Today’s Submission by: Dave Imbriaco

1. Recommendation of the Day: The Presidents of the United States of America  – Love Everybody (2004)
Calling all of you that grew up in the 1990s!  Remember the songs “Lump”, “Kitty” and “Peaches”?  The Seattle-based Presidents of the United States of American (casually shortened to just “The Presidents”) burst onto the scene in 1995 with their self-titled debut and enjoyed a few brief years of superstardom before disappearing from the limelight.  In this time, they have since released five studio albums and have not departed from their signature sound: catchy melodies that you cannot help but sing a long with, a post-punk feel, their signature modified “basitar” and “guitbass”, and characteristically hilarious lyrics.  I picked up their discography a few weeks ago and their 2004 album “Love Everybody” is a great one.

2. Random Fact of the Day: Pope Julius I decreed Christmas to be on December 25 in 350 in order to make it easier for Roman Pagans to convert to Christianity, who were already celebrating a holiday to Isis on December 25 and the festival of Saturnalia on the Winter Solstice.

3. Random Quote of the Day: “I think it’s the duty of the comedian to find out where the line is and then cross it deliberately.” –George Carlin

4. Top Pick from the Internet: For all you Modern Warfare 2 players.  I’m still working on my throwing knife skills…

5. Random Discussion Topic of the Day: Do you feel like something big is coming soon?   Like, something that is going to completely change the world as we know it?

Today’s Submission by: Brendan McInerney

1. Recommendation of the Day: Benny Goodman Plays Mozart
Today I would like to recommend to you an album; an LP if you are so fortunate. The album of which I speak is titled Benny Goodman plays Mozart. It features the Patriarch of the Clarinet performing the two compositions that Mr. Mozart created for said instrument (a concerto and a quintet) along with the Boston Symphony Swing Quartet. If you are still on this page it probably means that you are a member of the slim majority of people out there that are not board to death by words like ‘quintet’ and ‘Mozart.’ However, I understand it is probably more likely that your head failed to hit the proper part of the keyboard as you passed out in boredom. Regardless, I think this is an album that everyone should listen to. Although he composed music well over 200 years ago, there is a reason for its enduring popularity; the music is antiquated, but beautiful nonetheless. Having an artist who traditionally plays jazz perform the piece only improves its aesthetic pleasure. While I cannot claim that a piece of music composed 1791 years ago being played by a man in 1938 could be called a modern, there is a certain uniqueness to these recordings that will appeal to a broader audience.

2. Random Riddle of the Day:
There exists a word in the English language that will become a different word every time you remove a letter and will continue to be a word every step of the way until you are left with a single letter. List the letter you remove each time and the words that result at each step.

3. Random Quote of the Day:
“Liberty is to the collective body, what health is to every individual body. Without health, no pleasure can be tasted by man; without liberty, no happiness can be enjoyed by society.”
-Thomas Jefferson

4. Top Picks from the Internet: NPR Music

My number one source for new music as well as news relating to the music industry, and you can too. The site has pages for a number of different genres and tastes and their music snob writers provide all the benefits of reading someone that is obsessed with music without being too critical or pretentious.

This Painting was made on the Internet in 1888
Fusilamento de Torrijos en la playa de San Andrés by Antonio Gisbert Pérez (1888 – Museo del Prado)

Random Discussion Topic:

If you were Carmen Sandiego, where would you hide?

I’d hide in some caves in Afghanistan, try and find me there little kids.  Those tunnels are endless!

Some beautiful shots of February in New Brunswick, New Jersey. Bracaglia demonstrates his substantial skill with a camera, proving that in his hands, an SLR is more valuable than in those of the average Flickrer. Feel free to leave your comments below and enjoy! All Rights Reserved by the artist.

