For the better part of 25 years, I assiduously maintained my personal appearance in accordance with Navy Grooming Standards (well, mostly--now and then I got a little shaggy, and the beard growing contests surely violated the regs...). Since I retired from the Navy at a relatively young age, I figured, what the heck...maybe I should grow a little hair for the first time since I was in high school. Some of you have seen the result, and I think we can all agree, it was a dismal failure. Longish hair and high foreheads (read: receding hairline) just don't go together too well, unless you're teaching "The Sociology of Small Groups" at Brown University. And so yesterday, I got a haircut, returning myself to a more traditional coiffure. I will leave the flowing Andrew Jackson mane to my far less good-looking brother Tom, who seem to have fooled himself into thinking he can pull it off.
When the US delegation walked out of the last big world racism conference in Durban, South Africa in September 2001, this was seen then (and later) as another instance of the reckless Bush Administration alienating the US from the rest of the world--and further evidence of the powerful "Jewish Lobby" in the United States.
Now the UN is looking to hold another big shindig on race in Geneva, and guess what? The US is threatening not to come. Why? Well, just as it was in 2001, the forum is being hijacked by the Islamic world and its enablers and is being turned into yet another UN sanctioned forum for piling on Israel.
I applaud the Obama Administration for its stance, and I hope it follows through on its threat if this conference cannot be brought to its senses.
Nobody messes with Joe! No sir, not our Vice President--we heard it directly from the President's mouth during his State of the Union-like address last week. VP Biden is now going to lead a Task Force on the Middle Class, which had its inaugural meeting last week in Philly (take a look at the photo of Arlen Specter joyfully embracing Joe Biden--you'll see more of it in Specter's next primary battle, I can assure you of that).
The article contains an interesting discussion of whether the President's tax cuts on "the rich" will be sufficient to fund his ambitions (seems both Dems and Repubs agree the answer is...no), and there is an equally interesting discussion of just what makes someone "middle class"--do we measure it by income, net worth, or by numbers of people?
What does frost my pumpkin though, is a statement in the article by a John Russo of the Center for Working Class Studies at Youngstown State. "Working people have a healthy resentment, and it's not just envy. It's that this has been going on for the past few decades for them, and no one gave a [expletive] when this was about blue-collar workers," he said. "You talk to working people, and they say, 'We understand this. We've been through this. Now the others are starting to know the pain, too. But where were they when we needed them?' "
Who are these "working people", and why am I not considered a "working" person? Or am I? I pretty much feel like I work my ass off Monday through Friday, and then a good many Saturdays and Sundays too. I spend a ridiculous amount of time on airplanes and in work-related "events" during what most people would consider my "off time"--so why is it that only the guy punching a clock at the valve-manufacturing plant gets called a "working" person?
The election of a bi-racial man to the nation's highest elective office was a seminal moment in the history of this nation. That the previous two Secretaries of State were also African-American hinted at the progress we have made; Barack Obama's election put an unusually strong exclamation mark on it.
Interestingly enough, President Obama played the racial card both ways during the campaign--and in neither sense do I see anything negative in it. He worked hard to declare himself "post-racial" and to urge the nation to "move beyond" faded paradigms of race and politics. He openly appealed to white voters across the country--just as he appealed to black, brown and yellow. Conversely, his candidacy was consumed with race. With almost nothing to fall back upon in terms of experience, Barack Obama ran as an autobiography, the story of a man whose race(s) dominated his experience on this planet to an extraordinary degree. Additionally, his status as a bi-racial man in no small part aided his run for the Presidency. His thin resume in a white man yields, well....John Edwards.
Now--just weeks into his candidacy--his Attorney General (the first black AG) Eric Holder tells an audience that we are a "...nation of cowards..." when it comes to talking about race, and that the "conversation" on race must continue. News this morning is that the dialogue will continue and expand. The only conclusion I can reach in this is that there is a sense within the Obama Administration that there is insufficient attention paid to the matter of race in American, and it is their job to stir it up.
I disagree. Our nation has faced up to its scandalous past and has emerged better and stronger. Enslavement of fellow human beings and the deprivation of civil rights were great blights upon the honor and goodness of this nation, and that we struggled mightily to overcome them both is to our credit. Lingering racism has been reduced to the irreducible sum of that which individually exists within human hearts, rather than the government sponsored and sanctioned variety that dominated our history for so long. We are a different nation, and it is time to recognize that.
The problem now is that there are simply too many people whose lives and careers are invested heavily in the race industry, an industry whose life blood is division. Such investment leaves race merchants blind to the true progress that has been made and unwilling to consider the possibility that their usefulness has waned. Many people (myself included) believe that Barack Obama's election shows better than any other sign just how far the issue has come, and just how silly it is to keep talking about "how far we have to go". Rinku Sen--quoted in the article linked to here--sees it differntly. "I think that the line is, 'We've elected the black president, and now we're post-racial and everybody should just shut up.' It's very dismissive," Sen said. "We did elect the first black president, but people seem to forget that it was a hard campaign."
A hard campaign? You mean harder than Bush v. Dukakis (Willie Horton) or Bush v. Gore (recount, Supreme Court)? But then, what's so bad about a hard campaign? We are after all, electing the leader of the free world. By what measure was it hard? It could not possibly have been press coverage of the minority candidate--I think we can all agree he was well-treated at the very least. No, the bottom line is that Rinku Sen's life and prosperity depends on the notion that the "conversation" must continue and that "we have far to go". All evidence to the contrary.
Thairish posted a link to this article in The Atlantic on his Facebook page, and it piqued my interest almost immediately. It is long; grab a glass of wine or a cup o'joe when you sit down to read it, because you'll be there a while. But it is an interesting look at how economic crisis has changed our society in the past, and it postulates how the current crisis might change our society in the future. The point of emphasis for the author is how freely we move around the country, how mobile out labor is. It is a fascinating read.
It also contains another view on why our fixation on homeownership is not necessarily a good thing, certainly not a good thing for a country moving in the direction he suggests. Very clear thinking here.
I must read The Atlantic more, and stop holding it against them that Andrew Sullivan is on their payroll....
In this morning's paper, the Post covers the blithe world travels of a handful of Wall Street-types who've lost their jobs and decided to head out around the world and enjoy themselves. Yesterday (or the day before, can't remember), they ran a front page story about the particular dating challenges faced by out of work former masters of the universe, now forced to move back in with Mommy and scan the hip scene from their lonely table, unable to buy drinks or pay for dinners like they used to, rendering them feckless in a dating market driven by available male cash.
What do I see here? I think I see class envy at work. I think I see creeping class warfare (though I probably see it in more places than it really is). These stories are presented honestly and straightforward enough, but they are without context and they tell an incomplete story. So we, the great victimized unwashed mass, read about these poor souls, cast out of work by this financial crisis and forced to soak up their misery dressed like a chicken in Rio, or sipping their martini's alone in trendy U-Street bars--"good on them", we say from the comforts of our soon to be $400 tax cuts, our no-risk mortgages, and our limitless student loans....we don't get to see the folks who've lost their jobs in the financial industry--probably the majority--for whom this period of time is truly a wrenching financial disaster on a personal basis. Why not? Because that undercuts the narrative that is so convenient to this story. Good American public--bad Wall Street. Criminal mortgage industry--unwitting homeowner. Unethical investment banks--enraged Congress.
The Obama Administration has decided to try this fellow in the US criminal court system, signaling its inexorable move toward treating terrorism as a law and order problem rather than a war. Stand-by for another Zacharias Moussaoui-like kangaroo show-trial, full of defense motions to call senior administration officials to testify and problems with the disclosure of sensitive sources and methods of intelligence gathering. This is the shape of things to come, and I believe the President will come to find that he's gotten himself and the country into an even larger mess than it was in before--when these guys start to walk as a result of the protections afforded them by our civilian court system--not because they weren't guilty.
Karl Rove is a little upset with the President. Seems Karl has gotten to the point where I was a week and a half-ago--complaining about the President ascribing views to his political opponents....that they simply do not actually espouse.
The sub-question in the headline of the link--asking why? Well, because he can, and because he has a fawning media who does not call him or his spokesman on it.
Well ladies and gentlemen, no surprises there. Our President's new budget mirrors his priorities, and once again, he's being bold about going after them. He is basically daring Republicans to oppose him. He's saying, "yes, I will do what I said. I will tax the rich at a higher rate, I will create a carbon cap and trade (read---tax) market and I will move the country down the road to comprehensive health care (whatever that means).". That we are in the midst of a financial melt-down seems to matter little. The President is moving forward with his liberal agenda (you remember, the one that won the election), irrespective of how bad the economy is.
No one in this country has had his or her income taxes raised in 16 years. I assure you, this will be a shock to the system. I'll be surprised if he's able to raise the revenue he wants to fund his health care initiative from households making $250K or more...I think that figure will come down over time, exposing more and more people to higher and higher income taxes.
Cap and trade is a neat way to say "pass the costs on to consumers". Much of Mr. Obama's heralded "tax cuts for 95% of American workers" will get eaten up in higher costs for energy and other commodities.
