Speaking of Taxes

How much would we spend on war if terrorists had blown up a bridge and caused a train carrying vinyl chloride to crash into the Delaware river? We need to borrow at negative interest, hire unemployed workers, buy cheap materials, and use idle equipment to fix the $2.2 trillion (about what the Iraq war cost?) of crumbling infrastructure that the American Society of Civil Engineers says we need to fix in the next five years, or we're going to see a lot more of this.--SS     

Speaking of Taxes:

How about we spend some money to fix our crumbling infrastructure so things like this don’t happen:

A bridge collapsed in the West Deptford area of New Jersey on Friday, sending several train cars carrying toxic chemicals crashing into a creek near the Delaware River, the U.S. Coast Guard said.

Vinyl chloride, a highly toxic and flammable chemical, is believed to be leaking into Mantua Creek, Petty Officer Nick Ameen told CNN. No serious injuries have been reported, but nearby schools are on lockdown, a borough emergency official said, and people in the immediate area have been evacuated. 

A representative for Underwood Memorial Hospital told CNN that the hospital has treated 18 patients with respiratory issues.

That would make too much sense.

No, the Social Security Trust Fund Isn't a Fiction

K-Drum: "Long story short, for the past 30 years, the poor and the middle class overpaid and the rich benefited. For the next 30 years or so, the rich will overpay and the poor and the middle class will benefit."

This is, of course, why rich people are so upset about Social Security right now, despite the fact that it's fine, and would be fine for many decades to come if we just raised the cap on wages subject to the tax.--SS     

No, the Social Security Trust Fund Isn't a Fiction:

Charles Krauthammer is upset that Dick Durbin says Social Security is off the table in the fiscal cliff negotiations because it doesn't add to the deficit:

This is absurd. In 2012, Social Security adds $165 billion to the deficit. Democrats pretend that Social Security is covered through 2033 by its trust fund. Except that the trust fund is a fiction, a mere “bookkeeping” device, as the Office of Management and Budget itself has written. The trust fund’s IOUs “do not consist of real economic assets that can be drawn down in the future to fund benefits.” Future benefits “will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures.”

What Krauthammer means is that as Social Security draws down its trust fund, it sells bonds back to the Treasury. The money it gets for those bonds comes from the general fund, which means that it does indeed have an effect on the deficit.

That much is true. But the idea that the trust fund is a "fiction" is absolutely wrong. And since this zombie notion is bound to come up repeatedly over the next few weeks, it's worth explaining why it's wrong. So here it is.

Starting in 1983, the payroll tax was deliberately set higher than it needed to be to cover payments to retirees. For the next 30 years, this extra money was sent to the Treasury, and this windfall allowed income tax rates to be lower than they otherwise would have been. During this period, people who paid payroll taxes suffered from this arrangement, while people who paid income taxes benefited.

Now things have turned around. As the baby boomers have started to retire, payroll taxes are less than they need to be to cover payments to retirees. To make up this shortfall, the Treasury is paying back the money it got over the past 30 years, and this means that income taxes need to be higher than they otherwise would be. For the next few decades, people who pay payroll taxes will benefit from this arrangement, while people who pay income taxes will suffer.

If payroll taxpayers and income taxpayers were the same people, none of this would matter. The trust fund really would be a fiction. But they aren't. Payroll taxpayers tend to be the poor and the middle class. Income taxpayers tend to be the upper middle class and the rich. Long story short, for the past 30 years, the poor and the middle class overpaid and the rich benefited. For the next 30 years or so, the rich will overpay and the poor and the middle class will benefit.

The trust fund is the physical embodiment of that deal. It's no surprise that the rich, who didn't object to this arrangement when it was first made, are now having second thoughts. But make no mistake. When wealthy pundits like Krauthammer claim that the trust fund is a fiction, they're trying to renege on a deal halfway through because they don't want to pay back the loans they got.

As it happens, I think this was a dumb deal. But that doesn't matter. It's the deal we made, and the poor and the middle class kept up their end of it for 30 years. Now it's time for the rich to keep up their end of the deal. Unless you think that promises are just so much wastepaper, this is the farthest thing imaginable from fiction. It's as real as taxes.

Why economists love Intrade and regulators hate it

I finally figure out how to take money from wingnuts and climate science deniers, and the government shuts it down. Figures.--SS     

Why economists love Intrade and regulators hate it:

"...if the CFTC is really so worried about speculation, it could start paying closer attention to, say, trillions of dollars worth of credit derivatives and swaps trading that no longer appear to have any useful purpose, rather than worrying about tiny sites like Intrade. What’s more, allowing prediction markets to operate as licensed exchanges would allow more government oversight of what happens to the money."

Republican Creates Best Excuse Yet for Ignoring Grover Norquist | Politicker

My teabagger congressman comes up with the best "dump Grover" excuse yet.--SS     

Republican Creates Best Excuse Yet for Ignoring Grover Norquist | Politicker:

“The Congressman signed the pledge as a candidate in 2010 for the 20th Congressional District,” his spokeswoman explained. “Regarding the pledge moving forward, Congressman Gibson doesn’t plan to re-sign it for the 19th Congressional District, which he now represents (the pledge is to your constituents of a numbered district).” 

Indeed, the pledge itself is indeed addressed “to the taxpayers of the _____ district,” with the candidates filling in the blank. However, the next line of the pledge says “and to the American people,” which calls Mr. Gibson’s logic into question.

Collins' silly Sunday-show standard

Susan Collins proves that there are no more moderates in the GOP.--SS     

Collins' silly Sunday-show standard:

Getty Images

If Sen. Susan Collins (R-Maine) wants to be considered the last moderate Republican standing, she's going to have to drop this outrageous campaign against Susan Rice. Consider this latest complaint (via Kevin Drum).

Collins told reporters she was "troubled" that Rice had "decided to play what was essentially a political role at the height of a contentious presidential election campaign" by appearing on five political talk shows to present the administration's position.

So, let me get this straight. The week of a terrorist attack against a U.S. consulate, the Obama administration dispatched a U.S. ambassador with foreign policy experience to the Sunday shows to update the public and the media on what transpired, based on the best available information. This, according to Susan Collins, is "troubling" because it made Rice "political."

Is there something in the water in the Republican cloakroom?

Administration officials go on Sunday shows all the time, this has been the case for decades, and I can't recall any policymaker from either party ever complaining about the practice before. Indeed, Collins' whining is arguably dumber than John McCain's -- McCain complains about what Rice said on the Sunday shows; Collins is complaining that Rice agreed to appear on the Sunday shows in the first place.

Funny, in 2004, National Security Advisor Condoleezza Rice appeared on a Sunday show shortly before a presidential election and repeated campaign talking points, praising George W. Bush as "a strong leader" after a debate performance. A few months later, Rice was nominated as Secretary of State, drawing praise from Susan Collins. If she found it "troubling" that Rice was being "political," Collins forgot to mention it.
Indeed, the Rice-to-Rice comparison is especially problematic for Collins, because it makes her indictment yesterday seem that much more ridiculous.

