Month: December 2012

Just Read This

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I am Adam Lanza’s Mother.

She really isn’t.  Rather, Liza Long is describing the issues involved with raising her son, an extremely intelligent, and very troubled 13 year old., from the mom of a troubled adolescent, but there is a bigger issue that it obliquely address we look at the most prominent mass shootings in the past few years, they seem to be marked by the complete breakdown of the mental health infrastructure in this country.

Starting with Ronald Reagan, we have systematically dismantled our mental health infrastructure, so now we have the the emergency room, jails, and acute inpatient facilities.

For chronic, less severe mental health problems, there is nothing out there, except, “Take 3 pills daily,” or moving to some place with a less antediluvian public health system, like Canada, or Spain, or Portugal, or India(!), or Egypt(!!), or Greece (until a year ago, when Angela Merkel demanded that they adopt the US’s 3rd world health system because Greek pain equals German votes).

DPRK Finally Gets a Launch Half Right

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North Korea’s satellite is actually in orbit, though it appears to be tumbling out of control:

After 14 years of trying, North Korea has finally joined the countries capable of launching a satellite into orbit. But the success was short-lived. The nation’s space program is also experiencing the bitterness of the failure to keep its spacecraft stable.

North Korea succeeded Dec. 11 on its six attempt to orbit what officials there call an Earth-observation satellite. The U.S. led a group of nations , including Russia and China, that warned North Korea not to proceed with the mission. China has since expressed “regret” over it.

The launch technology can also be used to support the country ‘s ballistic missile program .

A U.S. defense official suggests the satellite is tumbling in its polar orbit. Strategic Command, which tracks orbiting objects, referred questions to the Pentagon. A spokeswoman there said she would not comment on classified intelligence matters.

One observer who tracked the spacecraft with night-vision goggles said it was “flickering” and produced an intermittent trace on a time-exposure photograph, which could suggest tumbling.

What is significant here is not the ballistic missile capability that this shows, because this rocket science isn’t exactly ……… rocket science.

Yes, I know, it technically is rocket science, and from an engineering and technical perspective it is significant, but a ballistic missile aimed at the west coast would need to impart less than ½ the kinetic energy to the payload.

It’s been clear that this has been well within the Kim’s capabilities for years.

What is significant is now that any attempt to prevent testing related to ballistic missiles will now have to clearly show that it is not almost entirely related to weapons.

While there is support in the international community to prevent the development of explicitly military long range rocket capability, the idea that the United States, it’s NATO allies, Russia, China, Israel, etc. should be allowed to hold a hegemony on such a technology will be anathema to most other nations in the world.

This is particularly true because the only nation put at threat by this, though South Korea and Japan are clearly at risk from shorter ranged rockets, is the United States.

Why Do Americans Want Our Children to be Shot?

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I don’t just mean the NRA. I just don’t mean the sociopathic Talibaptists who say that it’s because we do not pray to the right God. I mean all of us.

After every shooting we, and I mean all of us, are told by the Gun Nuts With Small Penises™ that it’s not the time to talk about it, and so some dead kids, mall shoppers, etc. are consigned to the memory hole.

Now it’s 28 people, including 20 children at Newtown Elementary School in Connecticut.

BTW, there is a special place in hell for White House Press Secretary Jay Carney, who jumbed with both feet on the “we must not talk about it” meme.

BTW, there was a school attack in China today, 22 people attacked, WITH A KNIFE.

There were no deaths.

I understand that the NRA is a bunch of scary people to your average politician. We need to be even scarier.

Joke of the Day

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There is an old story from the heyday of the Soviet Union. As part of their May Day celebrations they were parading their latest weapon systems down the street in front of the Kremlin. There was a long column of their newest tanks, followed by a row of tractors pulling missiles. Behind these weapons were four pick-up trucks carrying older men in business suits waving to the crowds.

 Seeing this display, the Communist party boss turned to his defense secretary. He praised the tanks and missiles and then said that he didn’t understand the men in business suits. The defense secretary explained that these men were economists, and “their destructive capacity is incredible.”

H/t Dean Baker

Platinum Coin Seigniorage Is Starting to Get Mainstream Coverage

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Joe Firestone notes that we are starting to see coverage in the media of the trillion dollar platinum coin:

Did the MSM’s new wave of commentaries on platinum coin seigniorage (PCS) miss the really big story about it? Of course, I think it did, and I’ll continue my review of the MSM commentaries with the efforts of Chris Hayes at MSNBC, substituting as host on the Rachel Maddow show (12/05 at 9:20 PM); and John Carney at CNBC (12/06 at 11:54 AM). This is my second review post on this subject.

