The Daily Ticker has the story One Man Is Putting the U.S. Economy & Markets At Risk, Says David Kotok.

David Kotok, co-founder and chief investment officer of Cumberland Advisors, had been expecting further gains in stocks, but now he tells The Daily Ticker that the market and the economy are vulnerable because of one man — Senator Rand Paul.

Can you imagine putting something as important as the Fed under the oversight of this dysfunctional Congress? It is not that Rand Paul wants to have oversight of the Fed. The problem is that he wants the Fed to go back to the same policy that even Milton Friedman said made the great depression worse.

The fiscal irresponsibility of the Congress is in not allowing enough stimulus so that the Fed is forced to use its only policy tool, monetary easing, as ineffective as it might be.

The Fed has made liquidity flow freely enough so that monetary policy is no longer a drag on the economy. Beyond that, only a strong dose of fiscal stimulus can help. Given that we need trillions of dollars in investment in our infrastructure regardless of the economic conditions, wouldn’t doing this investment when the costs are low and the economy needs stimulus be the best time to do it?

We certainly don’t need massive infrastructure investment when the economy is roaring along and such investment would compete for non-monetary resources that can be productively used in the private sphere.

Admittedly there is no logic I can use to dissuade people who think that Ron and Rand Paul are geniuses when it comes to their ideas about the Fed and the economy in general.

Alternet has the article Meet 3 Master Manipulators of America’s Oligarchy: Financiers Stanley Druckenmiller, Pete Peterson and John Arnold form a trifecta of treachery.

We bring you profiles of three financiers who never made a useful thing in their lives, including one who helped bring you the Enron disaster. They are united in their efforts to blame ordinary people for Wall Street-driven economic woes and carve out another pound of your flesh for the rich. Money is no object in their quest.

I have known about Pete Peterson for quite a while, but I had not heard of the other two until now. What confuses the heck out of me is that I have a lot of respect for Simon Johnson, even though his resume shows a stint at the Peterson Foundation. Could it be that Johnson escaped that job unscathed?

Warning: Under no circumstances should relatives of Steve Greenberg read any further.

The Real News Network has the video Max Blumenthal’s Goliath, Life and Loathing in Greater Israel – Pt1.

On Reality Asserts Itself with Paul Jay, author Max Blumenthal discusses his new book and traces the rise of Avigdor Lieberman and current policies of ethnic cleansing in Israel

As they get published, I’ll add upcoming parts of this series to this blog post.

October 30. 2013

Ethnic Cleansing and the Israeli “Center ” – Blumenthal Pt2

In this episode of Reality Asserts Itself with Paul Jay, Max Blumenthal author of Goliath – Life and Loathing in Greater Israel, looks at Tzipi Livni who’s support for expelling Israeli Palestinians even surprised Condoleezza Rice

Compare Blumenthal’s description of Nakba (much more in the video)

BLUMENTHAL: Well, there is the–the most remarkable of these laws was the Nakba Law, which–you know, the Nakba is a reference to the Palestinian catastrophe, the ethnic cleansing of 750,000 Palestinians from what became the state of Israel in 1948. It’s a continuous process. And there are Palestinian citizens of Israel who go out during what is known as Israeli Independence Day, May 15, 1948, which also happens to be the date of that marks their catastrophe, and they’ll observe the tragedy of this moment for them.

to the mythology upon which I was raised.

I was told that when Israel was created, the leaders of the Palestinians unnecessarily frightened the Palestinians into leaving voluntarily. There was no need for this fear, because the Israelis would have been glad to live peacefully with the Palestinians. In fact the leaders just wanted their followers to leave so that they could get the war over quickly and drive the Israelis out of the middle east. After not winning the war, the Palestinians wanted to return. The Israelis rightfully told them that they had forfeited their right of return because of their disloyalty and their voluntary abandonment of their property. (See Myths & Facts: A Guide to the Arab-Israeli Conflict)

As an adult, I used to have discussions with a Palestinian with whom I worked and with whom I became a friend. I thought I was being reasonable in saying, “You may not agree with the story I grew up with, but can you admit that if a people believed this story, they would have a reason for the anti-Palestinian feelings that they do?” And I thought he was just being unreasonable for not conceding my point. I have learned a lot since those days in the 1980s.

Netanyahu’s Greater Israel Based on Expulsion and Annexation

October 3, 2013

Architect of Apartheid in Israel: “If we don’t kill, we will cease to exist” – Blumenthal Pt4

In this episode of Reality Asserts Itself with Paul Jay, Max Blumenthal looks at Arnon Sofer, one of Israel’s most important strategic thinkers, who developed plans to defend Jewish demographics

Racism, Occupier and the Occupied – Blumenthal Pt5

In the final episode of this Reality Asserts Itself with Paul Jay, Max Blumenthal responds to critics who say he has not dealt with the effect of terrorist attacks and anti-Jewish propaganda in the Arab world in strengthening racist and apartheid opinion in Israel

The Wall Street Cheat Sheet has the article Rand Paul: I’ll Block Yellen Unless My Bill Gets a Vote.

Procedurally, Paul could only stop a vote on Yellen’s confirmation if he had the support of 40 other Senators in the body. CNBC reported that the junior senator from Kentucky released a statement saying he would tie voting on confirmation of the new Fed chair to voting on his own bill, the Federal Reserve Transparency Act, an effort that would remove current oversight on the Fed and institute a system of audit involving figures from Congress. The measure would effectively limit the U.S. central bank’s independence.

The Republicans’ appetite for making fools of themselves seems insatiable.  Can you imagine giving the dysfunctional Congress any type of oversight for the Fed?

If Rand Paul could have forced the Fed to go by his policies since 2008, we’d now be in such a deep depression that their would be breadlines all over the country and there would be 25% unemployment.  How could I make such a prediction?  The policies that Rand Paul endorses were exactly the policies that were followed until FDR took office in 1933, and the result I described was exactly what happened then.  Ben Bernanke has had the Fed following its current policies exactly because Ben Bernanke is a deep student of what went on in the Great Depression.  Even Milton Friedman blames these policies for causing the depression.  Of course Milton Friedman did fudge the data so that he could blame it all on monetary policy and deny the need for fiscal policy too.  That little bit of subterfuge is what won Friedman his Nobel prize in Economics.

If you want to get an idea where compromise with Rand Paul will get us, see my graphic depiction at Why We Should Not Always Just Compromise.

Salon has the article Inside the Fox News lie machine: I fact-checked Sean Hannity on Obamacare.  This article is one of the ones that were quoted and linked to in the article I referred to in my previous post Fact-Checking Faux Noise on Obamacare.

Credit EmmieH for tracking this article down from This Week magazine.  I don’t think Emmie reads this blog, but I know RichardH does.

The PBS web site has the article Why debt and money created ‘out of thin air’ are necessary, not evil.

As for those who think they do know all the answers but haven’t spent years hearing the other side, beware. And with that, here’s this week’s q-and-a, with my answers put in the kind of simple, jargon-averse terms I try to use to explain things to myself.

The answers that Paul Solman provides are pretty good, though I wouldn’t call them flawless.  As if explanation of the real world involving human beings could be flawless.  That is why his caveat above is so necessary and so ignored by the people commenting on the article.  The comments by people who think they know the one and only true answer to these questions may be the most entertaining part of the web page.

I have one quote from my Favorite Quotes page, that really applies.

Mark Twain

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

On commenter on the post thinks silver has an intrinsic value, and that he knows what it is. I asked him if he were dying of thirst, how much silver would he give for a quart of water. What does this say about the intrinsic value of silver and the intrinsic value of water? If you can’t answer the “simple” question about silver and water, what makes anyone think they have all the answers about something as complex as money?

The Real News Network has the video interview Fmr. Goldman Sachs Trader Supports Robin Hood Tax As A Way to Move Away from Financialized Economy .

You may remember this tax from my March 2010 post The Robin Hood Tax Song.

This tax is such an unmitigated good, that there is no reason to consider this tax before touching earned benefits like Social Security and Medicare.

With such an obvious solution to revenue raising and to definancializing the economy, why would anybody look to any other action before implementing this one?

So when anyone tries to tell you that there is no other solution than cutting Social Security and Medicare, you just give them the old Bronx Cheer and/or the Razzberry.

If you were in this car wanting to get somewhere and had two opposing opinions on where to drive, would you think it reasonable to just compromise by splitting the difference between the two opinions?

So why do the press and so many in the public think that two sides should always compromise, no matter what the two opposing sides want to do?

Or do you think the Democrats should suggest driving in the ditch on the left so that compromise will get us to a reasonable position?

The Real News Network has the three part series, the above title comes from the first part.

Growing Up Black in American Apartheid – Ford Pt1

On Reality Asserts Itself with Paul Jay: Glen Ford, Executive Editor of Black Agenda Report, tells his story as a red-diaper baby, growing up facing racism in the North living with his white activist mother, and living in the Deep South with his black deejay father

Giving Grassroots Leaders a Voice – Ford Pt2

On Reality Asserts Itself with Paul Jay: Glen Ford, Exec. Editor of Black Agenda Report, talks about helping create black radio news. He says that news media creates leaders by deciding what events are important and who is authorized to speak on the importance of those events

Black Nationalism and the Peoples’ Movement – Ford Pt3

On Reality Asserts Itself with Paul Jay: Glen Ford addresses the question whether black Americans constitute a nation, and if so, what is their role in the movement of the whole people

It is interesting to watch Paul Jay struggle with what he elicited from the interviewee here. I think I got it sooner than Paul did.

Ford began with a discussion of two major tendencies in black politics.

“One is the self-determinationist tendency, that is, the political tendency that says black folks have every right to organize among each other for their own goals, regardless of what the larger society, i.e. white folks, think, and that that is legitimate,” said Ford.”

“There is also what I call the representationist strain, which says that black folks should have representation at all strata of the general society and that this can be achieved, and by–progress should be measured by the extent to which there are blacks in business, or blacks in politics, blacks in all of the various strata, and that this does not require any transformation of society.”

“These two tendencies coexist in conflict in every black brain,” said Ford. “And they are at war sometimes with each other. And I think that all black politics actually flows from this twoness, one the imperative to build a world that is worthy of black people, and the other to achieve black representation in the larger society.”

I don’t find it hard to make parallels that I can understand with what Glen Ford is trying to convey here.

Think about the Wall Street powers and their control over the “white” dominated government. They may be “white” like me, but they do not represent my thinking at all. If I had people like Elizabeth Warren in control of the government, then I might feel that there was some representation of the needs of people like me.

Black people may be proud that Barack Obama is President, but they don’t necessarily feel that he fully represents their interests.

To put the parallel on a more focused level, I might have some sense of some cultural pride to see the Jewish Joe Lieberman as President. I certainly would not feel that he represents my interests. If it were Alan Grayson, that might be a different story.

The Real News Network has the video German Exporters Benefit from European Austerity.  When I first read that headline, I thought I’d really like to see them justify this counter-intuitive conclusion.  Justify it they did. The Euro common currency certainly has what I suspect are unintended consequences. Either Germany is unknowingly taking advantage, or very cleverly learning how to take advantage.

But number two–and this is a very interesting point that came out of the conference–is this, that generally when an economy is successful at exporting, what usually happens is that the value of its currency goes up. So if we think about the United States, if we exported more, that would mean more people want to hold dollars. And when more people want to hold dollars, the value of the dollar goes up relative to other currencies, which in turn would make the U.S. less competitive in export. But Germany has the situation in which it benefits, ironically, from the fact that even though they are very successful at exports, they share the common currency, the euro, with the rest of Europe, and the rest of Europe remains in the tank, the rest of Europe is not succeeding in exporting, so that Germany is, ironically, benefiting by the fact that the euro does not appreciate, does not go up in value. And that enables Germany to continue to succeed as an exporter far more than they would be under other circumstances. So the situation is in–where Germany is able to dominate economic policymaking in Europe because they’re the most successful and largest economy–and they’ve also been able to rig the policymaking with respect to the euro, because it benefits them most. It benefits them most to be able to be an exporter that still can contain the euro, the value of the currency lower.

So the austerity agenda is helping the wealthy in Germany while it is hurting everybody else in Europe

There are a few other interesting points in the interview.  Watch the video below.