Tuesday 11 February 2014
Photo, above: St Andrew's, Kiev.
JOHN BATCHELOR SHOW
Co-host: Larry Kudlow, The Kudlow Report, CNBC; and Cumulus Media radio
Hour One
Tuesday 11 February 2014 / Hour 1, Block A: Larry Kudlow, in re: 28 Republicans joined with Democrats to pass a clean budget bill (couldn't get 218 any other way). LK spoke with John Taylor this morning before he testified: Taylor Rule – overnight Fed funds rate needs to be 1.25%, but the Fed now has it as zero. Result is that Fed will have to take cash out and raise the target rate - because Mz Yellin has no rule by which to go. Fed used to have two rules: jobs number and Fed rates; Bernanke focussed on unemployment, with 6.5% as a "threshold." No good guidance, no rules – you gotta pay for that over time. The longer they wait, the harder this will get. "When the Fed moves, the bubble bursts."
Tuesday 11 February 2014 / Hour 1, Block B: Phil Izzo, WSJ lead editor, Real Time Economics blog, in re: Two months of underwhelming jobs growth makes us loo again; something going on and it's not the weather. Household survey: the last three months may be payback for last autumn. John Riding, RDQ Economics: consistent with printing a couple hundred thousand jobs per month. CBO published: 2-2.5million jobs [in hours worked] will be destroyed by the ACA. Also, transfer payments of Soc Sec, food stamps, SNAP, disability, et al. Absent job growth – these people have been unemployed for years and years, nobody will hire them; need 5% or more growth to get everybody hired. Need long-term investment – arguably the biggest job creator.
Video: Inside the Numbers: January Unemployment Rate 6.6%, 113,000 Jobs Added The U.S. economy added 113,000 non-farm payrolls to the economy in January, and the unemployment rate dropped to 6.6%. How . . . Secondary Sources: Death by Finance, Middle Class, Shale Gas and Housing A roundup of economic news from around the Web.
Tuesday 11 February 2014 / Hour 1, Block C: Steve Forbes, Forbes, in re: Janet Yellin testified today. I was encouraged that she'll continue the taper rather than pull back; can get real roes from the credit mkts. World news slightly better these days. If she had her way, the dollar would sink into the black hole of the universe. Fed operating by no rule, only by whim – basic monetary central planning. I’d take the Taylor Rule; this is her challenge.. In t parts: need normal interest rates – big companies have got a lot of credit easily but small and new firms having trouble When the Fed sucks up all short-term credit, it starves small businesses – some of which have had to borrow at effective rates of 40% per year! Also, with the $4 trillion overhang, the Fed must know that if you make the dollar sound, people would be willing to hold it and use it for commerce. That' d be good for the euro; mess up with money, like a compute virus: can't trust pricing. Greenspan used to speak of gold and the dollar; in his last term he caved in and let the dollar sink. Yellin believes in the Phillips Curve. Name one instance where monetary policy successfully guided an economy. The lat few QEs haven't done anything to spur growth. Wizard behind the curtain: last few QEs were contractionary. If they follow through on the taper, will allow long rates to be a bit more realistic, which will put pressure on short-term rates. House and debt ceiling: don’t get in fights you can’t win ["Keep the lights on."] Want short rates to follow long rates. Strange in Jan report: job creation of 600,000. NFIB surve y did better today – up six straight months. years ago, Jude Wanniski joked that they make it up – they have a Snickers standard. (This is how FDR was said to have set the gold standard every morning over a coddled egg breakfast in bed.)
Tuesday 11 February 2014 / Hour 1, Block D: Avik Roy, Forbes.com, in re: CBO in 2010 estimated labor would shrink by 100K under ACA; now it's 2 million. After-tax & incentives matter. A lot of work analyzing effective marginal tax rates of low-income people – between $10-20K PA, as you move up the income ladder, for every extra dollar earned you actually earn less as the govt takes your taxes and decreased benefit. A widely practiced system in northern Europe: count the value of benefits as taxable income! You smooth the curve and equalize the tax treatment. Currently, you pay city, state, and fed taxes plus Soc Sec. Quick take on why this Adm decided to extend employer-based mandates? Not related – implication: they’re terrified of 2014, Senators in red states afraid they’re going down. How did it occur that 70% of your employees are privileged and 30% not? Game of lifeboat.
