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Archive for May 5th, 2013

Austerity never works: Deficit hawks are amoral — and wrong

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Impressive and lengthy article in Salon by Robert Kuttner:

In this, the fifth year of a prolonged downturn triggered by a financial crash, the prevailing view is that we all must pay for yesterday’s excess. This case is made in both economic and moral terms. Nations and households ran up unsustainable debts; these obligations must be honored — to satisfy creditors, restore market confidence, deter future recklessness and compel people and nations to live within their means.

A phrase often heard is “moral hazard,” a concept borrowed by economists from the insurance industry. In its original usage, the term referred to the risk that insuring against an adverse event would invite the event. For example, someone who insured a house for more than its worth would have an incentive to burn it down. Nowadays, economists use the term to mean any unintended reward for bad behavior. Presumably, if we give debt relief to struggling homeowners or beleaguered nations, we invite more profligacy in the future. Hence, belts need to be tightened not just to improve fiscal balance but as punishment for past misdeeds and inducement for better self-discipline in the future.

There are several problems with the application of the moral hazard doctrine to the present crisis. It’s certainly true that under normal circumstances debts need to be honored, with bankruptcy reserved for special cases. Public policy should neither encourage governments, households, enterprises or banks to borrow beyond prudent limits nor make it too easy for them to walk away from debts. But after a collapse, a debt overhang becomes a macroeconomic problem, not a personal or moral one. In a deflated economy, debt burdens undermine both debtors’ capacity to pay and their ability to pursue productive economic activity. Intensified belt-tightening deepens depression by further undercutting purchasing power generally. Despite facile analogies between governments and households, government is different from other actors. In a depression, even with high levels of public debt, additional government borrowing and spending may be the only way to jump-start the economy’s productive capacity at a time when the private sector is too traumatized to invest and spend.

The idea that anxiety about future deficits harms investor or consumer confidence is contradicted by both economic theory and evidence. At this writing, the U.S. government is able to borrow from private money markets for 10 years at interest rates well under 2 percent and for 30 years at less than 3 percent. If markets were concerned that higher deficits 5 or even 25 years from now would cause rising inflation or a weaker dollar, they would not dream of lending the government money for 30 years at 3 percent interest. Consumers are reluctant to spend and businesses hesitant to invest because of reduced purchasing power in a weak economy. Abstract worries about the federal deficit are simply not part of this calculus.

“Living within one’s means” is an appealing but oversimplified metaphor. Before the crisis, some families and nations did borrow to finance consumption — a good definition of living beyond one’s means. But this borrowing was not the prime cause of the crisis. Today, far larger numbers of entirely prudent people find themselves with diminished means as a result of broader circumstances beyond their control, and bad policies compound the problem.

After a general collapse, one’s means are influenced by whether the economy is growing or shrinking. If I am out of work, with depleted income, almost any normal expenditure is beyond my means. If my lack of a job throws you out of work, soon you are living beyond your means, too, and the whole economy cascades downward. In an already depressed economy, demanding that we all live within our (depleted) means can further reduce everyone’s means. If you put an entire nation under a rigid austerity regime, its capacity for economic growth is crippled. Even creditors will eventually suffer from the distress and social chaos that follow.

Take a closer look at moral hazard ex ante from ex post and you will find that blame is widely attributed to the wrong immoralists. Governments and families are being asked to accept austerity for the common good. Yet the prime movers of the crisis were bankers who incurred massive debts in order to pursue speculative activities. The weak reforms to date have not changed the incentives for excessively risky banker behaviors, which persist.

The best cure for moral hazard is the proverbial ounce of prevention. Moral hazard was rampant in the run-up to the crash because the financial industry was allowed to make wildly speculative bets and to pass along risks to the rest of the society. Yet in its aftermath, this financial crisis is being treated more as an object lesson in personal improvidence than as a case for drastic financial reform.

Austerity and its alternatives

The last great financial collapse, by contrast,  . . .

Continue reading.

Written by Leisureguy

5 May 2013 at 3:14 pm

Simple cooking

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I am looking forward to this kale, and I was turning over the flavors in my mind, thinking, “I should blog this,” but then realized this is about as simple and obvious a way to cook kale there is. Still, writing it brings it to mind:

1 extremely fresh and crisp small bunch of red bor kale – that describes what I have

Chop kale well, mincing the stems, and put into a steamer. Steam for 20 minutes.

