Alex Pareene on the State of Journalism

I usually enjoy Alex Pareene's columns, he seems to be a true Ravingleftatic.  Today he commented on an article in Politico that was written terribly.  It reminded me of two articles I reviewed here based on their terrible writing/and or journalism.  It's fun and easy to pick out terribly written articles on all the major news aggregators, but I'd like to comment on a thought I had after reading Pareene's diatribe.

I'm an amateur writer, clearly.  And I've noticed it in my own writing.  If I know I have to write a piece for submission somewhere, I unintentionally beef up the "sound byte" text. You know the stuff that you expect to see in articles, and hear on TV?  Pareene quoted a good example:

"Rival Democratic and Republican jobs bills failed in the Senate on Thursday, the latest sign of the partisan gridlock gripping Washington as Americans look for relief from high unemployment and a sagging economy."

Let's parse this: 

Fact: Rival Democratic and Republican jobs bills failed in the Senate on Thursday

Filler: the latest sign of the partisan gridlock gripping Washington as Americans look for relief from high unemployment and a sagging economy

Now it turns out, says Pareene that even the Fact portion of that statement is incorrect.  But look at that vomitous, regurgitated, claptrap in the second half of the sentence. If I didn't have much to say, and I had to submit an article, I'd use terms like "partisan gridlock," "plagueing America," "the Washington Elite," feeling up a "sagging economy," supported by "the tax payers."  This is careless, terrible writing.  And that is the subject of this post: there is an urge in all of us to regurgitate that which we think our audience expects to hear. Even if we don't believe it, or agree with it.

Next time you watch a comedy, and that comedy shows a news broadcast, listen to the words the writers have chosen, (not the content, the words, the phrases) they're all chosen because we've been trained to know "newspeak."  All we need to hear are certain key phrases and we go on point like a dog guarding the house.  Our brain's instantly say, "this must be news," "this must be true," "Who can I tell?"

But our audiences aren't dumb, even when we treat them that way.  And reading such terms in an article that purports to report and not opine, are misleading.  It assumes facts!  Already in that article, we are told without getting a chance to argue that partisan gridlock is real, it's bad, and that it's equally spread across the entirety of the political scene.  Reinforcement of these Fauxnorms is dangerous in a highly contested political climate such as ours.  It's a bit like the old joke:  "Do you still beat your wife?"

Occupy WALL STREET Plank

Ok, so here is the follow up to my earlier post on the Occupy Wall Street movement.

I propose the following:

1.  Raise the Corporate Tax.  Taxes do not have an effect on growth.  Demand has an effect on growth.  Period, end of sentence.  Stop whining.

2.  Close tax loopholes, including taxes on inheritances and capital gains.  The government needs revenue.  It doesn't cost anymore than it did in 2008 to feed a family of four, welfare checks still do more for the economy than tax cuts for the wealthy.

3.  Create an index of companies with high CEO to Entry-Level salary ratios and tax those with the highest ratios.  Funnel the proceeds directly into social services for the middle and lower classes.

4.  Quit watering down the latent Consumer Protection Agency, beef it up

5.  Beef up the SEC, this has, to some extent been done.  But even now, the SEC doesn't go after the big fish.  Only the medium and small fish.

6.  Break up the giant banks

7.  Criminal prosecutions (that the DOJ actually takes seriously) for the participants in the 2007-8 Crisis. No matter how high up they go, even if it means Obama Administration higher-ups. But particularly the previous administration's "King's Men."

Occupy WALL STREET

So I had a conversation recently about Occupy WALL STREET, and it made me think.  Also, as a Ravingleftatic, economic egality is one of my niches, so I've been remiss in commenting.

I'm going to divide this post in twain.  The first half will be to rebutt my darling wife's comments.  The second will be to offer a firm plank to the occupiers.

Some of the comments about the occupiers I heard that was that the whole movement was basically a waste of time, with little or no focus, and that people like that make people like us look ridiculous, and that this news has been front page news for three years already.

Waste of Time:  Basically, the argument goes like this: they're bankers, not elected officials.  Why would they care?  Go occupy D.C.

