From William Black on New Economic Perspectives, we have When Romney Messes Up and Tells the Truth About Austerity.

The latest example is his May 23, 2012 interview with Mark Halperin in Time magazine.

“Halperin: Why not in the first year, if you’re elected — why not in 2013, go all the way and propose the kind of budget with spending restraints, that you’d like to see after four years in office?  Why not do it more quickly?

Romney: Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%.  That is by definition throwing us into recession or depression.  So I’m not going to do that, of course.”

So Romney is castigating President Obama for failing to do what Romney himself says he would not do if he became President.  He also admits to knowledge that for the most part he pretends he doesn’t have.  That knowledge being, that shrinking the federal budget at the wrong time would throw us into a recession or depression.  This is exactly what the professional economists have been saying for the past 60 or 70 years.

Was it better to think that Romney just didn’t know, or to find out that Romney knows full well what to do, but will say anything to undermine recovery while a Democratic President is in office?

The Daily Beast has the article Michael Tomasky on the Media’s Foolish Elizabeth Warren Witch Hunt.

The appearance Thursday morning of this Suffolk University poll (linked to above) made me think: Well, this story line is about to wrap up. If more than two-thirds of voters don’t care, then that’s that. But no—still going strong! And now it’s not the loopy, right-wing, and pro-Brown Herald, which pushed the story first, but the Globe trying to play catch up. Yes, yes, it’s all in the public interest. What, you say, the public says it isn’t interested? Well, we’ll teach them what’s in their interest!

Not being a subscriber of “the loopy, right-wing, and pro-Brown Herald, which pushed the story first”, I had no idea that The Boston Globe was pushing this story so hard because it was “trying to play catch up.”

Thanks to reader RichardH for pointing me to The Daily Beast article that completes my education on this story.

The New Economics Perspectives web site has this very interesting article, Are There Spending Constraints On Governments Sovereign in Their Currencies?.

The discussion is about “Governments sovereign in their own currency.”  In other words a government that borrows in terms of its own currency and only accepts payments in terms of its own currency.

The counter-narrative of Modern Monetary Theory (MMT) is that such a currency issuer can never involuntarily run out of money, though it can default voluntarily from an excess of stupidity. And because such nations can’t run out of money and can buy anything for sale in their own borders, including all labor resources, that means that their governments can spend what they need to spend to help solve the problems they encounter. They can afford job guarantees for anyone wanting full-time work at a living wage with a full package of fringe benefits, universal single-payer health insurance for all, a first class educational system, re-inventing their energy foundations, cleaning up their environments, re-creating their infrastructure, and doing anything else necessary to create good, democratic societies. For Governments sovereign in their own currencies, running out of money is never an issue. The real issues are resource constraints, political constraints, and constraints of poor decision making. But they are not fiscal in nature.

The fact that “such nations can’t run out of money and can buy anything for sale in their own borders” will be hard to accept for a lot of people.  The reason they cannot accept it amounts, “well, it just can’t be true.”

If you follow the link to the article, you will see lot’s of explanations of why it can be true, but if you just firmly believe that it can’t, then what more is there to be said?

Such discussions remind me of one I had with my father shortly after I started studying physics at MIT.  I told him that the crack of the whip is the sound of the tip breaking the sound barrier.  He refused to believe that.  His explanation was that nothing that is on the ground can break the sound barrier.  Only things that can fly can break the sound barrier.

Under some prescribed circumstances, the speed of sound is 768 mph.  If you can go faster than that, you break the sound barrier.  It doesn’t make any difference whether or not you gain the speed because of friction against the ground or you are using one of Newton’s laws of motion in air.

My father could never accept that, because, well just because it was so obvious.

The New York Times, parent paper of The Boston Globe, has the article Bank Regulators Under Scrutiny in JPMorgan Loss. I found the article at Truth-Out.org.

