DOMA, a stagnant economy, and we are Ready for Hillary?---Caveat emptor

Yesterday's DOMA ruling struck me as missing one important note--Bill Clinton brought you DOMA.

It reminded me of how vacuous and disconcerting the Ready for Hillary efforts are in terms of reminding us that the majority of politically engaged people really aren't that politically engaged at all.

From appearances on Facebook the bulk of the Ready for Hillary crew seem to be politico's trying to line themselves up a campaign job or political appointments and then those who are utterly oblivious to what actually happened during the Clinton years and the economic and political agenda they pushed.

So I picked up my copy of Thomas Ferguson's Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems and was reading through the opening  introduction on the early Clinton years to refresh my memory.

As Ferguson points out, much of the efforts of the Clinton administration was built around appeal to Republican votes (such as DOMA) and massive lobbying of the business community.

The horrid economy that is producing massive profits for CEO's but zero quality jobs and an army of multinational corporate-employed part time workers--yeah Clinton helped lay the groundwork.  The trades deals full of protectionisms for the 1% and free markets for you and yours--an agenda of Government redistribution of wealth upwards.  Yeah, all of that was in part brought to you by the Clinton team.

Its a team that is working to get us Ready for Hillary.... Caveat emptor. 

Dear God....CNN is bringing back Crossfire?!?!

For those who don't remember the horrid show Crossfire here is Jon Stewart on the show shortly before it got canceled (if I'm not mistaken).

He does a classic Jon Stewart slice and dice, tearing into them for the crap job they do...



But appears CNN didn't learn their lesson and are bringing back the show.

3 Georgia Congressmen don't care about massive unemployment. Where are the pitch forks?

I'm not an expert on monetary policy but sometimes Republicans do idotic things that require bringing attention to bland and boring stuff my friends don't always stay up to date on. This mornings "edition of idiocy of the GOP" is on Federal Reserve policy--the FFOCUS Act of 2013.

So bear with me as this is a dozy in a very boring kind of way.*

The Federal Reserve is the central bank of the United States. The Fed's duties, according to its own Board of Governors [PDF] fall into four general areas:

• conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates 

• supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers 

• maintaining the stability of the financial system and containing systemic risk that may arise in financial markets 

• providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system

The Federal Reserve is considered an independent body because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government.  But the Federal Reserve System's authority is derived from statutes of Congress and is subject to Congressional oversight.

For the most part, since the beginning of the current economic crisis, the Fed has been relatively proactive on the monetary policy front.  The reason workers are facing, what amounts to a depression, is that Congress and the President have been sitting on their hands on the Fiscal policy side of the equation.

Well now 30 Republicans (3 from here in Georgia) are trying to utilize their oversight powers of the Fed in a way that will not really change anything at the Fed over the short term but does give us a good idea about their priorities as members of Congress.

Let me outsource to Josh Israel over at Think Progress:

Rep. Marlin A. Stutzman (R-IN) introduced hisFFOCUS Act of 2013 earlier this year. The bill, which has 29 Republican co-sponsors, claims to be about “focusing” the Federal Reserve on its mission of preserving stable prices. To do this, the legislation strips the Board of Governors of the Federal Reserve System and the Federal Open Market Committee of their other mission — encouraging “maximum employment.”

While the Federal Reserve has focused more of its efforts on controlling inflation than on stimulating job growth, monetary policy has the potential to be a key component for spurring job growth. By taking that out of the Fed’s mission altogether, these Representatives would effectively eliminate a major government tool from their alleged “jobs, jobs, jobs” mission.

Now this is where it gets interesting because ending the Fed's "dual mandate", ending its mission to seek maximum employment, would not change anything over the short term.

Matthew Yglesias noted this last month:

Ben Bernanke's appearances before Congress are usually a parade of clueless questions, but Sen. Amy Klobuchar of Minnesota just asked him a great one. Noting that some members of Congress think the Fed should drop its dual mandate on inflation and unemployment and just focus on price stability, she asked Bernanke to explain what he would do differently if the mandate changed.