Rebuttal:  It's not what the banker's think so much as the amount of media attention they get.  Having worked in the area, I can tell you: Zucotti Park is small.  A force of 100 protestors would look like a huge crowd.  That's important, small spaces make small protests look good.  And success begets success.  Such that Amy Goodman has now reported "thousands" of protestors, and has respawned in cities around the world.  By the way, the Guardian article linked to above, provides an excellent history on the movement.  D.C. on the otherhand is built for protests, wide open spaces that can swallow a thousand people with no problem.  Another thing?  If she thinks people in D.C. care about protestors...she's got another thing coming.  I went to college there.  There's always a protest.  A protest about a unique group of people in a unique site, is far more inventive and news worthy, than just another protest on the mall.  So the level, and length of media attention devoted to something is an important factor in deciding its effect.  That I'm writing about this now, shows that this movement has staying power, in the words of E. Roger's seminal work on technological innovation, I am a laggard (Early Adopters, Late Majority, etc.).  I get to the party when its ending (which doesn't say much about the occupation--but there it is).  I remember when people began talking about it.  I thought it was a miniscule, small movement that would die out by the next news cycle.  I was wrong.  So already it has had a tremendous effect.  The last point I'd like to make on this is the following:  Banker's aren't elected officials, but they're voters.  And they're vote matters a hell of a lot more than you or I: they vote with their checkbooks.  Obama received more money from Goldman Sach's than from any other group.  So changing their views and their opinion matters.  Will a movement of "dirty hippies" change their minds or serve to further polarize them?  Well--that's a reasonable debate.

No Focus:  The basic argument here is that, if I understand it correctly, they don't have a clear list of demands, a clear leadership, and they all appear to wear different causes. 

Rebuttal:  Having spent four years in D.C. during the worst President in history's first term, I can tell you:  Protests today don't have a lot of focus.  As a rule.  I'm no expert, but I do have some on the ground experience.  One of my favorite things to do as a student, was to wander around D.C. during a protest, and did so on at least six occasions.  I also was at the New York anti-war protests after college.  The people were spectacular.  Dressed (or undressed) they were always charasmatic and inventive.  There were always a lot of them, and they all sported their own causes, gay rights, anti-war, anarchy, anti-torture, to economic injustice and totalitarianism.  I think this focus accusation (which I've heard a lot from the very beginning) is a red herring.  In the 1960s and 1970s, the world, was technologically a very different place.  Information flowed in very different ways, and through very different nodes.  And, as a consequence, people are different.  We all have more than one cause.  And we want people to know that when we get it up to go out and protest.  It's not a repudiation of singularity of purpose, it's a celebration of diversity and a bringing together of diverse causes.  Add to that a well documented fact that people (Ravingleftatics, and Republithugs--alike) have less trust, and less reason to trust their governments than they've EVER had.  So no, not only do I NOT think that Occupy Wall Street is unclear or lacking focus, I believe that their diversity of values is a strength and a badge of honor.

They Make Us Look Ridiculous:  This is a sensitive one for many people.  I understand it, but let's say:  maybe my understanding is based on my own reasons.  It goes like this: Premise:  The Occupiers are kids, college students and career protestors.  They likely don't know much (or anything about finance, the economic collapse, what's been done since, etc.) all they have is their passion, and undereducated passion is dangerous in a democratic society.  Premise 2:  We DO know what we're talking about, lived here during the economic collapse, have alternately worked in the business, known people who have, and have read a lot of material to support our opinions.  Therefore, the people in the park, Park People, the occupiers, make us, temperate, educated, well reasoned people look bad.

Rebuttal:  Having written it out like that, I think the premise and conclusion rebut itself.  We obviously don't know any of these people, we have only news reports of their consistency to go on, and the news coverage has been anti-protest from the get-go.  Making the inference that any of these people are uneducated is unfair, and moreover may be completely untrue.  If they are college students, likely their learning is fresher in their minds than that of the vast majority of us.  If they're career protestors--dirty hippies-- (career protestors definitely exist, I've met them) they spend their long train rides from protest to protest reading material about that which has peaked their interest.  However, it is unequivocally true that the vast majority of them have never worked in finance, or finance related industries.  But then again, that's why we're so mad.  Finance is America's largest industry as a percentage of GDP.  People who actually make things, make nothing, where people who literally divide up piles of nothing, into other piles of nothing, to make more piles of nothing look like bigger piles of nothing get multi-million dollar bonuses.  And in most cases, they're no better educated  or qualified than we are!

