed carry permit. And even if he were to be arrested tomorrow and charged with murder, he would still likely be able to obtain a gun permit the day he eventually walked out of prison.

In Florida, gun permits are issued by the Department of Agriculture. All one has to do is visit their website-FreshFromFlorida.com-and apply. Providing your Social Security number is optional, and they’ll just mail you a permit-no need to actually see anyone or provide identification. The state does not have the right to take away your concealed carry permit if you commit a crime-1,400 convicted felons, at least, are said to have concealed carry permits in Florida today, though it’s hard to know for sure since the state doesn’t make the permit list public.

For decades now, the National Rifle Association has used Florida as a petri dish for extreme measures that make getting firearms easy-and the state has some of the loosest laws in the country.

E. J. Dionne, Jr.: Activist Judges on Trial

Three days of Supreme Court arguments over the health care law demonstrated for all to see that conservative justices are prepared to act as an alternative legislature, diving deeply into policy details as if they were members of the Senate Health, Education, Labor and Pensions Committee.

Senator, excuse me, Justice Samuel Alito quoted Congressional Budget Office figures on Tuesday to talk about the insurance costs of the young. On Wednesday, Chief Justice John Roberts sounded like the House whip in discussing whether parts of the law could stand if other parts fell. He noted that without various provisions, Congress “wouldn’t have been able to put together, cobble together, the votes to get it through.” Tell me again, was this a courtroom or a lobbyist’s office?

It fell to the court’s liberals-the so-called “judicial activists,” remember?-to remind their conservative brethren that legislative power is supposed to rest in our government’s elected branches.

Gail Collins: More Guns, Fewer Hoodies

The debate over the shooting death of Trayvon Martin seems to be devolving into an argument about the right to wear hoodies, but it really does not appear to be a promising development.

Congress, which never draws any serious conclusions from terrible tragedies involving gunplay, did have time on Wednesday to fight about whether Representative Bobby Rush of Chicago violated the House dress code when he took off his suit jacket, revealing a gray sweater he was wearing underneath, and pulled the hood up over his head.

You may remember that Geraldo Rivera took measure of the Martin case and determined that the moral was: young men, throw out your hoodies. Even Rivera’s son said he was embarrassed. But, hey, we’re talking about it. Mission accomplished.

Joe Conanson: If Obamacare Goes, Will America ‘Let Him Die’?

Despite significant negative signals, the final outcome of this week’s arguments over the Affordable Care Act will remain unknown until the Supreme Court issues a ruling in June. What is painfully obvious today, however, should have been clear enough long before any of the lawyers opened their mouths. The five Republican justices represent an ideological bloc as adamantly hostile to universal health care-no matter the cost in lost lives or squandered trillions-as in 1965, when Medicare passed.

If the high court voids the law’s insurance mandate (once promoted by the same politicians and policymakers who now scorn it), we know how tea party Republicans would cope with the financial problem posed by ill and injured people who show up at hospitals without coverage. They told us last fall during the presidential debate in Tampa, Fla., when they cheered for, “Let him die!”

Amy Goodman: Forget Fear of Flying, Fear Airport Screening

There was terror in the skies this week over Texas, caused not by a terrorist but by a pilot-a Flight Standards captain, no less. JetBlue Airways Capt. Clay Osbon, flying Flight 191 from New York’s John F. Kennedy International Airport to Las Vegas, began moving up and down the aisle after the jet was airborne, ranting, according to several passengers, about Iraq, Israel, al-Qaida and bombs, calling on passengers to recite the Lord’s Prayer, saying that they were “all going down.” An off-duty pilot in the cabin went to the cockpit to help the co-pilot with the emergency landing, while passengers and crew subdued Osbon. Osbon, who’d been with JetBlue almost since its founding, was taken to the hospital, suspended with pay, then criminally charged with interfering with a flight crew.

That’s enough to inspire a fear of flying in anyone. But just getting to your airplane these days may present a greater risk to your health than the actual flight.

