U.S. Economy 2013 – 2014

Written by  //  August 27, 2014  //  Economy, U.S.  //  7 Comments

The Biggest Tax Scam Ever
(RollingStone) Over the next decade, corporate inversions could cost the U.S. Treasury nearly $20 billion – revenues that could other­wise pay for Head Start programs, to rebuild roads and bridges, or just bring down the deficit. The wave of inversions is threatening “to hollow out the U.S. corporate income tax base,” Lew warned in a July letter to the chief tax writers in the House and Senate. But inversions are just the tip of the iceberg. The crisis of corporate tax avoidance is far more pervasive – and destructive – than either Obama or Lew is letting on. At a moment when Congress appears impossibly divided, a strong, bipartisan consensus has, in fact, emerged in Washington: The world’s richest corporations will get away with fleecing hundreds of billions of tax dollars from the rest of us.
25 August
Unemployed take their case to Fed officials at Jackson Hole
The ten activists, most of whom were unemployed and seeking jobs, were sent as emissaries for a coalition of advocacy groups that has launched an unusual campaign from the left to press the U.S. central bank to keep monetary policy easy.
The coalition, consisting of more than 70 organizations, released an open letter to Fed officials earlier this week urging them to hold off on interest rate hikes until wages were rising more swiftly.
25 April
Thomas Piketty: The French economist US liberals love
(BBC) … you need to know a little bit about French economist Thomas Piketty and his surprise best-selling book, Capital in the Twenty-First Century.
Mr Piketty uses tax data from a variety of Western countries to tackle the question of income inequality in today’s society. He focuses in particular on the increasing concentration of wealth in the hands of an elite few – the much-talked-about “one percent”. … This is happening, Mr Piketty writes, because the rate of return on capital has been outpacing the rate of economic growth. In layman’s terms, the rich are getting richer.
To halt this “drift toward oligarchy”, Mr Piketty calls for new a progressive tax on capital – preferably a global one, to prevent wealth from being moved to low-tax nations.
Commentators and columnists on the left have embraced Mr Piketty’s book as a landmark treatise that encapsulates what they see as the challenge facing modern US society.
Paul Krugman: The Piketty Panic
“Capital in the Twenty-First Century,” the new book by the French economist Thomas Piketty, is a bona fide phenomenon. Other books on economics have been best sellers, but Mr. Piketty’s contribution is serious, discourse-changing scholarship in a way most best sellers aren’t. And conservatives are terrified. Thus James Pethokoukis of the American Enterprise Institute warns in National Review that Mr. Piketty’s work must be refuted, because otherwise it “will spread among the clerisy and reshape the political economic landscape on which all future policy battles will be waged.”
Well, good luck with that. The really striking thing about the debate so far is that the right seems unable to mount any kind of substantive counterattack to Mr. Piketty’s thesis. Instead, the response has been all about name-calling — in particular, claims that Mr. Piketty is a Marxist, and so is anyone who considers inequality of income and wealth an important issue.
12 March
Big fine imposed on ex-Goldman trader Tourre in SEC case
(Reuters) – A U.S. judge on Wednesday ordered former Goldman Sachs Group Inc trader Fabrice Tourre to pay more than $825,000 after a jury found him liable for defrauding investors in a subprime mortgage product that failed during the financial crisis.
Tourre was ordered to pay $650,000 in civil fines, and give up an additional $175,463 bonus plus interest linked to the transaction at the heart of the U.S. Securities and Exchange Commission case.
The total payout fell below the roughly $1.15 million, including a $910,000 fine, that the SEC had sought.
But the judge said a stiff sanction for the 35-year-old Frenchman was appropriate, saying Tourre’s fraud lasted for several months and noting what investigators said were his false emails and misleading materials sent to investors. “He has shown no remorse or contrition,” Forrest added, referring to Tourre. The judge also forbade Goldman from paying Tourre’s fine.
Fabrice Tourre fined a ‘fabulous’ $825,000 In the meantime, Tourre said he is focused on earning his doctorate in economics at the University of Chicago “and perusing an academic career.”
3 March
Paul Ryan’s Audit Of Federal Anti-Poverty Programs Finds Many Are Actually Very Effective
House Budget Committee Chairman Paul Ryan (R-WI) released a 204-page report on Monday analyzing the effectiveness of the nation’s anti-poverty programs 50 years after President Lyndon Johnson declared a national War on Poverty.
The assessment, which is designed to kick off his campaign to revamp federal welfare programs, broadly characterizes federal aid as counterproductive and ineffective. But [as] … Ryan’s own analysis points out, numerous progressive-minded spending programs have helped millions of Americans and significantly reduced the nation’s poverty rate. … 16 examples from Ryan’s own report of how the government [is helping] lower-income Americans make ends meet:
11 February
John Boehner To Bring Up Clean Debt-Ceiling Vote
(HuffPost) Republican leaders decided Tuesday that the United States must pay its bills and raise its debt limit with no strings attached, but will leave the politically unpopular step mostly to Democrats.
Republicans since 2010 have tied raising the borrowing cap, which currently stands at $17 trillion, to certain cuts, setting off a series of standoffs resulting in a sequestration deal in 2011 and last year’s government shutdown.
The debt ceiling is the maximum amount the Treasury Department may borrow to pay for spending programs that Congress has already authorized. Up until the last several years, the majority party in each chamber had taken the responsibility of raising it.
6 January
Yellen approved to head Fed; only Republicans vote ‘no’
Janet Yellen, a key force behind the Federal Reserve’s unprecedented and controversial efforts to boost the U.S. economy, was confirmed by the Senate on Monday to lead the central bank just as it begins to unwind that stimulus.
When she succeeds Ben Bernanke, whose second four-year term as Fed chairman expires on January 31, Yellen will become the first woman to run the Fed in its 100-year history [Yellen punches through ‘glass ceiling’ at U.S. Fed] and just one of a handful of women heading central banks globally. She is currently the Fed’s vice chair. … She won resounding support from Democrats, who were joined by 11 Republican senators. All of the no votes came from Republicans — a sign of discomfort with the U.S. central bank’s unconventional policies as well as the partisan rancor in the Senate against any of President Barack Obama’s nominees.


