Obsidian Wings

Winning Wisconsin, Pigs & Hippies Together: This is OUR HOUSE!

by Gary Farber

Don't tell me we can't win this.  Wisconsin Police Have Joined Protest Inside State Capitol.

From inside the Wisconsin State Capitol, Ryan Harvey reports:

“Hundreds of cops have just marched into the Wisconsin state capitol building to protest the anti-Union bill, to massive applause. They now join up to 600 people who are inside.”

Ryan reported on his Facebook page earlier today [Friday, Feb. 25 -gf]],:

“Police have just announced to the crowds inside the occupied State Capitol of Wisconsin: ‘We have been ordered by the legislature to kick you all out at 4:00 today. But we know what’s right from wrong. We will not be kicking anyone out, in fact, we will be sleeping here with you!’

Ryan Harvey's video from Friday:

 

 My quotes:

[...] This is not a budget issue! This is a CIVIL RIGHTS ISSUE!  [...] Mr. Walker!  [...] We know pretty well now who you work for!  [applause] Let me tell you who WE work for! [points to self and police emblem]  We work for all of these people!  [applause] We are not here, Mr. Walker, to do your bidding!  We are here to do their bidding!  [...]  Mr. Walker, this not your House!  This is all of our House!  [camera pans 360°]

I want to give this officer a big fat kiss on the mouth.

Pictures from Ryan Harvey, February 25, Occupied Capitol Building, Madison, WI:

The New Republican Congressional Revolutionary Volunteers Of America

by Gary Farber

Congressman stops short of calling for Obama assassination. Georgia Congressman Paul Broun's Tuesday night’s town hall meeting:

The first question of the night (confirmed by Broun’s office) was “when is someone going to shoot Obama?”

Broun’s response, Athens Banner-Herald (Georgia):

The thing is, I know there’s a lot of frustration with this president. We’re going to have an election next year. Hopefully, we’ll elect somebody that’s going to be a conservative, limited-government president that will take a smaller, who will sign a bill to repeal and replace Obamacare. He then segued into Republicans’ budget proposal.

Today: Loughner indictment expected by March 9, trial in Sept.:

Dylan Smith, TucsonSentinel.com

Prosecutors said they will indict Jared Lee Loughner on more federal charges by March 9, a court order said Thursday. U.S. District Judge Larry Burns said in the order that he expects a trial to begin before Sept. 20. Loughner, 22, is the alleged gunman in the Jan. 8 shooting that authorities call an assassination attempt on U.S. Rep. Gabrielle Giffords.

[...] Six were killed and 13 wounded in the attack on a constituent meet-and-greet at a Northwest Side grocery store. Giffords remains in a Houston rehab facility, recovering from her wounds.

Georgia Congressman Paul Broun had best not hold town meetings on Obsidian Wings. Posting Rules:

[...] Calls for the assassination of any person will be subject to immediate banning. Exceptions are made for legitimate military targets in time of war, being put to death after being convicted of a capital crime, etc. -- basically, the things that make a killing not 'assassination' to begin with. As before, this is not a prohibition on criticism, vituperation, and all those other good things; just a recognition that there's all the difference in the world between passionately disagreeing with someone and calling for that person's death.

We would ban someone from here for such a statement. But Republican Georgia Congressman Paul Broun lets it pass without a word and:

[...] Broun’s press secretary, Jessica Morris, confirmed that the question was indeed, who is going to shoot Obama? “Obviously, the question was inappropriate, so Congressman Broun moved on,” she said.

We wouldn't just move on, if we noticed that here.

But it's okay if you're merely a Republican Congressional Representative.

Move along. Nothing to see here.

In June, Greg Sargent wrote: Sharron Angle floated possibility of armed insurrection:

Here's another one that could be tough for Sharron Angle to explain away: In an interview in January, Angle appeared to float the possibility of armed insurrection if "this Congress keeps going the way it is."

I'm not kidding. In an interview she gave to a right-wing talk show host, Angle approvingly quoted Thomas Jefferson saying it's good for a country to have a revolution every 20 years -- and said that if Congress keeps it up, people may find themselves resorting to "Second Amendment remedies."

What's more, the talk show host she spoke to tells me he doesn't have any doubt that she was floating the possibility of armed insurrection as a valid response if Congress continues along its current course.