Bernanke hemmed and hawed a bit, but the crux of his answer was: nothing.

He seemed to interpret the question as perhaps an attack on his inflation record, but his answer was a damning attack on his growth record. (His answer starts around the 39-minute mark here.) Bernanke noted that "inflation, if anything, is a little bit too low" and said that even though many foreign central banks have a single mandate: "I think our inflation record is as good as really any major central bank, and so there's not really been a sacrifice in that respect."*

That's a huge tell right there. Bernanke can't name a single way in which his policy would change if Congress rescinded his legal mandate to attempt to maximize employment.

So ending the Fed's employment mandate changes nothing over the short term according to Bernanke.

This gives Yglesias a moment to pause and do some of that oversight we might hope our members of Congress do.  Hold up a minute Matt says:

In other words, he's ignoring that mandate. The Federal Reserve's attitude with respect to price inflation has been identical to what its attitude would be in a world in which it wasn't legally required to care about inflation. And that attitude is hammering the economy. Normally there's no substantial tradeoff between inflation and unemployment, but things are different at the zero bound. Once nominal interest rates reach zero, the most potent way to reduce real interest rates is to raise expectations of future inflation. Lower real rates mean more investment and more durable goods purchases—in other words more jobs. So right now there is an inflation-unemployment tradeoff, and Bernanke is behaving as if he has no employment mandate.

So right now, in the middle of massive unemployment we have a Federal Reserve not acting on its employment mandate and GOP members of Congress openly admitting they have no concern about massive unemployment.  Their concern is for the 1% who get them elected and fund the think tanks where the get their "free market" ideological talking points from.

Sadly we've elected a large group of people to Congress (on both sides of the aisle) who could care less about the concerns of every day people.

The 3 members of Congress from Georgia who don't care about the 8.2% unemployment rate Georgia is currently facing are:

Rep Graves, Tom [GA-14] 

 Rep Westmoreland, Lynn A. [GA-3]

 Rep Woodall, Rob [GA-7]

We passed some stimulus early out of the gate of the great recession.  But it was not nearly the size it needed to be to make up for the giant hole in the economy that was created by the bursting of the housing bubble.

Now we have massive unemployment giving us a devastating real world counter-example to shut down simplistic notions that "Capitalism efficiently and effectively allocates resources to the needs of society without the need of Government intervention."

We have people who want to work and lots of work, as a society, that needs to be done.

The obvious solution, which the U.S. did during the Great Depression, is to proactively jump in and make up for the failures of the private sector. To connect those two needs together via massive jobs programs and a spending spree on investment in infrastructure (both physical and social/cultural) to get people working and get some investment and development that will stick around long after the private sector has regained appropriate momentum.

Instead we have the likes of these 30 Republicans using their majority power in Congress to ignore the plight of citizens in their district.  Hold on to your hats boys and girls--this is going to be a really long economic depression.

Update:
Dean Baker over at the Center for Economic and Policy Research fleshed out this issue a bit more for me this morning via email:

There is a small point in defense of Bernanke (until now). They interpret price stability as 2.0 percent inflation. Since the inflation rate has generally been somewhat below this for the last 4 years, expansionary monetary policy was actually consistent with price stability. Of course Bernanke's announcement of his plans for tapering goes in the opposite direction.

Matt is also a bit off -- there is a tradeoff when the unemployment rate gets lower. Suppose the unemployment rate were 5.0 percent and the inflation rate were 2.0 percent. Should the Fed allow the unemployment rate to fall and risk higher inflation? My answer is yes, but that is a trade-off story.

For more on the tapering recently announced that Dean is talking about you can check out his recent op-ed over at Al Jazeera: The Ben Bernanke pre-mature taper blues.

*pardon the 3am blogging spelling/grammar as I'm off to work without an edit.
**strike that, 1 edit as Matt's post and Bernanke's testimony were from back in May.

Ontology is the study of what there is...

But there is more to it than that.

