Boehner is resigning. Maybe that explains some of the crying yesterday.

Just heard this news. Boehner is resigning from Congress at the end of October. Maybe the Pope got to him. He was crying nonstop yesterday. Maybe the Pope made him realize what a group of sadistic creeps he is the leader of and he doesn't want any part of it. If so, good for him. The question is, who will replace him? Another sadist?

This Ranks Right Up There With Records Packaging "Breathe-In" & "Breathe-Out" Messages For Blondes

   (Commentary posted by Roger Erickson)

10 ways to fix the broken congressional budget process (Brookings)

John Lounsbury: 'Some of the proposals are problematic but one definitely is not: That would establish a coupling of the "debt limit" to the appropriations passed by Congress.' :)

Uh ... was that coupling proposed by the tinfoil brigade?

One solution might be to close down Brookings, before they become the main reason no one answers SETI? It might be too late. The following quote nearly proves it.

"The debt ceiling should automatically be increased when a budget resolution, which accurately reflects the estimated debt limit, is approved by Congress and goes to the president for signature."

Please tell me the person who said that was drunk or senile. I can't stand to see our country run this way.

Third World America. Idiots in Congress "looking for money" to fund the highway trust fund. Wait 'til you see what they've come up with.

Once again inaction by the idiots in Congress threatens to derail a major spending priority. This time it's the highway trust fund. As if our crumbling roads and bridges were not in bad enough shape already. These morons are avoiding funding this because of political maneuvering, lack of leadership and yes, once again, a belief that we are out of money.

More than likely the funding will be authorized so these imbeciles can take their August vacation (while the rest of us work for meager wages or, are left with no jobs), however, check out where they're likely to "get the money" from.

Check it out:

-TSA fees (so they'll be hitting us up for that, indirectly, through higher airline ticket prices)
-SELLING 100 million barrels of crude from the Strategic Petroleum Reserve (through 2025, however.) We're Russia now?
-And, get this, taking the dividend paid to banks for holding shares in the Fed, down to 1.5% from 6.0%.

The last one really cracks me up. I bet the bankers are fuming. What, you're cutting some of our free money??? Jamie Dimon must be livid.

For once, we the taxpayers are getting a break and the banks are getting hosed (sort of). Can you believe they're been paid a 6% dividend for a "investment" that is completely unnecessary? Holding shares in the Fed? The Fed doesn't need anyone to hold its shares, thank you very much and certainly not private banks.

But that's how the whole stupid system was set up and this is where some of that idiotic, "Fed is a private corporation" shit comes from. On a positive note at least we'll have another piece of evidence to throw at all the wacko conspiracy nuts who keep saying the Fed is a private corporation. NOT! What private corporation is required to turn over all its profits to the Treasury every year? Now they get their dividend cut by 75%. Ouch!

By the way...how did Eisenhower build the whole fucking highway system in the United States? By selling petroleum or taxing airline tickets? He deficit spent.

If SCOTUS kills the subsidy part of Obamacare, the economy will feel it and stock rally will be over

The Supreme Court will be hearing arguments soon on whether or not the government subsidies given out under Obamacare are legal. If they strike down the subsidy part of the law--and that's a distinct possibility--then the law itself will be impaired and might not survive.

Even if the law survives, removing the government subsidies could result in a serious blow to the economy and could send the stock market tumbling.

Subsidies aside, Federal Government  spending on health care has increased significantly since the law went into effect. In 2012, before the mandate, Federal outlays for Medicare and Medicaid totaled $814 billion. In 2013 when the mandate to have insurance was postponed for a year, spending on Medicare and Medicaid was $845 billion, an increase of 3.8%.

However, in 2014 when the law took effect, health care spending surged by $84 billion to $929 billion, a 10% increase. We will probably see another $16 billion more for this year.

Here is how the  last three year looks with this year projected.

You can see from these numbers how much the economy can potentially lose. We can go back to very near the pre-Obamacare spending numbers, which means lopping off about $100 billion annually from total spending. That would be a big hit, not to mention the other economic destruction that would come from not raising the debt ceiling. The latter would put the Federal government on a "balanced budget" mode of operation, which would be a disaster.

