Saturday, February 28, 2009

A wake for a big Icelander

Yet another update: The video of the memorial can be found here.

Bill HolmFurther update: Spot knows that some people are checking back here periodically for the promised video. Sorry; it's not done, but Spot hopes to finish editing in a day or so. Hope it will be worth the wait.

Update: Thanks to all of you who came last night, and thanks especially to those who came to read. There will be a short video after it gets edited.

Note: We'll begin at around 6:30 tonight, rather than the usual 6:00 for DL. Sorry for any misunderstanding.

On Monday night, the second of March, there will be an informal wake (it will be the day after his funeral, but never mind) for Bill Holm, the ethnic Icelander Minnesotan who died last Wednesday at sixty five. Bill was known for a lot of things: his writing, teaching, love of music, and as a political essayist. We’ll start around six thirty; there’s really no formal program, but there will be an opportunity to read a few words of Bill’s that you especially admire.

And there will be opportunity to toast Bill’s memory and pledge that his name not be lost to memory. We’ll try to have some Icelandic vodka around.

Many of Bill’s admirers never had the chance to meet him; if you did, please come and share your recollections of Bill.

We’ll be at the 331 Club in northeast Minneapolis, the usual spot for Drinking Liberally.

The picture, incidentally, is from the McKnight Foundation and is posted in an obituary of Bill Holm on the MPR website.

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Friday, February 27, 2009

Hello? Hello? Anybody there?

Halsocan is being uppidity. Patience, boys and girls.


This is truly amazing:
All hell just broke loose in the Minnesota courtroom, with Al Franken's lawyers catching Team Coleman in the act of yet more concealing of evidence -- and they've now made a motion to totally strike the Coleman camp's claims about double-counting of ballots, which the Coleman camp has hoped to use to subtract over 100 votes from Franken's lead.

* * *

This morning, Franken lawyer David Lillehaug was restarting his cross-examination of Howell, and inquired as to whether there had been any further communications between herself and Coleman. The answer was yes -- and Coleman lawyer Tony Trimble then had to cough up some private e-mails he'd sent to Howell in early January.

"Pam, the legal team and campaign have made a strategic litigation decision to hold off from having you sign and us file your affidavit at this time," Trimble (or possibly his assistant, Matt Hapooja) wrote on January 6, "to avoid tying you down to any particular testimony and to avoid having to disclose your name and statement."

Trimble assured Howell in the e-mail that she shouldn't worry -- that the campaign would be calling her at a later date and incorporating her into this case, just not at this time, and they were keeping her name private.

Howell wrote to them in late January to seek further clarification -- whether she would be coached, how much the Franken camp knew, etc. Trimble answered that there would be no further coaching, and the Franken camp didn't know about her statement.

Lillehaug demanded that not only should Howell's testimony be re-stricken, but that Coleman's entire claim about double-counting be tossed.

"And it is clear from contestants strategy in this regard that Ms. Howell was their star witness on the issue of original and duplicate ballots," Lillehaug said. "They picked out one election judge from one precinct -- she's the only election judge they're presenting on this claim - and then yesterday documents were offered and admitted into evidence based on that precinct and nine other precincts. It is clear that her testimony was the linchpin for the Coleman original and duplicate ballots claim."

Lillehaug said they should not have to go back to the drawing board to figure out how to cross-examine her, and thus her testimony must be struck, and with it the entire double-counting claim for all precincts.

Lead Coleman attorney Joe Friedberg got up to mount a defense -- and totally threw Trimble, Hapooja, and fellow lawyer James Langdon under the bus. He said he'd asked them on Wednesday if there were other things going on, and he didn't know about it: "I can tell you that if I'd have known these things existed, I would have disclosed them."

Are they trying to lose this case and look like fools? Maybe it's all just part of their "strategic litigation decisions."

Eric Cantor saves the Republic!

From Talk Radio News Service:

Representative Eric Cantor (R-Va) was one of the Republicans that held a press conference today and presented the House-Senate Fiscal Responsibility Group. Canitor said that the group was created to monitor how tax payers money is being spent.

And a photograph of the event from the New York Times:

eric cantor saves the republic

Where do we find men like these?

Don’t answer that, grasshopper.

Thursday, February 26, 2009

Beating cars into windmills

Barack Obama had a little to say about the automobile industry in his address on Tuesday night:

What he said was certainly popular with the Congress. But is it even achievable?

Probably not.

Jeepers, Spatty, that’s kind of negative.

Yes, grasshopper, it is. But even if the economy was healthy, we wouldn’t need so many cars, especially the large high-margin ones that Detroit is accustomed to building. The Happy Motoring Fiesta, as James Kunstler calls it, is almost certainly over. Obama talked about a “retooled and re-imagined auto industry,” but the auto industry can be retooled and re-imagined until the cows come home and it won’t employ the people or be the the economic engine it once was. But his insight to try to save the industrial capacity of the auto sector is a good one.

Spot, couldn’t we just retrain all the people in the auto industry to be, say, investment bankers?

Very funny, grasshopper. But you do make a point.

I know, Spotty.

Maybe Henry Ford — or his descendents, anyway — need to go solar. That’s what Spot’s DL pal techno said fifteen years ago:

This leaves [after discussing the environmental effects of the carbon economy and the inherent dangers of nuclear power] solar power as the only remaining contender. The modern Ford would probably not be tempted by photovoltaic electrical generation. Concerned with the environmental hazards involved in the production of PV cells, Ford would not be convinced that they produce as much energy as they require to make, and is worried about the useful life and recycling problems of square miles of PV cells.

On the other hand, a new Ford would probably be fascinated with the possibilities of solar power's great manifestation--the wind. Harnessing the wind would draw upon Ford's great strengths. Windmills are mechanical and they can be mass produced. They can be designed to be easily maintained and when maintenance is no longer possible, recycled into new windmills.