15 December
Blake Fleetwood: If You Want the American Dream, Go to Finland
The American dream — the notion of equal opportunity for all, the chance to pull yourself up by your boot straps and make something of yourself — is gone.
(Information Clearing House) Inequality is destroying the human wealth of our nation and is tearing the social fabric apart. And the clear consequences will be, and already are, a declining economic dynamism, life expentacy, national health, national happiness, for both rich and poor alike.
13 December
US budget deal: Congress’ epiphany that austerity right now is foolish
Congress failed to extend unemployment benefits, but the budget compromise is a significant step toward sound fiscal policy
(The Guardian) Austerity or growth? For the last several years, governments in the US and UK have chosen a misguided course of austerity, leading to disappointing economic growth in both countries. Fortunately, it appears that the US Congress is starting to recognize that austerity has gone too far. The budget compromise struck earlier this week by Democratic Senator Patty Murray and Republican Congressman Paul Ryan is a small but significant step back from the austerity that has held back the American economy.
To be sure, the agreement is far from perfect. Many of the policy choices in the package could have been much better, especially if conservatives were willing to drop their stubborn refusal to close even a single tax loophole. The budget agreement also leaves Congress with critical unfinished business: over one million jobless workers will lose their unemployment benefits at the end of this year unless Congress acts. But even with those substantial flaws, passing the Murray-Ryan agreement is certainly a better choice than continuing disastrous austerity for another year.
We Have Met the Enemy and She Is Old
(HuffPost) Our culture has always been emotional — sentimental, even — about old age. So when did older people become The Enemy? Last week a judge ruled that Detroit could move forward with its plan to cut pensions for retired city workers. This week Washington is celebrating a budget deal which harms older people economically in several ways.
And a society which grows teary-eyed with each new viewing of On Golden Pond seems okay with that.
In a December 5 opinion, a U.S. bankruptcy judge ruled that Detroit could go forward with its plans to cut city workers’ pensions. He did so despite a state law making such cuts illegal, and despite his observation that Kevyn Orr, Detroit’s unelected city manager, “did mislead the public about the status of pensions in bankruptcy.”
11 December
U.S. House passes two-year budget plan; Senate vote next week
(Reuters) – The Republican-controlled U.S. House of Representatives on Thursday passed a two-year, bipartisan budget plan that would end some automatic spending cuts on federal agencies and replace them with more targeted government savings.
By an overwhelming margin, the House passed the measure that also aims to end the partisan fighting between Republicans and Democrats over fiscal affairs, which led to last October’s 16-day partial government shutdown.
Israel’s Fischer picked to be next Fed vice chair: source
(Reuters) – Stanley Fischer, who led the Bank of Israel for eight years until he stepped down in June, has been asked to be the Federal Reserve’s next vice chair once Janet Yellen takes over as chief of the U.S. central bank, a source familiar with the issue said on Wednesday.
Fischer, 70, is widely respected as one of the world’s top monetary economists. At the Massachusetts Institute of Technology, he once taught current Fed Chairman Ben Bernanke and Mario Draghi, the European Central Bank president. Here’s Why People Are So Excited That Stanley Fischer Might Be The Deputy Fed Chief
Fischer is an unexpected and unprecedented choice, and an absolute legend in central banking circles.
This longer profile of Fischer from the Washington Post’s Dylan Matthews is worth reading, but here are a few of the reasons his rumored nomination has people so excited.
For Fed, delivering a message on policy path is new focus
(Reuters) – Now that the central question before the Federal Reserve has shifted from whether to cut its extraordinary stimulus to when exactly to pull back, the debate at next week’s meeting will center on how best to communicate that plan.
While recent and brisk improvements in the labor market have raised the chance that policymakers might taper at their meeting next week, most economists expect the Fed to keep its $85 billion-a-month bond-buying program in place for a bit longer.
But the Fed is expected to grapple with how much to telegraph about any plan to wind down its purchases, and to reinforce its commitment to keeping interest rates near zero even as it preps markets for the long road back to policy normalcy.
10 December
Budget Deal Whacks Medicare Providers
(HuffPost) Under the Budget Control Act of 2011, which set up the sequester, so-called discretionary programs were subject to 5.1 percent across-the-board cuts when the Congress’ “supercommittee” failed to find targeted savings. Most “mandatory” programs, such as Social Security and Medicaid, were exempt. But Medicare was not, and was subject to a 2 percent cut aimed at providers, worth more than $120 billion over the 10 years of the sequester.
By extending the sequester for mandatory programs, Medicare providers — including hospitals — will have to take the hit for two more years.
13 November
Obsessed with Paul Krugman: A disgraced neoliberal’s one-man crusade
Neoliberal Harvard professor and infamous Newsweek writer Niall Ferguson can’t get Paul Krugman out of his mind
(Salon) Last month, Ferguson published a three-part, 7,300-word essay on the Huffington Post and his own blog titled “Krugtron the Invincible” — the name Krugtron is a cheeky reference to ’80s cartoon character Voltron, which Krugman himself came up with. In what he most likely thinks is a tour de force, Ferguson lauds himself as the chosen one to issue a stern lesson in humility to the tyrannous Krugman and to execute the much-needed task of getting Krugman to apologize for not making accurate predictions about the financial and eurozone crises. Before I delve into his unjustifiably sanctimonious vanity project, I’d like to point out that Ferguson refers to himself not as an economist but as an economic historian. So what we have here isn’t one economist criticizing one of his peers for his work in their shared field but, instead, we are seeing a historian throwing an eloquent tantrum about one economist’s claims of what will happen in the future.
12 November
Sequestration Victims Have 2 Big Demands
NDD United — an alliance of more than 3,200 national, state and local organizations advocating against sequestration — on Tuesday released one of the most comprehensive reports to date about the impact of the 2011 Budget Control Act. The 133-page study looks at effects of the cuts in nearly every facet of society, from public health and to scientific research, to foreign affairs and weather monitoring. (READ THE REPORT HERE)
With negotiations intensifying to craft a federal budget deal by mid-December, opponents of spending cuts known as sequestration are making a two-pronged push.
They want relief from those cuts, which have already reduced government spending by $85 billion as part of roughly $1 trillion in chopping over the decade. And they want every affected government agency to be spared the pain — not just select few.
The push for a holistic solution to sequestration dates to before the policy took effect. Groups reliant on government spending calculated that there was political strength in numbers. So, they lobbied Congress collectively to try to ensure that the spending cuts were never imposed. Once the spending reductions began taking effect, the coalition cracked a bit, with Congress passing agency-specific carve-outs for meat inspectors and Federal Aviation Administration workers. Mostly, though, sequestration victims have demonstrated remarkable unity, considering the money at stake and the opportunities to act self-servingly.
5 November
United States: The Problem of Aging Infrastructure on Inland Waterways
(Stratfor) The United States continues to face the problem of aging infrastructure on major water-based transport routes. A new waterways bill that is likely to be finalized soon — the first such legislation since 2007 — addresses some of the inefficiencies in the current system. However, the larger looming problem of insufficient funding remains. The U.S. inland waterways infrastructure is old, much-needed improvements have been delayed and the total cost of rehabilitation is expected to rise.
This is not a new or unknown problem, but measures to address the problem have been limited, and there is no immediate, rapid solution. Navigable rivers are one of the United States’ inherent geographic benefits and have contributed to the nation’s economic success. Failure to update and maintain the inland waterways could lead to disruptions in the supply chain and hurt U.S. competitiveness on the global export market.
28 October
J. Bradford DeLong: Greenspan Has Left the Building
(Project Syndicate) I find his new book, The Map and the Territory, so disappointing. Greenspan portrays the US Department of Housing and Urban Development and its affordable-housing goals as playing a big role in causing the 2008 crisis. Moreover, he claims that the Dodd-Frank financial-reform legislation is a large factor holding back the recovery. Likewise, he argues that the Earned Income Tax Credit – enacted in 1975 under Republican President Gerald Ford and expanded greatly under Reagan – is a threat to Americans’ moral fiber. Too much of the book reads, as the Washington Post’s Steven Pearlstein put it, like it was lifted from the Web site of Mitt Romney’s 2012 presidential campaign.
Alan Greenspan: Never Saw It Coming — Why the Financial Crisis Took Economists By Surprise
Forecasting will always be somewhat of a coin toss. But if economists better integrate animal spirits into our models, we can improve our forecasting accuracy. Economic models should, when possible, measure and forecast systematic human behavior and the tendencies of corporate culture. Modeling will always be constrained by a lack of relevant historical precedents. But analysts know a good deal more about how financial markets work — and fail — than we did before the 2008 crisis.
(Foreign Affairs November/December issue) … after several years of closely studying the manifestations of animal spirits during times of severe crisis, I have come to believe that people, especially during periods of extreme economic stress, act in ways that are more predictable than economists have traditionally understood. More important, such behavior can be measured and should be made an integral part of economic forecasting and economic policymaking. Spirits, it turns out, display consistencies that can help economists identify emerging price bubbles in equities, commodities, and exchange rates — and can even help them anticipate the economic consequences of those assets’ ultimate collapse and recovery.
27 October
Robert J. Samuelson: The Greenspan paradox
It’s time to pounce on Alan. That’s Alan as in Greenspan, whose new book — “ The Map and the Territory: Risk, Human Nature, and the Future of Forecasting ” — has just appeared. It provides a fresh opportunity for critics to attack the former chairman of the Federal Reserve Board (1987-2006). … After every crisis, there’s a search for culprits. Greenspan was a tempting target because his reputation was so outsized. Understandably, his legacy is now said to be tarnished. But neither critics nor defenders acknowledge the real source of failure: He was too successful.
26 October
Eugene Fama, King of Predictable Markets
(NYT) Q: Do you believe in financial regulation?
A: Of course, some regulation, yes. You need a level playing field, you need the government to step in sometimes. But I think we’ve gone too far with Dodd-Frank.
Q: In the financial crisis, do you think the government should have bailed out the big banks?
A: No, I don’t. I would’ve favored nationalizing the banks, not bailing them out.
Q: Really? That’s not very libertarian, is it?
A: Well, we’re talking about realistic alternatives. It’s not credible that in a financial crisis, the government will do nothing. It never has. There are going to be demands for it to do something. So you’ve got two choices now. Nationalize them or bail them out. Bailing them out gives them terrible disincentives; it encourages them to take risks because they’ll be bailed out. So I’d nationalize them — and clean them up and then reprivatize them.
21 October
For JPMorgan, ending criminal probe proves impossible for now
(Reuters) – JPMorgan Chase & Co CEO Jamie Dimon has pleaded with and complained to the U.S. Justice Department but cannot convince the government to end its criminal probe of his bank because prosecutors are not yet certain of their findings, people familiar with the matter said.
Dimon has negotiated a tentative $13 billion deal to settle many of the U.S. investigations into mortgage bonds that JPMorgan – and the banks it bought during the financial crisis – sold to investors.
But the criminal investigation proved to be a sticking point during negotiations, the sources said, and Dimon’s inability to win this point underscores the breadth of the problems his bank faces even after it resolves these mortgage suits.
The criminal probe relates to whether JPMorgan misrepresented the quality of the mortgages it was packaging into bonds and selling to investors. …
The Wall Street Journal reported on Sunday that the Justice Department hopes to use its settlement with JPMorgan as a template for deals with other banks. The Federal Housing Finance Agency, one of the agencies negotiating with JPMorgan, is hoping to draw a $6 billion penalty from Bank of America, the Financial Times reported on Sunday. JPMorgan’s settlement with the FHFA is expected to be closer to $4 billion.

