USA Today reports that in their survey of economists, the median forecast of peak unemployment for the downturn was 9.8 percent. The economists surveyed have consistently underestimated the severity of the downturn as the article notes in pointing out that their median estimate 3 months ago was 8.8 percent.
At this point, it is almost impossible envision a scenario where the unemployment rate does not cross 10.0 percent. Since we already know the weekly unemployment filings for the last 6 weeks, it is virtually certain that April unemployment will hit 9.0 percent. The economy is still losing jobs at a rate of close to 700,000 per month. It will not stop losing jobs overnight.
Even if the economy, lost no additional jobs between April and the end of the year, then the unemployment rate would still rise to about 9.5 percent by December. If it loses 1.6 million jobs (200,000 per month), then the unemployment rate will be 10.5 percent by December. At this point, this is probably about as optimistic a scenario as can be believed.
It is also worth noting that because the labor force is much older at present than in the early 80's, this implies an unemployment rate that is inflicting far more pain than did the rate at the peak of 1981-82 recession.
Thursday, April 30, 2009
Bomb experts from the California Highway Patrol detonated a mysterious package on the north side of the state Capitol shortly after noon today, after the presence of two mysterious packages disrupted an Assembly floor session today and caused the evacuation of about 100 people from the building.
John Maynard Keynes (1926), "The End of Laissez Faire" http://tinyurl.com/dl20090112ad
Paul Krugman, "Introduction" to John Maynard Keynes, The General Theory of Employment, Interest and Money http://tinyurl.com/dl20090112z
Barry Eichengreen (1996), "Institutions and Economic Growth: Europe Since 1945," in Nicholas Crafts and Gianni Toniolo (eds), Economic Growth in Europe Since 1945 (Cambridge University Press), pp. 38-72 http://tinyurl.com/dl20090112x
Mancur Olson (1996), "The Varieties of Eurosclerosis: The Rise and Decline of Nations Since 1982," in Nicholas Crafts and Gianni Toniolo (eds), Economic Growth in Europe Since 1945, (Cambridge, Cambridge University Press), pp.73-94 http://tinyurl.com/dl20090112x
J. Bradford DeLong (1995), "America’s Only Peacetime Inflation: The 1970s," in Christina Romer and David Romer, eds., Reducing Inflation: Motivation and Strategy (University of Chicago Press), pp.-, http://tinyurl.com/dl20090112v
1.9 But, more to the point, I can quickly think of 16 reasons other than prediction (at least in this bald sense) to build a model. In the space afforded, I cannot discuss all of these, and some have been treated en passant above. But, off the top of my head, and in no particular order, such modeling goals include:
- Explain (very distinct from predict)
- Guide data collection
- Illuminate core dynamics
- Suggest dynamical analogies
- Discover new questions
- Promote a scientific habit of mind
- Bound (bracket) outcomes to plausible ranges
- Illuminate core uncertainties.
- Offer crisis options in near-real time
- Demonstrate tradeoffs / suggest efficiencies
- Challenge the robustness of prevailing theory through perturbations
- Expose prevailing wisdom as incompatible with available data
- Train practitioners
- Discipline the policy dialogue
- Educate the general public
Reveal the apparently simple (complex) to be complex (simple)
People who outbid others in auctions sometimes pay too much, a phenomenon known as the winner’s curse. Yet the plan outlined last week by Tim Geithner, US Treasury secretary, for pricing the toxic assets clogging up the financial system provides private investors with an unusually strong incentive to overpay: the government is proposing to pick up most of the tab if the assets turn out to be worth much less than was spent on them. Indeed, the more aggressively investors compete in bidding for these assets, the worse off the taxpayers will be. I call this the taxpayers’ curse.
This is the singularly perverse feature of the Treasury proposal: the greater the competition among the bidders, the worse off the taxpayers and the more distorted the so-called “market” prices that result. More generally, one can work out the amount of price distortion and the expected returns to the taxpayers as a function of the variance in the realised values of the asset and the expected returns demanded by investors. For example, if there are two equally probable outcomes, one 50 per cent above the mean and the other 50 per cent below the mean, taxpayers can expect to lose money unless private investors make more than 180 per cent in expectation.
Some might argue that this is the price we must pay to get the financial system back on its feet but, in my view, it is much too steep. The problem is not merely the size of the bill, which could run into the hundreds of billions of dollars. The real difficulty is that the scheme perpetuates the very practices that got us into this jam in the first place. Over the last several decades, Wall Street wizards have developed products that most people cannot understand, including quite a few players in the financial markets themselves. The result has been mispricing and excessive risk-taking throughout the financial system.
It is truly dismaying that the Obama administration, which publicly champions greater transparency, should put forward a proposal whose main object is to subsidise the banks without appearing to do so. Instead of making the prices of toxic assets more transparent, it is likely to inject a new level of price distortion and uncertainty into the markets, while putting taxpayers at great risk. It may also allow banks to claim that assets remaining on their books after the auction should be priced at the same inflated level as the assets sold off.
Treasury secretary Timothy Geithner's latest bank bailout plan is another Rube Goldberg contraption intended to funnel taxpayer dollars to bankrupt banks, without being overly transparent about the process. The main mechanism is a government guarantee that would allow investors to buy junk with a 12-to-1 leverage ratio, where they only risk the downside on their own investment, not the borrowed money.
Ostensibly, this is supposed to reveal the "true" price for junk assets, as investors compete at auctions to buy assets under the new rules. But this story doesn't pass the laugh test. All we will really learn is what price investors are willing to pay for these junk assets when they are given a large subsidy from the government to buy them. In reality, this plan is a way to use taxpayer dollars to get investors to pay far more than these assets are worth in order to give more money to bankrupt banks.
The results will be mixed. Some of the assets undoubtedly have some value. There are, no doubt, shrewd investors who have identified certain assets that they would have been willing to buy from the banks, but instead put off purchasing while they waited for a deal like this. Now these investors will have the opportunity to buy these assets with large subsidies from the government, allowing them to make substantial profits. (It's not clear if President Obama will want to invite this new group of hedge fund billionaires, who got rich off this government programme, for photo ops in the White House Rose Garden.)
A second outcome is that many investors will see the subsidy and decide to dive in, recognising that most of any potential loss will be borne by the government. This route might prove especially attractive for one of the zombie banks, which would effectively have nothing to lose anyhow, since they are already bankrupt. In these cases, the government can expect to take substantial hits, since the investors would bid more than the assets are worth - and the government would be stuck with the eventual loss.
