Wednesday, May 12, 2010

Last Call

Seems like a necessary closing of the barn door after the horse has escaped, but still...
President Obama on Wednesday proposed a package of measures that would provide at least $58 million in additional funding for oil spill relief efforts and raise the tax that oil companies pay to maintain an emergency fund.

In a letter to House Speaker Nancy Pelosi requesting congressional approval of the package, Obama said oil giant BP -- which owns the leaking well in the Gulf of Mexico -- was responsible for all clean-up costs. In addition, Obama said, the government would seek full compensation for all damages from BP.

"We cannot allow the potentially protracted pursuit of claims to prevent us from swift action to help those harmed by this spill," Obama said in the letter.

The proposals would increase by 1 cent the current tax of 8 cents a barrel that oil companies pay into the Oil Spill Liability Trust Fund, and also increase the amounts that could be spent from that fund on single incidents. 
That's good,'re really going to need that trust fund to clean this up.

Then you're going to need several more hundreds of billions of dollars on top of that.

The Smartest Damn Thing I've Read All Week

Ezra Klein talks with economist James Galbraith:
EK: You think the danger posed by the long-term deficit is overstated by most economists and economic commentators.

JG: No, I think the danger is zero. It's not overstated. It's completely misstated.

EK: Why?

JG: What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn't be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.

So there are two possibilities here. One is the theory is wrong. The other is that the market isn't rational. And if the market isn't rational, there's no point in designing policy to accommodate the markets because you can't accommodate an irrational entity.
Holy hell, that actually makes sense.  Either the deficit isn't a danger,  or the markets are stupid to the point where trying to fix the deficit doesn't matter.

That's actually brilliant.

What Steve M Said

Steve M At NMMNB nails precisely how the Right Wing Noise Machine works, detailing how this statement by Elena Kagan in 1993:
"I take it as a given that we live in a society marred by racial and gender inequality, that certain forms of speech perpetuate and promote this inequality, and that the uncoerced disappearance of such speech would be cause for great elation."
...becomes this.
President Obama's nominee for the Supreme Court, Elena Kagan, argued certain forms of speech that promote "racial or gender inequality" could be "disappeared."
We're right on track for the game plan of how this plays out, and approaching Step 5, where the Village openly wonders if Kagan will withdraw her nomination.

By The Time I Get To Arizona, Part 5

OK Arizona, the immigration law is one thing.  But your ethnic purity in schools legislation is not "borderline racism".  It's not "misconstrued only by activists" as racism.  It absolutely is goddamn racism, and Gov. Jan Brewer is absolutely a racist for signing it into law.
State schools chief Tom Horne, who has pushed the measure for years, said a Tucson school district program promotes "ethnic chauvinism" and racial resentment toward whites while segregating students by race.

"It's just like the old South, and it's long past time that we prohibited it," Horne said.

The measure prohibits classes that advocate ethnic solidarity, that are designed primarily for students of a particular race or that promote resentment toward a certain ethnic group. It also prohibits classes that promote the overthrow of the U.S. government.

The Tucson Unified School District program offers specialized courses in African-American, Mexican-American and Native-American studies that focus on history and literature and include information about the influence of a particular ethnic group.

For example, in the Mexican-American Studies program, an American history course explores the role of Hispanics in the Vietnam War, and a literature course emphasizes Latino authors.

Horne said he believes the Mexican-American studies program teaches Latino students that they are oppressed by white people. Public schools should not be encouraging students to resent a particular race, he said.

Brewer's signature on the bill comes less than a month after she signed the nation's toughest crackdown on illegal immigration – a move that ignited international backlash amid charges the measure would encourage racial profiling of Hispanics.

A Republican running for attorney general, Horne has been trying to restrict the program ever since he learned that Hispanic civil rights activist Dolores Huerta in 2006 told students that "Republicans hate Latinos."
So let me get this straight: a school district that offers ethnic studies classes to all students in the district is "segregation" and the classes themselves may lead to "resentment of a particular race" and you're afraid of the classes promoting "the overthrow of the U.S. government"?

