2010 - %3, August

Financial Journalism

| Mon Aug. 30, 2010 9:05 AM PDT

Ryan Avent on the role of financial journalists:

There is a growing sense of despair among some economic writers that policymakers will not do much more to bolster the flagging global recovery. And critics who note the limits of policy intervention have a bit of a point—not all of the shortfall in demand and employment can be fixed by government intervention. But much of it can be and should be. And if it isn't, that's not because we lack the ability to conceive of helpful policies. It's because policymakers are unwilling to do what they should be doing.

It's not the job of the economics journalist to take that as a given and declare that America will have to muddle through. It's their job to correctly identify the problem, and name the names of those causing it.

By "economic writers," I assume Ryan is talking mostly about columnists and pundits here. And he's right that it does, in fact, look as though political realities will prevent any serious additional government intervention to stimulate the economy. Those political realities include White House advisors who seem unsure what to do, a president who's unwilling to speak up forthrightly about the mess we're in, and a Republican Party that's either deep in the ditch of 19th century economic principles or else figures its best chance to regain power is to make sure the economy stays in the tank. Or both. It's hard to say without being able to read minds.

But while columnists certainly have a responsibility to explain political realities to their readers, they have an even stronger responsibility to explain the economic realities as they see them. If they legitimately think there's nothing more that can be done, fine. But if they don't, they shouldn't use politics as a cover for throwing up their hands. The federal government can't wave a magic wand and make everything OK, but there are still plenty of things left in its armory. We don't have to accept 8-10% unemployment for the next four years if we don't want to.

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Enviro Links: BP Misread Pressure Data, Obama on Spill, and More

| Mon Aug. 30, 2010 8:28 AM PDT

Today in oil spill news:

BP's internal probe into the explosion of the Deepwater Horizon has found that the company's engineers misinterpreted pressure data warning of a blowout, Bloomberg reports. The full report has not yet been made public, however.

The New York Times weighs in in support of the BP Gulf Fund and its administrator, Ken Feinberg. Feinberg also talked to the Southern Governors' Association annual meeting about the claims process.

The Telegraph reports that BP will admit to spending $1 million a week on television and radio advertisements to promote the company post-spill. The figure comes in response to a congressional inquiry.

The co-chair of the oil spill commission expressed frustration with the fact that the Senate still has not approved legislation granting the panel the power of subpoena. "I wish they would give us subpoena authority and hope that they do that as soon as they come back from recess," said William Reilly on Platts Energy Week.

While everyone was paying attention to the Gulf disaster, a BP refinery released 538,000 pounds of toxic chemicals—including benzene, a carcinogen benzene—in Texas City, Texas over the course of 40 days, making a number of residents sick.

From President Obama's speech on the fifth anniversary of Katrina on Sunday: “[W]e will continue to rely on sound science, carefully monitoring waters and coastlines as well as the health of the people along the Gulf, to deal with any long-term effects of the oil spill. We are going to stand with you until the oil is cleaned up, until the environment is restored, until polluters are held accountable, until communities are made whole, and until this region is all the way back on its feet."

GOP Warming to Elizabeth Warren?

| Mon Aug. 30, 2010 8:08 AM PDT

Yes, you read that right. Apparently some GOPers are rethinking their vehement opposition to Harvard law professor and bailout watchdog Elizabeth Warren running the new Bureau of Consumer Financial Protection. A short item in the Wall Street Journal's gossipy "Heard on the Street" column today says there are whispers that "some Republicans are warming to Ms. Warren as the first consumer financial-affairs regulator over another candidate, Treasury Department Assistant Secretary Michael Barr. The thinking: Ms. Warren isn't shy about speaking her mind, so banks would know what was coming." Whereas Barr, the Journal says, might be more likely to spring big regulatory surprises on the banks, something no banker—or Republican, presumably—wants.

In one regard, the GOP is right: Warren is clear and plain-spoken in her defense of consumers and their rights. (Read David Corn's profile of Warren for more on that.) The consumer bureau, you'll remember, is largely her idea, based on a 2007 article she penned in the journal Democracy calling for a new "Financial Product Safety Commission." That commission would regulate mortgages, say, much like the existing Consumer Product Safety Commission regulates toasters.

As I reported last month, there's also been considerable opposition in the banking sector to Warren leading the new, independent consumer bureau, which will be housed in the Federal Reserve. Multiple state banking association chiefs have lobbied Congress against her potential nomination. Those same chiefs suggested that the American Bankers Association, the top banking trade association, didn't want her to run the bureau, either.

