Matt Bai is a Moron

By 2006 I’d been blogging for about a year and while I did not attend the initial Netroots Nation I well remember the sensation caused by Mark Warner’s Chocolate Fountain.  Indeed, it inspired me to write what I consider one of my very best (and least noticed) pieces ever- My Las Vegas Convention- A Happy Story.

At 6:06 the doors opened on this ballroom that occupied the entire floor.  The view was spectacular, all up and down the Strip.  There were 2 Champagne Fountains and 2 Chocolate Dippers.  There were buffet tables and carving stations.  THERE WAS AN OPEN BAR!  Four of them, it’s a fun club.

So basically there were 20 people there.  And me.  And my sweetheart.  All sweaty and flushed and tired, our credentials flopping around our necks.

Remember the scene in the Wizard of Oz where Dorothy and company go down the hall?  It was kind of like that, only bigger and longer.  At the end of (no kidding) about a quarter of a mile was the DJ.  We wandered up and said hi and he said- “So is there anything you want to hear?”  I let her pick the song.  It was slow and sappy and we grabbed each other and spun around, alone on acres of dance floor, on top of the world.

The operative part is “2 Champagne Fountains and 2 Chocolate Dippers”.

The moral of that piece I’ll leave you to judge, but you’ll understand I’m not easily impressed.

Mark Warner’s Chocolate Fountain Remorse

By: emptywheel Tuesday November 9, 2010 5:36 am

Once upon a time in 2006, a dirty fucking hippie blogger had an opportunity to ask aspiring presidential candidate Mark Warner a few questions. Mark Warner had just dedicated part of a speech to talking about how Iran was the biggest WMD threat. So with her questions, the dirty fucking hippie blogger asked Mark Warner how, if the NIE had said Iran was years away from having nukes whereas Pakistan and its al Qaeda favoring Generals and unstable government already had nukes, Iran could be the biggest WMD threat. Warner then listed three reasons why Iran was the biggest WMD threat: its support of Hezbollah and Hamas, its nutty president, and its aspirations for hegemony in the Middle East. “But none of those things are WMD,” the blogger said.

Matt Bai, who observed the entire exchange, would later blame the dirty fucking hippie’s questions (which, after all, proved correct on several counts and served mostly to highlight to Warner how blindly he had embraced a popular talking point) for single-handedly driving nice moderate Mark Warner from the presidential race and with him potentially the ability to succeed as a party.

The dirty fucking hippie blogger took from that exchange the following: 1) Mark Warner doesn’t have the analytic ability to understand what threatens this country 2) Matt Bai tends to spout stupid centrist ideology even when reality proves him wrong.

…

Now, Mark Warner and his friends that maintain the deficit as a bigger threat than a stagnant economy are precisely what we dirty fucking hippie bloggers point to as the problem with the last two years. Because these centrists put their own pet theories ahead of real analysis of what our country needed, the legislation they passed failed to do the job. It’s the economy, stupid, and the economy is still so shitty at least partly because deficit scolds like Mark Warner cut the already too-small stimulus package back when it could do some good.

Which is what Matt Bai fails to understand with his piece trying to refute the theory that Democrats failed because they catered to people like Mark Warner.

…

What Bai and Warner choose not to understand is that centrism is an ideology even more stubborn than the left or right they love to attack, but an ideology that got us into the mess we’re in now, both fiscally and electorally.

Matt Bai thinks Ronald Wilson Reagan was the bestest President ever.

Background- Ireland is in some ways a model of the current state of the U.S. economy in miniature.  Same Real Estate bubble fueled by the same fraud, 3 big banks now all insolvent but bailed out.  Ireland eagerly embraced an austerity program early on.  How is that working out?

“Morgan Kelly is Professor of Economics at University College Dublin.”

If you thought the bank bailout was bad, wait until the mortgage defaults hit home

Morgan Kelly, The Irish Times

Monday, November 8, 2010

WHEN I wrote in The Irish Times last May showing how the bank guarantee would lead to national insolvency, I did not expect the financial collapse to be anywhere near as swift or as deep as has now occurred. During September, the Irish Republic quietly ceased to exist as an autonomous fiscal entity, and became a ward of the European Central Bank.

