Newt accused of playing the “Race Card”

For more, see this Think Progress article.


Update

Laura Flanders addressed Gingrich’s performance in South Carolina:

South Carolina. It’s going to be the state that keeps on giving to President Barack Obama. I’m not talking votes; I’m talking hate. Newt Gingrich’s primary win has the pundits praising his “debating skills,” but the less prudish among us can be clear: Gingrich’s skills aren’t rhetorical; they’re racial. He’s feeble at striking down his opponents’ arguments; what he’s great at is digging up his audience’s racial rage. It worked for the former Speaker in South Carolina; it’ll work against the Democrats all year.

Quote of the day

The “Report Abstract” for the “Growth in the Residential Segregation of Families by Income, 1970-2009” study tells that:

As overall income inequality grew in the last four decades, high- and low-income families have become increasingly less likely to live near one another. Mixed income neighborhoods have grown rarer, while affluent and poor neighborhoods have grown much more common. In fact, the share of the population in large and moderate-sized metropolitan areas who live in the poorest and most affluent neighborhoods has more than doubled since 1970, while the share of families living in middle-income neighborhoods dropped from 65 percent to 44 percent. The residential isolation of the both poor and affluent families has grown over the last four decades, though affluent families have been generally more residentially isolated than poor families during this period. Income segregation among African Americans and Hispanics grew more rapidly than among non-Hispanic whites, especially since 2000. These trends are consequential because people are affected by the character of the local areas in which they live. The increasing concentration of income and wealth (and therefore of resources such as schools, parks, and public services) in a small number of neighborhoods results in greater disadvantages for the remaining neighborhoods where low- and middle-income families live.

From austerity to rebellion?

Robert Skidelsky, a Keynesian political economist, thus addressed the scourge of deficit mania:

This, the official doctrine of most developed countries today, contains at least five major fallacies, which pass largely unnoticed, because the narrative is so plausible.

First, governments, unlike private individuals, do not have to “repay” their debts. A government of a country with its own central bank and its own currency can simply continue to borrow by printing the money which is lent to it. This is not true of countries in the eurozone. But their governments do not have to repay their debts, either. If their (foreign) creditors put too much pressure on them, they simply default. Default is bad. But life after default goes on much as before.

Second, deliberately cutting the deficit is not the best way for a government to balance its books. Deficit reduction in a depressed economy is the road not to recovery, but to contraction, because it means cutting the national income on which the government’s revenues depend. This will make it harder, not easier, for it to cut the deficit. The British government already must borrow £112 billion ($172 billion) more than it had planned when it announced its deficit-reduction plan in June 2010.

Third, the national debt is not a net burden on future generations. Even if it gives rise to future tax liabilities (and some of it will), these will be transfers from taxpayers to bond holders. This may have disagreeable distributional consequences. But trying to reduce it now will be a net burden on future generations: income will be lowered immediately, profits will fall, pension funds will be diminished, investment projects will be canceled or postponed, and houses, hospitals, and schools will not be built. Future generations will be worse off, having been deprived of assets that they might otherwise have had.

Fourth, there is no connection between the size of national debt and the price that a government must pay to finance it. The interest rates that Japan, the United States, the UK, and Germany pay on their national debt are equally low, despite vast differences in their debt levels and fiscal policies.

Finally, low borrowing costs for governments do not automatically reduce the cost of capital for the private sector. After all, corporate borrowers do not borrow at the “risk-free” yield of, say, US Treasury bonds, and evidence shows that monetary expansion can push down the interest rate on government debt, but have hardly any effect on new bank lending to firms or households. In fact, the causality is the reverse: the reason why government interest rates in the UK and elsewhere are so low is that interest rates for private-sector loans are so high.

As with “the specter of Communism” that haunted Europe in Karl Marx’s famous manifesto, so today “[a]ll the powers of old Europe have entered into a holy alliance to exorcise” the specter of national debt. But statesmen who aim to liquidate the debt should recall another famous specter — the specter of revolution.

Newt wins South Carolina primary

Gingrich’s comfortable victory over his rivals ought to slow the Romney train for a week or two.English: Newt Gingrich at a political conferen...