Platinum Coin Seigniorage is the idea that the US Treasury can use its right to print coins or arbitrary value, (the Federal Reserve has this power with regard to paper and electronic currency) which can then be used to pay down the debt by depositing at the Federal Reserve.

I think that this is a good thing, and so does Firestone, but he takes issue with a couple of points made by Hayes and Carney.

First, he objects to their characterization that such an action is unlikely to happen. I disagree.

I understand his point, that the legal and economic barriers to doing this are not great, but the psychological and political barriers, particularly for two people as wedded to economic and financial orthodoxy as Barack Obama and Timothy Geithner does make the possibility that this strategy would be implemented to be vanishingly small.

The area where I disagree is his argument that using the coin won’t cause inflation.

While it is clear that if the coins are used exclusively to retire debt held by the Fed will not have much inflationary effect, Federal Reserve held Treasury Bonds are basically an accounting trick.

That being said, if you start retiring other debt, that money has to go somewhere, and if the trillions parked in US government securities need to find another place to park, one could expect these funds to slosh around and this would have an inflationary effect.

My more significant area of disagreement is his assumption that inflation is a bad thing, which is why he argues against the potential inflationary impacts.

I do not think that inflation right now is a bad thing. Given that we have a significant debt overhang, and inflation serves to devalue debt, favoring the debtor over the creditor, I think that inflation is a good thing.

In a very real way, we are in a position very similar to that at the end of the 1800s, when William Jennings Bryan gave his “Cross of Gold” speech.

Seigniorage is today’s free silver, and much like free silver, it is not a likely to be implemented, except as a bargaining strategy.

Thanks Merkel

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Not only is Angela Merkel’s hard money policies impoverishing much of the Euro Zone, which might cause the currency zone to break up, but it looks like it’s going to lead to the dissolution of Spain:

The center-right Catalan nationalist bloc CiU and the Catalan Republican Left (ERC) on Wednesday reached an agreement to call for a referendum on independence for Catalonia within two years.

The deal paves the way for Artur Mas to remain premier of the region. The CiU emerged as the biggest party in regional elections held last month but fell short of the absolute majority it was seeking. ERC was the second most voted party. The two sides still have to agree on the budget for next year. The accord on the referendum states that it must be held before the end of 2014 but does not give a specific date.

In a parallel development, the CiU, the ERC and other Catalan parties — with the exception of the local branch of the ruling Popular Party — reached an agreement not to implement the reform of the education system put forward by Education Minister José Ignacio Wert, which restores Castilian Spanish to the same level in the classroom as co-official regional languages such as Basque or Catalan.

The accord says the parties will adhere to the Catalan Education Law, which promotes immersion in the Catalan language. The parties described Wert’s proposals as “unacceptable” as they “prevent linguistic immersion by segregating pupils on the basis of language.”

Seriously, the pain caucus in the Euro Zone (Angela is their most senior member) is laying waste to everything that they touch.

Pelosi Draws a Line in the Sand

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If you can count, and make an educated guess as to how many Republican Congresscritters are batsh%$ insane teabaggers, it’s pretty clear that a greater proportion of Democrats in the House have to vote for a budget/tax proposal.

Well, Nancy Pelosi just made it clear that the votes aren’t there if the measure includes an increase in the Medicare eligibility age:

House Minority Leader Nancy Pelosi (D-Calif.) on Thursday escalated her opposition to hiking Medicare’s eligibility age, warning Republican leaders that it’s a non-starter as part of the lame-duck fiscal talks.

“Don’t even think about raising the Medicare age,” she said during her weekly press briefing in the Capitol. “We are not throwing America’s seniors over the cliff to give a tax cut to the wealthiest people in America. We have clarity on that.”

Nancy Pelosi is not trying to convince Boehner or McConnell not to cut entitlements, she’s offering a shot across Obama’s bow.

Even the Teabagger back benchers understand the politics of trying to pass cuts to Social Security and Medicare without any Democratic votes is political suicide, so even if Obama cuts a deal with the Republicans, they cannot afford to vote for it alone.

The DoJ Admits that the Banksters are too Big to Prosecute

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We don’t need no water let the Motherf#$%er Burn Burn Motherf#$%er Burn

Case in point, HSBC, which was literally laundering drug cartel money.

It will not be criminally prosecuted because it is too big to fail:

State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.

Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. The bank, which is based in Britain, faces accusations that it transferred billions of dollars for nations like Iran and enabled Mexican drug cartels to move money illegally through its American subsidiaries.

While the settlement with HSBC is a major victory for the government, the case raises questions about whether certain financial institutions, having grown so large and interconnected, are too big to indict. Four years after the failure of Lehman Brothers nearly toppled the financial system, regulators are still wary that a single institution could undermine the recovery of the industry and the economy.

But the threat of criminal prosecution acts as a powerful deterrent. If authorities signal such actions are remote for big banks, the threat could lose its sting.

Behind the scenes, authorities debated for months the advantages and perils of a criminal indictment against HSBC.

Some prosecutors at the Justice Department’s criminal division and the Manhattan district attorney’s office wanted the bank to plead guilty to violations of the federal Bank Secrecy Act, according to the officials with direct knowledge of the matter, who spoke on the condition of anonymity. The law requires financial institutions to report any cash transaction of $10,000 or more and to bring any dubious activity to the attention of regulators.

Given the extent of the evidence against HSBC, some prosecutors saw the charge as a healthy compromise between a settlement and a harsher money-laundering indictment. While the charge would most likely tarnish the bank’s reputation, some officials argued that it would not set off a series of devastating consequences.

A money-laundering indictment, or a guilty plea over such charges, would essentially be a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States, officials said.

Seriously. Burn, motherf%$#er burn.

If there is no rule of law, the banks don’t matter.

H/t Matt Stoller.

God Help Us, Berlusconi is Italy’s Best Hope

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I know that this sounds like a joke, but I’m as serious as a heart attack.

The Euro (as it is currently structured, it should be called the Reichsmark, because it is structured by Germany to benefit it’s position as a predatory exporter) is of no real benefit to Italy, and Berlusconi is the only credible Italian political figure who is willing to say this:

The nation is richer than Germany in per capita terms, with some €9 trillion of private wealth. It has the biggest primary budget surplus in the G7 bloc. Its combined public and private debt is 265pc of GDP, lower than in France, Holland, the UK, the US or Japan.

It scores top of the International Monetary Fund’s index for “long-term debt sustainability” among key industrial nations, precisely because it reformed the pension structure long ago under Silvio Berlusconi.

“They have a vibrant export sector, and a primary surplus. If there is any country in EMU that would benefit from leaving the euro and restoring competitiveness, it is obviously Italy,” said Andrew Roberts from RBS.

“The numbers are staring them in the face. We think the story of 2013 is not about countries being forced to leave EMU but whether they choose to leave.”

A “game theory” study by Bank of America concluded that Italy would gain more than other EMU members from breaking free and restoring sovereign control over its policy levers.

………

Rome holds a clutch of trump cards. The one great obstacle is premier Mario Monti, installed at the head of a technocrat team in the November Putsch of 2011 by German Chancellor Angela Merkel and the European Central Bank – to the applause of Europe’s media and political class.

Mr Monti may be one of Europe’s great gentlemen but he is also a high priest of the EU Project and a key author of Italy’s euro membership. The sooner he goes, the sooner Italy can halt the slide into chronic depression.

The sooner that someone who counts (not Greece, not Portugal, and probably not Spain) declares that the Euro is a failure, and that it needs to be abandoned, the better it will be for most of the people in the Euro Zone.

The Eurobanksters will lose, and Angela Merkel will lose, but the entire Euro Zone, including Germany, is now in recession because of German competitive needs, and German mythology. (it wasn’t the hyperinflation that brought the Nazis to power, it was the hard money contractionary policies, policies that the Germans are demanding for the rest of the EZ that did)

Absent Germany withdrawing from the Euro, the currency is doomed, and the sooner that it is abandoned, the better.

Tax the Rich, or Eat the Rich, Your Choice

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H/t DC at the Stellar Parthenon BBS for the Pic.

John Judis demolished the idea that rich need piles of money for our economy to grow:

As the negotiations over the fiscal cliff continue, President Barack Obama has insisted on retaining the Bush tax cuts for the middle class, while letting the cuts for the wealthy lapse. Republicans have insisted that raising taxes on the rich would cost jobs – as many as 700,000, according to House Speaker John Boehner.

 Obama, for his part, says that a tax increase would not cost jobs; that it would help the economy by reducing the deficit; and that it would be fairer than imposing new taxes on the middle class. “I’m not going to ask students and seniors and middle-class families to pay down the deficit while people like me who make more than $250,000 are not asked to pay a dime more in taxes,” he has declared.

