Tuesday, September 30, 2008

Let 'em go down?

From CNN:

Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan:

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.

Sunday, September 28, 2008

strategy vs. tactics

I'm sure people have weighed in on strategy and tactics. Tactics is what wins battles; strategy is what wins wars.

It's not a minor topic, really. George Washington wasn't a great tactician. I just read he never beat a British army one-on-one (without the French.) (That gibe doesn't seem to count the battle of Princeton; but maybe the writer is counting it as a draw.)

But he was a great general because he understood strategy: He understood that the Americans could win if he kept the continental army alive until he could deliver a crushing blow.

Ditto for Lincoln. At the very beginning he saw the Union could win if it strangled the South with a blockade, then Union armies moved in concert to attack the South, preventing the South from using its interior lines to move its armies back and forth to meet disconnected Union threats.

Same for FDR. He understood how a global war had to be fought and won.

I should add that it also includes all the political, psychological and financial factors. Woodrow Wilson's Fourteen Points were a strategic move; ditto for the Emancipation Proclamation, and FDR's Four Freedoms.

One could say Obama doesn't see the strategic problem: who is our enemy? How do we defeat them? Obama would say it's al-Qaida. But it might be Islamofacism. It might even be wider: the whole world that's being left behind (the Mideast, but also Latin America (from narco gangs in Mexico to Chavez) to Putin and Russia.

Anyway, it perhaps is the question.

Saturday, September 27, 2008

Mississippi and Peoria

The debates showed the bankruptcy -- of the political class.

Jim Lehrer was begging them to educate the public on the bailout plan. Neither was willing or able to do so.

Both instead stressed their personal qualities and sniped at the other.

This is a start contrast to the speech that launched Abraham Lincoln's national political career. In 1854, the Kansas-Nebraska Act roused him from being in a sort of political sleep mode, and landed him six years later in the White House.

The Act that so stunned Lincoln overturned the Compromise of 1850, and left the decision on whether to allow slavery in the two territories to the vague promise of "popular sovereignty."

If that reminds you of the horror of high school history, perhaps that's why modern politicians are so scared of facts and history.

But in his "Peoria speech" of Oct. 16, 1854, Lincoln addressed the history, and future, of the nation. (He had actually given the speech earlier in Springfield, but better copies were made of the Peoria speech, so it gets the honors.)

Anyway, if the very mention of the Wilmot Provisio still fills you with dread, you might want to check out the Peoria speech. Lincoln begins telling the legal and political history of slavery in the U.S. that most teachers should envy.

I'd like to compare it to the public remarks of the candidates this year. I think the candidates' approaches are familiar. I don't mean to pick one over the other; their flaws seem evenly distributed.

First, Lincoln believes the past is an invaluable tool for understanding the present, and guiding us to the future. This may seem a truism, but note how often politicians duck talking about the past.

Even the soc-called conservatives in America in our era believe the past is dead and gone. They are forward-looking; indeed, that is a universal compliment.

But that leaves us marooned in the present, without understanding of how we got here, and bereft of clues for indeed moving forward.

Lincoln also eschewed the politics of personality. Though his family was one of those that fled Kentucky for the free states of Indiana and Illinois, he doesn't mention that directly. He doesn't tell anecdotes about splitting rails or living in a log cabin -- or, of course, having a Kenyan father, or field-dressing a moose, or being held prisoner.

His speech itself was the best display of the talents and traits needed for the job.

I couldn't help thinking McCain and Obama didn't show much. They showed they could repeat oft-rehearsed jibes. But they didn't show they understood the issues.

Lincoln, after reviewing the history, turned to the Kansas-Nebraska Act. He didn't focus on the traits or character of those behind it -- at least directly. He discussed why it was harmful to the nation.

More important, he discussed why slavery was wrong. To say that sounds odd to our jaded modern ears.

Candidates in our relativistic time dare not say so. A policy is misguided, or a budget buster, or it harms the economy, but they seldom say something is just flat wrong.

Lincoln's racial attitudes were less than admirable by our lights. But, as Frederick Douglass noted, to the white voters of his time, they were bold and even threatening.

Friday, September 26, 2008

It's on

live blog of first debate:

Obama already looks aged.

earmarking as a gateway drug == that's a good line.

Earmarks process has been abused, Obama agrees.

McCain is getting it -- earmarks corrupt.

Now, help for most folks is not a bad idea here.

At seven-twenty-six, I'm not sure where this is going.

We've got to invest in science and technology -- hold on to your wallet.