Here's my quibble with the Journal's optimistic report: Unlike the anonymous GOPers the Journal refers to, the bankers I interviewed who oppose Warren, on the record, aren't about to warm to her because she's outspoken. They oppose her because they think she doesn't understand the realities of running small community banks, the type sure to be impacted by the new consumer agency. Warren just doesn't get it, these chiefs claim. (Warren, I'm sure, would disagree.)

Sure, it's somewhat heartening for Warren supporters to hear Republicans might yet support her nomination. But don't believe for a minute that her path to running the bureau is now wide open.

Anti-Poverty Assistance Soars

| Mon Aug. 30, 2010 6:35 AM PDT

Compiling state and federal data, USA Today reports today that one in six Americans (and counting) receives some kind of government anti-poverty assistance, a new national record. That financial support includes programs like Medicaid, which serves more than 50 million people, an increase of 17 percent from nearly three years ago.

The number of food stamp recipients is equally staggering: Upwards of 40 million people, a 50 percent increase since the economy began to crumble several years back. Unemployment insurance now goes out to nearly 10 million Americans, a 400 percent increase from 2007, and welfare's national rolls include 4.4 million people, up 18 percent during the downturn.

All this growth in federal and state support, while crucial to support those out-of-work or suffering from reductions in hours and wage, costs ever more to operate. Here's more from USA Today's Richard Wolf:

As caseloads for all the programs have soared, so have costs. The federal price tag for Medicaid has jumped 36% in two years, to $273 billion. Jobless benefits have soared from $43 billion to $160 billion. The food stamps program has risen 80%, to $70 billion. Welfare is up 24%, to $22 billion. Taken together, they cost more than Medicare.

The steady climb in safety-net program caseloads and costs has come as a result of two factors: The recession has boosted the number who qualify under existing rules. And the White House, Congress and states have expanded eligibility and benefits.

Conservatives fear expanded safety-net programs won't contract after the economy recovers. "They're much harder to unwind in the long term," says Michael Tanner of the Cato Institute, a libertarian think tank.

Other anti-poverty experts say the record caseloads are a necessary response to economic hardship. "We should be there to support people when the economy can't," says LaDonna Pavetti of the Center on Budget and Policy Priorities, a liberal-leaning think tank.

At the same time we're seeing record levels of government assistance, lawmakers have sought to slash away at these same programs to save money. This month, for instance, the Senate proposed cutting the federal food stamps program by $14.1 billion over a decade. On a per family basis, that would come out to a decrease of $59 a month beginning in November 2013. As one legal expert told the Huffington Post's Arthur Delaney, "there's no precedent" for such a massive cut to a program more Americans than ever need to get by.

Post-Beck Tea Party's Strange Bedfellows

| Mon Aug. 30, 2010 4:44 AM PDT

For tea partiers, one of the great disappointments of Glenn Beck's "Restoring Honor" rally on the National Mall Saturday was the ban on political signs. After all, sign-making seems to be half the fun of going to any good tea party. So the Tea Party Patriots, a national umbrella group for thousands of tea party activists, decided to give folks from out of town a chance to wave their "NOBama signs" in the shadow of the Capitol. On Sunday morning, they convened a tea party, complete with fiery speeches from minor celebs and organizers, plus the requisite open mic session for anyone who wanted a chance to publicly call Obama a liar or read some bad poetry they'd written about liberty.

But signs or no signs, after baking in the sun all day on Saturday (the Mall was so hot that dozens of attendees had to leave the rally in ambulances), not that many Beck fans were looking to do it again on Sunday. Only about 200 die-hards made the trek up the Hill. For their trouble, they were treated with an unusual assortment of speakers. There were the usual suspects—Tea Party Patriot organizers Mark Meckler and Jenny Beth Martin—but there was also a former FBI agent known for telling wild and dubious tales about his time in the Clinton White House, and a former Republican congressman with a long history of trampling the Constitution and trading favors with disgraced lobbyist Jack Abramoff.

Songs from the Sunken Battleships of Bloody Wars

| Mon Aug. 30, 2010 3:00 AM PDT

Various Artists
Bloody War: Songs 1924-1939
Tompkins Square

After a mysterious explosion on February 15, 1898, sent the USS Maine to the bottom of Havana Harbor, killing 260 men, the ship's captain Charles Sigsbee wrote a telegram to Washington reporting the incident. The last line read: PUBLIC OPINION SHOULD BE SUSPENDED UNTIL FURTHER REPORT.

Relations with the Spanish had been deteriorating, and Sigsbee wanted to prevent the US from prematurely blaming Spain for the explosion. But he must have known his request was an impossible one. At the time, Joseph Pulitzer and William Randolph Hearst were at the height of their battle for newspaper superiority, and had already been printing sensationalized articles to fuel public animosity toward the Spanish. Sure enough, news of a Spanish attack soon filled the papers. Two months later, Congress declared war.

