Last year, Matt Yglesias made one of the best political observations I’ve ever heard, “If the unemployment and inflation rates were reversed, would the Fed do something about it?” The point he was making was that the Fed is overly concerned about inflation. For the last four years, we have lived with unacceptably high unemployment while the Fed has worked to keep bond rates negative. It is madness and it speaks to elite thinking. Ben Bernanke seems to be saying, “No one I know is unemployed, so it must not be a problem. On the other hand, everyone I know has lots of money and they would be hurt by even a little inflation.”

Yglesias was back yesterday, pointing out a ludicrous boast that Bernanke made at the hearings, “My inflation record is the best of any Federal Reserve chairman in the postwar period”! Yglesias concedes that this is true—but only because we’ve had a pretty good economy since World War II. There weren’t any depressions. And again, he is able to cut right to the core of the matter, “No sensible person would look at America’s economic performance in the 1929-1933 period and say ‘man, they did a great job of fighting inflation.'”

There are two issues here. First, in a depressed economy it is a trivial matter to keep inflation low. So it is no great accomplishment for Bernanke to have done this. Second, allowing inflation to rise would have been a good thing. In fact, that is Ben Bernanke’s job. The Fed has a dual mandate: keep inflation low and employment high. Now these two things work against each other: rising employment pushes inflation up and and lowering employment pushes inflation down. So the Fed needs to balance these interests. Unfortunately, Bernanke hasn’t balanced them at all. He has done everything he could to keep inflation low and almost nothing to boost employment.

In the decades ahead, I’m sure that historians will look back at Bernanke and judge him very harshly. I doubt that he will be ranked below Greenspan. (How could he be?!) But whether because of cowardice or callousness, he has done a remarkably bad job for the country, but a great job for the bankers.

Jonathan Chait came out this morning and said what we all know in our hearts: John Boehner’s position on the Sequester is a teeny-tiny jobs program. Or to put it more bluntly: he doesn’t care about 700,000 jobs that will be lost if the Sequester stays the law; he only cares about one job: his own as Speaker of the House. I don’t think this is the only thing that is going on, but there is much to it. After all, a bipartisan plan could make it through the House; it is just that Boehner won’t allow the vote. And that just makes the national brand of the GOP that much worse.

This is another example of the paradox of power. Boehner has basically taken his career hostage. He now has quite a lot of power. He could cut deals with the White House that are great for the Republicans and then, with the help of House Democrats, he could get them enacted. But if he does that, he will surely lose his speakership. And thus the paradox: he has power only so long as he doesn’t use it.

Something like this goes on with every politician in the country. They make concessions for power. But they never really use the power (in the way they had wanted to when they started anyway) because they are trying to get more power. Or, as with Boehner, they are trying to hold onto their impotent power. Or, as with Obama, they’ve been so thoroughly assimilated into the system that they can’t imagine doing anything other than perpetuating it. If you think about it though, there is a whole lot of assimilation at all levels of government. If there weren’t, suicide rates among politicians would be very high because of the paradoxical position they place themselves in.

Chait thinks that Boehner will eventually accept a deal. I’m not keen to see this happen. I fear that Obama will be so eager for a deal that he will give away huge cuts in entitlement programs in exchange for rich people’s tip money. And what will be even worse will be watching liberal pundits dance in the streets, “Obama made Boehner cave!” The actual deal won’t matter. And then ten years from now, the loopholes will all be back, but the cuts will live on. So I’m almost hoping that Boehner continues to keep his power rather than use it.

Ezra Klein hosted The Last Word last night and he said that he didn’t understand what the Republicans were doing regarding the Sequester negotiations (or lack thereof). As he understands it, the Republicans have five basic policy goals in the budget discussion: (1) cut the deficit; (2) cut entitlement spending; (3) protect defense spending; (4) simplify the tax code; and (5) lower tax rates. He notes that by compromising with the White House, Republicans can attain the first four of these five goals. So why aren’t they?

As I wrote about yesterday and the day before, the Republicans don’t care about the deficit. So they don’t care about policy goal number one. They do care about entitlement cuts, but hurting the poor is not nearly as important as helping the rich. What’s more, they know that entitlement cuts are unpopular so they are very careful about them, even as they constantly call for entitlement “reform.” So policy goal number two is out. Sure, they don’t like defense spending cuts, but one must have one’s priorities. And they don’t care at all about simplifying the tax code. There goes policy goals three and four!

