Stirling Newberry's blog

The Day Obama's Honeymoon Died

Wed, 04 Feb 2009 05:21:00 -0800

In the last 24 hours, that golden halo that was over Barack Obama, is over. The Senate is about to gut his version of the stimulus bill, creating a bill that is "all tax cuts, all the time" and far too small to deal with the economic crisis. Obama has been out Reaganed, and America is set to go on a downward spiral because of it. The stimulus gutting of at least 100 billion and perhaps as much as 200 billion in spending to get just three votes: Snowe, Collins, and Ben Nelson, will mean that these Senators will get to control between 33 billion and 70 billion of spending each. 200 billion essentially ends the "spending" part, and leaves us with a bill that will be about 400 billion tax cuts, and 300 billion spending. So much for unity and bi-partisanship.

The withdrawal of Daschle destroyed another precious Obama asset: namely the uber-competence image that they had cultivated. Cool, competent, collected. Then on one day two nominees withdrew for tax problems.

Then the Republicans struck preëmptively to make sure their kind of stimulus, defense spending, continues to increase. Cuts for the poor, war for the rich. Cuts for the poor, war for the rich. As the old joke runs, this defense budget is so fat we are going to need to put a new side on the Pentagon.

The final stimulus bill will not be worthy of liberal or progressive support. Indeed liberal Senators should, at this point, rebel at this "tail wagging the dog" effect of a few dead enders. If the dead enders want the economy to face the recession with no stimulus what so ever, or only small tax cuts that will be boiled away, while bankers get bailed out, then the liberals who have any strength of conviction should go to brinksmanship mode. Of course, this won't happen, we will have another round heeled cave by the so called liberal leadership, while getting run roughshod over the "working minority" Republican government.

The take away in the beltway is that Daschle fell for being too liberal, not too conservative.

The defense budget will get fattened, and it will cost the country dearly.

The quixotic illusion of Unity Ponies is over. For all of the pandering, the "moderates on both sides" are now getting ready to gut the budget, and prove that the only thing the believe in is a failed ideology of "supply side economics." Cut taxes, raise defense spending, screw the poor. The budget will magically balance itself.

Until this generation, raised on the age of borrow and squander politics dies, there is no hope for America. And by the time it does, it will be too late. We are riding this bucket all the way down.

How to Peddle Racist BS by the The Washington Post

Wed, 04 Feb 2009 04:13:46 -0800

Today's example by Shailagh Murray and Paul Kane

The legislation represents the first major test for President Obama and an expanded Democratic Congress, both of which have made economic recovery the cornerstone of their new political mandate. The stimulus package has now tripled from its post-election estimate of about $300 billion, and in recent days lawmakers in both parties have grown wary of the swelling cost.

If this were true, the provisions under attack would not be ones that actually pay for themselves - such as contraception funding. If this were true, then the corporate tax breaks would have been slashed. What is going on is a Republican "no money for black people" offensive, with enough help from the blue dog fringe of the Democratic Party.

Remember the most important principle of American Conservative thought is that giving money to urban African-Americans corrupts our vital bodily essence. POE OPE EOP...

Auto sales continue to spiral down

Tue, 03 Feb 2009 18:55:32 -0800

Auto sales dismal in January.

Wake up and smell the recession. That's why progressives all over America are screaming for tax cuts and entitlement reform, and appointing super-conservatives to the Secretary of Commerce position. Right? Oh yes, and a law that exempts lobbyists from paying taxes. Obama really needs that one passed in a hurry.

The headline numbers for the major manufacturers were almost uniformly dismal:

Chrysler -64% GM -51% Ford -39% Toyota -32%

The internals of these numbers show that the fleet sales are part of the crusher, GM's fleet sales are down 80% year on year. Ford says fleet sales were down 65%.

Wells Fargo takes bail out money to Vegas

Tue, 03 Feb 2009 12:30:45 -0800

I couldn't make this stuff up.:

Wells Fargo, once among the nation's top writers of subprime mortgages, has booked 12 nights at the Wynn Las Vegas and its sister hotel, the Encore Las Vegas beginning Friday, said Wynn spokeswoman Michelle Loosbrock. The hotels will host the annual conference for company's top mortgage officers.

Daschle withdraws

Tue, 03 Feb 2009 10:44:31 -0800

The progressive movement is caught. Some are becoming villagized, some work for the inside. Many do not work for the inside, and are being bullied to support everything Obama does no matter how awful it is. The mantra of the DLC is "vote for us, serfs, or it is so much the worse for you." The arrogance of these insiders knows almost no bounds. As far as they are concerned everyone must work, for free, to keep the asses in nice chairs.

Dachle's withdrawal shows the pure stupidity of the insiders position. Obama has been screwing up more or less since he got power. While he has done several little things right, over all his agenda is not a progressive agenda. While he has done several little things right, his big appointments have gone to other centrists - and several have been knocked out because of failures of Obama's own political apparatus. It's up to his people to spin his mistakes, that's their job. For those of us who are not ever going to work for Obama, or get one dime from the Village, it's in our best interest to tell the truth, and make our own living. Having watched more than a dozen people die, or spiral into debt, after fighting for the cause for little or no money, this isn't a matter of nice trustafarians who want to make the world a bit better, and we are not in the boom days of the late 1990's when people could afford to have politics as a hobby. The insiders are demand that people destroy their lives, in support of an agenda which, while better than the agenda McCain would have pursued, is not a particularly good agenda, and does not lead to a better future.

