Brainiac Conspiracy

Saturday Night Interlude

Our world may be wack, but that don't mean it ain't funky.

---Vitelius

Safety Net?

What safety net?

Oh, that safety net. Well, sorry, you see it's all gone now. And yes, it's true, our friends stole it from you, but you'll just have to muddle through as best you can. Unless you want to be administered more punishment for having the insolence to ask for it back:

European Central Bank President Mario Draghi warned beleaguered euro-zone countries that there is no escape from tough austerity measures and that the Continent’s traditional social contract is obsolete.

He said Europe’s vaunted social model---which places a premium on job security and generous safety nets---is “already gone,” citing high youth unemployment; in Spain, it tops 50%. He urged overhauls to boost job creation for young people.

He argued instead that continuing economic shocks would force countries into structural changes in labor markets and other aspects of the economy, to return to long-term prosperity.

“There is no feasible trade-off” between economic overhauls and fiscal belt-tightening, Mr. Draghi said.

Backtracking on fiscal targets would elicit an immediate reaction by the market,” pushing interest-rate spreads higher, he said.

Democratic self-rule is the most desirable form of governance on the face of the earth, and should be encouraged everywhere. At least until the ruled get uppity and try to assert control over who gets to keep all the money.

---Vitelius

America's Job Creators

Create jobs for people to find out how to make you eager to give them your money for shit you don't really need. How awesome is that?

I've slogged through a lot of these godawful market surveys, too---I've got binders full of this shit, actually---and I can't tell you how many times my eyes have glazed over descriptions of "purpose-driven professionals" who lead "active, can-do lifestyles" and who rely on some useless widget to "explore new horizons" and "take them to places they've always wanted to go." I also can't tell you how close I came to wetting my pants watching this just-sick video. (Via Atkins Research.)

---Vitelius

Liberal Democrats

They ain't what they used to be.

Of course I realize that this is just Jerry Brown putting his tough-love budget strategy to the test. He's already told the voters that as long as they keep sending enough Teabilly lawmakers to Sacramento to thwart any tax increases (he needs supermajorities), he's going to make the ensuing budget cuts hurt as many working-class people as possible---presumably as an incentive for voters to stop pulling the lever for Teabilly lawmakers. It's fair enough politically, and while our latest redistricting may actually bequeath us a wingnut-proof legislature, what's really depressing is how little public outcry there has been in our state over cuts in education and medical care for poor people, tuition hikes at UC, etc., outside a few of the usual bleeding-heart activist groups. All you ever seem to hear anymore from the usual media sources are the same shopworn bromides about California being a failed state with oppressive taxation and burdensome regulations and union thugs running amok and all the other shit that right-wing opinion-makers have used to frame every domestic policy argument since Franklin Roosevelt was president.

So what has changed since Roosevelt's time? Republicans were using the same tired rhetoric back then, but they sure didn't get their way very often. Hell, what's changed since the last time Jerry Brown was governor? Gee, I dunno, but I am certain it has something to do with Democrats being too in thrall of their left-liberal base and their need to accommodate the ideological center. It's been the same problem with Democrats for the last 30 years, hasn't it?

---Vitelius

Let The Lions Go Bankrupt

So he doesn't pack the house like a rock star. Didn't anyone see the beauty in Mitt holding his little confab in a venue that's owned by a former auto executive, and which was built with taxpayer subsidies?

I am starting to get the idea that his advance people aren't the only ones that are missing a few pencils from the box.

---Vitelius

Random Thoughts (Scary)

Good lord, were we really governed by these ghouls for eight years?

Okay, I realize it was Morning in America™ back then, but I also remember that the employment market generally sucked for most of the decade, and it was a shit time for young people to find any meaningful work that paid as well as what their parents were making, and as crappy as our economy is now, I have no desire to hop back in the Time Machine and relive that awful period since, if memory serves, the amount of money I made in the last year of the decade was nearly identical to the amount of money I made in the first year of the decade. At least that's my recollection. Anyone else with a similar experience?

---Vitelius

Also Too, Unicorns

If some miraculous "Third Way" economic theory existed that combined equal measures of Austerianism and Keynesianism, and that theory could be shown effective at reviving a depressed economy, some clever economist would already have drawn up a working model for it; it would probably even bear his or her name. But no one has, most likely because no model can be shown to actually, you know, work.