---

Yesterday, the Maine Republican complained, for example, that Susan Rice, in her capacity as the assistant secretary of state for African affairs during the Clinton administration, failed to appreciate the "threat assessment" surrounding two U.S. embassies attacked by al Qaeda in 1998.

Zach Roth's response rings true.

[A] far more devastating terrorist attack occurred three years later, when a different Rice, Condoleezza, served as National Security Adviser to President Bush. Indeed, in August 2001, Bush and Condoleezza Rice received a CIA memo headlined: "Bin Laden Determined To Strike In U.S." If ever a government official "had to be aware of the general threat assessment," it was Condoleezza Rice then. 

Collins didn't think so, though. It's easy to "go back now and pick out a clue here and a tidbit there ... but we have to keep in mind the environment," Collins said when the memo surfaced in 2004. "We have to keep in mind the volume of reporting that the president and his advisers are dealing with each and every day." 

The following year, Collins voted to confirm Condoleezza Rice as Secretary of State, praising her "professional experience and personal integrity."

Condoleezza Rice failed to take the al Qaeda threat seriously before 9/11, made demonstrably false claims about Iraq before the launch of a disastrous war, and routinely played the role of a partisan activist, despite serving in an NSA role that has traditionally been non-partisan. Susan Collins wasn't troubled by any of this when she voted to make Rice the Secretary of State.

Susan Rice appeared on a Sunday show and repeated the best available information about an attack on a U.S. consulate. Susan Rice is so "troubled" by this, she's going along with a coordinated-but-stupid smear campaign.

The farce continues.

Postscript: Just to clarify something, the current Secretary of State was a politician (senator and presidential candidate). John Kerry is a politician (senator and presidential candidate). For Collins to argue that Rice's "political" qualities make her a poor choice for the State Department is pure nonsense.

Three Presidents Walk into a Room ...

Here's an excellent read from Steve Erickson for anyone who enjoys American history.--SS     

Three Presidents Walk into a Room ...:

For a while now I’ve had a play in my head called “Three Presidents” that, not being a playwright, I haven’t had the wherewithal to think through. The third and sixteenth presidents of the United States meet in front of the White House and introduce themselves. Number 16 knows all about Number 3, of course, while Number 3 is at once charmed and slightly disconcerted that in its selection of presidents like Number 16, the country has become so populist, so …Jeffersonian. After remarking on how the White House is rather less approachable than in their own times, the two men eventually file through security into the West Wing, and finally are escorted into the Oval Office. This in itself captivates them, since the Oval Office as we now know it is less than 80 years old. The former presidents hand their coats to the valet and make themselves at home, and after a brief interlude begin to wonder aloud when the current president will appear, at which point the rather bemused black man holding their coats informs his predecessors that the current president has already appeared.

America is encrypted in the mathematical sequence 3 > 16 > 44. For different reasons, Thomas Jefferson, Abraham Lincoln, and Barack Obama are in the news lately—one the subject of a book, the other of a movie, the third of an election. They are related by more than their office; in one fashion or another, the great national crucible of race lies at the center of each of their stories. Jefferson embodies the American contradiction, his thoughts and actions and life all at odds. As a young member of the Virginia legislature when the state still was a British colony, he introduced futile anti-slavery measures before going back home where his slaves awaited him, just as he wrote an anti-slavery clause in the Declaration of Independence that was excised in part so that his own state would sign. Cheap psychoanalysis is irresistible. Did Jefferson strike anti-slavery postures that he knew were doomed, so that he could tell himself he tried to live up to his ideals in the face of both his own corruption and a system that allowed more for that corruption than for idealism? As the years passed, his excuses grew more feeble as circumstances grew more complicated—including the 37-year relationship with a slave by whom he had six children, and finances so ruinous that, put crudely, his slaves were among his only assets—until at the end, the man whose written words of equality electrified the world couldn’t bring himself to write the word “slavery” in his otherwise exhaustive correspondence with rival John Adams. Jefferson was America walking like a man, to paraphrase a Robert Johnson blues—its idealism and betrayal, its transcendence and rapaciousness.

If anyone else lays claim to authorship of the American idea, it’s Lincoln, 17 years old and living in Indiana (where his family moved because it wasn’t a slave state) when Jefferson died on the 50th anniversary of the first July 4th. Lincoln confirms as much as any single figure history’s Great Man theory, which leftists disdain as overly romantic, but he only became that great man in the last three years of his life, during which he rewrote and updated Jefferson in his November 1863 speech at the Gettysburg cemetery. Then, at his second inauguration a month before his murder, he gave the single most revolutionary speech ever by a president. This was the address that stipulated the price that the country must pay for debasing the Jeffersonian ideal; it was an address that explicitly said God wasn’t on our side because, in our ownership of human beings, we hadn’t been on God’s side. Given the agendas that people bring to their perspectives on Lincoln, it’s easy to lose track of what an accelerating work in progress he was on the issue of race. While a founder of the Republican Party as an anti-slavery party, he wasn’t an abolitionist when he emerged as the dark-horse victor on the third ballot at the party’s 1860 convention; early in his presidency, slavery was of secondary concern to Union-saving. By the end of his first term, however, Lincoln plotted with Frederick Douglass in the White House the sort of guerrilla raids on Southern plantations for which he condemned John Brown five years before. He emerged as his nation’s pre-eminent visionary when his views of America and race aligned into something morally and philosophically (and, it should be acknowledged, strategically) coherent.

Lincoln and Jefferson possessed an imagination at least as sweeping as their intelligence, so it’s possible that sometime mid-conversation there in the Oval Office, they might actually start to wrap their heads around the fact before them that takes the form of the 44th president. Obama might remind Lincoln of the long-ago trip down the Mississippi and the sight of men in chains on auction blocks that haunted him the rest of his life; as the son of mixed-race parentage, at a height similar to Jefferson’s, he might remind the third president of the sons by his slave-mistress. These sons so reminded visitors to Monticello of Jefferson himself that the truth of the relationship with Sally Hemings was indisputable long before DNA caught up with the impostor that called itself “history.” Unclear even to a fly on the Oval Office wall at this meeting is whether the sudden vantage point of a couple of centuries would lead Jefferson to muse, as Obama might well muse, how it has been that the country always was more offended by Jefferson sleeping with a black woman than owning her. Now the same country elects, twice, a biracial Hawaiian—the stuff of a Lincolnian tall tale. What Jefferson and Lincoln would grasp more quickly is why Obama’s image has been radicalized by many in the same country beyond what reality supports, why Fox Nation insists on creating an Obama who doesn’t exist and who bears no resemblance to the Obama the rest of the country knows. In many ways, Number 44 is a political conservative compared to his two guests whom Tea Party patriots claim to so revere.

