Archive for February 23, 2010

Reads (2-23-2010)

February 23, 2010 Leave a comment

Hooray! Mississippi decides to join the rest of us in the 21st Century

Notes on a difficult employment outlook –  Hussman Funds

Outlook for employment:

On the other hand, several aspects of the employment picture concern me quite a bit. First and foremost, the unemployment rate is reported as the ratio of individuals who are unemployed and actively seeking work (thereby still being counted as being in the labor force) divided by the labor force itself. The difficulty is that we have seen an unprecedented exodus of discouraged workers from the U.S. labor force over the past two years, which has the result of sharply understating the extent of the unemployment problem. Had labor force participation remained at the same level as it was in 2000, the unemployment rate today would be nearly 3 percentage points higher than is currently reported. Instead, mostly over the past 18 months, the U.S. labor participation rate has retreated to a level we haven’t seen in a quarter century. Moreover, the share of employed individuals who are employed full time has also dropped by 3 percentage points, resulting in a significant contraction of employment activity. Even this would not be a difficulty had we not also vastly expanded the debt burden on the average family since then. Unfortunately, the high debt burdens and weak employment conditions cannot coexist without producing credit strains. Simply put, current employment levels are incongruous with servicing existing levels of household debt.

Who’s Really In Control of the White House? Maybe Not Obama – Alternet

No. Who’s on first!

It began reemerging in September with Gen. Stanley McChrystal’s Afghan escalation plan. McChrystal didn’t just ask President Obama for more troops — protocol-wise, that would have been completely appropriate. No, McChrystal went rogue, preemptively leaking his request to the media, then delivering a public address telling Obama to immediately follow his orders.

Odierno: US Could Slow Exit From Iraq –

Apparently, who’s on second thoughts as well…

One of Gen. Odierno’s top subordinates, Brigadier General Kevin Mangum said only days ago that the “biggest concern” officials have is not the rising violence ahead of the Iraq election, but the prospect of rising violence after the election. Though levels of violence has jumped all over the place in Iraq in recent months, the trend in sectarian tensions is decidedly toward more, a tailor-made excuse for stalling the pullout.

Ron Paul! –

The followers of Ron Paul can’t stop slapping themselves on the back. Here Justin Raimondo takes on the NeoCons, Palin, the wars, and Beck:

A rebellion among conservatives has long been brewing, and the CPAC convention represents the first skirmish in a civil war on the right, a war that is essentially over foreign policy. The Paul movement is well-organized, activist-oriented, and well-funded: more importantly, it has a well-grounded ideology, one that offers an alternative to the brain-dead neoconservatism of Republican party hacks and third-rate politicians like Rudy Giuliani – whose single delegate to the 2008 Republican convention fairly represents the strength of the Rabinowitz wing of the conservative movement.

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Boone and Johnson: We may be nearing a calamitous global collapse.

February 23, 2010 Leave a comment

Peter Boone and Simon Johnson argue that Washington’s inflationary policies are leading the world toward disaster:

Over the last three decades, the US financial system has tripled in size, as measured by total credit relative to GDP … Each time the system runs into problems, the Federal Reserve quickly lowers interest rates to revive it. These crises appear to be getting worse and worse – and their impact is increasingly global. Not only are interest rates near zero around the world, but many countries are on fiscal trajectories that require major changes to avoid eventual financial collapse.

What will happen when the next shock hits? We believe we may be nearing the stage where the answer will be – just as it was in the Great Depression – a calamitous global collapse. The root problem is that we have let a ‘doomsday cycle’ infiltrate our economic system …

They add:

We both worked for many years in formerly communist countries, and this project reminds us of central planners’ attempts to rescue their systems with additional regulations until it became all too apparent that collapse was imminent.

Brad Delong thinks John Cochrane is certifiable. Hopefully, they’ll get adjoining padded cells, with bunk-beds so Paul Krugman and Lawrence Mishel can join them.

February 23, 2010 Leave a comment

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By way of Brad Delong; we present a PBS debate on economic policy between John Cochrane, who thinks you should sit at home and starve, and Lawrence Mishel, who wants you to work while you starve.

How best to cut your wages to increase the growth rate of the economy? That is the question! Trapped between the economists who want to increase the rate of GDP growth by using inflation to cut your wages, and economists who want to increase the rate of GDP growth by using unemployment to cut your wages, the only thing certain about the next period is that your wages are toast.

This, as usual, is presented to you as a Hobson’s Choice. Cochrane warns you that spending money to combat unemployment will result in huge deficits, which eventually will require you to pony up higher taxes to pay off. Mishel warns that not spending money to combat unemployment will result in you, and millions like you, being locked out of the workforce for a very long time.

You have 30 seconds to make a decision: Spend $200,000 for job paying $32,000, and starve; or, don’t spend the money and starve?

The clock is ticking…

Read more…