Quote of the day

Seal of the United States Department of Justice

Recently, the American Department of Justice closed the file-sharing site Megaupload while also seizing its assets. It took these actions on the basis on an indictment for and accusation of piracy, not a conviction for committing a crime. This action by the Department of Justice, coming as it does days after the SOPA/PIPA blackout, raises due process concerns, as Megaupload’s counsel asserted here. Glenn Greenwald drew this conclusion from the event, its political implications and from the legal horizon of which the Megaupload closure is a conspicuous part:

The U.S. really is a society that simply no longer believes in due process: once the defining feature of American freedom that is now scorned as some sort of fringe, radical, academic doctrine. That is not hyperbole. Supporters of both political parties endorse, or at least tolerate, all manner of government punishment without so much as the pretense of a trial, based solely on government accusation: imprisonment for life, renditions to other countries, even assassinations of their fellow citizens. Simply uttering the word Terrorist, without proving it, is sufficient. And now here is Megaupload being completely destroyed — its website shuttered, its assets seized, ongoing business rendered impossible — based solely on the unproven accusation of Piracy.

Daily, it seems, Americans can watch the rule by law replace the rule of law, the prerogative state replace the normative state [Fraenkel, 2006 (1941)].

Sha na na na, sha na na na na….

Mark Weisbrot shows that the America’s recovery from the Great Depression was hardly a recovery at all:

The U.S. recession officially ended in June of 2009, but most Americans don’t feel like we are in a recovery. That’s because it’s been a weak recovery, with the size of the economy barely bigger today than it was four years ago, when the recession started.

Since America is a rich country, it is not growth itself that matters most but employment and, of course, the distribution of income. And the employment numbers are just terrible.

The simplest measure is the percentage of the working-age population that is employed. That peaked at 63.4 percent in December 2006. It plummeted to a low of 58.2 percent last July and is hardly different now — 58.5 percent in the latest figures.

What this means is that we need about 10 million jobs to get back to full employment. There was a lot of happy talk earlier this month when the December job numbers were released. They showed 200,000 payroll jobs added in December, and the unemployment rate falling to 8.5 percent. Adding even 200,000 jobs a month is not very good for an economy that needs at least 90,000-100,000 jobs a month just to keep up with the growth of the working-age population.

And as my colleague Dean Baker pointed out, the latest jobs numbers have probably been over-optimistic. Realistically, he notes, at present trends of job growth we will not hit full employment until 2028. This would be an economic failure of disastrous proportions.

Inequality illustrated

NPR hack apologizes for Wall Street

Doug Henwood of Left Business Observer takes the ‘liberal’ network and Adam Davidson to task for their myopia and, perhaps, opportunism.

Eastman Kodak files for bankruptcy

The New York Times delivered the bad news this morning:

Eastman Kodak, the 131-year-old film pioneer that has been struggling for years to adapt to an increasingly digital world, filed for bankruptcy protection early on Thursday.

The American icon had tried a number of turnaround strategies and cost-cutting efforts in recent years, but the company — which since 2004 has reported only one full year of profits — ultimately ran short of cash.

Obama’s two faces

First, impose a difficult and economically irrational austerity on the 99%. The Hill reports:

Top White House officials are warning liberal and labor leaders to brace themselves for President Obama’s budget proposal.

Gene Sperling, director of the National Economic Council, sought in meetings last week to lift the left’s gloom about Washington’s crackdown on spending by promising that the president this year will focus on job creation rather than deficit cutting.

Obama staffers sought to present their budget plan as a glass half full. According to sources familiar with the briefings, they promised that the president will focus on jobs and the economy, instead of deficit-cutting, which dominated last year’s debate on Capitol Hill.

Next, conduct a reelection campaign as a ‘friend’ of the people:

Obama has signaled in recent weeks that he plans to run a populist reelection campaign. He will need to keep liberal activist and labor groups — important parts of the Democratic base — energized for his strategy to work.

One does not need to comment on Obama’s politicking. It speaks for itself.

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