Possibly one of the reasons I haven’t written “Three Presidents” is that I don’t know how it ends. On the other hand, a writer can’t be tyrannized by uncertain endings, and 3, 16, and 44 are interesting enough characters that if they talk long enough, they’ll provide their own ending. They have a bond: Each is erudite and likes ideas and likes to read; each is the most engaging person in any room he’s in, provided he chooses to be; each is capable of becoming remote, receding into himself. Each has to duck sometimes walking through a doorway. Each has considerable reasons for being awed by the other two. Each is the incarnation, and therefore the keeper, of the American Promise. And when finally the small talk of tall men is spent and uncomfortable silence falls, it’s because each understands that, at the very moment in 1776 when we made that American Promise, we broke it, and have spent the 236 years since trying to keep it.

What's Holding the Economy Back? The Collapsed Housing Bubble, End of Story | Beat the Press

Pravda on the Potomac still doesn't understand the housing bubble.--SS     


What's Holding the Economy Back? The Collapsed Housing Bubble, End of Story | Beat the Press:

The major media outlets did their best to ignore the housing bubble as it was growing to ever more dangerous levels. Incredibly, they still cannot recognize and understand the bubble even after its collapse sank the economy. Hence we get the Washington Post offering us 10 charts that explain "what is holding back the economy. 

Of course the Washington Post is a large corporation so they can waste money on unnecessary and misleading charts. Since CEPR is a small not-for-profit, we explain it all in one chart. 

Go read the whole thing: What's Holding the Economy Back? The Collapsed Housing Bubble, End of Story

The Worst Argument Against Going Over the Fiscal Cliff

You can often tell the best arguments by the absurdity of the counter arguments.--SS     


The Worst Argument Against Going Over the Fiscal Cliff:

Politics aside, there's no serious argument to be made against the idea of sending all the members of Congress home and then negotiating on budget matters under the new baseline. From the new baseline, all Democrats and Republicans disagree about is how much to cut taxes by and how much to increase spending. Those are issues where compromise can be found. It'll take some negotiating, but it can get done fairly easily.


Patty Murray, successful Democratic Senatorial Campaign Committee chair and supercommittee ringleader and now incoming top Senate Democrat on the Budget Committee seems to be the highest-profile politician out there making the case. But you can tell how ironclad the argument is by just reading the absurd counterarguments:

Some Democrats off Capitol Hill are also skeptically eyeing the strategy.

“Markets are going to go into an absolute tailspin, and I don’t think we want to risk that, especially with leadership right now trying to find a deal,” said Gabriel Horwitz, director of the economic program for Third Way, a centrist think tank. “I think the market reaction is going to happen immediately.”

So think about how this goes. On Monday, a new baseline goes into effect. In response to the higher taxes and spending cuts, markets crash. Then on Tuesday, legislators agree to cut taxes, markets rise. On Wednesday, legislators agree to increase spending, markets rise. As a result, you'll have had a net transfer of wealth from panicky people to sensible people, and by the end of the end of the week "market reaction" will be on to the next thing. By Friday, the president can announce the formation of a blue-ribbon panel to formulate a proposal for revenue-neutral tax reform based on the new higher-revenue baseline.


Financial markets are important both substantively and as a useful source of information. But it would be absurd for policymakers to try to target short-term fluctuations in financial markets. They should try to enact decent economic policy. If the best chance of doing that is to start from the new baseline—and it is—then they should start from the new baseline. Sparing CNBC obsessives 48 hours of antsiness isn't a good reason to do anything.

Republicans face unexpected challenges in coastal South amid shrinking white vote - The Washington Post

Lee Atwater's southern strategy is on its last legs.--SS    


Republicans face unexpected challenges in coastal South amid shrinking white vote - The Washington Post:

"The nation’s first black president finished more strongly in the region than any other Democratic nominee in three decades, underscoring a fresh challenge for Republicans who rely on Southern whites as their base of national support.

Obama won Virginia and Florida and narrowly missed victory in North Carolina. But he also polled as well in Georgia as any Democrat since Jimmy Carter, grabbed 44 percent of the vote in deep-red South Carolina and just under that in Mississippi — despite doing no substantive campaigning in any of those states."


Read the whole thing: Republicans face unexpected challenges in coastal South amid shrinking white vote.

Government Granted Monopolies Lead to Corruption: The Case of Prescription Drugs

Occasionally, Fox on 15th St. stumbles across something important, and yet they still miss the point.--SS     


Government Granted Monopolies Lead to Corruption: The Case of Prescription Drugs:

There is a large economic literature that shows how trade protection, that might raise the price of products by 15-20 percent, leads to political corruption. The argument is that the beneficiaries of this protection will use their political power to try to maximize the rents they get from this protection.

For some reason economists have not shown the same concern over the granting of patent monopolies which can raises the price of the protected product many thousand percent above the free market price. This is especially an issue in the case of prescription drugs. Drugs that would sell for $5-$10 per prescription as generics in a chain drug store instead sell for hundreds or even thousands of dollars per prescription because of the government granted patent monopoly. The matter is complicated further by the enormous asymmetry in knowledge: the drug company knows much more about their drugs than doctors or patients.

The Washington Post has an excellent front page story that documents how drug company abuses in the research process have been a growing problem over the years. Unfortunately when discussing solutions it does not consider the idea of just taking the financing of clinical trials out of the hands of the industry as proposed by Nobel Laureate Joe Stiglitz. This idea was introduced into legislation earlier this year by Senator Bernie Sanders.
 

Rahm Emanuel: It’s time to rebuild America - The Washington Post

Borrow at negative interest. Hire unemployed people. Buy cheap materials. Use cheap equipment. Fix the $2.2 trillion in infrastructure we need to fix in the next 5 years. Jump start growth, the new infrastructure makes us more productive and competitive--SS     

Rahm Emanuel: It’s time to rebuild America - The Washington Post:

Demographics alone are not destiny. There is nothing in this year’s election returns that guarantees Democrats a permanent majority in the years to come. President Obama and the Democratic Party earned the support of key groups — young people, single women, Latinos, African Americans, auto workers in the Rust Belt and millions of other middle-class Americans — because of our ideas. 

But we cannot expect Republicans to cede the economic argument so readily, or to fall so far short on campaign mechanics, the next time around. 

So, instead of resting on false assurances of underlying demographic advantages, the Democratic Party must follow through on our No. 1 priority, which the president set when he took office and reemphasized throughout this campaign: It is time to come home and rebuild America.

That Shortage of Skilled Manufacturing Workers is Really a Shortage of Employers Willing to Pay the Market Wage

How do people who don't know basic economics get to be in charge of companies that need skilled workers?--SS     


That Shortage of Skilled Manufacturing Workers is Really a Shortage of Employers Willing to Pay the Market Wage:

News stories have been filled with reports of managers of manufacturing companies insisting that they have jobs open that they can't fill because there are no qualified workers. Adam Davidson at the NYT looked at this more closely and found that the real problem is that the managers don't seem to be interested in paying for the high level of skills that they claim they need.

Many of the positions that are going unfilled pay in the range of $15-$20 an hour. This is not a pay level that would be associated with a job that requires a high degree of skill. As Davidson points out, low level managers at a fast-food restaurant can make comparable pay.

