Here’s the only primer you need on the debt ceiling

“So this debt ceiling thing is routine or the end of the world?”

“Both.”

From season six of The West Wing, which, if you’re like most of my friends, you probably didn’t watch because you didn’t watch anything after the fourth season. Sure, the sixth season wasn’t as bad as the fifth, but this is probably the best exchange from the season. Also, if you didn’t watch the seventh, go ahead and do that. It was pretty good.

We’re not all, nor should we be, entrepreneurs

Sir Charles blasts those who extol some kind of “innovation” economy or the “entrepreneur” economy  or whatever it’s called, as some kind of cure for our shitty situation:

This seems really obvious, but sometimes the obvious needs to be said.  The vast majority of people in this country are not going to be working in Silicon Valley or like enterprises.  They are going to continue doing the jobs that have been staples of the economy for a long time — nurses, teachers, health care aids, building tradesman, truck drivers, firefighters, cops, sanitation workers, hair dressers, grocery store clerks, etc.  These people don’t need to differentiate themselves — they need to be paid a fucking living wage by a society that credits them with some human worth.  The notion that people want to — or will be able to — continuously reinvent themselves as workers is just nonsensical.  It devalues the concept of experience, it belittles the value of stability in people’s lives, and it is, ultimately, a way to glamorize what in fact is an ugly world view of perpetual worker vulnerability and lack of value in a world in which free floating capital continuously undermines any hope that the vast majority will experience anything like a decent and secure life.

Sure, things get better when people invent things. Companies that innovate grow and hire. But, at the end of the day, we can’t depend on finding the next big thing, or inventing, or what have you, to get people to any kind of decent standard of living. That’s a focus for the upper one percent, the rest of the people have to find jobs. Maybe we don’t have to stop helping people start businesses or apply for patents or discover medical breakthroughs, but we really have to admit to ourselves that those things will only be done by a tiny sliver of the population, and successfully but an even smaller portion. The vitality of our economy is based on how well everybody else does, and it’s time to start helping them.

Of course, instead we’re gutting the government and any support it may provide to the middle and lower classes in order to protect the low tax rates the top among us get.

Friday Funny: The smart-ass hare and the grumpy old tortoise

You’ve see the honey badger. Now, here’s the story of the smart-ass hare and the grumpy old tortoise.

New York Times Columnist Line of the Day

Eff it, let’s try this again.

Today’s is from Paul “The Little Professor” Krugman, who in his column today “The Lesser Depression,” writes:

If either of the current debt negotiations fails, we could be about to replay 1931, the global banking collapse that made the Great Depression great. But, if the negotiations succeed, we will be set to replay the great mistake of 1937: the premature turn to fiscal contraction that derailed economic recovery and ensured that the Depression would last until World War II finally provided the boost the economy needed.

Yay!

Senator Al Franken busts Focus on the Family witness for outright lying

“It doesn’t actually say what you say it says,” said Senator Franken to Focus on the Family’s Tom Minnery on Minnery’s comments that an HHS study showed that children are better off with opposite-sex parents. Turns out, it didn’t say that at all.

Politico:

Damn Dirty Apes

I recently discovered that there’s a Rise of the Planet of the Apes remake coming out. It’s an odd one of the Planet Apes movies to remake—especially given that Planet of the Apes was remade (somewhat) recently (okay, it was 2001, but still), and the remake completely changed the premise of the series, and Rise is all about that premise. So, we’ll just call the Tim Burton version non-canon and move on?

Anyways, enjoy the beats and remixed video above.

I’m glad this guy isn’t Commerce Secretary

Former New Hampshire Senator Judd Greg:

“My gut tells me that we’ll need a weekend of drama — maybe a weekend of the government not paying its bills — politicians need drama to make something happen. As soon as social security checks don’t go out, the politics will change. I suspect it’ll take artificial drama to get closure past the House.”

Democrats could learn a thing or two from the gays

I just want to echo LGM’s Erik Loomis here:

Also, it’d be nice if Democrats realized that the strategies behind the gay rights movement–pushing for a program with refusal to compromise long-term goals, grassroots organization, building support among the young–would probably work for other parts of the Democratic agenda.

TARP and the debt ceiling

Nichole Gelinas does a fine job drawing the line from the TARP, which (other than a black Muslin soshulist commie pinko ascending to the presidency) drew a lot of support to the tea party, and the current intransigence of the tea party-aligned Republicans with regard to the debt ceiling debate:

Tea Party freshmen and their supporters hold this establishment in contempt. Implicitly invoking TARP, as Pelosi did when she mentioned a stock-market crash, won’t scare them; it will only embolden them. It would be one thing if Tea Party adherents merely believed that a default wouldn’t spell disaster; in that event, the GOP freshmen would figure out the truth soon enough. The problem is that many Tea Partiers consider TARP such a terrible idea that they would have chosen to brave a worse financial disaster instead. Today, they think that a market cataclysm would be better than another “sellout” vote. House veteran and GOP presidential candidate Michele Bachmann set the pace in last month’s GOP presidential debate: “I fought behind closed doors against my own party on TARP. It was a wrong vote then. It’s continued to be a wrong vote since then.” As the defeat of Utah senator Bob Bennett in 2010 showed, party voters are unforgiving of Republicans who supported TARP. A debt-hike vote will follow Republican candidates in their primaries next year.

