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July 23, 2010

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sbw

Whoa! Seeing Sarah Spitz' picture almost made my eyes bug out giving me a heart attack.

boris

If he had stopped to fill up his gas tank he would not have been involved in the accident at the stoplight.

Let that be a lesson ... if you want to avoid accidents at stoplights always stop to fill up your tank.

Chubby (formerly Parking Lot)

As I understand it, the value of the dollar is not controlled by any regulating body, it is determined by the currency markets and its whims du jour.

boris

According to at least one exellent economic analysis it is said that the strength or weakness of the dollar is determined by what the president wants.

Dunno how that works exactly ... maybe the president just casually drops a hint or two like "who will rid me of this hideous strength of the dollar".

Rick Ballard

Chubby,

Reagan appointed Greenspan the first time. My problems with the RealMarkets piece involve the metric chosen and the silliness of the end points as much as the risible notion that Presidents "get what they want" wrt monetary policy.

Boris,

A surfeit of imagination, perhaps. "This time will be different" or "change is good" don't require much of a sales pitch to convince those unable or unwilling to spend time in thought. Unfortunately, that describes the hinge of the Muddle rather too well.

Chubby (formerly Parking Lot)

Rick,

If the president is not getting what he wants in terms of interest rates, can he fire his appointee?

Rick Ballard

Chubby,

Excellent question. I don't recall any Fed Chairman being fired and I'll have exercise some Bingfu in an effort to find out - or someone else will save me the effort.

Chubby (formerly Parking Lot)

I should have looked it up myself, was being lazy ...

boris

"This time will be different"

That may be what makes it so hard to turn the corner ... but ISTM the original problem is more along the lines of what Richard Feynman would call cargo cultism and culture wide strident advocacy for people to fool themselves rather than learn how not to.

Ignatz

--My problems with the RealMarkets piece involve the metric chosen...--

Rick,
I agree that the "real dow" part of the post was pretty useless. I didn't link it for that.
As to the dollar and monetary policy, Bush reappointed Greenspan in 2004 after he had first inflated and then punctured the stock market bubble in the nineties, and while he was already holding rates lower than needed, so he knew he was getting a chairman who at the very least was not shy about manipulating the economy regardless of its effect on the dollar. And no fed is immune from the executive's desire for monetary policy and the Bushies made no secret of their desire for a weak dollar. Many, many conservative economists noted and criticised it at the time.

Cecil Turner

higher interest rates would have put the brakes on subprime lending

I'll admit this ain't my forte, but I don't see it. Higher rates would raise the prime, but you'd think that'd just make a subprime more attractive (especially if they were mandated and underwritten by law). In any event, I'd submit you cannot discuss the meltdown rationally without mentioning Fannie Mae and Freddie Mac.

If the president is not getting what he wants in terms of interest rates, can he fire his appointee?

My understanding is "no." From the FED faq:

Once appointed, Governors may not be removed from office for their policy views. The lengthy terms and staggered appointments are intended to contribute to the insulation of the Board--and the Federal Reserve System as a whole--from day-to-day political pressures to which it might otherwise be subject.

jimmyk

If the president is not getting what he wants in terms of interest rates, can he fire his appointee?

I think the answer is no. The main threat to the Fed is for Congress and the President to reduce its power and independence. So it's pretty hard for a president to "always get the monetary policy he wants."

FWIW, I disagree with that RCM article. I don't think the price of gold (which is what he's really talking about when he refers to the "cheap dollar") is that big of a deal. Many of the other items on the list were the result of the fact that Bush wasn't a dictator, he had to get stuff passed through Congress.

I'd say Bush's big economic mistakes were letting government spending grow too much, and not being sufficiently careful with all that "ownership economy" mush. But these are relatively minor faux pas compared with what Congress wrought, especially with Fannie and Freddie, which both Bush and Greenspan were on record trying to fix.

