Werthless wrote:

dajafi wrote:I don't really believe that all Republicans are economic illiterates and policy morons, but certainly the high-profile ones seem to swing that way. Here's former Speaker Dennis Hastert:

"When you really analyze it, if you want to stimulate economic growth, you have to have people investing, creating capital and creating jobs. Basically, a big part of that (stimulus package) went for extending unemployment. It's a nice thing to do, but when you extend unemployment, you take the incentive away from people to go out and get a job. So it almost has a counter negative effect."

Maybe having Tom DeLay's hand up his ass all those years caused brain damage.

What is economically illiterate? He's talking in absolutes (take away incentives instead of reduce) when he shouldn't, but directionally, I don't see how he's brain damaged. Also, so you don't thing I'm being disagreeable, the unemployment extension was a very small portion of the funds, and it is the right to do morally IMO.

Edit: Extending unemployment benefits makes it less likely for an unemployed person to "settle" for a temporary low-paying position, hurting the employment numbers.

The incorrect characterization of UI as a huge portion of the measure was simple ignorance. The misunderstanding of how government spending works--basic Keynesian theory--to "creat[e] jobs" and get money circulating in distressed communities, thus stimulating demand, is advanced, perhaps ideologically determined ignorance.

dajafi wrote:

kruker wrote:

“This is a big problem for Obama, especially because it was such a major, major promise,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. “He harped on it, time after time, and he created a sense of expectation around the country. This is exactly why people are skeptical of politicians, because change we can believe in is not the same thing as business as usual.”

NYT

I think anyone that took his campaign pledges of no lobbyists in the administration and the like are the very definition of gullible, yet it was one of the main rallying points I heard from the grass-rooters.

Not such a big deal to me, just because I didn't believe it, but I can see why some people are pissed.

Just read that article a couple minutes ago. I'm not defending this--I think Daschle should have withdrawn, and/or that the administration should have pulled his nomination, and if Geithner had bowed out I would have been fine with that as well.

But I suspect it would be almost impossible to staff an entire federal administration with people who aren't at least in an ethical gray area on some question or another. At best, what you're doing now is setting a tone such that this bunch is less compromised than previous administrations, and maybe the next Democratic president is close to what people like Sloan and Wertheimer would consider legitimately "clean."

At best. Frankly I doubt this could happen, short of burning DC to the ground and starting fresh.

well, there's always his second term

Warszawa wrote:well, there's always his second term

Sadly, the lame duck moment starts on Jan. 21 of the second term. He'll never have more leverage than he has right now. As I said, we just have to hope it's "better," compared to the Clintons and Bushes; failing that, maybe the Republicans will try to reclaim the good-government high ground... though I doubt it, because it's tough to rail against corruption when your whole basic premise is that government is inherently corrupt, so anything goes. The K Street Project didn't manifest out of thin air.

Meanwhile, your avatar is freaking me the f out. I like it. Staying up until the movie comes out, I assume?

Headline:

Obama pick, Nancy Killefer, withdraws as tax problems take their toll on nominees

Nancy Killefer, a director of the McKinsey management consultancy firm whose brief was to cut waste and improve government efficiency, is the third member of the White House team to encounter trouble over her personal finances. Reports said that she failed for over a a year and a half to pay employment taxes for her domestic help.

http://www.timesonline.co.uk/tol/news/w ... 652912.ece

dajafi wrote:

Warszawa wrote:well, there's always his second term

Sadly, the lame duck moment starts on Jan. 21 of the second term. He'll never have more leverage than he has right now. As I said, we just have to hope it's "better," compared to the Clintons and Bushes; failing that, maybe the Republicans will try to reclaim the good-government high ground... though I doubt it, because it's tough to rail against corruption when your whole basic premise is that government is inherently corrupt, so anything goes. The K Street Project didn't manifest out of thin air.

Meanwhile, your avatar is freaking me the f out. I like it. Staying up until the movie comes out, I assume?

...you assumed correctly... hurm...

Werthless wrote:Headline:

Obama pick, Nancy Killefer, withdraws as tax problems take their toll on nominees

Nancy Killefer, a director of the McKinsey management consultancy firm whose brief was to cut waste and improve government efficiency, is the third member of the White House team to encounter trouble over her personal finances. Reports said that she failed for over a a year and a half to pay employment taxes for her domestic help.

http://www.timesonline.co.uk/tol/news/w ... 652912.ece

I guess that long questionnaire for administration candidates didn't include anything about tax evasion.

