Saturday Open Thread [1.5.13]

Filed in Open Thread by on January 5, 2013

If you are still recovering from all of the revelry and working on getting back to it on Monday, maybe you’ll have some time to sit down with a cup of hot something and read some of these longish pieces from recent publications.

Dave Weigel discusses the Failure of Peterson-ism. This is the Pete Peterson (plus his wealthy pals) project to eliminate Social Security and Medicare and enforce some austerity on the rest of us:

But do what, exactly? Here’s the current problem with Peterson-ism: As scary as it seems to liberals, as clear as it may be that Peterson wants to build momentum for entitlement cuts, the actual work of these groups has moved us no closer to those said cuts.
And it’s had quite some time to try. The modern era of anti-deficit pressure campaigns began in 1992. Democrats, at that time, were the party that panicked over budget deficits, warning voters that these shortfalls would bankrupt the entitlements they loved. Ross Perot’s campaign for president was predicated on “shared sacrifice” to cut the then-$4 trillion debt. When Paul Tsongas quit the Democratic primary, he joined Peterson to found the deficit-hawkish Concord Coalition, up and running when Bill Clinton won the presidency.

Last month’s Atlantic provided some detailed reporting on The Insourcing Boom. Starting with the revival of manufacturing at GE’s Louisville Appliance Park, this looks at the trend of American manufacturers bringing their manufacturing back to the US.

In the midst of this revival, Immelt made a startling assertion. Writing in Harvard Business Review in March, he declared that outsourcing is “quickly becoming mostly outdated as a business model for GE Appliances.” Just four years after he tried to sell Appliance Park, believing it to be a relic of an era GE had transcended, he’s spending some $800 million to bring the place back to life. “I don’t do that because I run a charity,” he said at a public event in September. “I do that because I think we can do it here and make more money.”

Immelt hasn’t just changed course; he’s pirouetted.

What has happened? Just five years ago, not to mention 10 or 20 years ago, the unchallenged logic of the global economy was that you couldn’t manufacture much besides a fast-food hamburger in the United States. Now the CEO of America’s leading industrial manufacturing company says it’s not Appliance Park that’s obsolete—it’s offshoring that is.

And if you dig into this, it is looking as though bringing the manufacturing of some of its appliances back to the US, GE is not only making some of them *cheaper* than they did in China, but they are able to sell them to consumers for less money. American skills also factor into this. No where can we see paying more taxes as part of this calculation, but hey. There’s plenty of stuff that will likely never be made here again, but bringing back the building of the more technologically advanced stuff makes sense, because there is still a great deal of added value in American workers.

An amazing mea culpa from the IMF’s chief economist on austerity — I don’t think that this is getting anywhere near enough press. Seriously.

Consider it a mea culpa submerged in a deep pool of calculus and regression analysis: The International Monetary Fund’s top economist today acknowledged that the fund blew its forecasts for Greece and other European economies because it did not fully understand how government austerity efforts would undermine economic growth.

This is the demand problem all over again. Withdraw the demand created by government spending, and — if private spending doesn’t race in to fill the gap — you have an economy that will contract.

And this is dead-bang right:

If the federal government wants to get you, your basement arsenal will not be much protection.
We spend about as much on our military as the rest of the world put together. If you get to thinking another American Revolution is in order, it’s a guarantee you’ll be outgunned.
This would appear obvious. It’s apparently not. The nation’s debate on guns is forced to accommodate people who believe they are poised to stand up to an Obama-led reign of tyranny, egged on by interest groups claiming to stand for freedom but who are mostly interested in selling more guns.

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  1. jason330 says:

    Jesus H Christ!!

    “The International Monetary Fund’s top economist today acknowledged that the fund blew its forecasts for Greece and other European economies because it did not fully understand how government austerity efforts would undermine economic growth.”

    Thanks for sucking at your job so bad fuckwad.

  2. anonymous says:

    Climate Change Relief is spelled – Disaster Relief.

    Disaster Relief ? – Republicans want to decide – who will (and who will not) pay.

    Republicans say, the people that republicans decide to cut from the budget – should pay the price. (Certainly not the wealthiest.)

    The following quote below, from the Asso. Press Article 1/4/13, involves republicans, disasters, the budget and Sandy. Republicans had voted “No,” setting Christie off, because if New Jersey goes underwater – Christie’s career as a republican is underwater as well. (That’s how a republican politician really thinks.) Republicans in Washington think other government programs should be cut – to pay for disaster relief and of course, republicans want to cut programs republicans don’t like, not fossil fuel subsidies, not wealthy tax cuts, for example.

    What one sees coming ahead, is not only the fossil fuel industries refusing to accept responsibility for – decades of denial; their stonewalling of clean energy; their continuing responsibility for upcoming climate change disasters. Republicans will want the people to pay the price, as fossil fuel interests hold onto their energy market, their pollution profits, as they get to pollute tax free. That’s what a Clean Air Act that doesn’t include anthropogenic CO2 and “No CO2 Tax Pledge” signed by fossil fuel politicians, is all about.

