Thursday, December 31, 2009
The best that can be said for 2009 is that it could have been worse, that we pulled back from the precipice on which we seemed to be perched in late 2008, and that 2010 will almost surely be better for most countries around the world. The world has also learned some valuable lessons, though at great cost both to current and future prosperity — costs that were unnecessarily high given that we should already have learned them.
The first lesson is that markets are not self-correcting. Indeed, without adequate regulation, they are prone to excess. In 2009, we again saw why Adam Smith’s invisible hand often appeared invisible: it is not there. The bankers’ pursuit of self-interest (greed) did not lead to the well-being of society; it did not even serve their shareholders and bondholders well. It certainly did not serve homeowners who are losing their homes, workers who have lost their jobs, retirees who have seen their retirement funds vanish, or taxpayers who paid hundreds of billions of dollars to bail out the banks.
Under the threat of a collapse of the entire system, the safety net — intended to help unfortunate individuals meet the exigencies of life — was generously extended to commercial banks, then to investment banks, insurance firms, auto companies, even car-loan companies. Never has so much money been transferred from so many to so few.
We are accustomed to thinking of government transferring money from the well off to the poor. Here it was the poor and average transferring money to the rich. Already heavily burdened taxpayers saw their money — intended to help banks lend so that the economy could be revived - go to pay outsized bonuses and dividends. Dividends are supposed to be a share of profits; here it was simply a share of government largesse.
The justification was that bailing out the banks, however messily, would enable a resumption of lending. That has not happened. All that happened was that average taxpayers gave money to the very institutions that had been gouging them for years — through predatory lending, usurious credit-card interest rates, and non-transparent fees.
The bailout exposed deep hypocrisy all around. Those who had preached fiscal restraint when it came to small welfare programs for the poor now clamored for the world’s largest welfare program. Those who had argued for free market’s virtue of “transparency” ended up creating financial systems so opaque that banks could not make sense of their own balance sheets. And then the government, too, was induced to engage in decreasingly transparent forms of bailout to cover up its largesse to the banks. Those who had argued for “accountability” and “responsibility” now sought debt forgiveness for the financial sector.
The second important lesson involves understanding why markets often do not work the way they are meant to. There are many reasons for market failures. In this case, too-big-to-fail financial institutions had perverse incentives: if they gambled and succeeded, they walked off with the profits; if they lost, the taxpayer would pay. Moreover, when information is imperfect, markets often do not work well — and information imperfections are central in finance. Externalities are pervasive: the failure of one bank imposed costs on others, and failures in the financial system imposed costs on taxpayers and workers all over the world.
The third lesson is that Keynesian policies do work. Countries, like Australia, that implemented large, well-designed stimulus programs early emerged from the crisis faster. Other countries succumbed to the old orthodoxy pushed by the financial wizards who got us into this mess in the first place.
Whenever an economy goes into recession, deficits appear, as tax revenues fall faster than expenditures. The old orthodoxy held that one had to cut the deficit — raise taxes or cut expenditures — to “restore confidence.” But those policies almost always reduced aggregate demand, pushed the economy into a deeper slump, and further undermined confidence - most recently when the International Monetary Fund insisted on them in East Asia in the 1990’s.
The fourth lesson is that there is more to monetary policy than just fighting inflation. Excessive focus on inflation meant that some central banks ignored what was happening to their financial markets. The costs of mild inflation are miniscule compared to the costs imposed on economies when central banks allow asset bubbles to grow unchecked.
The fifth lesson is that not all innovation leads to a more efficient and productive economy — let alone a better society. Private incentives matter, and if they are not well aligned with social returns, the result can be excessive risk taking, excessively shortsighted behavior, and distorted innovation. For example, while the benefits of many of the financial-engineering innovations of recent years are hard to prove, let alone quantify, the costs associated with them - both economic and social - are apparent and enormous.
Indeed, financial engineering did not create products that would help ordinary citizens manage the simple risk of home ownership — with the consequence that millions have lost their homes, and millions more are likely to do so. Instead, innovation was directed at perfecting the exploitation of those who are less educated, and at circumventing the regulations and accounting standards that were designed to make markets more efficient and stable. As a result, financial markets, which are supposed to manage risk and allocate capital efficiently, created risk and misallocated wildly.
We will soon find out whether we have learned the lessons of this crisis any better than we should have learned the same lessons from previous crises.
Regrettably, unless the United States and other advanced industrial countries make much greater progress on financial-sector reforms in 2010 we may find ourselves faced with another opportunity to learn them.
*This piece originally appeared on the China Daily website.
Roosevelt Institute Braintruster Joe Stiglitz is an Economics Nobel laureate and university professor at Columbia University. He has written many books, including Globalization and Its Discontents and The Roaring Nineties. His latest book, Freefall, will be published in January.
The curious may want to know why the Bush tax cuts are set to expire in the first place. After all, if then-President George W. Bush and Congress thought they were a good idea when they passed them in the early 2000s, why make them temporary?
The answer is that President Bush and a complicit Congress didn’t want to show the magnitude of the deficits that would result from their tax cuts. To hide those deficits as they were pushing them through they used a variety of accounting tricks. One of those tricks was attaching expiration dates so that, on paper, there wouldn’t be any long-term costs. This made the long-term deficit picture look fairly rosy on paper even as it doomed Bush’s successor and the current Congress to cleaning up the mess.
In fairness, Bush and his supply-side crowd believe with a zealot’s fervor that tax cuts spur such economic growth that future deficits never happen. Over history there are trillions of dollars of debt that prove them wrong. But there’s no persuading a true believer.
The mess handed to the current president and Congress couldn’t be better designed to make their lives miserable. If they take no legislative action and let the cuts expire there will be a nice juicy tax increase at the end of 2010. Taxes on the wealthy will go up the most since they got the biggest tax cuts under President Bush. But the Bush tax cuts also handed out morsels up and down the income spectrum.
Policymakers are damned if they do and damned if they don’t. If they let the tax cuts expire they’ll be blamed for raising taxes. If they extend the tax cuts, the deficit picture suddenly looks worse because, on paper, we’ve been counting on the money from the tax cuts expiring to keep the deficit down. The choice of either looking like tax raisers or deficit raisers is no fun at all.
