January 8, 2018

Posted by orrinj at 5:59 PM


Economist James K. Galbraith isn't celebrating Dow 25,000 (Market Watch,  Jan 8, 2018)

The Fed seems to be stumped by the lack of inflation.

There hasn't been inflation in the economy since the early 1980s. It collapsed with the end of the Soviet Union and with the rise of China as a supplier for consumer goods. So the Fed has been patting itself on its back for decades [of] holding back a phenomenon that doesn't exist. [The Fed is like] the little Dutch boy with the finger in the dike who never troubles himself to look over the levy to see that the lake is dry. Economists have fed into that with this completely made-up view that it is the central bank that drives the inflation process -- it is not.

The Fed is trying to inch up interest rates. It this wise in your view?

What they're doing now, I think, is driven by their sense that it is historically normal to have a higher short-term interest rate. The problem is that having had the short rates low for such a long time, the long rates have come down. So what was historically normal before is no longer relevant. As they raise the short rates, they are going to cause trouble. The main trouble they've been causing is the rise of the dollar with respect to everything else. And that is going to make imports cheaper, exports harder. It is going to diminish the internal competitiveness of the economy, diminish internal employment. I suspect the Fed will be reluctant to cause too much chaos because they recognize that, once you have a very flat yield curve, you destabilize the financial markets. But to the extent that they pursue this particular line, they are going to run into that difficulty.

The central bank thinks the long-term unemployment rate is 4.6%.

There is no Phillips Curve, and there hasn't been for decades. The supply of labor is not a constraint. If you wish to pay people higher wages, you could lure people back out of retirement. Net immigration has basically stopped. If you needed more workers, it would start up again. So we don't have a real labor-force constraint. We are not going to get inflationary pressure from the labor markets. It has been 40 years. Economists are slow learners, and central bankers are a slow-learning subset. They should recognize that things did change in the 1980s.

Workers cannot bargain for higher wages?

There is none of the bargaining power that existed in the 1950s and '60s when you had a union-driven manufacturing sector that could negotiate steady increases in wages. That hasn't existed since the 1980s.

Posted by orrinj at 5:53 PM


Bannon group shopped anti-Trump document in 2015 (Sara Murray, Evan Perez and Jeremy Diamond, 1/08/18, CNN)

A conservative watchdog group led by Bannon tried to discredit Trump in the early stages of the 2016 Republican presidential primary by shopping a document alleging that Trump had ties to mobsters, according to conservative sources and a copy of the document reviewed by CNN.

The anti-Trump opposition research was the work of author Peter Schweizer for the Government Accountability Institute, which he cofounded with Bannon in 2012. It described years of alleged business connections between Trump companies and organized crime figures, allegations that have circulated among Trump detractors for years.

The New York Times reported on the document on Friday.

The GAI is backed by the Mercer family, one of the largest benefactors for Trump's campaign. Rebekah Mercer, the daughter of hedge fund billionaire Robert Mercer, is listed as the group's chairwoman on its website. But in 2015, when the document was produced, the Mercers were backing the campaign of one of Trump's rivals, Texas Sen. Ted Cruz, and Bannon had not yet joined the Trump campaign.

In early 2016, at the height of the Republican primary fight, Cruz cited possible mob ties as one reason for Trump to release his taxes. Cruz and his campaign cited published news accounts at the time as the basis for making the charge.

The document offers a glimpse at behind-the-scenes efforts by conservatives to derail Trump's presidential bid. The document is similar to opposition research produced for both Republicans and Democrats targeting Trump. The best known of those is one produced by the Washington firm Fusion GPS alleging ties between Trump and Russians, which now has helped spawn a broad investigation led by special counsel Robert Mueller.

"We research political figures from all political parties and our basic premise is follow the money. That's what guides our research approach," Schweizer told CNN.

Posted by orrinj at 5:34 PM


If You Find Yourself Automated Out Of A Job, Blame The New Tax Plan (BROOKS RAINWATER, 1/08/18, Fast Company)

Tax policy will now make it easier and cheaper to invest in software, automation, and robots, rather than all of us. Before, capital investments had to be depreciated over a series of years, but now businesses can write them off right away. Imagine a warehouse owner in Southern California is faced with increased demand and must hire to meet those needs. They now face a choice to immediately buy a tax-advantaged robot or instead hire a human to make sure they can ship out more kitchen sinks and ramen noodles. With the tax plan in place, it shifts the balance and makes it a much easier choice to invest in a new robot that can slide goods across the floor. Should a business that does not want to pay a competitive wage to attract employees be incentivized to do so by the government through tax policy?


Posted by orrinj at 5:32 PM


In states that didn't expand Medicaid, hospital closures have spiked (CASEY ROSS, JANUARY 8, 2018, STAT)

In recent years Obamacare's Medicaid expansion has created a financial fault line in American health care. Hospitals in states that enacted the expansion got a wave of newly insured patients, while those in states that rejected it were left with large numbers of uninsured individuals.