This President is boldly looking to remake America in a breathtakingly rapid way. I honestly believe that is part of the strategy...get as much done as early as possible, so that the ripples of uncertainty are smoothed out by the time he's up for re-election again. By that time, we'll have a new normal, a slowly growing economy and a new relationship between the state and the governed. One more step along the Road to Serfdom.
North Korea is planning the launch of a "satellite", which many believe is simply a clever ruse for launching/testing a ballistic missile (which according to UN resolutions, they are not permitted).
ADM Tim Keating, our Pacific Commander, lets the media know that we're prepared to shoot it down, if it looks to be something other than a satellite. I find it hard to believe he would do such a thing without the express consent of the Secretary of Defense--who would have consulted with the National Security Adviser on the matter.
So--we are either prepared to shoot it down, or we would like the North Koreans to think that we are prepared to shoot it down. Either way, I think it is a good sign from the young Obama Administration--it's always easier to ease up on the reins than it is to tighten up on them. The North Koreans need to know that Obama's not a pushover, and I think this is the start of that campaign.
What I'd really like to see is the Japanese shoot it down as part of a cooperative missile defense architecture. That would send nice message to others in the Far East (China, NK) that the Japanese aren't to be trifled with.
By the way--the very fact that President Obama's Pacific Commander can confidently claim to be able to shoot this missile down is a credit to the vision of President Reagan and the persistence of President Bush. President Clinton didn't kill missile defense, but he sure did slow it. One hopes President Obama moves from his current lukewarm support.
I'll keep saying it until we win back the Congress....elections have consequences. The Republican controlled Congress was successful in getting a voucher pilot program started in the District, one that enabled economically disadvantaged kids to get up to $7500 a year to attend private school. House Democrats are moving to use procedural tactics to force the program to be re-authorized before the completion of its pilot program...surely in an effort to kill it.
Where are the President's kids going? Private school. Attorney General Holder? Private School. Ambassador to the UN Susan Rice? Private school. The list goes on and on of Democrats who bleed for the public school system, so long as their own children don't have to rely on it. Vouchers are a great way to offer poor kids a path out of failed schools. But not in a Democrat-controlled Congress...
Ok gang, it's time to move into the 21st century. Tonight's live blog will be on Twitter.com, rather than here on the blog. We'll use Twitter for a couple of reasons, but the best is that it adds comments to the top rather than to the bottom, which means you don't have to refresh and then scroll down to see what people have written.
Yes, yes, I know it means signing up for Twitter....but if we're really going to move this site forward, we've got to do it with a multi-media approach (so says Chili, my media adviser!)
Go to Twitter--sign up. Search for me....my name there is ConsWahoo. Click the function that allows you to "follow" me. I'll get a prompt that tells me you are "following" me. Then I will "follow" you. From there on, whenever I "Tweet", you'll get it, and whenever you "Tweet", I'll get it.
Chime in below with your views and complaints, but most importantly, chime in with your Twitter name and your enthusiasm for a great live-blog experience tonight!
UPDATE: IT IS CRITICAL THAT IF YOU WISH TO TWITTER TONIGHT, YOU WRITE IN HERE WITH YOUR TWITTER "HANDLE". THAT WAY, EVERYONE ELSE PLAYING HAS TO SUBSCRIBE TO YOUR FEED. IF YOU DON'T, AND YOU ONLY SUBSCRIBE TO ME (CONSWAHOO), YOU'LL ONLY GET YOURSELF AND ME--NOT EVERYONE ELSE. PLEASE ANSWER THIS POST WITH YOUR HANDLE IF YOU INTEND TO PLAY TONIGHT.
On the anniversary of the day that Marbury vs. Madison created the notion of "judicial review", I rise in support of the US Constitution and the Supreme Court's mandate to interpret it with respect to DC Voting Rights.
Article I, Section 8, US Constitution: "To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings"
Article I, Section 2, US Constitution: "The House of Representatives shall be composed of Members chosen every second Year by the People of the several States, and the Electors in each State shall have the Qualifications requisite for Electors of the most numerous Branch of the State Legislature."
Article I, Section 3, US Constitution: "The Senate of the United States shall be composed of two Senators from each State, (chosen by the Legislature thereof,) (The preceding words in parentheses superseded by 17th Amendment, section 1.) for six Years; and each Senator shall have one Vote."
Article V, US Constitution: "The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate."
Our framers created the Federal district, and specified in its creation its nature distinct, separate and apart from "the several States". Our framers also created our bi-cameral federal legislature, comprised of a House of Representatives and a Senate, both of which specified a link to a "State". Our framers in Article V gave to us a two methods of altering the document they created, something done 27 times in the past 220 years.
Granting the District of Columbia full voting rights in the House and or Senate is blatantly unconstitutional, and the pre-ordained success of such a move in Congress must be met with a strong judicial challenge. I support the District obtaining full voting rights in both chambers; our founders never conceived of the federal district as a full time residence for half a million people. But I support the Constitution with far more loyalty, and in their wisdom, they gave us the means and methods to account for their lack of omniscience. We call it "amending the Constitution" and that's how DC should obtain congressional voting rights, irrespective of what the Washington Post says.
In one corner, we have Paul "No Axe to Grind" Krugman, Nobel Laureate and Chief Economist for the firm of Mao, Marx, and Lenin.....and in the other we have Robert Samuelson, also an opinion columnist (because after all, that's what Krugman is) who takes his non-partisanship so seriously that he doesn't vote. Now Samuelson of course lacks the imprimatur of the Nobel family, but his writing on matters economic here in the US has no shortage of admirers on both sides of the aisle. Krugman pushed hard for the stimulus (actually, that's not entirely true--he thought it wasn't big enough! But he sure did rip Republicans for questioning it); Samuelson represents the view that most Republicans had--that the stimulus was necessary, but that this version had too little stimulative impact in the critical 2009-2010 timeframe.
Hey everyone--Google Analytics tells me we've had 7188 "unique" visitors to the site since opening back in June 2008. They hail from all fifty states and 92 different countries.
Hopefully, all of them, and all of you, are clicking those little ad boxes on the site, and patronizing my sponsors (at least those with whom you agree--I try to ferret out the Lib ones, but they come up faster than I can stop 'em).
Finally, I'm working on putting together the some of the best posts from the site in a book, divided by subject. I'm thinking of self-publishing, but if any of you have experience, please let me know!
We've had a few posts recently where folks have lustily put forth the name Paul Krugman as someone of whom we should all take heed. His recent Nobel Prize in Economics is most often cited as rationale for our fealty, but yesterday, Skonesam, a new name to our site, put forward the notion that his non-partisanship or, well, let me use Skonesam's words..."On the other, we have many renowned economists (both academic and practicing), including at least one Nobel Laureate (Krugman) who don't have any obvious axes to grind" is another reason he should be listened to.
Paul Krugman has no obvious axes to grind? Paul Krugman does not write an economics column for the New York Times, he writes a political commentary column. Even a cursory check of his back columns would lead an reasonable person to conclude that he is fervently anti-Republican, a die-hard social liberal, and that his attacks on the Bush Administration have been unrelenting. The thought that Krugman has no axe to grind is laughable...grinding axes has been his stock in trade! Krugman did not win a Nobel Prize for his work in the linkage between stimuli, taxes, and recovery. He won ostensibly for his work on globalization. Moreover, the Nobel Prize has become a politicized platform for anti-US rhetoric, and Krugman's visceral disgust at our last President was music to their ears.
But let's suspend reality for a second, and assume that Krugman's work and skill as an economist WAS indeed worth the highest prize in Economics. Does this in and of itself mean he should be listened to on economic matters? I would say, of course. He is a respected economist, and I'm quite sure he has fascinating and enlightening theories. These ideas however, do not immunize him from that which ultimately is all of our Achilles heel--the fact that we are human. One only need look to the failure of Long-Term Capital Management--with its TWO NOBEL LAUREATES in Economics...in addition to a legion of other academics...for evidence that EVEN Paul Krugman should be subject to criticism and questioning. Because Krugman says it does not make it so.
I'm stuck at Raleigh Durham airport, trying to get back to Baltimore (hon). I've been in Clayton, NC to celebrate my older (way older) brother's 50th birthday. The navigational computer in the Southwest Aircraft is on the fritz, and they are "swapping" out our aircraft for another (nice that there is one available). So I have a few moments to muse on things associated with airports and flying....
1. Is there anything quite as perfect as a warm Cinnabon Classic? My God, those things are heavenly. Just what you need to get you going for a morning flight....3000 calories and all the sugar a man could want. Yum.
2. Southwest Airlines...gets a big thumbs up from me. For coach class travel, the way they load the planes is the most efficient way I've seen. Not too thrilled with today's delay, but in general, I love this scrappy little (profitable) airline. they also seem to by genuinely happy that you've chosen their airline.
