September 2011 archive

Evening Edition is an Open Thread

Now with 37 stories.

1 Libya’s new PM warns toughest battles lie ahead

By Andrew Beatty, AFP

2 hrs 36 mins ago

Keith Olbermann and comedian Christian Finnegan discuss the Republican Candidates debate for the comedic aspect of the event. As cogent as any analysis I’ve heard today.

“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”.

Katrina vnder Heuvel: Who Will the Super Committee Fight For?

While President Obama’s highly anticipated jobs speech seems to be all political junkies are paying attention to today (that is, if you’re not a football junkie), attention must also be paid to the first meeting of the infamous super committee.

Today these 12 men and women begin the business of finding $1.2 trillion to $1.5 trillion in new revenues and spending cuts over the next decade. What this committee comes up with might go a long way towards determining the kinds of resources that will be available (or not) for any lasting economic recovery.

Before embarking on a GOP “cuts only” approach that too many Democrats seem willing to buy into, the super committee members-six from the House and six from the Senate, evenly divided between the parties-should look homeward to their own districts and states and see how their constituents are doing. That should serve as a reminder of just whom it is they were elected to serve-it’s not K Street and the nearly 100 registered lobbyists who used to work for super committee members and now expect to be “heavily involved” in this debate, according to the Washington Post. It’s their constituents back home.

John Nichols: Rule No. 1: Do Not Use the Word “Stimulus”

Barack Obama is often a great communicator. But when it comes to discussions about the sorry state of the economy, he has failed to connect.

Obama, who proved so remarkably agile when it came to discussing America’s place in the world, and whose ability to add a few grace notes to the country’s stilted dialogue about race made even his critics begin to see him as presidential, has since January 20, 2009, struggled to connect with Americans who worry not about the job they lost but about whether they will ever work again.

The current jobs crisis — and, make no mistake, from Toledo to Tulsa to Tarpon Springs, this crisis is real, and getting more real by the minute — has weighed on Obama from the first day of his presidency. And he has never been able to find the right words.

Edgar Allen Poe–

We estimated the entire contents of the chest, that night, as a million and a half of dollars, and upon the subsequent disposal of the trinkets and jewels (a few being retained for our own use), it was found that we had greatly under-valued the treasure.

When, at length, we had concluded our examination, and the intense excitement of the time had, in some measure, subsided, Legrand, who saw that I was dying with impatience for a solution of this most extraordinary riddle, entered into a full detail of all the circumstances connected with it.

Herr Doktor Professor–

So what determines the price of gold at any given point in time? Hotelling models say that people are willing to hold onto an exhaustible resources because they are rewarded with a rising price. Abstracting from storage costs, this says that the real price must rise at a rate equal to the real rate of interest.

…

The logic, if you think about it, is pretty intuitive: with lower interest rates, it makes more sense to hoard gold now and push its actual use further into the future, which means higher prices in the short run and the near future.

…

(T)his is essentially a “real” story about gold, in which the price has risen because expected returns on other investments have fallen; it is not, repeat not, a story about inflation expectations. Not only are surging gold prices not a sign of severe inflation just around the corner, they’re actually the result of a persistently depressed economy stuck in a liquidity trap – an economy that basically faces the threat of Japanese-style deflation, not Weimar-style inflation. So people who bought gold because they believed that inflation was around the corner were right for the wrong reasons.

And if you view the gold story as being basically about real interest rates, something else follows – namely, that having a gold standard right now would be deeply deflationary. The real price of gold “wants” to rise; if you try to peg the nominal price level to gold, that can only happen through severe deflation.

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.

September 8 is the 251st day of the year (252nd in leap years) in the Gregorian calendar. There are 114 days remaining until the end of the year.

On this day in 1966, The TV series, “Star Trek“, debuted on NBC-TV, on its mission to “boldly go where no man has gone before” and despite ratings and only a three year run that gave us 79 episodes, the series did exactly that.

When Star Trek premiered on NBC-TV in 1966, it was not an immediate hit. Initially, its Nielsen ratings were rather low, and its advertising revenue was modest. Before the end of the first season of Star Trek, some executives at NBC wanted to cancel the series because of its rather low ratings. The chief of the Desilu Productions company, Lucille Ball, reportedly “single-handedly kept Star Trek from being dumped from the NBC-TV lineup.”

