2011 - %3, October

ECRI Says New Recession Now Inevitable

| Mon Oct. 3, 2011 6:39 PM EDT

Karl Smith looks at the latest housing and manufacturing data and feels optimistic:

There is no indication at the moment that construction is headed for contraction and the probability that manufacturing is contracting is headed downward. Thus, I believe a double-dip becoming less likely.

The Economic Cycle Research Institute looks at "dozens" of leading indexes and gets ready to slit its wrists:

The U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off....In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”

So, who do you want to believe? I'd like to believe Karl, but unfortunately, I suspect ECRI has the better of the argument. There's just too much government stimulus coming to an end soon that plainly won't be replaced thanks to Republican unwillingness to do anything that might help the economy before next year's election. Obviously the stalemate in Europe isn't helping things either. As Greg Ip says, "A global economy with decent cyclical fuel and no obvious imbalances is being betrayed by politics. Policy has pushed us over the brink in the past when it was for our own good (ie, inflation was threatening). If it happens now, it will be the first recorded instance of it happening by obduracy instead of by choice."

We are deliberately creating a new recession. It is truly an amazing thing.

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GOP, ALEC Could Make It Harder For 5 Million To Cast Ballots

| Mon Oct. 3, 2011 5:36 PM EDT

More than five million Americans could find it harder to vote in 2012 than they did in 2008, according to a new report released on Monday by the Brennan Center for Justice. The change is largely due to empowered Republican majorities in states around the country—and Lawrence Norden, the director of the Democracy Program at the Brennan Center, argues the 5 million number could be an underestimate.

"This number that we came up with, five million, is pretty conservative," Norden says. "The whole issue of access to the polls has become politicized in a way we haven't seen in the past."

President Bartlet on President Obama

| Mon Oct. 3, 2011 5:05 PM EDT
President Bartlet of The West Wing, as played by Martin Sheen.

As Barack Obama continues to frustrate many of his most ardent supporters, liberals have found themselves casting about of late for a modern-day champion—a new FDR, or Teddy Kennedy, or—dare I say it?—Josiah Bartlet.

Quick-witted, media-savvy, and unapologetically liberal (check out his evisceration of an Ann Coulter look-alike radio show host here), The West Wing's President Josiah ("Jed") Bartlet provided diehards an alternate reality from the nightmare of the Bush administration. Since it first aired in 1999—wrapping up in 2006—the show has spawned a cottage industry of fan sites and message boards.

But nowhere does the spirit of The West Wing live on like Twitter, where enthusiasts role-play under the names of their favorite characters, including the chief of staff, White House counsel, Chairman of the Joint Chiefs, and even the press secretary's goldfish. And as on screen, none holds a candle to the snark and sheer force of the POTUS character himself.

The creation of a self-described "struggling writer who was having trouble writing in character" in his late 20s, @Pres_Bartlet has racked up 23,000 followers in its 15-month, 12,000-tweet existence. Besides serving as a go-to source for timely West Wing references, @Pres_Bartlet has emerged as an internet cult figure, above all, for saying what liberals wish their real-life president would say.

Take his response to President Obama's December 2010 deal with the GOP to extend the Bush tax cuts for the wealthy, in which the president decried Republican negotiators as hostage takers: "I'm not an expert or anything, but I'm pretty sure when someone holds people hostage and demands a jet, you don't give them the damn jet." That tweet caught the attention of one follower, Rachel Maddow, who cited it approvingly on her show a couple nights later.

Despite his often biting criticism of the president, the twentysomething behind the tweets—who remains anonymous to, you know, preserve the mystique—has a lot of sympathy for the Oval Office's current occupant. When I asked him over Gchat whether his shtick was borne out of frustration with Obama, he replied, "Actually, no. I think that some of the more popular tweets have come from that feeling, but that wasn't how it was born. Being POTUS is a hard job."

Supreme Court to Decide Future of Medicaid Payments

| Mon Oct. 3, 2011 2:44 PM EDT

As the 2011-12 Supreme Court term gets underway on this first Monday in October, the first order of business on the docket will be a matter that may well determine the future of Medicaid, the federal and state operated program that provides health care to low-income Americans.

In the case of Douglas v. The Independent Living Center of the United States, the Court will decide whether a Medicaid beneficiary or service provider has the right to challenge a state law that reduces payments to Medicaid providers to a point where there will no longer be enough doctors and hospitals participating in the program to make it viable.