: The Best, Brightest, and Least Productive? — Are too many of our most talented people choosing careers in finance – and, more specifically, in trading, speculating, and other allegedly “unproductive” activities?
(Project Syndicate) … economic research has not yet permitted us to estimate the value to society of so many of our best and brightest making their careers in the currently popular kinds of “other finance.” Speculative activities have plusses and minuses, much that is good and some that is bad, and these are very difficult to quantify. We need to be very careful about regulations that impinge on such activities, but we should not shy away from making regulations once we have clarity. (20 September 2013)

14 October
How Sequestration And The Shutdown Dealt A Body Blow To Scientists
As congressional leaders attempt the patch together a last-minute deal to fund the federal government and raise the nation’s debt limit, scientists dependent on federal funds are looking on with concern.
For nearly the past two weeks, many of them have been denied access to work, either because the agencies that employ them have been shut down or because the facilities where they operate have been closed. The Obama administration announced Friday that four of the five Nobel Prize-winning researchers currently working for the federal government were “furloughed and unable to conduct their federal research.”
Nobel Prize winners without work are the most notable examples of the damage caused by the shutdown, but the impact is far wider.
10 October
Boehner Abruptly Changes Strategy Following Outcry From Koch Brothers And Heritage
At a press conference Thursday, House GOP leadership announced the new strategy, one day after Heritage Action CEO Michael Needham admitted the group will “give the speaker some flex on a short-term debt limit increase,” in order to extend the shutdown over Obamacare. On Wednesday, Koch officials increased the pressure with a letter for inquiring members who “have asked what our position is on this issue” that claims the conservative billionaires never supported withholding government funds over Obamacare. Privately, Koch officials told Congress a U.S. default would be a disaster.
Both groups have been driving forces throughout the debt and shutdown crises and are responsible for putting Tea Party members in Congress in the first place. Even now, it’s not clear if the Tea Party that Heritage and Koch helped to create will accept a deal on these terms, since debt ceiling truthers refuse to recognize that default is an economic threat.
9 October
Obama picks Yellen for top Fed job, urges quick Senate approval
(Reuters) – President Barack Obama nominated Federal Reserve Vice Chair Janet Yellen on Wednesday to run the world’s most influential central bank, praising her consensus-building skills and saying more needed to be done to boost U.S. employment.
Yellen, an advocate for aggressive action to stimulate economic growth through low interest rates and large-scale bond purchases, would replace Fed Chairman Ben Bernanke, whose second term ends on January 31.
5 key facts about incoming Fed chair Janet Yellen
… She has a bachelor’s degree in economics from Brown University and a doctorate from Yale, graduating in 1971. She is also married to Nobel Prize-winning economist George A. Akerlof. The steady ascent of Janet Yellen
2 October
Shutdown, debt fight highlight Republican distance from ‘big business’
(Reuters) – Big business, a traditionally powerful but pragmatic player in Republican policy-making, has found itself outflanked and marginalized by smaller conservative groups opposed to compromise in the country’s current fiscal crisis and the looming showdown over the debt ceiling.
As the shutdown of the government approaches its third day, business leaders and groups like the U.S. Chamber of Commerce are worried about the economic implications of a standoff over the debt limit, but their pleas have not moved the Republican leadership in the House of Representatives to action. Meanwhile right-wing groups like the Club for Growth and Heritage Action have gained traction, particularly as Tea Party-aligned lawmakers rise in prominence.
1 October
Hope the President has U.S. marshals with indictments present when he meets with Dimon and the other crooks of Too Big To Fail fame.
Dimon, other bankers to meet Obama Wed: report
(MarketWatch) – Jamie Dimon, the chairman and chief executive officer of J.P. Morgan Chase & Co. and other bank executives are scheduled to meet with President Barack Obama on Wednesday, according to a report Tuesday in the Wall Street Journal. The executives will go to the White House to discuss the government shutdown and efforts to raise the federal debt ceiling, the report said, quoting a person familiar with the meeting.
19 September
Finally, JPMorgan Admits The Bank Broke The Law
In the years since the financial crisis, we may not have solved too big to fail, sent any bankers to jail, or done much to prevent another financial crisis, and we certainly haven’t changed Wall Street’s devotion to money-making at all costs.
But we at least have finally gotten a bank to admit it broke the law.
In what amounts to a relatively stirring triumph of justice on Wall Street, the Securities and Exchange Commission has convinced JPMorgan Chase, the biggest U.S. bank by assets, to admit that it broke federal securities laws in its handling of the $6.2 billion “London Whale” trading debacle.
18 September
Government shutdown coming? Boehner raises stakes on defunding Obamacare. (+video)
(CSM) The GOP-led House is now poised to pass a bill that would fund government operations but defund Obamacare. The president spoke Wednesday of a ‘faction’ of House Republicans risking a government shutdown. Karl Rove: Obamacare Defunding Is An ‘Ill-Conceived Tactic’ “Going down that road would strengthen the president while alienating independents.”
The Money Behind the Shutdown Crisis
(NYT) Gridlock on Capitol Hill that could lead to a government shutdown is being backed by hard-right groups spending millions of dollars.
17 September
Why Wall Street is relieved Summers is out (and Yellen may be in) at Fed
(CSM) The Wall Street rally after Larry Summers bowed out of consideration to lead the Fed is really about the Fed’s stimulus program of ‘quantitative easing.’ Wall Street wants it to last as long as possible, and Janet Yellen would likely close the spigot more slowly.
16 September
Obama to tout economy while marking Lehman fall
(AP) — President Barack Obama is seeking credit for an economic turnaround, using the fifth anniversary of the collapse of the Lehman Brothers investment bank to highlight signs of recovery and to warn against potentially market-rattling fights over the federal budget and the nation’s debt ceiling.
Obama was scheduled to address the state of the economy Monday in a Rose Garden speech, accompanied by a selection of Americans who the White House says have benefited from the administration’s policies. The event marks the start of a week-long focus on the economy after a month of preoccupation with the crisis in Syria.
Brett House: With or without Summers, the Fed would be dovish