3. Cell phones. Unbelievable enablers of banal conversation (as anyone I call while I'm driving a long way already knows). A delayed plane offers a veritable cornucopia of opportunity to call lots of folks to share one's misfortune. I am particularly happy to be seated next to people in the airport with a long list of folks to inform.
4. What's with people solving their problems aloud? I see this all the time, often the purview of grown women in the company of children. What happens is that the woman encounters a problem, and then begins to audibly solve it, as if the children were suitable interlocutors with something worthwhile to add to the effort. I'm just sayin'.
Well, the swapped plane is here, so I better get going. I've got the Oliver Stone "W" DVD loaded up, and I've had a good time watching it so far. A little heavy on speculative pop psychology, but James Brolin's got the man down pat.
Forgot to add: 5. Rented a PRIUS this weekend (not my choice, it's what they gave me). I've seen the future, and it is real. Hybrid technology (battery and internal combustion) will only get better, and hopefully the cars will begin to be more attractive (simply an ugly car). It has this great little schematic that shows you whether the engine or the electic motor--or both--is running the show. The instant mileage figures are astounding....I was cruising down the highway at 70MPH getting 60 MPG......
I had a rather unfortunate experience with the blog yesterday that is having me consider a technical/policy change. During an exchange under the Phil Gramm post from yesterday, I entered into a spirited exchange with one of our frequent posters, during which I made the oft made comment here that he was not reading what I wrote....and that his responses were based on a misreading of my words.
I left that comment up for about 20 minutes. After a while, I thought to myself that my comments were not made in a manner that brought repute to this site and so I took the comments down, resigned to just doing what I often do with responders with whom I disagree--and that is, move on.
Apparently the poster with whom I was having this debate had the opportunity to read what I wrote before I took it down, either through good luck or because he subscribes to an RSS feed of the site. Perhaps not realizing that I had put my gun away and pulled my last post down, he responded with a healthy defense of his position and a counter-accusation that I had not read his words.
I then removed the whole shooting match from the site.
So here's the deal. As currently configured, I post something, and then if someone wants to comment, they can. Their comments are immediately posted to the board without any review on my part. I have the ability to go in and remove posts, but not until after they've already been posted. I have had to remove posts before for a number of reasons including profanity, extreme prejudice, personal attacks (on me and others) and rarely out of editorial prerogative--that is, because I have gotten so pissed off at the what I consider to be deliberate and continued misreading/nonreading of what I had written followed by defenses thereof.
I am considering enabling the technology here that allows me to first review a post and then determine whether it will be posted. In this way, I won't again have to have the public discussion of "you're not reading what I wrote", something that after eight months of writing this blog I have come to despise more than anything else about it.
What do you think (and no, I haven't enabled it yet)? There are clearly pros and cons to the idea. On the pro side, it makes me happier, makes me like blogging more, and keeps the site civil. On the con side, it could be viewed as limiting debate--especially debate that I find disagreeable (and do not read that as "with which I disagree"; that is an entirely different concept)--which by the way, it would absolutely be used to do. Additionally, if I am unable to get to a computer or email, the posted item would languish in cyber-purgatory until I posted or killed it.
I know that I could implement this change without debate and discussion. Realize also that this blog was never supposed to be an ongoing public version of an email chain or personal conversation between me and any one or two of my readers. My desire is to comment and invite comment, and if there's a good conversation to be had among the readers, it will develop. Every bit of time and energy I spend on defenses/conversations is time and energy I don't devote to moving on to other subjects.
So--should I make the change to front-end editorial control, or should I leave things the way they are and simply suck it up, and get better at just ignoring comments I find objectionable?
I realize that it may have gotten lost in the shuffle of the euphoria surrounding Free For All Friday and my shameless request for costume party advice, but I posted a full-throated advocacy of Government interference in the marketplace yesterday and I've gotten nary a peep out of this red-meat bunch of free-market conservatives. What gives? I realize the post is long, but I believe readers of this column possess the requisite attention spans to handle a 990 word post.
This was a great little story this week--when the CNBC guy launched a tirade on the floor of the Chicago Mercantile exchange, accusing the President of launching a mortgage bail-out program designed to reward bad behavior by having the 93% of those people who PAY their mortgages (oh, and also the rest of us who pay each month for shelter in an antiquated act known as "renting")subsidize the 7% who don't or won't.
Apparently, this was too much for the White House's spin-meister Robert Gibbs, who singled the reporter out by name (Rick Santelli) for scorn while waving a copy of the President's plan.
Respected Senator Richard Lugar has put out a Senate report calling for new approaches to relations with Cuba. I applaud this report, and only think that it falls short of where we should go, which is normalization of relations. That the report is coming from a respected Republican should be appealing to the Obama foreign policy team, as it fits nicely in where they'd like to take this troubled relationship.
Loud Cuban-Americans have hijacked this element of our foreign policy for too long. Electoral politics in both parties made this one too hot to touch, but immigration of Latinos from all over Central and South America, as well as a new generation of Cuban-American leaders, make the Florida electoral story much less dependent on this issue.
It is high time we moved forward with closing this ridiculous chapter in our history. Communism is a failure and we won the argument. It's time now to give Cuba a shot of our most effective national weapon--the dollar.
Love these early administration hagiographies of Obama appointees. In this version, we get to learn about a "low-profile" Deputy Chief of Staff to the President who works 14 hour days, has Rahm Emanuel's sense of focus, and presumably leaps tall buildings at a single bound. I doubt Anne Kornblut will have trouble getting him to answer her phone calls for a while.
Addressing yet another cloying group of supportive politicians, the President told a group of urban mayors that he was going to hold them accountable for the stimulus money not being wasted. Where was this talk to his own party in Congress as they created this monstrosity? Theater and drama, ladies and gentlemen. This money will now go out into the morass of waste and inefficiency that is government contracting, union and minority set-asides, and graft and corruption. Sleep well, America.
The Bush Administration wisdom in its approach to the war on Islamic radicalism received yet another boost yesterday, when the Justice Department told a federal court that the Obama Administration would continue to hold battlefield detainees in Afghanistan as without access to US Constitutional rights to challenge their detention. Will there be tumult in the streets in Europe? Will Moveon.org cry foul? Will the nattering nabobs of the mainstream media speak out as they did about extra-legal methods of prosecuting the war. Nope. Doesn't matter. It's all be done now by The One, and it all springs from Hope and Change. So it must be right.
Yes, ladies and gentlemen, it is Free For All Friday again...tee up your thoughts, concerns, questions, complaints or views for all to admire.
I have a bleg also (a bleg is a "beg" made on a "blog"). The Kitten and I have been invited to a Theme Party, the theme of which is "Come as Your Favorite Rock Star". We haven't decided to attend yet, but if past history is indicative of future performance, the Kitten will tell me we're going the day before. Do any of you have any simple to pull off ideas that I might implement, should I find myself attending this soiree?
No video in planning for a bit....I've got some pretty time consuming stuff at work that is taking up my evenings for probably a week more.
Most of you know I am a Milton Friedman-style free market fan. I look askance almost immediately in market interference by government, and I believe free market solutions are generally the best solutions to vexing economic problems. But not always.
I am particularly interested in the applicability of free-market principles to the energy market, specifically the oil market. Good story here from the morning paper that describes some of the less salutary effects of the drop in oil prices. I was particularly taken by the story of the oil sands extraction effort in Canada, a capital intensive project that only becomes cost effective with oil at $60-$90 a barrel ($39 yesterday). Impetus to move out smartly in this direction is declining, as it makes less and less "free market" sense to do so.
You can apply this same logic to a number of other initiatives aimed at lessening our dependence on a supply of oil from nations that are at best neutral to the interests of the US, and are at worst, antithetical. Building a nuclear power plant takes a ton of money and time--investments that to the free market--look far less attractive in the days of cheap oil (to which natural gas prices are linked) and coal. Once its built, it provides carbon neutral energy cheaply, but there's a lot to getting a plant built--and free market forces alone won't do it.
Battery technology and hybrid cars present another good example. Sales of hybrids were off the charts with gas at $4 a gallon...but are tanking now. Our auto manufacturers find themselves in a pickle right now in no small measure because they had to take such losses on small, fuel efficient cars in order to raise their CAFE mileage perfomance--because the cars have been so unpopular. What financed the loss? Sales of gas-guzzlers that people were snapping up. When even that stopped, the car makers were left in an untenable position.
What strikes me in all of this is that to some extent, the price of oil drives a lot of buying and investing behavior that could ultimately be ruinous to our economy, and this stems from the indisputable fact that the supply of oil becomes less every day--yet we have absolutely no real idea how much supply there really is! The whole pricing structure of oil is built around a sense of supply based on (educated) geologic guesses, trumped up claims of petro-thugs, and pure magic. Well, not really. It is based on the amount that is being extracted from the ground--which is a quite knowable figure, so knowable that this amount is manipulated by producers on a regular basis to impact their total revenue. World demand is the other component of price.
