http://www.theatlantic.com/doc/200905/imf-advice
From the IMF
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Tuesday, March 31, 2009
Sunday, March 29, 2009
Playing with fire?
I guess these rich guys don't get it. http://obsidianwings.blogs.com/obsidian_wings/2009/03/populist-anger-made-simple.html
Thursday, March 26, 2009
"A deeply broken nation"
Greenwald. He's not succinct, but he generally gets around to making very damning points:
The key dynamic underlying all of this -- the linchpin that allows it all to happen and, historically, the primary hallmark of a deeply broken nation -- is the total elimination of the rule of law for the ruling class, with a simultaneous intensification of the law as a weapon against the citizenry. Does anyone expect there to be any widespread prosecutions for those most responsible for the looting, systematic fraud and grand-scale theft of the last decade? Identically, as more and more evidence emerges of the vast war crimes of the prior administration, the failure to enforce the law and our legal obligations against our nation's most powerful becomes even more transparent. As law professor Jonathan Turley put it on Rachel Maddow's show Monday night:
The president refuses to allow the investigation of war crimes. And we just found out the international Red Cross, also the definitive body on torture, found that this was a real torture program. And yet, the president is having a debate with the guy [Cheney] over whether it was good policy. . . .
It is just as bad to prevent the investigation and prosecution of a war crime as its commission because you become part of it. There‘s no question about a war crime here. . . .
You know, some people say, what do you need, a film? We actually had films of us torturing people. So this would be the shortest investigation in history. You have Bush officials who have said that we tortured people. We have interrogators who have said we tortured people. The Red Cross has said it. A host of international organizations have said it. . . .
He should be appointing a special prosecutor. There is no question about that. This is the most well-defined and publicly known crime I have seen in my lifetime. There is no debate about it. There is no ambiguity. It is well known.
Contrast these desperate efforts to avoid any criminal accountability at all for the country's most powerful lawbreakers with the merciless application of criminal law to ordinary Americans. As Brown University Glenn Loury recently wrote:
Simply put, we have become a nation of jailers and, arguably, racist jailers at that. The past four decades have witnessed a truly historic expansion, and transformation, of penal institutions in the United States — at every level of government, and in all regions of the country. We have, by any measure, become a vastly more punitive society. Measured in constant dollars and taking account of all levels of government, spending on corrections and law enforcement in the United States has more than quadrupled over the last quarter century. As a result, the American prison system has grown into a leviathan unmatched in human history.
The key dynamic underlying all of this -- the linchpin that allows it all to happen and, historically, the primary hallmark of a deeply broken nation -- is the total elimination of the rule of law for the ruling class, with a simultaneous intensification of the law as a weapon against the citizenry. Does anyone expect there to be any widespread prosecutions for those most responsible for the looting, systematic fraud and grand-scale theft of the last decade? Identically, as more and more evidence emerges of the vast war crimes of the prior administration, the failure to enforce the law and our legal obligations against our nation's most powerful becomes even more transparent. As law professor Jonathan Turley put it on Rachel Maddow's show Monday night:
The president refuses to allow the investigation of war crimes. And we just found out the international Red Cross, also the definitive body on torture, found that this was a real torture program. And yet, the president is having a debate with the guy [Cheney] over whether it was good policy. . . .
It is just as bad to prevent the investigation and prosecution of a war crime as its commission because you become part of it. There‘s no question about a war crime here. . . .
You know, some people say, what do you need, a film? We actually had films of us torturing people. So this would be the shortest investigation in history. You have Bush officials who have said that we tortured people. We have interrogators who have said we tortured people. The Red Cross has said it. A host of international organizations have said it. . . .
He should be appointing a special prosecutor. There is no question about that. This is the most well-defined and publicly known crime I have seen in my lifetime. There is no debate about it. There is no ambiguity. It is well known.
