links for 2008-10-07

• Fundamentalists versus Realists - Paul Romer
• How Bad Has Job Growth Really Been Over the Last 8 Years? - Alan Krueger
• You need a bailout? - cartoon
• Falling house prices must be stabilised - Dean Baker
• MIT report debunks China energy myth - MIT News Office
• The Meltdown (Part I) - Robert Reich
• The Commanding Heights Revisited - Crooked Timber
• Productivity Growth in Manufacturing - Charles Evans - FRB Chicago
• The Duplicitous Sheila Bair - Felix Salmon
• Financial crisis may hasten European integration, slow global banking - Vox EU
• The Fed Moves Again -- And Here's What It Means - Real Time Economics
• An open letter to Canada’s federal political parties - Stephen Gordon
• Brand Expert Scores Obama v. McCain 7 Ways - CityEconomist
• Richmond Fed's Lacker: Recession Yes, Rate Cuts No - Real Time Economics
• Fed Considers Plan to Buy Companies’ Unsecured Debt - NYTimes.com
• How trade may raise wage inequality worldwide - Vox EU
• FAQs about Interest on Reserves - FRB New York
• Using Math to Explain How Life on Earth Began - Scientific American

Comments

[anne]

http://www.nytimes.com/2008/10/07/world/europe/07georgia.html?ref=world&pagewanted=print

October 7, 2008

News Media Feel Limits to Georgia's Democracy
By DAN BILEFSKY and MICHAEL SCHWIRTZ

Georgia's critics cite a lack of press freedom as an example of the shortfalls in the country's democratic standards.

[anne]

http://angryarab.blogspot.com/2008/10/influential-group-of-georgian.html

October 5, 2008

"An influential group of Georgian opposition leaders has mounted a blistering political campaign against U.S.-backed President Mikheil Saakashvili, accusing his government of running an autocratic regime that tramples human rights and stifles democracy." *

* http://www.mcclatchydc.com/world/story/53444.html

[anne]

http://www.nytimes.com/2008/10/07/world/europe/07georgia.html?ref=world&pagewanted=print

October 7, 2008

News Media Feel Limits to Georgia's Democracy
By DAN BILEFSKY and MICHAEL SCHWIRTZ

TBILISI, Georgia — The cameras at Georgia's main opposition broadcaster, Imedi, kept rolling Nov. 7, when masked riot police officers with machine guns burst into the studio. They smashed equipment, ordered employees and television guests to lie on the floor and confiscated their cellphones. A news anchor remained on-screen throughout, describing the mayhem. Then all went black.

The pretext for the raid — which silenced the channel — was a government claim that Imedi was fomenting unrest when it broadcast a statement by one of its founders, Badri Patarkatsishvili, promising to topple the government of President Mikheil Saakashvili.

Earlier that day, riot police officers lashed out with clubs and fired rubber bullets at unarmed antigovernment protesters. A nine-day state of emergency followed.

Now, 11 months later, Georgia's democratic credentials are again being questioned, and tested, as the country finds itself on the front line of a confrontation between Russia and the West.

Georgia and its American backers, including the Republican and Democratic United States presidential contenders, have presented Georgia as a plucky little democracy in an unstable region, a country deserving of generous aid and NATO membership. But a growing number of critics inside and outside the country argue that it falls well short of Western democratic standards and cite a lack of press freedom as a glaring example.

Mr. Saakashvili, a telegenic New York-trained lawyer, came to power in 2004 after a wave of protests known as the Rose Revolution, promising to shed the authoritarianism of the past. But Lincoln A. Mitchell, a Georgia expert at Columbia University, contended that Mr. Saakashvili now presided over a "semiauthoritarian" state, while saying that it was the most democratic of the former Soviet states in the region.

"The reality is that the Saakashvili government is the fourth one-party state that Georgia has had during the last 20 years, going back to the Soviet period," he said. "And nowhere has this been more apparent than in the restrictions on media freedom."

