You Want A Scandal?

While the Villager Press inside the beltway gets all titillated over the IRS (which only denied the 501(c)4 application of one organization, a liberal group in Maine) and the AP (which might have revealed information about a CIA covert agent) and Benghazi, Benghazi, Benghazi… (oops the full emails show the CIA wanted to limit the amount of information about ops in the area?) there are some scandalous situations about which no one in the Cocktail Party Circuit appears to be getting all flustered…and outraged…and fulminatory about.   Let’s try on a few.

STUDENT LOANS

The Federal Reserve Discount Rate right now is 0.75%. [BankRate] So, banks can borrow money at 3/4th of a percent.  The current Stafford Student Loan Rate (in school) is 3.4% and the current Stafford Student Loan Rate (out of school) is 6.8%.  [BankRate]  We know, of course, that the banks don’t keep loans on their own books for the most part, and the student loans are really safe “paper” to package up into bonds, which in turn get sliced and diced into derivatives for the market traders to play with, creating a tidy $1 Trillion in total student indebtedness in this country. [WSJ]

We say we need more scientists, more engineers, more physicians, more nurses, more architects, and more computer engineers — but when it come down to helping students pay for the education necessary to pursue these degrees our next generation finds itself so saddled with student debt that basic life decisions — like finding housing, getting married, and paying the usual bills are swirled into the vortex of loan repayment.  The Federal Reserve Bank of New York posted this conclusion on April 17, 2013:

“Student loans have soared in popularity over the past decade, with the aggregate student loan balance, as measured in the FRBNY Consumer Credit Panel, reaching $966 billion at the end of 2012. Student debt now exceeds aggregate auto loan, credit card, and home-equity debt balances—making student loans the second largest debt of U.S. households, following mortgages. Student loans provide critical access to schooling, given the challenge presented by increasing costs of higher education and rising returns to a degree. Nevertheless, some have questioned how taking on extensive debt early in life has affected young workers’ post-schooling economic activity.”   [...]

As seen in the chart below, the share of twenty-five-year-olds with student debt has increased from just 25 percent in 2003 to 43 percent in 2012. Further, the average student loan balance among those twenty-five-year-olds with student debt grew by 91 percent over the period, from $10,649 in 2003 to $20,326 in 2012. Student loan delinquencies have also been growing, as shown in the recent presentations by New York Fed economists Donghoon Lee and Wilbert van der Klaauw.

The number of student in debt has increased, the amount of the debt has increased, and so have the number of delinquencies.  And all the while the profitability of the banks (which we remember were bailed out with tax payer dollars) has continued unabated.  “Banks have been reporting steady growth in earnings since soon after the financial crisis. With the latest reports rolling in, analysts think the banks’ first-quarter profits will be their best ever.” [NYT 4/17/13]

Now isn’t that nice. The banks are getting “best ever” profits and the students are getting more deeply mired in debt.  Does this mean we have a Congress more concerned with the profitability of the banks than with the manageability of student debt, and the prospect of a nation in which fewer young people can afford to seek the educations which would boost their economic circumstances and enhance our national structure?  Meanwhile, it’s seemingly more important to give freshman Congress creatures an opportunity to repeal the Affordable Care Act — for the 37th time — than it is to conduct hearings and draft legislation to address the Student Loan Scandal.   Perhaps if we start calling the situation a “scandal” some attention might be brought to the subject?  Senator Elizabeth Warren (D-MA) has a bill on the Senate side to offer a bit of relief, which by some lights doesn’t go far enough, but at least someone is paying attention.

Military Sexual Assaults

There are approximately 1.4 million people serving in the U.S. Armed Forces, and the Pentagon reports there have been some 26,000 cases of sexual assault.  This isn’t a “women’s problem.” This is a military culture problem.  This is a legal problem.    Even the distribution of a motion picture on the subject (The Invisible War) hasn’t raised the Scandal Flag amongst the Village Media.  A Senate Armed Services Subcommittee has held one hearing — March 13, 2013. [SASC]   On the other side of the building House Armed Services chairman Buck McKeown  “said he was outraged and disgusted by the Fort Hood allegations.” [CNN]  As well he should be — so now where are the umpteen hearings on sexual assaults in the military?  Generally, when the term “sex” is combined with an issue — infidelity, crime, or whatever — the resulting phrase is Sex Scandal.  Why not this time?  Oh, yes, wait — the House is still voting to repeal the Affordable Care Act for the 37th time, and there will be more hearings on Benghazi…

This could go on … isn’t it scandalous we’re reducing the federal budget deficit … “The federal deficit is shrinking more quickly than expected, and the government’s long-term debt has largely stabilized for the next decade, the Congressional Budget Office said Tuesday in a report…” [LAT] BUT there’s a House bill which would further reduce funding for SNAP and nutrition programs, Meals on Wheels is sharply curtailing services to the elderly, and the Mysterious Chargemaster continues to make hospitalization bills inexplicable, opaque, and unfathomable…but these haven’t risen to the level of “Scandal” in the Washington, D.C. media.

And, then there’s the polling indicating that some 91% of the American people thought there ought to be expanded background checks to mitigate the prospects that an insane person, a felon, a fugitive, an undocumented person, or a juvenile could get hold of lethal weapons … and the Senate Republicans filibustered the bill…

For information about these issues we’re better off looking to local reporters who write about local children going hungry, or local seniors unserved, or local hospital rates, or local gun violence tragedies …. Perhaps if a crowd of  senior citizens picketed a military installation (or a couple of banks) clad like the current on-sale portrait of the late great  Bea Arthur, and packed AR-15s for show while waving their empty plates and their grandkids’ student loan papers … could we get some attention here?  And, while we’re at it — Where are the JOBS bills?

Would THAT be a scandal?

Another Press Conference to Remind Us Why We Don’t Care About Press Conferences

Another Presidential press conference, and yet another reason to observe why presidents (of any political stripe) aren’t fond of press conferences.   There isn’t much reason for the general public to get exercised about these press Q & A’s either.

The topics were fairly predictable: The Civil War in Syria and the possible use of chemical weapons — by someone, sometime;  Benghazi; Immigration and our diplomatic and agency relations with Mexico; The implementation of the Affordable Care Act; The Boston Marathon bombing; The Sequester and the FAA fix; Guantanamo; Jason Collins.  Yawn.

Notice that not a single one of these questions addresses the single most important topic of interest to Americans — jobs and the economy.  The economy is polled at 40%; Budget and the national debt comes in at 6%; Immigration at 4%; Gun Safety at 3%; Health Care at 3%; Terrorism at 3%; and an unspecified “other” at 34%.   So, where were the questions about our unemployment statistics? Manufacturing?  Trade relations and implications?  Job creation legislation?  The effect of the Sequester on the GDP?  Crickets.

A second item of note is that the questions concerning foreign policy (Syria, Benghazi) were derivative.  The “red line” question was productive, but the follow up on the tragedy in Benghazi concerned a claim by Republican operatives, with dubious reputations for accuracy, that diplomats were not available for public comments.  This came  from the GOP lawyer who once opined that Valerie Plame couldn’t be “outed” because she wasn’t an undercover operative for the CIA — a patently false statement, from a patently unreliable source.