Daschle has withdrawn his nomination for HHS Secretary per ABCNews.com

SQUIRE

Nice

Super nice.

WASHINGTON – Tom Daschle has withdrawn his nomination to be Health and Human Services secretary.

That's according to a joint White House statement from President Barack Obama and his former nominee.

Obama said Tuesday he accepted the withdrawal "with sadness and regret."

Daschle has been battling for his nomination since it was disclosed he failed to pay more than $120,000 in taxes.

He said he's withdrawing because he's not a leader who has the full faith of Congress and will be a distraction.

AKA--relief.

That's pretty big of Daschle especially in light of Geithner's confirmation under what appeared to be more scrutable offenses.

There's probably a comment in here about the way in which these processes have been left to work themselves out rather unimpededly as well.

On the one hand, other people in every Administration have gotten away with much less.

On the other hand, how hard is it to pay your fucking taxes?

I just read on PoliticalWire that Daschle said it was the NYT editorial that convinced him to withdraw. Somebody reads those things! Who knew?

dajafi wrote:

Werthless wrote:

dajafi wrote:I don't really believe that all Republicans are economic illiterates and policy morons, but certainly the high-profile ones seem to swing that way. Here's former Speaker Dennis Hastert:

"When you really analyze it, if you want to stimulate economic growth, you have to have people investing, creating capital and creating jobs. Basically, a big part of that (stimulus package) went for extending unemployment. It's a nice thing to do, but when you extend unemployment, you take the incentive away from people to go out and get a job. So it almost has a counter negative effect."

Maybe having Tom DeLay's hand up his ass all those years caused brain damage.

What is economically illiterate? He's talking in absolutes (take away incentives instead of reduce) when he shouldn't, but directionally, I don't see how he's brain damaged. Also, so you don't thing I'm being disagreeable, the unemployment extension was a very small portion of the funds, and it is the right to do morally IMO.

Edit: Extending unemployment benefits makes it less likely for an unemployed person to "settle" for a temporary low-paying position, hurting the employment numbers.

The incorrect characterization of UI as a huge portion of the measure was simple ignorance. The misunderstanding of how government spending works--basic Keynesian theory--to "creat[e] jobs" and get money circulating in distressed communities, thus stimulating demand, is advanced, perhaps ideologically determined ignorance.

Yes, it is economic illiteracy or rather the enforced orthodoxy of Republican dogma that says Keynsian theory is wrong in deep recessions/depressions and supply-side theory explains all. Here's a hint: Detroit did not shutter its production facilities because its tax rates were too high. They did it because demand for cars has crashed, because people aren't spending. Business inventories went up significantly in the past quarter. Regardless of incentive tax rates given to them, businesses are not going to hire workers or increase production, let alone invest in new equipment, until the demand for their product rises. There is too much fear and actual job loss for people to increase spending. We can give personal tax cuts, but except for those so strapped financially that they must spend every cent they take in, a big chunk of tax cuts will be saved. That is why the government must step in and spend borrowed money. There is no other entity that will sustain demand. Giving unemployment benefits to layed off workers is not just humane, it cushions the damage to the economy from their lost demand. These folks are not spurning part-time jobs because they have these great benefits. People are scared shitless and willing to take jobs they wouldn't have looked at a year ago.

In other news... Iceland named Jóhanna Sigurdardóttir as Prime Minister yesterday. The world's first openly-gay PM.


Speaking of Iceland...

Q: What is the capital of Iceland?
A: About $10

allentown wrote:Yes, it is economic illiteracy or rather the enforced orthodoxy of Republican dogma that says Keynsian theory is wrong in deep recessions/depressions and supply-side theory explains all. Here's a hint: Detroit did not shutter its production facilities because its tax rates were too high. They did it because demand for cars has crashed, because people aren't spending. Business inventories went up significantly in the past quarter. Regardless of incentive tax rates given to them, businesses are not going to hire workers or increase production, let alone invest in new equipment, until the demand for their product rises. There is too much fear and actual job loss for people to increase spending. We can give personal tax cuts, but except for those so strapped financially that they must spend every cent they take in, a big chunk of tax cuts will be saved. That is why the government must step in and spend borrowed money. There is no other entity that will sustain demand. Giving unemployment benefits to layed off workers is not just humane, it cushions the damage to the economy from their lost demand. These folks are not spurning part-time jobs because they have these great benefits. People are scared $#@! and willing to take jobs they wouldn't have looked at a year ago.

