Stop Me Before I Vote Again

The triumphant secessionists of Kosovo have rewarded, pro virili, their imperial patron by erecting a remarkably ugly eleven-foot statue of Bill Clinton, spray-painted gold. The cheesy spray paint is nice and appropriate, I think -- just the thing for Bill Clinton.

The effigy follows the normal eastern European iconographical convention -- "Great Leader Hails Taxicab. Hail Great Leader!" One somewhat original touch is that Great Leader's non-hailing hand is holding a binder or folder or something inscribed with the date that he started the bombs falling. The Albanian chauvinists of Kosovo have little talent for hypocrisy, it seems. Another people might have chosen not to emphasize the fact that they were celebrating a campaign of slaughter.

Ole Bill is very popular there, along with Tony Blair and Madeleine "We'll kill any number of children and enjoy it" Albright. People in Kosovo apparently name their kids after this trio of bloodthirsty fiends.

By chance I recently passed by the Jefferson Davis monument in New Orleans, commemorating another Southern friend to imperially-sponsored secessionism and pride of race.

It's a more accomplished piece of work than Clinton's clunky memorial. Ole Jeff has a lifted arm too but his gesture is graceful and oddly airy. His expression is solemn and elevated, very much in the usual pompous style of American civic art, but at least he doesn't have that look of slitty-eyed low cunning and false bonhomie that Clinton's does.

That look, on spray-paint Clinton's face, is another touch, probably unintended, of veracity. The earnest but unskilled -- and, I fear, untalented -- Kosovar sculptor didn't quite know how to read an Arkansas con artist's facial expression, so he just... rendered it.

The Democrats are getting a big kick out of George W. Bush, motivational speaker. It is amusing, in a sufficiently narrow context. He remains a tongue-tied cretin, and the laughs are literally cheap. $19! Torment the whole office for one low, easy payment! He was at the wheel when the national SUV hit the abutment, now he's motivating the business dudes?! Ha, ha, ha! Hoo! Tee hee... etc. etc.

Meanwhile, Mr. Complete Sentences has engorged the banksters with endless free liquidity and parked their toxic assets where they can't be unwound. He's paying them and subsidizing them and encouraging them to make the national consequences of "too big to fail" permanent. In a remarkably short period of time, he's done more to hurt the country than George W. Bush, the chuckle-head chimp, the smirking idiot that progressives managed to lose to, twice. I have no doubt he'll pull much more than $19 admission fees when his turn comes, and I have no doubt this booby prize will be taken to prove something.

Note: Yves Smith has called the financial services pay arrangement of “heads I win, tails you lose” looting, and has also argued that our form of capitalism is evolving into Mussolini style corpocracy, meaning fascism. But the label most often pinned on the Obama adminstration is socialism.

Socialists, of course, would argue that socialized gain and privatized loss is not socialism, which tries to “distribute income according to need as well as performance”. Indeed, socialists might call it fascism.

But I don’t put much stock in what socialists might label a system, any more than what fascists or corporate looters would label a system. Whatever you call it, if you have corrupt people running the system, you will have a corrupt system.

Why speculate on what socialists might call it? I think I need to start an "Ask A Socialist" service to handle these occasions. Anyway. It's called actually existing capitalism, it's working just the way it's supposed to, and that is the problem.

A former commenter here -- now, alas, somewhat exhausted by his efforts to keep New Jersey a safe haven for the heirs of Bill Clinton -- recently asked:

Why do the Muslims of Palestine deserve their own state but not the Muslims of Albania?

Nobody -- well, maybe God, but nobody else -- is in any position to decide who deserves what. Certainly nobody -- including God -- will ever be able to state a categorical rule deciding which "peoples" are entitled to "self-determination" and which are not. The Confederacy claimed self-determination. The Lombard League wants self-determination. Staten Island would dearly love to secede from New York.

Mere humans as we are, we can't claim the godlike privilege of determining who is deserving and who is not. What we can -- must, in fact -- decide is who we support in their quest for self-determination and who we don't support.

In practice -- and in principle too, for ought implies can, and cannot implies need not -- we make these decisions on some highly specific grounds. There just aren't any general principles.

Do I support the Palestinians? Do you have to ask? Of course I do. I don't like thieves -- except for the Robin Hood variety. And the Zionist project is a project of thievery, without any Robin Hood about it.

You may say that all nation-building is founded on thievery, and you would be right. But thievery that took place hundreds of years ago, and to which no resistance has been offered in living memory, acquires a certain legitimacy by default. Nobody is going to say, Indo-Europeans Out Of Europe!

Zionist thievery, however, has mostly taken place within living memory, and resistance to it began immediately and has never ceased. So there are actual sides to choose, in an ongoing struggle. Are you on the side of the robbers or the robbed?

This is what they call a no-brainer.

Then there's context. The Albanian Kosovars -- like the other secessionists in the former Yugoslavia -- rode to "self-determination" on the back of a Great Power project to dismember the last nonaligned state and, oh by the way, continue the perennial imperial project of caging the Russian bear.

Is this a project I want to support? Another no-brainer.

Somebody will sooner or later come up with a clever poser, like, Would I support Welsh secession from the so-called "United Kingdom" of the Saxons?

Well, yes, but only because the Saxons are a people both craven and brutal, servile and truckling to their masters and nauseatingly cruel to anybody who falls into their power, and I would like to see London's writ cut back to the historical territory ruled by Alfred the Great. Or further, come to think of it. (When will those people wake up and realize that they're just another played-out small country -- Liechtenstein, with crummy food?)

Then there's the context argument. Sam the world-bestriding hegemon would hate to see his coddled little brother's feathers trimmed -- a consideration which applies to England as it does to Israel -- and if that isn't a good reason to trim 'em, I don't know what is.

You get the point, right? No broad universal principles here. Such things are just not to be had.

I will be happy to apply the long-pondered and highly refined Smith Self-Determination Heuristic, version 9.8, to any simmering situation anywhere in the world, for a modest fee of $499.95 per race, creed, or color. Contact me off-line.

According to the editors of the Morning Perception Management, voters will flock to the polls today to cast their votes in what it is tacitly a referendum on President Obama's regime. The editorial enthymeme is that they're too stupid to consider local issues and so spiteful that they'll consider casting a symbolic vote for or against the regime, even if it means voting for something or someone they consider contemptible. The spite will be interpreted through the MPM preemptively, as it is now, and post facto, to ensure plausible continuity with previous interpretive extravagance.

As with any misanthropic caricature, there are enough spiteful people to form a photo op and provide a few appalling interviews. Neurotic pseudo-intellectuals will fret competitively over the implications of their existence. Meanwhile, about 65 to 70% of the electorate won't make it to the polls. Indifference, disgust, work and family will claim their time. Most of those that do make it will be voting on the same machines that have been causing so much trouble, even without the hallowed tradition of rigging and fraud. One might think that all the official encomiums paid to democratic proceduralism would get us a federal holiday for voting, possibly a functional infrastructure for it too, and one would be wrong. Gassy idolatry and a sanctimony empty enough to be cynical trump republican sentiments.

High turnout theoretically favors Democrats. But rather than working over time to facilitate that, they bend their efforts to normalizing the grandiose rhetoric of candidates immediately to their right and delegitimizing their more popular activists, with predictable consequences. A year ago, Barack Obama's election was touted by them as a repudiation of the Bush regime and the Republican Party. Now they're getting ready to lose seats in municipal and state governments.

Let us all now praise this gruesome titan of boobitude statesmanship.