Spot think probably not only windmills, but new and more efficient ways to transmit energy, rolling stock for light rail trains for carrying people and freight trains for the carrying of raw materials and finished goods, and so on. It would be tragic, in terms of loss of industrial capacity to the economy, not to mention the loss of employment, to let it all just crumble in an act of “creative destruction,” thinking something new and shiny will magically arise to take its place. Here’s more of techno on the scope of the undertaking:

Even if one believes that Ford was a one-in-a-million kind of guy, statistically the USA should have 250 modern "Fords" hiding somewhere in the society. If it requires a new Ford to go solar, it should be possible to find one. Yet Ford was a product of his times and today's Zeitgeist is quite different. There could be a thousand new Fords and they would never be identified because the social environment has changed so radically, the potential Fords are not developing into the real thing.

If the Zeitgeist can be changed, the people necessary to build a solar infrastructure will emerge from the woodwork. A serious conversion to a solar future is possible technologically but so far, the institutional requirements have not been met. The great social questions have not even been asked--Do we have the social will to trade energy convenience for a less-damaged atmosphere? Do we have the social organization to plan and execute a project that will require at least 25 years? What will it take to acquire permanent funding for such a project? Is it possible to build a solar-powered infrastructure with preindustrial economic assumptions of what is profitable? Does anyone with political power understand how large and difficult this project will be? Can a society that glorifies individualism ever understand that genuine environmental solutions require new industrial and social designs?

One of the principal instruments of social organization is, naturally, the government. But we have been in the thrall of the nihilists and the moral ciphers — masquerading as conservatives and libertarians — for thirty years. And they’re not giving up easily, as Bobby Jindal and his acolytes like Rush Limbaugh and Jason Lewis demonstrate. It is funny — no; we’ll have to settle for tragically ironic — that the pikers who are squealing the loudest about the economic rescue mounted by President Obama are the same people who are responsible for the catastrophe in the first place.

DL cancelled 2.26.09

The video says it all:

Got snow?
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Wednesday, February 25, 2009

Other than that, David,

How did you like Bobby Jindal’s response to Barack Obama?

From the PBS coverage.

Spot’s favorite moment

Spot watched President Obama’s address to the Congress and to the nation last night. This stood out as Spot’s favorite moment of the evening.


When trying to think of appropriate music, Spot first thought of a few bars of “You Can’t Always Get What You Want” from the Rolling Stones. Okay. Then, he tried something from "Carmina Burana.” Better. But what he decided on was a few fair use bars of “Dies Irae,” or Days of Wrath, from the Mozart “Requiem.” Just seemed to fit. This one is from the “Amadeus” soundtrack.

Tuesday, February 24, 2009

Keith Downey is off to a great start!

On the floor of the Minnesota House:

The chair recognizes the member from . . . who are you again; you’re new, right?

[rather pompously] I’m Representative Keith Downey from Edina, Minnesota.

Minnesota? Well, imagine that. Go ahead.

I rise to offer an amendment to H.F. 886, the bill to accept stimulus money from the Great Satan, the federal government.


My amendment would require the State of Minnesota to put a third of that money, or a half a billion dollars, whichever is more, into reserves.

You mean bank it?


You do know, don’t you, that the stimulus money is supposed to be spent to stimulate the economy?


[the Chair nods] That’s why the federal government is going into further hock to distribute money to the states. [you putz, says the Chair under her breath] The Chair recognizes the member from Minneapolis.

[Rep. from Minneapolis] Are you out of your freakin’ mind?

[bangs the gavel, but smiles] Order. [turns back to Rep. Downey] Did you come up with this idea all by yourself?

No, Reps. Hoppe and Emmer, especially, helped me.

Okay, Hoppe and Emmer. Very funny. You know, your were freshmen once, too. The Chair admonishes you to remember what it was like.

*  *  *

The colloquy is imagined, but Keith Downey did in fact author an amendment to bank a half a billion dollars of whatever stimulus money that Minnesota receives. And the sad thing is, the amendment received over fifty votes, as you can see in the linked pages of the House Journal. The amendment was offered, after a Republican initiative to refuse any stimulus money was rejected by the House. Even Governor “Grooming Myself for a Run at the White House” Pepsodent wants to take the stimulus money.

Monday, February 23, 2009

The Law of Comparative Shitholes

Pat Anderson, the new diva at the Minnesota Free Market Institute, writing in the Strib on Monday:

It is an iron law of economics that given a choice between two shitholes, the wealthy will always flee to the larger one.

Jeepers, Spot, did she really say that?

Well, Spot is paraphrasing:

Taxes on the "wealthy," like so many progressive policies, actually work against the stated objective. If the tax burden gets too high, the "wealthy" simply pick up and leave for warmer climates. Homes are cheap in Florida, and a dollar stretches a lot further when there are no state income taxes. When these people move, they take the jobs they provide and the taxes they pay along with them. And, ironically, to woo new high-earners with job mobility to the state, companies must offer higher wages to offset higher income taxes, in effect increasing, not decreasing, the wage gap that seems so "unfair." Mobility is much easier for citizens and businesses in the 21st century.

Pat’s law does explain why Somalia and Pakistan, for example, are such hotbeds of entrepreneurial activity. It also explains why Jason Lewis and Bill Cooper left the state.

Uh, Spot, they both moved back to Minnesota.

Really, grasshopper? Fancy that.

But Pat’s complaint about wages is clearly a powerful one. Median incomes in places like Texas and Florida and Alabama must be much higher than incomes in Massachusetts, Minnesota, or New York. Right?

Median incomes are way higher in the higher tax states, Spot.

Well, Spot’s a monkey’s uncle! [Spot like to give the grasshopper the good lines once in a while, too.]

Anyway, Pat ends her monograph on the Law of Comparative Shitholes with this fervent prayer:

I would hope that before any legislators consider a class-warfare offensive, they remember who pays for state programs. Punishing hard work and ingenuity does not bode well for the long-term health of our economy.

Spot’s first question, Pat, is why, if you “would hope” it, why don’t you just go ahead and hope it? Or does the Minnesota Free Market Institute pay you by the word for the tripe you get in print?

And Pat’s a cheeky little anti-tax trollop, too: the only class warfare in this country since about the day that Ronald Reagan was elected has been against the poor and the middle class, although many of the latter have become the former.

Put a bullet in the beast

Paul Krugman's column this morning makes the case for nationalizing some banks. And he says that Alan Greenspan agrees:

Comrade Greenspan wants us to seize the economy's commanding heights.

