August 2012 archive

“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”.

Follow us on Twitter @StarsHollowGzt

Gail Collins: Arms and the Duck

We had a shooting near the Empire State Building. An aggrieved ex-employee of an apparel company killed his former co-worker, and was himself killed by police. Except for the famous-landmark location, it was not actually a very big story. Remember the mass shooting at the lumberyard in North Carolina earlier this year, or the one last October at the California cement plant? No? Neither does anybody else except the grieving families.

Nine passers-by were also wounded, and it seems almost certain that some or all were accidentally hit by the police. This isn’t surprising; it’s only in movies that people are good shots during a violent encounter. In 2008, Al Baker reported in The Times that the accuracy rate for New York City officers firing in the line of duty was 34 percent.

And these are people trained for this kind of crisis. The moral is that if a lunatic starts shooting, you will not be made safer if your fellow average citizens are carrying concealed weapons.

Sahar Aziz: Creeping Counterterrorism: From Muslims to Political Protesters

Few Americans are surprised to hear that 9/11 shifted our domestic terrorism focus from neo-Nazis and white supremacists to Muslims in America. What may come as a surprise, however, is the pervasive use of anti-terrorism powers against non-Muslims as well, including white middle-class protesters – as we saw in the Occupy movement.

The 9/11 terrorists’ warped misinterpretation of Islam triggered a maelstrom of expanded national security powers selectively enforced against American Muslims en masse.  Mosques are infiltrated with dubious and highly paid informants, thereby chilling religious freedom. Mentally unstable young Muslim men are targets of overzealous counterterrorism sting operations, and Muslim student associations are under mass surveillance for no apparent reason other than the religious identity of their members.  Despite the serious civil liberties implications of such selective enforcement, it has occurred with minimal opposition by the American public.

Our shortsighted forfeiture of civil liberties based on fears of the “Muslim other” now equips our government to quash political dissent.

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.

August 25 is the 237th day of the year (238th in leap years) in the Gregorian calendar. There are 128 days remaining until the end of the year.

On this day in 1768, James Cook began his first voyage to travel to the Pacific Ocean to observe and record the transit of Venus across the Sun. This would be the first of three voyages that would be hailed as  heroic by the scientific community.

The routes of Captain James Cook’s voyages. The first voyage is shown in red, second voyage in green, and third voyage in blue. The route of Cook’s crew following his death is shown as a dashed blue line.

In 1766, the Royal Society hired (James) Cook to travel to the Pacific Ocean to observe and record the transit of Venus across the Sun. Cook was promoted to Lieutenant and named as commander of the expedition. The expedition sailed from England in 1768, rounded Cape Horn and continued westward across the Pacific to arrive at Tahiti  on 13 April 1769, where the observations were to be made. However, the result of the observations was not as conclusive or accurate as had been hoped. Cook later mapped the complete New Zealand coastline, making only some minor errors. He then sailed west, reaching the south-eastern coast of the Australian continent on 19 April 1770, and in doing so his expedition became the first recorded Europeans to have encountered its eastern coastline.

On 23 April he made his first recorded direct observation of indigenous Australians at Brush Island near Bawley Point, noting in his journal: “…and were so near the Shore as to distinguish several people upon the Sea beach they appear’d to be of a very dark or black Colour but whether this was the real colour of their skins or the C[l]othes they might have on I know not.” On 29 April Cook and crew made their first landfall on the mainland of the continent at a place now known as the Kurnell Peninsula, which he named Botany Bay after the unique specimens retrieved by the botanists Joseph Banks and Daniel Solander. It is here that James Cook made first contact with an Aboriginal tribe known as the Gweagal.

After his departure from Botany Bay he continued northwards, and a mishap occurred when Endeavour ran aground on a shoal of the Great Barrier Reef, on 11 June, and “nursed into a river mouth on 18 June 1770.” The ship was badly damaged and his voyage was delayed almost seven weeks while repairs were carried out on the beach (near the docks of modern Cooktown, at the mouth of the Endeavour River). Once repairs were complete the voyage continued, sailing through Torres Strait and on 22 August he landed on Possession Island, where he claimed the entire coastline he had just explored as British territory. He returned to England via Batavia (modern Jakarta, Indonesia), the Cape of Good Hope and the island of Saint Helena, arriving on 12 July 1771.

