Tag Archives: government

The West Wing’s Big Block of Cheese Day Ideas, Ranked

by muistenam Posted on January 29, 2014

Mother Jones

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Wednesday is “Big Block of Cheese Day” at the Obama White House, an homage to two episodes of the television series The West Wing in which senior staffers were forced to spend a day dealing with constituents who don’t normally get an audience with the president. (That idea, in turn, was inspired by an enormous block of cheese housed in the Andrew Jackson White House.) The implication of the episodes is that the people who want to talk about these issues are kind of crazy, but a Mother Jones analysis of the projects presented to Sam Seaborn et al. reveals more nuance. On further examination, the dismissive tone with which Big Block of Cheese Day activists were greeted (or embraced) says more about the smallness of the Bartlet administration’s aides than it does about the issues at hand.

Here is the official Mother Jones ranking of Big Block of Cheese Day ideas, from best to worst:

Kemp’s Ridley Sea Turtle Society: It’s never fully explained what the Kemp’s Ridley Sea Turtle Society wants, but we can probably guess. According to National Geographic, the Kemp’s ridley is “the world’s most endangered sea turtle” and according to the Sea Turtle Conservancy, there are somewhere between 7,000 and 9,000 nesting females left. Their greatest threat is shrimp trawlers, which snare the tiny turtles in their nets. But the turtles are also vulnerable to man-made disaster. Most of the 156 turtles that died as a result of the Deepwater Horizon oil spill were Kemp’s Ridleys, because the spill interfered with the creatures’ nesting habitat. It’s a tragedy that these turtles can only get the government’s attention on “total crackpot day.”

Wolf highway: The plan: “Eighteen hundred miles from Yellowstone to the Yukon Territory complete with highway overpasses and no cattle grazing.” Badass! The price: “With contributions and corporate sponsorship, the cost of the taxpayer is only 900 million dollars.” Damn. We have no idea why it costs that much, though, and it seems like something that can be scaled down. Montana and Washington state have already built natural bridges to help animals cross highways at a considerably cheaper rate.

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The West Wing’s Big Block of Cheese Day Ideas, Ranked

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The No-Fly List Takes Another Hit

by LilianW64evhn Posted on January 27, 2014

Mother Jones

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Two federal judges have recently ruled that the government’s no-fly list has some serious constitutional problems:

This follows on a federal court decision in August that travelling internationally by air involves “a constitutionally protected liberty interest.” While that case still has a way to go before it reaches a conclusion, the implications of a constitutionally protected right are that any limits on it must involve due process. Simply slapping names on a list because they’re allegedly suspected of the definition-of-terrorism-of-the-week and leaving people stranded won’t cut it.

The more recent decisions would seem to follow on that logic, recognizing that arbitrary limits on travel really do impair people’s ability to exercise their rights and such limits—especially when they involve official screw-ups—have to be fixable through some formal process.

It’s taken more than a dozen years to get to this point, and that’s a disgrace. The federal government certainly has the right to prevent foreigners from entering the country, and it doesn’t owe them due process when it makes those decisions. But preventing citizens and legal residents from flying overseas—or, even worse, allowing them to fly but not allowing them to return home—is police state territory. Ditto for the steady conversion of the Immigration Service into an extraconstitutional agency to harass and search citizens who can’t be legally harassed or searched by ordinary law enforcement.

The federal government simply doesn’t—or shouldn’t—have the right to unilaterally hound and persecute people based on the mere suspicion of a bureaucrat. Arbitrarily constraining travel is a favorite tactic of oppressive regimes, and it has no place in the United States. The faster this stuff is ended, and the faster that due process once again becomes more than just a nice idea, the better.

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The No-Fly List Takes Another Hit

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JPMorgan Paid $20 Billion in Fines Last Year—So Its Board Is Giving Jamie Dimon a Raise

by TerryQnhtwe Posted on January 24, 2014

Mother Jones

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The New York Times reported Friday that Jamie Dimon, the silver-haired CEO of JPMorgan Chase, the nation’s largest bank by assets, is getting a raise. Dimon is poised to add a few million to the $11.5 million compensation package he took home in 2013.