Contrast these desperate efforts to avoid any criminal accountability at all for the country's most powerful lawbreakers with the merciless application of criminal law to ordinary Americans. As Brown University Glenn Loury recently wrote:
Simply put, we have become a nation of jailers and, arguably, racist jailers at that. The past four decades have witnessed a truly historic expansion, and transformation, of penal institutions in the United States — at every level of government, and in all regions of the country. We have, by any measure, become a vastly more punitive society. Measured in constant dollars and taking account of all levels of government, spending on corrections and law enforcement in the United States has more than quadrupled over the last quarter century. As a result, the American prison system has grown into a leviathan unmatched in human history.
Wednesday, March 25, 2009
It was knowable
Daily Kos has a good post running down how the factors leading to today's financial woes were predicted.
http://www.dailykos.com/storyonly/2009/3/25/713036/-Nobody-Could-Have-Known
It's like the cries that "No one could have predicted the levies would fail" in New Orleans. Of course the Weather Channel was doing the first episode of its then-new series "It Could Happen Tomorrow" about New Orleans and its vulnerability to hurricanes. It was the second most likely disaster (after a new SF earthquake -- how ready are we for THAT).
This "nobody could have predicted it" excuse is really lame.
http://www.dailykos.com/storyonly/2009/3/25/713036/-Nobody-Could-Have-Known
It's like the cries that "No one could have predicted the levies would fail" in New Orleans. Of course the Weather Channel was doing the first episode of its then-new series "It Could Happen Tomorrow" about New Orleans and its vulnerability to hurricanes. It was the second most likely disaster (after a new SF earthquake -- how ready are we for THAT).
This "nobody could have predicted it" excuse is really lame.
Monday, March 23, 2009
Class warfare?
The rising economic inequality of the last few decades has been raising alarms in some quarters for quite some time, but a number of factors disguised it until recently.
Perhaps one of the most important was the entry of women into the workforce, which allowed most middle-class families to maintain a middle-class standard of living even though it took more hours of labor to do so. Women derived some benefits in self-actualization and independence from this trend, so it was not entirely unwelcome. But there was a natural limit on how far this could go.
A second factor disguising the inequality was the rise of Wal-Mart and other discounters and the ability to keep costs down by inports from China and other low-labor cost countries. It became possible to maintain the essentials of life at a lower cost.
A third factor was the rise in home values and the stock market rise, both of which made it seem as if people were building wealth (in home equity and 401k balances) even as they tapped out their savings and credit limits to maintain the middle class lifestyle they aspired to.
Not the fact that all this was built on sand and could not be sustained was recognized by some. There have been no shortages of Cassandras. But it was politically expedient to dismiss them and the rich and powerful could marshal a lot of resources to marginalize those voices.
But the market will, as it always will, eventually rule. And despite the fact that the rich and powerful pay lip service to the "Market" they don't really want the market to freely operate. What, after all, is the use of riches and power if it can't protect you from bad things?
Unfortunately one of the major parties lost sight of its responsibility to all the citizens and one of the major intellectual movements was hijacked by powerful interests to the point that timeless conservative principles such as rule of law and limited government were completely perverted to the point where "conservatives" would seriously argue for unlimited executive powers including the ability to disappear people, engage in torture and simply ignore Congress when the executive decided it was proper, and all of this without judicial review.
Well, it may very well be that the worm has turned.
There are people screaming that AIG's contracts are sacrosanct and that the government has no power to void them. Well, folks, if the government has the power to arrest you without charges, torture you to madness and detain you as long as it wants without trial, what chance do your little pieces of paper stand?
Fools.
Perhaps one of the most important was the entry of women into the workforce, which allowed most middle-class families to maintain a middle-class standard of living even though it took more hours of labor to do so. Women derived some benefits in self-actualization and independence from this trend, so it was not entirely unwelcome. But there was a natural limit on how far this could go.
A second factor disguising the inequality was the rise of Wal-Mart and other discounters and the ability to keep costs down by inports from China and other low-labor cost countries. It became possible to maintain the essentials of life at a lower cost.