Aqualung is the forth album by Tull and many people think that it is their best.  I favor Thick as a Brick, but it is still an excellent album.  Rumor has it that critical comments about Aqualung spawned Thick as a Brick, and we shall discuss that in a bit.

It was released on 19710319 on Island Records in the UK and Reprise in the US.  By this time Anderson had completely taken control of the band, and all of the songs are written by him except for the title track which was cowritten by his wife at the time, Jennie.  Anderson, along with Terry Ellis, produced it.

The band lineup was different than that of Benefit, with Jeffrey Hammond replacing replacing Glen Cornick on bass and Barriemore Barlow replacing Clive Bunker on drums.  Remember, Jethro Tull has had more personnel changes than many bands.  Otherwise the lineup was the same as on Benefit.

Stellar Wind  is the open secret code name for certain information collection activities performed by the United States’ National Security Agency and revealed by Thomas M. Tamm to New York Times reporters James Risen and Eric Lichtblau. The operation was approved by President George W. Bush shortly after the September 11 attacks in 2001.

The program’s activities involve data mining of a large database of the communications of American citizens, including e-mail communications, phone conversations, financial transactions, and Internet activity.

There were internal disputes within the Justice Department about the legality of the program, because data is collected for large numbers of people, not just the subjects of Foreign Intelligence Surveillance Act (FISA) warrants. In March 2004, the Justice Department under Attorney General John Ashcroft ruled that the program was illegal. The day after the ruling, Ashcroft became critically ill with acute pancreatitis. President Bush sent White House counsel Alberto Gonzales and Chief of Staff Andrew Card Jr. to Ashcroft’s hospital bed, where Ashcroft lay semiconscious, to request that he sign a document reversing the Justice Department’s ruling. However, Ashcroft was incapable of signing the document. Bush then reauthorized the operation, over formal Justice Department objections. Federal Bureau of Investigation (FBI) director Robert Mueller, Acting Attorney General James Comey, and many prominent members of the Justice Department were prepared to resign over the matter. Valerie Caproni the FBI general counsel, said, “From my perspective, there was a very real likelihood of a collapse of government.” Bush subsequently reversed the authorization.

During the Bush Administration, the Stellar Wind cases were referred to by FBI agents as “pizza cases” because many seemingly suspicious cases turned out to be food takeout orders. Approximately 99 percent of the cases led nowhere, but 1 percent bore fruit. One of the known uses of this data was the creation of suspicious activity reports, or “SARS”, about people suspected of terrorist activities. It was one of these reports that revealed former NY governor Elliot Spitzer‘s use of prostitutes, even though he was not suspected of terrorist activities.

In March 2012 Wired Magazine published “The NSA Is Building the Country’s Biggest Spy Center (Watch What You Say)” talking about a new NSA facility and says “For the first time, a former NSA official has gone on the record to describe the program, codenamed Stellar Wind, in detail.” Naming the official William Binney a former NSA code breaker. Binney goes on to say that the NSA has highly secured rooms that tap into major switches, and satellite communications at AT&T and Verizon both. [4] The article suggests that the otherwise dispatched Stellar Wind is actually an active program.

To those who understand state surveillance as an abstraction, I will try to describe a little about how it has affected me. The United States apparently placed me on a “watch-list” in 2006 after I completed a film about the Iraq war. I have been detained at the border more than 40 times. Once, in 2011, when I was stopped at John F. Kennedy International Airport in New York and asserted my First Amendment right not to answer questions about my work, the border agent replied, “If you don’t answer our questions, we’ll find our answers on your electronics.”‘ As a filmmaker and journalist entrusted to protect the people who share information with me, it is becoming increasingly difficult for me to work in the United States. Although I take every effort to secure my material, I know the N.S.A. has technical abilities that are nearly impossible to defend against if you are targeted.

The 2008 amendments to the Foreign Intelligence Surveillance Act, which oversees the N.S.A. activities, are up for renewal in December. Two members of the Senate Select Committee on Intelligence, Senators Ron Wyden of Oregon and Mark Udall of Colorado, both Democrats, are trying to revise the amendments to insure greater privacy protections. They have been warning about “secret interpretations” of laws and backdoor “loopholes” that allow the government to collect our private communications. Thirteen senators have signed a letter expressing concern about a “loophole” in the law that permits the collection of United States data. The A.C.L.U. and other groups have also challenged the constitutionality of the law, and the Supreme Court will hear arguments in that case on Oct. 29.

