With the public battle over King County’s new budget coming to a head just as word came of an agreement to acquire a controversial Maury Island gravel mine and preserve it as parkland, it didn’t take much to anticipate the anti-tax/anti-government crowd’s reaction: “How could we possibly be spending taxpayer money acquiring more parkland at the same time we’re slashing the Sheriff’s office by another 10 percent?”
Well… the Seattle Times explains:
WILLING seller, eager buyer and available, dedicated funds to make it happen. That is the dynamic behind King County’s plans to buy, preserve and protect 235 acres and a mile of Puget Sound shoreline on Maury Island.
[…] State Rep. Sharon Nelson, an island resident, secured $14.5 million in ASARCO pollution settlement funds. The King County Conservation Futures Fund, for just such purchases, is paying $19.1 million. Another $2.4 million is a credit the owners accepted in exchange for extension of an existing mining lease on the island.
The emphasis on the word “dedicated” is mine, but it gets to the heart of why I just roll my eyes whenever I see others roll their eyes about spending billions of dollars on a tunnel or something at the same time we’re slashing spending on this or that. See, government budgets are a helluva lot more complicated than, say, King County Councilmember Reagan Dunn makes them sound when he storms out of budget negotiations in a fit of mathlessness.
And that’s why I also roll my eyes when I hear Republicans talking about how easy it would be for them to fix our fiscal crisis, if only they were in complete control.
He reads?
Reagan Dunn said that his refusal to work with the budget committee, and his proposed Amendment to the budget to add money back into the Sheriff’s Office and to increase funding for programs combating domestic violence, were just policy differences, and not person.
But the comments comming back from the committee made it pretty clear that they saw it as just a crass political ploy by Dunn which was being made at their expense. They didn’t appreciate it one bit being set up as being in favor of domestic violence. One councilmember even held up a copy of Dunn’s proposed amendment and called it “one of the reasons why civic-minded people avoid getting involved in politics” (quoted from my recollection of the blurb heard on the radio).
It’s pretty clear that Reagan Dunn is clearing the decks for a run at higher office, and he’s trying to get his face on the news regularly, and positioning himself as the law-and-order guy. If he puts targets on the backs of Democratic colleagues on the council, then that’s simply an extra benefit.
Which just proves that it’s a hell of a lot easier to sit back and throw stones than it is to actually make a budget in tough times and govern with it. Republicans are pretty good at the former, but terrible at the latter.
Dunn has all the attributes that make for a successful Republican politician–immaturity, lack of intellectual curiosity, massive ego, faux principles, partisanship that trumps responsible policy decisions. Yup, he’s running for something.
“And that’s why I also roll my eyes when I hear Republicans talking about how easy it would be for them to fix our fiscal crisis, if only they were in complete control.”
But you see, Goldy, Republicans were in complete control and they plunged a booming economy into the worst recession since the 1930s.
I just don’t understand the people who voted for these dipshits earlier this month. They must hate their jos, homes, retirement accounts, and children.
Alaska Sen. Lisa Murkowski has opened up a 1,000 vote-plus lead over Palin-endorsed (and scandal-beseiged) Joe Miller. And Murkowski said today that Palin lacks the leadership qualities and “intellectual curiosity” to be president. Palin “didn’t enjoy governing” while Alaskan governor, Murkowski added. She couldn’t be bothered with the details of, uh, what was going on in the state government she was supposed to be leading.
It’s too much money. It’s sad that we have to pay such a steep ransom to do the right thing.
Or the cynical manipulation of the Council motion process to generate campaign sound bites for the next election cycle.
To Ease Or Not
A growing chorus of Republican economists and politicians is challenging the Fed’s decision to inject $600 billion of new money into the economy through “quantitive easing.”
It’s a technique to expand or contract the circulating money supply, and the mechanics are fairly simple. The Federal Reserve creates money out of thin air and uses it to buy Treasuries, bonds, mortgages, or other securities from banks. The Fed can’t directly control what the banks do with this money, but hopes they’ll lend it, stimulating economic activity to spur growth and reduce unemployment.
The Fed holds these assets on its balance sheet. Later, it can reduce the money supply by selling them, to prevent inflation.
This is all about managing inflation/deflation expectations by manipulating the money supply. The Fed is resorting to quantitative easing because it fears the U.S. may fall into a Japan-style deflationary stagnation. Republicans are questioning the Fed’s policy because they’re more concerned about inflation being caused by an expanded money supply.
Policymakers are walking a tightrope and can’t afford to be wrong about this. An error could plunge the U.S. into a “double dip” recession or trigger a 1970s-type “stagflation” (inflation without growth) down the road.