Larry Summers’s reluctant withdrawal from the beauty contest to become the next Federal Reserve Board chairman doesn’t change the fact that U.S. monetary policy will remain loose for years to come, regardless of who ends up leading the U.S. central bank.
With the American economy far from take-off velocity, the choice between Mr. Summers and current Fed vice-chair Janet Yellen was never a choice between a hawk and a dove; it was always a choice between different degrees of dovishness.
15 September
Larry Summers withdraws name from Fed consideration
(WaPost) In a letter dated Sunday to the president, Summers wrote that he was withdrawing his name.
“It has been a privilege to work with you since the beginning of your Administration as you led the nation through a severe recession into a sustained economic recovery,” he wrote. “This is a complex moment in our national life. I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.”
10 September
Alan Blinder: Five Years Later, Financial Lessons Not Learned
A good-though-weak law sinks under the weight of special-interest lobbies.
(WSJ) Next Sunday marks the fifth anniversary of the fateful day that investment bank Lehman Brothers filed for bankruptcy, signaling the start of a frightening financial meltdown. It’s a good time to ponder how the U.S. economy was nearly brought to ruin. But will we? Or are we already forgetting?
Years of disgraceful financial shenanigans in the 2000s, some illegal but many just immoral, brought on the Great Recession with virtually no help from any co-conspirators. Congress and President Obama reacted comparatively weakly with the Dodd-Frank Act of 2010, which certainly did not seek to remake the U.S. financial system. I am a big supporter of Dodd-Frank, despite its timidity, because laws must be graded on a curve. Sadly, even this good-though-weak law now seems to be withering on the regulatory vine. Far from being tamed, the financial beast has gotten its mojo back—and is winning. The people have forgotten—and are losing. …
Dodd-Frank was signed into law in July 2010. The Volcker rule has been tied up ever since by internal bureaucratic squabbles and external pressure from the banking industry.
In sum, the Dodd-Frank Act is taking on water fast. What can be done to help Americans remember the horrors that led to its passage?
Here’s one step. Mr. Obama will soon nominate a new chair of the Federal Reserve Board. The Fed chief is not a regulatory czar, but she or he is primus inter pares among the nation’s financial regulators. The Fed’s next chair can set a new, more determined tone going forward—or not. So it is vital that she or he be prepared to move bureaucratic mountains and fend off hordes of lobbyists opposing financial reform, not to bleed sympathy for Wall Street.
28 August
White House Not Yet Vetting Janet Yellen For Fed Chair: Report
(Reuters via HuffPost) – The White House has yet to begin vetting Federal Reserve Vice Chair Janet Yellen to take over the top job at the U.S. central bank, according to three sources with knowledge of the situation, after one report said the process had begun for her main rival for the job.
Picking a replacement for Fed Chairman Ben Bernanke, whose second four-year term ends in January, is one of the most important jobs President Barack Obama faces. The White House has said the president has not made up his mind and that no announcement is likely until the fall.
Even so, based on comments by the president and news reports, the selection process has become what appears to be a two-person competition between Yellen and former White House economic adviser Lawrence Summers.
20 August
Summers, Yellen allies wage behind-the-scenes effort to win Federal Reserve nod
(WaPost) Rarely has the appointment of a new Fed chairman been accompanied by so much commotion, penetrating even the political dead zone of mid-August. “I wouldn’t want Larry Summers to mow my yard,” Sen. Pat Roberts (Kan.) told an audience in his state this week, becoming the first Republican to announce that he would oppose a nomination of the former Treasury secretary.
The fight pits allies of Summers, who also was Obama’s top economic adviser during the darkest days of the recession, against those of rival candidate Janet Yellen, the Fed vice chairman who has been an architect of the bank’s effort to reduce unemployment rates.
The opposing camps have waged high-profile media campaigns, featuring duelingop-eds in the nation’s top newspapers, interviews defending their candidates and comments on social media. But the battle also has played out behind the scenes.
19 August
Larry Summers as Ineffectual Regulator: Tall Tales From the White House
The Obama administration’s push to get Larry Summers as Federal Reserve Board Chair is moving into overdrive as opposition based on Summers’ record seems to be growing. Last week they gave the public the story of Larry Summers as a prescient but frustrated regulator. Summers saw the problems in the subprime housing market way back in 2000, but couldn’t get anything through an obstructionist Republican Congress.
Earns Fannie MaeFannie, Freddie Masking Billions Of Dollars In Losses: Internal Report
(Reuters) – Fannie Mae and Freddie Mac are masking billions of dollars losses because of the level of delinquent home loans they carry, a federal watchdog said in an internal report, and it said the companies should be required immediately to recognize the costs of some bad mortgages.
The report, written by the inspector general for the Federal Housing Finance Agency and reviewed by Reuters, said the FHFA’s timeframe for mortgage finance companies Fannie and Freddie to have up to two years to recognize the cost of mortgages delinquent at least 180 days was “inordinately long.”
The change in the accounting treatment of these delinquent loans potentially could require Fannie and Freddie, which have rebounded to enormous profitability in the past two years as the housing market recovered, to “charge off billions of additional dollars related to loans,” the inspector general’s report stated.
10 August
Fannie, Freddie, and the Destructive Dream of the ‘Ownership Society’
Unwinding the mortgage giants won’t cure Americans of their desire to own a home, whether they can afford it or not.
(The Atlantic) The U.S. government and taxpayers did rescue these agencies in 2009 (to the tune of nearly $200 billion), and, after injecting them with capital and essentially nationalizing them, these companies started to turn a profit as the housing market slowly recovered. This month, they contributed more than $15 billion to the U.S. Treasury, and have been one factor in sharply reducing government deficits.
… These programs then combined with banks to produce the increase in home ownership, from 62 percent in the 1950s to almost 70 percent in the 2000s. The programs worked not because the docile masses were convinced to own homes but because the drive to have a home is deeply embedded in American culture (and many other cultures as well). Government and banks facilitated the realization of these desires, but it is beyond a stretch to claim that they created those desires. They stoked them, and often took advantage of them, but they did not implant and create them.

