JPMorgan Chase CEO: Journalists make too much money

Exactly, Jamie! Every journalist that I have ever seen makes hundreds of thousands of dollars per year, has been bailed out by US taxpayers, continues to receive easy money courtesy of the Federal Reserve and of course, caused the recession that caused millions of Americans to lose their houses and jobs. It's exactly the same as the newspaper industry. Maybe Dimon wants to talk about the government handouts, also known as quantitative easing? The rest of the industry probably wishes that he would just shut his big mouth and stop winding up Americans who are fed up with the selfish money grabbers of Wall Street like Dimon. Bloomberg:

JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon assailed the pay practices of the newspaper industry today as he sought to deflect criticism of bank pay as viewed through the compensation ratio. “Obviously our business, in investment banking in particular, all of our businesses, we have high capital and high human capital,” Dimon said today at a presentation in New York, where the bank is based. “Newspapers -- I went and got this one day just for fun -- 42 percent payout ratio, which I just think is just damned outrageous.”

Just for fun, how about we let scumbags like Dimon lose everything next time they ruin the US economy. Just for laughs, of course. Ha, ha, ha. Read the rest of this post...

Romney wins AZ, Michigan

@ChrisHarrisKS: Congrats @MittRomney!!! You beat @RickSantorum bt 4 points after leading him by 30 points a few months ago.

There's also a lot of talk about Santorum's comments about JFK - that JFK's speech about the separation of church and state - made Santorum vomit.  Apparently, Santorum made Catholics in Michigan vomit.

CBS's exit polls show 37 percent of Catholic voters in Michigan supporting the Pennsylvania Republican and 43 percent supporting the Massachusetts Republican. Newt Gingrich and Ron Paul won 8 percent and 9 percent respectively.

Meanwhile, CNN exit polls in Arizona show Romney besting Santorum among Catholic voters by a margin of 41 percent to 35 percent.

And maybe, just maybe, the fact that Santorum stuck his neck out on this contraceptive insurance issue, in defense of the Catholic bishops, when regular Catholics don't tend to agree with the bishops (and thus Santorum) on this issue, or much of any issue. Santorum isn't a Catholic. He's a fringe Catholic, an opus dei Catholic (Santorum denies being a member, but he supports them and sent his kids to an opus dei school). There's a difference. And the polls in MI and AZ show that. Read the rest of this post...

Mexico, Colombia & Guatemala discuss drug legalization

Finally, some sensible discussions about marijuana by national governments in the region. The US military-industrial complex loves war but it's a bad investment for everyone else. The US can't afford this drug war and our neighbors to the south have even fewer resources to waste on this phony war. How many more people have to die and how many billion more needs to be spent until Washington gets it? The Atlantic:

Since Mexico declared its own war against drugs and drug cartels in 2006, over 50,000 civilians, police, journalists, judges, and soldiers have died. Several cartel kingpins have been arrested or killed, but organized crime is as potent as ever, and there's no indication of a significant drop in the volume of narcotics flowing into the United States. And the Mexican state is suffering mightily for its effort. Despite years of training and hundreds of millions of dollars in police and military modernization and professionalization, there are still episodes like Tuesday's jail break in Nuevo Laredo, where prison officials appear to have helped Zetas cartel gunmen kill 44 inmates -- all members of a rival cartel -- and help 30 Zetas escape. It's depressing. In Guatemala, the drug war looks even worse. The Guatemalan national budget for public security is $420 million and its military budget is $160 million. The value of the narcotics smuggled through Guatemala each year is in the range of $40 to 50 billion -- about equal to the national GDP -- and that does not include the money made from smuggling weapons, people, and other contraband. In just three years, it appears that the Sinaloa and the Zetas Mexican cartels have come to control as much as 40 percent of the country's territory. They grow poppy, process cocaine and methamphetamines, and run training camps for their new recruits, who include members of Guatemala's elite special forces unit. Guatemala and other Central American states are understandable worried their drug wars will come to resemble Mexico's, but with far fewer national resources to support the fight, much weaker police and military forces, and far less help from the United States. In 2011, the U.S. gave $180 million to Mexico for military and police assistance, but only $16 million to Guatemala and around $6 million each to Honduras and El Salvador.

Read the rest of this post...

French Socialist candidate for prez call for 75% income tax

Even for France, this may scare off too many voters in what may turn out to be a close election. The current income top tax rate is 40% in France, though there is also the "wealth tax" that can add a few points for wealth (house, possessions) above €790,000. There are also the usual sales taxes (VAT is around 20%) plus social taxes (retirement, health insurance) that can add up to another 12% at the high end.

