"It is easy to confuse what is with what ought to be, especially when what is has worked out in your favor."
- Tyrion Lannister

"Lannister. Baratheon. Stark. Tyrell. They're all just spokes on a wheel. This one's on top, then that's ones on top and on and on it spins, crushing those on the ground. I'm not going to stop the wheel. I'm going to break the wheel."

- Daenerys Targaryen

"The Lord of Light wants his enemies burned. The Drowned God wants them drowned. Why are all the gods such vicious cunts? Where's the God of Tits and Wine?"

- Tyrion Lannister

"The common people pray for rain, healthy children, and a summer that never ends. It is no matter to them if the high lords play their game of thrones, so long as they are left in peace. They never are."

- Jorah Mormont

"These bad people are what I'm good at. Out talking them. Out thinking them."

- Tyrion Lannister

"What happened? I think fundamentals were trumped by mechanics and, to a lesser extent, by demographics."

- Michael Barone

"If you want to know what God thinks of money, just look at the people he gave it to."
- Dorothy Parker

Friday, August 06, 2010

Frank Rich reviews Jonathan Alter's book on Obama.

His main issues are Afghanistan and unemployment, and like David Sirota, he refuses to acknowledge the fact that Obama ran on the campaign issue of refocusing from Iraq to Afghanistan.

Rich writes
To many progressives, Obama’s too-cool handling of the [BP oil spill] disaster was a confirmation of a fatal character flaw--a professorial passivity that induced him to prematurely surrender the sacred "public option" in the health care debate and to keep too many of his predecessor’s constitutional abridgements in place at home and at Gitmo.
Again, Lieberman blocked the public option, Obama didn't surrender. With Gitmo,* Obama made an attempt but they backed off that and trying KSM in New York City after it was said that Scott Brown won the Massachusetts Senate race because of the Xmas day bomber. Also, they didn't want to provoke the previous regime.** Also, Obama had a lot on his plate with the worst financial crisis since the Great Depression and passing health care reform.

Basically some progressives - I'd question Rich's claim of "many" - want Obama to emote more. Appointing Elizabeth Warren would be a nice emote. (A Republican Senator just blocked Peter Diamond's nomination to the Federal Reserve Bank board so it's worth noting that the obstructionist Republicans just might block Warren also. And if they do and Obama nominates someone else like he did when his nominee to the OLC Dawn Johnson was blocked, will he get no credit from the emo-progressives?)

* The band "Jello Biafra and the Guantanamo School of Medicine" is playing the Metro on October 8th.
** Sort of like how in nations that have transitioned to democracy - see Spain, Chile, or Pakistan etc. - the newly elected democratic governments try hard not to provoke or upset the military, so that they won't reenter politics.

(or the Materialist Base)

I googled "Zizek" and "Inception" and it came up with this blog post at The Parallex by a Sarahana.
Yet we watch a movie like Inception, and giddily wonder, What would Zizek say about Inception? We don't know yet, but a learned soul on the internet, who goes by "Berlusconi Youth", has dreamed up a plausible response:
Ish not thish "limbo" Lacan’s unbearable Real?
Ish not thish dream from which the only escape ish death not, indeed, the actuality of global capitalishm?
Ish not thish "idea" that, you know, ish planted and growsh like a cansher not the revolutionary kernel?
Ish not the role of the democratic-progressive Leninisht vanguard Party to plant thish revolutionary kernal in the mindsh of the mashes?
Fredric Jameson's review of Zizek's opus The Parallax View.
What can this possibly have to do with popular culture? Let’s take a Hollywood product, say, Fritz Lang’s Woman in the Window (1944). (Maybe now Fritz Lang belongs to high culture rather than mass culture, but anyway . . .) Edward G. Robinson is a mild-mannered professor who, leaving his peaceful club one night, gets caught up in a web of love and murder. We think we are watching a thriller. At length, he takes refuge in his club again, falls asleep from exhaustion, and wakes up: it was all a dream. The movie has done the interpretation for us, by way of Lang’s capitulation to the cheap Hollywood insistence on happy endings. But in reality -- which is to say in the true appearance -- Edward G. Robinson ‘is not a quiet, kind, decent, bourgeois professor dreaming that he is a murderer, but a murderer dreaming, in his everyday life, that he is a quiet, kind, decent, bourgeois professor’. Hollywood’s censorship is therefore not some puritanical, uptight middle-class mechanism for repressing the obscene, nasty, antisocial, violent underside of life: it is, rather, the technique for revealing it.
 Berlusconi Youth is probably a reference to Zizek's piece titled "Berlusconi in Tehran."