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Review: With King of the Beach, Wavves Abdicates

| Mon Aug. 30, 2010 3:00 AM PDT

Wavves
King of the Beach
Fat Possum

Wavves, the San Diego punk rock outfit led by early-twentysomething skater/slacker Nathan Williams, recently released this LP, its third, to the adulation of critics and fans alike. King of the Beach demonstrates a scrubbing up of the band’s once-abrasive sound, presumably for the sake of maturity and accessibility. And that’s precisely my problem with it.

I take pleasure in feedback- and reverb-soaked music that forsakes lyrical comprehensibility for sheer raw energy—a sound Wavves pinned down in its first two albums. In those recordings, Williams’ voice sounds as though snarled through a megaphone two rooms over, depositing a lot of “Oooohweeeoooohs” and distortions that embody the angst and ennui of a directionless teenager ("No Hope Kids" is a great example). It doesn’t matter what he’s singing about, be it weed, girls, or boredom; what’s important is that his I-don’t-give-a-shit swagger came across in the gestalt.

12 Most Toxic Fish (For Humans and the Planet)

| Mon Aug. 30, 2010 2:30 AM PDT

Food & Water Watch just released its 2010 Smart Seafood Guide to the safety and sustainability of more than 100 kinds of fish and shellfish. Now I still love the Monterey Bay Aquarium's pocket guides and searchable Seafood Watch site (the only place where you can geek out with a trawling fact card, as far as I know), but the Smart Seafood Guide has a few unique features worth pointing out.

For starters, while some guides only address human health issues (like mercury) and environmental problems (like overfishing), Food & Water Watch also considers seafood's socioeconomic impact. "For example, lobster is a a key part of the economy up in Maine," says Marianne Cufone, director of Food & Water Watch's fish program. "Knowing that fact is really important to some consumers."

Another handy thing: It's organized by texture and taste, so you can figure out the safest and most sustainable options in categories such as "mild" and "steak-like." This makes it easy to figure out substitutes for recipes. 

Here's Food & Water Watch's "dirty dozen" list of seafood that failed to meet at least two of the group's criteria. For more details, plus a list of alternatives for each verboten species, check out the guide. In no particular order:

1. King crab: Even though crab is abundant in some parts of the US, imports from Russia—which aren't well regulated—are much cheaper and more common.

2. Caviar, especially from beluga and other wild-caught sturgeon: Overfishing and poaching of this coveted species is very common.

3. Atlantic bluefin tuna: Extreme overfishing, plus concerns about mercury and PCB contamination.

4. Orange roughy: May contain mercury and "is particularly vulnerable to overfishing due to its long lifespan and slow maturation."

5. Atlantic flatfish (e.g. flounder, sole and halibut): Seriously overfished.

6. American eel: Concerns about mercury and PCBs.

7. Atlantic Cod: Overfished, and also has major bycatch problems.

8. Imported catfish: Much of it comes from Southeast Asia, "where use of chemicals and antibiotics is barely regulated."

9. Chilean seabass: Concerns about mercury, plus illegal fishing in Chile damages marine life and seabirds.

10. Shark: May contain mercury, also overfished.

11. Atlantic and farmed salmon: Concerns about contamination with PCB, pesticides, and antibiotics. Also, waste and germs from salmon farms often leaches out of the cages and can harm the surrounding marine life.

12. Imported shrimp: About 90 percent of it comes from countries where the seafood industry (waste control, chemical use, and labor) isn't well regulated.

We're Still at War: Photo of the Day for August 30, 2010

Mon Aug. 30, 2010 2:00 AM PDT

 

US Army ROTC Cadets assist each other in the Combat Water Survival Training and Stream Crossing obstacle. Photo via the US Army.

What Should Obama Do?

| Sun Aug. 29, 2010 9:25 PM PDT

Paul Krugman writes today that if Republicans win control of Congress in November, they're going to party like it's 1994:

So what will happen if, as expected, Republicans win control of the House? We already know part of the answer: Politico reports that they’re gearing up for a repeat performance of the 1990s, with a “wave of committee investigations” — several of them over supposed scandals that we already know are completely phony. We can expect the G.O.P. to play chicken over the federal budget, too; I’d put even odds on a 1995-type government shutdown sometime over the next couple of years.

....If I were President Obama, I’d be doing all I could to head off this prospect, offering some major new initiatives on the economic front in particular, if only to shake up the political dynamic. But my guess is that the president will continue to play it safe, all the way into catastrophe.

Consider this an open thread regarding Krugman's final paragraph. What could Obama do to help galvanize his base? Or shake up the political dynamic? Anything? Or is it all about the economy and Democrats are just doomed this year? What advice do you have for the White House?