It's possible to enact such tax increases but unlike the US where citizens are taxed (or at least must report their income, then pay if above an annual amount) French citizens simply have to leave the country. Over the years, many have done this, including celebrities and bankers. It's easy enough to pass such a tax increase but if nobody is there to fund pay it, it's meaningless. It would have made a lot more sense to propose an increases that targeted the super-rich, that yes, do indeed exist in France.

If the Socialists want to regain the presidency, they're going to need to be more thoughtful. The current president is a very beatable candidate but if they go off message, something that seems to be the case here, they will struggle. Most people understand that the existing model needs to be modernized and the super-rich are lumped in with the rich, but this surprise may require additional thought. Repealing the Sarkozy tax cuts would have been fine and acceptable for many people. Raising taxes to help the country during a tough economic time would also be sellable. But throwing out a surprise increase of 35% across the board for everyone at the high end is poor planning.

Maybe Hollande was only referring to the super-rich, but if that was the case, he needed to get his messaging clear before the announcement. This is no longer the blowout election that was predicted last year when Strauss-Kahn was the leader of the left. BBC News:

The Socialist favourite in France's presidential election, Francois Hollande, has said top earners should pay 75% of their income in tax. "Above 1m euros [£847,000; $1.3m], the tax rate should be 75% because it's not possible to have that level of income," he said. Speaking on prime time TV, he promised that if elected, he would undo tax breaks enacted by Nicolas Sarkozy.

Read the rest of this post...

Olympia Snowe is retiring

Big news from Maine today:

Sen. Olympia Snowe, R-Maine, announced this afternoon that she has decided not to run for re-election after 33 years in Congress.

In a statement issued by her campaign, Snowe said that both she and her husband, former Gov. John R. McKernan, are in good health and she is certain she would have won re-election.

Snowe, however, cited frustation over "an atmosphere of polarization and ‘my way or the highway’ ideologies has become pervasive in campaigns and in our governing institutions."

This can only be good for Democrats. I imagine Congresswoman Chellie Pingree is taking a look at this opening. I hope she is.

As a Mainer, I've followed Snowe's career for years. I never got the fascination people had with her. She's had a long career in public service -- and has had taxpayer funded benefits for all those years, too. When she and her new husband, then-Governor, John McKernan, got married back in 1989, they used her campaign funds to pay for the wedding reception. Just one of the perks of being an elected official.

And, an update. Let's not forget this: Company run by ex-GOP Gov. of ME (husband of Olympia Snowe), facing lawsuit backed by DOJ

Another update @ 6:04 PM, via twitter from Amanda Terkel:

Chellie Pingree calls upcoming election "critical." Says in coming days, she'll "consider how I can best serve the people of Maine."

Read the rest of this post...

Congress approves funding for online surveillance program, Facebook (humor)

Just in case people don't get it, it's The Onion. Funny, but so true. Read the rest of this post...

Krugman's new book—"End This Depression Now"

Just a short note to let you know about Paul Krugman's new book, soon to be released.


From the Amazon blurb (my emphasis):

The Great Recession is more than four years old—and counting. Yet, as Paul Krugman points out in this powerful volley, "Nations rich in resources, talent, and knowledge—all the ingredients for prosperity and a decent standard of living for all—remain in a state of intense pain."

How bad have things gotten? How did we get stuck in what now can only be called a depression? And above all, how do we free ourselves? Krugman pursues these questions with his characteristic lucidity and insight. He has a powerful message for anyone who has suffered over these past four years—a quick, strong recovery is just one step away, if our leaders can find the "intellectual clarity and political will" to end this depression now.

One thing to note — in a remarkable change for Mr. Krugman, this is an activist book, not just an intellectual study or analysis. I'm sure there's much analysis between its covers, but the title tells it all.

In his recent Playboy interview, the Professor said:

I think the main reason you should be angry about it is that it’s gratuitous. This doesn’t have to be happening. We actually have the tools to make most of this go away. If we could throw aside the political prejudices and bad ideas that are crippling us, in 18 months we could be back to something that feels like a much better economy.

Needless to say, but I'll say it anyway — both parties are responsible.

Krugman is calling for action now. It's a brave activist stance for a professor. It will be interesting to see the response.

GP Read the rest of this post...

