Tag Archives: economy

The Ben Bernank and the Quantitative Easing

22 Nov

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and the response:

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White House White Board – Auto Industry

19 Nov

In the fourth edition of White House White Board, Austan Goolsbee, Chairman of the Council of Economic Advisers, discusses the President’s tough decisions on the American auto industry in light of the General Motors IPO.

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While the topic of GM’s bailout and whether it was worthwhile is an interesting discussion, I posted this more to illustrate another point.  President Obama is terrible at politics.  Saving GM should be a slam dunk issue and a huge boon to his approval ratings, especially in rust belt swing states like Ohio, Michigan and Pennsylvania.  Instead, he’s a reactionary politician who spends more time defending and explaining his positions than presenting them.

President Obama's Director of Heavy Political Lifting

It’s something that I didn’t see coming during the 2008 election, Candidate Obama seemed so adept at messaging and politics while President Obama fumfers and compromises and reacts.  What happened?  What’s the difference?

Right now, this cartoon explains where the President is at poltically:

The white board videos that Goolsbee is creating are a return to that simplicity of messaging, but they are on YouTube and not part of a massive messaging effort.  Goolsbee has just the type of demeanor the American public needs to see from this administration.  Get him in front of the media at every opportunity, make him the point man on economic issues and jobs.  He’s smart, funny, and can speak in the bullet point, bumper sticker style most Americans need in order to understand complicated issues.

Republicans are arguing (with a straight face) against extending unemployment benefits for millions of Americans while arguing to keep the tax cuts for the wealthiest 2% of Americans in place.  Doing so in the face of pluralistic public support for the President’s proposal.  He is being outflanked politically, he’s lost his narrative and he’s become the great compromiser.  He’s taken a conciliatory and defeatist approach to policy when we need a leader.  He’s alienating his base and a capitulation on the tax cut issue with the Republicans will only further disenfranchise the liberal and center-left base that got him elected.

This President needs to grow a set and soon or he’s going to find himself out on his ass in 2012.

Sanity Restored

1 Nov

I watched a good deal of the Rally to Restore Sanity and/or Fear on Saturday, and was struck by the sheer size of the crowd – it rivaled, if not eclipsed – recent teabagging fiestas that have been held on the mall to protest … what, exactly?

A poll recently revealed

that by a two-to-one margin, likely voters in the Nov. 2 midterm elections think taxes have gone up, the economy has shrunk, and the billions lent to banks as part of the Troubled Asset Relief Program won’t be recovered.

The reality is…

The Obama administration has cut taxes — largely for the middle class — by $240 billion since taking office on Jan. 20, 2009. A program aimed at families earning less than $150,000 that was contained in the stimulus package lowered the burden for 95 percent of working Americans by $116 billion, or about $400 per year for individuals and $800 for married couples. Other measures include breaks for college education, moderate- income families and the unemployed and incentives to promote renewable energy.

The meme that Obama is nothing but a tax-raiser is as false as the notion that he’s a soshulist moozlim sleeper agent.

Almost all of the TARP bailout money has been repaid.  The government will take a hit on AIG and the automotive bailouts, and the mortgage bailouts, but had those all been allowed to fail, it would have been an epic economic catastrophe along the lines of a great depression, or worse.

So, we can – and should – debate how we go forward to further grow and strengthen the economy, and how to help lower the unemployment rate.  But the rhetoric – much of it false and manufactured – needs to be tamped down.  Saturday’s event may have been a bit plodding, but it’s hard to play to a crowd of 250,000-ish people.  But it was a great reminder that many, many more of us are just normal people who think normal things about politics than are followers of cable news network pseudo-evangelists of hatred and falsehoods.

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Like Rats Leaving the Sinking Ship

28 Sep

It has been a bad two weeks for poor Tim Geithner, Secretary of the Treasury. No, the unemployment news has been no worse than normal. And the stock market has not tanked (nor rebounded). Instead, the problem is that he’s running out of work mates – economic team member #4, TARP chief Herb Allison, just announced he was bailing too.

Add Herb’s name to a list that includes Larry Summers, high profile (why?) economic advisor, budgetary wiz Peter Orzag of OMB and Christina Romer. A mere twenty months into Obama’s administration, the chief architects of the President’s #1 policy priority are lining up to leave, to spend more time with their families and pursue other opportunities.

Well, thank goodness! That must mean the job is done, then. That the United States has kicked high unemployment, avoided a double dip recession, is growing well, and things are on the up and up. Oh, wait, they aren’t? I can’t believe such dedicated public servants would ever quit early. Robert Gibbs says they have been working so hard and are burned out. Don’t you feel bad for them? Unemployment benefits currently last more than twice as long (99 weeks) as these officials have been on the job.

