Economy

Post Hoc Fallacy

Wednesday’s Washington Post deserves some kind of perverse award for advocacy journalism—in this case, for advocating the proposition that dire economic consequences will ensue if the congressional Super Committee fails to cut a deal for drastic deficit reduction. This is, of course, one side of an argument.

Those on the other side, including myself, have argued that austerity in a deep recession makes no economic sense and that as a matter of politics, the Obama administration would be far better advised to let the automatic sequester formula take effect, knowing that it would have to be reopened because of Republicans’ horror of deep defense cuts and the expiration of the Bush tax cuts.

Now What?

AP Photo/Seth Wenig

Early Tuesday morning, surprised by a violent police raid on Zuccotti Park, dozens of Occupy Wall Street activists stayed and accepted arrest, a few chained themselves to a tree (which was cut down by police), and others fled, though not all fast enough to escape tear gas. Later that morning, protesters returned expecting the city would yield to a temporary restraining order allowing their camp, but police ignored the order. Tuesday evening, defeated in court, occupiers returned to Liberty Plaza, filing in one or two at a time past watchful police. There were new signs (“Curfew 10 PM”), new rules (no lying down), and a newly urgent question: What’s next?

The Robots Are Coming!

Google, we learn from Monday’s New York Times, has a secret lab in an undisclosed location in the Bay Area where it is developing robots. We don’t know what the Google-oids are working on there, but we do know that the company has developed and built a driverless car that has already traversed 100,000 miles on California roads without getting either a ticket or a scratch.

Bending the Rules

Congress keeps finding new ways to attack farm-bill reform.

Yesterday, the House and Senate released their final appropriations bill for the current fiscal year. Like the House bill passed in June, the bill, which provides funding to the Department of Agriculture, cuts a number of programs. The National Sustainable Agriculture coalition discusses the programs most hurt in a detailed blog post. One of the areas most hurt is conservation: On the whole, programs that help preserve land were cut by almost $1 billion.

Why We Need Occupy Wall Street

AP Photo/John Minchillo

Today—the same day that New York’s Mayor Bloomberg had his cops clear Zuccotti Park—Richard Fisher, the president of the Federal Reserve Bank of Dallas, called for breaking up America’s biggest banks, calling them “too dangerous to permit.” Also today, Warren Buffett, in an interview posted on the Business Wire of Berkshire Hathaway, his company, continued his criticism of American plutocracy. “Through the tax code, there has been class warfare waged, and my class has won,” Buffett said. “It’s been a rout. You have seen a period where American workers generally have gone no place, and where the really super rich as a group increased their incomes five for one in this rarified atmosphere.”

Exit Berlusconi, Enter Uncertainty

AP Photo

It was a busy weekend in Italian politics. The Chamber of Deputies passed the latest round of austerity measures, Prime Minister Silvio Berlusconi resigned, and President Giorgio Napolitano mandated Mario Monti, a respected economist and former EU commissioner, to form of a new government of national unity. The backdrop to all this frenzied activity was the country’s growing liquidity crisis: As Italy, the world’s third largest bond market, saw its borrowing costs rise to unsustainable levels in recent weeks, the rest of the planet could only watch in numb horror, as if observing a slow-motion car crash.

Don't Save Republicans from Themselves

With the Super Committee near collapse, will the Democrats snatch defeat out of the jaws of victory? Republicans, by locking themselves into no new taxes at a time when two-thirds of Americans prefer to tax millionaires instead of cutting Social Security and Medicare, are in a nice pickle.

Over the weekend, Republicans on the Super Committee proposed to trade about $300 billion in net revenue increases for more than $2 trillion in permanent tax cuts. Democrats, mercifully, did not take the bait.

Generation Y Bother

Young adults entering the workforce today think they'll be worse off than their parents—they're not wrong.

(AP Photo/John Minchillo)

The recession officially ended nearly two and a half years ago, in June 2009, but for the generation of young adults who’ve been trying to take their first steps into adulthood, its effects could shape the future for decades to come.

Do Regulations Cost Jobs?

One clear consensus emerged at the Republican presidential debate on the economy last week: government regulations are stifling our economic recovery. "I’ve said I’m going to repeal every single Obama-era regulation that costs business over a hundred million dollars. Repeal them all," Rick Santorum said, to no disagreements from the other candidates who all envisioned a robust recovery once regulations were wiped from the books.

