Category: Good Writing

Quote of the Day: Movement Conservatism

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From Thers of Whiskey Fire:

Movement conservatism started off as a racket. Movement conservatism has always been about exacerbating and then profiting from existing cultural, social, and economic resentments. There was never any fall from an original ideological Eden. The corruption was there from the start. Packer is quite right to emphasize how the political and popular success of movement conservatism owes everything to its legitimization of a politics of resentment that arose in the 1960s. Movement conservatism has nothing without Hatred of the Liberal, a point reinforced not least by the image with which Joyner chooses to adorn his post.

Actually, if you look at Bill Buckley’s pro segregation essays in the 1950s, the promulgation of hate for political power starts about a decade earlier.

It got its start from hating FDR, and folks like Buckley patted themselves on the back for being able to put a pseudo intellectual gloss on hate and greed.

A Point on the Bear Stearns Bailout

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In the Washington Independent, Jonathan Macey asks a very important question, one that I missed completely: If Bear Stearns was too big to allow it to fail, why was it not broken up under antitrust laws?

In fact, there are plenty of tools at the regulators’ disposal to deal with systemic risk and other catastrophes before a cataclysmic event occurs. In particular, the purpose of the antitrust laws is to promote and protect competition and make sure that no single firm grows so large that it threatens the entire economy.

I’m kind of embarrassed to have missed this.

I would also note that if regulators want to be proactive, the best solution for everyone right now is to break up the large investment banks so that they aren’t too big to fail.

Go read.

Should College be Necessary?

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Frequently, this question is phrased as, “Is college necessary?”, but to any observer, it is clear that the answer to that question is, “Yes”.

Increasingly, degrees, or more advanced degrees, are required for positions that in earlier times did not require this.

“Professor X”, who serves as an adjunct professor at a community college and a private liberal arts school, asks this question, and he concludes that the current educational requirements of our job market are unecessary.

An argument that the goal of universal College Education is not in the best interest of society.

The thesis is that much of education is a racket, with the modern American workplace as a co-conspirator. I agree.

The End of the US as World Colossus

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Kevin Phillips suggests that the United States may be facing a collapse of empire, as Holland did in the 1700s, and Britain did in the first half of the 1900s:

There is a considerable literature on these earlier illusions and declines. Reading it, one can argue that imperial Spain, maritime Holland and industrial Britain shared a half-dozen vulnerabilities as they peaked and declined: a sense of things no longer being on the right track, intolerant or missionary religion, military or imperial overreach, economic polarization, the rise of finance (displacing industry) and excessive debt. So too for today’s United States.

…

The most chilling parallel with the failures of the old powers is the United States’ unhealthy reliance on the financial sector as the engine of its growth. In the 18th century, the Dutch thought they could replace their declining industry and physical commerce with grand money-lending schemes to foreign nations and princes. But a series of crashes and bankruptcies in the 1760s and 1770s crippled Holland’s economy. In the early 1900s, one apprehensive minister argued that Britain could not thrive as a “hoarder of invested securities” because “banking is not the creator of our prosperity but the creation of it.” By the late 1940s, the debt loads of two world wars proved the point, and British global economic leadership became history.

He then makes the caveat that the predictions of doom for Great Britain started well before any collapse, with peaks in such concerns in the 1860s and 1890s, when the collapse of empire was primarily a post 1918 phenomenon.

It’s a valid point, but we are operating on internet time, and the degree of leverage is further, and capital is far more mobile.

He also notes that we have already experienced periods where the fall of America was predicted, in the early 1970s, and the early 1990s.

I’m a bear, as I’ve repeatedly noted, and I’ve noted that a number of factors, particularly the rise of the Euro as an alternative reserve currency, make make it much more likely that the US will lose its status as the financial capitol of the world.

Go read the whole article. It’s only about 1200 words.

What are the Leading Economic Indicators?

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Barry Ritholtz does a very good job of taking us through what is actually in the LEI, and he notes changes that might render it less accurate.

In terms of the recent numbers, which have been surprisingly upbeat, he notes that, “The 0.1% LEI reading was marginally positive primarily due to 3 factors: 1) increasing stock prices (.16); 2) Positive yield curve (.14); 3) An unfathomable 0.13% increase in building permits.”

I don’t place much stock in the stock market as a predictor, and the yield curve going positive is an artifact of the Fed dropping rates like a pole axed steer.

As to the increase in building permits, I gotta figure that there is just something wrong here.

In terms of the changes in the LEI, Ritholtz notes:

Recall that a few years ago, the LEI was reconfigured — mostly to include more financial factors, and less real world economic data. Inthat way, its a bit more like government data. The reconfigurations seem to be avoid showing negatives.

And I am inclined to agree.

Here is a question though: what happens when the statistics can no longer be fudged?

Go read it.

Roubini Likes the Mortgage Proposal

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If you’ve been following my posts on the various bits of legislation to help homeowners, you know that I’m in general agreement with Dean Baker, an economist I highly respect*, that most of the proposals are more about bailing out banks than homeowners, and that attempts to prop up home prices do little more than make housing less affordable.

However, I also highly respect Nouriel Roubini†, and he likes the Frank-Dodd Proposal mortgage relief.

Seeing as how I’m not an economist, banker, or realtor, I thought that my readers (both of them) should see his take.

First, he admits that this would be nationalization of bad mortgages to a large degree, but he sees the lenders benefiting, after a 15+% haircut, because they get a guarantee, homeowners get to stay in their house, their neighbors don’t deal with the effects of vacant lender owned housing, and it is far less expensive to the taxpayer than a full bailout.

I still think that real estate needs bankruptcy reform, and allowing mortgages on a primary residence to be adjusted by bankruptcy judges would be the best reform both in the long and the short term.

*Not only did he call the housing bubble, he actually sold his home on that expectation in 2004, and he’s now renting.
†Perhaps the strident of the bear economists. The frightening thing is that to the degree he has erred, it has been because he has been too optimistic.

Howard Dean for Vice President

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What the Other Matt (Yglesias) said about people who supported the war, or more accurately about the idea that supporting the war somehow creates some foreign policy “street cred”:

This reflects, I believe, an incredibly damaging mindset that’s been crippling the Democratic Party for years and the prospect of excising this mindset is the single most appealing thing about the prospect of Obama being the nominee. Clinton’s ‘street cred’ on national security consists, of course, of being massively wrong on the most important national security issue of her career. Paradoxically, a lot of folks find her massive wrongness on this hugely important issue reassuring because they and their friends were also wrong and they view having made the right call to be a suspicious quality. After all, the Iraq War may have led to thousands of U.S. deaths, tens of thousands of U.S. casualties, hundreds of thousands of Iraqi deaths, and millions of Iraqi refugees all at a cost of over $1 trillion and in ways that’s damaged the strategic position of the United States, but war opponents were all a bunch of hippies.

I say good riddance to that. I got the war wrong, and I think that gives me less ‘cred’ than I would have had had I gotten the war right and I think that, politically speaking, it makes sense to put people forward who aren’t tainted by the war. But most of all we need to ditch the mindset that says ‘cred’ on national security is composed of being hawkish even when that means being wrong.

To me, this means one thing: Howard Dean as Obama’s running mate.

Nouriel Roubini on the GDP Numbers

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As promised, some more commentary, Courtesy of Nouriel Roubini, on why the Q1 GDP numbers are a contraction:

  • The obvious one is that when inflation exceeds growth, fewer goods and services are bought or delivered, which is what has happened in the past 2 quarters.
  • Increasing inventories of unsold resulted in a +0.8% to the GDP numbers, which is not economic growth, though it can lead to increased growth.
    • My analysis of this tidbit is that this is actually increased hoarding of things people believe are inflating rapidly.
  • Residential spending was recorded to have dropped an astonishing 26.7%, and that this number does not include cancellations on new homes, so it’s even bigger.
  • Durable and non durable goods sales contracted.

Go read the whole thing.

Krugman Nails it Again

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As usual, Krugman gets to the heart of the matter

The question Democrats, both inside and outside the Obama campaign, should be asking themselves is this: now that the magic has dissipated, what is the campaign about? More generally, what are the Democrats for in this election?

That should be an easy question to answer. Democrats can justly portray themselves as the party of economic security, the party that created Social Security and Medicare and defended those programs against Republican attacks — and the party that can bring assured health coverage to all Americans.

They can also portray themselves as the party of prosperity: the contrast between the Clinton economy and the Bush economy is the best free advertisement that Democrats have had since Herbert Hoover.

But the message that Democrats are ready to continue and build on a grand tradition doesn’t mesh well with claims to be bringing a “new politics” and rhetoric that places blame for our current state equally on both parties.

And unless Democrats can get past this self-inflicted state of confusion, there’s a very good chance that they’ll snatch defeat from the jaws of victory this fall.

His basic point is a valid one the voters are not looking for reform. They are looking for the policies that make their lives better.

To the degree that a candidate makes reform the message to the exclusion of policy, there is an emptiness that can be exploited.

Level 3 Asset Bingo

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Here is an interesting commentary on the rather dubious nature of some of the assets on wall street.

Here’s Rule No. 1 from Wall Street’s public-relations playbook: If the company you run has big losses on hard-to-value assets, scream your head off about the accounting rules.

And what if the squishy values result in huge gains instead, as they have in the not-so-distant past? Rule No. 2: Stay mum about it for as long as the rules allow.

Basically he is noting that the various brokerages are booking a lot of profits on level 3 assets, but level three assets have no regular market to independently determine value, so we are back to smoke and mirror.

Go read, if you dare.

View From North of the Border

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Murray Dobbin has an interesting perspective on the “harmonization” and “integration” of Canada with the US, Americanize Me? No Thanks. He thinks that it’s ill advised, and his first example is quite illustrative:

Now we find out that despite recommendations from the Canadian Pediatric Society and the Canadian Cancer Society that Health Canada dramatically increase the recommended daily does of Vitamin D, the federal agency refuses to do so. Why? Because it is committed to “harmonizing” Canadian nutrition standards with those in the United States.

The interesting thing about Vitamin D is that there are two sources for this, diet, and sunlight, as the human body manufactures it when the skin is exposed to ultraviolet.*

Given the specifics of Canada, further north, less sunlight, the idea that they would need more dietary D is abundantly clear.

More generally, he finds America as a government completely dysfunctional†, America as a society paranoid morass generally bereft of morality†, and America as an economy as an “emerging economic basket case on pace to self destruct.”†

It’s a good read, particularly for Canadians who need to deal with Stephen Harper style boneheads.

*It’s why we have white people in the world. The layer in the skin that manufactures vitamin is beneath the pigment layer, so paler people make more Vitamin D for a given amount of sunlight, so in light starved regions, it favors the pale.
†I Agree

Great MoDo Takedown

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Maybe the best ever, but deconstructing the bitchy bitter and generally stupid woman that is Maureen Dowd is a very rich lode of material.

In any case, Kathy G., who describes herself as “A shrill feminist, bleeding heart liberal, hardcore policy wonk, political junkie, ardent cinephile, and lover of 19th century novels.” does a very good job in explaining what is wrong with MoDo. An excerpt:

But there’s another problem with the opening sentence of the Dowd column. “I’m not bitter.” Oh Maureen — who the hell do you think you’re kidding? The woman positively soaks in bitterness. Marinates in it. It oozes out of her pen and pours into just about every damn word she writes. Her bitterness has utterly corroded her soul. It’s turned her into a twisted freak whose chief pleasure in life seems lie in vicious, barking-mad attacks on the only people capable of ending our long national nightmare — the Democrats. Seriously, if there is any other single person in the media who’s been a more powerful enabler of Republican high crimes and misdemeanors than Modo, I don’t know who it is.

No go read.

And could someone explain to me how the hell she ever got a job as a columnist? Dowd writes about things like health care policy with all the depth of a girl who wants to be in the “in crowd” in high school talks about some lesser being’s choice in shoes at the prom.

I Miss Molly Ivins

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Her take-down of Camille Paglia should be read by every person in the world.

All 6+ billion.

Tracing Paglia’s intellectual ancestry is a telling exercise; she’s the lineal descendant of Ayn Rand, who in turn was a student of William Graham Sumner, one of the early American sociologists and an enormously successful popularzier of social Darwinism. Sumner was in turn a disciple of Herbert Spencer, that splendid nineteenth-century kook. Because Paglia reasserts ideas so ingrained in our thinking, she has become popular by reaffirming common prejudices.

Go read.

I miss Molly. She was the best thing to come out of Texas since….maybe ever, and both my kids were born there.

The Bobblespeak Translations

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OMFG!!!! This is funny.

It’s a translation of the polite circuitous language of political discourse into more plebeian language.

One sample:

60 Minutes with Doug Feith – April 6, 2008
60 Minutes
April 6, 2008
Guest: Doug Feith
*******************************************
Kroft: why did we invade iraq?

Feith: Saddam had a very scary mustache

Kroft: but he wasn’t involved in 9/11

Feith: but he could have been

Kroft: but he wasn’t

Feith: but he could have

Kroft: but he wasn’t

Feith: we had to attack someone

Kroft: so why Saddam?

Feith: he once attacked Iran

Kroft: you’re f$#@ing kidding right

….

The translation of Krugman may cause physical injury from excessive laughter. (link)