If you so much as glanced at the news last year, this bit of news may puzzle you. JPMorgan, in many ways, had a miserable 2013. JPMorgan paid $1 billion in fines in the wake of the “London Whale” scandal, in which the bank lost $6 billion on a market-rattling blunder by a trader named Bruno Iksil. The bank also paid $13 billion to settle charges that it’d peddled risky mortgage-backed securities. And it forked over another $2 billion to settle charges for failing to spot Bernie Madoff’s ponzi scheme, which Madoff perpetrated largely using JPMorgan accounts. All told, the bank paid out roughly $20 billion in penalties to federal regulators over a slew of screw-ups and failures.

2013 was a rough year for JPMorgan. So why is Dimon getting a raise? The answer, in part, will make your blood boil. Here’s the money quote in the Times:

Mr. Dimon’s defenders point to his active role in negotiating a string of government settlements that helped JPMorgan move beyond some of its biggest legal problems. He has also solidified his support among board members, according to the people briefed on the matter, by acting as a chief negotiator as JPMorgan worked out a string of banner government settlements this year.

…

Mr. Dimon’s star has risen more recently as he took on a critical role in negotiating both the bank’s $13 billion settlement with government authorities over its sale of mortgage-backed securities in the years before the financial crisis and the $2 billion settlement over accusations that the bank turned a blind eye to signs of fraud surrounding Bernard L. Madoff.

Just hours before the Justice Department was planning to announce civil charges against JPMorgan over its sales of shaky mortgage investments in September, Mr. Dimon personally reached out to Attorney General Eric H. Holder Jr.—a move that averted a lawsuit and ultimately resulted in the brokered deal. Just a few months later, Mr. Dimon acted as an emissary again, this time, meeting with Preet Bharara, the United States attorney in Manhattan leading the investigation into the Madoff Ponzi scheme.

In other words, as big as those multibillion-dollar settlements were, JPMorgan board members believe the bank’s legal problems could’ve been worse. Blast-a-hole-in-our-balance-sheet worse. And so Dimon’s pay bump is a reward for locking horns with bank regulators and federal authorities and hashing out settlement deals that were favorable to the bank. He’s getting a raise because he beat the regulators, played them so well, JPMorgan board members seem to be saying, that he deserves to be rewarded for the deals he helped engineer.

There are other factors, too. Despite its legal headaches, JPMorgan’s stock price climbed 22 percent over the past year, and the bank recorded profits of $17.9 billion in 2013. But to read that Dimon’s savvy negotiating has won him a raise—and don’t forget that no top bank executives have gone to jail for actions related to the 2008 financial meltdown—brings to mind the old Dick Durbin quote about banks and Washington: “They frankly own the place.”

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JPMorgan Paid $20 Billion in Fines Last Year—So Its Board Is Giving Jamie Dimon a Raise

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John Boehner: I’d Rather Smoke and Drink Red Wine Than Be President

by s4o840t Posted on January 24, 2014

Mother Jones

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On Thursday, House Speaker John Boehner (R-Ohio) stopped by NBC’s The Tonight Show to chat with host and reviled coup d’état leader Jay Leno. They discussed Chris Christie, Edward Snowden, Boehner’s occasional role as House “Gestapo,” and the GOP-led government shutdown. (“So I said, ‘You wanna fight this fight, I’ll go fight the fight with you.’ But it was a very predictable disaster. And so the sooner we got it over with, the better.”)

But the most interesting quote Boehner had to offer Leno’s audience was fluffier in nature. It came when the comedian asked the politician if he had any plans to run for president. His response:

I like to play golf. I like to cut my own grass. I do drink red wine. I smoke cigarettes and I’m not giving that up to be President of the United States.

Boehner definitely enjoys his red wine and cigarettes (two things you are allowed to consume as commander in chief, but whatever). President Obama gifted Boehner a $110 bottle of Tuscan red wine for his 63rd birthday, and Boehner received positive coverage from The Daily Beast for bringing the “booze back to Washington.” Boehner is a Camel Ultra Lights smoker, and prior to the smoking ban in the Speaker’s Lobby, he took smoking breaks there so frequently that one of the benches was dubbed the “Boehner bench.”