A third result of this path is that the subsidised class of assets would rise in value relative to assets that do not benefit from the government subsidy. This could cause banks that are relatively healthy, and therefore not taking part in this programme, to suffer. With investors opting to buy assets that come with government subsidies, the demand for mortgages or mortgage-backed securities that don't have these subsidies might suffer.
A fourth likely outcome is that even with the subsidies, much of the toxic waste would stay on the banks' books. There is a large gap between the price that investors have been willing to pay for these junk assets - which has been around 30 cents on the dollar - and the price that banks list on their books, which has been 60 cents on the dollar. If the government subsidies raise the price that investors are willing to pay by 50% (a very large increase), then the banks would still have to write down these assets by another 15 cents on the dollar in order to make the sale.
It is likely that the gap between the asking price and the offer will not be closed for a large portion of these assets, even with the government subsidy. As a result, the banks are likely to have several hundred billion dollars' worth of bad assets on their books even after this plan has been put in place. The Obama administration will then be forced to go to Congress with yet another bailout proposal.
It is also worth noting that this is a situation that invites all manner of fraud, since there are very large government subsidies that could be appropriated through clever schemes. The Obama administration assured the public that the Federal Deposit Insurance Corporation (FDIC) will be closely monitoring the programme, but the FDIC does not have the staff or the expertise to effectively track a programme of this size. The situation is complicated further by the fact that many of the big actors are likely to be hedge funds and private equity funds, which are almost completely unregulated in the current environment.
It is hard to understand this plan as anything other than a last-ditch effort to save the Wall Street banks. Unfortunately, Obama seems prepared to risk his presidency on their behalf.
"But if a new survey by the New York Times is accurate, the president and some of his policies are significantly less popular with white Americans than with black Americans, and his sky-high ratings among African-Americans make some of his positions appear a bit more popular overall than they actually are."
now read it again...
"But if a new survey by the New York Times is accurate, the president and some of his policies are significantly less popular with white Americans than with black Americans, and his sky-high ratings among African-Americans make some of his positions appear a bit more popular overall than they actually are."
Its from an article in the Washington Examiner, The black-white divide in Obama's popularity by Byron York which talks about Obama's popularity using a recent NYT's poll and how these numbers divide along race.
Brad Delong comments:
For York, "actually" means "what white people think."
Why oh why can't we have a better press corps?
For crying out loud, what the hell does that mean, exactly? I read the rest of the piece, hoping to see York explain why the president's seemingly popular positions are exaggerated or inflated. Why, in other words, these positions "appear" more popular "than they actually are."
But all the piece tells me is that African Americans tend to support Obama in greater numbers than white Americans.
The problem, of course, is that damn phrase "than they actually are." York argues that we can see polls gauging public opinion, but if we want to really understand the popularity of the president's positions, and not be fooled by "appearances," then we have to exclude black people.
There's really no other credible way to read this. York effectively argues that black people shouldn't count. We can look at polls measuring the attitudes of Americans, but if we want to see the truth -- appreciate the numbers as "they actually are" -- then it's best if we focus our attention on white people, and only white people.
Adam Serwer added, "This is another example of a really bizarre genre of conservative writing, which I call 'If Only Those People Weren't Here.'"
This is unacceptable.
Yglesias shrewdly points out that
Byron York has identified an important problem in our system of measuring public opinion, just the sort of thing that inspired the noble Framers of our constitution to wisely implement the three fifths compromise:
I don't think the guy is racist (how would I know?) in fact looking at a lot of studies on race I can make the case (and do so quite often) that we are all racist at the subconscious first impulse-level--at least thats what the empirical studies I've seen tend to show; so maybe he just didn't reread his work, which I'm famous for (sadly) myself. So I'm not trying to play pin the tail on the racist here. But a writers words can say something more than just about the writer themselves. I do think it speaks to something about our culture at a deeper level and maybe thats just me... and maybe its just living in the south, therefore I think there is something to Delong's point putting all ad hom's aside for the moment.
I'm going at this along the lines of how intriguing it is to me that discussions on a local right wing email newsletter that I read spent a far more substantial amount of time talking about race and racism than any of my discussions and activities within the Obama effort or interactions within the african american community this past year and a half. By a long shot.
In his retort at being called a racist York says,
Maybe "across-the-board" would have been better than "overall," but I doubt that would have kept a left-wing activist like Matthew Yglesias, or Andrew Sullivan, who has himself been accused of racism and, quite recently, anti-Semitism, from branding me a racist.
First, he said, "if a new survey by the New York Times is accurate..." which one one assume means--properly weighted, without leading questions--then there is no need for demographic slicing and dicing that York does in his response. He's back tracking. And more importantly, is Andrew Sullivan really a left-wing activist? Did I miss something?
***[Also let it be known to the world that one day I may (already have?) write something that is just plain wrong and/or doesn't read the way it was intended. May the writing gods please not strike me down for posting on this quote....]
I was reading, The Secret History of the Dismal Science. Part I. Economics, Religion and Race in the 19th Century, and I come across this:
In the fight against slavery, Christian evangelicals such as William Wilberforce and Thomas Macaulay were joined by political economists, such as James Mill, Harriet Martineau, J. S. Mill, Archbishop Richard Whately and John Bright. The two sides agreed that slavery was wrong because Africans are humans, and all humans have the same rights. They however disagreed over exactly what it is that ties us together. The economists drew on their assumption that deep down, we all share the same basic human nature. The evangelicals drew on their assumption that we are literally all brothers and sisters since we share the same first parents, Adam and Eve.
Is it really so hard to come up with a frame that see's these two explanations of how we are tied together as the same thing, from a different perspective--as opposed to a disagreement?
Was someone playing politics?
So why did defense spending increase rapidly in the second half of last year? One thought is that this had something to do with the election: a big boost in military spending will temporarily boost GDP and make the incumbent party look good, or at least better than it otherwise would.
I just glanced at this so I don't know if these numbers are legit. But there are some political science theories dealing with electoral politics that talk about the election cycles and economic policy overlap. I forget what the concept is called though...
Public health has five main advantages over economics when it comes to fighting potential pandemics:
1. We take public health professionals very seriously. In part this reflects the big progress of medical knowledge over the past century — doctors know much more about preventing death than they did in the 1930s.
The progress made by economists over the same time span, for example in terms of thinking about how to prevent worldwide economic depression, is much less impressive. (Judge for yourself: Here’s a recent speech on this topic by Christina Romer, head of the president’s Council of Economic Advisers; her modesty is persuasive.)