“Unfortunately, snow records are not lengthy or complete at most locations around the state, but I am confident in stating that most locations established new monthly snowfall records for any winter month in at least the past 130 years.” [2]

Then there was the rain. The Raritan River rose several feet, burying several acres of riverside park, and several tens of thousands of trees.  “Except for central and northern New Jersey, rivers across the Mid-Atlantic are back within their banks, ending the flooding.”[3] An interesting video of a flooded Raritan-side Exxon can be found posted to Moxietoday.com, here; draw your own conclusions. Power was cut to several businesses and buildings from George Street in New Brunswick to Route 27 in Edison and beyond.  My own place of employment, Legal Grounds, didn’t open for lack of electricity. It was a hell of a job to remove the perishables to a safe location. Even as I write, some businesses and houses still wait to regain power.

All of this poor weather comes out of nowhere. Certainly, this is an exceptionally difficult way to start the year. The implications of the loss in revenue workers and businesses have sustained as a result of inclement weather have yet to fully appear. I know I missed several days of work when I could have used the hours.

And it’s not over yet. As a result of the massive February snowfall, a huge amount of precipitation still lingers in the area. As we approach spring, that moister will continue to bounce around between the upper hemisphere and the ground. If you haven’t already, go out and buy a raincoat and an umbrella, before you wish you had.

New Jersey, facing a massive budget deficit and an equally massive impending government spending cut, was perhaps the state hit hardest by the bad weather, cutting deeper into Jersey’s infrastructure maintenance budget.  As President Obama completes his first term, rarely seen weather conditions have everyone’s minds on climate change. As people struggle with an unprecedented recession, an unusual number of shifts are lost. Peoples’ nerves are stretched to the breaking point…It is certainly an interesting time to be alive…

Below, you will find a  94 picture slide show, just some photos I snapped while walking around New Brunswick these past weeks and days. They are by no means professional. The first set deals with the snow. Notice how everyone was walking in the streets that day for lack of a sidewalk. The second set deals with the rain and flooding, while the third depicts some of its aftermath. Make sure you note the difference in the water levels of the Raritan. To enlarge the slide show to full screen, click the bottom left hand corner. You can also pause, play or scroll through the show. Enjoy.

[1] New Jersey State Climatologist of the Rutgers University Center for Environmental Prediction, and School of Environmental and Biological Sciences/NJAES

[2] http://climate.rutgers.edu/stateclim/?section=menu&%20target=feb10

[3] http://www.weather.com/newscenter/stormwatch/

There are two forms of government economic policy: monetary and fiscal. Monetary policy is conducted by a central bank, or the Federal Reserve Bank in the United States, while fiscal policy is conducted by the Department of the Treasury and the Legislative Branch.  This article will examine both forms and evaluate their relative effectiveness in promoting economic activity and growth in times of recession.

Monetary policy is conducted in a single fashion: the raising and lowering of interest rates.  Specifically, the Federal Reserve targets a single interest rate known as the Federal Funds Rate.  This is the interest rate that commercial banks charge each other on overnight loans.  This in turn will partially determine the values of most other interest rates in the economy.  The Federal Reserve affects the Fed Funds Rate by means of supply and demand.  The Federal Reserve Bank of New York (one of the twelve banks that comprise the Federal Reserve system) holds what are known as open market operations wherein they buy or sell large quantities of securities.  Through these operations, the Federal Reserve is able to modify the portfolio composition of commercial banks to achieve the desired levels of liquidity.  When they purchase large quantities of securities, they are replacing less liquid securities with fully liquid cash.  This has the effect of pumping additional cash into the commercial banking system, and by increasing the supply of loanable funds, they are able to lower the price of those funds (the interest rate).  The counterpart of this is to sell large volumes of securities; this sale removes liquid cash from the commercial banking system and replaces it with less-liquid assets.  This reduces the amount of loanable funds in the system, thereby raising the price (the interest rate).

The general level of interest rates has an effect on economic activity.  When interest rates are low, the cost of borrowing money goes down and more people are induced to borrow in order to spend or invest.  This leads to economic growth and spurs inflationary pressure.  Conversely, when interest rates are high the cost of borrowing increases which tends to reduce investment and spending, leading to decreased economic output and deflationary pressure.  Alternatively, when interest rates are low there is a small premium to saving, which should induce individuals to consume more and save less.  Similarly, when interest rates are high, there is a large premium to saving, which should induce individuals to shift their earnings from consumption into savings.

