The economics crisis

Dean Baker:

In a country with almost 15 million people out of work, it is amazing that any economists still have jobs. This one is their fault first and foremost. Economists are supposed to know about the economy and provide advice on how to avoid disasters before they happen and help us recover from the bad things happen in spite of good advice.

The economics profession has not done well on this simple scorecard. Remarkably, rather than improve their game, economists are now busy dampening down expectations so that the public will not hold them responsible for the state of the economy.


Having failed to prevent disaster, economists are now anxious to tell us that there is nothing that they can do to remedy the situation. The story they are pushing is that unemployment is structural, not cyclical – a refrain now echoed by op-ed columnists. This means that people are not unemployed because of a lack of demand in the economy, but rather they are unemployed because there is a mismatch between the available jobs and the skills and location of the available workers.

In short, there really is no evidence for a problem of structural unemployment. The problem is that because of bad policy, we don’t have enough demand in the economy. If there is any mismatch of jobs and skills, it is between economists’ positions and the people who fill them.

First off, don’t defer your judgment to someone because they’re “an economist” and sound like they know something.  That said, Dean Baker is an economist who has managed to publish a number of books, help draft legislation, and appear on the almighty television on a pretty regular basis despite his tendency to veer from the party line.  In the article quoted above, he links a study done by the Federal Reserve that concluded that economists could not have been expected predict the current financial crisis, citing him as one of the people who did predict it:

One of the first prominent housing pessimists was Dean Baker of the Center for Economic and Policy Research in Washington, who in 2002 wrote that:

“In the absence of any other credible theory, the only plausible explanation for the sudden surge in home prices is the existence of a housing bubble. This means that a major factor driving housing sales is the expectation that housing prices will be higher in the future. While this process can sustain rising prices for a period of time, it must eventually come to an end. (Baker 2002, p. 116).

However Dean Baker and the others that made surprisingly accurate predictions were actually wrong because:

The “Fundamental Theorem of Asset Pricing” implies that the evolution of asset prices is, to a first approximation, unpredictable.

That’s pretty offensive, but it gets even better in a footnote:

[E]conomists both inside and outside academia may have been reticent to make any sort of predictions, for fear of damaging their reputations if they were wrong.

However if they neglected to do so and there was a massive financial crisis, their reputations are just great and they shouldn’t shy away from making policy recommendations that will affect the livelihood of millions.  I’m not sure if it’s outright contempt for people, extreme insularity or both, but this is pretty clearly a problem.   They’ve divided themselves into camps on how to view the unemployment problem, which pushes policy predictions into the future so they can avoid a little embarrassment despite the predictable consequences on the most vulnerable.  It’s very telling that both camps have a point and bad policy could come out of either view though it’s absolutely certain for the ones that believe that the only solution to a “structural problem” is just sort of creating unpeople who are just going to have to use the income they don’t have to buy some bootstraps.

Drain Clogs – 09-14-2010

  • America’s toughest Sheriff, Sheriff Joe Arpaio, roasted a woman alive in the hot desert sun and no one is going to get punished at all.
  • Have you seen that movie Gasland? Well, the Pennsylvania Office of Homeland Security thinks that makes you a criminal and now they’re tracking your movements and sending the information to gas companies. Isn’t it great all crime in Pennsylvania has been solved so now they can focus on what movies you watch?
  • Incessant wingnut whining about another issue (BLACK PEOPLE!!!!!) is causing the DOJ IG to investigate the New Black Panthers non-issue. I’m sure they’ll find just as much as they did on ACORN (that was nothing, btw)
  • Astroturf group FreedomWorks is setting up “DiversiTea“, an attempt to get more minorities at the tea parties than the same five or so people they bus all over the country. You see, gas prices are going up! I expect this will double the amount of minorities in the Tea Party to an even dozen!
  • Former House Speaker Newt Gingrich said Obama may follow a “Kenyan, anti-colonial” worldview.

    “What if [Obama] is so outside our comprehension, that only if you understand Kenyan, anti-colonial behavior, can you begin to piece together [his actions]?