Court documents show deeper involvement in hacking at Murdoch paper

Oh my, this is not looking very good for Rupert Murdoch's team. Each day reveals something deeper and larger than the day before. When there is such an extensive culture of corruption among a team, you have to start looking at the leadership. The Guardian:

Six journalists at the News of the World were involved in instructing private investigator Glenn Mulcaire to hack phones of celebrities and others, it has been alleged in documents released by the high court to the Guardian. Paperwork submitted on behalf of phone-hacking victims by lawyers shed new light on the alleged extent of knowledge within the newspaper about the activities of Mulcaire, the £2,000-a-week investigator at the centre of the scandal. It has been alleged in these court documents that there was "a conspiracy" between Mulcaire and "senior executives" including "Clive Goodman" and five other journalists, known as A, B, C, D, and E, whereby he would obtain information on their behalf using "electronic intelligence and eavesdropping".

Read the rest of this post...

Romney and Santorum neck and neck in Michigan

Keep in mind, Michigan is Romney's ancestral home (well, other than Mexico).  So Romney should not be having this hard of a time winning.  Also, I'd heard the other day that a lot of the early-voting went Romney's way, so that Santorum needs more than "breaking even" today in order to win the state tonight.  Ah ok, it was PPP, our favorite pollsters:

Even though things seem to be moving back in Santorum's direction, there's one big reason to think that Romney will still come out as the winner tomorrow night. 18% of the electorate has already cast its ballots and with those voters in the bank Romney has a 56-29 advantage. Santorum's likely to win election day voters, but he''s going to have to do it by a wide margin to erase the lead Romney has stored. We see Santorum with a 40-33 advantage among those who have yet to vote.

I'm still not sure I like this early voting thing. I get that it helps more people vote. But elections aren't about voting a week or a month early. They're about voting on election day. Lots of polls have one guy or another winning "today." But it's election day that matters. I'm just not so sure I like this idea of election day being a fluid thing. I'm all for making it easier to vote, since apparently we're so lazy, but we need to find a way to make it easier THAT SAME DAY. Read the rest of this post...

Colorado to vote on legalizing marijuana this year

Can anyone provide a reason why marijuana shouldn't be legalized? Just because the government has been blowing billions of dollars fighting the so-called war on drugs doesn't mean that the war has been the right thing to do. It's not that hard to admit it was a mistake and move on.

Residents of Colorado will have the opportunity to vote in favor of ending marijuana prohibition this November. Today, the “Regulate Marijuana Like Alcohol Act” was approved for the ballot by Colorado Secretary of State Scott Gessler. With this confirmation, Colorado now joins Washington as one of two states where measures specific to legalizing cannabis will appear on the electoral ballot.

Backers of the initiative had previously turned in over 160,000 signatures. However, the Secretary of State’s office on February 3 responded that petitioners still needed an additional 2,500 valid signatures from registered voters to place the initiative on the ballot. On February 17th, the Campaign to Regulate Marijuana Like Alcohol submitted an additional 14,000 signatures, well in excess of what was required to meet that threshold. Today’s approval from the state cements their placement on this fall’s ballot.

The Colorado initiative seeks to allow for the limited possession and cultivation of cannabis by adults age 21 and over. The measure would further amend state law to establish regulations governing the commercial production and distribution of marijuana by licensed retailers.

The measure is supported by a broad coalition of reform organizations, including NORML, the American Civil Liberties Union of Colorado, SAFER, Sensible Colorado, Law Enforcement Against Prohibition (LEAP), Students for Sensible Drug Policy (SSDP), the Drug Policy Alliance, and the Marijuana Policy Project.

Read the rest of this post...

Democrats for Rick Santorum?

That's what the Santorum robocalls are all about. Why wouldn't a Democrat want to support him in the primaries? Romney won't be a pushover in November for a lot of reasons. One big reason is the lack of real difference between the Romney voting record and Obama's record. Santorum on the other hand would be the new 1964 Goldwater campaign on steroids.

The campaign has launched telephone robocalls throughout the state slamming rival Mitt Romney for opposing the auto industry bailout in late 2008 and early 2009, and urging Democrats to show up for Tuesday’s Republican primary and cast ballots for Santorum. “Michigan Democrats can vote in the Republican primary on Tuesday. Why is it so important?” the voice on the call says. “Romney supported the bailouts for his Wall Street, billionaire buddies, but opposed the auto bailouts. That was a slap in the face to every Michigan worker, and we’re not going to let Romney get away with it.” The call urges listeners to “send a loud message” to Romney by voting for Santorum, even though Santorum, too, opposed the auto industry bailout. It ends with the line: “This call is supported by hard-working Democratic men and women and paid for by Rick Santorum for president.”

Read the rest of this post...

There are three Europe stories — the Republican story, the German story, and the truth

In his latest column and a related blog post, Paul Krugman revisits the Europe problem, which turns out to be two problems.