Our entire economy is dependent on oil, pure and simple. Yet we have no earthly idea how much there is--and rather than move aggressively to wean our economy from a commodity that brings such uncertainty (not to mention such a rogue's gallery of purveyors), we invest for future needs based on a "free market" in oil (this, clearly, is NOT a free market--it is a cartel, which practices monopolistic pricing) that prices this critical asset based on imperfect information (i.e--how much is out there).
Here's where government should step in. First, I'd like to cover two instances in which government action did in fact promote the growth (and "general welfare") of the country. The first is in the movement westward, especially in the construction of railroads. Yes, lots of men got rich on building railroads, but they did so with many examples of aid, support and comfort of the US government. The second was the creation of the interstate highway system in the 50's. While the free market supplied demand that helped spur these improvements, it was GOVERNMENT that supplied the wherewithal to move these initiatives forward...private industry and the free markets needed the government to pay down the risk of these investments so that we all might benefit.
I'm suggesting that this is a legitimate and necessary role for government to play today. Given my supposition that the price of oil comes from a Ouija board, government should be acting to provide loans, loan guarantees and direct investment in technologies and projects that will lessen our dependence on oil (while the price of oil does not--in a free market sense--justify the investment). In other words, government must pay down the risk injected into these decisions by our national reliance on an imperfectly priced supply of oil.
Why? Because it will literally take decades for the country to move in a meaningful way from its dependence on oil, and when the world's oil supply does get to the point where it is generally agreed that "peak oil" has been reached (defined by Wikipedia as that point in which "the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline". Once we get to this point, Katie bar the door on how oil will be priced. If you want to talk about a "competition for resources", think about what would mean--where China, the US, Europe, Russia, Brazil and India--and the whole rest of the world--begin to start stockpiling supplies and locking down long term contracts (whoops, it's already started).
I've complained about a great deal in the President's stimulus package, but I have assiduously avoided criticism of its initiatives on energy. If anything, there aren't enough. When I think of the truly necessary and critical jobs that the US government must do to "provide for the common defense and promote the general welfare", acting as an economic engine to move us from our reliance on oil is at or near the top of the list. I believe this investment would not only be stimulative, it would have lasting beneficial effects for this nation's future.
News yesterday, quietly announced by the four-star general who will benefit from it, of an impending troop buildup in Afghanistan. You remember Afghanistan, right? It is where "the good war" is happening, the one candidate Obama and much of the left hid behind while badgering the Bush Administration to cut and run from Iraq?
What gives the Administration the wiggle room they need to send these extra troops? Why, success in Iraq--you know, the place where Harry Reid said we'd lost, and where candidate Obama said a "surge" would make no difference.
Governing is different than campaigning, and the Commander-in-Chief role is what really distinguishes the Presidency from every other elective office in the land. On the whole, I support what the President is doing, I take a great deal of satisfaction from knowing how this move will be received on the left. "We didn't really MEAN all that stuff about Afghanistan! It was just a way of POLITICIZING the Bush Administration's war in Iraq!"
I know the Joint Chiefs are working hard on an Afghanistan/Pakistan strategy, as is the White House. Presumably, a solid plan can be put together to ensure that these troops are employed to satisfy a coherent strategy, something that received short shrift in the waning days of the Bush Administration.
A note to my Republican and Conservative friends. Remember--what makes us different from our Liberal friends is that all politics is (are?) not personal to us. We supported the war in Afghanistan when President Bush started it, we've supported it since the Fall of 2001. Now is NOT the time to begin to politicize this. The President has a responsibility to justify the increased troop levels with a plan to win, and we all await progress on that front.
Attorney General Eric Holder told a fawning audience of Justice Department employees yesterday that the US has been a "nation of cowards" for not discussing race openly. The irony of being chastened about race by a black man occupying the top chair at the Justice Department--appointed by "America's First African-American President" (who received a higher percentage of white votes than John Kerry or Al Gore)--somehow escapes many observers. Not me.
The University of the District of Columbia announced yesterday that it was essentially doubling its tuition. How, you ask, can a college make such an announcement in our great collective moment of crisis (horror, horror), when our economy is in the worst shape its been since the Great Depression, according to our Preacher-In-Chief? Just ask the UDC President, who, when asked about the impact of this decision, pointed to the wide availability of government aid available to students. Oh--and did you check the stimulus bill? Chock full o goodies for an American public who increasingly believes higher education is a human right.
Al Sharpton, racial warrior extraordinaire, has a new cause, and it is a recent NY Post cartoon which Sharpton views as dredging up racial stereotypes. Take a look at the cartoon. Both the cartoonist and the NY Post claim that it parodies the recent story of the flesh-eating, wine drinking, Xanax popping, night-time snuggling chimp. I gotta tell you, I don't see it the way the Post does...I guess I don't make a logical leap between the dead chimp and the stimulus. Sharpton might have something to bitch about here.
But then so do I. For eight years the press portrayed George Bush as a chimp in political cartoons. Not a PEEP our of Sharpton or anyone else on the left for that matter. It was all in fun don't you know.
So there you have it. The government of the United States of America is going to subsidize mortgages of people who are able to pay them, simply because the value of their home has dropped. Do you feel the drip of the heroin, slowly seeping into your veins? Another middle class entitlement, except this one only gets paid to some middle class people, not all. Supporters say it incentivized people not to walk away from their mortgages. Let them walk, I say. And let our society once again begin to embrace the concept of shame, something that has of late fallen disfavor. I hold out little hope.
There's been some talk here and elsewhere about the difference between the view of the stimulus from Republican Governors and Republican legislators in Washington. Looks like much ado about nothing (hat tip NR):
The New York Times's Fuzzy Math [Mark Hemingway]
I've been under the weather so I'm just now getting around to addressing this New York Times article, "Obama Gains Support From G.O.P. Governors," from earlier today:
WASHINGTON — President Obama must wish governors could vote in Congress: While just three of the 219 Republican lawmakers backed the $787 billion economic recovery plan that he is signing into law on Tuesday, that trifling total would have been several times greater if support among the 22 Republican state executives counted.
What? The article itself only names four governors that explicitly support the bill:
Across the country, from California's Arnold Schwarzenegger to Florida's Charlie Crist and New England's Jim Douglas in Vermont and M. Jodi Rell in Connecticut, Republican governors showed in the stimulus debate that they could be allies with Mr. Obama even as Congressional Republicans spurned him.
The New York Times doesn't mention that Nevada's GOP Governor Jim Gibbons also supports the bill, something I know because, oh yeah, I called all 22 GOP governors' offices and asked. The rest of the article seems to hint that that any governor who is angling to reclaim an appropriate slice of the state taxpayers' own money is de facto supportive of the Democratic agenda rather than simply acting in the interest of their consituents. As Ramesh has noted, that argument is specious at best.
So out of 219 Republicans in Congress, three voted for the stimulus. Throw in the 22 GOP governors, and eight out of 241 Republican politicians support the bill. If you want to make this about ratios and make a weak apples to oranges comparison, I suppose you could say that five out of 22 Republican governors is "several times greater" than three out of 219 in Congress. But if you're going to discuss "total" votes it seems misleading and wrong to say "several times greater." And that doesn't change the fact that there are scant few Republican office holders willing to support the stimulus package period, and the small minority of Governors that are supportive are all united by the fact that they are presiding over financial catastophes in their respective states.
The entire article is premised on the fact that there's a some sort of disparity between pragmatic governors and an ideological congress. The facts and figures simply don't bear that out.
I honestly haven't taken the time to read this story carefully enough to discern the details of President Obama's latest step on the Road to Serfdom. I only got as far as the story of Mr. Greg Chase, 53, of Fairfax, Va. At the height of the boom, Mr. Chase purchased a house (that's right--a house. That's what people buy. Not "a home". A home is where YOU LIVE, whether owned, rented, or given to you. Calling houses "homes" is a marketing trick) in Fairfax for $475K with $25K down. He is a Fairfax County government employee. He purchased the house with a 30 year fixed rate mortgage.
Mr. Chase's wife recently lost her job. Real-estate values have "tumbled" in his neighborhood, and now Chase "...owes more than the house is worth." Apparently the $2800 monthly mortgage payment (my calculation) is more than his Faifax Government employee salary can pay, so he's had to dip into his 401K to make up the difference.
A couple of things....I wish the article had stated what "kind" of employee Mr. Chase is, and what his approximate salary was. He says he "qualified" for the loan, but then again, he had a pulse--so there's your qualification. Exactly why is the value of the house an issue? He doesn't want to "lose" his house, so he clearly isn't interested in moving...oh--I see, he'd like to borrow against his equity in order to....pay his mortgage. Now there's a sound plan, house as ATM....
Mr. Chases's wife is briefly mentioned as having lost her job, which is truly unfortunate, especially when they qualified for the $450K mortgage on two salaries. She does not then come up again in the story. What kind of work is she looking for? Better yet, what kind of work is she not looking for? What sort of work is she passing up, even though they seem to be headed for financial shoals?
This story is yet again another example of what passes for news and reporting on this financial "crisis". No analysis, no real determination of the culpability of the "victim", just an emotional plea and the sense that government should "do" something about it.
