01/02/2012 archive

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”.

New York Times Editorial: Where the Real Jobs Are

The Republicans believe they have President Obama in a box: either he approves a controversial Canadian oil pipeline or they accuse him of depriving the nation of jobs. Mr. Obama can and should push back hard.

This is precisely the moment for him to argue the case for alternative fuel sources and clean energy jobs – and to lambaste the Republicans for doubling down on conventional fuels while ceding a $5 trillion global clean technology market (and the jobs that go with it) to more aggressive competitors like China and Germany.

Ben Adler: The Handful of White People Who Choose Your Presidential Candidates

On a two-day trip to New Hampshire last week I attended three campaign events with a total of roughly 600 people. I tried to find an African-American in the audience at all three events, but I couldn’t. To be fair, I did spot two Latinos and five or six Asian-Americans. The U.S., according to the 2010 census is 72.4 percent white. The first two states vote in the presidential primaries, Iowa and New Hampshire, are 91.3 percent white and 93.9 percent white, respectively.

The Iowa caucuses, which will be dramatically covered by the news media on Tuesday, are especially pernicious. In a caucus instead of a primary the Iowans who get to participate are even smaller in number and less diverse than the state’s already unrepresentative electorate.

John Nichols: Iowa’s $200-Per-Vote Caucuses Reward Negatives, Nastiness, Narrow Thinking

Des Moines-The Republicans who would be president, the super PACs and the surrogates had already spent more than $12 million on television ads-almost half of them negative-before the final weekend leading up to Tuesday’s Iowa caucuses.

That doesn’t count the thousands of radio ads, mailings, lighted billboards in Des Moines and costs for staff.

Add it all up and there is a good chance that, when all is said and done Tuesday night, the candidates will have spent $200 a vote to influence the roughly 110,000 Iowans who are expected to participate in the GOP caucuses.

And the really unsettling thing is that the caucuses are just for show.

While the results may so damage some candidates that their runs for the presidency will be finished, they will not actually produce any delegates to the Republican National Convention.

E.J. Dione, Jr.: Extravagant Hopes of 2008 Haunt Obama in 2012

Four years ago this week, a young and inspirational senator who promised to turn history’s page swept the Iowa caucuses and began his irresistible rise to the White House.

Barack Obama was unlike any candidate the country had seen before. More than a mere politician, he became a cultural icon, “the biggest celebrity in the world,” as a John McCain ad accurately if mischievously described him. He was the object of near adoration among the young, launching what often felt like a religious revival. Artists poured out musical compositions devoted to his victory in a rich variety of forms, from reggae and hip-hop to the Celtic folk song. (My personal favorite: “There’s no one as Irish as Barack O’Bama.”) Electoral contests rarely hold out the possibility of making all things new, but Obama’s supporters in large numbers fervently believed that 2008 was exactly such a campaign.

Joe Conason: Could Ron Paul Be the Next Ralph Nader?

Even as Barack Obama gradually climbs in national polls, more than a handful of the president’s once-ardent admirers suddenly seem more attracted to Ron Paul.

Long disappointed by Obama’s overly solicitous attitude toward banking, defense and national security interests-at the expense of economic justice and civil liberties-these disappointed critics find a satisfying echo in Paul’s assaults on the banks, the Federal Reserve, the military-industrial complex and, indeed, the entire American superstructure, including the miserably failed war on drugs. As a libertarian, he doesn’t actually share the liberal perspective on these issues but sometimes sounds as if he does.

Ari Melber: Two Keys for the Iowa Caucus Results: Evangelicals Love Ron Paul & Romney’s Bluff

The Republican presidential race actually begins Tuesday night. It is worth remembering that this is the first time we will hear from the voters – that everything up to this point, while presented as The Campaign, was actually a long, voter-less preseason consisting primarily of candidates, politicos, donors and reporters talking amongst themselves.

No one knows what these first voters will do.  We do know that whatever they convey, however, it will depart significantly from The Campaign Narrative so far.   The “frontrunner” will definitely not be Herman Cain, for example, since he isn’t even running now that the real race is beginning.  Last year’s conventional wisdom treated Cain like a huge contender – the press covered him more than any other candidate through all of November – while discounting “minor candidates” like Rick Santorum.  Since the narrative and the hype have been such poor guides to this race, here are a couple points to help cut through the clutter when assessing the Iowa results.


The Economist has recently published an article describing 3 schools of Economic thought that have gained prominence recently because of their advocacy on blogs.  Indeed, being a political blog reader you may not be aware that there are more Economic blogs and they are more active and have better traffic than political ones like this.

Two of my favorites are Naked Capitalism (Yves Smith) and EconoMonitor (Nouriel Roubini) but I also frequent Krugman and Felix Salmon as well as a few others.

To summarize briefly before I excerpt some of The Economist’s descriptions of each school, the 3 Schools are Modern Monetary Theory (neo-Chartalism), Austrian (Austerian), and Market Monetarism.  I would say the article is more sympathetic to the 3rd school than the others though you may disagree.

