American Politics XII

[lokisnow]

with major 'assets' like housing still falling isn't deflation still a bigger worry?

[BloodRider]

No idea on the accuracy of this either, but it made me think of Scot. :)

http://www.tnr.com/politics/story.html?id=...ff-1c684f641a52

Inflation is a very real possibility. But one of the worst things we could do is react to it now, before things get turned around. So long as we react in time and appropriately, inflation should not be a worry.

We are pretty damn good at fixing that.

Besides, once everybody get switched out of ARMs, if the banks still are not lending then inflation will not have that much of an impact before the FED can ratchet down the controls.

[Annelise]

Inflation is a very real possibility. But one of the worst things we could do is react to it now, before things get turned around. So long as we react in time and appropriately, inflation should not be a worry.

We are pretty damn good at fixing that.

Besides, once everybody get switched out of ARMs, if the banks still are not lending then inflation will not have that much of an impact before the FED can ratchet down the controls.

So you disagreed with the article insomuch that you think we should stick to the traditional 20th century ways of diagnosing (for lack of better word) and controlling it?

[BloodRider]

So you disagreed with the article insomuch that you think we should stick to the traditional 20th century ways of diagnosing (for lack of better word) and controlling it?

Well, yes in that I honestly can't confirm their hypothesis based off their evidence (10-year t-bill rates). Not saying they are wrong, just more of a "I need more evidence" stance.

I think that the tools we have now (if applied judiciously) will get us through. I wholly expect that those tools will be modified as time goes on - we certainly do not have the same view of the FED as we did when Volker was in - even as we did when Greenspan was king. At that is for the best. But the article seems to be calling for a radical revamping of FED inflation policy - with not much theory on what the new policy should be so....

I DO agree that caution is the watchword of the day. Jumping at inflation's shadow can trash our recovery.

[Ser Scot A Ellison]

BR,

You are aware the Fed has had to purchase U.S. Long Term treasuries right? Doesn't that make it more difficult for the Fed to address inflation if it becomes a problem?

[CloudFlare]

with major 'assets' like housing still falling isn't deflation still a bigger worry?

We're going to have different inflation and deflation rates, depending on the product.

Things we want, such as TVs, fancy cars, McMansions, vacation travel, are all going to deflate.

Things we need, such as food, basic shelter, gas etc. are going to inflate.

It will be interesting to see how it all balances out. I suspect the official inflation numbers won't be that bad, but reality will be worse.

[Annelise]

Strangely enough, Stephen Colbert was also caught out trying to make friends with Sanford's staff and offering excuses to minimize his odd behavior.

Following this up:

http://www.politico.com/blogs/michaelcalderone/

:lol:

[Annelise]

The ex-US Treasury Secretary has admitted telling the Bank of America boss he might lose his job if he walked away from a merger from Merrill Lynch.

Hank Paulson warned the bank's chief executive Kenneth Lewis that the Federal Reserve could oust him and the board if the rescue did not proceed.

But Mr Paulson insisted that remarks he made were "appropriate".

[...]

As the crisis in the financial sector intensified, Bank of America subsequently needed $25bn in capital injections from the bail-out fund.

The House Oversight and Government Reform Committee is investigating claims that Mr Paulson and Mr Bernanke put pressure on Bank of America to close the deal, despite Merrill's financial difficulties.

The US Treasury and Fed have been accused of "putting a gun to the head" of BoA to absorb Merrill, one of the largest holders of toxic debt.

At the start of this year, Bank of America required a further $20bn.

http://news.bbc.co.uk/2/hi/business/8152858.stm

So.. can anyone comment whether or not the strong arming was ultimately more useful than harmful or not? Setting aside the government/private sector issue; I'm curious in a was/wasn't-the-right-move-to-bail-out-the-auto-industry way.

[BloodRider]

BR,

Oh wait. Thats me.... Yes?

You are aware the Fed has had to purchase U.S. Long Term treasuries right? Doesn't that make it more difficult for the Fed to address inflation if it becomes a problem?