It should not be surprising that the workers who have these skills expect higher pay and workers without the skills will not invest the time and money to acquire them for such a small reward. If these factories want to get highly skilled workers, they will have to offer a wage that is in line with the skill level that they expect.

AP: Drought Worsens For More Than Half Of Country — But Only Because It Didn’t Rain!

In related news, AP tells us that areas that get too much rain often flood.--SS     


AP: Drought Worsens For More Than Half Of Country — But Only Because It Didn’t Rain!:

“The worst U.S. drought in decades has deepened again,” reports the AP. “Scientists struggled for an explanation other than a simple lack of rain.”



Over half of the continguous U.S. has been in a drought since summer. The latest U.S. Drought Monitor report showed a rise in the extent and increases in the severity of drought:

The report showed that 60.1 percent of the lower 48 states were in some form of drought as of Tuesday, up from 58.8 percent the previous week. The amount of land in extreme or exceptional drought — the two worst classifications — increased from 18.3 percent to 19.04 percent.

The AP has a bizarre form of balance in the story, I guess so those suffering in the drought won’t feel as bad:

A federal meteorologist cautioned that Wednesday’s numbers shouldn’t be alarming, saying that while drought usually subsides heading into winter, the Drought Monitor report merely reflects a week without rain in a large chunk of the country.

Seriously! I feel so much less alarmed knowing that the drought worsened only because we had “a week without rain in a large chunk of the country.”

“The places that are getting precipitation, like the Pacific Northwest, are not in drought, while areas that need the rainfall to end the drought aren’t getting it,” added Richard Heim, a meteorologist with the National Oceanic and Atmospheric Administration’s National Climatic Data Center. “I would expect the drought area to expand again” by next week since little rain is forecast in the Midwest in coming days.

How reassuring!

Underwater Homeowners Cannot Explain the Weak Recovery

Dean Baker is wondering, again, why people who don't understand economics still get paid to tell us ignorant stuff about it.--SS    


Underwater Homeowners Cannot Explain the Weak Recovery:

Anyone wanting to learn about the economy who talked to the nation's top economists in 2006 would have been wasting their time. Almost none of them had any clue that the collapse of the $8 trillion housing bubble was going to wreck the economy. This presumably reflects a rigid dogmatism and conformity on the part of these economists, since it should have been both very easy to recognize an unprecedented run-up in house prices as a bubble and also to understand that the collapse of the bubble, which was quite evidently driving growth, would lead to a severe downturn.

Remarkably, it seems from a Washington Post article that attributes the continuing weakness of the economy to the indebtedness of underwater homeowners, that many of the country's top economists have no better understanding of the economy today than in 2006.The claim is the dropoff in consumption due to the debt burden of these homeowners explains the weakness of the recovery.

Some simple arithmetic shows the absurdity of this view. The amount of underwater equity is estimated at between $700 billion (Core Logic) and $1.1 trillion (Zilliow). Suppose that we can disappear this debt through some decree, how much additional consumption would we see? If we assume that these households spend an incredibly large share of this increase in their net wealth, say 15 cents on the dollar, this would imply additional consumption of between $105 billion (Core Logic estimate) and $165 billion a year (Zillow estimate).

However we would have also destroyed the wealth of the mortgage holders. Let's assume that they just spend 2 cents on the dollar of their wealth. This would imply a net boost to demand of $91 billion to $143 billion. While this would be a helpful boost to the economy, equivalent to a government stimulus program of this size, this would hardly be sufficent to make up a shortfall in annual output that the Congressional Budget Office puts at close to $1 trillion.

Furthermore, even this gain is almost certainly a huge exaggeration of the actual effect. With 11 million homeowners underwater, the above calculaton implies an increase in average annual consumption of between $9,500 and $15,000 a year. The median homeowner has an income of less than $70,000 a year. It doesn't seem likely that such a family would either have this amount of savings each year that they could instead decide to consume if they were no longer underwater in their mortgage or that they could borrow this amount on any sort of sustained basis. In short, the numbers in my calculation above almost certainly hugely overstate the economic impact of eliminating underwater mortgage debt.

In fact, there is no need to turn to implausible underwater mortgage debt explanations for the weakness of the economy. The economy is acting exactly as those who warned of the bubble predicted. We saw a sharp falloff of residential construction as we went from a near record boom, with construction exceeding more than 6.0 percent of GDP at the 2005 peak, to a bust where it fell below 2.0 percent of GDP. This meant a loss in annual demand of more than $600 billion a year.

We also saw a large falloff in consumption due to the loss of $8 trillion in housing wealth. The housing wealth effect is one of the oldest and most widely accepted concepts in economics. It is generally estimated people spend between 5 and 7 cents each year per dollar of housing wealth. This means that the collapse of the bubble would be expected to cost the economy between $400 billion and $560 billion in annual demand.
There is no mechanism that would allow the economy to easily replace the combined loss of between $1 trillion and 1.2 trillion in demand that would be predicted from the collapse of the housing bubble. Therefore it is hard to see why anyone would feel the need to look to explanations involving the indebtedness of underwater homeowners, the whole downturn is easily and simply explained by the collapse of the bubble.
In this respect it is worth noting that, contrary to the impression given by the article, consumption remains unusually high relative to disposable income, not low.


Go read the rest: Underwater Homeowners Cannot Explain the Weak Recovery

Like white on Rice: Republican critics say there's nothing racist in their digs

McCain says Susan Rice is "not too bright." She was a Rhodes scholar. McCain graduated from Annapolis 894th of 899.--SS  


Like white on Rice: Republican critics say there's nothing racist in their digs:

The "not too bright" Rhodes Scholar gets dog-whistled.

Not us. No way. That's the message from Texas Rep. Michael Burgess and South Carolina Sen. Lindsey Graham when it comes to their criticisms of U.S. Ambassador to the U.N. Susan Rice. Some of those criticisms are being called racist by other members of Congress. And with good reason.

Republicans, Graham foremost among them, made a patriotically tinged denial of the charges:

“Well, when you can’t answer the question, you attack the questioner,” he said on Fox News’s “Fox and Friends.” “The only color I’m worried about when it comes to Benghazi is red—blood red, the death of four Americans.”

Riiiiiiight.

Rep. Burgess recently was one of the 97 Republican congressmen who signed a letter  to President Obama asking that Rice not be nominated as secretary of state to replace outgoing Hillary Clinton because she "willfully or incompetently" misled Americans about the lethal attack on the U.S. consulate in Benghazi, Libya.

Rice made statements about the attack—that it arose out of a protest over an anti-Muslim film and that it was spontaneous, not premeditated—which later proved to be wrong. Right-wing politicians and pundits alike were soon charging cover-up and saying the administration hadn't acted to protect the Americans in the consulate. Although Obama was their real target since they saw Benghazi as a means of hurting his reelection chances, Rice became the surrogate. What's become clear in the past few days is that Rice's information was indeed wrong, but that wasn't because she was trying to trick anyone or because she is "incompetent." In the aftermath of the attack, she had repeated information that U.S. intelligence agencies provided her at the time. Since then, it's become clear that the attack didn't arise out of protest and that it was premeditated.

