Sunday, December 25, 2011

Romney will be the Republican nominee

Right now the four possible Republican candidates for President are Romney, Gingrich, Ron Paul and trailing the pack, Rick Perry. But the recent announcement that Gingrich and Perry failed to qualify for the very significant Virginia primary to be held March 6, 2012 pretty much establishes that Romney is going to be the nominee. Let's look at Ron Paul, Newt Gingrich and Rick perry individually.

Ron Paul

Ron Paul has a good chance to win the Iowa caucuses according to Nate Silver. But he isn't likely to be able to build on that relatively strong showing in Iowa. His support is quite strong, but very narrow. Nate estimates that at the very best Ron Paul might be able to get about one-third of the Republican votes.

Nate bases his opinion on a series of polls. But his analysis comes from before the Republican establishment really started going after Ron Paul because he was beginning to appear to be a real threat to Romney. The growing chorus quoting Ron Paul's racist writings in his 1980's and 1990's news letters will lower these numbers. So will wider distribution of his views regarding pulling American troops back to the American shores and entering a new period of American isolationism.

Ron Paul's fervant supporters will keep him in the Republican nomination process until it ends, but I think Nate Silver's estimate as high as one-third of Republican voters is highly optomistic.

Newt Gingrich

The next candidate to look at is Newt Gingrich. Newt's disorganization has jumped up to bite him big time. He has failed to qualify for the Virginia Primary which is to be held on Super Tuesday March 6, 2012. His campaign needed signatures from 10,000 registered voters, including 400 from each of the states 11 Congressional Districts. The Newt campaign could not organize itself well enough to achieve a relatively small admininstrative requirement by the deadline. This failure demonstrates what most observers already recognize - Newt is horribly disorganized.

It will be interesting to see if Newt's secretive backers and their Super Pacs who have funded Newt's recent rise from obscurity to being considered a viable candidate forthe Republican nomination as an alternate to Romney will continue throught the Spring.

Rick Perry

Rick Perry, the only other non-Romney candidate likely to be able to compete into the Spring, also failed to qualify for the Virginia primary. Like Newt, Rick Perry has had the appearance of being a well-funded alternative to Mitt Romney. His series of gaffes in the debates have clearly demonstrated that he is not Presidential quality, but his deep-pocketed funders in Texas have been willing to shell out the money for the primary season anyway. I'm not sure what his funders thought they were going to buy, but it's pretty sure Rick Perry will never deliver to them. America as a whole is the winner here.

Mitt Romney

Given the weaknesses of Romney's three major opponents and the fact that the Republican establishment is circling the wagons in support of Mitt it looks like Mitt Romney will, as previously expected, be the Republican nominee for President.

Is there a chance this line up will change this spring? There's always a chance, but that chance is getting smaller and smaller. Without the Virginia votes on Super Tuesday Gingrich and Perry are very unlikely to be able to effectively challenge Romney. Ron Paul will never get over 35% of the Republicans and I'll be surprised if he gets 20%. The more Paul moves to become a real challenger the more the fact that he is utterly insane will become clear even to the Republican voters. The field of candidates really has winnowed down that tightly.

Both the tea partiers and the evangelical Republicans are going to make a lot of noise objecting to Romney, but as spring moves forward their hatred of Obama and the hope that Romney can defeat him will damp down that noise. As much as the evangelicals dislike Romney's Mormon religion, they hate Obama and the Democrats worse. They will hold their collective noses and prepare to vote for Romney in November.

The media is going to hate this. Where is the conflict that drives ratings and advertising? No drama Obama isn't going to give it to them, and while Romney will try to lure the media in he doesn't have much to offer them until after the Republican convention in August. That leaves the media in about a six months long silly season from Super Tuesday until the conventions. Then it will be Obama vs Romney - just as has been clear since last summer.

Sunday, December 18, 2011

Gingrich recognizes the Supreme Court's self-inflected political weakness

Newt Gingrich told Bob Schieffer today on CBS' Face the Nation that America does not need to obey orders of the Supreme Court if America disagrees with those court orders. In fact, he goes on to state that Congress can send the Capital Police to arrest 'Radical' Judges.

I have to give Gingrich credit for choosing a detested target which has weakened itself politically during the 21st Century.

The US Supreme Court (SC) has really worked very hard to destroy its' own political legitimacy, especially with their unjustified and clearly illegitimate appointment of Bush as President in 2000 as well as their judicial overreach going far beyond the issues in the case they had decided to accept in the declaration that corporations are people in Citizens United.