The Boston Marathon and national security question was a classic example of White House Press Corps self referencing:

“…There is also a series of senators — Susan Collins, Saxby Chambliss, Lindsey Graham — who allege that all these years after 9/11, there still wasn’t enough intelligence shared prior to the attack.  And now, Lindsey Graham, who is a senior member of the Armed Services Committee, has said that Benghazi and Boston are both examples of the U.S. going backwards on national security.  Is he right?  And did our intelligence miss something?”  [transcript]*

This must be what passes for research amongst members of the press elite — Senator Greenroom makes a comment on television, reporter watches the presentation, reporter asks the President (or other available public official) about Greenroom’s comments, the response is treated as “news.”

The reporter might have been able to answer her own inquiry had she some familiarity with the State Department’s annual terrorism report.  The report for 2011 is now available online.  It would seem that a person, supposedly adept in reporting national issues, would be aware of the annual reports and would know the reports are  statutorily mandated.

A more important question might have been raised about intelligence sharing had the questioner demonstrated a bit more nuanced understanding of the topic.  There could have been a question about both the possibility that the FBI and CIA are often loath to share information, the sharing of which would indirectly expose sources and methods — and another line of inquiry concerning the delicacy of cooperation with Russian police and intelligence sources.  How can we effectively and efficiently share information with the Russians without becoming a cat’s paw for Russian intentions in Chechnya, or without becoming entangled in Russian internal politics?  Or, on the other hand, without compromising Russian sources and methods when they are attempting to assist us?

Those lines of questioning died in the wake of the self-referential, inside the Beltway, Village approach to journalism.

Meanwhile back in the real world:  Not only was there not a single question about jobs and the economy, there were some other very obvious questions that weren’t voiced.

The current death toll in the factory collapse in Bangladesh now stands at 411.  The European Union is considering revising its standards for duty free and quota free trade from countries which do not implement and enforce work place safety regulations. [Reuters]  The U.S. Department of Commerce has not yet posted any comments on trade with countries with few, if indeed any, worker safety laws in evidence (May 1, 2013) — Question, Mr. President: Does the U.S. Department of Commerce intend to review our trade relations with nations which have very unimpressive implementation of worker safety regulations?  More crickets.

And, pertaining to gun safety?  How much more productive would it have been to avoid the realm of Theater Critics and observe that initial efforts to expand gun ownership background checks to gun shows and Internet sales failed (Didn’t you twist enough arms?) and to ask:  Mr. President — The Tsarnaev brothers were in possession of a 9mm Ruger semi-automatic hand gun, alleged to be the weapon that killed the MIT police officer, and we know that the older brother was placed on the Terrorist Watch List.  [GUK] Should we seek to close the gun show and Internet sale loopholes to preclude those who are on terrorist watch lists from obtaining firearms? Should we amend 18 USC 842 to include those on terrorist watch lists from legal possession of explosives?   If anyone with a computer can locate this information within a half hour from online sources, then why is the there such a paucity of background information on display during White House press conferences?

Nor did the White House press corps give evidence they’ve looked across the pond lately.  Eurozone unemployment has risen to a record high, and Italian unemployment is higher than it’s been in the past 20 years.  [IBT]  Question Mr. President:  With the current economic troubles in the Eurozone in mind, what implications might this have for U.S. manufacturing and service sector exports to Europe?  What would this mean for American workers?  Never asked.

In short, what we saw on our televisions was yet another unfortunate display of a Bubble Wrapped press corps, asking insider questions about insider issues.  And, all without so much as a nod to the economic problems besetting the American public — stagnant wages, continuing long term unemployment, increasing income disparity, and a still improperly regulated financial sector which gives no indication that they’ve learned anything from their last debacle in 2007-2008.  Crickets.

* the transcript link as of May 1, 2013 references another release, and if the link is corrected readers may have to click on the Speeches link on the website.

Sunday Roundup of Recommended Reading

Nevada Legislative News:    For an analysis of the tax reform battle currently on view in the Nevada Legislature, see “Mining for Clarity,” from the Nevada Progressive.  You’ll find some context in “Let’s Talk Tax Reform and Mean It” from a February edition of the Nevada Public Employees Focus, and a bit more from The Nevada View.  For more information see: “Nevada Funds Mining’s Big Mistakes,” in CityLife.  And, there’s more from the mining corporations in “Mining Rep: Republican Effort to Tax Us in Punitive,” Las Vegas Sun.

The economy:  The battle over the provisions of the Dodd-Frank Act have moved into the caliginous rule making phase.  The efforts were the subject of an MSNBC piece (video), which (finally) picks up on a review from The Hill, in which it was reported that more than half of the Dodd-Frank Act rules are still “in the works” from January 28, 2013.   There’s more from the Angry Bear economics blog,  in which we find the fraudsters now seeking to use the Sequester to cut funding for rule making and implementation.  The following does not bode well for assisting the various Federal agencies tasked with keeping up with the “creative” machinations of the Wall Street Wizards:

“Aside from federal civil and voting rights programs, investment law enforcement agencies and commissions on the chopping block include the Securities and Exchange Commission (a possible $115 million reduction), Commodity Futures Trading Commission ($17 million), federal courts ($384 million at risk), Public Accounting Oversight Board ($18 million) and the Securities Investor Protection Corporation ($23 million). In sum, $557 million could be cut from investor protection programs, barring Congressional intervention.”  [Angry Bear]

Naked Capitalism has an excellent piece on the prevarications of banking regulators who are supposed to be keeping an eye on the welfare of Americans who have money in the banks, not just the bankers who are raking in more American money, they call it “safety and security” — they mean “profitability.”  In a more general vein, there’s a MUST read post from Henry Blodget, “In Case You Needed More Proof That It’s Stupid To Cut Government Spending In A Weak Economy…” in Business Insider.    And, if you have not already read Michael Hiltzik’s piece for the Los Angeles Times, “The five biggest lies about entitlement programs,” please click over and read his summarization.  Here’s a taste:

“As efforts to cut Social Security and Medicare gather steam in the budget wrangling in Washington, you’ll hear these mega-trillions being thrown around more and more. Beware. They’re numbers designed to terrify, not edify.  The assertion comes from something called the “infinite horizon” projection. It’s a calculation of funding gaps projected out to the limitless future and then converted to present value — meaning what the cost would be if we had to pay it all today. For Social Security, the figure was $20.5 trillion, as reported in the program trustees’ latest report. For Medicare, the number comes to about $42.7 trillion. Even professional actuaries say this calculation is bogus.”

Media and Politics:  Finally! Someone calls out the Village Press Corps for continuing to bleat that the “President should reach out more…,” another Must Read is Dee Evan’s blast of sanity “More Selective Memory…” in the Huffington Post.

Little Noticed? AB 4 and verification of public information

Nevada’s Assembled Wisdom will be looking at charitable donations, background checks for those who work with children and the elderly, and a proposal to fund school maintenance projects in Washoe County. [RGJ]  There are some other bills of interest getting some attention this week, including AB 4.

