Thursday, December 18, 2008
Shoes
Monday, December 1, 2008
Parties and the economy
As you can probably tell from these selections, I'm not too keen on how the bailout is being handled. I'm hoping the Democrats will not be dragged down by the mistakes already made, and can turn massive government intervention into something good. I'm not yet sure how I would define "good" intervention, but I know it doesn't include bailing out specific industries and encouraging the same kind of economic decision-making that led to the crisis in the first place.
I'm also not a fan of the current two party monopoly. On our way through the vast expanse of North Dakota, I talked the ears off of Paul and his mother about how our system is too focused on the individual candidate and not enough on the party platform. In our system, parties exist mostly to elect individual candidates who generally identify with a subset of their party principles, rather than to produce coherent, differentiated policy platforms and be the machinery that runs government efficiently once elected. In parlimentary systems, people typically elect the party (platform), so there is typically more policy differentiation and a party can ditch dud candidates more easily without losing power (bet the Republicans would love some of that right about now). Plus the whole party coalition-building thing is cool. So, I really like the discussion of "fusion" below, and the explanation of how it differs from IRV. If we're stuck with the individualistic/candidate focus then I'm all for IRV. But it would be nice to move the other direction.
____________________________________________________________________
To profit in this market, go long
And short the market economy, especially with Democrats consolidating their power.
By CHARLES KRAUTHAMMER,
Today's extreme stock market volatility is not just a symptom of fear -- fear cannot account for days of wild market swings upward -- but a reaction to meta-economic events: political decisions that have vast economic effects.
As economist Irwin Stelzer argues, we have gone from a market economy to a political economy. Consider seven days in November. On Tuesday, Nov. 18, Paulson broadly implies he's only using half the $700 billion bailout money. Having already spent most of his $350 billion, he's going to leave the rest to his successor. The message received on Wall Street: I'm done, I'm gone.
Facing the prospect of two months of political limbo, the market craters. Led by the banks (whose balance sheets did not change between Tuesday and Wednesday), the market sees the largest two-day drop in the S&P since 1933, not a very good year.
The next day (Friday) at 3 p.m., word leaks of Timothy Geithner's impending nomination as Treasury secretary. The mere suggestion of continuity -- and continued authoritative intervention during the interregnum by the guy who'd been working hand in glove with Paulson all along -- sends the Dow up 500 points in one hour. Monday sees another 400-point increase, the biggest two-day (percentage) rise since 1987. Why? Three political events: Paulson's weekend Citigroup bailout; the official rollout of Obama's economic team, Geithner and Larry Summers, and Paulson quietly walking back from his earlier de facto resignation by indicating he would be ready to use the remaining $350 billion (with Team Obama input) over the next two months.
That undid the market swoon -- and dramatically demonstrated how politically driven the economy has become.
We may one day go back to a market economy. Meanwhile, we need to face the two most important implications of our newly politicized economy: the vastly increased importance of lobbying and the massive market inefficiencies that political directives will introduce.
Lobbying used to be about advantages at the margin -- a regulatory break here, a subsidy there. Now lobbying is about life and death. Your lending institution or industry gets a bailout -- or it dies.
You used to go to
That will introduce one kind of economic distortion. The other kind will come from the political directives issued by newly empowered politicians.
First, bank presidents are gravely warned by one senator after another about "hoarding" their bailout money. But hoarding is another word for recapitalizing to shore up your balance sheet to ensure solvency. Is that not the fiduciary responsibility of bank directors? And isn't pushing money out the window with too little capital precisely the lending laxity that produced this crisis in the first place? Never mind. The banks will knuckle under to the commissars of Capitol Hill. They control the purse. Prudence will yield to politics.
Even more egregious will be the directives to a nationalized
The Chevy Volt, for example? It has huge remaining technological hurdles, gets 40 miles on a charge and will sell for about $40,000, necessitating a $7,500 outright government subsidy. Who but the rich and politically correct will choose that over a $12,000 gas-powered Hyundai? The new
The ruling Democrats have a choice: Rescue this economy to return it to market control. Or use this crisis to seize the commanding heights of the economy for the greater social good. Note: The latter has already been tried. The results are filed under "History, ash heap of."
____________________________________________________________________
Just say no deal to a new New Deal
FDR's program may have actually prolonged the Great Depression.
