CapitalistImperialistPig

Tyler Cowen wonders why Obama fired Rick Wagoner, and offers a pair of tendentious theories: Theory 1: President Obama replaced Wagoner with Fritz Henderson as CEO of General Motors because he is convinced that Henderson will be a better corporate leader. Theory 2: President Obama replaced Wagoner with Fritz Henderson as CEO because the A.I.G. public relations debacle taught him not to appear "soft" with corporate leaders receiving government money. Which theory do you vote for? Which principles do you think should be governing the disposition of leadership in major U.S. corporations? There are more things in heaven and earth, Professor Cowen, Than are dreamt of in your philosophy. The principal reason for firing someone ought to be failure to carry out their duties. Wagoner had come to the country, asking to be bailed out with taxpayer dollars. The government gave him some money (many billions!) on the condition that he come up with a plan to restructure GM that would retur...

John of Cosmic Variance posts on Freeman Dyson and climate, and he even got to talk to Dyson in person recently. His believes in AGW, sorta believes the models, and thinks that the consequences might be pretty bad, at least for some (though I think his central valley home is safe from sea level rise for a few generations, at least). He also thinks that the chances for successful action to prevent it are remote. Sean naturally disagrees, and a very slightly disguised (because banned) Lubosh agrees. My own thinking is pretty similar. I don't see the political will anywhere to take serious action against carbon emissions, especially in the three countries that matter most - China, India, and the US. Nor do I see any clear technological path from here to there - but I would be happy to be persuaded if anyone sees one. All we need to give up is eating meat, driving cars, suburbs, electrical and electronic devices, having children, and travel. Either that, or find the magic energy ...

I caught the Timolator on ABC's This Week , and he did a pretty good job of defending himself and the administration. I certainly wish the guy asking the questions had been Paul Krugman instead of George S., but oh well. Meanwhile, Brad Delong weighs in with a good defense: Tim Geithner Is Not a Tool of Wall Street (Brad DeLong quoting Ed Luce quoting Brad DeLong) Nor, says Mr DeLong, is it fair to paint Mr Geithner as a creature of Wall Street. “Hank Paulson is a man who grew up in American finance and cannot imagine a world in which America does well and its financial sector does badly,” he says. “Tim Geithner, by contrast, is a bureaucrat and a policymaker. He has never pulled down a multibillion-dollar bonus. They are not the same type of people.” He meant multi-million dollar bonus. It's certainly fair to claim that Tim G. is not a creature of Wall Street like Paulson, Corzine, or Bob Rubin, but he has spent a lot of time working in its neighborhood. Geithner did make t...

Nicholas Dawidoff has written a long profile of Freeman Dyson in the New York Times magazine. The profile takes a broad look at his life but focuses on his skepticism about the threat of global warming. So far as I can tell, he doesn't doubt the greenhouse effect, or the fact of global warming, but mostly doubts that it is worth much trouble to prevent global warming. In particular, he thinks that James Hansen and colleagues pay too much attention to their models, and mistake them for reality. It’s a nice piece, even if it tells the famous Feynman/Dyson bordello sink story in the lamest fashion possible. Dyson made his reputation sixty years ago with his work on the foundations of quantum electrodynamics, showing, among other things, that the rather different appearing approaches of Feynman, Schwinger, and Tomonaga were equivalent. At that point, he already had a slot at the institute for advanced study, and he didn't even bother with the formalities of collecting his PhD. He ...

It's fun to see how bad bad writing can be, this promised to go to the limit. ...................Joe Gillis in Sunset Boulevard There is a certain awful fascination to reading Gerlich and Tscheuschner. One hundred fifteen pages of incoherent nonesense. An example from their attempts to disprove greenhouse effect claims: In his popular textbook on meteorology Moller claims: In a real glass house (with no additional heating, i.e. no greenhouse) the window panes are transparent to sunshine, but opaque to terrestrial radiation. The heat exchange must take place through heat conduction within the glass, which requires a certain temperature gradient. Then the colder boundary surface of the window pane can emit heat. In case of the atmosphere water vapor and clouds play the role of the glass." Disproof: The existence of the greenhouse effect is considered as a necessary condition for thermal conductivity. This is a physical nonsense. Furthermore it is implied that the spectral tra...

