Great Recession

There is no better concise picture of the Great Recession than this graph from the Calculated Risk blog:

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This clearly shows that all previous post World War II recessions which had fully recovered employment by 4 years after the start of the recession. Even the pathetic "recovery" brought about Bush's two tax cuts to "inspire" entrepreneurial spirit got employment back to pre-recession levels in four years. But the recession is different. This is a credit crunch just like the Great Depression.

Obama's "stimulus" was pathetically inadequate with one-third of the money going to "tax cuts" which clearly are very poor stimulants (see the four year delay in recovery due to Bush's tax cut strategy). The other two-thirds was money that truly stimluated but was about three to four times too small for the size of the real problem. But Obama spent all of 2009 and 2010 assuring everybody that his stimulus was a Goldilocks "just right" amount. Then in 2011 Obama compounded his mistake by focusing on "deficits" (read austerity budgets) instead of stimulation to get the economy to come back.

The US economy is in a complete mess because both major political parties are more interested in catering to corporate interest than they are in the people and the real economy. They both spin masterful stories about how their policies are "effective" when it is utterly evident that they fail. Of course the Republicans are grievously wrong-headed. The Democrats at least pretend to cater to the interests of the 99%, but in reality they are just junior partners with the Republicans in acting as the minions of Wall Street, big corporations, and the ultra-rich. Tragic.

Take a Tour Through Airport Security Theatre

Here is a bit from an article in Vanity Fair in which the reporter takes a walk through Reagan National Airport with security critic Bruce Schneier who points out the security weaknesses and the incredible expense to achieve this "security":

Since 9/11, the U.S. has spent more than $1.1 trillion on homeland security.

To a large number of security analysts, this expenditure makes no sense. The vast cost is not worth the infinitesimal benefit. Not only has the actual threat from terror been exaggerated, they say, but the great bulk of the post-9/11 measures to contain it are little more than what Schneier mocks as “security theater”: actions that accomplish nothing but are designed to make the government look like it is on the job. In fact, the continuing expenditure on security may actually have made the United States less safe.

...

Two months after 9/11, the Bush administration created the Transportation Security Agency, ordering it to hire and train enough security officers to staff the nation’s 450 airports within a year. Six months after that, the government vastly expanded the federal sky-marshal program, sending thousands of armed lawmen to ride planes undercover. Meanwhile, the T.S.A. steadily ratcheted up the existing baggage-screening program, banning cigarette lighters from carry-on bags, then all liquids (even, briefly, breast milk from some nursing mothers). Signs were put up in airports warning passengers about specifically prohibited items: snow globes, printer cartridges. A color-coded alert system was devised; the nation was placed on “orange alert” for five consecutive years. Washington assembled a list of potential terror targets that soon swelled to 80,000 places, including local libraries and miniature-golf courses. Accompanying the target list was a watch list of potential suspects that had grown to 1.1 million names by 2008, the most recent date for which figures are available. Last year, the Department of Homeland Security, which absorbed the T.S.A. in 2003, began deploying full-body scanners, which peer through clothing to produce nearly nude images of air passengers.

Bruce Schneier’s exasperation is informed by his job-related need to spend a lot of time in Airportland. He has 10 million frequent-flier miles and takes about 170 flights a year; his average speed, he has calculated, is 32 miles and hour. “The only useful airport security measures since 9/11,” he says, “were locking and reinforcing the cockpit doors, so terrorists can’t break in, positive baggage matching”—ensuring that people can’t put luggage on planes, and then not board them —“and teaching the passengers to fight back. The rest is security theater.”

...

Terrorists will try to hit the United States again, Schneier says. One has to assume this. Terrorists can so easily switch from target to target and weapon to weapon that focusing on preventing any one type of attack is foolish. Even if the T.S.A. were somehow to make airports impregnable, this would simply divert terrorists to other, less heavily defended targets—shopping malls, movie theaters, churches, stadiums, museums. The terrorist’s goal isn’t to attack an airplane specifically; it’s to sow terror generally. “You spend billions of dollars on the airports and force the terrorists to spend an extra $30 on gas to drive to a hotel or casino and attack it,” Schneier says. “Congratulations!”

What the government should be doing is focusing on the terrorists when they are planning their plots. “That’s how the British caught the liquid bombers,” Schneier says. “They never got anywhere near the plane. That’s what you want—not catching them at the last minute as they try to board the flight.”

To walk through an airport with Bruce Schneier is to see how much change a trillion dollars can wreak. So much inconvenience for so little benefit at such a staggering cost. And directed against a threat that, by any objective standard, is quite modest. Since 9/11, Islamic terrorists have killed just 17 people on American soil, all but four of them victims of an army major turned fanatic who shot fellow soldiers in a rampage at Fort Hood. (The other four were killed by lone-wolf assassins.) During that same period, 200 times as many Americans drowned in their bathtubs. Still more were killed by driving their cars into deer. The best memorial to the victims of 9/11, in Schneier’s view, would be to forget most of the “lessons” of 9/11. “It’s infuriating,” he said, waving my fraudulent boarding pass to indicate the mass of waiting passengers, the humming X-ray machines, the piles of unloaded computers and cell phones on the conveyor belts, the uniformed T.S.A. officers instructing people to remove their shoes and take loose change from their pockets. “We’re spending billions upon billions of dollars doing this—and it is almost entirely pointless. Not only is it not done right, but even if it was done right it would be the wrong thing to do.”

The article is well worth reading. Go read the whole thing.

Speaking the Truth

Here is a post by Dean Baker on his Beat The Press blog:

President Obama Wants Credit for Avoiding a Great Depression: Where Is the Ridicule?

In its top of the hour news segment NPR reported that President Obama hoped that voters would give him credit for avoiding a second Great Depression. If this is an accurate representation of what President Obama said then it should have devoted a segment to economists ridiculing the president for trying to set an unbelievably low bar for measuring the success of his economic policy.

The first Great Depression was the result of a decade of inadequate policy responses. The massive spending associated with World War II that eventually got us out of the Great Depression could have been undertaken a decade sooner, if there had been political will.

There was nothing about the financial crisis at the beginning of President Obama's term that could have condemned the country to decade of double-digit unemployment. This only could have happened if Congress failed to respond adequately to a financial collapse.

The above should be supplemented by reading Paul Krugman's comments on the fate of democracy given the current depression.

Krugman Calls the Depression

Here is a bit from an excellent op-ed by Paul Krugman in the NY Times:

It’s time to start calling the current situation what it is: a depression. True, it’s not a full replay of the Great Depression, but that’s cold comfort. Unemployment in both America and Europe remains disastrously high. Leaders and institutions are increasingly discredited. And democratic values are under siege.

