03/07/2014 archive

Contractionary Policy Is Contractionary.

Osborne faces £20bn black hole in UK public finances, says report

Nicholas Watt, The Guardian

Friday 7 March 2014 04.26 EST

George Osborne is facing a £20bn black hole in the public finances, which means austerity may have to continue until 2020, according to research by the Financial Times.

In a blow to the chancellor, who hopes to run a budget surplus in the next parliament, the research suggests austerity may have to last a year longer than expected because the government will not be able to rely on economic recovery to eliminate part of the deficit.

Osborne is already committed to imposing £25bn in spending reductions between 2016-17 and 2017-18, which would have to include £12bn in welfare cuts.

The FT analysis of models by the Office for Budget Responsibility suggests Osborne will have to go even further. The chancellor, who will deliver the penultimate budget before the general election on 19 March, has said he will rely on spending cuts rather than tax increases to eliminate the remainder of the budget deficit. The FT’s research suggests that even greater cuts will have to be made to welfare, local government and police because other key areas of spending, such as the NHS and schools, are protected.

But don’t worry.  I’m sure those Confidence Fairies will be along any minute now to fart themselves some Unicorns and Rainbows.

“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: The Hammock Fallacy

Hypocrisy is the tribute vice pays to virtue. So when you see something like the current scramble by Republicans to declare their deep concern for America’s poor, it’s a good sign, indicating a positive change in social norms. Goodbye, sneering at the 47 percent; hello, fake compassion.

And the big new poverty report from the House Budget Committee, led by Representative Paul Ryan, offers additional reasons for optimism. Mr. Ryan used to rely on “scholarship” from places like the Heritage Foundation. Remember when Heritage declared that the Ryan budget would reduce unemployment to a ludicrous 2.8 percent, then tried to cover its tracks? This time, however, Mr. Ryan is citing a lot of actual social science research.

Unfortunately, the research he cites doesn’t actually support his assertions. Even more important, his whole premise about why poverty persists is demonstrably wrong. [..]

Which brings us back to the hypocrisy issue. It is, in a way, nice to see the likes of Mr. Ryan at least talking about the need to help the poor. But somehow their notion of aiding the poor involves slashing benefits while cutting taxes on the rich. Funny how that works.

Mattea Kramer: he Pentagon’s Phony Budget War

Or How the U.S. Military Avoided Budget Cuts, Lied About Doing So, Then Asked for Billions More

Washington is pushing the panic button, claiming austerity is hollowing out our armed forces and our national security is at risk. That was the message Secretary of Defense Chuck Hagel delivered last week when he announced that the Army would shrink to levels not seen since before World War II. Headlines about this crisis followed in papers like the New York Times and members of Congress issued statements swearing that they would never allow our security to be held hostage to the budget-cutting process.

Yet a careful look at budget figures for the U.S. military — a bureaucratic juggernaut accounting for 57% of the federal discretionary budget and nearly 40% of all military spending on this planet — shows that such claims have been largely fictional. Despite cries of doom since the across-the-board cuts known as sequestration surfaced in Washington in 2011, the Pentagon has seen few actual reductions, and there is no indication that will change any time soon.

This piece of potentially explosive news has, however, gone missing in action — and the “news” that replaced it could prove to be one of the great bait-and-switch stories of our time.

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.

March 7 is the 66th day of the year (67th in leap years) in the Gregorian calendar. There are 299 days remaining until the end of the year.

On this day in 1965, a group of 600 civil rights marchers are forcefully broken up in Selma, Alabama. This day would be remembered in the Civil Rights Movement as “Bloody Sunday”

The Selma to Montgomery marches were three marches in 1965 that marked the political and emotional peak of the American civil rights movement. They grew out of the voting rights movement in Selma, Alabama, launched by local African-Americans who formed the Dallas County Voters League (DCVL). In 1963, the DCVL and organizers from the Student Nonviolent Coordinating Committee (SNCC) began voter-registration work. When white resistance to Black voter registration proved intractable, the DCVL requested the assistance of Martin Luther King, Jr. and the Southern Christian Leadership Conference, who brought many prominent civil rights and civic leaders to support voting rights.

The first march took place on March 7, 1965 – “Bloody Sunday” – when 600 civil rights marchers were attacked by state and local police with billy clubs and tear gas. The second march took place on March 9. Only the third march, which began on March 21 and lasted five days, made it to Montgomery, 51 miles away.