Eli Rabett , who clearly has a masochistic streak, has undertaken the task of cleaning the Augean Stables of Gerlich and Tscheuschner , which some moronic editor has actually published. Among other nutjobbery, G & T claim that a greenhouse effect - any greenhouse effect - is incompatible with the second law of thermodynamics. If true (and of course it isn't) this would be bad for the second law, since greenhouse effects obviously exist and are huge in the case, for example, of Venus. I know that guys like Bill Gray and Lindzen are not quite stupid enough to buy this crap, so why doesn't it bother them to be on the same ship of fools? The legions of denial are not small, but they certainly believe a whole lot of very ridiculous and mutually contradictory things. I guess the guys who think they are victims of a conspiracy aren't bothered by the fact that most their travelling companions happen to be nuts, even by their standards. And Eli - you might need a bigger spoon...

Arbitrage is what the Masters of the Universe think they know how to do, and Geithner's subsidies give them a big opportunity. Tyler Cowen notices what Hilzoy noticed the other day, and puts in some more detail. The scope for cheating could be enormous, and by his calculation, half a trillion dollars could be at stake. With that big an incentive to swindle, does anybody think Wall Street won't be able to figure out how to do it, regardless of the precautions taken? No wonder the market loved Timmy's plan. Way past time for the Timolator to go. Maybe he and Larry can get a shout show on CNFox or something.

You know you're in trouble when the supposed authorities start using the word "legacy" where everybody else uses "toxic." I guess Larry Summers thinks that if he just slaps enough lipstick on one more pig...

Josh Marshall plays the interview. Takeaways: they are in denial, the people at the table are the ones who created the problem.

Hilzoy finds yet another reason to think the Summers-Geithner plan is a bad idea. It would subsidize certain plausible conflicts of interest aimed at looting the treasury. Congress and Obama should be very slow to experiment with this.

How do you say "Heil Hitler!" in Hebrew?" The trouble with Moral Clarity is that it hardly ever is either clear or moral.

Obama's economic team has a plan: go into partnership with a bunch of hedge funds who will to go to Vegas and make some bets. I think it may work a little like this: if the bets make money, the government makes its share of the profits, whereas if they lose, the losses come out of the government's share first. Heads we both win, tails, the taxpayer takes the loss. Sounds like a good plan, Larry and Timmy. What could possibly go wrong? Could there be anything in it that might lead those hedge funds into making some unreasonably risky bets? Brad DeLong has a defense and a FAQ. DeLong likes it, but on the central question his answer is deeply dishonest: Q: What if markets never recover, the assets are not fundamentally undervalued, and even when held to maturity the government doesn't make back its money? A: Then we have worse things to worry about than government losses on TARP-program money--for we are then in a world in which the only things that have value are bottled wat...

Why does the luminiferous ether get so little respect? What is quantum electrodynamics but the theory of a Lorentz invariant, quantized ether?

Hoaxes and Conspiracies in Science A living science is constantly changing as new facts and theories enrich it. As a consequence, if you look back at earlier times it's easy to find examples of most or all scientists of the day believing things that we no longer think are true. The late movie producer and science fiction writer Michael Crichton exploited this phenomenon to come up with his theory of "consensus science." Briefly, this theory can be summarized: (A) In cases 1, 2 and 3 most scientists believed X, but (B) X was false and Y was true, and (C) (by implication) If there is a consensus among scientists, it is probably wrong. One doesn't need a PhD in logic to see the flaw in that one. I was looking over some of the stuff presented at the Heartland Institute's anti-climate science conference, and some other papers by a couple of prominent attendees. The attendees all agreed that anthropogenic global warming was a myth and a hoax, but they had quite a var...

A strong circumstantial case appears to be building that Larry Summers and Tim Geithner pushed Chris Dodd to take anti-bonus language out of the TARP bill. If so, Obama has only a short window to fire them, or risk much of his program. Will he dare to pull the trigger? Meanwhile, Bernanke is cranking the printing presses up into high gear. Where have they tried that before?