The first problem is, How do the struggling European economies — the GIPSIs, meaning Greece, Ireland, Portugal, Spain, and Italy — right themselves economically?

The second problem is, How (and why) do people persistently misstate and misunderstand the first problem?

Krugman looks at the second problem first. He sees three stories (explanations) of what went wrong in Europe. From the blog post (my emphases):

There are basically three stories about the euro crisis in wide circulation: the Republican story, the German story, and the truth.

The Republican story is that it’s all about excessive welfare states ... [and] the German story is that it’s about fiscal profligacy, running excessive deficits.

Why is the first the "Republican" story (more about those quotes in a second)? Because they love to tell that story, says the Professor in his column:

This story is, by the way, a perennial right-wing favorite: back in 1991, when Sweden was suffering from a banking crisis brought on by deregulation (sound familiar?), the Cato Institute published a triumphant report on how this proved the failure of the whole welfare state model.

The story is false, as this chart shows (click to open in a new tab). The red bars are the GIPSI states, the rest are in blue. Tall bars mean higher "welfare state" spending. Note that of the GIPSIs, only Italy is in the top six of welfare spenders, behind four rather healthy economies.

So much for "Republicans." What about the German story?

[T]he German story ... is that it’s all about fiscal irresponsibility. This story seems to fit Greece, but nobody else. Italy ran deficits in the years before the crisis, but they were only slightly larger than Germany’s (Italy’s large debt is a legacy from irresponsible policies many years ago). Portugal’s deficits were significantly smaller, while Spain and Ireland actually ran surpluses.

And the truth?

[T]he creation of the euro fostered a false sense of security among private investors, unleashing huge, unsustainable flows of capital into nations all around Europe’s periphery. As a consequence of these inflows, costs and prices rose, manufacturing became uncompetitive, and nations that had roughly balanced trade in 1999 began running large trade deficits instead. Then the music stopped.

Where did the GIPSIs (and the U.S.) go wrong?

The best way to think about that last quote is as a simple supply and demand situation (phrases like "capital inflows" make the non-economist's brain hurt). When there's too much cash chasing not enough goods and services, prices simply go up. How can they not?

"Capital inflows" is economist-speak for "cash coming into a country." Investors dumped a lot of eager money into the peripheral countries, more money than the countries could absorb.

The eagerness of investors created a sellers' market for suppliers of goods and services (like manufacturing and labor). Sellers charged what the market would bear (why shouldn't they?) and the peripheral economies experience a bubble-like boom. The money flowed like wine (so to speak).

The same thing happened in the U.S. with the housing market. Take, for example, the temporary boom in towns like Hemet, California. In the days when "no one could lose money on housing," little Hemet was being build up as fast as money could be found to do it.

Why? Hemet was considered "driving close" (under an hour and a half) to the city of Riverside, a place with actual jobs, and houses in Hemet were cheap compared to those in Riverside. Buyers traded driving time for home prices, on the assumption that housing would never go down (and that gas would not go very far up).

Investors were eager to build in Hemet because buyers were eager to buy. Add in the illusion of safety, and the economy of sleepy little Hemet exploded — till it crashed.

The "illusion of safety" that did so much to wreck the U.S. economy also wrecked the peripheral economies of Europe. In the U.S., that illusion was supplied by the supposedly bullet-proof housing market — and by the ratings agencies that "blessed" with AAA ratings all of the mortgage-based derivative products the banks were buying and selling.

In Europe, the euro supplied the illusion. The common currency made everything magically safe. As long as France and Germany were strong, the euro would be strong everywhere. Investment in Portugal, Spain, and other peripherals was "blessed" by German strength, and investors in the GIPSI countries lined up at the door.

"Then the music stopped"

What happened next in Europe is the same as what happened here. After the crash, the elites (Our Betters) had only one bottom line. Make sure no banker loses money. Which explains Krugman's "Republican" and German stories perfectly.

■ "Republican" story — If it's the people's fault (for being lazy and spendy), then it's right to punish them by taking away their welfare benefits (and give it to the banks to make good their derivative-based losses).

■ German story — If it's the GIPSI's fault (for being "fiscally irresponsible"), then it's right to take the losses out of their hide (and give it to the banks to cover their now-vulnerable investments).

What's the answer to the first question above — "How do the GIPSIs right themselves?" They don't. They wait until the crisis is so great that leaving the euro won't make it worse, then they leave the euro, one by one. From the blog post (the article says roughly the same thing):

[I]f you’re running a peripheral nation, and the troika [European Commission, IMF, World Bank] demands austerity, you have no choice except the nuclear option of leaving the euro, coming soon to a Balkan nation near you.