AB 4:  AN ACT relating to governmental administration; authorizing the State or a local government, under certain circumstances, to publish a legal notice or legal advertisement on an Internet website maintained by the State or local government in lieu of publishing the legal notice or legal advertisement in a newspaper of general circulation; requiring the State or a local government to publish certain information in a newspaper of general circulation if the State or local government publishes a legal notice or legal advertisement on an Internet website; authorizing a public body to charge and collect a fee for providing, upon request, a copy of certain public records under certain circumstances; and providing other matters properly relating thereto.

AB 4 will be discussed in the Assembly Government Affairs Committee, on Thursday at 8:00 A.M.  I think we can assume that the Nevada Press Association will object to the measure, contending — as they do on their website — that:

“A fundamental reason for public notices is government accountability to its constituents. The notices are published through an independent party — the newspaper — to create a verifiable record of the date they were published and show that the content met legal requirements. Without such verification, government would be accountable only to itself.”

Delving a step further, public notices must be published in newspapers having a general circulation, as defined and refined:

“To meet the test of general circulation, a newspaper must publish some news of general interest and circulate to the general public. Under NRS 238.030, which provides for publication of legal notices in a newspaper “of general circulation,” a daily newspaper which contained only information taken from public records did not qualify because primary purpose of printing legal notices is to give widest publicity practicable, and a newspaper, in order to meet test of general circulation, must publish some news of general interest and circulate to some extent among general public. Nevada State Press Association v. Fax. Inc., 79 Nev. 82, 378 P.2d 674 (1963).”  [CCNLN]

Thus,  a newspaper which publishes daily, weekly, or semi-weekly, which has a “general” circulation, and contains some “general” news becomes the “independent verifier” of public notice and the requirements pertaining thereto.  This becomes controversial when we reach the part wherein counties must publish their property tax rolls.

The price tag for publishing the property tax information required of Clark County is a hefty $580,000.  [LVSun]  Advocates for the newspapers hold that the price is the cost of a transparent government, opponents argue that if the information is readily available on-line (and can be verified) there is no reason to pay for what is essentially a duplication of notice.

Another question which could be raised in this context, i.e. who’s being notified.  The Las Vegas Review Journal has a circulation of approximately 220,619 copies; the Las Vegas Weekly has a circulation of 75,000; the Reno Gazette Journal is reported to have a circulation of 43,095.  [link]  We could speculate that the major newspaper publishers in Nevada are facing some of the same numbers as their national counterparts — that is, they are looking at decreased circulation of approximately 5% annually. [LAT] The trends reported in the Los Angeles Times were predicated on (1) readership moving to on-line sources, (2) the reduction of distribution to outlying areas and bulk distributions, (3) increasing prices for print copies of newspaper publications.  Trends similar to the 2010 results were noted by the New York Times in 2009.

The Pew Research report of its study on newspaper readership issued in 2012 wasn’t very optimistic:

“In the new survey, only 29% say they read a newspaper yesterday, with just 23% reading a print newspaper. Over the past decade, the percentage reading a print newspaper has fallen by 18 points (from 41% to 23%). Somewhat more (38%) say they regularly read a daily newspaper, although this percentage also has declined, from 54% in 2004. Figures for newspaper readership may not include some people who read newspaper content on sites that aggregate news content, such as Google News or Yahoo News.”

Two graphics illustrate the issue concisely.

In terms of newspaper readership, the numbers aren’t reassuring:

When there’s an 18% drop in newspaper readership since 2002, the question should be raised: Who is being notified, to whom is information being verified, when the state or local governments are publishing information to a progressively smaller number of people?

The newspaper publishers have a valid point in saying that some independent agency should verify the context of the public notices required by law.  On the other hand, it’s hard to contend that the publication of notices and information doesn’t constitute a form of public subsidization of a private news enterprise.  Another issue concerns the type of information required.

Do we need to publish hard copies of the property tax rolls?  Yes, some readers do use the information to compare property values; but, yes, others are simply nosy parkers who delight in seeing which of the neighbors might be delinquent in their property tax payments.  Is there a substantive difference between publishing property tax rolls and information like requests for bids on government capital improvement projects costing more than $250,000?  Here’s hoping the Government Affairs Committee will take a careful, and thoughtful, look at the implications of public notice requirements.

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A bit more blatant blog flogging:  The Fix is seeking nominations for state based political blogs to add to its annual list.  Your nomination for Desert Beacon would definitely be appreciated. Link Here.

Posting Mortems on the 2012 Election

There are about as many theories as to why Democrats were more successful than Republicans at winning Congressional or national offices as there are certified pundit chatterati to propound them.  Political scientists and political consultants will be pouring over the results for the next two years, and their elucubrations are certain to be the stuff of which political dreams (and perhaps nightmares) are made for the 2014 cycle.  Perhaps too much of what will be produced might be safely dismissed.

We Coulda’ Had A Contender?

The statisticians have yet to apply their fine-toothed combs to the 2012 election results, but the Republican Party, should it not wish to join the Cotton Whigs as a chapter in ancient U.S. History, may want to devise a political platform less oppositional in nature.  However, like their predecessors in Whig-dom, the Republicans are currently offering little more than the same kind of anti-government, fundamentally oppositional, philosophy which informed the opponents of Andrew Jackson. Reagan’s “government is the problem” strategy combined with the Southern Strategy could be characterized, at least superficially, as the logical extrapolation of Whig thought. If the combination was powerful enough to work in previous elections, then why didn’t it work in 2012?

One element of the answer is that in order to be a contender a candidate must represent a vision of America which Americans find appealing.  While negative advertising works tactically, a negative strategy is more difficult to sell.  Reagan’s genius was to turn populism on it’s head — reframing the discussion from how to utilize the government to  protect middle income and working Americans into a discourse about how to restrict government “intrusion” into a generalized notion of private life.  Several specific issues lent themselves to his formula — desegregation, gun control, and a broad attack on “welfare,” defined as any form of government benefit or assistance. However, there is a shelf life for specific issues, and just as items in the refrigerator ought not be eaten after they’ve had an opportunity to become bacteria cultivators for four days, political issues get either stale or toxic.

Republican candidates for national offices were saddled with a 1968 Southern Strategy combined with  Reagan anti-government rhetoric mixed with the Rovian calculation that a coalition of evangelical voters and Wall Street executives and bond traders could be sustained.  Why did they still think this would work?

Because it once did, a notion  rather like believing that at one point in time the macaroni salad in the refrigerator was safe for human consumption.   Let’s not be too hasty to draft the obituary for the Republicans, they still have a fundamentally sound philosophical pantry.  It’s the left overs in the refrigerator that are giving them problems.

The notion of limited government does resonate with the American public.  Where the campaigns deviated from this concept is the point at which the Republican contenders were reduced to pretenders.

When Republicans sought to appeal to their evangelical base, especially the most conservative anti-abortion voters, they faltered badly.  The GOP controlled House of Representatives expended an inordinate amount of time and effort in the 112th Congress on anti-abortion bills; while the public waited for ‘jobs’ legislation. Republican candidates who commented on “rape” invariably found themselves on the losing side of the ledger.  Dissonance, which might be acceptable within the party, became cacophonous when individuals not heavily invested in party identification tried to reconcile individual privacy and limited government with trans-vaginal ultrasound procedures and definitional contortions concerning what constitutes a rape.