Anger at injustice is a fundamental ingredient of civilization and probably of human society generally. It likely predates law and is a primary motivator for it. The manifest injustice of paying huge bonuses to the very people with proximate responsibility for bringing down the international financial system in general, and AIG in particular, has stirred a storm that threatens to capsize Obama's economic plan. At the same time, I can't quite escape the suspicion that the whole bonuses dustup is a smokescreen to distract us from the larger scale injustice of who winds up with the big bucks that the US pumped into AIG - Goldman Sachs, et. al., their primary co-conspirators. Maybe the whole deal was to pump up the bonuses scandal, publically sacrifice the AIG employees in question, and hope nobody notices about the other 170 billion dollars. The sight of Bernanke and others publically wringing their hands about the injustice of handing over taxpayer bucks to the undeserving and ...

Most religions with nature gods give pride of place to the sun and moon. For the most part both follow a very regular schedule in their behavior, but there is one prominent exception - eclipses. The key to explaining eclipses was the discovery by the ancients of the lunar nodes - the points where the line of intersection of the planes of the ecliptic (the Sun's apparent path through the sky) and the orbital plane of the moon intercept the sky. Eclipses only occur when Sun, Moon, and node are all aligned. These ancient astronomers didn't know that the Earth went around the Sun, or even that it was round, but they had discovered that there were these mysterious antipodal spots that moved around the sky and had power over Moon and Sun. Unlike Sun and Moon, though, they couldn't be seen. Some think that these unseen powers were the origin of the idea of an unseen god, which seemed to have power over even the mightiest of the other gods. The unseen, or at any rate, the not yet s...

Hanna Rosin's The Case Against Breast Feeding in the Atlantic doesn't stray from the facts in claiming that the benefits of breast feeding have been somewhat oversold - for infants in the advanced world. She seems to believe that the emphasis on breastfeeding infants is mostly an anti-feminist conspiracy. In the parts of the world without clean water and well-regulated baby food industries, infant diarrea and related intestinal infections are major killers - major killers that are greatly diminished by breastfeeding. Her article is likely to be pushed hard there by the formula peddlers. It might well kill more children than George Bush.

Larry Summers is a very bright guy who can't seem to open his mouth without saying something really stupid. Something so stupid that it threatens to destroy whatever enterprise he is engaged in. Here he is defending the AIG bonuses and incidentally trying to blow up the Obama Presidency: We are a country of law. There are contracts. The government cannot just abrogate contracts. This is bullshit, and Summers knows it. The government has plenty of power to abrogate contracts, most relevantly here in the bankruptcy laws. AIG is bankrupt, and the attempts to pretend it isn't are spreading anger and chaos throughout the economy. The public, which has already funnelled an immense fortune into AIG, is justifiably enraged. I don't think that Congress can or will be able to protect Obama's back on this one. If conventional bankruptcy is not adequate to handle the AIG case, Congress needs to pass new laws immediately. Rubin, Summers and Geithner are too deeply associated w...

I have an excellent memory, and always have had, for as long as I can recall. Unfortunately, I eventually started finding out that some of my most interesting memories never actually occurred. I blame the intertubes for revealing this oddity. Back in the old, old, days, before Tim Berners-Lee revealed the web, I used to post to some usenet groups. Naturally, everything I wrote in those days was exceptionally pithy and clever. It seems that somebody archived all those old posts, except for my cleverest ones, and that the ones they did archive were never quite so clever as my memories thereof. Worst of all, some of the deeds that I was the hero of, seemed to have turned into the doings of someone else. Anyway, did I ever tell you about the time I was trapped for a week in a snowbound railroad car with the entire U of BC cheerleading squad?

Even in the age of Reagan and the Bushes, the welfare system is alive and well. The principal beneficiaries of such government largess are not the "welfare queens" that Ronnie used to talk about though they were always conveniently black - but also purely fictitious. Nobody ever managed to exhibit one. The big welfare bucks went to white guys who already happened to be rich and politically connected. The American professional sports franchises classically epitomize this phenomena. Unlike professional sports franchises in most countries, ours are exempted from anti-trust laws and spend a hell of a lot of effort maintaining their monopolies. Because they are monopolies, team owners have a lot of leverage over their host cities - they can always threaten to take their ball and go fishing elsewhere. There are a dozen or so professional football (soccer) teams in London, but no American city has more than two NFL or professional baseball teams. This pays big time when it c...

