DeLong vs Tea Party

Yesterday economist Brad DeLong put up an account of a conversation he had last week with a group of Tea Party supporters in California about the economic crisis facing American and how it could be fixed. Here’s a hefty excerpt:

But they question is what to do now with the economy. The idea is not to go to socialism—not to nationalize large chunks of the economy and have everybody work for the government—but to conduct strategic interventions in financial markets. Relieve the excess demand for safe high-quality assets and you remove the pressure on people to spend less than they earn as they try to build up their stocks of safe assets, and you get a virtuous circle of strong recovery.

So, I said, the right thing to do is the Bagehot rule: lend freely at a penalty rate. The government should throw huge amounts of money at the financial markets and in the process take a large chunk of the upside in equities and options.

SOCIALISM, they said. We don’t want SOCIALISM.

But it’s not socialism, I said. It’s an attempt to avoid socialism—it’s an attempt to conduct a strategic intervention into the market economy so that it can rebalance itself.

SOCIALISM, they said.

Well, I said, how about lending freely to the financial sector but forget Bagehot’s “penalty rate” stuff?

BAILOUT, they said. BAILOUT OF CORRUPT FINANCIERS WITH WASHINGTON CONNECTIONS, they said. WE LIKE THAT EVEN LESS.

Well, I said, how about pushing off taxes into the future, bringing forward infrastructure spending we know that we will want to do, and financing it by issuing more government debt? The spending should put some people to work, and the extra government bonds we print up will increase the supply of safe assets, decrease the excess demand, and so remove some of the downward pressure that is inducing people to spend less than they earn/

DEFICIT, they said. DEFICIT BAD. MUST REDUCE THE DEFICIT. GOVERNMENT MUST LIVE WITHIN ITS MEANS.

But, I said, the U.S. government now can borrow at unbelievable terms. If you could borrow at such terms, you would bust out the top of your house and add a second story immediately.

GOVERNMENT MUST LIVE WITHIN ITS MEANS.

OK, I said. How about having the federal government aid the states. We want to keep our police and our fire and our road maintenance and our schools running at their efficient levels, don’t we? It’s stupid to cut back on the long-term foundations of our economy and its growth because of recession, isn’t it. How about a large program of federal aid to the states so that teachers, sewer workers, police officers, and firefighters can keep their jobs, keep protecting us—and keep spending and so provide employment for the rest of us?

ARE YOU KIDDING? THEY HAVE KEPT THEIR UNIONS. WE HAVE LOST OUR UNIONS. WE HAVE LOST OUR JOBS. THEY HAVE GONE TO CHINA. THEY HAVE VANISHED. WE ARE UNEMPLOYED. IF WE ARE EMPLOYED WE HAVE NO BARGAINING POWER WITH OUR BOSSES. IT IS NOT FAIR FOR STATE WORKERS TO NOT ONLY HAVE UNIONS, BARGAINING POWER, AND PENSIONS, BUT FOR THEM TO HAVE THEIR JOBS TOO. SINCE WE ARE LOSING OUR JOBS THEY SHOULD LOSE THEIR JOBS TOO. IT IS NOT FAIR.

Oh.

EVERYTHING YOU PROPOSE TAKES OUR HARD-EARNED MONEY, TAXES IT AWAY FROM US, AND GIVES IT TO SOMEBODY ELSE.

Oh.

BERKELEY SOCIALIST.

So what do you think we should do?

GET US JOBS!

But you have just rejected every idea I have for boosting employment—short of nationalizing the means of production and employing everybody by the government, that is. What are your ideas?

CUT TAXES. ABOLISH THE EPA. REPEAL HEALTH CARE REFORM. KEEP GOVERNMENT’S HANDS OFF OF MEDICARE. RAISE SOCIAL SECURITY PAYMENTS. CUT THE DEFICIT.

This is a truly horrifying conversation, yet it’s not too far off what the national dialogue is when it comes to how to fix the economy, protect consumers, create jobs, and build a better system that makes this sort of crisis less likely to happen again.

Chinese Officials Push for Media Freedom

Michael Wines of the New York Times:

A group of retired Communist Party officials and intellectuals issued an unusually blunt demand on Tuesday for total media freedom in China, stating that the current regime of censorship and government control of the press violates China’s constitution and debases the government’s claim to represent its citizens.

The document’s 20 signers, including academics and many former executives of China’s government-controlled press, have no public influence on the nation’s ruling coalition of Communist leaders. Some of them have issued other public demands for reform in past years, to no effect.

Still, the bluntness of their message — and its timing, coming days after the jailed intellectual Liu Xiaobo was awarded the Nobel Peace Prize — signaled that not all in the ruling establishment are content with the steadily tightening control over expression in the final years of President Hu Jintao and Premier Wen Jiabao’s leadership.