On This Day In History March 29

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

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

March 29 is the 88th day of the year (89th in leap years) in the Gregorian calendar. There are 277 days remaining until the end of the year.

On this day in 1951, the Rosenbergs are convicted of espionage.

In one of the most sensational trials in American history, Julius and Ethel Rosenberg are convicted of espionage for their role in passing atomic secrets to the Soviets during and after World War II. The husband and wife were later sentenced to death and were executed in 1953.

The conviction of the Rosenbergs was the climax of a fast-paced series of events that were set in motion with the arrest of British physicist Klaus Fuchs in Great Britain in February 1950. British authorities, with assistance from the U.S. Federal Bureau of Investigation, gathered evidence that Fuchs, who worked on developing the atomic bomb both in England and the United States during World War II, had passed top-secret information to the Soviet Union. Fuchs almost immediately confessed his role and began a series of accusations.

Fuchs confessed that American Harry Gold had served as a courier for the Soviet agents to whom Fuchs passed along his information. American authorities captured Gold, who thereupon pointed the finger at David Greenglass, a young man who worked at the laboratory where the atomic bomb had been developed. Gold claimed Greenglass was even more heavily involved in spying than Fuchs. Upon his arrest, Greenglass readily confessed and then accused his sister and brother-in-law, Ethel and Julius Rosenberg, of being the spies who controlled the entire operation. Both Ethel and Julius had strong leftist leanings and had been heavily involved in labor and political issues in the United States during the late-1930s and 1940s. Julius was arrested in July and Ethel in August 1950.

By present-day standards, the trial was remarkably fast. It began on March 6, and the jury had convicted both of conspiracy to commit espionage by March 29. The Rosenbergs were not helped by a defense that many at the time, and since, have labeled incompetent. More harmful, however, was the testimony of Greenglass and Gold. Greenglass declared that Julius Rosenberg had set up a meeting during which Greenglass passed the plans for the atomic bomb to Gold. Gold supported Greenglass’s accusation and admitted that he then passed the plans along to a Soviet agent. This testimony sealed Julius’s fate, and although there was little evidence directly tying Ethel to the crime, prosecutors claimed that she was the brain behind the whole scheme. The jury found both guilty. A few days later, the Rosenbergs were sentenced to death. They were executed on June 19, 1953 in Sing Sing Prison in New York. Both maintained their innocence to the end.

Since the execution, decoded Soviet cables, codenamed VENONA, have supported courtroom testimony that Julius acted as a courier and recruiter for the Soviets, but doubts remain about the level of Ethel’s involvement. The decision to execute the Rosenbergs was, and still is, controversial. The New York Times, in an editorial on the 50th anniversary of the execution (June 19, 2003) wrote, “The Rosenbergs case still haunts American history, reminding us of the injustice that can be done when a nation gets caught up in hysteria.” This hysteria had both an immediate and a lasting effect; many innocent scientists, including some who were virulently anti-communist, were investigated simply for having the last name “Rosenberg.” The other atomic spies who were caught by the FBI offered confessions and were not executed. Ethel’s brother, David Greenglass, who supplied documents to Julius from Los Alamos, served 10 years of his 15 year sentence. Harry Gold, who identified Greenglass, served 15 years in Federal prison as the courier for Greenglass and the British scientist, Klaus Fuchs. Morton Sobell, who was tried with the Rosenbergs, served 17 years and 9 months. In 2008, Sobell admitted he was a spy and confirmed Julius Rosenberg was “in a conspiracy that delivered to the Soviets classified military and industrial information and what the American government described as the secret to the atomic bomb.”

ACA: Can You Sever The Head Without Killing The Patient

Today the Supreme Court heard arguments about the severability of the individual mandate in the Affordable Health Care bill  and the expansion of Medicaid.

The day after the Supreme Court suggested that President Obama’s health care law might be in danger of being held unconstitutional, the justices on Wednesday turned their attention to the practical consequences and political realities of such a ruling.