American conservatism has been pretty much reduced to three issues: low taxes for the rich, gay marriage, and abortion. Only the last of these looks to me to have any moral traction. A favorite "trick question" for the right-to-life crowd is "when does life begin?" Strictly speaking, the question doesn't make sense. Life didn't begin any time recently. Everything alive today is descended in an unbroken chain of living cells from life that began more than three billion years ago. The point, however, is still a good one: when do human rights first attach to developing human life? Early pro-choice answers were quite absurd, for example the rather silly notion that a fetus was merely a disposable part of a woman's body, like a fingernail, until birth. The favorite answer of the pro-lifers, that the moment of conception is that point seems only slightly less ridiculous to me, but it makes a certain amount of sense in that that moment represents the distinct p...

I'm not as big a fan of the Cramer - Stewart sitdown as many seem to be. Jon Stewart is very funny and effective as satirist - but as a moralistic scold - not so much. For Stewart to criticize Cramer and CNBC for being unserious is - uh, silly.

From a galaxy, far, far, away: For example, Forbes writes The richest people in the world have gotten poorer, just like the rest of us. Like the rest of us: really? The reality is that most average people haven't been affected by the crisis at all. Aside from a few exceptions, it is only the rich people who suffer. Of course, this suffering is the billionaires' type of suffering, but relatively speaking, it is much more intense suffering than what any group of average people has experienced. Because having to shave ten meters or so off your planned 200 meter yacht is so much more painful than losing your job and having to live in your car. This proved a bit wack for all but the most crack besotted among the author's right wing sycophants, since many of them have to live in the real world.

Would Al Capone have gone to all that trouble if he had known how simple stealing a few billion could be?

Douthat - I think it's pronounced to rhyme with "da Hutt", as in "Jabba da Hutt" - is the new occupant of the NYT's second chair conservative op-ed column. He can hardly help but be an improvement on Kristol Meth. His Harvard undergrad scribblings are less than inspiring, but the content is more bothersome than the style. It seems that he didn't like Gays and other perverts, Asians, clannish and weird math-and-science types, the ill-informed and stupid American multitudes, and abortion, but he loved Cheney, Condi, Rumsfield[sic], Wolfowitz, and, slightly less fervently, Bush. His more recent writings would seem to indicate that he has subsequently become better at concealing the fact that he is an asshole - or, best case scenario - he might even have become less of an asshole.

The one conservative that I faithfully read is Andrew Sullivan. No conservative has been more disappointed in his political creed and yet remained faithful, but he continues to wrestle with the Devil. By comparison, David Brooks and George Will might occasionally twitch a bit in Satan's arms, but Bill Kristol is snuggled up to every cloven hoof or forked tail.

One problem for the Christian right is the testimony of one Jesus Christ, as recorded in the Gospels. Economic development in his time hadn't actually reached a stage when socialism could be usefully contemplated, but he was surely a passionate redistributionist. And he was pretty unequivocal in saying that the rich were damned. James Dobson and all you TV preachers - he was talking to you!

It's usually a poor idea to trust habitual liars .

[Twansmitted surreptitiously from his rubber room.] Brad DeLong exposes yet another example of the astounding ignorance of a professor at the most prestigious economics school in the country. Luigi Zingales tries to pass off Bush's spending as Keynesian: With zero personal saving and a large budget deficit the Bush administration has run one of the most aggressive Keynesian policies in history. Not only has adherence to Keynes's principles not averted the current economic disaster, it has greatly contributed to causing it. The Keynesian desire to manage aggregate demand, ignoring the long-run costs, pushed Alan Greenspan and Ben Bernanke to keep interest rates extremely low in 2002, fuelling excessive consumption by the household sector and excessive risk-taking by the financial sector. Most importantly, it has been the Keynesian training of our policy-makers that has led them to ignore the role that incentives play in economic decisions. You only need to know the smallest bi...