President Obama during the campaign last year offered a middle ground. He proposed extending the tax cuts on those with less than $250,000 of income and letting most of them expire on those with income greater than that. This way he keeps taxes constant on the middle class, raises them on the well-to-do, and the deficit picture doesn’t look as bad as if all the tax cuts were extended.
Decision time is fast approaching, with the tax cuts expiring at the end of 2010. Those who would receive a tax hike will put up a fight. They’ll throw up the usual supply-side smokescreen about taxing investors, hurting small business, and the rest. But given the failure of the Bush tax cuts to deliver the strong economy that was promised those arguments aren’t likely to carry the day.
Another argument we’ll hear is that $250,000 per year isn’t “rich.” That’s fair enough—in some places it isn’t. But it’s still doing pretty well. For the nation, only about 2 percent of households have income over that level. Even New Jersey, the state with the highest median income for the relatively prosperous demographic of families of four, only clocks in at $103,000.
And consider how the tax increase will work. One of the sensible features of the tax code is that it generally operates on marginal income. What that means in this case is that just because someone has $250,001 in income doesn’t mean they suddenly pay more taxes on their entire $250,001. They essentially only pay more in taxes on the $1 that exceeds $250,000.
Thus, it’s not really the poor folks making $250,001 who will be hit hardest by this but those who make well more than that. Asking a bit more from people making over $250,000, even if in some places they don’t consider that to be “rich,” isn’t asking for a huge sacrifice. Nowhere is it written that when additional taxes are necessary the richest of the rich should pay all of them.
Another argument against allowing the high-end Bush tax cuts to expire will be that we shouldn’t raise taxes during a recession. Of course, by the beginning of 2011 one would hope we won’t be in a recession anymore. Even if we aren’t, however, we’re likely to continue to have high rates of joblessness—so the argument will have resonance. In fact, it’s the best argument the opposition has. After all, “don’t raise taxes during a recession” is a bit of an adage with economists. It makes sense. During a recession it’s better to put money in people’s pockets—without worrying too much about the government’s budget deficits—to encourage spending in the economy so businesses have customers, which encourages the businesses to start hiring and making investments. Raising taxes goes in the opposite direction. During the campaign then-candidate Obama hedged on whether the tax increases would be appropriate if a recession was still going on.
The adage of “don’t raise taxes during a recession” isn’t a crazy adage, but like most adages it’s an oversimplification. For one thing, if that’s the rule, state governments with their balanced-budget requirements that limit their ability to deficit spend should be exempt—their spending is valuable to the economy and if they need to tax more to keep it up, that may be better for the economy than keeping their taxes the same.
Even for the federal government, which can deficit spend, it’s important to look at all the options. While lower taxes during a recession can help the economy rebound, lower taxes for the wealthy are about the worst way to do it. Lower taxes for middle- and low-income people is a much better way to help the economy because middle- and low-income families are much more likely to spend their money than the wealthy. And it’s spending that we need to create the demand that will encourage businesses to hire and invest.
If we decide we don’t want to raise taxes in a recession we should instead move the tax cuts around a bit. That is, let the tax cuts on those making over $250,000 expire and use the money to give tax cuts to people who could use the help and—more importantly for the economy—are more likely to spend the money they receive. Giving a temporary tax break, or tax rebate, to middle- and low- income families would be much better for most people and much better for everyone because they would help get the economy back on track far more than the Bush tax cuts.
There’s also another option that would be better for the economy. We could let the Bush tax cuts on those making over $250,000 expire and use the funds for other job creation measures that are likely to be more effective than tax cuts.
We could, for example, use them to help state and local governments avoid laying off teachers, firefighters, and other public service workers because of the enormous shortfalls they’re facing. There are a host of ideas for how the money could be spent better for job creation than leaving the Bush tax cuts alone. With these ideas, we aren’t dependent on how the recipients of tax cuts spend their largess for the economic boost we hope for. With these ideas, the funding goes directly into the economy in the way we most need it.
That is, of course, our ultimate goal—a healthy economy. We ought to do what it takes, on both the tax and spending side, to make that happen. And that might in fact include raising taxes on some during a recession.
I am not an "analytic." I do not even know what that means. I can certainly tell you the basics of Quine and Kripke, though I've read relatively little David Lewis; I think metaethics deals with important philosophical problems, but find most Anglophone normative theory embarrassing; I could give you a short lecture on the Gettier problem and the responses to it, but I think "analytic metaphysics" is a seriously wrong turn in the field and ignore it. I can also tell you the basics about Habermas, though I am not a fan and much prefer Adorno, Horkheimer, and Marcuse; I think Derrida is a charlatan, and am sorry to see Foucault, whom I think is the most interesting diagnostician of the 'iron cage' of modernity since Weber, associated with him so often; I agree with Deleuze that phenomenology is our "modern scholasticism," but have a soft spot for Sartre. I enjoy Hume and Nietzsche, Spinoza and Marx, but haven't much affection for Leibniz or Hegel. I am interested in philosophy and philosophical problems that crop up in various traditions, but often have an interest and existence that transcends them. But why is it so important to cabin me off as an "analytic" in contrast to the "Continentals" (who are then, wholly bizarrely, equated with Postmodernists by our commenter)? Who are these "Continentals"? If I have written extensively on Nietzsche, occasionally on Marx and Foucault; if I have taught Hegel, Marx, Nietzsche, Foucault, Adorno, and Horkheimer with some frequency; if I have co-edited The Oxford Handbook of Continental Philosophy, and I am not a "Continental," then who is?