Beyond their unjudicial and biased decisions there is also the refusal of the Justices to Clarence Thomas' and Scalia's unethical behavior. Their refusal to act within judicial ethics rules also has weakened the Supreme Court's legitimacy. Most of America - progressive and conservative both - no longer consider the declarations of the nine justices anything more than just the pronouncements of another bunch of cheap politicians. Gingrich

Gingrich, as one of America's most notorious cheap politicians, has recognized all this self-inflicted weakness in the Supreme Court and has stepped in to take advantage of that fact. He is attacking the Supreme Court, and through it the entire American judicial system. Trust a nasty cheap politician like Gingrich to use the self-inflicted weakness of others to try to advance himself.

Unfortunately for Gingrich it won't help him. He simply displays his own lack of character as he attacks the Supreme Court. He offers no analysis or correction to the court. All he is doing is showing off his own (imagined) intelligence as well has his own inability to function effectively in government.

Friday, December 16, 2011

Ron Paul, failed Austrian economics, and the GOP

Here's a lesson in Ron Paul's Austrian economics. Paul Krugman points out that Ron Paul has been consistently wrong in his economics, but that for some strange reason the GOP has decided to abandon its earlier good sense and join him in his pit of ignorance.
Mr. Paul identifies himself as a believer in “Austrian” economics — a doctrine that it goes without saying rejects John Maynard Keynes but is almost equally vehement in rejecting the ideas of Milton Friedman. For Austrians see “fiat money,” money that is just printed without being backed by gold, as the root of all economic evil, which means that they fiercely oppose the kind of monetary expansion Friedman claimed could have prevented the Great Depression — and which was actually carried out by Ben Bernanke this time around.

O.K., a brief digression: the Federal Reserve doesn’t actually print money (the Treasury does that). But the Fed does control the “monetary base,” the sum of bank reserves and currency in circulation. So when people talk about Mr. Bernanke printing money, what they really mean is that the Fed expanded the monetary base.

And there has, indeed, been a huge expansion of the monetary base. After Lehman Brothers fell, the Fed began lending large sums to banks as well as buying a wide range of other assets, in a (successful) attempt to stabilize financial markets, in the process adding large amounts to bank reserves. In the fall of 2010, the Fed began another round of purchases, in a less successful attempt to boost economic growth. The combined effect of these actions was that the monetary base more than tripled in size.

Austrians, and for that matter many right-leaning economists, were sure about what would happen as a result: There would be devastating inflation. One popular Austrian commentator who has advised Mr. Paul, Peter Schiff, even warned (on Glenn Beck’s TV show) of the possibility of Zimbabwe-style hyperinflation in the near future.

So here we are, three years later. How’s it going? Inflation has fluctuated, but, at the end of the day, consumer prices have risen just 4.5 percent, meaning an average annual inflation rate of only 1.5 percent. Who could have predicted that printing so much money would cause so little inflation? Well, I could. And did. And so did others who understood the Keynesian economics Mr. Paul reviles. But Mr. Paul’s supporters continue to claim, somehow, that he has been right about everything.
So the inflation that Austrian Economics predicts has not happened. Why not?

Because the world is in a massive recession. By definition that means there are unused capital goods and workers who cannot find jobs. Inflation occurs when too much money chases too few jobs in the market.

In that case the excess money has to compete with others who have money to buy capital goods. The competition drives the prices up - meaning competition for capital goods by people who need them and have money causes the price to rise. But prices are not rising. Why?

Because no one has any use for the unused capital goods. The problem is not excess money. The problem is insufficient demand. That means there is not enough consumption to drive businesses to obtain capital goods in the market. Generally they simply use what they have already. They also do not hire more workers, and since workers create 70% of all consumption, demand is not increasing. Without anticipated consumption to drive it, businesses will not invest in more capital goods and will not hire more workers.

Austrian Economics fails again. Ron Paul is, like most of the GOP leaders today, living in a fantasy world of his own making. The Austrian Economics/Libertarian fantasy is being pushed by wealthy individuals like to Koch Brothers through the CATO Institute primarily to weaken the power of the government over corporations, banks, and yes, wealthy families who would prefer to live in a plutocracy where they call all the shots.

Nikki Haley does Insurance industry bidding, damages people of Virginia, then lies about it.

This is the Republican approach to health care policy.
Gov. Nikki Haley dictated the conclusions of a committee charged with deciding how the state should implement federal health care reform before the group ever held its first meeting, public documents show.