Though he'd rather fence with red giants like Mao and Helen Gahagan Douglas, and he'd readily admit he found ordinary marketplace economics "boring as hell", nevertheless he could strike and strike decisively when a consummate opportunity for a moment of "crisis" arose.

Say what you will -- the man had balls, and when it fitted into his agenda the 5 o'clock shadow man could take bold measures and swallow bold risks.

Let's travel back to the "Nixon shock" of August '71. The Nambo-war pumped domestic economy, after years of flabby macro steerage, faced a perilous crossroads. A "too mild" Fed-induced recession back in '69 had turned itself spontaneously into a nasty grossly imbalanced recovery. Trade and payment gaps yawned wide. Everyone who knew anything knew a frightful return to dismal policy choices lay ahead.

In fact this coming cataract was but the latest and by far the worst installment of a 16-year-long drama that stretched back past the very early days of the Kennedy Camelot to the era of grey feelings, AKA the Ike 50's, and it was a drama that had become ever more pseudo-climactic in moments of high uncertainty. And of course needless to say it a very public mortification for the metropole of all earthly freedoms.

At its heart the crisis had one big shameful horror -- uncle Samson's de facto imperial currency couldn't play financial Atlas anymore. It was pretty obvious Uncle couldn't continue to be the linchpin of global commerce and investment -- under Bretton Woods rules, at any rate. That is, Uncle couldn't sustain by brute force alone the golden postwar handshake between 35 dollars American and a troy ounce of gold.

The wobbling under the load, at least at first, in the last years of Ike, had seemed only a matter for "future concern"; but by '71 America's gold reserve ratio had long since become a bitter clownish joke to all parties inside and outside. It was clear "something's gotta give here".

So we come to August '71 and Dick's decider moment: he could play it safe and once more, like his predecessors pull the same old same old stunt -- induce another recession, or better yet, a protracted stagnation(*) and let the rest of the trading world use America's time in the breakdown lane to catch up and close the trade gap -- but of course it would need to be bigger and more painful than previous exercises of the kind.

Or...

Nixon could be brazen -- take the devil's option suddenly and preferably without warning. Announce "ahh, there's gonna be a change to the rules, gang" -- yes the great money game itself! He could unilaterally bust up the postwar system, perfidiously cut the dollar loose from its golden harness, close the gold window and thereby welch on a long-standing promise. Trigger first and foremost a gold soar against all currencies, and a concomitant earth-wide inflation surge of Biblical proportions -- including of course ultimately both a dollar devaluation against our trading partners' money, and a wave of domestic asset price convulsions able to leap tall buildings in a single bound.

But Dick had more in mind than just doing the bold thing here. He wanted to get re-elected, after all, so in addition he brashly defied "ahh -- all those blue-suit Republican verities -- ahh -- fuck 'em!" He'd go pinko if it was necessary -- and it was.

So -- bang! -- simultaneously with slamming the gold window shut, he clamped on a wage and price freeze and slapped an emergency import surcharge of 10% on all imports. "Ahh, not even Harold Wilson dared pull moves this big, Bob. I guess we're ALL Keynesian pixies now."

And did the Great Satan of Yorba Linda bother to consult the Congress or Uncle's major trade partners or the IMF? Hell, no, madame, he did not. Wall Street? Prolly a Rockefeller or two, but that's another story.

God bless him, President Nosferatu simply and quickly got his program ready and acted decisively, radically, massively, and in prime time on the idiot box, using that hokey punchbowl mix of preemptive petty spite and doomsday gravitas. That had a tang, brothers and sisters, when drunk live, that has seen no equal since. I recall rolling on the floor of the tele-communications center of my fleabag Soviet in ecstatic delight.

Why can't Obama be our Nixon?

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(*)By a vicious Fed chop to credit flows, sending the real rate of interest through the roof -- the old tried and true Eisenhower/Martin turkey-rope way.

A year after being pronounced dead, now the Republicans are resurgent! Liberals will say that this proves that Obama must moveto the left, but Obama will tack to the right. This will prompt a spate of anguished blog posts and Nation editorials wondering why Obama is doing this.

You read it here first.

Actually, I think Comrade Al beat him to it. But hey, who's keeping score?

The Euro zone also must produce mass misery for its jobblers. In fact its forex winch is even worse than Uncle's. Read this piece by econ-con Willy Buiter, shown above. Guess it takes one of the tribe to glare ferociously at a tightass bank policy when he sees it:

"The euro has become a currency on steroids. Its relentless nominal and real appreciation since the end of 2000 was briefly interrupted in the second half of 2008, but resumed with a vengeance during 2009. The strength of the currency is hurting the exporting and import-competing sectors of the Euro Area. Unemployment and excess capacity continue to rise."

Oh by the way -- tightass Buiter's bold solution:

"Cut the official policy rate from 1.00 percent to 0.00 percent, and the interest rate on the deposit facility (reserves held by commercial banks with the Eurosystem) from 0.25 percent to minus 0.75 percent"

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(*)Powers That Be.

The White House says that Republican wins in two governors' races were not referendums on the president.

Well, they would say that, now wouldn't they? I doubt they expect to be taken seriously, but who knows for sure. This pantomime of theirs has its own logic and the mummers are all solipsists. One could peel the onion of their psyches forever.

I can make a case that it was indeed a referendum, and score a few wholesome tendentious points along the way, but it seems far more likely that the Democrats are paying the price, an expected and even welcome price, for demobilizing and demoralizing their base. The Great Liberal Bus is teetering on top of a pile of the people pushed under it. From the very start, the Democrats have fought their activists harder than they've fought the Republicans. They've had them arrested! They threaten defunding and priggishly abandon allies at the first whiff of scandal. This is not the kind of thing that drives liberal, meliorist activists into the arms of the Republicans, but it's hardly inspiring. All they have left, at this point, are the unhinged creepy people Smithee keeps an eye on.

Lest I be mistaken for a concern troll, I have no advice for them — other than drop dead, of course. They're actually doing just fine, by their standards, and following a business model that works perfectly. That's the problem. Over the next few years, they'll go back into feckless "opposition" and wait for the Republicans to so thoroughly fuck the goat that all they have left are their own unhinged creepy people. If you've ever wondered why our national discourse is so spiteful, neurotic, dishonest and infantile, now you know. That's what works best on unhinged creepy people. They're an invaluable resource, for kleptocrats.

There's a point I want to make that is hard to overstate. The Democrats will take a win, if they can get one without changing their model, and will take a loss too, if that's in the cards, also without changing their model. It's a no-win situation for meliorists. If they align with them, they're going to be suckered into a corporate "worse the better" strategy every time. It's amoral collegiality, and it works. The only electoral beneficiary is the Republican Party. The rest of the victory, needless to say, stays with their sponsors.

Here's Democratic Party hack, Markos Moulitsas Zuniga, shooting up -- quite understandably -- after a hard day at the polls:

When we set out with our own rebuilding project, we fought to reform the Democratic Party at the same time we promoted a "more Democrats" mantra to get the GOP out of power. We fought for good, electable primary candidates while also supporting less-than-perfect general election Dems against particularly bad Republican incumbents. For the most part, our primary candidates were good choices, and almost all won their generals. The big exception -- Joe Lieberman -- ran as a third-party candidate after getting ousted in the primary. Connecticut voters wouldn't make the same mistake if they had a do-over.

These conservative activists are approaching things differently -- they'd rather lose general election races than make gains in Congress with (in their eyes) less-than-perfect Republicans. That's a weird way to build a majority.

