"Welcome to the Recovery," the new "Mission Accomplished"

Krugman is depressed.  Rightfully so. Read the rest of this post...

Meet Obama's new Solicitor General

You know how the apologist crowd keeps saying "vote for the Democrats because the GOP is worse?" If only that was reality. Besides flooding the team with Wall Street revolving door types and failing to address the key issues that led to the current recession, they keep hiring jerks like this. Can you honestly say this doesn't look like the kind of person Bush would have hired? Or any other Republican president? Now more than ever I wish there was another choice because our party sucks. It's hard to imagine any scenario where I could vote for more of this.

Change we can believe in?

Verrilli, one of at least five former RIAA attorneys appointed to the administration, is best known for leading the recording industry’s legal charge against music- and movie-sharing site Grokster. That 2003 case ultimately led to Grokster’s demise, when the U.S. Supreme Court sided with a lower court’s pro-RIAA verdict. Grokster produced a legal foundation which the RIAA used against file sharing service LimeWire, which shuttered last year and agreed to pay the labels $115 million to settle a lawsuit.

Good luck with the continuing campaign to win over Republicans. Sounds like a winner. Read the rest of this post...

Arianna: Obama not doing enough for jobs

Arianna Huffington.

Reacting to the latest round of depressing jobs numbers, the president said that it is just like "if you got hit by a truck, it's going to take a while for you to mend." Being hit by a truck is not a bad metaphor -- but he left something out. If you get hit by a truck, you are taken to a hospital for major interventions. When you are wheeled through the emergency room doors on a gurney, people react; they move purposefully and quickly; machines are brought out; desperate measures are taken. But that's not at all what happened with the economy. Instead, the economy got hit by a truck, was wheeled into the ER, and those in charge largely left the patient to heal on his own while they went into a back room to talk about the long-term building plan for the hospital. You know what might help speed along the mending? Surgery.

The chorus is building. Criticism of the President, for not doing enough to address then nation's lackluster economy, is growing - and it's coming from the left. This is going to be an issue. It's only a question of when it hits critical mass. And whether it hits critical mass in time to be turned around before it potentially dooms Obama in the 2012 elections.

That's another theme you may start hearing more about soon. Joe and I are both convinced that the certitude of re-election is not as rosy as it seems, and the blame goes to the economy. We had a bad feeling a year before the 2010 election, in which we lost the House. And we're starting to get another bad feeling about next year.  The President needs to, uncharacteristically, start focusing on an issue early rather than late.  More from Arianna:

As our Business Editor Peter Goodman puts it, the conditions underlying these numbers are "already familiar beyond the realm of professional economists and policymakers." This is what most Americans, Goodman writes, "know in their bones, not from government reports and the abstract musings of economists, but from the everyday fears that accompany glancing at their checkbooks and their latest credit card bills: There is no relief in sight. No one in a position to influence this depressing picture is expending real energy to improve it, and least of all inside the White House, where leadership is imperative."

Instead, the White House embraced the GOP message that the deficit is a bigger problem than jobs, kneecapping its ability to push for additional ways of stimulating the economy. And now the president and his team wanly claim there's not much they can do. But what they don't mention is how complicit they were in creating the conditions that have left them with not much to do. They gave away all the ammo and now plead helplessness because of... a lack of ammo.

The conventional wisdom is that "there is no appetite in Congress" for additional stimulus measures. But, in fact, members of Congress have an appetite for whatever their constituents have an appetite for.

It's an excellent piece by Arianna. Much longer than the excerpt above. And it contains some interesting tidbits from other former administration officials. Read it. Read the rest of this post...

Spectacular photos of Chilean volcanic eruption

Done with time lapse, very cool. Read the rest of this post...

Rachel Maddow: If you’re a Republican, "please try to fake it" that scandals matter to you

Very nice piece on the Weiner kerfuffle. The hunt for the complete Anthony scalp is on. Thanks to Rachel for saying the obvious — It's OK if you're a Republican.

It's a very nice piece. But note: she's not doing this for snark-points. She's trying to drive the discussion. Watch:



You can move the discussion too. I've thought for a while (and I know I'm not alone) that what used to be called "street theater" is an obvious way to create an effect outside of the ballot box. Sort of like Yes Men for the Rest of Us, or Yippies for Dummies.

For example, can you think of ways to incorporate diapers into David Vitter events? (I can.) And by "events" I mean lots of them. Volume counts in these things.

That's just an example, of course, and it may not even be the best idea. I know you have much more imagination collectively than I do (even collectively). Why not put your minds to work? The Teabags can't be the only ones who can put on a show for the cameras.

And semi-reliable members of the Progressive Coalition (which Weiner is) need supporters from somewhere. Cruickshank's Rule: Coalition members have each other's back. God knows the Dems aren't helping out.