As I have noted before--and as The Oxford Handbook, I think, reflects--we are living in a Golden Age for scholarship on European philosophy after Kant. Someone who thinks there is a lot of "talking past one another" going on can't, obviously, be talking about the current state of scholarship on figures like Hegel, Schopenhauer, Nietzsche, Husserl, and Merleau-Ponty--so what is the commenter talking about? Who are these mysterious "Continentals" since they are not me, Michael Rosen, Taylor Carman, Frederick Beiser, Peter Poellner, Sebastian Gardner, Julian Young, Raymond Geuss, Michael Forster, or any of the others working on and in various Continental traditions of philosophy? As any actual scholar knows, there is no such thing as a "Continental tradition" in philosophy; rather, as Rosen and I noted in the introduction to The Oxford Handbook,[P]hilosophy in Continental Europe in the nineteenth and twentieth centuries is best understood as a connected weave of traditions, some of which overlap, but no one of which dominates all the others. So, for example, German Idealism marks the immediate reception and criticism of Kant's philosophy in figures like Fichte, Schelling, and Hegel, who use a comprehensive conception of reason to provide connected answers to a broad range of questions of metaphysics, epistemology, and the theory of value. The breakdown of the German Idealist view was, in turn, of central importance in motivating Marx, Kierkegaard, Schopenhauer, and, more indirectly, Nietzsche. The reactions against Hegel's Idealism in the decades after his death in 1831 were, in fact, manifold; they included: (1) the German Materialism of the 1850s and 1860s in writers like Buchner, Moleschott, Czolbe, and Vogt (though with resonances in better-known philosophical figures like Feuerbach, Schopenhauer, and Nietzsche), who took seriously the development of modern physiology, and advocated...the replacement of philosophy by science; (2) Marx's own repuditation of the domain of philosophy as the attempt to establish doctrines in metaphysics and
epistemology in favor of a political, critical and scientistic conception of philosophical method; and (3) the emergence of neo-Kantian thought in the latter years of the nineteenth century (e.g., Lotze, Helmholtz, Fischer, Cohen, Windelband, and Rickert) as a response to the emergence of psychology as a scientific discipline ... Most of the major twentieth-century developments in "Continental" philosophy can, in turn, be seen as responses to one or more of the nineteenth-century philosophical currents. Inasmuch as there is a Marxist tradition in philosophy, for example, it is marked by a dissatisfication with Marx's professed ideal of a scientific, historical approach to the study of society from which all philosophical questions have been purged, a dissatisfaction expressed in figures like Lukacs, Gramsci, Adorno, Horkheimer, Marcuse, and, finally, Habermas, who returns Kantian-style questions about justification to center stage. (The analytical Marxists in Anglophone philosophy end up, arguably, with a similar dissatisfaction.) Modern Phenomenology arose, like neo-Kantianism, in reaction to the development of modern psychology, in particular the attempt to reduce issues regarding the nature of thought, meaning, and logic to questions to be answered by an empirical scientific investigation of the facts of mental life....In the hands of Heidegger, however, the tradition is importantly transformed, with a new emphasis on the relationship between structures of meaning and the lived experience of particular individuals that inspired the French Existentialists (like Camus and Sartre) in their belief in the priority of 'existrence' over 'essence.' Other important developments associated with Continental Europe in the twentieth-century do not map neatly on to the story sketched so far. The philosophical tradition we associate with 'Hermeneutics,' for example, which asserts the centrality and distinctiveness of interpretation for any understanding of language (and, hence, of human beings in whose lives language plays a constitutive role), intersects with both the German Idealist and the Phenomenological traditions and brings to them a distinctive set of issues regarding the relationship between language and thought, the nature of historical and social understanding, and the essential finitude of human
understanding, issues that are manifest in hermeneutically minded writers from the eighteenth through the twentieth centuries, including, Herder, Schleiermacher, Dilthey, and Gadamer.So, too, 'Structuralism' was a movement initially not in philosophy, but in linguistics and the social sciences--associated with figures like Saussure, Levi-Strauss, Barthes, Althusser, and others--which placed emphasis on the explanatory autonomy of systems in contrast to psychological, historical, or teleological explanations. But once this idea was imported into philosophy and psychology itself (for instance, by Lacan and Foucault) the consequence took the form of the so-called 'death of the subject' out of which in turn the tendencies known as 'post-structuralism' and 'post-modernism' emerged (in figures like Derrida, Deleuze, and Foucault again). In its most radical forms--informed by Heidegger and one (contentious) reading of Nietzsche--post-structurlism is best understood as a modern form of skepticism,
calling into question not just the possibility of objective truth but of determinate understanding.
This brief, introductory survey of positions, doctrines, and thinkers found on the European Continent after Kant should make clear that any unqualified talk of "Continental" as a kind of philosophy (a doctrine, a method, a set of problems) is ludicrous.
So what's really going on here when people, like the anonymous commenter (but many others, of course), speak of "Continental" or "Continentalists"? For sake of clarity and accuracy, we should really call this sociological phenomenon "Party Line Continentalism" since what it actually picks out is a political effort to enforce a certain philosophical orthodoxy, namely, that which arises from a conception of philosophy and its methods that is largely fixed by Heideggerian phenomenology and developments in mostly French philosophy that involve reactions to Heidegger (such as Derrida, but not only him). Since phenomenology, as it began with Husserl, has much in common with the origins of mid-20th-century analytic philosophy in Frege, there is, shall we say, a certain irony in demarcating the philosophical terrain this way, but it is especially ludicrous to denominate phenomenology-plus-poststructuralism "Continental" given that it effectively excludes the Frankfurt School, Marxism, German Idealism, and Nietzsche from the Continentalist camp. (Of course, that is not how the Party Line Continentalists understand what's going on here, but this is at least partly because their command of the history of European philosophy after Kant is often quite weak and idiosyncratic.)Party Line Continentalists are very exercised about the fact that there are philosophical scholars of the Continental traditions who treat the figures of post-Kantian European philosophy as philosophers, without reading them through the lens and the methods of Heidegger and/or post-structuralism. Heidegger and (most) of the post-structuralists (Deleuze is an exception) were not, however, very good scholars or philosophical expositors, so it is not surprising that those with real training in philosophy and its history would not read the great figures of the Continental traditions in accord with the Party Line.
Wednesday, December 30, 2009
Tuesday, December 29, 2009
Last week, PolitiFact.com announced its “Lie of the Year”: Sarah Palin’s claim that the health care bill might create “death panels” that would kill elderly or disabled Americans. It was a lie, the editors pointed out, because Palin’s claim was based on a mangling (by Michele Bachmann) of false claims by Betsey McCaughey — that the bill would mandate end-of-life counseling, and that rationing would deny care based on “level of productivity in society.” That phrase was Palin’s invention.
Palin responded to the PolitiFact article with a post on her Facebook page, claiming that, actually, the CBO’s assessment that it would be tough to cut the rate of increase in Medicare is the sort of thing she had been talking about all along. That’s obviously not true. But political reporters are taking note, filing stories about what Palin wrote that don’t add much more context. I really think this is a humiliating exercise.
The problem is that Palin has put the political press in a submissive position, one in which the only information it prints about her comes from prepared statements or from Q&As with friendly interviewers. This isn’t something most politicians get away with, or would be allowed to get away with. But Palin has leveraged her celebrity — her ability to get ratings, the ardor of her fans and the bitterness of her critics — to win a truly unique relationship with the press. She is allowed to shape the public debate without actually engaging in it.
