Rachel Maddow has the item When the media’s attention span turns reckless.

The discredited IRS “scandal” is more than just an example of congressional Republicans over-promising and under-delivering. It’s even more than a political world, desperate for something new to play with, failing to look before it leaped.
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The taint of “scandal” remains, for no reason other than the political world told the public about allegations, but decided the evidence to the contrary wasn’t important.

As one commenter noted, the Republicans call this “Mission accomplished.”

When the President recently called this a “made-up scandal”, how many of you scoffed because you stopped following the story after the initial reports were made?  How many of you followed my lead by blaming Republicans for cutting the IRS budget and then complaining that the workers didn’t adequately do more work with fewer resources?  How many of you thought that the President’s firing of the head of the IRS lent credence to the original stories?  [Oops! How did that question get in there?]

Economist Brad DeLong has posted the item on his blog A Slight Preference for Larry Summers to Be Federal Reserve Chair.

To be good choices for Federal Reserve chair, candidates must pass three tests. They must have experience at a similar job: this is not something to throw somebody into and expect them to swim. They must fear high inflation as they fear a tornado, and feel in their bones the pain of the unemployed. And they must understand and properly weight the different models of how the economy might behave. Right now, this third means that a good Federal Reserve chair must give a relatively high weight to the Keynesian model, which has been so successful at describing and forecasting the economy over the last six years.
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Larry Summers has an edge as the most creative thinker likely to successfully think outside the box should outside-the-box thinking be called for, and least likely to bind himself to an institutional consensus past its sell-by date. If times are placid, the stakes are small. If times are turbulent, outside-the-box thinking has its place.

I might be tempted to listen to DeLong’s argument if someone could present any evidence that Larry Summers fought hard at the beginning of Obama’s term to get the President to request a larger stimulus package as many leading Keynesian economists were calling for.

Is there any evidence that Summers fought  hard against the proposition that you could ask for less, and then ask for a second round if the first proved to be insufficient?  Did he fight for the proposition that you should ask for more than was necessary?  Even if you got what you asked for, you could always not use the spending authority you got if it turned out not to be needed.

When the first stimulus proved to be insufficient, is there any evidence that Larry Summers urged the President to request a second go round?  Is there evidence that Larry Summers urged the President to disprove talk that the first stimulus was a failure by using the argument that the first stimulus stopped the catastrophe, but was too weak to spur economic recovery?

In Larry Summers’ supposed highly influential role with the President, I see no evidence that he did the things I suggest needed to be done.  Lacking such evidence, I have to presume he did none of those things.  That is why I think he should be disqualified as a candidate for the Federal Reserve Chairperson.

DeLong mentions former head of Obama’s Council of Economic Advisers, Christy Romer, as a candidate for Fed Chairperson.  There is good evidence that she did take all the proper actions I mentioned above and that Larry Summers took an active role in disparaging her expertise.  I believe she resigned from the council out of frustration, and went back to her position as Economics Professor at The University of California, Berkeley.

The Real News Network highlighted the following CNN interview, Glenn Greenwald Destroys CNN’s Jeff Toobin Over Bradley Manning and Snowden.

Without judging the guilt or innocence of either Bradley Manning or Edward Snowden, I must charge Jeff Toobin with overacting, and Glenn Greenwald with under destroying.

Jeff Toobin emphasized all the foreign service officers who collected this information expecting it to be kept secret. He felt that Manning had betrayed these people and their life’s work. Toobin acted as if none of those people had any qualms about what was being hidden. Toobin acted as if none of the people in the know wanted to disclose this information, but could not take the punishment that would go along with the disclosure.

Then Toobin kept emphasizing the number of documents that were disclosed. Since when do we measure the damage to national security by the number of documents instead of by the sum total of the information that was disclosed? A person could disclose a billion documents, and not do as much damage as the disclosure of one top secret document depending on what was in those documents.