The letter’s language was notable for including an undisguised attack on the legality of censorship by the party’s Central Propaganda Department, which ultimately controls much of what is published, broadcast or posted on the Internet here.

“This is an invisible black hand,” the signers wrote of the department. “For their own reasons, they violate our Constitution, often ordering by telephone that the works of such and such a person cannot be published, or that such and such an event cannot be reported in the media. The officials who make the call do not leave their names, and the secrecy of the agents is protected, but you must heed their phone instructions.”

The “core demand,” the writers stated, was that China’s rubber-stamp legislature, the National People’s Congress, dismantle censorship procedures “in favor of a system of legal responsibility” for items that are freely published.

The harder the ruling Chinese Communist Party tries to silence dissent and criticism, the more it will force its critics public. As this happens, government critics will become more and more prominent. More than ever, the outside world is watching how the Chinese government treats its dissidents. Kerry Brown has a piece in The Diplomat in which he makes the case that China is weaker than it looks, in large part due the challenges it faces with internal democratizing forces. It’s hard to be a power while focusing so much on repressing dissent. Either the Chinese government will learn to embrace its internal critics or, eventually, these democracy advocates will eventually push out the Chinese Communist Party and force a change in government.

Tendor on China’s Theft of Democracy

My good friend and former coworker Tenzin Dorjee is the Executive Director of Students for a Free Tibet. He has an op-ed at Huffington Post titled “China’s Theft of Tibetan Ballots Threatens Democracy Everywhere.” On October 3rd, at the behest of the Chinese government, Nepali security forces stormed into voting stations and confiscated ballots cast by Tibetans in the Exile Government’s global election for both prime minister and members of parliament. Tendor notes that Tibetans “have participated in 14 parliamentary elections and two prime ministerial elections” since the 1960s. China had never previously sought to disrupt Tibetan exile elections in the past.

One key line of Tendor’s op-ed is this:

As Tibetan democracy finally comes of age, Beijing feels compelled to undermine this exercise of freedom and civil liberties that clashes with its own portrayal of Tibet as a feudal theocracy.

Moreover, the Tibetan election is a milestone in the global movement for democracy. What began as an unlikely democratic experiment in 1960 has evolved into a full-blown democratic government in exile, with the Parliament and Prime Minister elected by the Tibetan people through universal franchise. As the Chinese government continues to drag its authoritarian system well into the second millennium – leaving a fifth of the world’s population with no say over their own political future – a handful of Tibetans living in exile have overcome dispersion and statelessness to adopt an enlightened system of governance. This makes China look regressive and primitive in spite of its economic progress. It is, therefore, only natural that Beijing wants to undermine our democracy.

Perhaps the most prevalent argument by pro-occupation people for supporting China’s invasion of Tibet is that Tibet was a backwards, theocratic country. But as we’ve seen for decades, the “old Tibet” government, the institution of the Dalai Lama, has established a democracy in exile. By contrast, a friend points out in email, “new China is imprisoning Nobel laureates who call for democracy.”

“Progressive Hunter”

Media Matters has done an incredible investigative piece looking at Byron Williams, a right-wing extremist who got into a firefight with California Highway Patrol while on his way to kill people at the Tides Foundation and ACLU.  In a jailhouse interview done by an independent journalist, Williams credits Glenn Beck’s conspiracy theory chalkboard and extreme rhetoric as the driving force for his belief that violent action needed to be taken.

This is by no means the only example of right-wing extremists, fueled by Glenn Beck, Michale Savage and Rush Limbaugh, who has turned to violence during the Obama administration. But it is the most direct line, where a murderous shooter credits Beck directly for the source of his commitment to action.

Jailed Dissident Liu Xiaobo Wins Nobel Peace Prize

Today jailed Chinese dissident Liu Xiaobo has been awarded the Nobel Peace Prize. This is really an incredible statement by the Nobel Committee and a great push for democracy and human rights in China. Liu Xiaobo is one of China’s most prominent democracy and rights advocates, currently serving an 11 year prison term for calling for democracy, rights and a multi-party system in Charter 08. Charter 08 was initially signed by a small group of intellectuals and dissidents, though quickly signed by more than 2,000 citizens shortly after publication. It was intended to be a road map for how political change could safely occur in China.

Liu also stands out because of his strong support for Tibet and the Tibetan Government in Exile’s position of autonomy. In 2000, he authored an essay titled “The Right of Self-government,” which supported the Dalai Lama’s push for Tibetan autonomy (Chinese version, English translation). Obviously this did not win him many friends in the Chinese government. Liu has also put forward a specific plan for improving the situation in Tibet, authored with Wang Lixiong, “Twelve Suggestions on Dealing with the Tibetan Situation.” It was written just after the start of the March 2008 national uprising in Tibet, at a time when tensions were high and a massive crackdown against Tibetans was beginning. The article included in the suggestions:

1. At present the one-sided propaganda of the official Chinese media is having the effect of stirring up inter-ethnic animosity and aggravating an already tense situation. This is extremely detrimental to the long-term goal of safeguarding national unity. We call for such propaganda to be stopped.