Let’s take the example of her “feud” with Al Gore. Palin’s name appeared on a Dec. 9 op-ed in The Washington Post, calling on President Obama to boycott the Copenhagen climate talks because of the “fraudulent scientific practices” of climate scientists. The next day, Andrea Mitchell interviewed Al Gore, author of a new book on scientific responses to climate change, and her very first question was about … Palin’s op-ed. When Gore answered with a blanket response to “global warming deniers,” Mitchell responded by quoting Palin again: “One of the things that she has written recently on Facebook is that this is doomsday scare tactics pushed by an environmental priesthood that makes the public feel like owning an SUV is a sin against the planet.” Gore parried again, and moved on.
Palin responded to this with, yes, another Facebook post, one that was dutifully read aloud and reprinted. “He’s wrong in calling me a ‘denier,” she wrote, even though Gore had rather adroitly shifted the question from Palin — whom reporters care about — to the rather large population of “global warming deniers,” whom he cares about.
In this Politico write-up of the “feud,” Andy Barr posted most of Palin’s response without any kind of fact-check about her claims. That’s not Barr’s fault. The problem is with how Palin chose to engage the media. While Gore submitted to an interview, on camera, Palin lent her name to a Facebook post. I say “lent her name” because there is really no way of telling if Palin wrote the post — that’s probably the biggest problem with the way Palin is using the media here, and the reason I choose not to engage with this stuff. When the Gore “feud” really heated up, Laura Ingraham asked Palin whether she’d debate the former vice president on climate change. Among climate change skeptics, Gore’s unwillingness to face someone like Lord Monckton in a public debate is a burning issue, presented as evidence that Gore can’t handle criticism. When Ingraham posed the question, however, Palin rambled for a bit about how the format might bias Gore’s “friends” against “reasonable voices.” This was more than good enough for Ingraham.
INGRAHAM: But what if it’s an Oxford-style, proper debate format. I mean, he’s going to chicken out. I mean, if you challenge him to a debate, do you actually think he would accept it?
PALIN: I don’t know, I don’t know. Oh, he wouldn’t want to lower himself, I think, to, you know, my level to debate little old Sarah Palin from Wasilla.
So: Palin, having declined to engage Gore in any real-time discussion of climate change — having instead hid behind, basically, press releases — argued that Gore wouldn’t debate her anyway because he’s either a chicken or because he’s an elitist who looks down on her.
I think what Palin’s doing here is incredibly savvy. She knows that anything that goes out under her name will be accepted as fact by conservatives — “Going Rogue” was a 400-page exercise in score-settling that identified, for Palin fans, everyone who ever did her wrong. And she knows that liberals despise her and will pick apart everything that goes out under her name. It was liberals, after all, who obsessed over the “death panel” claim, because for whatever reason they thought it was vitally important to prove that Palin was misleading people about what was in the health care bill.
At the same time, I think that the media’s indulgence of Palin’s strategy — which often results in pure stenography of press releases that may or may not have been written by her — is ridiculous, bordering on pathetic.
Monday, December 28, 2009
By Valerie Baldowski
The Henry County Democratic Party turned its December meeting into a holiday fund-raiser.
The group recently held a Henry County Democratic Christmas Party at the historic Hazlehurst House in McDonough. The Democratic Party raised more than $2,000 during the event, according to party member, Jim Nichols.
Guest speakers at the event included a number of candidates for state and federal office.
Nichols said President Barack Obama has brought new energy to the Democrat Party, on a national level, and that the energy may translate into successes for Democrats in 2010 elections.
“Along with that brings an opportunity for a new group of leaders and activists to arise at the local level, who can bring in new energy and ideas to the Democratic Party,” he said.
Nichols said Henry Democrats have a number of goals for 2010.
“We hope to elect a new chairman and vice chairman in January, and begin a very important election year,” he said.
Robert Abercrombie, the former chairman, announced his resignation in October due to increased career responsibilities. Former Vice Chairman Christie Jean-Baptiste announced her resignation in November, due to a job offer in Washington, D.C.
The elections to replace both are expected to be held during the group’s Jan. 26 meeting, said Nichols.
Democrats in Henry face a number of challenges as well as opportunities, he continued.
“I believe the Democratic Party has let down the citizens of this state for a number of years, and has needed to get its act together,” said Nichols. “Democrats bring together a much larger tent of ideas and policy preferences — just look at the health-care debate — which means we struggle from time to time staying organized and effective as a party.”
Other goals for next year include expanding the group’s membership, training volunteers to work on campaigns, and assisting statewide Democratic candidates in their efforts to reach residents in Henry County, said Nichols.
show details Dec 22 (6 days ago)
1. How much was raised?
We brought in over $2000 but I'm not sure what the total raised ended up being.
We hope to elect a new Chair and Vice-Chair in January and begin a very important election year. Expanding our membership, training volunteers to work on campaigns, identifying candidates to run in local elections, and assisting state-wide Democratic candidates in their efforts to reach out to citizens in Henry County.
3. What were the highlights of the event? Did all the expected speakers show up? Tell me who was there besides Gail Buckner.
U.S. Senate Candidate R.J. Hadley
Candidate for Governor David Poythress
Secretary of State Candidates: Gail Buckner and Gary Horlacher
State School Superintendent candidates: Dr. Beth Farokhi and Brian Westlake
4. What challenges do the Henry County Democrats face next year?
Speaking for myself, as one voice on the County Committee, I believe the Democratic
Party has let down the citizens of this state for a number of years and has needed to get its act together. Democrats bring together a much larger tent of ideas and policy preferences--just look at the health care debate--which means we struggle from time to time staying organized and effective as a party.
Obama brought new energy to the party nationally and there is a great group of citizens here in Henry who for the past two years have been working to grow our County Committee into a sustainable political entity that can turn things around for us at a local level. Its an exciting time in Henry County politics!
5. What opportunities do you see for the group in 2010?
There are a number of important elections coming up this year, and along with that brings an opportunity for a new group of leaders and activists to arise at the local level who can bring in new energy and ideas to the Democratic Party.