Fixed-cost contracts -- this is a good line, to me. Do others think so?

McCain -- spending freeze?

McCain takes on -- offshore drilling and nuclear power.

Obama looks presidential. Maybe that's all he needs.

Obama's trope on Iraq may be a political winner.

But so may McCain's rejoinder on the surge.

The problem with Obama's bravado on Afghanistan -- his party will never let him fight. MoveOn and the Senate liberals will never let him do anything.

No soldier dies in vain?

The flaw of the debate format: will Obama's party back his bold words? Of course not.

Will Dems back free trade to root out terrorism? of course not.

Can McCain actually marshal forces as president?

I found this dull, pointless. What would they actually do? Not just talk.

But Obama talks well.

Oh, he says he believes in missile defense, but his party won't back him!

Yes, all in turn. He won't be able to go boldly into Pakistan. Even if he means it.

We have weakened our capacity to project power .... by projecting it!

McCain projects "love" for vets. Powerful.

McCain ends well.

I hate having to read about how everyone else felt.

I don't think it's what you see; the real thing is behind the scenes.

Thursday, September 25, 2008

McCain move a winner


Marshall calls it 'the biggest 'dog ate my homework' in history." I do think there's something to that--McCain's debate-delaying move seems more than a bit immature and self-indulgent. (As a kid, didn't you used to think, 'Gee, if there was a huge disaster I wouldn't have to take that test'?')

a. Doesn't it work the other way around? Can't Obama be the one who doesn't want to come up with the goods -- action? (Kristol examines this well.)

b. McCain isn't a junior exec -- he's a U.S. senator! He's got a job to do!

c. Driving by a car wreck, McCain jumps out to help, Obama cruises in to the office for the meeting.

d. There's plenty of time for debates. Heck, as Bill Clinton pointed out, McCain wants more! Let Obama debate him more!

e. Let them debate on the Senate floor -- let's go back to the days of Daniel Webster! That is, if Obama has something to say!

f. What if an exec failed to deal with a crisis because he's looking for a new job?

McCain's move not a stunt

From Kaus files:

But he's not a hotshot exec; he's a U.S. senator.

What if a top executive couldn't attend to a crisis because he was seeking a new job?

I'm with Kristol: it's an action he should take, and makes Obama look like the lightweight he is.

Of course, McCain could blow it in Washington. But that's part of the job.

Wednesday, September 24, 2008

live blog, president's speech

Bush's speech:

What's really convincing: he looks scared.

Not too convincing on causes. 

Well, maybe it's not a bad background. At least some facts.  7:06.

Jesus, he's scaring the beejesus out of me.

A spirit of cooperation -- that means BOTH parties are terrified.

(my thought: You want to care for your own health. But a knee blows out. Maybe it heals on its own. But maybe it doesn't. And until it gets fixed, you can't work out to rehab it and prevent future injuries.)

7:12.  I don't feel he's speaking from the gut.  Not a bad summary. I guess I have to agree.

Sunday, September 14, 2008

Bryan = Palin?

To expand on earlier post:

It's becoming clearer that Sarah Palin's address to the Republican Convention can be compared, in its political impact, to William Jennings Bryan's "Cross of Gold" speech.

His speech to the 1896 Democratic Convention was a watershed in American politics. Bryan was just 36 when he called for silver to back currency, a way of helping debt-burdened farmers by, in effect, inflating the money supply. The delegates went into a frenzy, and he was nominated as the Democratic candidate, and again in 1900 and 1908.

He became the leader of a revolt against the rise of industrial power. Small-town America coalesced behind Bryan when he concluded, "You shall not crucify mankind upon a cross of gold."

In doing so, he changed his party. The previous Democratic president, Grover Cleveland, had followed the Jefferson-Jackson tradition of the Democratic Party in standing for the common man -- but by reducing the power of government. For instance, Cleveland famously vetoed a congressional move to aid drought-stricken Texas farmers.

But with Bryan, the Democratic Party stood for helpings average American by deploying the power of government on their behalf.

Palin's speech is similar in pitting Alaska against Washington, Wasilla against Washington. But it also pits Idaho State against Harvard. And it also pits the old Republican Party against one that is struggling to be born.

Bryan led ordinary people against the age's elite: the robber barons, bankers, Wall Street and the politicians in their pay. Palin is the figurehead, at least, of a popular tide of resentment against the reigning axis of power in Georgetown and on K Street in Washington, Wall Street and the Upper West Side in New York, and Marin County and Malibu in California.