Of the five policy goals Klein lists, number five is by far the biggest priority. And that’s the one they don’t get with the White House deal. So on the surface, it looks like such a deal is an 80% winner (4 out of 5). But if you weight the list correctly, you see it is more like a 90% loser. For the umteenth time: funneling money to the rich trumps all else for Republicans.

This morning, Jonathan Chait notes in a longish article about the Republican plans for the Sequester, he notes something important about policy goal four, simplifying the tax code:

This is the same thing that happened with the individual mandate that became Obamacare. The Republicans were never actually for it. They were only offering it up as a policy they hated less than some of the good policies liberals were then pushing like a single-payer system. Once they didn’t have to worry about any liberal plan being enacted, they were against the conservative plan.

I can’t call what Ezra and Matt are doing false equivalence. But it is related. They are scratching their heads trying to figure out why Republicans are behaving so strangely. It doesn’t equate them to the Democrats, but it does give them more credit than they deserve. The reason why some of us see this more clearly is that we don’t listen to what Republicans claim; we watch what they do. And that is painfully clear.

Fifty years ago, Martin Luther King Jr stood on the steps of the Lincoln Memorial and said, “I have a dream, that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.” It is a wonderful sentence, wise in content and poetic in style. I thought of it watching Democracy Now! this morning, during which they showed extended clips of the 1970 documentary King: a Filmed Record. It is really good and I recommend you check it out. The problem is that I don’t necessarily agree with the sentiment.

In some ways, Chris Hayes was wrong in Twilight of the Elites; America is something of a meritocracy. People who have more than enough to eat do not steal bread. And that is what is going on with the vast majority of so called immorality: teen pregnancy, drug use, and even violent crime. These are problems that explode due to insecurity, want, and apathy.

I don’t mean to put down Dr. King at all. He was talking at a different time. Not being judged by the color of your skin is necessary but not sufficient. And it isn’t as though we have become a color blind society. People (especially conservatives) who wanted to say that Obama’s election meant that we had moved into a post-racial era have shown themselves to be silly indeed. If anything, Obama’s election showed just how much racism was festering below the surface throughout the country. Have you heard about the research showing that less than 4% of fashion models are nonwhite?

The last year was frustrating for me. I hated hearing that Obama was for equality of outcomes while Romney was for equality of opportunity. First, of course, this isn’t even true. Obama is very clearly in the “equality of opportunity” camp and Romney is in the “equality of inheritance” camp. But the bigger issue is that “equality of opportunity” is a lie. There simply isn’t any such thing when “equality of outcomes” is so skewed.

Any society that allows one working man to make 500 times what another working man makes is morally bankrupt. There is simply no justification for such a system. As is well established, the more money one makes the easier it becomes to make money. In other words, we have developed a system that is nonlinear and unbound. Bill Gates makes millions of dollars every day even though he no longer works. I know all of the arguments to justify this income. None do I find compelling. But there are obvious and very strong arguments against it. I think the best one is the conservative argument: incentives matters. How does Gates’ ridiculous wealth incentivize the economic system to work better? The answer is that it doesn’t. The truth is that Bill Gates’ wealth is no more deserved than Edmund Tylney’s.

What I propose to you is that the billions of dollars that Gates gives away to (often repellent) charities speaks very little of his moral character. A guy at a rescue mission who gives an unwanted fish stick to his neighbor demonstrates a higher moral character. I’m all for judging people on the content of their character, but we need to contextualize it. We need to remember that a poor person’s stealing a cookie is hardly a moral failing at all. And giving away part of your unearned fortune is mostly if not wholly vanity. Most of all, we need to create a society that is equal enough so that we can reasonably judge the content of our character. Martin Luther King Jr certainly understood that.

It is Sunday, so I’m going to explain the Sequester to you and why most of the media have it all wrong. Back in 2011 when it was invented, the idea was to make something so horrible that neither side would accept it. Instead they would replace it with some bipartisan plan that the two sides disliked less and everyone would sing “Kumbaya.” But even when pushed to come up with an “unthinkable” plan, the Republicans wouldn’t go for any revenue increases. So instead, half the Sequester became military cuts.

