Barro Begs to Stop the Beggars - Life in the "No Shame" Zone

Robert Barro - a polemicist looking for a place to pole dance - in writing about the virtues of eliminating unemployment insurance in this weeks Wall Street Journal, ignores inputs that really matter to real people.

He compares and contrasts other recessions and trends in, and after, their cycle.  Mostly he uses the 1983 recession as a bellweather.  He is cherry-picking his "facts" and using hasty conclusions in a rush to defend the indefensible.  Mainly the destruction of the middle-class, by the middle-class, in order to spite "those that ain't us." It amounts to bad politics and bad policy. 

Some things he ignores:


The whole of recession history dating back to Post WW-II.  This period was aided by Depression Era economic policies and regulations. The use of modernized economic instruments and banking reform created a 70 year period of financial stability that was innovative, risk managed and empowering for economic development when conditions were trending towards expansion.  In short - it was successful.

This post war stability can be easily measured in the counting of financial crises in the whole, real economy (until 2008). Let's try it - start counting - none!  

 Then Bush-o-nomics - BAMM!!

Those effective measures (regulations) and balances (deficit to revenue ratio's to GDP) were stripped out of government policy in the late Clinton and early Bush years. A fantasy "efficiency" model was allowed to undermine and DESTROY $7 Trillion in real estate equity (the backbone of middle-class wealth). and other "radical economic behavior" like unregulated derivatives trading, predatory lending in banking, tax policies; like allowing hedge fund managers to withhold fair payment of taxes, and lots of nonfeasance on the part of regulators.  This radical shift was a death march to upheaval and wealth destruction.

 In short - the regulation-free zone has been tried and it is a huge failure.

That failure can be seen and measured everyday in the form of unemployment. The slow growth is not an outcome of government policies alone. In fact, the Obama model, it can be argued, allows too much private behavior with public money. Obama looks to the private sector to remedy the growth rate. There is no huge institutional jobs program(s) involved with this current stimulus. It is directed at private sector job creation and very little toward municipal support.

The recession of 1983 - as bad or worse than this one - asserted the role of the central banking system as the multiplier of "crowding out" and "crowding in" the private sector, the government and the money supply. It was closer to a planned recession - because the fed refused to change the monetary policy to combat unemployment. It was a blood-letting and did a fair bit of damage to working class and emerging middle-class employment. It was, and is, different than this recession.

Prior recessions had the hedge of expanded credit backed by real estate equity to capitalize new spending and create capital. That prospect has largely been stripped away by the false (not as yet illegal) securitization of high risk lending.

The credit crunch and the new banking activities let banks use capital somewhere else now that they are largely free to cross over to less lending and more investment (risky) behavior.

Blaming the unemployed - even in Barro's case - is the last refuge of a failed New Classical (Barro's-like) Economic pretender!!  This Randian hybrid of supply-side, psuedo-economics has failed in process and in substance across the spectrum of development.  Civil, economic, social, and community institutions are all suffering from the cascade of failure that grips our institutional framework.  We are adrift without a certainty of trust in the integrity of our institutions and social contract.  That is the waste that is left behind - not weak-willed losers looking for easy street as Barro seems to suggest, 

Get off it so we can get on it - and resolve the unresolvable.  Mainly,  how to stop the impoverishment of millions in the richest place on earth.

Obama Headfakes Left - Shoots Right

President Obama's right-wing agenda is lost on almost all Americans, and clearly lost in the froth-inducing, myth making of the right-wing. The outrage-of-the-day "reporting" from the right-wing message machine constantly accuses the President of high crimes and misdemeanors.

As recently as yesterday - Thuggery, "Shaking down BP" - Fraud in stimulus spending, Facism / Socialism (often in the same complaint - they are VERY different phenomena), Race Hatred toward whites, Planning the Enslavement of Christians in future FEMA camps, Raising Taxes (after lowering taxes across the board in both the stimulus bill, home buyer tax credits AND small business health care provisions). The fact that Obama has gone against the left in almost every legislative outcome is unreported, under-reported or bypassed with a
"Yeah, but he's a Keynian Muslim . . . " type fallacy.

In fact, the left has a lot more to complain about than Rush, Glenn and Sister Sarah. A few of the glaring right-leaning outcomes; the industry control of health care delivery after a generation of outrageous profit taking by insurance executives (literally death-panels sucking blood money), affirming interest tax deduction on luxury properties for high bracket (rich) Americans, defense spending INCREASES in the face of known - open waste and corruption in the defense department, and lately - the retreat on CEO compensation provisions in the financial reform legislation which is in 11th hour conference committee. Corporations and hyper-wealthy Americans have nothing to fear from Obama - yet their minions squeal at his leadership and inherent "Leftist Agenda."