If Toobin has to resort to this type of exaggeration to make his case, it would make me think he has a weak case based only on the facts. Fortunately, no judicial decisions are based on anything Toobin has to say. So the merits of both cases are still left to be argued by rational people. Rational people are those who can step back, catch their breath, and can get control of their emotions before making arguments or coming to a conclusion.

The New York Times has the story Weighing Pick for Fed Chief, Obama Defends Summers.

President Obama on Wednesday offered a strong defense of his potential choice of Lawrence H. Summers to head the Federal Reserve, though he said no final choice had been made.
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Mr. Obama did mention another prime candidate for the Fed job, Janet L. Yellen, and noted that he did not know whether there were major policy differences between the candidates. Mr. Summers and Ms. Yellen have become the subjects of an unusually open campaign by lawmakers and others to try to influence the president’s selection.
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The president also reassured Congressional Democrats on Wednesday that he would not “sell out” his party’s principles as his White House tries to negotiate a budget deal with Senate Republicans this fall.

I think the President has heard some of the push back from his own supporters on issues of the economy.  He seems to have taken the message to heart about negotiating budget deals.  I am not sure he really understands the issue of Larry Summers.  At least he has acknowledged that there is another candidate for the spot of Federal Reserve Chairman.

I think getting up in arms is a good thing for us supporters of the President to do. We can’t always be sure he is tuning up his tin ear on every issue.  So it is necessary to complain loudly when we suspect he is off in another world.  He does seem to respond if we shout loudly enough.

In a comment to my previous post, Obama Proposes Deal Over Taxes and Jobs, I asked readers to look at President Obama’s Bargain For The Middle Class to see if it would be safe for me to look at.

Reader MardyS took up the task.  He assured me that I would not be disappointed in what I saw.  The following video is one of the items from that web page:

This excerpt of the speech provided by the Obama administration does make the President’s proposal sound better than the impression I got from reading the news reports of his proposal.

I finally decided to read one of the stories associated with this headline.  The New York Times story Obama Proposes Deal Over Taxes and Jobs finally wore me down to the point of reading this.

President Obama came to a cavernous Amazon distribution center here Tuesday and backed a cut in corporate tax rates in return for a pledge from Republicans to invest in more programs to generate middle-class jobs.

I am finally (finally?) beginning to think that this man is dangerous when he starts negotiating with himself.  I don’t think we are going to see any progress on the economy (society) until we get Elizabeth Warren elected President.

Cutting taxes just allows corporations to keep more of their profits to sit idle while they wait for consumer demand to pick up.  They will only start hiring when the demand for product exceeds their ability to supply it with the existing work force.  The more money that gets taken out of the economy and put on the sidelines, the longer it is going to take for this to happen.

The more we enable corporations to stick it to the unions and their potential members, the longer these corporations will be able to frighten workers to work more for less.  This also delays the recovery.

It may be true that the Republicans are actually doing us a favor by not accepting President Obama’s attempts to cave into their demands.

The Real News Network has the video and transcript Mismeasuring Our Economy: Why the GDP is Not Useful.

The GDP is the most commonly cited economic metric but it doesn’t tell us what we need to know

I kept wondering when James K. Boyce would mention an important factor that gets measured in GDP, but does not produce any lasting economic value. That is the increase in value of imaginary assets like financial derivatives. During the bubble that preceded the crash, people were bidding up the value of derivatives, people were being paid for creating these derivative, and real assets were bought with the “profits”. However, as soon as people lost confidence in the imaginary assets, trillions of dollars of wealth disappeared in a very short amount of time. Yet, during the buildup, the increase in GDP due to the bubble were used to tell the voters that the economy was doing just fine. The Republicans could ignore the suffering of people from real economic decline be pretending that the rise in GDP was real and the suffering was imaginary.

The report mentioned in the video is Report by the Commission on the Measurement of Economic Performance and Social Progress, by Professor Joseph E. Stiglitz, Chair, Columbia University; Professor Amartya Sen, Chair Adviser, Harvard University; Professor Jean-Paul Fitoussi, Coordinator of the Commission, IEP

My concern about the video is reflected in the Report by the Commission on the Measurement of Economic Performance and Social Progress.

