08/25/2015 archive

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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David Cay Johnston: The antidote to economic anxiety is better government

The stock market will recover. Whether jobs and pay will come back for most people is less certain

Sharp recent drops in the U.S., Chinese and European stock markets and the large crowds drawn by two very different men seeking to be president, Sen. Bernie Sanders and Donald Trump, point to the same issue: widespread economic anxiety. [..]

Although the news coverage is clamorous, the stock market will recover. Monday’s sudden stock market drops from Beijing to New York simply reflect the leverage of high-speed traders, many buying shares with $30 of borrowed money for every $1 of equity. With that much leverage, panic easily sets in when stock prices become volatile.

Encouraging this reckless behavior are the near zero interest rate policies of the Federal Reserve and other central banks. Artificially low interest rates decrease the costs of speculation and encourage frothing the market for quick profits, enabling traders and their clients to accumulate money without creating wealth.

This scenario is entirely preventable: If the government limited stock trades to ban or minimize borrowed money, there would be less speculation and less instability. In the long term, stock prices would move in greater accord with the profits and expected profits of each company.

Dean Baker: The Federal Reserve Board and the War for Poverty

There has been much talk in recent years about inequality and the poor life chances of children who grow up in poverty. Even many conservative Republicans have been putting forward proposals that are ostensibly designed to give people the opportunity to raise themselves out of poverty and into the middle class and beyond.

While the usefulness of the various proposals for combating poverty can be debated, the stated intention is increasing the income and opportunities for those at the bottom. This stands in sharp contrast to what the Federal Reserve Board seems prepared to do this fall. It plans to implement policies, specifically higher interest rates, which will reduce the income and opportunities for those at the bottom. [..]

However it is important that the public have a clear idea of what is at stake in the Fed’s decisions on interest rates. While many politicians and policy experts are grappling with ways to try to lower the poverty rate, by raising interest rates, the Fed will be directly preventing people in poverty from getting jobs and seeing pay increases. We can argue over the best policies to get people out of poverty, but a good place to start would be to end policies that keep them in poverty.

Richard (RJ) Eskow: In Troubled Times, the Federal Reserve Must Work for Everyone

It’s been a chaotic few days for the world’s markets. Recent events do not paint the picture of a stable economy guided by rational minds. Instead, the world of global finance looks more like a playground in need of adult supervision.

Like other nations, we have a central bank. What should the Federal Reserve do in troubled times? For that matter, what is the Fed’s role in preventing them from occurring in the first place? [..]

The Federal Reserve was created by the American people through an act of Congress. Its governors and its policies are there to protect and serve the public. The Fed should use its oversight capabilities to ensure that banks don’t behave in a reckless manner or help private funds and other unsupervised institutions to behave recklessly.

We are still paying the price for allowing big-money interests to dominate both lawmaking on Capitol Hill and monetary policy at the Federal Reserve. That must change. Congress and the Fed, acting together, should ensure that our nation’s policies benefit the many who are in need of help, not the few who already have more than they need.

Robert Reich: The Upsurge in Uncertain Work

As Labor Day looms, more Americans than ever don’t know how much they’ll be earning next week or even tomorrow.

This varied group includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.

On demand and on call — in the “share” economy, the “gig” economy, or, more prosaically, the “irregular” economy — the result is the same: no predictable earnings or hours.

It’s the biggest change in the American workforce in over a century, and it’s happening at lightening speed. It’s estimated that in five years over 40 percent of the American labor force will have uncertain work; in a decade, most of us.

Mark Weisbrot: US and Europe face common political problems

Resistance to economic insecurity and inequality is growing on both sides of the Atlantic

As the ever-lengthening U.S. election season begins to heat up, it is interesting to compare the U.S. and Europe regarding the evolution of their politics since the world financial crisis and recession (2008-09). In Europe, there has been quite a bit of political upheaval, with center-left parties often losing a large part of their voters. In Greece, to take the most dramatic example, the Panhellenic Socialist Movement (PASOK) is now polling just 3 percent of the electorate, after decades of wining around 40 percent or more of the vote. There have been significant losses of popularity for similar center-left parties in Spain, Italy, France and other countries – although some have yet to materialize in elections. In Greece, the leftist Syriza party has gotten most of the disaffected voters and took power this year; in Spain, the newly created leftist Podemos party shot up to the top quickly, although it has fallen some in polls recently. In France it has been the extreme right National Front that gained most, and in Italy, the new populist Five Star Movement.

The U.S. is an oasis of political stability by comparison, partly because of our different political system. But the main reason for Europe’s political turmoil, to mangle political strategist James Carville’s over-used slogan for the 1992 election: It’s the stupid economy.

The Breakfast Club (Tramps Like Us)

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

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This Day in History

Paris liberated during World War II; A first swim across the English Channel; Actor Sean Connery, composer Leonard Bernstein, and musician Elvis Costello born; Bruce Springsteen’s ‘Born to Run’ released.

Breakfast Tunes

Don’t Panic

Or rather, panic about the right things-

The GOP’s austerity hawks are throwing away a golden opportunity (again)

by David Dayen, Salon

Tuesday, Aug 25, 2015 05:58 AM EST

The U.S. Congress should have gaveled in an emergency session yesterday to react on the latest twist in the capital markets. Failure to do so creates unnecessary pain and will damage American competitiveness for the next generation.

I’m not talking about the stock market.

Right now, the U.S. can borrow money for 10 years at around 2 percent – a staggeringly low number, made so by an increase in global demand for Treasury bonds. When the economic winds shake globally, investors lead a “flight to safety,” looking for any instrument that won’t lose money. And despite the tumult of the past decade, investors still see Treasury bonds as the safest investment in the world.

What this means is that investors will hand over cash to the U.S. government with effectively no interest in real terms.

Significant borrowing, to repair crumbling infrastructure like bridges and water systems, or upgrade the electrical grid and broadband capacity for the entire nation, would have a seriously stimulative impact on an economy that’s already showing some labor market success. It would help arrest the persistent demand deficit that has existed in our economy since the outset of the Great Recession.

The lack of government debt is a problem for the world, as Paul Krugman pointed out recently. Former White House economist Jared Bernstein goes further, explaining that budget deficits lead to smoother and stronger economic growth. Our deficit is falling fast, and the government not only can handle throwing a couple hundred billion at upgrading the basic structures that make the country go, but would benefit handsomely from it.

This actively harms our economic potential over the next several years. We can’t have nice things because we’re still governed by a backwards ideology that thinks the government should run the country like a family manages their budget. But if a family could borrow money for free and use it to make all kinds of improvements in their lives, they’d jump at the chance. If we ever want to make America great again, we have to get over this dysfunction and get out our checkbook.

Those letters nice and friendly enough for you?

On This Day In History August 25

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.

LGBT Rights: The Battle For Equality Has Just Begun

In a passionate plea, John Oliver, the host of “Last Week Tonight,” explains why the need for the federal government must put an end to the discrimination that the LGBT community faces. He does it like no else could.