Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Month: October 2009 Page 2 of 3

Yes, Health “Reform” is a Clusterf*** and those pushing for it are being taken

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On October 20, 2009

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Digby gets it, noting that many middle class folks are going to be forced to spend 1/3 to a half of their disposable income to buy insurance.  This is something Dave Johnson and I have been screaming about for months.

I don’t care whether there’s a lousy, weak public option.  Even if there is (and even the House bill’s public option is weak, 12 million people will not provide sufficient market power to lower costs significantly) health care reform as currently suggested is profoundly stupid and venal.  It is a regressive tax on ordinary Americans which is funneled to private industry.  People are going to be forced to buy insurance they really cannot afford.

Digby is right to be worried about the backlash.  I wouldn’t want to have to defend this to someone whose discretionary income got slashed by a half or a third.  Who is worried about eating or paying tuition for their kids because they have so much less money. Or 20-somethings out of university, crushed by huge student loans, also being forced to buy insurance they can’t afford and realizing that means they’ll never, ever, be able to afford a house.

The people who are pushing a lousy public option as if it will fix the problems innate in an individual mandate system are welcome to take the “credit” for doing so.  Because this is insanity.  Absolute insanity.  And everyone pushing for it, whether they call themselves progressives or not, is aiding and abetting this insanity and will be bear responsibility for the backlash.

And there will be backlash.

Pakistan Army assault on Warziristan Taliban forces begins

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On October 17, 2009

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Apparently we’re looking at three columns of troops, about 30K in number, with air and artillery support against somewhere between 10 to 25K Taliban and allied groups.  The army has said that they figure everyone in the area is Taliban or supporters since everyone else should have left, but al-Jazeera is noting that the population is about 500K, and only 150K or so have left.

The obvious model for the Taliban to use is the Hezbollah model, so successful against the Israelis during the last Israeli attack on Lebanon.  However Pakistan forces are a lot more willing to take losses than Israelis, and I can’t imagine the Taliban have the discipline, iron-clad secrecy,  and technical chops of Hezbollah.  Let alone years to build up a bunker/comm/tunnel network.

That said, if I were the Taliban and I’d decided to fight, certainly I would be trying to copy Hezbollah.  Heavy heavy dig in, well camouflaged.  They have to blunt the enemy’s air power, channel them into killing fields, and make it into a morale battle (the one place where they had better have an advantage, if they hope to have a chance in hell of winning.)

The army stating they consider everyone remaining a Talib or a supporter means they don’t intend to let the Taliban go to ground in the population—they’ll kill civilians if necessary.

Isolate – concentrate – annihilate.  The anti-guerrilla playbook.

We’ll see if the Taliban is playing by that book.

My bet is on the army, at least for the duration of the operation (they’ll get cut up by pinprick attacks later).  But if they lose the operation outright, it will be fascinating.

Confusion over what government does

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On October 15, 2009

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So, what’s wrong with this thinking?  First, from the NYTimes:

The shrinking supply of these apartments, highlighted by researchers at New York University, illustrates not only the increasing strain that housing costs have had on this city of renters, but also the limits of the mayor’s success in providing the city’s poor with reasonable places to live. While the mayor’s plan has put thousands of low-income families in new or rehabilitated buildings and helped stabilize neighborhoods, it has been nearly drowned out by the twin waves of gentrification and rent deregulation.

Then, from FDL, in reference to the above:

Mayors like Bloomberg are trying to keep up, but this is clearly a bigger problem than classic development planning schemes can solve.

Deregulation is government policy.  Therefore one of the two main factors driving poor folks out of New York is fully something that could be reversed by government any time they want to.

People get awfully confused about what government does and doesn’t do, and there’s little that’s more classic development planning than rent control.  Rent control existed exactly to make sure that poorer people weren’t driven out of neighborhoods.  Removing it has had exactly the effect anyone should have expected.

The one post on Goldman Sachs you NEED to read

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On October 15, 2009

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Seriously, go read it. Numerian explains where Goldman Sachs’ profits come from.  Hint: it isn’t from investment banking or banking of any kind, and it isn’t from traditional trading either.

Numerian is the financial and econoblogger whom almost no one reads, whom everyone should read.  He gets almost everything right, long in advance, he understand the intricacies of financial markets extraordinarily well, and he’s good at explaining what he knows so ordinary people can understand it.

Read.

Perhaps record bonuses and no new lending is what Obama wanted

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On October 15, 2009

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Goldman Sachs is due to pay record bonuses, and the financial sector as a whole is likely to do the same.  Meanwhile, new mortgages and refinanced mortgages, as well as business lending is dead in the water.  If it isn’t government underwritten, or a credit card, forget it.

While I can’t say I predicted record bonuses this year, I and many others did predict that the bailouts wouldn’t get lending going again, because it was better for banks to keep the money on hand for buyouts and leveraged games, and many of them truly are massively impaired.

In other words, that the bailouts wouldn’t do what they were sold as doing—increase lending, was predicted.  Repeatedly.

Not much we can do when the people in charge don’t listen to those with track records, and deliberately hire those whose track records suck.