The financial reform piece is especially illuminating for tracking this administration's transition to corporate friendly outcomes -

"It was not part of our original financial reform proposals, and we have not taken a position explicitly. We have heard from and understand the various concerns on this critical corporate governance issue from multiple stakeholders including business, investors, labor and others. We are confident that the House and Senate conferees will come to a resolution and deliver a consensus view," said a White House spokesperson.

See the head fake - a few carefully chosen words and the left is in the dust. Nice shooting Mr.President. Not part of the original proposal, so we don't HAVE to support it.

One outrageous example of CEO pay that clearly hurts the American bottom line, from "CTWatchdog.com -

"Attorney General Richard Blumenthal today 4/29/2010) expressed outrage over reports that United Healthcare paid its CEO $102 million in compensation last year and called on the state Department of Insurance to consider executive pay in future company rate cases." End of excerpt.

This, after a 13% rate increase in premiums for United Healtcare policy holders was approved.

The right should be pretty comfortable with Obama's help in maintaining the corporate center and profit taking. Me thinks, they protest too loudly.

When Left is Right and Right is Wrong

THE LEFT NEEDS THE RIGHT TO DO A GOOD JOB vetting Supreme Court nominee Elena Kagan. Unfortunately, it will require more than smear and queer tactics, which is always the first club out of the bag with this Republican opposition. If they were serious about the underpinnings of Kagen they would be willing to ask questions that don't have answers already. They will prove that they aren't and use rehearsed worry about her fitness.

There is a need to know more - a lot more about Kagan.

Her nomination to replace a pillar of the court's stability and good order is a HUGE institutional question.

Any creep to the right is not just a lean or a nod - it could produce a cascade of judicial activism from the court, which will change basic citizen / corporate / state relationships for a generation. If that happens - it will more likely produce less citizenship and more corporate latitude.

The "Freedoms" that the right holds dear are already slipping away under this regime on the court.

The use of "eminent domain" to condemn private property and pass it along to PRIVATE developers for the "common good" has been upheld by THIS court - with Sonya Sotomyer agreeing with some of the decision. STRIKE ONE. The deeming of citizen rights to corporations to express 1st Amendment rights with unlimited spending for political speech (contributions) upheld by THIS court, STRIKE TWO. The halting of the recount of Florida vote tallies and awarding the Presidency to George Bush is at least unamerican. STRIKE THREE.

These are the least democratic times in our short history - aided by a belligerent minority that only wants what it wants despite an expressed (elected) preference by a majority. It is a serious turn that is occurring - it's too bad there isn't a better opposition than the current Republican crap carriers to ask the questions!!!

Oil Industry Just Doesn't Know the New Math!!!

Like so many crucial, stubborn American resource problems - access to capital, energy management, pollution control, consumer debt - the issue with energy starts with the math.

With less than 2% of the world's oil reserves and 20% of the world's energy consumption - there is no way to drill away our dependence on foreign oil. The 1.58% of the world’s reserves are not all safely available ( some hazardous, with likely pollution events ) using current technology. US oil is getting harder to harvest.

That problem is supposed to be resolved by the free-market principle of production efficiency and competition for efficiency in markets. It hasn't been what the energy market has been doing. Research and Development for safety technologies within the oil industry have stalled because of non-regulation and a wink from industry insiders who've been given oversight roles. Drilling safety, blowout prevention, containment and cleanup technologies have not been substantially improved in the 30 years since the last Gulf catastrophe in '79.

In short - the government regulation has been taken over by the oil profit insiders and not made to work at solving production / pollution problems for more than 30 years. Time to catch up!!!

The suppliers have no incentive to be safer when they are not in the safety business - that is the business of the government on behalf of the common good. So the shock and dismay about how BP is behaving is wasted on the math problems that surround this and other oil industry problems.

The government role, as proven in recent reports about the Minerals and Management Service, has been to not intervene, and to promote profit first - safety last behavior. This is the free-market - non-regulation paradise the oil industry concocted with the help of Dick Cheney. Multiple generations will have him to thank.

There is a lot more math surrounding this problem - oil consumption management / conservation, the cost of introducing new fuels to the industrial, transportation and private markets, the regulation of standards in efficiency AND incentives to transition to alternatives. The proper way to create efficiency through a blend of taxes on fuels (more than gasoline, which is less than 50% of US consumption of oil) and use of multiple fuels together in a safe and efficient manner.

The Shorthand is - the drilling side is NOT a problem solver - and by extension, neither is onshore drilling in sensitive areas. When non-pollution technologies are required, sought and developed by the oil industry - maybe then, but for now they don't have the infrastructure to drill safely.

BP, according to Foodconsumer Publications, " . . . is no stranger to environmental crime. Over the past two decades, BP subsidiaries have been convicted of three crimes in Alaska and Texas, including two felonies. BP also holds the dubious honor of receiving the stiffest fine in history for work safety violations."

So looking to this industry to work out this American problem is not going to help come close to meeting our long term energy needs.