Monday, February 02, 2009

The New Deal, horrible mistake?

You'd think, from listening to pundits like Glenn Beck and the right-wing establishment that FDR's New Deal was a great failure; an obstruction to the bullet train that was market based recovery. It's strange how even now we are relying on revisionist history and trying to save our economy by pushing forth the "market self regulation" theory that got us into this mess in the first place. It's a good thing we have Nobel Prize winners like Paul Krugman to keep people honest.

Paul Krugman | New York Times Blog
November 8, 2008, 3:37 pm
New Deal economics

Everybody’s talking new New Deal these days — and, predictably, the FDR-haters are out in force, with all the usual claims about FDR having actually made the Great Depression worse. (To the right, way back when, FDR was “That Man.” Now Obama is “that one.” Interesting.)

Eric Rauchway is all over this. Basically, the anti-FDR argument on the data is based on (a) considering people employed by the WPA “unemployed” (even though they were getting paid, and building public works that are in use to this day) plus (b) always focusing on 1938 — the year in which the economy suffered a serious setback from the progress of the previous four years.

Let me offer two pictures, beyond what Eric provides, to clarify things.

First, here’s real GDP (in logs) from 1929 to 1941, plus the trend. (That’s to bypass the employment nonsense). You can see that the economy made up a lot of the output gap before the 1938 setback, but by no means all.
INSERT DESCRIPTIONIncomplete recovery

Now, you might say that the incomplete recovery shows that “pump-priming”, Keynesian fiscal policy doesn’t work. Except that the New Deal didn’t pursue Keynesian policies. Properly measured, that is, by using the cyclically adjusted deficit, fiscal policy was only modestly expansionary, at least compared with the depth of the slump. Here’s the Cary Brown estimates, from Brad DeLong:
INSERT DESCRIPTIONLimited fiscal force

Net stimulus of around 3 percent of GDP — not much, when you’ve got a 42 percent output gap. FDR might have been more of a Keynesian if Keynesian economics had existed — The General Theory wasn’t published until 1936. Note in particular that in 1937-38 FDR was persuaded to do the “responsible” thing and cut back — and that’s what led to the bad year in 1938, which to the WSJ crowd defines the New Deal.

Implications for Obama: be inspired by FDR, but don’t imitate him slavishly. In particular, your economic policy should be bolder, not more cautious.

Sunday, October 19, 2008

Powell endorses Obama, but there's more.

Today Colin Powell endorsed Barack Obama, but the more interesting part that will likely get less press was his defense of Muslims.

Powell is one of the first politicians that has publicly said, Obama isn't a Muslim, but what if he is? Is there something wrong with that? This is America and there isn't anything wrong with that. Even Obama himself has rarely addressed this point. Powell again shows why members of both parties respect him, his character, and his judgment dearly. We are walking down a dangerous path in history when citizens and politicians indicate that it is appropriate to single out faiths as disqualifying people from higher office or any office; the whispering undercurrent to this election is that Muslim = terrorist and that is wrong in so many ways and denigrates the accomplishments of so many. That is not the America we should be presenting to the world. Powell is on point and joins the growing number of prominent GOP members, conservative radio hosts and conservative newspapers that have come out to endorse Senator Obama. Hats off to Colin Powell for doing the right thing and standing up for our fellow citizens.

Thursday, September 18, 2008

Carly Fiorina Implodes

I found Carly Fiorina's recent appearance on MSNBC to be rather humorous.

Well, I don't think John McCain could run a major corporation. I don't think Barack Obama could run a major corporation. I don't think Joe Biden could run a major corporation. But on the other hand, a major corporation is not the same as being President or Vice President of the United States. It is a fallacy to suggest that the country is like a company. So, of course, to run a business you have to have a lifetime of experience in business. But that's not what Sarah Palin, John McCain, Barack Obama, or Joe Biden are doing.

Simply hilarious.

We are talking about a party that elected George W. Bush and touted his experience running (or screwing) an oil company and a baseball team, and his MBA. One that promoted the image that he would be America's first "CEO President"

We are talking about a party that touted Mitt Romney's experience as Vice President of Bain Capital.