All this wonderful teabagger stuff is about party-building: keeping the base fired up. The Dems don't do that, and don't want to do it. That's the marvelous asymmetry of the parties -- the only one that matters.

The Republicans like to keep their base fired up. The Democrats like to keep theirs doped up. The Republicans want their base mad as hell. The Democrats want theirs resigned.

Poor Kos. For all his recherche wonkery, he's very naif. He really wants his party to win. But his party actually doesn't care much about winning. They're quite content to be second banana most of the time, as long as their employment in some capacity or other is secure. When lightning strikes -- as it does from time to time -- and his party controls Congress and the White House, their first impulse is to make sure the system stays intact.

So they get these off-year repudiations -- and I bet the midterms next year amplify the effect, and reproduce the pattern of 1994.

The True Believers blame it on the lazy and neglectful public, who fail to turn out -- as they did in droves, across the river from me in New Jersey. Don't these poor baseniks understand how important this election is?

In fact, they do. They understand just how important it is.

That's why they stay home.

That's my grad school macro teacher right there, Fauxbel winner Ned Phelps, and here he is producing a stream of yellow piss not even a Polish plough horse could equal:

" -- Keynesian economics, which had been nearly forgotten inside the macro field, has found new voices from outside. They take the position that fiscal “stimulus” of all kinds is effective against slumps of all causes."

And here's Princeton pwog demigod and fellow Fauxbel recipient Paul de-Krooggamo, incensed by Ned's tooning of the golden host of Keynesian schlockmeisters:

"OK, no point in reading any further. Nobody, and I mean nobody, holds that alleged position -- it doesn’t even rise to the level of caricature, since it bears no resemblance to what people like me are saying."

"For the most part, the opponents of stimulus just don’t listen; they have this image of the idiot Keynesian so fixed in their minds that they can’t be bothered to pay any attention to the actual arguments."

PK, ever the confident pedant-pedlar-preacher, instead of giving the Phelps treatment its due, simply proceeds directly to his own stupid pet trick, the zero bound moment we're in now -- aka Keynes' liquidity trap. It might be worth following Ned a little farther than his second paragraph, though.

The liquidity trap: As the story gets told, the monetary authorities lose control of their ultimo weapon -- the "real" rate of interest -- when the policy rate is basically already at zero. Yup, the Fed is handcuffed. Imagine that. "Love to help, folks, but...."

You just can't push the policy rate any lower than zero without it becoming a tax on bank reserves, or something equally extra-terrestrial -- heaven forbid!

That's a problem because if you want a recovery led by the private sector, you might have to do something just that wild and crazy. Because in such a recovery, as Ned sez, "Employment will recover -- only as far as investment demand will carry it."

Example:

Say you're gentle Ben and you reckon the real rate of interest necessary to restart corporate investment in plant and equipment or even building up inventory has fallen to -9%. (Yes, you'd have to be allowed to pay back less than you borrowed.)

Recall the nominal rate is now assumed to be zero and inflation is, say, running around 3%. Now if we've got a policy block at the zero bound, that puts us 6% short of full spontaneous investment-led recovery.

Now as mad redhots without scruples, and without any respect at all for the capital markets, we could simply make uncle pay the diff -- you know, get the bank to loan out at zero percent for some term and have sucker sam pay the borrower a 6% per annum subsidy on outstanding balances till paid off -- kool, eh?

OR...

We could have Uncle simply, you know, -- perk up inflation. Up to 9% -- but, umm that's just the other horn of the liquidity trap. There is no way to push up inflation simply by flooding the system with dollars, and basically that's about all the Fed could do.

In times like these, the private markets turn sponge-dry, so Uncle might have to buy in all the federal debt he has out there and still -- well, you get it, right? Regardless of the possible -- Realpolitik-wise we're gonna obviously fall far short of these remedies, especially given Wall Street's Turkish submission hold on the Fed.

So -- what else might a pwog goo-goo suggest?

Enter schlock fiscal policy -- the old Keynesian hydraulics. Run a big deficit -- pump up demand so much that Uncle lifts the recovery real rate of interest. In fact with enough pumping Uncle might get it up to the -3% real rate we can reach without braking the zero bound (remember dat ole debbil inflation).

"Well, maybe not," sez my mentor Ned, at least not in today's context, because "To pump up consumer or government demand would force interest rates up and asset prices down, possibly by enough to destroy more jobs than are created."

That is, the attempt to lift effective demand by running a deficit might get offset by simultaneously increasing the bugaboo real interest rate -- which remember, by assumption I pinned at -3%.

My man obviously gets Krug's zero-bound policy-rate stymie. In fact he trumps it by generalizing the stymie to all levels of nominal interest. Ned don't need no stinkin' zero bound -- err -- in the present context. Right now, no matter what the nominal rate is, if a signifigant drop is called for, the fed can't make it happen 'cause "interest rates cannot fall much in an open economy."

What? Why? When? Wherefor?

Imagine the Fed shoots in money to offset the deficit effect on real rates. Then -- and just accept this as true: if the rate drops the dollar forex rate will drop too. Now the dollar falls and "a weaker currency has contractionary effects on output supply [which] could spoil the expansion coming from the effects on export and import demands."

Ned admits the falling dollar would have a recovery effect too -- the normal one I beat to death 'round here: increasing exports while decreasing imports. But his "contraction of output supply effect" trumps it -- err, I guess.

Ned has secretly assumed a magic bean set of elasticities here. A lower dollar would increase output in most settings of this baboon tree of elasticities. To get his beans to grow into a pole reaching up to the clouds, you gotta have Ned's hidden bevy of additional variables and set 'em just so -- or else you won't get this eddy-dominates-prevailing-current effect.

He might of course be right, and Krug might have gone a little deeper into the reasons he might not be right. But maybe Krug's instincts aren't all wrong. Here's Ned's own forecast:

"As I see it, the poor state of balance sheets in households, banks and many companies augurs a “structural slump” of long duration."

This story is a year stale, but not for a vet of the 10th Mountain Division. Nope, for me this story never goes stale. Just mention battle duty pay to me and I'll go red-knuckle crazy mad till beer 13 at least.

Last year the Congressional Budget Office did a study of military contractors in Iraq. Among other things they compared the cost to the taxpayer of mercenaries -- or more politely, "contractors" -- and soldiers. Turns out they're just about the same (though the contractor sees more of it in his paycheck).

Alternet's takeaway, however, from the pen of one John Basil Utley, was the shocking cost of keeping a sergeant in Iraq -- half a mil a year! Horrors! This is pretty much bullshit. Let's assume Utley's vague account of monetary compensation ("actual cash pay between $51,000 and $69,000 a year") refers to time in grade and he's not slip-streaming up the chevrons between Sergeant (E-5) and Master Sergeant (E-8), all of which would be addressed as Sergeant. Troops are there 24/7, so that's 8760 hours a year, minus 168 for R&R twice a year, a total of 8424 hours a year doing what he's paid to do. So his hourly pay equals between $6.05 and $8.19 an hour.

Utley:

Non-cash benefits — pensions, medical care, child care, housing, commissaries — likely double this amount, even during peacetime. Pensions are the biggest ticket item. The average retirement benefit for a soldier or sailor who stays in for 20 years equals $2.6 million, if he or she lives to the age of 77....

A soldier's pension is 75% of his base pay. If a sergeant never gets promoted past pay grade E-6, Uncle Sam gives him his walking papers. Current rate for an E-6 with 20 years of dedicated service -- $40,438.80 gross base pay. If he was recuited at 18 years of age he'd have 39 golden years at an annual rate of $30,329 a year! That's $583.25 a week, times 39 years = $1,182,834.90. But then as Utley parenthetically notes,

... most soldiers don't stay in the service long enough to get this benefit.