The elections will be held at the January County Committee Meeting (4th Tuesday of every month). Robert announced he was stepping down at the October meeting, and Christie Jean-Baptiste announced at the November meeting she was as well. Both left because of career opportunities--Robert got a promotion at the Fulton County Sheriffs department and Christie got a job in Washington D.C.
The Islamic regime in Tehran on Monday increased pressure on Mir-Hossein Moussavi, the opposition leader, arresting three of his senior aides a day after his nephew was killed
The head of Mr Moussavi’s election campaign, the head of his office and one of his senior advisers were detained. No official reason for their detention was given.
Ibrahim Yazdi, the head of Freedom Movement of Iran, a religious nationalist party, and some reform-minded clerics in the holy city of Qom, have also been arrested.
The latest arrests, numbering at least seven, followed Sunday’s protests, the biggest to take place in Iran in six months, which left five people dead and led to more than 300 detentions. Unofficial reports said 10 people had died.
Ahmad Khatami, a leader of Friday prayers in Tehran who is close to the elite Revolutionary Guards, called on the judiciary on Monday to “deal with” the opposition leaders “as soon as possible”.
Sunday’s protests used the Shia holiday of Ashura to rally hundreds of thousands into the streets to protest against the regime.
State television late on Sunday said Mr Moussavi’s nephew had been killed by “unknown assailants”. But it denied reports that security forces had killed any protesters, according to Reuters.
The marches on Sunday marked the biggest show of strength by the opposition since June 20, when at least 10 people were killed by the security forces.
Reformists seized on the turnout as a sign of a potential turning point in their struggle against the regime.
The “fight against the regime has become part of people’s daily life and Sunday’s rally showed the peaceful protests are getting out of control”, said one reformist. “Even the opposition leaders might not be able to curb these rallies any more,” he added.
The opposition has gained new momentum since the December 20 death of Grand Ayatollah Hossein-Ali Montazeri, the most senior dissident cleric. His death from natural causes fuelled another round of protests and led to demonstrations in Tehran, the holy city of Qom, Isfahan and Najafabad, his birthplace which is close to Isfahan.
Unofficial, or “shadow”, economies can help shield European countries during a recession – but illicit activity has to be on a sizeable scale, according to report by Germany’s Deutsche Bank.
Countries with a high prevalence of moonlighting builders, unrecorded cash transactions, missing invoices, tax evasion or illegal activities such as drug dealing, have seen smaller contractions during Europe’s worst downturn since the 1930s than more honest neighbours, researchers at the Frankfurt-based bank have concluded.
The relationship works, however, only if the “shadow economy” is large – such as in Greece, where George Papandreou, prime minister, acknowledged this month that the public services are riddled with corruption.
In spite of its growing fiscal problems, Greece’s economy has shrunk only about 1 per cent this year – compared with about 4 per cent for the European Union as a whole.
At the other extreme, Deutsche Bank found that countries with a “particularly honest” population – such as Austria, France or the Netherlands had also fared relatively well during the crisis.
Indicating that its research was not to be taken entirely seriously, Deutsche Bank said the countries faring worst included Germany where inhabitants “are neither impeccably honest in their work ethic, like the Austrians, nor do they expend so much effort in circumventing the state as, for instance, the Greeks”.
Measured against what different groups of voters thought he had promised – everything they desired – the administration’s performance looks poor. Measured against what voters were entitled to expect, it looks much better.
A year ago, the US feared a catastrophic economic collapse. The recession has been bad and the recovery is sluggish, but it could have been much worse. This is partly due to good luck and the economy’s resilience, but also to the fiscal stimulus and bold interventions of the administration and the Fed. One can argue about those policies. Still, a year ago, the country would have settled happily for the outcome so far.
Mr Obama’s other key domestic priority was healthcare reform. After months of wrangling, this is not quite in the bag. But the prospects look good. Reform along the lines of the bill passed by the Senate just before Christmas would be a great step forward. Again, one can argue about the details. But an individual health insurance mandate combined with the assurance of access to affordable coverage is a historic change – and despite the problems that will follow, far better than the status quo. How much credit Mr Obama deserves is debatable. Congress is writing this law, not the White House. Never mind: history will count it among his victories.
Foreign policy saw the biggest gap between expectations and any real likelihood of success. Foreigners and Americans naively thought the world would submit to Mr Obama’s charm. It did not. Yes, he brought US diplomacy back from the dead – but diplomacy is a means to an end, not an end in itself. It must be admitted that the rewards for Mr Obama’s outreach on China, Iran and the Middle East have been meagre at best. Yet this was more because the issues are so difficult, and US power so constrained, than because the approach was wrong.
Afghanistan underlines the point. The US had no easy choices. Mr Obama took too long to make up his mind, and muddled the message by talking of an early withdrawal – but in the end did the right thing in committing more forces to the war. The alternatives were worse.
Earlier this month Mr Obama said he thought his first year rated “a solid B plus”. My colleague Edward Luce commented that this was a perhaps a plus too far. I think that is right. I give a B as well. That is a letdown if you were hoping for summa cum laude, but still.
Sunday, December 27, 2009
As a relatively new phenomenon in the crowded arena of journalists whose specialty it is to report the news of the catwalks, fashion bloggers have ascended from the nosebleed seats to the front row with such alacrity that a long-held social code among editors, one that prizes position and experience above outward displays of ambition or enjoyment, has practically been obliterated. After all, what is one to think — besides publicity stunt — when Bryan Boy, a pseudonymous, style-obsessed blogger from the Philippines, is seated at the D & G show in Milan between the august front-row fixtures of Vogue and Vanity Fair, a mere two positions to the right of Anna Wintour?
“There has been a complete change this year,” said Kelly Cutrone, who has been organizing fashion shows since 1987. “Do I think, as a publicist, that I now have to have my eye on some kid who’s writing a blog in Oklahoma as much as I do on an editor from Vogue? Absolutely. Because once they write something on the Internet, it’s never coming down. And it’s the first thing a designer is going to see.”
Wednesday, December 23, 2009
When it was announced two months ago that GDP had grown by 3.5 percent in the third quarter of this year, it took the sails out of any movement toward another stimulus package. Now the number has been revised downward to 2.2 percent.
At a growth rate of 3.5 percent, the economy would be growing slightly faster than the long-run trend so that, although progress would be very, very slow, the economy would at least be catching up to the long-run trend (in the recovery from previous recessions, it was not unusual for GDP to grow at 6 or 7 percent, but even at those high growth rates the recovery takes time). At a growth rate of 2.2 percent, the economy is not even treading water let alone making up for past losses.
