Wall Street Sock Puppets
The lead story in the New York Times this morning carries the breathless headline “Wave of Debt Payments Facing U.S. Government”. It could have been written by the head of the government bond trading desk at Goldman Sachs, and yet the byline contains the name Edmund Andrews, supposedly one of the savvier economists writing for the Times. Here again, the Establishment lackeys in the Press are carrying the water for Wall Street and the big bond holders (PIMCO’s Bill Gross is quoted talking about storing nuts for the winter). Not until the 12th paragraph of his story does Andrews drop this little morsle.
So far, the demand for Treasury securities from investors and other governments around the world has remained strong enough to hold down the interest rates that the United States must offer to sell them. Indeed, the government paid less interest on its debt this year than in 2008, even though it added almost $2 trillion in debt.
The government’s average interest rate on new borrowing last year fell below 1 percent. For short-term i.o.u.’s like one-month Treasury bills, its average rate was only sixteen-hundredths of a percent.
As I have been saying for months, the notion that inflation (and higher interest rates) is just around the corner is a complete fantasy. Unfortunately it is a fantasy that seems to have invaded the West Wing of the White House, with word that Obama’s State of the Union address will focus on reducing the deficit. The President gave a hint of this last week when he noted “that if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession.”
Maybe the President should look at this map of the growth of unemployment (which doesn’t even include the latest horrible numbers) before he decides to put us into a second Great Recession thanks to the Wall Street Establishment’s (fronted by Larry Summers) bad advice.
Why is the middle of the country resistant to that darkening veil?
len
November 23, 2009 at 8:35 am
Farmers don’t go on unemployment
Jon Taplin
November 23, 2009 at 9:40 am
That was my guess. Thinner population too.
We used to grow cotton. Now we grow missiles. Curses, foiled again!
len
November 23, 2009 at 10:42 am
Sock Puppets? Of course not!
Lord Dimon shifts his ‘capital’ from NYC to his conquered territory DC and summons the President’s chief-of-staff to pay homage.
How long before Obama himself is summoned?
Seth
November 23, 2009 at 11:07 am
I should call attention to the date line on that article : Published: July 18, 2009. We can all breathe a sigh of relief that Rahmbo doesn’t have the JPMC board on his calendar for today … as far as we know.
Seth
November 23, 2009 at 11:10 am
I may have misinterpreted Gross’ position, but I didn’t think he was saying the risk came from the extraordinary number of outstanding T-bills (and, I assume, the possibility that holders would ask to redeem them en masse).
Rather, he was observing the wave of Soc. Sec. entitlements that would be coming due, and how challenging it would be to meet them with an economy as anemic as the one shown in the map here.
The point, I believe, is that the national deficit is something of a canard, as it doesn’t include massive obligations like Social Security – even though the economy itself must make room for them.
Alternately, the deficit is like the truth hiding in plain sight, refusing to account for these ‘obligations’ because, legally, they’re not obligations at all. Congress can, in fact, cancel them in full with no notice, and no repercussions beyond the (obviously massive) political fallout.
(In fact, I believe this precise line of reasoning was used by the previous administration when managing the bad optics caused by their own spike.)
As a result of this colossal fudge, we seem to have a very real political obligation that no one wants (or needs to) account for as an existing financial obligation.
How can the maintenance of this shell game be a good and helpful thing?
Alex Bowles
November 23, 2009 at 11:53 am
Remember what the “game” is.
“Object: The limited number of actual ‘players,’ starting with multiple advantages assigned by genetic and birth-accident lot, apply their skills to personally and individually, and by interlocking effort, Win Big in order to Live Large, by raping the present and mortgaging the future and grabbing everything they can today, in the knowledge that at some point there may or may not be a collapse or prosecutions but that the Gravy Train must eventually run out of combustibles to make the steam and smoke and hot air that propel the bubbles they soar upon, because that’s the kind of people they are, that’s their training and intellectual and spiritual depth, and their ‘careers’ are prolonged by the invisible covering fire laid down by the dopey wannabees in the next stories below in the jungle canopy. And knowing that personal death is the only real “Game Over” endpoint, and beyond that there’s no guessing about Heaven and Hell but there’s an end of any possible consequences and retribution and restitution here on Earth. In this game, to be alive at the end of play (when no more real assets or Real Wealth or potential to recover are left, is to lose.”