You can watch longer clips of his Tonight Show interview here.

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John Boehner: I’d Rather Smoke and Drink Red Wine Than Be President

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Canada sued over approval of “toxic” GMO salmon

by Garland36G Posted on January 21, 2014

Canada sued over approval of “toxic” GMO salmon

By

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Canadian officials ventured into uncharted legal and ecological waters when they approved the cultivation and export of genetically engineered salmon eggs last year. And now environmental groups have sued the government, claiming the approval illegally disregarded the potential for the transgenic fish to become an invasive species.

Quick background: AquaBounty Technologies Inc. has developed Atlantic salmon that grow more quickly than their natural cousins, thanks to the presence of DNA from Chinook salmon and from an eel-like fish called the ocean pout. The company wants to cultivate eggs for this AquAdvantage salmon on Canada’s Prince Edward Island, hatch the eggs and grow the salmon in Panama, then export the meat to the U.S. Approval from the U.S. government is still pending.

Some environmentalists worry that the GMO fish will escape, breed, and outcompete wild species. Under Canadian law, an invasive species can be defined as “toxic” in the environment. Three Canadian nonprofits are claiming that definition of “toxic” could apply to the AquAdvantage salmon and their eggs. Here’s the crux of their legal argument, as described by Global News:

“Our concern is basically, we don’t think they’ve done the due diligence to assess the toxicity of the eggs,” said Susanna Fuller, marine conservation coordinator with the [Ecology Action Centre].

“There is no evidence that the ministers, as part of their Section 108 Toxicity Assessment, considered any data from a test conducted to determine AquAdvantage salmon’s pathogenicity, toxicity or invasiveness as required under paragraph 5(a) of Schedule 5 of the Regulations,” reads the notice of application.

Fuller is also concerned about the lack of public consultation.

Environmentalists in the U.S., where the federal government could approve the sale of the GMO salmon this year, have been quick to voice their support for the legal challenge up north. “This case is an important step in preserving native salmon populations and the environment from an unwanted, untested, novel threat,” said Andrew Kimbrell, executive director for Center for Food Safety. “The short-sighted and unlawful approval by Canadian officials must be addressed.”


Source
Halifax environmental group files lawsuit against federal government, Global News
Groups Sue Canadian Government Over GE Salmon, Center for Food Safety

John Upton is a science fan and green news boffin who tweets, posts articles to Facebook, and blogs about ecology. He welcomes reader questions, tips, and incoherent rants: johnupton@gmail.com.

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Earmarks are Back, Baby!

by NLZGeorgina Posted on January 21, 2014

Mother Jones

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Why did so many Republicans vote for last week’s budget bill? One reason is that they wanted to avoid getting blamed for another government shutdown. As you’ll recall, the last one didn’t turn out so well. But Stan Collender says there’s another reason:

This is real inside-baseball: An omnibus appropriation provided an opportunity for the leadership to buy support from reluctant members by providing more dollars for their pet programs and projects. The demise of earmarks several years ago plus the use of continuing resolutions (which generally don’t provide dollars on a program-by-program basis) to fund the government took that ability away. This was the first appropriations bill in five years where that wasn’t the case.

More…. Virtually every Republican who voted for the bill got some dollars devoted to something, if not many things, that her or his constituents will be very happy to have. In other words, this was the first real return of earmarks since they were banned several years ago and even anti-spending members couldn’t resist.

Earmarks are back, baby! But really, I shouldn’t be so flippant about it. Nobody likes to see the sausage being made, but the truth is that earmarks are a useful part of the legislative process. Sure, they’re a little inefficient, and sure, they can get out of hand. But they don’t increase overall spending, and they do provide congressional leaders with a way to whip their troops into line. Human nature being what it is, leaders need at least a few carrots and sticks in order to get anything done, and this is something they’ve largely lost over the past few decades. It would be a good thing if they got some of them back.

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Earmarks are Back, Baby!