Thursday, August 05, 2010

The Land of Full Employment

I hate to admit it but I like that Target ad with this song. Being a kid in the late 1970s* you'd come across cultural artifacts from the previous decade - the epic Sixties - that might as well been from an alien culture they were so bizarre, especially the music. Still they held a strange fascination.

Anyway, in his recent Op-ed Treasury Secretary Timothy Geithner linked to a piece by Kenneth Rogoff which I really didn't like in which Rogoff seems to be fatalistic and argues against overdoing fiscal stimulus.

Then I see Rogoff on Charlie Rose and he's arguing for fiscal stimulus of about half the size of Obama's ARRA, so around $300-350 billion I'd guess. Plus, he argued for more inflation. What gives? I like it but why the change of mind?

Maybe the Fed will do something next week if the job numbers tomorrow are bad.

* A very strange time culturally speaking.
Lollapalooza Schedule for the Budweiser Stage:

The New Pornographers   4pm
The Black Keys   6pm
The Strokes    8:30pm

Grizzly Bear    4:15pm
Spoon    6:15pm
Phoenix    8:30pm

Yeasayer    4pm
MGMT    6pm
Arcade Fire    8:30pm
Matt Yglesias links to an interview Ezra Klein did with Carmen Reinhart. She wrote a book titled "This Time it's Different" with Kenneth Rogoff. In a recent Op-ed Obama's Treasury Secretary Tim Geithner linked to an editorial Rogoff published in the Financial Times.

Yglesias blogs:
EK: There’s a lot of the discussion about what Washington should do, but you seem to be saying that this is just going to take time.
CR: That is certainly my view. It’s not that governments are powerless. The government has been a key player in preventing a catastrophic global shock. We didn’t end in a depression. I can’t stress that enough. It’s played already a much larger role in placing a much higher bottom. But we built up this debt not overnight, but over years. And now we expect the resolution to be very rapid. This is not something that policymakers can undo quickly. If you look at the big, historic panaroma, deleveraging takes time. It’s not pretty. It’s not the answer people want to hear, but these debt cycles are lengthy.
To be clear, I don’t disagree with any of that. But the message seems to be-calm down. Be more patient. Be less critical. And I do disagree with that. The recession has already been a long one. If it takes us three more years to achieve full employment, that will be a long time. If it takes us six more years, that will also be a long time. But in terms of actual human beings’ lives, it makes a great deal of difference which one happens. So given that "it’s not that governments are powerless" it’s important to focus attention on the need to use those powers.
The Congress is about to pass legislation giving $23 billion in aid to the states. They should do more. As I somewhat understand it, the Fed had been following a somewhat contractionary policy regarding mortgages, but now they have stopped that and shifted into neutral. They should do more. Where I would differ from Reinhart is that she says a lot of debt developed over time, but in reality a lot of the debt was caused by the financial crisis and panicky aftermath. Some was caused by overleveraging which happened over time, but much of it happened quickly when unemployment shot up and state's tax revenue's dropped.

Obama turned 49 yesterday and is 18 months into his presidency.

Over at DailyKos, David Sirota echoes a common complaint that Obama is meaner to the left than to the right. Jonathan Chait responds at his blog.
The massive enthusiasm gap between Democrats and Republicans has numerous causes, but surely one of them is the exquisite sensitivity to insult displayed by progressive activists.
Sirota complains about the war in Afghanistan and the public option. The fact is that one of Obama's campaign promises was to focus on Afghanistan and pull out of Iraq. Also it seems to me he accomodated Pelosi by giving a July 2011 draw-down date. Regarding the public option, Senator Lieberman blocked it, end of story.

It's fine to try to move the Overton window but one should strive to be accurate about what the Obama administration has accomplished.

They came into office in the midst of the the largest financial crisis since the Great Depression. They did some unpopular things to stabilize the situation in the face of rock solid Republican obstructionism. They enacted the stimulus (ARRA) which for all its faults was necessary. They appointed some good people to the Federal Reserve Bank and the National Labor Relations Board. They nominated two liberalish Supreme Court judges and passed liberalish health care reform - which was controversial and spawned the Teabaggers. They passed financial regulation reform in the face of rock solid Republican obstructionism. Regarding health care reform they went the reconciliation route which is pretty confrontational.