On that last point, I am not being alarmist. On the political as on the economic front it’s important not to fall into the “not as bad as” trap. High unemployment isn’t O.K. just because it hasn’t hit 1933 levels; ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.

Let’s talk, in particular, about what’s happening in Europe — not because all is well with America, but because the gravity of European political developments isn’t widely understood.

Go read the whole article. It will give you a picture of Europe that you are not getting from the mainstream media.

The 1930s should be an object lesson for those who think they can write off 10% or 20% of the population during a financial downturn. Letting the government turn its back and refuse to aid these people and, worse, to refuse to stimulate the economy into a robust recovery condemns that country to a rise of right wing demagogues.

Krugman is sending out a clarion call for a change of course by democracies to save themselves from their own funeral:

Nobody familiar with Europe’s history can look at this resurgence of hostility without feeling a shiver. Yet there may be worse things happening.

Right-wing populists are on the rise from Austria, where the Freedom Party (whose leader used to have neo-Nazi connections) runs neck-and-neck in the polls with established parties, to Finland, where the anti-immigrant True Finns party had a strong electoral showing last April. And these are rich countries whose economies have held up fairly well. Matters look even more ominous in the poorer nations of Central and Eastern Europe.

Last month the European Bank for Reconstruction and Development documented a sharp drop in public support for democracy in the “new E.U.” countries, the nations that joined the European Union after the fall of the Berlin Wall. Not surprisingly, the loss of faith in democracy has been greatest in the countries that suffered the deepest economic slumps.

And in at least one nation, Hungary, democratic institutions are being undermined as we speak.

One of Hungary’s major parties, Jobbik, is a nightmare out of the 1930s: it’s anti-Roma (Gypsy), it’s anti-Semitic, and it even had a paramilitary arm. But the immediate threat comes from Fidesz, the governing center-right party.

...

Kim Lane Scheppele, who is the director of Princeton’s Law and Public Affairs program — and has been following the Hungarian situation closely — tells me that Fidesz is relying on overlapping measures to suppress opposition. A proposed election law creates gerrymandered districts designed to make it almost impossible for other parties to form a government; judicial independence has been compromised, and the courts packed with party loyalists; state-run media have been converted into party organs, and there’s a crackdown on independent media; and a proposed constitutional addendum would effectively criminalize the leading leftist party.

Taken together, all this amounts to the re-establishment of authoritarian rule, under a paper-thin veneer of democracy, in the heart of Europe. And it’s a sample of what may happen much more widely if this depression continues.

...

The European Union missed the chance to head off the power grab at the start — in part because the new Constitution was rammed through while Hungary held the Union’s rotating presidency. It will be much harder to reverse the slide now. Yet Europe’s leaders had better try, or risk losing everything they stand for.

And they also need to rethink their failing economic policies. If they don’t, there will be more backsliding on democracy — and the breakup of the euro may be the least of their worries.

I thought political leaders were "too smart" to let another depression occur. I was wrong. I didn't even consider that the democracies would reprise the horror of the 1930s and allow fascist dictatorships to rise yet again. But it looks like I was far too naive. The idiocy of political leaders plumbs a depth that I stupidly just couldn't believe was possible. Incredible!

For a peek at Krugman's premonitions about the United States, read this.

Dowd on Obama vs. Gingrich

Here is Maureen Dowd in a NY Times op-ed giving her usual lyrical treatment of the two main contenders to run America:

A match between Gingrich and Obama would be fascinating: two men who grew up without their hot-tempered, hard-drinking fathers, vying to be the nation’s patriarch.

The Drama Queen versus No Drama Obama. The apocalyptic prophet versus the ambiguous president.

One hot, one cold. One struggles to stop setting fires as the other struggles to get fiery. One who’s always veering out of control, one who’s too tightly controlled. One reining it in, one letting it rip. One tamping down his pugilistic side, the other ramping it up. One channeling Ronald Reagan to seem more genial; the other channeling Harry Truman to have more spine.

One pretending to be a populist when he can’t drag himself out of Tiffany’s; the other pretending to be a populist when he’d like to be at Davos with Jamie Dimon.

Obama is a foul-weather populist and Gingrich is a fair-weather normal guy. Neither is a convincing populist for the 99 percent who crave one, but it would be fun to watch the Hand Grenade take on Cool Hand Luke.

Whereas Obama usually faded away on stage during his primary debates in 2008, Gingrich revived a fading campaign this fall with his confident debate performances against pitiful foes.

Where Gingrich is vesuvian, Obama is spartan. Gingrich spewed a lot of ideas but often lacked the discipline to see them through. Obama has plenty of discipline, but some plans come a cropper because he gives away too much too early to the other side and delegates too much to Congress.

Like Obama, Gingrich loves to give seminars. But Gingrich, unlike Obama, has a talent for the visceral. Often, however, his rhetoric goes off a cliff.

It is tragic that America will be given a choice between two incompetents. There is need for real leadership with a grand vision to pull America out of the muck of the Great Recession. But these two clowns aren't even worthy to kiss the feet of the leader that America needs. Tragic!

Krugman on the Republican Presidential Candidates

Here is a bit from an excellent NY Times op-ed by Paul Krugman that nails the deep flaws in the Republican campaign for the White House:

There are two crucial things you need to understand about the current state of American politics. First, given the still dire economic situation, 2012 should be a year of Republican triumph. Second, the G.O.P. may nonetheless snatch defeat from the jaws of victory — because Herman Cain was not an accident.

Think about what it takes to be a viable Republican candidate today. You have to denounce Big Government and high taxes without alienating the older voters who were the key to G.O.P. victories last year — and who, even as they declare their hatred of government, will balk at any hint of cuts to Social Security and Medicare (death panels!).

And you also have to denounce President Obama, who enacted a Republican-designed health reform and killed Osama bin Laden, as a radical socialist who is undermining American security.

So what kind of politician can meet these basic G.O.P. requirements? There are only two ways to make the cut: to be totally cynical or to be totally clueless.

Mitt Romney embodies the first option. He’s not a stupid man; he knows perfectly well, to take a not incidental example, that the Obama health reform is identical in all important respects to the reform he himself introduced in Massachusetts — but that doesn’t stop him from denouncing the Obama plan as a vast government takeover that is nothing like what he did. He presumably knows how to read a budget, which means that he must know that defense spending has continued to rise under the current administration, but this doesn’t stop him from pledging to reverse Mr. Obama’s “massive defense cuts.”

Mr. Romney’s strategy, in short, is to pretend that he shares the ignorance and misconceptions of the Republican base. He isn’t a stupid man — but he seems to play one on TV.