You don't have to be a supply-sider to think that Keynesian stimulus packages are misguided. It's not an either/or choice. You can be a monetarist, and favor regulation of the money supply. You can be an Austrian, and favor that the government not even attempt to manage the economy. Most people take a bit from each of the disciplines.

What was the government's response to the depressions of 1907 to 1920? Were they ineffective? Answer: The government didn't really do anything, and you've probably never heard of these recessions.

It was starting in the 1920s when the fed started to get involved with regulating the money supply in attempts to bring steady economic growth. What happened? The 10% annual growth in the money supply in this decade spurred overexpansion in housing (sound familiar), a run-up in asset prices due to easy credit (eerie), all caused by the artificially low interest rates pushed by the fed. Then with the onset of the Depression, the Keynesian stimulus packages were the tools of the day, extending the Depression off and on through 1945. I don't mean to say that what is now known as Keynesian stimulus prolonged the depression. A lot of the failed New Deal programs (and pre-New Deal, like Smoot-Hawley) are not "Keynesian" in the modern usage of the word, even though they were supported by the same people at the time. For example, price fixing has yet to be attempted, as far as I know.

It seems to me that no one has learned any lessons from this. We're in danger of repeating everything. We enjoyed low interest rates for a prosperous decade. We overbuilt housing. We have other housing incentives in the tax code. We had a huge drop in stock prices. And the answers from the left that I've been hearing are similar to the 1930s answers... Protectionism... we must protect our local workers. Spending... we need to have the gov't employ workers when the private industry won't. Unemployment Insurance... we need to extend it. Tax the wealthy... they're hoarding the money, and inequality is tearing us apart. Mal-investment... let's build dams no ones needs, build cars no one wants to buy, build weapons for occupying Iraq, and give out money to whatever company is failing. I'm just waiting for a bill like the Federal Farm bill to be proposed to prevent prices from dropping in some favored sectors.

It is commonly held that WWII ended the Depression. I happen to agree with some of this view, but find it unsatisfying due to the unsaid assumptions. I don't consider a command economy, deterioration in purchasing power, and the killing of segments of our labor force a repeatable solution for ending a Depression. It's a replication of the Broken Window fallacy combined with the killing off of part of the labor force in war. Making a bunch of weapons, and flying your young men over to blow stuff up, should not be applauded as GDP growth.

When people say that WWII ended the Depression, I like to rephrase and say that the Depression ended any feelings of depression. US citizens weren't worried about jobs as much, they united in the face of a common enemy, and they felt like a people who were fighting for a cause. When the war was over, we won.

Neat articlediscussing some of the limitations of standard economic variables with evaluating a war economy.

[youtube]http://www.youtube.com/watch?v=avG9DvLi-aQ&eurl=http://www.cato-at-liberty.org/2009/02/03/tom-daschle-drops-out/&feature=player_embedded[/youtube]

Werthless wrote:

allentown wrote:Yes, it is economic illiteracy or rather the enforced orthodoxy of Republican dogma that says Keynsian theory is wrong in deep recessions/depressions and supply-side theory explains all. Here's a hint: Detroit did not shutter its production facilities because its tax rates were too high. They did it because demand for cars has crashed, because people aren't spending. Business inventories went up significantly in the past quarter. Regardless of incentive tax rates given to them, businesses are not going to hire workers or increase production, let alone invest in new equipment, until the demand for their product rises. There is too much fear and actual job loss for people to increase spending. We can give personal tax cuts, but except for those so strapped financially that they must spend every cent they take in, a big chunk of tax cuts will be saved. That is why the government must step in and spend borrowed money. There is no other entity that will sustain demand. Giving unemployment benefits to layed off workers is not just humane, it cushions the damage to the economy from their lost demand. These folks are not spurning part-time jobs because they have these great benefits. People are scared $#@! and willing to take jobs they wouldn't have looked at a year ago.

You don't have to be a supply-sider to think that Keynesian stimulus packages are misguided. It's not an either/or choice. You can be a monetarist, and favor regulation of the money supply. You can be an Austrian, and favor that the government not even attempt to manage the economy. Most people take a bit from each of the disciplines.

What was the government's response to the depressions of 1907 to 1920? Were they ineffective? Answer: The government didn't really do anything, and you've probably never heard of these recessions.