In its most recent report, Freedom House, a human rights research group based in New York, ranked Georgia, in terms of press freedom, on a level with Colombia and behind Nigeria, Malawi, Indonesia and Ukraine — the last a NATO aspirant, like Georgia.

A 2008 State Department report on Georgia's democratic progress said that respect for freedom of speech, the press and assembly worsened during the 2007 crisis and that there continued to be reports of "law enforcement officers acting with impunity" and "government pressure on the judiciary."

Sozar Subari, Georgia's ombudsman for human rights, an independent watchdog appointed by Parliament, accused the government of stifling press freedom by ensuring that sympathetic managers were installed as directors at national broadcasters.

"That Georgia is on the road to democracy and has a free press is the main myth created by Georgia that the West has believed in," Mr. Subari said. "We have some of the best freedom-of-expression laws in the world, but in practice, the government is so afraid of criticism that it has felt compelled to raid media offices and to intimidate journalists and bash their equipment."

Nino Zuriashvili, a Georgian investigative journalist who said she broadcast on the Internet to bypass censorship, said that under Mr. Saakashvili, nearly a dozen broadcasting outlets had been winnowed to a handful, and several political talk shows had been shut down. "The paradox is that there was more media freedom before the Rose Revolution," she said.

Mr. Saakashvili himself, asked about press freedom on a recent visit to New York, conceded at an Atlantic Council luncheon that "we need to have more debate and more transparency." But he insisted, "There are no taboos."

Prime Minister Lado Gurgenidze, a close ally of Mr. Saakashvili, retorted that market forces were driving the consolidation of media. Annual spending on television and newspaper advertising in Georgia is about $50 million, he said, not enough to support a dozen broadcasters. The raid on Imedi was not Georgia's "finest hour," he said in an interview, but he insisted that opposition voices were represented across Georgian media.

"All this talk of media censorship is a tired cliché," he said, noting that opposition candidates in recent presidential and parliamentary elections had at least equal time on the main television stations.

Some critics said the culture of censorship was particularly pronounced during the brief war with Russia in August. They accused the government of obfuscating reality to portray Georgia as both victim and victor.

Nino Jangirashvili is the director of the Tbilisi broadcaster Kavkasia, which is independently owned and run. She said that on Aug. 10, when Mr. Saakashvili called for a cease-fire, government officials were briefing broadcasters that Georgian troops controlled Tskhinvali, the capital of breakaway South Ossetia, even as Georgian soldiers there were frantically calling Kavkasia to say they had been overrun by the Russians and were hiding in trees.

She said the station refrained from reporting the extent of what it knew, for fear of being shut down or labeled as Russian agents. "We engaged in self-censorship because of the political environment of fear and intimidation," she said....

[anne]

http://www.nytimes.com/2008/10/07/science/earth/07mammal.html?ref=world&pagewanted=print

October 7, 2008

One in 4 Mammals Threatened With Extinction, Group Finds
By JAMES KANTER

BARCELONA, Spain — An “extinction crisis” is under way, with one in four mammals in danger of disappearing because of habitat loss, hunting and climate change, a leading global conservation body warned Monday.

“Within our lifetime, hundreds of species could be lost as a result of our own actions,” said Julia Marton-Lefèvre, the director general of the International Union for Conservation of Nature, or I.U.C.N., a network of campaign groups, governments, scientists and other experts.

Among 188 mammals in the group’s highest threat category — critically endangered — was the Iberian lynx, which has an estimated population of 84 adults and has continued to decline as its primary prey, the European rabbit, has fallen victim to disease and overhunting.

The report, presented at the World Conservation Congress in Barcelona, formed part of a Red List of Threatened Species issued annually by the group.

The fishing cat, found in Southeast Asia, was moved to the second most threatened category, endangered, from vulnerable, because of habitat loss in wetlands. The Caspian seal, also now endangered, has declined in population by 90 percent over the past 100 years because of unsustainable hunting and degradation of its habitats.