We have returned to Old Politics. Old Politics is media, top-down, and micro-politics. That means that Obama sits at the top of a pyramid, and all of the benefits flow to a very small circle of people, with only a few groups that he must have the support of getting large slices of that pie. People working for that pyramid have to do what they are told. That is how it is: if you are wearing the Team Obama jersey, they you fill your blocking assignment. For people working for micro-political interests, the rules are not that much different. It is necessary, even with Obama is screwing up, to keep in line, voice opinions from the inside. But in the end, you dance with the one that brings you: if your organization needs something that Obama can back with the stroke of a pen, then it is your job to make sure that his pen stays stroked. While there can be defections on very large issues that are matters of survival, in general, what Obama wants, you want - because without his executive fiat, your micro-group, and the donations that pay your salary, are gone.

However, these same realities cut against those who are not part of the Presidential Pyramid, or working for a group willing to sell out the rest of the world for their one issue. Backing Obama, when he is wrong, is pure cost. Obama gets the credit, the micro-groups get their checks, and the backer has sold out for nothing. Being a whore is the world's oldest profession, but not getting paid means you are a slut. And sluts are even lower on the scale than whores.

For this reason Dachle's withdrawal should be a lesson. Whence the people who were going to brave the fire for Daschle, when Daschle himself has pulled out. For those on the outside the push must be more intense: back Obama strongly where he is right, but oppose just as strenuously when he is right wing, or just plain wrong. Since Obama is not a progressive, there is no percentage in progressives spending one dime of money, or one minute of effort, mincing words, spinning or covering, unless the specific project is one of importance. Thus, because the stimulus bill is a necessary one, it is worth making phone calls and demonstrating that there is a constituency for liberal government. It's a bad bill, but it could be made into a worse bill.

However, on things such as "entitlement reform," or TARP II, Obama is on his own. He wants support he has to pay for it, because these actions are not worthy of progressive support. It is not the job of people not on the payroll to make up for mistakes made to put high priced consultants - and Daschle is a high priced consultant - into government jobs, when those same high priced consultants could not pay more in taxes than most people earn, and could not deign to hire an accountant with the money flowing into their coffers.

Within the progressive movement there is a break down of discourse, because those on the inside, or those villagizing, see the rest of the movement as being their chattel slaves - people who should be willing to sacrifice their lives in order to advance the careers of the insiders themselves. This means that this wave of the progressive movement is becoming compromised, and the very basis of its existence eroded. This is part of the general falling away from a high moment when there was a broad consensus for dramatic action, which has now ebbed into a return of the domination of the Suburban Industrial Complex. Housing, health care, finance, and war are its occupations, and the rest of the country is going to be in debt slavery for a generation to keep their occupations, in many senses, going.

The reason for opposing this is simple: it will fail. The reason for opposing if you are not getting right this moment a paycheck is simple: you will personally lose everything you have for the good of people who do not care enough for the good of the people.

I will have to write this many, many, many times, because the evidence is there, but it will take some time for the low information high confirmation voters to see it. There will be a great deal of self-spinning. Partly because the conclusion: Obama's failure means far more economic hardship for no gain whatever, is a very bitter pill. But right now we have a huge fraction of GDP misallocated, and Obama is doing next to nothing about it, and indeed, has firmly said he will not do anything about it.

That means that our current crisis will turn to poor recovery, and then to a deeper and more dire one later when the partisan pendulum swings from Democrat to Republican.

Village drools over Obama as George Herbert Walker Bush's second term

Mon, 02 Feb 2009 05:33:23 -0800

The village loves a politician who can fuck the people. In their view the cycle of the Nixon era is "right ward ratchet, centrist clean up." Nixon is cleaned up by Ford and Carter. Reagan is cleaned up by George Herbert Walker Bush and Clinton. George W. Bush is cleaned up by Obama. They are happy with this, because, while they really might prefer not to have a homophobic and xenophobic America, their theory has always been that power and connections will buy them an exemption from social restrictions, on say, drug use, paying taxes, homosexuality, racial integeration, and contraception - they get the money.

This is why grand fiscal reform aka economic human sacrifice, is such a big deal. Since the 1983 change from Social Security as a pay as you go proposition, taxing inflation and demand spreading paying for it, to Social Security as a regressive tax, to be used for anything at all, and then not repaid later, the great obsession with the inside has been to find a way to cram down Social Security benefits. Privatization would, of course, be best, since that would allow the inside to directly sell snake oil investments, similar to the great rip off which is a 401k plan. However, second best is to spend the money in ways that the inside likes, and then cram down the public in the name of "responsibility." Just so you know, popping out nuclear powered aircraft carriers, losing foreign wars, jet fighters which have no enemy, and endless expansion of subsidies for corporations are "responsible." Doing things which save money and make people's lives better are "irresponsible."

Obama, in their view, could be the perfect Democratic President: spend on term cleaning up Bush's fiscal mess, his foreign policy mess, cram down Democrats on their favorite program, force people to buy health insurance at an enormous profit to insurance companies, and then be washed away by a corporate Republican who goes back to tax cuts for the wealthy.

It is a job that Barack Obama is eager to do. Having taken 4 off the table - as in "what does 2+2=, assuming that 4 is off the table?" - in every major policy area, what is left is minor fixes and minor changes to policy. He is willing to do enough about the middle class and suburbia, such as subsidies for home buying - which, you will note, the suddenly purist free traders of Washington DC are not uttering a peep about, despite the fact that we don't import subdivisions from China or Europe - so that the middle class does not rebel against being bled dry, and enough about civil liberties so that no one is in danger of having their passports revoked. He is willing to put competent people in charge, which means that Ivy and sub-Ivy league types are not behind graduates of fundamentalist degree mills for positions of authority. He is willing to do enough about global warming so that the flatheads don't feel bad. But he is not willing to sheer away the 13% or so of American GDP that is horrendously misallocated.