It was starting in the 1920s when the fed started to get involved with regulating the money supply in attempts to bring steady economic growth. What happened? The 10% annual growth in the money supply in this decade spurred overexpansion in housing (sound familiar), a run-up in asset prices due to easy credit (eerie), all caused by the artificially low interest rates pushed by the fed. Then with the onset of the Depression, the Keynesian stimulus packages were the tools of the day, extending the Depression off and on through 1945. I don't mean to say that what is now known as Keynesian stimulus prolonged the depression. A lot of the failed New Deal programs (and pre-New Deal, like Smoot-Hawley) are not "Keynesian" in the modern usage of the word, even though they were supported by the same people at the time. For example, price fixing has yet to be attempted, as far as I know.

It seems to me that no one has learned any lessons from this. We're in danger of repeating everything. We enjoyed low interest rates for a prosperous decade. We overbuilt housing. We have other housing incentives in the tax code. We had a huge drop in stock prices. And the answers from the left that I've been hearing are similar to the 1930s answers... Protectionism... we must protect our local workers. Spending... we need to have the gov't employ workers when the private industry won't. Unemployment Insurance... we need to extend it. Tax the wealthy... they're hoarding the money, and inequality is tearing us apart. Mal-investment... let's build dams no ones needs, build cars no one wants to buy, build weapons for occupying Iraq, and give out money to whatever company is failing. I'm just waiting for a bill like the Federal Farm bill to be proposed to prevent prices from dropping in some favored sectors.

It is commonly held that WWII ended the Depression. I happen to agree with some of this view, but find it unsatisfying due to the unsaid assumptions. I don't consider a command economy, deterioration in purchasing power, and the killing of segments of our labor force a repeatable solution for ending a Depression. It's a replication of the Broken Window fallacy combined with the killing off of part of the labor force in war. Making a bunch of weapons, and flying your young men over to blow stuff up, should not be applauded as GDP growth.

When people say that WWII ended the Depression, I like to rephrase and say that the Depression ended any feelings of depression. US citizens weren't worried about jobs as much, they united in the face of a common enemy, and they felt like a people who were fighting for a cause. When the war was over, we won.

Neat articlediscussing some of the limitations of standard economic variables with evaluating a war economy.

You can extend the argument to monetarism or Austrian economic theory, but none of these has an effective answer to Keynsians argument that pushing on a string doesn't work. It is all well and good to debate what economic theories work best in good times, and much of Keysian economics isn't really crafted to model good times, but these other theories really offer us nothing for the present. Monetarism? The floodgates are open, that should be vastly expansionary and inflationary, but it isn't happening. Do nothing? I think we know what happens.

Protectionism is not the answer, but Republicans have taken the free trade cant to extremes. For instance, we don't have anything approaching free trade with China. It is a mercantilist dictatorship, complete with slave labor and military owned factories. It absolutely does manipulate its currency and the truly massive trade deficits we run with them year in and year out make no sense at all. Insisting on total 'free trade' with China is basically unilateral disarmament industrially. A lot of our other Asian trading partners also cannot be said with a straight face to practice free trade.

Perhaps I've missed these full-throated cries for protectionism, other than the general sentiment of "Buy American" that I think Floppy mentioned the other day. That might be misguided, but until there's actually a serious legislative or regulatory action in view, let's not get all overwrought on Smoot-Hawley horror stories. As allentown points out, there's a lot of middle ground between free-trade absolutism and retreating behind high tariff walls.

dajafi wrote:Perhaps I've missed these full-throated cries for protectionism, other than the general sentiment of "Buy American" that I think Floppy mentioned the other day. That might be misguided, but until there's actually a serious legislative or regulatory action in view, let's not get all overwrought on Smoot-Hawley horror stories. As allentown points out, there's a lot of middle ground between free-trade absolutism and retreating behind high tariff walls.

It's not as big of a story here, but the Buy American clauses in the stimulus bill have been big stories abroad. They aren't big throated cries for protectionism, they are cries to "protect and create American jobs here at home." Certainly that rhetoric sounds more familiar.

http://www.theglobeandmail.com/servlet/ ... ional/home

http://www.theaustralian.news.com.au/st ... 48,00.html

Unilateral decisions to not charge tariffs helps our consumers, which is all of us. While I think it would be better in the long-run for each country to allow free trade, it's pretty silly to complain about other countries when we have silly restrictions and WTO disputes of our own making (steel, corn, and sugar come to mind). The Chinese have been subsidizing our consumption for years, and I see no reason to stop now.