What Will It Take To Trigger Some Cultural Adaptations In This Country? We're Long Overdue.

   (Commentary posted by Roger Erickson)

Video too.

From FDR to Obama, John Dingell rates the presidents

This story illustrates, indirectly as well as directly, much that's wrong with our approach to shepherding adaptive public policy. Some immediate thoughts, while reading this.

1) too few get experience or practice at legislating (only kids of politicians & rich people get to be unpaid pages & interns in Congress)

2) too many Congresspeople follow their relatives, or mentors? (may be changing?)

3) the turnover & diversification rate in Congress is far too slow (no one should be irreplaceable; resiliency means many are capable of taking over on a moment's notice; Congress is no longer representative of our changing electorate in all 50 states, regardless of ethnicity, which shouldn't matter to a melting pot)

4) Congress itself is too small, and too easily co-opted by ridiculous things like campaign finance

That's just outside of the many inside insights that Dingell mentions. Read the article to hear his many interesting observations. Will this be enough to make more people think?

Makes you wonder what it will take to trigger some cultural adaptations in this country. We're long overdue.

Will we adapt?

Or will we stop ourselves in our cultural tracks?

Dan Froomkin — CIA Search of Congressional Computer Sparks Constitutional Crisis

Intelligence Committee chair Dianne Feinstein (D-Calif.), in a floor speech (transcript; video) that Judiciary Committee chair Patrick Leahy (D-Vt.) immediately called the most important he had heard in his career, said the CIA had searched through computers belonging to staff members investigating the agency’s role in torturing detainees, and had then leveled false charges against her staff in an attempt to intimidate them.

“I have grave concerns that the CIA’s search may well have violated the separation of powers principle embodied in the United States Constitution, including the speech and debate clause,” she said. “It may have undermined the constitutional framework essential to effective congressional oversight of intelligence activities or any other government function.”

She concluded: “The recent actions that I have just laid out make this a defining moment for the oversight of our intelligence community. How Congress responds and how this is resolved will show whether the Intelligence Committee can be effective in monitoring and investigating our nation’s intelligence activities, or whether our work can be thwarted by those we oversee. I believe it is critical that the committee and the Senate reaffirm our oversight role and our independence under the Constitution of the United States.”

She also accused the CIA of obstructing her committee’s torture inquiry in general, and of disputing findings that its own internal inquiry had substantiated.

The Intercept
CIA Search of Congressional Computer Sparks Constitutional Crisis
Dan Froomkin

Juicy.

It's also dicey for President Obama. If he does not respond correctly to this, he could see himself successfully impeached for it and removed from office, if the GOP retakes the Senate next year. The Right is very anxious to impeach this president on any suitable pretext of wrongdoing. However, the fact that proceedings might expose the involvement of the Bush Administration in an illegal torture program would make it a touch choice for them.

White House spokesman Jay Carney, meanwhile, said “The president has great confidence in John Brennan and confidence in our intelligence community and in our professionals at the CIA.”

Collision course.

Personally, I would like to see all involved in torture or approving it in a dock at the Hague going all the way back to the Nixon administration. Torture and assassination has long been a policy of the United States, either directly by US nationals, or indirectly by outsourcing it to complicit or puppet regimes.

Applied MMT Working Paper: Reforming the Broken Federal Budgeting Process

For a few months, I have been working on this paper about why the federal budgeting process is broken and destructive. I'd like to get some input from the MMT community. 

Link Here

The audience I have in mind for this paper is people in/around government who already have some policy background. Ideally this would reach people on Capitol Hill and policy analysts in Washington. 

The first part is standard MMT economics, and it should be familiar to most. The second part is the discussion about the current budgeting process, and how it should be reformed/eliminated. It has gotten a little long over time, but please feel free to comment. 

In the next few days I will also share a powerpoint deck on how the Fed sets rates. 

Reduce Public Fiat, to GET Public Fiat?

(Commentary posted by Roger Erickson)

Someone please point out the logic. I'm not seeing it. Maybe Congressional logic is currently an oxymoron.