O.K., not exactly. What Alan Greenspan, the former Federal Reserve chairman — and a staunch defender of free markets — actually said was, "It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring." I agree.

There are some really, really big banks – such as Citibank and Bank of America – that could, probably would, fail without further intervention:

Third, while banks must be rescued, the U.S. government can't afford, fiscally or politically, to bestow huge gifts on bank shareholders.

Let's be concrete here. There's a reasonable chance — not a certainty — that Citi and BofA, together, will lose hundreds of billions over the next few years. And their capital, the excess of their assets over their liabilities, isn't remotely large enough to cover those potential losses.

zombies ahead Arguably, the only reason they haven't already failed is that the government is acting as a backstop, implicitly guaranteeing their obligations. But they're zombie banks, unable to supply the credit the economy needs.

To end their zombiehood the banks need more capital. But they can't raise more capital from private investors. So the government has to supply the necessary funds.

But here's the thing: the funds needed to bring these banks fully back to life would greatly exceed what they're currently worth. Citi and BofA have a combined market value of less than $30 billion, and even that value is mainly if not entirely based on the hope that stockholders will get a piece of a government handout. And if it's basically putting up all the money, the government should get ownership in return.

Spot absolutely has to say that he told you the same thing. Okay, that was shameless. Sorry.

Spotty, didn’t Krugman talk about bank recapitalization, a step just short of nationalization, even before that?

We can discuss it later, grasshopper; Spot is busy.

The alternatives are let the banks alone to stumble along aggregating losses until they fail, unable to be a source of credit to the economy, increasing the government’s FDIC risk all along the way, OR put a federal bullet in these beasts, giving the existing capital in the bank a haircut, because it isn’t worth anything anyway, really. Then selling the good assets off to new investment. Receivership is just as good a word as nationalization.

You did it again, Spot.


Mixed your metaphors.

You miss Katie, too, don’t you grasshopper?

It's Monday morning in America

And I am finding myself actually missing my regular dose of Katherine Kersten, delivered like clockwork to the doorstep of Chez Observer.

Saturday, February 21, 2009

Some boob named John Helberger

Helberger repeats a canard and libels Charles Darwin in one breath. Nice job, John!

Who’s John Helberger, Spotty?

He’s a member of the medieval and antediluvian association of boobs known as the Minnesota Family Council. On Charles Darwin’s birthday, Helberger trots out the prevarication that Darwin was the genesis of the Nazis. Actually, it is said that Hitler was a student of the eugenics movement in the United States:

America’s experimentation with genetics as a tool for social change is not new. In the 1920s the United States became the world center of eugenic activity and social policy. From 1907-1960 more than 100,000 innocent Americans were sterilized in more than 30 states. In the 1930s and 1940s Hitler’s scientists took eugenics to the extreme - establishing human breeding farms for "Aryans," large-scale sterilization and euthanasia programs for the mentally and physically disabled, and death camps for the races they deemed "genetically inferior" or "unworthy life."

Both the American and German eugenics movements of the 1920s and 30s identified human beings as either hereditarily valuable or inferior. They established programs to purify the "race" of "lower grade" and "degenerate" groups, thus extending racism to include a new generic classification - the "genetically inferior." Not surprisingly, the targets always turned out to be the traditional victims of racism - Jews, Gypsies, Blacks, Indians, and other minorities.

After Hitler’s defeat, the American eugenics movement fell into disfavor, appealing primarily to the KKK, neo-Nazis, and a small groups of old-line scientists steeped in the racist theories of the pre-war period. In the 1960s their key spokesman was Stanford physicist William Shockley, who was the first to suggest offering cash incentives to people with low IQ scores who would agree to sterilization. He called his proposal the "voluntary sterilization bonus plan." Despite his status as a Noble laureate, Professor Shockley was widely regarded as a racist and a kook within the academic community. Nevertheless, he laid the foundation upon which the new eugenics movement would eventually be resurrected.

But Darwinism has nothing to do with eugenics or “Social Darwinism.” Darwin is biology; “Social Darwinism” is just racist claptrap most often supported by the same people who deny biological Darwinism, like the Minnesota Family Council coven of Christian evangelicals.

A thump of the tail to Lloydletta.

The devil’s gift

That would be Bibi:

Netanyahu is the devil's gift to international terrorism, which his policies will provoke. Fifty years from now, the turn of Israel to the hard right will be looked back upon as the beginning of the end of Israel, the time when the crucial decisions were made that rendered it impossible for the Israelis to stay in the Middle East in the face of the increasing popular anger Netanyahu will have provoked in 1.5 billion Muslims. No, Israel cannot be defeated on the battleground. But the French colons in Algeria were never really defeated on the battleground, either, nor were the thousands of Britons who had ruled India.

That’s Juan Cole, commenting this morning on the fact that Netanyahu will form the next government in Israel.

Some day, somebody else in the region – Iran, or maybe Saudi Arabia, or even Egypt or Syria – will get a nuclear weapon, taking the nuclear strategic advantage away from the Israelis. Then, the Israelis will have their George Armstrong Custer moment, waking up one morning, looking out across the hills, and thinking to themselves, “Damn, that’s a lot of Muslims.”

The United States is probably in for a rough ride with the Likudniks, too:

More immediately, all Americans will have reason to rue Netanyahu's return to power, since the American Israel Public Affairs Committee and other elements of the powerful Israel lobbies will pull Congress around to support Likudnik policies in the next few years.

And it won't even be allowed to protest where Netanyahu will take America.

All the elements of a slow motion Greek tragedy are now in place.

A thump of the tail to Norwegianity, although Spot would have gotten around to it eventually.

Friday, February 20, 2009

Tim and Geoff go walking

butt hole road

Geoff Michel – Edina’s own Artful Dodger – gave a hearty thumbs up to Governor Pepsodent’s proposed budget for the next biennium. Hooray for the governor, says Geoff, because he realizes that salvation can only be obtained by suffering – by other people, of course. Behind all of Sen. Michel’s sophomoric sloganeering lies a core of chicanery and deceit. Geoff’s most odious remarks were directed to the issue of health and human services:

The governor also slows the runaway trains of our budget: health and human services and welfare spending. Without reform, these costs are scheduled to increase an unsustainable 22 percent in the next two years. As baby boomers near retirement, this part of the budget will suffocate our ability to focus on education and jobs. The one-time federal money in this area is not reform and merely delays the tough decisions for another budget.