Laura Poitras is a documentary filmmaker who has been nominated for an Academy Award and whose work was exhibited in the 2012 Whitney Biennial. She is working on a trilogy of films about post-9/11 America. This Op-Doc is adapted from a work in progress to be released in 2013.

This video is part of a series by independent filmmakers who have received grants from the BRITDOC Foundation and the Sundance Institute.

Who is watching the NSA?

IN March 2002, John M. Poindexter, a former national security adviser to President Ronald Reagan, sat down with Gen. Michael V. Hayden, the director of the National Security Agency. Mr. Poindexter sketched out a new Pentagon program called Total Information Awareness, that proposed to scan the world’s electronic information – including phone calls, e-mails and financial and travel records – looking for transactions associated with terrorist plots. The N.S.A., the government’s chief eavesdropper, routinely collected and analyzed such signals, so Mr. Poindexter thought the agency was an obvious place to test his ideas.

He never had much of a chance. When T.I.A.’s existence became public, it was denounced as the height of post-9/11 excess and ridiculed for its creepy name. Mr. Poindexter’s notorious role in the Iran-contra affair became a central focus of the debate. He resigned from government, and T.I.A. was dismantled in 2003.

But what Mr. Poindexter didn’t know was that the N.S.A. was already pursuing its own version of the program, and on a scale that he had only imagined. A decade later, the legacy of T.I.A. is quietly thriving at the N.S.A. It is more pervasive than most people think, and it operates with little accountability or restraint. [..]

Senator Ron Wyden (D-OR) and Mark Udall (D-CO) asked the NSA a simple question: how many persons inside the United States have been spied upon by the NSA? I. Charles McCullough, the Inspector General of the Office of the Director of National Intelligence, answer was that to answer that question would violate the privacy of citizens. In other words, they probably don’t know.

In July, in response to a request from Sen. Wyden, IG McCullough declassified three statements “one of which indicated that the FISA court agreed with Wyden that the government had “circumvented the spirit of the law.” Even the Wall Street Journal reported that this “represented the first time the government has acknowledged U.S. spy activities violated the Constitution since the passage of” the Amendments Act in 2008.

Whistleblowers like Mr. Binney, Thomas Drake, as well as, journalists like Ms. Poitras and James Risen put their reputations, freedom and lives on the line to warn us about the unregulated, unmonitored surveillance of the NSA. No one is watching the NSA but they are watching us.

For the first time (that we know of) drones will be used for a political convention for “intelligence, surveillance and reconnaissance to government agencies”.  “Wraiths” will also be used, ground-based robots that can be armed with lethal or non-lethal weapons.  The manufacturer of these vehicles has crosshairs and a skeleton as their logo.

A bulletin was issued jointly by the FBI and the Department of Homeland Security on August 21st, warning law enforcement agencies about anarchist extremists and the report uses words and imagery that are usually reserved for terrorist insurgents.  They invited the media to learn about their operations control center at an “undisclosed location” and today the fearmongering and demonization of “anarchist extremists”  is blazing across the airwaves along with news about the drones that will be used.

CNN did a video report that is particularly egregious as it quotes from the report saying that the extremist anarchist protesters might use IEDs, and they explain that IEDs are the things used by terrorist insurgents in Afghanistan.  They generously supply video clips of an explosion in Afghanistan and another one that is a military vehicle being blown up, with the shoulder of a soldier in camo coming into the view of the camera at the end.  While the report explains that not all protesters are expected to be violent, CNN adds some video footage of Occupy Wall Street protesters chanting “this is what democracy looks like” and just in case you didn’t make the connection, they throw in some people in Guy Fawkes masks from some supposed Anonymous videos about the convention.  The words and imagery used by the media and the government are meant to cause conflation of Occupy Wall Street protesters and terrorists, in my opinion, and to preemptively justify the excessive use of force during the upcoming conventions and extreme use of militaristic equipment.

The report also mentions that law enforcement should look out for anarchists who might be doing weapons training or buying explosives and they mention that they have used the internet for research and organization in the past.  In the CNN video though, they say that the feds told them they are not watching any particular anarchists.  No.  And then after all of that fearmongering and set up, they say that no specific threats have been made.