A new study released Monday reports a crucial consequence of that divide: Nonexpansion states have suffered a significant increase in hospital closures. States that expanded benefits, on the other hand, saw their rate of closures decline. 

Posted by orrinj at 5:26 PM


When a North Korean Missile Accidentally Hit a North Korean City (Ankit Panda and Dave Schmerler, January 03, 2018, The Diplomat)

What happens when a North Korean ballistic missile test fails in flight and explodes in a populated area? On April 28, 2017, North Korea launched a single Hwasong-12/KN17 intermediate-range ballistic missile (IRBM) from Pukchang Airfield in South Pyongan Province (the Korean People's Army's Air and Anti-Air Force Unit 447 in Ryongak-dong, Sunchon City, to be more precise). That missile failed shortly after launch and crashed in the Chongsin-dong, in North Korean city of Tokchon, causing considerable damage to a complex of industrial or agricultural buildings.

According to a U.S. government source with knowledge of North Korea's weapons programs who spoke to The Diplomat, the missile's first stage engines failed after approximately one minute of powered flight, resulting in catastrophic failure. The missile never flew higher than approximately 70 kilometers. The location of the missile's eventual impact was revealed exclusively to The Diplomat and evidence of the incident can be independently corroborated in commercially available satellite imagery from April and May 2017.

Do them now.

Posted by orrinj at 5:23 PM


US conveys 'concrete' steps for Pakistan: Pentagon (AFP, January 8, 2018)

The United States has told Pakistan what it must do if it wants Washington to resume paying out hundreds of millions of dollars in security aid, the Pentagon said Monday.

"Our expectations are straightforward," Pentagon spokesman Colonel Rob Manning told reporters.

"Taliban and Haqqani leadership and attack planners should no longer be able to find safe haven or conduct operations from Pakistani soil."

It's not really their soil though.  No one exercises sovereignty there.

Posted by orrinj at 3:44 PM


The Company of Trump's Pick for Health Secretary Tested Cialis on Kids (Gabriella Paiella, 1/08/18, The Cut)

On Tuesday morning, Alex Azar -- President Trump's nominee for Secretary of the Department of Health and Human Services (HHS) -- will appear before the Senate Finance Committee for his confirmation hearing. In advance of this, Politico brings us a fun fact about Azar: his old drug company once tested Cialis, the erectile dysfunction medication known for those weird bathtub commercials, on children.

Posted by orrinj at 3:36 PM


Seattle's sugary drink tax nearly doubles cost of Gatorade (Travis Pittman , January 08, 2018, KING5)

Jason Mercier from Washington Policy Center, which opposed the tax, shot a photo from inside a Seattle Costco that showed the price for a Gatorade 35-bottle variety pack was $15.99. That is until you add the new tax, which bumps it up by $10.34 for a total of $26.33. [...]

The city says the tax is expected to raise $15 million in its first year.

Posted by orrinj at 3:32 PM


Don't believe Michael Wolff's book about Trump if you want the truth (SEBASTIAN GORKA,  01/08/18, The Hill)

[W]hen I met Michael Wolff in Reince Priebus' office, where he was waiting to talk to Steve Bannon, and after I had been told to also speak to him for his book, my attitude was polite but firm: "Thanks but no thanks." Our brief encounter reinforced my gut feeling that this oleaginous scribe had no interest in being fair and unbiased.

When you attack the underling but strike the boss.

Posted by orrinj at 3:26 PM


WikiLeaks Steals Michael Wolff's Book (Martin Longman, January 8, 2018, Washington Monthly)

As a writer and editor, I am appalled that WikiLeaks decided to publish Michael Wolff's new book Fire and Fury. If you want to do the right thing, you'll go buy it rather than stealing it from the WikiLeaks link. It isn't a suppressed piece of government information of vital interest to the public. It's a book that is for sale, and offering it to everyone for free is not Julian Assange's decision to make. He's a crook, and he should be prosecuted for doing this.

This is a way for Assange and his patrons to strike back at Wolff and send a message to any publisher who thinks they'll make a lot of money selling tell-all books from inside TrumpWorld.

The three of them don't understand how information works very well.

Posted by orrinj at 3:17 PM


House Intelligence Committee's Section 702 Bill: Surveillance Expansion and No Meaningful Reform (Robyn Greene, JAN. 8, 2018, New America)

On Thursday, the House of Representatives will likely vote on a stand-alone measure to reauthorize and expand Section 702 of the Foreign Intelligence Surveillance Act, which is set to expire on January 19, 2018. The bill to be voted on is a modified version of the FISA Amendments Reauthorization Act of 2017 (H.R. 4478; now S. 139), which was reported out of the House Intelligence Committee on a party line vote, with at least four members voting "no" because of privacy concerns. OTI and a coalition of dozens of leading privacy groups strongly oppose the bill. The modifications to this bill reflected in the draft posted to the House Rules website are wholly insufficient to address the many concerns it raises.