Obama's Tax Proposals are Pretty Easy on the Rich

| Mon Oct. 3, 2011 2:40 PM EDT

It's Greg Sargent Day here at the blog! Today he posts a chart that was worked up for him by the Tax Policy Center. The question it answers is this: if you applied various tax policies to estimated 2013 income, how would different income groups fare? Here's the answer for the very tippy top of the income spectrum:

The dark blue bar at the left represents Clinton-era policies. The light blue bar at the right represents the effects of healthcare reform plus Obama's current set of tax proposals: Letting the Bush tax cuts mostly expire for the rich, limiting the value of itemized deductions and some exclusions to 28 percent, taxing carried interest at regular rates, and eliminating tax breaks for oil and gas companies and for corporate jets.

So what happens? The well-off do better under Obama than under Clinton-era policies. The even-more-well-off also do better. The really-well-off also do better. And the genuinely rich? They do ever so slightly worse: their after-tax income is maybe 2-3% lower under the Obama proposals than under the tax rates of the Clinton era.

Class warfare! There's more at the link.

The Media and the Left

| Mon Oct. 3, 2011 1:40 PM EDT

Greg Sargent says:

The left faces an institutional barrier: The attention to Occupy Wall Street notwithstanding, news orgs tend to find right wing demonstrations of popular unrest inherently more newsworthy and deserving of sustained coverage than left wing ones.

True or false? Is there actual evidence on this score from, say, the past 30 years?

It seems to me that the nuclear freeze movement of the 80s got a fair amount of attention. So did the anti-globalization protests of the late 90s. And the Iraq war protests of the aughts. And various gay rights marches and protests. Maybe they've gotten less coverage than the tea party has gotten, but that's not immediately clear.

My sense is that when the left actually mounts a sustained popular movement, it gets a decent amount of coverage. Maybe not as much as we'd like, but that's probably what everyone who mounts a protest thinks. The problem, I suspect, isn't that popular movements of the left get ignored, but that the left hasn't been mounting any big, sustained popular movements lately. The fault, dear Brutus, etc. etc.

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Sexist Chart of the Day: Demi and Ashton Are Splitsville

| Mon Oct. 3, 2011 1:35 PM EDT

For the Best Titles of Press Releases Ever file, see this one, received today by a fellow MoJoer: "Scientific Reason for the Ashton and Demi Breakup according to a Cougar Dating Study Conducted by WhatsYourPrice.com." And there's a chart, which we've included below.

WhatsYourPrice.com is pretty much what it sounds like: A dating site based on the idea that every man and woman has a potential market "value" in dollars, depending on their age and attractiveness and some other stuff. It's even more soul-crushingly exploitive than it sounds, but more on the company in a moment. First, dig their "scientific" dishing on Demi Moore and Ashton Kutcher, celebrity lovers whose age difference has long enthralled Hollywood paparazzi, and whose coupling is now supposedly threatened by infidelity.

AshtonDemiCougarCubChart

Yes, Advanced Classes Are Alive and Well

| Mon Oct. 3, 2011 1:23 PM EDT

Last night I asked if our schools still offered advanced classes. In comments, the overwhelming answer is yes. Here are some snippets:

Here in San Mateo county, the kids are tracked from middle school into the AP classes....Virtually every Massachusetts city and town has fully funded and very much active advanced classes....There are plenty of gifted programs at the middle school level. My daughter's (N.J.) school has them. And there are certainly more now than when I was in middle school (early '70s), when there were none....I'm a parent of a middle school student in a NYC public school. She had to apply to middle schools, and was admitted based on her grades, test scores and an interview. So the tracking goes on according to school, not class.

....NYC has G&T programs from kindergarten up — each of the 31 or so districts has its own district-wide G&T program, and there are citywide G&T programs....Tracking, regulars-honors-AP still exists and generally AP programs are far tougher than they were back in my day....In my daughter's middle of the pack public high school there are AP options for multiple classes in every subject as well as an honors track....I grew up in one of the richest counties in America in the 1970s and now my child is in school in a DC suburb. There is definitely much more tracking now than at that time....Advanced courses and tracking are as alive and well in affluent Montgomery County, Maryland, as they are in Singapore....I am a middle school teacher. It is true that tracking still exists.

A few commenters did report that honors/gifted/AP tracks are in danger, but mostly because of budget cuts, not pedagogical changes.

Some obvious caveats: my readership is almost certainly nonrepresentative. I probably have lots of readers who are middle-class and above and not too many who hail from the inner city. So this doesn't tell us much about practices at low-income schools. And of course, a few dozen responses is not the same as an actual survey.