Now, don’t tell anybody that the TARP made the government money, or that it lowered the debt (by making money), or that a massive financial cataclysm would do more to raise the debt than anything.

Hump-Day Song of the Week: Bowl of Oranges by Bright Eyes

Just because fancy shit is cheap doesn’t mean being poor is awesome

Yglesias really nails it here:

Over the past 50 years, televisions have gotten a lot cheaper and college has gotten a lot more expensive. Consequently, even a low income person can reliably obtain a level of television-based entertainment that would blow the mind of a millionaire from 1961. At the same time, if you’re looking to live in a safe neighborhood with good public schools in a metropolitan area with decent job opportunities you’re going to find that this is quite expensive. Health care has become incredibly expensive. The federal poverty line for a family of three is $18,530 a year. I wonder how many Heritage Foundation policy analysts are deciding they want to cut back and work part time because it’d be super easy to raise two kids in DC on less than $20k in salary? Perhaps just an outfit full of workaholics.

Not to mention the Heritage reports undercut many conservatives’ own premises. Conservatives can’t possibly fathom how a poor person would buy a flat-screen and Air Jordans and still be poor, so they say poor people are poor because they make bad financial decisions. Yet, they basically say that blingy shit is really cheap, so being poor is still kind of awesome (as long as you’re in America)!

I’ll just point out: socking away the $5 a week you could possibly squeeze out of your spending into a savings account is not going to pay for college for your kid or access to a better school or any kind of worthwhile investment. But, it will buy a television, which is a way cheaper form of entertainment than going out to fancy bars and movies.

Male Organs and Economic Growth

I somehow have absolutely nothing to say about this (pdf):

Male Organ and Economic Growth: Does Size Matter?

Abstract

This paper explores the link between economic development and penile length between 1960 and 1985. It estimates an augmented Solow model utilizing the Mankiw-Romer-Weil 121 country dataset. The size of male organ is found to have an inverse U-shaped relationship with the level of GDP in 1985. It can alone explain over 15% of the variation in GDP. The GDP maximizing size is around 13.5 centimetres, and a collapse in economic development is identified as the size of male organ exceeds 16 centimetres. Economic growth between 1960 and 1985 is negatively associated with the size of male organ, and it alone explains 20% of the variation in GDP growth. With due reservations it is also found to be more important determinant of GDP growth than country’s political regime type. Controlling for male organ slows convergence and mitigates the negative effect of population growth on economic development slightly. Although all evidence is suggestive at this stage, the `male organ hypothesis’ put forward here is robust to exhaustive set of controls and rests on surprisingly strong correlations.

h/t Kedrosky.

Spectacular Views

The band Rilo Kiley has split up, which is kind of a bummer.  As it happens, their song “Spectacular Views” kept coming into my head yesterday while hiking, before I’d heard the news of the official band breakup.  So, as a goodbye and thank-you to a band I enjoyed greatly, here they are playing the song back in 2005.

Beauty as well as Bread

“Everybody needs beauty as well as bread, places to play in and pray in, where nature may heal and give strength to body and soul.” –John Muir

Jack B. and I went for a hike yesterday to the top of Mt. Washburn, in Yellowstone National Park.  It was short but strenuous, up-up-up for three miles and then back down the way we came, after stopping a while to appreciate the panoramic view from the top: several mountain ranges, Yellowstone lake, canyon, valleys and forests.  In addition to the natural beauty throughout the hike, we also happened upon a group of bighorn sheep, ewes and their babies, who wandered right past us and then went frolicking across the snow.

It was quite the beautiful day.  Jeez, I love national parks.

Talking Dustbowl Blues

Today would have been Woodie Guthrie’s 99th birthday. Happy birthday, Woodie; we miss you.

Here’s some events for next year, which will mark his centennial.

Failure to raise debt ceiling would be catastrophic

Rep. Michele Bachmann certainly believes we don’t have to raise the debt ceiling:

“And don’t let them scare you by telling you that the country’s going to fall apart and that we’re going to default on our debt. The fact is we aren’t, because revenue continues to come into Washington, D.C.”

….

Bachmann told a crowd of more than 100 supporters gathered in her Urbandale office’s parking lot that she has never voted to raise the debt ceiling during her time in Congress and won’t this time around, either.

