Where's the Outrage?

Every summer it gets busy at work. Being a trauma surgeon is busy normally, but during the summer everything really ramps up. So, I’m finding it harder and harder to find time to post anything that is meaningful. I’ll continue to do my best.

* Several days ago, I called for Representative Anthony Wiener to resign. He has lied to his constituents and that’s not tolerable. My position has been consistent. I called for David Vitter to resign (the family-value Senator who was on the DC Madam’s call list). I called for Senator John Ensign to resign. Personally, if you think that you are a playa, that’s fine with me. Just don’t tell me that you have great family values, because you don’t. If you want to send pictures of yourself to college coeds, that’s fine with me, too, but when you get caught don’t lie to me. It’s really that simple.

* The Republicans have successfully confused Americans over the debt ceiling. Just like in the health-care debate, Republicans have successfully blurred the truth, again.

* Remember the nuclear plant that almost melted down or sort of melted down in Japan? The people who’ve been displaced still have nowhere to go.

* A monster fire burns in Arizona. The Texas wildfire appears to be somewhat contained.

* I never understood the war on drugs. I thought we were wasting a lot of money. It turns out that we have been wasting billions of dollars.

* One of these days we are going to get serious about fighting back against OPEC. They’ve decided not to increase production. I don’t think that this is a surprise. When you’re rolling in dough and your biggest supplier is only more dependent upon your oil, why change your habits? One of these days, as a nation, we’re gonna get serious about renewable energy.

* Although there is a large list of very ridiculous politicians in Washington, Rand Paul is one of the most ridiculous.

So what’s on your mind this morning?

Tags: Environment, Party Politics, The Colbert Report by ecthompson md
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Tags: Books, Religion by Neil Aquino
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I’m simply running around like a chicken…you know the rest.

From Political Animal:

• Escalation in Libya: “In a sudden, sharp escalation of NATO’s air campaign over Libya, warplanes dropped more than 50 bombs on targets in Tripoli on Tuesday, obliterating large areas of Colonel Muammar el-Qaddafi’s Bab al-Aziziya command compound.” (Ed. note – I thought that we weren’t targetting Gaddafi? I’m just askin’.)
• Congress won’t act, and the Fed doesn’t want to: “Federal Reserve Chairman Ben Bernanke conceded that the economic recovery is ‘frustratingly slow’ for millions of unemployed Americans, but threw cold water on the notion that the central bank can be a cure-all for the economy’s ills.”
• On the other hand, Bernanke expects stronger growth in the second half of 2011, as Japan recovers and gas prices come down. (Ed note: I truly get uncomfortable when the Fed Chairman has to hope that gas prices will stabilize.)
• President Obama believes the economy has to “accelerate,” but he rejected the notion of a double-dip recession.
• Pelosi wants an investigation into the Weiner controversy: “In a letter to Ethics Committee Chairman Rep. Jo Bonner (R-Ala.) and Rep. Linda Sanchez (D-Calif.), the ranking Democrat on the committee, Pelosi (D-Calif.) said an investigation of Weiner is needed due to ‘inappropriate’ conduct. “ (Others have called for Weiner to stepdown including me.)
• I hope this doesn’t mean the end of the White House White Board: “Austan Goolsbee, a longtime adviser to President Obama and the only economist left on his core economic team, plans to leave as chairman of the Council of Economic Advisers by September after a year in the job to return to the University of Chicago.”
• The story of the Catherine Ferguson Academy in Detroit, which is now closing, is just heartbreaking. Austerity in America. (ed note: This is more than sad. It is poke in the eye of those Americans who have made a mistake and are trying to get back on the right track.)
• The Washington Post fact-checker said President Obama exaggerated a bit in his recent remarks about the auto industry. Given the details, I’m glad the White House fact-checked the fact-checker.
• Figuring out how much college costs should be much easier.
• Andy Sabl has a smart post about why the right offers mixed messages on Europe: “It’s all about the secularism.”
• Yes, Lieberman can get even worse: “Sen. Joseph Lieberman (I-Conn.) plans to attend a Glenn Beck rally in Jerusalem.”
• On a related note, Glenn Beck plans to charge his minions $5 to $10 a month to watch his online network, which will be the exclusive home of his talk show. Prediction: this will end badly.
• And George W. Bush’s $2.5 trillion in tax cuts were launched exactly 10 years ago today. One of these days, they’re bound to deliver the rewards Republicans promised at the time, right?

Tags: Domestic Issues by ecthompson md
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More on clearing the air on the Great Depression.

From Calculated Risk:

Click on Image to Enlarge

Just for information purposes, the above graph is from Northern Trust.

