Affirmative

Our financial/political system has at least as much corruption as China.  It's also really hard to see it improving anytime soon.  As an aside I think this is mostly right, but has one thing wrong [my bold]:

The Fed’s additional “Twist” is a whimper, not a shout.  In fact, that is probably a good thing, since monetary policy has its limits, and we are near them.  We expect no more from the Fed for the rest of this year unless there is a seriously negative event.

There is no reason to think monetary policy is near its limits unless the only way for it to work is provide cheap money to banks.  But that is only "conventional" monetary policy.  Monetary policy is just affecting the supply of money.  They don't have to buy treasuries thereby effectively just giving cheap money to banks and some financial institutions.  They can create $10k in every person's bank account, or buy other debt (student loans, mortgages, credit card, ...) and light it on fire.

In addition to actual monetary policy, the fed (and other central banks) can modify expectations.  Even without putting a lot more money out there, if they indicated that 4% inflation was A-OK, then we could see changes in behavior to offset that which could positively impact the economy.

So long as the Fed keeps its 2% inflation target and refuses to use its power to create money that directly helps people, yes we are probably near the limits.  But the limits are self-induced, not real.

Debt Problems

Looking at a few blurbs on balance sheet recessions (Mike Konczal has a lit rundown).  I think the economics is fine, but the focus is really on one major part: the housing bubble.  That is certainly the big problem, and the debt overhang from the bubble deflation is huge, but I think that student loan debt needs to be inserted into this as a complimentary problem for two reasons:

1. Housing debt and student loan debt land on two somewhat overlapping segments of society that do massive amounts of purchasing relative to their income/wealth. Basically young(er) people getting started, but at slightly different stages.

2. Lots of people used home equity to pay off student loans.  This was seen as a good thing (and really, it probably was).

In the years from ~2000 - 2007 one of the "smartest" things a new college grad with loads of debt and a shiny new job could do was buy a house, wait a year or so (maybe make some improvements) then pull out the equity through a refi and use it to pay off student loans/the car/credit cards.  Suddenly you are left with one bill, much smaller than the combined others, and the interest is all tax deductible.  Huge win.  Even if the house value falls, this is a pretty good deal.

Imagine a world where we didn't end up in massive debt to go to college...say 30 years ago.  Those college grads who used equity to pay off their loans would now have less total debt and would be less likely to be underwater which also makes them less likely to, say, walk away (which, in any non-recourse state is also the smart move).

College grads today could either afford to move out on their own, getting an apartment and furnishing it, or would at least have more money to spend on fun/car/clothes/whatever.

The easy fix would be for the fed to use its magical "make money" power to obliterate student loans and give say $25k to any homeowner. A better fix would be for the fed to buy up all that debt and incentivize both paying it off and spending.  This could be through the debit card plan I proposed for student loans earlier but other means could work as well. 

Just Stop Talking

Listening to Obama talk about how Romney will take us back to Bush/GOP economics and disaster makes me want to throw the radio out the window.  I just don't think that's much of an argument coming from someone who has spent his first term largely focused on implementing GOP economics!

GOP - Cut taxes (for rich people)
Obama - cut taxes (for everyone) and hasn't repealed any of W's tax cuts

GOP - Gubment debt is bad (unless it helps rich people)
Obama - a whole fucking year talking about reducing the debt!

GOP - Free marketz rulz
Obama -  free market (GOP) health care plan, less than minimum intervention in finance markets

The pisser is that when Obama talks, he frequently says the right things. But he doesn't fucking do them!  In rhetoric this election sounds like FDR vs. Regan, but in reality it's Regan vs. Hoover's stupid and evil twin.  (Note: Obama is Regan, both in this analogy, and pretty much in reality.)

Keep Treating the Symptom, Ignore the Cause

At least that's what we're doing with the recession.  It isn't entirely inaction.  Any time a bank has problems all the gubments trip over themselves to make sure the banks get lots of money.  When it's people who are having the problems they don't care.  Unfortunately so long as people side isn't fixed, the banks will just keep turning up more problems. 

