Brad DeLong expands his shrillness about the bond market and interest rates and concludes as follows
The claim is that we must move to fiscal austerity right now because:From which I infer that he thinks the claim that austerity is a necessity is nonsense.
- invisible people whom nobody can see perceive that somebody perceives that somebody else perceives that the exhaustion of U.S. debt capacity might be about to happen.
Central bankers around the world have become ostriches, hiding their heads in the sand. They continue to espouse "austerity," as though that will cure the world's economic ills.
And yet, and yet . . . Ireland.
Nearly two years ago, an economic collapse forced Ireland to cut public spending and raise taxes, the type of austerity measures that financial markets are now pressing on most advanced industrial nations.
Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish economy shrank 7.1 percent last year and remains in recession.
Joblessness in this country of 4.5 million is above 13 percent, and the ranks of the long-term unemployed — those out of work for a year or more — have more than doubled, to 5.3 percent.
Now, I can hear the naysayers: "Ireland is different! It's an itty-bitty country! That wouldn't happen in Europe and America!" No, it probably wouldn't, not to the degree it has in Ireland. But is that what we want to be saying when we're still mired in recession a year from now? "At least we're not as badly off as Ireland?"
That’s why the Irish debacle is so important. All that savage austerity was supposed to bring rewards; the conventional wisdom that this would happen is so strong that one often reads news reports claiming that it has, in fact, happened, that Ireland’s resolve has impressed and reassured the financial markets. But the reality is that nothing of the sort has taken place: virtuous, suffering Ireland is gaining nothing.
Of course, I know what will happen next: we’ll hear that the Irish just aren’t doing enough, and must do more. If we’ve been bleeding the patient, and he has nonetheless gotten sicker, well, we clearly need to bleed him some more.
What is needed now is stimulus to get the world's economies growing again, not tax hikes and job cuts which take money out of the hands of consumers. Unfortunately, central bankers aren't listening.
Courtesy Daily Kos, here's George Will on ABC's This Week explaining why Republicans won't vote to extend unemployment benefits:
TAPPER: George, why can't they pass this unemployment extension? I don't understand. The Republicans say spending cuts should pay for this, the Democrats know it's emergency spending. It seems like this is something where there could be a compromise.So if people get unemployment benefits they won't take one of the millions of jobs on offer, apparently.
WILL: Well, partly because they believe that when you subsidize something, you get more of it. And we're subsidizing unemployment, that is the long-term unemployment, those unemployed more than six months, is it at an all-time high and they do not think it's stimulative because what stimulates is the consumer and savers' sense of permanent income. And everyone knows that unemployment benefits are not permanent income.
I would love to see Republican members of Congress (and Republican pundits) suffer through a period of unemployment such that they had to worry about how they were going to feed their children and pay the mortgage and car loans. Politicians, even when voted out of office, usually find highly-remunerative work pretty quickly, from what I can tell. They get hired by corporations which want them to use their influence with their former colleagues to sway those colleagues to vote in the corporations' interests. And I can't recall the last time I heard of a pundit not finding another outlet for his opinions, either.
Believe me, Congressmen and Senators, no employers are knocking on the doors of the long-term unemployed offering good jobs with benefits. Not when there are 5.4 unemployed people for every available job according to the latest numbers from the Bureau of Labor Statistics, Table 1, January 2010 (.pdf). The argument that "if only we'd stop helping these people they'd go out and work" doesn't wash.
European officials took the G20's commitment to cut deficits as a clear sign that the rest of the world had come around to Europe's point of view.
Santayana famously said "Those who cannot remember the past are condemned to repeat it."
By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was considerably lower than the 25% rate seen in 1933. In June 1937, some of Roosevelt's advisors urged spending cuts to balance the budget. WPA rolls were drastically cut and PWA projects were slowed to a standstill. The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 per cent and production of durable goods fell even faster.Paul Krugman, back in 2008, posted some graphs which show what happened to GDP and to employment both before and after that misguided attempt to cut deficits before the economy had fully recovered.
