There's an old, sophomoric joke that, according to my significant other, I've repeated too often. It goes something like this...
Q.: What do you call a deer with no eyes?
A.: No-eye deer.
Q.: What do you call a deer with no eyes and no legs?
A.: Still. No-eye deer.
Q.: What do you call a deer with no eyes, no legs and no ears?
A.: Can't hear. Still. No-eye deer.
Q.: What do you call a deer with no eyes, no legs, no ears and no genitalia?
A.: Can't hear. Still. No fucking eye deer.
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Off Message Watch: "I Don't Know That for Sure"
Mark Thoma
Economist's View Blog
Saturday, December 04, 2010
The administration just cannot admit that it made a mistake in proposing a stimulus package that was too small. This is from a Q&A with Austan Goolsbee:
Q. Would our economy be in better shape right now if the initial stimulus when the administration took office had been bigger?
A. I don't know the answer to that for sure. There's a bit of a crystal ball in that. It obviously depends on what the things were.
The right answer here is "of course if would have been better," and to then talk about how Republicans blocked any hope of additional stimulus once it was clear the economy was doing much worse than anticipated. But because the administration refuses to admit its mistake and concede that the stimulus was too small, it cannot bring itself to argue that the economy needs more help from fiscal authorities. There were nods in this direction now and again, but the administration never really tried to make this argument, a strong push for a job creation program for example, and it has thus given up the chance to make clear which party is standing in the way of providing more help for distressed households.
Thoma makes note of Krugman's commentary over the weekend, HERE...
Getting Obama's Drift
Paul Krugman - New York Times Blog
December 4, 2010, 7:50 am
I felt sorry for Jared Bernstein, who surely knows better, having to convey the administration's attempt to downplay the terrible jobs numbers.
I know what's going on: the administration decided, more or less a year ago, that rather than admit that its stimulus package was inadequate and call for more, it would put on a happy face and hope for better news. But here's the thing: by now we know that this strategy has been a political disaster. So you would think that the administration would change its line.
But to do that, someone at the top has to make the decision to change direction. And clearly, nobody has. I don't think there was a deliberate decision to persist in an obviously losing strategy; I just think top management has gone missing. And so the administration drifts ...
Krugman also pointed us to Leonhardt's words in Friday's Times...
Does One Month Make a Trend?
By DAVID LEONHARDT
New York Times
December 3, 2010, 11:01 am
Jared Bernstein, one of President Obama's economic advisers, e-mailed to say that he thought I was making too much of one month's jobs number:
Fact is, we need much more robust job creation, which leads you directly to the president's agenda to make sure taxes stay low for middle-class families and small businesses. At the same time, one month does not a new trend make, and we'd be saying the same thing if we got an unexpectedly high payroll number.
He may be right. The latest numbers on initial jobless claims for late November -- a period not covered by today's report -- offered more reason for optimism, for instance. Ian Shepherdson of High Frequency Economics, in a note to clients this morning, wrote that "the drop in jobless claims suggests better news soon."
Again, though, I think back to early this year. The economy seemed to be turning a corner. But then it didn't. It's impossible to know whether we're at a similar moment now or whether this report will end up being just a blip, yet the risks are uncomfortably high. And no matter what, the economy remains very far from healthy. As Mr. Shepherdson wrote, "it will be a long haul back to normalcy."
But Krugman also reminds us, via his parsing of Digby, that's it's also all about class inequality...
Class And Social Security
Paul Krugman
NY Times Blog
December 4, 2010, 10:07 am
Digby sounds the warning: a fair number of "centrist" Democrats - probably including the Incredible Shrinking President -- seem willing, even eager, to join up with Republicans in cutting Social Security benefits and raising the retirement age. As she says, this is idiotic even in narrow political terms: in the very next election, Republicans will run ads in which they pose as the defenders of Social Security, while Democrats are the meanies who want to take away your retirement.
The question you have to ask is, why are Democrats such suckers on this issue?
Krugman tell us: "The answer, I suspect, has to do with class."
It's noted that when most--including most well-off Americans--are faced with big medical expenses, they rely on Medicare, too.
Social Security, by contrast, is something that matters enormously to the bottom half of the income distribution, but no so much to people in the 250K-plus club. A 30 percent cut in benefits would represent disaster for tens of millions of Americans, but a barely noticeable inconvenience for VSPs and everyone they know. A rise in the retirement age would be a vast hardship for people who do manual labor, but if anything a gift to VSPs, who don't want to step aside in any case. And so on down the line.
So going after Social Security is a way to seem tough and serious -- but entirely at the expense of people you don't know.
And, finally, there's Frank Rich in Sunday's NYT...
All the President's Captors
By FRANK RICH
NY Times
December 5, 2010
...The cliché criticisms of Obama are (from the left) that he is a naïve centrist, not the audacious liberal that Democrats thought they were getting, and (from the right) that he is a socialist out to impose government on every corner of American life. But the real problem is that he's so indistinct no one across the entire political spectrum knows who he is. A chief executive who repeatedly presents himself as a conciliator, forever searching for the "good side" of all adversaries and convening summits, in the end comes across as weightless, if not AWOL. A Rorschach test may make for a fine presidential candidate -- when everyone projects their hopes on the guy. But it doesn't work in the Oval Office: These days everyone is projecting their fears on Obama instead....