Rice's critics, said Rep. Jim Clyburn of South Carolina, were using terms like "incompetent" that are well known to any African Americans. Challenge her mistakes, sure, he said. But:

“You know, these are code words,” he said. “We heard them during the campaign … These kinds of terms that those of us, especially those of us who were born and raised in the South, we would hear these little words and phrases all of our lives and we’d get insulted by them. Susan Rice is as competent as anybody you will find.”

A dozen congresswomen also had objections, especially to the remarks of Sen. John McCain, the Arizona Republican who skipped a classified Senate committee briefing on the Benghazi attack so he could stand in front of the cameras with Graham and Sen. Kelly Ayotte to deliver his vow to filibuster Rice, whom he has termed "not too bright."

On Friday, at a Capitol Hill press conference, a dozen female members of the House of Representatives slammed McCain and other Senate critics for sexist and racist remarks in their critiques of Rice:

"All of the things they have disliked about things that have gone on in the administration, they have never called a male unqualified, not bright, not trustworthy," said Rep. Marcia Fudge, D-Ohio, the next chairwoman of the Congressional Black Caucus. "There is a clear sexism and racism that goes with these comments being made by unfortunately Sen. McCain and others." 

[...] 

"To batter this woman because they don't feel they have the ability to batter President Obama is something we the women are not going to stand by and watch," said Rep. Gwen Moore, D-Wis. "Their feckless and reckless speculation is unworthy of their offices as senators." 

[...] 

Said Del. Eleanor Holmes Norton D-D.C.: "We will not allow a brilliant public servant's record to be mugged to cut off her consideration to be secretary of state."

As for claims she isn't very smart, the women noted that Rice was a Rhodes scholar and McCain, the son and grandson of full admirals, graduated near the bottom of his class at Annapolis, 894th of 899. By Tuesday, McCain had backtracked somewhat on his claims about Rice, only asking that she admit she was wrong. By then the Twitter hashtag #ApologizeMcCain had gone viral.

But racism and sexism have been viral since long before the internet existed. Terms like "incompetent" and "out-of-his-depth" and "shirker" have been repeatedly applied to Obama himself. Some will argue that these descriptions are used against people of whatever color. But they have a history of being used against people of color just as the word "shrill" has typically been used to describe a woman who speaks plainly but sharply far more than it has used to describe a man who does likewise. The words resonate differently depending on their target. That may be surprising to some Americans. It's not news to people of color or women.

Background to Assess Ben Bernanke's Warning On the Fiscal Standoff and The Budget

Dean Baker: "It might be useful to give readers this background on Bernanke's track record when reporting his current statements on the economy."

Ya think?


Background to Assess Ben Bernanke's Warning On the Fiscal Standoff and The Budget:

The Washington Post gave a careful account of Federal Reserve Board Chairman Ben Bernanke's testimony to Congress:

"Federal Reserve Chairman Ben Bernanke delivered a stark warning to lawmakers in a high-profile speech Tuesday, saying that the U.S. economy is at risk if they bungle negotiations over the looming austerity crisis.
"Bernanke’s remarks are notable less for their substance than for their tone and timing. In his most prominent public speech in almost three months, Bernanke made clear that he sees grave risks should the bargaining over the 'fiscal cliff' — a phrase he coined — lead to either steep, immediate fiscal austerity or prolonged, confidence-rattling brinksmanship. And he suggested that 2013 could be a good year for the U.S. economy if lawmakers reach a deal quickly and amicably. ...

"And the nation’s future prospects may be shaped in part by whether policymakers act in ways that instill confidence in the stability of U.S. policy.

"The economy is already bearing the weight of that anxiety, Bernanke said, and 'such uncertainties will only be increased by discord and delay. In contrast, cooperation and creativity to deliver fiscal clarity . . .  could help make the new year a very good one for the American economy.'"

It would probably be worth reminding readers that as a Federal Reserve Board governor and later President Bush's chief economic adviser, Mr. Bernanke completely missed the rise of the $8 trillion housing bubble, the largest asset bubble in the history of the world. When its collapse first started to create stress in financial markets, he publicly stated that he expected the problems to be restricted to the subprime market. When Bears Stearns collapsed in March of 2008 he testified to Congress that he didn't see another Bear Stearns out there.
It might be useful to give readers this background on Bernanke's track record when reporting his current statements on the economy.

Jindal's guidance comes with a catch

Jindal wants to force women to have their rapists' babies, wants to ban gay marriage, wants to use tax dollars to teach creationism, and thinks he participated in an exorcism. He just doesn't want Republicans to sound mean or stupid.--SS     


Jindal's guidance comes with a catch:

Getty Images

In the wake of his party's defeats in the 2012 elections, Louisiana Gov. Bobby Jindal (R) has positioned himself as a leader in setting the GOP on a smarter path. He was the first Republican to publicly condemn Mitt Romney's "gifts" comments, and soon after, Jindal declared he wants Republicans to "stop being the stupid party."

And while these efforts are drawing praise from some on the right, let's pause to note the superficiality of Jindal's vision. Take his comments yesterday on Fox News, for example.

Appearing on "Fox News Sunday," Gov. Bobby Jindal (R-LA) accused failed Senate candidates Todd Akin and Richard Mourdock of saying "stupid" and "offensive" things that damaged the Republican Party. 

"We also don't need to be saying stupid things," he said. "Look, we had candidates in Indiana and Missouri that said offensive things that not only hurt themselves and lost us two Senate seats but also hurt the Republican Party across the board." 

On abortion, while Jindal said he's pro-life, "we don't need to demonize those that disagree with us. We need to respect the fact that others have come to different conclusions based on their own sincerely held beliefs."

Here's the detail Jindal neglected to mention: he opposes any and all abortion rights, without exception. If the Louisiana governor had his way, women impregnated by a rapist would be forced by the American government to take that pregnancy to term. The same would be true in cases of incest or pregnancies in which the health of the mother is at risk.

In other words, as far as public policy is concerned, the only difference between Jindal, Akin, and Mourdock is word choice. Jindal doesn't want candidates in his party "saying stupid things," but he's entirely comfortable with those candidates adopting the same extremist positions he espouses.

Indeed, the larger irony of Jindal presenting himself as a forward-thinking, far-right leader is realizing just how odd a choice he is.

---

On the one hand, the Louisiana governor says he's "had enough of this dumbed-down conservatism"; on the other, Jindal is a fierce, anti-gay culture warrior who wants children to be taught creationism and believes he participated in an exorcism.

As this relates to abortion, Jindal is effectively urging his party to adopt the same vision as Mourdock and Akin, but present their agenda with less-offensive talking points. It's reminiscent of Charles Krauthammer's advice to the GOP: "The problem ... for Republicans is not policy but delicacy."

They're both misguided if they think softer, more polite language can make the right-wing social agenda seem more palatable to the American mainstream.