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Everywhere in the World, Governments Heavily Regulate the Home Mortgage Business

by s02xc3x Posted on January 17, 2014

Mother Jones

Yesterday I wrote about problems with the mortgage finance market, which are mostly due to the fact that private lenders aren’t interested in funding 30-year fixed-rate mortgages on their own. There’s just too much risk. This means that if we want the mortgage market to revive, Fannie Mae and Freddie Mac need to start guaranteeing these mortgages again in the same volumes they used to.

One obvious response to this is that the 30-year fixed mortgage wasn’t handed down on stone tablets from Mt. Sinai. It was an invention of the New Deal. Other countries get by just fine without them, and so can we. We should just get the government out of the mortgage market entirely and let banks make whatever kinds of loans they want.

We could do that. But it’s well to keep in mind that although other countries might not have outfits like Fannie Mae and Freddie Mac, they do have plenty of government regulation of the mortgage loan market. If you’re curious about how mortgages work outside the US, Michael Hiltzik provides a useful rundown of Canada here. Other countries work differently, but the principle is the same: there’s always supervision of some kind. Getting rid of Fannie and Freddie is a defensible option, but that doesn’t mean you’re getting rid of government regulation. You’ll just end up with different government regulation.

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Everywhere in the World, Governments Heavily Regulate the Home Mortgage Business

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It’s Time to Fix the Housing Finance Market

by SergioBPFL Posted on January 15, 2014

Mother Jones

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Yesterday I mentioned Brad DeLong’s belief that the biggest problem with the economy right now is the weak housing market:

I find it very hard to escape the conclusion that the big bad thing going on in the third millennium is not the excess construction of the mid-2000s housing bubble–a sum of 7.5% points of annual GDP….but rather the additional 20% points of annual GDP of residences not built since 2007 because of the financial crisis, resulting depression, and breaking of housing finance.

The chart above shows what DeLong is talking about. Housing was overbuilt in the aughts, but we’ve more than made up for that. The shortfall in new housing starts since 2008 is far larger than the excess between 2002 and 2007.

So what’s the problem? Felix Salmon, keying off a New York Times piece today, writes that a big reason for the continuing weakness of the housing market is the inability of even people with good credit to get mortgages.

Anecdotally, it’s much harder to get a mortgage now than it used to be. In the NYT article, the Center for American Progress’s Julia Gordon says that “a typical American family” with a credit score in the low 700s is “being left out”: that’s a very long way from subprime, which is what you’re considered to be when your credit score is below 620.

Meanwhile, here in Manhattan, no one in my condo building has been able to sell or refinance for the past couple of years, thanks to an ever-shifting series of rules at various different banks, all of which are clearly designed to just give them a reason to say no.

The chart below shows this dramatically:

Needless to say, mortgages were too easy to get in 2006, and we don’t want to go back to that level. But neither do we want to be where we are now. Salmon believes the problem is fairly simple: it’s not because of new rules about qualified mortgages or anything else regulatory, it’s simply because 30-year fixed mortgage rates are currently running at about 4.5 percent. “Would you lend money fixed for the next 30 years at a rate of less than 5%?” he asks.

The 30-year fixed mortgage is mostly a creature of Fannie Mae and Freddie Mac, who have historically bought up and securitized 30-year fixed mortgages so that banks didn’t have to keep them on their books. They aren’t doing that as energetically as they used to, and this has depressed the entire mortgage market. So what to do? DeLong suggests the answer lies with the government: “Have Mel Watt’s FHFA end policy uncertainty about housing finance and rebalance the construction sector to fill in our current 20%-point of annual GDP housing capital deficit.” Salmon suggests the answer might be the opposite: “Phase out the 30-year fixed-rate mortgage entirely, since it’s a product no private-sector financial institution would ever offer.” But both agree that the mortgage market is a crucial part of getting the economy back on its feet. Here’s Salmon:

One thing is clear: for all that the Fed has been pumping billions of dollars into mortgage securities as part of its quantitative easing campaign, all that liquidity has failed to find its way to new homebuyers. I’m in general a believer in renting rather than buying, but the US is a nation of homeowners, and in such a country, a liquid housing market is a necessary precondition for economic vitality. Right now, we don’t have one — and we don’t have much hope of getting one in the foreseeable future, either.