It’s funny that the FBI/DHS waited until six days before the RNC convention to issue this warning, isn’t it?  This report was made for the media, in my opinion.  

The Age of Niallism: Ferguson and the Post-Fact World

By Matthew O’Brien, The Atlantic

Aug 24 2012, 10:32 AM ET

I don’t want to go too far down this Ferguson rabbit hole — we get it, he lied — but I do want to answer his response to my fact-check. Ferguson’s reading of my criticism was as lacking as his fidelity to facts. I tried to make clear that I was cataloging two categories of errors in his piece. There were untruths misleadingly framed as truths and truths misleadingly framed so as to be untruths. Or, as I put it, “a fantasy world of incorrect and tendentious facts.”

Let’s take a quick detour into the meta. Ferguson objects that I don’t identify “a single error” and that I’m just offering my own opinions. The former is not true — his description of Obamacare and its budgetary impact are demonstrably false — but the latter is a legitimate point of debate. Ferguson prefers a very narrow definition of fact-checking; I do not think that is sufficient. Facts twisted out of context can be just as deceptive as outright falsehoods — sometimes even more so, because you can cloak them in claims of truthfulness.

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Ferguson gets some facts wrong. Ferguson gets some facts right, but frames them incompletely. Why the outrage? Because he’s treating facts as low-grade and cheap materials that are meant to be bent, spliced and morphed for the purpose of building a sensational polemic. Even more outrageous is that his bosses didn’t mind enough to force him to make an honest argument, or even profess embarrassment when its dishonesty came to light.

Ezra Klein Deems Joe Stiglitz, Paul Krugman, and Elizabeth Warren (Plus Other Serious People) Not Credible

Yves Smith, Naked Capitalism

Wednesday, August 22, 2012

Ezra Klein demonstrated how far he’s has to descend into the Humpty Dumpty world of words meaning just what he chooses them to mean in order to defend failed Administration policies.

Washington DC’s Baghdad Bob waded into the fray over a an unconvincing apology in the New York Times for Obama’s bank-friendly response to the mortgage crisis. … While it’s now acceptable for the messaging apparatus to describe the policies as inadequate, the party line is lame: there was no support for bold measures and those big bad servicers were an insurmountable obstacle.

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Huh? Sorry, plenty of people vastly more credible than Klein had concrete recommendations at the time that would have been considerably better than Obama-Geithner program of coddling the banks.

For instance, Princeton economist Alan Blinder recommended a Home Owners Loan Corporation style mass refinance. She Who Must Not Be Named came out for it in her campaign. Joe Stiglitz, Paul Krugman, Nouriel Roubini, Mark Zandi, Jeff Merkley, Brad Miller, Ellen Seidman and others backed it. Krugman and Neil Barofsky have also argued the Administration could at a minimum have used $50 billion in unused TARP funds for mortgage mods. Adam Levitin (arguably the top US expert on mortgage securitizations) recently proposed(.pdf) a “bad bank” as a way to implement pooling and standardized restructuring of underwater mortgages. Top mortgage analyst Laurie Goodman has also long advocated principal modification, and she has established that they have much lower redefaults than other types of mortgage modifications.

Or how about using bankruptcy to write down mortgages to the current value of the house, something now done in bankruptcy for every type of collateralized loan except primary residences? Advocates of that approach included the Congressional Oversight Panel under Elizabeth Warren’s chairmanship, and more recently, the IMF. A bill passed in the House but was nixed in the Senate.

How about principal writedowns with shared appreciation mortgages, advocated by Andrew Caplan and Luigi Zingales? Even Greg Mankiw pointed to an approach suggested by John Geanakoplos and Susan Koniak a way to work around those pesky servicers. Dean Baker has pushed for an own to rent program.

This is far from a complete list. There were plenty of credible people who had concrete, specific proposals which would have done better than what the Administration implemented. When the benchmark is HAMP, which managed to make hundreds of thousands of borrowers worse off, or a mortgage settlement that institutionalizes servicer fraud and has already harmed mortgage investors helping pay for the settlement, it’s a low bar to beat.