We are talking about a party that especially during the Republican Revolution or... Gingrich Revolution if you will, basically advocated for smaller government that was accountable to its stockholders (the American People), just like a company.

My how short our memory is...

Wednesday, September 17, 2008

McCain and Wall Street

"The government was forced to commit $85 billion," McCain said in a statement. "These actions stem from failed regulation, reckless management and a casino culture on Wall Street that has crippled one of the most important companies in America."

It's funny, McCain and the other Republicans (former McCain Financial Policy adviser Phil Gramm) passed the Gramm-Leach-Bliley Act in 1999. On the surface it was in my eyes truly a modernization act. It allowed Banks, Investment Banks, and Insurance firms to become one. Not the end of the world and not necessarily a bad thing at all.

This paved the way for Gramm's new bill, the Commodity Futures Modernization Act of 2000. Here we saw a bill that ensured unregulated creation and trading of Credit Default Swaps, Collateral Debt Obligations, Mortgage Backed Securities. And that's where we are today, a day after AIG was spared by the Treasury, Lehman brothers was allowed to collapse and the financial sector is in misery. With this bill, the Republicans allowed the financial sector to regulate themselves. When has self-regulation ever worked? When? Casino Culture indeed Senator McCain, your friend Mr. Gramm created this mess and you signed onto it in the 2001 Fiscal Year budget. Let's not forget all this time, McCain was the chairman of the Senate Commerce Committee. Where was John McCain the last 8 years when all of this de-regulation was going on? I don't remember him speaking up or against any of the deregulatory bills. The fact that he has done an about face today, just shows you who we have running for President.

Tuesday, September 16, 2008

McCain wants a commission for the market collapse

McCain has said that he would create a commission to investigate how and why our stock market had such a huge collapse these past few weeks/months. I say, bring it on, let's have a commission. Maybe we can finally discuss industry deregulation. It's always been a game for Wall Street to invent ways to make money before the SEC comes in and says something. It just so happens that we let them go so willy nilly this time, that they dug themselves a very large hole and won't climb out of it in one piece. That's just what happens when you let greedy ambition run wild. Commission? Sure, maybe McCain will discover the role his own advisers like Phil Gramm played in this whole mess.

I hope Americans all realize who is going to pay for all of this, it's a double-edged sword. For everyone whose 401k/IRA accounts got shafted, that was the first blow. The second comes when people begin to realize that it is the American tax payer who will be shouldering the burden, the burden of bailing out AIG, Bear Stearns, Fannie and Freddie... This is money that we could have been doing other things with. Things like healthcare, education, etc. It's funny in the back of my mind I keep hearing George W. Bush's words, that we shouldn't increase taxes on the wealthy, because the wealthy have accountants to get them out of paying for taxes. Whose that leave? That's right, it leaves you and I, the middle class. Thanks guys.

McCain and Al Gore: Inventors of the Century

Today, John McCain knows how Al Gore feels. McCain policy adviser, Douglas Holtz-Eakin, referring to this BlackBerry stated, "You're looking at the miracle that John McCain helped create."

True, McCain may have voted on and driven some legislation that allowed for the FCC to make way to PDAs utilizing Push-services. But by no means did John McCain have a finger in its creation or R&D tax breaks that spurred its development. Research In Motion is based in Canada. Now John McCain will have to watch as the media and emails circulate about "John McCain invented the BlackBerry!". Now he knows how Al Gore felt. Now he knows, and so does the right wing. It's like karma came back to pay them back for that ridiculous Al Gore and the internet attack.

Thursday, September 11, 2008

Palin: Working Mothers

"A spokeswoman for the McCain-Palin campaign said she was unable to say at this time what Palin’s position is on federal policies relating to job protections and benefits for working mothers."

Really? That's kind of surprising. I figured if anyone would have an early stance on job protection for working mothers/new mothers, it would be Palin. I'm curious what her stance is when she does reveal an opinion that the McCain-Palin campaign is willing to release.