Rick Ballard

Boris,

Feynman might argue that the "original problem" involves an overabundance of those who would not be among us were nature left to her loving way.

I'm not sure why 911 is being left out of the causation analysis. It seems rather like "Aside from that, how did you like the play, Mrs. Lincoln?". I would also note the acceptance by both Reps and Dems of the idea that ABS and CDS were "new and innovative" products destined to "open up credit while offering assurances as to the integrity of markets". And, just mebbe, generating enough in fees and commissions to add a bit more friction cost to the market.

Who can gainsay the fantastic "progressive" effects of tacking CRA onto MBS and then writing CDS coverage to assure us that all is well in this best of all possible worlds? I'm sure the denizens of Manhattan would like to see the spotlight kept on DC but Congress was really only dancing with them what brung'um.

Chubby (formerly Parking Lot)

Rick, do you think the fed's low interest rates enabled the denizens of Manhattan?

jimmyk

Congress was really only dancing with them what brung'um.

Rick, there will always be parasites ready to feast, but they can't survive without the host. Congress served us (the taxpayers) up and the vermin did what they only know how to do.

Rick Ballard

Chubby,

I'd say the loss of institutional memory through attrition by age and death played a greater part. Minsky and Kondratiev wander around the periphery of experiential knowledge loss with their wave theories but they don't examine it very closely.

I would also place the gross incompetence of the credit rating agencies and reliance upon "modeling" higher on the causation chain than low interest rates. It was a concatenation insusceptible to linear failure analysis.

daviod

O'Reilly apologized to Sherod last night saying he should have read the full transcript before commentating.

I wonder if he really read the transcript because there is more than enough in the remaining speech to question whether Sherod's awakening 24 years ago was a temporary condition.

Sherod's media blitz in the last few days is not helpfull to her cause.

daviod

"They also forget the economy was fine under Bush until the Democrats took back the House and SEnate under Reid and Pelosi, that's when the downturn occurred, having nothing to do with Bush policies."

McCain should have campaigned on this. It is a pity he spent more time demonizing Bush than campaigning against Obama. I suppose this is what happens when you have Democrats as your campaign advisors.

Conservatives should have thrown this down the throats of Liberals at every opportunity. It is not too late to start.

Jim Rhoads a/k/a vjnjagvet

But these are relatively minor faux pas compared with what Congress wrought, especially with Fannie and Freddie, which both Bush and Greenspan were on record trying to fix.

Right, Jimmy. Bumster, Fwank and Dood huffed and puffed and convinced most congresscriters that F&F were just fine and needed no objective regulation. These institutions are part and parcel of the spoils system, indispensable to the governing style currently. Even though most objective folks knowledgeable in the ways of mortgage lending thought F&F were part of the problem, noting was done to curb their abuse of the system.

Gabriel Sutherland

Well, what do you know. I suggest that Ms. Sherrod be given a microphone and let her go to town.

She's decided to take a victory lap.

On Andrew Breitbart: I know I've gotten past black versus white. He's probably the person who's never gotten past it and never attempted to get past it.

I think he would like to get us stuck back in the times of slavery. That's where I think he would like to see all black people end up again.

COOPER: You think -- you think he's racist?

SHERROD: ... I think he's so vicious. Yes, I do.

And I think that's why he's so vicious against a black president, you know. He would go after me. I don't think it was even the NAACP he was totally after. I think he was after a black president.

Are the taxpayers still paying this person? Or is she sort of in limbo in between government jobs?

I suppose it is worth asking. Can't the USDA do better than this in their hiring?

Chubby (formerly Parking Lot)

Surely at some point there had to be an interest threshold where even the airiest of models could not accomodate subprime risk candidates

Rick Ballard

Jimmy,

I'll grant top billing to Congress, just not to any particular President. It's not as if an appropriate price was not extracted on Wall Street.

Come November, we may get to see at least a partial payment exacted in DC.