Count on it.

Why the scare quotes around "Republican"?

Those quotes are mine alone. Krugman calls his anti-welfare story Republican (no quotes) because the state of the Krugman is Dem-friendly in these articles.

Yes, the Republicans hate welfare, but they're not alone. The fact is that all of Our Betters, including the NeoLiberals, the Obamas and the Clintons, the Leahys and the Schumers, think like the so-called "Republicans."

It's not a Republican story, it's a Village story, an elite story, the DC cocktail story they all are telling.

Bill Clinton got caught here agreeing with Paul Ryan about the safety net.



By "paralysis" Clinton means "failure to cut the safety net." He might lie to you (remember all those NAFTA jobs?) but not to Paul Ryan. Village-on-Village violence is beyond the pale.

This is, unfortunately, the one time you can trust Bill Clinton. (Does the phrase "Tea Party the Democrats" suggest anything to you now?)

GP Read the rest of this post...

What does ObamaCare actually do? Hell if I know.

I was having lunch with a friend yesterday. He's a whopping young-30-something, and was telling me how Aetna just turned him down for health insurance because of his "pre-existing conditions." Not wanting to pry (did he have cancer or HIV, I wondered?), but feeling there was a story here, I risked prying just a little. Turns out he has a bad shoulder, exczema, allergies, and a fourth equally benign thing I can't now recall.

How can this be, I thought - doesn't ObamaCare get rid of pre-existing conditions?

I dunno. Do you?

I don't know a single thing that the President's health care reform actually does, did or will do. It does something with pre-existing conditions, some day, somewhere. And some day there will be those exchanges, or something, where only a few of us can buy insurance or something, and I guess it will be cheaper (though I wouldn't dare touch an exchange, and leave my current insurance, until I know for sure they're not going to repealed - otherwise, good luck going back to my old insurance).

Oh, there is one thing the law does, I now know - and this is only because my CareFirst BCBS premium went down 10% this year.  I learned that there's a 80% floor on how much of your premium needs to be spent on actually health care provision (or something like that). But I only learned the details on that when my BCBS premium went down and I tried to find out why (BCBS won't admit why, though they told a reader it's because of ObamaCare).

What does health care reform actually do? I'll bet most of you have no idea, other than what I listed above, but even then you're murky on the details.

I wrote, during the health care debate, that the Obama administration needed to explain to people how health care reform was going to decrease their premiums and increase their benefits. Period. It seems it may have caused my premiums to go down, but no one can confirm it. (Had this been the GOP law that may have caused some premiums to go down, they'd already been claiming credit.)

With all that in mind, I'm not surprised that 47% of the American people think health care reform should be repealed. They have no idea what's in it. Remember this Newsweek poll from two years ago?

When asked about Obama's plan (without being given any details about what the legislation includes), 49 percent opposed it and 40 percent were in favor. But after hearing key features of the legislation described, 48 percent supported the plan and 43 percent remained opposed.

The NEWSWEEK Poll asked respondents about eight health-care-reform provisions that Obama and many Democrats in Congress have generally supported. It found that the majority of Americans supported five of those provisions, three by particularly large margins. Eighty-one percent agreed with the creation of a new insurance marketplace, the exchange, for individual subscribers to compare plans and buy insurance at a competitive rate. Seventy-six percent thought health insurers should be required to cover anyone who applies, including those with preexisting conditions; and 75 percent agreed with requiring most businesses to offer health insurance to their employees, with incentives for small-business owners to do so.

People like health care reform when you don't call it health care reform.  Sigh.

We hear from the GOP presidential candidates, practically every day, about how bad ObamaCare is. They claim it's going to cost a trillion dollars. That too is a lie. In fact, not only is health care reform paid for, repealing health care reform will up the deficit by $230bn over the next ten years, according to CBO. But you don't hear the Republicans (nor the media) talking about that little inconvenient fact.

I realize the President wants to focus on jobs for his re-election, but at what expense? I don't think he can afford, we can afford, this ongoing unwillingness to defend the work he's already done. If this was his signature goal and achievement of his first term, he ought to own it. Or people will continue to believe the Republicans when they say that it was all a big socialist waste of a trillion bucks, a typical Democrats spending spree on nothing (cf. the GOP lie that the stimulus didn't work, which the public also believes).

At some point, Democrats have to realize that the message wars matter, and you need to start fighting them now if you want expect to win later. Read the rest of this post...