This is totally not surprising. Two researchers at the University of Michigan have looked at what the Fed does regarding interest rates when a Republican is the incumbent versus when a Democrat is. As we all know, if the economy is doing better coming into an election, the President is far more likely to be reelected. Also his party is more likely to win an open seat. The Fed can affect this by raising rates (thus slowing the economy) or lowering rates (thus quickening the economy).

It turns out that the Fed is not as likely to do this when it will help Democrats. This shouldn’t be surprising. Our current Fed Chairman is a Republican. So was the the one before that. It tends to be a post filled by people from the finance industry and they don’t tend to be liberal.

William Roberts Clark and Vincent Arel-Bundock say in the abstract of their paper soon to appear in Economics and Politics, Independent But Not Indifferent: Partisan Bias in Monitory Policy at the Fed (PDF):

This should be an outrage. It should be on the front page of all the newspapers. There should be Congressional hearings. People should be marching in the streets. But instead, this paper will cause not a ripple. All that will be heard is the sound of silence.

Afterword

Note that many people—most notably Paul Krugman—have been complaining that Bernanke has not done enough to help the economy and that he has not done what he had for years written should be done in this situation. Occasionally, people would gently suggest that it might be partisan—he might be in the tank for Romney. But no one took that seriously. Only a kook could think that the Fed Chairman would act in such a partisan manner! Maybe the kooks were the ones who thought Ben and Alan could check their Republican sympathies while doing their “non-partisan” jobs.

Thanks to Binyamin Appelbaum for alerting me to this.

Update (25 October 2012 7:41 pm)

Matt Yglesias sends us to the cream of Jesse Eisenger’s article about Freddie Mac. It seems it isn’t just Republicans at the Fed who want to keep the economy weak to help their partisan friends get elected:

Look: I know I’m a partisan (although one who calls out the President when he’s wrong). But I truly don’t think that Democrats would do this. It isn’t our style. The repugnant push to destroy the economy (and countless lives as a result) in the name of political advantage is the Republican and only the Republicans. (I’m talking about normal people here and not some pathological case.) This disgusts me.

Update (26 October 2012 8:39 pm)

William Roberts Clark provides a good overview of his paper over at The Monkey Cage. Check it out.

You may remember back many months ago, Greg Smith wrote a high profile OpEd in the New York Times as he stepped down as a VP at Goldman Sachs. This last weekend, he was on 60 Minutes in a plug for this new book, Why I Left Goldman Sachs. Matt Yglesias, for one, doesn’t really care about all that. “But the ferocious anti-Smith push from Goldman Sachs PR and Smith’s critics in the media have me interested again!” he writes.

I’m glad to hear this, because I think what Smith has to say is important. And I especially thought that while I watched the 60 Minutes interview. The way it was cut together tended to minimize his arguments. The segment contradicted him by using Frank Partnoy, a former derivatives trader turned (God help us!) finance professor. His refrain was, “Who cares? Everybody does it!”

What everyone does is screw over their clients. Companies like Goldman Sachs are supposed to help their clients make money. Instead, they just use them to enrich themselves. And the more green the client, the better Goldman Sachs likes it.

This is basic stuff. It is like when you were a kid. Everyone’s heard it from their moms, “If everyone jumped off a cliff, would you?” Well, would you?! This is something we are supposed to learn at 5 or 6. Just because everyone else is doing it doesn’t make it right. But maybe we’re all supposed to know that people on Wall Street don’t have the ethics of a kindergartner.

Matt Yglesias explains this in the most forceful terms:

Amen brother!

Update (23 October 4:47 pm)

Hamilton Nolan has an excellent article at Gawker, In Defense of Being Outraged by Things that Everyone Already Knows:

Proposition 30 in California would levy a temporary quarter percentage point increase in the sales tax and a 1 to 3 percentage point increase in the top marginal tax rates (on money made above $250,000 per year). Initially, I was concerned about this proposition, because of the sales tax increase. These taxes are highly regressive and I didn’t want to see those who have suffered the most during this depression be further taxed while those who are doing better than ever are barely touched.