And with Chief of Staff Rahm Emanuel due out soon to run for Mayor of Chicago, and Political Advisor David Axelrod announcing he is headed back to Chicago as well to start the campaign, what exactly is going on here?

Heaven forefend that I make a positive remark about the previous administration, but like the policies or not, officials saw the process through. The wars in Iraq and Afghanistan were Bush’s #1 priority, and Secretary Rumsfeld, Paul Wolfowitz, Condoleeza Rice, Colin Powell, and General Myers all stuck around for four to six years. Where is the stick-to-itiveness of this round of officials? They aren’t even lasting to the midterm elections.

I can see moving on if the goals of the administration have been accomplished, but we are far from there on the economic front. What achievement is so great that Larry Summers can call it a day?

The biggest win is arguably the TARP, which is a Bush program, not an Obama administration initiative (lest we forget the timeline). Many major banks did not go bankrupt, the credit markets exist, money is being lent, and the government is getting its money back (with a profit) – in this case, the absence of an apocalypse must count as success.

President Obama’s initiatives are more mixed. A round of financial regulation reforms have passed, but we won’t know the true impact for years. Just as Clinton was the beneficiary of the Regan tax cuts, and the Dodd/Clinton Fannie Mae loan rule relaxation mess didn’t yield its ugly underwater mortgage fruit until Bush/Obama, we won’t know whether Obama’s finance regulations will bring fiscal sanity, or CDO Swaps 2.0, until many years down the road.

A second Obama initiative, the whimpering stimulus package, is a more obvious failure. The 2010 federal budget deficit ($1.4 trillion), much of it stimulus to get the economy plugging along again, is roughly equal to $100,000 for each unemployed person in this country (14.9 million). What have we bought with our money? Not a “new” economy or a “green” economy. It has not bought us bridge technologies (new natural gas pipelines), or new technologies (next generation batteries, solar arrays, etc). It has purchased some token investment in car batteries, but far more has been spent on asphalt for those cars to drive upon. Obama’s stimulus legacy will be expanded blacktop that will need resurfacing in five years – I could not have set up a more poetic metaphor. Reports say Cash for Clunkers moved demand up but created no more, the housing rebates seem to have had much the same effect, unemployment is still too high and not falling. Are the Keynesians yet humbled?

The economic team is may be the one most visibly leaving, but they are not the most visibly dysfunctional. Bob Woodward’s new book confirms what we have suspected: significant dissention in the foreign policy ranks, widespread derision of national Security Advisor Jim Jones, battles over turf overtaking those over policy, and that VP Biden is a jerk.

What is the unifying factor? It turns out running a campaign is not the same as running a government. Success in one is not a recipe for success for the other. President Obama’s advisors are either quitting or infighting, and neither is good for the country. Where are the Dem’s best and brightest. Where was the deep bench of Democratic officials waiting out their eight years of Bush to return competence to the government? There was a time when functional experts (Michael O’Hanlon at the Brookings Institution being an excellent example) would have come out of the woodwork once there was a party shift of power. Instead, we got Change, and rather than bringing in the Democratic elites, Obama brought his Chicago political insiders. President Obama has from the start been separate from the Democratic Party as whole (watch him sell out Congress for his 2012 re-election). Because of the way he won the nomination, Obama’s public spats with the Clintons kept some of the best and brightest on the sidelines. With Richard Holbrooke as the one notable exception, Obama brought in a Chicago team that is burning out early or fighting too late. Valerie Jerrett’s nearly assured and imminent promotion is a perfect example – what are her qualifications, besides friendship with the President? It is okay for an administration to bring on its insulated team, but didn’t Bush get a lot of flak for moving Texas to the White House?

Follow my eclectic Twitter feed @WNYMediaRepat

UB2020 Dead, Simpson Out

31 Aug

Government and public spending has, can, and should play a role in moving Buffalo forward – out of its dead industrial past and into a knowledge-based future. Our excellent public university system molds and mentors the business leaders of tomorrow. They experiment and learn. They develop ideas, products, and services that may lay the foundation for future economic growth.

So, when the University at Buffalo finds its ambitious expansion plans stymied by a dysfunctional and downstate-heavy legislature, that doesn’t just adversely affect UB and SUNY. It harms Buffalo and WNY in general. Adding billions in local economic activity and tens of thousands of students, faculty, and researchers to our area would undoubtedly be a direct and immediate benefit, while the work and studying that they do could very well provide the region with benefits for years to come. UB was asking for autonomy, yes. But it was asking for autonomy in an order to expand, and to enter into cooperative agreements with private companies – freedoms that other states grant to their state universities, reflecting the fact that the worlds of business and academia advance when they work together.