Now, some of those involved in the dozens of meetings are calling the entire planning process a sham that wasted their time and part of a $1 million federal grant.

In a March 31 email thread that included Haley, her top advisers and the committee member who eventually wrote the report, Haley wrote, "The whole point of this commission should be to figure out how to opt out and how to avoid a federal takeover, NOT create a state exchange," which is eventually what happened.

A central part of the federal health care overhaul, an exchange is a marketplace where various insurance plans eventually will be sold.


The most recent progress reports filed with the federal government show the administration used about $109,000 of the $1 million grant through the end of November.

Crangle said the exercise was "not in good faith" and called it "an abuse of federal funds." State money also is at issue because state employees were on state time when they attended dozens of exchange planning meetings, he said.

Sue Berkowitz, an advocate for the uninsured who participated in planning discussions as executive director of S.C. Appleseed Legal Justice Center, said time was wasted.

"We came together and sat down for a lot of meetings in good faith that we'd explore every option and discuss what is in the best interests of the state," she said. "I'm frustrated that we were being used for something that wasn't an open, transparent discussion."


Insurance exchanges are the state- or federally-run marketplaces where health coverage will be sold to individuals and small business employees beginning in 2014. They are a key part of the federal health law.

Envisioned as the "Expedia" for health insurance, exchanges are intended to make purchasing health care easier and more affordable by allowing customers to compare options side-by-side.

They also are intended to be the place where residents who make between 133 percent and 400 percent of the poverty level will apply for and collect federal tax credits to buy coverage.

A state panel established by Gov. Nikki Haley recommended last month the state should not manage its own exchange. If Haley accepts the recommendations, South Carolina will join a handful of other states that already have declined to set up exchanges.

States that do not set up exchanges by 2014 will be subject to federally run exchanges.
In short, Nikki Haley does not want a competitive market in health insurance. She is governor of Virginia in part to ensure that Virginians have to buy health insurance from an oligopoly that already exists and wants no competition.

Wednesday, December 14, 2011

Republicans Don’t Care About Deficits! They are a political club.

Deficits? Republicans don't care about deficits. They are the ones who CREATED the deficits. Ezra Klein complains, Paul Krugman explains:
Ezra Klein:
There are two very different tax-policy conversations playing out in the Republican Party right now. In Washington, House Republicans are arguing with each other over how small of a temporary tax cut to give the middle class. Out on the primary trail, the Republican presidential candidates are arguing over how huge of a permanent tax cut to give the wealthy.

All of which leaves the Republican Party in an odd place: skeptical of a temporary tax cut for the middle class that carries a price tag in the low hundreds of billions of dollars and is fully paid for but apparently enthused over permanent tax cuts for the rich that cost trillions of dollars and aren’t paid for at all.
But it’s not odd at all, once you realize that the GOP is not now, and never has been (at least not since the 1970s) concerned about the deficit. All the fiscal posturing of the last couple of years has been about using the deficit as a club to smash the welfare state, with the secondary goal of frustrating any efforts on the part of the Obama administration to help the struggling economy.

The entire debate has been fake. If you don’t understand that, or can’t bring yourself to admit it, you’re missing the whole story.

Monday, December 12, 2011

Wall Street has sold America out!

There is a real good set of reasons why the tea partiers and the Occupy Wall Street groups both think that the Wall Street banks consist largely of immoral criminals. Their behavior has clearly shown that they are. Here is Robert Reich describing the behavior of the banks:
Wall Street’s shenanigans have convinced a large portion of America that the economic game is rigged.

Yet capitalism depends on trust. Without trust, people avoid even sensible economic risks. They also begin trading in gray markets and black markets. They think that if the big guys cheat in big ways, they might as well begin cheating in small ways. And when they think the game is rigged, they’re easy prey for political demagogues with fast tongues and dumb ideas.

Tally up these costs and it’s a whopper.

Wall Street has blanketed America in a miasma of cynicism. Most Americans assume the reason the Street got its taxpayer-funded bailout without strings in the first place was because of its political clout. That must be why the banks didn’t have to renegotiate the mortgages of Americans – many of whom, because of the economic collapse brought on by the Street’s excesses, are still under water. Some are drowning.

That must be why taxpayers didn’t get equity stakes in the banks we bailed out – as Warren Buffet got when he bailed out Goldman Sachs. That means when the banks became profitable gain we didn’t get any of the upside gains; we just padded the Street’s downside risks.