At this stage you can continue or refrigerate the steamed kale for later use (as salad, in soups, or as follows).

I want to keep the extra virgin olive oil as fresh and tasty as possible—that is, I want an uncooked flavor, and I want it in front. So that means adding the olive oil just before serving.

I wanted to sauté the kale, but I have a very nice nonstick pan. So:

2 Tbsp pine nuts in heated skillet

Toast, shaking skillet, until you can smell them and they’re slightly darker. Add:

1-2 cloves garlic, minced
the red kale that you steamed
juice of 1 lemon (Meyer if you have it; I don’t)

Continue sautéing, stirring frequently with wooden implement (I use this, but with a 12″ handle, which he’s happy to do (the 10″ just feels too short to me)—I use mine so much I have three), until the garlic is cooked—say, 4-5 minutes over medium-high heat.

Just before serving, drizzle 2 tsp organic estate-bottled California olive oil over the top—organic for obvious reasons, estate-bottled so you know what you’re getting (unlike when buying the store brand, for example), and California because I read Extra-Virginity.

UPDATE: I got to thinking about colcannon, and since we have those already-boiled baby potatoes, I sliced a number of them into thick slices, put some butter and some olive oil in the pan along with 1/2 chopped Spanish onion. Sautéed that for quite a while, stirring frequently, until onions began to brown, the added the pine nuts and mined garlic. I sautéed that a minute, added 2 Tbs of Amontillado sherry (to help cool pan: it was hot) and cooked that off, then added kale and heated/sautéd it for a while, then squeezed a lemon on it. Delish.

I think it sounds tasty. I was watching myself clean up the kitchen. Melissa Clark (whose columns in the NY Times I increasingly like) wrote once that when she cooks, she cleans everything as she goes: get a spoon dirty, wash it, put it in drying rack; finish a pot, wash it, into the drying rack. As a result, as she points out, the clean-up is complete by the time the dish is ready—it’s like a photo in a 50’s magazine ad: the dish removed from the oven in a spotless kitchen (by a housewife wearing heels and a string of pearls, but I don’t go that far). Turns out, I found, that’s easy.

Clark said she started the habit in a tiny kitchen when it was a necessity: no room for a dirty dish. I started the same discipline after one time when The Wife pointed out that she had no place to put something down. I like to fix problems, so I decided I would see, as an experiment, just how squared-away a kitchen can be, in real life. In other words, I made it a game, between me and the kitchen: it would try to get messy, I would prevent it.

It was an amazing change in perspective. Now, when walking into the kitchen, I actively look for anything the least bit dirty or out of place: a dirty dish or spoon, a smear on the countertop, a box left out on the counter, a cupboard door ajar, whatever. And anything I found—a score for the kitchen—I immediately fixed—a score for me and returning the kitchen to its default state.

What’s interesting is that this effort is cumulative, in a way. At first I had a lot to do every time I was in the kitchen, but quite soon, I had less to do—and not just  a little less: practically nothing. If I walked through the kitchen and see a dirty bowl or two, I wash them, put them in the drying rack, and—on my next kitchen visit—put them away in the cupboard. By always looking for something to fix, I find fewer and fewer things that need fixing, so they in turn become lighter and lighter tasks, to the point that it’s literally no bother to do them: I can get them done and the kitchen pristine again in less time than it takes to tell it. And indeed, spotting a task to do is a pleasure: a score for me. 🙂

The Eldest has long cooked this way, but it took a deliberate decision on my part to put it into practice. As I say, the payoff is quick. And, in effect, it costs no real effort: all those glasses, dishes, pots, and implements are going to have to be cleaned and put away in any case. Postponing it makes for more work, not less. And making a game of it renders it enjoyable, especially since I’m winning.

Written by Leisureguy

5 May 2013 at 2:45 pm

The House Prefers Chaos to Order

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An editorial in the NY Times:

“Regular order!” That has been the demand of House Republicans for three years, insisting on a return to the distant days when Congress actually passed budget resolutions and spending bills, instead of paying for the government through shortsighted stopgap measures.