Unfortunately from his point of view, however, his acting skills leave something to be desired, and his insincerity shines through. So the base still hungers for someone who really, truly believes what every candidate for the party’s nomination must pretend to believe. Yet as I said, the only way to actually believe the modern G.O.P. catechism is to be completely clueless.

And that’s why the Republican primary has taken the form it has, in which a candidate nobody likes and nobody trusts has faced a series of clueless challengers, each of whom has briefly soared before imploding under the pressure of his or her own cluelessness. Think in particular of Rick Perry, a conservative true believer who seemingly had everything it took to clinch the nomination — until he opened his mouth.

It is tragic that America has sunk to the depths of idiocy that it has in its politics. Buffoons run the show. Fanatics and crazies manage the "politics". Insane.

Where is the Economic Crisis?

The current fear roiling financial markets is the "debt problem" in Europe. But I have a hard time finding the problem. Look at this graph:

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Supposedly Greece, Italy, Spain, and Ireland are "hopeless debtors". But their debt isn't all that different from the debt of Germany or the United States.

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I'm suspicious that all the teeth gnashing and the howls of "we are all doomed!" are simply fear stirred up by financial ghouls who want to stampede markets so they can pick off the weak.

Governments should stand up to them. They should have a united policy of supporting their bonds to stop these financial attacks. Right now the only "winners" are those who feast of the fearful. The fact that governments around the world are letting fear stampede financial markets adds fuel to the flames. It only makes things worse. I simply don't understand why governments can't realize there is strength in numbers. The old Ben Franklin saying is relevant: "Yes, we must, indeed, all hang together, or most assuredly we shall all hang separately."

Sadly, the world does not have leaders worthy of it. Instead, spineless sold-out fools have maneuvered into power on the hopes of money and glory when in fact, the world needs leaders of principle who can make tough choices, tell the people the truth, and in fact lead them out of this mess.

America's Great Recession

The failure of Bush and now Obama to seriously engage in stimulating a failing economy has created a "lost decade". From Calculated Risk, here is a graph that shows the great chasm of lost jobs compared to other post-WWII recessions:

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The inability of America's political leadership to break the bonds of servitude to Wall Street and big corporate interests means that the bottom 99% will pay and continue to pay for the sins of the political leadership and the rich elite in the US. Tragic.

The Depth of the US Housing Depression

Here are some facts from a story in Vegas Inc:

“In less than four years, more than 100,000 homes in Las Vegas have been lost through foreclosure. That’s 18 percent of our privately owned housing stock: that’s nearly one home in five. And we’re nowhere near finished with foreclosures. In all likelihood, we have another 100,000 yet to go, and at the current rate, that’s another four years,” Murphy said.

And this has hit house prices hard. Just in the last year:

In a market hit by high unemployment (13.6 percent) and an elevated foreclosure rate, the Realtors said the median price of single-family homes sold in October was $121,000. That’s down 1.9 percent from $123,400 in September and down 9 percent from $133,000 a year ago.

From the Calculated Risk site, the price of homes in Las Vegas is down 60% since the beginning of 2007:

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What is tragic is that the Republicans caused this Great Recession during the Bush administration and are doing everything they can to make it worse in order to win in 2012. And the salt in the wound is that Barack Obama had a chance to come in and really push hard to save Main Street after the failure of Wall Street, but he played "political games" and undersized the stimulus in early 2009 and then claimed it was "just right" in size when it was clearly too small and dithered for two and a half years before he got serious about attacking unemployment and the crushed economy... just in time to win another 4 years for his "do nothing" administration. Tragic.

Self-Inflicted Helplessness

The political and monetary authorities have behaved wonderfully since the 2008 collapse. They are shown brilliantly the technique called learned helplessness. Or so the story goes.

In truth, the leaders have simply ignored their responsibility and their capability and are abetted by their enablers, the media. Here's a bit by Dean Baker on his Beat the Press blog pointing this out:

The Post Wrongly Tells Readers That Central Banks Can't Do More to Boost Growth

In an article about the IMF reversing its pro-austerity stance, the Post told readers:

"Central banks, which have already reduced interest rates to extremely low levels, have little remaining ability to boost economic activity."

This is not true. Central banks could explicitly target higher rates of inflation. This would lower real interest rates and reduce debt burdens. This policy has been advocated by many prominent economists, including Paul Krugman, Ken Rogoff, the former chief economist of the IMF, and Ben Bernanke when he was still a professor at Princeton.

I'm reading Sylvia Nasar's Grand Pursuit and it really, really sad to realize that this same flailing about and impotence in the face of a crying need for action marked the 1930s as it does today. It simply means that tens of millions suffer because the "leaders" can't lead. Instead the leaders are fearful of "little voices" in their heads whispering about dreaded inflation or the need to appease some hidden actor requiring "confidence". Even in the 1930s there were a number of leading economists, Keynes being the preeminent example, who properly diagnosed the situation and gave political and monetary authorities the needed guidance. But then, as now, these "leaders" simply ignored the advice and played their hand as if the economy were a morality play requiring "excesses" to be punished by many, many years of suffering by the innocent, the unemployed workers with absolutely no responsibility for the crash.

A Day Late and a Dollar Short

The "poltics" in America is pathetic. Nobody is addressing the real needs. The major parties are playing a three card monte game with posturing and distractions. This day late and a dollar short politics has got to end.

Here's a bit from a relevant Robert Reich post:

Republicans are debating again tomorrow night. And once again, Americans will hear the standard regressive litany: government is bad, Medicare and Medicaid should be cut, “Obamacare” is killing the economy, undocumented immigrants are taking our jobs, the military should get more money, taxes should be lowered on corporations and the rich, and regulations should be gutted.

Four years ago the most widely-watched TV debate among Republican aspirants attracted 3.2 million viewers. This year it’s almost twice that number. And for every viewer assume a multiplier effect as he or she shares what’s heard with friends and family.

Americans are listening more intently this time around because they’re hurting and they want answers. But the answers they’re getting from Republican candidates – tripping over themselves trying to appeal to hard-core regressives – are the wrong ones.

The correct ones aren’t being aired.

That’s partly because there’s no primary contest in the Democratic party. So Republicans automatically get loads of free broadcast time to air their regressive nonsense while the Democrats get none.

But even if the President had equal time, the debate about what to do about the crisis would still be frighteningly narrow.

That’s because the President’s answers don’t nearly match up to the magnitude of the crisis.

Without bold alternatives, Americans desperate for big solutions are attracted to bold crackpot ideas like Herman Cain’s “9-9-9” proposal, which would raise taxes on the poor and cut them for the rich.

