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Tuesday Evening News Roundup

Tuesday Evening News Roundup

Austerity really isn’t working out all that well in Europe.

William Black, scholar and economist, takes the Washington Post’s William Samuelson to task for advocating for austerity measures

We have known for over 75 years that the key to recovering from a recession is to follow a counter-cyclical fiscal policy that will reduce unemployment. We have long exhibited the wisdom to adopt automatic stabilizers that increase government services and decrease taxes when a recession strikes.

What would have happened if Obama had adopted austerity as Berlin imposed austerity on the European periphery? It would have prevented any recovery, throwing the U.S. into an even more severe recession. Berlin’s austerity demands have thrown the Eurozone back into a gratuitous recession, increasing the budget deficit in many nations and plunging Greece and Spain into depressions. Europe has followed Samuelson’s and Ryan’s policy advice and the results have been disastrous. Samuelson’s and Ryan’s austerity policies violate economic theory, economic history, and a natural experiment in Europe with austerity that has proved catastrophic. Samuelson, however, makes bizarre odes to Irish austerity, emphasizing the necessity of “persuading ordinary citizens to tolerate austerity (higher unemployment, lower social benefits, [and] heavier taxes) without resorting to paralyzing street protests or ineffectual parliamentary coalitions.”

New York Atty. Gen. sues Bear Stearns (J.P. Morgan bought the remnants of Bear Stearns). It appears that Bear Stearns was selling toxic complex mortgage-backed securities and they knew it was garbage but sold it as “good as gold.” (more…)

By |2013-11-03T18:14:59-04:00October 3rd, 2012|Economy, Elections, Foreign Affairs, Party Politics|1 Comment

So, Santorum said what?

A couple weeks ago, I listed several things that Rick Santorum has said that I thought were somewhat over the top or even outrageous. A good friend of mine did not see anything wrong with any of the statements that I listed. Well, today in Lansing, Michigan Rick Santorum said, “We went into a recession in 2008 because of gasoline prices. The bubble burst in housing because people cannot pay their mortgages because they’re looking at four dollars a gallon gasoline. And look what happened, economic decline.”

Now this is simply flat-out nuts. There is no self-respecting economist in the United States who is going to sign onto this theory that gas prices caused the great recession. Here are the gas prices over the last 60 months.

From Gasbuddy.com

According to the government, the great recession started in December of 2007. Gas prices didn’t start to rise until April or March of 2008. The timeframe is all wrong. Of course, if gas prices were truly the cause of the great recession, when gas prices fell in late 2008 and early 2009, the economy should have picked right back up immediately. That didn’t happen.

The exact cause of the great recession is a tale of complex financial tools (credit default swaps, CDO’s, synthetic CDO’s and mortgage-backed securities) and massive over-leveraging. The great recession had little or nothing to do with gas prices. I don’t know what Rick Santorum is smoking, but when I have a week off I would like to have a kilo of it. I guess for Rick desperate times call for desperate measures. He has to win Michigan or his bid for the presidency is over.

By |2012-02-27T20:30:20-04:00February 27th, 2012|Economy, Party Politics|Comments Off on So, Santorum said what?

Grab bag – Friday

  • The art of debate in this country has died over the last 30 years. Jimmy Carter and Ronald Reagan were probably the last presidential candidates that actually had real debates. Since then, we’ve had organized photo opportunities. Two candidates will stand on the same stage and recite memorized talking points. Today there will be a lot of discussion about the Harry Reid – Sharron Angle debate. The bottom line is that very few voters will actually see the debate and decide their votes based on the merits of their arguments. The undecideds will continue to be undecided. Those who support each candidate will continue their support in spite of a good or a poor performance.
  • The Obama Administration has been placed in an interesting position over the “don’t ask, don’t tell” policy. They don’t want to alienate the armed services. On the other hand, they really want this policy to go away.
  • Interesting green energy initiatives/ideas. Hopefully something will come of them.
  • Securitizing home mortgages never sounded like a good idea to me. It sounded like a great way to make money for Wall Street but not necessarily a great thing for United States or the American homeowner. It appears that all 50 states are looking into home foreclosures. Paul Krugman has moreNow an awful truth is becoming apparent: In many cases, the documentation doesn’t exist. In the frenzy of the bubble, much home lending was undertaken by fly-by-night companies trying to generate as much volume as possible. These loans were sold off to mortgage “trusts,” which, in turn, sliced and diced them into mortgage-backed securities. The trusts were legally required to obtain and hold the mortgage notes that specified the borrowers’ obligations. But it’s now apparent that such niceties were frequently neglected. And this means that many of the foreclosures now taking place are, in fact, illegal.

More from Political Animal:

  • And in a rather classic example of why I think the notion of conservative populism is silly on a fundamental level, Glenn Beck urged his followers today to start sending donations directly to corporate interests so the U.S. Chamber of Commerce can buy more elections for far-right candidates. The minions took their orders well — the Chamber’s online donation page crashed today after regular folks tried to give their money to the already-extremely-wealthy business lobby.
  • A clip-and-save item from Jonathan Cohn on health care reform: “[F]or the sake of my friends at Fox News and anybody who might be listening to them, here are three basic questions to ask every time you hear a story about changes the Affordable Care Act is unleashing: 1) Is something actually changing? 2) Is the change related to the Affordable Care Act? 3) Is the change really for the worse?”
  • Larry Mishel explains the stimulus debate very well, with a helpful metaphor.
  • Daniel Luzer: “How much can you pay for college? Remember when $50,000 a year was a lot of money? Now that’s not even surprising. Cost is still going up, a lot, and now $60,000 is right around the corner.”
By |2010-10-15T06:38:49-04:00October 15th, 2010|Civil Rights, Economy, Elections, Energy, Environment, Party Politics|Comments Off on Grab bag – Friday
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