So if you were honest about this issue, no matter where you draw the line, there were “credible” people who had proposals that were obviously better. And the evidence in part comes in the New York Times article that Klein mentions. It concedes that bankruptcy cramdowns might indeed have been a better idea than the Administration’s limp-wristed response. And don’t tell me Obama couldn’t have gotten this through. He was willing to whip personally to get Bernanke’s contested reappointment approved; he didn’t apply anywhere near that level of effort to this initiative.

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(T)he mortgage/housing issue is charged because, as Barofsky stressed, the Administration deliberately chose to use homeowners to foam the runway for banks.

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That of course means that it is a priority for Obama to obscure the fact that he chose the banks over ordinary citizens on housing, the single biggest source of wealth for most families.

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So to defend this Administration’s sorry record, loyalists like Klein have gone from practicing sophistry to agnotology. In a perverse way, that’s encouraging, because it’s a sign that it’s becoming more difficult for the pundit class to deny the facts on the ground.

GOP Intellectual Decline, Monetary Edition

Paul Krugman, The New York Times

August 24, 2012, 3:42 pm

(T)he GOP platform will reportedly include a call for steps toward a return to the gold standard.

The really strange thing about all this is that this turn toward hard-money mysticism is taking place even as events have demonstrated that the advantages of not being on a gold standard, of having a fiat currency that can be printed freely in emergencies, are even greater than standard analysis had supposed.

Mark Thoma links to an old piece of mine that I think does a pretty good job of laying out that standard case; but we now know that there’s a major additional concern, the ability of the central bank to act as lender of last resort to the government as well as private banks. Consider, as Paul De Grauwe has in one of the most important analyses (pdf) to come out of the crisis, the contrast between Spain and the UK.

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(B)orrowing costs have soared in Spain, while falling in Britain.

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So the GOP has decided that we must reject the evils of fiat money and go for the gold standard at precisely the moment when events have demonstrated that fiat money is a really useful thing and the loss of flexibility that comes from ending fiat currencies can be utterly disastrous. What’s going on?

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In this sense fiat money is like, oh, Social Security. The problem it creates for conservatives is not that it doesn’t work, but that it does – which is a challenge to their philosophy. And so it must die.

What these pieces all have in common is the demonstrated failure of trickle down supply side Chicago School Voodoo Economics.

I found this informative discussion at naked capitalism. It’s in two parts with links that are educational, especially for those of us who have a minimal understanding of economics. The first article by Michael Hoexter of New Economic Perspectives is prefaced by Yves Smith:

The discussion of tribal allegiances in economics in this post helps illustrate why it is so difficult to push back against failed ideas when they are dear to the mainstream. It is also a useful ethnographic guide.

Is an Anti-Austerity Alliance of Left Neo-Classicals and Post-Keynesians Possible? Is it Desirable? (Part 1)

I drafted the “Mixed Economy Manifesto” as one attempt to create a common basis for anti-austerity economists and non-economists to argue against, in the clearest terms possible, the waves of government spending cutbacks that are advocated by misguided elites, by the right-wing and by right-leaning neoclassical economists. The 87 “theses” listed at the end of the Manifesto enumerated empirically and logically sound propositions about the economy as it now exists with its mixture of government and private institutions that can under many circumstances productively interact with each other. (I may attempt or others may attempt to expand the arbitrarily numbered 87 to 95 theses which would then be suitable for nailing on doors.) The Mixed Economy Manifesto also contained many statements that would appeal to Left Neo-classicals or New Keynesian economists, while maintaining a basis in what I perceive to be the more realistic ideas about the economy that have been put forward by post-Keynesians, MMTers, and the institutionalist tradition, including Thorsten Veblen and John Kenneth Galbraith.

As it stands, the world appears to be heading into a policy-induced exacerbation of the ongoing Second Great Depression that may pale in comparison to the policy mistakes of 1937 in the US, when President Roosevelt listened too much to the hard-money ideologues of his day and cut spending only to weaken the ongoing recovery from the Depression of the 1930’s. It would seem to make sense to create an alliance of as many intellectual and political tendencies as possible against a repeat of these mistakes. One major problem is that the public is largely unaware that there is a choice, so has not yet joined the struggle, except in countries like Greece and Spain where austerity is now in full force.