Hour Two
Tuesday 11 February 2014 / Hour 2, Block A: Stephen F Cohen, NYU & Princeton Russian Studies prof Emeritus; author, Soviet Fates & Lost Alternatives, in re: A burning hole in the former Soviet Union: Ukraine. This is a state critical to the fate and future of Russia. Now, en with weapons, armor, camped in winter in Independence Square in Kiev; surrounded by police awaiting orders to retake the plaza. US press has been misinforming us; guys there are skinheads. A tragedy. A revolution? Not that yet, but history says that when a revolution unfolds its first victims are moderates. Flashback to last fall. Protestors are demanding that Yanukovitch join with EU; leaders were moderate – market reforms, peaceful change, transparency, democracy, They lost control out of the shadows emerged the same people who collaborated with the Nazis- they hate Russia and Europeans Mani group: the Right Sector. Armed, carry crowbars and weapons, have spread to Western Ukraine where they occupy govt bldgs. The center cannot hold; extremists on right vs Yanukovitch supporters. He offered to change the constitution and give protestors some govt positions, but they had to reject these because the moderates no longer have any control. Three-month siege f Kiev. The West – DC, Brussels, Obama, the EU – are deeply involved on the streets. A sort of moderate neo-Nazi. The thugs are itching for violence: if you can provoke the police into bloodshed on TV, the images build sympathy for the attacked even if the poliee are in fact defending themselves. Throwing firebombs at police for months – that would would not be tolerated in any Western democracy. See: TheNationOnline
Tuesday 11 February 2014 / Hour 2, Block B: Stephen F Cohen, NYU & Princeton Russian Studies prof Emeritus; author, Soviet Fates & Lost Alternatives, in re: How Messrs Cliton, Bush, and Obama have responded to Russia. Putin rescued a tattered GDP. US media see him as a punch line; he has a very high approval rating in Russia He must win Ukraine. If Russia lost its close relations with Russia Putin would go down in history yin disgrace. Sochi: US reports in Euro papers, incl the Intl Herald Tribune/NYT, that Putin will wait till after Sochi when the reporters eave, he may physically support Yanukovitch. Not a shred of evidence of this. Were he to employ force in Ukraine, he'd be disgraced, since many Russians are married to Ukrainians. West wanted Ukraine to sign a security agreement that would de facto obliged Kiev to support NATO, which alarms Moscow. Began when White House and Brussels played with metaphorical fire. Last week, Victoria Nuland of State Dept on unencrypted cell phone with US ambassador to Ukraine picking winners, using serious vulgarity Chancellor Merkel is enraged; major breakdown of trust: US and Moscow, US and Berlin. Bad relations.
Tuesday 11 February 2014 / Hour 2, Block C: Stephen F Cohen, NYU & Princeton Russian Studies prof Emeritus; author, Soviet Fates & Lost Alternatives, in re: After fall of Soviet Union and Yeltsin, Putin emerged, stabilized a genuinely dangerous situation by seeing that massive stockpiles of weapons weren't distributed crazily. Personal vilification of Putin is a fantasy of US media. . . . Georgia and that war. US vice-president was actively involved in that. . . . Ever since Clinton, US policy has been assort of march physically toward Russia – NATO, outpost in Georgia, etc. Let's debate this: we're marching on Moscow; we need to admit this and decide if it's a good or bad policy. Nuland. Snowden. Obama called Putin a few weeks ago, offered help in planning for Sochi security; Putin was cool; Obama dictated what Putin should do in Syria, and in Geneva I. Then within a week, the US amb to Moscow resigns [clearly Moscow quite dealing with him]. The best foreign partner the US could have at present is Russia (security, energy, stability); Obama is either not picking up the offer or spitting on Putin. Putin said, Why oblige Ukraine to choose between Russia and the West – why not allow it to enjoy good working relations with both? US refused.
