Kewl news on Obama economic advisors

Not only is Paul Krugman on the team of people advising the President-elect, but Joseph Stiglitz was asked to be part of Obama's Administration (Stiglitz declined, saying "I've gone beyond the age where I would want to be in Washington full time"), meaning that Obama takes the advice of both men quite seriously.
Krugman had to correct the NY Times for saying that no one saw the housing crisis coming.  He did, so did Dean Baker and the blog Calculated Risk. As the Economist puts it, Krugman "was, in many ways, the first economics blogger." Stiglitz wrote about the cost of the Iraq War ultimately costing the US about $3 Trillion.

Why can’t Congress limit executive pay?

Kind of amazing how things actually work out in real life as opposed to how they're presented in the newspapers:

[Washington] Post readers may ask that question given that the Post told them that: "Congress wanted to guarantee that the $700 billion financial bailout would limit the eye-popping pay of Wall Street executives."

The rest of the article explains how the bailout legislation, as approved by Congress, is not likely to impose any serious limits on executive pay. So, Congress was apparently unable to do what it wanted.

The author then notes how Congress is usually able to make legislation do what it wants, but gee, it just seems unable to limit executive pay! Not that such an inability has anything to do with campaign contributions! No, no, no, no, that couldn't be the reason!

The “higher taxes” bugaboo

We have here a fellow who's very highly motivated to find the "pulse" of the public, to seek out what concerns regular voters.

Saul Anuzis, the Michigan GOP chair who's running for chairman of the Republican National Committee, has issued a 24-page "Blueprint for a GOP Comeback" to RNC members that details his agenda and vision for returning the party to political power.
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He goes on to say that the party must "stand proudly" on its core principles. "When Democrats try to raise taxes, we’ll mobilize the American people to stop them. When the Democrat spending spree begins, we’ll end it...
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(But if these GOP ideas are winners, then why do 70% in a new Washington Post/ABC poll say that Obama should fulfill his campaign promise...
and why did just 3% say in the latest NBC/WSJ poll that taxes are the most important economic issue facing the country?)

In other words, the old saw about the Republicans "protecting" the American public from (*gasp!* *shriek!!*) higher taxes!!1!!*! is just one of the old talking points that liberals can safely disregard.

Joseph Stiglitz - Five Errors

Joseph Stiglitz identifies "five key mistakes—under Reagan, Clinton, and Bush II—and one national delusion."

The Five Errors are:

1. Firing the sensible pro-regulation Paul Volcker and hiring the Ayn Rand disciple Alan Greenspan.

2. Repealing the Glass-Steagall Act in 1999.

3. The (younger) Bush tax cuts.

4. Screwing up accountability for corporations.

5. Bungling the response to the belated realization that the economy was in "deep doo-doo."

Major, overall problem: Too much faith in free markets.

Concise explanation of energy policy

Dean Baker explains how it works.

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Note: I deleted people's ability to log on freely, as spammers were getting in and leaving all sorts of junk on the blog.

Rich Gardner

The utter waste of “Star Wars”

Since I wrote a paper on Star Wars/SDI/Missile Defense/etc. back in the late 1980s, it has been my belief that President Reagan merely restarted in 1983 what had been shut down by the 1972 Anti-Ballistic Missile Treaty. Essentially, the defense contractors who had been working on ABM technology in 1972 continued to work "on spec" until what was roughly the same program was started up again in 1983. So when we speak of Missile Defense, we're really talking about a program that began during the Eisenhower Administration, i.e., about a 50+ year-old program.
Would the program ever have produce worthwhile results? I think so. During the October 1986 Reykjavík, Iceland Summit, Reagan and the General Secretary of the CPSU, Mikhail Gorbachev appeared about to make a deal to eliminate nuclear weapons entirely. The sticking point apparently, was that the US had to surrender Missile Defense. Unfortunately, as with G.W. Bush in 2003 with Iran, Reagan proved unable to recognize when the deal was as good as it was ever going to get and to cash in his chips while the cashing in was good.
The Center for Arms Control and Non-Proliferation estimates that the US has spent about $60 billion on this worthless boondoggle since the Bush Administration took office. The program has failed test after test and shows no signs of ever passing those tests within the next few decades. Remember, this is a 50+ year-old program!!!! If there's no apparent success after all this time, we're not just talking about a few wrinkles left to be ironed out, we're talking about major, fundamental flaws. My paper in the late 1980s compared the 1943 bombing of Schweinfurt, Germany with the Missile Defense program of the time. The media was in the habit of speaking of a 99% success rate in being able to shoot missiles down. My example and comparisons showed that a 5% or 10% success rate was far more likely.
Also, the program has produced completely unnecessary tensions with Russia.
It's time to shut this program down. Permanently.

Update: The Weekly Standard composed a plea to our President-Elect to keep "Star Wars" going. I considered that to be a silly thing to do and wrote a lengthy piece in response.

The Housing Crisis

Fannie Mae & Freddie Mac are to blame for the housing crisis, say Republican conservatives. Not true, says McClatchey Newspapers:

...federal housing data reveal that the charges [against Fannie and Freddie] aren’t true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
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Dean Baker, the co-director of the Center for Economic and Policy Research, noted that “while Fannie and Freddie, as huge actors in the mortgage market, certainly contributed to the bubble, it is absurd to point to them as principle culprits.” He pointed out that “their market share actually fell as the bubble grew to ever more dangerous levels, dropping from 50.1 percent in 2002 to just 34.8 percent at the peak of the bubble in 2006.”

A Republican Senator, desperate to avoid blame for the economy, claims that the President doesn't control anything. Bush is just a helpless victim of the economy, which is completely independent of anything Bush does.

An examination of a number of myths about the housing crisis.