When Republicans sought to appeal to their financial sector base, with a perfect candidate in that realm, those working in the ‘real economy’ were horrified by the headline, “Let Detroit Go Bankrupt.”  In financialist terms allowing the automobile industry to be liquidated would have made perfect economic sense.  In mixed economy pragmatic terms it would have made for a perfect disaster.   In practical political terms it was a buzz killer of the first water.

Another feature of the Republican problems of 2012 is that they  are marginally reminiscent of the controversies in early church history.  One of the problems associated with  confessional orthodoxy is that the larger the congregation the greater the propensity of the members to behave more like squirrels in a wheelbarrow than soldiers on parade.  A confession of faith requires the conformation of the Apollinarians, the followers of Docetism, the adherents of Donatism, the advocates of Eutychiaism, and the proponents of both Monophysitism and Monothelitism.  The point is that the narrower the definition of “membership” the smaller the number of members.  While this certainly prevents heresy in the body of the church, if the process isn’t curtailed in politics the results are predictable, without requiring extensive polling.

As long as Republican candidates must pass muster in primary elections and caucuses with a political base intent upon eradicating political heresy, then the candidates risk being out of step with more and more voters.  Do candidates have to pass the heresy test before receiving support from the national party? If the answer is an unqualified ‘yes’ then the number of potential candidates is reduced, and if the number of possible candidates is restricted then the appeal to the general populace is as well.

The Democrats had similar problems in the ’80′s — being defined by the opposition as ‘big spenders,’ and ‘big government’ heirs of the Great Society.  They, too, have their problems in the wake of the 2012 election.

You Never Step In The Same River Twice

The worst use of political  postmortems would be to believe that the past is not only prologue but predictive.  Republicans who thought that the 2012 election would look like its 2004 predecessor were very disappointed.  Democrats who believe that the strategies, tactics, and issues of 2012 will be the same in 2014 are asking for trouble.

Some precepts are timeless: Identify your opponent before he or she can self-define; or, the ground game is the best game in town.  However, there are some elements which are not static.  A good issue or policy position is one for which the ground has been prepared.

Same sex marriage, once used as a wedge issue to drive GOP base voters to the polls, is an example of a River Change in American politics.  An openly gay person will be serving in the U.S. Senate for the next six years, and members of the LGBT community have achieved  offices during the last elections.   The activism of the community prepared the ground such that what was once a wedge issue is now a non-issue in much of the United States.

It’s easy to campaign on the “economy,” everyone does it; but, to conclude that the 2014 elections will be driven by the same kind of economic issues which were in the forefront in 2012 is problematic.   One bit of ground being plowed to greater effect is the revision of the Supply Side theory — once the darling of the business media (and still a strong force in public debate) — this notion has taken a beating in the aftermath of the Recession of 2007-2008.  It may take a further beating if the austerity measures enacted in Europe continue to create lower rates of economic growth than in the United States which has not adopted austerity based economics.

This optimism should come with a warning label:  Ground does not plow itself.  Those who believe that only austerity based policies or only growth based economics are the sole solutions are likely to be disappointed in a mixed economy.  Fiscal restraint is a good thing.  So is government spending to secure automatic stabilizers, to add value to our national infrastructure, and to prevent too many citizen consumers from falling into abject poverty. The consultants (already planning their next gigs) would be well advised to look not to “what worked” in terms of policy based positions in 2012, but toward what are likely to be the newer issues of 2014.

Are we sufficiently attentive to plowing ground to secure popular understanding and support for the renovation of our national infrastructure?  Are we making furrows and seeding greater comprehension of climate change or immigration issues?  Are we aiding popular understanding of educational and technological innovation issues?

Those individuals who think that the election results of 2012 mean we don’t have to discuss austerity economics because “the President won” may be very disappointed if the opposition does a better job of communicating a resurrection of  Trickle Down economics… or if the current  misapplication of “Makers and Takers” definitions persists.  If we aren’t telling the neighbors that Makers are workers who provide goods and services then we ought not be surprised when the Wall Street definition of “Maker” as a hedge fund manager speculating in derivatives becomes a popularly accepted political term of art.

Never Read Your Own Press

If Governor Romney was truly “shell shocked” to discover that he wasn’t winning the election, then he was probably trapped in the Faux News cycle of self referenced self informing self justifying self satisfying information.  One of the oldest adages for any business which deals directly with the public is — The only good news is bad news.

The adage’s implications are obvious.  A company will never improve its products, or never improve its services, if it never finds out anything that might be wrong.  A company which ignores customer complaints about its product shouldn’t be surprised to see declining sales.  A firm which ignores customer dissatisfaction with its level of after sale service will awake — preferably before bankruptcy — to find the customers have gone elsewhere. The adage is just as true for politicians and the citizens they serve.

The politician who only listens to members of his Country Club should not expect to get increasing support from middle income constituents.  Nor should a politician who understands only the perspective of labor leaders expect to comprehend the needs of local retail business owners.  Likewise, a person whose exclusive sources of news are highly polarized may find that like the Apollinarians of faded memory they belong to a marginalized cult rather than a broad element of the body politic.

Polarized information comes in various forms.  We have a spectacular example of a propaganda corporation (Fox News) the sole purpose of which appears to be to fire up whatever portion of the base needs to be manipulated to serve opposition purposes.  They’ve created a relatively fact free zone.  However, it’s only slightly less deleterious to create a zone in which selective facts are provided, without acknowledging that other, more unappealing, elements also need to be considered.  Half baked arguments come from half informed advocates.

Meanwhile Back In The Real World

In an era in which information and data are immediately at hand there is no excuse for the perpetuation of myths which serve the polarization and misinformation now on display.  Our political discourse will be improved when we decide to speak plainly and as accurately as possible.

It is high time to rid ourselves of the myth of the Welfare Queen.  She served her purpose 40 years ago, when she  was the mistress of racial animus. It is also time to stop using euphemisms for privatization.  We could also do with fewer references to collateral damage — a drone strike is a deadly drone strike.  Its time to stop lumping all forms of government assistance as entitlements — Social Security and Medicare are entitlements because we’ve already paid for the programs.  No one is “entitled” to TANF or SNAP benefits; families have to meet qualification standards to receive them.

Part of the improvement of our national discussions should be promoted by our media, but that doesn’t let the rest of us off the hook.  We will get what sponsors think we want — and if we want euphemisms, code words, dog whistles, and conflation that’s what we’ll get.   If we want sharks, bears, and freaks, we’ll get sharks, bears, and freaks.

In short we need to be contenders, never pretending to accept orthodoxy for its own sake; we need to accept that if the past never even past then we’re trapped in our own preconceptions; we need to avoid reading and believing our own press; and, we need to clean up the language in which we converse with one another.   We have some work to do before 2014.

Want Better Answers? Ask Better Questions: Bigger Ideas in Economics and Foreign Policy

One of the less attractive features of our 24 hour cable news environment is the tendency to spend countless hours “debating” minutiae.  “Oh, what will be the political impact (read polling numbers) of Candidate Sludgepump’s statement on Invasive Species in the Rollinmuck River?”  Or, “What can we tell from the polling numbers on the proposal to limit the brim size of hats worn to the Kentucky Derby about the 2016 elections?”   OK, these questions are Off The Wall, but you get the point.