Still, I'm now even more skeptical of the idea that tracking has gone the way of the dodo. In most areas, I think that G&T classes don't start until fourth grade, but that's been the case for a long time. Thus, it's entirely possible that teacher energy in grades K-3 is now devoted disproportionately to the slower children, which means that the more advanced kids get shortchanged. But hell, that was true in my second grade class in 1965, where my teacher just gave up and had me run one of the reading groups because I already read plenty well enough. In any case, it's not clear that this is really a very big deal in early grades anyway.

I don't plan to spend a ton of time on this subject, but if I run across further data I'll pass it along. For now, though, it looks to me as if academic tracking is alive and well at grades four and above, pretty much the same as it's always been.

The Paul Ryan Revival Project: Dark Passions Edition

| Mon Oct. 3, 2011 1:10 PM EDT
A contemplative Rep. Paul Ryan (R.Wisc.).

Over the weekend, Politico ran a story reminding us that Rep. Paul Ryan (R-Wisc.)—you know, the serious, adult, courageous, wonky, Republican hero of Medicare-privatizing, Medicaid cost-shifting fame—is still around, and has opinions:

Ryan said he is committed to taking on the president’s "class warfare" rhetoric—dark passions he thinks President Barack Obama is trying to gin up among voters as he bids for a second term as commander in chief.

"The rhetoric is what I think is really dangerous because the class warfare rhetoric, it speaks to bad emotions within people,” Ryan said in an interview. "It speaks to dark emotions—anger, envy, fear—those are powerful emotions, and I suppose they can be manipulated to good political ends, but it’s reckless, in my opinion, and it divides people."

It's true that Obama seems prepared to make 2012 about protecting working class Americans and making the rich poney up some extra tax dollars. But the president's rhetoric, infused with urgent calls to close the yawning inequality gap through a more equitable tax structure, hasn’t masked that fact. Of course Obama is playing politics by placing a tax hike on the rich at the center of his legislative and electoral strategy. Raising taxes on the rich is popular. At least Obama hasn't been afraid to call his plan what it is.

Meanwhile, Ryan continues to talk as if his undeserved enlightened reformer-halo puts him above the political fray. But screwing over poor people could be called "class warfare," too. Ryan's budget plan featured $771 billion in cuts to Medicaid spending and slashed $750 billion from a host of other programs serving low-income Americans. Overall, those reductions comprised almost two-thirds of the $4.5 trillion in cuts his plan would have enacted over the next ten years, according to the Center on Budget and Policy Priorities

If Ryan is going to be stepping back into the spotlight through interviews like the one he gave Politico, he should be ready to explain how his vision of America is any less political, reckless, and divisive than Obama's.

Why Leveraging the EU's Rescue Fund Won't Work

| Mon Oct. 3, 2011 12:17 PM EDT

This quote from Wolfgang Münchau is getting a lot of attention:

We are now in the stage of the crisis where people get truly desperate. The latest crazy idea, which is being pursued by officials, is to turn the eurozone’s rescue fund into an insurance company, or worse, a collateralised debt obligation, the financial instrument of choice during the credit bubble. This is the equivalent of putting explosives into a can, before kicking it down the road.

That's a pretty punchy quote! But I was happy to read Münchau's full piece anyway, because I've been puzzled for a while over the idea of "levering up" the EU rescue fund. The basic idea is that the fund is too small: rather than its current €440 billion, it needs to be somewhere in the neighborhood of €2 trillion. But nobody wants to pony up that kind of dough, so instead there have been proposals that the €440 billion be used as the equity tranche of a gigantic security that would be sold to private investors. Voila! You have €2 trillion at your fingertips. Europe is saved!

This didn't make much sense to me, but I vaguely figured that maybe I just didn't understand it. Sadly, I think I understood it all too well. The whole point of a rescue fund is that it's so rock solid that everyone breathes a sigh of relief and there's no longer any risk of bank runs or sovereign defaults. But private investors just aren't rock solid enough. As Münchau puts it, "When the eurozone CDO fails, there are no governments that can bail it out because the governments themselves are already the equity holders of the system. This leaves the European Central Bank as the last man standing. But the whole idea of setting up a eurozone CDO is to avoid this outcome."

Right. One way or another, the bailout is going to come from either national governments, the central bank, or both. Or, alternatively, there's not going to be a bailout and all hell will break loose. All the tricks in the financial rocket scientist's toolkit can't change this grim reality. Europe either ponies up eye-watering amounts of money for its teetering banks and teetering countries or faces financial catastrophe and the end of the eurozone. Eventually they'll have to decide which fate is worse.