“It’s time for tough love,” she said, to applause.

So, what happens if we fail to raise it? From The Street Light:

[F]ederal spending would instantly have to be reduced by about $100bn per month. By the end of 2011 federal spending would be about $500 bn lower for the year than it would have been otherwise.

I’ve made this point before, but for numbers that large, anyone who wants to pretend to have some understanding about the economy has to think about macroeconomic effects. In particular, spending cuts of that sze would reduce the US’s 2011 GDP by multiple percentage points. The Q3 and Q4 GDP growth rates wold probably be on the order of between -5% and -10%. Recall that during the recession of 2008-09, GDP only fell by about 4% in total. The unemployment rate would be likely to rise by several percentage points from its current level of 9.2%, to perhaps 15% or more of the US population. Recall that at its worst, the unemployment rate during the Great Recession only reached 10%.

That’s…terrifying. Okay, that’s just a blog (albeit one written by a legitimate economist). Maybe bankers are a little more…reserved?

“Asking what the U.S. economy might look like after a possible U.S. Treasury default is akin to asking ‘what will you do after you commit suicide,’ ” wrote Steven Wieting, Managing Director in the Economic and Market Analysis team of Citigroup, in a July 11, 2011 report.

Shit. And, it looks like the talks are going…well.

Hump-Day Song of the Week: Blitzkrieg Bop by The Ramones

Lousy Columns and Investments

Robert Bridges at the Wall Street Journal:

At the risk of heaping more misery on the struggling residential property market, an analysis of home-price and ownership data for the last 30 years in California—the Golden State with notoriously golden property prices—indicates that the average single family house has never been a particularly stellar investment. In a society increasingly concerned with providing for retirement security and housing affordability, this finding has large implications. It means that we have put excessive emphasis on owner-occupied housing for social objectives, mistakenly relied on homebuilding for economic stimulus, and fostered misconceptions about homeownership and financial independence. We’ve diverted capital from more productive investments and misallocated scarce public resources.

Between 1980 and 2010, the value of a median-price, single-family house in California rose by an average of 3.6% per year—to $296,820 from $99,550, according to data from the California Association of Realtors, Freddie Mac and the U.S. Census. Even if that house was sold at the most recent market peak in 2007, the average annual price growth was just 6.61%. So a dollar used to purchase a median-price, single-family California home in 1980 would have grown to $5.63 in 2007, and to $2.98 in 2010. The same dollar invested in the Dow Jones Industrial Index would have been worth $14.41 in 2007, and $11.49 in 2010.

Bridges forgets a little thing that houses are important for:

You get to live in them.

You can’t live in the Dow Jones Industry Index (trust me, I tried). You wouldn’t buy a house and leave it empty for ten years. You wouldn’t buy a factory, shut it down for a decade, try and sell it after that decade is out, and expect to profit wildly (gold factory?).

So often, these people forget that the actual utility of a thing is more important than its final return. Buying a house means you’re not paying rent. Buying a factory gives you the ability to make things to sell. Buying stock is the weird thing that lets you make money by…having money to buy things.

Now, houses shouldn’t necessarily be investments—they should be places to live. And, if you happen to make something off selling it, well, good. Because you want the value of your stuff to appreciate. It helps make up a little for all that shit you buy that dives in value immediately. And, you may even be better off renting and using the extra for savings, stocks, starting your own business. Hell, you probably are, but don’t tell the “ownership society” that.

Really, I probably agree with Bridges here, but I hate it when the people I agree with make no sense even more than the people I don’t.

Where’s Mittens?

The News of the World Wall Street Journal wants to know: Where in the debt ceiling debate is President-to-Be Willard Romney?

Republican presidential candidates have used the debate over raising the nation’s borrowing limit to score points with conservative voters and insert their views into Washington’s thorniest political dispute.

But Mitt Romney, the Republican front-runner, has taken a subtler tack, avoiding the issue of the debt ceiling as he presses a more general assault on President Barack Obama’s economic record. That has attracted the attention of his GOP challengers, who have begun to accuse him of ducking the most vital issue of the campaign so far.

Um, well, keeping the fuck out of all this is smart—if you expect that you may be the president some day. Congress voted 19 times during the Bush presidency to raise the debt ceiling, by a total of $4T.  If you think you may actually have to be president someday, you know full well that it’s going to come with the need to raise the debt ceiling yourself. So, it’s smart to not have to be on one side or the other before that happens.

Space Oddity

Atlantis is currently out flying its final mission in space, and when it lands, it will signal the end of the U.S. shuttle program and an end to its 30 years of space exploration and experimentation.

Incredible to think that David Bowie’s single Space Oddity was released on this day in 1969, just five days before the launch of Apollo 11—the mission that first put a person on the moon.