Andy Borowitz: Al Qaeda Disbands; Says Job of Destroying U.S. Economy Now in Congress’s Hands (December 2012)

The Sequester Is Going to Devastate U.S. Science Research for Decades
(The Atlantic) … one severe impact of the automatic spending cuts will only be felt years — or even decades — in the future, when the nation begins to feel the loss of important new scientific ideas that now will not be explored, and of brilliant young scientists who now will take their talents overseas or perhaps even abandon research entirely. Less than one percent of the federal budget goes to fund basic science research — $30.2 billion out of the total of $3.8 trillion President Obama requested in fiscal year 2012. By slashing that fraction even further, the government will achieve short-term savings in millions this year, but the resulting gaps in the innovation pipeline could cost billions of dollars and hurt the national economy for decades to come [emphasis added]
A wonderful example of creative thinking and swift implementation which would be impossible today
Andrew Cohen: A stirring response to a national emergency
(Ottawa Citizen) The millions who make the pilgrimage here [GRAND CANYON, Ariz.] every year come to admire the works of God. But were it not for the works of men, few would see any of them.
Without roads, they could not reach the wilderness. Without walking trails and footbridges, they could not enjoy it. Without maps, monuments and museums, they could not understand it.
Franklin D. Roosevelt knew that when he became president of the United States on March 4, 1933. A quarter of Americans were out of work. He promised “bold, persistent experimentation … to correct the flaws in our economic system.” Using government to provide relief, he created “an alphabet soup” of federal agencies. None was as popular and successful as the Civilian Conservation Corps. … On March 9, 1933, just five days after becoming president, FDR summoned Congress. On March 27, he introduced the CCC legislation. On March 31, it was passed by voice vote and signed into law. On April 7, the CCC enrolled its first member. [Emphasis added]
See also U.S. Economy 2012 and U.S. government & governance