Whilst the Villagers of the D.C. media establishment investigate the ramifications of political bits and pieces as they relate to whose barnyard will have the most exclusive clientele in the pecking order, there are some larger questions which aren’t being addressed in the policy department.   I should live so long as to hear a broadcaster attempt to define broad policy issues in comprehensive terms.

For example,  it’s all well and maybe even remotely interesting to listen to the Chatterati expound on the relative merits of reducing our national unemployment rate to 8.1%, and to the GOP proclivity for moving the goal posts in political terms — Now it’s “Gee, we ought to have 4.0% unemployment”  — Do you see 4.0% unemployment on this chart?  There are some rates in the 4′s during the housing bubble — and that’s the real point.

If we define a “strong economy” solely in terms of unemployment numbers, the bigger picture gets muddled.  A better question would be to ask: What steps can an Administration take to better insure economic growth and stability in the 21st century?  Growth and stability are combined in this question because to have growth without stability lands us right back into the mess we faced in December 2007 when the Housing Bubble started leaking profusely.  Stability without growth already has a popular definition — stagflation.  In short, can we ask better questions?  And, can we address components of our overall economic policy which might impede or impel our progress in the 21st century?

#1.  What administration policies can best insure the efficient operations of our financial markets such that a consistent and adequate supply of capital is available for both our entrepreneurs and established businesses?

Is “de-regulation” and continued emphasis on Financialism in the Wall Street Casino really in the best interest of our capital supply chain?  Or, will we need more transparency and oversight in our financial markets to reduce the tendency toward speculation and encourage a tendency toward investment?

Do we need to adjust our tax policies such that the enthusiasm for speculation doesn’t impede our goals for increased investment in new industries?  Do we need to use our tax policies to encourage domestic investment, and to discourage off shore tax haven use, and other such loopholes?

#2.  What measures can an Administration take to position the United States in positive territory for areas of expected economic growth?

For example, one of the top growth areas predicted for the next decade is scientific, technical, and management consulting service.  Close behind are services for the elderly and disabled, along with home health care services.  Also on the list we find computer system design and merchandising.  [CBS]

It would seem that in the short-term, like the next 10 years, we should be listening to candidates who have advocated, or are advocating, ways to encourage young people and those in transition to move into health care related fields and technical or management consulting training.  Are we educating enough scientists? Enough home health care aides? Enough financial examiners? Enough bio-medical engineers?

If we look beyond the ten year horizon, are we positioning ourselves for new energy markets?  Because, “Over the next 25 years, the worldwide market for renewable/solar energy and energy efficiency represents a multi-trillion dollar opportunity for U.S. firms.” [JM]   Are we going to be set up to take advantage of this multi-trillion dollar opportunity? Or, are we still going to be squabbling over a sour loan to a company that was in the wrong place at the right time when panel prices plunged?  A failure to position ourselves to compete for those “multi-trillions” because we’re watching our pennies rather than counting our opportunities would be a sad thing indeed.

#3.   Are we establishing precedents and relations in foreign policy which will be beneficial to long term American interests?

Let’s assume that in the best of world’s U.S. policy should be to maximize our friendly trade and political relations and minimize those issues which would place the U.S. in embarrassing or counter-productive alliances.  It’s always nicer, both economically and diplomatically, to have more friends than enemies — however, no one expects us to arbitrarily give up on our own best interests.

(a) What can the United States do to improve our relations with important trade partners, without compromising our own best interests?

(b) What can the United States do to improve our relationships with emerging nations like Brazil, Russia, India, China, and Korea?

(c) How can the United States best approach political, religious, scientific, and business leaders in the growing Muslim parts of the world?  And, how do we establish working relationships while still attending to the security needs of Israel, the political movements in places like Yemen and  Sudan, and the religious strife in northern Nigeria?

(d) If diplomacy fails, then how does the United States respond to the asymmetrical warfare of the 21st century?  Are our weapon systems and command structure calibrated to the Cold War era or to the more widely disparate threats which must be met by more modern military operations?

There are some very large issues facing the U.S. and its citizens in 2012, and we would be better served by journalism which helps us define and refine those questions than by “politicking” repartee which may (or may not) shed light on the domestic political implications of those questions without providing us with much reliable information concerning how to address them.   If we want better answers, then we need to ask better questions.

If At First You Don’t Succeed: Limbaugh’s Non-Apology

It seems as though every liberal or Democratic blogger took at least one shot at Mr. Limbaugh’s attempt at an apology to Sandra Fluke.  Most of the posts parsed the content and concluded that the statement was inadequate based upon the usual problems with non-apology apologies, i.e. that the statement didn’t amount to much of a Mea Culpa while it dodged central issues.  Put more tactlessly, a sincere apology never implies IF, nor contains an IF, as in “I’m sorry IF some were offended.”  That kind of statement puts the onus on the listener, not the speaker.

Let’s take another look at Mr. Limbaugh’s statement from some other angles. Note, first, the underlined expressions in the statement issued by the radio commentator.
————————————
“For over 20 years, I have illustrated the absurd with absurdity, three hours a day, five days a week. In this instance, I chose the wrong words in my analogy of the situation. I did not mean a personal attack on Ms. Fluke.

    I think it is absolutely absurd that during these very serious political times, we are discussing personal sexual recreational activities before members of Congress. I personally do not agree that American citizens should pay for these social activities. What happened to personal responsibility and accountability? Where do we draw the line? If this is accepted as the norm, what will follow? Will we be debating if taxpayers should pay for new sneakers for all students that are interested in running to keep fit? In my monologue, I posited that it is not our business whatsoever to know what is going on in anyone’s bedroom nor do I think it is a topic that should reach a Presidential level.

My choice of words was not the best, and in the attempt to be humorous, I created a national stir. I sincerely apologize to Ms. Fluke for the insulting word choices.” [C&L]

——————————

Mr. Limbaugh is NOT apologizing for the attacks. This should be obvious considering that he apologizes ONLY for the “choice of words” three times in a single statement.

Oh, now what might have been other word choices? At the calculated risk of printing out offensive synonyms, instead of “slut” might he have referred to someone as a “whore,” a “floozy,” a “prostitute,” a “moll,” a “hooker,” or a “nympho?”  Would choosing any of those terms have been less misogynist? Less bigoted? Less offensive?

He didn’t mean his commentary to be personal?  Why then did he use her name specifically? Why then would he refer to her parents? No, this was not humorous, it was not comic, it was not “absurd,” but it was personal, mean spirited, and misogynistic.

It’s to be wished that more commentary on Mr. Limbaugh’s broadcasting had noted that he’d completely missed the point of Ms. Fluke’s testimony.  She was describing the plight of a young woman with polycystic ovarian syndrome (commonly treated with contraceptive medications) [Facts/PCOS] who could not access these prescriptions because her health plan didn’t cover them.