 Obama is right that a tax increase on the rich would not cost jobs; and he is certainly right that it would be fairer to tax the wealthy whose incomes have shot up, even during the downturn. And he is also correct that taxing the rich will actually benefit the economy–but not primarily for the reasons he cites. If the government extracts income from the wealthy, and then spends it on a $50 billion infrastructure program, an extension of unemployment insurance, and a Social Security payroll tax cut, as Obama has proposed, that will not only boost the recovery, but will also discourage the wealthy from rerouting their savings into the kind of speculative activity that helped create the Great Recession. A closer approximation of income equality is not only better for our souls—it’s also better for the economy. The question of fairness aside, the rich have been making relatively too much money for the country’s good.

 Last September, the Congressional Research Service published a report countering Republican claims that lowering top tax rates would lead, or had led, to higher economic growth. “Changes over the past 65 years in the top marginal rate and the top capital gains tax rate do not appear correlated with economic growth,” the report concluded. Republican Minority Leader Mitch McConnell responded by having the report suppressed, but its findings were incontrovertible.

………

 Regressive policies can also lead to financial crises. When firms suffer from global overcapacity or merely from domestic overproduction – when a glut arises of automobiles, ships, textiles semiconductors or fiber optic cable — as happened in the late 1920s and again in the earlier part of the last decade, the wealthy, joined by corporate treasurers and bankers, have tended to pour their money into speculation rather than productive investment. The financial sector has become a casino for the rich, where they have gambled away funds that could have fueled the economy. So redistributing income through tax policy isn’t just fair; it is one way to began restructuring the economy to prevent future slowdowns and crashes.

Republican pleas to retain tax breaks for the wealthy and corporations and to eviscerate social programs do suggest a Romneyesque indifference to the 99 percent; they also presume an economy that no longer exists. “These incentives,” Livingston writes, “are merely invitations to inflate speculative bubbles.” Obama’s concession to arguments about the deficit, which come from Tea Party Republicans and business groups like Fix the Debt, is understandable, but unfortunate. There will come a time — when unemployment dips, say, below six percent, and the countries’ businesses are at full capacity – when it will be important to reduce government deficits. And raising marginal taxes on the wealthy will be one way – along with other measures – to bring the deficit down.

But bringing down the deficit should not be the principal objective right now. What’s important is to continue the recovery from the Great Recession and to take measures to prevent future crises. Supply-siders were right about one thing: the best way to reduce the government deficit is to create economic growth. Obama’s proposal to raise taxes on the wealthy and to transfer those revenues to workers and the unemployed isn’t just the fair thing to do; it is exactly what’s right for the economy.

Not only does coddling the rich not help the economy, it destroys it.

Go read, and supply your recipes below.

Another ½%!!!! Woot!!!!

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The Federal Reserve has made a major change in its targeting, raising its inflation target tfrom 2% to 2½% and stating that they will continue quantitative easing until unemployment drops below 6½%.

This is a very big deal for two reasons, first, it’s the first time that the Fed has ever linked its rates to employment levels, and second, it’s a marked departure from their previous statements which said stuff like, “ZIRP for the nest 6 months, and then we reevaluate”.

What they are doing now is much clearer, and makes it much easier to determine near term behavior.

I’m not a big fan of the “confidence fairy” theory of economics, particularly when used to justify “expansionary austerity”, but the opacity of the Fed has not served the economy; all it has done is to reinforce the “high priesthood” aspects of the Federal Reserve’s reputation.

Fed statement after the break:

Press Release

Federal Reserve Press Release

Release Date: December 12, 2012

For immediate release

Information received since the Federal Open Market Committee met in October suggests that economic activity and employment have continued to expand at a moderate pace in recent months, apart from weather-related disruptions. Although the unemployment rate has declined somewhat since the summer, it remains elevated. Household spending has continued to advance, and the housing sector has shown further signs of improvement, but growth in business fixed investment has slowed. Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

 Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

 To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and, in January, will resume rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

 The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

 To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. The Committee views these thresholds as consistent with its earlier date-based guidance. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.

 Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who opposed the asset purchase program and the characterization of the conditions under which an exceptionally low range for the federal funds rate will be appropriate.

There is One Man Who Can Challenge the Gun Lobby

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Jon Stewart doesn’t challenge gun ownership per se, but rather the sh%$ storm freakout accompanying Bob Costas’ comments on gun violence in the context of the Jovan Belcher murder/suicide.

He made the rather unremarkable observation that absent Belcher’s (legally owned) firearms, he and Kasandra Perkins might still be alive today.

The NRA, and its inadequately endowed paranoid ilk, want to make discussions of gun violence, and gun culture literally unspeakable in the media.