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Tuesday, July 31, 2012

Romney May Not Have Paid Taxes For 10 Years

     Ok, we don't know that it's true. But we don't know that it isn't either. Harry Reid says he spoke to someone at Bain who says Romney in fact hasn't paid in 10 years. If true it would explain his historic reticence to release his tax returns as all other Presidential candidates do:

     "Senate Majority Leader Harry Reid used the T-shirt gun of unsubstantiated claims in an interview with The Huffington Post, saying a former Bain investor told him that Mitt Romney didn't pay taxes for 10 years, hence the lack of disclosure:
"His poor father must be so embarrassed about his son," Reid said, in reference to George Romney's standard-setting decision to turn over 12 years of tax returns when he ran for president in the late 1960s.

"Saying he had "no problem with somebody being really, really wealthy," Reid sat up in his chair a bit before stirring the pot further. A month or so ago, he said, a person who had invested with Bain Capital called his office."

"Harry, he didn't pay any taxes for 10 years," Reid recounted the person as saying.
"He didn't pay taxes for 10 years! Now, do I know that that's true? Well, I'm not certain," said Reid. "But obviously he can't release those tax returns. How would it look?
"You guys have said his wealth is $250 million," Reid went on. "Not a chance in the world. It's a lot more than that. I mean, you do pretty well if you don't pay taxes for 10 years when you're making millions and millions of dollars."

And from the campaign:
"Asked for a response to Reid's latest comments, Romney campaign adviser Kevin Madden said his candidate had "gone above and beyond the disclosure requirements by releasing two years of personal tax returns in addition to the hundreds of pages of personal financial disclosure documents he has provided to the FEC and made public."

"Madden added that it was "troubling and disappointing that Senator Reid would cite Governor Romney's father, George, as part of a personal attack against the governor. We have many substantive disagreements with the senator and his policies, but using insults about a father-son relationship is a step too far."
     "Reid did not identify his alleged source. And questions about Romney's taxes have remained. But this is a bit reminiscent of Billy Shaheen talking about Barack Obama and drugs back in January 2008 — it tosses an explosive topic into the conversation, even in unsubstantiated form. It's worth noting that Romney's camp recently told Alex that it's "not true" that the candidate ever had a year of paying zero taxes."

     http://www.politico.com/blogs/burns-haberman/2012/07/harry-reid-tosses-out-claim-that-romney-didnt-pay-130665.html?hp=l9

     You know what? I love it. Good for Harry Reid. I mean for once the Democrats are fighting and they're fighting someone other than themselves. Ok so Reid's claim is unsubstantiated. So is Romney's claim that it's not true. Still with nothing but hearsay, it's up to Romney to give us some answers. Only he can clear all this up.

     Romney is his own worst enemy. His unprecedented secretiveness and lack of accessibility to the press only make it worse. His press problem is also becoming a real problem as we already saw.

     http://diaryofarepublicanhater.blogspot.com/2012/07/rush-whines-media-is-harassing-romney.html
    

     

Rush Whines Media is Harassing Romney

      For Rush Limbaugh, Sean Hannity, et, al. to be claiming that someone else is harassing anyone is rich. After all haven't they been furiously printing up shirts that took the President's words out of context-'you didn't build that?'

    Yet listen to Rush wail:

    "“Now the reporters are harassing Romney,” Limbaugh said, referring to a Tuesday morning incident where a Romney press aide told journalists to “shove it.” “They’re trying to create gaffes. They’re working on behalf of Barack Obama. They are attempting to carry forth the meme that Romney’s foreign trip is a disaster, that it’s one gaffe after another. They’re trying to do this in the mainstream. And the fact of the matter is Romney is having a home run of a trip.”

Read more: http://www.politico.com/news/stories/0712/79210.html#ixzz22EmjRPdl

     Where to start? Rush claims that  journalists are trying to create gaffes? They sure don't have to try very hard with Mitt-born with a silver foot in my mouth-Romney. Romney's having a home run of a trip? He must have slept through London. Indeed, everywhere Mitt goes he loses friends. The rascally media hardly has a very hard time of somehow tricking him into making gaffes:

     "In one week abroad, Mitt Romney has managed to enrage both the Brits and the Palestinians. Now add to that roster his own press corps."

     "Over seven days in the UK, Israel and Poland, Romney held just one media availability for the U.S. traveling press — and even then, standing outside 10 Downing St. in London, he answered only three questions. While he gave a series of interviews to the major television networks, he granted no interviews to other U.S. outlets.

     "The snub has become the straw that broke the back of an already bitter press corps, long frustrated by limited access to the Republican candidate on the campaign trail. And those frustrations, which traveling reporters are voicing loud and clear online, are putting unprecedented pressure on the Romney campaign’s communications team."

Read more: http://www.politico.com/news/stories/0712/79200.html#ixzz22EthGuKp

      Isn't this actually all of a piece with the narrative on Romney? That he is incredibly secretive and not accessible? Remember when Stephanie Cutter accused Romney of running the most secretive campaign since Nixon? In reality I think he's worse than Nixon.

     Nixon was a secretive President-although remember the reason we even have the Nixon Tapes is because he got this weird idea in his head that he should tape all his conversations in the White House the better to protect himself.

     I don't think we've ever seen such a secretive candidate:

     "The tensions came to a head in Warsaw today when reporters, increasingly aware that there would be no end-of-tour press avail with the candidate, began shouting questions at Romney as he walked back to his vehicle from a wreath-laying at their Tomb of the Unknown Soldier."

      “Kiss my ass; this is a holy site for the Polish people,” shouted Rick Gorka, a traveling press aide who has tussled with reporters before. “Show some respect.”

      "Gorka then told a reporter to “shove it.” (He would subsequently apologize to some of the reporters, calling his outburst “inappropriate.”)"

      There you go: Kiss my ass. I think that's an apt message. Remember it's not just directed at a particular reporter. This is Romney's attitude to the American people. This is why he doesn't think they deserve to even see his tax returns as every other Presidential candidate since his father, George Romney has done, since the 1960s.

      This is why when people ask him what he will do he says they should elect him not and he'll tell them later.

       "Members of the traveling press corps now wonder why they went all the way to Jerusalem and Gdansk to watch the candidate tour the monuments and hold meetings behind closed doors."

       “So it’s official: Romney is leaving a 7-day foreign trip after answer only 3 Qs from the media,” Ashley Parker of the New York Times tweeted Tuesday morning.

       ”Romney trip by the numbers: Three foreign countries, and three questions from the traveling press,” Kasie Hunt of The Associated Press tweeted a few minutes later."

       “We didn’t need to come all the way over here to handle photo ops,” another member of the press corps told POLITICO. “There is a growing frustration among reporters, a growing sense that the campaign doesn’t get it — we don’t want to screw you, we just want to do our job.”

      “Here’s a guy making his audition on the world stage, his trip has been defined by gaffes, and he gives us five minutes and three questions in front of 10 Downing,” said another. “The appetite grows with each gaffe, and the campaign isn’t making it easier on themselves.”

       "High-profile media personalities have also complained. Last week, NBC News political director Chuck Todd and his co-authors at NBC’s First Read blog lamented Romney’s decision to ignore the U.S. press even as he took questions from members of the UK media."

        “[T]hose of us that have traveled overseas and been involved in these VERY limited press avails have rarely seen heads of democracies TOTALLY ignore their own press corps but answer ANOTHER press corps’ questions,” he wrote in NBC’s First Read newsletter (Todd confirmed to POLITICO that he was the author of this paragraph). “Sure, it would have looked REALLY bad had Romney ignored the U.K. questions. But is the campaign so intent on limiting media access that the candidate won’t call an audible when standing next to a leader from another country who DOES want to take questions?”

      “There has been no press access to Governor Romney since we landed in Poland,” Van Susteren wrote on her blog. “We (press) are in a holding pattern (I can’t help but feel a bit like the press is a modified petting zoo since we are trapped in a bus while Polish citizens take pictures of us).”