No mention by Geoff of the fact that the increase is probably most attributable to all the people being driven into penury as a consequence of economic policies of the last eight years.

As for “runaway” welfare spending specifically, it amounts to about eight tenths of one percent (0.8%) of the Health and Human Services general fund spending. You could look it up. Governor Pepsodent probably makes bigger errors in the state’s checkbook every day!

But let’s get back to health care spending. Although the Medicaid program – for poor and disabled people – is administered by the state, it is funded with matching grants from the federal government. In fact, the feds are going to substantially increase the amount of these matching funds to Minnesota:

A new analysis of the American Recovery and Reinvestment Act by the Center on Budget and Policy Priorities indicates that Minnesota can expect to receive approximately $2 billion in increased Medicaid matching funds from the federal government from October 1, 2008 through December 31, 2010.

Three key features of the bill relating to Medicaid include:

    * A "hold harmless" provision ensures that any state whose base Medicaid matching rate, or FMAP, is scheduled to decrease in 2009 or 2010 would remain at the highest rate. The base rate varies by state depending on economic circumstances, ranging from 50% to a high of 75.84%;
    * Minnesota and all other states will have 6.2% added to their base FMAP. In our state, where the federal government pays 50% of Medicaid costs, the base federal share of assistance will increase to 56.2% during the period from October 1, 2008 through December 31, 2010;
    * States experiencing worsening economic conditions as indicated by a significant increase in their unemployment rates would receive an additional increase in FMAP. State economic conditions will be reviewed on a quarterly basis. Once a state qualifies for an additional increase, the higher FMAP would remain in place through at least July 1, 2010, even if unemployment conditions in the state improve.

Most importantly, to receive any increased FMAP, Minnesota's Medicaid eligibility levels must not be made more restrictive than they were on July 1, 2008.

In fact, as the above quote suggests, the percentage of reimbursement to the state will also increase until at least the end of 2010. As a consequence of the provisions of the recent federal act, even Governor Pepsodent has apparently admitted it is going to be hard to kick people off of Medicaid, at least in the near term!

So, where to turn, where to turn? Ah, we have it, says Geoff and Tim! Let’s kick 85,000 people off of Minnesota Care! (The middle section of Mike’s program at the link has a discussion of the figure.) That’s it! These are people who are just slightly too-well-off to qualify for Medicaid. A bunch of pikers, no doubt!

Now you may not know it, boys and girls, the participants in Minnesota Care do pay premiums on a sliding scale based on income. There is another important source of revenue for Minnesota Care, however; it’s the health care provider tax:

The Health Care Access Fund (HCAF) collects money through health care provider taxes and premiums from MinnesotaCare enrollees. Created in 1992, the HCAF was intended to provide low-cost health care for working Minnesotans, so use of these funds for other purposes is controversial. However, the HCAF is a popular place to look for additional resources whenever the state faces a budget deficit.

This year is no exception. The Governor's supplemental budget draws $250 million outright from the HCAF and transfers it to the general fund to help fill our $935 million budget hole for this biennium. That part is obvious.

The quote refers to the current biennium, but Governor Pepsodent plans the same thing next biennium:

So, between the $250 million transfer and the $149 million refinance - the HCAF is contributing $399 million over the next three years to help solve our budget deficit. Want to see for yourself? Then take a look at the information from the Department of Finance.

This, boys and girls, is vintage Pepsodent:

Nearly every year he's been in the governor's office, Pawlenty has sought to raid the surpluses in the Health Care Access Fund to pay for general fund programs, successfully diverting more than $400 million in HCAF that way during his first term, and borrowing $50 million more for health care reform during the last session. But the fund was created in 1992 specifically to underwrite MinnesotaCare, a program designed mainly to insure working families whose employers don't provide coverage. The source of this dedicated funding is a 1 or 2 percent tax on health providers and health plans, and a sliding scale premium on MnCare enrollees.

According to the same Politics in Minnesota report:

In light of this session's historic budget deficit, Pawlenty saw an opportunity to eliminate the freestanding HCAF altogether by folding its revenues into the general fund. That's a pretty slick trick: Not only does the governor want to cut state payments to health providers by 3 percent, he wants to take the 2 percent tax they are paying to make sure middle class workers have insurance and use it to fulfill the state's legal obligation to insure the poor and disabled through Medicaid.

This would relieve the likes of Governor Pepsodent and Geoff Michel of having to bear the obloquy of continuing to raid a revenue stream that is supposed to be dedicated to providing health care to poor people.

When you hear Geoff Michel’s lament that health care spending is swallowing the state budget, you must recognize, boys and girls, that it is exactly the other way around: the state budget is swallowing health care. “Health care” is actually running a surplus.

The providers, who are paying this tax (and who have to pass it along to consumers, of course) have so far held off showing up at the Capitol with pike poles and pitchforks, but the day is coming:

The MMA [Minnesota Medical Association] strongly opposes using the Health Care Access Fund as a slush fund to pay for projects unrelated to health care or to balance the state’s budget.

When words are confined to those used in polite company, it is impossible to adequatey describe the reprehensible and reptilian shenanigans of Governor Pepsodent and his fellow travelers like Geoff MIchel on the budget and funding for health care in particular.

So much for those dangerous radicals

St. Paul will not prosecute 323 arrested on last day of GOP convention

The St. Paul city attorney's office said today it is declining to prosecute 323 people arrested on the Marion and Cedar street bridges Sept. 4 as part of the Republican National Convention protests.

That totals about 82 percent of the 396 people rounded up during those protests on suspicion of unlawful assembly or presence at an unlawful assembly.

Well, at lest Sheriff Fletcher reached his goal of 800 arrests. And that's what mattered most, it seems.

Thursday, February 19, 2009

Michele Bachmann goes viral – again

As Sigmund Spot might ask, “Vut color ist za sky in your vourld, Michele?”