Is That Irony I Smell?

Sniffing the salts, methinks:

WASHINGTON — Announcements of a housing recovery have become a wrongheaded rite of summer, but after several years of false hopes, evidence is accumulating that the optimists may finally be right.

Then it proceeds to say why this time it's REAL!!!  Except it isn't.  So long as huge numbers of homes are underwater and lots of foreclosures are kept off the market to hold back the flood, there will be no recovery in housing.  Since no one has been willing to do what it will take to correct, it won't correct until the economy fully recovers, and no one is doing anything to make that happen either, so no, housing isn't back.

About Right

Near the end of this report is an unsurprising finding:

Quinnipiac calculated Obama's approval rating among voters in all three states who said they were undecided or intended to vote for someone other than Obama and Romney. In each state, those uncommitted voters (around 15 percent of the electorate in each case) expressed strongly negative views of Obama's performance. In Florida, just 33 percent of them approved of his performance. In Ohio, just 27 percent approved. Pennsylvania was toughest of all: just 23 percent approved.

The saving grace for Obama? Those voters today think even less of Romney. Among these undecided voters in Florida, just eight percent view Romney favorably-compared to 41 percent who are unfavorable toward him. In Ohio, the ratio is 10 percent to 47 percent; in Pennsylvania, it's 12 percent to 45 percent. Obama's favorable ratings aren't much better with those voters, but they are higher in all three states. Both men today appear to be standing in a hole with the voters who could ultimately decide which one of them gets over the top in November.

So "undecideds" think Obama sucks and Romney sucks worse.  A fair assessment.  I'd venture that the same belief is held by many Obama "supporters" and that reversing the roles of suckeyness would get the opinion of a fair number of Romney "supporters".

Extreme Politics...

I'm a bit perplexed by this article by Mark Thoma: Extreme Politics Will Make US the Biggest Loser.  I don't really disagree, and a lot of the Republican side is so self-evident that only the clueless or willfully stupid (who probably won't be reading it anyway) would not already be aware.  I'm perplexed by his final hearkening for a time that never really was, and that really shouldn't be--people have differences in opinion and politics reflects that: but today only Republicans fight for theirs--but even more so by his description of a major difference between the parties with the Democrats thinking:

...an activist government is necessary to keep markets functioning, and to smooth economic fluctuations. Without government oversight, markets would be captured by monopoly power, consumers would be at the mercy of unscrupulous producers, there would be distortions from adverse selection, information asymmetries, moral hazard problems, and so on. In addition, if government does not take action when a recession hits, the downturn will be much worse and much longer than necessary.

Now, I know a lot of Democratic voters are of such a mind, it's pretty clear that most of the truly left leaning pundit class thinks that way, and there do seem to be a handful of  politicians that would agree, but Obama's been in office since 2008, and for the first two years had large majorities in the House and Senate and we didn't get anything like that.  I know, the Senate is a clusterfuck of a governing body, and no matter how much in their heart of hearts they may have secretly wanted those things, there was no chance of them happening. 

But they didn't really try, there were no bills that came to the floor that matched the above description of Democrats, that were then watered down by the legislative process into weak tea.  All the bills started out as watered down, pathetically weak compromise bills that may as well have been written by Republicans...then they got worse.  This was true of health care, financial regulation/reform, immigration and energy legislation (which got so bad as to not exist!).

So, while, yes, Republicans are bat-shit insane, no, there really is no stark policy contrast.  The Democratic party hasn't really done much to deal with any of the issues raised, and seems more afraid each year to even mention them.  The Obama campaign sort of goes after Romney's record with Bain, and Corey Booker and Bill-Fucking-Clinton step out in defense of those misunderstood, and improperly maligned financial wizards who destroyed our fucking economy and have not had their lives altered in any meaningful fucking way!

Infrastructure spending?  Like the tiny fraction of the now spent stimulus that Dems showed no willingness to go back to?

Climate change (global warming), or at least the energy initiative?  Maybe Obama's policy to drill for more fossil fuels than W did?  Or how about the GOP cap and trade plan that never got passed because of the GOP obstruction?

For a party that supposedly believes in these things they are really fucking shitty at actually doing anything related to them.

So really, if the GOP wins big this November, don't expect any meaningful change...even for the worse.  There was a time when I thought that it might wake up the remaining Dems and get them to fight back, but then 2008 came and gave them a win, and they went full in for Republican policies and talking points as well as bipartisan fetishism.  Fuck em.

Random Aside

Read frustrating column.  Came across this comment that reminded me of another post about this:

One of the things I don't get is that in the 2004 election campaign, the Republicans successfully made a lot of noise about John Kerry being a "flip-flopper," waving flip-flops around at political gatherings and generally tarring him with that label, because he changed his mind about a couple of things. Meanwhile, Romney contradicts himself constantly, and, first, the Democrats don't start doing silly stunts like waving flip-flops around and, second, the Republicans don't even notice his lack of consistency. I have to say I'm glad that the Democrats don't indulge in such childish actions, but, OTOH, the stunts do seem to have a real impact on a large segment of the voting public.

(I don't remember where the other post was)

There seems to be some noise from Dems who want [Obama] to attack Romney as a flip-flopper similar to 2004 against Kerry, and I really don't.  The attacks on Kerry were really indicative of stupid, small-mindedness.  People change their minds on things.  Smart people, who are confronted with evidence are even more likely to change their mind.  Only neanderthal, knuckle-dragging, mouth-breathing morons like the last president can keep believing the same thing no matter what.

This isn't to say that Romney isn't craven.  His "changes of mind" seem far more pandering and opportunistic than, say, Obama's recent return to believing gay marriage should be allowed, and there is a big difference between actually changing opinion and just stating whatever garbage you think the appropriate demographic wants to hear.

Still: attacking people for changing their minds--for flip-flopping if you will--is a petty attack by small minded people.  And we seem to hear it far more often from Republicans.

US Currency

Just about every time I travel abroad I am reminded of how stupid our currency setup is here.  I got back from Israel recently.  The smallest denomination coin: 1 NIS (~US$0.26), the largest: 10 NIS (~$2.60).  The smallest denomination bill: 20 NIS (~$5.20).  Also, the bills are made of plastic, not paper.

We have a bizarre sentimental attachment to pennies and dollar bills here.  It makes no fucking sense, and people get strangely paranoid when someone suggests getting rid of them. ("If we got rid of pennies, the poor making cash purchases would be screwed over by businesses!")

We should abolish the penny, the nickel, and the dollar bill, up the minting of $1 coins and add a $2 coin.  We should at least switch the bill material to plastic, which is much longer lasting and possibly a bit harder for forgers to reproduce.  Of course all these things make financial sense so there's a good chance Republicans are more opposed than Democrats, but the real blame on this lies with average citizens.

The Meh of Casinos

I'm going to second this post on how uninteresting casinos have become.  I remember enjoying going to places with a casino because of the novelty.  I enjoy blackjack (and poker, but that takes too much time in a casino) but the last conference I went to in Vegas, I really didn't care much, and when we hit up a nearby casino at a bachelor party I think we spent a total of an hour and a half there, and most of that walking around looking for something to play (no one wanted to drop $25 a hand on blackjack and slots are boring).

There are casinos everywhere today.  Gambling is no longer some exotic activity.  Why would anyone want to go to Atlantic city today?  There are much nicer stretches of beach/shore, and if you want to spend time in a windowless casino, why there's probably one nearby.

The other downside of gambling (including both casinos and the lottery) is the upward transfer of wealth. Basically, the gubment wants money, but taxes is bad so Gambling = Win!  The problem is that the bulk of gambling revenue comes from poor and middle class people (I'll grant there is a subset of wealthy idiots who throw lots of money away at casinos who would never buy a lottery ticket). And, the government revenue comes out of the massive profits the companies make.  Basically gambling as revenue stream for the government is the equivalent of a regressive tax plan, combined with a giveaway to rich people.

I'm not actually opposed to casinos and lottery, but I think that it should be balanced against a highly progressive income tax. 

The Death of TV is Greatly Exaggerated

Or something.  Sony and Panasonic (and really Samsung too) definitely have some problems in their TV divisions, and it's a combination of several things happening the past few years, bad economy probably chief among them.

Televisions are not yet entirely commodity, however, and there is good room for growth in the future, provided some meaningful changes occur.  Large, lightweight, low energy screens have massive potential.  For gaming and watching movies, of course, but that's just what we do now.  Think about the benefits of having a wall sized screen, that when turned off, looked like a wall with some art on it, or even better a picture window Imagine if anyone could convert an entire wall to a screen that would, when powered "off" present as a picture window with a live view from somewhere else in the world...

To really do this at a level where every new house/apartment would be built with a display wall would require a few changes: lower energy use chief among them.  Really, though, we are pretty nearly there in terms of cost and screen capabilities.  The biggest issue is setup and control.  I would envision a bank of modular panels, each one an HD display, and any 2x2, 3x3 and maybe 4x4  of which could be grouped together to form a larger display, with other panels around the selected group being "environmental" (typically black, but with the occasional one on the web).  Separate panels make repair easier, and less costly, and greatly enhances versatility--watch TV on one side while someone browses the web on the other.  

The technology exists today to do this, but the energy costs and the installation costs really keep it from becoming viable.  To do this today would require lots of computing and graphics power--we want to be able to have these managed all together--though relays could help reduce the cost of external connections like game consoles.  Still, it's cheaper by far to build an in home theater.

The Other Way Actually Isn't

This column is mostly fine, but this just isn't [quite] correct.

Nobody has to pick up any of the bill. The ECB can print free money and give to whoever they want, including the banksters. Now I get that there might be existing legal and political barriers to doing such things, but conceptually it is completely sound. Everybody gets a do-over! Huzzah!

Atrios is referring to another column saying that Germany would have to pay most of the bill to rescue its neighbors.  He's right that nobody has to "pay the bill" but the effect of the ECB printing money would not be nothing.  One of the ways that this would function to keep everything balanced is to push German inflation higher so that lower, but still positive, inflation in the periphery would allow the balance of accounts necessary to right the ship (more or less per Paul Krugman's frequent discussion of this).

Again, German inflation would be a good thing for the zone as a whole, and as Germany has benefited quite a lot from the Euro thing, it is fitting, but it isn't cost free, and German citizens probably wouldn't look kindly on it.  They would be paying, not through tax dollars but through a shrinking of their spending power over time that was faster than that in the periphery.

I want to clarify: I think that the inflation targets are far too low (historically it seems 4% may be a better number...lower is fine iff overall economic growth and unemployment are in good places), but inflation is a real cost, and not only to those with accrued wealth.  Higher inflation will hurt people who have little to no upward wage mobility (e.g. fixed incomes, and people in the US on minimum wage).

Surprising Obliviousness

So I read through this story on college grads "kids" moving back in with their parents and how it is a good thing for them.  On the face of it: duh.  In a crappy economy with very expensive cost of living (housing and student loan debt in particular), the ability to move back in with mom and dad is a sensible thing to do and a very smart move from a financial/career perspective.

But the professor author, who should really know better, makes this seem like a good thing.  It isn't.  It's something that happens when the job market sucks, the rent is too damned high, and students (and their parents) have to take on crippling levels of debt to go to college...which is pretty much required as the job market for college grads is only crappy and not non-existent.

