I cut and pasted this post from Huffington
I have been critical of Obama recently on several issues: the capitulation to the Big Banks, the coziness with BP, aquiescence to AIPAC, and yesterday for weak leadership in Afghanistan. All of a sudden, I think, this may be the moment for a cool reappraisal.
Remembering that all his problems were more or less inherited from the most inept and criminal administration in the nation's history and that he was faced on every side by entrenched adversaries, with the country engaged in two wars and in the midst of an economic crisis more severe than anyone wants to admit. Remember that politicians are not like other people, and that when you think you know what they're trying to do, you may be kidding yourself. Maybe the only way not to get eaten alive was to assume this iron fist in a velvet glove persona, to become the Machiavellian prince, who puts his arm around his adversaries' shoulders while he slips the vice over their gonads, and starts to turn the screw. Worked with health care, maybe working with BP and Israel, may even work with GS. Rememder the Prince does not seek resplendent triumphs, he converts a string of likely setbacks into a string small wins, and ends up way ahead.
Re Afghanistan: to "surrender" (order withdrawals) during his first year in office would have hurt him with a lot of right wingers, military Moms and Dads, and a couple powerful lobbies, so instead he appproves a surge, but at the same time shifts strategies to try to protect the lives of our young men. In his disdain for Karzai, you get a glimpse of his true feelings. A year later Karzai is unraveling, the generals are collapsing at hearings and giving interviews in Rolling Stone Magazine. The assessment is widely accepted that the war is unwinnable. Win, Win, Win. To complete this tour de force with a sardonic gesture, I hope he retains the mercenaries till the end and employs them in a rear guard action as he withdraws the troops
Tuesday, June 22, 2010
Tuesday, June 15, 2010
My new soapbox.
Sorry to be away so long. Facebook was already a distraction, but now I'm engaged with a majot time eater, the Huffington Post. I had saved the site as a news source, and visited every couple of days, but a month ago I signed up as a member so I could post a comment regarding a Kennedy wife who got a DUI. "There but for the grace of God go I." and, what the heck, two people fanned me. Wasn't that nice.
A couple days later, I read an article about a scientist who'd was being hounded off Obama's scientific team because he had written a few years ago about feeling the gay community was responsible for the aids epidemic, and, besides, the writer of the post said, the scientist was a "global warming denier" I posted that I'd been reading lately that some scientists were investigating the effects of solar activity on climate change, and proposing that hydrocarbons in the atmosphere might not be as important a factor in climate change as thought a few years ago, and also,that I didn't think his position re gays and aids was completely unreasonabe.
I don't know who was more upset, gays, global warming activists, or gay global warming activists, but I got a lot on negative responses. Well, I didn't feel that strongly about either of these subjects, so I answered the comments in fairly non-confrontational words, saying I really wasn't expert in either area.
Then I commented on an article about the Gulf disaster to the effect that Obama should have dropped a nuke in that hole within a week of the blow out and sealed the gusher off, and that BP was fooling around with ineffectual measures to appear to be doing something while actually stalling for time to drill relief wells and recover theit investment. Manwhile the environment was suffering untold damage. I wasn't trying to take an extreme position, but a few people felt that they had to tell me what an idiot I was. I didn't demure this time, responding with references to an aricle about Russia sealing a blown out well that way.
Then of course there was the Israelis and the flotilla. Obviously, I would havw words with a few people on such an event as that.
Meanwhile Janett has been stressing to me that Facebooks is family recreation and not a place to argue about politics, and I pretty much agree. Besides now I have Huffington Post. The novelty will soon wear off, I hope, and I'll resume my Faceboolk and Blogger activity. On the bright side, it was probably a good thing that I was distracted from college football last week while this Mega Conference tempest blew itself out. I think that episode ended OK for Notre Dame, and hopefully left the Big TelevEN with a little egg on its collective face.
A couple days later, I read an article about a scientist who'd was being hounded off Obama's scientific team because he had written a few years ago about feeling the gay community was responsible for the aids epidemic, and, besides, the writer of the post said, the scientist was a "global warming denier" I posted that I'd been reading lately that some scientists were investigating the effects of solar activity on climate change, and proposing that hydrocarbons in the atmosphere might not be as important a factor in climate change as thought a few years ago, and also,that I didn't think his position re gays and aids was completely unreasonabe.
I don't know who was more upset, gays, global warming activists, or gay global warming activists, but I got a lot on negative responses. Well, I didn't feel that strongly about either of these subjects, so I answered the comments in fairly non-confrontational words, saying I really wasn't expert in either area.
Then I commented on an article about the Gulf disaster to the effect that Obama should have dropped a nuke in that hole within a week of the blow out and sealed the gusher off, and that BP was fooling around with ineffectual measures to appear to be doing something while actually stalling for time to drill relief wells and recover theit investment. Manwhile the environment was suffering untold damage. I wasn't trying to take an extreme position, but a few people felt that they had to tell me what an idiot I was. I didn't demure this time, responding with references to an aricle about Russia sealing a blown out well that way.
Then of course there was the Israelis and the flotilla. Obviously, I would havw words with a few people on such an event as that.
Meanwhile Janett has been stressing to me that Facebooks is family recreation and not a place to argue about politics, and I pretty much agree. Besides now I have Huffington Post. The novelty will soon wear off, I hope, and I'll resume my Faceboolk and Blogger activity. On the bright side, it was probably a good thing that I was distracted from college football last week while this Mega Conference tempest blew itself out. I think that episode ended OK for Notre Dame, and hopefully left the Big TelevEN with a little egg on its collective face.
Sunday, June 06, 2010
A thoughtful balanced commentary.
Continuing my thoughtful balanced approach to our economic quandary.
Leonhardt on Risk: BP, the Housing Bubble and Budget
Tuesday, 01 June 2010 19:42
Share David Leonhardt's magazine piece on mis-estimating risk gets the story of BP largely right. The top executives felt free to take big gambles with safety and the environment because it was entirely a one-sided bet for them. Large profits from increasing production could mean millions or even tens of millions of dollars in additional compensation each year. On the other hand, the downside from even the worst possible disaster carried little consequence for top executives (who will still be hugely rich) or even the company since Congress capped liability at $75 million.
However he gets the story of the housing bubble and the budget deficit almost completely wrong. He argues that Greenspan and Bernanke missed the fact that the economy faced a nationwide housing bubble because we had never seen one before. While that may be partially true, this comment also ignores the incentives facing the Fed chairs. Large financial companies like Goldman Sachs and Citigroup were making enormous profits from the financing that fueled the bubble. If Greenspan or Bernanke had tried to clamp down on the bubble they would have been confronted by the full force of this powerful industry. They may have found themselves ridiculed and pushed to the side as happened to Brooksley Born when she tried to regulate derivatives in 1998 as head of the Commodities and Futures Trading Commission.
In contrast, their decision not to clamp down on the bubble led to catastrohphic results leading to the worst economic downturn in 70 years with tens of millions of people unemployed or underemployed. Yet, both Greenspan and Bernanke are still wealthy men and highly respected. In fact, Bernanke was reappointed to a second term as Fed chair in spite of his disatrous first term.
In short, the problem was not that they underestimated risk. The problem is that they face an entirely assymetric tradeoff structure. Clamping down on financial speculation was sure to have serious consequences for their careers, even if they were right. By contrast, failing to regulate properly did not seem to damage either man's wealth or stature in any major way even though it led to just about the most distrous possible outcome.
Leonhardt also gets the story of the risks from the budget deficit largely wrong. He writes:
"The big financial risk is no longer a housing bubble. Instead, it may be the huge deficits that the growth of Medicare, Medicaid and Social Security will cause in coming years — and the possibility that lenders will eventually become nervous about extending credit to Washington. True, some economists and policy makers insist the country should not get worked up about this possibility, because lenders have never soured on the United States government before and show no signs of doing so now. But isn’t that reminiscent of the old Bernanke-Greenspan tune about the housing market?"
First, it is pecular to include Social Security in this list. Social Security is growing at a relatively slow pace. It is projected to grow less rapidly than interest on the government debt. Like interest on the government debt, Social Security benefits have already been paid for in advance by their beneficiaries. Wall Street tycoons like Peter Peterson have been desperate to gut Social Security for decades and have invented numerous stories (e.g. that the Trust Fund does not exist) to advance their agenda. However a responsible newspaper should not be advancing this agenda under the guise of news reporting.
The projected growth of Medicare and Medicaid, driven by the explosive growth of health care costs in the private sector, will impose strains on the budget. However, if the growth in health care costs really follows the path assumed in budget projections it will provide a much greater burden on the private sector than the public sector. It is difficult to imagine that the public will itself to be priced out of the market for health care rather than taking simple and obvious steps that challenge the industry's power and ability to continually jack up prices. The point is that this is first and foremost a health care problem. It is only the Peterson Wall Street gang that insists on discussing the issue as a budget problem.
The second reason why the discussion of the budget is not entirely right is that we have been here before. The country has had ratios of debt to GDP in excess of 100 percent following World War II. In spite of this debt burden, interest rates remained low and the economy grew rapidly. Other countries, like the UK and more recently Japan and Italy have sustained much larger debt to GDP ratios without seeing any financial panics.
Finally, unlike Greece, which does not control its own currency, the debt of the United States is in dollars and the United States can always print more dollars. This means that the actual risk is not insolvency, but inflation, since the country would presumably print money rather than face bankruptcy. An honest discussion of the debt problem in the United States would discuss the risk from inflation. In the current environment, this is extremely low. In fact, according to a recent paper by Olivier Blanchard, the IMF's chief economist, the United States would actually benefit from a somewhat higher inflation rate (3-4 percent) since it would reduce debt burdens and lower the real interest rate.