It’s neither good nor helpful, but neither of those items are within the stack of “values” cards on the game board.
Roll them bones! Spin the spinner! Momma wants 1,287 pairs of new shoes, and I want a new Ferrari!
(Speaking of which, saw a last-year’s Ferrari California convertible driving around at the local supermarket. Mr. Wonderful at the controls and consulting his personal what-ever device, Babe-a-Luscious in the passenger seat. Yuks for a few of us who were paying attention, as the dude hung up on a speed bump. Love it when he steps out, looking like an Italian-loafer-shod deer in the headlights and scratching that expensive coif and rubbing that manly chin implant with the 6:30 shadow on it. Babe has arms crossed and brow wrinkled and lower fool-injected lip pouted out. Fade to shades of gray.)
JTMcPhee
November 23, 2009 at 12:53 pm
Flash forward one year later when the guy is still driving the same car (and it’s looking a little rough around the edges); sportin’ the same babe (who, for lack of plastic surgery/spa day fundts, etc. is also looking rough around the edges); and is inside the supermarket marvelling that the price of a gallon of milk (a little less than $2 today) has more than doubled and so has the price of gas and he’s wondering which to give up. Hey, I can dream, can’t I?
Amber in Albuquerque
November 23, 2009 at 2:07 pm
The phrase of exclusion I used to hear in business is “He is not a player”, meaning in the deal that was about to go down this person is purposefully excluded even if he is the golden goose source. It’s a game the frats played on the innovative indies.
In almost every case, unless they replace the innovator with a talented copycat, the deal fails typically at the point of transition when the other party to the negotiation simply rips off the first team by stealing the innovation. The first team can’t defend it because a copycat can’t extend it so once the bag is opened, the other team peers in, takes a snapshot, raises the JollyRoger and is off to the races. The legal defense being more expensive than the damages done, the first party folds and goes back to the innovator explaining the new deal they are about to make.
It is this kind of business that produced the snark the kids have toward the baby boomers and the baby boomers toward the greatest generation + 10. Unfortunately because of access to capital it’s just a waiting game.
The US is still riding the backwash of the investments in innovation of the 50s and 60s. Failures to keep investing in innovation and instead investing in investing ensures that in about 15 years, the US will no longer be the world’s powerhouse of new ideas in technology whatever else may happen in other parts of the culture. Even in entertainment such as the movie industry, forward thinkers are looking to deals with India to get fresh work and reduce costs. Once again, same game, different players.
len
November 24, 2009 at 6:53 am
It’s strange – in my personal life, I feel okay. But only because I’ve already shifted my own expectations quite significantly, and am now beginning to operate from – and build upon – a conceptual foundation I could not have really imagined, even five years ago.
I cannot claim that the shift was pure foresight. Virtue borne of necessity was more like it, stemming – as it did – from events I now regard as having been remarkably fortunate.
If it took some time to develop this perspective, it’s because making the shift meant taking a serious financial hit. It’s still very much two steps back before more to go forward thing, and I can understand why few would do it without serious prompting.
The upside (which is now becoming apparent) is in a sense of the new direction being appropriate to the moment, and therefore, one that will anchor new growth, as opposed to one that devoted energy to preserving existing margins against a steadily rising tide. And for the first time, I’m actually seeing possibilities greater than those I once imagined, but had to leave behind.
In other words, having started my own process of recalibration and recovery well before the Big Crash hit, I feel that I’m already on the other side of this thing, and am entirely optimistic about my own prospects. Even if my accounts are low, and my margins are thin, they’re now moving in the right direction.
This is in very stark contrast to my sense of our political direction. There, I see none of the painful reckoning that I was both pushed towards, and fairly accepting of. As a result, there seems to be a crisis of legitimacy the likes of which I’ve simply never experienced – even in the very worst moments of the Bush administration.
At least then, people who were appalled had the sense that violence was being done to something that was otherwise sound. But now, it seems that concern has extended to the system itself, and not just for reasons that can be attributed to vandalism by 43 & Co.
Falling down is okay, as long as you maintain confidence in your ability to get back up and start again. The sickening part of watching Obama (not) respond to the financial crisis and (not) lead the health care debate is recognizing just how catastrophically bad Congress has truly become – and that neither party is even marginally better than the other.
