President Obama

In this good post, Jared Bernstein, who is one of the few prominent writers in economics who is often close to being right, asks “How Did Things Get So Screwed Up?” he answers that it's money, ideology, and a rejection of fact-based policy analysis. He thinks that more pragmatism and willingness to accept facts would really help our politics.

But pragmatism is a vague term, and we have to be careful about what we mean by it. Few politicians have been more pragmatic than President Obama in the sense that he is willing to compromise principles to get something done. In being so pragmatic, I think he has damaged his presidency. Read below the fold...

Bob Woodward's releasing a new book, so we are now seeing articles based on it. A few days back, The Washington Post published the ”Inside story of Obama’s struggle to keep Congress from controlling outcome of debt ceiling crisis.” This account is a pretty downbeat one of how our political leaders and President Obama handled the debt ceiling crisis of the summer of 2011. I want to comment on what for me was the most salient point: that during the crisis, the President had no “Plan B” to get around the debt ceiling beyond negotiating a deal with Congress. Read below the fold...

Who else thinks the President's speech didn't include any plans to create the 29 million full-time jobs for the dis-employed? Please raise your hand!

About jobs he said:

”We can help big factories and small businesses double their exports, and if we choose this path, we can create a million new manufacturing jobs in the next four years.”

Read below the fold...

More on liberty from Ryan's reply to the President's 2011 SOTU. These are about that old Republican hypocritical favorite, “small government.”

”The President and the Democratic Leadership have shown, by their actions, that they believe government needs to increase its size and its reach, its price tag and its power.”

What planet does Congressman Ryan live on? The Democrats have done very little to increase the size of Government. The measure of that is that the average annual growth in Federal Government spending is the lowest it's been in the period since Dwight Eisenhower became President. In addition, Federal spending as a percent of GDP is still extremely low compared to National Government expenditures by the nations mentioned in my last post, and has only risen about 5 percentage points from Bush Administration levels, in response to the economic crisis, which, remember, was caused by policies avidly supported by Paul Ryan and conservative Republicans.

In addition, the President, much to his discredit, has done all he could to keep Government expenditures revenue neutral or revenue positive, beyond expenditures for defense, the stimulus, and increases in social safety net expenditures resulting from the recession. His health care reform bill is a disgraceful attempt to bailout the insurance companies without taking them over, because he would not entertain Medicare for All, since it wasn't “revenue neutral.” Never mind that enhanced Medicare for All would have saved the private sector $900 Billion per year in Medical Costs, and that the stimulus involved in an additional $800 Billion of Federal deficit spending would probably have created an addition 2 million jobs, at least. Read below the fold...

A few days back, the President had some remarks on taxes, fairness, "The Buffett Rule," “fiscal responsibility,” and making real choices with real consequences. From my point of view, informed, in part, by the Modern Monetary Theory (MMT) approach to economics, these remarks were so wrong-headed, that I'm afraid I can't let them pass without a rebuttal. Below is a paragraph-by-paragraph commentary on some of his remarks.

The President: Read below the fold...

Last year I prepared for the SOTU by speculating about the “fairy tales” the President would tell about fiscal responsibility, fiscal sustainability and the debt/deficit problem. That series ended here, and here. Yesterday's SOTU covered many subjects, but once again, the President paid lip service to the irresponsible religion of fiscal responsibility. Here are some comments on the parts of the SOTU related to it. Read below the fold...

Here are steps the President can take to win the battle for full employment over the opposition of the Republicans.

-- First, tell Americans that they have A RIGHT to a job at a decent wage with decent fringe benefits. If the private sector can't provide these jobs, then the Government must intervene to secure this right by implementing a Federal Job Guarantee (FJG).

Read below the fold...

My friend and MMT mentor, Warren Mosler offered this fine, simply stated speech to President Obama for September 8th.

My fellow Americans, let me get right to the point.
I have three bold new proposals to get back all the jobs we lost, and then some.
In fact, we need at least 20 million new jobs to restore our lost prosperity and put America back on top.
First let me state that the reason private sector jobs are lost is always the same.
Jobs are lost when business sales go down.
Economists give that fancy words- they call it a lack of aggregate demand.
But it’s very simple.
A restaurant doesn’t lay anyone off when it’s full of paying customers,

Read below the fold...

By

Warren Mosler

(Editor's note: I'm re-posting this here from moslereconomics.com with a follow-on commentary of my own with the permission of Warren Mosler)

From Warren Buffet to Alan Greenspan,

And from all the responses to the S and P downgrade by
economists and financial professionals from the 4 corners of the world,

THE WORD IS OUT!

The US government is the issuer of the US dollar.

So no matter how large the federal deficit might be: Read below the fold...

Yesterday, must have been jobs day at The Washington Post since they ran two columns calling for job creation: one by Katrina vanden Heuvel and the other by Harold Meyerson. The crux of vanden Heuvel's column is: Read below the fold...

There have been many reactions to S & Ps action in downgrading the credit rating of the US, Apart from the widespread annoyance and repudiation of S & P and its procedures, there are some who are saying that it won't have much effect on interest rates. Others even saying that it is a “non-event,” and still others saying that S & P should be investigated and prosecuted on a number of grounds. However, I found two views of the “non-event” particularly interesting. Read below the fold...

Last December, my friend beowulf had this to say at the time Moody's began to make noises about downgrading US debt. He said:

”I don’t think we’ll see Moody’s or any other rating service based in the US ever downgrade US Treasuries. It would cause a tremendous amount of financial loss and would leave Moody’s and its executives exposed to criminal prosecution. If I were Moody’s general counsel, I’d tell the CEO in no uncertain terms, Do Not Tug On Superman’s Cape.

14th Amendment, Sect. 5

Read below the fold...

Yesterday, we actually ran over the debt ceiling of $14.294 Trillion by $50 Billion or so, which means that the Treasury has issued $52 Billion more in debt instruments than is allowed by Congress's debt ceiling, which, in turn, means that the current Administration stands in violation of the Law. In reply to this, some will say that the debt ceiling is unconstitutional so the President doesn't need to observe it. However, in the present context, I don't think that's true. Here's my argument. Read below the fold...

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An Open Letter to Bernie

Dear Bernie,

If you're really tired of the bullying then I think you need to stop believing in and start denying the basic premise the Republicans, the Blue Dogs, most Democrats and the Administration are all using to bully you and us into agreeing to spending cuts in key discretionary programs and entitlement programs, and also into not moving for more spending on jobs, better entitlement programs, including Medicare for All, and better discretionary programs we need to solve our many national problems. That premise is that the United States of America, the issuer of its own fiat currency, and the ultimate source of all US Dollars can run out of the money needed to continue to deficit spend and to pay its bills. Read below the fold...