"It will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking. We're about to elect a brilliant 47-year-old senator president of the United States of America. Remember I said it standing here if you don't remember anything else I said. Watch, we're gonna have an international crisis, a generated crisis, to test the mettle of this guy."
-- Joe Biden in Seattle, Washington, on Sunday 10/19/2008
The Bay of Pigs crisis was not "generated" by some outside actor. It was an American initiative, an "invasion" of Cuba by Cuban partisans recruited, trained and funded by the CIA. The project was doomed in concept, poorly planned and executed, and belatedly undercut by JFK's cancellation of the American air support promised in the original plan.
The effort was launched under Kennedy's go-ahead. He lacked the experience to properly review the plan, and the confidence to overrule the career national security experts who recommended it.
JFK did better as he went on. His Berlin speech is famous, and the Cuban Missile Crisis is regarded as a triumph. But careful analysis of the missile crisis suggests that the rewards weren't worth the risks, and that our success was due in part to luck and Russian prudence. In Viet Nam his policy was a muddle of contradictory goals and beliefs that the stage for a disaster.
This mixed record came at a moment of national consensus on the strategy and tactics of containing Soviet Russia. Kennedy was largely an implementer of a Cold War architecture established by a bipartisan collection of "wise men" led by Truman and Eisenhower. We don't currently have such a consensus response to Islamist terror, and the development of that consensus is among our chief foreign policy problems.
Biden invokes Kennedy to suggest that Obama's brilliance will provide foreign policy successes similar to Kennedy's. We ought to consider whether it will provide similar risks, and ask how lucky we're feeling.
Wednesday, October 22, 2008
Wednesday, October 15, 2008
No Galt
Dr. Helen wonders if we should go Galt. I left the following monster comment, because I'm a hack without manners or style:
The coming government will be more "progressive" than its citizens.
-- The left-liberals took over the Democratic party.
-- The Democrats are winning because the Republicans were unprincipled spenders who ignored their duties.
-- Even the good ones hardly understand their principles -- if McCain will pay off overextended borrowers, well, the improvement over Obama is marginal at best.
-- The press don't understand either, and look for conventional wisdom that can be safely repeated.
And still McCain was winning on character before the bailout demonstrated executive and legislative incompetence. We might know the Democrats can be worse, but the less alert probably find it hard to imagine.
A Galt Strike attacks a _society_ that insists on taking. Ours is a free working society inherited from immigrants, whose government is momentarily seized by political entrepreneurs. The solution is to take back those institutions, starting with a Republican party. The electorate will choose self-reliance and freedom, but it has to be offered truly and fairly.
And a Galt Strike imagines that a reasonable government emerges naturally, as people learn their lesson. It won't. Abuse of power is the most natural human instinct. _Every_ democracy is vulnerable to politicians adapting moral arguments to justify expansion of their powers. The true principles of the civil rights movement are as subject to political misappropriation as the medieval Church.
A free society requires constant resistance against status accumulation by political entrepreneurs, and vigilance against their innovations. And yet government must still adapt to real changes in technology, demographics and trade, and society must still reject any real errors conserved in its institutions. Government isn't easy, and while its principles maybe "natural", their actual enactment isn't.
It's not enough for the Galts to produce economically. They have to produce politically, too.
The coming government will be more "progressive" than its citizens.
-- The left-liberals took over the Democratic party.
-- The Democrats are winning because the Republicans were unprincipled spenders who ignored their duties.
-- Even the good ones hardly understand their principles -- if McCain will pay off overextended borrowers, well, the improvement over Obama is marginal at best.
-- The press don't understand either, and look for conventional wisdom that can be safely repeated.
And still McCain was winning on character before the bailout demonstrated executive and legislative incompetence. We might know the Democrats can be worse, but the less alert probably find it hard to imagine.
A Galt Strike attacks a _society_ that insists on taking. Ours is a free working society inherited from immigrants, whose government is momentarily seized by political entrepreneurs. The solution is to take back those institutions, starting with a Republican party. The electorate will choose self-reliance and freedom, but it has to be offered truly and fairly.
And a Galt Strike imagines that a reasonable government emerges naturally, as people learn their lesson. It won't. Abuse of power is the most natural human instinct. _Every_ democracy is vulnerable to politicians adapting moral arguments to justify expansion of their powers. The true principles of the civil rights movement are as subject to political misappropriation as the medieval Church.
A free society requires constant resistance against status accumulation by political entrepreneurs, and vigilance against their innovations. And yet government must still adapt to real changes in technology, demographics and trade, and society must still reject any real errors conserved in its institutions. Government isn't easy, and while its principles maybe "natural", their actual enactment isn't.
It's not enough for the Galts to produce economically. They have to produce politically, too.
