Election 2010: Teabaggin' the Ds & Rs

[Cletus Miller]

Originally Posted by Tyrone Slothrop

Move to California. You'll get screwed in the short run because you'll be subsidizing your neighbors who've been there a while, but you'll keep paying taxes on the purchase price of your house.

3% flat state income tax makes up for it, in large part.

[sebastian_dangerfield]

Originally Posted by Cletus Miller

Sure, but that's a corollary to Laffer, not Laffer's theory, which was based on rates.

Agreed. But it's so damned close I'd say it's better described as "subsumed within the theory" rather than at all divorced.

[Greedy,Greedy,Greedy]

Originally Posted by Tyrone Slothrop

In his first few months in office, President Obama proposed and passed one of the largest tax cuts in American history -- $282 billion over two years -- without Republican support. It's amazing how this fact just went down the memory hole.

We've been hanging around here this morning discovering new and interesting ways the latest tax bill results in some goodies for our clients and investors. There's more there than meets the eye. I like this bill.

[Cletus Miller]

Originally Posted by sebastian_dangerfield

Agreed. But it's so damned close I'd say it'e better described as "subsumed within the the theory" rather than at all divorced.

I think you need a meeting with Boehner and a cocktail napkin; then the Rs can start spouting about the Sebby Curve.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

Bridge. To. Nowhere. That's your stimulus. No transformative technology, no private sector picking-up of that "slack" on the other side. All you've done is buy a year of the status quo, for a trillion dollars. I agree with the stimulus because, well, none of us knew what was on the other side of that spending. It seemed a wise bet, and it was. Doing it again? Stupid beyond comprehension. Now it's Schumpeter's turn.

It is structural, and if you don't understand why, I'm not surprised the only point you can offer here time and time again is an uncreative borrowed argument about aggregate demand.

That was yesterday's argument, and though I remind you time and time again that, yes, the stimulus was a good idea then but that given what we have learned from it, another like it is not a wise idea now, you still repeat the same blunt talking point. Here's a tip: When arguing about a new stimulus, discuss the conditions now and how it will achieve long term results unlike the one we had before. Arguing points debated in 2008 is wasted breath. Either tell me what its a bridge to or concede its just purchasing the status quo for a period of time at risk of a monstrous collapse later. And if the best you can offer is, "It will buy us some time in which a new bubble can form," don't write back at all.

Aggregate demand is still down. Private demand hasn't picked up the slack. If you're fighting a big fire, you don't stop in the middle and say, "Well we tried putting water on it, but now we need to do something different -- let's use gasoline."

You say, "it's structural." What's structural? What's your solution? You don't have a bridge to anywhere. You're suggesting blowing up what we do have in the hopes that it will somehow incentivize people to build a new and better bridge.

We have lots of unemployed people. We don't have parts of the economy that can't find workers. If we had a structural problem, you would see slack demand in some parts of the economy, and insufficient supply elsewhere. But there's slack demand everywhere. Interest rates can't fall enough to get us back to full employment. That's a problem of aggregate demand, still.

And the federal increases in spending merely offset cuts at the state and local level. So we haven't actually tried stimulus.

[Hank Chinaski]

Originally Posted by Tyrone Slothrop

In his first few months in office, President Obama proposed and passed one of the largest tax cuts in American history -- $282 billion over two years -- without Republican support. It's amazing how this fact just went down the memory hole.

Smh

[Tyrone Slothrop]

Originally Posted by Hank Chinaski

Smh

Reality's a bitch, Hank.

