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Krugman mostly gets it

Blogging has been sporadic, inasmuch as my days have been spent writing at work, so by the time I get home, I can’t stand the thought of getting near a keyboard. Today was one of those days too, but I have one pathetic post in me, so why not.

I read Paul Krugman’s blog religiously. A day or two ago he grappled once again with the question of why certain right wingers can neither learn from their past errors or admit that their economic nostrums don’t work, and are, in fact, positively harmful to the majority of their fellow citizens:

“What’s it all about, then? The best stories seem to involve ulterior political motives. Keynesian economics, if true, would mean that governments don’t have to be deeply concerned about business confidence, and don’t have to respond to recessions by slashing social programs. Therefore it must not be true, and must be opposed. As I put it in the linked post,

So one way to see the drive for austerity is as an application of a sort of reverse Hippocratic oath: “First, do nothing to mitigate harm”. For the people must suffer if neoliberal reforms are to prosper.

If you think I’m being too flip, too conspiracy-minded, or both, OK — but what’s your explanation? For conservative hostility to Keynes is not an intellectual fad of the moment. It has absolutely consistent for generations, and is clearly very deep-seated.”

Via Paul Krugman’s blog

I’d like to offer an alternate explanation, one somewhat allied to Paul’s explanation, but with a bit different emphasis. In an earlier post I called it Billionaire Derangement Syndrome, but the billionaire’s lackeys can get it to, or at least enable it. It isn’t a question of hoping that neoliberal reforms prosper. That’s really beside the point, or at most, those reforms are merely a means to an end. It’s all summed up in that great line uttered by the villain in Superman III. This time, I’ll quote the whole thing:

You know a wise man once said, I think it was Attila the Hun, “It is not enough that I succeed, everyone else must fail.”

That’s what it’s all about Paul. This is not about a deluded belief in discredited economic nostrums or a refusal to mitigate harm. They know precisely what they’re doing and they intend harm. It’s a feature, not a bug. No need to add that last clause to that sentence. You’d have been more on the mark if you’d just written “For the people must suffer”.

Crime pays

So long as you steal enough. Not only does it pay, but if you reach the top of the profession, you don’t even have to worry about going to jail and, if you contribute money to NYU, you get an award.

But, I am beginning at the end, which means I’m forgetting the White King’s advice.

The immediate impetus for this rant is this piece at Wall Street on Parade, in which we learn that NYU is about to (or by now already has) honored John Paulson by giving him the Albert Gallatin Medal for Outstanding Contributions to Society. He appears to have earned this honor by giving a small percentage of his ill gotten gains to NYU, on whose Board of Directors he also sits. Beyond that it is not at all clear how society has benefited by dint of his existence.

Paulson is the guy, you may remember, who arranged with Goldman Sachs to have Goldman sell an investment vehicle to unwary investors, which investment vehicle was designed to fail. Paulson made a big bet against it, and made a billion dollars. He gave 5% of that to NYU and, for that, he was awarded the prize named after Thomas Jefferson’s Treasury Secretary, who was himself quite an estimable man, who can’t be blamed for the fact that the University he helped found has now become a prime example of the New Way in academia: large salaries for a few administrators, out of sight tuition for the students, and paltry pay for the “contract teachers” and adjuncts, most of whom make less in a year than a single student pays in tuition. As a comparison, in my student days, a professor surely made at least 10 times the full cost of a year’s room and board. Not exactly a recipe for academic excellence, but who cares about that?

What’s really funny is the way in which NYU describes Paulson’s criminal conduct:

In July 2010, Goldman Sachs settled with the SEC for a payment of $550 million. Fabrice Tourre was subjected to a jury trial and ordered to pay more than $825,000 in gains and penalties. John Paulson and his hedge fund skated and kept their profits.