Some politicians — including Senator Bernard Sanders, independent of Vermont, and Elizabeth Warren, a Democrat running for Senate in Massachusetts — argue that Mr. Dimon’s position at the New York Fed further compromises regulatory oversight. “Mr. Dimon should not be in a position to have such influence on a major regulator,” Ms. Warren said. When asked on PBS’s “NewsHour” last week about JPMorgan, Treasury Secretary Timothy F. Geithner said that regulators needed to “be above any political influence.” He did not say Mr. Dimon should resign from the Fed, but he acknowledged that the perception of a conflict was “a problem.”

I wonder if the junior Senator from Massachusetts has a position on this issue?  Maybe he is too busy doing genealogy on Elizabeth Warren.  That is certainly easier than understanding banking at the level that Warren does.

You and I know why The New York Times has not published Scott Brown’s opinion on JPMorgan.  Come to think of it, The Boston Globe hasn’t said much about his opinion either.  The Globe seem to have its own fish to fry, and it does not relate to the major concerns of its readers.

This is from the pit bull of a newspaper The Boston Globe, Menino criticizes Brown’s focus.  The subhead is, “Says Warren’s heritage is not important issue”

On a day when Senator Scott Brown sought to fan further questions about Elizabeth Warren’s professed Native American heritage, Boston Mayor Thomas M. Menino, who has not been shy about praising Brown, made clear he is fed up with the issue.

“I think she has come clean but nobody has let her off the hook,” Menino said. “It’s not relevant at all in the campaign. Let’s talk about the real issues: education, housing, crime. Those are the real issues we should be talking about. This is one of the issues that you [use to] try to divert as a candidate because you can’t deal with the real issues.”

At a time when JPMorgan is making losing bets with taxpayers money to the tune of perhaps $5 billion and might pose an existential threat to the world financial system, Elizabeth Warren focuses on trying to restrain JPMorgan and Scott Brown focuses on Native American heritage.

I think this must be a sign that Brown’s got nothing to run on.  If I were JPMorgan, I’d pour money into Brown’s campaign and perhaps even hire some private investigators to dig up dirt on Warren if they can find any.  It is clear to the big banks that Elizabeth Warren is a person who must be stopped from gaining any power.

You also have to wonder at the resources The Boston Globe is devoting to this story.  When was the last time they did any investigative reporting that turned up anything of importance on an issue of importance?  I realize that when you devote this much energy on investigating this story, that a newspaper has to get some return on it investment.  They have to try to turn this into a story with legs, or else admit that they have wasted their time and yours.  However, even if they can’t face the facts, their readers can.

If it weren’t for the funnies, I might give up my subscription to The Boston Globe.  Although maybe they are trying to feed my prime motive for subscribing by just extending the funny pages to their news section.

Of course, Scott Brown is not going to let this go. Fortunately, I am not in charge of the Elizabeth Warren campaign, or I would start asking Scott Brown why he refuses to name the person who, according to Brown’s book, molested him when he was at summer camp. He needs to come clean, and stop protecting a child molester.

MSNBC has the story ‘Fair and square’ pricing? That’ll never work, JC Penney. We like being shafted.

I might add that we like our politics that way, too.

To be a little less cynical, I’ll include this quote from the MSNBC story.

To oversimplify for a moment, here’s Penney’s problem. They told the world that retailers only offer their best prices during crazy sales, and Penney stores would no longer host them. Sensible consumers apparently took that information to heart and decided to simply wait for such sales at other stores. As an added benefit, Penney lowered consumers’ search costs, because they now knew they didn’t need to bother driving to a Penney’s store anymore.

I have seen successful attempts at carrying off the policy of un-“shrouded price tags”.  In Dallas, Texas there was a company called Three Day Tire Store.  It opened only three days per week.  It ran massive newspaper adds full of consumer advice on buying tires.  It drew massive crowds of customers, including me.  I was happy with my purchase as compared to the shrouded incompetence I experienced buying tires from Sears.  I am not so sure about the longevity of the company, though.  In the end, there may just not have been enough consumers that wanted an education.