Friday, October 10, 2008
Ayers, The Issue
Candidate McCain's focus on Candidate Obama and Professor Ayers is an odd thing.
It seems unlikely to affect the election, which nows seems entirely determined by reactions to the markets. McCain's understanding of the situation is better only in that he assigns important responsibility to the GSEs, worse in that he has been kind of flailing around and that his latest mortgage proposal is a flat-out bailout of reckless behavior. Neither candidate understands the banking markets, or the measures required to minimize the damage to them, or the limitations on the help such stabilization provides the larger economy. Before this, McCain could argue that Obama isn't ready for the Presidency. Now it seems that neither of them are ready to handle our financial problems -- so Obama's relative callowness is remarkably diminished. It's obvious that a Republican Administration has fumbled the past month badly, and that they are clearly associated with many of the regulatory problems leading up to this. The Democrats bear important responsibility too, but that is far less clear. So the crisis has minimized Obama's relative weaknesses, and reminded voters of Republican incompetence. They are going to their initial instinct to vote against the Republican.
So raising the Ayers relationship and the background questions is unlikely to matter much, and it is likely to agitate the political debate. On the other hand, they are legitimate questions that the press should have addressed a year ago. It hardly seems irresponsible to notice the absence of scrutiny before we elect the guy. Then again, if McCain was going to raise those issues, shouldn't have done so when there was time to discuss them? But it looked like he wouldn't need to, so why get everybody all worked up?
The background questions capsulize the larger situation: our elites have departed so far from factual, reasoned discussion, and neglected the fundamental issues so completely, that we now find ourselves without any good choices. No choice leads toward any solution. We're just wandering around here.
It seems unlikely to affect the election, which nows seems entirely determined by reactions to the markets. McCain's understanding of the situation is better only in that he assigns important responsibility to the GSEs, worse in that he has been kind of flailing around and that his latest mortgage proposal is a flat-out bailout of reckless behavior. Neither candidate understands the banking markets, or the measures required to minimize the damage to them, or the limitations on the help such stabilization provides the larger economy. Before this, McCain could argue that Obama isn't ready for the Presidency. Now it seems that neither of them are ready to handle our financial problems -- so Obama's relative callowness is remarkably diminished. It's obvious that a Republican Administration has fumbled the past month badly, and that they are clearly associated with many of the regulatory problems leading up to this. The Democrats bear important responsibility too, but that is far less clear. So the crisis has minimized Obama's relative weaknesses, and reminded voters of Republican incompetence. They are going to their initial instinct to vote against the Republican.
So raising the Ayers relationship and the background questions is unlikely to matter much, and it is likely to agitate the political debate. On the other hand, they are legitimate questions that the press should have addressed a year ago. It hardly seems irresponsible to notice the absence of scrutiny before we elect the guy. Then again, if McCain was going to raise those issues, shouldn't have done so when there was time to discuss them? But it looked like he wouldn't need to, so why get everybody all worked up?
The background questions capsulize the larger situation: our elites have departed so far from factual, reasoned discussion, and neglected the fundamental issues so completely, that we now find ourselves without any good choices. No choice leads toward any solution. We're just wandering around here.
Thursday, October 9, 2008
Meltdown
"The government would buy the existing troubled loans at face value -- absorbing the haircut itself -- and the Federal Housing Administration would issue a new, federally guaranteed 30-year fixed-rate loan, based on the property's present value, at a "manageable" interest rate, the McCain camp said."
WSJ, 10/9/2007
The idea is based on Martin Feldstein's proposal, which would lend homeowners with negative equity 20% of their principal at government rates on their personal credit. This would give them an incentive to keep the house, and reduce their interest payments, without reducing their total debt. I'm not sure it's a great idea, and I wonder how aggressively politicians would enforce those personal notes, but it doesn't give the homeowners a pass on overextending themselves.
McCain would. Homeowners here get government funded forgiveness of excess debt. I haven't seen any suggestion that the government would get a position in any capital appreciation of the house. This might reduce foreclosures and thus downward pressure on housing prices. But that pressure is only temporary anyway -- the long term value of mortgages is driven by the long-term value of the house, and that is driven by real estate economics which are temporarily distorted by the foreclosures. We don't know the "right" level for housing prices, and probably won't for a while -- if they go lower still, are we going fund a second round of principal reductions?
I can't support this. It's a huge incentive to irresponsible financial behavior, added to existing government incentives in health care and disaster relief, and sets an ominous precedent for handling coming problems with retirement savings. Even if it did help with the current situation, we still might well be better off suffering a recession than telling people the government will bail out their stupid decisions. And I certainly don't want to do this without a lot more thought McCain has given this, and a lot less suspicion of political motivation.