Jan Schipper, the director of the global mammal assessment for the I.U.C.N. and for Conservation International, an environmental group, said it was hard to draw a direct comparison with the last detailed survey on mammals, in 1996. New species have been identified, others discovered, and the criteria used to assess species have been made more broadly applicable across all animals and plants.

But he gave a mostly bleak assessment.

“Although 5 percent of mammals are recovering, what we observe are rates of habitat loss and hunting in Southeast Asia, Central Africa and Central and South America that are so serious that the overall rate of decline has steadily increased during the past decade,” Mr. Schipper said.

Amphibians, too, are facing an extinction crisis, with at least 33 percent either threatened or extinct, the I.U.C.N. reported.

Holdridge’s toad, found only in Costa Rica, was declared extinct. The Cuban crocodile, illegally hunted for its meat and skin, was moved to the critically endangered category.

Making the list for the first time were Indian tarantulas, highly prized by collectors and threatened by the international pet trade. The Rameshwaram parachute spider, whose habitat has been eroded by new roads, was found to be critically endangered. The spiders’ “natural habitat has been almost completely destroyed,” the group said.

Not every part of the report was bleak. The African elephant was removed from the vulnerable list and was listed as “near threatened,” although its status varied depending on location. The I.U.C.N. said increases in the population of the elephants in southern and eastern Africa were big enough to offset any decreases taking place elsewhere.

[anne]

The idea that the President of Georgia could summarily order the bombardment of Ossetia, the bombardment of Russian peace-keepers and civilians, and the invasion of Ossetia, and still be considered a democrat for more than a moment of reflection by any analysts, simply shows how impossibly slanted the attitudes in America and Britain have become, as well as the broader inability of Europeans to think beyond serving American interests no matter the consequences. A democratic Georgia could never have summarily, with no provocation, attacked Ossetia.

http://www.nytimes.com/2008/10/07/world/europe/07georgia.html?ref=world&pagewanted=print

"Georgia and its American backers, including the Republican and Democratic United States presidential contenders, have presented Georgia as a plucky little democracy in an unstable region, a country deserving of generous aid and NATO membership."

[anne]

http://www.irinnews.org/Report.aspx?ReportId=80786

October 7, 2008

NGOs Urge International Community to Protect Civilians
By IRIN

NAIROBI - Insecurity, drought and record-high food prices have led to a rapid escalation of the humanitarian crisis in Somalia, with some 3.25 million people now needing emergency aid, NGOs said.

"We are appalled by the indiscriminate and disproportional use of force by all armed parties to the conflict, which is further exacerbating the humanitarian crisis," a 6 October statement by 52 national and international NGOs said.

While worsening insecurity continued to limit access for aid agencies, drought - caused by a fourth consecutive failure of the rains - was spreading across central and southern areas, according to the NGOs.

The situation has been aggravated by hyperinflation, which has caused an increase in food and water prices by up to 1,600 percent.

Piracy has also complicated the delivery of food aid. Chatham House, an international think-tank, recently urged the international community to formulate a plan to ensure that piracy did not interrupt the supply of food aid to the country.

The NGOs said 32 ships had been hijacked off the coast of Somalia between January and August 2008.

Civilians in crossfire

Half of Somalia's population needs emergency aid, a 77 percent increase since the beginning of 2008.

"The situation is expected to deteriorate further, with ordinary Somalis bearing the brunt of the cost," the group said. "Despite the ongoing political process we have not witnessed any lessening of the violence that continues to have a horrendous impact on civilians."

The NGOs included Adventist Relief Development Agency (ADRA), Cooperative Assistance for Relief Everywhere (CARE), Danish Refugee Council (DRC), HIV/AIDS Prevention and Child Protection Organisation (HAPO CHILD), International Medical Corps (IMC), Oxfam International, Relief International, World Concern and World Vision.

Renewed shelling in Mogadishu had led to the displacement of at least 37,000 civilians, bringing the estimated total of displaced Somalis to 1.1 million, the NGOs said.

