Occupy Wall Street and Rolling Stone

Matt Taibbi at Rolling Stone is just about my favorite writer on the internet.  This piece is great:

And we hate the rich? Come on. Success is the national religion, and almost everyone is a believer. Americans love winners. But that's just the problem. These guys on Wall Street are not winning – they're cheating. And as much as we love the self-made success story, we hate the cheater that much more.

We cheer for people who hit their own home runs in this country– not shortcut-chasing juicers like Bonds and McGwire, Blankfein and Dimon.
That's why it's so obnoxious when people say the protesters are just sore losers who are jealous of these smart guys in suits who beat them at the game of life. This isn't disappointment at having lost. It's anger because those other guys didn't really win. And people now want the score overturned.
All weekend I was thinking about this “jealousy” question, and I just kept coming back to all the different ways the game is rigged. People aren't jealous and they don’t want privileges. They just want a level playing field, and they want Wall Street to give up its cheat codes...

He goes on to describe the many ways in which the banks have been handed free money and bailed out in a myriad of ways from their stupid decisions, while regular Americans have no such advantages.

One thing about OWS that conservatives don't seem able to grasp is that it's a leaderless movement, completely unhierarchical.  It's incredibly diverse, so while there are really cool, smart people like this:

...there are also plenty of crazy Stalinists, heroin dealers, and apparently even a stray Nazi or two.  Right now the best thing the movement is doing is building momentum and getting the issue of inequality into the national conversation.  I'm not sure if anything else will come of it, but if not that's still a pretty good accomplishment.

The comparison to the Tea Party is interesting.  There are plenty of similarities.  But one key for me is that the Crazies in the Tea Party have completely taken over the larger conservative movement.  The Republican presidential candidates are completely unwilling to cross even the most extreme Tea Party talking point.

(I love that sign, from a Tea Party rally.  It's a cheap shot I know.  Stupid protesters are all over the place at both OWS and Tea Party rallies- I concede that readily.)

I don't think that any significant Democrats, on the other hand, are likely to propose forgiving all college loans or socialized medicine.  The kooks on the Left are on the fringe, while the kooks on the Right are in charge of the GOP.

Filibuster Nonsense

James Fallows at the Atlantic has been on the warpath regarding the Republicans' constant use of the filibuster to stop any business from getting done in the Senate, in a quite unprecendented way, and of the mainstream media's inability to report this as the outrage that it is.  He calls it the "False Equivalence Watch" and I agree wholeheartedly.

But I have one quibble: Democrats could do something about this.  The tactic started being used in 2009, when we kept reading that Senate rules could be changed at the start of any new session by majority vote.  Well, the Democrats were still in control of the Senate in 2011 at the start of this term, and they didn't do anything about the filibuster.  President Obama hasn't made a rash of recess appointments in order to force the issue and get his picks into the positions in which he wants them.

As I've said before, if there is a Republican sweep in 2012, and Democrats start using the filibuster in this way to slow things down, the GOP will immediately end the filibuster.  Democrats will howl "unfair!"  And I'll have to restrain myself from driving to Washington and punching each of them in the face for their hopeless naivete. 

If there is somehow a Democratic sweep in 2012, I dearly hope the Democrats will end the filibuster, but I doubt they will.  They just don't have the courage of their convictions.  We liberals deserve our minority fate if we aren't willing to fight.

A Quick Point about Tax Changes

I just need to make one point that is sort of obvious, but seems lost among many Republican tax plans:

When you say that you have a plan that lowers taxes on "job creators" but is also "revenue neutral", that means (by definition) that you favor raising taxes on lower or middle income earners.  Right?

Foreign Policy Thoughts

Recent good news on the foreign policy front includes the end of Qaddafi and the looming pullout of US troops from Iraq. Andrew Sullivan captures this nicely:

I think of the actual record of this president. He has drastically tightened the noose around Assad and Khamenei and avoided the war the neocons so desperately want with Tehran. And he has ended the war in Iraq as he promised to, and concluded a war with a victory many of us doubted at the get-go, without another quagmire, and with considerable allied and Arab support.