Well suck at helping ordinary people.  The people hired or retained by Obama  to run the US economy have amazing track records helping executives get paid obscenely, making sure large banks make fake profits and bailing out executives whose greed causes disasters.

Perhaps Obama hired for what he wanted, and his hires are executing policies that accomplish what Obama wants?

Take your pick.  Either Obama is an incompetent or his policies are accomplishing what he wants them to.

Central Banks put 63% of New Money into Euros and Yen

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On October 13, 2009

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Ouch:

Over the last three months, banks put 63 percent of their new cash into euros and yen — not the greenbacks — a nearly complete reversal of the dollar’s onetime dominance for reserves, according to Barclays Capital. The dollar’s share of new cash in the central banks was down to 37 percent — compared with two-thirds a decade ago.

Currently, dollars account for about 62 percent of the currency reserve at central banks — the lowest on record, said the International Monetary Fund.

Let me repeat.  Paulson/Geithner/Obama/Bernanke DID NOT fix the financial crisis, they just threw money at it without fixing the underlying problems. Patting themselves on the back for saving the US is entirely premature.

Yes Virginia, Americans are fat as a group

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On October 13, 2009

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Chicago Dyke has started a conversation about food and obesity in America which led to some amusing denial (though there are some legitimate methodological issues with how overweight is defined.)

But no foreigner who travels to the US has any doubt that Americans are, as a group, fat. I notice it the second I get on an airplane traveling to the US, and I notice it for the trip, and I really notice it when I get home and go on the subway, and the average person is so much thinner. It’s brutal.

Too much of the wrong type of food, not enough exercise. I first noticed it when I traveled to Boston in 05. I was on a corporate account and we ate out every night, and the plate sizes were huge. At first I choked it all down (raised in one of those “clean your plate” households) eventually I just stopped eating it all.

Less, better quality food is far healthier.  But less better quality food costs more and restaurants and supermarkets both charge more if you want to eat well.

The rise of suburbs and the car has also left much of the country walking unfriendly, and most Americans get essentially no exercise.

(International airlines put aside more weight for Americans than other nationalities, btw.)

I think a large reason Americans let themselves be abused by their elites is that they are fat and heavily medicated. The number of Americans on anti-depressants (a drug class which is more addictive than opiates, btw) is staggering. You’re drugged to the gills so that you will put up with the way you’re absued rather than taking to the streets.

Being unhappy when your life is shit is natural folks. Drugging yourself to make yourself tolerate is a palliative, not a cure.

And a lot of these drugs also lead to weight gain. Bonus.

Notice that your elites as a group (there are exceptions, like Summers) are not fat.  In fact, they are exercise fanatics who watch what they eat very carefully.  Between that and actually getting good health care, they live and work into their seventies.

But fat drugged unhealthy Americans are easier to control, so what they do for themselves, they sure as hell don’t do for you.

Summers breaks his arm patting himself on the back

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On October 13, 2009

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It seems that Summers is congratulating himself for having saved the world from the Great Depression:

The Obama administration has helped pull the U.S.  economy back from the “abyss” with aggressive efforts to spur growth and  stabilize financial markets, a top White House adviser said on Monday…

…”Thanks largely to the Recovery Act, alongside an aggressive financial stabilization plan and a program to keep responsible homeowners in their homes, we have walked a substantial distance back from the economic abyss and are on the path toward economic recovery,” Summers wrote to House Republican leader John Boehner.

All they did was throw cash at the problem, without dealing with the underlying issues, which is why they didn’t manage (as Jerome points out) to kickstart ANY net private spending.  They didn’t break up major banks.  They didn’t allow bankruptcy judges to rewrite mortgages.  Their mortgage program kept hardly anyone in the house.  And their money for financial firms did not increase lending by one cent.

So, as a Stirling Newberry likes to say “the economy breathes fine, as long as we don’t unplug the life support machines”.

That’s all they did – throw the economy on life support by hooking it up to a money spigot, then wander off and have a cup of coffee and tell each other how brilliant they were, not noticing that they hadn’t actually cured the patient.

This is going to be the wost “recovery” of your lifetime, unless you’re in the financial sector at a relatively high level.  Bank profits have recovered but ordinary people are not, in a generation, going to see a full recovery from this clusterfuck – employment will not recover to pre-recession levels before the next recession, and I don’t expect it to recover after that recession either.

At this point, in fact, I am expecting this to turn into a double dip recession—this “recovery” will not have any significant legs.

Anyone who believes Summer when he pats himself on his back should remember that Summers record of being wrong about everything of significance is awe inspiring in its completeness.  This is the man who helped create the necessary preconditions for the financial crisis through radical deregulation of financial markets, then didn’t see the crisis coming till it was already well underway.

Oh, and one reason any peaceniks reading this kiss any chance of the Afghan war ending is that Obama needs the war stimulus to keep the economy on life support and military Keynesianism is the type of stimulus Republicans and Blue Dogs won’t vote against.

Welcome to endless war, money for rich people, and trickle down for you.  The future looks an awful lot like the past, doesn’t it?

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