After doing a “back of the envelope” calculation, I am convinced that Proposition 30 is a good idea. Even taking into account the huge and unjust income equality in the state, this is a progressive tax. The amount of money brought in by the sales tax is very small—it was most likely added to argue against claims that the proposition is some kind of class warfare.

Yesterday, I received a mailer from the “Small Business Action Committee.” Calitics has the dirt on this group. It’s leadership team is made up of one guy: Joel Fox. He is the former head of the nutjob group Howard Jarvis Taxpayers Association, the group that brought us Proposition 13 that is a large part of California’s perpetual budget problems.

Other than this, SBAC is just a generic conservative front group formed to take money from wealthy fucktards and use it to subvert the cause of democracy. According to the site, one of its big donors is Charles Munger Jr, who’s given almost $20 million dollars to the group.

Their arguments are exactly the same as the ones in the voter’s manual: this money won’t go to education and even if it did, the government is too damned big! Last night I spoke to a supporter of Proposition 30. I asked why he was against it. He didn’t seem to care at all about giving any lip service to education. It was just that the government was wasting all the money it gets. So I pressed on. What is it the government is spending money on that is wasteful? I got no answer. So I suggested a few things. Roads? Are we spending too much on upkeep of roads? Are firefighters too well paid? Again there was no answer. But this is not a surprise. People like this never have an answer because there is no answer. In general, the government does a good job at what it is assigned.

(This is the same person who bristles every time I suggest we increase the number of elected representatives in order to have a more representative democracy. But no. We can’t have that! That would cost money! How much? Basically nothing. About as much as we spend on NPR. But that doesn’t matter. Waste! Socialism! My hard earned Social Security check!)

The argument against Proposition 30 in the voter’s manual is written by Jon Coupal—the current head of the Howard Jarvis Taxpayer’ Association. Now he has an idea about government waste. And that idea is (Of course!) public employee pensions. But that isn’t actual waste. That is what people in the legal profession call a “contract.” It is the same thing that conservatives like Coupal used to justify all the bank bailout money being used for executive bonuses. “Those were contractually obligated!” the conservative chorus shouted. But when it comes to teachers and other public sector workers, contracts don’t matter. Contracts are not for the little people, silly!

Afterword

Proposition 30 is not the main issue of the Small Business Action Committee. Their focus is on Proposition 32. This is the proposition that would basically stop all paid political speech except for that by dark money groups. It is a vile proposal. The fact that the SBAC is pushing it is about all you need to know.

The polls indicate that both Propositions 30 and 32 are really close. And there are a lot of undecided voters, so each could go either way. It is important to vote Yes on 30 and No on 32. Also: No on 38, because it conflicts with 30 and is a regressive tax.

See you at the polls!

Jonathan Cohn of The New Republic has a very evenhanded column about Romney’s position on the GM rescue, What Romney Wants You (and Ohio) to Forget About the GM Rescue. The title makes the article sound a lot more critical than it is. Let me briefly lay out Cohn’s argument.

Romney’s New York Times OpEd was far more nuanced than its title “Let Detroit Go Bankrupt” would indicate. He was not calling for the liquidation of GM and Chrysler. What’s more, it isn’t clear whether he was for or against Obama’s decision to rescue the auto makers. During this period, Romney indicated elsewhere that he did support it.

And then came the primary season, and Romney—Quelle surprise!—changed his position. This is from a CNBC debate:

And then he changed his position back during the Michigan primary. And now we hear from him all the time, “Of course I supported the auto bailout!” It’s easy to be on the right side of history when you simply change your opinion to whatever history says.

This is not an isolated incident, of course. Consider Obama’s position on Osama bin Laden. When Obama said that he would go into Pakistan to get him, everyone attacked him. This included Mitt Romney. But after Obama did exactly what he said he would, Mitt Romney was totally on board. “Even Jimmy Carter would have made that call.”

I don’t mind inconsistency; I’m one of its greatest practitioners. But there is a real problem with Mitt Romney’s inconsistencies. It doesn’t come from the shifting tides of his moods and facts. Instead, it comes from his decision about whatever is expedient. But even this I wouldn’t mind if he hadn’t surrounded himself with all Bush’s people on foreign and domestic affairs. There is no doubt that if Romney is elected President, there will be a group of neocons and “free” marketeers who will play him like a fiddle. And we don’t need another Cheney administration.