It is a testament to the cool and resolute handling of the crisis over the last six months by the Government and Central Bank that markets now put Irish sovereign debt in the same risk group as Ukraine and Pakistan, two notches above the junk level of Argentina, Greece and Venezuela.

…

With the €55 billion repaid, the possibility of resolving the bank crisis by sharing costs with the bondholders is now water under the bridge. Instead of the unpleasant showdown with the European Central Bank that a bank resolution would have entailed, everyone is a winner. Or everyone who matters, at least.

The German and French banks whose solvency is the overriding concern of the ECB get their money back. Senior Irish policymakers get to roll over and have their tummies tickled by their European overlords and be told what good sports they have been. And best of all, apart from some token departures of executives too old and rich to care less, the senior management of the banks that caused this crisis continue to enjoy their richly earned rewards. The only difficulty is that the Government’s open-ended commitment to cover the bank losses far exceeds the fiscal capacity of the Irish State.

…

This €70 billion bill for the banks dwarfs the €15 billion in spending cuts now agonised over, and reduces the necessary cuts in Government spending to an exercise in futility. What is the point of rearranging the spending deckchairs, when the iceberg of bank losses is going to sink us anyway?

…

As a taxpayer, what does a bailout bill of €70 billion mean? It means that every cent of income tax that you pay for the next two to three years will go to repay Anglo’s losses, every cent for the following two years will go on AIB, and every cent for the next year and a half on the others. In other words, the Irish State is insolvent: its liabilities far exceed any realistic means of repaying them.

…

Banks have been relying on two dams to block the torrent of defaults – house prices and social stigma – but both have started to crumble alarmingly.

People are going to extraordinary lengths – not paying other bills and borrowing heavily from their parents – to meet mortgage repayments, both out of fear of losing their homes and to avoid the stigma of admitting that they are broke. In a society like ours, where a person’s moral worth is judged – by themselves as much as by others – by the car they drive and the house they own, the idea of admitting that you cannot afford your mortgage is unspeakably shameful.

That will change. The perception growing among borrowers is that while they played by the rules, the banks certainly did not, cynically persuading them into mortgages that they had no hope of affording. Facing a choice between obligations to the banks and to their families – mortgage or food – growing numbers are choosing the latter.

…

The gathering mortgage crisis puts Ireland on the cusp of a social conflict on the scale of the Land War, but with one crucial difference. Whereas the Land War faced tenant farmers against a relative handful of mostly foreign landlords, the looming Mortgage War will pit recent house buyers against the majority of families who feel they worked hard and made sacrifices to pay off their mortgages, or else decided not to buy during the bubble, and who think those with mortgages should be made to pay them off. Any relief to struggling mortgage-holders will come not out of bank profits – there is no longer any such thing – but from the pockets of other taxpayers.

…

By next year Ireland will have run out of cash, and the terms of a formal bailout will have to be agreed. Our bill will be totted up and presented to us, along with terms for repayment. On these terms hangs our future as a nation. We can only hope that, in return for being such good sports about the whole bondholder business and repaying European banks whose idea of a sound investment was lending billions to Gleeson, Fitzpatrick and Fingleton, the Government can negotiate a low rate of interest.

…

Ireland faced a painful choice between imposing a resolution on banks that were too big to save or becoming insolvent, and, for whatever reason, chose the latter. Sovereign nations get to make policy choices, and we are no longer a sovereign nation in any meaningful sense of that term.

(h/t dday, Kevin Drum, and Tyler Cowen)

How’s that austerity thing working out for you? by ek hornbeck, 11/8/10

A good night to nap.  Broadcast premiers.  Keith due back tomorrow.  Greenwald on O’Donnell (maybe).

Damn it Valentine, you never plan ahead, you never take the long view, I mean here it is Monday and I’m already thinking of Wednesday… It is Monday right?

