09/07/2010 archive

Evening Edition

Evening Edition is an Open Thread

From Yahoo News Top Stories

1 US church vows Koran burning will go on despite concerns


1 hr 39 mins ago

WASHINGTON (AFP) – A Florida evangelical church vowed Tuesday to go ahead with plans to burn the Koran on the 9/11 anniversary despite fears it may fuel an angry backlash and endanger US and allied troops in Afghanistan.

The White House lent its voice to growing concern from military leaders that the incendiary move could trigger outrage around the Islamic world, as well as stoke a growing anti-Muslim tide of feeling in the United States.

“It puts our troops in harm’s way. Any type of activity like that that puts our troops in harm’s way would be a concern to this administration,” said White House spokesman Robert Gibbs, reiterating comments by top US and NATO commander in Afghanistan, General David Petraeus.

Economics 101: Tonight’s Reading Assignment

I agree with Atrios and David Dayen, this is an absolute must read to clearly understand the basis for the current jobs and economics crises.

The Slump Goes On: Why?

We believe that the relative absence of proposals to deal with mass unemployment is a case of “self-induced paralysis”-a phrase that Federal Reserve Chairman Ben Bernanke used a decade ago, when he was a researcher criticizing policymakers from the outside. There is room for action, both monetary and fiscal. But politicians, government officials, and economists alike have suffered a failure of nerve-a failure for which millions of workers will pay a heavy price.

   Our guess is that the bubble got started largely thanks to the global savings glut, but that it developed a momentum of its own-which is what bubbles do. Financial innovations such as the securitization of mortgages may have made it easier for the bubble to inflate-but European banks managed to extend too much credit without such frills. However, it is clear that there were major failures in oversight. In particular, Ben Bernanke has admitted that the Fed failed to use its regulatory powers to rein in the excesses of the mortgage lenders-a tragic oversight. Greenspan disregarded the clear warning by a member of the Fed board that mortgage lending had become dangerously excessive. And the widespread securitizing of mortgage loans has made the mess much harder to clean up.

   In a housing market that is now depressed throughout the economy, mortgage holders and troubled borrowers would both be better off if they were able to renegotiate their loans and avoid foreclosure. But when mortgages have been sliced and diced into pools and then sold off internationally so that no investor holds more than a fraction of any one mortgage, such negotiations are impossible. And because of the financial industry lobbying that prevented mortgages from being covered by personal bankruptcy proceedings, no judge can impose a solution. The phenomenon of securitization, created in the belief that a large-scale housing crash would never happen, has trapped investors and troubled borrowers in a mutually destructive downward spiral.

Richard) Koo is the chief economist at the Nomura Research Institute. Much of his book (The Holy Grail of Macroeconomics) is devoted to Japan’s long era of stagnation from the early 1990s onward. This stagnation, he argues, mainly reflected the balance sheet problems of nonfinancial corporations, which were stranded with high levels of debt after the Japanese real estate bubble of the 1980s burst. He argues that the United States now faces a similar problem, with debt problems concentrated not among corporations but among home owners, who ran up large debts both in the course of buying houses and through using them as ATMs-that is, using refinancing to extract cash from rising home values, and spending that cash on higher consumption.

In Koo’s analysis, simultaneous attempts by many private players to pay down their debts lead to a “fallacy of composition” that’s closely related to the famous (but too often overlooked) “paradox of thrift.” Each individual corporation or household cuts back on spending in an effort to reduce debt; but these spending cuts reduce everyone’s income and keep the economy persistently depressed.

These broader problems of debt and deleveraging arguably explain why the successful stabilization of the financial industry has done no more than pull the economy back from the brink, without producing a strong recovery. The economy is hamstrung-still crippled by a debt overhang. That is, the simultaneous efforts of so many people to pay down debt at the same time are keeping the economy depressed.

Tanks to David Dayen for his excellent choice of excerpts from the article and this comment at the end

It’s pretty obvious that Krugman and Wells are suggesting that government borrow, to sop up the paying down of debt from everyone else in the economy and cancel it out. Only this will create the kind of demand needed; in fact, Krugman and Wells assert that global budget deficits had more to do with averting a Depression than any financial bailout. But these mainly came from a crash in revenues through taxes and automatic stabilizers, not fiscal stimulus, which was too small. The writers put off their solutions for economic recovery until a future article, but you can pretty well figure out what they are.

I am looking forward to the article on their solutions, as should Obama and his economics team.

Clap Louder! LOUDER!!!

Three posts and a video from Greg Sargent @ Plum Line.

10:34 AM Voters aren’t listening to Dem message about GOP and Bush

What if voters are simply not buying the central Dem message that a vote for the GOP is a vote to return to the Bush policies that ran the economy into the ground? What if the GOP has already achieved separation from the former president?