Saturday, September 06, 2008

The Real Sarah Palin

Review of Sarah Palin, as given by Anne Kilkenny of Wasilla, Alaska. Anne Kilkenny exists and she actually did write the article as verified by the NYTimes and internet mythbusters,

I am a resident of Wasilla, Alaska. I have known Sarah since 1992.
Everyone here knows Sarah, so it is nothing special to say we are on a
first-name basis. Our children have attended the same schools. Her
father was my child's favorite substitute teacher. I also am on a
first name basis with her parents and mother-in-law. I attended more
City Council meetings during her administration than about 99% of the
residents of the city.

She is enormously popular; in every way she’s like the most popular
girl in middle school. Even men who think she is a poor choice and
won't vote for her can't quit smiling when talking about her because
she is a "babe".

It is astonishing and almost scary how well she can keep a secret. She
kept her most recent pregnancy a secret from her children and parents
for seven months.

She is "pro-life". She recently gave birth to a Down's syndrome baby.
There is no cover-up involved, here; Trig is her baby.

She is energetic and hardworking. She regularly worked out at the gym.

She is savvy. She doesn't take positions; she just "puts things out
there" and if they prove to be popular, then she takes credit.

Her husband works a union job on the North Slope for BP and is a
champion snowmobile racer. Todd Palin’s kind of job is highly
sought-after because of the schedule and high pay. He arranges his
work schedule so he can fish for salmon in Bristol Bay for a month or
so in summer, but by no stretch of the imagination is fishing their
major source of income. Nor has her life-style ever been anything
like that of native Alaskans.

Sarah and her whole family are avid hunters.

She's smart.

Her experience is as mayor of a city with a population of about 5,000
(at the time), and less than 2 years as governor of a state with about
670,000 residents.

During her mayoral administration most of the actual work of running
this small city was turned over to an administrator. She had been
pushed to hire this administrator by party power-brokers after she had
gotten herself into some trouble over precipitous firings which had
given rise to a recall campaign.

Sarah campaigned in Wasilla as a “fiscal conservative”. During her 6
years as Mayor, she increased general government expenditures by over
33%. During those same 6 years the amount of taxes collected by the
City increased by 38%. This was during a period of low inflation
(1996-2002). She reduced progressive property taxes and increased a
regressive sales tax which taxed even food. The tax cuts that she
promoted benefited large corporate property owners way more than they
benefited residents.

The huge increases in tax revenues during her mayoral administration
weren’t enough to fund everything on her wish list though, borrowed
money was needed, too. She inherited a city with zero debt, but left it
with indebtedness of over $22 million. What did Mayor Palin encourage
the voters to borrow money for? Was it the infrastructure that she said
she supported? The sewage treatment plant that the city lacked? or a
new library? No. $1m for a park. $15m-plus for construction of a
multi-use sports complex which she rushed through to build on a piece
of property that the City didn’t even have clear title to, that was
still in litigation 7 yrs later--to the delight of the lawyers
involved! The sports complex itself is a nice addition to the
community but a huge money pit, not the profit-generator she claimed it
would be. She also supported bonds for $5.5m for road projects that
could have been done in 5-7 yrs without any borrowing.

While Mayor, City Hall was extensively remodeled and her office
redecorated more than once.

These are small numbers, but Wasilla is a very small city.

As an oil producer, the high price of oil has created a budget surplus
in Alaska. Rather than invest this surplus in technology that will
make us energy independent and increase efficiency, as Governor she
proposed distribution of this surplus to every individual in the state.

In this time of record state revenues and budget surpluses, she
recommended that the state borrow/bond for road projects, even while
she proposed distribution of surplus state revenues: spend today's
surplus, borrow for needs.

She’s not very tolerant of divergent opinions or open to outside ideas
or compromise. As Mayor, she fought ideas that weren’t generated by
her or her staff. Ideas weren’t evaluated on their merits, but on the
basis of who proposed them.

While Sarah was Mayor of Wasilla she tried to fire our highly respected
City Librarian because the Librarian refused to consider removing from
the library some books that Sarah wanted removed. City residents
rallied to the defense of the City Librarian and against Palin's
attempt at out-and-out censorship, so Palin backed down and withdrew
her termination letter. People who fought her attempt to oust the
Librarian are on her enemies list to this day.