This is where the inchoate Occupy Wall Street movement could come in. What’s needed isn’t just big ideas. It’s people fulminating for them – making enough of a ruckus that the ideas can’t be ignored. They become part of the debate because the public demands it.

The biggest thing the President has proposed is a plan to create 2 million jobs. But that’s not nearly big enough. Today, 14 million Americans are out of work, and 11 million more are working part-time who’d rather be working full time.

The nation needs a real jobs plan, one of sufficient size and scope to do the job – including a WPA and a Civilian Conservation Corps, to put the millions of long-term unemployed and young unemployed to work rebuilding America.

I'm reading material from the 1930s and we've been down this path before. The politics is a distraction. We know how to fix the economy. It takes a big jolt of spending to fix the huge number of people caught in a credit squeeze. Pussyfooting around only stretches out the pain. Most politicians know this, but they aren't honest with the public. They would rather play their games and go for personal gain rather than do their duty and build a better tomorrow.

Stiglitz on the Lesser Depression

Here are some key bits of an article by Joseph Stiglitz in Project Syndicate:

As the economic slump that began in 2007 persists, the question on everyone’s minds is obvious: Why? Unless we have a better understanding of the causes of the crisis, we can’t implement an effective recovery strategy. And, so far, we have neither.

...

The banks claim that lending remains constrained by a shortage of creditworthy borrowers, owing to the sick economy. And key data indicate that they are at least partly right. After all, large enterprises are sitting on a few trillion dollars in cash, so money is not what is holding them back from investing and hiring. Some, perhaps many, small businesses are, however, in a very different position; strapped for funds, they can’t grow, and many are being forced to contract.

Still, overall, business investment – excluding construction – has returned to 10% of GDP (from 10.6% before the crisis). With so much excess capacity in real estate, confidence will not recover to its pre-crisis level anytime soon, regardless of what is done to the banking sector.

The financial sector’s inexcusable recklessness, given free rein by mindless deregulation, was the obvious precipitating factor of the crisis. The legacy of excess real-estate capacity and over-leveraged households makes recovery all the more difficult.

But the economy was very sick before the crisis; the housing bubble merely papered over its weaknesses. Without bubble-supported consumption, there would have been a massive shortfall in aggregate demand. Instead, the personal saving rate plunged to 1%, and the bottom 80% of Americans were spending, every year, roughly 110% of their income. Even if the financial sector were fully repaired, and even if these profligate Americans hadn’t learned a lesson about the importance of saving, their consumption would be limited to 100% of their income. So anyone who talks about the consumer “coming back” – even after deleveraging – is living in a fantasy world.

Fixing the financial sector was necessary for economic recovery, but far from sufficient. To understand what needs to be done, we have to understand the economy’s problems before the crisis hit.

First, America and the world were victims of their own success. Rapid productivity increases in manufacturing had outpaced growth in demand, which meant that manufacturing employment decreased. Labor had to shift to services.

The problem is analogous to that which arose at the beginning of the twentieth century, when rapid productivity growth in agriculture forced labor to move from rural areas to urban manufacturing centers. With a decline in farm income in excess of 50% from 1929 to 1932, one might have anticipated massive migration. But workers were “trapped” in the rural sector: they didn’t have the resources to move, and their declining incomes so weakened aggregate demand that urban/manufacturing unemployment soared.

For America and Europe, the need for labor to move out of manufacturing is compounded by shifting comparative advantage: not only is the total number of manufacturing jobs limited globally, but a smaller share of those jobs will be local.

Globalization has been one, but only one, of the factors contributing to the second key problem – growing inequality. Shifting income from those who would spend it to those who won’t lowers aggregate demand. By the same token, soaring energy prices shifted purchasing power from the United States and Europe to oil exporters, who, recognizing the volatility of energy prices, rightly saved much of this income.

The final problem contributing to weakness in global aggregate demand was emerging markets’ massive buildup of foreign-exchange reserves – partly motivated by the mismanagement of the 1997-98 East Asia crisis by the International Monetary Fund and the US Treasury. Countries recognized that without reserves, they risked losing their economic sovereignty. Many said, “Never again.” But, while the buildup of reserves – currently around $7.6 trillion in emerging and developing economies – protected them, money going into reserves was money not spent.

Where are we today in addressing these underlying problems? ...

...

Government plays a central role in financing the services that people want, like education and health care. And government-financed education and training, in particular, will be critical in restoring competitiveness in Europe and the US. But both have chosen fiscal austerity, all but ensuring that their economies’ transitions will be slow.

The prescription for what ails the global economy follows directly from the diagnosis: strong government expenditures, aimed at facilitating restructuring, promoting energy conservation, and reducing inequality, and a reform of the global financial system that creates an alternative to the buildup of reserves.

Eventually, the world’s leaders – and the voters who elect them – will come to recognize this. As growth prospects continue to weaken, they will have no choice. But how much pain will we have to bear in the meantime?

So... Stiglitz thinks that the incompetent political leadership and the intransigence of the rich and powerful means that the world will yet again have to undergo a decade long (or more!) depression to accommodate the economic adjustments required by the latest developments in technology and productivity.

What really drives me insane is that unlike 1929 when the right wing politician Hoover was just starting his term and caused the Great Depression to drag out and worsen, in 2008 America had just elected a Democrat who pretended to be a progressive with a slogan of "hope" and "change we can believe in" but ended up being a Mini-Me Hoover worried about deficits and balancing the budget and not about 25 million unemployed and 4.8 million home foreclosures (to July 2011) and the millions of young and old who are being shut out of meaningful work and losing their anchor to any role in society. These are lives destroyed. Obama goes through the motions, but his leadership has been disastrous (OK, far better than any right wing Republicans, but far, far short of what an activist Democratic president should have achieved).

NY Police Bring "Democracy" to America

The thugs in blue uniforms are trying to out-Mubarak of Egypt, out-Gadaffi of Libya, and out-Basshar al Assad of Syria. Apparently "the authorities" in NY like to put on these "show of force" by police as they beat up and pepper spray protesters. I'm guessing the US feels it can show the Middle East dictators "how it is done"...



The video is murky, but the only "disorderly conduct" and violence I see is from cops beating on protestors who are trying to stay out of the way of the batons and pepper spray. If this is supposed to be "street management" by a professional police force, this has to be the video of "how not to do it". Disgusting.

Notice how one of these cops in white (these are the "supervisors"!!!) gets both hands on his billy club so he can do some vicious imitation of a home run slugger on some poor demonstrator...



I guess if Mayor Bloomberg wants to help the demonstrators win in this struggle for democracy, he has taken one hell of a step forward. You don't "manage" crowd by this kind of violence. Instead, you add fury to protest and fuel even greater demonstrations. I have to put my head in my hands and weep because America shows itself incompetent at "managing democracy". Instead of turns loose goons and thugs to beat up people to suppress legitimate protest. That will set fire to the cause of Occupy Wall Street.

I sure looks to me that the "authorities" in the US are trying as hard as they can to re-create Mubarak and Tahrir Square in America. What they are achieving by their thuggish behaviour and their unwillingness to allow legitimate protest is a quickly mushrooming movement:



I notice that the media continues to downplay these demonstrations. A year ago, a crowd of 30 Tea Party demonstrators would get headline news in major media. On October 5th the crowds were big. The "official" estimates are 2,000 people, but you can see for yourself, there are many thousands. And still these demonstrations and their cause get only a passing mention in the news media.

Count the demonstrators for yourself. The number 2,000 is laughingly low...



This careful media management of an event into non-existence is what is "wonderful" about democracy in America... the political life is America is so well "stage managed" by the rich and powerful. The lessons the Middle East dictators have to learn from America is not to beat and kill demonstrators, but to pull a George Orwell 1984 and simply write the existence of demonstrators out of "reality". That is real democracy using the Washington approach. Quietly take money from big bankers and corporations and run the state for the top 1% while "managing the news" so that the bottom 99% never hear about their concerns and where any demonstrations become non-events.

Here is Michael Moore at the demo giving his two bits about what the movement means...

Thinking Seriously About Taxes

Here are some bits from a good article by David published by Reuters:

From the way Washington politicians in both parties tell it, you may well think that multinational companies favor low-tax jurisdictions when investing overseas. They don't.

The multinationals prefer investing in high-tax jurisdictions because it so happens that is where they can earn the highest returns.

Multinational companies then reduce or eliminate those seemingly high taxes by using simple, widely used devices to take profits in low-tax and no-tax jurisdictions.

Such practices create "stateless income," in the words of Edward Kleinbard, whose new scholarship on corporate taxation deserves our attention.

As defined by Kleinbard, stateless income means profits earned in a country other than where the firm is headquartered and subject to tax only in a third country which imposes little or no tax.

Kleinbard shows why stateless income is the most serious threat to the corporate tax base even as Washington politicians blather on about less important corporate tax issues that their remarks show they do not understand.

...

Ignoring the reality of tax erodes the tax base, distorts economic decisions and through shortsighted policy enriches the few at the expense of the many.

That corporations prefer investing overseas in high tax countries may seem to defy common sense. But much of tax is counterintuitive and requires careful study of a kind that was once much more common on Capitol Hill. Sadly, as partisanship has grown along with reliance on campaign donors, serious thinking about taxes has been supplanted by ideological marketing that has more in common with advertising than serious policy debates.

Since tax is the largest economic activity in the world, it is crucial that we base our policies on facts, not fantasies, if civilization is to endure. Get tax wrong and the damage diminishes markets, distorts investments, destroys private wealth and endangers social stability.

The idiocy of American political partisanship has not only crushed that country with a Lesser Depression, it has wrecked the world economy. Somehow common sense, pragmatism, collegiality, and reasoned discourse needs to be knocked into the heads of the politicians in Washingon. (I don't want to create the idea of a false equivalence. About 90% of the idiocy is in the ranks of Republican ideologues and 10% in the ranks of Democratic ideologues.)

The Voices of Protest

The mainstream media loves to mumble over-and-over that the Occupy Wall Street protest is a disorganized mess with no real message and something that should be ignored because it is only a tiny number of "agitators" who have no political program.

If you want to see the most compelling "political program" today. Go to this site and view the pictures.

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The Russian aristocracy and their financial elite partied until the day when people in the street demonstrated for "bread and freedom" and were cut down by Cossacks with their sabres. This rabble won a revolution but were stabbed in the back by the scheming Communists. Between the indifferent greedy rich and the cruel commies, the poor discovered that they would get neither bread nor freedom.

The French elites partied until the starving masses from Paris came to the gates of Versailles and demanded "bread" but were chased away as a shiftless mob, a rabble. But the mob returned and seized Versailles. The "let them eat cake" crowd discovered that the rabble without an agenda or a political party could overturn a powerful modern state.

What lies ahead for the US? Certainly the Republicans have no answer. They are pawns of the ultra-rich who are only interested in more "tax cuts" for the "job creators". Obama has proven that he can't hear the voices in the street. What lies in store for America?

That ignorable rabble on Wall Street has grown. It is now the spearhead of:

Together we will protest this great injustice. We stand in solidarity with the honest workers of:

AFL-CIO (AFSCME)
United NY
Strong Economy for All Coalition
Working Families Party
TWU Local 100
SEIU 1199
CWA 1109
RWDSU
Communications Workers of America
CWA Local 1180
United Auto Workers
United Federation of Teachers
Professional Staff Congress - CUNY
National Nurses United
Writers Guild East

And:

VOCAL-NY
Community Voices Heard
Alliance for Quality Education
New York Communities for Change
Coalition for the Homeless
Neighborhood Economic Development Advocacy Project (NEDAP)
The Job Party
NYC Coalition for Educational Justice
The Mirabal Sisters Cultural and Community Center
The New Deal for New York Campaign
National People's Action
ALIGN
Human Services Council
Labor-Religion Coalition of New York State
Citizen Action of NY
MoveOn.org
Common Cause NY
New Bottom Line
350.org
Tenants & Neighbors
Democracy for NYC
Resource Generation
Tenants PAC
Teachers Unite

Together we will voice our belief that the American dream will live again, that the American way is to help one another succeed. Our voice, our values, will be heard.

Will it take pitchforks and torches, and a mob crying with bloodlust for the media to notice what is happening right under their noses in NY and now spreading across all of America? Will the elites keep "partying on" trusting that the garrison state that they have bought and paid for will keep them safe from this unruly mob?




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More disorganized rabble with their incoherent message that the mainstream media deems unworthy of reporting can be found on this site.

Here is one academic's interpretation of this "incoherent unruly mob" and what it means. From Umair Haque's blog at the Harvard Business Review:

Across the globe, protests are rippling out like vectors in an epidemic.

I believe that we're witnessing the rise of a global Metamovement.

The Metamovement is a movement of movements. Not all these movements are similar, and no two are exactly like. The Arab Spring is part of the Metamovement; the London Riots were part of the Metamovement; India's nationwide anti-corruption protests were part of the Metamovement, just like Israel's massive demonstrations were; protests spreading across America, under the banner of Occupy Wall Street, are all part of the Metamovement.