A third factor was the rise in home values and the stock market rise, both of which made it seem as if people were building wealth (in home equity and 401k balances) even as they tapped out their savings and credit limits to maintain the middle class lifestyle they aspired to.
Not the fact that all this was built on sand and could not be sustained was recognized by some. There have been no shortages of Cassandras. But it was politically expedient to dismiss them and the rich and powerful could marshal a lot of resources to marginalize those voices.
But the market will, as it always will, eventually rule. And despite the fact that the rich and powerful pay lip service to the "Market" they don't really want the market to freely operate. What, after all, is the use of riches and power if it can't protect you from bad things?
Unfortunately one of the major parties lost sight of its responsibility to all the citizens and one of the major intellectual movements was hijacked by powerful interests to the point that timeless conservative principles such as rule of law and limited government were completely perverted to the point where "conservatives" would seriously argue for unlimited executive powers including the ability to disappear people, engage in torture and simply ignore Congress when the executive decided it was proper, and all of this without judicial review.
Well, it may very well be that the worm has turned.
There are people screaming that AIG's contracts are sacrosanct and that the government has no power to void them. Well, folks, if the government has the power to arrest you without charges, torture you to madness and detain you as long as it wants without trial, what chance do your little pieces of paper stand?
Fools.
Wednesday, March 18, 2009
Monday, March 16, 2009
AIG
There are undoubtedly all sorts of legal and technical reasons why this AIG bonus situation is the way it is.
But there's also a political reality at work here, and if the government is going to retain the ability to act it's going to have to find a way to rein this crap in. Pitchforks and torches don't make good public policy but pushing the peasants' noses into the manure pile is a good way to provoke them.
As many have pointed out, blue collar workers' contracts have been far from sacrosanct in this crisis, I see no reason why white collar workers' contracts should be -- especially when the white collar workers in question (at AIG) played a direct role in causing the crisis, something that can't be said about folks like the autoworkers.
But there's also a political reality at work here, and if the government is going to retain the ability to act it's going to have to find a way to rein this crap in. Pitchforks and torches don't make good public policy but pushing the peasants' noses into the manure pile is a good way to provoke them.
As many have pointed out, blue collar workers' contracts have been far from sacrosanct in this crisis, I see no reason why white collar workers' contracts should be -- especially when the white collar workers in question (at AIG) played a direct role in causing the crisis, something that can't be said about folks like the autoworkers.
Thursday, March 12, 2009
Saturday, February 7, 2009
It's not going to be enough
Krugman on the plan:
The short answer: to appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts.
Of course, read the whole thing: http://krugman.blogs.nytimes.com/2009/02/07/what-the-centrists-have-wrought/
In contrast to Krugman, I think Obama will be able to go back. As a matter of fact, I think he was always going to need to go back. For one thing, the problem is way too big for one measure to address it all. For another, adjustments will need to be made. And third, I think the timescale we're working with will be so long that multiple dips will be needed. The 2001 recession took almost four years to work through. This one is only a year in, and seems to be much more serious, so the only real question is whether we are on our way out of it by the end of Obama's first term.
I don't think Obama is necessarily in trouble even then, so long as he is seen as having been trying to do something and if he manages to have even some local successes. FDR won re-election even though he hadn't seen a recovery (or even made it worse, if you believe GOP 'history'). Obama may very well win again even if the economy is still in the crapper because the Republicans (like their 1930-era forbears) can only win if they have some new ideas to offer!
If there's anything the Republicans have shown a dearth of, it's new ideas.
Until they think of some, the country will stick with Democrats, regardless of their success or the lack thereof.
The short answer: to appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts.