• ABC Family– Evan Almighty
• AMC– Wild Wild West, Tremors (my favorite Kevin Bacon movie ever)
• Bravo– Real Housewives marathon
• Comedy– Harold & Kumar Escape From Guantanamo Bay
• Disney– Ella Enchanted
• Discovery– Sr. v. Jr. x 2
• ESPN– Throwball, Steelers @ Bengals
• Food– Best Thing I Ever Ate (premier)
• FX– Man on Fire (not the good 1987 version)
• Lifetime– Baby for Sale
• TBS– Family Guy night
• Turner Classic– Traffic in Souls, The Indian Massacre (shhhh)
• TLC– Cake Boss (premier)
• Toon– Robotomy (Series Premier), Regular Show, MAD, Total Drama World Tour (premiers)
• Vs.– Coyotes @ Red Wings
• Spike– Star Wars: Episode II — Attack of the Clones x 2
• TV Land– My Cousin Vinny

You see? When the left tire mark goes up on the curb and the right tire mark stays flat and even? Well, the ’64 Skylark had a solid rear axle, so when the left tire would go up on the curb, the right tire would tilt out and ride along its edge. But that didn’t happen here. The tire mark stayed flat and even. This car had an independent rear suspension. Now, in the ’60’s, there were only two other cars made in America that had positraction, and independent rear suspension, and enough power to make these marks. One was the Corvette, which could never be confused with the Buick Skylark. The other had the same body length, height, width, weight, wheel base, and wheel track as the ’64 Skylark, and that was the 1963 Pontiac Tempest.

We have to keep out faith in the Republic. The day we stop believing democracy can work is the day we lose it.

Later-

• AMC– Airplane!
• Turner Classic– The Birth of a Nation (shhhh.  Yup, D.W. Griffith’s racist celebration of the Ku Klux Klan)
• USA– Welcome Home Roscoe Jenkins x 2

Dave hosts Harrison Ford and Cee Lo Green.  Jon has Rick Perry, Stephen Reza Aslan.  Double Alton, Squash and Sweet Potatos.

Series Premier of Conan on TBS.  He hosts Seth Rogan and Jack White.

Boondocks– Thank You for Not Snitching

Elaine, you’re a member of this crew. Can you face some unpleasant facts?

No.

Evening Edition is an Open Thread

1 Violence breaks out in Myanmar after election

AFP

Mon Nov 8, 12:00 pm ET

Standing For Nothing.

Look, if Democrats can’t repeal a policy more than two thirds of the American people, including a majority of conservatives want gone then they can’t expect people to vote for them. Preserving DADT is rank absurdity, even in 1993 the RAND study commissioned by the government showed that combat effectiveness would not be harmed by allowing openly gay servicemembers to serve, and the fact that DADT investigations are sometimes delayed when servicemembers are deployed undermines the notion that openly gay servicemembers harm the war effort.

The plain fact of the matter is that DADT undermines the military by forcing discharges of servicemembers with critical skills and walling off an entire section of the population from recruitment. The only remaining arguments for preserving DADT are premised on archaic cultural attitudes towards homosexuality, and Republicans’ insistence on undermining the military by preserving repeal is vanity, a projection of their own superficial prejudices onto the very servicemembers they claim to respect.

(h/t Atrios)

Let me explain slowly and clearly-

The problem is overcapacity and lack of aggregate demand.

Austerity by definition means less spending and less aggregate demand.

Irish Debt Woes Revive Concern About Europe

By LANDON THOMAS Jr., The New York Times

Published: November 7, 2010

LONDON – When interest rates soared last week on Irish government bonds, it served as a grim warning to other indebted nations of how difficult and even politically ruinous it could be to roll back decades of public sector largess.

An Irish bond market already in free fall plunged further after Ireland announced on Thursday that it planned to nearly double its package of spending cuts and tax increases to try to rein in its huge deficit. Investors took it not as a sign of resolve but rather of Ireland’s desperation and uncertainty about the true extent of its problems.

…

A year ago, as cascading mortgage defaults brought down the biggest Irish banks, Ireland became the first major developed nation to impose an austerity program. The country was hailed worldwide as an exemplar of probity and national consensus.

But as the full extent of the banking and real estate bust became evident, it was clear that the government of Prime Minister Cowen, which has been in power since the onset of the crisis more than two years ago, had underestimated the cost of fiscal recovery. Now the possibility that he will be forced from office or compelled to call a new election grows by the day.