This is when the power brokers at NYU seem to have taken their first interest in remarketing the villainous reputation of John Paulson into that of visionary businessman. The 2010 Spring/Summer issue of the Alumni Magazine of the Stern School of Business carried a glowing tribute to Paulson, noting that he had made a $20 million gift to the school. There is no mention of Abacus or shorting an investment designed to fail. Instead, the article tells alumni readers that “during the recent subprime mortgage crisis, Paulson developed a contrarian strategy that included shorting mortgage-backed securities. It turned into one of the greatest trades in Wall Street history.” (Emphasis added)

via Wall Street on Parade

Actually, the description is perfectly accurate. After all, isn’t all criminal activity just a “contrarian strategy”? At the very least we should do as Dean Baker suggests, and relieve these institutions of their tax exempt status unless they limit excessive compensation. At the same time we should make public universities free, so these “not so non-profit” institutions would have to compete. But back to Paulson, and to paraphrase Mel Brooks, “it’s good to be a crook”.

False choices

In my last post I made reference to a previous post, only noticing after the fact that though I’d written it, I had never pressed “post”. So, here it is, out of sequence, but what can you do:

After I read this article about Obama chastising Democrats for opposing the corporate takeover of the world’s legal system, I did a bit of googling to see if the term “false choice” was, as I thought, shorthand for a rhetorical device Obama appeared to be using.

Indeed, it was, and oddly enough, it’s a device, I find from my search results, that Obama often criticizes others for using:

President Obama’s Nobel Prize acceptance speech in Oslo on Thursday featured one of his favorite rhetorical devices: the false choice.

“Within America, there has long been a tension between those who describe themselves as realists or idealists—a tension that suggests a stark choice between the narrow pursuit of interests or an endless campaign to impose our values around the world,” he said. “I reject these choices.” Instead, he went on, it is in America’s interests to encourage human rights and democracy in other countries. Helping them helps us.

The device works well for Obama because he revels in nuance. Rejecting false choices allows him to toss out the paradigm—the “old battles,” as he likes to call them—and show people a new, third way. That tic is also an explicit rejection of his predecessor’s rhetoric. It’s hard to find a starker—and falser—choice than “You’re with us or against us.”

via Slate

Well, the fact that Obama “revels in nuance” doesn’t stop him from deploying false choice rhetoric when it suits his needs. Consider this:

With the cutting tone he usually reserves for his Republican adversaries, Mr. Obama said liberals who are fighting the new trade accord, the Trans-Pacific Partnership, were “just wrong” and, in terms of some of their claims, “making this stuff up.” If they oppose the deal, he said, they “must be satisfied with the status quo” and want to “pull up the drawbridge and build a moat around ourselves.”

via The New York Times

Actually, he rarely uses a cutting tone for his Republican adversaries, since he’s only recently given up trying to reach grand bargains with them. But, back to the main point. It’s harder to find a better example of a false choice argument than Obama’s: if you don’t agree to my trade deal, you must be for building a moat around the country. If the trade deal really were progressive, protective of worker’s rights and respectful of national sovereignty, then it wouldn’t be kept under wraps so we can’t look at it, and our Congresspeople who are allowed to look (but not copy) would be allowed to tell their constituents what’s in it. It’s called a pig in a poke, though I have no idea what a pig in a poke is.

Obama loves nuance, but not this time.

I’ve noticed a few things since I became politically aware back in the 60s. One thing I’ve noticed is that you should always run for cover when something (other than naming a post office) passes Congress unanimously or near unanimously. I’d add this to that observation: if Republicans line up behind Barack Obama, hold onto your wallet, put your money under the mattress and throw away your copy of the Constitution, because you won’t be needing it anymore. We can only hope that there will be a sufficient number of Republicans whose inveterate Obama hatred overcomes their desire to serve their corporate masters, thereby enabling the majority of Democrats to stop this travesty.

Strange Bedfellows

That Senate has, at least for the moment, rejected fast track authority for the TPP.

In my last post I observed that an unholy alliance between Republicans and Obama can only bode ill; the Republicans would have to have the chance to do a lot of evil before teaming up with Obama on anything, so even if we didn’t know how awful this deal was, we would have strong grounds for more than suspicion.

Only one Democrat voted with the titular leader of the Democratic party. If I’m reading the linked article correctly, Republicans were unanimous in supporting Obama. I doubt they’d give him that kind of support for naming a post office if they knew he cared about any particular designation.