Four in 5 Americans Face Near-poverty, No Work Under Obama
(Newsmax) Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.
Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.
25 July
The Middle Class at Center Stage
(NYT Editorial) President Obama needs to change the subject to have a successful final term, and he announced on Wednesday, in forceful terms, that he intends to do just that. In a speech in Galesburg, Ill., he said his highest priority for the next 1,276 days would be rebuilding a middle class that has been battered by globalization, technological change, and the concentration of wealth at the highest levels.
The fundamentally American idea that hard work leads to success, he said, has been undermined by an inattention to education and decades of government policies that favored only the rich. While income of the top 1 percent nearly quadrupled from 1979 to 2007, there has been almost no change in the typical family’s income.
And he wasn’t shy about pointing directly at Republicans who have made the problem worse by cutting spending when the economy needs new investments and by damaging the nation’s credit by threatening not to pay the government’s bills. The “meat cleaver called the sequester,” he said, has cost jobs, hurt the military and retarded progress in science and medicine.
Mr. Obama did not deliver a laundry list of new proposals. Most of what he advocated has been on his list for years: a major investment in rebuilding roads and power grids and school buildings; high-quality preschool for every 4-year-old; a reduction in college costs, a huge barrier between lower-income students and professional success; better incentives for retirement savings.
These ideas were good when he first proposed them as part of the American Jobs Act, and they remain essential ingredients of long-term economic growth. They are not “stale” and “tired,” as Republicans charged; they are familiar only because they remain unfulfilled. The hard-right that controls the Republican Party never really cared about the content of his proposals, anyway. It reflexively opposes whatever he supports. President Obama’s Speech On The Economy At Knox College [FULL TEXT]
24 July
Student Loan Deal Passes In Senate
(HuffPost) Borrowing for tuition, housing and books would be less expensive for college students and their parents this fall but the costs could soon start climbing under a bill the Senate passed overwhelmingly Wednesday.
The bipartisan proposal would link interest rates on federal student loans to the financial markets, providing lower interest rates right away but higher ones later if the economy improves as expected. The measure was similar to one that already had passed the Republican-led House and leaders from both chambers said they predicted the differences to be resolved before students start signing loan documents for the fall term.
The Many Reasons Larry Summers Would Be A Terrible Fed Chairman
President Obama has apparently decided that Summers is now the front-runner for the Fed job, according to the Washington Post’s Ezra Klein. MSNBC’s Christopher Hayes reported that the White House has “all but decided” to pick Summers. And CNBC’s John Harwood also reported on Monday that, when asked if Summers was the top candidate for the post, Obama said he “should be.”
23 July
Obama’s economic vision forged in 2005 commencement address at tiny Knox College
(WaPost) The centerpiece of Obama’s 2005 speech was a takedown of what he called an “ownership society” that leaves each individual responsible for their own success or failure. Instead, he backed a government role in shaping “our sense of mutual regard for each other, the idea that everybody has a stake in the country, that we’re all in it together and everybody’s got a shot at opportunity.”
18 July
Detroit files for bankruptcy, stage set for court fight
(Reuters) – Detroit filed the largest-ever municipal bankruptcy in U.S. history on Thursday, marking a new low for a city that was the cradle of the U.S. automotive industry and setting the stage for a costly court battle with creditors.
The bankruptcy, if approved by a federal judge, would force Detroit’s thousands of creditors into negotiations with the city’s Emergency Manager Kevyn Orr to resolve an estimated $18.5 billion in debt that has crippled Michigan’s largest city.
The future of retiree pension and health benefits for thousands of city workers hangs in the balance.
Stocks hit record highs on Bernanke
(Reuters) – Stock markets worldwide extended their rally on Thursday, with major U.S. indexes hitting all-time highs as the Federal Reserve again reassured investors that it was flexible on the timing for ending its stimulus program.
Fed Chairman Ben Bernanke testified before Congress for a second day on Thursday and reiterated that the Fed would only start phasing out its stimulus once it is sure the economy is strong enough to stand on its own.
11 July
‘Fabulous Fab’ trial is a test for SEC
(Reuters) – The trial of former Goldman Sachs bond trader Fabrice “Fabulous Fab” Tourre next week gives the U.S. Securities and Exchange Commission an opportunity to prove that it can win big cases tied to the financial crisis
8 July
Paul Krugman: Defining Prosperity Down
You might think that a persistently poor economy — an economy in which millions of people who could and should be productively employed are jobless, and in many cases have been without work for a very long time — would eventually spark public outrage. But the political science evidence on economics and elections is unambiguous: what matters is the rate of change, not the level.
Put it this way: If unemployment rises from 6 to 7 percent during an election year, the incumbent will probably lose. But if it stays flat at 8 percent through the incumbent’s whole term, he or she will probably be returned to power. And this means that there’s remarkably little political pressure to end our continuing, if low-grade, depression.
Someday, I suppose, something will turn up that finally gets us back to full employment. But I can’t help recalling that the last time we were in this kind of situation, the thing that eventually turned up was World War II.
29 May
Tesla Is Worse Than Solyndra
How the U.S. government’s bungled investment in the car company cost taxpayers at least $1 billion
(Slate) Tesla’s runaway success, by contrast, is demonstrating how making venture capital–style investments in risky companies—without demanding venture capital–style compensation in return—can end up costing taxpayers even more. In Silicon Valley, one Google pays for a dozen Pets.com. The government made the key mistake of loaning money to Tesla without insisting on receiving stock options, options that could have allowed the Department of Energy to pay for the Solyndra losses several times over.
20 May
More poor people now live in U.S. suburbs than cities – study
(Reuters) – The number of people living in poverty in U.S. suburbs surpassed the number of poor in cities over the past decade, driven by strong growth in overall suburban populations, according to an analysis released on Monday.
30 April
CEO Pay 1,795-to-1 Multiple of Wages Skirts U.S. Law
Former fashion jewelry saleswoman Rebecca Gonzales and former Chief Executive Officer Ron Johnson have one thing in common: J.C. Penney Co. (JCP) no longer employs either.
The similarity ends there. Johnson, 54, got a compensation package worth 1,795 times the average wage and benefits of a U.S. department store worker when he was hired in November 2011, according to data compiled by Bloomberg. Gonzales’s hourly wage was $8.30 that year.
Across the Standard & Poor’s 500 Index of companies, the average multiple of CEO compensation to that of rank-and-file workers is 204, up 20 percent since 2009, the data show. The numbers are based on industry-specific estimates for worker compensation.
15 March
David Brooks holds out some hope for Congressional collaboration
(PBS Newshour) Those of us who — we have interviews in the White House, interviews in Congress. They have differences, not as big as they think. They have a lot of mythology about the other sides. And so just having these meetings would be a good thing, personal relationships.
And so I think we have begun to see a little change in mode, as I say. Secondly, they have created space for some deals, so the people right now, there are eight senators sitting in Capitol Hill doing immigration. They’re making incredible progress, really good progress. And I think that’s part of the tune.