Unemployment jumped from 14.3% in 1937 to 19.0% in 1938, rising from 5 million to more than 12 million in early 1938. Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels.
And now, the Europeans and too many in the US Senate seem to think we should do the same thing all over again.
Santayana was right.
NYT Live blog here.
What is it with this team? "We play better coming from behind, so let's give up a goal at the 5-minute mark."
Update: Well, rats. It's like they lose concentration at the start of the game and again at the beginning of extra periods. I'm sure that's not true, but giving up goals at the start is no way to win.
From the inbox:
Your email account has been reported for numerous spam activities from a foreign ip recently. As a result, Webmaster has received advice to suspend your account. However, you might not be the one promoting this Spam, as your email account might have been compromised.Well now. My first clue that this thing was illegitimate was that it was addressed to "undisclosed recipients." The second clue: the "seven working days." But even more blatantly dumb is the name of the originator: Abuse Suuport Team email@example.com.
To protect your account from sending spam mails, you are to confirm your true ownership of this account by providing your username/NetID_______ and PASSWORD______ as a reply to this message. On receipt of the requested information, the Webmaster email support shall block your account from Spam.
Failure to do this will violate the Email terms & conditions. This will render your account inactive.
NOTE: You will be send a password reset message in next seven (7) working days after undergoing this process for security reasons.
I don't think I'll concern myself with this.
In light of this information, perhaps there should be stronger rules for judges and their potential conflicts of interest when court cases are assigned to them.
. . . the U.S. District Court Judge who declared illegal the Obama administration’s blanket, 6-month moratorium on deepwater drilling in the Gulf of Mexico, had income in 2008 from a host of energy stocks.I don't want to impugn Judge Feldman's integrity, but it seems to me that he might have concluded that his ownership of stock in at least 12 energy companies would be at minimum perceived to be in conflict with the objectivity required to render a judgment in the moratorium case. Particularly, it seems to me, when he must have known how politically sensitive his decision was going to be.
Had I been in his shoes I'd have recused myself.
Hawai'i has 8 (eight!) candidates for the Lieutenant Governorship in November's elections.
Why? The job is full of nothingness. It has no authority except that which the Governor cedes to its holder. It's essentially seen here as a way station on the road to running for Governor. That's okay, but it means giving at least four if not eight years of your political life to a position where you have little to no impact on state policy.
Even stranger, the primaries determine who the party's nominees are in November, but candidates for Governor and Lt. Governor don't run as a ticket in those primaries. It's only when those are done that the two top vote-getters form a partnership.
My window is open here in Manhattan, and when the Americans scored, you could hear the roar in the street. I’ve never heard anything quite like that here, to be honest. I’m sure that’s what it was like everywhere across the US and wherever Americans were watching this game.I've read stories of summers in Brooklyn and the sound of radios from every door broadcasting the voice of Red Barber calling Dodgers games. It sounds like Manhattan must have been a little like that where Jeff Klein was.
What a fantastic ending to this match — the Americans came close so many times and were stopped by the Algeria goalie, or fired wide, or, on one occasion, were thwarted by a mistaken offside call. But in the end, they won.
NPR has a story about a drive-in theater in Belleville, IL which is adding a third screen to the two it already has.
Interested in opening one? An equipment supplier to the industry offers these thoughts:
What will be my startup costs? Projectos and screen are only part of the investment that you will need to get started. You will need an appropriate structure from which to project. This structure must be equipped with electrical power, ventilation and enough room to operate a movie projection system, and be secure enough to prevent theft. The following are estimates of a "normal" drive-in startup cost. Projector/Film travel/FM Transmitter $50,000, inflatable AIRSCREEN - $35,0000, Box office system - $15,000, concessions - $30,000. Other costs include your projection building/platform, electrical improvements, permits and licenses, etc. Overall a budget of $150,000-250,000 should be planned for a single or screen drive-in.I'm pretty sure the one my great-aunt and uncle operated in Bagdad, AZ didn't cost that much, but then they opened it in the 1950s.