By George F. Will
The assumption is that the New Deal vanquished the Depression.
Intelligent, informed people differ about why the Depression lasted so long. But people whose recipe for recovery today is another New Deal should remember that America's biggest industrial collapse occurred in 1937, eight years after the 1929 stock market crash and nearly five years into the New Deal. In 1939, after a decade of frantic federal spending -- President Herbert Hoover increased it more than 50 percent between 1929 and the inauguration of Franklin Roosevelt -- unemployment was 17.2 percent.
"I say after eight years of this administration we have just as much unemployment as when we started," lamented Henry Morgenthau, FDR's Treasury secretary. Unemployment declined when
In "The Forgotten Man: A New History of the Great Depression," Amity Shlaes of the Council on Foreign Relations and Bloomberg News argues that government policies, beyond the Federal Reserve's tight money, deepened and prolonged the Depression. The policies included encouraging strong unions and wages higher than lagging productivity justified, on the theory that workers' spending would be stimulative. Instead, corporate profits -- prerequisites for job-creating investments -- were excessively drained into labor expenses that left many workers priced out of the market.
In a 2004 paper, Harold L. Cole of UCLA and Lee E. Ohanian of UCLA and the Federal Reserve Bank of Minneapolis argued that the Depression would have ended in 1936, rather than in 1943, were it not for policies that magnified the power of labor and encouraged the cartelization of industries. These policies expressed the New Deal premise that the Depression was caused by excessive competition that first reduced prices and wages, and then employment and consumer demand. In a forthcoming paper, Ohanian argues that "much of the depth of the Depression" is explained by
Furthermore,
Bear Stearns? Broker a merger. Lehman Brothers? Death sentence. The $700 billion is for cleaning up toxic assets? Maybe not. Writes Russell Roberts of
"By acting without rhyme or reason, politicians have destroyed the rules of the game. There is no reason to invest, no reason to take risk, no reason to be prudent, no reason to look for buyers if your firm is failing. Everything is up in the air and as a result, the only prudent policy is to wait and see what the government will do next. The frenetic efforts of FDR had the same impact: Net investment was negative through much of the 1930s."
Barack Obama says the next stimulus should deliver a "jolt." His adviser Austan Goolsbee says it must be big enough to "startle the thing into submission." Their theory is that the crisis is largely psychological, requiring shock treatment. But shocks from government have been plentiful.
Unfortunately, one thing government can do quickly and efficiently -- distribute checks -- could fail to stimulate because Americans might do with the money what they have been rightly criticized for not doing nearly enough: save it. Because individual consumption is 70 percent of economic activity,
Obama's "rescue plan for the middle class" includes a tax credit for businesses "for each new employee they hire" in
Here we go again? A new New Deal would vindicate pessimists who say that history is not one damn thing after another, it is the same damn thing over and over.
____________________________________________________________________
How to have minor parties that are more than spoilers
Reintroduce the concept of fusion, and add a dash or two of instant-runoff voting.
By DAVID MORRIS
In the Sixth Congressional District, Michele Bachmann beat Elwyn Tinklenberg by 2 percent. The Independence Party candidate garnered 10 percent of the vote. That much has been widely reported.
Less widely known is that the Independence Party actually endorsed Tinklenberg at its convention. Its members believed that Tinklenberg best represented the party's platform and values. But Minnesota law doesn't permit multiple parties to nominate the same candidate. The Independence Party could be on the ballot only by nominating someone less acceptable than Tinklenberg, a move that effectively defeated its preferred candidate.
A little more than a hundred years ago, Minnesota and the rest of the nation allowed third parties to grow without simply being spoilers. The process is called fusion politics. Third parties can ally (fuse) themselves with major parties (or vice versa). But in the 1880s and 1890s third parties like the People's Party and the Populist Party allied with the Democratic Party and won a number of elections. Which led the minority Republican Party, when it controlled state legislatures, to pass laws that banned fusion. One Republican Minnesota legislator was clear about his party's goal: "We don't propose to allow the Democrats to make allies of the Populists, Prohibitionists, or any other party, and get up combination tickets against us. We can whip them single-handed, but don't intend to fight all creation."
By 1907, fusion had been banned in 18 states. Today, it is legal in only seven states: Connecticut, Delaware, Idaho, Mississippi, New York, South Carolina and Vermont.