There are still more than two months to go until election day. Perhaps voters will grow more receptive to the Dem claim that the GOP wants nothing more than a return to Bush policies once they begin focusing harder on the choice before them. But for now, the data clearly shows the public is not listening to the core Dem message.

11:57 AM Axelrod: Voters aren’t (yet) buying our Bush message

Now this thesis is being confirmed by none other than White House senior adviser David Axelrod, who  acknowledges to Sam Stein that Dems have failed to communicate this message adequately:

Perhaps this is where we have been failing to communicate,” said Axelrod. “[A] large number of people [don’t] believe that a Republican Congress would go back to the policies of George W. Bush, even though their own leaders have said as much in public. Pete Sessions said we want to go back to the same exact agenda that was there before this president took office. So our job in the next eight weeks is to make sure that people understand that, that they understand the stakes.

2:13 PM David Plouffe to Dems: Don’t despair, get to work!

Thanks to his work as the architect of Barack Obama’s stunning victory in 2008, few political strategists command the respect of the Dem rank and file to the degree  David Plouffe does.

So Plouffe is now trying to buck up despondent Dems by starring in a new video, to be emailed out to supporters by Obama’s political operation, telling them that all is not lost and that Dems can do far better this fall than the pundits are predicting — if they get to work:

(W)hat’s also interesting is Plouffe’s insistence that rank and file Dems understand that finding a way to muster up some enthusiasm may be the difference between winning and losing…

So you know what to do, otherwise Tinkerbell WILL DIE!!!!

The Economic Damage of Republican Obstructionism

h/t HEATHER @ Crooks & Liars for  the video and the transcript here

Punting the Pundits

Punting the Punditsis 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.

The Labor Day weekend is over marking the “official” end of Summer and vacations, not just for the kids and those who have jobs that can afford a vacation but the Government. It is time for the White house and Congressional Democrats take the lead and start acting like the the party of the people and not the corporate shills that have been cowed by the Republican extremists that are determine to do nothing but block any real move toward a real economic recovery and critical legislation that would create jobs. It is well past time for some heads to roll, especially the quartet of Rahm Emanuel, Timothy Geithner, David Axelrod and Larry Summers who have given President Obama some horrendous advice. Rahm Emanuel’s penchant for telling people to “fuck off” isn’t going to help get out the vote for the Democrats, in  particular, his latest invective was directed at the UAW. It is time for President Obama to tell the Democratic leadership that their very jobs are on the line and start taking some really bold steps and get the Blue Dogs in line by telling them they will lose their coveted committee chairs if they don’t.

For your consideration and discussion here are some of the opinions of the “Not Your Usual Suspects” and some of the “Usual” ones as well. For starters I give you Michael Moore’s rant from yesterday about Rahm’s “f-bombs” and a history of the UAW, Happy Fuckin’ Labor Day!

Dear Rahm Emanuel:

Happy Fuckin’ Labor Day! I read this week that – according to a new book by Steven Rattner, your administration’s former “Car Czar” – during White House meetings about how to save the tens of thousands of jobs that would be lost if GM and Chrysler collapsed, your response was, “Fuck the UAW!”

Now, I can’t believe you actually said that. Maybe Rattner got confused because you drop a lot of F-bombs, or maybe your assistant was trying to order lunch and you said (to Rattner) “Fuck you” and then to your assistant “A&W, no fries.”

Or maybe you did mean Fuck the UAW. If so, let me give you a little fucking lesson (a lesson I happen to know because my fucking uncle was in the sit-down strike that founded the fucking UAW).

Before there were unions, there was no middle class. Working people didn’t get to send their kids to college, few were able to own their own fucking home, nobody could take a fucking day off for a funeral or a sick day or they might lose their fucking job.

Then working people organized themselves into unions. The bosses and the companies fucking hated that. In fact, they were often overheard to say, “Fuck the UAW!!!” That’s because the UAW had beaten one of the world’s biggest industrial corporations when they won their battle on February 11, 1937, 44 days after they’d taken over the GM factories in Flint. Inspired by their victory, workers struck almost every other fucking industry, and union after union was born. Had World War II not begun and had FDR not died, there would have been an economic revolution that would have given everyone – everyone – a fucking decent life.

Striking Right at the Capillaries

While it’s different than the trial balloons there are 2 things wrong with Team Obama’s latest economic proposal.

The stimulus is too small-


by Paul Krugman, The New York Times

September 7, 2010, 5:30 am

Beyond all that, the new initiative is a chance for me to air one of my pet peeves: the stupidity of the claim, which you hear all the time – and you’ll hear again now – that it’s always better to provide stimulus in the form of tax cuts, because individuals know better than the government what to do with their money.

Why is this claim stupid? Because Econ 101 tells us that there are some things the government must provide, namely public goods whose benefits can’t be internalized by the market.