The good news is that my predictions of doom in Libya have been proven wrong.  Thrilled to be mistaken!  Among his foreign policy and national security accomplishments, President Obama has now seen:

• A successful conclusion to the Libya intervention, with zero American casualties
• A pullout from Iraq as agreed to three years ago
• The death of Osama Bin Laden and other Al Qaeda figures
• No major terror attacks in the US

Of course, the Republicans are never happy with anything if Obama's name is attached.  Watching Mitt Romney dodge and weave as he tries to tell everyone how disastrous this foreign policy goes is kind of fun viewing. 

However, I have big criticism in one area, from the Left: targeted killings by drone are way up, and the US has used remote missiles to kill American citizens on foreign soil without any due process.  Now the Right isn't going to condemn this- they're fine with killing more people to protect America.  In fact I'm not squeamish about using military power to protect us, but I don't like the implications of this: If it's OK for an American president to order an American citizen in Yemen killed based solely on his say-so, with no due process whatsoever, what's to stop him from ordering any of us killed anywhere?  I know that sounds paranoid, but really what's to stop him legally?  I read here from Glenn Greenwald that a US drone strike killed not only Al-Awlaki, but a subsequent strike killed his 16 year old son.

So I guess Obama isn't squeamish about killing people.  He's not squeamish about deporting Illegal Aliens either; the administration has deported more than any administration ever has.  Maybe he takes these positions to demonstrate that he's not the crazed Leftist that Republicans say he is.  More likely he believes in doing it.  And there's nobody but a few aging hippies to protest it.

Gilad Shalit

Welcome home to Gilad Shalit, the Israeli soldeir kidnapped by Hamas and held for 5 years in captivity in Gaza before being released this week in exchange for 1000 Palestinian prisoners, many of them convicted murderers.

There's been lots of debate about whether Israel should have done the deal.  It's a steep price to pay, and of course encourages future kidnappings of more Israeli soldeirs and civilians.  It's certainly clear (as it has been before) that Israel "negotiates with terrorists", and it even came into the recent Republican debate, as candidates were asked about hypothetical deals for American prisoners.

But I have to wonder: does release of these murderers, even so many, really imperil Israel's security?  I've read that the true leaders were not among the released (Bargouthi being the most well-known).  But it seems to me that there is no shortage of young men and women in Gaza willing to die if only they can take some Jews with them into paradise.  I don't think a shortage of volunteers is what limits terrorism by Palestinians- it's opportunity and means.  It could be that letting out a bunch of grunts won't have much effect on the operational capability of Hamas or Fatah.

Just speculation from here- I don't pretend to be knowledgeable about these types of security matters, but those are my thoughts anyway.

GOP Debate Thoughts (well, really Mitt Romney thoughts)

Tuned in to part of the debate last night, and saw more highlights this morning.  Here are some thoughts:

• Mitt Romney is the only one in there who sounds like he knows what he's talking about.  Everyone else on stage sounds either crazy or stupid or both.
• One of the reasons Romney doesn't sound crazy is that even when he's saying crazy stuff he's so obviously pandering that sane people are convinced that he's lying about his views.  I think the crazies see this too, however, which is why they don't trust the guy.
• There's a good chance the Republican nominee will win in 2012.  This is true no matter who is nominated- if the economy goes into a double dip, then Obama loses no matter what.  So although I won't be voting for any of these people (I'm not voting for a pro-life, low taxes, end-the-welfare-state candidate), I will be rooting for the one who will be the least destructive to the country, and I guess that's Romney.
• The problem for him is this: yes he's pandering when he supports Paul Ryan's economic plan- he must know that the numbers don't add up and it will lead to higher deficits- but when he's in office he may well be straitjacketed by his campaigning and the rage of his base.  Look what happened to GHW Bush when he got sane and broke his "read my lips- no new taxes" pledge- he was voted out of office and forever hated by the zealots even though that tax compromise led to the Clinton-era surplus.  A President Romney's first priority will be to get re-elected.  I'm not sure how he finds that path.  If he follows the Republican platform as it's laid out now, the economy will be disastrously affected.  If he gets technocratic and realist, he loses the crazies in his base.
• I'm considering the possibility that I'm just wrong about the economy.  Maybe Keynesian economics is dead, and austerity and balanced budgets will work after all.  Maybe President Romney will usher in a new Morning in America.  If he wins, I'll be hoping so, but I won't be very optimistic.

Austerity vs. Stimulus- the US vs. the UK

My thoughts recently were kicked off by this NYT editorial:

Austerity was a deliberate ideological choice by Prime Minister David Cameron’s ruling coalition of Conservatives and Liberal Democrats, elected 17 months ago. It has failed and can be expected to keep failing. But neither party is yet prepared to acknowledge that reality and change course. Britain’s economy has barely grown since the budget cuts began taking effect late last year. The most recent quarterly figures showed the economy flat-lining, with growth at 0.1 percent.
New figures released this week reported Britain’s highest jobless numbers in more than 15 years. Independent analysts expect unemployment — now 8.1 percent — to keep rising in the months ahead. The government has kept its promise to slash public-sector jobs — more than 100,000 have been lost in recent months. But its deficit-reduction policies have failed to revive the business confidence that was supposed to spur private-sector hiring.
Drastic public spending cuts were the wrong deficit-reduction strategy for the weakened British economy a year ago. And they are the wrong strategy for the faltering American economy today. Britain’s unhappy experience is further evidence that radical reductions in federal spending will do little but stifle economic recovery.

I sent this to a conservative sparring partner of mine, and he responded with two comments (which I've paraphrased):

1. Applying the logic of the pro-stimulus forces in the US, one might say that things would be much worse in the UK if not for austerity.  Maybe cutting government saved two million jobs and they'd be in a Depression if they hadn't gone that route.
2. The UK and the US are both growing anemically.  Why would the Times look at one and say that policy has failed, while looking at the other and say their policy has succeeded?

As to the first comment, yes austerity is intended to create/save jobs just like stimulus is. I think that advocates of either policy need to present a model as to how this happens, and then find historical or current day examples that support the model. The view from 50,000 feet is important, yes, but you have to describe a plausible causal explanation. The causal explanation for austerity was that it would restore confidence and investment- this clearly hasn't happened. The formula for stimulus is that it would spur growth by stimulating demand.  I think there's more historical evidence for this over time, though it hasn't been tried at enough scale this time around.

My understanding is that the UK's situation got notably worse after they switched to austerity measures. In the US it seems that the economy was growing when there was (very moderate) stimulus (I say very moderate because states cut back at the same time that the feds stimulated, so the overall effect was small), and is now stuck in the mud with stimulus completed.

The thing about austerity specifically and Hayekian economics in general as I understand it is not that government action of the right kind in a down economy works wonders, but rather that the business cycle is fated to play out naturally and government is just counterproductive or at least unproductive. So in that case, austerity isn't a way to "kick start" the economy, but rather a way to stop interfering and let the business cycle bring it all back eventually through creative destruction. But in our current depressed economy it's pretty clear nothing is coming back on its own for a long time. 

 

Now I still respect the point- maybe it's true that government just can't help- but the theory doesn't say that these policies will goose the economy and speed up the recovery. As I understand it, conservative economic measures being proposed now are not intended to spur recovery, just make the eventual recovery that happens on its own more sustainable. If so, it's pretty clear that austerity specifically and conservative policies more generally are being oversold quite a bit right now.  I don't think it's too likely that ending some regulations is going to do much in the short term for a demand problem in the economy, and I don't think any serious conservative economist would say that either.

As to the second comment, it's a good point- the US isn't going great either. But things are worse in the UK than they are in the US.  This seems like an apples to apples comparison:

2011 Q2 growth in the UK was 0.2%, while in the US growth in the same quarter was 1.30%. Now on the one hand both countries are doing pretty badly. On the other hand, US growth was 6.5 times better than the UK's. Now I admit that is only one data point (though it's the first one I came across and compared googling, so I didn't cherry pick), and of course there are so many factors in all this (the UK might be much more affected by the European crises than we are, the UK has socialized medicine and a larger welfare state, etc. etc.) but it's something.

 

It is so difficult to get past one's biases in these matters.  The way I'm trying to get past mine is to set parameters at the outset regarding what constitues evidence of effectiveness, and then follow that evidence through, come what may.  We'll get a great chance for that if there is a Republican sweep in 2012 and they implement austerity as they say they will.  I think that will lead to a double dip recession in short order.  If the GOP does win and does implement the policies they're running on, and it works?  I'll have to rethink my positions.

 

In the current environment, however, I'm trying to do the same thought experiment by comparing different responses to the crises in different countries and seeing what happens.  Ever since the UK announced austerity, I've been watching them in contrast to the US to see whether that works better than the somewhat-more-stimulus approach of the Obama administration.  We'll keep watching.