Conservatives are right, America is awesome. Or: What's actually revolting...

The greatness of America and protecting it from further decline is one of the top priorities of conservatives every election.

I've decided maybe they are right.

America is awesome and we need smaller Government so that our entrepreneurial spirit can leads us towards increasing prosperity.

As proof of the correctness of the conservative supposition I provide you...

this

and this.

There is also this.

These are all examples which I believe further prove capitalism is about compensating success (and austerity works!) and these successes are obviously the reason that the average pay of the people who crashed the economy is now double what it was in the early days of our last recession.

If the economic depression which we are now living through doesn't merit such a pay bump for bank CEO's I don't know what would.

That fact that people aren't revolting, is the revolting part.

The sons of modest families decline very rapidly into complete good-for-nothings.

I've always contended that, for the most part, the Tea Party is basically composed of the children of the Dixiecrats here in the south.

They are the children of the Greatest Generation who were basically handed everything to them by parents whose careers and lifestyles were created and subsidized by the Federal Government.

And here I sit tonight reading in Nietzsche: Human, All Too Human: A Book for Free Spirits (Cambridge Texts in the History of Philosophy) to come to find that Nietzsche predicted their rise:

78

Ambition a surrogate for moral feeling. --Moral feeling must not be lacking in those natures that have no ambition.  The ambitious contrive to get on even without it, and with almost equal success. -- That is why, if they should ever lose moral feeling, the sons of modest families that know nothing of ambition decline very rapidly into complete good-for-nothings.

 Am I wrong?

6.4.2013 To start your day...

Quote of the day:

Friendship and marriage. The best friend will probably get the best wife, because a good marriage is based on a talent for friendship.   --Friedrich Nietzsche, Huamn All Too Human Sec 7

Random excerpt from the Stanford Encyclopedia of Philosophy:

Medieval philosophical texts have as their formal sources Greek and Arabic commentaries, Neoplatonic treatises, dialogues, and allegories, as well as Aristotelian treatises, and the works of Augustine. Before the formal development of universities and university curricula that dictated the established forms for writing philosophical/theological texts in the 13th century, medieval philosophical texts were written in a wide variety of forms. In the 12th century, writers such as Abelard and Alan of Lille composed dialogues, allegories, axiomatic works, disputations, and summae, but the next two centuries were dominated by the forms of commentary on Peter Lombard's Sentences, various forms of the disputed question, and the summa.

Most recent news story in my RSS feed Reader: Workers strike in support of Turkey protests - Europe - Al Jazeera English

Article that has remained open in my browser for multiple days:  Capitalism and Economic Imperialism » CounterPunch

Person you should follow on twitter:  @jricole 

Abolish the I.R.S., cause whats in a name?

...well, nothing really.

Ted Cruz says abolish the IRS.  Ezra Klein notes we could call the new agency Cruz is calling for us to create “The Agency of Tax Freedom," to process those postcards.  

Or we could just call it the Internal Revue Service.

Nietzsche once noted that "a pair of powerful spectacles has sometimes sufficed to cure a person in love."

The "abolish the IRS" types may just need us to help shine a light on their grand plan, so that they too can see its not so grand.

Governance is boring, bureaucratic, and fraught with political barriers to efficiency and ease--the sooner we accept those facts, the sooner we can start creating and implementing the most effective solutions.

Hannah Arendt "Zur Person"

Failure of the drug war, the thousands of lives lost, and the better alternative offered by legalization....

Any champion of free markets understands the major problems with creating black markets.

But for those who don't, this guy could tell you a few things about the devastation our "War on Drugs" has brought forth.

If you are like some people I know in the south and just "don't trust Mexicans" then just look at our packed prisons and the taxpayer burden (Koch brother logic: forget about the destroyed families since you obviously aren't concerned about that...lets focus on the tax dollars!).

Empowering the criminal class is about the only thing those who oppose marijuana legalization are doing.  Might as well regulate and allow some filthy lucre.

When are we going to see some leadership on this issue in Georgia politics?