       "Van Susteren, who interviewed Romney for Fox News but observed the distance the candidate kept from reporters in the press pool, expanded on those comments Tuesday afternoon."

       “I think it would be smarter if they interacted with the press,” Van Susteren told POLITICO. “What struck me is that when the candidate got on board, he never waved to the reporters in the back of the plane. Lots of times candidates will come back and talk. I was struck that there was no off-the-record chatter, not even a wave.”

       Van Susteren is from Fox News of all places-though she is a real reporter. Romney is not someone who aspires to be the head of a democracy but rather an aspiring Duke or Noble. He thinks it's his turn. He has a right to it.

        "But those television interviews, with the likes of Matt Lauer and Wolf Blitzer, have hardly satisfied the expectations of the press corps, who now envy the access they had to candidates Barack Obama and John McCain in 2008. When then-Sen. Obama went overseas in 2008, he held four press conferences in as many countries and took at least 25 questions, according to the Obama campaign. McCain, meanwhile, was known to visit the back of his press bus frequently to talk with reporters."

       "The governor kept a very full and busy itinerary from the U.K. to Israel and on through to Poland,” Madden said. “The governor also made time for interviews that included every broadcast and cable news network, consisting of almost two hours of questions and answer time with those news organizations.”

     
“The people who are assigned to work with the press are generally less experienced, less familiar with policy or presentation,” one member of the press corps told POLITICO. “They have some really good people in Boston, but they need to put someone better in place — someone who is not going to scream, ‘kiss my ass.’”
But with 98 days until the election, some reporters said it might be too hard to repair relations. On occasion, Romney has been known to make the occasional trip to the back of the press plane, handing out chips or cookies to reporters. But reporters say such attempts at detente will be harder to make following his European tour.
“You can’t hand out cookies now when there are serious questions to ask, and there are very serious questions to ask that the campaign has refused to answer,” one reporter told POLITICO.
“I don’t think anyone wants cookies anymore,” said another. “This is the rough and tumble now. There are going to be tough questions — the American people want that, the campaign should know that, and they should know that it’s better for them if the answers come out now.”

     Thank you. That is a very important, vital point. These members of the press that a Rush Limbaugh loves to demonize have a very important, sacred job. It's to ask the questions we want answered. If Mitt Romney doesn't start answering them soon he won't have to worry about harassment much longer.

Strange Days With Major Freedom

     I admit it, best policy would argue to just ignore Major Freedom as most sane people would. However, sometimes I can't resist kicking the hornet's nest. Of course, once you've kicked it you're in for a Battle Royal because Major Freedom-or Major Unfreedom as I prefer to call him-has a neurotic need to always have the last word.

    In a way then, your choice is to either at some point drop it and let him have his precious last word and conclude that he won the exchange or keep arguing with him in perpetuity. Most people come to the conclusion that the first choice is better. I often practice that myself with Mr. Anal Retentitve. However, sometimes, what the hell. It's highly amusing and totally predictable.

    Major plays a pretty dishonest game. He makes claims and then pretends he never said it 3o seconds later. However, he flatters himself as some great Rothbardian superhero preaching against the evils of fiat money, and fractional reserve banking. Here is part of an interminable exchange between us yesterday-my fault. If I had just dropped it would have been over but I couldn't resist seeing how long I could get him going.

   He was accusing me over and over again that I said all wealth and success is based on luck, which is not true. I don't think it is though I think it's a factor. So I finally told him he should either provide quotes of me saying this or stop saying it.

   Naturally, he then accused me of making it up that he claimed I think all wealth is due to luck!

   "I never said you claimed success is solely a product of luck. You keep accusing me of saying that, when I never did. Stop lying."

   http://www.themoneyillusion.com/?p=11919

   Now this silly exchange had been going around and around. I think he figures that I wouldn't take the time to actually find all the quotes of him saying it. But hey, I'd wasted enough time on him so what the heck? I looked them up and gave him a sample:

   "Now, about all the times you claimed that I said success is all about luck:

  "The conjecture that wealthy people can only be wealthy because of luck, is false”

    "You say it’s nothing but luck, I disagree”

   “I am making a targeted argument with the goal of proving that wealth is not necessarily a product of luck.”
If I never said success is not only a product of luck why do you need to make any “targeted argument?”

   “luck isn’t the only thing, which is what you said,”

    Want another one? Ok you win:

    “The conjecture that wealthy people can only be wealthy because of luck, is false”

    “What I am saying is that wealth is not solely a function of luck, which is what you are fallaciously claiming is the case.”

    "There are plenty more cases. It’s like those Highlights magazines for kids: ‘what is wrong with this picture’ and the kid has to pick how many errors."

    "You can spend the whole day finding examples of Major Unfreedom claiming I said that it’s solely about luck. Now he admits I dind’t say that but that he never claimed that I did. His own words says otherwise."

     So does he admit that he's been caught out there? No, of course not, now he's got yet another revisal of his previous revisals:

     "I was directing those comments at those particular statements you made, where I deny that it is only luck. I wasn’t directing them at your understanding of wealthy people in general. That’s why I said

   “I am making a targeted argument with the goal of proving that wealth is not necessarily a product of luck.”

    You asked me:

    "If I never said success is not only a product of luck why do you need to make any “targeted argument?”

     "Do you honestly believe that I am justified in making a targeted argument only when prompted? I think it was important to say."

     "I do not hold that wealth is always a product of luck or even always in part a product of luck, because that would imply that even if nobody did anything with regard to investment, that wealth would arise spontaneously through luck."

     Sure, it was a targeted argument, unprompted by me saying that success was only about luck. That's why Unfreedom had said this:

    "“luck isn’t the only thing, which is what you said,”

     That doesn't sound like it was directed at me does it? So he's as usual trying to have his cake and eat it too. Does he even admit he was wrong in asking me to "stop lying" as I provided all those quotes of him indeed saying I say success is all luck? Of course not. This is Major Unfreedom logic for you-it's a different type up there on his strange planet.

      P.S. Part of why I call him Major Unfreedom is that he is a proper follower of Herman Hoppe who claims that democracy is "a God that failed" and that monarch was superior to democracy. I also call him that as he's an obnoxious bastard who thinks nothing of not giving other people unflattering nicknames.

     If you haven't encountered him on the blogosphere you've been lucky. His natural habitat at this point is hanging out at Sumner's The Money Illusion. The best strategy is probably to not engage. However, if you must invest in some Kryptonite first. The contamination threat is too high.

   

Man Bites Dog: Congress Agrees Not to Shut Down the Government

     News like this is almost surreal, as it's so rare. I think of people like Nick Rowe and his friends at Worth Canadian Initiative and news like this is probably business as usual in Canada where even their conservatives are a lot nicer than ours.

     Here in the U.S.A, we don't have moments like this very often: an actually functioning government. Who knew it could be done?

     "House and Senate leaders have reached a deal to keep federal agencies running into next year, sources say, a move that would avoid a partisan government shutdown fight before the November elections."

     "The agreement in principle by Senate Majority Leader Harry Reid (D-Nev.) and House Speaker John Boehner (R-Ohio) would keep agencies operating for six months once the fiscal year ends Sept. 30, sources say. Funding would be consistent with the $1.047 trillion level set forth in the 2011 Budget Control Act, above the $1.028 trillion called for by Rep. Paul Ryan’s (R-Wis.) budget proposal."

     "Final votes, sources say, are expected in September, but congressional leaders could announce a deal as soon as Tuesday."

Read more: http://www.politico.com/news/stories/0712/79197.html#ixzz22DrqV8Hf


     How many days like this do we get? Just how few is shwn by the fact that we really can count the instances on one hand. I mean since the GOP took over the House in 2010 the instances are that few.

    "While the funding levels could anger some tea party conservatives who have called for deeper cuts in federal spending, many Republicans are eager to head off a contentious budget fight on the eve of a presidential election and would rather punt the issue into next year, hoping Mitt Romney will be in the White House."