Thus, restrictions on executive pay are off the table, repealing the Bush cuts early is off the table, thus giving more time to profitize and smuggle the money out, comprehensive health care is out, thus keeping 5% of GDP flowing to insurance companies, really cutting the military is out, just shifting it from one war to another.

What this means for progressives is very simple: this progressive revolt is over, dead. There was a short window when the internet allowed the possibility of a progressive wave that would end run the very expensive and dying media age. What Obama did was assert "Television 2.0" - this too has been an obsession of the inside. They want everything about the old broadcast age, and they want all of the technological improvements to go to delivery and marketing. The internet is merely a better way of keeping track of, and marketing to, the little people. Obama's web strategy was exactly that: harvest money from little people for little promises, while harvesting big money from big people for big promises. Thus unions get some money and EFCA, civil libertarians get Gitmo closed down, choice groups get the global gag rule removed - but not actual full funding for contraception.

This, for those of you not paying attention, or self-spinning yourselves into dizziness, is Old Politics. Old Politics is top down, with information gathering and the patina of responsiveness to produce "buy in." Small groups get small things. The people who run those small groups get to continue to live the life they like, by harvesting donations from their small group of donors who have made a particular issue "their" issue. The small groups are happy, and they support the large initiative. Buying support for pennies on the dollar. Obama is merely doing this on the left.

Old Politics rapidly annoys the public, because they both have the large issues go against them, and they seem small issues decided by "the extremists on both sides." They thus blame "the extremists on both sides" for the erosion of American opportunity. It would be like a drunk switching between water and club soda to mix with their hard liquor, seeing this as change. The reality of course is that the top down system, itself, is the problem. Revolts against top down come in the form of "bottom up" generating the next group of small issue activists to be harvested in turn by the next party in power. Social conservatives are energized by social liberals, social liberals by social conservatives. Resource exploitation is energized by environmentalism, environmentalists by resource exploitation. Military people by war opponents. Back and forth it goes in a dynamic equilibrium which is, none the less, stable. The core - protecting the financial infrastructure and super-elite - remains in place. Faith by Science, Science by Faith. In each case the irrelevancies of packaging are focused on. Coke. Pepsi. Pepsi. Coke. Which has more vitamin C in it?

Obama has made no substantial moves to change this, but instead plugs into branding and identity politics.

Thus the village is hoping to spin Obama into the position of doing the clean up work for them, and return in due course politics to it's rightward ratchet. Anti-gay is burning itself out, as anti-abortion did, but there are other issues waiting in the wings.

What the Republican party needs is the wit to come up with a grand theme that will rally their base, and prepare them for a body blow strike against the Democratic House. With the house in hand, the Republicans can then force Obama to be little more than a Republican who is moderate on social issues. But to do this they need to persuade the big money that the Republican Party can more effectively support the core elite. There are attempts to do this, but until the big money shifts to the Republican House effort, there will be no return of the GOP.

Superbowl whining thread

Sun, 01 Feb 2009 13:29:06 -0800

If the Steelers win:

"They had the weakest road to the superbowl ever: an 8-8 team, a 9-7 team, and a team they beat twice already."

If the Cardinals win:

"It's an abomination, they got to rest their starters all season."

If the Steelers win:

"It's the officials giving it to the popular team."

If the Cardinals win:

"It's the officials giving it to Warner for the endorsements."

If the Steelers win:

"Big Ben. Worst. Superbowl. Quarterback."

If the Cardinals win:

"Arizona. Softest. Schedule. Ever."

If the Steelers win:

"Obviously it's the superbore, the most boring team won."

If the Cardinals win:

"97 million people watched a game of touch football."

What are your favorite whine lines? Beat the pass rush and list yours here.

(Also next writer to say "this steelers defense doesn't have any legendary players on it. Is missing Troy, Harrison, Farrior as legends in the making. And LeBeau, in his 50th year in the NFL, is a legend.)

(Anyone who thinks that Warner's HOF credentials rest on this game, hasn't seen the rise from grocery bagger to three time Superbowler. He's carried on his arm three teams who would not be there without him.)

(Long time Steelers fan. I believe this game is going to be a blow out one direction or another, because either the Steelers get inside Warner's head and pick him off three times, or Warner rolls up yardage. Personally, I believe that the Steelers will ball hawk in this game and have a short field, but the Cardinals are much healthier. So I'm taking the over number with confidence, and hoping that the Steelers are on the good side of it.)

It's Superbowl Sunday, and you still can't get the game streamed on line

Sun, 01 Feb 2009 10:01:17 -0800

Right now it is still not possible to get a good version of the superbowl streamed on line. I don't own a television set, I am not going to fight with the awfulness of on air television for the few things I want to watch, and more over, I don't want television I want a video window on my computer, because that is where I am most of the time.

Please get with the program people.

The Tobacco Institute of Free Trade

Sun, 01 Feb 2009 07:11:29 -0800

Sometimes it becomes obvious that people pay for stupidity, assuming that intelligence will then provide the reply for free. Suffice it to say that The Washington Post needs to fire it's idiot reporter who gets trade history wrong. American protectionism, and indeed the trade war, did not start with 1930's Smoot-Hawley. Let me take a section from the Department of State, entitled Protectionism in the interwar period:

In the decade after the end of the First World War, the United States continued to embrace the high tariffs that had characterized its trade policy since the Civil War. These were enacted, in part, to appease domestic constituencies, but ultimately they served to hinder international economic cooperation and trade in the late 1920s and early 1930s.