The fiscal policy can take one of two forms.  These forms are tax cuts and government spending.  Each tends to have a similar effect, but one is clearly superior to the other from an economic standpoint.  Tax cuts and spending both aim to increase output by stimulating demand.  The increased demand will cause firms to increase production and thereby hire additional employees and rent additional capital.

The key characteristic of fiscal policy is something known as the “Fiscal Multiplier”.  This is the multiplicative effect of fiscal policy on overall economic output.  The key concept behind understanding this is an individual trait known as the marginal propensity to consume.  The marginal propensity to consume is the fraction of an additional dollar of income that an individual will choose to spend on consumption.  The marginal propensity to save is the remaining fraction, which the individual chooses to save.

The story behind the fiscal multiplier goes like this: suppose an individual receives an additional $100.  Let us assume that this individual’s marginal propensity to consume is 0.9.  That is, he will spend $90 of that original $100.  For the sake of numerical simplicity, let us assume that all agents in the economy have an identical marginal propensity to consume.  The first individual, let us call him A, will spend that $90 at a store owned by B.  B then sees an additional income of $90, and will decide to spend $81.  This $81 is now income to individual C, who will spend 90 percent of it and so forth and so forth.  From this simple example, we can see that the overall effect of that $100 on economic output is much more than $100.  In this example, the multiplier takes the form of a geometric series and would take a value of 10.  In fact, the greater the marginal propensity to consume, the greater the value of the fiscal multiplier will be.

This understanding allows us to compare the relative effects of tax cuts or government spending.  Let us again compare a tax cut of $100 and government spending of $100, where agents are assumed to have a marginal propensity to consume of 0.9.  The tax cut will be returned to an individual, who will then spend $90 of it, and the multiplicative effect will begin from the initial outlay of $90.  With government spending, however, that initial $100 is completely spent beginning the multiplicative spiral from there.  Thus it is easy to see that government spending will have a larger overall multiplier than tax cuts due to the fact that the public will save a fraction of the initial tax cut which will then not experience the expansionary effect of the multiplier.  Another caveat about tax cuts is that they tend to accrue to the wealthy, who are much less likely to spend this additional income than working or lower-class individuals.  When an individual’s basic needs are met, he or she will be more willing to save additional income, thereby lowering their marginal propensity to consume.

An extension of this investigation into the fiscal multiplier suggests that the optimal way to conduct fiscal policy is to spend on infrastructure and education and to increase transfer payments to the poor and unemployed, rather than to simply cut taxes.  The poor and unemployed are least likely to have their basic needs met and thus will be more likely to spend any additional income they receive.  In other words, the poor and unemployed should have the greatest marginal propensity to consume and will have the greatest stimulatory effect on the economy.

There are some who claim that government spending cannot increase output because it is merely taking a dollar away from private consumption and allocating it to public consumption.  Therefore, the total amount of consumption has not changed, merely the composition of consumption.  This argument is technically correct, but only if certain conditions are satisfied and certain assumptions hold.  In reality, they almost never hold.  The argument rests on the assumption that the economy is in a perfectly competitive equilibrium with full-employment, that all resources are fully-utilized, and that unemployment is never involuntary.  It is easy to see that these conditions are almost never satisfied; in fact, it is possible to say that they are never satisfied when fiscal policy is being viewed as a potential option.  In fact, this line of logic would explain the Great Depression as occurring because a quarter of the U.S. workforce decided to take an extended vacation.

The argument that government spending “crowds out” private spending is an interesting one that deserves greater scrutiny.  The late British economist John Maynard Keynes expounded upon this argument in a manner that is worth repeating.  If we are to assume that government spending merely shifts capital from one use to another, and thereby cannot increase the total level of output, then let us extend that argument to private firms.  If a private firm wishes to increase its investment and build up capital, it must be that it can only do so by taking capital away from some other productive use, and therefore can neither increase employment nor output.  This is obviously incorrect, and I doubt that there are any economists who would craft such an argument.  But it shows that the only way the “crowding out” effect of government spending can be validated is if the economy is at full-employment or we treat the government as a fundamentally different economic creature than private firms.