Skip ahead a year and a half. Now everyone is standing around asking, “Will the Republicans really be willing to cut their beloved military?” My reaction to these people is: where in the hell have you been for the last 30 years?! We could be talking about the complete elimination of the military. Hell, we could be talking about the very destruction of the United States and Republicans would be against taxing rich people even a dollar more—so long as those rich people would be able to keep their wealth after America was destroyed. The one overriding policy issue for Republicans is to keep the taxes of rich people down. (Note: when it came to the payroll take that is highly regressive, they had no problem letting it go back up.) The fact that major figures in the media think that isn’t the case is a big part of the problem with politics in America.

Ezra Klein was surprised last week that Republicans didn’t seem to understand what their own economists tell them: deductions are in fact government spending, just done in an unusual way. Think of the mortgage interest deduction. This allows homeowners to pay less in taxes. It would have exactly the same effect if instead the government had a program that gave homeowners money for owning a home. So what’s the big deal with eliminating tax loopholes? They too are just government spending in another form. Ezra Klein thinks the Republicans just don’t understand this.

It is possible that he’s right in part. Never underestimate just how stupid and ignorant Republicans are. But whether they know this or not is not the real issue. Republicans care above all else that rich people keep as much money as possible. Dean Baker calls this MPRP: Money in the Pockets of Rich People. This is what Republicans care about. Their problem with government spending is just that much of it goes to poor people.

So we are left with a media who keep pretending that the Republican Party is something other than it is. They can’t just bring themselves to believe that the Republicans really are what they always claim Democrats to be: class warriors. After all, you can kind of understand how someone would be a warrior for the poorer classes. But to be a warrior not just for the rich but the super rich? There must be some other explanation. But there really isn’t one.

Update (24 February 2013 6:55 pm)

Ezra Klein wrote another article about the Sequester, On the Sequester, the American People ‘Moved the Goalposts’. He concludes the article with a paragraph that is either stupid or hopelessly naive:

I don’t mean to be cynical, but who actually believes this kind of nonsense? Politicians in Washington do not do what the people want. They just assume that they can message their way to agreement with the electorate. Or that the electorate doesn’t even know what it wants or will forget it by the time of the next election. The American people were pretty clear this last election. And the fact that the American people are getting pretty much nothing they want is a good example of just how American politics really works.

Avik Roy was on Up with Chris Hayes this morning. He is something of a healthcare expert. But you know what “expert” means when it comes to a conservative: effective apologist for the status quo. And he didn’t miss a beat this morning. He started right out cherry picking studies that showed that having Medicaid is worse than having no insurance at all. Hooray for the broken US healthcare system!

The problem, of course, is that Roy and his corporate friends don’t think, “Medicaid has problems, let’s fix it!” Instead, it is, “Medicaid has problems, let’s kill it!” This is what you get when your guiding philosophy is that the poor are morally repellent and so should just be allowed to die. (This is not an unfair characterization. Conservatives want the poor to just go away. I’m not suggesting they want to do it with a gun. But depriving them of healthcare is the same result by different means.)

Last week, Roy and Douglas Holtz-Eakin wrote an article for Reuters, The Future of Free-Market Healthcare. In it, they claim that maybe Obamacare isn’t that bad, but they would like to make some changes that will make it truly a free-market system. And so they pull out Switzerland and claim that we should be more like them.

Aaron Carroll, the medical economist, took them to task on this argument. He concludes, “I don’t think the Swiss health care system is what they think it is.” They claim that the Swiss system is better because it doesn’t have a public option. This doesn’t make any sense at all. First: neither does the United States! How does that make it more free-market than America? What’s more, Carroll points out that they are wrong on this point even still. The Swiss system requires private insurance companies to provide non-profit healthcare products. In other words, “Yeah, they effectively have a public option.”

Next, the dynamic duo claims that the Obamacare state exchanges are terrible because they are “larded with costly mandates and regulations.” Carroll really doesn’t like this bit of chicanery:

There are other problems. But the biggest problem is their claim that the Swiss healthcare system is cheaper than the American system because—Wait for it!—it is more free-market. Carroll points out that it is cheaper because doctors get paid about half as much there. On top of this, Paul Krugman reported that they were greatly underestimating the cost of the Swiss System, because so much of it is private. This is an old conservative claim: if we don’t pay for Medicaid, we’ll save money! Well, the government will save money; the country will end up paying far more.

Look at the following graph from Krugman’s first article about the Holtz-Eakin and Roy paper:

Do you notice something interesting in this chart? The only country that pays more for their healthcare than Switzerland is the United States. And despite this, Switzerland is ranked 20th by the WHO.