Really?  It's something straight out of a movie or something.  "Sorry, you can't have classes devoted to the study of your ethnic culture.  You might come to resent the dominant culture or something.  We can't have that."  I don't understand why in 2010 anyone would have a problem with ethnic studies classes, but I guess if you're worried that the darkies are coming for your nubile daughters, you'd get a knee-jerk reaction.

So, hats off to you, Jan Brewer.  You're a reactionary racist of the first order, and that will be your lasting legacy as Governor.  Even the UN condemns your laws.
Six experts affiliated with the United Nations' Office of the High Commissioner for Human Rights released a scathing statement condemning Arizona's new immigration law as a likely violation of international human-rights accords.

The Arizona law permits authorities to demand immigration papers from anyone stopped, detained or arrested who sparks a "reasonable suspicion" of illegal entry into the United States. The UN statement suggests that provision could be in violation of global accords that are binding in the United States, such as the international convention on the Elimination of All Forms of Racial Discrimination and a separate convention on the Protection of the Rights of All Migrant Workers and Members of Their Families.

The experts also take aim at another law passed by the Arizona legislature that bans public schools from teaching ethnic studies curriculum. Their statement advises the U.S. government to "take all measures necessary to ensure that the immigration law is in line with international human-rights standards and to devise and carry out any mechanism to control migration with due regard of the rights of people to be free from discrimination and to have access to their cultural heritage."
Ethnic studies classes have been around for decades.  But only in a border state with a black president does it become a problem for white people, I see.

Racist.  Period.  You're a horrible person Jan Brewer, and I hope Arizona votes you out.

Gold Rush, Part 8

Well with the world's currencies going to crap, gold is back big time.
Gold surged to a record high on Wednesday as investors sought safety from the risk of Greece's debt crisis spreading to other countries, with demand for coins, bars and bullion-backed exchange-traded funds all climbing.

Spot gold hit $1,244.45 an ounce, a gain of nearly 20 percent since early February. It was last bid at around $1,238 an ounce from $1,232.05 late in New York on Tuesday.

U.S. gold futures hit a record $1,245.40 an ounce. 
And that's only going to get worse.  The dollar's shot, now the euro's shot, and even better, that mean oil's going to go up too, watch.

An Old Friend Is Back

It's our old buddy the LIBOR, and he's getting bigger and bigger as the Greek Fire is causing the rates at which banks loan to one another to go up as the credit squeeze of 2009 is looking to make a comeback in 2010.
The rate banks pay for three-month loans in dollars rose to the highest in almost nine months as Europe’s near-$1 trillion support plan in the wake of Greece’s budget crisis failed to encourage banks to step up lending.

The London interbank offered rate, or Libor, for such loans rose to 0.43 percent today from 0.423 percent yesterday, the most since Aug. 17, according to data from the British Bankers’ Association.

The European bailout has prevented Libor from jumping even further, said Christoph Rieger, co-head of fixed-income strategy at Commerzbank AG in Frankfurt, though it has failed to fully offset concern that Europe’s sovereign-debt crisis is hurting the quality of loan collateral. Libor rises when banks become more hesitant to lend to potentially risky counterparties.

“The EU’s package has kept rates from spiralling out of control,” Rieger said by phone. “The EU package has put a cap on the rate rise, but there’s no pressure on rates to go lower. There were some European banks who were finding it more difficult” to obtain dollar funding, he said.
It's deja vu all over again, folks.  Keep a careful eye on that LIBOR number.  Anything above a full percentage point means bad, bad news ahead.  Granted, it may take a while for it to happen...but it's not looking good for the economic road ahead.

Dear America:

"There may actually be something to this whole global depression thing caused by tax cuts and deregulated banks gone wild, so what we need to do is consider cutting taxes and loosening regulations on banks in order to help the economy.  Also, austerity measures for the little people sounds grand here.  We should do that."

--Robert Samuelson, Real Clear Politics

Bonus Verbatim Stupid: "Comparisons with the Great Depression remain relevant -- and unsettling. Now, as then, we may be prisoners of deep and poorly understood changes to the world economic system."

They're only poorly understood if you refused to pay attention for the last two years, sure.