Special thanks to the credulous moron Chris Baker.

A thump of the tail to Avidor.

Tuesday, February 17, 2009

Where’s Eric?

Eric Cantor (R-Va) is the new minority whip in the House; he’s perfect for the job. Cantor is the whiney, oily and unpopular kid we all had in our class in high school. A voice like chalk on a blackboard with a wholly-undeserved sense of entitlement and superiority.

Here’s a recent picture of Eric Cantor backing up John Boehner at a press conference just before the election:

pop up cantor

But you have to give Eric some credit. Captain Ed believes that Eric is the reason that no Republicans voted for the stimulus bill in the House. And it stands to reason: Eric seems like the kind of guy you’d promise damn near anything to get him out of your office or off the phone.

Spot was just thinking how nice it was to have two friends who are great graphic artists. You can just say, “Boy, it would be nice to have a picture of . . . “ and it usually appears a short time later. One of them is Avidor, and the other is Tild, the creator of the animated gif above. A big thump of the tail to her.

I don’t want to pay it; you pay it

Spotty, who pays corporate taxes, anyway?

Why do you ask, grasshopper?

King Banaian says that consumers and labor — and maybe capital, a little — really pay corporate taxes, not the corporation on whom they are levied:

. . . The Tax Incidence Study done every two years here in Minnesota shows that of the $780 million collected in the corporate franchise tax, much is shifted to others. The report states that, while the taxes are legally paid by businesses, they are "...partially shifted to consumers (in higher prices) or in some cases to labor (in lower wages). Only a portion of business taxes are borne by capital owners as a lower rate of return on their investment." (p. 32)

To see this, take a look at the incidence report's Table A-1 at page 77. For a $120 million in additional tax on capital, only $61 million is borne by Minnesota businesses. Minnesota labor receives wages $3.8 million lower because of the tax. Most of the tax is borne by consumers because businesses raise prices to shift the burden of the tax onto purchasers of their products. Turning that into a sales tax does not mean a dollar transfers from consumer to business, as the corporate tax was mostly being transferred to consumers anyway. Consulting Table A-2 we find that $.42 of each dollar of corporate tax was transferred to Minnesota consumers, and another eight cents to labor.

So your conclusion is, grasshopper?

Well, the professor says why have corporate taxes, if somebody else pays ‘em anyway? Maybe he has a point.

He has a point, grasshopper, but as is often the case with our favorite Homo economicus, it’s largely irrelevant. And here’s why:

Businesses are consumers of public services, just as well as the, well, public. Transportation, banking, utilities, education, police and fire protection, etc. are all services that businesses use or are benefitted by, just like everyone else. And the services are either directly provided by, or facilitated by government. Why shouldn’t they pay something for it? Who do they think they are, really?

But Spotty, we could get a little more economic growth if we cut business taxes!

So? Businesses might grow faster if we encouraged them to become even more predatory than some of them already are, too. We could build nuclear power plants — and build ‘em fast — if we could just get over than darn concern about turning whole regions of the country into radioactive wastelands. And if we quit worrying about all those kids with asthma, we could build that Big Stone II plant in a jiffy.

In fact, business taxes just make businesses account for some external costs; it “helps” them pay their way. The professor says that the costs are “shifted forward”; Spot says they are just included in the price of the product or service offered. So the consumer gets to decide whether that product or service, including the true cost of producing it, is worth it.

Golly, Spot, that sounds like a true free market argument!

It is, grasshopper.

We’ll talk about his some more in coming days.

Monday, February 16, 2009

First verse

Kip Sullivan was not the first person to come to Drinking Liberally – Minneapolis to talk about single payer, universal health care. Here’s Jack Nelson Pallmeyer, almost exactly a year ago on the same subject:

Perspective of a former West Bank settler

Spot saw this on and thought it was worth passing on:

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Sunday, February 15, 2009

A word of wisdom to the St. Paul Pioneer Press editorial board

The only do-over anyone allowed by state law is the one scheduled for 2014.

209.07 Subd. 2 sets the terms for an election to be declared invalid: " [A] serious and material defect in the ballots used changed the outcome of the election for the contested office." That's it. That's the only reason.

Nowhere did the legislature decide that a "statistical tie" (whatever that means) is a reason for a do-over.

Saturday, February 14, 2009

Kip Sullivan at DL: the video

Last Thursday at DL, Kip Sullivan of the Minnesota Universal Health Care Coalition came to talk about the proposed Minnesota Health Act. Here are some of his remarks:

The bill, sometimes referred to as the “Marty bill,” is up for a vote in a Minnesota House committee on Thursday, February 25th. This is the first time that a single-payer health care bill has gotten a hearing in a House Committee in nearly a score of years of trying.

The members of the committee, the Health Care and Human Services Policy and Oversight Committee can be found at the link. If this is important to you, you should contact the DFLers on the committee, especially. The chair of the committee, Paul Thissen, has announced that he will run for governor in 2010.

Thursday, February 12, 2009

Three cheers for the Israeli center!

This is the outcome, according to the genuine Middle East expert Juan Cole, of the Israeli elections:

The outcome of the Israeli election has sounded the death knell for the two-state solution. There are not 61 votes for it in the new Knesset of 120 seats. A good 64 of the just-elected and/or re-elected Members of Parliament favor accelerated Israeli colonization of the West Bank and oppose Palestinian statehood. Most militant of all is Avigdor Lieberman, a former bouncer from Moldova who has risen in Israeli politics on a platform of racial hatred for Israeli-Palestinians (20% of the population), whom he has urged be "executed" or made to take loyalty oaths, stripped of their citizenship and possibly transferred to the Palestine Authority.

With Lieberman emerging as kingmaker in the new government, logically speaking, there are only three other plausible future relationships of Israel and the Palestinians:

1. Apartheid, with Israeli citizens dominating stateless Palestinians and controlling their borders, land, water and air. Apartheid would be accelerated under Lieberman's baleful influence. [(]Over time, this outcome would break down, since it will be unacceptable to the rest of the world over the coming decades).

