Yearly Archives: 2013
ObamaCare Staggers Toward the October 1 Finish Line (2)
By Lambert Strether of Corrente.
Perhaps this will be a useful metaphor to explain how ObamaCare really works:
Imagine you walk into a hospital seeking health care: Perhaps for something major, like heart failure, or something minor, like a broken arm. You sign in at the front desk and explain your situation to the nurse on duty. In response, they reach under the desk and pull out an extraordinary contraption: A combination, it seems, of a miniature steam engine, the Wheel of Fortune, a cuckoo-clock, and a football scoreboard. There’s a crank on the side of it, which the nurse, having rolled up their sleeves, turns vigorously with one arm, while feeding lumps of coal into the steam engine’s firebox with the other. Clutching your chest (or your arm) you notice two doors behind the desk. They have signs which read: Special Limited Facilities, and Service Grand Royale. The cranking stops: The steam engine emits three shrill whistles: The Wheel of Fortune judders to a halt at $500: you hear “Cuckoo, cuckoo”: and see (in lights) 42. The nurse notes these results, consults a large three-ring binder, and points you to the door marked Special Limited Facilities. Or perhaps it’s your lucky day, and Service Grand Royale is yours, all yours!
Read more...Gaius Publius: Deep State — Is the Upper Echelon of the Intelligence Community Running America?
Gaius focuses on the question of the degree to which the military-surveillance complex is already calling the shots in the US. While he uses the current sanitized formulation, “deep state,” I wish he and others in the opposition would use a more accurate, if perhaps less tidy, turn of phrase, like “slow motion military coup.”
Read more...Bill Black: Zero Prosecutions of Elite Banksters is Too Many for the Wall Street Journal
Yves here. Although Bill Black’s post starts with how the Republicans have linked their attacks on the IRS to a broad-brush effort to depict any and all government oversight as an evil plot to destroy the profitability of upstanding businesses, he includes how the Clinton-Gore “Reinvent Government” initiative set out to cripple the IRS, and how that has hurt enforcement generally. Readers may recall one example discussed regularly on this blog: how the IRS refused to penalize clear violations of REMIC (Real Estate Mortgage Investment Conduit) rules that resulted from the failure to convey borrower notes to securitization trusts as stipulated in the 1986 Tax Reform Act.
In general, as tax maven Lee Sheppard has pointed out, the US does little in the way of tax law enforcement. As if you believe in the broken glass theory of lawbreaking (that failing to prosecute minor violations of the law, like petty vandalism, broadcasts that policing is lax, which encourages more serious crimes), it’s not hard to see that having a barely-on-the-job IRS would tell the moneyed classes that they can push the envelope in other areas and probably get away with it there too.
Read more...Links 8/29/13
David Dayen: Regulatory Apparatus To Provide Full Employment For Chroniclers of Future Bailouts, as Useless Mortgage Origination Rules Introduced
There’s no way to possibly count the various ways in which Dodd-Frank rules have been watered down, even from their already waterlogged original intent. But we got another example of it yesterday, the product of a corrupt bargain between the mortgage industry and so-called “progressive” housing groups.
Read more...Wolf Richter: German Election Finally Gets Messy: “Euro Is More Than A Currency” And Greece “Shouldn’t Have Been Allowed In”
No debacle is allowed to interfere with Chancellor Angela Merkel’s efforts to hang on to her job, and any debacles get swept under the rug at least until after the elections on September 22. Every time uppity opposition voices stir up some controversy, it’s brushed off, denied, ridiculed, or minimized – and it has worked admirably well so far.
Even Edward Snowden’s revelations day after day in Der Spiegel – which had received copies of documents detailing German involvement in NSA spying activities, among other sins – were successfully shuffled off. Though the discussion continues to be heated, it is, like in the US, a bi-partisan debacle, compromising political figures from both sides. The scandal is spreading and festering, but apparently without political fallout.
Read more...Jayati Ghosh: None of the Experts Saw India’s Debt Bubble Coming. Sound Familiar?