   "If Congress agrees to pass a continuing resolution, it would eliminate one looming issue in the pile of unfinished business in the “fiscal cliff” facing lawmakers, including whether to extend the Bush-era tax cuts for all income groups and whether to roll back $109 billion in domestic and defense spending cuts set to take place next year."

   So this would even check off something on the list of the "looming fiscal cliff" that we always hear so much about.

  Honestly I was never very worried about it. Today's move teaches us one thing more than anything.

  Any positive legislation that has come out of Washington in the last 80 years only happens with a strong Democratic position. Often we hear people like Chris Mathews bemoan the loss of a bygone more bipartisan ear where they parties worked together.

   He has in mind the Tip O'Neil House and the Ted Kennedy Senate where the Repugs were almost always in the minority. Since Clinton's victory in 1992, they have had a scorched earth position.

   This episode has a better outcome because the President rolled the GOP last Summer and got a much better deal than Firebag nation appreciated at the time. Then all you heard was that Obama was in bed with Pete Petterson and that it was inevitable that he would cut Medicare soon.

   In truth as shown in David Corn's "Showdown" Obama did play an excellent game of the very eleven dimensional chess they were so scornful of at places like Firedoglake.

  Because of the good hand he played, the Dems were in a much better position this time around. This deal was largely proposed by the GOP themselves, they didn't want yet another government shutdown scenario based on their recalcitrance. Playing hostage with the government budget had been the favored GOP sport since the 90s. This time they feared the shutdown more than the Dems did.

Market Betting On Romney Victory?

      With all the speculation on the latest moves in the market, a Morgan Stanley U.S. Equity Strategist believes that the three straight days of rallies in the stock market last week "can only mean one thing"-that the market is betting on a Romney victory:

      "That's the logical interpretation one can draw from a rally amid conditions that otherwise would demand a selloff, Morgan Stanley chief U.S. equity strategist Adam S. Parker said in an analysis that asserts there is no other reason now to like stocks than a Romney win."

     "The problem is that it's impossible to be bullish and right for the right reasons," Parker said in a note to clients in which he reiterated his 2012 price target for the Standard & Poor's 500 (^GSPC) at 1,214, which would mark a 12 percent drop from the current level."

     "Nearly every day someone expresses surprise that our base case is for the equity market to be down by 10-15 percent. Why is this so hard to believe? The market has had eight 10 percent down moves in the last 12 years," Parker said. "We think a better question is why more people don't forecast that the next 10-15 percent move is down than up?"

     "Parker cites weak earnings and the likelihood that central bankers won't be able to continue to save the day as bolstering the case against equities. The near-zero interest rate policies from the Federal Reserve and now the European Central Bank, in fact, are weakening the outlook for stock multiples, he said.


     "The conclusion Parker draws is that investors are betting that Romney will unseat President Obama and bring a more business-friendly environment to the White House."

     "At the end of the day, we are not really worried that Europe is going to be 'solved' or that its economy will strongly grow. We also don't think strong corporate profitability relative to expectations will save the day," he said.

     "To us, the biggest bull case for US equities is based on the huge cash balances and the potential belief that they will be more actively and productively deployed. The biggest possibility here would be Romney winning the presidential election."

      http://finance.yahoo.com/news/wall-street-already-betting-wins-191242763.html

      So the markets are betting on a Romney win? The trouble with this is that historical data doesn't confirm it at all.

     "Historically, moves higher in the market usually mean the incumbent president is likely to win, while sell-offs simply indicate the challenger is favored, according to research from S&P/Capital IQ."

    There probably are a lot of people like this MS analyst who think this. Yet reading them as market sentiment would be the error of fallacy of composition. The correlation between a rising stock market and an incumbency win is pretty strong.

    "Many investors I have spoken with believe that if the S&P 500 should rise between July 31 and Oct. 31, it would signal an impending Romney victory," said Sam Stovall, chief equity strategist at S&P."

    "The recovering market would be a sign that the perceived anti-Wall Street policies of the current administration will soon come to an end, as the incumbent would be replaced and that a plurality on the Potomac might even return as a result of the early November outcome," he added. "Unfortunately for these presumptive prognosticators, history indicates, but does not guarantee, that the opposite has usually been true."

    "The trend, Stovall said, has been accurate 82 percent of the time over the past century."

    I also can't help but think of the analysis of Jared Bernstein that showed that Wall Street actually does better during Democratic Administrations.

    Anyway all this sounds like good news to me as a partisan Obama Democrat. It is interesting though. Two things are:

    1. Why do markets do better under Democratic Administrations?

    2. Why does Wall Street always believe the opposite?

    By a different indicator, Wall Street is betting on an Obama victory:

    "At the same time, Intrade, the online forum that allows investors to bet on outcomes of various events, has Obama with a firm 57 percent likelihood of re-election."
 

Consumer Confidence Jumps, Stocks Weak

     This is an early headline at cnbc.com today and it says it all. After all, as the jump in consumer confidence was totally unexpected why should stocks be weak?

     Well, actually, after the good news. stocks started to mitigate their losses:

     "Stocks pared losses this morning following a surprisingly strong increase in consumer confidence in July. Other economic data, including the Chicago Purchasing Managers Index, was also more encouraging."

      http://www.cnbc.com/id/48415895

      "Yesterday, markets ended down slightly, as investors were unwilling to make any big moves ahead of the central bank meetings this week."

      "Market participants will look for hints of further stimulus measures to spur growth and are hoping the ECB will start buying Italian and Spanish bonds to keep yields down. The ECB's policy decision is due on Thursday, while the Federal Reserve's policy decision is out on Wednesday afternoon. Investors will be looking for hints that the Fed will undertake additional steps to stimulate economic growth. (Read More: Wall Street Now Almost Certain Fed and ECB Will Act)."

     See, what I can't help but wonder about here is market logic. Does the market see this as good news as what they have been waiting for the last few days is to see if the Fed-and the ECB-will act? And isn't it plausible that the better than expected numbers will make the Fed less rather than more likely to act?

     "On the economic front, June personal income rose 0.5 percent after a 0.3 percent increase in May and consumer spending was unchanged after being down 0.1 percent the month before. The Street was expecting personal income to rise 0.2 percent and spending to rise 0.1 percent."

    "Also, the second-quarter employment cost index increased 0.5 percent after a 0.4 percent rise in the first quarter."

    "The S&P/Case-Shiller 20-city home price index rose 0.9 percent on a seasonally adjusted basis, topping expectations for a 0.5 percent increase. In a non-seasonally adjusted basis, prices jumped 2.2 percent."

    "The July Chicago PMI rose to 53.7 from 52.9 in June. Economists were looking for a reading of 52.5. A reading above 50 indicates expansion in the regional economy."

     "Also, July consumer confidence jumped to 65.9 after a reading 62.7 in June. Economists were expecting a reading of 61.5. "

     In another snippet of news unlikely to raise market confidence, the German Bundebank is not happy with Drahii's Chuck Norris act last week:

     "In a statement that appears aimed at dampening market expectations for actions from the European Central Bank, a Bundesbank source tells CNBC that “monetary policy should strictly focus on its primary mandate to preserve price stability.”


     "Draghi had been scheduled to meet with Bundesbank president Jans Weidmann ahead of Thursday’s meeting of the ECB’s Governing Council."

      However, it's important to realize that Germany has no extra clout at the ECB just because it's the largest economy, and the ECB has voted over it's ojections before:
    
      "Although it represents the largest economy in the euro zone, the Bundesbank does not hold any additional voting power on the council."

     "In the past, the ECB has acted over German objections. In fact, two German ECB members have resigned in the wake of ECB actions to address the financial crisis."

Again: Has Scott Sumner Jumped the Shark?

      It has seemed to me at times recently that Sumner is beginning to lose it-he seems more and more hypersensitive to any criticism and more and more makes no attempt to even try to answer questions he doesn't like in any way other than snark.

      While it's tough to argue with him in not answering Major Freedom, it seems that he is more and more unwilling to answer any questions that are in any way critical and no more than cheerleading from the Market Monetarist Choir.