And the tax cuts misdirected-

Why Obama Is Proposing Whopping Corporate Tax Cuts, and Why He’s Wrong

by Robert Reich

Tuesday, September 7, 2010

The reason businesses aren’t investing in new plant and equipment has nothing to do with the cost of capital. It’s because they don’t need  the additional capacity. There isn’t enough demand for their goods and services to justify it. Consumers aren’t buying because they’re trying to come out from under a huge debt load, including mortgage debt; they have to start saving because their nest eggs are worth substantially less; and they’ve lost or are worried about losing jobs and pay.

Republicans and corporate lobbyists have been demanding tax cuts on corporate investments for one reason: Big corporations are investing in automated equipment, robotics, numerically-controlled machine tools, and software. These investments are designed to boost profits by permanently replacing workers and cutting payrolls. The tax breaks Obama is proposing would make such investments all the more profitable.

In sum, Obama’s proposed corporate tax cuts (1) won’t generate more jobs because they don’t put any cash in worker’s pockets (as would, for example, exempting the first $20,000 of income from the payroll tax and making up the difference by applying the payroll tax to incomes over $250,000); (2) will subsidize companies to cut even more jobs; and (3) will cost $130 billion – money that could better be spent helping states and locales avoid laying off thousands of teachers, fire fighters, and police.

Yay Team.

On This Day in History: September 7

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

September 7 is the 250th day of the year (251st in leap years) in the Gregorian calendar. There are 115 days remaining until the end of the year.

On this day in 1813, the United States gets its nickname, Uncle Sam. The name is linked to Samuel Wilson, a meat packer from Troy, New York, who supplied barrels of beef to the United States Army during the War of 1812. Wilson (1766-1854) stamped the barrels with “U.S.” for United States, but soldiers began referring to the grub as “Uncle Sam’s.” The local newspaper picked up on the story and Uncle Sam eventually gained widespread acceptance as the nickname for the U.S. federal government.

In the late 1860s and 1870s, political cartoonist Thomas Nast (1840-1902) began popularizing the image of Uncle Sam. Nast continued to evolve the image, eventually giving Sam the white beard and stars-and-stripes suit that are associated with the character today.


On this day in 1813, the United States gets its nickname, Uncle Sam. The name is linked to Samuel Wilson, a meat packer from Troy, New York, who supplied barrels of beef to the United States Army during the War of 1812. Wilson (1766-1854) stamped the barrels with “U.S.” for United States, but soldiers began referring to the grub as “Uncle Sam’s.” The local newspaper picked up on the story and Uncle Sam eventually gained widespread acceptance as the nickname for the U.S. federal government.

In the late 1860s and 1870s, political cartoonist Thomas Nast (1840-1902) began popularizing the image of Uncle Sam. Nast continued to evolve the image, eventually giving Sam the white beard and stars-and-stripes suit that are associated with the character today.

Prime Time

Return to normalcy.  Dave and the Boys are back.  Keith and Rachel all night long.


Dave hosts Katie Holmes and Rich Harrison.  Jon has Tim Gunn, Stephen Anthony Romero.  Alton does Milk.

Boondocks, It’s a Black President, Huey Freeman.  The opener of Season 3 and just a fantastic summary.  I won’t spoil it, but if there is one ‘must see’ episode this is it (my second favorite is The Red Ball).

Where’s it gonna end, Briggs?  Pretty soon, you’ll start executing people for jaywalking and executing people for traffic violations.  Then you end up executing your neighbor ’cause his dog pisses on your lawn.

There isn’t one man we’ve killed that didn’t deserve what was coming to him.

Yes, there is. Charlie McCoy.

What would you have done?

l’d have upheld the law.

What the hell do you know about the law?

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Morning Shinbun Tuesday September 7

Tuesday’s Headlines:

The crimewave that shames the world

Why School ‘Reform’ Fails


FDA considers approving genetically modified salmon for human consumption

In a New Role, Teachers Move to Run Schools


Lenihan asks EU to allow State guarantee large Anglo deposits

The Roma Are EU Citizens — Everywhere in the European Union

Middle East

Iranian woman could be executed this week, son says

The glittering Gulf states’ dark labor secret


Final talks on Australia leadership

Japan convicts Greenpeace’s ‘Tokyo Two’ for whaling investigation


Press watchdog urges Egyptian ‘insult’ reporter’s acquittal

Kagame attacks critics

Prime Time

The thing about marathons is they’re great (if a little wearying) when you like the show and just horrible if you don’t.  Lots of marathons, premiers, and double features, but not much late at night unless you’re catching up on stuff you’ve already had a chance to see.


Dave, Jon, and Stephen in repeats, but they’ll be new again tomorrow through Thursday.  Alton does Coconut cake.  Boondocks, Bitches to Rags the second episode of Season 3.

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