Well, the actual article on Talking Points Memo is Gingrich: Austerity Is Wrong For America, We Need Pro-Growth Policies Instead.  This is the quote from Meet The Press.

“First of all, David, I don’t think you’ll ever find me talking about an age of austerity. I don’t think that’s the right solution,” Gingrich said. “I am a pro-growth Republican. I’m a pro-growth conservative. I think the answer is to grow the economy, not to punish the American people with austerity.”

He didn’t point out that corporations are sitting on wads of cash, so that there was no need to lower their taxes.

He didn’t point out that everyone is so nervous about the future that they are not buying as much as they should to grow the economy. So the government has to step in and buy now what it will eventually have to buy some time in the future anyway. The American Society of Civil Engineers in its 2009 Report Card for America’s Infrastructure estimates that we need to spend $2.2 trillion dollars over the next 5 years repairing our infrastructure just to prevent it from failing.

He didn’t mention that people with underwater mortgages do not dare spend as much as they could and they so not have the mobility to move where the jobs are. There needs to be a government program to write down some of the principal on their mortgages  to free up a lot of pro-growth energy.

He didn’t mention that the need to provide health insurance to employees is a roadblock for increased hiring from small companies.  A government funded, single-payer health care system will unleash tremendous economic growth from small business.

He didn’t mention that the very wealthy are sitting on trillions of dollars that they are afraid to invest.  They now take the lazy way out by lending it back to the government so that they can at least earn interest on it.  Taxing some of this money away would lower the deficit and encourage growth by putting the money to work.

However, now that his true pro-growth bias is beginning to emerge, can the above statements be far behind?

The article A Mortgage Tornado Warning, Unheeded comes from The New York Times.

LIKE most people, Nye Lavalle had little interest in the mortgage industry until things got personal. Raised in comfortable surroundings in Grosse Pointe, Mich., just outside Detroit, he began his business career in the 1970s, managing professional tennis players. In the 1980s, he ran SMG, a thriving consulting and research firm.

Then he tried to pay off a loan on a home his family had bought in Dallas in 1988. The balance was roughly $100,000, and the property was valued at about $175,000, Mr. Lavalle said. But when he combed through figures provided by his lender, Savings of America, he found substantial discrepancies in the accounting that had inflated his bill by $18,000. The loan servicer had repeatedly charged him late fees for payments he had made on time, as well as for unnecessary appraisals and force-placed hazard insurance, he said.

Mr. Lavalle refused to pay. The bank refused to bend. The balance rose as the bank tacked on lawyers’ fees and the loan was deemed delinquent. The fight continued after his mortgage was allegedly sold to EMC, a Bear Stearns unit.

Unlike most people, Mr. Lavalle had the time and money to fight. He persuaded his family to help him pay for a lawsuit against EMC and Bear Stearns. Seven years and a small fortune later, they lost the house in Dallas. Back then, judges weren’t as interested in mortgage practices as some are now, he said.

The story ties mortgage fraud back to abuses at Fannie Mae or its subcontractors. This report seems to contradict my earlier claims that the shoddy mortgage practices did not originate at the government agencies like Fannie Mae, but started in private industry and were reluctantly adopted at Fannie Mae.  I was specifically talking about mortgage origination fraud of liar loans claimed to be mortgages meeting the standards of due diligence for giving out loans.  The fraud detailed in this article is on a different end of the process, but it certainly damages the credibility of Fannie Mae.

Thus begins my process of looking for evidence that refutes my prior belief in the relative innocence of the federal agencies.  Another example of the need to be wary of confirmation bias.  It is not enough to find evidence that supports your beliefs.  It is also important to look for evidence that refutes your beliefs.  Still the search must be careful.  If my new belief is that my original belief was wrong, then searching only for evidence of how wrong I was is just confirmation bias on the other side.

As Kermit the frog might have said, “It’s not easy finding the truth.”

The Bloomberg/Business Week article, Gingrich Ties to Fannie, Freddie Said to Extend to Speaker Days, has some interesting things to say about the history of Fannie Mae.  For the relation to this blog post, I picked out the following information:

Gingrich expressed support for Fannie Mae, traveling to Atlanta in 1995 to help open a Fannie Mae office promoting home ownership for low- and moderate-income families.

In a press release issued at the time, Gingrich said, “Fannie Mae is an excellent example of a former government institution fulfilling its mandate while functioning in the market economy.”