      This comment by Ron T. seriously riled Sumner yesterday:

       "Neither you nor Krugman know how can we get the demand-side inflation without the demand coming first. It is like saying “if we had ham we could have ham and eggs. If we had eggs”. Typical for economists: assume we have a can opener. How to close an output gap? I have an idea! Let’s start with closing the output gap! Brilliant."

      "Before you deal with the private debt overhang the demand is not coming. And neither is inflation."

       http://www.themoneyillusion.com/?p=15602&cpage=2#comment-173625

       Whoa! Sumner all but blew a gasket in the face of this comment:

       "The biggest output gap in history was 1933, and the devaluation got high inflation right away. Go study that event and come back here when you grow up and are no longer a sarcastic jerk."

       Sumner made more allusions to this to loyal choir member dwb-who I do like. He's a choir member but still a very nice guy:

       "dwb, Those people really are morons. They don’t even know the Great Inflation happened all over the world. They know nothing about hyperinflation in Latin America, or superneutrality of money, or any of the basics of monetary economics. They latch on to a few anecdotes and think they have a general theory. Pathetic."

      Well no. It's not true that "they" don't know the Great Inflation happened though it is true that they may question Sumner's conventional narrative. As to the superneutrality of money, there are many who question this theory, including, interestingly enough, Sumner's friend and fellow MMer, David Glasner. Glasner goes as far as suggest that money might have long term effects.

     Sumner still wasn't done:

     "You get MMTers coming over here claiming textbooks assume the money multiplier is constant, which just means they’ve never read a textbook. And a commenter above says he was taught the SRAS curve was flat."

       What MMTers actually do is deny the money multiplier altogether as they demand that banks lend deposits. The whole notion of the money multiplier hinges on the idea that banks do lend reserves. If this isn't true the money multiplier is more than simply not 100% constant-it's a chimera.

       As to Sumner's often repeated claim that the U.S. devaluation in 1933 led to immediate high inflation, this is not true. Here I will quote my own comment I just left at Sumner. We'll see if he goes off half cocked with me as well-wouldn't be surprising if he does. You will see though that unlike Ron T. I didn't give him any room-to justly-claim I was being a jerk:

       "However, isn’t it a fact that inflation can only come after all the slack is out of the economy?

        As for this comment:

        “The biggest output gap in history was 1933, and the devaluation got high inflation right away.”
Inlfation didn’t get high, though deflation did come to an end.
\
         "According to Inflationdata.com, in 1933 we had delfation-a negative inlfaton rate of 5.09%-in 1934 it came back to 3.51% in 1935 it was 2.56%. The 1934 rate of 3.51% was the highest it got during any year in the 1930s."

        http://inflationdata.com/Inflation/Inflation_Rate/HistoricalInflation.aspx

        "So we ended deflation but never got high inflation. It would seem to me that this is not unexpected as high inflation only comes when we don’t have slack in the economy."

        In another comment Sumner declared that he doesn't have time to debate those blankety blank Post Keynesians anymore.

        Again, I ask this sincerely-with no unpleasant intent-is Sumner becoming burnt out? Nick Rowe, if you're out there maybe you can shed some light as I know you're a close friend of his. I really am curious. He used to be willing to at least debate other ideas-even the MMTers-in a fact based way, rather than just calllign out insults.

Monday, July 30, 2012

Dr. Doom Roubini on the Future For the U.S. Economy

      Nouriel Roubini-aka Dr. Doom-earns his keep again. No one can accuse him of lack of truth in advertising based on his latest prognostications.

     However, Jonathon Portes doesn't get Dr. Doom. First Portes explains who we-layman, commentators, policymakers-should listen to for maroeconomic analysis.

     "This question was prompted by a recent exchange I had with Ed Vaizey and Simon Hughes on the BBC's Daily Politics: I pointed out that not only was the government's decision in 2010 to cut the deficit too quickly doing considerable economic damage, but that this was both predictable and predicted by economists such as Paul Krugman and Martin Wolf. Their response was essentially "how were we to know which economists to listen to? Others were saying the opposite".

     "This is a fair question. My answer to it is that policymakers and the public should listen to economists who fulfill two critera: first, they have made empirically testable predictions (conditional or unconditional - see Krugman here) that have proved, by and large, to be broadly consistent with the data; and second, they base those predictions on an analytic framework (not necessarily a formal model) that is persuasive. In other words, getting it right alone is not enough; it should be possible to show your workings - to explain why you got it right. Otherwise, your predictions may be interesting, but they tell you little about how to formulate policy."

     http://notthetreasuryview.blogspot.co.uk/2012/07/which-macro-economists-are-worth.html

     Evidently, Portes places Roubini in this category of  'interesting but with little clue of how to formulate policy.' It has been questioned how much predictive success is worth in Macro analysis. Of course, those who believe in efficient markets completely dismiss accurate predictions as little more than luck or a fluke. They presume that no one can beat the market in the long run.

     "It is worth mentioning two economists who I respect, admire and find interesting but do not in my view qualify for inclusion on my shortlist. They are Nouriel Roubini and Ken Rogoff. In both cases, I - and maybe this is partly my fault - don't understand what, if any, analytic framework they are using, so I find it difficult to impossible to evaluate their advice. Nouriel's predictions, while often accurate, seem to be based largely on instinct and a sense of which data matters and which doesn't. That's fine - and having an instinct for the data is invaluable - but I just don't know how to evaluate the plausibility of articles like this."

    Well let's take a look at "this." Here's Roubini's analysis for the U.S. economy:

     "Even this year, the consensus got it wrong, expecting a recovery to above-trend annual GDP growth – faster than 3%. But the first-half growth rate looks set to come in closer to 1.5% at best, even below 2011’s dismal 1.7%. And now, after getting the first half of 2012 wrong, many are repeating the fairy tale that a combination of lower oil prices, rising auto sales, recovering house prices, and a resurgence of US manufacturing will boost growth in the second half of the year and fuel above-potential growth by 2013."

      http://www.economonitor.com/nouriel/2012/07/20/american-pie-in-the-sky/

      Again, we can debate the importance, or lack thereof, of predictive success. However, it is impressive how on target Roubini so often is.

      "Even this year, the consensus got it wrong, expecting a recovery to above-trend annual GDP growth – faster than 3%. But the first-half growth rate looks set to come in closer to 1.5% at best, even below 2011’s dismal 1.7%. And now, after getting the first half of 2012 wrong, many are repeating the fairy tale that a combination of lower oil prices, rising auto sales, recovering house prices, and a resurgence of US manufacturing will boost growth in the second half of the year and fuel above-potential growth by 2013."

      "The reality is the opposite: for several reasons, growth will slow further in the second half of 2012 and be even lower in 2013 – close to stall speed. First, growth in the second quarter has decelerated from a mediocre 1.8% in January-March, as job creation – averaging 70,000 a month – fell sharply."

       He also thinks we will lose something from the "fiscal cliff" though not the full 4.5% of GDP we supposedly will if none of the tax cuts are extended and all the spending cuts go into effect.

       "Third, the fiscal cliff would amount to a 4.5%-of-GDP drag on growth in 2013 if all tax cuts and transfer payments were allowed to expire and draconian spending cuts were triggered. Of course, the drag will be much smaller, as tax increases and spending cuts will be much milder. But, even if the fiscal cliff turns out to be a mild growth bump – a mere 0.5% of GDP – and annual growth at the end of the year is just 1.5%, as seems likely, the fiscal drag will suffice to slow the economy to stall speed: a growth rate of barely 1%."

       He also points out the drop in consumption patterns:

       "Fourth, private consumption growth in the last few quarters does not reflect growth in real wages (which are actually falling). Rather, growth in disposable income (and thus in consumption) has been sustained since last year by another $1.4 trillion in tax cuts and extended transfer payments, implying another $1.4 trillion of public debt. Unlike the eurozone and the United Kingdom, where a double-dip recession is already under way, owing to front-loaded fiscal austerity, the US has prevented some household deleveraging through even more public-sector releveraging – that is, by stealing some growth from the future."