UB2020 may or may not be the answer to all of Buffalo’s ills, but, typically, we’ll never know.

TEDx in Buffalo

7 May

What is TED?

TED is a small nonprofit devoted to Ideas Worth Spreading. It started out (in 1984) as a conference bringing together people from three worlds: Technology, Entertainment, Design.  Since then its scope has become ever broader.  Along with the annual TED Conference in Long Beach, California, and the TEDGlobal conference in Oxford UK, TED includes the award-winning TEDTalks video site, the Open Translation Program, this year’s TEDIndia Conference and the annual TED Prize.

What is TEDx?

TEDx was created in the spirit of TED’s mission, “ideas worth spreading.” The program is designed to give communities, organizations and individuals the opportunity to stimulate dialogue through TED-like experiences at the local level.

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In short, it’s kind of a big deal.  It’s an opportunity for people to come together, share inspiring ideas and grow an audience around a cause, innovation, or technology.  The TEDTalks website is filled with fantastic discussions about education, humanity, science, beauty, government, logic, religion and our environment.

Susan Lynn Cope, professional event planner and overall awesome person has decided to lead the effort to bring a TEDx event to Buffalo.  She has been asking for input on her website and she just submitted the licensing application for the TEDx event earlier this week.

Andy Warhol once said “They say that time changes things, but you have to actually change them yourself.”  Buffalo, NY was a city born from the railways, trading and industrial revolution.  During the Queen City’s golden age, historic icons such as Mark Twain, Grover Cleveland and Fredrick Law Olmsted all made their mark and have left historic legacies for future generations to cherish and enjoy.

With the passing of time and the relocation of major industries overseas, Buffalo has seen a rapid decline in population. This city now has one of the highest percentages of vacant houses among major US cities.   I was recently moved by a documentary, “Requiem for Detroit,” by director Julien Temple.  Temple tracks Detroit’s past, present and future.  His description of the urban decay within Detroit is “a slow-motion Katrina that has had many more victims.”

The parallels between Detroit and Buffalo were unnerving and shocking to me.  Both cities, once thriving metropolises, are now hemorrhaging citizens while at the same time gaining artists and social pioneers that are repurposing the abandoned urban spaces and creatively uniting together.

Buffalo is a petri dish in which we are germinating ideas which respond to local socioeconomic problems.  These innovative responses to poverty, hunger, inequality, massive economic disinvestment and deindustrialization will become our major contribution to the national knowledge economy.

Within the region, we find hundreds of people, organizations and companies designing those very responses and struggling to find a platform from which to broadcast about them.  TEDx Buffalo can be that event and serves as a milestone on our long, dark journey towards enlightenment in this city and region.

Leave a comment here or on Susan’s website and demonstrate your support for this event.  This isn’t telling America about Buffalo, this is telling ourselves that we have the skills and willingness to create solutions and implement them.

Plutonomy

3 May

Plutonomy was a term coined by the Global Strategy Team at Citigroup back in 2005 to describe an economy that is driven by or that disproportionately benefits wealthy people, aided by market-friendly governments. You can read the two part report here and here.

Why is a five year old report relevant today?  Because one of America’s best journalists signed off his last broadcast with a discussion of plutonomy and gave us a parting editorial on why plutocracy (rule by the wealthy) and democracy (government by the people) don’t mix.

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Unless you’ve been asleep since 1980, our country has been moving towards a plutonomy and a growing inequality in wealth distribution.  As wealth centralizes, social and economic mobility at the bottom is limited. (click image to enlarge and make readable)

It’s ironic that conservative politicians, pundits and talking heads long for a “better time” when the American Dream was never far away from any person (aside from minorities or women) who simply had the gumption and guts to work for it.  You know why they remember it that way?  Because their formative years were spent in the greatest economic boom in world history, supported by higher marginal tax rates on the wealthy and legitimate corporate taxation and regulation.

Hourly rates of pay have been stagnant in the bottom 80% of the workforce for nearly fifty years and CEO pay continues to rise at unprecedented rates, we’re entering another era of robber barons and the super rich.

It’s also relevant as The Buffalo News posted a story on Sunday about rising CEO pay at local publicly traded companies.

While wages for the average worker in Erie County were virtually stagnant over the last year, the top executives at the publicly traded companies in the Buffalo Niagara region still managed to increase their overall median pay by an average of 6.6 percent, to more than $872,000 during 2009.

While the deepest economic slump since the Great Depression had companies cutting costs, slashing jobs and imposing pay cuts and wage freezes on many workers, local CEOs capitalized on the sharp rebound in the stock market to keep their paydays growing far faster than the pay of their employees.