Some might look askance at the Republican Party's representing average folk, but, as other writers have noted, the two parties have been trading places very quietly for years. Suddenly, the Republicans are on the verge of being the party of the people.

Evidence for this is the way that the pundits, professors and liberal politicians have foamed at the mouth since Palin's nomination.

The other key indication on the changing nature of the party is that Republicans have gotten excited about their candidate. Is it possible to even imagine Republicans of previous eras getting excited? But the GOP, once the party of the frozen chosen, suddenly is suddenly doing a lot more hooting and hollering.

Palin populism is no guarantee of victory, of course. Bryan never won the presidency, of course, and ended his career in the famous Scopes trial, which won him the derision of the rising class of intellectuals.

Nor is a populist strategy a guarantee of good policy. Bryan's silver policy would have caused inflation, which in the long run hurts ordinary people more than it does the bankers and financiers, who can game the system. Palin populism may not be any better than the elitist policies it decries.

Becoming more populist is hardly a guaranteed prospect for the Republicans. It would be a big change. Bryan asked which side Democrats would be on: "There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."

It's obvious which side the Republican Party has been on in recent years. It may be wondered if the party can switch gears.

Yet Republican populism appears just as the knowledge elite are under assault. The Internet has shaken the status of the mainstream media. The debacle on Wall Street shows that the money brokers are less brilliant than lucky. The frenzied reaction of the pundit-professoriate-politico axis hints that it feels the heat.

If the "Lipstick Speech" doesn't have the same ring as "Cross of Gold," historians may look back on it as a similar moment, when Palin Republicanism began its ascent.

Friday, September 12, 2008

Job for Palin

Here's one thing she could do in a McCain administration: drive liberals crazy.

Thursday, September 11, 2008

the real problem with energy

Democrats, including Rep. Matheson, have long targeted speculators.

But a new report says:

In its report, the Commodity Futures Trading Commission said this year's spike in crude futures appears to be due to "an appreciation of the value of existing investments caused by the rise in crude oil prices and not the result of more money flowing into commodity index trading."

In other words, real supply and demand, not paper speculation.


IBD tells of dangers of a too-young president:

All told, the Clinton administration had at least 10 chances to get bin Laden but repeatedly could not make the decision to act. Too many departments were involved, creating too much confusion, and no leader was strong enough to make the tough call. All were timid and overly concerned about repercussions if they failed.

Mad dog left/

Maybe the left is just to unstable right now to govern.

"Salon's Cintra Wilson manages to make a similar point with flawless grammar:
Sarah Palin is a bit comical, like one of those cutthroat Texas cheerleader stage moms. What her Down syndrome baby and pregnant teenage daughter unequivocally prove, however, is that her most beloved child is the antiabortion platform that ensures her own political ambitions with the conservative right."

Putting it in perspective

Mr. Obama responded by comparing Wasilla's 50 city workers with his campaign's 2,500 employees and dismissed its budget of about $12 million a year by saying "we have a budget of about three times that just for the month." He claimed his campaign "made clear" his "ability to manage large systems and to execute."

Of course, this ignores the fact that Mrs. Palin is now governor. She manages an $11 billion operating budget, a $1.7 billion capital expenditure budget, and nearly 29,000 full- and part-time state employees. In two years as governor, she's vetoed over $499 million from Alaska's capital budget -- more money than Mr. Obama is likely to spend on his entire campaign.

Monday, September 8, 2008

the election.


Anyone who predicts with any certainty what will happen in the next eight weeks ought to explain how well they forecast what would happen in the past eight days.

Who benefits?

People think conservatives are cruel and heartless.

Maybe they're right.

But look how often programs meant to benefit working class people end up enriching the elite, and socking all taxpayers:

In its most dramatic market intervention in years, the U.S. government seized two of the nation's largest financial companies, taking direct responsibility for firms that provide funding for around three-quarters of new home mortgages.


With that, the U.S. mortgage crisis entered a new and uncharted phase, potentially saddling American taxpayers with billions of dollars in losses from home loans made by the private sector.


At Fannie, Herb Allison, who formerly served as chairman of the investment company TIAA-CREF, succeeds Daniel Mudd. Freddie's chief executive, Richard Syron, was succeeded by David Moffett, who has been vice chairman and chief financial officer of U.S. Bancorp.

Potentially, Mr. Syron could walk away with an exit package totaling as much as $15 million, said David Schmidt, a senior consultant at James F. Reda & Associates LLC, a compensation consulting concern in New York. That includes a pension and deferred compensation, about $3.7 million in severance pay and a possible payment of $8.8 million to compensate for forfeiting recent equity grants. A Freddie spokesman said Mr. Syron had said he doesn't "anticipate receiving nearly that much."