GP Read the rest of this post...

Salon: Tim Geithner’s plan to lose the 2012 election

Well that was quick. I'd just written this morning that Joe and I were perhaps alone in beginning to worry about Obama's chances in 2012. Next thing you know, Salon's Andrew Leonard is worrying about the same thing.

[A]side from what should be the over-riding government responsibility to deal as forthrightly as possible with massive unemployment and economic hardship, there's also a realpolitik issue that Geithner seems to be missing. Voters care more about how the economy is faring when they head to the ballot-box then they do about the state of the deficit. And as is already clear from the initial campaign salvos from credible Republican presidential candidates such as Mitt Romney and Tim Pawlenty, the 2012 election is going to be a referendum on the economy.

By ruling out any further stimulus -- and, even worse, by abandoning efforts to keep the economy growing far too early -- Geithner has helped to make Obama and the Democrats extremely vulnerable in 2012. If Republicans take the White House and the Senate in 2012, then it really won't matter whether Geithner's deficit pivot could have preserved "the capacity to do a whole range of things that are really important." Healthcare reform will be dead. Banking reform will be dead. Medicare and Medicaid will face a deeply uncertain future.

[T]he electoral problem for Obama may not hinge on whether or not the president has the actual power to make manifest his will on job creation, but rather on whether he is perceived to be trying. Is he giving it his best shot? Is he making it clear to the general public what constraints have been placed on him by the opposition party and external events?


The answers are no, and no. And judging by Goldfarb's Geithner profile, the White House is fine with that. It's going to be a tough platform to run on, if the economy continues to slump as the campaign heats up.

That's been our number one complaint about the President from the beginning. He doesn't even try. Namely because, post election, he has it in his head that if the numbers are against you at the git-go, you'll never change them for the better. Had candidate Obama believed that - that it is impossible to ever woo the public to your side if they're not there already - he would have quit the race at the beginning, and Hillary would be President.

Where is candidate Obama, the guy who tried (though even during the campaign it was clear that not trying, not fighting, was already a problem)? We miss him. And we may be missing him a lot more come January of 2013 if he keeps this up. Read the rest of this post...

60% see wars as large part of deficit problem

It's the wars, stupid. Too bad nobody in Washington has the courage to end the war machine. End the damned wars and build a new stimulus to get the country working again for everyone and not just the defense contractors.

Far more Americans say that the cost of the wars in Iraq and Afghanistan has contributed a great deal to the nation's debt than say that about increased domestic spending or the tax cuts enacted over the past decade.

Six-in-ten (60%) say the cost of the wars in Iraq and Afghanistan has contributed a great deal to the size of the debt. About four-in-ten (42%) say the same about the condition of the national economy.

By comparison, just 24% say increased spending on domestic problems has contributed greatly to the nation's debt and even fewer (19%) cite the tax cuts enacted over the past decade. While half or more say spending and the tax cuts contributed at least a fair amount to the debt, 31% say increased domestic spending did little or nothing to increase the debt and 38% say the same about the tax cuts.

Read the rest of this post...

In 2007, the top 1% owned 50% of all investment assets; the bottom 90% owned 73% of all debt

As a follow-up to this post about the creditor class and the debtor class, we find this interesting data (h/t Paul Krugman). It's part of Table 9 from Edward Wolff's Levy Institute paper, Recent Trends in Household Wealth (pdf); to see the whole table with notes, click the link and go to page 52). The highlights below are mine.


This shows clearly the divide between the creditors (who own the assets) and debtors (who owe the debts) in the U.S. As of 2007, the upper 1% (net worth of $8.2 million or more) owned 49.7% of all investment assets. The rest of us owned the debt. Those numbers can't have gotten better.

(If you click through to the rest of the table, you'll see that the top 10%, as a group, owned 87% of all investment assets.)

Remember: If you owe debt, deflation is a demon, since you pay back cheaper borrowed dollars with dollars that are now worth more. To make that simple, imagine borrowing a dollar that buys two Waldo-burgers and paying it back later with one that buys four. You're down two Waldo-burgers (plus the interest).

But if you are a creditor, deflation is an angel with honey-sweet breath and a gift in each hand. You really want to be a lender in times of deflation. In our example above, the lender just doubled his money by waiting, and charged interest for the privilege.

In Krugman's phrasing, "Deflation is hell for workers and business owners, but it’s heaven for creditors." (For more on deflation, what it is and what it does, see here.)

Bottom line — who's behind that push to keep interest rates low low low (as in Europe) and for debtors to pay back every dime? The same people who are trying to bring back debtor's prisons.

You got it. Our friends, the very very rich. No cramdown for you, sir; time to be extra responsible.