Yup - once interest rates are at 0% they didn't have much of an option.

More boring economics here:

Long term rates are supposed to represent short term rates plus inflation plus risk. But that risk is a market risk, and so is inflation, meaning that in most cases (ie if the market is working) the effective return on a 10year T-bill is the same as a 1year T-bill. So the Fed cannot really control the slope of the yield curve, just move it down IF the banks start lending money again. And indeed, the purchase does seem to have dropped short term rates AND long term rates (ie the yield curve did shift down), as expected.

Econ explanation ended:

So all evidence is that the purchase did not increase inflation. But it was risky as they were relying on supply opening up (ie the banks loaning money) as well as demand. That is why they bought so much of the securitized mortgages at the same time, I think. And I think it went surprisingly well.

http://news.bbc.co.uk/2/hi/business/8152858.stm

So.. can anyone comment whether or not the strong arming was ultimately more useful than harmful or not? Setting aside the government/private sector issue; I'm curious in a was/wasn't-the-right-move-to-bail-out-the-auto-industry way.

That was sheer dumbassery full of nasty unintended consequences. Watch the Frontline special on it for more on why this was bad, bad policy.

I personally think its worst effect was to decrease the lending ability of a stable institution at a time when a credit crunch was the last thing we needed. I think it also had a horrible effect on the credit card market. BoA went out and arbitrarily increased the rates on all thier card holders so they could keep afloat. Again, at a very shitty time in this downturn.

[WarGalley]

For any single libertarians out there, I encourage you to find your future spouse through RonPaulSingles.com.

I love this part:

Roll Call newspaper reported on the Ron Paul love site in its print edition today, dubbing the congressman, who is an obstetrician and gynecologist, "Doctor of Love."

Paul's office declined to speak to Roll Call about the dating site, but he told the Sleuth he kind of likes the new nickname. "It's got a nice ring to it -- I'll bet my wife will like it better than 'Dr. No.' And, I've always been sympathetic to the slogan 'make love, not war.'"

:lmao:

[lokisnow]

I propose we take control of the language of the debate. We can't allow certain democrats to call themselves "Blue Dog" democrats, this is a strong name, it makes them and their consituents and the media feel good about these democrats, it conjures up images of bull dogs and helpfully, most everyone likes dogs. Its seriously a massive mistake to continue calling them this.

So my proposal is that we start calling them French Democrats because they are defeatest and appeasers ready to weakly kowtow to opposition at a moments notice. ;) And best of all, southerners would be especially PROUD of being connected to the French. :) That's why I chose to call them French Democrats, not to insult the French, but because it's the opposite of Blue Dog and would sting the politicians that refer to themselves as Blue Dog more than any other appellation.

http://www.washingtonpost.com/wp-dyn/conte...id=opinionsbox1

The paradox is that Obama's limited experience under Republican sway makes him more comfortable than many of his allies are with wielding the power that comes from large Democratic majorities.

...

But Obama must simultaneously convince Democrats that they are not living in the Republican congressional eras of 1995 or 2003 -- that if it's necessary, they have the strength on their own to win.

[Ser Scot A Ellison]

lockesnow,

You honestly think the "Blue Dog Democrats" will be re-elected if the huge government expansion continues and these legislators vote in favor of this continued expansion?

[Errant Bard]

So my proposal is that we start calling them French Democrats because they are defeatest and appeasers ready to weakly kowtow to opposition at a moments notice. ;)

We don't have democrats, just call them socialists, or french left, or whatever. And also, for the record, the appeasers around her are about anyone, but the right wing guys were the ones to surrender to Germany back in WW2, and the left the ones to carry the resistance and revolutions. :P

[lokisnow]

We don't have democrats, just call them socialists, or french left, or whatever. And also, for the record, the appeasers around her are about anyone, but the right wing guys were the ones to surrender to Germany back in WW2, and the left the ones to carry the resistance and revolutions. :P

Don't make the mistake that they will be aware of European history. And silly, don't you know that only people on the right wing are capable of bravery and only they possess the ability to fight and resist bad guys?

