10/21/2010 archive

I mean, it’s only a Nobel Prize in Economics so what the fuck does he know anyway?

To choose austerity is to bet it all on the confidence fairy

The mystical belief is that a smaller deficit will lead to an investment boom. What Britain really needs now is another stimulus

Joseph Stiglitz, The Guardian

Tuesday 19 October 2010 22:00 BST

Lower aggregate demand will mean lower tax revenues. But cutbacks in investments in education, technology and infrastructure will be even more costly in future. For they will spell lower growth – and lower revenues. Indeed, higher unemployment itself, especially if it is persistent, will result in a deterioration of skills, in effect the destruction of human capital, a phenomena which Europe experienced in the eighties and which is called hysteresis. Lower tax revenues now and in the future combined with lower growth imply a higher national debt, and an even higher debt-to-GDP ratio.

Matters may be even worse if consumers and investors realise this. Advocates of austerity believe that mystically, as the deficits come down, confidence in the economy will be restored and investment will boom. For 75 years there has been a contest between this theory and Keynesian theory, which argued that spending more now, especially on public investments (or tax cuts designed to encourage private investment) was more likely to restore growth, even though it increased the deficit.

The two prescriptions could not have been more different. Thanks to the IMF, multiple experiments have been conducted – for instance, in east Asia in 1997-98 and a little later in Argentina – and almost all come to the same conclusion: the Keynesian prescription works. Austerity converts downturns into recessions, recessions into depressions. The confidence fairy that the austerity advocates claim will appear never does, partly perhaps because the downturns mean that the deficit reductions are always smaller than was hoped.

“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.

Joe Cirincione: British Budget Collapse Foreshadows Cuts to Come in U.S. Defense Budget

Great Britain’s cuts, particularly to its nuclear forces, are the canary in the defense budget mine. Just as massive deficits forced the conservative UK government to cut deep into its military programs, the United States will soon have to choose: update its force structure or cling to obsolete Cold War posture?

The UK may have waited too long to make the cuts. It is now forced to cut military personnel by 10 percent, and scrap an aircraft carrier and the entire fleet of Harrier jump jets (a very versatile, though very dangerous, fighter jet in which I once flew).

Less controversial is the plan to delay a decision on building a new generation of nuclear-armed submarines to replace the four existing Trident subs, each armed with 16 missiles carrying a total of 48 hydrogen bombs per sub.

Johann Hari: The Tea Party’s Wildest Dreams Come True — in Britain. The Result? Disaster

Margaret Thatcher is lying sick in a private hospital bed in Belgravia — but her political children have just pushed her agenda further and harder and deeper than she ever dreamed of. The government of David Cameron just took the Tea Party’s deepest fantasies — of massive budget cuts, introduced immediately — and imposed them on Britain. When was the last time Britain’s public spending was slashed by more than 20 percent? Not in my mother’s lifetime. Not even in my grandmother’s lifetime. No: It was in 1918, when a conservative-liberal coalition said the best response to a global economic crisis was to rapidly pay off this country’s debts. The result? Unemployment soared from six percent to 19 percent, and the country’s economy collapsed so severely that they lost all ability to pay their bills, and the debt actually rose from 114 percent to 180 percent. “History doesn’t repeat itself,” Mark Twain said, “but it does rhyme.”

George Osborne, the finance minister, has just gambled Britain’s future on an extreme economic theory that has failed whenever and wherever it has been tried. In the Great Depression, we learned some basic principles. When an economy falters, ordinary people — perfectly sensibly — cut back their spending and try to pay down their debts. This causes a further fall in demand and makes the economy worse. If the government cuts back at the same time, then there is no demand at all, and the economy goes into freefall. That’s why virtually every country in the world reacted to the Great Crash of 2008 — caused entirely by deregulated bankers — by increasing spending, funded by temporary debt. Better a deficit we repay in the good times than an endless depression. The countries that stimulated hardest, like South Korea, came out of recession first.