McCain is really reaching here. Some of this is panic, some pandering. I don't think he understands economics sufficiently to understand the moral hazard problems of this, or how they differ from those in the proposals of Feldstein and others. But whether its errors come from ignorance or ambition, I can't agree to something this bad.
WSJ, 10/9/2007
The idea is based on Martin Feldstein's proposal, which would lend homeowners with negative equity 20% of their principal at government rates on their personal credit. This would give them an incentive to keep the house, and reduce their interest payments, without reducing their total debt. I'm not sure it's a great idea, and I wonder how aggressively politicians would enforce those personal notes, but it doesn't give the homeowners a pass on overextending themselves.
McCain would. Homeowners here get government funded forgiveness of excess debt. I haven't seen any suggestion that the government would get a position in any capital appreciation of the house. This might reduce foreclosures and thus downward pressure on housing prices. But that pressure is only temporary anyway -- the long term value of mortgages is driven by the long-term value of the house, and that is driven by real estate economics which are temporarily distorted by the foreclosures. We don't know the "right" level for housing prices, and probably won't for a while -- if they go lower still, are we going fund a second round of principal reductions?
I can't support this. It's a huge incentive to irresponsible financial behavior, added to existing government incentives in health care and disaster relief, and sets an ominous precedent for handling coming problems with retirement savings. Even if it did help with the current situation, we still might well be better off suffering a recession than telling people the government will bail out their stupid decisions. And I certainly don't want to do this without a lot more thought McCain has given this, and a lot less suspicion of political motivation.
McCain is really reaching here. Some of this is panic, some pandering. I don't think he understands economics sufficiently to understand the moral hazard problems of this, or how they differ from those in the proposals of Feldstein and others. But whether its errors come from ignorance or ambition, I can't agree to something this bad.
Too Busy, Too Foolish
"But health insurance is complicated and scary; most people don't have the time or expertise necessary to make wise choices. They rely on their employers to make sure they're getting a good deal — and to fight for them if the insurance companies try to cheat them. And with many employers slouching away from that responsibility, the public seems ready to turn to the government for protection. "
-- Joe Klein, Time 10/9/2008
I can't imagine a better description of the welfare state's infantilization of the public. If people won't take responsibility for their own health, just exactly are they responsible for? A person who won't take care of themselves has no one to blame but themself when they are told what to do and what to think.
And I'd add that health care's unavoidable complications are compounded by regulatory requirements like the Mental Health Parity Act that Congress just added, in an afterthought, to the bailout bill.
And just what exactly is someone to do if the government doesn't make wise choices for them, or refuses to fight for them? What alternatives will they have, what resources can they bring to bear?
A healthy society raises people who take the time to take of themselves, and can develop the expertise they need to do so. We should help those few that could never manage for themselves (though it's necessary to add that our moral responsibility doesn't imply their political right). That's what conservatism ought to be about. It's failing because our "conservative" politicians are too interested in incumbency to take on a tough case.
And I'm afraid that McCain, with his proposal to write down overextended borrowers on the federal dime, is hardly more principled.
-- Joe Klein, Time 10/9/2008
I can't imagine a better description of the welfare state's infantilization of the public. If people won't take responsibility for their own health, just exactly are they responsible for? A person who won't take care of themselves has no one to blame but themself when they are told what to do and what to think.
And I'd add that health care's unavoidable complications are compounded by regulatory requirements like the Mental Health Parity Act that Congress just added, in an afterthought, to the bailout bill.
And just what exactly is someone to do if the government doesn't make wise choices for them, or refuses to fight for them? What alternatives will they have, what resources can they bring to bear?
A healthy society raises people who take the time to take of themselves, and can develop the expertise they need to do so. We should help those few that could never manage for themselves (though it's necessary to add that our moral responsibility doesn't imply their political right). That's what conservatism ought to be about. It's failing because our "conservative" politicians are too interested in incumbency to take on a tough case.
And I'm afraid that McCain, with his proposal to write down overextended borrowers on the federal dime, is hardly more principled.
Wednesday, October 8, 2008
Debate
Not a good night for McCain. Why exactly is it a good idea for me and my fellow taxpayers to help our overextending neighbors pay for houses that were always beyond their means? Yes, he wants to put a floor under housing prices -- but price setting is what a government does worst.
It's a shame that McCain didn't realize years ago that political power is about economics, and gone to school on the subject. He's so good, but he lacks any central and convincing message on the economy, or explanation of how Washington's narcissism threatens it.
Obama -- he's like R.E.M. The first five minutes sound great, but the more you listen, the more every answer sounds the same, and then you wonder why that is, and then you start to realize the whole thing is just one set of talking points after another. I don't hear any serious effort to engage any subject, and he treats every topic as an opportunity to sound prepared and thoughtful rather than communicate his own philosophy. I find this kind of thing maddening, because there is absolutely no chance of convincing a guy like this of anything, and very little hope of learning anything from him.
