Krugman

These guys are like gang members, once an academic, always an academic, until the day your policies are adopted by the leading political party and they quickly lead to mass social upheaval and economic turmoil. But even then, only if you belong to the "Right" will you be so disgraced and your academic street cred withdrawn. Lefties are free to rep themselves as hardcore academics all they want, no matter how bad they screw things up. Unless you're Ben Bernanke, or Hank Paulson. Then you just spook dissenters with end-of-the-world rhetoric if you don't get your way. Or baseball bats...The son of two statisticians... I almost feel sorry for him, the poor boy never had a chance.

This country has not reached the level of control and fear seen in Orwell’s 1984 and V For Vendetta, yet. We are moving relentlessly in that direction. Surveillance, monitoring, spying, censorship, secret prisons, predator drones, and conforming to state rules and regulations put citizens further under the thumb of an all powerful state. The freedom to dissent, the freedom to be left alone, the freedom to speak out against injustice, the freedom to disagree with your government, and the freedom to present your ideas without fear of retribution or penalty are essential in a democratic society. The next phase of this Fourth Turning will surely include another downward spiral in financial markets as un-payable debts accumulate to a tipping point level. When ATM machines stop spitting out twenties, food shelves are bare and gas stations are shuttered, social chaos will ensue. The government will react with further command and control measures. In V For Vendetta, the government creates a terrorist incident in order to gain unquestioned control over the population. Americans will need to be more vigilant than they have been over the last ten years in keeping an eye on their government.

• ECB buying every sovereign bond it can find. Seriously
• Obama Eyeing Internet ID for Americans (CBS)
• US Banks Face Fresh Stress Tests (FT)
• SNB Clarifies Stance On Portuguese Bonds (WSJ)
• Demanding the Mark Back: Opposition to the Euro Grows in Germany (Spiegel, h/t Mark Mansfield)
• Evans-Pritchard: Deepening crisis traps America's have-nots (Telegraph)
• Trade War Looming, Warns Brazil (FT)
• Yellen Speech May Offer `Proxy' for Planned Unwinding of Fed QE (Bloomberg)
• Paul Krugman Channels Jimmy Carter, and The Club of Rome (Forbes)
• Portugal under pressure to seek EU/IMF aid (Reuters)
• China City Set to Tax Residential Real Estate (WSJ)
• "Illusory Prosperity" - Ludwig von Mises on Monetary Policy (Hussman)
• Queensland Floods Within Insurers' Capacity Deluge Worsens (Bloomberg)

"You know that Republicans will yell about the evils of partisanship whenever anyone tries to make a connection between the rhetoric of Beck, Limbaugh, etc. and the violence I fear we’re going to see in the months and years ahead. But violent acts are what happen when you create a climate of hate. And it’s long past time for the GOP’s leaders to take a stand against the hate-mongers." Paul Krugman

Ruh roh. After yesterday's euphoria around the new year wiping the economic slate clean, investors woke up and...

It seems anywhere one looks there days, one reads a refutation of Paul Krugman's tortured "economist" logic. Lately, the NYTer has fallen into the crosshairs of many due to his contention that currently taxes, based on some chart which the Nobelist probably mislabeled again, are at 20th century lows. Of course, cherrypicking data that fits the theory is precisely what economists do. Which is why Krugman may be excused for missing out on a trend so subversive that we have seen it only mentioned by tax attorneys at Weil Gotshal: namely the gradual transition in the definition of taxable income from a "net" to a "gross" tax basis. As Weil's Kimberly Blanchard explains: "Many observers — most prominently Paul Krugman — write in terms of tax rates being at an all-time low and compare today’s rates favorably with those that existed early in the 20th century. Their implication is that tax burdens are lower today and, therefore, there must be room for tax hikes. But we know that taxes are not lower today. How could they possibly be when government revenues are so much larger, even as adjusted for inflation? The increasing size of the national deficit cannot explain the gap, which was already in evidence during the Clinton years. The average individual taxpayer is frustrated and confused because she hears that tax rates are down but somehow she believes (correctly) that her taxes keep going up. What has occurred is that the base has expanded dramatically, leading to taxes far higher than those paid by individuals historically." Expect to hear much more of this in the next two years.

• Commodities Beat Stocks, Bonds, Dollar in 2010 (Bloomberg) - translation: anything that can't be diluted does and will do better than things that can be diluted
• How a mortgage clearinghouse became a villain in the foreclosure mess (WaPo)
• Euro Imbalances Mean 80% Risk Bloc Will See Structural Overhaul, CEBR Says (BusinessWeek)
• Estonia Prepares to Join the Euro Zone (WSJ)
• Simon Johnson: Fresh Crises Loom in Europe and the U.S. (NYT)
• That pesky CRE issue still refuses to go away: Commercial property loans pose new threat (FT)
• Krugman on The New Voodoo and hypocrites (NYT)
• Mises Institute on the Hypocrisy of Krugman (Mises)
• Venezuela to Devalue its "Strong Bolivar" Currency (WSJ)

The market continued to rise today on volume lighter than Ben Bernanke's private sector experience and even lighter than ad sales for...

To find out, we'll look at a couple comparisons to get an idea of what is going on in the rest of the economy. And then we'll compare the government's efforts in the 1930s to today ...

Keep in mind this is a very thin rally that is very likely nothing but window dressing aimed at dragging money off the sidelines...

My list for the year.

• Wen Is Confident China Can Contain Inflation (WSJ)
• Job Offers Rising as Economy Warms Up (WSJ), too bad only temp workers actually get hired
• Euro Pain Turns to 23% Gain for Europeans Through S&P Rally (Bloomberg)
• A neutered teleprompter speaks: Obama Wants Tax Cuts for Wealthiest Americans Ended in 2012 (Bloomberg)
• Krugman waxes philosophic on runaway commodity inflation (NYT)
• China's 2011 money supply back to normal level (Xinhua)
• The Economic Year in Review - Say goodbye to 2010 (Weekly Standard)
• Bankers: Don't fret. Harvard Biz School still loves you (Fortune)

No. Tax cuts are good, but right now it's like pushing on a string.

The market crept up again today like Jessica Simpson's pants or like Pete Townshend at...

I'm all for capitalism, but Banana Republic level inequality is killing us ...