Mark Steyn, Texas Sharpshooter

The Texas Sharpshooter Fallacy is new to me, so now, of course, I will see it everywhere.--SS  



Mark Steyn, Texas Sharpshooter:

Mark Steyn: “Just to be clear: I think Obama won the election, and his victory represents the will of the American people. Which is why the Democrats should have heeded Mubarak’s words and not over-stolen it.”

Glad we cleared that up!

By contrast, it actually is clear what fallacy Steyn is committing in his post. He’s a Texas Sharpshooter, if there ever was one.

If you don’t care to click the link above: Steyn thinks 37 Chicago precincts in which Romney got zero votes, total, is proof positive of fraud. (Someone had to vote for him by accident, if nothing else!)

Let’s think it through. I’m going to be a bit approximate about the numbers here. Chicago has just over 2000 precincts. Precincts average, to judge from the news article Steyn links, approx. 500 cast votes. That gets us 1,000,000 votes. That’s a bit low for a city of 3,000,000. (Must be that some precincts are bigger?) Anyhoo. I don’t now what percentage of the 2,000+ precincts are nearly 100% African-American, but let’s pencil that in as: a lot. (This is going to make the math squishy, admittedly.) So there are a lot of precincts in which you would expect to see, maybe, just five Romney votes out of 500. Or ten. Of course, chasing tails out both ends, there must be outlier precincts in which Romney got more votes than you would expect. And some in which he got zero. Thus, my proto-scientific conclusion: 37 0’s doesn’t seem like a lot, given that we know this is the tail end of a distribution of a lot of small numbers.

Gerrymandered districting is such common political practice that Steyn probably doesn’t see anything wrong with conceptual gerrymandering of districts (maybe, with a nod to Nelson Goodman, we should call it grueymandering): a large swathe of black Chicago – approx. 16,000 voters strong – in which Romney got squat votes. But, since there was not a single ex ante hypothesis of not a single X, anti-Obama, on any ballot from this singularly grue-ish Ward … well, you do the math.

I do like how, following up on the Benghazi ‘scandal’, we may now have another conspiracy that lacks a credible motive. What would be the point of depriving Romney of a few votes, in all-black Chicago precincts, thereby running up the numbers in Illinois, and making no conceivable difference to the election?

But I hereby predict that ‘zero votes for Romney from 16,000 Chicago voters’ is going to be with us for a while. I hope it makes it into textbooks on informal logic, too. It’s a good example.

No, Conservatives, Benghazi Is Not Worse Than Watergate

Republicans are ignorant of history because their history is a disaster.--SS    


No, Conservatives, Benghazi Is Not Worse Than Watergate:

On Friday, I got into a little Twitter tete-a-tete with Jim Treacher of the Daily Caller over this post I wrote last week, which argued that the reason conservatives are acting as though the aftermath of the events in Benghazi is the scandal of the century is that they're frustrated that Barack Obama hasn't had a major scandal, so they're making as big a deal as possible out of whatever's handy. What ensued opened my eyes to something I found surprising, though I suppose I shouldn't have been so naïve. It turns out that many conservatives not only believe Benghazi is far, far more serious than Watergate was, they seem to have no idea what Watergate was actually about or how far-reaching it was. After the number of Treacher's followers tweeting me with "How many people died in Watergate? Huh? Huh?" reached triple digits (each tweet no doubt considered by its author to be a snowflake of insight), I decided that since the story broke 40 years ago, we all might need a reminder of why Watergate was, in fact, a really big deal.

The first and most important thing to remember is that when we say "Watergate," we aren't referring only to the break-in at the Democratic party headquarters in the Watergate hotel. The break-in was merely the event that triggered the investigations that would eventually reveal the full magnitude of Richard Nixon's crimes and the crimes committed by many of the people who worked for him. As Jonathan Bernstein has written, for starters, imagine if Barack Obama was suspicious of some former Bush administration officials now working at the American Enterprise Institute, and repeatedly ordered Rahm Emanuel to get people to break in to AEI in order to steal files that could be used to embarrass or blackmail those officials. Nixon did that (the Brookings Institution was the think tank in question). Bernstein goes on:

The president's men, sometimes at Nixon's instructions, sometimes with his knowledge, and sometimes perhaps without his direct instructions or knowledge but always in keeping with his general orders to his top staff, also planted spies in the camp of Democratic campaigns; broke into Democratic headquarters, photographed documents, and planted bugs; broke into the office of Daniel Ellsberg's psychiatrist in order to learn things that could be used to destroy his image in the press; attempted to plant left-wing materials in the home of the guy who shot George 

Wallace; planned to (and perhaps did) selectively leak classified materials about foreign policy in order to hurt the Democrats; forged materials about foreign policy (the death of South Vietnam's President Diem) in order to plant false stories in the press that would hurt the Democrats; wiretapped government officials; paid a private investigator to tail Ted Kennedy; performed other dirty tricks such as forged letters intended to manipulate the Democratic presidential nomination process (efforts that may indeed have been successful); and other illegal, abuse and unethical actions -- this is not a comprehensive list. 

Those were the original crimes. What followed was obstruction of justice as the White House, with the active leadership of the president, lied to FBI investigators and grand juries, destroyed evidence, suborned perjury by prearranging false testimony; suborned perjury by paying off witnesses and either promising or at least hinting at the promise of presidential pardons in exchange for false testimony, and using the authority of the presidency to derail and undermine FBI investigators and prosecutors. Again, the president was personally actively involved in all of those things.

The scandal also revealed so many repugnant statements and acts, some of them illegal and some of them not, that I suppose it's hard to keep them all in your head. For instance, Judeophiles that conservatives have become, they may like to forget that the White House tapes showed Nixon to be a vicious anti-Semite ("The government is full of Jews. Second, most Jews are disloyal") who ordered his staff to assemble lists of Jews working within the executive branch so he could identify his enemies (the aide who carried out a Jew-counting operation in the Bureau of Labor Statistics, Fred Malek, is to this day a major Republican fundraiser). Of course, there was also the "enemies list" of Nixon opponents targeted for harassment; one memo detailed "how we can use the available federal machinery to screw our political enemies." Among the crimes planned but never executed, the most colorful has to be G. Gordon Liddy's plan to murder columnist Jack Anderson. Liddy was convicted of conspiracy, burglary, and illegal wiretapping; today he is a popular conservative radio host. Among those who ended up going to prison for their crimes in the Watergate scandal were the Attorney General, the White House Chief of Staff, and the President's chief domestic policy adviser. The scandal was so damning that facing impeachment and almost certain conviction, the President of the United States resigned.

The point is, for everyone who thinks "Watergate" was just a break-in, it was not. It was a panoply of government malfeasance and outright criminality the likes of which the country had never seen before and will probably never see again.

It is true, as my conservative friends point out, that no one actually died in Watergate, while there were four deaths in Benghazi. Those deaths were a terrible tragedy. But unless some evidence emerges that President Obama or somebody else in his administration, through some act of corruption or misconduct, actually caused those deaths, the deaths don't raise the magnitude of the "scandal" past that of other scandals that weren't related to any deaths. For instance, 241 servicemembers Ronald Reagan sent to Beirut were killed in the bombing of Marine barracks in October 1983, but I'll bet that not one of my angry Twitter correspondents considers that a "Reagan administration scandal" (nor, by the way, did almost any Democrats at the time, rightly or wrongly).