There is no reason why we should think of firms as being different from the government.  Both seek to maximize the profits accrued to their shareholders.  In the case of the government, it is not monetary dividends that accrue to the shareholders (the public) but rather dividends in the form of security.  That security could come in the form of national security, financial security through a safety net, or even health security if we manage to enact meaningful healthcare reform such as a single-payer system.  The government also provides basic services to the populace in the form of roads, airports, parks, museums, public education, municipal police and fire departments, and more.

However, fiscal policy is generally a second choice of the government, which uses monetary policy as the first tool in the toolbox.  This is perhaps due to the fact that the Federal Reserve is an independent entity which can act without seemingly endless deliberation and posturing by Congress.  However, when monetary policy loses all traction, as is the case now when the target federal funds rate is 0.25%, then fiscal policy must step in to fill that void.  Thus is important to know how to compare the different forms of fiscal policy by means of their estimated multiplier.

According to congressional testimony by Mark Zandi, the chief economist for Moody’s, the highest estimated multiplier for any form of tax cuts was 1.29.  In contrast, research done by Christina Romer, the chair of Obama’s Council of Economic Advisers, estimated the multiplier on government spending to be approximately 1.5.  Additionally, the most effective form of government spending, an increase in food stamps to the needy, had an estimated multiplier of about 1.7.  Furthermore, recent research done by Gautti Eggerttson of the New York Federal Reserve Bank has estimated that when facing the zero interest rate lower bound (as we do today), the multiplier of fiscal policy increases to approximately 2.  He explains this as due to the fact that people find the Central Bank’s promises of price inflation targeting to be no longer credible as they cannot lower interest rates any further, and people do not expect them to raise rates given the economic climate.  If people feel that the government cannot respond to inflation (by raising interest rates), then they might decide to purchase consumption goods now before prices rise.

Thus it can be seen that economic policy by the government can be useful in periods of recession in order to help jump-start economic activity, as well as in expansionary periods to curtail inflationary pressure.  The appropriate mechanism is always case-dependent.  There is no economic policy panacea that is suitable for all environments.  Monetary policy should be the first line of policy in order to deliver quick stuns and jolts to the economy; but when monetary policy fails, fiscal policy must take its place in the form of massive stimulus spending in order to pull the economy out of a deep rut.

Thumbnail image licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License,  from http://www.freefoto.com/download/04-28-36?ffid=04-28-36. Thanks guys!

Today’s Submission by: Matia Guardabascio

1. Recommendation of the Day: Bon Iver
If you are depressed, recently broke up with someone or are generally miserable all the time, then you would like Bon Iver. His music is a perfect unity of melody and lyrics. He says so much in so few words, that I can’t help but marvel at his use of metaphor.  If I had to describe his sound to you, I probably wouldn’t, I’d just tell you to listen to it. So on that note, listen to Bon Iver. Good starting points for new listeners are the songs “Skinny Love” and “Blood Bank” which you can find here and here, respectively.

Skinny Love:

2. Random Literature Quotation:

“If you pick up a starving dog and make him prosperous, he will not bite you; this is the principal difference between a dog and a man.”      ~Mark Twain

3. Random Fact:

In the song “Booty Man,” affectionately referred to as “The Booty Song” by some, the singer Tim Wilson uses the word “booty” 135 times out of 344 total words in the song, including the final verse where he says “booty” twenty times in a row.

4. Top Pick of the Internet:
Everyday Normal Guy pt. 2… Motherfuckah

5. Discussion Topic:
The United States is an empire. Yes, no, maybe so?

This spring, Philadelphia is hosting Philagrafika 2010, a city-wide festival in about 80 museums and galleries throughout the city and region, celebrating the printed image through the work of 300 internationally acclaimed artists* from around the world.  The theme of the festival is “The Graphic Unconscious.”        Featured artists include Americans Eric Avery, Enrique Chagoya, Kiki Smith, Swoon, and many others, as well as numerous artists from around the world, including Christiane Baumgartner (Germany), Orit Hofshi (Israel), Pepon Osorio (Puerto Rico and U.S.A.), Superflex (Denmark), and Qui Zhijie (China).