The justices seemed divided on both questions before them: What should happen to the rest of the law if the court strikes down its core provision? And was the law’s expansion of the Medicaid program constitutional?

The two arguments, over almost three hours, were by turns grave and giddy. They were also relentlessly pragmatic. The justices considered what sort of tasks it makes sense to assign to Congress, what kinds of interaction between federal and state officials are permissible and even the political character of the lawsuits challenging the law. One justice dipped into Senate vote counting.

The court had in other words, on the third and final day of a historic set of arguments, moved from the high theory of constitutional interpretation to the real-world consequences of what various rulings would entail.

The arguments on severability, which hinged totally on whether the mandated stays or goes, boiled down to three points:

1. sever only the mandate, allow the rest of the law to stand and let Congress sort it out;

2. sever the mandate along with insurance regulations like guaranteed issue and community rating, to prevent what the government argues would be an insurance death spiral;

3. or throw out the whole law, which did not include a standard severability clause.

The Justices seemed divided over point #2 and #3 rather than #1. For the most part, the discussions and comments were reflective of the consequences of overturning the entire law or any part of it:

[..] A common reaction, across the bench, was that the Justices themselves did not want the onerous task of going through the remainder of the entire 2,700 pages of the law and deciding what to keep and what to throw out, and most seemed to think that should be left to Congress.  They could not come together, however, on just what task they would send across the street for the lawmakers to perform.  The net effect may well have shored up support for the individual insurance mandate itself.

The dilemma could be captured perfectly in two separate comments by Justice Antonin Scalia – first, that it “can’t be right” that all of the myriad provisions of the law unrelated to the mandate had to fall with it, but, later, that if the Court were to strike out the mandate, “then the statute’s gone.”  [..]

Justice Anthony Kennedy, who is considered the swing vote on the individual mandate, expressed concern “possible unintended consequences in the form of huge costs to insurance companies if the mandate – which would bring millions of healthy young people into the healthcare system and spread out costs – was invalidated alone”:

“We would be exercising the judicial power if one … provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended,” Kennedy said. “By reason of this court, we would have a new regime that Congress did not provide for, did not consider.”

The four liberal justices expressed deep reservations about tossing out the sweeping law that has hundreds of other provisions, some of them already in effect.

Justice Sonia Sotomayor, one of the four and an Obama appointee to the court, asked whether the court should allow Congress to decide what to do next. “What’s wrong with leaving it in the hands of people who should be fixing this, not us?”

Justice Ruth Bader Ginsburg went further. She said many parts of the law had not been challenged in court. “Why make Congress redo those?”

On the matter of Medicaid expansion a majority of the justices were inclined to support the government’s role in prodding states to expand the state-federal Medicaid healthcare program for the poor, providing coverage for an estimated 17 million Americans:

The court’s more liberal justices all expressed puzzlement about why there should be a problem with the expansion in light of the fact that it is almost entirely to be paid for by the federal government. The states say they are being coerced into participating because a decision not to may cause them to lose not only the new money but also existing funds.

Justice Elena Kagan described a hypothetical program only slightly different from the real one. “It’s just a boatload of federal money for you to take and spend on poor people’s health care,” she said to a lawyer for the states, Paul D. Clement. “It doesn’t sound coercive to me, I have to tell you.” [..]

He (Chief Justice John G. Roberts Jr) said the court’s decision on the Medicaid expansion should be informed by the reality that the states have “since the New Deal” cheerfully accepted federal money.

“It seems to me that they have compromised their status as independent sovereigns because they are so dependent on what the federal government has done,” the chief justice said.

Justice (Antonin) Scalia addressed the political realities of the litigation itself, asking Mr. Clement whether there was “any chance that all 26 states opposing it have Republican governors, and all of the states supporting it have Democratic governors?”

Mr. Clement responded, “There’s a correlation, Justice Scalia.”