    Newt is undoubtedly speaking to the birther fringe with those comments. I don’t think he really believes Obama was born in Kenya, but Newt wants to be president and is trying to cozy up to the Teabaggers (who HATE him, btw)

  • Speaking of Newt, he has a new video with his wife where they say Islam is the most dangerous thing to happen to America since the sticking your fingers into light sockets fad of 1917. They still hate you, Newt and wife #3.
  • Andrew Breitbart admits he’s tricking people.
  • Besides the Koran events we reported on over the weekend, ThinkProgress has a good list of other events that show how awesomely scary the rhetoric has become. Highlights include burned and pooed on Korans and burned and shot Korans. Still waiting for some confused person to burn a Korn cd…
  • The best Koran event was in Amarillo, TX, where our old friends Repent Amarillo (who still send my fake email account long essays about wrongly interpreted passages of the bible) were going to burn a Koran in an event they didn’t bother to email me about. Passing by was 23-year-old skateboarder Jacob Isom, who snatched the Koran and said “Dude, you have no Quran!” and ran off. Now, we support the right of Repent Amarillo to burn the Koran if they so want to, but this is hilarious. Isom later gave the Koran to a Muslim guy at a nearby rally against the hate by Amarillo Unitarian Universalist Fellowship.
  • Cartoon of the Day:

On this 9-11, here is FreeRepublic burning a cd with a Koran.pdf on it;page=201

Cyber Liberty, member since 1998! At least no dogs were hurt in this incident (unless a dog breathed in the fumes…)

Also some moron burned a Koran at Ground Zero, I don’t know if he’s a Freeper yet or not:

Drain Clogs – 09-10-2010

  • Freedomworks head and Teabagger grifter Dick Armey thinks 3% of voters are dead and voting Democratic.
  • D.C. Douglas has a new video out about the Koran burning:

  • The Republicans are running homeless people on the Green Party to siphon off votes from the Democrats. This guy Steve May was on NPR defending this yesterday and he claimed he was friends with all these homeless people and they were real. He also wants to sell you a bridge in Brooklyn.
  • Arizona governor Jan Brewer can’t debate, but she sure can take $1.5 million from Timothy Mellon, a Wyoming millionaire to help defend her SB1070 law
  • Wifebeating racist cartoonist Mike Lester (who has been featured here as a Cartoon of the Day a few times) has gone all legal threats happy on a fellow cartoonist who dared to call Lester the racist he is!

    lease be aware that your comments are being monitored. Like all our readers, you are free to disagree w/ my cartoons. However, should you libel and or slander me or my newspaper publicly, we will seek legal remedy. We are also in possession of previous blog entries.


    Mike Lester

    Mr. Lester

    re: your hilarious and insane threat to sue me

    I appreciate your alerting me that my comments are being monitored. I am not sure if you are aware of this, but that is generally what people hope happen to their comments when they are posted on a website on the internet. I am glad to hear you are also in possession of previous blog entries. I too have internet access.

    As a professional courtesy, please consider spelling my name correctly when delivering any future baseless and ludicrous threats because your feelings were hurt. As a personal favor, please stop making racist, ignorant and illogical cartoons.

    -August J. Pollak

  • Iowa For Freedom is ticked over the gay marriage in Iowa and is trying to get a bunch of judges yanked. They are even lying about support from former SCOTUS judges to do it.
  • The Koran burning is on-again, off-again, with the tiny church pastor Terry Jones saying he’s not going to do it because the community center got moved, the community center not knowing what he’s talking about, and Donald Trump wandering in. And Fred Phleps is claiming he’ll burn Korans if the other guy chickens out. Who knows??? We’ll see tomorrow if things go up in flames.

    At Politisink, we agree the church has the right to burn the Korans because free speech is awesome, but free speech also gives us the right to call this shenanigan damn dumb. Because it is damn dumb.

  • Wonkette does our job for us (because Wonkette gets paid to do it, while we just update during lunch or after work) and posts a bunch of posts from wackos on Sarah Palin’s Facebook page that disagree with her on the Koran burning.
  • Our friends at have freaked out over the Koran burning, by deleting every post that mentions it and even shutting down chat in an effort to stem the calls for Muslim Final Solutions that are appearing all over the site, probably because they know we’re watching them. Because we are. At the same time, the Resistnet Admins are going to New York with a petition to try to get the Community Center moved.
  • Already read Over the Cliff? Think American Taliban was keen? Enjoy people writing about how the Teabaggers are a bunch of suckers? Than this book (The Backlash by Will Bunch) might be interesting, but I haven’t read it yet so who knows?
  • Being in San Bruno when it explodes is not as fun as you might think. But Tanforan Mall stayed open extra hours for those of us trapped in traffic as the mountain nearby burned from the gas pipe explosion. At least 4 are dead and 38 homes completely destroyed with hundreds damaged.
  • Cartoon of the Day:

The Ultimate Ironic Quote

At least for this week or something. Sorry, any cool Wingnut Web update I had planned just pale, so here were go. From this thread discussing the church going to do the Koran burning:;page=1

Holy 9-11, Batman!

Found by NATO

Anyone who condemns this country over the actions of 20 people are our enemies anyway. We are just flushing them out.