To wit, Gore called his critique of the Bush administration, and the broader set of cultural forces that propped it up, as The Assault on Reason. Yet, an equally savage (though much quieter) attack is being staged from the left – specifically from within the groups that control K-12 curriculum design.
This is a profoundly left-leaning crowd, and one that lives at the very core of the establishment that depends to enormous degree on Democratic legislators for support (and which, in turn, supports them to a nearly unparalleled degree).
Here, a “sociologically correct” agenda has been the alpha and the omega in all they do. For a long time, math was stubbornly resistant to the subordination they’d managed to exercise elsewhere. But eventually, that changed, and since then, there have been increasingly aggressive and devious attempts made to protect the development of math curricula from actual mathematicians. And unlike those fending off creationism, people protecting math are on the outside looking in.
As dismayed as I am about the particulars of the topics du jour, the link above (which concerns an assault on reason from the left) seems far more depressing, as it suggests that, in a highly polarized political climate, there’s no room for a public common good.
Instead, in a world where anything can be politicized, everything gets politicized. Casualties include the most elemental aspects of our ability to think.
A friend who worked at NASA pulled his kids from school and taught them at home, in the company of children of like minded colleagues because he was so dismayed at what the forces cited in the link above managed to do to basic math education.
And this isn’t even science we’re talking about. Forget about the religious concerns of stroppy creationists. This is basic math that’s getting violated – wholesale – by left-leaning ideologues who – ironically and unwittingly – have allowed their own assault on disciplined thought to pave the way for their opponents to make hay, while simultaneously diminishing their capacity to move away from this error.
The result is stupid squared.
In the same way that autocrats on the left and right converged on the exact same forms of oppression in their trajectories towards ‘purity’, the American left and right are converging on the exact same forms of destruction as they battle for ’supremacy’.
Choosing between them is like deciding whether you’d rather die of a fever or hypothermia. And no, the ‘compromise’ position between dumb and dumberer isn’t smart. The real solution is a pox on both their houses.
I know that some criticize those who reduce their ambitions to making so much money that they can effectively buy their way out of the system (gated communities / private schools / medical tourism) but I’m starting to think that this is not actually the cop out it appeaser to be – not when participating in the system means adding to the strength of people who are doing nothing but harm.
It’s far better to raise children that haven’t been crippled by a thoroughly discredited public education. After all, somebody is going to need to clean up the mess when the violent shitstorm of Boomer left / right politics finally subsides. When it’s hippies vs. fundies, no one wins except those who profit from endless contention between the congenitally thoughtless and protesty mobs of impressionable and bullying idiots. Whether we like it or not, those are the groups that provide the lens through which public discourse is seen. FOX vs. MSNBC.
In other words, the generation that launched the culture wars may be the one that doomed the American Experiment to failure. The politics are that toxic, and the options are that limited. Meanwhile, the economy itself is in tatters, and there’s nothing that passes for accountability.
In a situation like this, you do well to keep your kid’s development out of the public sphere, and your kids would do well to keep their assets portable, preserving their chances of becoming productive in countries that haven’t gone out of their way to institutionalize stupid, and ‘restore’ medieval standards to governance and inquiry.
This isn’t to say you just opt out. Rather, you wisely recognize the natural limits of government in general and the violent toxicity of politics today, and don’t trust your own health and happiness – or that of your children – to institutions that don’t reflect an appropriate sense of humility and dismay.
In other words, you feel comfortable saying – even to your left leaning friends – that the idea of public education is meaningless when the practice is in such disarray. And it’s not because people are opting out, but because the people who run it won’t let any daylight in.
The same is true of every so-called public institution that has aligned itself (willingly or otherwise) with one side or the other in the left / right culture wars.
We need new venues – the kinds of places where people can come from a variety of backgrounds to calmly detoxify. And yes, these are places that will need their own sources of power and light. These are venues where religion is about your own deal with mortality, and politics are focused on producing a legislative independence that America has always promised, but never quite delivered.
Alex Bowles
November 23, 2009 at 4:15 pm
I went and read that article and the thing that struck me immediately was the author (Sandra Stotsky) appears as liable as many to make typical mistakes about mathematics.
Complaining that being 25th out of some ill defined 30 countries illustrates a failure of a mathematics curriculum is not a good example of logic through use of statitics.
If it’s the worlds richest 30 countries and their standards are all adequate being 25th is of no consequence.
There is no context to the statistic and it’s meaningless.
The rest of the article does little to rise above anecdotes either. It’s doesn’t seem a good example of failure (except as itself) to base arguments on.
Fentex
November 23, 2009 at 5:22 pm
I’m happy to say (again) that my youngest son is in a fantastic public school, San Dieguito Academy, in the suburbs of San Diego. That’s after a couple of really good years at another, Earl Warren Middle School…same neighborhood. His public education there has been better than his last two years of very expensive private school here in Santa Cruz.
Don’t slam them all… And maybe don’t criticize unless you’ve got a school aged kid and you really know the ins and outs of it all. The schools are a really easy straw man target.
Rick Turner
November 23, 2009 at 4:23 pm
@RT – the link I provided indicated that a mix of quality and mediocrity may by subject to a particular initiative that would diminish this discrepancy, and not in the right direction.
And no, there’s no sense in general condemnation – especially when the object is so sprawling and diverse that no anecdote goes without an opposite somewhere.
But the exceptions are not the point. The real issue is that, as the likelihood of decent education drops, the certainty of cumulative decline accelerates, and distinctions between intellectual have and have nots only sharpens, then amplifies by way of the economic differences that result. The result is a steady decline in our global standings with regard to basic capacity for focused logic and reason.
That’s the point made by the UCB Academic, who noted that the institution must respond to the mean, not the exceptions, and that what he was seeing on the horizon was, potentially, devastating.
The larger point is the presence of a highly ideological concentration in a very influential position. It’s as toxic as having hardline partisan politics reshaping who’s in and out the DoJ.
Again, they don’t get everyone, and three cheers for those who manage to escape. Add one more if you do so without paying for the same thing twice by abandoning the tax-based solution for a private alternative.
At the same time, it’s folly to think that the public good is going to be served by any institution with leadership that is strongly identified with one political party in particular – especially when that party is, in turn guided by ideologues who view the other side as a fundamentally opposed enemy.
Our political process is supposed to be a moderating one, so that by the time anyone is actually in charge of anything, they’ve become suitable accountable to people across the spectrum. But all the structural deficiencies that have shifted an unrepresentative degree of political power to the extremes have hamstrung this moderating force considerably.
The result is curriculum shaped by guys like Eric Gutstein.
And again, it’s not as though we need more voices “from the right”. What we need are standards defined by people who see math as an essential and non-political foundation for a broad range of disciplines, not something which should be subordinated to “the development of students’ sociopolitical consciousness, (and) their sense of social agency.”
I’m not making that up, by the way. That’s an actual quote from this Gutstein dimwit, who goes on to say he’s “also” interested in developing student’s “mathematical understanding and competencies”, as though this were an afterthought or an extra added bonus.
All this is coming from the Teacher’s College Record, which bills itself as “The Voice of Scholarship in Education”. So, you know, mainstream thinking within this milieu.
The notion that math has to run through a “social justice” filter like this is as offensive as the idea that biology textbooks must be “approved” by the creationists – especially when (in both cases) it’s the material getting adapted to the ideology, and not vice versa.
Alex Bowles
November 23, 2009 at 5:51 pm
Alex, I’m with you on most of this (brilliant, as usual). One problem I see is that while a society of intellectual haves/have nots may ensue, it is still highly likely that many intellectual haves will get screwed by the system. I’m doing my best to ensure that my children are intellectual haves by supplementing their public education here at home. But JTMc is also right, they may end up as intellectual haves but economic have nots because of the old birth lottery. In good colleges, for the best jobs, etc. mediocrity with money and connections will continue to trump merit and hard work. They have probably since the 50s, early 60s…there is no more ‘October Sky’ with coal miners’ kids making it to NASA. Too many outside forces are at work consolidating power in the hands of the few and keeping it out of the hands of the masses. Without even a glimmer of hope to obtaining a better future ‘rednecks who read’ (my own particular subspecies) will become extinct (which is, I firmly believe, what the oligarchs want…stupid poor people who are content eating McDonalds while watching American Idol).
Amber in Albuquerque
November 23, 2009 at 6:11 pm
You had me at “San Diego.”