Take a moment to think about this. Avik Roy and all his pals are committed to a particular form of healthcare. What works well is not the issue at all. The only thing that matters is to keep corporate profits high. Note: this isn’t about giving the rich the best healthcare available. They will always have that. Even in countries like France, the rich can still buy private insurance. The problem from the standpoint of Roy is that all his buddies might make a few dollars less. And when you compare a couple of dollars in profit for the already wealthy to tens of millions of people without access to healthcare, the conservative answer is clear: the dollars matter far more than the people. Because, hey, the people are poor; they don’t matter at all.

Update (23 February 2013 4:12 pm)

In the segment Now We Know, Avik Roy talks about how even with Obamacare there will be 30 million people without healthcare. As I recall, it is now looking like it will be a lot less than that. The main problem is that there will be a lot of people who will qualify for it, but won’t know it. Regardless, when Roy said that, he seemed like he was going to burst out laughing. I often have conversations with conservatives who now complain that Obamacare is (1) too complicated and (2) non-universal. This is rich! It is exactly because of conservatives like Avik Roy that we have a system that is (1) too complicated and (2) non-universal. At this point, it seems that Roy is thrilled that his dastardly plan worked so that he now has a “multi-year project for us to try to make the case to conservatives that actually universal coverage is the path to getting our fiscal ship in balance.” I’m sure it will be very lucrative at the same time it won’t provide a single person with healthcare.

Last night, while in bed, I watched The Last Word (it was that or more Rocky & Bullwinkle that I’ve already seen). And as I was falling asleep, Ari Melber said something that shook me. In general, I don’t follow Melber, but I have to admit, he’s a pretty smart guy. You can take that to mean that he is literally “a pretty smart guy” or you can be more cynical and just assume, “He must agree with Frank about something.” I like to think it is both.

Lawrence O’Donnell was talking about the Sequester and how the two sides couldn’t agree on anything. Melber noted that the Republicans are in a bit of a spot, because they aren’t really for what they claim to be. This is well put:

That’s exactly it. Democrats want to spend money on programs because they actually believe in those programs. But what do the Republicans believe in? Mostly nothing. And that begs an important question: why are they in politics. I think a lot of it is just that Republicans get into politics for reasons that Kathleen O’Brien Wilhelm exemplifies: they are angry about a lot of things that just aren’t so. But once they get to the point of being in office, they understand that all their anger was misplaced. What to do? Well, they are members of the Republican Party, so do whatever it is for. And that’s how we get the power for power’s sake Republicans. We sure aren’t getting them as a result of their love for Edmund Burke.

Someone (JMF, I think) recommended that I what Prometheus. But it was one of those “you should probably see this” rather than “this is really good” recommendations. It is a curious film. It is a prequel for Alien but uses a fanciful notion to get there. It uses the Prometheus myth, but in a surprisingly stupid and direct way. Basically, despite our sharing the vast majority of the DNA of most other mammals, we were created by some alien (who looks like he shares 99% of his DNA with chimps) who commits suicide. Or something.

The film deals with this by having one of the characters counter the nonsense of this argument by noting if the Engineers really did create us, it would mean that two centuries of science on natural selection was wrong. To this, the female scientist responds (as she does throughout the film), “I choose to believe.” Well then, I guess no more need be said! Perhaps a better ploy would have been to put up some blinking subtitles, “Begin suspension of disbelief now…”

The plot of the film also makes little sense. The robot infects the male doctor, which kills him and gets the female doctor pregnant with a creature, whose sole purpose is creating an alien in another host: you know, the double host procreation cycle that is so common in advanced organism. But that’s not even what’s confusing. Why did the robot infect the male doctor? We don’t know. He just did it because… I know! Robots in Ridley Scott films are evil while robots in James Cameron films are good. Or something.

There is one moment in the film when the writers seem to have awaken from their somnolent composing to realize that the whole film didn’t make sense. The robot asks the male scientist why he wants to meet his maker. It highlights the fact that the robot lives among his makers and he has no special insights because of it. The big issue here is that ontologically this quest is childish. Surly after meeting their maker the humans would then want to go on to meet their maker’s maker.

