01/11/2013 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”.

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Paul Krugman; Coins Against Crazies

It’s crucial to understand three things about this situation. First, raising the debt ceiling wouldn’t grant the president any new powers; every dollar he spent would still have to be approved by Congress. Second, if the debt ceiling isn’t raised, the president will be forced to break the law, one way or another; either he borrows funds in defiance of Congress, or he fails to spend money Congress has told him to spend.

Finally, just consider the vileness of that G.O.P. threat. If we were to hit the debt ceiling, the U.S. government would end up defaulting on many of its obligations. This would have disastrous effects on financial markets, the economy, and our standing in the world. Yet Republicans are threatening to trigger this disaster unless they get spending cuts that they weren’t able to enact through normal, Constitutional means. [..]

Or, best of all, there might be enough sane Republicans that the party will blink and stop making destructive threats.

Unless this last possibility materializes, however, it’s the president’s duty to do whatever it takes, no matter how offbeat or silly it may sound, to defuse this hostage situation. Mint that coin!

New York Times Editorial: America’s Health Disadvantage

It is no secret that the United States spends a lot more on health care than any other country yet ranks far behind other advanced nations in keeping its citizens healthy. This has been well documented in studies of older people and of newborn infants. It is now shockingly clear that poor health is a much broader and deeper problem than past studies have suggested.

An authoritative report issued by the Institute of Medicine this week found that, on average, Americans experience higher rates of disease and injury and die sooner than people in other high-income countries. That is true at all ages between birth and 75 and for even well-off Americans who mistakenly think that top-tier medical care ensures that they will remain in good health. The study found that even upper-income Americans with health insurance and college educations appear to be sicker than their peers in other rich nations.

    You’re immature, Fielding.

    How am I immature?

    Well, emotionally, sexually, and intellectually.

    Yeah, but what other ways?

How dumb do you have to be to write for Forbes?

Experts Agree: U.S. May Become A ‘Simpsons’ Episode And Need Platinum Coins Or IOUs

Abram Brown, Forbes Staff

1/10/2013 @ 11:32AM

If the Treasury did mint that $1 trillion platinum coin, depositing it at the Federal Reserve would allow it to keep paying the bills, says Donald Marron, director of the Urban-Brookings Tax Policy Center. The Fed would book $1 trillion, just as it would book 25 cents if the Treasury sent a quarter instead.

Marron quickly concedes the mind-boggling nature of a $1 trillion coin, which would weigh more than 43 million pounds and occupy roughly 32,000 cubic foot (assuming about $1,600 a troy ounce of platinum): “Minting a trillion-dollar coin sounds like the plot of a Simpsons episode or an Austin Powers sequel. It lacks dignity.” For perspective, the coin would weigh as much as 100 Statues of Liberty; America’s copper-cast leading lady weighs in at 450,000 pounds.

Too dumb, it seems, to have passed even a High School “Introduction to Economics” class.

Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country.

…

(N)early all contemporary money systems are based on fiat money. Fiat money, like any check or note of debt, is without intrinsic use value as a physical commodity. It derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for “all debts, public and private”. Such laws in practice cause fiat money to acquire the value of any of the goods and services that it may be traded for within the nation that issues it.

The money supply of a country consists of currency (banknotes and coins) and bank money (the balance held in checking accounts and savings accounts). Bank money, which consists only of records (mostly computerized in modern banking), forms by far the largest part of the money supply in developed nations.

…

Fiat money or fiat currency is money whose value is not derived from any intrinsic value or guarantee that it can be converted into a valuable commodity (such as gold). Instead, it has value only by government order (fiat). Usually, the government declares the fiat currency (typically notes and coins from a central bank, such as the Federal Reserve System in the U.S.) to be legal tender, making it unlawful to not accept the fiat currency as a means of repayment for all debts, public and private.

…

One of the last countries to break away from the gold standard was the United States in 1971.

No country anywhere in the world today has an enforceable gold standard or silver standard currency system.

…

Commercial bank money is created through fractional-reserve banking, the banking practice where banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all these deposits upon demand. Commercial bank money differs from commodity and fiat money in two ways, firstly it is non-physical, as its existence is only reflected in the account ledgers of banks and other financial institutions, and secondly, there is some element of risk that the claim will not be fulfilled if the financial institution becomes insolvent. The process of fractional-reserve banking has a cumulative effect of money creation by commercial banks, as it expands money supply (cash and demand deposits) beyond what it would otherwise be. Because of the prevalence of fractional reserve banking, the broad money supply of most countries is a multiple larger than the amount of base money created by the country’s central bank. That multiple (called the money multiplier) is determined by the reserve requirement or other financial ratio requirements imposed by financial regulators.

Or, indeed, to have learned how to use Wikipedia.  This level of dumb applies to “economists” who are directors of the Urban-Brookings Tax Policy Center too.

Investopedia–

Metals also have a market value; silver and gold, for example are traded daily. Other metals also have value and a new breed of investors is emerging: the coin hoarder.

All American coins are made from a variety of base metals. Prior to 1965, dimes and quarters were made primarily of silver, until the soaring cost of silver forced the United States Mint to change the composition of the coins to a cheaper alloy. Prior to 1982, pennies were composed of 95% copper, until lower-cost zinc replaced a substantial amount of it. Nickels are still composed of 25% nickel and 75% copper. As the underlying values of the metals rise, the coins become theoretically more valuable. At today’s prices for copper and nickel, a five-cent piece is worth almost seven cents. There’s a catch, however. Since 2006, it has been illegal to melt down pennies and nickels.

NO circulating United States coin, save for those with minimal face value intended for trade as bullion, EXCEPT for pre-1982 pennies and all nickles has a commodity value as metal greater than its face value as currency.  This difference between the value of money and the cost to produce and distribute it is called Seigniorage.

So, unless you want to be laughed at as some ignorant wacko destined to die under a pile of used coffee grounds and old newspapers, please don’t let this fallacy enter your conversation even though you are an “economist” who is a director of the Urban-Brookings Tax Policy Center or a columnist for a major “financial” publication.

It makes people wonder if you got your job through nepotism and inbreeding.

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 11 is the 11th day of the year in the Gregorian calendar. There are 354 days remaining until the end of the year (355 in leap years).

On January 11, 1908, U.S. President Theodore Roosevelt declares the massive Grand Canyon in northwestern Arizona a national monument.

Though Native Americans lived in the area as early as the 13th century, the first European sighting of the canyon wasn’t until 1540, by members of an expedition headed by the Spanish explorer Francisco Vasquez de Coronado. Because of its remote and inaccessible location, several centuries passed before North American settlers really explored the canyon. In 1869, geologist John Wesley Powell led a group of 10 men in the first difficult journey down the rapids of the Colorado River and along the length of the 277-mile gorge in four rowboats.

By the end of the 19th century, the Grand Canyon was attracting thousands of tourists each year. One famous visitor was President Theodore Roosevelt, a New Yorker with a particular affection for the American West. After becoming president in 1901 after the assassination of President William McKinley, Roosevelt made environmental conservation a major part of his presidency. After establishing the National Wildlife Refuge to protect the country’s animals, fish and birds, Roosevelt turned his attention to federal regulation of public lands. Though a region could be given national park status–indicating that all private development on that land was illegal–only by an act of Congress, Roosevelt cut down on red tape by beginning a new presidential practice of granting a similar “national monument” designation to some of the West’s greatest treasures.

Grand Canyon National Park became a national park in 1919. So famous is this landmark to modern Americans that it seems surprising that it took more than thirty years for it to become a national park. President Theodore Roosevelt visited the rim in 1903 and exclaimed: “The Grand Canyon fills me with awe. It is beyond comparison–beyond description; absolutely unparalleled throughout the wide world …. Let this great wonder of nature remain as it now is. Do nothing to mar its grandeur, sublimity and loveliness. You cannot improve on it. But what you can do is to keep it for your children, your children’s children, and all who come after you, as the one great sight which every American should see.”

Despite Roosevelt’s enthusiasm and his strong interest in preserving land for public use, the Grand Canyon was not immediately designated as a national park. The first bill to create Grand Canyon National Park had been introduced in 1882 and again in 1883 and 1886 by Senator Benjamin Harrison. As President, Harrison established the Grand Canyon Forest Reserve in 1893. Theodore Roosevelt created the Grand Canyon Game Preserve by proclamation in 1906 and Grand Canyon National Monument in 1908. Senate bills to establish a national park were introduced and defeated in 1910 and 1911; the Grand Canyon National Park Act was finally signed by President Woodrow Wilson in 1919. The National Park Service, which had been established in 1916, assumed administration of the park.