With household deleveraging having now run its course, this is a good time to start thinking more seriously about the housing market. It’s not a silver bullet, but there are plenty of families out there willing to fund more residential construction if only they could get a mortgage. Not a go-go-no-doc-no-down bubble mortgage, just a normal mortgage for normal people. This is something that President Obama should probably be thinking pretty hard about.

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It’s Time to Fix the Housing Finance Market

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Why Have Investors Given Up on the Real World?

by BettyWhitefoord Posted on January 13, 2014

Mother Jones

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How should we respond to sustained economic weakness? Brad DeLong has a lengthy post today comparing two approaches. To oversimplify, we have Larry Summers on one side, who believes the answer is higher government spending on infrastructure. On the other side is Olivier Blanchard, the IMF’s chief economist, who thinks the answer is higher inflation.

In a nutshell, the argument for higher inflation is simple. Right now, with interest rates at slightly above zero and inflation running a little less than 2 percent, real interest rates are about -1 percent. But that’s too high. Given the weakness of the economy, the market-clearing real interest rate is probably around -3 percent. If inflation were running at 4-5 percent, that’s what we’d have, and the economy would recover more quickly.

There are two arguments opposed to this. The first is that central banks have demonstrated that 2 percent inflation is sustainable. But what about 5 percent? Maybe not. If central banks are willing to let inflation get that high, markets might conclude that they’ll respond with even higher inflation if political considerations demand it. Inflationary expectations will go up, the central bank will respond, and soon we’ll be in an inflationary spiral, just like the 1970s.

The second argument is the one Summers makes: sustained low interest rates are almost certain to lead to asset bubbles. So even if higher inflation works in the short run, it’s a recipe for disaster in the long run.

DeLong draws several conclusions from this. He agrees that higher government spending is a good idea—and so do I. The drop in government spending since 2010 has been unprecedented in recent history (see chart below). He’s ambivalent about a higher inflation target, since he agrees that at some level it risks turning into a spiral. (But he’s not sure what that level is.) And finally, he thinks the real demand-side problem is in residential construction, which has plummeted since the housing bubble burst. This could be addressed with policy changes at the FHFA, which might be a better alternative than higher inflation anyway. I have two observations about all this:

Central bankers seem to think that over the past 30 years they’ve demonstrated credibility in restraining inflation, something they’re loath to give up. That’s why they hate the idea of raising their inflation targets above 2 percent. But it strikes me that they may be wrong: what they’ve really done is demonstrate credibility in following the Taylor Rule, which provides a formula-based target for short-term interest rates. But right now, the Taylor Rule suggests that interest rates should be below zero.1 A higher inflation target that’s in service of rigorously following the Taylor Rule might increase the monetary credibility of central banks, not decrease it. (Or, possibly, have no effect at all on their credibility.)
The Summers view that sustained low interest rates lead to bubbles may be correct. But this is only true if there just flatly aren’t enough good real-world investment opportunities available, which would leave investors with no place to put their money except in risky asset plays. DeLong seems to agree with this. When Ryan Avent asks, “Are we really arguing that there aren’t enough good private investment opportunities in America?” DeLong answers, “Yes. We are.”

DeLong has much more to say about all this, and I’m dangerously oversimplifying here. But I’m doing it to make a point. First, I think central banks have a lot of leeway to pursue higher inflation as long as they’re clear about what they’re doing and can credibly say that they’re merely following the same monetary rules they’ve been following for the past three decades. Second, it’s surprising that we haven’t paid more attention to the suggestion that asset bubbles are the result of a (permanent?) condition in which there simply aren’t enough good private investment opportunities. This deserves way more discussion, not just a footnote in a broader essay. If it’s true, surely this is the economic challenge of our day. No matter what else we do, we’re in big trouble if markets simply don’t believe there are enough factories to expand or new companies to invest in. If investors have essentially given up on the real economy, no amount of fiscal or monetary policy will save us.