Old News:  The old news argument is factually quite true.  The 99% is a well documented fact.  The fact that average and wages have actually decreased in the past forty years is true. 

Rebuttal:  There's nothing new to report here, it's true.  My rebuttal here, is based purely on my own memory and perception of the events of the past decade.  For the vast majority of Americans 2004 to 2007 was no better than 2008 to the present.  Wages didn't go up at all.  They decreased, and healthcare costs have risen geometrically.  As I've said before, most Americans are one epic disease away from the poor house.  What did go up, was the stock market.  For most Americans the only meaningful aspect of that was a commensurate rise in home values.  People's wealth increased, merely because of the housing bubble.  And during that time, people were encouraged, by unethical bankers and loan companies, to refinance the hell out of their homes.  So they took that loaned money, thinking it was theirs and bought new cars, iPods, flat screen, thin screen tvs, Bose stereos, or new homes.  And when the bubble popped, they were underwater.  Ok, talk about old news, Ravingleftatic.  We know all of that.  Why is that important?

It's important because in the past decade I have seen three major groundswells of positive liberal energy.  One: The anti-war movement that swept the 2006 elections and stopped the Republican majority (note that it wasn't a coup, they still had a president and one branch of the legislature--sound familiar?)  Two:  The next year, but particularly the last few months of the 2008 election.  Hope, etc.  And Three:  Occupy Wall Street.  As a consequence of those three bands of energy, 1) we took back congress 2)  we took back the presidency, passed healthcare reform, and a financial reform act.  And 3)  Well?  We'll see.  Get Obama another 4 years, reaffirm our hold in the Senate and take back the House?  Maybe. 

In between these groundswells of liberal energy, cynicism takes hold, and the otherside fights back.  We lost the 2010 mid-terms because people forgot that the state of healthcare in this country is an outrage.  They forgot that the AIG brass received million dollar bonuses of the public's money.  Whether or not they forget it, the media keeps redirecting attenion away.  The myth of the Tea Party is that they were something new, something exciting.  Research has shown that self-identifying Tea Partier's are merely Republicans who can tolerate gays.  The whole movement was made to order by the Koch Brother's funding, and put on for show by the major media outlets because they talked about liberty and wore tri-corner hats!

Sigh.  Let me bring it down a notch, and wind this up, I'll have to save the Plank for another Post.  (ha ha!)  This IS old news.  But the disparity between the 1 and the other 99% hasn't shrunk, it's grown.  Egality, and justice still favor those who can afford to pay for it, not those who deserve it or require it.  So no, it's not old news.  It is the most important news, and it always will be to a Ravingleftatic.

The New Inflation Debate

So, apparently, the great econoratzi have been having a brand new discussion about inflation.  Paul Volker, whom I usually admire, wrote in an Op-Ed in the Times yesterday, damning the idea before it got out the gate.  Volker is roundly credited with getting rid of the 1970s staglfation brought on by slow growth and high unemployment.

Let's begin at the beginning.  Inflation is currently, and has been for over a decade, at incredible lows:
2001 = 2.83 Bush, G.W.
2002 = 1.59
2003 = 2.27
2004 = 2.68
2005 = 3.39
2006 = 3.24
2007 = 2.85
2008 = 3.85
2009 = -0.34 Obama
2010 = 1.64
Inflation, as tracked above, does not include what they call Headline inflation, which I've written about in the past.  It's a basic market basket of goods that does not include objects that have temporaral fluctuations due to external causes, such as drouts, pestilence, hurricanes, fires, real act of god type shit.  Of course there are other factors which influence those goods too, and demand from third and second world countries is now beginning to hit its stride.  So when NPR reported this morning that food prices have gone up nearly 4%--this is not the inflation that gets tracked by the Fed, or by most inflation tracking indexes.