So, the supposed threat from the deficits has been seriously misrepresented by the Wall Street deficit hawks. It is hardly irrational to disregard threats that are incoherent.
Leonhardt on Risk: BP, the Housing Bubble and Budget
Tuesday, 01 June 2010 19:42
Share David Leonhardt's magazine piece on mis-estimating risk gets the story of BP largely right. The top executives felt free to take big gambles with safety and the environment because it was entirely a one-sided bet for them. Large profits from increasing production could mean millions or even tens of millions of dollars in additional compensation each year. On the other hand, the downside from even the worst possible disaster carried little consequence for top executives (who will still be hugely rich) or even the company since Congress capped liability at $75 million.
However he gets the story of the housing bubble and the budget deficit almost completely wrong. He argues that Greenspan and Bernanke missed the fact that the economy faced a nationwide housing bubble because we had never seen one before. While that may be partially true, this comment also ignores the incentives facing the Fed chairs. Large financial companies like Goldman Sachs and Citigroup were making enormous profits from the financing that fueled the bubble. If Greenspan or Bernanke had tried to clamp down on the bubble they would have been confronted by the full force of this powerful industry. They may have found themselves ridiculed and pushed to the side as happened to Brooksley Born when she tried to regulate derivatives in 1998 as head of the Commodities and Futures Trading Commission.
In contrast, their decision not to clamp down on the bubble led to catastrohphic results leading to the worst economic downturn in 70 years with tens of millions of people unemployed or underemployed. Yet, both Greenspan and Bernanke are still wealthy men and highly respected. In fact, Bernanke was reappointed to a second term as Fed chair in spite of his disatrous first term.
In short, the problem was not that they underestimated risk. The problem is that they face an entirely assymetric tradeoff structure. Clamping down on financial speculation was sure to have serious consequences for their careers, even if they were right. By contrast, failing to regulate properly did not seem to damage either man's wealth or stature in any major way even though it led to just about the most distrous possible outcome.
Leonhardt also gets the story of the risks from the budget deficit largely wrong. He writes:
"The big financial risk is no longer a housing bubble. Instead, it may be the huge deficits that the growth of Medicare, Medicaid and Social Security will cause in coming years — and the possibility that lenders will eventually become nervous about extending credit to Washington. True, some economists and policy makers insist the country should not get worked up about this possibility, because lenders have never soured on the United States government before and show no signs of doing so now. But isn’t that reminiscent of the old Bernanke-Greenspan tune about the housing market?"
First, it is pecular to include Social Security in this list. Social Security is growing at a relatively slow pace. It is projected to grow less rapidly than interest on the government debt. Like interest on the government debt, Social Security benefits have already been paid for in advance by their beneficiaries. Wall Street tycoons like Peter Peterson have been desperate to gut Social Security for decades and have invented numerous stories (e.g. that the Trust Fund does not exist) to advance their agenda. However a responsible newspaper should not be advancing this agenda under the guise of news reporting.
The projected growth of Medicare and Medicaid, driven by the explosive growth of health care costs in the private sector, will impose strains on the budget. However, if the growth in health care costs really follows the path assumed in budget projections it will provide a much greater burden on the private sector than the public sector. It is difficult to imagine that the public will itself to be priced out of the market for health care rather than taking simple and obvious steps that challenge the industry's power and ability to continually jack up prices. The point is that this is first and foremost a health care problem. It is only the Peterson Wall Street gang that insists on discussing the issue as a budget problem.
The second reason why the discussion of the budget is not entirely right is that we have been here before. The country has had ratios of debt to GDP in excess of 100 percent following World War II. In spite of this debt burden, interest rates remained low and the economy grew rapidly. Other countries, like the UK and more recently Japan and Italy have sustained much larger debt to GDP ratios without seeing any financial panics.
Finally, unlike Greece, which does not control its own currency, the debt of the United States is in dollars and the United States can always print more dollars. This means that the actual risk is not insolvency, but inflation, since the country would presumably print money rather than face bankruptcy. An honest discussion of the debt problem in the United States would discuss the risk from inflation. In the current environment, this is extremely low. In fact, according to a recent paper by Olivier Blanchard, the IMF's chief economist, the United States would actually benefit from a somewhat higher inflation rate (3-4 percent) since it would reduce debt burdens and lower the real interest rate.
So, the supposed threat from the deficits has been seriously misrepresented by the Wall Street deficit hawks. It is hardly irrational to disregard threats that are incoherent.
Tuesday, June 01, 2010
The Joys of Apartment Living in Elgin
Due to Janetts concerns about my giving offense, this post has been deleted but will be emailed to any interested reader upon request. Email me at Jandman2002@Yahoo.com
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