For the record, I agree with Kevin Drum on this point: let's go ahead and investigate what happened in Benghazi. If that investigation helps us improve security for our personnel operating in dangerous places, that would be a positive outcome. But let's be honest: Republicans aren't worked into a lather about this because of their longstanding passionate commitment to security at our embassies and consulates. They're hoping that if we keep digging, some kind of nefarious behavior will be discovered, and they'll be able to use it to embarrass the administration. That's politics, of course, so it isn't all that surprising. But that's all it is. And the idea that Susan Rice going on television and delivering some slightly inaccurate talking points constitutes a "cover-up" on par with the Nixon administration suborning perjury, paying hush money, and obstructing justice in a whole variety of other ways? That's just insane.

Thomas Friedman Says That Our Economy Is Being Killed By Employers Who Can't Do Arithmetic

Dean Baker: "If the minimum wage had risen in step with inflation and productivity since the late sixties, it would be almost $20 an hour today."  


Thomas Friedman Says That Our Economy Is Being Killed By Employers Who Can't Do Arithmetic:

The evidence presented in Thomas Friedman's column today would lead readers to believe that the economy's biggest problem is that companies are being run by executives who are so ignorant of economics that they don't know that the way to attract more workers is to raise wages. The column begins with the story of Traci Tapini, who with her sister is co-president of Wyoming Machince. For some reason Friedman assures us Tapini "is not your usual C.E.O."

According to Friedman, back in 2009, when the economy was collapsing and unemployment was soaring Tapini had to struggle to find 10 welders that she needed to meet an order from the military. She could not find workers with the right skills, which now includes not only the ability to make a good weld, but also a knowledge of metallurgy. Eventually she found a welder who had passed the American Welding Society Certified Welding Inspector exam and was able to train the other welders.

Friedman tells readers:

"Welding 'is a $20-an-hour job with health care, paid vacations and full benefits,' said Tapani, but 'you have to have science and math. I can’t think of any job in my sheet metal fabrication company where math is not important. If you work in a manufacturing facility, you use math every day; you need to compute angles and understand what happens to a piece of metal when it’s bent to a certain angle.'
Who knew? Welding is now a STEM job — that is, a job that requires knowledge of science, technology, engineering and math."

The obvious problem in this story is that Tapini apparently doesn't understand that you have to pay more money to get highly skilled workers. If the minimum wage had risen in step with inflation and productivity since the late sixties, it would be almost $20 an hour today. Back in the late sixties, a typical minimum wage worker would have a high school degree or less. Now, according to Friedman, we have CEOs who think that they can get highly skilled workers at the some productivity adjusted wage as someone who would have had limited literacy and numeracy skills 45 years ago. If we applied the same standard to doctors, they would be averaging around $100,000 a year today (instead of around $250,000). If employers really do have such poor understanding of how markets work then it will certainly be a serious impediment to economic growth in the years ahead.

Friedman continues:

"Employers across America will tell you similar stories [that they can't find workers with the right skills]. It’s one reason we have three million open jobs around the country but 8 percent unemployment."
If the argument is that employers don't understand how markets work Friedman might be right, but if the argument is that there is a skills mismatch, the evidence doesn't support his case. The overall ratio of job openings to positions has risen from the trough of the recession but is still well below its pre-recession level.

                                                      Ratio of Job Openings to Employment

                                                  Source: Bureau of Labor Statistics.

While Friedman argues that this means employers can't find workers with the right skills, it is worth noting that we see the same pattern in restauarant employment.

                                                  Ratio of Job Openings to Employment:
                                                  Accomodation and Food Service  


                                                       Source: Bureau of Labor Statistics.     

The current ratio of job openings to employment in the restauarant and hotel sectors is 2.8 percent (it had been 3.5 percent in the summer months). This is slightly higher than the 2.6 average for the economy as a whole. Unless we think that it is especially hard to find someone with the skills needed to work in a restaurant or hotel, then there must be some other explanation for the rise in the job openings ratio. For example, employers may be taking advantage of the fact that there are large numbers of unemployed workers to be more picky about who they hire.

The failure of wages to keep step with productivity growth would suggest that this is the case. While Friedman tells readers about the rise in the gap in the wages of workers with college degrees and workers without, this was mostly an 1980s story and to a lesser extent a 1990s story. There has been little change in this ratio in the current century. In fact, wages for workers with college degrees have been dropping since 2000.
The evidence suggests that if employers like Traci Tapini really can't find workers with the necessary skills it is primarily because they don't understand that it is necessary to raise wages to attract more skilled workers. If this is the case, we should hope that Ms. Tapini is not your usual C.E.O.

Black Friday protest plans are making Walmart nervous

Walmart workers kept on part time and low wages means the tax payer picks up the tab via food stamps and Medicaid. So, how is it a conservative free market system for Walmart to be able to cost shift their employees' negative externalities (hunger, health care) onto the tax payer?--SS    


Black Friday protest plans are making Walmart nervous:

For weeks, protests and brief strikes by Walmart workers across the country yielded dismissive statements from Walmart about how small the number of protesters and strikers was in the context of the company's 1.4 million U.S. workers. But Friday, a week before a planned wave of Black Friday protests, it became clear that this isn't something Walmart is dismissing. The company filed an unfair labor practice charge against the United Food and Commercial Workers, the union with which non-union Walmart worker groups are affiliated. That's not a tactic Walmart would bother with if it was confident it could crush these workers' spirits as it's accustomed to doing.

Activities over the past year or longer "have caused disruptions to Walmart's business, resulted in misinformation being shared publicly about our company, and created an uncomfortable environment and undue stress on Walmart's customers, including families with children," Walmart outside counsel Steven Wheeless said in a letter sent on Friday to Deborah Gaydos, assistant general counsel of the UFCW.

You know what creates an uncomfortable environment and undue stress on people, including families with children? Walmart's ridiculously low pay scale and scanty opportunities for advancement, such that, according to internal company documents:

Low-level workers typically start near minimum wage, and have the potential to earn raises of 20 to 40 cents an hour through incremental promotions. Flawless performance merits a 60 cent raise per year under the policy, regardless of how much time an employee has worked for the company. As a result, a "solid performer" who starts at Walmart as a cart pusher making $8 an hour and receives one promotion, about the average rate, can expect to make $10.60 after working at the company for 6 years.

That, combined with policies intentionally keeping workers at part-time hours so they don't qualify for benefits, is why so many Walmart employees are forced to rely on food stamps and other public assistance to make ends meet. Being kept poor is the sort of thing that causes families with children just a little more distress than being exposed to workers picketing outside of stores.