Bob Cesca: The Republican Swindle About ‘Obamacare and Stimulus’

If you happen to be a swing voter who’s considering the Republican slate next month, you’re being tricked. That’s not to say you’re an idiot, but the Republicans are doing an excellent job masking over what they really stand for, and millions of Americans seem to be falling for it.

The Republican strategy for this midterm election is simple: Treat voters like easily manipulated hoopleheads. The GOP and its various apparatchiks are spending untold millions of dollars, much of it from anonymous donors and, perhaps, even some illegal foreign donors, in order to play out this nationwide swindle. They’re investing heavily on the wager that Americans are so kerfuffled by the slow-growth (but growth nevertheless) economy that they’re willing to buy any line of nonsense as an alternative solution.

Regarding that nonsense, just about every GOP solution and every GOP idea reveals either a hilariously obvious contradiction or an utterly transparent hypocrisy. Say nothing of unchecked awfulness like Southern Strategy race-baiting or bald-faced lies. But it doesn’t seem to matter much because they’ve buried most of it under heaping piles of inchoate outrage and fear. Just like always. It’s not unlike the 2000s all over again. They’re engaging in the same bumper sticker sloganeering and myopic agitprop, but with updated content for 2010.

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

October 21 is the 294th day of the year (295th in leap years) in the Gregorian calendar. There are 71 days remaining until the end of the year.

On this day in 1959, On this day in 1959, on New York City’s Fifth Avenue, thousands of people line up outside a bizarrely shaped white concrete building that resembled a giant upside-down cupcake. It was opening day at the new Guggenheim Museum, home to one of the world’s top collections of contemporary art.

Guided by his art adviser, the German painter Hilla Rebay, Solomon Guggenheim began to collect works by nonobjective artists in 1929. (For Rebay, the word “nonobjective” signified the spiritual dimensions of pure abstraction.) Guggenheim first began to show his work from his apartment, and as the collection grew, he established The Solomon R. Guggenheim Foundation in 1937. Guggenheim and Rebay opened the foundation for the “promotion and encouragement and education in art and the enlightenment of the public.” Chartered by the Board of Regents of New York State, the Foundation was endowed to operate one or more museums; Solomon Guggenheim was elected its first President and Rebay its Director.

In 1939, the Guggenheim Foundation’s first museum, “The Museum of Non-Objective Painting”, opened in rented quarters at 24 East Fifty-Fourth Street in New York and showcased art by early modernists such as Rudolf Bauer, Hilla Rebay, Wassily Kandinsky, and Piet Mondrian. During the life of Guggenheim’s first museum, Guggenheim continued to add to his collection, acquiring paintings by Marc Chagall, Robert Delaunay, Fernand Leger, Amedeo Modigliani and Pablo Picasso. The collection quickly outgrew its original space, so in 1943, Rebay and Guggenheim wrote a letter to Frank Lloyd Wright pleading him to design a permanent structure for the collection. It took Wright 15 years, 700 sketches, and six sets of working drawings to create the museum. While Wright was designing the museum Rebay was searching for sites where the museum would reside. Where the museum now stands was its original chosen site by Rebay which is at the corners of 89th Street and Fifth Avenue (overlooking Central Park). On October 21, 1959, ten years after the death of Solomon Guggenheim and six months after the death of Frank Lloyd Wright the Museum opened its doors for the first time to the general public.

The distinctive building, Wright’s last major work, instantly polarized architecture critics upon completion, though today it is widely revered. From the street, the building looks approximately like a white ribbon curled into a cylindrical stack, slightly wider at the top than the bottom. Its appearance is in sharp contrast to the more typically boxy Manhattan buildings that surround it, a fact relished by Wright who claimed that his museum would make the nearby Metropolitan Museum of Art “look like a Protestant barn.”

Internally, the viewing gallery forms a gentle helical spiral from the main level up to the top of the building. Paintings are displayed along the walls of the spiral and also in exhibition space found at annex levels along the way.