"Contractors, meanwhile, are increasingly filling the roles once played by U.S. Army personnel. In terms of total costs, the CBO points out that there are about an equal number of contractors as soldiers, the highest proportion for any war in American history. However, only 20% are U.S. citizens. And most contractors, for example kitchen personnel, are paid much less than the guards who earn $1,222 per day. The report also notes that their contracts allow for much more flexibility and shorter assignments than what regular Army soldiers cost the government."

You want mercs, Uncle, fighting our war? I say, take a strike, dude. Every union defends its work!

I here announce the future of national defense -- Soldiers Airman Marines and Sailors Local #1.

The SAMS union: Make our livin' laying foreign souls to rest.

Our corporate empire wants results? It's time they start paying for it. Union work for bid is the only way. Not with these Blackwater ass hounds in armored Chevy Tahoes that can't even croon "Satisfaction"

Uncle Sam, you want to take a village, fine, here's my bid. We've got our own foreman, thank you. Your officers are obsolete. Fuck off, General Nobody! Clear your desk, and take that Geneva Conventions garbage back to wherever the hell it came from, since we only use it to play hangman! Lower the flag at West Point!

See you in Vegas, comrades at the SAMS convention. I'll be the one caught cornholing a raw delegate! _

The squalid compost heap labeled "healthcare reform" by a peacock-proud Nanikins, the popeyed dominatrix of the House, has provoked a lot of harsh stuff -- but an especially beautiful piece of pink hysteria is over there at Counterpunch, written by one Jay Fred Murphy. Tidbits:

"The Democrat Congress gave us a corporate driven healthcare bill which amounts to nothing more than a de facto bailout of the healthcare insurance companies.... Imagine promising the poor and desperate people of this country healthcare reform and passing legislation which will not only hurt the working class but strengthen the very forces which oppose real reform – the healthcare insurance companies... spread misery on national level [and] destroy any possibility for meaningful healthcare reform for the next 40 years."

And the man can wander off topic pretty fair, too. He gives us a marvelous detour back in time through the Clinton wallow -- it's quite a Mr Toad's wild ride -- before we get down to an account of some of the highlights of this house bill of abominations, which

"... will not only drive up insurance costs but will not even permit the government to negotiate with pharmaceutical companies, thereby driving up pharmaceutical costs as well! ... Americans will now be forced to buy health care plans from private insurance corporations. Forced! ... What a choice: buy insurance coverage or pay a penalty of hundreds or even thousands of dollars per family if they decide to forgo insurance"

"A little arithmetic... Imagine a family at roughly 300% of poverty -- around $55,000 a year. It will cost them in the neighborhood of $15,000 in taxes, $14,000 in mortgage or rent; close to $20,000 on childcare and they'll need around $7,000 for food. That puts them in debt already! Now they will be forced to buy health care... forced! Under penalty of law! Even with government subsidies they will still be in debt!"

"The Senate version of health care reform is even more draconian than the House version."

But enough of this self-indulgent delighting. The reason I posted this lies elsewhere. See, ah -- well -- the piece actually stars none other than Father Smith's wrestling partner, and the nation's prima ballerina of the center aisle, nutmeg senator Joe Joementum Liebfraumilch.

"The real hero of this tragedy [is] Joe Lieberman [who] promises to join a Republican filibuster!"

"While it is never morally acceptable to do something wrong even for a good reason (the ends never justify the means), it is always morally acceptable to do something right even for the wrong reasons!"

"Lincoln -- did not free the slaves because it was the morally correct thing to do. He did it for political reasons but nevertheless he did do it and it was the right thing to do."

The highly moral moral:

"We may not like Joe Lieberman and Max Baucus but ironically we may be in their debt if they are successful in preventing this very dangerous piece of legislation."

Even Dennis K gets a look and a pause to consider, well, the very topos of this blog:

"Perhaps Kucinich does more harm than good by remaining in such a party. By remaining a Democrat he legitimizes the actions he opposes and keeps millions of well intended people from forming a truly progressive opposition party believing the myth that the Democrat Party can be changed from within."

One can only marvel at the mad sadistic ingenuity, the compulsive, perseverative overelaboration of torture, the finical luxuriance of bureaucratic cogwheels, worm gears, escapements, and ratchets, that marks the Merit Administration's approach to "education". The program actually has the amazingly sinister name "race to the top". From the New York Times:

[T]he Race to the Top program, which will reward some states undertaking bold school improvement initiatives with awards totaling $4 billion, [requires] states... to prepare applications for a first round of the grant competition, and [then] a second round. Applications must comprehensively describe multifaceted strategies for change....

A perfect application would earn a state 500 points, with 125 points allotted for articulating a perfectly coherent agenda for change; 70 points for adopting higher standards and higher quality tests; 47 points for developing computerized systems to track student academic progress; 138 points for recruiting quality teachers, evaluating their effectiveness, and using the evaluations in tenure and other key decisions; 50 points for turning around failing schools; 30 points for other miscellaneous categories of change; and 40 points for fostering the growth of charter schools.

The New York schools chancellor, Joel I. Klein, said the administration had improved the rules dealing with failing schools. The draft rules left states free to choose frequently ineffective halfway measures, like replacing a school’s principal, in outlining their main turnaround strategies. The final rules, he said, require states to use bolder measures in a majority of school overhaul efforts, like replacing entire school staffs or closing a school entirely.

Where to after capitalism?

Immanuel Wallerstein

"FIRST, how did we get to where we are today? Let's retrace our steps several decades backwards.

The period 1945 to 1970 saw the height of US power in the world system and also the moment of the most expansive economic upturn that the capitalist world economy had known.

So what are practical steps that we can and should take? I would put at the head of the list actions that can minimise the pain that arises from the breakdown of the existing system.

The second thing that we can do is engage in serious debate about the kind of world system we want, and the strategy of transition.

The third thing we can do is to construct alternative decommodified modes of production.

Read this, fellow doom lovers. it's a fairly clear and untwisted account of the global trade scene, and it suggests -- well, not doom, but maybe double trouble:

"Taking as read that the great trade collapse was primarily driven by a sudden, synchronised and severe drop in demand, it is clear that trade will recover as demand recovers. Indeed, trade is already bouncing back at a fairly spectacular rate. While the bounce is impressive, it is not unexpected. Indeed all the post-war trade collapses have been followed by very rapid recoveries in trade flows, as Figure 5 [below] shows.

The chart plots the three major trade collapses highlighted above. In the 1982 and 2001 episodes, trade returned to its pre-crisis level in two or three quarters after the nadir; the 1975 crisis took four quarters -- "

"Do global imbalances matter? Is their continued existence driving the world economy towards another global crisis? These are questions on which macroeconomists have not yet formed a consensus. The IMF and World Bank have calmed the waters by projecting reductions in the imbalances of the world’s largest trading nations – especially China and the US.

This column points out that these projections of improving imbalances are almost surely wrong. The rapid collapse of trade between the third quarter of 2008 and the first quarter of 2009 improved most balances of trade. It could not have done otherwise; if both imports and exports drop rapidly, the gap between them drops equally rapidly. In the same mechanistic manner, the recovery of trade flows – a recovery that seems to have started this summer – will almost surely return the US, Germany, China and others to their old paths."

Left to its own devices, the spectacular trade contraction will lead spontaneously to a trade re-expansion and get us back into the wicked imbalances of the Bush II years.