On April 8, a day-trip organized by the Zimmerli Art Museum will visit several different exhibits in this unusual event.  The day will begin with a docent-led tour of Picasso and the Avant-Garde in Paris at the Philadelphia Museum of Art.  Then the group will view that museum’s The Graphic Unconscious exhibition. After lunch at the museum, the group will travel to the Pennsylvania Academy of Fine Arts to have a tour of its contribution to Philagrafika 2010.  The day will conclude at The Print Center, a non-profit institution created to promote the appreciation of prints.  The Zimmerli’s Curator of Prints and Drawings and Director of the Morse Research Center for Graphic Arts, will be on our tour to share her expertise on Picasso and prints.  It will be a special experience to first view Picasso’s work and other cutting-edge art of his day, and then compare them with today’s new prints, which push the boundaries of what is now possible in the printmaking media.    If you are interested in obtaining more information about the trip, please visit http://www.zimmerlimuseum.rutgers.edu/events/index.php?id=21 or call 732.932.7237  x611 to request the trip flyer.

“Our City is so dynamic, always moving forward, always making progress because we work together, create partnerships, and share a vision for our future that embraces meaningful change to make New Brunswick an even greater place to live, work and play. New Brunswick is always getting better,” Cahill said. “I look forward to working with our residents for an even better tomorrow.”

“I have been honored by New Brunswick’s voters to serve as their Mayor and I hope to be so honored again this November,” said Cahill. Volunteers from Cahill’s campaign will begin canvassing the City immediately, talking with residents about issues facing the City, urging them to support the Mayor’s bid for reelection, registering new voters and asking everyone to join the campaign to ensure that the positive change accomplished under Mayor Cahill’s leadership continues.

Under Mayor Cahill’s leadership, the City’s economy has flourished, creating thousands of new New Brunswick jobs for New Brunswick residents, resulting in a City unemployment rate more than 2 percentage points lower than the State and federal averages. Cahill will work to create even more new jobs by helping our residents start or expand their businesses and by attracting even more new employers to New Brunswick.

“It’s all about improving the quality of life for all our residents in all our neighborhoods across the City,” said Cahill. New Brunswick has built and rehabbed thousands of new housing units for all income levels throughout New Brunswick, changing underutilized properties and poorly maintained buildings into new neighborhoods and community assets. Cahill says we can and will do more to improve neighborhoods through inventive public-private partnerships with community non-profit organizations and  additional public improvements to streetscapes and parks. Cahill believes we must protect our environment by eliminating litter, utilizing alternative energy, promoting pedestrian and bike friendly streets, and expanding mass-transit. Cahill says we have come so far to make our City safer and we will do what it takes in partnership with our residents to make sure that our neighborhoods and city streets are safer than ever before.

“In the next four years, we must continue to pursue our vision of a modern Urban Center that competes and thrives in the global economy of the 21st Century. Together, we have done remarkable things, accomplishing an unimaginable urban transformation in such a short time. We can, should and will do so much more and it all starts with the help and support of the people in this campaign,” said Cahill.

The Mayor’s two longtime running mates, Joe Egan and Blanquita Valenti are not seeking re-election and will complete their tenure on the New Brunswick City Council at the end of this year.

“I thank the people of New Brunswick for their support. It’s been an honor to be a part of the City’s revitalization that has taken New Brunswick beyond anyone’s wildest imagination,” Egan said. “I will continue my service to the people of New Brunswick as their representative in the State Assembly. I’m thankful for the love and support of my family and the people of our City.”

“I’ve been honored to serve the residents of New Brunswick. I want to thank the voters and my family for their encouragement and support,” Valenti said. “I’m proud to have been a part of the team that helped to keep our City moving forward and always focused on the future. I look forward to continue working with the Mayor, both in government and this fall on the campaign trail.”

New Brunswick Democratic Organization will conduct an open screening process to select a slate of candidates to run in the June 8th primary. Mayor Cahill looks forward to the process and the opportunity to lead a new Democratic team to victory.