Asked by the host, Lars Larson of Portland, Oregon, where she stands on Second Amendment issues, Angle replied:

You know, our Founding Fathers, they put that Second Amendment in there for a good reason and that was for the people to protect themselves against a tyrannical government. And in fact Thomas Jefferson said it's good for a country to have a revolution every 20 years.

I hope that's not where we're going, but, you know, if this Congress keeps going the way it is, people are really looking toward those Second Amendment remedies and saying my goodness what can we do to turn this country around? I'll tell you the first thing we need to do is take Harry Reid out.

Larson says Angle was floating the possibility of armed insurrection if Congress keeps it up under Reid et al.

One Way To Connect

by Gary Farber

ONE WAY TO CONNECT can be this:

This is America:

This is something we can do:

To Beat Back Poverty, Pay the Poor:

The city of Rio de Janeiro is infamous for the fact that one can look out from a precarious shack on a hill in a miserable favela and see practically into the window of a luxury high-rise condominium. Parts of Brazil look like southern California. Parts of it look like Haiti. Many countries display great wealth side by side with great poverty. But until recently, Brazil was the most unequal country in the world

Everything connects:

Waste Not, Want Not

by guest poster Gary Farber.

How much is $50 billion? 

That's how much the president proposes we spend:

[...] It calls for a quick infusion of $50 billion in government spending that White House officials said could spur job growth as early as next year — if Congress approves. [...]  Central to the plan is the president’s call for an “infrastructure bank,” which would be run by the government but would pool tax dollars with private investment, the White House says. [...] Specifically, the president wants to rebuild 150,000 miles of road, lay and maintain 4,000 miles of rail track, restore 150 miles of runways and advance a next-generation air-traffic control system.

[...]

The White House did not offer a price tag for the full measure or say how many jobs it would create. If Congress simply reauthorized the expired transportation bill and accounted for inflation, the new measure would cost about $350 billion over the next six years. But Mr. Obama wants to “frontload” the new bill with an additional $50 billion in initial investment to generate jobs, and vowed it would be “fully paid for.” The White House is proposing to offset the $50 billion by eliminating tax breaks and subsidies for the oil and gas industry.

After months of campaigning on the theme that the president’s $787 billion stimulus package was wasteful, Republicans sought Monday to tag the new plan with the stimulus label. The Republican National Committee called it “stimulus déjà vu,” and Representative Eric Cantor of Virginia, the House Republican whip, characterized it as “yet another government stimulus effort.”

Which sounds good to me, if not to you, but we can all agree that we don't want to "waste" money.

Even before the announcement Monday, Republicans were expressing caution.

“It’s important to keep in mind that increased spending — no matter the method of delivery — is not free,” said Representative Pat Tiberi, an Ohio Republican who is on a Ways and Means subcommittee that held hearings on the bank this year. He warned that “federally guaranteed borrowing and lending could place taxpayers on the hook should the proposed bank fail.”

Such concern might have come earlier: 

• The Department of Defense is unable to account for the use of $8.7 billion of the $9.1 billion it spent on reconstruction in Iraq.
• Source: Special Inspector General for Iraq Reconstruction (PDF).

Just Tax

by publius

I have to admit that I don't like the idea of the government stepping in to dictate compensation levels, TARP funds or no TARP funds.  I'm certainly not morally opposed to it -- heck, many of these people deserve far worse.

The problem, though, is that I don't think the government is institutionally competent to figure this stuff out in a remotely fair and informed way.  It seems like the bluntest of blunt instruments.

Instead, I'd prefer to let people make what they make, and then raise taxes significantly on the very top earners.  For that reason, I'd prefer to see the anger from these ridiculous compensation levels (which were made possible by government intervention, mind you) channeled toward larger tax reform.  

The compensation limits proposed this week will be fleeting anyway -- the ultimate purpose is to keep us rubes at bay.  Raising tax rates on the very very top, by contrast, would be a more lasting reform -- one that would promote equality, reduce concentration of political power, etc.

And this is the point .....

.... Of calling the Democrats' stimulus package A Stimulus for Tomorrow (Part 11)

by von

Andrew Sullivan mentions a piece by Daniel Gross, which purportedly reminds "conservatives"* that it's too early to label the stimulus a failure because most of the money hasn't been spent yet.

Here is my hand.  Here is my forehead.  Here is my hand smacking my forehead.  (Ouch!)

Gross' article isn't a "reminder"; it's an admission that critics of the stimulus package were right.  A principle argument against the Democrats' stimulus package was that it was misdesigned and too back-heavy.  The Democrats designed a stimulus package that would have its greatest impact in 2010 and 2011 -- not 2009.  Consequently, as designed by the Democrats, money from the stimulus would not enter the economy when it was needed:  at the start of the recession, not at (what appears to be) the recession's end.  In my words -- and why be humble about this now since I have never been before -- the Democrats designed a "Stimulus for Tomorrow."  Not today.   

I suppose that I should take some comfort in the fact that defenders of the Democratic stimulus package are now acknowledging its central design flaw.  And I'm certainly impressed with the fluidity of David Gross' arguments.  It takes a deft hand to argue that critics of the stimulus package are currently wrong because they were previously right.  Or to label as "rash" the conclusion that a stimulus package that costs $787 billion isn't much of a stimulus package if it doesn't take effect until after the recession is (probably) over. 

Despite being impressed by Gross' writing, however, Gross' article isn't an answer to the critics.  It's an admission that the critics were right.

Prior installments of "A Stimulus for Tomorrow": Parts 1, 2, Hilzoy's response, 3, 4, 5, 6, 7, 8, 9, 10.

*Notably, "conservatives" were not the only critics of the stimulus package.  I'm a critic of the Democrat's stimulus package and, 'tho not a democrat, I'm also not a conservative. 

Round Two

(Also known as: A Stimulus for Tomorrow, Part 10)

by von

Everyone should have seen this coming .... well, everyone who reads these here Wings of Obsidian.  From Salon (citing Bloomberg and The New York Times):

Call it the the stimulus that dare not be named. Bloomberg reports that the Obama administration is considering "a mix of spending programs and tax cuts to respond to widening job losses that would amount to an additional economic stimulus without carrying that label."

On the table: A boost in transportation spending, extension of unemployment benefits, and a continuation of the first time homebuyer tax credit. The New York Times adds in a possible $3000 tax credit to businesses for new hires, and a proposal to "allow more businesses to deduct their net operating losses going back five years instead of the usual two."

    Some folks will claim that a second stimulus is needed because the recession has been much worse than anyone had predicted.  We have a technical term for this view:  bullshit.  It is absolutely true that the Obama Administration misjudged the depth of the current recession, and Geoff at Innocent Bystanders has the (updated) chart to prove it.  But a lot of folks outside the Administration were warning that the Democrats' stimulus plan didn't treat the recession seriously; instead, it was full of crappy half-measures, programs of dubious benefit (ahem, cash for clunkers), and payoffs to various Democratic interests.  And, then, moderate Senate Republicans somehow, against almost all odds, made the Democratic plan worse.  Under these circumstances, a bunch of folks thought that a son of stimulus was practically guarateed.  To choose a random example: me, circa February, 2009:

The current stimulus package is too small on the front end and too bloated and unfocused on the back end.  It wasn't a stimulus bill so much as a grab bag of goodies.  Of course we can't rule out another stimulus package, because we didn't do a proper stimulus package the first time. 

   President Obama's second take at a stimulus package also doesn't fill me with the warm fuzzies.  The trial balloon for stimulus number 2 consists of more complicated tweaks to the tax system and more transportation spending.  This new plan is still too unfocused.  For instance -- in the same vein as "cash for clunkers" -- giving limited tax credits for new hires could very well have counterproductive effects (why hire now if the government might pass a tax credit tomorrow?  do tax credits encourage employers to dump older, high-wage workers for new hires?)  These types of tweaks also impose high compliance costs.  And how many new roads does a "green" economy need, anyhow?  (Or is this going to be a version of Rep. Mica's high-speed rail plan?)

Let's get serious.  The best way to create new jobs (and keep the jobs that exist) is a payroll tax cut.  It's a proposal that has been on the table from the beginning.  If you cut the payroll tax on both the employer and employee sides, you provide employers with an incentive to both keep and hire workers (because the tax consequences of hiring and retaining workers are smaller) and you provide workers with more money to spend or save (either of which is helpful behavior in light of the dual consumption/credit crunch).

Yes, even a temporary payroll tax cut is costly.  But what new program offered by the Obama Administration hasn't been costly?  Let's get it right this time. 