I guess giving them all that Reagan-Bush-Clinton-Bush money didn't buy their love after all.

GP Read the rest of this post...

White House disses Senate Dems’ jobs bill because it’s not small enough

You are quite possibly witnessing the beginning of the end of the Obama presidency.

It's not a guarantee that the President will lose next year, and few people are even suggesting the possibility (though Carville recently did).  But just wait.  Sometime soon, more and more people will be talking about whether the economy is going to doom Barack Obama's re-election in 2012.  And today is the first clear-cut sign of trouble - trouble of the President's own making.

The White House today publicly undercut the Senate Democratic effort to pass jobs legislation to address the unemployment crisis in our country - mind you, unemployment just rose to 9.1% last month, and the public is none too happy about it.  So what is the White House's concern about the Senate Dems' jobs legislation?  It's thinking too big.

Yes, too big.

Lots of folks have been complaining for a while that the White House had no message on jobs.  Well, now they do: "Think small."

From The Hill:

The Obama administration on Tuesday night might have thrown a wrench into Senate Democratic plans to pass what they see as a jobs bill — by implying the bill spends too much money.

In a Statement of Administration Policy, the White House said it supports the broad goals of the bill.

"However, the bill would authorize spending levels higher than those requested by the president’s Budget, and the administration believes that the need for smart investments that help America win the future must be balanced with the need to control spending and reduce the deficit," the administration said.

Let's repeat that last line:

[T]he need for smart investments that help America win the future must be balanced with the need to control spending and reduce the deficit

Who says? Other than conservative Republicans, who says cutting the deficit is more important, or even just as important, as creating jobs?  (Answer: Tim Geithner.)  I can't think of a single American who, come November of 2012, is going to say "cutting the deficit was more important than finding me a job."

The President needs to get out of his Washington, DC bubble.  Things are bad out there.  Even those of us who have a job, who still have an income, are earning 1/3 of what we did before the crisis.  I dont't give a damn about the deficit in the near-term, I want our economy back.  I want to stop worrying about whether some day in the future I won't be able to pay my mortgage.  Things are far rosier in Washington, DC - our realty market is actually hot again - than they are in the rest of the country.  Maybe our policymakers and their staffs should spend some time back home and see how real people are coping.  Things are not well.

Thinking small about the economy is what George H.W. Bush did, right before he lost re-election.  I'll leave you with a quote from Wikipedia that sums things up nicely:

"It's the economy, stupid" was a phrase in American politics widely used during Bill Clinton's successful 1992 presidential campaign against George H. W. Bush. For a time, Bush was considered unbeatable because of foreign policy developments such as the end of the Cold War and the Persian Gulf War. The phrase, made popular by Clinton campaign strategist James Carville, refers to the notion that Clinton was a better choice because Bush had not adequately addressed the economy, which had recently undergone a recession.

You're always invincible, until you're not. Read the rest of this post...

Newt Gingrich was for Shariah law before he was against it

The funny thing is that Gingrich is turning out to be a bigger flip flopper than Romney, and that's saying something. From Justin Elliott at Salon:

Newt Gingrich has become one of the most vocal Muslim-baiting Republicans in the country, from his call for a federal ban on Shariah to his comparison of the organizers of the "ground zero mosque" to Nazis. But Gingrich's recent rhetoric represents a little-noticed shift from an earlier period in his career when he had a strikingly warm relationship with the American Muslim community.

As speaker of the House in the 1990s, for example, Gingrich played a key role in setting aside space on Capitol Hill for Muslim congressional staffers to pray each Friday; he was involved with a Republican Islamic group that promoted Shariah-compliant finance, which critics -- including Gingrich -- now deride as a freedom-destroying abomination; and he maintained close ties with another Muslim conservative group that even urged Gingrich to run for president in 2007.

Read the rest of this post...

Geithner is driving the economic agenda, which means Obama reelection strategy, too

Today, the Washington Post has a profile on Treasury Secretary Tim Geithner. Apparently, according to the conventional wisdom in DC (such as it is), Geithner is now the guy setting our economic agenda. He's got Obama's ear. Since the reelection is tied to the economy, Geithner is determining the reelection strategy:

Geithner has not only survived but quietly gained influence, which he has used to press President Obama to curb the nation’s soaring debt even at the expense of spending that might more directly spur employment.

His success at driving the agenda signals his status as the president’s closest economic counselor. With the departure this summer of Austan Goolsbee as chairman of the Council of Economic Advisers, Geithner will be the last remaining member of the president’s original economic team and, with Federal Reserve Chairman Ben S. Bernanke, one of the two remaining architects of the great banking bailout that began in 2008, even before Obama’s election.