"The average Somali has seen price increases for food and water of up to 1,000 percent, plunging many into worsening poverty," the group said. "One in six children under five, or approximately 180,000 children, is acutely malnourished in south and central Somalia." ...

[anne]

Somalia of course was the increasingly peaceful country that America urged Ethiopia to attack and occupy in December 2006; America urged and supported the attack and occupation against a chorus of African voices, and as with Iraq or Afghanistan a simple deposing of the government of Somalia has resulted in continual violence and depredation and and deprivation since.

Mention of Somalia by American reporters and analysts is rare, however, and even public television has just removed international news coverage from the network (please send those contributions though).

[anne]

The population of Somalia before the American-Ethiopian attacks might have been 10 million, so a displacement of 1.1 million since December 2006 gives some sense of what the needless attacks and occupation have meant.

Relatedly, the United Nations has been reporting on a fierce farming problem in Syria threatening rural and urban households in a country that has been forced to absorb about a million Iraqi refugees among a native population of about 18 million. Again, the mounting Syrian problems are all but unmentioned in America.

[anne]

http://krugman.blogs.nytimes.com/2008/10/07/crisis-on-my-mind/

October 7, 2008

Crisis on My Mind
By Paul Krugman

The plan was to discuss portfolio models of the exchange rate.... But I’ve decided to switch the order of things, and move up the currency crisis discussion. Last minute list of readings for this morning:

Garber and Svensson, “The operation and collapse of fixed exchange rate regimes,” NBER WP#4971

Obstfeld, “Currency crises with self-fulfilling features”, NBER WP#5285

Allen, Roubini, et al, “A balance sheet approach to financial crisis,” IMF WP, 2002

Calvo and Talvi, “Sudden stop, financial factors and economic collapse in Latin America,” NBER WP#11153

Eichengreen, Rose, Wyplosz, “Contagious currency crises,” Berkeley WP

Kaminsky et al, “The unholy trinity of financial contagion,” NBER WP#10061

Of course, these papers are all figments of my imagination; Robert Samuelson assures us that the study of financial crises has been at the fringes of economics. *

* http://www.washingtonpost.com/wp-dyn/content/article/2008/09/28/AR2008092802230.html

[anne]

http://krugman.blogs.nytimes.com/2008/10/06/its-a-small-world-after-all/

October 6, 2008

It’s a Small World After All
By Paul krugman

We are all Brazilians now [Chart]

One point I think is really important in understanding the crisis is that there has been a huge increase in financial globalization just in the last few years — basically since 1995. The chart above shows rest-of-world assets in the United States (red) and US assets abroad (blue) as a percentage of non-US GDP; while we talk a lot about the US as a debtor nation, what’s really striking is the surge on both sides of the balance sheet. This has made the global financial system a lot more tightly linked, so that big economies are now experiencing the kind of contagion previously associated with emerging markets caught up in the 1997-1998 crisis. We’re all Brazilians now.

[anne]

http://www.nytimes.com/2008/10/08/business/worldbusiness/08icebank.html?ref=business&pagewanted=print

October 8, 2008

Iceland Seeks Emergency Loan From Russia
By JULIA WERDIGIER

In addition to seeking a $5.4 billion emergency loan from Russia, Iceland pegged its currency to an index and took control of one of its largest banks as it struggled to keep its economy afloat.

[Russia? Whatever must Secretary Rice be thinking? OMG!]

[Julio]

"Iceland Seeks Emergency Loan From Russia"

First, they lay a cunning trap for the Georgians.
Now it's Iceland.
Will those evil Russians never stop?

[anne]

There is a conservative theme that is identical to the general theme of analysts with the exception of Paul Krugman during the Japanese financial crisis, the conservative wish being to allow financial companies that are not able to continue operating privately over this time to simply fail. However, a significant failure of financial companies, and the resulting job loss, will lead as would have been the case in Japan to a most severe recession and possibly worse. The Japanese understood what was critical through the deflation crisis was to preserve jobs and against American and British criticism the government did precisely that. Only Krugman recognized how important this was.