Of course, read the whole thing: http://krugman.blogs.nytimes.com/2009/02/07/what-the-centrists-have-wrought/
In contrast to Krugman, I think Obama will be able to go back. As a matter of fact, I think he was always going to need to go back. For one thing, the problem is way too big for one measure to address it all. For another, adjustments will need to be made. And third, I think the timescale we're working with will be so long that multiple dips will be needed. The 2001 recession took almost four years to work through. This one is only a year in, and seems to be much more serious, so the only real question is whether we are on our way out of it by the end of Obama's first term.
I don't think Obama is necessarily in trouble even then, so long as he is seen as having been trying to do something and if he manages to have even some local successes. FDR won re-election even though he hadn't seen a recovery (or even made it worse, if you believe GOP 'history'). Obama may very well win again even if the economy is still in the crapper because the Republicans (like their 1930-era forbears) can only win if they have some new ideas to offer!
If there's anything the Republicans have shown a dearth of, it's new ideas.
Until they think of some, the country will stick with Democrats, regardless of their success or the lack thereof.
Not very reassuring, Bob
Robert Reich speculates about the next shoe about to drop:
By the way, get ready for some really horrifying bailout numbers. Goldman Sachs -- not one to exaggerate the overall problem -- recently estimated the total value of troubled U.S. bank assets to be $5.7 trillion. Hence, do not be surprised if the next stage of the bank bailout dwarfs the cost of the stimulus package. My guess is that's reason the administration wants the stimulus bill approved before it fully unveils the price tag of the next bank bailout.
By the way, get ready for some really horrifying bailout numbers. Goldman Sachs -- not one to exaggerate the overall problem -- recently estimated the total value of troubled U.S. bank assets to be $5.7 trillion. Hence, do not be surprised if the next stage of the bank bailout dwarfs the cost of the stimulus package. My guess is that's reason the administration wants the stimulus bill approved before it fully unveils the price tag of the next bank bailout.
Gut feeling -- it won't be enough
I think the stimulus package, regardless of what exact form it takes, is not a bad thing. It's at the least, politically necessary that the government appear to be doing something.
But at the end of the day I don't think it will prove to be enough.
I don't have any deep economic data to back this up. I don't have a crystal ball or a degree in economics, although I don't think there's any evidence either one would be useful in making a forecast.
No, I base my opinion on the simple observation that at every single stage of this unfolding crisis the "experts" have severely underestimated the nature, scope and duration of the problem.
Looking at Congress members, particularly the GOP, yammering about tax cuts and spending (which they suddenly hate), shows that they really don't get it.
The speed and scale of the crisis has stunned the general public, so the coming reaction has been delayed, but it will come. Dick Cheney, of all people, warned the Republicans about a "Hoover moment." They aren't listening.
The class warfare that the wealthy have waged for the last couple of decades (note the disconnect between earning power and productivity) is very dangerous. Historical precedent suggest that it could end rather badly for the let-them-eat-cake crowd. While U.S. political structures are probably robust enough to prevent the worst kinds of reaction, that's not true elsewhere and I'd be especially watchful about how things play out in more volatile places such as China, India, Brazil, Russia and, closer to home, Mexico.
But at the end of the day I don't think it will prove to be enough.
I don't have any deep economic data to back this up. I don't have a crystal ball or a degree in economics, although I don't think there's any evidence either one would be useful in making a forecast.
No, I base my opinion on the simple observation that at every single stage of this unfolding crisis the "experts" have severely underestimated the nature, scope and duration of the problem.
Looking at Congress members, particularly the GOP, yammering about tax cuts and spending (which they suddenly hate), shows that they really don't get it.
The speed and scale of the crisis has stunned the general public, so the coming reaction has been delayed, but it will come. Dick Cheney, of all people, warned the Republicans about a "Hoover moment." They aren't listening.
The class warfare that the wealthy have waged for the last couple of decades (note the disconnect between earning power and productivity) is very dangerous. Historical precedent suggest that it could end rather badly for the let-them-eat-cake crowd. While U.S. political structures are probably robust enough to prevent the worst kinds of reaction, that's not true elsewhere and I'd be especially watchful about how things play out in more volatile places such as China, India, Brazil, Russia and, closer to home, Mexico.