In 1994, it returned to the national spotlight when Andy Dawkins ran unopposed for the Minnesota House of Representatives in the Democratic primary but also accepted the endorsement of the fledgling New Party. Minnesota's secretary of state sued. The New Party argued that Minnesota's ban on fusion voting interfered with its members' constitutional right to free speech. The U.S. Supreme Court disagreed. In 1997, the court ruled upheld Minnesota's right to forcibly maintain its two-party monopoly.
The New Party disappeared, but other parties arose and survived in Minnesota. One result is that the winners in statewide and federal elections are elected with fewer than 50 percent of the votes. Since 1994, no gubernatorial candidate has won a majority of the vote. When this year's results are complete, two congressional seats and one Senate seat will have been won by a minority candidate. Except for the unique candidacy of Jesse Ventura, third parties in Minnesota now only play the role of spoilers.
While fusion has fallen out of the spotlight, another voting innovation has gained traction: instant-runoff, or ranked-choice, voting. In this process, voters assign a numerical rank to each candidate. After the election the candidate with the fewest first-place votes is eliminated and his or her second-place votes are redistributed. The process continues until only two candidates remain and one is declared the winner by majority vote. Such voting is now in effect in several cities. In 2006, Minneapolis voters overwhelmingly endorsed the process, but a lawsuit may stall its implementation.
Instant runoff is an important and useful innovation. Based on the country's limited experience, it changes the tone of campaigns for the better because candidates are angling to be not only the first choice of their backers but also the second choice of someone else's. Wider political diversity should result when voters have second and third choices.
Instant runoff and fusion address different ends. Instant runoff focuses on the candidate. Its goal is to ensure that the winner has gained a majority of the votes. Fusion's goal is to build political parties. By allowing minor parties to ally with major parties, it enables them to gain an influence on the major party similar to the influence minor parties exercise in European parliaments where parties that gain more than a certain percentage of the vote earn seats based on the proportion of the vote they win. Political parties are now in disrepute, but they can serve an important and enduring role when they develop a coherent and stable value-based program that offers voters a different framework for policymaking.
Instant runoff should be widely implemented. But we should not ignore the benefits that come from having third parties whose members can nominate the candidate who best represents a party's values and, by doing so, can gain a maturity and influence that will never come if they can only play the role of spoiler.
David Morris is vice president of the Institute for Local Self-Reliance, based in Minneapolis and Washington, D.C.
Sunday, November 16, 2008
POTUS
I am also enjoying all the news stories about normal people transitioning to White House life. It's been awhile since we've had a new president, and even longer since the new president's family were normal-ish people, so perhaps this is standard practice journalism and I just don't remember. For example, I had never given this transition issue any thought until now.
Tuesday, November 4, 2008
Just to check
And yes, I'm totally crying as I watch the speech.
Sunday, October 26, 2008
Additional thoughts
- I find the Strib's argument about how well Coleman would be positioned to reform the Republican party and advance moderate legislation much more compelling than the Clinton ad about voting for Franken because we need to strengthen the Democratic majority. When we have a Democratic president, the need for a stronger majority diminishes. Judging from our experience here in Minnesota, I think there's real value in having to sell some of the other party's moderate members in order to pass major legislation. Also, Americans typically do not consider a congressional member's seniority enough in their voting decision. For a relatively small state, seniority makes all the difference in getting our issues heard. For example, South Dakotans made a really moronic move in voting Tom Daschle out of office in 2002. Coleman has only one term, but the Strib makes a good point--Republicans are retiring in droves and when McCain is defeated the party will hopefully be looking to its more moderate members to help rebuild.
- Comparing the "issues" sections of the Coleman and Franken websites, I think Coleman gets the edge. I feel like I agree with more of Franken's positions but don't agree with him on the issues that are most important to me: health care reform and balancing the federal budget. Former Sen. Dave Durenberger has endorsed Coleman's position on health care which is a big deal because Durenberger is one of the foremost voices on reasonable health care reform. Coleman also supports "pay go" which is getting rare among Republicans since it was tainted by Democrats during the Clinton administration--but this is really the only way we're going to balance the budget. I know a big economic crisis isn't the time to decrease federal government spending and all that blah blah but I'm not too keen on current retirees and near-retirees rebuilding their nest eggs by borrowing against mine. But then he did vote for the bailout, which Franken opposed. So I just don't know.