Sigh.
Dan
November 24, 2009 at 1:48 pm
In light of my earlier comment about Jamie Dimon “inviting” Rahm Emanuel to a JP Morgan Chase board meeting in DC, here’s a choice rumor for the mill: Geithner Out, Dimon In?
Is JPMC about to out-maneuver the Gold Men of Sachs? But Morgans traditionally prefer to govern from their homes, not the Federally provided palace on the back of your $10 bills. So Dimon might not choose to take on all that responsibility. Of course he probably could get a huge tax savings out of it like Hank Paulson did.
Seth
November 23, 2009 at 4:39 pm
The best school is the love you get at home.
bernard
November 23, 2009 at 5:10 pm
Reason, civility, comity, empathy, competence, governance, fiduciary and a bunch of others — all consigned to the Dead Letter box.
My kids are way past “school age,” and the grandkids aren’t on-line yet. But I do have friends with kids in schools both public and private. That link from Alex on math failures includes many repetitions of the word “educator,” and damn few of the word “teacher,” and even less of the notions of teaching that I was lucky enough to benefit from back in the early ’50s and ’60s.
My first-grade teacher, Mrs. Heaton, was fired by fucking “educators,” hot-degreed propounders of their own special new system of curricula/ae/ae/um/a that they had to come up with to persuade the old guys to grant them a Masters or Ph.D. She was fired, a year or two short of retirement, for refusing to toss out phonics and that other old-fasioned pedagogy in favor of “see’n’say” and K-A-T-is-close-enough and the multiplication tables were too hard for little Jonnie and Jill,, so open your books to the chapter on “set theory.”
Mrs. Keller, the stern, multicompetent master of little local Greenbrier School, brooked no foolishness from the students, none from the “educators,” and had the parents almost completely in hand by force of her personality and the quality of actual learning that went on in her domain. And so on up the line to high school, with a side trip in sophomore year through one of the “student-centered, self-teaching, proctored-only ‘advanced algebra’” pedagogical suppositories of which there are so many on the market today. You got a 3-foot high stack of 8 1/2 x 11 pages, a 3″ 3-ring binder with a “special self-teaching slider” clipped in, you picked up a sheaf of pages and started reading. The slider was a couple of inches wide and covered up the ‘workings’ of the problems you were supposed to figure out all on your little own. No asking Mrs. Reba, who taught me and a bunch of other jock knuckleheads geometry the year before, who merely stood or sat, akimbo and aghast and abased, “proctoring” our almost universally feeble efforts to figure out quadratics and all that shit, except for Marty and the Twins, who zipped through the material in about three weeks.
The rest of us would puzzle for a bit over a problem, slip the slider down a bit to peek at a line or two of the answer, and maybe figure it out, or just go on to the next without that brick in the structure. As the difficulty and frustration and deadline-driven demand to finish the whole stack of paper before the semester ended grew, down went the slider, copied over was the answer, and on to the next “problem.” I think I got a D in that class, in a time when there was no appeal to the good nature of the “educator” to take into account one’s home situation or special circumstances or whining about blows to “self-esteem” to persuade the educator to bump it up for “extra credit” or to protect little Jackie’s well-earned 4.0 and chances to get into Harvard and thus add another puff to the over-inflated world of grades and the school’s rep for great college placement. Not even the ghost of a thought of threatening to tell the principal the teacher “touched inappropriately” if the grade was not jacked up.
And that was about the time, in 1962, when certain parents and church and political groups, convinced of the rectitude of their world-view and religious dogma over all others, started packing the School Board and doing all the other shit they thought might lead to the Triumph of The True American Way Of Life Under God As They Knew It Should Be.
I’m all for bringing back the McGuffey Readers, which if stuck to through the 8th grade at least ensured a modest competence in reading, spelling, composition, math through algebra, CIVICS and history and stuff that makes a nation out of a collection of competitive consumers.
I have to ask, I don’t know, is it accurate to say that “the left” has seized the educational citadel via the Trojan horses of “self-esteem” and “serial new curriculae?” Or is it just the bureaucratic and puritanical and busybody impulse, the we-know-what’s-best-for-everybody-else-ism, the this-is-how-I-rise-in-the-septic-system-ism that no”side” has any exclusive claim to?