High tariffs were a means not only of protecting infant industries, but of generating revenue for the federal government. They were also a mainstay of the Republican Party, which dominated the Washington political scene after the Civil War. After the Democrats, who supported freer trade, captured Congress and the White House in the elections of 1910 and 1912, the stage was set for a change in tariff policy. With the 1913 Underwood-Simmons Tariff, the United States broke with its tradition of protectionism, enacting legislation that lowered tariffs (and also instituted an income tax). The reversion of Congress to Republican control during the First World War and the 1920 election of Republican Warren Harding to the presidency signaled an end to the experiment with lower tariffs. To provide protection for American farmers, whose wartime markets in Europe were disappearing with the recovery of European agricultural production, as well as U.S. industries that had been stimulated by the war, Congress passed the temporary Emergency Tariff Act in 1921, followed a year later by the Fordney-McCumber Tariff Act of 1922. The Fordney-McCumber Tariff Act raised tariffs above the level set in 1913; it also authorized the president to raise or lower a given tariff rate by 50% in order to even out foreign and domestic production costs. One unintended consequence of the Fordney-McCumber tariff was that it made it more difficult for European nations to export to the United States and so earn dollars to service their war debts.

Despite the Fordney-McCumber tariff, the plight of the American farmer continued. The wartime expansion of non-European agricultural production had led, with the recovery of European producers, to overproduction during the 1920s. This in turn had led to declining farm prices during the second half of the decade. During the 1928 election campaign, Republican presidential candidate Herbert Hoover pledged to help the beleaguered farmer by, among other things, raising tariff levels on agricultural products. But once the tariff schedule revision process got started, it proved impossible to stop. Calls for increased protection flooded in from industrial sector special interest groups and soon a bill meant to provide relief for farmers became a means to raise tariffs in all sectors of the economy. When the dust had settled, Congress had produced a piece of legislation, the Tariff Act of 1930, more commonly known as the Smoot-Hawley tariff, that entrenched the protectionism of the Fordney-McCumber tariff.

Scholars disagree over the extent of protection actually afforded by the Smoot-Hawley tariff; they also differ over the issue of whether the tariff provoked a wave of foreign retaliation that plunged the world deeper into the Great Depression. What is certain, however, is that Smoot-Hawley did nothing to foster cooperation among nations in either the economic or political realm during a perilous era in international relations. It quickly became a symbol of the "beggar-thy-neighbor" policies of the 1930s. Such policies, which were adopted by many countries during this time, contributed to a drastic contraction of international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934.

Key points: Smoot-Hawley made things worse, there is no real consensus on whether it started a trade war, and it was the continuation of a policy of Republican Tariffs that had only briefly been reversed.

The reporter feeds into the myth that the US had some kind of Free Trade before Smoot-Hawley. In fact, America had had high tariffs as part of Republican party policy for most of the post-civil war period, with only periodic easings of protective grip. Paul Bairoch tries to make a case for a "non-protectionist" 1920's arguing against the broader conception of the 1920's as protectionist, and the best he can come up with is a few small reductions in tariff rates, and an expanding volume of trade late in the 1920's. He admits that one cannot call the period "free trade" but towards more "open trade" and that largely it was a continuation of previous policies, which were, he argues, far less liberal. (Preceding from his Economics and World History)

The reality is that 1913 marked the high point of trade liberalization, and that the post-war period had very high tariff rates, in 1927 Germany had 20.4%, France 20.3%, Spain 49%, Poland 53.5% - only the United Kingdom with a 5% rate was committed to liberalization. Bairoch computes the US tariff rate at 37%.

The key point is that tariff rates began rising in 1928 and 1929, in response to agricultural deflation. Smoot-Hawley was return fire, the trade war was already on.

In the context of the Post's article then, the author should have been talking about a 1920's style "unreconstructed trade order." That's what economists label the 1920's because there was a failure to rebuild institutions in the global trade order. It was "a kinder, gentler trade war."

The reality is that elites of our period are quick to declare trade war, as Roston did in this 2001 piece:

But in today's war against terror, the Bush Administration and trade promoters in Congress and business are battling to resist the historic pattern in which commercial shipping becomes target practice and borders become moats. Since Sept. 11, President Bush and his emissaries have emphasized that agreements to lower trade barriers can help attract and hold allies to the antiterror campaign by bringing needed jobs and income to impoverished regions. "The launch of a new global trade round is important for economic recovery in the short term and for economic growth over time," U.S. Trade Representative Robert Zoellick told TIME. "A signal that the world's trading nations are committed to open markets would inject additional confidence into financial markets."

So what is the take away of this? The first is that that Smoot-Hawley was the culmination of a restrictive trade period, one which made matters worse in the context of a broken world financial and trade order. The second is that the chattering classes are all anti-protectionist when it comes to things they buy, such as imported goods, and when it comes to their economic interest in offshoring, but not when it comes to wars and housing booms, which are even more protectionist than tariffs. In short their commitment to free trade isn't really, but a club that they use very narrowly to pursue protectionism for themselves, and competition for everyone else. If we are going to have a mixed trade regime then, there is no reason not to make different decisions about who we protect.

Trillions for Tricksters, Trash for the Taxpayer

Sat, 31 Jan 2009 06:12:10 -0800

Just when you thought the Taxpayer Anal Rape Program could not be made any worse... the Team Obama-nation finds a way to sink to new depths. They are preparing what is billed as a big bang shift in the banks. More like gang bang. Bend over America. This after the President himself stepped into cancel a few hundred million of contraception funding - funding that pays for itself in saved services costs - in the stimulus bill.