Hammer the disabled to pay for unemployment benefits

"It would take the pen of Jonathan Swift to fully describe Congress' willingness to beat up on the least fortunate members of society to protect the richest. The latest example is a plan to pay for a one-year extension of unemployment insurance by cutting Social Security benefits for the disabled."

Can you imagine a bird, flying at 1000 feet, saying to itself: "Look, I have to balance my fiat (the "public initiative" of all it's cells) ... so, we'll start by closing down the left wing. Let's see what happens if we fund only the right wing."

Yeah. I found a dead, healthy looking, young bird in my driveway yesterday. It looked to be VERY healthy. Seemed to have fallen out of the sky, or got careless, didn't steer well, and ran into something. It's still dead.

If This Is What Gets People Elected To Congress Today, Then We're In Deep Trouble

Commentary by Roger Erickson

Rep. Steve Southerland believes in hard work, finds it.

Hard as this guy works, he'd NEVER be mistaken for one of the Founders who wrote the Constitution.

If this is what gets people elected to Congress today, then we're in deep shit. OCD-constrained savant pops to mind more often than statesman while reading this article. Does that impression reflect the realities of the electorate we've developed?

All may not be lost. To his credit he does come right to the crux eventually, saying that Congress is "a mile wide & an inch deep." Yet he then TURNS AWAY from acknowledging & shaping that reality in the only direction that matters. Not the right guy for the job, so far.

And this is all about one and one issue only, of the thousands Congress is supposed to collectively DELIBERATE and form a more perfect union from. Several hundred one-trick ponies does not agile policy, nor an agile nation make.

A Congress in denial. There's no future in it.

Tribal councils did better, over 500 years ago.

Ours is a well known task, with well known solution guidelines. It's astounding that we've trained ourselves away from scaling up agile extensions of methods already known to work.

Neil Wilson — Bernanke - We are the agent of the Treasury

For the file along with Alan Greenspan's testimony that the US can never become insolvent.

3spoken
Bernanke - We are the agent of the Treasury

Neil Wilson

Mark Gongloff — Bernanke Tells Congress Fighting Unemployment Is A Better Cure For Government Debt Than Austerity

"The loss of output and earnings associated with high unemployment ... reduces government revenues and increases spending on income-support programs, thereby leading to larger budget deficits and higher levels of public debt than would otherwise occur," Bernanke said....

Bernanke's comments draw comparison to a year-old paper, "Fiscal Policy In A Depressed Economy," by Berkeley economist Brad DeLong and Harvard's Larry Summers. The paper has received new attention lately.

A sort of antidote to the research of Harvard economists Carmen Reinhart and Kenneth Rogoff, which helped convince Congress to deliver austerity in the first place, the DeLong-Summers paper suggests that extra government stimulus spending in the short term could actually lower government debt levels in the long run.
But even after the Reinhart-Rogoff view has been discredited, the DeLong-Summers-Bernanke view can't seem to get any traction in Congress. 

The Huffington Post
Bernanke Tells Congress Fighting Unemployment Is A Better Cure For Government Debt Than Austerity
Mark Gongloff

Entries to Douglas B. Rogers "Conditions of a Free Society" Essay Competition

Commentary by Roger Erickson

Conditions of a Free Society

It's laudable for beginning students to discuss such things, yet surely verbal and written versions of that competition should be the method for getting bills presented and passed in Congress?

Lobbyists themselves have overly narrow perspectives, and hence never really know - or are satisfied with - the outcomes from what they ask for.

In a time when experts know more and more about less and less, and end up knowing everything about nothing ... what the hell is the use of convening committee's of "experts" to discuss tuning interdependencies of an increasingly complex system so that they map to better outcomes in constantly changing situations? Our experts have experience tuning return on coordination, since coordination something they know nothing about!!!

You might as well ask a theoretical, orthodox economist with zero predictive power to manage reality.

(Hat tip to Brad Lewis)

Still Time to Support Warren Mosler's Congressional Campaign

Running, Independent for U.S. House - Delegate from US. Virgin Islands

He's running against the existing incumbent, who at first glance seems to be a political populist lacking any operational experience. Should be interesting.

