There is Another Way

Forty percent of domestic lending in Brazil is by three Federal government banks, including the Federal Government Savings Bank.  The Banco National de Desenvolvimento Economica loans for roads transport, and mining. Brazil has been growing rapidly.
The US should be building things like transnational high-speed trains and electric grids to put people to work, especially our youths.
Let's replace TINA with TIAW.

Cash for Clunkers

" Economist Alan Blinder helped popularize the idea of a scrappage program, and the moniker "cash for clunkers", with his July 2008 op-ed piece in the New York Times. Blinder argued that a cash-for-clunkers program would have a tripartite purpose of helping the environment, stimulating the economy, and reducing economic inequality." (From Wikipedia)

This was a good idea, but there was inadequate appropriation in 2009.  Put money into the economy by buying something that lots of people have.  Even better would be to buy labor from the unemployed to build infrastructure.  How about a high-speed rail line across the country? Instead now the FED buys bonds to help the banks, and the no-nothings want to reduce government spending in favor of austerity.
   

The End of Normal

James Galbraith in a lecture at Michigan State University this week argues that after the recent financial crisis, the economy cannot return to the old normal.  The economy will not recover on its own and public policies seem inadequate.  He calls the period 1940-70 a Golden Age.  The recovery lasted until another crisis in 1980 in Russia and Asia.  The rich gained at the expense of the poor.  A pseudo-golden age unfolded after 2001 until the disaster of 2007.
     What is different now that makes return to normal doubtful?  Changing geo-physics.  While fracking and natural gas offer some respite, energy costs are multiples higher than before.  Our military power seems unlikely to insure stability as witnessed by Iraq and Afghanistan. The picture is clouded by climate change and rising coastal flooding already in train. Technological change is making people redundant--we simply do not need as many.
      Much of our apparent growth was in the financial sector as almost everything of value over time was turned into an immediate source of great profits for traders and banks--accounts receivable was a historic transformation now dwarfed by life insurance premuims, mortgage payments, derivatives, etc.  Of course, the growth of the financial sector has led to grossly unequal wealth.
     Galbraith argues that a change in thinking and expectations is is order to avoid the violence exhibited by Greece as people protest austerity.  How will we learn to live with slow growth?
More in future posts. I would like to hear ideas from my readers.

Student Loans

The banking lobby obtained a provision of the law that makes repudiation of a student loan impossible no matter what.  The student may go blind and unable to work, but they still owe the bank.

What Hapened to Democracy

Obama's nominee for the Appeals Court blocked by Republican filibuster, the third in two weeks.  Why do we allow this anti-democratic rule by a long-winded minority?

A poll shows that a majority of Americans believe that global warming is  happening and that humans are the problem.  Will that prevent a minority of no-nothings represented by a majority of House members from blocking action?  NO.  Jerry-rigged House districts rule.

Minimum Wage again

The following from Robert Reich, with whom I agree completely"
"The President agrees that the minimum wage should be raised to $10.40 an hour but, unsurprisingly, Republicans oppose any increase. In this as in many other dimensions, the conservative mind is remarkably flexible. The minimum wage must not be increased, they say, lest employers lay off millions of low-wage workers. But record levels of CEO pay must not be tampered with because corporations need to attract top talent. The poor must have less if they are to be adequately motivated, but the rich must have more in order to ensure their maximum effort. Food stamps and unemployment insurance must be curtailed to prevent laziness among the needy, yet special tax loopholes that subsidize the wealthy (such as "carried interest" for private-equity and hedge-fund partners) must be retained. The 22 percent of American children now in poverty don't merit free school lunches or health care, but it is necessary and just that the richest 1 percent of children receive $10 million free of estate taxes."

The Nanny State?

The FDA is considering phasing out trans fats as already banned by New York City, Philadelphia, and the state of California.  Rush Limbaugh groused that bureaucrats shouldn't regulate what people eat because it's none of their business. The no-nothings are crying about the "nanny state" that takes away freedom.  Whenever I hear the word "freedom" I ask whose freedom are we talking about.  I know that freedom for the pike is often death for the minnow.  The nanny state argument claims that if people want to eat unhealthily, it only harms consumers of hydrogenated oils.  NOT TRUE.  If peoples' diets make them unhealthy it raises the health insurance rates for everyone.  Further, if the people are on Medicare, it raises taxes to support their care. 
     Finally, some people know their weaknesses and call on the state to help them out in moments of weakness.  If they doubt their own resolve, they may favor prohibiting some foods that promise to taste good, but are unhealthy.  Of course, their freedom to be free of temptation is at the expense of those with dietary fortitude.  Alas, not everyone can be free if interests conflict.

Global Warming

After reviewing the evidence, Paul Krugman despairs of meaningful policy--
"there's  a strong streak in modern American conservatism that rejects not just climate science, but the scientific method in general.  Polling suggests, for example, that a large majority of Republicans reject the theory of evolution.  For people with this mind-set, laying out the extent of scientific consensus on an issue isn't persuasive --if anything, it just gets their backs up, and feeds fantasies about vast egghead conspiricies." New York Review of Books, Nov. 17, 2013
     Is this the way our world ends?