The film is little more than a muddle trying to make itself to an ending where the crew of the original Alien can find a crashed spaceship infested with alien eggs. It also makes numerous awkward allusions to the Alien film series. But it does manage to engage the viewer throughout. Scott is nothing if not a good painter of scenes. Unfortunately, the script doesn’t seem to even try to make sense the way the other films in the series did. (Note: I haven’t seen Alien vs. Predator and its sequel.)

Afterword

If you ever have to kill me, I would prefer a bullet in the head. Please do not burn me alive as they seem to like to do in Alien films. You could also cut off my head. I understand that setting people on fire makes for great images, but can’t we at least agree that no one is going to beg to be burned to death—especially when other options are available?

This is from an article this morning in Politico: “Erskine Bowles and Alan Simpson are back at it, pushing the White House and congressional Republicans to get off the partisan sidelines and strike a deal that can keep government debt in check.” This is why we have major problems in this country. This is why basic economic facts don’t matter. This is why people who have been wrong again and again and again are still treated as thoughtful policy thinkers.

There are so many things wrong with this. Perhaps most important, this is editorial masquerading as journalism. The writers don’t know what Bowles and Simpson are up to; they only know what these two men say they are up to. As I’ve reported in the past, Simpson and Bowles are not honest brokers when it comes to the deficit. Their first task is to reduce the top marginal tax rate. There second task is to gut entitlement programs. After that, if the deficit gets reduced, great! But that isn’t their main concern.

Also: who says government debt is not in check? And how exactly is the White House on “the partisan sidelines”? Obama has been only too willing to make these deals. But this is the same old false equivalence that exacts no price from Republicans for being extreme and obstructionist even while giving Democrats no credit for compromising.

Matt Yglesias points this out the Simpson-Bowles bait and switchin a surprisingly funny article today, Alan Simpson and Erskine Bowles Unveil “New” “Deficit Reduction” Plan. He notes that Obama has already taken their recommendations for a $4 trillion cut to the deficit over 10 years—$2.5 trillion of that having already been enacted. That leaves $1.5 trillion of deficit reduction to go. But suddenly, these gentlemen are back saying we must reduce the deficit by $2.4 trillion:

I can tell you why it has: the big media figures are all economic conservatives. They all love the idea of balancing the budget on the backs of the poor while giving themselves a tax break. What could be better?

In a later article, Yglesias points out that most of the increase in the deficit reduction demanded by the new Simpson-Bowles plan is due to it just being later. But this doesn’t really fly when you consider that much of the savings that Obama has made in the budget has been in effect for almost two years now. Of course, it doesn’t really matter. The fact remains that their primary goals have nothing whatsoever to do with the budget; they just think that the government should spend its money differently: less for the poor and more for the super rich. And with a big assist from the major media, they will eventually get everything they desire and more.

This article title refers to Night of the Simpson-Bowles.

Update (19 February 2013 1:26 pm)

Ezra Klein shows that there is a big change in the new plan: they are calling for much less revenue compared to spending cuts. In other words, they are getting closer and closer to the Republican Plan of no taxes: put it all on the backs of the poor! But don’t worry Simpson-Bowles are Very Serious!

Update (19 February 2013 7:43 pm)

It’s amazing how many people have written about this subject. I thought about doing a round up, but there is just too much. It is all of two kinds. Much of it is the usual Very Serious People approach that claims that we should break out the champagne just to celebrate that we have great thinkers like Simpson and Bowles to show us the way. Obviously, you don’t need to read any of that nonsense. Of the coverage that is worth reading, it is all pretty much the same as I’ve reported here. However, Timothy Noah wrote a piece that I think really gets to the heart of the deception that is the new Simpson-Bowles plan, Simpson-Bowles Is Back—With More Bad Ideas:

And speaking of George Washington dying from blood letting: the sea lamprey. The photo on the left is apparently of a large sea lamprey from the waters of New Jersey. These things are parasites that latch onto fish and literally bleed them to death—just like the best physicians of the 18th century! According to GrindTV, this picture is either shot in such a way to make the blood sucking vermin look big or it is photoshopped. They can grow up to three feet in length, but this one looks like it is twice that length. (Then again, my friend Will tells me that New Jersey has more Superfund sites than any other state. So who knows?)

Depending upon your background, this parasitic bastard either looks like the creature in the Alien movies or a monster from an H. P. Lovecraft story. As for me, it makes me think of our first president. Of course Cthulhu always makes me think of him.