Oh, and those startup costs don't include acquisition of the real estate.
I worked as a projectionist part-time while I was out on Kwajalein. Back then the medium was film, not digital, and you had to watch the end of each reel closely to find the cue marks in the upper right corner of the film (there's a good description of the process here at Section 188.8.131.52). I only did that part-time. My employer of necessity showed the same film two or three nights in a row, and it got really tiresome quickly. I remember showing a B&W version of "Hamlet" (probably this one, starring Maximilian Schell, although how it got from TV to film reels is beyond me) for three straight nights, which wouldn't have been so bad except it's a really lousy version of the play.
No, no. Not the Republican Party as currently configured. What on earth are you thinking?
No, I'm talking about e-Book reader prices. NYT:
Barnes & Noble, the national bookseller, announced Monday it was dropping the price of its six-month-old Nook e-reader to $199 from $259 and introducing a new version of the device, which connects to the Internet only over Wi-Fi networks, for $149.I spend most of the day reading from a screen, so in theory I wouldn't have any trouble with the Nook, the Kindle or the iPad, but the prices of the three gadgets have been way over my budget. They still are, but they're beginning to move in my direction. Good.
Responding rapidly, rival Amazon.com then cut the price of its popular Kindle e-reader below the Nook, to $189 from $259.
Rand Paul opposes the Civil Rights Act? A rookie "gaffe." Sharron Angle is speculating about the armed overthrow of the United States government. "Gaffe." Joe Barton is apologizing to BP? "Gaffe.""Oh, it's just semantics," I hear you say. Well, no. "Gaffe" implies a mistake. Michael Kinsley had it right back in 1992: "A gaffe is when a politician tells the truth." I'd modify that to read ". . .the truth as he sees it," because I don't believe politicians' "truths" are always borne out by facts. Nonetheless, it's worth bearing in mind that when you hear one of these people say something completely outrageous to your own sensibilities, sometimes they really do believe that, no matter how nonsensical it sounds.
This is a misguided way to help politicians out of a jam. As Jon Chait noted the other day, the radicalism of today's Republican Party is covered poorly by many outlets, "in part because [the media] insists upon viewing this new brand of radicalism through the lens of a 'gaffe' ... rather than explaining it in ideological terms."
When political extremists share their radicalism with the public, that's only a mistake to the extent that they're generally better at hiding it. Barton, Angle, Paul, Palin, and others aren't just misspeaking -- they're saying what they actually believe. "That's not a political gaffe."
Josh Marshall and his crew have done yeoman's work compiling what they think are the Top Six GOP Oil Spill Gaffes. They include, of course, Joe Barton's apology for the "shakedown," Sarah Palin's conclusion that her call to "Drill, Baby, Drill" was somehow vindicated by an oil-gushing open wound in the earth's crust, and John Boehner's knee-jerk agreement with the tone-deaf US Chamber of Commerce, whose president suggested that the Federal Government should be responsible for the cleanup costs in the Gulf, not BP.
The Republicans really aren't very adept at reading polls sometimes. There are two entities who top the "America's Most Hated" list right now: BP and the referee from Mali who disallowed the US soccer team's goal yesterday. So of course it's a good idea to align your party with one of them.
Update: Hmm. Joe Posnanski thinks we shouldn't be pleased with a tie; rather we should be astonished at the referee's vision of an invisible foul.
It seems odd to be pleased with a tie in a sporting event.
Maybe that's part of the reason Americans "don't watch soccer."
As I said below, I'm using Picasa to host pictures of my high school classmates. This is the first time I've used it, and it's got a tool I didn't know about.
When I get a photo in e-mail it's usually embedded or an attachment. Eudora (my e-mail program) puts the photo in a different folder depending on which way it comes in. That's mildly annoying, but until this project it hadn't aggravated me enough to reconfigure the mail program.