Monday, February 2, 2009
Can't say I like the looks of this
Some unsettling charts from the blog Seeking Alpha
http://seekingalpha.com/article/115525-the-scariest-chart-ever?source=article_sb_popular
Bank borrowing from the Fed to Dec 2007:
http://seekingalpha.com/article/115525-the-scariest-chart-ever?source=article_sb_popular
Bank borrowing from the Fed to Dec 2007:
And in 2008!!!!
(Note that this is the same chart, but the scale has changed -- check out the left side of the chart)
Saturday, January 17, 2009
Circuit City RIP
The liquidation of Circuit City is not a surprise. The recession will probably claim several more high-profile retailers in the coming weeks.
But some point to the company's decision to lay-off its most experienced sales staff a few years ago in a misguided effort to save money. It did save money, of course, but it lost a lot more. The remaining employees were demoralized and the replacement employees knew that they were, in the eyes of the company, completely disposable. Customer, who go to a store like that expecting to get help from knowledgeable staff on technical products they don't know much about, found they had little reason to go there any more. If the sales staff can't help you, you might as well go to Wal-Mart and at least get the stuff cheap.
Hopefully once the economy recovers corporate brains will rmember this episode next time they get the urge to "save" money.
But some point to the company's decision to lay-off its most experienced sales staff a few years ago in a misguided effort to save money. It did save money, of course, but it lost a lot more. The remaining employees were demoralized and the replacement employees knew that they were, in the eyes of the company, completely disposable. Customer, who go to a store like that expecting to get help from knowledgeable staff on technical products they don't know much about, found they had little reason to go there any more. If the sales staff can't help you, you might as well go to Wal-Mart and at least get the stuff cheap.
Hopefully once the economy recovers corporate brains will rmember this episode next time they get the urge to "save" money.
Tuesday, November 25, 2008
Riots in Iceland!
Something I never thought I'd see:
http://www.france24.com/en/20081123-protests-geir-haarde-resignation-financial-crisis-iceland
But maybe not the last place.
The last time we had a depression some very unsavory movements resulted. I don't think human nature has changed.
http://www.france24.com/en/20081123-protests-geir-haarde-resignation-financial-crisis-iceland
But maybe not the last place.
The last time we had a depression some very unsavory movements resulted. I don't think human nature has changed.
Friday, November 7, 2008
Obama economic meeting
Fascinating and impressive list of participants.
Obama seems to have a kanck for getting talented people want to work for him.
If he can keep the egos in check enough for these sorts of folks to work together then we may see some very good things come out of the next four years.
Obama seems to have a kanck for getting talented people want to work for him.
If he can keep the egos in check enough for these sorts of folks to work together then we may see some very good things come out of the next four years.
Thursday, October 16, 2008
Joe the Plumber or Joe the Plant
So Daily Kos is all a-twitter over the holes in "Joe the Plumber's" story.
Details here: http://www.dailykos.com/
Evidently he's had tax issues.
Evidently he's actually a Republican.
It's even alleged he's got at least a Bill Ayers'-style connection to the Keating folks.
It's also noted that the McCain campaign had his phone number, although they swear they didn't give him "media training."
For the record, it sounds suspiciously like another inept GOP dirty trick.
Someday they will rediscover the value of actual values (you know, the kind you live by, not just talk about). Once (and if) they do, they will start to recover. The Democrats will always be vulnerable on that score.
Meanwhile Drudge has still failed to make note of the Palin abuse-of-power-probe,
Meanwhile PBS is balking at airing a documentary that shows how the Bush torture regime came about.
Oh, and meanwhile the economy is going to absolutely to hell.
Details here: http://www.dailykos.com/
Evidently he's had tax issues.
Evidently he's actually a Republican.
It's even alleged he's got at least a Bill Ayers'-style connection to the Keating folks.
