Friday, July 3, 2009

July 3 - This & That

Josh Marshall: Takes Your Breath Away | TPM
Melinda Henneberger has a nice blow by blow run-down of the various, overlapping, often contradictory and mainly just painful explanations from WaPo executives about their abortive pay-for-play/pay-for-schmooze operation discussed this morning by Politico.
  • Attaturk: Yes, quite a media critic

    As the Washington Post flailed about yesterday trying to find a way to blame Nico Pitney for their trying to sell access to Villagers and Villager Enthusiasts, one thing was very curious indeed. As Jamison Foster asks at Media Matters, where was the WaPo's media critic on this?

    How was he scooped so badly by of all places,the Politico and Mike Allen aka beltway Eddie Haskell?

    Well, Howie was busy doing important stuff -- let the tweets speak for themselves:

    The ultimate white guy, who has certainly never written a column about white guys covering white guys really thought he had one awesome story. Howie, you're a lifetime member of the Ya Ya Wankerhood.

Very good news vis Steve Benen:
* Two years ago, polls in Pakistan showed a populace largely unconcerned with the Taliban and the activities of al Qaeda. Not anymore. Pakistanis "now consider terrorist groups a 'critical threat' to their country."
Also from Steve:
Andrew Sullivan ponders what Fox News and other Republican outlets would do if Obama treated the American flag the same way Sarah Palin did. It's not an unreasonable question.

Josh Marshall: Berserk

We have an update on this incident over the weekend in SD which was in equal parts bizarre, horrific and comic. A Sheriff's deputy got called to the home of two Democratic activists who were holding a fundraiser for congressional candidate Francine Busby. The complaint he was responding to was sd-deputy-702-dc.jpgwhat appears to have been a bogus noise complaint called in by a neighbor who simultaneously yelling anti-gay slurs from outside the event (a lesbian couple hosted the event).

So Deputy Marshall G. Abbott shows up at house and within a few moments he's literally going berserk, twisting the hosts' arms behind their back and throwing them to the floor and then pepper spraying multiple guests. (Reading the various accounts the whole thing sounds like some Saturday Night Live episode, though probably less so to the attendees who had pepper spray squirted into their eyes.) Apparently convinced he was in some sort of imminent danger from the group middle-aged, mainly female Democratic activists, Abbott proceeded to call in back up, which lead to eight more deputies, a helicopter and a canine unit being dispatched to the scene.

Now the Sheriff's Department is in lockdown, refusing to answer any questions while allegedly conducting their own internal investigation of the incident. But what jumps out to me is that the DA's Office in San Diego is still deciding whether or not to file charges against the two women Abbott arrested during his rampage.

Ezra Klein: In Case You Were Insufficiently Depressed About the Job Numbers


In April, a "mere" 322,000 people lost their jobs. That was part of the whole "bad news, good trend" thing that had everyone talking about green shoots. In May, economists predicted a pretty similar result: 350,000 lost jobs. They got it wrong. We lost 467,000 jobs in May. The unemployment rate rose to 9.5 percent. And that actually underplays the problems. It's always worth remembering that the unemployment rate is, at best, a partial indicator of people who are unhappily unemployed. Tim Fernholz explains:

Keep in mind that when we say 9.5 percent, we're talking about people who have lost their job and are looking for a new one. But when you factor in people who "currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past" "plus total employed part time for economic reasons," and you get a rate of 16.5 percent unemployment -- nearly one in five potential workers has lost significant wages and work in the current economic environment.

And, as Billy Mays would have said, that's not all! We've also got about 9 million workers who are part-time because they can't find full-time work. That's up from 5 million workers in June. On the bright side -- and yes, there is a bright side -- banker pay has rebounded to 2007 levels. As Kevin Drum says, "It's good to see that not everyone is suffering."
Graph credit: Calculated Risk.

Krugman: That ’30s Show

O.K., Thursday’s jobs report settles it. We’re going to need a bigger stimulus. But does the president know that?

Let’s do the math.

Since the recession began, the U.S. economy has lost 6 ½ million jobs — and as that grim employment report confirmed, it’s continuing to lose jobs at a rapid pace. Once you take into account the 100,000-plus new jobs that we need each month just to keep up with a growing population, we’re about 8 ½ million jobs in the hole.

And the deeper the hole gets, the harder it will be to dig ourselves out. The job figures weren’t the only bad news in Thursday’s report, which also showed wages stalling and possibly on the verge of outright decline. That’s a recipe for a descent into Japanese-style deflation, which is very difficult to reverse. Lost decade, anyone?

Wait — there’s more bad news: the fiscal crisis of the states. Unlike the federal government, states are required to run balanced budgets. And faced with a sharp drop in revenue, most states are preparing savage budget cuts, many of them at the expense of the most vulnerable. Aside from directly creating a great deal of misery, these cuts will depress the economy even further.

So what do we have to counter this scary prospect? We have the Obama stimulus plan, which aims to create 3 ½ million jobs by late next year. That’s much better than nothing, but it’s not remotely enough. And there doesn’t seem to be much else going on. Do you remember the administration’s plan to sharply reduce the rate of foreclosures, or its plan to get the banks lending again by taking toxic assets off their balance sheets? Neither do I.

All of this is depressingly familiar to anyone who has studied economic policy in the 1930s. Once again a Democratic president has pushed through job-creation policies that will mitigate the slump but aren’t aggressive enough to produce a full recovery. Once again much of the stimulus at the federal level is being undone by budget retrenchment at the state and local level.

So have we failed to learn from history, and are we, therefore, doomed to repeat it? Not necessarily — but it’s up to the president and his economic team to ensure that things are different this time. President Obama and his officials need to ramp up their efforts, starting with a plan to make the stimulus bigger.

Just to be clear, I’m well aware of how difficult it will be to get such a plan enacted.

There won’t be any cooperation from Republican leaders, who have settled on a strategy of total opposition, unconstrained by facts or logic. Indeed, these leaders responded to the latest job numbers by proclaiming the failure of the Obama economic plan. That’s ludicrous, of course. The administration warned from the beginning that it would be several quarters before the plan had any major positive effects. But that didn’t stop the chairman of the Republican Study Committee from issuing a statement demanding: “Where are the jobs?”

It’s also not clear whether the administration will get much help from Senate “centrists,” who partially eviscerated the original stimulus plan by demanding cuts in aid to state and local governments — aid that, as we’re now seeing, was desperately needed. I’d like to think that some of these centrists are feeling remorse, but if they are, I haven’t seen any evidence to that effect.

And as an economist, I’d add that many members of my profession are playing a distinctly unhelpful role.

It has been a rude shock to see so many economists with good reputations recycling old fallacies — like the claim that any rise in government spending automatically displaces an equal amount of private spending, even when there is mass unemployment — and lending their names to grossly exaggerated claims about the evils of short-run budget deficits. (Right now the risks associated with additional debt are much less than the risks associated with failing to give the economy adequate support.)

Also, as in the 1930s, the opponents of action are peddling scare stories about inflation even as deflation looms.

So getting another round of stimulus will be difficult. But it’s essential.

Obama administration economists understand the stakes. Indeed, just a few weeks ago, Christina Romer, the chairwoman of the Council of Economic Advisers, published an article on the “lessons of 1937” — the year that F.D.R. gave in to the deficit and inflation hawks, with disastrous consequences both for the economy and for his political agenda.

What I don’t know is whether the administration has faced up to the inadequacy of what it has done so far.

So here’s my message to the president: You need to get both your economic team and your political people working on additional stimulus, now. Because if you don’t, you’ll soon be facing your own personal 1937.

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