Robert Rubin Echoes Robert F. Kennedy: GDP Is Fatally Flawed Measure Of Economic Health – “Former Treasury Secretary Robert Rubin has a must read piece in the Washington Post, ‘How ignoring climate change could sink the U.S. economy.’ The centrist economic panjandrum main point: The notion that tackling climate change will harm the economy is the exact opposite of the truth. In this regard he makes a similar point to one Climate Progress made last week — one that Sen. Robert F. Kennedy made so powerfully on the presidential campaign trail nearly half a century ago ,,, — the GDP is a deeply flawed measure of the economy’s health.”
When all the jobs belong to robots, do we still need jobs? – “… there’s a real scarcity of economists willing to think about the possibility that abundance makes markets obsolete altogether. Property rights may be a way of allocating resources when there aren’t enough of them to go around, but when automation replaces labor altogether and there’s lots of everything, do we still need it?”
Longest UK slump in a century ends – “Of the G7 major economies, only Italy has taken longer than the UK to regain its pre-crisis size and output per head in Britain is still 4 per cent below its pre-crisis level. A muted Mr Osborne admitted there was ‘still a long way to go’.The big question for him is whether the rebound has come too late to save the Conservatives at the next election, but he is convinced voters will not turn back to a Labour party that was in power when the crash hit in 2008.
Former CIA Officials Denied Chance To Preview ‘Torture’ Report – “About a dozen former CIA officials named in a classified Senate report on decade-old agency interrogation practices were notified in recent days that they would be able to review parts of the document in a secure room in suburban Washington after signing a secrecy agreement. Then, on Friday, many were told they would not be able to see it, after all. Some of them were furious, while Democratic Senate aides were angry that they were given the chance in the first place. It’s the latest chapter in the drama and recriminations that have been playing out behind the scenes in connection with what some call the Senate torture report, a summary of which is being declassified and is expected to be released in the coming weeks.
Down under a carbon tax goes down – “Australia’s right-wingers made a move to outdo their American counterparts. Prime Minister Tony Abbott and his Liberal Party (as these Antipodean conservatives style themselves), won final legislative approval for repeal of Australia’s carbon tax on major polluters, which had been enacted under the previous Labor government and had set a price of more than twenty dollars a ton on carbon-dioxide emissions.”
Darth Vader is polling higher than all potential 2016 presidential candidates – “On Tuesday FiveThirtyEight released the results of a poll of Americans’ opinions on the “Star Wars” universe. Not surprisingly, Jar Jar Binks is the most reviled character in the series. As Walt Hickey notes, the Gungan from Naboo posted lower favorability numbers than Emperor Palpatine, ‘the actual personification of evil in the galaxy.’ On the other hand, with a net favorability of -8, Jar Jar is considerably more popular than the U.S. Congress, which currently enjoys a net favorability rating of -65.
Tony Abbott briefed Rupert Murdoch on paid parental leave before party room – “Tony Abbott gave media proprietor Rupert Murdoch a detailed briefing on his controversial $5.5 billion paid parental leave scheme before he announced it without consulting his shadow cabinet or MPs. The revelation about the scheme – which continues to be a contentious issue within the Coalition and between the government and the business community – is in a new biography of Treasurer Joe Hockey.”
A 70-year-old aide who does not mix with journalists as a public relations officer and for Indian Prime Minister Narendra Modi that’s the media team. This novel approach of largely ignoring the press extends as far as not inviting New Delhi political correspondents to fly on Air India One for international visits. And the flacks, the BBC reports, are sulking about it.
Ministers and bureaucrats have also been reportedly told to avoid the media and speak only when Mr Modi offers an “official line”.
“Mr Modi’s attitude is now percolating to his council of ministers who were once media friendly, but are now avoiding journalists,” says senior journalist Kuldip Nayar.
Even the media-friendly Finance Minister Arun Jaitley offered just a handful of interviews after presenting the federal budget earlier this month.
Mr Modi has deputed Law Minister Ravi Shankar Prasad and Information and Broadcasting Minister Prakash Javadekar, both former party spokesmen, to speak on behalf of the government.
Mr Modi has not spoken about limiting access to journalists, but many observers say it may have something to do with his troubled relationship with the media.
When he was the chief minister of Gujarat, he faced severe media criticism for doing little to stop anti-Muslim riots in his state in 2002 which left more than 1,000 dead. He has always denied the allegations.
“He simply doesn’t trust the media very much,” says a senior journalist, who prefers to remain unnamed.