By the way, there may be as many as approximately 5,000,000 women in this country affected to some extent by this syndrome. [Facts/PCOS]  Rather than argue against providing insurance coverage for those afflicted with this syndrome, Mr. Limbaugh trotted out his poutrage about contraception.  In fact, about 58% of women using The Pill are NOT using it for contraceptive purposes. [Guttmacher]  Rather than argue against providing insurance coverage for that 58% who seek relief from menstrual problems, severe acne, and endometriosis, Mr. Limbaugh took off on “loose women.”  Completely. Missing. The. Point.

No one who takes women’s health issues seriously would begin to argue that contraceptive medication isn’t a private issue between a woman and her doctor, whether the prescriptions are written for contraceptive purposes (42%) or non-contraceptive purposes (58%).  At this juncture, Mr. Limbaugh can’t have it both ways: Either the government can intrude by excluding contraceptive prescriptions from basic coverage (and thus benefit the health insurance corporations) or the government can remove itself from the discussion between a  woman and her physician and declare that health insurance corporations which want to sell their policies as “basic” must include those prescriptions.

No one is laughing. Mr. Limbaugh has tried his line before.  Given the context of the discussion, this was no more an exercise in the Theater of the Absurd than his commentary on having poor children dumpster dive for dinner. [C&L] This is no more a comedy routine than his bigoted remarks about Hispanic Americans and African Americans. [NewsOne] “I was just joshing” is NOT an apology for racism, bigotry, or misogyny.

We have terms for those people who find sending e-mails about the President being the product of bestiality, or the growing of watermelons on the White House lawn, or commenting on “sexual recreational activities,” amusing — we call them racists, bigots, and misogynists.

We don’t call them “funny.”

Dear CNN, Do We Need Chicken Fight Referees?

I don’t particularly owe the investors or advertisers involved with CNN, or MSNBC, or Headline News (or whatever they’re calling it these days), or Fox Noise an explanation for why I’ve turned them off, but in the extremely minimal chance they wanted one — here it is.  It’s simple:  If I want to be entertained I am more likely to click on a cozy mystery melodrama or a sporting event.

Perhaps this is a bit old fashioned, but my definition of news is reporting on recent events, or the provision of recent information.  All too often I found myself talking back to the Talent on the Talkie Shows — “I knew that already.”  Or, “Why didn’t you ask about (fill in the blank)?”  Or even, “So What?”

In short, what I find unwatchable is that which is (1) uninformed, (2) artificial, and/or (3) inadequate.  The cable broadcasters, and in some areas the Mighty Networks themselves, have mastered all three.

Uniformed.  I know that an anchor should appear objective, and unfortunately in all too many cases objectivity is subsumed into passivity.  The terms are not synonymous.  That I can sit back during a discussion of the Earth’s shape between the Flatlanders and the Spherical Workers and take no position doesn’t mean that I am being objective.  Objectivity requires at least a bit of obeisance to facts.  Objectivity would also reduce the instances of the silliness extrapolated to its illogical extension in this critique:

“If one party wants to chop up kittens to feed them to the elderly, and the other wants seniors to get gift certificates to Applebee’s, then the obvious answer is to give them gift certificates for purchasing dead kittens. If one party wants to nuke the entire planet just for sport, and the other party, say, wants to nuke nothing, then only a snob or a flaming liberal would object to nuking half the planet as reasonable compromise.”  [Hunter]

Nor are the viewers served by broadcasts which impart unchallenged inaccurate information.  One of the recent classic examples is the Republican charge that most people don’t pay taxes.  Even the most cursory checking would yield the information that most people pay payroll taxes, and that those who don’t pay federal income taxes are earning wages below the liability level.  How many cable broadcasts balanced the information about tax liabilities with data concerning income levels and liability?  How many left the talking point unchallenged?

If all a person is going to do during a broadcast is to unleash the Talking Point Tantrums then I question why any cable network would pay anything over minimum wage levels for the Talent.  It seems to me that this would require no talent whatsoever — more talent, knowledge, and skill would be required of a referee at a chicken fight. We outlaw chicken fighting because it is cruel to the birds, but for some reason we don’t proscribe Talking Point Tantrums which are an exercise in verbal abuse of fellow human beings. Not to mention the insult to the viewer’s intelligence.

Most of the cable broadcasts are predictably formulaic, and the Talking Point Tantrum sessions are perfectly predictable:  Anchor introduces the subject, introduces a couple of Talkers, Talkers talk over one another, engage in eye-rolling and head shaking, and are allowed to continue this performance until someone announces “Time’s Up.” For all the Talent this requires, a network could save money by simply putting both “analysts,” or “(fill in the blank with the party name) strategists” in a room with automatic lights — they start talking when the lights come up and quiet back down when the lights go off.  Nothing is required, and as expected nothing — especially unfiltered information — would be gained. Little wonder we have a nation-load of Low Information Voters.

Artificial.   If straw men created by political pundits were counted as part of our national population we might increase our numbers by a considerable percentage.  In more literal terms, using straw men means that if I don’t like the question being asked I can change it to a question I do want to address.  Straw men and red herrings have much in common.   The acceptance of Straw Men as participants in our national policy debates compounds the artificiality of our discussion.

For example, during the debates over health care insurance reform Democrats wanted to talk about the number of people left without insurance while Republicans wanted to talk about “creeping socialism.”  Neither side was particularly anxious to speak to the issue of health care cost containment.   Thus, just about every sentient being in the United States was familiar with the elements of the bill that might Kill Grandma (a highly questionable position on paying health care professionals to counsel end of life arrangements and requests) or prevent insurance corporations from abusing rescission clauses to jerk the benefits back from the policy holders.   How many people in the United States can identify even one of the ACA’s elements to curb the increases in health care costs?

While a crucial issue in health insurance reform was relegated to the level of interest displayed in the “League 2″ football association (think Hereford United and Bristol Rovers), Premier League attention was paid to non-existent “Death Panels,” and rescission policy abuse statistics.  Lost in this cacophony of dueling talking points and straw man arguments was most of the information about the monopolization of the individual health insurance market in major parts of the United States.   The information was there, but some digging was required — rather like finding the score of the Hereford vs. Wimbledon FC game.

Manufactured Outrage Moments are a significant part of the whole artificiality problem.  Some politician or celebrity — or better still some celebrity politician — makes a gaffe, or even a statement that can be spun into a gaffe — and the race is on!  Apologies are demanded for insults real or imagined, to people or groups, real or imagined.  Astro-Turf organizations add spurious press releases to the mix.  The TV Talent plays along.  “Senator Sludgepump, in light of the Chicken Hawk Protection Society’s outrage over animal cruelty implied during last week’s debates, what do you think of Senator Bilgewater’s comments about plucking feathers from chicken hawks?”

OK, no one wants to go on record in favor of animal cruelty, and few politicians get into office because they don’t like to talk, so Sludgepump and Bilgewater have the imprimatur of the cable news networks to engage in their Manufactured Outrage Moments until all the feathers are off the old birds.  Advertisers may be willing to pay for this, I’m not enthusiastic about watching the performances.

Inadequate:  Consider for a moment the current “crisis of capitalism.” Evidently the 1% will fight to the death for the preservation of capitalism, as they define it. Just as evidently, there are those on the far left who perceive capitalism as a dying system in some form of death dance.  Both extremes see Peril.  There might not be so much attention to the extremes were it not for the If It Bleeds It Leads dogma so apparent in cable broadcasting.

Networks, eager to enhance ratings, need Drama.  Missing white women and infants! Sharks! Bears! Fires! Street Fights! We tend to exaggerate the dangers posed by kidnappers, sharks, bears, fires, and street fights because of the immediacy of news items concerning them — there is an illusion created that these are much more common than statistics bear out.  In this context it’s easy to see how a “crisis of capitalism” can be stage managed.

What may very well be a crisis of political leadership can be stage managed into a crisis of capitalism. “Capitalism comes in many forms — and orthodox economics encompasses them all. Heaven knows, we have a lot to learn and lot to put right, but this is not an ideological crisis. The West needs an intellectual revolution about as much as it needs a dictatorship of the proletariat. ” [Bloomberg]  It would be very helpful if the broadcasters would breathe deeply, and calm down.

Jerking from one artificial or over-emphasized crisis to the next gives the impression that members of the press have the attention span of fruit flies.  When there is a gaping 24 hour hole to fill with something, everything can take on an appearance of importance far beyond its actual relevance. And, moving at this pace all too often means that background information, history, and in-depth analysis is shoved out of the scene in favor of the Next New Thing.

The notion that News has to be Entertaining begets Info-tainment.  We probably know more about the function, operation, and benefits of mechanical exercise equipment than we do about the function, operation, and benefits of our bond markets.  However, we are experts on Great White Shark attacks, bear relocation, and police procedures for crowd control and the composition of pepper spray.  We are not so well informed about shark populations in times of global climate change, bear management in our national parks, and the various levels of success local police departments have experienced in their efforts to balance First Amendment rights with their responsibilities to protect property

What we don’t get from our cable news outlets is real, accurate, contextual, and adequate information.  We’re getting entertained at the expense of getting informed, and the packaging is part of the problem:

“When the Super Bowl ends, we move on with our lives. When the 2012 presidential campaign ends, we’ll likely do the same — rolling up our collective shirtsleeves, meaning business, not having the foggiest idea of how to solve our most pressing national problems, thrilled and diverted nonetheless. When all you have is a hammer, everything looks like a nail; when all news is SportsCenter, everything is just a game.” [Atlantic]

Amen.

Personal and Political, Information, Info-tainment

Politics gets personal:  Not that the Santorum presidential bid is going anywhere, but Mr. Family Values was involved in Nevada’s infamous L’Affair Ensign. [Las Vegas Sun] The Silver State will now have another 11 months of blustering from the potential state senate GOP caucus chair (Sen. Michael – Dangerous Driver – Roberson) who believes that the Democrats have been picking on the Gop’ers. [RGJ]  Nevada potentate, Sheldon Adelson, is bankrolling the Gingrich assault on Willard Mitt Romney, [SlashPolitics] leaving us with an interesting scene in which an ultra-conservative beneficiary of deregulation and financialism is attacking one of the prime proponents of deregulation and financialism. [see more at TPM]

Politics trumps rationality:  Conservatives are cheering the decline in public sector employment shown in the last report from the Department of Labor.  “Maybe, conservatives argue, the economy will improve when more teachers, police officers, and firefighters are unemployed and unable to spend and invest.” [WashMonthly]   There’s a hint here — it is more important to conservatives to shrink government (at all levels) than it is to create jobs.

“Government employment changed little in December but was down by 280,000 over the year. Job losses in 2011 occurred in local government; state government, excluding education; and the U.S. Postal Service.”  [DoL]

There are those who will argue, illogically, that the decline in government jobs causes an increase in private sector employment.  See! Look! Private sector employment is up because public sector employment is down.  The assertion falls apart when we look at the way we calculate our gross domestic product.

GDP = C + I + G + (X-M)

That would be consumer spending + gross investment + government spending plus (exports minus imports.)  David Leonhardt calls the reduction in public sector employment an “unforced error.”  When we subtract public sector activity from our calculation the gross domestic product is reduced, and the lack of public sector employment becomes a drag on the total economy.  In other words, austerity never produces prosperity.

Politics trumps accuracy:  Bain Capital Management (former CEO Willard Mitt Romney) isn’t in business to be a “Job Creator,” it exists to improve the position of the investors.  “Bain’s modus operandi was to invest in companies, leverage them up with debt, and then sell them off for scrap, allowing Bain’s investors to walk away with huge profits while the companies in which Bain invested wound up in bankruptcy, laying off workers and reneging on benefits.”  [Think Progress]

Then there’s the part about paying taxes:

“Romney gained no personal tax benefit from the legal operations in Bermuda and the Cayman Islands. But aides to the Republican presidential hopeful and former colleagues acknowledged that the tax-friendly jurisdictions helped attract billions of additional investment dollars to Romney’s former company, Bain Capital, and thus boosted profits for Romney and his partners.”  [LATimes]

Ergo, it is perfectly OK in Republican circles to note with dismay that people who don’t earn enough in annual wages and salaries to be liable for federal income taxes are “leeches upon the rich.”  However, it is perfectly acceptable to allow capital management firms to use off shore tax havens to protect the rich from their tax liabilities.

The Amen Corner:

“First and foremost, sports-style coverage oversimplifies politics, reducing complex issues to either/or propositions. Binary thinking is fine for the make-believe realm of athletics, where matters are dramatic by design: defined conflict, clear-cut resolution, heroes (your team) and villains (the other guys). Referees and instant replay when necessary.

Politics, on the other hand, is confusing, nuanced and muddled. Today’s ally is tomorrow’s foe; various interest groups have equally legitimate claims and grievances; democratic legislation is the product of soggy compromise, providing not the best solution but rather the one the greatest number of people hate the least. Outright victories are rare. Desultory ties are the norm.”  [Atlantic]

However, this doesn’t prevent the cable news broadcasts from presenting political news as if it were an athletic contest.  So, instead of background information and context concerning the level of the federal debt, we got who was scoring more points with the public.  Instead of contextual analysis and accurate information about the state of health care insurance coverage in the United States, we got poll numbers on the  ‘popularity’ of health care reform.  Instead of perceptive and insightful discussions of foreign policy, we get two pundits talking past one another.  Bill Moyers was right:

“Because market-driven television has failed to provide a true marketplace of ideas it has betrayed the founders’ belief that constitutional freedom of the press would produce an uncensored competition of ideas, opinion, and information, giving Americans the means to think as citizens. What we have instead is a very narrow range of political debate usually between partisans of two parties both deeply corrupted by their complicity with the media and their dependence on big money.”  [Moyers]

Would It Be Too Hard To Deliver Some Real News?

One of the more unfortunate results of the Financialist bent in our economy is the corruption of business and economic news.   On national broadcasts “the economy” is often reduced to a few moments during which the Talent will inform us of unemployment figures (maybe) or some other statistics (perhaps) before dutifully reciting the latest numbers from the New York stock markets.

All too often the script goes something like this: “The Department of Labor released its unemployment report for (fill in the date) showing a moderate uptick in private sector employment for the month of (fill in the date).  The Stock Market, which opened slightly down this morning reported gains in the early afternoon after the report was released.”  And, then come the numbers.