Chrysler and GM execs gave their updated business plans to Congress yesterday and surprise, surprise, they want MORE money than they did two months ago. This is a bucket with a hole in the bottom. It is time to cut these two companies off and allow them to fail.
Whenever someone in the media makes the suggestion that they be allowed to fail, auto industry "experts" all line up to talk about how deep the supply chain is, and how if you let them fail, all these little guys are going to fail, and if they fail, they'll drag Ford down too.
Ok I say. Take money that might have been considered to help GM and Chrysler and target it at the supply chain, allowing them to restructure so support a smaller domestic auto manufacturing business (which does by the way, include foreign owned companies making cars here--just without UAW wage scales....)
We've had an interesting confluence of events lately, one bringing with it an opportunistic chance for those who would seek to pounce upon my distaste for hypocrisy and inconsistency to accuse me of the same. In the past ten days or so, we've had a Navy Cruiser grounded off the coast of Hawaii, and we've had the heads of the major Wall Street firms hauled before Congress and told that their pay (and those of their senior executives) was going to be drastically reduced by legislative fiat.
In the case of the former, I supported the Navy tradition and practice of relieving the Commanding Officer of that vessel; in the latter, I advocated a dream sequence in which the executives and their assistants told the Congress and the Obama Administration (and the class envious American people) to "fix it yourself". Seizing upon a perceived inconsistency in my logic, some have attempted to equate the situations. In the process, they have 1) significantly misinterpreted my support for single sanctions in the relief of commanding officers 2) significantly misinterpreted or plainly made up my logic with respect to Wall Street executives and 3) demonstrated a profoundly misplaced sense of class envy. There is no inconsistency in my thinking on this matter.
First and foremost, what makes the tradition and practice of removing Commanding Officers from their positions in the event of mishaps so special is its uniqueness in our society. What makes it unique is the unique concept of command at sea, something not found in many other bureaucratic structures in our society--certainly not in American business. Command--and the concomitant inexorable linkage in authority, accountability, and responsibility--is possible only because of the amount of responsibility vested in the Captain. In the case of the cruiser off the coast of Hawaii, we look to the Captain for responsibility because he ultimately decides the disposition of his ship. Had the battle group commander ordered him to proceed to that spot--had the Navy removed his paper charts and forced him to navigate with a specious electronic system only---had he grounded his ship in an attempt to save lives in battle--had he positioned his ship to obtain a more advantageous fire support situation---had his ship lost all mechanical control in the event of a catastrophic failure of engines and generators--each and every one of these events would logically be seen by most to mitigate the Captain's responsibility because others would have assumed portions of it. But it is not so in the Navy (at least not generally--there are exceptions). Again, the Captain decides on the disposition of his ship. If after the battle is over, or the crisis is past--he is shown to have disobeyed a lawful order, well then he is gone anyway.
We do not vest our CEO's with this kind of authority, and any attempt to affix a level of responsibility to any one of these CEO's or even the group as a whole denies many other worthy parties of their due in the blame. Let me quote from an earlier entry I made on the extent of shared responsibility in the current crisis:
"We find ourselves today in a crisis of our own making. Well-intentioned politicians on both sides of the aisle looked at the distribution of wealth in our country and realized that not only did home ownership represent a large portion of individual wealth, but that it made up a disproportionate amount of the difference in average family net worth between white America and the rest of the country. To address this difference, policymakers (again, on both sides of the aisle) pushed for programs that would make obtaining mortgages easier. Mortgage lenders were pressured to lower their standards, and they pressed back for government protection from the increased risk of default. Enter Fannie Mae and Freddie Mac, who insured many of these “sub-prime loans” and the financial world who further reduced the risk to lenders by “securitizing” the mortgages—eventually reaching a point in which there was no asset to back the debt. Heavy marketing of these new mortgage vehicles attracted speculators and middle class customers, many of whom improperly assessed their own risk tolerance as they took on more debt than their previously sufficient cash flows could handle. Government regulators looked the other way or improperly assessed risk, all in hopes of fueling the policy ends of increased home ownership and economic growth. Upon a predictable decline in housing prices, the whole house of cards (pun intended) fell in on itself helping to cause our current situation."
So we are to perp walk these guys off to jail while Barney Frank and Chris Dodd go on pompously berating the men who made their policy goals happen? Should we remove Barney Frank and Chris Dodd punitively from their jobs while George Bush walks free? Or should we just haul them all off to jail and be done with it? Whereas command is the singular responsibility of the Commanding Officer, these CEO's operated in a heavily regulated and overseen market in which their latitude and prerogative was greatly impacted by conditions and circumstances beyond their control. A Captain does not answer to shareholders or a board of directors. A Captain at sea is in a very real sense law unto himself. This is not the case with CEO's.
To my second point--has anyone heard me say or write that I don't think CEO's guilty of malfeasance, manipulation or any other criminal act should escape prosecution? I hope not, because then you would be guilty of hearing and seeing things. I want the FBI to investigate and prosecute to the fullest extent any and all executive who did not play by the rules. I want them to go to jail. I want them to be punished for acts that were plainly illegal and for which they were responsible. Additionally, has anyone heard me full-throatedly support bonuses for executives in failing firms? Has anyone heard me say that there is any logical and conceivable reason these executives should have been compensated as they were? No. I supported here in this blog, the levels of compensation they were making when their companies were returning shareholder value. I think the system is out of whack when it compensates people for diminished shareholder value.
Finally, this wasn't about folks being prosecuted...this was about a group of (largely) men with hundreds of years of experience in an increasingly complex financial world having their worth and value controlled by the Congress of the United States in an act of flat out class warfare. This was about the concept of creative destruction, in which recessions and contractions in a capitalist system are necessary to its continuing growth, and the kind of vision and experience that will be necessary to set the stage for our recovery from this current contraction. This was about a wake-up call to those who would look to our government as the engine for this recovery without thinking clearly about what our government does well and what it does poorly. This was about trying to bring perspective to the fact--not the opinion--that the current crisis had many fathers, and that looking to scapegoat the CEO's was childish, short-sighted, and potentially dangerous.
So, have I been inconsistent? Not from where I sit.
From an article by an NYU sociologist man-feminist:
"It's bad out there. That we know. But amid the economic wreckage, there is a bright spot for women. The Lilly Ledbetter Fair Pay Act -- enabling women and other workers to sue for wage discrimination -- was the first piece of legislation President Obama signed. And a parsing of the grim economic statistics shows that recent layoffs have disproportionately hit male-dominated industries. We have reached a milestone of sorts: Women may be poised to outnumber men in the labor force."
Let's take a deeper look at this article, shall we? Lots of hoopla about the Lilly Ledbetter Fair Pay Act, and how it had righted some kind of cosmic wrong perpetrated against women in the workforce. This is a fiction, and it needs to be addressed. Lilly Ledbetter sued under a provision of the Equal Employment Opportunity Act in which there was a statute of limitation of sorts on how long after the acts occurred in which one can sue. Where did that limit come from? Well, it came from the Congress, who wrote the law. Ms. Ledbetter could have sued under a different provision of the EEOA and not had the ticking clock provision. But she and her incompetent lawyers insisted on suing under the article inappropriate to her case. She lost in virtually every venue including the US Supreme Court. The Supreme Court did in fact speak to some of the negative impact to business should they overturn the law, but the bulk of their finding was that 1) congress wrote the law 2) congress thought about what they wrote before they passed it and 3) their job is to interpret the law, not write it (novel view, huh). They basically told Congress to change their law...this Congress did, and now we have the Lilly Ledbetter Act that all the world thinks is so important and wonderful.
Let's move on now to the rest of the article. Just what is it exactly this guy is trying to bring our attention to? Oh yeah---a widening gap in income between those at the top and those at the bottom. Right. But why again, is that meaningful or important? What does ills does this bring along with it? If the lot of those at the bottom is improving--and it is--then what difference does it make how those at the top are doing? The line that "the increasing pressures put on the marketplace by the rich -- bidding up the price of housing and education, for example -- means that most middle-class couples probably need two incomes also, even just to keep a roof over their heads" is classic class warfare. Middle income families don't need two incomes to put a roof over their heads...they need two incomes to put a roof over their heads with six burner stoves, hardwood floors and 2800 square feet, not to mention a garage to park their SUV with "Hope and Change" stickers on it. Oh and don't forget the Wii/Play station/ or whatever video game it is that was purchased to keep their precious children in the house, rather than outside running around and burning off their growing fat.
Rich people aren't bidding up the price of education...the price of education is being bid up by the ubiquitous sense that everyone has to go to college, and that it is the government's job to provide the money to do so. Increases in availability of college money causes college tuition to rise. Pure and simple.
"These are tall tasks, but if we don't do something to cushion the effects of the social sorting taking place across households, families will continue to face more and more stress." Stress? What stress? Poor people in this country used to be HUNGRY! Where is hunger as an issue? What percentage of the people in this country living below the poverty line do you suppose have a 1) refrigerator 2) multiple color TV's 3) a car or two 4) air conditioning 5) indoor plumbing 6) cable tv? The answers would astound you. The entrance of women large-scale into the workforce has raised our nation's standard of living, and this fellow wants us to address the stress? C'mon. I suppose this is what passes for social science at NYU these days.