Another major problem in creating such an alliance is that there are significant intellectual and institutional divisions among those economists who endorse counter-cyclical spending by government and/or mobilizing the resources of government to help the unemployed and the marginally employed. These economists disagree with each other about fundamental issues and, if listened to by the public closely and in sequence, can produce either confusing or not particularly decisive advice for anti-austerity activists. This in turn makes it difficult to create a mass political movement that opposes austerity measures before they take full effect or, furthermore, after some future political victory for anti-austerity forces, for policymakers to institute policies based on a consistent new economic thinking. The most consistent critics of austerity and the economic foundations of austerity thinking have been Post-Keynesians, a diverse grouping of schools that claim to be both heirs and critics of Keynes, including the growing Modern Monetary Theory school (MMT). Post-Keynesians are generally excluded from the centers of power within the economics profession, though are not as marginalized as biophysical, steady-state/ecological, and Marxist economists. “New Keynesianism” is a much more mainstream school that integrates certain aspects of Keynes into the dominant neoclassical economics taught in college Econ 101 courses. Often the publicly-identifiable Left of mainstream economics, for instance Paul Krugman and Joe Stiglitz, can be identified as New Keynesian and therefore fundamentally neoclassical.

Post-Keynesians and MMTers often direct their sharpest critiques at New Keynesian or Left Neo-classical economists, though there are also efforts at comity from the side of Post-Keynesians. On the other side, the more orthodox and “establishment” New Keynesians/Left Neoclassicals for the most part do not offer Post-Keynesians the professional respect of acknowledgement and/or serious intellectual critique of Post-Keynesian/MMT ideas. There are signs that this “Chinese wall” is breaking down, as the global Depression drags on, but often in ways that indicate that isolated terms from or fragments of Post-Keynesianism and MMT may be taken and reconfigured to fit the orthodox model and academic “lifestyles” of Left Neo-classical economists. This was the intellectual “move” that Paul Samuelson executed in the late 1940’s, validating those parts of Keynes that would fit with neoclassical orthodoxy, while leaving out the aspects of Keynes’s work that suggested that neoclassical orthodoxy should be fundamentally questioned or overturned.

Is an Anti-Austerity Alliance of Left Neo-classicals and Post-Keynesians Possible? Is it Desirable? (Part 2)

United as they are in their critique of neoclassical economics, it would be a mistake to portray post-Keynesians as united among themselves, a further complication for the emergence of any unified message from anti-austerity economists. Post-Keynesian Thomas Palley has recently likened MMTers proposal that government institute a WPA-style “job guarantee” program to the policies of the Tory Cameron government that unemployment benefit recipients work for free. Palley’s concern is that the MMT job guarantee will undermine public sector unions but MMTers dispute that Cameron’s policy is a job guarantee program. Palley’s objections to the job guarantee and MMT were also the subject of a caustic review by Randy Wray, a prominent MMT economist. Steve Keen, who calls himself as “Monetary Circuit Theorist”, has shown an interest in finding points of commonality with MMTers while maintaining at other times a distance from it. MMT, perhaps because it has a popular following and momentum, seems to be a particular target of criticism and self-differentiation by non-MMT post-Keynesians. Perhaps this criticism is meant to be constructive but at times the disputes are often conducted in relatively heated exchanges in blogs and on Twitter, where ultimately outsiders to these disputes will remain confused and will perhaps throw up their hands.

The question then remains whether these two groups of economists can work together and fight against austerity as a loosely coordinated group, even if they themselves are not even in agreement among themselves. From the perspective of those outside of the economics profession, the prime consumers of the output of economists, a cogent and unified message against austerity would be a great help. Political movements and political actors require a unified message to achieve power. As well, to be ultimately a success if they ever achieve power, they need to have a realistic policy alternative to offer. As it stands, the voices of the Left Neoclassicals are heard much more widely, yet their vision ultimately does not offer political leaders and political activists on the ground a portable vision and argument to reshape overall policy and popular views. Post-Keynesians, in particular MMT, are working on a more realistic vision of how the economy and government work and work together that potentially is comprehensible by a wider group of people. Yet this vision, though now gaining a wider audience, has not yet achieved critical mass in the public discussion. [..]