Let's go over the nature of an American Republic: it consists of a mandate, a meaning, and a mechanism which operates through the meaning to advance the mandate. What Americans did not understand, is that in 2000 a new Republic was established, with a new mandate to maintain the status quo. Obama does not represent change from this new order of constitutional interpretation, but the process of normalizing it's monetary system. What we are about to see is the equivalent of the formation of the Bank of the United States in the Federalist Republic, the Legal Tender Act for the Union, or the FDIC/Federal Reserve combination of the New Deal. However, this is not a progressive republic, but a reactionary one. It's money is based on military fiat, and as such, cannot long endure. We have entered the era of Barrosian strategy money.

Strategy money is based on a credible threat to tax. It is a version of fiat money, in that it is predicated on the government's fiat. All governments must use fiat to defend or advance their monetary system. The presence of fiat is necessary even for the hardest of specie money systems, since governments that can't maintain fiat, are looted. Gold standards only work, if you can keep the gold.

Asset money is linked in a different manner to fiat. Where as specie money relies on fiat over a physical asset - that is it is a nation state function in Bobbit's terms, asset money relies on protecting a certain set of relationships and equilibrium. It is a market state function.

Thus the protection of both inputs, outputs, and confidence are fiat functions. The market state must exercise fiat to the extent that it must control the key inputs, the markets for its goods, and the ordinary functioning of the process by which transactions are converted into assets.

Because the exercise of fiat is a function of government mandate, and is enforced by the sense of the public encapsulated in meaning - whether "divine right of kings" or "we, the people" - money is a constitutional function. A maonetary system cannot function without the constitutional underpinnings that allow people to use it, and governments to use it as an instrument of enforcing the mandate which they are felt to have.

This same argument applies to compliance as well as fiat.

What then, is strategy money, and why is it different from asset money?

Asset money takes the demand for durable products and information entropy - that is to say rent - and uses this as the basis for the money supply. A bank loans money to buy a house, the value of the house represents a rent, and that it sells for that price shows that there is a stream of future payments - rental demand - that can pay for the rent.

The circulating medium and money supply are therefore linked to demand for rent, at the point where future revenues devoted to rent - that is rental demand - balances the supply of previously generated advantage - that is rental supply - the market for money clears.

Asset money then is based on upside decisions, with some number of downside decisions - liquidations etc. - as a correction against excessive upside optimism. As such it relies on market mechanisms, not fiat, as it's basis.

Strategic money relies on a strategic, not market, equilibrium.

More later - the real world calls.

Eve Conant sucks up to Bush one more time

Fri, 30 Jan 2009 18:57:44 -0800

Well, we know where at least some of the giant sucking sounds are coming from:

By Eve Conant

Among the Bush administration’s few undisputed successes was its aggressive fight against the global spread of HIV and AIDS. Liberals and conservatives, evangelicals and scientists didn’t agree on much during the last eight years, but they were unified in their enthusiasm for PEPFAR, the President’s Emergency Plan for AIDS Relief, which Congress recently voted to expand into a $48 billion commitment, the largest by any nation, to combat HIV/AIDS, malaria and tuberculosis worldwide. So when PEPFAR’s respected director, Dr. Mark Dybul, was swiftly and surprisingly pushed out of his job the day after President Obama’s inauguration, AIDS activists began to worry that the new administration might fumble the one thing the old group got right.

Let's talk about reality. The reason for praising Bush was simple: this was better than nothing, but it wasn't all that good. Mistaking courtier speak for reality is a good sign of a hack who isn't being straight with readers. Let's look at what people were really saying:

Fix Pepfar:

The President's Emergency Plan for AIDS Relief (PEPFAR) is moving toward a cloture vote in the Senate, a vote that will determine whether the $50 billion reauthorization lives or dies. That same life or death question applies to millions of people in Africa, and comparing actual life or death in Africa to the political legacy of President Bush, as many people see PEPFAR as his greatest achievement, is appalling. Doubly so when the politicians and mainstream media refuse to demand fixes to PEPFAR's problems. Like the rest of President Bush's legacy, PEPFAR, as successful as it has been in part, is a go-it-alone strategy that has alienated much of the rest of the world's public health community.

The reality is this: as successful as PEPFAR has been getting life-saving treatment to nearly two million people, it has failed to slow the infection rate because it has been hampered by unnecessary ideological restrictions. For every two people who receive treatment, five are newly infected with HIV, according to a letter from leading public health advocates circulating on Capitol Hill.

The current legislation will not change that.

At that rate of infection, fiscal conservatives like Sen. Jon Kyl (R-AZ) are right to question the amount of money being spent and if it makes sense, because unless you stem the infection rate, no matter how many people get treated there will always be more than twice as many who don't.

Alienated the global community, failed to slow the infection rate, ideologically restricted. Doesn't sound like "getting it right."

Or what about this description about the reality of pepfar:

Unfortunately, restrictions on prevention funding under the existing law governing PEPFAR have severely hampered efforts to prevent as many new infections as possible and undermined broader efforts to stop the spread of HIV infections. AJWS and a wide range of others are working hard to ensure such restrictions are removed from the new legislation, which if passed will authorize at least $50 billion for AIDS, tuberculosis and malaria from 2008 through 2013. Among our key concerns are to ensure that programs save the greatest number of lives possible through effective and efficient investment of US taxpayer dollars in programs proven to work.

Today, unprotected sex is the single greatest factor in the spread of HIV worldwide and is responsible for more than 80 percent of new infections in sub-Saharan Africa. Comprehensive prevention strategies—including efforts to simultaneously promote delay of sexual initiation among unmarried teens; partner reduction and fidelity; and correct and consistent use of male and female condoms—have proven most effective in reducing the spread of HIV.