Most of the criticism of the building has focused on the idea that it overshadows the artworks displayed within, and that it is particularly difficult to properly hang paintings in the shallow windowless exhibition niches that surround the central spiral. Although the rotunda is generously lit by a large skylight, the niches are heavily shadowed by the walkway itself, leaving the art to be lit largely by artificial light. The walls of the niches are neither vertical nor flat (most are gently concave), meaning that canvasses must be mounted proud of the wall’s surface. The limited space within the niches means that sculptures are generally relegated to plinths amid the main spiral walkway itself. Prior to its opening, twenty-one artists, including Willem de Kooning and Robert Motherwell, signed a letter protesting the display of their work in such a space.

China ‘trying to block publication of UN Darfur report’

Beijing is trying to prevent the release of a report which says Chinese bullets have been used against Darfur peacekeepers, unnamed UN diplomats say.

The BBC   21 October 2010

The report is being discussed by a United Nations committee which monitors sanctions against Sudan, including an arms embargo on Darfur.

Beijing says it is vaguely worded and full of flaws.

Ceasefires and peace negotiations have failed to end the conflict in the volatile western Sudanese region.

The report says that a dozen different brands of Chinese bullet casings have been found in Darfur, some at sites where attacks on UN troops took place.

The BBC’s Barbara Plett at the UN in New York says the allegations are controversial, but adds that China has the right to sell munitions to Khartoum as long as they are not used in Darfur.

Paul Krugman linked to this chart from a paper by Mary Daly of the San Francisco Fed with the comparison of the Japanese economy to the current US economic morass.

Joseph Stiglitz, Nobel Prize winner, doctor of economics and professor of economics at Columbia University, appeared today on the Dylan Ratigan Show and offered his advice for radical surgery to get the money and the jobs flowing again.

Ratigan:

“What is the risk of not dealing with the vicious cycle that is becoming joblessness in America, which leads to foreclosure in America, which leads to bank dysfunctionality, which leads to less investing and that vicious cycle that clearly has tremendous peril? What is that peril?”

Stiglitz:

“Well, I learned years ago that if we didn’t do it, we would be exactly where we are today and if we don’t do it now, we are likely to be entering into a Japanese style malaise, low growth, high unemployment, literally for years to come that should be unacceptable.”

See chart above and listen to Stiglitz offer his “radical surgical” solution.

Well tonight you have a chance to see my other surviving bracket get 1 game away from elimination.  About all I can say is that Atrios will be disappointed.  Both teams will be pitching their 3rd best so it will be a test of offense and bullpens.

All premiers on broadcast.

• ABC Family– The Goonies, Hocus Pocus
• AMC– Friday the 13th — A New Beginning, Friday the 13th, Part VI: Jason Lives x 2
• Bravo– New Top Chef
• Comedy– South Park, Ugly Americans (premiers)
• Disney– Twitches
• Discovery– Mythbusters (2 premiers, though I don’t think Buster’s Cut should count), Storm Chasers (premier if you care)
• Food– Next (this week’s), Tailgate Warriors With Guy Fieri (Series Premier)
• FX– Deception, Terriers x 3 (premier and instant repeats)
• History– Cannibalism
• Lifetime– The Break-Up x 2
• Oxygen– A Cinderella Story x 2
• Turner Classic– Ride Lonesome (Randolph Scott!), Park Row
• Travel– Man v. Food marathon (thank goodness)
• USA– NCIS marathon
• Vs.– PBR (World Finals)

Later-

• Turner Classic– The Last Flight, All Through the Night
• TV Guide– Weeds marathon
• USA– Blood Diamond

No Dave, Jon, or Stephen; 9/9, 10/11, 10/11.  No Alton.

Boondocks– Wingmen.

Zap2it TV Listings, Yahoo TV Listings

Evening Edition is an Open Thread

1 Police break fuel blockades in France strike

by Roland Lloyd Parry, AFP

1 hr 7 mins ago