2. Public health officials have really figured out the public communication part of their work (e.g., look at the government’s integrated Web site on pandemic flu). They need to tell us there is an issue and to raise our awareness, without creating a panic; and, if things get worse, they need to inform us how best to adjust our behavior. Look at the mainstream news media over the past week — full of stories aimed at getting your attention without creating inappropriate levels of fear.
Contrast this with how former Treasury Secretary Henry M. Paulson Jr. communicated with Congress and the country back in September 2008; we jumped from complacency to pervasive financial fear overnight. And try to find an integrated crisis response Web page for the United States and the global financial situation even today — start with Treasury or the International Monetary Fund, and good luck!
3. The underlying message from public health, of course, is quite different from what the supervisors of our financial system like to convey. Public health officials and doctors tell us that we are potentially vulnerable and we need to be vigilant.
Financial officials, in contrast, feel that any sense of uncertainty will immediately lead to self-fulfilling panic (e.g., see the G-20’s most recent communiqué). This is exactly the wrong attitude — what really causes panic is the sense that officials have been blindsided and the government has no ready responses in hand.
- 4. The public health system drills constantly to deal with crises. To be sure, the level of preparation has increased since 9/11, but there is a much longer-standing tradition of practicing through “war game”-type simulations, including involving actual hospitals and other key parts of both the hard logistics and soft communications system. Bad things can still happen, but these people are seriously prepared.
In contrast, try suggesting to finance ministry or central bank types that we should work to forestall financial pandemics in a similar fashion; they will look at you with great suspicion (yes, I’ve tried this) — in their minds, publicly preparing for the worst is tantamount to fomenting panic.
5. The biggest issue, of course, is that pre-emptively organizing for and dealing with health pandemics does nothing to ruffle the feathers of powerful interests in the health sector, be it doctors, health care providers, insurers or drug companies. They have built a system that derives its value partly from our being (appropriately, for the most part) worried.
In contrast, while finance talks a lot about risk, those involved in it have tried to create the impression that they understand and can manage risks — so, for a (modest?) fee, you don’t have anything to worry about. This, it turns out, is incorrect.
Before the germ theory of disease, public health officials made a great deal of progress containing epidemic outbreaks.
But they also made some spectacular and horribly costly mistakes, for example with regard to cholera or malaria or yellow fever in the 19th century. Over the last 100 years, medical advances mean that the profession can quickly figure out a great deal about even something as difficult as a new virus. Public health will slow down disease spread; big investments in medical technology pay off (hopefully) with cures and vaccines. Nothing is perfect and everything can always get better, but this works.
Where is economics, relatively speaking?
We recognize an insolvent bank when we see one, sometimes. But can we prevent major bank-type institutions from failing, can we stop such failures from cascading through the global financial system, and can we be sure that such panics will not push the global economy into deep and prolonged recession?
Experience from the past two years surely teaches us that economics is in a position similar to that of medicine before the germ theory of disease, and we should plan accordingly.
Also if you haven't read Johnson's piece in the Atlantic, The Quiet Coup, you need to. Its on our new economic oligarchy and the IMF solution out of our crisis
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
One of Obama's comments at the town hall rang very true to me...
“It’s not like anybody should be surprised, we’re doing what we said we’d do.”
And Timothy Egan nails it down:
Those who speak for what is left of the Republican Party diminish their ranks every time they do. On Rove’s advice, they killed stimulus money for fighting pandemics like swine flu. They still follow the post-bunker missives of Dick Cheney, who has as much credibility on competent governing as the Octomom has on birth control.
And now there is the exquisite irony that nearly half the Republicans in the only big state left in the Party of Lincoln – Texas – say they favor seceding from the Union. So much for America first.
No doubt, 38 percent of Americans are still conservative, as they’ve been for the last 20 years. But a good portion of them are no longer Republican.
They are parked, for now, in a lane of open-mindedness, along with the 75 percent of Americans who see Obama as a “strong leader.” If their president also happens to be a liberal, they don’t care – so long as he succeeds.
Or am I delighted to finally have issues of substance articulated by a president (even when I don't agree with him).
Obama in NYT's magazine
Also whats the deal with the, "yeah, he gives a good speech... but" meme? Seriously? Isn't the president supposed to be able to communicate with the public, inspire them, lead them? Granted he still gets under my skin from time to time but isn't this a good thing?
That is unless he's pushing policies you spent years trying to beat back... but thats a different story. Obama ain't exactly "Left", but he's better than nothing...
We learned today that the economy contracted far more than expected--6.1% on annualized basis versus and expected 4.6%-- in the first quarter of 2009. While some observers find this continued plunge troubling, others like Jim Hamilton and Calculated Risk find some comfort that the underlying numbers are moving in a manner consistent with the economy reaching a bottom. Specifically, they note that historically consumption starts to recover in the later part of the recession even as nonresidential investment is falling--something that happened this past quarter. I hope their assessment is correct.
There are, however, reasons to be cautious. First, it may be asking too much to use past U.S. historical patterns to infer what is happening today with the U.S. economy. This is because the current recession, unlike many of the past ones, is truly global in nature and is far more pronounced than any other post-World War II global recession. Given that there are still many problems with the global economy--banking problems in Western Europe, collapse of global trade, large output gap in global economy, China's discomfort with holding dollar reserves--it would not take much (say a swine-flu pandemic?) to cause further declines in the world economy and , in turn, the U.S. economy. Second, there is still the big bank insolvency problem lurking in the United States. As discussed here and in many other places, the U.S. government has yet to forcefully address this problem. (Though David Leonhardt indicates today there may be progress on this front.) It needs to be done, but at the same restructuring large parts of the banking system--that is making bank creditors take a hit--could create another severe credit crunch. Finally, there is always the chance of a deflationary spiral taking hold in the United States as U.S. domestic demand continues to collapse
Google launched a new search tool yesterday designed to help Web users find public data that is often buried in hard-to-navigate government Web sites.
The tool, called Google Public Data, is the latest in the company's efforts to make information from federal, state and local governments accessible to citizens. It's a goal that many Washington public interest groups and government watchdogs share with President Obama, whose technology advisers are pushing to open up federal data to the public.
The company plans to initially make available U.S. population and unemployment data from the Census Bureau and the Bureau of Labor Statistics, respectively. Other data sets, such as emissions statistics from the Environmental Protection Agency, will roll out in the coming months.
If your competitors don’t face the same restrictions you do, it’s because they didn’t take the same foolish risks you did.