Republican deficit hawks, gold bugs, and Fed critics have been blaring their trumpets of alarm about inflation for a long time. They’ve been doing this in a zero-inflation economy mired in a deep recession. It makes them look ignorant, perverse, or just plain nuts.
But instead of a knee-jerk partisan response, we should objectively ask ourselves, are they wrong?
The question is relevant because the Republican majority in the House gives them increased clout over economy policy and, indirectly, Fed policy. With Republicans controlling House committees, they can pressure the Fed on its monetary policies.
With benchmark interest rates already at zero, the Federal Reserve has limited options for dealing with the continuing financial crisis. At this point, quantitative easing is the major tool available. The Fed signaled last summer its intention to use it.
To put the $600 billion cash infusion in perspective, the Fed typically carries a balance sheet of about $800 billion in normal times, and this expanded to $2.8 billion at the height of the financial crisis. This round of quantitative easing is a large, but not gargantuan, monetary move.
When it was announced, I felt somewhat uneasy about it. Its size is especially troubling. Obama’s $700 billion stimulus fell short of what was needed to cure our economic ills; most economists argued it needed to be at least twice that large. A $600 billion quantitative easing probably is too small to make a large dent in weak consumer spending and persistently high unemployment. At the same time, it’s big enough to cause an incremental increase in inflation. While I think Republican fears of “hyperinflation” or “stagflation” are overblown (or rhetorical hyperbole), a significant increase in money supply without a corresponding boost in output will push up prices across the board. For example, you could see grocery price increases in the range of 3% to 5% for the year. And there might be no corresponding economic payoff. In particular, the unemployment problem appears to result from structural factors in the economy, which makes the lack of job creation resistant to monetary policy.
It is this latter factor that makes me question the Fed Policy. Although my reasons differ from those of the Republicans, I’m concerned that quantitative easing will simply add inflation woes to our existing economic worries without improving the economy, boosting growth, or bringing down unemployment. That’s why I hope Republican pressure on the Federal Reserve will put brakes on the current direction of Fed policymaking.
I still trust Bernanke. He’s a Depression scholar who understands, as well as anyone on the planet, the monetary mechanics of downward economic spirals. In all likelihood the gold standard, which limits money supply and therefore functions as a money contraction mechanism, was the root cause of the Great Depression. Republicans are not exactly known for being geeks who acquire a commanding real-world knowledge of how things work or the implications of policy options. They’re dart throwers and garbage can lid bangers, and don’t deserve to be listened to. But Roger Rabbit does deserve to be listened to because I know what I’m talking about. I think Bernanke is guessing, and this is shown in the hesitancy with which the easing policy was talked about, bandied around, and then cautiously adopted only after floating trial balloons. He isn’t sure. And that’s a problem. I think he too, to some extent, is throwing a dart. And creating $600 billion of virtual money runs too many risks to undertake it as a matter of guesswork.
So what’s the solution? I believe government should continue to be proactive in facilitating the credit workouts necessary for the economy to stabilize and recover. I disagree with free-market types who argue that a moribund economy will restart itself if you leave it alone. They’re wrong, and history proves them wrong, and they must not be listened to because their mistaken ideology has produced enormous human tragedies in the past and will again if allowed to get sway over public policy. But our current economic malaise is, indeed, somewhat like a common cold that has to run its course while the patient has no choice but to wait. There’s no magic cure for either growth or employment, and certainly not in monetary policy. But monetary policy can be used as a catalyst in the right amount at the right time at critical tipping points. It’s a very delicate mechanism and this time I think the Fed may be blundering ahead into the china shop without really knowing what it’s doing. I would argue caution for now.
Reagan sure ain’t his mother…
he should change his name to reagan taxcuts. sure to beat goodspaceguy in next selection.
Ask the Republicans how they’re going to create jobs. And guess what? “Tax cuts” is not an answer, because we’ve been watching them fail to create jobs since 2002.
But I bet if we fire a bunch of public employees THAT will create jobs. Somehow.
@8 (Let’s see if Goldy dumps both Roger’s post and mine for being off-topic…)
The real question here is whether combination of the entire banking system being a house of cards and the antics of the Republican nut cases prompts other countries to start dumping dollars.
Remember, the Obama….er, I mean Bush…no really Paulson “bailout/stimulus” only covered about the first trillion dollars that evaporated in the real estate/derivatives meltdown. There’s that other $10 trillion sinkhole left to be dealt with.
