Ben Stein, a snarky, greedy old shill for Wall Street, posts something

I'm reserving judgment about the effectiveness of the Occupy Wall Street protestors' methods, but not their decision to protest, or the selection of their target -- they're right on.

Nevertheless this smug little missive from droning Hollywood nerd Ben Stein rubbed me the wrong way, and really illustrated several common fallacies:

1) "Greed is human nature." (Thus it's unavoidable, thus it's OK.) Look, human nature covers absolutely everything that any human being has ever done. It's also human nature for humans to give away millions of dollars, to volunteer for worthy causes, to sacrifice their own life and limbs, etc. The human nature argument thus is a throw-away unless you can prove the opposite isn't also true.

2) "Wall Street was stupid (not just greedy)." This one really gets me. Sometimes it's used by bailout proponents who argue that Wall Street wasn't greedy at all, just dopey. (And their stupidity is supposed to make us feel better about handing them all that bailout cash how??) Yeah, right. I'm sure Hank Paulson, Larry Summers, and Bob Rubin think of themselves as dufuses who messed up real bad -- and they're gonna confess to their stupidity any day now.

Anyway, let me get this straight: we had to bail out the banks because they were so stupid, yet homeowners who bought the line from mortgage bankers and realtors that home prices only go up forever were stupid therefore they need to "learn their lesson" and "take their medicine"?? Indeed help for normal people, not just banks, is one of the protesters' demands, and this demand seems to have been intentionally dismissed by our politicians because it might interfere with the blessed bank bailouts.

3) "Conventional wisdom = liberalism = whatever the status quo is." This makes no sense. The status quo is that Wall Street banks are enjoying trillion-dollar bailouts to fund their huge salaries and bonuses while normal Americans continue sink into debt and poverty and can't drive our consumption-driven economy back to health. And it's supported by both parties, not just Democrats. This is the outcome which "conventional wisdom" in America has supported, from Obama to Boehner to the editorial pages of all the major newspapers. So let's not confuse the status quo with liberalism, certainly not with progressive politics. Progressives never supported the bailouts; and they have always called for bigger fiscal stimulus, real mortgage relief for homeowners and Main Street businesses, and prosecution of Wall St.'s fraud and financial crimes -- to no avail.

4) "Young protesters want government to take care of them, like Mommy and Daddy do." Really? Are you sure that's what they're out there demanding? I never heard that. Since when do Americans not want to work, especially those who spent 4+ years in college studying and taking out debt in the hopes of landing a job to pay it back? If this is what's really going on, then America is sick indeed. But I don't buy it. You'll have to prove this one to me, because that's not the America I know, or any of the Americans whom I know. 99% of Americans wants a good job and the independence, gratification, and social acceptance that comes with it.

5) "Some on Wall Street are crooks and some are fools." Stop right there. Last time I checked, crooks are supposed to be arrested and get fined and/or go to jail. How many bank CEOs have gone to prison or faced any prosecution for causing the financial crisis? [Crickets chirping]. That's right. And what about the potential hundreds of billions of dollars in settlements to benefit ordinary people who were fleeced by Wall St., settlements that may be pre-emptively shelved without due process or any kind of vote due to political pressure by a bipartisan consensus including President Obama himself?

6) "Shut up and get to work." Who says they're not working now? They're out there defending all of us! We should be thanking them. And the hard-working Tea Parties should be out there with them. --> By the way, last time I checked Herman Cain wasn't working either. Get a job, deadbeat!

Go Occupy Yourselves, My Darlings

By Ben Stein

October 7, 2011 | American Spectator

[...]

On the radio, they played a story about the demonstrators on Wall Street demonstrating –literally -- against human nature -- greed and stupidity. Literally. Many of them were -- so we were told --recent college graduates who could not get employment.

Various leftists came on and said how cruel Wall Street was and how they should be blamed for those poor unemployed college kids' problems.

Then came Herman Cain. He said, very simply, "If you are a college graduate and you can't get a job, you shouldn't blame Wall Street. You shouldn't blame the banks. You should blame yourself."

A Daniel come to judgment. The sun suddenly came out.

The next step, I am sure, by the way, for the "Occupy Wall Street" crowd is for Anderson Cooper, Bill Maher, and Jon Stewart, the trifecta of conventional wisdom's failed liberalism, to come down to Wall Street and join the masses in demanding more of our tax money so they can all be supported as novelists and movie directors.

You poor kids. You are basically asking to be supported and taken care of by Mommy and Daddy. Wake up, kids. Wall Street is you, with all of your wants and needs and wishes, only they have the balls to go out and work for it. Sometimes they are crooks and sometimes they are fools -- but you know what? So are all of us.

Listen to Mr. Cain. Shut up and get to work.

Stiglitz: Spend, spend, spend

Spend, Spend, Spend

There is only one way out of the global recession, and government must lead the way.

By Joseph E. Stiglitz

October 3, 2011 | Slate

As the economic slump that began in 2007 continues, the question persists: Why? Unless we have a better understanding of the causes of the crisis, we can't implement an effective recovery strategy. So far, we have neither.

We were told that this was a financial crisis, so governments on both sides of the Atlantic focused on the banks. Stimulus programs were sold as being a temporary palliative, needed to bridge the gap until the financial sector recovered and private lending resumed. But, while bank profitability and bonuses have returned, lending has not recovered, despite record-low long- and short-term interest rates.

The banks claim that lending remains constrained by a shortage of creditworthy borrowers. And key data indicate that they are at least partly right. After all, large enterprises are sitting on a few trillion dollars in cash, so money is not what is holding them back from investing and hiring. Some (perhaps many) small businesses are, however, in a very different position: Strapped for funds, they can't grow, and many are being forced to contract.

Still, overall, business investment—excluding construction—has returned to 10 percent of GDP (from 10.6 percent before the crisis). With so much excess capacity in real estate, confidence will not recover to its pre-crisis levels anytime soon, regardless of what is done to the banking sector. The financial sector's inexcusable recklessness, given free rein by mindless deregulation, was the obvious precipitating factor of the crisis. The legacy of excess real-estate capacity and over-leveraged households makes recovery all the more difficult.

But the economy was very sick before the crisis; the housing bubble merely papered over its weaknesses. Without bubble-supported consumption, there would have been a massive shortfall in aggregate demand. Instead, the personal savings rate plunged to 1 percent, and the bottom 80 percent of Americans were spending, every year, roughly 110 percent of their income. Even if the financial sector were fully repaired, and even if these profligate Americans hadn't learned a lesson about the importance of saving, their consumption would be limited to 100 percent of their income. So anyone who talks about the consumer "coming back"—even after deleveraging—is living in a fantasy world.

Fixing the financial sector was necessary, but far from sufficient, for economic recovery. To understand what needs to be done, we have to understand the economy's problems before the crisis hit.

First, America and the world were victims of their own success. Rapid productivity increases in manufacturing had outpaced growth in demand, which meant that manufacturing employment decreased. Labor had to shift to services. The problems are not dissimilar to those of the early 20^th century, when rapid productivity growth in agriculture forced labor to move from rural areas to urban manufacturing centers. With a decline in farm income in excess of 50 percent from 1929 to 1932, one might have anticipated massive migration. But workers were "trapped" in the rural sector: They didn't have the resources to move, and their declining incomes so weakened aggregate demand that urban/manufacturing unemployment soared.

For America and Europe, the need for labor to move out of manufacturing is compounded by shifting comparative advantage: Not only is the total number of manufacturing jobs limited globally, but a smaller share of those jobs will be local.

Globalization has been one, but only one, of the factors contributing to the second key problem: growing inequality. Shifting income from those who would spend it to those who won't lowers aggregate demand. By the same token, soaring energy prices shifted purchasing power from the United States and Europe to oil exporters, who, recognizing the volatility of energy prices, rightly saved much of this income.

The final problem contributing to weakness in global aggregate demand was emerging markets' massive buildup of foreign-exchange reserves—partly motivated by the mismanagement of the 1997-98 East Asia crisis by the International Monetary Fund and the U.S. Treasury. Countries recognized that without reserves, they risked losing their economic sovereignty. Many said, "Never again." But, while the buildup of reserves—currently around $7.6 trillion in emerging and developing economies—protected them, money going into reserves was money not spent.

Where are we today in addressing these underlying problems? To take the last one first, those countries that built up large reserves were able to weather the economic crisis better, so the incentive to accumulate reserves is even stronger.

Similarly, while bankers have regained their bonuses, workers are seeing their wages eroded and their hours diminished, further widening the income gap. Moreover, the United States has not shaken off its dependence on oil. With oil prices back above $100 a barrel this summer (and still high), money is once again being transferred to the oil-exporting countries. And the structural transformation of the advanced economies, implied by the need to move labor out of traditional manufacturing branches, is occurring very slowly.

Government plays a central role in financing the services that people want, such as education and health care. And government-financed education and training, in particular, will be critical in restoring competitiveness in Europe and the United States. But both have chosen fiscal austerity, all but ensuring that their economies' transitions will be slow.

The prescription for what ails the global economy follows directly from the diagnosis: strong government expenditures, aimed at facilitating restructuring, promoting energy conservation, and reducing inequality, and a reform of the global financial system that creates an alternative to the buildup of reserves. Eventually, the world's leaders, and the voters who elect them, will come to recognize this. As growth prospects continue to weaken, they will have no choice. But how much pain will we have to bear in the meantime?

This article is also available at Project Syndicate.

Facebook = Big Brother

Boy, am I happy I deleted my Facebook account last week.

Try finding me now, Zucker!

Facebook changes touch privacy nerve

By Byron Acohido

October 1, 2011 | USA TODAY

URL: http://usat.ly/q9OsSC

Krugman: GOP economic doctrine 'divorced from reality'

I'm late posting this but it's still current.  I don't kid myself that this will change anybody's mind.  But I do challenge those who disagree to put some statistics or even survey results about "business mood" behind their claims that "taxes and regulation" are what's holding our economy back.  