Even if the Entity Fails, Executives Walk Away Rich. From Banks? Or From the Entire USA? How about WE Walk Away Instead, With OUR Nation Still Wealthy?

commentary by Roger Erickson

"Even if the entity fails, you walk away rich." That's the last line of Bill Black's famous recipe for Control Fraud, learned while prosecuting the guys who bought & owned the Keating-5. Bill was the featured guest during the third hour of the Coast to Coast AM banking fraud special on Saturday, August 25, 2012

Here's the whole recipe again, because we need to repeat this as many times as it takes for the US electorate to recognize how they're being robbed.

Black's recipe for robbing a bank is simple:

1) If you're a bank, grow like crazy by making really crappy loans

2) Make lots of really crappy loans at a premium interest rate.

3) Employing extreme leverage (a whole lot of debt compared to equity)

4) Set aside next to nothing for loss reserves for the inevitable deluge of losses that are going to be coming.

“If you do those 4 things you are mathematically guaranteed, in the near term, to report record profits. And with modern executive compensation, that means that the controlling officers will be made wealthy... Even if the entity fails, you walk away rich.”

Even paranormal researchers are now hearing Bill's message! So, that's progress. :)

ps: That definition certainly ought to define Geithner and most members of Congress. Maybe we're closer than we imagine?

Or are we further?

We once had the Keating-5 just in the US Senate. Now we have the Geither-535? Or is that number even bigger, and now distributed across gov agencies from the Fed to the DoJ? Not to mention the Presidency of Harvard U and U-Chicago, the preferred sites for either opposing or collaborating fraud camps.

Do today's Control Frauds care if even the entire USA fails? Will they still walk away personally wealthy? To where? And with what form of wealth guarantees?

How about WE walk away from them instead, with OUR nation still wealthy?

Bill Black, wherever you are, we need a simple slogan and plan to mobilize citizens in opposition to Control Frauds and Innocent Frauds alike.  Here's a suggested version.

George Washington's simple recipe for saving a nation from its banks:

1) If you're a citizen, grow your country like crazy by improving the quality and tempo of distributed decision-making!

2) Improve economic tempo by the simple act of de-centralizing decision-making, so we can explore more of our options, and select innovations, faster.

3) Eschew extreme leverage - and invest in generating many small failures, not too few large ones. Decentralize decision-making by distributing resources well enough to explore distributed options. Scalable success will emerge by default, as everything that doesn't work is quickly & cheaply exposed.

4) Don't bet the farm. Instead, invest in resilient systems capable of meeting all the unpredictable challenges, conceivable or inconceivable, that are inevitably coming. Continuously prioritize decentralized decisions by distributing feedback well enough to align all actions with net benefit.

“If WE do those 4 things WE are mathematically guaranteed, in the LONG term, to ACHIEVE record SUCCESS. And with modern AUTOMATIC STABILIZERS, that means that the NATIONS CITIZENS will ACHIEVE SUCCESS... Even if a few frauds fail, our nation will continue generating success.”

Moral Fiber bypassed by Google Fiber

Forget Moral Fiber. The scalable underpinnings of that in a large, growing population depend upon a new level of fiber, such as Google Fiber.

In all honesty, why the heck can't we just extend our national initiative to bring this level of fiber to every US household ... ourselves? Why depend on individual companies to voluntarily provide the bare minimum?

This would likely be better done in reverse. Google, please help bring some moral fiber to Congress, so they'd bring Google-level fiber to all US citizens, pronto?

Okay, it's true that it's our own fault. Google, just help bring some more fiber to the US electorate, so they'd send Congresspeople with moral fiber to Congress.

Jerry Khachoyan — The Truth About Our Economy

It has been almost 4 years since the US fell into the Great Recession and we have yet to see a strong recovery. One of the after-effects of the Great Recession has been the increased attentiveness to monetary policy. Attentiveness to monetary policy existed before the Great Recession but not to the degree seen today; since the Federal Reserve took unconventional steps in 2008 to fight the recession, it now seems like every single word or action coming of the Federal Reserve (Fed) is a do or die moment for the markets and the economy.