If some prominent economists from orthodox and heterodox tendencies could agree that it would be possible to come up with a list of three to five anti-austerity principles which do not offend any “side” to this debate, this might be a way forward. These principles could then become “talking points” for economists to campaign in the media and in meetings with the powerful for an anti-austerity solution. Creating an anti-austerity “echo-chamber” would be a step in the right direction. As an independent commentator on economics not currently affiliated with an academic institution, I do not have the status to get the ball rolling on this process.

If economists, like cats, cannot be “herded” into producing a workable statement of anti-austerity principles, then the diffuse strategy of producing articles, blog posts, testimony, and media appearances becomes second best but offers a glimmer of hope that the perversity of austerity will be communicated to the broader public.

This effort, however, should not compromise or derail the long-term epistemological project to build a better social science and a better economics that can help prevent concurrent disasters like the present ones. Temporary political victories can only buy time but ultimately cannot solve the problems of governing and managing mixed economies, the type of economy in which we live and that has sorely challenged conventional wisdom.

“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”.

Follow us on Twitter @StarsHollowGzt

Paul Krugman: Galt, Gold and God

So far, most of the discussion of Paul Ryan, the presumptive Republican nominee for vice president, has focused on his budget proposals. But Mr. Ryan is a man of many ideas, which would ordinarily be a good thing.

In his case, however, most of those ideas appear to come from works of fiction, specifically Ayn Rand’s novel “Atlas Shrugged.”

For those who somehow missed it when growing up, “Atlas Shrugged” is a fantasy in which the world’s productive people – the “job creators,” if you like – withdraw their services from an ungrateful society. The novel’s centerpiece is a 64-page speech by John Galt, the angry elite’s ringleader; even Friedrich Hayek admitted that he never made it through that part. Yet the book is a perennial favorite among adolescent boys. Most boys eventually outgrow it. Some, however, remain devotees for life.

Dean Baker: Land of the fee: The $1.2 trillion health care tax

An inefficient health care system is costing $1.2 trillion, but many economists want to fix the budget by slashing it.

Economists tend not to be very good at economics, which is one of the main reasons that the world is facing such a prolonged downturn. Few economists were able to recognise the enormous imbalances created by housing bubbles in the United States and elsewhere, or to understand that the collapse of these bubbles would lead to a prolonged period of stagnation in the absence of a vigorous response by governments. [..]

You would think that economists would be upset over a $1.2 trillion annual tax due to the inefficiency of our health care system. This is at least an order of magnitude larger than most issues that economists spend their time worrying over. Yet there are few economists who make this obvious point when debates over the budget come up. Instead, they typically chime in with the choir saying that we need to cut the budget, not fix health care.

The cynical among us might point out that fixing the budget mostly means beating up on older people getting Social Security and Medicare benefits. Fixing health care means going after powerful lobbies like the insurers, the drug industry, and doctors. But whatever their motive, the facts are clear. The vast majority of economists in the United States are not especially concerned about a $1.2 trillion annual health care tax; they have much less important matters to take up their time.

(h/t Naked Capitalism)

Spain Deficit Goals at Risk as Cuts Consensus Fades: Euro Credit

By Angeline Benoit, Bloomberg News

Aug 22, 2012 3:23 AM ET

The Socialist president of the northern Basque Country Patxi Lopez today told Cadena Ser radio he is moving local elections initially scheduled for March 2013 forward to Oct. 21 in order for Basques to choose how to deal with the crisis. “There is a lot of uncertainty about the future and our economic model is what counts,” he said.

The Andalusia region said Aug. 1 it will take the state to court on 2012 debt ceilings. It should be allowed to borrow more as its burden is 10.6 percent of its GDP compared with a 13.5 percent regional average, it said.

The 17 semi-autonomous governments won’t keep their economic promises this year, according to a report released this week by the Fedea research institute in Madrid. It forecast overspending for the regions may reach 4 percent of GDP, compared with 3.3 percent last year and a target of 1.5 percent.

The government has ruled out cutting pensions next year and extended a temporary benefit for long-term jobless people to stem growing discontent, Afi’s Herce said. “Rajoy’s strategy is to wait and say little to avoid political damage in the short term.”

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Support for Rajoy’s PP has slipped 8 percentage points since it won 40.6 percent of votes in a landslide in November. Since then, Rajoy has announced more than 100 billion euros of budget cuts, raising income and value-added tax, scrapping a tax break for home owners and cutting civil servants’ wages, unemployment benefits and health care and education spending against his word.