Phony Fear Factor

By Paul Krugman

September 29, 2011 | New York Times

The good news: After spending a year and a half talking about deficits, deficits, deficits when we should have been talking about jobs, job, jobs we're finally back to discussing the right issue.

The bad news: Republicans, aided and abetted by many conservative policy intellectuals, are fixated on a view about what's blocking job creation that fits their prejudices and serves the interests of their wealthy backers, but bears no relationship to reality.

Listen to just about any speech by a Republican presidential hopeful, and you'll hear assertions that the Obama administration is responsible for weak job growth. How so?  The answer, repeated again and again, is that businesses are afraid to expand and create jobs because they fear costly regulations and higher taxes.  Nor are politicians the only people saying this. Conservative economists repeat the claim in op-ed articles, and Federal Reserve officials repeat it to justify their opposition to even modest efforts to aid the economy.

The first thing you need to know, then, is that there's no evidence supporting this claim and a lot of evidence showing that it's false.

The starting point for many claims that antibusiness policies are hurting the economy is the assertion that the sluggishness of the economy's recovery from recession is unprecedented. But, as a new paper by Lawrence Mishel of the Economic Policy Institute documents at length, this is just not true. Extended periods of "jobless recovery" after recessions have been the rule for the past two decades. Indeed, private-sector job growth since the 2007-2009 recession has been better than it was after the 2001 recession.

[It's just that the 7 million jobs lost from 2007-2009 has been a much bigger hole to dig out of!  - J]

We might add that major financial crises are almost always followed by a period of slow growth, and U.S. experience is more or less what you should have expected given the severity of the 2008 shock.

Still, isn't there something odd about the fact that businesses are making large profits and sitting on a lot of cash but aren't spending that cash to expand capacity and employment? No.

After all, why should businesses expand when they're not using the capacity they already have? The bursting of the housing bubble and the overhang of household debt have left consumer spending depressed and many businesses with more capacity than they need and no reason to add more. Business investment always responds strongly to the state of the economy, and given how weak our economy remains you shouldn't be surprised if investment remains low. If anything, business spending has been stronger than one might have predicted given slow growth and high unemployment.

But aren't business people complaining about the burden of taxes and regulations? Yes, but no more than usual. Mr. Mishel points out that the National Federation of Independent Business has been surveying small businesses for almost 40 years, asking them to name their most important problem. Taxes and regulations always rank high on the list, but what stands out now is a surge in the number of businesses citing poor sales — which strongly suggests that lack of demand, not fear of government, is holding business back.

So Republican assertions about what ails the economy are pure fantasy, at odds with all the evidence. Should we be surprised?

At one level, of course not. Politicians who always cater to wealthy business interests say that economic recovery requires catering to wealthy business interests. Who could have imagined it?

Yet it seems to me that there is something different about the current state of economic discussion. Political parties have often coalesced around dubious economic ideas — remember the Laffer curve? — but I can't think of a time when a party's economic doctrine has been so completely divorced from reality. And I'm also struck by the extent to which Republican-leaning economists — who have to know better — have been willing to lend their credibility to the party's official delusions.

Partly, no doubt, this reflects the party's broader slide into its own insular intellectual universe. Large segments of the G.O.P. reject climate science and even the theory of evolution, so why expect evidence to matter for the party's economic views?

And it also, of course, reflects the political need of the right to make everything bad in America President Obama's fault.  Never mind the fact that the housing bubble, the debt explosion and the financial crisis took place on the watch of a conservative, free-market-praising president; it's that Democrat in the White House now who gets the blame.

But good politics can be very bad policy. The truth is that we're in this mess because we had too little regulation, not too much. And now one of our two major parties is determined to double down on the mistakes that caused the disaster.

Consumer debt, not federal debt, is the crisis

The real debt problem in the U.S. is private household debt. U.S. federal debt by historical standards is still manageable and not in a crisis; it's not holding the economy back; although long term it must be faced. Right now consumer/household debt -- which is still at 154 percent of wages and salaries -- is the crisis. Until Americans clean up their personal balance sheets and start spending again, all kinds of businesses which depend on them for sales won't start increasing capacity or hiring again.

Without some gov't policies to induce home mortgage modifications, speeding foreclosures, and debt write-offs, the de-leveraging process will take several years, perhaps a decade, of needlessly low economic output, which will in turn cause lower tax receipts and more strain on the federal budget than necessary.

This is pretty basic economics and yet it is such a sore political topic, which forces me to conclude that that many Americans are willfully ignorant about it. Also, I think there is some deep-seeded American moralism at play here: many believe we should "take our medicine" and suffer for our mistakes, even if that suffering is needless and the "innocent" suffer, too.

If you want a more detailed explanation then read this analysis by Henry Blodget of Business Insider: HERE'S WHAT'S WRONG WITH THE ECONOMY... (And How To Fix It): We must "reduce the debt that is crippling the productive part of the economy:" consumer debt.

Economists: Consumers won't save the economy

By Karina Frayter

October 2, 2011 | CNBC.com

URL: http://usat.ly/nEov30