[TrackerNeil]

lockesnow,

You honestly think the "Blue Dog Democrats" will be re-elected if the huge government expansion continues and these legislators vote in favor of this continued expansion?

Well, small-government Republicans were returned to office even after years of supporting Bush's giant entitlement expansions (i.e. Medicare bill) and massive deficit spending, so I don't see that the "Blue Dogs" should have much more of a problem.

Fact is, I think the moderate Democrats already know they're going to fall in line, as evidenced by the relative lack of specificity of their demands. If they were truly set against health care reform they'd pick clearly defined fights and then fight 'em, which they have not done this year. Instead, they have grumbled and glowered and stayed safely non-specific, thus ensuring they can vote any way they please when the time comes. I'm sure Obama and Pelosi will have to make various compromises to win over the vote of this or that Democrat, but in the end I suspect they'll either vote with their party or at least resist attempts to block it (i.e. the filibuster). And as Dionne pointed out in that op-ed, the Democrats have the numbers in Congress to lose a good deal of votes and still prevail; hell, they could lose eight or nine moderate Dems in the Senate and still pass health care reform.

All of this means, of course, that bipartisanship may be no more than talk, but so what? If the Democrats alone pass the biggest piece of legislation in our lifetime that takes major steps towards solving a problem most Americans want solved, well they can take all the credit. Bipartisanship is desirable, but health care reform is necessary.

[The Marquis de Leech]

lockesnow,

You honestly think the "Blue Dog Democrats" will be re-elected if the huge government expansion continues and these legislators vote in favor of this continued expansion?

Blue Dog Democrats tend to be from districts that don't mind a bit of federal spending (pork!), just as long as the "gummint ain't trying to take away our guns."

[The Marquis de Leech]

So my proposal is that we start calling them French Democrats because they are defeatest and appeasers ready to weakly kowtow to opposition at a moments notice. ;) And best of all, southerners would be especially PROUD of being connected to the French. :) That's why I chose to call them French Democrats, not to insult the French, but because it's the opposite of Blue Dog and would sting the politicians that refer to themselves as Blue Dog more than any other appellation.

How about Vichy Democrat? "French Democrat" wouldn't really put off Mary Landrieu, would it. ;)

Another option would be to bring back the 19th Century term for people like this, Bourbon Democrats. A shame people these days would just associate it with the whisky and not with the French aristocracy.

[Shryke]

Glen Beck brings us: The Sounds of Insanity

Nutlog Fox News Channel comedian Glenn Beck was apparently doing his radio show today, when he finally got so sick of what some caller was telling him about health care in the Netherlands that he went to his "death metal" place, angrily spitting envenomed barbs of invective back at the lady on the other line. It was crazy and growly and scary! But that was nothing! Mere seconds later, when the woman said something to the effect that Beck didn't care about people without health care, and yet he was cool with big bank bailouts, Beck somehow found a much higher level of TOTAL CRAZYSAUCE than ever before! Suddenly, Beck was emitting horrifying high-pitched shrieks, wailing, "GET OFF MY PHONE! GET OFF MY PHONE!" and a bunch of other terrifying stuff that only dogs can hear. Jeezy creezy the guy is just all messed up inside!

Seriously, this is INSANITY in sound form.

Be warned, you cannot UNHEAR this.

[The Wolf Maid]

Glen Beck brings us: The Sounds of Insanity

Seriously, this is INSANITY in sound form.

Be warned, you cannot UNHEAR this.

The Sunday Times recently did an article on something on this incident:

America's white men are back and raging

[C S]

Question: The possible taxation of healthcare benefits. The Economist calls this a market distortion. Why is this? They support this move to tax these because they think it's morally right and that it would save $250 billion. Ironically, one group of people that really don't want this to happen are the labor unions. I say ironic just because it could potentially be a key component to getting reform done and typically the people farthest to the left are the ones that want healthcare reform the most.

Just a guess, but I suspect that most members of labor unions have decent health insurance.