2. Expulsion. The Israelis could try to violently expel the Palestinians (and possibly Israeli-Palestinians as well), creating a massive new wave of refugees in Jordan or Egypt's Sinai. (This option would almost certainly end the peace treaties with Egypt and Jordan and might well push the Arab states into the arms of Iran, creating a powerful anti-Israel military coalition and a huge set of threats to the United States.)

3. One State. The Israelis could be forced over time, by economic and technological boycotts, to grant citizenship to the Palestinians of the occupied territories.

The last one is, of course, the least likely, since the Jews would be an instant minority in a “Greater Israel.”

The Israeli electorate has probably just handed the United States another generation of terrorism.

Drinking Liberally hosts Kip Sullivan

stylized 331 Club - DL Tonight, we’ll discuss health care and current legislation in the Minnesota Legislature on this topic. We do have a guest planned; Kip Sullivan of the Minnesota Universal Health Care Coalition will be there to help us understand what is going on. This is an especially important topic this session.

We meet at the 331 Club in northeast Minneapolis from six to nine or so. Kip is expected around seven.

Space collision: who’s responsible?

They say it was inevitable:

For decades, space experts have warned of orbits around the planet growing so crowded that two satellites might one day slam into one another, producing swarms of treacherous debris.

It happened Tuesday. And the whirling fragments could pose a threat to the International Space Station, orbiting 215 miles up with three astronauts on board, though officials said the risk was now small.

"This is a first, unfortunately," Nicholas L. Johnson, chief scientist for orbital debris at the National Aeronautics and Space Administration, said of the collision.

It happened some 490 miles above northern Siberia, at around noon Eastern time. Two communications satellites — one Russian, one American — cracked up in silent destruction. In the aftermath, military radars on the ground tracked large amounts of debris going into higher and lower orbits.

The article doesn’t say whether one satellite rear ended the other or there was a head-on collision.

Spotty does hope the operators exchanged insurance information.

Wednesday, February 11, 2009

Son of TARP

So it’s come to this, has it Spot?

What do you mean, grasshopper?

Quoting Maureen Dowd as a source on financial matters.

Well, it sounds so bad when you put it that way. She did have some of the more pithy comments about the words from our new Treasury Secretary:

It wasn't only that Americans' already threadbare trust has been ripped by Hank Paulson's mumbo-jumbo and the Democrats' bad judgment in accessorizing the stimulus bill with Grammy-level "bling, bling," as the R.N.C. chairman, Michael Steele, called it.

The problem is that the "lost faith" that Geithner talked about in his announcement Tuesday cannot be restored as long as the taxpayers who are funding these wayward banks don't have more control.

Geithner is not even requiring the banks to lend in return for the $2 trillion his program will try to marshal, mostly by having the Fed print money out of thin air, thereby diluting our money, or borrowing more from China. (When, exactly, can China foreclose on us and start sending us toxic toys again?)

There's a weaselly feel to the plan, a sense that tough decisions were postponed even as President Obama warns about our "perfect storm of financial problems." The outrage is going only one way, as we pony up trillion after trillion.

Geithner is coddling the banks, setting it up so that either we'll have to pay the banks inflated prices for poison assets or subsidize investors to pay the banks for poison assets.[italics are Spot’s]

This is why recapitalizing the banks – the ones worth saving, anyway – by “injecting capital” in exchange for senior equity position is much better than buying the toxic assets directly. That way, the treasury and the taxpayer are behind the bank shareholders and executive stock option holders in the haircut line. Which is as it should be.

On the other hand, Spot listened to part of a hearing with Geithner testifying before the Senate Banking Committee. Sen. Jeff Sessions of Alabama thundered that the stock market had seen the plan and didn’t like it. Spot thinks that the stock market has pretty well surrendered its authority on what is a Good Idea at this point and wouldn’t put much stock in its reaction Tuesday afternoon.

Tuesday, February 10, 2009

Lebensraum Revisited

[Update: Post “polluted” says M; read his comment.]

No, it’s not an old novel turned into a German period-costume flick. It’s returning to a post that Spot did in January about the parallels of Israeli intentions in the Occupied Territories and German intentions in places like the Sudetenland in the late 30s. An exchange with King Banaian here gives the term new currency for discussion at the Stool. Here’s a repeat of a quote from the BBC website about Lebensraum:

The term Lebensraum was coined by the German geographer, Friedrich Ratzel (1844-1904). During the last two decades of the 19th century, Ratzel developed a theory according to which the development of all species, including humans, is primarily determined by their adaptation to geographic circumstances.

Above all, Ratzel considered species migration as the crucial factor in social adaptation and cultural change. Species that successfully adapted to one location, he thought, would spread naturally to others. Indeed, he went on to argue that, in order to remain healthy, species must continually expand the amount of space they occupy, for migration is a natural feature of all species, an expression of their need for living space.

This process also applied to humans, who operate collectively in the form of 'peoples' (Völker), with one Völk effectively conquering another. However, according to Ratzel, such expansion could be successful only if the conquering nation 'colonised' the new territory, and by 'colonisation' he meant the establishment of peasant farms by the new occupiers.

Spot suggested, and again suggests, watching a CBS 60 Minutes segment by Bob Simon about Israel-Palestine. Oh, what the heck; Spot will embed it again:

The whole thing is very good, but if you’re in an especial hurry, fast forward to about 9:40 and watch and listen to the mayor of a West Bank settlement talk about intentions regarding the Occupied Territories, the West Bank in particular.

Now, back to Lebensraum. Spot said that Lebensraum, ethnic cleansing, and yes, genocide, amounted to the same thing. Spot also said that the Israelis intended to cleanse the Occupied Territories of Palestinians in order to, as the West Bank mayor says, make more room for Israelis: Lebensraum.

In a comment to his post, Spot asked the question: where did Lebensraum come from? Commenter Ep0pEE got it right: Darwinism. It’s how Charles Darwin got blamed for Nazism. But for a little explication of the connection, let’s return to the BBC webpage on Lebensraum:

Ratzel's ideas very much accorded with intellectual fashions in late 19th- and early 20th-century Germany, where various forms of 'Social Darwinism' were prevalent, and where there was a growing concern about the allegedly negative effects of industrialisation and urbanisation. There was also a belief in the virtues of agrarian society and, specifically, of the peasantry. Ratzel's ideas also fitted into the general debate about German imperialism.

