Daily Archives: August 17, 2011

The Biggest Little Hypocrite in Texas

I picked out to post here just a couple of paragraphs from the article The Biggest Little Hypocrite in Texas.

The price of oil rose from $25 a barrel when Lt. Gov. Perry replaced the newly elected President Bush to $147 in 2008 and has stayed at more than $80 a barrel since, to the dismay of anyone who has to buy gasoline.

From the first days of statehood in 1845, Texas has maintained the strictest laws on home mortgages in the nation. The Texas constitution’s blanket ban on home equity loans, born of outrage over previous land grabs by banks, has been eased substantially over the years, but a firm commitment that the total amount in loans on a house not exceed 80 percent of appraised value, and other consumer-friendly restrictions on mortgage lenders, saved Texas from the home mortgage disaster visited upon many other states.

Of course a few facts won’t stop the American electorate from being fooled again, this time by George W. Bush’s successor as Governor of Texas.  It’s a good thing Bush mangled the old saw about being fooled twice, lest people be able to apply it to Governors from Texas.  I heard that Perry is just like George W. Bush, but without Bush’s intelligence and ethics.

Picking the Bones of US Public Economy

To get a clearer picture of what privatization is all about, watch the video below.

I had to listen real closely to hear who the interviewee was talking about when at about 8:01 into the video he said that “… wasn’t stupid. He had ideas about liquidation, liquidation, liquidation…” He was talking about Andrew Mellon, the Treasury secretary from 1921 to 1932. Mellon thought that liquidation was the solution to the depression.

With ‘listening tour,’ Warren tests waters for a Senate run

For those of you hungering for news about Elizabeth Warren, there is With ‘listening tour,’ Warren tests waters for a Senate run in The Boston Globe.

Will she be another Martha Coakley?

Those in attendance at a Dorchester home Monday night said she sprinkled her answers with punchy words about her time in Washington, where she fought for legislation creating a consumer protection bureau for President Obama in the aftermath of the banking crisis.

“She either wanted to get the bill as it was written or she wanted to leave with no bill but with ‘blood and teeth on the floor,’ ’’ said Joyce Linehan, a Dorchester activist who hosted the event at her home, where about 60 people shared Italian sandwiches and beer. “And for some reason, my friends have glommed onto that one [line] like no other.’’

As I said before, she’d better be careful to not be too rough on Senator Brown.  He’ll bring out that Jackie Cooper look and whine about how mean a grandmother Elizabeth Warren is.  (Or some kind of mother word for sure)

Jackie Cooper pout

ANother of Jackie Cooper's famous pouts

Massachusetts Senator Brown’s Account Lacks Accounting

A very interesting OpEd piece, Brown’s account lacks accounting, by Scott Lehigh appears in The Boston Globe today.

Lehigh starts off with some quotes from Senator Brown.

“In 2001 to ’02, the bursting of the technology bubble hit the Massachusetts economy hard,’’ Brown wrote. “Our unemployment rate was growing faster than any other state in the country, and we faced a fiscal crisis that many experts said was the worst since World War II. The projected deficit for 2003 was nearly $3 billion.’’

And how did Massachusetts solve its problems? “[I]nstead of raising taxes . . . we tightened our belts and balanced the books by cutting spending,’’ Brown maintained. “It wasn’t easy, but . . . we turned our deficit into a surplus and the economy and jobs started coming back.’’

I’ll quote some of the analysis that Lehigh provides.

In fact, in 2002, the Legislature passed a revenue package worth about $1.1 billon – tax increases that took effect on Jan. 1, 2003. That was part of a balanced approach that saw the state reduce spending, raise taxes, and tap rainy day reserves, notes Michael Widmer, president of the Massachusetts Taxpayers Foundation.

Under Romney, the state hiked fees for permits and licenses and closed corporate loopholes to raise hundreds of millions in new revenues.

Those fees and loophole closings (closings that businesses certainly viewed as tax hikes) brought in more than $600 million. Include other one-time dollars, and the state used about $800 million in additional revenue to close the budget gap, Widmer says. Add in the fact that the budget problem turned out to be a third smaller than the preliminary projection of $3 billion, and the truth is clear: New revenues were a substantial part of the solution.