The first question for most viewers probably ought to be: So What?

The stock markets are filled with traders. Traders trade. That’s what they do for a living.  They would trade if the employment numbers went up — with maybe more “buys.” They would trade if the employment numbers went down — with maybe a few more “sells.”  However, shifting from the employment numbers to the stock market numbers gives the appearance that the two are inextricably and causally connected.  They may not be.

For example, we could have the best employment improvement in the past year, but if the Eurozone starts to implode I’d be as willing as a bond trader to bet that the “the markets” will go down.  The one thing the stock market report does tell us is that human beings are essentially herd animals and it doesn’t take too much to stampede the cavvy.  Anything and everything can be interpreted as a rationale for trading.

Lately, the most extended “economic” informational stories have been related to the housing market and recessionary pressures on middle class Americans — “The impact of layoffs”… “The Sad Tales of Foreclosure”… with little context supplied to the subjects.   We ought to be able to ask more informed questions.  How many of the present foreclosures were precipitated by homeowners who refinanced homes in which they had some equity?  How many of the foreclosures are related to families with profound medical expenses?  How many of the foreclosures are the result of homeowners who were sold NINA loans by subprime lenders like Ameriquest?  How many are the result of fraudulent appraisals conducted by unscrupulous brokers?  How many homeowners were unable to refinance because of a deterioration in home values, when the original values were inflated?

Without contextual information the simplistic charges and counter-charges made by Wall Street apologists on one hand and those who defend the “flippers” on the other — “It’s All Goldman Sachs,” “It’s All Fannie and Freddie,” or “It’s All Irresponsible Homebuyers” — are allowed much more credence than they deserve.

The context is available.  There are several excellent publications which address the collapse of the housing bubble — but most viewers are on their own to locate these references.  There are reports available from the Department of the Treasury, the Office of the Comptroller of the Currency, the Department of Housing and Urban Development.  However, you have to find them yourself.  Spending time searching The Web for information means you’ll probably have to miss broadcast news about the latest natural disaster, shark or bear attack, house fire, and political trivia.

The situation on the so-called “business channels” is even worse.  Nearly every segment relates to “what does this mean for the Market?”  “This” being nearly any imaginable topic.  If the “analysts” aren’t analyzing, then we can bet that someone will be interviewing the manager of Flight By Night Securities about his (rarely hers) predictions for the “investment picture” for the foreseeable future.  That the prognosticators fell flat on their faces in late 2008 is “old news.”

The truly sad part of the housing bubble collapse story is that the information WAS out there.  Contrary to some popular versions of the narrative, more than just a handful of investors and fund managers were cognizant of increasing default levels, increasing numbers of subprime loans being sold even to people who could have qualified for conforming mortgages, and the decreasing underwriting standards that polluted the whole system.  So, why does it seem like so many people were so surprised when the bottom dropped out in 2008?

The best answer may well be that they weren’t, but that doesn’t mean that the casual viewer of nightly news casts and cable business broadcasts had the information.  The cable business channels cater to the Street. That would be Wall Street not Main Street.  Heaven forfend they should broadcast nay-sayers who might cause the Herd to Stampede for the exits.

Therefore, what the cable business channels will impart is primarily Financial news, which fits right in with our current financialist tendencies. “Financialism is an economic system where the primary activity consists of creating and manipulating financial instruments.” [SeekingAlpha]

We knew that manufacturing had taken a hit in this country, but this wasn’t a topic worthy of much consideration on the financial channels.  Therefore, the information was broadcast piece-meal, if at all.  Off-shoring, and out-sourcing were “old news,” and the attention deficit disordered media moved on.  Unfortunately, the layoffs had an impact on local economies and local housing developments.  There was a total picture, but we were getting jig saw puzzle pieces of it straight out of the box.

We knew that we were getting besieged with offers of home equity loans, low down payment auto loans, and applications for every credit card sponsored by every entity under the sun.  What we didn’t know was that these were being manipulated into asset based securities — that the asset based securities were being manipulated into CDOs — that the CDOs were being manipulated into synthetics — that people were out there buying Credit Default Swaps on the whole mess.  The primary economic activity moved ever closer to the “creation and manipulation of financial instruments.”

Outside of some egregious examples of corporate rapacity, most of these activities were conducted in broad daylight.   Brooksley Born had already sounded an alarm on the lack of CFTC derivatives oversight.  Sheila Bair had been warning about the subprime mortgage market since 2002.  The Office of the Comptroller of the Currency had a working paper, “Specification and Informational Issues in Credit Scoring,” published in December 2004.  There was a red flag in the OCC report surveying credit standards in September 2004, “ At the product level, only three of eight retail products were reported to have a net increase in credit risk in the past 12 months – credit cards and the two home equity products. Examiners cited a decline in the quality of credit card portfolios and concern about external conditions for credit cards and the two home equity loan products as the reasons for the increased risk.“

And, the band played on… as if the strains of “Nearer My God to Thee” could still be heard coming from the deck of the Titanic.  Enron, World Com, and Tyco sank — and the happiness people on our television sets kept ‘informing’ us the economy was doing well.  Most people were unaware of the ramifications of the Alternative Mortgage Transaction Parity Act.  The television talent continued to interview CEOs and fund managers.  That J.P. Morgan had been allowed to get relief from capital requirements by using credit derivatives since 1996 wasn’t common knowledge.  Bankruptcies, like that of The Money Store in 2000, should have caused the red flags to fly — they were still at half mast.

The capacity of the American public to take on more debt was questioned when regulators and analysts noticed that the mortgage industry shifted from primary loans into refinancing.  The American public was less informed of this shift than of the “housing start numbers,” and the effect those had on major construction company stocks.

With the advent of Occupy Wall Street the broadcast media “discovered” income inequality trends.  Actually, the San Francisco Federal Reserve published a paper in 2007 saying: “Over the past four decades, overall income inequality has increased in the U.S. One particularly striking feature of the data is that the income gap has widened most between the top and the middle of the distribution, while it has remained relatively stable between the middle and the bottom.”  The paper drew on sources going back as far as 1994.   The broadcast media briefly glimpsed at the global GINI coefficient, meanwhile U.S. residents were living in it, and in the increasing gap between the top 1% and the remaining 99%.

Thus what we now have is a broadcast media which is calibrated to report financial news, all too often without contextual or historical references, and with an emphasis on the reactions of markets — not the reactions of those who are major participants in our overall economic life.

The media evidently consider it sufficient if a representative of the NFIB is speaking of small business, without asking if the association’s position actually represents the interests of businesses employing fewer than 50 people?  Or, that it seems sufficient to have a ‘panel’ consisting of fund managers discussing the turn-around in the automobile industry?  Or, to find no reason to discuss the fact that on the day Kenneth Lewis, CEO of Bank of America told his shareholders All Was Well, his bank owed the Federal Reserve some $86 billion dollars. [Bloomberg]

This really isn’t enough for an informed citizenry.  However, until the day the business channels and nightly recitation of stock market numbers are transformed into realistic economic reporting, we may have to make do for ourselves using print media, blogs, agency reports, and then put the pieces of the puzzle together for ourselves.