This isn’t intended to be some socialist treatise on how the workers need to control the means of production and seize control of corporations from the plutocrats.  It serves as a reminder about the current state of our economic culture and the underlying motivations of our public policy decisions and political choices.  I believe in the entrepreneurial economy, I believe in the power of regulated markets, I believe in capitalism as an economic theory, I just believe we need balance.  We currently lack balance and honest discourse about the implications of our policy choices and it is slowly eating away at the fabric of our republic.

Those who would begrudge a public school teacher (who might equip their children with the skills to exceed their current standard of living) a good living at $60K per year, also defend the right for Bob Wilmers to earn tens of millions of dollars and his effort to strip the public schools of funding.  We complain about gasoline taxes, yet we care little that the majority of the inflated price of gas has to do with transactional profits taken by energy traders at Goldman Sachs and other Wall Street firms.  We get angry with people who bought into a bloated mortgage market, but care little about the banks who purposefully created the bubble by structuring mortgage securities which needed failure prone sub-prime loans to realize profits for the banks themselves.  The examples are almost too numerous to cite.

It’s bizarre, the system is out of whack by any empirical measurement, and many of those on the outside want to keep it that way.

Welcome to America, where many members of the working class fight for their right to be screwed daily by Plutocrats.

Clearing it Up

29 Apr

When health care reform is enacted to help insure almost all Americans, and initiate dramatically needed consumer protection into the health insurance industry, there was an outcry against it from the right, blathering about unconstitutionality.

When GM and Chrysler got massive loans from the government collateralized by stock, the right whinged about socialism, as if that somehow represented workers’ control of production.

When the banks got too clever for their own good and found themselves almost insolvent, when the entire economy collapsed and was on the brink of a once-in-a-century downward spiral, the right bitched and moaned that bailouts – many of which have since been repaid, with interest – were the worst thing since Hitler murdered 6,000,000 innocents and Stalin collectivized farms.

When Arizona passes a law that has the effect of requiring natural born United States citizens of Latino origin to carry citizenship papers with them at all times for wholly domestic travel, the right shrugs and tells the brown people, tough shit.

Just wanted to clear up what they do and don’t consider an unconstitutional outrage.  Social programs = bad, unconstitutional police-state-junior = dandy.

Maybe we need to institute the same policy in Florida and direct it at illegal Cuban immigrants. Let’s see how that goes over.  How about it, Mr. Rubio?

Is That Rain on My Leg?

9 Mar
New York State Capitol viewed from the south, ...
Image via Wikipedia

Here’s what Andrew Rudnick, head of the Buffalo Niagara Partnership, has to say about a new PAC he’s helping to set up:

It’s not really a Democrat or Republican thing; it’s an upstate-downstate thing

That must be why this PAC is dedicated only to electing Republicans to the state Senate and little else. It also must be why the PAC has teamed up with similar chambers of commerce from such upstate locales as Long Island, Westchester County, and the mid-Hudson Valley.

Rudnick said the realities of one-party rule in Albany force the Partnership and other groups across upstate and the metropolitan suburbs to consider Republican candidates.

“The object is to turn enough of those contested races back to Republicans,” he said. “That’s because of where the majority party is at this moment and what they’ve done.”

He pointed to the last state budget and projections of continuing deficits as evidence that the Legislature — under complete Democratic rule for the first time since the 1930s — is ignoring upstate’s economic plight.

“If everyone is Democrat and downstate, we’re now screwed more than we have been,” he said. “We’re all about trying to change that.”

I know that everyone pines for the days of a Republican senate majority, when taxes were low, businesses unencumbered, population and economic growth were the rule, when Bruno was one of the three in a room, and great names like “Volker” had an infinitesimally larger volume of clout than they do now.

And that’s the point – that it doesn’t matter what party an Albany politician belongs to. It doesn’t matter which party controls the Governor’s Mansion or a particular legislative chamber. No matter what happens, money trumps all, and the vast majority of the population gets screwed. For an Andrew Rudnick to suggest that flipping the Senate so that Skelos is in the room with the next embattled ethical mess of a governor will make a stitch of difference is epically ridiculous.

After all, these are the people who gave us the facile and self-contradicting Unshackle Upstate.

At least we can laugh at it all. There’s a wonderful and hilarious postscript to this story.

State Sen. Antoine M. Thompson, D-Buffalo, who coordinates the campaign efforts of Western New York Senate Democrats, did not return a call seeking comment.

Taibbi on the Wall Street ties to Pennsylvania Ave

2 Dec

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Taibbi’s blog is here.  He’s come a long way since founding the Buffalo Beast.