The Priorities of the Catholic Church

So I see that the Catholic church and other Catholic groups are going to step up their protests about immoral and unChristian things being proposed or perpetrated by the US federal government.

"Some unjust laws impose such injustices on individuals and organizations that disobeying the laws may be justified," the bishops state in a document developed to be inserted into church bulletins in Catholic parishes around the country in June…

I am really psyched to see the Catholic church really putting itself on the line to defend Christian values.  I wonder what they're protesting in such an unprecedented way?  Could it be the recent proposed shredding of the safety net for the poor?  The use of unmanned drones to assassinate people in foreign countries without due process or trial?  Worry about the Supreme Court striking down the Affordable Care Act, thus denying health insurance for 30 million people?

Nope.  The most important concern for the Catholic Church is apparently that ObamaCare will require that all health insurance cover contraception.  Contraception! Which is used by 95% of Catholics.

Look, I'm not Catholic, and maybe it's not politically correct for me to criticize such a holy institution.  But I'm just outraged by the insistence of the church in focusing all their moral energy on contraception and abortion, while the plight of the poor is being so threatened in today's America and while our military is killing so many people in questionable circumstances abroad.  Didn't Jesus have lots to say about helping the poor and about non-violence?

The Pro-Austerity Argument Evolves

A friend pointed me to this example by someone named Russ Roberts of the evolving argument of pro-austerity forces in the face of the obvious failure of their policies in Europe.

if you’re going to claim that the virtue of “slashing government spending” has been “overwhelmingly refuted by the experience of the last two years” you ought to at least provide some evidence that there have been spending cuts in the last two years.

He goes on to point out that in fact spending has not really been "slashed" as Krugman and others keep saying it has.  Krugman himself has a short answer to this argument relating to the UK, and another relating to Ireland here.

So the argument of the Austerians now is that we never really tried Austerity, just like the Keynesians in the US complaining that we never really tried stimulus. The political world is full of half-measures of course. One point that is lost here is that austerity in Europe has meant higher taxes as well as cuts in spending, whereas in the US the anti-tax jihad of the GOP makes that impossible. In that sense it's apples and oranges a bit.

...which is why the only way to look at it fairly is to talk about relative austerity and relative stimulus, i.e. those policies in relation to other places, comparing results. Since virtually everyone is doing badly, all we can do is look at who is doing worse and try to discern why. The US didn't really do stimulus, since federal spending was largely offset by state/local cuts, but there was still relatively more stimulus than was seen in Europe at the time. And I'm willing to accept that austerity hasn't been fully and enthusiastically followed to the nth degree in Europe, and yet Europe has been relatively more austere than the US. And within Europe, some places were really austere, and some places weren't. My understanding is that the places that really cut hard did worse than those that cut less. The poster children for austerity- Spain, Ireland, Latvia- have had disastrous results.

What will it take for the Austerians to admit that their policies aren't working?

Outrage

So the news lately is that Wall Streeters are mad about how President Obama criticizing private equity.  Mitt Romney shoots back that Obama is hating on success.  I guess Romney has to come back with something when he's being directly criticized, and of course we've learned to expect him to lie about what's being said- after all he is running the most mendacious campaign of all time.  But I would have hoped that the smart guys on Wall Street would be able to understand what the President is trying to say.

The message is a little nuanced- I thought these smart guys were able to handle nuance! Private Equity is all well and good, but its goal is to make money for investors. Mitt Romney was good at that. Its goal is not to creat jobs, and in fact Bain often made money by cutting jobs. That's not a criticism of Bain or private equity- it's just a fact. Bain should keep on making the economy more efficient- more power to 'em! But if the issue is creating jobs in a large country, a private equity manager just has no relevant experience at all to do so. Saying that isn't disrespecting private equity or banking- it's just pointing out that running a business and stewarding a huge economy is apples and oranges, and we should beware what happens when we mix them.

Mitt Romney does know what government regulation he wants and doesn't want that will unleash the kinds of businesses he knows, and so I don't doubt his administration will be great for Wall Street. But as we saw during the Bush II administration, what's great for Wall Street can be horrible for the rest of us.