Well, I got bad news for all those who think monetary policy is the “Holy Grail” to our problems – it’s not. Unfortunately, this reliance on the Fed has diverted attention away from the true matter we need to concentrate on: fiscal policy. Despite what all the supporters of monetary policy say, the Fed is out of bullets. They dropped interest rates to 0% (to make borrowing more affordable), conducted QE1 which calmed markets by providing liquidity (“Credit Easing”), tried QE2 & Operation Twist (which aimed to bring longer-interests rates down) and attempted better communication measures (“Rate Easing”) as they committed to keeping interest rates near zero “at least through late 2014”.

 Despite these actions taken by the Fed, we still see high unemployment and weak GDP growth. While parts of the economy are showing strength, the two most important measures of the economy show anything but strength. anything but that. Why can’t we solve our problems if monetary policy worked in the past? Market Monetarists (strong supporters of super aggressive monetary policy) will say that the Fed (and every major Central Bank) has failed to do its job. However, this is just wrong.

The main reason we are in an economic malaise is because we are stuck in a “Balance Sheet Recession” (termed by Richard Koo)....

Read the rest at SMB|U
The Truth About Our Economy
by Jerry Khachoyan

My favorite line is the last: "We demand higher aggregate demand!"

Bigger than Functional Finance - Preserving Democracy

Functional Finance, through MMT methods, is necessary in order to expose fiscal options.

Democracy is necessary to explore & leverage options with adequate agility. Here's a message from the Sunlight Foundation.

Does information about legislation belong to Congress or to the American people? This basic question is at the heart of a fight over how Congress releases data about what it does. Americans increasingly use the Internet to make sense of the world around them, and open data opens up Congress in a way that's never been possible before.

In the pre-YouTube pre-iPhone pre-Amazon days, Congress built a website -- THOMAS -- to let citizens follow legislation from home. THOMAS was revolutionary ... in 1995. But the Internet continued to develop, becoming more sophisticated and interactive, allowing web developers to easily share the data behind their websites with others. It's why we can book flights on Travelocity, check the weather on our phones, and follow legislation on OpenCongress and GovTrack.

Unlike Travelocity and the National Weather Service, Congress doesn't share the data behind THOMAS with anyone. Instead, web developers must reverse-engineer the website to transmute its pages into usable data, like assembling a puzzle from thousands of ragged pieces without a picture on the box as a guide. This slow, difficult, and time-consuming process isn't perfect, but it's responsible for how most Americans follow what's happening in Congress.

The better approach is for Congress to publish the data behind THOMAS. Government regularly does this elsewhere, and "bulk data" is responsible for clever new uses of information developed by citizens, journalists, and even the government itself.

In upcoming days, the House is likely to pass legislative language that pays lip service to releasing THOMAS data while putting the idea in a deep freeze. This would be a disaster. But it's not too late. Tell your representative that you want Congress to publish legislative data now.

PS. For more information and the latest developments, go here.
***

Note, however, that sunlight is not sun-action. That's up to us citizen couch potatoes. Are we going to "Quayle," or get up & do what others spell out for us?

Please go out & make some democracy of your own, within your local community. Waiting for Congress is like waiting for a slow train, now full of self-serving crooks.

ps: ps: Exactly WHY did you vote for your current Congressperson? Time to consider sending a different message.

Can sink no lower. Congress becoming worse than a joke?

"Rep. Joe Pitts (R-Pa.) is seeing his foreign policy credentials come under fire after calling for Middle East peace negotiations between deceased Palestinian leader Yasser Arafat and former Israeli Prime Minister Ariel Sharon, who has been in a coma since 2006."

Let's think this through.  Maybe Congress would be ok, if no mouth was opened? Heck, why not call for direct talks between Buddha & Confucius?  Send a polite letter through an appropriate medium, then patiently wait for a reply from beyond a distant shore?

On the other hand, sending a brain-dead guy to a peace negotiation has become rather standard, after all.  (If a peace ever DID break out, would Cheney fume in defense to his followers that "no one could have predicted this" - then shoot another lawyer, just to send a stronger message?)

[I can imagine a whole Onion show based on that discussion.  "In a House/Senate negotiating committee, Rep. Joe Pitts, (R-Pa.) suggests re-introducing Dick Cheney to his former heart.  16 GOP Senators swallow own feet in outrage, call for 24-Hr Heimlich coverage for all Congresspeople, as a national security measure.  Secret Service says they can meld it into their existing escort service."]