Zandar's Other Thought Of The Day

OK, this "cutting spending while in a deep recession" thing is getting a little out of hand, guys.
After some of the most volatile coalition talks in the UK’s history, Conservative leader David Cameron finally made the short trip to Buckingham Palace to tell Her Majesty that he had formed an alliance with Nick Clegg’s Liberal Democrats that would allow him to form the next government.

But Cameron could be forgiven for asking himself Wednesday morning what he has let himself into.

Cutting the deficit is the big challenge. In 50 days we will have this government’s emergency budget, at which Cameron and his chancellor George Osborne will have to outline a credible plan to rein in spending.

Already we know 6 billion pounds ($8.9 billion) will be cut from the budget this year, but with the budget deficit running at more than 160 billion pounds, far bigger cuts will be needed to appease the market over the course of this parliament. 

Cameron has agreed to attempt to take people earning less than 10,000 pounds a year out of the tax system and scarped plans to raise the inheritance tax threshold to 1 million pounds, in return for the Liberal Democrats dropping plans for a “mansion tax” on houses worth more than 2 million pounds.

More details will come soon, but the scale of the cuts will need to be huge, with many predicting Cameron has to make bigger cuts in spending than even Margaret Thatcher dared. 

Given Cameron has pledged not to cut spending on the National Health Service (although Clegg sees huge waste in the system), it will be interesting to see which departments will see their spending power drastically cut. 
Let me know how that works out for you there, Cameron.

[UPDATE]  And if you don't think austerity measures are coming here, they're about to affect one in seven Americans in a state called California.
Schwarzenegger and legislative Republicans have vowed to oppose new taxes and want to rely on spending cuts to balance the budget. Democrats believe that slashing social services would hurt the poor and unemployed and cost California billions in federal matching dollars.

"The most likely outcome is a stalemate," said J.B. Mitchell, a UCLA professor emeritus of public policy and management. "The magnitude of the problem is large and they have to make some pretty drastic cuts. One way or another, it's going to be a painful episode. It's hard for me to see how you get a two-thirds vote for a tax increase in a gubernatorial (election) year."

GOP members who voted for tax hikes last year suffered political consequences, from loss of leadership positions to recall threats.

"Taxes are off the table," said Assembly Republican leader Martin Garrick, R-Solana Beach. "We don't need new taxes on families, senior citizens or businesses in California. It's time to reduce the size of government."

Senate President Pro Tem Darrell Steinberg, D-Sacramento, has acknowledged the difficulty of getting Republican votes for taxes this year. In recent weeks, he has proposed suspending corporate tax breaks. He said Californians must decide whether schools and public safety are worth paying for.
And of course, the answer will be no.  And with that, the state will most likely cease to function.  Remember folks, the GOP wants to take California's austerity measures national and dismantle as many government programs as possible.  Can't pay for the free market alternative to public safety and basic infrastructure?  Too bad. 

Gotta love how Republicans believe in fierce Social Darwinism to eliminate undesirables, but don't believe in evolution.

Another Milepost On The Road To Oblivion

When you feel the need to take out a campaign ad to fight a lie the opposition is spreading about you, that's one thing.  Not responding to a campaign smear is a calculated risk, but so is responding to one.  But when you take out a campaign ad to fight the "smear" that you believe in evolution, there's something just a bit wrong.
In Alabama, a state PAC recently went on the air with an ad attacking one of the Republican gubernatorial candidates for supporting the teaching of evolution in schools and for saying that parts of the Bible aren't true.

The candidate, Bradley Byrne, responded with a lengthy press release vehemently defending his belief in creationism and the infallible truth of the Bible.

"As a Christian and as a public servant, I have never wavered in my belief that this world and everything in it is a masterpiece created by the hands of God," Byrne wrote. "As a member of the Alabama Board of Education, the record clearly shows that I fought to ensure the teaching of creationism in our school text books. Those who attack me have distorted, twisted and misrepresented my comments and are spewing utter lies to the people of this state."

He went on: "I believe the Bible is the Word of God and that every single word of it is true ... My faith is at the center of my life and my belief in Jesus Christ as my personal savior and Lord guides my every action." 
No really, he said that.

Do you really want to be the governor of a state where rejecting evolution is considered a vital part of the constituency?  I wouldn't.  (No offense, Matt Osborne.)

Zandar's Thought Of The Day

To recap, Spain's effective unemployment rate is 20%.  Spain's answer to fixing the problem?
Spain's Prime Minister Jose Luis Rodriguez Zapatero said Madrid would slash civil service pay by 5 percent this year, freeze it in 2011 and cut 13,000 public sector jobs this year in a drive to meet European Union deficit targets.
Cutting pay and jobs in a deep recession, hmm.  That's never been tried before...

Let me know how that works out for you, Zapatero.

Kaganology 104

Greg Sargent dissects the GOP hypocrisy on Elena Kagan's lack of judicial experience meaning she's not qualified for SCOTUS by bringing up the same Senators falling all over themselves to initially defend Harriet Miers.
The argument from Republicans that Elena Kagan may lack the judicial experience to sit on the Supreme Court is getting tougher and tougher to sustain.

The problem is that too many Republicans failed to apply this standard to nominees they supported. Here, for instance, is what Sen. Richard Shelby told the Associated Press about highly inexperienced Bush nominee Harriet Miers in 2005 (via Nexis):
"It looks to me at first glance that Harriet Miers is qualified to be on the Supreme Court, but I really don't know her," Shelby said in an interview. "If you look back, about a third of the people that have served on the Supreme Court have never had previous judicial experience. Some of them have never even practiced law. I think we're entitled to know more than we know. But she could, if confirmed, make an outstanding justice on the court."
And here's what John McCain told the Akron Beacon Journal about Miers' lack of experience at the time (via Nexis):
''I think she's a great choice,'' McCain said. ''She's highly qualified.''
Separately, Sam Stein compared the resumes of Kagan and William Renquist before he ascended to the court, and concluded that the latter "would be considered something of a novice by the standards some are applying to Kagan." 
Try again, GOP.  Look, there are questions about Kagan, but her experience isn't the avenue of attack you want to use.  Grow up and ask some real questions about her, and do your jobs.

By The Time I Get To Arizona, Part 4

The immigration law backlash against Arizona's tourism industry is getting so bad that bond rating agency Moody's says it may soon have to lower the state's credit rating.
Nineteen conferences have been canceled so far in Arizona as a result of the legislation adopted last month, according to a Moody’s Investors Service report Monday. The desertion — with threats of more to come on the horizon — casts a cloud over the state’s bond rating, according to the Moody’s outlook reported by Bloomberg News.

Arizona was among the states hit hardest by the home-mortgage meltdown, and threats of travel boycotts have only darkened the state’s financial picture. Tourism spending produced $1 billion in state and local tax revenue for Arizona in 2008, Moody’s said.

“Preliminary response to the immigration legislation has already had some impact on the state’s tourism/travel sector,” Maria Coritsidis, a Moody’s analyst, wrote in this week’s report from the ratings company. “A serious weakening of this important sector, however, could have a negative impact on the state’s credit, as it could lead to further weakening of state finances that have already been negatively affected by the recession.”

The cancellations thus far will cost the state only about $6 million in revenue, Moody’s said, but critics of the new law are swinging for the fences. The National Council of La Raza has threatened to boycott Major League Baseball's 2011 All-Star Game, slated for Phoenix, and nearly 30 organizations have now joined the protest, CNN reported Tuesday. Some Congress members, including Sen. Robert Menendez (D-N.J.) and Jose Serrano (D-N.Y.), also have pushed for a boycott of the game.

"We've been very encouraged by the response," Clarissa Martinez, director of immigration and national campaigns for La Raza, told CNN.

Direct-travel spending in the Grand Canyon State is about $19 billion a year, according to CNN.

The Phoenix area alone could take a $90 million hit in lost tourism revenue, not including the all-star game, the New York Daily News reported. Four major events in the city have been canceled.

"We have an image and public relations problem of what might be unprecedented proportions," said Deputy City Manager David Krietor.
Does the phrase "Sow the wind, reap the whirlwind" mean anything to you, Arizona GOP?   It should.

Having said that, the argument is that the boycott is doing more damage to Arizona's poorest residents than anyone, and that's a legitimate argument.  On the other hand, Arizona wants to boycott the cities and businesses boycotting Arizona back, and wants FOX viewers to help.

We'll see who wins.


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