Anyway, given the numbers, it’s obvious the Democrats didn’t “win” this vote, they “blocked” it, which is the modern parlance for filibuster. If the Democrats continue to hang together, which is by no means a sure thing, the only way McConnell and Obama can get the thing through is by ditching the filibuster. In the happy event that they do hang together, it will be interesting to see if Obama pushes for an end run around the filibuster, something he never did when it was Republicans “blocking” legislation.

It’s really sort of sad to see Obama mar the last years of his presidency by insisting on this gift to global corporations. It’s even sadder when he is reduced to lying about his fellow Democrats and treating the informed portion of the public as if it didn’t exist, by lying about both the process and the contents of this “trade” agreement.

On a lighter note, because I still like the guy for the most part, I have to pass this along.


Some things considered 

Not necessarily thematically connected, but this is my blog and I can write anything the government will permit me to write.

Obama is visiting serial labor exploiter Nike to push for his trade agreement. Nike is making promises about what will happen if the agreement is approved:

BEAVERTON, Ore. — President Obama plans to campaign for a Pacific free-trade zone on Friday by visiting the headquarters of Nike, where executives will announce that they will create 10,000 jobs in the United States if the accord is approved.

via New York Times

Would anyone care to bet that Nike will follow through on that promise?

Obama’s embrace of this gift to the corporate world is, perhaps, his greatest betrayal of the “hope and change” theme he pushed to get elected. But it truly boggles the mind that he would be so tone deaf as to think Nike headquarters is a good place to make his case.

Speaking of criminality, once more the crime syndicates known as banks are going to cop a plea, this time to charges that they have failed to take steps to make sure that bankruptcy discharges are reflected in credit reports.

The lawsuits accuse the banks of engineering what amounts to a subtle but ruthless debt collection tactic, effectively holding borrowers’ credit reports hostage, refusing to fix the mistakes unless people pay money for debts that they do not actually owe.

It is not the only pressure. Lawyers with the United States Trustee Program, an arm of the Justice Department, are investigating the banks, said several people briefed on the inquiry, about whether the banks are deliberately flouting federal bankruptcy law.

via The New York Times

One of the banks is JPMorgan Chase, where crime boss Jamie Dimon, the highly paid hands on kingpin of the organization, will once again plead ignorance of what his minions were doing.

Elsewhere, Facebook tells us that it’s pages do not promote insular thinking. Here’s the problems as concerned “scholars” perceive it:

Because so much information now comes through digital engines shaped by our preferences — Facebook, Google and others suggest content based on what consumers previously enjoyed — scholars have theorized that people are building an online echo chamber of their own views.

via The New York Times

This is as opposed to the echo chambers of corporate approved views that people get from the corporate media. I get most of my news from blogs, and I’ll freely admit most of them are left leaning. I suppose I’ve created an echo chamber, but at least it’s one I’ve created based on my own assessment of the reliability of the sources. That has to be better than what we get from the corporate media. Consider Paul Krugman’s ruminations on the recent election in England, where the corporate media has successfully persuaded the majority of the population that the conservative government, which tanked the economy, actually saved it:

What nonsense am I talking about? Simon Wren-Lewis of the University of Oxford, who has been a tireless but lonely crusader for economic sense, calls it “mediamacro.” It’s a story about Britain that runs like this: First, the Labour government that ruled Britain until 2010 was wildly irresponsible, spending far beyond its means. Second, this fiscal profligacy caused the economic crisis of 2008-2009. Third, this in turn left the coalition that took power in 2010 with no choice except to impose austerity policies despite the depressed state of the economy. Finally, Britain’s return to economic growth in 2013 vindicated austerity and proved its critics wrong.

Now, every piece of this story is demonstrably, ludicrously wrong. Pre-crisis Britain wasn’t fiscally profligate. Debt and deficits were low, and at the time everyone expected them to stay that way; big deficits only arose as a result of the crisis. The crisis, which was a global phenomenon, was driven by runaway banks and private debt, not government deficits. There was no urgency about austerity: financial markets never showed any concern about British solvency. And Britain, which returned to growth only after a pause in the austerity drive, has made up none of the ground it lost during the coalition’s first two years.

Yet this nonsense narrative completely dominates news reporting, where it is treated as a fact rather than a hypothesis.

via The New York Times

Now, to a mystery. I’ve often wondered how the con artists at places like Bain Capital get away with their corporate raids, considering that the other-people’s-money they are playing with usually comes from institutional players that should know better. Here’s an even bigger mystery. Why would anyone buy credit default swaps on government debt, particularly the debt of the United States? Dean Baker puts the problem succinctly:

As the more calm among us tried to explain, it’s not clear that the price of a CDS on U.S. Treasury bonds measured anything. A person holding the CDS can only get paid off, if the U.S. government defaults on its debt and the bank that issued the CDS is around to make the payment. If there is a real default (I don’t mean a delay of a few hours or days over debt ceiling fights), it is hard to imagine what banks would still be standing to make good on the CDS they had issued.

In other words the probability that the U.S. government would default and there would be bank in a situation to meet its CDS obligations is very close to zero. This is why the price of a CDS issued on U.S. Treasury bonds is virtually meaningless as a measure of default risk.

via Beat the Press

That really is quite clear. It’s like getting insurance against a comet hitting the earth and utterly destroying it. There doesn’t seem to be an upside. So who are the people buying these swaps? I’ve got a few bridges they might be interested in buying.

Finally, in the you can’t make this up department, Jeb Bush is telling his supporters that he’ll be getting his advice on Middle East policy from none other than brother George:

The Washington Post reported that Jeb cited his brother as an adviser on Israel, however, four sources confirmed to CNN that the comments were focused on foreign policy more broadly. Three of them said Jeb noted his brother was an adviser on the Middle East.

One of the people in the room jotted down Jeb’s comment as such: “What you need to know is that who I listen to when I need advice on the Middle East is George W. Bush.”

via CNN

Jeb’s spokesperson is walking these comments back as I write.

As Yoda might say, “Shame it is Hillary for the Iraq War voted”. Yes, unfortunately Hillary is in no position to make hay out of this in the unlikely event Jeb is the candidate. Now, Bernie on the other hand…


It’s official. Bernie’s running, and although I wasn’t among the folks who contributed oodles of money the day he announced (I was a day late), I am enthusiastic about him. I said before that he probably doesn’t have a reasonable chance to win, but that the level of support he would get will be greater than the folks who own the discourse believe. That already seems to be the case, and I think more surprises are ahead. It may well just be between Hillary and Bernie, which means Bernie’s message will be heard.

Over at Hullabaloo they put it like this:

What Sanders offers is the opportunity to change a narrative that has been beating on us for at least the last fifteen years—a narrative that excludes good, popular public policy from consideration. Raising the minimum wage to where it was in the 70s, adjusted for inflation, is good, popular public policy. Recognizing that the 401K experiment for replacing pensions has failed, and we need to increase social security benefits to make up for that failure is good, popular public policy. Making it possible for a student to graduate from college without a crushing debt burden is good, popular public policy. So is the adoption of trade and industrial policies that benefit everyone, not just the rentiers.

This stuff polls well. Really well. In the 70s, even the 80s. We don’t hear about it because the gatekeepers—the centrist media and the campaign funders–don’t want these issues on the table. These are unifying issues. How do you think 50 something white men in West Virginia feel about medical coverage in the years between the corporate job with health benefits and Medicare? How do you think they feel about their retirement security?

via Hullabaloo

I’d take issue with one point here. The narrative has been beating on us for far more than fifteen years. I’d put it at more like 42, the number of years since the Democratic Establishment walked away from George McGovern en masse. That walk out, by the way, was led by George Meany and the unions, who just couldn’t back a guy who was against a senseless war. How did that work out for them, I wonder?

Anyway, with some minor exceptions, ever since that year the Democratic Party has shied away from actually championing progressive policy, preferring, at best, to offer half throated defenses of progressive victories of the past. The defensive crouch has gotten more pronounced over the years, and has become such a norm that many people don’t recognize it, or prefer to talk themselves into believing that they are hearing what they want to hear. I plead guilty to having heard what Obama wasn’t truly saying in 2008. It turns out that hope and change meant running interference for Wall Street, stripping us of our civil liberties, and giving us a health care plan that is more a gift to insurance companies than anything else. He’s still better than McCain would have been (can you just imagine that?), but that’s a pretty low bar.