“Senate Democrats have done nothing,” Speaker John Boehner said on “Meet the Press” on March 3, referring to the Senate’s failure to pass a budget since 2009. “It’s time for them to vote. It’s time for us to get back to regular order here in Congress.” The two chambers could try to resolve their differences in a conference committee, he said, “and maybe come to some agreement.”

But a funny thing happened a few days after those comments were made: the Senate agreed to that demand and actually passed a budget. Suddenly all those Republican cries for regular order stopped. Suddenly the House has no interest in a conference with the Senate. Instead, Congress is preparing for yet another budget crisis.

A few days ago, when Harry Reid, the Senate majority leader, tried to appoint members of a conference committee, Republicans refused to allow it, saying it would cause “complications for the House.” As Senator Jeff Sessions, the leading Republican on the Budget Committee, explained it, “We haven’t been able to have any understanding on how this conference might work.”

In fact, Republicans know exactly how it would work: they would have to compromise. The Senate would have to agree to some of the House’s spending cuts, and the House would have to agree to some of the Senate’s spending increases and the tax increases on the rich to pay for them. As the country has learned in recent years, House Republicans are incapable of compromise on those issues.

Being intransigent in a formal budget conference, however, would put Republicans in a bind. The public would be able to see that Democrats were offering billions in spending cuts while Republicans were offering nothing. And if a conference did not produce an agreement in 20 days, members could offer “motions to instruct” the committee that required debate and a vote, which the speaker could not use his usual powers to stop. That, too, could cause embarrassment for the Republican leadership, as Democrats and Tea Party members offered a series of motions that would demonstrate how incoherent the Republican agenda truly was.

House leaders are stalling by insisting on a “preconference,” which Patty Murray, the Senate budget chairwoman, has resisted. Clearly, what is frustrating Republicans is that they do not have an imminent crisis to exploit to get their way. Since 2011, they have repeatedly relied on the threat of a government shutdown, or a possible credit default, to force damaging spending cuts. (That is how the sequester was created.)

Even now, they are discussing using the debt-ceiling expiration, later this summer or fall, to extort corporation-friendly changes to the tax code that raise no revenue. And this week they are bringing up a dangerous bill that would pay private bondholders in the event of a default.

The demands for regular order were hollow and dishonest. The only way House Republicans can achieve their extremist agenda is not through preserving order, but by causing chaos.

The GOP consistently shows bad faith. And their inability to govern is ruining the country.

Written by Leisureguy

5 May 2013 at 10:12 am

Posted in Congress, GOP

Special report on the torture method commonly used in US prisons: Solitary confinement

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Humans are social animals, and solitary confinement deprives the prisoner of a basic human need—and is clearly torture, leading often to mental breakdown. Mother Jones has an excellent report on the practice in the US, which imprisons more of its citizens than any country on earth: the Prison Nation. The table at the link tells the story, but to take a few examples (with the number representing the number imprisoned per 100,000 population):

716 US – We’re Number One!!
527 Rwanda
510 Cuba
502 Russia
333 Iran
170 China (may be 121)
96 UK
55 Japan
47 Iceland

Take a look at this collection of articles and information that Mother Jones has assembled. The lead article is by Shane Bauer, entitled “Solitary in Iran Nearly Broke Me. Then I Went Inside America’s Prisons.” and it begins:

IT’S BEEN SEVEN MONTHS since I’ve been inside a prison cell. Now I’m back, sort of. The experience is eerily like my dreams, where I am a prisoner in another man’s cell. Like the cell I go back to in my sleep, this one is built for solitary confinement. I’m taking intermittent, heaving breaths, like I can’t get enough air. This still happens to me from time to time, especially in tight spaces. At a little over 11 by 7 feet, this cell is smaller than any I’ve ever inhabited. You can’t pace in it.

Like in my dreams, I case the space for the means of staying sane. Is there a TV to watch, a book to read, a round object to toss? The pathetic artifacts of this inmate’s life remind me of objects that were once everything to me: a stack of books, a handmade chessboard, a few scattered pieces of artwork taped to the concrete, a family photo, large manila envelopes full of letters. I know that these things are his world.”So when you’re in Iran and in solitary confinement,” asks my guide, Lieutenant Chris Acosta, “was it different?” His tone makes clear that he believes an Iranian prison to be a bad place.