Moving on.  We all know why inflation is bad, we've all seen the pictures from Weimar Germany, or Russia during the 80s and 90s, wheelbarrows of cash to go to the grocery store.  Governments have one basic way to control inflation, through their Central Bank.  The U.S. did not always have a central bank.  It's been a consistent war.  We had one, then we didn't have one, then we had it again. People don't like Central Banks for the same reason they hoard gold.  The Central Bank issues currency, and as such controls the value of said currency.  They can also withdraw currency, by retiring treasury bonds early, or by not issuing them at all.  This is the only thing the Fed can do really.  It controls interest rate by buying, selling, and creating new bonds.  Quantitative Easing, the Discount Window, other things the fed is known for, can both be folded into this concept.

Given that interest rates are so central to investing and money flow, it became apparent, fairly early on that the Fed can exercise enormous power on the economy.  This makes them an exceedingly cautious entity, which in turn makes those who watch it, desperately follow every inflection, nuance and word choice in their carefully worded statements.  Three years ago, in the heart of the crisis (though even before the crisis) the Fed lowered interest rates to almost zero in an effort to stimulate the economy.  With low interest rates, companies can borrow cheaply, goes the theory.  And with cheap money will go investment, new factories, jobs created, etc.  This has simply not worked out.  For starters, as I said, before the crisis, the free wheeling 2000sandsies the rate was at near zero lows already.  Why?  When the money keeps rolling in, you don't ask why.  Simply, the Fed was in Bed with Wall Street.  The Fed has for three years kicked the can down the road and kept interest rates at historic lows, on the premise that when growth comes, at least it will come cheaper.

Now, with Congress deadlocked, and the President unable to do much until the next election, people are looking again to the Fed for guidance.  Afterall, the Fed is controlled by 12 men, sometimes 16, and getting a quorum of 12 dudes, is a hell of a lot easier than getting nearly 600 of the most contentious, often ignorant, and certainly ignoble bastards to agree on anything is pure fantasy.  But what can the Fed do?  It's entire database of knowledge has shown that lowering interest rates and increasing the money supply is the only thing it can do to the economy.  And interest rates are already at zero.  The answer is two things:  1)  Go for another round of quantitative easing (i.e. inflation) or 2) raise interest rates.  They've done 1) with only marginal effect, and a ton of whining, including a death threat from Rick perry, and there is simply no substantive data on what would happen if they did 2) in the middle of a recession.

About three months ago, they chose a middle ground.  They threatened to raise interest rates, in two years.  As I said, so nervous about the Fed are we, that a mere threat to raise interest rates, immediately unleashed a firestorm of criticism.  From even the one dissenting Fed Director, the most conservative, the Federal Reserve of Minneappolis.  I don't know why Minnesota has a federal reserve bank, really I don't.  Not the most exciting state in the union.  Anyway, the purpose, as I understand it, of this threat, was to tell businesses--get on with it.  You're not going to have this great interest rate forever.  Interestingly, the take away of one economist on NPR this morning was to say, "oh great, things will be the same for the next two years, no need to rush."  That's a paraphrase of course.  I did not take this away at all.  If a company is planning a merger, or a to ramp up production, it will take at least six months, if not a full year of planning.  That said--it's all hay anyway, because the Fed really only said it might raise rates in two years.

My apologies my friends, you wanted the NEW debate, and we've only just got here.  The new debate is that some (very few) economists have been suggesting that we actually let inflation rise.  The rationale is simple.  Low inflation is great for people who own debt, because most debt is locked in, mortgage rates, tuition loans, etc.  That means the debtee gets almost a real dollar for every dollar owed.  Add inflation and suddenly, the debtor has more money to pay the loan payments, which per agreement, remains the same.  This is an interesting thought--and for those following the European crisis, is the central problem that Europe faces--they're out of money.  If Greece was on the drachma, they could devalue their currency, and therefore avoid default.  It wouldn't look great, and it would cause massive inflation, but the inflation could be fixed, and it's still better than default.  And the bondholders would still get paid--to be sure, they'd be getting cents on the dollar--but again, still better than default.  And it's not permanent.  A ten-year bond could well rise in value after two years of an inflationary period.

Volker rang out yesterday with condemnation stating that inflation, is afterall, very hard to control.  And it could easily get built into the system.  Such that raising inflation to 3 or 4% wouldn't eventually do much, and we would be tempted to allow inflation to raise again.  Another economist on NPR this morning said much the same, that for rising inflation to accomplish its aim, it would have to go as high as 10-15%, which is indeed, a very dangerous level.  The highest inflation has been in 60+ years was in the last year of the Carter administration (when Volker was appointed) and that was a whopping 13.58%.