The right must be somewhat concerned about the prospect of deflation. While the monetary assets of the rich would buy more, so would those of the poor, and the whole game as about how far you can get ahead of everybody else. In fact, in a deflationary period, people on “fixed incomes”, who rightly complain about getting shafted by inflation, would fare rather well indeed–another possible impetus for the right’s frenzied efforts to get rid of Social Security.
The biggest thing we can do to re-start the economcy is to allow mortgage debtors to have their debt divided into two portions: the secured and the unsecured debt.
The secured debt is that portion of the mortgage debt which goes up to the value of the property. The unsecured debt is that portin of the debt which exceeds the value of the property.
There used to be a proceedure in bankruptcy to make this division as part of the claims process, but I think this was eliminated in the Republican “bankruptcy reforms”, all of which favored the creditors. But in any event, there should be a proceedure to do this outside of bankruptcy.
What would this accomplish? Well, it would increase the transferability of property outside of foreclosure. A person could sell their property even if they were “underwater” – owing more than the house was worth. They would then be free to move to another state to take a job, get out from under a balloon payment, etc. In effect, it would “re-set” mortgages with a ceiling at the current property values. This takes away the current inefficiency of using the mortgage foreclosure process to accomplish the same result when a debtor “walks away’ from the debt.
The remaining debt would be unsecured debt, the same as any credit card or loan. The debtor would still have to pay it, or file bankruptcy. But the creditor isn’t really any worse off, because he would be in the same boat if he foreclosed upon the house and was left holding only the property, which the creditor then has to go to the trouble and expense of selling himself, usually at a loss.
# 10: How about “Low Tax” Dunn. Roger’s got a story to tell about that name.
@8: I don’t trust Bernanke or the Fed. They are beyond “captured” by the financial industry. Until the banksters are forced to take their losses, it isn’t going to get “better,” Roger. It’s likely to get much, much worse.
@12 and 13: Additionally, there is an estimated 1.5 QUADRILLION — that’s 1500 TRILLION — of “face” value in derivative “securities” outstanding and they’re adding more as we speak. There is no way in hell to ever pay that off. The entire financial system is designed solely to produce bonuses. The only way out is to force the banksters (there will be collateral damage in pension funds, mortgages, etc. which “may” warrant bailout) to take their losses. Everything else is rightly referred to as “extend and pretend.”
The longer this is allowed to continue the worse / more catastrophic the end will be.
http://www.google.com/search?q.....;tbs=qdr:y
@13 There’s something major afoot regarding this foreclosure business. The latest issue of Rolling Stone (not yet on the streets but readable online) contains a humongous article regarding the mad scramble by the banks to foreclose on everything they can. There’s considerable documention of Florida’s creation of special “foreclosure courts”–a typical one consists of a retired judge contracted to sit in a closet in a county courthouse, glancing over and rubber-stamping hundreds of foreclosure authorizations a day. Just today, the folks at Bank of America were publicly pleading for some kind of quickie “handshake deal” with the collective state attorneys general so they can go right on throwing people out of their houses, many of whom haven’t even missed any payments.
this is by no means “normal”–in theory, each property foreclosed on means the lender is posting a loss. The only thing it can mean is that somewhere, someone stands to make a great deal of money from all this, in very short order.
Anybody else notice the phenomenon that’s rather suddenly appeared at gas stations here in the Seattle area? You can’t use a debit card at the pump any more–you have to go inside and leave the card with the clerk, or prepay with cash. Needless to say, this is coercing many people to use a credit card instead–creating a little more debt to nourish the derivatives monster.
@17
There’s no shortage of gas stations out there and my solution to that problem would be to find a different one or pay cash. I’ve been using cash quite often.
You wonder if Reagan Dunn reads the Seattle Times?
I just wonder if he reads.
17 – I rarely use a credit card for gas – a few times a year maybe. I guess because I generally buy gas at Arco, Costco, Safeway and now QFC.
This is a great example of why the HA admins have little cred about deleting off topic comments…
I gladly pay taxes to the City of Seattle to provide my community with policing services. I gladly pay taxes to the City of Seattle for my neighborhood parks. I somewhat reluctantly pay taxes to King County for open space preservation and “regional” parks – a term of art which apparently encompasses swing sets in Newcastle and swimming pools in Federal Way.
Reagan Dunn and the rest of his Tea Bagging parasite pals can go fuck themselves if they think they should have a right to my money. I voted to approve the levy bonds to buy open space and fix up the zoo. Not to pad Sue Rahr’s overtime budget.
@21 Why don’t you go to DL tonight and suck Goldy’s dick, then ask him to pay you by deleting #8. If he refuses, you still had a nice dinner. And Goldy, who isn’t married, probably could use the blowjob.