I’ll be the among the first to decry the notion that Washington should be allowed to set pay limits for employees of financial institutions, but I have no sympathy for the employee retention woes facing Morgan Stanley’s John Mack and Bank of America’s Ken Lewis. Why these CEOs would groan about this in public is beyond me, but the following complaint by Mr. Lewis is priceless:
“We have lost strong revenue generators over the past three months to competitors that are not facing the same compensation restrictions that we are,” Lewis said. (source: Bloomberg.com)
Well, Mr. Lewis, if you had foregone massive leverage and run your business properly, then you wouldn’t have needed the TARP and all of the ridiculous, ex-post-facto restrictions that are now causing your revenue generators to take flight. I’m sure you learned somewhere along the line about competition and survival of the fittest. If your competitors don’t face the same restrictions you do, it’s because they didn’t take the same foolish risks you did. No wonder your shareholders want you to split duties with someone else, and you should feel quite lucky to even remain employed at BAC.
The unfortunate thread that links these three vignettes together is a very unhealthy sense of how capitalism is supposed to work in the land that used to be cited as its last bastion. Whether its government intervention in companies like Chrysler and GM, the wails and moans by investors in risky securities, or crybaby capitalists at the financial institutions that cry foul when the taxpayer funds they needed to survive came with strings attached, it seems to me that far too many Americans and the politicians that represent them need to reacquaint themselves with the fundamental laws of economics. The breakout we all need is not seeing the S&P 500 scoot above 900; it lies in escaping the bailout mentality.
With the stock index futures sporting gains of between 1% and 2% for the reasons cited above, the widely anticipated GDP figures for Q1 were released at 8:30 am edt. When it was revealed that real GDP registered a decline of -6.1% versus the -4.7% than had been expected, the S&P futures initially buckled when they saw what looked like a depressing release. One has to look back more than a few decades to see back to back drops in GDP of more than 6%, as well as two consecutive quarterly declines in nominal GDP. But because consumer spending rose and because government outlays inexplicably fell, many economists were quick to hail this negative performance in Q1 as a sign of future strength. BAC-MER economist, David Rosenberg does a nice job of explaining this rationale in the story you see above. Like Mr. Rosenberg, I didn’t see as much to like in this report as the crowd did, but this report kicked off an explosive rally once trading commenced.
The major averages were up 2% to 3% within an hour’s time. They paused as the S&P 500 found resistance at the April 17 high of 875. The ensuing retreat was hard to even notice, thanks, in part, to a pronouncement by former Fed Chairman, Paul Volcker (see above). Since Mr. Volcker is so highly respected, market participants were thrilled to see him opine that the economy is “leveling off”. Had they bothered to drill through the whole story, they would have seen that while Mr. Volcker doesn’t see things getting much worse, he also doesn’t see a return to anything approaching economic growth for quite some time. Stock prices then hovered near their highs until our current Fed Chairman and his FOMC chipped in their own views on the economy at 2:15 pm edt.
The FOMC said it spied signs of economic stability and thus didn’t announce a need to step up their purchases of fixed income securities. This statement was initially received with some disappointment (no expansion in the quantitative easing already under way), but seeing the “stabilization” phrase from another source caused investors to push stocks to new highs with 90 minutes left in the session. Prices wobbled a bit when sources at the White House said Chrysler faced bankruptcy as soon as tomorrow, but the averages finished with the type of healthy gains that have technicians predicting an imminent upside breakout for equities. The Dow, S&P and NASDAQ all logged gains just north of 2%, while the Transports and Russell 2000 both skied nearly 4%. Treasurys were once again quite heavy, with yields rising between 1 and 10 bps. I find it interesting that while bond market participants seemed to notice that inflation actually ticked up to 2.9% in the Q1 GDP report, their equity brethren didn’t let the specter of stagflation bother them one bit. The dollar fell 1% and commodities reacted by rising. The CRB index gained almost 4%.
I might be misinterpreting the following paragraph from the story you see above, and it is possible that the Bloomberg reporter is slanting the story the wrong way, but it is a disconcerting read nonetheless:
“April 29 (Bloomberg) — President Barack Obama aims to announce tomorrow that Chrysler LLC will be placed into Chapter 11 bankruptcy, leading to an alliance with Italian automaker Fiat SpA, people involved in the matter said.” (source: Bloomberg.com)
Since when does a sitting U.S. President place a privately held company into bankruptcy? Yes, this statement might represent a last ditch negotiating ploy, and, yes, I know taxpayers have a seat at the table via a previous loan to Chrysler. But I wish our government would let any Chapter 11 filing remain the province of the courts if management cannot strike a deal with creditors, labor, and other stakeholders.
Speaking of government intervention in Big 3 financial matters, small holders of GM debt are calling on the government auto task force to give them a better deal than the one they see on the table (see above). In attempt to put a face on the plight of small GM bondholders (and no doubt evoke some sympathy in the process), a 70 year-old woman stepped up and said the following:
“We’re hoping to get the attention of the task force,” said Patricia St. Pierre, 70, of Grosse Ile , Michigan , adding that she and her husband depend on the interest from their bonds to help cover their expenses. She declined to give the size of their holdings in Detroit-based GM’s bonds. “Social Security isn’t enough,” she said. “I hope we’ll at least get something. I don’t want to be one of those ladies packing groceries at the store.” (source: Bloomberg.com)
Well, I’m sorry, Ms. St. Pierre, and I do sympathize with you. But if Social Security is not enough, and if a GM restructuring or bankruptcy will blow such a hole in your retirement income that you will have to bag groceries, then that’s just the price you’ll have to pay for reaching for yield without proper diversification. I’m sorry you’ll get hurt in the process, but it’s high time bondholders started to share the pain. Capitalism requires both risk and reward in order for our economic system to properly function, and we need folks to stop embracing the bailout mentality.
Citing some encouraging signs in the economic outlook, Atlanta Fed President and Chief Executive Officer Dennis Lockhart said in a speech on April 16 that now is the time to think about the post–financial crisis financial regulatory architecture.
In his remarks to the Levy Institute of Bard College in New York, Lockhart answered what he described as a fundamental question: "What regulatory environment will both align with the reality of financial markets and adequately address recent failings?"
Securitization still holds benefits
In describing the future environment, Lockhart said he expected an ongoing role for securitization, which has brought benefits to consumers that cannot be easily matched by a bank that originates a loan to hold to maturity. But he also discussed the need for some changes in securitization.
"Going forward, markets and investors will show a new awareness of the potential for complexity, opacity, and risk in securitized instruments," Lockhart said. "This awareness, in and of itself, has and will continue to provide incentives for the creation of simpler and more transparent securitization structures."