*  *  *

Moreover, during the years immediately preceding World War One, the focus of this colonialism shifted from the settlement of overseas colonies to the idea of conquering territory in eastern Europe, and of settling it with German peasants. The leading advocate of this notion was the influential chauvinist pressure group, the Pan-German League, and its associated propagandists.

*  *  *

The final elaboration of Hitler's programme for acquiring Lebensraum occurred while he wrote Mein Kampf during 1924-1925. Essentially, this involved his study of 'geopolitics', that is, the impact of the environment on politics, which provided him with a quasi-scientific justification for the plans he had already worked out.

During his period in Landsberg prison (where he had been incarcerated following the failure of his notorious Munich beer hall coup in November 1923), he read and discussed Ratzel's work and other geopolitical literature provided by a Munich Professor of Geography, Karl Haushofer, and fellow-prisoner Rudolf Hess.

Of course, the leap from Darwinism to Social Darwinism is one that Charles Darwin himself never made; Darwin was a biologist, not an imperialist. There is no small irony in the fact that some of the most fevered proponents of Social Darwinist claptrap — evangelical Christians and the Jewish orthodoxy — are the same ones who deny the existence of biological evolution. [Update: Be sure to read M’s very good comment to this post.]

The Israeli colonists are no different than the proponents of Lebensraum — both suffer from a “chosen people” delusion.

Monday, February 09, 2009

The bug-eyed Captain

Spittle flecked and flush faced, his Admiral Nelson hat askew, he stumps angrily across the bridge, leans over the railing, and screams “Government cannot create wealth.” It must be true, because no less an economic light than Henry Hazlitt told him so. Parenthetically, boys and girls, Spot has a theory that guys with dorky names who undoubtedly got picked on during recess tend to grow up libertarian; we’ll discuss it sometime.

Anyway, Captain Fishsticks is enraged, enraged Spot says, that an inestimable person such as Dave Mindeman had the temerity to disagree with the Captain. Just for the record, so did Spot. Sticks holds his postulate theologically; it is his north star. It is a matter of faith. It is also horse puckey, but we’ll get into that in a moment.

Sticks currently has bunched undies over the existence of a related notion: job creation through financial stimulus by the government. Nope. Doesn’t exist, says Sticks. The sophomoric Sticks says if the government spends a dollar, it takes a dollar from him that he could spend as he wants. It’s simple arithmetic, see?

What if the government invested the dollar on green energy and Sticks would spend the dollar on imported gin? Doesn’t matter, says Sticks; maybe I’ll get cirrhosis of the liver and have to hire a phalanx of doctors. [Spot made up the example, but he thinks it’s illustrative.]

1101651231cov_white Sticks real problem is, of course, a paralyzing fear of John Maynard Keynes. Here’s what Robert Reich said in Time magazine about Keynes (at the link):

Born in Cambridge, England, in 1883, the year Karl Marx died, Keynes probably saved capitalism from itself and surely kept latter-day Marxists at bay.

*  *  *

Yet Keynes' largest influence came from a convoluted, badly organized and in places nearly incomprehensible tome published in 1936, during the depths of the Great Depression. It was called "The General Theory of Employment, Interest and Money."

Keynes' basic idea was simple. In order to keep people fully employed, governments have to run deficits when the economy is slowing. That's because the private sector won't invest enough. As their markets become saturated, businesses reduce their investments, setting in motion a dangerous cycle: less investment, fewer jobs, less consumption and even less reason for business to invest. The economy may reach perfect balance, but at a cost of high unemployment and social misery. Better for governments to avoid the pain in the first place by taking up the slack.

*  *  *

Even [during the Depression], Keynes had a hard sell. Most economists of the era rejected his idea and favored balanced budgets. Most politicians didn't understand his idea to begin with. "Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist," Keynes wrote. In the 1932 presidential election, Franklin D. Roosevelt had blasted Herbert Hoover for running a deficit, and dutifully promised he would balance the budget if elected. Keynes' visit to the White House two years later to urge F.D.R. to do more deficit spending wasn't exactly a blazing success. "He left a whole rigmarole of figures," a bewildered F.D.R. complained to Labor Secretary Frances Perkins. "He must be a mathematician rather than a political economist." Keynes was equally underwhelmed, telling Perkins that he had "supposed the President was more literate, economically speaking."

As the Depression wore on, Roosevelt tried public works, farm subsidies and other devices to restart the economy, but he never completely gave up trying to balance the budget. In 1938 the Depression deepened. Reluctantly, F.D.R. embraced the only new idea he hadn't yet tried, that of the bewildering British "mathematician." As the President explained in a fireside chat, "We suffer primarily from a failure of consumer demand because of a lack of buying power." It was therefore up to the government to "create an economic upturn" by making "additions to the purchasing power of the nation."

Yet not until the U.S. entered World War II did F.D.R. try Keynes' idea on a scale necessary to pull the nation out of the doldrums — and Roosevelt, of course, had little choice. The big surprise was just how productive America could be when given the chance. Between 1939 and 1944 (the peak of wartime production), the nation's output almost doubled, and unemployment plummeted — from more than 17% to just over 1%.

So, who are you gonna believe, Sticks or your lying eyes?

But back to the proposition that government cannot create wealth. Spot has cited this article several times before, but it’s a good one: It Takes a Village to Make a Millionaire:

A 2004 report, "I Didn't Do It Alone: Society's Contribution to Individual Wealth and Success," spotlights successful entrepreneurs and concludes that the myth of self-made success is destructive to the social and economic infrastructure that fosters wealth creation.

  • Martin Rothenberg, the son of a housepainter and sales clerk, grew up to become a multimillionaire software entrepreneur.
  • Investor Warren Buffett is the world's second-wealthiest person.
  • Ben Cohen co-founded Ben & Jerry's with no business background and walked away with $40 million when the company was sold years later.

While these three seem typical examples of self-made success, they're not. None of them believes they did it on their own. Like others profiled in the report, they attribute their success to many factors, among them public schools and colleges, government investment in research and small business assistance, contributions of employees, and strong legal and financial systems.

