05/04/2012 archive

The French Presidential Election 2012: A Pause Before the Vote

The French Presidential election will take place this Sunday, May 6. Meanwhile, the campaigning has ended Friday evening with the Socialist challenger, François Hollande, still predicted to defeat current President Nicholas Sarkozy:

The last Ipsos poll for French television and Le Monde puts Hollande on 52.5% with Sarkozy closing the gap but still behind on 47.5%. The poll was taken before the dramatic decision by centrist François Bayrou to throw his weight behind Hollande in the second round.

The vast majority of voters appear to have made up their minds, with 92% saying they know who they will vote for, and 82% saying they will definitely turn out.

Many are seeing this as not just a referendum about Sarkoszy’s “hyperactive” style but the start of a revolt against austerity which many now believe has slowed the recovery from the recession. Wolfgang Münchau wrote in the Financial Times that Hollande is start of progressive insurrection:

. Nicolas Sarkozy does not look like a president, talk like a president, or act like a president. But there is a better reason why he deserves to be ejected. He won the 2007 campaign with a promise of ambitious economic reforms. He was one of the few European politicians with a mandate for big changes. He flunked it for a reason that already became apparent during the 2007 campaign: he was hyperactive. Reforms are for boring politicians. [..]

The main reason why I look forward to a Hollande presidency is for its impact on Europe. At present, all the large, and many of the small, eurozone countries are governed by centre-right governments. Angela Merkel is their undisputed queen. Mr Hollande is not going to be a comfortable partner. On some issues, such as the fiscal pact, he will challenge her outright.

I would welcome a Hollande presidency on the grounds that it would introduce a much needed shift in the toxic narrative about the eurozone crisis and its resolution. According to this narrative, the crisis was caused by fiscal irresponsibility. Its prescription is austerity and economic reforms. The tool to achieve the former is the fiscal pact, which Mr Hollande has said he will not sign unless it is complemented by policies to boost economic growth.

I wish that Mr Hollande would go further because austerity will snare countries in a low-growth trap. No set of structural policies will change this. I understand the political reason why he does not want to go further. He does not want his presidency to start with an existential fight with Germany – and the dreaded prospect of another panic attack by global investors.

While, as Paul Krugman as noted, the prospect of a Hollande presidency has generated some “hysteria” in the financial world:

Today’s FT is all Hollande, all the time. Some of it is sensible; some of it is like, well, this piece by Josef Joffe, which declares that Hollande’s likely victory is “a bleak prospect for all but new Keynesians and old socialists.” [..]

Joffe is, however, useful as a guide to the German view, which is basically that we got ourselves competitive and restored growth, so why can’t everyone else. Somehow he never mentions that Germany’s recovery in the 2000s was driven by a huge move into trade surplus; is everyone supposed to do the same thing, all at once? What’s the Germany for “fallacy of composition”?

The voting ends at 8 PM Paris time and the results will be reported here Sunday afternoon around 2 PM EDT.

Fed- We Fucking Give Up!

Well, then do us all a favor and quit you incompetent assholes!

Pre-recession unemployment rate is out of reach

A new report authored by a Federal Reserve president says unemployment cannot fall to pre-recession levels without an inflationary impact. So get used to high unemployment.

By Nin-Hai Tseng, Fortune

May 4, 2012: 11:50 AM ET

On Thursday, John Williams, president of the Federal Reserve Bank of San Francisco, suggested that perhaps Americans should lower their expectations given the challenges workers faces. A research note co-authored by Williams estimated that the lowest level of joblessness that can be reached without leading to inflation could be 6.5%. Before the recession, the unemployment rate was generally at around 5%.

In early 2009, eligibility for unemployment benefits was extended from 26 weeks to up to 99 weeks.

While such benefits reduce hardships for the unemployed, they might also “reduce the incentive of the unemployed to seek and accept less desirable jobs,” according to the report.

If workers are latching on to any hope that the economy has turned a corner, perhaps they’d be more realistic by hoping for a little less.

Don’t let the door hit you, you lazy useless gits.

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”.

Paul Krugman: Plutocracy, Paralysis, Perplexity

Before the Great Recession, I would sometimes give public lectures in which I would talk about rising inequality, making the point that the concentration of income at the top had reached levels not seen since 1929. Often, someone in the audience would ask whether this meant that another depression was imminent.

Well, whaddya know?

Did the rise of the 1 percent (or, better yet, the 0.01 percent) cause the Lesser Depression we’re now living through? It probably contributed. But the more important point is that inequality is a major reason the economy is still so depressed and unemployment so high. For we have responded to crisis with a mix of paralysis and confusion – both of which have a lot to do with the distorting effects of great wealth on our society.

Eugene Robinson: Afghanistan, For the Long Haul?

Show of hands: Does anybody really understand the U.S. policy in Afghanistan? Can anyone figure out how we’re supposed to stay the course and bring home the troops at the same time?

I’m at a loss, even after President Obama’s surprise trip to the war zone. The president’s televised address from Bagram air base raised more questions than it answered. Let’s start with the big one: Why?

According to Obama, “the United States and our allies went to war to make sure that al-Qaeda could never use this country to launch attacks against us.” I would argue that U.S. and NATO forces have already done all that is humanly possible toward that end. [..]

David Sirota: Property Rights in the Cloud

When you hear the phrase “property rights,” you probably think of farmers fighting environmental regulators and homeowners arguing with oil drillers. But in the Information Age, you should also be thinking about your computer-and asking, how much of you is really yours? It’s not a navel-gazing rumination from a college Intro to Existentialism class-it’s an increasingly pressing question in the brave new world of social networking and cloud computing.

Last week’s big technology announcement spotlighted the thorny issue. As the Los Angeles Times reported, Google’s announcement of its “Google Drive” came with the promise that users will “retain ownership of any intellectual property rights that you hold in that content.” But when you save files to Google’s new hard-drive folder in the cloud, the terms of service you are required to agree to gives Google “a worldwide license to use, host, store, reproduce, modify, create derivative works, communicate, publish, publicly perform, publicly display and distribute (your) content” as the company sees fit.

Kristen Breitweiser: Heights of Hypocrisy: The Universal Use of 9/11 in Politics

A year ago, I wrote a blog about the death of Osama bin Laden, “Today is Not a Day of Celebration for Me.”

I wrote the blog after witnessing so many Americans celebrating, fist-pumping, dancing, and reveling in the streets about the death of bin Laden.

Seeing so many Americans acting like that was too much of an uncomfortable reminder of those who celebrated in the streets during the attacks of 9/11 while men like my husband either burned alive, were crushed alive, or horrifically jumped to their deaths.

A year ago, what drove me to write was my sadness in bearing the sight of Americans celebrating the death of anyone — even the man largely responsible for the murder of my husband.

Now one year later, I am once again driven to write due to witnessing President Obama resort to the same campaign tactics as George W. Bush.

Frankly, for what it’s worth, it sickens me; and it saddens me.

New York Times Editorial: ‘Beyond Debate’

Jose Padilla, the American citizen detained as an enemy combatant after he was arrested by the Bush administration in May 2002, was denied contact with his lawyer, his family or anyone else outside the military brig for almost two years and kept in detention for almost four. His jailers made death threats, shackled him for hours, forced him into painful stress positions, subjected him to noxious fumes that hurt his eyes and nose and deafening noises at all hours, denied him care for serious illness and more.

This treatment was indisputably cruel, inhumane and shocking, in breach of the minimum standard required for anyone in American custody, especially a citizen. Some of it was torture, though Mr. Padilla should not have had to prove that to show his treatment was unconstitutional.

Robert Naiman: John Brennan Should Tell the Whole Truth About the Drone Strikes

On Monday, White House counterterrorism adviser John Brennan publicly addressed the U.S. use of drone strikes against suspected terrorists in countries with which the United States is not at war, like Yemen and Pakistan. The fact that Brennan publicly addressed the drone strikes is a significant improvement, long overdue. We can’t say we have meaningful democratic oversight over government policy if government officials refuse to talk about government policy in public – enabling us to challenge what they say – and it’s preposterous to claim that the drone strikes are “secret” when they are openly reported in the media.

But John Brennan didn’t tell the whole truth about the drone strikes. Brennan claimed that “the United States government conducts targeted strikes against specific al-Qaeda terrorists,” but Brennan didn’t admit that the U.S. has launched drone strikes in Pakistan and Yemen against people who are not known to be on any list of “suspected terrorists,” without knowing who would be killed.

Bring Me DeMarco’s Head

From Glen Ford at the Black Agenda Report

Bring Me the Head of Ed DeMarco!

President Obama must fire Federal Housing Finance Agency acting director Ed DeMarco because he “has flatly refused to do any kind of principal reduction for the millions of ‘underwater’ homeowners that are suffering, that are drowning in debt because of how the banks crashed the economy,” said Tracy Van Slyke, co-director of New Bottom Line. The coalition of faith-based and community organizations demand a “minimum of $300 billion in principal reduction.” Van Slyke claims New Bottom Line and other Occupy Wall Street-related efforts have “moved the administration far along from where they were. We have moved the dial.”

Why Obama Won’t Help Foreclosure Victims

The Obama administration has repeatedly refused to spend moneys a set aside for distressed homeowners and communities. Why? Because banks have refused to cooperate with such programs, fearing that intervention in the housing market “would threaten to upset the bankers’ carefully calibrated market manipulations.” They would rather continue rigging the game. “The banks have been carefully dribbling out houses for sale, attempting to artificially stabilize prices with the goal of pumping up another bubble.”

The Obama administration’s failure to spend almost any of the $7.6 billion in TARP housing money set aside for the neediest regions of the country seems counterintuitive [..]

The Hardest Hit Fund was specifically targeted to homeowners in areas most seriously impacted by unemployment and falling home values – a formula tailor made for Black and Latino communities devastated by massive foreclosures and layoffs. [..]

The problem was, Obama’s people resisted putting the program into effect. [..]

The problem begins at the top. Obama has consistently protected bankers’ rights to deal with homeowners as they please.

AS reported in the Washington Post: Fannie Mae had seen benefits to lowering some home loans, documents indicate:

Officials at government-backed mortgage giant Fannie Mae concluded years ago that the company could “reduce its losses substantially” by lowering loan amounts for some troubled borrowers, according to internal documents cited Tuesday by the top Democrat on the House oversight committee.

The new insights into Fannie Mae’s analyses about the potential benefits of so-called principal reduction surfaced in a letter from Rep. Elijah E. Cummings (D-Md.) to Edward J. DeMarco, the acting director of the independent agency that oversees Fannie Mae and Freddie Mac.

Since being appointed head of the Federal Housing Finance Agency (FHFA) in 2009, DeMarco has refused to allow Fannie and Freddie to write down loan balances, in part because he worries that some homeowners would stop paying their mortgages to get relief, ultimately costing taxpayers more money. He has been steadfast in his disapproval in recent months despite growing pressure from Obama administration officials and House Democrats to allow principal reductions.

Those “internal documents” led to accusations that DeMarco, a Republican career public servant appointed by Obama to head the FHFA, withheld information from Congress about the findings:

“This just adds to the pile of evidence that calls into question how sincere DeMarco is about treating this issue seriously,” said Ian Kim, director of campaigns for Rebuild the Dream, a progressive advocacy group that has been urging a principal reduction program.

Supporters of principal reduction argue that it would reduce foreclosures by lowering the monthly payments for underwater homeowners and giving them hope they would one day have more equity in their homes.

Opponents counter that reducing the principal on mortgages owned or backed by Fannie and Freddie could increase their losses and encourage homeowners who are making payments to fall behind in order to lower their debt.

The new documents contradict DeMarco’s congressional testimony in November that analyses by Fannie and Freddie concluded that other forms of homeowner assistance were less costly to taxpayers, the lawmakers said. [..]

The failure to launch a principal reduction program “was not merely a missed opportunity, but a conscious choice that appears to have been based on ideology rather than Fannie Mae’s own data and analyses,” the lawmakers said.

It’s time for DeMarco to go and the Obama administration to stop protecting the bankers who won’t support him ever.


Art valuation datapoints of the day

Felix Salmon, Reuters

May 3, 2012 11:11 EDT

As you have no doubt heard by now, The Scream sold at Sotheby’s for $120 million yesterday, prompting Mark Gongloff to wax apocalyptic about “the big squeaky speculative bubble in the art world”. He’s absolutely wrong: whether there’s a bubble or not, this purchase was not speculative.

Remember the Card Players which sold for $250 million? Or, for that matter, the Jeff Koons Rabbit I wrote about earlier this week, which is probably worth the same amount of money as The Scream, more or less? The three artworks all have something in common: they’re editions, broadly speaking. There are four Screams, five versions of the Card Players, and four Rabbits. And in each case, the value of any given work goes up, not down, as a result of the existence of the others.

That’s because what people are buying, when they buy one of these pieces, is a cultural icon, something instantly recognizable. As Clyde Haberman says of the Scream, “if you’ve never seen a tacky facsimile of it, there’s a chance that you have also never seen a coffee mug, a T-shirt or a Macaulay Culkin poster”. And truth be told, it’s not exactly Good Art.

The real value of the Scream, then, the reason that a pastel on cardboard sold for $82 million more than the price of the oil-on-canvas Vampire, lies precisely in all those mugs and t-shirts and Home Alone one-sheets. Whatever was being bought, here, it wasn’t really art, in any pure sense. It was more the result of a century’s worth of marketing and hype.

Or, to take another example, an old porcelain bowl, roughly the size of your hand, and looking like nothing so much as the thing which lives by the door where you keep your keys, sold for $27 million at Sotheby’s in Hong Kong last month. It might be a trophy, but it’s not an obvious, branded trophy in the way that the Scream is.

On This Day In History May 4

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.

Click on images to enlarge

May 4 is the 124th day of the year (125th in leap years) in the Gregorian calendar. There are 241 days remaining until the end of the year.

On this day in 1970, At Kent State University, 100 National Guardsmen fire their rifles into a group of students, killing four and wounding 11. This incident occurred in the aftermath of President Richard Nixon’s April 30 announcement that U.S. and South Vietnamese forces had been ordered to execute an “incursion” into Cambodia to destroy North Vietnamese bases there. In protest, a wave of demonstrations and disturbances erupted on college campuses across the country.

There were no warnings when the Guardsmen opened fire. 60 rounds were fire into the crowd of demonstrators. After an investigation, all the charges were dropped against the National Guard in 1974.

New audio from the day of the shootings has been released on a website dubbed KentState1970.org. The site also features images of the historic day’s tragic events.