       "Fifth, four external forces will further impede US growth: a worsening eurozone crisis; an increasingly hard landing for China; a generalized slowdown of emerging-market economies, owing to cyclical factors (weak advanced-country growth) and structural causes (a state-capitalist model that reduces potential growth); and the risk of higher oil prices in 2013 as negotiations and sanctions fail to convince Iran to abandon its nuclear program."

       I'm never sure about the whole fiscal cliff thing, if this hasn't been overdone. He seems to think that while the full cliff fall won't happen that it will be enough to shave off some. He's certainly right about the external forces being a threat. The big worry is that Europe takes us with them:

       "Similarly, the gravity of weaker growth will most likely overcome the levitational effect on equity prices from more quantitative easing, particularly given that equity valuations today are not as depressed as they were in 2009 or 2010. Indeed, growth in earnings and profits is now running out of steam, as the effect of weak demand on top-line revenues takes a toll on bottom-line margins and profitability."


       "A significant equity-price correction could, in fact, be the force that in 2013 tips the US economy into outright contraction. And if the US (still the world’s largest economy) starts to sneeze again, the rest of the world – its immunity already weakened by Europe’s malaise and emerging countries’ slowdown – will catch pneumonia."

       Much as I want to believe the "fariy tale" it's hard to argue with his record.

James Holmes to Be Formally Charged

     It seems that the specifics of this case aren't going to be much in disagreement. There is little question of "whodunit?"

     "Launching a case that legal analysts expect to be dominated by arguments over the defendant's sanity, Colorado prosecutors plan to file formal charges Monday against James Eagan Holmes, the former neuroscience student accused of killing 12 people and wounding 58 others at an Aurora movie theater."

      "Attorneys will also argue over a defense motion to find out who leaked information to the news media about a package the 24-year-old former neuroscience graduate student allegedly sent to his psychiatrist at the University of Colorado Denver."

     "Authorities seized the package July 23, three days after the shooting, after finding it in the mailroom of the medical campus where Holmes studied. Several media outlets reported that it contained a notebook with descriptions of an attack, but Arapahoe County District Attorney Carol Chambers said in court papers that the parcel hadn't been opened by the time the "inaccurate" news reports appeared."

     "Investigators said Holmes began stockpiling gear for his assault four months ago and bought his weapons in May and June, well before the shooting spree just after midnight during a showing of the Batman film "The Dark Knight Rises." He was arrested by police outside the theater."

     "Analysts said that means it's likely there's only one main point of legal dispute between prosecutors and the defense."

    http://www.google.com/hostednews/ap/article/ALeqM5gDOM_xbLFLTSpMN32eRd05akgCKg?docId=92164ae36e2941669301f9e4629be671

    The defense is unlikely to seriously argue that Holmes is the one who unleashed those deadly attacks at the Colorado theater which killed 12 and injured 58. We should add to the casualties, the miscarriage suffered by the woman in the hospital whose six year old daughter was the youngest death:

   "One development over the weekend brought more grief. A woman who was critically wounded and whose 6-year-old daughter was killed suffered a miscarriage because of the trauma, her family said Saturday. Ashley Moser's daughter, Veronica Moser-Sullivan, was the youngest person killed in the attack."

   A major question will be whether or not Holmes is competent to stand trial. James Loughner, the gunman who shot Congresswoman Gabrielle Giffords and killed many, is still in a mental facility where they are trying to prepare him to stand trial:

   "Holmes' public defenders could argue he is not mentally competent to stand trial, which is the argument by lawyers for Jared Loughner, who is accused of killing six people in 2011 in Tucson, Ariz., including Rep. Gabrielle Giffords. Loughner, who has pleaded not guilty to 49 charges, has been diagnosed with schizophrenia and is undergoing treatment at a Missouri prison facility in a bid to make him mentally fit to stand trial."

    "If Holmes' attorneys cannot convince the court that he is mentally incompetent, and he is convicted, they can try to stave off a possible death penalty by arguing he is mentally ill. Prosecutors will decide whether to seek the death penalty in the coming weeks."

    Colorado's laws don't make it easy for someone to simply get away by citing insanity:

    "Under Colorado law, defendants are not legally liable for their acts if their minds are so "diseased" that they cannot distinguish between right and wrong. However, the law warns that "care should be taken not to confuse such mental disease or defect with moral obliquity, mental depravity, or passion growing out of anger, revenge, hatred, or other motives, and kindred evil conditions."

      All the evidence that indicates that this was very premeditated with him planning it as much as 4 months in advance will make it tough.

      "He ultimately could verbally enter a plea to the anticipated dozen first-degree murder charges, or his attorneys could enter it for him. Prosecutors may file multiple counts of attempted first-degree murder and other charges against Holmes, who booby trapped his apartment with the intent to kill any officers responding there the night of the theater attack, Aurora police said."

      As to gun control it's again simply amazing how easy it for Holmes to obtain weapons:

      "Authorities said Holmes legally purchased four guns before the attack at Denver-area sporting goods stores — a semiautomatic rifle, a shotgun and two pistols. To buy the guns, Holmes had to pass background checks that can take as little as 20 minutes in Colorado."

GOP Gives Up Fight Against Obamacare's Birth Control Requirement

       You wonder what's going on here. Clearly they've decided it's not worth the fight. Is it that the law has become more popular- since the Scotus ruling. among other things?

      "Speaker John Boehner (R-OH) hinted that Republicans in the House would not introduce legislation thwarting a new rule requiring employers and insurers to offer contraception and other preventive services as part of their health insurance coverage, signaling a softer tone on the issue."

      "Throughout the month of February, the GOP charged that the requirement, part of the Affordable Care Act, is an attack on religious liberties. Boehner himself insisted that the “the federal government is violating a First Amendment right that has stood for more than two centuries.” “If the president does not reverse the [Health and Human Services] Department’s attack on religious freedom, then the Congress, acting on behalf of the American people and the Constitution we are sworn to uphold and defend, must,” he added, and explained that a bill would be moving through “appropriate legislative channels.”
But with the new rule scheduled to go into effect on August 1, the Speaker signaled an unwillingness on Thursday to take-up the fight:
REPORTER: Next week, the plan to require health care plans to include contraception, sterilization will go into effect. You said last year that you guys were going to introduce legislation to address that, it never came up. What are you guys planning on doing?
BOEHNER: We’re continuing to work with those groups around the country who believe that their religious liberties are being infringed to try to come to a resolution of this issue. Sometimes resolving this issue can be done other than legislative avenues. So we’re continuing to work with them on the best way forward.

         http://thinkprogress.org/health/2012/07/26/591041/republicans-give-up-effort-to-block-obamacares-birth-control-requirement/

         ACA has become more popular since the ruling. I wonder if this change is partly due to this. No doubt a large part of it is that the GOP thought they could paint Obama as against Catholics but what it really did was paint them as against women.

        Still I wonder if the bill's increasing popularity or at least this part of it. Here's another story that seems to suggest this to me:

        "Rep. Larry Kissell (D-NC) voted against the Affordable Care Act in 2010 and was one of five Democrats to support repeal of the law earlier this year. But opposition to health care reform hasn’t stopped this two-term Congressman from taking credit for it."

         "In June, Kissel bragged about helping secure $379,167 in federal money provided by the Act “for a new health care clinic near China Grove in Rowan County.” “I’m glad to have worked to help secure this funding and will continue to make sure that our tax dollars are being spent here at home to put people to work and take care of our citizens,” Kissell said in a release and then dodged reporters who pressed him on the hypocrisy:
Asked about the source of the funding, Kissell’s office issued a statement.
“We leave no stone unturned in helping our local communities bring resources home, and are unapologetic about anything we can do to bring our tax dollars home and have them working for us here in North Carolina.”
Christopher Schuler, the Biscoe Democrat’s spokesman, said Kissell was too busy Wednesday and Thursday with House votes and meetings to take questions about the funding.
     "Kissel voted against the GOP’s first effort to fully repeal reform in January of 2011, noting that “It is quite clear that the Senate will not act on any repeal measure, nor will the President sign such a bill” and promising to fix the law. “We have a choice: we can look backward and have the same fight all over again, or we can move forward determined to make things better and focus on our economy,” he said in a press release explaining his vote."