Anyway, it's an interesting idea, and the only point I wished to make about this whole thing is that it seems to me that interest rates being near zero, no longer has the stimulative effect that it's credited with.  The rate should get raised, and the rate should fluctuate naturally with the economy, so that it remains a valuable tool when necessary.

It's not an Entitlement, it's a Responsibility

Again and again, I keep hearing politicians and media analysts talk about entitlements: "Democrats in Congress have to look at entitlement spending," "entitlement spending is out of control" yada yada yada.


This is one more example of Dems and Liberals letting the adversary control the dialogue. Entitlements. No one likes entitled people, they step all over you, and think the whole world is theirs to piss on. Bad entitlements. The term is so vague, and so misapplied that its a wonder liberal media analysts never challenge their opponents on it. I hear it on Chris Mathews, I hear it on Bill Maher, CNN. It's always used by the otherside, and the Liberals just nod their heads and shrug ponderously. They know its the wrong word--but they don't fight it.

Here it is people, let me lay it out to you, in stark, Ravingleftatic terms.

1. Entitlement spending doesn't exist.
2. Zero dollars are spent on entitlement spending.
3. Billions of dollars are given up by the IRS for inheritance taxes that have been mutilated--that's an actual entitlement.  (Root: titled, as in landed gentry, as in aristocracy, as in Republican.)
4.  The government has a responsibility to protect its people
5.  That protection goes in this order.  Freedom from want, Freedom from fear, and Freedom of worship, and Freedom of speech. (That's right, I changed FDRs order--Freedom from want, and freedom from fear trump freedom of speech and worship.)
6.  Unemployment, Social Security, Medicare-Medicaid, Food Stamps, Housing programs, these are the government's responsibilities toward it's people in alleviating the first first of those mandatory protections.
7.  Entitlements are what the government does for it's wealthiest--let's them off the hook.
8.  Responsibility is what the government has for its poorest.

Standard & Poor, is literally, more or less, that

I'm listening to the July 26th PlanetMoney podcast, which actually hearkens back to a podcast from May of 2010, in which they interview the sovereign ratings guys at Standard & Poors.  I don't have too much to say on this.  But this was from the horse's mouth.

S&P bases their sovereign ratings on two people visiting a country for a week.  That pretty much means that every American tourist in history is qualified to do ratings for S&P.

To be fair, they're not riding the Eye, or visiting the Eifel Tower and eating a crepe, they're visiting ministers of finance, and conducting interviews with central bankers.  To be fair, the guys they send are fair to midling brilliant, economists, accountants, and analysts, etc.  To be fair, mostly the ratings are based on reams of data that they go through in their cozy 49th floor offices in New York.  To be fair, all the ratings agencies have proprietary software that's designed to predict using specially designed metrics, on a level far above that of you, or I.

But enough fair:  A scientist conducting an experiment will take weeks, months, with controls and double-blinds.  They'll have their data peer-reviewed by other scientists.  They'll submit it to prestigious journals, which will have the data reviewed again before publishing.  Good research takes time.  Good research requires cross checks, and several sets of eyes. 

And once the two guys come back, they get another three people from S&P around the world, they give brief presentations, discuss and then vote.  Sounds like the whole thing gets done in a day.  Interestingly, the follow up interview said that this was not always the case, sometimes there are more voters, sometimes it takes a month to make the decision.

Social Security is NOT a Ponzi Scheme

I had a rough night last night, and I may not be at my rhetorical best, but this claptrap over Social Security is maddening to the point of apoplexy.

No, you turds.  Social Security is not a Ponzi scheme, is nothing like a Ponzi scheme, it never has been, and it never will be.

The central argument made by Perry, and Bachmann (the two least likely people in the GOP debates to have an original idea, much less a logical, or true one--THERE ARE NO BAD IDEAS IN BRAINSTORMING LEMMON) is that Social Security is like a ponzi scheme because you rob Peter to pay Paul.  But this does not a Ponzi scheme make.

There are three things about Social Security that have made it a big fat easy target to the wingnuttery.  1)  The first generation on social security (most of whom are dead now) never paid for it.  2)  Payments toward social security are mandatory.  3)  Money in virtually any other investment vehicle will do better than that invested in SS.