The great contraction is not a great correction. For a great durable correction we need -- as all attentive SMBIVAers know -- some very serious adjustments to various players' incentives, notably through drastic foreign exchange re-alignments.

Likely? -- in a New York syllable -- Naaah!

What's likely is plan B -- also well understood by denizens of pappy Smiff's place -- a protracted job-short credit-cramped expenditure stagnation, primarily inside the leading first world's consumer economies. In other words, slow the trade rebound down, asap, amap.

Now goodness knows that won't solve anything, but it sure will allow the key planetary plutonauts more time to ponder their options. Understandable, given the first rule of exploitation: "do no more harm to the host than does good for you -- except for sport."

Roaring back into massive absolute trade gap territory looks to be... not even all that surely good for the plutonauts, who have no widely shared conception of what the Alabama hell might happen the next time the doom dong sounds.

So, Nascar fans, it's yellow-flag time on the world track.

Michiko is herself a very tedious, pedestrian, and humorless writer, with attitudes as predictable as the monsoon season, and a sturdy but limited stock of narrow conventional ideas. So it's not surprising, though deeply gratifying, to find her reproaching the Arctic fox for being.... unqualified!

Sample:

The most sustained and vehement barbs in [Palin's] book are directed not at Democrats or liberals or the press, but at the McCain campaign. The very campaign that plucked her out of Alaska, anointed her the Republican vice-presidential nominee and made her one of the most talked about women on the planet — someone who could command a reported $5 million for writing this book.

... Some of Ms. Palin’s loudest complaints in this volume are directed at the McCain campaign’s chief strategist, Steve Schmidt, [who] was one of the aides to most forcefully make the case for putting her on the ticket in the first place.... [N]either Mr. Schmidt nor Mr. McCain’s campaign manager, Rick Davis, apparently saw Ms. Palin’s “lack of familiarity with major national or international issues as a serious liability” ....

[T]he McCain campaign... often feels like a desperate and cynical operation, willing to make a risky Hail Mary pass in order to try to score a tactical win, instead of making a considered judgment as to who might be genuinely qualified to sit a heartbeat away from the Oval Office.

I used to kind of like newspapers. The paper, the ink, the daily ritual of fetching and folding, the columnists you liked and the ones you liked to hate: newspapers had their pleasures. I'll miss 'em when they're gone -- which should be happening any minute now.

But then I read Michiko Kakutani, this tiresome drudge, this shallow scribbling self-righteous subliterary Babbittess, ordained a Decider and gatekeeper by some unaccountable Sulzbergerian whim, and I think the end can't come too soon.

------------

(*) Who famously thumbed his thesaurus long enough to give us the phrase "nattering nabobs of negativism".

Closing off the fast fiscal policy track to recovery, needless to say, is a key part of the whole yellow-flagging of the domestic American economy.

Enter Time Square merlin-without-portfolio Paul "nattering nabob" Krugman, mad as hell and not taking it any more -- errr -- without, ummm -- serious protest.

His contra blast comes in a blog post under quite a daring headline: "Stupidity Economy", where Paul announces sagely that "bad ideas are acting as serious constraints on policy."

Bad ideas, Paul? Come on. Cui bono, pal, cui bono? Where's our countryless cosmopolite corporate claw holders in all this? What if THEY want a yellow flag here -- not because they're "stupid", or condemned to operate under the laws of faux markets, or even because they're any more or less greedy than the rest of us. What if it's err -- umm -- prolly in their best long-run interests? What if they're kinda like our old slaveholding class? Maybe the good of the nation -- the progress of the nation -- right now is, well, not so good for them?

Now of course top liberal economist Krug knows perfectly well what ought to be done -- for the good of America's job-class majority, at any rate:

"[A] really big fiscal expansion, sufficient to mostly close the output gap. The economic case for doing that is really clear. But Washington is caught up in deficit phobia, and there doesn’t seem to be any chance of getting a big enough push."

Well, since we can't increase total job hours without triggering an import surge, then we start job-time sharing, like the Euros do. Spread the misery and to try to squeeze from both sides. He throws in incentivizing bribes for the corporate hiring office, sorta like the new machine tax credit.

Savour that a while, fellow dismailians -- then let's move on to finger-pointing time: not exactly cui bono, more like cui scapegoat-o.

See its not the trans-nats Pauli boy accuses. He's decided to tag China with the blame for our stagtime horizons:

[T]he problem of international trade imbalances is about to get substantially worse. And there’s a potentially ugly confrontation looming unless China mends its ways.... Most of the world’s major currencies “float” against one another. That is, their relative values move up or down depending on market forces.... these days most nations try to keep the value of their currency in line with long-term economic fundamentals. China is the great exception. Despite huge trade surpluses and the desire of many investors to buy into this fast-growing economy — forces that should have strengthened the renminbi, China’s currency — Chinese authorities have kept that currency persistently weak. They’ve done this mainly by trading renminbi for dollars, which they have accumulated in vast quantities. And in recent months China has carried out what amounts to a beggar-thy-neighbor devaluation, keeping the yuan-dollar exchange rate fixed even as the dollar has fallen sharply against other major currencies. This has given Chinese exporters a growing competitive advantage over their rivals, especially producers in other developing countries. What makes China’s currency policy especially problematic is the depressed state of the world economy. Cheap money and fiscal stimulus seem to have averted a second Great Depression. But policy makers haven’t been able to generate enough spending, public or private, to make progress against mass unemployment. And China’s weak-currency policy exacerbates the problem, in effect siphoning much-needed demand away from the rest of the world into the pockets of artificially competitive Chinese exporters."

"[T]his problem is about to get much worse.... Looking forward, we can expect to see both China’s trade surplus and America’s trade deficit surge.... With the financial crisis abating... U.S. trade... showed a sharp increase in the trade deficit between August and September. And there will be many more reports along those lines....

So picture this: month after month of headlines juxtaposing soaring U.S. trade deficits and Chinese trade surpluses with the suffering of unemployed American workers. If I were the Chinese government, I’d be really worried about that prospect."

Maybe if we slow the pipe flow here a bit, by reducing effective demand for imports, the strong-boy dollar profit lifts can continue.

Kill 'em with 3000 cuts not 1000. Slow the depth of each cut, but keep the rate at one cut per month. 25 years of misery, not 9. At least for now, we can always speed up again.

The Han accession to the north currency club could be 2025, 2035, but prolly 2020 sounds best. Here's PK again:

"[T]he Chinese don’t seem to get it: rather than face up to the need to change their currency policy, they’ve [decided] to make our unemployment problem even worse."

Hey, it's already happening. What's left to do in Beijing? Wall Street is taking the point position here. On that topic, note this laff riot of a line from Mr K:

"I’m not sure the Obama administration gets it, either."

For those with a detail-oriented disposition, here's Krug's job "time share" plan and raison d'etre:

"Consider, for a moment, a tale of two countries. Both have suffered a severe recession and lost jobs as a result — but not on the same scale. In Country A, employment has fallen more than 5 percent, and the unemployment rate has more than doubled. In Country B, employment has fallen only half a percent, and unemployment is only slightly higher than it was before the crisis Don’t you think Country A might have something to learn from Country B?".

Dean Baker, ever the eager Gedanken mischief maker, suggests a Vergeltungswaffe Uncle might train on the PRC's yuan:

"Just as China can set a value of its currency against the dollar, the US government can set a value of the dollar against the yuan. The Chinese government currently supports an exchange rate at which the dollar can buy 6.8 yuan....

The US could adopt a policy through which it will sell dollars at... say 4.5 yuan."