     "Kissel has also “refused to endorse Obama’s re-election bid” and joined Republicans in voting to hold U.S. Attorney General Eric Holder in contempt of Congress."

      http://thinkprogress.org/health/2012/07/28/601501/democrat-who-opposed-health-reform-is-now-taking-credit-for-it/

      Seems to me time is on the side of Obamacare.

Romney Praises Israel's Universal Health Care System

      Romney's such a champion all star of flip flopping that the whiplash is so bad in listening to him it might just snap your head off.

     Here he goes again, flipping on health care. First he passed Obamacare in Massachusetts. Then he promises to repeal it if elected President-without giving us any thing to replace it with, thereby showing his preference for the status quo.

    Now in Israel, he praises Israel's universal health care system. No doubt this is just pandering. After his snarky remarks in Britain cost him he figures the best policy for the rest of the trip is just to lavish praise on everything the natives do.

   "Throughout his presidential campaign, Mitt Romney has been running away from the individual insurance mandate in the Affordable Care Act — even though a mandate is a cornerstone of the former Massachusetts governor’s health care reform law. “If I’m President of the United States, we’re gonna get rid of Obamacare and return, under our constitution, the 10th Amendment, the responsibility and care of health care to the people in the states,” Romney said during a GOP presidential debate."

    "But during his trip to Israel, Romney inadvertently praised the individual requirement and universal health care. “[F]or an American abroad, you can’t get much closer to the ideals and convictions of my own country than you do in Israel,” he said. And according to The New York Times, Romney spoke favorably about the fact that health care makes up a much smaller amount of Israel’s gross domestic product compared to the United States:
“Do you realize what health care spending is as a percentage of the G.D.P. in Israel? Eight percent,” he said. “You spend eight percent of G.D.P. on health care. You’re a pretty healthy nation. We spend 18 percent of our G.D.P. on health care, 10 percentage points more. That gap, that 10 percent cost, compare that with the size of our military — our military which is 4 percent, 4 percent. Our gap with Israel is 10 points of G.D.P. We have to find ways — not just to provide health care to more people, but to find ways to fund and manage our health care costs.”
      "Israel spends less on health care because of a universal health system that requires everyone to have insurance. Every Israeli citizen has the obligation to purchase health care services through one of the country’s four HMOs since government officials approved the National Health Insurance Law in 1995. People pay for 40 percent of their HMO’s costs through income-related contributions collected through the tax system, and the state pays the remaining 60 percent. And by many standards, Israelis are getting better health care than U.S. citizens. The infant mortality rate is much lower, and its mortality rate due to heart disease is half the U.S. rate.

     "Orly Manor, dean of the H"adassah-Hebrew University Braun School of Public Health, said U.S. officials could “learn a lot from the Israeli system. The quality is high, and the outcomes are good.” And it seems that, following his trip to Jerusalem, Romney would agree."

     http://thinkprogress.org/health/2012/07/30/604111/romney-individual-mandate-israel/
     So Israel is not unlike Obamacare-and Romneycare. Romney would seem to agree based on Mass, but now claims to disagree in the Presidential election. So let's see if we can keep up with Romney's flip flops. On the state level he thinks it's fine. At the U.S. Federal level he doesn't although he wrote an article in 2009 urging the President to adopt the mandate which he ultimately did do.

     However, it's ok in the state of Israel. Yet he also suggested that it's a model for us because of it's lower costs. Be careful of your head.

Romney's Comments to Donors In Israel Outrages Palestinians

      Yeah, that's all we need, having Palestinians hate us because they think we're against them. No doubt our close relationship with Israel has always led to this problem but it got much worse under Bush. Here Romney is, again channeling George W. Bush:

      "Mitt Romney told Jewish donors in Jerusalem on Monday that their culture is part of what has allowed Israel to be more economically successful than the Palestinians, outraging Palestinian leaders who called his comments racist and out of touch."

      "As you come here and you see the GDP per capita, for instance, in Israel which is about $21,000, and compare that with the GDP per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice such a dramatically stark difference in economic vitality," the Republican presidential candidate told about 40 wealthy donors who at a breakfast around a U-shaped table at the luxurious King David Hotel."

      http://www.cnbc.com/id/48394080

      Yeah, the cultural superiority card, that's always a crowd pleaser. So now the Palestinians think Romney's out of touch. The can join the club. Americans do, the British overwhelmingly do, now the Palestinians. That's the Romney Principe: the more you get to know him the less you like him.

      "It is a racist statement and this man doesn't realize that the Palestinian economy cannot reach its potential because there is an Israeli occupation," said Saeb Erekat, a senior aide to Palestinian President Mahmoud Abbas.

      "It seems to me this man (Romney) lacks information, knowledge, vision and understanding of this region and its people," Erekat added. "He also lacks knowledge about the Israelis themselves. I have not heard any Israeli official speak about cultural superiority."

      "The economic disparity between the Israelis and the Palestinians is actually much greater than Romney stated. Israel had a per capita gross domestic product of about $31,000 in 2011, while the West Bank and Gaza had a per capita GDP of just over $1,500, according to the World Bank."

       Mitt says he knows this based on books he's read:

       "Romney, seated next to billionaire casino owner Sheldon Adelson at the head of the table, told donors at his fundraiser that he had read books and relied on his own business experience to understand why the difference is so great."

       What books might that have been? I'm guessing all the books are by Charles Murray, probably starting with The Bell Curve.

       "Romney, in comparing the Israeli and Palestinian economies, made no mention of the fact that Israel has controlled the West Bank, Gaza Strip and east Jerusalem since capturing them in the 1967 war. Israel withdrew from Gaza in 2005, but continues to control access, and has enforced a crippling border blockade since the Islamic militant Hamas seized the territory in 2007. "

        "In the West Bank, Israel retains overall control, and Palestinians only have limited self-rule. Israel controls all border crossings in and out of the West Bank, and continues to restrict Palestinian trade and movement."

        "The World Bank and the International Monetary Fund have said repeatedly that the Palestinian economy can only grow if Israel lifts those restrictions."

         The last thing Americans want is more war fatigue. Yet Romney seems to think the way to the heart of many American Jews is by him threatening war on behalf of Israel. The history of this approach for the GOP does not bode well. They haven't gotten more than 25% of the Jewish vote since 1988 and at present Romney is only getting 25% to the President's 68%. 

         No better than his numbers among Hispanics.  

      

Chicken Hawk Mitt Romney Threatening the Use of Nuclear Weaons

      I've been amused to see that some conservatives seem to think that Condoleeza rice is Mitt's savior in his troubled campaign-the latest troubles were his flop in Britain. The whole point of that glorified photo op gone awry, was to change the subject over the questions about Bain capital and why he won't release his tax returns.

     I mean aside from the fact that the conservative majority will not allow Romney to nominate a pro choicer, she is way too intimately tied with the failed Bush Administration who few Americans hold in high regard. Actually, polls show that even most Republicans don't miss Bush.

    As conservative radio host Mark Levine puts it, a Rice veep would mean that not only would the Romney campaign have to defend Bain for the rest of the election but the Bush Administration. Talk about two for the price of one.

   What's clear is that whatever success Romney has or doesn't have in hanging the bad economy on the President alone-polls indicate most Americans don't agree and still blame Bush more-he certainly doesn't want to remind anyone of Bush.

   Yet here he was in Israel channeling George W. Bush with his bellicose threats of nuclear weapon attacks. We haven't had a nuclear attack since 1945, happily, and do we really want this return to the Bush years, where Dubyah would threaten Holy Hell on the whole world at every moment? Obama has not taken military solutions off the table but he also believes that diplomacy should always be the first choice.