Tuesday 11 February 2014 / Hour 2, Block D: Stephen F Cohen, NYU & Princeton Russian Studies prof Emeritus; author, Soviet Fates & Lost Alternatives, in re: New Yorker magazine piece calls Yanukovitch a "marauding criminal." "Distorting Russia" article: the US misrepresentation is "pornographic" – panting to have something destroy Putin's success. Now we have many hours of beautiful coverage; journos disappointed that nothing awful has occurred. Need to allow Ukraine to participate in both the Eurasian economic union and also the Eurozone. Is this payback for Russia's turning off the energy pipeline? Ukrainians aren’t being offered travel visa into Europe. Time for Pres Obama to stand up and do the right thing – order the State Department to [pull its socks up and be honest].
Hour Three
Tuesday 11 February 2014 / Hour 3, Block A: Taegan Goddard, Political Wire, and John Avlon, CNN, The Daily Beast, and Newsweek International, in re: Good manners suddenly breaking out in Washington. The Republicans have finally learned their lesson? Yes, House passed a bill to raise he debt ceiling – 28 GOP joined Dems to do this. We move beyond this issue till March 2015 . . . Political reality: common-sense, reality-caucus Republicans won over the suicide wing. Enormous fracture in the GOP.
Tuesday 11 February 2014 / Hour 3, Block B: Taegan Goddard, Political Wire, and John Avlon, CNN, The Daily Beast, and Newsweek International, in re: Jeff Katzenburger who notoriously backed Obama is now in gear o support Mrs Clinton. Mary Matalin says Clinton won't run. Clinton is most likable when she's seen as vulnerable. Petraeus's encomium about Clinton and Benghazi [what?]. The youngest voters who voted for Bill Clinton are now 38 years old. GOP dreams to win the Senate in 2014. Six seats look like a lay-up. When has the Republican Party ever struggled with [the obvious]? In Georgia, one GOP member stepping down and four contestants on the field. . . . Watch Kentucky – it’s not just bourbon and blue grass any more.
Tuesday 11 February 2014 / Hour 3, Block C: Steven Erlanger, NYT, in re September 8, 2014: Scots vote on total devolution/independence. Without Scotland, Premier Says, Britain Would Be Less ‘Great’ The British prime minister appealed to Scottish voters to reject independence in a referendum that will be held in September. . . . Churchill had a seat in Parliament because he had a borough in Scotland. Why does Alex Salmond want to debate Cameron? Because he's a good debater; whereas Cameron doesn’t want to treat him as an equal. "Better together" bv Alastair Darling, former chancellor of the Exchequer; carrying the banner for union. . . . Could an independent Scotland use the euro? The pound? Alex Salmond and Theodore Sturgeon!
Tuesday 11 February 2014 / Hour 3, Block D: Paul Barrett, Bloomberg Businessweek, in re: FREEDOM INDUSTRIES: WHO ARE THESE GUYS? Following the January 9 chemical spill that left 300,000 West Virginians without tap water, the mystery wasn't how it happened but who actually owns and runs Freedom Industries, the company responsible. Paul M. Barrett, who's been reporting on the spill since news broke, looks back nine years to when Carl Kennedy II, the
co-founder of Freedom Industries, was convicted of siphoning payroll tax withholdings to splurge on sports cars, a private plane, and Bahamas real estate. And 18 years before that, in 1987, when Kenned y was convicted of conspiring to sell cocaine in a scandal that brought down the mayor of
Charleston, WV. "Little known, even locally, Freedom was born and operated in a felonious milieu populated by old friends who seemed better suited to bartending at the Charleston-area saloons they also owned." Those friends include Gary Southern, who seems to be running Freedom Industries; Cliff Forrest, who bought the company days before the spill, and Dennis Farrell who took over when Kennedy went to prison. Are these the guys making sure another disaster doesn't happen? [more]
Hour Four
Tuesday 11 February 2014 / Hour 4, Block A: Alex Wayne, Bloomberg, in re: OBAMACARE: UNH-OH. Small Businesses Get Further Delay for Obamacare Coverage Employers with fewer than 100 workers won’t have to provide health insurance until 2016 under Obamacare, as the administration said it would again delay a key requirement of the health law.