Rachel Maddow says that no one could have predicted how well Bernie’s fundraising would go, but that only shows how even Rachel can catch Beltway bubble disease. Any politically engaged progressive could have predicted the response, and would predict, as well, that Sanders will do far better against Hillary than the pundits could ever predict. A lot may depend on how successful the media is in freezing Sanders out; but they really don’t have that capability to the extent they did before the internet. They will, of course, try to paint him as an out of touch socialist and an extremist (can it really be extreme to want to protect New Deal programs and reinstate now-repealed New Deal checks on big banks?), while ignoring the fact that the Republican candidates are in a competition to see which of them can best cater to the crazy vote without alienating whichever billionaire happens to own them. I don’t think there’s anything they can do to prevent some surprises in Iowa, New Hampshire and the states beyond. Will Bernie win the nomination? Probably not, but it’s not impossible, and if he gets the nomination I think he’d be a lock to win the presidency. His biggest challenge, going forward, is to anticipate the media’s assassination attempts (remember the Dean scream?) and take effective action once they start.

Further proof

A few days ago I asserted, based on extremely good evidence, that the good old USA was number one in the stupid department, thanks to the downward pressure the Old Confederacy (Texas in particular) is putting on our average IQ. The immediate impetus for the article was a public hearing in Bastrop, Texas, in which several hundred very stupid Texans packed a public hearing to express their fears that some upcoming military exercises were really a prelude to a federal takeover of Texas. (As if anyone would want to be saddled with Texas)

Anyway, if any further proof is needed that Texas is really weighing us down, consider that the stupid isn’t confined to Bastrop. No, the infection goes right to the top, if you can use that term to refer to the governor of a state like Texas:

AUSTIN, Texas (AP) — Texas Republican Gov. Greg Abbott on Tuesday asked the State Guard to monitor a U.S. military training exercise dubbed “Jade Helm 15” amid Internet-fueled suspicions that the war simulation is really a hostile military takeover.

The request comes a day after more than 200 people packed a meeting in rural Bastrop County and questioned a U.S. Army commander about whether the government was planning to confiscate guns or implement martial law. Bastrop County Judge Paul Pape said “conspiracy theorists” and “fear mongers” had been in a frenzy.

“It is important that Texans know their safety, constitutional rights, private property rights and civil liberties will not be infringed,” Abbott wrote. “By monitoring the Operation on a continual basis, the State Guard will facilitate communications between my office and the commanders of the Operation to ensure that adequate measures are in place to protect Texans.”

via Talking Points Memo

Now, it is certainly possible that Abbot is doing this just to placate these very stupid people. But, that’s no defense to the charge of gross Texas stupidity. Here in the land of “we’re not quite as stupid as Texas” we would quietly commit these people for observation, rather than even pretend that they have valid concerns. We’re not perfect, but we’re definitely not Texas sized stupid.

We’re Number One!

At least, I’m fairly sure we must be, for could there be a country in which people are stupider than our fellow citizens:

If you haven’t heard, there’s going to be a large military exercise around the country from July 15th to September 15th. It’s called Jade Helm 15 because all military trainings have names and that one wasn’t taken, I suppose. Texas has five counties involved and the rightwing is damn sure that it means Obama is taking over and gonna put all them in a concentration camp Just! Like! Hitler!

So one of the Texas counties is Bastrop. Bastrop is between here and Austin. There’s some strange people living there.

After the county judge gave the military permission to hold some of these trainings in Bastrop, the citizenry went beeeeserk.

Lt. Col. Mark Lastoria answered questions for two hours from a crowd of more than 150 people at a special meeting of the Bastrop County Commissioners, hoping to allay locals’ concerns that the training operation is a way for the federal government to take over Texas and much of the Southwest. Instead, Lastoria was told that he couldn’t be trusted and was asked whether Jade Helm 15 will involve bringing foreign fighters from the Islamic State to Texas, whether U.S. troops will confiscate Texans’ guns and whether the Army intends to implement martial law through the exercise. (The answer for all three was no.)

via Crooks and Liars

Now, I know what anyone who might chance to read this is thinking right now: that I am unfairly maligning all Americans by lumping them in with Texans. But here’s the thing, in order for the rest of us to bring our national average up past moron, much less all the way to world average, we’d have to all be Einsteins, and that’s not taking into consideration the fact that the rest of the Old Confederacy is jam packed with people every bit as stupid as the Bastroptonians. As Dean Baker’s Mister Arithmetic would point out, there’s a lot of people in Texas, and even if you exclude half the population of Austin on the theory that not everyone in that island of sanity is as drop dead stupid as the folks in Bastrop, you are still left with an enormous number of people bringing down the national average.