- But then there's gay marriage. Coleman opposes legalizing gay marriage or civil unions. That's just dumb. But given the composition of Congress and a Democratic president with a lot of other things on his first 100 days agenda, plus the economic and health care crises, it's unlikely the federal government will be doing much on gay rights during the next 6 years.
- Coleman is well-known for questionable morality and putting a pretty face on a troubled family life. I'm not a big "morals" voter so this isn't a huge issue for me, but it's disturbing when people run the shiny-happy family campaign ads when the entire world knows that's crap. I do believe the big blow ups about his apartment and clothes are really much ado about nothing--but still, stuff like this comes up about him all the darn time. Oh, but I thought he had a good response when his dad got caught doin' it with a lady of questionable morals in the Savoy's parking lot.
- Coleman supported the invasion of Iraq and has been generally supportive of Pres. Bush's policies regarding the war. Can possible future good deeds outweigh this colossal mistake? I'm leaning towards no.
Sigh, any one else have helpful thoughts?
Thursday, October 23, 2008
Can I abstain?
I know this sounds terrible, but I honestly think I'm more qualified than all of them. That's not a good sign. And Norm Coleman is the only one of them that sounds like he has a brain on his shoulders. That's a really bad sign.
So if you want to feel my pain, there's a great website that breaks down the debate by question (so you can skip over the questions that don't interest you much and fast forward through the candidates you find annoying).
If anyone has compelling reasons to vote for any of the candidates feel free to share--I need some help here. So far the only one who has made a good pitch to me is the new Hillary Clinton TV ad in favor of Al Franken. It was such a clear textbook appeal to independents. They must be really worried about the Barkley factor.
Saturday, August 9, 2008
Nice work
- David Brooks on why Obama isn't winning by a landslide
- Paul Krugman on Republican reliance on know-nothing politics
Also, the Economist continues to pump out amazing analysis of business, markets, and politics. I might need to subscribe. Some recent highlights:
- First in a series of profiles of battleground states
- Discussion of the evolving role of the Fed (I'm telling you, this is the time to be a Fed economist--except that the whole house of cards might just fall apart soon)
- The perils of the housing bill
Sunday, June 29, 2008
War of the acronyms
Props to these die-hard Clinton fans for coining the term puma, which stands for "Party Unity My Ass." They also came up with HOUND, which stands for "Hell, Obama's Unqualified, No Deal " to counter an Obama supporter's use of HOUND to mean "Hillary Obama United Not Divided" in response to the original puma.Click here if you want to hear "Hound Dog" by Elvis Presley "groovin' on a HillPod." (I will give them HillRaisers despite the annoying cutsey-ness, but I will most certainly not give them Hillpod.)
On a sidenote, did anyone else notice they switched back to "Variety" from "Source"? Good move, whoever made that call. What does "Source" mean anyway? And yes, I noticed this while cutting crossword puzzles out of old newspapers for entertainment on my trip. I am just that nerdy. And lazy too, judging from the large stack of papers I had yet to recycle.
Tuesday, May 13, 2008
All for naught
Oh, here's a funny session moment I forgot to post a long time ago.
And finally, I find the public discussion on the Governor's "sex joke" to be really entertaining. According to the Strib, "speculation is rife whether Pawlenty's wisecrack about his sex life was a gaffe or a calculated political move." A calculated political move? Really? I mean, really? I propose we channel all the energy spent on useless and absurd punditry into something more productive, like ending world hunger or building capacity for rapid disaster response in Asia.
(and yes, Jim, this post is mostly for you)
Thursday, March 27, 2008
Wine-Buyer Freedom Day
A provision in the current state House budget balancing bill would allow liquor stores within a certain distance from the Xcel Energy Center to open for business on the Sunday during the Republican National Convention. (Bars could also remain open until 4am the whole week).
If this provision passes, I hope you will join me in a most triumphant purchase of wine on the Lord's day. I might buy some tequila too, for good measure. Because, really, why the fuck can't we buy liquor on Sundays? Should we have imposed the smoking ban on every day except Monday?
Wednesday, March 19, 2008
Not quite right
...And then I caught sight of a video feed from another committee on one of the TVs scattered around the capitol for lobbyists to follow floor action. What bill was the committee considering? Senate File 3165: Animal chiropractic care requirements established.