The Street’s political clout must be why most top Wall Street executives who were bailed out by taxpayers still have their jobs, have still avoided prosecution, are still making vast fortunes – while tens of millions of average Americans continue to lose their jobs, their wages, their medical coverage, or their homes.

And why the Dodd-Frank bill was filled with loopholes big enough for Wall Street executives and traders to drive their ferrari’s through.

The cost of such cynicism has leeched deep into America, causing so much suspicion and anger that our politics has become a cauldron of rage. It’s found expression in Tea Partiers and Occupiers, and millions of others who think the people at the top have sold us out.
Wall Street has shown clearly that they cannot be trusted, but when someone tries to enforce regulations on them what do they do? They whine about how misunderstood they are. They are not misunderstood. They are the organized center of financial greed and immorality in the world.

Wall Street Bankers are responsible for the current economic problems because they created and sold “financial weapons of mass destruction.” They bought off the regulators with their K-Street lobbyists, and they have supported the libertarian conservative Republicans who have thwarted and stopped government regulation of bank trading and mergers.

Since the (bank-created) collapse of the Savings and Loan institutions in the 1980's commercial banks have been merging until there are now only about five really massive banks. These banks do not do much business with small businesses because such loans do not provide large profits. They instead compete with the financial trading banks like Goldman Sachs for trading profits, using the savings from commercial customers as the basis for their trades. Why not? It's a lot cheaper than borrowing money in the market, isn't it?

But along the way the banks have forgotten that people have to trust them to do business with them. If we express our lack of trust in the massive banks who don't give a shit what happens to us, then we become their enemy. Their enemies are people that the government they buy (see K-Street Lobbyists) is supposed to suppress. The bankers prefer to wield power rather than work to develop trust.

Bob Reich has the banker's number. The bankers have forgotten that they are not in the power business, they are in the trust business. And a lot of us have been burned and no longer trust them.

Smart bankers will push for stronger and more visible regulation. I doubt that there are very many smart bankers on Wall Street in positions of power within the banking structures.

Depression and Authoritarianism go together

Paul Krugman is trying to warn us frogs that the water we sit in is heating up dangerously.
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.


[In poorly understood Europe] The shared currency, which was supposed to bind nations together, has instead created an atmosphere of bitter acrimony.

Specifically, demands for ever-harsher austerity, with no offsetting effort to foster growth, have done double damage. They have failed as economic policy, worsening unemployment without restoring confidence; a Europe-wide recession now looks likely even if the immediate threat of financial crisis is contained. And they have created immense anger, with many Europeans furious at what is perceived, fairly or unfairly (or actually a bit of both), as a heavy-handed exercise of German power.
The results of this is a discreditation of democracy in Europe and a rise in the popularity of authoritarianism. Krugman describe several European examples, of which the following is one.
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.
Essentially what has happened is that the bank-created economic disaster has destroyed the lives of a large number of Europeans and they want to know who to blame. But the banks are in charge of solving the economic problems, so they are demanding austerity solutions.

Austerity does not end a Depression. It never has and it never will. So things are getting worse as austerity is imposed by bank-advised governments.

As things get worse, the governments are being blamed. They are imposing the austerity, after all. Since the governments are failing, obviously they need to be changed. There are people out there saying "Give me control and I will fix the economy!" But they can't get control in the existing democracies. So the problem will be solved by eliminating democracy and putting those who promise solutions into control of government.

Welcome to authoritarianism! Will the new authoritarians when installed stop listening to the bankers who are demanding austerity "solutions"? Yeah, for a while anyway. But authoritarianism brings its own set of new problems with it.

This is a bit different from the set of economic problems here in America. Here we have a minority political party with discredited solutions to the very economic problems they themselves created who are using provisions of the Constitution to paralyze government in the face of those very problems that minority party created. The purpose of paralyzing the government is to force the American public to return the failed minority to power because they will not permit the government to act to solve problems while they are out of power.

The link between European problems and American problems is that the very banks which created the economic problems both national entities face are demanding that the governments install socially destructive and economically ineffective austerity "solutions" to fix the economic problems the banks created. The so-called solutions will actually do nothing more than shift wealth From the middle and working classes who create the wealth to the financial predators who make up much of the top 1% of the economic classes in both America and Europe.

If the bankers have to install authoritarian governments to get their way, they will not hesitate to do so.

Krugman's right. The problem has moved far beyond just a really severe recession. Both America and Europe are now in the early stages of another Depression, one which combines economic hardship with very strong threats to democracy.