Governor Good-Hair flushes out the Fed for traitors & threatens to rough 'em up if they tread into Texas

Rick Perry sees treachery and treason coming from the Federal Reserve Chairman Ben Bernanke...and, by implication,  conservative economics guru Milton Friedman. A sign of the times in a Republican party where conservatism has been almost wholly supplanted by rabid reaction. The God 'n Guns Governor suggests a pretty ugly "Texas welcome" is in order for Chairman Ben.

Milton Friedman can kiss gun-totin' Guv's butt!

Ezra Klein has it at WaPo "WonkBook":

What potential policy maneuver is a major presidential candidate calling "almost treasonous"? Is it a) going to war without explicit authorization from Congress, b) doing nothing about the 15 million unemployed even as their temporary joblessness hardens into a structural disadvantage, or c) purchasing long-term Treasury debt in order to push interest rates down?

Jobs and infrastructure investment - Common Sense (and Space Aliens)

With a long, slightly dorky introduction that involves the unifying potential of space aliens(!), Rachel Maddow highlights the political and practical importance of focusing on jobs and rebuilding infrastructure - with comments from Paul Krugman, President Obama and an excellent, down-to-earth discussion with former Pennsylvania Governor Ed Rendell.

Visit msnbc.com for breaking news, world news, and news about the economy

Governor Good-Hair's Texas Miracle?

The most cogent comment about Texas Governor Rick Perry's character may well be the statement by a participant in a GOP primary opponent's focus group who - when presented with evidence that the Governor had given the green light to what increasingly looked like a wrongful death by lethal injection - responded: "It takes a lot of balls to execute an innocent man!"

We're not going to run with that.  Titanic sticks to humbler tasks. We'll merely suggest that it takes a lot of balls to claim - as Perry's been doing - a Texas economic miracle on the Governor's watch. The first two chapters in what looks to be an ongoing series of recommended reading on Perry's jobs record - HERE. And HERE.

The economic (& theological) wisdom of Gov. Perry: "We're going through difficult economic times for a purpose - to bring us back to those Biblical principles of, you know, you don't spend all the money." 

"The best way to get people back to work...is through more government spending"

Can't Democrats get out in front of this guy?

Jared Bernstein, the former chief economic advisor to Vice-President Joe Biden, suggests that the best political strategy for President Obama regarding government spending and the jobs crisis is to simply tell the truth:

There’s an article in today’s NYT on the economic debate within the White House.  The print version—not the online one—contains this quote from an admin official:

“It would be political folly to make the argument that government spending equals jobs.”

Taxes on billionaires are a joke

Channeling the ancient comedian's quip in a New York Times op-ed, billionaire Warren Buffet  analyses the fact of super-low taxes  on the mega-rich and says, "Take my  income...  Please!":

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

The jobs crisis is a national emergency

Former Council of Economic Advisors chair Christina Romer points to the real crisis we're in. It's lack of jobs, not "too much government spending."  Put simply, we're not spending nearly enough to attack unemployment. Further, "structural unemployment" arguments to explain the current crisis are rationalizations to do nothing.  Romer looks back to World War II and explains why - if we're serious about economic recovery - we need measures that will, yes, add to the deficit to fight unemployment.  Why? Because it's worked before:

(F)iscal stimulus can help a depressed economy recover — an idea supported by new studies of the 2009 stimulus package. Additional short-run tax cuts or increases in government investment would help deal with our unemployment crisis.

Flying Pigs: David Frum's "Forum" takes on the Fed's inflation hawks and looks to Sweden's Central Bank for sensible economic priorities and policies

This commentary may seem like pretty nerdy econ-speak, but it's well worth wading through - both for the confirmation that the inflation hawks on the Federal Reserve "aren't even wrong" - in that their preoccupations are nonsense issues in the current economic climate - and the (welcome!) spectacle of neo-conservative "wunderkind" David Frum  (whose hair is on fire at this very moment regarding the descent into near-total idiocy of his GOP confreres) giving apparent blessing to lessons that might be learned from macro-economic policies in the "socialist hell-hole" of Sweden. The post at "FrumForum" is entitled - accurately - Fed Hawks Turn on the Unemployed:

Inflation isn't always evil

The Good Old Days!

"Welcome Inflation Now?" A prominent economist says yes - "a once-in-75-year crisis calls for outside-the-box measures." 

In our current debt-induced economic straits a higher inflation target will help solve some of the intractable problems of too many people owing too much money on undervalued assets:

In a column in The Financial Times this week, Ken Rogoff, the Harvard economist, suggested central bankers consider “the option of trying to achieve some modest deleveraging through moderate inflation of, say, 4 to 6 percent for several years.”

Mr. Rogoff conceded that “any inflation above 2 percent may seem anathema to those who still remember the anti-inflation wars of the 1970s and 1980s.”...

Corporations are people too, my friend!

Mitt Romney makes the case:


Thom Hartmann has another view:

People support higher taxes to reduce the deficit

Grover Norquist rules our world.

Twenty-three polls taken over the last 8 months - including Gallup, Rasmussen, CNN, New York Times, Washington Post/ABC, CBS, Bloomberg and others - show the public supports additional taxes for deficit reduction by margins of more than two-to-one.

The list is HERE, at Bruce Bartlett's "Capital Gains and Games" blog.