Come to think of it, you could make a pretty good argument that this "Third Way", neither-fish-nor-fowl model is the one our leaders have been been applying for the past three years---lots of stimulus for banks, a little for taxpayers and the unemployed, and lots of austerity for state and local governments---and yes, I suppose you could say the model "works", but hasn't been too terribly effective, now, has it?

I've got another idea: give me some money at zero interest and let me sell it back to you at three percent. Alternatively, since I don't have a job right now, how about if you give me one? Yes, you're assuming short-term debt to do either of these things, but whichever approach you choose, I'll be making more money than I am right now ($0 per year), which means that I can get off unemployment insurance and start paying taxes again, which lowers your disbursements and helps you reduce your debt long-term. Plus, now I have money to spend in my community, which enriches local businesses who can then pay more taxes and hire more workers, who in turn pay more taxes and have more money to spend. It's win-win-win for everyone! And all you have to do is crank out some more money and give it to me---whether it's in the form of redeemable bonds or a full-time job is up to you.

But won't cranking out more money drive runaway inflation? Yes, in theory, but that hasn't happened here obviously, and even if it does happen, you look to achieve full employment before you start tightening the money supply. Because we know what happens when you run the model in reverse.

But what if all these multipliers don't quite cover the debt? Simple---raise taxes on rich people to make up the shortfall. But won't those tax increases kill investment and job creation? No. How do we know this? History.

Shit, I'm not even an economist, but this seems like freshman-level logic to me. Don't they teach this sort of stuff in university macro classes?

Unfortunately, I guess we know the answer to that.

---Vitelius

It's Just Like Wrestling

Inasmuch as the combatants here are grappling for an outcome that the promoters have already agreed upon. Oh well, guess it's the thought that counts.

---Vitelius

Lyndon Baines Obama

He seeks no wider war. (Via Greenwald.)

---Vitelius

Today in Financial Reform

Nothing could go wrong with this:

Exchange-traded funds for speculative-grade bonds are drawing the biggest inflows on record from investors seeking easier access to higher-yielding assets.

ETFs that track junk-bond indexes have tapped $5.5 billion of investments in the securities this year, according to data from Lipper. That almost quadruples the $1.4 billion recorded during the same period of 2011, which was then the highest since the fund research firm started tracking junk ETF data in 2007.

While exchange-traded funds comprise 2 percent of the $1 trillion in U.S. corporate speculative-grade debt outstanding, they accounted for more than a third of the total $14.8 billion of inflows this year into mutual funds and ETFs that buy junk bonds. With the Federal Reserve pledging to hold its benchmark interest rate near zero until at least late 2014, investors are seeking better returns, said Peter Tchir, founder of New York- based hedge fund TF Market Advisors.

"ETFs are giving people a fair degree of comfort, providing them with daily transparency and the ability to see a trade in and out, and asking for relatively low fees," Tchir said. The funds allow individual investors to speculate on debt ranked below investment grade without owning the bonds, which is stoking more flows into ETFs.

Of course, these exciting new instruments satisfy a critical market demand:

Firms including BlackRock Inc. and State Street Corp. that run ETFs should be able to operate under fewer constraints than the hedge funds and dealers with whom they compete for bonds, Tchir said. Hedge fund managers are wary after seeing liquidity dry up in 2011, while dealers are facing regulatory pressures from the Volcker rule, so both are looking to own something they can easily divest, he said. The proposed regulation, named after former Fed Chairman Paul Volcker, will restrict the risks banks can take with their own capital.

Bubble boys, they'll never learn. And why should they? They raided your 401(k), vaporized your pension, hoovered your mutual fund, even stolen your house out from under you, and all they've ever had to do by way of penance is fork over a few cents on each dollar swindled to the SEC with no admission of wrongdoing. Why would it be any different after they dynamite this market?

Honestly, I don't why anyone who is an everyday investor would put their money in anything other than Treasury bonds and maybe a handful of old-line blue-chip equities. Anything more exotic at this point is an open invitation to having your bank account drained dry by these people.

---Vitelius

Standing by Our Friends in Freedom

Okay, I've changed my mind on Syria. It didn't make much to bring me around.

So let's send lots of of guns to these people:

In a change in policy, the leaders of the Syrian-backed Islamic militant group Hamas declared their support Friday for anti-government protesters in Syria.

Speaking at Cairo's al-Azhar Mosque, Hamas Prime Minister Ismail Haniyeh, told worshipers, "I salute the Syrian people who strive toward freedom, democracy and reform."

Arming the opposition: how awesome would that be?