   We know how diplomacy challenged Mitt is by his latest case of his foot in his mouth disease in Britain. So it seems that a Romney Presidency will be very like a George W. Bush Presidency:

   "The Republican candidate said preventing a nuclear Iran should be America's "highest national security priority." And while he argued that diplomatic efforts should continue, Romney insisted that all options should be on the table in dealing with Iran, including a military strike."

   "We should employ any and all measures to dissuade the Iranian regime from its nuclear course, and it is our fervent hope that diplomatic and economic measures will do so," Romney said in an outdoor speech at Mishkenot Sha'anamim, a cultural center in Jerusalem. "In the final analysis, of course, no option should be excluded. We recognize Israel's right to defend itself, and that it is right for America to stand with you. "
Romney pushed back against criticism that those arguing in favor of leaving the military option open are "reckless and provocative and inviting war." "The opposite is true. We are the true peacemakers," Romney said.

     http://news.yahoo.com/blogs/ticket/romney-iran-no-option-excluded-181728095.html
   
     Nope. You can say many things about President Bush, but one thing is definitely not "peacemaker." The accurate word is war monger. The fact is that the President has not taken a military response off the table but that it's not his preferred choice quite properly.

     I don't think there's much appetite in this country to a return to military solutions being the first, preferred option again.

    I mean most Americans have war fatigue. There's a lot of gratitude that we're finally out of Iraq. On Afghanistan while we have winded down, many feel that here the President even wasn't quick enough.

    The worst part of Romney's miserable pandering is that it's all done with the view of picking up Jewish votes. Yet what a libel against the Jews to imagine that the way to their hearts is chicken hawk bravado and promises of military escalation and nuclear bombs.

   While American Jews like anyone else are individuals, as a demographic nothing about them suggests that they are impressed by war mongering-in Israel no more than elsewhere. The GOP always thinks that they're going to finally get over 25% of the Jewish vote because they support the Netanyahu approach to Israel's foreign policy. It hasn't worked until now and I doubt it will this time either. It will merely confirm Jews in their preference for the Democrats as a reasoned party with a measured attitude on foreign policy.

   I suspect the Jewish war monger vote even on behalf of Israel is pretty small.

Saturday, July 28, 2012

Ari Feischer's Plan to Raise Your Taxes.

      Fleischer played the usual game in a recent op-ed at the WSJ, he cried about how much the rich are having to pay in taxes-but only considered federal income taxes. Typical. Anyone that starts a conversation by saying that '45% of Americans pay no tax' is lying. They aren't including either state and local taxes or payroll taxes which is where most Americans pay most of their taxes.

    http://econospeak.blogspot.com/2012/07/ari-fleischer-tells-readers-of-wall.html

     http://econospeak.blogspot.com/2012/07/so-who-should-be-paying-for-government.html

     The are also saying something else. Consider Fleischer here:

      "Yet President Obama says that "for some time now, when compared to the middle class," the wealthy "haven't been asked to do their fair share." He's right that the system isn't fair, but not because the top 1% pay too little. It is because they pay too much."

        It's important to realize that what he's actually saying is that you don't pay enough taxes. Unless your are personally in the 1% he wants to raise your taxes. Logically if he wants to cut the taxes for the rich-and he does as he says they pay too much-this means he wants to raises or anyone who is not rich.

       Obviously the only way to make up for the loss in revenue in yet another tax cut for the rich is a tax hike somewhere else. Now the GOP preference is to say they don't want to raise anyone's taxes they'd rather "cut wasteful spending."

       In reality, spending cuts and tax hikes are the same thing.

       Again, the GOP is not against tax hikes. They just want them on the rest of us so as to give the 1% even more tax cuts. This has been standard operating procedure since Reagan's 1983 "compromise" with Tip O'Neil-sorry to say but Tip got rolled.

        The end result was lower SS benefits and higher contributions. We saw it this year with Herman Cain's absurd 9-9-9 plan where he aggressively wanted to raise taxes on most Americans. However, Cain was just more honest. Romney wants to do the same thing.

        He doesn't tell us this, he just calls for deep tax cuts for the rich without any offsetting tax hikes or spending cuts. But those are implied.

      

    

Now James Holmes is Claiming Amnesia

       There's been some question as to whether he was faking in court on Monday with his strange behaviour. I think he is strange and need not fake it. But this latest claim of amnesia... Well you have to at least wonder if it's self-serving.

      Great for him to 'forget" after all the people hurt can't forget it:

       "While we’ve all been trying to figure out why he shot up the theater killed and wounded several victims, apparently Holmes is in the slammer claiming to have amnesia."

        "A source told the New York Daily News that James is telling other inmates that he doesn’t know why he is locked up, but none of them believe his claims.

       Read more: http://globalgrind.com/news/james-holmes-claims-have-amnesia-while-jail-seeing-psychiatrist-massacre-aurora-shooting-details#ixzz21wNoPQHF

       It also has emerged that Holmes was seeing a psychiatrist-for schizophrenia-and sent them a grisly letter that was received on Monday cataloging his brutal plans.

       "The suspect in the Colorado theater rampage was seeing a University of Colorado psychiatrist who studies schizophrenia, according to court records released Friday, indicating for the first time that university officials were familiar with James Holmes’s mental state."

      "Holmes was a patient of Lynne Fenton, the medical director of student mental health services at the university, according to the suspect’s lawyers. Holmes withdrew from a PhD program in neuroscience after taking oral exams in early June."

       http://www.washingtonpost.com/politics/colorado-shooting-suspect-james-holmes-was-seeing-psychiatrist-at-university-before-massacre/2012/07/27/gJQAsTwHEX_story.html

      "Holmes sent a notebook to Fenton sometime before the shooting rampage, his lawyers said in a motion filed Friday. The notebook included a journal of sorts and crude drawings depicting a mass gun attack, according to news reports."

       "But whether the package reached the university mailroom before or after the tragedy is in dispute. Police seized the package Monday, but Fenton had never opened it, according to court records."

       Holmes lawyers claim Holmes' rights may have been violated by this disclosure:

       "Holmes’s lawyers at the public defender’s office have asked Colorado District Court Judge William Blair Sylvester to help them find out whether law enforcement officers or prosecutors leaked information to the media about the notebook and its contents this week. The lawyers argue that Holmes’s privacy and constitutional rights have been violated and that investigators are not necessarily entitled to see the troubled student’s communication with his psychiatrist."

     “The government’s disclosure of this confidential and privileged information has placed Mr. Holmes’ constitutional rights to due process and a fair trial by an impartial jury in serious jeopardy,” the public defenders, Daniel King and Tamara Brady, wrote.

      In another disclosure about James Holmes it has been revealed that he was facing eviction before the massacres:

      "On Monday James Holmes Was Facing Eviction Prior to 'Batman' Massacre was a top story. Here is the recap: (TMZ) James Holmes was just days from possibly being kicked out of his Colorado apartment when he opened fire in a crowded movie theater and killed 12 people ... this according to his neighbors."
 
       "Two residents of Holmes' apartment building tell TMZ ... in order to live in the complex you MUST be enrolled in the university. As soon as your student status is axed, you only have 30 days to move out.
We're told the building takes this rule very seriously and checks residents' active status every single month like clockwork. Holmes was a University of Colorado student at one time, but school officials say he dropped out some time June."

       "That means Holmes was just about at the end of his 30-day grace period to move out of his apartment when he took an arsenal of weapons to a local theater and opened fire."

     http://www.antimusic.com/news/12/July/ts23James_Holmes_Was_Facing_Eviction_Prior_to_Batman_Massacre.shtml
 
    I will finish by echoing  the Global Grind:

    "We pray for the victims of the shooting, and we hope that justice can be served for them."

Read more: http://globalgrind.com/news/james-holmes-claims-have-amnesia-while-jail-seeing-psychiatrist-massacre-aurora-shooting-details#ixzz21wRehuqJ

2012: Are Democrats Going to Lose Based on Low Enthusiasm?