Point 1:  This is true, Social Security was established because the state of eldercare in the United States during the 30s and 40s was absolutely deplorable. On top of the Depression, was the larger issue that saving for retirement is all but impossible for the vast majority of the population.  When 85 to 95% of your income is spent on your day to day existence, even putting the remaining 10% toward retirement is a bit of a pipedream.  So Social Security was established to get that first, elder generation, out of poverty, eating food instead of pencil shavings, and having stable roofs over their heads.  Opponents of SS use this fact to indicate that some people got their's for free.  But the purpose of the program was to take care of those people.  So this wasn't 'free,' it was a government transfer program that was designed to pay for itself.

Point 2:  Opponents of SS have proposed two alternatives to the mandatory social security program.  1)  Opt-outs and 2) means testing.  Allowing either of these into the program would ultimately destroy it--which is precisely what people who suggest this are saying.  Both points sound reasonable, right?  Mandatory payments in the land of the free!?  What a travesty!  Nevermind that the pay as you go system of taxes have proven to be most efficacious and has saved the treasury and IRS billions of dollars in collection fees and litigation.  Tea Partiers love this point, but it's a red-herring, classic misdirection.  These "freedom fighters" don't care about the "violation" of a mandatory payment.  They simply see no reason for the program itself and believe that Point 3 should take prevalence.  So they suggest, why not allow people to opt-out of social security?  Simple fix, right?

Well--not really.  The problem here is a logicial one, and difficult to explain, let alone understand.  The program depends on mandatory payments because of its mandate.  Look.  Thirty years from now, if you haven't been saving, you'd still be entitled to Social Security.  Why?  Because that was the mandate of the law--to protect the elderly.  There is sixty years of caselaw in the system backing this up.  Even were the law to change--anyone who could pay a lawyer would have an actionable claim on SS.  Which means ultimately, that the system would be bankrupt in a generation, when a generation of opt-outers decide they're entitled to that for which they did not pay into.

What about means testing?  I heard the editor of Reason magazine make this argument on Bill Maher's Politically Incorrect.  "Why should a millionaire receive payments?"  This argument too is a red herring.  If the editor of Reason magazine doesn't know that the millionaire receives payments because he's receiving his own money back--than he shouldn't be an editor.  He knows.  Why this argument?  Great soundbyte.  The system is corrupt, millionaires don't need government transfer payments!  The system is based on a certain amount of equity.  It's a retirement program.  It's not a tax or a handout.  The money is yours, you're just getting it back when you're 65. Prince or pauper, so long as you worked a day in your life, you're entitled to some benefit.  (Personally, the only reform to SS that I would countenance would be to up the age.  People are older and working now than they were in the past.  We're healthier, and science has advanced our ability to work well into our early 70s.)  So why should a millionare make payments?  Again, equity, and see my previous paragraph: the more Opt-Outs the more you inherently weakent the system. 

Point 3:  This is one of the more insidious arguments against SS because it's completely true.  Social Security is not an investment vehicle--it's a savings vehicle.  This argument against SS is built on the idea that everyone is making proper arrangements for their retirement, which is patently false.  Let's face it, most people's retirement planning is non-existent.  The right, and Libertarians would like to believe otherwise.  But remember, the right doesn't care if you have money to retire.  They have money to retire, and if you're out on the street at 70, tough luck.  You were an idiot, it's what you deserve.

Never forget this one inalienable fact, Ravingleftatics, the Right would have you believe they care about freedom, about security, about morals, and about justice for all.  This is a deception.  They're only interest is in maximizing their own wealth, their own gain.  They assume everyone is acting the same as them.  They do not believe in collective action, or in altruism--in fact they say its impossible to act selflessly.  This belief is the justification for itself.  If everyone is acting in their own best interest, we'll all get something.  But its a tautology, and its premises are both false and laughably self-serving. 

In their world, it's all a Ponzi scheme, and they're all Madoff, running to the end of the line to get stuff out of other's hands and into their own.  And if you're an investor in their scheme, they assume you're running your own scheme and be damned with you.  And if you're not, well you're a sucker.

So my fine Ravingleftatics, do not believe this bull puckey about Social Security.