The creation of the park was an early success of the environmental conservation movement; its National Park status may have helped thwart proposals to dam the Colorado River within its boundaries. (Lack of this fame may have enabled Glen Canyon Dam to be built upriver, flooding Glen Canyon and creating Lake Powell.) In 1975, the former Marble Canyon National Monument, which followed the Colorado River northeast from the Grand Canyon to Lee’s Ferry, was made part of Grand Canyon National Park. In 1979, UNESCO declared it as a World Heritage Site.

The Grand Canyon itself, including its extensive system of tributary canyons, is valued for the combination of large size, depth, and the exposed layering of colorful rocks dating back to Precambrian times. It was created through the incision of the Colorado River and its tributaries after the Colorado Plateau was uplifted and the Colorado River system developed along its present path.

President Barack Obama signed the 2012 Presidential Protection Act which restored lifetime Secret Service Protection to former presidents and their spouses.

The measure Obama signed Thursday applies to presidents elected after Jan. 1, 1997, specifically Obama and former President George W. Bush. It reverses a 1994 law that ended Secret Service protection 10 years after a president leaves office. Under that law, the Homeland Security secretary could extend such protection on a temporary basis.

However, Secret Service protection for the vice president, his/her spouse and dependent children under age 16 remains unchanged.

(8) Former Vice Presidents, their spouses, and their children who are under 16 years of age, for a period of not more than six months after the date the former Vice President leaves office. The Secretary of Homeland Security shall have the authority to direct the Secret Service to provide temporary protection for any of these individuals at any time thereafter if the Secretary of Homeland Security or designee determines that information or conditions warrant such protection.

I’m fairly certain that former Vice Pres. Dick Cheney is secure in his man sized safe under the sculpture near the entrance to the CIA in Langley, VA.

The unintended consequence of the Republican threats, bluster and temper tantrums over President Obama’s cabinet nominees is helping Sen. Jeff Merkley make the case to pass filibuster reform among Senate Democrats.

Cabinet pushback and the case for filibuster reform

by Steve Benen, Maddow Blog

At a certain level, Senate Republicans huffing and puffing about President Obama’s recent nominations seems irrelevant, since the GOP has a 45-seat minority. Unless Republicans intend to start filibustering qualified nominees — a step without precedent in American history — it’s pretty likely the president will be able to pick the members of his own team.

And yet, the aggressive posturing continues. Republicans killed Susan Rice’s nomination before it even happened, based on nothing but misplaced spite. They started trying to crush Jack Lew’s nomination yesterday and Chuck Hagel’s nomination last week. And don’t even get me started on Sen. Lindsey Graham’s (R-S.C.) tantrum on John Brennan’s CIA nomination.

There is, however, an unintended consequence to all of this chest-thumping: Republicans are making an excellent case for filibuster reform, just as Senate Democrats have to decide on how best to proceed.

Senate Repubs’ talk about opposing cabinet nominees is helping make the case for Merkley-Udall-Harkin filibuster reform among Senate Dems

— Steven S. Smith (@ProfStevenSmith) January 9, 2013

h/t  Jonathan Bernstein at The Washington Post‘s Post Partisan Blog

How To Destroy the Filibuster

by David Weigel, Slate

Republicans say they’ll block Chuck Hagel and Jack Lew. Democrats are using that threat to change the filibuster.

On Wednesday morning, most business reporters confirmed Barack Obama’s next choice to lead the Treasury Department: White House Chief of Staff Jack Lew. Within hours, the same reporters got a statement from Alabama Sen. Jeff Sessions, ranking member of the Budget Committee and a man who’ll have some say over whether Lew gets the job. [..]

He would oppose Barack Obama’s nominee because the nominee had a dangerous amount in common with Barack Obama.