Gabriel Sutherland
McCain should have campaigned on this. It is a pity he spent more time demonizing Bush than campaigning against Obama.
But this time. Nancy Pelosi is radioactive in districts that are +5 or more blue according to the Cook PVI. Reid? Not much better.

In 2008 Pelosi and Reid could defend themselves by having Obama fight their battles for them. With Obama below 50 in approval, and below that with independents, Pelosi and Reid have only one thing to use to deflect - the race card.

I've asked a few sources if Greenberg Quinlan did inside polling on the race card for the Democrats. I've been told there is polling data for this. The big question now is where Obama wants to go. Without his name on the ballot he doesn't have near the muscle to motivate college kids. Heck, they're going to be back on campus poorer than ever this fall.

Turnout will be the difference. Presently, the GOP is between 51 and 57 in voter enthusiasm. Independents are around 40. Democrats are below 30.

I'm trying to think of what would motivate Democrats to show up at the ballot box. I'm having a hard time finding ways to move the ballot box to the cemetery.

RichatUF

Chubby-

The yield curve was negative for a year or so prior to the collapse so I'm not sure how the fed could have justified further rate hikes. Remember it was the SocGen sell off that triggered the first round of rate cuts. (Brenanke and Taylor have been going around on "the rates to low" argument. I'm also not sure how much a modest adjustment to rates would have made in the blow off years in CA and FL with price appreciation in the double digits). Part of the problem wasn't that rates were too low (the FFR got to 5.5% over the period in question) it was the "fine tuning" the fed tried (rates went from about 1% to 5% back to 1% in about a 4 year period). Also the oil superspike doesn't seem to be mentioned and it was more solvable (and much more important) than say "doing something" about Lehman (if the commission is to be believed they should have liquidated even before Bear) or having more officials jawbone the dollar higher.

More later.

Hope all is going well.

boris

gross incompetence of the credit rating agencies and reliance upon "modeling"

Reliance on modeling is also a factor in AGW.

Suppose economists and climatologists came to the self realization that their predictions deserve respect and acceptance equal to ... oh say an astronomer's. After all didn't they study just as hard and aren't their computers just as big or bigger?

Even though there is no analytical solution to the three body (in space) problem, astronomers seem to be able to predict eclipses and planetery alignments with some impressive degree of accuracy, hence fairness demands the same expectation regarding economic and climate predictions.

Not saying this is T H E problem. Just suggesting it might be a sketch of one symptom for why society abandons what works for unicorns and rainbows.

Chubby (formerly Parking Lot)

hey RichatUF ... yes all is well, and hope the same for you.

thank you for the excellent post (which is making my head explode a bit :))

Clarice

Gabriel, I bet Jim Webb's anti-diversity editorial in today's WSJ is a very good clue to what party internals are showing.

Jane

I heard some congressperson today - a democrat say : "We have to pay back this debt".

For some reason I went ballistic - well in my head. It was the "we" thing? Why do I have to pay back a debt that a couple hundred criminals caused? And I'm serious. Unless the criminal class in Washington are jailed for life I have no interest in paying for their crimes.

daddy

This is not about Anderson Cooper.

Just wanted to mention that just like Anderson Cooper did many times on his show yesterday as he intentionally smeared and tried to destroy Breitbart's credibility and reputation to the best of his ability.

This is not about Anderson Cooper even tho' what that despicable sanctimonious slimeball did to smear Breitbart truly was smarmy. Breitbart's initial piece was not about Sharrod. It was about showing how the NAACP is racist. In doing that Breitbart said he didn't care about Shirley Sharrod, that she was not his target---his target was the NAACP. So what Anderson Cooper then did is to ignore completely the thrust of Breibart's story and to focus on Breitbart's comment, edited and taken out of context, that he didn't "care" about Shirley Sharrod. Anderson Cooper blew context out the window, and now went after Breibart for not "caring" (not having human compassion) for a black woman he has supposedly just injured, when what Breibart was saying in his story as is evident to anyone who actually read his column, is he didn't care about Sharrod being the story (he was not much interested in that) --what he "cared" about was the story proving that the vile NAACP was racist because they sat applauding and yucking it up at incontrovertible racist comments by Sharrod.