(Dr. P passed this post out through the slot in the door of the rubber room wherein he is currently resident - the neighbors) There is an old newspaper joke about the hazards of getting into an argument with someone who buys ink by the barrel. Jon Stewart updates this advice for Jim Cramer here . Joe Scarborough, come on down! You too can play!

Never forget that it was the policies of the sorry bastards at the Cato Institute, the Hoover Institution, the American Enterprise Institute, the Friedmanites, and the University of Chicago that led the economy to this sorry pass. Just like their 1920's counterparts Hoover and Mellon they relentlessly promoted the power of the oligarchy over everyone else, but their inept economic analysis again rose to bite them in the ass. These people want to destroy everything of value on the planet to support their market fantasies. Blame them, and don't let them escape without paying part of the penalty. Another post inspired by the rage of reading Free Lunch . [This time the part where Friedman and his buddies decided that parks and schools had to be abolished and sold - given - to the rich.] At least we can thank Bush for showing us where Friedman's vision leads us - a kleptocratic oligarchy ruling a planet of endless war and crime, with the rich huddled in gold encrusted squalor in...

It is one of the peculiarities of the human situation that sometimes, in some situations, we have to depend wholly or in part on other people's judgements. Doctors, politicians, preachers, scientists and a million others all seek to advise us to do this, believe that, or choose some side of a dispute. Ideally, we can check and understand most of the key evidence ourselves. Is there a benevolent God? All of us have lives littered with the evidence. Should I buy this something or other that somebody really, really wants to sell me? How much do we need it? Other cases are harder. Is bailing out the big banks who got us into this financial mess really necessary? Is anthropogenic global warming a big threat to our children and grandchildren? Is now a good time to invest in the stock market? Will a financial stimulus be likely to be worth the economic risks it entails? Will my future and our departments be better if we decide to hire this string theorist or that cosmologist? We can apply...

(Another in our Letters to Stupid World Series) About your characterization of the "Obama" bear market. Paul Krugman said this about something else but the shoe fits you too: Here’s mine: you’re looking at some building, and you hear the fire alarm go off, and smoke starts trickling out the windows. Then a lot of fire trucks and firemen arrive — and only after that do flames start shooting out the top of the building. Clearly, the fire department turned a small problem into a crisis I guess you must be angling for one of those Faux News gigs. Sincerely,

I recall some market religionist (economist) saying that having American car companies go under wouldn't be so bad - after all Toyota, Volkswagen, etc. now make cars in the US, and they aren't about to shut those down. Free Lunch has a tale for him. Back in the 90's, GM had developed a process for a radically improved magnet, a magnet that had critical technological and military uses. China wanted this technology, GM wanted access to the China market, and wanted to buy the GM subsidiary. Politically well connected bankers put together a deal, Clinton free trade fanatics pushed for approval, and concerns about national security were swept aside by including a proviso that China should keep the manufacturing facilities in the US. China next bought all the other magnet manufacturers and moved all production to China. The Bush administration was too distracted or too corrupt to object. Market fundamentalists are so blinded by their religion that they can't seem to grasp th...

No principle is more sacred to conservatives generally and the wingnotosphere in particular than the Capitalism destroying consequences of high marginal income tax rates. John Cole's (h/t Brad Delong, Steve Benen, and Matt Yglesias) chart of the top marginal income tax rate since 1920 shows this to be yet another notion that fails to survive its encounter with reality. In the real world, it seems that some of the lowest maximum marginal income tax rates occurred before the great depression and in Bush bubble world. Predictions of the economy destroying effects of tax increases proved false in the Clinton boom. I don't advocate 1960s level top rates, but the idea that the relatively tiny increases planned by Obama would destroy the economy are ridiculous.

I may have to read Atlas Shrugged in order to understand contemporary political discourse.

NBC's MTP and ABC's TW have senators on making sense!! Shelby and Graham want to nationalize now. Schumer says, look first, then nationalize. The other people on were pretty much idiots, of course, except for some guy whose name I can't pronounce or remember, and Erin Burnet.

