Tuesday, June 29, 2010

You Must Be Joe Keynes

The Morning Joe Rebuttal for June 29th, 2010


1) It would be so easy to simply roast Joe Scarborough for painting a ‘depth takes a holiday’ argument about Keynes versus austerity in by-the-numbers water color. But hey, I learned something readying my take for the other side.

Maybe it’s a crystallizing moment, because I know every day we talk about China having out stimulus-ed us, but Andrew Ross Sorkin taught us they got infrastructure and immediate results, and every day we talk about the futility of our pittance of high speed rail, but we heard Tom Brokaw speak revealingly about China completing 41 lines of high speed rail to our three non connecting un-started plans. Keynesian stimulus certainly worked for the world’s largest economy, what happened in the US? Oh yea, the hardship of competing with central planning with our compromised legislative plan is a major failing point. Good for Google freedom, bad for high speed rail.

Is that Keynes’ fault? I don’t think so. And since when does Joe Scarborough get his economic leadership queues from the Europeans? That seemed a little too convenient to be credible. As goes Antwerp so goes Atlanta?

Krugman’s not isolated like Scarborough claims. In fact, Scarborough had to retreat from Keynsian economics ‘is dead’, to ‘it’s having a tough time’ when facing a trained economist, so what does that tell you? Sorkin who should’ve had more of a dog in the fight, could only muster ‘it’s not the stimulus, it’s the efficiency of the stimulus’ in an apparent back pedal defense of Krugman. But it was enough to show the answer is not convenient yes or no stuff but dimensions and degrees that are not sound bite portable.

It should tell you that politicians are the root of all that is wrong in this economic plan gone terribly awry. Keynes can’t control the efficiency of a stimulus plan from the grave, and if you’re building bird sanctuaries instead of innovating, you aren’t actually doing stimulus, you’re doing politics.

The worst of it has been that like a slow speed car chase, we have known this exact thing was happening from it’s genesis in Congress through this inevitable wind down in the temporary and limited effectiveness of a misguided inefficient handout. We know we wasted the money. Bob Herbert knows we wasted the money. 20 million Americans facing long term unemployment will all eventually know we wasted the money.

The way forward is even more gutting. Now the Europeans are mucking up the program by going the Hoover austerity route, making the real step forward all the harder to sell via our compromised legislative governance.

Yup, we will have to actually do a Chinese style overhaul as stimulus, 2 years later than we should, and over the protest of carpetbaggers and tea party opportunists everywhere.

Yup, Keynes will be proven out, and the pain will by global, with Joe Scarborough having to explain why he sided with the European austerity reactionaries. Mr. Scarborough will have to admit, it was not from a complex thought that he had, he just limited himself to an algebraic if-then statement and guessed wrong.

2) T Boone Pickens and I seemed to have coalesced upon the ‘fuel choices for consumers’ ideal where customers can choose their fuel and make the alternative versions compete.

Unfortunately, his version is a very bad plan. It maintains the grid, you go to a central fuel provision depot, managed by Exxon, and they sell you your choice of 8 fuels based on your need. I wonder if that market would be manipulated at all?

The idea is to have the bottom fall out of demand for 87 octane refined gasoline. What happens then? In Pickens' version, Exxon and Saudi Arabia go for an 18 month predatory pricing plan that makes that product 85 cents a gallon to see if that’s enough to get the other 7 options to go bankrupt. If not, they go another 18 months.

Unless a Byzantine equalizing mechanism prevents this, no amount of RICO prosecution can prevent big oil from pricing based on survival instinct.

My version of the Pickens’ plan for automobiles involves people having a non grid option, whether it was electricity, or bio fuel, or a home natural gas line, or several.

I want Exxon to seem like MCA Records: the gravy train is gone, and we can’t give this stuff away. Pickens’ plan tries to keep those guys in the gravy post paradigm.

Two footnotes.

It’s pretty safe to say that the various producers would seem a lot like the cell phone companies, attempting to get subscription commitments at every turn to prevent real competition from happening.

And ethanol? Come on, is someone really still trying to sell that boondoggle? It will be a very nice byproduct when we find out the truth about genetic corn dangers, but short of that, a child cries in Africa every time a suit diverts a food grain to power an SUV.

3) Scott Brown wants to have his cake and eat it too. Why do we let him do this? Where is the Morning Joe show on this issue? This is a guy who used straight talk and no hidden agendas to get elected, now, he agreed to vote for the financial regulatory reform act, via inserting the Scott Brown ‘3 percent” component, then when the Byrd situation made Brown’s vote pivotal, he turned into Joe Lieberman.

We really need to start by line item removing any component from any opportunist who changes his mind with the spotlight on. Brown already cashed the check from the lobbyist who paid him to insert. It would be nice if he had to give refunds when he became the latest McConnell disciple to agree upon, then betray, progress and governing.

There is less and less doubt that Brown is part of a future ticket. That is a Democratic advantage, and the exploiting should come right here, right now.

Now I know, there is some ‘no tax increase’ debate after the Brown insertion that gives Brown cover to bail out, but I don’t believe it. I listened to Scarborough and read Brown react to the cost recapture tax inserted into the bill as being unfair to an industry that paid the TARP money back.

That’s so misleading it hurts to hear. They continue to rake in money by getting an unlimited line of credit from the discount window at near zero interest. If you were a citizen and hit the lottery like that, whether literally or by some windfall calculus, do you think the IRS would pat you on the back and say, ‘way to go, lucky’?

Of course not, and the AMT and those aggressive audits where the IRS makes you reinsert the real value of things in sweetheart deals proves Main Street doesn’t get away with this kind of math, so why should Bank Of America? Joe? Scott?

That’s all for today, see you tomorrow.

1 comment:

  1. I can't usually watch all 3 hrs but two things really got my goat today-Pickens was on the wind/solar bandwagon, WTF happened? Couldn't he make the economics work for the investor class? Ethanol-inefficient and as you stated, feed people, not combustion engines. Natural Gas? Hasn't anyone been paying attention to the "GASLAND" expose? Joe is deferencial to all rich SOBs (Welch, Pickens, Buffett) & never asks the hard questions.
    And the Christie love-in was nauseating; no ? re why a millionaires' tax cut at the expense of middle class/senior citizen property tax relief?
    Nice critique, as usual.