Anyone who has read this blog long enough knows I'm an Ayn Rand fan--not the creepy college kid kind, but rather someone who came upon her writing later, sees the value in many of her ideas, and enjoys the intellect evident in her writing.
I'm looking for an Ayn Rand moment now, an "Atlas Shrugged" moment, to be exact. We're in the midst of a horrific financial crisis, much of which must be fairly laid at the feet of Wall Street execs, some of whom have taken monstrous bonuses and salaries home even as their businesses sank. The President and now Congress each sought to "limit" the compensation paid to executives in the businesses that took the public's money. Sounds great, doesn't it? Let's stick it to the fatcats. Problem is, it is these fatcats, their knowledge of the industry, their experience, their vision--upon whom we all are going to have to rely if those businesses are ever to pay back the public's money.
I'd like to see a press conference...Tuesday...in which a group of known, experienced executives from the companies involved...look the cameras in the eye and say, "Fix it yourselves" and walk away to their Bar Harbor, Jackson Hole, and Upper East Side haunts. You want to see the stock market crash? Push them that far.
This class warfare, this creeping socialistic approach to market economies...can and will have real costs. If these guys take their jacks and their ball and go home, we are royally screwed.
What do I suggest? I say, let's use the market to incentivize these guys to pay back the government loans, quickly. Let's encourage those companies to tie executive pay to performance AND the speed in which the public's money is returned to them. Let's not incentivize them to go off and take a two year hiatus, only to return to the industry when the heat is off and they can be paid what they're worth again.
Given their margins in both chambers of Congress and the control of the White House, the passage of a stimulus bill largely reflecting Democratic priorities was never in doubt. Late last night with the help of three Republican Senators, the nearly $800B stimulus was passed. Now it is on to the President for signature.
Not a single Republican House member supported the bill, and only three Senators did. The job Republican legislators did cannot be lauded enough. By relentlessly pointing out needless, unstimulative spending, Republicans generated enough public outcry to make the Democrats go back to the drawing board, cut out some of the spending, and lower the overall cost of the package.
It is a ridiculous example of overreach and excess. But without the stand of Republicans in Congress, it would have been worse.
You remember Henrietta Hughes, don't you? The woman who tearfully begged for Barack Obama's assistance in Florida because she is homeless, out of work and living in her car? Well, it seems someone has stepped forward and given her a place to live, which I appreciate.
What don't I appreciate? I don't appreciate the our nation's mainstream media has done NOTHING to look into Henrietta Hughes' story--you know, the way they did Joe the Plumber's. Remember Joe? What did we find out about him in like, a milisecond, after he confronted Saint Barack? We found out he wasn't a real plumber, we found out he owed back taxes, etc., etc.
Where is the digging into Henrietta Hughes' (and son, with whom she lives in her car/now in a new home). Where has she been? Where has she worked? How did she find her way into the situation she is in now? What choices has she made? How much help has she already gotten? How much help has she turned down?
Will we ever get this information? Probably not. Doesn't fit the narrative.
We find ourselves today in a crisis of our own making. Well-intentioned politicians on both sides of the aisle looked at the distribution of wealth in our country and realized that not only did home ownership represent a large portion of individual wealth, but that it made up a disproportionate amount of the difference in average family net worth between white America and the rest of the country. To address this difference, policymakers (again, on both sides of the aisle) pushed for programs that would make obtaining mortgages easier. Mortgage lenders were pressured to lower their standards, and they pressed back for government protection from the increased risk of default. Enter Fannie Mae and Freddie Mac, who insured many of these “sub-prime loans” and the financial world who further reduced the risk to lenders by “securitizing” the mortgages—eventually reaching a point in which there was no asset to back the debt. Heavy marketing of these new mortgage vehicles attracted speculators and middle class customers, many of whom improperly assessed their own risk tolerance as they took on more debt than their previously sufficient cash flows could handle. Government regulators looked the other way or improperly assessed risk, all in hopes of fueling the policy ends of increased home ownership and economic growth. Upon a predictable decline in housing prices, the whole house of cards (pun intended) fell in on itself helping to cause our current situation.
Here are a few truths about American wealth. Americans have one of the lowest savings rates in the industrialized world. Compared to other individual investment vehicles, a disproportionate percentage of America’s net worth is bound up in houses, causing many to view their house (and future payoff from its sale) as their retirement plan. Our tax code heavily favors those who carry mortgages over those who rent. This tax advantage aids and enables the disproportionate emphasis and importance Americans place on home ownership, to the detriment of more balanced and diversified investment portfolios. Although real estate has proven in the past to be a relatively safe investment, it is not risk free and housing prices can decline as well as increase.
As policymakers flail about seeking ways to alleviate current economic woe by further reducing risk to this already ennobled class of investors (home owners), little is being done to address the underlying cause; that our entire system fosters and encourages an unhealthy concentration of individual wealth in one class of investment. The over the top efforts at mitigating risk to homeowners have gotten so bad that I have begun to hear reports of people looking to elected officials for relief from the horrific burden of being “upside down” on their mortgage—that is, owing more than the house is worth. While this is unfortunate from an investment standpoint, it is meaningless from a shelter standpoint. As long as someone is not looking to place their house on the market, its day to day value is somewhat less important than its value in taming the elements.
What is to be done? We should eliminate the home mortgage interest deduction, and instead, redistribute the aggregate savings to a decrease in the capital gains and simple interest taxes(such as that gained in savings accounts and CD’s). Houses would still be sought after as an attractive part of any individual investment portfolio, but not more so than 401K’s, stocks, mutual funds, bonds, T-bills, gold, art or any other investment vehicle.
What would be the impact of this change? There are several. First, it would create a market-based incentive for the investing public to limit its own risk through more diversified portfolios. Second, it would encourage savings. Third, it would more quickly create a “level playing field” between whites and minorities with respect to wealth creation than wrong-headed policies designed to increase home-ownership.
What would be the downside? Entrenched interests (construction, labor, finance, legal) would howl. We would hear “this is the end of the American dream of home ownership” and “there will never be a new home built in this country” and many other Cassandra-like statements of this nature. I’m not convinced. People will still buy houses—new and previously owned—based on the new risk calculation of whether or not it will increase in price, and not on the certainty that it will reduce income tax liability. Builders will still build dwellings—whether they are then rented or mortgaged should not ultimately make a difference to them. The financial industry, while perhaps dealing with the fall-out from a reduced mortgage market, would have access to whole new sources of capital for their other investment vehicles flowing from individuals who previously would have invested in their house looking for new places for their money to go.
In the end, this plan would create additional stability in our financial system, increase the national savings rate and lessen our national risk to financial meltdown. Let me know what you think.
Well, the Conference on the stimulus bill has begun. Conference Committees are interesting animals....leadership in both chambers appoint a limited number of members, and their job is to reconcile the differences between bills passed by each of the chambers. Sometimes they compromise, sometimes they accept in whole one or the other versions of the bill, sometimes they fail, and sometimes they come up with entirely new bills.
While both bills are stinkers, the one passed by the Senate stinks less. It has more in immediately stimulative tax incentives and less in porky spending designed to support Democratic policy initiatives. The stuff the Senate cut out in order to obtain the votes of Snowe, Collins and Specter (necessary to get them past the 60 votes needed for cloture), is VERY important to the House, and House conferees will fight hard to get it back in the final bill.
There is still hope....if House conferees stick to their guns and the final bill out of conference is even bigger than either of the two versions going in, Snowe, Collins and Specter will be tested...all have said they would look askance at a final bill that looked bigger than the one they passed. If two of the three turned against the bill, then Senate Democrats could not muster the 60 votes needed for cloture, and the bill would not come up for a vote. Then its back to the drawing board.
Just finished firing off emails to the Three Stooges. Nice, respectful, but to the point. I informed them that I intend to support financially any primary challenger who might seek their seat should they decide to run again. If you have the inclination, perhaps you might do the same.
Toward the end of last night's news conference, new contributor James put forward this nicely concocted summation of the emerging Obama narrative on the stimulus:
"Well, clearly using the bully pulpit to shape the national narrative. I think expecting him not to point out that he inherited this mess is naive. Four threads in the narrative he is trying to create here: 1) I inherited this mess, 2) the Republicans (and by extension deregulation/trickle-down fiscal policy) gave it to me, and 3) I will do this with or without you, and 4) we must move now, even if the bill is not perfect."
I have a few things to say about this.
1) I'm not expecting him not to point out that he inherited the mess...I am pointing out that it is wearing thin, and the American public will eventually stop listening to it. No one held a gun to his head to run for President, I do believe it is still a voluntary position.
2) His point about not taking any guff about deficits and debt from the folks who presided over a doubling of national debt is interesting rhetoric, but it is put forward as a way of justifying...you guessed it...running up the debt! Sort of a "they got theirs now I want mines" approach to the issue.