Regulatory structure must evolve
In discussing the future of regulation, Lockhart said the regulatory environment "must be suited to a financial system that remains a mix of capital markets and institutions—formal and shadow banking—with an array of institutional operating models." Lockhart called for what he termed "agile oversight," which stresses actively managing risk as it evolves with the associated potential for an institution failing versus an approach that focuses on avoiding failure.
After the financial markets crisis has passed, the regulatory environment should be a balanced blend of rules and principles and should preserve a meaningful role for market discipline, he said. Acknowledging the challenges associated with resolving diversified, global financial institutions, Lockhart called for resolution planning as a continuous effort on the part of regulators.
Wednesday, April 29, 2009
In Japan small and medium enterprises which process raw materials are profitable today. Fast food outlets, e-commerce service providers, and the pachinko gaming industry are doing well too.
Many companies are hoping to make money from the stimulus plans in their countries. Part of Thailand’s stimulus plan covers the distribution of checks worth US$55 to every low-income worker. The beneficiaries can use the checks to purchase items at McDonald's, KFC, Pizza Hut and 18 other major business outlets in the country. KFC even awards 20 pieces of free chicken to stimulus beneficiaries who exchange their checks for store coupons.
Some airlines are increasing their flights to service returning migrant workers. For example, Philippine Airlines increased its operations in the United States and Canada, which can be interpreted as a sign that more and more retrenched Filipino migrant workers are now returning home.
Condom sales are on the rise too as people want to prevent pregnancies during the recession. This is good news for condom makers but bad news for countries with declining birthrates.
Instead of reducing the workforce, some companies in the Philippines are adopting shorter workweek hours. Because of low occupancy in their buildings, some landlords in Manila are lowering the rates for office space. A Japanese company in South Korea used its savings and accumulated profits over the years to protect the living of its workers.
Retail chain Ponto Frio in Brazil has an ingenious campaign to attract customers. The store provides free insurance to shoppers in case the latter become unemployed in the future.
Roshni Mahtani, founder and editor of www.theasianparent.com, suggests that small businesses can save money if they give up office space, use open source software, replace traditional phone connections with Skype, hire interns, conduct virtual meetings and maximize social media marketing.
How are individuals around the world coping with the recession? The crisis is obviously affecting the physical and mental health of many workers. This explains why gym and yoga studios are overcrowded in Singapore. Singaporeans who want to release the economy-related tension, and those who have been retrenched, are now spending more time on exercise.
A Bulgarian weekly asked its readers how the crisis is affecting them. Some answered they have stopped watching TV since the news is depressing. Some have more time to read these days while others have taken more interest in the rest of the world.
A worker in Qatar discovered that the financial crisis can somehow solve shopping addiction. She now spends less time buying consumer goods due to delayed paychecks.
In Brunei bloggers are criticizing bankrupt individuals who wanted to receive surplus funds from zakat collections. The paying of zakat, one of the pillars of Islam, is an act of giving up a percentage of one's wealth to the needy. Many were surprised that Bruneians with big credit card bills, automobile loans, and personal loans attempted to tap the zakat funds.
There are those who are so overwhelmed with money problems that the only solution they can think of is to commit suicide. It is sad to learn that more than 70 diamond polishers in Gujarat, India, committed suicide after losing their jobs.
Others have chosen to fight. Investors, mainly in Antigua, who lost their money after U.S. billionaire Allen Stanford was charged with investment fraud banded together and formed a coalition to recover their wealth. The Stanford Victims Coalition created a website to update other members about their case.
Because of the recession, some are learning to appreciate the basic laws of doing business like providing first-rate service to customers. A Brazilian popcorn seller has won recognition for his creative ways of doing business. He has already given many lectures on entrepreneurship.
Agriculture is popular again among Japanese youth and celebrities as more people search for economic activities that have stronger foundations than the financial sector.
Cambodia has reaffirmed its reliance on agriculture to promote economic growth. A Lao economist believes that the “agriculture-based, self-sufficient nature” of the country’s economy will protect Laos from the global financial crisis. The economist added that “people who live in industrialized countries live in fear of losing their jobs because they can’t grow vegetables and raise animals as people can in Laos.”
In Jamaica leaders of 21 private sector bodies have formed a pact of cooperation to offset the impact of the worsening global economic conditions. They have relearned the value of creating a “social partnership dialogue” between the government, opposition, labor, business and civil society.
Democratic capitalism entails two systems by which people with significant power are held accountable. One is capitalism, by which companies and their executives are accountable to the market. The other is democracy, by which public agencies and their leaders are accountable to voters. Americans may disagree about how much we want of one or the other, but most people understand we need both systems of accountability. When we confuse the two, we run the danger that people with great power may escape accountability altogether.
That's the problem right now. Bank of America's Ken Lewis is fully accountable to no one. AIG's public trustees have no charter or public mission to guide them. GM is trying to satisfy the Treasury and its shareholders simultaneously, and is doing neither very well. Even as the public takes larger ownership stakes in big Wall Street banks, the public has no systematic means of expressing its growing interest, whatever it is.
Perhaps government had no business meddling in the private sector to begin with. AIG, the big banks and the auto companies should have been forced to work out their problems with their creditors, or else be put into temporary receivership until their profitable units or nonperforming loans could be sold off. Perhaps any company that's judged too big to fail is too big, period. Antitrust laws should have been used to break these giants up before they got so big.
These arguments may be relevant to the recent past and possibly to the future, but they're beside the point right now. The immediate challenge is to sort out public from private responsibilities and to create clearer lines of accountability.
At the least, when government takes an ownership stake in a company, the pubic should be represented on that companies' board of directors in direct proportion to the size of its stake. Those public directors should be appointed by the president. In exercising their oversight function, they should seek guidance from the president and his top economic officials. And their votes on critical issues before the board -- such as whether to fire Ken Lewis -- should be made public.
Macroeconomics doesn't get much plaudits around now, but here is a real-life story that should hearten those who think the field is really broken. It concerns Andres Velasco, a distinguished macroeconomist who is currently the minister of finance in Chile, and who also happens to be a good friend, colleague and co-author.
Until the current crisis hit, Chile's economy was booming, fueled in part by high world prices for copper, its leading export. The government's coffers were flush with cash. (Chile's main copper company is state-owned, which may be a surprise to those who think Chile runs on a free-market model!) Students demanded more money for education, civil servants higher salaries, and politicians clamored for more spending on all kinds of social programs.
Being fully aware of Latin America's commodity boom-and-bust-cycles and recognizing that high copper prices were temporary, Velasco stood his ground and decided to do what any good macroeconomist would do: smooth intertemporal consumption by saving most of the copper surplus. He ran up the largest fiscal surpluses Chile has seen in modern times.