There are many things to dislike about the ABC and NBC talking head shows (people named George, people named David, Newts and other pre-reptilian vertebrates) but one is not ideological. I mean those stupid round tables. It's bad enough having to look at the unnaturally tanned Stephanopoulis or the unnaturally pale Gregory, but why should I have to simultaneously look at the backs of four other people's heads?

I have been reading David Cay Johnston's book Free Lunch and it's a very difficult book to read - every few pages I find myself putting the book down in a rage. The American economy grew quite slowly from 1980 until 2005, but it did manage to increase the GDP per capita by 68%. Every penny of this increase, and more, went to the top 10% of money earners. The other 90% actually lost ground. Even among the top ten percent, a vastly disproportionate share went to the top 1%, and even more so to the top 0.1%. Almost all the money went to the rich, the very rich, and the super rich. Why so? Part of the reason is the changed tax structure. Ronald Reagan decreased taxes on the rich and dramatically increased them for the middle class. That theme is not at the core of this book however. The same forces which permitted Reagan to greatly alter the tax structure also led to a number of special privileges which funneled tax dollars into the pockets of the super rich. Modern electoral camp...

Of economics, that is. Earlier I mentioned Lee Smolin's recent paper on economics and gauge theory: http://arxiv.org/PS_cache/arxiv/pdf/0902/0902.4274v1.pdf At that time I was pretty skeptical, but having now read much of it, I have a different view. For one thing, he gives a nice introduction to General Equilbrium Theory in economics written in a fashion to be understandable to physicists. He also succinctly explains the underlying assumptions, the strengths of the model, and its weaknesses. The biggest strength is that it says that there is a locally Pareto efficient equilibrium. [Pareto efficient meaning no other nearby states are better for all participants in the market]. This is sometimes [mistakenly] cited to claim that classical economics shows that the market cannot be improved upon. Unfortunately, it is not clear that these equilibria are either unique or stable, and quite likely, they are neither. There could well be an entire landscape of unstable equilibria with...

Who is getting all those taxpayer dollars that are being flushed through AIG? Zachary Roth at TPM has some names (but the WSJ and NYT did the investigating). This Journal story from October 2008 names the following nine American and foreign banks as having bought swaps from AIG: Goldman Sachs; Merrill Lynch; UBS of Switzerland; Credit Agricole SA of France; Deutsche Bank of Germany; Barclays, and Royal Bank of Scotland Group, of Britain; and CIBC, and Bank of Montreal, of Canada. This is just about as bad as anyone could imagine [except it is pretty much what Cynthia has imagined, and said]. I don't think Geitner has much credibility left. This won't help.

Paul Krugman once again makes the case that it's time to lop off some zombie heads. Here’s how the pattern works: first, administration officials, usually speaking off the record, float a plan for rescuing the banks in the press. This trial balloon is quickly shot down by informed commentators. Then, a few weeks later, the administration floats a new plan. This plan is, however, just a thinly disguised version of the previous plan, a fact quickly realized by all concerned. And the cycle starts again. Why do officials keep offering plans that nobody else finds credible? Because somehow, top officials in the Obama administration and at the Federal Reserve have convinced themselves that troubled assets, often referred to these days as “toxic waste,” are really worth much more than anyone is actually willing to pay for them — and that if these assets were properly priced, all our troubles would go away. Obama clearly understands that the zombies are a - or the - problem, even if Geith...

Everybody is recommending it, but if you haven't seen it yet, watch John Stewart eviscerate CNBC. And feed the entrails to his cat.

Having exhausted all the usual refuges of scoundrels, the right wing talking heads have fallen back on screaming "Socialism" at anything they might not like at the moment. Consequently, I would just like to get this little dictionary definition on the record: so⋅cial⋅ism  –noun 1. a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole. 2. procedure or practice in accordance with this theory. Note that there is nothing in that definition about taxes, welfare, or any of the other bogeymen that haunt the dreams of wingnut wackos. In the United States and Western Europe, ownership of the means of production and distribution, capital and land is overwhelmingly in private hands. Every country assigns some services to the state, however: especially defense, police, money and taxation. Schools and major features of infrastructure like roads, ...