USA Today has actually chosen a different sound bite to headline this story.  They use Obama: Romney offers ‘cowpie of distortion’.

I prefer the headline I chose.  According to President Obama, Mitt Romney went to Iowa and described the current slow down in government spending as a “Prairie Fire Of Debt”.  He then described Romney’s prescription as putting out the supposed prairie fire of debt by using the gasoline equivalent of an extra $5 trillion in tax cuts.

In describing the costs and benefits of Romney’s business practices, you can tell by all I have written about them on this blog, that I would not be and am not nearly as charitable about them as President Obama is.

The article by L. Randall Wray, Should Growth Drive Jobs, or Jobs Drive Growth?, is largely made up of a long quote from the article Jobsworth by Edward Hadas.  I give you links to both articles because I think each one adds something worthwhile reading.

Here is part of the quote that originates with Hadas.

Politicians and other leaders have watched the job destruction with something like horror. They shouldn’t have been surprised. The unending fight against inefficiency leads to a natural employment asymmetry. As technology advances, businesses and governments usually find it easier to cut than to add jobs. Some businesses can progressively expand headcount, but in tough times there are more employers looking for ways to use less labour.

Most politicians and economists believe that GDP growth is the cure. It is considered not only the highest economic good but also the best way to create jobs. In search of higher output, governments run huge deficits, while central banks pass out money for free. The policymakers often invoke the name of John Maynard Keynes. But they twist the great economist’s ideas. As Pavlina Tcherneva points out in a recent article in the Review of Social Economy, Keynes thought “the real problem” governments should address during the Great Depression was “to provide employment for everyone”. In Keynes’s view, output follows jobs, not the other way around.

Keynes’s own preferred solution was for governments to organise projects with a high “elasticity of employment”. “There are things to be done; there are men to do them,” he said. “Why not put the two together? Why not put the men to work?” The best way for governments to create jobs quickly is still to hire people directly. A look at the dilapidated infrastructure of the United States suggests that Keynes’ prescription is still relevant.

Enthusiasts for small government might want to privatise such programmes, but they should still agree with the true Keynesian principle: it is better to pay people to work than to pay them not to. Programmes which protect the unemployed and disabled serve a valuable social purpose and payments for early retirement may be defensible, but programmes which create jobs are far preferable to either.

The concept of “natural employment asymmetry” is a nice encapsulation of an idea that is kind of obvious when you are forced to think about it.  However, the encapsulation into a simple ideas allows us isolate the phenomenon so that we can focus on the causes and possible cures.  I am sure this isn’t news to many experts in the field, but it is eye opening for me.

The article is also a reminder of what John Maynard Keynes really thought was the most direct solution and exactly why he would think that way.  This is also eye opening to me who has a very minor undergraduate level understanding of  what Keynesian economics is all about.  In another 40 years of reading a bit here and a bit there, I might be able to get to a Ph.D. level understanding.  That doesn’t stop me from trying to explain things to people who are varying numbers of years behind me in understanding.

Oh, by the way, now that I have explained to you exactly what my opinion is worth, I can give you my  answer to the question, “Should Growth Drive Jobs, or Jobs Drive Growth?” I do not think it should be an either/or proposition.  I think the lesson learned should be that we ought to attack the problem from both directions.  The value of the article is to remind us of one of the directions that we seem to have left out of what we are trying.

Romney Has Public And Private Morality Upside Down is another great little video from Robert Reich.

He’s got private and public morality upside down. He doesn’t want to regulate where regulation is necessary — at the highest reaches of the economy, where public immorality has cost us dearly, and will cost even more unless boardroom behavior is constrained. Yet he wants to regulate where regulation is least appropriate — at the level of the individual, in bedrooms and other intimate spaces, where private morality should govern.

The way I have always put it is “Republicans don’t want the government to touch their money, but their sex life is fair game. Democrats feel ok with the government touching their money, but they want their private parts left alone.”