Mr. Mudd's exit package, including stock he already owns, could total $14 million, Mr. Schmidt estimates.

Friday, September 5, 2008


Isn't there a contradiction between conservatism and "Country First"?

And is "maverick" reliable?

Thursday, September 4, 2008

A new "Cross of Gold"?

Could Sarah Palin's address to the Republican Convention be compared, in its political impact, to William Jennings Bryan's "Cross of Gold" speech?

It might -- but this might pose as many dangers as threats to the Republican Party.

This is to speak of political impact only. As Washington Post writer Robert Samuelson points out, neither party is addressing the real challenges: health care costs, entitlements and immigration.

But political impact counts too. Bryan changed his party, thus politics. Palin might have done the same thing. She certainly got Republicans excited, a feat somewhat like raising the dead. That counts for more than many thing.

Bryan was just 36 when he delivered his speech to the Democratic Convention in 1896, calling for currency to be backed by silver, rather than gold. It was a way of helping debt-burdened farmers — by, in effect, inflating the money supply. The delegates went into a frenzy, and he was nominated as the Democratic candidate.

More generally, he helped ignite a revolt by the older agricultural order — then still a huge slice of the population — in a revolt against the rise of industrial power. Farmers and those who felt they were being left behind coalesced behind Bryan and the resentments and fears he articulated when he concluded, "You shall not crucify mankind upon a cross of gold."

Palin's speech was a revolt against the media, the Washington elite, the intellectuals — against the knowledge elite that now dominates the economy just as the robber barons dominated the industrial economy that was swamping the agricultural sector in 1896.

Both text and subtext conveyed the message pitting the average American against the technocrats and CEOs who have really run the country for the past couple of decades. As many have written, we are in a knowledge-based economy. Palin, and those who respond to her, are challenging the reigning axis of power in Georgetown and on K Street in Washington, Wall Street and the Upper West Side in New York, and Marin County and Malibu in California.

Some might look askance at the Republican Party's representing average folk, but, as other writers have noted, the two parties have been trading places very quietly for years. Suddenly, the Republicans are on the verge of being the party of the people, which they have not generally been, at least since Abe Lincoln.

Moreover, this is not merely a conservative move. Take for instance an upset here in Utah's ultra-conservative Third Congressional District. Chris Cannon has represented the district for a dozen years, and garnered from conservative groups approval ratings in the mid to high 90s. But that wasn't enough. He seemed too distant, too focused on Washington. A political newcomer, Jason Chaffetz, running with no paid campaign staff, shellacked Cannon in the primary, and is the odds-on favorite to win in November.

So it is not so much a conservative shift as a populist one. It is not enough to be conservative, at least as the media and politicians usually measure it. The new Republican Party must connect with the people, not just dictating to them, but acting as a conduit for their dreams, and fears.

This is no guarantee of victory, of course. Bryan never won the presidency in three tries, and ended his career in the famous Scopes trial, which won him the derision of the rising class of intellectuals.

Nor is it a guarantee of good policy. Bryan's silver policy would have caused inflation, which in the long run hurts ordinary people more than it does the bankers and financiers, who can game the system. Palin populism may not be any better than the elitist policies it decries.

Yet neither should the potential of this new Republicanism be ignored. Palin mocked the media, for instance, and in fact the mass media's power probably crested years ago, and may be in decline. A fast-changing world may be tearing power away from New York and Washington, and moving it across the nation.

And it may be double-edged. Here's the core revelation: the Palin Republicans (and perhaps the Chaffetz ones) won't settle for just following orders. The Republican Party can't just use them; it's the other way around.

Take immigration. Say McCain tries the old switcheroo, and passes immigration "reform" this new base perceives as "amnesty." They won't just grumble and take it. They will explode.

And the Republican Party will join the Whigs and the Populists and the Know-Nothings and all the other political parties that are now just history.

Wednesday, September 3, 2008


Palin's on. 9:29

She's good, too. She's the best candidate McCain could have chosen, judging by Mitt, Huck, Rudy, et al.

Is this the day the Republican Party, and thus American politics, changes?

A speech is not only the words, but the situation and the delivery. Like a song or play.

It's coming together for her.

"we put the government of the state back on the side of the people."

My thought: that's the trope: not no government, not the government leading the people, but putting the government on the side of the people.

