Rortybomb

Why Are There No Good Conservative Critiques of Trump’s Unified Government?


We are now 14 months into united conservative governance. Conservatives came into power with a clear plan to rip out Obama’s achievements and overhaul the whole modern state. Paul Ryan and Mitch McConnell planned on running everything through reconciliation. They also had a President who would sign anything. So how is it going?
via Why Are There No Good Conservative Critiques of Trump’s Unified Government?

Worth a read.

Six Problems with the GOP Debate on Financial Reform - Roosevelt Institute

Six Problems with the GOP Debate on Financial Reform - Roosevelt Institute:

Nobody Wants to Be a SIFI

Actually, institutions declared systemically important fight against it, hard. GE sold off GE Capital, and in the process its chairman said “GE will work closely with [regulators] to take the actions necessary to de-designate GE Capital as a Systemically Important Financial Institution.” They wanted out.

MetLife is suing the government because it was designated SIFI status. Carl Icahn is pushing AIG to break itself up to avoid its SIFI status. JP Morgan sold off 6 percent of its assets to prevent having the highest SIFI capital surcharge applied to them. The Too Big To Fail subsidy that is supposed to explain why people would want SIFI status has shrunk dramatically toward zero since the crisis. There is no bragging. There is solid resistance, as there should be.

The candidates funded by the hedge fund industry and the big banks wold be complaining about Financial reforms and The Volcker rule if it wasn’t a burden to their funders. Banks do not want to be tagged as a SIFI. The costs imposed on them are too great. They would much rather externalize their risks to others and ultimately the tax payers. Internalizing their risks it bad for bonus season.

Two Contradictory Arguments That Dodd-Frank is Crony Capitalism | Next New Deal

Two Contradictory Arguments That Dodd-Frank is Crony Capitalism | Next New Deal:

I’m pretty convinced that the term “crony capitalism,” as deployed by the right, is useless as a political or analytical tool. I keep a close eye on how conservatives talk about financial reform, and according to the right, Dodd-Frank is crony capitalism. Oh noes! But what does that mean, and how can we stop it? Here’s a fascinating case in point: two AEI scholars with different publications argue that we need to stop Dodd-Frank from enabling crony capitalism, and then proceed to describe two opposite, mutually exclusive sets of problems and solutions.

I missed this the first time around, but I’m glad I got a chance to read it. This is worth a read. There are a few words that are now meaningless in political discussion because they are used to mean different things, even contradictory things. Crony Capitalism joins Socialism as a term that means something I don’t like and has lost all other meaning.

The Tea Party thinks it hates Wall Street. It doesn’t.

The Tea Party thinks it hates Wall Street. It doesn’t.:

many Tea Party Republicans are in favor of the same bills favored by the financial industry. Take the Financial Takeover Repeal Act of 2013, a one-line bill sponsored by Sen. David Vitter (R-La.) that repeals Dodd-Frank and replaces it with nothing. This bill has 22 co-sponsors this year, including notable Tea Party senators such Mike Lee, Rand Paul and Ted Cruz.

The best way to explain the Tea Party and Wall Street is The enemy of my imaginary enemy is my imaginary friend. The Tea Party is in favor of imaginary Randian makers and opposed to imaginary Randian looters. Wall Street thinks the same. The only rift is who they imagine the looters and makers are. This is the problem with Randian thinking. 

No, Marco Rubio, government did not cause the housing crisis

No, Marco Rubio, government did not cause the housing crisis

For obvious reasons, this argument is very popular on the right, but there's precious little to back it up. The core claim can be a bit slippery, but it tends to go something like this: the existence and affordability goals of Fannie Mae and Freddie Mac (the GSEs) and the Community Reinvestment Act (CRA) were a major reason we had a subprime-driven housing bubble and then a crash. The only problem? Pretty much all the evidence on the housing crisis shows that that's not true.

worth a read.

How LIBOR Impacts Financial Models and Why the Scandal Matters

How LIBOR Impacts Financial Models and Why the Scandal Matters

Matt Taibbi asks why nobody is freaking out about the LIBOR scandal, Robert Reich calls it the scandal of all scandals, and Dylan Matthews has a great explainer of the whole thing here. Abigail Field has more at Reality Check. This can be confusing stuff, so I want to go through a very simple example of how this impacts the markets.

The right isn’t talking about it because they haven’t figured out an angle to blame this on too much regulation or taxes being to high. Once they figure out a way to claim the scandal was caused by something they oppose, they will start talking about it. Until then, enjoy this really good explanation by Mike Konczal at Rortybomb.

It would, of course, be absurd to think that the white working class is suffering because they live in ghettos which reflect and reinforce their shiftlessness in addition to the idea that our country is too soft on crime and too focused on rehabilitating prisoners. The last time the neoconservative intellectual movement had to explain something like this it was about poverty concentrated among African-Americans and in urban environments, and this was their answer. But the white working class lives everywhere - in cities and suburbs, in dynamic towns and dying ones, in conservative ones and liberals ones - and they are having a rough economic time of it everywhere. And nobody is arguing that our criminal justice system is too lenient.

It would, of course, be absurd to think that the white working class is suffering because they live in ghettos which reflect and reinforce their shiftlessness in addition to the idea that our country is too soft on crime and too focused on rehabilitating prisoners. The last time the neoconservative intellectual movement had to explain something like this it was about poverty concentrated among African-Americans and in urban environments, and this was their answer. But the white working class lives everywhere - in cities and suburbs, in dynamic towns and dying ones, in conservative ones and liberals ones - and they are having a rough economic time of it everywhere. And nobody is arguing that our criminal justice system is too lenient.

What's Missing From Charles Murray's Diagnosis of the White Working Class?

The reason they want this to be a cultural problem rather than an economic one has everything to do where the economic analysis leads. It leads to policies that are a near 180 from the policies the right has been pushing for the past 50 years. And like any other fanatic movement, when the prescribed policy fails they look for scapegoats and demand we double down on failure.

Huntsman and the GOP Debate on Too Big To Fail

There are a series of proposals, mostly surrounding taxes and caps on size, leverage and presumably complexity. The first bullet point, a cap on size relative to GDP, is similar to the SAFE Banking Act, which failed in the 2010 Senate with 33 votes. They all sound like good ideas, though they received little-to-no GOP support during the debates.

Mike Konczal sorts through Huntsman plan to end To big to Fail. Wonky but worth a read.

Groundhog Day Jobs Number Report

Groundhog Day Jobs Number Report

I feel like I'm in the movie Groundhog Day when it comes to the job numbers. I wake up on the first Friday each month to the same story - subpar job growth, no budging in key indicators, the insanity of the "anti-stimulus" of bleeding government jobs - and then wake up to it again next month. This month looks like the past dozen: 80,000 jobs wsere created, while the government sector shed 24,000 jobs.
If the elimination of public sector jobs causes growth in the private sector, then why isn’t that happening?

Bloomberg's Awful Comment; What Can We Say For Certain Regarding the GSEs?

Bloomberg's Awful Comment; What Can We Say For Certain Regarding the GSEs?

we should mention that the conservative think tanks spent the 2000s saying the exact opposite of what they are saying now, and the opposite of what Bloomberg said above. They argued that the CRA and the GSEs were getting in the way of getting risky subprime mortgages to risky subprime borrowers. My personal favorite is Cato's Should CRA Stand for "Community Redundancy Act?", (2000, here's a writeup by James Kwak), arguing a position amplified in Cato's 2003 Handbook for Congress Financial Deregulation Chapter: "by increasing the costs to banks of doing business in distressed communities, the CRA makes banks likely to deny credit to marginal borrowers that would qualify for credit if costs were not so high."
Amazing. Yet this lie about the CRA causing the sub-prime crisis persists.

So, When Do the Confidence Fairies Arrive? << Rortybo mb

Image giving an economics undergraduate the following question: "Unemployment is high. Inflation is low. Borrowing costs are cheap. What should the government do?" and they responded "cut the short-term deficit immediately to show strength!" You'd have to give them a bad grade, right? But that's what our government, Democrats and Republicans, are doing.

But there's a theory that by cutting $39 billion from the government over the weekend and by Obama's signaling that he is transitioning to tackling the long-term debt he will unleash the confidence of the private market.


From So, When Do the Confidence Fairies Arrive? << Rortybomb


Good explanation on why short term cuts are not going to help much.

Why is Paul Ryan's Budget Trying to Dismantle Financial Reform?

The budget Paul Ryan released yesterday has huge cuts that are likely to fall on the poorest Americans while offering all kinds of bonuses to the top 1%. Others will be talking about how it eliminates Medicare and Medicaid. I want to talk about how it dismantles one of the few regulations put on Wall Street post-crisis.


From Why is Paul Ryan's Budget Trying to Dismantle Financial Reform? << Rortybomb


A must read article

Structural Unemployment Myths: Construction, Moving, Mancessions

My other favorite pernicious myth of this recession is the story of the Mancession. This hit the high moment with Hannah Rosin's article The End of Men in The Atlantic. This is the idea is that male employment has suffered in this recession, and the workforce has been overtaken by women because of the possibility that "postindustrial society is simply better suited to women."


From Structural Unemployment Myths: Construction, Moving, Mancessions


Rortybomb on Structural Unemployment Myths. Wonky, but an easier read than you might think.

GOPers Vote For TARP Bailout Continuation, Against Bank Bailout Fund

in a scramble to save the bill in the wake of Sen. Scott Brown’s (R-MA) objections to the conference report, Democrats worked with moderate Republicans to figure out a new way to pay for Wall Street reform. What they came up with was pretty simple: end the TARP legislation (i.e., the much-maligned bank bailout) early. Every Republican negotiator on the conference committee objected, some vociferously.

Sen. Judd Gregg (R-NH) called it “fraud on the American people.

Not to be outdone, Sen. Mike Crapo (R-ID) called it “smoke and mirrors.”


From GOPers Voted For TARP Bailout Continuation

The bank tax actually would have had negligible customer impact. Lost in today's hurried debate was the absence of any empirical backing for the critics? argument. Indeed, two factors would have likely combined to render the impact on customer pricing trivial.

- First, only large banks would have been subject to the tax, so efforts to raise large-bank customer pricing, in many product markets, would have simply caused a market share shift to the smaller banks not subject to the levy. Ironically, the Massachusetts retail deposit business is a clear example of such a market.
- Second, even in those product markets dominated by large banks, the bank tax was so small that, even if its burden could have been shifted completely to customers, the impact would have been, in practical terms, undetectable .


From The short life of the Bank Tax << Rortybomb

The GOP is the party of free taxpayer money and no corporate responsibility. This is a vote against Banks paying for future bailouts and for taxpayers continuing to pay for the current bailout. The message here is that personal responsibility is for suckers.