Or what about this reply to the LA Times being, shall we say, biased about PEPFAR:

With nary a mention of the multitude of criticisms aimed at the President's Emergency Plan for AIDS Relief, or Pepfar, Edmund Sanders' article, "New life for African AIDS patients," sounds more like a presidential news release than an objective analysis.

The criticisms of Pepfar are numerous. For the first two years of the program, Bush blocked the procurement of most low-cost, generic fixed-dose combinations of antiretrovirals in favor of brand-name, multi-drug regimens that cost twice as much — thus lining the pockets of U.S. pharmaceutical companies instead of saving lives. Even though a generic antiretroviral was approved by the FDA in 2005 and made available for purchase through Pepfar, only 27% of the antiretrovirals purchased by Pepfar in the 2006 fiscal year were generic. In addition, the U.S. has attempted to block access to quality generics on the global market.

Pepfar requires that 33% of all prevention monies (including prevention of nonsexual transmission) and two-thirds of sexual-transmission funds be spent on abstinence and fidelity programs. Many of these programs are administered by "faith-based" organizations, typically evangelical Christian groups that promote "abstinence before marriage" and "being faithful" and downplay the use of condoms. This, combined with the Bush administration's go-it-alone approach and refusal to integrate with national AIDS prevention programs already in place, has essentially destroyed years of AIDS prevention work in several countries. Nowhere is this more apparent than in Uganda, where a highly successful AIDS prevention program that stressed the used of condoms had been in place since 1990. After Uganda accepted Pepfar funding in 2003, faith-based organizations undermined the country's condom program. As a result, millions of condoms sat in warehouses because they were not wanted. According to Dr. Kihumuro Apuuli, the director general of the Uganda AIDS Commission, since it adopted the program, the rate of new HIV infections almost doubled, from 70,000 in 2003 to 130,000 in 2005.

Infection rates doubled under a flat earth style welfare hand out for religious extremists. It's really that simple: Bush's plan kills people. Eve Conant kills people. P

So what was wrong?

How about:

1. Abandon the Ideological Emphasis on Abstinence-Until-Marriage Programming
2. Increase Transparency of PEPFAR Prevention Funds
3. Enact Appropriate Oversight Mechanisms of PEPFAR Prevention Grantees
4. Rescind the Anti-Prostitution Pledge
5. Work with the International Community to Implement Programming and Policy that Connects HIV/AIDS to other Issues of Sexual and Reproductive Health
6. On-the-Ground Monitoring of Funded Activities

Let's go over this: ideological blinders made the program inefficient, the moneys were used to convert people, not stop aids, there was no on the ground monitoring, PEPFAR did not work with other organizations, for reasons which included the "global gag rule." Lastly, because of the anti-prostitution pledge, prostitutes were left out of programs. The very people who spread the disease the fastest, were not given access to services. I am no supporter of prostitution, but pretending it doesn't exist isn't going to make it go away.

PEPFAR didn't get it right, it got it less wrong. People sucking up to a President to save lives isn't an endorsement of the policy in the abstract, it is a sad reality of our corrupt system. And Conant couldn't pass for a journalist in a darkened room, so flagrantly biased and incompetent is her piece. Who hired here? Who keeps her employed? Only some one equally dishonest and inept could keep someone like that on the payroll. But heh, finding people who still like Bush is tough to do.

Dubyl did make a bad program better:

The taint of moral hypocrisy deepened when Randall Tobias, the first head of PEPFAR, who left in 2006, resigned from government a year later after being linked to a prostitution ring. Tobias, a former chief executive of the pharmaceutical company Eli Lilly, had publicly questioned the effectiveness of condoms and the reliability of generic drugs. He was replaced at PEPFAR by Mark Dybul, an intense young doctor who specialized in infectious disease and who had helped to work out the nuts and bolts of the PEPFAR programme with Fauci. Dybul was seen as being more in touch with the reality of AIDS. "As a gay man who lived through the epidemic, he had a professional and personal connection to it in a way that Tobias didn't have," says long-time activist Gregg Gonsalves, now with the International Treatment & Preparedness Coalition in New Haven, Connecticut. "He helped to give [PEPFAR] a more clinical focus and strip it of some of its ideology."

Strip it of "some" of it's ideology. But not all, and not enough. Human decency requires some praise when a man who started an illegal war in Iraq and destroyed the global economy does something less than horrible. PEPFAR has saved some people, we should be thankful it was done at all. But let's not kid ourselves: more people could have been saved if it were not for the ideological rigidity, corruption, and ineptness of a program that sacrificed lives for moralizing on the floor of the US Senate.

How bad was it? According to PEPFAR watch:

Q. So, PEPFAR spends significantly more money on abstinence-until-marriage-only programs than
it does on any other sexual transmission prevention intervention, including ABC?

A. Yes. Of all sexual transmission prevention funding in 2006, PEPFAR spent 56% on abstinence-until-
marriage-only programs. The other 44% was divided among ALL other responses to the sexual transmis-
sion of HIV, including programs that include A, B, and C and programs that target “high-risk groups.”

Abramoff connected Lobbyist pleads guilty

Fri, 30 Jan 2009 18:15:15 -0800

Todd A. Boulanger pleads guilty:

Specifically, according to the plea agreement, Boulanger sought the assistance of a staff member who worked on the U.S. House of Representatives, Committee on Transportation and Infrastructure. One of Boulanger’s clients was an equipment rental company, on whose behalf Boulanger and another lobbyist, James Hirni, sought to have two legislative amendments inserted into the Federal Highway Bill in 2003. Boulanger admitted that, with his knowledge and approval, Hirni and another individual provided an all-expenses-paid trip on Oct. 18 and 19, 2003, to game one of the Baseball World Series in New York City to the committee staff member and to Trevor Blackann, a former staff member to a U.S. Senator. On Oct. 22, 2003, Boulanger and Hirni provided information about the amendments they were seeking to the committee staff member and Blackann. Later, after one of the amendments had been inserted into the Senate version of the Federal Highway Bill, Boulanger, Hirni, Blackann, the committee staff member and another individual took steps to protect that amendment .