The reason for my interest in this is that it sets a date before which we know that Fannie Mae was changed from a purely government agency to a government-sponsored enterprise.

OK, this has prompted me to stop being lazy and just look it up in WikiPedia.

The Federal National Mortgage Association, commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise (GSE), though it has been a publicly traded company since 1968.

I was surprised to learn that it has been a publicly traded company from as far back as 1968.

The information in WikiPedia is supported by the article A Brief History of Fannie Mae and Freddie Mac from Time magazine.  It is eye opening to see how far reaching are some of the good and bad decisions of government.  Some of the late 1960s criticisms of the Republicans against Fannie and Freddie may have been timely back then.  It may be that the responses to fix those criticisms turned out to be not so good in the long run.

The segment of a Moyers & Company episode, Jonathan Haidt Explains Our Contentious Culture, describes itself as follows:

Our country is more politically polarized than ever. Is it possible to agree to disagree and still move on to solve our massive problems?  Or are the blind leading the blind — over the cliff?

Bill and social psychologist Jonathan Haidt talk about the psychological underpinnings of our contentious culture, why we can’t trust our own opinions, and the demonizing of our adversaries.

“When it gets so that your opponents are not just people you disagree with, but… the mental state in which I am fighting for good, and you are fighting for evil, it’s very difficult to compromise,” Haidt tells Moyers. “Compromise becomes a dirty word.”

Here is the video:

Haidt makes a lot of sense and I like to believe I am self-aware enough to know about many of the issues he talks about. This is not to say that I agree with everything he said.

I have talked about confirmation bias in a number of articles on this blog. I do look for evidence that my ideas are wrong as well as evidence that they are right. I am also willing to admit that there are somethings we do not know and there are some things that have huge uncertainties. Any policy needs to try to accommodate the uncertainties.

There is a reason that I disagree with the consensus view in almost every group I am in. Although I believe strongly in progressive ideals, I know that they can be carried too far. I try to remind people that any policy is not merely an issue of yes or know. It is not a single bit binary decision. We must deal in real numbers where we have to estimate how much of any policy is right. We have to realize from the outset that any estimate we come up with may be in error by significant amounts.

I also liked what I thought was Obama’s management style that he touted in his campaign and in his books. Once a policy is decided on, its implementation must be measured. You have to know if the policy is working satisfactorily or not. If it isn’t, you have to know how much it is off and how much needs to be fixed. There is plenty of distance between saying the program is hopeless and must be stopped to the program is perfect and nothing needs to change.

I have the blog’s motto Extremism is the Enemy of Rationality™ at the top for a reason. By the way, somewhat contrary to what Haidt said, asking for rationality is only bad if you think the human mind is completely rational.

The Truth Out article, Why the “Liberal” Media Leaves Hawkish Foreign Policy Unchallenged, by Gregory Harms talks mostly about The New York Times as an example.

The New York Times could probably be fairly described as liberal. The term has lost much relevance and meaning in recent years, along with its counterpart designation “conservative.”

But if we apply the label generally to mean mildly progressive, roughly approximating the political center, one could reasonably assert that the Times falls within range of the liberal framework. (I would argue it’s right-of-center, but will remain general for present purposes.)

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If we are to better understand issues like the Middle East, we need better information. Among the Times’ class of readers exists a pride in belonging to an enlightened, progressive social stratum – a personal observation I have made over now many years. This is not to suggest they are bad people; they’ve just never been told anything else. Much like the subject of Iran, the ingrained orthodoxies prevail. However, to truly progress beyond the demarcations of acceptable liberal discourse, the barrier between the domestic and foreign spheres needs to be dismantled. In this endeavor, the public has the lead. In this endeavor, the population is the vanguard.

So now I know why I have such a disdain for the foreign policy of The New York Times.  They are liberal right, and I am progressive.  Who knew?

Nation of Change has published the article, Occupy the Super Bowl: Indiana’s New Anti-Union Law Sparks Protest at Sport’s Biggest Event, about the video below.

“Indiana Gov. Mitch Daniels signed a so-called ‘right to work’ measure into law that critics say will result in lower wages and diminished collective bargaining rights.”

The article also contains a transcript of the interview in the video.

De­Mau­rice Smith re­cently ap­peared on Dave Zirin’s radio show Edge of Sports Radio. Smith is the ex­ec­u­tive di­rec­tor of The Na­tional Foot­ball League Play­ers As­so­ci­a­tion.