[Tyrone Slothrop]

Taibbi on the Tea Partiers:

After nearly a year of talking with Tea Party members from Nevada to New Jersey, I can count on one hand the key elements I expect to hear in nearly every interview. One: Every single one of them was that exceptional Republican who did protest the spending in the Bush years, and not one of them is the hypocrite who only took to the streets when a black Democratic president launched an emergency stimulus program. ("Not me — I was protesting!" is a common exclamation.) Two: Each and every one of them is the only person in America who has ever read the Constitution or watched Schoolhouse Rock. (Here they have guidance from Armey, who explains that the problem with "people who do not cherish America the way we do" is that "they did not read the Federalist Papers.") Three: They are all furious at the implication that race is a factor in their political views — despite the fact that they blame the financial crisis on poor black homeowners, spend months on end engrossed by reports about how the New Black Panthers want to kill "cracker babies," support politicians who think the Civil Rights Act of 1964 was an overreach of government power, tried to enact South African-style immigration laws in Arizona and obsess over Charlie Rangel, ACORN and Barack Obama's birth certificate. Four: In fact, some of their best friends are black! (Reporters in Kentucky invented a game called "White Male Liberty Patriot Bingo," checking off a box every time a Tea Partier mentions a black friend.) And five: Everyone who disagrees with them is a radical leftist who hates America.

It would be inaccurate to say the Tea Partiers are racists. What they are, in truth, are narcissists. They're completely blind to how offensive the very nature of their rhetoric is to the rest of the country. I'm an ordinary middle-aged guy who pays taxes and lives in the suburbs with his wife and dog — and I'm a radical communist? I don't love my country? I'm a redcoat? Fuck you! These are the kinds of thoughts that go through your head as you listen to Tea Partiers expound at awesome length upon their cultural victimhood, surrounded as they are by America-haters like you and me or, in the case of foreign-born president Barack Obama, people who are literally not Americans in the way they are.

It's not like the Tea Partiers hate black people. It's just that they're shockingly willing to believe the appalling horseshit fantasy about how white people in the age of Obama are some kind of oppressed minority. That may not be racism, but it is incredibly, earth-shatteringly stupid.

Rolling Stone

[Hank Chinaski]

Originally Posted by Tyrone Slothrop

Reality's a bitch, Hank.

2. Although the life you've led u have no idea. Fwiw your congressional surrogates are about to learn.

[Cletus Miller]

Originally Posted by Tyrone Slothrop

Taibbi on the Tea Partiers:



Rolling Stone

Why do you hate America, Ty? Why, Ty, why?

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

Aggregate demand is still down. Private demand hasn't picked up the slack. If you're fighting a big fire, you don't stop in the middle and say, "Well we tried putting water on it, but now we need to do something different -- let's use gasoline."

You say, "it's structural." What's structural? What's your solution? You don't have a bridge to anywhere. You're suggesting blowing up what we do have in the hopes that it will somehow incentivize people to build a new and better bridge.

We have lots of unemployed people. We don't have parts of the economy that can't find workers. If we had a structural problem, you would see slack demand in some parts of the economy, and insufficient supply elsewhere. But there's slack demand everywhere. Interest rates can't fall enough to get us back to full employment. That's a problem of aggregate demand, still.

And the federal increases in spending merely offset cuts at the state and local level. So we haven't actually tried stimulus.

You really don't know anything beyond repeating this point, do you? How many times can I read this same non-response?

It's structural in that:

1. The cost of our labor is uncompetitive in a global marketplace;
2. Our workforce can't move due in large part to housing issues;
3. There is a mismatch in skills causing a substantial portion of the unemployment rate;
4. The previous demand was credit based, and that is now gone, removing the primary structural engine of our growth from 2000 through 2007; and
5. We've a service based economy that needs to reindustrialize to a degree, which is a huge undertaking.

I could go on about the effects of technology on our workforce, the long term dim outlook for housing, etc... But you get the point. It's not as simple as you suggest. The answer to every point made is not to repeat like a broken record, "We need the govt to step in and shore up demand!"

I don't have a bridge to anywhere; you're right. But what you're suggesting is pissing more money out the window to make the inevitable all the much worse when it comes. I get the "soft landing" argument. But when you blow a trillion to ensure a soft landing, I say that's enough. It isn't going to get much softer, and you're miles past the point where law of diminishing returns kicks in.

By the way, that they fucked up the first stimulus isn't an argument for a second. "Oh, we misallocated those trillion borrowed dollars. We need a another round." Madness.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

It's structural in that:

1. The cost of our labor is uncompetitive in a global marketplace;
2. Our workforce can't move due in large part to housing issues;
3. There is a mismatch in skills causing a substantial portion of the unemployment rate;
4. The previous demand was credit based, and that is now gone, removing the primary structural engine of our growth from 2000 through 2007; and
5. We've a service based economy that needs to reindustrialize to a degree, which is a huge undertaking.