He’s right about that. After being apprehended on the Iran-Iraq border, Sarah ShourdJosh Fattal, and I were held in Evin Prison‘s isolation ward for political prisoners. Sarah remained there for 13 months, Josh and I for 26 months. We were held incommunicado. We never knew when, or if, we would get out. We didn’t go to trial for two years. When we did we had no way to speak to a lawyer and no means of contesting the charges against us, which included espionage. The alleged evidence the court held was “confidential.”

What I want to tell Acosta is that no part of my experience—not the uncertainty of when I would be free again, not the tortured screams of other prisoners—was worse than the four months I spent in solitary confinement. What would he say if I told him I needed human contact so badly that I woke every morning hoping to be interrogated? Would he believe that I once yearned to be sat down in a padded, soundproof room, blindfolded, and questioned, just so I could talk to somebody?

I want to answer his question—of course my experience was different from those of the men at California’s Pelican Bay State Prison—but I’m not sure how to do it. How do you compare, when the difference between one person’s stability and another’s insanity is found in tiny details? Do I point out that I had a mattress, and they have thin pieces of foam; that the concrete open-air cell I exercised in was twice the size of the “dog run” at Pelican Bay, which is about 16 by 25 feet; that I got 15 minutes of phone calls in 26 months, and they get none; that I couldn’t write letters, but they can; that we could only talk to nearby prisoners in secret, but they can shout to each other without being punished; that unlike where I was imprisoned, whoever lives here has to shit at the front of his cell, in view of the guards? . . .

Continue reading. Other articles on the page:

Written by Leisureguy

5 May 2013 at 9:45 am

Posted in Government, Law

The Conservative Logic of Ferguson’s Smears of Gays, Muslims, Obama, and Krugman

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I’ve been reading about Nial Ferguson’s jaw-dropping display of bigotry, and Juan Cole has a nice summary of the issue:

Harvard historian Niall Ferguson apologized Saturday for having said that economist John Maynard Keyes did not care about future generations because he was gay and had no children.

The question I want to raise here is the over-all logic of Ferguson’s underlying reasoning. What makes him continually make embarrassing and simple errors of fact, as with his attack on Obama last summer, which Newsweek did not bother to fact-check before publication.

I would argue that the reason that conservatives like Ferguson hate Keynes is that Keynes demonstrated conclusively that when the economy goes into a deep recession or depression, the only way to get back out of it is for the government to increase spending. Contemporary conservatives do not want to admit that government plays an indispensable set of economic roles. They want to believe that the corporations can get along just fine without the state. Economists and economic historians often take money from corporate interests to address them or even write studies that flatter their prejudices. Paul Krugman once wondered, after the 2008 meltdown, why so many academic and professional economists are so anti-Keynesian, given the impressive record of correct prediction attendant on the Keynsian enterprise. I am more cynical. I don’t have to guess. I think some, or many, are corrupted by the big money that flows from upholding the independent role of capital and from belittling government efforts.

Ferguson’s outrageous polemic is an example of . . .

Continue reading.

Written by Leisureguy

5 May 2013 at 8:42 am

Posted in Education

“Roast” v. “Bake”

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We have two different verbs for cooking food in an oven: “roast” and “bake”. You roast a leg of lamb, you bake a loaf of bread. But sometimes the right verb is hard to choose: vegetables are roasted by themselves, but baked when in a casserole. Perhaps “bake” is used for oven-cooking a mix of ingredients in a dish, and “roast” is using when oven-cooking something closer to being cooked along: a cut of meat, or vegetables (carrots, asparagus, or the like). Elise of Simply Recipes emailed that she “roasts” a whole chicken, but (say) chicken parts that are cooked in an oven are “baked.”

I don’t know, and I no longer have my invaluable copy of Merriam-Webster’s Dictionary of Synonyms. Synonyms, despite what you learned in the fourth grade, are not different words that mean the same thing; they are different words with similar meanings, and synonymy consists of explicating the different connotations and nuances of the cluster of words that mean almost the same thing. It’s the differences between synonyms that are interesting (and important), and I find that dictionary (replacement copy on the way) fun simply to read.

Written by Leisureguy

5 May 2013 at 8:39 am

Posted in Books, Daily life

My kind of cake: Chocolate Caramel Bacon

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Written by Leisureguy

5 May 2013 at 6:48 am

Posted in Food, Recipes & Cooking

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