Toward the end of the second season, Star Trek was also in danger of cancellation. The lobbying by its fans gained it a third season, but NBC also moved its broadcast time to the Friday night “death slot”, at 10 p.m. Eastern Standard Time (9:00 p.m. Central Time). Star Trek was cancelled at the end of the third season, after 79 episodes were produced. However, this was enough for the show to be “stripped” in TV syndication, allowing it to become extremely popular and gather a large cult following during the 1970s. The success of the program was followed by five additional television series and eleven theatrical films. The Guinness World Records lists the original Star Trek as having the largest number of spin-offs among all TV series in history.

The series begat five televisions series and 11 movies with more to come. I knew I loved Lucille Ball for a reason.

Well, Obama thought it was important enough to delay his Joint Session of Congress ‘Jobs’ speech for so I expect earth shattering developments of enormous consequence.

Or not.

I’ll not be live blogging it, or probably even watching as I’ll get a chance at the repeats, but if you have any observations of significance (or trivial expressions of snark) feel free to express them below.

Update: In a late breaking development Texas Governor Rick Perry is abandoning his state to be consumed by wild fires (after cutting the budget for fire fighting 70%) to attend this American Idol audition.

Evening Edition is an Open Thread

Now with 48 stories.

1 NASA twin spacecraft to map the inner Moon

By Kerry Sheridan, AFP

1 hr 36 mins ago

Despite the clear evidence that austerity budgets will hurt the stagnating economy, that tax cuts and focusing on the debt and deficit do not create jobs, President Barack Obama will present a $300 billion program that will propose more of the same. The Democrats on the bipartisan Congressional Super Committee that was created to solve the problem of the deficit, taxes and job stimulus, has taken a lead from Obama, more cuts, please:

The key dilemma facing President Obama and Congressional Democrats is that Republicans are wholly unwilling to support any new job-creating spending projects — even projects with bipartisan support — unless they’re offset with spending cuts or savings elsewhere in the budget.

Thus, Democrats on the new joint deficit Super Committee will seek more than the $1.5 trillion in deficit reduction they’ve been tasked with finding, in order to help offset some of those costs.

Guess where those cuts will come from? Social Security (which does NOT contribute to the deficit), Medicare and Medicaid with President Obama leading the way:

In the speech Thursday, Obama will challenge the 12-member congressional supercommittee to exceed its $1.5 trillion goal for budget savings – setting a higher target that would allow the additional money to fund tax breaks and other stimulus spending. But the “very specific” deficit recommendations that Obama promised last month won’t come until after the speech, although the exact timing is unclear, White House officials said.

snip

The deficit plan will be more specific than the framework the White House released in April. It is likely to include some unpopular measures that, until now, Obama backed only behind closed doors during the July talks with House Speaker John Boehner (R-Ohio), according to Democratic officials familiar with proposal.

Before the “grand bargain” fell apart over tax revenues, Obama and Boehner agreed on about $250 billion in proposed cuts to Medicare, including gradually raising the eligibility age to 67 and hiking co-pays and premiums for wealthier beneficiaries. They also agreed to change the inflation calculator for Social Security and other federal programs . . . .

Most polls indicate Americans believe the country is on the wrong track and that the president is doing a poor job handling the economy and yet all that is being put forward are the same ideas that put this country into this hole. Contrary to what Obama seems to think, his plan will not attract moderate and independent voters he so desperately needs in next year’s elections.

So unpredictable, and by that I mean totally…

Dictable I guess.

A Campaign Challenge: Defining Obama

By JEFF ZELENY, The New York Times

Published: September 6, 2011

Mr. Obama stands at a precarious moment of his term. Public pessimism is at its highest point in nearly three years, and his approval rating has fallen to its lowest, according to the latest Washington Post-ABC News Poll, which also found that more than 60 percent of those surveyed disapprove of how he is handling the economy and jobs.

The White House can no longer take comfort in comparing the approval ratings for Mr. Obama with Ronald Reagan’s or Bill Clinton’s in the months after their stinging midterm election defeats. By the time their re-election efforts were intensifying after Labor Day, their respective repositioning had helped elevate their approval above 50 percent.

…

“If this is just a referendum on economic conditions, then any incumbent is going to struggle with that, but it’s not just that. It’s a contest about what to do about it,” said David Axelrod, the chief strategist to the president’s re-election campaign. “I’d be more worried if I saw some compelling new argument for how to lead the country, but these guys are carrying the same old water.”

Speaking of carrying the same old water-

The president intends to offer at least some progressive proposals to help regain a fighting posture that he has not had since the health care debate, but a provision is also being discussed to place a new moratorium on some regulations that affect the economy, excluding health care and financial rules. The proposals are likely to infuriate an already unhappy Democratic base.

So he is going to be Endorsing The Rick Perry Jobs Program.

What else?  The same old, same old tax cuts that are 1) not new and will therefore not improve the economy OR create jobs and 2) are tax cuts which have been consistently proven over the last thirty years do not improve the economy OR create jobs.

Obama Jobs Plan: $300 Billion, Half to Tax Cuts

By: David Dayen, Firedog Lake

Wednesday September 7, 2011 6:10 am

We can divvy it up into five separate components:

1. tax-side stimulus. There you have the extension of the payroll tax cut, with a new employer-side cut, perhaps targeted only to firms that hire more workers on aggregate, as has been discussed.
2. infrastructure. Included in this is some amalgam of the surface transportation bill and the national infrastructure bank, along with Jared Bernstein’s FAST proposal for fixing and upgrading American public schools.
3. direct state aid. This is slightly new for this round, but still desperately needed. Jobs statistics for the past two years routinely show cuts in the public sector offsetting whatever gains exist in the private sector. Teachers and firefighters and cops and nurses are being laid off across the country. Stopping this corrosion is one of the best things the federal government can do right now.
4. help for the unemployed. Re-upping extended unemployment insurance benefits would be part of this, but also you can expect a program for long-term unemployed modeled after Georgia WORKS, which allows long-term jobless to collect benefits (as well as a small stipend) and essentially intern at local companies for a short-term assignment. This is controversial, as the benefits of Georgia WORKS are mixed at best, and labor leaders have questioned whether it violates federal laws to allow free labor for corporations. If you pushed this envelope further and made it a wage-subsidy policy, you might have something, but this appears tailored to catch the eye of Republicans.
5. mortgage relief. It’s possible some kind of mass-refinancing scheme gets announced, although there are hurdles, mainly FHFA Acting Director Ed DeMarco, who is reluctant to refi many borrowers who wouldn’t normally qualify as well as negate any representations and warrants liability on the part of the banks. There’s also the fact that banks don’t appear to be able to keep up with the refinancing applications at present, and there should be no faith that they would be able to support a surge in such work.

Let’s briefly look at the numbers. A $300 billion scheme would amount to around 2% of total GDP, and that’s being charitable by saying that this would all be used up in one year. That would have an impact, but half of this would be supply-side solutions that haven’t inspired much confidence during the recession. The question of whether temporary tax cuts are spent is a good one to ask. Especially on the employer side; if minimum wage increases have no effect on jobs, then surely tax subsidies to make hiring cheaper wouldn’t either.

What’s more, $112 billion of this $300 billion would come just from that extension of the payroll tax cut, which is already in place. That’s not stimulative, it’s just an extension of current law. So would be the $55 billion or so for unemployment benefits. Letting them expire might be undesirable, but just keeping them in place would just maintain the status quo, which last month created something on the order of zero jobs. The rest of the items amount to $130-$140 billion, not nearly enough to fill the demand gap hole. Actual direct public works spending is scant, and the supply-side faerie dust irrelevant to the actual problem.

…

If this is a policy document, it’s both inadequate and dangerous. If it’s a political one, it stays within well-drawn lines, rather than screaming what even the bond markets say the world needs – a complete reordering of fiscal policy to deal with a raging crisis. Yet we still have a Democratic Administration playing mostly on Republican turf.

(h/t lambert @ Corrente)