Walmart's dismissive statements about the small percentage of workers taking part in the protests are accurate in a literal sense, but the decision to try to use the law to shut the protests down reveals that something bigger than the percentages is going on: this is the first time Walmart has faced such sustained, defiant activism against its abuses of workers. Usually when workers have tried to fight the conditions they face, retaliation and intimidation from managers have been enough to shut it down. That's not working this time, and as the protests spread and draw public notice, it seems that executives are nervous enough to go beyond their usual tactics. And when they're nervous, it's time to double down.

Moderate Republicans Edge Closer to Extinction

Keep talking, winguts!--SS
   Moderate Republicans Edge Closer to Extinction: Doyle McManus:

"It's not surprising that House conservatives see things their own way. Even if the country as a whole voted for President Obama this month, conservative House members did just fine in their own districts ... Of 216 House Republicans who ran for reelection, only 14 were defeated, a mortality rate of just over 6%. Members of the tea party caucus did even better than that; only about 5% were defeated."

"Which Republicans lost their seats? Moderates and moderate conservatives, disproportionately. Among the incumbents who ran for reelection, 48 were members of a group called the Republican Main Street Partnership, nonradical conservatives who sometimes call themselves 'center right.' Seven of those 48 lost their seats -- a mortality rate of 15%, more than twice as high as Republicans in general. When you add retirements and other departures, more than a dozen moderate conservatives won't be coming back next year. Moderate Republicans were an endangered species in Congress even before this year's election. Now they're even closer to extinction."

Don’t Betray Us David Petraeus

Koo-coo-ca-choo.--SS     

Don’t Betray Us David Petraeus:

By Mr. Fish

Related Entries

• November 13, 2012 Not Him Again
• November 13, 2012 The Petraeus Affair

Jindal to GOP: 'Stop being the stupid party'

Jindal wants the GOP to stop being stupid, and then continues with the stupid. Please proceed, Governor.--SS   

Jindal to GOP: 'Stop being the stupid party':

Associated Press

Louisiana Gov. Bobby Jindal (R) is understandably concerned about the future of his party, and told Politico this week he wants Republicans to "stop being the stupid party."

"We've got to make sure that we are not the party of big business, big banks, big Wall Street bailouts, big corporate loopholes, big anything," Jindal told POLITICO in a 45-minute telephone interview. "We cannot be, we must not be, the party that simply protects the rich so they get to keep their toys." [...] 

"It is no secret we had a number of Republicans damage our brand this year with offensive, bizarre comments -- enough of that," Jindal said. "It's not going to be the last time anyone says something stupid within our party, but it can't be tolerated within our party. We've also had enough of this dumbed-down conservatism. We need to stop being simplistic, we need to trust the intelligence of the American people and we need to stop insulting the intelligence of the voters."

The Louisianan added that his party should "stop reducing everything to mindless slogans, tag lines, 30-second ads that all begin to sound the same."

All of this sounds quite sensible. After years in which Republicans have mocked arithmetic, science, intellectual rigor, and the "reality-based community," there's certainly nothing wrong with a relatively high-profile figure like Jindal urging the GOP to pick up its game.

My concern, though, is the depth with which Jindal is making this appeal. His advice has superficial appeal, but the governor runs into trouble just the below the surface.

---

Jindal says Republicans can't simply protect the rich "so they get to keep their toys." Does that mean he's open to slightly higher tax rates on income above $250,000. Well, no, actually, he's not.

Jindal says Republicans need to appeal to a broad national audience. Does that mean he's open to more moderation on hot-button culture war issues? Well, no, actually he wants the right to soften its "tone" while keeping the exact same policy positions.

Jindal says Republicans need to make meaningful inroads with minority communities. Does that mean he's open to comprehensive immigration reform? Well, when asked, he dodged every question about his position and refused to share details about his preferred approach.

Jindal says Republicans need to stop being the party of Wall Street. Does that mean he supports tougher regulations to prevent financial industry excesses? Well, he said he's open to the "Volcker rule," but doesn't appear to understand what the rule is.

Meet the Republican Party's new idea man; he's the same as the Republican Party's old idea men.
The idea of Bobby Jindal shaking up Republican thinking, pushing the party to start being creative and serious about public policy again, is heartening, but there seems to be a disconnect between the message and the messenger.

The governor wants new ideas, but isn't comfortable with new ideas. Jindal wants his party to move past mindless rhetoric, but he just spent a year attacking President Obama with rhetoric and tactics that can generously be characterized as idiotic.

I'm all for the end of "dumbed-down conservatism," but is Jindal really prepared to lead the way?

Peggy Noonan mocked data nerds who won the presidency

Great story: revenge of the nerds.--SS    

Peggy Noonan mocked data nerds who won the presidency:

Peggy Noonan, being wrong again. And again.

Peggy Noonan, as wrong as the rest of her ilk, on how President Barack Obama didn't seem "genuine" back in July:

Maybe Mr. Obama is living proof of the political maxim that they don't care what you know unless they know that you care. But the idea that he is aloof and so inspires aloofness may be too pat. No one was colder than FDR, deep down. But he loved the game and did a wonderful daily impersonation of jut-jawed joy. And people loved him. 

The secret of Mr. Obama is that he isn't really very good at politics, and he isn't good at politics because he doesn't really get people. The other day a Republican political veteran forwarded me a hiring notice from the Obama 2012 campaign. It read like politics as done by Martians. The "Analytics Department" is looking for "predictive Modeling/Data Mining" specialists to join the campaign's "multi-disciplinary team of statisticians," which will use "predictive modeling" to anticipate the behavior of the electorate. "We will analyze millions of interactions a day, learning from terabytes of historical data, running thousands of experiments, to inform campaign strategy and critical decisions." 

This wasn't the passionate, take-no-prisoners Clinton War Room of '92, it was high-tech and bloodless. Is that what politics is now? Or does the Obama re-election effort reflect the candidate and his flaws?

Of course, this was a calculated effort to combat the notion that Mitt Romney was cold and aloof and didn't give a shit about people who weren't members of his country club (and maybe not even them). You think Romney is aloof, well what about Obama? He hired statisticians to employ gay math!

So a group of those data nerds set up shop in Florida, posted that Noonan column on the door with a photo of the Mars landscape, and set about to win.

Among its many decisions driven by data, the campaign chose to stick it out in Florida, even though polls and conventional wisdom raised doubts about Obama's odds in the GOP-tilted battleground. 

Just weeks before the election, the analytics team's assessment suggested a 30% to 40% chance of winning the state, Wagner said. But after the team added information about roughly 250,000 new voter registrations, the projection shifted, showing that 80% of the new registrants would vote and they would heavily support Obama. 

When the computers spat out this data, indicating that Obama was likely to win in Florida, a howl went up from the Cave. A mathematician from the University of Alabama started it off with the 'Bama fighting words, "Roll Tide!"

Remember, this was the same Peggy Noonan who said Romney would win because—get ready for this—

All the vibrations are right.

So yeah, ha ha ha ha! They pay her for that drivel!

But that's fine. Let conservatives listen to people with "gut feelings" and vibration sensibilities. We'll stick to the arithmetic.