Tim Geithner gets to play the Jack Nicholson part here but you can be sure that he won't be getting any Academy Awards. Oddly enough, the American people would like to find out where AIG's almost $1000 per person is going, but Geithner et. al. really, really, don't want to tell us. So what are Obama, Summers and Geithner so afraid of? There is some speculation that it's because a lot of the money is going to Goldman Sachs, but I suspect that a more likely recipients are a whole raft of European banks. Maybe, just maybe, the American people would not be too happy to know that they were investing the price of a nice LCD HDTV (for each man, woman, and child) in propping up European banks that made some unsound investments. So why do Obama, Summers, and Geithner think it's necessary? the argument is that an AIG default would set in motion a chain reaction of bank failures that would bring the whole international economy down. There is a good chance that they are right....

A surprisingly large number of Obama adminstration candidates have turned out to have tax troubles. Does this reflect some kind of Obama attraction to tax cheats? That's not likely, but what it does reflect is the systematic gutting of the IRS's tax enforcement division at the hands of the anti-tax crowd. This mostly doesn't affect wage earners whose tax contributions are automatically withheld, but it has handed a lot of independent consultants and business men what they increasingly regard as a licence to steal. The Bush administration in particular systematically encouraged the development of klepto-capitalism in the US, from Enron to Bernie Madoff. Not only did they neglect regulation and enforcement, but they made a practice of punishing government employees who actually tried to enforce the laws. Just another way we will continue to suffer from electing these crooks. I suspect that the Bush equivalents of the tax dodgers weren't exposed because nobody was look...

Tyler Cowen notices that Lee Smolin is writing on Gauge Theory and Economics (arxiv:0902.A274v1) . It's hard to see that as a good sign.

At least before Murdoch bought it the Wall Street Journal was a pretty good paper - if you took the precaution of discarding the opinion pages. Paul Gigot and friends have written some pretty stupid editorials over the years, but this one is truly below and beyond. As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama's policies have become part of the economy's problem. How f****** stupid do they think we are? How stupid are the people who actually pay to read this? The stock market's recent collapse couldn't have something to do with the uniformly disastrous news that has come out in the past two months could it? That news consists nearly entirely of data measured before Obama beca...

Watching the parade of buffoons, nutbags, sacred fools, ordinary fools and child Buddhas at the CPAC makes it more than a little difficult to imagine how this bunch ruled the country for thirty years. They didn't, of course, or rather, they were just the schlock troops or comic relief for the real controllers - the moneyed oligarchy and the network of stink tanks they created and congressmen, editors, columnists, professors and preachers they had purchased. We ought to bear that in mind before we celebrate the buffoonery too heartily.

Now that the sub prime crisis has spread to practically every other kind of borrowing, Paul Krugman wants to know why , and thinks he has found the answer in the writing of then economics prof Ben Bernanke. The speech, titled “The Global Saving Glut and the U.S. Current Account Deficit,” offered a novel explanation for the rapid rise of the U.S. trade deficit in the early 21st century. The causes, argued Mr. Bernanke, lay not in America but in Asia. In the mid-1990s, he pointed out, the emerging economies of Asia had been major importers of capital, borrowing abroad to finance their development. But after the Asian financial crisis of 1997-98 (which seemed like a big deal at the time but looks trivial compared with what’s happening now), these countries began protecting themselves by amassing huge war chests of foreign assets, in effect exporting capital to the rest of the world. The result was a world awash in cheap money, looking for somewhere to go. Where it went was mostly to the U...

John Cole: This is a sputtering, rudderless, idea free movement. There is a reason the only thing they can do is yell “socialist” and attend tea parties (although given the turnout, it looks like they are just sticking to yelling socialist). ... This isn’t a movement anymore, it is the political equivalent of the bearded lady. Cole is also amused by the latest Republican sock-puppet, thirteen year old Johnathan Krohn

Brad DeLong: Shorter CPAC Conference... I'LL GET YOU, MY PRETTY!! AND YOUR LITTLE PORTUGUESE WATER DOG TOO!!