Update (23 October 2012 9:55 pm)

Here is a more negative take on the Romney claim by the exceptional Martin Bashir:

On today’s Up With Chris Hayes, they presented the following graph of proposed military spending under Obama and Romney:

Yet another reason to vote for Obama. Not that it will be enough. Not nearly enough.

The terrible thing about this is that Romney is right: it is perfectly legal for employers to “inform” their employees in this way.

Check out my article on Political Harassment in the Workplace.

The Lester & Charlie Review send us to the Huffington Post and a story about the results of home schooling, New Zealand Teen Proclaims ‘Ducks Could Take Over The World’ If Gay Marriage Is Approved. But before I get to the letter, I want to tell you why it makes me so happy.

New Zealand! It’s not just us: there are ignorant and evil people in New Zealand too! In fact, I wouldn’t be a bit surprised if such people exist in Canada. Now all those idiot conservatives can stop chanting, “We’re number one!” and start chanting, “We’re not the only one!”

Originally, Gawker grabbed the article from New Zealand’s Northern Outlook (but good luck trying to find the original article there). I have taken the time to transcribe this letter because I think it is important to demonstrate the way that conservative Christians think:

My first thought was (and almost always is) that this must be a hoax. But no. There is an article on 17 October Northern Outlook about all the attention the letter is getting. (Sorry, there is no direct link.) The reporter spoke to Mrs. Harrison, Jasmin’s mother, who “said her daughter was well spoken, but not outspoken, and was a committed Christian.”

PZ Myers over at Science Blog gives this letter all it deserves in terms of science. And history. And theology. It is this last part that I find most interesting. What I find troubling about conservatism generally, is how simplistic its world view is. By its thoughts, life is some kind of race to the top. There is a pinnacle that we reach. For economic conservatives, an unregulated capitalism is perfect. They can’t admit that things like inheritance and property rights are necessarily unnatural and unfair. (Note that what these people really pine for is a feudal system.)

For theological conservatives, the issue is even worse. For Christians, this means that the peak of thinking in this area occurred 2000 years ago. And this is what we get from young Jasmin in the form of an evolutionary “ladder.” By this thinking, the whole point of evolution was to create us. And going forward, evolution will improve us. If we don’t watch out and stop having butt sex, God will get mad and make the ducks the chosen species. Then, the whole purpose of the universe will be to improve the duck design. God won’t love us any more, and only good ducks will go to heaven.

Now cracks a noble heart. Good night sweet duck:
And flights of angels sing thee to thy rest!

Fred Barnes used to be a centrist on The McLaughlin Group. That’s what made that show so vile: Barnes is a conservative extremist. The McLaughlin Group was the first time I noticed that the news could distort without lying. Barnes works for that bastion of moderation The Weekly Standard. And today he is proclaiming that Obama’s performance last night in the debate was Not a Game Changer.

I suppose this is enough to conclude that Obama did really well. If the executive editor of The Weekly Standard says that Obama did as well as Romney, you know Obama must have been really good. But there is more to the column than that. And it is despicable.

Barnes admits that Obama had his moments, but apparently, he was watching a different debate. Every time Obama made a good point, Barnes claims, Romney was able to counter it. I will allow that this occasionally happened, but it was the exception, not the rule. What’s more, according to Barnes, Romney had his own moments. Example? After Obama listed his accomplishments, Romney listed Obama’s failures. And what were those? Obama said he would get unemployment below 5.4%—before the economic crash. He said he would reform Medicare—which he has done. He said he would do immigration reform—which Republicans blocked. Only in the right wing media echo chamber are these standard campaign canards considered brilliant. I’m sure among the Fox News faithful, these lines kill. But those people already hate the President.

The bulk of Barnes’ column is a kind of “It depends on what the meaning of the word ‘is’ is” argument about the President’s Benghazi attack statement. Barnes—and just about every other conservative commentator—is trying to make the argument that Obama, “spoke about a generic terrorist attack but didn’t specifically attach that label to what had occurred in Benghazi.” Except that he said that in relation to the Benghazi attack. This is madness.