So now India is the latest casualty among emerging economies. Over the past 10 days, the rupee has slid to its lowest-ever rate, and the Indian economy may well be on the verge of a full-blown currency crisis. In this febrile situation, it is open season for rumours and pessimistic predictions, which then become self-fulfilling.
This means that even if there is a slight market rally, investors quickly work themselves into even more gloom. Each hurriedly announced policy measure (raising duties on gold imports, some controls on capital outflows, liberalising rules for capital inflows and so on) has had the opposite of the desired effect. Everything the government does seems to be too little, too late – or even counterproductive.
Read more...David Dayen: Fast Food, Retail Worker Strikes Actually Honor King Legacy
The March on Washington’s 50th anniversary resulted in two commemorative events, including the one Saturday with comments by Eric Holder and Nancy Pelosi, and the one yesterday with a speech by President Obama. Needless to say this is a bit of an inversion of the original message of a March ON rather than WITH Washington. So I would say that the major tribute this week to the legacy of that march, a march for jobs and freedom, is actually today’s national retail worker strike for a higher wage, which takes what had been a one-off model and expanded it. Events are expected in 35 cities, maybe more. And where the initial events were just with fast-food workers at places like McDonald’s and Wendy’s, apparently workers at retailers like Macy’s are involved in some cities.
Read more...Links 8/28/13
David Dayen: Could the White House Want to Confirm Larry Summers With Republican Votes?
By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen If we’re to believe the thin sourcing from CNBC’s John Harwood, sometime in the next few weeks, Larry Summers will be announced as the nominee to become the next Federal Reserve chair. As I mentioned […]
Read more...J.D. Alt: Mobilization and Money
I’m nearly finished with a very long book that may well be the best illustration of the basic principles of Modern Money Theory available. The book is “A Call To Arms,” by Maury Klein. It is an historical account of the U.S. mobilization as it prepared for, and engaged in, war with Germany and Japan. The scale of the task was unprecedented in human history—and the accomplishment of it changed not just the structure of the American economy, but American society as well. What is striking about the story—and the monumental effort to quickly build, virtually from scratch, the largest and most sophisticated war machine ever to exist on the planet—is that there is nary a peep of concern or argument about how this enormous task would be paid for. All of the anguish and struggle had not to do with finding enough “money” to pay for things, but rather with finding enough things to buy—and enough skilled labor to properly marshal it all together. In the end, virtually every real resource available in the continental U.S.—oil, gas, steel, aluminum, rubber, copper, sugar, tin, and man-hours of labor—was purchased by the Federal government to build the Army, Navy, Air Force and Marine Corps that ultimately defeated the Axis powers. The scale of the sovereign spending is almost beyond comprehension—especially given the fact that, at the starting gate, the U.S. economy was still decimated and impoverished by the Great Depression. At the finish line, however—VJ day, September 2, 1945—the U.S. had become the most powerful, efficient, and equitable economic power the world had ever seen. So how did it all get paid for? And even more important, how did we travel from that VJ day of economic triumph to our sorry state of today, where we think we are so “broke” we can’t even afford to hire enough fire-fighters and equipment to put out the forest-fires raging in our western states?
Read more...Has the Shale Bubble Already Burst?
Just like the famous Gold Rushes of the 19th century, US shale gas development is turning out to be a limited and regional market opportunity. Across the Atlantic, the high financial and human costs to fracking also mean that Europe should forget any fantasies about repeating the US shale boom.
Many US shale companies that have been beating the drums of shale “revolution” are now facing oil and gas well depletion. In February 2013 the US Energy Information Administration (EIA) warned that “diminishing returns to scale and the depletion of high productivity sweet spots are expected to eventually slow the rate of growth in tight oil production”. It was a cautious but intriguing statement.
Read more...David Dayen: Administration Outside Review Group on NSA Includes Co-Designer of HAMP Peter Swire
The President announced his “outside experts” for reviewing NSA surveillance policies last week, and everyone had a chuckle about the fact that the “outside experts” are apparently only “outside” in the sense that they no longer work for the President. An outside group featuring former OIRA head, rumored judicial appointment, longtime Obama friend and husband of the current UN Ambassador Cass Sunstein isn’t very outside.
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