3) He will do this with or without them, and he has had that power from the beginning. The problem is that the rhetoric and the reality don't match. Where is the transformational figure? Where is the hope and change? Where is The One? I'll tell you where he is...he was swept up with all the trash left in Lincoln Park in Chicago the morning after the election. Democrats are unleashing eight years of pent up payback on the Republicans, and there should be no starry-eyed remorse on the part of Republicans about it. While there was an interesting suggestion that he would work with Republicans on this bill, it was swamped under the weight of his obligations to the people who elected him. Republicans can and must continue to do what the party out of power is supposed to do...put forward alternatives and resist the over-reaching of the party in power. But any sense that they can work with this President and this Congress ought to be very judiciously voiced. There simply is no incentive to work with Republicans on this.
4) Most disingenuous of all from the President is the continuing line of debate that goes something like "this bill might not be perfect, but it is much better than doing nothing--like some in the Republican party are suggesting". Okay, Mr. President. Who are these Republicans? How prominent are they? Who is listening to them? I haven't heard a single Republican of note say "do nothing". Not McConnell, not Boehner, not Cantor, not Kyl...not a single member of Republican leadership. They ALL agree with the basic framework of the stimulus bill--tax relief and targeted, stimulative investment. This should have been easy....and it could have been. If the Democrats had decided not to lard the bill with their policy desires. Now that they have, the bill is not clean, and many Americans are beginning to wonder aloud what they are buying into.
The Republicans are playing this one perfectly, and I look forward in the coming days to watching the theater of the absurd play out. The Senate will pass its stimulus vote today with the votes of the Three Stooges in their pockets (Snow, Collins, Specter). They'll march across town to sit down with Speaker Pelosi and her crew, and all of a sudden, the President's admonitions to act fast, act now, will fall by the wayside as the House Dems fight to re-insert their favorite little policy provisions. They'll come to an agreement on a bill that is $50B HIGHER than the higher of the two versions passed by the individual chambers, and Collins, Snow and Specter will get one final chance to prove that they really are Republicans.
This ladies and gentlemen, is I hope, the last time I mention this frustrating story. I have now seen the interviews with this vacuous, Botox-enhanced woman, this icon of self, this windy monument to fecundity...and I cannot tolerate her any longer. News that she is already receiving public assistance for the first six children simply ices the cake. The system has gone horribly wrong here, and we as a society should continue to express our collective disapproval of this woman's conduct, her doctor's ethics, and the braying support of those who see her actions as noble and selfless.
Who knew? I mean, I thought Dick Cheney was gone, herded off to some Wyoming ranch to plot his diabolical and illegal assertions of Presidential and state power...but no, he's apparently still at work in the Obama Administration. After all, that's the ONLY logical conclusion that could be reached in this case. I mean, we're talking about RENDITION people....clearly this isn't the kind of thing The One supports, right? I mean, it is so, you know, Bush-like...using the whole "state secrets" ruse and all. I mean, gosh, what happened to Hope and Change?
Again, governing and campaigning are two different things. The Obama team continues to find that the answers Bush and his people reached on many questions...while not popular and not easy...were the right ones. Will we ever hear this from the Obama people? Not a chance.
This is an absolutely amazing interview. Please watch it. Please share it with other friends. We've got to keep remembering that while free markets have had a rough go lately, they are still the best hope we have.
Many of you have seen reports in the news of the grounding of the USS PORT ROYAL (CG 73) off the coast of Hawaii. Some of you have emailed me privately about the event for my thoughts, and so I'll share some. For those of you new to the site, I was at one time a naval officer, and I commanded a destroyer from 2004-2006. I have no particular insight into the nature of this grounding, I do not know anyone serving on the ship, and I know only what I've read in the open press.
A couple of things: 1) This is a horrible thing, and there can never and will never be a satisfying explanation for it. At the end of the day, an error chain laden with human shortcomings, indecision, and poor decisions... mixed perhaps with some equipment malfunction, will be blamed.
2) The Captain is at fault, period, end of story. In a world in which corporate CEO's earn fabulous bonuses presiding over wreckages of public corporations, the Navy remains a place where blame is affixed and responsibility taken. In most cases, the Navy does the right thing and relieves the Captain of command. I would be shocked if it does not here. We can wring our hands and tut-tut about the fallibility of human beings, the unfairness of the sanction, a myriad of contributing factors that our fairness and justice seeking society would bring forth to mitigate the Captain's culpability, but they do not wash. Command of a ship is special and peculiar thing, and Joseph Conrad put it best in my mind:
"COMMAND AT SEA THE PRESTIGE, PRIVILEGE AND BURDEN OF COMMAND""
By Joseph Conrad Only a seaman realizes to what extent an entire ship reflects the personality and ability of one individual, her Commanding Officer. To a landsman, this is not understandable, and sometimes it is difficult for us to comprehend - but it is so.
A ship at sea is a distant world in herself and in consideration of the protracted and distant operations of the fleet units, the Navy must place a great power, responsibility, and trust in the hands of those leaders chosen for command.
In each ship there is one man who, in the hour of emergency of peril at sea, can turn to no other man. There is one who, alone, is ultimately responsible for the safe navigation, engineering performance, accurate gunfire and morale of his ship. He is the Commanding Officer. He is the ship.
This is the most difficult and demanding assignment in the Navy. There is not an instant during his tour as Commanding Officer that he can escape the grasp of command responsibility. His privileges in view of his obligations are almost ludicrously small; nevertheless, command is the spur which has given the Navy its great leaders.
It is a duty which most richly deserves the highest time honored title of the seafaring world… "CAPTAIN"
3) Any suggestion that the single sanction (run aground and you're gone) creates timidity and fear among Navy commanding officers did not serve alongside the great men and women I did in command. Does it sharpen our focus, does it drive you to relentlessly drive your crew for excellence? Yep. But it does not create fear.
4) Anyone who takes command of a ship does so knowing they are one bad navigation fix away from the end of a career. It is not a surprise, it is not viewed as unfair. It is one of the very few downsides to the privilege of commanding a warship for the people of the United States, and naval officers line up for the prospect taking on that responsibility.
5) The ship had just come out of several months in the shipyard getting work done. It was on its sea trials, and it was the first day underway. This would have been a particularly strenuous day, as the skills associated with seafaring do atrophy, and the crew would more than likely have had to work hard with shorebased trainers and imaginative scenario training in order to keep their skills.
6) There is at least one report that suggests the ship had come to where it was in order to conduct small boat operations in order to move ship riders ashore. This is a fairly routine operation for Navy ships (especially ships who are conducting sea trials with numerous shipyard and shore-based personnel onboard), but any time you move into piloting waters, increased vigilance is required.
7) The question that will ultimately be asked is why were they where they shouldn't have been? What breakdowns were there? How often were they taking fixes? Were the fixes correct? Was the Combat Information Center taking its own fixes and comparing them with the bridge? Had the navigation team received any refresher training while the ship was inport? Was the bridge relying on electronic means and ignoring manual plots? Was the bridge ignoring electronic means of navigation and relying on manual (human) plots? Was there too much hullabaloo on the bridge, given that the Battle Group Commander (Admiral) was onboard, and the ship was moving into position to launch boats? Did the Captain (and XO and Navigator and Officer of the Deck and Junior Officer of the Deck) lose focus on what was REALLY important--the navigational position of the ship--and begin to think about the upcoming boat operation (in which perhaps, he would be transporting his boss ashore)? The Navy is superb at the investigations that follow accidents like this, and I assure you, wardrooms full of officers across the fleet will deconstruct this accident and talk about how to keep it from happening to them.
I close with something I've printed here before, after another Navy accident where my opinion was solicited. It is the text of an editorial that appeared in the Wall Street Journal in 1952 after the collision of the USS HOBSON and the USS WASP in which 176 men died (including the CO of the HOBSON). I find it as relevant today as it was then; perhaps more:
"One night past some 30,000 tons of ships went hurtling at each other through the darkness. When they had met, 2,000 tons of ship and 176 men lay at the bottom of the sea in a far off place."
"Now comes the cruel business of accountability. Those who were there, those who are left from those who were there, must answer how it happened and whose was the error that made it happen."
"It is a cruel business because it was no wish to destruction that killed this ship and its 176 men; the accountability lies with good men who erred in judgment under stress so great that it is almost its own excuse. Cruel, because no matter how deep the probe, it cannot change the dead, because it cannot probe deeper than remorse."
"And it is even more cruel still because all around us in other places we see the plea accepted that what is done is done beyond discussion, and that for good men in their human errors there should be afterwards no accountability."
"Everywhere else we are told how inhuman it is to submit men to the ordeal of answering for themselves; to haul them before committees and badger them with questions as to where they were and what they were doing while the ship of state careened from one course to another."
"This probing into the sea seems more merciless because everywhere else we have abandoned accountability. What is done is done and why torture men with asking them afterwards, why?........"
"We are told men should no longer be held accountable for what they do as well as for what they intend. To err is not only human, it absolves responsibility."