This appears to be another case of politicians spouting off about how the government in their own state works when in fact they have no clue.  See the other case in the post Texas Gov. Perry Got His Keynes On

Texas Gov. Perry Got His Keynes On

The headline above is inspired by the text in the article whose actual headline is Texas and the government are chummier than you’d think. The article explains the meaning of the following histogram.

“Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures.”

If Governor Perry doesn’t even understand how the Texas government works, then how is he going to make the federal government work?  In Texas the form of government makes for a weak governor.  Somebody else must be running the government.  Maybe that is why Governor Perry has about as much of a clue as Governor George W. Bush did.

As they say, you can look it up. Here is a paragraph from the University of Texas’ web page on Texas Politics – The Executive Branch.

The main source of the relative weakness of the Texas Governor can be found in the historical conditions surrounding the Texas Constitution of 1876. Mindful of the experience of Reconstruction – the period after the Civil War when Republican governors wielded extensive executive powers and were resisted by conservative elites in the state – the authors of the new constitution sought to rein in future governors. They did so by dispersing power that might otherwise be lodged in the chief executive’s hands among a vast array of independently elected officials. Broad powers over the legal system, state budget and finances, education, transportation, agriculture, public utilities, and land development are delegated to officials who need not share the policies nor even be of the same political party as the governor.

I have another post, Massachusetts Senator Brown’s Account Lacks Accounting, that shows we in Massachusetts have our own politicians who have no clue as to how their state works, but still want to apply their imaginary understanding to the federal government.

Here is a little video just to prove that not all Texas politicians are idiots.

Fixing the economy: We got it wrong

In his article Fixing the economy: We got it wrong, James K. Galbraith explains why Obama and his advisers “misunderestimated” the needed size of the stimulus package. Here is a tiny excerpt to whet your appetite for reading the whole article:

The next mistake was to base policy on the forecasts. The sensible thing would have been to paint the bleakest possible picture, emphasizing the extraordinary crisis, and so justify the largest possible policy action. Then if things turned out all right President Obama would have gotten credit, and any excess actions could easily have been cut back. Instead, the president set himself and his policies up for blame.

Obama’s approach contrasts sharply with how President Reagan handled the recession of 1981-82 — with massive tax cuts enacted in 1981. I did not like Reagan’s tax cuts, but everyone could see that they implied a truly massive stimulus. This was politically smart, as Reagan’s reelection proved. And when the message had been delivered, the cuts were trimmed in 1982, 1984 and 1986.

The above two paragraphs cover only a part of Galbraith’s recommendations.  Even so, Galbraith missed one factor.  The skewed distribution of wealth and income makes a self-sustaining employment recovery just about impossible.  If the middle-class no longer would have enough income to buy all that a full-employment economy could produce, what would be the economic justification to put everyone back to work?  Without the buying power, the full-employment economy would produce more than needed by the customer demand.

Tax and other policies must be changed in order to fix this issue.

Galbraith also should be careful to define who the “we” is in the “We got it wrong”

Doing just a little Google searching to see if anybody recognized in 2009 that the stimulus was too small, I came up with the following:

Senate Dems on Obama Stimulus: Size Matters, January 09, 2009

I’d guess that the Democratic dismay must run pretty damned deep for them to oppose Obama on his stimulus plan. Good, because it isn’t big enough:

Economic stimulus on the cheap, February 9, 2009

For US senators, decreasing the size of the stimulus package may be clever politics. But it’s not smart economics

Krugman: Obama’s Stimulus Doesn’t Go Far EnoughThe Obama Gap,  January 8, 2009

 Bear in mind just how big the U.S. economy is. Given sufficient demand for its output, America would produce more than $30 trillion worth of goods and services over the next two years. But with both consumer spending and business investment plunging, a huge gap is opening up between what the American economy can produce and what it’s able to sell.

And the Obama plan is nowhere near big enough to fill this “output gap.”

Even taking a quick look at what was on this Steve’s Politics Blog in January, 2009, I find the following:

Be Bold With Economic Stimulus. January 14, 2009

To put it another way, if Obama proposes to do more than we find out that we need, he can always cancel some of his proposals.  On the other hand, if we eventually find out that we need more than he has proposed, it may be too late to add these items by the time we find that we need them.

One of my reasons for having this blog is so that I can have a record of who said what and when.  I can bring out the “I told you so” whenever someone claims that “nobody knew at the time.”