Just send our mental ward to talk with your mental ward? With help from the Traveling Nurse's Association?

Perhaps anything would be a break from the current rhetorical exchanges of foots & mouths.

Is an epidemic breaking out in Congress? Better hoof it down there & examine some gum lines for leather burns, before this gets any worse.

Or, blame it on the Chinese, and the shoe polish they send us.

Seriously folks, it's not fiat currency we're running out of.  Can we just arrange a negotiated compromise between Ben Franklin & Marriner Eccles?  Abe Lincoln too, so the GOP couldn't possibly complain.

Congressional Committee-Placement Strategy Shows Just How Totally Broken Our Democracy Is

Some very revealing information comes up in the middle of Bill Black's testimony in this RT video interview

The House Finance Committee is gargantuan (05.40 in video) .. because it's members receive the most campaign contributions from finance lobbies - the dominant contributors to BOTH parties, by far. Therefore, both parties place on the HFC those members currently most in need of extra campaign funds, as a re-election strategy, NOT to best serve the US electorate.

What does this little observation reveal?  It shows that the two political parties have completely perverted the most fundamental operations of Congress, for managing re-election metrics, NOT to serve the mission given Congress by citizens of the USA!

It's not just the tail wagging the dog, it's the fleas managing the tail that wags the dog!

One has to also conclude with fair certainty that the identical campaign contributors who dominate contributions to both parties also game the same dynamic mentioned above, to choose two of their candidates every 4 years as alternate choices for President. We should have such options!

I'm still trying to best summarize for myself what this implies. 

Political parties have co-opted our very Congress, as a venal hedge against narrow re-election risks, and in the process have knowingly made a complete mockery of the Constitutional mission of Congress to serve the welfare of the American people.

And, it is likely worse, with the same gaming process filtering our options for who becomes President of our supposed democracy.  Congress itself - and each political candidate - is now simply another hedging strategy for the finance industry!  To add further insult to injury, the entire finance industry itself is more trouble than it's worth to the USA.

Remind me why we are running a national Congress?

When our institutions in an operating theater are this badly compromised, the only rational hope is to review & focus our hierarchy of strategies, because all resources thrown at distributed tactics will only produce Pyrrhic victories. The situational dynamics are stacked so heavily against National Public Purpose at this point, that only rigorous convergence to key strategies gives any hope of success.

Wandering, rambling Committee Testimony in the current Congress illustrates how effective Pyrrhic victories are as a strategic distraction.

Yet Bill Black's video testimony reveals that most of what's said in these committee meetings is a perverted, dog & pony show. One minor consequence of the perversion is that literally no member of Congress has any available talents, expertise, preparation, training or practice matched to their committee placements in Congress!

Our policy apparatus has come to resemble the old habit of landed gentry buying positions in the military officer corp, with complete disregard for any matching of talent to demands or responsibility of office. Disastrous failures revealed the fault in that placement policy for the military. Are we waiting for adequately national levels of failure to demonstrate that the same policy won't serve us any more usefully in Congress either?

We need people in Public Office who have talents in something other than getting themselves elected, by any means possible.

And we need that before tragic, complete failure visits the USA.

Sen. Bernard Sanders, I-Vt., recently mentioned JPMorgan's woes while introducing a bill prohibiting bank execs from serving on the boards of the 12 regional Federal Reserve Banks.

Jaime Dimon of JP Morgan currently sits on the New York Fed’s board, which is a conflict of interest.

“The people regulating the banks are the exact same people being regulated,” said Sanders at a press conference. “If this is not a clear example of the fox guarding the henhouse, I don’t know what is.”

Democrats Barbara Boxer of California and Mike Begich of Alaska are cosponsors of the bill, which seems unlikely to advance.

"If it seems shady though, don't blame the Fed. Congress intentionally set the central bank up that way in 1913."

Let's see.  Where have we heard that type of excuse before?  By the way, it's not true.  Fed boards were long dominated by regional business, not bank representatives or academic economists.

Debt ceiling raised to $16.4 trillion

Congress raised the debt ceiling to $16.4 trillion. Here's it is: