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

Kausfiles:

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.