Although its proponents seek to sell the bill as a reform measure, it contains no meaningful reforms to Section 702, and in several respects, it expands surveillance authorities and codifies the worst intelligence community practices rather than reforming them. As a result, this bill is worse than a clean reauthorization with a sunset.

Posted by orrinj at 3:05 PM


It's time for Democrats to take this drastic step on Trump and Russia (Greg Sargent January 8, 2018, Washington Post)

Democrats need to ensure that the transcripts of testimony delivered to Congress by the co-founders of the firm that commissioned the so-called Steele Dossier are made public. Hardball procedural tactics toward this end do exist: A Democratic senator can try to make the transcripts public by reading them into the congressional record on the floor.

This morning, two Democratic senators on the Judiciary Committee -- Richard Blumenthal (Conn.) and Sheldon Whitehouse (R.I.) -- sent a letter to GOP committee chair Charles Grassley demanding the release of the transcripts. A Democratic leadership aide tells me that if the GOP majority refuses, Democrats will escalate calls for the transcripts' release in coming days.

The entire notion that it matters how Justice found out Donald and Vlad were colluding is inherently odd.  All that matters is that the campaign didn't inform authorities themselves.

Posted by orrinj at 9:51 AM


Racing the Machine (ROBERT SKIDELSKY, 12/22/17, Project Syndicate)

Economists have always believed that previous waves of job destruction led to an equilibrium between supply and demand in the labor market at a higher level of both employment and earnings. But if robots can actually replace, not just displace, humans, it is hard to see an equilibrium point until the human race itself becomes redundant. [...]

[T]here is the assumption running through the report that automation is not just desirable, but irreversible. Once we have learned to do something more efficiently (at lower cost), there is no possibility of going back to doing it less efficiently. The only question left is how humans can best adapt to the demands of a higher standard of efficiency.

Philosophically, this is confused, because it conflates doing something more efficiently with doing it better. It mixes up a technical argument with a moral one. Of the world promised us by the apostles of technology, it is both possible and necessary to ask: Is it good?

Is a world in which we are condemned to race with machines to produce ever-larger quantities of consumption goods a world worth having? And if we cannot hope to control this world, what is the value of being human? These questions may be outside McKinsey remit, but they should not be off limits to public discussion.

It is Mr. Skidelsky's assumption that seems off the mark here; that the fundamental purpose of an economy is to create jobs.  He carries this mistake so far as to suggest that we might want to reduce efficiency to maximize employment, which was quite literally the original demand of the Luddites.

It seems more accurate to say that the point of an economy is to create wealth.

And while that could be cast as a technical discussion, consider this: if you ask people whether they prefer more work and less wealth or more wealth and less work, which do we think they'd choose? 

Posted by orrinj at 5:44 AM


African migrants in Israel face mass deportation - or imprisonment (Tania Krämer, 1/08/18, Deutsche-Welle)

"It is very frightening and many people are simply panicking," says Ghebrihiwet Tekle. He comes from Eritrea, has applied for asylum in Israel and is now volunteering in the office of the Hotline for Refugees and Migrants, an Israeli NGO based in Tel Aviv. The 37-year-old works here as a Tigrinya translator, a language spoken in Ethiopia and Eritrea. The mood is gloomy: A few days earlier, the Israeli immigration and border authorities launched a controversial campaign. The aim is to either get Eritrean and Sudanese asylum seekers to go to a third country or to imprison them indefinitely.

Posted by orrinj at 5:23 AM


Will Iran's Protests Help the Hard-Liners? (NAZILA FATHI, JAN. 8, 2018, NY Times)

Even more than the Green Movement of 2009, the recent protests -- and the reaction to them -- recalled those of the early 2000s. Both then and now, moderate political forces controlled Iran's presidency and its Parliament. And in both cases, the country's conservatives deployed intimidation, violence and deceit to undermine the moderates.

The question now is whether the conservatives will succeed in dominating politics and crushing the Iranian people's desires for reform. This time, they have some help on the world stage -- from an American president with a prolific Twitter account. But they also face a persistent challenge: The people seem more determined than ever. [...]

The recent protests seem to have been started in the city of Mashhad by conservative opponents of the reformist President Hassan Rouhani to undermine his government. 

Posted by orrinj at 5:17 AM


After spat over Trump book, White House adviser said ousted from CNN by security (SUE SURKES, 1/08/18, Times of Israel)

US President Donald Trump's special adviser Stephen Miller was escorted off a CNN set by security after he refused to leave the "State of the Union" studio following a fiery interview with host Jake Tapper, the Business Insider reported Monday.

Good idea; practicing his perp walk.