Geithner, who was once a registered Republican and then an independent, has a faith in the marketplace that puts him at odds with many of Obama’s traditional Democratic allies, whose skepticism about markets seemed vindicated by the financial crisis. His debut on Obama’s team was also shaky. He faced questions about whether he had properly paid all his taxes, and his initial public defense of the administration’s plan for rescuing the financial industry was uninspired, prompting anxiety in the markets.

But over the past year, he has fared better, especially at pushing his viewpoint in internal White House debates. While forces outside the White House — in particular, Republican lawmakers — have helped turn Washington’s attention to the nation’s debt, Geithner’s efforts inside the White House have shaped how Obama confronts this defining moment. At stake in the months ahead are the size of government, the generosity of the nation’s safety net, the taxes people will pay and the debt that will weigh on future generations.

The policies molded by Geithner — and the balance they strike between slashing the deficit and supporting the economic recovery — could also ultimately determine whether Obama will win a second term.

Yep, move over Jim Messina. Geithner is running the reelection. I've never been overly impressed with the White House political operatives (yes, they got him elected against great odds when no one thought he would win. Heard it. That still seems to be their singular accomplishment.) I'm pretty sure Geithner does not understand electoral politics. And, he doesn't seem to know -- or care -- that his policies could cause serious political problems for the President. He's much more in tune with what Wall Street wants than anything related to the needs of voters -- like jobs. And, the Democratic base values the nation's safety net.

This article has quotes from Obama's Chief of Staff William Daley. It was written with input from the highest levels at the White House. They want us to know of Geithner's status. It doesn't provide much comfort to those of us who are hoping the President will focus on job creation. He's playing on the GOP's turf of debt reduction. But, it's Geithner's turf, too.

If this nation doesn't start creating jobs, Obama and Geithner run the risk of losing theirs. And, as the latest Washington Post/ABC News poll showed us yesterday, the numbers on the economy are really ugly:

By 2 to 1, Americans say the country is pretty seriously on the wrong track, and nine in 10 continue to rate the economy in negative terms. Nearly six in 10 say the economy has not started to recover, regardless of what official statistics may say, and most of those who say it has improved rate the recovery as weak.

The Republicans destroyed the economy. They weren't held accountable and are not getting the blame. It's Obama and Geithner's economy. And, what happens with their economy is going to have a huge impact on the 2012 election. Read the rest of this post...

Former PM of Iceland charged over banking scandal

We can't even get anyone in office charged over a war that was based on lies and is bankrupting the country. Maybe Iceland can teach us a few things about fighting corruption and democracy. Then maybe we can also go after the political class who ushered in the banking crisis. It must be nice to see some accountability.

Geir Haarde was charged with failing to prevent the banking crisis and failing in his prime ministerial duty to manage the fallout. He could face two years in jail if found guilty.

Haarde, 60, who stood down as prime minister in early 2009, said the charges were "political persecution", calling for the case to be thrown out.

"I declare myself innocent of all charges and will do my utmost to prove my innocence," he told the court in Reykjavikon Tuesday.

Read the rest of this post...

Spain rejects $220 million payout for farmers

They have good reason to be upset after the smearing by Germany. It's been pretty obvious for a while that Germany was the source of this problem but Spain and other agricultural countries in Europe have had to pay the price. The farmers should demand more and it should come directly from the German ministry that blamed Spain.

Spain immediately warned the €150m would not be enough. Spain has suffered disproportionately from the economic impact of the outbreak, in part because it grows a significant share of Europe's salad produce but also because blame for the bacteria outbreak at first was attributed to its cucumber crop.

"No, Spain does not see €150m as sufficient," the country's agriculture minister, Rosa Aguilar, said. She was backed by her French counterpart, Bruno Le Maire.

Ciolos then said he would "come back tomorrow with an improved proposal", but warned that Spanish demands for compensation of 90% or even 100% of market price were unrealistic. "We have to bear in mind that this is public money, and we have to account for its use," he said.

Read the rest of this post...

Drought declared in parts of UK

You know it's bad when they are declaring drought there. Over here in France (Paris, at least) we have finally had some rain but it's been limited and with few exceptions, not heavy. In the UK, they believe they had enough moisture over the winter to prevent a worst case scenario summer, but even the winter was dry over here. The Guardian:

Four major regions of the UK will be officially declared drought-stricken this week, in a move that is likely to see special powers introduced over water supplies on farms and businesses across large swaths of the country.

Wales, the south-west, the Midlands and East Anglia will be raised to official drought status, enabling the government and water companies to invoke extra controls over water supplies as a lack of rain afflicts a huge band across the middle of the country.

However, regions that have suffered drought in the past, such as Kent and the south-east, will be spared many of the restrictions as rainfall has been at normal or almost normal levels there in the past six months. Scotland and the north of England are also drought-free.

Read the rest of this post...