The economy needs more help, but they way in which the GDP numbers arrived, with the 3.5 percent initial figure heralded as the sign that better times were just around the corner, undermined the case for a new fiscal stimulus package and likely caused the Fed to back off of any further plans it might have had to do more to help the economy recover. Now we know the 3.5 percent figure was overly optimistic, but two months have passed and any momentum towards providing additional stimulus has largely faded from discussion.
This points to the fact that policymakers need better and more timely data. The fourth quarter is almost over yet we are still trying to figure out what happened in the third quarter, and we still don't know for sure. There has been lots of criticism of how policymakers have reacted in this recession, much of it deserved, but little of that discussion has recognized the data problems. I don't know for sure what the problems are in collecting data in nearly real time, or if data collection can be improved, but it seems we can do better in the digital age sand it would certainly be worthwhile for Congress to look into this carefully and see if some investment into data collection would be helpful. If we can give policymakers better and more timely guidance about the state of the economy, it could improve policy considerably, and that would be money well spent.
In any case, let me say one more time as loudly as I can that given the data that we do have, it's clear that the economy -- the labor market in particular -- needs more help.
Karen Handel Resignation
December 22, 2009 (Campaign HQ - Atlanta, GA) - The following official statement by the Mills "for a new way forward" campaign addresses today's resignation of current Secretary of State Karen Handel.
"We commend Secretary of State Karen Handel's decision to resign her current office to seek the Republican nomination for Governor of Georgia. Elected officials must begin to place the interest of our citizens first, and not their own, at a time of mounting deficits, growing unemployment and uncertain futures.
The decision also calls to an end one of the most partisan and draconian Secretary of State administrations in the history of Georgia, twice rebuked by the United States Justice Department for illegally blocking access to the ballot box for eligible citizens.
My campaign is based upon the notion of "a new way forward in Georgia," which means exciting and empowering citizens to participate in the civic process while creating a government that works for them. The next Secretary of State must understand the role and power of an office that touches every facet of our lives. And live up to the expectations of Georgians by creating an administration that:
It is with this spirit and commitment to moving Georgia forward in mind, that we call upon Governor Sonny Perdue to put people, and not politics first. The citizens of Georgia are watching and hoping that their leaders will get beyond rhetoric and partisanship, focusing instead on voters and the myriad issues they face. The governor must appoint someone who will remove partisanship from elections and balance the interests of consumers and businesses through the various divisions within the office.
Visit Michael's site for more information on the campaign, his experience and vision for moving Georgia forward..
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On the first day of Christmas UPS gave to me... A PDU thats not set up.
On the second day of Christmas UPS gave to me... 2 bitching supervisors & a..
On the third day of Christmas UPS gave to me.... 3 trucks I'm loading...
On the fourth day of Christmas UPS gave to me... 4 leaking packages...
On the fifth day of Christmas UPS gave to me.... 5 safe work methods...
On the sixth day of Christmas UPS gave to me.... 6 early AM packages...
On the seventh day of Christmas UPS gave to me... 7 safe work methods...
On the eighth day of Christmas UPS gave to me 8 late air trailers...
On the ninth day of Christmas UPS gave to me... 9 misloads yesterday...
On the tenth day of Christmas UPS gave to me... 10 points of commentary...
On the eleventh day of Christmas UPS gave to me... 11 angry drivers...
On the twelfth day of Christmas UPS gave to me... 12 bumps and bruises
Scott Sumner on the efficacy of monetary policy even when the policy interest rate hit zero:Zero rates don’t really make monetary policy more difficult, they make interest rate-oriented monetary policy more difficult... Permanent QE is just as effective as ever. Exchange rate depreciation is just as effective as ever, inflation targeting is just as effective as ever, NGDP targeting is just as effective as ever, commodity price targeting is just as effective as ever.The strangest thing is that Ben Bernanke agrees with Sumner on this point. Just today we learn of his written reply to a Brad DeLong question on why the Fed has not adopted an explicit 3% inflation target (something that would have done wonders to prevent the great nominal spending crash of late 2008, early 2009):...The Federal Reserve has not followed the suggestion of some that it pursue a monetary policy strategy aimed at pushing up longer-run inflation expectations. In theory, such an approach could reduce real interest rates and so stimulate spending and output. However, that theoretical argument ignores the risk that such a policy could cause the public to lose confidence in the central bank’s willingness to resist further upward shifts in inflation, and so undermine the effectiveness of monetary policy going forward. The anchoring of inflation expectations is a hard-won success that has been achieved over the course of three decades, and this stability cannot be taken for granted. Therefore, the Federal Reserve’s policy actions as well as its communications have been aimed at keeping inflation expectations firmly anchored. [Emphasis added]So Bernanke agrees with Sumner in principle but is afraid of inflation expectations becoming unmoored. A look at the average 10-year inflation forecast from the Survey of Professional Forecasters says Bernanke should not be worried about inflation expectations. They have been anchored relatively well since 1997 around 2.5 percent:Too bad Paul Krugman was not beating his influential drum with a message of inflation targeting--or in my dream world nominal income targeting--over the past year or so. Maybe others would have joined in and forced Bernanke and the Fed to think more about this option. Krugman admitted recently it would have been the first-best economic solution to the current crisis, but avoided doing so because he thought it would be a second-best political solution. (He thought expansionary fiscal policy would be more politically feasible.) Even if Krugman and other observers have been pushing the unconventional monetary policy message more forcefully over the past year, it is still not clear the Fed would have responded. David Wessel in his new book reports that Bernanke came into the Fed wanting to target inflation. He faced, however, strong opposition and (unlike his predecessor) wanted to be a consensus builder at the Fed. He did not want to force his hand on the FOMC. Update: Scott Sumner, Brad DeLong, Free Exchange, and Will Wilkinson comment on Bernanke's response.
While Brooks creative friends may have enough power to control the government in the United States and therefore use its policy power to break into dorm rooms and take the other steps necessary to impose his intellectual property claims, they don't have this power in China and other countries. Why on earth would China, India and the rest of the world pay Brooks' creative friends for their intellectual "property" when they can just have the knowledge for free. We don't have the economic or military power to force our protectionism on China and probably soon India, so I guess we'll have to rely on the moral force of Brooks' arguments.