This didn't make Velasco very popular. Last November, public sector workers marched in downtown Santiago, burning an effigy of Velasco.
But by the time the financial crisis hit Chile, Velasco (and the Central Bank governor Jose de Gregorio, another fine macroeconomist) had accumulated a war chest equal to a stupendous 30% of GDP.
The price of copper plummeted 52 percent from Sept. 30 to year-end, and Velasco dusted off his checkbook. In the first week of January, he and Bachelet unveiled a $4 billion package of tax cuts and subsidies... Velasco’s stimulus spending, includ[ed] 40,000-peso ($68.41) handouts to 1.7 million poor families...
The surpluses accumulated during the good years has given the Chilean government unusual latitude in responding to the crisis. As a result, the economy is doing much better than its peers. As Bloomberg reports, "the country’s economy is expected to grow 0.1 percent in 2009, as the region contracts 1.5 percent, according to the International Monetary Fund."
And does good economics pay off politically? Eventually, yes. Five months after being burned in effigy, Velasco is currently President Bachelet's most popular minister.
Theories of the free market have long concerned themselves with the role of inequality. In The Wealth of Nations, Adam Smith famously argues that the development of advanced modes of production and commerce undermined the stark inequalities of the feudal world. The thirst of the rich for luxuries such as diamond buckles led to a breakdown of the system of feudal-agricultural dependence, in which wealthy landholders held not merely economic but also political domination of those below them.
Smith's argument has two salient implications for the current political right/classical liberals/conservatives: (1) certain forms of radical economic inequality can result in significant political inequalities (witness the petty tyrannies of medieval nobles), and (2) the functioning of the free market can serve as a way of mitigating these inequalities, of leading to a turnover of wealth, of making differences in levels of income less poisonous for civil liberties. The free market and inequality thus have a quarrelsome relationship: the market helps create inequalities, but it also undercuts the financial inequality of any given moment, allowing the rich to fall and the poor to rise. Inequality in results is a key characteristic of a market economy, and the very operations of a free exchange can prevent these inequalities from hardening into radical caste differences.
However -- and this is a crucial "however" -- the market itself, particularly in the wake of modern industrialization and certain forms of government intervention, can result in inequalities so vast that they begin to undermine a faith in free markets. And the growth of these radical inequalities can lead to a creeping sense of the hardening of financial differences. If one of the promises of the free market as a vehicle for an authentically liberal-democratic politics is in its ability to allow for social and economic mobility, increasing doubts about the existence of these mobilities also increases doubts about the efficacy of the market and its contribution to political equality. Radical inequalities and a sense of economic stagnation can in turn lead to a widespread rejection of the instruments of the free market and, more broadly, the free society.
Gavin then notes:
Markets only continue what the consequences of the origination of property did way back in pre-history: create wealth (the 'annual output of the necessaries, conveniences, and amusements of life' and, inevitably, inequality. The great agricultural societies, growing from a long history of hunter-gatherer subsistence economies from 11,000 years ago in a small segment of the earth’s surface, were noticeable by their inequality, which extended way beyond economic inequality to political and religious inequality. Tribal property in territory preceded family and private property.
The great empires of Egypt, Babylon, India and China, were dominated by ruling elites that managed the hydraulic mysteries and seasonal timings of everything about everyday life for the vast majority of their peoples. The stone detritus of these former stone-built civilisations are spread across the Eurasian continents, north Africa, and in parts of central and south America.
Their predecessor stone-age tool detritus is spread all round the world, into modern times too, which was the subsistence mode of every human society that did not grow into shepherding and farming. Those, few, modern, aimlessly discontented, people who have notions of going back to what they call, the ‘simpler’ life of pre-history, seem to have no idea what that would involve, including the mass extermination of about 6 billion people.
For tens of millennia, the inequality of the world’s population remained constant, with a small elite monopolising the power, and almost everybody else living on subsistence and almost static per capita levels. That is until, again in parts of Europe, commercial society from the 14th century began, slowly, to revive after a thousand years of stagnation, Black Death, endless wars, and social strife, since roughly it was after the fall of the Western Roman empire.
And within four centuries, in Britain, economics, technological and social change, and the unprecedented steady, cinpound interest of the albeit minute rise in per capita incomes finally broke through the petty cycles of the 'Malthusian Trap', ironically almost coterminous with its identification by Thomas Malthus.
These events created social inequalities of a new kind – that between societies that developed institutions capable of ensuring the necessary conditions for continuous, though small, growth rates and those societies – the majority – not capable for various reasons of breaking out of their subsistence economies. The unequal poor in the commercial societies were incomparably better off than those in the unequal traditional societies, claimed Smith in Wealth Of Nations.
It is that comparative inequality that is the distinction brought about by the social evolution of early commercial societies into what became known as capitalism from the mid-19th century. It is a phenomenon that the Left do not acknowledge and the conservatives do not yet accept. There is nothing ordained about the existing arrangements of Big State capitalism or Big Welfare States that will ensure their continuation in their present forms.
BISHKEK - Kyrgyzstan is not holding any talks with the United States on allowing it to keep its air base in the Central Asian state, Prime Minister Igor Chudinov said on Wednesday.
The United States said on Tuesday it had made progress in trying to persuade Kyrgyzstan not to close the Manas air base which supports military operations in Afghanistan.
"No talks are being held," Chudinov told reporters. "No official has been authorized (to negotiate on the matter)."
The former Soviet republic said in February it had decided to shut the base after securing pledges of $2 billion in aid and credit from Russia, which sees the region as part of its sphere of influence and resents the U.S. military presence there.
About 1,000 U.S. military personnel are based at Manas, along with smaller contingents of French and Spanish troops.
The base is a major hub for moving military personnel and supplies in and out of Afghanistan, where the United States is deploying tens of thousands of extra troops this year in an effort to fight the Taliban.
Let's stipulate for the sake of argument that the "equilibrium real interest rate" is negative, and that the nominal interest rate goes all the way down to zero. But oh no! Given the current array of prices and the expected array of prices next year, the implied real interest rate is too high for the market to clear. What to do?
Mankiw's suggestion is that the Fed should credibly promise to dump gobs of new dollars into the economy in twelve months, thus raising the future price "level" and giving people an incentive to unload their dollars today, while they have some purchasing power.
But there is another alternative, and that is for market prices today to fall very steeply until the market clears. The short-term collapse in prices during the present month, say, will then allow for a rapid price inflation back up to "normal" prices a year from now. [Emphasis in the original.]
I think this analysis is correct, under the maintained assumption that prices (including wages) are completely and instantaneously flexible. But if prices are sticky, then the immediate deflation and concurrent increase in expected inflation won't occur painlessly. Instead, it would take a while for the price level to fall, and as we wait, the economy would suffer through a period of depressed economic activity.
According to conventional new Keynesian analysis, sticky prices are the ultimate market imperfection that makes aggregate demand matter. If you deny that prices are sticky and assume they can instantaneously jump downward to new equilibrium levels, many macroeconomic problems become much easier to solve. Indeed, you don't need to solve them at all, as the market would do it.
I wish we lived in the world that Mr Murphy describes, but my reading of the evidence is that we don't.
Massachusetts has implemented new and innovative health care reform that provides subsidies for people under 300 percent of the federal poverty level unable to afford coverage. While reform has been very effective at increasing accessibility of insurance to residents across the socioeconomic spectrum, resulting in the lowest rate of uninsurance in the nation, the Massachusetts model is unsustainable, with skyrocketing costs and no systems in place to drive value.
Key problems include:
• Overall Health Care Cost Containment – Since the Massachusetts plan does not contain any mechanisms for reining in the rapidly increasing cost of health care, the plan has limited potential for long-term sustainability.
• Guaranteed Access to Affordable Health Care – The Massachusetts plan does not guarantee that everyone who is insured will be able to afford the health care they need. In addition, with major reduction of the Massachusetts uncompensated care pool, a byproduct of reform, the uninsured remain vulnerable to the catastrophic costs of a sudden acute illness or accident.
• Stability in Health Plan Membership and Continuity of Care – Because the Massachusetts plan provides private health care plans in a stratified system based on income, portability is limited and changes in employment status or income can result in the loss of coverage while enrollees switch plans.
• Meaningful Competition – The Massachusetts plan promotes health insurer oligopolies in the state. It offers no countervailing power through a public health insurance plan to drive competition, offset insurer market power and rein in costs; rather it maintains the status quo that has led to spiraling health care costs.
While Massachusetts continues to be a leader in providing affordable health care to its residents, using it as a model for national reform would not address many of the significant issues facing our health care system. The public health insurance plan option proposed by President Obama and Senator Baucus would compete with private insurance plans on a level playing field, control costs, provide guaranteed back-up coverage for anyone who needs it and set a benchmark for ensuring everyone in America quality, affordable health care.
Schools to get millions in stimulus money
Funding would go to disabled, disadvantaged pupils
The Henry County School System could receive nearly $11 million in federal stimulus funding.
During a specially called meeting today, the State Board of Education is expected to earmark as much as half of the $660 million intended for school districts across the state, including Henry County, according to the Georgia Department of Education's web site.
The funds - provided through the American Recovery and Reinvestment Act of 2009 - will help support programs for students with disabilities, as well as economically-disadvantaged students.
Under the stimulus bill, local school districts will get as much as $324 million in additional Individuals with Disabilities Education Act (IDEA) and pre-school funds, and as much as $336 million in added Title I funds.
About $330 million, roughly half the funds, is expected to be allocated at today's board meeting. Another $330 million is expected to be disbursed in late September or early October.
The stimulus package will also provide a supplement to other statewide programs, including $22 million to education technology grants, and about $900 million in possible "fiscal stabilization" funds for K-12 education, according to school officials.
Henry County Special Education Director Philip Mellor said about 85 to 95 percent of funding from IDEA is used to pay the salaries of teachers, para-professionals, teacher assistants, educational specialists, and some school nurses, who work with students with disabilities.
Some 4,000 students with disabilities are served annually in Henry, where most disabilities are characterized as speech and language impairments, learning disabilities such as dyslexia, mild intellectual disabilities, and emotional and behavioral problems.
School districts receive special education funding from various sources, including local tax dollars and from state and federal grants. Special education is mainly funded, however, through the state's Quality Basic Education (QBE) formula, with supplemental funding coming from IDEA grants.
Henry County is expected to receive a total of $7.5 million in IDEA stimulus funds, according to the state web site, and more than $200,000 for IDEA grants for pre-school students. The school district will also receive an estimated $3 million in Title I funds.
A new Gallup Poll finds 51% of Americans in favor and 42% opposed to an investigation into the use of harsh interrogation techniques on terrorism suspects during the Bush administration. At the same time, 55% of Americans believe in retrospect that the use of the interrogation techniques was justified, while only 36% say it was not. Notably, a majority of those following the news about this matter "very closely" oppose an investigation and think the methods were justified.
Friedman seems to follow those sentiments in todays New York Times first taking the "it'll tear the country apart" meme:
Look, our people killed detainees, and only a handful of those deaths have resulted in any punishment of U.S. officials.
The president’s decision to expose but not prosecute those responsible for this policy is surely unsatisfying; some of this abuse involved sheer brutality that had nothing to do with clear and present dangers. Then why justify the Obama compromise? Two reasons: the first is that because justice taken to its logical end here would likely require bringing George W. Bush, Donald Rumsfeld and other senior officials to trial, which would rip our country apart; and the other is that Al Qaeda truly was a unique enemy, and the post-9/11 era a deeply confounding war in a variety of ways.
He also uses the "Al Qaeda is unique meme" which I assume the "55% retrospect" comes from. Only problem is this is a position which has been given since the beginning of time from rulers, nations, and states, that face new challenges to their power base so I don't buy that one... its not unique or justification for going outside the law.
But to the question of tearing the country apart I still have to say I don't buy it. The sky isn't falling and it won't be falling if we seek justice on this issue. I could be wrong and the end will be nigh (what does nigh mean?) if we start investigating but I'm pretty confident it won't be.
David Robinson, down Pickens Democrat way sent me this:
How is it possible that we're having a debate about whether torture is OK? Were we dragged that far backward in only eight years? Yes, 9-11 was terrible; but are our values that fragile, that easily abandoned? Are we not as "exceptional," as far above the brutality of much of humanity as we like to think? The first article has a simple explanation, but it points out a weakness easily exploited by demagogues, so it isn't comforting.
"Torture, Values, and Political Considerations"
"How Torture Worked to Sell the Iraq War"
"CIA official: no proof harsh techniques stopped terror attacks"
"In 2002, Military Agency Warned Against 'Torture': Extreme Duress Could Yield Unreliable Information, It Said"
George W. Bush's Justice Department said subjecting a person to the near drowning of waterboarding was not a crime and didn't even cause pain, but Ronald Reagan's Justice Department thought otherwise, prosecuting a Texas sheriff and three deputies for using the practice to get confessions.