"The difference in exchange rates would provide an enormous incentive for Chinese businesses and individuals to exchange their yuan at the Treasury rate rather than the official Chinese rate. While this may violate Chinese law, the enormous potential profits would make the law difficult to enforce. In a relatively short period of time, the US exchange rate is likely to become the effective market exchange rate.Of course... warring exchange rates would lead to a period of instability and unnecessary hostility between the two countries. "

Ahh does my mouth water -- the blood shows at my temples -- the antique ill-used Celtic knees yearn to spring into action -- a billy goat awaiting the alarm.

Actually, Dean hasn't done the full model simulation on this, I suspect. I doubt a sufficient torrrent of illicit yuan would emerge even at 2 to 1. However if Dean is just trying to make one truth perfectly clear, then he surely has: by one means or several others, regardless of the efficacy of his forex V-4,

"Washington has the ability any time it chooses to push the dollar down to a more reasonable level against the yuan."

We recently had a bit of a dustup here about the value or non-value of newspapers.

Coincidentally, I spent a few minutes this evening gathering up, for recycling, a sheaf of recent issues of the New York Times, lying scattered about the house where I've flung them in rage. (Sometimes I get to page 3, sometimes the top front-page headline is enough to set me off.)

Last Sunday was certainly a first-section day, if not first-page. That's why I never got to this inner-section piece which I happened to find face-up tonight underneath the clavichord:

The Evolution of the God Gene
By NICHOLAS WADE

In the Oaxaca Valley of Mexico, the archaeologists Joyce Marcus and Kent Flannery have gained a remarkable insight into the origin of religion.

During 15 years of excavation they have uncovered not some monumental temple but evidence of a critical transition in religious behavior. The record begins with a simple dancing floor, the arena for the communal religious dances held by hunter-gatherers in about 7,000 B.C. It moves to the ancestor-cult shrines that appeared after the beginning of corn-based agriculture around 1,500 B.C., and ends in A.D. 30 with the sophisticated, astronomically oriented temples of an early archaic state.

This and other research is pointing to a new perspective on religion, one that seeks to explain why religious behavior has occurred in societies at every stage of development and in every region of the world. Religion has the hallmarks of an evolved behavior, meaning that it exists because it was favored by natural selection.

The logical gap between the Oaxaca finds and Wade's made-up just-so story is wide enough to drive a galaxy through -- so wide that many Freshman Comp teachers might notice it, and write a mean little marginal note. But the Newspaper of Record has laid it out, accompanied as always by some nice attractive photographs, with the usual magisterial self-assurance. That's the way it is, folks. Science has spoken.

This slug-stupid and rat-ignorant piece, a thousand words of vapid wishful thinking and factless speculation, is the sort of thing subscribers to the Times pay for. It's a racket that needs to be closed down. Religion may be the opiate of the people, but the Times is the opiate of the Upper West Side, and it's time for us to go cold-turkey.

There's more involved here, of course, than just the familiar vulgar Philistinism of the Times. The reason that Wade's indigestible haggis of arm-waving illogic and irrelevant quick-study erudition passed editorial muster is simply this: the Times is the Vatican of American received opinion and ideological orthodoxy, and these days, there is absolutely nothing more central and fervently-believed in America than the idea that there is a biological explanation for everything.

Do you like sex with members of your own sex? Ah, you must have the Gay Gene.

Do you not enjoy school, and are you uninterested in pleasing your teachers? You must have the Learning Disability Gene.

Are you upset about the state of the world, and the mess you're leaving to your gay, learning-disabled children? You must have the Sour Old Depressed Guy gene, which only gets activated at the age of 50.

How could such a gene get into the genome, and stay there? I have no idea, but I bet Nicholas Wade could come up with an attractive story, in less time than they give you to take the SAT. He couldn't cite any real evidence in support of it, but we couldn't disprove it either -- it's notoriously hard to prove a negative.

Dr Johnson observes somewhere that there are but two causes of belief: evidence and inclination. There's no evidence for sociobiological novelettes like Wade's; but there is a strong inclination in the culture to wish that they were true.

Of course it's otiose to point out that this is part of the (amazingly) still-ongoing reaction to the Sixties.

Our masters clearly hated it when we decided, back then, that the sky was the limit and anything was possible. The genetic explanation for everything was the response: it's all programmed in the genome, and human agency is an illusion.

What's puzzling is how we've embraced it, across the board. From liberals to libertarians, everybody seems to have bought the idea that genes are everything.

Why are we so eager to deny our own competence and autonomy -- our own capacity to act, our own agency, as the buzzword goes? Why do we desire so strongly to believe that our lives are pre-scripted in that silly scrap of DNA?

I dunno exactly, but it's worth pondering. I can tell it's inclination and not evidence. But to explain the inclination -- hoc opus, hic labor est!

"Senate Banking Committee Chairman Chris Dodd... wants to take supervisory power from the Federal Reserve, which is controlled by the banks it pretends to monitor, and put it in the hands of a new independent agency.... As Dodd’s spokeswoman Kirstin Brost put it: “The Federal Reserve flat out failed at supervising the largest, most complex firms.” But White House economic adviser Austan Goolsbee frets that taking power from the Fed would cause financial industry “nervousness.”"

Obviously senator Dodd is willing to play softball here -- but not the 'Bama-shave team; they're playin' it by the golden rule, eh? Here's Goolsbee caught by the camera recently:

Come to think of it he does look a bit nervous. Judging by that posed priss look, the Ghoulman was obviously cornered by a lady press photog, not a cellphone-wielding foreclosed harridan of a homeowner.

Scheer goes on to spotlight this Bronxville honey bear, Neal Wolin...

... known as Woodie Tobias to Summers' Doctor Tongue and Bob Rubin's Count Pukula -- back in the Clinton wonder years:

Scheer:

"In the Clinton years, Wolin was general counsel to then-Treasury Secretary Lawrence Summers, the key architect of the radical deregulation that caused the recent banking collapse. Summers went off to work for hedge funds and banks that paid him $15 million in 2008 while he was advising Obama. Meanwhile, Wolin became general counsel for Hartford Insurance Corp., which had to be bailed out by the taxpayers because it took advantage of the radical deregulation that he helped write into law."

As my pop used to say about his competitors from time to time -- "a real cesspool denizen he."

Population, 1959: 180 million

Population per unit under construction: 120

Population today: 300 million

Population per unit under construction: 600

>

Good news -- in the long run, of course: via Talking Points Memo:

PollTracker

     *
       Obama
       Approve 49%, Disapprove 44%
       Nov 20 Gallup

(finally, President Timberlake's numbers drop into the zone of normal 
objective reality. I can only assume that the 7% not accounted for were 
too drunk to answer the poll)

     *
       Pres '12
       Obama (D) 49%, Huckabee (R) 44%
       Nov 20 PPP (D)
     *
       Pres '12
       Obama (D) 51%, Palin (R) 43%
       Nov 20 PPP (D)
     *
       Pres '12
       Obama (D) 46%, Paul (R) 38%
       Nov 20 PPP (D)
     *
       Pres '12
       Obama (D) 48%, Romney (R) 43%
       Nov 20 PPP (D)

It really was a "perfect storm" of events, recently: we had the epic FAIL of the Obama Administration in the areas of healthcare, the economy, and the war in Afghanistan; the Democrats stumbling in the recent elections in Virginia and elsewhere; Obama's approval rating dropping to a level representative of normal objective reality; the ominous spectre of defeat for the Democrats in the 2010 off-year elections -- and a movie just out about the end of the world in 2012, which was pretty much the icing on the conceptual cake.