    It is time for politicians to start talking about climate change disasters and about fossil fuel products that release the by-product CO2 and methane. It’s time for politicians to act on a Clean Air Act listing CO2 and released methane, other greenhouse gases, as pollutants that MUST be reduced. It is time to legally question the ‘No CO2 Tax Pledge’ that allows legislators to honor and work for fossil fuel interests, before honoring their pledge to uphold the country’s best interests foremost.

    The tea party 1% wealthiest, didn’t want an end to their wealthy tax cuts. Now you can bet, the tea party 1% wealthiest, do not want to pay for disaster relief, (also known as climate change relief and ‘adaptation’ to climate change.’) If fossil fuel ‘business as usual’ continues, the price tag will soon be hundreds of billions, then trillions, then the end of civilization.

    So now, republicans want to play more games and cut budget items to pay for ‘disasters.’ That’s an impossibility.

    Republicans now admit, the climate is changing, but, but, but, they don’t know why (sure they don’t) it’s changing except that it has something to do with “God” or Mother Nature or perhaps the sun or the various opinions of paid skeptics who offer their own take on ‘science.’ Not some earthly corporations whose by-product CO2 is measureably belching out of smokestacks. C02 now at 394.04 ppm, causing the greenhouse effect, that heats the planet, heats the oceans, changes weather patterns, melts ice, raises the sea levels, floods shorelines – as 99.9% of legitimate climate scientists have firmly concluded. Republicans say, ‘adapt,’ and let the people pay for ‘adaptation’ as well.

    Even though fossil fuel politicians say they don’t know what causes climate change, there are two things fossil fuel politicians are sure about. They are sure climate change is not caused by anthropogenic CO2, and they are sure ‘republicans’ should decide – who pays for ‘climate’ damages. (You can be sure they will exempt the fossil fuel interests and the 1% wealthiest.)

    The poor, average, middle, upper middle classes, will be most affected, when the trees fall on their homes, they go weeks without power, refrigeration, AC, they die from heatwaves, winter storms, their schools closed, their job ends. The freak tornadoes, the super hurricanes destroy their properties, the floods take their toll, etc. and they wait and wait for disaster relief, as republicans say, republicans will decide – who will (and who will not) pay.

    Quote from Asso.Press…. “‘It was a more temperate response than was heard earlier in the week, when a livid Christie blistered House Republicans and Boehner himself for holding up the aid, and other Republican figures from the region, as well as Democrats, cried ‘betrayal.’

    All of the “no” votes in the House were cast by Republicans, who said other government programs should have been cut to pay for the measure. As with past natural disasters, the Sandy aid proposals do not provide for offsetting spending cuts, meaning the aid comes at the cost of higher deficits.

    The bill gives more authority to the National Flood Insurance Program to borrow money from the U.S. Treasury to pay claims. Premiums average about $625 per year, and residential claims under the program average nearly $30,000.

    Rep {republican} Tim Huelskamp, a fiscal conservative who voted against the flood bill, said he was among those with concerns it would add to huge budget deficits. “We have to talk seriously about offsets,” Huelskamp said. “We can’t take $60 billion off budget, that’s my problem with it.”

    The Club For Growth, a conservative group, urged lawmakers to oppose the flood insurance bill. “Congress should not allow the federal government to be involved in the flood insurance industry in the first place, let alone expand the national flood insurance program’s authority,” the group said in a statement.

    The Federal Emergency Management Agency had warned that the flood insurance program would run out of money next week if Congress didn’t provide additional borrowing authority. Congress created the FEMA-run program in 1968 because few private insurers cover flood damage.

    The $2 billion FEMA already has spent went to providing shelter, restoring power and meeting other immediate needs. Eleven states – Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia and West Virginia – plus the District of Columbia have shared that money.”

  3. anonymous says:

    No one can afford not to see this.

  4. puck says:

    “the fund blew its forecasts for Greece and other European economies”

    Do you think this “error” wasn’t part of the plan? So what if there is a little-noticed admission of incompetence below the fold. That is a small price to pay; the bankers have their blood money.

    Substitute “Fix The Debt” projections for the IMF projections, and you have a pretty good forecast of what will happen to the US under austerity.

  5. Jason330 says:

    What could someone like Chris Coons get out of joining Peter Peterson’s Fix the Debt austerity jihad? When “what to do” and “what not to do” are so easily known,,,That’s the puzzling thing.

  6. puck says:

    Simple. Coons and his immediate circle are 1%-ers. The game is to win low taxes on their investments (check) and then to get somebody else to pay for their tax cuts.

    The game under Reagan was to pay for it with debt. Bush cut even more and introduced a new twist by masking it with a housing bubble. Now the only healthy funding source left is pensions, Social Security, and Medicare, so that’s what they are going after to pay for their tax cuts.

  7. cassandra_m says:

    That admission of incompetence should not be little noticed — especially, as Ezra notes, this paper is endorsed by the institution itself, not the researcher who wrote it. It means that not only was the IMF wrong, but their model that insisted on it was wrong too. So who knows how to judge any future advise from this group of people.