It is interesting how out of touch with economic reality Tea Party politicians can be. Today both Paul Krugman and Glenn Hubbard and Tim Kane cite Milton Friedman in illustrating how Tea Party people distort reality. Most of my economic training was in learning what Milton Friedman placed into economic literature.
Here is what Milton Friedman believed in: Monetary policy must fight inflation. Monetary policy is essential to use in turning around or preventing depressions. Fixed exchange rates prevent monetary policy from doing the 1st two things, so floating exchange rates are highly preferable. Balanced budgets are best over an economic cycle and you need revenues to pay the expenses.
Now Rand Paul said he would nominate Milton Friedman to replace Bernanke because he would promote a strong currency. Milton Friedman believed fixed exchange rates were the worst thing a country could do and that a weak currency is essential when you are in recession. I think it would be a great idea if Milton Friedman were Fed Chairman but to do so, he would have to be alive and not be over 100 years old if alive. How does such ignorance get elected to the US Senate? and Rand Paul is a Dr.!
It is unbelievable what ignorance is doing to this country.
Paul Krugman on how the Tea Party distorts Milton Friedman
Glenn Hubbard & Tim Kane on how to balance a budget
Monday, August 12, 2013
Sunday, August 11, 2013
The Edge of Chaos
10 to 15 years ago I read a book by that name. It was a travel recollection of the cultural dynamics along the edge of Islam and Judeo-Chrisitanity from West Africa through the Middle East into Southern Russia and onto SouthEast Asia through India. This was Pre-9/11 so there was little emphasis on Jihadism, but you could see the dangers to any western traveler passing through any of these areas. The Rule of Law was weak, economic development stifled and chaos could break out at any time almost anywhere.
I started thinking about this when I read todays article about the chaos in the Sinai peninsula. I didn't think anybody lived there, it is a desert, but a little research reveals that there are probably a million people there. And the only economic activity is basically smuggling goods into Gaza.
The overriding characteristic of places where Jihadism can flourish is lack of economic opportunity. Thomas Friedman (proper use of i & e, unlike the hot dog candidate who dwells in the chaos of Twitter) today writes about the linkage between droughts in Kansas and the rise in food prices in the Middle East that spawned the Arab Spring. The Middle East has so little economic opportunity for many reasons, but the bottom line is autocratic governments can only afford to bribe the people for so long. It the process of ending this is not well managed, chaos can erupt.
Desperate people do desperate things. People with nothing are attracted to Jihadism because it gives them purpose. I am all for the Drones killing terrorists, but it needs to be complemented with economic development to separate the hard core from the willing and enabling who participate and provide shelter only out of desperation.
This is what the US Congress should be having hearings about. Only economic growth will reduce the risk of chaos and Jihadism. Economic growth in desperate places is not a simple thing and what the US can do is only going to work in a gradual way. Improving health care is one way the US can help.
Encouraging participatory politics must accompany which is why I have mixed feeling about the Egyptian Army's removal of Moorsi. Yes, but wasn't there another way? The US Congress does not help with any of this as their Tea Party types cannot get past their hatred of Obama and their desire to prevent him from having any legacy. We don't have a coherent government at present and serious thought about complex issues cannot be done. Most US politicians do not have a global view and they need to have one. The chaotic part of the world has a love/hate attitude toward the US and we can foster either attitude depending on our policies. It is in our national interest to reduce jihadism and we cannot do it with Drones or troops alone. We must find a way to foster economic development and reduce the incentive of 10 to 17 year olds to become Jihadists.
Saturday, August 10, 2013
Peggy Noonan on the American Dream
This doesn't happen very often. Ms. Noonan, a Wall Street Journal Op-Ed columnist, can sometimes be very reasonable, but more often touts the GOP anti-Obama (at a personal level) line.
Today, however, she reviewed a book about the Obama campaign and what they mastered in the last campaign: Speaking to the middle class. In doing so, she also revealed a most unfortunate bi-product of the 30 year focus on tax cuts (which I supported back in 1982 because tax rates were too high).
I quote her now.
"The groups revealed that the American dream meant less to younger workers than older ones. Here is a departure from the book: There is pervasive confusion about what the American dream is. We seem to redefined it to mean the acquisition of material things - a car, a house and a pool. That was not the meaning of the American dream a few generations ago. The definition then was that in this wonderful place called America, you can start out from nothing and become anything. It was aspirational. The limits of class and background wouldn't and couldn't keep you from becoming a person worthy of respect, even renown. If you wanted to turn that into houses and a pool, fine. But you didn't have to. You could have a modest job like a teacher and be the most respected woman in town."
Amen. I remember Miss Metz (my 11th grade English Teacher) and Mrs Armondi (my 6th grade teacher.) Modest houses, quite lives dedicated to teaching, living within their means, but looked up to by students and parents alike in a town of 5,000 where everybody knew them. And it wasn't just teachers. Engineers, factory workers, Dentists, salesman, pilots, entrepreneurs all lived on my street.
That was the town. Aspiration for respect in what they did to contribute to their job and the community. Living within their means and hoping their children would live life with more security than they had. Now security is surely financial because the business cycle created unemployment then, and we still have unemployment today. That is the way our economy functions and supports everything in an efficient manner.
But there is a focus today in the media and the political debate that seems to focus on worthiness based on your financial success alone. Money in politics. Newspaper articles about financial success and failure. That may be how the American dream became redefined, but it is not positive.
Everyone cannot be rich, but that does not mean people should not be able to be rewarded for effort and become rich. People must aspire to things and be respected for whatever they choose to do (so long as it is not criminal or unethical).
I grew up with the old American dream and wonder if we can ever convert it back. I think we can because I don't think it has changed for the working class, where such respect is most needed, based on an interaction I had this week with a "Man with a Van" delivery service. I think the issue lies in the attitudes of college students, who no doubt were the target of the survey Ms. Noonan references, and within the media and the tone of the political discourse. That is not simple to address, but it is a worthy goal. The American Dream should be aspirational, not materialistic.
Today, however, she reviewed a book about the Obama campaign and what they mastered in the last campaign: Speaking to the middle class. In doing so, she also revealed a most unfortunate bi-product of the 30 year focus on tax cuts (which I supported back in 1982 because tax rates were too high).
I quote her now.
"The groups revealed that the American dream meant less to younger workers than older ones. Here is a departure from the book: There is pervasive confusion about what the American dream is. We seem to redefined it to mean the acquisition of material things - a car, a house and a pool. That was not the meaning of the American dream a few generations ago. The definition then was that in this wonderful place called America, you can start out from nothing and become anything. It was aspirational. The limits of class and background wouldn't and couldn't keep you from becoming a person worthy of respect, even renown. If you wanted to turn that into houses and a pool, fine. But you didn't have to. You could have a modest job like a teacher and be the most respected woman in town."
Amen. I remember Miss Metz (my 11th grade English Teacher) and Mrs Armondi (my 6th grade teacher.) Modest houses, quite lives dedicated to teaching, living within their means, but looked up to by students and parents alike in a town of 5,000 where everybody knew them. And it wasn't just teachers. Engineers, factory workers, Dentists, salesman, pilots, entrepreneurs all lived on my street.
That was the town. Aspiration for respect in what they did to contribute to their job and the community. Living within their means and hoping their children would live life with more security than they had. Now security is surely financial because the business cycle created unemployment then, and we still have unemployment today. That is the way our economy functions and supports everything in an efficient manner.
But there is a focus today in the media and the political debate that seems to focus on worthiness based on your financial success alone. Money in politics. Newspaper articles about financial success and failure. That may be how the American dream became redefined, but it is not positive.
Everyone cannot be rich, but that does not mean people should not be able to be rewarded for effort and become rich. People must aspire to things and be respected for whatever they choose to do (so long as it is not criminal or unethical).
I grew up with the old American dream and wonder if we can ever convert it back. I think we can because I don't think it has changed for the working class, where such respect is most needed, based on an interaction I had this week with a "Man with a Van" delivery service. I think the issue lies in the attitudes of college students, who no doubt were the target of the survey Ms. Noonan references, and within the media and the tone of the political discourse. That is not simple to address, but it is a worthy goal. The American Dream should be aspirational, not materialistic.
Friday, August 9, 2013
Why Congress Needs to Lead and Why they need Compromises
I know that I being a broken record but someone needs to comment on these inconsistencies in the political record.
Rural politicians of both parties are against the Post Office cutting services in an intelligent way to try and find a profit. Many of these politicians are members of the Tea Party who will cut spending on everything else and want to privatize everything, but won't allow the Post Office to reduce services that do not pay for themselves.
Rereading a past post that new members of my audience have been reviewing, I was reminded that the voters do not want less spent on their services, just someone else's services. That is why the House GOP could not pass a transportation bill with their desire level of spending; the Tea Party Representatives did not want to be on record for reducing spending on stuff in their own district. So they pass general spending cuts and force the Bureaucracy to choose what to cut. That is in violation of the Constitution that the Tea Party wants to being forth as the deciding factor in everything. Spending bills must originate in the House and must authorize specific spending. The Tea Party Representatives are only selectively upholding the Constitution.
But this is not surprising. It reflects the electorate that voted these guys in while believing the following (which I posted in February:
From the Pew Research Center
19% of the population wants only spending cuts.
76% want spending cuts and revenue increases with more spending cuts than revenue increases.
OK, a balanced approach until you get to the details, which is why both parties need to be honest with the voters.
49% want to increase spending on the world's needy. 48% decrease
60% want to increase spending on the State Department. 34% decrease
65% want to increase spending on the Unemployed. 32% decrease
73%...........increase.........on the military. 24% decrease
71% ............................on aid to the needy. 24% decrease
72%...........increase...............health care. 22% decrease
76% ....................................environment. 22% decrease
74%.....................................energy. 21% decrease
77%..................................science research. 20% decrease
76%..................................agriculture. 20% decrease
77%...................................anti-terrorism. 19% decrease
81%....................................infrastructure. 17% decrease
82%....................................medicare. 15% decrease
82%................................anti-crime. 14% decrease
83%................................food&drug. 14% decrease
84%.................................FEMA. 12% decrease
89%..................................education. 10% decrease
87%.................................social security. 10% decrease
91%..........increase..........Veteran's Benefits. 6% decrease
We will not get the population behind specific spending cuts until Congress gets both Parties involved (compromise) and both Parties work to educate the voters that spending must be cut while raising some revenues (2/3 & 1/3 or some variant). The country needs leadership and that requires both parties to lead and work together (compromise to the middle).
I am a broken record.
Rural politicians of both parties are against the Post Office cutting services in an intelligent way to try and find a profit. Many of these politicians are members of the Tea Party who will cut spending on everything else and want to privatize everything, but won't allow the Post Office to reduce services that do not pay for themselves.
Rereading a past post that new members of my audience have been reviewing, I was reminded that the voters do not want less spent on their services, just someone else's services. That is why the House GOP could not pass a transportation bill with their desire level of spending; the Tea Party Representatives did not want to be on record for reducing spending on stuff in their own district. So they pass general spending cuts and force the Bureaucracy to choose what to cut. That is in violation of the Constitution that the Tea Party wants to being forth as the deciding factor in everything. Spending bills must originate in the House and must authorize specific spending. The Tea Party Representatives are only selectively upholding the Constitution.
But this is not surprising. It reflects the electorate that voted these guys in while believing the following (which I posted in February:
From the Pew Research Center
19% of the population wants only spending cuts.
76% want spending cuts and revenue increases with more spending cuts than revenue increases.
OK, a balanced approach until you get to the details, which is why both parties need to be honest with the voters.
49% want to increase spending on the world's needy. 48% decrease
60% want to increase spending on the State Department. 34% decrease
65% want to increase spending on the Unemployed. 32% decrease
73%...........increase.........on the military. 24% decrease
71% ............................on aid to the needy. 24% decrease
72%...........increase...............health care. 22% decrease
76% ....................................environment. 22% decrease
74%.....................................energy. 21% decrease
77%..................................science research. 20% decrease
76%..................................agriculture. 20% decrease
77%...................................anti-terrorism. 19% decrease
81%....................................infrastructure. 17% decrease
82%....................................medicare. 15% decrease
82%................................anti-crime. 14% decrease
83%................................food&drug. 14% decrease
84%.................................FEMA. 12% decrease
89%..................................education. 10% decrease
87%.................................social security. 10% decrease
91%..........increase..........Veteran's Benefits. 6% decrease
We will not get the population behind specific spending cuts until Congress gets both Parties involved (compromise) and both Parties work to educate the voters that spending must be cut while raising some revenues (2/3 & 1/3 or some variant). The country needs leadership and that requires both parties to lead and work together (compromise to the middle).
I am a broken record.
Thursday, August 8, 2013
Pollution & the Tea Party
I know the headline is a bit broad as the Tea Party does not really rant about Pollution, but they seem to want to disband the EPA.
I have been working in New Jersey and riding the train through the Meadowland marshes to get here. I love blue crabs and I wondered if they were thriving in the waters of the Meadowlands. So I googled it.
The crabs are thriving but they are poisonous to eat. They have dioxin and mercury in them. The waters of the Meadowlands, which are tidal, are incredibly unhealthy for humans. They are this way because industry dumped bad stuff into the waters running through Newark and other industrial cities located along these waters.
Why did they do this? Because they didn't want to incur the cost of doing something safe (and perhaps did not understand how bad the stuff was at the time). Preventing pollution costs money while causing pollution costs nothing. The polluter has a cost advantage over the good citizen who is responsible to their community. So the polluter gets more business and pollutes more, while the non-polluter gets less business and either starts polluting or goes out of business. The community ends up with inedible natural resources that we need to feed people.
Fortunately, the EPA and the Clean Water Act have been around for since 1972, so Richard Nixon must have signed the bill. The U.S. is a relatively clean place now, but only because the EPA exists and works to find polluters. Dismantling the EPA or defunding them, as the House GOP has proposed, is not good for society as the record of history shows.
I don't understand the Tea Party. Why would you defund the EPA? Don't they like clean air and water? Do the understand how environmental economics works? I don't think so and that is why their power in politics today is so frightening to me.
I have been working in New Jersey and riding the train through the Meadowland marshes to get here. I love blue crabs and I wondered if they were thriving in the waters of the Meadowlands. So I googled it.
The crabs are thriving but they are poisonous to eat. They have dioxin and mercury in them. The waters of the Meadowlands, which are tidal, are incredibly unhealthy for humans. They are this way because industry dumped bad stuff into the waters running through Newark and other industrial cities located along these waters.
Why did they do this? Because they didn't want to incur the cost of doing something safe (and perhaps did not understand how bad the stuff was at the time). Preventing pollution costs money while causing pollution costs nothing. The polluter has a cost advantage over the good citizen who is responsible to their community. So the polluter gets more business and pollutes more, while the non-polluter gets less business and either starts polluting or goes out of business. The community ends up with inedible natural resources that we need to feed people.
Fortunately, the EPA and the Clean Water Act have been around for since 1972, so Richard Nixon must have signed the bill. The U.S. is a relatively clean place now, but only because the EPA exists and works to find polluters. Dismantling the EPA or defunding them, as the House GOP has proposed, is not good for society as the record of history shows.
I don't understand the Tea Party. Why would you defund the EPA? Don't they like clean air and water? Do the understand how environmental economics works? I don't think so and that is why their power in politics today is so frightening to me.
Sunday, August 4, 2013
Why the GOP Should Discuss What Government They Believe In?
Nilihism is not a useful view of government, but that seems to be what the Republican Party advocates. They want to defund things that are necessary to keep the population safe. The paper today has some key examples of what the government can do to help each and every citizen live a life in more comfort.
1st, an example of how the current form of health insurance has created the out-of-control cost structure. ObamaCare is one way to try and improve the situation, but the GOP has never proposed what they would replace it with if they were to repeal it. You cannot cover pre-existing conditions at an affordable price without having healthy people buy health insurance. The math does not work. Meanwhile, the insured system is paying thousands of $ more for stuff in the U.S. then a medical tourist must pay abroad. We have to break the tie between employment and the ability to buy health insurance at a group rate.
Man Goes to Belgium for new hip and save $
Meanwhile, there is no better argument for the EPA than the air quality in China. If we didn't have the EPA, do you think business would have cleaned up its act? There is no profit in doing so unless all are required to do so, because one guy will not do it in order to have a cost advantage, and then none of them will do it. China has no EPA and the quality of life is horrible from the pollution.
Life in a Toxic Country
The structure in our country is that the Federal Government funds a portion of our infrastructure spending. It doesn't have to, but any transition to another funding structure must be planned for so maintenance and routine replacement occurs in an efficient manner. The House Republicans didn't want to get specific about anything other than reducing expenses so they defeated a GOP bill for funding Transportation. Let the Administration figure out sequestration. The House GOP wants things to be Constitutional but they forget that spending bills are supposed to start in the House of Representatives. They are not fulfilling their Constitutional obligations.
One of Many articles explaining this
And last but certainly not least. I know some in the GOP want to do away with the NSA and the ATF. One of the most interesting articles is how the NSA is limiting access to the gathered data that other agencies would like to use. Meanwhile, the ATF figured out a possible link between gun running and terrorism. Seems like we need to fund the NSA, the ATF, the FBI and the CIA without subjecting them to sequestration. But that would require a budget and negotiation with the Democrats. That would require compromise. That would require meeting in the middle and rejecting nihilism.
Data gathering has purpose and civil liberties are protected
This Summarizes Everything
Meanwhile, I have refrained from commenting about Anthony Weiner because what can you say about a man whose name violates proper spelling rules (i before e, except after c). Another reason for not commenting is that anyone who has a name like Weiner should be petrified of how any impropriety would be used by public commentators (aka night time comedy). Unfortunately, we know that Mr. Weiner is a fitness buff and proud to show it off. I don't think he has the intellect to be an administrator because good managers know how to stay within themselves and bring out the best in others by leading through a good example. I am not sure who is dumber, Anthony Weiner or A-Rod. May we be done with both of them soon!