Wednesday, February 6, 2008
Some ideas are bad
but-not-remotely-a-victory speech?
Mitts for Mitt? See for yourself (you can see one in the still, but get a better look at 00:16):
Saturday, January 12, 2008
Research
Tuesday, January 8, 2008
I sucked at geometry
While driving home from work listening to pre-NH poll closing babble on how Iowa was a referendum on change vs. experience, it occurred to me that Hillary Rodham Clinton must feel like she just can't win. Dreamy Bill asked her to fix health care within months of his election, which she tried pretty valiantly to do, but then she got yanked for not having enough Washington experience to do it right. So she went out and got a bunch of Washington experience, and then got yanked in Iowa for it.
While trying not to hit the big scary post in the garage listening to a Writers Guild guy walk the line between calling Jon Stewart a scab and sticking it to Big Media, it occurred to me that the very thing writers are striking about--the proliferation of TV content on DVD and the internet (for which they apparently don't get paid directly)--is what is preventing a popular backlash against the media corporations. So TV stations aren't airing new shows? Well, I'll just pop in the Gilmore Girls first season and fire up My So-Called Life reruns on ABC.com. Problem solved, strike be damned.
That was the parallel. Careful, if you blink you miss it.
Monday, January 7, 2008
Les anes et les elephants
In contrast to all the crap, I found this commentary by David Brooks to be a very plausible and well-reasoned discussion of the Iowa results. (This is the NYT version; I read the Strib reprint which for no apparent reason has a different title.)
Thursday, July 19, 2007
Picking a horse
While playing the ponies was fun and exciting, it got me thinking about the more daunting work of picking a candidate for president. While I am still smarting from the last few times state and federal Dems chose candidates (um, can you say Mike Hatch and John Kerry?), I am cheered greatly by the fact that I don't hate any of the current front-runners for president. But I am struggling to chose a favorite among them. Here's where I am right now--any thoughts on the matter are most welcome.
Johnny Boy - As most of you know, I threw in with this guy early on last time and still do not regret it. While reading his billionth quote about"Two Americas" in the paper last week it hit me--his antipoverty stance must be totally sincere. Last time around an antipoverty platform helped catapult him to success (with some help from nice eyes, great hair, and a drawl). This year it is barely making headlines. If it wasn't sincere I think he would have changed tactics long ago. It's really too bad no one gets jazzed up about alleviating poverty, and there's the whole being a millionaire lawyer problem. But I can't help it, I still like the guy--and his politics. I can also tell you from personal experience that those caucus-going Iowans love good ol' Johnny Boy like he was their long-lost grandson.
Ms. Rodham - I just have such mixed feelings about her. On the one hand she is the only front-runner with enough experience to really understand Washington. But this doesn't seem to help her get much done. I think she's a really smart lady, and am not ashamed to admit I'd vote for her solely because she is a woman (and it doesn't hurt that she's married to Billy). But I can't help feeling like she is the John Kerry of 2008--and given how much I thought he sucked as a candidate that comparison is really bringing her down in my book.
BaRock! - I like that he's one smart dude, and the most Clintonesque well-spoken. Bonus points for being (somewhat) midwestern. I know they're all lawyers, but his particular focus on civil rights and constitutional law would be a good mix for a president. I'm marking him down on electability, though, because I think he is the Edwards of 2008. Even if he is qualified to be president, people will think he isn't and choose the "experienced" candidate who so totally lacks pizazz to the point where all a Republican has to do to win is walk upright unassisted.
So, there you have it. These early thoughts are obviously based on broad generalizations about the candidates--which would normally be enough to weed out a few folks this early in the race. But perhaps that won't work this year, and a closer look at policy positions is required. Too bad folks who run for national office typically avoid policy positions.
Tuesday, July 10, 2007
Dear delegate
I'm sure I will have many more complaints along the way, but for now I have just one plea: check your grammar before sending me crap! Take for example the first sentence of a letter from Mike Ciresi for Senate:
There is a deep concern among Minnesotans about the course that our state and nation is taking.Or the first sentence of a letter I received last season from Matt Entenza's campaign:
In the tradition of great Minnesota attorney generals...(It would have been much less egregious if he was running for some other post.) So please, candidates, find an English teacher or a really nerdy friend to read your letters before you print a thousand copies.