Distributional Consequences of Ryan Tax Plan
(Slate) The Tax Policy Center is out with its preliminary analysis of the tax side of Paul Ryan’s budget, and they’ve determined that the rate cuts he favors will create a $5.7 trillion hole over the next 10 years to be closed with the elimination of unspecified tax deductions. … It’s fine that Ryan doesn’t want to usurp the role of the Ways & Means Committee, but by naming specific tax rates without naming specific tax deductions he’s created a very confusing situation in which it’s difficult to say what the consequences of this approach would really be.
13 March
Why Paul Ryan’s Budget Matters
Paul Ryan’s budget is much more vague than he’ll admit, but much better for the budget wars than liberals might suggest
(The Atlantic)
Ryan has offered a vision. He is critical of alternate visions. He rightly calls on others to counter what he has proposed, and in the coming weeks, it’s likely they will do just that. The formula that has the right amount of debt, the right amount of stimulus, and the right way to structure needed safety nets is hardly clear to anyone, and there is room for debate and genuine disagreement about how to best structure our public sector to help generate healthcare, growth and a degree of economic stability in the years ahead.
8 March
U.S. Economy Adds 236,000 Jobs; Unemployment Rate Down To 7.7
(HuffPost) Despite constant budget fights in Washington, the U.S. economy managed one of the best months for job gains in the past year in February, driving the unemployment rate to its lowest level in more than four years.
But the job market would be even better, and the unemployment rate even lower, had not the government spent most of the recovery cutting spending and jobs. And though Wall Street may cheer February’s jobs report, the pain of government cutbacks looks to get worse as the year goes on. … But U.S. non-farm payrolls are still 3 million jobs shy of their pre-recession highs, and the jobless rate is still too high to convince the Federal Reserve to stop pumping cash into the economy.
7 March
Dr. Charles Cogan: A Modest Proposal: Furloughing the Furloughers
(HuffPost) Would it not be reasonable to ask, by leading from example, that our legislators offer themselves up for furloughing as they have decreed it to apply, for the remainder of this fiscal year, to thousands of civilian government employees?
6 March
Even Democrats Say Obama ‘Overstated’ Sequester Effects
(Newsmax) Initially the White House was full of doom and gloom, warning of interminable lines at airports, widespread firings of teachers, and quick, huge job losses in the private sector as government contracts were canceled.
That was going overboard, says former Pennsylvania Democratic Gov. Ed Rendell. “They probably went over the top in terms of saying that the consequences were going to be horrible, especially because it’s happened and the lines in the airports aren’t long, the world hasn’t changed overnight,” he told The Hill. … The first part of the sequester kicked in at the end of last week with $85 billion of indiscriminate cuts. So far the public has hardly noticed any change in government services.
… Even the day before the cuts began, Obama started to temper his words. “This is not going to be an apocalypse, I think as some people have said,” Obama told reporters.
1 March
Scale of sequestration cuts becomes clear as Obama attacks Republicans
Office of Management and Budget report outlines extent of $85bn cuts triggered by failure to reach deal by Friday deadline
(The Guardian) The long list of cuts includes relatively smaller sums – like $1m being lost for a dam project on the Colorado River and $6m cut from the Leaking Underground Storage Tank Trust Fund – to larger budgetary swipes, including $30m being removed from cultural exchange programs at the State Department. The Pentagon faces widespread cuts. It is losing some $2.6bn from its Defense Health Program and $3.4bn dollars from the navy’s operation and maintenance budget. The Army faces losing $4.6bn from its equivalent budget.
The OMB issued a stark analysis of the impact of the cuts in a letter to Congress that was issued with the report and signed by Jeffrey Zients, deputy director for management. “The cuts required by sequestration will be deeply destructive to national security, domestic investments and core government functions,” Zients wrote.
28 February
Analysis: Cuts unlikely to deliver promised budget savings
(Reuters) – On paper, there’s one thing to like about the ugly spending cuts due to kick in on Friday: $85 billion in budget savings at a time when Washington continues to bleed red ink.
In reality, the so-called “sequester” is likely to yield less than half that much in the short term.
8 January
AIG Mulling Lawsuit Alleging Unfair Bailout Terms By U.S. Government
(Reuters) – American International Group Inc, the insurer rescued by the U.S. government in 2008, drew angry condemnation from lawmakers on Tuesday after saying it may join a lawsuit that alleges the bailout terms were unfair. (Forbes) Suing The U.S. Would Kill AIG Somewhere in a parallel universe, there’s an American International Group (AIG) that spent September 2008 craftily negotiating with its creditors over credit default swaps, ultimately paying pennies on the dollar. That AIG did not become a financial pariah, was pushed by no disgruntled counterparty into bankruptcy nor bailed out by the U.S. government. Its shareholders were the luckiest on Earth, making out like crazy while the rest of the financial world crumbled.
That’s the premise of the ungrateful souls suing the U.S. government over the $182 billion federal bailout widely considered to have rescued the insurance giant from the brink of extinction.
The Crisis of the Middle Class and American Power | Stratfor
… the United States faces a potentially significant but longer-term geopolitical problem deriving from economic trends. The threat to the United States is the persistent decline in the middle class’ standard of living, a problem that is reshaping the social order that has been in place since World War II and that, if it continues, poses a threat to American power.

The fiscal cliff deal — America’s European moment
The troubling similarities between the fiscal mismanagement in Washington and the mess in the euro zone
FOR the past three years America’s leaders have looked on Europe’s management of the euro crisis with barely disguised contempt. In the White House and on Capitol Hill there has been incredulity that Europe’s politicians could be so incompetent at handling an economic problem; so addicted to last-minute, short-term fixes; and so incapable of agreeing on a long-term strategy for the single currency.
Those criticisms were all valid, but now those who made them should take the planks from their own eyes. America’s economy may not be in as bad a state as Europe’s, but the failures of its politicians—epitomised by this week’s 11th-hour deal to avoid the calamity of the “fiscal cliff”—suggest that Washington’s pattern of dysfunction is disturbingly similar to the euro zone’s in three depressing ways.

Fiscal Cliff Deal To Significantly Damage U.S. Economy

(HuffPost) The U.S. economy may have avoided falling off the fiscal cliff into a new recession, but it is still going to tumble down a rocky fiscal escarpment — and that’s not so good either.
The deal struck between the White House and Republicans to avoid the so-called “fiscal cliff” of tax increases and spending cuts is still going to hurt economic growth, economists said on Wednesday. The only question is how much.
The fiscal cliff deal delays or prevents some of the worst consequences of the cliff from taking place, but not all of them. The hit to growth will be something on the order of 1.3 to 1.75 percent, according to a handful of early estimates. That’s meaningful for an economy widely expected to muddle along at 2.3 percent gross domestic product growth next year, according to the latest survey of economists by the Wall Street Journal.
By way of comparison, the Congressional Budget Office, Federal Reserve Chairman Ben Bernanke and other economists had warned that going full Thelma-and-Louise over the fiscal cliff would have triggered a new recession in the early months of 2013. Not everybody agreed, but many economists estimated that the full cliff could cut economic growth by between 2 percent and 4 percent this year.
Republican Blockade Paralyzes America
(Spiegel) The US has managed to avoid plunging off the fiscal cliff — for now. But the compromise is not meant to last and Washington will once again be faced with tough budgetary negotiations in several weeks. Much of the blame lies with a Republican Party that refuses to budge. …
The New York Times could hardly hide its bitterness in an editorial describing the agreement as a “weak brew that remains far too generous to the rich and fails to bring in enough revenue to deal with the nation’s deep need for public investments.”
US Congress approves fiscal cliff deal
(Financial Times) House of Representatives passes legislation lifting taxes on the wealthiest Americans, but compromise bill sets stage for fresh confrontations with many issues unresolved
2 January (04:20)
United States avoids calamity in ‘fiscal cliff’ drama
* Obama wins victory in tax fight
* Vote caps weeks of budget wrangling
* House Republicans back away from plan to confront Senate
* Bill raises taxes on the wealthiest
(Reuters) – The United States averted economic calamity on Tuesday when lawmakers approved a deal to prevent huge tax hikes and spending cuts that would have pushed the world’s largest economy off a “fiscal cliff” and into recession.
The agreement hands a clear victory to President Barack Obama, who won re-election on a promise to address budget woes in part by raising taxes on the wealthiest Americans. His Republican antagonists were forced to vote against a core tenet of their anti-tax conservative faith.
1 January
The Winners and Losers in the Fiscal-Cliff Deal
Surprise! The rich and the elderly win again.
(Slate) Senate Democrats and Republicans reached a deal to undo the majority of the so-called “fiscal cliff” by extending most of the Bush tax cuts while levying Clinton-era rates on households with more than $450,000 in income. The sequester cuts agreed to as part of the 2011 deal on the debt ceiling will be delayed for two months and perhaps ultimately replaced by some other package. But the details packed into this deal reveal the real winners and losers.