2. We support the Dalai Lama’s appeal for peace, and hope that the ethnic conflict can be dealt with according to the principles of goodwill, peace, and non-violence. We condemn any violent act against innocent people, strongly urge the Chinese government to stop the violent suppression, and appeal to the Tibetan people likewise not to engage in violent activities….

9. We appeal to the Chinese people and overseas Chinese to be calm and tolerant, and to reflect deeply on what is happening. Adopting a posture of aggressive nationalism will only invite antipathy from the international community and harm China’s international image.

10. The disturbances in Tibet in the 1980s were limited to Lhasa, whereas this time they have spread to many Tibetan areas. This deterioration indicates that there are serious mistakes in the work that has been done with regard to Tibet. The relevant government departments must conscientiously reflect upon this matter, examine their failures, and fundamentally change the failed nationality policies.

11. In order to prevent similar incidents from happening in future, the government must abide by the freedom of religious belief and the freedom of speech explicitly enshrined in the Chinese Constitution, thereby allowing the Tibetan people fully to express their grievances and hopes, and permitting citizens of all nationalities freely to criticize and make suggestions regarding the government’s nationality policies.

Liu has even been a strong supporter of and advocate for Woeser, Tibet’s most famous poet and political dissident. This essay (Chinese version, English translation) defends one of her banned books and includes strong calls for freedom of thought and religion in China and Tibet. Again, these are not actions which made Liu popular with the Chinese government.

As much as today’s award is a great step in the cause of democracy and human rights in China, it has not yet changed the Chinese government. This is being reported on Twitter:

Wife of Nobel Peace Prize winner Liu Xiaobo says police forcing her to leave Beijing: ‘They want to distance me from the media’

Nobel Peace Prize winner the Dalai Lama has already put out a statement in praise of Liu Xiaobo’s Nobel win. I would hope that President Barack Obama, himself a Nobel Peace prize winner, issues a strong statement in support of Liu Xiaobo, including a call for his release from prison.

Today is a great day in the cause of freedom and human rights. People often ask me whether or not freedom can ever come for Tibetans. I’ve always believed that for change to occur in Tibet, there must be change in China first. Liu Xiaobo is one of the leading advocates for democracy in China whose work makes the very possibility of a resolution to the Tibet question a likelihood. It is dissidents like Liu, Wang Lixiong, Hu Jia, and blogger Han Han who are going to bring meaningful political change in China, a likely precondition to freedom in Tibet. I can’t think of anyone more deserving of the Nobel Peace Prize than Liu Xiaobo, a truly courageous man of principle whose belief in democracy and freedom has the power to shake one of the largest countries in the world to its core.

Cross posted at The Huffington Post.

Update:
President Barack Obama has issued a statement calling on the Chinese government to release Liu Xiaobo. Here is the President’s statement in full:

I welcome the Nobel Committee’s decision to award the Nobel Peace Prize to Mr. Liu Xiaobo. Last year, I noted that so many others who have received the award had sacrificed so much more than I. That list now includes Mr. Liu, who has sacrificed his freedom for his beliefs. By granting the prize to Mr. Liu, the Nobel Committee has chosen someone who has been an eloquent and courageous spokesman for the advance of universal values through peaceful and non-violent means, including his support for democracy, human rights, and the rule of law.

As I said last year in Oslo, even as we respect the unique culture and traditions of different countries, America will always be a voice for those aspirations that are universal to all human beings. Over the last 30 years, China has made dramatic progress in economic reform and improving the lives of its people, lifting hundreds of millions out of poverty. But this award reminds us that political reform has not kept pace, and that the basic human rights of every man, woman and child must be respected. We call on the Chinese government to release Mr. Liu as soon as possible. [Emphasis added]

This is a great statement from President Obama, both in its humility and in the President’s use of his platform to call for Liu’s release. Thank you, Mr. President.

Better Outlook for Midterms

Jane Hamsher has a comprehensive post on why Democrats are poised to do better than you’d think in the midterm elections. It’s great to see a lot of varying strings of thought pulled together in one place, particularly as the elections are getting closer and contrary to Conventional Wisdom, Democrats are starting to look stronger at the polls. While there isn’t any reason to expect Democrats to gain seats, races around the country are tightening and places where Republicans should be walking away with pickups are becoming places where Democrats can hold onto seats.