That is how the despicable, disgraceful, disingenuous, loathsome, pontificating, sanctimonious, self-important, hate-filled, hypocritical, craven scumbag weasel Anderson Cooper intentionally and dishonestly smeared Breitbart yesterday on his CNN Show...But this is not about Anderson Cooper.

DrJ

daddy, what do you expect from a Vanderbilt? A trust fund kid! Sorta like Ayers.

Danube of Thought

Bush appointed Greenspan and Bernanke did he not?

No one appointing a fed chairman can either know or control what the guy is going to do down the line, and so far as I am aware the president cannot fire him. It's like Eisenhower appointing Earl Warren to the Court, or Gerald Ford appointing Stevens. Who knew?

Strawman Cometh

Ann Coulter just ripped Rich Sanchez a new one, several, actually, when he contrasted her defense of Breitbart with her criticism of Dan Rather. It was a thing of beauty.

bunkerbuster

The Bush team caused the credit meltdown by removing the regulatory limit on leverage at investment banks. If Bear Stearns, Lehman and their ilk hadn't been leveraged at more than 20 times levels, investing in mortgage CDOs would not have been attractive and there would have been no collapse, period. Clinton bears some responsibility as well, for overseeing financial deregulation that led to the creation of too-big-to-fail banks like Citigroup and AIG. Under Glass-Steagal, AIG etc wouldn't have been allowed to write CDS and that part of the collapse couldn't have happened.
But if we're going to do forensics, we need to also consider what the 2001 to 2007 economy might have looked like without the housing and mortgage refinancing booms. Remember, 2007 was being portrayed as the peak of a Bush recovery, yet inflation-adjusted personal income was still below 2000 levels. But imagine how much worse that would have been without those millions of mortgage refinancings pumping gazillions of disposable income into the economy and all those ludicrous mortgages pumping phony profits into Wall Street banks. At one point, the financial sector accounted for 40 percent of all corporate profits. If you needed a single stat to tell the story, that's a good candidate. Without the phony housing boom, the Bush recession would have ground onward from 2001 year after year, not only discrediting his tax cuts but, I'd wager, killing support for the Iraq war. History shows Americans love a good war as long as the economy is steaming along, but when things get tough and our own vulnerability becomes more apparent, the idea of spending gazillions to empower yet another Muslim strongman in Iraq looks like a real loser politically.
Economic failure would have killed Bush's legacy one way or another. That it was spectacular, near cataclysmic, is certainly bad for the country and the world even, but probably works out better for Bush's legacy...

narciso the harpoon

That was a sparkling bit of paralepsis, daddy.
I blame Grenspan's abandonment of his Randian
roots in thinking he could steer the economy
to a soft landing, It didn't work in '99-01' how did he think it would work know

RichatUF

And bunkerbuster chimes in...read the article Ignatz and I think running against "Bush and Obama" isn't a ticket to election success. More to follow.

bunkerbuster

You've gotta love the prospect that White Civil Rights is shaping up to the be the primary plank in the Republican's 2010 platform. Can we describe Andrew Breitbart as a White Civil Rights activist?? lol....

DrJ

What's the link to the narcisolator, again?

RichatUF

Here is the narcisolator link.

Sorry I responded.

Facts Matter

Today’s honest conservative - Finally, the NBPP(New Black Panther) case offers an allegation worth investigating

Commission on Civil Rights vice-chairwoman Abigail Thernstrom has delivered what should be a lethal blow to the Fox News-hyped “scandal” regarding the Department of Justice and the New Black Panther Party. And she’s also turned the New Black Panther case into something the media would be justified in investigating.

