Doug Carmichael reflections

Obama's embrace of "shovel-ready" infrastructure, for example, left America with an economy based on shovels while China's long-term strategy has given that country an economy based on 21st-century Maglev trains. Now that the resort to mega-deficits has run its course, Obama is on the verge of abandoning the poor and middle class, by agreeing with the plutocrats in Congress to cut spending on Medicaid, Medicare, Social Security, and discretionary civilian spending, while protecting the military and the low tax rates on the rich (if not lowering those top tax rates further according to the secret machinations of the Gang of Six, now endorsed by the president!)

Who runs America today? The rich and the multinational corporations. Who runs the White House? David Plouffe, whose job it is to make sure that ever word, every action of the president is calculated for electoral gain rather than the country's needs. Who runs the Congress, on both sides of the aisle? The lobbyists, who win in every negotiation. And who loses? The American people, who have said repeatedly that they want a budget that sharply cuts the military, ends the wars, raises taxes on the rich, protects the poor and the middle class, and invests in America's future not just in Obama's speeches but in fact.

America needs a third-party movement to break the hammerlock of the financial elites. Until that happens, the political class and the media conglomerates will continue to spew lies, American militarism will continue to destabilize a growing swath of the world, and the country will continue its economic decline.

This is some real movement in opinion. My view is that a third party would split between those who want jobs and equity for the middle class and the rest of us, and those who want something more progressive dealing with climate and quality of life.

We can only hope that the politicians huddled in Washington and Brussels succeed in averting these threats. But here’s the thing: Even if we manage to avoid immediate catastrophe, the deals being struck on both sides of the Atlantic are almost guaranteed to make the broader economic slump worse. ...

The disappearance of unemployment from elite policy discourse and its replacement by deficit panic has been truly remarkable..., the conversations in Washington and Brussels are all about spending cuts (and maybe tax increases, I mean revisions). That’s obviously true about the various proposals being floated to resolve the debt-ceiling crisis here. But it’s equally true in Europe. ...

more krugman.

ebt and Forgetfulness, by Paul Krugman: I keep seeing comments along the lines of “Keynesianism doesn’t work, because liberals keep running deficits even when times are good, and never pay debt down.”

Guys, how about looking at recent history (pdf)?

Between 1993 and 2001, federal debt held by the public fell from 49.2 percent of GDP to 32.5 percent of GDP. What stopped the paydown of debt wasn’t liberal big spending; it was demands from conservatives that the surplus be used to cut taxes. George Bush said that a surplus means that the government is collecting too much money; Alan Greenspan warned that we were paying off our debt too fast.

Oh, and I was very much against those tax cuts, arguing that we should pay down the debt to prepare for future needs. As a reward, I now get accused of inconsistency, for saying that deficits were bad under Bush but good now.

Anyway, get your history straight before making claims about who’s fiscally responsible.

it is important to get history correct f we are to understand the interaction between theory and fact.

Historical Patterns, Okun's Law, and the Great Recession

Arin Dube shows that estimates of Okun's law are inconsistent with the assertion that most of the unemployment problem is structural rather than cyclical:

Historical Patterns, Okun's Law, and the Great Recession, by Arin Dube: After reading Paul Krugman's post today, I decided to follow up by actually estimating out-of-sample unemployment rate change forecasts during the Great Recession based on a pre-2007 Okun's law relationship (i.e., a regression of change in the unemployment rate on percentage change in real GDP).

This anchors the previous post.

This is the real issue. and politics is being used to keep the results where they are. But the good of the country as a just society – and a productive one – requires that the tide reverse and reverse the narrowing into a broadening of wealth holding and income possibilities. big task. But it must be done.

Some think this. Alternative views:

1. elites always win so nothing new.
2. finance is key to the economy so we need to allow it its prerogatives.

Where is economics entering this discussion?

Powerful picture.

Bush Tax Cuts, Wars Major Drivers of Projected Government Debt

The CBPP looks at the source of the public debt (previous charts have examined the source of deficits, i.e. the deficit or surplus in a given year, this looks at the debt which is the accumulation of all past deficits and surpluses). As this notes, "simply letting the Bush tax cuts expire on schedule ... would stabilize the debt-to-GDP ratio for the next decade." We are on the verge of trading tax cuts for the wealthy and spending on wars for large cuts to social programs (the budget hole the recession caused is helping to fuel the calls for austerity). Maybe that's what we want, maybe not (and likely not if the polls are correct), but we ought to at least be more aware than we seem to be that this is the trade we are making:

Is the picture getting clearer? Yes. Any line of action? No.

If the expected price tag for Philips' latest LED light bulb is any indication, a brighter tomorrow won't come cheap. The "75W replacement," known as the EnudraLED A21, apparently reduces energy by 80 percent, lasts 25 times longer than its conventional counterpart, and is expected to cost between $40 and $45. Given that's significantly less expensive than the outfit's 60W equivalent, but for us regular folks, that's not exactly a drop in the bucket. However, if you're picking up what Philips is laying down, the bulb -- which uses a mere 17 watts of electricity to beam 1,100 lumens -- could save the US 5,220 megawatts of electricity and $630,000,000 annually (if we all switch over tomorrow). That certainly sounds good, but somehow we doubt a $45 light bulb is going to be the incandescent killer. Full PR after the break.

The cost savings if all replaced tomorrow leaves out the environmental and energy cost of making the bulbs. Elementary and nearly ubiquitous logic. We must do better at logic and accounting.

so unfortunate, supposed to be an open air "cathedral" but there is no place to sit. This tech/art vs people. No way to get to a human respecting future.