Boulanger also admitted that he and others provided a stream of things of value to a different Senate staff member in order to influence that individual to take official action favorable to Boulanger’s lobbying firm and one of Abramoff’s Native American tribal clients. From March 2002 through March 2004, Boulanger and others provided more than $25,000 worth of tickets, meals and drinks to the Senate staff member. During the same time period, the Senate staff member provided and agreed to provide official actions sought by Boulanger and others on repeated occasions. In addition, Boulanger admitted that he provided more than $10,000 worth of tickets, meals and drinks to the legislative director for a U.S. Senator. Boulanger admitted he met the legislative director on July 16, 2002, and provided the things of value for 20 months following their first meeting.

The case is part of the ongoing investigation into the activities of former lobbyist Jack Abramoff and his associates. Abramoff pleaded guilty in January 2006 to conspiracy to commit honest services fraud, honest services fraud and tax evasion. Abramoff was sentenced in September 2008 to 48 months in prison and is cooperating in the investigation. Both Hirni and Blackann have pleaded guilty for their roles in the scheme and are cooperating with the investigation. In all, seventeen individuals, including lobbyists and public officials, have pleaded guilty, been convicted at trial, or are awaiting trial as a result of the investigation.

Fourth Quarter GDP Preliminary: -3.8% on an annualized basis

Fri, 30 Jan 2009 05:57:33 -0800

There could still be revisions, but the numbers themselves show that we are now in the deepest recession since the 1981-1982 recession.

The internals are terrible: consumer spending down again, payrolls cut, business investment shrinking. All in all this is not a "last quarter of GDP contraction" because there is no uptick in any sector to create leadership for growth.

The only good news is that the number was slightly better than expectations. That's not saying very much. Q1 09 is probably going to be another terrible quarter, and the final contraction in GDP may be the largest since the sharp 1975 recession. This recession then has the trifecta of bad: it is broad, deep, and long.

The good news is that with inflation essentially dead, we are unlikely to see a "third dip" in the recession - since this recession had a shallow start, a fake recovery in the middle and a second deeper dip, this is, at least, not the worst news. Done right, we would have room for a recovery, that is, after a two year long slog through job losses and falling wages. But we aren't doing it right.

Update: While the expected figure was 5.4% from Reuters, the present figure is distorted by unsold inventories, this added almost 1.3% to GDP, which means that absent a massive uptick in consumer spending, really what happened was that GDP was borrowed from the future. Since unsold inventories will be carried at their wholesale, not retail, value in GDI, the GDI figure will come in lower. Taking out this distortion, the final number was 5.1%. Basically through out the quarter businesses behave as if the recession were almost over, that the worst was behind us, and that they could hold prices at previous levels, while slashing wages. Strangely this did not work. It is another clear sign of deflationary expectations.

Ft also has something up noting the unsold inventories in an expansion of their coverage this morning. This data is in line with the housing data, which had 660,000 annualized single family housing completions, and only 380,000 annualized new home sales. More or less the decision makers of the economy thought this summer signaled that the down turn was over, and they went all in for the last quarter. So much for "we don't need a large stimulus bill" back last spring. Score another one for "Barack Obama gets economics wrong."

Memo to Paul: Because he is a Freepucking Uckpublican

Fri, 30 Jan 2009 04:19:23 -0800

Dear Doctor Krugman

Krugman asks why nothing on health care from Obama. Do we really need to answer this question? Obama's priorities are:

1. Middle class tax cut (check)
2. War in Afghanistan (escalating!)
3. Slash Social Security and Medicare (summit on "entitlement reform" coming soon!)

Obama is what the Village wanted Bush to be, a "compassionate conservative." He's a Republican who doesn't hate gay people any more than is absolutely necessary for political purposes. Thus he can give on things like torture, Gitmo, the global gag rule, that is: money for contraception in other countries, just not in the US. The little things buy liberal love: equal pay, some union gifts. These small things get liberal votes for continuing to dismantle the New Deal.

In fact, Obama has already taken his steps on health care: computerize records, SCHIPS, and preparing to slash Medicare. What does this amount to? First the compassionate part: "cover the kids." The party line is that universalization will happen in steps. We covered the old people, we cover the kids, and it will get to everyone. Now we covered the old people in 1965, we passed SCHIPS this year. At this rate America will have universal health coverage around the same time as Nepal or the Congo.

But the real result of this is to put everyone in the system, so that a mandate will be able to find them. Their kids will be covered, their records will be on file, and they won't be able to get medicaid and medicare without paying in.

That's The Plan Paul: force everyone to pay in, so that any damage to insurance company profits is completely impossible.

Life under Obama is not going to be as nasty as life under Bush, but Obama is not a liberal except in so far as he needs to buy a few votes. However, this is already costing him politically. He started with 80% transition approval numbers. He reached 75% in early January. He came in to office with 70%. He is now at 65%. The trendline is straight down, because it wasn't approval it was preproval. Not surprisingly the very same small things that get him strong support among Democrats, are rapidly eroding his support among Republicans. Republicans now approve of Obama at the rate of 35% or so.