Where did this virus erupt? The simplest answer is: in Sidi Bouzid, where Mohamed Bouazizi set himself alight in protest. What sent Bouazizi over the edge of sanity — or, depending on your perspective, into the arms of a kind of hyperrational embrace of a singular act of revolt?

"Twenty-six year old Mohamed Bouazizi had been the sole income earner in his extended family of eight. He operated a purportedly unlicensed vegetable cart for seven years in Sidi Bouzid190 miles (300 km) south of Tunis. On 17 December 2010 a policewoman confiscated his cart and produce. Bouazizi, who had such an event happen to him before, tried to pay the 10-dinar fine (a day's wages, equivalent to 7USD). In response the policewoman slapped him, spat in his face, and insulted his deceased father. A humiliated Bouazizi then went to the provincial headquarters in an attempt to complain to local municipality officials. He was refused an audience."

Got that? Bouazizi was not just systematically, structurally denied the opportunity to prosper, but also punished for having daring to try to do so. Instead of inalienable rights — rights not to riches, but to the tools with which to build for himself a meaningfully good life — Bouazizi was wronged. Think of a "wrong" as the negation of a "right": time after time, a monolithic set of institutions not only failed to deliver the economic and social goods, but also forced him to stomach and swallow bitter "bads" (unemployment, poverty, undereducation).

For the privileged and powerful, these institutions have turned fortune into excess — but for Bouazizi, they turned misfortune into a literal slap in the face, wresting from him the chance to be author of his own destiny, stripping away his agency and finally his dignity.

In a sense, that sentiment is the common thread behind each and every movement in the Metamovement — a sense of grievous injustice, not merely at the rich getting richer, but at the loss of human agency and sovereignty over one's own fate that is the deeper human price of it.

It's one thing for institutions to fail — as in fail to deliver the goods — but for them to punish people for attempting to pursue prosperity reaches beyond failure. To get a visceral feel for this, please stop for a second and visit We Are The 99 Percent. This is not merely nonfunction, but malfunction.

The Metamovement isn't just a faint, transient echo, but the increasingly resonant reverberation of people challenging this brutal state of malfunction, this Great Splintering of institutions and social contracts. Their truth, I suspect, might be this: there's no one left to turn to — and so the Metamovement has turned to each other. Not for yesterday's notions of "solidarity", or the corporatist ideal of "inspiration, "but as nodes in a pulsing network whose coherence defines it: to demand institutions which can literally deliver the goods of enlightened social contracts. That enshrine in the people, first and foremost, the inalienable right to be authors of their own destinies — instead of condemning them to be mute puppets.

It is, of course, this sense of autonomy that is the cornerstone of eudaimonia, the belief that a good life is a life lived meaningfully, and that it ought to be possible to both live meaningfully and make a living. And in that foundational sense, I'd say the Metamovement is the first glimmering of a larger revolution that will burn over the globe like Bouazizi's fire. No, not every revolt ends in revolution — but every revolution begins with revolt.

And make no mistake, this is revolt — an insurrection against a monstrous status quo that's failed too many, too deserving, for too long, while serving too few, too undeserving, far too well. It is not in the nature of man or beast to stay yoked to the gleaming machines of their own economic, social, and moral annihilation. Better — as perhaps Bouazizi thought — to commit the ultimate act; to choose. To choose to let loose a brutally human cry, one whose echoes might come to define a defining decade.

The mainstream media has decided for you there is "nothing to see here" and that you should "keep moving". Go watch the situation comedies on TV. Watch "reality" TV. Don't waste your time viewing these unorganized people with an incoherent message and no "organized political party". You have better ways to waste your time with mindless entertainment while 25 million are unemployed, tens of millions go to bed hungry at night, millions have lost or are losing their homes. Obama has told you that he has plenty of "hope" for you and lots of "change you can believe in". And the right wing nuts tell you that after 30 years of tax cuts, it just requires a few more tax cuts for the ultra-rich for all those "job creators" to suddenly shower you with jobs, jobs, jobs.

More TSA Security Theatre

Here is yet another story of a person humiliated by TSA in their "pretend" security. They subject innocents to harassment and degradation wasting valuable resources while spending next to nothing on real threats.

From the Lori Dorn blog:

At what point does the need for security eclipse human dignity and compassion?

Yesterday I went through the imaging scanner at JFK Terminal 4 for my Virgin America flight to San Francisco. Evidently they found something, because after the scan, I was asked to step aside to have my breast area examined. I explained to the agent that I was a breast cancer patient and had a bilateral mastectomy in April and had tissue expanders put in to make way for reconstruction at a later date.

I told her that I was not comfortable with having my breasts touched and that I had a card in my wallet that explains the type of expanders, serial numbers and my doctor’s information (pictured) and asked to retrieve it. This request was denied. Instead, she called over a female supervisor who told me the exam had to take place. I was again told that I could not retrieve the card and needed to submit to a physical exam in order to be cleared. She then said, “And if we don’t clear you, you don’t fly” loud enough for other passengers to hear. And they did. And they stared at the bald woman being yelled at by a TSA Supervisor.

To my further dismay, my belongings, including my computer, were completely out of sight. I had no choice but to allow an agent to touch my breasts in front of other passengers.

I just didn’t understand why these agents were so insensitive to the situation. I would have been happy to show her which bag was mine and have her retrieve the card, but she did not allow even that. I have been through emotional and physical hell this past year due to breast cancer. The way I was treated by these TSA agents added a shitload of insult to injury and caused me a great deal of humiliation.

I understand the need for safety when flying, but there is also a need for those responsible to be compassionate and sensitive to each situation. These agents were neither.

Compare Lori Dorn's story with the following...

http://www.ksdk.com/news/news_article.aspx?storyid=112091

A security breach at Lambert-St. Louis International Airport forced the evacuation of Concourse A, which serves six airlines. Paul Mason, Chief of Police at Lambert, said police were called to the concourse around 6:20 p.m. after airport screeners found a prohibited item in a bag. When airport police and TSA security officers arrived a few minutes later, the individual and the bag were gone. Mason said the item appeared to be a double-barreled derringer handgun. After security officers were unable to detain the person, the concourse was evacuated and passengers on five planes waiting to take off were unloaded and screened again. The entire process took about 1.5 hours.

Yeah... you humiliate a woman over her breast implants -- which are clearly identifiable in a scan -- but you let a guy with a double-barrelled derringer handgun just "melt away". Now that is class A, #1, top-of-the-line security!

Update 2011oct04: Here is a bit from a post on the NY Times blog of Tara Parker-Pope:

Since posting her story this weekend, several Web sites, including her husband’s blog, Laughing Squid, as well as the blog Boing Boing, have picked up her story. She said she has been contacted by T.S.A. officials and plans to speak with them soon.

The T.S.A. e-mailed a statement about the incident, saying that proper screening procedures were followed.

We strive to treat every passenger with dignity and respect. In this case, that may not have happened. During the screening process, if advanced imaging technology detects an anomaly that cannot be cleared, secondary screening is required to ensure the passenger does not have threat items, such as explosives concealed under clothing.

... [yada, yada, yada and more officialese ignoring responsibility and bad behaviour by TSA staff]

Ms. Dorn said the screening at the San Francisco airport before her return flight was uneventful, but she walked through a traditional metal detector rather than an imaging machine.

“The embarrassment came from trying to explain my situation to someone who didn’t want to hear it,” she said. “I was not refusing a pat-down if that’s what was necessary, and ultimately I submitted to one. I was objecting to how I was being treated.”

Ms. Dorn joins a long list of passengers with and without medical issues who have complained of mistreatment by T.S.A. screening workers.

Last year, MSNBC.com told the story of a woman who was forced to show her prosthetic breast during an airport screening. Another woman said she was embarrassed when, during the pat-down, a worker manipulated her breast prosthesis from side to side.

Joe Sharkey, a reporter for The New York Times, has also written about what many travelers perceive as attitude problems among screening workers.

Economics as a Morality Play

Here is an excellent bit from a post by Paul Krugman on his NY Times blog:

And it has been an awesome spectacle watching the VSPs [Very Serious People] search, obsessively, for reasons not to fight mass unemployment. Fiscal policy must tighten to appease the invisible bond vigilantes and please the confidence fairy. Interest rates must rise because, well, um, inflation, well, no, low rates cause moral hazard — yes, that must be it.

And we’re not (just) talking about ignorant politicians. This stuff has been coming from the European Central Bank, the Organization for Economic Cooperation and Development, the Bank for International Settlements.

I don’t fully understand it. But a large part of it, it seems obvious, is the intense desire to see economics as a morality play of sin and punishment, where the sinners are, of course, workers and governments, not the bankers. Pain is not an unfortunate consequence of policies, it’s what is supposed to happen.

How obsessive are these people? So obsessive that when the financial doom they predict fails to materialize, they consider this a bad thing: punishment must be administered, so what are the markets waiting for? Here’s Alan Greenspan a while back:

Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences.

Gosh, it’s regrettable that the markets aren’t confirming my warnings! ...

Just to reiterate a point I’ve made before, none of this reflects actual economic theory. Throughout this crisis, people like Adam Posen and yours truly have been basing our arguments on standard textbook macroeconomics, whereas the Very Serious People have been making up stories on the fly to justify their calls for pain. As Wolf, who really seems to have eaten his Wheetabix, puts it,

The waste is more than unnecessary; it is cruel. Sadists seem to revel in that cruelty. Sane people should reject it. It is wrong, intellectually and morally.

And this cruelty rules our world.

As through all of history, it is the bottom 90% who pay the price for the idiocy of the top 1%. The know-it-alls at the top see the world through their ideological glasses that just happen to see things the way that suits them fine. That it hurts the bottom 90% doesn't bother them one whit.

American Political Leaders Continue to Turn Down a "Free Lunch"

It isn't often that you see an economist identify a "free lunch" and tell you it isn't a scam, that it literally is like a $100 bill lying on the sidewalk waiting to be picked up. Sure there are right wing economists who would walk right by that $100 bill because they believe in "efficient markets" which assures them the bill can't be real because if it were then somebody would have already bent down and pocketed the free money.

Here is the opening of an excellent article by Brad DeLong pointing out a "free lunch" that Obama, the Republicans, and the Democrats are ignoring. They believe the following is like the $100 on the sidewalk. It can't be real otherwise somebody else (the "job creators" in Republican lingo) would have already bent down and grabbed it. But the "free lunch" is real. Here is DeLong spelling it out:

Former US Treasury Secretary Lawrence Summers had a good line at the International Monetary Fund meetings this year: governments, he said, are trying to treat a broken ankle when the patient is facing organ failure. Summers was criticizing Europe’s focus on the second-order issue of Greece while far graver imbalances – between the EU’s north and south, and between reckless banks’ creditors and governments that failed to regulate properly – worsen with each passing day.

But, on the other side of the Atlantic, Americans have no reason to feel smug. Summers could have used the same metaphor to criticize the United States, where the continued focus on the long-run funding dilemmas of social insurance is sucking all of the oxygen out of efforts to deal with America’s macroeconomic and unemployment crisis.

The US government can currently borrow for 30 years at a real (inflation-adjusted) interest rate of 1% per year. Suppose that the US government were to borrow an extra $500 billion over the next two years and spend it on infrastructure – even unproductively, on projects for which the social rate of return is a measly 25% per year. Suppose that – as seems to be the case – the simple Keynesian government-expenditure multiplier on this spending is only two.

In that case, the $500 billion of extra federal infrastructure spending over the next two years would produce $1 trillion of extra output of goods and services, generate approximately seven million person-years of extra employment, and push down the unemployment rate by two percentage points in each of those years. And, with tighter labor-force attachment on the part of those who have jobs, the unemployment rate thereafter would likely be about 0.1 percentage points lower in the indefinite future.

The impressive gains don’t stop there. Better infrastructure would mean an extra $20 billion a year of income and social welfare. A lower unemployment rate into the future would mean another $20 billion a year in higher production. And half of the extra $1 trillion of goods and services would show up as consumption goods and services for American households.

In sum, on the benefits side of the equation: more jobs now, $500 billion of additional consumption of goods and services over the next two years, and then a $40 billion a year flow of higher incomes and production each year thereafter. So, what are the likely costs of an extra $500 billion in infrastructure spending over the next two years?

For starters, the $500 billion of extra government spending would likely be offset by $300 billion of increased tax collections from higher economic activity. So the net result would be a $200 billion increase in the national debt. American taxpayers would then have to pay $2 billion a year in real interest on that extra national debt over the next 30 years, and then pay off or roll over the entire $200 billion.

The $40 billion a year of higher economic activity would, however, generate roughly $10 billion a year in additional tax revenue. Using some of it to pay the real interest on the debt and saving the rest would mean that when the bill comes due, the tax-financed reserves generated by the healthier economy would be more than enough to pay off the additional national debt.

In other words, taxpayers win, because the benefits from the healthier economy would more than compensate for the costs of servicing the higher national debt, enabling the government to provide more services without raising tax rates. Households win, too, because they get to buy more and nicer things with their incomes. Companies win, because goods and workers get to use the improved infrastructure. The unemployed win, because some of them get jobs. And even bond investors win, because they get their money back, with the interest for which they contracted.

So what is not to like? Nothing.

Go read the whole article.

The political "leadership" in America is a joke. These are political hacks more interested in grandstanding and playing ideological gamesmanship than in saving the ship of state from the shoal of depression and years of economic hardship. It is practically criminal that this is happening!

What History Teaches Us

Here is an interesting article by David Wessel in that bastion of capitalism the Wall Street Journal:

There is an optimistic scenario for the U.S. economy: Europe gets its act together. The pace of world growth quickens, igniting demand for U.S. exports. American politicians agree to a credible compromise that gives the economy a fiscal boost now and restrains deficits later. The housing market turns up. Relieved businesses hire. Relieved consumers spend.

But there are at least two unpleasant scenarios: One is that Europe becomes the epicenter of a financial earthquake on the scale of the crash of 1929 or Lehman Brothers 2008. The other is that Europe muddles through, but the U.S. stagnates for another five years, mired in slow growth, high unemployment and ugly politics…. No one would intentionally choose the second or third, yet policy makers look more likely to stumble into one of those holes than find a path to the happier ending.

Why? Liaquat Ahamed has been pondering that question…. "Is it because people don't know what to do (or there's disagreement about what to do)," he wonders, "or is it the politics, particularly the reluctance to ask some people to pay for the mistakes of others?" "In the '20s," he says, "there was much more ignorance"—the disastrous fealty to the gold standard, the Federal Reserve's failure to understand its role as lender of last resort. Today? Mr. Ahamed can't decide if it's ignorance or insurmountable political barriers that keep governments from doing what needs to be done.

In the 1920s, two crises fed on each other: a banking crisis in the U.S. and a sovereign-debt crisis in Europe. (Sound familiar?) In our time, the U.S. handled its banking crisis better than it did back then. (Yes, much better, despite missteps and criticism.) But Europe? The problems go well beyond the inevitable Greek default on its debts. "We are discussing a broken ankle in the presence of organ failure," Lawrence Summers, the former U.S. Treasury secretary, quipped last week about the fixation on Greece….

I find it funny. I'm reading Ron Suskind's book Confidence Men: Wall Street, Washington, and the Education of a President. He makes it clear that in August 2007 Wall Street insider Robert Wolf let Obama know that a really big crash, not a plain vanilla recession, but a big crash was coming: "This is a market-driven disaster that could crush Wall Street and with it the whole U.S. economy."

That was 4 years ago. Finally in September 2011 Obama announces that he is "worried" about jobs. For those who have been unemployed for 3+ years that has to be good news. But Obama and Wall Street have known for 4 years that the US was going to go into the ditch with a world class depression. But he has done nothing.

It isn't only Obama. The political leadership in Washington continue to do their best imitation of Nero fiddling while Rome burns. They are jockeying to win in 2012 while the country is in the gutter and tens of million are unemployed, many more have joined the impoverished below the "poverty level", many millions have lost their homes, and the future has remained bleak for 3 full years. Nothing. That is Washington's answer. Nothing.

Oh sure, Washington talks up "jobs" but it also talks up "deficits and debt". It talks up a war here and a war there. It talks up putting the pledge of allegiance and Bible reading into every classroom. It talks up making math mandatory until you are 45 so that America can be competitive with the rest of the world. It talks up putting Santa Claus in charge of the poverty program and putting stop loss orders on tooth fairies so that the hungry can wake in the morning with a can of beans under their pillow. Washington is pathetic.

History teaches us that when leaders can't or won't lead, then the people rise up and find their own leaders. That time has come.

Unraveling the Complexity of US Politics

What people say is not what they mean, especially politicians in the US. But even the electorate is sending mixed messages. Here's an attempt to unravel the complexity. Read these bits from an article by James Surowiecki in The New Yorker looking at Obama's "jobs plan" and the current political reality in the US:

There is no truer truism in American politics than James Carville’s catchphrase from the 1992 election “It’s the economy, stupid.” When people discuss Barack Obama’s current approval rating, which is at its lowest level ever, they may invoke his supposed lack of toughness or his tendency toward moderation, but the only really important factor is the dismal state of the U.S. job market. The American Jobs Act, which Obama is now promoting across the country, is an attempt to change this, by giving the economy a temporary boost with a mixture of tax cuts and government spending amounting to $447 billion. It’s an excellent idea: many independent analysts suggest that it could boost G.D.P. growth over the next year by 1.5 per cent or better, and create as many as one and a half million jobs. And it’s ideologically canny. A hefty chunk of it comes in the form of tax cuts, which Republicans typically love, and much of the rest would go toward more spending on infrastructure, which House Majority Leader Eric Cantor has expressed support for. Even so, it’s unlikely that House Republicans will pass the bill, and there’s a good chance that they’ll stop it even from coming up for a vote.

...

But people are underestimating a number of factors that could allow the G.O.P. to pursue an obstructive line without being much punished for it. To begin with, studies show that voters are more likely to hold politicians accountable for economic conditions when there’s “clarity of responsibility”—and responsibility for the economy now belongs to Obama and the Democrats. The recession started long before Obama took office. But, from a voter’s perspective, he had two years with sizable majorities in Congress to do something about it. While the 2009 stimulus plan succeeded in making the recession less awful than it might have been, you rarely get credit in politics for what didn’t happen. More important, in launching the plan, the President effectively took responsibility for the result. If you try to fix it, it’s yours.

...

It’s not that the Republican approach is popular: one recent Bloomberg poll found that forty-five per cent of those surveyed think congressional Republicans are responsible for the gridlock in Washington. But it seems to be working: for the past year and a half, the Party has consistently gone for a do-nothing approach and voters have consistently rewarded it. In the run-up to last year’s midterms, Republicans were explicit about their opposition to past, present, and future stimulus programs. They won a landslide victory. And, just last week, in two special elections for the House, Republican candidates who campaigned largely against Obama’s policies won seats in Nevada and New York by margins that were much bigger than expected. Americans may be saying that they want the government to use fiscal policy to get the economy moving again, but the way they vote tells a different story. Perhaps fourteen more months of economic stagnation and no job creation will change that. But, for now, it’s not only our representatives who are to blame. It’s ourselves.

So the story is complex. The Republicans profess a deep love of country but they are willing to block any attempt to revive the economy. The Democrats claim an eagerness to fix the economy but they put in place a stimulus which is too small and call it "adequate" and ignore the suffering. And to top it all off, the electorate wants to "send a message" but they use election results which will be read by the Republicans as a pat on the back and a "job well done!" when in fact the electorate is boiling with rage and feeling impotent. What a mess.