So why isn’t this getting more discussion?

1Actually, this depends on which version of the Taylor Rule you use. But let’s leave that for another day. For now, it’s enough to say that there’s a conventional version of the Taylor Rule which says real interest rates should be well below zero.

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Why Have Investors Given Up on the Real World?

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Here’s How to Tell if Marco Rubio is Serious About Fighting Poverty

by DelmarMonahan Posted on January 9, 2014

Mother Jones

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Yesterday I wrote briefly about Marco Rubio’s poverty reform proposal, and I was….unenthusiastic. I don’t believe that Rubio is really serious; I don’t believe Republicans will follow his lead even if he is; and I imagine that once Rubio provides us with details, his proposal will turn out to be little more than a plan to cut spending on the poor.

Jared Bernstein followed up last night with a bit more on those pesky details. For example, Rubio proposes that we should get rid of most federal anti-poverty programs and simply give the money to the states, where they can experiment with different approaches. But there’s a problem with block grants like this:

“Revenue neutrality” may sound technical and inoffensive, if not fiscally sound, but what it really means is the safety net will be unable to expand in recessions. Let’s see the details, but typically under these arrangements, states will be unable to tap the Feds for unemployment benefits, nutritional assistance, and all the other functions that must expand to meet need when the market fails. This would be a huge step backwards, essentially enshrining poverty-inducing austerity in place of literally decades of policy advancements to meet demand contractions with temporary spending expansions.

The chart on the right shows what Bernstein is talking about. The blue line shows TANF, the basic welfare program that was block-granted as part of the mid-90s welfare reform. During the Great Recession, spending on TANF didn’t budge. Conversely, both SNAP (food stamps) and unemployment insurance rose during the recession, as they should have. Will Rubio’s plan include automatic stabilizers based on eligibility requirements? Or will it strangle safety net programs by not allowing them to grow when the economy is bad? We’ll have to wait and see.

Rubio also wants to replace the EITC with wage subsidies. I’ve pointed out before that the experience of other countries that have tried this is decidedly inconclusive, so it’s something to be cautious about. Still, if it’s done right it has the potential to be an effective program. However, Bernstein is worried about Rubio’s apparent proposal to change the program to be more generous to married couples:

What Sen. Rubio appears to be up to here is targeting the so-called marriage penalty—the idea that since EITC eligibility is based on family income, combining incomes through marriage can lead formerly eligible workers to lose eligibility.

But it sounds to me like he’s losing the income targeting of the program and will end up shifting current EITC spending away from single parents with kids to married couples with kids (along with childless adults, who get little—too little—from the EITC). Given that kids in single parent families are already more likely to be poor than those in married families, the only way this idea could not increase child poverty would be if he spent considerably more on it than is being expended on the EITC. And that’s not likely what he’s got in mind.

This would fit with Rubio’s belief that government programs should encourage marriage, a popular notion in conservative circles. Now, it so happens that I think we should encourage marriage. In fact, I wish this were a more popular notion among the educated liberal class, which pretty clearly thinks marriage is a great thing but is often skittish about “imposing” its values on others. I say: be less skittish! Nobody wants to lock others into bad or abusive marriages, but generally speaking, marriage has a ton of benefits: for the couple itself, for their children, and for society. I’m all for it.

That said, I’m pretty skeptical that the government should be in the business of encouraging or discouraging marriage, and I’m even more skeptical that offering a few more or a few less dollars in welfare programs is likely to have any effect anyway. So I share Bernstein’s concerns. However, there’s no special reason to think the status quo is ideal in this regard, so if Rubio’s proposal ends up shifting spending a bit, I’m happy to evaluate it on the merits.

Still, the devil is really in the details here. EITC is a program with a lot of history behind it, and we know that it works pretty well. Wage subsidies show some promise, but they’re untested and extremely sensitive to program design. We’ll know how serious Rubio is about this stuff based on how much thought he ends up putting into his final proposal. I’ll be waiting.

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Here’s How to Tell if Marco Rubio is Serious About Fighting Poverty

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