For two or three hundred years, beginning at the start of the fifth century, the economy of Britain reverted to levels not experienced since well before the Roman invasion of AD 43. The most startling features of the fifth-century crash are its suddenness and its scale. We might not be surprised if, on leaving the empire, Britain had reverted to an economy similar to that which it had enjoyed in the immediately pre-Roman Iron Age. But southern Britain just before the Roman invasion was a considerably more sophisticated place economically than Britain in the fifth and sixth centuries: it had a native silver coinage; pottery industries that produced wheel-turned vessels and sold them widely; and even the beginnings of settlements recognisable as towns. Nothing of the kind existed in the fifth and sixth centuries; and it was only really in the eighth century that the British economy crawled back to the levels it had already reached before Emperor Claudius’s invasion. It is impossible to say with any confidence when Britain finally returned to levels of economic complexity comparable to those of the highest point of Roman times, but it might be as late as around the year 1000 or 1100. If so, the post-Roman recession lasted for 600-700 years.
We can take some cheer from this sad story – so far our own problems pale into insignificance. But Schadenfreude is never a very satisfying emotion, and in this case it would be decidedly misplaced. The reason the Romano-British economy collapsed so dramatically should give us pause for thought. Almost certainly the suddenness and the catastrophic scale of the crash were caused by the levels of sophistication and specialisation reached by the economy in Roman times. The Romano-British population had grown used to buying their pottery, nails, and other basic goods from specialist producers, based often many miles away, and these producers in their turn relied on widespread markets to sustain their specialised production. When insecurity came in the fifth century, this impressive house of cards collapsed, leaving a population without the goods they wanted and without the skills and infrastructure needed to produce them locally. It took centuries to reconstruct networks of specialisation and exchange comparable to those of the Roman period.
The more complex an economy is, the more fragile it is, and the more cataclysmic its disintegration can be. Our economy is, of course, in a different league of complexity to that of Roman Britain. Our pottery and metal goods are likely to have been made, not many miles away, but on the other side of the globe, while our main medium of exchange is electronic, and sometimes based on smoke and mirrors. If our economy ever truly collapses, the consequences will make fifth-century Britain seem like a picnic.
To understand “market sentiment”, one has to go back to two ideas in the minds of most financial analysts which almost unconsciously shape their arguments. The first is the belief that economies are always at full employment. The second is the belief that even if they are not (obviously contradicting the first), they very soon would be if only governments would stop bailing them out.
The first is perhaps the most pervasive. It takes the form of denying that there is an output gap. That is, at all points in time output is no more or less than what the economy is able to produce. If this is so, government attempts to close an imaginary output gap by running a deficit will either take money better spent by the private sector or be inflationary. (Output-gap deniers always see the microbe of inflation in the air.) Either way deficits are bad, which is why “fiscal consolidation” needs to happen immediately. In the early days of the crisis this deep theoretical commitment to the existence of continuous full employment was temporarily overcome by common sense. But as the fear of apocalypse receded normal intellectual service was resumed.
The more cautious version of “output gap denial” is the view that the pre-crisis level of output was the result of bank-financed debt, and that much of it went for good with the credit crunch. Public finances cannot rely on a recovery of output to produce a stream of revenue to reduce the deficit because – wait for it – there is little or no output to be recovered.
Even the normally sober Martin Wolf has fallen for this line (FT, December 16 2009). The pre-crisis UK economy, he says, was a “bubble economy”. The bubble made UK output seem larger than it actually was! This is old-fashioned Puritanism: the boom was the illusion, the slump is the return of reality. However, experience of past recessions suggests that, once the corner is turned, output recovers vigorously from slump conditions (as do prices). Between 1933 and 1937 the UK economy expanded by 4 per cent a year, much higher than its “trend” rate of growth. Yet in 1931 orthodox economists were denying there was an output gap at the bottom of the greatest depression in history.
The second theoretical commitment of most financial analysts is that economies, if disturbed, revert quickly back to full employment if not further deranged by government actions. Thus contrary to the commonsense view that massive government intervention last autumn stopped the slide down to another Great Depression, the new conservative commentators (having got their breath and confidence back!) now argue that ill-conceived government measures have stopped, or are hindering, the natural recovery mechanisms.
For example, it is argued that massive government borrowing is keeping yields higher than they would otherwise be. Thus government efforts to stimulate spending have the effect only of retarding a natural fall in the rate of interest. If its borrowing is not rapidly reduced there will be a “gilt strike” – investors will demand higher and higher prices for holding government paper. Faced with the evidence that, despite increased government borrowing, gilt yields have been at a historic low, the critics say that this is only because the gilts are being bought by the Bank of England. Once the Bank stops buying government debt, interest rates will shoot up.
A parallel argument is that the expansion of the fiscal deficit is preventing a natural fall in the exchange rate sufficient to boost exports. The tortuous logic seems to be that “fiscal consolidation” will cause the rate of interest to fall and the fall in interest rates will cause the exchange rate to fall, thus increasing the demand for British exports. It is often alleged that something like this happened in 1931 when Britain left the gold standard for the last time.
Empirical evidence supporting the view that cutting the deficit causes the exchange rate to fall is very thin. A 1997 study by the International Monetary Fund showed that in only 14 out of 74 studied instances did fiscal consolidation promote a recovery via a fall in the exchange rate. In all the other cases fiscal policy either had no discernible exchange rate effect or it was the expansion of the deficit that caused the exchange rate to fall.
This only confirms what common sense and elementary Keynesian theory would lead one to expect. In a slump there is no natural tendency for the rate of interest to fall, because people’s desire to hoard money is increasing. So printing enough money to “satisfy the hoarder” is the only way of getting interest rates or the exchange-rate down.
But, of course, there is always “market sentiment” to fall back on. The government must cut its spending now, because this is what “the markets” expect. These are the same markets that so wounded the banking system that it had to be rescued by the taxpayer. They are now demanding fiscal consolidation as the price of their continued support for governments whose fiscal troubles they have largely caused.
Why on earth should we take this market sentiment any more seriously than that which led to the great debauch of 2007? Markets, it is sometimes said, may not know what they are talking about, but governments have no choice but to do what they tell them. This is unacceptable. The duty of governments is to govern in the best interests of the people who elected them not of the City of London. If that means calling the bankers’ bluff, so be it.