Barnes finishes up by noting that the debate was very agressive and that it didn’t hurt either candidate. Perhaps. I thought that Romney came off as small and unserious. But I know that I’m biased, although surely not as much so as Barnes. Time will tell. My guess is that Obama helped himself by a small but significant amount—perhaps one percentage point. I’m looking forward to the next couple of days.

Afterword

Barnes also claims, “Vice President Joe Biden made a boorish spectacle of himself.” And, “That didn’t change the campaign equation.” Except, you know, it did:

Ezra Klein backs me up on Romney’s rebuttal to Obama’s accomplishments:

Remember Osama bin Laden’s driver, Salim Hamdan? The Bush administration used to love talking about him. He was an example of an important catch in the War on Terror. They were not being ironic. At the time, I remember thinking that we were doing a pretty fucking bad job if the best thing we could claim was that we had captured bin Laden’s driver.

AlterNet noted that putting Hamdan on trial was like trying Hitler’s chauffeur at the Nuremberg Trials because we didn’t have Hitler. Note that Hitler’s chauffeur was not, in fact, tried as a war criminal. This whole Salim Hamdan episode is both wrong and pathetic—it has made the United States look silly or worse.

It seems that Hamdan is finally getting some justice. He had already been exonerated for many trumped up charges like conspiracy in the 911 attacks. But one charge did stick: material support for terrorism. This is a pretty broad understanding of this charge. After all, the government could convict any taxi driver bin Laden hired over the last couple of decades. But okay: it is what it is.

The problem is that the United States only made this new law after Hamdan supposedly violated it. So an appeals court comprised of 3 Bush appointees threw out the conviction.

Of course, Salim Hamdan was released in 2009, after serving the time for his crime. But it’s still nice to know that some modicum of justice is still possible in the United States.

Afterword

This from TopNews.in:

Take a job; go to prison. It’s the law!

Matt Yglesias reports this morning on an analysis by Glenn Kessler about Romney’s claim that in the next four years, his economic plan will create 12 million jobs. I’ve never thought much about it, because in January, the Congressional Budget Office (CBO) estimated that if we just continue on with current policies, 11 million jobs would be created in the next four years. They have since revised this number down to a bit below 10 million jobs, but it’s the same thing. The take away is that Romney hasn’t been promising much and you can bet that if he were running for reelection in 2016 having created 10 million jobs, he would talk of nothing else.

Kessler notes that Mitt Romney’s 12 million figure comes from three areas:

1. 7 Million from tax cuts;
2. 3 million from “Drill Baby Drill”;
3. 2 million from standing up to China.

There are problems with all of these numbers, but broadly speaking they fall into two categories. First, these job creation numbers are based on longer time lines, like 10 years for tax cut number. Second, these studies aren’t specific to Romney’s policies. In particular, the “energy” number is based upon current policy, not anything new that Romney is proposing.

The China claim is ridiculous on its face. Conservatives always seem to think that China is some naughty school boy that can be intimidated into doing what is in our best interest. It doesn’t work that way. Besides, Romney is not even planning to go after the Chinese for what is really hurting us: undervaluing their currency. (Conservatives hate the idea of a weak dollar, so they rarely talk about this fact which is the main cause of our crumbling manufacturing base.) Romney plans to create 2 million jobs by getting serious about Chinese patent and copyright protections. So the 2 million jobs number is like those record company claims that they are losing $20 billion per year because your daughter made an illegal copy of a Justin Bieber song.

Romney isn’t providing any ideas that are going to improve the economy. In fact, his tax cut proposals will probably not create nearly as many jobs because they will be focused at the top of the income scale (You do know that, right?) where the money will sit around with all the other money that currently isn’t being usefully employed.

Update (16 October 2012 3:14 pm)

Paul Krugman discusses this issue. He ends with an obvious, but important observation:

Update (16 October 2012 3:23 pm)

Everybody’s covering this story. Perhaps they think it’s important? Here’s Ezra Klein: