Specifically, What Should Be Done For Jobs?
October 6, 2009 10:02 pm

....What to do? With the debt ceiling approaching and the gravitational pull of the 2010 elections increasing, the White House can't go back to Congress with a formal bill to enlarge the stimulus package. Four simpler moves would be to:

(1) Use existing authority under both the stimulus package enacted earlier this year and the nefarious TARP bailout fund -- extending and combining them into a fund to make up for state and local cuts in public school budgets, childrens' health, public health (we need workers to administer swine flu vaccine) and public transportation. Instead of bailing out banks and giant automakers, we should switch to bailing out public services that average people need.

(2) Propose a one-year payroll tax holiday on the first $20,000 of income. Republicans as well as Blue Dog Dems could go along with this, and it would be a highly progressive tax cut since 80 percent of Americans pay more in payroll taxes than they do in income taxes.

(3) Give small businesses a "new jobs tax credit" for every net new job created over the next year. Granted, under normal circumstances this sort of jobs credit doesn't have much effect, and it's difficult to separate hires that would have happened anyway from net new ones. But we're not in normal circumstances; small businesses, which are responsible for most new jobs, still aren't hiring. They need a boost.

(4) Dramatically expand the Small Business Administration's lending programs and have the Fed buy up the SBA's debt. Big banks are not lending to small businesses. TARP has been an utter failure in this regard. The SBA and the Fed should circumvent them and help small businesses get the capital they need, so they can start hiring again.....

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Carrying a gun increases risk of getting shot and killed
October 7, 2009 10:05 pm

Ewen Callaway. New Scientist

.....Overall, Branas's study found that people who carried guns were 4.5 times as likely to be shot and 4.2 times as likely to get killed compared with unarmed citizens. When the team looked at shootings in which victims had a chance to defend themselves, their odds of getting shot were even higher.

While it may be that the type of people who carry firearms are simply more likely to get shot, it may be that guns give a sense of empowerment that causes carriers to overreact in tense situations, or encourages them to visit neighbourhoods they probably shouldn't, Branas speculates....

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Beatles Looking Happy
October 7, 2009 10:06 pm

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The Quiet Coup
October 10, 2009 10:08 pm

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government - a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF's staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we're running out of time.

Simon Johnson, the Atlantic

....Policy changes that might have forestalled the crisis but would have limited the financial sector's profits - such as Brooksley Born's now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998 - were ignored or swept aside.

The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry's ascent. Paul Volcker's monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.

Not surprisingly, Wall Street ran with these opportunities. From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent.....

......there flowed, in just the past decade, a river of deregulatory policies that is, in hindsight, astonishing:

insistence on free movement of capital across borders;

the repeal of Depression-era regulations separating commercial and investment banking;

a congressional ban on the regulation of credit-default swaps;

major increases in the amount of leverage allowed to investment banks;

a light (dare I say invisible?) hand at the Securities and Exchange Commission in its regulatory enforcement;

an international agreement to allow banks to measure their own riskiness;

and an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation......

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Out of Work
October 11, 2009 10:10 pm

Kevin Drum

.....The worst recession of the past half century, the 1980-82 double dip, produced a drop of only 3.0 percentage points.  I don't think anybody has ever used the modifier "only" to describe that recession before, but it fits now: the current recession has produced a drop of 4.6 percentage points so far.  That's double the postwar average.  The drop from the previous peak in 2000 is 5.9 percentage points.  So far.  The job scene is simply devastating right now.  More from Andrew Samwick here and Brad DeLong here.

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Lost in translation
October 11, 2009 10:13 pm

Paul Krugman

Oh my God — literally. Conservapedia is trying to produce a “fully conservative translation” of the Bible — although “translation” seems to be a misnomer, since they’re apparently going to start with King James and fix it, rather than go back to the original texts.

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