Lord Skidelsky is emeritus professor of political economy at the University of Warwick. His latest book ‘Keynes: The Return of the Master’ was published in September
The Senate bill, on track to be passed on Thursday, will have to be merged with the House version in conference committee – sometimes called Congress’s third chamber – and passed again before it can be sent to the president’s desk.
In the Senate, where Democrats and aligned independents have the exact number of votes needed to pass the bill, there is little room for manoeuvre. The final legislation will have to look almost exactly like the Senate version if it is to pass the upper chamber again, an outcome that will leave many liberal representatives disaffected.
“There are going to be a few tweaks but I’m sure it’s going to look like the Senate bill on most issues, especially on the public option and abortion,” said Dean Baker of the Center for Economic and Policy Research. “But there is too much at stake here. This will be a huge achievement.”
Conference committee is likely to begin early next year, with Harry Reid and Nancy Pelosi, the Democrat leaders in the upper and lower chambers, hammering out compromises.
There are substantial differences between the two bills, most significantly on a government-run “public option” healthcare system and on abortion funding.
The House bill creates a public plan that would negotiate rates with doctors and hospitals, directly competing with private insurers, but liberal senators had to drop their hopes for any such plan being included in the upper chamber’s bill.
Instead, the Senate would charge the Office of Personnel Management, which funds health insurance for federal employees, with setting up national plans for individuals and businesses.
On abortion, the House bill would not allow anyone who receives federal subsidies to choose an insurance plan that covered elective abortions. These tough new restrictions are not in the Senate bill, which instead allows states to ban abortion coverage from the new state insurance exchanges.
Centrist senators have already started warning that the final legislation cannot veer too far from the deal painstakingly negotiated by Mr Reid.
“It is very clear that the final bill, to pass in the ... Senate, is going to have to be very close to the bill that has been negotiated here,” said Kent Conrad, Democrat of North Dakota. “Otherwise, you will not get 60 votes in the Senate.”
Ben Nelson of Nebraska, a Democrat who withheld support until he was satisfied on abortion funding, has warned that changes on the issue will cost his vote.
He said: “If there are material changes in that conference report ... I reserve the right to vote against the next cloture vote.”
House Democrats have long known that the Senate vote is more finely balanced than theirs but liberals are increasingly frustrated that the upper chamber has given up on providing a public option and some could put up a strong fight during conference.
Cracks emerged on Tuesday in the alliance on climate change formed at the Copenhagen conference last week, with leading developing countries criticising the resulting accord.
The so-called BASIC countries – Brazil, South Africa, India and China –– backed the accord in a meeting with the US on Friday night, and it was also supported by nearly all other nations at the talks, including all of the biggest emitters.
But on Tuesday the Brazilian government labelled the accord “disappointing” and complained that the financial assistance it contained from rich to poor countries was insufficient.
South Africa also raised objections: Buyelwa Sonjica, the environment minister, called the failure to produce a legally binding agreement “unacceptable”. She said her government had considered leaving the meeting.
“We are not defending this, as I have indicated, for us it is not acceptable, it is definitely not acceptable,” she said.
There was even harsher criticism from Andreas Carlgren, environment minister of Sweden, current holder of the rotating European Union presidency, who proclaimed the Copenhagen accord “a disaster” and “a great failure”.
These responses contrasted with praise of the accord from India and China, and may presage problems for the United Nations in keeping the fragile alliances formed in Copenhagen together. The UN wants to sign a legally binding treaty by the end of 2010, but will struggle if countries repudiate the accord.
However, Todd Stern, US special envoy for climate change, noted that more than 100 countries had backed the accord, including the EU, Australia, Japan, the African Union and the Alliance of Small Island States.
From the inbox:
FOR IMMEDIATE RELEASE - December 22, 2009
Contact: Sen. Gail Buckner 770-473-9039 or 404-932-2427 or firstname.lastname@example.org
SECRETARY OF STATE CANDIDATE GAIL BUCKNER REACTS
TO KAREN HANDEL’S QUITTING ON THE PEOPLE OF GEORGIA
State Sen. Gail Buckner (D-Jonesboro), 2006 Democratic nominee for Georgia Secretary of State, and a candidate for Secretary of State in 2010, released the following statement in response to the resignation announcement of Karen Handel:
“By failing to serve even 75 percent of her four-year term, this is yet another perfect example of how Karen has mishandled the office of Secretary of State. It was obvious in 2006 that she wanted to use the office as a platform from which to run for Governor in 2010. The citizens of Georgia deserved better than having this important constitutional responsibility used as a political stepping stone.
“As I have traveled the state, I have continually heard horror stories over the lack of customer service that citizens have received during Karen’s short time as Secretary of State. People have not been able to work because they could not obtain their professional licenses in a timely fashion. Citizens are asking, ‘Where is the voting paper trail that Karen promised?’
“The office of Secretary of State is extremely important to the daily lives of the citizens of Georgia. We need stability and a leader who will put public service ahead of political ambition.
“I urge Gov. Perdue to refrain from injecting partisan politics into his selection process for appointing a Secretary of State to serve out the remainder of this term. He should appoint someone with the professional experience to address the problems that have plagued this office under Karen Handel. He most definitely should not appoint someone who is an announced candidate for this post, thus elevating that candidate to incumbent status for an advantage in next year’s election.”
Tuesday, December 22, 2009
To say the human being is complex--a rare few of you will understand the core of this assertion--is to dare the impossible task of explaining in one breath what centuries of men (those fellow lost animals) have failed to do in all of their breaths from birth to death.When one acknowledges failure at the outset; one can take enough risks to possibly find one or two interesting things--as one gets lost along the way... "Man is complex?" Yes! And I dare say I don't understand--but here is what I see...
Many progressives are deeply dismayed about the shortcomings of the Senate bill. And they should hold onto that feeling! History suggests that this reform will get much better over time — but only if people keep demanding improvements.
But I think my reaction to the bill’s apparently imminent passage is being shaped, in part, by memories of how it was, not long ago. Five years ago, after the 2004 election, I was devoting most of my efforts to an attempt to stop Social Security privatization. And it seemed likely to be yet another losing battle: all the wise heads, all the makers of conventional wisdom, were sure that Bush was going to get what he wanted, and that people like me were just boorish obstructionists unwilling to embrace change.
But Social Security survived. And here we are now with a reform that, for all its faults, is the biggest expansion of the social safety net since Medicare. That, in my book, counts as a big victory.