1. This isn't the cause of the recession. We're talking about people who are unemployed now who weren't a few years ago.

2. It's a nice theory, but there's nowhere with pent-up demand they could move to. If the problem was that the economy blew in part of the country and was short workers in another part, and the housing mess was preventing people to move from one to the other, I would agree. But there isn't anywhere to move to right now.

3. Likewise, there's no part of the economy requiring lots of skills that are in absence. And don't start linking the Minnesota Fed guy to me, or I will get all over your ass with the many people who have responded to his nonsense. Oh, hell, you started it, so here's some Krugman:

Claims that there has been a huge jump in structural unemployment — that is, unemployment that can’t be cured by increasing aggregate demand — are playing a large role in the argument that we should basically do nothing in the face of a terrible economy. No need for the Fed to do more; no need for more fiscal stimulus — hey, it’s all about defective labor markets, and we should work on structural reform, one of these days. And don’t expect improvement for years to come. Structural unemployment is invoked by Fed presidents who want to raise rates, not cut them, by economists who want austerity now now now, and in general by almost everyone in the pain caucus.

The question is, why on earth would you believe that structural unemployment is our main problem right now?

Basic textbook macro tells you how to distinguish between slumps brought on by supply shocks and those brought on by demand shocks: look at inflation. If you have stagflation, rising unemployment combined with accelerating inflation, that’s the signature of a supply shock; if you have unemployment with disinflation, that’s the signature of a demand shock. And guess what we see?

Now, you might second-guess this basic observation if there were strong direct evidence of some kind of labor mismatch — layoffs in some industries combined with labor shortages in others; high unemployment for some types of labor combined with tight markets and soaring wages for others; high unemployment in some regions but exceptionally good hiring in others. But as EPI documents, none of these things are, in fact, visible.

Is it possible that there has been some rise in structural unemployment that’s swamped by a much larger rise in cyclical unemployment? Yes, conceivably. And let’s talk about that when unemployment gets below, say, 7 percent — which at current rates of progress will happen, well, never.

I really don’t think there’s any way to make sense of the fuss about structural unemployment unless you posit that a lot of influential people are looking for reasons not to act. Based on everything we know, this just shouldn’t be an issue. What the economy needs is more demand; provide that, and you’ll be amazed at how many willing, productive workers there are, currently sitting idle.

4. and 5. I don't think you can call credit a "structural engine" of our growth, and the idea that we need to re-industrialize seems provocatively cute, but both are grasping around the fundamental problem that we need to see more

I could go on about the effects of technology on our workforce, the long term dim outlook for housing, etc... But you get the point. It's not as simple as you suggest. The answer to every point made is not to repeat like a broken record, "We need the govt to step in and shore up demand!"

I don't have a bridge to anywhere; you're right. But what you're suggesting is pissing more money out the window to make the inevitable all the much worse when it comes. I get the "soft landing" argument. But when you blow a trillion to ensure a soft landing, I say that's enough. It isn't going to get much softer, and you're miles past the point where law of diminishing returns kicks in.

By the way, that they fucked up the first stimulus isn't an argument for a second. "Oh, we misallocated those trillion borrowed dollars. We need a another round." Madness.

Your ideological hostility to government spending is blinding you. We don't have to pay people to dig holes and fill them. We could fix roads and bridges, clean up highways and parks, hire back laid-off teachers, paint roofs white to save energy, build high-speed rail.

People who get paid to analyze such things by private business will tell you that the first stimulus worked. There is some irony in the fact that the private sector understands this, and that the people who are saying it failed are saying so for political reasons, and not because anyone would buy their analysis.

And I'm not arguing at this point about what the Senate or House is likely to do. The fact that they can't be trusted to get something like this done shows how broken they are, but that's another conversation.