The way Picasa works, at load from the desktop it shows every folder and a thumbnail of every picture within each folder. On the left side of the screen there's a folder list. Occasionally I'd get mail with a picture and it wouldn't show up in the appropriate folder in Picasa. If I looked using Explorer I'd find it in the correct place, but it just would not appear in Picasa. It was driving me crazy until I discovered that if you highlight the folder and right-click, there's an option to refresh thumbnails.
From my point of view it's a damned shame that, while he updated Carter's energy speech in July, 1979, particularly Point Six:
I'm proposing a bold conservation program to involve every state, county, and city and every average American in our energy battle. This effort will permit you to build conservation into your homes and your lives at a cost you can afford.he didn't go further, demanding that the Senate pass the Kerry-Lieberman bill (.pdf). I suppose he didn't because he recognizes that the trouble is, it's the Senate. The Republican party is not only behaving irresponsibly in obstructing everything it possibly can, but it's also got quite a few climate change deniers in it. Even if the Republican leadership felt that it would be good for the country to address the issue, some of its members wouldn't go along.
There are also some Democrats from energy-producing states (Louisiana, I'm looking at you) who insist that jobs are more important than the life of the planet. If ever there were a short-term view opposed to a long-term one, this is it.
I'm disappointed, but I'm a realist. I do wish he'd bash the deniers and give up on the bipartisan schtick. He surely knows better by now after his experience with health care.
The impression I've been getting from media reports about Congress is that an energy bill is less likely to pass in the wake of the BP oil catastrophe.
I shouldn't be surprised by anything our elected representatives do after all these years of watching them, but I am. If ever there were an impetus for trying to reduce the country's need for oil, you'd think the possibility of an entire region's economic destruction from a single (albeit massive) accident resulting from trying to pump the stuff would be it.
Even as tar balls and worse show up on beaches, marshlands are being destroyed and waterfowl are being killed, the Senators from that region are saying to the President "Leave our oil drillers alone!" Yes, yes, there are jobs at stake, but there are whole industries at stake too, when you consider fishing and tourism there.
You can't have it both ways, guys. Not for long, anyway.
If unemployment had reached its current level of 9.7% twenty years ago there would have been panic in the halls of the White House and Congress. Economists have traditionally felt that ~5% unemployment is "full employment," the point where those who want jobs can find them. If people are jobless it's a normal function of labor markets; they're retraining, moving to where jobs in their fields are more plentiful, or just entering the job market.
We have roughly 15 million unemployed Americans, and nearly half of them have been out of work for longer than six months (US Bureau of Labor Statistics, June 4, 2010).
Why, then, does Congress seem to be worrying about the federal deficit rather than the unemployed? Why is there no concern that Coxey's Army or the the Bonus Army might reappear on Pennsylvania Avenue in DC?
I wish I knew.
My high school classmates have decided ordinary reunions are not enough. This Saturday they're holding a 60th birthday party for all members of the class, figuring that the majority of us have just hit or will soon reach that milestone.
If the event site was closer than 6,000 miles east I'd be there in a minute. Failing that, I volunteered to use my Picasa site to host photos of class members. If I can't be there, at least I can "see" some of those who will be.
The Hands Nation tied the No-Hands Nation in today's match? That's stretching, Mr. Vecsey.
Now, really. The hype has overtaken the game's importance. Sure, the US beat England in 1950, but the majority of the population in each country wasn't even alive when that happened. Who the hell are we Brits and/or Americans, the Serbs remembering the Battle of Kosovo?
I saw a little bit of the Uruguay - France soccer match this morning and had to explain to Mom just what that underlying buzz she was hearing was and how it was produced.
Behold the vuvuzela!
In the hands and mouths of 68,000 fans at Cape Town Stadium watching and listening was like standing next to an apiarist's dream: a hundred busy beehives.
Katie Couric keeps telling me on the CBS Evening News that BP says it's paid out $53M in claims to Gulf Coast residents for damages and lost income. CBS has as yet interviewed no one who's actually gotten any money from them.
So, CBS, ABC and NBC, can you find anyone who's gotten a check?
Actually, it's not a word. It's a graphic image Kevin Drum found. Remember that PG & E's market runs north from Bakersfield to near the Oregon border. Now go look at the graphic in Kevin's post. It shows the breakdown of votes for Prop 16 by region within California.
As Kevin says,
If you don't actually have to endure PG&E as your electricity supplier, their anti-tax message sounded pretty good. But if you do have to do business with them, you were in no mood to give them any more clout than they already have.
Since Hawai'i has no election until September, I'll gratuitously comment on two Propositions that narrowly failed in California, my home state.
The first, Proposition 16, was written by and for Pacific Gas & Electric, the natural gas and electric utility which serves 2/3 of the state, from Bakersfield north to near the Oregon border. It essentially said that no local government could start up a utility to compete with PG & E without a 2/3 majority vote by its constituents approving that startup. Huh. Seems harmless enough, right?
Have you seen how hard it is to get a budget bill through the California legislature, which has a 2/3 majority requirement? Or how hard it is to get a bill through the US Senate, which, because of the filibuster, needs a 60% majority?
PG & E, had it won (and it spent $46M on ads trying to influence the vote), would have had a virtual lock on the entire market for 2/3 of the state. Fortunately for ratepayers, it lost by 156,000 votes, 52.3% - 47.7%.
Proposition 17 wasn't quite as egregious, but still very friendly to auto insurance companies. It was sponsored by one, Mercury Insurance. It said that insurers could offer discounts to drivers who maintained continuous liability coverage. That too, sounds harmless.
Ah, but who would make up the companies' losses from those discounts? Why, drivers who let their insurance lapse for one reason or another within the previous five years.
Didn't own a car for a while and had no need of insurance? Congratulations, you'll get higher rates when you do buy that new Mini. Got deployed to Iraq or Afghanistan and left the car on blocks in your yard or your brother's garage? Higher rates for you too.
Despite Mercury Insurance's $16M lobbying campaign, Proposition 17 failed to pass by 120,000 votes, 51.7% - 48.3%.
So wise policy, as defined by the G20 and like-minded others, consists of destroying economic recovery in order to satisfy hypothetical irrational demands from the markets — demands that economies suffer pointless pain to show their determination, demands that markets aren’t actually making, but which serious people, in their wisdom, believe that the markets will make one of these days.DeLong:
However, right now, as best we can tell, an increase in federal spending or a cut in taxes will produce (in the short run) no increase in interest rates and hence no crowding-out of productivity-increasing private investment. Indeed, government spending that adds to firms’ current cash flow may well boost private investment and so leave us, dollar for dollar, richer after the effect of the stimulus ebbs.I'm not as bright as either of those guys, but it seems blindingly obvious to me that what we need right now is
Because our debt today can be financed at extremely low interest rates—1.83 percent if financed via 30-year TIPS, and even less in expected real interest if financed over a shorter horizon.
This is definitely intriguing. An archaeological dig near York in northern England may have uncovered a gladiator cemetery.
About 80 remains have been found since the investigation began in 2004, with more than half of them decapitated.Lions and tigers not being found in that part of the world, I'd say that theory's as good as any other.
Researchers believe they may form part of the world’s only well-preserved Roman gladiator cemetery.
Kurt Hunter-Mann, a field officer at York Archaeological Trust who is leading the investigation, said: “The skulls were literally found somewhere else in the grave — not on top of the shoulders.
“We could see that in quite a few cases the skulls had been chopped with some kind of heavy bladed weapon, a sword or in one or two cases an axe.
“But they were buried with a degree of care. There are no mass pits. Most of them are buried individually.”
He said that bite marks on one of the skeletons helped to steer the team to its initial theory.
“One of the most significant items of evidence is a large carnivore bite mark — probably inflicted by a lion, tiger or bear — an injury which must have been sustained in an arena context.
It's fascinating that there were apparently some animal remains buried in the same grave as one of the most impressive human specimens, a man decapitated by several blows to the neck. The theory is that those might have been part of the funeral feast.
"Hmm. No more meat on this haunch."
"Throw it in with old Flavius there; he won't mind."
I just finished the third book, "The Girl Who Kicked the Hornet's Nest." Just as book two was, this is another runaway train. Larsson made me feel that events followed one another in rapid-fire succession, even though they took place over a period of two months.
Caution: if you aren't reading this immediately subsequent to finishing "The Girl Who Played with Fire," go back to that book and read the final couple of chapters or you'll be lost for the first two or three chapters of this one. There's no summing up, no "previously," no filling-in of back story. The first sentence picks you up and drags you in.
Lisbeth Salander is being carted via helicopter to a hospital for treatment of several bullet wounds, and Blomkvist is trying to explain to a monumentally stupid cop that the man inside a woodshed is a former KGB defector who's been running a criminal trafficking enterprise with the assent of part of the Swedish State Police, and that the guy guilty of several murders in Stockholm is tied to a street sign a mile or so away. Suffice to say, it takes Blomkvist's arrival at the main police station before any of this is believed. By that time, one of the two cops sent to retrieve the murderer is dead, the other savagely beaten and the murderer long gone with their weapons and car.
That takes you up to about page 13.
The balance of the book has Blomkvist trying to clear Salander's name with the cops; some of the cops recognizing that there is rot in high places within the State Police, and Salander able to help herself with her network of hackers.
This is a remarkably satisfying book; some things from Salander's background are resolved, others are not, but it's not a cliffhanger like the second book. It's a damned shame there won't be any more Salander books from Larsson; when he died he supposedly had half of a fourth book finished, but I can't imagine it being published.
Sixty-six years ago today the invasion of Normandy began.
As good as "Saving Private Ryan" was, among films about that day I'm partial to "The Longest Day.""Ryan" is justly famous for its first 25 minutes depicting the landing, but then it became a mish-mash of a story about events which didn't happen in Normandy. Yes, there was an Army policy to keep sole survivors of families from combat, but it wasn't instituted until 1948, long after the war was over.
"The Longest Day" was an attempt to show what happened all over the five landing beaches and the subsequent Allied move inland. It was a remarkable film in part for its attention to history; there was little Hollywood fictionalization.
There are American World War I and World War II cemeteries in England, France, the Netherlands, Luxembourg, Belgium, Italy, Tunisia and the Philippines.Take a moment to think about those souls today.
You'll find me here the rest of the day.
Oh, should I be doing something else today?
Results: Baseball, UH 4 - USD 3 on a bases-loaded hit-by-pitch in the ninth inning.
Softball: UCLA 5 - UH 2 on three home runs to one for UH. Rats.
The Economist published a chart (reproduced here) which shows some of the items allowed and prohibited by Israel's blockade of Gaza. It looks very odd. Some of the items on the list make sense if you want to keep the Palestinians from working the land (seeds, nuts), although I don't see what you're gonna give (allowed) animal feed to if you can't import the animals (donkeys, cattle). So anything that would allow the residents of Gaza to be self-sufficient is out. Gotcha.
But why musical instruments? Are the Israelis worried about potential bugle calls ahead of massed Palestinian charges à la Pickett?
NYT: "The Israeli government has said that its troops were attacked by passengers wielding knives and clubs, and that the commandos fired only in self-defense."
Well, gosh. If you hadn't boarded the ship in what appears to be a violation of international law, your commandos might not have been attacked with knives and clubs. It's also interesting that knives and clubs were the weapons used; surely if those on board the ship were Hamas terrorists they would have been equipped with AK-47s, no?
At what point does Israel's claim of self-defense as its justification for every use of force start being ludicrous?
“A suspect who has received and understood the Miranda warnings, and has not invoked his Miranda rights, waives the right to remain silent by making an uncoerced statement to the police,” Justice Kennedy wrote.So, I can't just keep my mouth shut, I have to say I'm going to keep my mouth shut?
This is mind-bogglingly silly. In order to remain silent, I have to talk.
The wrong justice is retiring.