Even when the nation’s population was 30 million instead of 307 million, there were all the knots and clumps of cluster-fuckers doing rent=seeking and seeking domination. But in my readings in history, there seemed to be kind of a common language and some set of agreed values and maybe even an unvoiced but understood “values statement” that kind of kept things together — in my usual flip to the physiology page, a set of homeostatic principles, healthy negative-feedback mechanisms, buffering, and a functioning immune system. Something has happened to overwhelm the ability of the nation, as a super-organism, to keep itself within the survivable range of temperature and acidity and nutrition and toxicity. Humans haven’t “evolved” anywhere near as fast in their moral and spiritual nature as would be needed to keep up with the cancer cells and viral and bacterial infections that are eating our flesh and blowing up our brains.
“Small and simple” seems to be where we, if we survive the next few decades, have to go. Of course, that ain’t a-gonna happen, now is it, Rev. Falwell?
This nation was born in the Age of Reason, and my bet is that it will die, painfully, in this Age of Unreason.
But hey, the moon is up and waxing, the night birds are churring, the dolphins are chuffing and spalshing in the fairway, and this is a pretty good Shiraz for $9 for the 1.5 liter bottle.
JTMcPhee
November 23, 2009 at 5:31 pm
We’re living in a Petri dish and it’s about to go solid black. Except, of course, for the North Slope. At what point does this turn from the Great Recession to the Great Depression iI? My guess is when the consumer credit and commercial real estate bubbles pop. That should happen in the next two to three quarters.
Is Obama the new Herbert Hoover or the new FDR?
Jim Flynn
November 23, 2009 at 9:41 pm
So do I buy guns and ammo with my next Social Security check?
Rick Turner
November 23, 2009 at 11:22 pm
We’ll save you Rick. Bring your geetars and head for the hills.
.
Amber in Albuquerque
November 24, 2009 at 6:55 am
Sadly, yes.
Roman
November 24, 2009 at 7:10 am
Same thing here they are using banks to do all kind of weird deals, today a big scandal broke out and lots of “friends” of the government are implicated in massive and corrupt scheme in the name of socialism the same way it happens in Wall St in the name of capitalism. There is no escape we are surrounded by a bunch of pirates with poker faces with well rehearsed speeches on social justice …while they stuff their pockets. This is bullshit.
bernard
November 24, 2009 at 4:22 am
I’m not sure if knowing this isn’t exclusively an American problem is comforting or not…
Amber in Albuquerque
November 24, 2009 at 6:56 am
Comforting or not, Amber, we are heading either to a massive melt down or a show down. Again I am a layman with no political interest of any kind. This is total bullshit because we can’t stop greed and avarice with nice speeches or futile accusations. Disgusting indeed.
bernard
November 24, 2009 at 9:35 am
Well, the check is in the mail, so let’s see…9 mm auto or .38 special S&W revolver?
Rick Turner
November 24, 2009 at 10:01 am
Oh honey, you’re gonna need more firepower than that if push really comes to shove. You’re taking a knife to a gunfight w/those options.
Amber in Albuquerque
November 24, 2009 at 11:33 am
We have some left over TOWs if you can handle wire guided.
len
November 24, 2009 at 10:08 am
I know there is not much you can do then just sit and watch it happen in front of your eyes.
bernard
November 24, 2009 at 11:00 am
What makes it worse is how many of us saw this coming and despite all the noise we made, still got drowned out by the greedy bastards who caused the problem.
Amber in Albuquerque
November 24, 2009 at 11:33 am
Let’s remember all the sheeple who were happy to go along for the ride to the pens at the slaughterhouse, and follow the Judas Goats up the chute to the abbatoir, thinking that all that free feed and promise of more to come had no costs and no consequences…
I like the Gary Larson “Far Side ” cartoon too: Sad-looking dog sitting on the driveway next to the car, the other dog in the back seat bouncing up and down with excitement, yapping “I get to go to the vet and get TUTORED, and YOU DON’T!”
JTMcPhee
November 24, 2009 at 1:07 pm
Arrogance is at the root of all evils and this a good example to reflect on for a while.
Through the first half of this decade, Meyer repeatedly warned Summers and other Harvard officials that the school was being too aggressive…
bernard
November 30, 2009 at 7:47 am