What was the high of the unemployment rate in the Great Depression?

The civilian unemployment rate was around 25% during several months of 1932-1933

This graph shows the unemployment rate from 1929 through 1947.

The surge in unemployment in 1937 was related to an attempt to unwind the monetary and fiscal stimulus policies, with disastrous results for employment. Just something to remember when the Fed and Treasury start to unwind the current stimulus programs.

Several people have commented on 1937 lately …

Alan Blinder wrote in the New York Times in May:

From its bottom in 1933 to 1936, the G.D.P. climbed spectacularly (albeit from a very low base), averaging gains of almost 11 percent a year. But then, both the Fed and the administration of Franklin D. Roosevelt reversed course.

In the summer of 1936, the Fed looked at the large volume of excess reserves piled up in the banking system, concluded that this mountain of liquidity could be fodder for future inflation, and began to withdraw it. …

About the same time, President Roosevelt looked at what seemed to be enormous federal budget deficits, concluded that it was time to put the nation’s fiscal house in order and started raising taxes and reducing spending. …

Thus, both monetary and fiscal policies did an abrupt about-face in 1936 and 1937, and the consequences were as predictable as they were tragic. The United States economy, which had been rapidly climbing out of the cellar from 1933 to 1936, was kicked rudely down the stairs again …

And from Paul Krugman in the NY Times in June:

The first example of policy in a liquidity trap comes from the 1930s. The U.S. economy grew rapidly from 1933 to 1937, helped along by New Deal policies. America, however, remained well short of full employment.

Yet policy makers stopped worrying about depression and started worrying about inflation. The Federal Reserve tightened monetary policy, while F.D.R. tried to balance the federal budget. Sure enough, the economy slumped again, and full recovery had to wait for World War II.

Tags: Economy by ecthompson md
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Tags: Books, General by Neil Aquino
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From TP:

President Obama met with House Republicans today at the White House to discuss ways to move forward on negotiations regarding the nation’s debt ceiling and the budget. During the discussion, talk evidently turned to taxes, and when Obama noted that taxes today are lower than they were under President Reagan, the GOP, according to The Hill, “engaged in a lot of ‘eye-rolling’“:

Republicans attending a White House meeting on Wednesday didn’t take kindly to President Obama telling them tax rates were higher during the Reagan administration. GOP members engaged in a lot of “eye-rolling,” according to a member who was on hand to hear Obama, who invited House Republicans to the White House for discussions on the debt ceiling. [...]

“[The President] made a comment like the tax rate is the lightest, even more than (under former President) Reagan,” Rep. Lee Terry (R-Neb.) told The Hill following the meeting. House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) joked that during the meeting, “We learned we had the lowest tax rates in history … lower than Reagan!”

(The fact ) That House Republicans find this preposterous is symptomatic of the hold (that) Reagan mythology has over them. After all, for seven of Reagan’s eight years in office, the top tax rate was higher than the current 35 percent. In six of those years, it was 50 percent or more. And every year that Regan was in office, the bottom tax bracket was higher than the current ten percent.

For a family of four, the “average income tax rate under Reagan in 1983 was 11.06 percent. Under Clinton in 1992, it was 9.18 percent. And under Obama in 2010, it was 4.68 percent.” During Reagan’s time, income tax revenue ranged from 7.8 to 9.4 percent of GDP. Last year, it was 6.2 percent and is not projected to climb back to 9 percent until 2016. In fact, in 2009, Americans paid their lowest taxes in 60 years.

Republicans are very fond of saying that the U.S. has “a spending problem, not a revenue problem.” But the truth is that revenue has plunged due to the recession and to continued misguided tax cuts, and revenue needs to be raised to eventually bring the budget into balance. And Reagan knew that taxes were an important part of the budget equation. After all, he “raised taxes in seven of his eight years in office,” including four times in just two years.

Tags: Party Politics, Taxes by ecthompson md
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Conservatives have taken to saying that FDR’s New Deal didn’t work. Nothing can be further from the truth. It is a lie. It is the worst kind of lie, designed to hamper our recovery today. Conservatives love to say that government spending didn’t work in the 1930′s and it isn’t going to work today. Well, let’s look at the evidence.

Since some commentors thought my post was a little thin, the following is from an earlier post:

In my mind, we need to focus on one (the economy) and then the other (deficits).  We need to create jobs, high-quality jobs which will put money in the pockets of average Americans.  Once Americans began to feel that they have a steady income and that their jobs are safe, they will begin to spend money.  Currently, our economy suffers from too much supply and not enough demand.  Once Americans began to spend money that will help decrease supply and spur business to begin to increase production again.