7 Comments on "U.S. Economy 2013 – 2014"

  1. James Heffernan January 2, 2013 at 3:03 pm ·

    New Year’s wish:
    No longer need we ask ourselves what if
    We all should plummet from the fiscal cliff;
    So let us raise our thoughts in cheerful hope
    That we can now survive the fiscal slope.

  2. Diana Thebaud Nicholson January 20, 2013 at 11:40 pm ·

    From Nick’s Gleanings #494
    A leopard cannot change its spots nor a tiger its stripes. And neither can US lawmakers break old habits. So the legislation that rolled the fiscal cliff another couple of months down the road was laden with “pork barrel spending” that one analyst thinks could cost the US Treasury US$613BN in 2013 alone. Many people are aware there were some goodies in it for Nascar but few that it contained new, or extended old, tax breaks for a small number of companies, incl Morgan Stanley, that have big portfolios of foreign loans, for companies that transfer patents they own to offshore companies that then can earn licensing fees in a tax-free environment, for those who interpreted helping post-9/11 reconstruction in New York as a license to build high-priced condos there (as well as Goldman’s new headquarters), and for the railways, for the film industry & for hedge funds (& this is only a very partial list).

  3. Antal (Tony) Deutsch July 24, 2013 at 3:25 pm ·

    Re: The Many Reasons Larry Summers Would Be A Terrible Fed Chairman
    There is less to this story than meets the eye. I read the whole Harvard speech fairly carefully that provides the ‘evidence’ that Larry looks down on women, and there is no evidence. Larry is abrasive. He is abrasive in a most egalitarian fashion, to men, women , blacks, Caucasians etc. As president of Harvard, Larry made enemies. Much of that occurred when he insisted that faculty members who spout revolutionary/ feminist/ any other rhetoric must also publish in learned journals etc. like all other faculty members. He does not have it easy : having two uncles who are Nobel laureates raises the expectations one imagines the world to harbour. Larry’s number one mentor has been Marty Feldstein, a very able man, who I suspect stays close to his phone in October for that early-morning call from Stockholm. Marty is a Republican, who was head of the Council of Economic Advisers during the Reagan Administration. He had a very hard time with the “supply siders” , who were noisy at the time, but intellectually not in the same league as Marty. From all this, given the mandate at the Fed which for any Chairman is responsible, and the fact that he too has only one vote like the other members of the Open Market Committee, I could not reasonably predict any policy bias that might emerge from Chairman Summers.
    Janet Yellen, then an Assistant Professor in the Harvard Economics Department, had her office next door to Glenn Jenkins, with whom I used to go out to lunch in those days. Janet joined us a few times I remember her as a pleasant, quiet, unassuming person from the New York area. She is a serious professional, and for the life of me I could not predict what she would do differently as head of the Fed from Larry.

  4. Nick's Gleanings #525 August 24, 2013 at 11:06 pm ·

    Re Summers, Yellen allies wage behind-the-scenes effort to win Federal Reserve nod
    Summers invokes strong sentiments in friend and foe alike. Obama being Obama may in the end well gravitate to a decision to bypass both since the nomination of either may prove difficult to pass through the Senate without an unhealthy & unhelpful knock-them-down-and-drag-‘em-out fight.

  5. Diana Thebaud Nicholson September 8, 2013 at 2:13 am ·

    Nick’s Gleanings #527
    Summers was a major player in the Clinton Administration cabal that succeeded in having Glass-Steagall revoked, then during the next decade’s resultant free-for-all in the financial world that culminated in the Great Recession made a personal fortune advising banks how to take advantage thereof and, finally, as Obama’s White House Economic Adviser didn’t get him to dump the excessively big bank-friendly Bush 43/Hank Paulson economic/financial policies … In any case, it may not matter; for opposition to Summers is building to a point where Obama may start asking himself “is Summers really worth the trouble”, especially since he has much bigger fish to fry.

  6. Diana Thebaud Nicholson September 16, 2013 at 2:37 pm ·

    Not usually a fan of Greg Palast, however his post “Larry Summers: Goldman Sacked” http://www.gregpalast.com/larry-summers-goldman-sacked/ sounds credible and Palast is generally a good reporter (it’s his editorializing we object to).

  7. Diana Thebaud Nicholson December 16, 2013 at 3:46 pm ·

    In response to the Blake Fleetwood article If You Want the American Dream, Go to Finland. Tony Deutsch writes:
    The Finns have done remarkable things for a small nation. So have the Swiss. To me, the article is about a large proportion of the population achieving a comfortable middle-class standard of living. The American Dream, to me , meant just that and more. You can be an immigrant just off the boat, and you, or perhaps your child, can achieve riches and fame. Given sufficient donations to the right causes, perhaps even Blue Book status. The current President is the son of a graduate student on a temporary visa from Kenya. All his predecessors who come to mind had much deeper roots in the U.S.. Apple, the iconic success of the last decade, was moved and shaken by Steve Jobs, himself with not terribly deep roots in the U.S..I do not recall any poor folks from the American South having globally stellar careers. Ever. Yes, the roads and bridges are in disrepair, but the American Dream never had much to say about the public sector.
    By contrast, I am told that citizens in Geneva are still keeping track of whose ancestors supported Napoleon, and rank them accordingly. Finns, comfortable and educated as they may be, seem to prefer a socially nicely stratified society. Nothing wrong with this, but I sincerely doubt that I shall see in my lifetime a Moslem prime minister in any country of Northern Europe.
    As for the UN “index of happiness” , it is not a measure of something that cannot be measured. It is an index, invented at the UN, of the numerical prevalence of essentially social democratic values. I wish it were labelled as such.

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