Maybe the neoliberal interventionists at the New Republic should sit down, have a stiff drink, and ask themselves: Which would we honestly prefer---a Syrian Arab Republic run by the Assads, or an Islamic Republic of Syria that takes its cues from Tehran? Granted, those are not the only two possible outcomes over there, but put another way: Unless you've asked yourself, "What's the worst that could happen?," you haven't spent enough time thinking through the implications of your policy prescriptions. Sometimes doing nothing is better than doing something, particularly if you're not certain how "something" is going to work out.

---Vitelius

Snake's Nests

As a rule, it's a good idea to avoid stepping in them. So maybe we shouldn't consider it.

Especially when the snakes, uh, have some problems of their own.

---Vitelius

Big Difference This Time

In Iraq in 1991, our government encouraged armed insurrection, then backpedaled as soon as it became apparent the insurgents were doomed.

In Syria in 2012, our government is working with its neighbors to provide humanitarian aid to the opposition and to enforce sanctions on the aggressors. We haven't encouraged an armed revolt that would be hopelessly bloody, probably futile, and likely to destabilize the entire region were it to spin out of control. What else can we honestly do over there that would redound to the national interest at this point?

Yes, it's horrible what's happening, and what may be likely to happen in the future. But I frankly don't see how creating the conditions for a Turkish invasion of Syria, with thousands of refugees caught in the crossfire, falls under any other category than "spinning out of control," making a bad situation even worse by turning a civil war into a regional war. One can only imagine what the Iranians and Russians would make of it:

It would also be very difficult to stop Russia, Iran or others from supplying fresh arms and aid to Asad once the opposition’s backers are openly doing so. Providing arms to a relatively weak opposition will not necessarily close the military gap---it might simply lead to a bloodier conflict.

So if you want to take our government to task over its impetuous behavior in 1991, fine. Let's just remember who was running the government back then.

---Vitelius

In Newly Discovered Historical Documents, Disputes Arise Over Postwar Economic Theory

Okay, now that a new chapter in world history has just been uncovered, how long do we have to wait before we read a piece of analysis in the Post or Politico that goes something like this?

Keynes’s position reflects the belief of many liberal economists that imbalances in trade are next to impossible to resolve in a fixed exchange rate system without surplus countries accepting that they have as much of an obligation to do something about them as the offending deficit countries. These same economists point to the current Greek financial crisis, with German trade surpluses looming as a sticking point in debt-forgiveness negotiations between Germany and its debtor nations on the periphery of the Eurozone, as proof that Keynes's theories on fixed-rate monetarism have been largely confirmed.

Critics of Keynes, however, beg to disagree. "Bretton Woods plunged the U.S. into an economic crisis that was far worse than what we saw in the 1930s, with deficits in excess of 100 percent of GDP by 1946," said syndicated columnist Amity Shlaes, author of a best-selling book on the Great Depression. On the campaign trail, Republican Party presidential candidate and former history professor Newt Gingrich concurred, adding that "this Alinskyite experiment in social engineering bequeathed us the monstrous legacy of the modern welfare state with its culture of dependency and despair.” New York Times essayist David Brooks observed that while Keynes's theories "were right on the particulars, they were also sorely lacking in their failure to acknowledge the shared moral values that shaped and defined the pre-war Anglo-Saxon world."

I dunno, maybe I'm just growing cynical in my old age, but I've practically resigned myself to the notion that we'll forever be trapped in a media world of false equivalencies, where every empirical point of historical fact must be weighed against the fulminations of clowns and crackpots in the interest of fairness to both sides. Maybe I just read too many newspapers, and need to get out more often. (Via her.)

---Vitelius

The 0.3 Percent

They wrote out $30 billion in bad loans, and here's what it cost them:

The FDIC's biggest settlement so far targeted Washington Mutual. The FDIC sued several former executives, accusing them of gross negligence in pursuing high-risk lending that eventually caused the bank to lose billions of dollars and collapse in 2008. The FDIC sought $900 million in damages, but last December settled for $95 million, most of it covered out of insurance, with several executives contributing less than $500,000 between them.

I'm having a really hard time at this point trying to figure out how we're deterring bad behavior and/or punishing moral hazard in the financial markets when the amounts we're willing to accept in fines is barely even a rounding error. I mean, $2,000 per stolen property looks positively draconian compared to this.

Looking back, maybe someone in Team Democrat should have considered primarying the President. Of course, s/he would have had no chance of winning, but if it at least forced him to account for this shit, I think it would have been worth the time and effort.

---Vitelius

Please Make It Stop

Jesus:

Appearing on MSNBC’s “Morning Joe” program on Thursday, Mr. Huntsman---who has endorsed Mitt Romney for president---said that the political system was “broken” and that a third party may be the only way to fix it.

“I think we’re going to have problems politically until we get some sort of third-party movement or some voice out there that can put forth new ideas,” Mr. Huntsman said. “Someone’s going to step up at some point and say, ‘We’ve had enough of this.’ The real issues are not being addressed, and it’s time that we put forward an alternative vision, a bold thinking. We might not win, but we can certainly influence the debate.”

Our political system is not "broken" because of some inbred institutional defect that our existing parties are incapable of fixing. The system is broken because (a) the system is overrun by people in Jon Huntsman's own party whose stated purpose in life is to ensure that the system remains broken when they're not running the show, and (b) the media apparatus that's supposed to monitor the system simply can't or won't call out the people in Jon Huntsman's party for throwing sand into the wheelworks because it wouldn't be fair and balanced to report the fact that they're throwing sand into the wheelworks, and it wouldn't really matter anyway since Democrats Do It Too™. Also too, (c) corporate money, for which nearly all legislators are forced to grovel now that campaign financing limits are gone.

So for the thousandth time, the fix for our "broken" system---which was broken by Republicans, enabled by a gullible media, and awash in corporate money---is not going to be a Republican lawmaker who wants to dismantle the system and return it to the Gold Standard, a Republican former governor of a cash-sucking welfare state, a Republican former think-tank chairman who wants to privatize Social Security, a millionaire Republican birther spokesmodel, or a billionaire Republican media baron. The fix for our "broken" political system is (a) an end to corporate financing, (b) a more critical national news media, and most crucially, (c) fewer, not more, Republicans. This really is not difficult to figure out.

Update: These folks were kind enough to forward me a link to their site. Looks like they too are feeling the awesomeness of bipartisanship.

---Vitelius

Selective Memory

Funny, isn't it, how no one seems to talk anymore about the campaign of deceit and duplicity our leaders waged to trick the nation into supporting a costly and unnecessary war against some scary brown people. It's almost as if it never happened.

Good to know, then, that we'll only be tricked into the next costly and unnecessary war because of the campaign of deceit and duplicity that the scary brown people are waging against us. Serves them right!

Also too, life insurance:

"If I was an Iranian national security planner, I would want nuclear weapons," Bruce Riedel, a 30-year veteran of the CIA now at the Brookings Institution in Washington, said in January.

"Look at the neighborhood that I live in: Everyone else has nuclear weapons who matters; and those who don't, don't matter, and get invaded by the United States of America," Mr. Riedel said on a panel hosted by the Atlantic Council, a Washington think tank.

---Vitelius

Martians, Maple Street, Rinse, Repeat

Matt basically nails it on his blog today. Or half of it, anyway:

These people have run out of others to blame, run out of bystanders to suspect, run out of decent family people to dismiss as Godless, sex-crazed perverts. They’re turning the gun on themselves now. It might be justice, or it might just be sad. Whatever it is, it’s remarkable to watch.

True enough. But what's still troubling about them, and what will continue to be troubling about them as far into the future as anyone can see, is the fact that a substantial plurality of our citizens has bought into the bullshit, and after Romney or Santorum flames out in November, we're going to hear the Spinal Tap amplifiers jacked up to 50 as the true believers ascribe their loss to the Immutable Truth that they only lose when they abandon their core principles and don't nominate a true conservative, etc. Their conspiracy theories will grow more lurid, their rhetoric more insane, and if the past ten years are any guide, a media apparatus that's become attenuated to the mass-psychological dynamic of Extreme Sport will channel their rants into the national mainstream as merely another set of viewpoints, to be adjudicated with fairness and balance in the court of public opinion, for fear of evincing signs of liberal bias in their reporting.

Which is to say: no matter how patently full of shit they may be, their ability to frame the terms of political debate in this country, and their ability to saturate the airwaves with their paranoia, aren't going away anytime soon, and one wonders---fears?---if the 2010 midterms were not a one-off aberration but a prelude to a new dark chapter in the history of the Republic. I realize that ethno-demographic shifts in the country don't favor them in the long run---old Southern white guys are not a growth industry---but as 2010 showed, it doesn't take a true working majority to gain power in our form of government but only a dedicated, fanatical, and well-financed minority. Combine that with the ongoing voter disenfranchisement campaigns occurring nationwide, and in another election cycle some years hence, what happens should these lunatics should gain control of all three branches of the federal government, even if only for a few years? I hope I'm still not around to see it when it happens, but I suspect that I probably will be. And I doubt I'm going to like what I see.