"Everywhere else, that is, except on the sea. On the sea there is a tradition older even than the traditions of the country itself and wiser in its age than this new custom. It is the tradition that with responsibility goes authority and with them both goes accountability."
"This accountability is not for the intentions but for the deed. The captain of a ship, like the captain of a state, is given honor and privileges and trust beyond other men. But let him set the wrong course, let him touch ground, let him bring disaster to his ship or to his men, and he must answer for what he has done. He cannot escape...."
"It is cruel, this accountability of good and well-intentioned men. But the choice is that or an end of responsibility and finally as the cruel scene has taught, an end to the confidence and trust in the men who lead, for men will not long trust leaders who feel themselves beyond accountability for what they do."
"And when men lose confidence and trust in those who lead, order disintegrates into chaos and purposeful ships into uncontrollable derelicts."
Interesting Tom Ricks story this morning vocally bringing forth the name of General Ray Odierno as the "real" author of the surge strategy, and cataloging his behind the scenes efforts to bring it forward.
A couple of things are worth mentioning. As a one-star, Ray Odierno was part of the leadership of the J-8 Directorate of the Joint Staff, where I worked. He's a huge, imposing fellow with a bald head, sort of reminiscent of a Bond villain if truth be told. I briefed him a number of times on things in the missile defense world and he always struck me as thoughtful and interested, but not necessarily a blinding intellect like the J8 at the time, Lieutenant General Cartwright (who is now the Vice Chairmen of the Joint Chiefs of Staff).
Odierno went on the command the 4th Infantry Division, the one whose entree into Northern Iraq for the Invasion of 2003 was negated by the Turkish government's decision not to allow their overland transport through Turkey.
Odierno joined the fight late, by which time another Division Commander, Major General Petreus with the 101st, had begun to make a name for himself by working with the locals to pacify the growing insurgency. Odierno came in his Division was more like a bull in a china shop, and Odierno came under increasing questions as to his methods and tactics.
After rotating out of Iraq, Petreus goes off to a job where he basically re-writes the Army's manual on counterinsurgency, before being sent back there as Viceroy. Odierno--who had a change of heart in how he thought the insurgency should be broken, had been there for a while as the former Viceroy's #2 man. According to this article, it was Odierno who provided the real impetus to get the ball rolling on a surge, working behind his boss's back (then General Casey, who was kicked upstairs to Army Chief of Staff) with his homeys in Washington to change the defeatist strategy to one that can win.
Where Odierno is less honorable here is that Petreus had reached the same conclusion and was working it from a different angle. The two of them together had the force of will to get before the President an option to surge...one that history will show as George Bush's most courageous decision.
That said, Odierno should be wary of so publicly crowing about his end run of his own chain of command. I'm not saying that he shouldn't have done it. I'm saying that he shouldn't so ardently support it as a bureaucratic tactic. Payback's a bitch, General, and I don't think you'd be that pleased with one of your subalterns who opens his own path to the Obama Administration now that you're in charge of Iraq.
Fascinating story here on where the Obama Administration is headed with respect to formulating foreign and national security policy. When he selected General Jim Jones, USMC, as his National Security Adviser, word was that the President bought into Jones' view of highly centralized, White House driven policy making. Jones was said to be reticent to take the job unless he had the power and authority to do it the way he saw fit.
It appears he has that green light. Every administration deals with this issue (the role of the National Security Council/National Security Adviser) differently, but generally speaking, all come to shepherd more power into the White House as time goes on (usually as a result of watching the State Department bureaucracy grind down policy initiatives it finds distasteful to its own institutional objectives).
Given the high profile of our new Secretary of State and the respect gained by our continuing Secretary of Defense, Jones is going to have to pull off a pretty deft balancing act if he's going to make all this work, and his history as a military man is not likely to serve him well. I'm not trying to feed the parody of military men as decision makers; Lord knows, there is enough out there already, and yes, we are quite capable of leading organizations in which people don't have to say "how high" when you say jump. But you do get a sort of "comfort" with "command" after a while, a sense that people ought to just do it because you said so. This kind of thing does not wash in the civilian world, and it surely will not wash in the White House. Jones needs only to hint at a "because I said so" and the Foggy Bottom undercutting machine will go into high warble--as will Defense. Cabinet Secretaries guard their prerogatives very closely, and the kind of organization Jones is suggesting for the White House necessarily diminishes the power and influence of the Cabinet Secretaries.
Want a hint as to what that structure might look like? Take a look at the Project on National Security Reform Website--recognize any of the names there? Jim Jones, Jamie Steinberg (DepSecState), Michele Flournoy (UndSecDef Policy), Denny Blair (Director, National Intelligence). You see, the Obama folks worked this all out before they ever took power. Read the Executive Summary of "Forging a New Shield", PNSR's report on reform of the national security apparatus. It's only 33 pages, and if you're a policy wonk like me, it is wonderful stuff.
Now for the best part....I like what they are doing. The President was elected by the country, and so he should be setting policy through his White House staff. The Cabinet Secretaries are there (in my opinion) to provide input and to execute. Where Obama/Jones et al are headed is toward a more sublime implementation of this idea. The devil will be in the details, and the fun will be in watching this all play out. It will be interesting though to see if the Press covers the inevitable infighting among Jones, Clinton and Gates as gleefully as they did that among Cheney, Powell, Rice and Rumsfeld. Wanna bet?
Joe Biden was sent to Munich to deliver the Obama message to the adoring world. Of interest to me was the line on acting "preventively" rather than "pre-emptively". Ok, someone who believes in the hype....tell me what the difference is. No really. Help me out.
The Bush Administration made a mistake in drawing so much attention to pre-emptive operations. They named the un-named. We always had and always will have the right and duty to act to preserve our safety before the blow is landed by that other guy. Call it pre-emption, call it preventive...the outcome is the same. You schwack the other guy before he schwacks you.
Love reading speeches like this one...could have been given by George Bush, Dick Cheney or Condi Rice....
Peggy Noonan is a serious person, someone whose politics are heart-felt and strongly supported, but whose ability to listen to an alternative argument and recognize its strengths is unmatched among the the Republican intelligentsia. She also unhesitatingly criticizes her own team where they should be criticized. If there is a voice in the media whose style, wit, tone, and substance I most ardently (and unsuccessfully) seek to emulate, it is hers.
Read this little gem. Her analysis of where the President has gone wrong is not the analysis of a someone seeking advantage to her side...it is the analysis of neutrality, and it is powerful. Her evisceration here of the Speaker of the House-- "She's not big enough for the age, is she? She's not up to it" is about as cutting as Peggy gets, but it is as cutting as one could be.
Well, Susan Collins and Arlen Specter have done the deed and earned their 30 Pieces of Silver. They've cozied up with Harry Reid and basically given him enough votes to get the $820B stimulus package through the Senate. Crowing that they got $100B cut, they conveniently forget that the Senate ADDED $100B to the $819B House version, which got 0 Republican votes.
Here's what I'd like to see now. This measure will almost certainly pass the Senate. I hope it does so with the votes only of the waffling deal makers, say 3 Republicans.
Then the Senate Dems will go into Conference with the House Socialists, get the crap beat out of them, and the resulting "conference bill" will be at least $50B more expensive. Susan Collins, Olympia Snow and Arlen Specter will be out on a limb, having made the deal with Senate Dems who CANNOT deliver to them the cuts they insisted on. The resulting bill goes back to the House where it will pass....but without the votes of any Republicans and hopefully the no votes of a few moderate Dems. Then back to the Senate where they get to chew on it all over again, this time with the gang of three chastened at having been burned the first time. Perhaps they'll get enough spine to filibuster the thing, forcing it to be cracked open again and REAL work done to make it stimulative in terms of both taxing and spending.
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The Conservative Wahoo
The Blog: A compendium of thoughts on politics, world affairs, economics, pop culture and social issues, from the center right perspective of me--Bryan McGrath--a University of Virginia graduate who spent a career in the world's greatest Navy keeping my mouth shut about politics and social issues (ok, publicly keeping it shut). Those days are over! I've also invited a few friends to join in, so pull up a chair and chime in where you will. Keep it clean, civil, concise and relevant.
The Fish: The fish is a "coat of arms" for the blog, symbolizing three formative influences in the life of the blog founder. The first is his experience at the University of Virginia--symbolized most importantly by the fish itself, or a caricature of a "Wahoo", the fish we have acquired as an informal nickname. Additionally there is the sword, the sword of a Cavalier. It is not wielded in a threatening manner, as this is a civil blog. But it is there, should it be needed. Thirdly, there is the influence of 21 years in the Navy--symbolized by the anchor on the Wahoo's fin (and again, the sword) . Finally, there is the bowler, tuxedo, and monocle, symbols of a refined, intellectual conservatism, or what I seek to encourage here.
The Policy: I take FULL responsibility ONLY for what I write. I do not take responsibility, nor will I be held responsible, for what my guest bloggers write or for what those who offer comments write. I will occasionally exercise my right to edit/delete both blog posts and comments if they do not meet my view of what clean, civil, concise and relevant mean.