Tuesday 11 February 2014 / Hour 4, Block B: Robert Zimmerman, behindtheblack.com, in re: “95% of all climate models agree: The observations must be wrong.” I’m seeing a lot of wrangling over the recent (15+ year) pause in global average warming…when did it start, is it a full pause, shouldn’t we be taking the longer view, etc. These are all interesting exercises, but they miss the most important point: the climate models that governments base policy decisions on have failed miserably.
I’ve updated our comparison of 90 climate models versus observations for global average surface temperatures through 2013, and we still see that >95% of the models have over-forecast the warming trend since 1979, whether we use their own surface temperature dataset (HadCRUT4), or our satellite dataset of lower tropospheric temperatures (UAH).
When 90 different climate model predictions are compared with the actual data, all but two vastly overestimate the amount of heating that has occurred since 1979. In other words, these models are wrong, they are undependable, and they shouldn’t be used to decide policy by any politician.
Awaiting contact from China’s rover as lunar day arrives.
The sun started coming up over the weekend, so if Yutu is to come back to life, it must do it soon.
Did you ever get the feeling of deja-vu? On Monday Richard Branson claimed that Virgin Galactic will fly its first space tourists this year. I am all for his success, but I must admit I am becoming skeptical. Branson said exactly the same thing in May 2013, except then he was claiming that the first tourist flight would occur before the end of 2013. It didn’t happen. There are too many rumors about the engine troubles with SpaceShipTwo to allow me to accept Branson’s claims any longer at face value.
Tuesday 11 February 2014 / Hour 4, Block C: Kenneth Anderson (and Benjamin Wittes), Hoover, in re: What, If Anything, Is Strategically New About Weaponized Drones? Since the introduction of weaponized drones as a tool of counterterrorism by the Bush administration not long after 9/11, and especially since their use was ramped up dramatically by the Obama administration, their strategic meaning and value has been sharply debated. The answers vary wildly and often run to extremes, starting with the question of whether they constitute something “new” in armed conflict.
Particularly for the US military, “remotely piloted air vehicles” (a much more accurate term than “drones”) are just another air platform. The drone’s pilot happens to sit on the ground rather than in the aircraft, but a human still controls it in real-time. If a drone craft carries a weapon, an authorized person must make a decision in real-time to fire it—a decision that, for all the controversy over “kill list committees,” is just the “targeting process” in war and, on account of lengthy loiter time, allows for a far more considered decision to fire than most other weapon systems. Its use is fully subject to the laws of war governing targeting, the same as any other weapon platform. Although many different kinds of drones are going to come on-line in the next decade or so, the ones used today were originally designed as surveillance craft; they are slow and have no air defense capabilities, but by the same token have extraordinary loiter capabilities and compelling utilities against non-state armed groups or terrorists.
Tuesday 11 February 2014 / Hour 4, Block D: Peter Berkowitz, Hoover & WSJ, in re:
A Case of Faculty Discrimination Based on Politics," Teresa Wagner was qualified but anti-abortion. The law school at the University of Iowa denied her a job, so she took them to court.
On Feb. 13 in St. Paul, Minn., the Eighth Circuit Court of Appeals will hear arguments in Wagner v. Jones. The appeal is procedurally complex. But the legal question at the heart of the original case has potentially far-reaching implications for public and private legal education. To wit, whether a candidate for a faculty position at a state law school could provide sufficient evidence that, in violation of her constitutional rights, she had been denied employment because of her political beliefs.
In a trial concluded 15 months ago, Teresa Wagner accused the University of Iowa College of Law of violating her First Amendment right of free expression and 14th Amendment right of equal protection under the law when the school's dean, Carolyn Jones, refused to hire her for its legal analysis, writing and research program.
Ms. Wagner was hired initially in August 2006 and was serving on a part-time basis as the associate director of the law school's writing center when . . . [more]
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Music
Hour 1: Chronicles of Narnia. Lemony Snicket's Series of Unfortunate Events. House of Cards.
Hour 2: Red Dawn. Eastern Promises.
Hour 3: The American President.
Hour 4: