11/14/2011 archive

There are a lot of reasons to hate on Nancy Pelosi, but corrupt profiteering isn’t one of them.

Being an un-democratic sell out to the Corporatist Third Way is.

Part 1

Part 2

Part 3

If you can’t tell the difference between left and right criticisms of the Democratic Party and our elected “Representatives”…

Why, you might just be a ‘bot.

“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”.

Paul Krugman: Vouchers for Veterans

American health care is remarkably diverse. In terms of how care is paid for and delivered, many of us effectively live in Canada, some live in Switzerland, some live in Britain, and some live in the unregulated market of conservative dreams. One result of this diversity is that we have plenty of home-grown evidence about what works and what doesn’t.

Naturally, then, politicians – Republicans in particular – are determined to scrap what works and promote what doesn’t. And that brings me to Mitt Romney’s latest really bad idea, unveiled on Veterans Day: to partially privatize the Veterans Health Administration (V.H.A.).

What Mr. Romney and everyone else should know is that the V.H.A. is a huge policy success story, which offers important lessons for future health reform.

Richard (RJ) Eskow: Super Collusion: Will Obama and Capitol Dems Betray the Middle Class, Seniors and the Poor?

Two new reports suggest that the President and Congressional Democrats are about to betray everything Democrats once stood for. Under pressure from Barack Obama, Democrats on the “Super Committee” have sketched out an appalling “compromise” proposal that would almost certainly doom both their 2012 electoral chances and his own.

They’d have it coming. Their draft plan literally takes crutches away from poor people to protect tax breaks for the wealthy.

Unfortunately, middle class and impoverished Americans would suffer much more than they would. Career politicians can always look forward to comfortable sinecures from the wealthy interests who will benefit from their proposal. But the rest of us would once again be punished for the excesses of the rich, then left to the untender mercies of our new Republican leaders.

Occupy Wall Street NYC now has a web site for its General Assembly  with up dates and information. Very informative and user friendly. It has information about events, a bulletin board, groups and minutes of the GA meetings.

A musician took a stand at last night’s Asia-Pacific Economic Cooperation gala, which was attended President Obama and a slew of world leaders.

Hawaiian guitarist Makana, who has performed at the White House, wore a shirt that read “Occupy With Aloha” and played a song inspired by the Occupy Wall Street protests.

“We’ll occupy the streets, we’ll occupy the courts, we’ll occupy the offices of you, till you do the bidding of the many, not the few,” he sang at the Wakiki event. “The time has come for us to voice our rage.”

Last night, Portland television viewers were treated to wall-to-wall, all-local-channels, helicopters-hovering coverage of the approach – and uneventful passage – of Mayor Sam Adams’ three-day deadline of 12:01am to close the public parks where #OccupyPortland camped. [..]

It was a sad example of vast local newscaster resources marshaled around an approaching deadline – three days ago, Mayor Sam Adams told #Occupy that the downtown parks would be closed at 12:01am Sunday morning. The broadcast news folks created as much tension as they could muster as the deadline approached: helicopters in the air providing overhead views of streets and the parks, on-the-street correspondents interviewing patient, calm and friendly Police Bureau spokesmen who described their core mission: keeping people safe while encouraging everyone to leave. There were shaky handheld camera pans across the – mostly empty – campgrounds, as well as shaky video of – not terribly scary – protesters hiding up in trees! [..]

The palpable frustration among the local newscasters – no local Emmy nominations were generated last night – helped me understand that from the very top of our broadcast media to the very lowest rungs, there is a fundamental conflict between the message of the demonstrators and the needs of the media. Media requires conflict. The demonstrators were peaceful. In the very best #Occupy cases, like in Portland, the communication and engagement of the local police was calm, patient, and trustworthy. Despite the media’s best efforts, news wasn’t made last night in Portland. But not for lack of trying.

Some for the best coverage of the Occupy Wall Street protests has been by Kevin Gosztola @ FDL. Kevin is currently in the Northeast delivering supplies to the Occupy camps from donations collected from the OccupySupply drive by FDL.

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.

November 14 is the 318th day of the year (319th in leap years) in the Gregorian calendar. There are 47 days remaining until the end of the year.

On this day in 1851, the novel Mobey Dick is published. Moby Dick, a novel by Herman Melville about the voyage of the whaling ship Pequod, is published by Harper & Brothers in New York. Moby Dick is now considered a great classic of American literature and contains one of the most famous opening lines in fiction: “Call me Ishmael.” Initially, though, the book about Captain Ahab and his quest for a giant white whale was a flop.

Moby-Dick is widely considered to be a Great American Novel and a treasure of world literature. The story tells the adventures of the wandering sailor Ishmael, and his voyage on the whaleship Pequod, commanded by Captain Ahab. Ishmael soon learns that Ahab seeks one specific whale, Moby Dick, a ferocious, enigmatic white sperm whale. In a previous encounter, the whale destroyed Ahab’s boat and bit off his leg. Ahab intends to take revenge.

In Moby-Dick, Melville employs stylized language, symbolism, and metaphor to explore numerous complex themes. Through the main character’s journey, the concepts of class and social status, good and evil, and the existence of gods are all examined as Ishmael speculates upon his personal beliefs and his place in the universe. The narrator’s reflections, along with his descriptions of a sailor’s life aboard a whaling ship, are woven into the narrative along with Shakespearean literary devices such as stage directions, extended soliloquies and asides. The book portrays insecurity that is still seen today when it comes to non-human beings along with the belief that these beings understand and act like humans. The story is based on the actual events around the whaleship Essex, which was attacked by a sperm whale while at sea and sank.

Moby Dick has been classified as American Romanticism. It was first published by Richard Bentley in London on October 18, 1851, in an expurgated three-volume edition titled The Whale, and weeks later as a single volume, by New York City publisher Harper and Brothers as Moby Dick; or, The Whale on November 14, 1851. Although the book initially received mixed reviews, Moby Dick is now considered part of the Western canon.

First of all, I am back from taking vacation from writing for the past week.  I needed to get my thoughts organized and also to recharge a bit.  There are also some other things going on that are significant that I mentioned yesterday in a post.  But this is Pique the Geek, and we shall try to stay on topic.

Now, I hope that I have been right in this series more than twice, but these two instances are significant.  Those of you who read this series regularly know that I often write on health issues.  I have made recommendations here from time to time, and in these two occasions the Food and Drug administration (FDA) actually has, presumably independently, has adopted one of them outright and the other at least partially.

After doing more research, I have to say that my statement in the paragraph just above is not quite accurate.  FDA actually did something BEFORE I recommended it, but it got almost zero coverage and I just today found the information.  I shall clarify this as we go.

lambert has posted an interesting email from Warren Mosler, one of the advocates of Modern Monetary Theory.

It must be impossibile for the Fed to create inflation

lambert, Corrente

Sun, 11/13/2011 – 3:33pm

Hardly an hour goes by without some pundit pushing the possibility of some kind of run away inflation, with Zimbabwe and Wiemar rolling off the tongues of ordinary Americans everywhere. And Congressman and candidates of all persuasions continuously lambaste the Fed for debasing the currency.

…

For all practical purposes the Fed has done it all. And yet unemployment remains at depression levels of over 9% (and over 16% the way it used to be calculated not long ago) and the only thing keeping what’s called ‘inflation’ over 1% is a foreign monopolist supporting the price of crude oil.

So if inflation is this ominously lurking around every corner that requires eternal vigilance to keep from suddenly rearing it’s ugly head, why have all the Fed’s horses and all the Fed’s men not be able to inflate again? And why would anyone still think they can? I mean, we’re talking about college graduates with advance degrees and resources and power up the gazoo doing everything they can to reflate, and still failing after 3 long years? Not to mention the same in Japan for going on 20 years, where they have college grads with advanced degrees as well (though pretty much from the same schools).

Maybe this inflation thing is harder to get going than it looks? And what did go on in the German Wiemar republic, where if you parked a wheelbarrow full of money thieves would take the wheelbarrow and leave the money? Turns out it was those pesky war reparations that caused govt. deficit spending to soar to something like 50% of GDP annually, with most of that whopping deficit spending used to sell the German currency and buy foreign currency to pay their war reparations. As expected, that drove their currency down the rat hole in short order, and kept driving it down, causing that famous bout of hyper inflation that didn’t end until that policy ended. And when all that ended and policy changed the inflation stopped dead in its tracks. In one day. So how about Zimbabwe? Turns out they had a tad of civil unrest that dropped their productive capacity by about 80%, but govt. spending stayed high and too much spending power with too few goods and services for sale drove prices through the roof. Not to mention rumors of insiders using the local currency to buy foreign currencies for personal gain (sound familiar).

Applying this to the US to replicate the Wiemar inflation Congress would have to increase the deficit to about $8 trillion a year and then sell those dollars continuously in the market place, using them to buy the likes of yen, euro, and pounds. And replicating Zimbabwe would mean some kind of disaster that wiped out 80% of our real productive capacity and then continuing to spend federal dollars as if that never happened.

…

What all this tells me is that run away inflation, whatever that might mean, isn’t something hiding around every corner waiting to pounce. In fact, it takes a lot of work to get there, and not from the Fed, but from Congress. And not just what we’d call high levels of deficit spending, but ultra high levels of deficit spending.

I have no fear whatsoever of the Fed causing inflation. In fact, theory and evidence tells me their tools more likely work in reverse, due to the interest income channels. That’s because when they lower rates, they are working to remove net interest income from the private sector, and when they buy US Treasury securities (aka QE/ quantitative easing) they remove even more interest income from the economy. Remember that $79 billion in QE portfolio profits the Fed turned over to the Treasury last year? Those dollars would have otherwise remained in the economy.

So what’s the fundamental difference between what the Fed and can do and what Congress can do? The Fed can’t create net financial assets because they only buy, loan, and otherwise traffic in financial assets. Buying a bond or any other security only exchanges one financial asset for another and therefore doesn’t change the nominal (dollar) wealth of the economy. When the Fed buys a security, that security is no longer held by the economy. The Fed gets the security and the economy gets an equal dollar balance in a Fed account. The exchange is done at market prices so for all practical purposes it’s a equal exchange.

When Congress spends, however, it usually buys real goods and services, and not securities and other financial assets. So when the exchange takes place, Congress gets the real goods and services, which are not financial assets, and the economy gets dollar balances at the Fed, which are financial assets. So spending by Congress adds financial assets to the economy, to the penny, making it very different from what the Fed does.

And note that when the economy buys Treasury securities, all that happens is that the dollar balances the economy has at the Fed in what are called ‘reserve accounts’ get move to dollar balances in what are called ‘securities accounts’ at the Fed. Dollars in securities accounts and reserve accounts are all dollar financial assets. So shifting back and forth doesn’t change the dollar nominal wealth of the economy.