Now, I'm not into clairvoyance or prophecy or any of that woo-woo, but the events of the past year -- most notably the healthcare "reform" debacle -- had gotten me to thinking that at least in one respect, the Mayans may have been on to something...

I had to laugh. The New York Times brain trust wants Goldman Sachs to show good citizenship. The editors helpfully provide them with a mailing address to send a donation that would defray the public debt. The debt, to flog the obvious, is not the problem.

So I have a much better idea, with a similar degree of likelihood in fruition. Arrest them all and, after a fair show trial, confiscate everything they have — except, possibly, their underwear.

Fox News shoehorns out the goober phrase of the week -- "double-dip recession" -- with Obama, playing macro-economist manqué, suggesting precisely the fiscal policy path that if boldly followed just might indeed insure a second dip.

Here's how Wrong-Way Barry Corrigan, our Lincolnesque POTUS, sees it: If he's to manage the coming great stagnation prudently, a la Goldilocks, that'll require maintaining a careful mid-channel course between the Scylla of too much "red ink" and the Charybdis of too little employment.

"Red ink", Mr President? I thought Uncle Sam can't ever get enough red ink these days. Here's Der Kroogglehorn:

"Overall borrowing by the nonfinancial sector hasn’t risen: the surge in government borrowing has in fact, less than offset a plunge in private borrowing."

"The combined percentage of those in foreclosure as well as delinquent homeowners is 14.41 percent, or about one in seven mortgage holders"

"Climbing national debt could cause... people [to] lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession."

Something tells me Dr. Hope had some other kind of people in mind.

So if big bad papa-bear deficits are out, maybe bribes will work, as in

"... tax provisions that can encourage businesses to hire sooner rather than sitting on the sidelines."

And maybe there isn't. I hear the vox populi now: "one term wonder -- one term wonder."

Sarah, my church-supper hot-dish darling, your ascension can't come a moment too soon.

From AP:

Obama to unveil plan to add troops in Afghanistan
By ANNE GEARAN, AP National Security Writer

WASHINGTON – War-weary Americans will support more fighting in Afghanistan once they understand the perils of losing, President Barack Obama declared Tuesday, announcing he was ready to spell out war plans virtually sure to include tens of thousands more U.S. troops... "I intend to finish the job," he said.

I doubt it, and frankly I hope he doesn't get his second-term opportunity. I hope his Beatlemaniacs desert him in droves -- I love it when people learn from experience -- and I don't give a shit, frankly, whether Sarah Palin or some such clown is our next president. The more the office is brought into disrepute, the better I like it. Simplicissimus for President!

Obie's statesmanlike compromise was the null hypothesis as soon as General McHruska or McChrisis or McChimaera, or however he spells his eccentric name, called for the entire under-fifty population of the United States to be sent to Helmand province. Field Marshal Mad-Eye Mooney demands something crazy, and Obie gets to split the difference between sane and crazy.

It's the old joke, with all its many variants: A lunatic thinks the moon is made of green cheese. An astronomer thinks the moon is not made of green cheese. A liberal thinks the moon is only partly made of green cheese.

It's funny. I knew it was going to happen, and yet there's some gormless corner of my mind that's still -- well, not surprised, exactly. It's more that I can't quite put the two things together: my human impression of the guy -- hell, I'd trust him to carpool my kids, if I lived in his world -- and the patent fact that he's a soulless bloodthirsty robotic warmongering mass-murdering monster.

Obie's obviously a smart guy -- not as smart as Nixon, to be sure; Obie doesn't have that wonderful germ of madness and resentful fury that made Nixon so insightful. He's an earnest pedestrian Good Student -- a "programmed stooge," to borrow a phrase from Owen. But even so, there's something about him that makes me think he would like to be a decent guy.

I've concluded that this impression on my part is utterly illusory. It just proves that I haven't quite shed my capacity for identifying with other members of the merit class.

Now I've tried very hard. But brainwashing is hard to un-wash. Perhaps we should be a little more generous to the hapless merit-class Obamaniacs who haven't grasped what a menace their class is.

-- Naaah, the hell with it. Fuck 'em.

From the Wall Street Journal:

One in Four Borrowers Is Underwater

The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.

The gaunt Aunt Sadie of a gent diddling his second penis above, one Mark Thoma, has an aggregator-type econ-con web site I've frequented like a barfly for many many moons, with great profit.

Alas, now he's gone and taken up a second gig as a penny-a-word pundit over at CBS's money watch, and in no time at all, through a self-indulgent beaverish flood of pompous high-minded idiotically conventional postings worthy of Woodrow Wilson himself, Mark has shown a side I doubt even his own shaving mirror could stand.

Here's a recent specimen, on a topic that invariably zaps a real raw nerve in my neck: the independence of the Fed from our great and terrible Congress. In this piece of foolishness, a quote from Barney Frank to the effect that Fed regional presidents "too often vote in favor of higher interest rates", triggers this magisterial response from the brand-new bigfoot:

"That... sentence means he believes the Fed has favored low inflation over low unemployment as it has set interest rate policy. That may or may not be true, but do we really want members of the House setting interest rate policy or changing the structure of the Fed whenever they disagree? I don’t."

The House -- the only organ of American governement with any resemblance to a democratic institution -- setting interest rates? God forbid! Imagine if the people out there in their benighted millions, those ignorant TV-watching log-bumps, actually got a crack every two years at hiring or firing the folks that control the headwaters of our credit system?!?!

Mark is not alone, of course. There's a chorus out there bellowing the same sort of thing every day. Here's famed Princeton academe and former Fed board member, the bulb-like Alan Blinder....

... in the Washpost the other day:

"An independent monetary policy, designed and executed by the Federal Reserve, is one of the great and enduring achievements of the Progressive Era. It has enabled the long time-horizons of technocrats to triumph over the short-term perspectives of politicians, bringing us low inflation over the decades. Because of this, and because technocratic monetary policy seems to be more skillful than political monetary policy, the Fed's independence has been admired and imitated by country after country."

Morty Zuckerman is a Midas pig of no mean accomplishment, and in info-mart circles -- unlike, say Pinch Sulzberger -- his acquired media majesty rode on funds earned -- or "earned" -- by his own self. Obviously the guy knows his way up and around pretty damn good.

So let's pay attention here when he wades in on the issue of "reforming our domestic financial institutions". Take instinctive populist topic A: bank size.

"The too-big-to-fail firms -- lie at the heart of the current crisis"

No? Then let us strive with integrity and honor to gradually reduce them prudently and lawfully by measured steps taken one at a time with all deliberate speed till the major American credit dispensing firms are down to a safe publically manageable set of dimensions -- right?

No again, sez Dr Z:

"Bear in mind that size, for all the crisis it helped to bring, has also greatly benefited the U.S. economy, enabling our big financial firms to compete against others in Europe and Asia."

Let Dr Z's kooler head prevail: "systemically important banks" just oughta pay Uncle for their privileges:

"If they benefit from explicit or implicit protection from the government, they should not be able to ride free on the backs of taxpayers"

Don't spring for this persiflage, I beg you. These are the words of a big-time legitimized thief. Don't imagine he's prepared to endorse some class-neutral, whole-people-preferable answer to the mudsill helots' cry of "call me Huey".

Take a careful squint at this modest proposal of his:

"Risk of failure should be reduced in one of two ways: by increasing capital requirements or by providing the option for the banks to be smaller or less systemically important. This can be effected either by narrowing what businesses they can be in or by making them less interconnected. In the worst-case scenario, the final backstop has to be bankruptcy or dissolution. A new resolution mechanism will have to unwind these too-big-to-fail institutions through a series of well-ordered procedures that do not imperil the whole economy."

A very complex set of statutes, interlarded with discretionary regulator controls, settings, and options: looks like reform correction and prohibition, but it's really more like rehabilitaion and rejuvenation.

Zuckie is after all a member in good standing of the Friends of Uncle Hegemonic's Invisible Empire, so he dearly wants to keep The Big Fuck, LLC, goin' strong.

"The Federal Reserve should remain at the center of these new regulatory efforts. The Fed may be less popular today on Capitol Hill, but there is no other institution — certainly not Congress itself — that has the sophisticated understanding and detailed knowledge to monitor the financial health of the banking firms and that possesses the relative degree of independence from political pressures that the Fed has exhibited over many years.

The Federal Reserve may have fumbled a bit in the evolution of a bubble economy. But once the crisis hit, it was the Federal Reserve, under Ben Bernanke, whose innovative, imaginative response to the crisis literally saved the financial world. Bernanke's Fed found new ways to pump liquidity into the credit markets that were on the verge of a total freeze-up.

This could only have happened because of the Fed's political independence, experience in and understanding of the financial world, and wideranging authority. No one could respond better than the Fed if the next crisis is anywhere near as severe as the last one.

Should Congress undermine the Fed's monetary policy function, we would face a worldwide collapse of confidence in the dollar that would inevitably lead to higher interest rates.

Congress is always playing the blame game, but it would be incredibly irresponsible at this point to undermine the Fed and its capacity to handle the new financial world that we will all be living in."

This is an old, old story, but jeez, has it ever got legs.

Shown above, center, at some dreary bloggers' convention last year, is Eric Boehlert.

(Bloggers, by the way, shouldn't have conventions. In fact I'm afraid most of us aren't fit to be seen in public, as this photo sadly demonstrates. Blox et praeterea nihil, that should be our motto.)

Boehlert, who is at least the least schlubby of the three apparently and understandably narcoleptic thrift-shop pundits above, is the proprietor of a Democratic Party fansite called "media matters". The site is mostly about how angry Eric Boehlert gets when he watches Fox News -- which he seems to spend a lot of his time doing.

Now to my way of thinking, watching Fox News would be tedious enough in all conscience; but reading about Eric Boehlert watching Fox News is surely an alchemically sublimated quintessence of tedium.

Fortunately, we at SMBIVA have correspondents whose sense of duty is sterner than mine, and whose reading habits are less self-indulgent. One such correspondent passed along the following fume-o-rama from Boehlert:

Glenn Beck to use 9/11 anniversary to stage another Obama-hating rally

From Politico:

Beck’s 9.12 Project is co-sponsoring a march on Washington on Sept. 11, 2010 to voice unhappiness with the agenda of President Obama....

The idea of trying to politicize the 9/11 anniversary in such a naked way is shocking. But of course nothing actually shocks us any more about Beck's tasteless, Obama-hating campaign.... [I]f Beck's followers really follow through with their plan and use the hollowed anniversary of 9/11 and turn the tragic terrorist attacks of 2001 into a day for hurling hateful attacks against the President of the United States, will there be no outcry?

Eric Boehlert 'hollows' 9/11 some more. I wonder if he slipped up a bit here and actually told the truth. With all the faux reverence for this event, I thought it was completely hollowed out already.

The Nation is fulminating against the filibuster:

Filibustering the Public

This is not what democracy looks like. When Americans vote, by overwhelming majorities, to place control of the executive and legislative branches in the hands of a party that has promised fundamental change, they are supposed to get that change. They are not supposed to watch as a handful of self-interested and special-interested senators prevent progress by exploiting the arcane rules of the less representative of our two legislative chambers--rules requiring that not a majority but a supermajority be attained in order even to discuss necessary reforms, and that a similar supermajority be in place to thwart a filibuster.

Fight for the Filibuster

A vote to end debate on the nomination of extreme conservative Priscilla Owen to the 5th US Circuit Court of Appeals is scheduled for Tuesday, May 24--the first strike in the so-called "nuclear option" to eliminate the use of the filibuster in judicial nominations. Now is the time to tell your senators that you oppose eliminating the filibuster.

The Top 10 filibuster falsehoods

With Senate debate on two of President Bush's most controversial judicial nominees beginning May 18, the heated rhetoric over the so-called "nuclear option" to ban Senate filibusters on judicial nominations has reached its boiling point. The rules of the Senate thus far remain intact, but filibuster opponents have pulled all rhetorical stops, advancing numerous falsehoods and distortions, and, as Media Matters for America documents below, the media have too often perpetuated that misinformation by unskeptically, and sometimes even deliberately, repeating it.

A few days ago I observed -- rather optimistically as it turns out -- that Obie had set things up for himself so that he could split the difference between sane and crazy on Afghanistan.

Never have I been more pleased to be mistaken. In fact, as we all now know, Obie has come roundly down on the side of crazy. General McChraqhpot asked for 40,000 new troops, and Obie is going to send 35,000 -- which will increase by 50% the count of hapless American soldier-boy and soldier-girl boots on the ground in that unfortunate land.

Apparently he's going to announce this bit of Kennedyesque "vigah" in a speech at West Point. Icing on the cake.

I happened to be talking, the other day, with an old friend of mine who, though normally a highly intelligent and worldly-wise person, somehow got utterly bowled over by Obamania -- wept on election night, went to the inauguration and befriended strangers, the whole gamut. She still won't admit to any faintest shred of disillusionment.

Unkindly enough, I couldn't resist razzing her about the upcoming surge in Afghanistan. Her response was that McCain and Palin "would have killed a lot more people."

In fact, it's hard to see how. We only have so many soldier boys and girls, after all, and they're pretty much stretched to the limit -- though the New Depression has apparently been a shot in the arm for the recruiting officers.

I guess McCain/Palin could have actually nuked the place -- it's theoretically possible -- though if bedbug-crazies like Dick Nixon and George W Bush never got quite that crazy, there seems to be little basis for believing that Jowl-Man or Moose-Girl would or could have broken their records. But of course anything is possible.

Believing that the possible is certain might be taken as a working definition for one kind, at least, of religious faith. (Some possibilities, naturally, are more certain than others.)

Everybody's religion, of course, always looks weird to everybody else, as a rather wise rabbi of my acquaintance once observed: "We've got the dead chicken and the penis-trimming, you've got the Trinity and the ritual cannibalism."

Still, it has to be said that venerating Moses or Jesus or Muhammad or Buddha is by any rational standard a lot less crazy than reposing any hope in... a Chicago Democrat.

At every stop on my mini-book-tour... someone asks a variation on the question of what’s gone wrong with Obama. Usually it’s asked in a tone of bewilderment verging on panic, as if the aircraft’s engines were shutting down one after another at thirty-five thousand feet. I don’t have a pithy answer because I don’t think there’s a simple explanation, and, what’s more, I don’t completely accept the premise. But if the President is looking less commanding than he did ten months ago, these might be a few of the reasons:

And he proceeds to hazard a few guesses.

I usually get called a vulgar Marxist for what I'm about to write. It's a harsh characterization, even or even especially because there's some truth to it, but could the disillusionment be rooted in things President Obama has actually done? Not his failure to deliver magic job-creating ponies, eco-sensitive unicorns, peace on earth with good will towards all except the banksters, but in the very real, very harmful and often lethal things he's done? Is there something depressingly and inescapably factual about those things?!