The bigger problem with the piece is this however:

Both parents and children understand that in a world where the young are saddled with debt and find it difficult to quickly enter a career, parental support — where possible — is indispensable. [my bold]

It isn't always possible.  In fact grads and students with more debt, with less family support and therefore with greater need to get a job (any job) as soon as possible are most likely to not have this family support available.

The entire piece seems to say "it's okay that your son/daughter is at home, they aren't loosers, they are clever and will have better futures as a result" but the "your" in this case isn't struggling families. It's families that can afford to have their adult children live in the house and sponge off mom and dad.  Yes, the economy sucks, and it sucks for the children of upper middle class and higher parents, but is this professor unable to comprehend that it may really, really suck for those of his students who don't have that luxury?!?

Rather than console those who don't really need the economy to pick up too badly he should use his post to educate those parents as to exactly how bad things are and encourage them to maybe do something about it.

People need to know

Unlike me, Atrios gets read when he says this.  ...Of course, even he is not read by the people who need to get the message. 

So long as college grads are fucked, the economy won't recover.  The boomer generation is set or screwed already.  My parents' generation is still going, but they are largely too established in one way or another to be the source of change.  My generation and even more the one following are the ones that can really get us back on track (economically, anyway, politically, we still need the older folks).  If we're in debt to our eyeballs and having a hard time finding decent jobs things won't get better fast enough.

Debt is Hurting the Economy...

...Just not the way Republicans (and Germans) think.

In the US, the economy really sucks if you are un-/under- employed.  But there are still a lot of people who have jobs--even good ones--and they could provide a much needed boost if it wasn't for personal debt.

Young people buy lots of things.  We are just starting out, and need all sorts of things that we didn't have/couldn't afford in school: houses, cars, furniture, families, pets, vacation.  These all cost money, which helps the economy.  But now we are saddles with lots of debt--mostly student loan--so instead of getting/doing all these nice things with our new jobs, we are paying off debt.  In the 4 years since I started at my job I have paid off roughly $50,000 worth of debt that was accrued in some form or another while at school.

A more detailed breakdown:
~$22k on credit cards, of which about half was medical and moving expenses.
~$28k on student loans

I also paid off my car and some of my house, but I bought both of those since I started work. 

Of course it's worse than those numbers.  Interest means that closer to $70k was spent on debt reduction over that time frame.  That is $70k that couldn't help boost the economy at all.  Now if I had been debt free, a decent fraction of that would have ended up in savings/retirement accounts, to be sure, but a pretty good fraction would have gone for/would be going for house projects/rennovations, durable goods like furniture, toys like a road bicycle, probably more clothes/shoes (lots of holes in some of mine), ...

I still have student loans to go, so this is continuing, and I'm just one person.

If we handled education properly in this country, the debt levels would be dramatically lower for young people who have the most spending to do.  Managing health care properly would further reduce debt levels, especially for those who can't afford insurance but still manage to get hurt/sick.  This is excluding the immense good that could be done by properly handling the banks/housing mess.

Debt is hurting our economy badly, just not federal debt.  And more of the latter could fix the former.

Poor Deluded Writer

I have some pretty serious reservations about the notion that Philly is or could be a global top 10 shopping destination, but the writer of that seems to have a particularly delusional view as evidenced by two references to King of Prussia mall in a very short bit.  The latter of which was implying "We're so awesome that we're awesome even when you discount our most awesomest shopping place evah!"

King of Prussia is a suburban mall with no quick/easy transit access to the city, and without any type of character that can't be found at any of a thousand other malls in this country.  No city will ever make a top 10 anything for a mall that you have to drive to in the suburbs. 

"Imagine, a place that you can go to a Cheesecake Factory, a Macy's, a Restoration Hardware, a Victoria's Secret and a Teavanna!!!"  I know that that makes me think of KoP...or just about any other mall I've been to in Texas, Kansas, Illinois, North Carolina, Minnesota, Oregon...

