Under the heading nothing new under the stun (not sun) both are dead on policy analysis and political sausage-making. Anybody who still believes in easy magic answers ought to memorize them. Any of the rest of us who know it takes dead pigs and smelly factories to make sausage should point to these. Maybe the lesson will get thru.

Then again maybe not. But it’s gonna be suck it up time for a while.

I generally like what John says, but when people start making up stuff like this, then you know they are making up other stuff too. This sentence makes absolutely no sense what-so-ever.

“Like teenagers, we as a US polity have made a number of bad choices over the past decade. We allowed banks to overleverage and, in the case of AIG (and others), sell what were essentially naked call options of credit default swaps, based on their firm balance sheets, far in excess of their net worth; and that put our entire financial system at risk.”

I am getting sick of the apologists who blame the American people for what these degenerates did on Wall Street and in Washington. I don’t know anybody who allowed this to happen, do you?

“As it turned out, Niall Ferguson (last week I wrote about his brilliant book, The Ascent of Money) was in Dallas last night, and I was graciously invited to hear him. He gave a great speech and signed books, and then we went to a local bar and proceeded to solve the world’s problems over Scotch (Niall) and tequila (me), and went farther into the night than we originally intended. He’s a very fun and knowledgeable guy.”

I am going out with the Queen of England tonight and we are going to discuss the Crown Jewels.

Look, the country is going down the tubes and we hear time and again from the elite who are just outraged over what has happened, completely unaware that they, and those like themselves, are a great deal of the problem. God forbid we hear from someone who actually has something constructive to say, like how we are going to make the people who destroyed this country, accountable. But, but…that might interfere with their income stream, and we couldn’t chance that, now could we?

Partisan Economics
http://www.ritholtz.com/blog/2009/10/partisan-economics/

What Caused the $1.2 Federal Trillion Deficit ?
http://www.ritholtz.com/blog/2009/10/what-caused-the-1-2-trillion-deficit/

In this case, despite all the other useful stuff, his central argument is that Christine Romer thinks tax cuts are more effective than stimulus spending. That’s not just a mis-representation but a complete reversal. Direct spending is more effective because it cascades across multiple people, i.e. there’s a multiplier. With tax cuts there’s little or none and there’s a propensity to not spend it at all. In this case I think the figure was something like only 30% of the tax cuts in the early part of the stimulus was spent.

Where Mauldin really mis-represents things is in his use of the standard GDP equation. When there’s no other source of spending power the gov’t is your only resort and that’s where we’re at. Fiscal stimulus is keeping the wheels on the wagon and hopefully priming the pump for organic, self-sustaining growth.
But who am I to say all that – check out Bruce Barlett’s blog on fiscal spending and deficits and why this is all so necessary. Bartlett in case you don’t know was the policy economist who worked for Kemp and was one of the principal architects of the supply side revolution. It does’t get more authoritatively from the mountain on the conservative side than that.

You will see an increasing amount of discussion where our leaders are “resigned to the fact that we will need to have a value added tax”. Why? Because such a tax will impose the least amount of harm on the most wealthy in our society. I suspect it will be extremely regressive to the middle class and working class however.