“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.
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Paul Buchheit: War or Revolution Every 75 Years. It’s Time Again.
When Charles Dickens wrote “It was the best of times, it was the worst of times” to begin “A Tale of Two Cities,” he compared the years of the French Revolution to his own “present period.” Both were wracked with inequality. But he couldn’t have known that 75 years later inequality would cause the Great Depression. Or that 75 years after that, in our own present period, extreme inequality would return for a fourth time, to impact a much greater number of people. He probably didn’t know that the cycles of history seem to drag the developed world into desperate times about every 75 years, and then seek relief through war or revolution.
It’s that time again.
Three cycles (225 years) ago, in the years before the French Revolution, inequality was at one of its highest points ever. While it’s estimated that the top 10% of the population took almost half the income, as they do today, the Gini Coefficient was between .52 and .59, higher than the current U.S. figure of .47. The French Revolution began a surge toward equality that lasted well into the 19th century.
New York Times Editorial: Now, Spain
Two weeks after Prime Minister Mariano Rajoy of Spain vowed “there will be no Spanish banking rescue,” and after days of delay in which Mr. Rajoy pressed European officials for sounder rescue terms, Spain has now joined Greece, Ireland and Portugal as the latest bailout recipient. Catastrophe averted? Hardly.
Bailouts – this one is worth up to $125 billion – are supposed to help restore investor confidence. But investors have clearly figured out what too many European politicians are still denying: serial bailouts, piecemeal plans and one-size-fits-all austerity are not a solution.
On Monday, Spanish and Italian borrowing costs spiked after Mr. Rajoy, the day before, had lamely tried to downplay the new bailout – calling it a line of credit – while Mario Monti, Italy’s prime minister, publicly warned of a “permanent risk of contagion.”
This month, Europe will either sink deeper into economic crisis, or drastically reverse course. The results from the first round of the French legislative elections Sunday are encouraging. Projections suggest that after the second round next Sunday, President Francois Hollande’s Socialist Party will either have an absolute majority, or, at worst, a working majority with other left parties. This will increase Hollande’s leverage within Europe as a counterweight to German Chancellor Angela Merkel.
Merkel’s strategy, for now, has been to change the subject. With insane austerity policies having been inflicted on weak economies at the insistence of the German government, Merkel, confronted with a worsening crisis, has been speaking grandiosely of deeper European integration.
But the kind of fiscal integration that Merkel proposes will take years if not decades, and the European economy is going up in smoke right now. Fiscal and tax integration will be even less plausible if it includes German-style austerity.
Simon Johnson: We Need a Watchdog for all the New Watchdogs
Two years after passage of the Dodd- Frank financial reform law, how are we doing putting in place crucial provisions, including a way to control systemic risk?
Not well, according to Sheila Bair, chairman of the Federal Deposit Insurance Corp. during the 2008-2009 economic disaster and author of some of the reforms in the act. [..]
Her point is simple. The Dodd-Frank Act created the all- important Financial Stability Oversight Council (known as FSOC and pronounced F-Sock). It replaced the President’s Working Group on Financial Markets, a panel frequently mentioned in former Treasury Secretary Henry Paulson’s memoir of the financial crisis, “On the Brink.” That working group lacked authority to coordinate the alphabet soup of regulators overseeing the U.S. financial system.
Richard (RJ) Eskow: The “Fiscal Cliff”? A Hoax. The Democrats’ “Long Game”? A Myth. This Is the Real Budget Battle
Suddenly the headlines are filled with talk of an impending “fiscal cliff,” a series of tax and budget changes which the news pages say is an impending catastrophe and which the editorial pages are urging Washington lawmakers to prevent.
How would they do that? Why, with the same “Grand Bargain” we keep hearing about, an economically destructive plan in which Democrats betray their principles by imposing benefit cuts to Social Security and Medicare in return for the Republicans’ grand concession of raising taxes on – you.
It’s a nearly surreal situation: Democrats acting like Republicans, and Republicans acting like Visigoths about to sack every city on the continent. All this surreality raises all sorts of Zen-like questions.
Josh Silver: Citizens United Mastermind Ousted From RNC
On Friday, Indiana attorney Jim Bopp quietly lost reelection to the Republic National Committee. Bopp is the architect of the infamous Citizens United Supreme Court case that gave us super PAC’s and the torrent of political spending that has turned elections into auctions. [..]
Bopp’s extremism helps us understand the irrationality of the Citizens United case, which actually asserts that super PACs do not create corruption or even the appearance of corruption. You have to be an extremist or just naive to buy that assertion. Bopp’s actions demonstrate that the infamous court case is part of the broader effort cede control of our country to monied interests while our leaders — and the public — become more polarized and divided.
Nancy Altman and Eric Kingson: Alan Simpson: Pulling Apart Social Security, And Proud of It
Dear Senator Simpson,
Your plan would begin pulling apart our Social Security system brick by brick. Unfortunately, you seem to think that bigotry and bullying will silence those of us who are trying to educate the public about the devastating cuts in your plan. No amount of ageism, however, can hide the harm your plan would cause for Americans — young and old, alike.
That is why we ask that you stick to your word and have an open and public discussion with young people, who would be hit hardest by the drastic cuts in your plan, and we have started a petition to gather the support of others who think you shouldn’t go back on your word.
A bigot is someone who stereotypes an entire group of people with a pejorative label as a way of advancing his or her own views and prejudices. An ageist, a term coined by the late Dr. Robert Butler, the founding director of the National Institute on Aging, is someone who directs that prejudice against older people.
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