Digby, who's the same age I am, expressed my sentiments earlier today:

In 1991 I was riveted by the Clarence Thomas hearings, appalled as I watched a panel of befuddled white men ignorantly pontificating about the topic of sexual harassment, stunned that I still lived in a world where a lone women could be brought before Cotton Mather's tribunal and treated as a harlot. It was a revelation to a fairly young woman who had been living under the illusion that those days were long gone . . . I realize it's hard to believe that a major Western democracy could actually go backwards on this---back in 1991 I fervently believed it was impossible. But it certainly is possible. It's already happened.

Sorry for going so pessimistic here. I just can't laugh at this shit anymore. Like head lice and cockroaches, the Teabillies will likely rule our world one day, but it would have been nice if our Democratic leaders in Washington had taken advantage of their historic mandate, just three years ago, to apply a generous dose of de-lousing spray to the body politic instead of reflexively reaching across the aisle to find consensus with the louses.

---Vitelius

If They'd Only Make the Hippies Go Away

Resolved: Anything that Democrats do is by definition "liberal"; anything that Republicans do is by definition "conservative." Hence the beautiful symmetry of our two-party political system that enables legislative consensus to be reached when both parties meet at the ideological center.

Now, given the real-world composition of each party's respective memberships, and the pronounced ideological shifts that have taken place within each party along the left-right spectrum, any thinking person would conclude the above resolution was the work of a moron who had been asleep in a cave for the last 30 years. But apparently, that's how a lot of educated people in our nation's capital actually think, and that's why when Republicans throw sand into the wheels of government and Democratic policies stall, Democrats are always seen as too liberal, even when they're advocating policies that Republicans once championed for years.

Hate to break it to the Third Way people, but we no longer have either a "liberal" or a "conservative" party in America anymore, let alone a party where a bunch of leftists call the shots. What we have instead are (1) a party that adheres closely to Nixonian Republicanism, and (2) a billionaire-funded band of paranoid bigots. Unless, of course, accusing the President of the United States of "infanticide" on national TV strikes you as an example of rational conservative discourse.

But hey, have fun drumming up votes for President Walker, or whomever your savior du jour will be.

---Vitelius

Opinions Differ Over Reason For Fuel Hikes

As mentioned earlier, you'd like to think that one of these days, our media watchdogs would take a good close look in the mirror and ask themselves if they had done anything at all to promote the mainstream acceptance of unhinged extremist discourse in our politics. Apparently, that day won't be today:

“There is no silver bullet. There never has been,” Obama said. “It’s the easiest thing in the world make phony election-year promises about lower gas prices. What’s harder is to make a serious, sustained commitment to tackle a problem that may not be solved in one year or one term or even one decade. But that’s the kind of commitment we need right now.”

Obama’s position reflects the White House’s belief that gas prices are subject to cyclical spikes due to forces largely outside its control. With demand in China and India on the rise and Iran cutting supply to European nations amid political fallout over the country’s nuclear program, administration aides dismissed what they characterized as the predictable media hysteria that follows each price upswing, confident that prices will dip again.

That point of view hasn’t stopped Obama’s rivals from trying to exploit the matter on the campaign trail, however. This week, GOP presidential candidate Rick Santorum blamed Obama’s “radical environmental policies” for the higher prices, suggesting Obama purposely aims to keep prices high to stave off global warming by discouraging people from driving. Newt Gingrich said the president “has been outrageously anti-American energy.”

Sigh . . .

Memo to David Nakamura and/or his editors: There is no "point of view" to this, or anything to "believe" here. What determines the spot price of crude oil on the global market is not, repeat not, a matter of opinion. It's due to variety of quantifiable economic factors that can be gauged daily, among them being supply, demand, investor confidence, and---as has been widely reported in recent days, if you fucking morons would spend five minutes consulting the Google---manipulation of commodities markets. "Opinions Differ Over Reason For Fuel Hikes" may be eminently fair and balanced to the uninformed concerns of ignoramuses, but it is factually inaccurate, grossly misleading, and an abdication of journalistic duty to tell your readers what the hell is actually happening in the world, not what a bunch of politically motivated crackpots believe want you to believe. Is this really so hard to understand?

---Vitelius