"How we think about wealth creation is important since policies such as large tax cuts for the wealthy often draw on the myth of the self-made man," says "I Didn't Do It Alone" co-author Chuck Collins. "Taxes are portrayed as onerous, unfair redistribution of privately created wealth — not as reinvestment or giving back to society. Yet, where would many wealthy entrepreneurs be today without taxpayer investment in the Internet, transportation, public education, legal system, the human genome and so on?"

But our foolish Captain is not likely to be persuaded otherwise because, as Spot said, he holds his economic views as matter of faith. But you don’t, do you, boys and girls?

Nope, Spotty, not us.

Who (the hell) is Henry Hazlitt?

Or The Portrait of an Economic Autistic.

Or maybe How Clenched Was His Ass?

Or maybe even Henry Hazlitt and Ludwig von Mises: Separated at Birth?

He was a libertarian, right, Spot?

Yes, grasshopper, and the kind of third-rate mind that fourth-rate minds look up to. Which is why, Spot supposes, Craig Westover loves him:

'There is no more persistent and influential faith in the world today than faith in government spending.' So wrote Henry Hazlitt in his classic little book 'Economics in One Lesson.'

Always warming to an anti-gummint manifesto, Sticks continues:

Government doesn't create jobs; government doesn't create wealth. What the stimulus package will do is create inflation, the cruelest form of taxation on the oft-cited "working family" while it garners votes for myopic congressmen who trade the welfare of the unseen many for the benefit of the visible few.

Hazlitt's economic lesson is simple: The art of economics consists in looking not merely at the immediate but also at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. Hazlitt's lesson applied to the federal stimulus package reveals the fundamental fallacies of job-creationists on both the left and the right.

Everything we get must in some way be paid for. Government can't do anything for anyone until it acquires the funds to do so, and ultimately government acquires funds through taxation. Borrowed money plus interest must be paid out of taxes collected. When government simply prints paper money not backed by productivity, the result is inflation, which reduces people's purchasing power and lowers the quality of life as viciously as any tax.

Cutting to the chase: Every dollar of government spending must be raised through a dollar of taxation.

So begins another tripe fest from Captain Fishsticks. Spot finds that Sticks’ concern about federal stimulus spending hurting other people to be especially touching. The libertarian concern for humanity is always enormously affecting.

Henry_hazlitt Spot has to admit that Henry Hazlitt the perfect tin god for the altar in Sticks’ incense-perfumed prayer room. Why, he’s the guy who introduced Ayn Rand to free-market types in New York. He is also credited — or blamed, take your pick — with introducing the “heterodox” Austrian School of economics to an English-speaking audience.

What does heterodox mean, Spotty?

Spot should make you look it up, grasshopper, but he’s in an expansive mood this morning, so here’s one definition:

Not in agreement with accepted beliefs, especially in church doctrine or dogma.

Outside the mainstream, in other words. Armed with a single year of college, Hank set out on a career of journalism and at one point dedicated himself to writing a book to prove that John Maynard Keynes was wrong, wrong, wrong.

Golly, Spotty, he must have learned an awful lot in that one year of college!

D’you think so, grasshopper? Anyway, Hazlitt performed a valuable service for Captain Fishsticks and his fellow travelers at the Minnesota Free Market Institute by reducing economics to simple arithmetic — not only that, but only two operations — addition and subtraction. What one person has, another does not. Very easy to grasp.

Presently, Hank’s ghost has some currency because President Obama’s stimulus plan is mostly — although not as much as it was, thanks to Mitch McConnell and his merry band of Senate Republicans — Keynesian.

At this point, let’s look at where we are now, economically. Here’s a graph whose original provenance is House Speaker Pelosi’s office, but it’s been reproduced several places. Spot copied it out without saving a link, but you can find it easily enough.


Doesn’t look good, does it Spot?

No, grasshopper, it doesn’t. Which is why economists like Paul Krugman say we need to apply some Keynesian stimulus through government spending. Krugman says that even the original Obama plan, now whittled in the Senate, was not enough:

Even if the original Obama plan — around $800 billion in stimulus, with a substantial fraction of that total given over to ineffective tax cuts — had been enacted, it wouldn't have been enough to fill the looming hole in the U.S. economy, which the Congressional Budget Office estimates will amount to $2.9 trillion over the next three years.

This is plainly not your ordinary recession. Uncle Alan or Ben Bernanke aren’t gonna get us out of this one.

Part of the reason that government spending must do it is what is called the liquidity trap, or as John Maynard Keynes expressed it, the liquidity preference. The situation is dire enough that monetary policy has lost all traction. That’s what happened to Japan during its recent prolonged recession: interest rates were cut to essentially zero and it still didn’t help.

We need to think of the 30s and the Depression for our analogy here.

Yeah, Spot, but Roosevelt and the New Deal didn’t get us out of the Depression; the run up to World War II did.

What happened in the build up to World War II, grasshopper?

The government spent a lot of money.

That’s right, grasshopper. Just like today, FDR had the Republicans — the Hoover dead-enders — picking away at him, and it took getting ready for war to get us out.

That was the Mother of All Keynesian Spending, wasn’t it Spotty?

Right again, grasshopper. Only this time, the problem isn’t military preparedness; it’s the fact we neglected everything else: education, transportation, health care, for example.

But isn’t the military stretched thin, Spot?

Yes, but Spot thinks that is a foreign policy problem, not a military spending problem.

Friday, February 06, 2009

Happy Birthday, Mr. President

In honor of Ronald Reagan's birthday, we offer the following from the one and only Kirk Anderson, whose "Banana Republic" is now available.

Thursday, February 05, 2009

Gallows humor at Drinking Liberally

stylized 331 Club - DL We will meet tonight at our regular time, six to nine or so, at the 331 Club in northeast Minneapolis. Tonight is Economics Gallows Humor Night, so bring your favorite story of smiling through the pain. One of Spot’s favorites from Russia in the immediate post-Soviet-breakup era:

Q: What is the stage between communism and capitalism?

A: Alcoholism.

See you tonight.