[Julio]

"Saakashvili, retorted that market forces were driving the consolidation of media...

"All this talk of media censorship is a tired cliché," he said"

Yeah, people have said this so often it's become kinda stale. Don't we have something livelier to put on page one?

[anne]

There should have been protection of jobs in mind from the beginning of the financial crisis, when institutional combination was being happily announced at the expense of tens of thousands of fine jobs. Allowing job losses at Lehman Brothers and the like, shows a complete lack of concern or even disdain for middle class labor, that has grown especially pronounced through this Administration but has been a problem for decades as the New Deal heritage has been worn away by Republicans.

Japan protected jobs, we need to but show not the least willingness to.

[anne]

http://www.democracynow.org/2008/10/7/headlines#5

October 7, 2008

McCain Would Cut $1.3 Trillion from Medicare, Medicaid
By Amy Goodman

In other campaign news, a McCain aide has disclosed the Republican candidate’s health plan would result in a major reduction to spending on Medicare and Medicaid. The Wall Street Journal reports the plan could result in cuts of up to $1.3 trillion over ten years. * The cuts would be necessary to keep a McCain campaign pledge for a “budget neutral” health plan. Medicaid and Medicare provide government-backed healthcare to seniors, poor families and the disabled. The programs have already seen sharp funding cuts under the Bush administration.

* http://online.wsj.com/article/SB122315505846605217.html?mod=special_page_campaign2008_mostpop

[Republican insanity, and beyond.]

[anne]

http://online.wsj.com/article/SB122315505846605217.html?mod=special_page_campaign2008_mostpop#printMode

October 6, 2008

McCain Plans Federal Health Cuts: Medicare, Medicaid Spending Would Be Reduced to Offset Proposed Tax Credit
By LAURA MECKLER - Wall Street Journal

John McCain would pay for his health plan with major reductions to Medicare and Medicaid, a top aide said, in a move that independent analysts estimate could result in cuts of $1.3 trillion over 10 years to the government programs.

The Republican presidential nominee has said little about the proposed cuts, but they are needed to keep his health-care plan "budget neutral," as he has promised. The McCain campaign hasn't given a specific figure for the cuts, but didn't dispute the analysts' estimate.

In the months since Sen. McCain introduced his health plan, statements made by his campaign have implied that the new tax credits he is proposing to help Americans buy health insurance would be paid for with other tax increases.

But Douglas Holtz-Eakin, Sen. McCain's senior policy adviser, said Sunday that the campaign has always planned to fund the tax credits, in part, with savings from Medicare and Medicaid. Those government health-care programs serve seniors, poor families and the disabled. Medicare spending for the fiscal year ended Sept. 30 is estimated at $457.5 billion.

Mr. Holtz-Eakin said the Medicare and Medicaid changes would improve the programs and eliminate fraud, but he didn't detail where the cuts would come from. "It's about giving them the benefit package that has been promised to them by law at lower cost," he said....

[Beyond all comprehension, other than for Republicans.]

[rufus]

Anne says...
"Mention of Somalia by American reporters and analysts is rare, however, and even public television has just removed international news coverage from the network (please send those contributions though)."

This is news worthy. PBS/WNET has thrown off BBC World in favor of its new product, 'World Focus' (pdf, so I cannot post article).

http://www.publicmediadigest.org/index2.php?
option=com_content&do_pdf=1&id=391

"alternative to BBC"

"...news correspondents from ABC, NBC, and CBS have also expressed interest in participating."

Lovely! Another channel for US media bias...why not just let Murdoch run it.

[rufus]

Lehman Managers Portrayed as Irresponsible
By BERNIE BECKER and BEN WHITE
Published: October 6, 2008

http://www.nytimes.com/2008/10/07/business/
economy/07lehman.html?_r=1&ref=business&oref=slogin

"...Later in the hearing, Mr. Fuld was asked why Lehman approved nearly $20 million in payments for two departing executives about a week before the bankruptcy filing.