But some members of the Commission believe that the crisis provides heightened urgency to these reforms. They believe that one of the reasons why the crisis took many by surprise is that our measurement system failed us and/or market participants and government officials were not focusing on the right set of statistical indicators. In their view, neither the private nor the public accounting systems were able to deliver an early warning, and did not alert us that the seemingly bright growth performance of the world economy between 2004 and 2007 may have been achieved at the expense of future growth. It is also clear that some of the performance was a “mirage”, profits that were based on prices that had been inflated by a bubble.

Just yesterday while we were visiting cousins we remarked that it would be interesting to see where Senator Warren comes down on the issue of choosing the next Federal Reserve Chairperson.  This morning The Boston Globe has two items.

The story Warren signs letter backing Yellen to lead the Fed settles the question.

Senator Elizabeth Warren on Friday urged President Obama to appoint Janet Yellen to head the Federal Reserve, choosing to back Yellen instead of her former Harvard colleague, Larry Summers.

The Boston Globe also had the column by Shirley Leung, The case for Janet Yellen as the next Fed chairman.

“So why isn’t she a shoo-in? The ‘whispering’ campaign against her among industry types has been deafening. ‘Doesn’t understand markets.’ Translation: She may not bail us out if we get into trouble again. ‘Not assertive enough.’ Translation: She won’t stand up for us against the populists who want more regulation. ‘Lacks gravitas.’ Translation: She doesn’t show up very often in the financial media.”

I had also read elsewhere how the other candidate, Larry Summers, has the ear of President Obama.  I think it is quite possible that this loss of an ear to Larry Summers is one of the reasons that the President has been so ineffective in fixing our economic problems.  A recalcitrant minority of Republican Senators who abuse the power of the filibuster does not help in solving our economic problems, but the President just has not seemed as if he is thoroughly convinced about the correct economic policy, himself.

On issues of policy, Janet Yellen seems to be on the correct side and Larry Summers appears to be on the wrong side.  You might think this would be enough on such an important matter to make the President’s decision an easy one to make.  The trouble is that the President just does not seem to know which side is the correct side.  He has given too much ear to the wrong side since the day he came to office.

I got this email from Elizabeth Warren:

Steven — We won’t win every fight — at least, not the first time out. This week, the Senate passed a student loans bill that asks tomorrow’s students to pay drastically higher interest rates to finance lower rates today. The vote may be over, but our fight to make college more affordable — and the fight for a better deal for our students — is just getting started. In May, I introduced the Bank on Students Loan Fairness Act to give students the same low interest rates that the big banks get. If those 0.75% rate is good enough for the big banks, it’s good enough for our kids who are trying to get an education. And as long as the government continues to make hundreds of billions in profits off our students, I’ll keep fighting. In the long term, we need to do three things: First, we must eliminate government profits from student loan programs — period. Second, we must refinance existing student debt to reduce the profits that are crushing our young people and dragging down our economy. And third, we must reduce college costs so that American families can send their kids to school without mortgaging their futures and burying themselves in debt. I’m in this fight for the long haul, and I’ll keep working to attack these problems head-on and find solutions that will provide a real shot at an education for all of our students. Thank you for being a part of this — for the long haul, Elizabeth

To put it in my own words, whereas the government ought to be subsidizing higher education, instead it is actually exacting a profit from it. So the government is doing the opposite of what it ought to be doing. Cutting the government’s profit only makes it a little less bad.

Oh yes, the Democrats want to subsidize education and the Republicans want to make a profit from it. So what does the bipartisan compromise look like? The government makes more profit from the compromise than it would have with no bill at all. Seems like a nice even, bipartisan split. See what good things happen when the two sides get together and come to an agreement?

If we are going to compete in international markets by the level of education of our workforce, then we shouldn’t be charging people to get that education when our competitors are subsidizing the education of their students. And we wonder why we are falling behind?

It’s not like we can’t afford to subsidize higher education. We can’t afford not to.