A State of Chaos

How political failures and stagnant institutions brought Greece to the brink of collapse

A protester chants slogans during a protest in front of the Greek Parliament in Athens on Saturday, Oct. 15 2011. About 2,000 protesters turned up at Syntagma Square, outside Parliament, to protest against a new austerity package that is to be voted upon on Thursday. (AP Photo/Kostas Tsironis)
(AP Photo/Kostas Tsironis)

About 2,000 protesters turned up at Syntagma Square, outside the Greek parliament, to protest against a new austerity package agreed to in October.

Occupy Oakland

Each week, the Prospect will be profiling a different "Occupy Wall Street" protest across the country. This week: Oakland.

Rosie the Riveter and the Ironies of Bentonville

When the doors swung open this morning on Alice Walton’s Crystal Bridges Museum of American Art in Bentonville, Arkansas—funded to the tune of $1.4 billion by the Walton Family Foundation—one of its prize possessions was Norman Rockwell’s iconic World War II-era painting of Rosie the Riveter. The painting features a confident, insouciant Rosie on her lunch break, eating a sandwich, with a riveting gun on her lap, a copy of Mein Kampf that she uses as a footstool, and an American flag fluttering in the background.

We're Not in Athens Anymore

The selection of Loukas Papademos as prime minister heralds a new era in Greek politics.

Greek and international media cover the statements of the new Greek Prime Minister Lucas Papademos , centre, outside the presidential palace in Athens, Thursday, Nov. 10, 2011. Papademos was named Thursday as the prime minister of the new Greek interim government, charged with keeping the debt-strapped country out of bankruptcy and firmly in the 17-nation eurozone. After four days of intense political negotiations, the 64-year-old former vice president of the European Central Bank was chosen to lead a coalition backed by both the governing Socialists and opposition conservatives that will operate until early elections in February. (AP Photo/Thanassis Stavrakis)

Greeks, Europeans, and anyone else who knew the score breathed a huge sigh of relief at the news that Loukas Papademos, the former deputy head of the European Central Bank, will be Greece’s new prime minister. His appointment, especially compared with some of the other names that were bandied about during the past few days as candidates for the post, is the best one could have hoped for if—at least if one believes that Greece belongs in the eurozone and that an exit from it, which became an ominously fashionable topic of discussion among Europe’s leaders the last few days, would be a disaster not only for Greece but for the whole euro project.

Obama’s Secret Weapon

Will the electorate blame Congress—not the president—for the sour economy?

(Flickr/DRStarbuck)

Michael Tomasky’s piece deserves a few responses.  He begins with some unnecessary swipes at political science:

Politics is sometimes a science and other times an art. So here we sit, with the election exactly a year away, and the conventional wisdom in the political press is largely driven by the political-science theory of presidential elections and economic determinism: that is, that the results of presidential elections are pretty much strictly a function of economic conditions, and if those are bad (defined by various measures, chiefly the jobless and growth rates), the incumbent will lose.  By that theory, Barack Obama is pretty well doomed. And yet I don’t know a soul who thinks he doesn’t stand a decent chance of winning next year.

Banker's Choice

In this, Monday, Oct. 30, 2006 file photo provided by the Italian presidency, Italian President Giorgio Napolitano, right, shakes hands with Mario Monti on the occasion of the opening of the academic year at the Bocconi university in Milan. Italy's president has unexpectedly named Wednesday, Nov. 9, 2011, as a senator-for-life Mario Monti, the former European competition commissioner who is widely considered to be a top contender for the Italian premiership, now that Silvio Berlusconi has pledged to resign soon. The surprise move Wednesday night could be a prelude to Monti's getting the nod to head the next government. President Giorgio Napolitano's office announced he had chosen Monti, who now runs prestigious Bocconi University in Milan, for the honor. Senators-for-life include notable figures outside of politics and have voting privileges in the Senate. (AP Photo/Enrico Oliverio,Italian Presidency Press office, File)

So Greece has a new prime minister – Lucas Papademos – and Italy looks about to have a new one, too – Mario Monti. To which not just you and I but damn near every Italian and Greek responds, “Who?”

Neither Papademos nor Monti has ever held elective office, or even run for one. Neither has been a minister, sub-minister or even civil servant in one of their nation’s ministries. Neither has developed, or sought to develop, a public following from their careers as economic technicians, chiefly on the European supra-national level. Yet each is about to lead a major nation.

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