Mr. Fuld said one payment, $2 million for Andrew J. Morton, the head of fixed income, was deemed “appropriate for his years of service.” Another $16 million, paid to Benoit Savoret, who was leaving as chief operating officer for Europe and the Middle East, was a result of a contractual obligation.

The committee also released e-mail messages sent in June in which Mr. Fuld and George H. Walker, a Lehman executive and cousin of President Bush, responded in what Mr. Waxman called a mocking tone to a suggestion that executives at the company decline bonuses.

Asked what mistakes, if any, he had made, Mr. Fuld said he wished he had moved more quickly to reduce Lehman’s commercial real estate holdings. “I, like a number of other people, thought that the mortgage crisis was contained to residential mortgages, and I was wrong,” he said..."

[anne]

http://www.nytimes.com/2008/10/07/business/economy/07lehman.html?ref=business&pagewanted=print

October 7, 2008

Lehman Managers Portrayed as Irresponsible
By BERNIE BECKER and BEN WHITE

Asked what mistakes, if any, he had made, Mr. Fuld said he wished he had moved more quickly to reduce Lehman’s commercial real estate holdings. “I, like a number of other people, thought that the mortgage crisis was contained to residential mortgages, and I was wrong,” he said....

No; there is something entirely wrong about this excuse, at the least what is wrong comes not from investing in commercial real estate as TIAA-CREF does so well, or the Harvard endowment managers are doing, but from the leveraging of the commercial real estate investments, from the lack of a reserve.

[anne]

The stock market does not bother me, but the bond market sure does. The absence of a decent bond market response to the Federal Reserve willingness to buy essentially any amount of short-term debt is scary.

http://www.nytimes.com/2008/10/08/business/08fed.html?ref=business&pagewanted=print

October 8, 2008

Fed Announces Plan to Buy Short-Term Debt
By EDMUND L. ANDREWS and MICHAEL M. GRYNBAUM

The Federal Reserve’s radical new plan is an effort to stimulate the credit markets, which have all but dried up.

[anne]

The stock market does not bother me, but the bond market sure does. The absence of a decent bond market response to the Federal Reserve willingness to buy essentially any amount of short-term debt is scary.

http://www.nytimes.com/2008/10/08/business/08fed.html?ref=business&pagewanted=print

October 8, 2008

Fed Announces Plan to Buy Short-Term Debt
By EDMUND L. ANDREWS and MICHAEL M. GRYNBAUM

The Federal Reserve’s radical new plan is an effort to stimulate the credit markets, which have all but dried up.

[anne]

[Huh? I have no idea how a double post could have come after a 12 minute lag, since I only posted once and that took. The same sort of doubling may have happened once before, and could be the result of a Firefox structure of which I am unaware. Sorry, though.]

[anne]

http://krugman.blogs.nytimes.com/2008/10/07/third-world-america-2/

October 7, 2008

Third World America?
By Paul Krugman

One thing I learned way back in grad school was that there was a big difference between the assets of first-world, mature-country central banks and those in rickety developing economies. The Fed and its peers had clean balance sheets, with basically nothing but Treasury bills on the asset side. Third world central banks, on the other hand, did a lot of direct lending to the private sector, and had all sorts of dodgy assets on their books.

Now the Fed is in the business of directly buying commercial paper, in some cases unsecured. Wow.

I’m not saying this is a bad idea — until Treasury comes back with a bailout plan that actually makes sense, Bernanke has to try everything he can to hold the system together. But it is shocking how fast things have gone downhill.

[anne]

What I just do not understand is why the Treasury plan has not emphasized what Robert Rubin showed was emphasized in Japan from 1994, making sure that there was a secure capital base for private financial companies. I would be sure the lack of understanding was mine alone were it not for such a comment from Krugman emphasizing the need for the Federal Reserve to be buying short term debt in the absence of Treasury securing a capital base for private finance companies.

