Obama’s Turn at the Populism Trough

Obama channeling Teddy Roosevelt:

UPDATE 3-Obama hits Republicans, Wall St in populist speech | Reuters: “Their philosophy is simple: we are better off when everyone is left to fend for themselves and play by their own rules. Well, I’m here to say they are wrong,” he said.

But Republicans said it was another attempt to distract from what they see as Obama’s failed economic record. Senate Republican Leader Mitch McConnell accused the president and his fellow Democrats of resorting to “cheap political theater.”

(Via Reuters.)

Of course being the Party of No, well, that’s expensive political theater.  If he resonates with the Occupy movement, the GOP goose is cooked.  You heard it here first.  Break a leg, Mr. President!

The Fed’s $7 Trillion Secret Loan Program

The Fed has some ‘splainin’ to do! Continue reading

The Fed’s $7 Trillion Secret Loan Program

The Fed’s $7 Trillion Secret Loan Program:

 

Eliot Spitzer on the aforelinked scandal revealed by Bloomberg:

Imagine you walked into a bank, applied for a personal line of credit, and filled out all the paperwork claiming to have no debts and an income of $200,000 per year. The bank, based on these representations, extended you the line of credit. Then, three years later, after fighting disclosure all the way, you were forced by a court to tell the truth: At the time you made the statements to the bank, you actually were unemployed, you had a $1 million mortgage on your house on which you had failed to make payments for six months, and you hadn’t paid even the minimum on your credit-card bills for three months. Do you think the bank would just say: Never mind, don’t worry about it? Of course not. Whether or not you had paid back the personal line of credit, three FBI agents would be at your door within hours.

Yet this is exactly what the major American banks have done to the public.

Or, as Jon Stewart asked, “How the f*** is it that Martha Stewart went to jail?

 

(Via Daring Fireball)

Gruber finds the perfect quote.

 

The Embarrassment of Riches

9-9-9: The Most Massively Regressive Redistribution of Taxes Ever Seriously Considered

Jared Bernstein (via Mark Thoma):

Herman Cain’s 9-9-9 tax plan is Classic Republican agenda.

An Ugly Balance Sheet Indeed

Mark Thoma:

This is What a Balance-Sheet Recession Looks Like, and It’s Not Pretty:

Stephen Gordon says these graphs make him grateful that Canada is not the US:

This is what a balance-sheet recession looks like, and it’s not pretty, Worthwhile Canadian Initiative: I had never heard the expression “balance-sheet recession” before this recent episode, and it’s time I got around a comparison of the household balance sheets of the US and Canada. Of all my “Canada is not the US” posts, this is the one that makes me most grateful.

The quarterly data goes back to 1990, and it’s good to put the last few years in context. I’ve scaled all the series by price (the consumption spending deflator) and population. Here is the net worth series:

Wci1

There’s been talk of a Japan-like ‘lost decade’ in the US; that seems optimistic. US real per capita net worth is back to what it was back in 1999.

The US problem is on the assets side:

Wci2

The effect of the recent recession on assets in Canada is similar to that of the demise of the dot-com boom.

Aggregate household liabilities have also fallen in the US, but as can be seen in the net worth data, not by enough:

Wci3

Few will be surprised to learn that the collapse of US house prices had an important effect on US asset holdings:

Wci4

Although the fall in US housing assets was more dramatic, other assets lost value as well:

Wci5

And lastly (although if someone can think of another interesting graph, I may add it), here is real per capita housing equity:

Wci6

The US data go back to 1952, so I was able to check the last time the real, per capita value of US housing equity was at its current level. Even after looking at all of these graphs, the answer astonished me: 1978. Nineteen seventy-freaking-eight.

(Via Economist’s View (Mark Thoma).)

Fareed Zakaria: How Conservatism Lost Touch with Reality

Party Politics: How Conservatism Lost Touch with Reality – TIME:

“In fact, right now any discussion of government involvement in the economy — even to build vital infrastructure — is impossible because it is a cardinal tenet of the new conservatism that such involvement is always and forever bad. Meanwhile, across the globe, the world’s fastest-growing economy, China, has managed to use government involvement to create growth and jobs for three decades. From Singapore to South Korea to Germany to Canada, evidence abounds that some strategic actions by the government can act as catalysts for free-market growth.”

This is why I don’t have respect for “the new conservatism.”

Kwak Ethers Paul Ryan

Health Care Rationing for Beginners:

“The more relevant question is whether the Ryan Plan will promote the more efficient allocation of health care. You can dredge up a theoretical argument that it would. In free market fantasy land, remember, employers and individuals will shop around for the most efficient health care plans, so insurers have an incentive to make their plans more efficient. The crux of the argument is that since insurers face a competitive market, they will work hard to make their plans as efficient as possible, which means they should do a better job than Medicare, which doesn’t face competition. I’m sure this argument has been advanced a hundred times by Heritage, AEI, and so on.

The problem with that argument is that it’s completely false in practice. If that market worked, then we would have a functioning health insurance market for people under 65 (where there is no Medicare);*** but if we had that, then we would not be talking about health care today.”

(Via The Baseline Scenario.)