So, again, let me humbly propose that we re-open negotiations with the Confederacy. Not taking anything away from Abraham Lincoln, a truly great man, but maybe he missed an opportunity. If we got rid of the Southland, and merely brought the average IQ in this country even with, lets say, Canada, there’s no end to what we could accomplish. The folks in Bastrop would jump at the chance to make sure that the federal government couldn’t possibly take their guns, and we here in the North could actually make some progress in making sure people that stupid aren’t allowed to have guns here. A win-win for everyone, though we’d have to make plans for the refugee camps sure to spring up along our Southern border. Not that we’d try to keep any of the refugees out; anyone smart enough to want to escape should be welcomed with open arms.

The Department of Education looks out for its constituents

This is truly disgusting:

In the wake of the abrupt closure of the for-profit Corinthian Colleges on Sunday, the Education Department released official guidance suggesting that the school’s 16,000 students transfer to a number of the industry’s most troubled for-profit schools.

Among the schools on the Education Department’s list of “viable transfer options” released to Corinthian students are ITT Technical Institute, which is facing a predatory lending lawsuit by the Consumer Financial Protection Bureau and investigations by 17 state attorneys general, and schools owned by EDMC, which is being investigated by the Department of Justice. Teetering on the edge of financial instability, EDMC has instituted mass layoffs and sold off several of its Art Institutes campuses.

via Buzzfeed via Daily Kos.

The Kos article goes on to reference a report released by Tom Harkin, when he was in the Senate, to the effect that for-profit colleges are, not to put too fine a point on it, legalized fraud, a waste of tax-payer money, and a destroyer of the lives of the victims students they pretend to educate.

Naturally, the folks like Arne Duncan who are pushing these sheep toward another shearing are anxious to extend the benefits of for-profit education further down the educational ladder. If we don’t wake up (and we hardly ever do), in 10 years the for-profits will be running our high schools and grammar schools. The scam will operate differently (there is no student loan teat to suck on at the primary or secondary level), but the end result will be the same: higher costs for inferior product. This, by the way, is what we get with a Democrat in the White House. It only gets worse if a Republican takes over.

Democrats go for another bunt single

A couple of days ago I noted that Hillary Clinton was prepared to make the relatively trivial issue of paid leave the centerpiece of her campaign, that being yet another example of the Democrats propensity to try to bunt their way on base. To extend the analogy (or is it metaphor?), if you know the ump is going to call you out anyway, you might as well swing for the fences.

So, in the words of St. Ronald, “[here] they go again”:

WASHINGTON — Democrats in Congress are uniting around a proposal to raise the federal minimum wage to $12 an hour.

Within the next several days, Senator Patty Murray, the top Democrat on the Senate committee that deals with labor issues, plans to introduce a bill to increase the minimum wage, in steps, from its current level of $7.25 to $12 by 2020.

The measure has little chance of passing the Republican-controlled Congress in the near future, but it is the latest indication of Democrats’ rising ambitions for lifting the wage floor, an issue with considerable popular support in an era of increasing income inequality. The party is determined to elevate the issue in next year’s congressional and presidential elections.

via The New York Times

So, with full knowledge that the ump will call them out, the Democrats go for the bunt. It is widely acknowledged that a $15.00 per hour minimum wage would be equivalent to the minimum wage of the late 60s, when you could actually live on the minimum wage. Why, pray tell, are the Democrats pushing for a minimum wage that is still woefully inadequate? If you’re looking for political advantage, push for what people ought to get, not what you might get by way of compromise if you were dealing with rational people, which you are not in any event. The Republicans throw red meat at their base; the Democrats throw cold turkey.