Once the economy is fixed, we must then begin to figure out how to balance the budget and how to pay down our debt.  President Herbert Hoover, in the face of an economic crisis, decided to balance the budget and to decrease government spending.  We all know that did not work out so well for him (or for our grandparents).

Dean Baker from the Center for Economic Policy Research said it much better than I could –

The moral to this story is that the economy must take priority, not only because the state of the economy is what most directly determines people’s well-being, but also because the state of the economy will be the most important determinant of the deficit.

The experience of the 1990s provides an example of exactly this sort of story. In January of 1994 the Congressional Budget Office projected that the deficit in 1999 would be $204 billion or 2.4 percent of GDP. This projection incorporated the impact of President Clinton’s tax increase and spending cuts.

It turned out that there was a surplus of $125 billion in 1999, or 1.4 percent of GDP. This shift from deficit to surplus of 3.8 percentage points of GDP (equivalent to $540 billion in 2009) was not caused by further spending cuts or tax increases, it was caused by the strong economic growth of the period.

There is no guarantee that President Obama’s policies will be successful in restoring strong growth, but they are clearly a step in the right direction. If we have strong growth, then our deficits will be manageable. If the economy remains weak, the deficit will remain a serious burden no matter how much we raise taxes or cut spending.

Tags: Budget, Economy, Party Politics by ecthompson md
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The ridiculous partisan divide is killing this country. When I look at the job numbers for the month of May, I see the results of Dems fighting with Republicans. I see gridlock. We have been screaming for months that we need more jobs, yet Washington has been fixated on the debt ceiling and killing Medicare. There is nothing in the this country that should be more important than restoring the middle class. We do this by creating jobs. Jobs that can’t be shipped overseas. We need to fix our aging infrastructure – roads, bridges, schools. We need to give aid to the states so that they stop laying off teachers and other essential personnel. We need to stop business as usual.

We need to understand that the stimulus package that passed Congress and was signed by the president was too low. I know that $787 billion sounds like a ton of money. As a pile of cash in my back account, yes, it is a huge sum of moolah. On the other hand, it is a small drop in the bucket when we are talking about our $15 trillion economy. Krugman looks at the stimulus this way:

The starting point for this discussion is Okun’s Law, the relationship between changes in real GDP and changes in the unemployment rate. Estimates of the Okun’s Law coefficient range from 2 to 3. I’ll use 2, which is an optimistic estimate for current purposes: it says that you have to raise real GDP by 2 percent from what it would otherwise have been to reduce the unemployment rate 1 percentage point from what it would otherwise have been. Since GDP is roughly $15 trillion, this means that you have to raise GDP by $300 billion per year to reduce unemployment by 1 percentage point.

It doesn’t matter to me if it is the Republicans’ fault (most likely) or the Democrats’ fault or President Obama’s fault. I don’t care. I do care that millions of Americans need work and they want to work but there is nothing available. Unemployment for American men is 9.5%, for Latinos it is 12.9% and for Blacks it is 16.2%. This is NOT acceptable. Washington has to do more.

From EPI:

In May, the labor market added just 54,000 payroll jobs.  This jobs report—which would be weak in any economy—comes at a particularly devastating time, when the labor market remains 6.9 million payroll jobs below where it was at the official start of the recession three years and five months ago. Furthermore, this number hugely understates the size of the gap in the labor market by failing to take into account the fact that simply keeping up with the growth in the working-age population would have required the addition of 4.1 million jobs since the recession started in December 2007. This means the labor market is now 11.0 million jobs below the level needed to restore the prerecession unemployment rate (5.0% in December 2007, the official start of the recession).  The U.S. workforce needs the pace of job growth to accelerate dramatically in order to reestablish full employment within any reasonable timeframe, but instead, the recovery is on pause.  Without additional stimulus, the unemployment rate may rise further.

Tags: Economy by ecthompson md
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Job numbers are coming out today. I suspect that they will be a bummer.

From Robert Reich:

The Stalled Recovery

The U.S. economy was supposed to be in bloom by late spring but it’s hardly growing at all. Expectations for second quarter growth aren’t much better than the measly 1.8 percent annualized rate of the first quarter.

That’s not nearly fast enough to reduce our ferociously-high level of unemployment. The Labor Department will tell us Friday whether the jobs situation improved in May, but there’s been no sign of a surge in hiring. Nor in wages. Average hourly earnings of production and non-supervisory employees – who make up 80 percent of non-government workers – are lower than they were in the depths of the recession, adjusted for inflation.

Meanwhile, housing prices continue to fall. They’re now 33 percent below their 2006 peak. That’s a bigger drop than recorded in the Great Depression. Homes are the largest single asset of the American middle class, so as housing prices drop many Americans feel poorer. All of this is contributing to a general gloominess. Not surprisingly, consumer confidence is also down.