In her last article on Wednesday’s sessions, Slate‘s Dahlia Litwick gives her assessment of the last three days:

Amid all the three-day psychodrama, it’s easy to get confused about what’s happened and what hasn’t. Court watchers seem to generally agree that the individual mandate is in real peril and will rise or fall with Chief Justice Roberts and Justice Kennedy. Court watchers also agree that 19th-century tax law-while generally adorable-will not prevent the justices from deciding the case by July. And they also agree that they may have counted five justices who appear willing to take the whole law down, along with the mandate, and the Medicaid expansion as well.

But the longer they talked, the harder it was to say. A lot of today’s discussion started to sound like justices just free-associating about things in the law they didn’t like. That doesn’t reveal all that much about the interplay between the four separate challenges-what happens when they all have to be looked at together-or anything at all about what will happen at conference or in the drafting of opinions. Could the five conservative justices strike down the entire health care law, and take us into what Kagan described this morning as a “revolution”? They could. Will they? I honestly have no idea anymore. As silent retreats go, this one was a lot less enlightening than I’d hoped.

Constitutional law professor Jonathan Turley discussed the hearings with Keith Olbermann on Countdown, calling this case a “game of chicken” that “can be deadly.”

My Little Town 20120328: Aunt Bess and Uncle Richard

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile or so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a rural sort of place that did not particularly appreciate education, and just zoom onto my previous posts to understand a bit about it.

Uncle Richard was my father’s eldest brother.  He was born in 1900, whilst my dad was born in 1919 (and he was NOT the baby).  You can see right away that my grandfather’s family was really spread out over the years.

They lived in Illinois, so I did not see them really often, but they did come to visit enough that I got to know them fairly well.  Uncle Richard was a bit talker and a big drinker, whilst Aunt Bess was quiet and dignified.  My mum really liked Aunt Bess, and they were close as could be in the early 1960s with expensive long distance and no internet.  They communicated mostly by letter, and postage at the time was around 6 cents.  

Austerity Is A Black Hole

It’s very strange that governments knowing that austerity is just deepening the recession in Europe, they continue down the same path.

UK GDP fell faster than previously estimated in fourth quarter, ONS says

• UK GDP fell 0.3% rather than 0.2% in fourth quarter

• Economists had expected no change

• Disposable incomes fall 1.2% – worst since 1977

Britain’s economy was even weaker than expected at the end of last year, underlining the country’s struggle to avoid another recession. [..]

The signs from business surveys and much of the official data so far for this first quarter have been taken as evidence of at least a small new-year bounce-back. But there are widespread doubts over whether that can be sustained. Economists cite many headwinds facing the UK economy, including high oil prices, a government austerity drive and the sovereign debt crisis in the eurozone. [..]

Government spending, exports and household consumption grew, but economists warned that pattern had little chance of holding up.

“The government purse strings are being tightened, growth is deteriorating in key export markets, with the eurozone now likely to be in another recession, and revised retail sales data have signalled a far weaker start to the year than previously thought, raising concerns that households are continuing to retrench amid worries about the economy, jobs and rising prices,” said Chris Williamson, chief economist at Markit.

So what did the Cameron government do? If you guessed double down on austerity, you’re right. Jonathan Portes analogy with Shakespeare’s Macbeth is quite apt:

I described this as the “Macbeth argument”, from the following quote:

   “I am in blood stepped in so far that should I wade no more, Returning were as tedious as go o’er.”   [Act III, scene iv.]

In other words, since Macbeth has already killed Duncan and Banquo, it is better to carry on (and order the deaths of Macduff and his family) than to stop. So, although misguided policy has led to unnecessary economic damage, that damage is (returning to economist speak) a sunk cost; and the pain ahead is less then the pain that we would suffer if we changed course, as a consequence of the possible negative financial market reaction.