Italy Looks ‘Perilously Close’ To Getting Shut Out Of The Bond Markets

Mamta Badkar, Business Insider

Aug. 21, 2012, 11:30 PM

Italian GDP contracted for the last 12 months and the country is now looking at a longer and deeper recession than was previously expected.

…

Societe Generale’s James Nixon points out three key points about Italian debt and its economic growth:

1. Italy has extremely high debt-to-GDP and to bring this in control, the government is pushing austerity. This austerity along with a credit crunch are hurting economic growth.  Nixon projects Italian GDP to decline 2.3 percent in 2012, and 1.4 percent in 2013, and expects it to be flat in 2014. The IMF puts Italy’s long-term growth rate at 0.5 percent per annum.
2. Rising unemployment is impacting consumer confidence and has caused a drop in private consumption.
3. Finally, to achieve fiscal consolidation Italy is raising taxes on consumption and property, both sectors that are being hit hard by unemployment and tight conditions in the banking sector. “Italy also faces a significant increase in its service costs which, if not addressed, threatens to wipe out all of the consolidation planned for next year.”

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.

August 24 is the 236th day of the year (237th in leap years) in the Gregorian calendar. There are 129 days remaining until the end of the year.

On this day in 79 A.D., Mount Vesuvius erupted burying the cities of Pompeii and Herculaneum in nearly thirty feet of ash and pumice. The toxic gases killed at least 2200 people who remained in Pompeii after the evacuation.

After centuries of dormancy, Mount Vesuvius erupts in southern Italy, devastating the prosperous Roman cities of Pompeii and Herculaneum and killing thousands. The cities, buried under a thick layer of volcanic material and mud, were never rebuilt and largely forgotten in the course of history. In the 18th century, Pompeii and Herculaneum were rediscovered and excavated, providing an unprecedented archaeological record of the everyday life of an ancient civilization, startlingly preserved in sudden death.

At noon on August 24, 79 A.D., this pleasure and prosperity came to an end when the peak of Mount Vesuvius exploded, propelling a 10-mile mushroom cloud of ash and pumice into the stratosphere. For the next 12 hours, volcanic ash and a hail of pumice stones up to 3 inches in diameter showered Pompeii, forcing the city’s occupants to flee in terror. Some 2,000 people stayed in Pompeii, holed up in cellars or stone structures, hoping to wait out the eruption.

A westerly wind protected Herculaneum from the initial stage of the eruption, but then a giant cloud of hot ash and gas surged down the western flank of Vesuvius, engulfing the city and burning or asphyxiating all who remained. This lethal cloud was followed by a flood of volcanic mud and rock, burying the city.

The people who remained in Pompeii were killed on the morning of August 25 when a cloud of toxic gas poured into the city, suffocating all that remained. A flow of rock and ash followed, collapsing roofs and walls and burying the dead.

Plaster Citizens of Pompeii

Those that did not flee the city of Pompeii in August of 79 AD were doomed. Buried for 1700 years under 30 feet of mud and ash and reduced by the centuries to skeletons, they remained entombed until excavations in the early 1800s.

As excavators continued to uncovered human remains, they noticed that the skeletons were surrounded by voids in the compacted ash. By carefully pouring plaster of Paris into the spaces, the final poses, clothing, and faces of the last residents of Pompeii came to life.

n the only known eye witness account to the eruption, Pliny the Younger reported on his uncle’s ill-fated foray into the thick of the ash from Misenum, on the north end of the bay:

“. . .the buildings were now shaking with violent shocks, and seemed to be swaying to and fro as if they were torn from their foundations. Outside, on the other hand, there was the danger of failing pumice stones, even though these were light and porous; however, after comparing the risks they chose the latter. In my uncle’s case one reason outweighed the other, but for the others it was a choice of fears. As a protection against falling objects they put pillows on their heads tied down with cloths. ”

And then:

“You could hear the shrieks of women, the wailing of infants, and the shouting of men; some were calling their parents, others their children or their wives, trying to recognize them by their voices. People bewailed their own fate or that of their relatives, and there were some who prayed for death in their terror of dying. Many besought the aid of the gods, but still more imagined there were no gods left, and that the universe was plunged into eternal darkness for evermore.”