It's also noted that the McCain campaign had his phone number, although they swear they didn't give him "media training."
For the record, it sounds suspiciously like another inept GOP dirty trick.
Someday they will rediscover the value of actual values (you know, the kind you live by, not just talk about). Once (and if) they do, they will start to recover. The Democrats will always be vulnerable on that score.
Meanwhile Drudge has still failed to make note of the Palin abuse-of-power-probe,
Meanwhile PBS is balking at airing a documentary that shows how the Bush torture regime came about.
Oh, and meanwhile the economy is going to absolutely to hell.
Monday, October 6, 2008
So the market tanked for most of the day
Only to recover much of the lost ground this afternoon.
I'd find little solace in that recovery, however, because there's no indication that things are improving. Indeed. there's every indication that things are about to get substantially worse.
We didn't get into the mess overnight and I see no reason to think that anything useful will happen until sometime next spring or summer after the new administration takes office.
IF this is just a regular downturn, albeit a little worse than most, we'll know it by then. There will be many indicators that things are starting to get better. Typical recession last 9 months to a year and next summer will be outside that time frame.
If. on the other hand, things are getting worse they'll most likely be really bad by then and the country will be ready for some drastic action.
I'd find little solace in that recovery, however, because there's no indication that things are improving. Indeed. there's every indication that things are about to get substantially worse.
We didn't get into the mess overnight and I see no reason to think that anything useful will happen until sometime next spring or summer after the new administration takes office.
IF this is just a regular downturn, albeit a little worse than most, we'll know it by then. There will be many indicators that things are starting to get better. Typical recession last 9 months to a year and next summer will be outside that time frame.
If. on the other hand, things are getting worse they'll most likely be really bad by then and the country will be ready for some drastic action.
Tuesday, September 30, 2008
The Vote
I'll admit I was a bit surprised that the "bailout" bill failed, but not shocked. I've felt that the chances that something would be done this time were slimmer than the conventional wisdom suggested. Not based on any analysis, of course, just on a gut feeling that they were going to the well one too many times.
The entire unfolding of this crisis has caught most of the mainstream figures by surprise, although there have been no shortage of voices in the wilderness warming that trouble was ahead. Checkout http://housingpanic.blogspot.com/ for example.
While the exact course of things has been hard to predict, there has been one constant, and that is whatever the government says and does will be too little and too late. This "bailout" seems to be just another chapter in that story.
I don't have the expertise to judge the plan on its details, but if past performance is any guide, time will prove that this plan will be inadequate.
It's certainly possible that there is nothing the government can do that would actually stop the meltdown, of course. It may be that some future Bernanke-like scholar will determine that the last chance for effective intervention passed many years ago.
The entire unfolding of this crisis has caught most of the mainstream figures by surprise, although there have been no shortage of voices in the wilderness warming that trouble was ahead. Checkout http://housingpanic.blogspot.com/ for example.
While the exact course of things has been hard to predict, there has been one constant, and that is whatever the government says and does will be too little and too late. This "bailout" seems to be just another chapter in that story.
I don't have the expertise to judge the plan on its details, but if past performance is any guide, time will prove that this plan will be inadequate.
It's certainly possible that there is nothing the government can do that would actually stop the meltdown, of course. It may be that some future Bernanke-like scholar will determine that the last chance for effective intervention passed many years ago.
Thursday, September 25, 2008
Can McCain escape the blame?
I'm sure it's not so simple as this, and there's plenty of blame to go around, (and I'm not even sure that McCain and the Republicans may not be right) but it sure looks like everything was all sort of set for The Big Compromise to be struck and everyone look like did something good (at least until the next shoe drops -- BTW WaMu bit the dust) and then McCain rides into town and screws it all up.
If the market tanks tomorrow because the deal they expected has gone belly up, how does McCain escape the blame?
If the market tanks tomorrow because the deal they expected has gone belly up, how does McCain escape the blame?
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