The marchers averaged 10 miles a day along U.S. Route 80, known in Alabama as the “Jefferson Davis Highway”. Protected by 2,000 soldiers of the U.S. Army, 1,900 members of the Alabama National Guard under Federal command, and many FBI agents and Federal Marshals, they arrived in Montgomery on March 24, and at the Alabama Capitol building on March 25.

The route is memorialized as the Selma To Montgomery Voting Rights Trail, a U.S. National Historic Trail.

Selma essentially became the focus the right to vote marches because it was the seat of Dallas County, AL that although it has a black population of 57% with 15,000 blacks elegible to vote, there were only 130 registered. Efforts to register voters were blocked by state and local officials, the White Citizens’ Council, and the Ku Klux Klan, using a literacy test, economic pressure, and violence.

On July 2, 1964, President Lyndon B. Johnson signed the Civil Rights Act of 1964 into law, which declared segregation illegal, yet Jim Crow remained in effect. When attempts to integrate Selma’s dining and entertainment venues were resumed, blacks who tried to attend the movie theater and eat at a hamburger stand were beaten and arrested.

On July 6, John Lewis led 50 blacks to the courthouse on registration day, but Sheriff Clark arrested them rather than allow them to apply to vote. On July 9, Judge James Hare issued an injunction forbidding any gathering of three or more people under the sponsorship of civil rights organizations or leaders. This injunction made it illegal to even talk to more than two people at a time about civil rights or voter registration in Selma, suppressing public civil rights activity there for the next six months.

Planning the First March

With civil rights activity blocked by Judge Hare’s injunction, the DCVL requested the assistance of King and the Southern Christian Leadership Conference (SCLC). Three of SCLC’s main organizers – Director of Direct Action and Nonviolent Education James Bevel, Diane Nash, and [http://en.wikipedia.org/wiki/James_Orange James Orang, who had been working on Bevel’s Alabama Voting Rights Project since late 1963, a project which King and the executive board of SCLC had not joined. When SCLC officially accepted Amelia Boynton’s invitation to bring their organization to Selma, Bevel, Nash, Orange and others in SCLC began working in Selma in December 1964. They also worked in the surrounding counties along with the SNCC staff who had been active there since early 1963.

The Selma Voting Rights Movement officially started on January 2, 1965, when King addressed a mass meeting in Brown Chapel in defiance of the anti-meeting injunction.

Over the following weeks, SCLC and SNCC activists expanded voter registration drives and protests in Selma and the adjacent Black Belt counties. In addition to Selma, marches and other protests in support of voting rights were held in Perry, Wilcox, Marengo, Greene, and Hale counties.

On February 18, 1965, an Alabama State Trooper, corporal James Bonard Fowler, shot Jimmie Lee Jackson as he tried to protect his mother and grandfather in a café to which they had fled while being attacked by troopers during a nighttime civil rights demonstration in Marion, the county seat of Perry County. Jackson died eight days later, of an infection resulting from the gunshot wound, at Selma’s Good Samaritan Hospital.

In response, James Bevel called for a march from Selma to Montgomery.

Goals of the March

Bevel’s initial plan was to march to Montgomery to ask Governor George Wallace if he had anything to do with ordering the lights out and the state troopers to shoot during the march in which Jackson was killed. Bevel called the march in order to focus the anger and pain of the people of Selma, some of whom wanted to address Jackson’s death with violence, towards a nonviolent goal. The marchers also hoped to bring attention to the violations of their rights by marching to Montgomery. Dr. King agreed with Bevel’s plan, and asked for a march from Selma to Montgomery to ask Governor Wallace to protect black registrants.

Wallace denounced the march as a threat to public safety and declared he would take all measures necessary to prevent this from happening.

The First March: “Bloody Sunday”

On March 7, 1965, 525 to 600 civil rights marchers headed east out of Selma on U.S. Highway 80. The march was led by John Lewis of SNCC and the Reverend Hosea Williams of SCLC, followed by Bob Mants of SNCC and Albert Turner of SCLC. The protest went smoothly until the marchers crossed the Edmund Pettus Bridge and found a wall of state troopers waiting for them on the other side. Their commanding officer told the demonstrators to disband at once and go home. Williams tried to speak to the officer, but the man curtly informed him there was nothing to discuss. Seconds later, the troopers began shoving the demonstrators. Many were knocked to the ground and beaten with nightsticks. Another detachment of troopers fired tear gas. Mounted troopers charged the crowd on horseback.