Sarah complained about the “old boy’s club” when she first ran for
Mayor, so what did she bring Wasilla? A new set of "old boys". Palin
fired most of the experienced staff she inherited. At the City and as
Governor she hired or elevated new, inexperienced, obscure people,
creating a staff totally dependent on her for their jobs and eternally
grateful and fiercely loyal--loyal to the point of abusing their power
to further her personal agenda, as she has acknowledged happened in the
case of pressuring the State’s top cop (see below).

As Mayor, Sarah fired Wasilla’s Police Chief because he “intimidated”
her, she told the press. As Governor, her recent firing of Alaska's top
cop has the ring of familiarity about it. He served at her pleasure
and she had every legal right to fire him, but it's pretty clear that
an important factor in her decision to fire him was because he wouldn't
fire her sister's ex-husband, a State Trooper. Under investigation
for abuse of power, she has had to admit that more than 2 dozen
contacts were made between her staff and family to the person that she
later fired, pressuring him to fire her ex-brother-in-law. She tried to
replace the man she fired with a man who she knew had been reprimanded
for sexual harassment; when this caused a public furor, she withdrew
her support.

She has bitten the hand of every person who extended theirs to her in
help. The City Council person who personally escorted her around town
introducing her to voters when she first ran for Wasilla City Council
became one of her first targets when she was later elected Mayor. She
abruptly fired her loyal City Administrator; even people who didn’t
like the guy were stunned by this ruthlessness.

Fear of retribution has kept all of these people from saying anything
publicly about her.

When then-Governor Murkowski was handing out political plums, Sarah got
the best, Chair of the Alaska Oil and Gas Conservation Commission: one
of the few jobs not in Juneau and one of the best paid. She had no
background in oil & gas issues. Within months of scoring this great
job which paid $122,400/yr, she was complaining in the press about the
high salary. I was told that she hated that job: the commute, the
structured hours, the work. Sarah became aware that a member of this
Commission (who was also the State Chair of the Republican Party)
engaged in unethical behavior on the job. In a gutsy move which some
undoubtedly cautioned her could be political suicide, Sarah solved all
her problems in one fell swoop: got out of the job she hated and
garnered gobs of media attention as the patron saint of ethics and as a
gutsy fighter against the “old boys’ club” when she dramatically quit,
exposing this man’s ethics violations (for which he was fined).

As Mayor, she had her hand stuck out as far as anyone for pork from
Senator Ted Stevens. Lately, she has castigated his pork-barrel
politics and publicly humiliated him. She only opposed the “bridge to
nowhere” after it became clear that it would be unwise not to.

As Governor, she gave the Legislature no direction and budget
guidelines, then made a big grandstand display of line-item vetoing
projects, calling them pork. Public outcry and further legislative
action restored most of these projects--which had been vetoed simply
because she was not aware of their importance--but with the unobservant
she had gained a reputation as “anti-pork”.

She is solidly Republican: no political maverick. The State party
leaders hate her because she has bit them in the back and humiliated
them. Other members of the party object to her self-description as a
fiscal conservative.

Around Wasilla there are people who went to high school with Sarah.
They call her “Sarah Barracuda” because of her unbridled ambition and
predatory ruthlessness. Before she became so powerful, very ugly
stories circulated around town about shenanigans she pulled to be made
point guard on the high school basketball team. When Sarah's
mother-in-law, a highly respected member of the community and
experienced manager, ran for Mayor, Sarah refused to endorse her.

As Governor, she stepped outside of the box and put together of package
of legislation known as “AGIA” that forced the oil companies to march
to the beat of her drum.

Like most Alaskans, she favors drilling in the Arctic National Wildlife
Refuge. She has questioned if the loss of sea ice is linked to
global warming. She campaigned “as a private citizen” against a state
initiaitive that would have either a) protected salmon streams from
pollution from mines, or b) tied up in the courts all mining in the
state (depending on who you listen to). She has pushed the State’s
lawsuit against the Dept. of the Interior’s decision to list polar
bears as threatened species.

McCain is the oldest person to ever run for President; Sarah will be a
heartbeat away from being President.

There has to be literally millions of Americans who are more
knowledgeable and experienced than she.

However, there’s a lot of people who have underestimated her and are
regretting it.

•“Hockey mom”: true for a few years
•“PTA mom”: true years ago when her first-born was in elementary
school, not since
•“NRA supporter”: absolutely true
•social conservative: mixed. Opposes gay marriage, BUT vetoed a bill
that would have denied benefits to employees in same-sex relationships
(said she did this because it was unconsitutional).
•pro-creationism: mixed. Supports it, BUT did nothing as Governor to
promote it.
•“Pro-life”: mixed. Knowingly gave birth to a Down’s syndrome baby
BUT declined to call a special legislative session on some pro-life
•“Experienced”: Some high schools have more students than Wasilla has
residents. Many cities have more residents than the state of Alaska.
No legislative experience other than City Council. Little hands-on
supervisory or managerial experience; needed help of a city
administrator to run town of about 5,000.
•political maverick: not at all
•gutsy: absolutely!
•open & transparent: ??? Good at keeping secrets. Not good at
explaining actions.
•has a developed philosophy of public policy: no
•”a Greenie”: no. Turned Wasilla into a wasteland of big box stores
and disconnected parking lots. Is pro-drilling off-shore and in ANWR.
•fiscal conservative: not by my definition!
•pro-infrastructure: No. Promoted a sports complex and park in a city
without a sewage treatment plant or storm drainage system. Built
streets to early 20th century standards.
•pro-tax relief: Lowered taxes for businesses, increased tax burden on
•pro-small government: No. Oversaw greatest expansion of city
government in Wasilla’s history.
•pro-labor/pro-union. No. Just because her husband works union
doesn’t make her pro-labor. I have seen nothing to support any claim
that she is pro-labor/pro-union.


First, I have long believed in the importance of being an informed
voter. I am a voter registrar. For 10 years I put on student voting
programs in the schools. If you google my name (Anne Kilkenny +
Alaska), you will find references to my participation in local
government, education, and PTA/parent organizations.

Secondly, I've always operated in the belief that "Bad things happen
when good people stay silent". Few people know as much as I do because
few have gone to as many City Council meetings.

Third, I am just a housewife. I don't have a job she can bump me out
of. I don't belong to any organization that she can hurt. But, I am no
fool; she is immensely popular here, and it is likely that this will
cost me somehow in the future: that’s life.

Fourth, she has hated me since back in 1996, when I was one of the 100
or so people who rallied to support the City Librarian against Sarah's
attempt at censorship.

Fifth, I looked around and realized that everybody else was afraid to
say anything because they were somehow vulnerable.

I am not a statistician. I developed the numbers for the increase in
spending & taxation 2 years ago (when Palin was running for Governor)
from information supplied to me by the Finance Director of the City of
Wasilla, and I can't recall exactly what I adjusted for: did I adjust
for inflation? for population increases? Right now, it is impossible
for a private person to get any info out of City Hall--they are
swamped. So I can't verify my numbers.

You may have noticed that there are various numbers circulating for the
population of Wasilla, ranging from my "about 5,000", up to 9,000. The
day Palin’s selection was announced a city official told me that the
current population is about 7,000. The official 2000 census count was
5,460. I have used about 5,000 because Palin was Mayor from 1996 to
2002, and the city was growing rapidly in the mid-90’s.

Anne Kilkenny
August 31, 2008

Friday, September 05, 2008

Wednesday, September 03, 2008

Country vs. Party

Country is more important than party. The more I hear this phrase repeated, the more it bothers me. Joe Lieberman repeated it last night more times than I can remember. Sounds high-minded, but in reality it doesn't really make any sense.

Politicians join a party because they share a common view on how best to run a country, so that it can be successful and take care of its inhabitants. Which party is not putting country first? It's a facetious argument to say that if you are a Democrat and you're not voting for McCain, you are not doing so in the best interest of your country. Putting your country first is the principle goal of any party. Then again, Joe Lieberman has never made sense.

"The times are too serious, the stakes are too high for this same partisan playbook. So let us agree that patriotism has no party. I love this country, and so do you, and so does John McCain. The men and women who serve in our battlefields may be Democrats and Republicans and Independents, but they have fought together and bled together and some died together under the same proud flag. They have not served a Red America or a Blue America - they have served the United States of America.

So I've got news for you, John McCain. We all put our country first."- Barack Obama - DNC '08