In the course of an interview with Politico’s Ben Smith, Thernstrom, a conservative who was appointed by George W. Bush, alleged that the conservatives she serves with on the commission seized on the New Black Panther case not out of concern for civil rights and the law, but rather to wield it as a cudgel against the Obama administration and Attorney General Eric Holder. In stark language, Thernstrom claimed that her colleagues held “fantasies about how they could use this issue to topple the [Obama] administration,” and that they “had this wild notion they could bring Eric Holder down and really damage the president.”

Thernstrom has effectively confirmed what most of us already assumed to be true — that the New Black Panther Party allegations are nothing more than invidious political hackery. And it should be noted that Thernstrom’s claims carry more credibility than anything J. Christian Adams, the GOP activist and former DOJ attorney whose allegations of institutional racial bias at DOJ form the spine of the NBPP non-scandal, has thus far brought to bear; she clearly isn’t grinding any political axes, and she boasts first-hand knowledge of the events she says transpired.

Will the Washington Post cover how Bush appointees on the Commission on Civil Rights have allegedly conspired to use the DOJ yet once again as a political tool of the Republican party.

Rodney King matt

can't we all just get along?

RichatUF

Very funny, Sen. Webb is a Dem in good standing. And hell, the Obama Administration can't fire a black female political appointee without keeping the story alive for a few days (regardless of the context of her remarks)-so much for being a "post-racial" administration.

DrJ

Another one to add...

narciso the harpoon

Think Progress and 'Facts matter' does not compute

DrJ

You know, I just re-read the "piece" from "Facts Matter". I did not see an single citation to a fact from which one can read anything about the blatantly-derived drivel. One quote, totally out of context.

I thought that this was not kosher any longer.

Captain Hate

What are the chances that stinkprogress guy has ever used the word "invidious" in a sentence before?

RichatUF

DrJ-

Context matters-only if you are a democrat.

Strawman Cometh

Cooper's still at it. All Shirley, all the time. She who has gotten past the black-white thing. Unlike Breitbart, who, Shirley points out, wants to take us back to slave times.
OT
Way back in my immuno-virology lab days, I suggested the Dengues as the name of our city league volley ball team.

Ignatz

--read the article Ignatz and I think running against "Bush and Obama" isn't a ticket to election success--

Me neither Rich.
I guess I should have prefaced that the start and end of the article seemed kind of stupid. What I found interesting was his choice of the top five mistakes Bush made. I doubt I'd have the same list (overspending was a bigger problem I think) but I liked his perspective and attempt to have a conversation about what mistakes were made and how not to repeat them.
Won't do any good to claw the majority back from the nuts in power now and turn around with No Child Left Behind II and Son of Prescription Drug Benefit.
As far as I'm concerned Paul Ryan's roadmap ought to be tatooed on the Reps noggins.

glasater

Paul Ryan's site

RichatUF

Ignatz-

I don't have much more to add than what has been said above by others. Most of the mistakes listed were political (and 3 and 5 had more to do with the weak Republicans in Congress).

Chubby-

Things are improving for me, but still a pretty steep climb.

Soleilmavis

Romans: 3-5 If our unrighteousness brings out God's righteouseness more clearly, what shall we say? That God is unjust in bringing his wrath on us? (I am using a human argument). 3-6 Certainly not! if that were so, how could God judge the world?

Judgment Days would start, Only after these things happened.
(1) Natural disasters were the work of mankind hands. (already happened)
(2) Isarel returned to Jerusalem (already happened)
(3) The Third Temple (already happened)
(4) The men of Nineveh stand up (They suffered horrible persecutions) (already happened)
(5) 144000 sealed ones (They suffered horrible persecutions) (already happened)
(6) The Queen of the South Rise (She suffered horrible persecutions) (already happened)
(7) The two witnesses (It's happening)
More details: http://peacepink.ning.com/profiles/blogs/some-important-things-during

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