…

The British chancellor, George Osborne, perhaps the keenest deficit hawk among policy makers in the developed nations, was taken to task last week by lawmakers. They accused him of exaggerating the extent of the country’s fiscal problems to justify broad cuts in middle-class benefits like universal payments to parents with children.

“How many children will be forced to leave their homes?” demanded one furious member of Parliament. “Will the numbers of homeless increase or decrease under your government? Will there be a reduction in special needs education for children in our schools?”

Pitchforks.

I’m reliably informed Keith will be back tomorrow.

Monday Business Edition

Following the economic story is a trifle confusing because there are at least 2 threads to it.  One of those threads is the failure of our financial institutions and their systematic culture of fraud.

But another thread is the failure of academic economists and Washington policy makers to correctly diagnose and take action on our National economic problems.

Let me start by saying that what we are seeing in the United States macro economy is a textbook example of the complete and utter failure of Monetary Policy from Milton Friedman to Alan Greenspan.  What ails us is overcapacity and a lack of aggregate demand.  Businesses are making everything that anyone will pay for and could easily make much, much more at little marginal cost.

They are sitting on piles of cash which they are currently using to buy sort term treasuries at 0% interest (a safe way of parking it not investing it), stock repurchases, mergers and acquisitions, expanding overseas operations, and other non productive pursuits; non productive in this case meaning- Not Increasing U.S. Aggregate Demand.

Now the textbook response to a situation like this is for the Government to step in as a purchaser of last resort- Dig Holes.  Fill them up.  At least you’re putting money in people’s pockets and because of the Multiplier Effect Aggregate Demand will rise and your National economy will pick up.  Tested and proven.

Indeed, this is exactly the argument David Broder uses for advocating War with Iran!

Umm… aggressive warfare for economic gain is pretty specifically a war crime Dave.

But it does validate the idea of Government fiscal policy as a tool for jump starting the economy.

Instead of that we are pursuing a policy of pushing on a string.  The object of Bernake’s $600 Billion repurchase is to create negative interest rates in the hopes that losing money by keeping it parked in T-Bills will spur investment.

A thin hope at best and as Krugman points out, by foregoing the chance to create increased expectations of inflation in general we are reducing that incentive.

Doing It Again

By PAUL KRUGMAN, The New York Times

Published: November 7, 2010

Eight years ago Ben Bernanke, already a governor at the Federal Reserve although not yet chairman, spoke at a conference honoring Milton Friedman. He closed his talk by addressing Friedman’s famous claim that the Fed was responsible for the Great Depression, because it failed to do what was necessary to save the economy.

“You’re right,” said Mr. Bernanke, “we did it. We’re very sorry. But thanks to you, we won’t do it again.”

…

For the big concern about quantitative easing isn’t that it will do too much; it is that it will accomplish too little. Reasonable estimates suggest that the Fed’s new policy is unlikely to reduce interest rates enough to make more than a modest dent in unemployment. The only way the Fed might accomplish more is by changing expectations – specifically, by leading people to believe that we will have somewhat above-normal inflation over the next few years, which would reduce the incentive to sit on cash.

The idea that higher inflation might help isn’t outlandish; it has been raised by many economists, some regional Fed presidents and the International Monetary Fund. But in the same remarks in which he defended his new policy, Mr. Bernanke – clearly trying to appease the inflationistas – vowed not to change the Fed’s price target: “I have rejected any notion that we are going to try to raise inflation to a super-normal level in order to have effects on the economy.”

And there goes the best hope that the Fed’s plan might actually work.

Think of it this way: Mr. Bernanke is getting the Obama treatment, and making the Obama response. He’s facing intense, knee-jerk opposition to his efforts to rescue the economy. In an effort to mute that criticism, he’s scaling back his plans in such a way as to guarantee that they’ll fail.

Business News below-

Treehouse of Horror #21, also new Cleveland Show, Family Guy, and American Dad.  Throwball, Boys @ Packers– Cheeseheads all the way.  Amazing Race.  Nature Braving Iraq, Masterpiece Mystery Sherlock: The Great Game.