The Treasury also appears to subscribe to a variant of this argument.  When the original fiscal consolidation plan was welcomed by the rating agencies, that was a vote of confidence:  

   “Standard & Poor’s, the ratings agency, revised its outlook on Britain from negative to stable..The Chancellor said: “”That is .. a vote of confidence in the Coalition Government’s economic policies..”  Telegraph, 26 October 2010

But when the same rating agencies realised the damage the plan was doing to growth, that made it even more necessary:

   “Fitch revised the outlook on the UK’s rating to negative from stable….”A week from the Budget this is a reminder of why it is essential Britain sticks to its plans to deal with its debts,” a Treasury spokesman said…”  Telegraph, 14 March 2012

Spain has already fallen into another recession, sucked in by the black hole of austerity:

Spain’s economy is suffering its second recession since 2009, the Bank of Spain said, a development that obstructs the government’s efforts to reorder public finances as it prepares the budget for this year.

“The most recent information for the start of 2012 confirms the prolongation of the contraction in output,” the Madrid-based central bank said in its monthly bulletin today.

Spain’s gross domestic product declined 0.3 percent in the fourth quarter of last year, less than two years after emerging from the last recession. Prime Minister Mariano Rajoy will present his 2012 budget on March 30, amid growing pressure from investors and European peers to rein in the deficit, which was 8.5 percent of GDP last year.

The spending plan, his first since coming to power in December, won’t increase tax on consumption nor cut civil servants’ salaries, Rajoy said today in Seoul. The previous administration slashed wages of public workers by an average 5 percent in 2010.

Rajoy, who leads the pro-business People’s Party, hasn’t said where he will cut spending, even as he pledged today to present a budget that is “very austere.”

And just as with Britain and Greece, the same causes are exacerbating the Spanish problem, from Delusional Economics at naked capitalism:

Back in November last year I posted on my confusion over the jubilation shown by the citizens of Spain as they elected Mariano Rajoy as their new political leader. Mr Rajoy’s strategy during the election campaign was to say very little about what he was actually intending to do to address his country’s financial problems, preferring to simply let the incumbent party fall on its own sword so that he could take the reins. It became obvious soon after the election that, despite his party’s best efforts to dodge questions, the intention was simply to continue with even more austerity.

Since that post I have continually warned that although Spain is obviously a different country to Greece in regards to how its problems have manifested, it still faces significant macroeconomic challenges that were not being correctly reflected in the bond market. [..]

And in the United States, conservative state governments continue with their austerity agenda that continues to be a drag on the economy:

Republicans seized control of both branches of the legislature in 11 states after the 2010 elections. It’s in these very states that public sector layoffs are disproportionately concentrated, leading to one of the biggest rounds of job losses for the public workforce since record keeping began. Governors and state legislators promised to focus on creating jobs and balancing budgets during campaign season-even newly elected Pennsylvania Governor Tom Corbett still claims that creating jobs is one of his “top priorities.” Instead, these newly Republican states are targeting public workers, causing a significant drop in employment in the public sector that has threatened the entire economy. [..]

Economists argue over how significantly public sector layoffs in a weak economy hurt the recovery, but many agree that it has a substantial impact. Paul Krugman has estimated that if the government workforce had grown at a Reagan-era rate instead of decreasing rapidly, unemployment would now be closer to 7 percent, instead of the 8.5 percent it’s been hovering around for the past five months.

Growth in  public employment would have three positive effects on the economy:

1. It would increase spending in the private sector, thus improving the GDP;

2. It would increase tax revenues to not just the federal government with increased collection of payroll tax, but also increase the tax revenues of both state and local governments.

3. Increased spending by would have a positive effect on employment in the private sector with a need for workers to meet the demand for goods and services.

Don’t try to tell this to economic conservatives because there is more blood to be spilled. No matter how much they wash, the stain of recession remains in the hands of conservative governments in Europe and the US.