If someone were to ask me where to go shopping in Philadelphia, first, I would look around, because no sane person would ask me about shopping.  Then I'd probably say that there seem to be a lot of shops around Rittenhouse. And I don't even live within the Philly city limits.  KoP is just a fucking mall.  So what?

I suppose that connoisseurs of indoor shopping malls may have a particular fondness for KoP, but a) I'm pretty sure that those people are the losers of the traveling shopper set, and b)KoP isn't in Philly, and it really isn't terribly convenient, so Philly wouldn't be on the damned list anyway, other than "...it's within an hour drive of Philly, and within a 3 hours of NY, Baltimore and DC."

Apparently, the purpose is to be an ass...

The fact that this obscenely wealthy person defending the obscenely wealthy is so very wrong pretty early on is reason enough to discount any argument he subsequently makes: 

Google’s contribution is obvious. What about investment banks, with their complicated financial derivatives and overleveraged balance sheets? Conard argues that they make the economy more efficient, too. The financial crisis, he writes, was not the result of corrupt bankers selling dodgy financial products. It was a simple, old-fashioned run on the banks, which, he says, were just doing their job. 

Really.  He argued that, thus demonstrating a complete lack of understanding of his own fucking industry.  Could any rational person believe that this guy is capable of positive contributions to society? In multiplier talk, I would argue that his wealth likely has less than a 1x multiplier, meaning he would produce more economic benefit if all his money were redistributed to people with a clue...or at least people who need to buy milk. I don't doubt that there are wealthy investors who have wealth multipliers >1, and in some cases maybe >>1, but this idiot isn't one of them. 

That said, let's assume that his multiplier is > 1.  If such a terribly stupid person, just by virtue of having wealth, had a multiplier or > 1, then there is nothing inherent to the wealthy that justifies any individual having such wealth other than the wealth itself.  It's a circular argument.  And it follows that if the only economic benefit that wealthy provide is simply having wealth, then there is a strong social good that could be done by having wealthy people not be assholes, and probably not be idiots as well.

900 Million?

I don't doubt that there are that many user id's in circulation, but, hell, I've got two accounts (one that I can no longer access because Facebook has (or at least had) no functional retrieval mechanism for lost/forgotten passwords.

If The Gubment Was Really a Business...

Then it would pretty much never enter into agreements like this. Just a quick question to any(republican) who thinks that a government leasing rights to any funding source is ever a good idea: If a private investor is willing to pay for it, don't you think that, maybe, the government has a better source of revenue than whatever pile of cash they could get for it? I was living there when this happened, and it seemed really, really dumb even then. I couldn't imagine how anyone could think that $500M was worth giving up 99 years (!) of revenue. Further, it seemed to me that the investors would wan to maximize their revenue, and so would increase rates. Guess what happened?

You really don't have to be very smart to realize that any lease that a private investor is going to go for will mean less money for the city/state/federal government. Also, it means that the citizens get screwed, particularly in the future, when the great, great grandchildren of the current politicians are paying fees that go straight to some private investor's bottom line. Stupid and evil, but mostly stupid.

Pink Slime = Good Thing

Look, to the extent that people are going to continue to eat meat (as I do), the most responsible--and probably humane--thing to do would be to waste as little as possible. Pink slime helps do that. If there were another method that accomplished the same but was less...icky?...then that would be fine too. As it is Americans eat too much meat and waste too much food, I don't see making us more wasteful as a good thing.

As for the asinine commenter who stated:

This is factually incorrect. No cows need to be slaughtered because the nation has absolutely zero "need" for beef. There is a desire for beef, but not a need. People eat beef because they choose to, not because they need to.

Get the fuck over yourself! While I think it would be good if the cost of meat (including beef) went up to something closer to it's unsubsidized market price, that isn't going to happen, at least not very soon. So it is factually correct to say that we would kill a bunch more cows if we banned pink slime. Living in a fantasy where people just ate less meat if a ban were to happen is counterproductive.