[sgtclub]

Originally Posted by Tyrone Slothrop

For decades, the GOP has been about cutting taxes, mostly for the rich, and vague happy talk about spending cuts which never happen. They cannot and will not seriously cut spending, because they cannot and will not touch the military and Social Security. Their talk about fiscal discipline is completely opportunistic, a political tool to use to attack Democratic priorities. It's really very simple, and yet people keep falling for the act. Which is why they keep doing it.

While this is generally true, you quickly forget that Clinton did not balance the budget and run surpluses alone. He had a GOP congress that, at least in the first few years after 1994, was committed to the items in the Contract for America.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

1. This isn't the cause of the recession. We're talking about people who are unemployed now who weren't a few years ago.

2. It's a nice theory, but there's nowhere with pent-up demand they could move to. If the problem was that the economy blew in part of the country and was short workers in another part, and the housing mess was preventing people to move from one to the other, I would agree. But there isn't anywhere to move to right now.

3. Likewise, there's no part of the economy requiring lots of skills that are in absence. And don't start linking the Minnesota Fed guy to me, or I will get all over your ass with the many people who have responded to his nonsense. Oh, hell, you started it, so here's some Krugman:



4. and 5. I don't think you can call credit a "structural engine" of our growth, and the idea that we need to re-industrialize seems provocatively cute, but both are grasping around the fundamental problem that we need to see more



Your ideological hostility to government spending is blinding you. We don't have to pay people to dig holes and fill them. We could fix roads and bridges, clean up highways and parks, hire back laid-off teachers, paint roofs white to save energy, build high-speed rail.

People who get paid to analyze such things by private business will tell you that the first stimulus worked. There is some irony in the fact that the private sector understands this, and that the people who are saying it failed are saying so for political reasons, and not because anyone would buy their analysis.

And I'm not arguing at this point about what the Senate or House is likely to do. The fact that they can't be trusted to get something like this done shows how broken they are, but that's another conversation.

For the 2946493534723th time: The Stimulus did bridge us for a period of time. Now it is all but exhausted, and there is nothing on the other side. To go out and do it again would require borrowing we cannot afford, borrowing which would destabilize the country.

You say do it again. I say, show me where it takes us. You agree with me that there is no transformative technology or bubble on the other side. I say, well then you're just saying "Spend another trillion to buy a couple more years of stability. That's not worth it."

Your argument back? The same repetitive shit. "But we need aggregate demand!"

You have nothing. You're advocating a monstrous expenditure to float an unsustainable status quo for a short period of time.

Carve around what I'm saying all day long (which you will), the fact is, stimulus is a temporary fix. Yours and every other Keynesian's argument only makes sense when there's a pot of gold at the end of the rainbow. There isn't. There's nothing. There's a big fucking void, and everybody holding their breath because they all see the same absence of anything picking up the slack you describe.

I hate to mix metaphors, but if I told you to run the first leg of a relay race where there'd be nobody waiting to grab the baton, would you do it? No. You'd rationally assess that the effort expended was futile and choose not to run. What you're advocating now is exactly that: sending the economy on another relay race where the private sector will not be waiting to pick up the baton and take the next leg. "Did it once and nobody was there to run the second leg. Hmmm... Let's do it again!" It's the definition of insanity.

[Greedy,Greedy,Greedy]

Originally Posted by sgtclub

While this is generally true, you quickly forget that Clinton did not balance the budget and run surpluses alone. He had a GOP congress that, at least in the first few years after 1994, was committed to the items in the Contract for America.

There were two major legislative achievements that got us that balanced budget. The deficit reduction act of 1993 was the first, and the Rs opposed it - a total lock step vote against it by all Rs. Thanks for that!

The second was indeed bipartisan in a way of speaking, which was the federal government shutdown and the Republican'ts ultimate cave on a budget. I'm not sure how much credit to give them for whining like spoiled children but showing the sense to let the adult clean up afterwards, especially when he had to give them a good spanking first.

Yes, they get some credit for the tantrums, but I don't think Newt and the other brats were quite equal partners in that episode.

If you want to give credit to someone other than the Clinton Administration, the real second and equal partner was the US economy, and next in line for credit is the fed. Newt and the other children are somewhere further down on the list.