I'm worried the next four years are going to be pretty bad.
It's a shame that McCain didn't realize years ago that political power is about economics, and gone to school on the subject. He's so good, but he lacks any central and convincing message on the economy, or explanation of how Washington's narcissism threatens it.
Obama -- he's like R.E.M. The first five minutes sound great, but the more you listen, the more every answer sounds the same, and then you wonder why that is, and then you start to realize the whole thing is just one set of talking points after another. I don't hear any serious effort to engage any subject, and he treats every topic as an opportunity to sound prepared and thoughtful rather than communicate his own philosophy. I find this kind of thing maddening, because there is absolutely no chance of convincing a guy like this of anything, and very little hope of learning anything from him.
I'm worried the next four years are going to be pretty bad.
Tuesday, October 7, 2008
Ayers
For all the left-wing blather about "fascism", this country is fundamentally safe from political violence precisely because of its disgust at people like Bill Ayers. No serious person would ever join up with a craven coward like that precisely because they understand that good arguments are enough in this country, and because no one wants to live in a country where politics are settled by guns. Most serious people would be embarrassed to even be associated with him.
Barack Obama doesn't seem to share that revulsion. That's a problem.
Barack Obama doesn't seem to share that revulsion. That's a problem.
Friday, October 3, 2008
Shell Game
Chairman Frank is happily reassuring his colleagues that the bill gives Treasury the power to buy mortgages and reset their principal and interest rates, and that the Secretary has been told that the bill is passed with the understanding he will do so.
It would be hardly surprising if any gains the fund makes on some investments were diverted to marking down the principal on other mortgage investments. If there are losses, those go to the taxpayer. If there are gains, they will go to Democratic constituencies.
It's a remarkably bad bill, and Chairman Frank is promising he'll be back to work on regulation next year. Certainly the Democrats don't sound unhappy that this is passing. It's depressing to see so little understanding of our financial system, and so little resistance by confused members against the social pressure for this.
It's a landmark event, the beginning of a new era of Democratic leadership and progressive policies.
It would be hardly surprising if any gains the fund makes on some investments were diverted to marking down the principal on other mortgage investments. If there are losses, those go to the taxpayer. If there are gains, they will go to Democratic constituencies.
It's a remarkably bad bill, and Chairman Frank is promising he'll be back to work on regulation next year. Certainly the Democrats don't sound unhappy that this is passing. It's depressing to see so little understanding of our financial system, and so little resistance by confused members against the social pressure for this.
It's a landmark event, the beginning of a new era of Democratic leadership and progressive policies.
Wednesday, October 1, 2008
Second Verse, Same As The First
Everyone is agreed that the House will pass the next bill. They have to do something, right? They're hearing from their districts, and the new bill has some tax reductions and the FDIC deposit insurance increase, and they'll do the right thing.
Except, I didn't hear from any House Republicans until this evening, and Roy Blount wasn't so convincing. The only yes vote they could get to discuss it on McNeil was Ray LaHood, who is retiring. The Blue Dogs won't like the tax increases without offsets, and the growing lists of special items is making it harder to regard the matter as truly that serious.
I've noticed that CNBC et al have got the memo that this is a "rescue" rather than a "bailout". Dissenting opinions have vanished from the airwaves, and the Great and the Wise are out in force insisting this is the only way. But no one can explain how this works. Buffet was on Rose tonight saying that bought at market, the government will make money here -- but Bernanke and Paulson have said they will buy above market.
Painting the opposition as uninformed and ideological won't necessarily help. Members of the House minority don't get a lot of respect in the first place -- why are House Republicans going to care about the opinions of people who won't talk to them in any case? They may even welcome the opportunity to show their independence from the Establishment. I'm by no means convinced that this bill passes the House.
Except, I didn't hear from any House Republicans until this evening, and Roy Blount wasn't so convincing. The only yes vote they could get to discuss it on McNeil was Ray LaHood, who is retiring. The Blue Dogs won't like the tax increases without offsets, and the growing lists of special items is making it harder to regard the matter as truly that serious.
I've noticed that CNBC et al have got the memo that this is a "rescue" rather than a "bailout". Dissenting opinions have vanished from the airwaves, and the Great and the Wise are out in force insisting this is the only way. But no one can explain how this works. Buffet was on Rose tonight saying that bought at market, the government will make money here -- but Bernanke and Paulson have said they will buy above market.
Painting the opposition as uninformed and ideological won't necessarily help. Members of the House minority don't get a lot of respect in the first place -- why are House Republicans going to care about the opinions of people who won't talk to them in any case? They may even welcome the opportunity to show their independence from the Establishment. I'm by no means convinced that this bill passes the House.
Subscribe to:
Posts (Atom)