As for the PR man, Jagdish Thakkar, he is described by journalists as rarely interacting with the media. “He simply smiles. And then we smile. There is no exchange of information,” says a senior reporter, requesting anonymity.
Indonesia’s President-elect Joko “Jokowi” Widodo is using an unusual method to help him select a Cabinet. He is asking people to vote on his website for one of three choices for each of the 34 available posts. There is also an option to write in another name.
The Jakarta Post this morning says several names from President Susilo Bambang Yudhoyono’s Cabinet, including Foreign Minister Marty Natalegawa, Tourism and Creative Economy Minister Mari Elka Pangestu, Coordinating Economic Minister Chairul Tanjung, Bank Indonesia (BI) Governor Agus Martowardojo, former trade minister Gita Wirjawan and State-Owned Enterprises Minister Dahlan Iskan are on the list.
The list also includes former UIN Syarif Hidayatullah Islamic state university rector Azyumardi Azra and Deputy Religious Affairs Minister Lukman Hakim, who are touted as potential religious affairs minister candidates, while popular economists including National Economy Council member Aviliani, Gadjah Mada University (UGM) academic Sri Adiningsih and energy expert Kurtubi are named as potential candidates to fill economic posts.
Several Indonesian Democratic Party of Struggle (PDI-P) politicians, including Rieke Dyah Pitaloka, Pramono Anung, Maruarar Sirait, Puan Maharani, Hasto Kristiyanto and Eva Kusuma Sundari are also on the list.
When asked about the survey, Jokowi said, “I just want to hear the public’s views.”
States That Raised Minimum Wage See Faster Job Growth, Report Says - New data released by the Department of Labor suggests that raising the minimum wage in some states might have spurred job growth, contrary to what critics said would happen. In a report on Friday, the 13 states that raised their minimum wages on Jan. 1 have added jobs at a faster pace than those that did not.”
Court’s ‘Verbal Warrior’ still has lots of fight left – “On Thursday morning, Tony Serra will put on his best $10 suit and loose secondhand shoes to begin what could be his last big courtroom battle – the defense of Raymond “Shrimp Boy” Chow, presumed leader of a Chinatown money laundering ring and a central figure in an indictment that has also targeted state Sen. Leland Yee. The hearing, in federal court before U.S. District Judge Charles Breyer, will involve 29 defendants. Among their lawyers, Serra will be easy to spot – shaggy side hair, broken teeth, loud tie, but still at his fighting weight of 195 pounds and arguing for his client at every turn.”
On Proportionality – “Proportionality doesn’t mean ‘tit for tat,’ as in the family feud. The Hatfields kill three McCoys, so the McCoys must kill three Hatfields. More than three, and they are breaking the rules of the feud, where proportionality means symmetry. The use of the term is different with regard to war, because war isn’t an act of retribution; it isn’t a backward-looking activity, and the law of even-Steven doesn’t apply.”
What can you say – unless you are a banker – to disagree with the conclusion of this piece that while it will always be true that bankers do not want to turn away business, they would probably rather sacrifice some of their yearly bonus than risk spending a decade of their life behind bars?
Floyd Norris has an interesting piece discussing Citigroup’s $7 billion settlement for misrepresenting the quality of the mortgages in the mortgage backed securities it marketed in the housing bubble. Norris notes that the bank had consultants who warned that many of the mortgages did not meet its standards and therefore should not have been included the securities.
Towards the end of the piece Norris comments:
“And it may well be true that actions like Citigroup’s were necessary for any bank that wanted to stay in what then appeared to be a highly profitable business. Imagine for a minute what would have happened in 2006 if Citigroup had listened to its consultants and canceled the offerings. To the mortgage companies making the loans, that might have simply marked Citigroup as uncooperative. The business would have gone to less scrupulous competitors.”
This raises the question of what purpose is served by this sort of settlement. Undoubtedly Norris’ statement is true. However, the market dynamic might be different if this settlement were different.
Based on the information Norris presents here, Citigroup’s top management essentially knew that the bank was engaging in large-scale fraud by passing along billions of dollars worth of bad mortgages. If these people were now facing years of prison as a result of criminal prosecution then it may well affect how bank executives think about these situations in the future. While it will always be true that they do not want to turn away business, they would probably rather sacrifice some of their yearly bonus than risk spending a decade of their life behind bars. The fear of prision may even deter less scrupulous competitors. In that case, securitizing fraudulent mortgages might have been a marginal activity of little consequence for the economy.
Citigroup’s settlement will not change the tradeoffs from what Citigroup’s top management saw in 2006. As a result, in the future bankers are likely to make the same decisions that they did in 2006.