How can Wall Streeters deny that their sector caused a disastrous recession? That doesn't make them bad people, unless of course they keep insisting that we should return to the exact same policies that got us there in 2007. I'm not outraged by the finance industry making tons of money without producing much of value for the economy as a whole in the '00s- that's human nature, to take what you can get, and it's capitalism. But I am really outraged by their lack of chagrin in the aftermath.  They're outraged now that the Democrats want to regulate them in order to avoid another banking sector failure leading to another taxpayer-funded bailout.  Surely the Masters of the Universe can see that without any change at all it's just a matter of time before the next bubble and bust happens again, and surely they understand that this means they have an implicit government guarantee against failure that they don't pay for.

 

The lack of insight among this sector of the economy makes me want to throw up.

Too Big to Fail Meta-Post- UPDATED

Watching Up with Chris Hayes this morning on MSNBC, and he has a panel talking about the JP Morgan $2 Billion loss and the Volcker rule, etc.  I love the way Matt Taibbi looks at this, as my readers might suspect:

If you’re wondering why you should care if some idiot trader (who apparently has been making $100 million a year at Chase, a company that has been the recipient of at least $390 billion in emergency Fed loans) loses $2 billion for Jamie Dimon, here’s why: because J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it’s everyone’s problem.

Now I've never worked in the Finance industry and I obviously don't understand the intricacies of hedging and credit defaults and the rest.  But I understand the meta story: really big banks have been making risky trades, which often make them and their traders enormous amounts of money.  But any business that allows one to make billions of dollars can also cause one to lose billions of dollars.  In the case of the finance industry, these large institutions are so important to the economy and their failures so catastrophic to the rest of us, that our government can't allow them to go under.  That's why the bailout of 2008 was necessary- the recession would have been much worse if the bailout hadn't been initiated.  So we have a system in which upside risk is privatized in the form of huge salaries and bonuses for traders and bank executives, and downside risk is all on the taxpayer, who can't afford to let the banks fail.

So we have to regulate somehow, but it's really hard because these businesses and trades are really complex.  And bankers are really smart people.  And regulators make about 1% of what bankers and traders make, so the smartest people are obviously going to become the bankers, while the less smart people are going to have to settle for being government regulators.  They can't keep up.

So here's the meta-answer: Banks have to be less profitable.  That's what they're fighting of course, as they lobby against the Volcker rule and other regulations of Dodd-Frank.  They keep making the argument that we're making it much less profitable to be a banker- and they're right!  That's the whole freaking idea!  But they're trying to convince the public that gargantuan profits can keep emanating from the finance sector while risk is controlled.  But as all my friends in Finance keep telling me, you can't make a lot if you don't risk a lot.  We have to force TBTF banks to risk less, make less, and be more stable.  I don't know the industry well enough to figure out how to do that, but I know that if we're successful, it should piss off the bankers.  That means we're doing it right.

UPDATE: A correspondent emails me to say that it would be foolish to mandate that banks become less profitable. Of course he's right- that's not what I'm trying to suggest. Rather, my point is that any effective regulation will necessarily lead to banks being less profitable, as their profitability is inextricably linked to their riskiness. But I didn't mean that the government should do something so leadfooted as to mandate a limit on profit. Just that the regulations we need will lead to less profitability.

Deficit Causes (Again)

Found this update of that well-known old chart on causes of the federal deficit.

I know, I know- stop whining about Bush and go fix the problem, you say.  Sounds good to me- I propose solving the problem: by reversing the Bush Tax Cuts and winding down the military wars overseas.  Or we could listen to Mitt Romney and just make the deficit much worse.

Rhode Island's Solyndra

Interesting news here about Curt Schilling's video game business, which appears to be failing after it was lured to Rhode Island two years ago with tax breaks and loan guarantees by that state.  I'm an avid listener of sports radio, and I recall the conservative sports guys Dennis and Callahan on WEEI going on and on about the foolishness of Massachusetts pols for letting such a slam-dunk business get away along with its inevitable tax revenue and hundreds of jobs.

Well now we see the legitimate, oft-heard conservative argument that the government shouldn't be picking winners and losers in the economy.  So here we have the Solyndra of the state of Rhode Island, but since it's a notable conservative athlete rather than solar energy, I doubt we'll hear much criticism from the Right.

By the way, I should note that although Schilling is an outspoken Republican, as an athlete he remains a favorite of mine.  He's a blowhard, but I like that he says what's on his mind.  He may not, however, be much of a businessman- most ex-jocks typically aren't.  It's not like he had years of learning how to run a business after all- he was busy playing baseball.

Then again, maybe he's not such a bad businessman after all by the standards of our day and age.  He used corporate welfare to grow his business at the expense of taxpayers.  He probably didn't lose much of his own money in the venture, and for all I know he may have come out ahead.  Like Mitt Romney a little- not very productive for society, but he made himself plenty of cash.

Still Can't Get Past the Crazy- Budget Deficit Edition

Another futile discussion with my wingnut correspondent today.  I tried to argue with him about the deficit, but I just can't get past the crazy.  Then I come home to read Jon Chait today make my point in reference to Mitt Romney's last speech.

In Romney’s telling, the terms debt and spending are essentially interchangeable. When presented with Obama’s position — that the solution to the debt ought to include both higher taxes and lower spending — he rejects it out of hand.

Just like my debate today.  My correspondent kept pointing out that liberals only want to spend more of our money.  I noted some facts about the federal budget:

1. 1999: budget was in surplus
2. 2001 & 2003: enormous tax cuts were passed by Republicans
3. Republicans started Iraq War without funding it
4. A Republican congress passed Medicare Part D, prescription drug coverage in (I think) 2006, without funding it. A Republican president signed it
5. By 2008 the budget was in a huge deficit, made worse by the financial crisis

Now it seems sort of obvious to me that if we want to get back to a balanced budget, we ought to think about reversing the things we did that took us out of balance. I want to reverse #2. #3 is winding down, fortunately. #4 I like and want to keep, but I think we should fund it with taxes instead of borrowing from our children.

But hey, Republicans have some budget plans:

1. Cut taxes even more (oops that goes the wrong direction)
2. Increase military spending (oops, that does too)
3. Make Medicare into a voucher program, making it unaffordable over time to more and more seniors. But don't start that right away, only for people under 55 (so that won't help at all for 10 years, and even then it just offloads the medical cost problem to individual seniors)
4. Destroy most programs that benefit the poor, all of which have been around since the '60s and '70s and none of which were started by Obama or even by Clinton.
5. End ObamaCare (oops, wrong direction again since ObamaCare includes taxes that make it budget neutral or even better)

So in this Paul Ryan plan, supported by nearly every Republican in Congress, only #4 actually helps the budget, while all the other parts make the deficit worse. And #4 doesn't include enough dollars to make up the difference, so the whole plan relies on what Paul Krugman calls the "magic asterisk" of either undefined (i.e. never gonna happen) cuts or ridiculous economic growth that only the most feverish supply-siders believe will actually happen.

 

To put the whole thing more simply: Republican talking points talk about the deficit only in terms of spending, even though the major change that has caused the deficit is a tax cut.  They won't even talk about raising revenues, but still scream in panic about the deficit.  Of course, there's a simple reason why:

 

Republicans don't really care about the deficit.  It's a sucker's game, always has been.  Here's a prediction: If Republicans sweep in the Fall, the deficit will go up, not down.

Gay Marriage Comes of Age

So now President Obama has come out in favor of gay marriage- he has finished evolving I guess.  Some commentary touts his "courage" in taking a stand that may cost him votes.

Absurd.  It seems clear that the President has believed in gay marriage for a long time.  Basically everyone on the progressive side has come to that position over recent years, and I'm sure Obama is no different.  So why did he come out with it now?  Conservative commentators are right to point out that it's political calculation; his team believes this will be gain him more votes and/or money than it will cost.  If they felt otherwise, he would have kept it under his hat a little longer.