Also I’m not quite sure what they consider “mainstream”, but in fact the Friedmanite Freshwater School has been thoroughly discredited by the abject failure of their models to predict events.  It is not science of any sort, but the faith based mystical mutterings of rattle shaking Shamen.

Heterodox economics, Marginal revolutionaries

The crisis and the blogosphere have opened mainstream economics up to new attack

The Economist

Dec 31st 2011

This invisible college of bloggers focuses first on the level of spending on American products: America’s domestic output, valued at the prices people pay for it. This is what economists call “nominal” GDP (NGDP), as opposed to “real” GDP, which strips out the effects of inflation. They think the central bank should promise to keep NGDP on a steady upward path, rising at, say, 5% a year. Such growth might come about because more stuff is bought (“real” growth) or because prices are higher (inflation). Mr Sumner’s disinhibition is to encourage the Fed not to care which of the two is doing more of the work.

Central banks set targets to make their currencies credible and their policies predictable. The target for many is to keep consumer prices growing at 2% a year or thereabouts. For the past few decades that has largely succeeded in stabilising inflation; but in the current crisis it has singularly failed to stabilise the economy. In America NGDP plunged over 11% below its pre-crisis path and remains there; what people buy at the prices they pay for it is much less than most would want.

(P)ut into the context of a pathetic response to the current crisis, the ideas offered by these very different schools all take on a similar form: that policymakers are overly worried about something that should concern them less. The Austrians see the bogeyman as deflation, the fear of which inflates bubbles. The market monetarists, diametrically opposed, see exaggerated fear of inflation. And the economy is getting too little help from fiscal stimulus, according to neo-chartalists, because of the government’s superstitious fear of insolvency.

Modern Monetary Theory

The neo-chartalists believe that because paper currency is a creature of the state, governments enjoy more financial freedom than they recognise. The fiscal authorities are free to spend whatever is required to revive their economies and restore employment. They can spend without first collecting taxes; they can borrow without fear of default. Budget-makers need not cower before the bond-market vigilantes. In fact, they need not bother with bond markets at all.

The policy conclusions neo-chartalism draws from this owe a lot to Abba Lerner, John Maynard Keynes’s “militant prophet”. Lerner believed governments should judge their fiscal policy by its economic results-its impact on jobs and inflation-and ignore any red ink it might spill. Governments should seek high employment and stable prices, much as the Fed does today. But instead of relying on monetary policy to meet these objectives, they should use fiscal policy instead. If private spending is too strong, pushing up prices and threatening inflation, the government should raise taxes or cut its own spending. If, on the other hand, private spending is too weak, jeopardising jobs, the government should cut taxes or increase its own spending.

So far, so Keynesian. But most Keynesians, anxious to appear fiscally responsible, say that budget deficits in bad times should be offset by surpluses in good times, keeping the level of debt seemly. Lerner admitted this might not be possible. Private spending might be chronically weak. If so, the government should run chronic deficits, adding continuously to the national debt. Lerner did not see that as much of a problem, though he recognised that many others were “easily frightened by fairy tales of terrible consequences”.

Austrian Economics

The “Austrian” school of economics, which traces its roots to 19th-century Vienna, is more sternly pre-Freudian: more inhibition, not less, is its prescription. Its adherents believe that part of the economy’s suffering is necessary, an inevitable consequence of past excesses. They do not think the Federal Reserve can rescue the economy. They seek instead to rescue the economy from the Fed.

(A)dvocate(s) of Austrian economics-a resurgent school of thought that, unlike market monetarism, has not been doing much to change the minds of most mainstream economists but, unlike neo-chartalism, has built up a broad constituency on and through the web… agree that interest rates should reflect the fundamental forces of thrift rather than the whims of central bankers.

The Austrian school’s thinking centres on the way “malinvestment” orchestrated by central banks distorts the business cycle. By keeping interest rates artificially low, central banks trick entrepreneurs into believing that society is more abstemious than it really is. The entrepreneurs then embark on ambitious, long-gestation investment projects, only to discover that the men and materials they require are otherwise engaged in the production of more immediate gratifications. Once this realisation dawns, the entrepreneurs abandon their follies, firing their workers. If wages are flexible and workers mobile, this bust need not be too bad. But misguided attempts by the government or the Fed to prevent unemployment will delay the necessary reshuffling of labour from industries too tied up in the future to those catering to the needs of the present.

Most economists do not share their admiration for the gold standard, which did not prevent severe booms and busts even in its heyday. And their theory of the business cycle has won few mainstream converts. … While it provides insights into booms and their ending, it fails to explain why things must end quite so badly, or how to escape when they do. Low interest rates no doubt helped to inflate America’s housing bubble. But this malinvestment cannot explain why 21.8m Americans remain unemployed or underemployed five years after the housing boom peaked.

Market Monetarism

The market monetarists point out that their 5% (NGDP) target is consistent with inflation of about 2%, provided the economy grows at about 3% a year, its rough average for the pre-crisis years. If growth slowed to 1%, inflation would have to be permanently higher, ie 4%. If output suffered a one-time drop, inflation might have to surge temporarily above 5%. But as growth returned to normal, inflation would recede.

In pursuing this target, the central bank would use many of the same tools as today: tweaking the short-term interest rate and, when that reaches zero, increasing NGDP by printing new money to buy more assets (ie, quantitative easing). And the very creation of the NGDP target would make such intervention more effective, Mr Sumner says. If people expect the central bank to return spending to a 5% growth path, their beliefs will help get it there. Firms will hire, confident that their revenues will expand; people will open their wallets, confident of keeping their jobs. Those hoarding cash will spend it or invest it, because they know that either output or prices will be higher in the future.

The market monetarists argue that fiscal stimulus should be redundant, because a central bank can always revive spending-if it sets its mind to it. If the Fed’s efforts have disappointed, it is not because market monetarism is wrong, but because the Fed is not sufficiently committed to the cause.

The market monetarists do not fret about the side effects of the activism they seek, which can misdirect capital, inflate bubbles and seduce people into over-borrowing.

So, if I may be permitted to summarize, Austrians believe that over-supply of money is what causes busts and depressions, Market Monetarists think that vigorous application of monetary stimulus can solve them, and Modern Monetary Theorists think that the amount of money available to the economy is mostly irrelevant and that aggregate demand should be managed to provide predictable levels of employment and growth.

As always the specters of Weimar and Zimbabwe are raised, but those are special cases where money was manufactured for the sole purpose of speculating in external currencies, NOT the internal economy.  In Germany’s case it was the necessity of purchasing gold (external currency) to fulfill their Versailles reparations obligations.  In Zimbabwe it was so the corrupt political elite could ex-patriate their stolen wealth.

On This Day In History January 2

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.

January 2 is the second day of the year in the Gregorian calendar. There are 363 days remaining until the end of the year (364 in leap years).


On this day in 1962, the folk group The Weavers are banned by NBC after refusing to sign a loyalty oath.

The Weavers, one of the most significant popular-music groups of the postwar era, saw their career nearly destroyed during the Red Scare of the early 1950s. Even with anti-communist fervor in decline by the early 1960s, the Weavers’ leftist politics were used against them as late as January 2, 1962, when the group’s appearance on The Jack Paar Show was cancelled over their refusal to sign an oath of political loyalty.

The importance of the Weavers to the folk revival of the late 1950s cannot be overstated. Without the group that Pete Seeger founded with Lee Hays in Greenwich Village in 1948, there would likely be no Bob Dylan, not to mention no Kingston Trio or Peter, Paul and Mary. The Weavers helped spark a tremendous resurgence in interest in American folk traditions and folk songs when they burst onto the popular scene with “Goodnight Irene,” a #1 record for 13 weeks in the summer and fall of 1950. The Weavers sold millions of copies of innocent, beautiful and utterly apolitical records like “Midnight Special” and “On Top of Old Smoky” that year.


122nd Tournament of Roses Parade

Customarily I’d be live blogging commentary for you, but this year I happen to be visiting with a friend who doesn’t have TV.

Still there are features of interest you might wish to remark on.

This year’s Rose Parade is on the 2nd instead of New Year’s Day because the NFL is such an 800 pound gorilla that nothing interferes with pre-playoff Sunday in which I have but a passing interest (heh).  I find that remarkable and as I have no idea who won or lost yesterday you may choose to surprise me with the results.

The parade itself is not without features of interest-

122nd Rose Parade to kick off with pomp, pageantry and political protest by Occupiers

By Associated Press, The Washington Post

Monday, January 2, 4:02 AM

Police, parade and city officials have held numerous meetings with the organizers of Occupy the Rose Parade to ensure that protesters keep to the end of the two-hour long procession, where spectators and other groups who want to make political statements regularly tag along.

Several hundred activists are expected to turn out to carry a 70-foot wide octopus puppet that symbolizes the far-reaching influence of corporations, a giant U.S. Constitution, a “Goldie Sachs” wheel of fortune, as well as banners, placards and drums.

It is expected to get at least moderate media coverage on a market closed Monday.  I doubt very much they will qualify for any of the trophies unless they have an equestrian unit or cover their floats with flowers.

The regular hoopla starts at 11 am (ET) on NBC and ABC.  KTLA is supposed to have a live feed here.  This year they will have 16 Marching Bands and 22 Equestrian Units in addition to 44 flower covered Floats.

Hope you had a safe and happy celebration.  This is an Open Thread (but aren’t they all?).


Pique the Geek 20120101: Aluminum

Aluminum (or aluminium to our UK friends) is one of the most useful metals that are commonly available.  Unlike other metals such as iron, copper, and the like, aluminum has been used in large quantities only fairly recently.  Actually, alumimium is the better name, because it is in keeping with the naming of most metallic elements with the “ium” ending.  However, we shall use the US term.  Interestingly, the brilliant British chemist Sir Humphrey Davy called it aluminum, but he never produced the actual metal.  In addition, his first name for it was alumium, and folks from My Little Town who were older used that name!  That really should be the systematic name for it.

Aluminum compounds have been known for centuries, but the free metal only since around 1825 and even then in an impure form.  It was not until very late in the 19th century that aluminum was produced on a large scale, using a process that is essentially identical with the process being used even now.