Apr 29 2014

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”.

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Dean Baker: What Problem Is Privatizing Fannie and Freddie Meant to Solve?

President Obama’s chief economist, Jason Furman, weighed in behind efforts to privatize Fannie Mae and Freddie Mac last week. The main plan on the table is a bill forward by Senators Tim Johnson and Mike Crapo, the chair and ranking member, respectively, on the Senate Banking Committee.

While Furman’s column (which was co-authored with James Stock, another member of the president’s Council of Economic Advisers) indicated support for the principles behind the Johnson-Crapo bill, it is not clear what problem they are hoping to solve.

At the moment, it seems Fannie Mae and Freddie Mac are doing their job just fine. They are issuing mortgage-backed securities (MBS) that include more than 60 percent of new mortgages. Interest rates on mortgages are low and both companies are making substantial profits that are refunded to the government. Why is there any need to overhaul this system?

Yochai Benkler: The US supreme court needs to keep up with our cellphones – and the NSA

Tuesday’s oral arguments on search and seizure make it clear: the era of incremental justice ends now, because the age of metadata is already getting out of hand

Tuesday’s US supreme court arguments involved a seemingly basic legal question about the future of the Fourth Amendment: do police officers need a warrant to search the cellphone of a person they arrest? But the two privacy cases pit against each other two very different conceptions of what it means to be a supreme court in the first place – and what it means to do constitutional law in the 21st century.

“With computers, it’s a new world,” several justices reportedly said in the chamber. Are they ready to be the kinds of justices who make sense of it?

Cellphones expose so much of our most personal data that the decision should be a 9-0 no-brainer. The basic problem that makes it a harder call is that lawyers and judges are by training and habit incrementalists, while information and communications technology moves too fast for incrementalism to keep up.

Philip Pilkington: Our fragile economy of stock bubbles and luxury goods

Income inequality is creating a new normal of high-end consumption and inflated stock prices driving anemic growth

Imagine a world in which those who work – or try to work- are given mere scraps. Imagine an economy that is driven purely by speculation by the wealthy, the gains of which are then spent in high-end stores, the source of employment for those lucky enough to have a job. Imagine economic institutions that puzzle over the slow growth experienced in this economy, uncertain as to the cause.

Imagine no more, because this is the world we live in. Thankfully, however, two economists have finally pieced together the puzzle from disparate fragments of data to explain this malaise.

In a recent study (PDF), Steven Fazzari and Barry Cynamon start with what seems to be a paradox: Keynesian economic theory, together with common sense, tells us that higher-income groups should spend less in relation to their income than lower-income groups. However, since 1980, inequality in the United States has risen enormously, yet household spending has increased to historic highs.

According to the authors, the reason this occurred is that the debt-to-income ratio for the bottom 95 percent of the population rose enormously.

Robert L. Borosage: The Big Fix: How Congress Rigs the Rules

This week, the House Ways and Means Committee is poised to demonstrate exactly how the rules get rigged. Beginning on Tuesday, the committee will mark up a series of bills on corporate tax breaks — known as “extenders” because they have been extended regularly every year or two for over a decade. Only now the Committee plans to make many of them permanent, at the cost of an estimated $300 billion over 10 years. And it does not plan to pay for them by closing other corporate loopholes or raising rates. The giveaway — almost all of which goes to corporations — will simply add to the deficit. And no doubt those who vote for them will later demand deeper cuts in programs for the vulnerable in order to bring “spending” under control.

The measures range from big to small, sensible to inane. Two centerpieces are glaring loopholes for multinational companies and banks, encouraging them to ship jobs and report profits abroad to avoid an estimated $80 billion in taxes over a decade.

Khaled Fahmy: The Egyptian state must stop killing the Egyptian people

Mass death sentence is the latest outrage by country’s corrupt judiciary

On March 24 and after only two swift sessions, one of them lasting less than an hour, a court in the southern Egyptian city of Minya issued its verdict concerning 529 defendants, reportedly all members of the now banned Muslim Brotherhood. The court referred the papers of the defendants to the mufti, one of the country’s highest officials in Islamic affairs, asking for his opinion on hanging them.

Even by the standards of the Egyptian judiciary, which many local human rights groups have recently accused of corruption and partiality, this ruling constitutes a serious affront to justice. Never before in Egypt’s modern history have so many defendants been sentenced to death in one case and with such haste. Never before has an Egyptian court been so dismissive of basic requirements of the judicial process as stipulated by Egyptian law, denying, as it did, defense lawyers the chance to present their case, preventing witnesses from testifying and ignoring complaints by the defendants about the impartiality and competence of the sitting judge.

Vartan Oskanian: Iran nuclear talks: The ‘trust but verify’ dictate

We can only understand Iran’s real intentions by engaging Iranians – not cornering them.

Although the Iran nuclear talks are officially between Iran and the five UN Security Council permanent members plus Germany, at the core, this tug-of-war is between Iran and the United States. I can even picture the US and Iranian diplomats, alone, behind closed doors, working on drafts of the final document.

The signs and posturing from all sides indicate that the US and Iran are serious, genuine and committed to reaching an agreement. The negotiations are being conducted quietly, and between rounds, the sides are displaying restraint and expressing cautious optimism. When the US, for domestic reasons, refused a visa to Iran’s UN representative, Iran’s response was measured. In the recent UN vote condemning Russia’s actions in Ukraine, Iran did not come in on Russia’s side, as it usually does. All this points to a very real opportunity for a positive outcome by the July deadline they have set for themselves.

How is it that what was unthinkable only a year ago suddenly seems plausible?