DE­MAU­RICE SMITH: We are in lock-step with or­ga­nized labor. I’m proud to sit on the Ex­ec­u­tive Coun­cil of the AFL-CIO. Why? Be­cause we share all of the same is­sues that Amer­i­can peo­ple share. We want de­cent wages, you want a fair pen­sion, you want to be taken care of when you get hurt, you want a de­cent and safe work­ing en­vi­ron­ment. So when you look at pro­posed leg­is­la­tion in a place like In­di­ana that wants to call it some­thing called “Right to Work”, but you re­al­ize that…

DAVE ZIRIN: A tricky phrase, “right to work”.

DE­MAU­RICE SMITH: Very tricky phrase. Let’s just put the ham­mer on the nail. It’s un­true. This bill has noth­ing to do with a right to work. If folks in In­di­ana and that great leg­is­la­tion—-and they want to pass a bill that re­ally is some­thing called “Right to Work”, have a con­sti­tu­tional amend­ment that guar­an­tees every cit­i­zen a right to a job. That is a right to work. What this is, in­stead, is a right to en­force and to en­sure that or­di­nary work­ing peo­ple can’t get to­gether as a team, can’t or­ga­nize, can’t stand to­gether, and can’t fight or ne­go­ti­ate with man­age­ment on an even play­ing field.

The New York Times has the article, Romney, the Rich and the Rest, by Charles M. Blow.

First, a report from the Center on Budget and Policy Priorities last month pointed out that Romney’s budget proposals would take a chainsaw to that safety net.
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Then let’s take the fact that a report last month by the Tax Policy Center found that his tax plan would increase after-tax income for millionaires by 14.5 percent while increasing the after-tax income of those making less than $20,000 by less than 1 percent and of those making between $30,000 and $40,000 by less than 3 percent.

For a man who’s not worried about the rich, he sure seems to want them to rake in more cash.

The article above adds some details  to the previous post, Romney Isn’t Concerned.

I guess that Romney’s claim to want to fix the safety net depends on what the meaning of the word “fix” is.

Whenever one of these Republican candidates comes up with malarkey like this stuff from Romney, the reporter might say something like, “This would be a very nice plan if the data you base it on bore any resemblance to reality. Someday, if the reality ever conforms itself to your preconceptions, then voters might want to consider what you have to say.”  That is not a facetious remark.  The reason why the Republican program seems to ring true to some people, is that it might make sense at a time when the facts met their presumptions.  What the people who believe this stuff don’t seem to know is that, at this time, the facts are not aligned with the Republican program.

Thanks to RichardH for suggesting this article.

The Boston Globe published the story AG Urges Principal Forgiveness. (You may not be able to read the whole thing if you are not a Globe subscriber. The important stuff is right here, so don’t worry about subscribing to the Globe.)

Massachusetts Attorney General Martha Coakley today said mortgage giants Freddie Mac and Fannie Mae should do more to stop “unnecessary foreclosures,” including by reducing loan principal for homeowners who are having difficulty making their monthly payments.
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Melonie Griffiths, an organizer with the Jamaica Plain housing advocacy group City Life/Vida Urbana, said that even if taxpayers lose money when Fannie and Freddie reduce principal for needy homeowners, they will lose even more if the housing crisis is not resolved.

“It is one of the things that is going to get the economy back on track,’’ she said.

This is the one big idea that the Obama administration should have been pushing from the very beginning.  They spent trillions of dollars bailing out the banks which did nothing to get the economy moving again.  If they had used the same money to reduce principal on the loans, the housing sector and the consumer purchasing power would have recovered much more quickly.

I am sure the argument was that the banks would eventually pay back the loans, but the reduction of principal would be permanent.  The government would not be repaid for the money spent reducing principal.  However, as Melonie Griffiths points out, the payback to the government would not have been directly from the mortgagees, but it would come indirectly through a revived economy that would increase tax revenues and cut the deficit. No mention is made of the cost of labor immobility due to homes that cannot be sold because the mortgages are underwater.  In other recessions people have been more free to sell their homes and to move to where the jobs are.

Moreover, though the banks may have paid back the principal of the money that was lent to them in the bailout, they no way repaid the less visible bailout of extremely low interest rate borrowing from the Federal Reserve.  It is funny how nobody accounts for this bailout as money spent by the Fed. Few people may realize that the profits of the Federal Reserve Bank are paid to the U.S. Treasury.