Brutal televised images of the attack, which presented people with horrifying images of marchers left bloodied and severely injured, roused support for the U.S. civil rights movement. Amelia Boynton was beaten and gassed nearly to death; her photo appeared on the front page of newspapers and news magazines around the world Seventeen marchers were hospitalized, leading to the naming of the day “Bloody Sunday”.

We’ve all heard about the problems with BPA and how it leaches an Estrogen-like chemical.  Well it turns out almost all plastics do that though many are unstudied.

Transcript

The Scary New Evidence on BPA-Free Plastics

And the Big Tobacco-style campaign to bury it.

By Mariah Blake, Mother Jones

March/April 2014 Issue

“(A)lmost all” commercially available plastics that were tested leached synthetic estrogens-even when they weren’t exposed to conditions known to unlock potentially harmful chemicals, such as the heat of a microwave, the steam of a dishwasher, or the sun’s ultraviolet rays. According to (George) Bittner’s (professor of neurobiology at the University of Texas-Austin) research, some BPA-free products actually released synthetic estrogens that were more potent than BPA.

Estrogen plays a key role in everything from bone growth to ovulation to heart function. Too much or too little, particularly in utero or during early childhood, can alter brain and organ development, leading to disease later in life. Elevated estrogen levels generally increase a woman’s risk of breast cancer.

Estrogenic chemicals found in many common products have been linked to a litany of problems in humans and animals. According to one study, the pesticide atrazine can turn male frogs female. DES, which was once prescribed to prevent miscarriages, caused obesity, rare vaginal tumors, infertility, and testicular growths among those exposed in utero. Scientists have tied BPA to ailments including asthma, cancer, infertility, low sperm count, genital deformity, heart disease, liver problems, and ADHD. “Pick a disease, literally pick a disease,” says Frederick vom Saal, a biology professor at the University of Missouri-Columbia who studies BPA.

BPA exploded into the headlines in 2008, when stories about “toxic baby bottles” and “poison” packaging became ubiquitous. Good Morning America issued a “consumer alert.” The New York Times urged Congress to ban BPA in baby products. Sen. Dianne Feinstein (D-Calif.) warned in the Huffington Post that “millions of infants are exposed to dangerous chemicals hiding in plain view.” Concerned parents purged their pantries of plastic containers, and retailers such as Walmart and Babies R Us started pulling bottles and sippy cups from shelves. Bills banning BPA in infant care items began to crop up in states around the country.

Today many plastic products, from sippy cups and blenders to Tupperware containers, are marketed as BPA-free. But Bittner’s findings-some of which have been confirmed by other scientists-suggest that many of these alternatives share the qualities that make BPA so potentially harmful.

March 06, 2014

Russia Threatens to Drop The Dollar and Crash The U.S. Economy if Sanctions Are Imposed – Obama Signs Sanctions Anyway

On Tuesday Reuters reported that a Kremlin aid Sergei Glazyev had announced that if the U.S. were to impose sanctions on Russia Moscow may drop the dollar as a reserve currency and refuse to pay off any loans to U.S. banks saying that Moscow could recommend that all holders of U.S. treasuries sell them if Washington freezes the U.S. accounts of Russian businesses and individuals.

“We would find a way not just to reduce our dependency on the United States to zero but to emerge from those sanctions with great benefits for ourselves,” said Glazyev.

“An attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of the domination of the United States in the global financial system”

That statement is startling by itself, but the true gravity of this situation is only evident when you consider it in context. China has taken Russia’s side in the Ukraine conflict (they are after all allies) and China holds the lion’s share of U.S. treasuries. If Russia puts out the call to drop the dollar China would have a choice: either hold on to those treasuries while the dollar slides (losing their shirt in the process) or join Russia and dump their holdings as well. It should be pretty obvious which way China would go.

The effects of a coordinated bond sell off by China and Russia would be earth shattering. This would be the financial equivalent of a nuclear bomb being dropped. It is no exaggeration to say that such a move would mark the end of an era.

You would think that this would prompt some serious reflection and that diplomats would be scrambling to resolve this peacefully, but instead today Obama signed a sanction order anyway and revoked the visas of a number of Russian officials.