They confronted Arizona over its outlandish immigration policies. I'm sure there are things I'm forgetting, but one thing people should be reminded of is that Obama hasn't massively screwed up. That takes skill. And luck.

Most of all he has kept progressive politics in the game.* The analogy I like to make is that in juggling and in hacky-sack the object of the game is to keep the ball in the air. You lose if it hits the ground. Obama has kept the ball in the air in the face of some tough economic challenges.

Robert Reich writes about the "enthusiasm gap."

Hopefully Obama will nominate Elizabeth Warren.**
* One of my favorite moments was when during his live on-air State of the Union speech, Obama called out the Roberts Supreme Court over their recently-made Citizens United ruling. And they were seated right in front of him. So there's a good example of being confrontational with conservatives even if they're members of a very powerful co-equal branch of government. And money in politics - the subject of the ruling - is the ultimate source of many of the problems Obama has been dealing with, whether it's the private sector failure in the financial markets or the private sector failure in our health care system, the latter of which we will have to deal with in order to fix the Federal government's long term budget problems.
** Ugh, Christina Romer is rumored to be resigning.

Wednesday, August 04, 2010

George Packer on the broken U.S. Senate.

Dean Baker blogs:
The NYT had an article about Germany's relatively healthy economy, which is now growing at a healthy pace largely as the result of a surge of exports. The article also notes the effectiveness of Germany's work sharing policy which provides tax credits to companies for shortening hours rather than laying off workers. This policy has been even more effective than the article implies.

While the article tells readers that Germany's unemployment rate is 7.6 percent, this is the German government measure. This measure counts people who want full-time work but only have part-time jobs as being unemployed. By contrast, the OECD's methodology, which is similar to the one used by the United States, shows a German unemployment rate of 7.0 percent, roughly the same as before the downturn.

Sunday, August 01, 2010

Robert Shiller calls for a public works program in the face of high unemployment.

Nancy Koehn reviews Raghuram G. Rajan's new book "Fault Lines."

Looks good even if Rajan is a member of the Pain Caucus.

Basically, his view is that because of America's weak social safety net,* the Fed needs to keep interest rates low in order to keep unemployment low (something Martin Wolf has said also).
He cites three fault lines: domestic political stresses; trade imbalances among countries; and the tensions produced when financial systems with very different structures interact. All three came together to damage the financial sector in 2008, he says, and could meet again to cause another crisis.
The map that Mr. Rajan traces starts with rising income inequality in the United States -- a powerful domestic stress. Washington’s response was to provide easy credit, in particular a national home ownership strategy.
At the same time, many of the world’s big economies, including Japan, Germany and China, were growing more dependent on American demand for their exports. These nations were left with a relatively weak domestic-oriented sector. A reliance on exports led to huge trade imbalances among countries, creating another fault line.

Yet another fault line occurred with the meeting of two distinct financial systems. The first, which he calls an arms-length system, is based on transparency and legal safeguards, like those of the United States and Britain. The second, a relationship system, relies on close, informal ties among people and institutions. Examples of the latter include China, Japan and South Korea.
Mr. Rajan says foreign investors from arms-length systems who put capital in countries with relationship systems tend to erect safeguards to lower their risk -- like offering short-term loans that can be withdrawn quickly.

He describes the potentially destructive consequences of this strategy -- directly for the borrowing countries, and indirectly for the global economy. For example, when loans in countries like Indonesia started underperforming in the late 1990s, foreign investors reacted by yanking out their money. Many developing countries then experienced devastating financial crises.
Indonesia and other nations that relied on this type of foreign capital thus inadvertently left themselves open to debilitating booms and busts. It’s understandable, then, that some countries turned instead to the perceived safety of export-led growth, with its commitment to an undervalued currency and its buildup of foreign exchange reserves. The consumer-driven United States was an obvious choice to receive these exports, becoming the "demander of last resort."

All of these fault lines met in an amoral global financial system sustained by United States monetary policy. Beginning in the early 1990s, the Federal Reserve chose to keep interest rates relatively low in response to economic recoveries characterized by slow job creation and, in some instances, job losses.
"The U.S. political system," Mr. Rajan notes, "is acutely sensitive to job growth because of the economy’s weak safety nets," creating pressure for a series of ad hoc policies that have effectively steered the American economy from bubble to bubble and created damaging incentives.
* Thanks to Bill Clinton and "New" Democrats. Clinton also developed the strategy of increasing home ownership among low income workers as a way to combat increased inequality, a cause George W. Bush happily took up.