     We've been hearing a lot out of this narrative after a recent Gallup poll showed Republicans are more enthusiastic than Democrats by a 51-39 margin. So is it time to hyperventilate?

     I'm not so impressed. One thing that should be kept in mind is that voter enthusiasm is no guarantee of victory although we are hearing a lot about this large correlation.

     "Gallup has found a relationship between voting enthusiasm and the outcome of midterm congressional elections, with the party that has the advantage generally faring better in the elections. That pattern also held in the 2008 presidential election, with Democrats reporting greater enthusiasm throughout the year and Barack Obama winning the election"

      http://www.outsidethebeltway.com/gallup-democratic-voters-much-less-enthusiastic-about-november-than-republicans/

      Yeah, "Gallup found a relationship." Let's see is it anymore than assuming that it matters? Note that the correlation is found more in midterm elections. Consider this as well. In 2008 it's true that at this point in the election cycle the Dems led in enthusiasm by a 26 point margin (61-35). Of course, Obama went on to win a landslide. Case closed right?

      Well I'm interested in 2004, though. That year at this time the Democrats also had a big edge in enthusiasm (68-51). We all know how that one turned out. Look, the tricky thing in economics is being able to figure out what correlations are really material and which are actually red herrings. If Bush won in 2004 even if during this same point in the Summer the Dems actually had a stronger lead than the Repubs do now what does that tell you?

     It tells me this "relationship" Gallup has "discovered" is a little more tenuous than first appearances suggest. I'd like to suggest another relationship that is at least worth looking at. How about the premise that maybe the party in power always shows less enthusiasm? When you're out of power the party is always more enthusiastic. What's interesting is that in the samples we have here in this Gallup piece we see in every year-2004, 2008, 2010 and this year, the party out of the White House is more enthusiastic.

    So maybe that's got something to do with it. In any case, the GOP base is comparatively actually 17 points less enthusiastic  than the 2004 Dems for all the good it did us. Indeed those Dems were even more enthusiastic by this measure than the 2008 Dems.

   Conclusion: it's an interesting metric but you can read way too much into it. Keep in mind as well that voter enthusiasm tends to droop during the Summer before the conventions. And actually, during the GOP primary what was notable was the low level of enthusiasm GOP primary voters had for Mitt Romney. They ultimately went with him as the one most likely to beat President Obama.

    But I would suggest this. Very few people like Mitt Romney. Even the Romney supporters are less Romney supporters than Obama haters. I would argue that most Americans like President Obama and much more of the Obama vote is a vote for hm rather than just a no vote for the other guy. The purely negative support for Romney is a tenuous way to build a winning coalition.

    Finally, I can only speak for myself here. but I am very enthusiastic about this election. If you want to understand what's at stake just think about these words, "The Paul Ryan Budget." If any honest liberal doesn't think the stakes are important enough he's out to lunch anyway.

    I have this argument with Morgan Warstler all the time. He thinks that in 1980 the country became more conservative. They repented of their liberal past and now the game is played on conservative terms. Obama should have :"done a Clinton" and didn't and will now be punished. He thinks the libs had their time-1913-1980 based on "giving away free stuff" but now the conservatives caught up in 80 and that we are now living in a conservative age.

   I think he's wrong though I'll give him credit for saying he'll know he's wrong if Obama wins in November. In reality, I think the conservative wave stopped in 2004, at the nadir of their power, when Buckley wrote his triumphant "Did You Ever See a Dream Walking?"

  In 2005, Bush seemed to have it all with both Houses of Congress. He had plans to privatize Social Security. Yet he ended up tabling it. Why? Because there was no political capital to do it. So then 5 years later Paul Ryan tries to take it a different way going after Medicare.  He actually dares to plan for Medicare privatization. This was considered the third rail for years.

   The point is though is the Repugs lacked the mandate in 2005 and I don't think they suddenly have it now. What Morgan fails to grasp is that the conservative victories from 1980-2004 were the low handing fruit. Now they are trying to aim at the heart of the New Deal. Because that's what this election is really about. A vote for Mitt 'Romney is literally a vote to end the New Deal. I don't see it. I think that the fact that Judge Roberts took the temperature of Americans and realized he couldn't strike down Obamacare shows that the GOP has taken on more than it can chew now.

Romney's Cynical Push For Jewish Votes

      One of the reasons that Republicans do so poorly with women, Hispanics, African Americans, etc. is that they just don't get it. They're idea for say going for the Hispanic vote is to suggest Rubio for Vice President.

      It's as if you can promote polices Hispanic people hate, but they will vote for you anyway, just because the you bring in a Hispanic person to promote it. Or they respond to poor numbers with women by bringing in a woman to say she'll kill Planned Parenthood. It suggests that they think that minority groups are simply emotional and don't understand the issues. That's really what they think too.

     So this year they think they have a trump card to finally win over some Jewish votes:

     "It has become a predictable quadrennial ritual: Republicans claim this is the presidential election that their pro-Israel credentials will translate into crucial gains among Jewish voters."

      "What actually could make this White House campaign different, the first one in the post-Citizens United era, is just how hard-fought and expensive the battle for what is only three percent of the electorate ultimately could be."

     Read more: http://www.politico.com/news/stories/0712/79071.html#ixzz21w3AO0uv
 
     Essentially Shelly Adelson plans to buy the Jewish vote. Bear in mind that they try it every year:

     "Even though Republicans haven’t cracked 25 percent of the Jewish vote since 1988, GOP backers of Mitt Romney — who arrives in Israel Saturday — are mounting what likely will be the most aggressive effort yet in dollars and cents to woo one of Ohio and Florida’s most pivotal constituencies."

      It seems to me that this is no different than their hope to get blacks to not vote for Obama based on support for gay marriage. Probably they're over estimating it's potential. Do most Jewish Americans vote based on Israel above all?

      Even those who see Israel as important, how many of them actually agree with the hawkish policies of Netanyahu? Still the hope is that they can skim a little off the top in swing states like Florida and Ohio, enough to make the switch.

      A big part of the trip is optics-Obama hasn't visited Israel once in his first term so Romney in already visiting during his campaign can drive the idea that Obama hates Israel or is at least unsympathetic to Israel.

     “The Israel issue is just one of many issues that influence someone’s perception of a candidate and I think it’s a pretty small number of people where that’s their top issue,” said Noah Pollak, executive director of the conservative Emergency Committee for Israel. “But in general, I think for Jewish voters and non-Jewish voters alike, it’s pretty puzzling to them why this administration has treated Israel like it’s a problem to be confronted. … That very well, in a state like Florida, could be influential.”

     Eric Cantor claims this is going to help the GOP a lot:

     "The House leader, the most prominent Jewish Republican in American politics, said he thinks Romney can come close to matching Ronald Reagan’s 39 percent of the Jewish vote in 1980 — the high water mark for GOP White House candidates in the modern era."

      I doubt it will be that dramatic:

     "Whit Ayres, a GOP pollster, said Romney’s numbers among Jews could bump up, but it will be contingent on more of the community voting on Israel."

    “To the extent that Jewish voters are driven by concerns over Israel rather than domestic issues, Romney’s got a reasonable shot to get to 30 or even 35 percent,” said Ayres

     "Indyk questioned whether Romney’s message on Israel — “saying that he would subcontract his Middle Eastern policy to the prime minister of Israel” — would resonate with American Jews, or whether courting them like a single-issue group was wise to begin with."

    “Jews, as a broad generalization, are progressives. That puts them in the Democratic camp. Some small minority will vote the Israel issue, but most of them will make a broader judgment,” Indyk said. “And the things they care about, as well as Israel, are things like health care and the kinds of progressive policies that President Obama stands for.”

    The Jews as a group in America tend to vote idealism. Even though they are a high income group they vote strongly Democratic. I don't think there are enough fire eating Israel hawks to make a difference. But it's something to keep in mind. The GOP will try to get its wedge issues where it can.