I guess it shows that people with business experience, like Mitt Romney, are so used to looking at the small picture from the viewpoint of a single business, that they cannot see the big picture of the entire economy.  You’d think that a business person might think about  the experience of running a large company where you may have one division losing money so that another division can make more and the company comes out ahead.  This is the same thing that happens for a country and its whole economy.  It applies even more to the whole world and the world economy.  There seem to be few business people who can make the connection, although the connection seems obvious to me.

In The Boston Globe piece, The liberal case against Obama, Neal Gabler makes some points that I have been struggling with for many years.

[Ted] Kennedy believed that principles compromised might very well be principles destroyed, and while he wound up dutifully campaigning for Carter, one sensed that he suspected Reagan’s election might actually revivify liberalism – stiffen its back.
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As his own campaign neared its end, he began calling it a “cause,’’ by which he meant the cause of sustaining the forces of liberalism and buttressing the last remaining liberal institution: the Democratic Party. In short, he seemed less worried about Reagan destroying liberalism temporarily than he was about Carter sapping it permanently.
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But if you believe in the vitality of a robust Rooseveltian liberalism that can stand up to the right wing, then you might worry that Obama, by transforming the Democratic Party from an instrument for change into an instrument of compromise, and by legitimizing Republican talking points like deficit reduction over job creation, has fatally damaged progressivism – something far more important than the election prospects of any particular candidate.

The one thing that gives me pause in reading this is to wonder what Ted Kennedy thought in later life about the rise of Ronald Reagan and Reaganism.  Eight years of Ronald Reagan did nothing to revivify liberalism or stiffen its back. If anything, the Reagan era revivified and emboldened the far, far, far, right.  Or perhaps it was the softening of the damage done by Reagan/Bush/Bush by the terms of Clinton and Obama, that prevented the good effect and brought on the bad one.

The one thing that has seemed to change the terms of debate in recent years is the efforts of the Occupy movement.  The conditions have been bad enough to get large numbers of people taking to the streets in protest.  The Reagan/Bush years were not enough to do it. It took the collapse of the Bush the younger’s term to start the protests rolling. If the Occupy movement does not revive this spring, then maybe it is a sign that we do need to get conditions much worse before there will be a critical mass for a self-sustaining movement.  One of the points of the OWS movement is that you won’t find the solution to our problems in electoral politics.

Speaking of Paul Krugman as I did in my previous post, Romney Isn’t Concerned, I find this other post, Clearing Up the Confusion Over “Made in China”, by Paul Krugman.

On his blog, “The Big Picture,” the author and commentator Barry Ritholtz sends us to a Federal Reserve Bank of San Francisco paper from last summer that makes a point about which many people seem confused: Despite globalization and all that, the bulk of a consumer dollar spent in America falls on American-produced goods and services. According to the paper, titled The U.S. Content of “Made in China,”

“Goods and services from China accounted for only 2.7 percent of U.S. personal consumption expenditures in 2010, of which less than half reflected the actual costs of Chinese imports. The rest went to U.S. businesses and workers transporting, selling and marketing goods carrying the ‘Made in China’ label.”

It is amazing how China can accumulate hundreds of billions of dollars in U.S. treasury debt by running up a massive trade surplus by selling us 0.6% of our GDP with goods coming solely from China. (If I understand the report, only 11% of the content of the products marked “Made in China” originated in China.)

My engineering training has always told me that after you make a complex calculation, you need to check against other obvious data to make sure there isn’t a mistake in your calculations. When you do find a discrepancy, you need to understand where it comes from. It could be an error in your calculations or it could be an error in the comparison data.

In no case can you just walk away without explaining where the error comes from. Especially when the calculation gives very surprising results, you need to know in great detail how it came to be that the results are correct and yet disagree with all the data that went before.

I take this report with a large bag of U.S. made Morton Salt (if indeed that is where it comes from) before I buy into this analysis.

In The New York Times article, Romney Isn’t Concerned, Paul Krugman attempts to explain Mitt Romney’s words.

So Mr. Romney’s position seems to be that we need not worry about the poor thanks to programs that he insists, falsely, don’t actually help the needy, and which he intends, in any case, to destroy.

Still, I believe Mr. Romney when he says he isn’t concerned about the poor. What I don’t believe is his assertion that he’s equally unconcerned about the rich, who are “doing fine.” After all, if that’s what he really feels, why does he propose showering them with money?

I wonder if Romney and the Komen Foundation share the same public relations company.  It is amazing what these two think they can use to explain themselves and get away with it.

Thanks to MardyS for posting the link to this article on his Facebook page.