The recovery has stalled. It’s unlikely America will find itself back in recession but the possibility of a double dip can’t be dismissed.

The Problem of Demand

The problem isn’t on the supply side of the ledger. Corporate profits are still healthy. Big companies continue to sit on a cash hoard. Large and middle-sized companies can easily borrow more, at low rates.

The problem is on the demand side. American consumers, who constitute 70 percent of the total economy, can’t and won’t buy enough to get it moving. They justifiably worry they won’t be able to pay their bills or afford to send their children to college or to retire. Banks, with equal justification, are reluctant to lend to them. But as long as consumers hold back, companies remain reluctant to hire new workers or raise the wages of current ones, feeding the vicious cycle.

The timing is unfortunate. Foreign consumers won’t help much even if the dollar continues to slide. Europe’s debt crisis and embrace of austerity, Japan’s tragedy, and China’s fiscal tightening have reduced global demand. At the same time, the federal stimulus here has about run its course. The Federal Reserve is about to end its $600 billion of purchases of Treasury bills, designed to bring down long-term interest rates and make it easier for homeowners to refinance. Worse yet, state governments – starved for revenue and constitutionally barred from running deficits – continue to cut programs. Local governments are now in worse shape, laying off platoons of teachers and fire fighters. [Read more →]

Tags: Economy by ecthompson md
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• Tornadoes in Massachusetts leave four dead. I’m hopeful that state, local and federal officials can get the survivors the resources that they need.
• This is an interesting graphic on the anatomy of a tornado.

• Microsoft reveals Windows 8. I’ve just gotten used to Windows 7. Do you feel that Microsoft is running 12 months behind Apple and Google?
• Did China attack Google’s Gmail?
• Anthony Wiener seems to be the latest media darling to hit a huge speedbump. I’ve tried my best not to follow the story but it won’t die. Last night, the New York representative went on the Rachel Maddow Show and did little to clear the air. Over the last several days he’s made several nondenial denials. I would file this in the same envelope as stupid men doing stupid things. He needs to resign. Maybe he can join Eliot Spitzer and have his own TV show.
• Former Arkansas Governor Mike Huckabee is open to a vice presidential nod. This is good to know.
• Who does not pay federal income taxes? See graphic below.

• Negotiations on the debt ceiling continue to be deadlocked. Republicans are determined to destroy the social safety net.
• Two years ago when Republicans were arguing against the stimulus package and then trying to limit the amount of the stimulus package, economists were saying the stimulus was not large enough. Now, it appears that economists were right. Our economic recovery is starting to falter. I find it very disheartening that there’s all of this consternation over the debt ceiling, yet Republicans are not willing to do anything about creating more jobs. We need jobs!
• One of the worst movies in recent memory was a Samuel L Jackson movie called Snakes on a Plane. Well, it appears that Qantas has taken that movie to heart with a twist – Rats on the Plane. Coming to your local theater – Yuck!!!

Tags: Economy, Environment, Party Politics, Rachel Maddow Show by ecthompson md
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Although tornado alley is not specifically defined, I think of it as the area of northern Texas, Oklahoma, Kansas, southern Missouri, northern Louisiana and western Tennessee. Texas, Oklahoma and Kansas report the most tornadoes of any state in the union. Although tornadoes can form almost anywhere, is very unusual to see a tornado as far north as Massachusetts. Yesterday, four people died in a tornado outbreak in Massachusetts. I have no idea if they have tornado warning system like they do on the South.

From the Boston Globe:

Tornadoes tore through Western and Central Massachusetts yesterday, killing at least four people, injuring an untold number, and reducing schools, churches, and homes to splinters along its destructive path.

Governor Deval Patrick declared a state of emergency throughout Massachusetts and ordered up to 1,000 troops from the National Guard to help with rescue efforts. He said at least 19 communities had reported damage and he asked officials in those towns and cities to close schools and keep nonemergency personnel home today to allow work crews to clear streets.

“We are in an emergency situation,’’ said the governor in a news conference at the state’s emergency management headquarters in Framingham. He said there had been reports of looting in Springfield, and he described the damage from the storm as extensive.

“We are hoping and praying and working as hard as possible to keep the fatalities limited to those four’’ already confirmed, he said.

“We’re accustomed to seeing one to three tornado warnings or watches a year,’’ said Scott MacLeod, a spokesman for the state agency. “This is not a regular natural hazard we’re faced with in Massachusetts. This is absolutely very serious.’’ (more…)

Tags: Environment by ecthompson md
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