42 posted on 08.09.2010 17:56:44 by DManA

Qur’an burning vs. WikiLeaks

Stars and Stripes

KABUL, Afghanistan — Gen. David Petraeus on Wednesday ratcheted up his condemnation of plans by a small Florida church to mark the anniversary of the Sept. 11 terrorist attacks by burning copies of the Quran, likening the popular outrage that would follow in Afghanistan to the reaction in Iraq to photographs of detainee abuses.

“I think the images of such an action would be as indelible and inflammatory as have been the images of Abu Ghraib,” he said. “This will put our troopers and civilians in greater danger, and it’s somewhat inexplicable to me that fellow citizens would do that.”


Just outside ISAF headquarters at the office of the World Philosophical Mathematics Research Center, scholars usually concerned with the pursuit of arcane formulas that attempt to explain and predict world events had turned their attention to more immediate affairs, erecting a banner saying the U.S. government would be blamed for the Quran-burning.

“If this happens, there will not be any protests,” said Ghulam Farouk Hamkar, a researcher at the center. “There will be fire. The U.S. Embassy will be burned. People will attack American soldiers wherever they see them. Everyone will do this, not just insurgents.”

Lets compare the reaction here to the WikiLeaks release:

Sept. 7th press briefing

Q Good afternoon.  Robert, there’s a church in Gainesville, Florida, that says it’s going to go ahead and burn copies of the Koran to mark the 9/11 anniversary.  Is the White House — is there anything the White House is doing to discourage that or prevent them from going ahead with that?

MR. GIBBS:  Well, look, I think the best place to look for the views of this administration would be to look at the — look at what General Petraeus said over the weekend.  We know that that type of activity — we know that that type of activity is being transmitted back to places like Afghanistan, when General Petraeus obviously is our lead commander.  As he said, it puts our troops in harm’s way.  And obviously that — any type of activity like that would be — that


Q And just quickly on the Koran story, have you heard the President comment on that?

MR. GIBBS:  I have not.  I have not.

I’d say that’s pretty mild.  Now lets look back at WikiLeaks:

July 27th press briefing

Q Thanks, Robert.  Two questions, a few on WikiLeaks.  What was the President’s reaction once he heard about the leaking —

MR. GIBBS:  Well, I remember talking to the President sometime last week after discussions with news organizations that these stories were coming.  Look, I think our reaction to this type of material, a breach of federal law, is always the same, and that is whenever you have the potential for names and for operations and for programs to be out there in the public domain, that it — besides being against the law — has a potential to be very harmful to those that are in our military, those that are cooperating with our military, and those that are working to keep us safe.

Q Well, I mean, was he personally angered by this?  Did he demand answers or an investigation?

MR. GIBBS:  Well, there is an ongoing investigation that predated the end of last week into leaks of highly classified secret documents.

Q Robert back on WikiLeaks.  A couple of times now, you’ve said in the last couple of moments that a lot of this information is not really new, that named U.S. government officials have said some of this same information publicly.

MR. GIBBS:  Well, I’m not saying it’s — yes, I said there weren’t any new revelations in the material.

Q So how does it harm national security if we’ve known this already?

MR. GIBBS:  Well, because you’ve got — it’s not the content as much as it is their names, their operations, there’s logistics, there are sources — all of that information out in a public way has the potential, Ed, to do harm.  If somebody is cooperating with the federal government and their name is listed in an action report, I don’t think it’s a stretch to believe that that could potentially put a group or an individual at great personal risk.

Drain Clogs – 09-02-2010

The CEO of Stardock is a crazed Wingnut who publishes pseudo-white nationalist fan fiction as official novels for their video games. More here:
So Stardock CEO, Brad Wardell, wrote a book about a group of heroes building a fence to keep olive-skinned and dark-skinned antagonists out of a continent…

Here’s a nice article

Glenn Beck has started his own HuffPo ripoff site, The best part of this is that it will probably kill Tucker Carlson’s DailyHowler, but will still putter along. allows comments, so expect it to show up on a Wingnut Web once free time becomes something I have.

Tom Tancredo – crazy.

Ohio thinks Puerto Rico is a foreign country.

Now that the teabaggers have restored honor they can go back to having sex with children. Ohio again? Constitution Party candidate Eric Deaton is the guy’s name.

Retired Lt. Gen. Thomas McInerney has gone Birther, and is now supporting court martialed birther Lt. Col. Terry Lakin. McInerney works for FoxNews, who will undoubtedly fire him. And by fire him, I mean have him on much more!

Another Gulf Oil rig exploded. That North Korean sub has been busy!

Cartoon of the Day: