Saturday, June 9, 2012

The good and the bad

Despite reports to the contrary, China seems to have control of its economy. Inflation is at a two year low and they are experiencing a labor shortage indicating there is no slow down. The bad news, senior German officials appear to have no clue how economics actually works, or worse they have an ulterior motive for collapsing the EU. (at this point, I vote for stupidity)

Spain has formally asked the European Central Bank for a $100 billion bailout for its banks. Spain was running a sizable budget surplus before the Euro panic started, now they have 25% unemployment. Bankers make money on the way up, and on the way down. People who actually make things get screwed. We thought we fixed that in the 18th century with the Hamilton plan, but the right keeps re-writing history.

Wednesday, June 6, 2012

A billionaire can buy anything he wants

In exit polling done Tuesday during the Wisconsin recall, 18% of those who voted for the hard-right Republican Walker said they will vote for Obama in the Fall. How can this be? It seems $60 million in a relatively small state can really get your lies (I mean message) across. 

One of the most popular ads run by the Republicans pounded on the idea that it was wrong to recall a governor that hasn’t committed a crime. A bold ad, or a perhaps a Freudian slip as he’s likely to be indicted any day, especially  since 12 of his closest aids are already cooling their heels in jail. The premise of this ad was accepted by 25% of registered Democrats, Republicans simply don’t care if he’s committed a crime.  

His billionaire masters purchased him an image as a bold, brave Governor who took on the difficult issues and balanced a budget that was $3.5 billion in the hole. All without cutting any jobs, or raising taxes. He really inherited a $40 million surplus that he gave away to corporations on the first day. The rest was also a bunch of lies, jobs will be slashed and taxes will skyrocket. Billions in debt is being kicked down the road while paying interest. But he was able to sell it as day for night. Rural voters that really turned out for him are now convinced that the greedy teachers all make $75,000 a year. Only about a 250% exaggeration. Next winter their roads probably won't be plowed, normally a big problem in the Great White North, but global warming should take care of that, courtesy of the Koch Brothers.

Even people who should know better accepted this nonsense with 35% of union households voting for their own throats to be cut. In the next few weeks the disaster Walker has made will start to impact locally. He was only the third Governor in 230 years of the United States to face a re-call, he might be the fourth as well. Okay, jail is more likely. On that point, ironically the re-call gave him a huge gift. Not only was his indictment put off until this Friday (a well placed rumor), but he is now able to transfer millions of campaign money to his legal defense fund. He can also buy counsel for his already indicted co-conspirators making it harder to flip them to State’s evidence. The Democrats did pick up one recalled Senate seat to gain the majority, so Walker’s agenda will be pulled up short. Now he can blame them for the damage he has caused. 
The rightwing media has become obsessed with the “feud” between Obama and Clinton. They take no notice that Big Dog Clinton is been pulled up tight on his chain by Obama. The media said that yesterday in an interview on CNBC Clinton called for an extension of the Bush tax cuts for the rich, contrary to Obama policy. 

Here is the quote they base this on, try to find the words “tax cuts”, “I don't have any problem with extending all of it now, including the current spending level,” Clinton said in his interview with Bartiromo. “They're still pretty low, the government spending levels. But I think they look high because there's a recession. So the taxes look lower than they really would be if we had two and a half, three percent growth. And the spending is higher than it would be if we had two and a half, three percent growth because there are so many people getting food stamps, so many people getting unemployment, so many people are Medicaid.”  

If you actually read the whole thing, what he’s talking about is spending levels and doesn’t mention cutting taxes. A Clinton spokesman spelled it out as if there was any doubt, “…on extending the Bush tax cuts, as President Clinton has said many times before, he supported extending all of the cuts in 2010 as part of the budget agreement, but does not believe the tax cuts for the wealthiest Americans should be extended again.” 

We have the best “liberal” media that right-wing billionaire money can buy.

Tuesday, June 5, 2012

You can herd Donkeys, with a big enough stick

In an interview with PBS News Hour, Bill Clinton completely walked back his comments about Obama criticizing Bain being inappropriate. He said today, “[about making Bain an issue being wrong] Not necessarily. It depends on the facts of the case. That's what I tried to say in the CNN interview. The equity business can be good if you - I've got a friend who buys failing companies, and he tries to turn them around. And he's turned a bunch of them around, but not all of them. So sometimes he tried and failed. The effort was honorable. That's a good thing.”  - Yeah right, he said that guy was “Romney” in the CNN interview, but now you are to think he means some other (private equity pirate), but you notice that Slick Willy didn‘t actually say that.

Clinton also tore down Romney’s boast that as President, Romney would immediately declare China a “currency manipulator”, and get tough with them, unlike Obama. Clinton suggested this would collapse the world economy and that it would be far better to apply tariffs  on a case by case basis the way Obama has been doing it. He also laid out the stupidity of the Republican austerity plan, and the need for stimulus from the government in times like these. He did this in perfectly simple and sensible language. John Maynard Keynes and FDR are smiling down from heaven.

Why the sudden change of heart? Last week Clinton was telling reporters that as a “private citizen” he had the privilege of saying what ever he wants. Speculation was running wild that Clinton was deliberately sabotaging Obama as he had developed a real hatred for Obama during the campaign. This would be a believable scenario, since the things Clinton was saying a couple of days ago weren’t believable. They were just billionaire generated talking points.

One small problem popped up for citizen Clinton. He’s not a private citizen. As a condition of Hillary’s employment as Sec State, Bill had to sign a 50 page contract with Obama. This was done precisely because Clinton could be expected to pull this kind of crap when the opportunity arose. Bill apparently isn’t much of a lawyer if he didn’t read it. Obama must have sent some boys down from the Chicago campaign office to read it to him. Bill’s back on the team now. He’s quite good at communicating when he’s properly “motivated”.

Sunday, June 3, 2012


As the last of the Obama stimulus package peters out we find the economy beginning to stall. Less than half the size that it should have been, it's no surprise that it didn't work very well. Remember a third of what was spent went to tax cuts, and another big chunk went to the states to keep them in the black. The Republican response was to reject the money where they could, simultaneously cut jobs and spending. This plunged their red states right to the bottom. If we had another million people still teaching, fighting fires, pounding a beat, and inspecting bridges the economy would look a lot better. Add in a couple of million private sector jobs that these austerity cuts created in turn, and you can see the problem.

China finds itself currently in a another slump too. Their response is another stimulus package focused on affordable housing and energy efficient appliances. All to made in China of course. Romney's surrogates are touting Obama's failure to crack down on China's currency manipulation. They say Romney will do that the first day he's in the White House, they don't really say how. Obama could declare them a "currency manipulator" and I agree it was a mistake for him not to that when it took office, Bush could have at any point as well (this isn't new, but they'd like you to think so). Romney says that's what he'll do, he doesn't mention that doing so then requires tariffs to be imposed. When Obama slapped China with a 99% tariff on tires, 48% on steel pipe and now 41% on solar panels, Romney called that "protectionism". Romney doesn't want you notice that he's not telling you the truth.

Even if you could force China to allow its currency to float against the USD on the currency markets, without imposing tariffs, at this point it probably wouldn't help. Monetary policy is no substitute for trade policy, and no, switching to the gold standard wouldn't work. The one thing that has always worked throughout history is tariffs, and we can see over the past couple of decades what happens without them.