This isn't a problem politically: a 65% President has a broad mandate to pursue policies and get things done. But Obama's support is now entirely from the left, and from about half of the center. That's a very workable coalition, but it won't be workable when the collapse point comes. He's got some Friedman Units as Liberals tell themselves "he has a secret liberal plan! He's black I tell you, that means he is liberal." What his race has to do with his politics is beyond me, I have to leave that to more connected people than I am, because I've known plenty of African-Americans who are in the mold of Alan Keyes, Lynn Swann, Clarence Thomas, and so on.

Should he be doing something about health care? Of course. He just missed a huge chance in the stimulus bill to put in projects that would have made universalization easier and cheaper. What better time to train people than in a recession when jobs are scarce? What better time to build facilities? But it was decided that corporate tax breaks and "a middle class tax cut" were more important.

Paul, I know that you and lots of other people want to have influence with President Obama, and you are being nice. Now you know why people kissed up to Bush at the same time you were looking at his numbers and seeing that it didn't add up. That is where I am now: Obama's numbers only add up if you assume that he is right of center "centrist" willing to give on small liberal issues, but is basically a Reaganite on economics, who is most concerned with protecting America's financial system, and who believes in military power above domestic investment.

My reading of Obama, which others vehemently disagree with, but cannot point to a single counter-example of, is that he learns everything the hard way, he does not change his mind until there has been a catastrophic failure of his hardened ideology, and even then it is a minimal change. Consider the history of his support for stimulus. Or his proposals on health care. Consider his repetition of bi-partisanship, and then he can't even deliver a single Republican vote for a pre-compromised stimulus bill. And yet, there is no sign that he is going to change direction.

Obama is also not a progressive, nor is he really digital. Much is made of his blackberry, but in terms of governing method, Obama is a top downer. That means a few guys make decisions, and then they figure out how to sell them. They want information from the bottom, but they don't change direction based on an interactive sense of the bottom. This top down style is all 20th century. Obama's world has no room for any center of power but Obama. It is about control. He's just willing to use new tools to get that control, and he spends more money on them. Obama is a pyramid President: he sits at the top of that pyramid, and everyone marches to it. The problem with the pyramid is that it is too expensive to run. Obama is going to have to gut the rest of the economy to keep our very expensive financial pyramid in place, and he is sucking virtually every loose quarter in the left to fund his political pyramid. Obama is no different in political organization than George W. Bush, merely more technologically savvy. He is not the web, he is TV 2.0 - the paradigm that the pop era power structure has wanted to get to for some time. Here it is, in color, High Definition, with surround sound.

Obama is a one termer, because the Republican Party will never go along with sensible policies, and Obama is going to erode his own political base. Obama is like the invasion of Iraq: almost no one has the guts to defy him from his own side, and yet privately, many people are angry at how far to the right he has run. This hasn't shown up in polling yet, but it is waiting for his first major stumble. It comes out when he shafts some group on some small thing, like contraception for poor women in the stimulus bill.

The other reality is that while people want Obama to work out, they don't like his actual policies. The support for escalation in Afghanistan, is poor, and almost non-existent among the young. The support for his version of health care, ranks below other ideas. The support for his "middle class tax cut" is also thin and below more spending. Taken individually Obama is a 51% President at best - and that is where his approval number will reach at the cross roads some 3 years from now, because basically, that's what happens to almost every President. At that point, the bad decisions he is making now, with the resurgence of TARP - that is the government taking on toxic assets - will haunt him. I remember you talking about the idiocy of the theory behind buying up toxic waste on the taxpayer dime. Or lack of theory more exactly. Well there it is.

The most important principle of Obama is "no rich people shall come to harm." Sure they have to give up some bonuses and private jets, but everyone who was in charge, will stay in charge. The people, get the responsibility and the sacrifice, and the loose change from the bankers as they stride boldly to their jobs.

You want a liberal President. The problem is that America needed to deal with it's 1960s racial and sexual angst. The contest between Hillary and Obama was reduced to gender versus race. In the end the administration's economic team is packed with Clintonians and Hamilton Project graduates. The reason so many in the blogosphere are trashing Bob Rubin is that he is safely out of the hallowed circle and out of power, but really, they are trashing Clintonomics and the financial play.

The way the campaign was run XX v Melonin was hardly what I would call a particularly strong way of determining who is liberal. Since the Democratic Party chose to nominate it's most conservative major candidate, there was no hope for a liberal in the White House, there is no hope for liberal policies from this White House beyond not being mean and crazy, and people need to just accept that it is going to be another 12 to 16 years before we get another crack at it.

Sorry, your generation screwed up, and there isn't anything to be done about it.

Housing Market is still expletive deleted

Thu, 29 Jan 2009 19:59:25 -0800

As you may know new home sales continued their fall, and that means that new home construction is going to remain dead as a door knob for a while. Last month half of all existing home sales were foreclosures. This means that the real price of homes is lower than the cost of building a new one. That will eventually change, when the supply of foreclosed homes dries up, but it will not be for a few months yet, and if we miss the spring window, it will mean that housing will remain in hiring recession for the rest of next year.

When existing home sales came in up in numbers, but down in price, it led to wide cheers from the right wing punditocracy. However, that was a figament of the there Chicago School imaginations. Instead the existing home sales were being whacked straight out of new home sales. In 2008 482,000 new homes were sold. The annualized rate from December was 331,000 . The problem is that in December the annual rate of housing completion for single family homes was 668,000. That is, supply is still well above current demand, which means that prices will have to continue to fall. Right now new home inventory is still over a year. What this means is that for every new home people are buying, builders are still finishing two.

Clearly the memo to shift capital from home building has not reached the economy yet.