Prior installments:  A Stimulus for Tomorrow, Parts 1, 2, Hilzoy's response, 3, 4, 5, 6, 7, 8, and 9.

There Is Still Good In Him. I've Felt It.

by publius

Richard Posner just wrote one of those "read the whole thing" essays in TNR.  And it's the clearest and most persuasive theoretical grounding of recent Democratic economic policies that I've seen.

It's dense in a few places, but he generally lays out pretty clearly the logic of things like the fiscal stimulus, policies that increase wages, and public investment.  The essay doesn't say so explicitly, but it also illustrates the fundamental errors of Mark Sanford-style "tighten your belt" macroeconomics.

The logic of Posner's essay also strikes at the very heart of trickle-down economics.  I know that economists don't take trickle-down to be a rigorous theory or anything.  But I think the basic idea has a lingering hold on the minds of elected officials.  At the least, it helps justify in people's minds why concentrations of wealth (estate tax) and income (tax cuts for rich) are good policy rather than things that should trigger pitchforked mobs.

Posner's essay, by contrast, spells out the basic Keynesian idea that "trickle-up" is a much sounder policy.  And, as it turns out, this type of trickle-up, multiplier-seeking policy approach is exactly what the stimulus adopts.  The essay also illustrates (by describing Keynes in plain English) why the various federal banking interventions were important -- namely, to produce the stability needed to stop people from hoarding.

Anyway, if you're an "interested amateur" like me, you'll enjoy it.

[UPDATE 2:35 PM:  I should have made this more clear -- so thanks to Adam in the comments.  Posner is one of the most important Chicago School figures of the 20th Century.  Currently a federal judge, he was law-and-econish before it was cool.  Accordingly, this essay is roughly equivalent to Glenn Beck embracing ACORN because "they help poor people."  Or maybe Mr. Burns opening a public hospital.  Or the Kagan family joining MoveOn.]

Regulating Wall Street

by publius

I won't pretend to claim expertise in the debate about whether the feds should regulate bankers' compensation.  But the devil, it seems, is in the details.  I could easily imagine rules that are excessive intrusions -- but I could just as easily imagine acceptable ones too.

Regardless, though, the underlying theory of imposing new rules makes perfect sense.

Markets don't handle externalities all that well.  For instance, factories that spit out mercury into lakes don't bear those costs in a truly "free" market -- we the drinking public do.  Regulations and dread tort law are the ways to force factories to internalize those costs. Without regulations, it would be completely rational for factories to dump mercury if it makes production more efficient.

That's essentially how Wall Street compensation structures should be thought of -- as pollutants spilling out, poisoning the general public.  The incentives for short-term gains with no regard for the long term hurt a lot of people.  And so it's completely justifiable to push those costs back on Wall Street.

No one's really even considering limiting compensation amounts.  (And frankly, I think that concentrations of wealth aren't much better than mercury in the water).  The proposals, as I understand them, are about channeling incentives in a more constructive direction. 

The ultimate rules may go too far, but this basic idea is a sound one.

The Fruit of Nelsonism

by publius

As you'll recall, we passed a stimulus bill earlier this year.  The original proposal was already too small.  But then a group of centrist Senators led by Ben Nelson and Susan Collins demanded additional significant cuts to aid for states.  They ultimately cut about $25 billion from the original proposal, most of which cut the "flexible" money that states could use on anything.  (Ed Kilgore explains the details).

These cuts had no discernable policy basis, but were simply political and ideological posturing.  It's one thing to oppose the stimulus.  But once you agree to spend 700 billion, there's no justifiable policy reason to oppose this additional amount, particularly given how stimulative state aid is (especially in terms of keeping people employed).

And now the NYT shows the inevitable effect of not spending more on state aid.  In short, state cutbacks are limiting the effects of the stimulus:

The layoffs at New Flyer are a vivid illustration of the way that some of the economic impact of the $787 billion federal stimulus law is being diluted by the actions state and local governments are taking to weather the recession.

Let's hope this lesson is learned on health care.  The goal must be to get the policy right.  If limiting spending hurts the overall policy, then we need to spend more (e.g., subsidies in a world of mandates).

[UPDATE 11:35:  Dean Baker and Rivka Deutsch wrote a paper on this very topic back in May 2009 (pdf).