--SNIP--
...they have waited in vain for him to stand firm on what matters to him and to the country rather than forever attempting to turn non-argumentative reasonableness into its own virtuous reward. It's clear now the shellacking was not the hoped-for wake-up call. For starters, Obama might have robustly challenged the election story line pushed by the G.O.P. both before and after Nov. 2 -- that deficit eradication and tax cuts for all are voters' No. 1 priority. Repeating it constantly -- as McConnell and John Boehner do, brilliantly -- does not make it true. But the myth becomes reality if there's no leader to trumpet the counternarrative...
--SNIP--
We're now at the brink of a new economic disaster that will eventually yank a chicken out of every pot. The Center on Budget and Policy Priorities calculates that the extended Bush-era tax cuts will contribute by far the largest share to the next decade's deficits -- ahead of the recession's drain on tax revenues, Iraq and Afghanistan war spending, TARP and Obama's stimulus. The new Congress's plan to block any governmental intervention on behalf of 15 million-plus jobless Americans guarantees that the unemployment rate, back up to 9.8 percent as of Friday, will remain intractable too...
University of Oregon Economics Professor Mark Thoma, quoted at the top of this diary, has been on a roll on this topic for a couple of weeks. I referred to it, "Communication Breakdown," in my diary this past Tuesday.
On Friday, former Clinton administration Labor Secretary Robert Reich said THIS...
This is not a recovery. It's a continuing jobs emergency and it demands action.
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So, we have a continuing jobs emergency.
As we learned just last week, housing is still in a nosedive.
Our country's largest bank has all but taken a final dive into the abyss.
And, if you take a look at the lead in Sunday's NY Times, we're reminded it's not just the federal budgets that are hurting here. We're reminded that it's the United STATES of America: "Mounting State Debts Stoke Fears of a Looming Crisis."
In Sunday's NY Times' lead, Michael Cooper and Mary Williams Walsh talk of an ongoing, massive collapse in state and municipal budgets around the country.
Mounting State Debts Stoke Fears of a Looming Crisis
By MICHAEL COOPER and MARY WILLIAMS WALSH
New York Times
December 5, 2010
...Some of the same people who warned of the looming subprime crisis two years ago are ringing alarm bells again. Their message: Not just small towns or dying Rust Belt cities, but also large states like Illinois and California are increasingly at risk...
The journalists focus upon commentary from Wall Street analyst Meredith Whitney, someone who's gained a well-earned reputation (she's also one of my favorites) for prescience due to the fact that she was one of the first to warn us of a mortgage meltdown. She now "...sees similar problems with state and local government finances."
"The state situation reminded me so much of the banks, pre-crisis," she said this fall on CNBC.
There are eerie similarities between the subprime debt crisis and the looming municipal debt woes. Among them:
¶Just as housing was once considered a sure bet -- prices would never fall all across the country at the same time, conventional wisdom suggested -- municipal bonds have long been considered an investment safe enough for grandmothers, because states could always raise taxes to pay their bondholders. Now that proposition is being tested. Harrisburg, the capital of Pennsylvania, considered bankruptcy this year because it faced $68 million in debt payments related to a failed incinerator, which is more than the city's entire annual budget. But officials there have resisted raising taxes.
¶Much of the debt of states and cities is hidden, since it is off the books, just as the amount of mortgage-related debt turned out to be underestimated. States and municipalities often understate their pension liabilities, in part by using accounting methods that would not be allowed in the private sector. Joshua D. Rauh, an associate professor of finance at Northwestern University, and Robert Novy-Marx, an assistant professor of finance at the University of Rochester, calculated that the true unfunded liability for state and local pension plans is roughly $3.5 trillion.
¶The states and many cities still carry good ratings, and those issuing warnings are dismissed as alarmists, reminding some analysts of the lead up to the subprime crisis.
We're told: "More painful cuts, more layoffs, more tax increases, more battles with public employee unions, [and] more requests to bail out cities," are immediately ahead..."the very nature of government could change as they have less money left over to pay for the services they have long provided..."
Meteor Blades just posted an excellent piece on this last article, and it's currently on the diary list right HERE.
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From Yves Smith, a week ago...
Is the Recession Over, or is Extend and Pretend More Pervasive?
Yves Smith
Naked Capitalism
November 28, 2010 3:15AM
A hedge fund manager and I had a flurry of e-mails over the weekend, prompted by various "The recession is over" declarations, particularly one lauding Timothy Geithner's skills as a forecaster. I think our shared view is that to call this recession over is tantamount to calling an operation successful when the patient is tethered to an oxygen tank and needs 24 hour nursing care. In other words, the designation may be technically correct, but also shows how low the threshold of "success" is considered to be.
One of his comments:
It's weird, but even here in the heart of our wealthy suburb, and people APPEAR to be as affluent as ever, but scratch beneath the surface, and many are experiencing money strains. It's like we just continue extend and pretend and then people use the recurrence of bad habits as a sign that Geithner was right. It's nauseating. And somehow 10% unemployment doesn't matter any more!!???
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Hmmm....So, what do you call a deer with no eyes?
Five days ago, I called it a "Communication Breakdown."
Over the past few days, a LOT of respected voices on the left have all started to say the same thing.
But, pretty soon, IMHO, as far as the Democratic Party's concerned, the "communication" part won't even matter...and, that's because nobody will be listening.
Still. Can't hear. No-eye deer.