BATS in the Belfry

The Bats Affair: When Machines Humiliate Their Masters

By Brian Bremner, Business Week

March 23, 2012

In the annals of business screw-ups, Bats has certainly made its mark. Bats stands for Better Alternative Trading System and the company runs two exchanges that collectively rank third in terms of U.S. share trading, behind New York Stock Exchange and Nasdaq. The Bats exchanges account for 11 percent to 12 percent of daily U.S. equity trading, according to its website. The company came of age with the expansion of high-frequency trading over the last decade and the proliferation of quant-jock-driven electronic firms that dominate the buying and selling of U.S. equities. Bats founder Dave Cummings is chairman and owner of high-frequency trading firm Tradebot Systems.

Today was supposed to be the Lenexa (Kan.)-based company’s moment in the limelight as it tried to sell about 6.3 million shares in the $16 to $18 dollar per share range. Instead, something went terribly wrong. The company’s shares somehow ended up trading for pennies per share early in the trading day on both the Bats bourse and Nasdaq, according to data reviewed in this Bloomberg story. Then tech investors and Apple (AAPL) fanboys the world over were dismayed when a single trade for 100 shares executed on the Bats market sent Apple’s shares to $542 per share, down sharply from recent levels. (The company set a new 52-week high of $609 per share on March 21.) The stock temporarily halted trading and recovered.

And, as a matter of fact, we do know what went wrong.

Bats: The Epic Fail of the Worst IPO Ever

By Dan Beucke, Business Week

March 23, 2012

Bats priced 6.3 million shares through underwriters yesterday and appeared set to begin trading about 90 minutes into the day when chaos erupted. While the company quoted its shares at $15.25 at 10:45 a.m. on its website, feeds including those sent to Bloomberg LP displayed different prices. At 11:14 a.m., Bloomberg received data showing 1.26 million shares had traded, with the most recent execution at 3.84 cents and the lowest transaction at 0.02 cent.

Compounding the confusion, a single trade for 100 shares executed on a Bats venue at 10:57 a.m. briefly sent Apple down more than 9 percent to $542.80, data compiled by Bloomberg show. Two more transactions, which sent the stock back above $598, were made before the halt. The stock stayed around that level once trading resumed five minutes later and the errant trade, along with the Bats transactions, were later canceled. Bats sent a notice about 10 minutes before the Apple trade saying it was investigating “system issues” affecting companies with ticker symbols ranging between A and BF. Apple’s is AAPL. Bats’s ticker was BATS. At 11:07 a.m., Bats’s BYX Exchange took a procedural step known as “declaring self help” against its BZX exchange, indicating that it had stopped routing orders to the market because BZX wasn’t responding to messages quickly enough.

BATS exchange withdraws IPO after stumbles

By Olivia Oran, Jonathan Spicer, Chuck Mikolajczak and Carrick Mollenkamp, Reuters

Sat Mar 24, 2012 1:37pm EDT

The debacle raised questions for regulators, investors and the underwriters, including Citigroup Inc, Morgan Stanley and Credit Suisse Group, which were listed before the IPO as major shareholders.



Since the May 2010 “flash crash” in which nearly $1 trillion in market value disappeared in minutes, the Securities and Exchange Commission under Chairman Mary Schapiro has pledged to crack down on problems in the high-speed electronic marketplace, which regulators worry has grown unstable and perhaps unfair as high-frequency trading has grown in prominence.



It is expected to draw even more scrutiny from regulators looking into the soundness of the exchange’s servers, trade-matching engines and computer codes, and it could land BATS in legal trouble for withdrawing its IPO after trades were executed in the public marketplace, according to experts.



“It’s just another black eye for the fragmented equity structure,” said Joe Saluzzi, co-head of equity trading at Themis Trading in Chatham, New Jersey, and a frequent critic of U.S. equities market structure. “Every day we see things like flash crashes and now IPOs that can’t get off the ground.”

But don’t worry, our captive fearless SEC facilitators regulators are on the case and the Obama/Holder Justice Department will make sure that everyone skates any irregularities are appropriately corrected.

Or not.

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