Federal prosecutors secured a 10-year sentence against the sheriff and four years in prison for the deputies. But that 1983 case - which would seem to be directly on point for a legal analysis on waterboarding two decades later - was never mentioned in the four Bush administration opinions released last week.
The failure to cite the earlier waterboarding case and a half-dozen other precedents that dealt with torture is reportedly one of the critical findings of a Justice Department watchdog report that legal sources say faults former Bush administration lawyers - Jay Bybee, John Yoo and Steven Bradbury - for violating "professional standards."
All I can say to Senator Specter is: spend the next year working as hard to court the Democratic base as you have worked to court the Republican wingnut base over the past decade, or I am maxing out for every single challenger you face in the Democratic primary.
Meanwhile, ideas that were 25 years old no longer match reality. A platform of tax cuts made sense in 1980, when the top tier bracket stood at 70 percent. But tea parties when the top tier pays 35 percent? In the midst of two wars, that’s frankly unpatriotic — and no longer connects to fiscal sense, as it did in the 1980s.
The G.O.P. now resembles a religion more than a political party, where any deviance from established dogma is considered heresy that warrants excommunication. Its collapse into a Southern regional party has taken one large step forward. It is remarkable to watch an already marginalized party purposely shrink itself further. Nonetheless, given that Arlen Specter will still be Arlen Specter, the Republicans’ loss is not necessarily the Democrats’ gain.
Tuesday, April 28, 2009
More than ever, America’s atheists are linking up and speaking out — even here in South Carolina, home to Bob Jones University, blue laws and a legislature that last year unanimously approved a Christian license plate embossed with a cross, a stained glass window and the words “I Believe” (a move blocked by a judge and now headed for trial).
They are connecting on the Internet, holding meet-ups in bars, advertising on billboards and buses, volunteering at food pantries and picking up roadside trash, earning atheist groups recognition on adopt-a-highway signs.
They liken their strategy to that of the gay-rights movement, which lifted off when closeted members of a scorned minority decided to go public.
“It’s not about carrying banners or protesting,” said Herb Silverman, a math professor at the College of Charleston who founded the Secular Humanists of the Lowcountry, which has about 150 members on the coast of the Carolinas. “The most important thing is coming out of the closet.”
Pacini pointed me to an opinion piece yesterday from his friend, Mark Taylor at Columbia.
He said the guy is one of the leading deconstructionists in the world... and that it was a very thoughtful piece and it would be fruitful for me to read.
By read he means--read it, sit on it, ponder it, struggle with it. That there is the germ of fruitful ideas and thoughts of substance. So I'm printing it off as we speak, to read, sit on, ponder, and struggle with...
hope you do the same.
Arlen Specter’s party switch isn’t all that startling. Richard Shelby and Ben Nighthorse Campbell switched to the Republicans right after the 1994 election, without (as far as I know) facing the same kind of primary challenge. But this switch is especially important, because once Al Franken finally gets seated it will give the Democrats the magic 60 number. The way is now open to a seriously progressive agenda.
What strikes me, however, is the extent to which this is a self-inflicted wound. If Pat Toomey of the Club for Growth weren’t so diligent about enforcing supply-side purity; if Republicans hadn’t made Rush Limbaugh the effective head of the party; Specter might still be GOP, and the Obama agenda much more limited.
Instead, though, we have a party that seems to be in a death spiral: the smaller it gets, the more it’s dominated by the hard right, which makes it even smaller. In the long run, this is not good for American democracy– we really do need two major parties in competition. But I’ll settle for getting that back after we get universal health care and cap-and-trade.
From the inbox
Please note that the Matthew Shepard Local Law Enforcement Hate Crimes Prevention Act is scheduled to receive a vote TOMORROW (April 29) in the U.S. House of Representatives.
It's been 10 years since Matthew Shepard was murdered for being gay. Judy Shepard has fought for 10 years for this bill. It's been 10 years, and this is our chance to get the bill signed into law.
Unlike the other side, we can't use lies to win. We only have the truth – and the voices to speak it. Please take action right now.
Then, please pass this email on to your friends and family.
Thank you for taking action.
CLICK HERE TO SEND A MESSAGE TO CONGRESS
The group Conservatives for Patients Rights went after Obama's health care plans today with, in part, a harrowing description of waiting lists for health care in Canada from a former head of the Canadian Medical Association, Dr. Brian Day.
An advocate of Obama-style reform, however, sends over another interview with Day that exposes some of the nuance of the debate, and suggests he's not exactly a fan of the American system either. Indeed, while he sees some role expanded for competition and private care, one of his central talking points seems to be that he's not — gasp — suggesting some sort of "two-tiered, American-style medical care."
In the interview above, around 4:00, Day is asked whether other countries have similar waiting lists for surgery.
Day responds that Germany, France, Switzerland, Austria and England don't have similar problems — and slams the U.S. system.
“I think this is what people tend to forget," he says. "They equate alternatives to the Canadian health care system with ‘Americanization,’ which is not what we’re talking about. We’re talking about countries like Belgium, and Switzerland, and France, Austria…”
I've always been intrigued by the focus on Canada... seeing as how we have worse results than so many other countries to choose from. It must be test marketed by Republicans to be effective...
Media Matters on CPR: Rick Scott and CPR: "Not So Innocent," And Just Plain Wrong
Summary: On April 27, 2009, Richard L. Scott's group, Conservatives for Patients Rights, released an ad titled "Not So Innocent." In the ad, Scott issues misleading information about a newly formed council and its possible effect upon the health care of Americans.
You should go read more from Media Matters report if you have time...
according to a study from The Ohio State University, which proves, with math and stuff, that lots of conservatives seem to not understand the intrinsic, underlying joke of The Colbert Report:
This study investigated biased message processing of political satire in The Colbert Report and the influence of political ideology on perceptions of Stephen Colbert. Results indicate that political ideology influences biased processing of ambiguous political messages and source in late-night comedy. Using data from an experiment (N = 332), we found that individual-level political ideology significantly predicted perceptions of Colbert's political ideology. Additionally, there was no significant difference between the groups in thinking Colbert was funny, but conservatives were more likely to report that Colbert only pretends to be joking and genuinely meant what he said while liberals were more likely to report that Colbert used satire and was not serious when offering political statements. Conservatism also significantly predicted perceptions that Colbert disliked liberalism. Finally, a post hoc analysis revealed that perceptions of Colbert's political opinions fully mediated the relationship between political ideology and individual-level opinion.