Sessions’ outrage was manna to an unexpected group of people: Democrats. For months, a group of freshman Democratic senators have been trying to nail down 51 votes to reform the filibuster. On Jan. 22, when the Senate votes on this congressional session’s rulebook, they’ll need to keep that group together. Every time a Republican threatens an Obama nominee, their job gets easier. [..]

“If they want more debate on Chuck Hagel at Defense or Jack Lew at Treasury, then let them talk through the weekend,” (Sen. Jeff) Merkley said. “If this former, conservative colleague is so outrageous … they can expend the energy and really filibuster him. Hopefully, then, we’d be able to at least have transparency.”

Keep stomping your feet and shouting your outrage with the our most sincere thanks for making the case to fix filibuster.

New York Times economics columnist, Prof. Paul Krugman posted a graph from Center on Budget and Policy Priorities in a post to his blog indicating the deficit problem has mostly been solved:

The Center on Budget and Policy Priorities has a graph:

Click on image to enlarge

The vertical axis measures the projected ratio of federal debt to GDP. The blue line at the top represents the projected path of that ratio as of early 2011 – that is, before recent agreements on spending cuts and tax increases. This projection showed a rising path for debt as far as the eye could see.

And just about all budget discussion in Washington and the news media is laid out as if that were still the case. But a lot has happened since then. The orange line shows the effects of those spending cuts and tax hikes: As long as the economy recovers, which is an assumption built into all these projections, the debt ratio will more or less stabilize soon.

Prof. Krugman noted that the CBPP advocates for another $1.4 trillion in revenue or spending cuts over the next decade. While there are still problems the debt/deficit is not as bad as is being presented by politicians and the traditional media. So while we everyone was loosing sleep about falling off cliffs, the cliff was a bad dream. Now the government and the media need to wake up and start talking about jobs.

Now the thing that’s always bothered me about this film is how does Dr. Taylor deal with the fact that removing her from her own time line with no warning or explanation whatever, the kind of granny-killing paradox that we’re told so often will totally destroy the universe as we know it by making a mockery of causality or some such HAS ABSOLUTELY NO EFFECT AT ALL!

I mean, she doesn’t have a cat or something?

But I like to deliver good news on occasion and we seem to have some from the Great White North.

Stranded killer whales break free from Hudson Bay ice

Suzanne Goldenberg, US environment correspondent, The Guardian

Thursday 10 January 2013 12.17 EST

A dozen killer whales, trapped and facing near-certain death in the frozen expanse of Canada’s Hudson Bay, broke free on Thursday morning, to the vast relief of locals and many thousands monitoring their plight online.

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“They are free, they are gone,” Johnny Williams, the town manager, said in a telephone interview. “Last night, the winds shifted from the north. The ice cracked and with the new moon, the ice went. We have open waters on the coastline of Hudson Bay.”

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Had the weather not intervened, it is likely the whales would have suffocated beneath the sea ice, or endured slow starvation until the break-up of the ice next May.

So, good news right?

Stranding of killer whales in Arctic ice is relatively unheard of. Williams, who is 69, said in his lifetime he had only ever seen two or three carcasses of orcas before this week.

But marine biologists say killer whales are moving into the Arctic in greater numbers over the last decade as the sea ice retreats due to climate change.

Orcas face no natural predators in the Arctic, putting them at the top of the food chain.

The whales spend the summers in the Arctic, feasting on seals and narwhal and beluga whales. By the time the ice freezes, in November or December, they are miles away. A killer whale once tagged near Baffin Island had made it as far as the Azores by winter.

This year, however, the freeze came later, after the new year, and the whales were trapped.

Hmm…  And then there’s this-

Ice breakers, as demanded by the mayor of Inukjuak, were too far away from the remote region.

What could be more pristine and clean than some good old Arctic crude?

In the event, however, nature took its course, freeing the whales before the list of bad options had to be explored.

“I am just very glad,” said Megan Epoo, whose elderly uncle was the hunter who originally spotted the stranded whales. “The men here had announced they were going to try and make the breathing hole bigger, and remove the ice from the side of the hole, and that would have been very dangerous. So we were all very worried that something bad would happen,” she said.

“But now nobody has to do anything because the whales are free.”

Yay us, I guess.

Here’s the video the authorities in Inukjuak posted Wednesday to attract some government attention to the whale’s plight.