[Patricia Shannon]

anne says...

http://www.democracynow.org/2008/10/7/headlines#5

October 7, 2008

McCain Would Cut $1.3 Trillion from Medicare, Medicaid
By Amy Goodman

In other campaign news, a McCain aide has disclosed the Republican candidate’s health plan would result in a major reduction to spending on Medicare and Medicaid. The Wall Street Journal reports the plan could result in cuts of up to $1.3 trillion over ten years. * The cuts would be necessary to keep a McCain campaign pledge for a “budget neutral” health plan. Medicaid and Medicare provide government-backed healthcare to seniors, poor families and the disabled. The programs have already seen sharp funding cuts under the Bush administration.

* http://online.wsj.com/article/SB122315505846605217.html?mod=special_page_campaign2008_mostpop

[Republican insanity, and beyond.]

I have no quarrel for your dramatic comment in this case. It's right on.

[anne]

Imagine happily explaining mere weeks before an election, economic insecurity everywhere, health care insurance a continual and growing worry, that the Republican plan for health care insurance will be to ruin Medicare and Medicaid. This from a senior economic adviser to the Presidential candidate, actually the only economic adviser who could before have been thought to be rational.

The Republican plan being then to cut employer tax subsidies for health insurance, offer subsidies for tens of millions of employees who would have had insurance at work to fend for insurance themselves while cutting Medicaid and Medicare to pay for the plan to cut employees insurance.

Huh?

[Running For the Hills]

RR..."Put simply, no lender trusts any borrower to repay..."

To maintain those 2% rates, it may essentially be necessary to guarantee all private domestic debt. Otherwise, lenders will want interest that actually has some chance to cover the default rate (not to mention inflation). We may have the resources to restart crucial lending, but not necessarily at negative interest rates. That is a tall order in a solvency crises.

[anne]

http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=707948

October 2, 2008

The 2008 Presidential Candidates' Health Reform Proposals: Choices For America
By Sara R. Collins, Jennifer L. Nicholson, Sheila D. Rustgi, and Karen Davis

[The evaluation of the McCain health care insurance plan was that in 10 years we would be 65 million Americans lacking insurance, and this was before understanding that the intent was to pay for not insuring 65 million by harming those covered now by Medicare and Medicaid.]

[Julio]

"The Republican plan being then to cut employer tax subsidies for health insurance, offer subsidies for tens of millions of employees who would have had insurance at work to fend for insurance themselves while cutting Medicaid and Medicare to pay for the plan to cut employees insurance.

Huh?"

Maverick, n. A person who holds opinions that make no sense to anyone else.

[Both]

It would be a good idea to give people who now buy their own insurance a tax credit for insurance premiums. However, the employer deduction should be maintained.

[anne]

http://economix.blogs.nytimes.com/2008/10/06/whos-left-out-of-us-job-reports/

October 6, 2008

How Bad Has Job Growth Really Been Over the Last 8 Years?
By Alan B. Krueger

According to one government survey, the United States added 4.8 million jobs since the start of the Bush administration in January 2001. But wait. According to another government survey, the United States added 7.5 million jobs in the same period. Although job growth is anemic by either reckoning, the record is significantly worse if judged by the first survey....

[Worth noting both on a technical level, and because no matter whether 4.8 million or 7.5 million jobs are taken as having been created since the beginning of the Bush Administration, the job creation figure is anemic.

The sense during the 1990s was that about 150,000 new jobs were needed each month to keep up with population growth, but even were the figure 100,000 now with a larger population we should have reached 8.4 million jobs created during this Administration by December 2007. The Clinton years however found 225,000 jobs created a month for 8 years. That was more than 21 million jobs, and jobs that were recorded by the workplace rather than the home survey. Legitimate, benefits paying jobs created.]

[anne]

However much I know that employment was no policy concern through this Administration, I am still struck by the turn from the Clinton years, the sudden pronounced and lasting turn for an economy that should have been recording better general growth figures but still grew decently from the recovery in December 2001 to December 2007.

Growth conditions were however always better than growth realized save for corporate revenues and corporate savings, and if general growth was only moderate in comparison to corporate revenues, the shares of revenues of ordinary workers declined when from an historical perspective that seemed about impossible.

What happened?

[anne]

The generally moderate growth period we are coming from, and the anemic employment growth period to a sure recession again tell me that even more than Japan needed the government spending of the years of deflation such spending is needed here and now. Japan never approached the unemployment level we are already experiencing, and work conditions will worsen from here. Tax cutting from here would seem a fairly meaningless stimulus compared with direct government spending.

[anne]

http://krugman.blogs.nytimes.com/2008/10/07/snark-explained/

October 7, 2008

Snark Explained
By Paul Krugman

I was a bit snarky in my post about crisis readings. * A bit of explanation: my professional work in economics has had two main themes. One has been the role of increasing returns in trade and economic geography; the other has been currency crises. My first paper in each area was published in 1979.

And in both cases, many years and hundreds if not thousands of academic research papers by myself and others later, I read major media stories informing readers that these are subjects economists simply refuse to study. Not the most important thing in the world, I know, but kinda irksome.

* http://krugman.blogs.nytimes.com/2008/10/07/crisis-on-my-mind/

[anne]

http://krugman.blogs.nytimes.com/2008/10/07/thought-for-the-day/

October 7, 2008

Thought for the Day
By Paul Krugnman

“Stock markets are the best barometer of the health, wealth and security of a nation.” *

* http://www.realclearpolitics.com/articles/2007/07/a_stock_market_vote_of_confide.html

[I really didn't want to know who....]

[Barkley Rosserr]

anne,

Some areas of agreement.

1) Glad to see you are willing to criticize McCain's awful posistions on health care. Hillarycare may have been better than Obamacare, but the latter is certainly better than the currently available alternative.

2) Saakashvili is bad news. Fortunately, the Russians have agreed to pull their troops out of Georgia proper, with EU folks coming in to replace them, which allows the internal opponents of Saakashvili to criticize him for his serious mistakes without being silenced as supporters of Russian invation.

3) Obama clearly does not have good answers for either Afghanistan or Pakistan, but neither do his current opponents or anybody else. He is certainly correct that what McCain supported in the past, and what Bush did, made the situation much worse.

4) Oh, this is not agreement, but the update is the Russia-Iceland financial deal has apparently fallen apart.

[anne]

Agreed; and I am not pleased and puzzled about Iceland having trouble gaining a credit line. I wondered about Russia to begin with.

[anne]

http://krugman.blogs.nytimes.com/2008/10/07/britain-leads-the-way/

October 7, 2008

Britain Leads the Way?
By Paul Krugman

According to the Financial Times, *

"Gordon Brown, the UK prime minister, on Tuesday night ordered a massive taxpayer-backed cash injection to rebuild the balance sheets of Britain’s high street banks, in effect part-nationalising the sector at a cost of tens of billions of pounds.

…

"Faced with an intensifying banking crisis, Mr Brown sanctioned moves for the taxpayer to recapitalise leading banks, in a bid to restore confidence in the system and to encourage them to start lending again.

"The total cost of the scheme was estimated at between £35-£50bn, which is expected to be executed through the government acquiring preferred shares. Mr Brown is expected to insist the taxpayer receive generous dividends and profits on the deal if share prices recover."

Unlike the Paulson plan, this sounds as if it makes sense. However, given the strong financial linkages ** among the world’s economies, I wonder how much Britain can do on its own. Let’s see what the plan actually looks like; if it’s good, it can be a model for US emulation, and for the eurozone too if they can get their act together.

* http://www.ft.com/cms/s/0/e5b767d2-948c-11dd-953e-000077b07658.html?nclick_check=1

** http://krugman.blogs.nytimes.com/2008/10/06/its-a-small-world-after-all/

[anne]

No; there is reason to believe Russia will support Iceland. Banking ties between the countries alone would make that reasonable. International politics more so.