Fed Chairmen could have done more

Dean Baker goes over the methods that Alan Greenspan and Ben Bernanke could have, but didn't, use to have popped the $8 trillion housing bubble years before it burst on its own. They also could have taken action against the wave of frauds that were unleashed against ordinary citizens.

Very interestingly, there was  a significant upswing in reported financial crimes starting in 2005.

...the number of SARs for mortgage fraud rose from 23,998 in 2005 to 37,547 to 65,004 to 67,507 in subsequent years.

Nevertheless, the US Chamber of Commerce is very upset by the following:

The FCIC intends to put a treasure trove of documents and testimony on line for review by any prosecutor who might be interested.

The Chamber compares the FCCs proposed action to that of Wikileaks. Of course, Wikileaks can't do much to you if you haven't committed a crime.

America #1?

On a post on Media Matters, the commenters discussed Fox News' thesis that Sarah Palin is wildly popular and that other station just can't stop talking about her. MMFA pulled up a TVEyes report showing, actually, that Fox News mentions her more than anyone else does. Oops!

 

 

One of the right-wingers on the comment thread asked why, in comparison, President Obama gets so much more commentary. A leftie responded that “Well, for starters Obama is the president of the most powerful nation in the world” and Palin is a comparative nobody (Duh!). Another right-winger responded with this link about some Chinese claiming they're #1 and that the US is no longer in the top spot. Reading the piece, the piece throws a bit of cold water on that idea, with the Chinese People's Liberation Army merely claiming that they'll overtake the US in a few decades. But the right-winger asked “What does the American left say?“

 

 

I thought that was a good question and responded that Republican policies certainly weren't helping matters and that developing clean, renewable energy sources would be a really good thing for the US to focus on. But that exchange started me thinking about how the new Republican majority in the House will either help or hinder the ability of the US to remain at #1 in the world.

 

 

Certainly, the foreclosure crisis isn't helping matters.

 

 

A record one million families lost their home to foreclosure last year. Each of these foreclosures has damaged a family, set back a community, and chipped away at an already weak national economy. … as long as families continue to lose their homes by the hundreds of thousands, even the most inspired economic policies will likely fall short.

 

 

It's not just that families are being foreclosed upon and that they're being tossed out on the street, it's that the foreclosures are being carried out by an industry that

 

 

has kicked Americans out of their homes without cause, used falsified and backdated documents to do so, broken into occupied homes and changed the locks, added illegal and unjustified fees, deliberately pushed homeowners current on their payments into foreclosure and basically done whatever they wanted in total violation of the rule of law.

 

 

Regardless of what happens with an exhausted US military, it really doesn't help the cause of US supremacy for US families to be tossed out of their homes for reasons that have nothing to do with real and general shortages. The US economy is very clearly not suffering because there's any shortage of resources or because we clearly must reduce government expenditures. The desire to reduce government expenditures is an entirely arbitrary one and has nothing to do with any real necessities. The accusation by House Republicans, for instance, that the Affordable Care Act “kills jobs,” is simply inaccurate.

 

 

The basic problem that the Republican majority is having at the moment is that governing is hard.

 

 

You have to get your members to agree on a single piece of legislation. You have to make the tough tradeoffs that are the hallmark of governance. You have to explain how you'll do things, rather than merely what you want done.

 

 

[…]

 

 

Democrats did that for health care. They fought ugly fights in their own party over the public option, the financing of the legislation, the levels of coverage in the bill, the way abortion would be treated in the exchanges.

 

 

What's the plan of the Obama Administration to fix the problem with the US economy? Unfortunately, they appear to be fixated on the wrong end of the problem. They appear to think the US is suffering a supply-side problem. It isn't. The US is suffering a demand-side problem, with insufficient sales being cited as the number one difficulty.

 

 

Unfortunately, the US appears to be doing everything possible to exacerbate that problem. House Republicans want to keep non-defense discretionary spending at 2006 levels. Actually doing that

 

 

would result in billions of dollars in cuts to vital and popular programs and agencies like Pell Grants, the FBI, the Coast Guard, the National Institutes of Health and the federal prison system.

 

 

Fortunately, the proposed plan would do no such thing. Speaker Boehner has no idea what he wants to cut, but he wants to start hacking and slashing away at the budget anyway. And, of course, despite all of the demands from the Tea Party wing of the Republican Party, Republicans plan on no cuts for defense.

 

 

Ah, but Republicans are not planning on wasting any precious time in useless hearings on stupid or meaningless subjects. No sir! They're planning on vitally important hearings on subjects critical to Americans!

 

 

Rep. Louie Gohmert (R-TX) joined the growing chorus of Republicans clamoring for hearings to look into the threat of “creeping Sharia law.”

 

 

Yup! The US suffers from the dread threat of Muslim-inspired laws taking over our legal system! Yeah, we're sure to get a handle on those other problems mentioned here any day now. You betcha!

Industrial policy

Reporter Dan Froomkin reminds us that jobs going overseas and companies making foreign investments are not the result of conditions that are in any way "natural" or "inevitable" or pre-ordained. For the US to see domestic companies ignoring employment in Flint, MI in order to invest in Bangladesh, that's because US policy is structured that way. China, notably, is not structured that way. China very deliberately and consciously structures its economy so that manufacturing stays within China's borders.

Yes, businessmen can make more money if they're allowed to invest wherever they please, but why should that be America's priority? What good does it do the nation to have rich businessmen, flush with cash, on one hand and desperately struggling workers and low wages and high unemployment on the other?

What are Republicans going to replace the ACA with?

Fortunately, they don't appear to be able to get anything more than a purely symbolic House vote to repeal the Affordable Care Act. The Senate is not going to join in a repeal and the President will veto it if it gets as far as his desk. Why is that especially fortunate for the country as a whole?

Because the Republican Party, after two years of opposing the ACA, doesn't have a plan to replace it with!  What are they going to do if repeal passes? Wel-l-l...

they have drafted a resolution to accompany the repeal legislation. It lays out broad, long-held GOP health-care goals, but no specifics, and directs four House committees to develop proposals.

Now, remember that Republicans made a huge stink about how stupendously large the ACA bill was. As of August 2009, it was 1000+ pages and over 100 amendments.



In other words, "We're going to replace a really, really big bill with some vague plans and some allegedly good intentions, but after two years of criticism, we're going to have to take several months to come up with a worthwhile replacement."

Update: Wow! What a surprise! [/snark] In  truly [non-] amazing news, it turns out that Speaker Boehner has appointed several committees to revamp health care, at their leisure. Deadlines? Hah! Who needs deadlines? The committees will report their conclusions when they gol-durn jolly well feel like it!

Economic freedom

Apparently, the Heritage Foundation has been teaming up with the Wall Street Journal to produce an index of "economic freedom." If you think that that sounds like a bizarre hybrid of two not-very-similar concepts, join the club! The piece that examines this index concludes that the concept is kind of a mess and yields strange results.

Support for Afghan War crumbling

In December 2009, firedoglake.com made common cause with Grover Norquist by insisting on Rahm Emanuel's resignation as the President's Chief of Staff (Emanuel didn't go anywhere until he voluntarily decided to run for Mayor of Chicago in October 2010), thereby setting a precedent for a left-right alliance.

Norquist hasn't quite duplicated that move as he's not taking his latest position i concert with anyone. Norquist is now opposed to continuing the war in Afghanistan for an eminently reasonable, fiscally conservative reason. It costs too much and there's no obvious benefit to continuing it.

Max Boot is a conservative who feels Norquist has lost it, but the best argument Boot can come up with is: "we are locked in an existential struggle against Islamist extremists," which is, well, really not true. If Afghanistan is lost to the Taliban, nothing really follows. At worst, one more source of oil will be lost, but it's long past time we weaned ourselves off of fossil fuels anyway. Will al Qaeda make a return and again use Afghanistan as a base with which to attack the US? Considering that the success of 9/11 owed a great deal to the dereliction of duty by the Bush Administration, this seems unlikely and there are better ways to prevent a recurrence than to occupy a country that's half-way around the world from us. Boot's comparison of abandoning Afghanistan to the theoretical abandonment of Europe to the Nazis in Wold War II is a pretty hysterical overstatement.

But yes, Norqust is entirely correct in saying that the war in Afghanistan is a huge drain on US resources, which is why conservative disillusion with the war there is only likely to grow.

The really sad thing…

about the discussion on Face the Nation is that everyone seems to have bought into the notion that the deficit is some sort of crisis that the nation must face immediately. It isn't. It's a back-burner issue that should be solved eventually, but which isn't an immediate problem by any stretch of the imagination.

Someone used the metaphor that the deficit is an "all hands on deck" type of issue. I don't object to using a Navy-type metaphor, but I think a far better metaphor would be that the ship's captain needs to sit down with all of his or her officers, they need to hammer out a carefully-considered plan and then the captain should announce to the crew the course the ship will follow for the next few years. A situation of deep indebtedness is not best handled by panicked, frantic, hurried actions, but by adopting a well-thought-out long-range plan.

Our creditors will wait. No one wants to bankrupt the nation, no one wants to push America over the edge because the nation is up against any sort of deadline, there is no such deadline. There was no deadline when G.W. Bush started two wars without paying for them, there was no crisis when G.W. Bush initiated Medicare Part D without finding any way to pay for it, there most certainly was no such deadline when G.W. Bush gave millionaires and billionaires massive tax cuts without, again, finding any way to pay for them.

Marginal tax rates (everything you make up to a specified cut-off is taxed at one rate, everything above that specified level is taxed at another rate) used to be 91%. John F. Kennedy lowered them to 77% and the economy improved. Problem is, every further reduction in the tax rate has run into the problem of marginal utility. Every additional slicing of the tax rates since Kennedy's initial cut does less and less good. The Bush cuts did no discernible good whatsoever. The US can and should return the top marginal tax rate to Lyndon Johnson's rate of 70%. We have an extremely serious problem of inequality between the very wealthiest and regular citizens anyway. With that money, we can get the economy moving again and can start working on clean, renewable energy, getting millions of citizens hired.