1st, an example of how the current form of health insurance has created the out-of-control cost structure. ObamaCare is one way to try and improve the situation, but the GOP has never proposed what they would replace it with if they were to repeal it. You cannot cover pre-existing conditions at an affordable price without having healthy people buy health insurance. The math does not work. Meanwhile, the insured system is paying thousands of $ more for stuff in the U.S. then a medical tourist must pay abroad. We have to break the tie between employment and the ability to buy health insurance at a group rate.
Man Goes to Belgium for new hip and save $
Meanwhile, there is no better argument for the EPA than the air quality in China. If we didn't have the EPA, do you think business would have cleaned up its act? There is no profit in doing so unless all are required to do so, because one guy will not do it in order to have a cost advantage, and then none of them will do it. China has no EPA and the quality of life is horrible from the pollution.
Life in a Toxic Country
The structure in our country is that the Federal Government funds a portion of our infrastructure spending. It doesn't have to, but any transition to another funding structure must be planned for so maintenance and routine replacement occurs in an efficient manner. The House Republicans didn't want to get specific about anything other than reducing expenses so they defeated a GOP bill for funding Transportation. Let the Administration figure out sequestration. The House GOP wants things to be Constitutional but they forget that spending bills are supposed to start in the House of Representatives. They are not fulfilling their Constitutional obligations.
One of Many articles explaining this
And last but certainly not least. I know some in the GOP want to do away with the NSA and the ATF. One of the most interesting articles is how the NSA is limiting access to the gathered data that other agencies would like to use. Meanwhile, the ATF figured out a possible link between gun running and terrorism. Seems like we need to fund the NSA, the ATF, the FBI and the CIA without subjecting them to sequestration. But that would require a budget and negotiation with the Democrats. That would require compromise. That would require meeting in the middle and rejecting nihilism.
Data gathering has purpose and civil liberties are protected
This Summarizes Everything
Meanwhile, I have refrained from commenting about Anthony Weiner because what can you say about a man whose name violates proper spelling rules (i before e, except after c). Another reason for not commenting is that anyone who has a name like Weiner should be petrified of how any impropriety would be used by public commentators (aka night time comedy). Unfortunately, we know that Mr. Weiner is a fitness buff and proud to show it off. I don't think he has the intellect to be an administrator because good managers know how to stay within themselves and bring out the best in others by leading through a good example. I am not sure who is dumber, Anthony Weiner or A-Rod. May we be done with both of them soon!
Friday, August 2, 2013
Conservative Middle in Despair
I am not sure what to make of this or where it will take us as we hurdle towards another threat of government shut down.
Today, Charles Krauthammer wrote that not funding the laws of the land is a sure fire way to p*ss off the public voters in the middle and lose elections.
David Brooks pointed out that conservatism was at its peak (1980-1984) in vote gathering nationally when the neocons were in charge and noted that traditional neocons believe in a government that works and provides a social safety net, while encouraging individual responsibility. He concluded his column with the statement: " The solution is not to go back to 1980 (or any other time). It is to imagine what kind of values Americans should have and what kind of limited, but energetic government can reinforce those values." I will note that is when I was a member of the Republican Party when the GOP advocated such a policy mix.
And 4 Republican Administrators of the EPA: William Ruckelshaus, Lee Thomas, William Reilly, and Christine Todd Whitman pointed out that it is a proper role of government to protect and maintain a livable environment for its citizens. They believe that the US Government must do something to start to make progress on climate change and urge the GOP legislators to take up the debate with the Democrats. That would be nice, but I do believe that message is DOA for the forseeable future.
The GOP's 12 year war with "RINO's" is neither good for the party nor good for America.
Today, Charles Krauthammer wrote that not funding the laws of the land is a sure fire way to p*ss off the public voters in the middle and lose elections.
David Brooks pointed out that conservatism was at its peak (1980-1984) in vote gathering nationally when the neocons were in charge and noted that traditional neocons believe in a government that works and provides a social safety net, while encouraging individual responsibility. He concluded his column with the statement: " The solution is not to go back to 1980 (or any other time). It is to imagine what kind of values Americans should have and what kind of limited, but energetic government can reinforce those values." I will note that is when I was a member of the Republican Party when the GOP advocated such a policy mix.
And 4 Republican Administrators of the EPA: William Ruckelshaus, Lee Thomas, William Reilly, and Christine Todd Whitman pointed out that it is a proper role of government to protect and maintain a livable environment for its citizens. They believe that the US Government must do something to start to make progress on climate change and urge the GOP legislators to take up the debate with the Democrats. That would be nice, but I do believe that message is DOA for the forseeable future.
The GOP's 12 year war with "RINO's" is neither good for the party nor good for America.
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