"A long malaise seems like the optimistic scenario"

Nobel Prize-winner and former chief economist at The World Bank, Joseph Stiglitz writing in The Financial Times offers a bleak appraisal of the moment: the US can borrow at extremely low rates to make the investments in infrastructure and targeted job-creation that could jump-start economic growth (which is also the key to longer-term deficit reduction), but the politics of austerity make any effective policies or optimistic scenarios impossible:

Pre-crisis, America, and to a large extent the world economy, was sustained by a bubble. The breaking of the bubble has left a legacy of excess leverage and real estate. Consumption will therefore remain weak and austerity on both sides of the Atlantic now ensures the state will not fill the void. Given this, it is not surprising that companies are unwilling to invest – even those that can get access to capital…

"Why didn’t the stock market go up?"

"Cheap Talk" on the apparent paradox of Treasury bonds becoming more sought after as a secure investment in the wake of their "downgrade" by the "geniuses" at S&P:

You might have thought it obvious that the stock market would go down after S&P downgraded US government debt. The bad news about US debt made investors worry, and worried investors are usually less enthusiastic about holding stocks.

But there is something wrong with this view.

Stewart pretty much says it all on "downgrade"

The GOP is bad for business

The GOP: flying on a wing-nut and a prayer.

James Suroweicki, at The New Yorker, argues that the country would be much better off if the Republicans abandoned the political hostage-taking and the Tea Party "crazy train" - and went back to the more respectable and risk-averse  business of simply being corporate lapdogs:

Moody's Mood

That other "big three" ratings agency - which for the record, was just as complicit as the execrable Standard & Poors in aiding and abetting the junk mortgage markets that triggered financial crisis -  has affirmed that the United States has “unmatched access to financing, meaning that the U.S. government can support higher debt levels than other governments” and rates the country "AAA."

Excerpts of the basis of their "AAA" assessment, via New York Times "Economix":

The impact of "starving the beast" on unemployment

Think Progress: "If government payrolls were the same today as they were back in 2009, the unemployment rate would be significantly lower, standing at 8.4 percent, instead of the current 9.1 percent."

Krugman does the math - deficit hysteria doesn't add up

In the wake of the S&P downgrade, the Nobel Prize-winning economist and New York Times columnist Paul Krugman looks at the numbers behind the deficit hype:

Amid all the debt hysteria, it’s worth taking a look at the actual arithmetic here — because what this arithmetic says is that the size of the deficit in the next year or two hardly matters for the US fiscal position — and in fact the size over the next decade is barely significant.

The Triple-AAA Arrogance of Standard & Poors

Former Labor Secretary Robert Reich:

S&P has downgraded the U.S. because it doesn’t think we’re on track to reduce the nation’s debt enough to satisfy S&P — and we’re not doing it in a way S&P prefers.

Here’s what S&P said: “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” S&P also blames what it considers to be weakened “effectiveness, stability, and predictability” of U.S. policy making and political institutions.

Pardon me for asking, but who gave Standard & Poor’s the authority to tell America how much debt it has to shed, and how?

More evidence that nonsense supply-side mantras like "corporate tax cuts" aren't going to move the economy

Clearly the problem driving a weak recovery - in serious danger of a "double-dip" - isn't that corporations don't have enough capital to make the sorely needed investments in jobs:

Source: BEA

Economist Jared Bernstein:

How is this picture consistent with an economy and job market hovering at stall speed? A lot of these firms are able to sell into (and create jobs in) foreign, emerging markets, where growth has been reliably solid in recent years. Others have found ways to squeeze productivity gains out of their incumbent workforce, able to meet current levels of weak demand without adding workers.

The only thing that will get these guys off of their piles of cash is a steady increase in domestic demand - and I don't see that coming soon without the government doing a major jump-start. An infrastructure bank that could begin to green-light immediate repairs and large-scale new initiatives - something that both the labor unions and the Chamber of Commerce have come to agree on - is the only politically feasible proposal in this direction I've seen to date.

Double-Dippin'...and where do we go from what feels like "nowhere"?

This morning we have a banquet of bad news, triggered by a dive in the markets, days after the end of a debt ceiling hostage drama was expected to restore "confidence."

Floyd Norris at the New York Times says what no one wants to hear:

It has been three decades since the United States suffered a recession that followed on the heels of the previous one. But it could be happening again. The unrelenting negative economic news of the past two weeks has painted a picture of a United States economy that fell further and recovered less than we had thought.

On the heels of the Obama White House's former Council of Economic Advisors' head Larry Summers giving us a one-in-three chance of a double dip into another full recession, Business Week offers this bit of gloom from President Reagan's old CEA chief, along with worries of our current Fed chairman:

“This economy is really balanced on the edge,” Harvard University economist Martin Feldstein said in a Bloomberg TV interview on Aug. 2. “There’s now a 50 percent chance that we could slide into a new recession.” Even Federal Reserve Chairman Ben Bernanke has referred in speeches to the risk of an economic stall...

Ezra Klein looks behind the Dow Jones drop, at the much more alarming weaknesses not just in our economy but in our politics - and an inability to conduct an even minimally informed public conversation on the problems we face:

... the Dow Jones isn’t diving because spending has risen, deficits have grown or stimulus policy has changed. It’s diving because of forces Washington can’t control, and in many cases, doesn’t understand very well. How many members of Congress do you think could give a coherent account of what has happened to oil or steel prices over the last three years? Or what’s happening in the Eurozone? Or to the yuan?

A dramatic gap has opened between the economy as Washington sees it -- and wants to intervene in it -- and the economy that actually exists.