MSNBC offers more of their quality weekend programming- Sex Slaves: Texas (premier).

Put it away, son. It’s not worth you getting beat again.

You didn’t beat me. You ignored the rules of engagement. In a fair fight, I’d kill you.

That’s not much incentive for me to fight fair, then, is it?

• ABC Family– Pirates of the Caribbean: The Curse of the Black Pearl
• AMC– The Abyss, The Walking Dead x 3 (premier)
• Bravo– Real Housewives marathon (with premier)
• Comedy– Hot Rod, Harold & Kumar Escape From Guantanamo Bay
• Food– Challenge, Next, Iron Chef America (all premiers)
• FX– Ice Age: The Meltdown, Kung Fu Panda
• History– Ice Road Truckers (last week’s and new), Aliens!
• Lifetime– The Perfect Neighbor, Who Is Clark Rockefeller? x 2
• Sci Fi– Malibu Shark Attack, Sharktopus (High-larious)
• Turner Classic– Metropolis (shhhh, Fritz Lang night)
• TNT– The Mummy Returns x 2
• Toon– Flubber, Sym-Bionic Titan and Clone Wars (this week’s), Delocated (Season Finale repeat)
• VH1– Drumline

Later-

• FX– Someone Like You
• Turner Classic– Spies (shhhh, more Fritz)
• USA– Street Kings, Gone Baby Gone

Childrens Hospital, live Season Finale.  Metalocalypse, first airs a week from now.  Assisted Suicide.

Not just the Spanish Main, luv. The entire ocean. The entire wo’ld. Wherever we want to go, we’ll go. That’s what a ship is, you know. It’s not just a keel and a hull and a deck and sails, that’s what a ship needs but what a ship is… what the Black Pearl really is… is freedom.

Zap2it TV Listings, Yahoo TV Listings

Evening Edition is an Open Thread

1 Myanmar votes in rare election marred by fraud fears

AFP

Sun Nov 7, 11:33 am ET

The Week In Review 10/31 – 11/6 is posted.

Surprise, surprise, surprise, Nico Hulkenberg gets Williams it’s first pole in over 5 years.  His team mate Rubens Barrichello qualifies a  modestly surprising 6th too.  The drivers they displaced from the usual suspects were Button and Rosberg.  Sutil and Buemi are staring with 5 place grid penalties, both for Turn 3 collisions at Yeongam.  Buemi piled into Glock on Lap 31, Sutil collected Kobayashi on Lap 47.  These are reflected in the pretty tables below.

The Telegraph article I cited does a pretty good job of summarizing the horse race, my McLaren boys need some timely DNFs, but, as I mentioned yesterday, Interlagos is a track that can provide them.  Alonso is running a used engine (of course there’s Webber and Vettel too).

Tactically it’s important to remember that while it rained yesterday it’s expected to be dry today.  This means a couple of things, first of all it means the track won’t be ‘rubbered in’ so it won’t particularly sticky at the start of the race.

The second thing is tire strategy.  Since it dried out at the end of Qualifying all (or mostly all) of the top 10 Qualifiers were running on Softs and they’ll have to start the race on them.  The fly in the ointment is that we saw in Friday practice that the Softs are only lasting a Lap or two, especially under heavy fuel and an abrasive track which are exactly the conditions we will have at the start of the race.

So, I would expect early pit stops from them.

But wait, it gets better!  Qualifiers 11 – 24 are always allowed to choose the tires they start on and particularly in this case because they parked them with Intermediate wets which you’re allowed to change for race conditions (they don’t even last as long as the Softs when it’s dry and were noticably deteriorating at the end of Q2).

It seems to me that the situation developing is this- all the backbenchers will come out on Primes and when the top Qualifiers are forced to pit without having had enough track time to build up time gaps, we’re going to see a lot of position changes.  It could be the case where if you want to win or even finish well you’ll have to do a lot of passing.  This might be a more interesting race than some.

Anyway, pretty tables (and they are pretty) and race updates below.

• Interlagos Qualifying
• F1 Official Site
• Speed Racecast

If you miss the race there will be a repeat on Speed at noon on Tuesday.