"that luxury jet was over the top" She put it on eBay!

Sarah Barracuda.

Got rid of the chef.

Those lips pressed together on the veto records.

9:51 -- Oil threat.

He's written two books but no laws. That's a key point: Obama is more a literary than political type.

She has fired up the Republicans, which I thought impossible.

She's got a rapier wit.

She's a hoopster too. Palin v. Obama, one on one.

"the American presidency isn't supposed to be a journey of personal discovery." Ouch!

10:03: Praise the Lord, she's raised the dead -- the Republican party.

Election won? Not by a long shot. But the game is on.

"If our state was going to build a bridge, we were going to build it ourselves."

More speakers

A smell of smoke in neighborhood. Really, ours


8:51 -- Crowd is chanting "zero, zero!"

Hawaii's governor says Palin will be a great vice president. Has anybody been a great vice president?

9:01 -- Giuliani on. "USA." McCain is a true American hero. Yes, but will he be the best president?

Lay off the story! They'll overuse it.

He's ripping Obama. Rudy is a little scary looking, but perhaps offensive.

When Dems gave up on Iraq, they gave up on America. Yes.

Does this signal a sea change in politics -- GOP as people's party?
The real battle is who the voters hate more: government or business.

We had a flight out of SLC on USAirways. Flight cancelled. They did fly us to Phoenix; we had to get up at 4:30 to catch the Phoenix-Pittsburgh flight.

The reason we flew USAirways was because it had a 1:30 flight so we didn't have to get up in the morning!

Then they make us pay for water! People need water so they don't get dehydrated in airliner cabins!

Of course, then we had to go through those idiotic security lines. We had to throw out four ounces of sunscreen. Three-point-four ounces was OK. But not four.

So who is more hated -- that's the question.

liveblogging -- Romney

Schools free of porn and drugs and promiscuity? Where oh where are they?

He's a clear, forceful speaker. Decent campaigner. Decent jab: Let's keep Al Gore's private jet on the ground.

I can see why McCain doesn't want to stand next to him on a podium.

But I can also see why McCain just plain can't stand him.

Romney has Barackitis -- he can't help basking in the glow of his own admiration.

8:26 Huckabee comes out.

He is affable; as they say, he seems sincere, and if you can fake that ....

He's very good. Sly wit, good line, "tackier than a costume change at a Madonna concert."

Respectful of Obama. Very good. Better than Romney's abrasiveness, here.

Quotes phony Lincoln line about what government can take.

"I didn't want to wait the rest of my life for the government to rescue me."

He's good. Too bad he's a sleazebag.

8:35 -- the McCain story. They have to beware of overusing it.

OK, the story about the teacher and the desks is corny, but it moved me. I'm a wuss, OK?
8:06 Romney on. He IS a little too slick. He's blasting the east coast elites.

Um, isn't he a venture-capital billionaire who was governor of Massachusetts?

And a little too handsome.

He's not a bad speaker. OK, he's a good one. But that question and answer schtick doesn't work.

Sarah -- and Jason?

Fascinating insights into Palin from the middle-left:

Former mayor? If you're going to skip over her job as governor and, before that, her job heading the commission that oversees production of the largest petroleum reserves in America, why not "former high school student"? Bah, what does it matter: She's just a small town mayor, just a hockey mom, just a beauty pageant queen. Palin has never shunned these belittling monikers, in part, I imagine, because the camouflage has served her so well. Soothed by the litany, her opponents tend to sleep too late, sneer too much, and forget who it is that hires them.


And, by the way, does her big win over an incumbent remind anyone of Jason Chaffetz?

GOP spin

Don't tell me the Republicans can't work the media.

First, they ditch Bush and Cheney because there's a storm near Louisiana.

There's always a storm this time of year there.

As for N'awlins, IT'S BELOW SEA LEVEL.

Then they get the soap opera going. It's kind of fun seeing Republicans get excited. About anything.

Tuesday, September 2, 2008


Bonanza or boondoggle?

For $100M, great. $700M? Utah has greeted it enthusiastically.

But, like the first iPhones, is it overpriced?

Nowhere man

The more I read about Obama, the more I think of the Beatles' Nowhere Man.

Or T.S. Eliot's the Hollow Men:

Shape without form, shade without colour,
Paralysed force, gesture without motion;

This of course is not surprising for a modern politician. Some have noted already Robert Redford in "The Candidate."

But the danger is that, like others, Obama has tried to fill the void with the energy and drama of radical politics.

Worse, he would inherit a left-wing Congress.