Of course, it happens to also be the right thing to do.  It's not worthless to take the view that one can look back on in thirty years with pride.  I wouldn't want to be Mitt Romney's grandkids in thirty years, embarrassed that their grandfather took a position in 2012 that in 2040 will be universally seen as bigoted.

As a follow up to my point about how I can't get past the Crazy from the Right, here's a good blog post from David Frum, the apostate conservative blogger.  It makes the point that conservatives keep arguing against straw men, extolling the virtues of capitalism vs. socialism, as if there's another side that's proposing full socialist solutions.  The summation line is the one I really liked:

All these questions are raised within the context of an almost universal national commitment to market economics. If we didn't live in a market economy, these questions wouldn't arise in the first place. To answer them by invoking the superior merits of capitalism over socialism is like an auto mechanic answering questions about a malfunctioning car by launching into a speech about the superiority of the automobile over the horse as a means of conveyance.

Exactly.

The American Right's Middle East Peace Plan: The One State Solution

Wow.  This article from an Illinois Republican Congressman really is striking.

It has been 64 years since the United Nations General Assembly approved the Partition Plan for Palestine and the struggle to implement a “two-state solution” began. Today, we are no closer to that end. That reminds me of the definition of insanity: doing the same thing over and over again and expecting different results. By that definition, everyone who continues to cling to the delusion of a two-state solution is insane. There is no such thing as a two-state solution. It cannot work, it has not worked, and it will not work.

That sure is depressing... and I understand where he's coming from.  The Palestinian polity seems so hell-bent on Israel's destruction that the Two State Solution often seems beyond reach.  Israel isn't helping the situation much either by continuing to build settlements in the West Bank, making an eventual Palestinian state unviable.  For me, when confronted with this problem, I like to point to the intractable world problems of my younger days, in Northern Ireland and South Africa- two places in which peace and justice seemed completely hopeless.  Now both places are at relative peace.  Does that mean Israel and the Palestinians are fated to make peace?  No, not at all, but it means it's possible, with enough patience and enough hard work and enough motivation from both sides.

Representative Joe Walsh, however, must disagree- he's given up on peace.  So he's turned to another solution: Israeli dominion over Palestinians forever:

It is time to let go of the Two-state-solution insanity and adopt the only solution that will bring true peace to the Middle East: a single Israeli state from the Jordan River to the Mediterranean Sea.  Israel is the only country in the region dedicated to peace and the only power capable of stable, just, and democratic government in the region.

 But don't worry; the Arabs will be fine with this arrangement:

Those Palestinians who remain behind in Israel will maintain limited voting power but will be awarded all the economic and civil rights of Israeli citizens.

So Rep. Walsh's definition of "democratic government" apparently is not in conflict with a system that denies full voting rights to residents who happen to be Palestinians.  I have a sneaky feeling that the Palestinians might not quite see it that way.

More evidence here that the Republican party in the US, in its zeal to demonstrate its support for Israel, has staked out a position much more extreme than any but the most wacked-out religious zealots in Israel.  I don't think Israel needs friends like Joe Walsh.

Responses to My Wingnut Correspondent- Liberal Spending Edition

So I do have a little addiction problem.  I have this conservative correspondent whom I've never met- well, it might be more accurate to call him a Reactionary than a conservative.  I don't get a chance to talk much with people like Ron, a true Tea Party guy and caricature of the movement, right down to the "covering my ears, don't bother me with facts" method of debate.  He's not a Christian fundamentalist, so I guess in that sense he's not quite the face of the far Right, but he's the closest I've come to.

Anyway, Ron bombards me with the Wingnut emails that ping around his circle, and I spent a lot of energy a while ago refuting them in turn.  Last year the group we were engaged in broke up, which has been a great blessing, as we were just going around in circles in our debates.

But I mentioned my addiction problem: although our larger group is finished, I emailed him a few articles when I just couldn't resist, and now I'm back on his list, receiving a half dozen emails a day with the same old stuff.  I'm getting better at ignoring most of them and shortening my responses to the ones I do answer (this is the Harm Reduction Model, for those of us in the addiction field- I should really be abstinent, but I'm trying to just lower the intensity first).  But this got me thinking: since I want to answer these same old memes as they come across, maybe I could compose some comprehensive blog posts, keep them bookmarked, and just send them back to him every time he sends me the same old point. 

So here's my first attempt.  I received this note today:

When is it enough?

When does an alcoholic get enough alcohol?

When does a drug addict get enough Cocaine?

When does an obese person get enough Food?

When do Democrats get enough of our Dollars?

NEVER!

They are all hooked! When you're hooked it is

NEVER ENOUGH!

The only way to stop the abuse is for US to

TAKE the Alcohol, Drugs, Donuts and Dollars AWAY!

We can do the Dollar part in November,

If we don't they'll take every Dollar,,they can't help it!

(This guy is fond of large font, bold letters, and the color red, though curiously this one wasn't in red)

So I guess the point here is that Democrats specialize in spending tax money, and can't help themselves.  Let's look at the numbers a bit.  Here's a graph of total US federal spending since 1970:

Now it looks to me like there's a pretty steady increase in spending for the most part, with an increase in the trend line during the mid-2000s.  When Republicans were in control of congress and the presidency. 
But that graph is hard to read.  So here's something I had saved from a previous blog post, which lays out the change in government spending during the first terms of the last five presidents:



Now to be fair, presidents shouldn't get all the credit or blame for budgets passed by congress on their watches.  But they ought to get some of the credit/blame, right?  This graph shows that all three Republicans presided over much greater spending growth than the Democrats during their first terms.

But what about the exploding deficits under Obama, you ask? Well, that's not really about government spending- it's about revenue. Here's recent tax receipts:

The Great Recession murdered tax receipts- that's why the deficit is so big. On top of that, taxes have been slashed as part of the stimulus packages that have been passed.

So recent history shows that Democratic presidents sign budgets that grow spending much slower than Republicans do.  In the current environment, Democrats have proposed no big new spending outside of the Affordable Care Act, which is fully paid for through various increased taxes.

So when you look at the evidence, if you want a party that will be more likely to reduce the deficit, it looks like a Democratic president is the way to go.

Now maybe the Republican party has changed.  But keep in mind that Mitt Romney's campaign and Paul Ryan's budget proposals aren't at all specific about the spending cuts they have in mind, outside of slashing programs for the poor.  But to make up for all their very specific and enormous tax cuts for the wealthy, there isn't enough money in social spending to make the math work.  Until their plan has some meat on them, we shouldn't be buying.

"Gay Republican" Becomes an Oxymoron

How could any gay person vote for a Republican?  I mean, look what just happened to this guy:

As the fallout over the resignation of Mitt Romney’s openly gay foreign policy adviser continues today, much of the commentary is centered on the question of whether Romney’s aides pushed Grenell out in response to the uproar among social conservatives over the appointment.
...
“The Romney campaign should have spoken up publicly in defense of Rick against the attacks over the past two weeks,” GOProud’s executive director Jimmy LaSalvia said in an interview with me just now.

“This was an opportunity to send an important message that Mitt Romney wants everybody to get behind him and to support his camapign,” LaSalvia continued. “They let that opportunity pass.”

So the Romney campaign hired an openly gay man to advise on foreign policy issues, and the religious fundamentalist wing of the party took him out.  In the Republican coalition, there's just no place for openly gay people right now.

But what continues to strike me is that GOProud still exists.  I mean, who are these people?  I understand how hard it would be if you strongly believed in low tax rates on rich people but happened to be gay- neither party fits you very well.  But while you'd hate the economic policies of the Democrats, that still seems preferable to voting for a party that says repeatedly that it hates you.

On one hand, I think that if President Obama were stronger on gay issues he might have 100% of the gay vote, but on the other hand I can't imagine it really matters- any gay person who's still in the GOP is completely unhinged.