Hamsher writes:

It’s indisputable that the Democrats will have a tough time this fall. There is just no way you can escape the fact that the party in power is going to take the heat when the country is experiencing 10% unemployment.  Higher turnout will help the Democrats, but it won’t save them.  However, small margins in key races may make a big difference, and when it comes to the kind of intense ground game we’re going to see in key races over the next few weeks, I’d have to say the incumbent Democrats are better prepared than most of their Republican challengers.  And if everything breaks towards the Democrats between now and election day, and control of the House comes down to 2-3 seats, that could provide the margins they need.

This is going to be really close. Democrats really don’t have any business being competitive now, especially given how the last three months have gone. But they’re still in this thing, not just in the Senate but the House too. A failure by the GOP to capture both the House and the Senate (let alone the House), should go down as one of the greatest missed electoral opportunities in American history.

Inconsistent or Incoherent?

Joe Miller is inconsistent. And really incoherent.

Alaska U.S. Senate candidate Joe Miller (R) “called the idea of a living, changing Constitution ‘bullcrap,’ and said he would support an amendment for term limits as well as an amendment repealing the 17th Amendment, which allows for the direct election of senators by the public rather than by state legislatures.”

Well, which one is it Joe? Do you think the Constitution can never and should never change, despite Article 5:

The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.

Or do you think that the Constitution needs serious changing, as you just proposed by repealing the 17th Amendment and adding an amendment to put term limits in place?

The inconsistency, incoherence, and flat-out idiocy of Tea Party candidates like Joe Miller is simply stunning at times.

Two other points worth highlighting from the same Fairbanks News-Miner piece on Miller. First, he is a GOP Bed Wetter, who thinks that our country will fall apart if there is a major terrorist attack in the US.

“One bomb in one city could end our Constitutional republic,” he said.

Personally, I’m with President Obama. I think America is a resilient country, filled with resilient people. If we are hit by another terrorist attack, we’ll survive it and we’ll move on together to defend the country and defeat the people who perpetrated it. I really don’t get how a tough Kansan like Joe Miller, who actually has a law degree and should know better, thinks American society will collapse in the event of a major attack.

Lastly, Miller has a really bizarre defense for take massive farm subsidies year after year, despite being a supposed opponent of federal entitlements:

The candidate said he was basically forced by federal government to accept the money, which also defined what he could grow there, a system he said creates inefficiencies and could be improved if states only gave farm subsidies as they see fit.

Yet a tough, independent guy stood there and took a handout from the federal government without complaint. He only has a problem when it comes to other Americans getting money from the federal government.

The depth and breadth of Joe Miller’s hypocrisy is still being plumbed.

Simple Answers to Simple Questions

Responding to the story of Tennessee firefighters allowing a house to burn down because the owners hadn’t paid a subscription fee to the fire department, Paul Krugman asks:

This is essentially the same as denying someone essential medical care because he doesn’t have insurance. So the question is, do you want to live in the kind of society in which this happens?

No.

This has been another edition of Simple Answers to Simple Questions.

Ritholtz on Foreclosure Fraud & Structural Crisis

Barry Ritholtz has a post that does more to explain the implications of the foreclosure fraud revelations which have been coming out over the last couple of weeks. While the impact is something that people who don’t closely follow financial news and understand how the system works can be hard to understand, Ritholtz does a superb job presenting his case in an accessible way. When it’s all said and done, Ritholtz sees what’s happened in the mortgage market at the hands of real estate and structured finance industries potentially as illegal racketeering.

As I often say, the whole post is worth reading.

Surely this isn’t legal

ThinkProgress has an incredible expose on how the “US” Chamber of Commerce is fundraising from foreign companies in support of their partisan political efforts.

The Chamber has repeatedly sent out issue alerts attacking Democratic efforts to encourage businesses to hire locally rather thanoutsource to foreign counties. The Chamber has also bitterly fought Democrats for opposing unfettered free trade deals. To galvanize foreign businesses, the Chamber has commissioned former Ambassador Frank Lavin — who served as the McCain-Palin Asia campaign director and has appeared on television multiple times recently saying a Democratic Congress is bad for business — to speak before various foreign Chamber affiliates to talk about the stakes for the 2010 midterm elections.

Because campaign finance laws prohibit foreign entities from contributing to political races here in America, we asked the Chamber to defend the legality of its fundraising operation. We have yet to receive a response. But as word of our investigation began to leak out yesterday, the Chamber informed Politico’s Mike Allen that it is now “preparing a response.”

This is explosive stuff. I don’t know how much traction this will get, but it is clearly a major scandal. Foreign companies trying to buy influence in American politics? Anyone associated with this should be ashamed of what they’re doing to our democracy.

It’s just a reminder that the US Chamber of Commerce, unlike many local chambers of commerce, is not a friend of anyone other than major multinational corporations and the people who will protect their interests in the halls of power.